Exhibit 10.13
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT, dated as of April 24, 2009 (this
“Amendment”), is among KELLY SERVICES, INC., a Delaware corporation(the
“Company”), the Foreign Subsidiary Borrowers set forth on the signature pages
hereof (together with the Company, the “Borrowers”), the lenders set forth on
the signature pages hereof (collectively, the “Lenders”) and JPMORGAN CHASE
BANK, N.A. a national banking association, as administrative agent for the
Lenders (in such capacity, the “Agent”).
RECITALS
A. The Borrowers, the Agent and the Lenders are parties to a Loan Agreement,
dated as of November 30, 2005 (as now and hereafter amended, the “Loan
Agreement”), pursuant to which the Lenders agreed, subject to the terms and
conditions thereof, to extend credit to the Borrowers.
B. The Borrowers desire to amend the Loan Agreement and the Agent and the
Lenders are willing to do so strictly in accordance with the terms hereof.
TERMS
In consideration of the premises and of the mutual agreements herein contained,
the parties agree as follows:
ARTICLE 1.
AMENDMENTS
Upon fulfillment of the conditions set forth in Article 3 hereof, the Loan
Agreement shall be amended as follows:
1.1 The definition of “EBITDA” in Section 1.1 shall be amended by adding the
following language at the end thereof:
“plus (e) for any calculation including the fiscal quarter ending September 30,
2008, an amount equal to $23,460,000 relating to charges taken for past
litigation, plus (f) for any calculation including the fiscal quarter ending
December 31, 2008, an amount equal to $1,500,000 relating to restructuring
charges, plus (g) an amount not to exceed $5,000,000 in aggregate amount
relating to future cash restructuring charges taken by the Company on or after
January 1, 2009, which add-back shall be taken by the Company in the quarter in
which any such charges were taken and shall continue for any calculation
thereafter which includes such quarter.”
1.2 The following definitions in Section 1.1 are restated to read as follows:
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1% and (c) the Adjusted LIBO Rate for a
one month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that, for the avoidance of
doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing
on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at
approximately 11:00 a.m. London time on such day (without any rounding). Any
change in the Alternate Base Rate due to a change in the Prime Rate, the Federal
Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate, respectively.
“Floating Rate” means, for any day, a rate per annum equal to (i) the Alternate
Base Rate for such day, in each case changing when and as the Alternate Base
Rate changes, plus (ii) the Applicable Margin.

 

 

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1.3 The following definitions shall be added to Section 1.1 in appropriate
alphabetical order:
“Adjusted LIBO Rate” means, with respect to any calculation of the Alternate
Base Rate, the quotient of (i) the Eurocurrency Reference Rate for deposits in
Dollars divided by (ii) one minus the Reserve Requirement (expressed as a
decimal).
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.
“First Amendment Effective Date” means April 24, 2009.
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in any
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests in any Borrower or any Subsidiary or any option,
warrant or other right to acquire any such Equity Interests in any Borrower or
any Subsidiary.
1.4 Section 6.12(k) shall be restated as follows:
(k) (x) Liens encumbering Property of the Company or any Subsidiary securing
Indebtedness of the Company or any Subsidiary and (y) unsecured Indebtedness of
Subsidiaries, in each case, in addition to the Liens and Indebtedness described
in clauses (a) through (j) above, in an aggregate amount not exceeding 10% of
the consolidated Net Worth of the Company and its Subsidiaries.
1.5 Section 6.15 shall be restated as follows:
6.15 Interest Coverage Ratio. The Company shall not permit its Interest Coverage
Ratio as of the last day of each fiscal quarter to be less than (i) as of the
fiscal quarter ending March 31, 2009, 5.0 to 1.0; (ii) as of the fiscal quarter
ending December 31, 2009, 3.5 to 1.0; (iii) as of the fiscal quarters ending
March 31, 2010 and June 30, 2010, 4.0 to 1.0; and (iv) thereafter, 5.0 to 1.0.
The Interest Coverage Ratio shall not be tested for the fiscal quarters ending
June 30, 2009 and September 30, 2009.
1.6 New Sections 6.17 and 6.18 shall be added at the end of Article VI to read
as follows:
6.17. Restricted Payments. The Company will not, nor will it permit any
Subsidiary to, declare or make, or agree to pay or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so, except (i) the Borrower may declare and pay dividends with respect to its
common stock payable solely in additional shares of its common stock, and, with
respect to its preferred stock, payable solely in additional shares of such
preferred stock or in shares of its common stock, and (ii) Subsidiaries may
declare and pay dividends or other distributions to the Company or to another
Subsidiary, provided, that, if the Agent determines that the Company is in
compliance with the Interest Coverage Ratio pursuant to Section 6.15 as of the
fiscal quarter ending December 31, 2009, the restrictions set forth in this
Section 6.17 shall no longer be applicable and the Company may thereafter make
Restricted Payments.
6.18. Minimum EBITDA. The Company shall have EBITDA of not less than (i)
$5,000,000 at June 30, 2009 for the 12-month period then ending; and (ii)
$2,000,000 at September 30, 2009 for the fiscal quarter ended then ending.

 

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1.7 The Pricing Schedule attached as Exhibit A to the Loan Agreement shall be
replaced with the Pricing Schedule attached to this Amendment as Exhibit A. The
changes in the Applicable Margin reflected on the attached Pricing Schedule
shall be effective as of April 24, 2009.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to the Agent and the Lenders that, after
giving effect to this Amendment:
2.1 The execution, delivery and performance of this Amendment is within its
powers, has been duly authorized and is not in contravention with any law, of
the terms of its Certificate of Incorporation or By-laws, or any undertaking to
which it is a party or by which it is bound.
2.2 This Amendment is the legal, valid and binding obligation of the Borrower
enforceable against it in accordance with the terms hereof.
2.3 After giving effect to the amendments herein contained, the representations
and warranties contained in Article V of the Loan Agreement are true on and as
of the date hereof with the same force and effect as if made on and as of the
date hereof.
2.4 No Default or Unmatured Default exists or has occurred and is continuing on
the date hereof.
ARTICLE 3.
CONDITIONS OF EFFECTIVENESS
This Amendment shall become effective upon the first date (the “Effective Date”)
on which each of the following conditions to effectiveness have been satisfied:
3.1 This Amendment shall be signed by the Borrowers, the Agent and the Required
Lenders and delivered to the Agent.
3.2 The Borrowers shall have delivered or caused to be delivered to the Agent
such other documents and instruments as the Agent may request in connection
therewith.
ARTICLE 4.
MISCELLANEOUS.
4.1 On the date hereof, the Borrowers agrees to pay an upfront fee to each
Lender in an amount equal to 25.0 basis points on the amount of each Lender’s
Commitment, which fees shall be distributed to such Lenders on or within two
Business Days after the date hereof.
4.2 This Amendment shall be governed by and construed in accordance with the
laws of the State of Michigan.
4.3 References in the Loan Agreement or in any note, certificate, instrument or
other document to the “Loan Agreement” shall be deemed to be references to the
Loan Agreement as amended hereby and as further amended from time to time.
4.4 The Borrowers agree to pay and to save the Agent harmless for the payment of
all costs and expenses arising in connection with this Amendment, including the
reasonable fees of counsel to the Agent in connection with preparing this
Amendment and the related documents.

 

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4.5 The Borrowers acknowledge and agree that the Agent and the Lenders have
fully performed all of their obligations under all documents executed in
connection with the Loan Agreement and all actions taken by the Agent and the
Lenders are reasonable and appropriate under the circumstances and within their
rights under the Loan Agreement and all other documents executed in connection
therewith and otherwise available. Each Borrower represents and warrants that it
is not aware of any claims or causes of action against the Agent or any Lender,
any participant lender or any of their successors or assigns.
4.6 Except as expressly amended hereby, the Borrowers agree that the Loan
Agreement and all other documents and agreements executed by the Borrowers in
connection with the Loan Agreement in favor of the Agent or any Lender are
ratified and confirmed and shall remain in full force and effect and that it has
no set off, counterclaim or defense with respect to any of the foregoing. Terms
used but not defined herein shall have the respective meanings ascribed thereto
in the Loan Agreement.
4.7 This Amendment may be signed upon any number of counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument and
signatures sent by facsimile or electronic mail message shall be enforceable as
originals.

 

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IN WITNESS WHEREOF, the parties signing this Amendment have caused this
Amendment to be executed and delivered as of April 24, 2009.

            KELLY SERVICES, INC.
      By:   /s/ Joel Starr        Print Name:  Joel Starr        Title: 
Treasurer   

            KELLY SERVICES SINGAPORE PTE LTD.
      By:   /s/ Joel Starr         Print Name:  Joel Starr        Title: 
Treasurer   

            JPMORGAN CHASE BANK, N.A., as Agent and as a Lender
      By:   /s/ Thomas A. Gamm         Print Name:  Thomas A. Gamm       
Title:  Senior Vice President   

            KEYBANK, NATIONAL ASSOCIATION
      By:   /s/ David M. Morris         Print Name:  David M. Morris           
 

            PNC BANK, NATIONAL ASSOCIATION        By:   /s/ Louis K. McLinden  
      Print Name:  Louis K. McLinden        Title:  Managing Director   

 

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            COMERICA BANK
      By:   /s/ Jessica M. Migliore         Print Name:  Jessica M. Migliore    
    Title:  Assistant Vice President    

            U.S. BANK NATIONAL ASSOCIATION
      By:   /s/ Jeffrey S. Johnson         Print Name:  Jeffrey S. Johnson      
  Title:  Vice President    

            BNP PARIBAS
      By:   /s/ Michael Shryock         Print Name:  Michael Shryock        
Title:  Managing Director        
      By:   /s/ Andrew Strait         Print Name:  Andrew Strait         Title: 
Managing Director    

            THE BANK OF TOKYO — MITSUBISHI UFJ, LTD.,
      By:   /s/ Victor Pierzchalski         Print Name:  Victor Pierzchalski    
    Title:  Authorized Signatory    

            RBS CITIZENS, N.A., formerly known as CHARTER ONE BANK, N.A.
      By:   /s/ Oliver J. Glenn         Print Name:  Oliver J. Glenn        
Title:  Senior Vice President    

 

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            ROYAL BANK OF CANADA
      By:   /s/ Dustin Craven         Print Name:  Dustin Craven         Title: 
Attorney-In-Fact    

            UNICREDIT spa New York Branch, fka Unicredito Italiano
      By:   /s/ Ken Hamilton         Print Name:  Ken Hamilton, Attorney-In-Fact
        Title:  Director, Bayerische Hypo- Und Vereinsbank Ag, New York Branch,
Unicredit Group        
      By:   /s/ Ivana Albanese-Rizzo         Print Name:  Ivana Albanese-Rizzo,
Attorney-In-Fact         Title:  Managing Director, Bayerische Hypo- Und
Vereinsbank Ag, New York Branch, Unicredit Group    

            WELLS FARGO BANK, N.A.
      By:   /s/ Thiplada Siddiqui         Print Name:  Thiplada Siddiqui        
Title:  Vice President    

            BANK OF AMERICA, N.A.
      By:   /s/ Michael K. Makaitis         Print Name:  Michael K. Makaitis    
    Title:  Vice President    

 

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EXHIBIT A
PRICING SCHEDULE

                                    Level I     Level II     Level III     Level
IV   Applicable Margin   Status     Status     Status     Status  
Eurocurrency Rate
  230.0 bps   250.0 bps   270.0 bps   285.0 bps
Floating Rate
  130.0 bps   150.0 bps   170.0 bps   185.0 bps
LC Fee
  230.0 bps   250.0 bps   270.0 bps   285.0 bps
Facility Fee
  20.0 bps   25.0 bps   30.0 bps   40.0 bps

For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:
“Financials” means the annual or quarterly financial statements of the Company
delivered pursuant to Sections 6.1(a) or (b).
“Level I Status” exists at any date if, as of the last day of the fiscal quarter
of the Company referred to in the most recent Financials, the Total Indebtedness
to Total Capitalization Ratio is less than 0.20 to 1.00.
“Level II Status” exists at any date if, as of the last day of the fiscal
quarter of the Company referred to in the most recent Financials, (i) the
Company has not qualified for Level I Status and (ii) the Total Indebtedness to
Total Capitalization Ratio is less than 0.30 to 1.00.
“Level III Status” exists at any date if, as of the last day of the fiscal
quarter of the Company referred to in the most recent Financials, (i) the
Company has not qualified for Level I Status or Level II Status and (ii) the
Total Indebtedness to Total Capitalization Ratio is less than 0.40 to 1.00.
“Level IV Status” exists at any date if the Company has not qualified for Level
I Status, Level II Status or Level III Status.
“Status” means Level I Status, Level II Status, Level III Status or Level IV
Status.
The Applicable Margin shall be determined in accordance with the foregoing table
based on the Company’s Status as reflected in the then most recent Financials.
Adjustments, if any, to the Applicable Margin shall be effective five Business
Days after the Agent has received the applicable Financials. If the Company
fails to deliver the Financials to the Agent at the time required pursuant to
the Credit Agreement, then the Applicable Margin shall be the highest Applicable
Margin set forth in the foregoing table until five days after such Financials
are so delivered.

 

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