WESTAFF (USA), INC.
WESTERN MEDICAL SERVICES, INC.
SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT AND TRANSACTION DOCUMENTS
This SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT AND TRANSACTION
DOCUMENTS (this "AMENDMENT"), dated as of August 9, 1999, is among Westaff
(USA), Inc., a California corporation formerly known as Western Staff Services
(USA), Inc. ("WSS"), and Western Medical Services, Inc., a California
corporation ("WMS") (WSS and WMS sometimes hereinafter are referred to
individually as a "CO-ISSUER" and collectively as "CO-ISSUERS") and the
purchasers listed in Schedule A to the Note Purchase Agreement (as defined
below). Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed thereto in the Note Purchase Agreement, as amended hereby.
R E C I T A L S
1. The Co-Issuers entered into a Note Purchase Agreement dated
May 15, 1998 (the "ORIGINAL NOTE PURCHASE AGREEMENT") in connection with the
issue of certain 6.77% Senior Secured Notes (the "ORIGINAL NOTES") to the
purchasers listed in Schedule A to the Note Purchase Agreement.
2. The Co-Issuers entered into a First Amendment to Note Purchase
Agreement and Transaction Documents dated as of November 16, 1998 (the "FIRST
AMENDMENT") (the Original Note Purchase Agreement, as amended by the First
Amendment, is referred to herein as the "NOTE PURCHASE AGREEMENT"). In
connection with the execution and delivery of the First Amendment, the
Co-Issuers issued to each Purchaser a certain Amended and Restated 6.77%
Senior Note due May 20, 2008 dated November 16, 1998 (collectively, the
"NOTES"), which amended and restated the Original Notes in their entirety.
3. The Co-Issuers, Alternative Billing Services, Inc., and
Western Medical Services (NY), Inc. (the Co-Issuers, Alternative Billing
Services, Inc. and Western Medical Services (NY), Inc. are referred to herein
collectively as the "WESTERN PARTIES") and Intrepid Companies, Inc. ("BUYER")
have entered into the Asset Purchase Agreement. Pursuant to the Asset
Purchase Agreement, the Western Parties have agreed to sell certain assets to
Buyer, excluding, among other things, cash or customer remittances not yet
applied.
4. The Co-Issuers have requested that the holders of the Notes
consent to the WMS Disposition (as defined below) and release their liens in
the assets which are the subject of WMS Disposition (as defined below). The
holders of the Notes are willing to so consent on the terms and subject to
the conditions contained in this Amendment.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the Co-Issuers and the holders of the Notes agree as follows:
1. AMENDMENT TO NOTE PURCHASE AGREEMENT. Section 10.6 of the Note
Purchase Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:
SECTION (a) SALE OF ASSETS. Other than in the
ordinary course of business or in connection with a Sale and
Leaseback Transaction, no Co-Issuer will, or will permit the
Company or any of its Restricted Subsidiaries to, directly or
indirectly, in a single transaction or a series of
transactions, sell, lease, transfer, abandon or otherwise
dispose of or suffer to be sold, leased, transferred, abandoned
or otherwise disposed of (collectively, "TRANSFER") assets in
any fiscal year in excess of 15% of the Consolidated Total
Assets ("SUBSTANTIAL ASSETS") determined as of the end of the
immediately preceding fiscal year or if such Transfer of
Substantial Assets in the aggregate in more than one fiscal
year would exceed 25% of Consolidated Total Assets determined
as the average of Consolidated Total Assets determined as of
the fiscal year end of the three fiscal years immediately
preceding the date of determination, unless the proceeds of
such Transfer of Substantial Assets are used within 180 days to
(i) acquire productive assets or (ii) reduce Indebtedness of
the Co-Issuers, the Company or its Restricted Subsidiaries
which is not junior in right of payment to the Notes.
Notwithstanding the foregoing, the Purchasers acknowledge that
the Co-Issuers, Alternative Billing Services, Inc. and Western
Medical Services (NY), Inc. have entered into the Asset
Purchase Agreement with Intrepid Companies, Inc. dated July 22,
1999 (the "ASSET PURCHASE AGREEMENT") and consent to the
consummation of the transactions contemplated thereunder (the
"WMS DISPOSITION"), in which event, each Purchaser shall
authorize a release of its security interest in the assets
which are the subject of the WMS Disposition. Upon (i) WMS's
receipt of substantially all of the customer remittances
payable to WMS which are outstanding as of August 9, 1999 and
application thereof to the applicable customer accounts, and
(ii) WMS's distribution of such remittances and all other cash
or other assets of WMS to the Company, WSS or one of the
Restricted Subsidiaries, and provided that WMS has not
purchased or otherwise obtained an interest in any other
assets, (x) WMS's obligation as a Co-Issuer shall be
extinguished and the Purchasers will tender their existing
Notes upon the request of WSS in exchange for new Notes in
which WSS will be the sole issuer; and (y) each Purchaser
shall, upon request of WSS, execute a release of WMS from its
obligations under this Agreement, the Other Agreements, the
Notes and its collateral described in the Security Agreement
which has not been previously released.
2. EFFECTIVENESS OF THIS AMENDMENT. This Amendment shall become
effective as of the date hereinabove written and upon (i) the execution and
delivery of this Amendment by the Co-Issuers to the Purchasers and (ii) the
consummation of the WMS Disposition as contemplated in the Asset Purchase
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the date hereinabove written.
WESTAFF (USA), INC.
By: /s/ Xxxx X. Xxxxxxx
----------------------------
Xxxx X. Xxxxxxx
Executive Vice President and
Chief Financial Officer
WESTERN MEDICAL SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------
Xxxx X. Xxxxxxxxx
Vice President
PPM AMERICA, INC., AS ATTORNEY IN FACT,
ON BEHALF OF XXXXXXX NATIONAL LIFE
INSURANCE COMPANY
By
----------------------------
Xxxxx X. Xxxxx
Managing Director
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the date hereinabove written.
WESTERN STAFF SERVICES (USA), INC.
By:
----------------------------
Xxxx X. Xxxxxxx
Executive Vice President and
Chief Financial Officer
WESTERN MEDICAL SERVICES, INC.
By:
----------------------------
Xxxx X. Xxxxxxxxx
Vice President
PPM AMERICA, INC., AS ATTORNEY IN FACT,
ON BEHALF OF XXXXXXX NATIONAL LIFE
INSURANCE COMPANY
By /s/ Xxxxx X. Xxxxx
----------------------------
Xxxxx X. Xxxxx
Managing Director
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the date hereinabove written.
WESTERN STAFF SERVICES (USA), INC.
By: /s/ Xxxx X. Xxxxxxx
----------------------------
Xxxx X. Xxxxxxx
Executive Vice President and
Chief Financial Officer
WESTERN MEDICAL SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------
Xxxx X. Xxxxxxxxx
Vice President
NATIONWIDE LIFE INSURANCE COMPANY
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the date hereinabove written.
WESTERN STAFF SERVICES (USA), INC.
By:
----------------------------
Xxxx X. Xxxxxxx
Executive Vice President and
Chief Financial Officer
WESTERN MEDICAL SERVICES, INC.
By:
----------------------------
Xxxx X. Xxxxxxxxx
Vice President
NATIONWIDE LIFE INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxxxx
----------------------------
Title: Authorized Signatory
---------------------------
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