FIRST AMENDMENT TO
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of February 22, 1999
This FIRST AMENDMENT dated as of February 22, 1999 (this "First
Amendment") is among OUTSOURCE INTERNATIONAL, INC. (the "Borrower"), each of the
Banks party to the Credit Agreement hereinafter referred to (individually a
"Bank" and collectively with any successors or permitted assigns, the "Banks")
and BANKBOSTON, N.A., as agent for the Banks (in its capacity as such, the
"Agent").
The Borrower, BankBoston, N.A., Comerica Bank, LaSalle National Bank
and the Agent entered into a Credit Agreement dated as of February 21, 1997,
which Credit Agreement was (i) amended and restated as of ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇)
further amended as of September 4, 1997, (iii) amended and restated as of
November 26, 1997 to provide for, among other things, the addition of State
Street Bank and Trust Company, SunTrust Bank, South Florida, National
Association, and The Sumitomo Bank, Limited as Banks, (iv) further amended as of
December 30, 1997, (v) further amended as of January 30, 1998, (vi) further
amended as of March 18, 1998, and (vii) amended and restated as of July 27, 1998
to provide for, among other things, the addition of Fleet National Bank as a
Bank to replace State Street Bank and Trust Company and The Sumitomo Bank,
Limited (as so amended and restated, the "Credit Agreement"). The parties now
wish to amend further the Credit Agreement to provide for certain changes to the
Financial Condition Covenants set forth in Section 7.1 thereof and to make
certain changes in the Applicable Margin, the Commitment Fee and the Letter of
Credit Rate.
NOW, THEREFORE, the Borrower, the Banks and the Agent agree as follows:
Section 1. Amendments to the Credit Agreement. Effective as of the
effective date hereof and subject to the satisfaction of the conditions
precedent set forth in Section 2 hereof, the Credit Agreement is hereby amended
as follows:
(a) The definition of "Pricing Grid" set forth in Section 1.1
of the Credit Agreement shall be, and hereby is, amended by deleting such
definition in its entirety and substituting in lieu thereof the following:
"Pricing Grid": the Applicable Margin, the Commitment Fee
and the Letter of Credit Rate will be determined quarterly for the period of
four (4) consecutive fiscal quarters ending on each FQED and will be as set
forth in the following Pricing Grid:
Consolidated Applicable
Indebtedness to Margin for Applicable
Consolidated Alternate Base Margin for Commitment Fee Letter of Credit
EBITDA Ratio Rate Loans Eurodollar Loans Fee Rate
--------------- -------------- ---------------- -------------- ----------------
Level (more than) 3.75 0.750% 2.750% 0.50% 1.875%
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1 to 1
---------------- ------------------- -------------- ----------------- -------------- ----------------
Level 3.01-3.75 to 1 0.25% 2.250% 0.375% 1.500%
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2
---------------- ------------------- -------------- ----------------- -------------- ----------------
Level 2.25-3.00 to 1 0.00% 1.875% 0.375% 1.125%
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3
---------------- ------------------- -------------- ----------------- -------------- ----------------
Level 1.50-2.24 to 1 0.00% 1.500% 0.250% 1.000%
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4
---------------- ------------------- -------------- ------------------ -------------- ----------------
Level (less than) 1.50 to 1 0.00% 1.250% 0.250% 0.750%
------
5
---------------- ------------------- -------------- ------------------ -------------- ----------------
Except as described in the next paragraph, pricing will be adjusted based on the
Borrower's performance relative to the above grid, effective on the first day of
the immediately following fiscal quarter. The Borrower's Consolidated
Indebtedness to Consolidated EBITDA Ratio must have changed from a given Level
for at least two (2) consecutive quarters before pricing will be adjusted up or
down (other than an adjustment arising from the issuance by the Borrower of
publicly traded common stock). In the event that the Borrower's Consolidated
Indebtedness to Consolidated EBITDA Ratio changes Levels twice in two
consecutive quarters (e.g., from Level 2 to Level 3 in one quarter, and from
Level 3 to Level 4 in the next quarter), pricing shall adjust to the less
beneficial (from the Borrower's point of view) of the two Levels attained during
such two consecutive quarters.
The Applicable Margin, the Commitment Fee and the Letter of Credit Rate shall
remain at Level 1 for the period beginning January 1, 1999 and ending upon the
Agent's receipt of the Borrower's financial statements for the fiscal quarter
ended June 30, 1999 pursuant to Section 6.1(b), at which time pricing shall
adjust, effective on the first day of the immediately following fiscal quarter,
based on the Borrower's performance relative to the above grid.
(b) The following definitions of "Senior Consolidated
Indebtedness" and "Senior Consolidated Indebtedness to Consolidated EBITDA
Ratio" shall be, and hereby are, added to Section 1.1 of the Credit Agreement
between the definitions of "Security Documents" and "Senior Subordinated Notes":
"Senior Consolidated Indebtedness": at any particular
date, with respect to the Borrower and its Subsidiaries, Consolidated
Indebtedness less the face amount of all Subordinated Indebtedness.
"Senior Consolidated Indebtedness to Consolidated EBITDA
Ratio": at the end of any month, the ratio of (a) Senior Consolidated
Indebtedness on such date to (b) Consolidated EBITDA for the immediately
preceding twelve (12) months (ending on such date). Note: For purposes of
Section 7.1(e) only (i.e. not for pricing under the Pricing Grid), the Borrower
may add for such twelve (12) months (i) Consolidated EBITDA of any entity
acquired in a Permitted Acquisition or identified in Note 1 to the Unaudited Pro
Forma Consolidated Financial Information contained in the Prospectus, plus any
compensation paid by such entity to any shareholder of such entity during such
period to the extent such shareholder is not continuing
to receive compensation or consulting or similar fees from the Borrower or any
of its Subsidiaries subsequent to the acquisition and (ii) any verifiable
non-recurring expenses approved by the Required Banks.
(c) Subsection 7.1(a) ("Maximum Consolidated Indebtedness to
Consolidated EBITDA Ratio") of the Credit Agreement shall be, and hereby is,
amended by deleting such subsection in its entirety and substituting in lieu
thereof the following:
(a) Maximum Consolidated Indebtedness to Consolidated EBITDA
Ratio. Permit, as of the end of any month during each of the periods set forth
below, the Consolidated Indebtedness to Consolidated EBITDA Ratio to be greater
than the amount set forth below opposite such period:
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Consolidated Indebtedness to Consolidated
Period EBITDA Ratio
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During the period beginning on April 1, 1998 3.75 to 1
and ending on September 30, 1998
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During the period beginning on October 1,
1998 and ending on September 30, 1999 4.0 to 1
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During the period beginning on October 1, 3.75 to 1
1999 and thereafter
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(d) Subsection 7.1(b) ("Minimum Consolidated EBITDA to
Consolidated Interest Expense Ratio") of the Credit Agreement shall be, and
hereby is, amended by deleting such subsection in its entirety and substituting
in lieu thereof the following:
(b) Minimum Consolidated EBITDA to Consolidated Interest
Expense Ratio. Permit, as of the end of any month during each of the periods set
forth below, the Consolidated EBITDA to Consolidated Interest Expense Ratio to
be less than the amount set forth below opposite such period:
----------------------------------------------- --------------------------------------------
Consolidated EBITDA to Consolidated
Period Interest Expense Ratio
----------------------------------------------- --------------------------------------------
During the period beginning on April 1, 1998 2.5 to 1
and ending on June 30, 1998
----------------------------------------------- --------------------------------------------
During the period beginning on July 1, 1998
and ending on September 30, 1998 3.5 to 1
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During the period beginning on October 1,
1998 and ending on September 30, 1999 2.75 to 1
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During the period beginning on October 1, 3.0 to 1
1999 and thereafter
----------------------------------------------- --------------------------------------------
(e) The Credit Agreement shall be, and hereby is, amended by
adding the following Subsection 7.1(e) ("Maximum Senior Consolidated
Indebtedness to Consolidated EBITDA Ratio"):
(e) Maximum Senior Consolidated Indebtedness to Consolidated
EBITDA Ratio. Permit, as of the end of any month, the Maximum Senior
Consolidated Indebtedness to Consolidated EBITDA Ratio to be greater than 3.50
to 1.
(f) Schedule A ("Commitments; Addresses") to the Credit
Agreement shall be, and hereby is, amended by deleting the contact information
for SunTrust Bank, South Florida, National Association and substituting in lieu
thereof the following:
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Section 2. Conditions of Effectiveness. This First Amendment shall
become effective when, and only when, the Agent shall have received a
counterpart of this First Amendment executed by the Borrower and the Required
Banks and an amendment fee in the amount of $212,500.
Section 3. Representations and Warranties of the Borrower. The
Borrower represents as follows:
(a) The execution, delivery and performance by the Borrower of this
First Amendment have been duly authorized by all necessary corporate action and
do not and will not (i) require any consent or approval of the Borrower's
shareholders; (ii) violate any provisions of the charter or by-laws of the
Borrower or any of its Subsidiaries; (iii) violate any provision of, or require
any filing, registration, consent or approval under, any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to and binding upon the Borrower or any if its
Subsidiaries, except where such violation or failure to file could not
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise) of the Borrower or such Subsidiaries or the ability of
the Borrower to perform its obligations with respect to this First Amendment or
the Credit Agreement, as amended; or (iv) result in a breach of, cause a lien to
arise under, or constitute a default or require any consent under, any indenture
or loan or credit agreement or any other agreement of the Borrower or its
Subsidiaries, except where such breach, default or failure to obtain consent or
approval would not reasonably be expected to have a material adverse effect on
the condition (financial or otherwise) of the Borrower or its Subsidiaries or
the ability of the Borrower to perform its obligations with respect to this
First Amendment or the Credit Agreement, as amended.
(b) This First Amendment and the Credit Agreement, as amended,
constitute the legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their respective terms, except to the
extent that such enforcement may be limited by applicable bankruptcy, insolvency
and other similar laws affecting creditors' rights generally and by general
principles of equity.
(c) The representations and warranties contained in Section 4 of the
Credit Agreement are true, correct and complete in all material respects on and
as of the date of such certificate as though made on and as of such date except
those that by their terms specifically relate only to another date.
(d) No Event of Default or Default has occurred and is continuing or
would result from the execution and delivery of this First Amendment or the
transactions contemplated hereby.
(e) There has been no material adverse change in the condition
(financial or otherwise) of the Borrower or the ability of the Borrower to
perform its obligations with respect to the Credit Agreement as amended by this
First Amendment since the date of the last financial statements furnished to the
Bank.
Section 4. Reference to and Effect on the Credit Agreement.
(a) Upon the effectiveness of this First Amendment, on and after the
date hereof, each reference in the Credit Agreement to "this Credit Agreement",
"hereunder", "hereof", "herein" or words of like import shall mean and be a
reference to the Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit Agreement shall
remain in full force and effect and is hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this First Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Banks under the Credit Agreement, nor constitute a
waiver of any provision of the Credit Agreement.
Section 5. Costs, Expenses and Taxes. The Borrower agrees to pay on
demand all reasonable costs and expenses of the Agent and Banks in connection
with the preparation, execution and delivery of this First Amendment and any
other instruments and documents to be delivered hereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Agent and Banks with respect thereto and with respect to advising the Agent and
the Banks as to their rights and responsibilities hereunder and thereunder,
together with any unpaid fees and out-of-pocket expenses of such counsel
relating to prior amendments to the Credit Agreement. In addition, the Borrower
shall pay any and all stamp and other taxes payable or determined to be payable
in connection with the execution and delivery of this First Amendment and the
other instruments and documents to be delivered hereunder, and agrees to save
the Agent and the Banks harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes.
Section 6. Execution in Counterparts. This First Amendment may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which taken together
shall constitute but one and the same instrument.
Section 7. Governing Law. This First Amendment shall be governed by,
and construed in accordance with, the laws of the State of Connecticut.
Section 8. Defined Terms. Capitalized terms used herein which are not
expressly defined herein shall have the meanings ascribed to them in the Credit
Agreement.
Remainder of Page Intentionally Left Blank
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
OUTSOURCE INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
BANKBOSTON, N.A.
As a Bank and as the Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
COMERICA BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
LASALLE NATIONAL BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SUNTRUST BANK, SOUTH FLORIDA,
NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
FLEET NATIONAL BANK
By: -------------------
Name:
Title: