AMENDMENT NO.6
CREDIT AGREEMENT
AMENDMENT NO. 6 TO CREDIT AGREEMENT, dated as of May 18, 1999 (this
"Amendment No. 6"), among OLSTEN CORPORATION, a corporation organized under the
laws of the State of Delaware (the "Borrower"), each of the Banks which is
signatory hereto and THE CHASE MANHATTAN BANK, a New York banking corporation,
as agent for the Banks (in such capacity, the "Agent").
RECITALS:
A. The parties hereto entered into that certain Credit Agreement dated
as of August 9, 1996, as amended by Amendment No. 1 dated as of August 27, 1997,
Amendment No. 2 dated as of February 24, 1998, Amendment No. 3 dated as of July
30, 1998, Amendment No. 4 dated as of February 28, 1999 and Amendment No. 5
dated as of February 28, 1999 (the "Credit Agreement").
B. The Borrower has requested that the Credit Agreement be amended as
set forth herein and the Banks have agreed to such amendment subject to the
terms and conditions of this Amendment No. 6.
C. Any capitalized terms used herein and not defined herein shall have
the meanings ascribed to such terms in the Credit Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1.
AMENDMENTS TO CREDIT AGREEMENT
The amendments set forth in this Amendment No. 6 shall be deemed to be
an amendment to the Credit Agreement and shall not be construed in any way as a
replacement or substitution therefor. All of the terms and provisions of this
Amendment No. 6 are hereby incorporated by reference into the Credit Agreement
as if such terms were set forth in full therein.
Section 1.1 The definition of the term "Commitment" contained in
Section 1.1 of the Credit Agreement is hereby amended and restated in its
entirety as follows:
"Commitment" means, with respect to each Bank, subject
to the other provisions of this Agreement, the
obligation of such Bank to extend credit to the
Borrower hereunder in the following aggregate principal
amount, as such amount may be reduced or otherwise
modified from time to time
BANK COMMITMENT
---- ----------
The Chase Manhattan Bank $ 75,000,000
Bank of America $ 45,000,000
Xxxxx Fargo Bank, N.A. $ 40,000,000
Dresdner Bank A.G. $ 40,000,000
First Union National Bank $ 40,000,000
Fleet Bank, National Association $ 40,000,000
Credit Lyonnais, New York Branch $ 30,000,000
European American Bank $ 25,000,000
Key Bank National Association $ 25,000,000
HSBC Bank USA $ 25,000,000
The Bank of New York $ 15,000,000
__________
$400,000,000
Section 1.2. The definition of the term "Consolidated Net Income"
contained in Section 1.1 of the Credit Agreement is hereby amended by deleting
the phrase "without giving effect to up to a maximum of $100,000,000 additional
restructuring charges during the term of this Agreement" therefrom and by
substituting the following in its place: "without giving effect to additional
restructuring charges incurred on or prior to January 3, 1999."
Section 1.3. The term "Letter of Credit Commitment" contained in
Section 1.1 of the Credit Agreement is hereby deleted and the following is
substituted in its place:
"Letter of Credit Sublimit" means, with respect to each
Bank, the obligation of such Bank to purchase
participating interests in each outstanding Letter of
Credit, including the Letters of Credit in existence on
May 18, 1999, issued by the Agent from time to time
hereunder in an aggregate maximum face amount not to
exceed at any time the product of (i) its Commitment
Proportion and (ii) the lesser of (A) $75,000,000 or
(B) the Total Commitments less Aggregate Outstandings."
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In addition, all references in the Credit Agreement to "Letter of
Credit Commitment" shall be deemed to be references to "Letter of Credit
Sublimit".
Section 1.4. The definition of the term "Level" contained in Section
1.1 of the Credit Agreement is hereby amended by deleting the chart therefrom
and by substituting the following in its place:
Borrower's Senior Margin for Eurocurrency
Unsecured Long Loans and Letter
Level Term Debt Rating of Credit Fees Facility Fee
----- ---------------- --------------- ------------
Level 1 Greater than or equal to 30 basis points 10 basis points
Standard & Poor's AA- and
Moody's Aa3
Xxxxx 0 Less than Standard & Poor's 37.50 basis points 12.50 basis points
AA- and Moody's Aa3 but
greater than or equal to
Standard & Poor's A- and
Moody's A3
Level 3 Less than Standard & Poor's 57.50 basis points 17.50 basis points
A- and Moody's A3 but
greater than or equal to
Standard & Poor's BBB+ and
Moody's Xxx0
Xxxxx 0 Xxxxxxxx & Xxxx'x XXX and 80 basis points 20.00 basis points
Moody's Xxx0
Xxxxx 0 Xxxxxxxx & Xxxx'x XXX- and 125 basis points 25 basis points
Moody's Baa3
Level 6 Less than or equal to 162.5 basis points 37.50 basis points
Standard & Poor's BB+ and
Moody's Ba1
Section 1.5. The definition of the term "Revolving Credit Commitment"
contained in Section 1.1 of the Credit Agreement is hereby amended by deleting
the reference therein to "$325,000,000" and by substituting in its place the
following: "$400,000,000".
Section 1.6. Section 1.1 of the Credit Agreement is hereby further
amended by inserting the following terms therein in alphabetical order:
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"After Tax Settlement and Related Charges" means
approximately $70,000,000 of after-tax Settlement and
Related Charges.
"Settlement" means the settlement of two federal
investigations focusing on certain of the Borrower's
subsidiaries' Medicare cost reports and transactions
with Columbia/HCA Healthcare Corp.
"Settlement and Related Charges" means the
non-recurring charges of approximately $102,000,000
incurred by the Borrower during its fiscal year ending
January 2, 2000 relating to the Settlement and to the
realignment of the Borrower's business units intended
to lower the Borrower's cost base, improve efficiencies
and refocus its marketing efforts.
Section 1.7. Section 2.1 of the Credit Agreement is hereby amended by
deleting the proviso at the end of the first sentence thereof and by
substituting the following in its place: "provided, that no Loan shall be made
if after giving effect to such Loan the Aggregate Outstandings at the time of
such Loan would exceed the Revolving Credit Commitment in effect on such date.
Section 1.8. Section 2.8(a) of the Credit Agreement is hereby amended
by deleting the proviso at the end of the first sentence thereof and by
inserting the following in its place: "provided that (i) the Aggregate LC
Outstandings shall not exceed at any time the aggregate of the Letter of Credit
Sublimits and (ii) no Letter of Credit shall be issued if, after giving effect
to such issuance, the Aggregate Outstandings at the time of such issuance would
exceed the Total Commitments in effect on such date.
Section 1.9. Section 8.7 of the Credit Agreement is hereby amended
and restated to provide in its entirety as follows:
"Make any Acquisition other than an Acceptable
Acquisition; provided, however, that neither the
Borrower nor any of its Subsidiaries shall make any
Acceptable Acquisition after May 18, 1999 if the
aggregate consideration paid by the Borrower or its
Subsidiaries in connection with any and all such
Acquisitions exceeds $30,000,000 without the prior
written consent of the Required Banks, except that, at
any time after delivery of the Borrower's financial
statements for the fiscal quarter ended October 3,
1999, if the Borrower shall have been in compliance
with all terms and conditions of this Agreement for the
two then most recently completed consecutive fiscal
quarters, if the aggregate consideration paid in
connection with any such Acquisition exceeds
$200,000,000 without the prior written consent of the
Required Banks.
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Section 1.10. Section 8.9 of the Credit Agreement is hereby amended
by deleting the last sentence therefrom.
Section 1.11. Article 8 of the Credit Agreement is hereby amended by
inserting a new Section 8.11 therein which provides in its entirety as follows:
Section 8.11. Redemptions. Without limiting the
application of Section 8.3 hereof, redeem or otherwise
purchase or acquire, or permit any Subsidiary to redeem
or otherwise purchase or acquire any of its issued and
outstanding capital stock or enter into, or permit any
Subsidiary to enter into, any agreement to redeem or
otherwise purchase or acquire any of its issued and
outstanding capital stock.
Section 1.12. Effective April 5, 1999, Section 9.1 (Minimum
Consolidated Interest Coverage) of the Credit Agreement is hereby amended by
deleting the chart therefrom and by substituting the following in its place:
Period Ratio
------ -----
April 5, 1999 - July 4, 1999 3.00:1.00
July 5, 1999 - January 2, 2000 3.10:1.00
January 3, 2000 - December 31, 2000 3.50:1.00
January 1, 2001 and thereafter 3.75:1.00
Section 1.13. Effective April 5, 1999, Section 9.2 (Ratio of
Consolidated Funded Debt to Consolidated EBITDA) of the Credit Agreement is
hereby amended by deleting the chart therefrom and by substituting the following
in its place:
Period Ratio
------ -----
April 5, 1999 - July 4, 1999 3.75:1.00
July 5, 1999 - October 3, 1999 3.75:1.00
October 4, 1999 - January 2, 2000 3.50:1.00
January 3, 2000 and thereafter 3.25:1.00
Section 1.14. Effective January 4, 1999, Sections 9.1 and 9.2 of the
Credit Agreement are hereby further amended by inserting at the end of each such
Section the following: "For purposes of calculating compliance with this
covenant, any calculations using Consolidated EBITDA for any period included in
the Borrower's fiscal year ending January 2, 2000 shall be calculated without
giving effect to the Settlement and Related Charges. In addition, for the
Borrower's fiscal quarter ending July 4, 1999 only, to the extent that the
Borrower or any of its Subsidiaries has incurred Debt to fund the Settlement, up
to $61,000,000 of such Debt (plus all interest accrued thereon) shall be
excluded for purposes of calculating compliance with this covenant.
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Section 1.15. Effective January 4, 1999, Section 9.3 (Minimum
Consolidated Net Worth) of the Credit Agreement is hereby amended and restated
to provide in its entirety as follows:
"The Borrower and its Consolidated Subsidiaries shall
maintain at all times a Consolidated Net Worth of not
less than actual Consolidated Net Worth as of the last
day of the then prior fiscal year plus 50% of positive
Consolidated Net Income for the then current fiscal
year to date. For purposes of calculating compliance
with this covenant for the periods ending on or before
January 2, 2000, Consolidated Net Worth shall be
increased by the After Tax Settlement and Related
Charges incurred by the Borrower during its fiscal year
ending January 2, 2000."
ARTICLE 2.
WAIVERS TO CREDIT AGREEMENT
Section 2.1. The Banks hereby waive compliance with the provisions of
Section 7.6 of the Credit Agreement to the extent, if any, that such provision
would be violated in connection with the Settlement and the Borrower's
activities relating thereto for the Borrower's fiscal year ending January 2,
2000.
Section 2.2. The waiver set forth above is limited specifically to the
matter set forth above and for the specific instance and purpose given and does
not constitute directly or by implication a waiver or amendment of any other
provision of the Credit Agreement or a waiver of any Default or Event of Default
(except as contemplated by Section 2.1 hereof) under the Credit Agreement.
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ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Banks that:
Section 3.1. Except to the extent previously disclosed in writing to
the Banks, each of the representations and warranties set forth in Article 6 of
the Credit Agreement is true as of the date hereof with respect to the Borrower
and, to the extent applicable, the Guarantor and each of their Subsidiaries and
with the same effect as though made on the date hereof, and is hereby
incorporated herein in full by reference as if fully restated herein in its
entirety. In addition, in order to induce the Banks to enter into this
Amendment, the Borrower hereby covenants, represents and warrants to the Banks
that, except as disclosed to the Banks in connection with the Settlement, since
April 4, 1999 there has been no material adverse change in the business,
operations, properties or financial condition of the Borrower or of the
Borrower, Guarantor and their Subsidiaries taken as a whole.
Section 3.2. To induce the Banks and the Agent to enter into this
Amendment No. 6 and to continue to make advances to the Borrower pursuant to the
Credit Agreement, as amended hereby, the Borrower hereby acknowledges and agrees
that, as of the date hereof, and after giving effect to the terms hereof, there
exists (i) no Event of Default (or any event which, with the giving of notice or
the passage of time, or both, would constitute an Event of Default); and (ii) no
right of offset, defense, counterclaim, claim or objection in favor of the
Borrower arising out of or with respect to any of the Obligations.
Section 3.3. The Borrower has the corporate power and authority to
enter into, perform and deliver this Amendment No. 6 and any other documents,
instruments, agreements or other writings to be delivered in connection
herewith. This Amendment No. 6 and all documents contemplated hereby or
delivered in connection herewith, have each been duly authorized, executed and
delivered and the transactions contemplated herein have been duly authorized.
Section 3.4. This Amendment No.6 and any other documents, agreements
or instruments now or hereafter executed and delivered to the Banks by the
Borrower in connection herewith constitute (or shall, when delivered,
constitute) valid and legally binding obligations of Borrower, each of which is
and shall be enforceable against Borrower in accordance with their respective
terms.
Section 3.5. No representation, warranty or statement by the Borrower
contained herein or in any other document to be furnished by the Borrower in
connection herewith contains, or at the time of delivery shall contain, any
untrue statement of material fact, or omits or at the time of delivery shall
omit to state a material fact necessary to make such representation, warranty or
statement not misleading.
Section 3.6. No consent, waiver or approval of any entity is or will be
required in connection with the execution, delivery, performance, validity or
enforcement of this Amendment No. 6, or any other agreements, instruments or
documents to be executed and/or delivered in connection herewith or pursuant
hereto.
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ARTICLE 4.
MISCELLANEOUS
Section 4.1. This Amendment No. 6 may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Amendment No. 6 by signing any
such counterpart.
Section 4.2. This Amendment No. 6 shall be effective when, and only
when the Agent shall have received counterparts of this Amendment No. 6 executed
by the Borrower, the Agent and each of the Banks.
Section 4.3. This Amendment No.6 shall be governed by, and interpreted
and construed in accordance with, the laws of the State of New York (without
giving effect to the conflict of laws provisions thereof).
Section 4.4. On and after the effective date of this Amendment No. 6,
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import referring to the Credit Agreement, and each
reference in the Facility Documents to "the Credit Agreement", "thereunder",
"thereof", or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement as amended by this Amendment No. 6.
The Credit Agreement, as amended by this Amendment No. 6, is and shall continue
to be in full force and effect and is hereby in all respects ratified and
confirmed.
Section 4.5. The Borrower agrees to take such further actions as the
Agent shall reasonably request in connection herewith to evidence the amendments
herein contained to the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
OLSTEN CORPORATION
By:_____________________________
Name: Xxxxxx X. Xxxxxxxxx, Xx.
Title: Vice President
THE CHASE MANHATTAN BANK, as
Agent and a Bank
By:______________________________
Name:
Title:
0
XXXX XX XXXXXXX
By:______________________________
Name:
Title:
XXXXX FARGO BANK, N.A.
By:______________________________
Name:
Title:
DRESDNER BANK AG, New York Branch
and Grand Cayman Branch
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
FIRST UNION NATIONAL BANK
By:______________________________
Name:
Title:
FLEET BANK, NATIONAL ASSOCIATION
By:______________________________
Name:
Title:
9
CREDIT LYONNAIS, New York Branch
By:_____________________________
Name:
Title:
EUROPEAN AMERICAN BANK
By:_____________________________
Name:
Title:
KEY BANK NATIONAL ASSOCIATION
By:_____________________________
Name:
Title:
HSBC BANK USA
By:_____________________________
Name:
Title:
THE BANK OF NEW YORK
By:____________________________
Name:
Title:
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