REVOLVING LINE OF CREDIT NOTE
$8,000,000.00 Portland, Oregon
April 30, 2003
FOR VALUE RECEIVED, the undersigned BARRETT BUSINESS SERVICES, INC.
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at 1300 SW 5th Ave., Tower, 14th Floor,
Portland, Oregon 97201, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in immediately
available funds, the principal sum of Eight Million Dollars ($8,000,000.00), or
so much thereof as may be advanced and be outstanding, with interest thereon, to
be computed on each advance from the date of its disbursement as set forth
herein.
INTEREST:
(a) Interest. Unless the Addendum attached hereto requires an interest rate
adjustment, the outstanding principal balance of this Note shall bear interest
(computed on the basis of a 360-day year, actual days elapsed) at a rate per
annum two percent (2.00%) ("Prime Rate Margin") above the Prime Rate in effect
from time to time. The "Prime Rate" is a base rate that Bank from time to time
establishes and which serves as the basis upon which effective rates of interest
are calculated for those loans making reference thereto. Each change in the rate
of interest hereunder shall become effective on the date each Prime Rate change
is announced within Bank.
(b) Payment of Interest. Interest accrued on this Note shall be payable on
the last day of each month, commencing May 31, 2003.
(c) Default Interest. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.
BORROWING AND REPAYMENT:
(a) Borrowing and Repayment. Borrower may from time to time during the term
of this Note borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions of this Note
and of any document executed in connection with or governing this Note; provided
however, that the total outstanding borrowings under this Note shall not at any
time exceed the principal amount stated above. The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by the
holder hereof less the amount of principal payments made hereon by or for any
Borrower, which balance may be endorsed hereon from time to time by the holder.
The outstanding principal balance of this Note shall be due and payable in full
on March 31, 2004.
(b) Advances. Advances hereunder, to the total amount of the principal sum
stated above, may be made by the holder at the oral or written request of (i)
William W. Sherertz or Michael D. Mulholland, any one acting alone, who are
authorized to request advances and direct the disposition of any advances until
written notice of the revocation of such authority is received by the holder at
the office designated above, or (ii) any person, with respect to
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advances deposited to the credit of any deposit account of any Borrower, which
advances, when so deposited, shall be conclusively presumed to have been made to
or for the benefit of each Borrower regardless of the fact that persons other
than those authorized to request advances may have authority to draw against
such account. The holder shall have no obligation to determine whether any
person requesting an advance is or has been authorized by any Borrower.
(c) Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof.
EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms and conditions of
that certain Amended and Restated Credit Agreement between Borrower and Bank
dated as of September 2, 2002, as amended from time to time (the "Credit
Agreement"). Any default in the payment or performance of any obligation under
this Note, or any defined event of default under the Credit Agreement, shall
constitute an "Event of Default" under this Note.
MISCELLANEOUS:
(a) Remedies. Upon the sale, transfer, hypothecation, assignment or other
encumbrance, whether voluntary, involuntary or by operation of law, of all or
any interest in any real property securing this Note, or upon the occurrence of
any Event of Default, the holder of this Note, at the holder's option, may
declare all sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, notice of
nonperformance, notice of protest, protest or notice of dishonor, all of which
are expressly waived by each Borrower, and the obligation, if any, of the holder
to extend any further credit hereunder shall immediately cease and terminate.
Each Borrower shall pay to the holder immediately upon demand the full amount of
all payments, advances, charges, costs and expenses, including reasonable
attorneys' fees (to include outside counsel fees and all allocated costs of the
holder's in-house counsel), expended or incurred by the holder in connection
with the enforcement of the holder's rights and/or the collection of any amounts
which become due to the holder under this Note, and the prosecution or defense
of any action in any way related to this Note, including without limitation, any
action for declaratory relief, whether incurred at the trial or appellate level,
in an arbitration proceeding or otherwise, and including any of the foregoing
incurred in connection with any bankruptcy proceeding (including without
limitation, any adversary proceeding, contested matter or motion brought by Bank
or any other person) relating to any Borrower or any other person or entity.
(b) Obligations Joint and Several. Should more than one person or entity
sign this Note as a Borrower, the obligations of each such Borrower shall be
joint and several.
(c) Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Oregon.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY BANK AFTER
OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR
PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY BANK TO BE
ENFORCEABLE.
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This Note is secured by, among other collateral, two Deeds of Trust dated
September 2, 2002, as modified from time to time.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above.
BARRETT BUSINESS SERVICES, INC.
By: /s/ Michael D. Mulholland
-----------------------------
Title: Vice President-Finance
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ADDENDUM TO PROMISSORY NOTE
(PRIME RATE PRICING ADJUSTMENTS)
THIS ADDENDUM is attached to and made a part of that certain promissory
note executed by BARRETT BUSINESS SERVICES, INC. ("Borrower") and payable to
WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank"), or order, dated as of April 30,
2003, in the principal amount of Eight Million Dollars ($8,000,000.00) (the
"Note").
The following provisions are hereby incorporated into the Note to reflect
the interest rate adjustments agreed to by Bank and Borrower:
INTEREST RATE ADJUSTMENTS:
(a) Initial Prime Rate Margin. The initial Prime Rate Margin applicable to
this Note shall be as set forth in the "Interest" paragraph herein.
(b) Prime Rate Adjustments. In addition to any interest rate adjustments
resulting from changes in the Prime Rate, Bank shall, if applicable, adjust the
Prime Rate Margin under the Note, to reflect a change in Borrower's Funded Debt
to EBITDA Ratio or EBITDA Coverage Ratio (as defined in the Credit Agreement
referenced in the Note), in accordance with grid set forth below. If required by
the grid, Bank shall adjust the Prime Rate Margin on a quarterly basis
commencing upon Bank's receipt and review of Borrower's Form 10-Q Report for
fiscal quarter ending June 30, 2003 filed with the Securities and Exchange
Commission ("SEC"), and thereafter upon Bank's receipt and review of Borrower's
Form 10-Q filed with the SEC for the fiscal quarter ending September 30, 2003
and upon Bank's receipt and review of Borrower's Form 10-K filed with the SEC
for the fiscal year ending December 31, 2003; provided however, that Bank shall
not be required to adjust the Prime Rate Margin unless in its sole discretion it
agrees with the Form 10-K or Form10-Q delivered to Bank and provided further
that nothing contained herein shall be construed to require the Bank to adjust
the Prime Rate Margin after the maturity date of the Note.
Applicable
Pricing Funded Debt to Prime Rate
Level: EBITDA Ratio or EBITDA Coverage Ratio Margin
- ------ ------------ --------------------- ------
1 Greater than 4.00 to 1.0 Less than 1.00 to 1.0 2.00%
2 Greater than 2.25 to 1.0 Less than 1.75 to 1.0 but
but less than or equal greater than or equal
to 4.00 to 1.0 to 1.00 to 1.0 1.50%
3 Less than or equal Greater than or equal
to 2.25 to 1.0 to 1.75 to 1.0 1.00%
Each such adjustment shall be effective on the first Business Day after which
Bank receives and reviews Borrower's Form 10-K or Form 10-Q as set forth above.
Notwithstanding the pricing grid and the Prime Rate Margin adjustments set forth
above, the Bank shall not be required to and shall have no liability to Borrower
for failing to adjust the Prime Rate Margin at any time should Borrower fail to
comply with any of the terms and conditions of
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the Credit Agreement, including but not limited to the provisions set forth in
Section 4.9 of the Credit Agreement.
IN WITNESS WHEREOF, this Addendum has been executed as of the same date as
the Note.
BARRETT BUSINESS SERVICES, INC.
By: /s/ Michael D. Mulholland
-----------------------------
Title: Vice President-Finance