EXHIBIT 99.1
THIRD AMENDMENT TO
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO FIFTH AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is dated as of June 14, 2005, by and among Interface, Inc.,
Interface Europe Ltd., and Interface Europe B.V. (each a "Borrower" and,
collectively, the "Borrowers"); the "Subsidiary L/C Account Parties" listed on
the signature pages hereto; the "Lenders" listed on the signature pages hereto;
and Wachovia Bank, National Association, as Domestic Agent, Multicurrency Agent
and Collateral Agent (in each of such capacities, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrowers, the Subsidiary L/C Account Parties, the Lenders,
the L/C Issuers, and the Agent executed and delivered that certain Fifth Amended
and Restated Credit Agreement dated as of June 17, 2003, as amended by that
certain First Amendment to Fifth Amended and Restated Credit Agreement dated as
of March 30, 2004, and that certain Second Amendment to Fifth Amended and
Restated Credit Agreement and Waiver dated as of December 29, 2004 (as the same
may be amended, restated, supplemented, or otherwise modified from time to time,
the "Credit Agreement");
WHEREAS, the Borrowers have requested that the Agent, the Lenders, and the
L/C Issuers agree to certain amendments to the Credit Agreement as more fully
set forth herein;
NOW, THEREFORE, for and in consideration of the above premises and other
good and valuable consideration, the receipt and sufficiency of which hereby is
acknowledged by the parties hereto, the Borrowers, the Subsidiary L/C Account
Parties, the Lenders party hereto, the L/C Issuers party hereto, and the Agent
hereby covenant and agree as follows:
1. Definitions. Unless otherwise specifically defined herein, each term
used herein which is defined in the Credit Agreement shall have the meaning
assigned to such term in the Credit Agreement. Each reference to "hereof,"
"hereunder," "herein," and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Credit Agreement shall from and after the date hereof refer to the Credit
Agreement as amended hereby.
2. Amendments to Credit Agreement.
(a) Section 1.01 of the Credit Agreement is amended by deleting the
definition of "Reserve Amount" in its entirety.
(b) Section 1.01 of the Credit Agreement is amended by the addition of the
following new definitions:
"Amortizing Amount" shall mean an amount initially equal to
$10,000,000, but which decreases $500,000 (automatically and without
notice to any Person) on the first day of each of Interface's fiscal
quarters, until reduced to $0.00, with the first such reduction
occurring on the first day of Interface's fiscal quarter commencing
on October 3, 2005.
"Primary Repatriation Date" means the first date on which each
of the following shall have been satisfied: (a) at least $20,000,000
in the aggregate shall have been repatriated by Interface or its
Domestic Subsidiaries in accordance with applicable U.S. tax law;
and (b) the Domestic Agent shall have received a certificate
executed by Interface's chief financial officer to the effect that
(i) Interface or its Domestic Subsidiaries have repatriated at least
$20,000,000 in the aggregate in accordance with applicable U.S. tax
law and (ii) Interface and its Domestic Subsidiaries have complied
with all applicable laws respecting such repatriation, which
certificate will be accompanied by an accounting of such funds and
the process by which such funds were repatriated, all in form and
substance reasonably satisfactory to the Domestic Agent.
(c) The definition of "Consolidated Restricted Payments" in Section 1.01
of the Credit Agreement is hereby amended so that it reads, in its entirety, as
follows:
"Consolidated Restricted Payments" shall mean, for any fiscal
period of Interface, the sum of (a) all payments (other than
regularly scheduled payments of principal and interest) made by the
Consolidated Companies with respect to the Senior Subordinated Notes
and Senior Notes during such period (but not including payments made
in respect of the Senior Notes pursuant to Section 8.08(e)), plus
(b) any purchases of Capital Stock of Interface by any Consolidated
Company during such period, plus (c) dividends made by the
Consolidated Companies in respect of the Capital Stock of such
Consolidated Company during such period (excluding dividends made in
such Capital Stock and dividends paid to Interface or any Subsidiary
of Interface).
(d) The definition of "Domestic Borrowing Base" in Section 1.01 of the
Credit Agreement is hereby amended so that it reads, in its entirety, as
follows:
"Domestic Borrowing Base" shall mean, as of any date of
determination and as set forth in the most recent Domestic Borrowing
Base Certificate delivered to the Lenders in accordance with the
terms of Section 7.07(d), an amount equal to:
(i) eighty-five percent (85%) (or such lesser percentage which
the Domestic Agent may establish from time to time in its reasonable
credit judgment by written notice to Interface) of the face amount
of Eligible Domestic Accounts (after subtracting all setoffs,
discounts, counterclaims, contra accounts, and other deductions, to
the extent such amounts are excluded from eligibility in the
definition of "Eligible Domestic Accounts," as reasonably determined
by the Domestic Agent in its reasonable credit judgment), plus
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(ii) sixty percent (60%) (or such lesser percentage which the
Domestic Agent may establish from time to time in its reasonable
credit judgment by written notice to Interface) of the value of
Eligible Domestic Inventory (Finished Goods), as valued at the lower
of cost paid for such Eligible Domestic Inventory (Finished Goods)
or the fair market value of such Eligible Domestic Inventory
(Finished Goods) (all as determined by the Domestic Agent in its
reasonable credit judgment); provided that, in no event shall the
value of any Eligible Domestic Inventory (Finished Goods) included
in the calculation of "Domestic Borrowing Base" exceed eighty-five
percent (85%) of the net orderly liquidation value thereof (as
reasonably determined by the Domestic Agent in its reasonable credit
judgment) of such Eligible Domestic Inventory (Finished Goods), plus
(iii) forty percent (40%) (or such lesser percentage which the
Domestic Agent may establish from time to time in its reasonable
credit judgment by written notice to Interface) of the value of
Eligible Domestic Inventory (Raw Materials), as valued at the lower
of cost paid for such Eligible Domestic Inventory (Raw Materials) or
the fair market value of such Eligible Domestic Inventory (Raw
Materials) (all as determined by the Domestic Agent in its
reasonable credit judgment); provided that, in no event shall the
value of any Eligible Domestic Inventory (Raw Materials) included in
the calculation of "Domestic Borrowing Base" exceed eighty-five
percent (85%) of the net orderly liquidation value thereof (as
reasonably determined by the Domestic Agent in its reasonable credit
judgment) of such Eligible Domestic Inventory (Raw Materials), plus
(iv) the Amortizing Amount, minus
(v) the Other Reserves.
(e) The definition of "Financial Covenant Effective Date" in Section 1.01
of the Credit Agreement is hereby amended so that it reads, in its entirety, as
follows:
"Financial Covenant Effective Date" shall mean each date after
the Closing Date on which any of the following occurs or is
satisfied: (a) Excess Availability (Domestic) is less than (i)
during the period commencing on June 1, 2005, and ending on July 17,
2005, $10,000,000 and (ii) on and after July 18, 2005, $20,000,000
or (b) Excess Availability (UK) is less than $3,000,000.
(f) The definition of "Total Fixed Charges" in Section 1.01 of the Credit
Agreement is hereby amended so that it reads, in its entirety, as follows:
"Total Fixed Charges" shall mean, for any fiscal period of
Interface and without duplication, the sum of (a) Consolidated Cash
Interest Expense for such period (provided, that, solely for
purposes of calculating the amount to be derived from this
definition, any interest payments on the Existing Senior Notes which
are due and payable by Interface on April 1 or October 1 of a given
fiscal year of Interface shall,
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when paid, be deemed to have been paid in the second fiscal quarter
and the fourth fiscal quarter, respectively, of such fiscal year),
plus (b) payments made in respect of capital leases during such
period, plus (c) scheduled payments of principal made during such
period in respect of all Indebtedness which, when such Indebtedness
was incurred, had a stated maturity of more than one year from the
date it was so incurred (other than payments made in respect of the
Senior Subordinated Notes or the Senior Notes at their stated final
maturity), plus (d) Consolidated Restricted Payments made during
such period (but not before March 30, 2003), plus (e) a positive
amount equal to the amount by which the Amortizing Amount decreases
during such period (as contemplated in the definition of "Amortizing
Amount").
(g) Section 8.08(e) of the Credit Agreement is hereby amended so that it
reads, in its entirety, as follows:
(e) repayments or repurchases of up to $25,000,000, in the
aggregate, of the Senior Notes, but only to the extent (i) each such
repayment is made, and each such repurchase is consummated, during
the period commencing June 1, 2005, and ending on December 31, 2005
(provided, however, that such December 31, 2005, date shall be
automatically extended to June 30, 2006, upon the occurrence of the
Primary Repatriation Date, but only if the Primary Repatriation Date
occurs on or before December 31, 2005), and (ii) at the time of
making or consummating such repayment or repurchase, and after
giving effect thereto, no Default or Event of Default shall have
occurred and be continuing or would result therefrom (it being
agreed that Interface will, from time to time upon the Domestic
Agent's reasonable request, provide the Domestic Agent with an
accounting of all repayments and repurchases made pursuant to this
subclause (e), in such form and with such detail as the Domestic
Agent may reasonably request);
3. Restatement of Representations and Warranties. Each of the Borrowers
and the Subsidiary L/C Account Parties hereby restates and renews each and every
representation and warranty heretofore made by it in the Credit Agreement and
the other Credit Documents as fully as if made on the date hereof and with
specific reference to this Amendment and all other documents executed and/or
delivered in connection herewith.
4. Effect of Amendment. Except as set forth expressly hereinabove, all
terms of the Credit Agreement and the other Credit Documents shall be and remain
in full force and effect, and shall constitute the legal, valid, binding and
enforceable obligations of the Borrowers and the Subsidiary L/C Account Parties.
The amendments contained herein shall be deemed to have prospective application
only, unless otherwise specifically stated herein.
5. Ratification. Each of the Borrowers and the Subsidiary L/C Account
Parties hereby restates, ratifies and reaffirms each and every term, covenant
and condition set forth in the Credit Agreement and the other Credit Documents
effective as of the date hereof.
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6. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which may be delivered by facsimile and which when so executed and delivered
(including counterparts delivered by facsimile) shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same instrument.
7. Section References. Section titles and references used in this
Amendment shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreements among the parties hereto evidenced hereby.
8. No Default. To induce the Agent, the Lenders, and the L/C Issuers to
enter into this Amendment and to continue to make advances pursuant to the
Credit Agreement, each of the Borrowers and the Subsidiary L/C Account Parties
hereby acknowledges and agrees that, as of the date hereof, and after giving
effect to the terms hereof, there exists (i) no Default or Event of Default and
(ii) no right of offset, defense, counterclaim, claim or objection in favor of
any of the Borrowers or any of the Subsidiary L/C Account Parties arising out of
or with respect to any of the Loans or other obligations of the Borrowers or the
Subsidiary L/C Account Parties owed to the Lenders or the L/C Issuers under the
Credit Agreement or the other Credit Documents.
9. Further Assurances. Each of the Borrowers and the Subsidiary L/C
Account Parties agrees to take such further actions as the Agent shall
reasonably request in connection herewith to evidence the amendments herein
contained.
10. Governing Law. This Amendment shall be governed by and construed and
interpreted in accordance with, the laws of the State of New York (without
giving effect to the conflicts of law principles thereof, other than Section
5-1401 of the New York General Obligations Law).
11. Request for Fixed Asset Information. The Domestic Agent hereby
requests (pursuant to Section 7.07(t) of the Credit Agreement) that Interface
provide, and Interface, for itself and on behalf of its Subsidiaries, hereby
agrees to provide to the Domestic Agent, on or before the date which is sixty
(60) days following the effective date of this Amendment, a schedule showing
with reasonable detail all of the Credit Parties' fixed assets which have been
acquired or disposed of by the Credit Parties, in each case, since the date of
the August 2004 appraisal of the Credit Parties' fixed assets.
12. Conditions Precedent. This Amendment shall become effective only upon:
(a) execution and delivery of (i) this Amendment by each of the Borrowers,
each of the Subsidiary L/C Account Parties, the Agent (in its capacities as
Domestic Agent, Multicurrency Agent, and Collateral Agent), the Lenders, and the
L/C Issuers and (ii) the acknowledgement and agreement of the other Credit
Parties in the form attached hereto; and
(b) receipt by the Domestic Agent, for the account of the Lenders, of an
amendment fee in the amount of $25,000, which fee shall be paid by the Domestic
Agent, promptly after its receipt thereof, to each of the Lenders in accordance
with their respective Pro Rata Share.
[SIGNATURES ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, each of the Borrowers, the Subsidiary L/C Account
Parties, the Agent (in its capacities as Domestic Agent, Multicurrency Agent,
and Collateral Agent), the Lenders, and the L/C Issuers has caused this
Amendment to be duly executed, under seal, by its duly authorized officer as of
the day and year first above written.
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Domestic Agent, Multicurrency
Agent, Collateral Agent, Domestic L/C Issuer, UK
Multicurrency L/C Issuer, and as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
FLEET CAPITAL CORPORATION, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: SVP
GENERAL ELECTRIC CAPITAL CORPORATION
(for itself and as successor in interest to
Transamerica Business Capital Corporation),
as a Lender
By: /s/ C. ▇▇▇▇ ▇▇▇▇▇
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Name: C. ▇▇▇▇ ▇▇▇▇▇
Title: Duly Authorized Signatory
THE CIT GROUP/COMMERCIAL SERVICES, INC.,
as a Lender
By: /s/ M. ▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: M. ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
SIEMENS FINANCIAL SERVICES, INC., as a
Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President - Credit
BORROWERS:
INTERFACE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
INTERFACE EUROPE B.V.
INTERFACE EUROPE LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
SUBSIDIARY L/C ACCOUNT PARTIES:
INTERFACE FLOORING SYSTEMS, INC.
INTERFACE FABRICS, INC.
INTERFACE ARCHITECTURAL RESOURCES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
ACKNOWLEDGMENT AND AGREEMENT OF OTHER CREDIT PARTIES
Each of the following has caused this Amendment to be duly executed, under seal,
by its duly authorized officer as of the day and year first above written,
thereby evidencing its acknowledgement and agreement to the same and its
reaffirmation (in light of the content of such Amendment) of all of its
obligations and covenants under the Credit Documents to which it is a party
(including, without limitation, the Domestic Guaranty Agreements or UK Guaranty
and Security Agreement):
OTHER CREDIT PARTIES:
BENTLEY PRINCE STREET, INC. (f/k/a BENTLEY ▇▇▇▇▇, INC.)
BENTLEY ▇▇▇▇▇, INC. (f/k/a BENTLEY ROYALTY COMPANY)
INTERFACE FABRICS ▇▇▇▇▇, INC. (f/k/a CHATHAM, INC.)
CARPET SERVICES OF TAMPA, INC.
COMMERCIAL FLOORING SYSTEMS, INC.
FLOORING CONSULTANTS, INC.
INTERFACE FABRICS GUILFORD, INC. (f/k/a GUILFORD
OF MAINE, INC.)
INTERFACE AMERICAS, INC.
INTERFACE ARCHITECTURAL RESOURCES, INC.
INTERFACE FABRICS, INC.
INTERFACE FABRICS MARKETING, INC. (f/k/a INTERFACE
FABRICS GROUP MARKETING COMPANY)
INTERFACE OVERSEAS HOLDINGS, INC.
INTERFACE TEKNIT, INC.
INTERFACEFLOR, INC.
INTERFACE GLOBAL COMPANY APS
PANDEL, INC.
QUAKER CITY INTERNATIONAL, INC.
RE:SOURCE AMERICAS ENTERPRISES, INC.
RE:SOURCE MINNESOTA, INC.
RE:SOURCE NORTH CAROLINA, INC.
RE:SOURCE NEW YORK, INC.
RE:SOURCE OREGON, INC.
RE:SOURCE SOUTH FLORIDA, INC.
RE:SOURCE SOUTHERN CALIFORNIA, INC.
RE:SOURCE WASHINGTON, D.C., INC.
SOUTHERN CONTRACT SYSTEMS, INC.
SUPERIOR/▇▇▇▇▇▇ FLOORING RESOURCES, INC.
INTERFACE FABRICS FINISHING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
STRATEGIC FLOORING SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
INTERFACE REAL ESTATE HOLDINGS, LLC,
By: BENTLEY PRINCE STREET, INC. (F/K/A BENTLEY
▇▇▇▇▇, INC.), its sole member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
INTERFACE AMERICAS HOLDINGS, LLC,
By: INTERFACE, INC., its sole member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
INTERFACE AMERICAS RE:SOURCE TECHNOLOGIES, LLC,
By: INTERFACE FLOORING SYSTEMS, INC., its sole
member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
INTERFACE FABRICS LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director