OUTSOURCE INTERNATIONAL, INC.
THIRD TEMPORARY WAIVER
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This Third Temporary Waiver (the "Waiver"), dated as of August 5, 1999,
among (a) OUTSOURCE INTERNATIONAL, INC. (the "Borrower"), (b) OUTSOURCE FUNDING
CORPORATION; (c) CAPITAL STAFFING FUND, INC.; (d) OUTSOURCE FRANCHISING, INC.;
(e) SYNADYNE I, INC.; (f) SYNADYNE II, INC.; (g) SYNADYNE III, INC.; (h)
SYNADYNE IV, INC.; (i) SYNADYNE V, INC.; (j) EMPLOYEES INSURANCE SERVICES, INC.;
(k) OUTSOURCE INTERNATIONAL OF AMERICA, INC.; (l) MASS STAFF, INC.; (m) STAFF
ALL, INC.; (n) OUTSOURCE OF NEVADA, INC.; (o) EMPLOYMENT CONSULTANTS, INC.; (p)
X-TRA HELP, INC.; (q) CO-STAFF, INC.; (r) each of the banks party to the Credit
Agreement hereinafter referred to (collectively, the "Banks") and (s)
BANKBOSTON, N.A., as agent for the Banks (the "Agent"), pursuant to that certain
Third Amended and Restated Credit Agreement (as amended, the "Credit
Agreement"), dated as of July 27, 1998, among the Borrower, the Banks and the
Agent. Capitalized terms used herein and which are not otherwise defined shall
have the respective meanings ascribed thereto in the Credit Agreement.
WHEREAS, the Borrower and each Subsidiary of the Borrowers whose name
appears on the signature page hereof (a "Guarantor") are parties to (i) that
certain Temporary Waiver and Second Amendment to Third Amended and Restated
Credit Agreement dated June 30, 1999 (the "First Temporary Waiver"); and (ii)
that certain Second Temporary Waiver to Third Amended and Restated Credit
Agreement dated July 21, 1999 (the "Second Temporary Waiver"); and
WHEREAS, the Borrower and each Guarantor have requested that the Banks
and the Agent agree to extend the waiver period contained in the Second
Temporary Waiver; and
WHEREAS, the Banks and the Agent have agreed further to extend the
waiver period contained in the Second Temporary Waiver upon the terms and
subject to the conditions hereof;
NOW, THEREFORE, the Borrower, the Guarantors, the Banks and the Agent
hereby agree as follows:
1. Limited Waivers. Subject to the satisfaction of the conditions
precedent set forth herein and in consideration of and reliance upon the
agreements of the Borrower and the Guarantors contained herein, each of the
Banks agrees to waive, solely for the period (the "Waiver Period") until 5:00
p.m. Boston time on August 31, 1999, the following provisions of the Credit
-2-
Agreement to the extent that a Default or Event of Default would otherwise occur
(the "Specified Defaults"):
(a) compliance by the Borrower, as of June 30, 1999 and July 31, 1999, with each
of the financial condition covenants contained in Section 7.1 of the Credit
Agreement; and
(b) the provisions contained in Section 8(f) of the Credit Agreement, provided
that no enforcement action is taken by any holder of any Indebtedness referred
to in Section 8(f).
Such waiver shall automatically, and without any action, notice, demand or any
other occurrence, expire as of the end of the Waiver Period. Upon the expiration
of the Waiver Period, (i) the Banks and the Agent shall retain all of the rights
and remedies relating to the Specified Defaults, (ii) each Specified Defaults
shall be reinstated and shall be in full force and effect for all periods
including the monthly periods ended June 30, 1999 and July 31, 1999, and (iii)
any obligations of the Banks to make Revolving Credit Loans, of the Swingline
Bank to make Swingline Loans or of the Issuing Bank to issue, extend or renew
Letters of Credit shall be subject to the terms and conditions set forth in the
Credit Agreement, including, without limitation, the conditions precedent set
forth in Section 5.2 thereof.
2. Other Defaults. The waiver set forth in Section 1 shall apply only
to the Specified Defaults. No waiver with respect to any other Default or Event
of Default, whether presently existing or hereafter arising, is granted hereby.
Any obligation of the Banks to make Revolving Credit Loans, of the Swingline
Bank to make Swingline Loans or of the Issuing Bank to issue, extend or renew
any Letters of Credit shall at all times be subject to the satisfaction of the
conditions precedent set forth in Section 5.2 of the Credit Agreement,
exclusive, during the Waiver Period, of those conditions precedent relating to
whether or not there are Specified Defaults. The Banks and the Agent shall, at
all times, retain all of the rights and remedies in respect of any Default or
Event of Default under the Credit Agreement other than, during the Waiver
Period, the Specified Defaults.
3. Limitations on Revolving Loans and Letters of Credit. The Borrower
hereby agrees that during the Waiver Period it will not, without the prior
written consent of the Banks, cause or permit the aggregate amount of all
Revolving Credit Loans and Swingline Loans to exceed an amount equal to
$23,500,000 plus an amount equal to the amount of any reduction in L/C
Obligations outstanding as of August 5, 1999. The Borrower further agrees that
during the Waiver Period (a) the Borrower will not request that the Issuing Bank
issue or extend any Letter of Credit and (b) if the Borrower requests the
Issuing Bank to renew any Letter of Credit, the Issuing Bank will have no
obligation to do so.
4. Confirmation of Obligations. The Borrower hereby confirms that the
obligations of the Borrower arising under each of the Loan Documents to which it
is a party, including Indebtedness consisting of Revolving Credit Loans,
Swingline Loans and L/C Obligations, are included in the Obligations, constitute
valid and binding obligations of the Borrower and are not subject to any claims
-3-
or defenses whatsoever. Each Guarantor hereby confirms that the obligations of
such Guarantor arising under each of the Loan Documents to which it is a party
are included in the Obligations, constitute valid and binding obligations of
such Guarantor and are not subject to any claims or defenses whatsoever.
5. Release. The Borrower and each Guarantor, on the Borrower's and each
Guarantors own behalf and on behalf of the Borrower's and each Guarantors
successors and assigns, hereby waive, release and discharge the Agent and each
Bank and all of the affiliates of the Agent and each Bank, and all of the
directors, officers, employees, attorneys and agents of the Agent, each Bank and
such affiliates, from any and all claims, demands, actions or causes of action
(known and unknown) arising out of or in any way relating to the Loan Documents
and any documents, agreements, dealings or other matters connected with the
Credit Agreement, in each case to the extent arising (x) on or prior to the date
hereof or (y) out of, or relating to, actions, dealings or matters occurring on
or prior to the date hereof.
6. Covenants. The Borrower and each Guarantor hereby agree that all of
the covenants contained in Section 8 of the First Temporary Waiver shall remain
in full force and effect.
7. Representations and Warranties. The Borrower and each Guarantor
hereby represent and warrant to the Agent as of the date hereof:
(a) the execution, delivery and performance of this Waiver is within
the corporate or other entity power of the Borrower or such Guarantor;
(b) this Waiver has been duly authorized, executed and delivered by the
Borrower or such Guarantor; and
(c) this Waiver and the Credit Agreement and other Loan Documents to
which it is a party constitute legal, valid and binding obligations of the
Borrower or such Guarantor, enforceable in accordance with their respective
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting generally the enforcement of creditors'
rights.
8. Effectiveness. This Waiver shall become effective as of August 5,
1999, subject to the satisfaction of the following conditions on or prior to
5:00 p.m. Boston time on Friday, August 6, 1999:
(a) receipt by the Agent of a counterpart of this Waiver, executed by
each of the Borrower, the Guarantors, the Agent and the Banks; and
(b) receipt by the Agent of evidence satisfactory to the Agent that the
Liquidity Agreement termination date has been extended until September
27, 1999 from its current August 25, 1999 termination date.
-4-
9. Costs and Expenses. The Borrower hereby agrees that all reasonable
out-of-pocket costs and expenses of the Agent and its business, consulting and
legal advisors, commercial finance examiners and appraisers shall be for the
account of the Borrower, and the Borrower's obligations to reimburse the Agent
therefor shall be included as an Obligation.
10. Effect of Waiver. Except as expressly set forth herein, this Waiver
does not constitute an amendment or waiver of any term or condition of the
Credit Agreement or any other Loan Document, and all such terms and conditions
shall remain in full force and effect and are hereby ratified and confirmed in
all respects. Nothing contained in this Waiver shall be construed to imply a
willingness on the part of the Banks to grant any similar or other future
waivers of any of the terms and conditions of the Credit Agreement or the other
Loan Documents. Nothing contained herein shall in any way prejudice, impair or
effect any rights or remedies of the Agent and the Banks under the Credit
Agreement or any other Loan Document. This Waiver shall constitute a Loan
Document.
11. Miscellaneous Provisions. (a) Except as otherwise expressly
provided by this Waiver, all of the terms, conditions and provisions of the
Credit Agreement shall remain the same. It is declared and agreed by each of the
parties hereto that the Credit Agreement and the other Loan Documents, as
amended hereby, shall continue in full force and effect, and that this Waiver
and the Credit Agreement or, as the case may be, such other Loan Document shall
be read and construed as one instrument. All references herein to the Credit
Agreement include the terms, covenants and provisions of the First Temporary
Waiver and the Second Temporary Waiver.
(b) THIS WAIVER SHALL BE GOVERNED BY, AND CONSTRUED ACCORDING TO, THE
LAWS OF THE STATE OF CONNECTICUT (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW).
(c) This Waiver may be executed in any number of counterparts, but all
such counterparts shall together constitute but one instrument. In making proof
of this Waiver it shall not be necessary to produce or account for more than one
counterpart signed by each party hereto by and against which enforcement hereof
is sought.
(d) Headings or captions used in this Waiver are for convenience of
reference only and shall not define or limit the provisions hereof.
5
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Waiver as of the date first set forth above.
OUTSOURCE INTERNATIONAL, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President
CAPITAL STAFFING FUND, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President
OUTSOURCE FRANCHISING, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President
SYNADYNE I, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
SYNADYNE II, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
SYNADYNE III, INC.
By: /s/ Xxxx X. Xxxxxxx
-----------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
-6-
SYNADYNE IV, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
SYNADYNE V, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
EMPLOYEES INSURANCE SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President
OUTSOURCE INTERNATIONAL OF AMERICA, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President
MASS STAFF, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President
STAFF ALL, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President
-7-
OUTSOURCE OF NEVADA, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President
EMPLOYMENT CONSULTANTS, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President
X-TRA HELP, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President
CO-STAFF, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: President
-8-
BANKBOSTON, N.A., individually and as Agent
By: /s/ C. Xxxxxxxxxxx Xxxxx
-------------------------------
Name: C. Xxxxxxxxxxx Xxxxx
Title: Vice President
COMERICA BANK
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
LASALLE BANK N.A.
By: /s/ Xxxx X. XxXxxxx
--------------------------
Name: Xxxx X. XxXxxxx
Title: First Vice President
SUNTRUST BANK, SOUTH FLORIDA, NATIONAL ASSOCIATION
By: /s/ T. Xxxxxxx Xxxxx
---------------------------
Name: T. Xxxxxxx Xxxxx
Title: Managing Director
FLEET NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
