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EXHIBIT 10.13
FIRST AMENDMENT
TO FINANCING AGREEMENT
FIRST AMENDMENT, dated as of November 8, 2000 (this
"Amendment"), to the Financing Agreement, dated as of August 15, 2000 (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. RESTRICTED PAYMENTS. Section 7.02(h) of the Financing
Agreement is hereby amended by deleting both provisos therein and substituting
the following in lieu thereof:
"PROVIDED, HOWEVER, (i) Subsidiaries may make distributions to
the Parent, (ii) the Parent may make tax indemnification
payments to the original shareholders of the Parent in the
Fiscal Year ended April 1, 2001 in an aggregate amount not to
exceed $2,400,000, of which (A) not more than $2,000,000 shall
be from the proceeds of equity of the Parent sold to certain
original shareholders of the Parent and (B) not more than
$400,000 shall be in cash, (iii) the Parent may repurchase
warrants issued pursuant to the Securities Purchase Agreement
in accordance with the terms thereof, provided that such
repurchase is paid for with Par Notes (as defined in the
Securities Purchase Agreement), which Par Notes shall
constitute Subordinated Indebtedness hereunder pursuant to the
express terms of the Securities Purchase Agreement, and (iv)
the Parent may repurchase up to 430,775 options issued
pursuant to the Parent's incentive stock option plan at a
maximum aggregate cost of $130,000; PROVIDED, HOWEVER, that at
the election of the Collateral Agent, which the Collateral
Agent may and, upon the direction of the Required Lenders,
shall make by notice to the Loan Parties, no such payment
provided for in subclauses (i) through (iv) above shall be
made if an Event of Default shall have occurred and be
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continuing or would result from the making of any such payment
or, if either immediately before or after giving effect to any
such payment, the Loans and Letter of Credit Obligations
exceed the Borrowing Base."
3. CONSOLIDATED EBITDA. The first sentence of Section 7.03(b)
of the Financing Agreement is hereby amended in its entirety to read as follows:
"Permit Consolidated EBITDA of the Parent and its Subsidiaries
as at the end of each period of twelve (12) consecutive months
for which the last month ends during the period set forth
below to be less than the applicable amount set forth below:"
4. 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 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 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.
5. 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 it of
this Amendment and the performance by it 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 its organizational documents or any
applicable law or any contractual restriction binding or otherwise affecting it
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or any of its 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 its 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 it of this Amendment and (ii) the performance by it 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.
6. CONTINUED EFFECTIVENESS OF THE FINANCING AGREEMENT. Each of
the Borrowers and the Guarantors hereby confirms and agrees that, except as
otherwise provided in Section 5, (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 the Lien is hereby
ratified and confirmed in all respects.
7. 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 Schulte Roth & Zabel 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/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
OUTSOURCE INTERNATIONAL OF AMERICA, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
OUTSOURCE FRANCHISING, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
GUARDIAN EMPLOYER EAST, LLC
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: Manager
GUARDIAN EMPLOYER WEST, LLC
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: Manager
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GUARANTORS:
CAPITAL STAFFING FUND, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
OUTSOURCE FUNDING CORPORATION
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: President
SYNADYNE I, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
SYNADYNE II, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
SYNADYNE III, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
SYNADYNE IV, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
SYNADYNE V, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
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EMPLOYEES INSURANCE SERVICES, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
MASS STAFF, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
STAFF ALL, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
OUTSOURCE OF NEVADA, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
EMPLOYMENT CONSULTANTS, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
X-TRA HELP, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
CO-STAFF, INC.
By: /s/ Scott R. Francis
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Name: Scott R. Francis
Title: VP
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COLLATERAL AGENT AND LENDER:
ABLECO FINANCE LLC
By: /s/ Kevin Genda
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Name: Kevin Genda
Title: Senior Vice President
ADMINISTRATIVE AGENT AND LENDER:
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THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ Eric Malloy
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Name: Eric Malloy
Title: AVP/AE
LENDERS:
A2 FUNDING LP
By: A2 Fund Management LLC,
its General Partner
By: /s/ Kevin Genda
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Name: Kevin Genda
Title: Vice President
ABLECO HOLDING LLC
By: /s/ Kevin Genda
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Name: Kevin Genda
Title: Attorney-in-Fact
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