Exhibit 10.61


 


FOURTH AMENDMENT TO LETTER OF
CREDIT AGREEMENT


 


THIS FOURTH AMENDMENT TO LETTER OF CREDIT AGREEMENT (this “Amendment”), is made and
entered into as of December 19, 2002, by and between LABOR READY, INC., a Washington
corporation (“Debtor”),
and
GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation (“Creditor”).


 


W  I  T
N  E  S  E  T  H:


 


WHEREAS, Debtor and Creditor are parties to that
certain Letter of Credit Agreement dated as of March 1, 2001, as amended (the “Letter of Credit
Agreement”; capitalized terms used herein and not otherwise defined herein shall
have the meanings given such terms in the Letter of Credit Agreement or Annex
A thereto), whereby Creditor has agreed, subject to certain terms and
conditions, to incur Letter of Credit Obligations or cause the issuance of
Letters of Credit; and


 


WHEREAS, Creditor and Debtor desire to modify the
Letter of Credit Agreement in certain respects, all in accordance with and
subject to the terms and conditions set forth herein.


 


NOW THEREFORE, in consideration of the premises and mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:


 


1.                                       Amendments to Letter of
Credit Agreement.   Subject to the
terms and conditions of this Amendment, the Letter of Credit Agreement shall be
amended as follows:


 


1.1                                 Section 5 to the Letter of
Credit Agreement is hereby amended by adding a new Section 5.11 at the end
thereof to read in its entirety as follows:


 


5.11                           Maintenance of
Minimum Excess Liquidity.   On
and at all times after the Fourth Amendment Effective Date, the Credit Parties
shall maintain Excess Liquidity of not less than $45,000,000. Upon request of
Creditor from time to time, Debtor shall promptly furnish Creditor with
information necessary to verify compliance with this covenant.


 


1.2                                 Section 6.2 to the Letter of
Credit Agreement is hereby amended by amending and restated clause (b) thereof
to read in its entirety as follows:


 


(b)
each Credit Party may maintain its existing investments in its Subsidiaries as
of the Closing Date, and so long as no Default or Event of Default shall have
occurred and be continuing, Debtor may make additional investments in its


 

















 


Subsidiaries
(other than Workers’ Assurance) after the Closing Date in an amount not to
exceed $500,000 during any Fiscal Year;


 


1.3                                 Section 6.2 to the Letter of
Credit Agreement is hereby further amended by deleting the word “and” from the
end of clause (d), replacing the period at the end of clause (e) with “; and”
and adding new clause (f) at the end thereof to read in its entirety as
follows:


 


(f)
Debtor may make additional cash investments after the Fourth Amendment
Effective Date in Worker’s Assurance in an amount not to exceed $120,000,000 in
the aggregate for all such investments on and after the Fourth Amendment
Effective Date, and $30,000,000 in the aggregate for all such investments
consummated in any Fiscal Year, provided that each of the following
conditions are met (i) No Default or Event of Default has occurred and is
continuing on and as of the date of the proposed investment or would result
after giving effect to such proposed investment, (ii) Creditor shall have
received not less than 30 days prior written notice of such proposed
investment, (iii) not less than 30 days prior to the consummation of such
proposed investment, Creditor shall have received a certificate executed by the
Chief Financial Officer of Debtor in the form attached to the Fourth Amendment
as Exhibit A, which certificate must (A) demonstrate compliance with the
minimum EBITDA levels set forth under clause (iv) below of this Section
6.2(f) and (B) provide detailed liquidity projections for Debtor for the
period of ninety (90) consecutive days after the date of consummation of such
proposed investment, which projections must demonstrate to the satisfaction of
Creditor that Debtor is in compliance with Section 5.11 after giving
effect to such proposed investment and otherwise be in form and substance
satisfactory to Creditor, (iv) as of the most recently ended Fiscal Quarter,
Debtor has EBITDA, determined on a consolidated basis for Debtor and its
Subsidiaries for the Rolling Period then most recently ended, of not less than
the following:


 


	
  Fiscal Quarter

  	
   

  	
  Minimum EDITDA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The third Fiscal Quarter of Fiscal Year
  2002

  	
   

  	
  $

  	
  27,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The fourth Fiscal Quarter of Fiscal Year
  2002

  	
   

  	
  $

  	
  28,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The first Fiscal Quarter of Fiscal Year
  2003

  	
   

  	
  $

  	
  29,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The second Fiscal Quarter of Fiscal Year
  2003

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The third Fiscal Quarter of Fiscal Year
  2003

  	
   

  	
  $

  	
  28,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The fourth Fiscal Quarter  of Fiscal Year
  2003

  	
   

  	
  $

  	
  29,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The first Fiscal Quarter of Fiscal Year
  2004

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The second Fiscal Quarter of Fiscal Year
  2004

  	
   

  	
  $

  	
  30,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The third Fiscal Quarter of Fiscal Year
  2004

  	
   

  	
  $

  	
  31,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The fourth Fiscal Quarter of Fiscal Year
  2004

  	
   

  	
  $

  	
  31,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The first Fiscal Quarter of Fiscal Year
  2005

  	
   

  	
  $

  	
  32,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The second Fiscal Quarter of Fiscal Year
  2005

  	
   

  	
  $

  	
  34,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The third Fiscal Quarter of Fiscal Year
  2005

  	
   

  	
  $

  	
  36,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The fourth Fiscal Quarter of Fiscal Year
  2005

  	
   

  	
  $

  	
  37,000,000

  	
   

  



 


2

















 


1.4                                 Section 6.14 is hereby
deleted in its entirety and the following section is substituted in lieu
thereof to read in its entirety as follows:


 


6.14                           Restricted
Payments.   No
Credit Party shall make any Restricted Payment, except: (a)(i) intercompany
loans and advances between Debtor and its Subsidiaries (other than the Existing
Foreign Subsidiaries, LR Assurance and Workers’ Assurance) and (ii)
intercompany loans and advances between Debtor and the Existing Foreign
Subsidiaries and LR Assurance, so long as the aggregate of all such loans and
advances permitted under this clause (ii) does not exceed $500,000 during any
Fiscal Year; (b) dividends and distributions by Subsidiaries of Debtor paid to
Debtor; and (c) subject to the subordination provisions provided for in the
Subordinated Notes Indenture, scheduled semi-annual payments of interest to the
holders of the Subordinated Notes, in the manner provided for therein or
pursuant to the Subordinated Notes Indenture. Notwithstanding the foregoing,
this Section 6.14 shall not prohibit payments by Debtor to holders of
Debtor’s common stock in connection with the repurchases of such stock by
Debtor (“Permitted Stock Repurchases”) so long as the proposed payment,


 


3

















 


together with all other payments in connection
with other Permitted Stock Repurchases during any Fiscal Year, does not exceed
$5,000,000 in the aggregate, provided that, Debtor may make Permitted
Stock Repurchases in an additional amount not to exceed $10,000,000 in the
aggregate solely for the Fiscal Year 2003 (a “2003
Additional Stock Repurchase”), provided  further, Creditor
shall have received one day prior written notice of such proposed 2003
Additional Stock Repurchase certifying that, after giving effect to the
proposed 2003 Additional Stock Repurchase, Debtor would have had Excess
Liquidity equal to or greater than $60,000,000 for the 45 consecutive days
ended immediately prior to the date of such proposed 2003 Additional Stock Repurchase.


 


1.5                                Annex A to the Letter of
Credit Agreement is hereby amended by amending and restating the definition of
“Applicable L/C Margin” to read in its entirety as follows:


 


“Applicable L/C Margin” shall mean one percent
(1%) per annum.


 


1.6                                Annex A to the Letter of
Credit Agreement is hereby further amended by adding in alphabetical order the
following definitions:


 


“Fourth Amendment” means that certain
Fourth Amendment to Letter of Credit Agreement dated as of December 19, 2002,
between Debtor and Creditor.


 


“Fourth Amendment Effective Date” means
December 19, 2002.


 


“Rolling Period” shall mean, as of the end
of any fiscal quarter, the immediately preceding four (4) fiscal quarters,
including the fiscal quarter then ending.


 


2.                                       No Other Amendments.   Except for the amendments expressly set forth and
referred to in Section 1 above, the Letter of Credit Agreement shall
remain unchanged and in full force and effect. 
Without limiting the generality of the foregoing, the parties hereto
hereby acknowledge and agree that this Amendment is not intended to, nor shall
it be construed as, waiving any Default or Event of Default that now or
hereafter may exist as a result of any transactions between or among Debtor or
any other Credit Party, except for those transactions specifically described in
Section 1 of this Amendment.


 


3.                                       Representations and
Warranties.   Debtor hereby
represents and warrants to Creditor that (a) this Amendment has been duly
authorized, executed and delivered by Debtor, (b) after giving effect to this
Amendment, no Default or Event of Default has occurred and is continuing as of
this date, and (c) after giving effect to this Amendment, all of the
representations and warranties made by Debtor in the Letter of Credit Agreement
are true and correct in all material respects on and as of the date of this
Amendment (except to the extent that any such representations or warranties
expressly referred to a specific prior date). 
Any breach in any


 


4

















 


material
respect by Debtor of any of its representations and warranties contained in
this Section 3 shall be a Default and an Event of Default for all
purposes of the Letter of Credit Agreement.


 


4.                                       Ratification.   Debtor hereby ratifies and reaffirms each and
every term, covenant and condition set forth or incorporated by reference in
the Letter of Credit Agreement and all other documents delivered by Debtor in
connection therewith (including without limitation the other Letter of Credit
Documents to which Debtor is a party) effective as of the date hereof.


 


5.                                       Estoppel.   To induce Creditor to enter into this Amendment,
Debtor hereby acknowledges and agrees that, as of the date hereof, there exists
no right of offset, defense or counterclaim in favor of Debtor as against
Creditor with respect to the obligations of Debtor under the Letter of Credit
Agreement or the other Letter of Credit Documents, either with or without
giving effect to this Amendment.


 


6.                                       Conditions to Effectiveness.   Upon the receipt by Creditor of the following
items, this Amendment shall become effective as of the date first written
above:


 


6.1                                 this Amendment,
duly executed, completed and delivered by Debtor and each Guarantor;


 


6.2                                 the Fifth
Amendment to Securitization Agreements dated as of the date hereof, duly
executed by Debtor, Creditor, in various capacities, Receivables Subsidiary and
Redwood Receivables Corporation; and


 


6.3                                 evidence
satisfactory to the Creditor in its sole discretion that the Receivables
Subsidiary shall have repaid Receivables Advances in an amount such that, after
giving effect to such repayment, the sum of the outstanding principal balance
of Receivables Advances and the outstanding Letter of Credit Exposure on the
Fourth Amendment Effective Date does not exceed $80,000,000.


 


7.                                       Reimbursement of Expenses.   Debtor hereby agrees that it shall reimburse
Creditor on demand for all costs and expenses (including without limitation
reasonable attorney’s fees) incurred by such parties in connection with the
negotiation, documentation and consummation of this Amendment and the other
documents executed in connection herewith and therewith and the transactions
contemplated hereby and thereby.


 


8.                                       Governing Law.   THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK FOR CONTRACTS TO BE
PERFORMED ENTIRELY WITHIN SAID STATE.


 


9.                                       Severability of Provisions.   Any provision of this Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. To


 


5

















 


the extent
permitted by applicable law, Debtor hereby waives any provision of law that
renders any provision hereof prohibited or unenforceable in any respect.


 


10.                                 Counterparts.   This Amendment may be executed in any number of
several counterparts, all of which shall be deemed to constitute but one
original and shall be binding upon all parties, their successors and permitted
assigns.


 


11.                                 Entire Agreement.   The Letter of Credit Agreement as amended from
time to time and by this Amendment embodies the entire agreement between the
parties hereto relating to the subject matter hereof and supersedes all prior
agreements, representations and understandings, if any, relating to the subject
matter hereof.


 


[Remainder of page
intentionally blank; next page is signature page]


 


6

















 


IN WITNESS WHEREOF, the parties have caused this Fourth
Amendment to Letter of Credit Agreement to be duly executed by their respective
officers thereunto duly authorized, as of the date first above written.


 


	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Craig Winslow

  	
   

  
	
   

  	
   

  	
  Its Duly Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR
  READY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven C. Cooper

  	
   

  
	
   

  	
  Name:

  	
  Steven C. Cooper

  
	
   

  	
  Title:

  	
  Executive
  Vice President & Chief 

  Financial Officer

  
						



 


7

















 


Each of the undersigned Guarantors hereby
acknowledges and agrees with the terms of the foregoing Fourth Amendment to
Letter of Credit Agreement and hereby ratifies and reaffirms all of its
obligations under that certain Subsidiary Guaranty dated as of March 1, 2001,
as amended, by the Guarantors in favor of Creditor.


 


	
   

  	
  LABOR READY CENTRAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR READY CENTRAL II, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Labor Ready Central,
  Inc., as its sole Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR READY CENTRAL III, LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Labor Ready Central, Inc.,
  as its sole General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR READY GP CO., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
					



 


8

















 


	
   

  	
  LABOR READY MID-ATLANTIC, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR READY MID-ATLANTIC II, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR READY MID-ATLANTIC III, LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Labor Ready GP Co., Inc.,
  as its sole General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR READY MIDWEST, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR READY NORTHEAST, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  



 


9

















 


	
   

  	
  LABOR READY NORTHWEST, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR READY SOUTHEAST, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR READY SOUTHEAST II, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR READY SOUTHEAST III, LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Labor Ready GP Co., Inc.,
  as its sole General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  



 


10

















 


	
   

  	
  LABOR READY SOUTHWEST, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR READY PROPERTIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR READY HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LABOR READY PUERTO RICO, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Adams

  	
   

  
	
   

  	
  Name: Timothy J. Adams

  
	
   

  	
  Title: President

  



 


11

















 


EXHIBIT A


 


SENIOR OFFICER’S CERTIFICATE


 


The undersigned officer of LABOR READY, INC., a Washington
corporation (“Debtor”), hereby certifies, represents and warrants
in his capacity as Chief Financial Officer of Debtor as follows:


 


1.                                       This Certificate
is being executed and delivered by Debtor to General Electric Capital
Corporation (“Creditor”) pursuant to Section 6.2(f) of the Letter of
Credit Agreement, dated as of March 1, 2001 (as amended, supplemented or
otherwise modified from time to time, the “Letter of Credit Agreement”),  between the
Debtor and Creditor. All capitalized terms not defined herein shall have the
meanings ascribed to such term in the Letter of Credit Agreement or in Annex
A thereto.


 


2.                                       Debtor intends to
make a cash investment in Workers’ Assurance in the amount of
$                     on                
      , 200    (the “Investment”).


 


3.                                       After giving
effect to the Investment, each of the representations and warranties by the
Debtor contained in the Letter of Credit Agreement or in any other Letter of
Credit Documents is true and correct in all material respects.


 


4.                                       No Default or
Event of Default has occurred and is continuing on and as of the date of this
Certificate or would result after giving effect to the Investment.


 


5.                                       As of the Fiscal
Quarter most recently ended, Debtor has EBITDA of
$                   (determined
on a consolidated basis for Debtor and its Subsidiaries for the Rolling Period
then most recently ended), and Debtor has met the required minimum EBITDA level
set forth in Section 6.2(f)(iv) of the Letter of Credit Agreement.


 


6.                                       Set forth on Schedule
1 attached hereto and made a part hereof, are the liquidity projections for
Debtor for the period of ninety (90) consecutive days after the date of
consummation of such proposed Investment, which projections demonstrate that
Debtor is in compliance with Section 5.11 of the Letter of Credit
Agreement after giving effect to such Investment.


 


IN WITNESS WHEREOF, the undersigned
has executed this Certificate on behalf of the Debtor, as of this
              th
day
of                   ,
200    .


 


 


	
   

  	
  By

  	
  :

  	
   

  	 

	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:
  Chief Financial Officer