Fifth Amendment to Credit Agreement among Westaff (USA), Inc., Western Medical Services, Inc., and Bank of America, N.A.

Summary

This amendment updates the existing credit agreement between Westaff (USA), Inc., Western Medical Services, Inc., Bank of America, N.A. (as agent), and other participating banks. The amendment revises certain definitions, updates schedules, and allows for specific contingent obligations related to surety bonds. It confirms that all other terms of the original credit agreement remain in effect. The amendment is effective as of November 7, 2000, provided all parties sign and an amendment fee is paid. The agreement is governed by California law.

EX-10.8-16 3 a2036052zex-10_816.txt FIFTH AMEND. TO CREDIT AGMT EXHIBIT 10.8.16 FIFTH AMENDMENT TO CREDIT AGREEMENT THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (the "AMENDMENT"), dated as of November 7, 2000, is entered into by and among WESTAFF (USA), INC. ("WSS"), WESTERN MEDICAL SERVICES, INC. ("WMS" and together with WSS, collectively, the "BORROWERS" and individually, a "BORROWER"), BANK OF AMERICA, N.A., as agent for itself and the Banks (the "AGENT"), and the several financial institutions party to the Credit Agreement (collectively, the "BANKS"). RECITALS A. The Borrowers, Banks, and Agent are parties to a Credit Agreement dated as of March 4, 1998, and amendments thereto dated as of May 15, 1998, July 23, 1998, January 22, 1999, and December 15, 1999 (collectively, the "CREDIT AGREEMENT") pursuant to which the Agent and the Banks have extended certain credit facilities to the Borrowers. B. The Borrowers have requested that the Banks agree to certain amendments of the Credit Agreement. C. The Banks are willing to amend the Credit Agreement, subject to the terms and conditions of this Amendment. AGREEMENT NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. DEFINED TERMS. Unless otherwise defined herein, capitalized terms used herein shall have the meanings, if any, assigned to them in the Credit Agreement. 2. AMENDMENTS TO CREDIT AGREEMENT. (a) The definition of "Guarantor" in Section 1.01 of the Agreement is amended to read as follows in its entirety: "GUARANTOR" means, when used in the singular, any one of, and, when used in the plural, collectively all of, the following companies: the Parent, WESTERN MEDICAL SERVICES (NY), INC. (formerly known as Western Staff Services (NY), Inc.), a New York corporation, WESTERN TECHNICAL SERVICES, INC., a California corporation, MEDIAWORLD INTERNATIONAL, a California corporation, and any other Person that may, after the date hereof, execute a guaranty of Borrowers' obligations under this Agreement. (b) Section 8.08 of the Credit Agreement is amended by replacing the period at the end of subsection (g) with a semicolon followed by the word "and" and by the addition of a new subsection (h) thereto to read as follows: (h) Contingent Obligations in an aggregate amount -1- not exceeding Eleven Million Eight Hundred Forty Two Thousand Five Hundred Dollars ($11,842,500) arising in respect of any surety bond issued by Fireman's Fund Insurance Company in connection with the Borrowers' workers' compensation obligations. (c) The definition of "Cash Flow for Debt Service" set forth in Section 8.17 of the Credit Agreement is amended by replacing the words "cash dividends" with "dividends declared." (d) Schedule 6.19 to the Credit Agreement is replaced with the revised Schedule 6.19 attached hereto. (e) Schedule 11.02 to the Credit Agreement is replaced with the revised Schedule 11.02 attached hereto. 3. REPRESENTATIONS AND WARRANTIES. The Borrowers each hereby represent and warrant to the Agent and the Banks as follows: (a) No Default or Event of Default has occurred and is continuing, except those Defaults or Events of Default, if any, that have been disclosed in writing to the Agent and the Banks or waived in writing by the Agent and the Banks. (b) The execution, delivery and performance by the Borrowers of this Amendment have been duly authorized by all necessary corporate and other action and do not and will not require any registration with, consent or approval of, notice to or action by, any Person (including any Governmental Authority) in order to be effective and enforceable. The Credit Agreement as amended by this Amendment constitutes the legal, valid and binding obligations of the Borrowers, enforceable against each of them in accordance with its respective terms, without defense, counterclaim or offset. (c) All representations and warranties of the Borrowers contained in the Credit Agreement are true and correct. (d) Each of the Borrowers is entering into this Amendment on the basis of its own investigation and for its own reasons, without reliance upon the Agent and the Banks or any other Person. 4. EFFECTIVE DATE. This Amendment will become effective as of November 7, 2000 (the "EFFECTIVE DATE"), PROVIDED that each of the following conditions precedent is satisfied on or before November 7, 2000: (a) The Agent has received this Amendment duly executed by the Borrowers, the Agent, the Issuing Bank and each of the Banks, together with a duly executed Guarantor Acknowledgment and Consent in the form attached hereto. (b) The Agent has received from the Borrowers for the ratable account of the Banks an amendment fee in the amount of Fifty Thousand Dollars ($50,000). 5. RESERVATION OF RIGHTS. Each of the Borrowers acknowledges and agrees that the execution and delivery by the Agent and the Banks of this Amendment shall not be deemed to create a course of dealing or otherwise obligate the Agent or the Banks to forbear or execute similar amendments -2- under the same or similar circumstances in the future. 6. MISCELLANEOUS. (a) Except as herein expressly amended, all terms, covenants and provisions of the Credit Agreement are and shall remain in full force and effect and all references therein to such Credit Agreement shall henceforth refer to the Credit Agreement as amended by this Amendment. This Amendment shall be deemed incorporated into, and a part of, the Credit Agreement. (b) This Amendment shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective successors and assigns. No third party beneficiaries are intended in connection with this Amendment. (c) This Amendment shall be governed by and construed in accordance with the law of the State of California. (d) This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Each of the parties hereto understands and agrees that this document (and any other document required herein) may be delivered by any party thereto either in the form of an executed original or an executed original sent by facsimile transmission to be followed promptly by mailing of a hard copy original, and that receipt by the Agent of a facsimile transmitted document purportedly bearing the signature of a Bank or the Borrowers shall bind such Bank or the Borrowers, respectively, with the same force and effect as the delivery of a hard copy original. Any failure by the Agent to receive the hard copy executed original of such document shall not diminish the binding effect of receipt of the facsimile transmitted executed original of such document of the party whose hard copy page was not received by the Agent. (e) This Amendment, together with the Credit Agreement, contains the entire and exclusive agreement of the parties hereto with reference to the matters discussed herein and therein. This Amendment supersedes all prior drafts and communications with respect thereto. This Amendment may not be amended except in accordance with the provisions of Section 11.01 of the Credit Agreement. (f) If any term or provision of this Amendment shall be deemed prohibited by or invalid under any applicable law, such provision shall be invalidated without affecting the remaining provisions of this Amendment or the Credit Agreement, respectively. (g) Each of the Borrowers covenants to pay to or reimburse the Agent, upon demand, for all costs and expenses (including allocated costs of in-house counsel) incurred in connection with the development, preparation, negotiation, execution and delivery of this Amendment, including without limitation appraisal, audit, search and filing fees incurred in connection therewith. -3- IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the date first above written. WESTAFF (USA), INC. By /s/ PAUL A. NORBERG ------------------- Paul A. Norberg Executive Vice President and Chief Financial Officer By /s/ DIRK A. SODESTROM --------------------- Dirk A. Sodestrom Senior Vice President and Controller WESTERN MEDICAL SERVICES, INC. By /s/ GARY A. KITTLESON --------------------- Gary A. Kittleson Executive Vice President and Chief Financial Officer By /s/ GARY A. KITTLESON --------------------- Gary A. Kittleson Secretary BANK OF AMERICA, N.A., as Agent By /s/ DORA A. BROWN ----------------- Dora A. Brown Vice President BANK OF AMERICA, N.A., as a Bank and as Issuing Bank By /s/ LISA M. THOMAS ------------------ Lisa M. Thomas Senior Vice President COMERICA BANK-CALIFORNIA, as a Bank By /s/ SCOTT T. SMITH ------------------ Scott T. Smith Vice President -4- SANWA BANK CALIFORNIA, as a Bank By /s/ JOHN KING ------------- John King Vice President -5- GUARANTOR ACKNOWLEDGMENT AND CONSENT The undersigned, each a guarantor or third party pledgor with respect to the Borrowers' obligations to the Agent and the Banks under the Credit Agreement, each hereby (i) acknowledges and consents to the execution, delivery and performance by the Borrowers of the foregoing Fifth Amendment to Credit Agreement (the "AMENDMENT"), and (ii) reaffirms and agrees that the respective guaranty, third party pledge or security agreement to which the undersigned is party and all other documents and agreements executed and delivered by the undersigned to the Agent and the Banks in connection with the Credit Agreement are in full force and effect, without defense, offset or counterclaim. (Capitalized terms used herein have the meanings specified in the Amendment.) WESTAFF, INC. Dated: November 7, 2000 By /s/ PAUL A. NORBERG ------------------- Paul A. Norberg Executive Vice President and Chief Financial Officer By /s/ DIRK A. SODESTROM --------------------- Dirk A. Sodestrom Senior Vice President and Controller WESTERN MEDICAL SERVICES (NY), INC. Dated: November 7, 2000 By /s/ GARY A. KITTLESON --------------------- Gary A. Kittleson Executive Vice President and Chief Financial Officer By /s/ GARY A. KITTLESON --------------------- Gary A. Kittleson Secretary WESTERN TECHNICAL SERVICES, INC. Dated: November 7, 2000 By /s/ PAUL A. NORBERG ------------------- Paul A. Norberg Executive Vice President and Chief Financial Officer By /s/ DIRK A. SODESTROM --------------------- Dirk A. Sodestrom Senior Vice President and Controller -6- MEDIAWORLD INTERNATIONAL Dated: November 7, 2000 By /s/ PAUL A. NORBERG ------------------- Paul A. Norberg Executive Vice President and Chief Financial Officer By /s/ DIRK A. SODESTROM --------------------- Dirk A. Sodestrom Senior Vice President and Controller -7- SCHEDULE 6.19 SUBSIDIARIES AND EQUITY INVESTMENTS ACTIVE DOMESTIC SUBSIDIARIES Western Medical Services (NY), Inc. MediaWorld International INACTIVE DOMESTIC SUBSIDIARIES Western Technical Services, Inc. Western Legal Services, Inc. Western Television News, Inc. Western Permanent Services Agency, Inc. Westaff (CA), Inc. Western Service, Inc. Kontorservice, Inc. FOREIGN SUBSIDIARIES AUSTRALIA: Westaff (Australia) Pty. Ltd. Western Personnel Services Pty. Ltd. Western Temporary Services Pty. Ltd. DENMARK: Westaff A/S NEW ZEALAND: Westaff NZ Limited NORWAY: Westaff AS Kontorservice A/S SINGAPORE: Westaff (Singapore) Pte Ltd UNITED KINGDOM: Westaff (U.K.) Limited SCHEDULE 11.02 ADDRESSES FOR NOTICES BORROWERS Westaff (USA), Inc. Western Medical Services, Inc. P.O. Box 9280 301 Lennon Lane Walnut Creek, CA 94598 Attn: Paul A. Norberg Executive Vice President and Chief Financial Officer Telephone: (925) 930-5326 Facsimile: (925) 930-5361 E-mail: ***@*** -------------------- With a copy to (with respect to notices required under Articles IX and XI only): Legal Department P.O. Box 9280 301 Lennon Lane Walnut Creek, CA 94598 Attn: Robin Herman General Counsel Telephone: (925) 930-5349 Facsimile: (925) 937-0593 E-mail: ***@*** ------------------- BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, AS AGENT FOR ADMINISTRATIVE NOTICES REGARDING BORROWINGS, PAYMENTS, CONVERSIONS, CONTINUATION, LETTERS OF CREDIT, FEES AND INTEREST: Bank of America, N.A. Agency Administrative Services #5596 CA4-706-05-09 1850 Gateway Blvd. Concord, CA 94520 Attention: Kristine L. Kelleher Telephone: (925) 675-8373 Facsimile: (925) 969-2817 E-mail: ***@*** ------------------------------------- FOR NOTICES REGARDING WAIVERS, AMENDMENTS, FINANCIAL STATEMENTS, ASSIGNMENTS AND ALL OTHER NOTICES: Bank of America N.A. Commercial Agency Management WA1-501-37-20 800 Fifth Avenue, 37th Floor Seattle, WA 98104-3185 Attention: Dora A. Brown Vice President Telephone: (206) 358-0101 Facsimile: (206) 358-0971 E-mail: ***@*** ------------------------------ BANK OF AMERICA, N.A., AS A BANK Bank of America, N.A. Bay Area Commercial Banking Office #1473 CA5-102-LL-13 345 Montgomery Street San Francisco, CA 94104-1898 Attention: Lisa Thomas Senior Vice President Telephone: (415) 953-1069/BANet ###-###-#### Facsimile: (415) 622-1878/BANet ###-###-#### E-mail: ***@*** ----------------------------- DOMESTIC AND OFFSHORE LENDING OFFICE: 1850 Gateway Boulevard Concord, CA 94520 BANK OF AMERICA, N.A., AS ISSUING BANK Bank of America, N.A. International Trade Banking Division #5655 CA9-703-19-09 333 S. Beaudry Ave., 19th Floor Los Angeles, CA 90017-1466 COMERICA BANK - CALIFORNIA, AS A BANK Comerica Bank - California 155 Grand Avenue, Suite 402 Oakland, CA 94612 Attention: Scott T. Smith Vice President Telephone: (510) 645-2203 Facsimile: (510) 645-2220 E-mail: scott ***@*** -------------------------- DOMESTIC AND OFFSHORE LENDING OFFICE: 155 Grand Avenue, Suite 402 Oakland, CA 94612 SANWA BANK CALIFORNIA, AS A BANK Sanwa Bank California 601 S. Figueroa Street W-12-14 Los Angeles, CA 90017 Attention: John King Vice President Telephone: (213) 896-7489 Facsimile: (213) 892-7819 E-mail: ***@*** ------------------- DOMESTIC AND OFFSHORE LENDING OFFICE: 601 S. Figueroa Street W-12-14 Los Angeles, CA 90017