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EXHIBIT 99.1
THIRD AMENDMENT
TO FINANCING AGREEMENT
THIRD AMENDMENT, dated as of April 30, 2001 (this
"Amendment"), to the Financing Agreement, dated as of August 15, 2000, as
amended by the First Amendment dated as of November 8, 2000 and the Second
Amendment dated as of November 16, 2000 (as so amended, the "Financing
Agreement"), by and among Outsource International, Inc. (the "Parent"),
Outsource International of America, Inc. ("OIA"), Outsource Franchising, Inc.
("OFI"), Guardian Employer East, LLC ("Guardian East"), Guardian Employer West,
LLC ("Guardian West" and together with the Parent, OIA, OFI and Guardian East,
each a "Borrower" and collectively, the "Borrowers"), each Subsidiary of the
Parent (other than a Borrower) whose name appears on the signature pages thereof
(each a "Guarantor" and collectively, the "Guarantors"), the financial
institutions from time to time party thereto (each a "Lender" and collectively,
the "Lenders"), Ableco Finance LLC, as collateral agent for the Lenders (in such
capacity, the "Collateral Agent"), and The CIT Group/Business Credit, Inc., as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent" and together with the Collateral Agent, each an "Agent" and collectively,
the "Agents").
WHEREAS, the Borrowers, the Guarantors, the Lenders and the
Agents wish to amend certain terms and conditions of the Financing Agreement as
hereafter set forth;
NOW, THEREFORE, the Borrowers, the Guarantors, the Lenders and
the Agents hereby agree as follows:
1. DEFINITIONS. All terms which are defined in the Financing
Agreement and not otherwise defined herein are used herein as defined therein.
2. REPAYMENT OF LOANS. Section 2.03(b) of the Financing
Agreement is hereby amended in its entirety to read as follows:
"(b) The Term Loan A shall be repayable in ten (10)
installments consisting of (i) an installment in the amount of $500,000
on May 30, 2001, (ii) eight (8) consecutive quarterly installments, on
the last day of each of January, April, July and October commencing on
July 31, 2001, each in an amount equal to $500,000, and (iii) a final
quarterly installment on July 31, 2003, in the amount equal to $13.1
million; provided, however, that the last such installment shall be in
the amount necessary to repay in full the unpaid principal amount of
the Term Loan A."
3. ADDITIONAL COVENANTS. Section 7.01 of the Financing
Agreement is hereby amended to add the following new covenants:
"(v) CONSULTANT. On or before May 1, 2001, the
Borrowers and the Guarantors shall retain, and shall continue at all
times thereafter the retention of, a consultant acceptable to the
Agents and the Lenders (a "Consultant"), to assist the Borrowers and
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the Guarantors in exploring strategic alternatives, including, without
limitation, a sale, merger or other combination of all or a portion of
the Loan Parties' assets and/or additional debt and/or equity
financing. The scope of such retention, the duties of the Consultant
and all other terms of such retention shall be set forth in a written
agreement, which shall be in form and substance acceptable to the
Agents and the Lenders. The Borrowers and the Guarantors shall provide
the Consultant with all assistance and cooperation necessary to fully
perform its duties under such retention agreement, and the Borrowers
and the Guarantors shall make the Consultant available to the Agents
and the Lenders to discuss the Consultant's findings and
recommendations upon the Agents' reasonable request."
"(w) FINANCIAL REVIEW. On or before May 15, 2001, the
Borrowers and the Guarantors shall make available to the Agents, the
Lenders and/or their agents the business plan, financial projections
and reports of the cash flow needs of the Borrowers and the Guarantors
in compliance with Section 7.01(a)(vii) of the Financing Agreement and
otherwise acceptable to the Agents, and make their senior officers
available to discuss the same with the Agents, the Lenders and/or their
agents. The Borrowers shall pay for all costs and expenses of the
Agent, the Lenders and their agents in connection with such review."
4. FIXED CHARGE COVERAGE. The first sentence of Section
7.03(a) of the Financing Agreement is hereby amended in its entirety to read as
follows:
"FIXED CHARGE COVERAGE. Permit the Fixed Charge
Coverage Ratio as of the end of each fiscal quarter set forth below to
be less than the applicable ratio set forth below:"
5. CONDITIONS. This Amendment shall become effective only upon
satisfaction in full of the following conditions precedent (the first date upon
which all such conditions have been satisfied being herein called the "Amendment
Effective Date"):
(a) REPRESENTATIONS AND WARRANTIES; NO EVENT OF
DEFAULT. The representations and warranties contained herein, in Section 6.01 of
the Financing Agreement and in each other Loan Document and certificate or other
writing delivered to the Agents and the Lenders pursuant hereto or thereto on or
prior to the Amendment Effective Date shall be correct on and as of the
Amendment Effective Date as though made on and as of such date; and no Default
or Event of Default shall have occurred and be continuing on the Amendment
Effective Date or would result from this Amendment becoming effective in
accordance with its terms.
(b) DELIVERY OF DOCUMENTS. The Collateral Agent shall
have received on or before the Amendment Effective Date, counterparts of this
Amendment, duly executed by the Borrowers, the Guarantors, the Agents and the
Lenders.
(c) PROCEEDINGS. All proceedings in connection with
the transactions contemplated by this Amendment, and all documents incidental
hereto, shall be satisfactory to the Collateral Agent and its counsel.
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6. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers and
the Guarantors represents and warrants as follows:
(a) Each Borrower and Guarantor (i) is a corporation
or limited liability company, as the case may be, duly organized, validly
existing and in good standing under the laws of the state of its organization
and (ii) has all requisite power, authority and legal right to execute, deliver
and perform this Amendment, and to perform the Financing Agreement, as amended
hereby.
(b) The execution, delivery and performance by each
Borrower and Guarantor of this Amendment and the performance by each Borrower
and Guarantor of the Financing Agreement, as amended hereby (i) have been duly
authorized by all necessary action, (ii) do not and will not violate or create a
default under any such Person's organizational documents or any applicable law
or any contractual restriction binding or otherwise affecting any such Person or
any of such Person's properties, and (iii) except as provided in the Loan
Documents, do not and will not result in or require the creation of any Lien
upon or with respect to any of such Person's property.
(c) No authorization or approval or other action by,
and no notice to or filing with, any Governmental Authority or other regulatory
body is required in connection with (i) the due execution, delivery and
performance by each Borrower and Guarantor of this Amendment and (ii) the
performance by each Borrower and Guarantor of the Financing Agreement, as
amended hereby.
(d) Each of this Amendment and the Financing
Agreement, as amended hereby, is a legal, valid and binding obligation of each
Borrower and Guarantor, enforceable against each such Person in accordance with
the terms thereof.
(e) The representations and warranties contained in
Article VI of the Financing Agreement are correct on and as of the Amendment
Effective Date as though made on and as of the Amendment Effective Date, and no
Default or Event of Default has occurred and is continuing on and as of the
Amendment Effective Date or will result from this Amendment becoming effective
in accordance with its terms.
7. CONTINUED EFFECTIVENESS OF THE FINANCING AGREEMENT. (a)
Each of the Borrowers and the Guarantors hereby confirms and agrees that (i)
each Loan Document to which it is a party is, and shall continue to be, in full
force and effect and is hereby ratified and confirmed in all respects except
that on and after the Amendment Effective Date all references in any such Loan
Document to "the Financing Agreement", "thereto", "thereof", "thereunder" or
words of like import referring to the Financing Agreement shall mean the
Financing Agreement as amended by this Amendment, and (ii) to the extent any
such Loan Document purports to assign or pledge to the Collateral Agent, or to
grant to the Collateral Agent a Lien on any collateral as security for the
Obligations of the Borrowers or the Guarantors from time to time existing in
respect of the Financing Agreement and the Loan Documents, such pledge,
assignment and/or grant of a Lien is hereby ratified and confirmed in all
respects.
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(b) Each of the Borrowers and the Guarantors confirm
and agrees that this Amendment shall constitute a Loan Document under the
Financing Agreement and further confirms and agrees that any material
misstatement or material omission of a representation or warranty contained
herein and any failure to perform or comply with any covenant or agreement
contained herein shall constitute an Event of Default under the Financing
Agreement.
8. MISCELLANEOUS. (a) This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.
(b) Section and paragraph headings herein are
included for convenience of reference only and shall not constitute a part of
this Amendment for any other purpose.
(c) This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
(d) The Borrowers will pay on demand all reasonable
fees, costs and expenses of the Agents in connection with the preparation,
execution and delivery of this Amendment and all documents incidental hereto,
including, without limitation, the reasonable fees, disbursements and other
charges of Xxxxxxx Xxxx & Xxxxx LLP, counsel to the Agents.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
BORROWERS:
OUTSOURCE INTERNATIONAL, INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
OUTSOURCE INTERNATIONAL OF AMERICA, INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
OUTSOURCE FRANCHISING, INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
GUARDIAN EMPLOYER EAST, LLC
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Manager
GUARDIAN EMPLOYER WEST, LLC
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Manager
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GUARANTORS:
CAPITAL STAFFING FUND, INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
SYNADYNE II, INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
SYNADYNE III, INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
SYNADYNE IV, INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
SYNADYNE V, INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
EMPLOYMENT CONSULTANTS, INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
X-TRA HELP, INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
CO-STAFF, INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
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COLLATERAL AGENT AND LENDER:
ABLECO FINANCE LLC
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Senior Vice President
ADMINISTRATIVE AGENT AND LENDER:
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Vice President
LENDERS:
A2 FUNDING LP
By: A2 Fund Management LLC,
its General Partner
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: Vice President
ABLECO HOLDING LLC
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Attorney-in-Fact
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