Exhibit 10.5
SECOND
AMENDED AND RESTATED
CREDIT AGREEMENT
by and among
SPHERION CORPORATION,
THE BORROWING SUBSIDIARIES,
as Borrowers
and
BANK OF AMERICA, N.A.,
as Administrative Agent,
and
FLEET NATIONAL BANK,
as Documentation Agent,
and
CITIBANK, N.A.,
as Syndication Agent,
and
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Book Manager,
and
THE BANKS PARTIES THERETO
April 2, 2001
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
1.1 Amendment and Restatement............................................3
1.2 Certain Defined Terms................................................3
1.3 Other Interpretive Provisions.......................................30
1.4 Accounting Principles...............................................31
1.5 Currency Equivalents Generally......................................31
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments; Joint and Several Liability.......33
2.2 Loan Accounts.......................................................35
2.3 Procedure for Syndicated Borrowing..................................36
2.4 Conversion and Continuation Elections - Syndicated Loans............37
2.5 Utilization of Revolving Commitments in Offshore Currencies.........39
2.6 Bid Borrowings......................................................40
2.7 Procedure for Bid Borrowings........................................40
2.8 Voluntary Termination or Reduction of Commitments...................43
2.9 Optional Prepayments................................................44
2.10 Use of Proceeds.....................................................44
2.11 Currency Exchange Fluctuations......................................44
2.12 Repayment...........................................................45
2.13 Interest............................................................45
2.14 Fees................................................................46
2.15 Computation of Fees and Interest....................................47
2.16 Payments by the Companies...........................................48
2.17 Payments by the Banks to the Agent..................................48
2.18 Sharing of Payments Etc.............................................49
2.19 Swing Line..........................................................50
2.20 Designation of Borrowing Subsidiaries...............................51
2.21 364 Day Extension and Term Loan Option..............................51
2.22 The Euro............................................................53
ARTICLE III
THE LETTERS OF CREDIT
3.1 The Letter of Credit Facilities.....................................55
3.2 Issuance, Amendment and Renewal of Letters of Credit................56
3.3 Risk Participations, Drawings and Reimbursements....................57
3.4 Repayment of Participations.........................................59
3.5 Role of the Issuing Bank............................................59
3.6 Obligations Absolute................................................60
3.7 Cash Collateral Pledge..............................................61
3.8 Letter of Credit Fees...............................................61
3.9 Uniform Customs and Practice........................................62
i
ARTICLE V
CHANGE IN CIRCUMSTANCES
4.1 Increased Cost and Reduced Return...................................63
4.2 Limitation on Types of Loans........................................64
4.3 Illegality..........................................................65
4.4 Treatment of Affected Loans.........................................65
4.5 Compensation........................................................66
4.6 Taxes...............................................................66
4.7 Replacement Banks...................................................68
4.8 Mitigation..........................................................68
4.9 Survival............................................................68
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions to Execution of Agreement................................69
5.2 Condition of Extension of Credit to Borrowing Subsidiary............70
5.3 Conditions to All Credit Extensions.................................71
5.4 Supplements to Schedules............................................72
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Existence and Power.................................................73
6.2 Authorization; No Contravention.....................................73
6.3 Governmental Authorization..........................................73
6.4 Binding Effect......................................................73
6.5 Litigation: Labor Controversies.....................................74
6.6 No Default..........................................................74
6.7 Use of Proceeds; Margin Regulations.................................74
6.8 Title to Properties.................................................74
6.9 Taxes...............................................................74
6.10 Financial Condition.................................................75
6.11 Support Documents...................................................75
6.12 Copyrights, Patents, Trademarks and Licenses, etc...................76
6.13 Subsidiaries........................................................76
6.14 Insurance...........................................................76
6.15 ERISA Compliance....................................................76
6.16 Environmental Matters...............................................77
6.17 Regulated Entities..................................................77
6.18 No Burdensome Restrictions..........................................77
6.19 Full Disclosure.....................................................77
6.20 Immunity............................................................77
ARTICLE VII
AFFIRMATIVE COVENANTS
7.1 Financial Information, Reports, Notices, etc........................78
7.2 Compliance with Laws, etc...........................................80
7.3 Maintenance of Properties...........................................80
ii
7.4 Insurance...........................................................81
7.5 Books and Records...................................................81
7.6 Maintenance of Existence, etc.......................................81
7.7 Additional Support Documents........................................81
7.8 Compliance with ERISA...............................................82
7.9 Release of Pledge or Guaranty.......................................82
ARTICLE VIII
NEGATIVE COVENANTS
8.1 Business Activities.................................................83
8.2 Liens...............................................................83
8.3 Financial Condition.................................................84
8.4 Investments.........................................................84
8.5 Restricted Payments, etc............................................86
8.6 Consolidation Merger, etc...........................................86
8.7 Asset Dispositions, etc.............................................87
8.8 Transactions with Affiliates........................................87
8.9 Negative Pledges, Restrictive Agreements, etc.......................87
8.10 Subsidiaries' Voting Share..........................................88
8.11 ERISA...............................................................88
8.12 Limitation on Indebtedness..........................................88
8.13 Change Fiscal Year..................................................89
8.14 Subordinated Indebtedness...........................................89
8.15 Unwinding of Financing Transaction..................................89
ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default...................................................90
9.2 Remedies............................................................92
9.3 Rights Not Exclusive................................................93
ARTICLE X
THE AGENT
10.1 Appointment, Powers and Immunities..................................94
10.2 Reliance by Agent...................................................95
10.3 Defaults............................................................95
10.4 Rights as Bank......................................................95
10.5 Indemnification.....................................................96
10.6 Non-Reliance on Agent and Other Banks...............................96
10.7 Successor Agent and Successor Issuing Bank..........................96
10.8 Security Trustee....................................................97
10.9 Dutch Pledge Agreements.............................................98
10.10 Documentation Agent.................................................98
ARTICLE XI
MISCELLANEOUS
iii
11.1 Amendments and Waivers..............................................99
11.2 Notices............................................................100
11.3 No Waiver; Cumulative Remedies.....................................100
11.4 Costs and Expenses.................................................100
11.5 Company Indemnification............................................101
11.6 Marshalling; Payments Set Aside....................................102
11.7 Successors and Assigns.............................................102
11.8 Assignments, Participations, etc...................................102
11.9 Designated Bidders.................................................104
11.10 Confidentiality....................................................105
11.11 Set-off............................................................105
11.12 Notification of Addresses of Lending Offices, Etc..................106
11.13 Counterparts.......................................................106
11.14 Severability.......................................................106
11.15 No Third Parties Benefited.........................................106
11.16 Governing Law and Jurisdiction.....................................106
11.17 Waiver of Jury Trial...............................................107
11.18 Entire Agreement...................................................107
11.19 Judgment Currency..................................................107
11.20 Consent of Banks...................................................108
11.21 Xxxxxxx Page Note Commitments......................................108
EXHIBIT A FORM OF BID LOAN NOTE......................................A-1
EXHIBIT B COMPLIANCE CERTIFICATE.....................................B-1
EXHIBIT C DESIGNATION AGREEMENT......................................C-1
EXHIBIT D INVITATION FOR COMPETITIVE BID.............................D-1
EXHIBIT E IRREVOCABLE NOTICE OF SYNDICATED ACTIVITY..................E-1
EXHIBIT F FORM OF REVOLVING LOAN NOTE................................F-1
EXHIBIT G FORM OF SWING LINE NOTE....................................G-1
EXHIBIT H FORM OF 364 DAY NOTE.......................................H-1
EXHIBIT I COMPETITIVE BID REQUEST....................................I-1
EXHIBIT J COMPETITIVE BID............................................J-1
EXHIBIT K FORM OF SWING LINE BORROWING NOTICE........................K-1
EXHIBIT L FORM OF ASSUMPTION LETTER..................................L-1
EXHIBIT M FORM OF ASSIGNMENT AND ACCEPTANCE..........................M-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) DESCRIPTION OF PERMITTED SECURITIZATION
SCHEDULE 2.1 COMMITMENTS
SCHEDULE 6.5 LITIGATION
SCHEDULE 6.10 ADDITIONAL LIABILITIES
SCHEDULE 6.12 LITIGATION REGARDING PATENTS, TRADEMARKS, ETC.
SCHEDULE 6.13 SUBSIDIARIES
SCHEDULE 6.15 ERISA MATTERS
iv
SCHEDULE 8.4(a) EXISTING INVESTMENTS
SCHEDULE 8.9 RESTRICTIVE AGREEMENTS
SCHEDULE 8.12 EXISTING INDEBTEDNESS
SCHEDULE 11.2 OFFSHORE AND DOMESTIC LENDING OFFICES
ADDRESSES FOR NOTICE
v
Exhibit 10.5
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED
CREDIT AGREEMENT is entered into as of
April 2, 2001, among
SPHERION CORPORATION, a Delaware corporation ("Spherion"),
the BORROWING SUBSIDIARIES parties hereto both as of the date hereof or pursuant
to SECTION 2.20 (herein Spherion 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"), and Bank of America, N.A., as agent for
the Banks (in such capacity, the "Agent").
WHEREAS, the Companies, the Agent and certain banks (the "First
Restatement Banks") have entered into an Amended and Restated
Credit Agreement
dated July 2, 1999 (the "Existing
Credit Agreement") which Existing
Credit
Agreement amended and restated that certain
Credit Agreement dated May 1, 1997
(the "Original Agreement") among Interim Services Inc., n/k/a
Spherion
Corporation, Bank of America, N.A., f/k/a NationsBank, N.A., and the Banks party
thereto (the "Original Banks") pursuant to which the First Restatement Banks
have made available to Companies certain credit facilities of up to
$675,000,000, which facilities consist of a multi-year revolving facility which
multi-year revolving loan is evidenced by revolving notes (the "Existing
Revolving Notes") and a 364 day revolving credit facility which 364 day
revolving credit facility is evidenced by 364 day notes (the "Existing 364 Day
Notes"); and
WHEREAS, as a condition to making the credit facilities available under
the Existing
Credit Agreement the First Restatement Banks required that certain
Domestic Subsidiaries of Spherion, other than Borrowing Subsidiaries, guarantee
payment of all obligations and that there be pledged to secure the obligations
65% of the outstanding stock of certain Direct Foreign Subsidiaries; and
WHEREAS, Xxxxxxx Page Group Plc, a Borrowing Subsidiary ("Xxxxxxx
Page") has issued Floating Rate Guaranteed Unlisted Unsecured Loan Notes 2002 in
the principal amount of L12,500,000 (the "Xxxxxxx Page Notes") a portion of the
principal amount of which Xxxxxxx Page Notes were to be used to pay the purchase
price of shares of capital stock of Xxxxxxx Page together with interest, the
payment of which Xxxxxxx Page Notes is guaranteed by the Agent pursuant to the
terms of the Existing
Credit Agreement; and
WHEREAS, Xxxxxxx Page is a Borrowing Subsidiary, the Agent holds a
pledge of 65% of the common stock of Xxxxxxx Page and Spherion intends to make a
public offering of all or substantially all of the common stock of Xxxxxxx Page,
which requires the consent of the First Restatement Banks; and
WHEREAS, the First Restatement Banks have, subject to certain
conditions, consented to the public offering by Spherion of all or substantially
all of the common stock of Xxxxxxx Page, the release of Xxxxxxx Page as a
Borrowing Subsidiary, the release of Xxxxxxx Page International, Inc. as a
Guarantor and the release of the pledge of common stock of Xxxxxxx Page as
security for the Obligations (as defined in the Existing
Credit Agreement); and
WHEREAS, the Companies have requested that the Existing Credit
Agreement be further amended and restated in its entirety in order to, among
other things, permit the public offering of all or substantially all of the
stock of Xxxxxxx Page, permit the release of Xxxxxxx Page as a Borrowing
Subsidiary, permit the release of Xxxxxxx Page International, Inc. as a
Guarantor, permit the release of the pledge of common stock of Xxxxxxx Page as
security for the Obligations (as defined in the Existing Credit Agreement),
reduce the amount of the multi-year revolving credit facilities from $525
million to $325 million and the amount of the 364 day facility from $150 million
to $75 million, change various covenants, and change the interest and fees
payable thereunder and to make certain other changes as contemplated herein; and
WHEREAS, certain of the First Restatement Banks have assigned all or a
portion of their interest in the Existing Credit Agreement to other First
Restatement 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:
2
ARTICLE I
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 Existing Credit Agreement shall be and hereby are further
amended and restated in their entirety by the terms and conditions of this
Agreement and the terms and provisions of the Existing Credit Agreement, except
as otherwise provided in the next paragraph, shall be superseded by this
Agreement.
Notwithstanding the further amendment and restatement of the Existing
Credit Agreement by this Agreement, the Companies shall continue to be liable to
the Agent and the Original Banks and First Restatement 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 and Existing Credit
Agreement to indemnify and hold harmless the Agent and the Original Banks and
First Restatement 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 and First
Restatement Banks which have not elected to continue as a party to this
Agreement may be subject arising in connection with the Original Agreement and
the Existing Credit Agreement. This Agreement is given as a substitution of, and
not as a payment of, the obligations of the Companies under either the Original
Agreement or the Existing Credit Agreement and is not intended to constitute a
novation of either the Original Agreement or the Existing Credit 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 Existing Credit Agreement as of
the Effective Date, shall constitute Advances hereunder accruing interest at the
Base Rate hereunder and the Existing Letters of Credit shall be deemed to have
been issued by the Issuing Banks as Letters of Credit pursuant to this
Agreement. The parties hereto agree that the Interest Periods for all Offshore
Rate Loans outstanding under the Existing Credit Agreement on the Effective Date
shall be terminated, the Banks shall grant a one-time waiver of any payments
required under SECTION 4.5 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).
"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
3
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 Spherion 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 Bank of America in its capacity as agent for the
Banks hereunder, and any successor agent arising under SECTION 10.7.
"Agent-Related Persons" means the Agent and any successor
agent arising under SECTION 10.7, together with their respective
Affiliates (including in the case of Bank of America, 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 11.2 or such
other address as the Agent may from time to time specify in accordance
with SECTION 11.2, 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 11.2.
"Agreement" means this Second Amended and Restated 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%;
4
(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).
"Approved Fund" means any Fund that is administered or managed
by (a) a Bank, (b) an Affiliate of a Bank or (c) an entity or an
Affiliate of an entity that administers or manages a Bank.
"Arranger" means Banc of America Securities, LLC, and its
successors.
"Assignment and Acceptance" has the meaning specified in
SECTION 11.8.
"Assignee" has the meaning specified in SUBSECTION 11.8(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.
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.
5
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.
(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 4.1(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 Spherion Indebtedness" means the net indebtedness
of Spherion 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
6
amount of the Australian Spherion Indebtedness to be provided by the
provisions of the Financing Transaction, will be the net obligation of
Spherion 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 Spherion Indebtedness as of the
Effective Date is set forth on SCHEDULE 8.12.
"Bank" has the meaning specified in the introductory clause
hereto.
"Bank of America" means Bank of America, N.A., a national
banking association.
"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 time by the
Agent as its "prime rate." (The "prime rate" is a rate set by the Agent
based upon various factors including the Agent'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 the Agent 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 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.
7
"Borrowing Subsidiary" means any Subsidiary of Spherion 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
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, 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
and the Banks, as collateral for the L/C Obligations, cash or deposit
account balances pursuant to documentation in form and substance
reasonably satisfactory to the Agent and the Issuing Bank. Derivatives
of such term shall have corresponding meanings. The Companies hereby
grant the Agent, for the benefit of the Agent, the Issuing Bank 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 Bank of America.
"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 Xxxxx'x Investors Service, Inc., or
(ii) any Bank (or its holding company);
(c) any certificate of deposit or bankers acceptance, maturing
not more than one year after such time, which is issued by either
8
(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 laws of
the United States of America or any state thereof 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 Spherion or (ii) during any period of up to
12 consecutive months, commencing on the Closing Date, individuals who
at the beginning of such 12-month period were directors of Spherion
shall cease for any reason (other than the death, disability or
retirement of an officer of Spherion that is serving as a director at
such time so long as another officer of Spherion replaces such Person
as a director) to constitute a majority of the Board of Directors of
Spherion.
"Closing Date" means April 2, 2001, 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.
9
"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).
"Consistent Basis" in reference to the application of GAAP,
means the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the preparation
of the audited financial statements of the Borrower referred to as of
the Closing Date in SECTION 6.10(a).
"Consolidated EBITDA" means, for any four quarter period
(subject to adjustment as contemplated in SECTION 8.3(iv)),
Consolidated Net Income plus Consolidated Interest Expense, income
taxes, depreciation expense, amortization expense and $24,800,000 of
one time costs related to the write down of the equity investment in
Worldwide Xceed Group, Inc., all determined on a consolidated basis for
Spherion 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 Spherion has furnished to the Banks financial information acceptable
to the Required Banks with respect to the Person or assets so
acquired).
"Consolidated Interest Coverage Ratio" means, with respect to
Spherion and its Subsidiaries, on a consolidated basis, for any
consecutive four quarter period (subject to adjustment as contemplated
in SECTION 8.3(iv)), the ratio of Consolidated EBITDA to Consolidated
Interest Expense.
"Consolidated Interest Expense" means, with respect to any
period of computation thereof (subject to adjustment as contemplated in
SECTION 8.3(iv)), the gross interest expense of Spherion and its
Subsidiaries (net of interest income of not to exceed $500,000),
including, without limitation (i) the amortization of debt discounts,
(ii) the
10
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 (subject to adjustment
as contemplated in SECTION 8.3(iv)), the gross revenues from operations
of Spherion and its Subsidiaries (including payments received by
Spherion 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 Spherion 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 8.3(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 Spherion or
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
Spherion and its Subsidiaries, prepared in accordance with GAAP
(subject to adjustment as contemplated in SECTION 8.3(iv)); 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
Spherion and its Subsidiaries, on a consolidated basis, for any
consecutive four quarter period (subject to adjustment as contemplated
in SECTION 8.3(iv)), 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
11
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 and (b)
the Issuance of any Letters of Credit hereunder.
"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 11.9.
"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 Spherion or a Domestic Subsidiary.
"Documentation Agent" means Fleet National Bank 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.
12
"Domestic Subsidiary" means a Subsidiary which is organized
under the laws of the United States or any state or territory thereof.
"EMU" means the European economic and monetary union.
"EMU Legislation" means (a) a Treaty on European Union (the
Treaty of Rome of March 25, 1957, as amended by the Single Xxxxxxxx Xxx
0000 and the Maastricht Treaty (which was signed at Maastricht on
February 1, 1992 and came into force on November 1, 1993)) and (b)
legislative measures of the European Council (including without
limitation European Council regulations) for the introduction of,
changeover to or operation of the euro, in each case as amended or
supplemented from time to time.
"Effective Date" means the date on which all conditions
precedent set forth in SECTION 5.1 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 in the country in which it
is organized or another country which is also a member of the OECD; (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; (d) a Bank; and (e) an Approved Fund.
"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.
13
"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 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" each means the single official non-legacy currency
denominated as the euro and constituting legal tender for the payment
of public and private debts in the Participating Member States.
"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 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and regulations promulgated thereunder.
"Excluded Subsidiary" means each of Spectrum, Atrium (AU-B)
Pty. Limited, Spherion Receivables, Enthusian Corporation, JobOptions,
Inc. and each Inactive Subsidiary.
"Existing Credit Agreement" means the Amended and Restated
Credit Agreement dated as of July 2, 1999 among
Spherion Corporation,
The Borrowing Subsidiaries, The Banks Party Thereto, Bank of America,
N.A., as Agent and Bank One, N.A., f/k/a The First National Bank of
Chicago, as Documentation Agent.
14
"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.
"Fair Market Value" means, with respect to any capital stock
or other ownership interests issued or given by Spherion 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 Spherion's charter or bylaws) by Spherion'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 Spherion 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 Spherion and a Subsidiary and
concurrent and forward purchases of equity interests of a Subsidiary,
all as evidenced by a series of agreements executed on
15
or about June 30, 1999 among (1) Spherion and Bank of America National
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,
Spherion, and Atrium (U.S.-B) LLC, as to an Escrow Agreement and (5)
Spherion 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 Spherion and some of its
Subsidiaries, is the creation of Australian Spherion 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.
"Fund" means any Person (other than a natural Person) that is
(or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary course of its business.
"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 4.1.
"FX Trading Office" means the Agent's Foreign Exchange Trading
Desk 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.
"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
16
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 8.3.
"Inactive Subsidiary" means a Subsidiary of Spherion that is
not an Active Subsidiary, which, as of the Closing Date, are those
Subsidiaries indicated as Inactive on SCHEDULE 6.13.
"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;
(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);
17
(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 Spherion Indebtedness.
"Indemnified Liabilities" has the meaning specified in SECTION
11.5.
"Indemnified Person" has the meaning specified in SECTION
11.5.
"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,
18
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 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;
(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 Termination Date.
"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
19
(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.
"Invitation for Competitive Bids" means a solicitation for
Competitive Bids, substantially in the form of EXHIBIT D.
"Irrevocable Notice of Syndicated Activity" means a notice in
substantially the form of EXHIBIT E.
"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 Bank of America, and in the case of
certain of the Existing Letters of Credit, Comerica Bank, Fleet
National Bank and SunTrust Bank, 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 10.1(b) or SECTION 10.7.
"Judgment Currency" has the meaning specified in SECTION
11.19.
"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 Agreement and shall be agreed to by the Company
applying for the applicable Letter of Credit.
20
"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.
"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 $100,000,000, 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 11.2, 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.
"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 or L/C Advance and, if the Companies so
elect pursuant to SECTION 2.21(f), a Term Loan.
21
"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 Spherion
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.
"Xxxxxxx Page" means Xxxxxxx Page Group PLC (formerly known as
Interim Services (UK) PLC), a public limited company incorporated in
England and Wales (Registered Number 3310225) and, prior to the
consummation of the Xxxxxxx Page IPO, was a wholly-owned Subsidiary of
Spherion (Europe).
"Xxxxxxx Page IPO" means an initial public offering of shares
of common stock of Xxxxxxx Page.
"Xxxxxxx Page Note Commitments" means the commitment of Bank
of America to guaranty, and the commitment of the First Restatement
Banks severally to participate in, the Xxxxxxx Page Note Guarantee, in
an aggregate amount not to exceed on any date the amount of the Xxxxxxx
Page Note Obligations.
"Xxxxxxx Page Note Guarantee" means the guaranty of payment by
Bank of America arising under the Xxxxxxx Page Note Instrument the
terms of which are set forth in Schedule IV to the Xxxxxxx Page Note
Instrument.
"Xxxxxxx Page Note Instrument" means the Loan Note Instrument
dated May 1, 1997 between Xxxxxxx Page and Bank of America, N.A.
constituting up to L12,500,000 Floating Rate Guaranteed Unlisted
Unsecured Loan Notes 2002 pursuant to which (a) Xxxxxxx Page has issued
the Xxxxxxx Page Notes evidencing its obligation to pay the purchase
price of shares of capital stock of Xxxxxxx Page together with interest
and (b) Bank of America has guaranteed payment of such amount.
"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), if less, 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
22
by the Agent as of the date of receipt of the relevant Irrevocable
Notice of Syndicated Activity) of $10,000,000 or (as to Revolving
Commitments and 364 Day Commitments), if less, the aggregate amount of
the then unused Revolving Commitments.
"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.
"Net Issuance Proceeds" means with respect to the issuance and
sale of any Indebtedness (including the consummation of any Permitted
Receivables Securitization) of Spherion 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).
"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 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.
"Offshore Currency Lending Office" means the office of a Bank
from which Offshore Currency Loans are to be made as set forth in
SCHEDULE 11.2.
"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
23
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 Xxxxx 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
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
11.19.
"Other Taxes" has the meaning specified in SECTION 4.6(b).
24
"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 the Agent to
major banks in the London interbank market.
"Participant" has the meaning specified in SECTION 11.8(e).
"Participating Member State" means each country which from
time to time becomes a Participating Member State as described in EMU
Legislation.
"Payroll Account" means a bank account maintained by Spherion
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.
"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 Spherion
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 Spherion 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 $200,000,000; provided, further, the
receivables securitization, the terms of which are described on
SCHEDULE 1.2(c), 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.
25
"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 7.7.
"Pro Forma Projections" means the pro forma consolidated
financial statement projections of Spherion and its Subsidiaries for
each of the fiscal years ending 2000 through 2004 giving effect to the
Xxxxxxx Page IPO 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.
"Replacement 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 more than 50% 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.
"Responsible Officer" means the Chief Executive Officer, the
Chief Financial Officer, the Treasurer, or an Assistant Treasurer of
Spherion 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).
26
"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 F 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 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.
"Spherion (Europe)" means Spherion Europe Inc., a Delaware
corporation and wholly-owned Subsidiary of Spherion.
"Spherion Receivables" means Spherion Receivables Corp., a
Delaware 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 Spherion or any Subsidiary issued or given in connection with such
Acquisition.
"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 Spherion.
27
"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 xxxx 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
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 xxxx-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
the Swing Line Bank in favor of the Companies pursuant to SECTION 2.19.
"Swing Line Bank" means Bank of America, N.A., its successors
and assigns and any other Bank succeeding Bank of America, N.A. in the
event of its resignation pursuant to SECTION 11.7.
"Swing Line Borrowing" means a Borrowing under the Swing Line.
"Swing Line Borrowing Notice" means a notice substantially in
the form of EXHIBIT K.
"Swing Line Loans" means loans made by the Swing Line Bank to
the Companies pursuant to SECTION 2.19.
28
"Swing Line Note" means the promissory note of the Companies
evidencing Swing Line Loans executed and delivered to the Swing Line
Bank as provided in SECTION 2.19 substantially in the form of EXHIBIT
G.
"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 the Swing Line Bank) and a Swing Line Loan, the extension
of credit represented by the participation of such Bank in the
liability owed to the Swing Line Bank 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.
"Syndication Agent" means Citibank, N.A. in its capacity as
Syndication Agent for the banks hereunder and any successor syndication
agent thereto.
"Taxes" has the meaning specified in SECTION 4.6(a).
"Term Loan" has the meaning specified in SECTION 2.21.
"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 April 1, 2002 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 H 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 9.2 upon the
29
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 June 30, 2004.
"Total Indebtedness" means, at any time (subject to adjustment
as contemplated by SECTION 8.3(iv)), all Indebtedness of Spherion 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 $325,000,000.
"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).
1.3 OTHER INTERPRETIVE PROVISIONS.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) 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.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) 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."
(iv) The term "property" means Property.
30
(v) The term "Charlotte time" means the time of day as of any
determination thereof in Charlotte, North Carolina.
(vi) 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.
(d) 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
(ii) 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.
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(f) 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.
1.4 ACCOUNTING PRINCIPLES.
(a) 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.
(b) 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
31
Dollars of an amount in any Offshore Currency or other currency, shall be
determined as set forth in the definition of Dollar Equivalent Amount.
32
ARTICLE II
THE CREDITS
2.1 AMOUNTS AND TERMS OF COMMITMENTS; JOINT AND SEVERAL LIABILITY.
(a) Each Bank severally agrees, on the terms and conditions set forth
herein including, without limitation, SECTION 5.3, 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 or changed as a result of
one or more assignments under SECTION 11.8, such Bank's "Revolving Commitment");
provided, however, that, after giving effect to any Revolving Borrowings and all
L/C 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.
(b) Each Bank severally agrees, on the terms and conditions set forth
herein including, without limitation, SECTION 5.3, 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 11.8, 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 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. All
Loans under SECTION 2.1(b) shall be in Dollars.
33
(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) any interest rate election was made
only by another Company, or (iv) 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 Spherion 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.
Without limiting the foregoing provisions of this SECTION 2.1(d), each
of the Companies hereby irrevocably, absolutely and 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 Spherion 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:
(i) any lack of validity, legality or enforceability of this
Agreement, any Note, any other Loan Document as to any other Company.
(ii) the failure of the Agent or any Bank
(A) 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
(B) to exercise any right or remedy against any
guarantor of, or collateral securing, any Obligations;
(iii) 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;
34
(iv) 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;
(v) 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
(vi) 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.
(a) The Loans made by each Bank (including the Swing Line Bank as
provider of the Swing Line) or Designated Bidder and the Letters of Credit
Issued by the Issuing Bank shall be evidenced by one or more loan accounts or
records maintained by such Bank, Designated Bidder or Issuing Bank, 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 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
35
doing so shall not, however, limit, expand or otherwise affect the obligations
of the Companies hereunder.
(b) 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
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.
(a) 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:
(A) the Company by which such Syndicated Borrowing is
to be made;
(B) whether such Syndicated Borrowing is a Revolving
Borrowing or 364 Day Borrowing;
(C) the amount of such Syndicated Borrowing, which
shall be in an aggregate amount not less than the applicable
Minimum Tranche;
(D) the requested Borrowing Date, which shall be a
Business Day;
(E) in the case of a Syndicated Borrowing which is a
Revolving Borrowing comprised of Offshore Currency Loans if
permitted hereunder, the Applicable Currency; and
(F) 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
36
Borrowing comprised of Offshore Rate Loans, such Interest
Period shall be one month.
(b) 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 any 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 and Letters of Credit other than the applicable Borrowing as at the most
recent Valuation Date for each Loan or Letter of Credit.
(c) 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 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.
(d) 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.
(a) 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:
37
(i) 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
(ii) 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.
(b) 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 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:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Syndicated Loans to be
converted or continued;
(C) whether such Syndicated Loans are Revolving Loans
or 364 Day Loans;
(D) the Type of Syndicated Loans resulting from the
proposed conversion or continuation; and
(E) other than in the case of conversions into Base
Rate Loans, the duration of the requested Interest Period.
(c) 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
38
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.
(d) 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.
(e) 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.
(f) 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 or L/C Obligations in
Offshore Currencies as of a date two Business Days prior to the requested
Borrowing Date or Issuance Date, respectively, (ii) all 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,
(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) and (v) the occurrence of an event described in
SECTION 4.5 (each such date under clauses (i) through (v) of this SECTION 2.5 a
"Valuation Date").
(b) 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. 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
39
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 11.2, 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 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.
(c) 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 subject to the limitations contained herein,
including without limitation SECTION 5.3, request the Banks prior to the
Termination Date (or such earlier date as the Revolving Commitments of all Banks
shall terminate in accordance with the terms hereof) 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 exceed
the combined Revolving Commitments; or (b) the outstanding aggregate principal
amount of all Bid Loans exceed $325,000,000. 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.
(a) 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 I (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:
(i) the date of such Bid Borrowing, which shall be a Business
Day;
40
(ii) 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
(iii) 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.
(b) 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.
(c) (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.
(ii) Each Competitive Bid shall be in substantially the form
of EXHIBIT J, specifying therein:
(A) the proposed Borrowing Date;
(B) 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 $325,000,000, (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;
(C) the Interest Period;
(D) the rate of interest per annum (rounded upward to
the next 1/1000th of 1%) (the "Absolute Rate") offered for
each Bid Loan; and
(E) the identity of the quoting Bank or Designated
Bidder.
41
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.
(iii) Any Competitive Bid shall be disregarded if it:
(A) is not substantially in conformity with EXHIBIT J or does
not specify all of the information required by SUBSECTION
(c)(ii) of this SECTION;
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Competitive Bids; or
(D) arrives after the time set forth in SECTION 2.7(c)(i).
(iv) 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).
(d) 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
5.3, any Competitive Bid shall be irrevocable.
(e) 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:
(i) the aggregate principal amount of each Bid Borrowing may
not exceed the applicable amount set forth in the related Competitive
Bid Request;
(ii) the principal amount of each Bid Borrowing must be
$1,000,000 or in any multiple of $500,000 in excess thereof;
42
(iii) 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
(iv) 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.
(f) 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.
(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
43
and Swing Line Outstandings, and the Dollar Equivalent Amount of the L/C
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 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 4.5, each Company may,
at any time or from time to time, upon notice to the Agent, ratably prepay
Syndicated Loans or L/C Borrowings in whole or in part, in the Minimum Tranche
(other than in the case of an L/C 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 or L/C 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 or L/C 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 4.5.
(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
4.5.
2.10 USE OF PROCEEDS. The proceeds of Revolving Loans and 364 Day Loans
shall be used for working capital and general corporate purposes, including the
continuation of Loans outstanding under the Existing Credit Agreement and
Existing Letters of Credit, and Acquisitions to the extent permitted herein.
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
44
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) 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 4.5.
(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)
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 4.5.
2.12 REPAYMENT. (a) The Companies shall repay to the Banks on the
earlier of (i) the Termination Date, (ii) termination of the Revolving Credit
Commitments of all Banks in accordance with the terms hereof, and (iii) the
occurrence of an Event of Default which is continuing, 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.
45
(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 SECTION 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 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, Bank of America 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 January 16, 2001, 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
46
(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 (or such earlier date as the Revolving Commitments of all Banks
shall terminate in accordance with the terms hereof), and shall be due and
payable quarterly in arrears on the last Business Day of each March, June,
September and December commencing on June 29, 2001 for the quarter (or shorter
period, as applicable) ending the prior Business Day and on the Termination Date
(or such earlier date as the Revolving Commitments of all Banks shall terminate
in accordance with the terms hereof); 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 IV are not met.
2.15 COMPUTATION OF FEES AND INTEREST.
(a) All computations of interest for Base Rate Loans when the Base Rate
is determined by the Agent'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, but in case of British pounds
sterling on a 365 day basis only. 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 7.1(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 Spherion fails to deliver the financial statements required by SECTION 7.1(a)
or 7.1(b), as applicable, and the related Compliance Certificate required by
SECTION 7.1(c), by the 60th day (or, if applicable, the 110th day) after any
fiscal quarter, the Applicable Margin for Revolving Loans shall be 1.125% and
for 364 Day Loans shall be 1.20% and the Applicable Fee Percentage for Revolving
Commitments shall be 0.375% and for 364 Day Commitments shall be 0.30% until
such financial statements and Compliance Certificate are delivered. The
Applicable Margin shall be .675% and .750% for Revolving Loans and 364 Day
Loans, respectively, and the Applicable Fee Percentage shall be .325% and .250%
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
47
and related financial statements of Spherion and its Subsidiaries for the fiscal
quarter ending June 29, 2001.
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 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.
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
48
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
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 11.11) 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.
49
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, the Swing Line Bank 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). The Swing Line Bank
shall not make any Swing Line Loan pursuant hereto (i) if to the actual
knowledge of the Swing Line Bank 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 $25,000,000, or (iii) if after giving effect to such Swing Line
Loan, to the actual knowledge of the Swing Line Bank 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 the Swing Line Bank, 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 the Swing Line Bank 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 K, with appropriate insertions. Unless notified to the contrary by
the Swing Line Bank, 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 Outstandings. If any Company instructs the Swing Line Bank to debit any
demand deposit account of such Company in the amount of any payment with respect
to a Swing Line Loan, or the Swing Line Bank 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 the Swing Line Bank may agree
from time to time, the interest payable on Swing Line Loans is solely for the
account of the Swing Line Bank, 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 the Swing Line
Bank 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 the Swing Line
Bank 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 the Swing
Line Bank, each Bank shall, according to its Pro Rata Share of such Swing Line
Loan, promptly provide to the Swing Line Bank its purchase price therefor in an
amount equal to its Swing Line Participation and, upon any such demand by the
Swing Line Bank, 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 the
Swing Line Bank 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
50
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 the Swing Line Bank 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 the
Swing Line Bank 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), the Swing Line Bank 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 the Swing Line Bank) 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 the Swing Line
Bank).
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 the
Swing Line Bank the amount necessary to repay such Swing Line Outstandings
(which the Swing Line Bank 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 earlier of
(i) the Termination Date, (ii) such date as the Revolving Commitments of all
Banks shall have terminated in accordance with the terms hereof and (iii) the
occurrence of an Event of Default which is continuing, at which time all Swing
Line Outstandings and accrued interest thereon shall be due and payable in full.
2.20 DESIGNATION OF BORROWING SUBSIDIARIES. Spherion may from time to
time designate any Foreign Subsidiary of Spherion 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 L to the Administrative Agent,
with the written consent of Spherion 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.
51
(b) Spherion shall notify the Banks of its request for an extension by
delivering to the Agent notice of such request signed by a Responsible Officer
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 11.8 (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 4.5. 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
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.
52
(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 (i) one year following the 364 Day Termination or
the Termination Date and (ii) the occurrence of an Event of Default which is
continuing. 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
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.
53
(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 Spherion)
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.
54
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 in reliance upon the agreements of the other Lenders set forth in ARTICLE
III (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 xxxxx xxxxx material to
it;
(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 V is not then satisfied;
55
(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 Spherion, respectively, received by the Issuing Bank at
least 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 V have been satisfied. Subject to the terms and conditions hereof, the
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) at least 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
56
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) at least 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.
(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.
57
(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 5.3 (such unreimbursed drawing
which has not been converted constituting an L/C Borrowing), each Bank will be
deemed to be obligated to 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 5.3, 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
58
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 5.3 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
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
59
matters described in clauses (i) through (vii) of SECTION 3.6; provided,
however, anything in such clauses to the contrary 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,
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;
60
(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.
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).
61
(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. Unless otherwise expressly agreed by
the Issuing Bank and the Company when a Letter of Credit is issued, the
International Chamber of Commerce International Standby Practices commonly
referred to as "ISP98", or any subsequent amendment or revision of either
thereof, shall apply to each Letter of Credit (other than the Existing Letters
of Credit to the extent that the same are not currently governed by the ISP98).
62
ARTICLE IV
CHANGE IN CIRCUMSTANCES
4.1 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:
(i) 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);
(ii) 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
(ii) 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 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
4.1(a), the Companies may, by notice to such Bank (with a copy to the Agent),
suspend the obligation of such Bank to make or
63
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 4.4 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 4.1(a) OR (b), as to any
Offshore Currency Loans denominated in British pounds sterling, the Companies
will pay the Associated Costs. Any Bank requesting reimbursement under this
SECTION 4.1(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 4.1 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 4.1 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.
4.2 LIMITATION ON TYPES OF LOANS. If on or prior to the first day of
any Interest Period for any Offshore Rate Loan:
64
(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.
4.3 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
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
4.4 shall be applicable).
4.4 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 4.2 or
4.3 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 4.3 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 4.1 or 4.3
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 4.1 or 4.3 hereof that gave rise to the
conversion of such Bank's Affected Loans pursuant to this SECTION 4.4 no longer
exist (which such Bank agrees to do promptly upon
65
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.
4.5 COMPENSATION. Upon the request of any Bank, the Companies shall pay
to such Bank such amount or amounts as shall be sufficient (in the 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 9.2) 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 V 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.
4.6 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 4.6) 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 11.2, 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
66
from any payment made under this 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 4.6) 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 4.6(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 4.6(a), 4.6(b)
or 4.6(c) 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.
(f) If the Companies are required to pay additional amounts to or for
the account of any Bank pursuant to this SECTION 4.6, 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.
67
(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 4.6 shall survive the termination of the Revolving Credit
Commitments and 364 Day Commitments and the payment in full of the Notes.
4.7 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 4.1, 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 11.8,
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 4.5) 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 11.8.
4.8 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 4.1 or
SECTION 4.3, is entitled to receive payments under SECTION 4.5, 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 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 4.1 or SECTION 4.3 would cease to exist, or the additional amounts
which would otherwise be required to be paid to such Bank pursuant to SECTION
4.5 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 4.8 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.
4.9 SURVIVAL. The agreements and obligations of the Companies in this
ARTICLE IV shall survive the payment of all other Obligations.
68
ARTICLE V
CONDITIONS PRECEDENT
5.1 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, including an opinion as to the perfection of a
first priority security interest in the shares of the Direct Foreign
Subsidiaries described on SCHEDULE II;
(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 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 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) receipt by Bank of America of indemnification or other
security satisfactory to Bank of America, in respect of its obligations
under the Xxxxxxx Page Note Guarantee;
(vii) Pro Forma Projections and a consolidated budget for
fiscal year 2001;
(viii) evidence of receipt by Spherion of not less than
$550,000,000 of net proceeds from the Xxxxxxx Page IPO;
69
(ix) reduction of Revolving Loan Outstandings (excluding
Existing Letters of Credit) to $0 at the Closing Date;
(x) evidence satisfactory to the Agent that all fees payable
by the Companies on the Effective Date to the Agent, the Arranger, Bank
of America and the Banks have been paid in full;
(xi) closing statement containing a detailed disbursement of
proceeds of the Loans in accordance with SECTION 2.10; and
(xii) such other documents, instruments, certificates and
opinions as the Agent or the Banks may reasonably request on or prior
to the Closing Date.
(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 Spherion and its
Subsidiaries delivered to the Agent prior to the Effective Date that 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 Spherion and its Subsidiaries, taken as a whole; 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
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.
5.2 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
70
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.
5.3 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 VI 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 6.10(a)
shall be to the financial statements most recently furnished pursuant
to SECTION 7.1(a) OR (b), and (iii) that the reference to December 29,
2000 in SECTION 6.10(c) shall refer to the date of the financial
statements most recently furnished pursuant to SECTION 7.1(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 5.3 are satisfied. Nothing
71
contained in this SECTION 5.3 shall limit the obligation of the Banks to make an
L/C Advance pursuant to SECTION 3.3.
5.4 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 6.5, 6.10, 6.12, 6.13 and 6.15 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 5.4 or financial statements under SECTION 7.1(a) OR (b), in the
business, operations or affairs, financial or otherwise, of Spherion 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.
72
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Each Company represents and warrants to the Agent and each Bank that:
6.1 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.
6.2 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.
6.3 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.
6.4 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
73
limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles relating
to enforceability).
6.5 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 6.5.
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.
6.6 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 9.1(e).
6.7 USE OF PROCEEDS; MARGIN REGULATIONS. The Credit Extensions are to
be used solely for working capital purposes and general corporate purposes,
including the continuation of Loans outstanding under the Existing Credit
Agreement and Existing Letters of Credit. 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.
6.8 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 8.2.
6.9 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
74
accordance with GAAP. To the best of Spherion'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.
6.10 FINANCIAL CONDITION.
(a) The audited consolidated financial statements of Spherion
and its Subsidiaries dated December 25, 1998, December 30, 1999 and
December 29, 2000, 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
Spherion 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
6.10, show all material indebtedness and other liabilities,
direct or contingent, of Spherion 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 29, 2000, there has been no Material
Adverse Effect.
(c) The Pro Forma Projections provided to the Agent and the
Banks were prepared by Spherion in good faith and are based upon
assumptions which Spherion 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.
6.11 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.
75
6.12 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. Except as set
forth on SCHEDULE 6.12, 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 6.12, 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 6.12, 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.
6.13 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 6.13 and has no equity
investments in any other corporation or entity other than those specifically
disclosed in Part (b) of SCHEDULE 6.13 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.
6.14 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 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, Spherion 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.
6.15 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 6.15, 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. Spherion 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.
76
(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 Spherion 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 Spherion 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 ERISA,
would result in such liability) under Section 4201 or 4243 of ERISA
with respect to a Multiemployer Plan; and (v) neither Spherion nor any
ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.
6.16 ENVIRONMENTAL MATTERS. Environmental Laws and Environmental Claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
6.17 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.
6.18 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.
6.19 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 5.1 (other than SECTION
5.1(vii)) or SECTION 5.2 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.
6.20 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.
77
ARTICLE VII
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:
7.1 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 Spherion, (x) the consolidated balance sheet of Spherion and its
Subsidiaries, as of the end of such fiscal quarter and (x) related
consolidated statements of profits and losses and cash flows of
Spherion 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 Spherion, certified
by a Responsible Officer of Spherion;
(b) as soon as available and in any event within 110 days
after the end of each fiscal year of Spherion, a copy of the annual
audit report for such fiscal year for Spherion and its Subsidiaries,
including therein the consolidated balance sheet of Spherion and its
Subsidiaries as of the end of such fiscal year and consolidated
statements of profits and losses and cash flow of Spherion 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 Spherion 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;
(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 VIII;
78
(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 6.5 or (y) the commencement of any known labor controversy,
litigation, action or proceeding of the type described in SECTION 6.5,
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 Spherion
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 Spherion and its
Subsidiaries, on a consolidated basis, with respect to such fiscal
year;
(j) immediately upon becoming aware of the occurrence of any
of the following events affecting Spherion 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
79
(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 Spherion 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.
7.2 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 8.6 and SECTION 8.7, the maintenance
and preservation of its corporate existence and qualification as a
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 7.2(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.
7.3 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
80
longer economically desirable, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
7.4 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.
7.5 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 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.
7.6 MAINTENANCE OF EXISTENCE, ETC. Subject to the provisions of SECTION
8.7, 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.
7.7 ADDITIONAL SUPPORT DOCUMENTS. (a) Spherion will, and will cause
each Subsidiary that is an Active Subsidiary and not a Foreign Subsidiary other
than Spectrum, Enthusian Corporation, JobOptions, Inc. and Spherion Receivables
(but only so long as Spherion 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) Spherion 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
81
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, Spherion
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.
(c) Spherion shall deliver to the Agent and the Banks a revised
SCHEDULE 6.13 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) Spherion 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.
7.8 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.
7.9 RELEASE OF PLEDGE OR GUARANTY. In connection with any merger or
consolidation transaction permitted under SECTION 8.6 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 8.6 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.
82
ARTICLE VIII
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:
8.1 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.
8.2 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
GAAP 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
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 Spherion or the Subsidiaries;
(v) Liens arising under one or more Pledge
Agreements;
83
(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 8.2, or to evidence for
informational purposes a lessor's interest in Property leased to such
Company or any such Subsidiary.
8.3 FINANCIAL CONDITION. Spherion 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 Spherion and its Subsidiaries
(excluding in all events any losses) to be less than
$1,056,488,000 plus (A) 50% of the quarterly Consolidated Net
Income of Spherion and its Subsidiaries (if positive) for each
fiscal quarter ending after January 1, 2001 (on a cumulative
basis) plus (B) 100% of net proceeds of equity interests
issued by Spherion after the Effective Date, MINUS 80% of the
amount spent by the Borrower during its fiscal year 2001
pursuant to SECTION 8.5(c).
(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 3.00
to 1.00.
(iv) In determining the Consolidated EBITDA,
Consolidated Interest Expense, Consolidated Net Income,
Consolidated Net Worth, Total Indebtedness, Consolidated
Interest Coverage Ratio and the Consolidated Total Leverage
Ratio, all results of operations of Xxxxxxx Page and its
Subsidiaries and all Indebtedness attributed thereto
(including, without limitation, all Indebtedness discharged
with the proceeds of the Xxxxxxx Page IPO) shall be excluded.
8.4 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
other Person, except, subject to the provisions of SECTION 7.7:
(a) Investments existing on the Effective Date and identified
in SCHEDULE 8.4(a);
(b) Cash Equivalent Investments;
84
(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
Spherion) 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 Spherion is in compliance with SECTION 7.7;
(e) loans and advances to any Active Subsidiary; provided that
the aggregate amount of all loans and advances by Spherion 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 any Investments occurring pursuant to
the Financing Transaction;
(f) Investments by Spherion in Excluded Subsidiaries at any
time; provided that, after giving effect to such Investments, (i)
Spectrum's total assets are less than 5% of Consolidated Net Worth and
(ii) Investments in all Excluded Subsidiaries, other than Spectrum,
shall not exceed $25,000,000;
(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 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 8.3 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 8.6.
85
8.5 RESTRICTED PAYMENTS, ETC. On and at all times after the date
hereof, Spherion 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 Spherion or on any warrants, options or other rights with
respect to any shares of any class of capital stock (now or hereafter
outstanding) of Spherion (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 Spherion, or
warrants, options or other rights with respect to any shares of any class of
capital stock (now or hereafter outstanding) of Spherion.
Notwithstanding the foregoing and so long as there shall not exist an
Event of Default which is continuing,
(a) Spherion 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 Spherion may pay dividends or other
distributions to Spherion or any other such wholly owned Subsidiary of
Spherion;
(c) Spherion 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 (i) $300,000,000 during its fiscal year
2001 and (ii) 5% of Consolidated Net Worth as at the end of any fiscal
year thereafter; and
(d) Spherion 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.
8.6 CONSOLIDATION MERGER, ETC. Except as permitted by SECTION 8.4(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 8.4(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 7.7 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
86
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 7.7 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.
8.7 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, unless:
(a) such sale, transfer, lease, contribution or conveyance is
in the ordinary course of its business or is permitted by SECTION 8.6
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 Spherion and its Subsidiaries since the
Closing Date or permitted pursuant to SECTION 8.7(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 Spherion and its Subsidiaries for the four
fiscal quarter period ending during the fiscal quarter in which such
sale, lease or transfer occurs.
8.8 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.
8.9 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
87
under SECTION 8.12 (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 8.9) prohibiting:
(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.
8.10 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 (i) as such events may occur under the
Financing Transaction and (ii) Enthusian Corporation may issue an aggregate of
up to 15% of its outstanding capital stock to Accenture LLC.
8.11 ERISA. Spherion 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.
8.12 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 8.12, including any renewals or replacements on substantially
similar terms;
(c) Indebtedness arising in connection with Permitted
Receivables Securitizations;
(d) Subordinated Indebtedness; and
(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
88
outstanding Indebtedness incurred by Subsidiaries that are not
Guarantors shall not at any time exceed $50,000,000.
8.13 CHANGE FISCAL YEAR. The Companies shall not change their fiscal
year.
8.14 SUBORDINATED INDEBTEDNESS. Spherion 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 Spherion may, prior to the conversion of
the Convertible Notes to common stock of Spherion, purchase or redeem during
each fiscal year during the term of this Agreement up to a principal amount of
its 4.5% Subordinated Convertible Notes due 2005 (the "Convertible Notes") not
exceeding in the aggregate 10% of Consolidated Net Worth determined as of the
end of each such fiscal year, 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) Spherion
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.
8.15 UNWINDING OF FINANCING TRANSACTION. Notwithstanding any provisions
hereof or any of the other Loan Documents to the contrary, the Companies shall
be permitted to, and to cause their Subsidiaries to, take such action as may be
necessary to terminate the Financing Transaction (including, without limitation,
make advances of credit to, and investments of capital in, one or more direct
and indirect Subsidiaries, and cause or permit the repayment and/or return
thereof), and the effect thereof shall not be taken into effect in determining
compliance by the Companies, or any of them, with any of the provisions hereof,
other than SECTION 7.7 to the extent any party to the Financing Transaction is
no longer prohibited from complying with SECTION 7.7.
89
ARTICLE IX
EVENTS OF DEFAULT
9.1 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 (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 7.1(f),
7.1(j) OR 7.7 or in ARTICLE VIII; 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
Spherion and its Subsidiaries under the Financing Transaction but
including a default under the Financing and Interest Purchase Agreement
between Spherion 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
90
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 8.6); (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
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; or
91
(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.
9.2 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 (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) 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 that the
Agent would otherwise be required to return to the Companies pursuant
to SECTION 3.7 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 9.1 (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
92
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 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.
9.3 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.
93
ARTICLE X
THE AGENT
10.1 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 10.5 and
the first sentence of SECTION 10.6 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 10.3, 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 willful misconduct. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall the Agent have or be deemed to have any fiduciary relationship with
any Bank or participant, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or any
other Loan Document or otherwise exist against the Agent. Without limiting the
generality of the foregoing sentence, the use of the term "agent" herein and in
the other Loan Documents with reference to the Agent is not intended to connote
any fiduciary or other implied
94
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(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,
including without limitation the right to resign under SECTION 10.7, (i)
provided to the Agent in this ARTICLE X 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 X, 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.
10.2 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 11.8 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.
10.3 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 10.2 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.
10.4 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,
Bank of America (and any successor acting as Agent) in its capacity as a Bank
hereunder shall have the same rights and
95
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. Bank
of America (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 acting as Agent, and Bank of
America (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.
10.5 INDEMNIFICATION. The Banks agree to indemnify the Agent-Related
Persons (to the extent not reimbursed under SECTION 11.4 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 11.4, to the extent that the
Agent is not promptly reimbursed for such costs and expenses by the Companies.
The agreements contained in this SECTION 10.5 shall survive payment in full of
the Loans and all other amounts payable under this Agreement.
10.6 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.
10.7 SUCCESSOR AGENT AND SUCCESSOR ISSUING BANK AND SWING LINE BANK.
Either the Agent, the Swing Line Bank or the Issuing Bank, respectively, may
resign as Agent, Swing Line Bank or Issuing Bank upon 30 days' notice to the
Banks, provided, however, that the Swing Line Bank may resign as Swing Line Bank
only if it assigns all of its Loans and Commitments pursuant to SECTION 11.8(a).
If the Agent, the Swing Line Bank or Issuing Bank resigns under this Agreement,
the Required Banks shall appoint from among the Banks a successor agent for
96
the Banks, or successor swing line bank or successor issuing bank, respectively.
The appointment of a successor agent, swing line bank or issuing bank shall be
subject to the consent of the Companies which shall not be unreasonably
withheld. If no successor agent, successor swing line bank or successor issuing
bank is appointed prior to the effective date of the resignation of the Agent,
the Swing Line Bank or the Issuing Bank respectively, the Agent, the Swing Line
Bank or the Issuing Bank may appoint, after consulting with the Banks and the
Companies, a successor agent or successor swing line bank or successor issuing
bank, as the case may be, from among the Banks, subject to such Bank's
acceptance of such appointment. Upon the acceptance of its appointment as
successor agent or successor swing line bank or successor issuing bank
hereunder, such successor agent or successor swing line bank or successor
issuing bank, respectively, shall succeed to all the rights, powers and duties
of the retiring Agent, retiring Swing Line Bank or the retiring Issuing Bank and
the term "Agent", "Swing Line Bank" or "Issuing Bank" shall mean such successor
agent or successor swing line bank or successor issuing bank and the retiring
Agent's or retiring Swing Line Bank's or the retiring Issuing Bank's
appointment, powers and duties as Agent or Swing Line Bank or Issuing Bank shall
be terminated. After any retiring Agent's or retiring Swing Line Bank's or
retiring Issuing Bank's resignation hereunder as Agent or Swing Line Bank or
Issuing Bank, the provisions of this ARTICLE X and SECTIONS 11.4 and 11.5 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent or Swing Line Bank or Issuing Bank under this Agreement. If no
successor agent or successor swing line bank or successor issuing bank has
accepted appointment as Agent or Swing Line Bank or Issuing Bank by the date
which is 30 days following a retiring Agent's or retiring Swing Line Bank's or
retiring Issuing Bank's notice of resignation, the retiring Agent's or retiring
Swing Line Bank'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 Swing Line Bank or Issuing Bank hereunder until such time, if any, as
the Required Banks appoint a successor agent or successor swing line bank or
successor issuing bank as provided for above.
Each resigning Issuing Bank shall retain all the rights and obligations
of the Issuing Bank hereunder with respect to all Letters of Credit issued by it
outstanding as of the effective date of its resignation as Issuing Bank and all
L/C Obligations with respect thereto (including the right to require the Banks
to make Base Rate Loans or fund participations in LC Borrowings pursuant to
SECTION 3.3(b)). If any resigning Swing Line Bank terminates the Swing Line, it
shall retain all the rights of the Swing Line Lender provided for hereunder with
respect to Swing Line Loans made by it and outstanding as of the effective date
of such termination, including the right to require the Lenders to make Base
Rate Loans or fund participations in outstanding Swing Line Loans pursuant to
SECTION 2.19(c).
10.8 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
97
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.
10.9 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"), Spherion 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 Obligations. Spherion, 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.
10.10 DOCUMENTATION AGENT AND SYNDICATION AGENT. None of the Banks
identified in this Agreement or any other Loan Document as the "Documentation
Agent" or "Syndication 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.
98
ARTICLE XI
MISCELLANEOUS
11.1 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 9.2) 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;
(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
Credit Issued or to be Issued by it, (ii) 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 (iii) the Fee Letters may be
amended, or rights or privileges thereunder waived, in a writing executed by the
parties thereto.
99
11.2 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 11.2.
(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 X 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 11.2.
(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 and L/C 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.
11.3 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.
11.4 COSTS AND EXPENSES. The Companies shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse Bank of America (including in its capacity as
Agent and Issuing Bank) and the Arranger for all reasonable costs and expenses
incurred by Bank of America (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 Bank of America (including in its capacity
as Agent and Issuing Bank) and the Arranger with respect thereto such Attorney
Costs
100
of the Agent's counsel, Xxxxx Xxxxx Mulliss & Xxxxx, L.L.P., to be limited as
set forth in a letter between the Agent and Spherion; 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.
11.5 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 11.4 whether or not
required to be reimbursed thereunder) which may at any time (including at any
time following repayment of the Loans and the termination of the Letters of
Credit 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 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 or arising from disputes solely
between any Indemnified Persons; 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.
101
11.6 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor the Banks
shall be under any obligation to xxxxxxxx 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.
11.7 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.
11.8 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Any Bank may, with the written consent of Spherion (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 IV shall not be
deemed to be unreasonable and the withholding of consent by the Borrower of an
assignment to an Approved Fund for any reason shall not be deemed 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 (i) an
Eligible Assignee that is an Affiliate of such Bank and (ii) a Bank) (each an
"Assignee") all, or any part of all, of the Loans, the Commitment, the L/C
Commitment, the L/C 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 M
("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 11.8(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
102
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.
(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 11.8(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 rata.
(d) The Agent, acting solely for this purpose as an agent of the
Borrowers shall maintain at the Agent's office a copy of each Assignment and
Acceptance delivered to is and a register for the recordation of the names and
addresses of the Banks, and the Commitments of, and principal amount of the
Loans and L/C Obligations owing to, each Bank pursuant to the terms hereof from
time to time (the "Register"). The entries in the Register shall be conclusive,
and the Borrowers, the Agent and the Banks may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Bank hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrowers and the Banks, at
any reasonable time and from time to time upon reasonable prior notice.
103
(e) 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
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
11.1. In the case of any such participation, the Participant shall be entitled
to the benefit of SECTIONS 4.1, 4.2, 4.4, 4.5, 4.6 AND 11.5 as though it were
also a Bank or Designated Bidder hereunder (provided that no Participant shall
be entitled to any payment under SECTION 4.1, 4.5 OR 4.6 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.
(f) 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 Section 203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
(g) 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.
(h) Notwithstanding an assignment, the Bank making the assignment shall
continue to have the benefits of ARTICLE IV and SECTIONS 11.4 and 11.5 with
respect to the period prior to the assignment.
11.9 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
104
representing that it is a Designated Bidder, the Agent will accept such
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."
11.10 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.
11.11 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
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 Spherion 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,
105
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.
11.12 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.
11.13 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.
11.14 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.
11.15 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.
11.16 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.
(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
106
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.
11.17 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 11.17 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.
11.18 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.
11.19 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
107
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.
11.20 CONSENT OF BANKS. The Banks hereby consent to the Xxxxxxx Page
IPO, the release of Xxxxxxx Page as a Borrowing Subsidiary, the release of
Xxxxxxx Page International, Inc. as a Guarantor and the release of the pledge of
common stock of Xxxxxxx Page as security for the Obligations.
11.21 XXXXXXX PAGE NOTE COMMITMENTS. Bank of America, N.A. hereby
agrees that the commitments of the First Restatement Banks to participate in the
Xxxxxxx Page Note Guarantee is hereby terminated and that the First Restatement
Banks shall have no obligation with respect to such Xxxxxxx Page Note Guarantee.
108
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Charlotte, North Carolina by their proper and
duly authorized officers as of the day and year first above written.
WITNESS:
SPHERION CORPORATION
/s/ X. Xxxxxx XxXxxxxxx
--------------------------------
Print Name: X. Xxxxxx XxXxxxxxx By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxxx Title: Vice President and Treasurer
--------------------------------
Print Name: Xxxxx X. Xxxxxxx
SPHERION WORLDWIDE HOLDING BV
(f/k/a Interim Services Worldwide Holding BV)
By: Spherion (Europe) Inc., Director
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Treasurer
Signature Page 1 of 17
BANK OF AMERICA, N.A., as Agent
and Issuing Bank
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
BANK OF AMERICA, N.A., as a Bank
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
Signature Page 2 of 17
ABN AMRO BANK N.V.
By: /s/ Xxxx X. Honda
--------------------------------------
Name: Xxxx X. Honda
--------------------------------------
Title: Group Vice President
--------------------------------------
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxx
--------------------------------------
Title: Senior Vice President
--------------------------------------
Lending Office:
000 X. XxXxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Credit Administration
Wire Transfer Instructions:
ABN AMRO Bank N.V.
New York, New York
ABA #0000000000
F/O ABN AMRO Bank N.V.
Chicago Branch CPU
Account #650-001-1789-41
Reference: CPU (#00408972)
Spherion Corporation
Signature Page 3 of 17
THE CHASE MANHATTAN BANK
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
Lending Office:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wire Transfer Instructions:
The Chase Manhattan Bank
New York, New York
ABA #000000000
Commercial Loans #9420
Reference:
Spherion Corporation
Attention: ____________________
Signature Page 4 of 17
CITIBANK, N.A.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
Lending Office:
000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxx 00
Xxx Xxxx, Xxx Xxxx 00000
Wire Transfer Instructions:
Citibank, N.A.
New York, New York
ABA #000000000
Account #00000000
Atlanta Receipts
Reference:
Spherion Corporation
Signature Page 5 of 17
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxxxx X.X. Xxxx
--------------------------------------
Name: Xxxxxxxx X.X. Xxxx
--------------------------------------
Title: AVP
--------------------------------------
Lending Office:
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Wire Transfer Instructions:
First Union National Bank
Miami,
Florida
ABA #000000000
Account #GL 0000000000
Account Name: Commercial Loan Services
Attention: Xxxxx Xxxxx
Reference:
Spherion Corporation
Signature Page 6 of 17
FLEET NATIONAL BANK
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxx
--------------------------------------
Title: Senior Vice President
--------------------------------------
Lending Office:
0 Xxxxxxx Xxxxxx
XXXXXX00
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Wire Transfer Instructions:
Fleet National Bank
Boston, Massachusetts
ABA # 000-000-000
Account # 151035166156
Attention: Commercial Loan Services/C&I
Reference:
Spherion Corporation
Signature Page 7 of 17
SUNTRUST BANK, N.A.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------
Title: Director
--------------------------------------
Lending Office:
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx, XX 0000
Xxxxxxx, Xxxxxxx 00000
Wire Transfer Instructions:
SunTrust Bank, N.A.
ABA #000-000-000
Account #9088000112/Wire Clearing
Attention: Xxx Xxxxxxx
Reference: Spherion Corporation
Signature Page 8 of 17
WACHOVIA BANK, N.A.
By: /s/ Xxxxxxx X. XxXxxxx
--------------------------------------
Name: Xxxxxxx X. XxXxxxx
--------------------------------------
Title: Vice President
--------------------------------------
Lending Office:
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Wire Transfer Instructions:
Wachovia Bank, N.A.
Atlanta, Georgia
ABA #000000000
Account #00-000 000
Attention: Xxxxxxxx Xxxxxx
Reference: Spherion Corporation
Signature Page 9 of 17
ING BANK N.V.
By: /s/ X. Xxxxxx
--------------------------------------
Name: X. Xxxxxx
--------------------------------------
Title: Sr. Relationship Manager
--------------------------------------
By: /s/ W. Steenhaven
--------------------------------------
Name: W. Steenhaven
--------------------------------------
Title: Sr. RSM
--------------------------------------
Lending Office:
X.X. Xxx 0000
0000 XX Xxxxxxxxx
Xxx Xxxxxxxxxxx
Wire Transfer Instructions:
Northern Trust Int. Banking Corp.
Account #100628-20230, SWIFT
CNORUS 33
In Favor of: ING Utrecht
For Further Credit to: Account #00.00.00.000
(ING)
Reference: Spherion Corporation
Signature Page 10 of 17
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------------
Title: Senior Vice President
--------------------------------------
Lending Office:
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Wire Transfer Instructions:
The Industrial Bank of Japan, Limited
New York Branch
New York, New York
ABA #000000000
For further credit to: IBJ Atlanta Agency
Account #2601-21014
Reference: Spherion Corporation
Signature Page 11 of 00
XXX XXXX XX XXX XXXX
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
Lending Office:
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wire Transfer Instructions:
The Bank of New York
New York, New York
ABA #000000000
Commercial Loan Servicing Department
Reference: Spherion Corporation
Signature Page 12 of 17
COMERICA BANK
By: /s/ Xxxxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
Lending Office:
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
XX 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Wire Transfer Instructions:
Comerica Bank
ABA #000000000
Account Name: Commercial Loan Servicing
Account #00-00000-00000
Reference: Spherion Corporation
Signature Page 13 of 17
CREDIT SUISSE FIRST BOSTON
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------------
Title: Managing Director
--------------------------------------
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------
Title: Assistant Vice President
--------------------------------------
Lending Office:
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Wire Transfer Instructions:
The Bank of New York
New York, New York
ABA # 000000000
Name of Account: CSFB NY Trade Services
Account #000-0000-000
Reference: Spherion Corporation
Signature Page 14 of 17
HSBC BANK USA
By: /s/ Xxxxxxxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxxxxxxx Xxxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
Lending Office:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wire Transfer Instructions:
HSBC Bank USA
ABA #000-000-000
Account #000-000-000
Attention: Asset Syndications
Reference: Spherion Corporation
Signature Page 15 of 17
KBC BANK N.V.
By: /s/ Xxxx-Xxxxxx Diels
--------------------------------------
Name: Xxxx-Xxxxxx Diels
--------------------------------------
Title: First Vice President
--------------------------------------
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
Lending Office:
New York Branch
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wire Transfer Instructions:
KBC Bank N.V.
ABA #000-000-000
Reference: Spherion Corporation
Signature Page 16 of 17
THE NORTHERN TRUST COMPANY
By: /s/ Rose McDoneal
--------------------------------------
Name: Rose McDoneal
--------------------------------------
Title: Second Vice President
--------------------------------------
Lending Office:
00 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Wire Transfer Instructions:
The Northern Trust Company
ABA #000000000
Commercial Loan Account #5186401000
Credit to: Commercial Loan Dept.
Reference: Spherion Corporation
Signature Page 17 of 17
