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 5, 1998
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.)
2859 PACES FERRY ROAD, SUITE 2000, ATLANTA, GEORGIA 30339
---------------------------------------------------------
(Address of principal executive offices and zip code)
(770) 437-6800
-----------------------------------------------------
(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 August 12, 1998:
Class Number of Shares
----- ----------------
Class A Common Stock, $.10 par value per share 46,707,733
Class B Common Stock, $.10 par value per share 5,710,106
<PAGE>
INTERFACE, INC.
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Balance Sheets - July 5, 1998 and 3
December 28, 1997
Statements of Income - Three Months and 4
Six Months Ended
July 5, 1998 and June 29, 1997
Statements of Comprehensive Income - 4
Three Months and Six Months Ended July 5,
1998 and June 29, 1997
Statements of Cash Flows - Six Months 5
Ended July 5, 1998 and June 29, 1997
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of 11
Financial Condition and Results of
Operations
Item 3. Quantitative and Qualitative 13
Disclosures about Market Risk
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of 14
Security Holders
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
INTERFACE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
ASSETS JULY 5, DECEMBER 28,
- ------ 1998 1997
-------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and Cash Equivalents $ 10,633 $ 10,212
Accounts Receivable 201,690 177,977
Inventories 191,446 157,630
Deferred Tax Asset 5,176 5,156
Prepaid Expenses 35,887 24,265
---------- --------
TOTAL CURRENT ASSETS 444,832 375,240
PROPERTY AND EQUIPMENT, less
accumulated depreciation 244,094 228,781
EXCESS OF COST OVER NET ASSETS ACQUIRED 287,894 278,597
OTHER ASSETS 48,457 46,945
---------- --------
$1,025,277 $929,563
========== ========
LIABILITIES AND COMMON SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes Payable $ 27,726 $ 22,264
Accounts Payable 77,622 79,279
Accrued Expenses 83,634 87,543
Current Maturities of Long-Term Debt 2,887 2,751
---------- --------
TOTAL CURRENT LIABILITIES 191,869 191,837
LONG-TERM DEBT, less current maturities 268,194 264,499
SENIOR SUBORDINATED NOTES 125,000 125,000
DEFERRED INCOME TAXES 31,975 28,873
---------- --------
TOTAL LIABILITIES 617,038 610,209
---------- --------
Minority Interest 2,989 2,989
Common Stock 5,593 2,776
Additional Paid-In Capital 233,221 161,584
Retained Earnings 216,079 197,906
Accumulated Other Comprehensive Income - Foreign Currency
Translation (31,897) (28,155)
Treasury Stock, 7,200
Class A Shares, at Cost (17,746) (17,746)
---------- --------
$1,025,277 $929,563
========== ========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3<PAGE>
<TABLE>
<CAPTION>
INTERFACE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED SIX MONTHS ENDED
JULY 5, JUNE 29, JULY 5, JUNE 29,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $ 316,864 $ 271,746 $ 635,816 $ 529,091
Cost of Sales 211,218 182,342 422,409 356,774
--------- --------- --------- ---------
Gross Profit on Sales 105,646 89,404 213,407 172,317
Selling, General and Administrative Expenses 77,577 66,855 158,200 129,811
--------- --------- --------- ---------
Operating Income 28,069 22,549 55,207 42,506
Other (Expense) Income - Net (9,072) (9,606) (19,490) (19,149)
--------- --------- --------- ---------
Income before Taxes on Income 18,997 12,943 35,717 23,357
Taxes on Income 7,333 4,983 13,770 9,044
--------- --------- --------- ---------
Net Income $ 11,664 $ 7,960 $ 21,947 $ 14,313
========= ========= ========= =========
Basic Earnings Per Share .22 .17 .43 .31
========= ========= ========= =========
Diluted Earnings Per Share .22 .17 .42 .31
========= ========= ========= =========
Average Shares Outstanding -- Basic 52,183 47,240 51,099 46,204
========= ========= ========= =========
Average Shares Outstanding -- Diluted 54,015 48,150 52,930 47,856
========= ========= ========= =========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<TABLE>
<CAPTION>
INTERFACE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(IN THOUSANDS)
THREE MONTHS ENDED SIX MONTH ENDED
JULY 5, JUNE 29, JULY 5, JUNE 29,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Income $ 11,664 $ 7,960 $ 21,947 $ 14,313
Other Comprehensive Income, Net of Tax
Foreign Currency Translation Adjustment 1,796 (4,692) (3,742) (15,452)
--------- --------- --------- ---------
Comprehensive Income $ 13,460 $ 3,268 $ 18,205 $ (1,139)
========= ========= ========= =========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4<PAGE>
<TABLE>
<CAPTION>
INTERFACE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
JULY 5, JUNE 29,
1998 1997
(IN THOUSANDS)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES: $(6,361) $20,003
------- -------
INVESTING ACTIVITIES:
Capital expenditures (20,831) (22,038)
Acquisitions of businesses (42,559) (14,468)
Other (3,347) (4,366)
------- -------
(66,737) (41,102)
------- -------
FINANCING ACTIVITIES:
Net borrowing (reduction) of long-term debt 8,487 16,086
Issuance of common stock 69,581 9,458
Dividends paid (3,774) (3,061)
------- -------
74,294 22,483
------- -------
Net cash provided by (used for) operating,
investing and financing activities 1,196 1,384
Effect of exchange rate changes on cash (775) (330)
------- -------
CASH AND CASH EQUIVALENTS:
Net increase (decrease) during the period 421 1,054
Balance at beginning of period 10,212 8,762
------- -------
Balance at end of period $10,633 $ 9,816
======= =======
</TABLE>
See accompanying notes to consolidated condensed financial statements.
5
<PAGE>
INTERFACE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - CONDENSED FOOTNOTES
As contemplated by the Securities and Exchange Commission (the
"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 December 28,
1997, as filed with the Commission.
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 full year.
NOTE 2 - INVENTORIES
<TABLE>
<CAPTION>
Inventories are summarized as follows:
JULY 5, DECEMBER 28,
1998 1997
---- ----
<S> <C> <C>
Finished Goods $119,505 $91,016
Work in Process 31,446 29,094
Raw Materials 40,495 37,520
-------- --------
$191,446 $157,630
======== ========
</TABLE>
NOTE 3 - BUSINESS ACQUISITIONS AND DIVESTITURES
On December 30, 1997, the Company completed the acquisition of the
European carpet businesses of Readicut International plc ("Readicut"),
for an estimated $50 million, subject to final adjustments. After the
planned divestiture of certain assets of Readicut, including its Network
Flooring dealer division and Joseph, Hamilton & Seaton Ltd., the
Company's final investment for the retained Readicut businesses are
expected to be less than $15 million. The retained businesses will
include Firth Carpets Ltd., based in Brighouse, West Yorkshire, a leading
manufacturer of high quality woven and tufted carpet primarily for the
contract markets; and a 40% interest in Vebe Floorcoverings BV, located
in the Netherlands, a leading manufacturer of needle punch carpet.
In December 1997, the Company sold certain assets related to the
commercial manufacture of zinc diacrylate, a chemical compound used in
the production of golf balls, for $14.1 million in cash. An immaterial
gain was realized on the sale. The Company generated 1997 sales of $7.9
million and operating income of $1.1 million related to the manufacture
of this chemical compound.
During 1997, the Company acquired 100% of the outstanding capital
stock of four floorcovering contractors: Canaan Corporation, based in
Connecticut; Carpet Services of Tampa, Inc., based in Florida; Floormart,
Inc., based in California; and Carpet Solutions Holdings Pty Ltd., based
in Queensland, Australia. These contractors are engaged primarily in the
installation of commercial floorcoverings. The Company also acquired
100% of the outstanding capital stock of Facilities Resource Group, Inc.,
an office furniture installation company. As consideration, the Company
issued 515,168 shares of Class A Common Stock valued at approximately
$3.5 million and paid $11.1 million in cash. All transactions have been
accounted for as purchases, and accordingly, the results of operations of
the acquired companies since their acquisition dates have been included
within the consolidated financial statements. The excess of the purchase
price over the fair value of the net assets acquired was approximately
$17.5 million and is being amortized over 25 years.
In June 1997, the Company acquired 100% of the outstanding common
stock of Camborne Holdings, Ltd., a manufacturer of interior fabrics
based in West Yorkshire, U.K. for approximately $19.9 million, which was
comprised of $17.1 million in cash and 255,612 shares of Class B Common
Stock valued at approximately $2.8 million. The transaction was
accounted for as a purchase. The results of operations of Camborne have
been included within the consolidated financial statements since the
acquisition date. The excess of the purchase price over the fair value
of the assets was approximately $16.8 million and is being amortized over
40 years.
6<PAGE>
NOTE 4 - CONCURRENT PUBLIC OFFERINGS
On April 2, 1998, the Company completed concurrent public offerings
of $150 million aggregate principal amount of 7.30% Senior Notes due 2008
and 3.450 million shares of Class A Common Stock. The Company intends to
use the net proceeds of both offerings of $212.7 million to reduce
amounts outstanding under its senior credit facility, and for general
corporate purposes, including working capital and future acquisitions.
NOTE 5 - STOCK SPLIT
On June 15, 1998, the Company paid a two-for-one stock split,
effected in the form of a 100% stock dividend, to all common shareholders
of record as of June 1, 1998. In connection with the stock split, the
Company issued 26,079,136 shares of Common Stock in the aggregate. All
references to shares of the Company's Common Stock contained elsewhere in
these Notes have been retroactively adjusted to reflect the stock split.
NOTE 6 - EARNINGS PER SHARE AND DIVIDENDS
In March 1997, the FASB issued SFAS 128, "Earnings per Share." The
new Standard simplifies the computation of earnings per share and
requires presentation of two amounts, basic and diluted earnings per
share. As required by the Standard, the Company has retroactively
restated earnings per share data for all periods presented.
Basic earnings per share is computed by dividing income available to
common shareholders by the weighted average number of shares of Class A
and Class B Common Stock outstanding during the period. Shares issued or
reacquired during the period have been weighted for the portion of the
period that they were outstanding. Basic earnings per share has been
computed based upon 51,099 shares and 46,204 shares outstanding for the
periods ended July 5, 1998 and June 29, 1997, respectively. Diluted
earnings per share is calculated in a manner consistent with that of
basic earnings per share while giving effect to all dilutive potential
common shares that were outstanding during the period. Diluted earnings
per share has been computed based upon 52,930 shares and 47,284 shares
outstanding for the periods ended July 5, 1998 and June 29, 1997,
respectively. For the purposes of computing earnings per common share
and dividends per common share, the Company is treating as treasury stock
(and therefore not outstanding) the shares that are owned by a wholly-
owned subsidiary (7,200,000 Class A shares recorded at cost).
The following is a reconciliation from basic earnings per share to
diluted earnings per share for each of the periods presented:
<TABLE>
<CAPTION>
(In Thousands Except Per Share)
Average
For the Six-Month Shares Earnings
Period Ended Net Income Outstanding Per Share
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
July 5, 1998 $ 21,947 51,099 $ .43
Effect of Dilution:
Options -- 1,831
-----------------------------------------------------
Diluted $ 21,947 52,930 $ .42
=====================================================
- --------------------------------------------------------------------------------------------------------------
June 29, 1997 $ 14,313 46,204 $ .31
Effect of Dilution:
Options -- 910
Convertible Debt 80 170
-----------------------------------------------------
Diluted $ 14,393 47,284 $ .31
=====================================================
</TABLE>
7
<PAGE>
NOTE 7 - COMPREHENSIVE INCOME
Effective the first quarter of 1998, the Company has adopted FAS
130, "Comprehensive Income". This statement has established the
standards for reporting and displaying comprehensive income and its
components (revenues, expenses, gains and losses) as part of a full set
of financial statements. This statement requires that all elements of
comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. Since
this statement applies only to the presentation of comprehensive income,
it does not have any impact upon results of operations, financial
position, or cash flows.
NOTE 8 - SUPPLEMENTAL GUARANTOR FINANCIAL STATEMENTS
The Guarantor Subsidiaries, which consist of the Company's
principal domestic subsidiaries, are guarantors of the Company's 7.3%
senior notes due 2008 and its 9.5% senior subordinated notes due 2005.
The Supplemental Guarantor Financial Statements are presented herein
pursuant to requirements of the Commission.
<TABLE>
<CAPTION>
INTERFACE, INC. AND SUBSIDIARIES
NOTE 7 - SUPPLEMENTAL GUARANTOR FINANCIAL STATEMENTS
STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JULY 5, 1998
INTERFACE, CONSOLIDATION
NON- INC. AND
GUARANTOR GUARANTOR (PARENT ELIMINATION CONSOLIDATED
SUBSIDIARIES SUBSIDIARIES CORPORATION) ENTRIES TOTALS
------------ ------------ ------------ ------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net sales $484,521 $225,200 $ - $ (73,905) $635,816
Cost of sales 341,474 154,840 - (73,905) 422,409
-------- -------- ----------- --------- --------
Gross profit on sales 143,047 70,360 - - 213,407
Selling, general and 101,255 44,425 12,520 - 158,200
administrative -------- -------- ----------- --------- --------
expenses
Operating income 41,792 25,935 (12,520) - 55,207
Other expense (income) 9,218 3,675 6,597 - 19,490
-------- -------- ----------- --------- --------
Income before taxes on income 32,574 22,260 (19,117) 35,717
and Equity in income of -
subsidiaries
Taxes on income 12,541 8,570 (7,341) - 13,770
Equity in income of - - 33,723 (33,723) -
subsidiaries -------- -------- ----------- --------- --------
Net income applicable to $ 20,033 $ 13,690 $ 21,947 $ (33,723) $ 21,947
common shareholders ======== ======== =========== ========= ========
8<PAGE>
BALANCE SHEET
JULY 5, 1998
CONSOLIDATION
NON- INTERFACE, INC. AND
GUARANTOR GUARANTOR (PARENT ELIMINATION CONSOLIDATED
SUBSIDIARIES SUBSIDIARIES CORPORATION) ENTRIES TOTALS
------------ ------------ --------------- -------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 4,731 $ 5,866 $ 36 $ - $ 10,633
Accounts receivable 128,093 94,609 (21,012) - 201,690
Inventories 120,601 70,845 - - 191,446
Miscellaneous 10,487 23,236 7,340 - 41,063
-------- -------- -------- ------------ ----------
Total current assets 263,912 194,556 (13,636) - 444,832
Property and equipment,
less accumulated depreciation 151,503 84,415 8,176 - 244,094
Investment in subsidiaries 138,088 15,799 373,895 (527,782) -
Other Assets 166,181 14,607 570,054 (702,385) 48,457
Excess of cost over net assets
acquired 179,947 103,480 4,467 - 287,894
-------- -------- -------- ------------ ----------
$899,631 $412,857 $942,956 $(1,230,167) $1,025,277
======== ======== ======== =========== ==========
LIABILITIES AND COMMON
SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 15,086 $ 12,640 $ - $ - $ 27,726
Accounts payable 37,494 38,780 1,348 - 77,622
Accrued expenses 55,592 41,448 (13,406) - 83,634
Current maturities of long-
term debt 1,739 1,148 - - 2,887
-------- -------- -------- ------------ ----------
Total current liabilities 109,911 94,016 (12,058) - 191,869
Long-term debt, less
current maturities 249,914 75,743 341,873 (399,336) 268,194
Senior subordinated notes - - 125,000 - 125,000
Deferred income taxes 15,055 8,319 8,601 - 31,975
-------- -------- -------- ------------ ----------
Total liabilities 374,880 178,078 463,416 (399,336) 617,038
Minority interests - 2,989 - - 2,989
Redeemable preferred stock 57,891 - - (57,891) -
Common stock 93,889 102,199 5,593 (196,088) 5,593
Additional paid-in capital 189,740 11,030 233,221 (200,770) 233,221
Retained earnings 185,745 144,293 244,377 (358,336) 216,079
Accumulated Other Comprehensive
Income (2,514) (25,732) (3,651) - (31,897)
Treasury stock - - - (17,746) (17,746)
-------- -------- -------- ------------ ----------
$899,631 $412,857 $942,956 $(1,230,167) $1,025,277
======== ======== ======== =========== ==========
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS
ENDED JULY 5, 1998
INTERFACE, CONSOLIDATION
NON- INC. AND
GUARANTOR GUARANTOR (PARENT ELIMINATION CONSOLIDATED
SUBSIDIARIES SUBSIDIARIES CORPORATION) ENTRIES TOTALS
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities: $10,876 $10,984 $(28,221) $ - $ (6,361)
------- ------- -------- ------------- --------
Cash flows from investing activities:
Purchase of plant and equipment (12,641) (7,616) (574) - (20,831)
Acquisitions, net of cash acquired - - (42,559) - (42,559)
Other - - (3,347) - (3,347)
------- ------- -------- ------------- --------
Net cash provided by (used in)
investing activities (12,641) (7,616) (46,480) - $(66,737)
------- ------- -------- ------------- --------
Cash flows from financing activities:
Net borrowings (repayments) 2,135 (3,229) 9,581 - 8,487
Proceeds from issuance of common - - 69,581 - 69,581
stock
Cash dividends paid - - (3,774) - (3,774)
Net cash provided by (used in)
financing activities 2,135 (3,229) 75,388 - 74,294
------- ------- -------- ------------- --------
Effect of exchange rate change on - (775) - - (775)
cash ------- ------- -------- ------------- --------
Net increase (decrease) in cash 370 (636) 687 - 421
Cash at beginning of year 4,361 6,502 (651) - 10,212
------- ------- -------- ------------- --------
Cash at end of year $ 4,731 $ 5,866 $ 36 $ - $ 10,633
======= ======= ======= ============= ========
</TABLE>
10<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
- -------
The Company's revenues are derived from sales of
commercial floorcovering products (primarily modular and
broadloom carpet) and related services, interior fabrics and
specialty products. During the quarter ended July 5, 1998, the
Company had revenues and net income of $316.9 million and $11.7
million, respectively.
The Company's business, as well as the commercial
interiors market in general, is somewhat cyclical in nature. The
Company's strong financial performance in recent years is
attributable in part to increased U.S. demand for its products,
resulting from a recovery in the U.S. commercial office market
which began in the mid-1990's. Demand for the Company's products
in the U.S. continues to be very strong. However, a downturn in
the market could lessen the overall demand for commercial
interiors products and could impair the Company's growth.
Management believes that the impact upon the Company of such a
downturn would be less pronounced given that the predominant
portion of its sales are generated from the renovations sector of
the market as opposed to the new construction sector.
The Company's growth could also be impacted by
international developments. Specifically, countries in the Asia-
Pacific region have recently experienced weaknesses in their
currency, banking and equity markets. These weaknesses could
adversely affect demand for the Company's products. However,
excluding Japan and Australia, sales in the Asia-Pacific region
represented only 2% of the Company's sales during the quarter
ended July 5, 1998. The Company engages in hedging transactions
to reduce its exposure to adverse fluctuations in foreign
currency exchange rates.
Results of Operations
- ---------------------
For the three month and six month periods ended July 5,
1998, the Company's net sales increased $45.2 million (16.6%) and
$106.7 million (20.2%), respectively, compared with the same
periods in 1997. These increases were primarily attributable to
increased sales volume (i) of products and related services in
the Company's U.S. floorcovering operations, due to increased
demand for and increased market share of its modular and
broadloom carpet products, as well as additional sales generated
by the Re:Source Americas network, (ii) of floorcovering
products in Europe due in part to the acquisition of Firth
Carpets early in the first quarter of 1998, and (iii) in the
Company's interior fabrics operations due to increased U.S. and
foreign demand for and increased market share of its fabric
products, as well as the acquisition of Camborne Holdings, Ltd.
during June 1997. These increases were offset somewhat by
(i) decreased sales volume in the Company's Asia-Pacific division
due to the economic turmoil in Asia, (ii) a weakening of certain
key currencies (particularly the Dutch guilder) against the U.S.
dollar, the Company's reporting currency, and (iii) decreased
sales volume in the Company's architectural products division.
Cost of sales, as a percentage of sales, decreased to
66.7% and 66.4%, respectively, for the three month and six month
periods ended July 5, 1998, when compared to 67.1% and 67.4% for
the same periods in 1997. The decrease was attributable to (i)
increased profitability in the Company's Interface Americas
Workplace Solutions unit (comprised of the Re:Source Americas
network and the Company's other service businesses), (ii)
economies of scale associated with increased sales volume in the
Company's floorcovering and interior fabrics operations, and
(iii) decreased manufacturing costs in the Company's
floorcovering and interior fabrics operations through the
Company's mass customization production strategy and its "war-on-
waste" initiative. The Company's interior fabrics business also
experienced decreased manufacturing costs as a result of
continued efficiencies generated from the new, state-of-the-art
yarn manufacturing facility in Guilford, Maine.
Selling, general and administrative expenses, as a
percentage of net sales, decreased to 24.5% in the quarter ended
July 5, 1998 compared to 24.6% in the same period in 1997,
primarily as a result of improved cost containment measures
worldwide in the second quarter. However, the SG&A cost-to-sales
ratio increased to 24.9% in the six-month period ended July 5,
1998 compared to 24.5% in the same period in 1997. The increase
was attributable primarily to (i) the continued development of
the Re:Source Americas network infrastructure and (ii) consulting
and development expenses associated with the Year 2000
initiative.
Other expense decreased $0.5 million in the second quarter
of 1998 compared to the second quarter of 1997, due primarily to
a reduction in bank debt as a result of the application of the
proceeds of the Company's public offering of Class A Common Stock
early in the quarter. However, other expense increased $0.3
million in the first six months of 1998 compared to the first six
months of 1997, due primarily to higher overall levels of bank
debt incurred as a result of the Company's acquisitions.
11<PAGE>
As a result of the aforementioned factors, the Company's
net income increased 46.5% to $11.7 million and 53.3% to $21.9
million, respectively, for the three month and six month periods
ended July 5, 1998, compared to the same periods in 1997.
Liquidity and Capital Resources
- -------------------------------
The Company's primary sources of cash during the six
months ended July 5, 1998 were (i) $69.6 from the issuance of
common stock, and (ii) $6.9 from long-term financing. The
primary uses of cash during the six months ended July 5, 1998
were (i) $36 million associated with acquisitions, (ii) $20.8
million for additions to property and equipment in the Company's
manufacturing facilities, and (iii) $6.3 million for working
capital purposes.
The Company amended its senior credit facility in the
second quarter of 1998. The amendments, among other things,
(i) eliminated the $120 million term portion of the facility,
(ii) increased the revolving credit limit under the facility from
$250 million to $300 million, and (iii) eliminated the
requirement that the facility be secured by the pledge of the
stock of the Company's operating subsidiaries. Management
believes that cash provided by operations and long-term loan
commitments (including the senior credit facility) will provide
adequate funds for current commitments and other requirements in
the foreseeable future.
Year 2000
- ---------
As is the case with other companies using computers in
their operations, the Company is faced with the task of
addressing the Year 2000 issue. The Year 2000 issue arises from
the widespread use of computer programs that rely on two-digit
codes to perform computations or decision-making functions. The
Company has done a comprehensive review of its computer programs
to identify the systems that would be affected by the Year 2000
issue. The Company has retained IBM Corporation to assist in its
Year 2000 conversion process.
The Company categorizes its systems into one of two
categories: those that are linked to the Company's AS-400
computer network ("IT Systems"), and those that are not ("Non-IT
Systems"). The Company currently estimates the total cost of
modifying its IT Systems to be Year 2000 ready to be
approximately $19 million. Of such amount, approximately $10
million is attributable to the cost of new hardware and software
which will be required in connection with the global
consolidation of the Company's management and financial
accounting systems. This new equipment and upgraded technology
will have a definable value lasting beyond the Year 2000. In
these instances, where Year 2000 compliance is ancillary, the
Company intends to capitalize and depreciate such costs. The
remaining $9 million (based on current estimates) will be
expensed as incurred. With respect to Non-IT Systems, the
Company currently estimates the total cost of the modifications
necessary to be Year 2000 ready to be approximately $2 million,
although it could be more.
During the quarter ended July 5, 1998, the Company
expensed approximately $1.5 million in regards to modifications
of both IT Systems and Non-IT Systems. To date, the Company has
expensed approximately $2.5 million in the aggregate in regards
to such modifications. The Company currently anticipates that
the modifications to both its IT Systems and its Non-IT Systems
will be completed by the end of the first quarter of 1999,
although it could be later. The balance of 1999 will then be
available for testing the modifications, as well as for training
employees in the use of new hardware and software.
The Company is still in the process of reviewing its Year
2000 exposure to third party customers, distributors and
suppliers. The Company's most reasonably likely worst case Year
2000 scenario is that a key supplier's systems will malfunction
and, as a result, the Company will suffer a period of business
interruption during which it is unable to meet related
obligations to its customers. The Company is currently unaware
of any Year 2000 problems faced by any third party customers,
distributors or suppliers which are likely to have a material
adverse effect on the Company. However, many third parties are
reluctant to provide detailed information concerning the status
of their Year 2000 readiness, particularly if they have not
completed their analysis of their systems.
There can be no guarantee that the foregoing cost
estimates or deadlines will be achieved and actual results could
differ from those anticipated. Specific factors that might cause
differences include, but are not limited to, the ability of
suppliers, customers and other companies on which the Company's
systems rely to modify or convert their systems to be Year 2000
ready, the ability to locate and correct all relevant computer
codes and similar uncertainties. The Company is in the process
of developing contingency plans for such scenarios, including
identifying substitute suppliers for key materials.
12<PAGE>
Derivative Financial Instruments
- --------------------------------
The Company employs the use of derivative financial
instruments for the purpose of reducing its exposure to adverse
fluctuations in interest and foreign currency exchange rates.
While these hedging instruments are subject to fluctuations in
value, such fluctuations are generally offset by the fluctuations
in value of the underlying exposures being hedged. The Company
does not hold or issue derivative financial instruments for
trading purposes. The Company monitors the use of derivative
financial instruments through the use of objective measurable
systems, well-defined market and credit risk limits, and timely
reports to senior management according to prescribed guidelines.
The Company has established strict counterparty credit guidelines
and only enters into transactions with financial institutions of
investment grade or better. As a result, the Company considers
the risk of counterparty default to be minimal.
Management of the Company has developed and implemented a
policy to maintain the percentage of fixed and variable rate debt
within certain parameters. The Company enters into interest rate
swap agreements, which maintain the fixed/variable mix within
these defined parameters. In these swaps, the Company agrees to
exchange, at specified intervals, the difference between fixed
and variable interest amounts calculated by reference to an
agreed-upon notional principal linked to LIBOR (London Interbank
Offered Rate). At July 5, 1998, the Company had utilized
interest rate swap agreements to effectively convert
approximately $64.5 million of variable rate debt to fixed rate
debt. The weighted average rate on these borrowings was 6.6% at
July 5, 1998. The interest rate swap agreements have maturity
dates ranging from five to 24 months.
The purpose of the Company's foreign currency hedging
activities is to reduce the risk that the eventual local currency
inflows resulting from sales to foreign customers will be
adversely affected by changes in exchange rates. The Company
enters into forward exchange and currency swap contracts to hedge
certain firm sales commitments denominated in foreign currencies.
At July 5, 1998, the Company had approximately $14.5 million
(notional amount) of foreign currency hedge contracts
outstanding. The contracts served to hedge firmly committed
Dutch guilder, German mark, Japanese yen, French franc, British
pound sterling, and other foreign currency revenues. The
contracts generally have maturity dates of six to nine months.
The Company, as of July 5, 1998, recognized a $3.7 million
increase in its foreign currency translation adjustment account
compared to December 27, 1998, because of the weakening of the
Dutch guilder and certain other currencies against the U.S.
dollar. The increase was associated primarily with the Company's
investments in certain foreign subsidiaries located in
Continental Europe. The translation adjustment to shareholders'
equity was converted by the guidelines of the Financial
Accounting Standards Board's Statement of Financial Accounting
Standards No. 52.
Forward-Looking Statements
- --------------------------
THIS FORM 10-Q CONTAINS STATEMENTS WHICH MAY CONSTITUTE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE SECURITIES
ACT OF 1933 AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. ANY
SUCH FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS, INCLUDING THE
RISKS AND UNCERTAINTIES DISCUSSED IN THE SAFE HARBOR COMPLIANCE
STATEMENT FOR FORWARD-LOOKING STATEMENTS INCLUDED AS EXHIBIT 99.1
TO THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 28, 1997, WHICH DISCUSSION IS INCORPORATED HEREIN
BY THIS REFERENCE.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In February 1998, the Company sent two "cease and
desist" letters to Collins & Aikman Floorcoverings, Inc. ("CAF"),
demanding that CAF cease manufacturing certain carpet products
which the Company believes infringe upon certain of the Company's
copyrighted product designs. The Company and CAF subsequently
began settlement negotiations in an attempt to resolve the
Company's claims.
13<PAGE>
On July 28, 1998, CAF filed a complaint (the
"Complaint") against the Company and certain other parties in the
U.S. District Court for the Northern District of Georgia, Atlanta
Division. In the Complaint, CAF alleges that the Company has
infringed upon certain of CAF's copyrighted product designs. The
Complaint also contains a claim against the Company for tortious
interference with contractual rights relating to a consulting
agreement between CAF and David Oakey, a former consultant of CAF
and current consultant of the Company. CAF is seeking damages
and injunctive relief in connection with the foregoing claims.
Based upon investigations conducted to date, the Company believes
CAF's claims are unfounded and that the Company has meritorious
defenses to such claims. Moreover, the Company intends to
aggressively assert its various claims against CAF.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON 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 19, 1998.
(b) Not applicable.
(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>
Dianne Dillon-Ridgley 17,174,415 227,095
Carl I. Gable 16,776,215 625,295
Dr. June M. Henton 17,117,265 226,245
J. Smith Lanier, II 17,140,715 260,795
Clarinus C. Th. van Andel 17,175,265 226,245
Class B For Withheld
------- --- --------
Ray C. Anderson 2,233,566 0
Brian L. Demoura 2,233,566 0
Charles R. Eitel 2,233,566 0
Daniel T. Hendrix 2,233,566 0
Leonard G. Saulter 2,233,566 0
John H. Walker 2,233,566 0
Gordon Whitener 2,233,566 0
</TABLE>
(ii) Proposal to amend the Company's Articles of
Incorporation to increase the number of authorized
shares of Class A Common Stock from 40,000,000 shares to
80,000,000 shares:
Class A
-------
For: 16,299,936
Against: 1,080,722
Abstain: 20,852
Class B
-------
For: 2,233,566
Against: 0
Abstain: 0
(d) Not applicable.
14<PAGE>
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed with this report:
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ -----------------------
3.1 Restated Articles of Incorporation.
3.2 Bylaws, as amended (included as Exhibit 3.2 to the Company's
quarterly report on Form 10-Q for the quarter ended April 1,
1990, previously filed with the Commission and incorporated
herein by reference).
4.1 See Exhibits 3.1 and 3.2 for provisions in the Company's
Articles of Incorporation, as amended, and Bylaws defining the
rights of holders of Common Stock of the Company.
4.2 Rights Agreement between the Company and Wachovia Bank, N.A.,
dated as of March 4, 1998, with an effective date of March 16,
1998 (included as Exhibit 10.1A to the Company's registration
statement on Form 8-A/A dated March 12, 1998, previously filed
with the Commission and incorporated herein by reference).
4.3 Indenture governing the Company's 9.5% Senior Subordinated Notes
due 2005, dated as of November 15, 1995, among the Company,
certain U.S. subsidiaries of the Company, as Guarantors, and
First Union National Bank of Georgia, as Trustee (included as
Exhibit 4.1 to the Company's registration statement on Form S-4,
File No. 33-65201, previously filed with the Commission and
incorporated herein by reference); and Supplement No. 1 to
Indenture, dated as of December 27, 1996 (included as Exhibit
4.2(b) to the Company's Annual Report on Form 10-K for the year
ended December 29, 1996, previously filed with the Commission
and incorporated herein by reference).
4.4 Form of Indenture governing the Company's 7.3% senior notes due
2008, among the Company, certain U.S. subsidiaries of the
Company, as Guarantors, and First Union National Bank, as
trustee (included as Exhibit 4.1 to the Company's registration
statement on Form S-3/A, File No. 333-46611, previously filed
with the Commission and incorporated herein by reference).
10.1 Third Amended and Restated Credit Agreement, dated as of June
30, 1998, among the company, Interface Europe, B.V., Interface
Europe, Ltd., the Lenders listed therein, SunTrust Bank, Atlanta
and the First National Bank of Chicago.
27.1 Financial Data Schedule (for SEC use only).
(b) No reports on Form 8-K were filed during the quarter ended April
5, 1998.
15<PAGE>
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 17, 1998 By: /s/ Daniel T. Hendrix
Daniel T. Hendrix
Senior Vice President
(Principal Financial Officer)
16<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
3.1 Restated Articles of Incorporation
10.1 Third Amended and Restated Credit Agreement, dated as of June 30,
1998, among the Company, Interface Europe, B.V., Interface Europe, Ltd.,
the Lenders listed therein, SunTrust Bank, Atlanta and the First
National Bank of Chicago.
27.1 Financial Data Schedule.
RESTATED ARTICLES OF INCORPORATION
OF
INTERFACE, INC.
I.
The name of the Corporation is:
INTERFACE, INC.
II.
The Corporation is organized pursuant to the provisions of
the Georgia Business Corporation Code.
III.
The Corporation shall have perpetual duration.
IV.
The Corporation is organized for the following purposes:
To manufacture, produce, assemble, fabricate, import,
purchase or otherwise acquire, invest in, own, hold, use,
maintain, service or repair, sell, rent, lease, pledge, mortgage,
exchange, export, distribute, assign and otherwise dispose of,
and to trade and deal in and with, at wholesale or retail, goods,
wares, merchandise, commodities, articles of commerce and
property of every kind and description, including, but not by way
of limitation, carpet; and to engage in, conduct and carry on a
general manufacturing, importing and exporting, merchandising,
leasing, mercantile and trading business in any and all branches
thereof.
To do each and every thing necessary, suitable or proper for
the accomplishment of any of the purposes or the attainment of
any one or more of the objects herein enumerated, or which shall
at any time appear conducive to or expedient for the protection
or benefit of the Corporation.
IN FURTHERANCE OF AND NOT IN LIMITATION of the general
powers conferred by the laws of the State of Georgia and the
objects and purposes herein set forth, it is expressly provided
that to such extent as a corporation organized under the Georgia
Business Corporation Code may now or hereafter lawfully do, the
Corporation shall have the power to do, either as principal or
agent and either alone or in connection with other corporations,
firms or individuals, all and everything necessary, suitable,
convenient or proper for, or in connection with, or incident to,
the accomplishment of any of the purposes or the attainment of
any one or more of the objects herein enumerated, or designed
<PAGE>
directly or indirectly to promote the interests of the
Corporation or to enhance the value of its properties; and in
general to do any and all things and exercise any and all powers,
rights and privileges which a corporation may now or hereafter be
authorized to do or to exercise under the Georgia Business
Corporation Code or under any act amendatory thereof,
supplemental thereto or substituted therefor.
The foregoing provisions of this Article IV shall be
construed both as purposes and powers and each as an independent
purpose and power. The foregoing enumeration of specific
purposes and powers herein specified shall, except when otherwise
provided in this Article IV, be in no wise limited or restricted
by reference to, or inference from, the terms of any provision of
this or any other Article of these Articles of Incorporation.
V.
A. The total number of shares of capital stock which the
Corporation shall have authority to issue is 125,000,000 shares,
consisting of 80,000,000 shares of Class A Common Stock of $0.10
par value per share, 40,000,000 shares of Class B Common Stock of
$0.10 par value per share (the Class A Common Stock and the Class
B Common Stock hereinafter sometimes referred to collectively as
the "Common Stock"), and 5,000,000 shares of Preferred Stock of
$1.00 par value per share.
B. The Corporation may purchase its own shares of capital
stock out of unreserved and unrestricted earned surplus and
capital surplus available therefor and as otherwise provided by
law.
C. The voting powers, designations, preferences and
relative rights of the classes of Common Stock and Preferred
Stock of the Corporation which are fixed by these Articles of
Incorporation, and the authority expressly vested in the Board of
Directors to fix by resolution or resolutions providing for the
issue of Preferred Stock the voting power (if any), designations,
preferences and relatives rights of the shares of Preferred Stock
which are not fixed by these Articles of Incorporation, are as
follows:
(1) The Class A Common Stock and the Class B Common
Stock shall be identical in all respects and the holders thereof
shall have equal rights and privileges, except as otherwise
provided in this Article V or required by law.
(2) Subject to the provisions of any applicable law,
or of the By-Laws of the Corporation as from time to time
amended, with respect to the fixing of a record date for the
determination of shareholders entitled to vote and except as
otherwise provided by any applicable law or by the resolution or
resolutions of the Board of Directors providing for the issue of
any series of Preferred Stock, the holders of outstanding shares
of Common Stock shall have and possess exclusive voting power and
rights for the election of directors and for all other purposes.
The holders of outstanding shares of Common Stock shall be
entitled to vote as follows:
-2-<PAGE>
(a) With respect to the election of directors,
holders of Class A Common Stock voting as a separate class
shall be entitled to elect the largest number of directors
that constitutes a minority of the Board of Directors and
holders of Class B Common Stock voting as a separate class
shall be entitled to elect the smallest number of directors
that constitutes a majority of the Board of Directors.
(b) The holders of Class A Common Stock as a
separate class shall be entitled by majority vote to remove,
with or without cause, any director elected by the holders
of Class A Common Stock and the holders of Class B Common
Stock as a separate class shall be entitled by majority vote
to remove, with or without cause, any director elected by
the holders of Class B Common Stock.
(c) Any director elected by the Board of
Directors to fill a vacancy shall serve until the next
Annual Meeting of Shareholders and until his or her
successor has been elected and qualified. Any vacancy in
the office of a director elected by the holders of Class A
Common Stock may be filled by majority vote of such holders
voting as a separate class and any vacancy in the office of
a director elected by the holders of Class B Common Stock
may be filled by majority vote of such holders voting as a
separate class or, in the absence of a shareholder vote, in
either case by majority vote of the remaining directors
elected by holders of the same class. Any vacancy created
by increasing the number of directors may be filled by
majority vote of the holders of Class A Common Stock voting
as a separate class or of the holders of Class B Common
Stock voting as a separate class or, in the absence of a
shareholder vote, in either case by majority vote of the
directors of such class, whichever is necessary in order to
insure that holders of Class B Common Stock (or directors
elected by them) shall have elected the smallest number of
directors constituting a majority of Board of Directors, and
that holders of Class A Common Stock (or directors elected
by them) shall have elected the other members of the Board
of Directors.
(d) Except as otherwise provided herein or in the
By-Laws of the Corporation or otherwise required by law, the
holders of Class A and Class B Common Stock shall vote
together as a single class on all matters submitted for vote
of the shareholders, with each share being entitled to one
vote.
(e) Anything in this paragraph C to the contrary
notwithstanding, Class A and Class B Common Stock shall be
deemed to be in all respects a single class of Common Stock,
and no distinction whatsoever shall exist between the voting
rights or any other rights and privileges of the holders of
Class A and Class B Common Stock from and after the earlier
of the following:
(i) the first date (after the
effective date of these Amended and Restated
Articles of Incorporation) on which the
number of issued and outstanding shares of
-3-<PAGE>
Class B Common Stock shall constitute less
than 10% of the aggregate number of issued
and outstanding shares of Class A and Class B
Common Stock; or
(ii) June 30, 1983, unless the
Corporation has theretofore completed the
issuance and sale of shares of Class A Common
Stock to underwriters in connection with a
public offering thereof registered on a
Registration Statement on Form S-1 filed with
the Securities and Exchange Commission.
(f) Anything in this subparagraph (2) to the contrary
notwithstanding: (i) At any time when no shares of Class B
Common Stock are issued and outstanding the holders of Class A
Common Stock shall have exclusive voting power on all matters,
and (ii) at any time when no shares of Class A Common Stock are
outstanding the holders of Class B Common Stock shall have
exclusive voting power on all matters.
(3) Each holder of record of Class B Common Stock may at
any time or from time to time, in such holder's sole discretion,
elect to convert any whole number of such holder's Class B Common
Stock into fully paid and nonassessable Class A Common Stock at
the rate of one share of Class A Common Stock for each share of
Class B Common Stock converted. Any such conversion may be
effected by the holder surrendering the certificate or
certificates evidencing the Class B Common Stock to be converted,
duly endorsed, at the office of any transfer agent for the Class
B Common Stock, together with a written notice (in form
satisfactory to the Corporation) that the holder elects to
convert all or a specified number of shares of Class B Common
Stock and stating the name or names in which such holder desires
the certificate or certificates for such shares of Class A Common
Stock to be issued. Promptly thereafter, the Corporation shall
issue and deliver to such holder or such holder's nominee or
nominees a certificate or certificates for the number of shares
of Class A Common Stock to which such holder shall be entitled as
aforesaid. Such conversion shall be deemed to have been made at
the close of business at the date of such surrender and the
person or persons in whose names the certificates of Class A
Common Stock are to be issued on such conversion shall be treated
for all purposes as the holder or holders of such Class A Common
Stock at such time. Authorized shares of Class A Common Stock,
to the extent that such shares shall be subject to issuance or
reissuance upon conversion of shares of issued and outstanding
Class B Common Stock as aforesaid, shall be held in reserve by
the Corporation, without the necessity of a further declaration
by the Board of Directors, to be issued or reissued only upon
conversion of shares of issued and outstanding Class B Common
Stock. No Class B Common Stock may be issued unless the reserved
shares of Class A Common Stock are sufficient to satisfy the
conversion privilege that will then exist with respect to such
Class B Common Stock when issued.
-4-
<PAGE>
(4) Any transfer of record of shares of Class B Common
Stock other than to a Qualified Transferee (as herein defined)
shall be conclusively deemed to constitute an election by the
holder of record thereof to convert the said shares of Class B
Common Stock into an equal number of shares of Class A Common
Stock. As used herein, Qualified Transferee means any one or
more of (i) the transferor's spouse, issue, parents or siblings,
or a trust for the benefit of the transferor or any of such
persons, (ii) in the event of the transferor's death or legal
disability, the transferor's executor, administrator or personal
representative, (iii) any transferee receiving the shares as a
gift, legacy or inheritance, or as a distribution from a
corporation or partnership in respect of the transferee's
ownership interest therein, or (iv) any other person approved by
the Board of Directors or its designee upon written application
submitted to the Secretary of the Corporation at least five
business days prior to the date of the transfer. Any shares of
Class B Common Stock transferred beneficially but not of record
may upon application by any record holder of Class B Common Stock
be denied the right to vote and receive payment of dividends
until the shares have been transferred of record.
(5) Shares of Class B Common Stock (in addition to those
issued in connection with the reclassification of the
Corporation's Common Stock effected on March 2, 1983) may be
issued only (i) in connection with an acquisition by the
Corporation or any of its subsidiaries of any other firm,
corporation or business enterprise, (ii) pursuant to any employee
benefit plan now in effect or hereafter adopted, (iii) in
exchange for Class A Common Stock held by officers, directors or
employees of the Corporation, or (iv) to effect a subdivision of
such shares in the form of a stock split, stock dividend or other
distribution in respect of such shares; provided, however, that
at no time shall the number of shares; provided, however, that at
no time shall the number of shares of Class B Common Stock issued
and outstanding exceed 6,000,000 (as adjusted to reflect any
subdivision, split, stock dividend, recapitalization,
reclassification or consolidation of such shares).
(6) Upon any stock dividend or other distribution in the
form of Common Stock of the Corporation, only Class A Common
Stock may be distributed in respect of Class A Common Stock and
only Class B Common Stock may be distributed in respect of Class
B Common Stock. Whenever any such distribution is made, the same
number of shares shall be distributed in respect of each
outstanding share of Class A and Class B Common Stock. The
Corporation shall not combine or subdivide shares of either of
such classes without at the same time making a proportionate
combination or subdivision of shares of the other class.
(7) Except as otherwise provided by applicable law, or by
the resolution or resolutions of the Board of Directors providing
for the issuance of any series of Preferred Stock, the holders of
shares of Preferred Stock shall not, by reason of such holding,
(i) have any right to vote in the election of directors or for
any other purpose, nor (ii) be entitled to notice of any meeting
of shareholders.
-5-
<PAGE>
(8) Before any sum or sums shall be set aside or applied to
the purchase of any outstanding shares of Common Stock, and
before any dividend shall be declared or paid or any distribution
ordered or made upon the Common Stock (other than a dividend
payable in shares of Common Stock), the Corporation shall have
complied with the dividend and sinking fund requirements (if any)
set forth in any resolution or resolutions of the Board of
Directors with respect to the issue of any series of Preferred
Stock of which any shares shall at the time be outstanding.
(9) Subject to the provisions of Paragraph C(8) of this
Article V, and to such other limitations as may be specified in
any resolution or resolutions of the Board of Directors providing
for the issue of any series of Preferred Stock, the holders of
outstanding shares of Common Stock shall be entitled, to the
exclusion of the holders of shares of Preferred Stock of any and
all series, to receive such dividends payable with respect to the
Common Stock as may be declared by the Board of Directors from
time to time.
(10) In the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, after
payment shall have been made to the holders of shares of
Preferred Stock of the full amount to which any series of the
Preferred Stock is entitled as set forth in the resolution or
resolutions of the Board of Directors providing for the issue
thereof, the holders of outstanding shares of Common Stock shall
be entitled, to the exclusion of the holders of shares of
Preferred Stock of any and all series, to share in all remaining
assets of the Corporation available for distribution to its
shareholders ratably according to the number of shares of Common
Stock held by them. Neither the merger nor consolidation of the
Corporation with or into any other corporation or corporations,
nor the merger or consolidation of any other corporation or
corporations into or with the Corporation, nor the sale,
transfer, mortgage, pledge or lease by the Corporation of all or
any part of its assets shall be deemed to be a liquidation,
dissolution or winding up of the Corporation.
(11) The Preferred Stock may be issued from time to time in
one or more series of any number of shares, except that the
aggregate number of shares issued and not cancelled of any and
all such series shall not exceed the total number of shares of
Preferred Stock hereinabove authorized. Each series of Preferred
Stock shall be distinctively designated by number, letter or
descriptive words.
(12) Authority is hereby expressly granted to and vested in
the Board of Directors to issue the Preferred Stock at any time,
or from time to time, as Preferred Stock of any one or more
series, and, in connection with the establishment of each such
series, to fix by resolution or resolutions providing for the
issue of the shares thereof the voting powers, if any, and the
designation, preferences and relative rights of each such series
of Preferred Stock to the full extent now or hereafter permitted
by these Articles of Incorporation and the laws of the State of
-6-<PAGE>
Georgia, including, without limiting the generality of the
foregoing, all of the following matters which may vary between
each series:
(a) The distinctive designation of such series and the
number of shares which constitute such series, which number may
be increased or decreased either before or subsequent to the
issuance of any shares of such series (but not below the number
of shares of such series then outstanding), from time to time by
action of the Board of Directors;
(b) The dividend rate of such series, the dates of
payment thereof, and any limitations, restrictions or conditions
on the payment of dividends, including whether dividends shall be
cumulative and, if so, from which date or dates, and the relative
rights of priority, if any, of payment of dividends on the shares
of each series;
(c) The price or prices at which, and the terms, times
and conditions on which, the shares of such series may be
redeemed at the option of the Corporation or at the option of the
holders of such shares;
(d) The amount or amounts payable upon the shares of
such series in the event of voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, and the relative
rights of priority, if any, of payment to the holders of shares
of each series;
(e) Whether the shares of such series shall be
entitled to the benefit of a purchase, retirement or sinking fund
to be applied to the redemption or purchase of such series, and
if so entitled, the amount of such fund and the manner of its
application, including the price or prices at which the shares of
such series may be redeemed or purchased through the application
of such fund;
(f) Whether the shares of such series shall be made
convertible into, or exchangeable for, shares of any other class
or classes of stock of the Corporation, or the shares of any
other series of Preferred Stock, and, if made so convertible or
exchangeable, the conversion price or prices, or the rate or
rates of exchange, and the adjustments thereof, if any, at which
such conversion or exchange may be made, and any other terms and
conditions of such conversion or exchange;
(g) Whether the shares of such series shall have any
voting rights, and, if voting rights are so granted, the extent
of such voting rights and the terms and conditions under which
such voting rights may be exercised;
(h) Whether the issue of any additional shares of such
series or of any future series in addition to such series shall
be subject to restrictions in addition to the restrictions, if
any, on the issue of additional shares imposed in the resolution
or resolutions fixing the terms of any outstanding series of
-7-<PAGE>
Preferred Stock theretofore issued pursuant to this subparagraph
(12), and, if subject to additional restrictions, the extent of
such additional restrictions; and
(i) Whether the shares of such series shall be
entitled to the benefit of limitations restricting the purchase
of, the payment of dividends on, or the making of other
distributions in respect of stock of any class of the
Corporation, and the terms of any such restrictions; provided,
however, that such restrictions shall not include any prohibition
on the payment of dividends or with respect to distributions in
the event of voluntary or involuntary liquidation established for
any outstanding series of Preferred Stock theretofore issued.
(13) Series A Cumulative Convertible Preferred Stock.
-----------------------------------------------
(a) DESIGNATION. 250,000 shares of the Preferred
Stock, $1.00 par value, of the Corporation, each with a face
value of $100.00 per share ("Face Value"), shall constitute a
series of such Preferred Stock designated as "Series A Cumulative
Convertible Preferred Stock" (herein referred to for convenience
as "Series A Preferred Stock").
(b) DIVIDENDS. Holders of record of Series A
Preferred Stock ("Record Holders") shall be entitled to receive,
and the Corporation shall pay, when, if, and as declared by the
Board of Directors, but only out of funds legally available
therefor, preferential cash dividends at the rate of seven
percent (7%) per annum on the sum of (i) the Face Value of each
share of Series A Preferred Stock held by such Record Holders and
(ii) the amount, if any, of previously accrued and due but unpaid
dividends on such share, and no more. Such dividends shall be
calculated on the basis of a 360-day year of four 90-day quarters
(except as to any calculation for a period less than a full
quarter, as to which the amount accrued shall be calculated based
on the actual number of days elapsed and a year of 365 or 366
days, as applicable) and shall be payable on the 15th day of
January, April, July, and October of each year, commencing July
15, 1993, to Record Holders on the respective dates fixed for
such purpose by the Board of Directors in advance of the payment
of each dividend. Dividends on each issued and outstanding share
of the Series A Preferred Stock shall be cumulative and shall
accrue, whether or not declared and paid, from the date of
original issuance thereof, except as provided in subparagraph
(13)(g). The date on which the Corporation initially issues any
particular share of Series A Preferred Stock shall be deemed the
"date of original issuance" regardless of the number of times
transfer of such share is made or replacement certificates issued
to evidence such share. No dividend shall be deemed due and
payable until the quarterly dividend payment date therefor as
provided above, and the inclusion of any such dividend (as an
accrued and due but unpaid dividend) in applying the dividend
rate to calculate the amount of future dividends shall not
commence until the next succeeding day after the dividend payment
date for such dividend, and then only if and to the extent that
such dividend was neither paid on such date nor declared as
payable on such date and funds set apart for the payment thereof
on such date.
-8-
<PAGE>
If all dividends accrued in respect of the Series A
Preferred Stock have not been fully paid, or declared and set
apart for payment in full, the Corporation shall not declare or
pay or set apart for payment any dividend on, make any other
distribution in respect of, or repurchase, redeem, or retire,
shares of any other class of stock of the Corporation ranking
junior to the Series A Preferred Stock as to dividends or upon
liquidation (other than dividends payable in Common Stock of the
Corporation or in any other class of stock of the Corporation
ranking junior to the Series A Preferred Stock as to dividends
and upon liquidation).
Subject to the foregoing provisions, dividends and
other distributions, whether payable in cash, stock, or otherwise
as determined by the Board of Directors, may be declared and paid
on Common Stock and on any other class of stock ranking junior to
the Series A Preferred Stock as to dividends or upon liquidation,
out of the remaining funds of the Corporation legally available
therefor, and the Series A Preferred Stock shall not be entitled
to participate therein.
Except as otherwise provided herein, if at any time the
Corporation pays less than the total amount of dividends then
accrued with respect to the Series A Preferred Stock, such
payment shall be distributed ratably among the holders of Series
A Preferred Stock based upon the number of shares of Series A
Preferred Stock held by each such holder.
(c) LIQUIDATION RIGHTS. Upon any liquidation,
dissolution, or winding up of the Corporation, Record Holders of
Series A Preferred Stock shall be entitled to receive out of the
assets of the Corporation available for distribution to its
shareholders, before any distribution or payment shall be made to
holders of Common Stock or of any other class of stock ranking
junior to the Series A Preferred Stock as to liquidation, an
amount in cash equal to the Face Value per share of outstanding
Series A Preferred Stock plus the amount of accrued but unpaid
dividends accumulated thereon, if any, to the date of payment of
such liquidating distribution. Holders of Series A Preferred
Stock shall not be entitled to any further payment upon any such
liquidation, dissolution, or winding up. If upon such
liquidation, dissolution, or winding up of the Corporation, the
assets available to be distributed among the holders of Series A
Preferred Stock shall be insufficient to permit the payment to
holders of Series A Preferred Stock, and to holders of all other
stock, if any, ranking pari passu with the Series A Preferred
Stock as to liquidation, of the full amounts distributable as
aforesaid and by the terms of such other stock, then the entire
remaining assets of the Corporation to be distributed shall be
distributed ratably among the holders of Series A Preferred Stock
and the holders of such other stock based upon the amount they
are otherwise entitled to hereunder and under the then terms of
such other stock. Written notice of any liquidation, dissolution,
or winding up of the Corporation -- stating a liquidating
distribution payment date, the amount of such payment, and the
place where said sums shall be payable -- shall be given to all
-9-<PAGE>
Record Holders by certified mail, postage prepaid, not less than
thirty (30) days prior to the payment date stated therein, such
notice to be addressed to each Record Holder at its address as
shown on the Corporation's stock records for the Series A
Preferred Stock. For the purposes hereof, the voluntary sale,
lease, exchange, or transfer, whether for cash, securities, or
otherwise, of all or any part of its property or assets to, or a
business combination or merger of the Corporation into or with,
one or more other corporations or business entities, or the
reduction of the Corporation's capital stock, shall not be
deemed, without more, to be a liquidation, dissolution, or
winding up of the Corporation.
(d) Voting Rights.
-------------
(1) Except as otherwise required by law or the
Amended and Restated Articles of Incorporation of the Corporation
(the "Articles of Incorporation"), or as set forth herein,
holders of Series A Preferred Stock shall not have any right to
vote or to give or withhold consent, for any purpose, on any
matter whatsoever on which a vote or consent of the shareholders
of the Corporation may be required, taken, or solicited. Record
Holders of Series A Preferred Stock shall be entitled to receive,
however, (i) notice of any meeting of shareholders at which a
vote or consent of shareholders may be taken, at the same time
and in the same manner as shareholders of the Corporation
entitled to vote, and (ii) all information provided by the
Corporation to holders of Class A Common Stock as a class,
whether or not in connection with a meeting or a vote or consent
of shareholders.
(2) For so long as any shares of Series A Preferred
Stock are outstanding, the affirmative vote or written consent of
the holders of at least a majority of the outstanding shares of
Series A Preferred Stock, voting as a class (which class shall
also include the holders of shares of other series of Preferred
Stock, if any, that by the governing terms thereof have at that
time similar voting rights), will be required for any amendment,
alteration, or repeal of any provision of the Articles of
Incorporation that would adversely affect the powers,
preferences, or special rights of all Preferred Stock as a class.
(3) For so long as any shares of Series A Preferred
Stock are outstanding, the affirmative vote or written consent of
the holders of at least a majority of the outstanding shares of
Series A Preferred Stock (voting alone as a separate class) will
be required for any amendment, alteration, or repeal of any
provision of this Subparagraph (13) or any other provision of the
Articles of Incorporation that would adversely affect the powers,
preferences, or special rights solely of the Series A Preferred
Stock.
(4) For the purposes of this Subparagraph (13),
none of (i) the establishment or enlargement of a class or series
of any class of stock, whether or not by amendment of the
Articles of Incorporation, ranking senior to or pari passu with
the Series A Preferred Stock as to dividends or upon liquidation,
(ii) an amendment of the Articles of Incorporation increasing or
decreasing the aggregate number of shares of authorized Preferred
Stock, as a class, or (iii) an amendment of this Subparagraph
(13) increasing or decreasing the number of shares of Series A
-10-<PAGE>
Preferred Stock designated and constituted as authorized to be
issued hereunder, so long as any decrease described in clause
(ii) or (iii) does not affect the status of any issued and
outstanding share of Series A Preferred Stock or other Preferred
Stock as being validly issued and outstanding, shall be
considered to affect adversely the powers, preferences, or
special rights of the Series A Preferred Stock or of all
Preferred Stock as a class, as the case may be; PROVIDED,
HOWEVER, that for purposes of this Subparagraph (13), the
establishment at any time prior to June 30, 1995, of a class or
series of any class of stock ranking senior to the Series A
Preferred Stock as to dividends or upon liquidation shall be
considered to affect adversely the powers, preferences, and
special rights of the Series A Preferred Stock or all of the
Preferred Stock as a class, as the case may be.
(e) Optional Redemption by the Corporation.
--------------------------------------
(1) The Corporation, at its sole option, and from
time to time at any time, subject to the following limitations,
may redeem the whole or any part of the then outstanding Series A
Preferred Stock by paying in cash for each share redeemed the
Face Value thereof plus an amount equal to the full dividends
accrued but unpaid on each such share (whether or not declared)
through the redemption date (the "Redemption Price"):
<TABLE>
<CAPTION>
Time Period Limitation on Redemption
=============================================================================================================
<S> <C>
Prior to June 1, 1995 No redemption permitted
-------------------------------------------------------------------------------------------------------------
June 1, 1995 through May 31, 1996 Redemption permitted only if Market Price (as
defined in subparagraph (13) (g) (4) (vii) below) on
the date notice of redemption is sent by the
Corporation exceeds 120% of the effective Conversion
price (as defined in subparagraph (13) (g) (1)) per
whole share of Class A Common Stock on such date
-------------------------------------------------------------------------------------------------------------
After May 31, 1996 No limitations
=============================================================================================================
</TABLE>
Notwithstanding the foregoing, for so long as any dividend
accrued and due on the Series A Preferred Stock has not been paid
or declared and sufficient funds set aside for the payment
thereof, the Corporation may not: (i) redeem any shares of Series
A Preferred Stock unless all shares of Series A Preferred Stock
then outstanding are simultaneously redeemed; (ii) purchase any
shares of Series A Preferred Stock, except in accordance with a
purchase or exchange offer made on the same terms to all Record
Holders of Series A Preferred Stock; or (iii) purchase any shares
of any class or series (or make any payment to any sinking fund
-11-<PAGE>
for the redemption or purchase of any shares of any class or
series) ranking pari passu with or junior to the Series A
Preferred Stock as to dividends or upon liquidation, except, in
the case of a class or series of stock ranking pari passu with
the Series A Preferred Stock as to dividends or upon liquidation,
in accordance with a purchase or exchange offer made to all
Record Holders of Series A Preferred Stock and the holders of
shares of such class or series of PARI PASSU stock, on a pro rata
basis.
(2) If less than all of the Series A Preferred
Stock at any time outstanding shall be called for redemption
hereunder, the shares to be redeemed shall be selected on a pro
rata basis (with rounding to the nearest whole share) and upon
such terms and conditions as the Board of Directors may determine
(subject to the limitations and provisions contained in this
subparagraph (13)). In case of a pro rata redemption, the
Corporation, at its option, may nonetheless redeem all of the
shares of Series A Preferred Stock of any Record Holder if, as a
result of a straight pro rata redemption, that holder would then
hold less than 500 of such shares. Nothing herein shall limit the
Company's right to redeem any shares of Series A Preferred Stock
by agreement with the holder thereof.
(3) Notice of redemption shall be mailed, certified
mail, postage prepaid, not less than 20 days nor more than 60
days prior to the redemption date specified in that notice, to
each Record Holder of the shares to be redeemed at the address
appearing on the Corporation's stock records for the Series A
Preferred Stock. Neither failure to mail such notice to one or
more of such holders nor any defect in such notice shall affect
the sufficiency of the proceedings for redemption as to other
holders. Each such notice shall state: (i) the redemption date;
(ii) the applicable Redemption Price; (iii) the number of shares
of Series A Preferred Stock to be redeemed and, if less than all
the outstanding shares of Series A Preferred Stock are to be
redeemed, the basis upon which the Corporation proposes to
determine such lesser number of shares to be redeemed and the
number of shares of such Record Holder that would be redeemed on
such basis if such Record Holder continued to hold all of its
shares on the Partial Redemption Determination Date (as defined
below); and (iv) the place or places at which the certificates
representing such shares are to be surrendered for payment of the
Redemption Price. In case of a redemption of less than all the
outstanding shares of Series A Preferred Stock, the Corporation's
final determination of the number of shares of each holder to be
redeemed shall be made with respect to Record Holders of Series A
Preferred Stock as of the close of business two (2) business days
immediately preceding the redemption date (the "Partial
Redemption Determination Date"). Neither the transfer nor the
conversion of shares of Series A Preferred Stock so determined
for redemption shall be permitted after the Partial Redemption
Determination Date. The Corporation may require that any transfer
of shares of Series A Preferred Stock permitted by it between the
date of the above notice to Record Holders and the Partial
Redemption Determination Date refer to the Corporation's notice
of redemption and otherwise reflect that the transferee will
acquire such shares subject to possible redemption as stated in
such notice.
-12-<PAGE>
(4) If notice of redemption has been given pursuant
to subparagraph (13)(e)(3) above and if, on or before the
redemption date specified in such notice, the funds necessary for
such redemption have been irrevocably deposited by the
Corporation with a Paying Agent (as defined in subparagraph
13(e)(5) below), or otherwise irrevocably designated or set aside
in trust for the pro rata benefit of holders of the shares so
called for redemption in a manner permitted by the Georgia
Business Corporation Code, then from and after the redemption
date, notwithstanding that any certificate for shares so called
for redemption shall not have been surrendered for cancellation
or that any such shares may have been transferred, (i) all of the
shares so called for redemption (as finally determined on the
Partial Redemption Determination Date in case of a partial
redemption) shall no longer be deemed outstanding, (ii) all
dividends shall cease to accrue thereon, and (iii) all voting and
other rights with respect to such shares shall cease and
terminate (except the right to receive the Redemption Price upon
a surrender of certificate(s) representing such shares). Upon
surrender in accordance with said notice of the certificates for
any shares so called for redemption (properly endorsed or
assigned for transfer, with signatures guaranteed by a national
bank or a New York Stock Exchange member firm), such shares shall
be redeemed by the Corporation at the Redemption Price. If fewer
than all the shares represented by any such certificate are
redeemed, a new certificate representing the unredeemed shares
shall be issued promptly without cost to the Record Holder
thereof.
(5) On or before the redemption date, the
Corporation shall deposit with an agent that is a bank or a trust
company (the "Paying Agent"), or otherwise designate or set aside
as provided in subparagraph (13)(e)(4) above, funds sufficient to
pay the Redemption Price for all shares of Series A Preferred
Stock to be redeemed on the redemption date, other than any such
shares that may have been previously delivered for other
consideration in a transaction otherwise permitted by this
Subparagraph (13). Any interest earned on funds so designated,
set aside, or deposited with a Paying Agent shall be retainable
by or payable to the Corporation, and holders of shares of Series
A Preferred Stock shall have no rights with respect thereto. Any
funds so deposited with a Paying Agent that shall remain
unclaimed by the Record Holders of redeemed shares at the end of
one year after the redemption date, together with any previously
unpaid interest earned thereon, shall be released or repaid by
the Paying Agent to the Corporation, and thereafter such Record
Holders shall look only to the Corporation for payment of the
Redemption Price.
(f) Mandatory Redemption.
--------------------
(1) From and after May 31, 2003, each Record Holder
of a share of Series A Preferred Stock shall have the right, upon
written notice to the Corporation, to require the Corporation, to
the extent permitted under applicable law, and subject to any
then applicable provisions in any contract, credit agreement,
indenture, or other outstanding debt security or instrument
binding upon the Corporation as of the date of filing of the
-13-<PAGE>
Corporation's Articles of Amendment adding this Subparagraph (13)
to paragraph C of Article V of the Corporation's Articles of
Incorporation, or any provisions in any subsequent contracts,
credit agreements, indentures, or other outstanding debt
securities or instruments binding upon the Corporation that are
similar in nature and effect to (and no more restrictive than)
the provisions in effect as of such date, to redeem at the
Redemption Price some or all of the shares of Series A Preferred
Stock owned by such Record Holder. No redemption may be requested
for a fractional share, or for less than all of a Record Holder's
shares if, as a result, such holder would hold of record less
than 500 shares of Series A Preferred Stock.
(2) The Corporation shall set the redemption date
at not more than 60 days after receipt by the Corporation of a
redemption notice pursuant to subparagraph (13)(f)(1), and the
Corporation shall give notice to the Record Holder thereof. In
order to receive payment of the Redemption Price, such Record
Holder must surrender to the Corporation (properly endorsed or
assigned for transfer, with signatures guaranteed by a national
bank or a New York Stock Exchange member firm) all stock
certificates representing the shares of Series A Preferred Stock
to be redeemed by the Corporation. If less than the full number
of shares of Series A Preferred Stock evidenced by any such
surrendered stock certificate are being redeemed, a new stock
certificate representing the unredeemed shares shall be issued
promptly without cost to the Record Holder thereof.
(3) If a Record Holder demands redemption pursuant
to subparagraph (13)(f)(1) above and if, by the redemption date,
the funds necessary for such redemption have been irrevocably
deposited by the Corporation with a Paying Agent, or otherwise
irrevocably designated or set aside as provided in subparagraph
(13)(e)(4), then from and after such redemption date,
notwithstanding that any certificate for any shares so designated
for redemption has not been surrendered by the Record Holder for
cancellation or that any such shares may have been transferred
(whether with or without the Corporation's permission), (i) any
shares so designated for redemption shall no longer be deemed
outstanding, (ii) any dividends payable thereon shall cease to
accrue, and (iii) all voting and other rights with respect to
such shares shall cease and terminate (except the right to
receive the Redemption Price upon a surrender of certificate(s)
representing such shares). Any interest earned on funds so
designated, set aside, or deposited with a Paying Agent shall be
retainable by or payable to the Corporation, and the Record
Holder of any shares of Series A Preferred Stock being redeemed
shall have no rights with respect thereto. Any funds so deposited
with a Paying Agent that shall remain unclaimed by the Record
Holder of any such redeemed shares at the end of one year after
the redemption date, together with any previously unpaid interest
earned thereon, shall be released or repaid by the Paying Agent
to the Corporation, and thereafter such Record Holder shall look
only to the Corporation for payment of the Redemption Price.
(4) The Corporation shall not be required to
establish any sinking or retirement fund with respect to the
shares of Series A Preferred Stock.
-14-<PAGE>
(g) Conversion.
----------
(1) Subject to and upon compliance with the
provisions of this subparagraph (13)(g), any Record Holder of
Series A Preferred Stock may, at its option, convert any or all
such shares of stock into shares of Class A Common Stock at the
rate of one share of Class A Common Stock (the "Conversion
Factor") for each $14.7875 (the "Conversion Price") of Conversion
Value (as defined below) of the shares of Series A Preferred
Stock so converted, subject to adjustments as set forth herein
below. The "Conversion Value'' of a share of Series A Preferred
Stock shall be equal to the Face Value thereof plus the amount of
any accrued but unpaid dividends thereon (whether or not
declared), calculated as of the applicable Conversion Date (as
defined in subparagraph (13)(g)(2) below). If a residual amount
of Conversion Value remains following a conversion of all shares
tendered for conversion (that is, an amount less than the then
effective Conversion Price for another whole share of Class A
Common Stock), the Corporation shall pay to the Record Holder in
cash such residual amount of Conversion Value in lieu of the
issuance of any fractional share of Series A Preferred Stock or
any fractional share of Class A Common Stock. If any share of
Series A Preferred Stock is called for redemption as provided in
Section (e) hereof, the conversion rights pertaining thereto will
terminate at the close of business two (2) business days
immediately preceding the redemption date thereof, provided that
if such redemption is not made on such redemption date, the
conversion rights set forth in this subparagraph (13) shall
thereafter be in effect (subject to the provisions of this
subparagraph (13)).
(2) A Record Holder of shares of Series A Preferred
Stock may exercise the conversion right as to all or any of the
shares (but not as to (i) a number of shares of Series A
Preferred Stock having an aggregate Conversion Value that is less
than the then effective Conversion Price for a whole share of
Class A Common Stock, or (ii) a number of shares of Series A
Preferred Stock that would result in such holder owning of record
less than 500 shares of Series A Preferred Stock) by delivering
to the Corporation during regular business hours, at its
principal executive office or at any such other place as may be
designated by the Corporation, the certificate or certificate(s)
for the shares of Series A Preferred Stock to be converted, duly
endorsed or assigned in blank (or to the Corporation if required
by it), with signatures guaranteed by a national bank or a New
York Stock Exchange member firm, and accompanied by written
notice stating that the Record Holder elects to convert such
shares of Series A Preferred Stock and stating the name or names
(with address) in which the certificate or certificates for the
Class A Common Stock are to be issued (subject to the provisions
of subparagraph (13)(j)). Conversion shall be deemed to have been
effected on the date when such delivery is made, and such date is
referred to herein as the "Conversion Date". From and after the
Conversion Date, no further dividends shall accrue with respect
to converted shares of Series A Preferred Stock, and no
-15-<PAGE>
previously accrued but unpaid dividends shall be payable with
respect thereto, the amount of any such previously accrued and
unpaid dividend to be included in the Conversion Value of the
converted shares on the Conversion Date as provided above. As
promptly as practicable after the Conversion Date (but in no
event later than five (5) business days thereafter), the
Corporation shall issue and deliver to or upon the written order
of such Record Holder (subject to the provisions of subparagraph
(13)(j)) a certificate or certificates for the number of full
shares of Class A Common Stock to which any such Record Holder is
entitled, a check or cash in respect of any residual amount of
Conversion Value of any converted share of Series A Preferred
Stock, and a new certificate for any unconverted shares of Series
A Preferred Stock previously represented by a surrendered
certificate (as described further below). Any person in whose
name the certificate or certificates for shares of Class A Common
Stock are to be issued shall be deemed to become a holder of
record of such shares on the applicable Conversion Date, unless
the transfer books of the Corporation are closed on that date, in
which event such person shall be deemed to have become a holder
of record of such shares on the next succeeding date on which the
transfer books are open, but the applicable Conversion Factor and
Conversion Value shall be those in effect on the Conversion Date.
Upon conversion of only a portion of the shares of Series A
Preferred Stock covered by a surrendered certificate, the
Corporation shall issue and deliver to or upon the written order
of the Record Holder of the surrendered certificate, at the
Corporation's expense, a new certificate for Series A Preferred
Stock representing the unconverted shares covered by the
surrendered certificate. Such new certificate shall entitle the
Record Holder thereof to dividends on the shares of Series A
Preferred Stock represented thereby to the same extent as if the
certificate theretofore covering such unconverted shares of
Series A Preferred Stock had not been surrendered in connection
with the conversion.
(3) No fractional shares of Class A Common Stock,
or scrip in respect thereof, shall be issued upon conversion of
Series A Preferred Stock. Instead, in any case in which a
fractional share of Class A Common Stock would otherwise be
issuable because the amount of remaining Conversion Value after
aggregation of all converted shares of Series A Preferred Stock
is less than the then effective Conversion Price for a whole
share of Class A Common Stock, the Corporation shall pay the
converting Record Holder the cash amount of such remaining
Conversion Value on the same date as delivery of certificates
relating to the shares of Class A Common Stock delivered in
connection with any such conversion, or within five (5) business
days of the Conversion Date.
(4) The Conversion Factor shall be subject to
adjustment from time to time as follows, PROVIDED, HOWEVER, that
no adjustment to the Conversion Factor need be made until
cumulative adjustments would affect the Conversion Factor by more
than one percent (1%):
(i) If the Corporation at any time or from time
to time shall issue warrants, options, or other rights
(including without limitation any class of common stock
convertible into Class A Common Stock) to the holders
of Class A Common Stock, as a class, entitling them to
subscribe for or purchase shares of Class A Common
-16-<PAGE>
Stock for a consideration per share less than the
Market Price per share of the Class A Common Stock (as
defined in clause (vii) below) on the date of such
issuance, then in each case the Conversion Factor shall
be adjusted by multiplying the Conversion Factor in
effect on the record date fixed for the determination
of holders of Class A Common Stock entitled to receive
such warrants, options, or rights by a fraction the
numerator of which is the number of shares of Class A
Common Stock outstanding on such record date plus the
number of additional shares of Class A Common Stock
offered for subscription or purchase, and the
denominator of which is the number of shares of Class 7
Common Stock outstanding on such record date plus the
number of shares of Class A Common Stock that the
aggregate offering purchase price of the total number
of shares of additional Class A Common Stock subject to
such warrants, options, or rights would purchase at
such Market Price. There shall be excluded from the
operation of this clause (i) any rights to acquire
shares of Class A Common Stock pursuant to any dividend
reinvestment plan established by the Corporation.
(ii) If, at any time or from time to time, the
number of shares of Class A Common Stock outstanding is
increased by a stock dividend payable in shares of
Class A Common Stock or by a subdivision or split-up of
shares of Class A Common Stock, then the Conversion
Factor in effect on the record date fixed for the
determination of holders of shares of Class A Common
Stock entitled to receive such stock dividend, or whose
shares of Class A Common Stock are included as part of
such subdivision or split-up, shall be appropriately
increased so that the number of shares of Class A
Common Stock issuable for the Conversion Price on
conversion of Series A Preferred Stock shall be
increased in proportion to such increase in outstanding
shares of Class A Common Stock.
(iii) If, at any time or from time to time the
number of shares of Class A Common Stock outstanding is
decreased by a combination (whether by reverse stock
split or otherwise) of the outstanding shares of Class
A Common Stock, then the Conversion Factor in effect on
the record date fixed for such combination shall be
appropriately decreased so that the number of shares of
Class A Common Stock issuable for the Conversion Price
on conversion of Series A Preferred Stock shall be
decreased in proportion to such decrease in outstanding
shares of Class A Common Stock.
(iv) In case, at any time or from time to time, of
(A) any capital reorganization or reclassification of
the shares of the Corporation (other than a change in
par value, or from par value to no par value, or from
no par value to par value, or as a result of a stock
dividend or a subdivision, split-up, or combination of
shares), (B) a business combination or merger of the
Corporation with or into another person (other than a
business combination or merger in which the Corporation
-17-<PAGE>
is the continuing entity and which does not result in
any change in the Class A Common Stock), (C) a sale or
other disposition of all or substantially all the
assets of the Corporation as an entirety to any other
person, or (D) any other transaction (including without
limitation any dividend or distribution payable
otherwise than in cash out of earnings or earned
surplus (determined in accordance with generally
accepted accounting principles, consistently applied)
but excluding any such dividend or distribution so
payable out of earnings or earned surplus and excluding
any other transaction described in clauses (i), (ii),
or (iii) above, whether or not such transaction results
in an adjustment pursuant to the terms of any such
clause) that is effected in such a manner that holders
of Class A Common Stock are entitled to receive (either
directly or upon subsequent liquidation) stock,
securities, or assets with respect to or in exchange
for Class A Common Stock, then each share of Series A
Preferred Stock shall immediately upon the consummation
of such reorganization, reclassification, business
combination, merger, sale or other disposition, or
other described transaction be (x) convertible into the
kind and number of shares of stock or other securities
or property of the Corporation, or of the entity
resulting from such business combination or surviving
such merger or to which such assets shall have been
sold or otherwise disposed, or (y) entitled to receive
upon conversion thereof the stock, securities, or other
assets with respect to or in exchange for Class A
Common Stock, to which a holder of the number of shares
of Class A Common Stock deliverable upon conversion of
such share of Series A Preferred Stock (immediately
prior to the consummation of such event) would have
been entitled upon such consummation.
(v) No adjustment in the Conversion Factor shall
have any effect upon the Conversion Value of a share of
Series A Preferred Stock, although each such adjustment
shall affect (in the manner described in this
subparagraph (13)(g)(4)) the number of shares of Class
A Common Stock issuable in respect of any particular
amount of Conversion Value and thus shall affect the
effective Conversion Price as to a whole share of Class
A Common Stock.
(vi) All calculations under this subparagraph
(13)(g)(4) shall be made to the nearest one-tenth
(1/10) of a cent or to the nearest one-tenth (1/10) of
a share, as the case may be.
(vii) For the purpose of any computation
pursuant to this subparagraph (13)(g)(4) or elsewhere
under this Agreement, "Market Price" on any date of one
share of Class A Common Stock shall be deemed to be
the average of the daily closing prices of the Class A
Common Stock for the ten (10) consecutive trading days
ending on the trading day immediately preceding the day
-18-<PAGE>
in question (as adjusted for any stock dividend, split,
combination, or reclassification that took effect
during such 10-day period). The closing price for each
day shall be the last reported sales price, regular
way, or, in case no such reported sale took place on
such day, the average of the last reported bid and
asked prices, regular way, in either case as officially
reported by the principal national securities exchange
on which the Class A Common Stock may then be listed
for trading; or, if the Class A Common Stock is not
permitted to trade on any such exchange, then such
sales price or such bid and asked prices for the Class
A Common Stock as quoted in the NASDAQ Inter-Dealer
Quotation System or such other similar inter-dealer
quotation system being used generally by members of the
National Association of Securities Dealers, Inc., or
any similar successor organization, for over-the-
counter transactions in securities, as such quotations
are reported by National Quotation Bureau,
Incorporated, or any similar successor organization;
or, if trading in the Class A Common Stock is not then
quoted through any such system or covered by quotation
reports of such organization, then such sales price or
such bid and asked prices as furnished by any New York
Stock Exchange member firm selected from time to time
by the Corporation for such purpose.
(viii) Any adjustment made pursuant to clauses
(i), (ii), or (iii) above shall become effective on the
date immediately after the record date referenced
therein.
(ix) In any case in which the provisions of this
subparagraph (13)(g)(4) shall require that an
adjustment become effective immediately after a record
date for an event, the Corporation may defer until the
occurrence of such event (A) issuing to the holder of
any share of Series A Preferred Stock converted after
such record date and before the occurrence of such
event the additional shares of Class A Common Stock
issuable upon such conversion by reason of the
adjustment required by such event over and above the
shares of Class A Common Stock issuable upon such
conversion before giving effect to such adjustment and
(B) paying to such holder any amount in cash in lieu of
a fractional share or in respect of residual Conversion
Value; provided, however, that the Corporation shall
deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive
such additional shares of Class A Common Stock, or such
cash, upon the occurrence of the event requiring such
adjustment.
(5) Whenever the Conversion Factor shall be
adjusted as provided in subparagraph (13)(g)(4), the Corporation
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<PAGE>
shall forthwith mail, first class and postage prepaid, to each
Record Holder of Series A Preferred Stock at its address
appearing on the Corporation's stock records for the Series A
Preferred Stock, a copy of a statement, certified by its chief
financial officer, showing the facts requiring such adjustment
and the Conversion Factor and effective Conversion Price per
whole share of Class A Common Stock that shall be in effect after
such adjustment. Where appropriate, such copy may be given in
advance and may be included as part of a notice required under
subparagraph (13)(g)(4).
(6) If the Corporation shall propose to (i) take
any action of the types described in clauses (i) or (iv) of
subparagraph (13)(g)(4), (ii) declare a dividend upon the Class A
Common Stock payable otherwise than in cash out of earnings or
earned surplus (determined in accordance with generally accepted
accounting principles, consistently applied) except for a stock
dividend payable in shares of Class A Common Stock, or (iii)
grant, issue or sell any options, convertible securities or
rights to purchase stock (other than shares of Class A Common
Stock), warrants, securities or other property pro-rata to the
record holders of Class A Common Stock, the Corporation shall
give notice to each Record Holder of Series A Preferred Stock, in
the manner set forth in subparagraph (13)(g)(5), which notice
shall specify the record date, if any, with respect to any such
action and the date on which such action is to take place. Such
notice shall also set forth such facts with respect thereto as
shall be reasonably necessary to indicate the effect of such
action (to the extent such effect may be known at the date of
such notice) on the Conversion Factor and effective Conversion
Price per whole share of Class A Common Stock and on the number,
kind, or class of stock or other securities or property that
shall be deliverable or purchasable upon the occurrence of such
action or thereafter deliverable upon conversion of Series A
Preferred Stock. In the case of any action that would require the
fixing of a record date, such notice shall be given at least 20
days prior to the date so fixed, and in the case of all other
action, such notice shall be given at least 25 days prior to the
taking of such proposed action. Failure to give such notice, or
any defect therein, shall not affect the legality or validity of
any such action.
(7) For the purposes of this subparagraph (13)(g),
the amount of Class A Common Stock at any time outstanding shall
not include Class A Common Stock then owned or held by or for the
account of the Corporation.
(8) The Corporation shall at all times reserve, out
of its treasury or authorized but unissued Class A Common Stock,
or both, solely for the purpose of effecting the conversion of
Series A Preferred Stock, sufficient shares to provide for the
Conversion of all shares of Series A Preferred Stock outstanding
from time to time. All shares of Class A Common Stock that are so
issuable shall, when issued, be, and the Corporation shall take
all such actions as are necessary to insure that all such shares
of Class A Common Stock are, duly and validly issued, fully paid
and nonassessable, and free from all taxes, liens, and charges.
The Corporation shall take such actions as may be necessary to
assure that all such shares of Class A Common Stock may be so
issued without violation of any applicable law or governmental
regulation or any requirements of any domestic securities
exchange or inter-dealer quotation system upon which shares of
-20-
<PAGE>
Class A Common Stock may be listed or qualified (except for
official notice of issuance, which shall be immediately delivered
by the Corporation upon each such issuance); provided, that the
Corporation shall not be required hereunder to register the
issuance of any such shares of stock under federal or state
securities laws. The Corporation shall take such actions as may
be necessary to assure that all such shares of Class A Common
Stock are listed or qualified on any domestic securities exchange
or inter-dealer quotation system on which shares of Class A
Common Stock are listed or qualified; provided, that the
Corporation shall not be required hereunder to register the
issuance of any such shares of stock under federal or state
securities laws.
(h) Reacquired Shares of Series A Preferred Stock.
---------------------------------------------
(1) All or any shares of Series A Preferred Stock
acquired by the Corporation and not retired may be transferred by
the Corporation to any other person(s). However, for so long as
such shares are held by the Corporation, and until such shares
are transferred to another person, no dividends shall accrue with
respect to such shares.
(2) The amount of Series A Preferred Stock
available for issuance pursuant to this Subparagraph (13) at any
time shall be the difference between the authorized number of
shares designated in subparagraph (13)(a) and the number of such
shares issued and outstanding at such time, and no reduction
shall be made for any shares of Series A Preferred Stock acquired
by the Corporation (including through redemptions under
subparagraph (13)(e) and (f) or conversions into Class A Common
Stock under subparagraph (13)(g)), unless such reacquired shares
have been expressly retired and cancelled.
(3) The Board of Directors may, with respect to any
unissued shares of Series A Preferred Stock or any shares of
Series A Preferred Stock reacquired by the Corporation after
original issuance, act by resolution to retire such shares and
restore them to the status of authorized but unissued shares of
Preferred Stock, without designation as to series, and may
thereafter act to designate, constitute, and issue some or all
such shares as part of a new or other series of Preferred Stock
in accordance with applicable law, the provisions of any
additional or supplementary section to this Subparagraph (13),
and any other provisions of the Articles of Incorporation.
(i) RANKING. For purposes of this Subparagraph
(13), the shares of any class or classes or any series of stock
of the Corporation shall be deemed to rank:
(1) Senior to the Series A Preferred Stock, either
as to dividends or upon liquidation, if the holders of such
shares shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation, or winding
up of the Corporation, as the case may be, in preference or
priority to the Record Holders of shares of Series A Preferred
Stock;
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<PAGE>
(2) PARI PASSU with the Series A Preferred Stock,
either as to dividends or upon liquidation, whether or not the
dividend rates, dividend payment dates, or redemption or
liquidation prices per share be different from those of the
Series A Preferred Stock, if the holders of such shares shall be
entitled to the receipt of dividends or of amounts distributable
upon dissolution, liquidation, or winding up of the Corporation,
as the case may be, in proportion to their respective dividend
rates or liquidation prices, without preference or priority, one
over the other, as between the holders of such shares and the
Record Holders of shares of Series A Preferred Stock; and
(3) Junior to the Series A Preferred Stock, either
as to dividends or upon liquidation, if such class shall be
Common Stock or if the holders of shares of Series A Preferred
Stock shall be entitled to receipt of dividends or of amounts
distributable upon dissolution, liquidation, or winding up of the
Corporation, as the case may be, in preference or priority to the
holders of such shares.
(j) Certain General Matters.
-----------------------
(1) Notwithstanding any other provision hereof, the
Corporation shall not be required to issue any certificate
representing shares of Class A Common Stock issuable upon
conversion of shares of Series A Preferred Stock, or representing
unconverted or unredeemed shares of Series A Preferred Stock
covered by a certificate surrendered in connection with any
conversion or redemption of other shares of Series A Preferred
Stock also covered by such Certificate, in the name of any person
other than the Record Holder of the subject shares of Series A
Preferred Stock on the Conversion Date or the redemption date, as
the case may be, unless such Record Holder shall demonstrate to
the Corporation's reasonable satisfaction that such issuance
complies with applicable federal and state securities laws
governing the registration (or exemption therefrom) of sales of
securities.
(2) Any action not permitted by this Subparagraph
(13) to be taken by the Corporation may nonetheless be taken by
it (if otherwise permitted by applicable law, the Articles of
Incorporation, and the bylaws of the Corporation) if the
Corporation obtains the affirmative vote or written consent of
the Record Holders of at least a majority of the outstanding
shares of Series A Preferred Stock.
(3) The Corporation shall have the right, in
connection with any issuance or transfer of a share of Series A
Preferred Stock, to establish by contract with the proposed
holder thereof any lawful restriction or limitation respecting
the transfer or other disposition of, or any exercise of rights
appurtenant to, such share with which such proposed holder shall
agree.
-22-<PAGE>
(4) The Corporation shall not close its books
against the transfer of shares of Series A Preferred Stock or of
Class A Common Stock issued or issuable upon conversion of Series
A Preferred Stock in any manner which interferes unduly with the
timely conversion of Series A Preferred Stock. The Corporation
shall assist and cooperate with any holder of shares of Series A
Preferred Stock required to make any governmental filings or
obtain any governmental approval prior to or in connection with
any conversion of Series A Preferred Stock hereunder (including,
without limitation, making any filings required to be made by the
Corporation); provided, that the Corporation shall not be
required hereunder to register the issuance of any such shares of
stock under federal or state securities laws.
(5) NOTICES. Unless otherwise provided in an
agreement between the Corporation and a holder of Series A
Preferred Stock, all notices, demands, or other communications to
be given or delivered by reason of this Subparagraph (13) shall
be in writing and shall be deemed to have been given (i) on the
date delivered in person, (ii) on the date indicated on the
return receipt if mailed postage prepaid, by certified or
registered U.S. Mail, with return receipt requested, (iii) on the
date transmitted by telex or facsimile, if sent by 5:00 P.M.,
Eastern Time, and confirmation of receipt thereof is reflected or
obtained, or (iv) IF sent by Federal Express or other nationally
recognized overnight courier service or overnight express U.S.
Mail, with service charges or postage prepaid, THEN on the next
business day after delivery to the courier service or U.S. Mail
(in time for and specifying next day delivery). In each case
(except for personal delivery) such notices, demands, and other
communications shall be sent to a holder of Series A Preferred
Stock at the address or telex or facsimile number for such holder
on the Company's stock records and to the Corporation at its
principal executive offices, as may be announced from time to
time, Attention: Secretary.
D. The Board of Directors may from time to time
distribute to shareholders out of capital surplus of the
Corporation a portion of its assets, in cash or in property.
-23-<PAGE>
VI.
None of the holders of any capital stock of the Corporation
of any kind, class or series now or hereafter authorized shall
have preemptive rights with respect to any shares of capital
stock of the Corporation of any kind, class or series now or
hereafter authorized.
VII.
No director of the Corporation shall be personally liable
to the Corporation or its shareholders for monetary damages for
breach of his duty of care or other duty as a director; provided,
that this provision shall eliminate or limit the liability of a
director only to the extent permitted from time to time by the
Georgia Business Corporation Code or any successor laws or laws.
VIII.
SECTION 1. DESIGNATION AND NUMBER OF SHARES. The
shares of such series shall be designated as "Series B
Participating Cumulative Preferred Stock" (the "SERIES B
PREFERRED STOCK"), and the number of shares constituting such
series shall be 1,000,000 The par value of each share of Series
B Preferred Stock shall be $1.00. If more than a total of
1,000,000 shares of Series B Preferred Stock shall be issuable
upon the exercise of rights (the "RIGHTS") issued pursuant to the
Rights Agreement dated as of March 16, 1998, between the
Corporation and Wachovia Bank, N.A., as rights agent (as such
agreement may be amended from time to time, the "RIGHTS
AGREEMENT"), the Board of Directors of the Corporation, pursuant
to Section 14-2-602 of the Georgia Business Corporation Code, as
amended, and in accordance with the provisions of the Articles of
Incorporation, shall adopt a resolution or resolutions increasing
the previously determined total number of shares of Series B
Preferred Stock authorized to be issued (to the extent that the
Articles of Incorporation then permit) to the largest number of
whole shares (rounded to the nearest whole number) issuable upon
exercise of the Rights and directing that a statement of Articles
of Amendment with respect to such increase in authorized shares
of the Series B Preferred Stock be executed and filed with the
Secretary of State of the State of Georgia. The number of shares
of the Series B Preferred Stock may be increased or decreased by
resolution of the Board of Directors; provided, however, that no
decrease shall reduce the number of shares of Series B Preferred
Stock to a number less than the number of shares then outstanding
plus the number of shares issuable upon exercise of the
outstanding Rights.
Section 2. Dividends and Distributions.
---------------------------------------
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking
prior and superior to the shares of Series B Preferred Stock with
respect to dividends, if any, the holders of shares of Series B
Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable on the last day of
March, June, September and December of each year (each such date
-24-<PAGE>
being referred to herein as a "QUARTERLY DIVIDEND PAYMENT DATE"),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of any share or fraction of a share of Series B
Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 and (b) subject to the
provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount (payable in kind) of all cash
dividends or other distributions and 100 times the aggregate per
share amount of all non-cash dividends or other distributions
(other than (i) a dividend payable in shares of Common Stock (as
defined below) of the Corporation or (ii) a subdivision of the
outstanding shares of Common Stock (by reclassification or
otherwise)) , declared on the Common Stock since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series B
Preferred Stock. The multiple of such cash and non-cash
dividends and distributions on the Common Stock applicable to the
determination of the dividends to be paid on the Series B
Preferred Stock, which shall initially be 100, but which shall be
adjusted from time to time as provided herein, is referred to
herein as the "DIVIDEND MULTIPLE." If the Corporation shall at
any time after March 16, 1998 (the "RIGHTS DECLARATION DATE"),
declare or pay any dividend or make any distribution on Common
Stock payable in shares of Common Stock or effect a subdivision
or split or combination, consolidation or reverse stock split of
the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common
Stock, then in each such case the Dividend Multiple thereafter
applicable to the determination of the amount which holders of
shares of Series B Preferred Stock shall be entitled to receive
shall be the Dividend Multiple applicable immediately prior to
such event multiplied by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event. For purposes hereof, "COMMON STOCK" means the
Corporation's Class A Common Stock, par value $0.10 per share,
and Class B Common Stock, par value $0.10 per share.
(B) The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in
SECTION 2(A) immediately after it declares a dividend or
distribution on the Common Stock (other than as described in
clauses (i) and (ii) of the first sentence of SECTION 2(A));
provided, however, that if no dividend or distribution shall have
been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date (or, with respect to the first Quarterly
Dividend Payment Date, the period between the first issuance of
any share or fraction of a share of Series B Preferred Stock and
such first Quarterly Dividend Payment Date), a dividend of $1.00
per share on the Series B Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series B Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue
of such shares of Series B Preferred Stock, unless the date of
issue of such shares is on or before the record date for the
first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue and be cumulative from the date
-25-<PAGE>
of issue of such shares, or unless the date of issue is a date
after the record date for the determination of holders of shares
of Series B Preferred Stock entitled to receive a quarterly
dividend and on or before such Quarterly Dividend Payment Date,
in which case dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on shares of
Series B Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares of
Series B Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date
shall not be more than 60 days prior to the date fixed for the
payment thereof.
SECTION 3. VOTING RIGHTS. In addition to any other
voting rights required by law, the holders of shares of Series B
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series B Preferred Stock
shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of shareholders of the Corporation. The
number of votes which a holder of a share of Series B Preferred
Stock is entitled to cast, as the same may be adjusted from time
to time, is hereinafter referred to as the "VOTE MULTIPLE." If
the Corporation shall at any time after the Rights Declaration
Date declare or pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or split or
combination, consolidation of reverse stock split of the
outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common
Stock, then in each such case, the Vote Multiple thereafter
applicable to the determination of the number of votes per share
to which holders of shares of Series B Preferred Stock shall be
entitled after such event shall be the Vote Multiple applicable
immediately prior to such event multiplied by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law,
the holders of shares of Series B Preferred Stock and the holders
of shares of Common Stock shall vote together as a single class
on all matters submitted to a vote of shareholders of the
Corporation; PROVIDED, HOWEVER, that, except as set forth in
SECTION 3(C), the holders of shares of Series B Preferred Stock
shall vote with the holders of the Class A Common Stock in the
election of directors.
(C) (i) If at any time dividends on any Series B
Preferred Stock shall be in arrears in an amount equal to six
quarterly dividends thereon (whether or not consecutive), the
occurrence of such contingency shall mark the beginning of a
period (herein called a "DEFAULT PERIOD") which shall extend
until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current quarterly
dividend period on all shares of Series B Preferred Stock then
-26-<PAGE>
outstanding shall have been declared and paid or set apart for
payment. During each default period, all holders of Series B
Preferred Stock and any other series of Preferred Stock then
entitled as a class to elect directors, voting together as a
single class, irrespective of series, shall have the right to
elect one Director.
(ii) During any default period, such voting right of
the holders of Series B Preferred Stock may be exercised
initially at a special meeting called pursuant to SECTION
3(C)(iii) or at any annual meeting of shareholders, and
thereafter at annual meetings of shareholders; provided, however,
that neither such voting right nor the right of the holders of
any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be
exercised unless the holders of 10% in number of shares of
Preferred Stock outstanding shall be present in person or by
proxy. The absence of a quorum of holders of Common Stock shall
not affect the exercise by holders of Preferred Stock of such
voting right. At any meeting at which holders of Preferred Stock
shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to
elect Directors to fill such vacancy, if any, in the Board of
Directors as may then exist up to one Director or, if such right
is exercised at an annual meeting, to elect one Director. If the
number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock
shall have the right to make such increase in the number of
Directors as shall be necessary to permit the election by them of
the required number. After the holders of the Preferred Stock
shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the
number of Directors shall not be increased or decreased except by
vote of the holders of Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior to
or pari passu with the Series B Preferred Stock.
(iii) Notwithstanding anything to the contrary
contained in the Corporation's Articles of Incorporation or
Bylaws, unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any
shareholder(s) owning in the aggregate not less than ten percent
(10%) of the total number of shares of Preferred Stock
outstanding, irrespective of series, may request, the calling of
a special meeting of holders of Preferred Stock, which meeting
shall thereupon be called by the President, a Vice President or
the Secretary of the Corporation. Notice of such meeting and of
any annual meeting at which holders of Preferred Stock are
entitled to vote pursuant to this SECTION 3(C)(iii) shall be
given to each holder of record of Preferred Stock by mailing a
copy of such notice to him at his last address as the same
appears on the books of the Corporation. Such meeting shall be
called for a time not earlier than 10 days and not later than 60
days after such order or request or in default of the calling of
such meeting within 60 days after such order or request. Such
meeting may be called on similar notice by any shareholder(s)
owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding,
irrespective of series. Notwithstanding the provisions of this
SECTION 3(C)(iii), no such special meeting shall be called during
the period within 60 days immediately preceding the date fixed
for the next annual meeting of shareholders.
-27-<PAGE>
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of Directors until the holders of Preferred Stock shall
have exercised their right to elect one Director voting as a
class, after the exercise of which right (x) the Director so
elected by the holders of Preferred Stock shall continue in
office until his or her successor shall have been elected by such
holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in
SECTION 3(C)(ii)) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the
class of stock which elected the Director whose office shall have
become vacant. References in this SECTION 3(C) to Directors
elected by the holders of a particular class of stock shall
include Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock, voting
as a separate class, to elect Directors shall cease, (y) the term
of any Director elected by the holders of Preferred Stock, voting
as a separate class, shall terminate, and (z) the number of
Directors shall be such number as may be provided for in the
Articles of Incorporation or Bylaws irrespective of any increase
made pursuant to the provisions of SECTION 3(C)(ii) (such number
being subject, however, to change thereafter in any manner
provided by law or in the Articles of Incorporation or Bylaws).
Any vacancies in the Board of Directors effected by the
provisions of clauses (y) and (z) in the preceding sentence may
be filled in any manner provided for in the Articles of
Incorporation or Bylaws.
(D) Except as otherwise provided herein, holders of
Series B Preferred Stock shall have no special voting rights, and
their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Series B Preferred Stock as
provided in SECTION 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on outstanding shares of Series B Preferred Stock shall
have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series B Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, except
dividends paid ratably on the Series B Preferred Stock and
all such other parity stock on which dividends are payable
or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
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(iii) redeem, purchase or otherwise acquire for value
any shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the
Series B Preferred Stock; provided, however, that the
Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for
shares of stock of the Corporation ranking junior (as to
dividends and upon dissolution, liquidation or winding up)
to the Series B Preferred Stock; or
(iv) redeem, purchase or otherwise acquire for value
any shares of Series B Preferred Stock, or any shares of
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the
Board of Directors) to all holders of Series B Preferred
Stock and all such other parity stock upon such terms as the
Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any Subsidiary
(as defined below) of the Corporation to purchase or otherwise
acquire for value any shares of stock of the Corporation unless
the Corporation could, under SECTION 4(A), purchase or otherwise
acquire such shares at such time and in such manner.
(C) A "SUBSIDIARY" of Corporation shall mean any
corporation or other entity of which securities or other
ownership interests entitled to cast as least a majority of the
votes that would be entitled to be cast in an election of the
Board of Directors of such corporation or other entity or other
persons performing similar functions are beneficially owned,
directly or indirectly, by the Corporation or by any corporation
or other entity that is otherwise controlled by the Corporation.
(D) The Corporation shall not issue any shares of
Series B Preferred Stock except upon exercise of Rights issued
pursuant to the Rights Agreement.
SECTION 5. REACQUIRED SHARES. Any shares of Series B
Preferred Stock redeemed, purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued
shares of Preferred Stock without designation as to series and
may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors as
permitted by the Articles of Incorporation or as otherwise
permitted under Georgia law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP
(A) Upon any liquidation, dissolution or winding up
of the Corporation, no distribution shall be made:
(i) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Preferred Stock unless, prior
-29-<PAGE>
thereto, the holders of shares of Series B Preferred Stock
shall have received $1.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment;
PROVIDED, HOWEVER, that the holders of shares of Series B
Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate
amount to be distributed per share to holders of Common
Stock, or
(ii) to the holders of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, except
distributions made ratably on the Series B Preferred Stock
and all such other parity stock in proportion to the total
amounts to which the holders of all such shares are entitled
upon such liquidation, dissolution or winding up. The
amount to which holders of Series B Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the
Corporation pursuant to the proviso to clause (i) above is
hereinafter referred to as the "PARTICIPATING LIQUIDATION
AMOUNT," and the multiple of the amount to be distributed to
holders of Common Stock upon the liquidation, dissolution or
winding up of the Corporation applicable pursuant to said
proviso, as such multiple may be adjusted from time to time
as hereinafter provided, is hereinafter referred to as the
"LIQUIDATION MULTIPLE." If the Corporation shall at any
time after the Rights Declaration Date pay any dividend on
Common Stock payable in shares of Common Stock or effect a
subdivision or split or combination, consolidation or
reverse stock split of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such
case the Liquidation Multiple thereafter applicable to the
determination of the amount to which holders of shares of
Series B Preferred Stock shall be entitled to receive after
such event shall be the Liquidation Multiple immediately
prior to such event multiplied by a fraction the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) For purposes of this SECTION 6, none of the
following events shall be deemed to be a voluntary or involuntary
liquidation, dissolution or winding up of the Corporation: (i)
the voluntary sale, conveyance, lease, exchange or transfer (for
cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the
Corporation; (ii) the combination, consolidation or merger of the
Corporation with or into one or more other corporations or other
associations; (iii) the consolidation or merger of one or more
corporations or other associations with or into the Corporation;
or (iv) participation by the Corporation in a share exchange.
SECTION 7. CERTAIN RECLASSIFICATION AND OTHER EVENTS
(A) If, after the Rights Declaration Date, holders
of shares of Common Stock receive in respect of their shares of
Common Stock any share of capital stock of the Corporation (other
than any share of Common Stock of the Corporation), whether by
-30-<PAGE>
way of reclassification, recapitalization, reorganization,
dividend or other distribution or otherwise (a "TRANSACTION"),
then, and in each such event, the dividend rights, voting rights
and rights upon the liquidation, dissolution or winding up of the
Corporation of the shares of Series B Preferred Stock shall be
adjusted so that after such event the holders of Series B
Preferred Stock shall be entitled, in respect of each share of
Series B Preferred Stock held, in addition to such rights in
respect thereof to which such holder was entitled immediately
prior to such adjustment, to
(i) such additional dividends as equal the Dividend
Multiple in effect immediately prior to such Transaction
multiplied by the additional dividends which the holder of a
share of Common Stock shall be entitled to receive by virtue
of the receipt in the Transaction of such capital stock,
(ii) such additional voting rights as equal the Vote
Multiple in effect immediately prior to such Transaction
multiplied by the additional voting rights to which the
holder of a share of Common Stock shall be entitled by
virtue of the receipt in the Transaction of such capital
stock, and
(iii) such additional distributions upon liquidation,
dissolution or winding up of the Corporation as equal the
Liquidation Multiple in effect immediately prior to such
Transaction multiplied by the additional amount which the
holder of a share of Common Stock shall be entitled to
receive upon liquidation, dissolution or winding up of the
Corporation by virtue of the receipt in the Transaction of
such capital stock, as the case may be, all as provided by
the terms of such capital stock.
(B) If, after the Rights Declaration Date, holders
of shares of Common Stock receive in respect of their shares of
Common Stock any right or warrant to purchase Common Stock
(including as such a right, for all purposes of this SECTION
7(B), any security convertible into or exchangeable for Common
Stock at a purchase price per share less than the Fair Market
Value (as defined below) of a share of Common Stock on the date
of issuance of such right or warrant, then, and in each such
event, the dividend rights, voting rights and rights upon the
liquidation dissolution or winding up of the Corporation of the
shares of Series B Preferred Stock shall each be adjusted so that
after such event the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple shall each be the product of the Dividend
Multiple, the Vote Multiple and the Liquidation Multiple, as the
case may be, in effect immediately prior to such event multiplied
by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such
issuance of rights or warrants plus the maximum number of shares
of Common Stock which could be acquired upon exercise in full of
all such rights or warrants and the denominator of which shall be
the number of shares of Common Stock outstanding immediately
before such issuance of rights or warrants plus the number of
shares of Common Stock which could be purchased, at the Fair
Market Value of the Common Stock at the time of such issuance, by
the maximum aggregate consideration payable upon exercise in full
of all such rights or warrants.
(C) If, after the Rights Declaration Date, holders
of shares of Common Stock receive in respect of their shares of
-31-<PAGE>
Common Stock any right or warrant to purchase capital stock
(other than shares of Common Stock), including as such a right,
for all purposes of this Section 7(C), any security convertible
into or exchangeable for capital stock of the Company (other than
Common Stock), at a purchase price per share less than the Fair
Market Value of a share of such capital stock on the date of
issuance of such rights or warrant, then, and in each such event,
the dividend rights, voting rights and rights upon the
liquidation, dissolution or winding up of the Corporation of the
shares of Series B Preferred Stock shall each be adjusted so that
after such event holders of Series B Preferred Stock shall be
entitled, in respect of each share of Series B Preferred Stock
held, in addition to such rights in respect thereof to which such
holder was entitled immediately prior to such event, to receive
(i) such additional dividends as equal the Dividend Multiple in
effect immediately prior to such event multiplied, first, by the
additional dividends to which the holder of a share of Common
Stock shall be entitled upon exercise of such right or warrant by
virtue of the capital stock which could be acquired upon such
exercise, and multiplied again by the Discount Fraction (as
defined below), (ii) such additional voting rights as equal the
Vote Multiple in effect immediately prior to such event
multiplied, first, by the additional voting rights to which the
holder of a share of Common Stock shall be entitled upon exercise
of such right or warrant by virtue of the capital stock which
could be acquired upon such exercise, and multiplied again by the
Discount Fraction, and (iii) such additional distributions upon
liquidation, dissolution or winding up of the Corporation as
equal the Liquidation Multiple in effect immediately prior to
such event multiplied, first, by the additional amount which the
holder of a share of Common Stock shall be entitled to receive
upon liquidation, dissolution or winding up of the Corporation
upon exercise of such right or warrant by virtue of the capital
stock which could be acquired upon such exercise, and multiplied
again by the Discount Fraction. For purposes of this SECTION
7(C), the "DISCOUNT FRACTION" shall be a fraction the numerator
of which shall be the difference between (x) the Fair Market
Value of a share of the capital stock subject to a right or
warrant distributed to holders of shares of Common Stock of the
Corporation as contemplated by this SECTION 7(C) immediately
after the distribution thereof and (y) the purchase price per
share for such share of capital stock pursuant to such right or
warrant, and the denominator of which shall be the Fair Market
Value of a share of such capital stock immediately after the
distribution of such right or warrant.
(D) For purposes of this SECTION 7, the "FAIR MARKET
VALUE" of a share of capital stock of the Corporation (including
a share of Common Stock) on any date shall be deemed to be the
average of the daily closing price per share thereof over the 30
consecutive Trading Days (as defined below) immediately prior to
such date; PROVIDED, HOWEVER, that in the event that such Fair
Market Value of any such share of capital stock is determined
during a period which includes any date that is within 30 Trading
Days after (i) the ex-dividend date for a dividend or
distribution on stock payable in shares of such stock or
securities convertible into shares of such stock, or (ii) the
effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such
stock, then, and in each such case, the Fair Market Value shall
be appropriately adjusted by the Board of Directors of the
Corporation to take into account ex-dividend or post-effective
date trading. The closing price for any day shall be the last
-32-<PAGE>
sale price, regular way, or in case no such sale takes place on
such day, the average of the closing bid and asked prices,
regular way (in either case, as reported in the applicable
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange, or, if the
shares are not listed or admitted to trading on the New York
Stock Exchange, as reported in the applicable transaction
reporting system with respect to securities listed on the
principal national securities exchange on which the shares are
listed or admitted to trading or, if the shares are not listed or
admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported
by The Nasdaq Stock Market or such other system then in use, or
if on any such date the shares are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
shares selected by the Board of Directors of the Corporation.
The term "TRADING DAY" shall mean a day on which the principal
national securities exchange on which the shares are listed or
admitted to trading is open for the transaction of business or,
if the shares are not listed or admitted to trading on any
national securities exchange, on which the New York Stock
Exchange or such other national securities exchange as may be
selected by the Board of Directors of the Corporation is open.
If the shares are not publicly held or not so listed or traded on
any day within the period of 30 Trading Days applicable to the
determination of Fair Market Value, "FAIR MARKET VALUE" shall
mean the fair market value thereof per share as determined in
good faith by the Board of Directors of the Corporation. In
either case referred to in the foregoing sentence, the
determination of Fair Market Value shall be described in a
statement filed with the Secretary of the Corporation.
SECTION 8. CONSOLIDATION OR MERGER. If the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case the
shares of Series B Preferred Stock shall at the same time be
similarly exchanged for or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount of stock, securities,
cash or any other property, as the case may be, into which or for
which each share of Common Stock is exchanged or changed. If the
Corporation shall at any time after the Rights Declaration Date
pay any dividend on Common Stock payable in shares of Common
Stock or effect a subdivision or split or combination,
consolidation or reverse stock split of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case
the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series B Preferred Stock
shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
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<PAGE>
SECTION 9. EFFECTIVE TIME OF ADJUSTMENTS.
(A) Adjustments to the Series B Preferred Stock required
by the provisions hereof shall be effective as of the time at
which the event requiring such adjustments occur.
(B) The Corporation shall give prompt written notice to
each holder of a share of outstanding Series B Preferred Stock of
the effect of any adjustment to the voting rights, dividend
rights or rights upon liquidation, dissolution or winding up of
the Corporation of such shares required by the provisions hereof.
Notwithstanding the foregoing sentence, the failure of the
Corporation to give such notice shall not affect the validity of
or the force or effect of or the requirement for such adjustment.
SECTION 10. NO REDEMPTION. The Series B Preferred
Stock shall not be redeemable.
SECTION 11. RANK. The Series B Preferred Stock shall
rank junior (as to dividends and upon liquidation, dissolution
and winding up) to all other series of the Corporation's
preferred stock, except any series that specifically provides
that such series shall rank junior to the Series B Preferred
Stock.
SECTION 12. FRACTIONAL SHARES. Series B Preferred
Stock may be issued in fractions of a share which shall entitle
the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series B Preferred Stock.
SECTION 13. AMENDMENT. The Articles of Incorporation
of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or
special rights of the Series B Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of a
majority or more of the outstanding shares of Series B Preferred
Stock, voting separately as a class.
-34-<PAGE>
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of June 30, 1998
among
INTERFACE, INC.,
INTERFACE EUROPE B.V.,
INTERFACE EUROPE LIMITED,
THE LENDERS LISTED HEREIN,
SUNTRUST BANK, ATLANTA
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Co-Agents,
and
SUNTRUST BANK, ATLANTA,
as Collateral Agent
=================================================================
FIRST CHICAGO CAPITAL MARKETS, INC.
and
SUNTRUST EQUITABLE SECURITIES CORPORATION,
as Arrangers
<PAGE>
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT made
and entered into as of June 30, 1998, by and among INTERFACE,
INC., a Georgia corporation ("Interface"), INTERFACE EUROPE 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 ("Europe B.V."), INTERFACE
EUROPE LIMITED, a private company limited by shares organized and
existing under the laws of England and Wales ("Europe Limited"),
and each other Foreign Subsidiary (as hereinafter defined) that
becomes a "Multicurrency Borrower" hereunder as provided in
Section 3.09 hereof (each an "Additional Multicurrency Borrower"
and collectively, the "Additional Multicurrency Borrowers";
Interface, Europe B.V., Europe Limited, and all Additional
Multicurrency Borrowers referred to collectively herein as the
"Borrowers"), SUNTRUST BANK, ATLANTA, a banking corporation
organized under the laws of the State of Georgia ("STBA"), 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 STBA, FNBC, or such
other banks and lending institutions which become "Lenders" as
provided herein (STBA, FNBC, and such other banks, lending
institutions, and assignees referred to collectively herein as
the "Lenders"), SUNTRUST BANK, ATLANTA, in its capacity as agent
for those Lenders having Domestic Syndicated Loan Commitments or
having outstanding Domestic Syndicated Loans as provided herein,
and each successor agent for such Lenders as may be appointed
from time to time pursuant to Article X hereof (the "Domestic
Agent"), THE FIRST NATIONAL BANK OF CHICAGO, in its capacity as
agent for those Lenders having outstanding Multicurrency
Syndicated Loan Commitments or having outstanding Multicurrency
Syndicated Loans as provided herein, and each successor agent for
such Lenders as may be appointed from time to time pursuant to
Article X hereof (the "Multicurrency Agent"; the Domestic Agent
and the Multicurrency Agent referred to collectively herein as
the "Co-Agents"), and SUNTRUST BANK, ATLANTA, 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 X hereof (the "Collateral Agent");
W I T N E S S E T H:
WHEREAS, Interface, Europe B.V., Europe Limited, the
lenders listed therein, SunTrust Bank, Atlanta and The First
National Bank of Chicago, as Co-Agents, and SunTrust Bank,
Atlanta, as Collateral Agent, are parties to a certain Second
Amended and Restated Credit Agreement dated as of June 27, 1997,
as amended by a certain First Amendment to Second Amended and
Restated Credit Agreement dated as of December 2, 1997 (as so
amended, the "Existing Credit Agreement");
-1-
<PAGE>
WHEREAS, the Borrowers have requested that the Existing
Credit Agreement be modified so as to (i) increase the Domestic
Syndicated Loan Commitments of the Domestic Syndicated Lenders
from an aggregate principal amount of $170,000,000 to an
aggregate principal amount of $220,000,000 and extend the
maturity date thereof, (ii) extend the maturity date of the
Multicurrency Syndicated Loan Commitments of the Multicurrency
Syndicated Lenders and provide for the issuance of Multicurrency
Letters of Credit in an aggregate stated amount at any time
outstanding not to exceed the Dollar Equivalent of $50,000,000,
and (iii) make certain other changes in the terms, conditions,
covenants and other provisions thereof;
WHEREAS, the Lenders, the Co-Agents, and the Collateral
Agent have agreed to amend and restate the Existing Credit
Agreement so as to incorporate the foregoing modifications,
subject to the terms, conditions and requirements set forth in
this Third Amended and Restated Credit Agreement;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, the Borrowers, the
Lenders, the Co-Agents and the Collateral Agent agree as follows:
ARTICLE I.
DEFINITIONS; CONSTRUCTION
Section 1.01. DEFINITIONS. In addition to the other
terms defined herein, the following terms used herein shall have
the meanings herein specified (to be equally applicable to both
the singular and plural forms of the terms defined):
"ACCEPTED DOMESTIC BID RATE" shall mean, with respect
to a Domestic Bid Rate Loan made by a particular Domestic Bid
Rate Lender for the relevant Interest Period, the rate of
interest per annum (rounded to the nearest 1/100 of one percent)
offered by such Domestic Bid Rate Lender and accepted by
Interface pursuant to Section 2.06(c)(5).
"ACCEPTED MULTICURRENCY BID RATE" shall mean, with
respect to a Multicurrency Bid Rate Loan made by a particular
Multicurrency Bid Rate Lender for the relevant Interest Period,
the rate of interest per annum (rounded to the nearest 1/100 of
one percent) offered by such Multicurrency Bid Rate Lender and
accepted by or on behalf of a Multicurrency Borrower pursuant to
Section 3.06(c)(5).
- 2 -
<PAGE>
"ACCOUNTS RECEIVABLE FACILITIES" shall mean, collec-
tively, the receivables financing facilities evidenced by the
Receivables Transfer Agreements, the Receivables Sale Agreements
and the Receivables Backup Purchase Agreements pursuant to which
(i) certain of the Consolidated Companies shall sell accounts
receivable to Interface SPC, (ii) Interface SPC shall sell such
accounts receivable (or undivided ownership interests therein) to
SPARCC or CIBC, and (iii) under certain circumstances, Interface
SPC shall sell such accounts receivable (or undivided ownership
interests therein) to the Bank Purchasers, TOGETHER WITH any
replacement receivables financing facilities for the Consolidated
Companies providing for discounts and advance rates, reserves,
and other pricing terms, recourse obligations, and covenants
applicable to Interface SPC and the other Consolidated Companies
that are no less favorable in any material respect than the
comparable provisions of the Accounts Receivable Facilities being
replaced or otherwise on terms and conditions approved by the Co-
Agents and the Required Lenders.
"ACQUIRED ENTITY" shall mean the assets, in the case of
an acquisition of assets of a business, or the capital stock or
other equity interests (or, if the context requires, the Person
that is the issuer of such capital stock or other equity
interests), in the case of an acquisition of capital stock or
other equity interests of a business, acquired by Interface or
any other Consolidated Company in an acquisition permitted under
the terms of this Agreement.
"ADDITIONAL MULTICURRENCY BORROWERS" shall mean,
collectively, all Foreign Subsidiaries that become Multicurrency
Borrowers pursuant to the terms of Section 3.09 hereof, and their
respective successors and permitted assigns.
"ADDITIONAL MULTICURRENCY BORROWER AGREEMENT" shall
mean any Additional Multicurrency Borrower Agreement entered into
by a Foreign Subsidiary to become a Multicurrency Borrower
hereunder in accordance with Section 3.09 and substantially in
the form of Exhibit A.
"ADJUSTED LIBO RATE" shall mean, with respect to each
Interest Period for a LIBOR Advance, the sum of (i) the rate ob-
tained by dividing (a) LIBOR for such Interest Period by (b) a
percentage equal to 1 MINUS the then stated maximum rate (stated
as a decimal) of all reserves requirements (including, without
limitation, any marginal, emergency, supplemental, special or
other reserves) applicable to any member bank of the Federal Re-
serve System in respect of Eurocurrency liabilities as defined in
Regulation D (or against any successor category of liabilities as
defined in Regulation D), PLUS (ii) a percentage sufficient to
compensate the Multicurrency Lenders for the cost of complying
with any reserves, liquidity and/or special deposit requirements
directly or indirectly affecting the maintenance or funding of
such Advances imposed by the Bank of England or any other central
bank or governmental or quasi-governmental authority of any
jurisdiction that is an issuer of an Agreed Currency or the
Council of the European Union.
- 3 -<PAGE>
"ADJUSTED SPECIAL LIBO RATE" shall mean the sum of
(i) the rate obtained by dividing (A) Special LIBOR as in effect
from time to time by (B) a percentage equal to 1 MINUS the then
stated maximum rate (stated as a decimal) of all reserves
requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or against
any successor category of liabilities as defined in
Regulation D), PLUS (ii) a percentage sufficient to compensate
the Multicurrency Syndicated Lenders for the cost of complying
with any reserves, liquidity and/or special deposit requirements
directly or indirectly affecting the maintenance or funding of
such Advances imposed by the Bank of England or any other central
bank or governmental or quasi-governmental authority of any
jurisdiction that is an issuer of an Agreed Currency or the
Council of the European Union.
"ADJUSTING EBITDA" shall mean, with respect to any
Acquired Entity or Divested Entity for any period, the net income
of such Entity for such period PLUS to the extent deducted in the
determination of such Entity's net income, the sum of such
Entity's (a) aggregate amount of income tax expense for such
period, (b) aggregate amount of interest expense for such period,
and (c) aggregate amount of amortization, depreciation and other
non-cash charges (including amortization of good will and other
intangible assets) for such period, all as determined in
accordance with GAAP, PROVIDED that (i) all non-recurring gains
or losses of such Entity for such period, and (ii) the gain or
loss for such period attributable to the sale of any assets of
such Entity outside the ordinary course of business shall not be
included in such Entity's net income.
"ADMINISTRATIVE OFFICE" shall mean that office of the
Multicurrency Agent designated as its "Administrative Office" on
the signature page for such Multicurrency Agent, or such other
office as may hereafter be designated in writing by the
Multicurrency Agent to Interface as being the "Administrative Of-
fice" for purposes of this Agreement.
"ADVANCE" shall mean a borrowing hereunder (or
conversion or continuation thereof) consisting of the aggregate
amount of Loans made (or continued or converted) at the same time
and of the same Type and, in the case of LIBOR Advances, in the
same Agreed Currency and for the same Interest Period, which
shall be made and outstanding as (i) the Domestic Syndicated
Loans, which Advance shall be made or outstanding in U.S. Dollars
as a Base Rate Advance or Eurodollar Advance, as the case may be,
(ii) the Multicurrency Syndicated Loans, which Advance shall be
made or outstanding as a Base Rate Advance (which Advance shall
be made in U.S. Dollars) or Eurocurrency Advance (which Advance
may be made in any Agreed Currency), as the case may be, (iii)
the Domestic Swing Line Loans, which Advance shall be made or
outstanding in U.S. Dollars as a Base Rate Advance or Domestic
Transaction Rate Advance, as the case may be, (iv) the
Multicurrency Swing Line Loans, which Advance shall be made or
outstanding in U.S. Dollars as a Base Rate Advance or a
Multicurrency Transaction Rate Advance, as the case may be, (v)
the Domestic Bid Rate Loans, which Advance shall be made or
outstanding in U.S. Dollars as a Domestic Bid Rate Advance, and
(vi) the Multicurrency Bid Rate Loans, which Advance shall be
made or outstanding in U.S. Dollars as a Multicurrency Bid Rate
Advance.
- 4 -<PAGE>
"AFFILIATE" of any Person means any other Person di-
rectly or indirectly controlling, controlled by, or under common
control with, such Person, whether through the ownership of
voting securities, by contract or otherwise. For purposes of
this definition, "control" (including with correlative meanings,
the terms "controlling", "controlled by", and "under common
control with") as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person.
"AGGREGATE DOMESTIC L/C OUTSTANDINGS" shall mean, at
any time with respect to all outstanding Domestic Letters of
Credit, the sum of the L/C Outstandings for such Domestic Letters
of Credit.
"AGGREGATE MULTICURRENCY L/C OUTSTANDINGS" shall mean,
at any time with respect to all outstanding Multicurrency Letters
of Credit, the sum of the L/C Outstandings for such Multicurrency
Letters of Credit.
"AGENTS" shall mean, collectively, the Co-Agents and
the Collateral Agent.
"AGREED CURRENCIES" shall mean (i) Dollars, (ii) so
long as such currencies remain Eligible Currencies, British
pounds sterling, German marks, Dutch guilders, French francs,
Japanese yen, and, from and after becoming generally available in
the international currency and exchange markets, the Euro, and
(iii) any other Eligible Currency which Interface requests the
Multicurrency Agent to include as an Agreed Currency hereunder
and which is acceptable to all of the Multicurrency Lenders. For
the purposes of this definition, each of the specific currencies
referred to in clause (ii) above shall mean and be deemed to
refer to the lawful currency of the jurisdiction referred to in
connection with such currency, E.G., "Japanese yen" means the
lawful currency of Japan.
"AGREEMENT" shall mean this Third Amended and Restated
Credit Agreement, as the same may be further amended, restated,
and supplemented from time to time.
"APPLICABLE COMMITMENT FEE RATE" shall mean the rate
for any day to be used to calculate commitment fees payable by
the Borrowers pursuant to Sections 4.05(b) and 4.05(c), expressed
as a percentage and determined from the chart set forth below
based on Interface's Funded Debt Coverage Ratio calculated as of
the relevant determination date:
Funded Debt Applicable Commitment
Coverage Ratio Fee Rate
-------------- ---------------------
Greater than or equal to 3.00 .25%
- 5 -<PAGE>
Less than 3.00, but greater than
or equal to 2.00 .20%
Less than 2.00 .15%
Each change in the Applicable Commitment Fee Rate resulting from
a change in the Funded Debt Coverage Ratio shall be effective
from and after the date that is five (5) Business Days after the
date of delivery to the Domestic Agent of the financial
statements and certificates required by Section 7.07(a), (b), and
(c), as applicable, indicating such change, until the date that
is five (5) Business Days immediately following the next date of
delivery of such financial statements and certificates indicating
another such change. Notwithstanding the foregoing, (i) from the
Closing Date through the date that is five (5) Business Days
after delivery by Interface of its financial statements for the
second fiscal quarter of its 1998 fiscal year pursuant to Section
7.07(b), the Applicable Commitment Fee Rate shall be not less
than .25%, and (ii) at any time during which Interface has failed
to deliver the financial statements and certificates when
required by Section 7.07(a), (b), and (c), as applicable, the
Applicable Commitment Fee Rate shall be .25%.
"APPLICABLE MARGIN" shall mean, with respect to all
outstanding Loans bearing interest based on a LIBO Rate or a
Special LIBO Rate, for any day, the applicable percentage
determined from the chart set forth below based on Interface=s
Funded Debt Coverage Ratio calculated as of the relevant
determination date:
Funded Debt
Coverage Ratio Applicable Margin
-------------- -----------------
Greater than or equal to 3.50 .750%
Less than 3.50, but greater than
or equal to 3.00 .625%
Less than 3.00, but greater than
or equal to 2.50 .500%
Less than 2.50, but greater than
or equal to 2.00 .400%
Less than 2.00 .350%
Each change in the Applicable Margin resulting from a change in
the Funded Debt Coverage Ratio shall be effective with respect to
outstanding Loans from and after the date that is five (5)
Business Days after the date of delivery to the Domestic Agent of
the financial statements and certificates required by Section
7.07(a), (b), and (c), as applicable, indicating such change,
until the date that is five (5) Business Days immediately
following the next date of delivery of such financial statements
and certificates indicating another such change. Notwithstanding
the foregoing, (i) from the Closing Date through the date that is
five (5) Business Days after delivery by Interface of its
- 6 -<PAGE>
financial statements for the second fiscal quarter of its 1998
fiscal year pursuant to Section 7.07(b), the Applicable Margin
shall be not less than .625%, and (ii) at any time during which
Interface has failed to deliver the financial statements and
certificates when required by Section 7.07(a), (b), and (c), as
applicable, the Applicable Margin shall be .750%.
"APPROPRIATE CO-AGENT" shall mean (i) with respect to
matters relating to the Multicurrency Revolving Loans and the
Multicurrency Letters of Credit, the Multicurrency Agent, and
(ii) with respect to matters relating to the Domestic Revolving
Loans, the Domestic Letters of Credit, and all other matters not
described in the preceding clause (i), the Domestic Agent.
"APPROXIMATE EQUIVALENT AMOUNT" of any currency with
respect to any amount of Dollars shall mean the Equivalent Amount
of such currency with respect to such amount of Dollars on or as
of such date, rounded up to the nearest amount of such currency
as determined by the Multicurrency Agent from time to time.
"ARRANGERS" shall mean, collectively, First Chicago
Capital Markets, Inc. and SunTrust Equitable Securities
Corporation.
"ASSET SALE" shall mean any sale or other disposition
(or a series of related sales or other dispositions), including
without limitation, loss, damage, destruction or taking, by any
Consolidated Company to any Person other than a Consolidated Com-
pany, of any property or asset (including capital stock but ex-
cluding the issuance and sale by Interface of its own capital
stock) having an aggregate Asset Value in excess of $100,000,
other than (i) sales of inventory made in the ordinary course of
business of any Consolidated Company and (ii) sales of accounts
receivables (or undivided ownership interests therein) of a
Consolidated Company pursuant to the Accounts Receivable
Facilities.
"ASSET VALUE" shall mean, with respect to any property
or asset of any Consolidated Company, an amount equal to the
greater of (i) the book value of such property or asset as estab-
lished in accordance with GAAP, and (ii) the fair market value of
such property or asset as determined in good faith by the board
of directors (or equivalent governing body in the case of any
limited liability company or partnership or any Foreign
Subsidiary) of such Consolidated Company.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment
and acceptance entered into by a Lender and an Eligible Assignee
in accordance with the terms of this Agreement and substantially
in the form of EXHIBIT H.
- 7 -<PAGE>
"BANK PURCHASERS" shall mean, collectively, CIBC and
each other financial institution, if any, that becomes a party to
the Receivables Backup Purchase Agreements, and their respective
successors and assigns.
"BANKRUPTCY CODE" shall mean The Bankruptcy Code of
1978, as amended and in effect from time to time (11 U.S.C.
Section 101 ET SEQ.).
"BASE RATE" shall mean the average of the following two
rates (with any change in the Base Rate to be effective as of the
date of change of either of the following rates):
(i) the higher of (a) the rate which the
Multicurrency Agent publicly announces from time to
time as its corporate base rate, as in effect from time
to time, and (b) the Federal Funds Rate, as in effect
from time to time, PLUS one-half of one percent (0.50%)
per annum. The Multicurrency Agent's corporate base
rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to
any customer; the Multicurrency Agent may make
commercial loans or other loans at rates of interest
at, above or below the Multicurrency Agent's corporate
base rate; and
(ii) the higher of (a) the rate which the Domestic
Agent publicly announces from time to time to be its
prime lending rate, as in effect from time to time, and
(b) the Federal Funds Rate, as in effect from time to
time, PLUS one-half of one percent (0.50%) per annum.
The Domestic Agent's prime lending rate is a reference
rate and does not necessarily represent the lowest or
best rate charged to customers; the Domestic Agent may
make commercial loans or other loans at rates of inter-
est at, above or below the Domestic Agent's prime lend-
ing rate.
"BASE RATE ADVANCE" shall mean an Advance made or out-
standing as (i) a portion of the Domestic Revolving Loans bearing
interest based on the Base Rate as provided in
Section 4.03(a)(i), or (ii) Multicurrency Revolving Loans made in
U.S. Dollars bearing interest based on the Base Rate as provided
in Section 4.03(b)(i).
"BENTLEY" shall mean Bentley Mills, Inc., a Delaware
corporation.
"BENTLEY ACQUISITION" shall mean the acquisition by In-
terface of all the capital stock of Bentley through the consumma-
tion of the transactions described in the Bentley Purchase Agree-
ment, other purchases of the capital stock of Bentley and the
merger of a Consolidated Company with and into Bentley.
"BENTLEY PURCHASE AGREEMENT" shall mean that certain
Agreement for Purchase of Capital Stock dated as of June 8, 1993,
among Interface, Bentley, First Capital Corporation of Chicago,
Madison Dearborn Partners IV, Chrysler Capital Corporation, and
Royce Renfroe, as the same may hereafter be amended, restated, or
supplemented from time to time as permitted by Section 9.13(b),
- 8 -<PAGE>
providing for the purchase by Interface of capital stock of
Bentley, as follows: (i) 32,700 shares (representing 85.7%) of
the issued and outstanding shares of Bentley's Senior Preferred
Stock, (ii) 15,621.5 shares (representing 78.5%) of the issued
and outstanding shares of Bentley's Junior Preferred Stock,
(iii) 826,920 shares (representing 76.2%) of the issued and
outstanding shares of Bentley's Class A Common Stock, and
(iv) 490,453 shares (representing 85.8%) of the issued and
outstanding shares of Bentley's Class B Common Stock, together
with all additional shares of such capital stock of each other
shareholder of Bentley that subsequently becomes a party to such
Agreement.
"BORROWERS" shall mean, (i) with respect to the
Domestic Revolving Loans, Interface, and (ii) collectively, with
respect to the Multicurrency Revolving Loans, Interface, Europe
B.V., Europe Limited, and all Additional Multicurrency Borrowers,
and their respective successors and permitted assigns.
"BORROWING" shall mean the incurrence by any Borrower
under any Facility of Advances of one Type and in the same Agreed
Currency concurrently having the same Interest Period (except as
otherwise provided in Sections 4.09 and 4.10) or the continuation
or conversion of an existing Borrowing or Borrowings in whole or
in part.
"BUSINESS DAY" shall mean (i) with respect to any
borrowing, payment or rate selection of LIBOR Advances, a day
(other than a Saturday or Sunday) on which banks generally are
open in Chicago, Illinois, Atlanta, Georgia, and New York, New
York for the conduct of substantially all of their commercial
lending activities and on which dealings in Dollars and the other
Agreed Currencies are carried on in the London interbank market
(and, if the Advances which are the subject of such borrowing,
payment or rate selection are denominated in Euros, a day upon
which such clearing system as is determined by the Multicurrency
Agent to be suitable for clearing or settlement of Euros is open
for business), and (ii) for all other purposes, a day (other than
a Saturday or Sunday) on which banks generally are open in
Chicago, Illinois, Atlanta, Georgia, and New York, New York for
the conduct of substantially all of their commercial lending
activities.
"CIBC" shall mean Canadian Imperial Bank of Commerce, a
banking institution organized and existing under the laws of
Canada, and its successors and assigns.
"CAPITAL EXPENDITURES" shall mean, for any period, the
sum of (i) expenditures (whether paid in cash or accrued as a li-
ability, including the portion of capital leases originally in-
curred during such period that is capitalized on the consolidated
balance sheet of the Consolidated Companies) by the Consolidated
Companies during that period that, in conformity with GAAP, are
included in "capital expenditures", "additions to property, plant
- 9 -<PAGE>
or equipment" or comparable items in the financial statements of
the Consolidated Companies, and (ii) to the extent not included
in clause (i) above, expenditures for all net non-current assets
of businesses acquired by the Consolidated Companies during that
period, including all purchase price adjustments, other than such
assets acquired in transactions where all or substantially all of
the consideration paid for such assets consisted of capital stock
of a Consolidated Company.
"CHANGE IN CONTROL" shall mean and be deemed to occur
on the earliest of, and upon any subsequent occurrence of, any of
the following:
(a) at any time during which the holders of
Interface's Class B common stock are entitled to elect a
majority of Interface's board of directors, the members of
the Existing Shareholder Group shall at any time fail to be
the "beneficial owners" (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934 (the "Exchange
Act")) of a majority of the issued and outstanding shares of
Interface's Class B common stock;
(b) at any time during which the holders of
Interface's Class B common stock have ceased to be entitled
to elect a majority of Interface's board of directors, (i)
any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), other than the
Existing Shareholder Group, shall become the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of more than 35% of the total capital stock of
Interface entitled to vote for the election of directors
(the "Voting Stock"), if at such time the members of the
Existing Shareholder Group (A) "beneficially own" (as so
defined) a lower percentage of the Voting Stock than such
other person or "group" and (B) do not have the right or
ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors
of Interface, or (ii) Interface consolidates with, or merges
with or into, another person or sells, assigns, conveys,
transfers, leases or otherwise disposes of all or
substantially all of its assets to any person, or any person
consolidates with, or merges with or into, Interface, in any
such event pursuant to a transaction in which the
outstanding Voting Stock of Interface is converted into or
exchanged for cash, securities or other property, other than
any such transaction where (A) the outstanding Voting Stock
of Interface is converted into or exchanged for (1) Voting
Stock (other than Redeemable Capital Stock) of the surviving
or transferee corporation or (2) cash, securities and other
property in an amount which could then be paid by Interface
pursuant to Section 9.04, or a combination thereof, and (B)
immediately after such transaction no "person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), excluding the members of the Existing
Shareholder Group, is the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire,
whether such right is exercisable immediately or only after
the passage of time, upon the happening of an event or
otherwise), directly or indirectly, of more than 50% of the
total Voting Stock of the surviving or transferee
corporation;
- 10 -<PAGE>
(c) at any time during any consecutive two-year
period, individuals who at the beginning of such period
constituted the board of directors of Interface (together
with any new directors whose election by such board of
directors or whose nomination for election by the
stockholders of Interface was approved by a vote of 66-2/3%
of the directors then still in office who were either
directors at the beginning of such period or whose election
or nomination for election was previously so approved) cease
for any reason to constitute a majority of the board of
directors of Interface then in office; or
(d) Interface is liquidated or dissolved or adopts a
plan of liquidation.
"CHANGE IN CONTROL PROVISION" shall mean any term or
provision contained in any indenture, debenture, note, or other
agreement or document evidencing or governing Interface Control
Debt which requires, or permits the holder(s) of such Interface
Control Debt to require, that such Interface Control Debt be re-
deemed, repurchased, defeased, prepaid or repaid, either in whole
or in part, or the maturity of such Interface Control Debt to be
accelerated in any respect, as a result of a change in ownership
of the capital stock of Interface or voting rights with respect
thereto.
"CLASS B SHAREHOLDERS' AGREEMENT" shall mean that cer-
tain Voting Agreement for Interface, Inc. Class B Common Stock
Shareholders dated as of April 13, 1993, by and among Ray C.
Anderson and approximately 38 other holders of Class B common
stock of Interface, pursuant to which Ray C. Anderson is entitled
to direct the voting of the shares of Class B common stock
subject thereto.
"COLLATERAL AGENT" shall mean STBA acting in the
capacity as collateral agent, collateral trustee, pledgee,
secured party, or any similar capacity under any Security
Document, any nominee or designee of STBA acting in such
capacity, and any successor collateral agent appointed from time
to time pursuant to Article X.
"COMMITMENT" shall mean (i) for any Lender at any time,
any of its Domestic Syndicated Loan Commitment or Multicurrency
Syndicated Loan Commitment, (ii) for the Domestic Swing Line
Lender at any time, its Domestic Swing Line Commitment, and
(iii) for the Multicurrency Swing Line Lender at any time, its
Multicurrency Swing Line Commitment, in each case as the context
may require.
"Consolidated Adjusted EBITDA" shall mean, for any
fiscal period of Interface, an amount equal to (i) Consolidated
EBITDA for such period, PLUS (or MINUS if the Adjusting EBITDA
referred to in the following clause (ii) shall be a negative
number) (ii) the Adjusting EBITDA for such period for each
Acquired Entity acquired at any time after the beginning of such
fiscal period (but without duplication of any amounts already
reflected in Consolidated EBITDA as determined in clause (i)
above), MINUS (or PLUS if the Adjusting EBITDA referred to in the
following clause (iii) is a negative number) (iii) the Adjusting
- 11 -<PAGE>
EBITDA for such period for each Divested Entity sold or otherwise
disposed of at any time after the beginning of such fiscal period
(but without duplication of any amounts already reflected in
Consolidated EBITDA as determined in clause (i) above).
"CONSOLIDATED COMPANIES" shall mean, collectively, In-
terface and all of its Subsidiaries.
"CONSOLIDATED EBITA" shall mean, for any fiscal period
of Interface, an amount equal to (A) the sum for such fiscal
period of Consolidated Net Income (Loss) PLUS, to the extent
subtracted in determining such Consolidated Net Income (Loss),
provisions for taxes based on income (or MINUS tax benefits in
respect of such taxes as reflected in the financial statements
for such fiscal period), Consolidated Interest Expense, and
amortization of goodwill and deferred financing costs, MINUS (B)
any non-recurring gains (or PLUS any non-recurring losses) for
such period and MINUS (C) the gain (or PLUS the loss) for such
period attributable to the sale of any assets outside the
ordinary course of business.
"CONSOLIDATED EBITDA" shall mean, for any fiscal period
of Interface, an amount equal to (i) Consolidated EBITA for such
period, PLUS (ii) to the extent subtracted in determining
Consolidated Net Income (Loss) for such period, depreciation
expense of the Consolidated Companies determined for such period
in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any
fiscal period of Interface, total interest expense of the
Consolidated Companies (including without limitation, interest
expense attributable to capitalized leases in accordance with
GAAP, all capitalized interest, all commissions, discounts and
other fees and charges owed with respect to bankers acceptance
financing, and total interest expense (whether shown as interest
expense, other expense, or as loss and expenses on sale of
receivables) under a receivables purchase facility) determined on
a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME (LOSS)" shall mean, for any
fiscal period of Interface, the net income (or loss) of the Con-
solidated Companies on a consolidated basis for such period
(taken as a single accounting period) determined in conformity
with GAAP, but excluding therefrom (to the extent otherwise
included therein) (i) any gains or losses, together with any
related provision for taxes, realized upon any sale of assets
other than in the ordinary course of business, (ii) any income or
loss of any Acquired Entity accrued prior to the date of the
acquisition thereof, and (iii) the income of any Consolidated
Company to the extent that the declaration or payment of
dividends or similar distributions by such Consolidated Company
of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation.
- 12 -<PAGE>
"CONSOLIDATED NET WORTH" shall mean, as of any date of
determination, Shareholders' Equity of Interface, excluding
(i) the effects of foreign currency translation adjustments under
Financial Accounting Standards Board Statement No. 52 as in
effect from time to time, and (ii) after-tax gains on the sales
of assets outside the ordinary course of business of the
Consolidated Companies and any after-tax gains with respect to
pension reversions, in any case with respect to (i) and (ii)
above, as such adjustments or gains occur subsequent to
December 28, 1997.
"CONSOLIDATED TOTAL LIABILITIES" shall mean, as at any
date of determination, total liabilities of the Consolidated Com-
panies determined on a consolidated basis in accordance with
GAAP.
"CONTRACTUAL OBLIGATION" of any Person shall mean any
provision of any security issued by such Person or of any agree-
ment, instrument or undertaking under which such Person is obli-
gated or by which it or any of the property owned by it is bound.
"CONTRIBUTION AGREEMENT" shall mean the Amended and
Restated Contribution Agreement executed by each of the
Guarantors, substantially in the form of EXHIBIT I attached
hereto, as the same may be amended, restated or supplemented from
time to time.
"CREDIT DOCUMENTS" shall mean, collectively, this
Agreement, the Notes, the Letter of Credit Agreement, the
Guaranty Agreements, the L/C Cash Collateral Assignment, the IRB
Collateral Documents, and all other Security Documents.
"CREDIT PARTIES" shall mean, collectively, each of the
Borrowers, the Guarantors, and the L/C Account Parties (including
all Persons that are currently Borrowers, Guarantors, and L/C
Account Parties and all Persons who may at any time in the future
become Borrowers, Guarantors, or L/C Account Parties), and every
other Person who from time to time executes a Security Document
with respect to all or any portion of the Obligations.
"CURRENCY CONTRACTS" shall mean any forward contracts,
futures contracts, foreign exchange contracts, currency swap
agreements, and other similar agreements and arrangements entered
into by any Consolidated Company designed to protect any Consoli-
dated Company against fluctuations in foreign exchange rates.
"DEFAULT" shall mean any condition or event which, with
notice or lapse of time or both, would constitute an Event of De-
fault.
- 13 -<PAGE>
"DIVESTED ENTITY" shall mean the assets, in the case of
a sale or other disposition of assets of a business, or the
capital stock or other equity interests (or, if the context
requires, the Person that is the issuer of such capital stock or
other equity interests), in the case of a sale or other
disposition of capital stock or other equity interests of a
business, sold or otherwise disposed of by Interface or any other
Consolidated Company pursuant to a transaction permitted by this
Agreement.
"DOLLAR" and "U.S. DOLLAR" and the sign "$" shall mean
lawful money of the United States of America.
"DOLLAR EQUIVALENT" shall mean, with respect to any
monetary amount in a currency other than U.S. Dollars, at any
obtained by converting such currency involved in such computation
into U.S. Dollars calculated on the basis of the arithmetical
mean of the buy and sell spot rates of exchange of the
Multicurrency Agent for the purchase of U.S. Dollars with the
applicable currency as quoted by the Multicurrency Agent for such
currency on the London market at 11:00 a.m. London time on the
date of determination thereof specified herein or, if the date of
determination thereof is not otherwise specified herein, on the
date two applicable Business Days prior to such determination.
"DOMESTIC AGENT" shall mean STBA, acting in the manner
and to the extent described in Article X, and any successor do-
mestic agent appointed pursuant to Article X hereof.
"DOMESTIC BID RATE" shall mean the rate of interest
specified by a Domestic Syndicated Lender in its Domestic Bid
Rate Quote as provided in Section 2.06(c)(3).
"DOMESTIC BID RATE ACCEPTANCE NOTICE" shall mean the
notice given by Interface to the Domestic Agent accepting one or
more Domestic Bid Rate Quotes as provided in Section 2.06(c)(5).
"DOMESTIC BID RATE ADVANCE" shall mean a Borrowing
pursuant to Section 2.06 consisting of the aggregate amount of
one or more Domestic Bid Rate Loans made by one or more of the
Domestic Syndicated Lenders to Interface at the same time, on the
same interest rate basis, and for the same Interest Period.
"DOMESTIC BID RATE BORROWING" shall mean a Borrowing
consisting or to consist of a Domestic Bid Rate Advance.
"DOMESTIC BID RATE FACILITY" shall mean the credit
facility being made available by the Domestic Syndicated Lenders
to Interface as described in Section 2.06(a).
"DOMESTIC BID RATE LENDER" shall mean a Domestic
Syndicated Lender making one or more Domestic Bid Rate Loans
pursuant to Section 2.06.
- 14 -<PAGE>
"DOMESTIC BID RATE LOANS" shall mean, collectively, the
loans made to Interface by the Domestic Bid Rate Lenders pursuant
to Section 2.06.
"DOMESTIC BID RATE NOTES" shall mean, collectively, the
promissory notes evidencing the Domestic Bid Rate Loans
substantially in the form of EXHIBIT L and duly completed in
accordance with the terms hereof.
"DOMESTIC BID RATE QUOTE" shall mean an offer or offers
by a Domesticated Syndicated Lender to make one or more Domestic
Bid Rate Loans to Interface, substantially in the form of
EXHIBIT Q hereto completed and delivered by such Domesticated
Syndicated Lender to the Domestic Agent in accordance with
Section 2.06(c)(3).
"DOMESTIC BID RATE QUOTE REQUEST" shall mean a request
transmitted by Interface to the Domestic Agent for offers from
the Domestic Syndicated Lenders to make Domestic Bid Rate Loans
substantially in the form of EXHIBIT O hereto completed and
delivered to the Domestic Agent in accordance with Section
2.06(c)(1).
"DOMESTIC L/C EXPOSURE" shall mean, for each Domestic
Lender, and with respect to all Domestic Letters of Credit as to
which it was a Participating Lender, the sum, for all such
Domestic Letters of Credit, of the product of (i) the L/C
Outstandings for each Domestic Letter of Credit, MULTIPLIED BY
(ii) such Domestic Lender's applicable L/C Pro Rata Share for
such Domestic Letter of Credit.
"DOMESTIC L/C ISSUER" shall mean SunTrust Bank,
Atlanta, a Georgia banking corporation, and each other issuer of
a Domestic Letter of Credit pursuant to the Letter of Credit
Agreement, and their respective successors and assigns.
"DOMESTIC L/C SUBCOMMITMENT" shall mean, at any time
for any Domestic Syndicated Lender, the amount of the Domestic
Letter of Credit Subcommitment set forth opposite such Domestic
Syndicated Lender's name on the signature page of the Letter of
Credit Agreement, as the same may be adjusted from time to time
pursuant to the terms of the Letter of Credit Agreement. As of
the date of this Agreement, the aggregate amount of the Domestic
L/C Subcommitments for all Domestic Syndicated Lenders is
$40,000,000.
"DOMESTIC LETTER OF CREDIT" shall mean any letter of
credit issued by the Domestic L/C Issuer for the account of an
L/C Account Party pursuant to the Letter of Credit Agreement, as
the same may be amended, extended or re-issued from time to time.
- 15 -<PAGE>
"DOMESTIC REVOLVING LOANS" shall mean, collectively,
all Domestic Syndicated Loans, Domestic Swing Line Loans, and
Domestic Bid Rate Loans.
"DOMESTIC SWING LINE ADVANCE" shall mean a Borrowing
pursuant to Section 2.05 consisting of a Domestic Swing Line Loan
(which may be made either as a Base Rate Advance or as a Domestic
Transaction Rate Advance) made by the Domestic Swing Line Lender
to Interface on the same date and interest rate basis and, if
made as a Fixed Rate Advance, for the same Interest Period.
"DOMESTIC SWING LINE BORROWING" shall mean a Borrowing
consisting or to consist of a Domestic Swing Line Advance.
"DOMESTIC SWING LINE BORROWING NOTICE" shall mean the
notice given by Interface to the Domestic Agent requesting a
Domestic Swing Line Advance as provided in Section 2.05(c).
"DOMESTIC SWING LINE COMMITMENT" shall mean the
commitment of the Domestic Swing Line Lender to make Domestic
Swing Line Loans in an aggregate principal amount at any time
outstanding not to exceed $5,000,000.
"DOMESTIC SWING LINE FACILITY" shall mean the credit
facility described in Section 2.05.
"DOMESTIC SWING LINE LENDER" shall mean STBA or any
subsequent Domestic Syndicated Lender extending to Interface the
Domestic Swing Line Commitment hereunder.
"DOMESTIC SWING LINE LOANS" shall mean, collectively,
the loans made to Interface by the Domestic Swing Line Lender
pursuant to Section 2.05.
"DOMESTIC SWING LINE NOTE" shall mean the promissory
note evidencing the Domestic Swing Line Loans substantially in
the form of Exhibit K and duly completed in accordance with the
terms hereof.
"DOMESTIC SYNDICATED ADVANCE" shall mean a Borrowing
pursuant to Section 2.02 consisting of the aggregate amount of
Domestic Syndicated Loans made by the Domestic Syndicated Lenders
to Interface at the same time, on the same interest rate basis
and, if made as a Fixed Rate Advance, for the same Interest
Period.
"DOMESTIC SYNDICATED BORROWING" shall mean a Borrowing
consisting or to consist of a Domestic Syndicated Advance.
- 16 -<PAGE>
"DOMESTIC SYNDICATED BORROWING NOTICE" shall mean the
notice given by Interface to the Domestic Agent requesting one or
more Domestic Syndicated Advances as provided in Section 2.02(c).
"DOMESTIC SYNDICATED FACILITY" shall mean the credit
facility made available by the Domestic Syndicated Lenders to
Interface as described in Section 2.02(a).
"DOMESTIC SYNDICATED LENDERS" shall mean, collectively,
the Lenders extending the Domestic Syndicated Loan Commitments to
Interface pursuant to Section 2.02(a).
"DOMESTIC SYNDICATED LOAN COMMITMENT" shall mean, at
any time for any Domestic Syndicated Lender, the amount of such
commitment set forth opposite such Domestic Syndicated Lender's
name on the signature pages of this Agreement, as the same may be
increased or decreased from time to time as a result of any
reduction thereof pursuant to Section 2.03, any assignment
thereof pursuant to Section 11.06, or any amendment thereof
pursuant to Section 11.02, such commitment including, without
limitation, such Domestic Syndicated Lender's Domestic L/C
Subcommitment. As of the date of this Agreement, the aggregate
amount of the Domestic Syndicated Loan Commitments for all
Domestic Syndicated Lenders if $220,000,000.
"DOMESTIC SYNDICATED LOANS" shall mean, collectively,
the loans made to Interface by the Domestic Syndicated Lenders
pursuant to Section 2.02.
"DOMESTIC SYNDICATED NOTES" shall mean, collectively,
the promissory notes evidencing the Domestic Syndicated Loans in
the form attached hereto as EXHIBIT B duly completed in
accordance with the terms hereof.
"DOMESTIC TRANSACTION RATE" shall mean the rate of
interest specified by the Domestic Swing Line Lender to Interface
as being applicable to a Domestic Swing Line Loan requested by
Interface pursuant to Section 2.05(c).
"DOMESTIC TRANSACTION RATE ADVANCE" shall mean an
Advance made or outstanding as a Domestic Swing Line Loan bearing
interest based on the Domestic Transaction Rate as provided in
Section 4.03(a)(iv).
"DOMESTIC TRANSACTION RATE QUOTE" shall mean an offer
by the Domestic Swing Line Lender to make a Domestic Swing Line
Loan to Interface at the Domestic Transaction Rate specified
therein for the Interest Period to be applicable to the Domestic
Swing Line Loan as specified therein, pursuant to Section
2.05(c).
- 17 -<PAGE>
"ELIGIBLE ASSIGNEE" shall mean any financial
institution reasonably acceptable to Interface and the Co-Agents.
"ELIGIBLE CURRENCY" shall mean any currency other than
Dollars (i) that is readily available, (ii) that is freely
traded, (iii) in which deposits are customarily offered to banks
in the London interbank market, (iv) that is convertible into
Dollars in the international interbank market and (v) as to which
an Equivalent Amount may be readily calculated. If, after the
designation by the Multicurrency Lenders of any currency as an
Agreed Currency, (x) currency control or other exchange
regulations are imposed in the country in which such currency is
issued with the result that different types of such currency are
introduced, (y) such currency is, in the determination of the
Multicurrency Agent, no longer readily available or freely
traded, or (z) in the determination of the Multicurrency Agent,
an Equivalent Amount of such currency is not readily calculable,
the Multicurrency Agent shall promptly notify the Multicurrency
Lenders and Interface, and such currency shall no longer be an
Agreed Currency until such time as all of the Multicurrency
Lenders agree to reinstate such currency as an Agreed Currency
and promptly, but in any event within five Business Days of
receipt of such notice from the Multicurrency Agent, the
applicable Multicurrency Borrower shall repay all Loans in such
affected currency or convert such Loans into Loans in Dollars or
another Agreed Currency, subject to the other terms set forth in
Article III.
"ENVIRONMENTAL LAWS" shall mean all federal, state, lo-
cal and foreign statutes and codes or regulations, rules or ordi-
nances issued, promulgated, or approved thereunder, now or
hereafter in effect (including, without limitation, those with
respect to asbestos or asbestos containing material or exposure
to asbestos or asbestos containing material), relating to
pollution or protection of the environment and relating to public
health and safety, relating to (i) emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals or industrial toxic or hazardous constituents,
substances or wastes, including without limitation, any Hazardous
Substance, petroleum including crude oil or any fraction thereof,
any petroleum product or other waste, chemicals or substances
regulated by any Environmental Law into the environment
(including without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), or (ii) the
manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of any
Hazardous Substance, petroleum including crude oil or any
fraction thereof, any petroleum product or other waste, chemicals
or substances regulated by any Environmental Law, and
(iii) underground storage tanks and related piping, and
emissions, discharges and releases or threatened releases
therefrom, such Environmental Laws to include, without limitation
(i) the Clean Air Act (42 U.S.C. Section 7401 ET SEQ.), (ii) the
Clean Water Act (33 U.S.C. Section 1251 ET SEQ.), (iii) the
- 18 -<PAGE>
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 ET
SEQ.), (iv) the Toxic Substances Control Act (15 U.S.C.
Section 2601 ET SEQ.), (v) the Comprehensive Environmental
Response Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act (42 U.S.C.
Section 9601 ET SEQ.), and (vi) all applicable national and local
hindrance laws (including, without limitation "hinderwet") or
regulations and the specific terms of hindrance licenses granted
to the Heuga Entities and with all national and local building,
zoning, environmental control or other similar laws or
regulations under specific terms of construction licenses
(including, without limitation, "bouwvergunningen").
"EQUIVALENT AMOUNT" of any currency with respect to any
amount of Dollars at any date shall mean the equivalent in such
currency of such amount of Dollars, calculated on the basis of
the arithmetical mean of the buy and sell spot rates of exchange
of the Multicurrency Agent for such other currency at 11:00 a.m.,
London time, on the date on or as of which such amount is to be
determined.
"ERISA" shall mean the Employee Retirement Income Secu-
rity Act of 1974, as amended and in effect from time to time.
"ERISA AFFILIATE" shall mean, with respect to any Per-
son, each trade or business (whether or not incorporated) which
is a member of a group of which that Person is a member and which
is under common control within the meaning of the regulations
promulgated under Section 414 of the Tax Code.
"ESCROW LETTER" shall mean a letter agreement between
Interface and the Collateral Agent substantially in the form of
EXHIBIT J hereto.
"EURO" and/or "EUR" shall mean the euro referred to in
Council Regulations (EC) No. 1103/97 dated June 17, 1997 passed
by the Council of the European Union, or, if different, the then
lawful currency of the member states of the European Union that
participate in the third stage of Economic and Monetary Union.
"EURO IMPLEMENTATION DATE" shall mean the first date
(currently expected to be January 1, 1999) on which the Euro
becomes the currency of some or all of the member states of the
European Union.
"EUROCURRENCY" means any Agreed Currency.
"EUROCURRENCY ADVANCE" shall mean an Advance made or
outstanding as Multicurrency Syndicated Loans bearing interest
based on the Adjusted LIBO Rate or Adjusted Special LIBO Rate as
provided in Section 4.03(b)(ii).
"EURODOLLAR ADVANCE" shall mean an Advance made or out-
standing in U.S. Dollars as a portion of the Domestic Syndicated
Loans bearing interest based on the Adjusted LIBO Rate as
provided in Section 4.03(a)(iii).
- 19 -<PAGE>
"EUROPE B.V." shall mean Interface Europe 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, its successors and permitted
assigns.
"EUROPE LIMITED" shall mean Interface Europe Limited
(formerly Interface Flooring Systems Limited), a private company
limited by shares organized and existing under the laws of
England and Wales, its successors and permitted assigns.
"EVENT OF DEFAULT" shall have the meaning provided in
Article IX.
"EXCHANGE ACT" shall mean the Securities Exchange Act
of 1934, as amended from time to time, and any successor statute
thereto.
"EXISTING SHAREHOLDER GROUP" shall mean the individuals
listed on SCHEDULE 9.11; PROVIDED that in the case of each
individual referred to in such SCHEDULE 9.11, for purposes of
this definition the reference to such individual shall be deemed
to include the members of such individual's immediate family,
such individual's estate, and any trusts established by such
individual (whether INTER VIVOS or testamentary) for the benefit
of members of such individual's immediate family.
"FASB-52" shall mean Financial Accounting Standards
Board Statement No. 52, as in effect on the date of this Agree-
ment, specifying applicable accounting principles with respect to
translation of foreign currencies.
"FCB ACCOUNT" shall mean, with respect to Advances made
in each Currency other than Dollars under the Multicurrency Loan
Commitment, the account maintained by the Multicurrency Agent for
disbursements to, and payments from, the respective Borrower in
such Currency, as more particularly described on SCHEDULE 3.01.
"FC BANK" shall mean, for each FCB Account, the bank at
which such FCB Account shall be maintained, as more particularly
described on SCHEDULE 3.01.
"FACILITY" or "FACILITIES" shall mean the credit
facilities made available to the Borrowers pursuant to the
Domestic Syndicated Loan Commitments, the Domestic Swing Line
Commitment, the Domestic Bid Rate Facility, the Multicurrency
Syndicated Loan Commitments, the Multicurrency Swing Line
Commitment, or the Multicurrency Bid Rate Facility, as the
context may indicate.
"FEDERAL FUNDS RATE" shall mean for any period, a fluc-
tuating interest rate per annum equal for each day during such
period to the weighted average of the rates on overnight Federal
funds transactions with member banks of the Federal Reserve
System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Domestic Agent from three Federal
funds brokers of recognized standing selected by the Domestic
Agent.
- 20 -<PAGE>
"FNBC CURRENCY CONTRACT" shall mean the Interest Rate
and Currency Exchange Agreement dated as of June 30, 1992,
between Heuga Nederland B.V. (now Scherpenzeel B.V.) and The
First National Bank of Chicago (acting through its London
Branch), together with all exhibits and schedules thereto and all
confirmations of transactions executed thereunder, as amended by
the Amendment to Interest Rate and Currency Exchange Agreement
dated as of January 9, 1995, and as the same have been and
hereafter may be amended, restated or supplemented from time to
time.
"FIXED RATE ADVANCE" shall mean a LIBOR Advance,
Domestic Bid Rate Advance, Multicurrency Bid Rate Advance and, to
the extent quoted to and accepted by a Borrower on the basis of a
fixed rate of interest for a specified Interest Period pursuant
to Section 2.05 or 3.05, a Domestic Transaction Rate Advance or
Multicurrency Transaction Rate Advance.
"FOREIGN PLAN" shall mean any pension, profit sharing,
deferred compensation, or other employee benefit plan, program or
arrangement maintained by any Foreign Subsidiary which, under ap-
plicable local law, is required to be funded through a trust or
other funding vehicle.
"FOREIGN SUBSIDIARY" shall mean each Consolidated Com-
pany that is organized under the laws of a jurisdiction other
than the United States of America or any State thereof.
"FUNDED DEBT" shall mean all Indebtedness for money
borrowed, Indebtedness evidenced or secured by purchase money
Liens, capitalized leases, Synthetic Lease Obligations (other
than those under the Guilford Equipment Lease), 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 such
Indebtedness. The calculation of Funded Debt shall include all
Funded Debt of the Consolidated Companies, PLUS (i) 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, (ii) the aggregate
outstanding "Investment" of the purchasers pursuant to the
Receivables Sale Agreements, (iii) the aggregate outstanding
"Investment" of the purchasers pursuant to the Receivables Backup
Purchase Agreements PLUS (without duplication) (iv) any other
amounts due and owing to the Bank Purchasers pursuant to the
Receivables Backup Purchase Agreements.
- 21 -<PAGE>
"FUNDED DEBT COVERAGE RATIO" shall mean, as of the last
day of any fiscal quarter of Interface, the ratio of (A) Funded
Debt as of such day, to (B) the sum of Consolidated Adjusted
EBITDA for the fiscal quarter then ending and the immediately
preceding three fiscal quarters.
"GAAP" shall mean generally accepted accounting prin-
ciples set forth in the opinions and pronouncements of the Ac-
counting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements
by such other entity as may be approved by a significant segment
of the accounting profession, which are applicable to the circum-
stances as of the date of determination.
"GUARANTORS" shall mean, collectively, (i) Interface,
Interface Interior Fabrics, Inc. (formerly Guilford of Maine,
Inc.), Guilford (Delaware), Inc., Interface Flooring Systems,
Inc., Interface Europe, Inc., Interface Asia-Pacific, Inc.,
Bentley Mills, Inc., Prince Street Technologies, Ltd., Intek,
Inc., Toltec Fabrics, Inc., Interface Architectural Resources,
Inc. (formerly C-Tec, Inc.), Flooring Consultants, Inc.,
Lasher/White Carpet Company, Inc., B. Shehadi & Sons, Inc.,
Guilford of Maine, Inc., Guilford of Maine Finishing Services,
Inc., Guilford of Maine Decorative Fabrics, Inc., Guilford of
Maine Marketing Co., Intek Marketing Co., Interface Holding
Company, Interface Americas Workplace Solutions, Inc. (formerly
Interface Americas Services, Inc.), Interface Americas, Inc.,
Interface Specialty Resources, Inc., Re:Source Americas
Enterprises, Inc., Interface Royalty Company, Interface Licensing
Company, Prince Street Royalty Company, Bentley Royalty Company,
Superior/Reiser Flooring Resources, Inc., Quaker City
International, Inc., Commercial Flooring Systems, Inc., Congress
Flooring Corp., (ii) all other Material Subsidiaries (other than
Interface SPC) that are not Foreign Subsidiaries, and (iii) all
other Subsidiaries of Interface that are or become guarantors of
the Senior Notes or Senior Subordinated Notes, and the respective
successors and permitted assigns of all Persons described in the
foregoing clauses (i) through (iii).
"GUARANTY" shall mean any contractual obligation, con-
tingent or otherwise, of a Person with respect to any
Indebtedness or other obligation or liability of another Person,
including without limitation, any such Indebtedness, obligation
or liability directly or indirectly guaranteed, endorsed, co-made
or discounted or sold with recourse by that Person, or in respect
of which that Person is otherwise directly or indirectly liable,
including contractual obligations (contingent or otherwise)
arising through any agreement to purchase, repurchase, or
otherwise acquire such Indebtedness, obligation or liability or
any security therefor, or any agreement to provide funds for the
payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise),
or to maintain solvency, assets, level of income, or other
financial condition, or to make any payment other than for value
received. The amount of any Guaranty shall be deemed to be an
amount equal to the stated or determinable amount of the primary
obligation in respect of which guaranty is made or, if not so
stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.
- 22 -<PAGE>
"GUARANTY AGREEMENTS" shall mean, collectively, the
Third Amended and Restated Interface Guaranty Agreement and the
Third Amended and Restated Subsidiary Guaranty Agreement executed
by the Guarantors in favor of the Lenders and the Co-Agents,
substantially in the form of EXHIBITS D-1 and D-2, respectively,
as the same may be amended, restated or supplemented from time to
time.
"GUILFORD EQUIPMENT LEASE" shall mean the Master
Equipment Lease Agreement dated as of June 30, 1995, between
Fleet Credit Corporation and Guilford of Maine, Inc., relating to
the leasing of various textile manufacturing equipment in
aggregate amount (acquisition costs) of not more than
$21,000,000, as such agreement, in whole or in part, may from
time to time be amended, renewed, extended, substituted,
refinanced, restructured, replaced, supplemented or otherwise
modified, whether with the same or any other Person(s) as
lessor(s) or lender(s) (including, without limitation, any
successive renewals, extensions, substitutions, refinancings,
restructurings, replacements, supplements or other modifications
of the foregoing).
"HAZARDOUS SUBSTANCES" shall have the meaning assigned
to that term in the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Acts of 1986.
"HEUGA ENTITIES" shall mean Interface Europe B.V. (for-
merly Interface Heuga B.V.) and all Subsidiaries of Interface Eu-
rope B.V.
"IRB COLLATERAL DOCUMENTS" shall mean, collectively,
the mortgages, deeds of trust, deeds to secure debt, assignments
of leases, security agreements, pledge agreements, and other
security and collateral documents securing the obligations of any
L/C Account Parties in respect of Domestic Letters of Credit
issued by the Domestic L/C Issuer for the account of such parties
in support of industrial development revenue bonds.
"INDEBTEDNESS" of any Person shall mean, without dupli-
cation (i) all obligations of such Person which in accordance
with GAAP would be shown on the balance sheet of such Person as a
liability (including, without limitation, obligations for
borrowed money and for the deferred purchase price of property or
services, and obligations evidenced by bonds, debentures, notes
or other similar instruments), (ii) all rental obligations under
leases required to be capitalized under GAAP or under Synthetic
Lease Obligations (other than those under the Guilford Equipment
Lease), (iii) all Guaranties of such Person and all reimbursement
obligations of such Person in respect of letters of credit issued
for its account, (iv) Indebtedness of others secured by any Lien
upon property owned by such Person, whether or not assumed,
(v) obligations or other liabilities under Currency Contracts,
Interest Rate Contracts, or similar agreements or combinations
thereof, and (vi) Redeemable Capital Stock of such Person valued
at the greater of its voluntary or involuntary maximum fixed
repurchase price plus accrued dividends. For purposes hereof,
the "maximum fixed repurchase price" of any Redeemable Capital
Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable
Capital Stock as if such Redeemable Capital Stock were purchased
on any date on which Indebtedness shall be required to be
- 23 -<PAGE>
determined pursuant to this Agreement, and if such price is based
on, or measured by, the fair market value of such Redeemable
Capital Stock, such fair market value shall be determined in good
faith by the board of directors of the issuer of such Redeemable
Capital Stock.
"INDEMNITY AGREEMENT" shall mean the Third Supplemental
Indemnification Agreement executed by Interface in favor of the
Lenders and the Co-Agents, substantially in the form of Exhibit
U, as the same may be amended, restated, or supplemented from
time to time.
"INTERCOMPANY LOAN DOCUMENTS" shall mean, collectively,
the promissory notes and all related loan, subordination, and
other agreements relating in any manner to the Intercompany
Loans.
"INTERCOMPANY LOANS" shall mean, collectively, (i) the
loans more particularly described on SCHEDULE 6.20 and (ii) those
loans or other extensions of credit made by any Consolidated Com-
pany to another Consolidated Company satisfying the terms and
conditions set forth in Section 8.01(h) or as may otherwise be
approved in writing by the Co-Agents; PROVIDED THAT, the advances
made pursuant to the Receivables Subordinated Notes shall not
constitute Intercompany Loans.
"INTEREST COVERAGE RATIO" shall mean the ratio of Con-
solidated EBITA to Consolidated Interest Expense.
"INTEREST PERIOD" shall have the meaning set forth in
Section 4.04.
"INTEREST RATE CONTRACTS" shall mean any forward con-
tracts, futures contracts, interest rate exchange agreements, in-
terest rate cap agreements, interest rate collar agreements, and
other similar agreements and arrangements entered into by any
Consolidated Company designed to protect any Consolidated Company
against fluctuations in interest rates.
"INTERFACE" shall mean Interface, Inc., a Georgia
corporation, its successors and permitted assigns.
"INTERFACE SPC" shall mean Interface Securitization
Corporation, a Delaware corporation, the Consolidated Company
organized as a special purpose corporation (i) to acquire
accounts receivable from other Consolidated Companies pursuant to
the Receivables Transfer Agreements, (ii) to sell such accounts
receivable (or undivided ownership interests therein) to SPARCC
- 24 -<PAGE>
or CIBC pursuant to the Receivables Sale Agreements, and (iii)
under certain circumstances, to sell such accounts receivable
(or undivided ownership interests therein) to the Bank Purchasers
pursuant to the Receivables Backup Purchase Agreements, and such
Consolidated Company's successors and permitted assigns.
"INTERFACE CONTROL DEBT" shall mean, at any time, debt
of Interface for borrowed money in an aggregate principal amount
outstanding at such time in excess of $10,000,000 which is
subject to Change in Control Provisions, excluding debt of
Interface arising under this Agreement or any Guaranty or
Security Document of Interface delivered pursuant to this
Agreement.
"INVESTMENT" shall mean, when used with respect to any
Person, any direct or indirect advance, loan or other extension
of credit (other than the creation of receivables in the
ordinary course of business) or capital contribution by such
Person (by means of transfers of property to others or payments
for property or services for the account or use of others, or
otherwise) to any Person, or any direct or indirect purchase or
other acquisition by such Person of, or of a beneficial interest
in, capital stock, partnership interests, bonds, notes,
debentures or other securities issued by any other Person.
"INVITATION FOR DOMESTIC BID RATE QUOTE" shall mean an
invitation from Interface to each of the Domestic Syndicated
Lenders to submit Domestic Bid Rate Quotes offering to make
Domestic Bid Rate Loans, substantially in the form of EXHIBIT P
hereto and transmitted by the Domestic Agent in accordance with
Section 2.06(c)(2).
"INVITATION FOR MULTICURRENCY BID RATE QUOTE" shall
mean an invitation from or on behalf of a Multicurrency Borrower
to each of the Multicurrency Syndicated Lenders to submit
Multicurrency Bid Rate Quotes offering to make Multicurrency Bid
Rate Loans, substantially in the form of EXHIBIT S hereto and
transmitted by the Multicurrency Agent in accordance with Section
4.06(c)(2).
"L/C ACCOUNT PARTY" shall mean any Consolidated Company
for whose account a Letter of Credit has been issued pursuant to
the Letter of Credit Agreement.
"L/C CASH COLLATERAL ACCOUNT" shall mean the cash col-
lateral account established pursuant to the L/C Cash Collateral
Assignment (and designated thereunder as the L/C Cash Collateral
Account) in favor of the Collateral Agent.
"L/C CASH COLLATERAL ASSIGNMENT" shall mean the Third
Amended and Restated L/C Cash Collateral Assignment Agreement
among those Consolidated Companies that are parties to the Letter
of Credit Agreement and the Collateral Agent, substantially in
the form of EXHIBIT W, as the same may hereafter be further
amended, restated or supplemented from time to time.
- 25 -<PAGE>
"L/C ISSUER" shall mean a Domestic L/C Issuer or a
Multicurrency L/C Issuer, as the case may be.
"L/C OUTSTANDINGS" shall mean, as at any date of deter-
mination with respect to an outstanding Letter of Credit, the sum
of (i) the maximum aggregate amount which at such date of
determination is available to be drawn (assuming conditions for
drawing thereunder have been met) under such Letter of Credit
then outstanding, PLUS (ii) the aggregate amount of all drawings
under such Letter of Credit and honored by the L/C Issuer not
theretofore reimbursed by or on behalf of the L/C Account Party.
"L/C PRO RATA SHARE" shall mean, at any time, for each
Participating Lender in respect of a Letter of Credit, the
applicable percentage designated in the Letter of Credit
Agreement as such Lender's L/C Pro Rata Share in respect of any
Domestic Letter of Credit or Multicurrency Letter of Credit, as
the case may be, in each case as such L/C Pro Rata Share may have
been adjusted pursuant to the terms of the Letter of Credit
Agreement as of the date of issuance of such Letter of Credit.
"L/C SUBCOMMITMENT" shall mean, at any time, the
Domestic L/C Subcommitment or the Multicurrency L/C
Subcommitment, as the case may be.
"LENDER" or "LENDERS" shall mean STBA, FNBC, the other
banks and lending institutions listed on the signature pages
hereof, and each assignee thereof, if any, pursuant to
Section 11.06(c).
"LENDING OFFICE" shall mean for each Lender the office
such Lender may designate in writing from time to time to the
Borrowers and the Co-Agents with respect to each Type of Loan.
"LETTER OF CREDIT" shall mean any Domestic Letter of
Credit or Multicurrency Letter of Credit, as the case may be.
"LETTER OF CREDIT AGREEMENT" shall mean the Third
Amended and Restated Letter of Credit Agreement among Interface,
Interface Interior Fabrics, Inc. (formerly Guilford of Maine,
Inc.), Interface Flooring Systems, Inc., Bentley Mills, Inc.,
Prince Street Technologies, Ltd., Interface Research Corporation,
Interface Architectural Resources, Inc. (formerly C-Tec, Inc.),
Toltec Fabrics, Inc., Intek, Inc., Europe B.V., Europe Limited,
T.F. Firth & Sons, Limited, Camborne Holdings Limited, SunTrust
Bank, Atlanta, as Domestic L/C Issuer, The First National Bank of
Chicago, as Multicurrency L/C Issuer, the Lenders, the Domestic
Agent, the Multicurrency Agent, and the Collateral Agent,
substantially in the form of EXHIBIT V, as the same may hereafter
be further amended, restated or supplemented from time to time.
- 26 -<PAGE>
"LIBOR" shall mean, for any applicable Interest Period:
(i) with respect to Eurodollar Advances under the
Domestic Syndicated Loan Commitments, the offered rate for
deposits in Dollars, for a period comparable to the Interest
Period and in an amount comparable to the Domestic Agent's
portion of such Advances, appearing on Telerate Page 3750 as
of 11:00 A.M. (London, England time) on the day that is two
Business Days prior to the first day of the Interest Period.
If two or more of such rates appear on Telerate Page 3750,
the rate shall be the arithmetic mean of such rates. If the
foregoing rate is unavailable from Telerate Page 3750 for
any reason, then such rate shall be determined by the
Domestic Agent from the Reuters Screen LIBO Page or, if such
rate is also unavailable on such service, then on any other
interest rate reporting service of recognized standing
designated in writing by the Domestic Agent to Interface and
the other Lenders;
(ii) with respect to Eurocurrency Advances under the
Multicurrency Syndicated Loan Commitments, the offered rate
for deposits in the applicable Agreed Currency, for a period
comparable to the Interest Period and in an amount
comparable to the Multicurrency Agent's portion of such
Advances, appearing on Telerate Page 3750 or 3740, as the
case may be, as of 11:00 A.M. (London, England time) on the
day that is two Business Days prior to the first day of the
Interest Period. If the foregoing rate is unavailable from
Telerate for any reason, then such rate shall be determined
by the Multicurrency Agent from Reuters Screen FRBD as of
11:00 A.M. (London, England time) two Business Days prior to
the first day of such Interest Period. If the foregoing
rate is unavailable from both Telerate and from Reuters,
then such rate shall be determined by the Multicurrency
Agent from any other interest rate reporting service of
recognized standing designated in writing by the
Multicurrency Agent to Interface and the other Lenders;
in any such case rounded, if necessary, to the next higher 1/16
of 1.0%, if the rate is not such a multiple.
"LIBOR ADVANCE" shall mean (i) a Eurodollar Advance,
or (ii) a Eurocurrency Advance.
"LIEN" shall mean any mortgage, pledge, security inter-
est, lien, charge, hypothecation, assignment, deposit
arrangement, title retention, preferential right, trust or other
arrangement having the practical effect of the foregoing and
shall include the interest of a vendor or lessor under any
conditional sale agreement, capitalized lease or other title
retention agreement.
"LOANS" shall mean, collectively, the Domestic
Syndicated Loans, the Domestic Swing Line Loans, the Domestic Bid
Rate Loans, the Multicurrency Syndicated Loans, the
Multicurrency Swing Line Loans, and the Multicurrency Bid Rate
Loans.
- 27 -<PAGE>
"MARCH 1998 EQUITY ISSUANCE" shall mean the issuance by
Interface in March 1998 of 1,725,000 shares of its Class A common
stock pursuant to which Interface received net cash proceeds of
not less than $66,779,000.
"MARGIN REGULATIONS" shall mean Regulation T,
Regulation U and Regulation X of the Board of Governors of the
Federal Reserve System, as the same may be in effect from time to
time.
"MATERIAL COMPANY" shall mean (i) Interface, (ii) each
Material Subsidiary, and (iii) each corporation, joint venture,
partnership, limited liability company, association, or other
business entity in which one or more of the Consolidated
Companies is a shareholder, partner, party, or member, and as to
which such Consolidated Company or Companies has become liable,
either by agreement, by operation of law, or otherwise, for
obligations and liabilities thereof in an aggregate amount
greater than $10,000,000.
"MATERIAL SUBSIDIARY" shall mean (i) each Credit Party
other than Interface, and (ii) each other Subsidiary of
Interface, now existing or hereafter established or acquired,
that at any time prior to the Maturity Date has or acquires total
assets in excess of $10,000,000, or that holds any assets
material to the operations or business of another Material
Subsidiary.
"MATERIALLY ADVERSE EFFECT" shall mean any materially
adverse change in (i) the business, results of operations, finan-
cial condition, assets or prospects of the Consolidated
Companies, taken as a whole, or (ii) the ability of Interface to
perform its respective obligations under the Credit Documents.
"MATURITY DATE" shall mean the earlier of (i) June 30,
2003, and (ii) the date on which all amounts outstanding under
this Agreement have been declared or have automatically become
due and payable pursuant to the provisions of Article IX.
"MULTICURRENCY AGENT" shall mean FNBC, acting in the
manner and to the extent described in Article X, and any succes-
sor multicurrency agent appointed from time to time pursuant to
Article X hereof.
"MULTICURRENCY BID RATE" shall mean the rate of
interest specified by a Multicurrency Syndicated Lender in its
Multicurrency Bid Rate Quote as provided in Section 3.06(c)(3).
- 28 -
<PAGE>
"MULTICURRENCY BID RATE ACCEPTANCE NOTICE" shall mean
the notice given by or on behalf of a Multicurrency Borrower to
the Multicurrency Agent accepting one or more Multicurrency Bid
Rate Quotes as provided in Section 3.06(c)(5).
"MULTICURRENCY BID RATE ADVANCE" shall mean a Borrowing
in U.S. Dollars pursuant to Section 3.06 consisting of the
aggregate amount of one or more Multicurrency Bid Rate Loans made
by one or more of the Multicurrency Syndicated Lenders to the
same Borrower at the same time, in the same Agreed Currency, on
the same interest rate basis, and for the same Interest Period.
"MULTICURRENCY BID RATE BORROWING" shall mean a
Borrowing in U.S. Dollars consisting or to consist of a
Multicurrency Bid Rate Advance.
"MULTICURRENCY BID RATE FACILITY" shall mean the credit
facility being made available by the Multicurrency Syndicated
Lenders to the Multicurrency Borrowers as described in Section
3.06(a).
"MULTICURRENCY BID RATE LENDER" shall mean a
Multicurrency Syndicated Lender making one or more Multicurrency
Bid Rate Loans pursuant to Section 3.06.
"MULTICURRENCY BID RATE LOANS" shall mean,
collectively, the loans made to the Multicurrency Borrowers by
the Multicurrency Bid Rate Lenders pursuant to Section 3.06.
"MULTICURRENCY BID RATE NOTE" shall mean the promissory
notes evidencing the Multicurrency Bid Rate Loans in the form
attached hereto as EXHIBIT N and duly completed in accordance
with the terms hereof.
"MULTICURRENCY BID RATE QUOTE" shall mean an offer or
offers by a Multicurrency Syndicated Lender to make one or more
Multicurrency Bid Rate Loans to a Multicurrency Borrower
substantially in the form of EXHIBIT T hereto completed and
delivered by such Multicurrency Syndicated Lender to the
Multicurrency Agent in accordance with Section 3.06(c)(3).
"MULTICURRENCY BID RATE QUOTE REQUEST" shall mean a
request transmitted by or on behalf of a Multicurrency Borrower
to the Multicurrency Agent for offers from the Multicurrency
Syndicated Lenders to make Multicurrency Bid Rate Loans
substantially in the form of EXHIBIT R hereto completed and
delivered to the Domestic Agent in accordance with Section
3.06(c)(1).
"MULTICURRENCY BORROWERS" shall mean, collectively,
Interface, Europe B.V., Europe Limited, and all Additional
Multicurrency Borrowers.
"MULTICURRENCY L/C EXPOSURE" shall mean, for each
Multicurrency Lender, and with respect to all Multicurrency
Letters of Credit as to which it was a Participating Lender, the
sum, for all such Multicurrency Letters of Credit, of the product
of (i) the L/C Outstandings for each Multicurrency Letter of
Credit, MULTIPLIED BY (ii) such Multicurrency Lender's applicable
L/C Pro Rata Share for such Multicurrency Letter of Credit.
- 29 -<PAGE>
"MULTICURRENCY L/C ISSUER" shall mean The First
National Bank of Chicago, a national banking association, any
affiliate of The First National Bank of Chicago issuing a
Multicurrency Letter of Credit at its request, and each other
issuer of a Multicurrency Letter of Credit pursuant to the Letter
of Credit Agreement, and their respective successors and assigns.
"MULTICURRENCY L/C SUBCOMMITMENT" shall mean, at any
time for any Multicurrency Lender, the amount of the
Multicurrency Letter of Credit Subcommitment set forth opposite
such Multicurrency Lender's name on the signature page of the
Letter of Credit Agreement, as the same may be adjusted from time
to time pursuant to the terms of the Letter of Credit Agreement.
As of the date of this Agreement, the aggregate amount of the
Multicurrency L/C Subcommitments for all Multicurrency Syndicated
Lenders is $50,000,000.
"MULTICURRENCY LETTER OF CREDIT" shall mean any letter
of credit issued by the Multicurrency L/C Issuer for the account
of an L/C Account Party pursuant to the Letter of Credit
Agreement, as the same may be amended, extended or re-issued from
time to time.
"MULTICURRENCY REVOLVING LOANS" shall mean,
collectively, all Multicurrency Syndicated Loans, Multicurrency
Swing Line Loans, and Multicurrency Bid Rate Loans.
"MULTICURRENCY SWING LINE ADVANCE" shall mean a
Borrowing in U.S. Dollars pursuant to Section 3.05 consisting of
a Multicurrency Swing Line Loan (which may be made either as a
Base Rate Advance or as a Multicurrency Transaction Rate Advance)
made by the Multicurrency Swing Line Lender to a Multicurrency
Borrower at the same time, on the same interest rate basis and,
if made as a Fixed Rate Advance, for the same Interest Period.
"MULTICURRENCY SWING LINE BORROWING" shall mean a
Borrowing in U.S. Dollars consisting or to consist of a
Multicurrency Swing Line Advance.
"MULTICURRENCY SWING LINE BORROWING NOTICE" shall mean
the notice given by or on behalf of a Multicurrency Borrower to
the Multicurrency Agent requesting a Multicurrency Swing Line
Advance as provided in Section 3.05(c).
"MULTICURRENCY SWING LINE COMMITMENT" shall mean the
commitment of the Multicurrency Swing Line Lender to make
Multicurrency Swing Line Loans in an aggregate principal amount
at any time outstanding not to exceed $5,000,000.
"MULTICURRENCY SWING LINE LENDER" shall mean FNBC or
any subsequent Multicurrency Syndicated Lender extending to the
Multicurrency Borrowers the Multicurrency Swing Line Commitment.
"MULTICURRENCY SWING LINE LOANS" shall mean,
collectively, the loans made to the Multicurrency Borrowers by
the Multicurrency Swing Line Lender pursuant to Section 3.05.
- 30 -<PAGE>
"MULTICURRENCY SWING LINE NOTES" shall mean the
promissory notes evidencing the Multicurrency Swing Line Loans
substantially in the form of EXHIBITS M-1, M-2, and M-3 and duly
completed in accordance with the terms hereof.
"MULTICURRENCY SYNDICATED ADVANCE" shall mean a
Borrowing pursuant to Section 3.02 consisting of the aggregate
amount of Multicurrency Syndicated Loans made by the
Multicurrency Syndicated Lenders to a Multicurrency Borrower at
the same time, on the same interest rate basis and, if made as a
Fixed Rate Advance, for the same Interest Period.
"MULTICURRENCY SYNDICATED BORROWING" shall mean a
Borrowing consisting or to consist of a Multicurrency Syndicated
Advance.
"MULTICURRENCY SYNDICATED BORROWING NOTICE" shall mean
the notice given by or on behalf of a Multicurrency Borrower to
the Multicurrency Agent requesting one or more Multicurrency
Syndicated Advances as provided in Section 3.02(c).
"MULTICURRENCY SYNDICATED FACILITY" shall mean the
credit facility made available by the Multicurrency Syndicated
Lenders to the Multicurrency Borrowers as described in Section
3.02(a).
"MULTICURRENCY SYNDICATED LENDERS" shall mean,
collectively, the Lenders extending the Multicurrency Syndicated
Loan Commitments to the Multicurrency Borrowers pursuant to
Section 3.02(a).
"MULTICURRENCY SYNDICATED LOAN COMMITMENTS" shall mean,
at any time for any Multicurrency Syndicated Lender, the amount
of such commitment set forth opposite such Multicurrency
Syndicated Lender's name on the signature pages hereof, as the
same may be increased or decreased from time to time as a result
of any reduction thereof pursuant to Section 3.03, any assignment
thereof pursuant to Section 11.06, or any amendment thereof
pursuant to Section 11.02. As of the date of this Agreement, the
aggregate amount of the Multicurrency Syndicated Loan Commitments
for all Multicurrency Syndicated Lenders is $80,000,000.
"MULTICURRENCY SYNDICATED LOANS" shall mean,
collectively, the loans made to a Multicurrency Borrower by the
Multicurrency Syndicated Lenders pursuant to Section 3.02.
"MULTICURRENCY SYNDICATED NOTES" shall mean,
collectively, the promissory notes evidencing the Multicurrency
Syndicated Loans in the forms attached hereto as EXHIBITS C-1, C-
2 and C-3, duly completed in accordance with the terms hereof.
- 31 -<PAGE>
"MULTICURRENCY TRANSACTION RATE" shall mean the rate of
interest specified by the Multicurrency Swing Line Lender to a
Multicurrency Borrower, or to Interface on behalf of a
- 30 -
<PAGE>
Multicurrency Borrower, as the case may be, as being applicable
to a Multicurrency Swing Line Loan requested by or on behalf of a
Multicurrency Borrower pursuant to Section 4.05(c).
"MULTICURRENCY TRANSACTION RATE ADVANCE" shall mean an
Advance made or outstanding as a Multicurrency Swing Line Loan
bearing interest based on the Multicurrency Transaction Rate as
provided in Section 3.03(b)(iii).
"MULTICURRENCY TRANSACTION RATE QUOTE" shall mean an
offer by the Multicurrency Swing Line Lender to make a
Multicurrency Swing Line Loan to Interface, Europe B.V. or Europe
Limited at the Multicurrency Transaction Rate specified therein
for the Interest Period to be applicable to the Multicurrency
Swing Line Loan as specified therein, pursuant to Section
3.05(c).
"MULTIEMPLOYER PLAN" shall have the meaning set forth
in Section 4001(a)(3) of ERISA.
"NATIONAL CURRENCY UNIT" shall mean the unit of
currency (other than a Euro unit) of each member state of the
European Union that participates in the third stage of Economic
and Monetary Union.
"NET PROCEEDS" shall mean, with respect to any Asset
Sale, all cash, including (i) cash receivables (when received) by
way of deferred payment pursuant to a promissory note, a receiv-
able or otherwise (other than interest payable thereon), and
(ii) with respect to Asset Sales resulting from the loss, damage,
destruction or taking of property, the proceeds of insurance
settlements and condemnation awards (other than the portion of
the proceeds of such settlements and such awards that are used to
repair, replace, improve or restore the item of property in
respect of which such settlement or award was paid provided that
the recipient of such proceeds or another Consolidated Company
enters into a binding contractual obligation to effect such
repair, replacement, improvement or restoration within eighteen
(18) months of such loss, damage or destruction and completes
such repair, replacement, improvement or restoration within
thirty-six (36) months of such loss, damage, destruction or
taking) as and when received in cash, in either case, received by
any Consolidated Company as a result of or in connection with
such transaction, net of reasonable sale expenses, fees and
commissions incurred, and taxes paid or expected to be payable
within the succeeding 36-month period in connection therewith,
and net of any payment required to be made with respect to the
outstanding principal amount of, premium or penalty, if any, and
interest on any Indebtedness (other than the Loans) secured by a
Lien (to the extent permitted by Section 8.02) upon the asset
sold in such Asset Sale.
"1997 TERM LOAN AGREEMENT" shall mean the Term Loan
Agreement dated as of June 25, 1997, among Interface, SunTrust
Bank, Atlanta, as Administrative Agent and Collateral Agent,
FNBC, as Syndication Agent, and the 1997 Term Lenders, as amended
- 32 -<PAGE>
by the First Amendment to Term Loan Agreement dated as of
December 2, 1997, pursuant to which the 1997 Term Loans were made
to Interface.
"1997 TERM LOANS" shall mean, collectively, the term
loans in an aggregate principal amount of $95,000,000 made to
Interface by the 1997 Term Lenders pursuant to the terms of the
1997 Term Loan Agreement.
"NOTES" shall mean, collectively, the Domestic
Syndicated Notes, the Domestic Swing Line Note, the Domestic Bid
Rate Notes, the Multicurrency Syndicated Notes, the Multicurrency
Swing Line Notes, and the Multicurrency Bid Rate Notes.
"NOTICE OF DOMESTIC CONVERSION/CONTINUATION" shall mean
the notice given by Interface to the Domestic Agent in respect of
the conversion or continuation of an outstanding Domestic
Syndicated Borrowing as provided in Section 2.02(e).
"NOTICE OF MULTICURRENCY CONVERSION/CONTINUATION" shall
mean a notice given by or on behalf of a Multicurrency Borrower
to the Multicurrency Agent in respect of the conversion or
continuation of an outstanding Multicurrency Syndicated Borrowing
pursuant to Section 3.02(e).
"OBLIGATIONS" shall mean all amounts owing to any
Co-Agent, Lender, L/C Issuer, or the Collateral Agent pursuant to
the terms of this Agreement, the Letter of Credit Agreement, or
any other Credit Document, including without limitation, all
Loans (including all principal and interest payments due
thereunder), fees, expenses, indemnification and reimbursement
payments, indebtedness, liabilities, and obligations of the
Credit Parties, direct or indirect, absolute or contingent,
liquidated or unliquidated, now existing or hereafter arising,
together with all renewals, extensions, modifications or
refinancings thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corpora-
tion, or any successor thereto.
"PARTICIPATING LENDER" shall have the meaning specified
for such term in the Letter of Credit Agreement.
"PAYMENT OFFICE" shall mean (i) with respect to
payments of principal and interest relating to Multicurrency
Syndicated Loans outstanding in Agreed Currencies other than
Dollars, the respective FCB Accounts designated for such Agreed
Currencies, (ii) with respect to payments of all other principal,
interest, fees or other amounts relating to the Multicurrency
Syndicated Loans, Multicurrency Swing Line Loans, Multicurrency
Bid Rate Loans, and Multicurrency Letters of Credit, the office
specified as the "Payment Office" for the Multicurrency Agent on
the signature page of the Multicurrency Agent, or such other
- 33 -<PAGE>
location as to which the Multicurrency Agent shall have given
written notice to the Borrowers and its Co-Agent, and (iii) with
respect to payments of principal, interest, fees or other amounts
relating to the Domestic Revolving Loans, Domestic Bid Rate
Loans, Domestic Letters of Credit, and all other Obligations not
described in the preceding clauses (i) and (ii), the office
specified as the "Payment Office" for the Domestic Agent on the
signature page of the Domestic Agent, or such other location as
to which the Domestic Agent shall have given written notice to
Interface and its Co-Agent.
"PERMITTED LIENS" shall mean those Liens expressly per-
mitted by Section 8.02.
"PERSON" shall mean any individual, partnership, firm,
corporation, association, joint venture, limited liability
company, trust or other entity, or any government or political
subdivision or agency, department or instrumentality thereof.
"PLAN" shall mean any "employee benefit plan" (as de-
fined in Section 3(3) of ERISA), including, but not limited to,
any defined benefit pension plan, profit sharing plan, money pur-
chase pension plan, savings or thrift plan, stock bonus plan, em-
ployee stock ownership plan, Multiemployer Plan, or any plan,
fund, program, arrangement or practice providing for medical (in-
cluding post-retirement medical), hospitalization, accident,
sickness, disability, or life insurance benefits, but shall
exclude any Foreign Plan.
"PRINCE STREET" shall mean Prince Street Technologies,
Ltd., a Georgia corporation.
"PRO RATA SHARE" shall mean, with respect to each of
the Domestic Syndicated Loan Commitments (including, without
limitation, the Domestic L/C Subcommitments) and Multicurrency
Syndicated Loan Commitments (including, without limitation, the
Multicurrency L/C Subcommitments) of each Domestic Syndicated
Lender or Multicurrency Syndicated Lender, as the case may be,
and each Loan to be made by and each payment (including, without
limitation, any payment of principal, Letter of Credit
reimbursement obligation, interest or fees) to be made to each
such Lender, the percentage designated as such Lender's Pro Rata
Share of such Commitments, such Loans or such payments, as
applicable, set forth under the name of such Lender on the
respective signature page for such Lender, in each case as such
Pro Rata Share may change from time to time as a result of
assignments, amendments, or reductions made pursuant to this
Agreement.
"READICUT" shall mean Readicut International plc.
"READICUT ACQUISITION" shall mean the purchase by
Europe Limited and Europe B.V. of all issued and outstanding
shares of T.F. Firth & Sons Ltd., Vebe Floorcoverings B.V., and
Tayrich Limited, from Readicut.
"READICUT DEBT" shall mean the Indebtedness in the
approximate amount of U.S. $17,600,000 representing the deferred
portion of the purchase price payable by Interface and/or its
Subsidiaries in the Readicut Acquisition, such Indebtedness being
due and payable on the first anniversary of the closing of the
Readicut Acquisition.
- 34 -
<PAGE>
"READICUT DIVESTITURES" shall mean, collectively, the
sales or other disposition by Interface and/or its Subsidiaries
of any assets (including, without limitation, shares of
Subsidiaries) acquired as part of the Readicut Acquisition;
PROVIDED, HOWEVER, that the term Readicut Divestitures shall not
include (i) any sales or other dispositions of any assets (other
than the shares or assets of Network Flooring Ltd.) or any shares
of T.F. Firth & Sons Ltd. or Firth Carpets Ltd., (ii) any sales
or other dispositions of any of the assets or shares of Vebe
Floorcoverings B.V. or Network Flooring Ltd. sold or disposed of
after the first anniversary of the closing of the Readicut
Acquisition, or (iii) any sales or other dispositions of any of
the assets or shares of Tayrich Limited or Joseph, Hamilton &
Seaton Ltd. sold or disposed of later than eighteen months after
the closing of the Readicut Acquisition.
"RECEIVABLES BACKUP PURCHASE AGREEMENTS" shall mean the
agreements among Interface SPC, as seller, Interface, as
collection agent, and the Bank Purchasers, as purchasers,
providing for the sale by Interface SPC, and the purchase by the
Bank Purchasers, of accounts receivable (or undivided ownership
interests therein) originated by certain of the Consolidated
Companies, as in effect on December 31, 1996, and as the same may
be amended, restated or supplemented from time to time.
"RECEIVABLES SALE AGREEMENTS" shall mean the agreements
among Interface SPC, as seller, Interface, as collection agent,
SPARCC, as purchaser, and CIBC, as servicing agent, providing for
the sale by Interface SPC, and the purchase by SPARCC, of
accounts receivable (or undivided ownership interests therein)
originated by certain of the Consolidated Companies.
"RECEIVABLES SUBORDINATED NOTES" shall mean any and all
subordinated notes executed by Interface SPC from time to time in
favor of Interface and evidencing advances made from time to time
by Interface to Interface SPC in connection with, and pursuant to
the terms of, the Accounts Receivable Facilities, PROVIDED THAT,
the aggregate outstanding principal balance of such notes shall
not at any time exceed $40,000,000.
"RECEIVABLES TRANSFER AGREEMENTS" shall mean, col-
lectively, the agreement(s) between certain of the Consolidated
Companies, as originators, and Interface SPC, as purchaser,
providing for the sale by such Consolidated Companies, and the
purchase by Interface SPC, of accounts receivable originated by
such Consolidated Companies.
"REDEEMABLE CAPITAL STOCK" shall mean any shares of any
class or series of capital stock that, either by the terms
thereof, by the terms of any security into which it is
convertible or exchangeable, or by contract or otherwise, is or
upon the happening of an event or passage of time would be,
required to be redeemed prior to the Maturity Date or is
redeemable at the option of the holder thereof at any time prior
to the Maturity Date, or is convertible into or exchangeable for
debt securities at any time prior to the Maturity Date.
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<PAGE>
"REGULATION D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System, as the same may be in
effect from time to time.
"REPLACEMENT ASSETS" shall mean properties and assets
that replace the properties and assets that were the subject of
an Asset Sale or properties and assets that will be used in the
business of Interface and the Consolidated Companies as existing
on November 1, 1995 or in businesses reasonably related thereto.
"REQUIRED LENDERS" shall mean at any time Lenders hold-
ing at least 66-2/3% of the then aggregate amount of the Domestic
Syndicated Loan Commitments and Multicurrency Syndicated Loan
Commitments; PROVIDED, HOWEVER, that in connection with any
proposed amendment or waiver of any of the following provisions,
"Required Lenders" shall mean both the Lenders holding at least
66-2/3% of the then aggregate amount of the Domestic Syndicated
Loan Commitments and Multicurrency Syndicated Loan Commitments,
and Multicurrency Syndicated Lenders holding at least 66-2/3% of
the then aggregate amount of the Multicurrency Syndicated Loan
Commitments: (i) Article III, (ii) Section 4.03(b),
Section 4.07(b)(v) and (viii), and Section 4.13, or (iii) the
definitions of the terms Payment Office, FCB Account or FC Bank.
"REQUIRED MULTICURRENCY SYNDICATED LENDERS" shall have
the meaning provided in Section 11.02.
"REQUIREMENT OF LAW" for any person shall mean the ar-
ticles or certificate of incorporation and bylaws or other orga-
nizational or governing documents of such Person, and any law,
treaty, rule or regulation, or determination of an arbitrator or
a court or other governmental authority, in each case applicable
to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"REUTERS SCREEN" shall mean, when used in connection
with any designated page and LIBOR, the display page so
designated on the Reuter Monitor Money Rates Service (or such
other page as may replace that page on that service for the
purpose of displaying rates comparable to LIBOR).
"SPARCC" shall mean Special Purpose Accounts Receivable
Cooperative Corporation, its successors and permitted assigns.
"SECURITY DOCUMENTS" shall mean, collectively, the
Guaranty Agreements, the L/C Cash Collateral Assignment, the IRB
Collateral Documents, the Indemnity Agreement, and each other
guaranty agreement, mortgage, deed of trust, security agreement,
pledge agreement, or other security or collateral document
guaranteeing or securing the Obligations, as the same may be
amended, restated, and supplemented from time to time.
- 36 -<PAGE>
"SENIOR NOTES" shall mean, collectively, (i) the
unsecured Senior Notes due 2008 issued by Interface, and
guaranteed by certain Subsidiaries of Interface, in the aggregate
principal amount of $150,000,000, as more particularly described
in the Senior Notes Indenture, and any unsecured senior notes
issued by Interface, and guaranteed by such Subsidiaries of
Interface, in an aggregate principal amount not to exceed
$150,000,000 representing a refinancing or replacement of such
Senior Notes due 2008, having a maturity not earlier than that of
such Senior Notes, and financial and other covenants not less
favorable to Interface in any material respect than those
covenants in effect with respect to such Senior Notes, or
otherwise on terms and conditions approved by the Co-Agents and
the Required Lenders, and (ii) unsecured senior notes having a
maturity not earlier than the maturity date of the Senior
Subordinated Notes due 2005, in an aggregate principal amount not
to exceed $125,000,000 representing a refinancing or replacement
of such Senior Subordinated Notes having financial and other
covenants not less favorable to Interface in any material respect
than those covenants in effect with respect to such Senior Notes,
or otherwise on terms and conditions approved by the Co-Agents
and the Required Lenders.
"SENIOR NOTES INDENTURE" shall mean the Indenture dated
as of April 3, 1998, by and among Interface, as issuer, certain
Subsidiaries of Interface, as guarantors, and First Union
National Bank, as Trustee, as the same may be amended, restated
and supplemented from time to time.
"SENIOR SUBORDINATED NOTES" shall mean, collectively,
the unsecured Senior Subordinated Notes due 2005 issued by
Interface, and guaranteed by certain Subsidiaries of Interface,
in the aggregate principal amount of $125,000,000 as more
particularly described in the Senior Subordinated Notes
Indenture, together with any and all "Exchange Notes" (as defined
in the Senior Subordinated Notes Indenture) issued to holders of
such Senior Subordinated Notes in exchange therefor, and any
Subordinated Debt in an aggregate principal amount not to exceed
$125,000,000 representing a refinancing or replacement thereof
having a maturity not earlier than that of such Senior
Subordinated Notes, an interest rate not in excess of the
interest rate in effect with respect to such Senior Subordinated
Notes, subordination terms not less favorable in any material
respect to holders of senior indebtedness than those
subordination terms in effect with respect to the Senior
Subordinated Notes, and financial and other covenants not less
favorable to Interface in any material respect than those
covenants in effect with respect to such Senior Subordinated
Notes, or otherwise on terms and conditions approved by the Co-
Agents and the Required Lenders.
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"SENIOR SUBORDINATED NOTES GUARANTOR" shall mean each
Subsidiary of Interface that is a "Guarantor" with respect to the
Senior Subordinated Notes as provided in the Senior Subordinated
Notes Indenture.
"SENIOR SUBORDINATED NOTES INDENTURE" shall mean the
Indenture dated as of November 15, 1995, by and among Interface,
Bentley Mills, Inc., Guilford (Delaware), Inc., Guilford of
Maine, Inc., Interface Asia-Pacific, Inc., Interface Europe,
Inc., Interface Flooring Systems, Inc., Interface Research
Corporation, Pandel, Inc., Prince Street Technologies, Ltd.,
Rockland React-Rite, Inc., and First Union National Bank of
Georgia, pursuant to which Interface issued its Senior
Subordinated Notes, as the same has been or may hereafter be
amended and supplemented from time to time, and any subsequent
Indenture entered into by Interface in respect of Subordinated
Debt constituting a refinancing or replacement of such Senior
Subordinated Notes as provided in the definition of the term
"Senior Subordinated Notes" herein.
"SHAREHOLDERS' EQUITY" shall mean, with respect to any
Person as at any date of determination, shareholders' equity of
such Person determined on a consolidated basis in conformity with
GAAP.
"SIGNIFICANT SUBSIDIARY" shall have the same meaning as
in Rule 1.02(v) of Regulation S-X under the Securities Act of
1933, as amended.
"SPECIAL LIBOR" shall mean the rate of interest per an-
num as determined by the Multicurrency Agent (rounded, if neces-
sary, to the next higher multiple of 1/16%) at which overnight or
weekend deposits of the appropriate Agreed Currency (or if such
amount remains unpaid for more than three Business Days, then for
such other period of time not longer than three months as the
Multicurrency Agent may select in its absolute discretion) for
delivery in immediately available and transferable funds would be
offered by the Multicurrency Agent to major banks in the London
interbank market upon request of such major banks for the ap-
plicable period as determined above and in an amount comparable
to the Multicurrency Agent's portion of the unpaid Obligations
bearing interest at such rate (or, if the Multicurrency Agent is
not placing such deposits in such Agreed Currency in the London
interbank market, then the Multicurrency Agent's cost of funds in
such Agreed Currency for such period).
"SUBORDINATED DEBT" shall mean (i) Indebtedness
outstanding pursuant to the Senior Subordinated Notes, and (ii)
other Indebtedness of Interface subordinated to all obligations
of Interface or any other Credit Party arising under this
Agreement, the Notes, and the Guaranty Agreements on terms and
conditions satisfactory in all respects to the Co-Agents and the
Required Lenders, including without limitation, with respect to
interest rates, payment terms, maturities, amortization
schedules, covenants, defaults, remedies, and subordination
provisions, as evidenced by the written approval of the Co-Agents
and the Required Lenders.
- 38 -<PAGE>
"SUBSIDIARY" shall mean, with respect to any Person,
any corporation or other entity (including, without limitation,
partnerships, joint ventures, and associations) regardless of its
jurisdiction of organization or formation, at least a majority of
the total combined voting power of all classes of voting stock or
other ownership interests of which shall, at the time as of which
any determination is being made, be owned by such Person, either
directly or indirectly through one or more other Subsidiaries.
"SYNTHETIC LEASE OBLIGATIONS" shall mean, collectively,
all payment obligations of Interface or any of the Consolidated
Companies pursuant to so-called "synthetic" leases not treated as
capital leases under GAAP, but which are treated as financings
under the Tax Code.
"TAX CODE" shall mean the Internal Revenue Code of
1986, as amended and in effect from time to time.
"TAXES" shall mean any present or future taxes, levies,
imposts, duties, fees, assessments, deductions, withholdings or
other charges of whatever nature, including without limitation,
income, receipts, excise, property, sales, transfer, license,
payroll, withholding, social security and franchise taxes now or
hereafter imposed or levied by the United States, or any state,
local or foreign government or by any department, agency or other
political subdivision or taxing authority thereof or therein and
all interest, penalties, additions to tax and similar liabilities
with respect thereto.
"TELERATE" shall mean, when used in connection with any
designated page and LIBOR, the display page so designated on the
Dow Jones Telerate Service (or such other page as may replace
that page on that service for the purpose of displaying rates
comparable to LIBOR).
"TOTAL COMMITMENT" shall mean, for any Lender at any
time, the sum of such Lender's Domestic Syndicated Loan
Commitment and Multicurrency Syndicated Loan Commitment and, in
the case of the Domestic Swing Line Lender or Multicurrency
Swing Line Lender, as the case may be, its Domestic Swing Line
Commitment or Multicurrency Swing Line Commitment, as applicable;
and "TOTAL COMMITMENTS" shall mean, for all Lenders at any time,
the sum of the Total Commitment of all Lenders.
"TYPE" of Borrowing shall mean a Borrowing made as a
Base Rate Advance, LIBOR Advance, Domestic Bid Rate Advance,
Domestic Transaction Rate Advance, Multicurrency Bid Rate
Advance, or Multicurrency Transaction Rate Advance, as the case
may be.
"YEAR 2000 ISSUES" shall mean the actual and
anticipated costs, claims, losses, and liabilities associated
with the inability of certain computer applications to handle
effectively data that includes dates on and after January 1,
2000, as such inability in respect of Interface and its
Subsidiaries and in respect of their respective material
customers, suppliers and vendors affects the business,
operations, and financial condition of Interface and its
Subsidiaries.
- 39 -<PAGE>
Section 1.02. ACCOUNTING TERMS AND DETERMINATION.
Unless otherwise defined or specified herein, all accounting
terms shall be construed herein, all accounting determinations
hereunder shall be made, all financial statements required to be
delivered hereunder shall be prepared, and all financial records
shall be maintained in accordance with, GAAP, except that
financial records of Foreign Subsidiaries may be maintained in
accordance with generally accepted accounting principles in
effect from time to time in the jurisdiction of organization of
such Foreign Subsidiary; PROVIDED, HOWEVER, that compliance with
the financial covenants and calculations set forth in
Section 7.09, Article VIII, and elsewhere herein, and in the
definitions used in such covenants and calculations, shall be
calculated, made and applied in accordance with GAAP and such
generally accepted accounting principles in such foreign
jurisdictions, as the case may be, as in effect on the date of
this Agreement applied on a basis consistent with the preparation
of the financial statements referred to in Section 6.14 unless
and until the parties enter into an agreement with respect
thereto in accordance with Section 11.13.
Section 1.03. OTHER DEFINITIONAL TERMS. The words
"hereof", "herein" and "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and
Article, Section, Schedule, Exhibit and like references are to
this Agreement unless otherwise specified.
Section 1.04. EXHIBITS AND SCHEDULES. All
Exhibits and Schedules attached hereto are by reference made a
part hereof.
ARTICLE II.
DOMESTIC REVOLVING LOANS
Section 2.01. DESCRIPTION OF DOMESTIC REVOLVING CREDIT
FACILITIES. Subject to and upon the terms and conditions herein
set forth (i) the Domestic Syndicated Lenders hereby establish in
favor of Interface a revolving credit facility pursuant to which
such Domestic Syndicated Lenders agree to make Domestic
Syndicated Loans to Interface in accordance with Section 2.02,
(ii) the Domestic Swing Line Lender hereby establishes in favor
of Interface a swing line credit facility pursuant to which the
Domestic Swing Line Lender agrees to make Domestic Swing Line
Loans to Interface in accordance with Section 2.05, and (iii)
each Domestic Syndicated Lender may, in its sole discretion,
submit bids to make Domestic Bid Rate Loans to Interface in
accordance with Section 2.06; PROVIDED, HOWEVER, that in no event
may the aggregate principal amount of all outstanding Domestic
Revolving Loans and the Aggregate Domestic L/C Outstandings
exceed at any time the total Domestic Syndicated Loan Commitments
from time to time in effect.
- 40 -<PAGE>
Section 2.02. DOMESTIC SYNDICATED LOANS.
(a) Subject to and upon the terms and conditions
herein set forth (including the limitation set forth in Section
2.01), each Domestic Syndicated Lender severally agrees to make
to Interface, from time to time prior to the Maturity Date,
Domestic Syndicated Loans in an aggregate principal amount
outstanding at any time not to exceed an amount equal to (i) such
Domestic Syndicated Lender's Domestic Syndicated Loan Commitment,
MINUS (ii) such Domestic Syndicated Lender's Domestic L/C
Exposure. Interface shall be entitled to repay and reborrow
Domestic Syndicated Loans in accordance with the provisions, and
subject to the limitations, set forth herein (including the
limitation set forth in Section 2.01).
(b) Each Domestic Syndicated Loan shall, at the option
of Interface, be made or continued as, or converted into, part of
one or more Borrowings that shall consist entirely of Base Rate
Advances or Eurodollar Advances. The aggregate principal amount
of each Borrowing of Domestic Syndicated Loans shall be not less
than $1,000,000 or a greater integral multiple of $100,000,
PROVIDED that each Borrowing of Domestic Syndicated Loans
comprised of Base Rate Advances shall be not less than $250,000
or a greater integral multiple of $1000, except to the extent
otherwise provided with respect to Domestic Syndicated Loans made
pursuant to Section 2.02(c)(2). At no time shall the total
number of Borrowings outstanding under this Section 2.02 and
Section 2.06 exceed eight; PROVIDED THAT, for purposes of deter-
mining the number of Borrowings outstanding and the minimum
amount for Borrowings resulting from conversions or
continuations, all Borrowings of Base Rate Advances under this
Section 2.02 shall be considered as one Borrowing.
(c) (1) Whenever Interface desires to make a Domestic
Syndicated Borrowing (other than one resulting from a
conversion or continuation pursuant to Section 2.02(e)), it
shall give the Domestic Agent prior written notice (or
telephonic notice promptly confirmed in writing) of such
Domestic Syndicated Borrowing (each a "Domestic Syndicated
Borrowing Notice") prior to 11:00 a.m. (Eastern time) at its
Payment Office (i) one Business Day prior to the requested
date of such Domestic Syndicated Borrowing in the case of
Base Rate Advances, and (ii) three Business Days prior to
the requested date of such Domestic Syndicated Borrowing in
the case of Eurodollar Advances. Notices received after
11:00 a.m. (Eastern time) shall be deemed received on the
next Business Day. Each Domestic Syndicated Borrowing
Notice shall be irrevocable and shall specify the aggregate
principal amount of the Domestic Syndicated Borrowing, the
date of the Domestic Syndicated Borrowing (which shall be a
Business Day), and whether the Domestic Syndicated Borrowing
is to be made as a Base Rate Advance or Eurodollar Advance
and, in the case of a Eurodollar Advance, the Interest
Period to be applicable thereto.
- 41 -<PAGE>
(2) Whenever there occurs any request or demand for
payment under any Domestic Letter of Credit by the
beneficiary thereof, and Interface shall not have notified
the Domestic Agent and the Domestic L/C Issuer prior to
11:00 a.m. (Eastern time) on the Business Day immediately
prior to the date on which such drawing is to be honored
that the L/C Account Party or Interface, on behalf of such
L/C Account Party, intends to reimburse the Domestic L/C
Issuer for the amount of such drawing with funds other than
the proceeds of Domestic Syndicated Loans, (i) Interface
shall be deemed to have given a Domestic Syndicated
Borrowing Notice to the Domestic Agent requesting a Domestic
Syndicated Borrowing consisting of Base Rate Loans on the
date on which such drawing is to be honored in an amount
equal to the amount of such drawing, and (ii) each Domestic
Syndicated Lender shall, by 1:00 p.m. (Eastern time) on the
date of the honoring of such drawing, make a Domestic
Syndicated Loan to Interface which is a Base Rate Loan in an
amount equal to the product of the amount of such drawing
and such Domestic Syndicated Lender's Pro Rata Share, the
proceeds of which shall be applied directly by the Domestic
Agent to reimburse the Domestic L/C Issuer for the amount of
such drawing (PROVIDED THAT, solely for purposes of such
Domestic Syndicated Borrowing, the conditions precedent set
forth in Section 5.03 shall not be applicable to such
Domestic Syndicated Borrowing).
(d) No later than 11:00 a.m. (Eastern time) on the
date of each Domestic Syndicated Borrowing (other than one
resulting from a conversion or continuation pursuant to Section
2.02(e)), each Domestic Syndicated Lender will make available its
Pro Rata Share of the amount of such Domestic Syndicated
Borrowing in immediately available funds at the Payment Office of
the Domestic Agent. The Domestic Agent will make available to
Interface the aggregate of the amounts (if any) so made available
by the Domestic Syndicated Lenders to the Domestic Agent in a
timely manner by crediting such amounts to Interface's demand
deposit account maintained with the Domestic Agent. If any
Domestic Syndicated Lender does not make such amount available to
the Domestic Agent by the time prescribed above, but such amount
is received later that day, such amount may be credited to
Interface in the manner described in the preceding sentence on
the next Business Day (with interest on such amount to begin
accruing hereunder on such next Business Day).
(e) Whenever Interface desires to convert all or a
portion of an outstanding Domestic Syndicated Borrowing made as a
Base Rate Advance or Eurodollar Advance into one or more Domestic
Syndicated Borrowings consisting of an Advance of another Type,
or to continue outstanding a Domestic Syndicated Borrowing made
as a Eurodollar Advance for a new Interest Period, it shall give
the Domestic Agent at least three (3) Business Days' prior
written notice (or telephonic notice promptly confirmed in
writing) of each such Domestic Syndicated Borrowing to be
converted into or continued as a Eurodollar Advance. Such notice
(each a "Notice of Domestic Conversion/Continuation") shall be
given prior to 11:00 a.m. (Eastern time) on the date specified.
Each such Notice of Domestic Conversion/Continuation shall be
irrevocable and shall specify the aggregate principal amount of
the Advance to be converted or continued, the date of such
conversion or continuation, and the Interest Period to be
- 42 -<PAGE>
applicable thereto. If, upon the expiration of any Interest
Period in respect of any Domestic Syndicated Borrowing, Interface
shall have failed, or pursuant to the following sentence be
unable, to deliver the Notice of Domestic
Conversion/Continuation, Interface shall be deemed to have
elected to convert or continue such Domestic Syndicated Borrowing
to a Domestic Syndicated Borrowing made as a Base Rate Advance.
So long as any Default or Event of Default shall have occurred
and be continuing, no Domestic Syndicated Borrowing may be
converted into or continued as (upon expiration of the current
Interest Period) a Fixed Rate Advance. No conversion of any
Domestic Syndicated Borrowing made as a Fixed Rate Advance shall
be permitted except on the last day of the Interest Period in
respect thereof.
(f) Interface's obligations to pay the principal of,
and interest on, the Domestic Syndicated Loans to each Domestic
Syndicated Lender shall be evidenced by the records of the
Domestic Agent and such Domestic Syndicated Lender and by the
Domestic Syndicated Note payable to such Domestic Syndicated
Lender (or the assignor of such Domestic Syndicated Lender)
completed in conformity with this Agreement.
(g) All outstanding principal amounts under the
Domestic Syndicated Loans shall be due and payable in full on the
Maturity Date.
Section 2.03. REDUCTIONS OF DOMESTIC SYNDICATED LOAN
COMMITMENTS AND MANDATORY PREPAYMENTS.
(a) Upon at least three Business Days' prior
telephonic notice (promptly confirmed in writing) to the Domestic
Agent, Interface shall have the right, without premium or
penalty, to terminate the Domestic Syndicated Loan Commitments,
in part or in whole, provided that (i) any such termination shall
apply to reduce proportionately and permanently the Domestic
Syndicated Loan Commitments of each of the Domestic Syndicated
Lenders, (ii) any partial termination pursuant to this Section
2.03 shall be in an amount of at least $1,000,000 and integral
multiples of $100,000, and (iii) no such reduction shall be
permitted which would (x) require a prepayment that is not
permitted by Section 4.06, or (y) reduce the Domestic Syndicated
Loan Commitments to an amount less than the sum of (A) the
Aggregate Domestic L/C Outstandings and (B) the aggregate
principal amount outstanding under the Domestic Revolving Loans.
(b) No mandatory permanent reductions in Commitments
or mandatory prepayments shall be required pursuant to this
Section 2.03(b) until the aggregate amount of Asset Sales
occurring after November 15, 1995 exceeds $15,000,000 (based on
the Asset Values thereof, but excluding in the foregoing
computation and from the requirements of this Section 2.03(b),
(i) Asset Sales resulting from loss, damage, destruction, or
taking where the proceeds thereof are utilized so as to be
excluded from the definition of Net Proceeds, and (ii) Asset
Sales occurring as a part of any sale and leaseback transactions
permitted pursuant to Section 8.06). If, within fourteen (14)
months following any Asset Sale at and after the time such Asset
Values have exceeded $15,000,000, the entire amount of the Net
Proceeds of such Asset Sale have not been applied to an
investment in Replacement Assets, then the amount of the Net
Proceeds from such transaction that have not been so applied
shall immediately be used to prepay on a pro rata basis the
- 43 -<PAGE>
outstanding Domestic Revolving Loans and Multicurrency Revolving
Loans as provided in Section 2.03(d) and Section 3.03(g), and the
Domestic Syndicated Loan Commitments and Multicurrency Syndicated
Loan Commitments shall be permanently reduced by such amount on a
pro rata basis.
(c) Notwithstanding the provisions of paragraph (b) of
this Section 2.03, (i) no mandatory prepayment or reduction in
Commitments shall be required to be made under said paragraph (b)
if the Senior Subordinated Notes and all other Subordinated Debt
having terms requiring prepayments from any Asset Sales are no
longer outstanding or in effect, (ii) no mandatory prepayment or
reduction in Commitments shall be required to be made under said
paragraph (b) if the amount of such prepayment or reduction would
be less than $100,000 in any instance, and (iii) mandatory
prepayment amounts and reduction in Commitments otherwise
required under said paragraph (b) shall be rounded to nearest
multiple of $100,000 (such that, for example, if the portion of
Net Proceeds required to be prepaid pursuant to paragraph (b) is
$250,000 or more, but less than $350,000, the mandatory principal
prepayment amount and reduction in Commitments under this
Section 2.03 shall equal $300,000 PLUS interest accrued and
unpaid on such amount).
(d) If the aggregate outstanding principal amount of
the Domestic Revolving Loans and the Aggregate Domestic L/C
Outstandings exceed at any time the amount of the Domestic
Syndicated Loan Commitments, as reduced pursuant to this Section
2.03 or otherwise, Interface shall immediately repay the Domestic
Revolving Loans by an amount equal to such excess, together with
all accrued but unpaid interest on such excess amount. Each
prepayment of Domestic Revolving Loans under this Section 2.03
shall be applied first to Base Rate Advances to the full extent
thereof before application to Fixed Rate Advances; PROVIDED,
HOWEVER, that so long as no Default or Event of Default has
occurred and is continuing, in lieu of application of such
prepayment to Fixed Rate Advances prior to the expiration of the
respective Interest Periods with respect thereto, Interface, at
its option, may execute an Escrow Letter with respect to such
prepayment and deposit with the Collateral Agent funds equal to
the amount of such prepayment for application in accordance with
the terms of such Escrow Letter.
(e) Notwithstanding the foregoing, but subject to the
provisions of Section 2.03(c), all amounts received as Net
Proceeds from any Asset Sales effected as part of the Readicut
Divestitures shall be used to prepay the outstanding Domestic
Revolving Loans or Multicurrency Revolving Loans hereunder as may
be specified by Interface at the time of such prepayment or, if
not so specified by Interface, then as specified by the Co-
Agents. All such prepayments shall be applied on a pro rata
basis among the holders of such Domestic Revolving Loans or
Multicurrency Revolving Loans as provided in Section 2.03(d) or
among the holders of such Multicurrency Revolving Loans as
provided in Section 3.03(g), as the case may be. The respective
amounts of the Domestic Syndicated Loan Commitments and the
- 44 -
<PAGE>
Multicurrency Syndicated Loan Commitments shall not be affected
by such prepayments pursuant to this Section 2.03(e); PROVIDED,
HOWEVER, that if within fourteen (14) months following any Asset
Sale made as part of the Readicut Divestitures, the entire amount
of the Net Proceeds thereof have not been applied to an
investment in Replacement Assets, then the Domestic Syndicated
Loan Commitments and Multicurrency Syndicated Loan Commitments
shall be permanently reduced on a pro rata basis by the amount of
such Net Proceeds that have not been so applied.
Section 2.04. [Intentionally Omitted]
Section 2.05. DOMESTIC SWING LINE LOANS.
(a) Subject to and upon the terms and conditions
herein set forth (including the limitation set forth in Section
2.01), the Domestic Swing Line Lender agrees to make to
Interface, from time to time prior to the Maturity Date, Domestic
Swing Line Loans in an aggregate principal amount outstanding at
any time not to exceed the Domestic Swing Line Commitment then in
effect. Interface shall be entitled to repay and reborrow
Domestic Swing Line Loans in accordance with the provisions, and
subject to the limitations, set forth herein (including the
limitation set forth in Section 2.01).
(b) Each Domestic Swing Line Loan shall, at the option
of Interface, be made as a Base Rate Advance or Domestic
Transaction Rate Advance. The aggregate principal amount of each
Domestic Swing Line Borrowing shall be not less than $250,000 or
a greater integral multiple of $1,000. At no time shall the
number of Domestic Swing Line Borrowings outstanding under this
Section 2.05 exceed three; PROVIDED THAT, for purposes of
determining the number of Domestic Swing Line Borrowings
outstanding, all Domestic Swing Line Borrowings consisting of
Base Rate Advances shall be considered as one Domestic Swing Line
Borrowing.
(c) Whenever Interface desires to make a Domestic
Swing Line Borrowing, it shall give the Domestic Swing Line
Lender (with a copy to the Domestic Agent) prior written notice
(or telephonic notice promptly confirmed in writing) of such
Domestic Swing Line Borrowing (each a "Domestic Swing Line
Borrowing Notice") prior to 10:00 a.m. (Eastern time) on the date
of such Domestic Swing Line Borrowing. Each Domestic Swing Line
Borrowing Notice shall specify the aggregate principal amount of
the Domestic Swing Line Borrowing, the date of such Domestic
Swing Line Borrowing (which shall be a Business Day), whether a
Domestic Transaction Rate Quote is being requested and, if so,
the Interest Period to be applicable thereto. If Interface
requests a Domestic Transaction Rate Quote as aforesaid, then
prior to 12:00 noon (Eastern time) on such date, the Domestic
Swing Line Lender shall furnish Interface (with a copy to the
Domestic Agent) with a quotation of the interest rate being
offered with respect to such Domestic Swing Line Borrowing
(whether expressed as a fixed rate of interest in effect for the
Interest Period applicable thereto or as a floating rate of
interest based on a specified interest rate index and applicable
margin for the Interest Period to be applicable thereto; in
- 45 -
<PAGE>
either case, a "Domestic Transaction Rate Quote") by telephone
(promptly confirmed in writing) or by facsimile transmission.
Interface shall immediately inform the Domestic Swing Line Lender
(with a copy to the Domestic Agent) of its decision as to whether
to accept the Domestic Transaction Rate Quote and to confirm the
Domestic Swing Line Borrowing (which may be done by telephone,
promptly confirmed in writing, and which decision shall be
irrevocable). If Interface has so informed the Domestic Swing
Line Lender and confirmed the terms of the Domestic Swing Line
Borrowing, then no later than 2:00 p.m. (Eastern time) on such
date, the Domestic Swing Line Lender shall make the principal
amount of the Domestic Swing Line Loan available to the Domestic
Agent in immediately available funds at the Payment Office of the
Domestic Agent, and the Domestic Agent will make available to
Interface such amount by crediting such amount to Interface's
demand deposit account maintained with the Domestic Agent. In
the event that the Domestic Swing Line Lender does not make such
amount available to the Domestic Agent at the time prescribed
above, but such amount is received later that day, such amount
may be credited to Interface in the manner described in the
preceding sentence on the next Business Day (with interest on
such amount to begin accruing hereunder on such next Business
Day).
(d) Interface's obligations to pay the principal of,
and interest on, the Domestic Swing Line Loans shall be evidenced
by the records of the Domestic Agent and the Domestic Swing Line
Lender and by the Domestic Swing Line Note payable to the
Domestic Swing Line Lender (or the assignor of such Domestic
Swing Line Lender) completed in conformity with this Agreement.
(e) The outstanding principal amount under each
Domestic Swing Line Loan shall be due and payable in full (i) on
the expiration of the Interest Period applicable to such Domestic
Swing Line Loan if outstanding as a Domestic Transaction Rate
Advance, and (ii) on the Maturity Date.
(f) At any time on the request of the Domestic Swing
Line Lender, each Domestic Syndicated Lender other than the
Domestic Swing Line Lender shall purchase a participating
interest in all outstanding Domestic Swing Line Loans in an
amount equal to its Pro Rata Share (based upon on its respective
Domestic Syndicated Loan Commitment) of such Domestic Swing Line
Loans, and the Domestic Swing Line Lender shall furnish each
Domestic Syndicated Lender with a certificate evidencing such
participating interest. Such purchase shall be made on the third
Business Day after such request is made; PROVIDED, HOWEVER, that
unless an Event of Default has occurred and is continuing on the
date such request is made, the purchase of a participating
interest in any Domestic Swing Line Loan outstanding as a
Domestic Transaction Rate Advance shall not be required to be
made until the expiration of the current Interest Period in
effect for such Domestic Swing Line Loan. On the date of such
required purchase, each Domestic Syndicated Lender will
immediately transfer to the Domestic Swing Line Lender, in
immediately available funds, the amount of its participation.
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<PAGE>
Whenever, at any time after the Domestic Swing Line Lender has
received from any such Domestic Syndicated Lender the funds for
its participating interest in a Domestic Swing Line Loan, the
Domestic Agent receives any payment on account thereof, the
Domestic Agent will distribute to such Domestic Syndicated Lender
its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period
of time during which such Domestic Syndicated Lender's
participating interest was outstanding and funded); PROVIDED,
HOWEVER, that if such payment received by the Domestic Agent is
required to be returned, such Domestic Syndicated Lender will
return to the Domestic Agent any portion thereof previously
distributed by the Domestic Agent to it. Each Domestic
Syndicated Lender's obligation to purchase such participating
interests shall be absolute and unconditional and shall not be
affected by any circumstance, including without limitation (i)
any setoff, counterclaim, recoupment, defense or other right that
such Domestic Syndicated Lender or any other Person may have
against the Domestic Swing Line Lender requesting such purchase
or any other Person for any reason whatsoever, (ii) the
occurrence or continuation of a Default or an Event of Default or
the termination of any of the Commitments, (iii) any adverse
change in the condition (financial or otherwise) of Interface,
any of its Consolidated Subsidiaries, or any other Person, (iv)
any breach of this Agreement by Interface, any other Borrower, or
any other Lender, or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing;
PROVIDED, HOWEVER, that no such obligation shall exist (A) to the
extent that the aggregate Domestic Swing Line Loans were advanced
in excess of the Domestic Swing Line Commitment then in effect,
or (B) with respect to any Domestic Swing Line Loan where the
Domestic Swing Line Lender actually advanced to Interface net
proceeds from the Domestic Swing Line Loan (and therefore was not
refunding a previous Domestic Swing Line Loan) at a time when (x)
the Domestic Swing Line Lender had actual knowledge that an Event
of Default had occurred and then existed, and (y) the Required
Lenders had not agreed to waive such Event of Default for
purposes of funding such Domestic Swing Line Loan.
Section 2.06. DOMESTIC BID RATE LOANS.
(a) Subject to and upon the terms and conditions
herein set forth (including the limitation set forth in Section
2.01), Interface may, as set forth in this Section 2.06, request
the Domestic Syndicated Lenders, from time to time prior to the
Maturity Date, to make offers to make Domestic Bid Rate Loans to
Interface. Each Domestic Syndicated Lender may, but shall have
no obligation to, make such offers and Interface may, but shall
have no obligation to, accept any such offers in the manner set
forth in this Section 2.06. Interface shall be entitled to repay
and reborrow Domestic Bid Rate Loans in accordance with the
provisions, and subject to the limitations set forth herein
(including the limitation set forth in Section 2.01).
- 47 -<PAGE>
(b) The aggregate principal amount of each Domestic
Bid Rate Borrowing requested by Interface shall be in a principal
amount not less than $5,000,000 or a greater integral multiple of
$1,000,000. At no time shall the number of Borrowings
outstanding under this Section 2.06 and Section 2.02 exceed
eight.
(c) Domestic Bid Rate Loans may be made to Interface
in accordance with the procedures set forth in this Section
2.06(c).
(1) Whenever Interface wishes to request offers
to make Domestic Bid Rate Loans under this Section
2.06, Interface shall transmit to the Domestic Agent by
facsimile transmission a request for such offers (each
a "Domestic Bid Rate Quote Request") so as to be
received by the Domestic Agent not later than 10:00
a.m. (Eastern time) on the third Business Day
immediately preceding the date of the proposed Domestic
Bid Rate Borrowing, specifying (i) the date of the
Domestic Bid Rate Borrowing (which shall be a Business
Day), (ii) the aggregate principal amount of the
Domestic Bid Rate Borrowing, and (iii) the Interest
Period to be applicable thereto. Interface may request
offers to make Domestic Bid Rate Loans for more than
one Interest Period in a single Domestic Bid Rate Quote
Request. A Domestic Bid Rate Quote Request that does
not conform substantially to the format of EXHIBIT O
hereto shall be rejected, and the Domestic Agent shall
promptly notify Interface of such rejection by
facsimile transmission. No Domestic Bid Rate Quote
Request shall be given within ten Business Days after
any other Domestic Bid Rate Quote Request has been
transmitted to the Domestic Syndicated Lenders pursuant
to Section 2.06(c)(2).
(2) Promptly upon receipt of a Domestic Bid Rate
Quote Request that is not rejected pursuant to Section
2.06(c)(1), the Domestic Agent shall transmit to each
of the Domestic Syndicated Lenders by facsimile
transmission an invitation by Interface to each
Domestic Syndicated Lender to submit Domestic Bid Rate
Quotes offering to make Domestic Bid Rate Loans in
accordance with this Section 2.06 (each an "Invitation
for Domestic Bid Rate Quotes") substantially in the
form of EXHIBIT P hereto.
(3) Each Domestic Syndicated Lender may, in its
sole discretion, submit a Domestic Bid Rate Quote
containing an offer or offers to make Domestic Bid Rate
Loans in response to any Invitation for Domestic Bid
Rate Quotes in accordance with the following
procedures:
(A) Each Domestic Bid Rate Quote must comply
with the requirements of this Section 2.06(c)(3)
and must be submitted to the Domestic Agent by
facsimile transmission at its offices specified
herein not later than (x) 9:45 a.m. (Eastern time)
in the case of the Domestic Agent, and (y) 10:00
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a.m. (Eastern time) in the case of each other
Domestic Syndicated Lender, on the second Business
Day immediately preceding the date of the proposed
Domestic Bid Rate Borrowing or, in any such case
upon reasonable prior notice to the Domestic
Syndicated Lenders, such other time and date as
Interface and the Domestic Agent may agree,
PROVIDED THAT the Domestic Agent shall always be
required to submit its Domestic Bid Rate Quotes
not less than 15 minutes prior to the other
Domestic Syndicated Lenders). Subject to Articles
V and IX, any Domestic Bid Rate Quotes so made
shall be irrevocable except with the written
consent of the Domestic Agent given on the
instructions of Interface.
(B) Each Domestic Bid Rate Quote shall in
any case specify (i) the date of the proposed
Domestic Bid Rate Borrowing, which shall be the
same as that set forth in the applicable
Invitation for Domestic Bid Rate Quotes, (ii) the
principal amount of the Domestic Bid Rate Loan for
which each such offer is being made, which
principal amount (x) may be greater than, less
than or equal to the Domestic Syndicated Loan
Commitment of the quoting Domestic Syndicated
Lender, and (y) may not exceed the principal
amount of Domestic Bid Rate Loans for which offers
were requested, (iii) the minimum or maximum
amount, if any, of the Domestic Bid Rate Loan
which may be accepted by Interface, (iv) the
applicable Interest Period, and (v) the identity
of the quoting Domestic Syndicated Lender.
(C) The Domestic Agent shall reject any
Domestic Bid Rate Quote that (i) is not
substantially in the form of EXHIBIT Q hereto or
does not specify all of the information required
by Section 2.06(c)(3)(B), (ii) contains
qualifying, conditional or similar language, other
than any such language contained in EXHIBIT Q
hereto, (iii) proposes terms other than or in
addition to those set forth in the applicable
Invitation for Domestic Bid Rate Quotes, or (iv)
arrives after the time set forth in Section
2.06(c)(3)(A).
(D) If any Domestic Bid Rate Quote shall be
rejected pursuant to Section 2.06(c)(3)(C), then
the Domestic Agent shall notify the relevant
Domestic Syndicated Lender of such rejection as
soon as practicable.
If any Domestic Syndicated Lender shall elect not to
submit a Domestic Bid Rate Quote, such Domestic Bid
Rate Lender shall so notify the Domestic Agent not
later than 10:00 a.m. (Eastern time) on the second
Business Day immediately preceding the date of the
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proposed Domestic Bid Rate Borrowing, and such Domestic
Syndicated Lender shall not be obligated to, and shall
not, make any Domestic Bid Rate Loan as part of such
Domestic Bid Rate Borrowing; PROVIDED, HOWEVER, that
the failure of any Domestic Syndicated Lender to give
such notice shall not cause it to be obligated to make
any Domestic Bid Rate Loan as part of such Borrowing.
(4) Subject to its timely receipt of one or more
Domestic Bid Rate Quotes in the manner described in
Section 2.06(c)(3), the Domestic Agent shall notify
Interface as soon as practicable (but in any event
using reasonable efforts to effect such notice prior to
10:45 a.m. (Eastern time) on the second Business Day
immediately preceding the date of the proposed Domestic
Bid Rate Borrowing) as to the terms (i) of any Domestic
Bid Rate Quote submitted by a Domestic Syndicated
Lender that is in accordance with Section 2.06(c) and
(ii) of any Domestic Bid Rate Quote that is in
accordance with Section 2.06(c) and amends, modifies or
is otherwise inconsistent with a previous Domestic Bid
Rate Quote submitted by such Domestic Syndicated Lender
with respect to the same Domestic Bid Rate Quote
Request. Any such subsequent Domestic Bid Rate Quote
shall be disregarded by the Domestic Agent unless such
subsequent Domestic Bid Rate Quote specifically states
that it is submitted solely to correct a manifest error
in such previous Domestic Bid Rate Quote. The Domestic
Agent's notice to Interface shall specify the aggregate
principal amount of Domestic Bid Rate Loans for which
offers have been received for each Interest Period
specified in the related Domestic Bid Rate Quote
Request and the respective principal amounts and
Domestic Bid Rates, as the case may be, so offered.
(5) Subject to receipt of the notice from the
Domestic Agent referred to in Section 2.06(c)(4), not
later than 11:00 a.m. (Eastern time) on the second
Business Day immediately preceding the date of the
proposed Domestic Bid Rate Borrowing, Interface shall
notify the Domestic Agent of Interface's acceptance or
rejection of the offer so notified to it pursuant to
Section 2.06(c)(4); PROVIDED, HOWEVER, that the failure
by Interface to give such notice to the Domestic Agent
shall be deemed to be a rejection by Interface of all
such offers. In the case of acceptance, such notice
(each a "Domestic Bid Rate Acceptance Notice") shall
specify the aggregate principal amount of offers for
each Interest Period that are accepted. Interface may
accept or reject any Domestic Bid Rate Quote in whole
or in part (subject to the terms of Section 2.06(b);
PROVIDED THAT (i) the aggregate principal amount of
each Domestic Bid Rate Advance may not exceed the
applicable amount set forth in the related Domestic Bid
Rate Quote Request, (ii) acceptance of offers may only
be made in the order of ascending Domestic Bid Rates,
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(iii) Interface may not accept any offer of the type
described in Section 2.06(c)(3)(C) or that otherwise
fails to comply with the requirements of this Agreement
for the purpose of obtaining a Domestic Bid Rate Loan
under this Agreement, and (iv) any such acceptance by
Interface shall constitute its irrevocable request to
borrow the aggregate principal amount so accepted.
(6) If offers are made by two or more Domestic
Syndicated Lenders with the same Domestic Bid Rates for
a greater aggregate principal amount than the amount in
respect of which offers are permitted to be accepted
for the related Interest Period, the principal amount
of Domestic Bid Rate Loans in respect of which such
offers are accepted shall be allocated by the Domestic
Agent among such Domestic Syndicated Lenders as nearly
as possible (in such multiples as the Domestic Agent
may deem appropriate) in proportion to the aggregate
principal amount of such offers; PROVIDED, HOWEVER,
that no Domestic Syndicated Lender shall be allocated a
portion of any Domestic Bid Rate Advance which is less
than the minimum amount which such Domestic Syndicated
Lender has indicated that it is willing to accept.
Allocations by the Domestic Agent of the amounts of
Domestic Bid Rate Loans shall be conclusive in the
absence of manifest error. The Domestic Agent shall
promptly, but in any event by 12:00 noon (Eastern time)
on the second Business Day immediately preceding the
date of the proposed Domestic Bid Rate Borrowing,
notify each Domestic Syndicated Lender of its receipt
of a Domestic Bid Rate Acceptance Notice and the
aggregate principal amount of each Domestic Bid Rate
Advance allocated to each participating Domestic
Syndicated Lender.
(d) No later than 1:00 p.m. (Eastern time) on the date
of each Domestic Bid Rate Borrowing, each Domestic Bid Rate
Lender participating in such Borrowing will make available its
portion of such Borrowing in immediately available funds at the
Payment Office of the Domestic Agent. The Domestic Agent will
make available to Interface the aggregate of the amounts (if any)
so made available by the Domestic Bid Rate Lenders to the
Domestic Agent in a timely manner by crediting such amounts to
Interface's demand deposit account maintained with the Domestic
Agent. In the event that the Domestic Bid Rate Lenders do not
make such amounts available to the Domestic Agent by the time
prescribed above, but such amount is received later that day,
such amount may be credited to Interface in the manner described
in the preceding sentence on the next Business Day (with interest
on such amount to begin accruing hereunder on such next Business
Day).
(e) Interface's obligations to pay the principal of,
and interest on, the Domestic Bid Rate Loans to each Domestic Bid
Rate Lender shall be evidenced by the records of the Domestic
Agent and such Domestic Bid Rate Lender and by the Domestic Bid
Rate Note payable to such Domestic Bid Rate Lender (or the
assignor of such Domestic Bid Rate Lender) completed in
conformity with this Agreement.
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(f) All outstanding principal amounts under each
Domestic Bid Rate Loan shall be due and payable in full (i) on
the expiration of the Interest Period applicable to such Domestic
Bid Rate Loan, and (ii) on the Maturity Date.
Section 2.07. USE OF PROCEEDS. The proceeds of the
Domestic Syndicated Loans, Domestic Swing Line Loans, and
Domestic Bid Rate Loans shall be used as working capital and for
other general corporate purposes of Interface and its
Consolidated Subsidiaries.
Section 2.08. INCREASE IN DOMESTIC SYNDICATED LOAN
COMMITMENTS ON THE CLOSING DATE.
(a) On the Closing Date, the aggregate Domestic
Syndicated Loan Commitments of the Lenders shall be increased
from $170,000,000 in aggregate principal amount to $220,000,000
in aggregate principal amount, with such aggregate increase being
the result of increases in the Domestic Syndicated Loan
Commitment of certain Lenders and decreases in the Domestic
Syndicated Loan Commitments of the remaining Lenders. After
giving effect to the foregoing actions, the Domestic Syndicated
Loan Commitments of the Lenders shall be as set forth on the
signature pages to this Agreement. On the Closing Date, all
outstanding Domestic Syndicated Loans that had been borrowed or
previously continued or converted prior to the Closing Date shall
be prepaid in full, together with all interest accrued and unpaid
thereon through the date of such prepayment occurring and all
amounts required to be paid pursuant to Section 4.12 as a result
of such prepayment occurring on a date other than the last day of
an Interest Period. All Borrowings of Domestic Syndicated Loans
pursuant to Section 2.02 (including, without limitation, all such
Borrowings made by Interface on the Closing Date to prepay all
Domestic Syndicated Loans then outstanding) and all continuations
and conversions of outstanding Domestic Syndicated Loans pursuant
to Section 2.02 occurring after the Closing Date shall be made on
the basis of the revised Domestic Syndicated Loan Commitments as
provided in this Agreement. All Domestic Bid Rate Loans
outstanding on the Closing Date and scheduled to mature after the
Closing Date shall continue to remain outstanding in accordance
with their respective terms and shall not be repaid or otherwise
affected by the transactions described in this Section 2.08.
(b) Interface's obligations to pay the principal of,
and interest on, all Domestic Syndicated Loans under the Domestic
Syndicated Notes being executed and delivered on the Closing Date
by Interface shall be evidenced by the records of the Domestic
Agent and each such Lender and by such Domestic Syndicated Note
payable to such Lender completed in conformity with this
Agreement.
(c) From and after the Closing Date, all references in
this Agreement to the Domestic Syndicated Loan Commitments shall
be deemed to include the Domestic Syndicated Loan Commitments as
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reduced by this Section 2.08 (subject, however, to subsequent
increases or decreases from time to time pursuant to the
provisions of this Agreement).
ARTICLE III.
MULTICURRENCY REVOLVING LOANS
Section 3.01. DESCRIPTION OF MULTICURRENCY REVOLVING
CREDIT FACILITIES. Subject to and upon the terms and conditions
herein set forth (i) the Multicurrency Syndicated Lenders hereby
establish in favor of the Multicurrency Borrowers a revolving
credit facility pursuant to which such Multicurrency Syndicated
Lenders agree to make Multicurrency Syndicated Loans to the
Multicurrency Borrowers in accordance with Section 3.02, (ii) the
Multicurrency Swing Line Lender hereby establishes in favor of
the Multicurrency Borrowers a swing line credit facility pursuant
to which the Multicurrency Swing Line Lender agrees to make
Multicurrency Swing Line Loans to the Multicurrency Borrowers in
accordance with Section 3.05, and (iii) each Multicurrency
Syndicated Lender may, in its sole discretion, submit bids to
make Multicurrency Bid Rate Loans to the Multicurrency Borrowers
in accordance with Section 3.06; PROVIDED, HOWEVER, that in no
event may the aggregate principal amount of all outstanding
Multicurrency Revolving Loans and the Aggregate Multicurrency L/C
Outstandings exceed at any time the total Multicurrency
Syndicated Loan Commitments from time to time in effect.
Section 3.02. MULTICURRENCY SYNDICATED LOANS.
(a) Subject to and upon the terms and conditions
herein set forth (including the limitation set forth in Section
3.01), each Multicurrency Syndicated Lender severally agrees to
make to the Multicurrency Borrowers from time to time prior to
the Maturity Date, Multicurrency Syndicated Loans in an aggregate
principal amount outstanding at any time not to exceed an amount
equal to (i) such Multicurrency Syndicated Lender's Multicurrency
Syndicated Loan Commitment, MINUS (ii) such Multicurrency
Syndicated Lender's Multicurrency L/C Exposure. For the purpose
of determining the unutilized portion of the Multicurrency
Syndicated Loan Commitment of each Multicurrency Syndicated
Lender on the date of a requested Borrowing under its
Multicurrency Syndicated Loan Commitment, the Dollar Equivalent
of the Borrowing then being requested from such Multicurrency
Syndicated Lender shall be aggregated with the Dollar Equivalents
of all Multicurrency Syndicated Loans and Multicurrency L/C
Exposure of such Multicurrency Lender then outstanding (the
Dollar Equivalent of each such outstanding Loan to be calculated
as of the date of the most recent conversion or continuation of
such Loan pursuant to Section 3.02(e) or, if not previously
continued or converted, the date of the initial Borrowing of such
Loan pursuant to Section 3.02(c)). The Multicurrency Borrowers
shall be entitled to repay and reborrow Multicurrency Syndicated
Loans in accordance with the provisions, and subject to the
limitations, set forth herein (including the limitation set forth
in Section 3.01).
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(b) Each Multicurrency Syndicated Loan shall, at the
option of a Multicurrency Borrower, be made or continued as, or
converted into, part of one or more Borrowings that, unless
otherwise specifically provided herein, shall consist entirely of
Base Rate Advances (if selected by Europe B.V. with respect to
Multicurrency Syndicated Loans made in U.S. Dollars) or
Eurocurrency Advances. The aggregate principal amount of each
Borrowing of Multicurrency Syndicated Loans shall be in the
minimum amounts and multiples indicated below for a Borrowing in
the specified Agreed Currency, PROVIDED that Multicurrency
Syndicated Loans comprised of Base Rate Advances shall not be
less than $250,000 or a greater integral multiple of $1,000:
Minimum
Currency Borrowing Multiple
U.S. Dollars 1,000,000 100,000
Dutch Guilders 2,000,000 200,000
German Marks 1,500,000 150,000
French Francs 5,500,000 550,000
British Pounds 550,000 55,000
Japanese Yen 100,000,000 10,000,000
The aggregate principal amount of each Borrowing of Multicurrency
Syndicated Loans made in the Euro shall be in the minimum amounts
and multiples determined by the Multicurrency Agent and
communicated to Interface in writing based on the Approximate
Equivalent Amount in the Euro for a minimum amount of $1,000,000
and a multiple of $100,000.
At no time shall the number of Borrowings outstanding under this
Section 3.02 and Section 3.06 exceed eight; PROVIDED that, for
purposes of determining the number of Borrowings outstanding and
the minimum amount for Borrowings resulting from conversions or
continuations, all Borrowings of Base Rate Advances under this
Section 3.02 shall be considered as one Borrowing.
(c) (1) Whenever a Multicurrency Borrower desires to
make a Multicurrency Syndicated Borrowing (other than one
resulting from a conversion or continuation pursuant to Section
3.02(e)), it shall give the Multicurrency Agent prior written
notice (or telephonic notice promptly confirmed in writing) of
such Multicurrency Syndicated Borrowing (each a "Multicurrency
Syndicated Borrowing Notice") prior to 11:00 a.m. (Eastern time)
at its Payment Office (i) one Business Day prior to the requested
date of such Multicurrency Syndicated Borrowing in the case of
Base Rate Advances (available only with respect to Multicurrency
Syndicated Loans to be made to Europe B.V. in U.S. Dollars), and
(ii) three Business Days prior to the requested date of such
Multicurrency Syndicated Borrowing in the case of Eurocurrency
Advances. Notices received after 11:00 a.m. (Eastern time) shall
be deemed received on the next Business Day. Each Multicurrency
Syndicated Borrowing Notice shall be irrevocable and shall
specify the aggregate principal amount of the Multicurrency
Syndicated Borrowing, the date of the Multicurrency Syndicated
Borrowing (which shall be a Business Day), and whether the
Multicurrency Syndicated Borrowing is to consist of a Base Rate
Advance or a Eurocurrency Advance and, in the case of a
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Eurocurrency Advance, the Agreed Currency in which such Advance
is to be made and the Interest Period to be applicable thereto.
(2) Whenever there occurs any request or demand
for payment under any Multicurrency Letter of Credit by the
beneficiary thereof, and Interface shall not have notified the
Multicurrency Agent and the Multicurrency L/C Issuer prior to
11:00 a.m. (Eastern time) on the Business Day immediately prior
to the date on which such drawing is to be honored that the L/C
Account Party or Interface, on behalf of such L/C Account Party,
intends to reimburse the Multicurrency L/C Issuer for the amount
of such drawing with funds other than the proceeds of
Multicurrency Syndicated Loans, (i) Interface shall be deemed to
have given a Multicurrency Syndicated Borrowing Notice to the
Multicurrency Agent requesting a Multicurrency Syndicated
Borrowing consisting of a Eurocurrency Advance bearing interest
based on the Adjusted Special LIBO Rate (PLUS the Applicable
Margin) on the date on which such drawing is to be honored in an
amount equal to the amount of such drawing, and (ii) each
Multicurrency Syndicated Lender shall, by 1:00 p.m. (Eastern
time) on the date of the honoring of such drawing, make a
Multicurrency Syndicated Loan to Interface which is a
Eurocurrency Advance in the Agreed Currency in which the
Multicurrency Letter of Credit was issued, bearing interest based
on the Adjusted Special LIBO Rate (PLUS the Applicable Margin) in
an amount equal to the product of the amount of such drawing and
such Multicurrency Syndicated Lender's Pro Rata Share, the
proceeds of which shall be applied directly by the Multicurrency
Agent to reimburse the Multicurrency L/C Issuer for the amount of
such drawing (provided that, solely for purposes of such
Multicurrency Syndicated Borrowing, the conditions precedent set
forth in Section 5.03 shall not be applicable to such
Multicurrency Syndicated Borrowing).
(d) No later than 11:00 a.m. (local time in the City
of the applicable Payment Office for the Agreed Currency) on the
date of each Multicurrency Syndicated Borrowing (other than one
resulting from a conversion or continuation pursuant to Section
3.02(e)), each Multicurrency Syndicated Lender will make
available its Pro Rata Share of the amount of such Multicurrency
Syndicated Borrowing in immediately available funds in the Agreed
Currency at such Payment Office. The Multicurrency Agent will
make available to the applicable Multicurrency Borrower the
aggregate of the amounts (if any) so made available by the
Multicurrency Syndicated Lenders to the Multicurrency Agent in a
timely manner by crediting such amounts to the applicable
Multicurrency Borrower's demand deposit account maintained with
the Multicurrency Agent. If a Multicurrency Syndicated Lender
does not make such amount available to the Multicurrency Agent by
the time prescribed above, but such amount is received later that
day, such amount may be credited to the applicable Multicurrency
Borrower in the manner described in the preceding sentence on the
next Business Day (with interest on such amount to begin accruing
hereunder on such next Business Day).
(e) Whenever a Multicurrency Borrower desires to
convert all or a portion of an outstanding Multicurrency
Syndicated Borrowing made as a Base Rate Advance or Eurocurrency
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Advance into one or more Multicurrency Syndicated Borrowings in
the same Agreed Currency consisting of an Advance of another
Type, or to continue outstanding a Multicurrency Syndicated
Borrowing made as a Eurocurrency Advance in the same Agreed
Currency for a new Interest Period, such Multicurrency Borrower
or Interface acting on behalf of such Multicurrency Borrower,
shall give the Multicurrency Agent at least three Business Days'
prior written notice (or telephonic notice promptly confirmed in
writing) of each such Multicurrency Syndicated Borrowing to be
converted into or continued as a Eurocurrency Advance. Such
notice (each a "Notice of Multicurrency Conversion/Continuation")
shall be given prior to 11:00 a.m. (Eastern time) at its
Administrative Office on the date specified. Each such Notice of
Multicurrency Conversion/Continuation shall be irrevocable and
shall specify the aggregate principal amount of the Advance to be
converted or continued, the date of such conversion or
continuation, whether the Advance is being converted into or
continued as a Eurocurrency Advance and the Interest Period to be
applicable thereto. If, upon the expiration of any Interest
Period in respect of any Eurocurrency Advance, the applicable
Multicurrency Borrower shall have failed, or pursuant to the
following sentence be unable, to deliver or have delivered on its
behalf the Notice of Multicurrency Conversion/Continuation, such
Borrowing shall, until repaid or until subsequently converted or
continued when the applicable conditions set forth in the
following sentence shall no longer exist, continue outstanding in
the same Agreed Currency and shall bear interest at the Adjusted
Special LIBO Rate PLUS the Applicable Margin. Notwithstanding
the first sentence of this Section 3.02(e), no Notice of
Multicurrency Conversion/Continuation may be given if, on the
date of the requested conversion or continuation, the Dollar
Equivalent of the aggregate outstanding Multicurrency Syndicated
Loans (calculated in the manner set forth in the second sentence
of Section 3.01(a)), together with the aggregate outstanding
Multicurrency Swing Line Loans and Multicurrency Bid Rate Loans
and the Aggregate Multicurrency L/C Outstandings, exceeds the
amount of the Multicurrency Syndicated Loan Commitments in effect
on such date, and the Multicurrency Borrowers shall repay the
Multicurrency Revolving Loans by an amount equal to such excess
together with all accrued interest on such excess amount. So
long as any Default or Event of Default shall have occurred and
be continuing, no Multicurrency Syndicated Borrowing may be
converted into or continued as (upon expiration of the current
Interest Period) a Eurocurrency Advance. No conversion of any
Eurocurrency Advance shall be permitted except on the last day of
the Interest Period in respect thereof.
(f) The Multicurrency Borrowers' obligations to pay
the principal of, and interest on, the Multicurrency Syndicated
Loans to each Multicurrency Syndicated Lender shall be evidenced
by the records of the Multicurrency Agent and such Multicurrency
Syndicated Lender and by the Multicurrency Syndicated Notes
payable to such Multicurrency Syndicated Lender (or the assignor
of such Multicurrency Syndicated Lender) completed in conformity
with this Agreement.
(g) All outstanding principal amounts under the
Multicurrency Syndicated Loans shall be due and payable in full
on the Maturity Date.
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Section 3.03. REDUCTIONS OF MULTICURRENCY SYNDICATED
LOAN COMMITMENTS AND MANDATORY PREPAYMENTS.
(a) Upon at least three Business Days' prior
telephonic notice (promptly confirmed in writing) to the
Multicurrency Agent, the Multicurrency Borrowers shall have the
right, without premium or penalty, to terminate the Multicurrency
Syndicated Loan Commitments, in part or in whole, provided that
(i) any such partial termination shall apply to reduce
proportionately and permanently the Multicurrency Syndicated Loan
Commitments of each of the Multicurrency Syndicated Lenders, (ii)
any partial termination pursuant to this Section 3.03 shall be in
an amount of at least $1,000,000 and integral multiples of
$100,000, and (iii) no such reduction shall be permitted which
would (x) require a prepayment that is not permitted by Section
4.06, or (y) reduce the Multicurrency Syndicated Loan Commitments
to an amount less than the sum of (A) the Aggregate Multicurrency
L/C Outstandings, and (B) the aggregate principal amounts
outstanding under the Multicurrency Revolving Loans.
(b) If any Multicurrency Syndicated Lender fails to
deliver to Interface by December 31, 1998, the certificate or
other document from the United Kingdom Inland Revenue as
specified in Section 4.07(b)(v)(B) or otherwise fails to
establish to the satisfaction of Interface that it is exempt from
withholding taxes imposed by the United Kingdom, and such
Multicurrency Syndicated Lender's Multicurrency Syndicated Loan
Commitment has not been assigned to another Multicurrency
Syndicated Lender or an Eligible Assignee pursuant to Section
11.06(g), then upon at least five Business Days' prior written
notice to the Multicurrency Agent and such Multicurrency
Syndicated Lender, the Multicurrency Borrowers shall have the
right to terminate the Multicurrency Syndicated Loan Commitment
of such Multicurrency Syndicated Lender, and the aggregate amount
of Multicurrency Syndicated Loan Commitments shall be reduced by
such amount (but without any effect on the amount of the
Multicurrency Syndicated Loan Commitment of any other
Multicurrency Syndicated Lender).
(c) No mandatory permanent reductions in Commitments
or mandatory prepayments shall be required pursuant to this
Section 3.03(c) until the aggregate amount of Asset Sales
occurring after November 15, 1995 exceeds $15,000,000 (based on
the Asset Values thereof, but excluding in the foregoing
computation and from the requirements of this Section 3.03(c),
(i) Asset Sales resulting from loss, damage, destruction, or
taking where the proceeds thereof are utilized so as to be
excluded from the definition of Net Proceeds, and (ii) Asset
Sales occurring as a part of any sale and leaseback transactions
permitted pursuant to Section 8.06). If, within fourteen (14)
months following any Asset Sale at and after the time such Asset
Values have exceeded $15,000,000, the entire amount of the Net
Proceeds of such Asset Sale have not been applied to an
investment in Replacement Assets, then the amount of the Net
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Proceeds from such transaction that have not been so applied
shall immediately be used to prepay on a pro rata basis the
outstanding Domestic Revolving Loans and Multicurrency Revolving
Loans as provided in Section 2.03(d) and Section 3.03(g), and the
Domestic Syndicated Loan Commitments and Multicurrency Syndicated
Loan Commitments shall be permanently reduced by such amount on a
pro rata basis.
(d) Notwithstanding the provisions of paragraph (c) of
this Section 3.03, (i) no mandatory prepayment or reduction in
Commitments shall be required to be made under said paragraph (c)
if the Senior Subordinated Notes and all other Subordinated Debt
having terms requiring prepayments from any Asset Sales are no
longer outstanding or in effect, (ii) no mandatory prepayment or
reduction in Commitments shall be required to be made under said
paragraph (c) if the amount of such prepayment or commitment
would be less than $100,000 in any instance, and (iii) mandatory
prepayment amounts and reduction in Commitments otherwise
required under said paragraph (c) shall be rounded to nearest
multiple of $100,000 (such that, for example, if the portion of
Net Proceeds required to be prepaid pursuant to paragraph (b) is
$250,000 or more, but less than $350,000, the mandatory principal
prepayment amount and reduction in Commitments under this
Section 3.03 shall equal $300,000 PLUS interest accrued and
unpaid on such amount).
(e) If the aggregate outstanding principal amounts of
the Multicurrency Revolving Loans and the Aggregate Multicurrency
L/C Outstandings exceed at any time the amount of the
Multicurrency Syndicated Loan Commitments, as reduced pursuant to
Section 3.03 or otherwise, the Multicurrency Borrowers shall
immediately repay the Multicurrency Revolving Loans by an amount
equal to such excess, together with all accrued but unpaid
interest on such excess amount. If the Dollar Equivalent of the
aggregate outstanding Multicurrency Revolving Loans and the
Aggregate Multicurrency L/C Outstandings (calculated in the
manner set forth in the second sentence of Section 3.02(a))
exceed the amount of the Multicurrency Syndicated Loan
Commitments, as reduced pursuant to Section 3.03 or otherwise,
the Multicurrency Borrowers shall immediately repay the
Multicurrency Revolving Loans by a Dollar Equivalent amount equal
to such excess, together with all accrued but unpaid interest on
such excess amount.
(f) If at any time the Multicurrency Agent shall
determine that the aggregate principal amount of the
Multicurrency Revolving Loans and the Aggregate Multicurrency L/C
Outstandings (after converting all Eurocurrency Advances to
their Dollar Equivalent on the date of calculation) is equal to
or greater than one hundred ten percent (110%) of the aggregate
Multicurrency Syndicated Loan Commitments then in effect, the
Multicurrency Borrowers shall, upon three Business Days' prior
written notice from the Multicurrency Agent to the Multicurrency
Borrowers, or to Interface on behalf of the Multicurrency
Borrowers, prepay an aggregate principal amount of Multicurrency
Revolving Loans such that the Dollar Equivalent of the
outstanding principal amount of the Multicurrency Revolving Loans
and the Aggregate Multicurrency L/C Outstandings does not exceed
the aggregate Multicurrency Syndicated Loan Commitments, together
with all accrued but unpaid interest on such excess amount.
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(g) Each mandatory prepayment of Multicurrency
Revolving Loans pursuant to this Section 3.03 shall be applied
first to Base Rate Advances to the full extent thereof before
application to Fixed Rate Advances; PROVIDED, HOWEVER, that so
long as no Default or Event of Default has occurred and is
continuing, in lieu of application of such prepayment to Fixed
Rate Advances prior to the expiration of the respective Interest
Periods with respect thereto, the Multicurrency Borrowers, at
their option, may execute an Escrow Letter with respect to such
prepayment and deposit with the Collateral Agent funds equal to
the amount of such prepayment for application in accordance with
the terms of such Escrow Letter.
(h) Notwithstanding the foregoing, but subject to the
provisions of Section 3.03(d) with respect to minimum prepayment
amounts and the rounding of prepayment amounts, all amounts
received as Net Proceeds from any Asset Sales effected as part of
the Readicut Divestitures shall be used to prepay the outstanding
Domestic Revolving Loans or Multicurrency Revolving Loans
hereunder as may be specified by Interface at the time of such
prepayment or, if not so specified by Interface, then as
specified by the Co-Agents. All such prepayments shall be applied on
a pro rata basis among the holders of such Domestic Revolving
Loans as provided in Section 2.03(d) or among the holders of such
Multicurrency Revolving Loans as provided in Section 3.03(g), as
the case may be. The respective amounts of the Domestic
Syndicated Loan Commitments and the Multicurrency Syndicated Loan
Commitments shall not be affected by such prepayments pursuant to
this Section 3.03(h); PROVIDED, HOWEVER, that if within fourteen
(14) months following any Asset Sale made as part of the Readicut
Divestitures, the entire amount of the Net Proceeds thereof have
not been applied to an investment in Replacement Assets, then the
Domestic Syndicated Loan Commitments and Multicurrency Syndicated
Loan Commitments shall be permanently reduced on a pro rata basis
by the amount of such Net Proceeds that have not been so applied.
Section 3.04. [Intentionally Omitted]
Section 3.05. MULTICURRENCY SWING LINE LOANS.
(a) Subject to and upon the terms and conditions
herein set forth (including the limitation set forth in Section
3.01), the Multicurrency Swing Line Lender agrees to make to the
Multicurrency Borrowers from time to time prior to the Maturity
Date, Multicurrency Swing Line Loans in U.S. Dollars in an
aggregate principal amount outstanding at any time not to exceed
the Multicurrency Swing Line Commitment then in effect. The
Multicurrency Borrowers shall be entitled to repay and reborrow
Multicurrency Swing Line Loans in accordance with the provisions,
and subject to the limitations, set forth herein (including the
limitation set forth in Section 3.01).
(b) Each Multicurrency Swing Line Loan shall, at the
option of the applicable Multicurrency Borrower, be made as a
Base Rate Advance or Multicurrency Transaction Rate Advance. The
aggregate principal amount of each Multicurrency Swing Line
Borrowing shall be not less than $250,000 or a greater integral
multiple of $1,000. At no time shall the number of Multicurrency
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Swing Line Borrowings outstanding under this Section 3.05 exceed
three; PROVIDED THAT, for purposes of determining the number of
Multicurrency Swing Line Borrowings outstanding, all
Multicurrency Swing Line Borrowings consisting of Base Rate
Advances shall be considered as one Multicurrency Swing Line
Borrowing.
(c) Whenever a Multicurrency Borrower desires to make
a Multicurrency Swing Line Borrowing, such Multicurrency
Borrower, or Interface acting on behalf of such Multicurrency
Borrower, shall give the Multicurrency Swing Line Lender (with a
copy to the Multicurrency Agent) prior written notice (or
telephonic notice promptly confirmed in writing) of such
Multicurrency Swing Line Borrowing (each a "Multicurrency Swing
Line Borrowing Notice") prior to 10:00 a.m. (Eastern time) on the
date of such Multicurrency Swing Line Borrowing. Each
Multicurrency Swing Line Borrowing Notice shall specify the
aggregate principal amount of the Multicurrency Swing Line
Borrowing, the date of such Multicurrency Swing Line Borrowing
(which shall be a Business Day), whether a Multicurrency
Transaction Rate Quote is being requested and, if so, the
Interest Period to be applicable thereto. If a Multicurrency
Transaction Rate Quote is requested as aforesaid, then prior to
12:00 noon (Eastern time) on such date, the Multicurrency Swing
Line Lender shall furnish to the Multicurrency Borrower or to
Interface on behalf of such Multicurrency Lender (with a copy to
the Multicurrency Agent) with a quotation of the interest rate
being offered with respect to such Multicurrency Swing Line
Borrowing (whether expressed as a fixed rate of interest in
effect for the Interest Period applicable thereto or as a
floating rate of interest based on a specified interest
rate index and applicable margin for the Interest Period to be
applicable thereto; in either case, a "Multicurrency Transaction
Rate Quote") by telephone (promptly confirmed in writing) or by
facsimile transmission. The Multicurrency Borrower, or Interface
acting on behalf of the Multicurrency Borrower, shall immediately
inform the Multicurrency Swing Line Lender (with a copy to the
Multicurrency Agent) of its decision as to whether to accept the
Multicurrency Transaction Rate Quote and to confirm the
Multicurrency Swing Line Borrowing (which may be done by
telephone, promptly confirmed in writing, and which decision
shall be irrevocable). If the Multicurrency Borrower, or
Interface acting on behalf of the Multicurrency Borrower, has so
informed the Multicurrency Swing Line Lender and confirmed the
terms of the Multicurrency Swing Line Borrowing, then no later
than 2:00 p.m. (Eastern time) on such date, the Multicurrency
Swing Line Lender shall make the principal amount of the
Multicurrency Swing Line Loan available to the Multicurrency
Agent in immediately available funds at the Payment Office of the
Multicurrency Agent, and the Multicurrency Agent will make
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available to the Multicurrency Borrower such amount by crediting
such amount to the Multicurrency Borrower's demand deposit
account maintained with the Multicurrency Agent. In the event
that the Multicurrency Swing Line Lender does not make such
amount available to the Multicurrency Agent at the time
prescribed above, but such amount is received later that day,
such amount may be credited to the Multicurrency Borrower in the
manner described in the preceding sentence on the next Business
Day (with interest on such amount to begin accruing hereunder on
such next Business Day).
(d) The Multicurrency Borrowers' obligations to pay
the principal of, and interest on, the Multicurrency Swing Line
Loans shall be evidenced by the records of the Multicurrency
Agent and the Multicurrency Swing Line Lender and by the
Multicurrency Swing Line Notes payable to the Multicurrency Swing
Line Lender (or the assignor of such Multicurrency Swing Line
Lender) completed in conformity with this Agreement.
(e) All outstanding principal amounts under each
Multicurrency Swing Line Loan shall be due and payable in full
(i) on the expiration of the Interest Period applicable to such
Multicurrency Swing Line Loan if outstanding as a Multicurrency
Transaction Rate Advance, and (ii) on the Maturity Date.
(f) At any time on the request of the Multicurrency
Swing Line Lender, each Multicurrency Syndicated Lender other
than the Multicurrency Swing Line Lender shall purchase a
participating interest in all outstanding Multicurrency Swing
Line Loans in an amount equal to its Pro Rata Share (based upon
on its respective Multicurrency Syndicated Loan Commitment) of
such Multicurrency Swing Line Loans, and the Multicurrency Swing
Line Lender shall furnish each Multicurrency Syndicated Lender
with a certificate evidencing such participating interest. Such
purchase shall be made on the third Business Day after such
request is made; PROVIDED, HOWEVER, that unless an Event of
Default has occurred and is continuing on the date such request
is made, the purchase of a participating interest in any
Multicurrency Swing Line Loan outstanding as a Multicurrency
Transaction Rate Advance shall not be required to be made until
the expiration of the current Interest Period in effect for such
Multicurrency Swing Line Loan. On the date of such required
purchase, each Multicurrency Syndicated Lender will immediately
transfer to the Multicurrency Swing Line Lender, in immediately
available funds, the amount of its participation. Whenever, at
any time after the Multicurrency Swing Line Lender has received
from any such Multicurrency Syndicated Lender the funds for its
participating interest in a Multicurrency Swing Line Loan, the
Multicurrency Agent receives any payment on account thereof, the
Multicurrency Agent will distribute to such Multicurrency
Syndicated Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Multicurrency
Syndicated Lender's participating interest was outstanding and
funded); PROVIDED, HOWEVER, that if such payment received by the
Multicurrency Agent is required to be returned, such
Multicurrency Syndicated Lender will return to the Multicurrency
Agent any portion thereof previously distributed by the
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Multicurrency Agent to it. Each Multicurrency Syndicated
Lender's obligation to purchase such participating interests
shall be absolute and unconditional and shall not be affected by
any circumstance, including without limitation (i) any setoff,
counterclaim, recoupment, defense or other right that such
Multicurrency Syndicated Lender or any other Person may have
against the Multicurrency Swing Line Lender requesting such
purchase or any other Person for any reason whatsoever, (ii) the
occurrence or continuation of a Default or an Event of Default or
the termination of any of the Commitments, (iii) any adverse
change in the condition (financial or otherwise) of the
Multicurrency Borrowers, Interface, any of its Consolidated
Subsidiaries, or any other Person, (iv) any breach of this
Agreement by the Multicurrency Borrower, Interface, or any other
Lender, or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing;
PROVIDED, HOWEVER, that no such obligation shall exist (A) to the
extent that the aggregate Multicurrency Swing Line Loans were
advanced in excess of the Multicurrency Swing Line Commitment
then in effect, or (B) with respect to any Multicurrency Swing
Line Loan where the Multicurrency Swing Line Lender actually
advanced to the applicable Borrower net proceeds from the
Multicurrency Swing Line Loan (and therefore was not refunding a
previous Multicurrency Swing Line Loan) at a time when (x) the
Multicurrency Swing Line Lender had actual knowledge that an
Event of Default had occurred and then existed, and (y) the
Required Lenders had not agreed to waive such Event of Default
for purposes of funding such Multicurrency Swing Line Loan.
Section 3.06. MULTICURRENCY BID RATE LOANS.
(a) Subject to and upon the terms and conditions
herein set forth (including the limitation set forth in Section
3.01), a Multicurrency Borrower may, as set forth in this Section
3.06, request the Multicurrency Syndicated Lenders, from time to
time prior to the Maturity Date, to make offers to make
Multicurrency Bid Rate Loans in U.S. Dollars to the Multicurrency
Borrower. Each Multicurrency Syndicated Lender may, but shall
have no obligation to, make such offers and the Multicurrency
Borrower may, but shall have no obligation to, accept any such
offers in the manner set forth in this Section 3.06. The
Multicurrency Borrowers shall be entitled to repay and reborrow
Multicurrency Bid Rate Loans in accordance with the provisions,
and subject to the limitation set forth herein (including the
limitations set forth in Section 3.01).
(b) The aggregate principal amount of each
Multicurrency Bid Rate Borrowing requested by a Multicurrency
Borrower shall be an amount not less than $5,000,000 or a greater
integral multiple of $1,000,000. At no time shall the number of
Borrowings outstanding under this Section 3.06 and Section 3.02
exceed eight.
(c) Multicurrency Bid Rate Loans may be made to the
Multicurrency Borrowers in accordance with the procedures set
forth in this Section 3.06(c).
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(1) Whenever a Multicurrency Borrower wishes to
request offers to make Multicurrency Bid Rate Loans
under this Section 3.06, the Multicurrency Borrower, or
Interface acting on behalf of the Multicurrency
Borrower, shall transmit to the Multicurrency Agent by
facsimile transmission a request for such offers (each
a "Multicurrency Bid Rate Quote Request") so as to be
received by the Multicurrency Agent not later than
10:00 a.m. (Eastern time) on the third Business Day
immediately preceding the date of the proposed
Multicurrency Bid Rate Borrowing, specifying (i) the
date of the Multicurrency Bid Rate Borrowing (which
shall be a Business Day), (ii) the aggregate principal
amount of the Multicurrency Bid Rate Borrowing, and
(iii) the Interest Period to be applicable thereto.
The Multicurrency Borrower may request offers to make
Multicurrency Bid Rate Loans for more than one Interest
Period in a single Multicurrency Bid Rate Quote
Request. A Multicurrency Bid Rate Quote Request that
does not conform substantially to the format of EXHIBIT
R hereto shall be rejected, and the Multicurrency Agent
shall promptly notify the Multicurrency Borrower, or
Interface on behalf of the Multicurrency Borrower, of
such rejection by facsimile transmission. No
Multicurrency Bid Rate Quote Request shall be given
within ten Business Days after any other Multicurrency
Bid Rate Quote Request has been transmitted to the
Multicurrency Syndicated Lenders pursuant to Section
3.06(c)(2).
(2) Promptly upon receipt of a Multicurrency Bid
Rate Quote Request that is not rejected pursuant to
Section 3.06(c)(1), the Multicurrency Agent shall
transmit to each of the Multicurrency Syndicated
Lenders by facsimile transmission an invitation by the
Multicurrency Borrower to each Multicurrency Syndicated
Lender to submit Multicurrency Bid Rate Quotes offering
to make Multicurrency Bid Rate Loans in accordance with
this Section 3.06 (each an "Invitation for
Multicurrency Bid Rate Quotes") substantially in the
form of EXHIBIT S hereto.
(3) Each Multicurrency Syndicated Lender may, in
its sole discretion, submit a Multicurrency Bid Rate
Quote containing an offer or offers to make
Multicurrency Bid Rate Loans in response to any
Invitation for Multicurrency Bid Rate Quotes in
accordance with the following procedures:
(A) Each Multicurrency Bid Rate Quote must
comply with the requirements of this Section
3.06(c)(3) and must be submitted to the
Multicurrency Agent by facsimile transmission at
its offices specified herein not later than (x)
9:45 a.m. (Eastern time) in the case of the
Multicurrency Agent, and (y) 10:00 a.m. (Eastern
time) in the case of each other Multicurrency
Syndicated Lender, on the second Business Day
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immediately preceding the date of the proposed
Multicurrency Bid Rate Borrowing or, in any such
case upon reasonable prior notice to the
Multicurrency Syndicated Lenders, such other time
and date as the applicable Multicurrency Borrower,
or Interface acting on behalf of the Multicurrency
Borrower, and the Multicurrency Agent may agree,
PROVIDED THAT the Multicurrency Agent shall always
be required to submit its Multicurrency Bid Rate
Quotes not less than 15 minutes prior to the other
Multicurrency Syndicated Lenders). Subject to
Articles VI and X, any Multicurrency Bid Rate
Quotes so made shall be irrevocable except with
the written consent of the Multicurrency Agent
given on the instructions of the Multicurrency
Borrower, or Interface acting on behalf of the
Multicurrency Borrower.
(B) Each Multicurrency Bid Rate Quote shall
in any case specify (i) the date of the proposed
Multicurrency Bid Rate Borrowing, which shall be
the same as that set forth in the applicable
Invitation for Multicurrency Bid Rate Quotes, (ii)
the principal amount of the Multicurrency Bid Rate
Loan for which each such offer is being made,
which principal amount (x) may be greater than,
less than or equal to the Multicurrency Syndicated
Loan Commitment of the quoting Multicurrency
Syndicated Lender, and (y) may not exceed the
principal amount of Multicurrency Bid Rate Loans
for which offers were requested, (iii) the minimum
or maximum amount, if any, of the Multicurrency
Bid Rate Loan which may be accepted by the
Multicurrency Borrower, (iv) the applicable
Interest Period, and (v) the identity of the
quoting Multicurrency Syndicated Lender.
(C) The Multicurrency Agent shall reject any
Multicurrency Bid Rate Quote that (i) is not
substantially in the form of EXHIBIT T hereto or
does not specify all of the information required
by Section 3.06(c)(3)(B), (ii) contains
qualifying, conditional or similar language, other
than any such language contained in EXHIBIT T
hereto, (iii) proposes terms other than or in
addition to those set forth in the applicable
Invitation for Multicurrency Bid Rate Quotes, or
(iv) arrives after the time set forth in Section
3.06(c)(3)(A).
(D) If any Multicurrency Bid Rate Quote
shall be rejected pursuant to Section
3.06(c)(3)(C), then the Multicurrency Agent shall
notify the relevant Multicurrency Syndicated
Lender of such rejection as soon as practicable.
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If any Multicurrency Syndicated Lender shall elect not
to submit a Multicurrency Bid Rate Quote, such
Multicurrency Bid Rate Lender shall so notify the
Multicurrency Agent not later than 10:00 a.m. (Eastern
time) on the second Business Day immediately preceding
the date of the proposed Multicurrency Bid Rate
Borrowing, and such Multicurrency Syndicated Lender
shall not be obligated to, and shall not, make any
Multicurrency Bid Rate Loan as part of such
Multicurrency Bid Rate Borrowing; PROVIDED, HOWEVER,
that the failure of any Multicurrency Syndicated Lender
to give such notice shall not cause it to be obligated
to make any Multicurrency Bid Rate Loan as part of such
Borrowing.
(4) Subject to its timely receipt of one or more
Multicurrency Bid Rate Quotes in the manner described
in Section 3.06(c)(3), the Multicurrency Agent shall
notify the Multicurrency Borrower, or Interface acting
on behalf of the Multicurrency Borrower, as soon as
practicable (but in any event using reasonable efforts
to effect such notice prior to 10:45 a.m. (Eastern
time) on the second Business Day immediately preceding
the date of the proposed Multicurrency Bid Rate
Borrowing) as to the terms (i) of any Multicurrency Bid
Rate Quote submitted by a Multicurrency Syndicated
Lender that is in accordance with Section 3.06(c) and
(ii) of any Multicurrency Bid Rate Quote that is in
accordance with Section 3.06(c) and amends, modifies or
is otherwise inconsistent with a previous Multicurrency
Bid Rate Quote submitted by such Multicurrency
Syndicated Lender with respect to the same
Multicurrency Bid Rate Quote Request. Any such
subsequent Multicurrency Bid Rate Quote shall be
disregarded by the Multicurrency Agent unless such
subsequent Multicurrency Bid Rate Quote specifically
states that it is submitted solely to correct a
manifest error in such previous Multicurrency Bid Rate
Quote. The Multicurrency Agent's notice to the
Multicurrency Borrower, or Interface acting on behalf
of the Multicurrency Borrower, shall specify the
aggregate principal amount of Multicurrency Bid Rate
Loans for which offers have been received for each
Interest Period specified in the related Multicurrency
Bid Rate Quote Request and the respective principal
amounts and Multicurrency Bid Rates, as the case may
be, so offered.
(5) Subject to receipt of the notice from the
Multicurrency Agent referred to in Section 3.06(c)(4),
not later than 11:00 a.m. (Eastern time) on the second
Business Day immediately preceding the date of the
proposed Multicurrency Bid Rate Borrowing, the
Multicurrency Borrower, or Interface acting on behalf
of the Multicurrency Borrower, shall notify the
Multicurrency Agent of the Multicurrency Borrower's
acceptance or rejection of the offer so notified to it
pursuant to Section 3.06(c)(4); PROVIDED, HOWEVER, that
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the failure to give such notice to the Multicurrency
Agent shall be deemed to be a rejection by the
Multicurrency Borrower of all such offers. In the case
of acceptance, such notice (each a "Multicurrency Bid
Rate Acceptance Notice") shall specify the aggregate
principal amount of offers for each Interest Period
that are accepted. The Multicurrency Borrower may
accept or reject any Multicurrency Bid Rate Quote in
whole or in part (subject to the terms of Section
3.06(b); PROVIDED THAT (i) the aggregate principal
amount of each Multicurrency Bid Rate Advance may not
exceed the applicable amount set forth in the related
Multicurrency Bid Rate Quote Request, (ii) acceptance
of offers may only be made in the order of ascending
Multicurrency Bid Rates, (iii) the Multicurrency
Borrower may not accept any offer of the type described
in Section 3.06(c)(3)(C) or that otherwise fails to
comply with the requirements of this Agreement for the
purpose of obtaining a Multicurrency Bid Rate Loan
under this Agreement, and (iv) any such acceptance
shall constitute its irrevocable request to borrow the
aggregate principal amount so accepted.
(6) If offers are made by two or more
Multicurrency Syndicated Lenders with the same
Multicurrency Bid Rates for a greater aggregate
principal amount than the amount in respect of which
offers are permitted to be accepted for the related
Interest Period, the principal amount of Multicurrency
Bid Rate Loans in respect of which such offers are
accepted shall be allocated by the Multicurrency Agent
among such Multicurrency Syndicated Lenders as nearly
as possible (in such multiples as the Multicurrency
Agent may deem appropriate) in proportion to the
aggregate principal amount of such offers; PROVIDED,
HOWEVER, that no Multicurrency Syndicated Lender shall
be allocated a portion of any Multicurrency Bid Rate
Advance which is less than the minimum amount which
such Multicurrency Syndicated Lender has indicated that
it is willing to accept. Allocations by the
Multicurrency Agent of the amounts of Multicurrency Bid
Rate Advances shall be conclusive in the absence of
manifest error. The Multicurrency Agent shall
promptly, but in any event by 12:00 noon (Eastern time)
on the second Business Day immediately preceding the
date of the proposed Multicurrency Bid Rate Borrowing,
notify each Multicurrency Syndicated Lender of its
receipt of a Multicurrency Bid Rate Acceptance Notice
and the aggregate principal amount of each
Multicurrency Bid Rate Advance allocated to each
participating Multicurrency Syndicated Lender.
(d) No later than 1:00 p.m. (Eastern time) on the date
of each Multicurrency Bid Rate Borrowing, each Multicurrency Bid
Rate Lender participating in such Borrowing will make available
its portion of such Borrowing in immediately available funds at
the Payment Office of the Multicurrency Agent. The Multicurrency
Agent will make available to the Multicurrency Borrower in U.S.
Dollars the aggregate of the amounts (if any) so made available
by the Multicurrency Bid Rate Lenders to the Multicurrency Agent
in a timely manner by crediting such amounts to the Multicurrency
Borrower's demand deposit account maintained with the
Multicurrency Agent. In the event that the Multicurrency Bid
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Rate Lenders do not make such amounts available to the
Multicurrency Agent by the time prescribed above, but such amount
is received later that day, such amount may be credited to the
Multicurrency Borrower in the manner described in the preceding
sentence on the next Business Day (with interest on such amount
to begin accruing hereunder on such next Business Day).
(e) The Multicurrency Borrowers' obligations to pay
the principal of, and interest on, the Multicurrency Bid Rate
Loans to each Multicurrency Bid Rate Lender shall be evidenced by
the records of the Multicurrency Agent and such Multicurrency Bid
Rate Lender and by the Multicurrency Bid Rate Notes payable to
such Multicurrency Bid Rate Lender (or the assignor of such
Multicurrency Bid Rate Lender) completed in conformity with this
Agreement.
(f) All outstanding principal amounts under each
Multicurrency Bid Rate Loan shall be due and payable in full (i)
on the expiration of the Interest Period applicable to such
Multicurrency Bid Rate Loan, and (ii) on the Maturity Date.
Section 3.07. USE OF PROCEEDS. The proceeds of the
Multicurrency Syndicated Loans, Multicurrency Swing Line Loans,
and Multicurrency Bid Rate Loans shall be used as working capital
and for other general corporate purposes of the applicable
Multicurrency Borrower and its Consolidated Subsidiaries.
Section 3.08. REALLOCATION OF MULTICURRENCY SYNDICATED
LOAN COMMITMENTS ON THE CLOSING DATE.
(a) On the Closing Date, the aggregate Multicurrency
Syndicated Loan Commitments of the Multicurrency Lenders shall be
reallocated as a result of increases or decreases, as the case
may be, in Multicurrency Syndicated Loan Commitments by certain
of the Multicurrency Lenders. After giving effect to the
foregoing actions, the Multicurrency Syndicated Loan Commitments
of the Multicurrency Lenders shall be as set forth on the
signature pages to this Agreement. On the Closing Date, all
outstanding Multicurrency Syndicated Loans that have been
borrowed or previously continued or converted prior to the
Closing Date shall be repaid in full, together with all interest
accrued and unpaid thereon through the date of such prepayment
occurring and all amounts required to be paid pursuant to Section
4.12 as a result of such prepayment occurring on a date other
than the last day of an Interest Period. All Borrowings of
Multicurrency Syndicated Loans pursuant to Section 3.02
(including, without limitation, all Borrowings made on the
Closing Date to prepay all Multicurrency Syndicated Loans then
outstanding) and all continuations and conversions of outstanding
Multicurrency Syndicated Loans pursuant to Section 3.02 occurring
after the Closing Date shall be made on the basis of the revised
Multicurrency Syndicated Loan Commitments as provided in this
Agreement. All Multicurrency Bid Rate Loans outstanding on the
Closing Date and scheduled to mature after the Closing Date shall
continue to remain outstanding in accordance with their
respective terms and shall not be repaid or otherwise affected by
the transactions described in this Section 3.08.
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(b) The Borrowers' respective obligations to pay the
principal of, and interest on, all Multicurrency Syndicated Loans
under the Multicurrency Syndicated Notes being executed and
delivered on the Closing by the Borrowers shall be evidenced by
the records of the Multicurrency Agent and each such Lender and
by such Multicurrency Syndicated Notes payable to such Lender
completed in conformity with this Agreement.
(c) From and after the Closing Date, all references in
this Agreement to the Multicurrency Syndicated Loan Commitments
shall be deemed to include the Multicurrency Syndicated Loan
Commitments as reallocated by this Section 3.08 (subject,
however, to subsequent increases or decreases from time to time
pursuant to the provisions of this Agreement).
Section 3.09. ADDITIONAL MULTICURRENCY BORROWERS. The
parties hereto agree that a Foreign Subsidiary that is wholly
owned by Interface (except for directors' qualifying shares or
other nominal ownership interests required to be held by third
parties under applicable foreign law), directly or indirectly,
that is not a Multicurrency Borrower as of the Closing Date may
enter into and become a party to this Agreement by executing and
delivering to the Co-Agents the following documents:
(a) An Additional Multicurrency Borrower
Agreement;
(b) Multicurrency Bid Rate Notes and
Multicurrency Syndicated Notes for all Multicurrency
Syndicated Lenders and a Multicurrency Swing Line Note for
the Multicurrency Swing Line Lender;
(c) Certificates and documents of the types
described in Section 5.01(e), (f), (g), (h), and (j);
(d) The favorable opinions of (i) Kilpatrick
Stockton LLP, United States counsel to the Foreign
Subsidiary, and (ii) counsel to the Foreign Subsidiary in
the jurisdiction where the Foreign Subsidiary is organized,
in each case covering the matters included in the opinions
described in Section 5.01(q) addressed to the Co-Agents and
each of the Lenders, and covering such other matters as
either Co-Agent or any Lender may reasonably request; and
(e) Forms, certificates, and other documents
satisfactory to each of the Co-Agents and Multicurrency
Syndicated Lenders, establishing that each of the Co-Agents
and the Multicurrency Syndicated Lenders, on the date of
delivery thereof, is entitled to receive payments of
principal, interest and fees for the account of its
respective Lending Office under this Agreement and the Notes
without deduction for and free from withholding of any
income taxes imposed by the jurisdiction of organization of
the Foreign Subsidiary.
Upon satisfaction of the foregoing requirements, such
Foreign Subsidiary shall become a Multicurrency Borrower
hereunder with the same force and effect as if originally
named as a Multicurrency Borrower herein. The execution and
delivery of an Additional Multicurrency Borrower Agreement
shall not require the consent of any other Borrower
hereunder. The rights and obligations of each Borrower
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hereunder shall remain in full force and effect
notwithstanding the addition of any new Multicurrency
Borrower as a party to this Agreement.
ARTICLE IV.
GENERAL LOAN TERMS
Section 4.01. FUNDING NOTICES. Without in any way
limiting each Borrower's obligation to confirm in writing any
telephonic notice, each Co-Agent may act without liability upon
the basis of telephonic notice believed by such Co-Agent in good
faith to be from the respective Borrower, or from Interface
acting on behalf of any other Borrower, prior to receipt of
written confirmation. In each such case, each Borrower hereby
waives the right to dispute such Co-Agent's record of the terms
of such telephonic notice.
Section 4.02. DISBURSEMENT OF FUNDS.
(a) Unless the Appropriate Co-Agent shall have been
notified by any Lender prior to the date of a Borrowing that such
Lender does not intend to make available to the Appropriate
Co-Agent such Lender's portion of the Borrowing to be made on
such date, the Appropriate Co-Agent may assume that such Lender
has made such amount available to the such Co-Agent on such date
and such Co-Agent may make available to the respective Borrower a
corresponding amount. If such corresponding amount is not in
fact made available to the Appropriate Co-Agent by such Lender on
the date of Borrowing, the Appropriate Co-Agent shall be entitled
to recover such corresponding amount on demand from such Lender
together with interest at the customary rate set by the
Appropriate Co-Agent for the correction of errors among banks in
the applicable Agreed Currency. If such Lender does not pay such
corresponding amount forthwith upon the Appropriate Co-Agent's
demand therefor, the Appropriate Co-Agent shall promptly notify
the respective Borrower, and such Borrower shall immediately pay
such corresponding amount to the Appropriate Co-Agent together
with interest at the rate specified for the Borrowing which
includes such amount paid. Nothing in this subsection shall be
deemed to relieve any Lender from its obligation to fund its
Commitments hereunder or to prejudice any rights which any
Borrower may have against any Lender as a result of any default
by such Lender hereunder.
(b) All Borrowings under the Domestic Syndicated Loan
Commitments and the Multicurrency Syndicated Loan Commitments
shall be loaned by those Lenders participating in such Facilities
on the basis of their Pro Rata Share of the Domestic Syndicated
Loan Commitments or Multicurrency Syndicated Loan Commitments, as
the case may be. No Lender shall be responsible for any default
by any other Lender in its obligations hereunder, and each Lender
shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fund
its Commitments hereunder.
Section 4.03. INTEREST.
(a) Interface agrees to pay interest in respect of all
unpaid principal amounts of the Domestic Revolving Loans from the
respective dates such principal amounts were advanced to maturity
(whether by acceleration, notice of prepayment or otherwise) at
rates per annum equal to the rates indicated below as applicable
to outstanding Advances in accordance with the terms hereof:
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(i) For a Base Rate Advance--The Base Rate in ef-
fect from time to time;
(ii) For a Eurodollar Advance--The relevant
Adjusted LIBO Rate PLUS the Applicable Margin;
(iii) For a Domestic Transaction Rate Advance--The
relevant Domestic Transaction Rate quoted by the
Domestic Swing Line Lender and accepted by Interface
pursuant to Section 2.05(c); and
(iv) For a Domestic Bid Rate Advance--The relevant
Accepted Domestic Bid Rate pursuant to Section
2.06(c)(5).
(b) Each Multicurrency Borrower agrees to pay interest
in respect of all unpaid principal amounts of the Multicurrency
Revolving Loans made to such Multicurrency Borrower from the
respective dates such principal amounts were advanced to maturity
(whether by acceleration, notice of prepayment or otherwise) at
rates per annum equal to the rates indicated below as applicable
to outstanding Advances in accordance with the terms hereof:
(i) For a Base Rate Advance--the Base Rate in ef-
fect from time to time;
(ii) For a Eurocurrency Advance--The relevant Ad-
justed LIBO Rate (or Adjusted Special LIBO Rate in the
case of Eurocurrency Advances not being repaid, contin-
ued or converted at the expiration of an Interest
Period as provided in Section 3.02(e)) PLUS the
Applicable Margin;
(iii) For a Multicurrency Transaction Rate Advance-
-The relevant Multicurrency Transaction Rate quoted by
the Multicurrency Swing Line Lender and accepted by or
on behalf of the applicable Multicurrency Borrower
pursuant to Section 3.05(c); and
(iv) For a Multicurrency Bid Rate Advance--The
relevant Accepted Multicurrency Bid Rate pursuant to
Section 3.06(c)(5).
(c) Overdue principal and, to the extent not
prohibited by applicable law, overdue interest, in respect of the
Domestic Revolving Loans and Multicurrency Revolving Loans, and
all other overdue amounts owing hereunder, shall bear interest
from each date that such amounts are overdue:
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(i) in the case of overdue principal and interest
with respect to Multicurrency Revolving Loans
outstanding as Eurocurrency Advances (other than in
U.S. Dollars), at the Adjusted Special LIBO Rate PLUS
the Applicable Margin and an additional one and one-
half percent (12%) per annum;
(ii) in the case of overdue principal and interest
with respect to all other Loans outstanding as LIBOR
Advances (in U.S. Dollars), Domestic Bid Rate Advances,
Domestic Transaction Rate Advances (to the extent
outstanding as Fixed Rate Advances), Multicurrency Bid
Rate Advances, and Multicurrency Transaction Rate
Advances (to the extent outstanding as Fixed Rate
Advances), at the rate otherwise applicable for the
then-current Interest Period PLUS an additional one and
one-half percent (12%) per annum; thereafter at the
rate in effect for Base Rate Advances pursuant to
Section 4.03(b)(i) (in the case of Eurocurrency
Advances (in Dollars), Multicurrency Bid Rate Advances,
and Multicurrency Transaction Rate Advances under the
Multicurrency Revolving Loans) or Section 4.03(a)(i)
(in the case of all such other Advances) PLUS an
additional one and one-half percent (12%) per annum;
and
(iii) in the case of overdue principal and interest
with respect to all other Loans outstanding as Base
Rate Advances and Domestic Transaction Rate Advances
and Multicurrency Transaction Rate Advances (to the
extent not outstanding as Fixed Rate Advances), and all
other Obligations hereunder (other than Loans), at a
rate equal to the applicable Base Rate PLUS an
additional one and one-half percent (12%) per annum;
PROVIDED that no Loan shall bear interest after maturity (whether
by acceleration, notice of prepayment or otherwise) at a rate per
annum less than one and one-half percent (1 2%) per annum in
excess of the rate of interest applicable thereto at maturity.
(d) Interest on each Loan shall accrue from and
including the date of such Loan to but excluding the date of any
repayment thereof; PROVIDED that, if a Loan is repaid on the same
day made, one day's interest shall be paid on such Loan.
Interest on all outstanding Base Rate Advances shall be payable
quarterly in arrears on the last calendar day of each fiscal
quarter of Interface in each year. Interest on all outstanding
Fixed Rate Advances, Domestic Transaction Rate Advances, and
Multicurrency Transaction Rate Advances shall be payable on the
last day of each Interest Period applicable thereto, and, in the
case of Fixed Rate Advances having an Interest Period in excess
of 90 days (in the case of Domestic Bid Rate Advances or
Multicurrency Bid Rate Advances, if quoted on the basis of 180
days) or in excess of three months (in the case of LIBOR
Advances, or Domestic Bid Rate Advances or Multicurrency Bid Rate
Advances if quoted on the basis of six months), on each day which
occurs every 90 days or 3 months, as the case may be, after the
initial date of such Interest Period. Interest on all Loans
shall be payable on any conversion of any Advance comprising such
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Loans into an Advance of another Type, prepayment (on the amount
prepaid), at maturity (whether by acceleration, notice of
prepayment or otherwise) and, after maturity, on demand.
(e) The Appropriate Co-Agent, upon determining the
Adjusted LIBO Rate or Adjusted Special LIBO Rate for any Interest
Period, shall promptly notify by telephone (confirmed in writing)
or in writing the respective Borrower and the other Lenders
participating in the respective Facility thereof. Any such
determination shall, absent manifest error, be final, conclusive
and binding for all purposes.
Section 4.04. INTEREST PERIODS. In connection with
the making or continuation of, or conversion into, each Borrowing
of Fixed Rate Advances, Domestic Transaction Rate Advances and
Multicurrency Transaction Rate Advances, the respective Borrower
shall select an interest period (each an "Interest Period") to be
applicable to such Advances, which Interest Period shall (x) in
the case of Domestic Bid Rate Advances or Multicurrency Bid Rate
Advances, if quoted on the basis of such periods, be either a 30,
60, 90 or 180 day period, (y) in the case of LIBOR Advances,
Domestic Bid Rate Advances or Multicurrency Bid Rate Advances, if
quoted on the basis of such periods, be either a 1, 2, 3 or 6
month period, and (z) in the case of Domestic Transaction Rate
Advances or Multicurrency Transaction Rate Advances, be a period
up to ten days as requested by or on behalf of the respective
Borrower and accepted by the Domestic Swing Line Lender or
Multicurrency Swing Line Lender, as the case may be; PROVIDED
THAT:
(i) The initial Interest Period for any Borrowing
consisting of any such Advance shall commence on the
date of such Borrowing (including the date of any
conversion from a Borrowing consisting of an Advance of
another Type) and each Interest Period occurring
thereafter in respect of such Borrowing shall commence
on the day on which the next preceding Interest Period
expires;
(ii) If any Interest Period would otherwise expire
on a day which is not a Business Day, such Interest Period
shall expire on the next succeeding Business Day,
PROVIDED that if any Interest Period in respect of a
LIBOR Advance would otherwise expire on a day that is
not a Business Day but is a day of the month after
which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding
Business Day;
(iii) Any Interest Period in respect of a LIBOR
Advance which begins on a day for which there is no nu-
merically corresponding day in the calendar month at
the end of such Interest Period shall, subject to part
(iv) below, expire on the last Business Day of such
calendar month;
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(iv) No Interest Period shall extend beyond any
date upon which any prepayment is required to be made
in the Domestic Revolving Loans or Multicurrency
Revolving Loans, unless the aggregate principal amount
of Multicurrency Revolving Loans or Domestic Revolving
Loans, as the case may be, that are not Fixed Rate
Advances, or that have Interest Periods which will
expire on or before the date of the respective payment
or prepayment, is equal to or in excess of the amount
of any such principal payments or prepayments to be
made;
(v) The Interest Period for a Fixed Rate Advance
which is converted pursuant to Section 4.09(b) shall
commence on the date of such conversion and shall
expire on the date on which the Interest Periods for
the Fixed Rate Advances of the other Lenders which were
not converted expires; and
(vi) No Interest Period with respect to the Loans
shall extend beyond the Maturity Date.
Section 4.05. FEES.
(a) On the Closing Date, Interface shall pay to the
Domestic Agent, for the benefit of each Lender, a closing fee in
an amount equal to each Lender's Total Commitment as in effect on
the Closing Date MULTIPLIED BY .075% (7.5 basis points).
(b) Interface shall pay to the Domestic Agent, for the
account of and distribution of the respective Pro Rata Shares to
the Domestic Syndicated Lenders, a commitment fee in respect of
the Domestic Syndicated Loan Commitments computed at a per annum
rate equal to the Applicable Commitment Fee Rate, for each fiscal
quarter, calculated on the average daily unused portion of the
Domestic Syndicated Loan Commitments of such Domestic Syndicated
Lenders, such fee being payable quarterly in arrears on the last
calendar day of each fiscal quarter of Interface, and on the
Maturity Date. If any Domestic Letters of Credit are or were
outstanding at any time during such fiscal quarter, the average
daily Aggregate Domestic L/C Outstandings thereunder shall
constitute a usage of the Domestic Syndicated Loan Commitments
(thereby reducing the unused portion of the Domestic Syndicated
Loan Commitments by a corresponding amount) for purposes of
calculating such commitment fee. Solely for purposes of
calculating the fees due under this Section 4.05(b), (i) no
Domestic Bid Rate Loans shall constitute a usage of any of the
Domestic Syndicated Loan Commitments of the Domestic Syndicated
Lenders, and (ii) the aggregate principal amount of the Domestic
Swing Line Loans from time to time outstanding shall constitute a
usage of the Domestic Syndicated Loan Commitment only with
respect to the Domestic Swing Line Lender.
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(c) The Multicurrency Borrowers shall pay to the
Multicurrency Agent, for the account of and distribution of the
respective Pro Rata Shares to the Multicurrency Syndicated
Lenders, a commitment fee in respect of the Multicurrency
Syndicated Loan Commitments computed at a per annum rate equal to
the Applicable Commitment Fee Rate, for each fiscal quarter,
calculated on the average daily unused portion of the
Multicurrency Syndicated Loan Commitments of such Multicurrency
Syndicated Lenders (based on the Dollar Equivalent of such unused
portion and calculated in the manner set forth in the second
sentence of Section 3.02(a)), such fee being payable quarterly in
arrears on the last calendar day of each fiscal quarter of
Interface, and on the Maturity Date. If any Multicurrency
Letters of Credit are or were outstanding at any time during such
fiscal quarter, the average daily Aggregate Multicurrency L/C
Outstandings thereunder shall constitute a usage of the
Multicurrency Syndicated Loan Commitments (thereby reducing the
unused portion of the Multicurrency Syndicated Loan Commitments
by a corresponding amount) for purposes of calculating such
commitment fee. Solely for purposes of calculating the fees due
under this Section 4.05(c), (i) no Multicurrency Bid Rate Loans
shall constitute a usage of any of the Multicurrency Syndicated
Loan Commitments of the Multicurrency Syndicated Lenders, and
(ii) the aggregate principal amount of the Multicurrency Swing
Line Loans from time to time outstanding shall constitute a usage
of the Multicurrency Syndicated Loan Commitment only with respect
to the Multicurrency Swing Line Lender.
(d) The Borrowers shall pay to the Domestic Agent and
Multicurrency Agent, as the case may be, an administration fee
equal to $500 for each Domestic Bid Rate Quote Request and
Multicurrency Bid Rate Quote Request, as the case may be,
transmitted by a Borrower to such Agent pursuant to Section
2.06(c) or 3.06(c). Such administration fees shall be payable in
arrears on the last calendar day of each fiscal quarter of
Interface and on the Maturity Date, for any period then ending
for which such fees, if any, shall not have been previously paid.
(e) The Borrowers shall pay to each Co-Agent a
quarterly administrative fee, payable in advance in the
respective amount agreed in writing by Interface with respect to
such Co-Agent.
Section 4.06. VOLUNTARY PREPAYMENTS OF BORROWINGS.
(a) The Borrowers may, at their option, prepay Borrow-
ings consisting of Base Rate Advances, Domestic Transaction Rate
Advances and Multicurrency Transaction Rate Advances (in either
case to the extent not outstanding as Fixed Rate Advances), at
any time in whole, or from time to time in part, in amounts
aggregating $250,000 or any greater integral multiple of $1000,
by paying the principal amount to be prepaid together with
interest accrued and unpaid thereon to the date of prepayment.
Those Borrowings consisting of Fixed Rate Advances may be
prepaid, at the applicable Borrower's option, in whole, or from
time to time in part, in the respective minimum amounts and
multiples set forth in Sections 2.02(b), 2.05(b), 2.06(b),
3.02(b), 3.05(b), and 3.06(b), as applicable to the Type of
Advance and the applicable Agreed Currency, by paying the
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principal amount to be prepaid, together with interest accrued
and unpaid thereon to the date of prepayment, and all
compensation payments pursuant to Section 4.12 if such prepayment
is made on a date other than the last day of an Interest Period
applicable thereto. Each such optional prepayment shall be
applied in accordance with Section 4.06(c) below.
(b) Each Borrower desiring to make a prepayment
pursuant to Section 4.06(a) shall give written notice (or tele-
phonic notice confirmed in writing) to the Appropriate Co-Agent
of any intended prepayment (i) not less than one Business Day
prior to any prepayment of Base Rate Advances, Domestic
Transaction Rate Advances or Multicurrency Transaction Rate
Advances (to the extent outstanding as Fixed Rate Advances), and
(ii) not less than three Business Days prior to any prepayment of
LIBOR Advances, Domestic Bid Rate Advances, or Multicurrency Bid
Rate Advances. Such notice, once given, shall be irrevocable.
Upon receipt of such notice of prepayment, the Appropriate
Co-Agent shall promptly notify each Lender whose Advance consti-
tutes a portion of such Borrowing of the contents of such notice
and of such Lender's share of such prepayment.
(c) Each Borrower providing notice of prepayment
pursuant to Section 4.06(b) may designate the Types of Advances
and the specific Borrowings that are to be prepaid, PROVIDED THAT
(i) if any prepayment of Fixed Rate Advances of such Borrower
made pursuant to a single Borrowing shall reduce the outstanding
Advances made pursuant to such Borrowing to an amount less than
$1,000,000, such Borrowing shall immediately be converted into
Base Rate Advances; and (ii) each prepayment made pursuant to a
single Borrowing shall be applied pro rata among the Loans com-
prising such Borrowing. In the absence of a designation by the
respective Borrower, the Co-Agents shall, subject to the forego-
ing, make such designation in their sole discretion. All volun-
tary prepayments shall be applied to the payment of interest be-
fore application to principal and shall be applied against sched-
uled amortization payments in the inverse order of maturity.
Section 4.07. PAYMENTS, ETC.
(a) (i) Except as otherwise specifically provided
herein, all payments under this Agreement, the Letter of Credit
Agreement, and the other Credit Documents, other than the
payments specified in Section 4.07(a)(ii) below, shall be made
without defense, set-off or counterclaim to the Domestic Agent
not later than 11:00 A.M. (Eastern time) on the date when due and
shall be made in Dollars in immediately available funds at its
Payment Office.
(ii) Except as otherwise specifically provided herein,
all payments under this Agreement with respect to the
Multicurrency Revolving Loans and the fees payable to the
Multicurrency Agent pursuant to Section 4.05(c), (d) and (e), and
all reimbursement payments and fees in respect of Multicurrency
Letters of Credit, shall be made without defense, set-off or
counterclaim to the Multicurrency Agent at the applicable Payment
Office for the Agreed Currency not later than 11:00 A.M. (local
time in the City of the applicable Payment Office) on the date
when due and in immediately available funds in the applicable
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Agreed Currency, or at any other location as the Multicurrency
Agent may specify in writing to the Borrowers not later than Noon
(Eastern time) on the Business Day prior to the Business Day such
payment is due. All payments of principal and interest with
respect to the Multicurrency Syndicated Loans, and all
reimbursement payments and fees in respect of Multicurrency
Letters of Credit, shall be made in the Agreed Currency in which
the related Borrowing was made or Multicurrency Letter of Credit
was issued.
(b) (i) Any and all payments by the Borrowers
hereunder or under the Notes or the Letter of Credit Agreement
shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto,
EXCLUDING, in the case of each Lender, taxes imposed on or
measured by its net income, and franchise taxes and branch profit
taxes imposed on it (A) by the jurisdiction under the laws of
which such Lender is organized or any political subdivision
thereof and, in the case of each Lender, taxes imposed on or
measured by its net income, and franchise taxes and branch profit
taxes imposed on it, by the jurisdiction of such Lender's
appropriate Lending Office or any political subdivision thereof,
and (B) by a jurisdiction in which any payments are to be made by
any Borrower hereunder, other than the United States of America,
the United Kingdom, or The Netherlands or any political subdivi-
sion of any thereof, and that would not have been imposed but for
the existence of a connection between such Lender and the juris-
diction imposing such taxes (other than a connection arising as a
result of this Agreement or the transactions contemplated by this
Agreement), except in the case of taxes described in this
clause (B), to the extent such taxes are imposed as a result of a
change in the law or regulations of any jurisdiction or any
applicable treaty or regulations or in the official
interpretation of any such law, treaty or regulations by any
governmental authority charged with the interpretation or ad-
ministration thereof after the date of this Agreement (all such
excluded net income taxes, franchise taxes and branch profit
taxes collectively referred to as the "Excluded Taxes"; all such
non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being collectively referred to in
this Section 4.07(b) as "Taxes"). If any Borrower shall be
required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under any Note or the Letter of Credit
Agreement to any Lender, (x) the sum so payable shall be
increased by such amount (the "Gross-up Amount") as may be neces-
sary so that after making all required deductions (including de-
ductions with respect to Taxes owed by such Lender on the Gross-
up Amount payable under this Section 4.07(b)(i)) such Lender
receives an amount equal to the sum it would have received had no
such deductions been made, (y) such Borrower shall make such
deductions, and (z) such Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(ii) Each Borrower will indemnify each Lender for the full
amount of Taxes (together with any Taxes or Excluded Taxes owed
by such Lender applicable to the Gross-up Amount payable under
clause (x) of Section 4.07(b)(i) or on the indemnification pay-
ments made by a Borrower under this Section 4.07(b)(ii), but
without duplication thereof), and any liability (including
penalties, interest and expenses) arising therefrom or with
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respect thereto, whether or not such Taxes or such Excluded Taxes
were correctly or legally asserted, so as to compensate such
Lender for any loss, cost, expense or liability incurred as a
consequence of any such Taxes. Payment pursuant to such
indemnification shall be made within 10 Business Days from the
date such Lender makes written demand therefor.
(iii) Within 30 days after the date of any Borrower's
payment of Taxes, such Borrower will furnish to the relevant
Lender, at its appropriate Lending Office, the original or a
certified copy of a receipt evidencing payment thereof.
(iv) Each Lender that is a foreign Person (i.e., a Person
other than a United States Person as defined in the Internal Rev-
enue Code of 1986, as amended) hereby agrees that:
(A) it shall, prior to the time it becomes a Lender
hereunder, deliver to Interface:
(1) for each Lending Office located in the United
States of America, three (3) accurate and complete
signed originals of Internal Revenue Service Form 4224
or any successor thereto ("Form 4224"), and/or
(2) for each Lending Office located outside the
United States of America, three (3) accurate and com-
plete signed originals of Internal Revenue Service Form
1001 or any successor thereto ("Form 1001");
in each case indicating that such Lender, on the date of de-
livery thereof, is entitled to receive payments of
principal, interest and fees for the account of such Lending
Office under this Agreement, the Notes, and the Letter of
Credit Agreement free from withholding of United States
Federal income tax; PROVIDED, that if the Form 4224 or Form
1001, as the case may be, supplied by a Lender fails to
establish a complete exemption from United States
withholding tax as of the date such Lender becomes a Lender,
such Lender shall, within 15 days after a written request
from Interface, deliver to Interface the forms or other
documents necessary to establish a complete exemption from
United States withholding tax as of such date;
(B) if at any time such Lender changes its Lending Of-
fice or selects an additional Lending Office, it shall, at
the same time or reasonably promptly thereafter (but only to
the extent the forms previously delivered by it hereunder
are no longer effective) deliver to Interface in replacement
for the forms previously delivered by it hereunder:
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(1) for such changed or additional Applicable
Lending Office located in the United States of America,
three (3) accurate and complete signed originals of
Form 4224; or
(2) otherwise, three (3) accurate and complete
signed originals of Form 1001;
in each case indicating that such Lender is on the date of
delivery thereof entitled to receive payments of principal,
interest and fees for the account of such changed or ad-
ditional Lending Office under this Agreement, the Notes, and
the Letter of Credit Agreement free from withholding of
United States Federal income tax.
(v) Each Multicurrency Lender hereby agrees that:
(A) it shall, prior to the time it becomes a
Multicurrency Syndicated Lender hereunder, deliver to
Interface with respect to each of its Lending Offices, duly
completed forms, or other evidence reasonably satisfactory
to Interface, establishing that such Multicurrency
Syndicated Lender, on the date of delivery thereof, is
entitled to receive (i) payments of principal, interest and
fees for the account of such Lending Office under this
Agreement, the Notes and the Letter of Credit Agreement
without deduction and free from withholding of any income
taxes imposed by The Netherlands, and (ii) payments of fees
for the account of such Lending Office under this Agreement
and the Letter of Credit Agreement without deduction and
free from withholding of any income taxes imposed by the
United Kingdom; PROVIDED that if the forms or other evidence
supplied by the Multicurrency Syndicated Lender fail to
establish such a complete exemption from withholding tax of
The Netherlands, or such a complete exemption from
withholding tax of the United Kingdom with respect to
payment of fees hereunder, as of the date such Multicurrency
Syndicated Lender becomes a Multicurrency Syndicated Lender,
such Multicurrency Syndicated Lender shall, within fifteen
(15) days after a written request from Interface, deliver to
Interface the forms or other documents necessary to
establish such complete exemption from withholding tax as of
such date;
(B) it shall, as soon as practicable after the date of
this Agreement, file all appropriate forms and take other
appropriate action to obtain a certificate or other
appropriate document from the United Kingdom Inland Revenue
establishing that such Multicurrency Syndicated Lender, on
the date of delivery thereof, is entitled to receive
payments of principal and interest for the account of its
Lending Office under this Agreement, the Notes and the
Letter of Credit Agreement without deduction and free from
withholding of any income taxes imposed by the United
Kingdom; PROVIDED that if the forms supplied by the
Multicurrency Syndicated Lender fail to establish a complete
exemption from withholding tax of the United Kingdom as of
the date of delivery thereof, such Multicurrency Syndicated
Lender shall, within fifteen (15) days after a written
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request from Interface, deliver to Interface the forms or
other evidence reasonably satisfactory to Interface to
establish a complete exemption from withholding tax of the
United Kingdom as of such date; and
(C) if at any time the Multicurrency Syndicated Lender
changes its Lending Office or selects an additional Lending
Office, it shall, at the same time or reasonably promptly
thereafter (but only to the extent the forms previously
delivered by it hereunder are no longer effective), deliver
to Interface in replacement for the forms previously
delivered by it hereunder, such additional duly completed
forms establishing that such Multicurrency Syndicated Lender
is on the date of delivery thereof entitled to receive
payments of principal, interest and fees for the account of
such changed or additional Lending Office under this
Agreement free from withholding of United Kingdom or The
Netherlands income tax (to the extent such forms are
required under the laws of the relevant jurisdiction to es-
tablish such exemption).
(vi) In addition to the documents to be furnished pursuant
to Section 4.07(b)(iv) and (v), each Lender shall, promptly upon
the reasonable written request of Interface to that effect,
deliver to Interface such other accurate and complete forms or
similar documentation as such Lender is legally able to provide
and as may be required from time to time by any applicable law,
treaty, rule or regulation of any jurisdiction in order to
establish such Lender's tax status for withholding purposes or as
may otherwise be appropriate to eliminate or minimize any Taxes
on payments under this Agreement, the Notes, or the Letter of
Credit Agreement. Each Lender furnishing forms to Interface
pursuant to the requirements of Section 4.07(b)(iv) and (v), and
this clause (vi), shall furnish copies of such forms to the
Appropriate Co-Agent at the same time delivery of such forms is
made to Interface.
(vii) No Borrower shall be required to pay any amounts pur-
suant to Section 4.07(b)(i) or (ii) to any Lender for the account
of any Lending Office of such Lender in respect of any United
States withholding taxes payable hereunder (and a Borrower, if
required by law to do so, shall be entitled to withhold such
amounts and pay such amounts to the United States Government) if
the obligation to pay such additional amounts would not have
arisen but for a failure by such Lender to comply with its
obligations under Section 4.07(b)(iv), and such Lender shall not
be entitled to exemption from deduction or withholding of United
States Federal income tax in respect of the payment of such sum
by any Borrower hereunder for the account of such Lending Office
for, in each case, any reason other than a change in United
States law or regulations or any applicable tax treaty or
regulations or in the official interpretation of any such law,
treaty or regulations by any governmental authority charged with
the interpretation or administration thereof (whether or not hav-
ing the force of law) after the date such Lender became a Lender
hereunder.
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(viii) No Borrower shall be required to pay any amounts
pursuant to Section 4.07(b)(i) or (ii) to any Multicurrency
Syndicated Lender for the account of any Lending Office of such
Lender in respect of any United Kingdom or The Netherlands
withholding taxes payable hereunder (and a Borrower, if required
by law to do so, shall be entitled to withhold such amounts and
pay such amounts to the governments of the United Kingdom or The
Netherlands, as the case may be) if the obligation to pay such
additional amounts would not have arisen but for a failure by
such Multicurrency Syndicated Lender to comply with its
obligations under Section 4.07(b)(v), and such Multicurrency
Syndicated Lender shall not be entitled to exemption from de-
duction or withholding of United Kingdom or The Netherlands
income tax in respect of the payment of such sum by any Borrower
hereunder for the account of such Lending Office for, in each
case, any reason other than a change in United Kingdom or The
Netherlands law or regulations or any applicable tax treaty or
regulations or in the official interpretation of any such law,
treaty or regulations, by any governmental authority charged with
the interpretation or administration thereof (whether or not
having the force of law) after the date such Multicurrency
Syndicated Lender became a Multicurrency Syndicated Lender
hereunder.
(ix) Within sixty (60) days of the written request of Inter-
face, each Lender shall execute and deliver such certificates,
forms or other documents, which can be reasonably furnished con-
sistent with the facts and which are reasonably necessary to as-
sist in applying for refunds of Taxes remitted hereunder.
(x) Each Lender shall use reasonable efforts to avoid or
minimize any amounts which might otherwise be payable by
Borrowers pursuant to this Section 4.07(b), except to the extent
that a Lender determines that such efforts would be
disadvantageous to such Lender, as determined by such Lender and
which determination, if made in good faith, shall be binding and
conclusive on all parties hereto.
(xi) To the extent that the payment of any Lender's Taxes
by any Borrower gives rise from time to time to a Tax Benefit (as
hereinafter defined) to such Lender in any jurisdiction other
than the jurisdiction which imposed such Taxes, such Lender shall
pay to such Borrower the amount of each such Tax Benefit so
recognized or received. The amount of each Tax Benefit and,
therefore, payment to such Borrower will be determined from time
to time by the relevant Lender in its sole discretion, which
determination shall be binding and conclusive on all parties
hereto. Each such payment will be due and payable by such Lender
to such Borrower within a reasonable time after the filing of the
income tax return in which such Tax Benefit is recognized or, in
the case of any tax refund, after the refund is received;
PROVIDED, HOWEVER, if at any time thereafter such Lender is
required to rescind such Tax Benefit or such Tax Benefit is
otherwise disallowed or nullified, the Borrower shall promptly,
after notice thereof from such Lender, repay to Lender the amount
of such Tax Benefit previously paid to the Borrower and
rescinded, disallowed or nullified. For purposes of this
section, "Tax Benefit" shall mean the amount by which any
Lender's income tax liability for the taxable period in question
is reduced below what would have been payable had the Borrower
not been required to pay the Lender's Taxes. In case of any
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dispute with respect to the amount of any payment the Borrowers
shall have no right to any offset or withholding of payments with
respect to future payments due to any Lender under this
Agreement, the Notes, or the Letter of Credit Agreement.
(xii) Without prejudice to the survival of any other agree-
ment of the Borrowers hereunder, the agreements and obligations
of the Borrowers and the Lenders contained in this
Section 4.07(b) shall survive the termination of this Agreement
and the payment in full of the principal of, premium, if any,
interest, and fees hereunder and under the Notes and the Letter
of Credit Agreement.
(f) Subject to Section 4.04(ii), whenever any payment
to be made hereunder or under any Note or the Letter of Credit
Agreement shall be stated to be due on a day which is not a Busi-
ness Day, the due date thereof shall be extended to the next suc-
ceeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the applicable rate during
such extension.
(g) All computations of interest and fees hereunder
and under the Notes and the Letter of Credit Agreement shall be
made on the basis of a year of 360 days for the actual number of
days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are
payable (to the extent computed on the basis of days elapsed),
except that interest on Eurocurrency Advances outstanding in
British pounds sterling shall be computed on the basis of a year
of 365 days for the actual number of days. Interest on Base Rate
Advances, Domestic Transaction Rate Advances and Multicurrency
Transaction Rate Advances (to the extent not outstanding as Fixed
Rate Advances) shall be calculated based on the Base Rate,
Domestic Transaction Rate, or Multicurrency Transaction Rate, as
the case may be, from and including the date of such Loan to but
excluding the date of the repayment or conversion thereof.
Interest on Fixed Rate Advances shall be calculated as to each
Interest Period from and including the first day thereof to but
excluding the last day thereof. Each determination by either
Co-Agent of an interest rate or fee hereunder shall be made in
good faith and, except for manifest error, shall be final, con-
clusive and binding for all purposes.
(h) Payment by any Borrower to the Appropriate Co-
Agent in accordance with the terms of this Agreement or the
Letter of Credit Agreement shall, as to such Borrower, constitute
payment to the applicable Lenders under this Agreement or the
Letter of Credit Agreement, as the case may be.
Section 4.08. INTEREST RATE NOT ASCERTAINABLE, ETC.
In the event that the Appropriate Co-Agent shall have determined
(which determination shall be made in good faith and, absent
manifest error, shall be final, conclusive and binding upon all
parties) that on any date for determining the Adjusted LIBO Rate
or Adjusted Special LIBO Rate for any Interest Period, by reason
of any changes arising after the date of this Agreement affecting
the London interbank market or the Appropriate Co-Agent's
position in such markets, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis
provided for in the definition of Adjusted LIBO Rate or Adjusted
Special LIBO Rate, as the case may be, then, and in any such
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event, the Appropriate Co-Agent shall forthwith give notice (by
telephone confirmed in writing) to Interface and to the Lenders
of such determination and a summary of the basis for such
determination. Until the Appropriate Co-Agent notifies Interface
that the circumstances giving rise to the suspension described
herein no longer exist, (i) the obligations of the Lenders to
make or permit portions of the Domestic Syndicated Loans or
Multicurrency Syndicated Loans to remain outstanding as Adjusted
Special LIBO Rate or LIBOR Advances, as the case may be, shall be
suspended, (ii) such affected Advances, if made and outstanding
in an Eligible Currency, shall be converted to Advances in
Dollars based on the Dollar Equivalent amounts thereof as of the
date of such conversion, and (iii) all such affected Advances
shall bear the same interest as Base Rate Advances.
Section 4.09. ILLEGALITY.
(a) In the event that any Lender shall have determined
(which determination shall be made in good faith and, absent
manifest error, shall be final, conclusive and binding upon all
parties) at any time that the making or continuance of any Fixed
Rate Advance has become unlawful by compliance by such Lender in
good faith with any applicable law, governmental rule,
regulation, guideline or order (whether or not having the force
of law and whether or not failure to comply therewith would be
unlawful), then, in any such event, the Lender shall give prompt
notice (by telephone confirmed in writing) to Interface and to
the Appropriate Co-Agent of such determination and a summary of
the basis for such determination (which notice the Appropriate
Co-Agent shall promptly transmit to the other Lenders).
(b) Upon the giving of the notice to Interface
referred to in subsection (a) above, (i) each Borrower's right to
request and such Lender's obligation to fund portions of LIBOR
Advances shall be immediately suspended, and such Lender shall
make a Loan as part of the requested Borrowing consisting of a
LIBOR Advance as a Base Rate Advance, which Base Rate Advance
shall, for all other purposes, be considered part of such
Borrowing, and (ii) if the affected Fixed Rate Advance is then
outstanding, the applicable Borrower shall immediately, or if
permitted by applicable law, no later than the date permitted
thereby, upon at least one Business Day's written notice to the
Appropriate Co-Agent and the affected Lender, convert the
affected Lender's portion of such Advance into a Loan of a
different Type with an Interest Period ending on the date on
which the Interest Period applicable to the affected Fixed Rate
Advances expires, provided that if more than one Lender is
affected at any time, then all affected Lenders must be treated
the same pursuant to this Section 4.09(b).
Section 4.10. INCREASED COSTS.
(a) If, by reason of (x) after the date hereof, the
introduction of or any change (including, without limitation, any
change by way of imposition or increase of reserve requirements)
in or in the interpretation of any law or regulation, or (y) the
compliance with any guideline or request from any central bank or
other governmental authority or quasi-governmental authority
exercising control over banks or financial institutions generally
(whether or not having the force of law):
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(i) any Lender (or its applicable Lending Office)
shall be subject to any tax, duty or other charge with
respect to its portion of a Fixed Rate Advance or
Multicurrency Letter of Credit or its obligation to
fund a portion of a Fixed Rate Advance or Multicurrency
Letter of Credit, or the basis of taxation of payments
to any Lender of the principal of or interest on its
portion of a Fixed Rate Advance or Multicurrency Letter
of Credit, or with respect to any conversion of any
Multicurrency Syndicated Loan denominated in an Agreed
Currency other than the Euro into a Multicurrency
Syndicated Loan denominated in the Euro), or its
obligation to fund a portion of a Fixed Rate Advance or
Multicurrency Letter of Credit shall have changed
(except for changes in the tax on the overall net
income of such Lender or its applicable Lending Office
imposed by the jurisdiction in which such Lender's
principal executive office or applicable Lending Office
is located); or
(ii) any reserve (including, without limitation,
any imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of,
or credit extended by, any Lender's applicable Lending
Office shall be imposed or deemed applicable or any
other condition affecting its portion of a Fixed Rate
Advance or Multicurrency Letter of Credit or its
obligation to fund a portion of a Fixed Rate Advance or
Multicurrency Letter of Credit shall be imposed on any
Lender or its applicable Lending Office or the London
interbank market;
and as a result thereof there shall be any increase in the cost
to such Lender of agreeing to make or making, funding or
maintaining a portion of a Fixed Rate Advance (except to the
extent already included in the determination of the applicable
interest rate in effect for such portion of the Fixed Rate
Advance or Multicurrency Letter of Credit), or in converting any
Multicurrency Syndicated Loan denominated in an Agreed Currency
other than the Euro into a Multicurrency Syndicated Loan
denominated in the Euro, or there shall be a reduction in the
amount received or receivable by such Lender or its applicable
Lending Office, then the Borrowers shall from time to time
(subject, in the case of certain Taxes, to the applicable
provisions of Section 4.07(b)), upon written notice from and
demand by such Lender on Interface (with a copy of such notice
and demand to the Appropriate Co-Agent), pay to the Appropriate
Co-Agent for the account of such Lender, within five Business
Days after the date of such notice and demand, additional amounts
sufficient to indemnify such Lender against such increased cost.
A certificate as to the amount of such increased cost, submitted
to Interface and the Appropriate Co-Agent by such Lender in good
faith and accompanied by a statement prepared by such Lender
describing in reasonable detail the basis for and calculation of
such increased cost, shall, except for manifest error, be final,
conclusive and binding for all purposes.
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(b) If any Lender shall advise either Co-Agent that at
any time, because of the circumstances described in clauses (x)
or (y) in Section 4.10(a) or any other circumstances beyond such
Lender's reasonable control arising after the date of this Agree-
ment affecting such Lender or the London interbank market or such
Lender's position in such market, the Adjusted LIBO Rate or the
Adjusted Special LIBO Rate, as the case may be, as determined by
the Appropriate Co-Agent, will not adequately and fairly reflect
the cost to such Lender of funding its portion of a Fixed Rate
Advance, then, and in any such event:
(i) the Appropriate Co-Agent shall forthwith give no-
tice (by telephone confirmed in writing) to Interface and to
the other Lenders of such advice;
(ii) the Borrowers' right to request and such Lender's
obligation to make or permit portions of the Loans to remain
outstanding as a LIBOR Advance shall be immediately
suspended; and
(iii) such Lender shall make a Loan as part of the re-
quested Borrowing consisting of a LIBOR Advance as a Base
Rate Advance, which such Base Rate Advance shall, for all
other purposes, be considered part of such Borrowing;
PROVIDED HOWEVER, in the event that any Lender determines
with respect to a Eurocurrency Advance that while the
Adjusted LIBO Rate will not adequately and fairly reflect
the costs of such Lender but the Adjusted Special LIBO Rate
would adequately and fairly reflect such costs, then such
Lender's portion of such requested Borrowing shall bear
interest based upon the Adjusted Special LIBO Rate, if
available.
Section 4.11. LENDING OFFICES.
(a) Each Lender agrees that, if requested by the Bor-
rowers, it will use reasonable efforts (subject to overall policy
considerations of such Lender) to designate an alternate Lending
Office with respect to any of its portions of Fixed Rate Advances
affected by the matters or circumstances described in
Sections 4.07(b), 4.08, 4.09 or 4.10 to reduce the liability of
the Borrowers or avoid the results provided thereunder, so long
as such designation is not disadvantageous to such Lender as
determined by such Lender, which determination if made in good
faith, shall be conclusive and binding on all parties hereto.
Nothing in this Section 4.11 shall affect or postpone any of the
obligations of any Borrower or any right of any Lender provided
hereunder.
(b) If any Lender that is organized under the laws of
any jurisdiction other than the United States of America or any
State thereof (including the District of Columbia) issues a
public announcement with respect to the closing of its lending
offices in the United States such that any withholdings or
deductions and additional payments with respect to Taxes may be
required to be made by any Borrower thereafter pursuant to
Section 4.07(b), such Lender shall use reasonable efforts to
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<PAGE>
furnish Interface notice thereof as soon as practicable
thereafter; PROVIDED, HOWEVER, that no delay or failure to
furnish such notice shall in any event release or discharge the
Borrowers from their obligations to such Lender pursuant to
Section 4.07(b) or otherwise result in any liability of such
Lender.
Section 4.12. FUNDING LOSSES. Each Borrower shall
compensate each Lender, upon its written request to Interface
(which request shall set forth the basis for requesting such
amounts in reasonable detail and which request shall be made in
good faith and, absent manifest error, shall be final, conclusive
and binding upon all of the parties hereto), for all losses,
expenses and liabilities (including, without limitation, any
interest paid by such Lender to lenders of funds borrowed by it
to make or carry its portions of Fixed Rate Advances, and any
amounts required to be paid by any Multicurrency Syndicated
Lender as a result of currency fluctuations of Agreed Currencies
borrowed by it to make or carry Multicurrency Syndicated Loans,
in either case to the extent not recovered by such Lender in
connection with the re-employment of such funds or Agreed
Currencies and including loss of anticipated profits), which the
Lender may sustain: (i) if for any reason (other than a default
by such Lender) a borrowing of, or conversion to or continuation
of, Fixed Rate Advances to such Borrower does not occur on the
date specified therefor in a notice given by any Borrower to
either Co-Agent as provided herein (whether or not withdrawn),
(ii) if any repayment (including mandatory prepayments and any
conversions pursuant to Section 4.09(b)) of any Fixed Rate Advances
to such Borrower occurs on a date which is not the last
day of an Interest Period applicable thereto, or (iii), if, for
any reason, such Borrower defaults in its obligation to repay its
Fixed Rate Advances when required by the terms of this Agreement.
SECTION 4.13. FAILURE TO PAY IN APPROPRIATE AGREED
CURRENCY. If any Borrower is unable for any reason to effect
payment of a Multicurrency Syndicated Loan or in respect of a
Multicurrency Letter of Credit in the appropriate Agreed Currency
as required by Section 4.07(a)(ii) or if any Borrower shall
default in the payment when due of any payment in the appropriate
Agreed Currency, the Multicurrency Syndicated Lenders may, at
their option, require such payment to be made to the
Multicurrency Agent in the Dollar Equivalent of such Agreed
Currency at the Multicurrency Agent's Payment Office specified
for payments of Eurocurrency Advances outstanding in Dollars. In
any such case, each Borrower agrees to hold the Multicurrency
Syndicated Lenders harmless from any loss incurred by the
Multicurrency Syndicated Lenders arising from any change in the
value of Dollars in relation to such Agreed Currency between the
date such payment became due and the date of payment thereof.
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Section 4.14. ASSUMPTIONS CONCERNING FUNDING OF FIXED
RATE ADVANCES. Calculation of all amounts payable to a Lender
under this Article IV shall be made as though that Lender had
actually funded its portions of relevant Fixed Rate Advances
through the purchase of deposits in the relevant market and
Agreed Currency, as the case may be, bearing interest at the rate
applicable to such Fixed Rate Advances in an amount equal to the
amount of its portions of the Fixed Rate Advances and having a
maturity comparable to the relevant Interest Period and, in the
case of LIBOR Advances, through the transfer of such LIBOR
Advances from an offshore office of that Lender to a domestic
office of that Lender in the United States of America; PROVIDED
HOWEVER, that each Lender may fund its portions of each of the
Fixed Rate Advances in any manner it sees fit and the foregoing
assumption shall be used only for calculation of amounts payable
under this Article IV.
Section 4.15. APPORTIONMENT OF PAYMENTS. Aggregate
principal and interest payments in respect of Loans and payments
in respect of Letters of Credit, facility fees, commitment fees,
and Letter of Credit fees shall be apportioned among all
outstanding Commitments, Loans and Letters of Credit to which
such payments relate, proportionately to the Lenders' respective
Pro Rata Shares of such Commitments and outstanding Loans and
Letters of Credit. The Appropriate Co-Agent shall promptly
distribute to each Lender at its primary address set forth beside
its name on the appropriate signature page hereof or such other
address as any Lender may request its share of all such payments
received by the Appropriate Co-Agent.
Section 4.16. SHARING OF PAYMENTS, ETC. If any Lender
shall obtain any payment or reduction (including, without limita-
tion, any amounts received as adequate protection of a deposit
treated as cash collateral under the Bankruptcy Code) of any
obligation of any Borrower hereunder or under the Letter of
Credit Agreement (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) in excess of its
Pro Rata Share or L/C Pro Rata Share, as the case may be, of
payments or reductions on account of such obligations obtained by
all the Lenders, such Lender shall forthwith (i) notify each of
the other Lenders and the Co-Agents of such receipt, and
(ii) purchase from the other Lenders such participations in the
affected obligations as shall be necessary to cause such
purchasing Lender to share the excess payment or reduction, net
of costs incurred in connection therewith, ratably with each of
them, provided that if all or any portion of such excess payment
or reduction is thereafter recovered from such purchasing Lender
or additional costs are incurred, the purchase shall be rescinded
and the purchase price restored to the extent of such recovery or
such additional costs, but without interest unless the Lender
obligated to return such funds is required to pay interest on
such funds. Each Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 4.16
may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct
creditor of such Borrower in the amount of such participation.
Section 4.17. CAPITAL ADEQUACY. Without limiting any
other provision of this Agreement or the Letter of Credit Agree-
ment, in the event that any Lender shall have determined that any
law, treaty, governmental (or quasi-governmental) rule, regula-
tion, guideline or order regarding capital adequacy not currently
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in effect or fully applicable as of the Closing Date, or any
change therein or in the interpretation or application thereof,
or compliance by such Lender with any request or directive
regarding capital adequacy not currently in effect or fully
applicable as of the Closing Date (whether or not having the
force of law and whether or not failure to comply therewith would
be unlawful) from a central bank or governmental authority or
body having jurisdiction, does or shall have the effect of
reducing the rate of return on such Lender's capital as a
consequence of its obligations hereunder or under the Letter of
Credit Agreement to a level below that which such Lender could
have achieved but for such law, treaty, rule, regulation,
guideline or order, or such change or compliance (taking into
consideration such Lender's policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then
within ten Business Days after written notice and demand by such
Lender (with copies thereof to the Co-Agents), each Borrower
shall from time to time pay to such Lender additional amounts
sufficient to compensate such Lender for such reduction (but, in
the case of outstanding Base Rate Advances, without duplication
of any amounts already recovered by such Lender by reason of an
adjustment in the applicable Base Rate). Each certificate as to
the amount payable under this Section 4.17 (which certificate
shall set forth the basis for requesting such amounts in
reasonable detail), submitted to Interface by any Lender in good
faith, shall, absent manifest error, be final, conclusive and
binding for all purposes.
Section 4.18. BENEFITS TO GUARANTORS. In
consideration for the execution and delivery by the Guarantors
(other than Interface) of their Guaranty Agreement, the Borrowers
agree to make the benefit of extensions of credit hereunder
available to the Guarantors.
Section 4.19. LIMITATION ON CERTAIN PAYMENT OBLIGATIONS.
(a) Each Lender or Agent shall make written demand on
Interface for indemnification or compensation pursuant to Sec-
tion 4.07 no later than 90 days after the earlier of (i) the date
on which such Lender or Agent makes payment of such Taxes, and
(ii) the date on which the relevant taxing authority or other
governmental authority makes written demand upon such Lender or
Agent for payment of such Taxes.
(b) Each Lender or Agent shall make written demand on
Interface for indemnification or compensation pursuant to Sec-
tions 4.12 and 4.13 no later than 90 days after the event giving
rise to the claim for indemnification or compensation occurs.
(c) Each Lender or Agent shall make written demand on
Interface for indemnification or compensation pursuant to Sec-
tions 4.09 and 4.17 no later than 90 days after such Lender or
Agent receives actual notice or obtains actual knowledge of the
promulgation of a law, rule, order or interpretation or
occurrence of another event giving rise to a claim pursuant to
such sections.
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(d) In the event that the Lenders or Agents fail to
give Interface notice within the time limitations prescribed in
(a) or (b) above, neither Interface nor any other Borrower shall
have any obligation to pay such claim for compensation or
indemnification. In the event that the Lender or Agents fail to
give Interface notice within the time limitation prescribed in
(c) above, neither Interface nor any other Borrower shall have
any obligation to pay any amount with respect to claims accruing
prior to the ninetieth day preceding such written demand.
Section 4.20. APPLICATION OF LOAN PROCEEDS TO MATURING
LOANS. Notwithstanding the provisions of Sections 2.02(d),
2.05(c), 2.06(d), 3.02(d), 3.05(c), and 3.06(d) requiring the
Lenders to make available proceeds of their respective Loans to
the Domestic Agent or Multicurrency Agent, as the case may be, in
connection with the Borrowing of Domestic Revolving Loans and
Multicurrency Revolving Loans, to the extent that a Loan
previously made by a Lender matures on the date of any such
Borrowing of a requested Loan, such Lender shall apply that
portion of the proceeds of the Loan it is then making sufficient
to effect the repayment of principal of the maturing Loan owing
to it, with any excess proceeds to be made available to the
applicable Borrower as contemplated herein.
Section 4.21. CURRENCY CONTROL AND EXCHANGE
REGULATIONS. Notwithstanding anything to the contrary herein,
if, after the making of any Multicurrency Syndicated Advance in
any Agreed Currency other than Dollars, currency control or
exchange regulations are imposed in the country which issues such
Agreed Currency with the result that the type of such Agreed
Currency (the "Original Currency") no longer exists or the
Multicurrency Borrower is not able to make payment to the
Multicurrency Agent for the account of the Multicurrency
Syndicated Letters in such Original Currency, then all payments
to be made by the Multicurrency Borrower hereunder in such Agreed
Currency shall instead be made when due in Dollars in an amount
equal to the Dollar Equivalent (as of the date of repayment) of
such payment due, it being the intention of the parties that the
Multicurrency Borrower take all risks of the imposition of any
such currency control or exchange regulations. For purpose of
this Section 4.21, the commencement of the third stage of
European Economic and Monetary Union and the occurrence of the
Euro Implementation Date shall not constitute the imposition of
currency control or exchange regulations.
Section 4.22. EUROPEAN ECONOMIC AND MONETARY UNION.
(a) If any Multicurrency Syndicated Advance made (or
to be made) on or after the Euro Implementation Date would, but
for the provisions of this Section 4.22, be capable of being made
in either the Euro or in a National Currency Unit, such
Multicurrency Syndicated Advance shall be made in the Euro.
(b) With effect on and from the Euro Implementation
Date:
(i) Without prejudice to any method of conversion
or rounding prescribed by any legislative
measures of the Council of the European
Union, each reference in this Agreement to a
fixed amount or to fixed amounts in a
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National Currency Unit to be paid to or by
the Multicurrency Agent shall,
notwithstanding any other provision of this
Agreement, be replaced by a reference to such
comparable and convenient fixed amount or
fixed amounts in the Euro as the
Multicurrency Agent may from time to time
specify; and
(ii) The Multicurrency Agent may notify the other
parties to this Agreement of any
modifications to this Agreement which the
Multicurrency Agent (acting reasonably and
after consultation with the other parties to
this Agreement) determines to be necessary as
a result of the commencement of the third
stage of European Economic and Monetary Union
and the occurrence of the Euro Implementation
Date. Notwithstanding any other provision of
this Agreement, any modifications of which
the Multicurrency Agent so notifies the other
parties shall take effect in accordance with
the terms of such notification. So far as
possible, such modifications shall be such as
to put the parties in the same position as if
the Euro Implementation Date had not
occurred. However, if and to the extent that
the Multicurrency Agent determines that it is
not possible to put the parties in such
position, the Multicurrency Agent may give
priority to putting the Multicurrency Agent
and the Multicurrency Lenders into such
position.
Section 4.23. MARKET DISRUPTION. Notwithstanding the
satisfaction of all applicable conditions to the making of any
Multicurrency Syndicated Advance in any Agreed Currency other
than Dollars, if there shall occur on or prior to the date of
such Multicurrency Syndicated Advance any change in national or
international financial, political or economic conditions or
currency exchange rates or exchange controls which would in the
reasonable opinion of the Multicurrency Agent or the Required
Multicurrency Lenders make it impracticable for the Eurocurrency
Advances to be denominated in the Agreed Currency specified by
the Multicurrency Borrower, then the Multicurrency Agent shall
forthwith give notice to the Multicurrency Borrower and the
Multicurrency Lenders, and such Eurocurrency Advance shall not be
denominated in such Agreed Currency but shall be made on such
Borrowing date in Dollars, in an aggregate principal amount equal
to the Dollar Equivalent of the aggregate principal amount
specified in the related notice of such Borrowing or Notice of
Conversion/Continuation, as the case may be, as a Base Rate
Advance, unless the Multicurrency Borrower notifies the
Multicurrency Agent at least one Business Day before such date
that (i) it elects not to borrow on such date, or (ii) it elects
to borrow on such date in a different Agreed Currency, as the
case may be, in which the denomination of such Loans would in the
opinion of the Multicurrency Agent and the Required Multicurrency
Lenders be practicable and in an aggregate principal amount equal
to the Dollar Equivalent of the aggregate principal amount
specified in the related notice of Borrowing or Notice of
Conversion/Continuation, as the case may be.
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ARTICLE V.
CONDITIONS TO BORROWINGS
The obligation of each Lender to make Advances to the
Borrowers hereunder is subject to the satisfaction of the follow-
ing conditions:
Section 5.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF
THIRD AMENDED AND RESTATED CREDIT AGREEMENT. In order for this
Third Amended and Restated Credit Agreement to become effective
on the Closing Date, all obligations of the Borrowers hereunder
incurred at or prior to such date (including, without
limitation, the Borrowers' obligations to reimburse the
reasonable fees and expenses of counsel to the Co-Agents and any
fees and expenses payable to the Arrangers, the Co-Agents and the
Lenders as previously agreed with Interface), shall have been
paid in full, and the Co-Agents shall have received the
following, in form and substance satisfactory in all respects to
the Co-Agents:
(a) the duly executed counterparts of this
Agreement;
(b) the duly completed Notes;
(c) the Guaranty Agreements, Contribution Agreement,
and Indemnity Agreement;
(d) certificate of the Borrowers in substantially
the form of EXHIBIT E attached hereto and appropriately com-
pleted;
(e) certificates of the Secretary or Assistant
Secretary of each of the Credit Parties (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 Subsid-
iary, the comparable governing body of such entity) of the
Credit Parties, authorizing as applicable (i) the execution,
delivery and performance of the Credit Documents, and
(ii) the granting of the security interest pursuant to the
L/C Cash Collateral Assignment;
(f) certificates of the Secretary or an Assistant
Secretary of each of the Credit Parties (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 the Credit Documents, and
(ii) the bylaws or comparable governing documents of such
entities;
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(g) certified copies of the certificate or articles of
incorporation of each Credit Party (or comparable organiza-
tional document of each Foreign Subsidiary), together with
certificates of good standing or existence, as may be avail-
able from the Secretary of State (or comparable office or
registry for each Foreign Subsidiary) of the jurisdiction of
incorporation or organization of such Credit Party;
(h) copies of all documents and instruments, including
all consents, authorizations and filings, required or advis-
able under any Requirement of Law or by any material
Contractual Obligation of the Credit Parties, in connection
with the execution, delivery, performance, validity and
enforceability of the Credit Documents and the other
documents to be executed and delivered hereunder, and such
consents, authorizations, filings and orders shall be in
full force and effect and all applicable waiting periods
shall have expired;
(i) certified copies of the Intercompany Loan Docu-
ments;
(j) acknowledgments from each of G. Kimbrough Taylor,
Jr. and Kilpatrick Stockton LLP as to their appointment as
agent for service of process for the various Credit Parties;
(k) the Letter of Credit Agreement and the L/C
Cash Collateral Assignment, together with all certificates,
opinions, documents and instruments required to be furnished
to the L/C Issuers pursuant to Section 3.1 of the Letter of
Credit Agreement;
(l) certified copies of indentures, credit agreements,
instruments, and other documents evidencing or securing In-
debtedness of any Consolidated Company described on
SCHEDULE 8.01(b) or SCHEDULE 8.01(j), in any single case in
an amount not less than $2,000,000 (or the Dollar Equivalent
thereof);
(m) certificates, reports and other information as the
Co-Agents may request from any Consolidated Company in order
to satisfy the Lenders as to the absence of any material li-
abilities or obligations arising from matters relating to
employees of the Consolidated Companies, including employee
relations, collective bargaining agreements, Plans, Foreign
Plans, and other compensation and employee benefit plans;
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(n) certificates, reports, environmental audits and
investigations, and other information as the Co-Agents may
request from any Consolidated Company in order to satisfy
the Lenders as to the absence of any material liabilities or
obligations arising from environmental and employee health
and safety exposures to which the Consolidated Companies may
be subject, and the plans of the Consolidated Companies with
respect thereto;
(o) certificates, reports and other information as the
Co-Agents may request from any Consolidated Company in order
to satisfy the Lenders as to the absence of any material li-
abilities or obligations arising from litigation (including
without limitation, products liability and patent infringe-
ment claims) pending or threatened against the Consolidated
Companies;
(p) a summary, set forth in format and detail accept-
able to the Co-Agents, of the types and amounts of insurance
(property and liability) maintained by the Consolidated Com-
panies;
(q) the favorable opinions of (i) Kilpatrick Stockton
LLP, United States counsel to the Credit Parties,
substantially in the form of EXHIBIT F, (ii) Simon Carlton,
United Kingdom counsel to Europe Limited substantially in
the form of EXHIBIT G-1, and (iii) Han van Beers,
Netherlands counsel to Europe B.V. substantially in the form
of EXHIBIT G-2, in each case addressed to the Co-Agents and
each of the Lenders, and covering such other matters as
either Co-Agent or any Lender may reasonably request;
(r) the favorable opinions of Clifford Chance, special
counsel to the Co-Agents and the Lenders, as to any matters
relating to the Credit Documents under the laws of the
United Kingdom and the Netherlands as may be requested by
the Co-Agents;
(s) satisfactory written information from Interface
indicating that Interface and the other Consolidated
Companies (i) have done a comprehensive review of their
computer programs to identify the systems that would be
affected by Year 2000 Issues as such Issues pertain to the
computer programs and systems of the Consolidated Companies
(but not those of their third party customers, suppliers, or
vendors), and are in the process of reviewing their Year
2000 exposure to third party customers, suppliers and
vendors, and evaluating the costs of modifications to
program logic control systems, (ii) have developed or are in
the process of developing a realistic and achievable program
for remediating in all material respects all currently known
Year 2000 Issues on a timely basis as such Issues pertain to
the computer programs and systems of the Consolidated
Companies (but not those of their third party customers,
suppliers, or vendors), and (iii) based on their review,
consultants' reports, and all other information currently
available to them, and subject to the matters set forth on
SCHEDULE 6.23, do not reasonably anticipate that Year 2000
Issues will have a Materially Adverse Effect; and
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(t) a duly completed certificate of the president,
chief financial officer or principal accounting officer of
Interface as described in Section 7.07(c) given with respect
to the financial statements of Interface and the
Consolidated Companies for the first fiscal quarter of
Interface's 1998 fiscal year;
In addition to the foregoing, the following conditions shall have
been satisfied or shall have existed, all to the satisfaction of
the Co-Agents, as of the time this Third Amended and Restated
Credit Agreement becomes effective:
(u) the Loans to be made on the Closing Date and the
use of proceeds thereof shall not have contravened, violated
or conflicted with, or involved the Co-Agents or any Lender
in a violation of, any law, rule, injunction, or regulation,
or determination of any court of law or other governmental
authority;
(v) all corporate proceedings and all other legal mat-
ters in connection with the authorization, legality,
validity and enforceability of the Credit Documents shall
have been reasonably satisfactory in form and substance to
the Required Lenders; and
(w) Interface shall have paid to the Domestic Agent,
for the benefit of the Term Lenders under the Existing
Credit Agreement and the 1997 Term Lenders under the 1997
Term Loan Agreement, all outstanding principal, interest,
fees and other amounts payable in respect of the Term Loans
under the Existing Credit Agreement and the 1997 Term Loans
under the 1997 Term Loan Agreement.
Section 5.02. CONDITIONS TO INITIAL LOANS TO EUROPE
LIMITED. Prior to the making of the initial Multicurrency
Syndicated Loans to Europe Limited, Interface and the
Multicurrency Agent shall have received with respect to Europe
Limited the forms required to be furnished by the Multicurrency
Syndicated Lenders pursuant to Section 4.07(b)(v)(B) or such
other satisfactory evidence, in each case, establishing a
complete exemption for such Multicurrency Syndicated Lender from
United Kingdom withholding tax for payments of all principal and
interest from Europe Limited.
Section 5.03. CONDITIONS TO ALL LOANS. At the time of
the making of all Loans (before as well as after giving effect to
such Loans and the proposed use of the proceeds thereof), the
following conditions shall have been satisfied or shall exist:
(a) there shall exist no Default or Event of Default;
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(b) all representations and warranties by Interface
contained herein, and all representations and warranties by
the other Borrowers contained herein, shall be true and cor-
rect in all material respects with the same effect as though
such representations and warranties had been made on and as
of the date of such Loans (except any representation and
warranty which by its express terms relates to a specific
date or period);
(c) since the date of the most recent financial state-
ments of the Consolidated Companies described in
Section 6.14(a), there shall have been no changes which have
had or could reasonably be expected to have, singly or in
the aggregate, a Materially Adverse Effect (whether or not
any notice with respect to such change has been furnished
to the Lenders pursuant to Section 7.07);
(d) there shall be no actions or proceedings
instituted or pending before any court or other governmental
authority or, to the knowledge of any Borrower, threatened
which reasonably could be expected to have, singly or in the
aggregate, a Materially Adverse Effect;
(e) the Loans to be made and the use of proceeds
thereof shall not contravene, violate or conflict with, or
involve the Co-Agents or any Lender in a violation of, any
law, rule, injunction, or regulation, or determination of
any court of law or other governmental authority applicable
to any of the Borrowers; and
(f) Interface shall have given to the Co-Agents with
its notice of Borrowing written notice of its intent to use
any proceeds of any Loan then being requested for the
purchase or carrying of any "margin stock" (as defined in
the Margin Regulations); and
(g) The Co-Agents shall have received such other
documents (including, without limitation, any necessary
Federal Reserve Form U-1 or other similar form required by
the Margin Regulations) or legal opinions as the Co-Agents
or any Lender may reasonably request, all in form and
substance reasonably satisfactory to the Co-Agents.
Each request for a Borrowing and the acceptance by each
Borrower of the proceeds thereof shall constitute a
representation and warranty by such Borrower, as of the date of
the Loans comprising such Borrowing, that the applicable
conditions specified in Sections 5.01 and 5.03 (and Section 5.02
with respect to Europe Limited) have been satisfied.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Each of Interface (as to itself and all other Consoli-
dated 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 as follows:
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Section 6.01. ORGANIZATIONAL EXISTENCE; COMPLIANCE
WITH LAW. Each of the Consolidated Companies is duly organized,
validly existing, and in good standing under the laws of the
jurisdiction of its organization, and each of the Credit Parties
has the corporate or other organizational power and authority and
the legal right to own and operate its property and to conduct
its business. Each of the Consolidated Companies (i) other than
the Credit Parties, has the corporate or other organizational
power and authority and the legal right to own and operate its
property and to conduct its business, (ii) is duly qualified as a
foreign corporation or other organization and in good standing
under the laws of each jurisdiction where its ownership of
property or the conduct of its business requires such
qualification, and (iii) is in compliance with all Requirements
of Law, where (a) with respect to those Consolidated Companies
that are not Credit Parties, the failure to have such power,
authority and legal right as set forth in clause (i), (b) the
failure to be so qualified or in good standing as set forth in
clause (ii), or (c) the failure to comply with Requirements of
Law as set forth in clause (iii), would reasonably be expected,
in the aggregate, to have a Materially Adverse Effect. The
jurisdiction of incorporation or organization, and the ownership
of all issued and outstanding capital stock or other equity
interests, for each Subsidiary as of the date of this Agreement
is accurately described on SCHEDULE 6.01.
Section 6.02. ORGANIZATIONAL POWER; AUTHORIZATION.
Each of the Credit Parties has the corporate or other
organizational power and authority to make, deliver and perform
the Credit Documents to which it is a party and has taken all
necessary corporate or other organizational action to authorize
the execution, delivery and performance of such Credit Documents.
No consent or authorization of, or filing with, any Person
(including, without limitation, any governmental authority), is
required in connection with the execution, delivery or
performance by any Credit Party, or the validity or
enforceability against any Credit Party, of the Credit Documents,
other than (i) such consents, authorizations or filings which
have been made or obtained (including without limitation, any
necessary consultations with any Credit Party's supervisory
board, works council ("Ondernemingsraad") or similar body), and
(ii) customary filings to perfect the Liens in favor of the
Collateral Agent granted in the IRB Collateral Documents.
Section 6.03. ENFORCEABLE OBLIGATIONS. This Agreement
has been duly executed and delivered, and each other Credit Docu-
ment will be duly executed and delivered, by the respective
Credit Parties, and this Agreement constitutes, and each other
Credit Document when executed and delivered will constitute,
legal, valid and binding obligations of the Credit Parties,
respectively, enforceable against the Credit Parties in
accordance with their respective terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity.
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Section 6.04. NO LEGAL BAR. The execution, delivery
and performance by the Credit Parties of the Credit Documents
will not violate any Requirement of Law or cause a breach or
default under any of their respective Contractual Obligations.
Section 6.05. NO MATERIAL LITIGATION. Except as set
forth on SCHEDULE 6.05 or in any notice furnished to the Lenders
pursuant to Section 7.07(i) at or prior to the respective times
the representations and warranties set forth in this Section 6.05
are made or deemed to be made hereunder, no litigation,
investigations or proceedings of or before any courts, tribunals,
arbitrators or governmental authorities are pending or, to the
knowledge of any Borrower, threatened by or against any of the
Consolidated Companies, or against any of their respective
properties or revenues, existing or future (a) with respect to
any Credit Document, or any of the transactions contemplated
hereby or thereby, or (b) which, if adversely determined, would
reasonably be expected to have a Materially Adverse Effect.
Section 6.06. INVESTMENT COMPANY ACT, ETC. None of
the Credit Parties is an "investment company" or a company "con-
trolled" by an "investment company" (as each of the quoted terms
is defined or used in the Investment Company Act of 1940, as
amended). None of the Credit Parties is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal
Power Act, or any foreign, federal or local statute or regulation
limiting its ability to incur indebtedness for money borrowed,
guarantee such indebtedness, or pledge its assets to secure such
indebtedness, as contemplated hereby or by any other Credit Docu-
ment.
Section 6.07. MARGIN REGULATIONS. No part of the pro-
ceeds of any of the Loans will be used for any purpose which vio-
lates, or which would be inconsistent or not in compliance with,
the provisions of the applicable Margin Regulations.
Section 6.08. COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) The Consolidated Companies have received no
notices of claims or potential liability under, and are in
compliance with, all applicable Environmental Laws, where such
claims and liabilities under, and failures to comply with, such
statutes, regulations, rules, ordinances, laws or licenses, would
reasonably be expected to result in penalties, fines, claims or
other liabilities (including, without limitation, remediation
costs and expenses) to the Consolidated Companies in amounts in
excess of $4,500,000, either individually or in the aggregate
(including any such penalties, fines, claims, or liabilities
relating to the matters set forth on SCHEDULE 6.08(a)), except as
set forth on SCHEDULE 6.08(a) or in any notice furnished to the
Lenders pursuant to Section 6.07(j) at or prior to the respective
times the representations and warranties set forth in this
Section 6.08(a) are made or deemed to be made hereunder.
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<PAGE>
(b) Except as set forth on SCHEDULE 6.08(b) or in any
notice furnished to the Lenders pursuant to Section 7.07(j) at or
prior to the respective times the representations and warranties
set forth in this Section 6.08(b) are made or deemed to be made
hereunder, none of the Consolidated Companies has received during
the period from January 1, 1987 through the date of this Agree-
ment, any notice of violation, or notice of any action, either
judicial or administrative, from any governmental authority
(whether United States or foreign) relating to the actual or al-
leged violation of any Environmental Law, including, without
limitation, any notice of any actual or alleged spill, leak, or
other release of any Hazardous Substance, waste or hazardous
waste by any Consolidated Company or its employees or agents, or
as to the existence of any contamination on any properties owned
by any Consolidated Company, where any such violation, spill,
leak, release or contamination would reasonably be expected to
result in penalties, fines, claims or other liabilities
(including, without limitation, remediation costs and expenses)
to the Consolidated Companies in amounts in excess of $4,500,000,
either individually or in the aggregate (including any such
penalties, fines, claims or liabilities relating to the matters
set forth on SCHEDULE 6.08(a)).
(c) The Consolidated Companies have obtained all
necessary governmental permits, licenses and approvals which are
material to the operations conducted on their respective
properties, including without limitation, all required material
permits, licenses and approvals for (i) the emission of air
pollutants or contaminates, (ii) the treatment or pretreatment
and discharge of waste water or storm water, (iii) the treatment,
storage, disposal or generation of hazardous wastes, (iv) the
withdrawal and usage of ground water or surface water, and
(v) the disposal of solid wastes.
Section 6.09. INSURANCE. The Consolidated Companies
currently maintain insurance with respect to their respective
properties and businesses, with financially sound and reputable
insurers, having coverages against losses or damages of the kinds
customarily insured against by reputable companies in the same or
similar businesses, such insurance being in amounts no less than
those amounts which are customary for such companies under
similar circumstances. The Consolidated Companies have paid all
material amounts of insurance premiums now due and owing with
respect to such insurance policies and coverages, and such
policies and coverages are in full force and effect.
Section 6.10. NO DEFAULT. None of the Consolidated
Companies is in default under or with respect to any Contractual
Obligation in any respect which has had or is reasonably expected
to have a Materially Adverse Effect.
Section 6.11. NO BURDENSOME RESTRICTIONS. Except as
set forth on Schedule 6.11 or in any notice furnished to the
Lenders pursuant to Section 7.07(p) at or prior to the respective
times the representations and warranties set forth in this Sec-
tion 6.11 are made or deemed to be made hereunder, none of the
Consolidated Companies is a party to or bound by any Contractual
Obligation or Requirement of Law which has had or would
reasonably be expected to have a Materially Adverse Effect.
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Section 6.12. TAXES. Except as set forth on Schedule
6.12, each of the Consolidated Companies have filed or caused
to be filed all declarations, reports and tax returns which are
required to have been filed, and has paid all taxes, custom du-
ties, levies, charges and similar contributions ("taxes" in this
Section 6.12) shown to be due and payable on said returns or on
any assessments made against it or its properties, and all other
taxes, fees or other charges imposed on it or any of its proper-
ties by any governmental authority (other than those the amount
or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided in its books); and no tax
liens have been filed and, to the knowledge of Interface or any
other Borrower, no claims are being asserted with respect to any
such taxes, fees or other charges; excluding, however, for pur-
poses of the foregoing portions of this Section, tax returns not
filed or taxes not paid where the aggregate amount of taxes in-
volved does not exceed $2,500,000 in the aggregate and the
failure to file such returns or pay such taxes has resulted from
the Consolidated Companies being without knowledge that the
respective tax authorities are claiming such taxes to be due.
Section 6.13. SUBSIDIARIES. Except as disclosed on
Schedule 6.01, on the date of this Agreement, Interface has no
Subsidiaries and neither Interface nor any Subsidiary is a joint
venture partner or general partner in any partnership. After the
date of this Agreement, except as disclosed on Schedule 6.13 or
in any notice furnished pursuant to Section 7.07(q) at or prior
to the respective times the representations and warranties set
forth in this Section 6.13 are made or deemed to be made
hereunder, Interface has no Material Subsidiaries.
Section 6.14. FINANCIAL STATEMENTS. The Borrowers
have furnished to the Co-Agents and the Lenders (i) the audited
consolidated balance sheet of the Consolidated Companies as at
December 28, 1997 and the related consolidated statements of
income, shareholders' equity and cash flows for the fiscal year
then ended, including in each case the related schedules and
notes, and (ii) the unaudited balance sheet of the Consolidated
Companies as at the end of the first fiscal quarter of 1998, and
the related unaudited consolidated statements of income,
shareholders' equity, and cash flows for the period then ended,
setting forth in each case in comparative form the figures for
the previous fiscal year and first fiscal quarter, as the case
may be. The foregoing financial statements fairly present in all
material respects the consolidated financial condition of such
Consolidated Companies as at the dates thereof and results of op-
erations for such periods in conformity with GAAP consistently
applied. Such Consolidated Companies taken as a whole do not
have any material contingent obligations, contingent liabilities,
or material liabilities for known taxes, long-term leases or
unusual forward or long-term commitments not reflected in the
foregoing financial statements or the notes thereto. Since
December 28, 1997, and after giving effect to the issuance by
Interface of the Senior Notes and the March 1998 Equity Issuance,
there have been no changes with respect to such Consolidated Com-
panies which have had or would reasonably be expected to have,
singly or in the aggregate, a Materially Adverse Effect.
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Section 6.15. ERISA. Except as disclosed on Schedule
6.15 or in any notice furnished to the Lenders pursuant to
Section 7.07(k) at or prior to the respective times the represen-
tations and warranties set forth in this Section 6.15 are made or
deemed to be made hereunder:
(a)(1) Identification of Plans. (A) None of the Con-
solidated Companies nor any of their respective ERISA Affiliates
maintains or contributes to, or has during the past two years
maintained or contributed to, any Plan that is subject to Title
IV of ERISA, and (B) none of the Consolidated Companies maintains
or contributes to any Foreign Plan;
(2) Compliance. Each Plan and each Foreign Plan main-
tained by the Consolidated Companies have at all times been main-
tained, by their terms and in operation, in compliance with all
applicable laws, and the Consolidated Companies are subject to no
tax or penalty with respect to any Plan of such Consolidated Com-
pany or any ERISA Affiliate thereof, including without
limitation, any tax or penalty under Title I or Title IV of ERISA
or under Chapter 43 of the Tax Code, or any tax or penalty
resulting from a loss of deduction under Sections 162, 404, or
419 of the Tax Code, where the failure to comply with such laws,
and such taxes and penalties, together with all other liabilities
referred to in this Section 6.15 (taken as a whole), would in the
aggregate have a Materially Adverse Effect;
(3) Liabilities. The Consolidated Companies are sub-
ject to no liabilities (including withdrawal liabilities) with
respect to any Plans or Foreign Plans of such Consolidated Compa-
nies or any of their ERISA Affiliates, including without limita-
tion, any liabilities arising from Titles I or IV of ERISA, other
than obligations to fund benefits under an ongoing Plan and to
pay current contributions, expenses and premiums with respect to
such Plans or Foreign Plans, where such liabilities, together
with all other liabilities referred to in this Section 6.15
(taken as a whole), would in the aggregate have a Materially
Adverse Effect;
(4) Funding. The Consolidated Companies and, with re-
spect to any Plan which is subject to Title IV of ERISA, each of
their respective ERISA Affiliates, have made full and timely pay-
ment of all amounts (A) required to be contributed under the
terms of each Plan and applicable law, and (B) required to be
paid as expenses (including PBGC or other premiums) of each Plan,
where the failure to pay such amounts (when taken as a whole,
including any penalties attributable to such amounts) would have
a Materially Adverse Effect. No Plan subject to Title IV of
ERISA has an "amount of unfunded benefit liabilities" (as defined
in Section 4001(a)(18) of ERISA), determined as if such Plan
terminated on any date on which this representation and warranty
is deemed made, in any amount which, together with all other li-
abilities referred to in this Section 6.15 (taken as a whole),
would have a Materially Adverse Effect if such amount were then
due and payable. The Consolidated Companies are subject to no
liabilities with respect to post-retirement medical benefits in
any amounts which, together with all other liabilities referred
to in this Section 6.15 (taken as a whole), would have a
Materially Adverse Effect if such amounts were then due and
payable.
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(b) With respect to any Foreign Plan, reasonable re-
serves have been established in accordance with prudent business
practice or where required by ordinary accounting practices in
the jurisdiction where the Foreign Subsidiary maintains its
principal place of business or in which the Foreign Plan is
maintained. The aggregate unfunded liabilities, after giving
effect to any reserves for such liabilities, with respect to such
Foreign Plans, together with all other liabilities referred to in
this Section 6.15 (taken as a whole), would not have a Materially
Adverse Effect.
Section 6.16. PATENTS, TRADEMARKS, LICENSES, ETC. Except
as set forth on Schedule 6.16 or in any notice furnished to
the Lenders pursuant to Section 7.07(p) at or prior to the
respective times the representations and warranties set forth in
this Section 6.16 are made or deemed to be made hereunder,
(i) the Consolidated Companies have obtained and hold in full
force and effect all material patents, trademarks, service marks,
trade names, copyrights, licenses and other such rights, free
from burdensome restrictions, which are necessary for the
operation of their respective businesses as presently conducted,
and (ii) to the best of the Borrowers' knowledge, no product,
process, method, service or other item presently sold by or
employed by any Consolidated Company in connection with such
business infringes any patents, trademark, service mark, trade
name, copyright, license or other right owned by any other person
and there is not presently pending, or to the knowledge of the
Borrowers, threatened, any claim or litigation against or
affecting any Consolidated Company contesting such Person's right
to sell or use any such product, process, method, substance or
other item where the result of such failure to obtain and hold
such benefits or such infringement would have a Materially
Adverse Effect.
Section 6.17. OWNERSHIP OF PROPERTY. Except as set
forth on Schedule 6.17, (i) each Consolidated Company that is not
a Foreign Subsidiary has good and marketable fee simple title to
or a valid leasehold interest in all of its real property and
good title to, or a valid leasehold interest in, all of its other
property, and (ii) each Foreign Subsidiary owns or has a valid
leasehold interest in all of its real property and owns or has a
valid leasehold interest in, all of its other properties, in the
case of clauses (i) and (ii) as such properties are reflected in
the consolidated balance sheet of the Consolidated Companies as
of December 28, 1997, referred to in Section 6.14, other than
properties disposed of in the ordinary course of business since
such date or as otherwise permitted by the terms of this
Agreement, subject to no Lien or title defect of any kind, except
Liens permitted hereby and title defects not constituting
material impairments in the intended use for such properties.
The Consolidated Companies enjoy peaceful and undisturbed
possession under all of their respective leases.
Section 6.18. INDEBTEDNESS. Except as set forth on
Schedules 6.18 and 8.01, none of the Consolidated Companies is an
obligor in respect of any Indebtedness for borrowed money, or any
commitment to create or incur any Indebtedness for borrowed
money, in an amount not less than $1,000,000 in any single case,
and such Indebtedness and commitments for amounts less than
$1,000,000 do not exceed $5,000,000 in the aggregate for all such
Indebtedness and commitments of the Consolidated Companies.
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Section 6.19. FINANCIAL CONDITION. On the Closing
Date and after giving effect to the transactions contemplated by
this Agreement, the Letter of Credit Agreement, and the other
Credit Documents, including without limitation, the use of the
proceeds of the Domestic Revolving Loans and Multicurrency
Revolving Loans as provided in Articles II and III (i) assets of
each Credit Party at fair valuation and based on their present
fair saleable value (including, without limitation, the fair and
realistic value of (x) any contribution or subrogation rights in
respect of any Guaranty Agreement given by such Credit Party, and
(y) any Intercompany Loan owed to such Credit Party) will exceed
such Credit Party's debts, including contingent liabilities (as
such liabilities may be limited under the express terms of any
Guaranty Agreement of such Credit Party), (ii) the remaining
capital of such Credit Party will not be unreasonably small to
conduct the Credit Party's business, and (iii) such Credit Party
will not have incurred debts, or have intended to incur debts,
beyond the Credit Party's ability to pay such debts as they
mature. For purposes of this Section 6.19, "debt" means any
liability on a claim, and "claim" means (a) the right to payment,
whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured, or (b) the
right to an equitable remedy for breach of performance if such
breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or
unsecured.
Section 6.20. INTERCOMPANY LOANS. The Intercompany
Loans and the Intercompany Loan Documents have been duly autho-
rized and approved by all necessary corporate and shareholder ac-
tion on the part of the parties thereto, and constitute the
legal, valid and binding obligations of the parties thereto,
enforceable against each of them in accordance with their
respective terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar
laws affecting creditors' rights generally, and by general
principles of equity.
Section 6.21. LABOR MATTERS. Except as set forth in
Schedule 6.21 or in any notice furnished to the Lenders pursuant
to Section 7.07(p) at or prior to the respective times the repre-
sentations and warranties set forth in this Section 6.21 are made
or deemed to be made hereunder, the Consolidated Companies have
experienced no strikes, labor disputes, slow downs or work stop-
pages due to labor disagreements which have had, or would reason-
ably be expected to have, a Materially Adverse Effect, and, to
the best knowledge of the Borrowers, there are no such strikes,
disputes, slow downs or work stoppages threatened against any
Consolidated Company. The hours worked and payment made to
employees of the Consolidated Companies have not been in
violation in any material respect of the Fair Labor Standards Act
(in the case of Consolidated Companies that are not Foreign
Subsidiaries) or any other applicable law dealing with such
matters. All payments due from the Consolidated Companies, or
for which any claim may be made against the Consolidated
Companies, on account of wages and employee health and welfare
insurance and other benefits have been paid or accrued as
liabilities on the books of the Consolidated Companies where the
failure to pay or accrue such liabilities would reasonably be
expected to have a Materially Adverse Effect.
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Section 6.22. PAYMENT OR DIVIDEND RESTRICTIONS.
Except as set forth in Section 8.12 or described on
Schedule 6.22, none of the Consolidated Companies is party to or
subject to any agreement or understanding restricting or limiting
the payment of any dividends or other distributions by any such
Consolidated Company.
Section 6.23. YEAR 2000 ISSUES. Interface and the
other Consolidated Companies (i) have done a comprehensive review
of their computer programs to identify the systems that would be
affected by Year 2000 Issues as such Issues pertain to the
computer programs and systems of the Consolidated Companies (but
not those of their third party customers, suppliers, or vendors),
and are in the process of reviewing their Year 2000 exposure to
third party customers, suppliers and vendors, and evaluating the
costs of modifications to program logic control systems, (ii)
have developed or are in the process of developing a realistic
and achievable program for remediating in all material respects
all currently known Year 2000 Issues on a timely basis as such
Issues pertain to the computer programs and systems of the
Consolidated Companies (but not those of their third party
customers, suppliers, or vendors), and (iii) based on their
review, consultants' reports, and all other information currently
available to them, and subject to the matters set forth on
Schedule 6.23, do not reasonably anticipate that Year 2000 Issues
will have a Materially Adverse Effect.
Section 6.24. DISCLOSURE. No representation or war-
ranty contained in this Agreement (including the Schedules at-
tached hereto) or in any other document furnished from time to
time pursuant to the terms of this Agreement, contains or will
contain any untrue statement of a material fact or omits or will
omit to state any material fact necessary to make the statements
herein or therein not misleading as of the date made or deemed to
be made. Except as may be set forth herein (including the Sched-
ules attached hereto) or in any notice furnished to the Lenders
pursuant to Section 7.07 at or prior to the respective times the
representations and warranties set forth in this Section 6.24 are
made or deemed to be made hereunder, there is no fact known to
the Borrowers which has had, or is reasonably expected to have, a
Materially Adverse Effect.
ARTICLE VII.
AFFIRMATIVE COVENANTS
So long as any Commitment remains in effect hereunder
or any Note shall remain unpaid, Interface (whether or not it is
a Borrower hereunder) and each other Borrower will:
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Section 7.01. ORGANIZATIONAL EXISTENCE, ETC. Preserve
and maintain, and cause each of its Material Subsidiaries to
preserve and maintain, its corporate or other organizational
existence, its material rights, franchises, and licenses, and its
material patents and copyrights (for the scheduled duration
thereof), trademarks, trade names, and service marks, necessary
or desirable in the normal conduct of its business, and its
qualification to do business as a foreign corporation or other
organization in all jurisdictions where it conducts business or
other activities making such qualification necessary, where the
failure to be so qualified would reasonably be expected to have a
Materially Adverse Effect.
Section 7.02. COMPLIANCE WITH LAWS, ETC. Comply, and
cause each of its Subsidiaries to comply with all Requirements of
Law (including, without limitation, the Environmental Laws
subject to the exception set forth in Section 6.08(a) where the
penalties, claims, fines, and other liabilities resulting from
noncompliance with such Environmental Laws do not involve amounts
in excess of $10,000,000 in the aggregate) and Contractual
Obligations applicable to or binding on any of them where the
failure to comply with such Requirements of Law and Contractual
Obligations would reasonably be expected to have a Materially
Adverse Effect.
Section 7.03. PAYMENT OF TAXES AND CLAIMS, ETC. Pay,
and cause each of its Subsidiaries to pay, (i) all taxes, assess-
ments and governmental charges imposed upon it or upon its prop-
erty, and (ii) all claims (including, without limitation, claims
for labor, materials, supplies or services) which might, if un-
paid, become a Lien upon its property, unless, in each case, the
validity or amount thereof is being contested in good faith by
appropriate proceedings and adequate reserves are maintained with
respect thereto.
Section 7.04. KEEPING OF BOOKS. Keep, and cause each
of its Subsidiaries to keep, proper books of record and account,
containing complete and accurate entries of all their respective
financial and business transactions which are required to be
maintained in order to prepare the consolidated financial
statements of Interface in conformity with GAAP.
Section 7.05. VISITATION, INSPECTION, ETC. Permit,
and cause each of its Subsidiaries to permit, any representative
of any Co-Agent or Lender to visit and inspect any of its
property, to examine its books and records and to make copies and
take extracts therefrom, and to discuss its affairs, finances and
accounts with its officers, all at such reasonable times and as
often as such Co-Agent or Lender may reasonably request after
reasonable prior notice to Interface; provided, however, that at
any time following the occurrence and during the continuance of a
Default or an Event of Default, no prior notice to Interface
shall be required. To the extent that any Co-Agent or Lender
thereby obtains possession of non-public information constituting
trade secrets, technology or other similar proprietary
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information identified to the Co-Agent or Lender in writing by
Interface as being subject to confidential treatment under this
Agreement, such party shall treat such information as
confidential. In any event, such Co-Agent or Lender may, subject
to Section 11.06(e), make disclosure to any assignee or
participant, or to any prospective assignee or participant, in
connection with an assignment or participation permitted thereby,
or as required or requested by any governmental agency or
representative thereof, or as required to defend any legal action
or to exercise any rights, remedies or powers available to the
Agents or Lender under the Credit Documents or as otherwise
required by law or pursuant to legal process; provided, that,
unless prohibited by applicable law or court order, such Co-Agent
or Lender shall notify Interface as promptly as practicable after
receipt thereof of any governmental request, subpoena or court
order (other than any such request, subpoena or court order in
connection with an examination of the financial condition of such
Co-Agent or Lender by any governmental agency) for disclosure of
any such non-public information; provided, however, that no delay
or failure to provide such notice shall give rise to any claim,
defense or right of offset against such Lender or Co-Agent
hereunder. The foregoing shall not prohibit disclosure of such
information to the extent it has become public information other
than through a disclosure by a Co-Agent or Lender not otherwise
permitted herein.
Section 7.06. INSURANCE; MAINTENANCE OF PROPERTIES.
(a) Maintain or cause to be maintained with
financially sound and reputable insurers, insurance with respect
to its properties and business, and the properties and business
of its Subsidiaries, against loss or damage of the kinds
customarily insured against by reputable companies in the same or
similar businesses, such insurance to be of such types and in
such amounts as is customary for such companies under similar
circumstances; provided, however, that in any event Interface and
each other Borrower shall use their best efforts to maintain, or
cause to be maintained, insurance in amounts and with coverages
not materially less favorable to any Consolidated Company as in
effect on the date of this Agreement, except where the costs of
maintaining such insurance would, in the judgment of both
Interface and the Co-Agents, be excessive.
(b) Cause, and cause each of the Consolidated
Companies to cause, all properties used or useful in the conduct
of its business to be maintained and kept in good condition,
repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs,
renewals, replacements, settlements and improvements thereof, all
as in the judgment of Interface may be necessary so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent Interface from
discontinuing the operation or maintenance of any such properties
if such discontinuance is, in the judgment of Interface,
desirable in the conduct of its business or the business of any
Consolidated Company.
Section 7.07. REPORTING COVENANTS. Furnish to each
Lender:
(a) Annual Financial Statements. As soon as available
and in any event within 120 days after the end of each
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fiscal year of Interface, balance sheets of the Consolidated
Companies as at the end of such year, presented on a
consolidated basis, and the related statements of income,
shareholders' equity, and cash flows of the Consolidated
Companies for such fiscal year, presented on a consolidated
basis, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable
detail and accompanied by a report thereon of BDO Seidman,
LLP or other independent public accountants of comparable
recognized national standing, which such report shall be
unqualified as to going concern and scope of audit and shall
state that such financial statements present fairly in all
material respects the financial condition as at the end of
such fiscal year on a consolidated basis, and the results of
operations and statements of cash flows of the Consolidated
Companies for such fiscal year in accordance with GAAP and
that the examination by such accountants in connection with
such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(b) Quarterly Financial Statements. As soon as avail-
able and in any event within 60 days after the end of each
fiscal quarter of Interface (other than the fourth fiscal
quarter), balance sheets of the Consolidated Companies as at
the end of such quarter presented on a consolidated basis
and the related statements of income, shareholders' equity,
and cash flows of the Consolidated Companies for such fiscal
quarter and for the portion of Interface's fiscal year ended
at the end of such quarter, presented on a consolidated
basis setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding
portion of Interface's previous fiscal year, all in
reasonable detail and certified by the chief financial
officer or principal accounting officer of Interface that
such financial statements fairly present in all material
respects the financial condition of the Consolidated
Companies as at the end of such fiscal quarter on a
consolidated basis, and the results of operations and
statements of cash flows of the Consolidated Companies for
such fiscal quarter and such portion of Interface's fiscal
year, in accordance with GAAP consistently applied (subject
to normal year-end audit adjustments and the absence of
certain footnotes);
(c) No Default/Compliance Certificate. Together with
the financial statements required pursuant to
subsections (a) and (b) above, a certificate of the
president, chief financial officer or principal accounting
officer of Interface (i) to the effect that, based upon a
review of the activities of the Consolidated Companies and
such financial statements during the period covered thereby,
there exists no Event of Default and no Default under this
Agreement, or if there exists an Event of Default or a
Default hereunder, specifying the nature thereof and the
proposed response thereto, and (ii) demonstrating in
reasonable detail compliance as at the end of such fiscal
year or such fiscal quarter with Section 7.09 and
Sections 8.01 through 8.05;
(d) [Intentionally Omitted]
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(e) Auditor's No Default Certificate. Together with
the financial statements required pursuant to subsection (a)
above, a certificate of the accountants who prepared the re-
port referred to therein, to the effect that, based upon
their audit, there exists no Default or Event of Default un-
der this Agreement, or if there exists a Default or Event of
Default hereunder, specifying the nature thereof;
(f) Annual Budget. Within 120 days after the
beginning of each fiscal year, an annual financial plan and
forecasted balance sheets and statements of income,
shareholders' equity, and cash flows for such fiscal year
for the Consolidated Companies presented on a consolidated
basis;
(g) Notice of Default. Promptly after any officer of
Interface or any other Borrower has notice or knowledge of
the occurrence of an Event of Default or a Default, a certi-
ficate of the chief financial officer or principal
accounting officer of Interface specifying the nature
thereof and the proposed response thereto;
(h) [Intentionally omitted]
(i) Litigation. Promptly after (i) the occurrence
thereof, notice of the institution of or any material
adverse development in any material action, suit or
proceeding or any governmental investigation or any
arbitration, before any court or arbitrator or any
governmental or administrative body, agency or official,
against any Consolidated Company, or any material property
of any thereof, or (ii) actual knowledge thereof, notice of
the threat of any such action, suit, proceeding,
investigation or arbitration;
(j) Environmental Notices. Promptly after receipt
thereof, notice of any actual or alleged violation, or
notice of any action, claim or request for information,
either judicial or administrative, from any governmental
authority relating to any actual or alleged claim, notice of
potential responsibility under or violation of any
Environmental Law, or any actual or alleged spill, leak,
disposal or other release of any waste, petroleum product,
or hazardous waste or Hazardous Substance by any Consoli-
dated Company which could result in penalties, fines, claims
or other liabilities to any Consolidated Company in amounts
in excess of $1,000,000;
(k) ERISA. (A)(i) Promptly after the occurrence
thereof with respect to any Plan of any Consolidated Company
or any ERISA Affiliate thereof, or any trust established
thereunder, notice of (A) a "reportable event" described in
Section 4043 of ERISA and the regulations issued from time
to time thereunder (other than a "reportable event" not
subject to the provisions for 30-day notice to the PBGC
under such regulations), or (B) any other event which could
subject any Consolidated Company to any tax, penalty or li-
ability under Title I or Title IV of ERISA or Chapter 43 of
the Tax Code, or any tax or penalty resulting from a loss of
deduction under Sections 162, 404 or 419 of the Tax Code, or
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any tax, penalty or liability under any Requirement of Law
applicable to any Foreign Plan, where any such taxes,
penalties or liabilities exceed or could exceed $1,000,000
in the aggregate;
(ii) Promptly after such notice must be provided
to the PBGC, or to a Plan participant, beneficiary or alter-
native payee, any notice required under Section 101(d),
302(f)(4), 303, 307, 4041(b)(1)(A) or 4041(c)(1)(A) of ERISA
or under Section 401(a)(29) or 412 of the Tax Code with re-
spect to any Plan of any Consolidated Company or any ERISA
Affiliate thereof;
(iii) Promptly after receipt, any notice received
by any Consolidated Company or any ERISA Affiliate thereof
concerning the intent of the PBGC or any other governmental
authority to terminate a Plan of such Company or ERISA Af-
filiate thereof which is subject to Title IV of ERISA, to
impose any liability on such Company or ERISA Affiliate
under Title IV of ERISA or Chapter 43 of the Tax Code;
(iv) Promptly upon the filing thereof with the
Internal Revenue Service ("IRS") or the Department of Labor
("DOL"), a copy of IRS Form 5500 or annual report for each
Plan of any Consolidated Company or ERISA Affiliate thereof
which is subject to Title IV of ERISA;
(v) Upon the request of the Co-Agents, (A) true
and complete copies of any and all documents, government re-
ports and IRS determination or opinion letters or rulings
for any Plan of any Consolidated Company from the IRS, PBGC
or DOL, (B) any reports filed with the IRS, PBGC or DOL with
respect to a Plan of the Consolidated Companies or any ERISA
Affiliate thereof, or (C) a current statement of withdrawal
liability for each Multiemployer Plan of any Consolidated
Company or any ERISA Affiliate thereof;
(B) Promptly upon any Consolidated Company becom-
ing aware thereof, notice that (i) any material
contributions to any Foreign Plan have not been made by the
required due date for such contribution and such default
cannot immediately be remedied, (ii) any Foreign Plan is not
funded to the extent required by the law of the jurisdiction
whose law governs such Foreign Plan based on the actuarial
assumptions reasonably used at any time, or (iii) a material
change is anticipated to any Foreign Plan that may have a
Materially Adverse Effect.
(l) Liens. Promptly upon any Consolidated Company be-
coming aware thereof, notice of the filing of any federal
statutory Lien, tax or other state or local government Lien
or any other Lien affecting their respective properties,
other than those Liens expressly permitted by Section 8.02;
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(m) Domestication of Subsidiaries. Not less than
30 days prior thereto, notice of any intended domestication
of any Foreign Subsidiary as a United States corporation,
whether by merger, stock transfer or otherwise;
(n) Public Filings, Etc. Promptly upon the filing
thereof or otherwise becoming available, copies of all
financial statements, annual, quarterly and special reports,
proxy statements and notices sent or made available
generally by Interface to its public security holders, of
all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any of them
with any securities exchange, and of all press releases and
other statements made available generally to the public
containing material developments in the business or
financial condition of Interface and the other Consolidated
Companies;
(o) Accountants' Reports. Promptly upon receipt
thereof, copies of all financial statements of, and all re-
ports submitted by, independent public accountants to Inter-
face in connection with each annual, interim, or special au-
dit of Interface's financial statements, including without
limitation, the comment letter submitted by such accountants
to management in connection with their annual audit;
(p) Burdensome Restrictions, Etc. Promptly upon the
existence or occurrence thereof, notice of the existence or
occurrence of (i) any Contractual Obligation or Requirement
of Law described in Section 6.11, (ii) failure of any Con-
solidated Company to hold in full force and effect those
trademarks, service marks, patents, trade names, copyrights,
licenses and similar rights necessary in the normal conduct
of its business, the loss or absence of which could have a
Materially Adverse Effect, and (iii) any strike, labor dis-
pute, slow down or work stoppage as described in Sec-
tion 6.21;
(q) New Material Subsidiaries. Within 30 days after
the formation or acquisition of any Material Subsidiary, or
any other event resulting in the creation of a new Material
Subsidiary, notice of the formation or acquisition of such
Material Subsidiary or such occurrence, including a descrip-
tion of the assets of such entity, the activities in which
it will be engaged, and such other information as the
Co-Agents may request;
(r) Intercompany Asset Transfers. Promptly upon the
occurrence thereof, notice of the transfer of any assets
from any Credit Party to any other Consolidated Company that
is not a Credit Party (in any transaction or series of
related transactions), excluding (i) sales or other
transfers of assets in the ordinary course of business,
where the Asset Value of such assets is less than
$5,000,000, and (ii) sales of accounts receivables or
undivided ownership interests therein pursuant to the terms
of the Accounts Receivable Facilities.
(s) Asset Sales. At any time that the aggregate
amount of Asset Sales made by the Consolidated Companies
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after November 15, 1995 exceeds $15,000,000 (based on the
Asset Values), prompt notice of any additional Asset Sale or
related series of Asset Sales involving Asset Values of
$1,000,000 or more; and
(t) Other Information. With reasonable promptness,
such other information about the Consolidated Companies as
any Co-Agent or Lender may reasonably request from time to
time.
Section 7.08. YEAR 2000 ISSUES.
Take, and cause its Subsidiaries to take, all actions
reasonably necessary to assure that the Year 2000 Issues, as such
Issues pertain to the computer programs and systems of the
Consolidated Companies (but not those of their third party
customers, suppliers or vendors), will not have a Materially
Adverse Effect. Interface and the other Consolidated Companies
will use their best efforts to assure that its third-party
customers, suppliers and vendors develop and implement programs
to remediate in all material respects all Year 2000 Issues
reasonably anticipated by Interface or the other Consolidated
Companies to have a Materially Adverse Effect. Upon request by
any Co-Agent or Lender, Interface will provide the Lenders a
written description of its Year 2000 program, including updates
and progress reports. Interface will advise the Co-Agents and
the Lenders promptly of any reasonably anticipated Materially
Adverse Effect as a result of Year 2000 Issues.
Section 7.09. FINANCIAL COVENANTS.
(a) Interest Coverage. Maintain as of the last day of
each fiscal quarter, calculated with respect to the immediately
preceding four fiscal quarters, an Interest Coverage Ratio not
less than 2.25 to 1.00.
(b) Funded Debt Coverage. Maintain as of the last day
of each fiscal quarter, a maximum Funded Debt Coverage Ratio as
shown below for each fiscal quarter ending during the periods
indicated:
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Maximum Funded
Debt Coverage
Period Ratio
------ --------------
April 6, 1998 through
July 1, 2001 3.75:1.00
July 2, 2001 and thereafter 3.50:1.00
(c) Net Worth. Maintain at all times Consolidated Net
Worth not less than an amount equal to the sum of (i)
$292,842,000, (ii) 50% of Consolidated Net Income for each fiscal
quarter of Interface, beginning with the fiscal quarter
commencing on December 29, 1997, that the Consolidated Net Income
for such fiscal quarter is a positive number (and without
deduction for losses for any fiscal quarter), and (iii) 100% of
the cash proceeds (net of underwriting commissions, placement
fees and other customary costs and expenses directly incurred in
connection therewith) of the March 1998 Equity Issuance and all
other issuances of equity securities (including warrants, options
and other rights to acquire such equity securities) of Interface
occurring after December 28, 1997.
Section 7.10. NOTICES UNDER CERTAIN OTHER
INDEBTEDNESS. Immediately upon its receipt thereof, Interface
shall furnish the Co-Agents a copy of any notice received by it
or any other Consolidated Company from the holder(s) of
Indebtedness referred to in Section 8.01(b), (c), (e), (g), (i),
(j) or (k) (or from any trustee, agent, attorney, or other party
acting on behalf of such holder(s)) in an amount which, in the
(i) the existence or occurrence of any default or event of
default with respect to such Indebtedness under the terms of any
indenture, loan or credit agreement, debenture, note, or other
document evidencing or governing such Indebtedness, or (ii) with
respect to any Interface Control Debt, the existence or
occurrence of any event or condition which requires or permits
such holder(s) to exercise rights under any Change in Control
Provision. Interface agrees to take such actions as may be
necessary to require the holder(s) of Interface Control Debt (or
any trustee or agent acting on their behalf) to furnish copies of
all such notices directly to the Co-Agents simultaneously with
the furnishing thereof to Interface, and that such requirement
may not be altered or rescinded without the prior written consent
of the Co-Agents.
Section 7.11. ADDITIONAL CREDIT PARTIES AND
COLLATERAL. Promptly after (i) the formation or acquisition of
any Material Subsidiary not listed on Schedule 6.13, (ii) the
transfer of assets to any Consolidated Company if notice thereof
is required to be given pursuant to Section 7.07(r) and as a
result thereof the recipient of such assets becomes a Material
Subsidiary, (iii) the domestication of any Foreign Subsidiary
that is a Material Subsidiary, or (iv) the occurrence of any
other event creating a new Material Subsidiary (other than
Interface SPC which shall not be deemed to be a Material
Subsidiary for the purposes of this Section 7.11), Interface
shall cause to be executed and delivered a Guaranty Agreement
from each such Material Subsidiary that is not a Foreign
Subsidiary, together with related documents of the kind described
in Section 5.01(c), (e), (f), (g), (h), and (q), all in form and
substance satisfactory to the Co-Agents.
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Section 7.12. ACCOUNTS RECEIVABLE FACILITY. The
Accounts Receivable Facilities shall provide to Interface and
those Subsidiaries that are parties to the Receivables Transfer
Agreements financing for accounts receivable of an aggregate
amount outstanding at any time not to exceed $100,000,000.
ARTICLE VIII.
NEGATIVE COVENANTS
So long as any Commitment remains in effect hereunder
or any Note shall remain unpaid, neither Interface (whether or
not it is a Borrower hereunder) nor any other Borrower will or
will permit any Subsidiary to:
Section 8.01. INDEBTEDNESS. Create, incur, assume or
suffer to exist any Indebtedness, other than:
(a) Indebtedness under this Agreement;
(b) The Indebtedness outstanding on the Closing Date
and described on Schedule 8.01(b);
(c) purchase money Indebtedness to the extent secured
by a Lien permitted by Section 8.02(b) or 8.02(f);
(d) unsecured current liabilities (other than li-
abilities for borrowed money or liabilities evidenced by
promissory notes, bonds or similar instruments) incurred in
the ordinary course of business and either (i) not more than
90 days past due, or (ii) being disputed in good faith by
appropriate proceedings with reserves for such disputed li-
ability maintained in conformity with GAAP;
(e) Indebtedness incurred with respect to (i) the Let-
ters of Credit issued for the account of any Consolidated
Company pursuant to the Letter of Credit Agreement, and
(ii) unsecured letters of credit issued for the account of
any Consolidated Subsidiary in the ordinary course of busi-
ness in aggregate outstanding stated amounts not to exceed
$5,000,000;
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(f) Indebtedness (other than liabilities for borrowed
money or liabilities evidenced by promissory notes, bonds or
similar instruments) permitted under Section 8.02(c) or (d)
or Section 8.06, or permitted under Section 8.03 in connec-
tion with the purchase, lease or other acquisition of prop-
erty or assets where such Indebtedness is to the seller of
such property or assets and represents a deferral of payment
for such property or assets for a period not to exceed the
lesser of (i) normal trade terms for such property or asset,
or (ii) 180 days (commencing from the date of delivery or,
if applicable, the date of installation of such property or
asset);
(g) The Senior Notes, the Senior Subordinated Notes,
and other Subordinated Debt, but the aggregate outstanding
principal amount of such other Subordinated Debt shall at no
time exceed $50,000,000;
(h) the Intercompany Loans described on Schedule 6.20
and any other loans between Consolidated Companies provided
that (i) each loan or other extension of credit made by a
Guarantor to another Consolidated Company that is not a
Guarantor hereunder shall be made payable on demand and
shall not be subordinated to other obligations of such
Consolidated Company and all such loans and extensions of
credit shall not exceed $35,000,000 in the aggregate at any
one time outstanding (excluding Intercompany Loans listed on
Schedule 6.20 and other Intercompany Loans made for the
purpose of and used reasonably concurrently for acquisitions
permitted by Section 8.03) unless otherwise agreed in
writing by the Required Lenders, (ii) each loan or other
extension of credit made to a Guarantor by another
Consolidated Company that is not a Guarantor hereunder shall
be made on a subordinated basis consistent with the
subordinated Intercompany Loans in existence on the date of
this Agreement and no portion of the principal amount
thereof shall be payable prior to the Maturity Date, and
(iii) such loans or other extensions of credit are otherwise
permitted pursuant to the limitations of Section 8.05(c);
(i) Indebtedness under Interest Rate Contract(s) and
Currency Contract(s) entered into in the ordinary course of
business consistent with past practices;
(j) Unsecured lines of credit, revolving credit, and
overdraft credit facilities described on Schedule 8.01(j),
and each extension, renewal, and replacement of such credit
facilities for principal amounts not in excess of the
respective principal amounts shown on Schedule 8.01(j), and
having maturities in each case not longer than two (2) years
with annual renewals thereafter;
(k) Indebtedness, if any, owing by Interface or Inter-
face SPC pursuant to the Accounts Receivable Facilities and
Indebtedness, if any, owing by any other Consolidated
Company party to the Receivables Transfer Agreements with
respect thereto;
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(l) Indebtedness consisting of contingent obligations
under indemnities, guarantees, and reimbursement agreements
in favor of Persons issuing surety bonds, guarantees and
similar undertakings issued to support performance
obligations of any of the Consolidated Companies incurred in
the ordinary course of business; and
(m) Other Indebtedness at any one time outstanding not
to exceed an amount equal to ten percent (10%) of
Consolidated Net Worth.
Section 8.02. LIENS. Create, incur, assume or suffer
to exist any Lien on any of its property now owned or hereafter
acquired to secure any Indebtedness other than:
(a) Liens existing on the date hereof disclosed on
Schedule 8.02;
(b) any Lien on any property securing Indebtedness in-
curred or assumed for the purpose of financing all or any
part of the acquisition cost of such property, provided that
such Lien does not extend to any other property, and
provided further that the aggregate amount of Indebtedness
secured by all such Liens at any time does not exceed
$15,000,000;
(c) Liens for taxes not yet due, and Liens for taxes
or Liens imposed by ERISA which are being contested in good
faith by appropriate proceedings and with respect to which
adequate reserves are being maintained;
(d) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other
Liens imposed by law created in the ordinary course of
business for amounts not yet due or which are being
contested in good faith by appropriate proceedings and with
respect to which adequate reserves are being maintained;
(e) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security,
or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds
and other similar obligations (exclusive of obligations for
the payment of borrowed money);
(f) Liens (other than those permitted by paragraphs
(a) through (e) of this Section 8.02) encumbering assets
having an Asset Value not greater than $10,000,000 in the
aggregate;
(g) Liens in favor of the Collateral Agent securing
the Obligations hereunder;
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(h) Liens on any property included in the IRB Col-
lateral as may be approved by the Collateral Agent pursuant
to the terms of the Letter of Credit Agreement; and
(i) Liens, if any, that may be deemed to have been
granted by any Consolidated Company in favor of SPARCC, the
Bank Purchasers or their respective agents, on accounts
receivable and related property of such Consolidated
Companies as a result of the sale and assignment thereof (or
of undivided ownership interests therein) to SPARCC, the
Bank Purchasers or their respective agents pursuant to the
Accounts Receivable Facilities.
Section 8.03. MERGERS, ACQUISITIONS, SALES, ETC.
Merge or consolidate with any other Person, or sell, lease, or
otherwise dispose of its accounts, property or other assets
(including capital stock of Subsidiaries), or purchase, lease or
otherwise acquire all or any substantial portion of the property
or assets (including capital stock) of any Person; provided,
however, that the foregoing restrictions shall not be applicable
to (i) sales of inventory in the ordinary course of business,
(ii) sales of accounts receivable (or of undivided ownership
interests therein) pursuant to the Accounts Receivable Facilities
so long as the total "Investment" of all purchasers of such
accounts receivable under such Accounts Receivable Facilities
shall not exceed $100,000,000 in aggregate amount outstanding at
any time, (iii) Asset Sales where the Asset Values do not exceed
(A) an amount equal to five percent (5%) of the total assets of
Interface and the other Consolidated Companies on a consolidated
basis in any fiscal year, or (B) an amount equal to ten percent
(10%) of the total assets of Interface and the other Consolidated
Subsidiaries on a cumulative consolidated basis after
December 28, 1997, or (iv) purchases or other acquisitions of all
or any substantial portion of the property or assets of any
Person (including capital stock) during any fiscal year, provided
that in the case of any such purchase or other acquisition (x)
such transaction has been approved in advance by a majority of
the board of directors of the seller, and (y) where the cash
portion of the purchase price payable in such transaction exceeds
$50,000,000, such transaction has been (1) demonstrated to the
satisfaction of the Co-Agents, through the preparation and
delivery by Interface to the Lenders prior to the execution of a
contractual obligation to make such purchase, of pro forma
financial statements demonstrating the effect of such transaction
(in such detail and using such form of presentation of historical
and forecasted financial information as may be satisfactory to
the Co-Agents), not to adversely affect the continued compliance
of the Consolidated Companies with Section 7.09 and the other
terms of this Agreement, and (2) approved by the Required
Lenders; provided, however, that no transaction pursuant to
clauses (ii), (iii) or (iv) above shall be permitted if any
Default or Event of Default otherwise exists at the time of such
transaction or would otherwise exist as a result of such transac-
tion.
Section 8.04. PAYMENTS OR REFINANCINGS IN RESPECT OF
SUBORDINATED DEBT OR EQUITY SECURITIES. Interface shall not make
any payment to purchase, redeem, retire or acquire any of its
Subordinated Debt or equity securities or any option, warrant, or
other right to acquire such Subordinated Debt or equity
securities, or refinance or replace its Senior Subordinated Notes
due 2005 with any Senior Notes (as provided in the definition of
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the term "Senior Notes"), except where (i) no Default or Event of
Default shall have occurred or exist immediately prior to such
payment or shall occur or exist as a result of such payment,
refinancing or replacement, and (ii) the Funded Debt Coverage
Ratio as of the end of the then most recent fiscal quarter of
Interface (both on an actual basis and after giving pro forma
effect to all such payments, refinancings or replacements) is
less than 3.25:1.00. For purposes of determining the Funded Debt
Coverage Ratio in the preceding sentence, the Consolidated
Adjusted EBITDA shall be increased by any cash and non-cash
charges incurred in connection with such purchase, redemption,
retirement or other acquisition to the extent such charges had
been deducted in calculating the Consolidated Adjusted EBITDA.
Section 8.05. INVESTMENTS, LOANS, ETC. Make, permit
or hold any Investments in any Person, or otherwise acquire or
hold any Subsidiaries, other than:
(a) Investments in Subsidiaries that are Guarantors
under this Agreement and Investments by Interface in
Interface SPC in the form of the Receivables Subordinated
Notes;
(b) Investments made and simultaneously used for the
acquisition of the capital stock of any Person, or all or
any substantial portion of the property or assets of any
Person, in an acquisition permitted pursuant to
Section 8.03;
(c) Investments in Subsidiaries, other than those Sub-
sidiaries that are Guarantors under this Agreement, made af-
ter October 2, 1994, in an aggregate amount not to exceed
$35,000,000 unless otherwise consented to in writing by the
Required Lenders; provided, however, that no Investment may
be made at any time that a Default or Event of Default has
occurred and is continuing or would exist as a result of
such Investment;
(d) direct obligations of the United States or any
agency thereof, or obligations guaranteed by the United
States or any agency thereof, in each case supported by the
full faith and credit of the United States and maturing
within one year from the date of creation thereof;
(e) commercial paper maturing within one year from the
date of creation thereof rated in the highest grade by a na-
tionally recognized credit rating agency;
(f) time deposits maturing within one year from the
date of creation thereof with, including certificates of de-
posit issued by, any office located in the United States of
any bank or trust company which is organized under the laws
of the United States or any state thereof and has capital,
surplus and undivided profits aggregating at least
$500,000,000, including without limitation, any such
deposits in Eurodollars issued by a foreign branch of any
such bank or trust company;
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(g) Investments made by Plans and Foreign Plans; and
(h) Investments (other than those permitted by para-
graphs (a) through (g) above) in an aggregate amount not to
exceed an amount equal to 15% of Interface's Consolidated
Net Worth.
Section 8.06. SALE AND LEASEBACK TRANSACTIONS. Sell
or transfer any property, real or personal, whether now owned or
hereafter acquired, and thereafter rent or lease such property or
other property which any Consolidated Company intends to use for
substantially the same purpose or purposes as the property being
sold or transferred, except for such transactions occurring after
the date of this Agreement (i) with respect to properties first
acquired by any of the Consolidated Companies after the date of
this Agreement with the intent at the time of such acquisition
that such properties be the subjects of such transactions, and
such transactions are actually consummated within 60 days after
the initial acquisition of such properties, so long as the Asset
Values of such properties do not exceed $25,000,000 in the ag-
gregate, and (ii) with respect to all other properties in all
such transactions, so long as the Asset Values of such other
properties do not exceed $5,000,000 in the aggregate.
Section 8.07. TRANSACTIONS WITH AFFILIATES.
(a) Enter into any material transaction or series of
related transactions which in the aggregate would be material,
whether or not in the ordinary course of business, with any Af-
filiate of any Consolidated Company (but excluding any Affiliate
which is also a Consolidated Company), other than on terms and
conditions substantially as favorable to such Consolidated
Company as would be obtained by such Consolidated Company at the
time in a comparable arm's-length transaction with a Person other
than an Affiliate.
(b) Convey or transfer to any other Person (including
any other Consolidated Company) any real property, buildings, or
fixtures used in the manufacturing or production operations of
any Consolidated Company, or convey or transfer to any other
Consolidated Company any other assets (excluding conveyances or
transfers in the ordinary course of business) if at the time of
such conveyance or transfer any Default or Event of Default
exists or would exist as a result of such conveyance or transfer.
Section 8.08. OPTIONAL PREPAYMENTS. Directly or indirectly,
prepay, purchase, redeem, retire, defease or otherwise
acquire, or make any optional payment on account of any principal
of, interest on, or premium payable in connection with the optional
prepayment, redemption or retirement of, any of its
Indebtedness, or give a notice of redemption with respect to any
such Indebtedness, or make any payment in violation of the
subordination provisions of any Subordinated Debt, except with
respect to (i) the Obligations under this Agreement and the
Notes, (ii) payments in respect of Subordinated Debt permitted
pursuant to Section 8.04, (iii) prepayments of Indebtedness out-
standing pursuant to revolving credit, overdraft and line of
credit facilities permitted pursuant to Section 8.01,
(iv) permitted prepayments of Indebtedness incurred in connection
with industrial revenue bonds upon the occurrence of a
determination of an event of taxability entitling the holder(s)
thereof to receive a higher rate of interest, (v) Intercompany
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Loans made or outstanding pursuant to Section 8.01(h)(i) where
demand for payment has been made in accordance with Section 8.13,
(vi) Intercompany Loans made or outstanding pursuant to
Section 8.01(h)(ii) upon the prior written consent of the Co-
Agents, and (vi) Indebtedness arising under the Receivables Sale
Agreements.
Section 8.09. CHANGES IN BUSINESS. Enter into any
business which is substantially different from that presently
conducted by the Consolidated Companies taken as a whole, except
where the aggregate Investment made, and other funds expended or
committed, with respect to such business does not exceed
$15,000,000.
Section 8.10. ERISA. Take or fail to take any action
with respect to any Plan or Foreign Plan of any Consolidated Com-
pany or, with respect to its ERISA Affiliates, any Plans which
are subject to Title IV of ERISA or to continuation health care
requirements for group health plans under the Tax Code, including
without limitation (i) establishing any such Plan, (ii) amending
any such Plan (except where required to comply with applicable
law), (iii) terminating or withdrawing from any such Plan, or
(iv) incurring an amount of unfunded benefit liabilities, as de-
fined in Section 4001(a)(18) of ERISA, or any withdrawal
liability under Title IV of ERISA with respect to any such Plan,
or any unfunded liabilities under any Foreign Plan, without first
obtaining the written approval of the Required Lenders, where
such actions or failures could result in a Material Adverse
Effect.
Section 8.11. ADDITIONAL NEGATIVE PLEDGES. Create or
otherwise cause or suffer to exist or become effective, directly
or indirectly, any prohibition or restriction on the creation or
existence of any Lien upon any asset of any Consolidated Company,
other than pursuant to (i) Section 8.02 of this Agreement,
Section 4.7 of the Senior Notes Indenture, and Section 4.10 of
the Senior Subordinated Notes Indenture, (ii) the terms of any
agreement, instrument or other document pursuant to which any In-
debtedness permitted by Section 8.02(b) or 8.02(g) is incurred by
any Consolidated Company, so long as such prohibition or restric-
tion applies only to the property or asset being financed by such
Indebtedness, (iii) any requirement of applicable law or any
regulatory authority having jurisdiction over any of the Consoli-
dated Companies; and (iv) the terms of the Accounts Receivable
Facilities with respect to the accounts receivable and related
property transferred thereunder and the stock and other assets of
Interface SPC.
Section 8.12. LIMITATION ON PAYMENT RESTRICTIONS AF-
FECTING CONSOLIDATED COMPANIES. Create or otherwise cause or
suffer to exist or become effective, any consensual encumbrance
or restriction on the ability of any Consolidated Company to
- 117 -<PAGE>
(i) pay dividends or make any other distributions on such
Consolidated Company's stock, other than the restrictions on
payment of dividends on Interface's common stock imposed in
connection with the Convertible Preferred Stock, or (ii) pay any
indebtedness owed to Interface or any other Consolidated Company,
or (iii) transfer any of its property or assets to Interface or
any other Consolidated Company, except any consensual encumbrance
or restriction existing under the Credit Documents.
Notwithstanding the foregoing, nothing in this Section 8.12 shall
be deemed to prohibit restrictions on dividends and distributions
payable by Interface SPC, set forth in, or required by, the terms
of any document executed in connection with the Accounts
Receivable Facilities.
Section 8.13. ACTIONS UNDER CERTAIN DOCUMENTS.
Without the prior written consent of the Co-Agents (which consent
shall not be unreasonably withheld), modify, amend, cancel or
rescind the Intercompany Loans or Intercompany Loan Documents, or
Subordinated Debt or any agreements or documents evidencing or
governing Subordinated Debt (except that a loan between
Consolidated Companies as permitted by Section 8.01(h) may be
modified or amended so long as it otherwise satisfies the
requirements of clause (ii) of Section 8.01(h)), or make demand
of payment or accept payment on any Intercompany Loans permitted
by Section 8.01(h)(ii), except that current interest accrued
thereon as of the date of this Agreement and all interest
subsequently accruing thereon (whether or not paid currently) may
be paid unless an Event of Default has occurred and is
continuing. In addition to the foregoing, without the prior
consent of the Co-Agents, the Consolidated Companies shall not
enter into any amendment or modification of the documents
executed in connection with the Accounts Receivable Facilities
which changes the definition of "Investment" or "Event of
Termination" used therein or any other material provision
thereof.
Section 8.14. DESIGNATED SENIOR INDEBTEDNESS. Without
the prior written consent of the Co-Agents, cause any
Indebtedness of Interface or any of its Subsidiaries, other than
the Senior Notes, to become "Designated Senior Indebtedness" as
provided in the Senior Subordinated Notes Indenture.
ARTICLE IX.
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any
of the following specified events (each an "Event of Default"):
Section 9.01. PAYMENTS. Any Borrower shall fail to
make promptly when due (including, without limitation, by manda-
tory prepayment) any principal payment with respect to the Loans,
or any Borrower shall fail to make within five (5) days after the
due date thereof any payment of interest, fee or other amount
payable hereunder;
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Section 9.02. COVENANTS WITHOUT NOTICE. Interface or
any other Borrower shall fail to observe or perform any covenant
or agreement contained in Sections 7.07(g), 7.09, 7.12, 8.01
through 8.06, 8.08, 8.09, and 8.11 through 8.14;
Section 9.03. OTHER COVENANTS. Interface or any other
Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement, other than those referred
to in Sections 9.01 and 9.02, and, if capable of being remedied,
such failure shall remain unremedied for 30 days after the
earlier of (i) Interface's or any other Borrower's obtaining
knowledge thereof, or (ii) written notice thereof shall have been
given to Interface by any Co-Agent or Lender;
Section 9.04. REPRESENTATIONS. Any representation or
warranty made or deemed to be made by Interface, any other Bor-
rower or any other Credit Party or by any of its officers under
this Agreement or any other Credit Document (including the Sched-
ules attached thereto), or any certificate or other document sub-
mitted to the Agents or the Lenders by any such Person pursuant
to the terms of this Agreement or any other Credit Document,
shall be incorrect in any material respect when made or deemed to
be made or submitted;
Section 9.05. NON-PAYMENTS OF OTHER INDEBTEDNESS. Any
Consolidated Company shall fail to make when due (whether at
stated maturity, by acceleration, on demand or otherwise, and af-
ter giving effect to any applicable grace period) any payment of
principal of or interest on any Indebtedness (other than the
Obligations) exceeding $10,000,000 in the aggregate;
Section 9.06. DEFAULTS UNDER OTHER AGREEMENTS. Any
Consolidated Company shall fail to observe or perform within any
applicable grace period any covenants or agreements contained in
any agreements or instruments relating to any of its Indebtedness
exceeding $10,000,000 in the aggregate, or any other event shall
occur if the effect of such failure or other event is to acceler-
ate, or to permit the holder of such Indebtedness or any other
Person to accelerate, the maturity of such Indebtedness; or any
such Indebtedness shall be required to be prepaid (other than by
a regularly scheduled required prepayment) in whole or in part
prior to its stated maturity;
Section 9.07. BANKRUPTCY. Interface or any other Material
Company shall commence a voluntary case concerning itself
under the Bankruptcy Code or applicable foreign bankruptcy laws;
or an involuntary case for bankruptcy is commenced against any
Material Company and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement
of the case; or a custodian (as defined in the Bankruptcy Code)
or similar official under applicable foreign bankruptcy laws is
appointed for, or takes charge of, all or any substantial part of
the property of any Material Company; or any Material Company
commences proceedings of its own bankruptcy or to be granted a
suspension of payments or any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of
any jurisdiction, whether now or hereafter in effect, relating to
any Material Company or there is commenced against any Material
- 119 -<PAGE>
Company any such proceeding which remains undismissed for a
period of 60 days; or any Material Company is adjudicated
insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or any Material
Company suffers any appointment of any custodian or the like for
it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or any Material
Company makes a general assignment for the benefit of creditors;
or any Material Company shall fail to pay, or shall state that it
is unable to pay, or shall be unable to pay, its debts generally
as they become due; or any Material Company shall call a meeting
of its creditors with a view to arranging a composition or
adjustment of its debts; or any Material Company shall by any act
or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action is
taken by any Material Company for the purpose of effecting any of
the foregoing;
Section 9.08. ERISA. A Plan or Foreign Plan of a Con-
solidated Company or a Plan subject to Title IV of ERISA of any
of its ERISA Affiliates
(i) shall fail to be funded in accordance with the
minimum funding standard required by applicable law, the
terms of such Plan or Foreign Plan, Section 412 of the Tax
Code or Section 302 of ERISA for any plan year or a waiver
of such standard is sought or granted with respect to such
Plan or Foreign Plan under applicable law, the terms of such
Plan or Foreign Plan or Section 412 of the Tax Code or
Section 303 of ERISA; or
(ii) is being, or has been, terminated or the subject
of termination proceedings under applicable law or the terms of
such Plan or Foreign Plan; or
(iii) shall require a Consolidated Company to provide
security under applicable law, the terms of such Plan or Foreign
Plan, Section 401 or 412 of the Tax Code or Section 306 or 307 of
ERISA; or
(iv) results in a liability to a Consolidated Company
under applicable law, the terms of such Plan or Foreign Plan, or
Title IV of ERISA;
and there shall result from any such failure, waiver,
termination or other event a liability to the PBGC (or any
similar Person with respect to any Foreign Plan) or a Plan that
would have a Materially Adverse Effect.
Section 9.09. MONEY JUDGMENT. A judgment or order for
the payment of money in excess of $10,000,000 or otherwise having
a Materially Adverse Effect shall be rendered against Interface
or any other Material Company and such judgment or order shall
continue unsatisfied (in the case of a money judgment) and in
effect for a period of 30 days during which execution shall not
be effectively stayed or deferred (whether by action of a court,
by agreement or otherwise);
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Section 9.10. OWNERSHIP OF CREDIT PARTIES. If any
Borrower (other than Interface) shall at any time fail to be a
wholly owned Subsidiary of Interface, either directly or indi-
rectly through another wholly owned Subsidiary of Interface, ex-
cept where all outstanding Loans made to such Borrower have been
paid in full and the Lenders shall have no further obligation to
extend additional credit to such Borrower;
Section 9.11. CHANGE IN CONTROL OF INTERFACE. (i) Any
Change in Control shall occur or exist, or (ii) any event or
condition shall occur or exist which, pursuant to the terms of
any Change in Control Provision, requires or permits the
holder(s) of Interface Control Debt to require that such
Interface Control Debt be redeemed, repurchased, defeased,
prepaid or repaid, in whole or in part, or the maturity of such
Interface Control Debt to be accelerated in any respect;
provided, however, that no Event of Default hereunder shall be
deemed to exist upon the occurrence of any event or condition
described in the foregoing clauses (i) or (ii) until thirty
(30) days after the first occurrence or existence of such event
or condition;
Section 9.12. DEFAULT UNDER OTHER CREDIT DOCUMENTS.
There shall exist or occur any "Event of Default" as provided un-
der the terms of any other Credit Document (excluding the IRB
Collateral Documents), or any Credit Document (including the IRB
Collateral Documents) ceases to be in full force and effect or
the validity or enforceability thereof is disaffirmed by or on
behalf of Interface or any other Credit Party, or at any time it
is or becomes unlawful for Interface or any other Credit Party to
perform or comply with its obligations under any Credit Document
(including the IRB Collateral Documents), or the obligations of
Interface or any other Credit Party under any Credit Document
(including the IRB Collateral Documents) are not or cease to be
legal, valid and binding on Interface or any such Credit Party;
Section 9.13. DEFAULT UNDER INTEREST RATE CONTRACT OR
CURRENCY CONTRACT. Any event or condition shall occur or exist
which causes, or permits any party thereto (other than the Con-
solidated Company or Companies party thereto) to cause, the
termination or cancellation of the FNBC Currency Contract or any
other Interest Rate Contract or Currency Contract (excluding any
termination or cancellation effected at the option of Interface
in the exercise of Interface's business judgment or any other
termination or cancellation of such Interest Rate Contract or
Currency Contract not resulting from any breach of such agreement
or default thereunder by any Consolidated Company or Companies),
and as a result of such cancellation or termination, any of the
Consolidated Companies would be required to make net payments
thereunder in excess of $10,000,000 in the aggregate;
Section 9.14. ATTACHMENTS. An attachment or similar
action shall be made on or taken against any of the assets of any
Consolidated Company with an Asset Value exceeding $10,000,000 in
aggregate and is not removed within 90 days of the same being
made;
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Section 9.15. ACCOUNTS RECEIVABLE FACILITY. There
shall exist and continue for five (5) days any "Event of
Termination" as provided under the terms of any of the
Receivables Backup Purchase Agreements or the Receivables Sale
Agreements (collectively, the "Receivables Securitization
Agreements") other than an Event of Termination which arises
from: (i) the matters described in subsection 12.1(f) of the
Receivables Securitization Agreements; (ii) any reduction in
Interface's credit rating (or the imputed equivalent thereof);
(iii) the operation of a cross-termination provision in such
Receivables Securitization Agreements (that is, a provision in
such Receivables Securitization Agreements under which the
occurrence of any "Event of Termination" under any other
Receivables Securitization Agreement is also an Event of
Termination under such Receivables Securitization Agreements)
which is not otherwise an Event of Default hereunder; (iv) any
Consolidated Company's failure to comply with, or its making of
any changes in or supplements to, its credit and collection
policies; (v) any failure by Interface to maintain the minimum
net worth required in Interface SPC under the terms of such
Receivables Securitization Agreements; (vi) any amendment of the
terms of any Consolidated Company's accounts receivable or any
contract relating thereto or any waiver by such Consolidated
Company of the terms and conditions of such contract; (vii) any
change in the character of the business of any of the
Consolidated Companies (which is not a violation of Section 8.09
hereof) or in their respective credit and collection policies;
(viii) Interface SPC's entering into or becoming a party to any
agreement or instruments incidental to its administration or
operation other than those expressly permitted under the terms of
such Receivables Securitization Agreement; (ix) any determination
that the payment by Interface SPC to any of the Consolidated
Companies of 100% of the net book value of the accounts
receivable does not constitute the "reasonably equivalent value"
of the accounts receivable and related rights sold by such
Consolidated Company to Interface SPC in connection with the
Accounts Receivable Facilities; (x) any change in the Certificate
of Incorporation or By-Laws of Interface SPC; (xi) any failure by
Interface SPC or Interface to comply with any of the affirmative
or negative covenants in such Receivables Securitization
Agreement which relate to the establishment and maintenance of
Interface SPC's separate legal identity; (xii) the past-due or
defaulted accounts receivable of any or all of the Consolidated
Companies exceeding any applicable limitations set forth in such
Receivables Securitization Agreement; (xiii) the aggregate
"Dilutions" (as such term is defined in such Receivables
Securitization Agreement) on any or all of the Consolidated
Companies' accounts receivable exceeding any applicable
limitation set forth in such Receivables Securitization
Agreement; or (xiv) the "Portfolio Turnover" (as such term is
used in such Receivables Securitization Agreement) exceeding any
applicable limitation set forth in such Receivables
Securitization Agreement;
then, and in any such event, and at any time thereafter if any
Event of Default shall then be continuing, the Co-Agents may, and
upon the written or telex request of the Required Lenders, shall,
by written notice to the Borrowers, take any or all of the
following actions, without prejudice to the rights of the
Co-Agents, any Lender or the holder of any Note to enforce its
claims against the Borrowers or any other Credit Party:
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(i) declare all Commitments terminated, whereupon the pro rata
Commitments of each Lender shall terminate immediately and any
commitment fee shall forthwith become due and payable without any
other notice of any kind; and (ii) declare the principal of and
any accrued interest on the Loans, and all other Obligations
owing hereunder, to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by each
of the Borrowers; provided, that, if an Event of Default
specified in Section 10.07 shall occur, the result which would
occur upon the giving of written notice by the Co-Agents to the
Borrowers and any other Credit Party, as specified in clauses (i)
and (ii) above, shall occur automatically without the giving of
any such notice.
ARTICLE X.
THE CO-AGENTS; COLLATERAL AGENT
Section 10.01 APPOINTMENT OF CO-AGENTS. Each
Multicurrency Syndicated Lender hereby designates FNBC as
Multicurrency Agent to administer all matters concerning the
Multicurrency Revolving Loans (including, without limitation, the
Multicurrency L/C Subcommitments) and to act as herein specified.
Each Domestic Syndicated Lender hereby designates STBA as
Domestic Agent to administer all matters concerning the Domestic
Revolving Loans (including, without limitation, the Domestic L/C
Subcommitments) and to act as herein specified. Each Lender
hereby irrevocably authorizes, and each holder of any Note by the
acceptance of a Note shall be deemed irrevocably to authorize,
the Appropriate Co-Agent to take such actions on its behalf under
the provisions of this Agreement, the Letter of Credit Agreement,
the other Credit Documents, and all other instruments and
agreements referred to herein or therein, and to exercise such
powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Appropriate Co-Agent
by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. The Co-Agents may perform any of
their duties hereunder by or through their agents or employees.
Section 10.02. APPOINTMENT OF COLLATERAL AGENT. (a)
Each Co-Agent and each Lender hereby designates STBA as Col-
lateral Agent and hereby authorizes the Collateral Agent to
enter into each of the Security Documents substantially in the
form attached hereto and to the Letter of Credit Agreement, and
to take all action contemplated thereby. All rights and remedies
under the Security Documents may be exercised by the Collateral
Agent for the benefit of the Co-Agents and the Lenders and the
other beneficiaries thereof upon the terms thereof. The Co-
Agents and the Lenders further agree that the Collateral Agent
may assign its rights and obligations as Collateral Agent under
any of the Security Documents to any affiliate of the Collateral
Agent or to any trustee, which assignee in each such case shall
(subject to compliance with any requirements of applicable law
governing the assignment of such Security Documents) be entitled
to all the rights of the Collateral Agent under and with respect
to the applicable Security Document.
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(b) In each circumstance where, under any provision of
any Security Document, the Collateral Agent shall have the right
to grant or withhold any consent, exercise any remedy, make any
determination or direct any action by the Collateral Agent under
such Security Document, the Collateral Agent shall act in respect
of such consent, exercise of remedies, determination or action,
as the case may be, with the consent of and at the direction of
the Required Lenders; provided, however, that no such consent of
the Required Lenders shall be required with respect to any
consent, determination or other matter that is, in the Collateral
Agent's judgment, ministerial or administrative in nature;
provided, further, that in no event shall the Collateral Agent be
required, and in all cases shall be fully justified in failing or
refusing, to take any action under or pursuant to any Security
Document which, in the reasonable opinion of the Collateral
Agent, (a) would be contrary to the terms of any Security
Document or would subject it or its officers, employees, or
directors to liability, unless and until the Collateral Agent
shall be indemnified or tendered security to its satisfaction by
the Lenders against any and all loss, cost, expense or liability
in connection therewith, or (b) would be contrary to law, in each
case anything herein or elsewhere contained to the contrary
notwithstanding. In each circumstance where any consent of or
direction from the Required Lenders is required, the Collateral
Agent shall send to the Lenders a notice setting forth a
description in reasonable detail of the matter as to which
consent or direction is requested and the Collateral Agent's
proposed course of action with respect thereto. In the event the
Collateral Agent shall not have received a response from any
Lender within five (5) Business Days after such Lender's receipt
of such notice, such Lender shall be deemed to have agreed to the
course of action proposed by the Collateral Agent.
Section 10.03. NATURE OF DUTIES OF AGENTS. The Agents
shall have no duties or responsibilities except those expressly
set forth in this Agreement, the Letter of Credit Agreement, and
the other Credit Documents. None of the Agents nor any of their
respective officers, directors, employees or agents shall be li-
able for any action taken or omitted by it as such hereunder or
in connection herewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Agents shall
be ministerial and administrative in nature; the Agents shall not
have by reason of this Agreement or the Letter of Credit
Agreement a fiduciary relationship in respect of any Lender; and
nothing in this Agreement, express or implied, is intended to or
shall be so construed as to impose upon the Agents any
obligations in respect of this Agreement, the Letter of Credit
Agreement, or the other Credit Documents except as expressly set
forth herein.
Section 10.04. LACK OF RELIANCE ON THE AGENTS.
(a) Independently and without reliance upon the
Agents, each Lender, to the extent it deems appropriate, has made
and shall continue to make (i) its own independent investigation
of the financial condition and affairs of the Credit Parties in
connection with the taking or not taking of any action in
connection herewith, and (ii) its own appraisal of the
creditworthiness of the Credit Parties, and, except as expressly
provided in this Agreement or the Letter of Credit Agreement, the
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Agents shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into its
possession before the making of any Loans, or the issuance of any
Letters of Credit, or at any time or times thereafter.
(b) The Agents shall not be responsible to any Lender
for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution,
effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the
Notes, the Guaranty Agreements, the Letter of Credit Agreement,
the L/C Cash Collateral Assignment, the IRB Collateral Documents,
or any other documents contemplated hereby or thereby, or the
financial condition of the Credit Parties, or be required to make
any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement, the
Notes, the Guaranty Agreements, the Letter of Credit Agreement,
the L/C Cash Collateral Assignment, the IRB Collateral Documents,
or the other documents contemplated hereby or thereby, or the
financial condition of the Credit Parties, or the existence or
possible existence of any Default or Event of Default; provided,
however, to the extent the Agents have been advised that a Lender
has not received any information formally delivered to the Agents
pursuant to Section 7.07, the Agents shall deliver or cause to be
delivered such information to such Lender.
Section 10.05. CERTAIN RIGHTS OF THE AGENTS. If any
Agent shall request instructions from the Required Lenders or the
Required Multicurrency Syndicated Lenders with respect to any
action or actions (including the failure to act) in connection
with this Agreement or the Letter of Credit Agreement, such Agent
shall be entitled to refrain from such act or taking such act,
unless and until the Agent shall have received instructions from
such Lenders; and the Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the
foregoing, no Lender shall have any right of action whatsoever
against any Agent as a result of such Agent acting or refraining
from acting hereunder in accordance with the instructions of the
Required Lenders or the Required Multicurrency Syndicated Lenders
where required by the terms of this Agreement or the Letter of
Credit Agreement.
Section 10.06. RELIANCE BY AGENTS. The Agents shall
be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cable gram,
radiogram, order or other documentary, teletransmission or
telephone message believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person. The Agents
may consult with legal counsel (including counsel for any Credit
Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to
be taken by it in good faith in accordance with the advice of
such counsel, accountants or experts.
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Section 10.07. INDEMNIFICATION OF AGENTS. To the ex-
tent the Agents are not reimbursed and indemnified by the Credit
Parties, each Lender will reimburse and indemnify (i) each Ap-
propriate Co-Agent, ratably according to the respective principal
amounts of the Loans and participations in Letters of Credit
outstanding by each Lender under the Facilities administered by
such Agent of which such Lender is a part (or if no amounts are
outstanding, ratably in accordance with their respective
Commitments under the Facilities administered by such Agent of
which such Lender is a part), and (ii) the Collateral Agent,
ratably according to the respective amounts of the Loans and
Letters of Credit outstanding under all Facilities (or if no
amounts are outstanding, ratably in accordance with the Total
Commitments), in either case, for and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against such
Agent in performing its duties hereunder, in any way relating to
or arising out of this Agreement or the other Credit Documents;
provided that no Lender shall be liable to any Agent for any
portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent's gross negligence or
willful misconduct.
Section 10.08. THE AGENTS IN THEIR INDIVIDUAL
CAPACITY. With respect to its obligation to lend under this
Agreement, the Loans made by it and the Notes issued to it, and
its obligations pursuant to the Letter of Credit Agreement and
the reimbursement obligations to it thereunder, each Agent shall
have the same rights and powers hereunder as any other Lender or
holder of a Note and may exercise the same as though it were not
performing the duties specified herein; and the terms "Lenders",
"Required Lenders", "holders of Notes", or any similar terms
shall, unless the context clearly otherwise indicates, include
each of the Agents in its individual capacity. The Agents may
accept deposits from, lend money to, and generally engage in any
kind of banking, trust, financial advisory or other business with
the Consolidated Companies or any affiliate of the Consolidated
Companies as if it were not performing the duties specified
herein, and may accept fees and other consideration from the
Consolidated Companies for services in connection with this
Agreement, the Letter of Credit Agreement, and otherwise without
having to account for the same to the Lenders.
Section 10.09. HOLDERS OF NOTES. The Agents may deem
and treat the payee of any Note as the owner thereof for all pur-
poses hereof unless and until a written notice of the assignment
or transfer thereof shall have been filed with the Agents. Any
request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is the
holder of any Note shall be conclusive and binding on any subse-
quent holder, transferee or assignee of such Note or of any Note
or Notes issued in exchange therefor.
Section 10.10. SUCCESSOR AGENTS.
(a) Any Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrowers and may be
removed at any time with or without cause by the Required
Lenders; provided, however, the Collateral Agent may not resign
or be removed except where the Collateral Agent is also resigning
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or being removed and a successor Collateral Agent has been
appointed under this Agreement and shall have accepted such
appointment. Upon any such resignation or removal, the Required
Lenders shall have the right, upon five days' notice to the
Borrowers, to appoint a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the retiring
Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then, upon five days' notice to
the Borrowers, the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be a bank which maintains
an office in the United States, or a commercial bank organized
under the laws of the United States of America or any State
thereof, or any Affiliate of such bank, having a combined capital
and surplus of at least $100,000,000.
(b) Upon the acceptance of any appointment as an Agent
hereunder and under the Letter of Credit Agreement by a successor
Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations under this Agreement. After any
retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article X shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was an Agent
under this Agreement or the Letter of Credit Agreement.
Section 10.11. INTERESTS OF FNBC AND ITS AFFILIATES.
Each of the Lenders confirms and acknowledges that FNBC has ad-
vised it that FNBC has engaged in other transactions with, and
performed financial advisory services for, Interface, and further
that certain affiliates of FNBC and a partnership comprised of
employees of an FNBC affiliate maintain ownership interests in
Bentley, as follows: (i) FNBC is party to certain interest rate
and currency exchange swap agreements and forward rate agreements
with one or more of the Consolidated Companies, (ii) FNBC,
through its Mergers and Acquisitions Group, served as financial
advisor to Interface in connection with the Bentley Acquisition,
(iii) prior to the Bentley Acquisition, First Chicago Investment
Corporation, First Capital Corporation of Chicago, and a
partnership comprised of certain employees of First Capital
Corporation of Chicago (collectively, the "FNBC Affiliates")
owned, in the aggregate, a majority of the capital stock of
Bentley, and (iv) prior to the Bentley Acquisition, the FNBC
Affiliates elected a majority of the members of the Bentley board
of directors, including the member designated by the Bentley
board of directors to negotiate the sale of Bentley to Interface.
The FNBC Affiliates own a majority of the preferred stock issued
by Interface as a portion of the purchase price for Bentley, and
FNBC may continue to engage in other transactions with, and
perform financial advisory services for, Interface and other
Consolidated Companies. None of the foregoing relationships or
ownership interests shall preclude FNBC from serving as
Multicurrency Agent or Co-Agent hereunder or from exercising all
rights, privileges and remedies of a Lender under this Agreement
without regard to such relationships or ownership interests.
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ARTICLE XI.
MISCELLANEOUS
Section 11.01. NOTICES. All notices, requests and
other communications to any party hereunder shall be in writing
(including bank wire, telex, telecopy or similar teletransmission
or writing), shall be in the English language, and shall be given
to such party at its address or applicable teletransmission
number set forth on the signature pages hereof, or such other
address or applicable teletransmission number as such party may
hereafter specify by notice to the Co-Agents and the Borrowers.
Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted
to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, (iii) if given by
telecopy, when such telecopy is transmitted to the telecopy
number specified in this Section and the appropriate confirmation
is received, or (iv) if given by any other means (including,
without limitation, by air courier), when delivered or received
at the address specified in this Section; provided that notices
to the Co-Agents shall not be effective until received.
Section 11.02. AMENDMENTS, ETC. No amendment or
waiver of any provision of this Agreement or the other Credit
Documents, nor consent to any departure by any Credit Party
therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided
that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders (or, in the case of any amendment or
waiver of Section 5.02, all the Multicurrency Syndicated Lenders)
do any of the following: (i) waive any of the conditions speci-
fied in Sections 5.01, 5.02 or 5.03, or in Sections 3.1 or 3.2 of
the Letter of Credit Agreement, (ii) increase the Commitments or
other contractual obligations to the Borrowers under this
Agreement or the Letter of Credit Agreement, (iii) reduce the
principal of, or interest on, the Notes or any fees hereunder or
under the Letter of Credit Agreement, (iv) postpone any date
fixed for the payment in respect of principal of, or interest on,
the Notes or any fees hereunder or under the Letter of Credit
Agreement, (v) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number or
identity of Lenders which shall be required for the Lenders or
any of them to take any action hereunder or under the Letter of
Credit Agreement, (vi) agree to release any funds in the L/C Cash
Collateral Account or any collateral described in the IRB
Collateral Documents, to the extent securing the Obligations, or
to release any Guarantor from its obligations under any Guaranty
Agreement, or (vii) amend this Section 11.02 or Section 11.06.
Furthermore, no amendment or waiver of any provision of this
Agreement or consent to any departure by any Credit Party there-
from as set forth in Section 3.02, 3.06 or 4.13 hereof, or to the
definition of the terms Currency, Payment Office, FCB Account or
FC Bank, shall be effective unless in writing and signed by at
least Multicurrency Syndicated Lenders holding at least 66 2/3%
of the Multicurrency Syndicated Loan Commitments and signed by
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the Appropriate Co-Agent (the "Required Multicurrency Syndicated
Lenders"). Notwithstanding the foregoing, no amendment, waiver
or consent shall, unless in writing and signed by the Co-Agents
or the Collateral Agent, as the case may be, in addition to the
Lenders required hereinabove to take such action, affect the
rights or duties of the Co-Agents or the Collateral Agent, as the
case may be, under this Agreement, the Letter of Credit
Agreement, or under any other Credit Document.
Section 11.03. NO WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of the Co-Agents, the Collateral
Agent, any Lender or any holder of a Note in exercising any right
or remedy hereunder or under the Letter of Credit Agreement or
any other Credit Document, and no course of dealing between any
Credit Party and the Co-Agents, the Collateral Agent, any Lender
or the holder of any Note shall operate as a waiver thereof, nor
shall any single or partial exercise of any right or remedy
hereunder or under the Letter of Credit Agreement or any other
Credit Document preclude any other or further exercise thereof or
the exercise of any other right or remedy hereunder or
thereunder. The rights and remedies herein expressly provided
are cumulative and not exclusive of any rights or remedies which
the Co-Agents, the Collateral Agent, any Lender or the holder of
any Note would otherwise have. No notice to or demand on any
Credit Party not required hereunder or under the Letter of Credit
Agreement or any other Credit Document in any case shall entitle
any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the
rights of the Co-Agents, the Collateral Agent, the Lenders or
the holder of any Note to any other or further action in any cir-
cumstances without notice or demand.
Section 11.04. PAYMENT OF EXPENSES, ETC. Each of Interface
and each other Borrower shall:
(i) whether or not the transactions hereby
contemplated are consummated, pay all reasonable, out-of-
pocket costs and expenses of the Agents in the
administration (both before and after the execution hereof
and including advice of counsel as to the rights and duties
of the Agents and the Lenders with respect thereto) of, and
in connection with the preparation, execution and delivery
of, preservation of rights under, enforcement of, and, after
a Default or Event of Default, refinancing, renegotiation or
restructuring of, this Agreement, the Letter of Credit
Agreement, and the other Credit Documents and the documents
and instruments referred to therein, and any amendment,
waiver or consent relating thereto (including, without
limitation, the reasonable fees and disbursements of counsel
for the Agents), and in the case of enforcement of this
Agreement, the Letter of Credit Agreement, or any Credit
Document after an Event of Default, all such reasonable,
out-of-pocket costs and expenses (including, without
limitation, the reasonable fees and disbursements of coun-
sel), for any of the Lenders;
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(ii) subject, in the case of certain Taxes, to the ap-
plicable provisions of Section 4.07(b), pay and hold each of
the Lenders harmless from and against any and all present
and future stamp, documentary, and other similar Taxes with
respect to this Agreement, the Notes, the Letter of Credit
Agreement, and any other Credit Documents, any collateral
described therein, or any payments due thereunder, and save
each Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or
omission to pay such Taxes;
(iii) indemnify each Agent and Lender, and their respec-
tive officers, directors, employees, representatives and
agents from, and hold each of them harmless against, any and
all costs, losses, liabilities, claims, damages or expenses
incurred by any of them (whether or not any of them is
designated a party thereto) (an "Indemnitee") arising out of
or by reason of any investigation, litigation or other
proceeding related to any actual or proposed use of the
proceeds of any of the Loans or the Letters of Credit, or
any Credit Party's entering into and performing of the
Agreement, the Notes, the Letter of Credit Agreement, or the
other Credit Documents, including, without limitation, the
reasonable fees and disbursements of counsel (including
foreign counsel) incurred in connection with any such
investigation, litigation or other proceeding; provided,
however, the Borrowers shall not be obligated to indemnify
any Indemnitee for any of the foregoing arising out of such
Indemnitee's gross negligence or willful misconduct, or the
violation by such Indemnitee of any law, rule or regulation,
unless such violation occurs directly or indirectly as a
result of an action, inaction, representation or
misrepresentation by or on behalf of any Credit Party or
other Consolidated Company; and
(iv) without limiting the indemnities set forth in sub-
section (iii) above, indemnify each Indemnitee for any and
all expenses and costs (including without limitation, reme-
dial, removal, response, abatement, cleanup, investigative,
closure and monitoring costs), losses, claims (including
claims for contribution or indemnity and including the cost
of investigating or defending any claim and whether or not
such claim is ultimately defeated, and whether such claim
arose before, during or after any Credit Party's ownership,
operation, possession or control of its business, property
or facilities or before, on or after the date hereof, and
including also any amounts paid incidental to any compromise
or settlement by the Indemnitee or Indemnitees to the
holders of any such claim), lawsuits, liabilities,
obligations, actions, judgments, suits, disbursements,
encumbrances, liens, damages (including without limitation
damages for contamination or destruction of natural
resources), penalties and fines of any kind or nature
whatsoever (including without limitation in all cases the
reasonable fees, other charges and disbursements of counsel
in connection therewith) incurred, suffered or sustained by
that Indemnitee based upon, arising under or relating to
Environmental Laws based on, arising out of or relating to
in whole or in part, the existence or exercise of any rights
or remedies by any Indemnitee under this Agreement, the
Letter of Credit Agreement, any other Credit Document or any
related documents.
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If and to the extent that the obligations of Interface and each
other Borrower under this Section 11.04 are unenforceable for any
reason, Interface and each other Borrower hereby agree to make
the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
Section 11.05. RIGHT OF SETOFF. In addition to and
not in limitation of all rights of offset that any Lender or
other holder of a Note may have under applicable law, each Lender
or other holder of a Note shall, upon the occurrence of any Event
of Default and whether or not such Lender or such holder has made
any demand or any Credit Party's obligations are matured, have
the right to appropriate and apply to the payment of any Credit
Party's obligations hereunder and under the Letter of Credit
Agreement and the other Credit Documents, all deposits of such
Credit Party (general or special, time or demand, provisional or
final) then or thereafter held by and other indebtedness or prop-
erty then or thereafter owing by such Lender or other holder to
such Credit Party, whether or not related to this Agreement or
any transaction hereunder, and whether or not the obligations of
the Credit Party under the Credit Documents are payable in the
same currency as any such deposits, indebtedness or property (the
amounts of which, when payable or valued in a different currency,
shall be determined for purposes of this Section 11.05 by the
Equivalent Amount thereof in the currency payable by the Credit
Party as of the date such setoff rights are exercised).
Section 11.06. BENEFIT OF AGREEMENT.
(a) This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective successors
and assigns of the parties hereto, provided that the Borrowers
may not assign or transfer any of its interest hereunder without
the prior written consent of the Lenders.
(b) Any Lender may make, carry or transfer Loans at,
to or for the account of, any of its branch offices or the office
of an Affiliate of such Lender.
(c) Each Lender may assign all or a portion of its
interests, rights and obligations under this Agreement (including
all or a portion of any of its Commitments and the Loans at the
time owing to it and the Notes held by it) and the Letter of
Credit Agreement to any Eligible Assignee; provided, however,
that (i) the Co-Agents and Interface must give their prior
written consent to such assignment (which consent shall not be
unreasonably withheld; it being agreed that, in the case of any
assignment of an L/C Subcommitment or other obligations under the
Letter of Credit Agreement, such consent will be properly
withheld if such assignee does not then possess the "Minimum
Required Rating" as provided in the Letter of Credit Agreement
and has not been approved by the L/C Issuer in its sole
discretion), (ii) the aggregate amount of the Commitments of the
assigning Lender that are subject to such assignment (determined
as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Co-Agents) shall not be less than
$5,000,000, (iii) the assigning Lender retains after the
consummation of such assignment a minimum aggregate amount of
Commitments of $10,000,000, and (iv) the parties to each such
assignment shall execute and deliver to the Co-Agents an
Assignment and Acceptance, together with a Note or Notes subject
to such assignment and a processing and recordation fee of $2500;
provided, further, that in the case of any assignment made (x) at
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any time there exists an Event of Default hereunder, (y) where
such assigning Lender is assigning the entire amount of its
Commitments hereunder, or (z) where such assigning Lender is
assigning to one of its Affiliates or to a Person that is already
a Lender under this Agreement prior to giving effect to such
assignment, then and in any such assignment described in the
preceding clauses (x), (y), or (z), the minimum amounts specified
in clauses (ii) and (iii) in this sentence shall not be required.
From and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least five (5)
Business Days after the execution thereof, the assignee
thereunder shall be a party hereto and to the extent of the
interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement and the
Letter of Credit Agreement. Within five (5) Business Days after
receipt of the notice and the Assignment and Acceptance,
Interface and each of the other Borrowers, at its own expense,
shall execute and deliver to the Appropriate Co-Agent, in
exchange for the surrendered Note or Notes, a new Note or Notes
to the order of such assignee in a principal amount equal to the
applicable Commitments assumed by it pursuant to such Assignment
and Acceptance and new Note or Notes to the assigning Lender in
the amount of its retained Commitment or Commitments. Such new
Note or Notes shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Note or Notes,
shall be dated the date of the surrendered Note or Notes which
they replace, and shall otherwise be in substantially the form
attached hereto.
(d) Each Lender may, without the consent of Interface,
any other Borrower or the Agents, sell participations to one or
more banks or other entities in all or a portion of its rights
and obligations under this Agreement (including all or a portion
of its Commitments in the Loans owing to it and the Notes held by
it) and the Letter of Credit Agreement, provided, however, that
(i) no Lender may sell a participation in its aggregate
Commitments (after giving effect to any permitted assignment
hereof) in an amount in excess of fifty percent (50%) of such ag-
gregate Commitments, except that no such maximum amount shall be
applicable to any such participation sold at any time there
exists an Event of Default hereunder, (ii) such Lender's
obligations under this Agreement and the Letter of Credit
Agreement shall remain unchanged, (iii) such Lender shall remain
solely responsible to the other parties hereto for the per-
formance of such obligations, and (iv) the participating bank or
other entity shall not be entitled to the benefit (except through
its selling Lender) of the cost protection provisions contained
in Article IV of this Agreement, and (v) Interface, the other
Borrowers and the Agents and other Lenders shall continue to deal
solely and directly with each Lender in connection with such
Lender's rights and obligations under this Agreement, the Letter
of Credit Agreement, and the other Credit Documents, and such
Lender shall retain the sole right to enforce the obligations of
Interface and the other Borrowers relating to the Loans and the
Letters of Credit, and to approve any amendment, modification or
waiver of any provisions of this Agreement, the Letter of Credit
Agreement, and the other Credit Documents.
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(e) Any Lender or participant may, in connection with
the assignment or participation or proposed assignment or
participation, pursuant to this Section, disclose to the assignee
or participant or proposed assignee or participant any
information relating to Interface or the other Consolidated
Companies furnished to such Lender by or on behalf of Interface
or any other Consolidated Company; provided that, prior to any
such disclosure of information designated by Interface as
confidential, the Lender proposing to make such assignment or
sell such participation shall obtain from such prospective
assignee or participant an agreement whereby such prospective
assignee or participant shall agree to preserve the
confidentiality of such confidential information consistent with
the provisions of Section 7.05.
(f) Any Lender may at any time assign all or any por-
tion of its rights in this Agreement and the Notes issued to it
to a Federal Reserve Bank; provided that no such assignment shall
release the Lender from any of its obligations hereunder.
(g) If (i) any Taxes referred to in Section 4.07(b)
have been levied or imposed so as to require withholdings or de-
ductions by any Borrower and payment by such Borrower of ad-
ditional amounts to any Lender as a result thereof, (ii) any
Lender shall make demand for payment of any material additional
amounts as compensation for increased costs or for its reduced
rate of return pursuant to Section 4.10 or 4.17 hereof or Section
2.6(a) of the Letter of Credit Agreement, (iii) any Lender shall
decline to consent to a modification or waiver of the terms of
this Agreement, the Letter of Credit Agreement, or the other
Credit Documents requested by Interface, or (iv) any
Multicurrency Syndicated Lender shall fail to have delivered to
Interface by December 31, 1998, the certificate or other document
from the United Kingdom Inland Revenue as specified in
Section 4.07(b)(v)(B) unless such Multicurrency Syndicated Lender
shall otherwise establish, to the satisfaction of Interface, that
it is exempt from withholding taxes imposed by the United
Kingdom, then and in such event, upon request from Interface
delivered to such Lender and the Co-Agents, such Lender shall
assign, in accordance with the provisions of Section 11.06(c),
all of its rights and obligations under this Agreement and the
other Credit Documents to another Lender or an Eligible Assignee
selected by Interface, in consideration for the payment by such
assignee to the Lender of the principal of, and interest on, the
outstanding Loans accrued to the date of such assignment, and the
assumption of such Lender's Total Commitment hereunder, together
with any and all other amounts owing to such Lender under any
provisions of this Agreement, the Letter of Credit Agreement, or
the other Credit Documents accrued to the date of such
assignment.
Section 11.07. GOVERNING LAW; SUBMISSION TO JURISDICTION.
- 133 -<PAGE>
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND UNDER THE NOTES 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 GEOR-
GIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT, THE NOTES, THE LETTER OF CREDIT AGREEMENT, OR ANY
OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE SUPERIOR COURT OF
FULTON COUNTY, GEORGIA, OR THE SUPERIOR COURT OF COBB COUNTY,
GEORGIA, OR IN ANY COURT OF THE UNITED STATES OF AMERICA FOR THE
NORTHERN DISTRICT OF GEORGIA, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH BORROWER HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVE TRIAL BY JURY, AND EACH BORROWER HEREBY IR-
REVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS.
(c) EACH BORROWER HEREBY IRREVOCABLY DESIGNATES EACH
OF G. KIMBROUGH TAYLOR, JR. AND KILPATRICK STOCKTON LLP, EACH OF
ATLANTA, GEORGIA, AS ITS DESIGNEE, APPOINTEE AND LOCAL AGENT TO
RECEIVE, FOR AND ON BEHALF OF SUCH BORROWER, SERVICE OF PROCESS
IN SUCH RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE NOTES OR ANY
DOCUMENT RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON EITHER SUCH LOCAL AGENT WILL BE PROMPTLY
FORWARDED BY MAIL TO THE BORROWER AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, BUT THE FAILURE OF THE BORROWER TO
RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH
PROCESS. IF FOR ANY REASON SERVICE OF PROCESS CANNOT PROMPTLY BE
MADE ON EITHER SUCH LOCAL AGENT, EACH BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE BORROWER AT ITS SAID ADDRESS, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
- 134 -<PAGE>
(d) Nothing herein shall affect the right of the
Agents, any Lender, any holder of a Note or any Credit Party to
serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Borrowers in
any other jurisdiction.
Section 11.08. INDEPENDENT NATURE OF LENDERS' RIGHTS.
The amounts payable at any time hereunder to each Lender shall be
a separate and independent debt, and each Lender shall be
entitled to protect and enforce its rights pursuant to this
Agreement and its Notes, and it shall not be necessary for any
other Lender to be joined as an additional party in any
proceeding for such purpose.
Section 11.09. COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by the different par-
ties hereto on separate counterparts, each of which when so ex-
ecuted and delivered shall be an original, but all of which shall
together constitute one and the same instrument.
Section 11.10. SURVIVAL. (a) The obligations of the
Borrowers under Sections 4.07(b), 4.10, 4.12, 4.13, 4.17, 11.04
and 11.15 hereof shall survive the payment in full of the Notes
after the Maturity Date. All representations and warranties made
herein, in the certificates, reports, notices, and other
documents delivered pursuant to this Agreement and the Letter of
Credit Agreement shall survive the execution and delivery of this
Agreement, the Letter of Credit Agreement, the other Credit
Documents, and such other agreements and documents, the making of
the Loans hereunder, the execution and delivery of the Notes, and
the issuance of the Letters of Credit.
(b) The obligations of the Co-Agents, the Lenders,
their assignees and participants under Sections 4.07(b), 7.05 and
11.06(e) hereof shall survive the payment in full of the Notes
after the Maturity Date.
Section 11.11. SEVERABILITY. In case any provision in
or obligation under this Agreement, the Letter of Credit Agree-
ment, or the other Credit Documents shall be invalid, illegal or
unenforceable, in whole or in part, in any jurisdiction, the va-
lidity, legality and enforceability of the remaining provisions
or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
Section 11.12. INDEPENDENCE OF COVENANTS. All cov-
enants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitation of, another covenant,
shall not avoid the occurrence of a Default or an Event of
Default if such action is taken or condition exists.
- 135 -<PAGE>
Section 11.13. CHANGE IN ACCOUNTING PRINCIPLES, FISCAL
YEAR OR TAX LAWS. If (i) any preparation of the financial state-
ments referred to in Section 7.07 hereafter occasioned by the
promulgation of rules, regulations, pronouncements and opinions
by or required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) result in a material
change in the method of calculation of financial covenants, stan-
dards or terms found in this Agreement, (ii) there is any change
in Interface's fiscal quarter or fiscal year, or (iii) there is a
material change in federal tax laws which materially affects any
of the Consolidated Companies' ability to comply with the finan-
cial covenants, standards or terms found in this Agreement, the
parties agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such changes with the de-
sired result that the criteria for evaluating any of the Consoli-
dated Companies' financial condition shall be the same after such
changes as if such changes had not been made. Unless and until
such provisions have been so amended, the provisions of this
Agreement shall govern.
Section 11.14. HEADINGS DESCRIPTIVE; ENTIRE AGREEMENT.
The headings of the several sections and subsections of this
Agreement are inserted for convenience only and shall not in any
way affect the meaning or construction of any provision of this
Agreement. This Agreement, the Letter of Credit Agreement, the
other Credit Documents, and the agreements and documents required
to be delivered pursuant to the terms of this Agreement and the
Letter of Credit Agreement constitute the entire agreement among
the parties hereto and thereto regarding the subject matters
hereof and thereof and supersede all prior agreements,
representations and understandings related to such subject
matters.
Section 11.15. JUDGMENT CURRENCY.
(a) The Credit Parties' obligations hereunder and
under the Letter of Credit Agreement and the other Credit
Documents to make payments in a particular Agreed Currency (the
"Obligation Currency") shall not be discharged or satisfied by
any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery actually
results in the effective receipt by the Co-Agents, the Collateral
Agent or a Lender of the full amount of the Obligation Currency
expressed to be payable to the Co-Agents, the Collateral Agent or
such Lender under this Agreement, the Letter of Credit Agreement,
or the other Credit Documents. If for the purpose of obtaining
or enforcing judgment against any Borrower or other Credit Party
in any court or in any jurisdiction, it becomes necessary to
convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as
the "Judgment Currency") an amount due in the Obligation
Currency, the conversion shall be made, and the Agreed Currency
equivalent determined, in each case, as on the day immediately
preceding the day on which the judgment is given (such Business
Day being hereafter referred to as the "Judgment Currency
Conversion Date").
(b) If there is a change in the rate of exchange pre-
vailing between the Judgment Currency Conversion Date and the
date of actual payment of the amount due, the Credit Parties
- 136 -<PAGE>
covenant and agree to pay, or cause to be paid, such additional
amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment
Currency, when converted at the rate of exchange quoted by the
Multicurrency Agent at its prevailing rate for such Currency
exchange on the date of payment, will produce the amount of the
Obligation Currency which could have been purchased with the
amount of Judgment Currency stipulated in the judgment or
judicial award at the rate of exchange prevailing on the Judgment
Currency Conversion Date.
(c) For purposes of determining the Agreed Currency
equivalent for this Section, such amounts shall include any
premium and costs payable in connection with the purchase of the
Obligation Currency.
Section 11.16. DOLLAR EQUIVALENT COMPUTATIONS. Unless
otherwise provided herein, to the extent that the determination
of compliance with any requirement of this Agreement requires the
conversion to U.S. Dollars of Agreed Currency amounts, such U.S.
Dollar amount shall be computed using the Dollar Equivalent of
the amount of such Agreed Currency at the time such item is to be
calculated or is to be or was incurred, created or suffered or
permitted to exist, or assumed or transferred or sold for
purposes of this Agreement (except if such item was incurred,
created or assumed, or suffered or permitted to exist or
transferred or sold prior to the date hereof, such conversion
shall be made based on the Dollar Equivalent of the amounts of
such Agreed Currency at the date hereof).
Section 11.17. AMENDMENT AND RESTATEMENT; NO NOVATION.
This Agreement constitutes an amendment and restatement of the
Existing Credit Agreement effective from and after the Closing
Date. The execution and delivery of this Agreement shall not
constitute a novation of any indebtedness or other obligations
owing to the Lenders or the Co-Agents under the Existing Credit
Agreement based on any facts or events occurring or existing
prior to the execution and delivery of this Agreement. On the
Closing Date, the credit facilities described in the Existing
Credit Agreement shall be amended and supplemented by the
Facilities described herein, and all loans and other obligations
of the Borrowers outstanding as of such date under the Existing
Credit Agreement shall be deemed to be loans and obligations
outstanding under the corresponding facilities described herein,
without further action by any Person.
Section 11.18. REFERENCES IN CREDIT DOCUMENTS. On and
after the Closing Date, each and every reference in the Credit
Documents to this Agreement, and to the capitalized terms as
defined in this Agreement (including, without limitation, the
terms "Loans", "Obligations", and "Facilities") shall be deemed
to refer to and mean this Agreement as herein amended and
restated, and such capitalized terms as defined and used in
this Agreement as herein amended and restated. The Borrowers
further confirm and agree that all such Credit Documents are and
shall remain in full force and effect on and after the Closing
Date.
- 137 -<PAGE>
Section 11.19. RELEASE OF PRIOR PLEDGE AGREEMENTS.
Upon the effectiveness of this Third Amended and Restated Credit
Agreement on the Closing Date, the Pledge Agreements (as defined
in the Existing Credit Agreement) and the Agent's and Lenders'
Liens thereunder shall automatically terminate and be released,
and the Collateral Agent shall, as promptly as practicable after
the Closing Date, return to Interface any and all stock
certificates representing the Pledged Stock (as defined in the
Existing Credit Agreement) and all stock powers for such shares
previously delivered to the Agent by the Credit Parties together
with termination statements for any and all Uniform Commercial
Code financing statements relating to the Pledge Agreements as
well as any other documentation which may be reasonably requested
by Interface from time to time in order to confirm the
termination and release of the Pledge Agreements and the Liens
created thereunder.
- 138 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in Atlanta, Georgia,
by their duly authorized officers as of the day and year first
above written.
Address for Notices: INTERFACE, INC.
2859 Paces Ferry Road
Suite 2000
Atlanta, GA 30339 By: /s/ Daniel T. Hendrix
Attention: Daniel T. Hendrix Daniel T. Hendrix
Senior Vice President
Telex No.:
Answerback:
Telecopy No.: 404/319-0070
<PAGE>
Address for Notices: INTERFACE EUROPE B.V.
c/o Interface, Inc.
2859 Paces Ferry Road
Suite 2000
Atlanta, GA 30339 By: /s/ Daniel T. Hendrix
Attention: Daniel T. Hendrix Daniel T. Hendrix
Attorney-in-Fact
Telex No.:
Answerback:
Telecopy No.: 404/319-0070
<PAGE>
Address for Notices: INTERFACE EUROPE LIMITED
c/o Interface, Inc.
2859 Paces Ferry Road
Suite 2000
Atlanta, GA 30339 By: /s/ Daniel T. Hendrix
Attention: Daniel T. Hendrix Daniel T. Hendrix
Attorney-in-Fact
Telex No.:
Answerback:
Telecopy No.: 404/319-0070
<PAGE>
Address for Notices: SUNTRUST BANK, ATLANTA,
as Domestic Agent and Collateral
Agent
303 Peachtree Street
24th Floor
Atlanta, GA 30303
Attention: Laura Kahn By: /s/ Bradley J. Staples
Name: Bradley J. Staples
Title: Vice President
Telex No.: 542210
Answerback: TRUSCO INT ATL
By: /s/ Brenda Zino
Telecopy No.: 404/827-6514 Name: Brenda Zino
Title: Banking Officer
Payment Office:
25 Park Place, N.E.
Atlanta, GA 30303
<PAGE>
Address for Notices: THE FIRST NATIONAL BANK
OF CHICAGO, as Multicurrency Agent
One First National Plaza
Chicago, Illinois 60670-0324
Attention: Judith L. Cornwell
By: /s/ Judith Cornwell
Name: Judith Cornwell
Title: Vice President
Telex No.:
Answerback:
Telecopy No.: 312/732-5296
Administrative Office:
One First National Plaza
Chicago, Illinois 60670-0324
Attention: Judith L. Cornwell
Payment Offices:
(See Schedule 4.01)
<PAGE>
Address for Notices: SUNTRUST BANK, ATLANTA
303 Peachtree Street
24rd Floor
Atlanta, GA 30303
Attention: Laura Kahn By: /s/ Bradley J. Staples
Name: Bradley J. Staples
Title: Vice Presiden
Telex No.: 542210
Answerback: TRUSCO INT ATL
By: /s/ Branda Zino
Telecopy No.: 404/827-6514 Name: Brenda Zino
Title: Banking Officer
Domestic Lending Office:
One Park Place, N.E.
Atlanta, GA 30303
Telex No.: 542210
Answerback: TRUSCO INT ATL
Eurocurrency Lending Office:
One Park Place, N.E.
Atlanta, Georgia 30303
Telex No. 542210
Answerback: TRUSCO INT ATL
PRO RATA
AMOUNT SHARE
------ ---------
DOMESTIC SYNDICATED
LOAN COMMITMENT: $26,000,000 11.81818%
DOMESTIC SWING LINE
COMMITMENT: $5,000,000 100.00000%
DOMESTIC L/C SUBCOMMITMENT: $4,727,273 11.81818%
MULTICURRENCY SYNDICATED
LOAN COMMITMENT: $11,000,000 13.75000%
MULTICURRENCY L/C
SUBCOMMITMENT: $6,875,000 13.75000%
TOTAL COMMITMENT $37,000,000 12.33333%
(EXCLUDING DOMESTIC
SWING LINE):
<PAGE>
Address for Notices: THE FIRST NATIONAL BANK OF CHICAGO
Mail Suite 0324
One First National Plaza
Chicago, Illinois 60670-0324
Attention: Judith L. Cornwell
By: /s/ Judith Cornwell
Name: Judith Cornwell
Title: Vice President
Telex No.: 4330253
Answerback: FNBC UI
Telecopy No.: 312/732-5296
Administrative Office
One First National Plaza
Chicago, Illinois 60670-0324
Attention: Judith L. Cornwell
Payment Offices:
(See Schedule 4.01)
PRO RATA
AMOUNT SHARE
------ -------
DOMESTIC SYNDICATED
LOAN COMMITMENT: $26,000,000 11.81818%
DOMESTIC L/C SUBCOMMITMENT: $4,727,273 11.81818%
MULTICURRENCY SYNDICATED LOAN
COMMITMENT: $11,000,000 13.75000%
MULTICURRENCY L/C
SUBCOMMITMENT: $6,875,000 13.75000%
MULTICURRENCY SWING LINE
COMMITMENT: $5,000,000 100.00000%
TOTAL COMMITMENT
(EXCLUDING MULTICURRENCY
SWING LINE): $37,000,000 12.33333%
<PAGE>
Address for Notices: ABN AMRO BANK N.V.
135 South LaSalle Street
Suite 2805
Chicago, IL 60603 By: /s/ Linda K. Davis
Attention: Credit Administration Name: Linda K. Davis
Title: Vice President
Telephone: 312/904-8835
Telecopy: 312/904-8840 By: /s/ Larry Kelley
Name:Larry Kelley
with a copy to: Title: Group Vice President
ABN AMRO BANK N.V.
1 Ravinia Drive, Suite 1200
Atlanta, GA 30346
Attention: Mark Clegg
Telephone: 770/399-7399
Telecopy: 770/399-7397
Domestic Lending Office:
135 South LaSalle Street
Suite 625
Chicago, IL 60603
Attention: Loan Administration
Eurocurrency Lending Office:
135 South LaSalle Street
Suite 625
Chicago, IL 60603
Attention: Loan Administration
PRO RATA
AMOUNT SHARE
------ --------
DOMESTIC SYNDICATED
LOAN COMMITMENT: $22,400,000 10.18182%
DOMESTIC L/C SUBCOMMITMENT: $4,072,727 10.18182%
MULTICURRENCY SYNDICATED
LOAN COMMITMENT: $9,600,000 12.00000%
MULTICURRENCY L/C
SUBCOMMITMENT: $6,000,000 12.00000%
TOTAL COMMITMENT: $32,000,000 10.66667%
<PAGE>
Address for Notices: THE BANK OF TOKYO-MITSUBISHI,
LTD., ATLANTA AGENCY
133 Peachtree Street, N.E.
4970 Georgia-Pacific Center
Atlanta, GA 30303
Attention: Brandon Meyerson By: /s/ Brandon A. Meyerson
Name: Brandon A. Meyerson
Telephone: 404/577-2960 Title: Assistant Vice President
Telecopy No.: 404/577-1155
Telex No.: 6827300
Answerback: 6827300BOT ATL
Domestic Lending Office:
4970 Georgia-Pacific Center
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
Eurocurrency Lending Office:
4970 Georgia-Pacific Center
133 Peachtree Street, N.E.
Atlanta, Georgia 30303
PRO RATA
AMOUNT SHARE
------ --------
DOMESTIC SYNDICATED
LOAN COMMITMENT: $15,000,000 6.81818%
DOMESTIC L/C SUBCOMMITMENT: $2,727,273 6.81818%
MULTICURRENCY SYNDICATED
LOAN COMMITMENT: $5,000,000 6.25000%
MULTICURRENCY L/C
SUBCOMMITMENT: $3,225,000 6.25000%
TOTAL COMMITMENT: $20,000,000 6.66667%
<PAGE>
Address for Notices: CIBC INC.
CIBC Oppenheimer
Two Paces West
2727 Paces Ferry Road, Suite 1200 By: /s/ Cyd Petre
Atlanta, Georgia 30339 Name:Cyd Petre
Attention: Charlene Harris Title: Executive Director
CIBC Oppenheimer Corp., AS AGENT
Telephone: 770/319-4999
Telecopy: 770/319-4954
with a copy to:
CIBC Oppenheimer
425 Lexington Avenue
New York, NY 10017
Attention: Cyd D. Petre
Telephone: 212/856-4165
Telecopy No.: 212/856-3991
Domestic Lending Office:
CIBC Oppenheimer
Two Paces West
2727 Paces Ferry Road, Suite 1200
Atlanta, Georgia 30339
Eurocurrency Lending Office:
CIBC Oppenheimer
Two Paces West
2727 Paces Ferry Road, Suite 1200
Atlanta, Georgia 30339
PRO RATA
AMOUNT SHARE
------ -------
DOMESTIC SYNDICATED
LOAN COMMITMENT: $15,000,000 6.81818%
DOMESTIC L/C SUBCOMMITMENT: $2,727,273 6.81818%
MULTICURRENCY SYNDICATED
LOAN COMMITMENT: $5,000,000 6.25000%
MULTICURRENCY L/C
SUBCOMMITMENT: $3,225,000 6.25000%
TOTAL COMMITMENT: $20,000,000 6.66667%
<PAGE>
Address for Notices: CREDITANSTALT CORPORATE FINANCE,
INC. (Assignee of Creditanstalt-Bankverein)
Two Ravinia Drive
Suite 1680 By: /s/ Stephen W. Hipp
Atlanta, Georgia 30346 Name: Stephen W. Hipp
Attention: Stephen W. Hipp Title: Associate
Telephone: 770/390-1846 By:/s/ Robert M. [unreadable]
Telecopy No.: 770/390-1851 Name: Robert M. [unreadable]
Title: EVP
Domestic Lending Office:
Two Greenwich Plaza
Greenwich, CT 06830-6353
Attn: Lisa Bruno
Eurocurrency Lending Office:
Two Greenwich Plaza
Greenwich, CT 06830-6353
PRO RATA
AMOUNT SHARE
------ -------
DOMESTIC SYNDICATED
LOAN COMMITMENT: $26,000,000 11.81818%
DOMESTIC L/C SUBCOMMITMENT: $4,727,272 11.81818%
MULTICURRENCY SYNDICATED
LOAN COMMITMENT: 0 0.00000%
MULTICURRENCY L/C
SUBCOMMITMENT: 0 0.00000%
TOTAL COMMITMENT: $26,000,000 8.66667%
<PAGE>
Address for Notices: FIRST UNION NATIONAL BANK
(Successor by Merger to First Union National
999 Peachtree Street, N.E. Bank of Georgia)
9th Floor
Mail Code 9019
Atlanta, GA 30309
Attention: Donald Dalton By: /s/ Mayla M. Thom
Name: Mayla M. Thom
Title: Vice President
Telephone: 404/225-4004
Telecopy No.: 404/225-4255
Domestic Lending Office:
999 Peachtree Street, N.E.
9th Floor
Atlanta, GA 30309
Eurocurrency Lending Office:
First Union National Bank
3 Bishopsgate
London EC2N 3AB, ENGLAND
PRO RATA
AMOUNT SHARE
------ --------
DOMESTIC SYNDICATED
LOAN COMMITMENT: $22,400,000 10.18182%
DOMESTIC L/C SUBCOMMITMENT: $4,072,727 10.18182%
MULTICURRENCY SYNDICATED
LOAN COMMITMENT: $9,600,000 12.00000%
MULTICURRENCY L/C
SUBCOMMITMENT: $6,000,000 12.00000%
TOTAL COMMITMENT: $32,000,000 10.66667%
Address for Notices: FLEET NATIONAL BANK
80 Exchange Street By: /s/ Neil C. Buitenhuys
Bangor, Maine 04401 Name: Neil C. Buitenhuys
Attention: Neil C. Buitenhuys Title:
Telephone: 207/941-6140
Telecopy No.: 207/941-6023
Domestic Lending Office:
511 Congress Street, P. O. Box 1280
Portland, Maine 04104-5006
<PAGE>
Eurocurrency Lending Office:
511 Congress Street, P. O. Box 1280
Portland, Maine 04104-5006
PRO RATA
AMOUNT SHARE
------ --------
DOMESTIC SYNDICATED
LOAN COMMITMENT: $22,400,000 10.18182%
DOMESTIC L/C SUBCOMMITMENT: $4,072,727 10.18182%
MULTICURRENCY SYNDICATED
LOAN COMMITMENT: $9,600,000 12.00000%
MULTICURRENCY L/C
SUBCOMMITMENT: $6,000,000 12.00000%
TOTAL COMMITMENT: $32,000,000 10.66667%
<PAGE>
Address for Notices: NATIONSBANK, N.A.
100 North Tryon Street
Mail Code NC1-007-08-11 By: /s/ David H. Dinkins
Charlotte, NC 28255 Name: David H. Dinkins
Attention: David Dinkins Title: Vice President
Telephone: 704/386-2951
Telecopy No.: 704/386-1270
Domestic Lending Office:
One Independence Center
101 North Tryon Street
Mail Code NC1-001-15-03
Charlotte, NC 28255
Eurocurrency Lending Office:
One Independence Center
101 North Tryon Street
Mail Code NC1-001-15-03
Charlotte, NC 28255
PRO RATA
AMOUNT SHARE
DOMESTIC SYNDICATED
LOAN COMMITMENT: $22,400,000 10.18182%
DOMESTIC L/C SUBCOMMITMENT: $4,072,727 10.18182%
MULTICURRENCY SYNDICATED
LOAN COMMITMENT: $9,600,000 12.00000%
MULTICURRENCY L/C
SUBCOMMITMENT: $6,000,000 12.00000%
TOTAL COMMITMENT: $32,000,000 10.66667%
<PAGE>
Address for Notices: WACHOVIA BANK, N.A.
(Successor by Merger to Wachovia Bank
191 Peachtree Street, N.E. of Georgia, N.A.)
29th Floor By: /s/ William B. Nixon
Atlanta, GA 30303 Name: William B. Nixon
Attention: William B. Nixon Title: Vice President
Telephone: 404/332-4884
Telecopy No.: 404/332-5016
Domestic Lending Office:
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Eurocurrency Lending Office:
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
PRO RATA
AMOUNT SHARE
------ -------
DOMESTIC SYNDICATED
LOAN COMMITMENT: $22,400,000 10.18182%
DOMESTIC L/C SUBCOMMITMENT: $4,072,727 10.18182%
MULTICURRENCY SYNDICATED
LOAN COMMITMENT: $9,600,000 12.00000%
MULTICURRENCY L/C
SUBCOMMITMENT: $6,000,000 12.00000%
TOTAL COMMITMENT: $32,000,000 10.66667%
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from financial
statements included in the Company's quarterly report on Form 10-Q for the
quarter ended July 5, 1998, and is qualified in its entirety by referrence to
such financial statements.
</LEGEND>
<CIK> 0000715787
<NAME> INTERFACE, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-03-1999
<PERIOD-END> JUL-05-1999
<CASH> 10,633
<SECURITIES> 0
<RECEIVABLES> 209,465
<ALLOWANCES> 7,775
<INVENTORY> 191,446
<CURRENT-ASSETS> 444,832
<PP&E> 456,712
<DEPRECIATION> 212,618
<TOTAL-ASSETS> 1,025,277
<CURRENT-LIABILITIES> 191,869
<BONDS> 393,194
0
0
<COMMON> 5,593
<OTHER-SE> 399,657
<TOTAL-LIABILITY-AND-EQUITY> 1,025,277
<SALES> 635,816
<TOTAL-REVENUES> 635,816
<CGS> 422,409
<TOTAL-COSTS> 580,609
<OTHER-EXPENSES> 3,135
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,355
<INCOME-PRETAX> 35,717
<INCOME-TAX> 13,770
<INCOME-CONTINUING> 21,947
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,947
<EPS-PRIMARY> .43
<EPS-DILUTED> .42
</TABLE>
