<PAGE>
EXHIBIT 10.42
AMENDMENT NO. 4 TO CREDIT AND SECURITY AGREEMENT AND AMENDMENT TO RELATED FEE
LETTERS
THIS AMENDMENT NO. 4 TO CREDIT AND SECURITY AGREEMENT AND
AMENDMENT TO RELATED FEE LETTERS (this "AMENDMENT") is entered into as of
July 31, 2000, by and among:
(1) SPHERION RECEIVABLES CORP., a Delaware corporation formerly known
as Interim Services Receivables Corp. (together with its successors and
permitted assigns, the "BORROWER"),
(2) SPHERION CORPORATION, a Delaware corporation formerly known as
Interim Services Inc. (together with its successors, "SPHERION"), as initial
servicer (in such capacity, 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"), WACHOVIA BANK,
N.A., a national banking association, in its capacity as a Liquidity Bank to
Blue Ridge (together with its successors, "WACHOVIA"), and BANK ONE, NA, a
national banking association having its main office in Chicago, Illinois and
formerly known as "The First National Bank of Chicago," in its capacity as a
Liquidity Bank to Falcon (together with its successors, "BANK ONE"), as Lenders,
(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
BANK ONE, NA [MAIN OFFICE 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"), with respect to that certain Credit and
Security Agreement dated as of July 1, 1999, by and among the Borrower, the
Servicer, the Lenders, the Co-Agents and the Collateral Agent (as previously
amended, the "EXISTING AGREEMENT" which, as amended hereby, is hereinafter
referred to as the "AGREEMENT") and the Fee Letters referenced therein (the
"EXISTING FEE LETTERS" which, as amended hereby, are hereinafter referred to as
the "FEE LETTERS").
UNLESS OTHERWISE INDICATED, CAPITALIZED TERMS USED IN THIS
AMENDMENT ARE USED WITH THE MEANINGS ATTRIBUTED THERETO IN THE EXISTING
AGREEMENT AND EXISTING FEE LETTERS.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Existing Agreement and
Existing Fee Letters as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto hereby agree as follows:
1. AMENDMENTS TO EXISTING AGREEMENT. Subject to the terms and
conditions hereinafter set forth, the parties hereby agree to amend the
Existing Agreement as follows:
1.1. All references in the Transaction Documents to "INTERIM
SERVICES" are hereby replaced with "SPHERION", and each of the names listed in
Column A in the table below is hereby replaced with the name opposite it set
forth in Column B in the table below:
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<TABLE>
<CAPTION>
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A B
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<S> <C>
INTERIM SERVICES INC., a Delaware SPHERION CORPORATION, a
corporation Delaware corporation
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INTERIM SERVICES RECEIVABLES CORP., a SPHERION RECEIVABLES CORP., a
Delaware corporation Delaware corporation
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INTERIM ATLANTIC ENTERPRISES LLC, a SPHERION ATLANTIC ENTERPRISES
Delaware limited liability company LLC, a Delaware limited
liability company
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INTERIM ASSESSMENT SERVICES INC., a SPHERION ASSESSMENT INC., a
North Carolina corporation (f/k/a HR North Carolina corporation
Easy, Inc.)
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INTERIM PACIFIC ENTERPRISES LLC, a SPHERION PACIFIC ENTERPRISES
Delaware limited liability company LLC, a Delaware limited
liability company
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INTERIM SERVICES ATLANTIC LLC, a SPHERION ATLANTIC LLC, a
Delaware limited liability company Delaware limited liability
company
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INTERIM SERVICES PACIFIC LLC, a SPHERION PACIFIC LLC, a
Delaware limited liability company Delaware limited liability
company
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</TABLE>
1.2. Clause (h) of the definition of "ELIGIBLE RECEIVABLE" in the
Existing Agreement is hereby amended to delete "Administrative Agent" where it
appears and to substitute in lieu thereof "Collateral Agent."
1.3. The following definitions are hereby amended and restated
in their entirety to read, respectively, as follows:
"LOSS RESERVE" as of any Cut-Off Date means a percentage equal to the
greater of (a) 10% and (b) the product of (i) 2.5 times the highest three-month
rolling average Default Ratio during the most recent 12 Settlement Periods and
(ii) the Default Horizon Ratio; PROVIDED, HOWEVER, that upon conducting a Review
that has results that are reasonably satisfactory to both Co-Agents, the 2.5
stress factor in the preceding clause (i) shall revert to 2.0.
"SCHEDULED TERMINATION DATE" means June 28, 2001, unless extended by
unanimous agreement of Blue Ridge, Falcon and their respective Co-Agents and
Liquidity Banks.
1.4. The last two (2) sentences of Section 7.1(c) of the Existing
Agreement are hereby amended and restated in their entirety to read as follows:
Notwithstanding the foregoing, if (1) any Loan Party requests the approval
of a new Eligible Originator who is a Material Proposed Addition, (2) any
Material Acquisition is consummated, (3) SPHERION fails to maintain an unsecured
long-term debt rating of at least "BBB-" from S&P, or (4) SPHERION fails to
maintain a bank loan debt rating of at least "Ba1" from Moody's (each of the
events described in clause (3) or this clause (4), a "PARENT DOWNGRADE"), the
Loan Parties shall be responsible for the costs and expenses of one additional
Review per proposed Material Proposed Addition, per Material Acquisition or per
Parent Downgrade in the Contract Year in which such Material Proposed Addition
is expected to occur, such Material Acquisition is expected to be consummated or
such Parent Downgrade occurs if such additional Review is requested by the
Co-Agents. In the event that SPHERION'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.
1.5. Section 10.2(a) of the Existing Agreement is hereby amended
and restated in its entirety to read as follows:
(a) OPTIONAL ACCELERATION. Upon (i) Wachovia's and/or Bank One's ceasing
to be a lender to
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SPHERION, (ii) Wachovia's and/or Bank One's failure to consent to any proposed
waiver of or amendment to any financial covenant contained in any credit
facility with SPHERION in which such bank participates as a lender or letter of
credit issuer, regardless of whether such waiver or amendment takes effect
without such bank's consent, or (iii) 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.
1.5. The Commitments of Wachovia and Bank One are hereby increased
to the amounts set forth opposite their respective signatures to this Amendment,
and the Aggregate Commitment is, accordingly, increased to $250,000,000.
2. AMENDMENTS TO EXISTING FEE LETTERS. Subject to the terms
and conditions hereinafter set forth, the parties hereby agree to amend the
Existing Fee Letters as follows:
2.1. The PER ANNUM rate at which the "USAGE FEE" referenced in each
of the Existing Fee Letters is computed is hereby increased by 3 basis points.
2.2. The PER ANNUM rate at which the "FACILITY FEE" referenced in
each of the Existing Fee Letters is computed is hereby increased by 5 basis
points.
3. REPRESENTATIONS.
3.1. Each of the Loan Parties represents and warrants to the Lenders
and the Agents that it has duly authorized, executed and delivered this
Amendment and that each of the Agreement and the Fee Letters constitutes, a
legal, valid and binding obligation of such Loan Party, 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).
3.2. Each of the Loan Parties further represents and warrants to the
Lenders and the Agents that each of its representations and warranties set forth
in Section 6.1 of the Agreement is true and correct as of the date hereof and
that no Event of Default or Unmatured Default exists as of the date hereof and
is continuing.
4. CONDITIONS PRECEDENT. This Amendment shall become effective as of
the date first above written upon receipt by the Collateral Agent of (a) a
counterpart hereof duly executed by each of the parties hereto, and (b) copies
of resolutions of each of the Loan Parties' respective boards of directors
authorizing their execution, delivery and performance of the Agreement and the
Fee Letters, in each case, certified by such Loan Party's secretary or assistant
secretary.
5. MISCELLANEOUS.
5.1. Except as expressly amended hereby, each of the Existing
Agreement and the Existing Fee Letters shall remain unaltered and in full force
and effect, and each of the parties hereby ratifies and confirms the Agreement,
the Fee Letters and each of the other Transaction Documents to which it is a
party.
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5.2. THIS AMENDMENT 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.
5.3. EACH LOAN PARTY HEREBY ACKNOWLEDGES AND AGREES THAT:
5.3.1. 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
THE AGREEMENT, AND (ii) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF AN ACTION OR
PROCEEDING IN SUCH COURTS.
5.3.2. 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 THE AGREEMENT OR THE FEE LETTERS.
5.4. This Amendment 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 Amendment.
< SIGNATURE PAGES FOLLOW >
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first above written.
BORROWER:
SPHERION RECEIVABLES CORP.
By: /s/ SHANNON C. ALLEN
-----------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
SERVICER:
SPHERION CORPORATION
By: /s/ SHANNON C. ALLEN
-----------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
BORROWER:
SPHERION RECEIVABLES CORP. [f/k/a/ INTERIM
SERVICES RECEIVABLES CORP.]
By: /s/ SHANNON C. ALLEN
-----------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
SERVICER:
SPHERION CORPORATION [f/k/a/INTERIM SERVICES
INC.]
By: /s/ SHANNON C. ALLEN
-----------------------------------
Name: Shannon C. Allen
Title: Vice President and Treasurer
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AGENTS:
WACHOVIA BANK, N.A., as Collateral Agent and
Blue Ridge Agent
By: /s/ FRANCES W. JOSEPHIC
-------------------------------
Name: Frances W. Josephic
Title: Vice President
BANK ONE, NA, as Falcon Agent
By: /s/ JULIE C. BENDA
-------------------------------
Name: Julie C. Benda
Title: Vice President
LENDERS:
BLUE RIDGE ASSET FUNDING CORPORATION
BY: WACHOVIA BANK, N.A., ITS ATTORNEY-IN-FACT
By: /s/ ELIZABETH R. WAGNER
-----------------------------------
Name: Elizabeth R. Wagner
Title: Vice President
Initial Commitment: not applicable
Initial Percentage: not applicable
WACHOVIA BANK, N.A.
By: /s/ FRANCES W. JOSEPHIC
-------------------------------
Name: Frances W. Josephic
Title: Vice President
Initial Commitment: $150,000,000
Initial Percentage: 60%
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FALCON ASSET SECURITIZATION CORPORATION
By: /s/ JULIE C. BENDA
-------------------------------
Name: Julie C. Benda
Title: Authorized Signatory
Initial Commitment: not applicable
Initial Percentage: not applicable
BANK ONE, NA
By: /s/ JULIE C. BENDA
-------------------------------
Name: Julie C. Benda
Title: Vice President
Initial Commitment: $100,000,000
Initial Percentage: 40%
