<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 24, 1999
Commission file number: 0-23198
INTERIM SERVICES INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-3536544
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2050 SPECTRUM BOULEVARD, FORT LAUDERDALE, FLORIDA 33309
(Address of principal executive offices) (Zip code)
(954) 938-7600
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
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 [ ]
Number of shares of Registrant's Common Stock, par value $.01
per share ("Common Stock"), outstanding on October 22, 1999 was 63,517,312.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I Financial Information
Item 1. Financial Statements
Consolidated Statements of Earnings
Three Months Ended September 24, 1999 and September 25, 1998;
Nine Months Ended September 24, 1999 and September 25, 1998................ 1
Consolidated Balance Sheets
September 24, 1999 and December 25, 1998.................................... 2
Consolidated Statements of Cash Flows
Nine Months Ended September 24, 1999 and September 25, 1998................. 3
Notes to Consolidated Financial Statements...................................... 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations....................................................... 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk.............. 16
PART II Other Information
Item 4. Matters Submitted to a Vote of Security Holders ........................ 18
Item 5. Forward-Looking Statements.............................................. 18
Item 6. Exhibits and Reports on Form 8-K........................................ 19
Signatures ..................................................................... 22
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTERIM SERVICES INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------------- --------------------------
SEPT. 24, SEPT. 25, SEPT. 24, SEPT. 25,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues ......................................... $ 956,419 $ 498,051 $ 2,129,525 $ 1,375,864
Cost of services ................................. 656,220 314,519 1,406,811 864,898
----------- ----------- ----------- -----------
Gross profit ..................................... 300,199 183,532 722,714 510,966
----------- ----------- ----------- -----------
Selling, general and administrative expenses ..... 208,002 128,843 517,435 363,230
Licensee commissions ............................. 22,614 13,278 47,843 37,630
Amortization of intangibles ...................... 10,240 5,659 23,990 16,542
Interest expense ................................. 12,010 7,715 25,496 23,515
Interest income .................................. (572) (2,732) (1,974) (3,980)
Year 2000 costs .................................. 3,038 -- 3,038 --
Restructuring and integration costs .............. 20,864 -- 20,864 --
----------- ----------- ----------- -----------
276,196 152,763 636,692 436,937
----------- ----------- ----------- -----------
Earnings before income taxes and
extraordinary item ........................... 24,003 30,769 86,022 74,029
Income taxes ..................................... 10,650 13,748 37,946 32,869
----------- ----------- ----------- -----------
Earnings before extraordinary item ............ 13,353 17,021 48,076 41,160
Extraordinary item - early extinguishment of debt,
net of income taxes ............................ -- -- -- 2,773
----------- ----------- ----------- -----------
Net earnings .................................. $ 13,353 $ 17,021 $ 48,076 $ 38,387
=========== =========== =========== ===========
Basic earnings per share:
Earnings before extraordinary item ............... $ 0.21 $ 0.36 $ 0.93 $ 0.95
Extraordinary item ............................... -- -- -- (0.06)
----------- ----------- ----------- -----------
Net Earnings ..................................... $ 0.21 $ 0.36 $ 0.93 $ 0.89
=========== =========== =========== ===========
Diluted earnings per share:
Earnings before extraordinary item ............... $ 0.21 $ 0.35 $ 0.91 $ 0.93
Extraordinary item ............................... -- -- -- (0.06)
----------- ----------- ----------- -----------
Net earnings ..................................... $ 0.21 $ 0.35 $ 0.91 $ 0.87
=========== =========== =========== ===========
Basic weighted average shares outstanding ........ 63,343 47,254 51,901 43,209
=========== =========== =========== ===========
Diluted weighted average shares outstanding ...... 69,409 53,540 57,788 46,590
=========== =========== =========== ===========
</TABLE>
See notes to Consolidated Financial Statements.
1
<PAGE> 4
INTERIM SERVICES INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
(UNAUDITED)
SEPT. 24, 1999 DEC. 25, 1998
-------------- -------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ............................................................ $ 48,602 $ 153,314
Receivables, less allowance for doubtful accounts of $17,119 and $8,937 .............. 611,320 327,296
Other current assets ................................................................. 88,045 64,164
----------- -----------
Total current assets ........................................................... 747,967 544,774
Goodwill, net ........................................................................ 1,240,738 705,837
Tradenames and other intangibles, net ................................................ 205,249 213,357
Property and equipment, net .......................................................... 130,480 90,622
Other assets ......................................................................... 174,435 58,854
----------- -----------
$ 2,498,869 $ 1,613,444
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt .................................................... $ 176,661 $ 21,943
Due to Computer Power shareholders ................................................... -- 111,008
Accounts payable and other accrued expenses .......................................... 198,252 101,469
Accrued salaries, wages and payroll taxes ............................................ 194,843 114,015
Other current liabilities ............................................................ 25,965 36,173
----------- -----------
Total current liabilities ...................................................... 595,721 384,608
Long-term debt ......................................................................... 659,888 426,856
Other long-term liabilities ............................................................ 111,046 64,040
Stockholders' Equity:
Preferred stock, par value $.01 per share; authorized 2,500,000 shares; none issued or
outstanding ....................................................................... -- --
Common stock, par value $.01 per share; authorized 200,000,000 and 100,000,000 shares
respectively; issued 65,280,900 and 47,335,654 .................................... 653 473
Treasury stock, at cost, 1,907,260 shares ............................................ (35,186) --
Additional paid-in capital ........................................................... 861,948 468,032
Retained earnings .................................................................... 310,341 262,265
Accumulated other comprehensive income/(loss) ........................................ (5,542) 7,170
----------- -----------
Total stockholders' equity ..................................................... 1,132,214 737,940
----------- -----------
$ 2,498,869 $ 1,613,444
=========== ===========
</TABLE>
See notes to Consolidated Financial Statements.
2
<PAGE> 5
INTERIM SERVICES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-------------------------------
SEPT. 24, 1999 SEPT. 25, 1998
-------------- --------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net earnings before extraordinary item ..................................... $ 48,076 $ 41,160
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation and amortization ........................................... 45,761 33,018
Restructuring charge .................................................... 12,650 --
Changes in assets and liabilities, net of effects of acquisitions:
Receivables ........................................................... (87,146) (56,813)
Other assets .......................................................... (1,980) (13,009)
Accounts payable and accrued liabilities .............................. 11,538 31,199
Other ................................................................. 4,061 261
--------- ---------
Net Cash Provided by Operating Activities ........................... 32,960 35,816
--------- ---------
Cash Flows from Investing Activities:
Acquisitions, net of cash acquired ......................................... (260,294) (90,997)
Capital expenditures ....................................................... (35,988) (25,450)
--------- ---------
Net Cash Used in Investing Activities ............................... (296,282) (116,447)
--------- ---------
Cash Flows from Financing Activities:
Debt proceeds .............................................................. 378,319 207,802
Debt repayments ............................................................ (127,891) (180,505)
Net proceeds from common stock offering .................................... -- 197,140
Purchase of treasury stock ................................................. (89,368) --
Other, net ................................................................. (2,450) 9,188
--------- ---------
Net Cash Provided by Financing Activities ........................... 158,610 233,625
--------- ---------
(Decrease)/increase in cash and cash equivalents ........................... (104,712) 152,994
Cash and cash equivalents, beginning of period ............................. 153,314 15,570
--------- ---------
Cash and cash equivalents, end of period ................................... $ 48,602 $ 168,564
========= =========
Non-cash activities:
Stock issuance in connection with the Norrell merger........................ $ 431,283 $ --
========= =========
Reissuance of treasury stock in connection with the Norrell merger.......... $ 54,182 $ --
========= =========
</TABLE>
See notes to Consolidated Financial Statements.
3
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The consolidated financial statements of Interim Services Inc. and
subsidiaries (the "Company"), included herein, do not include all
footnote disclosures normally included in annual financial statements
and, therefore, should be read in conjunction with the Company's
financial statements and notes thereto for each of the fiscal years in
the three year period ended December 25, 1998 included in the Company's
Annual Report on Form 10-K.
The consolidated financial statements for the three and nine months
ended September 24, 1999 and September 25, 1998 are unaudited and, in
the opinion of management, reflect all adjustments (consisting only of
normal recurring adjustments) necessary for fair presentation of
financial position, results of operations and cash flows for such
periods. Results for the three and nine months ended September 24, 1999
are not necessarily indicative of results to be expected for the full
fiscal year ending December 31, 1999. Certain prior year amounts have
been reclassified to conform to the current year's presentation.
2. Comprehensive Income
Comprehensive income, which totaled $20.6 million and $25.8 million for
the three months ended September 24, 1999 and September 25, 1998,
respectively, is comprised of net earnings of $13.4 million and $17.0
million, respectively, and foreign currency translation adjustments of
$7.2 million and $8.8 million, respectively.
Comprehensive income, which totaled $35.4 million and $43.9 million for
the nine months ended September 24, 1999 and September 25, 1998,
respectively, is comprised of net earnings of $48.1 million and $38.4
million, respectively, and foreign currency translation adjustments of
($12.7) million and $5.5 million, respectively.
3. Earnings Per Share
Basic earnings per share is computed by dividing the Company's earnings
by the weighted average number of shares outstanding during the period.
Diluted earnings per share is computed by dividing the Company's
earnings by the weighted average number of shares outstanding and the
impact of all dilutive potential common shares, primarily stock
options, convertible subordinated notes, restricted stock and deferred
stock units. The dilutive impact of stock options is determined by
applying the treasury stock method and the dilutive impact of the
convertible subordinated notes is determined by applying the "if
converted" method.
The following table reconciles the numerator (earnings) and denominator
(shares) of the basic and diluted earnings per share computations for
net earnings.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
(UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
------------------------------------------------------------------------------------------
SEPTEMBER 24, 1999 SEPTEMBER 25, 1998
---------------------------------------- ----------------------------------------
NET PER-SHARE NET PER-SHARE
EARNINGS SHARES AMOUNT EARNINGS SHARES AMOUNT
------------ ------ --------- ------------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Basic EPS ......................... $13,353 63,343 $ 0.21 $17,021 47,254 $ 0.36
======== ========
Effect of Dilutive Securities:
Stock options and other dilutive
securities ................... -- 517 -- 737
Convertible subordinated notes.. 1,512 5,549 1,501 5,549
------- ------- ------- -------
Diluted EPS ...................... $14,865 69,409 $ 0.21 $18,522 53,540 $ 0.35
======= ======= ========= ======= ======= ========
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
NINE MONTHS ENDED
(UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
-------------------------------------------------------------------------------------
SEPTEMBER 24, 1999 SEPTEMBER 25, 1998
----------------------------------------- ------------------------------------------
EARNINGS
BEFORE
NET PER-SHARE EXTRAORDINARY PER-SHARE
EARNINGS SHARES AMOUNT ITEM SHARES AMOUNT
---------- ------ --------- ------------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Basic EPS............................. $ 48,076 51,901 $ 0.93 $ 41,160 43,209 $ 0.95
========= =======
Effect of Dilutive Securities:
Stock options and other dilutive
securities........................ -- 338 -- 925
Convertible subordinated notes...... 4,549 5,549 1,957 2,456
---------- ------- -------- ------
Diluted EPS........................... $ 52,625 57,788 $ 0.91 $ 43,117 46,590 $ 0.93
========== ======= ========= ======== ====== =======
</TABLE>
4. Segment Information
The Company operates within the staffing industry in 12 countries
around the world: Australia, Canada, France, Germany, Hong Kong, Italy,
New Zealand, Singapore, Spain, The Netherlands, the United Kingdom and
the United States. The Company considers its operating segments to be
North America, Europe and Australia/Asia. These operating segments
generally follow the management organization structure of the Company
and also represent, in the opinion of management, the most meaningful
aggregation of the Company's multiple operating units across the world.
This aggregation is based upon geographic similarities including market
growth rates, profitability, foreign currency exposure and local laws
and regulations. In each of these operating segments the Company's five
services, consulting, managed staffing, outsourcing, search/recruitment
and flexible staffing, are provided. The Company evaluates the
performance of its operating segments and allocates resources to them
based on revenues, gross profit and segment contribution. Segment
contribution is defined as income before Year 2000 costs, restructuring
and integration costs, central costs, interest and income taxes. All
intercompany revenues and expenses are eliminated in computing segment
revenues, gross profit and segment contribution. Prior years' data has
been restated to conform to the current year reportable operating
segments presentation.
5
<PAGE> 8
Information on operating segments and a reconciliation to earnings
before income taxes for the three and nine months ended September 24,
1999 and September 25, 1998 are as follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------------- -------------------------------
SEPTEMBER 24, SEPTEMBER 25, SEPTEMBER 24, SEPTEMBER 25,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES:
North America .............. $ 717,460 $ 361,576 $1,479,342 $1,016,732
Europe ..................... 171,821 122,231 461,254 321,658
Australia/Asia ............. 67,138 14,244 188,929 37,474
---------- ---------- ---------- ----------
$ 956,419 $ 498,051 $2,129,525 $1,375,864
========== ========== ========== ==========
GROSS PROFIT:
North America .............. $ 190,892 $ 112,566 $ 421,709 $ 315,037
Europe ..................... 85,755 63,999 236,457 176,475
Australia/Asia ............. 23,552 6,967 64,548 19,454
---------- ---------- ---------- ----------
$ 300,199 $ 183,532 $ 722,714 $ 510,966
========== ========== ========== ==========
SEGMENT CONTRIBUTION:
North America .............. $ 47,205 $ 31,428 $ 108,872 $ 83,395
Europe ..................... 21,330 16,011 56,846 44,066
Australia/Asia ............. 5,852 1,756 13,664 3,806
---------- ---------- ---------- ----------
74,387 49,195 179,382 131,267
Central costs .............. 15,044 13,443 45,936 37,703
Year 2000 costs ............ 3,038 -- 3,038 --
Restructuring and
integration costs ........ 20,864 -- 20,864 --
Interest, net .............. 11,438 4,983 23,522 19,535
---------- ---------- ---------- ----------
Earnings before income taxes
and extraordinary item ... $ 24,003 $ 30,769 $ 86,022 $ 74,029
========== ========== ========== ==========
</TABLE>
6
<PAGE> 9
5. Norrell Merger and Other Acquisitions
On July 2, 1999, the Company completed its previously announced merger
with Norrell Corporation ("Norrell"). Norrell shareholders received
either a 0.9 share of Interim common stock or a cash payment of $18.76
per share. The holders of approximately 13% of Norrell's common stock
elected to receive cash in lieu of Interim stock and Interim issued
approximately 20.8 million shares to former Norrell shareholders and
converted existing Norrell stock options into options to purchase
approximately 1.6 million shares of Interim common stock. The value of
the transaction, based upon the closing price of Interim stock on June
30, 1999 and including debt assumed, was approximately $650.0 million.
In contemplation of the merger with Norrell, the Company completed a
plan of financing which included increasing the size of the senior
credit facility from $359.2 million to $675.0 million, adding a
facility secured by the Company's accounts receivable of $250.0 million
($150.0 million drawn) and issuing $53.0 million in Australian dollar
term financing. The existing senior credit facility's term was extended
to 2004. The outstanding balance under this facility was $256.0 million
at June 25, 1999. The debt backed by accounts receivable and the
Australian financing were used to repay existing indebtedness of
Norrell, fund the cash portion of the purchase price and fund
transaction costs associated with the merger.
The merger has been accounted for using the purchase method of
accounting, and Norrell's tangible and intangible assets and
liabilities have been adjusted to their fair market values in the
accompanying balance sheet. Any excess consideration paid by Interim
over the fair market value of Norrell's net assets has been allocated
to goodwill and other intangibles.
The following table presents unaudited proforma consolidated operating
results as if the Company's acquisition of Norrell had been consummated
as of December 27, 1997. The unaudited pro forma results include
adjustments to historical amounts including additional amortization of
the excess of costs over the fair value of net assets acquired,
increased interest on borrowings to finance the acquisition, reduced
depreciation related to the disposition and write-down of certain fixed
assets and the elimination of the operating results of Norrell's health
care division which has been classified as assets held for sale
subsequent to the acquisition. The proforma consolidated operating
results do not purport to present actual operating results had the
acquisition been made at the beginning of fiscal 1998, or the results
which may occur in the future.
<TABLE>
<CAPTION> (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
NINE MONTHS ENDED
----------------------------------------
SEPTEMBER 24, 1999 SEPTEMBER 25, 1998
------------------ ------------------
<S> <C> <C>
Revenues $2,854,847 $ 2,394,349
========== ===========
Net earnings before extraordinary item $ 55,266 $ 60,714
========== ===========
Net earnings $ 55,266 $ 57,941
========== ===========
Diluted earnings per share $ 0.87 $ 0.88
========== ===========
</TABLE>
During the nine months ended September 24, 1999, the Company completed
acquisitions excluding Norrell for total cash consideration of
approximately $61.5 million and made the final payment associated with
the 1998 acquisition of Computer Power Group Limited ("Computer Power")
in the amount of approximately $111.0 million.
6. Restructuring and Integration
During the third quarter of 1999, the Company incurred approximately
$20.9 million of restructuring and integration costs related to a plan
(the "Plan") adopted by management in which certain redundant functions
and assets of the Company, as a result of the Norrell acquisition, will
be eliminated.
Restructuring costs and charges of approximately $12.8 million include
employee severance costs of approximately $3.7 million and facility
closure costs of $7.0 million primarily relating to the elimination of
redundant branch locations. The employee severance related to
approximately 160 positions from various job functions, of which
approximately 25 were terminated and $0.5 million was paid as of
September 24, 1999. The facility closure costs include approximately
$5.0 million in lease termination costs and approximately $2.0 million
in losses on the disposition of facility related fixed assets,
primarily the write-off of leasehold improvements on closed branch
locations and write-down of furniture and fixtures to their estimated
fair value, determined by comparable market information. These assets
will be taken out of service at the time properties are abandoned and
consequently will not be depreciated further after abandonment.
Depreciation expense associated with the leasehold improvements and
furniture and fixtures to be disposed of amounted to approximately $0.6
million for the nine months ended September 24, 1999. As of September
24, 1999 severance and lease termination costs of approximately $8.0
million are included in the caption "accounts payable and other accrued
expenses" in the accompanying Consolidated Balance Sheet.
In addition, as part of the Plan, the Company recorded a charge of
7
<PAGE> 10
approximately $2.0 million for the write-off of certain software
programs that will no longer be utilized as a result of the
acquisition. These assets were taken out of service at the time of the
write-down and consequently were not depreciated further after the
write-down.
Integration costs of approximately $8.1 million include approximately
$3.6 million in costs relating to employees who will be severed and are
involved solely in exit functions and systems conversions,
approximately $2.6 million for a one-time acquisition completion
incentive bonus, approximately $0.7 million in relocation of employees
and approximately $1.2 million in other related integration costs. As
of September 24, 1999 all of these charges have been paid.
7. Extraordinary Item
In June 1998 the Company used a portion of net proceeds from a common
stock and notes offering to repay its U.S. dollar denominated term
loan (the "term loan") and U.S. dollar denominated amounts outstanding
under its revolving credit facility. The prepayment of the term loan
and the termination of the related interest rate swap agreements
resulted in an extraordinary charge for early extinguishment of debt of
$2.8 million ($4.6 million before tax) or $0.06 per diluted share in
1998.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTRODUCTION
Interim is a leader in identifying, assessing, deploying and measuring
talent for a wide variety of businesses. The Company is organized into
three operating segments, North America, Europe and Australia/Asia. In
each of its operating segments, Interim provides five services. The
Company's five services are: (1) consulting - including outplacement,
executive coaching and information technology ("IT") consulting; (2)
managed staffing - such as temporary and permanent workforce
management, which includes Interim On-Premise and vendor management;
(3) outsourcing - includes functional management and staffing of
various administrative functions, including full service call center
management; (4) search/recruitment - such as contingency recruiting and
executive retained search; and (5) flexible staffing - temporary
personnel from administrative personnel to executives.
Acquisition of Norrell Corporation
On July 2, 1999, the Company completed its previously announced merger
with Norrell Corporaton ("Norrell"). Under the terms of the merger, the
shareholders of Norrell received in exchange for each share of
Norrell's common stock either a 0.9 share of Interim's common stock or
a cash payment of $18.76. The holders of approximately 13% of Norrell's
common stock elected to receive the cash payment which amounted to
approximately $75.6 million. Accordingly, Interim issued approximately
20.8 million shares of Interim's common stock to former Norrell
shareholders and converted existing options to purchase Norrell common
stock into options to purchase approximately 1.6 million shares of
Interim common stock. The value of the transaction based upon the
closing price of Interim common stock on June 30, 1999 was
approximately $650.0 million.
Norrell is a strategic workforce management company focusing on IT
consulting, flexible staffing (including IT, accounting, administrative
and light industrial) and outsourcing. Norrell's revenues for its
fiscal year ended November 1, 1998 were approximately $1.4 billion.
Operations of Norrell were combined with Interim's existing operating
segments effective with the completion of the merger and management of
both companies' operations have been combined. As such, all the
discussion in the following Management's Discussion and Analysis
includes Norrell's operations in Interim's operating segments and
services from July 2, 1999.
8
<PAGE> 11
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------------------------------
SEPTEMBER 24, SEPTEMBER 25,
1999 % OF TOTAL 1998 % OF TOTAL
------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Consulting ................. $163,335 17.1% $ 75,163 15.1%
Managed Staffing ........... 190,026 19.9% 78,954 15.9%
Outsourcing ................ 71,106 7.4% 5,618 1.1%
Search/Recruitment ......... 86,304 9.0% 67,361 13.5%
Flexible Staffing .......... 445,648 46.6% 270,955 54.4%
-------- -------- -------- --------
$956,419 100.0% $498,051 100.0%
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
% OF REVENUES % OF REVENUES
------------- -------------
<S> <C> <C> <C> <C>
GROSS PROFIT:
Consulting ................. $ 64,009 39.2% $ 29,128 38.8%
Managed Staffing ........... 37,170 19.6% 15,885 20.1%
Outsourcing ................ 11,646 16.4% 1,584 28.2%
Search/Recruitment ......... 86,304 100.0% 67,361 100.0%
Flexible Staffing .......... 101,070 22.7% 69,574 25.7%
-------- -------- -------- --------
$300,199 31.4% $183,532 36.9%
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
------------------------------------------------------
SEPTEMBER 24, SEPTEMBER 25,
1999 % OF TOTAL 1998 % OF TOTAL
------------ --------- ------------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Consulting ................. $ 380,579 17.9% $ 202,255 14.7%
Managed Staffing ........... 357,007 16.8% 216,060 15.7%
Outsourcing ................ 85,493 4.0% 15,013 1.1%
Search/Recruitment ......... 240,579 11.3% 192,868 14.0%
Flexible Staffing .......... 1,065,867 50.0% 749,668 54.5%
---------- -------- ---------- --------
$2,129,525 100.0% $1,375,864 100.0%
========== ======== ========== ========
</TABLE>
<TABLE>
<CAPTION>
% OF REVENUES % OF REVENUES
------------- -------------
<S> <C> <C> <C> <C>
GROSS PROFIT:
Consulting ................. $154,405 40.6% $ 77,532 38.3%
Managed Staffing ........... 69,464 19.5% 43,482 20.1%
Outsourcing ................ 15,729 18.4% 4,549 30.3%
Search/Recruitment ......... 240,579 100.0% 192,868 100.0%
Flexible Staffing .......... 242,537 22.8% 192,535 25.7%
-------- -------- -------- --------
$722,714 33.9% $510,966 37.1%
======== ======== ======== ========
</TABLE>
REVENUES. Revenues in the third quarter of 1999 increased 92% to $956.4
million compared with $498.1 million in the third quarter of 1998. In
the first nine months of 1999 revenue increased 55% to $2.1 billion
from $1.4 billion in the first nine months of 1998. Excluding the
impact of Norrell, revenues increased 28% and 31% in the third quarter
and first nine months of 1999, respectively, compared with the same
periods in 1998. Consulting revenues (excluding Norrell) increased 47%
and 62% in the third quarter and first nine months of 1999,
respectively, compared with the same periods in 1998. Consulting growth
reflects the fourth quarter 1998 acquisitions of Computer Power Group
Limited ("Computer Power") in Australia and Ouranos Informatica Groep
B.V. ("Ouranos") in The Netherlands as well as strong organic growth in
IT consulting. Organic growth rates in IT consulting slowed in the
third quarter compared with growth rates during the first half of the
year due to weakening of demand for IT services in both the United
States and United Kingdom. Managed staffing revenues (excluding
Norrell) increased 24% and 23% in the third quarter
9
<PAGE> 12
and first nine months of 1999, respectively, compared with the same
periods in 1998 reflecting the continued expansion in North America of
both the Interim On-Premise program and technology help-desk services.
The increase in outsourcing revenues in both 1999 periods was due to
the Norrell merger. Search/recruitment revenues (excluding Norrell)
increased 19% and 22% in the third quarter and first nine months of
1999, respectively, compared with the same periods in 1998 due to
strong organic growth primarily in European finance, sales and
marketing recruitment. Flexible staffing revenues (excluding Norrell)
increased 25% and 28% in the third quarter and first nine months of
1999, respectively, compared with the same periods in 1998. Flexible
staffing growth rates reflect strong organic growth within all
operating segments and with most skill types. Finance and accounting
flexible staffing worldwide was particularly strong in both 1999
periods compared with 1998. The acquisitions of AGO Uitzendbureau
("AGO") in The Netherlands in July 1998, Computer Power in December
1998, Tutor Recursos Humanos ("Tutor") in March 1999 and the conversion
of a franchise operation to Company owned also impacted flexible
staffing growth rates. Operations of Company owned branches also
positively impacted flexible staffing growth in the same periods.
GROSS PROFIT. Gross profit in the third quarter of 1999 increased 64%
to $300.2 million compared with $183.5 million in the third quarter of
1998. In the first nine months of 1999 gross profit increased 41% to
$722.7 million from $511.0 million in the first nine months of 1998.
Gross profit margins were 31.4% and 33.9% during the third quarter and
first nine months of 1999, respectively, compared with 36.9% and 37.1%
during the third quarter and first nine months of 1998, respectively.
Excluding the impact of Norrell in the third quarter of 1999, gross
profit margins were 36.0% in both the third quarter and first nine
months of 1999. The Norrell merger had the impact of lowering overall
gross profit margins due primarily to a higher proportion of
outsourcing business and its flexible staffing business which has
slightly lower gross profit rates than Interim's existing flexible
staffing. Margins (excluding Norrell) in both 1999 periods were
slightly lower than the comparable 1998 periods due to the inclusion
this year of Computer Power's flexible staffing, lower pricing
associated with business expansion at existing On-Premise clients and
higher self-insured workers' compensation costs.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 61% to $208.0 million compared with
$128.8 million in the third quarter of 1998. In the first nine months
of 1999 selling, general and administrative expenses increased 42% to
$517.4 million from $363.2 million in the first nine months of 1998.
Selling, general and administrative expenses as a percentage of
revenues were 21.8% and 24.3% during third quarter and first nine
months of 1999, respectively, compared with 25.9% and 26.4% during the
third quarter and first nine months of 1998, respectively. Comparisons
of selling, general and administrative expenses excluding Norrell are
less relevant as the functions and activities included in this caption
were consolidated and rationalized during third quarter 1999. Selling,
general and administrative expenses as a percentage of revenues
declined in both 1999 periods with higher revenues allowing greater
leveraging of expenses. In addition, Norrell's outsourcing business
which has a lower proportionate amount of selling, general and
administrative costs, had the effect of lowering selling, general and
administrative costs as a percentage of revenues in both 1999 periods
compared with the same 1998 periods. These positive trends within
selling, general and administrative costs were somewhat offset as the
Company continued to deploy new technology including a new front-office
system within its North American flexible staffing offices and
continued the consolidation of its North American back office
operations.
LICENSEE COMMISSIONS. Licensee commissions increased 70% to $22.6
million compared with $13.3 million in the third quarter of 1998. In
the first nine months of 1999 licensee commissions increased 27% to
$47.8 million from $37.6 million in the first nine months of 1998.
Licensee commissions (excluding Norrell) in the third quarter and first
nine months of 1999 were $14.1 million and $39.3 million, respectively,
and increased consistent with the growth of Interim licensee revenue.
Licensee commissions as a percentage of revenue decreased during the
third quarter due to Norrell whose licensee commissions have a lower
commission structure than Interim.
AMORTIZATION OF INTANGIBLES. Amortization expense increased 81% to
$10.2 million compared with $5.7 million in the third quarter of 1998.
In the first nine months of 1999 amortization expense increased 45% to
$24.0 million from $16.5 million in the first nine months of 1998. The
increase in both 1999 periods compared with same periods in 1998
reflects the increase in intangible assets arising from acquisitions.
Amortization expense in the third quarter related to the goodwill
recorded as a result of the Norrell merger was $3.1 million.
10
<PAGE> 13
INTEREST EXPENSE. Interest expense increased 56% to $12.0 million
compared with $7.7 million in the third quarter of 1998. In the first
nine months of 1999 interest expense increased 8% to $25.5 million from
$23.5 million in the first nine months of 1998. The increases in both
1999 periods compared with 1998 resulted from borrowings primarily
associated with the Norrell merger and the Computer Power acquisition.
The Company had average borrowings outstanding during the third quarter
and first nine months of 1999 of $771.1 million and $577.9 million,
respectively, at an average rate of 6.1% in the third quarter and 5.8%
in the first nine months. The Company had average borrowings
outstanding during the third quarter and first nine months of 1998 of
$459.1 million and $454.9 million, respectively, at an average rate of
6.7% in the third quarter and 6.9% in the first nine months.
INTEREST INCOME. Interest income in the third quarter decreased to $0.6
million from $2.7 million in the prior year period. During the first
nine months of 1999 interest income was $2.0 million compared with $4.0
million in the same 1998 period. Higher interest income in both 1998
periods resulted from higher cash balances resulting from the second
quarter of 1998 common stock and notes offerings.
YEAR 2000 COSTS. Year 2000 costs represent the costs associated with
remediating Norrell's application systems - see Year 2000 Compliance
below.
RESTRUCTURING AND INTEGRATION COSTS. During the third quarter of 1999,
the Company incurred $20.9 million of restructuring and integration
costs related to a plan (the "Plan") adopted by management in which
certain redundant functions and assets of the Company, as a result of
the Norrell acquisition, will be eliminated.
Restructuring costs and charges of approximately $12.8 million include
employee severance costs of approximately $3.7 million and facility
closure costs of $7.0 million primarily relating to the elimination of
redundant branch locations. The employee severance related to
approximately 160 positions from various job functions. The facility
closure costs include approximately $5.0 million in lease termination
costs and approximately $2.0 million in losses on the disposition of
facility related fixed assets, primarily the write-off of leasehold
improvements on closed branch locations and write-down of furniture and
fixtures to their estimated fair value, determined by comparable market
information. These assets will be taken out of service at the time
properties are abandoned and consequently will not be depreciated
further after abandonment.
In addition, as part of the Plan, the Company recorded a charge of
approximately $2.0 million for the write-off of certain software
programs that will no longer be utilized as a result of the
acquisition. These assets were taken out of service at the time of the
write-down and consequently will not be depreciated further.
Integration costs of approximately $8.1 million include approximately
$3.6 million in costs relating to employees who will be severed and are
involved solely in exit functions and systems conversions,
approximately $2.6 million for a one-time acquisition completion
incentive bonus paid, approximately $0.7 million in relocation costs
paid and approximately $1.2 million in other related integration costs.
As of September 24, 1999 all of these charges have been paid.
INCOME TAXES. The effective tax rate for the third quarter of 1999 was
44.4% compared with 44.7% in 1998. During the first nine months of 1999
the effective tax rate was 44.1% compared with 44.4% in 1998.
NET EARNINGS. Excluding the after tax impact of the Year 2000 costs and
restructuring and integration costs, earnings per share in the third
quarter and first nine months of 1999 were $0.42 and $1.16,
respectively. These per share amounts represent an increase in the
third quarter and first nine months of 1999 of 20% and 25%,
respectively, compared with the same periods in 1998. Net earnings
decreased 22% to $13.4 million ($0.21 per diluted share) compared with
$17.0 million ($0.35 per diluted share) in the third quarter of 1998.
In the first nine months of 1999
11
<PAGE> 14
net earnings before the extraordinary item in 1998, increased 17% to
$48.1 million ($0.91 per diluted share) from $41.2 million ($0.93 per
diluted share) in the first nine months of 1998. Earnings per share
decreased 40% in the third quarter of 1999 compared with the same 1998
period and decreased 2% in the first nine months of 1999 compared with
the same 1998 period. The weighted average number of shares (as
adjusted for the dilutive impact of common stock equivalents) for the
third quarter of 1999 was 69.4 million compared with 53.5 million in
the same 1998 period. Weighted average shares for the first nine months
of 1999 were 57.8 million compared with 46.6 million for the same 1998
period. Higher average shares in both 1999 periods reflect issuance of
20.8 million shares in July related to the Norrell merger.
12
<PAGE> 15
OPERATING SEGMENTS
Information on operating segments and a reconciliation to earnings
before income taxes for the three and nine months ended September 24,
1999 and September 25, 1998 are as follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------------------------
SEPTEMBER 24, 1999 SEPTEMBER 25, 1998
----------------------- ----------------------
% OF TOTAL % OF TOTAL
---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
North America .............. $717,460 75.0% $361,576 72.6%
Europe ..................... 171,821 18.0% 122,231 24.5%
Australia/Asia ............. 67,138 7.0% 14,244 2.9%
-------- -------- -------- --------
$956,419 100.0% $498,051 100.0%
======== ======== ======== ========
% OF REVENUES % OF REVENUES
------------- -------------
GROSS PROFIT:
North America .............. $190,892 26.6% $112,566 31.1%
Europe ..................... 85,755 49.9% 63,999 52.4%
Australia/Asia ............. 23,552 35.1% 6,967 48.9%
-------- -------- -------- --------
$300,199 31.4% $183,532 36.9%
======== ======== ======== ========
% OF REVENUES % OF REVENUES
------------- -------------
SEGMENT CONTRIBUTION:
North America .............. $ 47,205 6.6% $ 31,428 8.7%
Europe ..................... 21,330 12.4% 16,011 13.1%
Australia/Asia ............. 5,852 8.7% 1,756 12.3%
-------- -------- -------- --------
74,387 7.8% 49,195 9.9%
======== ========
Central costs .............. 15,044 13,443
Year 2000 costs ............ 3,038 --
Restructuring and
integration costs......... 20,864 --
Interest, net .............. 11,438 4,983
-------- --------
Earnings before income taxes $ 24,003 $ 30,769
======== ========
NINE MONTHS ENDED
-------------------------------------------------
SEPTEMBER 24, 1999 SEPTEMBER 25, 1998
----------------------- ----------------------
% OF TOTAL % OF TOTAL
---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
North America .............. $1,479,342 69.5% $1,016,732 73.9%
Europe ..................... 461,254 21.6% 321,658 23.4%
Australia/Asia ............. 188,929 8.9% 37,474 2.7%
---------- -------- ---------- --------
$2,129,525 100.0% $1,375,864 100.0%
========== ======== ========== ========
% OF REVENUES % OF REVENUES
------------- -------------
GROSS PROFIT:
North America .............. $ 421,709 28.5% $ 315,037 31.0%
Europe ..................... 236,457 51.3% 176,475 54.9%
Australia/Asia ............. 64,548 34.2% 19,454 51.9%
---------- -------- ---------- --------
$ 722,714 33.9% $ 510,966 37.1%
========== ======== ========== ========
% OF REVENUES % OF REVENUES
------------- -------------
SEGMENT CONTRIBUTION:
North America .............. $ 108,872 7.4% $ 83,395 8.2%
Europe ..................... 56,846 12.3% 44,066 13.7%
Australia/Asia ............. 13,664 7.2% 3,806 10.2%
---------- -------- ---------- --------
179,382 8.4% 131,267 9.5%
========== ======== ========== ========
Central costs .............. 45,936 37,703
Year 2000 costs ............ 3,038 --
Restructuring and
integration costs....... 20,864 --
Interest, net .............. 23,522 19,535
---------- ----------
Earnings before income taxes
and extraordinary item..... $ 86,022 $ 74,029
========== ==========
</TABLE>
13
<PAGE> 16
NORTH AMERICA. North American revenues represented 75% and 70% of total
revenues for the third quarter and first nine months of 1999,
respectively. Revenues in the third quarter of 1999 increased 98% to
$717.5 million compared with $361.6 million in the third quarter of
1998. In the first nine months of 1999 revenue increased 46% to $1.5
billion from $1.0 billion in the first nine months of 1998. Excluding
the impact of Norrell, revenues increased 14% and 16% in the third
quarter and first nine months of 1999, respectively, compared with the
same periods in 1998. Gross profit for the third quarter and first nine
months of 1999 increased 70% and 34%, respectively, compared with the
same 1998 periods. Excluding the impact of Norrell, gross profit
increased 13% in both the third quarter and first nine months of 1999
compared with the same periods in 1998. Segment contribution (income
before Year 2000, restructuring and integration costs, central costs,
interest and income taxes) for the third quarter and first nine months
of 1999 increased 50% and 31%, respectively, compared with the same
1998 periods. Higher revenues (excluding Norrell) for the third quarter
and first nine months of 1999 compared with the same prior year periods
resulted from strong organic growth rates in most service offerings.
Particularly strong growth rates were achieved for Interim On-Premise
in both 1999 periods and within IT consulting and staffing during the
first six months of 1999. Segment contribution rates decreased in both
1999 periods compared with 1998 reflecting the impact that the Norrell
business units have on overall profitability. Segment contribution was
also impacted by the costs associated with the deployment of new
technology including a new front-office system within its North
American flexible staffing offices and the consolidation of the North
American back office operations.
EUROPE. European revenues represented 18% and 22% of total revenues for
third quarter and first nine months of 1999, respectively. Revenues in
the third quarter of 1999 increased 41% to $171.8 million compared with
$122.2 million in the third quarter of 1998. In the first nine months
of 1999 revenue increased 43% to $461.3 million from $321.7 million in
the first nine months of 1998. Excluding the impact of Norrell,
revenues increased 27% and 38% in the third quarter and first nine
months of 1999, respectively, compared with the same periods in 1998.
Gross profit for the third quarter and first nine months of 1999 both
increased 34% compared with the same 1998 periods. Excluding the impact
of Norrell, gross profit increased 22% and 30% in the third quarter and
first nine months of 1999, respectively, compared with the same periods
in 1998. Segment contribution for the third quarter and first nine
months of 1999 increased 33% and 29%, respectively, compared with the
same 1998 periods. Factors contributing to the increase in revenues,
gross profit and segment contribution include the acquisitions of AGO
in July 1998, Ouranos in November 1998 and Tutor in March 1999 combined
with strong organic growth primarily in finance, sales and marketing
flexible staffing and search/recruitment. The decrease in European
gross profit margin is primarily due to increased flexible staffing
revenues as a percentage of total revenues. Flexible staffing gross
profit margins are lower than search/recruitment margins. The decrease
in segment contribution as a percentage of revenues in both 1999
periods compared with 1998 resulted primarily from the lower gross
profit margin.
AUSTRALIA/ASIA. Australian/Asian revenues represented 7% and 9% of
total revenues for third quarter and first nine months of 1999,
respectively. Revenues in the third quarter and first nine months of
1999 increased significantly to $67.1 million and $188.9 million,
respectively. Gross profit for the third quarter of 1999 increased to
$23.6 million from $7.0 million in the prior year. Gross profit for the
first nine months of 1999 increased to $64.5 million from $19.5 million
in the same 1998 period. Segment contribution for the third quarter of
1999 increased to $5.9 million from $1.8 million in 1998. Segment
contribution was $13.7 million during the first nine months of 1999
compared with $3.8 million in the same 1998 period. The decrease in
Australian/Asian gross profit margin and segment contribution margin in
both 1999 periods compared with 1998 is due to the addition of a
significant amount of flexible staffing revenue with the acquisition of
Computer Power.
14
<PAGE> 17
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW
Cash provided by operating activities for the nine months ended
September 24, 1999 was $33.0 million compared with $35.8 million in the
prior year. Lower operating cash flows during 1999 are primarily due to
higher cash payments to settle liabilities assumed in the merger with
Norrell. These payments combined with a change in the timing of
estimated tax payments in the United Kingdom more than offset higher
1999 earnings. Days sales outstanding were approximately the same in
both periods.
Investing activities used $296.3 million for the nine months ended
September 24, 1999 primarily due to the acquisition of Norrell on July
2, 1999 which included cash payments of $87.8 million and the remaining
payments made in the first quarter of 1999 on the December 1998
acquisition of Computer Power. Investing activities used $116.4 million
for the nine months ended September 25, 1998. Also contributing to the
higher 1999 investing activities were first quarter acquisitions in the
areas of European and North American flexible staffing. Investing
activities also included $36.0 million of capital expenditures,
primarily for new computer hardware and software to continue to upgrade
and expand the Company's information technology capabilities and new
office related expenditures.
Cash provided by financing activities was $158.6 million for the nine
months ended September 24, 1999 and primarily reflects net borrowings
for the Norrell acquisition, offset by $89.4 million of purchases of
the Company's common stock. As part of the acquisition of Norrell, the
Company assumed $125.5 million in existing Norrell debt, which was
repaid with the proceeds of borrowings under the Company's credit
facilities.
The Company repurchased approximately 5.2 million shares of common
stock during the first nine months of 1999 of which 3.3 million shares
were purchased for $54.2 million in contemplation of the Norrell merger
and were reissued during July 1999. The Company has adopted an on-going
share buyback program to offset the dilutive impact of its employee
stock purchase plan and deferred compensation plan issuances. Under
this program the Company periodically buys shares in the open market.
In addition, on September 9, 1999 the Company's Board of Directors
approved an additional, accelerated program to repurchase in the open
market, up to 3.0 million shares of the Company's common stock over the
next 12 months. As of September 24, 1999, the Company had purchased 1.9
million shares under these plans.
During the third quarter, the Company completed a plan of financing
which included increasing the size of the senior credit facility from
$359.2 million to $675.0 million, adding a facility secured by the
Company's accounts receivable of $250.0 million ($150.0 million drawn)
and issuing $53.0 million in Australian dollar term financing. The
existing senior credit facility's term was extended to 2004. The
outstanding balance under this facility was $383.3 million at September
24, 1999. The debt backed by accounts receivable and the Australian
financing was used to repay existing indebtedness of Norrell, fund the
cash portion of the purchase price and fund transaction costs
associated with the merger. The Company has over $400.0 million of
available capacity allowed under its current credit facilities to fund
its operating requirements.
15
<PAGE> 18
YEAR 2000 COMPLIANCE
As discussed in both the Company's 1998 Annual Report on Form 10-K and
the Form 10-K of Norrell, it was determined that certain application
systems required upgrading to ensure operability after the year 1999.
As of October 31, 1999, substantially all of the Company's applications
(including those of Norrell) are tested, implemented and validated,
with the exception of one payroll system. This remaining system
processes full time payroll for administrative personnel and one
technology subsidiary and will be migrated to a Year 2000 ready system
during the fourth quarter of 1999.
The Company has contacted all material vendors and others on whom it
relies to assure that their systems will be converted in a timely
fashion. Based on current information received, the Company does not
foresee any material potential risk with its significant vendors and
business partners, but is in the process of obtaining final
certifications from vendors who have only recently completed their
efforts. However, there can be no assurance that the systems of other
companies on which the Company's systems rely will be converted timely,
or that a failure to convert by another company would not have a
material adverse effect on the Company. The Company is developing
contingency plans should any of its material vendors not be Year 2000
ready.
The Company estimates that the total cost of its Year 2000 project
(excluding Norrell) will not exceed $750,000, which includes both
personnel costs related to project management, programming and hardware
and software upgrades. Of this total, approximately $629,000 has been
incurred as of September 24, 1999. Total estimated costs to remediate
the Norrell systems are not expected to exceed $21.0 million, of which
$19.5 million has been incurred and expensed (with $16.5 million
incurred and expensed prior to the merger with Interim). Year 2000
expenses for the quarter ended September 24, 1999 were $3.0 million.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of September 24, 1999, the Company maintains a portion of its cash
and cash equivalents in financial instruments with original maturities
of three months or less. These financial instruments are subject to
interest rate risk and will decline in value if interest rates
increase. Due to the short duration of these financial instruments, an
immediate increase of 1% in interest rates would not have a material
effect on the Company's financial condition.
The Company's outstanding debt under the senior credit facility and
other borrowings, excluding the convertible subordinated notes, at
September 24, 1999 was $629.7 million. Interest rates on these
borrowings are based on LIBOR plus a variable margin. Based on the
outstanding balance, a change of 1.0% in the interest rate would cause
a change in interest expense of approximately $6.3 million on an annual
basis not considering the offset of the interest rate swap discussed
below.
16
<PAGE> 19
The Company utilizes interest rate swap agreements to reduce the impact
on interest expense of fluctuating interest rates on its variable rate
debt. The Company had a variable to variable interest rate swap
agreement outstanding as of September 24, 1999 with the notional amount
of $123.1 million which effectively converts interest from a British
Pound LIBOR basis to a broader index and caps the Company's exposure to
upward movement in rates at 8.5%. This agreement expires in 2002. The
cost to terminate this interest rate swap as of September 24, 1999
would have been $1.0 million.
In May 1998, the Company issued $207.0 million of 4 1/2% Convertible
Subordinated Notes due June 2005. The fair value of the Company's fixed
rate convertible subordinated debt as of September 24, 1999 was $162.7
million compared with the related carrying value of $207.0 million.
The purpose of the Company's foreign exchange hedging activities is to
mitigate the impact of changes in foreign currency exchange rates. The
Company attempts to hedge transaction exposures through natural
offsets. To the extent this is not practicable, exposure areas which
are considered for hedging include foreign currency denominated
receivables and payables, intercompany loans and firm committed
transactions. The Company uses financial instruments, principally
forward exchange contracts, in its management of foreign currency
exposures. The Company does not enter into forward contracts for
trading purposes. At September 24, 1999 the Company had outstanding
foreign currency forward contracts to sell Australian dollars in the
notional amount of $74.0 million. Termination of the foreign currency
contracts as of September 24, 1999 would have resulted in a $0.5
million gain.
17
<PAGE> 20
PART II - OTHER INFORMATION
ITEM 4. MATTERS SUBMITTED TO A VOTE OF SECURITY HOLDERS
(a) A Special Meeting of Stockholders of the Company was held on
July 1, 1999.
(b) Not applicable.
(c) At the Special Meeting, stockholders voted on the following matters:
(1) The approval of the merger of Norrell Corporation with and
into Interim Merger Corporation, in accordance with the
Agreement and Plan of Merger, dated as of March 24, 1999, as
amended, by and among the Company, Interim Merger Corporation,
a Delaware corporation and wholly-owned subsidiary of the
Company, and Norrell Corporation, a Georgia corporation.
VOTES FOR: VOTES AGAINST: ABSTENTIONS:
---------- -------------- ------------
33,564,620 1,637,789 13,614
(2) A proposal to approve an amendment to the Company's Restated
Certificate of Incorporation to increase the authorized common
shares from 100,000,000 common shares to 200,000,000 common
shares.
VOTES FOR: VOTES AGAINST: ABSTENTIONS:
---------- -------------- ------------
27,706,365 7,588,307 21,774
(3) A proposal to approve an amendment to the Company's Restated
Certificate of Incorporation to correct an inconsistency in
the Restated Certificate of Incorporation by deleting the
requirement of the affirmative vote of the holders of at least
two-thirds of the outstanding Interim common shares to amend,
modify, alter or repeal any provision of the Company's
By-laws.
VOTES FOR: VOTES AGAINST: ABSTENTIONS:
---------- -------------- ------------
33,526,900 1,657,746 26,678
(d) Not applicable.
ITEM 5. OTHER INFORMATION
FORWARD-LOOKING STATEMENTS
Part I, Items 2 (Management's Discussion and Analysis of Financial
Condition and Results of Operations) and 3 (Quantitative and
Qualitative Disclosures about Market Risk) of this Quarterly Report on
Form 10-Q may contain forward-looking statements, including statements
regarding future prospects, industry trends, competitive conditions,
litigation, year 2000 systems issues and quantitative and qualitative
estimates as to market risk. This notice is intended to take advantage
of the "safe harbor" provided by the Private Securities Litigation
Reform Act of 1995 with respect to such forward-looking statements.
These forward-looking statements involve a number of risks and
uncertainties. Among others, factors that could cause actual results to
differ materially from the Company's beliefs or expectations are the
following: industry trends and trends in the general economy;
competitive factors in the markets in which the Company operates;
changes in regulatory requirements which are applicable to the
Company's business; and other factors referenced herein or from time to
time in the Company's Securities and Exchange Commission reports.
18
<PAGE> 21
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-K:
EXHIBIT
NUMBER EXHIBIT NAME
------- ------------
3.1 Restated Certificate of Incorporation of the
Registrant, as last amended on July 6, 1999, is filed
herewith as Exhibit 3.1.
10.1 Registrant's 1994 Stock Option Plan for Franchisees,
Licensees and Agents, as amended through and restated
as of August 10, 1999, is filed herewith as Exhibit
10.1.
10.2 Form of Indemnification Agreement dated August 10,
1999 between the Registrant and each director of the
Registrant, is filed herewith as Exhibit 10.2.
10.3 Norrell Corporation Employee Stock Purchase Plan,
filed as Exhibit 10.2 to Norrell Corporation's Form
10-K for the fiscal year ended October 29, 1995 is
incorporated herein by reference.
10.4 Amended and Restated Credit Agreement, dated July 2,
1999, by and among the Registrant, the Borrowing
Subsidiaries and Nationsbank, N.A. as Administrative
Agent, The First National Bank of Chicago, as
Documentation Agent, Banc of America Securities LLC,
as Sole Lead Arranger and Book Manager, and the Bank
Parties thereto, is filed herewith as Exhibit 10.4.
10.5 Second Amendment to the Norrell Corporation Employee
Stock Purchase Plan, dated August 28, 1997, by
Norrell Corporation to be effective September 30,
1997, filed as Exhibit 10.2.2 to Norrell
Corporation's Form 10-K for the fiscal year ended
November 2, 1997 is incorporated herein by reference.
10.6 Norrell Corporation 1994 Stock Incentive Plan, filed
as Exhibit 10.27 to Norrell Corporation's
Registration Statement on Form S-1, as filed with the
Securities and Exchange Commission on June 10, 1994,
is incorporated herein by reference.
19
<PAGE> 22
10.7 Norrell Corporation 1991 Stock Option Plan, filed as
Exhibit 10.29 to Norrell Corporation's Registration
Statement on Form S-1, as filed with the Securities
and Exchange Commission on June 10, 1994 is
incorporated herein by reference.
10.8 Norrell Corporation 401(k) Retirement Savings Plan,
filed as Exhibit 10.41.1 to Norrell Corporation's
Form 10-K for the fiscal year ended October 27, 1996
is incorporated herein by reference.
10.9 Second Amendment to the Norrell Corporation 401(k)
Retirement Savings Plan dated December 30, 1996 by
Norrell Corporation to be effective January 1, 1997,
filed as Exhibit 10.41.2 to Norrell Corporation's
Form 10-K for the fiscal year ended November 2, 1997
is incorporated herein by reference.
10.10 Interim Services Inc.'s Outside Directors'
Compensation Plan, effective July 1, 1999, is filed
herewith as Exhibit 10.10.
10.11 Norrell Corporation Non-Qualified Deferred
Compensation Plan, effective January 1, 1995, filed
as Exhibit 10.42 to Norrell Corporation's Form 10-K
for the fiscal year ended October 29, 1995 is
incorporated herein by reference.
10.12 Amendment to Norrell Corporation Non-Qualified
Deferred Compensation Plan, filed as Exhibit 10.42.2
to Norrell Corporation's Form 10-K for the fiscal
year ended November 2, 1997 is incorporated herein by
reference.
10.13 Receivables Sale Agreement, dated as of July 1, 1999,
between the Registrant and each of its direct and
indirect wholly-owned subsidiaries who from time to
time thereafter becomes a Seller thereunder and
Interim Receivables Corp, is filed herewith as
Exhibit 10.13.
10.14 Credit and Security Agreement, dated as of July 1,
1999, by and among Interim Services Receivables
Corp., the Registrant, Blue Ridge Asset Funding
Corporation, Falcon Asset Securitization Corporation,
Wachovia Bank N.A., and The First National Bank of
Chicago, is filed herewith as Exhibit 10.14.
27 Financial Data Schedule is filed herewith as
Exhibit 27.
20
<PAGE> 23
(b) On July 9, 1999, the Company filed a Report on Form 8-K dated July
1, 1999 announcing the appointment of Guy W. Millner to the
Company's Board of Directors and the approval by the Stockholders of
(i) the merger with Norrell Corporation, (ii) the amendment to the
Restated Certificate of Incorporation increasing the authorized
common shares from 100,000,000 to 200,000,000, and (iii) the
amendment to the Restated Certificate of Incorporation to correct an
inconsistency in the Restated Certificate of Incorporation by
deleting the requirement of the affirmative vote of the holders of
at least two-thirds of the outstanding Interim common shares to
amend, modify, alter or repeal any provision of the Company's
By-laws. The required financial statements and pro forma financial
information were filed as part of the Registrant's Form S-4, File
No. 333-79191, as filed with Securities and Exchange Commission on
May 24, 1999.
(c) Exhibits filed herewith.
3.1 Restated Certificate of Incorporation of the Registrant, as
last amended on July 6, 1999.
10.1 Registrant's 1994 Stock Option Plan for Franchisees, Licensees
and Agents, as amended through and restated as of August 10,
1999.
10.2 Form of Indemnification Agreement dated August 10, 1999
between the Registrant and each director of the Registrant.
10.4 Amended and Restated Credit Agreement, dated July 2, 1999, by
and among the Registrant, the Borrowing Subsidiaries and
Nationsbank, N.A. as Administrative Agent, The First National
Bank of Chicago, as Documentation Agent, Banc of America
Securities LLC, as Sole Lead Arranger and Book Manager, and
the Bank Parties thereto.
10.10 Interim Services Inc.'s Outside Directors' Compensation Plan,
effective July 1, 1999.
10.13 Receivables Sale Agreement, dated as of July 1, 1999, between
the Registrant and each of its direct and indirect
wholly-owned subsidiaries who from time to time thereafter
becomes a Seller thereunder and Interim Receivables Corp.
10.14 Credit and Security Agreement, dated as of July 1, 1999, by
and among Interim Services Receivables Corp., the Registrant,
Blue Ridge Asset Funding Corporation, Falcon Asset
Securitization Corporation, Wachovia Bank N.A., and The First
National Bank of Chicago.
27 Financial Data Schedule.
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<PAGE> 24
SIGNATURES
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.
INTERIM SERVICES INC.
(Registrant)
DATE - November 5, 1999 By: /s/ Roy G. Krause
------------------------------
Roy G. Krause
Executive Vice President
and Chief Financial Officer
(principal financial officer)
DATE - November 5, 1999 By: /s/ Mark W. Smith
------------------------------
Mark W. Smith
Vice President, Finance
(principal financial officer)
22
<PAGE> 1
EXHIBIT 3.1
RESTATED CERTIFICATE
OF
INCORPORATION
OF
INTERIM SERVICES INC.
---------------------------------------
Pursuant to Sections 228, 242, and 245
of the General Corporation Law
of the State of Delaware
---------------------------------------
INTERIM SERVICES INC., a Delaware corporation (the "Corporation",
organized on September 15, 1987, under the name Interim Systems Corporation,
does hereby amend and restate its Restated Certificate of Incorporation to read
in its entirety as follows.
FIRST: The name of the Corporation is Interim Services Inc.
(hereafter, the "Corporation").
SECOND: The address of the registered office of the
Corporation in the State of Delaware is 32 Loockerman Square, Suite
L-100, Dover, Kent County, Delaware 19901. The name of the registered
agent at that address is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under
the General Corporation Law of the State of Delaware (the "GCL").
FOURTH: The aggregate number shares of all classes of stock
that the Corporation shall have authority to issue is 202,500,000,
divided into two classes as follows:
(i) 200,000,000 shares of a class designated Common Stock
with a par value of $0.01 per share; and
(ii) 2,500,000 shares of a class designated Preferred Stock,
with a par value of $.01 per share.
<PAGE> 2
The voting powers, designations, preferences, qualifications,
limitations, restrictions and special or relative rights in respect of each
class of stock are or shall be fixed as follows:
(1) Preferred Stock. The Board of Directors is expressly authorized
to issue the Preferred Stock from time to time, in one or more series, provided
that the aggregate number of shares issued and outstanding at any time of all
such series shall not exceed 2,500,000. The Board of Directors is further
authorized to fix or alter by resolution or resolutions, in respect of each
such series, the following terms and provisions of any authorized and unissued
shares of such stock:
(a) The distinctive serial designation;
(b) The number of shares of the series, which number may at any time
or from time to time be increased or decreased (but not below the number of
shares of such series then outstanding) by the Board of Directors;
(c) The voting powers and, if voting powers are granted, the extent of
such voting powers including the right, if any, to elect a director or
directors;
(d) The election, term of office, filling of vacancies and other terms
of the directorships of directors elected by the holders of any one or more
classes or series of such stock;
(e) The dividend rights, including the dividend rate and the dates on
which any dividends shall be payable;
(f) The date from which dividends on shares issued prior to the date
for payment of the first dividend thereon shall be cumulative, if any;
(g) The redemption price, terms of redemption, and the amount of and
provisions regarding any sinking fund for the purchase or redemption thereof;
(h) The liquidation preference and the amounts payable on dissolution
or liquidation;
(i) The terms and conditions, if any, under which shares of the series
may be converted; and
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<PAGE> 3
(j) Any other terms or provisions that the Board of Directors is by
law authorized to fix or alter.
(2) Common Stock. The holders of shares of Common Stock shall be
entitled (i) to vote on all matters at all meetings of the shareholders of the
Corporation on the basis of one vote for each share of Common Stock held of
record; (ii) subject to any preferential dividend rights applicable to the
Preferred Stock, to receive such dividends as may be declared by the Board of
Directors; and (iii) in the event of the voluntary, or involuntary, liquidation
or winding up of the Corporation, after distribution in full of any
preferential amounts to be distributed to holders of shares of Preferred Stock,
to receive all of the remaining assets of the Corporation available for
distribution to its shareholders, ratably in proportion to the aggregate number
of their shares of Common Stock and Preferred Stock (if the holders of such
Preferred Stock are entitled to share in such distribution).
(3) Provisions applicable to Common and Preferred Stock. No holder of
shares of any class of stock of the Corporation shall be entitled, as a matter
of right, to purchase or subscribe for any shares of any class of stock of the
Corporation, whether now or hereafter authorized. The Board of Directors shall
have authority to fix the issue price of any and all shares of any class of
stock of the Corporation.
FIFTH: (A) Number of Directors. The number of directors to constitute
the Board of Directors shall be such number as fixed by a resolution adopted by
the affirmative vote of a majority vote of the whole Board of Directors, but to
be nine until otherwise determined.
(B) Classification of Directors. Pursuant to an action taken by the
shareholders of the Corporation either at a special meeting of the shareholders
of the Corporation in 1993 or pursuant to a consent in lieu thereof of the
shareholders of the Corporation in accordance with Section 228 of the GCL, the
directors of the Corporation shall be divided into three classes: Class I,
Class II and Class III. Membership in such classes shall be as nearly equal as
possible and any increase or
3
<PAGE> 4
decrease in the number or directors shall be apportioned by the Board of
Directors among the classes to maintain the number of directors as nearly equal
as possible. The initial Class I directors shall hold office until the annual
meeting of shareholders of the Corporation in 1994, the initial Class II
directors shall hold office until the annual meeting of shareholders of the
Corporation in 1995, and the initial Class III directors shall hold office
until the annual meeting of shareholders of the Corporation in 1996 or, in each
case, until their successors are elected and qualified and subject to prior
death, resignation, retirement or removal from office. Beginning in 1994, at
each annual meeting of shareholders, the directors elected to succeed those
whose terms then expire shall belong to the same class as the directors they
succeed and shall hold office until the third succeeding annual meeting of
shareholders or until their successors are elected and qualified and subject to
the prior death, resignation, retirement or removal from office of a director.
No decrease in the number of directors constituting the Board of Directors
shall reduce the term of any incumbent director.
Whenever the holders of any one or more classes or series of Preferred
Stock of the Corporation shall have the right to elect directors, the election,
term of office, filling of vacancies and other terms of such directorships
shall be governed by the provisions of this Certificate of Incorporation
applicable to such Preferred Stock and such directors shall not be divided into
classes pursuant to this Article Fifth unless expressly provided or determined
as provided elsewhere in this Certificate of Incorporation.
(C) Vacancies. Newly created directorships resulting from an increase
in the number of directors and any vacancies on the Board of Directors
resulting from any cause shall be filled by a majority of the Board of
Directors then in office, although less than a quorum, or by a sole remaining
director. Any director elected to fill a vacancy not resulting from an
increase in the number of directors shall have the same remaining term as his
or her predecessor.
(D) Removal of Directors. The entire Board of Directors of the
corporation may be removed at any time but only by the affirmative vote of the
4
<PAGE> 5
holders of two-thirds or more of the outstanding shares of each class of stock
of the corporation entitled to elect one or more directors at a meeting of the
shareholders called for such purpose.
(E) Bylaws. The Board of Directors shall have the power to make,
alter, amend, change, add to or repeal the Bylaws of the corporation.
SIXTH: (A) The Corporation shall indemnify to the fullest extent
authorized or permitted by law (as now or hereafter in effect) any person made,
or threatened to be made a party or witness to any action, suit or proceeding
(whether civil or criminal or by or in the right of the Corporation) by reason
of the fact that he, his testator or intestate, is or was a director or
officer of the Corporation or by reason of the fact that such director or
officer, at the request of the Corporation, is or was serving any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, in any capacity. Nothing contained herein shall affect any rights
to indemnification to which employees other than directors and officers may be
entitled by law. No amendment to or repeal of this paragraph (A) of Article
Sixth shall apply to or have any effect on any right to indemnification
provided hereunder with respect to any acts or omissions occurring prior to
such amendment or repeal.
(B) No director or shareholder of the Corporation shall be personally
liable to the Corporation or its shareholders for monetary damages for any
breach of fiduciary duty as a director. Notwithstanding the foregoing sentence,
a director shall be liable to the extent provided by applicable law (i) for any
breach of the director's duty of loyalty to the Corporation or its
shareholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to Section
174 of the GCL or (iv) for any transaction from which such director derived an
improper personal benefit. No amendment to or repeal of this paragraph (B) of
Article Sixth shall adversely affect any right or protection of any director of
the Corporation existing at the time of such amendment to repeal for or with
respect to any
5
<PAGE> 6
acts or omissions of such director occurring prior to such amendment or repeal.
SEVENTH: In the event any class of stock of the Corporation is
registered pursuant to the Securities Exchange Act of 1934, as amended, for so
long as such class of stock of the Corporation is so registered, any action
that may be taken at any annual or special meeting of the shareholders of the
Corporation shall be taken, only at an annual or special meeting of the
shareholders of the Corporation and no such action shall be taken without such
a meeting, regardless of any provision of the GCL that permits shareholders to
take such an action by written consent in lieu of an annual or special meeting
of shareholders.
EIGHTH: Special meetings of the shareholders for any lawful purpose or
purposes may be called at any time only by a majority of the Board of
Directors, by the Chairman of the Board or by the President. Each call for a
special meeting of the shareholders shall state the time, the day, the place
and the purpose or purposes of such meeting and shall be in writing, signed by
the persons making the same and delivered to the secretary. No business shall
be conducted at any special meeting of the shareholders other than the business
stated in the call for such meeting. The shareholders of the Corporation shall
not be entitled, as a matter of right, to require the Board of Directors to
call a special meeting of the shareholders or to bring any business before a
special meeting of the shareholders.
NINTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation,
or any amendment thereof, in the manner now or hereafter prescribed by the GCL
or this Restated Certification of Incorporation.
TENTH: The affirmative vote of the holders of not less than 2/3 of the
outstanding shares of stock of the Corporation entitled to vote generally in
the election of directors shall be required to amend, modify, alter or repeal
Articles Fourth, Fifth, Eighth and Tenth of this Restated Certificate of
Incorporation.
6
<PAGE> 7
IN WITNESS WHEREOF, the Corporation has caused this Restated
Certificate of Incorporation to be duly adopted by H & R Block Group, Inc. , a
Delaware corporation, and the sole shareholder of the Corporation, pursuant to
Section 228, and in accordance with the provisions of Sections 242 and 245, of
the General Corporation Law of the State of Delaware and to be executed in its
corporate name this 27th day of October, 1993.
INTERIM SERVICES INC.
By /s/ Allan Sorensen
-------------------------------
Allan Sorensen
Chairman of the Board
ATTEST:
BY: /s/ John B. Smith
---------------------------
Secretary
7
<PAGE> 1
Exhibit 10.1
INTERIM SERVICES INC.
1994 STOCK OPTION PLAN FOR FRANCHISEES, LICENSEES
AND AGENTS, AS AMENDED
(AS AMENDED THROUGH AND RESTATED AS OF, AUGUST 10, 1999)
1. PURPOSES. The purposes of this 1994 Stock Option Plan for Franchisees,
Licensees and Agents are to encourage franchisees, licensees and agents to
remain committed to Interim Services Inc. and its subsidiary corporations,
and to give participating franchisees a stake in the Company's future
growth and prosperity.
2. DEFINITIONS.
(a) "Agent" shall mean any person or entity providing court reporting or
similar services and that has entered into an agency agreement for
such purposes with the Company.
(b) "Common Stock" shall mean the common stock, $0.01 par value, of the
Company.
(c) "Company" shall mean Interim Services Inc., a Delaware corporation,
and its subsidiaries.
(d) "Franchisee" shall mean any person or entity that is a party to a
franchise agreement with the Company, which franchise agreement is
in effect at the time in question and pursuant to which the Company
has granted to such person or entity a franchise to operate a
business using certain plans, procedures, trademarks and service
marks of the Company.
(e) "Licensee" shall mean any person or entity that is a party to a
license agreement with the Company, which license agreement is in
effect at the time in question and pursuant to which the Company has
granted to such person or entity a license to market and provide on
behalf of the Company certain services and, in connection therewith,
to use certain plans, systems, procedures, methods, trademarks,
service marks, trade names and goodwill of the Company.
(f) "Plan" shall mean this 1994 Stock Option Plan for Franchisees,
Licensees and Agents, as the same may be amended from time to time.
(g) "Recipient" shall mean a Franchisee, Licensee or Agent who has been
granted a Stock Option under the Plan.
(h) "Stock Option" shall mean the right to purchase, upon exercise of a
Stock Option granted under this Plan, shares of the Common Stock.
1
<PAGE> 2
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company (the
"Committee"), which is appointed from time to time by, and serves at the
pleasure of, the Board of Directors of the Company. A majority of the
Committee members shall constitute a quorum and the acts of a majority of
the members present at any meeting at which a quorum is present, or acts
approved in writing by a majority of the Committee, shall be valid acts of
the Committee. All references herein to the Committee shall be deemed to
mean any successor to the Committee, however designated, or the Board of
Directors of the Company if the Board has not appointed a Committee.
The Committee shall have full power and authority to construe, interpret
and administer the Plan and, subject to the powers herein specifically
reserved to the Board of Directors and subject to the other provisions of
this Plan, to make determinations which shall be final, conclusive and
binding upon all persons including, without limitation, the Company, the
shareholders of the Company, the Board of Directors, the Recipients and
any persons having any interest in any Stock Options which may be granted
under the Plan. The Committee shall impose such additional conditions upon
Stock Options granted under this Plan and the exercise thereof as may from
time to time be deemed necessary or advisable, in the opinion of counsel
to the Company, to comply with applicable laws and regulations. The
Committee from time to time may adopt rules and regulations for carrying
out the Plan and written policies for implementation of the Plan. Such
policies may include, but need not be limited to, the type, size and terms
of Stock Options to be granted to Franchisees, Licensees and Agents and
the conditions for payment of Stock Options by Recipients.
4. ABSOLUTE DISCRETION. Subject to other provisions of the Plan, the
Committee may, in its sole and absolute discretion, from time to time
during the continuance of the Plan, (i) determine which eligible
Franchisees, Licensees and Agents shall be granted Stock Options under the
Plan, (ii) grant Stock Options to any Franchisees, Licensees and Agents so
selected, (iii) determine the type, date of grant, size and terms of Stock
Options to be granted to Franchisees, Licensees and Agents, (iv) establish
objectives and conditions for receipt of Stock Options, (v) place
conditions or restrictions on the receipt of Stock Options by Franchisees,
Licensees and Agents or on the payment or exercise of any Stock Options,
(vi) waive or modify the terms and conditions set forth in Section 7 for
any or all Stock Options granted hereunder and (vii) do all other things
necessary and proper, including but not limited to discretionary actions
allowable herein, to carry out the intentions of this Plan.
5. ELIGIBILITY. Stock Options may be granted to any Franchisee, Licensee or
Agent that has met the following conditions:
(a) such Franchisee, Licensee or Agent shall have continuously operated
a franchised, licensed or agency office (measured from the date such
office opened for business) pursuant to a franchise, license or
agency agreement with the Company for at least one year prior to and
including the date of grant;
2
<PAGE> 3
(b) such Franchisee, Licensee or Agent shall have met the performance
quota set forth in such Franchisee's, Licensee's or Agent's
franchise, license or agency agreement for the most recently ended
period set forth in such franchise, license or agency agreement;
(c) except to the extent the Company has authorized otherwise in
writing, such Franchisee, Licensee or Agent shall have entered into,
and be a party to, an agreement with the Company to operate its
business under a service mark that includes the word "Interim";
(d) such Franchisee, Licensee or Agent shall have entered into, and be a
party to, an agreement with the Company to participate in the
Company's national advertising program; and
(e) such Franchisee, Licensee or Agent shall not have been in default
during the one-year period ending on the date of grant (or at any
time thereafter, as the case may be) under the terms of its
franchise, license or agency agreement with the Company.
6. STOCK SUBJECT TO THE PLAN. The total number of shares of Common Stock
issuable under this Plan may not at any time exceed 250,000 shares,
subject to adjustment as provided in Sections 14 and 15 hereof. Shares of
Common Stock not actually issued pursuant to Stock Options shall be
available for future Stock Options. Shares of Common Stock to be delivered
or purchased under the Plan may be either authorized but unissued Common
Stock or treasury shares.
7. ACCRUAL OF EXERCISE RIGHTS.
(a) Stock Options may not be exercised until at least one year after
their date of grant, and then may be exercised only in the following
increments (that is, only after the end of each one-year period)
until the expiration of five years after their applicable date of
grant, at which time a Stock Option shall become fully exercisable:
PERIOD INCREMENT
------ ---------
One year after date of grant 10%
Two years after date of grant 15%
Three years after date of grant 20%
Four years after date of grant 25%
Five years after date of grant 30%;
provided, however, that so long as all of the conditions set forth
in clauses (b) through (e) of Section 5 shall, as of the date of
exercise, continuously have been met during the applicable period
commencing on the applicable date of grant and ending on the date of
exercise (unless otherwise waived or modified by the Committee), the
right to exercise a Stock Option shall be cumulative, so that if for
any reason the full number of shares of Common Stock purchasable
pursuant to exercise of a Stock Option in any year shall not be
purchased in such year, they
3
<PAGE> 4
may be purchased at any time or from time to time thereafter (but
prior to the termination of the Stock Option). Accordingly, in the
event a Recipient fails to meet any of the conditions set forth in
clauses (b) through (e) of Section 5 at any time (unless otherwise
waived or modified by the Committee), to the extent such Stock
Option was exercisable prior to such failure and was not so
exercised, the number of shares of Common Stock purchasable pursuant
to such Stock Option may no longer be purchased pursuant to such
Stock Option. The extent to which a Stock Option may be exercised
from time to time pursuant to this Section 7 is hereinafter referred
to as the "Vested Portion." All Stock Options shall expire as to all
of their unexercised shares 10 years after the date of such grant.
(b) Notwithstanding anything herein to the contrary, a Recipient under a
Stock Option granted prior to June 29, 1997 whose franchise or
license agreement has been assigned by the Company to Interim
Healthcare Inc. ("IHI"), in contemplation of the Company's sale of
IHI to Catamaran Acquisition Corp. (the "Buyer"), shall be deemed
to be a Franchisee or Licensee, as the case may be, for purposes of
the Plan, provided such agreement, as assigned to IHI, is in full
force and effect at the time in question. Additionally, with respect
to any such Recipient, the requirement set forth in Section 7(a)
that the conditions set forth in Sections 5(b) through (e)
continuously shall have been met as of the date of exercise of any
Stock Option shall be revised to provide that the conditions set
forth in Sections 5(b) and (e) and the conditions set forth below in
Sections 7(b)(i) and (ii) continuously shall have been met by such
Recipient:
(i) except to the extent the Company has authorized otherwise in
writing, such Recipient either (A) shall have entered into,
and be a party to, an agreement with the Company, or its
assignee, to operate such Recipient's business under a service
mark that includes the word "Interim" or (B) shall have
entered into, and be a party to, an agreement with IHI to
operate such Recipient's business under a new service mark
that in the future may be adopted by IHI; and
(ii) such Recipient shall have entered into, and be a party to, an
agreement either (A) with the Company to participate in the
Company's national advertising program or (B) with IHI or
Buyer to participate in a national advertising program to be
offered by IHI or Buyer.
8. STOCK OPTION PRICE. The purchase price per share of Common Stock under
each Stock Option granted hereunder shall be equal to the closing price
for the Common Stock on the New York Stock Exchange on date the Stock
Option is granted (or if such closing price is not reported on the date of
grant, the last reported closing price).
9. PAYMENT OF STOCK OPTION PRICE. Payment for exercise of any Stock Option
granted hereunder shall be made (a) in cash, or (b) by delivery of Common
Stock having a market value equal to the aggregate option price, or (c) by
a combination of payment of cash and delivery of Common Stock in amounts
such that the amount of cash plus the market value of the Common Stock
equals the aggregate option price.
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<PAGE> 5
10. CONTINUATION AS FRANCHISEE, LICENSEE OR AGENT; CONDITIONS TO EXERCISE. A
Recipient must, unless otherwise determined by the Committee, in its sole
and absolute discretion, and the Recipient receives written notice of such
determination, at the time a Stock Option is exercised (i) be either a
Franchisee, Licensee or Agent and (ii) meet the eligibility requirements
set forth in clauses (b) through (e) of Section 5 (except that such
requirements shall be met as of the date the Stock Option is exercised in
lieu of the date of grant). Any unexercised Vested Portion of an
outstanding Stock Option shall terminate, unless otherwise determined by
the Committee, in its sole and absolute discretion, and the Recipient
receives written notice of such determination, upon the cessation of a
Recipient's status as a Franchisee, Licensee or Agent (other than as a
result of a Franchisee's, Licensee's or Agent's death, if the Franchisee,
Licensee or Agent is an individual, in which case the foregoing sentence
shall not apply to the exercise of such Stock Option). The Committee may
establish such other provisions with respect to the termination or
disposition of a Stock Option on the death of a Recipient who is a
Franchisee, Licensee or Agent and an individual, as the Committee, in its
sole discretion, deems advisable. The Committee shall have the sole power
to determine the date of any circumstances that shall constitute cessation
as a Franchisee, Licensee or Agent and to determine whether such cessation
is the result of death or any other reason.
11. REGISTRATION OF STOCK. No Stock Option may be exercised at any time when
its exercise or the delivery of shares of Common Stock or other securities
thereunder would, in the opinion of counsel for the Company, be in
violation of any state or federal law, rule or ordinance, including any
state or federal securities laws or any regulation or ruling of the
Securities and Exchange Commission. If at any time counsel for the Company
shall determine that qualification or registration under any state or
federal law of the shares of Common Stock or other securities thereby
covered, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of or in connection with the
exercise of such Stock Option or the purchase of shares thereunder, the
Stock Option may not be paid or exercised in whole or in part unless and
until such qualification, registration, consent or approval shall have
been effected or obtained free of any conditions such counsel deems
unacceptable.
12. STATUS OF FRANCHISEE, LICENSEE OR AGENT. The grant of a Stock Option under
the Plan shall not be construed as imposing upon the Company, IHI, or
their respective assigns, the obligation to continue the status of the
Recipient as a Franchisee, Licensee or Agent.
13. NON-ASSIGNABILITY. No Stock Option granted pursuant to the Plan shall be
transferable or assignable by the Recipient; provided that (i) to the
extent a Stock Option does not terminate upon the death of a Recipient who
is a Franchisee, Licensee or Agent and an individual, Stock Options held
by such a Recipient may be transferable or assignable by will or the laws
of descent and distribution and (ii) the Committee may allow, in its sole
and absolute discretion, a Recipient to assign or transfer its Stock
Options to a shareholder or other owner or affiliate of the Recipient.
5
<PAGE> 6
14. DISTRIBUTION OR OTHER ADJUSTMENTS. In the event of any change in the
capital structure of the Company, including but not limited to a change
resulting from a stock dividend or split-up, or combination or
reclassification of shares, the Board of Directors of the Company shall
make such equitable adjustments with respect to the Stock Options or any
provisions of this Plan as it deems necessary or appropriate, including,
if necessary, any adjustment in the maximum number of shares of Common
Stock subject to an outstanding Stock Option.
15. MERGER, CONSOLIDATION, REORGANIZATION, LIQUIDATION, ETC. If the Company
shall become a party to any corporate merger, consolidation, major
acquisition of property for stock, reorganization or liquidation, the
Board of Directors of the Company may make such arrangements it deems
advisable with respect to outstanding Stock Options, which shall be
binding upon the Recipients of outstanding Stock Options, including, but
not limited to, the substitution of new Stock Options for any Stock
Options then outstanding, the assumption of such Stock Options and the
termination of or payment for such Stock Options.
16. COSTS AND EXPENSES. The cost and expenses of administering the Plan shall
be borne by the Company and not charged to any Stock Option nor to any
Recipient.
17. STOCK OPTION AGREEMENTS. The committee shall have the power to specify the
form of Stock Option Agreements to be granted from time to time pursuant
to and in accordance with the provisions of the Plan and such agreements
shall be final, conclusive and binding upon the Company, the shareholders
of the Company and the Recipients. No Recipient shall have or acquire any
rights under the Plan except such as are evidenced by a duly executed
agreement in the form thus specified.
18. NO SHAREHOLDER PRIVILEGES. Neither the Recipient nor any person claiming
under or through him or her shall be or have any of the rights or
privileges of a shareholder of the Company in respect to any of the Common
Stock issuable upon the exercise of any Stock Option, unless and until
certificates evidencing such shares of Common Stock shall have been duly
issued and delivered.
19. GUIDELINES. The Board of Directors of the Company shall have the power to
provide guidelines for administration of the Plan by the Committee and to
make any changes in such guidelines as from time to time the Board deems
necessary.
20. AMENDMENT AND DISCONTINUANCE. The Board of Directors of the Company shall
have the right at any time during the continuance of the Plan to amend,
modify, supplement, suspend or terminate the Plan, provided that (a) no
amendment, supplement, modification, suspension or termination of the Plan
shall in any manner affect any Stock Option of any kind theretofore
granted under the Plan without the consent of the Recipient of the Stock
Option, unless such amendment, supplement, modification, suspension or
termination is by reason of any change in capital structure referred to in
Section 14 hereof or unless the same is by reason of the matters referred
to in Section 15 hereof; and (b) Section 9 hereof shall not be amended or
modified more than once in any six-month period, other than to comport
with changes in the Internal Revenue Code of 1986, as amended, or the
rules thereunder.
6
<PAGE> 7
21. TERMINATION. Stock Options may be granted in accordance with the terms of
the Plan until the fifth anniversary date of date on which the initial
grant is made under the Plan, on which date this Plan will terminate
except as to Stock Options then outstanding hereunder, which Stock Options
shall remain in effect until they have expired according to their terms.
22. APPROVAL. This Plan shall take effect upon due approval by the Board of
Directors of the Company.
7
<PAGE> 1
Exhibit 10.2
FORM OF INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made this 10th day of August 1999, between INTERIM SERVICES
INC., a Delaware corporation (the "Company"), and ____________________(the
"Director").
WITNESSETH THAT:
WHEREAS, the Director is a member of the Board of Directors of the
Company and in such capacity is performing a valuable service for the
Company; and
WHEREAS, Section 145 of the Delaware General Corporation Law, as
amended to date (the "State Statute"), contemplates that contracts may
be entered into between the Company and the members of its Board of
Directors with respect to indemnification of such directors; and
WHEREAS, in order to induce the Director to serve and continue to serve
as a member of the Board of Directors of the Company, the Company has
determined and agreed to enter into this Agreement with the Director;
NOW THEREFORE, in consideration of the Director's service and continued
service as a director of the Company after the date hereof, the parties
hereto agree as follows:
1. INDEMNITY OF THE DIRECTOR. Subject only to the exclusions set forth in
Section 3 hereof, the Company hereby agrees as follows:
(a) To hold harmless and indemnify the Director against any and all
expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by the Director in
connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) to which
the Director is, was or at any time becomes a party, or is threatened
to be made a party, by reason of the fact that the Director is, was or
at any time becomes a director, officer, employee or agent of the
Company, or is or was serving or at any time serves at the request of
the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, if
the Director acted in good faith and in a manner the Director
reasonably believed to be in or not opposed to the best interests of
the corporation and, with respect to any criminal action or proceeding
had no reasonable cause to believe the Director's conduct was unlawful;
except that no indemnification shall be made in respect of any claim,
issue or matter as to which the Director shall have been adjudged to be
liable to the Company unless (and only to the extent that) the Court of
Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, the Director is
fairly and reasonably
<PAGE> 2
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
(b) Otherwise to hold harmless and indemnify the Director to the
fullest extent as may be provided to the Director by the Company under
the provisions of the State Statute.
(c) To pay the Director, or such person or entity as the Director may
designate, on a continuing and current basis (and in any event not
later than thirty (30) business days following receipt by the Company
of the Director's request for reimbursement) all expenses (including
attorneys' fees), costs, fines, etc. actually and reasonably incurred
by or levied upon the Director in connection with any action, suit or
proceeding that is indemnifiable under the provisions of this
Agreement.
2. MAINTENANCE OF INSURANCE AND SELF INSURANCE. The Company may, but shall not
be required to, purchase or maintain policies of directors' and officers'
insurance. The maintenance of such insurance shall not diminish, relieve or
replace the Company's liability for indemnification under the provisions of the
State Statute, the Company's Certificate of Incorporation, By-Laws or this
Agreement. The Director's claim for reimbursement in advance of final
disposition of an action, suit or proceeding, of expenses which may be
indemnifiable under the provisions of the State Statute, the Company's
Certificate of Incorporation, By-Laws or this Agreement and payable in advance
of final disposition of an action pursuant to Subsection (e) of the State
Statute, the Company's Certificate of Incorporation, By-Laws, or Section 1(c) of
this Agreement shall not be denied on the basis that such amount may or will be
covered by any policy of insurance, if such payments from the insurance company
will not be made to the Director within ten (10) business days of such
Director's claim for reimbursement.
3. LIMITATIONS ON ADDITIONAL INDEMNITY. The Company shall be entitled to
reimbursement from the Director for all monies paid to the Director as
indemnification pursuant to this Agreement under the following circumstances:
(a) To the extent of any costs or expenses the Director is actually
reimbursed pursuant to any Insurance Policies purchased and maintained
by the Company pursuant to Section 2 hereof;
(b) If it is determined by a final judgment or other final adjudication
by a court of competent jurisdiction considering the question of
indemnification of the Director that such payment of indemnification is
or would be in violation of applicable law or the Company's Certificate
of Incorporation;
(c) On account of any suit in which judgment is rendered against the
Director for any accounting profits made from the purchase and sale or
sale and purchase by the Director of securities of the Company pursuant
to the provisions of Section 16(b) of the Securities Exchange of 1934,
as amended;
2
<PAGE> 3
(d) If the Director's conduct is finally adjudged by a court of
competent jurisdiction to have been knowingly fraudulent, deliberately
dishonest or to constitute willful misconduct; and
(e) If it is finally determined by a court of competent jurisdiction
considering the question that the Director's decision to employ
independent legal counsel, pursuant to Section 5(b)(ii) hereof, was not
based on a "reasonable" conclusion that there was a conflict of
interest between the Company and the Director.
4. CONTINUATION OF INDEMNITY. All agreements and obligations of the Company
contained herein shall continue during the period the Director is a director,
officer, employee or agent of the Company (or is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise) and shall continue
thereafter so long as the Director is subject to any possible claim or
threatened, pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that the Director was a
director of the Company or serving in any other capacity referred to herein.
5. NOTIFICATION AND DEFENSE OF CLAIM. Promptly after receipt by the Director of
notice of the commencement of any action, suit or proceeding, the Director will,
if a claim in respect thereof is to be made against the Company under this
Agreement, notify the Company of the commencement thereof; the failure to
promptly notify the Company will not relieve the Company from any liability that
it may have to the Director hereunder, except to the extent the Company is
prejudiced in its defense of such claim as a result of such failure. Unless
otherwise requested by the Company's Board of Directors (the "Board"), written
notification shall not be necessary if the Director informs a majority of the
Board of the commencement of any such action, or, independent of such
notification by the Director, a majority of the Board has reason to believe such
action has been initiated or threatened. With respect to any such action, suit
or proceeding as to which the Director notifies (or is deemed to have notified)
the Company of the commencement thereof:
(a) The Company will be entitled to participate therein at its own
expense;
(b) Except as otherwise provided below, to the extent that it may wish,
the Company, jointly with any other indemnifying party similarly
notified, will be entitled to assume the defense thereof with counsel
reasonably satisfactory to the Director. Subject to the provision
below, after notice from the Company to the Director of its election to
assume the defense thereof, the Company will not be liable to the
Director under this Agreement for any legal or other expenses
subsequently incurred by the Director in connection with the defense
thereof other than reasonable costs of investigation or as otherwise
provided below. The Director shall have the right to employ his or her
own counsel in such action, suit or proceeding but the fees and
expenses of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at the expense of the
Director unless (i) the employment of counsel by the Director has been
authorized by the Company, (ii) the Director reasonably concludes that
there may be
3
<PAGE> 4
a conflict of interest between the Company and the Director in the
conduct of the defense of such action and that such conflict may lead
to liability for the Director not otherwise indemnifiable under the
provisions of this Agreement and notifies the Company of such
conclusion and decision to employ separate counsel, or (iii) the
Company fails to employ counsel to assume the defense of such action,
in each case the fees and expenses of counsel shall be at the expense
of the Company. The Company shall not be entitled to assume the defense
of any action, suit or proceeding brought by or on behalf of the
Company or as to which the Director reasonably makes the conclusion
provided for in (ii) above; and
(c) The Company shall not be liable to indemnify the Director under
this Agreement for any amounts paid in settlement of any action or
claim effected without its written consent. The Company shall not
settle any action or claim in any manner which would impose any penalty
or limitation on the Director without the Director's written consent.
Neither the Company nor the Director will unreasonably withhold their
consent to any proposed settlement.
6. REPAYMENT OF EXPENSES. The Director agrees that he or she will reimburse the
Company for all reasonable expenses paid by the Company in defending any civil
or criminal action, suit or proceeding against him or her in the event and only
to the extent that it is ultimately determined by a court of competent
jurisdiction considering the question that the Director is not entitled to be
indemnified by the Company for such expenses under the provisions of the State
Statute, the Company's Certification of Incorporation, By-Laws, this Agreement
or otherwise.
7. ENFORCEMENT.
(a) The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on the Company
hereby in order to induce the Director to serve or continue to serve as
a director of the Company, and acknowledges that the Director is
relying upon this Agreement in continuing in such capacity.
(b) In the event the Director is required to bring any action to
enforce rights or to collect moneys due under this Agreement and is
successful in such action, the Company shall reimburse the Director for
all of the Director's reasonable fees and expenses (including
attorneys' fees) in bringing and pursuing such action.
8. SEPARABILITY. Each of the provisions of this Agreement is a separate and
distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof.
4
<PAGE> 5
9. MISCELLANEOUS.
(a) This Agreement shall be interpreted and enforced in accordance with
the laws of the State of Delaware.
(b) This Agreement shall be binding upon the Director and upon the
Company, its successors and assigns, and shall inure to the benefit of
the Director, the Director's heirs, personal representatives and
assigns and to the benefit of the Company, its successor and assigns.
(c) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties
hereto.
(d) This Agreement shall supersede all prior agreements regarding the
same subject matter effective beginning on the date hereof.
IN WITNESS WHEREOF, the parties hereto executed this Agreement on and as of the
day and year first above written.
COMPANY:
DIRECTOR: INTERIM SERVICES INC.
By:
- ----------------------------- -----------------------------
President and CEO
5
<PAGE> 1
Exhibit 10.4
AMENDED AND RESTATED
CREDIT AGREEMENT
by and among
INTERIM SERVICES INC.,
THE BORROWING SUBSIDIARIES,
as Borrowers
and
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Documentation Agent,
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Book Manager,
and
THE BANKS PARTIES THERETO
July 2, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I. DEFINITIONS
<S> <C> <C>
1.1 Amendment and Restatement. .............................................................................3
1.2 Certain Defined Terms. .................................................................................3
1.3 Other Interpretive Provisions...........................................................................31
1.4 Accounting Principles...................................................................................32
1.5 Currency Equivalents Generally..........................................................................33
ARTICLE II. THE CREDITS
2.1 Amounts and Terms of Commitments; Joint and Several Liability...........................................34
2.2 Loan Accounts...........................................................................................37
2.3 Procedure for Syndicated Borrowing......................................................................37
2.4 Conversion and Continuation Elections - Syndicated Loans................................................39
2.5 Utilization of Revolving Commitments in Offshore Currencies. ...........................................40
2.6 Bid Borrowings..........................................................................................41
2.7 Procedure for Bid Borrowings............................................................................42
2.8 Voluntary Termination or Reduction of Commitments. ....................................................45
2.9 Optional Prepayments....................................................................................45
2.10 Use of Proceeds.........................................................................................46
2.11 Currency Exchange Fluctuations..........................................................................46
2.12 Repayment...............................................................................................47
2.13 Interest................................................................................................47
2.14 Fees....................................................................................................48
2.15 Computation of Fees and Interest........................................................................49
2.16 Payments by the Companies...............................................................................49
2.17 Payments by the Banks to the Agent......................................................................50
2.18 Sharing of Payments Etc.................................................................................51
2.19 Swing Line..............................................................................................51
2.20 Designation of Borrowing Subsidiaries. ...............................................................53
2.21 364 Day Extension and Term Loan Option. .............................................................53
2.22 The Euro................................................................................................55
</TABLE>
ii
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE III. THE LETTERS OF CREDIT
3.1 The Letter of Credit Facilities.........................................................................56
3.2 Issuance, Amendment and Renewal of Letters of Credit....................................................57
3.3 Risk Participations, Drawings and Reimbursements........................................................58
3.4 Repayment of Participations.............................................................................60
3.5 Role of the Issuing Bank................................................................................60
3.6 Obligations Absolute....................................................................................61
3.7 Cash Collateral Pledge..................................................................................62
3.8 Letter of Credit Fees...................................................................................62
3.9 Uniform Customs and Practice............................................................................63
ARTICLE IV. INTERIM NOTE GUARANTEE
4.1 Interim Notes Guarantee.................................................................................64
4.2 Risk Participation, Advances and Reimbursements.........................................................64
4.3 Repayment of Participations.............................................................................65
4.4 Role of NationsBank.....................................................................................66
4.5 Obligations Absolute....................................................................................66
4.6 Cash Collateral Pledge..................................................................................67
4.7 Interim Note Guarantee Fees.............................................................................68
ARTICLE V. CHANGE IN CIRCUMSTANCES
5.1 Increased Cost and Reduced Return.......................................................................69
5.2 Limitation on Types of Loans............................................................................70
5.3 Illegality..............................................................................................71
5.4 Treatment of Affected Loans.............................................................................71
5.5 Compensation............................................................................................72
5.6 Taxes...................................................................................................72
5.7 Replacement Banks.......................................................................................74
5.8 Mitigation..............................................................................................74
5.9 Survival................................................................................................75
</TABLE>
iii
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE VI. CONDITIONS PRECEDENT
6.1 Conditions to Execution of Agreement....................................................................76
6.2 Condition of Extension of Credit to Borrowing Subsidiary................................................77
6.3 Conditions to All Credit Extensions.....................................................................78
6.4 Supplements to Schedules................................................................................79
ARTICLE VII. REPRESENTATIONS AND WARRANTIES
7.1 Existence and Power.....................................................................................80
7.2 Authorization; No Contravention.........................................................................80
7.3 Governmental Authorization..............................................................................80
7.4 Binding Effect..........................................................................................80
7.5 Litigation: Labor Controversies.........................................................................81
7.6 No Default..............................................................................................81
7.7 Use of Proceeds; Margin Regulations.....................................................................81
7.8 Title to Properties.....................................................................................81
7.9 Taxes...................................................................................................82
7.10 Financial Condition.....................................................................................82
7.11 Support Documents.......................................................................................83
7.12 Copyrights, Patents, Trademarks and Licenses, etc.......................................................83
7.13 Subsidiaries............................................................................................83
7.14 Insurance...............................................................................................84
7.15 ERISA Compliance........................................................................................84
7.16 Environmental Matters...................................................................................85
7.17 Regulated Entities......................................................................................85
7.18 No Burdensome Restrictions..............................................................................85
7.19 Full Disclosure.........................................................................................85
7.20 Immunity................................................................................................85
7.21 Year 2000 Compliance....................................................................................85
ARTICLE VIII. AFFIRMATIVE COVENANTS
8.1 Financial Information, Reports, Notices, etc............................................................86
8.2 Compliance with Laws, etc...............................................................................88
8.3 Maintenance of Properties...............................................................................88
</TABLE>
iv
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C> <C>
8.4 Insurance...............................................................................................89
8.5 Books and Records.......................................................................................89
8.6 Maintenance of Existence, etc...........................................................................89
8.7 Additional Support Documents............................................................................89
8.8 Compliance with ERISA...................................................................................90
8.9 Release of Pledge or Guaranty...........................................................................90
8.10 Swap Contracts..........................................................................................90
8.11 Year 2000 Compliant.....................................................................................91
ARTICLE IX. NEGATIVE COVENANTS
9.1 Business Activities.....................................................................................92
9.2 Liens...................................................................................................92
9.3 Financial Condition.....................................................................................93
9.4 Investments.............................................................................................93
9.5 Restricted Payments, etc................................................................................94
9.6 Consolidation Merger, etc...............................................................................95
9.7 Asset Dispositions, etc.................................................................................96
9.8 Transactions with Affiliates............................................................................96
9.9 Negative Pledges, Restrictive Agreements, etc...........................................................96
9.10 Subsidiaries'Voting Share...............................................................................97
9.11 ERISA...................................................................................................97
9.12 Limitation on Indebtedness..............................................................................97
9.13 Change Fiscal Year......................................................................................98
9.14 Subordinated Indebtedness...............................................................................98
ARTICLE X. EVENTS OF DEFAULT
10.1 Events of Default.......................................................................................99
10.2 Remedies...............................................................................................101
10.3 Rights Not Exclusive...................................................................................102
ARTICLE XI. THE AGENT
11.1 Appointment, Powers and Immunities.....................................................................103
</TABLE>
v
<PAGE> 6
<TABLE>
<CAPTION>
<S> <C> <C>
11.2 Reliance by Agent......................................................................................104
11.3 Defaults...............................................................................................104
11.4 Rights as Bank.........................................................................................104
11.5 Indemnification........................................................................................105
11.6 Non-Reliance on Agent and Other Banks..................................................................105
11.7 Successor Agent and Successor Issuing Bank.............................................................105
11.8 Security Trustee.......................................................................................106
11.9 Dutch Pledge Agreements................................................................................106
11.10 Documentation Agent....................................................................................106
ARTICLE XII. MISCELLANEOUS
12.1 Amendments and Waivers.................................................................................108
12.2 Notices................................................................................................109
12.3 No Waiver; Cumulative Remedies.........................................................................109
12.4 Costs and Expenses.....................................................................................109
12.5 Company Indemnification................................................................................110
12.6 Marshalling; Payments Set Aside........................................................................111
12.7 Successors and Assigns.................................................................................111
12.8 Assignments, Participations, etc.......................................................................111
12.9 Designated Bidders.....................................................................................113
12.10 Confidentiality........................................................................................114
12.11 Set-off................................................................................................114
12.12 Notification of Addresses of Lending Offices, Etc......................................................115
12.13 Counterparts...........................................................................................115
12.14 Severability...........................................................................................115
12.15 No Third Parties Benefited.............................................................................115
12.16 Governing Law and Jurisdiction.........................................................................115
12.17 Waiver of Jury Trial...................................................................................116
12.18 Entire Agreement.......................................................................................116
12.19 Judgment Currency......................................................................................116
12.20 Confirmation of Foreign Pledge Agreements. ...........................................................117
EXHIBIT A FORM OF BID LOAN NOTE.........................................................................A-1
EXHIBIT B COMPLIANCE CERTIFICATE........................................................................B-1
EXHIBIT C DESIGNATION AGREEMENT.........................................................................C-1
EXHIBIT D FORM OF LOAN NOTE INSTRUMENT..................................................................D-1
</TABLE>
vi
<PAGE> 7
<TABLE>
<CAPTION>
<S> <C> <C>
EXHIBIT E INVITATION FOR COMPETITIVE BID................................................................E-1
EXHIBIT F IRREVOCABLE NOTICE OF SYNDICATED ACTIVITY.....................................................F-1
EXHIBIT G FORM OF REVOLVING LOAN NOTE...................................................................G-1
EXHIBIT H FORM OF SWING LINE NOTE.......................................................................H-1
EXHIBIT I FORM OF 364 DAY NOTE..........................................................................I-1
EXHIBIT J COMPETITIVE BID REQUEST.......................................................................J-1
EXHIBIT K COMPETITIVE BID...............................................................................K-1
EXHIBIT L FORM OF SWING LINE BORROWING NOTICE...........................................................L-1
EXHIBIT M FORM OF ASSUMPTION LETTER.....................................................................M-1
EXHIBIT N FORM OF ASSIGNMENT AND ACCEPTANCE.............................................................N-1
SCHEDULE I PRICING GRID
SCHEDULE II PLEDGORS AND PLEDGED INTERESTS
SCHEDULE 1.2(a) EXISTING LETTERS OF CREDIT
SCHEDULE 1.2(b) GUARANTORS
SCHEDULE 1.2(c) NORRELL INDEBTEDNESS
SCHEDULE 1.2(d) DESCRIPTION OF PERMITTED SECURITIZATION
SCHEDULE 2.1 COMMITMENTS
SCHEDULE 7.5 LITIGATION
SCHEDULE 7.10 ADDITIONAL LIABILITIES
SCHEDULE 7.12 LITIGATION REGARDING PATENTS, TRADEMARKS, ETC.
SCHEDULE 7.13 SUBSIDIARIES
SCHEDULE 7.15 ERISA MATTERS
SCHEDULE 9.4(a) EXISTING INVESTMENTS
SCHEDULE 9.9 RESTRICTIVE AGREEMENTS
SCHEDULE 9.12 EXISTING INDEBTEDNESS
SCHEDULE 12.2 OFFSHORE AND DOMESTIC LENDING OFFICES ADDRESSES FOR NOTICE
</TABLE>
vii
<PAGE> 8
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of July
2, 1999, among INTERIM SERVICES INC., a Delaware corporation ("Interim"), the
BORROWING SUBSIDIARIES parties hereto both as of the date hereof or pursuant to
Section 2.20 (herein Interim and each Borrowing Subsidiary are individually
referred to as a "Company" and collectively, the "Companies"), the several
financial institutions from time to time party to this Agreement (collectively,
the "Banks"; individually, a "Bank"), The First National Bank of Chicago, as
documentation agent for the Banks (in such capacity, the "Documentation
Agent"), and NationsBank, N.A., as agent for the Banks (in such capacity, the
"Agent").
WHEREAS, the Companies, the Agent and certain banks (the "Original
Banks") have entered into a Credit Agreement dated May 1, 1997 (the "Original
Agreement") pursuant to which the Original Banks have made available to
Companies certain credit facilities of up to $675,000,000, which facilities
consist of a term loan facility of $275,000,000 which term loan is evidenced by
term notes dated May 1, 1997 (the "Original Term Notes") and a multicurrency
revolving credit facility of $400,000,000 which revolving credit facility is
evidenced by revolving notes dated May 1, 1997 (the "Existing Notes"); and
WHEREAS, as a condition to making the credit facilities available
under the Original Agreement the Banks required that all Domestic Subsidiaries
of Interim, other than Borrowing Subsidiaries, guarantee payment of all
obligations and that there be pledged to secure the obligations all of the
issued and outstanding capital stock of Domestic Subsidiaries and 65% of the
outstanding Voting Stock of Direct Foreign Subsidiaries; and
WHEREAS, Interim (Europe) has issued Floating Rate Guaranteed Unlisted
Unsecured Loan Notes 2002 in the principal amount of (pound)12,500,000 (the
"Interim Notes") a portion of the principal amount of which Interim Notes were
to be used to pay the purchase price of shares of capital stock of Michael Page
together with interest, the payment of which Interim Notes is guaranteed under
the Original Agreement; and
WHEREAS, Interim has paid the Original Term Notes; and
WHEREAS, Interim has entered into an Agreement and Plan of Merger
whereby Interim will acquire Norrell (as hereinafter defined); and
<PAGE> 9
WHEREAS, the Companies have requested that the Original Agreement be
amended and restated in its entirety in order to, among other things, increase
the amount of the credit facilities from $400 million to $675 million, extend
the maturity date of the indebtedness arising thereunder, change various
covenants, as a part of the increase in the credit facilities the addition of a
$150 million 364 Day Facility and change the interest and fees payable
thereunder; and
WHEREAS, certain of the Original Banks have assigned all or a portion
of their interest in the Original Agreement to other Original Banks and
simultaneously with the execution of this Agreement new banks by their
execution of this Agreement and payment to the Agent pursuant to the terms
hereof of their portion of outstanding Loans will acquire interests in all or a
portion of the Loans made pursuant to this Agreement;
NOW, THEREFORE, the Companies, the Banks and the Agent hereby agree as
follows:
<PAGE> 10
ARTICLE 1
DEFINITIONS
1.1 Amendment and Restatement. The Companies, the Agent and the Banks
hereby agree that upon the effectiveness of this Agreement, the terms and
provisions of the Original Agreement shall be and hereby are amended and
restated in their entirety by the terms and conditions of this Agreement and
the terms and provisions of the Original Agreement, except as otherwise
provided in the next paragraph, shall be superseded by this Agreement.
Notwithstanding the amendment and restatement of the Original
Agreement by this Agreement, the Companies shall continue to be liable to the
Agent and the Original Banks which have not elected to continue as a party to
this Agreement with respect to agreements on the part of the Companies under
the Original Agreement to indemnify and hold harmless the Agent and the
Original Banks which have not elected to continue as a party to this Agreement
from and against all claims, demands, liabilities, damages, losses, costs,
charges and expenses to which the Agent and the Original Banks which have not
elected to continue as a party to this Agreement may be subject arising in
connection with the Original Agreement. This Agreement is given as a
substitution of, and not as a payment of, the obligations of the Companies
under the Original Agreement and is not intended to constitute a novation of
the Original Agreement. Except as otherwise selected by the Companies by
delivery of a Borrowing Notice or Interest Rate Selection Notice prior to the
Effective Date in accordance with the terms hereof, upon the Effective Date of
this Agreement all amounts outstanding and owing by the Companies under the
Original Agreement as of the Effective Date, shall constitute Advances
hereunder accruing interest at the Base Rate hereunder. The parties hereto
agree that the Interest Periods for all Offshore Rate Loans outstanding under
the Original Agreement on the Effective Date shall be terminated, the Banks
shall grant a one-time waiver of any payments required under Section 5.5 to the
Banks and the Companies shall furnish to the Agent Interest Rate Selection
Notices for existing Loans and Borrowing Notices for additional Loans as may be
required in connection with the allocation of Loans among Banks in accordance
with their Commitments.
1.2 Certain Defined Terms. The following terms have the following
meanings:
"Absolute Rate" has the meaning specified in Section 2.7(c).
3
<PAGE> 11
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the
acquisition of in excess of 50% of the capital stock, partnership
interests, membership interests or equity of any Person, or otherwise
causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than
a Person that is a Subsidiary immediately prior to giving effect to
such combination) provided that the applicable Company or a Subsidiary
is the surviving entity.
"Active Subsidiary" means a Subsidiary of Interim that is
then doing business of any kind;
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. A Person shall be deemed to
control another Person if the controlling Person possesses, directly
or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, membership interests, by contract, or
otherwise.
"Agent" means NationsBank in its capacity as agent for the
Banks hereunder, and any successor agent arising under Section 11.9.
"Agent-Related Persons" means the Agent and any successor
agent arising under Section 11.9, together with their respective
Affiliates (including in the case of NationsBank, the Arranger), and
the officers, directors, employees, agents and attorneys-in-fact of
such Persons and Affiliates.
"Agent's Payment Office" means (i) in respect of payments in
Dollars, the address for payments set forth on Schedule 12.2 or such
other address as the Agent may from time to time specify in accordance
with Section 12.2, and (ii) in the case of payments in any Offshore
Currency, such address as the Agent may from time to time specify in
accordance with Section 12.2.
"Aggregate Assumed Interest" means the aggregate amount of
interest which would be payable on the Interim Notes from the date of
determination to the stated maturity of the Interim Notes assuming a
rate of interest for the remaining term of the Interim Notes to be
that rate of interest in effect on the Interim Notes on such date of
determination;
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<PAGE> 12
"Agreement" means this Credit Agreement, as amended, modified
or supplemented from time to time.
"Alternate Currency" has the meaning specified in Section
2.5(b).
"Applicable Currency" means, as to any particular payment or
Loan, Dollars or the Offshore Currency in which it is denominated or
is payable.
"Applicable Fee Percentage" means, at any time, the rate set
forth on Schedule I under the column "Applicable Fee Percentage" for
the level applicable at such time in accordance with the provisions of
Section 2.15(c).
"Applicable Margin" means
(i) with respect to Base Rate Loans, 0%;
(ii) with respect to Offshore Rate Loans, at any
time, the rate set forth on Schedule I under the column
"Applicable Margin" for the level applicable at such time in
accordance with the provisions of Section 2.15(c).
"Arranger" means Banc of America Securities, LLC, and its
successors.
"Assignment and Acceptance" has the meaning specified in
Section 12.8.
"Assignee" has the meaning specified in subsection 12.8(a).
"Associated Costs" means a rate per annum equal to the
arithmetic mean of the percentage rates applicable to the Offshore
Currency Lending Office of the relevant Bank according to the
following formula:
Associated Costs BY + L(Y-X) + S(Y-Z)
--------------------
per annum = 100 - (B+S)
where:
B = The percentage of such Bank's eligible liabilities
required, on the first day of the Relevant Period,
to be held in a non-interest-bearing deposit account
with the Bank of England pursuant to the cash ratio
requirements of the Bank of England.
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<PAGE> 13
Y = The interest rate at which Sterling deposits in an
amount comparable to the aggregate principal amount
of the relevant Loan are offered by such Bank to
leading banks in the London interbank market at or
about 11:00 a.m. (London time) on the first day of
the Relevant Period for a period comparable to the
Relevant Period.
L = The average percentage of eligible liabilities
which the Bank of England, as at the first day of
the Relevant Period, requires such Bank to maintain
as secured money with members of the London Discount
Market Association and/or as secured call money with
those money brokers and gilt-edged primary market
makers recognized by the Bank of England.
X = The rate at which secured Sterling deposits in an
amount comparable to the aggregate principal amount
of the relevant Loan may be placed by such Bank with
members of the London Discount Market Association
and/or as secured call money with money brokers and
gilt-edged primary market makers at or about 11:00
a.m. (London time) on the first day of the Relevant
Period for a period comparable to the Relevant
Period.
S = The percentage of such Bank's eligible liabilities
required on the first day of the relevant Interest
Period to be placed as a special deposit with the
Bank of England.
Z = The percentage interest rate per annum payable by
the Bank of England on special deposits or, if
lower, Y.
(a) For the purposes of this definition:
(i) "eligible liabilities" and "special deposits"
shall have the meanings ascribed to them from time to time by
the Bank of England; and
(ii) "Relevant Period" means, if the Interest Period
with respect to the relevant Loan is three months or less,
the duration of such Interest Period or, if such Interest
Period is longer than three months, each period of three
months and any necessary shorter period in such Interest
Period.
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<PAGE> 14
(b) In the application of the above formula, B, Y, L, X, S
and Z will be included in the formula as decimal fractions and not as
percentages, e.g. if B = 0.5% and Y = 15%, BY will be calculated as
0.5 x 15 and not as 0.5% x 15%.
(c) Associated Costs shall be computed by the applicable Bank
on the first day of each Relevant Period, and shall, if necessary, be
rounded upward to the nearest 1/10,000 of 1%. If there is more than
one Relevant Period comprised in the relevant Interest Period, then
the Associated Costs for that Interest Period shall be the weighted
average of the amounts so computed for the Relevant Periods comprised
in that Interest Period.
(d) Calculations will be made on the basis of a year of 365
days.
The "Associated Costs" shall be increased by an amount which
the applicable Bank shall determine from time to time to be necessary
to compensate such Bank for the cost or loss to it of complying with
any liquidity, monetary control or prudential requirements of The Bank
of England existing from time to time pursuant to Section 5.1(c).
"Assuming Bank" has the meaning specified in Section 2.21(c).
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel or, from and
after the Closing Date, internal counsel.
"Australian Interim Indebtedness" means the net indebtedness
of Interim arising under the Financing Transaction, as the same may
hereafter be extended, renewed or modified from time to time. The
parties hereto acknowledge and stipulate that the amount of the
Australian Interim Indebtedness to be provided by the provisions of
the Financing Transaction, will be the net obligation of Interim under
the Financing Transaction agreements as determined by Bank of America
National Trust & Savings Association on a semi-annual basis. The
amount of such Australian Interim Indebtedness as of the Effective
Date is set forth on Schedule 9.12.
"Bank" has the meaning specified in the introductory clause
hereto.
"Base Rate" means, for any day, the higher of (a) 0.50% per
annum above the latest Federal Funds Rate, and (b) the rate of
interest in effect for such day as publicly announced from time to
7
<PAGE> 15
time by NationsBank in Charlotte, North Carolina, as its "prime rate."
(The "prime rate" is a rate set by NationsBank based upon various
factors including NationsBank's costs and desired return, general
economic conditions and other factors, and is used as a reference
point for pricing some loans, which may be priced at, above, or below
such announced rate.) Any change in the prime rate announced by
NationsBank shall take effect at the opening of business on the day
specified in the public announcement of such change.
"Base Rate Loan" means a Revolving Loan, Swing Line Loan, 364
Day Loan, Interim Note Borrowing or L/C Advance that bears interest at
the Base Rate.
"Bid Borrowing" means a Borrowing hereunder consisting of one
or more Bid Loans made to the Companies on the same day by one or more
Banks or Designated Bidders.
"Bid Loan" means a Revolving Loan by a Bank or a Designated
Bidder to one or more of the Companies under Section 2.6.
"Bid Loan Bank" means, in respect of any Bid Loan, the Bank
or a Designated Bidder making such Bid Loan to the Companies.
"Bid Loan Note" means a note substantially in the form of
Exhibit A and delivered to a Bank pursuant to Section 2.2.
"Borrowing" means a borrowing hereunder consisting of (i) Bid
Loans, Revolving Loans or 364 Day Loans of the same Type and in the
same Applicable Currency made to a Company on the same day by the
Banks under Section 2.1(a) or (b) or (in the case of Bid Borrowings)
Bid Loan Banks under Sections 2.6 and 2.7, and, in the case of
Offshore Rate Loans, having the same Interest Period and (ii) Swing
Line Loans under Section 2.19. A Borrowing may be a Revolving
Borrowing or 364 Day Borrowing or a Swing Line Borrowing or a Bid
Borrowing.
"Borrowing Date" means any date on which a Borrowing occurs
under Section 2.3, Section 2.7, Section 2.19 or Section 2.21.
"Borrowing Subsidiary" means any Subsidiary of Interim which
has been designated pursuant to Section 2.20.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City or Charlotte,
North Carolina are authorized or required by law to close and (i) with
8
<PAGE> 16
respect to disbursements and payments in Dollars, a day on which
dealings are carried on in the applicable offshore Dollar interbank
market, and (ii) with respect to any disbursements and payments in and
calculations pertaining to any Offshore Currency Loan, a day on which
commercial banks are open for foreign exchange business in London,
England, and on which dealings in the relevant Offshore Currency are
carried on in the applicable offshore foreign exchange interbank
market in which disbursement of or payment in such Offshore Currency
will be made or received hereunder.
"Cash Account Agreement" means the Cash Account Agreement
delivered by each Company in favor of the Agent relating to the cash
collateralization of the L/C Obligations and Interim Note Obligations,
as the same may be amended or otherwise modified from time to time.
"Cash Collateralize" means to pledge and deposit with or
deliver to the Agent, for the benefit of the Agent, the Issuing Bank,
NationsBank and the Banks, as collateral for the L/C Obligations or
Interim Note Obligations, or both, cash or deposit account balances
pursuant to documentation in form and substance reasonably
satisfactory to the Agent, the Issuing Bank and NationsBank.
Derivatives of such term shall have corresponding meanings. The
Companies hereby grant the Agent, for the benefit of the Agent, the
Issuing Bank, NationsBank and the Banks, a security interest in all
such cash and deposit account balances. Cash collateral shall be
maintained in blocked, interest bearing deposit accounts at
NationsBank.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness, maturing not more than one
year after such time, issued or guaranteed by the government of a
country ("OECD Country") which is a member of the Organization for
Economic Cooperation and Development or any agency thereof;
(b) commercial paper, maturing not more than nine months from
the date of issue, which is issued by
(i) a corporation (other than an Affiliate of the
Companies) organized under the laws of any state of the
United States or of the District of Columbia and rated A-2,
or better, by Standard & Poor's Ratings Services or P-2, or
better, by Moody's Investors Service, Inc., or
(ii) any Bank (or its holding company);
9
<PAGE> 17
(c) any certificate of deposit or bankers acceptance,
maturing not more than one year after such time, which is issued by
either
(i) a commercial banking institution that is a
member of the Federal Reserve System or an applicable central
bank of an OECD Country and has a combined capital and
surplus and undivided profits of not less than $500,000,000,
or
(ii) any Bank;
(d) any repurchase agreement entered into with any Bank (or
other commercial banking institution of the stature referred to in
clause (c)(i)) which
(i) is secured by a fully perfected security
interest in any obligation of the type described in any of
clauses (a) through (c); and
(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the
repurchase obligation of such Bank (or other commercial
banking institution) thereunder; or
(e) money market preferred stock of companies listed on the
S&P 500 and having a long-term debt rating of A- or better by S&P or
A3 or better by Moody's, and short-term (one-year or less) debt
instruments, so long as the underlying obligor has a short-term debt
rating of A-2 (or MIG-2) or better by S&P or P-2 (or MIG-2) or better
by Moody's;
(f) Investments in money market funds that invest primarily
in items described in clauses (a), (b), (c), (d) and (e) above;
(g) participations in short-term loans to any corporation
(other than the Company or any Subsidiary) organized under the United
States of America and rated at least A-2 by S&P or P-2 by Moody's;
"Change in Control" means (i) the acquisition by any Person,
or two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Exchange Act) of 20% or more of the outstanding
shares of voting stock of Interim or (ii) during any period of up to
12 consecutive months, commencing on the Closing Date, individuals who
10
<PAGE> 18
at the beginning of such 12-month period were directors of Interim
shall cease for any reason (other than the death, disability or
retirement of an officer of Interim that is serving as a director at
such time so long as another officer of Interim replaces such Person
as a director) to constitute a majority of the Board of Directors of
Interim.
"Closing Date" means July 2, 1999, provided that this
Agreement and the Notes shall have been executed and delivered to the
Agent, or such later date on which such events shall have occurred.
"Code" means the Internal Revenue Code of 1986, as amended,
and regulations promulgated thereunder.
"Commitment", as to each Bank, means the sum of such Bank's
Revolving Commitment and 364 Day Loan Commitment.
"Company" and "Companies" has the meaning specified in the
introductory clause hereto.
"Competitive Bid" means an offer by a Bank or a Designated
Bidder to make a Bid Loan in accordance with Section 2.7(c).
"Competitive Bid Request" has the meaning specified in
Section 2.7(a).
"Compliance Certificate" means a certificate substantially in
the form of Exhibit B.
"Consenting Bank" has the meaning specified in Section
2.21(a).
"Consolidated EBITDA" means, for any four quarter period,
Consolidated Net Income plus Consolidated Interest Expense, income
taxes, depreciation expense, amortization expense and up to
$10,000,000 of one time costs associated with the separation of
certain personnel and the related systems integration and merger costs
arising out of the Acquisition of Norrell, all determined on a
consolidated basis for Interim and its Subsidiaries; provided that,
with respect to any Acquisition which is treated as a "purchase,"
Consolidated EBITDA, beginning with the fiscal quarter during which
such Acquisition occurs, shall include the results of the operations
of the Person or assets so acquired (which results shall be determined
on an historical pro forma basis in form and substance satisfactory to
the Required Banks so long as Interim has furnished to the Banks
financial information acceptable to the Required Banks with respect to
the Person or assets so acquired).
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<PAGE> 19
"Consolidated Interest Coverage Ratio" means, with respect to
Interim and its Subsidiaries, on a consolidated basis, for any
consecutive four quarter period, the ratio of Consolidated EBITDA to
Consolidated Interest Expense.
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of Interim
and its Subsidiaries (net of interest income of not to exceed
$500,000), including, without limitation (i) the amortization of debt
discounts, (ii) the amortization of all fees (including, without
limitation, fees payable in respect of Rate Hedging Obligations)
payable in connection with the incurrence of Indebtedness to the
extent included in interest expense and (iii) the portion of any
liabilities incurred in connection with Capital Leases allocable to
interest expense, all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis; provided, however, in the
case of the occurrence of an Acquisition, there shall be included in
Consolidated Interest Expense for the first four consecutive fiscal
quarters ending after the date of such Acquisition an amount which
shall be determined by multiplying that portion of the cost of
Acquisition which represents Indebtedness, whether incurred, assumed
or acquired, times the interest rate applicable to such Indebtedness
which is in effect on the date of determination and then multiplying
the result by a fraction the numerator of which is 365 minus the
actual number of days that have elapsed from and after the date of
such Acquisition and the denominator of which is 365.
"Consolidated Net Income" means, for any period ending on the
date for which computation thereof is being made, the gross revenues
from operations of Interim and its Subsidiaries (including payments
received by Interim and the Subsidiaries of (i) interest income, and
(ii) dividends and distributions made in the ordinary course of their
business by Persons in which investment is permitted pursuant to this
Agreement and not related to an extraordinary event), less all
operating and non-operating expenses of Interim and its Subsidiaries
including taxes on income, all determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis; but excluding (for
all purposes other than compliance with Section 9.3(ii)) hereof as
income: (i) net gains on the sale, conversion or other disposition of
capital assets, (ii) net gains on the acquisition, retirement, sale or
other disposition of capital stock and other securities of Interim or
12
<PAGE> 20
its Subsidiaries, (iii) net gains on the collection of proceeds of
life insurance policies, (iv) any write-up of any asset, and (v) any
other net gain or credit of an extraordinary nature as determined in
accordance with GAAP applied on a Consistent Basis.
"Consolidated Net Worth" means the aggregate amount of
shareholders equity as determined from a consolidated balance sheet of
Interim and its Subsidiaries, prepared in accordance with GAAP;
provided that the amount of any cumulative translation adjustment
shall be excluded for purposes of determining Consolidated Net Worth.
"Consolidated Total Leverage Ratio" means, with respect to
Interim and its Subsidiaries, on a consolidated basis, for any
consecutive four quarter period, the ratio of Total Indebtedness as at
the end of such period to Consolidated EBITDA for such period.
"Contingent Obligation" means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise
becomes or is contingently liable upon (by direct or indirect
agreement to provide funds for payment, to supply funds to, or
otherwise to invest in, a debtor, or otherwise to assure a creditor
against loss) the Indebtedness of any other Person (other than by
endorsements of instruments in the course of collection), or
guarantees the payment of dividends or other distributions upon the
shares of any other Person. The amount of any Person's obligation
under any Contingent Obligation shall (subject to any limitation set
forth therein) be deemed to be the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness guaranteed
thereby.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or
by which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under
Section 2.4, a Company (a) converts Syndicated Loans of one Type to
another Type, or (b) continues as Syndicated Loans of the same Type,
but with a new Interest Period, Syndicated Loans having Interest
Periods expiring on such date.
"Credit Extension" means and includes (a) the making of any
Syndicated Loans and Bid Loans and Swing Line Loans hereunder, (b) the
issuance of the Interim Note Guarantee and the making of any payment
pursuant thereto, and (c) the Issuance of any Letters of Credit
hereunder.
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<PAGE> 21
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
"Designated Bidder" means an Affiliate of a Bank that is an
entity described in clause (a) or (b) of the definition of "Eligible
Assignee" and that has become a party hereto pursuant to Section 12.9.
"Designation Agreement" means an agreement in substantially
the form of Exhibit C.
"Direct Foreign Subsidiary" means a Foreign Subsidiary in
respect of which all of the Voting Stock, except qualifying shares of
directors or managers, is owned by Interim or a Domestic Subsidiary.
"Documentation Agent" means The First National Bank of
Chicago in its capacity as documentation agent for the Banks
hereunder, and any successor documentation agent thereto.
"Dollars", "dollars" and "$" each mean lawful money of the
United States.
"Dollar Equivalent Amount" means (a) the amount denominated
in Dollars, and (b) as to any amount denominated in an Offshore
Currency, the equivalent amount in Dollars as determined by the Agent
on the basis of the Spot Rate for the purchase of Dollars with such
Offshore Currency.
"EMU" means the European economic and monetary union.
"Effective Date" means the date on which all conditions
precedent set forth in Section 6.1 are satisfied.
"Eligible Assignee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having
a combined capital and surplus of at least $500,000,000; (b) a
commercial bank organized under the laws of any other country which is
a member of the Organization for Economic Cooperation and Development
(the "OECD"), or a political subdivision of any such country, and
having a combined capital and surplus of at least $500,000,000,
provided that such bank is acting through a branch or agency located
14
<PAGE> 22
in the country in which it is organized or another country which is
also a member of the OECD; and (c) a Person that is primarily engaged
in the business of commercial lending and that is (i) a Subsidiary of
a Bank, (ii) a Subsidiary of a Person of which a Bank is a Subsidiary,
or (iii) a Person of which a Bank is a Subsidiary.
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential
liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment
"Environmental Laws" means all federal, state, local or
foreign laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all administrative orders,
directed duties, requests, licenses, authorizations and permits of,
and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters.
"Equipment" means all equipment of whatever kind or nature
now owned or hereafter acquired by a Person, including, without
limitation, all machinery, vehicles, tools, furniture, furnishings,
office machines and equipment, material handling equipment, forklifts,
conveyors, machine systems, computers and all other goods used with
all accessories, parts and additions noted or hereafter affixed
thereto or used in connection therewith.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with any Company within the meaning
of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of
the Code for purposes of provisions relating to Section 412 of the
Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by any Company or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in Section
4001 (a) (2) of ERISA) or a cessation of operations which is treated
as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by any Company or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate a
Plan (other than in a standard termination within the meaning of
Section 4041(b) of ERISA), the treatment of a Plan amendment as a
15
<PAGE> 23
termination under Section 4041 or 4041A of ERISA (other than in a
standard termination within the meaning of Section 4041(b) of ERISA),
or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any
Company or any ERISA Affiliate.
"Euro" means the lawful currency of the EMU.
"Eurocurrency Reserve Percentage" has the meaning specified
in the definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances
specified in Section 10.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and regulations promulgated thereunder.
"Excluded Subsidiary" means each of Spectrum, Michael Page
International PTE Ltd., Atrium (AU-B) Pty. Limited, FSS Ltd. Interim
Services (Canada) Ltd., Norrell Services, Ltd., and any other Foreign
Subsidiary of Norrell existing as of the Closing Date.
"Existing Credit Agreement" means the Credit Agreement dated
as of May 1, 1997 among Interim Services Inc., The Borrowing
Subsidiaries, The Lenders Party Thereto, NationsBank, N.A., as Agent
and The First National Bank of Chicago, as Documentation Agent.
"Existing Letters of Credit" means the letters of credit
described on Schedule 1.2(a).
"Facility L/C" means any standby letter of credit issued by
an Issuing Bank pursuant to Section 3.1(a) and the Existing Letters of
Credit.
"Facility L/C Obligations" means at any time the sum of (a)
the aggregate undrawn amount of all Facility L/Cs then outstanding,
plus (b) the amount of all unreimbursed drawings under Facility L/Cs,
including an L/C Borrowing in respect of a Facility L/C.
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<PAGE> 24
"Fair Market Value" means, with respect to any capital stock
or other ownership interests issued or given by Interim or any
Subsidiary in connection with an Acquisition, (i) in the case of
capital stock that is Common Stock and such Common Stock is then
designated as a national market system security by the National
Association of Securities Dealers, Inc. ("NASDAQ") or is listed on a
national securities exchange, the average of the last reported bid and
ask quotations or prices reported thereon for Common Stock or such
other value as may be ascribed to the Common Stock in a definitive
merger or acquisition agreement provided such value is determined
according to customary methods for like transactions and is approved
(to the extent required by Interim's charter or bylaws) by Interim's
board of directors or (ii) in the case of capital stock that is not
Common Stock or in the event that Common Stock is not so designated on
NASDAQ or listed on such national exchange, or in the case of any
other ownership interests, the determination of the fair market value
thereof in good faith by a majority or disinterested members of the
board of directors of Interim or such Subsidiary, in each case
effective as of the close of business on the Business Day immediately
preceding the closing date of such Acquisition.
"FDIC" means the Federal Deposit Insurance Corporation and
any Governmental Authority succeeding to any of its principal
functions.
"Federal Funds Rate" means, for any day, the rate set forth
in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New
York (including any such successor, "H.l5(519)") on the preceding
Business Day opposite the caption "Federal Funds (Effective)"; or, if
for any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the arithmetic
mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City
time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"Fee Letters" has the meaning specified in Section 2.14(a).
"Financing Transaction" means a set of integrated
transactions involving extensions of credit to Interim and a
Subsidiary and concurrent and forward purchases of equity interests of
a Subsidiary, all as evidenced by a series of agreements executed on
or about June 30, 1999 among (1) Interim and Bank of America National
17
<PAGE> 25
Trust and Savings Association, as to a Financing and Interest Purchase
Agreement, (2) Atrium (AU-B) Pty. Limited and Bank of America National
Trust and Savings Association, as to a Loan Agreement, (3) Atrium
(U.S.-B) LLC and Bank of America National Trust and Savings
Association, as to a Subscription Agreement, (4) Bank of New York, as
escrow agent, Bank of America National Trust and Savings Association,
Interim, and Atrium (U.S.-B) LLC, as to an Escrow Agreement and (5)
Interim and Bank of America National Trust and Savings Association as
to a Guaranty Agreement, all as the same may be extended, renewed and
modified. The consequence of the consummation of these transactions,
after effecting the offsetting transactions pursuant to the
above-referenced documents, and various additional and related
agreements and transactions between and among Interim and some of its
Subsidiaries, is the creation of Australian Interim Indebtedness.
"Foreign Subsidiary" means any Subsidiary (other than
Spectrum) which (i) is organized under the laws of a jurisdiction
other than the United States or a state thereof and (ii) conducts
substantially all of its business and operations outside the United
States.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
"Further Taxes" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees, withholdings
or similar charges (including, without limitation, net income taxes
and franchise taxes), and all liabilities with respect thereto,
imposed by any jurisdiction on account of amounts payable or paid
pursuant to Section 5.1.
"FX Trading Office" means the NationsBank Foreign Exchange
Trading Desk in Charlotte, North Carolina, or such other office or
source of information as the Agent may designate with the concurrence
of the Companies.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances, subject to the
provisions of Section 1.4.
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<PAGE> 26
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guarantor" means each of the Subsidiaries listed on Schedule
1.2(b) and such other Subsidiaries which may become a Guarantor.
"Guaranty" means a Guaranty in the form reasonably acceptable
to the Agent and the Banks executed by every Guarantor, as the same
may be amended or otherwise modified from time to time.
"Honor Date" has the meaning specified in Section 3.3(b).
"IBOR" has the meaning specified in the definition of
"Offshore Rate".
"Impermissible Qualification" means, relative to the opinion
or certification of any independent public accountant or, if
applicable, any chartered accountants as to any financial statement of
any Company or any Subsidiary, any qualification or exception to such
opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause any Company to be in default of any of its
obligations under Section 9.3.
"Inactive Subsidiary" means a Subsidiary of Interim that is
not an Active Subsidiary.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
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<PAGE> 27
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit (other than letters of credit
supporting trade payables in the ordinary course of business), whether
or not drawn, and banker's acceptances issued for the account of such
Person (it being understood that, to the extent an undrawn letter of
credit supports another obligation consisting of Indebtedness, in
calculating aggregate Indebtedness only such other obligation shall be
included);
(c) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP, recorded as
capitalized lease liabilities;
(d) net liabilities of such Person under all Swap Contracts;
(e) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services (other than obligations under employment
contracts (including earn-out provisions which have not yet been
earned), restrictive covenants or similar arrangements or trade
payables in the ordinary course of business), and indebtedness
(excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements)
whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse;
(f) liabilities in accordance with GAAP of such Person with
respect to lease paper sold by such Person or any other Persons;
(g) all Contingent Obligations of such Person in respect of
any of the foregoing whether such Person or another Person is the
principal obligor in respect thereof;
(h) all amounts outstanding under Permitted Receivables
Securitizations;
(i) the aggregate amount of liabilities (including
obligations to purchase or repurchase or other Contingent Obligations)
arising under tax retention operating leases; and
(j) with respect to the Indebtedness evidenced by the
Financing Transaction, only the Australian Interim Indebtedness.
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<PAGE> 28
"Indemnified Liabilities" has the meaning specified in
Section 12.5.
"Indemnified Person" has the meaning specified in Section
12.5.
"Insolvency Proceeding" means, with respect to any Person,
(a) any case, action or proceeding with respect to such Person before
any competent court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, administrative receivership, administration, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or any
substantial portion of its creditors; undertaken under U.S.
Federal, State or foreign law.
"Interest Payment Date" means, as to any Loan other than a
Base Rate Loan, the last day of each Interest Period applicable to
such Loan and, as to any Base Rate Loan, the last Business Day of each
calendar quarter and each date such Loan is converted into another
Type of Loan; provided, however, that if any Interest Period for an
Offshore Rate Loan or Bid Loan exceeds three months, the dates that
fall at three month intervals after the beginning, and prior to the
end, of such Interest Period are also Interest Payment Dates.
"Interest Period" means, (a) as to any Offshore Rate Loan,
the period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which such Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one week
later in the case of a Loan in Dollars or pounds Sterling only or one,
two, three or six months thereafter in all other cases as selected by
a Company in its Irrevocable Notice of Syndicated Activity (or such
other period of time, not to exceed 12 months, as the Agent shall,
following reasonable prior notice from a Company, with the consent of
all Banks, elect to make available); and (b) as to any Bid Loan, a
period of not less than seven days and not more than 365 days as
selected by the Company in the applicable Competitive Bid Request;
provided that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless, in the case of
an Offshore Rate Loan, the result of such extension would be
to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the preceding
Business Day;
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<PAGE> 29
(ii) any Interest Period pertaining to an Offshore
Rate Loan that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iii) no Interest Period for any Loan shall extend
beyond the date stated in clause (a) of the definition of
"Termination Date".
"Interim (Europe)" means Interim Services (Europe) Inc., a
Delaware corporation and wholly-owned Subsidiary of Interim and which
entity is a Borrowing Subsidiary.
"Interim Note Advance" means each Bank's participation in any
Interim Note Borrowing in accordance with its Pro Rata Share.
"Interim Note Borrowing" means an extension of credit
resulting from a payment under the Interim Note Guaranty which shall
not have been reimbursed on the date when made or converted into an
appropriate Borrowing.
"Interim Note Commitments" means the commitment of
NationsBank to guaranty, and the commitment of the Banks severally to
participate in, the Interim Note Guarantee, in an aggregate amount not
to exceed on any date the amount of the Interim Note Obligations.
"Interim Note Guarantee" means the guaranty of payment by
NationsBank arising under the Interim Note Instrument the terms of
which are set forth in Schedule IV to the Interim Note Instrument.
"Interim Note Instrument" means the Loan Note Instrument
dated May 1, 1997 between Michael Page and NationsBank, N.A.
constituting up to (pound)12,500,000 Floating Rate Guaranteed Unlisted
Unsecured Loan Notes 2002, a copy of which is attached hereto
substantially in the form of Exhibit D, pursuant to which (a) Michael
Page has issued the Interim Notes evidencing its obligation to pay the
purchase price of shares of capital stock of Michael Page together
with interest and (b) NationsBank has guaranteed payment of such
amount.
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<PAGE> 30
"Interim Note Obligations" means at any time the Dollar
Equivalent Amount of the sum of (a) the aggregate unpaid principal
amount of Interim Notes, plus (b) the Aggregate Assumed Interest, plus
(c) the amount of unreimbursed payments made by NationsBank pursuant
to the Interim Note Guarantee.
"Interim Note Related Documents" means the Interim Note
Instrument and any documents relating to the Interim Note Guarantee.
"Interim Notes" means the Floating Rate Guaranteed Unlisted
Unsecured Loan Notes 2002 in the original principal amount of
approximately (pound)12,500,000 of which approximately
(pound)9,000,000 are outstanding issued pursuant to the Loan Note
Instrument the form of which is set forth in Schedule I to the Loan
Note Instrument.
"Interim Receivables" means Interim Receivables Corp., a
Delaware corporation.
"Inventory" means all inventory of whatever kind or nature of
a Person and wherever located, including, without limitation, all
goods held for sale or lease or furnished or to be furnished under
contracts, and any raw materials, work in process or finished goods,
and all goods and materials used or consumed in such Person's
business, including, without limitation, those goods identified as
equipment on operating leases, machine inventory and parts and
supplies inventory.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other
Person (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business);
(b) any Contingent Obligation of such Person; and
(c) any ownership or similar interest held by such Person in
any other Person.
The amount of any Investment shall be the original principal or
capital amount thereof less all returns of principal or equity thereon
(and without adjustment by reason of the financial condition of such
other Person) and shall, if made by the transfer or exchange of
property other than cash, be deemed to have been made in an original
principal or capital amount equal to the fair market value of such
property.
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<PAGE> 31
"Invitation for Competitive Bids" means a solicitation for
Competitive Bids, substantially in the form of Exhibit E.
"Irrevocable Notice of Syndicated Activity" means a notice in
substantially the form of Exhibit F.
"IRS" means the Internal Revenue Service, and any
Governmental Authority succeeding to any of its principal functions
under the Code.
"Issuance Date" has the meaning specified in Section 3.1(a).
"Issue" means, with respect to any Letter of Credit, to issue
or to extend the expiry of, or to renew or increase the amount of,
such Letter of Credit; and the terms "Issued," "Issuing" and
"Issuance" have corresponding meanings.
"Issuing Bank" means NationsBank, and in the case of the
Existing Letters of Credit, First Chicago, Comerica Bank, and
SunTrust, or, upon the request of the Companies with the consent of
the Agent, another Bank, in its capacity as issuer of one or more
Letters of Credit hereunder, together with any successor letter of
credit issuer arising under Section 11.1(b) or Section 11.9.
"Judgment Currency" has the meaning specified in Section
12.19.
"L/C Advance" means each Bank's participation in any L/C
Borrowing in accordance with its Pro Rata Share.
"L/C Amendment Application" means an application form for
amendment of outstanding Letters of Credit as shall at any time be in
use at the Issuing Bank, as the Issuing Bank shall request.
"L/C Application" means an application for Issuances of
standby or commercial documentary letters of credit in such form as
shall at any time be in use at the Issuing Bank, shall be consistent
with the terms of this Credit Agreement and shall be agreed to by the
Company applying for the applicable Letter of Credit.
"L/C Borrowing" means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been
reimbursed on the date when made or converted into an appropriate
Borrowing.
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<PAGE> 32
"L/C Commitment" means the commitment of the Issuing Bank to
Issue, and the commitment of the Banks severally to participate in,
Letters of Credit from time to time Issued or outstanding under
Article III, in an aggregate amount not to exceed on any date in the
case of Letters of Credit the amount of $75,000,000, as the same shall
be reduced as a result of a reduction in the L/C Commitment pursuant
to Section 2.8; provided that the L/C Commitment is a part of the
combined Revolving Commitments, rather than a separate, independent
commitment and shall not at any time exceed the combined Revolving
Commitments.
"L/C Obligations" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding,
plus (b) the amount of all unreimbursed drawings under all Letters of
Credit, including all outstanding L/C Borrowings.
"L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any of the Issuing Bank's
standard form documents for letter of credit issuances.
"Lending Office" means, as to any Bank, the office or offices
of such Bank specified as its "Lending Office", "Domestic Lending
Office", "Offshore Lending Office" or "Offshore Currency Lending
Office", as the case may be, on Schedule 12.2, or such other office or
offices as such Bank may from time to time notify the Companies and
the Agent.
"Letters of Credit" means any standby letter of credit issued
by the Issuing Bank pursuant to Section 3.1(a) and the Existing
Letters of Credit.
"Lien" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale
or other title retention agreement), the interest of a lessor under a
capital lease, or any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any
financing statement naming the owner of the asset to which such lien
relates as debtor, under the Uniform Commercial Code or any comparable
law and any contingent or other agreement to provide any of the
foregoing, but not including the interest of a lessor under an
operating lease.
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<PAGE> 33
"Loan" means an extension of credit to a Company under
Article II, Article III or Article IV, and may be a Revolving Loan,
Swing Line Loan, Bid Loan, 364 Day Loan, L/C Advance or Interim Note
Advance and, if the Companies so elect pursuant to Section 2.21(f), a
Term Loan.
"Loan Documents" means this Agreement, any Notes, the Support
Documents, the Fee Letters, the L/C-Related Documents, and all other
documents delivered to the Agent or any Bank in connection with the
transactions contemplated by this Agreement.
"Margin Stock" means "margin stock" as such term is defined
in Regulation T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) or prospects of Interim
and its Subsidiaries taken as a whole, (b) a material impairment of
the ability of any Company or any Subsidiary to perform under any Loan
Document or to avoid or cure, as applicable, any Event of Default, or
(c) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Company or any Subsidiary of any
Loan Document.
"Merger Agreement" means the Agreement and Plan of Merger
dated as of March 24, 1999 among Norrell, Interim Merger Corporation
and Interim.
"Michael Page" means Michael Page Group PLC (formerly known
as Interim Services (UK) PLC), a public liability company incorporated
in England and Wales (Registered Number 3310225) and wholly-owned
Subsidiary of Interim (Europe) and which entity is a Borrowing
Subsidiary.
"Minimum Tranche" means in respect of Loans comprising part
of the same Borrowing, or to be converted or continued under Section
2.4, (a) in the case of Base Rate Loans and Offshore Rate Loans in
Dollars, $10,000,000 or any multiple of $1,000,000 in excess thereof,
or (as to Revolving Borrowings and 364 Day Borrowings) the aggregate
amount of the then unused Revolving Commitments and 364 Day
Commitments, and (b) in the case of Offshore Currency Loans, a
multiple of 100,000 units of the Applicable Currency in excess of the
Dollar Equivalent Amount (calculated by the Agent as of the date of
receipt of the relevant Irrevocable Notice of Committed Activity) of
$10,000,000 or (as to Revolving Commitments and 364 Day Commitments)
the aggregate amount of the then unused Revolving Commitments.
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<PAGE> 34
"Multiemployer Plan" means a "multiemployer plan", within the
meaning of Section 4001 (a) (3) of ERISA, to which any Company or any
ERISA Affiliate makes, is making, or is obligated to make
contributions or, during the preceding three calendar years, has made,
or been obligated to make, contributions.
"NationsBank" means NationsBank, N.A., a national banking
association.
"Net Issuance Proceeds" means with respect to the issuance
and sale of any Indebtedness (including the consummation of any
Permitted Receivables Securitization) of Interim or any Subsidiary,
the principal amount of such Indebtedness, less any costs of issuance
and any original issue discount.
"Non-Consenting Bank" has the meaning specified in Section
2.21(a).
"Norrell" means Norrell Corporation, a Georgia corporation.
"Norrell Indebtedness" means Indebtedness of Norrell
described in Schedule 1.2(c) hereto.
"Notes" means the Revolving Loan Notes, 364 Day Notes, Swing
Line Note and the Bid Loan Notes.
"Obligations" means, collectively, all advances, debts,
liabilities, obligations, covenants and duties arising under any Loan
Document and the Interim Note Obligations owing by any Company to any
Bank, any Designated Bidder, the Agent, or any Indemnified Person, or
arising under any Swap Contract between any Company and any Bank or
the Agent, in any case, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due,
now existing or hereafter arising.
"Offshore Currency" means British pounds sterling, Euros and
Australian dollars at any time, and with the consent of all the Banks
such other currency that is at such time freely traded in offshore
interbank foreign exchange markets and is freely transferable and
freely convertible into Dollars and such currency is readily available
to the Banks and is an Alternate Currency.
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<PAGE> 35
"Offshore Currency Lending Office" means the office of a Bank
from which Offshore Currency Loans are to be made as set forth in
Schedule 12.2.
"Offshore Currency Loan" means any Offshore Rate Loan
denominated in an Offshore Currency.
"Offshore Rate" means, for any Interest Period, with respect
to Offshore Rate Loans comprising part of the same Borrowing, the rate
of interest per annum (rounded upward to the next 1/100th of 1%)
determined by the Agent as follows:
IBOR
------------------------------------
Offshore Rate = 1 - Eurocurrency Reserve Percentage
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date
of any change in the Eurocurrency Reserve Percentage.
"Eurocurrency Reserve Percentage" means for any day for any
Interest Period the maximum reserve percentage (expressed as
a decimal, rounded upward to the next 1/100th of 1%) in
effect on such day (whether or not applicable to any Bank)
under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"); and
"IBOR" means, with respect to any Offshore Rate Loan, for the
Interest Period applicable thereto, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Dow Jones Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in
Dollars or such other applicable page in the case of an
Alternate Currency at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "IBOR" shall
mean, for any Offshore Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in
Dollars or the Alternate Currency, as the case may be, at
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<PAGE> 36
approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if
more than one rate is specified on Reuters Screen LIBO Page,
the applicable rate shall be the arithmetic mean of all such
rates (rounded upwards, if necessary, to the nearest 1/100th
of 1%)
"Offshore Rate Loan" means a Syndicated Loan that bears
interest based on the Offshore Rate.
"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, memorandum of association,
articles of association, the bylaws, or other similar organizational
documents, any certificate of determination or instrument relating to
the rights of preferred shareholders of such corporation, any
shareholder rights agreement, and all applicable resolutions of the
board of directors (or any committee thereof) of such corporation
adopting, supplementing or modifying any of the foregoing and, for any
entity other than a corporation, the equivalent of the foregoing,
including the partnership agreement (or comparable agreement) of any
partnership.
"Original Currency" has the meaning specified in Section
12.19.
"Other Taxes" has the meaning specified in Section 5.6(b).
"Overnight Rate" means, for any day, the rate of interest per
annum at which overnight deposits in the Applicable Currency, in an
amount approximately equal to the amount with respect to which such
rate is being determined, would be offered for such day by NationsBank
to major banks in the London interbank market.
"Participant" has the meaning specified in Section 12.8(d).
"Payroll Account" means a bank account maintained by Interim
or any Subsidiary solely for the purpose of paying salary, bonuses and
similar items to employees.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
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<PAGE> 37
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which any Company sponsors
or maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as
described in Section 4064(a) of ERISA) has made contributions at any
time during the immediately preceding five plan years.
"Permitted Receivables Securitization" means limited recourse
or nonrecourse sales and assignments of accounts receivable of Interim
or its Subsidiaries to one or more special purpose entities, in
connection with the issuance of obligations by such special purpose
entities secured by such accounts, the proceeds of the issuance of
which obligations shall be made available to Interim or its
Subsidiaries at such rates of advance, and the obligations issued by
such special purpose entities shall be in such amount or amounts, bear
such rate or rates of interest, and be subject to such customary terms
and conditions, all as shall be reasonably acceptable to the Required
Banks; provided, however, that the maximum principal amount which may
be advanced at any time pursuant to the Permitted Receivables
Securitization shall not exceed $250,000,000; provided, further, the
receivables securitization, the terms of which are described on
Schedule 1.2(d), is deemed acceptable to all Banks by reason of their
execution of this Agreement.
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which a Company sponsors or maintains or to which a
Company makes, is making, or is obligated to make contributions and
includes any Pension Plan, other than a Plan maintained outside the
United States primarily for the benefit of persons who are not U.S.
residents.
"Pledge Agreements" means, collectively, the pledge
agreements of certain Companies and Guarantors, which Companies and
Guarantors as of the Closing Date are described in Schedule II, in
form reasonably satisfactory to the Agent and the Banks pursuant to
which there is pledged to the Agent for the benefit of the Banks the
ownership interest in those Subsidiaries described in Schedule II, and
such other Subsidiaries as may be required by Section 8.7.
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<PAGE> 38
"Pro Forma Historical Statements" means the pro forma
consolidated financial statements (including balance sheets and
earnings statement) of Interim and its Subsidiaries and Norrell and
its Subsidiaries for the period ended March 26, 1999 in the case of
Interim and May 2, 1999 in the case of Norrell, giving historical pro
forma effect to the acquisition of Norrell and its Subsidiaries.
"Pro Forma Projections" means the pro forma consolidated
financial statement projections of Interim and its Subsidiaries for
each of the fiscal years ending 1999 through 2003, giving effect to
the acquisition of Norrell and its Subsidiaries, in form and detail
satisfactory to the Agent.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or
intangible.
"Pro Rata Share" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of such Bank's Commitment divided by the
combined Commitments of all Banks.
"Reduction Date" has the meaning specified in Section 2.9(d).
"Registration Statement" means the Registration Statement No.
333-79191 on Form S-4 filed by Interim with the Securities and
Exchange Commission on May 24, 1999, as amended.
"Replacement Bank Date" has the meaning specified in Section
2.21(c).
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has
been waived in regulations issued by the PBGC.
"Required Banks" means at any time Banks holding at least 51%
of the Commitments without giving effect to the termination of any
Commitments as a result of an Event of Default.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or final,
nonappealable determination of an arbitrator or of a 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.
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<PAGE> 39
"Responsible Officer" means the Chief Executive Officer, the
Chief Financial Officer, the Treasurer, or an Assistant Treasurer of
Interim or the same individuals holding the same or equivalent office
with any other Company or Subsidiary.
"Revolving Borrowing" means a Borrowing hereunder consisting
of Revolving Loans made on the same day by the Banks ratably according
to their respective Pro Rata Shares and, in the case of Offshore Rate
Loans, having the same Interest Periods.
"Revolving Commitment", as to each Bank, has the meaning
specified in Section 2.1(a).
"Revolving Loan" has the meaning specified in Section 2.1(a)
and may be an Offshore Rate Loan or a Base Rate Loan (each, a "Type"
of Revolving Loan).
"Revolving Loan Note" means a note substantially in the form
of Exhibit G and delivered to a Bank pursuant to Section 2.2.
"Revolving Loan Outstandings" means the sum of outstanding
principal amounts of Revolving Loans, Bid Loans, L/C Obligations,
Interim Note Obligations and Swing Line Outstandings.
"Same Day Funds" means (i) with respect to disbursements and
payments in Dollars, immediately available funds, and (ii) with
respect to disbursements and payments in an Offshore Currency, same
day or other funds as may be determined by the Agent to be customary
in the place of disbursement or payment for the settlement of
international banking transactions in the relevant Offshore Currency.
"Spectrum" means Spectrum Insurance Company, Ltd., a Cayman
Islands corporation.
"Spot Rate" for a currency means the rate quoted (expressed
as a decimal, rounded to the fourth decimal place) to the Agent as the
spot rate for the purchase of such currency with another currency
through the FX Trading Office at approximately 11:00 a.m. (Charlotte
time) on the date two Business Days prior to the date as of which the
foreign exchange settlement is made.
"Stock Consideration" means, with respect to an Acquisition,
the Fair Market Value of all capital stock or other ownership
interests of Interim or any Subsidiary issued or given in connection
with such Acquisition.
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<PAGE> 40
"Subordinated Indebtedness" means collectively Indebtedness
of a Company subordinated to the Obligations in form and substance
(including terms and conditions) satisfactory to the Required Banks.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other
business entity of which more than 50% of the voting stock, membership
interests or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by such
Person, or one or more of the Subsidiaries of such Person, or a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of Interim.
"Support Documents" means, collectively, (i) the Cash Account
Agreement, Guaranties and Pledge Agreements and all other cash
collateralization agreements, guaranties and pledges, and other
instruments or agreements in favor of the Banks or the Agent for the
benefit of the Banks now or hereafter delivered by the applicable
Company, Guarantor or other Subsidiary to the Banks or the Agent
pursuant to or in connection with the transactions contemplated
hereby, and all documents now or hereafter filed under applicable law
by the applicable Company, Guarantor or other Subsidiary in favor of
the Banks or the Agent for the benefit of the Banks as secured party,
and (ii) any amendments, supplements, modifications, renewals,
replacements, consolidations, substitutions and extensions of any of
the foregoing.
"Swap Contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond, note or bill option, interest rate
option, forward foreign exchange transaction, cap, collar or floor
transaction, currency swap, cross-currency rate swap, swaption,
currency option or any other, similar transaction (including any
option to enter into any of the foregoing) or any combination of the
foregoing, and, unless the context otherwise clearly requires, any
master agreement relating to or governing any or all of the foregoing.
"Swap Termination Value" means, in respect of any one or more
Swap Contracts, after taking into account the effect of any legally
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enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out
and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date
referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined by the
applicable Company based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap
Contracts (which may include any Bank).
"Swing Line" means the revolving line of credit established
by NationsBank in favor of the Companies pursuant to Section 2.19.
"Swing Line Borrowing" means a Borrowing under the Swing
Line.
"Swing Line Borrowing Notice" means a notice substantially in
the form of Exhibit L.
"Swing Line Loans" means loans made by NationsBank to the
Companies pursuant to Section 2.19.
"Swing Line Note" means the promissory note of the Companies
evidencing Swing Line Loans executed and delivered to NationsBank as
provided in Section 2.19 substantially in the form of Exhibit H.
"Swing Line Outstandings" means, as of any date of
determination, the aggregate principal amount of all Swing Line Loans
then outstanding.
"Swing Line Participation" means, with respect to any Bank
(other than NationsBank) and a Swing Line Loan, the extension of
credit represented by the participation of such Bank in the liability
owed to NationsBank in respect of such Swing Line Loan.
"Syndicated Borrowing" means either or both a Revolving
Borrowing or a 364 Day Borrowing.
"Syndicated Loan" means either or both a Revolving Loan or a
364 Day Loan.
"Taxes" has the meaning specified in Section 5.6(a).
"Term Loan" has the meaning specified in Section 2.21.
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"364 Day Borrowing" means a Borrowing hereunder consisting of
364 Day Loans made on the same day by the Banks ratably according to
their respective Pro Rata Shares and, in the case of Offshore Rate
Loans, having the same Interest Periods.
"364 Day Commitment", as to each Bank, has the meaning
specified in Section 2.1(b).
"364 Day Extension Date" means June 29, 2000 and each date
thereafter, if any, to which the 364 Day Termination Date has been
extended pursuant to Section 2.21, but in no event later than the
Termination Date.
"364 Day Loan" has the meaning specified in Section 2.1(b)
and may be an Offshore Rate Loan or a Base Rate Loan (each, a "Type"
of 364 Day Loan).
"364 Day Loan Outstandings" means the sum of the outstanding
principal amount of 364 Day Loans.
"364 Day Note" means a note substantially in the form of
Exhibit I and delivered to each Bank pursuant to Section 2.2.
"364 Day Termination Date" means the earlier of (i) the 364
Day Extension Date or (ii) the date of termination of Banks'
obligations pursuant to Section 10.1 upon the occurrence of an Event
of Default, or (iii) such date as the Companies may voluntarily
permanently terminate the 364 Day Commitments by permanent payment in
full of all 364 Day Loan Outstandings, or (iv) the occurrence of the
Termination Date.
"Termination Date" means the earlier to occur of:
(a) June 30, 2004, and
(b) (i) in the case of Revolving Loans, Bid Loans, Swing Line
Loans, Interim Note Guarantee and Letters of Credit, the date on which
the Revolving Commitments terminate and all the monetary Obligations
(and obligations in the nature of continuing indemnities or for fees
and disbursements of third parties not yet invoiced to an obligor),
have been paid in full in accordance with the provisions of this
Agreement; and
(ii) in the case of 364 Day Loans, the 364 Day
Termination Date; and
(c) the occurrence of a Default or an Event of Default.
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"Total Indebtedness" means, at any time, all Indebtedness of
Interim and its Subsidiaries on a consolidated basis at such time.
"Total Offshore Currency Sublimit" means, with respect to the
principal amount of Loans outstanding in Offshore Currencies, the
Dollar Equivalent Amount of $350,000,000.
"Type" has the meaning specified in the definition of
"Revolving Loan" and "364 Day Loan".
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with the
assumptions used for funding that Plan pursuant to Section 412 of the
Code for the applicable plan year.
"United States" and "U.S." each means the United States of
America.
"Valuation Date" has the meaning specified in Section 2.5(a).
"Year 2000 Compliant" means all computer applications
(including those affected by information received from its suppliers
and vendors) that are material to Interim's or any of its
Subsidiaries' business and operations will on a timely basis be able
to perform properly date-sensitive functions involving all dates on
and after January 1, 2000;
"Year 2000 Problem" means the risk that computer applications
used by Interim or any of its Subsidiaries (including those affected
by information received from its suppliers and vendors) may be unable
to recognize and perform properly date-sensitive functions involving
certain dates on and after January 1, 2000.
1.3 Other Interpretive Provisions.
(1) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(2) The words "hereof", "herein", "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
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(3) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(1) The term "including" is not limiting and means "including without
limitation."
(2) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including";
the words "to" and "until" each mean "to but excluding", and the
word "through" means "to and including."
(3) The term "property" means Property.
(4) The term "Charlotte time" means the time of day as of any
determination thereof in Charlotte, North Carolina.
(5) Whenever interest rates or fees are established in whole or in
part by reference to a numerical percentage expressed as "___%,"
such arithmetic expression shall be interpreted in accordance with
the convention that 1% = 100 basis points.
(4) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document, and
(1) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting the statute or
regulation.
(5) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(6) Each of the parties to the Loan Documents and their counsel have
reviewed and revised, or requested (or had the opportunity to request)
revisions to, the Loan Documents, and any rule of construction that ambiguities
are to be resolved against the drafting party shall be inapplicable in the
construing and interpretation of the Loan Documents and all exhibits, schedules
and appendices thereto.
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1.4 Accounting Principles.
(1) Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied as utilized by the Companies. If any change after
the Closing Date in GAAP as in effect on the Closing Date shall result in a
change in any calculation required to determine compliance with any provision
contained in this Agreement, the Companies and the Required Banks will
negotiate in good faith to amend such provision in a manner to reflect such
change such that the determination of compliance with such provision shall
yield the same substantive result as would have obtained prior to such change
in GAAP. Until such an amendment is entered into, covenants shall be calculated
in accordance with GAAP as in effect immediately preceding such change.
(2) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Companies.
1.5 Currency Equivalents Generally. For all purposes of this Agreement
(but not for purposes of the preparation of any financial statements delivered
pursuant hereto), the equivalent in any Offshore Currency or other currency of
an amount in Dollars, and the equivalent in Dollars of an amount in any
Offshore Currency or other currency, shall be determined as set forth in the
definition of Dollar Equivalent Amount.
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ARTICLE 2
THE CREDITS
2.1 Amounts and Terms of Commitments; Joint and Several Liability.
(1) Each Bank severally agrees, on the terms and conditions set forth
herein, to make loans in Applicable Currencies to the Companies (each such
loan, a "Revolving Loan") from time to time on any Business Day during the
period from the Effective Date to the Termination Date (or such earlier date as
the Revolving Commitments of all Banks shall terminate in accordance with the
terms hereof), in an aggregate Dollar Equivalent Amount of principal not to
exceed at any time outstanding the amount set forth on Schedule 2.1 under the
heading "Revolving Commitment" (such amount as the same may be reduced under
Section 2.8 or 2.9(d) or (f) or changed as a result of one or more assignments
under Section 12.8, such Bank's "Revolving Commitment"); provided, however,
that, after giving effect to any Revolving Borrowings and all L/C Obligations,
Interim Note Obligations, Bid Borrowings and Swing Line Outstandings, the
aggregate Dollar Equivalent Amount of the principal of all Revolving Loan
Outstandings as determined pursuant to Section 2.5 shall not at any time exceed
the combined Revolving Commitments. Each Revolving Loan will be made to one of
the Companies. Within the limits of each Bank's Revolving Commitment, and
subject to the other terms and conditions hereof, the Companies may borrow
under this Section 2.1(a), prepay under Section 2.9 and Section 2.11 and
reborrow under this Section 2.1 (a). Such Revolving Loans may be Offshore Rate
Loans or Base Rate Loans, except that all Base Rate Loans shall be in Dollars
and, after giving effect to all Revolving Loan Outstandings in Offshore
Currencies, subject to Section 2.11(b) ,the Dollar Equivalent Amount of all
Revolving Loan Outstandings in Offshore Currencies shall not exceed the Total
Offshore Currency Sublimit.
(2) Each Bank severally agrees, on the terms and conditions set forth
herein, to make loans in Dollars to the Companies (each such loan, a "364 Day
Loan") from time to time on any Business Day during the period from the
Effective Date to the 364 Day Termination Date, in an aggregate principal
amount not to exceed at any time outstanding the amount set forth on Schedule
2.1 under the heading "364 Day Commitment") (such amount as the same may be
reduced under Section 2.8 or 2.9 or changed as a result of one or more
assignments under Section 12.8, such Bank's "364 Day Commitment") provided,
however, that, after giving effect to any 364 Day Borrowings, the aggregate
principal of all 364 Day Loan Outstandings shall not at any time exceed the
combined 364 Day Commitments. Each 364 Day Loan will be made to one of the
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Companies. Within the limits of each Bank's 364 Day Commitment, and subject to
the other terms and conditions hereof, the Companies may borrow under this
Section 2.1(b), prepay under Section 2.9 and reborrow under this Section
2.1(b). Such 364 Day Loans may be Offshore Rate Loans or Base Rate Loans,
except that all 364 Day Loans shall be in Dollars.
(c) Notwithstanding anything contained in this Section 2.1 to the
contrary, unless all the Banks shall agree otherwise pursuant to Section
2.5(b), all Loans under Section 2.1(a) shall be in Dollars or an Offshore
Currency. The Loan to Michael Page existing on the Effective Date in pounds
sterling (as an Offshore Currency) in a Dollar Equivalent Amount of
$254,362,500.00 (such Loan, together with any outstanding amount thereof,
including continuations pursuant to Section 2.4, herein called the "Michael
Page Pound Loan") shall continue to be denominated in British pounds sterling.
All payments of the principal amount of the Michael Page Pound Loan shall be in
pounds sterling. All Loans under Section 2.1(b) shall be in Dollars.
(d) Notwithstanding any other provision of this Agreement, each
Company shall be jointly and severally liable as primary obligor and not merely
as surety for repayment of all Obligations arising under the Loan Documents.
Such joint and several liability shall apply to each Company regardless of
whether (i) any Loan was only requested by or made to another Company or the
proceeds of any Loan were used only by another Company, (ii) any Letter of
Credit was Issued on the application of another Company, (iii) the Interim Note
Guarantee was entered into for the account of Michael Page, (iv) any interest
rate election was made only by another Company, or (v) any indemnification
obligation or any other obligation arose only as a result of the actions of
another Company; provided the liability of each of the Companies other than
Interim under this Agreement, the Notes and the other Loan Documents shall be
limited to the maximum amount of the Obligations for which such other Company
may be liable without violating any applicable fraudulent conveyance,
fraudulent transfer or comparable laws. Each Company shall retain any right of
contribution arising under applicable law against the other Companies as the
result of the satisfaction of any Obligations; provided, no Company shall
assert such right of contribution against any other Company until the
Obligations shall have been paid in full. Notwithstanding anything herein to
the contrary, Michael Page shall be liable hereunder only for Borrowings,
including Interim Note Borrowings and L/C Borrowings, made by it or on its
behalf hereunder together with interest relating thereto and fees and expenses
arising hereunder
Without limiting the foregoing provisions of this Section 2.1(d), each
of the Companies other than Michael Page hereby irrevocably, absolutely and
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unconditionally guarantees the full and punctual payment or performance when
due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all Obligations of each other Company,
whether owing to the Agent or any Bank. This guarantee constitutes a guaranty
of payment and not of collection. The liability of each of the Companies other
than Interim under the immediately preceding two sentences shall be limited to
the maximum amount for which such other Company may be liable without violating
any applicable fraudulent conveyance, fraudulent transfer or comparable laws.
It is the intention of the parties that with respect to each Company
its obligations hereunder and under the other Loan Documents shall be absolute,
unconditional and irrevocable irrespective of:
(1) any lack of validity, legality or enforceability of this
Agreement, any Note, any other Loan Document as to any other
Company or the Interim Note Instrument.
(2) the failure of the Agent or any Bank
(1) to enforce any right or remedy against any other Company
or any other Person under the provisions of this Agreement, any
Note, any other Loan Document or otherwise, or
(2) to exercise any right or remedy against any guarantor of,
or collateral securing, any Obligations;
(3) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other
extension, compromise or renewal of any Obligations;
(4) any reduction, limitation, impairment or termination of any
Obligations with respect to any other Company or any other Person
for any reason including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to (and each
Company hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality, nongenuineness,
irregularity, compromise or unenforceability of, or any other
event or occurrence affecting, any Obligations with respect to any
other Company;
(5) any addition, exchange, release, surrender or nonperfection of any
collateral, or any amendment to or waiver or release or addition
of, or consent to departure from, any guaranty, held by the Agent,
any Bank or any holder of any Note securing any of the
Obligations; or
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(6) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any other
Company, any surety or any guarantor.
Each Company agrees that its joint and several liability hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Obligations is rescinded
or must be restored by the Agent, any Bank or any holder of any Note, upon the
insolvency, bankruptcy or reorganization of any Company as though such payment
had not been made.
Each Company hereby expressly waives: (a) notice of the Banks'
acceptance of this Agreement; (b) notice of the existence or creation or
non-payment of all or any of the Obligations; (c) presentment, demand, notice
of dishonor, protest, and all other notices whatsoever other than notices
expressly provided for in this Agreement and (d) all diligence in collection or
protection of or realization upon the Obligations or any thereof, any
obligation hereunder, or any security for or guaranty of any of the foregoing.
No delay on any of the Banks' or the Agent's part in the exercise of
any right or remedy shall operate as a waiver thereof, and no single or partial
exercise by any of the Banks or the Agent of any right or remedy shall preclude
any other or further exercise thereof or the exercise of any other right or
remedy. No action of the Agent or any of the Banks permitted hereunder shall in
any way affect or impair any of their rights or any of their obligations to any
of the Companies under this Agreement.
2.2 Loan Accounts.
(1) The Loans made by each Bank (including NationsBank as provider of
the Swing Line) or Designated Bidder, the Letters of Credit Issued by the
Issuing Bank and the Interim Note Guarantee made by NationsBank shall be
evidenced by one or more loan accounts or records maintained by such Bank,
Designated Bidder, Issuing Bank or NationsBank, as the case may be, in the
ordinary course of business. The loan accounts or records maintained by the
Agent, the Issuing Bank, each Bank or Designated Bidder or NationsBank shall be
prima facie evidence of the amount of the Loans made by the Banks and
Designated Bidders to the Companies and the interest and payments thereon. Any
failure to record or any error in doing so shall not, however, limit, expand or
otherwise affect the obligations of the Companies hereunder.
(2) Upon the request of any Bank or Designated Bidder made through the
Agent, the Loans made by such Bank may be evidenced by one or more Notes, in
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addition to loan accounts. Each such Bank or Designated Bidder may, at its
option, endorse on the schedules annexed to its Note(s) the date, amount and
maturity of each Loan made by it and the amount of each payment of principal
made by a Company with respect thereto. Each such Bank and Designated Bidder is
irrevocably authorized by each Company to endorse its Note(s) and each Bank's
or Designated Bidder's record shall be prima facie evidence; provided, however,
that the failure of a Bank or Designated Bidder to make, or an error in making,
a notation thereon with respect to any Loan shall not limit, expand or
otherwise affect the obligations of any Company hereunder or under any such
Note to such Bank or Designated Bidder.
2.3 Procedure for Syndicated Borrowing.
(1) Each Syndicated Borrowing shall be made upon the borrowing
Company's irrevocable written notice delivered to the Agent in the form of an
Irrevocable Notice of Syndicated Activity (which notice must be received by the
Agent prior to 11:00 a.m. (Charlotte time) in the case of a Base Rate Loan and
12:00 noon (Charlotte time) in the case of Offshore Rate Loans) (i) three
Business Days prior to the requested Borrowing Date, in the case of Offshore
Rate Loans denominated in Dollars or Offshore Currency Loans; (ii) one Business
Day prior to the requested Borrowing Date in the case of a Base Rate Loan to a
Foreign Subsidiary; and (iii) on the same Business Day as a requested Borrowing
Date in the case of Base Rate Loans to other than a Foreign Subsidiary (with
settlement of Base Rate Loans to be made in the United States), specifying:
(1) the Company by which such Syndicated Borrowing is to be
made;
(2) whether such Syndicated Borrowing is a Revolving
Borrowing or 364 Day Borrowing;
(3) the amount of such Syndicated Borrowing, which shall be
in an aggregate amount not less than the applicable Minimum Tranche;
(4) the requested Borrowing Date, which shall be a Business
Day;
(5) in the case of a Syndicated Borrowing which is a
Revolving Borrowing comprised of Offshore Currency Loans if permitted
hereunder, the Applicable Currency; and
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(6) in the case of a Syndicated Borrowing comprised of
Offshore Rate Loans, the duration of the Interest Period applicable to
such Syndicated Borrowing included in such notice. If the Irrevocable
Notice of Syndicated Activity fails to specify the duration of the
Interest Period for any Syndicated Borrowing comprised of Offshore
Rate Loans, such Interest Period shall be one month.
(2) Upon receipt of an Irrevocable Notice of Syndicated Activity by
the Agent, the Agent shall determine the availability of the Commitments
hereunder as of the date of receipt by the Agent of such Irrevocable Notice of
Syndicated Activity. In the case of the Michael Page Pound Loan or any other
Offshore Currency Loan, an indicative Dollar Equivalent Amount of any
Syndicated Borrowing in an Offshore Currency will be determined by the Agent
for the related Borrowing on the Valuation Date therefor in accordance with
Section 2.5(a). Upon receipt of such Irrevocable Notice of Syndicated Activity,
the Agent will promptly notify each Bank thereof at such Bank's respective
applicable Lending Office and of the amount of such Bank's Pro Rata Share of
such Borrowing. In the case of a Borrowing comprised of Offshore Currency
Loans, such notice will provide the amounts in the Applicable Currency of each
Bank's Pro Rata Share of such Borrowing, and the Agent will, on the Valuation
Date therefor, promptly notify each Bank of the Dollar Equivalent Amount of
such Bank's Pro Rata Share of such Borrowing. In the case of a Revolving
Borrowing comprised of Offshore Currency Loans, if the determination by the
Agent of the Dollar Equivalent Amount of such Revolving Borrowing as described
in the immediately preceding sentence shall result in the Dollar Equivalent
Amount of all Revolving Loan Outstandings plus the proposed Revolving Borrowing
being in excess of the combined Revolving Commitments, then such Borrowing
shall be reduced by the amount necessary to comply with Section 2.1(a)
regardless of the Minimum Tranche requirement. For purposes of the immediately
preceding sentences, the Agent shall value the Dollar Equivalent Amount of all
Loans, Letters of Credit and Interim Note Obligations other than the applicable
Borrowing as at the most recent Valuation Date for each Loan or Letter of
Credit.
(3) Each Bank will make the amount of its Pro Rata Share of each
Syndicated Borrowing available to the Agent for the account of the Company
specified in the Irrevocable Notice of Syndicated Activity at the Agent's
Payment Office on the Borrowing Date requested by the applicable Company in
Same Day Funds and in the requested currency (i) in the case of a Borrowing
comprised of Loans in Dollars, by 2:00 p.m. Charlotte time and (ii) in the case
of a Borrowing comprised of Offshore Currency Loans by such time as the Agent
may reasonably specify. The proceeds of all such Loans will then be made
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available to the Company specified in the Irrevocable Notice of Syndicated
Activity by the Agent in Same Day Funds by wire transfer in accordance with
written instructions provided to the Agent by such Company of like funds as
received by the Agent.
(4) After giving effect to any Syndicated Borrowing, unless the Agent
shall otherwise consent, there may not be more than ten (10) different Interest
Periods in effect in respect of all Syndicated Loans and Bid Loans together
then outstanding.
2.4 Conversion and Continuation Elections - Syndicated Loans.
(1) Each Company may, upon irrevocable written notice to the Agent in
accordance with Section 2.4(b) with respect to Syndicated Loans made to such
Company:
(1) elect, as of any Business Day, in the case of Base Rate Loans, or
as of the last day of the applicable Interest Period, in the case
of Offshore Rate Loans, to convert any such Loans (or any part
thereof in an amount not less than the Minimum Tranche) into
Syndicated Loans of any other Type; or
(2) elect, as of the last day of the applicable Interest Period, to
continue any Syndicated Loans having Interest Periods expiring on
such day (or any part thereof in an amount not less than the
Minimum Tranche);
provided that Syndicated Loans may not be converted into or continued as
Syndicated Loans in a different currency; and provided further, that if at any
time the aggregate amount of Offshore Rate Loans in respect of any Syndicated
Borrowing is reduced by payment, prepayment, or conversion of part thereof to
be less than $10,000,000, such Offshore Rate Loans, if in Dollars, shall
automatically convert into Base Rate Loans, and on and after such date the
right of such Company to continue such Syndicated Loans as, and convert such
Syndicated Loans into, Offshore Rate Loans shall terminate.
(2) Each Company shall deliver an Irrevocable Notice of Syndicated
Activity to be received by the Agent not later than 11:00 a.m. (Charlotte time)
in the case of Base Rate Loans and 12:00 noon (Charlotte time) in the case of
Offshore Rate Loans, with respect to Syndicated Loans made to such Company, (i)
at least three Business Days in advance of the Conversion/Continuation Date for
the conversion into or continuation of any Offshore Rate Loan; (ii) one
Business Day prior to the requested Borrowing Date in the case of a Base Rate
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Loan to a Foreign Subsidiary; and (iii) on the same Business Day as the
Conversion/Continuation Date for the conversion into or continuation of a Base
Rate Loan to other than a Foreign Subsidiary, specifying:
(1) the proposed Conversion/Continuation Date;
(2) the aggregate amount of Syndicated Loans to be converted
or continued; (1)
(3) whether such Syndicated Loans are Revolving Loans or 364
Day Loans;
(4) the Type of Syndicated Loans resulting from the proposed
conversion or continuation; and
(5) other than in the case of conversions into Base Rate
Loans, the duration of the requested Interest Period.
(3) If the Company that has borrowed Offshore Rate Loans in Dollars
has failed to select a new Interest Period to be applicable to such Offshore
Rate Loans in Dollars upon the expiration of any Interest Period applicable to
such Offshore Rate Loans in Dollars on or prior to the third Business Day in
advance of the expiration of the current Interest Period applicable thereto as
provided in Section 2.4(b), or if any Event of Default then exists, unless the
Required Banks otherwise agree, such Company shall be deemed to have elected to
convert such Offshore Rate Loans in Dollars into Base Rate Loans effective as
of the expiration date of such Interest Period. If the Company to whom any
Offshore Rate Loans in currencies other than Dollars were made has failed to
select a new Interest Period to be applicable to such Offshore Currency Loans
on or prior to the third Business Day in advance of the expiration date of the
current Interest Period applicable thereto as provided in Section 2.4(b), such
Company shall be deemed to have elected to continue such Offshore Currency
Loans in the same currency on the basis of a one month Interest Period.
(4) Upon receipt of an Irrevocable Notice of Syndicated Activity under
Section 2.4(b), the Agent will promptly notify each Bank of its receipt of such
Irrevocable Notice of Syndicated Activity, or, if no notice is provided by the
applicable Company, the Agent will promptly notify each Bank of the details of
any automatic conversion. All conversions and continuations shall be made
ratably according to the respective outstanding principal amounts of the
Syndicated Loans with respect to which the notice was given held by each Bank.
(5) Unless the Required Banks otherwise consent, during the
continuance of a Default or an Event of Default, a Company may not elect to
have a Syndicated Loan converted into or continued as an Offshore Rate Loan.
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(6) After giving effect to any conversion or continuation of
Syndicated Loans, unless the Agent shall otherwise consent, there may not be
more than ten (10) different Interest Periods in effect for all Syndicated
Loans and Bid Loans.
2.5 Utilization of Revolving Commitments in Offshore Currencies. (a)
The Agent will determine the Dollar Equivalent Amount with respect to (i) any
Syndicated Borrowing comprised of Offshore Currency Loans, L/C Obligations or
Interim Note Obligations in Offshore Currencies as of a date two Business Days
prior to the requested Borrowing Date or Issuance Date, respectively, (ii) all
Interim Note Obligations and L/C Obligations in Offshore Currencies then
outstanding as at the last Business Day of each calendar quarter,
(iii)outstanding Offshore Currency Loans having an Interest Period greater than
three (3) months at least once in each three month period, and (iv) outstanding
Offshore Currency Loans as of any date of redenomination of a Loan in an
Applicable Currency into another Applicable Currency or Dollars pursuant to
Section 2.5(c) or Section 5.5 (each such date under clauses (i) through (iv) of
this Section 2.5 a "Valuation Date").
(1) The Companies shall be entitled to request with respect to any
given Revolving Loan hereunder that it be made in any Offshore Currency or
other lawful currency that is approved by all of the Banks and the Agent, and
that in the opinion of all of the Banks and the Agent is at such time freely
traded in the offshore interbank foreign exchange markets and is freely
transferable and freely convertible into Dollars (an "Alternate Currency").
Unless all of the Banks agree to fund the Loan in the requested Alternate
Currency, such Loan may be funded only in Dollars (each of the Banks agreeing
that the Interim Pound Loan to be continued on the Effective Date is funded in
pounds sterling). No Bank shall be under any obligation to fund any Loan or
Loans in any Alternate Currency, whether or not such Alternate Currency is
freely transferable and freely convertible into Dollars. Any agreement by the
Banks to fund a particular Loan or Loans in an Alternate Currency shall not
create any obligation on the part of any Bank to fund any subsequent Loan or
Loans in that or any other Alternate Currency. Each Company shall deliver to
the Agent any request for designation of an Alternate Currency in accordance
with Section 12.2, to be received by the Agent not later than 12:00 noon
(Charlotte time) at least two Business Days in advance of the date of any
Irrevocable Notice of Syndicated Activity hereunder proposed to be made in such
Alternate Currency. Upon receipt of any such request, the Agent will promptly
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notify the Banks thereof, and each Bank shall respond to such request within
one Business Day of receipt thereof. Each Bank may grant or accept such request
in its sole discretion. The Agent shall promptly notify the Companies of the
acceptance or rejection of any such request. The acceptance of any such request
may be conditioned, at the discretion of the Agent, upon such amendments to the
procedures for borrowing with respect to such Alternate Currency as the Agent
may require. If such request is accepted, then the Alternate Currency shall be
deemed to be an "Applicable Currency" for all purposes hereunder with respect
to the Loan for which such request was made.
(2) Notwithstanding anything herein to the contrary, during the
continuance of a Default or Event of Default, all or any part of any
outstanding Offshore Currency Loans shall be redenominated and converted into
Base Rate Loans in Dollars at the end of the existing Interest Period. The
Agent shall promptly notify each Company and each Bank of any such
redenomination and conversion.
2.6 Bid Borrowings. In addition to Syndicated Borrowings pursuant to
Section 2.3, each Bank severally agrees that the Companies may, as set forth in
Section 2.7, from time to time request the Banks prior to the Termination Date
to submit offers to make Bid Loans to the Companies; provided, however, that
the Banks may, but shall have no obligation to, submit such offers and the
Companies may, but shall have no obligation to, accept any such offers, and any
Bank may designate one Designated Bidder to make such offers from time to time
and, if such offers are accepted by the Companies, to make such Bid Loans; and
provided, further, that at no time shall (a) the outstanding aggregate
principal amount of all Bid Loans, plus the outstanding aggregate principal
amount of all Revolving Loans, plus the outstanding L/C Obligations, plus the
Swing Line Outstandings, plus the Interim Note Obligations exceed the combined
Revolving Commitments; or (b) the outstanding aggregate principal amount of all
Bid Loans exceed $525,000,000. All Bid Loans shall be in Dollars for settlement
in the United States. The Agent shall notify each Bank not less frequently than
quarterly of the amount of Bid Loans outstanding based on information provided
to it from the Agent.
2.7 Procedure for Bid Borrowings.
(1) When the Companies wish to request the Banks to submit offers to
make Bid Loans hereunder, they shall transmit to the Agent by telephone call
followed promptly by facsimile transmission a notice with a copy to the Agent
in substantially the form of Exhibit J (a "Competitive Bid Request") so as to
be received no later than 11:00 a.m. (Charlotte time) two Business Days prior
to the date of a proposed Bid Borrowing, specifying:
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(1) the date of such Bid Borrowing, which shall be a Business Day;
(2) the aggregate amount of such Bid Borrowing, which shall be a
minimum amount of $10,000,000 or in multiples of $1,000,000 in
excess thereof; and
(3) the duration of each Interest Period applicable thereto, subject
to the provisions of the definition of "Interest Period" herein.
The Companies may not request or invite Competitive Bids for more than
three Interest Periods in a single Competitive Bid Request and may not request
Competitive Bids more than twice in any period of five consecutive Business
Days.
(2) Upon receipt of a Competitive Bid Request, the Agent will
determine the availability of Bid Borrowings under Section 2.6 and the Agent
will promptly send to the Banks and Designated Bidders by facsimile
transmission an Invitation for Competitive Bids. Each Invitation for
Competitive Bids transmitted by the Agent shall constitute an invitation by the
Companies to each Bank and Designated Bidder to submit Competitive Bids
offering to make the Bid Loans to which such Competitive Bid Request relates in
accordance with this Section 2.7.
(3) (i) Each Bank and Designated Bidder may at its discretion submit a
Competitive Bid containing an offer or offers to make Bid Loans in response to
any Invitation for Competitive Bids. Each Competitive Bid must comply with the
requirements of this Section 2.7(c) and must be submitted to the Agent by
facsimile transmission not later than 10:00 a.m. (Charlotte time) on the
proposed Borrowing Date; provided that, Competitive Bids submitted by the Agent
(or any Affiliate of the Agent) in the capacity of a Bank or a Designated
Bidder must be submitted not later than 9:45 a.m. (Charlotte time) on the
proposed Borrowing Date, and the Agent shall notify the Company thereof
promptly.
(1) Each Competitive Bid shall be in substantially the form of Exhibit
K, specifying therein:
(1) the proposed Borrowing Date;
(2) the principal amount of each Bid Loan for which such
Competitive Bid is being made, which principal amount (x) may be equal
to or less than $525,000,000, (y) must be $5,000,000 or in multiples
of $1,000,000 in excess thereof, and (z) may not exceed the aggregate
principal amount of Bid Loans for which Competitive Bids were
requested;
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(3) the Interest Period;
(4) the rate of interest per annum (rounded upward to the
next 1/1000th of 1%) (the "Absolute Rate") offered for each Bid Loan;
and
(5) the identity of the quoting Bank or Designated Bidder.
A Competitive Bid may contain up to three separate offers by the
quoting Bank or Designated Bidder with respect to each Interest Period
specified in the related Invitation for Competitive Bids.
(2) Any Competitive Bid shall be disregarded if it:
(1) is not substantially in conformity with Exhibit K or does
not specify all of the information required by subsection (c)(ii) of
this Section;
(2) contains qualifying, conditional or similar language;
(3) proposes terms other than or in addition to those set
forth in the applicable Invitation for Competitive Bids; or
(4) arrives after the time set forth in Section 2.7(c)(i).
(3) Notwithstanding anything to the contrary contained in this Section
2.7(c), a Competitive Bid by a Bank may contain, and will not be
disregarded if it does contain, a restriction on the use of
proceeds thereof related to such Bank's subsidiary exercising
powers related to securities; provided that the Companies shall
disregard such Competitive Bid unless the Companies agree to be
bound by such restriction (which agreement shall be manifested by
accepting such Competitive Bid).
(4) Promptly on receipt, but not later than 10:30 a.m. (Charlotte
time) on the proposed Borrowing Date, the Agent shall notify the Companies of
the terms of any Competitive Bid submitted by a Bank or Designated Bidder that
is in accordance with Section 2.7(c) or, if no Competitive Bids have been
submitted, the absence of any Competitive Bids. Subject only to the provisions
of Section 6.3, any Competitive Bid shall be irrevocable.
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(5) Not later than 12:00 noon (Charlotte time) on the proposed
Borrowing Date, the Companies shall notify the Agent of their acceptance or
non-acceptance of the Competitive Bids of which they have received notice
pursuant to Section 2.7(d) or which have been sent to them pursuant to Section
2.7(c). The Companies shall be under no obligation to accept any Competitive
Bid and may choose to reject all or, subject to the remaining provisions of
this paragraph (e), one or more, Competitive Bids. In the case of acceptance,
such notice shall specify the Bid Loan lenders and their respective principal
amounts and the aggregate amount of Competitive Bids for each Interest Period
that are accepted. The Companies may accept any Competitive Bid in whole or in
part; provided that:
(1) the aggregate principal amount of each Bid Borrowing may not
exceed the applicable amount set forth in the related Competitive
Bid Request;
(2) the principal amount of each Bid Borrowing must be $1,000,000 or
in any multiple of $500,000 in excess thereof;
(3) acceptance of Competitive Bids may only be made on the basis of
ascending Absolute Rates within each Interest Period, as the case
may be; and
(4) the Companies may not accept any Competitive Bid that is described
in Section 2.7(c)(iii) (other than to the extent permitted
pursuant to Section 2.7(c)(iv)) or that otherwise fails to comply
with the requirements of this Agreement.
(6) If Competitive Bids are made by two or more Banks or Designated
Bidders with the same Absolute Rates for a greater aggregate principal amount
than the amount in respect of which such Competitive Bids are permitted to be
accepted for the related Interest Period, the principal amount of Bid Loans in
respect of which such Competitive Bids are accepted shall be allocated by the
Agent among such Banks or Designated Bidders in proportion to the aggregate
principal amounts of such Competitive Bids. Determination by the Agent of the
amounts of Bid Loans shall be conclusive in the absence of manifest error.
(g) (i) Agent will promptly notify each Bank or Designated Bidder
having submitted a Competitive Bid if its Competitive Bid has been
accepted or not and, if its offer has been accepted, of the amount of
the Bid Loan or Bid Loans to be made on the date of the Bid Borrowing
together with the Absolute Rate or Rates and the Interest Period or
the Interest Periods with respect thereto.
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(ii) Each Bank or Designated Bidder which has received notice
pursuant to Section 2.7(g)(i) that its Competitive Bid has been
accepted shall, subject to the satisfaction of all conditions
precedent, make the amounts of such Bid Loans available to the Agent
for the account of the Companies by 2:00 p.m. (Charlotte time) on the
Borrowing Date.
(iii) Promptly following each Bid Borrowing, the Agent shall
notify each Bank and each Designated Bidder, of the ranges of
Competitive Bids submitted and the highest and lowest Absolute Rates
accepted for each Interest Period requested by the Companies and the
aggregate amount borrowed pursuant to such Bid Borrowing.
(iv) From time to time, the Companies and the Banks and the
Designated Bidders shall furnish such information to the Agent as the
Agent may request relating to the making of Bid Loans, including the
amounts, Absolute Rates, Borrowing Dates and maturities thereof, for
purposes of the allocation of amounts received from the Companies for
payment of all amounts owing hereunder.
2.8 Voluntary Termination or Reduction of Commitments. The Companies,
acting jointly, may, upon not less than five Business Days' prior notice to the
Agent, permanently reduce or terminate the Revolving Commitments or 364 Day
Commitments, or both, by (a) an aggregate minimum Dollar Equivalent Amount of
$10,000,000 or any Dollar Equivalent Amount multiple of $1,000,000 in excess
thereof or (b) such other amount as represents the entire unused amount of
Revolving Commitments or 364 Day Commitments, or both; unless, after giving
effect thereto and to any prepayments of (i) Revolving Loans made on the
effective date thereof, (x) the Dollar Equivalent Amount of the principal
amount of the Revolving Loans, Bid Loans and Swing Line Outstandings, and the
Dollar Equivalent Amount of the L/C Obligations and Interim Note Obligations
then outstanding would exceed the amount of the combined Revolving Commitments
then in effect, or (y) the Dollar Equivalent Amount of the L/C Obligations then
outstanding would exceed the L/C Commitment or (ii) 364 Day Loans made on the
effective date thereof, the principal amount of 364 Day Loans Outstanding would
exceed the combined 364 Day Commitments. Once reduced in accordance with this
Section, neither the Revolving Commitments nor the 364 Day Commitments may be
increased. Any reduction of the Revolving Commitments or 364 Day Commitments
shall be applied to each Bank according to its Pro Rata Share. All accrued
commitment fees to, but not including, the effective date of any reduction or
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termination of Revolving Commitments or 364 Day Commitments, shall be paid on
the effective date of such reduction or termination. The Agent shall promptly
notify each Bank of the Agent's receipt of and the contents of any notice
received by it pursuant to this Section 2.8.
2.9 Optional Prepayments. (a) Subject to Section 5.5, each Company
may, at any time or from time to time, upon notice to the Agent, ratably prepay
Syndicated Loans, L/C Borrowings or Interim Note Borrowings in whole or in
part, in the Minimum Tranche (other than in the case of an L/C Borrowing or
Interim Note Borrowing where there shall be no minimum). The Company prepaying
such Loans shall deliver a notice of prepayment to be received by the Agent not
later than 11:00 a.m. (Charlotte time) (i) at least three Business Days in
advance of the prepayment date if the Syndicated Loans to be prepaid are
Offshore Rate Loans, (ii) at least one Business Day in advance of the
prepayment date if the Loans to be prepaid are Base Rate Loans, if settlement
is to be made outside the United States, and (iii) on the prepayment date if
the Syndicated Loans, L/C Borrowings or Interim Note Borrowings to be prepaid
are Base Rate Loans, if settlement is to be made in the United States. Such
notice of prepayment shall specify the date and amount of such prepayment and
the Type(s) of Syndicated Loans, L/C Borrowings or Interim Note Borrowings and
the Applicable Currency to be prepaid. Such notice shall not thereafter be
revocable by the Companies and the Agent will promptly notify each Bank of its
receipt of any such notice, and of such Bank's Pro Rata Share of such
prepayment. If such notice is given by a Company, such Company shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to each
such date on the amount prepaid and any amounts required pursuant to Section
5.5.
(b) Bid Loans may not be voluntarily prepaid, except with the consent
of the Bank holding the applicable Bid Loan and upon payment of any additional
costs associated with such prepayment, such costs to be determined by the Bank
making such Bid Loan.
(c) Any prepayment under this Section 2.9 shall be made together with
any amounts required to be paid in connection with such prepayment under
Section 5.5.
2.10 Use of Proceeds. The proceeds of Revolving Loans and 364 Day
Loans shall be used as follows: (i) up to $175,000,000 to purchase the voting
shares of Norrell, (ii) to repay the Norrell Indebtedness in full, (iii) to pay
expenses associated with the Acquisition of Norrell and (iv) the balance for
working capital and general corporate purposes, including the continuation of
Loans outstanding under the Original Agreement and Existing Letters of Credit,
and Acquisitions to the extent permitted herein.
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2.11 Currency Exchange Fluctuations. (a) If on any Valuation Date the
Agent shall have determined that the aggregate Dollar Equivalent Amount of the
principal amount of all Revolving Loan Outstandings exceeds the combined
Revolving Loan Commitments of the Banks, due to a change in applicable rates of
exchange between Dollars and Offshore Currencies, then the Agent shall give
notice to each Company and upon notice thereof by the Agent to each Company,
each Company agrees to make prepayments, on the Business Day after notice from
the Agent, of Revolving Loans (and if required under Section 3.7, Cash
Collateralize outstanding Letters of Credit and the Interim Note Guarantee)
such that, after giving effect to such prepayment or Cash Collateralization,
the aggregate Dollar Equivalent Amount of all Revolving Loan Outstandings (net
of any Cash Collateralization) does not exceed the combined Revolving
Commitments, it being understood that a prepayment in the amount by which the
Dollar Equivalent Amount of Revolving Loan Outstandings exceeds the combined
Revolving Commitments need not equal or exceed the Minimum Tranche. Any
prepayment under this Section shall be made together with any amounts required
pursuant to Section 5.5.
(b) Without limiting the foregoing provisions of this Section 2.11, in
the event that the Agent shall determine (in accordance with the valuation
procedures provided for in Section 2.5) at any time that the aggregate Dollar
Equivalent Amount of all Revolving Loan Outstandings in Offshore Currencies
shall exceed the Total Offshore Currency Sublimit by an amount in excess of
$10,000,000, then, upon notice thereof by the Agent to each Company, each
Company agrees thereupon to make prepayments, on not later than the third
Business Day after notice from the Agent, of Revolving Loan Outstandings (and
if required under Section 3.7, Cash Collateralize outstanding Letters of Credit
and Interim Note Guarantee) such that, after giving effect to such prepayment
or Cash Collateralization, the aggregate Dollar Equivalent Amount of all
Revolving Loan Outstandings (net of any Cash Collateralization) in Offshore
Currencies does not exceed the lesser of Total Offshore Currency Sublimit or
the Revolving Commitments of all Banks, it being understood that (a) a
prepayment in the amount by which the Dollar Equivalent Amount of Revolving
Loan Outstandings in Offshore Currencies exceeds the Total Offshore Currency
Sublimit need not equal or exceed the Minimum Tranche, and (b) no such
prepayment shall be required unless the excess referred to above shall exceed
$10,000,000. Any prepayment under this Section shall be made together with any
amounts required pursuant to Section 5.5.
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2.12 Repayment. (a) The Companies shall repay to the Banks on the
Termination Date the aggregate principal amount of Loans outstanding on such
date.
(b) The Companies shall repay each Bid Loan on the last day of the
relevant Interest Period.
(c) Each payment required to be made under clause (a) of this Section
2.12 shall, if made in an Offshore Currency, be accompanied by such additional
amounts of such Offshore Currency, or additional Dollars, such that the amount
of such Offshore Currency and Dollars so paid shall in the aggregate equal the
Dollar Equivalent Amount (determined as of such date) of the payment required
to be paid on such date.
2.13 Interest.
(a) Each Syndicated Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a rate per annum
equal to the Offshore Rate or the Base Rate, as the case may be (and subject to
the Companies' right to convert to other Types of Loans under Section 2.4),
plus the Applicable Margin. Each Bid Loan shall bear interest on the
outstanding principal amount thereof from the relevant Borrowing Date to the
last day of the applicable Interest Period at a rate per annum equal to the
Absolute Rate.
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Loans under Section 2.9 or 2.11 for the portion of the Loans so prepaid and
upon payment (including prepayment) in full thereof and, during the existence
of any Event of Default, interest shall be paid on demand of the Agent at the
request or with the consent of the Required Banks.
(c) Notwithstanding subsection (a) of this Section or any other
provision of the Loan Documents, while any Event of Default exists or after
acceleration, interest shall accrue (after as well as before entry of judgment
thereon to the extent permitted by law) on the principal amount of all
outstanding Obligations, at a rate per annum which is determined by adding 2%
per annum to the Applicable Margin then in effect for such Loans and, in the
case of Obligations not subject to an Applicable Margin, at a rate per annum
equal to the Base Rate (or in the case of Bid Loans, the Absolute Rate) plus
2%.
(d) Anything herein to the contrary notwithstanding, the obligations
of the Companies to any Bank or Designated Bidder hereunder shall be subject to
the limitation that payments of interest shall not be required for any period
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for which interest is computed hereunder, to the extent (but only to the
extent) that contracting for or receiving such payment by such Bank or
Designated Bidder would be contrary to the provisions of any law applicable to
such Bank or Designated Bidder limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Bank or Designated
Bidder, and in such event the Companies shall pay such Bank interest at the
highest rate permitted by applicable law.
2.14 Fees.
(a) Arrangement and Agency Fees. The Companies jointly and severally
shall pay the fees to the Arranger, NationsBank and the Agent, as required by
the letter agreement ("Fee Letter") between each Company and the Arranger and
the Agent (or an affiliate of the Agent) each dated March 25, 1999, as amended
or supplemented from time to time, or as may otherwise be agreed to in a
separate writing or writings executed by the Companies and the Agent shall pay
to each Bank such amount relating to certain of such fees as previously agreed
to by the Agent and such Bank.
(b) Facility Fees. The Companies jointly and severally shall pay to
the Agent, for the pro rata benefit of the Banks based upon such Bank's
Commitment the following facility fees:
(i) a facility fee equal to the Applicable Fee Percentage of
the 364 Day Commitment of each Bank; and
(ii) a facility fee equal to the Applicable Fee Percentage of
the Revolving Commitment of each Bank.
Such facility fees shall accrue from the Effective Date to the
Termination Date and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December commencing on
September 30, 1999 for the quarter (or shorter period, as applicable) ending
the prior Business Day and on the Termination Date; provided that, in
connection with any reduction or termination of Commitments under Section 2.8,
the accrued facility fee calculated for the period ending on such date shall
also be paid on the date of such reduction or termination, with the following
quarterly payment being calculated on the basis of the period from such
reduction or termination date to such quarterly payment date. The facility fees
provided in this subsection shall accrue at all times after the date hereof,
including at any time during which one or more conditions in Article V are not
met.
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2.15 Computation of Fees and Interest.
(a) All computations of interest for Base Rate Loans when the Base
Rate is determined by NationsBank's "prime rate" and for Offshore Currency
Loans shall be made on the basis of a year of 365 or 366 days when such basis
is customary, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed. Interest and fees shall accrue during each period
during which interest or such fees are computed from the first day thereof to
the last day thereof.
(b) Each determination of an interest rate or a Dollar Equivalent
Amount by the Agent shall be conclusive and binding on each Company, the Banks
and the Designated Bidders in the absence of manifest error.
(c) The Applicable Margin and the Applicable Fee Percentage shall be
adjusted, to the extent applicable, on the earlier of the first Business Day
next following receipt by the agent of the Compliance Certificate required
pursuant to Section 8.1(c) or 60 days (or, in the case of the last fiscal
quarter of any year, 110 days) after the end of each fiscal quarter, based on
the Consolidated Total Leverage Ratio as of the last day of such fiscal quarter
and measured for the four fiscal quarters then ended; it being understood that
if Interim fails to deliver the financial statements required by Section 8.1(a)
or 8.1(b), as applicable, and the related Compliance Certificate required by
Section 8.1(c), by the 60th day (or, if applicable, the 110th day) after any
fiscal quarter, the Applicable Margin for Revolving Loans shall be 1.20% and
for 364 Day Loans shall be 1.25% and the Applicable Fee Percentage for
Revolving Commitments shall be 0.30% and for 364 Day Commitments shall be 0.25%
until such financial statements and Compliance Certificate are delivered. The
Applicable Margin shall be 1.00% and 1.05% for Revolving Loans and 364 Day
Loans, respectively, and the Applicable Fee Percentage shall be 0.25% and 0.20%
for Revolving Commitments and 364 Day Commitments, respectively, until the
Business Day next following the date of receipt by the Agent of the Compliance
Certificate and related financial statements of Interim and its Subsidiaries
for the fiscal quarter ending September 24, 1999.
2.16 Payments by the Companies.
(a) Except as otherwise expressly provided herein, all payments by any
Company shall be made to the Agent for the account of the Banks and the
Designated Bidders, or the Agent, as the case may be, at the Agent's Payment
Office; and with respect to the principal of, interest on, and any other
amounts relating to, any Offshore Currency Loan, shall be made to the Agent in
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the Offshore Currency in which such Loan is denominated or payable, and, with
respect to all other amounts payable hereunder, shall be made in Dollars. Such
payments shall be made in Same Day Funds, and (i) in the case of Offshore
Currency payments, no later than such time on the dates specified herein as may
be determined by the Agent to be necessary for such payment to be credited on
such date in accordance with normal banking procedures in the place of payment,
and (ii) in the case of any Dollar payments, no later than 2:00 p.m. (Charlotte
time) on the date specified herein. The Agent will promptly distribute to each
Bank and Designated Bidder its Pro Rata Share (or other applicable share as
expressly provided herein) of such amounts, in like funds as received. Any
payment which is received by the Agent later than 2:00 p.m. (Charlotte time),
or later than the time specified by the Agent as provided in clause (i) above
(in the case of Offshore Currency payments), shall be deemed to have been
received on the following Business Day and any applicable interest or fee shall
continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
(c) Unless the Agent receives notice from a Company prior to the date
on which any payment is due to the Banks that such Company will not make such
payment in full as and when required, the Agent may assume that such Company
has made such payment in full to the Agent on such date in Same Day Funds and
the Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Bank or Designated Bidder on such due date an amount equal
to the amount then due such Bank or Designated Bidder. If and to the extent a
Company has not made such payment in full to the Agent, each Bank or Designated
Bidder shall repay to the Agent on demand such amount distributed to such Bank
or Designated Bidder, together with interest thereon at the Federal Funds Rate
or, in the case of a payment in an Offshore Currency, the Overnight Rate as
determined by the Agent and specified to such Bank for amounts in such Offshore
Currency, for each day from the date such amount is distributed to such Bank or
Designated Bidder until the date repaid.
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2.17 Payments by the Banks to the Agent.
(a) Unless the Agent receives notice from a Bank on or prior to the
Effective Date or, with respect to any Syndicated Borrowing, after the
Effective Date, at least two Business Days prior to the date of such Borrowing,
that such Bank will not make available as and when required hereunder to the
Agent for the account of the applicable Company the amount of that Bank's Pro
Rata Share of such Syndicated Borrowing, the Agent may assume that each Bank
has made such amount available to the Agent in Same Day Funds on such Borrowing
Date and the Agent may (but shall not be so required), in reliance upon such
assumption, make available to such Company on such date a corresponding amount.
If and to the extent any Bank shall not have made its full amount available to
the Agent in Same Day Funds and the Agent in such circumstances has made
available to the applicable Company such amount, that Bank shall on the
Business Day following such Borrowing Date make such amount available to the
Agent, together with interest at the Federal Funds Rate or, in the case of any
Syndicated Borrowing consisting of Offshore Currency Loans, the Overnight Rate
specified to such Bank for amounts in such Offshore Currency plus any
reasonable administrative fee charged by the Agent. A notice of the Agent
submitted to any Bank with respect to amounts owing under this Section 2.17(a)
shall be conclusive, absent manifest error. If such amount is so made
available, such payment to the Agent shall constitute such Bank's Loan on the
applicable Borrowing Date for all purposes of this Agreement. If such amount is
not made available to the Agent on the Business Day following the applicable
Borrowing Date, the Agent will notify each Company of such failure to fund and,
upon demand by the Agent, the Companies shall pay, within one (1) Business Day,
such amount to the Agent for the Agent's account, together with interest
thereon for each day elapsed since the date of such Syndicated Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
(b) The failure of any Bank to make any Syndicated Loan on any
Borrowing Date shall not relieve any other Bank of any obligation hereunder to
make a Syndicated Loan on such Borrowing Date, but neither the Agent nor any
Bank shall be responsible for the failure of any other Bank to make the Loan to
be made by such other Bank on any Borrowing Date.
2.18 Sharing of Payments Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Syndicated Loans made
by it any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Banks such participations in the
Syndicated Loans made by them as shall be necessary to cause such purchasing
Bank to share the excess payment pro rata with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
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the purchasing Bank, such purchase shall to that extent be rescinded and each
other Bank shall repay to the purchasing Bank the purchase price paid therefor,
together with an amount equal to such paying Bank's ratable share (according to
the proportion of (i) the amount of such paying Bank's required repayment to
(ii) the total amount so recovered from the purchasing Bank) of any interest or
other amount paid or payable by the purchasing Bank in respect of the total
amount so recovered. Each Company agrees that any Bank so purchasing a
participation from another Bank may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 12.9) with respect to such participation as fully as if such Bank
were the direct creditor of such Company in the amount of such participation.
The Agent will keep records (which shall be conclusive and binding in the
absence of manifest error) of participations purchased under this Section and
will in each case notify the Banks following any such purchases or repayments.
2.19 Swing Line. (a) Notwithstanding any other provision of this
Agreement to the contrary, in order to administer the Revolving Commitments in
an efficient manner and to minimize the transfer of funds between the Agent and
each Bank, NationsBank shall make available Swing Line Loans in Dollars to each
of the Companies, jointly and severally, from the Effective Date to the
Termination Date (or such earlier date as the Revolving Commitments of all
Banks shall have terminated in accordance with the terms hereof). NationsBank
shall not make any Swing Line Loan pursuant hereto (i) if to the actual
knowledge of NationsBank the Companies are not in compliance with all the
conditions to the making of Revolving Loans set forth in this Agreement, (ii)
if after giving effect to such Swing Line Loan, the Swing Line Outstandings
would exceed $40,000,000, or (iii) if after giving effect to such Swing Line
Loan, to the actual knowledge of NationsBank the Dollar Equivalent Amount of
Revolving Loan Outstandings would exceed the aggregate Revolving Commitments.
The Companies may borrow, repay and reborrow under this Section 2.19. Unless
notified to the contrary by NationsBank, borrowings under the Swing Line shall
be made in integral multiples of $100,000, upon written request by
telefacsimile transmission, effective upon receipt, by a Responsible Officer
made to NationsBank not later than 1:00 P.M. on the Business Day of the
requested borrowing. Each such Swing Line Borrowing Notice shall specify the
amount of the borrowing and the date of borrowing, and shall be in the form of
Exhibit L, with appropriate insertions. Unless notified to the contrary by
NationsBank, each repayment of a Swing Line Loan shall be in an amount which is
an integral multiple of $100,000 or the aggregate amount of all Swing Line
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Outstandings. If any Company instructs NationsBank to debit any demand deposit
account of such Company in the amount of any payment with respect to a Swing
Line Loan, or NationsBank otherwise receives repayment, after 1:00 P.M. on a
Business Day, such payment shall be deemed received on the next Business Day.
(b) Swing Line Loans shall bear interest at the Base Rate or at such
other rate or rates as the applicable Company and NationsBank may agree from
time to time, the interest payable on Swing Line Loans is solely for the
account of NationsBank, and all accrued and unpaid interest on Swing Line Loans
shall be payable on the dates and in the manner provided in this Article II
with respect to interest on Base Rate Loans (except as NationsBank and the
applicable Company may otherwise agree in connection with any particular Swing
Line Loan). The Swing Line Loans shall be evidenced by the Swing Line Note.
(c) Upon the making of a Swing Line Loan in accordance with this
Section 2.19, each Bank shall be deemed to have purchased from NationsBank a
Swing Line Participation therein in an amount equal to that Bank's Pro Rata
Share of such Swing Line Loan. For purposes of Section 2.1(a), each Swing Line
Loan shall be deemed to utilize the Revolving Commitment of each Bank by an
amount equal to its Pro Rata Share of such Loan. Upon demand made by
NationsBank, each Bank shall, according to its Pro Rata Share of such Swing
Line Loan, promptly provide to NationsBank its purchase price therefor in an
amount equal to its Swing Line Participation and, upon any such demand by
NationsBank, such Swing Line Loan shall without further action be converted to
a Base Rate Loan. Any such payment made by a Bank pursuant to demand of
NationsBank of the purchase price of its Swing Line Participation shall be
deemed (i) provided that the conditions to making Revolving Loans shall be
satisfied, a Base Rate Loan under Section 2.1(a) until the Companies convert
such Base Rate Loan in accordance with the terms of Section 2.4, and (ii) in
all other cases, the funding by each Bank of the purchase price of its Swing
Line Participation in such Swing Line Loan. The obligation of each Bank to so
provide its purchase price to NationsBank shall be absolute and unconditional
and shall not be affected by the occurrence of a Default or Event of Default or
any other occurrence or event. Upon (and only upon) receipt by NationsBank of
funds from the Companies in repayment of principal of or interest on Swing Line
Loans with respect to which any Bank has funded the purchase of its
participation in accordance with clause (ii) of the fourth sentence of Section
2.19(c), NationsBank will promptly pay over to the Agent (in the kind of funds
so received or applied) for the account of each such Bank (other than
NationsBank) in accordance with their Pro Rata Shares the aggregate amount of
such payment as shall equal the aggregate amount of the Pro Rata Shares of such
payment of each such Bank (other than NationsBank).
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The Companies, at their option and subject to the terms hereof, may
request a Revolving Borrowing pursuant to and of a denomination permitted under
Section 2.1(a) in an amount sufficient to repay Swing Line Outstandings on any
date and the Agent shall provide from the proceeds of such Borrowing to
NationsBank the amount necessary to repay such Swing Line Outstandings (which
NationsBank shall then apply to such repayment) and credit any balance of such
Borrowing in immediately available funds in the manner directed by the
Companies. The Swing Line shall continue in effect until the Termination Date
(or such earlier date as the Revolving Commitments of all Banks shall have
terminated in accordance with the terms hereof), at which time all Swing Line
Outstandings and accrued interest thereon shall be due and payable in full.
2.20 Designation of Borrowing Subsidiaries. Interim may from time to
time designate any Foreign Subsidiary of Interim which has not joined in the
execution of this Agreement as a "Borrowing Subsidiary" hereunder by causing
such Foreign Subsidiary to execute and deliver a duly completed Assumption
Letter in the form attached hereto as Exhibit M to the Administrative Agent,
with the written consent of Interim at the foot thereof. Upon such execution,
delivery and consent such Foreign Subsidiary shall for all purposes be a party
hereto as a Borrowing Subsidiary as fully as if it had executed and delivered
this Agreement. So long as the principal of and interest on all Borrowings made
to any Borrowing Subsidiary under this Agreement shall have been paid in full
and all other obligations of such Borrowing Subsidiary shall have been fully
performed, such Borrowing Subsidiary may, by not less than five Business Days'
prior notice to the Administrative Agent (which shall promptly notify the Banks
thereof), terminate its status as a "Borrowing Subsidiary" hereunder.
2.21 364 Day Extension and Term Loan Option.
(a) With the consent of the Banks (the "Consenting Banks") having more
than fifty percent (50%) of the aggregate Commitments of all Banks (any Bank
not so consenting being referred to as a "Non-Consenting Bank"), at each 364
Day Extension Date the Companies can elect to extend the 364 Day Termination
Date for an additional period of 364 days commencing on such 364 Day Extension
Date; provided, however, that in no event shall the 364 Day Termination Date be
extended beyond the Termination Date.
(b) Interim shall notify the Banks of its request for an extension by
delivering to the Agent notice of such request signed by a Responsible Officer
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not more than sixty (60) days nor less than forty-five (45) days prior to the
applicable 364 Day Extension Date. Notice of receipt of such request shall be
provided by the Agent to the Banks. The Agent shall notify the Companies in
writing not less than thirty (30) days nor more than forty-five (45) days prior
to the applicable 364 Day Extension Date of the decision of the Banks. Failure
by any Bank to respond to a request for an extension shall constitute a refusal
of such Bank to give its consent to such extension. Failure by the Agent to
give such notice to the Companies as a result of not receiving the consent of
Banks having more than fifty percent (50%) of the aggregate Commitments of all
Banks to such extension shall constitute refusal by the Banks to extend the 364
Day Termination Date.
(c) If less than all of the Banks consent to any such request which
has been approved pursuant to subsection (a) of this Section 2.21, the
Companies shall arrange not less than fifteen (15) days prior to the 364 Day
Termination Date (the "Replacement Date") for one or more Consenting Banks, or
for one or more other banks or financial institutions complying with the
requirements set forth in Section 12.8 (any of the foregoing referred to as an
"Assuming Bank"), as of the 364 Day Extension Date to effect an assignment of
all of the 364 Day Commitment (along with an equivalent pro rata portion of the
Revolving Commitment) of Non-Consenting Banks for a purchase price equal to the
aggregate principal balance of 364 Day Loans and Revolving Loans then owing to
the Non-Consenting Banks, plus accrued interest and fees owing to the
Non-Consenting Bank, as well as any amounts payable under Section 5.5. The
Companies shall deliver written notice to the Agent and each Consenting Bank of
such arrangement with any Assuming Bank not less than fifteen (15) days prior
to the 364 Day Termination Date.
(d) On each 364 Day Extension Date, each Assuming Bank shall become a
Bank for all purposes under this Agreement and the other Loan Documents without
any further acknowledgment by or the consent of the other Banks; provided,
however, that the Agent shall have received not less than ten (10) days prior
to such 364 Day Extension Date an Assignment and Acceptance, effective as of
such 364 Day Extension Date, from each Assuming Bank duly executed by such
Assuming Bank and the applicable Non-Consenting Bank with respect to both the
364 Day Commitment and the Revolving Commitment of such Non-Consenting Bank.
The aggregate 364 Day Commitments on the 364 Day Extension Date shall be equal
to the sum, without duplication, of the 364 Day Commitments of each Assuming
Bank and each Consenting Bank.
(e) If on any 364 Day Extension Date the Companies have not so elected
to extend the 364 Day Termination Date then in effect, or if Consenting Banks
with more than fifty percent (50%) of the aggregate Commitments have not
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consented to such extension, or if the Companies shall not have satisfied
requirements of clause (c) of this Section 2.21 with respect to Non-Consenting
Banks, then as of such 364 Day Termination Date, except as provided otherwise
in, and subject to the Companies' compliance with the terms of, Section 2.21(f)
below, (i) the aggregate 364 Day Commitments shall be reduced to zero, and (ii)
all 364 Day Loan Outstandings shall be due and payable in full.
(f) If with respect to any 364 Day Extension Date the Companies do not
so elect to extend the 364 Day Termination Date then in effect, or if
Consenting Banks with more than fifty percent (50%) of the aggregate
Commitments have not consented to such extension, then not less than fifteen
(15) days prior to the 364 Day Termination Date, the Companies can elect to
convert any or all 364 Day Loan Outstandings as of such date into a term loan
on such date in the original principal amount equal to such 364 Day Loan
Outstandings. 364 Day Loan Outstandings so converted by the Companies in
accordance with this Section 2.21 shall be referred to as the "Term Loans." The
aggregate 364 Day Commitment shall be permanently reduced on the 364 Day
Termination Date to an amount equal to the aggregate principal amount of the
Term Loans on such date. The Term Loans shall be repaid upon the earlier of one
year following the 364 Day Termination or the Termination Date. The Term Loans
may be comprised of Base Rate Loans and Offshore Rate Loans as the borrowing
Company may elect in accordance with the provisions of this Article II for 364
Day Loans. The Term Loans shall bear interest on the same terms as the 364 Day
Loans prior to the conversion to Term Loans until the Continuation or
Conversion thereof pursuant to Section 2.9 hereof; provided, however, that on
the effective date of conversion to Term Loans the Applicable Margin for
Offshore Rate Loans shall be increased by .125% at all times thereafter.
Amounts repaid or prepaid on the Term Loans may not be reborrowed, and the 364
Day Commitment shall be permanently reduced by any such amounts. Each Bank
shall have its Pro Rata Share of the Term Loans.
(g) If on the 364 Day Termination Date the Company does not so elect
to convert all of 364 Day Loan Outstandings as of such date to Term Loans as
described in (f) above, then on the 364 Day Termination Date, (i) all 364 Day
Loan Outstandings as of such date which are not so converted shall be due and
payable in full and (ii) the aggregate 364 Day Commitments shall be reduced to
the amount, if any, of 364 Day Loan Outstandings so converted to Term Loans.
2.22 The Euro.
(a) If, as a result of the implementation of the EMU, (i) any currency
available for borrowing under this Agreement ( a "national currency") ceases to
be lawful currency of the state issuing the same and is replaced by the euro or
(ii) any national currency and the euro are at the same time both recognized by
the central bank or comparable governmental authority of the state issuing such
currency as lawful currency of such state, then any amount payable hereunder by
any party hereto in such national currency (including, without limitation, any
Loan to be made under this Agreement) shall instead be payable in the euro and
the amount so payable shall be determined by redenominating or converting such
amount into the euro at the exchange rate officially fixed by the European
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Central Bank for the purpose of implementing the EMU, provided, that to the
extent any EMU legislation provides that an amount denominated either in the
euro or in the applicable national currency can be paid either in euros or in
the applicable national currency, each party to this Agreement shall be
entitled to pay or repay such amount in euros or in the applicable national
currency. Prior to the occurrence of the event or events described in clause
(i) or (ii) of the preceding sentence, each amount payable hereunder in any
such national currency will, except as otherwise provided herein, continue to
be payable only in that national currency.
(b) In addition, this Agreement (including, without limitation, the
definition of Offshore Rate) will be amended to the extent determined by the
Agent and Required Banks (acting reasonably and in consultation with Interim)
to be necessary to reflect such implementation of the EMU and change in
currency and to put the Banks and the Companies in the same position, so far as
possible, that they would have been in if such implementation and change in
currency had not occurred. Except as provided in the foregoing provisions of
this Section, no such implementation or change in currency nor any economic
consequences resulting therefrom shall (i) give rise to any right to terminate
prematurely, contest, cancel, rescind, alter, modify or renegotiate the
provisions of this Agreement or (ii) discharge, excuse or otherwise affect the
performance of any obligations of the Companies or the Banks under this
Agreement, any Notes or other Loan Documents.
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ARTICLE III
THE LETTERS OF CREDIT
3.1 The Letter of Credit Facilities.
(a) On the terms and conditions set forth herein (i) the Issuing Bank
agrees (A) from time to time on any Business Day during the period from the
Effective Date to the Termination Date (or such earlier date as the Revolving
Commitments of all Banks shall have terminated in accordance with the terms
hereof) to Issue Letters of Credit for the account of a Company, and to amend
or renew Letters of Credit previously issued by it, in accordance with Sections
3.2(c) and 3.2(d), and (B) to honor drafts drawn under and in strict compliance
with the terms and conditions of Letters of Credit; and (ii) the Banks
severally agree to participate in Letters of Credit Issued for the account of a
Company; provided, that the Issuing Bank shall not be obligated to Issue, and
no Bank shall be obligated to participate in, any Letter of Credit if, as of
the date of Issuance of such Letter of Credit (the "Issuance Date") (1) the
Dollar Equivalent Amount of the Revolving Loan Outstandings exceeds or would
exceed the combined Revolving Commitments, or (2) the Dollar Equivalent Amount
of the L/C Obligations exceeds or would exceed the L/C Commitment, or (3) the
Dollar Equivalent Amount of all Revolving Loan Outstandings in Offshore
Currencies exceeds or would exceed the Total Offshore Currency Sublimit. Within
the foregoing limits, and subject to the other terms and conditions hereof, a
Company's ability to obtain Letters of Credit shall be fully revolving and,
accordingly, a Company may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit which have expired or which have been drawn
upon and reimbursed.
(b) The Issuing Bank shall not issue any Letter of Credit if, to its
knowledge:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain the Issuing Bank from Issuing such Letter of Credit, or any
Requirement of Law applicable to the Issuing Bank shall prohibit or
any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over the Issuing Bank
shall prohibit, or request that the Issuing Bank refrain from, the
Issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Bank with respect to such
Letter of Credit any restriction, reserve or capital requirement (for
which the Issuing Bank is not otherwise compensated hereunder) not in
effect on the Closing Date, or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which the Issuing Bank in good faith deems material
to it;
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(ii) the Issuing Bank has received written notice from any
Bank, the Agent or a Company, or has actual knowledge, on or prior to
the Business Day prior to the requested date of Issuance of such
Letter of Credit, that one or more of the applicable conditions
contained in Article VI is not then satisfied;
(iii) the expiry date of any requested Letter of Credit is
more than one year after the date of Issuance or is after the
Termination Date;
(iv) any requested Letter of Credit does not provide for
drafts, or is not otherwise in form and substance acceptable to the
Issuing Bank, or the Issuance of a Letter of Credit shall violate any
applicable policies of the Issuing Bank;
(v) any Letter of Credit is for the purpose of supporting the
issuance of any letter of credit by any other Person; or
(vi) such Letter of Credit is in a face amount less than the
Dollar Equivalent Amount of $1,000,000 (or such other lesser amount as
agreed to by the Issuing Bank) or denominated in a currency other than
Dollars or Offshore Currencies.
3.2 Issuance, Amendment and Renewal of Letters of Credit.
(a) Each Letter of Credit shall be Issued upon the irrevocable written
request of a Company and Interim, respectively, received by the Issuing Bank
three Business Days prior to the proposed date of Issuance. Each such request
for Issuance of a Letter of Credit shall be by facsimile, confirmed immediately
in an original writing, in the form of an L/C Application, and shall specify in
form and detail satisfactory to the Issuing Bank: (i) the Company on the
application of which such Letter of Credit is being Issued; (ii) the Applicable
Currency; (iii) the proposed date of Issuance of such Letter of Credit (which
shall be a Business Day); (iv) the face amount of such Letter of Credit; (v)
the expiry date of such Letter of Credit; (vi) the name and address of the
beneficiary thereof; (vii) the documents to be presented by the beneficiary of
such Letter of Credit in case of any drawing thereunder; (viii) the full text
of any certificate to be presented by the beneficiary in case of any drawing
thereunder; and (ix) such other matters as the Issuing Bank may reasonably
require.
(b) Two Business Days prior to the Issuance of any Letter of Credit,
the Issuing Bank shall confirm with the Agent the availability of the
Commitments with respect to such Issuance and that the conditions specified in
Article VI have been satisfied. Subject to the terms and conditions hereof, the
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Issuing Bank shall, on the requested date, Issue a Letter of Credit for the
account of the applicable Company in accordance with the Issuing Bank's usual
and customary business practices.
(c) From time to time while a Letter of Credit is outstanding and
prior to the Termination Date (or such earlier date as the Revolving
Commitments of all Banks shall have terminated in accordance with the terms
hereof), the Issuing Bank shall, upon the written request of a Company (with a
copy sent to the Agent) three Business Days prior to the proposed date of
amendment, amend any Letter of Credit Issued by it. Each such request for
amendment of a Letter of Credit shall be made in writing in the form of an L/C
Amendment Application and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the Letter of Credit to be amended; (ii) the proposed date of
amendment of such Letter of Credit (which shall be a Business Day); (iii) the
nature of the proposed amendment; and (iv) such other matters as the Issuing
Bank may reasonably require. The Issuing Bank shall be under no obligation to
amend any Letter of Credit if: (A) the Issuing Bank would have no obligation at
such time to Issue such Letter of Credit in its amended form under the terms of
this Agreement; or (B) the beneficiary of such Letter of Credit does not accept
the proposed amendment to such Letter of Credit. The Agent will promptly notify
the Banks of a request of Issuance or renewal or amendment of a Letter of
Credit.
(d) The Issuing Bank and the Banks agree that, while a Letter of
Credit is outstanding and prior to the Termination Date (or such earlier date
as the Revolving Commitments of all Banks shall have terminated in accordance
with the terms hereof), the Issuing Bank shall be entitled to authorize the
automatic renewal of any Letter of Credit Issued by it unless (A) the Issuing
Bank would have no obligation at such time to Issue or amend such Letter of
Credit in its renewed form under the terms of this Agreement; (B) the
beneficiary of such Letter of Credit does not accept the proposed renewal of
such Letter of Credit; or (C) the Issuing Bank receives written request from a
Company (with a copy sent to the Agent) three Business Days prior to the
proposed date of notification of non-renewal, not to renew any Letter of
Credit. Each such request for non-renewal of a Letter of Credit shall be made
in writing and shall specify (i) the Letter of Credit number; (ii) the
beneficiary's name; and (iii) that the Issuing Bank is instructed to notify the
beneficiary of non-renewal.
(e) The Issuing Bank shall deliver to the Agent any notices of
termination or other communications to any Letter of Credit beneficiary or
transferee, and take any other action as necessary or appropriate, at any time
and from time to time, in order to cause the expiry date of such Letter of
Credit to be a date not later than the Termination Date.
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(f) This Agreement shall control in the event (and to the extent) of
any conflict with any L/C-Related Document (other than any Letter of Credit).
(g) The Issuing Bank will also deliver to the Agent, concurrently with
or promptly following its delivery of a Letter of Credit, or amendment to or
renewal of a Letter of Credit, to an advising bank or a beneficiary, a true and
complete copy of each such Letter of Credit or amendment to or renewal of a
Letter of Credit.
(h) The Agent shall furnish to each Bank quarterly a summary of
outstanding Letters of Credit.
3.3 Risk Participations, Drawings and Reimbursements.
(a) Immediately upon the Issuance of each Letter of Credit, each Bank
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Issuing Bank a participation in such Letter of Credit and
each drawing thereunder in an amount equal to the product of (i) the Pro Rata
Share of such Bank, times (ii) the maximum amount available to be drawn under
such Letter of Credit and the amount of such drawing, respectively, in the
currency in which such Letter of Credit is stated. For purposes of Section
2.1(a), each Issuance of a Letter of Credit shall be deemed to utilize the
Revolving Commitment of each Bank by an amount equal to the amount of such
participation.
(b) In the event of any drawing under a Letter of Credit by the
beneficiary or transferee thereof, the Issuing Bank will promptly notify the
Agent and the Companies of the request and of the day on which the Issuing Bank
is to pay the beneficiary (which payment date is not to be less than one day
later). The Companies jointly and severally agree to reimburse the Issuing Bank
prior to 11:00 a.m. (Charlotte time), on each date that any amount is paid by
the Issuing Bank under any Letter of Credit (each such date, an "Honor Date"),
in an amount equal to the Dollar Equivalent Amount, as determined by the
Issuing Bank, such determination to be conclusive absent manifest error, of the
amount so paid by the Issuing Bank. In the event the Companies fail to
reimburse the Issuing Bank for the full amount of any drawing under any Letter
of Credit by 11:00 a.m. (Charlotte time) on the Honor Date, the Issuing Bank
will promptly notify the Agent who will in turn promptly notify each Bank.
Unless notified by the Companies to convert an unreimbursed drawing into
Revolving Loans or, if the Companies request a conversion of an unreimbursed
drawing into Revolving Loans but the unreimbursed drawing is not converted
because of the Companies' failure to satisfy the conditions set forth in
Section 6.3 (such unreimbursed drawing which has not been converted
constituting an L/C Borrowing), each Bank will be deemed to be obligated to
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make an L/C Advance in Dollars in the full Dollar Equivalent Amount of each
Bank's Pro Rata Share of such L/C Borrowing and such L/C Advances shall bear
interest at a rate per annum equal to the Base Rate plus 2% per annum. Any
notice given by the Issuing Bank or the Agent pursuant to this Section 3.3(b)
may be oral if promptly confirmed in writing (including by facsimile); provided
that the lack of such a prompt confirmation shall not affect the conclusiveness
or binding effect of such notice.
(c) With respect to any unreimbursed drawing that the applicable
Company requests be converted into a Revolving Loan and that satisfies the
conditions set forth in Section 6.3, each Bank shall upon any notice make
available to the Agent for the account of the relevant Issuing Bank an amount
in Dollars equal to the Dollar Equivalent Amount (as indicated in such notice)
of the currency in which such Letter of Credit is denominated and in
immediately available funds equal to its Pro Rata Share of the amount of such
drawing, whereupon the participating Banks shall each be deemed to have made a
Revolving Loan consisting of a Base Rate Loan to the Company in that amount. If
any Bank so notified fails to make available to the Agent for the account of
the Issuing Bank the amount of such Bank's Pro Rata Share of the amount of such
drawing by no later than 2:00 p.m. (Charlotte time) on the Honor Date, then
interest shall accrue on such Bank's obligation to make such payment, from the
Honor Date to the date such Bank makes such payment, at a rate per annum equal
to the Federal Funds Rate in effect from time to time during such period. The
Agent shall promptly give notice of the occurrence of the Honor Date, but
failure of the Agent to give any such notice on the Honor Date or in sufficient
time to enable any Bank to effect such payment on such date shall not relieve
such Bank from its obligations under this Section 3.3.
(d) Provided that the Issuing Bank has paid a drawing under a Letter
of Credit in accordance with its terms, each Bank's obligation in accordance
with this Agreement to make the Revolving Loans or L/C Advances, as
contemplated by this Section 3.3, as a result of a drawing under a Letter of
Credit, shall be absolute and unconditional and without recourse to the Issuing
Bank and shall not be affected by any circumstance, including (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank may have
against the Issuing Bank, the Companies or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default, an Event of
Default or a Material Adverse Effect; or (iii) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing;
provided that if the conditions to making any Loan pursuant to Section 6.3
shall not then be satisfied, each Bank's payment of such amount shall be deemed
to constitute its payment of the purchase price for its participation in the
applicable drawing under the applicable Letter of Credit.
3.4 Repayment of Participations. (a) Upon (and only upon) receipt by
the Agent for the account of the Issuing Bank of immediately available funds
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from the Companies (i) in reimbursement of any payment made by the Issuing Bank
under the Letter of Credit with respect to which any Bank has paid the Agent
for the account of the Issuing Bank for such Bank's participation in such
Letter of Credit pursuant to Section 3.3 or (ii) in payment of interest
thereon, the Agent will pay to such Bank, in the same funds as those received
by the Agent for the account of the Issuing Bank, the amount of such Bank's Pro
Rata Share of such funds, and the Issuing Bank shall receive the amount of the
Pro Rata Share of such funds of any Bank that did not so pay the Agent for the
account of the Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any time to pay to
the Companies, or to a trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of the payments made by the
Companies to the Agent for the account of the Issuing Bank pursuant to Section
3.4(a) in reimbursement of a payment made under any Letter of Credit or
interest thereon, each Bank shall, on demand of the Agent, forthwith pay to the
Agent or the Issuing Bank the amount of its Pro Rata Share of any amounts so
paid by the Agent or the Issuing Bank plus interest thereon from the date such
demand is made to the date such amounts are paid by such Bank to the Agent or
the Issuing Bank, at a rate per annum equal to the Federal Funds Rate in effect
from time to time.
3.5 Role of the Issuing Bank. (a) Each Bank and the Companies agree
that, in paying any drawing under a Letter of Credit, the Issuing Bank shall
not have any responsibility to obtain any document (other than any sight draft,
certificates and any other documents expressly required by the applicable
Letter of Credit) or to ascertain or inquire as to the validity or accuracy of
any such document or the authority of the Person executing or delivering any
such document.
(b) No Agent-Related Person nor any of the respective correspondents,
participants or assignees of the Issuing Bank shall be liable to any Bank for:
(i) any action taken or omitted in connection herewith at the request or with
the approval of the Required Banks; (ii) any action taken or omitted in the
absence of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any L/C-Related Document.
(c) The Companies hereby assume all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude the Companies' pursuing such rights and remedies as they may have
against the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the Issuing Bank (including the Banks), shall be liable or
responsible for any of the matters described in clauses (i) through (vii) of
Section 3.6; provided, however, anything in such clauses to the contrary
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notwithstanding, that the Companies may have a claim against the Issuing Bank,
and the Issuing Bank may be liable to the Companies, to the extent, but only to
the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Companies which the Companies prove were caused by the Issuing
Bank's willful misconduct or gross negligence or the Issuing Bank's willful
failure to pay under any Letter of Credit except as a result of a court order
after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing: (i) the Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation; and (ii) the Issuing Bank shall not
be responsible for the validity or sufficiency of any instrument transferring
or purporting to transfer a Letter of Credit or the rights or benefits
thereunder or assigning the proceeds thereof, in whole or in part, in
accordance with the terms of such Letter of Credit which may prove to be
invalid or ineffective for any reason.
3.6 Obligations Absolute. Provided that the Issuing Bank has paid a
drawing under a Letter of Credit in accordance with its terms, the obligations
of the Companies under this Agreement and any L/C-Related Document to reimburse
the Issuing Bank for a drawing under a Letter of Credit, and to repay any L/C
Borrowing and any drawing under a Letter of Credit converted into any
Syndicated Loan or Syndicated Loans, shall be unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement and
each such other L/C Related Document under all circumstances, including the
following:
(i) any lack of validity or enforceability of this Agreement
or any L/C-Related Document;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the obligations of the
Companies in respect of any Letter of Credit or any other amendment or
waiver of or any consent to departure from all or any of the
L/C-Related Documents, which have been previously agreed to by the
respective Company;
(iii) the existence of any claim, set-off, defense or other
right that the Companies may have at any time against any beneficiary
or any transferee of any Letter of Credit (or any Person for whom any
such beneficiary or any such transferee may be acting), the Issuing
Bank or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or by the L/C-Related Documents
or any unrelated transaction;
(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent,
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invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of
Credit against presentation of a draft or certificate that reasonably
complies with the terms of such Letter of Credit; or any payment made
by the Issuing Bank under any Letter of Credit to any Person
purporting to be (and providing reasonable evidence of its status as)
a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of
or successor to any beneficiary or any transferee of any Letter of
Credit, including any arising in connection with any Insolvency
Proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the obligations
of the Companies in respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever (other
than failure to pay a Letter of Credit in accordance with its terms),
whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to,
or a discharge of, the Companies or a guarantor.
3.7 Cash Collateral Pledge. Upon (i) the written request of the Agent,
(A) if the Issuing Bank has honored any full or partial drawing request on any
Letter of Credit and such drawing has resulted in an L/C Borrowing hereunder,
or (B) if, as of the Termination Date (or such earlier date as the Revolving
Commitments shall have terminated in accordance with the terms hereof), any
Letters of Credit may for any reason remain outstanding and partially or wholly
undrawn, or (ii) the occurrence of the circumstances described in Section 2.11
requiring the Companies to Cash Collateralize Letters of Credit, then the
Companies shall immediately Cash Collateralize the L/C Obligations in an amount
equal to such L/C Obligations or in the amount required under Section 2.11. If
any Letter of Credit expires without the application of such Cash Collateral in
full, or if all L/C Borrowings with respect to any Letter of Credit have been
paid in full by the Companies, then as long as there is no Event of Default in
existence and so long as no such application shall be made within 25 days of
the expiration of a Letter of Credit, the Agent shall return to the Companies
any cash or deposit account balances that were used by the Companies to Cash
Collateralize such Letters of Credit pursuant to this Section 3.7 and were not
applied to L/C Borrowings.
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3.8 Letter of Credit Fees. (a) The Companies shall pay to the Agent
for the account of each of the Banks a letter of credit fee with respect to the
Letters of Credit equal to the Applicable Margin for Revolving Loans with
respect to the Offshore Rate Loans times the average daily maximum Dollar
Equivalent Amount (computed based on currency exchange rates in effect as of
the most recent Valuation Date) available to be drawn under the outstanding
Letters of Credit computed on a quarterly basis in arrears on the last Business
Day of each calendar quarter based upon Letters of Credit outstanding for that
quarter as calculated by the Agent. Such letter of credit fees shall be due and
payable quarterly in arrears on the first Business Day following the calendar
quarter during which Letters of Credit are outstanding, commencing on the first
such quarterly date to occur after the Effective Date, through the Termination
Date (or such later date upon which the outstanding Letters of Credit shall
expire), with the final payment to be made on the Termination Date (or such
later expiration date).
(b) The Companies shall pay to the Agent for the account of the
Issuing Bank a letter of credit fee with respect to the Letters of Credit equal
to 1/8th of 1% per annum of the average daily maximum Dollar Equivalent Amount
(computed based on currency exchange rates in effect as of the most recent
Valuation Date) available to be drawn under the outstanding Letters of Credit,
computed on a quarterly basis in arrears on the last Business Day of each
calendar quarter based upon Letters of Credit outstanding for that quarter as
calculated by the Agent. Such letter of credit fees shall be due and payable
quarterly in arrears on the first Business Day following the calendar quarter
during which Letters of Credit are outstanding, commencing on the first such
quarterly date to occur after the Effective Date, through the Termination Date
(or such later date upon which the outstanding Letters of Credit shall expire),
with the final payment to be made on the Termination Date (or such later
expiration date).
(c) The Companies shall pay to the Issuing Bank from time to time on
demand the normal issuance, presentation, amendment and other processing fees,
and other standard costs and charges, of the Issuing Bank relating to Letters
of Credit as from time to time in effect.
3.9 Uniform Customs and Practice. The Uniform Customs and Practice for
Documentary Credits as published by the International Chamber of Commerce
("UCP") most recently at the time of issuance of any Letter of Credit shall
(unless otherwise expressly provided in the Letters of Credit) apply to the
Letters of Credit or, if the Issuing Bank shall elect by express reference in
an affected Letter of Credit, the International Chamber of Commerce
International Standby Practices commonly referred to as "ISP98", or any
subsequent amendment or revision of either thereof.
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ARTICLE IV
INTERIM NOTE GUARANTEE
4.1 Interim Notes Guarantee. At the time of the entering into of the
Original Agreement, (i) NationsBank executed the Interim Note Instrument
containing the Interim Note Guarantee of the Interim Note Obligations; and (ii)
the Original Banks severally agreed to participate in the Interim Note
Guarantee for the account of Michael Page. As a condition to entering into this
Agreement NationsBank and the Banks hereby agree to continue the Interim Note
Guarantee and to participate therein.
4.2 Risk Participation, Advances and Reimbursements.
(a) Each Bank is hereby deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from NationsBank a participation in the
Interim Note Guarantee and each payment thereunder in an amount equal to the
product of (i) the Pro Rata Share of such Bank, times (ii) the maximum amount
payable under the Interim Note Guarantee and the amount paid, respectively, in
British pounds sterling. For purposes of Section 2.1(a), the execution and
delivery of the Interim Note Instrument shall be deemed to utilize the
Revolving Commitment of each Bank by an amount equal to the amount of such
participation.
(b) In the event of any payment pursuant to the Interim Note Guarantee
to the holder of an Interim Note, NationsBank will promptly notify the Agent
and the Companies of the demand and of the day on which NationsBank is to pay
the holder (which payment date is not to be less than one day later). The
Companies jointly and severally agree to reimburse NationsBank prior to 11:00
a.m. (Charlotte time), on each date that any amount is paid by NationsBank
under the Interim Note Guarantee (each such date, a "Payment Date"), in an
amount equal to the Dollar Equivalent Amount, as determined by NationsBank, of
the amount so paid by NationsBank. In the event the Companies fail to reimburse
NationsBank for the full amount of any payment under the Interim Note Guarantee
by 11:00 a.m. (Charlotte time) on the Payment Date, NationsBank will promptly
notify the Agent who will in turn promptly notify each Bank. Unless notified by
the Companies to convert an unreimbursed payment into Revolving Loans or, if
the Companies request a conversion of an unreimbursed payment into Revolving
Loans but the unreimbursed payment is not converted because of the Companies'
failure to satisfy the conditions set forth in Section 6.3, each Bank will be
deemed to be obligated to make an Interim Note Advance in Dollars in the full
Dollar Equivalent Amount of each Bank's Pro Rata Share of such payment and such
Interim Note Advances shall bear interest at a rate per annum equal to the Base
Rate plus 2% per annum. Any notice given by NationsBank or the Agent pursuant
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to this Section 4.2(b) may be oral if immediately confirmed in writing
(including by facsimile); provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.
(c) With respect to any unreimbursed payment that Interim (Europe)
requests be converted into a Revolving Loan and that satisfies the conditions
set forth in Section 6.3, each Bank shall upon any notice make available to the
Agent for the account of NationsBank an amount in Dollars equal to the Dollar
Equivalent Amount (as indicated in such notice) of British pounds sterling and
in immediately available funds equal to its Pro Rata Share of the amount of
such payment, whereupon the participating Banks shall each be deemed to have
made a Revolving Loan consisting of a Base Rate Loan to Interim (Europe) in
that amount. If any Bank so notified fails to make available to the Agent for
the account of NationsBank the amount of such Bank's Pro Rata Share of the
amount of such payment by no later than 2:00 p.m. (Charlotte time) on the
Payment Date, then interest shall accrue on such Bank's obligation to make such
payment, from the Payment Date to the date such Bank makes such payment, at a
rate per annum equal to the Federal Funds Rate in effect from time to time
during such period. The Agent shall promptly give notice of the occurrence of
the Payment Date, but failure of the Agent to give any such notice on the
Payment Date or in sufficient time to enable any Bank to effect such payment on
such date shall not relieve such Bank from its obligations under this Section
4.2.
(d) Provided that NationsBank has made a payment pursuant to the
Interim Note Guarantee substantially in accordance with its terms, each Bank's
obligation in accordance with this Agreement to make the Syndicated Loans or
Interim Note Advances, as contemplated by this Section 4.2, as a result of a
payment under the Interim Note Guarantee, shall be absolute and unconditional
and without recourse to NationsBank and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense or
other right which such Bank may have against NationsBank, the Companies or any
other Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default, an Event of Default or a Material Adverse Effect; or (iii) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing; provided that if the conditions to making any Loan pursuant to
Section 6.3 shall not then be satisfied, each Bank's payment of such amount
shall be deemed to constitute its payment of the purchase price for its
participation in the applicable payment under the Interim Note Guarantee.
4.3 Repayment of Participations. (a) Upon (and only upon) receipt by
the Agent for the account of NationsBank of immediately available funds from
the Companies (i) in reimbursement of any payment made by NationsBank under the
Interim Note Guarantee with respect to which any Bank has paid the Agent for
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the account of NationsBank for such Bank's participation in such Interim Note
Guarantee pursuant to Section 4.2 or (ii) in payment of interest thereon, the
Agent will pay to such Bank, in the same funds as those received by the Agent
for the account of NationsBank, the amount of such Bank's Pro Rata Share of
such funds, and NationsBank shall receive the amount of the Pro Rata Share of
such funds of any Bank that did not so pay the Agent for the account of
NationsBank.
(b) If the Agent or NationsBank is required at any time to pay to the
Companies, or to a trustee, receiver, liquidator, custodian, or any official in
any Insolvency Proceeding, any portion of the payments made by the Companies to
the Agent for the account of NationsBank pursuant to Section 4.3(a) in
reimbursement of a payment made under the Interim Note Guarantee or interest
thereon, each Bank shall, on demand of the Agent, forthwith pay to the Agent or
NationsBank the amount of its Pro Rata Share of any amounts so paid by the
Agent or NationsBank plus interest thereon from the date such demand is made to
the date such amounts are paid by such Bank to the Agent or NationsBank, at a
rate per annum equal to the Federal Funds Rate in effect from time to time.
4.4 Role of NationsBank. (a) Each Bank and the Companies agree that,
in making a payment pursuant to the Interim Note Guarantee, NationsBank shall
not have any responsibility to obtain any document (other than written demand
and certificates expressly required by the Interim Note Guarantee) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document.
(b) No Agent-Related Person nor any of the respective correspondents,
participants or assignees of NationsBank shall be liable to any Bank for: (i)
any action taken or omitted in connection herewith at the request or with the
approval of the Required Banks; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any Interim Note Related
Documents.
(c) The Companies hereby assume all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of the Interim Note
Guarantee; provided, however, that this assumption is not intended to, and
shall not, preclude the Companies' pursuing such rights and remedies as they
may have against the beneficiary or transferee at law or under any other
agreement. No Agent-Related Person, nor any of the respective correspondents,
participants or assignees of NationsBank (including the Banks), shall be liable
or responsible for any of the matters described in clauses (i) through (vii) of
Section 4.5; provided, however, anything in such clauses to the contrary
notwithstanding, that the Companies may have a claim against NationsBank, and
NationsBank may be liable to the Companies, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Companies which the Companies prove were caused by the willful
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misconduct or gross negligence or willful failure of NationsBank to pay under
the Interim Note Guarantee except as a result of a court order after the
presentation to it by the beneficiary of a written demand and certificate(s)
strictly complying with the terms and conditions of the Interim Note Guarantee.
In furtherance and not in limitation of the foregoing: (i) NationsBank may
accept documents that appear on their face to be in order, without
responsibility for further investigation; and (ii) NationsBank shall not be
responsible for the validity or sufficiency of any instrument transferring or
purporting to transfer an Interim Note or the rights or benefits thereunder or
assigning the proceeds thereof, in whole or in part, in accordance with the
terms of such Interim Note which may prove to be invalid or ineffective for any
reason.
4.5 Obligations Absolute. Provided that NationsBank has made a payment
under the Interim Note Guarantee in accordance with its terms, the obligations
of the Companies under this Agreement and any Interim Note Related Documents to
reimburse NationsBank for a payment under the Interim Note Guarantee, and to
repay any Interim Note Borrowing and any payment under the Interim Note
Guarantee converted into any Revolving Loan or Revolving Loans, shall be
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement and each such other Interim Note Related Document
under all circumstances, including the following:
(i) any lack of validity or enforceability of this Agreement
or any Interim Note Related Documents;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the obligations of the
Companies in respect of the Interim Note Guarantee or any other
amendment or waiver of or any consent to departure from all or any of
the Interim Note Related Documents, which have been previously agreed
to by the respective Company;
(iii) the existence of any claim, set-off, defense or other
right that the Companies may have at any time against any beneficiary
or any transferee of any Interim Note Guarantee (or any Person for
whom any such beneficiary or any such transferee may be acting),
NationsBank or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by the Interim Note
Related Documents or any unrelated transaction;
(iv) any draft, demand, certificate or other document
presented under the Interim Note Guarantee proving to be forged,
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fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a
payment under the Interim Note Guarantee;
(v) any payment by NationsBank under the Interim Note
Guarantee pursuant to a demand for payment that reasonably complies
with the terms of the Interim Note Guarantee; or any payment made by
NationsBank under the Interim Note Guarantee to any Person purporting
to be (and providing reasonable evidence of its status as) a trustee
in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of any Interim Note
Guarantee, including any arising in connection with any Insolvency
Proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the obligations
of the Companies in respect of any Interim Note Guarantee; or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to,
or a discharge of, the Companies or a guarantor.
4.6 Cash Collateral Pledge. Upon (i) the request of the Agent, (A) if
NationsBank has honored any full or partial payment request on the Interim Note
Guarantee and such payment has resulted in an Interim Note Borrowing hereunder,
or (B) if, as of the Termination Date (or such earlier date as the Revolving
Commitments shall have terminated in accordance with the terms hereof), the
Interim Note Guarantee may for any reason remain outstanding, or (ii) the
occurrence of the circumstances described in Section 2.11 requiring the
Companies to Cash Collateralize, then the Companies shall immediately Cash
Collateralize the Interim Note Guarantee Obligations in an amount equal to such
Interim Note Guarantee Obligations or in the amount required under Section
2.11. If the Interim Note Guarantee expires without the application of such
Cash Collateral in full, or if all Interim Note Borrowings with respect to the
Interim Note Guarantee have been paid in full by the Companies, then as long as
there is no Event of Default in existence and so long as no such application
shall be made within 25 days of the expiration of the Interim Note Guarantee,
the Agent shall return to the Companies any cash or deposit account balances
that were used by the Companies to Cash Collateralize such Interim Note
Guarantee pursuant to this Section 4.6 and were not applied to Interim Note
Borrowings.
4.7 Interim Note Guarantee Fees. (a) The Companies shall pay to the
Agent for the account of each of the Banks an Interim Note Guarantee fee with
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respect to the Interim Note Guarantee equal to the Applicable Margin for
Revolving Loans with respect to the Offshore Rate Loans times the Interim Note
Obligations computed on a quarterly basis in arrears on the last Business Day
of each calendar quarter based upon the Interim Note Obligations outstanding
for that quarter as calculated by the Agent. Such Interim Note Guarantee fees
shall be due and payable quarterly in arrears on the first Business Day
following the calendar quarter during which there are Interim Note Obligations,
commencing on the Effective Date through the Termination Date (or such later
date upon which the Interim Note Guarantee shall expire), with the final
payment to be made on the Termination Date (or such later expiration date).
(b) The Companies shall pay to the Agent for the account of
NationsBank a fee with respect to the Interim Note Guarantee equal to 1/8th of
1% per annum of the average daily Interim Note Obligations (computed based on
currency exchange rates in effect as of the most recent Valuation Date),
computed on a quarterly basis in arrears on the last Business Day of each
calendar quarter based upon Interim Note Obligations outstanding for that
quarter as calculated by the Agent. Such fees shall be due and payable
quarterly in arrears on the first Business Day following the calendar quarter
during which the Interim Note Guarantee remains outstanding, commencing on the
Effective Date, through the Termination Date (or such later date upon which the
Interim Note Guarantee shall expire), with the final payment to be made on the
Termination Date (or such later expiration date).
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ARTICLE V
CHANGE IN CIRCUMSTANCES
5.1 Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any applicable law,
rule, or regulation, or any change in any applicable law, rule, or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank or
Designated Bidder (or its Lending Office) with any request or directive
(whether or not having the force of law) of any such governmental authority,
central bank, or comparable agency:
(1) shall subject such Bank (or its Lending Office) to any tax, duty,
or other charge with respect to any Offshore Rate Loans, its Note,
or its obligation to make Offshore Rate Loans, or change the basis
of taxation of any amounts payable to such Bank (or its Lending
Office) under this Agreement or its Note in respect of any
Offshore Rate Loans (other than taxes imposed on the overall net
income of such Bank or Designated Bidder by the jurisdiction in
which such Bank or Designated Bidder has its principal office or
such Lending Office);
(2) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the
Eurocurrency Reserve Percentage utilized in the determination of
the Offshore Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities or
commitments of, such Bank or Designated Bidder (or its Lending
Office), including the Revolving Commitment or 364 Day Commitment
of such Bank or Designated Bidder hereunder; or
(3) shall impose on such Bank or Designated Bidder (or its Lending
Office) or on the London interbank market any other condition
affecting this Agreement or its Note or any of such extensions of
credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Bank or
Designated Bidder (or its Lending Office) of making, converting into,
continuing, or maintaining any Loans or to reduce any sum received or
receivable by such Bank or Designated Bidder (or its Lending Office) under this
Agreement or its Note with respect to any Offshore Rate Loans, then the
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Companies shall pay to such Bank or Designated Bidder within ten (10) Business
Days of demand such amount or amounts as will compensate such Bank or
Designated Bidder for such increased cost or reduction, provided, that no
Company shall be obligated to reimburse any Bank for any cost incurred pursuant
to this Section more than 180 days prior to notice to the Companies of the
incurrence of such cost; except that if any change or compliance requirement
described above shall have a retroactive application, the Companies shall be
obligated to make such reimbursement with respect to such retroactive effect,
if such Bank shall give the Companies notice thereof within 30 days of such
Bank's having notice thereof. If any Bank requests compensation by the
Companies under this Section 5.1(a), the Companies may, by notice to such Bank
(with a copy to the Agent), suspend the obligation of such Bank to make or
continue Loans of the Type with respect to which such compensation is
requested, or to convert Loans of any other Type into Loans of such Type, until
the event or condition giving rise to such request ceases to be in effect (in
which case the provisions of Section 5.4 shall be applicable); provided that
such suspension shall not affect the right of such Bank to receive the
compensation so requested.
(b) If, after the date hereof, any Bank shall have determined that the
adoption of any applicable law, rule, or regulation regarding capital adequacy
or any change therein or in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank, or comparable agency, has or would have
the effect of reducing the rate of return on the capital of such Bank or any
corporation controlling such Bank as a consequence of such Bank's obligations
hereunder to a level below that which such Bank or such corporation could have
achieved but for such adoption, change, request, or directive (taking into
consideration its policies with respect to capital adequacy), then from time to
time upon demand the Companies shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such reduction; provided, that no
Company shall be obligated to reimburse any Bank for any cost described in this
Section more than 180 days prior to notice to the Companies of the incurrence
of such cost; except that if any change or compliance required described above
shall have a retroactive application, the Companies shall be obligated to make
such reimbursement with respect to such retroactive effect, if such Bank shall
give the Companies notice thereof within 30 days of such Bank's having notice
thereof.
(c) Without limiting the foregoing but without duplication for any
Associated Costs reimbursed pursuant to Section 5.1(a) or (b), as to any
Offshore Currency Loans denominated in British pounds sterling, the Companies
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will pay the Associated Costs. Any Bank requesting reimbursement under this
Section 5.3(c) shall give the Companies written notice, including a detailed
calculation, within thirty (30) days of having notice of the incurrence of any
Associated Costs.
(d) Each Bank shall promptly notify the Companies and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section 5.1 and will
designate a different Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of such Bank, be otherwise disadvantageous to it. Any Bank claiming
compensation under this Section 5.1 shall furnish to the Companies and the
Agent a statement setting forth the additional amount or amounts to be paid to
it hereunder, which shall be conclusive in the absence of manifest error,
together with an explanation of the event giving rise to such claim. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
5.2 Limitation on Types of Loans. If on or prior to the first day of
any Interest Period for any Offshore Rate Loan:
(a) the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining
the Offshore Rate for such Interest Period; or
(b) the Required Banks determine (which determination shall
be conclusive) and notify the Agent that the Offshore Rate will not
adequately and fairly reflect the cost to the Banks of funding
Offshore Rate Loans for such Interest Period;
then the Agent shall give the Companies prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Banks shall be under no obligation to make
additional Loans of such Type, continue Loans of such Type, or to convert Loans
of any other Type into Loans of such Type and the Companies shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of the
affected Type, either prepay such Loans or convert such Loans into another Type
of Loan in accordance with the terms of this Agreement.
5.3 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Bank or its Lending Office to
make, maintain, or fund Offshore Rate Loans hereunder, then such Bank shall
promptly notify the Companies thereof and such Bank's obligation to make or
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continue Offshore Rate Loans and to convert other Types of Loans into Offshore
Rate Loans shall be suspended until such time as such Bank may again make,
maintain, and fund Offshore Rate Loans (in which case the provisions of Section
5.4 shall be applicable).
5.4 Treatment of Affected Loans. If the obligation of any Bank to make
an Offshore Rate Loan or to continue, or to convert Loans of any other Type
into, Loans of a particular Type shall be suspended pursuant to Section 5.2 or
5.3 hereof (Loans of such Type being herein called "Affected Loans" and such
Type being herein called the "Affected Type"), such Bank's Affected Loans shall
be automatically converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for Affected Loans (or, in the case of a conversion
required by Section 5.3 hereof, on such earlier date as such Bank may specify
to the Companies with a copy to the Agent) and, unless and until such Bank
gives notice as provided below that the circumstances specified in Section 5.1
or 5.3 hereof that gave rise to such conversion no longer exist:
(a) to the extent that such Bank's Affected Loans have been
so converted, all payments and prepayments of principal that would
otherwise be applied to such Bank's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or continued by
such Bank as Loans of the Affected Type shall be made or continued
instead as Base Rate Loans, and all Loans of such Bank that would
otherwise be converted into Loans of the Affected Type shall be
converted instead into (or shall remain as) Base Rate Loans.
If such Bank gives notice to the Companies (with a copy to the Agent) that the
circumstances specified in Section 5.1 or 5.3 hereof that gave rise to the
conversion of such Bank's Affected Loans pursuant to this Section 5.4 no longer
exist (which such Bank agrees to do promptly upon such circumstances ceasing to
exist) at a time when Loans of the Affected Type made by other Banks are
outstanding, such Bank's Base Rate Loans shall be automatically converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Loans of the Affected Type, to the extent necessary so that, after giving
effect thereto, all Loans held by the Banks holding Loans of the Affected Type
and by such Bank are held pro rata (as to principal amounts, Types, and
Interest Periods) in accordance with their respective 364 Day Commitments and
Revolving Credit Commitments.
5.5 Compensation. Upon the request of any Bank, the Companies shall
pay to such Bank such amount or amounts as shall be sufficient (in the
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reasonable opinion of such Bank) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or conversion of a Offshore Rate
Loan for any reason (including, without limitation, the acceleration
of the Loans pursuant to Section 10.1) on a date other than the last
day of the Interest Period for such Loan; or
(b) any failure by the Companies for any reason (including,
without limitation, the failure of any condition precedent specified
in Article VI to be satisfied) to borrow, convert, continue, or prepay
an Offshore Rate Loan on the date for such borrowing, conversion,
continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, continuation, or conversion under this
Agreement.
5.6 Taxes.
(a) Any and all payments by the Companies to or for the account of any
Bank or the Agent hereunder or under any other Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Bank,
Designated Bidder and the Agent, taxes imposed on or measured by its income,
and franchise taxes imposed on it, by the jurisdiction under the laws of which
such Bank, Designated Bidder (or its Lending Office) or the Agent (as the case
may be) is organized or any political subdivision thereof (all such
non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings,
and liabilities being hereinafter referred to as "Taxes"). If the Companies
shall be required by law to deduct any Taxes from or in respect of any sum
payable under this Agreement or any other Loan Document to any Bank or the
Agent, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 5.6) such Bank or the Agent receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Companies shall make such deductions, (iii) the Companies shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) the Companies shall furnish to the
Agent, at its address referred to in Section 12.2, the original or a certified
copy of a receipt evidencing payment thereof.
(b) In addition, the Companies agree to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this
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Agreement or any other Loan Document or from the execution or delivery of, or
otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) The Companies agree to indemnify each Bank and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 5.6) paid by such Bank or the Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Companies or
the Agent (but only so long as such Bank remains lawfully able to do so), shall
provide the Companies and the Agent with (i) Internal Revenue Service Form 1001
or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States, (ii) Internal Revenue Service Form
W-8 or W-9, as appropriate, or any successor form prescribed by the Internal
Revenue Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and 881(c) of
the Internal Revenue Code), certifying that such Bank is entitled to an
exemption from or a reduced rate of tax on payments pursuant to this Agreement
or any of the other Loan Documents.
(e) For any period with respect to which a Bank has failed to provide
the Companies and the Agent with the appropriate form pursuant to Section
5.6(d) (unless such failure is due to a change in treaty, law, or regulation
occurring subsequent to the date on which a form originally was required to be
provided), such Bank shall not be entitled to indemnification under Section
5.6(a) or 5.6(b) with respect to Taxes imposed by the United States; provided,
however, that should a Bank, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes because of its failure
to deliver a form required hereunder, the Companies shall take such steps as
such Bank shall reasonably request to assist such Bank to recover such Taxes.
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(f) If the Companies are required to pay additional amounts to or for
the account of any Bank pursuant to this Section 5.6, then such Bank will agree
to use reasonable efforts to change the jurisdiction of its Lending Office so
as to eliminate or reduce any such additional payment which may thereafter
accrue if such change, in the judgment of such Bank, is not otherwise
disadvantageous to such Bank.
(g) Within thirty (30) days after the date of any payment of Taxes,
the Companies shall furnish to the Agent the original or a certified copy of a
receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Companies hereunder, the agreements and obligations of the Companies contained
in this Section 5.6 shall survive the termination of the Revolving Credit
Commitments and 364 Day Commitments and the payment in full of the Notes.
5.7 Replacement Banks. The Companies may, in their sole discretion, on
10 Business Days' prior written notice to the Agent and a Bank (except in the
case of the replacement of a Bank after notice from such Bank to the Companies
pursuant to Section 5.1, in which case no prior notice from the Companies is
required), cause a Bank who has incurred increased costs or is unable to make
Offshore Rate Loans to (and such Bank shall) assign, pursuant to Section 12.8,
all of its rights and obligations under this Agreement (other than with respect
to outstanding Bid Loans) to an Eligible Assignee designated by the Companies
which is willing to become a Bank for a purchase price equal to the outstanding
principal amount of the Syndicated Loans payable to such Bank plus any accrued
but unpaid interest on such Loans, any accrued but unpaid fees with respect to
such Bank's Commitment and any other amount payable to such Bank under this
Agreement (other than with respect to outstanding Bid Loans); provided, that
any expenses or other amounts which would be owing to such Bank pursuant to any
indemnification provision hereof (including, if applicable, Section 5.5) shall
be payable by the Companies as if the Companies had prepaid the Loans of such
Bank rather than such Bank having assigned its interest hereunder. The
Companies or the Assignee shall pay the applicable processing fee under Section
12.8.
5.8 Mitigation. Each Bank agrees that, with reasonable promptness
after the officer of such Bank responsible for administering the Loans of such
Bank becomes aware that such Bank has become an affected Bank under Section
5.3, is entitled to receive payments under Section 5.5, or is or has become
subject to U.S. or United Kingdom withholding taxes payable by any Company in
respect of its Loans, it will, to the extent not inconsistent with any internal
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policy of such Bank or any applicable legal or regulatory restriction, (i) use
all reasonable efforts to make, fund or maintain the Commitment of such Bank or
the Loans of such Bank through another lending office of such Bank, or (ii)
take such other reasonable measures, if, as a result thereof, the circumstances
which would cause such Bank to be an affected Bank under Section 5.3 would
cease to exist, or the additional amounts which would otherwise be required to
be paid to such Bank pursuant to Section 5.5 would be reduced, or such
withholding taxes would be reduced, and if the making, funding or maintaining
of such Commitment or Loans through such other lending office or in accordance
with such other measures, as the case may be, would not otherwise adversely
affect such Commitment or Loans or the interests of such Bank; provided that
such Bank will not be obligated to utilize such other lending office pursuant
to this Section 5.8 unless the Companies agree to pay all incremental expenses
incurred by such Bank as a result of utilizing such other lending office as
described in clause (i) above. A certificate as to the amount of any such
expenses (setting forth in reasonable detail the basis for requesting such
amount and the calculation thereof) submitted by such Bank to the Companies
(with a copy to the Agent) shall be prima facie evidence of such expenses.
5.9 Survival. The agreements and obligations of the Companies in this
Article V shall survive the payment of all other Obligations.
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ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Execution of Agreement. (a) As a condition precedent
to the occurrence of the Effective Date and to the making of additional
Syndicated Loans, the Agent shall have received on or before the Effective
Date, in form and substance satisfactory to the Agent and the Banks, the
following:
(i) executed originals of each of this Agreement,
Guaranties, Pledge Agreements and the Notes, together with
all schedules and exhibits thereto and documents deliverable
thereunder;
(ii) the favorable written opinion or opinions with
respect to the Loan Documents and the transactions
contemplated thereby of special counsel to the Companies and
Guarantors dated the Effective Date, addressed to the Agent
and the Banks and reasonably satisfactory to the Agent and
the Banks;
(iii) resolutions of the boards of directors or
other appropriate governing body (or of the appropriate
committee thereof) of each Company and Guarantor certified by
its secretary or assistant secretary or other appropriate
representative of such Company and Guarantor as of the
Effective Date, approving and adopting the Loan Documents and
Interim Note Instruments to be executed by such Person, and
authorizing the execution and delivery and performance
thereof;
(iv) specimen signatures of officers or other
appropriate representatives of each Company and Guarantor
executing the Loan Documents and Interim Note Instruments on
behalf of such Company and Guarantor, which signature, and
the office and incumbency of such person, shall be certified
by the appropriate representative of such Company or
Guarantor, as the case may be;
(v) the charter documents and bylaws or deed of
incorporation and articles of association or other
organizational document of each Company and Guarantor
certified by the appropriate representative of such Company;
(vi) Pro Forma Historical Statements;
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(vii) Pro Forma Projections;
(viii) the Registration Statement;
(ix) evidence satisfactory to the Agent that all
fees payable by the Companies on the Effective Date to the
Agent, the Arranger, NationsBank and the Banks have been paid
in full;
(x) evidence reasonably satisfactory to the Agent of
consummation of the merger pursuant to the terms of the
Merger Agreement as previously furnished to the Agent, with
only such amendments or waivers of the provisions thereof as
are reasonably acceptable to the Agent.
(xi) evidence satisfactory to the Agent that Interim
has become a party to a Permitted Receivable Securitization
providing at least $150,000,000 to Interim;
(xii) closing statement containing a detailed
disbursement of proceeds of the Loans in accordance with
Section 2.10; and
(xiii) such other documents, instruments,
certificates and opinions as the Agent or the Banks may
reasonably request on or prior to the Effective Date in
connection with the Acquisition.
(b) There shall not have occurred or become known to the Agent or any
of the Banks any event, condition, litigation, action, suit, investigation or
other arbitral, administrative or judicial proceeding or other situation or
status since the date of the information contained in the financial and
business projections, budgets, pro forma data and forecasts concerning Interim
and its Subsidiaries, or of Norrell, delivered to the Agent prior to the
Effective Date that (x) has had or could reasonably be expected to result in a
Material Adverse Effect or materially adversely affect the business,
properties, operations or condition, financial or otherwise, of Interim and its
Subsidiaries or Norrell and Subsidiaries , taken as a whole or (y) does or
could reasonably be expected to restrain or enjoin or otherwise materially and
adversely affect the ability of any Person to fulfill their respective
obligations with respect to the Acquisition of Norrell; and
(c) Each Company and its Subsidiaries shall have received all
approvals, consents and waivers (including the expiration of early termination
of any waiting period without notice of intent to challenge or request for
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further information by any Governmental Authority), and shall have made or
given all necessary filings and notices, as shall be required to consummate the
transactions contemplated hereby except for such approvals, consents, waivers,
filings and notices as to which the failure to receive, make or give will not
have a Material Adverse Effect or materially adversely affect the business,
properties, operations or condition, financial or otherwise, of the acquired
business of Norrell, taken as a whole.
6.2 Condition of Extension of Credit to Borrowing Subsidiary. The
obligation of each Bank to make any Credit Extension to a Borrowing Subsidiary
is subject to the condition that such Borrowing Subsidiary has furnished to the
Agent the following items.
(i) Copies of the articles of incorporation or similar
organizational documents of such Borrowing Subsidiary, together with
all amendments, and a certificate of good standing (if available),
both certified by the appropriate governmental officer in its
jurisdiction of incorporation.
(ii) Copies, certified by an appropriate officer or director
of such Borrowing Subsidiary, of its by-laws or similar organizational
documents and of its Board of Directors' resolutions (and resolutions
of other bodies, if any are deemed necessary by counsel for any Bank)
authorizing the execution of the Loan Documents to which such
Borrowing Subsidiary is a party.
(iii) An incumbency certificate, executed by an appropriate
officer or director of such Borrowing Subsidiary, which shall identify
by name and title and bear the signature of the officers or directors
of such Borrowing Subsidiary authorized to sign the Loan Documents and
to request Loans hereunder, upon which certificate the Administrative
Agent and the Banks shall be entitled to rely until informed of any
change in writing by such Borrowing Subsidiary.
(iv) A written opinion of counsel to such Borrowing
Subsidiary, addressed to the Banks in form and substance satisfactory
to the Agent.
(v) Notes issued by such Borrowing Subsidiary to the order of
each of the Banks.
(vi) Such other documents as the Agent or its counsel may
have reasonably requested.
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6.3 Conditions to All Credit Extensions. The obligation of each Bank
and each Designated Bidder to make any Loan to be made by it (including its
initial Loan) other than, so long as no Event of Default shall have occurred
and be continuing, the continuation or conversion of any Loan previously made
(which shall remain subject to the limitations contained in Article II), and
the obligation of the Issuing Bank to Issue any Letter of Credit (including the
initial Letter of Credit), other than, so long as no Event of Default shall
have occurred and be continuing, the renewals of existing Letters of Credit, is
subject to the satisfaction of the following conditions precedent on the
relevant Borrowing Date or Issuance Date:
(a) Irrevocable Notice of Syndicated Activity, L/C
Application. For each Syndicated Loan, the Agent shall have received
an Irrevocable Notice of Syndicated Activity and, in the case of any
Issuance of any Letter of Credit, the Issuing Bank and the Agent shall
have received an L/C Application or L/C Amendment Application;
(b) Continuation of Representations and Warranties. The
representations and warranties in Article VII and in the other Loan
Documents shall be true and correct on and as of such Borrowing Date
or Issuance Date with the same effect as if made on and as of such
Borrowing Date or Issuance Date (except (i) to the extent such
representations and warranties expressly refer to an earlier date, in
which case they shall be true and correct as of such earlier date,
(ii) that references to financial statements described in Section
7.10(a) shall be to the financial statements most recently furnished
pursuant to Section 8.1(a) or (b), and (iii) that the reference to
November 1, 1998 in Section 7.10(c) shall refer to the date of the
financial statements most recently furnished pursuant to Section
8.1(a) or (b)); and
(c) No Existing Default. No Default or Event of Default shall
exist or shall result from such Borrowing or Issuance.
Each Irrevocable Notice of Syndicated Activity and L/C Application or L/C
Amendment Application submitted by any Company hereunder shall constitute a
representation and warranty by each Company hereunder, as of the date of each
such notice and as of each Borrowing Date, or Issuance Date, as applicable,
that the conditions in this Section 6.3 are satisfied. Nothing contained in
this Section 6.3 shall limit the obligation of the Banks to make an L/C Advance
and Interim Note Advance pursuant to Section 3.3 and Section 4.2, respectively.
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6.4 Supplements to Schedules. The Companies may, from time to time but
in no event less than five (5) Business Days prior to delivery of any
Irrevocable Notice of Syndicated Activity hereunder, amend or supplement
Schedules 7.5, 7.10, 7.12 and 7.13 to this Agreement by delivering (effective
upon receipt) to the Agent and each Bank a copy of such revised Schedule or
Schedules which shall (i) be dated the date of delivery, (ii) be certified by a
Responsible Officer as true, complete and correct as of such date and as
delivered in replacement for the corresponding Schedule or Schedules previously
in effect, and (iii) show in reasonable detail (by blacklining or other
appropriate graphic means) the changes from each such corresponding predecessor
Schedule. Notwithstanding anything to the contrary contained herein or in any
of the other Loan Documents, in the event that the Required Banks determine
based upon such revised Schedules (whether individually or in the aggregate or
cumulatively) that there has been a change which could have a Material Adverse
Effect since the Closing Date, or such later date as the Companies shall have
most recently furnished supplements to Schedules under this Section 6.4 or
financial statements under Section 8.1(a) or (b), in the business, operations
or affairs, financial or otherwise, of Interim and its Subsidiaries, taken as a
whole, the Banks shall have no further obligation to fund Credit Extensions or
continue or convert any Loan previously made or renew or extend existing
Letters of Credit.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Each Company represents and warrants to the Agent and each Bank that:
7.1 Existence and Power. Such Company and each of its Subsidiaries:
(a) is a corporation, partnership or limited liability
company duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation;
(b) has the power and authority and governmental licenses,
authorizations, consents and approvals to own its assets, carry on its
business and to execute, deliver, and perform its obligations under
the Loan Documents;
(c) is duly qualified and is licensed and in good standing
under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification or license, except to the extent failure to so qualify
would not have a Material Adverse Effect; and
(d) is in compliance with all Requirements of Law, except to
the extent the failure to so comply would not have a Material Adverse
Effect.
7.2 Authorization; No Contravention. The execution, delivery and
performance by such Company and its Subsidiaries of this Agreement and each
other Loan Document to which such Person is party have been duly authorized by
all necessary action and do not and will not:
(a) contravene the terms of any of that Person's Organization
Documents;
(b) conflict with or result in a material breach or
contravention of, or the creation of any Lien under, any document
evidencing any material Contractual Obligation to which such Person is
a party or any order, injunction, writ or decree of any Governmental
Authority to which such Person or its property is subject; or
(c) violate any Requirement of Law.
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7.3 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, such Company or
any of its Subsidiaries of the Agreement or any other Loan Document.
7.4 Binding Effect. This Agreement and each other Loan Document to
which such Company or any of its Subsidiaries is a party constitute the legal,
valid and binding obligations of such Company and any of its Subsidiaries to
the extent it is a party thereto, enforceable against such Person in accordance
with their respective terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability).
7.5 Litigation: Labor Controversies. There are no actions, suits,
labor controversies, proceedings, claims or disputes pending, or to the best
knowledge of such Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against such Company, or its
Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby or
thereby; or
(b) if determined adversely to such Company or its
Subsidiaries, would reasonably be expected to have a Material Adverse
Effect, except as set forth in Schedule 7.5.
No injunction, writ, temporary restraining order or order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin
or restrain the execution, delivery or performance of this Agreement or any
other Loan Document, or directing that the transactions provided for herein or
therein not be consummated as herein or therein provided.
7.6 No Default. No Default or Event of Default exists or would result
from the incurring of any Obligations by such Company. As of the Effective
Date, neither such Company nor any of its Subsidiaries is in default under or
with respect to any Contractual Obligation in any respect which, individually
or together with all such defaults, could reasonably be expected to have a
Material Adverse Effect, or that would, if such default had occurred after the
Effective Date, create a Default or an Event of Default under Section 10.1(e).
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7.7 Use of Proceeds; Margin Regulations. The Credit Extensions are to
be used solely for the repayment of the Norrell Indebtedness in full, the
acquisition of shares of Norrell and the costs associated with such Acquisition
and for general corporate purposes, including the continuation of Loans
outstanding under the Original Agreement and Existing Letters of Credit. The
shares of Norrell do not constitute Margin Stock. Neither such Company nor any
of its Subsidiaries is generally engaged in the business of purchasing or
selling Margin Stock or extending credit for the purpose of purchasing or
carrying Margin Stock. Less than 25% of the Property of the Companies and their
Subsidiaries consists of Margin Stock.
7.8 Title to Properties. Such Company and each of its Subsidiaries
have good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of
their respective businesses, except for such defects in title as could not,
individually or in the aggregate, have a Material Adverse Effect. As of the
Effective Date, the property of such Company and its Subsidiaries is subject to
no Liens, other than Liens permitted under Section 9.2.
7.9 Taxes. Such Company and its Subsidiaries have filed all Federal
and other material tax returns and reports required to be filed, and have paid
all Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided
in accordance with GAAP. To the best of Interim's knowledge, there is no
proposed tax assessment against such Company or any of its Subsidiaries that
would, if made, have a Material Adverse Effect.
7.10 Financial Condition.
(a) The audited consolidated financial statements of Interim
and its Subsidiaries dated December 26, 1997 and December 25, 1998,
and the related consolidated statements of income or operations,
shareholders' equity and cash flows for the fiscal periods ended on
such dates:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein;
(ii) present fairly the financial condition of
Interim and its Subsidiaries as of the dates thereof and
results of operations for the periods covered thereby; and
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(iii) except as specifically disclosed in Schedule
7.10, show all material indebtedness and other liabilities,
direct or contingent, of Interim and its Subsidiaries as of
the date thereof, including liabilities for taxes, material
commitments and Contingent Obligations, which are required to
be disclosed in accordance with GAAP.
(b) Since December 25, 1998, there has been no Material
Adverse Effect.
(c) To the best knowledge of Interim, after due inquiry, the
audited consolidated financial statements of Norrell and its
Subsidiaries dated November 2, 1997 and November 1, 1998, and the
related consolidated statements of income or operations, shareholders'
equity and cash flows for the fiscal periods ended on such dates:
(i) were prepared in accordance with GAAP,
consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein;
(ii) present fairly the financial condition of
Norrell and its Subsidiaries as of the dates thereof and
results of operations for the periods covered thereby; and
(iii) except as specifically disclosed in Schedule
7.10, show all material indebtedness and other liabilities,
direct or contingent, of Norrell and its Subsidiaries as of
the date thereof, including liabilities for taxes, material
commitments and Contingent Obligations, which are required to
be disclosed in accordance with GAAP.
(d) The Pro Forma Historical Statements provided to the Agent
and the Banks fairly present the historical pro forma financial
condition and results of operations of Interim and its Subsidiaries
and, to the best knowledge of Interim, Norrell and its Subsidiaries
for the respective periods covered thereby, giving effect to the
acquisition of Norrell.
(e) The Pro Forma Projections provided to the Agent and the
Banks were prepared by Interim in good faith and are based upon
assumptions which Interim believed, to the best of its knowledge, to
have been reasonable in all material respects as of the time of
preparation thereof and as of the Effective Date.
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7.11 Support Documents.
(a) The provisions of each of the Support Documents (and the
actions contemplated to be taken thereunder) are effective to create
in favor of the Agent for the benefit of the Banks, a legal, valid and
enforceable (i) guaranty of the obligations described therein except
as limited by bankruptcy, insolvency and similar laws affecting the
enforcement of creditors' rights generally and equitable principles of
general application and (ii) duly perfected pledge of all ownership
interest (other than directors' qualifying shares) in the Subsidiaries
described in Schedule II.
(b) All representations and warranties of such Company's
Subsidiaries contained in the Support Documents are true and correct
in all material respects.
7.12 Copyrights, Patents, Trademarks and Licenses, etc. Except as set
forth on Schedule 7.12, such Company and its Subsidiaries own or are licensed
or otherwise have the right to use all of the patents, trademarks, service
marks, trade names, copyrights, contractual franchises, authorizations and
other rights that are reasonably necessary for the operation of their
respective businesses, without material conflict with the rights of any other
Person. To the best knowledge of such Company, except as set forth in Schedule
7.12, no slogan or other advertising device, product, process, method,
substance, part or other material now employed by such Company or any of its
Subsidiaries infringes in any material respect upon any rights held by any
other Person. Except as set forth in Schedule 7.12, no claim or litigation
regarding any of the foregoing is pending or known to be threatened, and no
patent, invention, device, application, principle, statute, law, rule,
regulation, standard or code is pending or, to the knowledge of such Company,
proposed, which, in either case, could reasonably be expected to have a
Material Adverse Effect.
7.13 Subsidiaries. As of the Effective Date, such Company has no
Subsidiaries other than those specifically disclosed (and identified as being
Subsidiaries of such Company) in part (a) of Schedule 7.13 and has no equity
investments in any other corporation or entity other than those specifically
disclosed in Part (b) of Schedule 7.13 and each Subsidiary (other than a
Foreign Subsidiary or an Excluded Subsidiary) is a party to the Guaranty
Agreement and is listed as a "Guarantor" in Schedule 1.2(b) hereof.
7.14 Insurance. The Properties of such Company and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates, other than Spectrum, of any Company, in such amounts, with such
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deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
such Company or such Subsidiary operates; provided, however, Interim and its
Subsidiaries may maintain self insurance as to risks of the types and in the
amounts (and with such reserves) as are customarily maintained by Persons
conducting similar businesses in the same localities.
7.15 ERISA Compliance.
(a) All pension plans governed by laws other than the laws of
the United States have been funded in amounts at least equal to the
present value of the probable liabilities of the Companies and their
Subsidiaries thereunder.
(b) Except as set forth in Schedule 7.15, each Plan is in
compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state law. Each Plan which is
intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS and to the best knowledge
of the Companies, nothing has occurred which would cause the loss of
such qualification. Interim and each ERISA Affiliate has made all
required contributions to any Plan subject to Section 412 of the Code,
and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.
(c) There are no pending or, to the best knowledge of the
Companies, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has resulted or
could reasonably be expected to result in a Material Adverse Effect.
There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(d) (i) No ERISA Event has occurred within the last six (6)
years or is reasonably expected to occur; (ii) no Pension Plan has any
Unfunded Pension Liability; (iii) neither Interim nor any ERISA
Affiliate has incurred within the last six (6) years, or reasonably
expects to incur, any liability under Title IV of ERISA with respect
to any Pension Plan (other than premiums due and not delinquent under
Section 4007 of ERISA) (iv) neither Interim nor any ERISA Affiliate
has incurred within the last six (6) years, or reasonably expects to
incur, any liability (and no event has occurred within the last six
(6) years which, with the giving of notice under Section 4219 of
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ERISA, would result in such liability) under Section 4201 or 4243 of
ERISA with respect to a Multiemployer Plan; and (v) neither Interim
nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
7.16 Environmental Matters. Environmental Laws and Environmental
Claims could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
7.17 Regulated Entities. None of such Company, any Person controlling
such Company, or any Subsidiary, is an "Investment Company" within the meaning
of the Investment Company Act of 1940. Such Company is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal, state or foreign statute or regulation limiting its ability to
incur Indebtedness.
7.18 No Burdensome Restrictions. Neither such Company nor any of its
Subsidiaries is a party to or bound by any Contractual Obligation, or subject
to any restriction in any Organization Document, or any Requirement of Law,
which could reasonably be expected to have a Material Adverse Effect.
7.19 Full Disclosure. Neither this Agreement nor any other Loan
Document or certificate or document executed and delivered by or on behalf of
any Company or any Subsidiary in accordance with Section 6.1 (other than
Section 6.1(vi) and (vii)) or Section 6.2 contains any misrepresentation or
untrue statement of material fact or omits to state a material fact necessary,
in light of the circumstance under which it was made, in order to make any such
representation or statement contained therein not misleading in any material
respect.
7.20 Immunity. The Companies and the Guarantors are generally subject
to suit and none of them nor any of their properties or revenues enjoys any
right of immunity from judicial proceedings.
7.21 Year 2000 Compliance. Interim and its Subsidiaries have (i)
initiated a review and assessment of all areas within its and each of its
Subsidiaries' business and operations (including those affected by information
received from suppliers and vendors) that could reasonably be expected to be
adversely affected by the Year 2000 Problem, (ii) developed a plan and timeline
for addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan substantially in accordance with that timetable. Interim
reasonably believes that all computer applications (including those affected by
information received from its suppliers and vendors) that are material to its
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or any of its Subsidiaries' business and operations will on a timely basis be
Year 2000 Compliant, except to the extent that a failure to do so could not
reasonably be expected to have a Material Adverse Effect.
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ARTICLE VIII
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Required Banks waive compliance in
writing:
8.1 Financial Information, Reports, Notices, etc. The Companies will
furnish, or will cause to be furnished, to the Agent copies, with sufficient
copies for the Banks, of the following financial statements, reports, notices
and information:
(a) as soon as available and in any event within 60 days
after the end of each of the first three fiscal quarters of each
fiscal year of Interim, (x) the consolidated balance sheet of Interim
and its Subsidiaries, as of the end of such fiscal quarter and (x)
related consolidated statements of profits and losses and cash flows
of Interim and its Subsidiaries, for such fiscal quarter and for the
period commencing at the end of the previous fiscal year and ending
with the end of such fiscal quarter, such balance sheets and
statements of profit and losses and cash flow to be prepared in
accordance with GAAP in a manner consistent with past practices of
Interim, certified by the chief financial officer, treasurer or the
secretary-controller of Interim;
(b) as soon as available and in any event within 110 days
after the end of each fiscal year of Interim, a copy of the annual
audit report for such fiscal year for Interim and its Subsidiaries,
including therein the consolidated balance sheet of Interim and its
Subsidiaries as of the end of such fiscal year and consolidated
statements of profits and losses and cash flow of Interim and its
Subsidiaries for such fiscal year, certified without any Impermissible
Qualification by Deloitte & Touche LLP or other internationally
recognized independent public accountants, together with a certificate
from such accountants to the effect that (i) the consolidated
financial statements have been prepared in accordance with GAAP
consistently applied and present fairly the financial condition and
results of operations of Interim and its Subsidiaries and (ii) in
making the examination necessary for the signing of such annual report
by such accountants, they have not become aware of any Default or
Event of Default that has occurred and is continuing, or, if they have
become aware of such Default or Event of Default, describing such
Default or Event of Default and the steps, if any, being taken to cure
it;
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(c) together with the financial statements furnished under
preceding clauses (a) and (b), a certificate substantially in the form
of Exhibit B, as the same may be amended, modified or supplemented
from time to time (the "Compliance Certificate"), signed by a
Responsible Officer dated the date of such annual or such quarterly
financial statement, as the case may be, to the effect that no Default
or Event of Default has occurred and is continuing, or, if there is
any such event, describing it and the steps, if any, being taken to
cure it, and containing a computation of each of the financial ratios
and restrictions contained in Article IX;
(d) promptly and in any event within 30 days after receiving
such reports, copies of all management reports submitted to a Company
by its independent public accountants in connection with each audit
made by such accountants of the books of a Company or any Subsidiary;
(e) as soon as possible and in any event within five Business
Days of any material change in its customary accounting practices,
notice thereof and copies of all documentation relating thereto;
(f) as soon as such Company has become aware of the
occurrence of each Default or Event of Default, a statement of a
Responsible Officer of such Company setting forth details of such
Default or Event of Default and the action which such Company has
taken and proposes to take with respect thereto;
(g) as soon as (x) such Company has become aware of the
occurrence of any known material adverse development with respect to
any litigation, action, proceeding or labor controversy described in
Section 7.5 or (y) the commencement of any known labor controversy,
litigation, action or proceeding of the type described in Section 7.5,
notice thereof and copies of all documentation relating thereto;
(h) as soon as possible and in any event within 10 days after
the sending or filing thereof, copies of all reports which Interim
sends to any of its security holders, and all reports and registration
statements which any Company or any of its Subsidiaries files with the
Securities and Exchange Commission or any national (including any
foreign) securities exchange;
(i) not later than 45 days after each fiscal year end an
annual budget for the current fiscal year for Interim and its
Subsidiaries, on a consolidated basis, with respect to such fiscal
year;
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(j) immediately upon becoming aware of the occurrence of any
of the following events affecting Interim or any ERISA Affiliate,
notice with respect to the occurrence of any of the following:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code
by such Company or any ERISA Affiliate; or
(iv) the adoption of any amendment to a Plan subject
to Section 412 of the Code, if such amendment results in a
material increase in contributions or Unfunded Pension
Liability;
(k) immediately upon becoming aware of any other event or
circumstance (but in no event more than 10 Business Days after such
event or circumstance) which has had or is reasonably likely to have a
Material Adverse Effect, notice thereof and copies of all
documentation relating thereto;
(l) within 10 Business Days after the confirmed loss of any
contracts with a vendor the sales under which contracts aggregate at
least 10% of the revenues of Interim and its Subsidiaries on a
consolidated basis for the most recent four fiscal quarter period,
notice thereof;
(m) promptly after the issuance of any guaranty in excess of
$10,000,000 for the benefit of any Person, notice thereof and copies
of all documentation relating thereto;
(n) such other information respecting the financial condition
or operations of each Company or any of its Subsidiaries as any Bank
through the Agent may from time to time reasonably request.
8.2 Compliance with Laws, etc. Each Company will, and will cause each
of its Subsidiaries to, comply in all material respects with applicable laws,
rules, regulations and orders, such compliance to include (without limitation):
(a) subject to Section 9.6 and Section 9.7, the maintenance
and preservation of its corporate existence and qualification as a
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foreign corporation where such qualification is appropriate and, as to
qualification only, where the failure to be so qualified would have or
be reasonably likely to have a Material Adverse Effect on such Person
(for purposes of this Section 8.2(a), in the definition of "Material
Adverse Effect" all references to any Company or any Subsidiary shall
be deemed to refer solely to such Person); and
(b) the payment, before the same become delinquent, of all
material taxes, assessments and governmental charges imposed upon it
or upon its property the failure to pay or satisfy which could
reasonably be expected to have a Material Adverse Effect, except to
the extent being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books.
8.3 Maintenance of Properties. Each Company will, and will cause each
of its Subsidiaries to, maintain, preserve, protect and keep its properties in
good repair, working order and condition, and make necessary and required
repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times unless such Company
determines in good faith that the continued maintenance of any of its
properties is no longer economically desirable, except where the failure to do
so could not reasonably be expected to have a Material Adverse Effect.
8.4 Insurance. Each Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained with responsible insurance
companies insurance with respect to its material properties and business
(including business interruption insurance) against such casualties and
contingencies and of such types and in such amounts as is customary in the case
of similar businesses and will, upon request of the Agent or any Bank, furnish
to each Bank at reasonable intervals a certificate of a Responsible Officer of
such Company setting forth the nature and extent of all insurance maintained by
such Company and its Subsidiaries in accordance with this Section.
8.5 Books and Records. Each Company will, and will cause each of its
Subsidiaries to, keep books and records which accurately reflect all of its
business affairs and transactions, and permit the Agent and each Bank or any of
their respective representatives to visit all of its offices during normal
business hours, to discuss its and its Subsidiaries' financial matters with its
officers and independent public accountants (and each Company hereby authorizes
such independent public accountants to discuss such Company's and its
Subsidiaries' financial matters with each Bank or its representatives whether
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or not any representative of such Company is present) and to examine (and
photocopy extracts from) any of its books or other corporate records. Each
Company shall pay any photocopy charges (or such Company shall provide
photocopies) and any fees of such independent public accountants incurred in
connection with the Agent's or any Bank's exercise of its rights pursuant to
this Section.
8.6 Maintenance of Existence, etc. Subject to the provisions of
Section 9.7, each Company will, and will cause each of its Subsidiaries to,
conduct its business as it is conducted as of the Closing Date subject to
changes in the ordinary course and do such things as are reasonably necessary
to maintain, preserve, renew and keep in full force and effect its rights,
privileges, licenses, patents, patent rights, copyrights, trademarks, trade
names, franchises and other authority to the extent material and necessary for
the conduct of its respective business in the ordinary course as conducted from
time to time.
8.7 Additional Support Documents. (a) Interim will, and will cause
each Subsidiary that is an Active Subsidiary and not a Foreign Subsidiary other
than Spectrum, Spectrum Financial Corporation, Interim Receivables (but only so
long as Interim Receivables engages in no business other than as an
intermediary in a Permitted Receivable Securitization), whether on the
Effective Date or thereafter to execute and deliver as promptly as practical
but in any event within 45 days after (A) the creation or Acquisition of any
such Subsidiary or (B) such Subsidiary ceasing to be an Inactive Subsidiary, a
Guaranty, together with such resolutions, stock certificates, opinions of
counsel, incumbency certificates and other documentation as the Agent may
reasonably require.
(b) Interim will, and will cause each Subsidiary, to take such actions
as are necessary or as the Agent may from time to time request to ensure that
the Obligations are secured by a perfected Lien on 65% of each class of the
capital stock of each Direct Foreign Subsidiary which is an Active Subsidiary
(other than an Excluded Subsidiary) it being understood that within 45 days of
the creation or Acquisition of any Direct Foreign Subsidiary which is an Active
Subsidiary or any Inactive Subsidiary which is a Direct Foreign Subsidiary
becoming an Active Subsidiary, Interim will, or will cause its subsidiary, to
execute and deliver a Pledge Agreement (in such form and substance satisfactory
to the Agent) pledging such stock together with such resolutions, stock
certificates, opinions of counsel, incumbency certificates and other
documentation as the Agent may reasonably require.
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(c) Interim shall deliver to the Agent and the Banks a revised
Schedule 7.13 showing the addition of such Subsidiaries, and such revised
Schedule shall replace the existing Schedule and shall be deemed to have become
a part of this Agreement.
(d) Interim shall cause to be delivered to the Agent such other
documents as may be reasonably requested by the Agent from time to time with
respect to the Support Documents, including without limitation such documents
as may be necessary to continue the liens in property pledged in favor of the
Agent in connection with the transactions contemplated hereby.
8.8 Compliance with ERISA. Each Company will, and will cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code, if the failure to do any or all of
the foregoing could reasonably be expected to have a Material Adverse Effect.
8.9 Release of Pledge or Guaranty. In connection with any merger or
consolidation transaction permitted under Section 9.6 and in which transaction
any Person whose equity interests have been pledged to the Agent pursuant to
any Support Document shall not be the survivor thereof, upon the written
request to the Agent by, and at the expense of, the Companies, the Agent shall
take such action as shall be necessary, without impairing any remaining rights
under the Loan Documents, to release such equity interests from such pledge
under the applicable Support Documents; provided, however, that substantially
simultaneously with such release the Agent shall receive such Support Documents
and related share certificates, evidences of registration of lien, opinions and
other items as the Agent may reasonably require conferring upon the Agent (or
providing assurances as to) a perfected lien (of substantially equivalent or
higher priority as the released lien) in the equity interests (other than
directors' qualifying shares) of such resulting or surviving entity. In the
event of any merger or consolidation permitted under Section 9.6 or sale of all
ownership interest in any Subsidiary which is permitted hereunder, the Agent
shall be entitled to release the Guaranty of such Guarantor without the consent
of the Banks.
8.10 Swap Contracts. Not later than 90 days following the Closing
Date, cause outstanding Indebtedness for money borrowed as defined under
subclause (a) of the definition of Indebtedness (i) which bears interest at a
fixed rate or (ii) which is subject to a Swap Contract or other similar
arrangement, containing terms acceptable to the Agent, providing protection
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from material fluctuations in interest rates, to equal not less than 30% of
outstanding Indebtedness for money borrowed. Interim shall have a period of 90
days following the incurrence of additional Indebtedness for money borrowed
subsequent to the Closing Date to cause floating rate Indebtedness to become
fixed if required hereunder.
8.11 Year 2000 Compliant. Interim will promptly notify the Agent and
the Banks in the event Interim discovers or determines that any computer
application (including those affected by information received from its
suppliers and vendors) that is material to its or any of its Subsidiaries'
business and operations will not be Year 2000 Compliant on a timely basis,
except to the extent that such failure could not reasonably be expected to have
a Material Adverse Effect.
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ARTICLE IX
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Required Banks waive compliance in
writing:
9.1 Business Activities. Each Company will not, and will not permit
any of its Subsidiaries to, engage in any business activity, except the fields
of enterprise presently being conducted subject to changes in the ordinary
course, and such activities as may be incidental or related thereto.
9.2 Liens.
(a) Negative Pledge. Each Company will not, and will not
permit any Subsidiary to, cause or permit, or agree or consent to
cause or permit in the future (upon the happening of a contingency or
otherwise), any of their respective Property whether now owned or
hereafter acquired, to be subject to a Lien except the following (none
of which (except as expressly permitted under the Pledge Agreements)
shall be permitted to exist in respect of any collateral pledged to
the Agent under any of the Loan Documents):
(i) Liens for taxes, assessments or governmental
charges or levies on its Property if the same shall not at
the time be delinquent or thereafter can be paid without
penalty, or are being contested in good faith and by
appropriate proceedings and for which adequate reserves in
accordance with generally accepted accounting shall have been
set aside on its books;
(ii) Liens imposed by law, such as carriers',
warehousemen's, materialmen's and mechanics liens and other
similar liens arising in the ordinary course of business
which secure payment of obligations not more than 60 days
past due;
(iii) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits, or
similar legislation;
(iv) Utility easements, building restrictions and
such other encumbrances or charges against real property as
are of a nature generally existing with respect to properties
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of a similar character and which do not in any material way
affect the marketability of the same or interfere with the
use thereof in the business of Interim of the Subsidiaries;
(v) Liens arising under one or more Pledge
Agreements;
(vi) Other Liens securing Indebtedness not exceeding
an aggregate amount of $40,000,000.
(b) Financing Statements. Each Company will not, and will not
permit any Subsidiary to, sign or file a financing statement under the
Uniform Commercial Code of any jurisdiction that names such Company or
such Subsidiary as debtor, or sign any security agreement authorizing
any secured party thereunder to file any such financing statement,
except, in any such case, a financing statement filed or to be filed
to perfect or protect a security interest that such Company or such
Subsidiary is entitled to create, assume or incur, or permit to exist,
under the foregoing provisions of this Section 9.2, or to evidence for
informational purposes a lessor's interest in Property leased to such
Company or any such Subsidiary.
9.3 Financial Condition. Interim will not permit:
(i) As at the end of any fiscal quarter ending on or
after the Effective Date, for the four fiscal quarters then
ending, the Consolidated Interest Coverage Ratio to be less
than 3.50 to 1.00.
(ii) At any time on or after the Effective Date, the
Consolidated Net Worth of Interim and its Subsidiaries
(excluding in all events any losses) to be less than
$1,000,000,000 plus (A) 50% of the quarterly Consolidated Net
Income of Interim and its Subsidiaries (if positive) for each
fiscal quarter ending after the Effective Date (on a
cumulative basis) plus (B) 100% of net proceeds of equity
interests issued by Interim after the Effective Date.
(iii) The Consolidated Total Leverage Ratio as at
the end of any fiscal quarter ending on or after the
Effective Date for the four fiscal quarters then ending to
exceed 3.50 to 1.00.
9.4 Investments. Each Company will not, and will not permit any of its
Subsidiaries to, make, incur, assume or suffer to exist any Investment in any
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other Person, except, subject to the provisions of Section 8.7:
(a) Investments existing on the Effective Date and identified
in Schedule 9.4(a);
(b) Cash Equivalent Investments;
(c) so long as such Company demonstrates, in writing,
compliance with clause (h) below, Investments by such Company or any
of its Subsidiaries by way of acquisitions of an entity or entities or
assets of an entity or entities, within such Company's line of
business; provided, that the (i) Acquisition Price of an Acquisition
may not exceed 5% of Consolidated Net Worth without the prior written
consent of the Required Banks, and (ii) the consideration for an
Acquisition, other than cash and deferred cash payments (notes or
securities other than common equity securities), may not exceed 25% of
Consolidated Net Worth at the time of the Acquisition without the
prior written consent of the Required Banks, and no Acquisition
through a stock purchase may be made unless approved by the acquired
entity's Board of Directors or similar governing body; for the
purposes of this clause (c) "Acquisition Price" shall equal the cash
paid to the seller plus all notes or securities (other than common
equity securities of Interim) received by or delivered to the seller
in connection with such Acquisition;
(d) Investments in the capital stock of Active Subsidiaries
(including Atrium (U.S.-B) LLC); provided that after giving effect
thereto Interim is in compliance with Section 8.7;
(e) loans and advances to any Active Subsidiary; provided
that the aggregate amount of all loans and advances by Interim and its
Subsidiaries other than Foreign Subsidiaries to Foreign Subsidiaries
shall not at any time exceed a Dollar Equivalent amount equal to 10%
of Consolidated Net Worth, excluding the investment as at the Closing
Date in Michael Page and any Investments occurring pursuant to the
Financing Transaction;
(f) Investments by Interim in Spectrum at any time; provided
that, after giving effect to such Investments, Spectrum's total assets
are less than 5% of Consolidated Net Worth;
(g) in addition to the Investments permitted under the
foregoing clauses (a) through (f), Investments in Affiliates,
licensees and franchisees; provided, however, that the aggregate
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amount of all Investments permitted solely by this clause does not at
any time exceed 5% of Consolidated Net Worth (it being understood that
any such Investment which passes through more than one entity shall be
counted only once in determining compliance herewith);
(h) no Investment otherwise permitted by clause (c) shall be
permitted to be made if, immediately before or after giving effect
thereto, any Default or Event of Default shall have occurred and be
continuing. In determining whether or not a Default or Event of
Default would occur, the calculations set forth in Section 9.3 shall
be made on a pro forma basis, as of the end of the last fiscal quarter
prior thereto, as if the Investment had been made prior to the period
of any such calculations; and
(i) Investments permitted under Section 9.6.
9.5 Restricted Payments, etc. On and at all times after the date
hereof, Interim will not, and will not permit any of its Subsidiaries to,
declare, pay or make any dividend or distribution (in cash, property or
obligations) on any shares of any class of capital stock (now or hereafter
outstanding) of Interim or on any warrants, options or other rights with
respect to any shares of any class of capital stock (now or hereafter
outstanding) of Interim (other than dividends or distributions payable in its
common stock or warrants to purchase its common stock or splitups or
reclassifications of its stock into additional or other shares of its common
stock), or apply, or permit any of its Subsidiaries to apply, any of its funds,
property or assets to the purchase, redemption, sinking fund or other
retirement of, or agree or permit any of its Subsidiaries to purchase or
redeem, any shares of any class of capital stock (now or hereafter outstanding)
of Interim, or warrants, options or other rights with respect to any shares of
any class of capital stock (now or hereafter outstanding) of Interim.
Notwithstanding the foregoing and so long as there shall not exist an
Event of Default which is continuing,
(a) Interim may declare and pay dividends with respect to any
fiscal year in an amount not to exceed 10% of Consolidated Net Income
for such fiscal year;
(b) any wholly owned (other than with respect to directors'
qualifying shares) Subsidiary of Interim may pay dividends or other
distributions to Interim or any other such wholly owned Subsidiary of
Interim;
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(c) Interim may purchase or redeem or make open market
purchases of any class of capital stock in any fiscal year at an
aggregate cost not to exceed 7 1/2% of Consolidated Net Worth as at
the end of such fiscal year; and
(d) Interim or a Subsidiary may purchase and repurchase
certificates of membership interest in Atrium (U.S.-B) LLC, a
Subsidiary, as provided in the Financing Transaction.
9.6 Consolidation Merger, etc. Except as permitted by Section 9.4(c),
each Company will not, and will not permit any of its Subsidiaries to,
liquidate or dissolve, consolidate with, or merge into or with, any other
corporation, or (except as permitted by Section 9.4(c)) purchase or otherwise
acquire all or substantially all of the assets of any Person (or of any
division thereof) except:
(a) any Subsidiary may liquidate or dissolve voluntarily
into, and may merge with and into, such Company or any Subsidiary, and
the assets or stock of any Subsidiary may be purchased or otherwise
acquired by such Company or any Subsidiary; provided, however, that
(i) Agent shall have received at least 15 days' prior written notice
thereof and (ii) the applicable requirements of Section 8.7 shall have
been complied with in connection with such transaction and the Agent
shall have first received such additional documents as necessary, in
the opinion of the Agent, to ensure that the Banks continue to have a
first priority perfected security interest in any property pledged in
their favor as contemplated under the Support Documents and to
otherwise protect the interests of the Banks ; and
(b) such Company or any Subsidiary may merge with any other
Person if (i) no Default or Event of Default has occurred or would
occur after giving effect thereto, (ii) the general nature of its
business is not changed and (iii) the surviving entity is a Company
(in the case of a merger involving a Company) or a Subsidiary or an
entity which is wholly-owned by a wholly-owned Subsidiary (in the case
of a merger involving a Subsidiary); provided, however, that (i) Agent
shall have received at least 15 days' prior written notice thereof and
(ii) Companies shall have complied with the applicable requirements of
Section 8.7 in connection with such transaction and the Agent shall
have first received such additional documents as necessary, in the
opinion of the Agent, to ensure that the Banks continue to have a
first priority perfected security interest in any property pledged in
their favor as contemplated under the Support Documents and to
otherwise protect the interests of the Banks.
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9.7 Asset Dispositions, etc. Each Company will not, and will not
permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with respect to,
all or any substantial part of its assets (including accounts receivable and
capital stock of Subsidiaries) to any Person except for the sale of Norrell's
healthcare business, unless:
(a) such sale, transfer, lease, contribution or conveyance is
in the ordinary course of its business or is permitted by Section 9.6
or is the sale of accounts receivable in connection with a Permitted
Receivables Securitization;
(b) the net book value of such assets which are sold other
than those sold, transferred, leased, contributed or conveyed in the
ordinary course of business by Interim and its Subsidiaries since the
Closing Date or permitted pursuant to Section 9.7(a) does not exceed
in the aggregate $75,000,000; and
(c) such assets are not responsible for more than 15% of
consolidated revenues of Interim and its Subsidiaries (including
Norrell and its Subsidiaries) for the four fiscal quarter period
ending during the fiscal quarter in which such sale, lease or transfer
occurs.
9.8 Transactions with Affiliates. Each Company will not, and will not
permit any of its Subsidiaries to, enter into, or cause, suffer or permit to
exist, any arrangement or contract with any of its Affiliates that is not a
Guarantor unless such arrangement or contract is fair and equitable to such
Company or such Subsidiary and is an arrangement or contract of the kind which
would be entered into by a prudent Person in the position of such Company or
such Subsidiary with a Person that is not one of its Affiliates.
9.9 Negative Pledges, Restrictive Agreements, etc. Each Company will
not, and will not permit any of its Subsidiaries to, enter into any agreement
(excluding (A) this Agreement, (B) any other Loan Document, (C) the agreements
giving rise to a Permitted Receivables Securitization (with respect to
restrictions on the creation of Liens on accounts receivable transferred in
such Permitted Receivables Securitization only), (D) other Indebtedness
permitted under Section 9.12 (with respect to restrictions on the creation of
Liens on property, plant and equipment acquired with the proceeds of such
Property) and (E) those described on Schedule 9.9) prohibiting:
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(a) the creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter
acquired, or the ability of such Company or any Subsidiary to amend or
otherwise modify this Agreement or any other Loan Document; or
(b) the ability of any Subsidiary to make any payments,
directly or indirectly, to such Company by way of dividends, advances,
repayments of loans or advances, reimbursements of management and
other intercompany charges, expenses and accruals or other returns on
investments, or any other agreement or arrangement which restricts the
ability of any such Subsidiary to make any payment, directly or
indirectly, to such Company.
9.10 Subsidiaries' Voting Share. Each Company will not (a) permit any
of its Subsidiaries to issue voting shares to anyone other than such Company or
another wholly-owned Subsidiary, or (b) permit any of its wholly-owned
Subsidiaries to sell, transfer or otherwise dispose of the voting shares of any
Subsidiaries to any Person other than such Company or another of its
wholly-owned Subsidiaries, except as such events may occur under the Financing
Transaction.
9.11 ERISA. Interim shall not, and shall not suffer or permit any of
its ERISA Affiliates to: (a) engage in a prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Plan which has resulted
or could reasonably be expected to result in liability of such Company in an
aggregate amount in excess of $5,000,000; or (b) engage in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
9.12 Limitation on Indebtedness. The Companies shall not, and shall
not permit any of their Subsidiaries to, create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with respect
to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness existing on the date hereof and set forth in
Schedule 9.12, including any renewals or replacements on substantially
similar terms;
(c) Indebtedness arising in connection with Permitted
Receivables Securitizations;
(d) Subordinated Indebtedness; and
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(e) Additional Indebtedness of the Companies and the
Subsidiaries not to exceed an outstanding amount of $100,000,000;
provided, that the amount of such outstanding Indebtedness incurred by
Subsidiaries that are not Guarantors shall not at any time exceed
$50,000,000.
9.13 Change Fiscal Year. The Companies shall not change their fiscal
year.
9.14 Subordinated Indebtedness. Interim shall not, and shall not
permit any Subsidiary to, purchase, repay or redeem any Subordinated
Indebtedness other than in accordance with its terms and then only so long as
no Default or Event of Default shall exist both before and after giving effect
to such payment; provided, however, that Interim may purchase or redeem during
any fiscal year up to a principal amount of its 4.5% Subordinated Convertible
Notes due 2005 (the "Convertible Notes") not exceeding in the aggregate 5% of
Consolidated Net Worth at any time prior to the conversion of Convertible Notes
into common stock of Interim so long as (i) after giving effect to any such
redemption or repurchase there shall be available for borrowing pursuant to
Section 2.1 not less than $50,000,000, (ii) no Default or Event of Default
exists before giving effect to such purchase or redemption and (iii) Interim
shall have furnished to the Agent a Compliance Certificate as of the most
recent fiscal quarter end demonstrating that after giving effect to such
purchase or redemption no Default or Event of Default exists.
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ARTICLE X
EVENTS OF DEFAULT
10.1 Events of Default. Any of the following shall constitute an
"Event of Default":
(a) Non-Payment. Any Company fails to make, (i) when and as
required to be made herein, payments of any amount of principal of any
Loan or any L/C Borrowing or Interim Note Borrowing (including without
limitation any cash collateral deposits with respect thereto), or (ii)
within five days after the same becomes due, payment of any amount of
interest, fees or any other amount payable hereunder or under any
other Loan Document; provided that any interest, fees or other amounts
which are not paid on the due date shall bear interest at the Base
Rate plus 2% per annum after such due date; or
(b) Representation or Warranty. Any representation or
warranty by any Company or any Subsidiary made or deemed made herein
or in any other Loan Document, or which is contained in any
certificate, document or financial or other statement by any Company,
any Subsidiary, or any Responsible Officer of any Company, furnished
at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date
made or deemed made; or
(c) Specific Defaults. Any Company fails to perform or
observe any term, covenant or agreement contained in any of Section
8.1(f), 8.1(j) or 8.7 or in Article IX; or
(d) Other Defaults. Any Company or any Subsidiary party
thereto fails to perform or observe any other term or covenant
contained in this Agreement or any other Loan Document, and such
default shall continue unremedied for a period of 30 days after the
earlier to occur of (i) the date upon which written notice thereof is
given to each Company by the Agent or any Bank and (ii) the date any
of the Companies becomes aware thereof; or
(e) Cross-Default. (i) Any Company or any Subsidiary (A)
fails to make any payment in respect of any Indebtedness or Contingent
Obligations having an aggregate principal amount (including amounts
owing to all creditors under any combined or syndicated credit
arrangement) of more than $10,000,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise)
other than a default under any of the agreements entered into among
Interim and its Subsidiaries under the Financing Transaction but
including a default under the Financing and Interest Purchase
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Agreement between Interim and Bank of America National Trust and
Savings Association; or (B) fails to perform or observe any other
condition or covenant, or any other event shall occur or condition
exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, if the effect of such failure,
event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Indebtedness
(or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be
declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract
an Early Termination Date (as defined in such Swap Contract) resulting
from (1) any event of default under such Swap Contract as to which any
Company or any Subsidiary is the Defaulting Party (as defined in such
Swap Contract) or (2) any Termination Event (as so defined) as to
which any Company or any Subsidiary is an Affected Party (as so
defined), and, in either event, the Swap Termination Value owed by
such Company or such Subsidiary as a result thereof is greater than
$10,000,000; or
(f) Insolvency; Voluntary Proceedings. Any Company or any
Guarantor (i) is unable to pay its debts as they fall due, ceases or
fails to be solvent, or generally fails to pay, or admits in writing
its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in the
ordinary course (except as permitted under Section 8.7); (iii)
commences any Insolvency Proceeding with respect to itself; or (iv)
takes any action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against any Company or any Guarantor,
or any writ, judgment, warrant of attachment, execution or similar
process is issued or levied against a material part of any Company's
or any Guarantor's properties, and any such proceeding or petition
shall not be dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or fully
bonded, within 60 days after commencement, filing or levy; (ii) any
Company or any Guarantor admits the material allegations of a petition
against it in any Insolvency Proceeding, or an order for relief (or
similar order) is ordered in any Insolvency Proceeding; or (iii) any
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Company or any Guarantor acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession
(or agent therefor), or other similar Person for itself or a material
portion of its property or business; or
(h) Monetary Judgments. One or more non-interlocutory
judgments, non-interlocutory orders, decrees or arbitration awards is
entered against any Company or any Guarantor involving in the
aggregate a liability (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute
coverage) as to any single or related series of transactions,
incidents or conditions, of $10,000,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period
of 30 days after the entry thereof; or
(i) Non-Monetary Judgments. Any non-monetary judgment, order
or decree is entered against a Company or any Subsidiary which does or
would reasonably be expected to have a Material Adverse Effect, and
there shall be any period of 10 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(j) Change of Control. There occurs any Change of Control
other than at the Effective Date as a result of the Acquisition of
Norrell; or
(k) Guarantor/Pledgor Defaults. (i) Any Guarantor, or any
Company or Subsidiary party to a Pledge Agreement, fails in any
material respect to perform or observe any term, covenant or agreement
in its Guaranty or Pledge Agreement; or (ii) any Guaranty or Pledge
Agreement is for any reason partially (including with respect to
future advances) or wholly revoked or invalidated, or otherwise ceases
to be in full force and effect; or
(l) ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could
reasonably be expected to result in liability of a Company under Title
IV of ERISA to such Pension Plan, such Multiemployer Plan or the PBGC
in an aggregate amount in excess of $1,000,000; (ii) the aggregate
amount of Unfunded Pension Liability among all Pension Plans at any
time exceeds $1,000,000; or (iii) any Company or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an
aggregate amount in excess of $1,000,000; or
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(m) Interim Notes. The Companies fail to make payment of any
portion of the principal or interest on any of the Interim Notes when
the same shall be due.
10.2 Remedies. If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Required Banks,
(a) declare the commitments of each Bank to make Loans and
any obligation of any Issuing Bank to Issue Letters of Credit to be
terminated, whereupon such commitments shall be terminated;
(b) declare an amount equal to the maximum aggregate amount
that is or at any time thereafter may become available for payment
under any outstanding Letters of Credit or the Interim Note Guarantee
(whether or not any beneficiary shall have presented, or shall be
entitled at such time to present, the drafts or other documents
required to draw under such Letters of Credit or the Interim Note
Guarantee) to be immediately due and payable, declare the unpaid
principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by each Company;
(c) apply any cash or deposit account balances that were used
by the Companies to Cash Collateralize any Letters of Credit or the
Interim Note Guarantee that the Agent would otherwise be required to
return to the Companies pursuant to Section 3.7 or Section 4.6, as
applicable, to any outstanding Obligations; and
(d) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or
applicable law;
provided, however, that upon the occurrence of any event specified in
subsection (f) or (g) of Section 10.1 (in the case of clause (i) of subsection
(g) upon the expiration of the 60-day period mentioned therein), the obligation
of each Bank to make Loans and any obligation of the Issuing Bank to Issue
Letters of Credit shall automatically terminate and the unpaid principal amount
of all outstanding Loans and all interest and other amounts as aforesaid shall
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automatically become due and payable without further act of the Agent, the
Issuing Bank or any Bank and without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Companies;
and provided, further, that after any obligations with respect to any undrawn
Letter of Credit shall have been accelerated under clause (b) and if such
accelerated amount has been paid, the Banks shall return to the Companies
within 10 days after the expiration of such Letter of Credit, any amount not
drawn thereunder so long as no Obligations shall be due and payable.
10.3 Rights Not Exclusive. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
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ARTICLE XI
THE AGENT
11.1 Appointment, Powers and Immunities. (a) Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. The Agent (which term as used in this sentence and in
Section 11.5 and the first sentence of Section 11.6 hereof shall include its
Affiliates and its own and its Affiliates' officers, directors, employees, and
agents):
(i) shall not have any duties or responsibilities except
those expressly set forth in this Agreement and shall not be a trustee
or fiduciary for any Bank;
(ii) shall not be responsible to the Banks for any recital,
statement, representation, or warranty (whether written or oral) made
in or in connection with any Loan Document or any certificate or other
document referred to or provided for in, or received by any of them
under, any Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Loan Document, or
any other document referred to or provided for therein or for any
failure by any Company or Guarantor or any other Person to perform any
of its obligations thereunder;
(iii) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of
any covenants or agreements by any Company or Guarantor or the
satisfaction of any condition or to inspect the property (including
the books and records) of any Company or Guarantor or any of its
Subsidiaries or Affiliates;
(iv) except as set forth in Section 11.3, shall not be
required to initiate or conduct any litigation or collection
proceedings under any Loan Document; and
(v) shall not be responsible for any action taken or omitted
to be taken by it under or in connection with any Loan Document,
except for its own gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care; provided, that nothing contained herein
shall relieve such agents and attorneys-in-fact for its or their gross
negligence or wilful misconduct.
(b) The Issuing Bank shall act on behalf of the Banks with respect to
any Letters of Credit Issued by it and the documents associated therewith until
such time and except for so long as the Agent may agree at the request of the
Required Banks to act for such Issuing Bank with respect thereto; provided,
however, that the Issuing Bank shall have all of the benefits and immunities,
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including without limitation the right to resign under Section 11.7, (i)
provided to the Agent in this Article XI with respect to any acts taken or
omissions suffered by the Issuing Bank in connection with Letters of Credit
Issued by it or proposed to be Issued by it and the Application and Agreements
for Letters of Credit pertaining to the Letters of Credit as fully as if the
term "Agent" as used in this Article XI, included the Issuing Bank with respect
to such acts or omissions, and (ii) as additionally provided in this Agreement
with respect to the Issuing Bank.
11.2 Reliance by Agent. Each Agent-Related Person shall be entitled to
rely upon any certification, notice, instrument, writing, or other
communication (including, without limitation, any thereof by telephone or
telefacsimile) believed by it to be genuine and correct and to have been
signed, sent or made by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel (including counsel for any Company or
Guarantor), independent accountants, and other experts selected by the Agent.
The Agent may deem and treat the payee of any Note as the holder thereof for
all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 12.8 hereof. As
to any matters not expressly provided for by this Agreement, the Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Banks,
and such instructions shall be binding on all of the Banks; provided, however,
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to any Loan Document or applicable
law or unless it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking any such action.
11.3 Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless the Agent has
received written notice from a Bank or a Company specifying such Default or
Event of Default and stating that such notice is a "Notice of Default." In the
event that the Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Banks. The
Agent shall (subject to Section 11.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the
Required Banks, provided that, unless and until the Agent shall have received
such directions, the Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Banks.
11.4 Rights as Bank. With respect to its Revolving Commitment and 364
Day Loan Commitment and the Loans made by it and Letters of Credit issued by
it, NationsBank (and any successor acting as Agent) in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise the same as though it were not acting as the Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include the
Agent in its individual capacity. NationsBank (and any successor acting as
Agent) and its Affiliates may (without having to account therefor to any Bank)
accept deposits from, lend money to, make investments in, provide services to,
and generally engage in any kind of lending, trust, or other business with any
Company or Guarantor or any of its Subsidiaries or Affiliates as if it were not
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acting as Agent, and NationsBank (and any successor acting as Agent) and its
Affiliates may accept fees and other consideration from any Company or
Guarantor or any of its Subsidiaries or Affiliates for services in connection
with this Agreement or otherwise without having to account for the same to the
Banks.
11.5 Indemnification. The Banks agree to indemnify the Agent-Related
Persons (to the extent not reimbursed under Section 12.4 hereof, but without
limiting the obligations of the Companies under such Section) ratably in
accordance with their respective Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the
Agent-Related Persons (including by any Bank) in any way relating to or arising
out of any Loan Document or the transactions contemplated thereby or any action
taken or omitted by the Agent-Related Persons under any Loan Document; provided
that no Bank shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the Agent-Related Person to
be indemnified. Without limitation of the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any costs or
expenses payable by the Companies under Section 12.4, to the extent that the
Agent is not promptly reimbursed for such costs and expenses by the Companies.
The agreements contained in this Section 11.5 shall survive payment in full of
the Loans and all other amounts payable under this Agreement.
11.6 Non-Reliance on Agent and Other Banks. Each Bank agrees that it
has, independently and without reliance on the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Companies and Guarantors and their Subsidiaries and
decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under the Loan
Documents. Except for notices, reports, and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the affairs, financial condition, or
business of any Company or Guarantor or any of its Subsidiaries or Affiliates
that may come into the possession of the Agent or any of its Affiliates.
11.7 Successor Agent and Successor Issuing Bank. Either the Agent or
the Issuing Bank, respectively, may resign as Agent or Issuing Bank upon 30
days' notice to the Banks. If the Agent or Issuing Bank resigns under this
Agreement, the Required Banks shall appoint from among the Banks a successor
agent for the Banks or successor issuing bank, respectively. The appointment of
a successor issuing bank shall be subject to the consent of the Companies which
shall not be unreasonably withheld. If no successor agent or successor issuing
bank is appointed prior to the effective date of the resignation of the Agent
or the Issuing Bank respectively, the Agent or the Issuing Bank may appoint,
after consulting with the Banks and the Companies, a successor agent or
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successor issuing bank from among the Banks, subject to such Bank's acceptance
of such appointment. Upon the acceptance of its appointment as successor agent
or successor issuing bank hereunder, such successor agent or successor issuing
bank, respectively, shall succeed to all the rights, powers and duties of the
retiring Agent or the retiring Issuing Bank and the term "Agent" or "Issuing
Bank" shall mean such successor agent or successor issuing bank and the
retiring Agent's or the retiring Issuing Bank's appointment, powers and duties
as Agent or Issuing Bank shall be terminated. After any retiring Agent's or
retiring Issuing Bank's resignation hereunder as Agent or Issuing Bank, the
provisions of this Article XI and Sections 12.4 and 12.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
or Issuing Bank under this Agreement. If no successor agent or successor
issuing bank has accepted appointment as Agent or Issuing Bank by the date
which is 30 days following a retiring Agent's or retiring Issuing Bank's notice
of resignation, the retiring Agent's or retiring Issuing Bank's resignation
shall nevertheless thereupon become effective and the Banks shall perform all
of the duties of the Agent or Issuing Bank hereunder until such time, if any,
as the Required Banks appoint a successor agent or successor issuing bank as
provided for above.
11.8 Security Trustee. The Agent shall be the "Security Trustee" under
any of those Pledge Agreements which are expressed to be governed by English
law and shall accept without investigation, requisition or objection such title
as any person may have to the assets which are subject to the English Pledge
Agreements and shall not (a) be bound or concerned to examine or inquire into
the title of any person; (b) be liable for any defect or failure in the title
of any person, whether such defect or failure was known to it or might have
been discovered upon examination or inquiry and whether capable of remedy or
not; (c) be liable for any failure on its part to give notice of such Pledge
Agreement to any third party or otherwise perfect or register the security
created by such Pledge Agreement.
The Security Trustee shall hold the benefit of the English Pledge
Agreements upon trust for itself, the Banks and the Agent. Upon the appointment
of any successor Security Trustee, the resigning Security Trustee shall execute
and deliver such documents and do such other acts and things as may be
necessary to vest in the successor Security Trustee all the rights, title and
interests vested in the resigning Security Trustee.
11.9 Dutch Pledge Agreements. Without prejudice to any of the other
provisions of this Agreement or any of the other Loan Documents and solely for
the purpose of ensuring and preserving the validity and continuity of the
Pledge Agreements to be governed by Dutch law ("Dutch Pledge Agreements"),
Interim and the Companies hereby irrevocably and unconditionally acknowledge
and agree with the Banks, that the Agent shall, by way of joint and several
creditorship, in its own right be entitled to and be creditor of the
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Obligations. Interim, the Companies, the Banks and the Agent agree and
acknowledge that the Agent is entitled to collect and enforce any and all
rights under the Dutch Pledge Agreements in respect of the Obligations and it
is further agreed among the parties that the security granted by means of
execution of the Dutch Pledge Agreements to the Agent, is granted to the Agent
in its capacity as joint and several creditor of the Obligations.
11.10 Documentation Agent. None of the Banks identified in this
Agreement or any other Loan Document as the "Documentation Agent" shall have
any right, power, obligation, liability, responsibility or duty under this
Agreement or any other Loan Document other than those applicable to all Banks
as such. Each Bank acknowledges that it has not relied, and will not rely, on
any of the Banks so identified in deciding to enter into this Agreement or any
other Loan Document or in taking or refraining from taking any action hereunder
or thereunder or pursuant hereto or thereto.
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ARTICLE XII
MISCELLANEOUS
12.1 Amendments and Waivers. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to
any departure by any Company or any applicable Subsidiary therefrom, shall be
effective unless the same shall be in writing and signed by the Required Banks
(or by the Agent at the written request of the Required Banks) and each Company
and delivered to the Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such waiver, amendment, or consent shall,
unless in writing and signed by all the Banks and each Company and delivered to
the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank (or
reinstate any Commitment terminated pursuant to Section 10.2) or the
aggregate amount of Loans which may be made under this Agreement;
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or
other amounts due to the Banks (or any of them) hereunder or under any
other Loan Document;
(c) reduce the principal of, or the rate of interest
specified herein on, any Loan, or (subject to clause (ii) of the
proviso below) any fees or other amounts payable hereunder or under
any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for
the Banks or any of them to take any action hereunder; or
(e) amend this Section, or Section 2.16, or any provision
herein providing for consent or other action by all Banks; or
(f) release any party to a Guaranty or, except as expressly
provided for herein, release any collateral for any obligations
arising under the Loan Documents;
and, provided further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the Issuing Bank in addition to the Required Banks or
all the Banks, as the case may be, affect the rights or duties of the Issuing
Bank under this Agreement or any L/C-Related Document relating to any Letter of
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Credit Issued or to be Issued by it, (ii) no amendment, waiver or consent
shall, unless in writing and signed by NationsBank in addition to the Required
Banks or all the Banks, as the case may be, affect the rights or duties of
NationsBank as maker of the Interim Note Guarantee under this Agreement or any
Interim Note Related Documents, (iii) no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Required Banks or
all the Banks, as the case may be, affect the rights or duties of the Agent
under this Agreement or any other Loan Document or (iv) the Fee Letters may be
amended, or rights or privileges thereunder waived, in a writing executed by
the parties thereto. The Banks hereby consent to the termination of and release
by the Agent of stock of Subsidiaries held by the Agent pursuant ot the Stock
Pledge Agreement (U.S. Pledgors) dated as of May 1, 1997 and any supplement
thereto.
12.2 Notices.
(a) All notices, requests, consents, approvals, waivers and other
communications may be in writing or oral if confirmed in writing (which
includes confirmation by facsimile) at the address or number specified in
Schedule 12.2.
(b) All such notices, requests and communications shall, when sent by
overnight delivery, or transmitted by facsimile, be effective when delivered to
the recipient or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if hand delivered, upon delivery; except that
notices pursuant to Article II, Article III or Article XI to the Agent shall
not be effective until actually received by the Agent, and notices pursuant to
Article III to the Issuing Bank shall not be effective until actually received
by the Issuing Bank at the address specified for the "Issuing Bank" on Schedule
12.2.
(c) Any agreement of the Agent and the Banks herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Companies. The Agent and the Banks shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by a Company
to give such notice and the Agent and the Banks shall not have any liability to
a Company or other Person on account of any action taken or not taken by the
Agent or the Banks in reliance upon such telephonic or facsimile notice. The
obligation of the Companies to repay the Loans, L/C Obligations and the Interim
Note Obligations shall not be affected in any way or to any extent by any
failure by the Agent and the Banks to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Agent and the Banks of a
confirmation which is at variance with the terms reasonably understood by the
Agent and the Banks to be contained in the telephonic or facsimile notice.
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12.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
12.4 Costs and Expenses. The Companies shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse NationsBank (including in its capacity as Agent
and Issuing Bank) and the Arranger for all reasonable costs and expenses
incurred by NationsBank (including in its capacity as Agent and Issuing Bank)
and the Arranger in connection with the development, preparation, delivery, and
execution of, and any amendment, supplement, waiver or modification to (in each
case, whether or not consummated but only if requested or caused by a Company
or a Subsidiary), this Agreement, any other Loan Document and any other
documents prepared in connection herewith or therewith, and the consummation of
the transactions contemplated hereby and thereby, including reasonable Attorney
Costs incurred by NationsBank (including in its capacity as Agent and Issuing
Bank) and the Arranger with respect thereto such Attorney Costs of the Agent's
counsel, Smith Helms Mulliss & Moore, L.L.P., to be limited as set forth in a
letter between the Agent and Interim; and
(b) pay or reimburse the Agent, the Arranger and each Bank within
thirty days after invoice for all reasonable costs and expenses (including
Attorney Costs) incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or
any other Loan Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency Proceeding
or appellate proceeding).
The agreements in this Section shall survive payment of all other
Obligations.
12.5 Company Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Companies shall indemnify, defend and
hold harmless the Agent-Related Persons, and each Bank and each of its
respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, charges, expenses and disbursements (including Attorney Costs) of
any kind or nature whatsoever (other than expenses described in Section 12.4
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whether or not required to be reimbursed thereunder) which may at any time
(including at any time following repayment of the Loans, the termination of the
Letters of Credit and Interim Note Guarantee and the termination, resignation
or replacement of the Agent or replacement of any Bank) be imposed on, incurred
by or asserted against any such Person in any way relating to or arising out of
this Agreement or any document contemplated by or referred to herein or
therein, or the transactions contemplated hereby or thereby, or any action
taken or omitted by any such Person under or in connection with any of the
foregoing, including with respect to any investigation, litigation or
proceeding (including any Insolvency Proceeding or appellate proceeding)
related to or arising out of this Agreement or the Loans or Letters of Credit
or Interim Note Guarantee or the use of the proceeds thereof, or related to any
Offshore Currency transactions entered into in connection herewith, whether or
not any Indemnified Person is a party thereto (all the foregoing, collectively,
the "Indemnified Liabilities"); provided, that the Companies shall have no
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities resulting solely from the bad faith, gross negligence or willful
misconduct of such Indemnified Person; and provided further the Companies shall
have no obligations with respect to tax liabilities, funding costs or capital
costs of any Indemnified Person except as set forth in this Agreement. The
agreements in this Section shall survive payment of all other Obligations. The
Companies agree that they shall not enter into any settlement with respect to
any Indemnified Liabilities without the consent of the Indemnified Person
unless such settlement (i) does not result in any liability or admission of
wrong doing by the Indemnified Person and (ii) results in total and complete
release of all claims against such Indemnified Person.
At the election of any Indemnified Person, the Companies shall defend
such Indemnified Person using legal counsel mutually acceptable to the
Companies, the Agent, the Required Banks and such Indemnified Person, at the
sole cost and expense of the Companies. All amounts owing under this Section
shall be paid within 30 days after demand.
12.6 Marshalling; Payments Set Aside. Neither the Agent nor the Banks
shall be under any obligation to marshall any assets in favor of any Company or
any other Person or against or in payment of any or all of the Obligations. To
the extent that a Company makes a payment to the Agent or the Banks, or the
Agent or the Banks exercise their right of set-off, and such payment or the
proceeds of such set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Agent or such Bank in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Bank
severally agrees (to the extent it shall have shared in any such recovery) to
pay to the Agent upon demand its pro rata share of any amount so recovered from
or repaid by the Agent.
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12.7 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Companies may not assign or
transfer any of their rights or obligations under this Agreement without the
prior written consent of the Agent and each Bank.
12.8 Assignments, Participations, etc.
(a) Any Bank may, with the written consent of Interim (at all times
other than during the existence of an Event of Default) and the Agent and the
Issuing Bank, which consents shall not be unreasonably withheld (provided that
the withholding of consent by reason of any proposed assignment resulting in
the incurrence by the Companies of increased costs under Article V shall not be
deemed to be unreasonable), at any time assign and delegate to one or more
Eligible Assignees (provided that no written consent of the Companies, the
Agent or the Issuing Bank shall be required in connection with any assignment
and delegation by a Bank to an Eligible Assignee that is an Affiliate of such
Bank) (each an "Assignee") all, or any part of all, of the Loans, the
Commitment, the L/C Commitment, the L/C Obligations, the Interim Note
Commitment, the Interim Note Obligations, Swing Line Participations and the
other rights and obligations of such Bank hereunder, in a minimum aggregate
amount of $5,000,000; provided, however, that each Company and the Agent may
continue to deal solely and directly with such Bank in connection with the
interest so assigned to an Assignee until (A) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to each Company
and the Agent by such Bank and the Assignee; (B) such Bank and its Assignee
shall have delivered to each Company and the Agent an Assignment and Acceptance
in the form of Exhibit N ("Assignment and Acceptance") together with any Note
or Notes subject to such assignment; and (C) the assignor Bank or Assignee has
paid to the Agent a processing fee in the amount of $3,500; and provided,
further, the assignment may at the option of the assigning Bank and the
Assignee not assign any portion of any outstanding Bid Loans. Notwithstanding
the foregoing, no Bank may effect an assignment under this Section 12.8(a) if
after giving effect thereto its remaining aggregate Commitment shall be less
than $5,000,000, unless such assignment shall be part of a series of
transactions disclosed by such Bank to the Agent to effect the disposition of
all of such Bank's interests in the Loan Documents. A Bank may not assign a
portion of its 364 Day Commitment without the assignment of a ratable portion
of its Revolving Commitment.
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(b) From and after the date that the Agent notifies the assignor Bank
that it has received (and provided its consent with respect to) an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Bank
under the Loan Documents, and (ii) the assignor Bank shall, to the extent that
rights and obligations hereunder and under the other Loan Documents have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan Documents. Upon the
request of the Assignee, the Companies shall issue Notes to the Assignee in
lieu of and to replace the Notes then held by the assignor Bank, which assigned
Notes shall be returned by the assignor to the Companies.
(c) Within five Business Days after their receipt of notice from the
Agent that it has received an executed Assignment and Acceptance and payment of
the processing fee (and provided that they consent to such assignment in
accordance with Section 12.8(a)), the Companies shall execute and deliver to
the Agent a new Revolving Loan Note evidencing such Assignee's assigned
Revolving Loans and Revolving Commitment and a Bid Loan Note and a new 364 Day
Note evidencing such Assignee's assigned 364 Day Commitment and, if the
assignor Bank has retained a portion of its Revolving Loans and its Revolving
Commitment and 364 Day Loans and its 364 Day Commitment, a replacement
Revolving Loan Note in the principal amount of the Revolving Commitment it has
retained (such Revolving Loan Note to be in exchange for, but not in payment
of, the Revolving Loan Note held by such Bank) and a replacement 364 Day Note
in the principal amount of the 364 Day Commitment it has retained (such 364 Day
Note to be in exchange for, but not in payment of, the 364 Day Note held by
such Bank). Immediately upon payment of the processing fee under the Assignment
and Acceptance, this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitment of the assigning Bank
pro tanto.
(d) Any Bank or Designated Bidder may at any time sell to one or more
commercial banks or other Persons not Affiliates of a Company (a "Participant")
participating interests in any Loans, the Commitment of that Bank and the other
interests of that Bank or Designated Bidder (the "originating Bank") hereunder
and under the other Loan Documents; provided, however, that (i) the originating
Bank's obligations under this Agreement shall remain unchanged, (ii) the
originating Bank shall remain solely responsible for the performance of such
obligations, (iii) each Company, the Issuing Bank and the Agent shall continue
to deal solely and directly with the originating Bank in connection with the
originating Bank's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Bank shall transfer or grant any participating
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interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would require
unanimous consent of the Banks as described in the first proviso to Section
12.1. In the case of any such participation, the Participant shall be entitled
to the benefit of Sections 5.1, 5.2, 5.4, 5.5, 5.6 and 12.5 as though it were
also a Bank or Designated Bidder hereunder (provided that no Participant shall
be entitled to any payment under Section 5.1, 5.5 or 5.6 in excess of the
payment which would have been payable to the originating Bank if it had not so
sold a participation), and not have any rights under this Agreement, or any of
the other Loan Documents, and all amounts payable by the Companies hereunder
shall be determined as if such Bank had not sold such participation; except
that, if amounts outstanding under this Agreement are due and unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall be deemed to have the right of
set-off in respect of its participating interest, subject in all events to
Section 2.18 as if such Participant were a Bank, in amounts owing under this
Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Bank or Designated Bidder under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Bank or
Designated Bidder may at any time create a security interest in, or pledge all
or any portion of its rights under and interest in this Agreement and the Notes
held by it in favor of any Federal Reserve Bank in accordance with Regulation A
of the FRB or U.S. Treasury Regulation 31 CFR ss.203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
(f) Any assignment or participation shall be subject to the assignee's
or the participant's agreement to be bound by all applicable confidentiality
restrictions set forth herein.
(g) Notwithstanding an assignment, the Bank making the assignment
shall continue to have the benefits of Article V and Sections 12.4 and 12.5
with respect to the period prior to the assignment.
12.9 Designated Bidders. Any Bank may designate one Designated Bidder
to have a right to offer and make Bid Loans pursuant to Section 2.6; provided,
however, that (i) no such Bank may make more than one such designation, (ii)
each such Bank making any such designation shall retain the right to make Bid
Loans, and (iii) the parties to each such designation shall execute and deliver
to the Agent a Designation Agreement. Upon its receipt of an appropriately
completed Designation Agreement executed by a designating Bank and a designee
representing that it is a Designated Bidder, the Agent will accept such
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Designation Agreement and give prompt notice thereof to the Company, whereupon
such designation of such Designated Bidder shall become effective and such
designee shall become a party to this Agreement as a "Designated Bidder."
12.10 Confidentiality. Each Bank and Designated Bidder agrees to take
and to cause its Affiliates to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all information provided
to it by each Company or any Subsidiary, or by the Agent on such Company's or
Subsidiary's behalf, under this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such information other than
in connection with or in enforcement of this Agreement and the other Loan
Documents or in connection with other business now or hereafter existing or
contemplated with the Companies or any Subsidiary; except to the extent such
information (i) was or becomes generally available to the public other than as
a result of disclosure by the Agent, such Bank or Designated Bidder, or (ii)
was or becomes available from a source other than the Companies, provided that
such source is not bound by a confidentiality agreement with the Companies
known to the Bank or Designated Bidder; provided, however, that any Bank or
Designated Bidder may disclose such information (A) at the request or pursuant
to any requirement of any Governmental Authority to which such Bank or
Designated Bidder is subject or in connection with an examination of such Bank
or Designated Bidder by any such authority; (B) pursuant to subpoena or other
court process; (C) when required to do so in accordance with the provisions of
any applicable Requirement of Law; (D) to the extent reasonably required in
connection with any litigation or proceeding to which the Agent, any Bank, any
Designated Bidder or their respective Affiliates may be party; (E) to the
extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (F) to such Bank's or Designated
Bidder's independent auditors and other professional advisors provided that
such Person shall be notified of its obligation to keep such information
confidential to the same extent required of the Banks hereunder; (G) to any
Participant or Assignee, actual or potential, provided that such Person agrees
in writing to keep such information confidential to the same extent required of
the Banks hereunder; (H) as to any Bank, any Designated Bidder or its
Affiliate, as expressly permitted under the terms of any other document or
agreement regarding confidentiality to which the Companies or any Subsidiary is
party or is deemed party with such Bank or such Affiliate; and (i) to its
Affiliates. The Bank disclosing information pursuant to the above proviso
(except pursuant to clauses (A) , (E) , (F) , (G) , (H) or (I) shall to the
extent permitted by law give prior notice thereof to the Companies and shall
limit such disclosures to the information so required.
12.11 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank (or Affiliate) and Designated Bidder (any Affiliate) is
authorized at any time and from time to time, without prior notice to any
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Company, any such notice being waived by each Company to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final, but excluding deposits in
accounts which have been designated by Interim to the applicable Bank as
Payroll Accounts) at any time held by, and other indebtedness at any time owing
by, such Bank (or Affiliate) or Designated Bidder (or any Affiliate) to or for
the credit or the account of such Company against any and all Obligations then
due and owing, or in case of Letters of Credit, which may become due and owing,
to such Bank or Designated Bidder, now or hereafter existing, irrespective of
whether or not the Agent or such Bank or Designated Bidder shall have made
demand under this Agreement or any Loan Document. Each Bank and Designated
Bidder agrees promptly to notify each Company and the Agent after any such
set-off and application made by such Bank or Designated Bidder; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application.
12.12 Notification of Addresses of Lending Offices, Etc. Each Bank and
Designated Bidder shall notify the Agent in writing of any changes in the
address to which notices to such Bank and Designated Bidder should be directed,
of addresses of any Lending Office, of payment instructions in respect of all
payments to be made to it hereunder and of such other administrative
information as the Agent shall reasonably request.
12.13 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
12.14 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
12.15 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Companies, the Banks, the
Designated Bidders, the Agent and the Agent-Related Persons, and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any of the other Loan Documents.
12.16 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF FLORIDA NOTWITHSTANDING ITS EXECUTION OUTSIDE OF
THE STATE OF FLORIDA; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
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(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF FLORIDA OR
OF THE UNITED STATES FOR THE MIDDLE DISTRICT OF FLORIDA, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANIES, THE AGENT AND THE BANKS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE COMPANIES, THE DESIGNATED BIDDERS,
THE AGENT AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING 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 ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. THE COMPANIES, THE AGENT, THE DESIGNATED BIDDERS AND THE BANKS
EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY FLORIDA LAW.
12.17 Waiver of Jury Trial. THE COMPANIES, THE BANKS, THE DESIGNATED
BIDDERS AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON,
PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS,
OR OTHERWISE. THE COMPANIES, THE BANKS, THE DESIGNATED BIDDERS AND THE AGENT
EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE
THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION 12.17 AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS,
IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
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12.18 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Companies,
the Banks and the Agent, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
12.19 Judgment Currency. Each Company, the Agent and each Bank hereby
agree that if, in the event that a judgment is given in relation to any sum due
to the Agent or any Bank hereunder, such judgment is given in a currency (the
"Judgment Currency") other than that in which such sum was originally
denominated (the "Original Currency"), such Company agrees to indemnify the
Agent or such Bank, as the case may be, to the extent that the amount of the
Original Currency which could have been purchased by the Agent in accordance
with normal banking procedures on the Business Day following receipt of such
sum is less than the sum originally due hereunder in the Original Currency, and
if the amount so purchased exceeds the amount which could have been so
purchased had such purchase been made on the day on which such judgment was
given or, if such day is not a Business Day, on the Business Day immediately
preceding such judgment, the Agent or the applicable Bank agrees to remit such
excess to the Companies. If for the purposes of obtaining judgment in any court
it is necessary to convert a sum due hereunder in an Original Currency into a
Judgment Currency, the parties hereto agree,to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase such
Judgment Currency with such Original Currency on the Business Day preceding
that on which final judgment is given. The agreements in this Section shall
survive payment of all other Obligations.
12.20 Confirmation of Foreign Pledge Agreements. By execution of this
Agreement, each Company acknowledges that the Charge Over Shares dated as of
May 1, 1997 between Interim Services Inc. and the Agent, and the Charge Over
Shares dated as of May 1, 1997 between Interim Services (Europe) Inc. and the
Agent (collectively, the "Foreign Pledge Agreements") are, and shall continue
to be, in full force and effect as security for the Obligations and are hereby
ratified and confirmed in all respects. Each Company further agrees that all
references to the "Credit Agreement" in the Foreign Pledge Agreements shall be
to the Credit Agreement as amended and restated hereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in Charlotte by their proper and duly authorized
officers as of the day and year first above written.
WITNESS: INTERIM SERVICES INC.
By: /s/ Shannon C. Allen
-------------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
INTERIM SERVICES (EUROPE) INC.
By: /s/ Shannon C. Allen
-------------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
MICHAEL PAGE GROUP PLC
By: /s/ Shannon C. Allen
-------------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
INTERIM SERVICES WORLDWIDE HOLDING BV
By: /s/ Shannon C. Allen
-------------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
<PAGE> 146
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent and Issuing Bank
By: /s/ John E. Williams
--------------------------------------
Name: John E. Williams
Title: Managing Director
NATIONSBANK, NATIONAL ASSOCIATION,
as a Bank
By: /s/ John E. Williams
--------------------------------------
Name: John E. Williams
Title: Managing Director
<PAGE> 147
THE FIRST NATIONAL BANK OF CHICAGO,
as Documentation Agent and as a Bank
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
One First National Plaza
Suite 0167, 1-10
Chicago, Illinois 60670
Wire Transfer Instructions:
The First National Bank of Chicago
Chicago, Illinois
ABA #071000013
Account #4811528600000
Account Name: Loan Processing Dept.
Attention: Peggy Corcoran
Reference: Interim Services Inc.
<PAGE> 148
ABN AMRO BANK N.V., as a Managing Agent
and as a Bank
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
208 S. LaSalle, Suite 1500
Chicago, Illinois 60604-1003
Attention: Credit Administration
Wire Transfer Instructions:
ABN AMRO Bank N.V.
New York, New York
ABA #0260009580
F/O ABN AMRO Bank N.V.
Chicago Branch CPU
Account #650-001-1789-41
Reference: CPU (#00408972)
Interim Services Inc.
<PAGE> 149
THE CHASE MANHATTAN BANK, as a
Managing Agent and as a Bank
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
270 Park Avenue
New York, New York 10017
Wire Transfer Instructions:
The Chase Manhattan Bank
New York, New York
ABA #021000021
Account #I059420
Reference: Interim Services Inc.
Attention: __________________
<PAGE> 150
CITIBANK, N.A., as a Managing Agent and
as a Bank
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
400 Perimeter Center Terrace
Suite 600
Atlanta, Georgia 30346
Wire Transfer Instructions:
Citibank, N.A.
New York, New York
ABA #021000089
Account #40580628
Atlanta Receipts
Reference: Interim Services Inc.
<PAGE> 151
FIRST UNION NATIONAL BANK, as a
Managing Agent and as a Bank
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
200 S. Biscayne Boulevard, 15th Floor
Miami, Florida 33131
Wire Transfer Instructions:
First Union National Bank
Miami, Florida
ABA #063000021
Account #GL 1459162008
Account Name: Commercial Loan Services
Attention: Cindy Petry
Reference: Interim Services Inc.
<PAGE> 152
FLEET NATIONAL BANK, as a Managing Agent
and as a Bank
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
1 Federal Street
MAOFDO41
Boston, Massachusetts 02110-2010
Wire Transfer Instructions:
Fleet National Bank
Boston, Massachusetts
ABA # 011-000-138
Account # __________
Attention: _______________________
Reference: Interim Services Inc.
<PAGE> 153
SUNTRUST BANK, SOUTH FLORIDA, N.A.,
as a Managing Agent and as a Bank
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
25 Park Place, 25th Floor
Atlanta, Georgia 30303
Wire Transfer Instructions:
SunTrust Bank, South Florida, N.A.
ABA #067-006-076
Account #9607004110, Corporate Banking
Attention: Jennifer Campbell
Reference: Interim Services Inc.
<PAGE> 154
WACHOVIA BANK, N.A., as a Managing
Agent and as a Bank
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
191 Peachtree Street, 29th Floor
Atlanta, Georgia 30303
Wire Transfer Instructions:
Wachovia Bank, N.A.
Atlanta, Georgia
ABA #061000010
Account #18-171 498
Attention: Adrienne Durham
Reference: Interim Services Inc.
<PAGE> 155
ING BANK N.V.
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
P.O. Box 1800
1000 BV Amsterdam
The Netherlands
Wire Transfer Instructions:
Northern Trust Int. Banking Corp.
Account #100628-20230, SWIFT
CNORUS 33
In Favor of: ING Rotterdam
For Further Credit to:
Account #02.00.37.449 (ING)
Reference: Interim Services Inc.
<PAGE> 156
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, ATLANTA AGENCY
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
191 Peachtree Street, N.E.
Suite 3600
Atlanta, Georgia 30303-1757
Wire Transfer Instructions:
The Industrial Bank of Japan, Limited
New York Branch
New York, New York
ABA #026008345
For further credit to: IBJ Atlanta Agency
Account #2601-21014
Reference: Interim Services Inc.
<PAGE> 157
THE BANK OF NEW YORK
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
One Wall Street, 22nd Floor
New York, New York 10286
Wire Transfer Instructions:
The Bank of New York
New York, New York
ABA #021000018
Commercial Loan Servicing Department
Reference: Interim Services Inc.
<PAGE> 158
BANQUE NATIONALE DE PARIS
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
333 Clay, Suite 3400
Houston, Texas 77002
Wire Transfer Instructions:
BNP New York
New York, New York
ABA #026007689
Account #141011-001-69
Account Name: BNP Houston Agency
Attention: Donna Rose
Reference: Interim Services Inc.
<PAGE> 159
COMERICA BANK
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
500 Woodward Avenue, 9th Floor
MC 3280
Detroit, Michigan 48275-3280
Wire Transfer Instructions:
Comerica Bank
ABA #072000096
Account Name: Commercial Loan Servicing
Account #02-21585-90010
Reference: Interim Services, Inc.
<PAGE> 160
CREDIT SUISSE FIRST BOSTON
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
11 Madison Avenue
New York, New York 10010-3629
Wire Transfer Instructions:
The Bank of New York
New York, New York
ABA # 021000018
Name of Account: CSFB NY Trade Services
Account #890-0329-254
Reference: Interim Services Inc.
<PAGE> 161
HSBC BANK USA
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
140 Broadway
New York, New York 10005-1196
Wire Transfer Instructions:
HSBC Bank USA
ABA #021-001-088
Account #001-940-503
Attention: Asset Syndications
Reference: Interim Services Inc.
<PAGE> 162
KBC BANK N.V.
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
New York Branch
125 West 55th Street
New York, New York 10019
Wire Transfer Instructions:
Bank of New York
ABA #021-000-018
Name of Account: KBC Bank N.V.,
New York Branch
Account #801 301 5618
Reference: Interim Services Inc.
<PAGE> 163
THE NORTHERN TRUST COMPANY
By:
--------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Lending Office:
50 S. LaSalle Street, 11th Floor
Chicago, Illinois 60675
Wire Transfer Instructions:
The Northern Trust Company
ABA #071000152
Commercial Loan Account #5186401000
Credit to: Commercial Loan Dept.
Reference: Interim Services Inc.
<PAGE> 1
Exhibit 10.10
INTERIM SERVICES INC.
OUTSIDE DIRECTORS' COMPENSATION PLAN
JULY 1, 1999
Outside directors of the Company shall receive an annual retainer. The annual
retainer shall be determined by the Board of Directors at the regularly
scheduled meeting of the directors coinciding with the annual meeting of the
stockholders of the Company, and such annual retainer shall be effective for the
twelve month period commencing on the next July 1st. The Board of Directors may
designate the manner in which the annual retainer shall be payable including,
but not limited to, in cash, in shares of the Company's common stock or in any
combination thereof. Further, the Board of Directors may permit up to fifty
percent (50%) of the annual retainer to be deferred and paid to the directors in
the form of deferred stock units. Effective July 1, 1999, the annual retainer
payable to each outside director shall be $35,000.
Compensation for directors' attendance at meetings of the directors and/or board
committee meetings shall be determined by the Board of Directors at the
regularly scheduled meeting of the directors coinciding with the annual meeting
of the stockholders of the Company, and such compensation shall be effective for
the twelve month period commencing on the next July 1st. Effective July 1, 1999,
attendance at meetings of the directors shall be compensated at the rate of
$2,000 per meeting, payable in cash. Effective July 1, 1999, attendance at board
committee meetings shall be compensated at the rate of $1,500 per meeting,
payable in cash, except that the meeting fee for routine monthly telephonic
update meetings of the Executive Committee shall be $500 per meeting. In
addition, the chairperson of the Compensation Committee of the Board of
Directors and the chairperson of the Audit Committee shall each receive
additional annual compensation in the amount of $5,000, payable in cash.
Pursuant to the Company's Amended and Restated 1998 Stock Incentive Plan, each
outside director shall receive an annual stock option grant to purchase 4,000
shares of the Company's common stock, vesting on the first anniversary of the
date of grant. The annual stock option grant shall be made on the date
coinciding with the annual meeting of stockholders of the Company. In addition,
each outside director shall receive an annual grant of deferred stock units
valued at $20,000.
Outside directors shall be reimbursed for expenses incurred by them in
connection with their service as directors of the Company.
This Plan shall remain in effect until amended or terminated by the Board of
Directors.
<PAGE> 1
EXHIBIT 10.13
================================================================================
RECEIVABLES SALE AGREEMENT
DATED AS OF JULY 1, 1999
BETWEEN
INTERIM SERVICES INC. AND EACH OF ITS DIRECT AND INDIRECT
WHOLLY-OWNED SUBSIDIARIES WHO FROM TIME TO TIME
HEREAFTER BECOMES A SELLER HEREUNDER,
AS THE SELLERS,
AND
INTERIM SERVICES RECEIVABLES CORP.,
AS THE BUYER
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. AMOUNTS AND TERMS OF THE PURCHASES.....................................................................2
1.1. PURCHASES OF RECEIVABLES..................................................................................2
1.2. PAYMENT FOR THE PURCHASES.................................................................................3
1.3. PURCHASE PRICE CREDIT ADJUSTMENTS.........................................................................4
1.4. PAYMENTS AND COMPUTATIONS, ETC............................................................................5
1.5. TRANSFER OF RECORDS.......................................................................................5
1.6. CHARACTERIZATION; GRANTING CLAUSE.........................................................................6
ARTICLE II. REPRESENTATIONS AND WARRANTIES........................................................................6
2.1. REPRESENTATIONS OF THE SELLERS............................................................................6
(a) DUE INCORPORATION AND GOOD STANDING.....................................................................6
(b) DUE QUALIFICATION.......................................................................................6
(c) POWER AND AUTHORITY; DUE AUTHORIZATION..................................................................7
(d) BINDING OBLIGATIONS.....................................................................................7
(e) NONCONTRAVENTION........................................................................................7
(f) NO PROCEEDINGS..........................................................................................7
(g) BULK SALES ACT..........................................................................................7
(h) GOVERNMENT APPROVALS....................................................................................8
(i) FINANCIAL CONDITION.....................................................................................8
(j) NATURE OF RECEIVABLES...................................................................................8
(k) MARGIN REGULATIONS......................................................................................8
(l) QUALITY OF TITLE........................................................................................8
(m) ACCURACY OF INFORMATION.................................................................................8
(n) OFFICES.................................................................................................9
(o) TRADE NAMES.............................................................................................9
(p) ELIGIBLE RECEIVABLES....................................................................................9
(q) TAXES...................................................................................................9
(r) RELIANCE ON SEPARATE LEGAL IDENTITY.....................................................................9
(s) YEAR 2000 READINESS.....................................................................................9
(t) PAYMENTS TO THE APPLICABLE SELLER......................................................................10
(u) CREDIT AND COLLECTION POLICY...........................................................................10
(v) NOT AN INVESTMENT COMPANY..............................................................................10
ARTICLE III. CONDITIONS OF PURCHASES.............................................................................10
3.1. CONDITIONS PRECEDENT TO INITIAL PURCHASE.................................................................10
3.2. CONDITIONS PRECEDENT TO ALL PURCHASES....................................................................11
3.3. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES..........................................................12
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IV. COVENANTS............................................................................................12
4.1. AFFIRMATIVE COVENANTS OF THE SELLERS.....................................................................12
(a) COMPLIANCE WITH LAWS, ETC..............................................................................12
(b) PRESERVATION OF CORPORATE EXISTENCE....................................................................12
(c) RECEIVABLES REVIEW.....................................................................................12
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT................................................................13
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS..............................................13
(f) LOCATION OF RECORDS....................................................................................13
(g) CREDIT AND COLLECTION POLICIES.........................................................................13
(h) SEPARATE CORPORATE EXISTENCE OF THE BUYER..............................................................14
4.2. REPORTING REQUIREMENTS...................................................................................14
(a) PROCEEDINGS............................................................................................14
(b) CREDIT AND COLLECTION POLICY...........................................................................14
(c) OTHER..................................................................................................14
4.3. NEGATIVE COVENANTS.......................................................................................14
(a) SALES, LIENS, ETC......................................................................................14
(b) CHANGE IN CREDIT AND COLLECTION POLICY.................................................................14
(c) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES....................................................15
(d) NAME CHANGE, OFFICES AND RECORDS.......................................................................15
(e) ACCOUNTING FOR PURCHASES...............................................................................15
(f) MERGERS AND CONSOLIDATIONS.............................................................................15
ARTICLE V. JOINDER OF ADDITIONAL SELLERS.........................................................................16
5.1. ADDITION OF NEW SELLERS..................................................................................16
5.2. DOCUMENTATION............................................................................................16
ARTICLE VI. ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE RECEIVABLES......................................16
6.1. RIGHTS OF THE BUYER......................................................................................16
6.2. RESPONSIBILITIES OF THE SELLERS..........................................................................17
(a) COLLECTION PROCEDURES..................................................................................17
(b) PERFORMANCE UNDER CONTRACT.............................................................................17
(c) POWER OF ATTORNEY......................................................................................17
6.3. FURTHER ACTION EVIDENCING PURCHASES......................................................................17
6.4. APPLICATION OF COLLECTIONS...............................................................................18
ARTICLE VII. INDEMNIFICATION.....................................................................................18
7.1. INDEMNITIES BY THE SELLERS...............................................................................18
(a) GENERAL INDEMNITY......................................................................................18
7.2. CONTRIBUTION.............................................................................................20
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE VIII. MISCELLANEOUS......................................................................................20
8.1. WAIVERS AND AMENDMENTS...................................................................................20
8.2. NOTICES, ETC.............................................................................................21
8.3. NO WAIVER; CUMULATIVE REMEDIES...........................................................................21
8.4. BINDING EFFECT; ASSIGNABILITY............................................................................21
8.5. GOVERNING LAW............................................................................................21
8.6. COSTS, EXPENSES AND TAXES................................................................................22
8.7. SUBMISSION TO JURISDICTION...............................................................................22
8.8. WAIVER OF JURY TRIAL.....................................................................................22
8.9. CAPTIONS AND CROSS REFERENCES; INCORPORATION BY REFERENCE................................................23
8.10. EXECUTION IN COUNTERPARTS...............................................................................23
8.11. ACKNOWLEDGMENT AND AGREEMENT............................................................................23
8.12. NO PROCEEDINGS..........................................................................................23
</TABLE>
iii
<PAGE> 5
RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT (as amended, supplemented,
restated or otherwise modified from time to time, this "AGREEMENT"), dated as of
July 1, 1999, is entered into by and between:
(1) Interim Services Inc., a Delaware corporation (the
"PARENT"), Interim Services Atlantic LLC, a Delaware limited liability
company ("INTERIM-ATLANTIC"), Interim Services Pacific LLC, a Delaware
limited liability company ("INTERIM-PACIFIC"), Interim Assessment
Services Inc. (f/k/a HR Easy Inc.), a North Carolina corporation
("INTERIM ASSESSMENT"), Saratoga Institute Inc., a California
corporation ("SARATOGA"), Michael Page International Inc., a Delaware
corporation ("MICHAEL PAGE"), and each of the other direct or indirect,
wholly-owned subsidiaries of the Parent who hereafter becomes a party
hereto by executing a joinder agreement in the form of Exhibit E hereto
(each, a "JOINDER AGREEMENT"), as sellers, and
(2) Interim Services Receivables Corp., a Delaware
corporation, as purchaser (the "BUYER").
UNLESS OTHERWISE INDICATED, CAPITALIZED TERMS USED IN THIS AGREEMENT ARE DEFINED
IN ANNEX A HERETO OR IN THE CREDIT AND SECURITY AGREEMENT REFERENCED THEREIN.
W I T N E S S E T H :
WHEREAS, the Parent owns, directly or indirectly all of the
issued and outstanding Equity Interests of each of the other Sellers;
WHEREAS, the Buyer is a limited purpose corporation, all of
the issued and outstanding shares of capital stock of which are owned
by the Parent; and
WHEREAS, the Sellers desire to sell Receivables and Related
Rights owned from time to time by the Sellers to the Buyer, and the
Buyer is willing, on the terms and subject to the conditions set forth
herein, to purchase Receivables and Related Rights from the Sellers.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
<PAGE> 6
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1 Purchases of Receivables.
(a) Effective on the Applicable Closing Date for each Seller,
in consideration for the Purchase Price and upon the terms and subject
to the conditions set forth herein, each Seller does hereby sell,
assign, transfer, set-over and otherwise convey to the Buyer, without
recourse (except to the extent expressly provided herein), and the
Buyer does hereby purchase from such Seller, all of such Seller's
right, title and interest in and to such Seller's Initial Receivables
and all Related Rights with respect thereto.
(b) Effective on each Business Day after each Seller's
Applicable Closing Date and prior to its Sale Termination Date, in
consideration for the Purchase Price and upon the terms and subject to
the conditions set forth herein, such Seller does hereby sell, assign,
transfer, set-over and otherwise convey to the Buyer, without recourse
(except to the extent expressly provided herein), and the Buyer does
hereby purchase from such Seller, all of such Seller's right, title and
interest in and to such Seller's Additional Receivables and all Related
Rights with respect thereto.
(c) It is the intention of the parties hereto that each sale
of Receivables and Related Rights made hereunder shall constitute a
"sale of accounts" (as such term is used in Article 9 of the UCC) or an
outright sale of General Intangibles, which sales are absolute and
irrevocable and provide the Buyer with the full benefits of ownership
of the Receivables and the associated Related Rights. Except for the
Purchase Price Credits owed pursuant to Section 1.3, each sale of
Receivables hereunder is made without recourse to the applicable
Seller; provided, however, that (i) each Seller shall be liable to the
Buyer for all representations, warranties and covenants made by such
Seller pursuant to the terms of the Transaction Documents to which such
Seller is a party, and (ii) such sale does not constitute and is not
intended to result in an assumption by the Buyer or any assignee
thereof of any obligation of such Seller or any other Person arising in
connection with the Receivables, the related Invoices or Contracts
and/or other Related Rights or any other obligations of such Seller. In
view of the intention of the parties hereto that the purchases of
Receivables made hereunder shall constitute sales of such Receivables
rather than loans secured thereby, each Seller agrees that it will, on
or prior to its Applicable Closing Date, mark its master data
processing records relating to its Receivables with the legend required
by SECTION 3.1(i) hereof. Upon the request of the Buyer or the
Collateral Agent, each Seller will execute and file such financing or
continuation statements, or amendments thereto or assignments thereof,
and such other instruments or notices, as may be necessary or
appropriate to perfect and maintain the perfection of the Buyer's
ownership interest in the Receivables and the Related Rights or as the
Buyer or the Collateral Agent may reasonably request.
2
<PAGE> 7
Section 1.2 Payment for the Purchases.
(a) The Purchase Price for the purchase of Initial Receivables
and Related Rights from any Seller shall be payable in full by the
Buyer to such Seller on the Applicable Closing Date, and shall be paid
to such Seller in the following manner:
(i) by delivery of immediately available funds, to
the extent of funds made available to the Buyer from its
borrowings under the Credit and Security Agreement,
Subordinated Loans made by the Parent in its sole discretion
or other cash on hand; and
(ii) the balance, by delivery of the proceeds of a
Subordinated Loan from the applicable Seller to the Buyer in a
principal amount not to exceed the least of (A) the remaining
unpaid portion of such Purchase Price, and (B) the maximum
Subordinated Loan that could be borrowed without rendering the
Buyer's net worth less than the amount required by Section
7.03(g) of the Credit and Security Agreement.
The Purchase Price for each purchase of Additional Receivables and Related
Rights shall be due and owing in full by the Buyer to the applicable Seller on
the date of such purchase (except that the Buyer may, with respect to any such
purchase, offset against such Purchase Price any amounts owed by such Seller to
the Buyer hereunder and which have become due but remain unpaid) and shall be
paid to such Seller in the manner provided in the following paragraphs (b), (c)
and (d).
(b) With respect to any purchase of Additional Receivables and
Related Rights from any Seller, the Buyer shall pay the Purchase Price
therefor on the next subsequent Settlement Date in accordance with
SECTION 1.2(d) and in the following manner:
FIRST, by delivery of immediately available funds, to the
extent of Available Funds; and
SECOND, by delivery of the proceeds of a Subordinated Loan,
PROVIDED that the making of any such Subordinated Loan shall be subject
to the provisions set forth in SECTION 1.2(a)(ii).
Subject to the limitations set forth in SECTION 1.2(a)(ii), each of the Sellers
irrevocably agrees to advance each Subordinated Loan requested by the Buyer on
or prior to such Seller's Sale Termination Date. The Subordinated Loans owing to
each Seller shall be evidenced by, and shall be payable in accordance with the
terms and provisions of its Subordinated Note and shall be payable solely from
Available Funds. Each Seller is hereby authorized by the Buyer to endorse on the
schedule attached to its Subordinated Note an appropriate notation evidencing
the date and amount of each Subordinated Loan thereunder, as well as the date of
each payment with respect thereto, PROVIDED that the failure to make such
notation shall not affect any obligation of the Buyer thereunder.
3
<PAGE> 8
(c) On each Reporting Date after the Applicable Closing Date,
each Seller shall (or shall require the Servicer to) deliver to the
Buyer and the Agents a report in substantially the form of Exhibit A
hereto (each such report being herein called a "PURCHASE REPORT") with
respect to the Receivables sold by such Seller to the Buyer during the
Settlement Period then most recently ended. Each such Purchase Report
shall list the applicable Seller separately and shall specify, as
applicable: (i) the Initial Receivables and/or Additional Receivables
sold by such Seller during the Settlement Period then most recently
ended, and (ii) the amount of the Receivables described in the
foregoing clause (i) that were Eligible Receivables on the date they
were acquired by the Buyer.
(d) Although the Purchase Price for each purchase of
Additional Receivables and Related Rights shall be due and payable in
full by the Buyer to the applicable Seller on the date of such
purchase, settlement of the Purchase Price between the Buyer and such
Seller shall be effected on a monthly basis on Settlement Dates with
respect to all purchases within the same Settlement Period and based on
the information contained in the Purchase Report delivered for such
Settlement Period pursuant to SECTION 1.2(c). Although cash settlements
shall be effected on Settlement Dates, increases or decreases in the
Subordinated Loans shall be deemed to have occurred and shall be
effective as of the last Business Day of the Settlement Period to which
such settlement relates.
Section 1.3 Purchase Price Credit Adjustments. If on any day:
(a) the Unpaid Balance of any Receivable is reduced as a
result of any rejected services, any cash discount, or any other
adjustment by the applicable Seller or any Affiliate thereof, or as a
result of any tariff or other governmental or regulatory action, or
(b) the Unpaid Balance of any Receivable is reduced or
canceled as a result of a setoff in respect of any claim by the Obligor
thereof (whether such claim arises out of the same or a related or an
unrelated transaction), or
(c) the Unpaid Balance of any Receivable is reduced on account
of the obligation of the applicable Seller Party or any Affiliate
thereof to pay to the related Obligor any rebate or refund, or
(d) the Unpaid Balance of any Receivable is less than the
amount included in the Purchase Report including such Receivable (for
any reason other than such Receivable becoming a Defaulted Receivable),
or
(e) any of the representations or warranties of the applicable
Seller set forth in Section 2.1(j), (l) or (p) was not true when made
with respect to any Receivable sold by it to the Buyer, or any of the
representations or warranties of the applicable Seller set forth in
Section 2.1(l) is no longer true with respect to any Receivable sold by
it,
then, in such event, the Buyer shall be entitled to a credit (each, a "PURCHASE
PRICE CREDIT") against the Purchase Price otherwise payable hereunder equal to
(i) the amount of such reduction,
4
<PAGE> 9
cancellation or overstatement, in the case of the preceding clauses (a), (b),
(c) and (d), and (ii) in the full amount of the Unpaid Balance of such
Receivable in the case of the preceding clause (e). If such Purchase Price
Credit exceeds the original Unpaid Balance of the Receivables to be sold by the
applicable Seller on the date of a purchase, then the applicable Seller shall
pay the remaining amount of such Purchase Price Credit in cash not later than
the next Settlement Date PROVIDED that if such Seller's Sale Termination Date
has not occurred, such Seller shall be allowed to deduct the remaining amount of
such Purchase Price Credit from any Indebtedness owed to it under its
Subordinated Note.
Section 1.4 PAYMENTS AND COMPUTATIONS, ETC. All amounts to be paid or
deposited by the Buyer hereunder shall be paid or deposited in accordance with
the terms hereof on the day when due in immediately available funds to the
account of the applicable Seller designated from time to time by such Seller or
as otherwise directed by such Seller. In the event that any payment owed by any
Person hereunder becomes due on a day that is not a Business Day, then such
payment shall be made on the next succeeding Business Day. If any Person fails
to pay any amount hereunder when due, such Person agrees to pay, on demand,
interest on the past due amount at the Default Rate until paid in full;
PROVIDED, HOWEVER, that such interest shall not at any time exceed the maximum
rate permitted by applicable law. All computations of interest payable hereunder
shall be made on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed.
Section 1.5 TRANSFER OF RECORDS.
(a) In connection with the purchases of Receivables hereunder,
each Seller hereby sells, transfers, assigns and otherwise conveys to
the Buyer all of such Seller's right and title to and interest in the
Records relating to all Receivables sold hereunder, without the need
for any further documentation in connection with any purchase. In
connection with such transfer, each Seller hereby grants to each of the
Buyer, the Collateral Agent and the Servicer an irrevocable,
non-exclusive license to use, without royalty or payment of any kind,
all software used by such Seller to account for its Receivables, to the
extent necessary to administer such Receivables, whether such software
is owned by such Seller or is owned by others and used by such Seller
under license agreements with respect thereto, PROVIDED that should the
consent of any licensor of such Seller to such grant of the license
described herein be required, such Seller hereby agrees that upon the
request of the Buyer, the Servicer or the Collateral Agent, such Seller
will use its reasonable efforts to obtain the consent of such
third-party licensor. The license granted hereby shall be irrevocable,
and shall terminate on the date this Agreement terminates in accordance
with its terms.
(b) Each Seller (i) shall take such action requested by the
Buyer and/or the Collateral Agent, from time to time hereafter, that
may be necessary or appropriate to ensure that the Buyer has an
enforceable ownership interest in the Records relating to the
Receivables purchased from such Seller hereunder, and (ii) shall use
its reasonable efforts to ensure that the Buyer and the Servicer each
has an enforceable right (whether by license or sublicense or
otherwise) to use all of the computer software used to account for the
Receivables and/or to recreate such Records.
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Section 1.6 CHARACTERIZATION; GRANTING CLAUSE. If, notwithstanding the
intention of the parties expressed in SECTION 1.1(b), any sale by any of the
Sellers to the Buyer of Receivables hereunder shall be characterized as a
secured loan and not a sale, then this Agreement shall be deemed to constitute a
security agreement under the UCC and other applicable law. For this purpose and
without being in derogation of the parties' intention that each sale of
Receivables hereunder shall constitute a true sale thereof, each of the Sellers
hereby grants to the Buyer a duly perfected security interest in all of such
Seller's right, title and interest in, to and under all of such Seller's
Receivables now existing and hereafter arising, and all Related Rights with
respect thereto, each Lock-Box Account, and all proceeds of the foregoing, which
security interest shall be prior to all other Liens thereto. After the
occurrence of a Seller's Sale Termination Event, the Buyer and its assigns shall
have as against the applicable Seller, in addition to the rights and remedies
which they may have under this Agreement, all other rights and remedies provided
to a secured creditor after default under the UCC and other applicable law,
which rights and remedies shall be cumulative.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS OF THE SELLERS. In order to induce the
Buyer to enter into this Agreement and to make purchases hereunder, each Seller
hereby makes the following representations and warranties as to itself:
(a) DUE INCORPORATION AND GOOD STANDING. Such Seller is a
corporation, partnership or limited liability company, as the case may
be, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its formation.
(b) DUE QUALIFICATION. Such Seller is duly qualified to do
business as a foreign corporation, partnership or limited liability
company, as the case may be, in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business requires
such qualification, licenses or approvals, except where the failure to
be so qualified or have such licenses or approvals would not have a
Seller Material Adverse Effect.
(c) POWER AND AUTHORITY; DUE AUTHORIZATION. Such Seller (i)
has all necessary power, authority and legal right (A) to execute and
deliver this Agreement and the other Transaction Documents to which it
is a party, (B) to carry out the terms of this Agreement and each of
the other Transaction Documents to which it is a party, (C) to service
or sub-service the Receivables and the Related Rights in accordance
with this Agreement and the Credit and Security Agreement, and (D) to
sell and assign the Receivables and Related Rights to be sold and
assigned by it to the Buyer hereunder on the terms and conditions
herein provided, and (ii) has duly authorized by all necessary company
action the execution, delivery and performance of this Agreement and
each of the other Transaction Documents to which it is a party.
(d) BINDING OBLIGATIONS. This Agreement and each other
Transaction Document to which such Seller is a party in any capacity
constitutes, a legal, valid and
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binding obligation of such Seller, enforceable in accordance with its
terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability).
(e) NONCONTRAVENTION. The execution, delivery and performance
by such Seller of this Agreement and each other Transaction Document to
which it is party do not and will not: (i) contravene the terms of any
of its Governing Documents; (ii) conflict with or result in a material
breach or contravention of, or the creation of any Lien under, any
document evidencing any material Contractual Obligation to which such
Person is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its property is subject;
or (iii) violate any Requirement of Law.
(f) NO PROCEEDINGS. There are no actions, suits, labor
controversies, proceedings, claims or disputes pending, or to the best
knowledge of such Seller, threatened or contemplated, at law, in
equity, in arbitration or before any Governmental Authority, against
such Seller or any of its properties which: (i) purport to affect or
pertain to this Agreement or any other Transaction Document to which
such Seller is a party, or any of the transactions contemplated hereby
or thereby; or (ii) if determined adversely to such Seller, would
reasonably be expected to have a Seller Material Adverse Effect. No
injunction, writ, temporary restraining order or order of any nature
has been issued by any court or other Governmental Authority purporting
to enjoin or restrain the execution, delivery or performance of this
Agreement or any other Transaction Document to which such Seller is a
party, or directing that the transactions provided for herein or
therein not be consummated as herein or therein provided. Such Seller
is generally subject to suit and neither it nor any of its properties
or revenues enjoys any right of immunity from judicial proceedings.
(g) BULK SALES ACT. No transaction contemplated hereby
requires compliance with any bulk sales act or similar law.
(h) GOVERNMENT APPROVALS. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, such
Seller of this Agreement or any other Transaction Document to which
such Seller is party, EXCEPT for the filing of UCC financing statements
naming such Seller, as debtor or seller, the Buyer, as secured party or
purchaser, and the Collateral Agent, as assignee, all of which filings
have been made and remain in full force and effect as of the date of
each sale of Receivables and Related Rights by such Seller hereunder.
(i) FINANCIAL CONDITION. On the date of each sale by such
Seller of a Receivable hereunder (both before and after giving effect
to such sale), such Seller is solvent.
(j) NATURE OF RECEIVABLES. Each Receivable conveyed by such
Seller constitutes an "Account" or a "General Intangible."
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(k) MARGIN REGULATIONS. The use of all funds obtained by such
Seller under this Agreement or any other Transaction Document to which
it is a party will not conflict with or contravene any of Regulations
T, U and X promulgated by the Board of Governors of the Federal Reserve
System from time to time.
(l) QUALITY OF TITLE. Each Receivable (together with the
Related Rights with respect thereto) which is to be sold to the Buyer
by such Seller hereunder is or shall be, immediately prior to such
sale, owned by such Seller, free and clear of any Lien. Whenever the
Buyer makes a purchase of a Receivable hereunder, it shall have
acquired a valid and perfected ownership interest free and clear of any
Lien (other than any Lien arising as the result of the Transaction
Documents or any action taken by the Buyer) in such Receivable and the
Related Rights with respect thereto. No financing statement or other
instrument similar in effect covering any Receivable or any Related
Right of such Seller is on file in any recording office except such as
may be filed (1) in favor of such Seller in accordance with the related
Contracts, (2) in favor of the Buyer in accordance with this Agreement
or (3) in favor of the Collateral Agent in accordance with the Credit
and Security Agreement.
(m) ACCURACY OF INFORMATION. No information, exhibit,
financial statement, document, book, record or report furnished or to
be furnished, in each case in writing, by or on behalf of such Seller
to the Buyer, the Lenders or the Agents pursuant to any Transaction
Document or any transaction contemplated hereby or thereby was or will
be inaccurate in any material respect as of the date it was or will be
dated or (except as otherwise disclosed to the Buyer, the Lenders and
the Agents at such time) as of the date so furnished, or contained or
(in the case of information or other materials to be furnished in the
future) will contain any material misstatement of fact or omitted or
(in the case of information or other materials to be furnished in the
future) will omit to state a material fact or any fact necessary to
make the statements contained therein not materially misleading in
light of the circumstances made or presented.
(n) OFFICES. Such Seller's federal taxpayer identification
number, principal place of business and chief executive office is
located at the address set forth in Exhibit C to this Agreement or its
Joinder Agreement, as applicable, and the offices where such Seller
keeps all its books, records and documents evidencing the Receivables,
the related Contracts and all purchase orders and other agreements
related to such Receivables are located at the address specified in
such Exhibit C or its Joinder Agreement (or at such other locations,
notified to the Buyer and the Collateral Agent in accordance with this
Agreement, in jurisdictions where all action necessary to perfect the
Buyer's ownership interest in such Receivables and the Related Rights
with respect thereto has been taken and completed).
(o) TRADE NAMES. Except as disclosed on Schedule 2.1(o) to
this Agreement, as the same may be amended from time to time, or to its
Joinder Agreement, if applicable, such Seller does not use in respect
of the Receivables any trade name other than its actual corporate,
partnership or limited liability company name.
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(p) ELIGIBLE RECEIVABLES. Each of such Seller's Receivables
that was reflected as an Eligible Receivable in the applicable Purchase
Report was an Eligible Receivable on the date such Receivable was sold
to the Buyer.
(q) TAXES. Such Seller has filed all material tax returns and
reports required by law to have been filed by it and has paid all taxes
and governmental charges thereby shown to be owing, except any such
taxes which are not yet delinquent or are being diligently contested in
good faith by appropriate proceedings and for which adequate reserves
in accordance with generally accepted accounting principles shall have
been set aside on its books.
(r) RELIANCE ON SEPARATE LEGAL IDENTITY. Such Seller is aware
that the Lenders, the Liquidity Banks and the Agents are entering into
the Transaction Documents in reliance upon the Buyer's identity as a
legal entity separate from such Seller and any of its other Affiliates.
(s) YEAR 2000 READINESS. In addition to the matters covered in
the letters attached as Exhibit F hereto, each Seller reasonably
believes that all computer applications that are material to its
business and operations will on a timely basis be able to perform
properly date-sensitive functions for all dates before, on and after
January 1, 2000 (that is, be "YEAR 2000 COMPLIANT"), except to the
extent that a failure to do so could not reasonably be expected to have
a Seller Material Adverse Effect.
(t) PAYMENTS TO THE APPLICABLE SELLER. With respect to each
Receivable sold to the Buyer hereunder, the applicable Seller has
received reasonably equivalent value from the Buyer in consideration
for such Receivable and the Related Rights and services with respect
thereto.
(u) CREDIT AND COLLECTION POLICY. With respect to each
Receivable, such Seller has complied in all material respects with its
Credit and Collection Policy, and no change has been made to such
Credit and Collection Policy since the date of this Agreement which
would be reasonably likely to materially and adversely affect the
collectibility of the Receivables or decrease the credit quality of any
newly created Receivables except for such changes as to which each of
the Co-Agents has given its prior written consent thereto (which
consent shall not be unreasonably withheld or delayed).
(v) NOT AN INVESTMENT COMPANY. Such Seller is not an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended from time to time, or any successor statute.
ARTICLE III.
CONDITIONS OF PURCHASES
Section 3.1 CONDITIONS PRECEDENT TO INITIAL PURCHASE. The initial
purchase from each Seller hereunder is subject to the conditions precedent that
(1) the Buyer shall have executed and delivered a Subordinated Note in favor of
such Seller, and (2) the Buyer shall have received, on
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or before the Applicable Closing Date, the following, each (unless otherwise
indicated) dated the Applicable Closing Date, and each in form, substance and
date reasonably satisfactory to the Buyer and the Collateral Agent:
(a) A copy of the resolutions of such Seller's board of
directors, board of managers, general partners or analogous Persons of
such Seller approving the Transaction Documents to be delivered by it
and the transactions contemplated hereby and thereby, certified by a
Responsible Officer of such Seller;
(b) A good standing certificate for such Seller issued as of a
recent date by the Secretary of State of the state of its state of
formation;
(c) A certificate of a Responsible Officer of such Seller
certifying the names and true signatures of the officers, partners,
managers or members authorized on such Seller's behalf to sign the
Transaction Documents to be delivered by it, on which certificate the
Buyer and the Servicer (if the Servicer is not such Seller) may
conclusively rely until such time as the Buyer and the Servicer shall
receive from such Seller a revised certificate meeting the requirements
of this subsection (c);
(d) Recently certified copies of such Seller's Governing
Document;
(e) Copies of the proper financing statements (Form UCC-1)
that have been duly executed by such Seller, naming such Seller as the
debtor or seller, the Buyer as the purchaser or secured party, and the
Collateral Agent as assignee of the Buyer, in each case, describing in
reasonable detail the Receivables and the Related Rights to be sold by
such Seller to the Buyer pursuant to this Agreement or other similar
instruments or documents, as may be necessary under the UCC of all
appropriate jurisdictions or any comparable law of all appropriate
jurisdictions to perfect the Buyer's ownership interest in such
Receivables and Related Rights;
(f) A written search report from a Person satisfactory to
Servicer and the Collateral Agent listing all effective financing
statements that name such Seller as debtor, seller or assignor and that
are filed in the jurisdictions in which filings were made pursuant to
the foregoing subsection (e), together with copies of such financing
statements (none of which, except for those described in the foregoing
subsection (e) shall cover any Receivable or any Related Right related
to any Receivable) which is to be sold by such Seller to the Buyer
hereunder, and tax and judgment lien search reports from a Person
satisfactory to the Servicer and the Collateral Agent showing no
evidence of such liens filed against such personal property;
(g) Evidence (i) of the execution and delivery by each of the
parties thereto of each of the other Transaction Documents to be
executed and delivered in connection herewith and (ii) that each of the
conditions precedent to the execution, delivery and effectiveness of
such other Transaction Documents has been satisfied to the Buyer's
satisfaction;
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(h) An opinion of such Seller's counsel covering the matters
referenced in Exhibit 5.01(h) to the Credit and Security Agreement; and
(i) A certificate from an officer of such Seller to the effect
that the Servicer and such Seller have placed on the most recent, and
have taken all steps reasonably necessary to ensure that there shall be
placed on subsequent, summary aged trial balance reports the following
legend (or the substantive equivalent thereof):
"THE RECEIVABLES DESCRIBED HEREIN, TOGETHER WITH CERTAIN
RELATED RIGHTS, HAVE BEEN SOLD TO INTERIM SERVICES RECEIVABLES
CORP., WHO HAS GRANTED A SECURITY INTEREST THEREIN TO WACHOVIA
BANK, N.A., AS COLLATERAL AGENT, FOR VARIOUS SECURED PARTIES."
Section 3.2 CONDITIONS PRECEDENT TO ALL PURCHASES. Each purchase shall
be subject to the further conditions precedent that:
(a) the applicable Seller's Sale Termination Date shall not
have occurred;
(b) the Buyer (or its assigns) shall have received such other
approvals, opinions or documents as it may reasonably request; and
(c) on the date of such purchase, each of the representations
and warranties of such Seller set forth in ARTICLE II hereof are true
and correct on and as of the date of such purchase (and after giving
effect thereto) as though made on and as of such date.
Section 3.3 REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
Seller, by accepting the Purchase Price related to each purchase of such
Seller's Receivables and Related Rights, shall be deemed to have certified that
the representations and warranties of such Seller contained in ARTICLE II are
true and correct as to such Seller on and as of the day of such purchase, with
the same effect as though made on and as of such day.
ARTICLE IV.
COVENANTS
Section 4.1 AFFIRMATIVE COVENANTS OF THE SELLERS. From the Applicable
Closing Date until the Final Payout Date, each Seller will, unless the Buyer and
the Agents shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply in all material respects
with all applicable laws, rules, regulations and orders, including
those with respect to the Receivables generated by it and the Contracts
and other agreements related thereto, except where the failure to do so
could not reasonably be expected to have a Seller Material Adverse
Effect.
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(b) PRESERVATION OF CORPORATE EXISTENCE. Except as permitted
by SECTION 4.3(f), preserve and maintain its existence, rights,
franchises and privileges in the jurisdiction of its incorporation or
formation, and qualify and remain qualified in good standing as a
foreign corporation or limited liability company in each jurisdiction
where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualification would have a Seller Material
Adverse Effect.
(c) RECEIVABLES REVIEW. Each Seller will (i) at any time and
from time to time upon not less than ten (10) Business Days' notice
(unless an Event of Default has occurred and is continuing, in which
case no such notice shall be required) during regular business hours,
permit the Co-Agents or any of their agents or representatives: (A) to
examine and make copies of and abstracts from all books, records and
documents (including, without limitation, computer tapes and disks) in
the possession or under the control of such Seller relating to
Receivables, including, without limitation, the related Contracts
and/or Invoices and purchase orders and other agreements, and (B) to
visit the offices and properties of such Seller for the purpose of
examining such materials described in CLAUSE (i)(a) next above, and to
discuss matters relating to Receivables or such Seller's performance
hereunder with any of the officers or employees of such Seller having
knowledge of such matters; and (ii) without limiting the provisions of
CLAUSE (i) above, from time to time, at the expense of such Seller,
permit the Parent's outside auditors (except as hereinafter provided)
or other certified public accountants or auditors acceptable to the
Co-Agents to conduct a review of such Seller's books and records with
respect to the Receivables and Related Assets (each, a "REVIEW");
PROVIDED, HOWEVER, that, so long as no Event of Default has occurred
and is continuing, the Sellers shall only be responsible for the costs
and expenses of one such Review under this Section in any one calendar
year except as provided in the next sentence. Notwithstanding the
foregoing, if (1) any Seller requests the approval of a new Eligible
Originator who is a Material Proposed Addition or (2) any Material
Acquisition is consummated, the Sellers shall be responsible for the
costs and expenses of one additional Review per proposed Material
Proposed Addition or per Material Acquisition in the Contract Year in
which such Material Proposed Addition is expected to occur or such
Material Acquisition is expected to be consummated if such additional
Review is requested by the Co-Agents. In the event that the Parent's
outside auditors fail to perform any Review to the reasonable
satisfaction of the Co-Agents, thereafter, the Co-Agents shall have the
exclusive right to select the accountants or auditors who perform
Reviews.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Maintain an
ability to recreate in all material respects records evidencing the
Receivables generated by such Seller in the event of the destruction of
the originals thereof.
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS.
At its expense timely and fully perform and comply with all material
provisions, covenants and other promises, if any, required to be
observed by it under the Contracts and all purchase orders and other
agreements related to the Receivables generated by such Seller.
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(f) LOCATION OF RECORDS. Keep its principal place of business
and chief executive office, and the offices where it keeps its Records
(and all original documents relating thereto) at the address(es)
referred to in Exhibit C hereto or to its Joinder Agreement, as
applicable, or, upon 15 days' prior written notice to the Buyer and the
Collateral Agent, at such other locations in jurisdictions where all
actions necessary to maintain the perfection of the Buyer's ownership
interest in such Seller's Receivables and Related Rights, and the
Collateral Agent's security interest therein shall have been taken and
completed.
(g) CREDIT AND COLLECTION POLICIES. Comply in all material
respects with its Credit and Collection Policy in connection with the
Receivables generated by such Seller and all Contracts and Invoices
related thereto.
(h) SEPARATE CORPORATE EXISTENCE OF THE BUYER. Take such
actions as shall be required in order to maintain the separate identity
of the Buyer separate and apart from such Seller and its other
Affiliates, including those actions set forth in Section 7.04 of the
Credit and Security Agreement.
Section 4.2 REPORTING REQUIREMENTS. From the date hereof until the
Final Payout Date, each Seller will, unless the Buyer and the Agents shall
otherwise consent in writing, furnish to the Buyer and the Agents:
(a) PROCEEDINGS. As soon as possible and in any event within
ten (10) Business Days after a Responsible Officer of such Seller
obtains knowledge thereof, written notice to the Buyer and the Agents
of (i) all pending proceedings and investigations of the type described
in Section 6.1(f) not previously disclosed to the Buyer and/or the
Collateral Agent and (ii) any development that has occurred with
respect to any previously disclosed proceedings and investigations
which development would reasonably be expected to have a Seller
Material Adverse Effect;
(b) CREDIT AND COLLECTION POLICY. Prior to its effective date,
notice of any material change in the character of such Seller's
business or in its Credit and Collection Policy; and
(c) OTHER. Promptly, from time to time, such other
information, documents, records or reports respecting the Receivables
originated by such Seller, the condition, operations, financial or
otherwise, of such Seller or such Seller's performance hereunder that
the Buyer or any of the Agents may from time to time reasonably request
in order to protect the interests of the Buyer and the Collateral
Agent, on behalf of the Secured Parties, under or as contemplated by
the Transaction Documents.
Section 4.3 NEGATIVE COVENANTS. From the date hereof until the Final
Payout Date, each Seller agrees that, unless the Buyer and each of the Agents
shall otherwise consent in writing, it shall not:
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(a) SALES, LIENS, ETC. Except as otherwise provided herein or
in any other Transaction Document, sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any
Lien upon or with respect to, any Receivable or related Contract or
other Related Right, or any interest therein, or any Collections
thereon, or assign any right to receive income in respect thereof.
(b) CHANGE IN CREDIT AND COLLECTION POLICY. Make or permit to
be made any change in the character of its business or in its Credit
and Collection Policy that would impair the collectibility of any
significant portion of the Receivables or otherwise materially and
adversely affect the interests or remedies of the Buyer under the
Transaction Documents or that would have a Material Adverse Effect.
(c) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES. Take
any action to cause or permit any Receivable generated by it to become
evidenced by any "instrument" (as defined in the applicable UCC),
except in connection with the collection of overdue Receivables,
PROVIDED that the original of any such instrument is delivered to the
Collateral Agent, duly endorsed.
(d) NAME CHANGE, OFFICES AND RECORDS. Change its name,
identity or corporate structure (within the meaning of SECTION 9-402(7)
of any applicable enactment of the UCC) or relocate its chief executive
office or any office where Records are kept unless it shall have: (i)
given the Buyer (or its assigns) at least 15 days' prior written notice
thereof and (ii) prior to the effectiveness of such change, delivered
to the Buyer and the Collateral Agent all financing statements,
instruments and other documents requested by the Buyer or the
Collateral Agent in connection with such change or relocation.
(e) ACCOUNTING FOR PURCHASES. And will not permit any
Affiliate to, account for or treat (whether in financial statements or
otherwise) the transactions contemplated hereby in any manner other
than the sale of the Receivables and the Related Rights by such Seller
to the Buyer or in any other respect account for or treat the
transactions contemplated hereby in any manner other than as a sale of
the Receivables and the Related Rights by such Seller to the Buyer
except to the extent that such transactions are not recognized on
account of consolidated financial reporting in accordance with
generally accepted accounting principles.
(f) MERGERS AND CONSOLIDATIONS. Liquidate or dissolve,
consolidate with, or merge into or with, any other Person, except for:
(i) mergers and consolidations of a Seller with one or more other
Sellers, (ii) Permitted Restructurings, and (iii) other mergers or
consolidations that do not constitute Material Acquisitions, PROVIDED
THAT, in each of the foregoing cases:
(A) the Agents and the Buyer receive prior written
notice of such consolidation or merger, and the successor or
surviving entity (if not a Seller) unconditionally assumes
such Seller's (or Sellers') respective obligations under the
Transaction Documents to which
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it is (or they are) a party immediately prior to giving effect
to such consolidation or merger,
(B) all UCC financing statements necessary to
maintain the validity and perfection of the Buyer's ownership
interest in the Receivables and Related Rights acquired or to
be acquired from such Seller or Sellers under this Agreement,
and the Collateral Agent's security interest therein on behalf
of the Secured Parties, have been duly executed and filed in
all necessary jurisdictions, and
(C) if the surviving entity in such transaction(s) is
not an existing Seller under this Agreement, all other
documents required to be delivered in connection with a
Joinder Agreement hereunder have been duly executed and
delivered substantially contemporaneously with such
transaction(s).
ARTICLE V.
JOINDER OF ADDITIONAL SELLERS
Section 5.1 ADDITION OF NEW SELLERS. From time to time upon not less
than 60 days' prior written notice to the Buyer and the Agents (or such shorter
period of time as the Agents may agree upon), the Parent may propose that one or
more of its existing or hereafter acquired wholly-owned Subsidiaries become a
Seller hereunder. No such addition shall become effective (a) if such addition
constitutes a Material Proposed Addition, without the written consent of each of
the Co-Agents but may become effective prior to such 60th day if the Co-Agents
give their written consent more promptly and (b) unless all conditions precedent
to such addition required by Section 5.2 below are satisfied prior to such
date).
Section 5.2 DOCUMENTATION. In the event that the Buyer and each of the
Agents consents to the addition of a New Seller, such New Seller shall execute a
Joinder Agreement and shall deliver each of the documents, certificates and
opinions required to be delivered under Section 3.1 prior to such New Seller's
Closing Date, together with such updated Schedules and Exhibits hereto as may be
necessary to ensure that after giving effect to the addition of such New Seller,
each of the representations and warranties of such New Seller under Article II
hereof will be true and correct, and the Buyer will deliver a Subordinated Note
to such New Seller.
ARTICLE VI.
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES
Section 6.1 RIGHTS OF THE BUYER. Each Seller hereby authorizes the Buyer and the
Servicer (if other than such Seller) or their respective designees to take any
and all steps in such Seller's name necessary or desirable, in their respective
determination, to collect all amounts due under any and all Receivables,
including, without limitation, endorsing such Seller's name on
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checks and other instruments representing Collections and enforcing such
Receivables and the provisions of the related Invoices that concern payment
and/or enforcement of rights to payment.
Section 6.2 RESPONSIBILITIES OF THE SELLERS. Anything herein to the
contrary notwithstanding:
(a) COLLECTION PROCEDURES. Each Seller agrees to direct all
Obligors to make payments of such Seller's Receivables directly to a
Lock-Box Account that is the subject of a Lock Box Agreement at a
Lock-Box Bank. Each Seller further agrees to transfer any Collections
(including any security deposits applied to the Unpaid Balance of any
Receivable) that it receives on such Receivables directly to the
Servicer (if other than such Seller) within two (2) Business Days of
receipt thereof, and agrees that all such Collections shall be deemed
to be received in trust for the Buyer; PROVIDED that, to the extent
permitted pursuant to Section 1.3, each Seller may retain such
Collections as a portion of the Purchase Price then payable to or apply
such Collections to the reduction of the outstanding balance of its
Subordinated Note.
(b) PERFORMANCE UNDER CONTRACT. Each Seller shall remain
responsible for performing its obligations hereunder and under the
Contracts applicable to such Seller, and the exercise by the Buyer or
its designee of its rights hereunder shall not relieve any Seller from
such obligations.
(c) POWER OF ATTORNEY. Each Seller hereby grants to the
Servicer (if other than such Seller) an irrevocable power of attorney,
with full power of substitution, coupled with an interest, to take in
the name of such Seller all steps necessary or advisable to endorse,
negotiate or otherwise realize on any writing or other right of any
kind held or transmitted by such Seller or transmitted or received by
the Buyer (whether or not from such Seller) in connection with any
Receivables generated by such Seller.
Section 6.3 FURTHER ACTION EVIDENCING PURCHASES. Each Seller agrees
that from time to time, at its expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that the Buyer
may reasonably request in order to perfect, protect or more fully evidence the
Buyer's ownership the Receivables generated by such Seller (and the Related
Rights) purchased by the Buyer hereunder, or to enable the Buyer to exercise or
enforce any of its rights hereunder or under any other Transaction Document.
Without limiting the generality of the foregoing, upon the request of the Buyer,
each Seller will:
(a) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate; and
(b) mark the summary master control data processing records
with the legend set forth in Section 3.1(i).
Each Seller hereby authorizes the Buyer or its designee to file one or more
financing or continuation statements, and amendments thereto and assignment
thereof, relative to all or any of
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the Receivables (and the Related Rights) now existing or hereafter sold by such
Seller. If such Seller fails to perform any of its agreements or obligations
under this Agreement, the Buyer or its designee may (but shall not be required
to) itself perform, or cause performance of, such agreement or obligation, and
the expenses of the Buyer or its designee incurred in connection therewith shall
be payable by such Seller.
Section 6.4 APPLICATION OF COLLECTIONS. Any payment by an Obligor in
respect of any indebtedness owed by it to any Seller in respect of any Contract
shall, except as otherwise specified by such Obligor or otherwise required by
contract or law, be applied FIRST, as a Collection of the Receivables of such
Obligor owed to such Seller, in the order of the age of such Receivables,
starting with the oldest of such Receivables, and SECOND, to any other
indebtedness of such Obligor.
ARTICLE VII.
INDEMNIFICATION
Section 7.1 Indemnities by the Sellers.
(a) GENERAL INDEMNITY. Without limiting any other rights which
the Buyer may have hereunder or under applicable law, each of the
Sellers agrees to indemnify the Buyer and its successors, transferees,
participants and assigns and all officers, directors, shareholders,
controlling persons, employees and agents of any of the foregoing
(each, a "SELLER INDEMNIFIED PARTY"), forthwith on demand, from and
against any and all damages, losses, claims, liabilities and related
costs and expenses, including attorneys' fees and disbursements (all of
the foregoing being collectively referred to as "SELLER INDEMNIFIED
AMOUNTS") awarded against or incurred by any of them arising out of or
relating to the Transaction Documents and/or the Receivables and
Related Rights sold by such Seller hereunder, EXCLUDING, HOWEVER, (a)
Seller Indemnified Amounts to the extent determined by a court of
competent jurisdiction to have resulted from bad faith, gross
negligence or willful misconduct on the part of such Seller Indemnified
Party or (b) recourse (except as otherwise specifically provided in
this Agreement) for Seller Indemnified Amounts to the extent the same
includes losses in respect of Receivables which are uncollectible on
account of the insolvency, bankruptcy or lack of creditworthiness of
the related Obligor. Without limiting the foregoing, each of the
Sellers shall indemnify each Seller Indemnified Party for Seller
Indemnified Amounts arising out of or relating to:
(i) the creation of any Lien on, or transfer by such
Seller of any interest in, the Collateral other than the sale
of Receivables and Related Rights pursuant hereto;
(ii) any representation or warranty made by such
Seller (or any of its officers) under or in connection with
any Transaction Document, any Purchase Report or any other
information or report delivered by or on behalf of such Seller
pursuant hereto, which shall have been false, incorrect or
misleading in any material respect when made or deemed made or
delivered, as the case may be;
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(iii) the failure by such Seller to comply with any
applicable law, rule or regulation with respect to any
Receivable originated by it or the related Contract and/or
Invoice, or the nonconformity of any such Receivable or the
related Contract and/or Invoice with any such applicable law,
rule or regulation;
(iv) the failure to vest and maintain vested in the
Buyer, a valid and perfected ownership interest in the
Receivables originated by such Seller and the Related Rights,
free and clear of any other Lien created by such Seller, now
or at any time thereafter;
(v) the failure to file, or any delay in filing,
financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Receivable sold by such
Seller hereunder together with the Related Rights;
(vi) any dispute, claim, offset or defense (other
than discharge in bankruptcy) of the Obligor to the payment of
any Receivable sold by such Seller hereunder (including,
without limitation, a defense based on such Receivables or the
related Contract and/or Invoice not being a legal, valid and
binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from
the sale of the services related to such Receivable or the
furnishing or failure to furnish such services;
(vii) any Rebill or other matter described in SECTION
1.3;
(viii) any failure of such Seller, as seller,
Servicer, sub-servicer or otherwise, to perform its duties or
obligations in accordance with the provisions of the
Transaction Documents to which it is a party; or
(ix) any claim of breach by such Seller of any
related Contract and/or Invoice with respect to any
Receivable;
(x) any failure of such Seller to be Year 2000
Compliant;
(xi) the commingling of Collections of Receivables at
any time with other funds;
(xii) any investigation, litigation or proceeding
related to or arising from this Agreement or any other
Transaction Document, the transactions contemplated hereby or
thereby, the use of the proceeds of any purchase, or any other
investigation, litigation or proceeding relating to such
Seller in which any Seller Indemnified Party becomes involved
as a result of any of the transactions contemplated hereby or
thereby;
(xiii) any inability to litigate any claim against
any Obligor in respect of any Receivable as a result of such
Obligor being immune from civil and
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<PAGE> 23
commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(xiv) the occurrence of any Event of Bankruptcy with
respect to such Seller; or
(xv) any loss incurred by the Buyer or any of its
Lenders as a result of the sale by such Seller of Receivables
owing from any single Obligor and its Affiliated Obligors
which causes the aggregate Unpaid Balance of all such
Receivables acquired by the Buyer from all Sellers to exceed
the applicable Obligor Concentration Limit.
In addition to the Parent's obligations under the foregoing indemnity with
respect to itself as a Seller and the Receivables originated by it, the Parent
hereby agrees to be jointly and severally liable with each other Seller for such
other Seller's indemnity obligations set forth above.
Section 7.2 CONTRIBUTION. If for any reason the indemnification
provided above in SECTION 7.1 (and subject to the exceptions set forth therein)
is unavailable to a Seller Indemnified Party or is insufficient to hold a Seller
Indemnified Party harmless, then the applicable Seller(s) shall contribute to
the amount paid or payable by such Seller Indemnified Party as a result of such
loss, claim, damage or liability in such proportion as is appropriate to reflect
not only the relative benefits received by such Seller Indemnified Party on the
one hand and the applicable Seller(s) on the other hand but also the relative
fault of such Seller Indemnified Party as well as any other relevant equitable
considerations.
ARTICLE VIII.
MISCELLANEOUS
Section 8.1 Waivers and Amendments.
(a) The provisions of this Agreement may from time to time be
amended, restated, otherwise modified or waived, if such amendment,
modification or waiver is in writing and consented to by each Seller,
the Buyer, the Agents and the Servicer (if the Servicer is not a
Seller).
(b) No failure or delay on the part of the Buyer, the
Servicer, any Seller or any third party beneficiary in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or
right. No notice to or demand on the Buyer, the Servicer or any Seller
in any case shall entitle it to any notice or demand in similar or
other circumstances. No waiver or approval by the Buyer or the Servicer
under this Agreement shall, except as may otherwise be stated in such
waiver or approval, be applicable to subsequent transactions. No waiver
or approval under this Agreement shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder.
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Section 8.2 NOTICES, ETC. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by express
mail or courier or by certified mail, postage-prepaid, or by facsimile, to the
intended party at the address or facsimile number of such party set forth on
Schedule 14.02 of the Credit and Security Agreement or, in the case of a New
Seller, below its signature on its Joinder Agreement, or at such other address
or facsimile number as shall be designated by such party in a written notice to
the other parties hereto. All such notices and communications shall be
effective, (i) if personally delivered or sent by express mail or courier or if
sent by certified mail, when received, and (ii) if transmitted by facsimile,
when sent, receipt confirmed by telephone or electronic means.
Section 8.3 NO WAIVER; CUMULATIVE REMEDIES. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 8.4 BINDING EFFECT; ASSIGNABILITY. This Agreement shall be
binding upon and inure to the benefit of the Buyer, each Seller and its
respective successors and permitted assigns. Except as permitted in Section
4.3(f), no Seller may assign its rights hereunder or any interest herein without
the prior written consent of the Buyer and each of the Agents; subject to
Section 8.11, the Buyer may not assign its rights hereunder or any interest
herein without the prior written consent of each of the Sellers and the Agents.
This Agreement shall create and constitute the continuing obligations of the
parties hereto in accordance with its terms, and shall remain in full force and
effect as to each Seller until the date after such Seller's Sale Termination
Date on which such Seller has received payment in full for all Receivables and
Related Rights conveyed by it to the Buyer hereunder and shall have paid and
performed all of its obligations hereunder in full. The rights and remedies with
respect to any breach of any representation and warranty made by any Seller
pursuant to Article II and the indemnification and payment provisions of Article
VII and Section 8.6 shall be continuing and shall survive any termination of
this Agreement.
Section 8.5 GOVERNING LAW. THIS AGREEMENT, INCLUDING THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES
OF CONFLICTS OF LAW, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS
OF THE COMPANY IN THE RECEIVABLES OR RELATED RIGHTS IS GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 8.6 COSTS, EXPENSES AND TAXES. In addition to the obligations
of each Seller under Article VII, each of the Sellers agrees to pay on demand:
(a) all reasonable costs and expenses, including attorneys'
fees, in connection with the enforcement against such Seller of this
Agreement and the other Transaction Documents executed by such Seller;
and
(b) all stamp and other similar taxes and fees payable or
determined to be payable in connection with the execution, delivery,
filing and recording of this Agreement or the other Transaction
Documents, and agrees to indemnify each Seller Indemnified
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<PAGE> 25
Party against any liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees.
Section 8.7 SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY
IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE
OR UNITED STATES FEDERAL COURT SITTING IN THE STATE OF NEW YORK, OVER ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT; (b) AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL COURT; (c) WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d) CONSENTS
TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN
SECTION 8.2; AND (e) TO THE EXTENT ALLOWED BY LAW, AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. NOTHING IN THIS SECTION 8.7 SHALL AFFECT BUYER'S RIGHT TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY SELLER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
Section 8.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO EXPRESSLY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR UNDER ANY
AMENDMENT, INSTRUMENT, JOINDER AGREEMENT OR DOCUMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED BY IT OR ON ITS BEHALF IN CONNECTION HEREWITH OR ARISING
FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
Section 8.9 CAPTIONS AND CROSS REFERENCES; INCORPORATION BY REFERENCE.
The various captions (including, without limitation, the table of contents) in
this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement. References in this
Agreement to any underscored Section or Exhibit are to such Section or Exhibit
of this Agreement, as the case may be. The Exhibits hereto are hereby
incorporated by reference into and made a part of this Agreement.
Section 8.10 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same agreement.
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Section 8.11 ACKNOWLEDGMENT AND AGREEMENT. By execution below, each
Seller expressly acknowledges and agrees that all of the Buyer's rights, title,
and interests in, to, and under this Agreement shall be pledged and/or
collaterally assigned by the Buyer to the Collateral Agent for the benefit of
the Secured Parties pursuant to the Credit and Security Agreement (and the
Lenders may further assign such rights in accordance with the Credit and
Security Agreement), and each Seller consents to such assignment. Each of the
parties hereto acknowledges and agrees that the Agents and the Lenders are third
party beneficiaries of the rights of the Buyer arising hereunder and under the
other Transaction Documents to which any Seller is a party.
Section 8.12 NO PROCEEDINGS. Each Seller agrees that it shall not
institute against the Buyer, or join any other Person in instituting against the
Buyer, any insolvency proceeding (namely, any proceeding of the type referred to
in the definition of Event of Bankruptcy) as long as there shall not have
elapsed one year plus one day after the Final Payout Date. The foregoing shall
not limit any Seller's right to file any claim in or otherwise take any action
with respect to any insolvency proceeding that was instituted by any Person
other than a Seller.
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<PAGE> 27
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered as of the date first above written.
INTERIM SERVICES INC.
By: /s/ Shannon C. Allen
--------------------------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
INTERIM SERVICES ATLANTIC LLC
By: /s/ Shannon C. Allen
--------------------------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
INTERIM SERVICES PACIFIC LLC
By: /s/ Shannon C. Allen
--------------------------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
Interim Assessment Services Inc. (f/k/a HR Easy Inc.)
By: /s/ Shannon C. Allen
--------------------------------------------------
Name: Shannon C. Allen
Title: Treasurer
23
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SARATOGA INSTITUTE INC.
By: /s/ Shannon C. Allen
--------------------------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
MICHAEL PAGE INTERNATIONAL INC.
By: /s/ Shannon C. Allen
--------------------------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
INTERIM SERVICES RECEIVABLES CORP.
By: /s/ Shannon C. Allen
--------------------------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
24
<PAGE> 29
ANNEX A
DEFINITIONS
A. INCORPORATION OF CREDIT AND SECURITY AGREEMENT DEFINITIONS.
Unless otherwise defined herein, terms that are capitalized and used throughout
this Agreement are used as defined in the Credit and Security Agreement
(hereinafter defined).
B. CERTAIN DEFINED TERMS. The following terms have the
respective meanings indicated hereinbelow:
"ADDITIONAL RECEIVABLES" means, with respect to any Seller,
all Receivables of such Seller arising after the close of such Seller's business
on the Initial Cut-Off Date (in the case of each of the Original Sellers) or the
applicable New Seller Cut-Off Date (in the case of any New Seller) through and
including such Seller's Sale Termination Date.
"APPLICABLE CLOSING DATE" means (i) with respect to each of
the Original Sellers, the Initial Closing Date, and (ii) with respect to each
New Seller, its New Seller Closing Date.
"APPLICABLE CUT-OFF DATE" means (i) with respect to the
Parent, Interim-Atlantic and Interim-Pacific, the Initial Cut-Off Date, (ii)
with respect to each New Seller, its New Seller Cut-Off Date, and (iii) with
respect to all Sellers, each Cut-Off Date after the applicable date in the
preceding clause (i) or clause (ii).
"AVAILABLE FUNDS" means, on any date of determination, monies
then held by or on behalf of the Buyer after deduction of (a) all Obligations,
if any, that are due and owing under the Credit and Security Agreement, (b) all
Servicer's Fees that are then due and owing, and (c) in the Buyer's discretion,
the accrued and unpaid portion of all current expenses of the Buyer (whether or
not then due and owing).
"BUYER" has the meaning set forth in the preamble.
"CREDIT AND SECURITY AGREEMENT" means that certain Credit and
Security Agreement dated as of July 1, 1999, by and among the Buyer, as
borrower, the Parent, as initial servicer, Blue Ridge Asset Funding Corporation,
Falcon Asset Securitization Corporation, The First National Bank of Chicago,
individually and as a Co-Agent, and Wachovia Bank, N.A., individually and as a
Co-Agent and as Collateral Agent (as amended, supplemented, restated, joined or
otherwise modified from time to time.
"DISCOUNT AMOUNT" means an amount calculated to provide the
Buyer with a reasonable return on its investment in the Receivables after taking
account its "EXPENSES" consisting of (i) the time value of money based upon the
anticipated dates of collection of the Receivables and the cost to the Buyer of
financing its investment in the Receivables during such period, including
interest incurred, (ii) the risk of nonpayment by the Obligors, and (iii) the
normal operating costs (including, without limitation, overhead and processing
costs, if any) and the Servicer's Fee allocable to such period. Initially, the
Discount Amount shall be calculated as
Annex A-1
<PAGE> 30
the product of (x) the Buyer's Expenses allocated to such period, and (y) 1.5.
Each Seller and the Buyer may agree from time to time to change the Discount
Amount based on changes in one or more of the items affecting the calculation
thereof, PROVIDED THAT any change to the Discount Amount shall take effect as of
the commencement of a Calculation Period, shall apply only prospectively and
shall not affect the Purchase Price payment in respect of purchases which
occurred during any Calculation Period ending prior to the Calculation Period
during which such Seller and the Buyer agree to make such change.
"EQUITY INTEREST" means, with respect to any corporation,
partnership, limited liability company, or business trust, each share of capital
stock of any class, each general or limited partnership interest, each
membership interest of any class, and each beneficial interest, as applicable,
including, without limitation, each option, warrant or other right to purchase
or acquire any of the foregoing and any debt instrument or other security which
is convertible into any of the foregoing.
"GOVERNING DOCUMENTS" means, with respect to any Seller, (i)
if such Seller is a corporation, its articles or certificate of incorporation,
and by-laws, (ii) if such Seller is a partnership, its partnership agreement
and, if applicable, its certificate of formation or analogous certificate in its
jurisdiction of organization, and (iii) if such Seller is a limited liability
company, its limited liability company or operating agreement, and, if
applicable, its certificate of formation or analogous certificate in its
jurisdiction of organization.
"INITIAL CLOSING DATE" means the date on which the initial
Advance is made under the Credit and Security Agreement.
"INITIAL CUT-OFF DATE" means the Cut-Off Date immediately
preceding the Initial Closing Date.
"INITIAL RECEIVABLES" means, with respect to any Seller, all
Receivables of such Seller that existed and was owing to such Seller as of the
close of such Seller's business on the Initial Cut-Off Date (in the case of each
of the Original Sellers) or the applicable New Seller Cut-Off Date (in the case
of any New Seller).
"INTERIM ASSESSMENT" has the meaning set forth in the
preamble.
"INTERIM-ATLANTIC" has the meaning set forth in the preamble.
"INTERIM-PACIFIC" has the meaning set forth in the preamble.
"JOINDER AGREEMENT" has the meaning set forth in the preamble.
"MICHAEL PAGE" has the meaning set forth in the preamble.
"NEW SELLER" means any direct or indirect wholly-owned
Subsidiary of the Parent that hereafter becomes a Seller under this Agreement by
executing a Joinder Agreement and complying with the provisions of Article V
hereof.
Annex A-2
<PAGE> 31
"NEW SELLER CLOSING DATE" means, as to any New Seller, the
Business Day on which each of the conditions set forth in Article V has been
satisfied.
"NEW SELLER CUT-OFF DATE" means, with respect to each New
Seller, Cut-Off Date immediately preceding its New Seller Closing Date.
"ORIGINAL SELLERS" means the Parent, Interim-Atlantic,
Interim-Pacific, Interim Assessment, Saratoga and Michael Page.
"PARENT" has the meaning set forth in the preamble.
"PURCHASE PRICE" means, with respect to any sale of
Receivables on any date, the aggregate price to be paid by the Buyer to the
applicable Seller for such Receivables and their Related Rights in accordance
with SECTION 1.2 of this Agreement, which price shall equal (i) the Unpaid
Balance of such Receivables as of the Applicable Cut-Off Date, MINUS (ii) the
Discount Amount, MINUS (iii) any Purchase Price Credits to be credited against
the Purchase Price otherwise payable in accordance with SECTION 1.3 of this
Agreement.
"PURCHASE PRICE CREDIT" shall have the meaning provided in
SECTION 1.3 hereof.
"PURCHASE REPORT" shall have the meaning provided in SECTION
1.2(c) hereof.
"RELATED RIGHTS" means, collectively, with respect to any
Seller's Receivables:
(i) all rights to, but not the obligations under, all Invoices
and Related Security related to any of such Seller's Initial
Receivables or Additional Receivables;
(ii) all monies due or to become due with respect to any of
such Seller's Initial Receivables or Additional Receivables or its
rights described in clause (i) above;
(iii) all books and records related to any of the foregoing
(collectively, "Records");
(iv) all Lock-Box Accounts, all amounts on deposit therein and
all related agreements between such Seller and its Lock-Box Banks, in
each case, to the extent applicable to any of the foregoing or
containing and of the items described in paragraph (v) below; and
(v) all Collections in respect of, and other proceeds (as
defined in the UCC) of, the foregoing, including, without limitation,
all funds which either are received by such Seller or by any of its
Affiliates from or on behalf of the Obligors in payment of any amounts
owed (including, without limitation, finance charges, interest and all
other charges) in respect of Receivables, or are applied to such
amounts owed by the Obligors (including without limitation, insurance
payments, if any, that such Seller or any of its Affiliates or the
Servicer (if such
Annex A-3
<PAGE> 32
Seller or any of its Affiliates is not the Servicer) applies in the
ordinary course of its business to amounts owed in respect of any of
its Receivables and net proceeds of sale or other disposition of any
collateral for such Receivables.
"RESPONSIBLE OFFICER" means: (a) with respect to Interim
Services Inc., any of its Chairman/President/CEO, Executive Vice President/CFO,
Vice President and Treasurer, Assistant Treasurer or Senior Vice
President/Secretary, acting singly, (b) with respect to each of Interim Services
Atlantic LLC and Interim Services Pacific LLC, any of its President/CEO,
Executive Vice President/CFO, Vice President and Treasurer, Assistant Treasurer
or Secretary, acting singly, (c) with respect to Interim Assessment Services
Inc. (F/K/A HR Easy), any of its CEO, Executive Vice President, Treasurer or
Secretary, acting singly, (d) with respect to Saratoga Institute, any of its
Director, Executive Vice President/CFO, Vice President and Treasurer, Assistant
Treasurer or Secretary, acting singly, (e) with respect to Michael Page
International Inc., any of its Chairman, Executive Vice President/CFO, Vice
President and Treasurer, Assistant Treasurer or Secretary, acting singly, and
(f) with respect to Interim Services Receivables Corp., any of its President,
Executive Vice President/CFO, Vice President/Treasurer, Assistant Treasurer or
Secretary, acting singly.
"SALE TERMINATION DATE" means, as to any Seller, the earliest
to occur of the following:
(i) the date designated by such Seller to the Buyer upon not
less than 10 Business Days' prior written notice,
(ii) the date on which an Event of Bankruptcy occurs with
respect to such Seller;
(iii) the date on which such Seller is unable to satisfy the
applicable conditions precedent to each purchase set forth in Article
III hereof; and
(iv) the date on which a Change in Control occurs.
"SARATOGA" has the meaning set forth in the preamble.
"SELLER" means an Original Seller or a New Seller.
"SELLER INDEMNIFIED AMOUNTS" shall have the meaning provided
in SECTION 7.1(a) hereof.
"SELLER INDEMNIFIED PARTY" shall have the meaning provided in
SECTION 7.1(a) hereof.
Annex A-4
<PAGE> 33
"SELLER MATERIAL ADVERSE EFFECT" means, with respect to any
Seller, the occurrence of any of the following events or circumstances:
(i) a material adverse effect on the business, financial
condition or results of operations of such Seller;
(ii) a material adverse effect on the ability of such Seller
to perform its obligations under this Agreement or any other
Transaction Document to which such Seller is a party;
(iii) a material adverse effect on the validity or
enforceability of this Agreement or any other Transaction Document to
which such Seller is a party, or the validity, enforceability or
collectibility of a material portion of the Receivables sold by such
Seller to the Buyer; or
(iv) a material adverse effect on the validity, perfection,
priority or enforceability of the Buyer's title to the Receivables and
Related Rights acquired by the Buyer from such Seller.
"SUBORDINATED LOAN" means a subordinated revolving loan from a
Seller (including, without limitation, the Parent) to the Buyer which is
evidenced by a Subordinated Note.
"SUBORDINATED NOTE" means a subordinated promissory note in
the form of Exhibit B hereto issued by the Buyer to a Seller, as it may be
amended, supplemented, endorsed or otherwise modified from time to time in
substitution therefor or renewal thereof in accordance with the Transaction
Documents.
"YEAR 2000 COMPLIANT" has the meaning set forth in SECTION
2.1(s).
THE FOREGOING DEFINITIONS SHALL BE EQUALLY APPLICABLE TO BOTH THE SINGULAR AND
PLURAL FORMS OF THE DEFINED TERMS.
C. OTHER TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9.
D. COMPUTATION OF TIME PERIODS. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding".
Annex A-5
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Exhibit 10.14
================================================================================
CREDIT AND SECURITY AGREEMENT
DATED AS OF JULY 1, 1999
AMONG
INTERIM SERVICES RECEIVABLES CORP., AS BORROWER,
INTERIM SERVICES, INC., AS INITIAL SERVICER,
EACH THE LENDERS FROM TIME TO TIME PARTY HERETO,
THE FIRST NATIONAL BANK OF CHICAGO, AS FALCON AGENT
AND
WACHOVIA BANK, N.A.,
AS BLUE RIDGE AGENT AND COLLATERAL AGENT
================================================================================
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TABLE OF CONTENTS
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ARTICLE I. THE CREDIT.............................................................................................2
SECTION 1.1 THE FACILITY....................................................................................2
SECTION 1.2 RATABLE LOANS; FUNDING MECHANICS; LIQUIDITY FUNDINGS............................................3
SECTION 1.3 INTEREST RATES..................................................................................3
SECTION 1.4 PAYMENT DATES; NOTELESS AGREEMENT...............................................................4
SECTION 1.5 PREPAYMENTS.....................................................................................5
SECTION 1.6 REDUCTIONS IN AGGREGATE COMMITMENT..............................................................5
SECTION 1.7 REQUESTS FOR INCREASES IN AGGREGATE COMMITMENT..................................................6
SECTION 1.8 EXTENSION OF THE SCHEDULED TERMINATION DATE.....................................................6
SECTION 1.9 DISTRIBUTION OF CERTAIN NOTICES; NOTIFICATION OF INTEREST RATES.................................7
ARTICLE II. BORROWING AND PAYMENT MECHANICS; CERTAIN COMPUTATIONS.................................................7
SECTION 2.1 METHOD OF BORROWING.............................................................................7
SECTION 2.2 SELECTION OF CP TRANCHE PERIODS AND INTEREST PERIODS............................................7
SECTION 2.3 COMPUTATION OF CONCENTRATION LIMITS AND UNPAID BALANCE..........................................8
SECTION 2.4 MAXIMUM INTEREST RATE...........................................................................8
SECTION 2.5 PAYMENTS AND COMPUTATIONS, ETC..................................................................8
(a) PAYMENTS..............................................................................................8
(b) LATE PAYMENTS.........................................................................................9
(c) METHOD OF COMPUTATION.................................................................................9
(d) AVOIDANCE OR RECISSION OF PAYMENTS....................................................................9
SECTION 2.6 NON-RECEIPT OF FUNDS BY THE CO-AGENTS...........................................................9
ARTICLE III. SETTLEMENTS..........................................................................................9
SECTION 3.1 REPORTING.......................................................................................9
(a) INFORMATION PACKAGES..................................................................................9
(b) INTEREST; OTHER AMOUNTS DUE...........................................................................9
SECTION 3.2 TURNOVER OF COLLECTIONS........................................................................10
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SECTION 3.3 NON-DISTRIBUTION OF SERVICER'S FEE.............................................................11
SECTION 3.4 DEEMED COLLECTIONS.............................................................................11
ARTICLE IV. FEES AND YIELD PROTECTION............................................................................12
SECTION 4.1 FEES...........................................................................................12
SECTION 4.2 YIELD PROTECTION...............................................................................12
SECTION 4.3 FUNDING LOSSES.................................................................................14
ARTICLE V. CONDITIONS OF ADVANCES................................................................................15
SECTION 5.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE........................................................15
SECTION 5.2 CONDITIONS PRECEDENT TO ALL ADVANCES...........................................................17
ARTICLE VI. REPRESENTATIONS AND WARRANTIES.......................................................................17
SECTION 6.1 REPRESENTATIONS AND WARRANTIES OF LOAN PARTIES.................................................17
(a) DUE INCORPORATION AND GOOD STANDING; OWNERSHIP OF THE BORROWER.......................................17
(b) DUE QUALIFICATION....................................................................................17
(c) POWER AND AUTHORITY; DUE AUTHORIZATION...............................................................18
(d) TITLE TO RECEIVABLES; VALID SECURITY INTEREST........................................................18
(e) NONCONTRAVENTION.....................................................................................18
(f) NO PROCEEDINGS.......................................................................................18
(g) ENFORCEABILITY.......................................................................................19
(h) GOVERNMENT APPROVALS.................................................................................19
(i) FINANCIAL STATEMENTS AND ABSENCE OF CERTAIN MATERIAL ADVERSE CHANGES.................................19
(j) NATURE OF RECEIVABLES................................................................................20
(k) MARGIN REGULATIONS...................................................................................20
(l) QUALITY OF TITLE.....................................................................................20
(m) ACCURATE REPORTS.....................................................................................20
(n) OFFICES..............................................................................................20
(o) LOCK-BOX ACCOUNTS....................................................................................20
(p) ELIGIBLE RECEIVABLES.................................................................................21
(q) YEAR 2000 READINESS..................................................................................21
(r) NAMES................................................................................................21
(s) CREDIT AND COLLECTION POLICY.........................................................................21
(t) PAYMENTS TO ORIGINATOR...............................................................................21
(u) NOT AN INVESTMENT COMPANY............................................................................21
(v) BORROWING BASE.......................................................................................21
ARTICLE VII. GENERAL COVENANTS OF LOAN PARTIES...................................................................21
SECTION 7.1 AFFIRMATIVE COVENANTS OF LOAN PARTIES..........................................................21
(a) COMPLIANCE WITH LAWS, ETC............................................................................21
(b) PRESERVATION OF CORPORATE EXISTENCE..................................................................22
(c) AUDITS...............................................................................................22
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT..............................................................22
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS AND/OR INVOICES............................23
</TABLE>
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(f) LOCATION OF RECORDS..................................................................................23
(g) CREDIT AND COLLECTION POLICIES.......................................................................23
(h) SALE AGREEMENT.......................................................................................23
(i) COLLECTIONS..........................................................................................23
(j) FURTHER ASSURANCES...................................................................................23
SECTION 7.2 REPORTING REQUIREMENTS OF LOAN PARTIES.........................................................23
(a) QUARTERLY FINANCIAL STATEMENTS.......................................................................24
(b) ANNUAL FINANCIAL STATEMENTS..........................................................................24
(c) REPORTS TO SEC AND EXCHANGES.........................................................................24
(d) ERISA................................................................................................24
(e) EVENTS OF DEFAULT, ETC...............................................................................24
(f) LITIGATION...........................................................................................24
(g) REVIEWS OF RECEIVABLES...............................................................................24
(h) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY...................................................24
(i) ACCOUNTING PERIODS...................................................................................25
(j) OTHER................................................................................................25
SECTION 7.3 NEGATIVE COVENANTS OF LOAN PARTIES.............................................................25
(a) SALES, LIENS, ETC....................................................................................25
(b) EXTENSION OR AMENDMENT OF RECEIVABLES................................................................25
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY...................................................25
(d) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS...........................................................25
(e) DEPOSITS TO LOCK-BOX ACCOUNTS AND COLLECTION ACCOUNT.................................................26
(f) CHANGES TO OTHER DOCUMENTS...........................................................................26
(g) RESTRICTED PAYMENTS BY THE BORROWER..................................................................26
(h) BORROWER INDEBTEDNESS................................................................................26
(i) PROHIBITION ON ADDITIONAL NEGATIVE PLEDGES...........................................................26
(j) NAME CHANGE, OFFICES, RECORDS AND BOOKS OF ACCOUNTS..................................................27
(k) MERGERS, CONSOLIDATIONS AND ACQUISITIONS.............................................................27
(l) DISPOSITION OF RECEIVABLES AND RELATED ASSETS........................................................27
(m) BORROWING BASE.......................................................................................27
SECTION 7.4 SEPARATE CORPORATE EXISTENCE OF THE BORROWER...................................................27
ARTICLE VIII. ADMINISTRATION AND COLLECTION......................................................................30
SECTION 8.1 DESIGNATION OF SERVICER........................................................................30
(a) INTERIM SERVICES AS INITIAL SERVICER.................................................................30
(b) SUCCESSOR NOTICE; SERVICER TRANSFER EVENTS...........................................................30
(c) SUBCONTRACTS.........................................................................................30
(d) EXPENSE INDEMNITY AFTER A SERVICER TRANSFER EVENT....................................................31
SECTION 8.2 DUTIES OF SERVICER.............................................................................31
(a) APPOINTMENT; DUTIES IN GENERAL.......................................................................31
(b) SEGREGATION OF COLLECTIONS...........................................................................31
(c) MODIFICATION OF RECEIVABLES..........................................................................31
(d) DOCUMENTS AND RECORDS................................................................................31
(e) CERTAIN DUTIES TO THE BORROWER.......................................................................31
(f) TERMINATION..........................................................................................32
(g) POWER OF ATTORNEY....................................................................................32
SECTION 8.3 RIGHTS OF THE COLLATERAL AGENT.................................................................32
(a) NOTICE TO OBLIGORS...................................................................................32
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(b) NOTICE TO LOCK-BOX BANKS.............................................................................32
(c) RIGHTS ON SERVICER TRANSFER EVENT....................................................................32
SECTION 8.4 RESPONSIBILITIES OF LOAN PARTIES...............................................................33
(a) CONTRACTS............................................................................................33
(b) LIMITATION OF LIABILITY..............................................................................33
SECTION 8.5 FURTHER ACTION EVIDENCING THE SECURITY INTEREST................................................33
(a) FURTHER ASSURANCES...................................................................................33
(b) ADDITIONAL FINANCING STATEMENTS; CONTINUATION STATEMENTS; PERFORMANCE BY COLLATERAL AGENT............34
SECTION 8.6 APPLICATION OF COLLECTIONS.....................................................................34
ARTICLE IX. SECURITY INTEREST....................................................................................34
SECTION 9.1 GRANT OF SECURITY INTEREST.....................................................................34
SECTION 9.2 REMEDIES.......................................................................................35
SECTION 9.3 TERMINATION AFTER FINAL PAYOUT DATE............................................................35
SECTION 9.4 LIMITATION ON RIGHTS TO COLLATERAL PROCEEDS....................................................35
ARTICLE X. EVENTS OF DEFAULT.....................................................................................35
SECTION 10.1 EVENTS OF DEFAULT..............................................................................35
SECTION 10.2 REMEDIES.......................................................................................38
(a) OPTIONAL ACCELERATION................................................................................38
(b) AUTOMATIC ACCELERATIon...............................................................................38
(c) ADDITIONAL REMEDIES..................................................................................38
ARTICLE XI. THE AGENTS...........................................................................................38
SECTION 11.1 APPOINTMENT....................................................................................38
SECTION 11.2 DELEGATION OF DUTIES...........................................................................39
SECTION 11.3 EXCULPATORY PROVISIONS.........................................................................39
SECTION 11.4 RELIANCE BY AGENTS.............................................................................40
SECTION 11.5 NOTICE OF EVENTS OF DEFAULT....................................................................41
SECTION 11.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS.......................................................41
SECTION 11.7 INDEMNIFICATION OF AGENTS......................................................................42
SECTION 11.8 AGENTS IN THEIR INDIVIDUAL CAPACITIES..........................................................42
SECTION 11.9 SUCCESSOR COLLATERAL AGENT.....................................................................42
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SECTION 11.10 AGENTS'CONFLICT WAIVERS.....................................................................43
SECTION 11.11 UCC FILINGS.................................................................................44
ARTICLE XII. ASSIGNMENTS AND PARTICIPATIONS......................................................................44
SECTION 12.1 RESTRICTIONS ON ASSIGNMENTS, ETC...............................................................44
SECTION 12.2 RIGHTS OF ASSIGNEES AND PARTICIPANTS...........................................................45
SECTION 12.3 TERMS AND EVIDENCE OF ASSIGNMENT...............................................................46
ARTICLE XIII. INDEMNIFICATION....................................................................................46
SECTION 13.1 INDEMNITIES BY THE BORROWER....................................................................46
(a) GENERAL INDEMNITY....................................................................................46
(b) CONTEST OF TAX CLAIM; AFTER-TAX BASIS................................................................48
(c) CONTRIBUTION.........................................................................................49
SECTION 13.2 INDEMNITIES BY SERVICER........................................................................49
ARTICLE XIV. MISCELLANEOUS.......................................................................................50
SECTION 14.1 AMENDMENTS, ETC................................................................................50
SECTION 14.2 NOTICES, ETC...................................................................................50
SECTION 14.3 NO WAIVER; REMEDIES............................................................................50
SECTION 14.4 BINDING EFFECT; SURVIVAL.......................................................................50
SECTION 14.5 COSTS, EXPENSES AND TAXES......................................................................51
SECTION 14.6 NO PROCEEDINGS.................................................................................51
SECTION 14.7 CONFIDENTIALITY OF BORROWER INFORMATION........................................................51
(a) CONFIDENTIAL BORROWER INFORMATION....................................................................52
(b) DISCLOSURE...........................................................................................52
(c) LEGAL COMPULSION.....................................................................................53
(d) SURVIVAL.............................................................................................53
SECTION 14.8 CONFIDENTIALITY OF PROGRAM INFORMATION.........................................................54
(a) CONFIDENTIAL INFORMATION.............................................................................54
(b) AVAILABILITY OF CONFIDENTIAL INFORMATION.............................................................54
(c) LEGAL COMPULSION TO DISCLOSE.........................................................................54
(d) SURVIVAL.............................................................................................55
SECTION 14.9 CAPTIONS AND CROSS REFERENCES..................................................................55
SECTION 14.10 INTEGRATION.................................................................................55
SECTION 14.11 GOVERNING LAW...............................................................................55
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SECTION 14.12 WAIVER OF JURY TRIAL........................................................................56
SECTION 14.13 CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES...............................................56
SECTION 14.14 EXECUTION IN COUNTERPARTS...................................................................56
SECTION 14.15 NO RECOURSE AGAINST OTHER PARTIES...........................................................56
</TABLE>
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CREDIT AND SECURITY AGREEMENT
THIS CREDIT AND SECURITY AGREEMENT is entered into as of
July 1, 1999, by and among:
(1) INTERIM SERVICES RECEIVABLES CORP., a Delaware corporation
(together with its successors and permitted assigns, the "BORROWER"),
(2) INTERIM SERVICES INC., a Delaware corporation (together
with its successors, "INTERIM SERVICES"), as initial servicer hereunder
(in such capacity, together with any successor servicer or sub-servicer
appointed pursuant to SECTION 8.1, the "SERVICER"),
(3) BLUE RIDGE ASSET FUNDING CORPORATION, a Delaware
corporation (together with its successors, "BLUE RIDGE"), FALCON ASSET
SECURITIZATION CORPORATION, a Delaware corporation (together with its
successors, "FALCON" and, together with Blue Ridge, the "CONDUITS"),
WACHOVIA BANK, N.A., a national banking association, in its capacity as
a Liquidity Bank to Blue Ridge (together with its successors,
"WACHOVIA"), and THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association, in its capacity as a Liquidity Bank to Falcon (together
with its successors, "FIRST CHICAGO"), as Lenders (hereinafter
defined),
(4) WACHOVIA BANK, N.A., as administrative and liquidity agent
for Blue Ridge and its Liquidity Banks (in such capacity, the "BLUE
RIDGE AGENT"), and THE FIRST NATIONAL BANK OF CHICAGO, as
administrative and liquidity agent for Falcon and its Liquidity Banks
(in such capacity, the "FALCON AGENT" and, together with the Blue Ridge
Agent, the "CO-AGENTS"), and
(5) WACHOVIA BANK, N.A., as collateral agent for the Agents
and the Lenders (in such capacity, together with any successors thereto
in such capacity, the "COLLATERAL AGENT").
UNLESS OTHERWISE INDICATED, CAPITALIZED TERMS USED IN THIS AGREEMENT ARE DEFINED
IN ANNEX A.
W I T N E S S E T H :
WHEREAS, the Borrower is a wholly-owned direct subsidiary of
INTERIM SERVICES;
WHEREAS, INTERIM SERVICES is engaged primarily in the business
of providing professionals in the fields of information technology,
finance, law, manufacturing and human resources, as well as clerical,
administrative and light industrial staffing through its four main
operating segments -- consulting, managed services, search/recruitment
and flexible staffing;
<PAGE> 9
WHEREAS, INTERIM SERVICES and certain of its Subsidiaries as
Originators and the Borrower have entered into the Sale Agreement
pursuant to which each of the Originators has sold, and hereafter will
sell, to the Borrower all of its right, title and interest in and to
its accounts receivable and certain related rights;
WHEREAS, the Borrower has requested that the Lenders make
revolving loans to the Borrower from time to time hereafter secured by
the Collateral, and, subject to the terms and conditions contained in
this Agreement, the Lenders are willing to make such secured loans;
WHEREAS, the Lenders have requested that INTERIM SERVICES act
as the initial Servicer for the Collateral, and, subject to the terms
and conditions contained in this Agreement, INTERIM SERVICES is willing
to act in such capacity; and
WHEREAS, Wachovia has been requested, and is willing, to act
as the Collateral Agent under this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I.
THE CREDIT
Section 1.1 THE FACILITY. On the terms and subject to the
conditions set forth in this Agreement, the Borrower (or the Servicer on the
Borrower's behalf) may from time to time during the Revolving Period request
Advances by delivering a Borrowing Request to the Co-Agents in accordance with
SECTION 2.1. Upon receipt of a copy of each Borrowing Request from the Borrower
or Servicer, each of the Co-Agents shall advise the Borrower not later than
12:00 noon (New York City time) on the Business Day following such receipt
whether its Conduit or such Conduit's Liquidity Banks will fund a Loan in an
amount equal to its Percentage of the requested Advance, and:
(a) in the event that Blue Ridge elects not to make any such
Loan to the Borrower, each of the Liquidity Banks of Blue Ridge severally agrees
to make its Ratable Share of such Loan to the Borrower, on the terms and subject
to the conditions hereof, PROVIDED THAT at no time may the aggregate principal
amount of Blue Ridge's and its Liquidity Banks' Loans at any one time
outstanding exceed the lesser of (i) the aggregate amount of the Blue Ridge
Liquidity Banks' Commitments, and (ii) Blue Ridge's Percentage of the Borrowing
Base (such lesser amount, the "BLUE RIDGE ALLOCATION LIMIT"); and
(b) in the event that Falcon elects not to make any such Loan
to the Borrower, each of the Liquidity Banks of Falcon severally agrees to make
its Ratable Share of such Loan to the Borrower, on the terms and subject to the
conditions hereof, PROVIDED THAT at no time may the aggregate principal amount
of Falcon's and its Liquidity Banks' Loans at any one time outstanding exceed
the lesser of (i) the aggregate amount of the Falcon Liquidity Banks'
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Commitments, and (ii) Falcon's Percentage of the Borrowing Base (such lesser
amount, the "FALCON ALLOCATION LIMIT").
Each Loan shall be in the minimum amount of $1,000,000 or a larger integral
multiple of $500,000. In no event may the aggregate principal amount of the
Advances hereunder exceed the lesser of (x) the Aggregate Commitment, or (y) the
Borrowing Base. All Liquidity Banks' Commitments shall terminate on the
Termination Date. Each of the Loans, and all other Obligations of the Borrower,
shall be secured by the Collateral as provided in Article IX.
Section 1.2 RATABLE LOANS; FUNDING MECHANICS; LIQUIDITY
FUNDINGS.
(a) Each Advance hereunder shall consist of Loans made from
Falcon and/or its Liquidity Banks, on the one hand, and Blue Ridge and/or its
Liquidity Banks, on the other hand, ratably in proportion to their respective
Percentages.
(b) Each Lender funding any Loan (or portion thereof) shall
initiate a wire transfer in the principal amount of its Loan on the applicable
Borrowing Date to its applicable Co-Agent in immediately available funds not
later than 10:00 a.m. (New York City time) on the applicable Borrowing Date and,
subject to its receipt of such Loan proceeds, such Co-Agent shall initiate a
wire transfer of such funds to the account specified by the Borrower in its
Borrowing Request not later than 11:00 a.m. (New York City time) on such
Borrowing Date.
(c) While it is the intent of the Conduits to fund their
respective Percentages of each requested Advance through the issuance of
Commercial Paper Notes, the parties acknowledge that if either of the Conduits
is unable, or determines that it is undesirable, to issue Commercial Paper Notes
to fund all or any portion its Loans at a CP Rate, or is unable to repay such
Commercial Paper Notes upon the maturity thereof, such Conduit may put all or
any portion of its Loans to its Liquidity Banks at any time pursuant to its
Liquidity Agreement to finance or refinance the necessary portion of its Loans
through a Liquidity Funding to the extent available. The Liquidity Fundings may
be Alternate Base Rate Loans or Eurodollar Loans, or a combination thereof,
selected by the Borrower in accordance with Article II. In addition, the parties
acknowledge that Commercial Paper Notes are issued at a discount and at varying
discount rates; accordingly, it may not be possible for all CP Rate Loans to be
made in amounts precisely equal to the amounts specified in a Borrowing Request.
Regardless of whether a Liquidity Funding constitutes an assignment of a Loan or
the sale of one or more participations therein, each Liquidity Bank
participating in a Liquidity Funding shall have the rights of a "Lender"
hereunder with the same force and effect as if it had directly made a Loan to
the Borrower in the amount of its Liquidity Funding.
(d) Nothing herein shall be deemed to commit any Lender to
make CP Rate Loans.
Section 1.3 INTEREST RATES.
(a) Each CP Rate Loan shall bear interest on the outstanding
principal amount thereof from and including the first day of the CP Tranche
Period applicable thereto selected in
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accordance with Article II of this Agreement to (but not including) the last day
of such CP Tranche Period at the applicable CP Rate.
(b) Each Eurodollar Loan shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto selected in accordance with Article II of
this Agreement to (but not including) the last day of such Interest Period at a
rate per annum equal to the sum of (i) the applicable Eurodollar Rate (Reserve
Adjusted) for such Interest Period plus (ii) 0.60% per annum.
(c) Each Alternate Base Rate Loan shall bear interest on the
outstanding principal amount thereof, for each day from and including the date
such Loan is made to but excluding the date it is paid at a rate per annum equal
to the Alternate Base Rate for such day. Changes in the rate of interest on
Alternate Base Rate Loans will take effect simultaneously with each change in
the Alternate Base Rate.
(d) Notwithstanding anything to the contrary contained in
SECTIONS 1.3(a), (b) or (c), upon the occurrence of an Event of Default, and
during the continuance thereof, all Obligations shall bear interest, payable
upon demand, at the Default Rate.
(e) Interest at any of the aforementioned rates shall be
calculated for actual days elapsed on the basis of a 360-day year. Interest
shall be payable for the day a Loan is made but not for the day of any payment
on the amount paid if payment is received prior to noon (local time) at the
place of payment. If any payment of principal of or interest on a Loan shall
become due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing interest in connection with
such payment.
Section 1.4 PAYMENT DATES; NOTELESS AGREEMENT.
(a) The Borrower promises to pay each CP Rate Loan on the last
day of its CP Tranche Period.
(b) The Borrower promises to pay each Eurodollar Loan on the
last day of its Interest Period.
(c) The Borrower promises to pay each Alternate Base Rate
Loan, together with all accrued and unpaid interest thereon, on or before the
earlier to occur of (i) the Termination Date, and (ii) refinancing of such Loan
with a CP Rate Loan or a Eurodollar Rate Loan.
(d) The Borrower promises to pay all accrued and unpaid
interest on each Loan on its applicable Interest Payment Date.
(e) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder. Upon request of its Co-Agent or the Collateral
Agent, such Lender will confirm the outstanding principal balances of its
4
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Loans and the amount of any accrued and unpaid interest thereon. The entries
maintained in the accounts maintained pursuant to this Section shall be PRIMA
FACIE evidence of the existence and amounts of the Obligations therein recorded;
PROVIDED, HOWEVER, that the failure of any Lender to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Obligations in accordance with their terms.
Section 1.5 PREPAYMENTS. Subject, in the case of CP Rate Loans
and Eurodollar Loans, to the funding indemnification provisions of Section 4.3:
(a) The Borrower may from time to time prepay, without penalty
or premium, all outstanding Loans, or, in a minimum aggregate amount of
$2,000,000 (or a larger integral multiple of $1,000,000), any portion of the
outstanding Loans upon two Business Days' prior written notice to the Co-Agents
(each, a "PREPAYMENT NOTICE"), PROVIDED THAT each such prepayment of principal
is accompanied by a payment of all accrued and unpaid interest thereon and is
made ratably amongst the Lenders;
(b) If on any Business Day, the aggregate outstanding
principal amount of Blue Ridge's Loans and the Liquidity Fundings made by Blue
Ridge's Liquidity Banks exceeds the Blue Ridge Allocation Limit, the Borrower
shall prepay such Loans, without premium or penalty, by initiating a wire
transfer to the Blue Ridge Co-Agent not later than 11:00 a.m. (New York City
time) on the second Business Day thereafter in an amount sufficient to eliminate
such excess, together with accrued and unpaid interest on the amount prepaid;
(c) If on any Business Day, the aggregate outstanding
principal amount of Falcon's Loans and the Liquidity Fundings made by Falcon's
Liquidity Banks exceeds the Falcon Allocation Limit, the Borrower shall prepay
such Loans, without premium or penalty, by initiating a wire transfer to the
Falcon Co-Agent not later than 11:00 a.m. (New York City time) on the second
Business Day thereafter in an amount sufficient to eliminate such excess,
together with accrued and unpaid interest on the amount prepaid; and
(d) Upon receipt of any wire transfer pursuant to SECTION
1.5(b) or (c), the applicable Co-Agent shall initiate a wire transfer to each of
its constituent Lenders of their respective shares thereof not later than 11:00
a.m. (New York City time) on the date when received.
Section 1.6 REDUCTIONS IN AGGREGATE COMMITMENT. The Borrower
may permanently reduce the Aggregate Commitment in whole, or ratably in part, in
a minimum amount of $10,000,000 (or a larger integral multiple of $1,000,000),
upon at least five Business Days' written notice to the Co-Agents (each, a
"COMMITMENT REDUCTION NOTICE"), which notice shall specify the aggregate amount
of any such reduction and the Blue Ridge Liquidity Banks' and Falcon Liquidity
Banks' respective Percentages thereof, PROVIDED, HOWEVER, that (a) the amount of
the Aggregate Commitment may not be reduced below the aggregate principal amount
of the outstanding Advances, and (b) the amount of the Aggregate Commitment may
not be reduced below $50,000,000 unless the Aggregate Commitment is terminated
in full. All accrued and unpaid fees shall be payable on the effective date of
any termination of the Aggregate
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Commitment. Each Commitment Reduction Notice shall be irrevocable once delivered
to the Co-Agents.
Section 1.7 REQUESTS FOR INCREASES IN AGGREGATE COMMITMENT.
The Borrower may from time to time request increases in the Aggregate Commitment
in a minimum amount of $10,000,000 (or a larger integral multiple of
$1,000,000), upon at least 30 days' prior written notice to the Co-Agents, which
notice shall specify the amount of and proposed effective date for any such
requested increase (each, a "COMMITMENT INCREASE REQUEST"). If both Co-Agents
agree to the requested increase by notifying the Borrower in writing of their
concurrence, such increase shall be made to the Commitments of the Blue Ridge
Liquidity Banks and the Falcon Liquidity Banks, ratably in accordance with their
respective Percentages and Ratable Shares as of the effective date specified in
the Commitment Increase Request. If either Co-Agent declines such request, the
other Co-Agent may elect to increase the Commitments of its constituent
Liquidity Banks by all or any portion of the entire amount requested, in which
case the Percentages shall be adjusted to reflect such increase on the effective
date specified in the Commitment Increase Request. If neither Co-Agent agrees to
such increase, the amount of the Aggregate Commitment shall remain unchanged.
Section 1.8 EXTENSION OF THE SCHEDULED TERMINATION DATE.
Provided that no Event of Default exists and is continuing, the Borrower may
request an extension of the Scheduled Termination Date by submitting a request
for an extension (each, an "EXTENSION REQUEST") to the Co-Agents no more than 60
days prior to the Scheduled Termination Date then in effect. The Extension
Request must specify the new Scheduled Termination Date requested by the
Borrower and the date (which must be at least 30 days after the Extension
Request is delivered to the Co-Agents) as of which the Co-Agents and their
respective constituents must respond to the Extension Request (the "RESPONSE
DATE"). The new Scheduled Termination Date shall be no more than 364 days after
the Scheduled Termination Date in effect at the time the Extension Request is
received, including the Scheduled Termination Date as one of the days in the
calculation of the days elapsed. Promptly upon receipt of an Extension Request,
the Blue Ridge Agent shall notify Blue Ridge and its Liquidity Banks of the
contents thereof and shall request each such Person to approve the Extension
Request, and the Falcon Agent shall notify Falcon and its Liquidity Banks of the
contents thereof and shall request each such Person to approve the Extension
Request. Each Lender and Liquidity Bank approving the Extension Request shall
deliver its written approval to its Co-Agent no later than the Response Date,
whereupon such Co-Agent shall notify the other Co-Agent and the Borrower within
one Business Day thereafter as to whether all of such Co-Agent's constituents
have approved the Extension Request. If all of the Blue Ridge Agent's
constituents and all of the Falcon Agent's constituents have approved the
Extension Request, the Scheduled Termination Date specified in the Extension
Request shall become effective on the existing Scheduled Termination Date, and
each of the Co-Agents shall promptly notify the Borrower and the other Co-Agent
of the new Scheduled Termination Date. If either Co-Agent's constituents do not
unanimously agree to an Extension Request, the Borrower shall have the right to
require such constituents to assign all, but not less than all, of their
Commitment (as applicable) and outstanding Obligations by entering into written
assignments with one or more Eligible Assignees not later than the 5th Business
Day prior to the existing Scheduled Termination Date. Each such assignment to an
Eligible Assignee (including, if agreed by the other Co-Agent's constituents, to
such
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constituents) shall become effective on such existing Scheduled Termination Date
and, subject to receipt of payment in full on such existing Scheduled
Termination Date for all such Obligations, the non-extending Lenders shall make
such assignments; PROVIDED THAT any expenses or other amounts which would be
owing to such Lender pursuant to any indemnification provision hereof shall be
payable by the Borrower as if the Borrower had prepaid the Loans of the
assigning Lenders rather than such assigning Lenders having assigned their
respective interests hereunder.
Section 1.9 DISTRIBUTION OF CERTAIN NOTICES; NOTIFICATION OF
INTEREST RATES. Promptly after receipt thereof, the Blue Ridge Agent will notify
Blue Ridge and its Liquidity Banks, and the Falcon Agent will notify Falcon and
its Liquidity Banks of the contents of each Information Package, Borrowing
Request, Extension Request, Commitment Reduction Notice, Prepayment Notice,
Commitment Increase Request or notice of default received by it from the
Borrower or the Servicer hereunder. In addition, each of the Co-Agents shall
promptly notify its constituent Lenders and the Borrower of each determination
of and change in Interest Rates.
ARTICLE II.
BORROWING AND PAYMENT MECHANICS; CERTAIN COMPUTATIONS
Section 2.1 METHOD OF BORROWING. The Borrower (or the Servicer
on the Borrower's behalf) shall give the Co-Agents irrevocable notice in the
form of EXHIBIT 2.1 hereto (each, a "BORROWING REQUEST") not later than 12:00
noon (New York City time) at least two Business Days before the Borrowing Date
of each Advance. On each Borrowing Date, each Lender shall make available its
Loan or Loans in immediately available funds to its Co-Agent by initiating a
wire transfer in such amount not later than 10:00 a.m. (New York City time).
Subject to its receipt of such wire transfers, each Co-Agent will initiate a
wire transfer of the funds so received from the Lenders to the Borrower at the
account specified in its Borrowing Request not later than 11:00 a.m. (New York
City time) on the applicable Borrowing Date. Neither the Borrower, nor the
Servicer on the Borrower's behalf, may deliver more than 1 Borrowing Request in
any week of this Agreement (except that the Borrower, or the Servicer on the
Borrower's behalf, may deliver up to 2 Borrowing Requests in the week in which
INTERIM SERVICES' acquisition of Norrell Corporation and/or its Subsidiaries is
consummated).
Section 2.2 SELECTION OF CP TRANCHE PERIODS AND INTEREST
PERIODS.
Prior to the occurrence of an Event of Default, the Borrower
or the Servicer in its Borrowing Request may request CP Tranche Periods
(or, in the case of Liquidity Fundings, Interest Periods) from time to
time to apply to each Lender's CP Rate Loans or Eurodollar Loans, as
applicable; PROVIDED, HOWEVER, that (i) at least one CP Tranche Period
or one Interest Period shall mature on each Settlement Date, and (ii)
no CP Tranche Period or Interest Period which began prior to the
Scheduled Termination Date shall extend beyond the Scheduled
Termination Date.
While each of the Co-Agents will use reasonable efforts to
accommodate the Borrower's or the Servicer's requests for CP Tranche
Periods or Interest Periods prior to an Event of Default, each of the
Co-Agents shall have the right to subdivide any requested Loan into one
or more Loans of different CP Tranche Periods or Interest Periods, as
the case may be, or, if the requested period is not feasible, to
suggest an
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alternative CP Tranche Period or Interest Period, PROVIDED THAT not
less than $1,000,000 of principal may be allocated to any CP Tranche
Period or Interest Period of any Lender, and no Alternate Base Rate
Loan may have a principal amount of less than $1,000,000.
The Borrower (or the Servicer on the Borrower's behalf) may
not request an Interest Period for a Eurodollar Loan unless it shall
have given the Co-Agents written notice of its desire therefor not
later than 12:00 noon (New York City time) at least 3 Business Days
prior to the first day of the desired Interest Period. Accordingly, all
Liquidity Fundings shall initially be Alternate Base Rate Loans.
Unless the Co-Agents shall have received written notice by
12:00 noon (New York City time) on the second Business Day prior to the
last day of a CP Tranche Period that the Borrower intends to reduce the
aggregate principal amount of the Conduits' respective CP Rate Loans
outstanding, each Conduit shall be entitled to assume that the Borrower
desires to refinance its maturing CP Rate Loans on the last day of such
CP Tranche Period with new CP Rate Loans in like principal amounts with
CP Tranche Periods of approximately the same duration; PROVIDED,
HOWEVER, that neither Conduit shall be liable for failure to effect
such refinancing and the Borrower shall remain liable for failure to
pay the matured CP Rate Loans which were not so refinanced.
Unless the Co-Agents shall have received written notice by
12:00 noon (New York City time) on the third Business Day prior to the
last day of an Interest Period that the Borrower intends to reduce the
aggregate principal amount of the Eurodollar Loans outstanding from the
Liquidity Banks, each of the Liquidity Banks shall be entitled to
assume that the Borrower desires to refinance its maturing Eurodollar
Loans on the last day of such Interest Period with Alternate Base Rate
Loans.
Section 2.3 COMPUTATION OF CONCENTRATION LIMITS AND UNPAID
BALANCE. The Obligor Concentration Limits and the aggregate Unpaid Balance of
Receivables of each Obligor and its Affiliated Obligors (if any) shall be
calculated as if each such Obligor and its Affiliated Obligors were one Obligor.
Section 2.4 MAXIMUM INTEREST RATE. No provision of this
Agreement shall require the payment or permit the collection of interest in
excess of the maximum permitted by applicable law.
Section 2.5 PAYMENTS AND COMPUTATIONS, ETC.
(a) PAYMENTS. The Borrower or the Servicer, as the case may
be, shall initiate a wire transfer of immediately available funds of all amounts
to be paid or deposited by the Borrower or the Servicer to any of the Agents or
the Lenders (other than amounts payable under SECTION 4.2) no later than 11:00
a.m. (New York City time) on the day when due in lawful money of the United
States of America to the applicable Co-Agent at such Co-Agent's address
specified in SCHEDULE 14.2, and, to the extent such payment is for the account
of a Lender, such Co-Agent shall promptly disburse such funds to the appropriate
Lender.
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(b) LATE PAYMENTS. To the extent permitted by law, upon
demand, the Borrower or the Servicer, as applicable, shall pay to the applicable
Co-Agent for the account of each Person to whom payment of any Obligation is
due, interest on all amounts not paid or deposited by 2:00 p.m. (New York City
time) on the date when due (without taking into account any applicable grace
period) at the Default Rate as specified in SECTION 10.1(a), PROVIDED, HOWEVER,
that no such interest rate shall at any time exceed the maximum rate permitted
by applicable law.
(c) METHOD OF COMPUTATION. All computations of interest,
Servicer's Fee, any per annum fees payable under SECTION 4.1 and any other per
annum fees payable by the Borrower to the Lenders, the Servicer or the Agents
under the Loan Documents 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)
elapsed.
(d) AVOIDANCE OR RECISSION OF PAYMENTS. To the maximum extent
permitted by applicable law, no payment of any Obligation shall be considered to
have been paid if at any time such payment is rescinded or must be returned for
any reason.
Section 2.6 NON-RECEIPT OF FUNDS BY THE CO-AGENTS. Unless a
Lender notifies its Co-Agent prior to the date and time on which it is scheduled
to fund a Loan that it does not intend to fund, such Co-Agent may assume that
such funding will be made and may, but shall not be obligated to, make the
amount of such Loan available to the intended recipient in reliance upon such
assumption. If such Lender has not in fact funded its Loan proceeds to its
Co-Agent, the recipient of such payment shall, on demand by such Co-Agent, repay
to such Co-Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such amount was so
made available by such Co-Agent until the date such Co-Agent recovers such
amount at a rate per annum equal to the Federal Funds Rate for such day.
ARTICLE III.
SETTLEMENTS
Section 3.1 REPORTING.
(a) INFORMATION PACKAGES. Not later than 15 Business Days
after each Cut-Off Date hereafter (each, a "REPORTING DATE"), the Servicer shall
deliver to the Co-Agents, a report in the form of EXHIBIT 3.1(a) (each, an
"INFORMATION PACKAGE") accompanied by an electronic file in a form reasonably
satisfactory to the Co-Agents; PROVIDED, HOWEVER, that if an Event of Default
shall exist and be continuing, either of the Co-Agents may request that a
computation of the Borrowing Base be made more frequently than monthly.
(b) INTEREST; OTHER AMOUNTS DUE. At or before 12:00 noon (New
York City time) on the Business Day before each Settlement Date, each of the
Co-Agents shall notify the Borrower and the Servicer of (i) the aggregate
principal balance of all Loans made by such Co-Agent's constituent Lenders that
are then outstanding, and (ii) the aggregate amount of all
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principal, interest and fees that will be due and payable by the Borrower to
such Co-Agent for the account of such Co-Agent or its constituent Lenders on
such Settlement Date.
Section 3.2 TURNOVER OF COLLECTIONS. Without limiting the
Agents' and the Lenders' recourse to the Borrower for payment of any and all
Obligations:
(a) If any Information Package reveals that a mandatory
prepayment is required under SECTION 1.5(b) or (c), not later than the 12:00
noon (New York City time) on the next succeeding Settlement Date, the Servicer
shall turn over to the Co-Agents, for distribution to their respective
constituent Lenders, a portion of the Collections equal to the aggregate amount
of such required mandatory prepayments;
(b) If any Loans are to be voluntarily prepaid on a Settlement
Date in accordance with SECTION 1.5(a), on such Settlement Date, the Servicer
shall turn over to the Co-Agents, for distribution to their respective
constituent Lenders, a portion of the Collections equal to the aggregate amount
of such optional prepayment; and
(c) In addition to, but without duplication of, the foregoing,
on (i) each Settlement Date and (ii) each other date on which any principal of
or interest on any of the Loans becomes due (whether by acceleration or
otherwise), the Servicer shall turn over to the Co-Agents, for distribution to
their respective constituent Lenders, a portion of the Collections equal to the
aggregate amount all Obligations that are due and owing on such date.
If the Collections are insufficient to make all payments required under clauses
(a), (b) and (c) and the Servicer's Fees and, if applicable, all expenses due
and owing to any replacement Servicer under SECTION 8.1(d) (all of the
foregoing, collectively, the "REQUIRED AMOUNTS") and the Borrower has made any
Demand Advances, the Borrower shall make demand upon INTERIM SERVICES for
payment of the Demand Advances in an amount equal to the lesser of the Required
Amounts or the aggregate outstanding principal balance of such Demand Advances
(plus any accrued and unpaid interest thereon) and, upon receipt of any such
amounts, the Borrower shall pay them to the Co-Agents for distribution in
accordance with this SECTION 3.2.
(d) If the amount of Collections and payments on Demand
Advances received by the Co-Agents on any Settlement Date are insufficient to
pay all Required Amounts, such amount shall be applied to the items specified in
the subclauses below, in the order of priority of such subclauses:
(i) to any accrued and unpaid interest on the Loans that is
then due and owing, including any previously accrued interest which was not paid
on its applicable due date;
(ii) if the Servicer is not the Borrower or an Affiliate
thereof, to any accrued and unpaid Servicer's Fee that is then due and owing to
such Servicer, together with any invoiced expenses of the Servicer due and owing
pursuant to SECTION 8.1(d);
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(iii) to the Facility Fee and the Usage Fee accrued during
such Settlement Period, plus any previously accrued Facility Fee and Usage Fee
not paid on a prior Settlement Date;
(iv) to the payment of the principal of any Loans that are
then due and owing;
(v) to other Obligations that are then due and owing;
(vi) if the Servicer is the Borrower, INTERIM SERVICES or one
of their respective Affiliates, to the accrued and unpaid Servicer's Fee and
Supplemental Servicer's Fee that are then due and owing to such Servicer; and
(vii) the balance, if any, to the Borrower.
Section 3.3 NON-DISTRIBUTION OF SERVICER'S FEE. Each of the
Agents and the Secured Parties hereby consents to the retention by the Servicer
of a portion of the Collections equal to the Servicer's Fee (and, if applicable,
any invoiced expenses of such Servicer that are due and owing pursuant to
SECTION 8.1(d)) so long as the Collections received by the Servicer are
sufficient to pay all amounts pursuant to SECTION 3.2 of a higher priority as
specified in such Section.
Section 3.4 DEEMED COLLECTIONS. If on any day:
(a) the Unpaid Balance of any Receivable is reduced as a
result of any rejected services, any cash discount, any Applicable Rebill, or
any other adjustment by any Loan Party or any Affiliate thereof, or as a result
of any tariff or other governmental or regulatory action, or
(b) the Unpaid Balance of any Receivable is reduced or
canceled as a result of a setoff in respect of any claim by the Obligor thereof
(whether such claim arises out of the same or a related or an unrelated
transaction), or
(c) the Unpaid Balance of any Receivable is reduced on account
of the obligation of any Loan Party or any Affiliate thereof to pay to the
related Obligor any rebate or refund, or
(d) the Unpaid Balance of any Receivable is less than the
amount included in calculating the Net Pool Balance for purposes of any
Information Package (for any reason other than such Receivable becoming a
Defaulted Receivable), or
(e) any of the representations or warranties of the Borrower
set forth in SECTION 6.1(j), (l) or (p) were not true when made with respect to
any Receivable, or any of the representations or warranties of the Borrower set
forth in SECTION 6.1(l) are no longer true with respect to any Receivable, or
any Receivable is repurchased by any of the Originators pursuant to the Sale
Agreement,
then, on such day, the Borrower shall be deemed to have received a Collection of
such Receivable (1) in the case of clauses (a)-(d) above, in the amount of such
reduction or
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cancellation or the difference between the actual Unpaid Balance and the amount
included in calculating such Net Pool Balance, as applicable; and (2) in the
case of clause (e) above, in the amount of the Unpaid Balance of such
Receivable.
ARTICLE IV.
FEES AND YIELD PROTECTION
Section 4.1 FEES. INTERIM SERVICES or the Borrower, as
applicable, shall pay to the Agents and the Lenders certain fees from time to
time in amounts and payable on such dates as are set forth in the Fee Letters.
Section 4.2 YIELD PROTECTION.
If (i) Regulation D or (ii) any Regulatory Change occurring
after the date hereof:
(a) shall subject an Affected Party to any tax, duty or other
charge with respect to its Obligations or, as applicable, its Commitment or its
commitment under any Liquidity Agreement, or shall change the basis of taxation
of payments to the Affected Party of any Obligations, owed to or funded in whole
or in part by it or any other amounts due under this Agreement in respect of its
Obligations or, as applicable, its Commitment or its commitment under any
Liquidity Agreement except for (1) taxes based on, or measured by, net income,
or changes in the rate of tax on or determined by reference to the overall net
income, of such Affected Party imposed by the United States of America, by the
jurisdiction in which such Affected Party's principal executive office is
located and, if such Affected Party's principal executive office is not in the
United States of America, by the jurisdiction where such Affected Party's
principal office in the United States is located, (2) franchise taxes, taxes on,
or in the nature of, doing business taxes or capital taxes, or (3) withholding
taxes required for payments made to any foreign entity which, at the time such
foreign entity issues its Commitment or Liquidity Commitment or becomes an
assignee of a Lender hereunder, fails to deliver to the applicable Co-Agent and
the Borrower an accurate IRS Form 1001 or 4224, as applicable; or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Federal Reserve
Board, but excluding any reserve included in the determination of interest),
special deposit or similar requirement against assets of any Affected Party,
deposits or obligations with or for the account of any Affected Party or with or
for the account of any affiliate (or entity deemed by the Federal Reserve Board
to be an affiliate) of any Affected Party, or credit extended by any Affected
Party; or
(c) shall affect the amount of capital required or expected to
be maintained by any Affected Party; or
(d) shall impose any other condition affecting any Obligation
owned or funded in whole or in part by any Affected Party, or its rights or
obligations, if any, to make Loans or Liquidity Fundings; or
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(e) shall change the rate for, or the manner in which the
Federal Deposit Insurance Corporation (or a successor thereto) assesses deposit
insurance premiums or similar charges;
and the result of any of the foregoing is or would be:
(x) to increase the cost to or to impose a cost on
(I) an Affected Party funding or making or maintaining any
Loan, any Liquidity Funding, or any commitment of such
Affected Party with respect to any of the foregoing, or (II)
any Agent for continuing its or the Borrower's relationship
with any Affected Party, in each case, in an amount deemed to
be material by such Affected Party,
(y) to reduce the amount of any sum received or
receivable by an Affected Party under this Agreement or under
its Liquidity Agreement, or
(z) to reduce the rate of return on such Affected
Party's capital as a consequence of its Commitment, its
Liquidity Commitment or the Loans made by it to a level below
that which such Affected Party could have achieved but for the
occurrence of such circumstances,
then, within thirty days after demand by such Affected Party (which demand shall
be made not more than 180 days after the date on which the Affected Party
becomes aware of such Regulatory Change and shall be accompanied by a
certificate setting forth, in reasonable detail, the basis of such demand and
the methodology for calculating, and the calculation of, the amounts claimed by
the Affected Party), the Borrower shall pay directly to such Affected Party such
additional amount or amounts as will compensate such Affected Party for such
actual additional cost, actual increased cost or actual reduction.
(f) Each Affected Party will promptly notify the Borrower and
the applicable Co-Agent of any event of which it has knowledge (including any
future event that, in the judgment of such Affected Party, is reasonably certain
to occur) which will entitle such Affected Party to compensation pursuant to
this SECTION 4.2; PROVIDED, HOWEVER, no failure to give or delay in giving such
notification shall adversely affect the rights of any Affected Party to such
compensation unless such notification is given more than 180 days after the
Affected Party becomes aware of such Regulatory Change.
(g) In determining any amount provided for or referred to in
this SECTION 4.2, an Affected Party may use any reasonable averaging and
attribution methods (consistent with its ordinary business practices) that it
(in its reasonable discretion) shall deem applicable. Any Affected Party when
making a claim under this SECTION 4.2 shall submit to the Borrower the
above-referenced certificate as to such actual increased cost or actual reduced
return (including calculation thereof in reasonable detail), which statement
shall, in the absence of demonstrable error, be conclusive and binding upon the
Borrower.
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(h) Each of the Lenders agrees, and to require each Affected
Party to agree that, with reasonable promptness after an officer of such Lender
or such Affected Party responsible for administering the Transaction Documents
becomes aware that it has become an Affected Party under this SECTION 4.2, is
entitled to receive payments under this SECTION 4.2, or is or has become subject
to U.S. withholding taxes payable by any Loan Party in respect of its investment
hereunder, it will, to the extent not inconsistent with any internal policy of
such Person or any applicable legal or regulatory restriction, (i) use all
reasonable efforts to make, fund or maintain its commitment or investment
hereunder through another branch or office of such Affected Party, or (ii) take
such other reasonable measures, if, as a result thereof, the circumstances which
would cause such Person to be an Affected Party under this SECTION 4.2 would
cease to exist, or the additional amounts which would otherwise be required to
be paid to such Person pursuant to this SECTION 4.2 would be reduced, or such
withholding taxes would be reduced, and if the making, funding or maintaining of
such commitment or investment through such other office or in accordance with
such other measures, as the case may be, would not otherwise adversely affect
such commitment or investment or the interests of such Person; provided that
such Person will not be obligated to utilize such other lending office pursuant
to this SECTION 4.2 unless the Borrower agrees to pay all incremental expenses
incurred by such Person as a result of utilizing such other office as described
in clause (i) above.
(i) If any Liquidity Bank makes a claim for compensation under
this SECTION 4.2, the Borrower may propose an Eligible Assignee to such
Liquidity Bank's Co-Agent who is willing to accept an assignment of all of such
Liquidity Bank's rights and obligations under the Transaction Documents;
PROVIDED THAT any expenses or other amounts which would be owing to such
Liquidity Bank pursuant to any indemnification provision hereof (including, if
applicable, SECTION 4.3) shall be payable by the Borrower as if the Borrower had
prepaid the Loans of the assigning Lenders rather than such assigning Lenders
having assigned their respective interests hereunder. Provided that such
proposed Eligible Assignee is acceptable to such Co-Agent (who shall not
unreasonably withhold or delay its approval), the claiming Liquidity Bank will
be obligated to assign all of its rights and obligations to such proposed
Eligible Assignee within 10 Business Days after such Co-Agent gives its consent
to such proposed Eligible Assignee.
Section 4.3 FUNDING LOSSES. In the event that any Lender or
any Liquidity Bank shall actually incur any actual loss or expense (including
any actual loss or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to make any Loan or such
Liquidity Bank to make any Liquidity Funding or maintain any Liquidity Funding)
as a result of (i) any payment of principal with respect to Lender's Loan being
made on any day other than the scheduled last day of an applicable CP Tranche
Period or Interest Period with respect thereto (it being understood that the
foregoing shall not apply to any Alternate Base Rate Loans), or (ii) any Loan
not being made in accordance with a request therefor under SECTION 2.1, then,
upon written notice from any Co-Agent to the Borrower and the Servicer, the
Borrower shall pay to the Servicer, the Servicer shall pay to the applicable
Co-Agent for the account of such Lender or Liquidity Bank, as applicable, the
amount of such actual loss or expense. Such written notice (which shall include
the methodology for calculating, and the calculation of, the amount of such
actual loss or expense, in reasonable detail) shall, in the absence of
demonstrable error, be conclusive and binding upon the Borrower and the
Servicer.
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ARTICLE V.
CONDITIONS OF ADVANCES
Section 5.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE. The
initial Advances pursuant to this Agreement is subject to the condition
precedent that each of the Co-Agents shall have received, on or before the date
of such initial Advance, the following each (unless otherwise indicated) dated
such date and in form and substance reasonably satisfactory to each of the
Co-Agents:
(a) The Sale Agreement, duly executed by the parties thereto;
(b) A certificate of the Secretary or Assistant Secretary of
each Loan Party certifying the names and true signatures of the officers
authorized on its behalf to sign this Agreement and the other Transaction
Documents to be delivered by it hereunder (on which certificate the Agents and
the Lenders may conclusively rely until such time as each of the Co-Agents shall
receive from such Loan Party a revised certificate meeting the requirements of
this SUBSECTION (b));
(c) The Certificate of Incorporation of each Loan Party, duly
certified by the Secretary of State of such Loan Party's state of incorporation,
as of a recent date acceptable to Co-Agents in each case together with a copy of
the by-laws of such Loan Party, duly certified by the Secretary or an Assistant
Secretary of such Loan Party;
(d) Copies of good standing certificates for each Loan Party,
issued by the Secretaries of State of the state of incorporation of such Loan
Party and the state where such Loan Party's principal place of business is
located;
(e) Acknowledgment copies (or other evidence of filing
reasonably acceptable to the Collateral Agent) of (i) proper financing
statements (Form UCC-1), in such form as the Collateral Agent may reasonably
request, naming each of the Originators as debtor and seller of its Receivables
and Related Assets, the Borrower as the secured party and purchaser thereof and
the Collateral Agent, as agent for the Secured Parties, as assignee, and (ii)
financing statements (Form UCC-1), in such form as the Collateral Agent may
reasonably request, naming the Borrower as the debtor and the Collateral Agent,
as agent for the Secured Parties, as the secured party, or other, similar
instruments or documents, as may be necessary or, in the opinion of the
Collateral Agent desirable under the UCC or any comparable law of all
appropriate jurisdictions to perfect the sale by each of the Originators to the
Borrower of, and the Collateral Agent's security interest in the Collateral;
(f) Search reports provided in writing to the Co-Agents (i)
listing all effective financing statements that name any Loan Party as debtor
and that are filed in the jurisdictions in which filings were made pursuant to
SUBSECTION (e) above and in such other jurisdictions that the Collateral Agent
shall reasonably request, together with copies of such financing statements
(none of which (other than any of the financing statements described in
SUBSECTION (e) above) shall cover any Receivables or Related Assets), and (ii)
listing all tax liens and judgment liens (if
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any) filed against any debtor referred to in CLAUSE (i) above in the
jurisdictions described therein and showing no such Liens;
(g) The Subordinated Notes, duly executed by the Borrower;
(h) A favorable opinion of counsel to Loan Parties admitted to
practice in the State of New York, covering the matters set forth in of EXHIBIT
5.1(h);
(i) Favorable opinions of counsel to Loan Parties, as to:
(1) the existence of a "true sale" of the Receivables
from each of the Originators to the Borrower under the Sale
Agreement; and
(2) the inapplicability of the doctrine of
substantive consolidation to the Borrower and each of the
Originators in connection with any bankruptcy proceeding
involving any Loan Party;
(j) A PRO FORMA Information Package, prepared as of the
Cut-Off Date of May 23, 1999;
(k) A report in form and substance satisfactory to the
Co-Agents from the Initial Due Diligence Auditor as to a pre-closing due
diligence audit by the Initial Due Diligence Auditor;
(l) Each of the Liquidity Agreements, in form and substance
satisfactory to the applicable Co-Agent, duly executed by the parties thereto;
(m) UCC-3 partial releases and/or termination statements with
respect to any existing Liens on the Collateral;
(n) With respect to INTERIM SERVICES, copies of its most
recent reports on SEC Forms 10-K and 10-Q;
(o) The Fee Letter to which such Co-Agent is a party, together
with payment of any and all fees due on or prior to the date of the initial
Advance;
(p) A certificate of an Authorized Officer of each of the Loan
Parties certifying that as of the date of the initial Advance, no Event of
Default or Unmatured Event of Default exists and is continuing;
(q) Letters in the form of Exhibit 6.1(q) hereto, addressed to
the Agents and the Lenders, and duly executed by each of the Originators and the
Loan Parties; and
(r) Such other agreements, instruments, certificates, opinions
and other documents as any of the Agents may reasonably request.
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Section 5.2 CONDITIONS PRECEDENT TO ALL ADVANCES. Each Advance
(including the initial Advance) shall be subject to the further conditions
precedent that on the applicable Borrowing Date, each of the following
statements shall be true (and the Borrower, by accepting the amount of such
Advances or by receiving the proceeds of any Loan comprising such Advance, and
each other Loan Party, upon such acceptance or receipt by the Borrower, shall be
deemed to have certified that):
(a) the representations and warranties contained in SECTION
6.1 are correct in all material respects on and as of the date of such Advance
as though made on and as of such day and shall be deemed to have been made on
such day,
(b) no event has occurred and is continuing, or would result
from such Advance, that constitutes an Event of Default or Unmatured Default,
(c) after giving effect to each proposed Advance, the Advances
will not exceed the lesser of the Borrowing Base or the Aggregate Commitment,
the Loans made by Blue Ridge and its Liquidity Banks will not exceed the Blue
Ridge Allocation Limit, and the Loans made by Falcon and its Liquidity Banks
will not exceed the Falcon Allocation Limit,
(d) the Termination Date shall not have occurred, and
(e) the Co-Agents shall have timely received an appropriate
Borrowing Request in accordance with SECTION 2.1;
PROVIDED, HOWEVER, the absence of the occurrence and continuance of an Unmatured
Default shall not be a condition precedent to any Advance which does not
increase the aggregate principal amount of all Advances outstanding over the
aggregate outstanding principal balance of the Advances as of the opening of
business on such day.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Section 6.1 REPRESENTATIONS AND WARRANTIES OF LOAN PARTIES.
Each Loan Party represents and warrants, as to itself, as follows:
(a) DUE INCORPORATION AND GOOD STANDING; OWNERSHIP OF THE
BORROWER. Each Loan Party is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
formation. INTERIM SERVICES owns, directly or indirectly, all the issued and
outstanding capital stock of the Borrower, and all of such capital stock is
fully paid and non-assessable and free and clear of any Liens.
(b) DUE QUALIFICATION. Each Loan Party is duly qualified to do
business as a foreign corporation in good standing in all jurisdictions not
covered by SECTION 6.1(a) in which the ownership or lease of property or the
conduct of its business requires such qualification, except where the failure to
be so qualified or have such licenses or approvals would not have a Material
Adverse Effect.
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(c) POWER AND AUTHORITY; DUE AUTHORIZATION. Each Loan Party
(i) has all necessary power, authority and legal right, and has obtained all
necessary licenses and approvals, (A) to execute and deliver this Agreement and
the other Transaction Documents to which it is a party, (B) to carry out the
terms of the Transaction Documents to which it is a party, (C) in the case of
the Servicer (or any Affiliate thereof that is acting as a sub-servicer), to
service the Receivables and the Related Assets in accordance with this Agreement
and the Sale Agreement, and (D) in the case of the Borrower, to grant the
security interest in the Collateral and borrow the Loans on the terms and
conditions herein provided, and (ii) has duly authorized by all necessary
corporate action the execution, delivery and performance of this Agreement and
the other Transaction Documents to which it is a party and, in the case of the
Borrower, the security interest described in CLAUSE (i)(D) above.
(d) TITLE TO RECEIVABLES; VALID SECURITY INTEREST. Each
Receivable has been acquired by the Borrower from the applicable Originator in
accordance with the terms of the Sale Agreement, and the Borrower has thereby
irrevocably obtained all legal and equitable title to, and has the legal right
to sell and encumber, such Receivable and the Related Assets. Each such
Receivable has been transferred to the Borrower free and clear of any Lien
except as created hereby. Without limiting the foregoing, there have been duly
filed all financing statements or other similar instruments or documents
necessary under the UCC of all appropriate jurisdictions to perfect the
Borrower's ownership interest in such Receivable. This Agreement creates a valid
security interest in the Collateral in favor of the Collateral Agent, for the
benefit of the Secured Parties, enforceable against creditors of and purchasers
from the Borrower.
(e) NONCONTRAVENTION. The execution, delivery and performance
by such Loan Party of this Agreement and each other Transaction Document to
which it is party do not and will not: (i) contravene the terms of any of its
articles or certificate of incorporation or by-laws; (ii) conflict with or
result in a material breach or contravention of, or the creation of any Lien
under, any document evidencing any material Contractual Obligation to which such
Person is a party or any order, injunction, writ or decree of any Governmental
Authority to which such Person or its property is subject; or (iii) violate any
Requirement of Law.
(f) NO PROCEEDINGS. There are no actions, suits, labor
controversies, proceedings, claims or disputes pending, or to the best knowledge
of such Loan Party, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against such Loan Party, or
its Subsidiaries or any of their respective properties which: (i) purport to
affect or pertain to this Agreement or any other Transaction Document, or any of
the transactions contemplated hereby or thereby; or (ii) if determined adversely
to such Loan Party or its Subsidiaries, would reasonably be expected to have a
Material Adverse Effect. No injunction, writ, temporary restraining order or
order of any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or performance of this
Agreement or any other Transaction Document, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.
The Loan Parties are generally subject to suit and none of them nor any of their
properties or revenues enjoys any right of immunity from judicial proceedings.
(g) ENFORCEABILITY. This Agreement and each other Transaction
Document signed by such Loan Party constitutes, a legal, valid and binding
obligation of such Loan Party,
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enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles relating
to enforceability).
(h) GOVERNMENT APPROVALS. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, such Loan Party
of this Agreement or any other Transaction Document, EXCEPT, in the case of the
Borrower, for (i) the filing of the UCC financing statements referred to in
ARTICLE V, and (ii) the filing of any UCC continuation statements and amendments
from time to time required in relation to any UCC financing statements filed in
connection with this Agreement, as provided in SECTION 8.5, all of which, at the
time required in ARTICLE V or SECTION 8.5, as applicable, shall have been duly
made and shall be in full force and effect.
(i) FINANCIAL STATEMENTS AND ABSENCE OF CERTAIN MATERIAL
ADVERSE CHANGES.
(x) Each of the financial statements of INTERIM
SERVICES and its consolidated Subsidiaries previously or
hereafter furnished to any of the Agents, fairly presents in
all material respects the consolidated financial condition of
INTERIM SERVICES and its consolidated Subsidiaries, taken as a
whole, as at the dates thereof and the results of their
consolidated operations for the periods covered thereby and
each of such financial statements has been prepared in
accordance with GAAP consistently applied (subject, in the
case of interim financial statements, to customary year-end
audit adjustments).
(y) From December 25, 1998 through and including the
date of the initial Advance, there has been no material
adverse change in INTERIM SERVICES' consolidated financial
condition, business or operations. Since the date of the
initial Advance, there has been no material adverse change in
INTERIM SERVICES' consolidated financial condition, business
or operations that has had, or would reasonably be expected to
have, a material adverse effect upon its ability to perform
its obligations, as an Originator or as Servicer, under the
Transaction Documents when and as required, and no material
adverse effect on the collectibility of any material portion
of the Receivables.
(z) Since the date of the initial Advance, no event
has occurred which would have a Material Adverse Effect.
(j) NATURE OF RECEIVABLES. Each Receivable constitutes an
"Account" or a "General Intangible."
(k) MARGIN REGULATIONS. The use of all funds obtained by such
Loan Party under this Agreement or any other Transaction Document will not
conflict with or contravene
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any of Regulations T, U and X promulgated by the Board of Governors of the
Federal Reserve System from time to time.
(l) QUALITY OF TITLE. (i) Each Receivable, together with the
Related Assets, is owned by the Borrower free and clear of any Lien (other than
any Lien arising solely as the result of any action taken by the Collateral
Agent or one of the Secured Parties); (ii) the Collateral Agent, on behalf of
the Secured Parties, has a valid and perfected first priority security interest
in the Collateral; and (iii) no financing statement or other instrument similar
in effect covering any portion of the Collateral is on file in any recording
office except such as may be filed (A) in favor of an Originator in accordance
with the Contracts and/or Invoices, (B) in favor of the Borrower and its assigns
in connection with the Sale Agreement, or (C) in favor of the Collateral Agent
in accordance with this Agreement or in connection with any Lien arising solely
as the result of any action taken by the Collateral Agent or one of the Secured
Parties.
(m) ACCURATE REPORTS. No Information Package (if prepared by
such Loan Party, or to the extent information therein was supplied by such Loan
Party), no other information furnished verbally or in writing prior to the date
of this Agreement, and no other information, exhibit, financial statement,
document, book, record or report furnished or to be furnished in writing after
the date of this Agreement, by or on behalf of such Loan Party to any of the
Agents or Lenders pursuant to this Agreement was or will be inaccurate in any
material respect as of the date it was or will be dated or (except as otherwise
disclosed to the Agents or the Lenders at such time) as of the date so
furnished, or contained or (in the case of information or other materials to be
furnished in the future) will contain any material misstatement of fact or
omitted or (in the case of information or other materials to be furnished in the
future) will omit to state a material fact or any fact necessary to make the
statements contained therein not materially misleading in light of the
circumstances made or presented.
(n) OFFICES. The principal places of business and chief
executive offices of the Servicer and the Borrower are located at the respective
addresses set forth on SCHEDULE 14.2, and the offices where the Servicer and the
Borrower keep all their books, records and documents evidencing Receivables, the
related Contracts and/or Invoices and all purchase orders and other agreements
related to such Receivables are located at the addresses specified in SCHEDULE
6.1(n) (or at such other locations, notified to the Collateral Agent in
accordance with SECTION 7.1(f), in jurisdictions where all action required by
SECTION 8.5 has been taken and completed).
(o) LOCK-BOX ACCOUNTS. The names and addresses of all the
Lock-Box Banks, together with the account numbers of the accounts of the
Borrower at such Lock-Box Banks, are specified in SCHEDULE 6.1(o) (or have been
notified to and approved by the Agents in accordance with SECTION 7.3(d)). Each
of the Lock-Box Accounts is subject to a Lock-Box Agreement that is in full
force and effect.
(p) ELIGIBLE RECEIVABLES. Each Receivable included as an
Eligible Receivable in the Net Pool Balance in connection with any computation
or recomputation of the Borrowing Base is an Eligible Receivable on such date.
(q) YEAR 2000 READINESS. In addition to the matters referenced
in the letters attached as Exhibit 6.1(q) hereto, each Loan Party reasonably
believes that all computer
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applications that are material to its business and operations will on a timely
basis be able to perform properly date-sensitive functions for all dates before,
on and after January 1, 2000 (that is, be "YEAR 2000 COMPLIANT"), except to the
extent that a failure to do so could not reasonably be expected to have a
Material Adverse Effect.
(r) NAMES. In the past five years, the Borrower has not used
any corporate names, trade names or assumed names other than the name in which
it has executed this Agreement.
(s) CREDIT AND COLLECTION POLICY. With respect to each
Receivable, each of the applicable Originator, the Borrower and the Servicer has
complied in all material respects with the applicable Credit and Collection
Policy, and no change has been made to such Credit and Collection Policy since
the date of this Agreement which would be reasonably likely to materially and
adversely affect the collectibility of the Receivables or decrease the credit
quality of any newly created Receivables except for such changes as to which
each of the Agents have received the notice required under SECTION 7.2(j) and
has given its prior written consent thereto (which consent shall not be
unreasonably withheld or delayed).
(t) PAYMENTS TO ORIGINATOR. With respect to each Receivable
sold to the Borrower by any Originator, the Borrower has given reasonably
equivalent value to such Originator in consideration for such Receivable and the
Related Assets with respect thereto under the Sale Agreement and such transfer
was not made for or on account of an antecedent debt. No transfer by any
Originator of any Receivable is or may be voidable under any Section of the
Bankruptcy Reform Act of 1978 (11 U.S.C. ss.ss.101 ET seq.), as amended.
(u) NOT AN INVESTMENT COMPANY. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended from time to time, or any successor statute.
(v) BORROWING BASE. As of each Borrowing Date, after giving
effect to the Loans to be made on such date, the Borrowing Base is at least
equal to the aggregate outstanding principal balance of the Advances.
ARTICLE VII.
GENERAL COVENANTS OF LOAN PARTIES
Section 7.1 AFFIRMATIVE COVENANTS OF LOAN PARTIES. From the
date hereof until the Final Payout Date, unless each of the Co-Agents shall
otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Each Loan Party will comply in
all material respects with all applicable laws, rules, regulations and orders,
including those with respect to the Receivables and related Contracts and/or
Invoices, except where the failure to so comply would not individually or in the
aggregate have a Material Adverse Effect.
(b) PRESERVATION OF CORPORATE EXISTENCE. Each Loan Party will
preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation in each
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jurisdiction where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualification would have a Material Adverse Effect.
(c) AUDITS. Each Loan Party will (i) at any time and from time
to time upon not less than ten (10) Business Days' notice (unless an Event of
Default has occurred and is continuing, in which case no such notice shall be
required) during regular business hours, permit the Co-Agents or any of their
agents or representatives: (A) to examine and make copies of and abstracts from
all books, records and documents (including, without limitation, computer tapes
and disks) in the possession or under the control of such Loan Party relating to
Receivables, including, without limitation, the related Contracts and/or
Invoices and purchase orders and other agreements, and (B) to visit the offices
and properties of such Loan Party for the purpose of examining such materials
described in CLAUSE (i)(A) next above, and to discuss matters relating to
Receivables or such Loan Party's performance hereunder with any of the officers
or employees of such Loan Party having knowledge of such matters; and (ii)
without limiting the provisions of CLAUSE (i) above, from time to time, at the
expense of such Loan Party, permit INTERIM SERVICES' outside auditors (except as
hereinafter provided) or other certified public accountants or auditors
acceptable to the Co-Agents to conduct a review of such Loan Party's books and
records with respect to the Receivables and Related Assets (each, a "REVIEW");
PROVIDED, HOWEVER, that, so long as no Event of Default has occurred and is
continuing, the Loan Parties shall only be responsible for the costs and
expenses of one such Review under this Section or under SECTION 7.2(i) in any
one calendar year except as provided in the next sentence. Notwithstanding the
foregoing, if (1) any Loan Party requests the approval of a new Eligible
Originator who is a Material Proposed Addition or (2) any Material Acquisition
is consummated, the Loan Parties shall be responsible for the costs and expenses
of one additional Review per proposed Material Proposed Addition or per Material
Acquisition in the Contract Year in which such Material Proposed Addition is
expected to occur or such Material Acquisition is expected to be consummated if
such additional Review is requested by the Co-Agents. In the event that INTERIM
SERVICES' outside auditors fail to perform any Review to the reasonable
satisfaction of the Co-Agents, thereafter, the Co-Agents shall have the
exclusive right to select the accountants or auditors who perform Reviews.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Servicer will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Receivables in the
event of the destruction of the originals thereof), and keep and maintain, all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of outstanding Unpaid
Balances by Obligor and related debit and credit details of the Receivables).
Each of the Borrower and the Servicer shall post all Demand Advances to its
respective books and records in accordance with GAAP on or before each
Settlement Date.
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS
AND/OR INVOICES. Each Loan Party will, at its expense, timely and fully perform
and comply with all material provisions, covenants and other promises, if any,
required to be observed by it under the Contracts and/or Invoices related to the
Receivables and all agreements related to such Receivables.
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(f) LOCATION OF RECORDS. Each Loan Party will keep its chief
place of business and chief executive office, and the offices where it keeps its
records concerning the Receivables, all related Contracts and/or Invoices and
all agreements related to such Receivables (and all original documents relating
thereto), at the address(es) of the Servicer and the Borrower referred to in
SECTION 6.1(n) or, upon 15 days' prior written notice to the Collateral Agent,
at such other locations in jurisdictions where all action required by SECTION
8.5 shall have been taken and completed.
(g) CREDIT AND COLLECTION POLICIES. Each Loan Party will
comply in all material respects with the Credit and Collection Policy in regard
to each Receivable and the related Contracts and/or Invoices.
(h) SALE AGREEMENT. The Borrower will perform and comply in
all material respects with all of its covenants and agreements set forth in the
Sale Agreement, and will enforce the performance by each of the Originators of
its obligations under the Sale Agreement.
(i) COLLECTIONS. All Obligors shall be instructed to make
payments on Receivables directly to a Lock-Box Account which is the subject of a
Lock-Box Agreement. If, notwithstanding the foregoing, any Collections are paid
directly to any Loan Party, such Loan Party shall deposit the same (with any
necessary indorsements) to such a Lock-Box Account within two (2) Business Days
after receipt thereof. Upon demand of the Collateral Agent, the Borrower or the
Servicer shall establish a segregated account at Wachovia Bank, N.A. which is
subject to a perfected security interest in favor of the Collateral Agent, for
the benefit of the Secured Parties (the "COLLECTION ACCOUNT"), into which all
deposits from time to time in Lock-Box Accounts, and all other Collections, are
concentrated pending application in accordance with the terms of this Agreement
to the Obligations.
(j) FURTHER ASSURANCES. Each of the Loan Parties shall take
all necessary action to establish and maintain (i) in favor of the Borrower, a
valid and perfected ownership interest in the Receivables and Related Assets,
and (ii) in favor of the Collateral Agent for the benefit of the Secured
Parties, a valid and perfected first priority security interest in the
Receivables and the Related Assets, including, without limitation, taking such
action to perfect, protect or more fully evidence the interest of the Collateral
Agent as the Collateral Agent may reasonably request.
Section 7.2 REPORTING REQUIREMENTS OF LOAN PARTIES. From the
date hereof until the Final Payout Date, unless each of the Co-Agents shall
otherwise consent in writing:
(a) QUARTERLY FINANCIAL STATEMENTS. INTERIM SERVICES will
furnish to the Co-Agents as soon as available and in any event within 60 days
after the end of each of the first three quarters of each of its fiscal years,
copies of its report on SEC Form 10-Q as of the close of such fiscal quarter;
(b) ANNUAL FINANCIAL STATEMENTS. INTERIM SERVICES will furnish
to the Co-Agents, as soon as available and in any event within 120 days after
the end of each fiscal year of INTERIM SERVICES, copies of its annual report on
SEC Form 10-K for such year;
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(c) REPORTS TO SEC AND EXCHANGES. In addition to the reports
required by SUBSECTIONS (a) and (b) next above, promptly upon filing any report
on SEC Form 8-K with the SEC, INTERIM SERVICES shall deliver copies thereof to
the Co-Agents;
(d) ERISA. Promptly after the filing or receiving thereof,
each Loan Party will furnish to the Co-Agents copies of all reports and notices
with respect to any Reportable Event defined in Article IV of ERISA which any
Loan Party files under ERISA with the Internal Revenue Service, the Pension
Benefit Guaranty Corporation or the U.S. Department of Labor or which such Loan
Party receives from the Pension Benefit Guaranty Corporation;
(e) EVENTS OF DEFAULT, ETC. As soon as possible and in any
event within five (5) Business Days after any Responsible Officer of either Loan
Party obtains knowledge of the occurrence of any Event of Default or any
Unmatured Default, each Loan Party will furnish to the Co-Agents a written
statement of a Responsible Officer of such Loan Party setting forth details of
such event and the action that such Loan Party will take with respect thereto;
(f) LITIGATION. As soon as possible and in any event within
ten Business Days after any Responsible Officer of either Loan Party obtains
knowledge thereof, such Loan Party will furnish to the Co-Agents notice of (i)
any litigation, investigation or proceeding which may exist at any time which
would reasonably be expected to have a Material Adverse Effect and (ii) any
development in previously disclosed litigation which development would
reasonably be expected to have a Material Adverse Effect;
(g) REVIEWS OF RECEIVABLES. As soon as available and in any
event within 90 days following the end of each fiscal year of the Borrower, the
Borrower will furnish to the Co-Agents a report of the Review referenced in
SECTION 7.1(c) prepared by accountants or auditors selected as specified therein
and reasonably acceptable to the Agents as of the end of such fiscal year,
substantially in the form of the report delivered pursuant to SECTION 5.1(k) and
covering such other matters as any of the Agents may reasonably request in order
to protect the interests of the Collateral Agent or the Secured Parties under or
as contemplated by this Agreement. Unless the performance of the Receivables
indicates that broader testing is appropriate, such reviews will be limited to
the matters summarized in SCHEDULE 2 hereto;
(h) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Each
Loan Party will furnish to the Co-Agents prompt written notice of any material
change in the character of such Loan Party's business prior to the occurrence of
such change, and each Loan Party will provide the Agents with not less than 15
Business Days' prior written notice of any material change in the Credit and
Collection Policy (together with a copy of such proposed change);
(i) ACCOUNTING PERIODS. Not later than December 1 of each
year, the Loan Parties will deliver to the Co-Agents a listing of their
accounting periods for the upcoming calendar year, and Schedule 1 hereto will be
deemed amended to add such dates to SCHEDULE 1 hereto;
(j) OTHER. Promptly, from time to time, each Loan Party will
furnish to the Co-Agents such other information, documents, records or reports
respecting the Receivables or the condition or operations, financial or
otherwise, of such Loan Party as any of the Agents may
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from time to time reasonably request in order to protect the interests of the
Collateral Agent or the Secured Parties under or as contemplated by this
Agreement.
Section 7.3 NEGATIVE COVENANTS OF LOAN PARTIES. From the date
hereof until the Final Payout Date, without the prior written consent of each of
the Co-Agents:
(a) SALES, LIENS, ETC. (i) The Borrower will not, except as
otherwise provided herein and in the other Transaction Documents, sell, assign
(by operation of law or otherwise) or otherwise dispose of, or create or suffer
to exist any Lien upon or with respect to, any Collateral, or any account to
which any Collections are sent, or any right to receive income or proceeds from
or in respect of any of the foregoing (except, prior to the execution of
Lock-Box Agreements, set-off rights of any bank at which any such account is
maintained), and (ii) the Servicer will not assert any interest in the
Receivables, except as the Servicer.
(b) EXTENSION OR AMENDMENT OF RECEIVABLES. No Loan Party will,
except as otherwise permitted in SECTION 8.2(c), extend, amend or otherwise
modify the terms of any Receivable, or amend, modify or waive any material term
or condition of any Contract and/or Invoice related thereto in any way that
adversely affects the collectibility of any Receivable or the Lender's rights
therein.
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. No
Loan Party will make or permit to be made any change in the character of its
business or in the Credit and Collection Policy, which change would, in either
case, impair the collectibility of any significant portion of the Receivables or
otherwise materially and adversely affect the interests or remedies of Lender
under this Agreement or any other Transaction Document.
(d) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. No Loan Party
will add or terminate any bank as a Lock-Box Bank from those listed in SCHEDULE
6.1(o) or, after the Collection Account has been established pursuant to SECTION
7.1(i), make any change in its instructions to Obligors regarding payments to be
made to the Borrower or the Servicer or payments to be made to any Lock-Box Bank
(except for a change in instructions solely for the purpose of directing
Obligors to make such payments to another existing Lock-Box Bank), unless (i)
the Collateral Agent shall have received prior written notice of such addition,
termination or change and (ii) the Collateral Agent shall have received duly
executed copies of Lock-Box Agreements in a form reasonably acceptable to the
Agents with each new Lock-Box Bank.
(e) DEPOSITS TO LOCK-BOX ACCOUNTS AND COLLECTION ACCOUNT. No
Loan Party will deposit or otherwise credit, or cause or permit to be so
deposited or credited, to any Lock-Box Account or the Collection Account, any
cash or cash proceeds in excess of $5,000,000 per year other than Collections of
Receivables.
(f) CHANGES TO OTHER DOCUMENTS. The Borrower will not enter
into any amendment or modification of, or supplement to, the Sale Agreement, the
Subordinated Notes or the Borrower's Certificate of Incorporation, except that
the Borrower may enter into Joinder Agreements to add Eligible Originators as
sellers under the Sale Agreement.
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(g) RESTRICTED PAYMENTS BY THE BORROWER. The Borrower will
not:
(i) Purchase or redeem any shares of the capital
stock of the Borrower, declare or pay any dividends thereon
(other than stock dividends), make any distribution to
stockholders or set aside any funds for any such purpose,
unless, in each of the foregoing cases: (A) such purchase,
redemption, payment or distribution is made on, or immediately
following, a Settlement Date after payment of all Obligations
due and owing on such Settlement Date, and (B) after giving
effect to such purchase, redemption, payment or distribution,
the Borrower's net worth (determined in accordance with GAAP)
will be at least $4,500,000 at all times prior to the addition
of Norrell Corporation and/or its Subsidiaries (or any
successor thereto) as an Eligible Originator, and $5,000,000
at all times thereafter; or
(ii) Make any payment of principal or interest on the
Subordinated Notes if any Event of Default exists or would
result therefrom or if such payment would result in the
Borrower's having insufficient cash on hand to pay all
Obligations that will be due and owing on the next succeeding
Settlement Date.
(h) BORROWER INDEBTEDNESS. The Borrower will not incur or
permit to exist any Indebtedness or liability on account of deposits except: (A)
Subordinated Loans incurred in accordance with the Sale Agreement and evidenced
by a Subordinated Note, (B) current payables and expense reimbursement
obligations arising under the Transaction Documents and not overdue and (C)
other current accounts payable arising in the ordinary course of business and
not overdue, in an aggregate amount at any time outstanding not to exceed
$10,700.
(i) PROHIBITION ON ADDITIONAL NEGATIVE PLEDGES. No Loan Party
will enter into or assume any agreement (other than this Agreement and the other
Transaction Documents) prohibiting the creation or assumption of any Lien upon
the any Receivables or Related Assets, whether now owned or hereafter acquired,
except as contemplated by the Transaction Documents, or otherwise prohibiting or
restricting any transaction contemplated hereby or by the other Transaction
Documents, and no Loan Party will enter into or assume any agreement creating
any Lien upon the Subordinated Notes.
(j) NAME CHANGE, OFFICES, RECORDS AND BOOKS OF ACCOUNTS. The
Borrower will not change its name, identity or corporate structure (within the
meaning of Section 9-402(7) of any applicable enactment of the UCC) or relocate
its chief executive office or any office where Records are kept unless it shall
have: (i) given the Collateral Agent at least 15 days' prior notice thereof and
(ii) prior to effectiveness of such change, delivered to the Collateral Agent
all financing statements, instruments and other documents requested by the
Collateral Agent in connection with such change or relocation.
(k) MERGERS, CONSOLIDATIONS AND ACQUISITIONS. The Borrower
will not merge into or consolidate with any other Person, or permit any other
Person to merge into or consolidate
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with it, or purchase, lease or otherwise acquire (in one transaction or a series
of transactions) all or substantially all of the assets of any other Person
(whether directly by purchase, lease or other acquisition of all or
substantially all of the assets of such Person or indirectly by purchase or
other acquisition of all or substantially all of the capital stock of such other
Person) other than the acquisition of the Receivables and Related Assets
pursuant to the Sale Agreement.
(l) DISPOSITION OF RECEIVABLES AND RELATED ASSETS. Except
pursuant to this Agreement, the Borrower will not sell, lease, transfer, assign
or otherwise dispose of (in one transaction or in a series of transactions) any
Receivables and Related Assets.
(m) BORROWING BASE. The Borrower will not request any Advance
if, after giving effect thereto, the aggregate outstanding principal balance of
the Loans would exceed the Borrowing Base.
Section 7.4 SEPARATE CORPORATE EXISTENCE OF THE BORROWER. Each
Loan Party hereby acknowledges that Lenders and the Agents are entering into the
transactions contemplated hereby in reliance upon the Borrower's identity as a
legal entity separate from the Servicer and its other Affiliates. Therefore,
each Loan Party shall take all steps specifically required by this Agreement or
reasonably required by any of the Agents to continue the Borrower's identity as
a separate legal entity and to make it apparent to third Persons that the
Borrower is an entity with assets and liabilities distinct from those of its
Affiliates, and is not a division of INTERIM SERVICES or any other Person.
Without limiting the foregoing, each Loan Party will take such actions as shall
be required in order that:
(a) The Borrower will be a limited purpose corporation whose
primary activities are restricted in its Certificate of Incorporation to
purchasing or otherwise acquiring from any of the Originators, owning, holding,
granting security interests in the Collateral, entering into agreements for the
financing and servicing of the Receivables, and conducting such other activities
as it deems necessary or appropriate to carry out its primary activities;
(b) Not less than one member of the Borrower's Board of
Directors (the "INDEPENDENT DIRECTOR") shall be an individual who is not, and
never has been, a direct, indirect or beneficial stockholder, officer, director,
employee, affiliate, associate, material supplier or material customer of
INTERIM SERVICES or any of its Affiliates (other than an Affiliate organized
with a limited purpose charter for the purpose of acquiring receivables or other
financial assets or intangible property). The certificate of incorporation of
the Borrower shall provide that (a) at least one member of the Borrower's Board
of Directors shall be an Independent Director, (b) the Borrower's Board of
Directors shall not approve, or take any other action to cause the filing of, a
voluntary bankruptcy petition with respect to the Borrower unless the
Independent Director shall approve the taking of such action in writing prior to
the taking of such action and (c) the provisions requiring an independent
director and the provision described in clauses (a) and (b) of this paragraph
(ii) cannot be amended without the prior written consent of the Independent
Director;
(c) The Independent Director shall not at any time serve as a
trustee in bankruptcy for the Borrower or any Affiliate thereof;
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(d) Any director, employee, consultant or agent of the
Borrower will be compensated from the Borrower's funds for services provided to
the Borrower. The Borrower will not engage any agents other than its attorneys,
auditors and other professionals and a servicer and any other agent contemplated
by the Transaction Documents for the Collateral, which servicer will be fully
compensated for its services by payment of the Servicer's Fee, and certain
organizational expenses in connection with the formation of the Borrower;
(e) The Borrower will contract with the Servicer to perform
for the Borrower all operations required on a daily basis to service the
Collateral. The Borrower will pay the Servicer the Servicer's Fee pursuant
hereto. The Borrower will not incur any material indirect or overhead expenses
for items shared with INTERIM SERVICES (or any other Affiliate thereof) which
are not reflected in the Servicer's Fee. To the extent, if any, that the
Borrower (or any other Affiliate thereof) shares items of expenses not reflected
in the Servicer's Fee, for legal, auditing and other professional services and
directors' fees, such expenses will be allocated to the extent practical on the
basis of actual use or the value of services rendered, and otherwise on a basis
reasonably related to the actual use or the value of services rendered, it being
understood that INTERIM SERVICES shall pay all expenses relating to the
preparation, negotiation, execution and delivery of the Transaction Documents,
including, without limitation, legal, rating agency and other fees;
(f) The Borrower's operating expenses will not be paid by any
other Loan Party or other Affiliate of the Borrower;
(g) The Borrower will have its own stationery;
(h) The books of account, financial reports and corporate
records of the Borrower will be maintained separately from those of INTERIM
SERVICES and each other Affiliate of the Borrower;
(i) Any financial statements of any Loan Party or Affiliate
thereof which are consolidated to include the Borrower will contain detailed
notes clearly stating that (A) all of the Borrower's assets are owned by the
Borrower, and (B) the Borrower is a separate corporate entity with its own
separate creditors that will be entitled to be satisfied out of the Borrower's
assets prior to any value in the Borrower becoming available to the Borrower's
equity holders; and the accounting records and the published financial
statements of each of the Originators will clearly show that, for accounting
purposes, the Receivables and Related Assets have been sold by such Originator
to the Borrower;
(j) The Borrower's assets will be maintained in a manner that
facilitates their identification and segregation from those of the Servicer and
the other Affiliates;
(k) Each Affiliate of the Borrower will strictly observe
corporate formalities in its dealings with the Borrower, and, except as
permitted pursuant to this Agreement with respect to Collections, funds or other
assets of the Borrower will not be commingled with those of any of its
Affiliates;
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(l) No Affiliate of the Borrower will maintain joint bank
accounts with the Borrower or other depository accounts with the Borrower to
which any such Affiliate (other than in the Borrower's or such Affiliate's
existing or future capacity as the Servicer hereunder or under the Sale
Agreement) has independent access, PROVIDED that prior to demand by the
Collateral Agent pursuant to SECTION 7.1(i) to establish a segregated Collection
Account, Collections may be deposited into general accounts of INTERIM SERVICES,
subject to the obligations of the Servicer hereunder;
(m) No Affiliate of the Borrower shall, directly or
indirectly, name the Borrower or enter into any agreement to name the Borrower
as a direct or contingent beneficiary or loss payee on any insurance policy
covering the property of any Affiliate of the Borrower;
(n) Each Affiliate of the Borrower will maintain arm's length
relationships with the Borrower, and each Affiliate of the Borrower that renders
or otherwise furnishes services or merchandise to the Borrower will be
compensated by the Borrower at market rates for such services or merchandise;
(o) No Affiliate of the Borrower will be, nor will it hold
itself out to be, responsible for the debts of the Borrower or the decisions or
actions in respect of the daily business and affairs of the Borrower. INTERIM
SERVICES and the Borrower will immediately correct any known misrepresentation
with respect to the foregoing and they will not operate or purport to operate as
an integrated single economic unit with respect to each other or in their
dealing with any other entity;
(p) The Borrower will keep correct and complete books and
records of account and minutes of the meetings and other proceedings of its
stockholder and board of directors, as applicable, and the resolutions,
agreements and other instruments of the Borrower will be continuously maintained
as official records by the Borrower; and
(q) Each of the Borrower, on the one hand, and the
Originators, on the other hand, will conduct its business solely in its own
corporate name and in such a separate manner so as not to mislead others with
whom they are dealing.
ARTICLE VIII.
ADMINISTRATION AND COLLECTION
Section 8.1 DESIGNATION OF SERVICER.
(a) INTERIM SERVICES AS INITIAL SERVICER. The servicing,
administering and collection of the Receivables shall be conducted by the Person
designated as Servicer hereunder from time to time in accordance with this
SECTION 8.1. Until the Collateral Agent gives to INTERIM SERVICES a Successor
Notice (as defined in SECTION 8.1(b)), INTERIM SERVICES is hereby designated as,
and hereby agrees to perform the duties and obligations of, Servicer pursuant to
the terms hereof.
(b) SUCCESSOR NOTICE; SERVICER TRANSFER EVENTS. Upon INTERIM
SERVICES' receipt of a notice from both Co-Agents following a Servicer Transfer
Event of the designation of a new Servicer (a "SUCCESSOR NOTICE"), INTERIM
SERVICES agrees that it will terminate its
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activities as Servicer hereunder in a manner that will facilitate the transition
of the performance of such activities to the new Servicer, and the Collateral
Agent (or the designee of the Co-Agents) shall assume each and all of INTERIM
SERVICES' obligations to service and administer such Receivables, on the terms
and subject to the conditions herein set forth, and INTERIM SERVICES shall use
its reasonable best efforts to assist the Collateral Agent (or the Co-Agents'
designee) in assuming such obligations. Without limiting the foregoing, INTERIM
SERVICES agrees, at its expense, to take all actions necessary to provide the
new Servicer with access to all computer software necessary to generate reports
useful in collecting or billing Receivables, solely for use in collecting and
billing Receivables. If INTERIM SERVICES disputes the occurrence of a Servicer
Transfer Event, INTERIM SERVICES may take appropriate action to resolve such
dispute; provided that INTERIM SERVICES must terminate its activities hereunder
as Servicer and allow the newly designated Servicer to perform such activities
on the date specified by the Co-Agents as described above, notwithstanding the
commencement or continuation of any proceeding to resolve the aforementioned
dispute, if the Co-Agents reasonably determine, in good faith, that such
termination is necessary or advisable to protect the Secured Parties' interests
hereunder.
(c) SUBCONTRACTS. So long as INTERIM SERVICES is acting as the
Servicer, it may subcontract with any other Originator for servicing,
administering or collecting all or any portion of the Receivables, PROVIDED,
HOWEVER, that no such subcontract shall relieve INTERIM SERVICES of its primary
liability for performance of its duties as Servicer pursuant to the terms hereof
and any such subservicing arrangement may be terminated at the request of any of
the Agents at any time after a Successor Notice has been given. In addition to
the foregoing, with the prior written consent of the Agents (which consent shall
not be unreasonably withheld or delayed), any Servicer may subcontract with
other Persons for servicing, administering or collecting all or any portion of
the Receivables, PROVIDED, HOWEVER, that no such subcontract shall relieve such
Servicer of its primary liability for performance of its duties as Servicer
pursuant to the terms hereof and any such subservicing arrangement may be
terminated at the request of any of the Agents at any time that such Agent
reasonably determines that such subservicer is not performing adequately.
(d) EXPENSE INDEMNITY AFTER A SERVICER TRANSFER EVENT. In
addition to, and not in lieu of the Servicer's Fee, if INTERIM SERVICES or one
of its Affiliates is replaced as Servicer following a Servicer Transfer Event,
the Borrower shall reimburse the Servicer within 10 Business Days after receipt
of a written invoice, any and all reasonable costs and expenses of the Servicer
incurred in connection with its servicing of the Receivables for the benefit of
the Secured Parties.
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Section 8.2 DUTIES OF SERVICER.
(a) APPOINTMENT; DUTIES IN GENERAL. Each of the Borrower, the
Lenders and the Agents hereby appoints as its agent, the Servicer, as from time
to time designated pursuant to SECTION 8.1, to enforce its rights and interests
in and under the Receivables, the Related Security and the related Contracts
and/or Invoices. The Servicer shall take or cause to be taken all such actions
as may be necessary or advisable to collect each Receivable from time to time,
all in accordance with applicable laws, rules and regulations, with reasonable
care and diligence, and in accordance with the Credit and Collection Policy.
(b) SEGREGATION OF COLLECTIONS. The Servicer shall not be
required (unless otherwise requested by the Collateral Agent) to segregate the
funds constituting such portions of such Collections prior to the remittance
thereof in accordance with Article III. If instructed by the Collateral Agent,
the Servicer shall segregate and deposit into the Collection Account Collections
not later than the second Business Day following receipt by the Servicer of such
Collections in immediately available funds.
(c) MODIFICATION OF RECEIVABLES. INTERIM SERVICES, while it is
the Servicer, may, in accordance with the Credit and Collection Policy, so long
as no Event of Default and no Unmatured Default shall have occurred and be
continuing, extend the maturity or adjust the Unpaid Balance of any Receivable
as INTERIM SERVICES may reasonably determine to be appropriate to maximize
Collections thereof in a manner consistent with the Credit and Collection Policy
(although no such extension or adjustment shall alter the status of such
Receivable as a Defaulted Receivable or a Delinquent Receivable or, in the case
of an adjustment, limit the rights of the Agents or the Lenders under SECTION
3.4).
(d) DOCUMENTS AND RECORDS. Each Loan Party shall deliver to
the Servicer, and the Servicer shall hold in trust for the Borrower and the
Secured Parties, all documents, instruments and records (including, without
limitation, computer tapes or disks) that evidence or relate to Receivables.
(e) CERTAIN DUTIES TO THE BORROWER. The Servicer shall, as
soon as practicable following receipt, turn over to the Borrower (i) that
portion of the Collections which are not required to be turned over to the
Co-Agents, less the Servicer's Fee, and, in the event that neither INTERIM
SERVICES nor any other Loan Party or Affiliate thereof is the Servicer, all
reasonable and appropriate out-of-pocket costs and expenses of the Servicer of
servicing, collecting and administering the Receivables to the extent not
covered by the Servicer's Fee received by it, and (ii) the Collections of any
receivable which is not a Receivable. The Servicer, if other than INTERIM
SERVICES or any other Loan Party or Affiliate thereof, shall, as soon as
practicable upon demand, deliver to the Borrower all documents, instruments and
records in its possession that evidence or relate to Receivables of the Borrower
other than Receivables, and copies of documents, instruments and records in its
possession that evidence or relate to Receivables.
(f) TERMINATION. The Servicer's authorization under this
Agreement shall terminate upon the Final Payout Date.
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(g) POWER OF ATTORNEY. The Borrower hereby grants to the
Servicer an irrevocable power of attorney, with full power of substitution,
coupled with an interest, to take in the name of the Borrower all steps which
are necessary or advisable to endorse, negotiate or otherwise realize on any
writing or other right of any kind held or transmitted by the Borrower or
transmitted or received by Lender (whether or not from the Borrower) in
connection with any Receivable.
Section 8.3 RIGHTS OF THE COLLATERAL AGENT.
(a) NOTICE TO OBLIGORS. At any time when an Event of Default
has occurred and is continuing, the Collateral Agent may notify the Obligors of
Receivables, or any of them, of its security interest, for the benefit of the
Secured Parties, in the Collateral.
(b) NOTICE TO LOCK-BOX BANKS. At any time, either of the
Co-Agents is hereby authorized to direct the Collateral Agent, and the
Collateral Agent is hereby authorized and directed to comply with such
direction, to give notice to the Lock-Box Banks, as provided in the Lock-Box
Agreements, of the transfer to the Collateral Agent of dominion and control over
the Lock-Boxes and related Lock-Box Accounts to which the Obligors of
Receivables make payments. The Borrower and the Servicer hereby transfer to the
Collateral Agent, effective when the Collateral Agent shall give notice to the
Lock-Box Banks as provided in the Lock-Box Agreements, the exclusive dominion
and control over such Lock-Boxes and Lock-Box Accounts, and shall take any
further action that the Collateral Agent may reasonably request to effect such
transfer.
(c) RIGHTS ON SERVICER TRANSFER EVENT. At any time following
the designation of a Servicer other than INTERIM SERVICES pursuant to SECTION
8.1:
(i) The Collateral Agent may direct the Obligors of
Receivables, or any of them, to pay all amounts payable under any Receivable
directly to the Collateral Agent or its designee.
(ii) Any Loan Party shall, at the Collateral Agent's request
and at such Loan Party's expense, give notice of the Collateral Agent's security
interest in the Collateral to each Obligor of Receivables and direct that
payments be made directly to the Collateral Agent or its designee.
(iii) Each Loan Party shall, at the Collateral Agent's
request: (A) assemble all of the documents, instruments and other records
(including, without limitation, computer programs, tapes and disks) which
evidence the Collateral, or which are otherwise necessary or desirable to
collect the Collateral, and make the same available to the successor Servicer at
a place selected by the Collateral Agent, and (B) segregate all cash, checks and
other instruments received by it from time to time constituting Collections in a
manner acceptable to the Collateral Agent and promptly upon receipt, remit all
such cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the successor Servicer.
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(iv) Each of the Loan Parties, the Co-Agents and the Lenders
hereby authorizes the Collateral Agent and grants to the Collateral Agent an
irrevocable power of attorney (which shall terminate on the Final Payout Date),
to take any and all steps in such Person's name and on behalf of such Person
which are necessary or desirable, in the determination of the Collateral Agent,
to collect all amounts due under any and all Receivables, including, without
limitation, endorsing any Loan Party's name on checks and other instruments
representing Collections and enforcing such Receivables and the related
Invoices.
Section 8.4 RESPONSIBILITIES OF LOAN PARTIES. Anything herein
to the contrary notwithstanding:
(a) CONTRACTS. Each Loan Party shall remain responsible for
performing all of its obligations (if any) under the Contracts related to the
Receivables and under the related agreements to the same extent as if the
security interest in the Collateral had not been granted hereunder, and the
exercise by the Collateral Agent or its designee of its rights hereunder shall
not relieve any Loan Party from such obligations.
(b) LIMITATION OF LIABILITY. The Agents and the Lenders shall
not have any obligation or liability with respect to any Receivables, Contracts
and/or Invoices related thereto or any other related agreements, nor shall any
of them be obligated to perform any of the obligations of any Loan Party or any
Originator thereunder.
Section 8.5 FURTHER ACTION EVIDENCING THE SECURITY INTEREST.
(a) FURTHER ASSURANCES. Each Loan Party agrees that from time
to time, at its expense, it will promptly execute and deliver all further
instruments and documents, and take all further action that the Collateral Agent
or its designee may reasonably request in order to perfect, protect or more
fully evidence the Collateral Agent's security interest, on behalf of the
Secured Parties, in the Collateral, or to enable the Collateral Agent or its
designee to exercise or enforce any of the Secured Parties' respective rights
hereunder or under any Transaction Document in respect thereof. Without limiting
the generality of the foregoing, each Loan Party will:
(i) upon the request of the Collateral Agent, execute
and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other
instruments or notices, as may be necessary or appropriate, in
accordance with the terms of this Agreement;
(ii) upon the request of the Collateral Agent after
the occurrence and during the continuance of an Event of
Default, mark conspicuously each Invoice evidencing each
Receivable with a legend, acceptable to the Collateral Agent,
evidencing its security interest therein pursuant to this
Agreement; and
(iii) mark its master data processing records
evidencing the Collateral with a legend, acceptable to the
Collateral Agent,
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evidencing that a security interest in the Collateral has been
granted pursuant to this Agreement.
(b) ADDITIONAL FINANCING STATEMENTS; CONTINUATION STATEMENTS;
PERFORMANCE BY COLLATERAL AGENT. Each Loan Party hereby authorizes the
Collateral Agent or its designee to file one or more financing or continuation
statements, and amendments thereto and assignments thereof, relative to all or
any of the Collateral now existing or hereafter arising in the name of any Loan
Party. If any Loan Party fails to promptly execute and deliver to the Collateral
Agent any financing statement or continuation statement or amendment thereto or
assignment thereof requested by the Collateral Agent each Loan Party hereby
authorizes the Collateral Agent to execute such statement on behalf of such Loan
Party. If any Loan Party fails to perform any of its agreements or obligations
under this Agreement, the Collateral Agent or its designee may (but shall not be
required to) itself perform, or cause performance of, such agreement or
obligation, and the reasonable expenses of the Collateral Agent or its designee
incurred in connection therewith shall be payable by Loan Parties as provided in
Section 14.5.
Section 8.6 APPLICATION OF COLLECTIONS. Any payment by an
Obligor in respect of any indebtedness owed by it to an Originator or the
Borrower shall, except as otherwise specified by such Obligor or required by the
underlying Contract and/or Invoice or law, be applied, first, as a Collection of
any Receivable or Receivables then outstanding of such Obligor in the order of
the age of such Receivables, starting with the oldest of such Receivables and,
second, to any other indebtedness of such Obligor.
ARTICLE IX.
SECURITY INTEREST
Section 9.1 GRANT OF SECURITY INTEREST. To secure the due and
punctual payment of the Obligations, whether now or hereafter existing, due or
to become due, direct or indirect, or absolute or contingent, including, without
limitation, all Indemnified Amounts, in each case pro rata according to the
respective amounts thereof, the Borrower hereby pledges to the Collateral Agent,
for the benefit of the Secured Parties, and hereby grants to the Collateral
Agent, for the benefit of the Secured Parties, a security interest in, all of
the Borrower's right, title and interest now or hereafter existing in, to and
under (a) all the Receivables and Related Assets, (b) the Sale Agreement and the
other Transaction Documents, (c) the Demand Advances, and (d) all proceeds of
any of the foregoing (collectively, the "COLLATERAL").
Section 9.2 REMEDIES. Upon the occurrence of an Event of
Default, the Collateral Agent, on behalf of the Secured Parties, shall have,
with respect to the Collateral granted pursuant to SECTION 9.1, and in addition
to all other rights and remedies available to Lenders or the Agents under this
Agreement and the other Transaction Documents or other applicable law, all the
rights and remedies of a secured party upon default under the UCC.
Section 9.3 TERMINATION AFTER FINAL PAYOUT DATE. Each of the
Secured Parties hereby authorizes the Collateral Agent, and the Collateral Agent
hereby agrees, promptly after the Final Payout Date to execute and deliver to
the Borrower such UCC-3 termination statements as may be necessary to terminate
the Collateral Agent's security interest in and Lien upon the
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Collateral, all at the Borrower's expense. Upon the Final Payout Date, all
right, title and interest of the Collateral Agent and the Secured Parties in and
to the Collateral shall terminate.
Section 9.4 LIMITATION ON RIGHTS TO COLLATERAL PROCEEDS.
Nothing in this Agreement shall entitle the Secured Parties to receive or retain
proceeds of the Collateral in excess of the aggregate amount of the Obligations
owing to such Secured Party (or to any Indemnified Party claiming through such
Secured Party).
ARTICLE X.
EVENTS OF DEFAULT
Section 10.1 EVENTS OF DEFAULT. The occurrence of any of the
following events shall constitute an "EVENT OF DEFAULT" hereunder:
(a) The Servicer or the Borrower shall fail to make (i) when
and as required to be made by it herein, payments of or deposits of any amount
of principal of any Loan, or (ii) within five days after the same becomes due,
payment of any amount of interest, fees or any other Obligations payable
hereunder or under any other Transaction Document; PROVIDED THAT any interest,
fees or other amounts which are not paid on the due date shall bear interest at
the Default Rate after such due date; or
(b) Any representation or warranty made or deemed to be made
by any Loan Party (or any of its officers) under this Agreement or any other
Transaction Document or any Information Package or other information,
recomputation of the Borrowing Base or other report delivered pursuant hereto
shall prove to have been false or incorrect in any material adverse respect when
made and, if such representation or warranty is capable of being cured, shall
not have been cured within 5 Business Days after (i) notice by any Agent or
Lender of such error to such Loan Party to the applicable Loan Party, or, if
earlier (ii) the date on which any Responsible Officer of either Loan Party
discovers or should have discovered such error; PROVIDED THAT the materiality
threshold in this SECTION 10.1(b) shall not be applicable with respect to any
representation or warranty which itself contains a materiality threshold; or
(c) (i) Any Loan Party fails to perform or observe
any term, covenant or agreement contained in any of SECTIONS 3.1(a),
7.1(i), 7.2(e), 7.2(f), 7.2(g), 7.2(h), 7.3 OR 8.2(b); or
(ii) Any Loan Party fails to perform or observe any
term, covenant or agreement contained in any of SECTIONS 7.1(c), (e) OR
(g), and such default shall continue unremedied for a period of 10
Business Days after the earlier to occur of (A) the date upon which
written notice thereof is given to such Loan Party by any of the Agents
and (B) the date either of the Loan Parties becomes aware thereof; or
(iii) Any Loan Party fails to perform or observe any
other term or covenant contained in this Agreement or any other
Transaction Document, and such default shall continue unremedied for a
period of 30 days after the earlier to occur of (A) the date upon which
written notice thereof is given to such Loan Party by any of the Agents
and (B) the date either of the Loan Parties becomes aware thereof; or
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(d) (i) The Borrower shall (A) fail to pay any
principal or interest, regardless of amount, due in respect of any
Indebtedness of which the aggregate unpaid principal amount is in
excess of $10,700, when and as the same shall become due and payable
(after expiration of any applicable grace period) or (B) fail to
observe or perform any other term, covenant, condition or agreement
(after expiration of any applicable grace period) contained in any
agreement or instrument evidencing or governing any such Indebtedness
if the effect of any failure referred to in this CLAUSE (b) is to
cause, or permit the holder or holders of such Indebtedness or a
trustee on its or their behalf (with or without the giving of notice,
the lapse of time or both) to cause, such Indebtedness to become due
prior to its stated maturity; or
(ii) INTERIM SERVICES or any of its Subsidiaries
(other than the Borrower) (A) shall fail to pay any principal or
interest, regardless of amount, due in respect of any Indebtedness of
which the aggregate unpaid principal amount is in excess of
$10,000,000, when and as the same shall become due and payable (after
expiration of any applicable grace period) or (B) shall fail to observe
or perform any other term, covenant, condition or agreement (after
expiration of any applicable grace period) contained in any agreement
or instrument evidencing or governing any Indebtedness in excess of
$10,000,000 in aggregate principal amount of INTERIM SERVICES or any of
its Subsidiaries (other than the Borrower) if, as a result of such
failure, the holder or holders of the Indebtedness outstanding
thereunder (or an agent or a trustee on their behalf) cause the holder
or holders of such Indebtedness or a trustee on its or their behalf to
cause such Indebtedness to become due prior to its stated maturity; or
(e) An Event of Bankruptcy shall have occurred and remain
continuing with respect to any Loan Party or, if the Servicer is not INTERIM
SERVICES or an Affiliate thereof, with respect to the Servicer; or
(f) The Dilution Ratio at any Cut-Off Date exceeds 2.00%; or
(g) The Default Trigger Ratio at any Cut-Off Date exceeds
8.75%; or
(h) The Delinquency Ratio at any Cut-Off Date exceeds 3.60%;
or
(i) On any Settlement Date, after giving effect to the
payments made under Article II or Article III, the aggregate outstanding
principal balances of the Advances exceed the lesser of the Borrowing Base or
the Aggregate Commitment, the Loans made by Blue Ridge and its Liquidity Banks
exceed the Blue Ridge Allocation Limit, or the Loans made by Falcon and First
Chicago (and any other Falcon Liquidity Bank, if applicable) exceed the Falcon
Allocation Limit; or
(j) There shall have occurred any event which materially
adversely impairs the ability of any of the Originators to originate
receivables; or
(k) A Change in Control shall occur; or
(l) The Internal Revenue Service shall file notice of a lien
pursuant to Section 6323 of the Internal Revenue Code with regard to any of the
Receivables or Related Assets and
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such lien shall not have been released within seven (7) days, or the Pension
Benefit Guaranty Corporation shall, or shall indicate its intention to, file
notice of a lien pursuant to Section 4068 of the Employee Retirement Income
Security Act of 1974 with regard to any of the Receivables or Related Assets; or
(m) The Collateral Agent, on behalf of the Secured Parties,
for any reason, does not have a valid, perfected first priority interest in the
Receivables and the Related Assets; or
(n) (i) One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against the
Borrower involving in the aggregate a liability (to the extent not covered by
independent third-party insurance as to which the insurer does not dispute
coverage) as to any single or related series of transactions, incidents or
conditions, of $10,700 or more, and the same shall remain unsatisfied, unvacated
and unstayed pending appeal for a period of 30 days after the entry thereof, or
any non-monetary judgment, order or decree is entered against the Borrower which
does or would reasonably be expected to have a Material Adverse Effect, and
there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(ii) One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered
against any of the Originators involving in the aggregate a liability
(to the extent not covered by independent third-party insurance as to
which the insurer does not dispute coverage) as to any single or
related series of transactions, incidents or conditions, of $10,000,000
or more, and the same shall remain unsatisfied, unvacated and unstayed
pending appeal for a period of 30 days after the entry thereof, or any
non-monetary judgment, order or decree is entered against any of the
Originators which does or would reasonably be expected to have a
Material Adverse Effect, and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(o) (i) An ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which his resulted or could reasonably be expected to
result in liability of any of the Originators under Title IV of ERISA to such
Pension Plan, such Multiemployer Plan or the PBGC in an aggregate amount in
excess of $1,000,000; (ii) the aggregate amount of Unfunded-Pension Liability
among all Pension Plans at any time exceeds $1,000,000; or (iii) any of the
Originators or any ERISA Affiliate shall fail to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $1,000,000.
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Section 10.2 REMEDIES.
(a) OPTIONAL ACCELERATION. Upon the occurrence of an Event of
Default (other than an Event of Default described in SECTION 10.1(e) with
respect to the Borrower), either of the Co-Agents may by notice to the Borrower
and the other Agents, declare the Termination Date to have occurred and the
Obligations to be immediately due and payable, whereupon the Aggregate
Commitment shall terminate and all Obligations shall become immediately due and
payable.
(b) AUTOMATIC ACCELERATIon. Upon the occurrence of an Event of
Default described in Section 10.1(e) with respect to the Borrower, the
Termination Date shall automatically occur and the Obligations shall be
immediately due and payable.
(c) ADDITIONAL REMEDIES. Upon the Termination Date pursuant to
this SECTION 10.2, the Aggregate Commitment will terminate, no Loans or Advances
thereafter will be made, and the Collateral Agent, on behalf of the Secured
Parties, shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided under the UCC of
each applicable jurisdiction and other applicable laws, which rights shall be
cumulative.
ARTICLE XI.
THE AGENTS
Section 11.1 APPOINTMENT.
(a) Each Lender and Co-Agent hereby irrevocably designates and
appoints Wachovia Bank, N.A. as Collateral Agent hereunder, and authorizes the
Collateral Agent to take such action on its behalf under the provisions of the
Transaction Documents and to exercise such powers and perform such duties as are
expressly delegated to the Collateral Agent by the terms of the Transaction
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Collateral Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender,
Liquidity Bank or Co-Agent, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the
Collateral Agent shall be read into this Agreement or otherwise exist against
the Collateral Agent.
(b) Each of Blue Ridge and its Liquidity Banks hereby
irrevocably designates and appoints Wachovia Bank, N.A. as its Co-Agent
hereunder, and authorizes such Co-Agent to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to such Co-Agent by the terms of this
Agreement, if any, together with such other powers as are reasonably incidental
thereto. Each of Falcon and its Liquidity Banks hereby irrevocably designates
and appoints The First National Bank of Chicago as its Co-Agent hereunder, and
authorizes such Co-Agent to take such action on its behalf under the provisions
of this Agreement and to exercise such powers and perform such duties as are
expressly delegated to such Co-Agent by the terms of this Agreement, if any,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, no
Co-Agent shall have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any
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Lender, any Liquidity Bank or any other Agent, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities on the part of
such Co-Agent shall be read into this Agreement or otherwise exist against such
Co-Agent.
(c) The provisions of this ARTICLE XI are solely for the
benefit of the Agents and the Lenders, and neither of the Loan Parties shall
have any rights as a third-party beneficiary or otherwise under any of the
provisions of this ARTICLE XI, except that this ARTICLE XI shall not affect any
obligations which any Agent or any Lender may have to either of the Loan Parties
under the other provisions of this Agreement. Furthermore, no Lender or
Liquidity Bank shall have any rights as a third-party beneficiary or otherwise
under any of the provisions hereof in respect of a Co-Agent which is not the
Co-Agent for such Person.
(d) In performing its functions and duties hereunder, the
Collateral Agent shall act solely as the agent of the Secured Parties and does
not assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for either of the Loan Parties or any of their
respective successors and assigns. In performing its functions and duties
hereunder, each Co-Agent shall act solely as the agent of its respective Conduit
and its respective Liquidity Bank(s), and does not assume nor shall be deemed to
have assumed any obligation or relationship of trust or agency with or for
either of the Loan Parties, any other Lender, Liquidity Bank or Agent, or any of
their respective successors and assigns.
Section 11.2 DELEGATION OF DUTIES. Each Agent may execute any
of its duties under this Agreement by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. No Agent shall be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
Section 11.3 EXCULPATORY PROVISIONS. No Agent nor any of its
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them or any Person described in
SECTION 11.2 under or in connection with this Agreement (except for its, their
or such Person's own bad faith, gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders or other agents for any
recitals, statements, representations or warranties made by the Borrower
contained in this Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received under or in connection
with, this Agreement or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other document furnished
in connection herewith, or for any failure of either of the Loan Parties to
perform its respective obligations hereunder, or for the satisfaction of any
condition specified in ARTICLE V, except receipt of items required to be
delivered to such Agent. No Agent shall be under any obligation to any Lender,
Liquidity Bank or other Agent to ascertain or to inquire as to the observance or
performance of any of the agreements or covenants contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the Loan
Parties. This SECTION 11.3 is intended solely to govern the relationship between
each Agent, on the one hand, and the Lenders and their respective Liquidity
Banks, on the other.
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Section 11.4 RELIANCE BY AGENTS.
(a) Each Agent shall in all cases be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by such Agent. Each Agent shall in all cases be fully
justified in failing or refusing to take any action under this Agreement or any
other document furnished in connection herewith unless it shall first receive
such advice or concurrence of (i) in the case of the Collateral Agent, each of
the Co-Agents (except where another provision of this Agreement specifically
authorizes the Collateral Agent to take action based on the instructions of
either of the Co-Agents) or (ii) in the case of a Co-Agent, such of its Lenders
and Liquidity Banks, as it shall determine to be appropriate under the relevant
circumstances, or it shall first be indemnified to its satisfaction by its
constituent Liquidity Banks against any and all liability, cost and expense
which may be incurred by it by reason of taking or continuing to take any such
action. (b) Any action taken by the Collateral Agent in accordance with Section
11.4(a) shall be binding upon all Lenders and Agents.
(c) Each Co-Agent shall determine with its Conduit and, as
applicable, its Liquidity Banks, the number of such Persons which shall be
required to request or direct such Co-Agent to take action, or refrain from
taking action, under this Agreement on behalf of such Persons and whether any
consent of the rating agencies who rate such Conduit's Commercial Paper Notes is
required (such Persons and, if applicable, rating agencies, a "VOTING BLOCK").
Such Co-Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement in accordance with a request of its
appropriate Voting Block, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all of such Co-Agent's constituents.
(d) Unless otherwise advised in writing by a Co-Agent or by
any Lender or Liquidity Bank on whose behalf such Co-Agent is purportedly
acting, each party to this Agreement may assume that (i) such Co-Agent is acting
for the benefit of each of its constituent Lenders and, as applicable, Liquidity
Banks, as well as for the benefit of each permitted assignee from any such
Person, and (ii) each action taken by such Co-Agent has been duly authorized and
approved by all necessary action on the part of its Voting Block. Each Conduit
(or, with the consent of all other Lenders then existing, any other Lender)
shall have the right to designate a new Co-Agent (which may be itself) to act on
its behalf and on behalf of its assignees and transferees for purposes of this
Agreement by giving to the Agents written notice thereof signed by such
Lender(s) and the newly designated Co-Agent. Such notice shall be effective when
receipt thereof is acknowledged by the retiring Co-Agent, which acknowledgment
shall not be withheld or unreasonably delayed, and thereafter the party named as
such therein shall be Co-Agent for such Lenders under this Agreement. Each
Co-Agent and its Lenders and Liquidity Banks shall agree amongst themselves as
to the circumstances and procedures for removal and resignation of such
Co-Agent.
Section 11.5 NOTICE OF EVENTS OF DEFAULT. No Agent shall be
deemed to have knowledge or notice of the occurrence of any Event of Default or
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Unmatured Default unless such Agent has received notice from another Agent, a
Lender, a Liquidity Bank or a Loan Party referring to this Agreement, stating
that an Event of Default or Unmatured Default has occurred hereunder and
describing such Event of Default or Unmatured Default. In the event that any of
the Agents receives such a notice, it shall promptly give notice thereof to the
other Agents for distribution, in the case of a Co-Agent, to its constituent
Lender(s) and Liquidity Banks. The Collateral Agent shall take such action with
respect to such Event of Default or Unmatured Default as shall be directed by
either of the Co-Agents.
Section 11.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each of
the Lenders expressly acknowledges that no Agent, nor any of such Agent's
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by any Agent hereafter
taken, including, without limitation, any review of the affairs of the Loan
Parties, shall be deemed to constitute any representation or warranty by such
Agent. Each of the Lenders also represents and warrants to the Agents and the
other Lenders that it has, independently and without reliance upon any such
Person (or any of their Affiliates) and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, prospects, financial and other conditions
and creditworthiness of the Loan Parties and made its own decision to enter into
this Agreement. Each of the Lenders also represents that it will, independently
and without reliance upon any Agent or any other Liquidity Bank or Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such investigation
as it deems necessary to inform itself as to the business, operations, property,
prospects, financial and other condition and creditworthiness of the Loan
Parties. None of the Agents or the Lenders, nor any of their respective
Affiliates, shall have any duty or responsibility to provide any party to this
Agreement with any credit or other information concerning the business,
operations, property, prospects, financial and other condition or
creditworthiness of the Loan Parties which may come into the possession of such
Person or any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates, except that each of the Co-Agents shall
promptly distribute to its related Conduit (and, as applicable, its Liquidity
Banks), copies of financial and other information expressly provided to such
Co-Agent by either of the Loan Parties pursuant to this Agreement for
distribution to the Agents and/or Lenders.
Section 11.7 INDEMNIFICATION OF AGENTS.
(a) Each Liquidity Bank agrees to indemnify the Collateral
Agent and its officers, directors, employees, representatives and agents (to the
extent not reimbursed by the Loan Parties and without limiting the obligation of
the Loan Parties to do so), ratably in accordance with their respective
Percentages or Loans, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel for the Collateral Agent or
such Person in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not the Collateral Agent in its
capacity as Collateral Agent or such Person shall be designated a party thereto)
that may at any time be imposed on, incurred by or asserted against the
Collateral Agent or such Person as a result of, or arising out of, or in any way
related to or by reason of, any of the transactions contemplated hereunder or
the execution, delivery or performance of this Agreement
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or any other document furnished in connection herewith (but excluding any such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the bad faith, gross
negligence or willful misconduct of the Collateral Agent or such Person as
finally determined by a court of competent jurisdiction).
(b) Each Liquidity Bank agrees to indemnify its Co-Agent and
such Co-Agent's officers, directors, employees, representatives and agents (to
the extent not reimbursed by the Borrower and without limiting the obligation of
the Borrower to do so), ratably in accordance with their respective Percentages
or Loans, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (including, without limitation, the fees and
disbursements of counsel for such Co-Agent or such Person in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Co-Agent in its capacity as Co-Agent or such Person shall be
designated a party thereto) that may at any time be imposed on, incurred by or
asserted against such Co-Agent or such Person as a result of, or arising out of,
or in any way related to or by reason of, any of the transactions contemplated
hereunder or the execution, delivery or performance of this Agreement or any
other document furnished in connection herewith (but excluding any such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the bad faith, gross
negligence or willful misconduct of such Co-Agent or such Person as finally
determined by a court of competent jurisdiction).
Section 11.8 AGENTS IN THEIR INDIVIDUAL CAPACITIES. Each of
the Agents in its individual capacity and its affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the Loan
Parties and their Affiliates as though such Agent were not an Agent hereunder.
With respect to its Loans, if any, pursuant to this Agreement, each Agent shall
have the same rights and powers under this Agreement as any Lender and may
exercise the same as though it were not an Agent, and the terms "LENDER" and
"LENDERS" shall include each of the Agents in their individual capacities.
Section 11.9 SUCCESSOR COLLATERAL AGENT. The Collateral Agent,
upon five (5) days' notice to the Borrower, the Lenders and the Co-Agents, may
voluntarily resign and may be removed at any time, with or without cause, by the
Co-Agents; PROVIDED, HOWEVER, that Wachovia Bank, N.A. shall not voluntarily
resign as the Collateral Agent so long as any of Blue Ridge's Liquidity Banks'
respective Commitments remain in effect or Blue Ridge has any outstanding Loans
hereunder and, PROVIDED, FURTHER, that if Wachovia Bank, N.A. voluntarily
resigns or is removed as the Collateral Agent at a time when Falcon has
outstanding Loans or Falcon's Liquidity Banks have outstanding Loans or
Commitments, First Chicago shall succeed to Wachovia Bank, N.A. as Collateral
Agent. In addition, if Blue Ridge's Liquidity Banks cease to have Commitments
hereunder and neither Blue Ridge nor any of its other Liquidity Banks has any
outstanding Loans, First Chicago shall succeed to Wachovia Bank, N.A. as
Collateral Agent. If any Collateral Agent (other than Wachovia Bank, N.A.) shall
voluntarily resign or be removed as Collateral Agent under this Agreement, then
the Co-Agents during such five-day period shall appoint, with the consent of the
Borrower from among the remaining Agents and Lenders, a successor collateral
agent, whereupon such successor collateral agent shall succeed to the rights,
powers and duties of the Collateral Agent and the term "COLLATERAL AGENT" shall
mean such successor agent, effective upon its appointment, and the former
Collateral Agent's rights, powers
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and duties as Collateral Agent shall be terminated, without any other or further
act or deed on the part of such former Collateral Agent or any of the parties to
this Agreement. Upon resignation or replacement of any Collateral Agent in
accordance with this Section 11.9, the retiring Collateral Agent shall execute
such UCC-3 assignments and amendments, and assignments and amendments of the
Transaction Documents, as may be necessary to give effect to its replacement by
a successor Collateral Agent. After any retiring Collateral Agent's resignation
hereunder as Collateral Agent, the provisions of this ARTICLE XI and ARTICLE
XIII shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Collateral Agent under this Agreement.
Section 11.10 AGENTS' CONFLICT WAIVERS.
(a) Wachovia acts, or may in the future act, (i) as
administrative agent for Blue Ridge, (ii) as issuing and paying agent for Blue
Ridge's Commercial Paper Notes, (iii) to provide credit or liquidity enhancement
for the timely payment for Blue Ridge's Commercial Paper Notes and (iv) to
provide other services from time to time for Blue Ridge (collectively, the
"WACHOVIA ROLES"). Without limiting the generality of SECTIONS 11.1 AND 11.8,
each Agent, Lender and Liquidity Bank hereby acknowledges and consents to any
and all Wachovia Roles and agrees that in connection with any Wachovia Role,
Wachovia may take, or refrain from taking, any action which it, in its
discretion, deems appropriate, including, without limitation, in its role as
administrative agent for Blue Ridge, the giving of notice to Blue Ridge's
Liquidity Banks of a mandatory purchase pursuant to Blue Ridge's Liquidity
Agreement, and hereby acknowledges that neither Wachovia nor any of its
Affiliates has any fiduciary duties hereunder to any Lender (other than Blue
Ridge) or to any of Blue Ridge's Liquidity Banks arising out of any Wachovia
Roles.
(b) First Chicago acts, or may in the future act, (i) as
administrative agent for Falcon, (ii) as issuing and paying agent for Falcon's
Commercial Paper, (iii) to provide credit or liquidity enhancement for the
timely payment for Falcon's Commercial Paper and (iv) to provide other services
from time to time for Falcon (collectively, the "FIRST CHICAGO ROLES"). Without
limiting the generality of SECTIONS 11.1 and 11.8, each of the Agents and the
Lenders hereby acknowledges and consents to any and all First Chicago Roles and
agrees that in connection with any First Chicago Role, First Chicago may take,
or refrain from taking, any action which it, in its discretion, deems
appropriate, including, without limitation, in its role as administrative agent
for Falcon, the giving of notice to Falcon's Liquidity Banks of a mandatory
purchase pursuant to Falcon's Liquidity Agreement, and hereby acknowledges that
neither First Chicago nor any of its Affiliates has any fiduciary duties
hereunder to any Lender (other than Falcon) or to any of Falcon's Liquidity
Banks arising out of any First Chicago Roles.
Section 11.11 UCC FILINGS. Each of the Secured Parties hereby
expressly recognizes and agrees that the Collateral Agent may be listed as the
assignee or secured party of record on the various UCC filings required to be
made under the Transaction Documents in order to perfect their respective
interests in the Collateral, that such listing shall be for administrative
convenience only in creating a record or nominee holder to take certain actions
hereunder on behalf of the Secured Parties and that such listing will not affect
in any way the status of the Secured Parties as the true parties in interest
with respect to the Collateral. In addition, such
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listing shall impose no duties on the Collateral Agent other than those
expressly and specifically undertaken in accordance with this ARTICLE XI.
ARTICLE XII.
ASSIGNMENTS AND PARTICIPATIONS
Section 12.1 RESTRICTIONS ON ASSIGNMENTS, ETC.
(a) No Loan Party may assign its rights, or delegate its
duties hereunder or any interest herein without the prior written consent of
each of the Agents; PROVIDED, HOWEVER, that the foregoing shall not be deemed to
restrict:
(i) INTERIM SERVICES' right, prior to delivery of a Successor
Notice, to delegate its duties as Servicer to other Originators,
provided that INTERIM SERVICES shall remain primarily liable for the
performance or non-performance of such duties, or
(ii) any Originator(s), whether or not it is acting as the
Servicer or a sub-servicer, from entering into a Permitted
Restructuring.
(b) Each of the Conduits may, at any time, assign all or any
portion of a Loan, or sell participations therein, to its Liquidity Banks (or to
its Co-Agent for the ratable benefit of its Liquidity Banks).
(c) In addition to, and not in limitation of, assignments and
participations described in SECTION 12.1(b):
(i) in the event that any Liquidity Bank becomes a Downgraded
Liquidity Bank, such Downgraded Liquidity Bank shall give prompt
written notice of its Downgrading Event to its Co-Agent and to the
Borrower. Within 5 Business Days after the Borrower's receipt of such
notice, the Borrower may propose an Eligible Assignee who is willing to
accept an assignment of, and to assume, such Downgraded Liquidity
Bank's rights and obligations under this Agreement and under its
applicable Liquidity Agreement. In the event that the Borrower fails to
propose such an Eligible Assignee within such 5 Business Day period, or
such Eligible Assignee does not execute and deliver assignment and
assumption documents reasonably acceptable to such Downgraded Liquidity
Bank and its Co-Agent and pays the Downgraded Liquidity Bank's
Obligations in full, in each case, not later than 5:00 p.m. (New York
City time) on the 10th Business Day following the Borrower's receipt of
notice of such Downgrading Event, such Co-Agent may identify an
Eligible Assignee without the Borrower's consent, and the Downgraded
Liquidity Bank shall promptly assign its rights and obligations to the
Eligible Assignee designated by its Co-Agent against payment in full of
its Obligations;
(ii) each of the Lenders may assign all or any portion of its
Loans and, if applicable its Commitment under this Agreement to any
Eligible
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Assignee with the prior written consent of the Borrower, which consent
shall not be unreasonably withheld or delayed; and
(iii) each of the Lenders may, with the prior written consent
of the Borrower, sell participations in all or any portion of their
respective rights and obligations in, to and under the Transaction
Documents and the Obligations in accordance with SECTIONS 12.2 and
14.7.
In the event that the Borrower reasonably withholds its consent to a proposed
assignment or participation under SECTION 12.1(c)(ii) or SECTION 12.1(c)(iii),
the Borrower will have 60 days from the date on which it first received notice
of a proposed assignment or participation to propose an Eligible Assignee as an
alternate assignee or participant, as the case may be, to the Lender who
proposed to make such assignment or to sell such participation (each, a
"PROPOSING LENDER") and to its Co-Agent. Provided that (x) such proposed
Eligible Assignee is, in the case of a participation, reasonably acceptable to
the Proposing Lender, and (y) such proposed Eligible Assignee, in the case of an
assignment or a participation, executes and delivers an assignment and
assumption agreement or a participation agreement, as the case may be,
reasonably acceptable to the Proposing Lender and its Co-Agent and, if
applicable, pays the Proposing Lender the amounts due to it under its assignment
or participation agreement, as applicable, in each case, not later than 5:00
p.m. (New York City time) on such 60th day, the Proposing Lender shall be
obliged to make the proposed assignment or sell the proposed participation to
the Eligible Assignee proposed by the Borrower against payment in full of its
Obligations, if any, that are being assigned or participated. In the event the
Borrower fails to propose an Eligible Assignee, or the proposed Eligible
Assignee fails to execute and deliver documents or to pay for the assigned
Obligations, by such 60th day, then the Proposing Lender may proceed to enter
into the proposed assignment or participation with the Eligible Assignee or
participant originally identified by the Proposing Lender.
Section 12.2 RIGHTS OF ASSIGNEES AND PARTICIPANTS.
(a) Upon the assignment by a Lender in accordance with SECTION
12.1(b) OR (c), the Eligible Assignee(s) receiving such assignment shall have
all of the rights of such Lender with respect to the Transaction Documents and
the Obligations (or such portion thereof as has been assigned).
(b) In no event will the sale of any participation interest in
any Lender's or any Eligible Assignee's rights under the Transaction Documents
or in the Obligations relieve the seller of such participation of its
obligations, if any, hereunder or, if applicable, under the applicable Liquidity
Agreement.
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Section 12.3 TERMS AND EVIDENCE OF ASSIGNMENT. Any assignment
to any Eligible Assignee(s) pursuant to SECTION 1.8, 12.1(b) or 12.1(c) shall be
upon such terms and conditions as the assigning Lender and its Co-Agent, on the
one hand, and the Eligible Assignee, on the other, may mutually agree, and shall
be evidenced by such instrument(s) or document(s) as may be satisfactory to such
Lender, its Co-Agent and the Eligible Assignee(s). Any assignment made in
accordance with the terms of the Article XII shall relieve the assigning Lender
of its obligations, if any, under this Agreement (and, if applicable, its
Liquidity Agreement) to the extent assigned.
ARTICLE XIII.
INDEMNIFICATION
Section 13.1 INDEMNITIES BY THE BORROWER.
(a) GENERAL INDEMNITY. Without limiting any other rights which
any such Person may have hereunder or under applicable law, the Borrower hereby
agrees to indemnify each of the Agents, the Lenders, the Liquidity Banks, each
of their respective Affiliates, and all successors, transferees, participants
and assigns and all officers, directors, shareholders, controlling persons,
employees and agents of any of the foregoing (each, an "INDEMNIFIED PARTY"),
forthwith on demand, from and against any and all damages, losses, claims,
liabilities and related costs and expenses, including attorneys' fees and
disbursements (all of the foregoing being collectively referred to as
"INDEMNIFIED AMOUNTS") awarded against or incurred by any of them arising out of
or relating to the Transaction Documents, the Obligations or the Collateral,
EXCLUDING, HOWEVER, (i) Indemnified Amounts to the extent determined by a court
of competent jurisdiction to have resulted from bad faith, gross negligence or
willful misconduct on the part of such Indemnified Party or (ii) recourse
(except as otherwise specifically provided in this Agreement) for Indemnified
Amounts to the extent the same includes losses in respect of Receivables which
are uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor. Without limiting the foregoing, the
Borrower shall indemnify each Indemnified Party for Indemnified Amounts arising
out of or relating to:
(A) the creation of any Lien on, or transfer by any
Loan Party of any interest in, the Collateral other than the
sale of Receivables and related property by the Originators to
the Borrower pursuant to the Sale Agreement and the grant of
by the Borrower of a security interest in the Collateral to
the Collateral Agent pursuant to SECTION 9.1;
(B) any representation or warranty made by any Loan
Party (or any of its officers) under or in connection with any
Transaction Document, any Information Package or any other
information or report delivered by or on behalf of any Loan
Party pursuant hereto, which shall have been false, incorrect
or misleading in any respect when made or deemed made or
delivered, as the case may be;
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(C) the failure by any Loan Party to comply with any
applicable law, rule or regulation with respect to any
Receivable or the related Contract and/or Invoice, or the
nonconformity of any Receivable or the related Contract and/or
Invoice with any such applicable law, rule or regulation;
(D) the failure to vest and maintain vested in the
Collateral Agent, for the benefit of the Secured Parties, a
valid and perfected first priority security interest in the
Collateral, free and clear of any other Lien, other than a
Lien arising solely as a result of an act of one of the
Secured Parties, now or at any time thereafter;
(E) the failure to file, or any delay in filing,
financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Collateral;
(F) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any
Receivable (including, without limitation, a defense based on
such Receivables or the related Contract and/or Invoice not
being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any
other claim resulting from the sale of the services related to
such Receivable or the furnishing or failure to furnish such
services;
(G) any Rebill or other matter described in
SECTION 3.4;
(H) any failure of any Loan Party, as the Borrower,
the Servicer or otherwise, to perform its duties or
obligations in accordance with the provisions of this
Agreement or the other Transaction Documents to which it is a
party;
(I) any claim of breach by any Loan Party of any
related Contract and/or Invoice with respect to any
Receivable;
(J) any tax or governmental fee or charge (but not
including taxes upon or measured by net income), all interest
and penalties thereon or with respect thereto, and all
out-of-pocket costs and expenses, including the reasonable
fees and expenses of counsel in defending against the same,
which may arise by reason of the Collateral Agent's security
interest in the Collateral;
(K) any failure of the Borrower, any of the
Originators, the Servicer or any Person to whom the Servicer
delegates any servicing responsibilities to be Year 2000
Compliant;
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(L) the commingling of Collections of Receivables at
any time with other funds;
(M) any investigation, litigation or proceeding
related to or arising from this Agreement or any other
Transaction Document, the transactions contemplated hereby or
thereby, the use of the proceeds of any Loan, the security
interest in the Receivables and Related Assets or any other
investigation, litigation or proceeding relating to the
Borrower or any of the Originators in which any Indemnified
Party becomes involved as a result of any of the transactions
contemplated hereby or thereby (other than an investigation,
litigation or proceeding (1) relating to a dispute solely
amongst the Lenders (or certain Lenders) and one of the Agents
or (2) excluded by SECTION 13.1(a));
(N) any inability to litigate any claim against any
Obligor in respect of any Receivable as a result of such
Obligor being immune from civil and commercial law and suit on
the grounds of sovereignty or otherwise from any legal action,
suit or proceeding;
(O) the occurrence of any Event of Default of the
type described in SECTION 10.1(e); or
(P) any loss incurred by any of the Secured Parties
as a result of the inclusion in the Borrowing Base of
Receivables owing from any single Obligor and its Affiliated
Obligors which causes the aggregate Unpaid Balance of all such
Receivables to exceed the applicable Obligor Concentration
Limit.
(b) CONTEST OF TAX CLAIM; AFTER-TAX BASIS. If any Indemnified
Party shall have notice of any attempt to impose or collect any tax or
governmental fee or charge for which indemnification will be sought from any
Loan Party under SECTION 13.1(a)(xi), such Indemnified Party shall give prompt
and timely notice of such attempt to the Borrower and the Borrower shall have
the right, at its expense, to participate in any proceedings resisting or
objecting to the imposition or collection of any such tax, governmental fee or
charge. Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to the
Indemnified Party of the payment of any of the aforesaid taxes (including any
deduction) and the receipt of the indemnity provided hereunder or of any refund
of any such tax previously indemnified hereunder, including the effect of such
tax, deduction or refund on the amount of tax measured by net income or profits
which is or was payable by the Indemnified Party.
(c) CONTRIBUTION. If for any reason the indemnification
provided above in this SECTION 13.1 (and subject to the exceptions set forth
therein) is unavailable to an Indemnified Party or is insufficient to hold an
Indemnified Party harmless, then the Borrower shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss, claim,
damage
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or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Indemnified Party on the one hand and the
Borrower on the other hand but also the relative fault of such Indemnified Party
as well as any other relevant equitable considerations.
Section 13.2 INDEMNITIES BY SERVICER. Without limiting any
other rights which any Indemnified Party may have hereunder or under applicable
law, the Servicer hereby agrees to indemnify each of the Indemnified Parties
forthwith on demand, from and against any and all Indemnified Amounts awarded
against or incurred by any of them arising out of or relating to the Servicer's
performance of, or failure to perform, any of its obligations under or in
connection with any Transaction Document, or any representation or warranty made
by the Servicer (or any of its officers) under or in connection with any
Transaction Document, any Information Package or any other information or report
delivered by or on behalf of the Servicer, which shall have been false,
incorrect or misleading in any material respect when made or deemed made or
delivered, as the case may be, or the failure of the Servicer to comply with any
applicable law, rule or regulation with respect to any Receivable or the related
Contract and/or Invoice. Notwithstanding the foregoing, in no event shall any
Indemnified Party be awarded any Indemnified Amounts (a) to the extent
determined by a court of competent jurisdiction to have resulted from gross
negligence or willful misconduct on the part of such Indemnified Party or (b) as
recourse for Indemnified Amounts to the extent the same includes losses in
respect of Receivables which are uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor.
If for any reason the indemnification provided above in this
SECTION 13.2 (and subject to the exceptions set forth therein) is unavailable to
an Indemnified Party or is insufficient to hold an Indemnified Party harmless,
then the Servicer shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Indemnified Party on the one hand and the Servicer on the other hand but
also the relative fault of such Indemnified Party as well as any other relevant
equitable considerations.
ARTICLE XIV.
MISCELLANEOUS
Section 14.1 AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement nor consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be in writing
and signed by each of the Loan Parties, the Collateral Agent, and, with the
consent of their respective Voting Blocks, the Co-Agents, and any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. The Loan Parties acknowledge that, before entering into
such an amendment or granting such a waiver or consent, each of the Co-Agents
will be required to obtain the approval of their respective Voting Blocks.
Section 14.2 NOTICES, ETC. All notices and other
communications provided for hereunder shall, unless otherwise stated herein, be
in writing (including facsimile communication) and shall be personally delivered
or sent by express mail or courier or by certified mail, postage prepaid, or by
facsimile, to the intended party at the address or facsimile number of such
party set forth on SCHEDULE 14.2 or at such other address or facsimile number as
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shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective, (a) if
personally delivered or sent by express mail or courier or if sent by certified
mail, when received, and (b) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.
Section 14.3 NO WAIVER; REMEDIES. No failure on the part of
any Agent or any of the Secured Parties to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. Without limiting
the foregoing, each of the Agents, the Lenders and the Liquidity Banks is hereby
authorized by the Borrower at any time and from time to time, to the fullest
extent permitted by law, to set off and apply to payment of any Obligations that
are then due and owing any and all deposits (general or special, time or demand
provisional or final) at any time held and other indebtedness at any time owing
by such Person to or for the credit or the account of the Borrower.
Section 14.4 BINDING EFFECT; SURVIVAL. This Agreement shall be
binding upon and inure to the benefit of each the Loan Parties, the Agents, the
Lenders and their respective successors and assigns, and the provisions of
SECTION 4.2 and ARTICLE XIII shall inure to the benefit of the Affected Parties
and the Indemnified Parties, respectively, and their respective successors and
assigns; PROVIDED, HOWEVER, nothing in the foregoing shall be deemed to
authorize any assignment not permitted by SECTION 12.1. This Agreement shall
create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
Final Payout Date. The rights and remedies with respect to any breach of any
representation and warranty made by the Borrower pursuant to ARTICLE VI and the
indemnification and payment provisions of ARTICLE XIII and SECTIONS 4.2, 14.5,
14.6, 14.7, 14.8 and 14.15 shall be continuing and shall survive any termination
of this Agreement.
Section 14.5 COSTS, EXPENSES AND TAXES. In addition to their
obligations under the other provisions of this Agreement, the Loan Parties
jointly and severally agree to pay:
(a) within 15 Business Days after receipt of a written invoice
therefor: all reasonable out-of-pocket costs and expenses incurred by the
Agents, in connection with (i) the negotiation, preparation, execution and
delivery of this Agreement, the other Transaction Documents or the Liquidity
Agreements (subject to the limitations set forth in the Fee Letters), or (ii)
the administration of the Transaction Documents prior to an Event of Default
including, without limitation, (A) the reasonable fees and expenses of a single
law firm acting as counsel to the Agents and the Lenders incurred in connection
with any of the foregoing, and (B) subject to the limitations set forth in the
Fee Letters and in SECTION 7.1(c), the reasonable fees and expenses of
independent accountants incurred in connection with any review of any Loan
Party's books and records either prior to or after the execution and delivery
hereof;
(b) within 15 Business Days after receipt of a written invoice
therefor: all reasonable out-of-pocket costs and expenses (including, without
limitation, the reasonable fees and expenses of counsel and independent
accountants) incurred by each of the Lenders, the Agents and the Liquidity Banks
in connection with the negotiation, preparation, execution and delivery of any
amendment or consent to, or waiver of, any provision of the Transaction
Documents which is requested or proposed by any Loan Party (whether or not
consummated), the administration of the Transaction Documents following an Event
of Default (or following a waiver of or consent to any Event of Default), or the
enforcement by any of the foregoing Persons of, or any actual or claimed breach
of, this Agreement or any of the other Transaction
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Documents, including, without limitation, (i) the reasonable fees and expenses
of counsel to any of such Persons incurred in connection with any of the
foregoing or in advising such Persons as to their respective rights and remedies
under any of the Transaction Documents in connection with any of the foregoing,
and (ii) the reasonable fees and expenses of independent accountants incurred in
connection with any review of any Loan Party's books and records or valuation of
the Receivables and Related Assets; and
(c) upon demand: all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing and
recording of this Agreement or the other Transaction Documents (and Loan
Parties, jointly and severally agree to indemnify each Indemnified Party against
any liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees).
Section 14.6 NO PROCEEDINGS. Each of the parties hereto hereby
agrees that it will not institute against the Borrower, Blue Ridge or Falcon, or
join any Person in instituting against the Borrower, Blue Ridge or Falcon, any
insolvency proceeding (namely, any proceeding of the type referred to in the
definition of Event of Bankruptcy) so long as any Commercial Paper Notes or
other senior Indebtedness issued by Blue Ridge or Falcon shall be outstanding or
there shall not have elapsed one year plus one day since the last day on which
any such Commercial Paper Notes or other senior Indebtedness shall have been
outstanding.
Section 14.7 CONFIDENTIALITY OF BORROWER INFORMATION.
(a) CONFIDENTIAL BORROWER INFORMATION. Each party hereto
(other than the Loan Parties) acknowledges that certain of the information
provided to such party by or on behalf of Loan Parties in connection with this
Agreement and the transactions contemplated hereby is or may be confidential,
and each such party severally agrees that, unless INTERIM SERVICES shall
otherwise agree in writing, and except as provided in SUBSECTION (b), such party
will not disclose to any other person or entity:
(i) any information regarding, or copies of, any nonpublic
financial statements, reports, schedules and other information furnished by any
Loan Party to the Co-Agents and the Lenders (A) prior to the date hereof in
connection with such party's due diligence relating to Loan Parties and the
transactions contemplated hereby, or (B) pursuant to SECTION 3.1, 5.1, 6.1(i),
6.1(m), 7.1(c) or 7.2, or
(ii) any other information regarding any Loan Party which is
designated by any Loan Party to such party in writing as confidential
(the information referred to in CLAUSES (i) AND (ii) above, whether furnished by
any Loan Party or any attorney for or other representative thereof (each, a
"BORROWER INFORMATION PROVIDER"), is collectively referred to as the "BORROWER
INFORMATION"); PROVIDED, HOWEVER, "BORROWER INFORMATION" shall not include any
information which is or becomes generally available to the
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general public or to such party on a nonconfidential basis from a source other
than any Borrower Information Provider, or which was known to such party on a
nonconfidential basis prior to its disclosure by any Borrower Information
Provider.
(b) DISCLOSURE. Notwithstanding SUBSECTION (a), each party may
disclose any Borrower Information:
(i) to any of such party's attorneys and auditors,
(ii) to any dealer or placement agent for such party's
Commercial Paper Notes, who (A) in the good faith belief of such party, has a
need to know the Borrower Information, (B) is informed by such party of the
confidential nature of the Borrower Information and the terms of this SECTION
14.7 and (C) has agreed in writing to be bound by the provisions of this SECTION
14.7,
(iii) to any Liquidity Bank (whether or not on the date of
disclosure, such Liquidity Bank continues to be an Eligible Assignee), to any
other actual or potential permitted assignee or participant permitted under
SECTION 12.1 who has agreed to be bound by the provisions of this SECTION 14.7,
(iv) to any rating agency that maintains a rating for such
party's Commercial Paper Notes or is considering the issuance of such a rating,
for the purposes of reviewing the credit of any Lender in connection with such
rating,
(v) to any other party to this Agreement (and any independent
attorneys and auditors of such party), for the purposes contemplated hereby,
(vi) as may be required by any municipal, state, federal or
other regulatory body having or claiming to have jurisdiction over such party,
in order to comply with any law, order, regulation, regulatory request or ruling
applicable to such party,
(vii) subject to SUBSECTION (C), in the event such party is
legally compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose such
Borrower Information,
(viii) to any entity that provides a surety bond or other
credit enhancement to either of the Conduits, or
(ix) in connection with the enforcement of this Agreement or
any other Transaction Document.
In addition, each of the Lenders and the Agents may disclose on a "no name"
basis to any actual or potential investor in Commercial Paper Notes information
regarding the nature of this Agreement, the basic terms hereof (including
without limitation the amount and nature of the Aggregate Commitment and the
Advances), the nature, amount and status of the Receivables,
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and the current and/or historical ratios of losses to liquidations and/or
outstandings with respect to the Receivables.
(c) LEGAL COMPULSION. In the event that any party hereto
(other than any Loan Party) or any of its representatives is requested or
becomes legally compelled (by interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to disclose
any of the Borrower Information, such party will (or will cause its
representative to):
(i) provide INTERIM SERVICES with prompt written notice so
that (A) INTERIM SERVICES may seek a protective order or other appropriate
remedy, or (B) INTERIM SERVICES may, if it so chooses, agree that such party (or
its representatives) may disclose such Borrower Information pursuant to such
request or legal compulsion; and
(ii) unless INTERIM SERVICES agrees that such Borrower
Information may be disclosed, make a timely objection to the request or
compulsion to provide such Borrower Information on the basis that such Borrower
Information is confidential and subject to the agreements contained in this
SECTION 14.7.
In the event such protective order or remedy is not obtained,
or INTERIM SERVICES agrees that such Borrower Information may be disclosed, such
party will furnish only that portion of the Borrower Information which (in such
party's good faith judgment) is legally required to be furnished and will
exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be afforded the Borrower Information.
(d) SURVIVAL. This SECTION 14.7 shall survive termination of
this Agreement.
Section 14.8 CONFIDENTIALITY OF PROGRAM INFORMATION.
(a) CONFIDENTIAL INFORMATION. Each party hereto acknowledges
that each of the Conduits and its Co-Agent regard the structure of the
transactions contemplated by this Agreement to be proprietary, and each such
party agrees that:
(i) it will not disclose without the prior consent of the
applicable Conduit or its Co-Agent (other than to the directors, employees,
auditors, counsel or affiliates (collectively, "REPRESENTATIVES") of such party,
each of whom shall be informed by such party of the confidential nature of the
Program Information (as defined below) and of the terms of this SECTION 14.8):
(A) any information regarding the pricing in, or copies of, this Agreement, the
Liquidity Agreements or the Fee Letters or any transaction contemplated hereby
or thereby, (B) any information regarding the organization, business or
operations of such Conduit generally or the services performed by such Conduit's
Co-Agent for such Conduit, or (C) any information which is furnished by such
Conduit or its Co-Agent to such party and which is designated by such Conduit or
its Co-Agent to such party in writing or otherwise as confidential or not
otherwise available to the general public (the information referred to in
CLAUSES (A), (B) and (C) is collectively referred to as the "PROGRAM
INFORMATION"); PROVIDED, HOWEVER, that such party may disclose any such Program
Information (I) as may be required by any
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municipal, state, federal or other regulatory body having or claiming to have
jurisdiction over such party, including, without limitation, the SEC, (II) in
order to comply with any law, order, regulation, regulatory request or ruling
applicable to such party, (III) subject to SUBSECTION (c) below, in the event
such party is legally compelled (by interrogatories, requests for information or
copies, subpoena, civil investigative demand or similar process) to disclose any
such Program Information, or (IV) in financial statements as required by GAAP;
(ii) it will use the Program Information solely for the
purposes of evaluating, administering and enforcing the transactions
contemplated by the Transaction Documents and making any necessary business
judgments with respect thereto; and
(iii) it will, upon demand, return (and cause each of its
representatives to return) to the applicable Co-Agent, all documents or other
written material received from such Conduit or Co-Agent in connection with
(a)(i)(b) or (c) above and all copies thereof made by such party which contain
the Program Information.
(b) AVAILABILITY OF CONFIDENTIAL INFORMATION. This SECTION
14.8 shall be inoperative as to such portions of the Program Information which
are or become generally available to the public or such party on a
nonconfidential basis from a source other than the applicable Co-Agent or were
known to such party on a nonconfidential basis prior to its disclosure by such
Co-Agent.
(c) LEGAL COMPULSION TO DISCLOSE. In the event that any party
or anyone to whom such party or its representatives transmits the Program
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Program Information, such party will:
(i) provide the applicable Co-Agent with prompt written notice
so that such Co-Agent may seek a protective order or other appropriate remedy
and/or, if it so chooses, agree that such party may disclose such Program
Information pursuant to such request or legal compulsion; and
(ii) unless such Co-Agent agrees that such Program Information
may be disclosed, make a timely objection to the request or confirmation to
provide such Program Information on the basis that such Program Information is
confidential and subject to the agreements contained in this SECTION 14.8.
In the event that such protective order or other remedy is not obtained, or the
applicable Co-Agent agrees that such Program Information may be disclosed, such
party will furnish only that portion of the Program Information which (in such
party's good faith judgment) is legally required to be furnished and will
exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Program Information. In the event any Loan Party
is required to file a copy of this Agreement with the SEC or any other
governmental authority, it will (A) provide the applicable Co-Agent with prompt
written notice of such requirement and (B)
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exercise reasonable efforts to obtain reliable assurance that such governmental
authority will give confidential treatment to this Agreement.
(d) SURVIVAL. This SECTION 14.8 shall survive termination of
this Agreement.
Section 14.9 CAPTIONS AND CROSS REFERENCES. The various
captions (including, without limitation, the table of contents) in this
Agreement are provided solely for convenience of reference and shall not affect
the meaning or interpretation of any provision of this Agreement. Unless
otherwise indicated, references in this Agreement to any Section, Appendix,
Schedule or Exhibit are to such Section of or Appendix, Schedule or Exhibit to
this Agreement, as the case may be, and references in any Section, subsection,
or clause to any subsection, clause or subclause are to such subsection, clause
or subclause of such Section, subsection or clause.
Section 14.10 INTEGRATION. This Agreement and the other
Transaction Documents contain a final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire understanding among the parties hereto with respect
to the subject matter hereof, superseding all prior oral or written
understandings.
Section 14.11 GOVERNING LAW. THIS AGREEMENT, INCLUDING THE
RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICTS OF LAW, EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE
SECURITY INTEREST OF THE COLLATERAL AGENT, ON BEHALF OF THE SECURED PARTIES, IN
THE COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
Section 14.12 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY
IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR
OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL NOT BE
TRIED BEFORE A JURY.
Section 14.13 CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES.
EACH SELLER PARTY HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION, FIRST, OF ANY UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL
JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE
SITTING IN NEW YORK COUNTY, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, AND (ii) WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, THE DEFENSE OF
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AN INCONVENIENT FORUM TO THE MAINTENANCE OF AN ACTION OR PROCEEDING IN SUCH
COURTS.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO
EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR
IN CONNECTION WITH THIS AGREEMENT.
Section 14.14 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by the different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement.
Section 14.15 NO RECOURSE AGAINST OTHER PARTIES. The several
obligations of the Lenders under this Agreement are solely the corporate
obligations of such Lender. No recourse shall be had for the payment of any
amount owing by such Lender under this Agreement or for the payment by such
Lender of any fee in respect hereof or any other obligation or claim of or
against such Lender arising out of or based upon this Agreement, against any
employee, officer, director, incorporator or stockholder of such Lender. Each of
the Borrower, the Servicer and the Agents agrees that each of the Conduits shall
be liable for any claims that such party may have against such Conduit only to
the extent such Conduit has excess funds and to the extent such assets are
insufficient to satisfy the obligations of such Conduit hereunder, such Conduit
shall have no liability with respect to any amount of such obligations remaining
unpaid and such unpaid amount shall not constitute a claim against such Conduit.
Any and all claims against the Conduits or the Co-Agents shall be subordinate to
the claims against such Persons of the holders of such Conduit's Commercial
Paper Notes and its Liquidity Banks.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
BORROWER:
INTERIM SERVICES RECEIVABLES CORP.
By: __________________________________
Name: Shannon C. Allen
Title: Vice President and Treasurer
SERVICER:
INTERIM SERVICES INC.
By: __________________________________
Name: Shannon C. Allen
Title: Vice President and Treasurer
AGENTS:
WACHOVIA BANK, N.A., as Collateral Agent and
Blue Ridge Agent
By: __________________________________
Name: Kevin McConnell
Title: Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO, as Falcon Agent
By: __________________________________
Name:
Title:
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LENDERS:
BLUE RIDGE ASSET FUNDING CORPORATION
BY: WACHOVIA BANK, N.A., ITS ATTORNEY-IN-FACT
By: __________________________________
Name: Victoria A. Dudley
Title: Senior Vice President
Initial Commitment: not applicable
Initial Percentage: not applicable
WACHOVIA BANK, N.A.
By: __________________________________
Name: Kevin McConnell
Title: Senior Vice President
Initial Commitment: $90,000,000
Initial Percentage: 60%
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FALCON ASSET SECURITIZATION CORPORATION
By: __________________________________
Name:
Title:
Initial Commitment: not applicable
Initial Percentage: not applicable
THE FIRST NATIONAL BANK OF CHICAGO
By: __________________________________
Name:
Title:
Initial Commitment: $60,000,000
Initial Percentage: 40%
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ANNEX A
DEFINITIONS
A. CERTAIN DEFINED TERMS. As used in this Agreement:
"ACCOUNT" shall have the meaning specified in Section 9-106 of
the UCC.
"ADJUSTED DILUTION RATIO" at any time means the 12-month
rolling average of the Dilution Ratio for the 12 Settlement Periods then most
recently ended.
"ADVANCE" means a borrowing hereunder consisting of the
aggregate amount of the several Loans made on the same Borrowing Date.
"AFFECTED PARTY" means each of the Lenders, the Agents and the
Liquidity Banks.
"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another Person if
the controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, membership interests, by contract,
or otherwise.
"AFFILIATED OBLIGOR" in relation to any Obligor means an
Obligor that is an Affiliate of such Obligor.
"AGENTS" means the Collateral Agent and the Co-Agents.
"AGGREGATE COMMITMENT" means the aggregate of the Commitments
of the Liquidity Banks, as reduced or increased from time to time pursuant to
the terms hereof.
"AGREEMENT" means this Credit and Security Agreement, as it
may be amended or modified and in effect from time to time.
"ALTERNATE BASE RATE" means for any day, the rate per annum
equal to the higher as of such day of (i) the Base Rate, or (ii) one-half of one
percent (0.50%) above the Federal Funds Rate. For purposes of determining the
Alternate Base Rate for any day, changes in the Prime Rate or the Federal Funds
Rate shall be effective on the date of each such change. The Alternate Base Rate
is not necessarily intended to be the lowest rate of interest determined by
Wachovia in connection with extensions of credit.
"ALTERNATE BASE RATE LOAN" means a Loan which bears interest
at the Alternate Base Rate or the Default Rate.
"APPLICABLE REBILLS" means (a) at all times prior to the date,
if any, when the Servicer is able to link rebilled Invoices to the original
Invoice by number, Rebills, and (b) at all
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times from and after the date, if any, when the Servicer is able to link
rebilled Invoices to the original Invoice by number, Net Rebills.
"ARTICLE" means an article of this Agreement unless another
document is specifically referenced.
"AUTHORIZED OFFICER" means: (a) with respect to Interim
Services Inc., any of its Chairman/President/CEO, Executive Vice President/CFO,
Vice President and Treasurer, Assistant Treasurer or Senior Vice
President/Secretary, acting singly, (b) with respect to each of Interim Services
Atlantic LLC and Interim Services Pacific LLC, any of its President/CEO,
Executive Vice President/CFO, Vice President and Treasurer, Assistant Treasurer
or Secretary, acting singly, (c) with respect to Interim Assessment Services
Inc. (F/K/A HR Easy), any of its CEO, Executive Vice President, Treasurer or
Secretary, acting singly, (d) with respect to Saratoga Institute, any of its
Director, Executive Vice President/CFO, Vice President and Treasurer, Assistant
Treasurer or Secretary, acting singly, (e) with respect to Michael Page
International Inc., any of its Chairman, Executive Vice President/CFO, Vice
President and Treasurer, Assistant Treasurer or Secretary, acting singly, and
(f) with respect to Interim Services Receivables Corp., any of its President,
Executive Vice President/CFO, Vice President/Treasurer, Assistant Treasurer or
Secretary, acting singly.
"BASE RATE" means (a) with respect to Blue Ridge and its
Liquidity Banks, the Prime Rate, and (b) with respect to Falcon and its
Liquidity Banks, the Corporate Base Rate.
"BLUE RIDGE" has the meaning provided in the preamble of this
Agreement.
"BLUE RIDGE AGENT" has the meaning provided in the preamble of
this Agreement.
"BLUE RIDGE ALLOCATION LIMIT" has the meaning set forth in
SECTION 1.1(a).
"BLUE RIDGE FEE LETTER" means that certain Blue Ridge Fee
Letter dated as of July 1, 1999 by and among INTERIM SERVICES, the Borrower,
Blue Ridge and Wachovia, as the Blue Ridge Agent and the Collateral Agent.
"BLUE RIDGE LIQUIDITY AGREEMENT" means the Liquidity Asset
Purchase Agreement dated as of the date hereof among Blue Ridge, the Blue Ridge
Agent, and the Liquidity Banks from time to time party thereto, as the same may
be amended, restated, supplemented, replaced or otherwise modified from time to
time.
"BORROWER" has the meaning provided in the preamble of this
Agreement.
"BORROWER INFORMATION" has the meaning set forth in SECTION
14.7(a).
"BORROWER INFORMATION PROVIDER" has the meaning set forth in
SECTION 14.7(a).
"BORROWING BASE" means, on any date of determination, the
amount determined by reference to the following formula:
[ (NPB - RR) - EDC ]
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WHERE:
NPB = the Net Pool Balance as of the most recent
Cut-Off Date;
RR = the Required Reserve as of the most recent
Cut-Off Date; and
EDC = Deemed Collections that have occurred since
the most recent Cut-Off Date to the extent
such Deemed Collections exceed the Dilution
Reserve.
"BORROWING DATE" means a date on which an Advance is made
hereunder.
"BORROWING REQUEST" is defined in Section 2.1.
"BUSINESS DAY" means any day on which banks are not authorized
or required to close in New York, New York, Chicago, Illinois, Atlanta, Georgia,
or Fort Lauderdale, Florida, and The Depository Trust Company of New York is
open for business, and, if the applicable Business Day relates to any
computation or payment to be made with respect to the Eurodollar Rate (Reserve
Adjusted), any day on which dealings in dollar deposits are carried on in the
London interbank market.
"CHANGE IN CONTROL" means:
(a) the failure of INTERIM SERVICES to own (directly or
through one or more wholly-owned Subsidiaries of INTERIM SERVICES) 100%
of the issued and outstanding shares of the capital stock (including
all warrants, options, conversion rights, and other rights to purchase
or convert into such stock) of the Borrower on a fully diluted basis;
or
(b) means (i) the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission under the
Exchange Act) of 20% or more of the outstanding shares of voting stock
of INTERIM SERVICES or (ii) during any period of up to 12 consecutive
months, commencing on the date of this Agreement, individuals who at
the beginning of such 12-month period were directors of INTERIM
SERVICES shall cease for any reason (other than the death, disability
or retirement of an officer of INTERIM SERVICES that is serving as a
director at such time so long as another officer of INTERIM SERVICES
replaces such Person as a director) to constitute a majority of the
Board of Directors of INTERIM SERVICES; PROVIDED, HOWEVER, that the
acquisition of voting stock of INTERIM SERVICES by the existing
shareholders of Norrell Corporation as a portion of the consideration
for INTERIM SERVICES' acquisition of Norrell Corporation and/or its
Subsidiaries shall not constitute a "Change of Control" for purposes of
the Transaction Documents.
"CO-AGENTS" has the meaning provided in the preamble of this
Agreement.
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"CODE" means the Internal Revenue Code of 1986, as the same
may be amended from time to time.
"COLLATERAL" has the meaning set forth in SECTION 9.1.
"COLLATERAL AGENT" has the meaning provided in the preamble of
this Agreement.
"COLLECTION ACCOUNT" has the meaning set forth in SECTION
7.1(i).
"COLLECTIONS" means, (a) with respect to any Receivable, all
funds which either (i) are received by the Borrower, any of the Originators or
the Servicer from or on behalf of the related Obligor in payment of any amounts
owed (including, without limitation, purchase prices, finance charges, interest
and all other charges) in respect of such Receivable, or applied to such amounts
owed by such Obligor (including, without limitation, insurance payments that the
Borrower, any Originator or the Servicer applies in the ordinary course of its
business to amounts owed in respect of such Receivable and net proceeds of sale
or other disposition of repossessed goods or other collateral or property of the
Obligor or any other party directly or indirectly liable for payment of such
Receivable and available to be applied thereon), or (ii) are Deemed Collections,
and (b) with respect to any Demand Advance, any payment of principal or interest
in respect thereof.
"COMMERCIAL PAPER NOTES" shall mean the commercial paper
promissory notes, if any, issued by or on behalf of Blue Ridge of Falcon or that
fund, any CP Rate Loan.
"COMMITMENT" means, for each of Wachovia and First Chicago,
its obligation to make Loans not exceeding the amount set forth opposite its
signature to the Agreement, as such amount may be modified from time to time
pursuant to the terms hereof.
"COMMITMENT INCREASE REQUEST" has the meaning set forth in
SECTION 1.7.
"COMMITMENT REDUCTION NOTICE" has the meaning set forth in
SECTION 1.6.
"CONDUITS" has the meaning provided in the preamble of this
Agreement.
"CONSTITUENTS" means, as to either Co-Agent, the Conduit
represented by it as specified in the preamble to this Agreement, and each of
such Conduit's Liquidity Banks.
"CONTRACT" means with respect to any Receivable, any
agreement, contract or other writing (other than, in each of the foregoing
cases, an Invoice) with respect to the provision of services by an Originator to
an Obligor.
"CONTRACT YEAR" means (i) initially, the period beginning on
July 1, 1999 and ending on June 29, 2000 and (ii) thereafter, each period
beginning on a Scheduled Termination Date and ending on the succeeding Scheduled
Termination Date.
"CONTRACTUAL OBLIGATION" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of
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or other instrument, document or agreement to which such Person is a party or by
which it or any of its property is bound.
"CORPORATE BASE RATE" means the rate of interest publicly
announced from time to time by First Chicago as its "corporate base rate." (The
"corporate base rate" is a rate set by First Chicago based upon various factors
including First Chicago's costs and desired return, general economic conditions
and other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate.) Any change in the
corporate base rate announced by First Chicago shall take effect at the opening
of business on the day specified in the public announcement of such change.
"CP RATE" shall mean:
(a) with respect to Blue Ridge for any CP Tranche Period, the
rate equivalent to the rate (or if more than one rate, the weighted
average of the rates) at which Commercial Paper Notes of Blue Ridge
having a term equal to such CP Tranche Period are sold plus (to the
extent not already deducted from the Principal Amount of such
Commercial Paper Notes) the amount of any placement agent or commercial
paper dealer fees incurred in connection with such sale and other costs
associated with funding small or odd-lot amounts; and
(b) with respect to Falcon for any CP Tranche Period, the rate
equivalent to the rate (or if more than one rate, the weighted average
of the rates) at which Commercial Paper Notes of Falcon having a term
equal to such CP Tranche Period are sold plus (to the extent not
already deducted from the Principal Amount of such Commercial Paper
Notes) the amount of any placement agent or commercial paper dealer
fees incurred in connection with such sale and other costs associated
with funding small or odd-lot amounts.
"CP RATE LOAN" means a Loan made by a Conduit which bears
interest at a CP Rate.
"CP TRANCHE PERIOD" shall mean, a period of 7 to 90 days
commencing on a Business Day selected by the Borrower (or by the Servicer on the
Borrower's behalf) and agreed to by the applicable Co-Agent pursuant to SECTION
2.2. If such CP Tranche Period would end on a day which is not a Business Day,
such CP Tranche Period shall end on the preceding Business Day.
"CREDIT AND COLLECTION POLICY" means those credit and
collection policies and practices of INTERIM SERVICES relating to Contracts
and/or Invoices and Receivables as in effect on the date of this Agreement, as
modified without violating Section 7.3(c), but subject to compliance with
applicable tariffs or state regulations in effect from time to time; PROVIDED
that if an Event of Default or an Unmatured Default has occurred, at the request
of any of the Agents, INTERIM SERVICES shall provide a detailed written summary
of the Credit and Collection Policy.
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"CUT-OFF DATE" means May 23, 1999 and the last day of each
accounting period of INTERIM SERVICES thereafter as reflected on SCHEDULE 1
hereto.
"DAYS SALES OUTSTANDING" or "DSO", means, as of any day, an
amount equal to the product of (x) 91, multiplied by (y) the amount obtained by
dividing (i) the aggregate outstanding balance of Receivables as of the most
recent Cut-Off Date, by (ii) the aggregate amount of Receivables created during
the three Settlement Periods including and immediately preceding such Cut-Off
Date.
"DEEMED COLLECTIONS" means Collections deemed received by the
Borrower under SECTION 3.4.
"DEFAULT HORIZON RATIO" at any time means the ratio (expressed
as a percentage) computed as of the Cut-Off Date for the next preceding
Settlement Period by dividing the aggregate sales generated during the most
recent four Settlement Periods by the aggregate Unpaid Balance of all Eligible
Receivables as of the most recent Cut-off Date.
"DEFAULT RATE" means a rate per annum equal to the sum of (i)
the Alternate Base Rate plus (ii) 2.00%, changing when and as the Alternate Base
Rate changes.
"DEFAULT RATIO" means, as of any Cut-Off Date, the ratio
(expressed as a percentage) computed by dividing (x) the total amount of
Receivables which became Defaulted Receivables during the Settlement Period that
includes such Cut-Off Date, by (y) the aggregate sales generated by the
Originators during the Settlement Period occurring four months prior to the
Settlement Period ending on such Cut-Off Date.
"DEFAULT TRIGGER RATIO" means, as of any Cut-Off Date, the
ratio (expressed as a percentage) computed by dividing (x) the total amount of
Receivables that are Defaulted Receivables as of such Cut-Off Date, by (y) the
aggregate sales generated by the Originators during the Settlement Period
occurring four months prior to the Settlement Period ending on such Cut-Off
Date.
"DEFAULTED RECEIVABLE" means a Receivable: (a) as to which any
payment, or part thereof, remains unpaid for more than 120 days from the
original due date for such payment; (b) as to which an Event of Bankruptcy has
occurred and remains continuing with respect to the Obligor thereof; (c) which
has been referred to an outside collection agency or attorney for collection, or
(d) which has been, or, consistent with the Credit and Collection Policy would
be, written off the Borrower's, any Originator's or the Servicer's books as
uncollectible.
"DELINQUENCY RATIO" at any time means the ratio (expressed as
a percentage) computed as of the Cut-Off Date for the next preceding Settlement
Period by dividing (x) the aggregate Unpaid Balance of all Receivables that are
Delinquent Receivables on such Cut-Off Date by (y) the aggregate Unpaid Balance
of Receivables on such Cut-Off Date.
"DELINQUENT RECEIVABLE" means a Receivable as to which any
payment, or part thereof, remains unpaid for 91-120 days from the original due
date for such payment.
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"DEMAND ADVANCE" means an advance made by the Borrower to
INTERIM SERVICES on any day during the Revolving Period other than a Settlement
Date on which no Event of Default or Unmatured Default exists and is continuing,
which advance (a) is payable upon demand, (b) is not evidenced by an instrument,
chattel paper or a certificated security, (c) bears interest at a market rate
determined by the Borrower and the Servicer from time to time, and (d) may not
be offset by INTERIM SERVICES against amounts due and owing from the Borrower to
INTERIM SERVICES under its Subordinated Note.
"DILUTION" means the amount of any reduction or cancellation
of the Unpaid Balance of a Receivable as described in SECTION 3.4(a).
"DILUTION HORIZON RATIO" means, on any date of determination,
an amount calculated by dividing (a) cumulative sales generated during the two
most recent Settlement Periods by (b) the aggregate Unpaid Balance of all
Eligible Receivables as of the most recent Cut-off Date.
"DILUTION RATIO" means a percentage equal to a fraction, the
numerator of which is the total amount of decreases in Unpaid Balances due to
Dilutions during the most recent Settlement Period, and the denominator of which
is the amount of sales generated during the Settlement Period one month prior to
the most recent Settlement Period.
"DILUTION RESERVE" means a percentage equal to the product of
(x) the sum of (i) 2.0 times the Adjusted Dilution Ratio, plus (ii) the Dilution
Volatility Component, multiplied by (y) the Dilution Horizon Ratio.
"DILUTION VOLATILITY COMPONENT" means an amount (expressed as
a percentage) equal to the product of (i) the difference between (a) the highest
three-month rolling average Dilution Ratio over the past 12 Settlement Periods
and (b) the Adjusted Dilution Ratio, and (ii) a fraction, the numerator of which
is equal to the amount calculated in (i)(a) of this definition and the
denominator of which is equal to the amount calculated in (i)(b) of this
definition.
"DOLLARS" means dollars in lawful money of the United States
of America.
"DOWNGRADED LIQUIDITY BANK" means a Liquidity Bank which has
been the subject of a Downgrading Event.
"DOWNGRADING EVENT" with respect to any Person means the
lowering of the rating with regard to the short-term securities of such Person
to below (i) A-1 by S&P, or (ii) P-1 by Moody's.
"ELIGIBLE ASSIGNEE" means (a) any "bankruptcy remote" special
purpose entity which is administered by Wachovia or First Chicago (or any
Affiliate of the foregoing) that is in the business of acquiring or financing
receivables, securities and/or other financial assets and which issues
commercial paper notes that are rated at least A-1 by S&P and P-1 by Moody's,
(b) any Qualifying Liquidity Bank having a combined capital and surplus of at
least $250,000,000, or (c) any Downgraded Liquidity Bank whose liquidity
commitment has been fully drawn by the applicable Conduit or its Co-Agent and
funded into a collateral account.
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"ELIGIBLE ORIGINATOR" means each of (a) INTERIM SERVICES, (b)
each of Interim Services Atlantic LLC, a Delaware limited liability company,
Interim Services Pacific LLC, a Delaware limited liability company, Interim
Assessment Services Inc. (f/k/a HR Easy Inc.), a North Carolina corporation,
Saratoga Institute Inc., a California corporation, and Michael Page
International Inc., a Delaware corporation, so long as they are direct or
indirect wholly-owned Subsidiaries of INTERIM SERVICES, and (c) each of the
other direct or indirect, wholly-owned Subsidiaries of INTERIM SERVICES who
(with the consent of the Co-Agents if such Subsidiary constitutes a Material
Proposed Addition) becomes a "seller" party to the Sale Agreement by executing a
Joinder Agreement and complying with the conditions set forth in Article V of
the Sale Agreement.
"ELIGIBLE RECEIVABLE" means, at any time, a Receivable:
(a) which is a Receivable arising out of the sale of services
by an Eligible Originator in the ordinary course of its business that
has been sold to the Borrower pursuant to the Sale Agreement in a "true
sale" transaction;
(b) as to which the perfection of the Collateral Agent's
security interest, on behalf of the Secured Parties, is governed by the
laws of a jurisdiction where the Uniform Commercial Code-Secured
Transactions is in force, and which constitutes an "account" or a
"general intangible" as defined in the Uniform Commercial Code as in
effect in such jurisdiction;
(c) the Obligor of which is resident of the United States or
any of its possessions or territories, and is not (i) an Affiliate of
any Loan Party, or (ii) a Governmental Authority as to which the
assignment of receivables owing therefrom requires compliance with the
Federal Assignment of Claims Act or other similar legislation (unless
the Borrower has complied therewith); PROVIDED, HOWEVER, that the
Borrower shall not be required to comply with the Federal Assignment of
Claims Act or other similar legislation so long as the aggregate amount
of Receivables of the type described in this clause (c)(ii) does not
exceed 2.5% of the aggregate Outstanding Balance of all Eligible
Receivables as of the last day of any Settlement Period;
(d) which is not a Defaulted Receivable or a Delinquent
Receivable at such time;
(e) with regard to which the representations and warranties of
the Borrower in SECTIONS 6.1(j), (l) and (p) are true and correct;
(f) the granting of a security interest therein does not
contravene or conflict with any law;
(g) which is denominated and payable only in Dollars in the
United States;
(h) which arises under a Contract and is evidenced by an
Invoice , in each case that has been duly authorized and that, together
with such Receivable, is in
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full force and effect and constitutes the legal, valid and binding
obligation of the Obligor of such Receivable enforceable against such
Obligor in accordance with its terms and is not subject to any dispute,
offset (except as provided below), counterclaim or defense whatsoever;
PROVIDED, HOWEVER, that if such dispute, offset, counterclaim or
defense affects only a portion of the Unpaid Balance of such
Receivable, then such Receivable may be deemed an Eligible Receivable
to the extent of the portion of such Unpaid Balance which is not so
affected, and PROVIDED, further, that (x) Receivables of any Obligor
which has any accounts payable by the applicable Originator or by a
wholly-owned Subsidiary of such Originator (thus giving rise to a
potential offset against such Receivables) may be treated as Eligible
Receivables to the extent that the Obligor of such Receivables has
agreed pursuant to a written agreement in form and substance
satisfactory to the Administrative Agent, that such Receivables shall
not be subject to such offset, and (y) unless and until either of the
Co-Agents notifies the other Co-Agent and the Borrower to the contrary,
the potential right of Dell Computer Corporation or IBM Corporation to
offset against such Receivables shall not constitute a reduction in the
portion thereof that will be deemed to be eligible unless Dell Computer
Corporation or IBM Corporation, as the case may be, has effected such
offset or notified the applicable Originator or its wholly-owned
Subsidiary that it intends to offset unless paid amounts owed to it;
(i) which, together with the Contract and/or Invoice related
thereto, does not contravene in any material respect any laws, rules or
regulations applicable thereto (including, without limitation, laws,
rules and regulations relating to usury, truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which no party to
the Contract and/or Invoice related thereto is in violation of any such
law, rule or regulation in any material respect if such violation would
impair the collectibility of such Receivable;
(j) which satisfies in all material respects all applicable
requirements of the applicable Eligible Originator's Credit and
Collection Policy;
(k) which, according to the Contract and/or Invoice related
thereto, is due and payable within 30 days from the invoice date of
such Receivable;
(l) the original term of which has not been extended (except
as permitted in SECTION 8.2(c)); and
(m) if the applicable Eligible Originator acquired such
Receivable through a Material Acquisition requiring a Review, the
Co-Agents have notified the Borrower in writing that such Receivable
(and other similarly-acquired Receivables) are acceptable to the
Co-Agents based on the satisfactory outcome of such Review.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any rule or regulation issued
thereunder.
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"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with INTERIM SERVICES within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by INTERIM SERVICES or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it was
a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by INTERIM SERVICES or
any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to
terminate, the treatment of a Plan amendment as a termination under Section 4041
or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or Multiemployer Plan; or (f) the imposition of any liability under Tide IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon INTERIM SERVICES or any ERISA Affiliate.
"EURODOLLAR BUSINESS DAY" means a day of the year as defined
in CLAUSE (I) of the definition of Business Day.
"EURODOLLAR LOAN" means a Loan which bears interest at the
applicable Eurodollar Rate.
"EURODOLLAR RATE" means, for any Interest Period, the rate per
annum determined on the basis of the offered rate for deposits in Dollars of
amounts equal or comparable to the principal amount of the related Liquidity
Funding offered for a term comparable to such Interest Period, which rates
appear on a Bloomberg L.P. terminal, displayed under the address "US0001M
(Index) Q (Go)" effective as of 11:00 A.M., London time, two Eurodollar Business
Days prior to the first day of such Interest Period, PROVIDED that if no such
offered rates appear on such page, the Eurodollar Rate for such Interest Period
will be the arithmetic average (rounded upwards, if necessary, to the next
higher 1/100th of 1%) of rates quoted by not less than two major banks in New
York City, selected by the Co-Agents, at approximately 10:00 A.M., New York City
time, two Eurodollar Business Days prior to the first day of such Interest
Period, for deposits in Dollars offered by leading European banks for a period
comparable to such Interest Period in an amount comparable to the principal
amount of such Liquidity Funding.
"EURODOLLAR RATE (RESERVE ADJUSTED)" applicable to any
Interest Period means a rate PER ANNUM equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100th of 1%) by DIVIDING (i) the
applicable Eurodollar Rate for such Interest Period by (ii) 1.00 MINUS the
Eurodollar Reserve Percentage.
"EURODOLLAR RESERVE PERCENTAGE" shall mean, with respect to
any Interest Period, the maximum reserve percentage, if any, applicable to a
Liquidity Bank under Regulation D during such Interest Period (or if more than
one percentage shall be applicable, the daily average
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of such percentages for those days in such Interest Period during which any such
percentage shall be applicable) for determining such Liquidity Bank's reserve
requirement (including any marginal, supplemental or emergency reserves) with
respect to liabilities or assets having a term comparable to such Interest
Period consisting or included in the computation of "Eurocurrency Liabilities"
pursuant to Regulation D. Without limiting the effect of the foregoing, the
Eurodollar Reserve Percentage shall reflect any other reserves required to be
maintained by such Liquidity Bank by reason of any Regulatory Change against (a)
any category of liabilities which includes deposits by reference to which the
"London Interbank Offered Rate" or "LIBOR" is to be determined or (b) any
category of extensions of credit or other assets which include LIBOR-based
credits or assets.
"EVENT OF DEFAULT" means an event described in SECTION 10.1.
"EVENT OF BANKRUPTCY" shall be deemed to have occurred with
respect to a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up,
or composition or readjustment of debts of such Person, the appointment
of a trustee, receiver, custodian, liquidator, assignee, sequestrator
or the like for such Person or all or substantially all of its assets,
or any similar action with respect to such Person under any law
relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period of 60
consecutive days; or an order for relief in respect of such Person
shall be entered in an involuntary case under the federal bankruptcy
laws or other similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization,
debt arrangement, dissolution or other similar law now or hereafter in
effect, or shall consent to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian, sequestrator (or
other similar official) for, such Person or for any substantial part of
its property, or shall make any general assignment for the benefit of
creditors, or shall be adjudicated insolvent, or admit in writing its
inability to, pay its debts generally as they become due, or, if a
corporation or similar entity, its board of directors shall vote to
implement any of the foregoing.
"EXCESS CONCENTRATION AMOUNT" means, as of any date, the sum
of the amounts by which the aggregate Unpaid Balance of Receivables of each
Obligor exceeds the Obligor Concentration Limit for such Obligor.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXHIBIT" refers to an exhibit to this Agreement, unless
another document is specifically referenced.
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"EXTENSION REQUEST" has the meaning set forth in SECTION 1.8.
"FACILITY FEE" has the meaning set forth in the Fee Letters.
"FALCON" has the meaning provided in the preamble of this
Agreement.
"FALCON AGENT" has the meaning provided in the preamble of
this Agreement.
"FALCON ALLOCATION LIMIT" has the meaning set forth in SECTION
1.1(b).
"FALCON FEE LETTER" means that certain Falcon Fee Letter dated
as of July 1, 1999 by and among INTERIM SERVICES, the Borrower, Falcon and First
Chicago, as the Falcon Agent.
"FALCON LIQUIDITY AGREEMENT" means the Liquidity Asset
Purchase Agreement dated as of the date hereof among Falcon, the Falcon Agent,
and the Liquidity Banks from time to time party thereto, as the same may be
amended, restated, supplemented, replaced or otherwise modified from time to
time.
"FEDERAL FUNDS RATE" means, for any day, the rate PER ANNUM
(rounded upwards, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, PROVIDED THAT (i) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to the applicable Co-Agent on such day on such transactions, as
reasonably determined by such Co-Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the
Federal Reserve System, or any successor thereto or to the functions thereof.
"FEE LETTERS" means, collectively, the Blue Ridge Fee Letter
and the Falcon Fee Letter.
"FINAL PAYOUT DATE" means the date following the Termination
Date on which the Obligations have been paid in full.
"FIRST CHICAGO" has the meaning provided in the preamble of
this Agreement.
"FIRST CHICAGO ROLES" has the meaning set forth in SECTION
11.10(b).
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting 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 accounting profession, which are applicable to the
circumstances as of the date of determination.
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"GENERAL INTANGIBLE" shall have the meaning specified in
Section 9-105 of the UCC.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"GUARANTEE" of or by any Person means any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the "PRIMARY
OBLIGOR") in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital
or other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Indebtedness; PROVIDED HOWEVER that
the term Guarantee shall not include endorsements for collection or deposit, in
either case, in the ordinary course of business.
"INDEBTEDNESS" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (e) all obligations of such Person
issued or assumed as the deferred purchase price of property or services (other
than trade payables incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, but limited, if such obligations are without
recourse to such Person, to the lesser of the principal amount of such
Indebtedness or the fair market value of such property, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations of such Person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest or
exchange rate hedging arrangements (the amount of any such obligation to be the
amount that would be payable upon the acceleration, termination or liquidation
thereof) and (j) all obligations of such Person as an account party in respect
of letters of credit and bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any partnership in which such Person is a
general partner.
"INDEMNIFIED AMOUNTS" has the meaning set forth in SECTION
13.1(a).
"INDEMNIFIED PARTY" has the meaning set forth in SECTION
13.1(a).
"INDEPENDENT DIRECTOR" has the meaning set forth in SECTION
7.4(ii).
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"INFORMATION PACKAGE" has the meaning set forth in SECTION
3.1.
"INITIAL DUE DILIGENCE AUDITOR" means Arthur Andersen, LLP.
"INTEREST PAYMENT DATE" means:
(a) with respect to any CP Rate Loan, the last day of its CP
Tranche Period, the date on which any such Loan is prepaid, in whole or
in part, and the Termination Date;
(b) with respect to any Eurodollar Loan, the last day of its
Interest Period, the date on which any such Loan is prepaid, in whole
or in part, and the Termination Date;
(c) with respect to any Alternate Base Rate Loan, each
Settlement Date while such Loan remains outstanding, the date on which
any such Loan is prepaid, in whole or in part, and the Termination
Date; and
(d) with respect to any Loan while the Default Rate is
applicable thereto, upon demand or, in the absence of any such demand,
each Settlement Date while such Loan remains outstanding, the date on
which any such Loan is prepaid, in whole or in part, and the
Termination Date.
"INTEREST PERIOD" means, with respect to a Eurodollar Loan, a
period not to exceed three months commencing on a Business Day selected by the
Borrower (or the Servicer on the Borrower's behalf) pursuant to this Agreement
and agreed to by the applicable Co-Agent. Such Interest Period shall end on the
day which corresponds numerically to such date one, two, or three months
thereafter, PROVIDED, HOWEVER, that (i) if there is no such numerically
corresponding day in such next, second or third succeeding month, such Interest
Period shall end on the last Business Day of such next, second or third
succeeding month, and (ii) if an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day unless said next succeeding Business Day falls in a new
calendar month, then such Interest Period shall end on the immediately preceding
Business Day.
"INTEREST RATE" means a Eurodollar Rate (Reserve Adjusted), a
CP Rate, an Alternate Base Rate or the Default Rate.
"INTEREST RESERVE" shall mean, on any date of determination,
1.5 TIMES the Alternate Base Rate MULTIPLIED by a fraction the numerator of
which is the 12-month high Days Sales Outstanding and the denominator of which
is 360.
"INTERIM SERVICES" has the meaning set forth in the preamble
of this Agreement.
"INVOICE" means, collectively, with respect to any Receivable:
(i) any paper or electronic bill, statement or invoice for services rendered by
an Originator to an Obligor, and (ii)
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any instrument or chattel paper now or hereafter evidencing all or any portion
of the same, but in all instances excluding Contracts and/or Invoices.
"JOINDER AGREEMENT" has the meaning set forth in the Sale
Agreement.
"LENDERS" means Blue Ridge, Falcon, First Chicago, Wachovia
and their respective successors and permitted assigns.
"LIEN" means any security interest, lien, encumbrance, pledge,
assignment, title retention, similar claim, right or interest.
"LIQUIDITY AGREEMENTS" means, collectively, the Blue Ridge
Liquidity Agreement and the Falcon Liquidity Agreement.
"LIQUIDITY BANK" means (a) with respect to Falcon, First
Chicago, (b) with respect to Blue Ridge, Wachovia, and (c) any Eligible Assignee
of First Chicago's Commitment hereunder and under Falcon's Liquidity Agreement
or Wachovia's Commitment hereunder and under Blue Ridge's Liquidity Agreement,
in each case, to which the Borrower has consented if required under SECTION
12.1. A Liquidity Bank will become a "LENDER" hereunder at such time as it makes
any Liquidity Funding.
"LIQUIDITY COMMITMENT" means, with respect to each Liquidity
Bank, its commitment to make Liquidity Fundings pursuant to the Liquidity
Agreement to which it is a party.
"LIQUIDITY FUNDING" means (a) a purchase made by any Liquidity
Bank pursuant to its Liquidity Commitment of all or any portion of a Conduit's
Loan, or (b) any Loan made by a Conduit's Liquidity Banks in lieu of such
Conduit pursuant to SECTION 1.1.
"LIQUIDITY TERMINATION DATE" means the earlier to occur of the
following:
(a) the date on which either Conduit's Liquidity Banks'
commitments pursuant to such Conduit's Liquidity Agreement expire,
cease to be available to such Conduit or otherwise cease to be in full
force and effect; or
(b) the date on which a Downgrading Event with respect to a
Liquidity Bank shall have occurred and been continuing for not less
than 30 days, and either (i) the Downgraded Liquidity Bank shall not
have been replaced by a Qualifying Liquidity Bank pursuant to the
Applicable Liquidity Agreement, or (ii) the commitment of such
Downgraded Liquidity Bank under a Liquidity Agreement shall not have
been funded or collateralized in such a manner that will avoid a
reduction in or withdrawal of the credit rating applied to the
Commercial Paper Notes to which such Liquidity Agreement applies by any
of the rating agencies then rating such Commercial Paper Notes.
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"LOAN" means any loan made by a Lender to the Borrower
pursuant to this Agreement. Each Loan shall either be a CP Rate Loan, an
Alternate Base Rate Loan or a Eurodollar Rate Loan, selected in accordance with
the terms of this Agreement.
"LOAN PARTIES" means, collectively, (i) the Borrower, and (ii)
INTERIM SERVICES.
"LOCK-BOX" has the meaning set forth in the Lock-Box
Agreements.
"LOCK-BOX ACCOUNT" means any bank account of the Borrower or
the Collateral Agent into which Collections are deposited or transferred and
which is subject to a Lock-Box Agreement.
"LOCK-BOX AGREEMENT" means a letter agreement, in
substantially the form of EXHIBIT A (or as otherwise approved by the Collateral
Agent), among an Originator, the Borrower, the Collateral Agent and a Lock-Box
Bank.
"LOCK-BOX BANK" means any of the banks holding one or more
lock-boxes, blocked accounts or Lock-Box Accounts receiving Collections from
Receivables.
"LOSS RESERVE" as of any Cut-Off Date means a percentage equal
to the greater of (a) 10% and (b) the product of (i) 2.0 times the highest
three-month rolling average Default Ratio during the most recent 12 Settlement
Periods and (ii) the Default Horizon Ratio.
"MATERIAL ACQUISITION" means that any existing Originator
acquires the receivables originated by one or more other Persons who are not
existing Eligible Originators, whether by purchase, merger, consolidation or
otherwise, if the aggregate amount of receivables so acquired from any one such
Person exceeds $10 million or the aggregate amount of receivables so acquired
from all such Persons in any Contract Year exceeds $25 million.
"MATERIAL ADVERSE EFFECT" means:
(i) a material adverse change in, or a material adverse effect
upon (A) the operations, business, properties, condition (financial or
otherwise) or prospects of INTERIM SERVICES and its Subsidiaries taken
as a whole, or (B) the Borrower's assets or financial condition;
(ii) a material impairment of the ability of any Loan Party to
perform under any Transaction Document or to avoid or cure, as
applicable, any Unmatured Default or Event of Default;
(iii) a material adverse effect upon the legality, validity,
binding effect or enforceability against any Loan Party of any
Transaction Document;
(iv) a material adverse effect upon the validity,
enforceability or collectibility of a material portion of the
Receivables; or
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(v) a material adverse effect upon the validity, perfection,
priority or enforceability of the Borrower's title to -- or the
Collateral Agent's security interest, on behalf of the Secured Parties,
in -- the Collateral.
"MATERIAL PROPOSED ADDITION" means a Person (other than
Norrell Corporation and its Subsidiaries or a successor thereto) whom the
Borrower or INTERIM SERVICES proposes to add as a "seller" under the Sale
Agreement if either (i) such Person's receivables (on the proposal date) exceed
$10 million in the aggregate, or (ii) such Person's receivables (on such
proposal date), when aggregated with the receivables of all other Persons added
as "sellers" under the Sale Agreement in the same Contract Year (measured on the
respective dates such other Persons became "sellers" under the Sale Agreement)
exceed $25 million in the aggregate.
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which INTERIM SERVICES or any ERISA
Affiliate makes, is making, or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated to make,
contributions.
"NET POOL BALANCE" means, at any time, an amount equal to (i)
the aggregate Unpaid Balance of all Eligible Receivables at such time, MINUS
(ii) the Excess Concentration Amount at such time.
"NET REBILLS" means, for any Settlement Period, the aggregate
amount of increases in Invoice amounts due to Rebills minus the aggregate amount
of decreases in Invoice amounts due to Rebills.
"OBLIGATIONS" means all unpaid principal of and accrued and
unpaid interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
(or any Lender), the Agents (or any Agent) or any Indemnified Party arising
under the Transaction Documents.
"OBLIGOR" means a Person obligated to make payments with
respect to a Receivable, including any guarantor thereof.
"OBLIGOR CONCENTRATION LIMIT" means, at any time, in relation
to the aggregate Unpaid Balance of Receivables owed by any single Obligor and
its Affiliated Obligors (if any), the lesser of (a) one-third of the Loss
Reserve, or (b) the applicable concentration limit shall (unless BOTH Co-Agents
agree, from time to time upon the Borrower's request, to a higher percentage of
Eligible Receivables for a particular Obligor and its Affiliates) be determined
as follows for Obligors who have a short term unsecured debt rating currently
assigned to them by either S&P or Moody's, the applicable concentration limit
shall be determined according to the following table (and, if such Obligor is
rated by both agencies and has a split rating, the applicable rating will be the
lower of the two):
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<TABLE>
<CAPTION>
---------------------------------- ----------------------------- ------------------------------
Allowable % of Eligible
S&P Rating Moody's Rating Receivables
---------------------------------- ----------------------------- ------------------------------
<S> <C> <C>
A-1+ 10%
---------------------------------- ----------------------------- ------------------------------
A-1 P-1 8%
---------------------------------- ----------------------------- ------------------------------
A-2 P-2 6%
---------------------------------- ----------------------------- ------------------------------
A-3 P-3 3%
---------------------------------- ----------------------------- ------------------------------
Below A-3 or Not Rated Below P-3 or Not Rated 2%
---------------------------------- ----------------------------- ------------------------------
</TABLE>
PROVIDED, HOWEVER, that unless and until either Co-Agent gives the Borrower 5
Business Days' notice to the contrary, the Obligor Concentration Limit for IBM
Corporation and its Affiliated Obligors shall be 9% of Eligible Receivables .
"ORIGINATOR" means any of INTERIM SERVICES or any its direct
or indirect wholly-owned Subsidiaries who is or becomes a "seller" under the
Sale Agreement.
"PAYMENT INTANGIBLE" means a "general intangible for money due
or to become due" as such phrase is used in Section 9-318(4) of the UCC.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PENSION PLAN" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which INTERIM SERVICES sponsors or
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any time during the
immediately preceding five plan years.
"PERCENTAGE" means (a) with respect to Blue Ridge and its
Liquidity Banks in the aggregate, 60%, and (b) with respect to Falcon and its
Liquidity Banks in the aggregate, 40%, as the foregoing percentages may be
adjusted from time to time pursuant to SECTION 1.7.
"PERMITTED RESTRUCTURING" means any merger, consolidation or
similar combination of an Originator (i) with another Originator, and/or (ii)
with and into a newly formed entity that is (A) domiciled in the United States
of America, and (B) wholly-owned, directly or indirectly, by INTERIM SERVICES,
with no assets (other than its initial paid-in capital) and no liabilities
(other than minimal organization costs) for the purpose of changing its legal
form from a corporation, partnership or limited liability company domiciled in
one state of the United States to a corporation, partnership or limited
liability company domiciled in another state, from a corporation to a
partnership or limited liability company, from a partnership to a corporation or
limited liability company, or from a limited liability company to a partnership
or corporation, as the case may be, and/or (iii) with any other Person to whom
each of the Co-Agents gives its prior written consent, SO LONG AS: (1) the
successor or surviving entity unconditionally assumes such Originator's (or
Originators') respective obligations under the Transaction Documents to which it
is (or they are) a party immediately prior to giving effect to
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such combination, (2) prior to the effectiveness of such combination, all UCC
financing statements necessary to maintain the validity, perfection and priority
of the Borrower's ownership interest in the Receivables and Related Rights (as
defined in the Sale Agreement) acquired or to be acquired from such Originator
or Originators under the Sale Agreement, and the Collateral Agent's security
interest therein, have been duly executed and filed in all necessary
jurisdictions, and (3) if the surviving entity in such combination(s) is not an
existing party to the Sale Agreement, all other documents required to be
delivered in connection with a Joinder Agreement under the Sale Agreement have
been duly executed and delivered substantially contemporaneously with such
combination(s).
"PERSON" means any natural Person, corporation, firm, joint
venture, partnership, limited liability company, association, enterprise, trust
or other entity or organization, or any government or political subdivision or
any agency, department or instrumentality thereof.
"PLAN" means an employee benefit plan (as defined in Section
3(3) of ERISA) which a Loan Party sponsors or maintains or to which a Loan Party
makes, is making, or is obligated to make contributions and includes any Pension
Plan, other than a Plan maintained outside the United States primarily for the
benefit of Persons who are not U.S. residents.
"PREPAYMENT NOTICE" has the meaning set forth in SECTION
1.5(a).
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by Wachovia as its "prime rate." (The "prime rate"
is a rate set by Wachovia based upon various factors including Wachovia's costs
and desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above, or
below such announced rate.) Any change in the prime rate announced by Wachovia
shall take effect at the opening of business on the day specified in the public
announcement of such change.
"PRINCIPAL AMOUNT" means the actual net cash proceeds received
by a Conduit upon issuance of a Commercial Paper Note.
"PROGRAM INFORMATION" has the meaning set forth in SECTION
14.8.
"PROPERTY" of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person.
"QUALIFYING LIQUIDITY BANK" means a Liquidity Bank with a
rating of its short-term securities equal to or higher than (i) A-1 by S&P and
(ii) P-1 by Moody's.
"RATABLE SHARE" means with respect to any Liquidity Bank, the
ratio which its Commitment bears to the sum of the Commitments of all Liquidity
Banks for the same Conduit.
"REBILL" means, with respect to any Receivable, any
cancellation of the applicable Invoice and reissuance of a replacement Invoice
therefor.
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"RECEIVABLE" means any Account or any Payment Intangible
arising from the sale of professional services in the fields of information
technology, finance, law, manufacturing and human resources, as well as
clerical, administrative and light industrial staffing by an Originator,
including, without limitation, the right to payment of any interest or finance
charges and other amounts with respect thereto, which is sold to the Borrower
under the Sale Agreement. Rights to payment arising from any one transaction,
including, without limitation, rights to payment represented by an individual
Invoice, shall constitute a Receivable separate from a Receivable consisting of
the rights to payment arising from any other transaction; PROVIDED, HOWEVER,
that a Rebill shall not be deemed to be the creation of a new Receivable
(regardless of the invoice number assigned thereto) and shall instead be deemed
to be an amendment and restatement of the original Receivable and related
Invoice; and PROVIDED, FURTHER, that any right to payment referred to in the
immediately preceding sentence shall be a Receivable regardless of whether the
account debtor or the Borrower treats such right to payment as a separate
payment obligation.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"REGULATION U" means Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by banks for the purpose of purchasing or carrying
margin stocks applicable to member banks of the Federal Reserve System.
"REGULATORY CHANGE" shall mean any change after the date of
this Agreement in United States (federal, state or municipal) or foreign laws or
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives or requests applying to a class of banks
(including the Liquidity Banks) of or under any United States (federal, state or
municipal) or foreign, laws, or regulations (whether or not having the force of
law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"RELATED ASSETS" means (a) all rights to, but not any
obligations under, all related Invoices and all Related Security related to any
Receivables, (b) all rights and interests of the Borrower under the Sale
Agreement in relation to any Receivables, (c) all books and records evidencing
or otherwise relating to any Receivables, (d) the Collection Account (if any)
and all Lock-Box Accounts and all cash and instruments therein, to the extent
constituting or representing the items in the following clauses (e) and (f), (e)
all of the Borrower's rights to demand and receive payment in respect of any
Demand Advances, and (f) all Collections in respect of, and other proceeds of,
any Receivables or any other Related Assets.
"RELATED SECURITY" means, with respect to any Receivable, all
of the Borrower's right, title and interest in and to: (a) all Invoices that
relate to such Receivable; (b) all security deposits and other security
interests or liens and property subject thereto from time to time purporting to
secure payment of such Receivable, whether pursuant to the Contract and/or
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Invoice related to such Receivable or otherwise; (c) all UCC financing
statements covering any collateral securing payment of such Receivable; (d) all
guarantees and other agreements or arrangements of whatever character from time
to time supporting or securing payment of such Receivable whether pursuant to
the Invoice related to such Receivable or otherwise; and (e) all insurance
policies, and all claims thereunder, related to such Receivable, in each case to
the extent directly related to rights to payment, collection and enforcement,
and other rights with respect to such Receivable.
"REPORTABLE EVENT" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"REPORTING DATE" has the meaning set forth in SECTION 3.1(a).
"REQUIRED AMOUNTS" has the meaning set forth in SECTION 3.2.
"REQUIRED RESERVE" means, on any day during a Settlement
Period, an amount equal to the product of (A) the greater of (i) 9.79% and (ii)
the sum of (w) the Loss Reserve, (x) the Dilution Reserve, (y) the Interest
Reserve and (z) the Servicing Reserve TIMES (B) the Net Pool Balance on such
day.
"REQUIREMENT OF LAW" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or final, nonappealable
determination of an arbitrator or of a 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.
"RESPONSE DATE" has the meaning set forth in SECTION 1.8.
"RESPONSIBLE OFFICER" of any Person means any of its Chairman,
Chief Executive Officer, Chief Operating Officer, President, Chief Financial
Officer or Treasurer.
"REVIEW" has the meaning set forth in SECTION 7.1(c).
"REVOLVING PERIOD" means the period from and after the date of
the initial Advance under this Agreement to but excluding the Termination Date.
"S&P" means Standard and Poor's Ratings Services, a division
of The McGraw Hill Companies, Inc.
"SALE AGREEMENT" means the Receivables Sale Agreement dated as
of July 1, 1999 between the Originators, as sellers, and the Borrower, as
purchaser, as it may be amended, supplemented or otherwise modified in
accordance with SECTION 7.3(f).
"SCHEDULE" refers to a specific schedule to this Agreement,
unless another document is specifically referenced.
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"SCHEDULED TERMINATION DATE" means June 29, 2000, unless
extended by unanimous agreement of Blue Ridge, Falcon and their respective
Co-Agents and Liquidity Banks.
"SEC" means the Securities and Exchange Commission.
"SECTION" means a numbered section of this Agreement, unless
another document is specifically referenced.
"SECURED PARTIES" means the Agents, the Indemnified Parties
and the Affected Parties.
"SERVICER" has the meaning set forth in the preamble of this
Agreement.
"SERVICER TRANSFER EVENT" means the occurrence of any Event of
Default.
"SERVICER'S FEE" accrued for any day in a Settlement Period
means:
(a) an amount equal to (x) 1.0% PER ANNUM (or, at any time
while INTERIM SERVICES is the Servicer, such lesser percentage as may
be agreed between the Borrower and the Servicer on an arms' length
basis based on then prevailing market terms for similar services),
TIMES (y) the aggregate Unpaid Balance of the Receivables at the close
of business on the first day of such Settlement Period, TIMES (z)
1/360; or
(b) on and after the Servicer's reasonable request made at any
time when INTERIM SERVICES shall no longer be the Servicer, an
alternative amount specified by the Servicer not exceeding (x) 110% of
the Servicer's costs and expenses of performing its obligations under
the Agreement during the Settlement Period when such day occurs,
divided by (y) the number of days in such Settlement Period.
"SERVICING RESERVE" shall mean the product of 1.0% and a
fraction, the numerator of which is the highest Days Sales Outstanding
calculated for each of the most recent 12 Settlement Periods and the denominator
of which is 360.
"SETTLEMENT DATE" means (a) the second Business Day after each
Reporting Date, and such other Business Days as the Co-Agents may specify in a
written notice to the Co-Agents and the Loan Parties, and (b) the Termination
Date.
"SETTLEMENT PERIOD" means: (a) the period from and including
the date of the initial Advance to but excluding the next Cut-Off Date; and (b)
thereafter, each period from and including a Cut-Off Date to the earlier to
occur of the next Cut-Off Date or the Final Payout Date.
"SUBORDINATED LOAN" has the meaning set forth in the Sale
Agreement.
"SUBORDINATED NOTES" has the meaning set forth in the Sale
Agreement.
81
<PAGE> 89
"SUBSIDIARY" of any Person means (i) a corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned or controlled by such Person,
directly or indirectly through Subsidiaries, and (ii) any partnership,
association, joint venture or other entity in which such Person, directly or
indirectly through Subsidiaries, has more than a 50% equity interest at the
time.
"SUCCESSOR NOTICE" has the meaning set forth in SECTION
8.1(b).
"SUPPLEMENTAL SERVICER'S FEE" accrued for any day in a
Settlement Period means an amount not to exceed (x) 2.0% PER ANNUM, TIMES (y)
the aggregate Unpaid Balance of the Receivables at the close of business on the
first day of such Settlement Period, TIMES (z) 1/360, as agreed between the
Borrower and the Servicer from time to time.
"TERMINATION DATE" means the earliest to occur of:
(a) the Scheduled Termination Date;
(b) the Liquidity Termination Date;
(c) the date designated by the Borrower as the "Termination
Date" on not less than five (5) Business Days' notice to the Co-Agents,
PROVIDED that on such date the Obligations have been paid in full;
(d) the date specified in SECTION 10.2(a) or (b); or
(e) the date on which any one or more Originators whose
Receivables represent more than 50% of all Receivables being sold under
the Sale Agreement as of the Initial Closing Date (under and as defined
therein) cease(s) selling Receivables to the Borrower under the Sale
Agreement.
"TRANSACTION DOCUMENTS" means this Agreement, the Lock-Box
Agreements, the Sale Agreement, the Fee Letters, the Subordinated Notes and the
other documents to be executed and delivered in connection herewith.
"TRANSFEREE" is defined in SECTION 12.4.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the applicable jurisdiction or jurisdictions.
"UNMATURED DEFAULT" means an event which but for the lapse of
time or the giving of notice, or both, would constitute an Event of Default.
"UNPAID BALANCE" of any Receivable means at any time the
unpaid amount thereof, but EXCLUDING all late payment charges, delinquency
charges and extension or collection fees.
82
<PAGE> 90
"USAGE FEE" has the meaning set forth in each of the Fee
Letters.
"VOTING BLOCK" has the meaning set forth in SECTION 11.4.
"WACHOVIA" has the meaning set forth in the preamble of this
Agreement.
"WACHOVIA ROLES" has the meaning set forth in SECTION
11.10(a).
"YEAR 2000 COMPLIANT" has the meaning set forth in SECTION
6.1(q).
The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.
B. OTHER TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9.
C. COMPUTATION OF TIME PERIODS. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding".
83
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> DEC-26-1998
<PERIOD-END> SEP-24-1999
<CASH> 48,602
<SECURITIES> 0
<RECEIVABLES> 628,439
<ALLOWANCES> 17,119
<INVENTORY> 0
<CURRENT-ASSETS> 747,967
<PP&E> 212,039
<DEPRECIATION> 81,559
<TOTAL-ASSETS> 2,498,869
<CURRENT-LIABILITIES> 595,721
<BONDS> 0
0
0
<COMMON> 653
<OTHER-SE> 1,131,561
<TOTAL-LIABILITY-AND-EQUITY> 2,498,869
<SALES> 0
<TOTAL-REVENUES> 2,129,525
<CGS> 0
<TOTAL-COSTS> 1,406,811
<OTHER-EXPENSES> 47,843
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,522
<INCOME-PRETAX> 86,022
<INCOME-TAX> 37,946
<INCOME-CONTINUING> 48,076
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 48,076
<EPS-BASIC> 0.93
<EPS-DILUTED> 0.91
</TABLE>
