AMENDED AND RESTATED INTERCREDITOR AGREEMENT
AMONG
STATE STREET BANK AND TRUST COMPANY,
AS COLLATERAL AGENT,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT UNDER THE AMENDED AND RESTATED CREDIT AGREEMENT, AND
THE NOTEHOLDERS A PARTY HERETO
DATED AS OF APRIL 15, 2002
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
This AMENDED AND RESTATED INTERCREDITOR AGREEMENT (as amended,
restated, supplemented or otherwise modified from time to time, this
"AGREEMENT"), dated as of April 15, 2002, is among STATE STREET BANK AND TRUST
COMPANY as Collateral Agent (defined below), XXXXX FARGO BANK, NATIONAL
ASSOCIATION ("XXXXX FARGO"), as administrative agent under the Bank Credit
Agreement (defined below) (in such capacity, together with its successors and
assigns in such capacity, the "BANK AGENT"), for and on behalf of the financial
institutions which from time to time become a party to the Bank Credit Agreement
as lenders thereunder (including Xxxxx Fargo as a lender under the Bank Credit
Agreement, together with the successors and assigns of all such parties, the
"Banks") and EACH OF THE PERSONS ON ANNEX 1 ATTACHED HERETO (collectively,
together with their successors and assigns, and future holders from time to time
of the Senior Notes (defined below), the "NOTEHOLDERS"), and is acknowledged and
agreed by SOS STAFFING SERVICES, INC., a Utah corporation (the "COMPANY"), and
EACH OF THE GUARANTORS on the date hereof (defined below).
R E C I T A L S
WHEREAS, capitalized terms used herein have the meaning ascribed to
them in Section 1 hereof;
WHEREAS, the Company, the Bank Agent and the Banks have entered into
the Amended and Restated Credit Agreement, dated as of July 27, 1998 (as
previously amended, including, without limitation, on the date hereof, but as in
effect on the date hereof, the "BANK CREDIT AGREEMENT");
WHEREAS, pursuant to those separate Note Purchase Agreements, each
dated as of September 1, 1998 (as previously amended, including, without
limitation, on the date hereof, but as in effect on the date hereof, the "NOTE
PURCHASE AGREEMENTS"), the Company issued to the "Purchasers" (as defined
therein) $5,000,000 of its Senior Notes, Series A, due September 1, 2003 (as
amended, restated or otherwise modified from time to time, including, without
limitation, on the date hereof, the "SERIES A NOTES") and $30,000,000 of its
Senior Notes, Series B, due September 1, 2008 (as amended, restated or otherwise
modified from time to time, including, without limitation, on the date hereof,
the "SERIES B NOTES," and together with the Series A Notes, the "SENIOR NOTES");
WHEREAS, all obligations of the Company under the Bank Credit
Agreement, the Senior Notes and the Note Purchase Agreements have been
guaranteed by certain Subsidiaries and may be guaranteed from time to time by
certain other Subsidiaries as provided in the Financing Agreements (such
guarantors from time to time referred to as the "GUARANTORS" and such guaranties
from time to time referred to as the "GUARANTIES");
WHEREAS, the Bank Credit Obligations and the Senior Note Obligations
shall be secured PARI PASSU by all of the assets of the Company and the
Guarantors pursuant to the Security Documents;
WHEREAS, pursuant to that certain Intercreditor Agreement, dated as of
July 30, 2001 (the "EXISTING INTERCREDITOR AGREEMENT"), the Benefited Parties
appointed State Street Bank and Trust Company to act as the collateral agent (in
such capacity, together with its successors and assigns in such capacity, the
"COLLATERAL AGENT") on behalf of all Benefited Parties regarding the Collateral
and, among other things, further defined the rights, duties, authority and
responsibilities of the Collateral Agent and the relationship among the
Benefited Parties regarding their PARI PASSU interests in the Collateral and the
Guaranties, all as more fully provided therein; and
WHEREAS, the Bank Agent, the Banks and the Noteholders, being all of
the Benefited Parties under the Existing Intercreditor Agreement, have agreed to
amend and restate the Existing Intercreditor Agreement in its entirety as
provided herein;
WHEREAS, the Bank Agent, the Banks and the Noteholders have agreed
that payments received by them under certain circumstances in respect of the
Bank Credit Obligations and the Senior Note Obligations, whether from proceeds
or realization on the Collateral or otherwise, including certain payments from
the Company, payments under the Guaranties, or certain other payments, are to be
shared in accordance with the provisions hereof;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the Bank Agent, for itself and on behalf of the Banks, the
Noteholders and the Collateral Agent agree as follows:
1. DEFINED TERMS.
As used in this Agreement, and unless the context requires a different
meaning, the following terms have the respective meanings indicated below, all
such definitions to be equally applicable to the singular and plural forms of
the terms defined:
ABOVE-FORMULA BENEFITED PARTY - has the meaning ascribed to such term
in Section 5(b).
ACTUAL PRINCIPAL PERCENTAGE - means, for each Benefited Party on any
date after the Restructuring Date, a percentage equal to a fraction,
the numerator of which is equal to the principal amount of the
Benefited Obligations owing to such Benefited Party on such date and
the denominator of which is equal to the principal amount of the
Benefited Obligations owing to all Benefited Parties on such date,
including in determining the principal amount of the Benefited
Obligations constituting Bank Credit Obligations the amount available
for drawing under all outstanding Letters of Credit and unrepaid
drawings under Letters of Credit and excluding (i) from the
determination of the amount of the Benefited Obligations constituting
Bank Credit Obligations the amount equal to all Breakage Costs then
outstanding and (ii) from the determination of the amount of the
Benefited Obligations constituting Senior Note Obligations the
aggregate Make-Whole Amount then owed.
ADDITIONAL COMMITMENT REDUCTIONS - means the reductions in the
Aggregate Commitment (as defined in the Bank Credit Agreement) or the
commitment of the Banks to make Loans thereunder which are due to take
effect, subject to Section 4(a)(ii), on the Restructuring Date,
September 15, 2002 and December 15, 2002 in the amounts of $313,000,
$469,500 and $558,928.57, respectively.
ADDITIONAL REQUIRED PAYMENTS - means: (a) the principal payments due
under the Note Purchase Agreements on each of the Restructuring Date,
September 15, 2002 and December 15, 2002 in the amounts of $687,000,
$1,030,500 and $1,226,785.72, respectively, and (b) any principal
payment due under the Bank Credit Agreement on each of the
Restructuring Date, September 15, 2002 and December 15, 2002, which
payment shall be in such amount that the dollar amount of Bank Credit
Obligations on such dates does not exceed the Aggregate Commitment (as
defined in the Bank Credit Agreement) or the commitment of the Banks
to make Loans thereunder after giving effect to the Additional
Commitment Reduction on such date.
AFFECTED BENEFITED PARTY - has the meaning ascribed to such term in
Section 7.
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 such other Person, whether through the ownership of voting
securities or membership interests, by contract or otherwise.
AGREEMENT - has the meaning ascribed to such term in the introductory
paragraph.
AGGREGATE COMMITMENT - has the meaning ascribed to such term in the
Bank Credit Agreement.
ASSET DISPOSITION - means any Transfer except:
(a) any Transfer of cash, or inventory or other assets sold
in the ordinary course of the Company's or a Subsidiary's
business;
(b) any Transfer from a Subsidiary to the Company or a
Guarantor, or any Transfer among any one or more of the
Guarantors; or
(c) any Transfer arising in connection with the Company or
any Subsidiary entering into any sub-lease (where the Company or
a Subsidiary is the sub-lessor) of real property, which sub-lease
is entered into in the ordinary course of the Company or such
Subsidiary's business.
BANK AGENT - has the meaning ascribed to such term in the introductory
paragraph.
BANK CREDIT AGREEMENT - has the meaning ascribed to such term in the
Recitals.
BANK CREDIT DOCUMENTS - means the "Loan Documents" as defined in the
Bank Credit Agreement.
BANK CREDIT OBLIGATIONS - means, at any time, all principal, interest,
fees and other obligations of every nature (including, without
limitation) Breakage Costs and unrepaid Letter of Credit drawings of
the Company or any Guarantor owing to the Banks at such time under the
Bank Credit Documents plus (b) the amount available for drawing under
all outstanding Letters of Credit.
BANKRUPTCY PROCEEDING - means any bankruptcy, reorganization,
insolvency, receivership, dissolution or similar proceeding and any
assignment for the benefit of creditors.
BANKS - has the meaning ascribed to such term in the introductory
paragraph.
BELOW-FORMULA BENEFITED PARTY - has the meaning ascribed to such term
in Section 5(a).
BENEFITED OBLIGATIONS - means (a) all Bank Credit Obligations and (b)
all Senior Note Obligations.
BENEFITED PARTIES - means the holders, from time to time, of the
Benefited Obligations.
BREAKAGE COSTS - means all obligations of the Company under the Bank
Credit Agreement to pay any unused line fees, letter of credit fees,
stamping fees and fees for breaking funding losses or expenses.
BUSINESS DAY - means any day other than a Saturday, a Sunday or a day
on which commercial banks in Boston, Massachusetts, New York, New
York, Chicago, Illinois, or Salt Lake City, Utah are required or
authorized to be closed.
COLLATERAL - means all property of the Grantors in which a Lien has
been granted to the Collateral Agent pursuant to the Security
Documents.
COLLATERAL AGENT - has the meaning ascribed to such term in the
Recitals.
COLLATERAL AGENT-RELATED PERSONS - means State Street Bank and Trust
Company, in its capacity as Collateral Agent, and any successor
collateral agent selected under Section 7(g), together with their
respective Affiliates, and the officers, directors, employees, agents
and attorneys-in-fact of such Persons and Affiliates.
COMPANY - has the meaning ascribed to such term in the introductory
paragraph.
DISTRIBUTION ACCOUNT - has the meaning ascribed to such term in
Section 4(e).
ENFORCEMENT - means the commencement of any enforcement, collection
(including judicial or non-judicial foreclosure) or similar proceeding
with respect to any Collateral.
EVENT OF DEFAULT - means an "Event of Default" or the equivalent
thereof as defined in any Financing Agreement.
EXISTING INTERCREDITOR AGREEMENT - has the meaning ascribed to such
term in the Recitals.
FEDERAL NET LOSS CARRY BACK REFUND - has the meaning ascribed to such
term in Bank Credit Agreement and the Note Purchase Agreements.
FINANCING AGREEMENTS - means this Agreement, the Bank Credit
Documents, the Senior Note Documents, any Guaranty, any Security
Document and any other instrument, document or agreement entered into
in connection with, and for the benefit of a holder of, any Benefited
Obligation.
GRANTOR - means the Company, each Subsidiary, each Guarantor and any
other Person who grants a Lien in any property to the Collateral Agent
under any Security Document or who guarantees any Benefited
Obligations.
GUARANTIES - has the meaning ascribed to such term in the Recitals.
GUARANTORS - has the meaning ascribed to such term in the Recitals.
INDEMNIFIED PERSON - has the meaning ascribed to such term in Section
7(k).
LETTER OF CREDIT - means a letter of credit issued under or pursuant
to the Bank Credit Agreement.
LIEN - means, with respect to any Person, any interest granted by such
Person in any real or personal property which secures payment or
performance of any obligation and shall include any mortgage, lien,
encumbrance, charge, hypothecation or other security interest of any
kind, whether arising by contract, as a matter of law, by judicial
process or otherwise.
LOAN CREDIT SUBLIMIT - has the meaning ascribed to such term in the
Bank Credit Agreement.
LOSSES - has the meaning ascribed to such term in Section 7(k).
MAJORITY BENEFITED PARTIES - means, at any time, Benefited Parties
consisting of both (a) the holders of a majority in principal amount
of the Senior Note Obligations and (b) the holders of a majority in
principal amount of the Bank Credit Obligations or, if there are only
two such holders (including as a single "holder" for such purpose all
Affiliates of such holder), all such holders.
MAKE-WHOLE AMOUNT - means the "Make-Whole Amount" (as defined in each
of the Note Purchase Agreements.
MWA NOTES - has the meaning ascribed to such term in the Note Purchase
Agreements.
NET CASH PROCEEDS - has the meaning ascribed to such term in the Note
Purchase Agreements.
NOTE PURCHASE AGREEMENTS - has the meaning ascribed to such term in
the Recitals.
NOTEHOLDERS - has the meaning ascribed to such term in the
introductory paragraph hereof.
PERMITTED INTEREST PAYMENTS - means, at any time with respect to any
Benefited Obligation, regularly scheduled payments of interest made by
the Company with respect to such Benefited Obligation so long as no
Event of Default exists at such time.
PERSON - means any individual, corporation, limited liability company,
partnership, trust, unincorporated association, joint venture or
governmental authority.
REPAYMENT EVENT - has the meaning ascribed to such term in Section 8.
RESTRUCTURING DATE - means April 15, 2002.
SECURITY DOCUMENTS - means each of this Agreement, any security
agreement, any stock pledge agreement, any trademark collateral
security and pledge agreement, any deposit account control agreement,
any mortgage or deed of trust, any guaranty and any other document,
instrument, certificate or agreement entered into with or delivered to
any one or more of the Collateral Agent, the Banks or the Noteholders
securing any part of the Benefited Obligations.
SENIOR NOTE DOCUMENTS - means each of the Note Purchase Agreements,
the Senior Notes, the Guaranties, and any other document, instrument,
certificate or agreement entered into with or delivered to the
Noteholders in connection therewith.
SENIOR NOTE OBLIGATIONS - means, at any time, all principal, interest,
fees and other obligations of every nature of the Company or any other
Guarantor owing from time to time to any Noteholder at such time under
any Note Agreement, any Senior Note, and MWA Note or any other Senior
Note Document, including, without limitation, the Make-Whole Amount.
SENIOR NOTES - has the meaning ascribed to such term in the Recitals.
SERIES A NOTES - has the meaning ascribed to such term in the
Recitals.
SERIES B NOTES - has the meaning ascribed to such term in the
Recitals.
SHARING PERCENTAGE - means, with respect to any payment or reduction
of commitment hereof, (a) in the case of the Banks, an aggregate
percentage equal to 31.3% (such 31.3% to be allocated among the Banks
as provided in the Bank Credit Agreement), and (b) in the case of the
Noteholders, an aggregate percentage equal to 68.7% (such 68.7% to be
allocated among the Noteholders in accordance with the Note Purchase
Agreements).
SPECIFIED TRANSACTION - means (a) any Asset Disposition the total
consideration of which, when taken together with the total
consideration received in respect of each other Asset Disposition
consummated during the period of 365 consecutive days ended on the
date of such Asset Disposition, is greater than $100,000 at such time,
(b) the distribution of amounts held by the Collateral Agent for
distribution to the Benefited Parties as of the Restructuring Date
pursuant to Section 4(i), (c) the consummation of the sale of any debt
or equity securities of the Company or any of its Subsidiaries (other
than by a Subsidiary to another Subsidiary), (d) any amounts
attributable to federal or state tax refunds or repayments, except
that the Company shall be permitted to retain an amount attributable
to the Federal Net Loss Carry Back Refund in an amount which is equal
to the lesser of (x) 50% of such Federal Net Loss Carry Back Refund or
(y) $2,000,000, (e) the sale or collection of receivables retained by
any Grantor in connection with the sale of any Subsidiary or business
of such Grantor and (f) the receipt by the Company or any Subsidiary
of any net proceeds arising from any source other than the sale of
inventory in the ordinary course of business and the transactions
identified in the foregoing clauses (a) through (d) above, such
sources to include, without limitation, the exercise or compromise of
any rights of the Company in respect of any insurance policy or the
receipt of any condemnation proceeds (except to the extent that the
applicable Collateral Document shall permit application of such net
proceeds to the repair of the affected property) and any litigation or
litigation proceeds (including, without limitation, any administrative
proceeding and any arbitration).
SUBSIDIARY - of any Person means any other Person of which more than
50% of the voting stock, membership interests or other equity
interests is owned or controlled directly or indirectly by such
Person, or by one or more of the Subsidiaries of such Person or by a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of the
Company.
TRANSFER - means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers, issues or leases (as lessor)
any of its property.
TRUE-UP AMOUNT - has the meaning ascribed to such term in Section
5(a).
TRUE-UP EVENT - means the first to occur of (a) the sale of all or
substantially all of the assets of the Company or the merger or
consolidation of the Company into or with another entity; (b) any
judicial or non-judicial action by any creditors, including the
Collateral Agent, to repossess, replevy, collect, levy, attach, or
garnish, or to foreclose, execute, or otherwise enforce or realize
upon any Lien with respect to, any Collateral; provided that any such
action the amount of the claim of which is less than $50,000 shall not
be a True-Up Event unless the aggregate of such claims exceeds
$250,000, (c) the commencement of a Bankruptcy Proceeding, (d) the
maturity (whether by acceleration or otherwise) of the Bank Credit
Obligations or the Senior Note Obligations, or the termination of the
commitment under the Bank Credit Agreement, or (e) any amendment after
the Restructuring Date of the Bank Credit Agreement or the Note
Purchase Agreement without the consent of the Majority Benefited
Parties.
UNALLOCATED RECEIPTS ACCOUNT - has the meaning ascribed to such term
in Section 6(c).
XXXXX FARGO - has the meaning ascribed to such term in the
introductory paragraph.
2. APPOINTMENT OF COLLATERAL AGENT.
Each of the Bank Agent, for itself and on behalf of the Banks, and
each of the Noteholders hereby (a) designates and appoints State Street Bank and
Trust Company to serve as the Collateral Agent under this Agreement and the
Security Documents and (b) authorizes the Collateral Agent to act as agent for
the Benefited Parties for purposes of enforcing its or the Benefited Parties'
rights in respect of the Collateral and the obligations of the Grantors under
the Security Documents and for purposes of receiving and distributing certain
payments in respect of the Benefited Obligations together with such other powers
as are reasonably incidental thereto.
3. DECISIONS RELATING TO ADMINISTRATION AND EXERCISE OF REMEDIES VESTED IN THE
MAJORITY BENEFITED PARTIES.
(a) DUTIES OF COLLATERAL AGENT. Except as set forth in Section 3(f),
the Collateral Agent agrees that it will not release Liens or Collateral,
as shown in the current books and records of the Collateral Agent, commence
Enforcement or take any other action as Collateral Agent to perfect,
re-perfect or otherwise maintain in existence any Lien on any item of
Collateral under any Security Document without the direction of the
Majority Benefited Parties. Each Benefited Party shall notify the
Collateral Agent of any transfer of such Benefited Party's Benefited
Obligations and of the identity of the transferee thereof. The Collateral
Agent shall treat a Person as a Benefited Party upon receipt by the
Collateral Agent of written notice of such Person's status as such. The
Collateral Agent agrees to administer the Security Documents and the
Collateral as directed in writing by the Majority Benefited Parties, to
endeavor to collect and disburse funds as provided herein, and to make such
demands and give such notices under the Security Documents as the Majority
Benefited Parties may from time to time request in writing, and to take
such action to enforce the Security Documents and to endeavor to realize
upon, collect and dispose of the Collateral or any portion thereof as may
be directed in writing by the Majority Benefited Parties, provided, in each
instance, such action does not conflict with the terms of this Agreement or
the Security Documents.
(b) AGREEMENTS OF BENEFITED PARTIES. Each Benefited Party agrees that
the Collateral Agent shall act as the Majority Benefited Parties may
request from time to time in writing (regardless of whether any individual
Benefited Party agrees, disagrees or abstains with respect to such
request), that the Collateral Agent shall have no liability for acting in
accordance with such request (PROVIDED such action does not conflict with
the express terms of this Agreement or the Security Documents) and that no
Benefited Party which is a member of the Majority Benefited Parties making
any such request shall have any liability to any other Benefited Party for
such request. The Collateral Agent shall give prompt notice to the Bank
Agent, each Bank and each Noteholder of any action taken pursuant to the
instructions of the Majority Benefited Parties to enforce any Security
Document; PROVIDED that the failure to give any such notice shall not
create any liability or cause of action against the Collateral Agent or
impair the right of the Collateral Agent to take any such action or the
validity of any action so taken.
(c) DIRECTIONS TO COLLATERAL AGENT. The Collateral Agent may at any
time request directions from the Majority Benefited Parties as to any
course of action or other matter relating hereto or relating to any
Security Document. Except as otherwise provided in this Agreement, written
directions given by the Majority Benefited Parties to the Collateral Agent
hereunder shall be binding on all Benefited Parties for all purposes
hereunder.
(d) ACTION UNDER FINANCING AGREEMENTS. Nothing contained in this
Agreement shall affect the right (if any) of any Benefited Party to give
the Company or any other Grantor notice of any default or to accelerate or
make demand for payment of its Benefited Obligations under the applicable
Financing Agreement; PROVIDED that each Benefited Party agrees not to take
any action to enforce any term or provision of any Security Document or to
enforce any of its rights in respect of the Collateral except through the
Collateral Agent in accordance with this Agreement.
(e) MAINTENANCE OF LIENS. So long as this Agreement shall not have
been terminated, the Collateral Agent will, solely for the benefit of the
Benefited Parties
(i) file continuation statements under the Uniform Commercial Code of
any applicable jurisdiction with respect to those UCC-1 financing
statements filed in connection with the Collateral of which it has
actual knowledge, and
(ii) upon receipt of written instruction by the Majority Benefited
Parties, execute, procure, acknowledge, deliver and record, or cause
to be executed, procured, acknowledged, delivered or recorded, all
such further instruments, deeds, conveyances, mortgages, supplemental
indentures, transfers, financing statements, continuation statements
and assurances as reasonably deemed necessary by the Majority
Benefited Parties and as are presented to the Collateral Agent for
filing or recording to preserve, continue and protect the Liens
granted pursuant to the Security Documents on, all or any portion of
the Collateral.
(f) RELEASE OF COLLATERAL. The Collateral Agent may release all
Collateral upon receipt of written notice from (i) the Bank Agent that all
Bank Credit Obligations have been paid in full (other than contingent
obligations (x) in respect of letters of credit which have been cash
collateralized or otherwise provided for to the satisfaction of the Bank
Agent and (y) arising under provisions of the Bank Credit Agreement which
by their terms survive termination thereof) and all commitments to create
Bank Credit Obligations have been terminated and (ii) each Noteholder that
all Senior Note Obligations owed to such Noteholder have been paid in full
(other than any Senior Note Obligations arising under provisions of the
Senior Note Documents which by their terms survive termination thereof).
4. APPLICATION OF PROCEEDS IN RESPECT OF BENEFITED OBLIGATIONS.
(a) NON-SHARED PAYMENTS; PERMITTED REDUCTIONS UNDER THE BANK CREDIT
AGREEMENT.
(i) Prior to the occurrence of a True-Up Event, the Grantors may pay,
and the applicable Benefited Parties may receive, (i) Permitted Interest
Payments, (ii) principal payments in respect of the Bank Credit Obligations
which do not result in the permanent reduction of the Aggregate Commitment
under (and as defined in) the Bank Credit Agreements and payments on
account of drawings under Letters of Credit, (iii) the Additional Required
Payments and (iv) reimbursements for reasonable costs and expenses incurred
by any Benefited Party and payable to such Benefited Party in accordance
with its respective Financing Agreements (as in effect on the date hereof),
except that the Net Cash Proceeds from, and all other amounts in respect
of, Specified Transactions shall be applied as provided in Section 4(b).
(ii) On each of the Restructuring Date, September 15, 2002 and
December 15, 2002, so long as the Noteholders shall have received the
required principal payments of the Notes due them on such date, the
Aggregate Commitment and the Loan Credit Sublimit shall be reduced by the
amount of the Additional Commitment Reduction applicable for such date
(such reduction to take effect on such date or such other date as the
Noteholders shall have actually received such required principal payment).
(b) SPECIFIED TRANSACTIONS.
Prior to the occurrence of a True-Up Event, the Grantors hereby agree
to cause any and all payments other than those described in Section 4(a)
above, including, without limitation, Net Cash Proceeds from any Specified
Transaction, occurring following the Restructuring Date to be promptly paid
over to the Collateral Agent for allocation, subject to Section 4(g), to
each of the Bank Agent and the Noteholders in accordance with their
respective Sharing Percentage and shall be applied by:
(i) the Noteholders, against principal installments payable on
account of the Notes in inverse order of the maturities thereof and
without the requirement of any Make-Whole Amount (other than by
issuance of a MWA Note in accordance with the Note Purchase
Agreements); and
(ii) by the Banks, first against the principal amount of Loans
outstanding under the Bank Credit Agreement with the balance, if any,
remitted to the Collateral Agent for application on the terms and
subject to the conditions set forth in Section 4(d), it being
acknowledged and agreed by the Company that upon delivery of such
payment or Net Cash Proceeds to the Collateral Agent as provided in
this Section 4(b): (1) the Aggregate Commitment under the Bank Credit
Agreement will be automatically and permanently reduced, dollar for
dollar, in an amount equal to Banks' Sharing Percentage of such
payment or Net Cash Proceeds, and (2) the Loan Credit Sublimit will be
concurrently automatically and permanently reduced dollar for dollar
by the Bank's Sharing Percentage of such Net Cash Proceeds (or, if the
Loan Credit Sublimit is then less than the full amount of the Bank's
Sharing Percentage of such payment or Net Cash Proceeds, then by such
amount as shall be required to reduce the Loan Credit Sublimit to
zero). For greater certainty, the parties acknowledge that the loan
facility provided pursuant to the Bank Credit Documents is revolving
in nature, and nothing in this Section is intended to restrict the
revolving nature of such loan facility (subject to the reduction of
the commitment of the Banks to extend loans thereunder as provided in
this Agreement and the Bank Credit Agreement).
(c) TRUE-UP EVENT.
Upon the occurrence of a True-Up Event, all amounts thereafter
received by any Benefited Party or the Collateral Agent in respect of
the Benefited Obligations (except for amounts received by operation of
clauses FIRST through NINTH of this Section 4(c)), whether paid
directly by a Grantor as a payment in respect of the Benefited
Obligations on account of a Specified Transaction or otherwise,
realized as a result of Enforcement action taken with respect to the
Collateral, paid as a distribution in any Bankruptcy Proceeding or
otherwise received from any source whatsoever, shall be paid over to
the Collateral Agent for application, subject to Section 4(g), to
payment of the Benefited Obligations, as follows:
FIRST: To the payment of all costs and expenses (including legal
fees) incurred by the Collateral Agent in connection with the
execution of their respective duties hereunder, including all such
costs and expenses incurred in connection with the sale, collection or
other realization in respect of the Collateral or any Enforcement
action taken in respect of any Financing Agreement;
SECOND: To payment of any fees and other amounts then owing to
Collateral Agent in its capacity as such;
THIRD: To the payment of all costs and expenses (including legal
fees) incurred by the Benefited Parties, ratably in accordance with
the respective amounts thereof, in connection with the sale,
collection or other realization in respect of the Collateral or any
Enforcement action taken in respect of any Financing Agreement (in
each case to the extent permitted hereunder);
FOURTH: If and to the extent that the Collateral Agent (acting in
accordance with the instructions of the Majority Benefited Parties)
deems it to be in the interests of the Benefited Parties generally, to
pay all indebtedness owing in respect of Liens, if any, on the
Collateral charged by the Security Documents ranking (or capable of
ranking) in priority to the security interests granted pursuant to any
Security Document or to keep in good standing any such prior Lien;
FIFTH: To the payment of all accrued but unpaid interest on the
Benefited Obligations (other than unpaid interest on any Make-Whole
Amount or MWA Note) ratably to each Benefited Party in accordance with
the amount of such accrued and unpaid interest owing to it as a
percentage of all such accrued and unpaid interest;
SIXTH: To the payment of the principal amount of the Benefited
Obligations (excluding in any event in the case of (i) the Bank Credit
Obligations, any Breakage Costs then due and owing or (ii) the Senior
Note Obligations, any Make-Whole Amount or any amount evidenced by a
MWA Note but including in any event in the case of the Bank Credit
Obligations the undrawn amount under issued and outstanding Letters of
Credit and unrepaid Letter or Credit drawings at such time) owing to
the Above-Formula Benefited Parties to the minimum extent necessary
such that, after giving effect to such payment, the Actual Principal
Percentage for each Above-Formula Benefited Party is equal to such
Benefited Party's Sharing Percentage (such payment to be made ratably
to the Above-Formula Benefited Parties in accordance with the
respective minimum amounts payable to them that are necessary to
achieve the result provided for in this clause SIXTH);
SEVENTH: To the payment of the remaining unpaid principal of the
Benefited Obligations (excluding in any event in the case of the
Senior Note Obligations any Make-Whole Amount and including in any
event in the case of the Bank Credit Obligations the undrawn amount
under outstanding Letters of Credit and unrpaid Letter of Credit
drawings), ratably to each Benefited Party in accordance with each
such Benefited Party's Sharing Percentage;
EIGHTH: To the payment of all Make-Whole Amounts (including any
amounts due in respect of any MWA Notes) and Breakage Costs ratably to
each Benefited Party in accordance with the aggregate amount of such
Make-Whole Amounts (including any amounts due in respect of any MWA
Notes) and Breakage Costs owing to it as a percentage of all such
amounts;
NINTH: to the payment of all remaining Benefited Obligations,
ratably in accordance with the respective amounts thereof; and
TENTH: after indefeasible payment in full of all Benefited
Obligations and provision for payment of the aggregate face amount of
all undrawn outstanding Letters of Credit (as provided in Section
4(d)), to the payment to or upon the order of the applicable Grantor,
or to whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct, of any surplus then
remaining from such amounts.
(d) LETTERS OF CREDIT.
Any distribution to be made pursuant to Section 4(b) or pursuant
to either of clauses SIXTH and SEVENTH of Section 4(c) with respect to
undrawn amounts of outstanding Letters of Credit shall be made to the
Collateral Agent, to be retained in a separate interest bearing cash
collateral account, for the ratable portion of the Bank Credit
Obligations consisting of such undrawn amounts of outstanding Letters
of Credit (it being understood that (x) if any such Letter of Credit
is drawn upon, the Collateral Agent is hereby irrevocably authorized
and directed to pay to the Bank Agent the ratable portion of the
amount of cash held as Collateral therefor pursuant to the relevant
clause above which is allocable to the amount drawn upon such Letter
of Credit and (y) if and to the extent that any such Letter of Credit
shall expire or terminate undrawn or drawn only in part, the amount of
cash held as Collateral therefor pursuant to the relevant clause above
shall be applied as if it were a newly received amount to be applied
in accordance with Section 4(b) or Section 4(c), as the case may be).
If a Benefited Party receives any cash collateral in respect of an
undrawn outstanding Letter of Credit in accordance with the provisions
of its Financing Agreement, it shall turn such cash collateral over to
the Collateral Agent for deposit into the Distribution Account.
(e) DEPOSITS INTO DISTRIBUTION ACCOUNT.
Until any amount to be applied pursuant to Section 4(b) or
Section 4(c) is so applied, the Collateral Agent shall hold such
amount in a separate interest bearing account (the "DISTRIBUTION
Account") established for the benefit of the Benefited Parties and
identified as the "SOS Staffing Benefited Obligation Distribution
Account."
(f) PAYMENTS TO BENEFITED PARTIES.
Payments by the Collateral Agent in respect of (i) the Bank
Credit Obligations shall be made to the Bank Agent for distribution to
the Banks in accordance with the Bank Credit Agreement and (ii) the
Senior Note Obligations shall be made to the Noteholders, in the
manner provided in the Note Purchase Agreements. If a distribution is
to be made by the Collateral Agent in the manner provided in the Note
Purchase Agreements, the Company or the Noteholders entitled to
receive each such payment shall deliver to the Collateral Agent a copy
of each applicable Note Purchase Agreement (the Collateral Agent
hereby acknowledges receipt of copies of such Note Purchase Agreements
as in effect on the date hereof). Unless and until the Collateral
Agent receives such copy and any other information it may reasonably
require to effect the required distribution(s), the Collateral Agent
need not make the distribution(s) otherwise required by this Section
4(f) and the funds otherwise distributable shall be transferred
pending distribution to the Unallocated Receipts Account (defined
below). When the Collateral Agent receives the necessary documentation
or a written direction from the Noteholder(s) entitled to receive such
payment(s), the Collateral Agent shall transfer funds from the
Unallocated Receipts Account to the Distribution Account and make the
required distribution(s).
(g) TIMING OF DISTRIBUTIONS.
The Collateral Agent shall be required to make distributions from
the Distribution Account at any time when the amount on deposit
therein is at least $100,000 or if any amount is on deposit therein
and the Collateral Agent has not made a distribution therefrom within
the previous 90 days.
(h) INVESTMENTS PENDING DISTRIBUTION.
Pending the distribution of funds in the Distribution Account,
the Collateral Agent shall invest such funds in the SSgA U.S. Treasury
Money Market Fund. For tax reporting and withholding purposes, all
income earned on such investments shall be allocated to the Company.
The Collateral Agent need not invest the Funds in the Unallocated
Receipts Account.
(i) RESTRUCTURING DATE PAYMENT.
The Benefited Parties hereby instruct the Collateral Agent to
distribute, on the Business Day following the Restructuring Date, all
funds held by the Collateral Agent on the Restructuring Date to each
of the Benefited Parties in the amount set forth opposite such
Benefited Party on Exhibit A attached hereto.
5. FINAL TRUE-UP.
(a) PAYMENTS TO COLLATERAL AGENT.
Each Benefited Party agrees that if, after twelve months shall
have passed following the occurrence of a True-Up Event, each
Benefited Party shall not have been either (x) fully repaid in respect
of the principal of the Benefited Obligations owed to such Benefited
Party or (y) repaid with respect to such principal in an amount
sufficient so that such Benefited Party's Actual Principal Percentage
at such time equals its Sharing Percentage, each Benefited Party which
has at such time an Actual Principal Percentage which is lower than
its Sharing Percentage (each, a "BELOW-FORMULA BENEFITED PARTY") shall
pay to the Collateral Agent for application pursuant to this Section 5
an amount which, if added to the outstanding principal amount of the
Benefited Obligations owing to such Below-Formula Benefited Party,
would cause such Below-Formula Benefited Party's Actual Principal
Percentage to equal its Sharing Percentage (with respect to each
Below-Formula Benefited Party, its "TRUE-UP AMOUNT").
(b) PAYMENTS TO ABOVE-FORMULA BENEFITED PARTIES.
The Collateral Agent shall pay the True-Up Amounts received by it
to each Benefited Party which has at such time an Actual Principal
Percentage which is greater than its Sharing Percentage (each, an
"ABOVE-FORMULA BENEFITED PARTY") in an amount for each Above-Formula
Benefited Party which, if subtracted from the amount of outstanding
principal of the Benefited Obligations owing to such Above-Formula
Benefited Party, would cause such Above-Formula Benefited Party's
Actual Principal Percentage to equal its Sharing Percentage.
(c) PURCHASE OF PARTICIPATIONS.
Simultaneously with the payments by the Collateral Agent provided
for in Section 5(b), each Below-Formula Benefited Party shall be
deemed to have purchased at face value a participation in the
principal of the Benefited Obligations owing to each Above-Formula
Benefited Party in an amount equal to the True-Up Amount paid by it to
the Collateral Agent for distribution to such Above-Formula Benefited
Party, and any subsequent repayments of amounts owing in respect of
the Benefited Obligations in accordance with the terms hereof shall be
applied by the Collateral Agent accordingly. In addition, at the time
each such Below-Formula Benefited Party is deemed to have purchased a
participation pursuant to the immediately preceding sentence, such
Below-Formula Benefited Party shall be deemed to have purchased a
participation in interest owing to such Above-Formula Benefited Party
in an amount equal to interest accrued on its ratable portion of the
True-Up Amount for such Above-Formula Benefited Party commencing on
the date of occurrence of the True-Up Event.
6. INFORMATION.
If the Collateral Agent proceeds to enforce any Security Document or
is to make a distribution pursuant to Sections 4 or 5, or proposes, or is
directed or requested, to take any other action pursuant to or contemplated by
this Agreement, the Benefited Parties agree as follows:
(a) BANK CREDIT OBLIGATIONS. The Bank Agent shall promptly from
time to time, upon the written request of the Collateral Agent, (i)
notify the Collateral Agent of the outstanding Bank Credit Obligations
as at such date as the Collateral Agent may specify and (ii) notify
the Collateral Agent of any payment received by the Bank Agent to be
applied to satisfy Bank Credit Obligations. The Agent shall certify as
to such amounts and the Collateral Agent shall be entitled to rely
conclusively upon such certification.
(b) SENIOR NOTE OBLIGATIONS. Each Noteholder shall promptly from
time to time, upon the written request of the Collateral Agent, (i)
notify the Collateral Agent of the outstanding Senior Note Obligations
held by such Noteholder as at such date as the Collateral Agent may
specify and (ii) notify the Collateral Agent of any payment received
thereafter by such Noteholder to be applied to satisfy Senior Note
Obligations owing to such Noteholder. Each Noteholder shall certify as
to such amounts and the Collateral Agent shall be entitled to rely
conclusively upon such certification.
(c) INFORMATION TO BE PROVIDED TO COLLATERAL AGENT. With each
payment made to the Collateral Agent pursuant to this Agreement, the
Bank Agent, the Noteholder or other person making the payment shall
notify the Collateral Agent of the Section of this Agreement pursuant
to which the payment is being made, the nature of the payment and the
Bank Credit Agreement, Note Purchase Agreement or other document
pursuant to which the payment is being made. Unless and until the
Collateral Agent receives such information, it shall set aside the
funds so received, uninvested, in a separate account (the "UNALLOCATED
RECEIPTS ACCOUNT"). When the Collateral Agent receives information
required by it to allocate the funds to the Distribution Account or
otherwise in accordance with this Agreement, it shall transfer the
funds in the Unallocated Receipts Account to the appropriate other
account established pursuant to this Agreement.
(d) NOTICE BY COLLATERAL AGENT. The Collateral Agent agrees to
promptly notify the Bank Agent and each Noteholder of the receipt of
any funds pursuant to this Agreement.
7. COLLATERAL AGENT DISCLAIMERS, INDEMNITY, ETC.
(a) NO RESPONSIBILITY OF COLLATERAL AGENT FOR CERTAIN MATTERS.
The Collateral Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and the Security
Documents. The Collateral Agent shall not by reason of this Agreement
or the Security Documents be a Collateral Agent for any Benefited
Party or have any other fiduciary obligation to any Benefited Party
(including any obligation under the Trust Indenture Act of 1939, as
amended). None of the Collateral Agent-Related Persons shall be
responsible to any Benefited Party for any recital, statement,
representation or warranty of any Grantor contained in any Security
Document or in any certificate or other document referred to or
provided for in, or received by any of them under, any Security
Document, for incidental, consequential or punitive damages, or for
the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any Security Document or any other document referred to
or provided for therein or any Lien under any of the Security
Documents or the perfection or priority of any such Lien or for any
failure by the Company, any other Grantor, any Benefited Party or any
other Person (other than such Collateral Agent-Related Person) to
perform any of its respective obligations under any Security Document.
Without limiting the foregoing, the Collateral Agent shall not be
required to take any action under any Security Document unless
instructed to do so in writing by the Majority Benefited Parties. The
Collateral Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care. None of the
Collateral Agent-Related Persons shall be liable for any action taken
or omitted to be taken by any of them hereunder or in connection
herewith or for the transactions contemplated hereby, except for the
gross negligence or willful misconduct of such Person.
(b) RELIANCE ON EXPERTS, WRITINGS AND INSTRUCTIONS OF MAJORITY
BENEFITED PARTIES. The Collateral Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, facsimile,
telex or telephone message, statement or other document or
conversation 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, without
limitation, counsel to the Company and the other Grantors),
independent accountants and other experts selected by the Collateral
Agent. As to any matters not expressly provided for by this Agreement,
the Collateral Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder in accordance with
instructions signed by the Majority Benefited Parties, and such
instructions of the Majority Benefited Parties, and any action taken
or failure to act pursuant thereto, shall be binding on all Benefited
Parties.
(c) INDEMNITY. The Benefited Parties agree that they will
indemnify the Collateral Agent-Related Persons (to the extent not
reimbursed by the Grantors under the Security Documents or reimbursed
pursuant to clause FIRST of Section 4(c) and without limiting the
obligation of the Company to do so), ratably in accordance with the
amount of the Benefited Obligations held by such Benefited Parties at
the time such claim arises, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against the Collateral Agent in any way
relating to or arising out of this Agreement or any of the Security
Documents or the enforcement of any of the terms of any thereof,
including fees and expenses of special counsel; PROVIDED that no such
Benefited Party shall be liable for any such payment to any Collateral
Agent-Related Person to the extent the obligation to make such payment
arises solely from such Person's gross negligence or willful
misconduct or, in the case of the receipt, holding and disbursement of
funds, such Person's negligence. The obligations of the Benefited
Parties under this Section 7(c) shall survive the payment in full of
the Benefited Obligations and the termination of this Agreement.
(d) PERMITTED INACTION. Except for action expressly required of
the Collateral Agent hereunder, the Collateral Agent shall,
notwithstanding Section 3(a), in all cases be fully justified in
failing or refusing to act hereunder or under any Security Document
unless it shall be further indemnified to its satisfaction by the
Benefited Parties against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such
action. In addition, the Collateral Agent shall not be required to
take any action that is in the opinion of counsel to the Collateral
Agent contrary to law or to the terms of this Agreement, any Security
Document or any other Financing Agreement or that would in the opinion
of such counsel subject the Collateral Agent or any of its officers,
employees, agents or directors to any liability. Notwithstanding
anything to the contrary contained in this Agreement or any of the
other Security Documents, in the event that the Collateral Agent is
entitled or required to commence an action to foreclose any of such
Security Documents or otherwise exercise its remedies to acquire
control or possession of any property constituting the Collateral, the
Collateral Agent shall not be required to commence any such action or
exercise any such remedy if the Collateral Agent has determined in
good faith that it may incur liability under any environmental law as
the result of the presence at, or release on or from, any such
property of any hazardous materials unless it has received security or
indemnity from a Person, in an amount and in a form, all satisfactory
to the Collateral Agent in its sole discretion, protecting the
Collateral Agent from all such liability.
(e) DETERMINATION OF BENEFITED PARTIES; SUBSEQUENT BENEFITED
PARTIES BOUND. The Collateral Agent may deem and treat the payee of
any promissory note or other evidence of indebtedness or obligation
relating to any Benefited Obligation as the owner thereof for all
purposes hereof unless and until a written notice of the assignment or
transfer thereof, signed by such payee and in form reasonably
satisfactory to the Collateral Agent, shall have been filed with the
Collateral Agent. Any request, authority or consent of any Person who
at the time of making such request or giving such authority or consent
is the holder of any such note or other evidence of indebtedness or
obligation shall be conclusive and binding on any subsequent holder,
transferee or assignee of such note or other evidence of indebtedness
or obligation and of any note or notes or other evidences of
indebtedness or obligation issued in exchange therefor.
(f) LIMITATION ON COLLATERAL AGENT DUTIES; NO LIABILITY FOR SALE
OF COLLATERAL. Except as expressly provided herein and in the Security
Documents, the Collateral Agent shall have no duty to take any
affirmative steps with respect to the administration or collection of
amounts payable in respect of the Security Documents or the
Collateral. No Collateral Agent-Related Person shall incur any
liability (except to the extent the actions or omissions of the
Collateral Agent or such Collateral Agent-Related Person in connection
therewith constitute gross negligence or willful misconduct) as a
result of any sale of any Collateral, whether at any public or private
sale.
(g) RESIGNATION AND REMOVAL. The Person acting as Collateral
Agent may resign at any time by giving at least 30 days' prior written
notice thereof to the Company, the Bank Agent, the Banks and the
Noteholders. The Person acting as Collateral Agent may be removed as
the Collateral Agent at any time by the Majority Benefited Parties. In
the event of any such resignation or removal of the Person acting as
Collateral Agent, the Majority Benefited Parties shall thereupon have
the right (subject, so long as no Event of Default exists, to the
consent of the Company, which shall not be unreasonably withheld or
delayed) to appoint a successor Collateral Agent. If no successor
Collateral Agent shall have been so appointed by the Majority
Benefited Parties and shall have accepted such appointment within
thirty (30) days after the notice of the intent of the Person acting
as Collateral Agent to resign or the removal of the Collateral Agent,
or if the Company shall fail to consent to such appointment as so
required, the retiring Collateral Agent's resignation shall
nevertheless thereupon become effective, and the Benefited Parties
shall make such equitable arrangements as shall be necessary so that
the duties of the Collateral Agent hereunder are performed until such
time, if any, as the Majority Benefited Parties appoint a successor
Collateral Agent as provided for above. Notwithstanding the foregoing,
in the event that no appointment shall have been made as provided
herein, a successor Collateral Agent may be appointed, upon
application of the retiring Collateral Agent, the Bank Agent, any
Bank, any Noteholder or the Company, by any court of competent
jurisdiction. Any successor Collateral Agent appointed pursuant to
this clause shall be a commercial bank, trust company or other
financial institution organized under the laws of the United States of
America or any state thereof, have capital, surplus and undivided
profit aggregating at least $100,000,000, and have long-term debt
obligations (or if such successor shall not have long-term debt
obligations and such successor is a subsidiary of a holding company,
such holding company shall have long-term debt obligations) having a
rating of "A" or better from a rating agency of national reputation.
Upon the acceptance by a successor Collateral Agent of any appointment
as the Collateral Agent hereunder, such successor Collateral Agent
shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring or removed Collateral
Agent, and the retiring or removed Collateral Agent shall thereupon be
discharged from its duties and obligations hereunder. The Collateral
Agent ceasing to act shall take all such action as is necessary to
duly assign, transfer and deliver each of the Security Documents and
the financing statements, together with all Collateral, moneys and
other property held by such Collateral Agent, to the successor
Collateral Agent so appointed in its place. After any retiring
Collateral Agent's resignation or removal hereunder, the provisions of
this Section 6 shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was Collateral
Agent.
(h) INDEPENDENT CREDIT DECISIONS. Each party hereto acknowledges
that it has, independently and without reliance upon the Collateral
Agent or any other Benefited Party and based upon such documents and
information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement and the other Financing
Agreements to which it is a party. Each party hereto also acknowledges
that it will, independently and without reliance upon the Collateral
Agent or any other Benefited Party and based upon such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the
Financing Agreements to which it is a party.
(i) INSTRUCTIONS REGARDING AMBIGUOUS PROVISIONS. If, with respect
to any proposed action to be taken by it, the Collateral Agent shall
determine in good faith that the provisions of this Agreement relating
to the functions or discretionary powers of the Collateral Agent are
or may be ambiguous or inconsistent, the Collateral Agent shall notify
the Banks, the Bank Agent and the Noteholders identifying the proposed
action and the provisions it considers to be ambiguous or
inconsistent, and may decline either to perform such function or
responsibility or to exercise such discretionary power unless it has
received the written confirmation of the Majority Benefited Parties
that the Majority Benefited Parties concur that the action proposed to
be taken by the Collateral Agent is consistent with the terms of this
Agreement or is otherwise appropriate. The Collateral Agent shall be
fully protected in acting or refraining from acting upon the
confirmation of the Majority Benefited Parties in this respect, and
such confirmation shall be binding upon all Benefited Parties.
(j) GRANTOR PAYMENT OF COLLATERAL AGENT FEES AND EXPENSES. Each
of the Company and each other Grantor, jointly and severally, by its
consent hereto, agrees to pay to the Collateral Agent, from time to
time upon demand, all fees, costs and expenses of the Collateral Agent
(including, without limitation, the fees and disbursements of such
special counsel as the Collateral Agent elects to retain) (i) incurred
by any Person in becoming the Collateral Agent, (ii) arising in
connection with the enforcement of any of the provisions of this
Agreement or the other Financing Agreements, (iii) incurred or
required to be advanced in connection with the performance of its
obligations hereunder, the administration of the Collateral or the
Security Documents, the sale or other disposition of the Collateral
and the preservation, protection or defense of the Collateral Agent's
rights under this Agreement and the other Financing Agreements and in
and to the Collateral, or (iv) incurred in connection with the receipt
or disbursement of funds hereunder. The obligations of the Company and
each other Grantor under this Section 7(j) shall survive the
termination of the other provisions of this Agreement.
(k) INDEMNIFICATION. The Company and each of the Guarantors shall
indemnify and hold harmless the Collateral Agent, each Benefited
Party, and each of their officers, directors, employees, investment
advisors, affiliates and agents (collectively, the "INDEMNIFIED
PERSONS") from and against, and reimburse each Indemnified Person for,
any and all claims, demands, liabilities, losses, damages, judgments,
penalties, costs and reasonable expenses (including, without
limitation, reasonable attorneys' fees and costs incurred in the
investigation, defense and settlement of claims), but not taxes
determined by reference to the income of the Collateral Agent or any
Benefited Party (all such items are herein referred to, collectively,
as "LOSSES") which may be imposed upon, asserted against, or incurred
or paid by any such Indemnified Person by reason of, on account of, or
in connection with:
(i) any bodily injury, death or Property damage occurring in or
upon or in connection with the operation of the Collateral
through any cause whatsoever;
(ii) any act performed or omitted to be performed under this
Agreement or any of the other Security Documents by any such
Indemnified Person; or
(iii) any transaction, suit, action or proceeding arising out of
or in any way connected with this Agreement, any other Security
Document or the Collateral.
The obligations and liability of the Company or the Guarantors under
this Section 7(k) shall be joint and several, and shall survive the foreclosure
of, and realization upon, the Collateral and the payment in full of the
Benefited Obligations and any payment, release or discharge hereof and any or
all security interests and Liens in the Collateral, and the resignation or
removal of the Collateral Agent. The Company or the Guarantors shall not be
obligated to indemnify any Indemnified Person in respect of any of the foregoing
matters if the liability of such Indemnified Person arose out of such
Indemnified Person's gross negligence or willful misconduct. To the extent that
any indemnification provided by this Section 7(k) of an Indemnified Person is in
respect of an action taken by another Indemnified Person (the "Actor"), payment
of such indemnification claim by the Company may be conditioned on assignment to
the Company by such Indemnified Person of its claim in respect of such action
against the Actor. This Section 7(k) shall not limit or restrict or impair any
other indemnity given to the Collateral Agent or any of the Benefited Parties
under this Agreement or under any of the other Financing Agreements but shall
supplement any such indemnity and shall be in addition thereto.
8. INVALIDATED PAYMENTS.
If the Collateral Agent or any other Benefited Party receives any
amount pursuant to this Agreement that is subsequently required to be returned
or repaid by the Collateral Agent or such other Benefited Party to the Company,
any other Grantor or any Affiliate thereof or their respective representatives
or successors in interest, whether by court order, settlement or otherwise (a
"REPAYMENT EVENT"), then
(a) if the Repayment Event results in the Collateral Agent being
required to return or repay any amount distributed by it to the other
Benefited Parties under this Agreement, each Benefited Party to which
such amount was distributed shall, forthwith upon its receipt of a
notice thereof from the Collateral Agent, pay the Collateral Agent an
amount equal to its ratable share (based on the amount distributed to
such Benefited Party) of the amount required to be returned or repaid
relating to such Repayment Event, together with its ratable share
(determined in the same manner) of any interest which the Collateral
Agent is required to pay on the amount so returned or repaid,
(b) if the Repayment Event results in any Benefited Party being
required to return or repay any amount received by it for its own
account under this Agreement to the Company, any other Grantor or any
Affiliate thereof or their respective representatives or successors in
interest (any such Benefited Party, an "AFFECTED BENEFITED PARTY") and
such Repayment Event is not the direct result of such Affected
Benefited Party's willful misconduct, each other Benefited Party
shall, forthwith upon its receipt of a notice thereof from the
Affected Benefited Party, pay the Collateral Agent an amount for
distribution to such Affected Benefited Party such that, after giving
effect to such payment and distribution, all Benefited Parties shall
have received such proportion of the amounts distributed pursuant to
this Agreement as they would have received had the original payment
which gave rise to such Repayment Event not occurred (such payment by
each other Benefited Party to be accompanied by such Benefited Party's
ratable share (based on the amount received by such Benefited Party)
of any interest which the Affected Benefited Party is required to pay
on the amount so returned or repaid), and
(c) in either case, the Collateral Agent shall thereafter apply all
amounts to be distributed pursuant hereto in a manner consistent with
the terms of this Agreement such that all Benefited Parties receive
such proportion of such amounts as they would have received had the
original payment which gave rise to such Repayment Event not occurred;
it being understood that if any Benefited Party shall fail to promptly pay any
such amount to the Collateral Agent, the Collateral Agent may deduct such amount
from any amount payable thereafter to such Benefited Party under this Agreement.
9. MISCELLANEOUS.
(a) NOTICES. All notices and other communications provided for
herein shall be in writing and may be sent by overnight air courier or
facsimile communication and shall be deemed to have been given when
delivered by overnight air courier or upon receipt of facsimile
communication. For the purposes hereof, the address of each party
hereto (until notice of a change thereof is delivered as provided in
this Section 9(a)) shall be set forth under such party's name on the
signature pages (including acknowledgments) hereof.
(b) AMENDMENTS. This Agreement may be amended, modified or waived
only by an instrument or instruments in writing signed by the Majority
Benefited Parties (provided that no amendment or waiver of any of the
provisions hereof will be effective (i) as to any Benefited Party to
the extent that the effect of such amendment or waiver would be to
deprive such Benefited Party of the Lien on any Collateral unless such
Benefited Party consents in writing and (ii) as to the Collateral
Agent to the extent that the effect of such amendment or waiver would
be to impose on the Collateral Agent additional obligations or duties
or reduce protections otherwise available to it). No modification
shall be made to the definition of "Majority Benefited Parties," nor
shall there be any change in the actions under this Agreement which
can only be taken upon the direction or consent of the Majority
Benefited Parties, without the written consent of the Company and the
other Grantors.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the Collateral Agent and each other
Benefited Party and their respective successors and assigns. If the
holder of any Benefited Obligations shall transfer such Benefited
Obligations, it shall promptly so advise the Collateral Agent. Each
transferee of any Benefited Obligations shall take such Benefited
Obligations subject to the provisions of this Agreement and to any
request made, waiver or consent given or other action taken or
authorized hereunder by each previous holder of such Benefited
Obligations prior to the receipt by the Collateral Agent of written
notice of such transfer; and, except as expressly otherwise provided
in such notice, the Collateral Agent shall be entitled to assume
conclusively that the transferee named in such notice shall thereafter
be vested with all rights and powers as a Benefited Party under this
Agreement (and the Collateral Agent may conclusively assume that no
Benefited Obligations have been subject to any transfer other than
transfers of which the Collateral Agent has received such a notice).
Upon the written request of any Benefited Party, the Collateral Agent
will provide such Benefited Party with copies of any written notices
of transfer received pursuant hereto.
(d) CONTINUING EFFECTIVENESS. This Agreement shall continue to be
effective among the Benefited Parties even though a case or proceeding
under any bankruptcy or insolvency law or any proceeding in the nature
of a receivership, whether or not under any insolvency law, shall be
instituted with respect to the Company or any other Grantor or any
portion of the property or assets of the Company or any other Grantor,
and all actions taken by the Benefited Parties with respect to the
Collateral or the Collateral Agent with regard to such proceeding
shall be determined by the Majority Benefited Parties; PROVIDED,
HOWEVER, that nothing herein shall be interpreted to preclude any
Benefited Party from filing a proof of claim with respect to its
Benefited Obligations or from casting its vote, or abstaining from
voting, for or against confirmation of a plan of reorganization in a
case of bankruptcy, insolvency or similar law in its sole discretion.
(e) FURTHER ASSURANCES. Each Benefited Party agrees to do such
further acts and things and to execute and deliver such additional
agreements, powers and instruments as the Collateral Agent or any
other Benefited Party may reasonably request to carry into effect the
terms, provisions and purposes of this Agreement or to better assure
and confirm unto the Collateral Agent or such other Benefited Party
its respective rights, powers and remedies hereunder.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this
Agreement by signing any such counterpart. A facsimile of the
signature of any party on any counterpart shall be effective as the
signature of the party executing such counterpart for purposes of
effectiveness of this Agreement.
(g) EFFECTIVENESS. This Agreement shall become effective
immediately upon execution by the Collateral Agent, the Bank Agent and
the Noteholders and shall continue in full force and effect until 91
days following the date upon which all Benefited Obligations are
irrevocably paid in full and all commitments under the Bank Credit
Agreement have been terminated.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN
SUCH STATE.
(i) HEADINGS. Headings of sections of this Agreement have been
included herein for convenience only and should not be considered in
interpreting this Agreement.
(j) NO IMPLIED BENEFICIARIES. Nothing in this Agreement,
expressed or implied, is intended or shall be construed to confer upon
or give to any Person other than the Benefited Parties any right,
remedy or claim under or by reason of this Agreement or any covenant,
condition or stipulation herein contained.
(k) SEVERANCE. If any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be affected
or impaired thereby.
(l) AMENDMENTS TO FINANCING AGREEMENTS. Each of the Company, each
other Grantor and the Benefited Parties agree that none of the
Financing Agreements may be amended, modified or supplemented without
the consent of the Majority Benefited Parties.
[Remainder of page intentionally blank. Next page is signature page.]
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
STATE STREET BANK AND TRUST COMPANY,
as Collateral Agent
By /s/ Xxxxxx Xxxx
---------------------------
Name: Xxxxxx Xxxx
Title: Assistant Secretary
Xxx Xxxxxx xx Xxxxxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attn: Corporate Trust Administration
(SOS Staffing Services, Inc.
2002 Amended and Restated Intercreditor
Agreement)
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
XXXXX FARGO, NATIONAL ASSOCIATION,
as Administrative Agent and a Lender
By /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
000 Xxxxx Xxxx Xx., 0xx Xxxxx
MAC #X0000-000
Xxxx Xxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Senior Vice President
Loan Adjustment Group
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
XXXXXXX NATIONAL LIFE INSURANCE COMPANY
BY: PPM AMERICA, INC., AS ATTORNEY IN
FACT, ON BEHALF OF XXXXXXX NATIONAL LIFE
INSURANCE COMPANY
By /s/ Xxxxx Xxxx
-------------------------------
Name: Xxxxx Xxxx
Title: Senior Managing Director
c/o PPM America, Inc
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
Private Placements
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
GREAT-WEST LIFE & ANNUITY INSURANCE
COMPANY
By /s Xxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President,
Investments
By /s/ Xxx Xxxxxxxx
------------------------
Name: Xxx Xxxxxxxx
Title: Manager, Investments
0000 Xxxx Xxxxxxx Xxxx (0X0)
Xxxxxxxxx Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
FARM BUREAU LIFE INSURANCE COMPANY
OF MICHIGAN
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxx X. Harkeness
Title: Senior Portfolio Manager
0000 Xxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
FARM BUREAU MUTUAL INSURANCE
COMPANY OF MICHIGAN
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Portfolio Manager
0000 Xxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE CANADA LIFE ASSURANCE
COMPANY, as beneficial owner
By /s/ Xxxx Xxxxxxx
---------------------------
Name: Xxxx Xxxxxxx
Title: Associate Treasurer
Investment Division
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attn: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Ext. 5117
Facsimile: (000) 000-0000
CANADA LIFE INSURANCE COMPANY OF
AMERICA, as beneficial owner
By /s/ Xxxx Xxxxxxx
---------------------------
Name: Xxxx Xxxxxxx
Title: Assistant Treasurer
Investment Division
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attn: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Ext. 5117
Facsimile: (000) 000-0000
CANADA LIFE INSURANCE COMPANY OF
NEW YORK, as beneficial owner
By /s/ Xxxx Xxxxxxx
------------------------
Name: Xxxx Xxxxxxx
Title: Assistant Treasurer
Investment Division
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attn: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Ext. 5117
Facsimile: (000) 000-0000
ACKNOWLEDGMENT OF AND CONSENT AND AGREEMENT
TO AMENDED AND RESTATED INTERCREDITOR AGREEMENT
The undersigned, the Company and the other Grantors described in the
Amended and Restated Intercreditor Agreement set forth above, acknowledge and to
the extent required agree and consent to the terms and conditions thereof. Each
of the undersigned hereby acknowledges and agrees to perform its obligations
under the Amended and Restated Intercreditor Agreement and acknowledges and
agrees that it is not a third-party beneficiary of, and has no rights under, the
Intercreditor Agreement (except as otherwise specifically provided therein).
IN WITNESS WHEREOF, each of the undersigned has caused this
Acknowledgment of and Consent and Agreement to Amended and Restated
Intercreditor Agreement to be executed by its duly authorized officer.
Additional Grantors may become parties to this Acknowledgment and Consent and
Agreement from time to time by executing a counterpart signature page and
delivering the same to the Collateral Agent. The Company agrees to cause each
Grantor to so execute and deliver a counterpart of this Acknowledgment and
Consent and Agreement upon such Person becoming a Grantor.
SOS STAFFING SERVICES, INC.
By: /s/ Xxxxx Xxxxx
-----------------------------
Title: Senior Vice President and CFO
SERVCOM STAFF MANAGEMENT, INC.
By: /s/ Xxxxx Xxxxx
-----------------------------
Title: Senior Vice President and CFO
INTELIANT CORPORATION
By: /s/ Xxxxx Xxxxx
------------------------------
Title: Vice President
SOS COLLECTION SERVICES, INC.
By: /s/ Xxxxx Xxxxx
------------------------------
Title: Vice President
DEVON & DEVON PERSONNEL SERVICES, INC.
By: /s/ XxXxx X. Xxxxxx
------------------------------
Title: President
EXHIBIT A
RESTRUCTURING DATE DISTRIBUTION
BENEFITED PARTY DISTRIBUTION AMOUNT
Xxxxx Fargo Bank, National Association, $300,951.50
As Administrative Agent
The Canada Life Assurance $37,746.00
Company
Canada Life Insurance $37,746.00
Company of America
Canada Life Insurance $18,873.00
Company of New York
Xxxxxxx National Life $283,094.97
Insurance Company
Great-West Life & Annuity $188,729.97
Insurance Company
Farm Bureau Life Insurance $56,618.99
Company of Michigan
Farm Bureau Mutual Insurance $37,746.00
Company of Michigan
