Document:

Exhibit 10.56

 

Wells Fargo

Bank N.A.

Tacoma Regional Commercial Banking Office

1201 Pacific Avenue, Third Floor

Tacoma, WA 98402-4301

800 688-0224

253 593-5215 Fax

 

 

June 12, 2002

 

Mr. Steven C. Cooper

Executive Vice President &

 

Chief Financial Officer

Labor Ready, Inc.

P.O. Box 2910

Tacoma, Washington  98401

 

Dear Steve:

 

                Wells

Fargo Bank, National Association (“Bank”) has made a credit accommodation to

Labor Ready, Inc., a Washington corporation (“Borrower”), pursuant to the

Credit Agreement dated as of January 4, 2002 (the signed Credit Agreement

incorrectly shows the date as January 2, 2001), executed by Bank and Borrower

(the “Credit Agreement”).  Except as

otherwise defined herein, all capitalized terms herein shall have the meanings

given in the Credit Agreement.

 

                Borrower

desires to issue, between the date hereof and September 30, 2002, up to

$75,000,000 (with a 20% greenshoe) of unsecured, subordinated convertible debt

on the terms set forth in the offering memorandum heretofore shown to Bank.

 

                Borrower

has asked Bank to consent to such subordinated debt and to agree to certain

changes in the EBITDA coverage ratio which is set forth in Section 4.9(b) of

the Credit Agreement.  Accordingly, this

letter will confirm the following agreement between Bank and Borrower:

 

                1.             Bank hereby consents to the

subordinated debt offering as described above, so long as (a) GECC consents

thereto pursuant to amendments to the GECC Letter of Credit Documents and the

GECC Receivable Documents which are substantially similar to the drafts of

those amendments heretofore delivered to Bank (the “GECC Amendments”), and (b)

the subordinated debt satisfies the requirements of such amendments.

 

                2.             Bank hereby consents to the GECC

Amendments.

 

                3.             Bank hereby agrees that the requirement

in Section 4.9(d) of the Credit Agreement that the EBITDA Coverage Ratio be not

less than 2.00 to 1.00, determined on a rolling four fiscal quarter basis as of

each fiscal quarter end, shall be deemed modified hereby to reflect the

following:

 

                (a)           The EBITDA Coverage Ratio shall be

not less than 1.50 to 1.0 from and including the four fiscal quarter period

ending on September 30, 2002 and continuing up to and including the four fiscal

quarter period ending on June 30, 2003.

 

 

 

                (b)           The EBITDA Coverage Ratio shall be

not less than 1.75 to 1.0 from and including the four fiscal quarter period

commending on September 30, 2003 and continuing up to and including the four

fiscal quarter period ending on June 30, 2004.

 

                (c)           The EBITDA Coverage Ratio shall be

not less than 2.00 to 1.0 for any four fiscal quarter period ending after June

30, 2004.

 

                4.             Except as expressly provided

herein, all terms and provisions of the Credit Agreement and the other loan

document shall continue in full force and effect without waiver or

modification, and Bank reserves all of its rights, privileges and remedies in

connection therewith.

 

                Please

acknowledge your acceptance of the foregoing by executing and returning to the

undersigned this letter or a copy hereof not later than June 26, 2002.

 

	

   

  	

  Sincerely,

  
	

   

  	

   

  
	

   

  	

  WELLS FARGO BANK, NATIONAL

  ASSOCIATION

  
	

   

  	

   

  
	

   

  	

  By;

  	

  /s/ Edward Foreman

  
	

   

  	

  Title:

  	

  VICE PRESIDENT

  
				

 

 

Acknowledged and agreed to by:

 

LABOR READY, INC.

 

	

  By:

  	

  /s/ Derrek Gafford

  
	

  Title:

  	

  VP and Treasurer

  
			

 

2Exhibit 10.57

 

FOURTH AMENDMENT TO SECURITIZATION AGREEMENTS

 

THIS FOURTH AMENDMENT TO SECURITIZATION AGREEMENTS (this “Amendment”), is made and entered into as of

June 12, 2002 (the “Effective Date”),

by and among LABOR READY, INC., a

Washington corporation (the “Parent”),

each of the Parent’s Subsidiaries listed on the signature pages hereto as a

“Selling Subsidiary” (each, a “Selling

Subsidiary”; Parent and each Selling Subsidiary are hereinafter

sometimes referred to individually as an “Originator”

and collectively as the “Originators”),

LABOR READY FUNDING CORPORATION, a

Delaware corporation (the “Buyer”;

Buyer and each Originator are hereinafter sometimes referred to individually as

a “Company” and collectively as

the “Companies”), REDWOOD RECEIVABLES CORPORATION, a Delaware

corporation (“Redwood”), as

Conduit Lender (in such capacity, the “Conduit

Lender”), and GENERAL ELECTRIC

CAPITAL CORPORATION, a Delaware corporation (“GE Capital”), as Committed Lender (in such

capacity, the “Committed Lender”;

together with the Conduit Lender referred to herein collectively as the “Lenders”), as Administrative Agent for the

Lenders (in such capacity, the “Administrative

Agent”), as Collateral Agent for the Conduit Lender and the Conduit

Lender Secured Parties (in such capacity, the “Collateral Agent”), as Operating Agent for Redwood (in such

capacity, the “Operating Agent”),

and as Liquidity Agent for the Liquidity Lenders (in such capacity, the “Liquidity Agent”).

 

W I T N E S S E T H:

 

WHEREAS, each of the Selling Subsidiaries and the

Parent are parties to a certain Receivables Sale Agreement, dated as of March

1, 2001 (as amended to the date hereof, the “Receivables

Sale Agreement”; capitalized terms used herein and not otherwise

defined herein shall have the meanings given such terms in Annex X to

the Receivables Sale Agreement as amended by this Amendment), whereby each

Selling Subsidiary has agreed to sell or otherwise transfer to the Parent, and

the Parent has agreed to purchase or otherwise acquire from such Selling

Subsidiaries, all of the right, title and interest of such Selling Subsidiaries

in the Receivables; and

 

WHEREAS, the Parent and the Buyer are parties to a

certain Receivables Sale and Contribution Agreement, dated as of March 1, 2001

(as amended to the date hereof, the “Transfer

Agreement”), whereby the Parent has agreed to sell, contribute or

otherwise transfer to Buyer, and Buyer has agreed to purchase or otherwise

acquire from the Parent, all of the right, title and interest of the Parent in

the Receivables; and

 

WHEREAS, the Buyer, the Lenders and the

Administrative Agent are parties to a certain Receivables Funding Agreement,

dated as of March 1, 2001 (as amended to the date hereof, the “Funding Agreement”), pursuant to which,

among other things, the Lenders have agreed, subject to certain terms and

conditions, to make Advances to the Buyer to fund its purchases of the

Receivables; and

 

WHEREAS, Redwood and GE Capital, as Liquidity Agent,

Initial Liquidity Lender, Collateral Agent and Operating Agent are parties to a

certain Liquidity Loan and Asset Purchase Agreement, dated as of March 1, 2001

(the “Liquidity Loan Agreement”;

the Receivables Sale Agreement, the Transfer Agreement, the Funding Agreement

and the Liquidity Loan Agreement,

 

 

together with all exhibits and annexes

thereto, are referred to herein collectively as the “Securitization Agreements”), pursuant to which, among other

things, the Liquidity Lenders have agreed, subject to certain terms and

conditions, to make Liquidity Loans to Redwood; and

 

WHEREAS,  the Companies

have requested that the Securitization Agreements be amended in certain

respects, and the Lenders, the Administrative Agent and the Collateral Agent

are willing to agree to such amendments subject to the terms and conditions of

this Amendment.

 

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.             Amendment of

Securitization Agreements.

 

1.1           The definition of Minimum EBITDA set forth in Annex G

to the Funding Agreement is hereby amended by deleting the first sentence

thereof and substituting the following new sentence to read in its entirely as

follows:

 

“EBITDA”

shall mean, with respect to any Person for any fiscal period, the amount equal

to (a) consolidated net income of such Person for such period, minus (b) the

sum of (i) income tax credits, (ii) gain from extraordinary items for such period,

(iii) any aggregate net gain (but not any aggregate net loss) during such

period arising from the sale, exchange or other disposition of capital assets

by such Person (including any fixed assets, whether tangible or intangible, all

inventory sold in conjunction with the disposition of fixed assets and all

securities), and (iv) any other non-cash gains that have been added in

determining consolidated net income (including LIFO adjustments), in each case

to the extent included in the calculation of consolidated net income of such

Person for such period in accordance with GAAP, but without duplication, plus

(c) the sum of (i) any provision for income taxes, (ii) Interest Expense, (iii)

loss from extraordinary items for such period, (iv) depreciation and amortization

for such period, (v) amortized debt discount for such period, and (vi) the

amount of any deduction to consolidated net income as the result of any grant

to any members of the management of such Person of any Stock, in each case to

the extent included in the calculation of consolidated net income of such

Person for such period in accordance with GAAP, but without duplication.

 

1.2           Section 4.3(e) of the Transfer Agreement is hereby

amended by deleting clause (ii) of Section 4.3(e) and substituting in

lieu thereof the following new clause (ii) to read in its entirety as follows:

 

(ii) make any change in its

capital structure as described on Schedule 4.01(h), including the

issuance of any shares of Stock, warrants or other securities convertible into Stock

or any revision of the terms of its outstanding Stock, except for any changes

in capital structure resulting from the issuance by the Parent of the

Subordinated Convertible Notes, the incurrence by the Parent of any

Subordinated Convertible Indebtedness or the conversion by the Parent of any of

the Subordinated Convertible Indebtedness into common stock of the Parent in

accordance with the terms of the Subordinated Convertible Note Indenture,

 

2

 

provided  that:  (A) 

the aggregate principal amount of such Subordinated Convertible

Indebtedness shall not exceed $90,000,000, 

(B) the Convertible Subordinated Indebtedness is not redeemable at the

option of the holders thereof prior to its stated maturity date (except upon a

change of control event acceptable to the Administrative Agent) and does not

have any required scheduled payments of principal prior to the maturity date

thereof;  (C) the stated maturity date

of the Subordinated Convertible Indebtedness shall be not less than six (6)

months after the Facility Termination Date; and (D) the Subordinated

Convertible Indebtedness shall be unsecured and subordinated in right of

payment to the Obligations (as such term is defined in the Letter of Credit Agreement)

on terms satisfactory to the Administrative Agent, including customary payment

blockage provisions, or

 

1.3           Annex X is hereby amended by adding in alphabetical

order the following new definitions:

 

“Subordinated

Convertible Indebtedness” shall mean the Debt incurred by Parent under and

pursuant to the Subordinated Convertible Notes and Subordinated Convertible

Note Indenture.

 

“Subordinated

Convertible Note Indenture”  shall

mean that certain Indenture dated on or about June 13, 2002 between Parent and

The Bank of New York, as Trustee.

 

“Subordinated

Convertible Notes” shall mean those certain Convertible Subordinated Notes

due in 2007 and issued pursuant to the Subordinated Convertible Note Indenture.

 

2.             No Other Amendments.  Except for the amendments expressly set

forth and referred to in Section 1 above, the Securitization Agreements

shall remain unchanged and in full force and effect.

 

3.             Representations and

Warranties.  Each Company

hereby represents and warrants to the Lenders, the Administrative Agent and the

Collateral Agent that (a) this Amendment has been duly authorized, executed and

delivered by each Company, (b) after giving effect to this Amendment, no

Termination Event, Incipient Termination Event, Event of Servicer Termination

or Incipient Servicer Termination Event 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 each Company in the Securitization

Agreements 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 material respect by any

Company of any of its representations and warranties contained in this Section

3 shall be a Termination Event and an Event of Servicer Termination for all

purposes of the Securitization Agreements.

 

4.             Ratification.  Each Company hereby ratifies and reaffirms

each and every term, covenant and condition set forth in the Securitization

Agreements and all other documents delivered by such Company in connection

therewith (including without limitation the other Related Documents to which

each Company is a party), effective as of the date hereof.

 

3

 

5.             Estoppel.  To induce the Lenders and the Administrative

Agent to enter into this Amendment, each Company hereby acknowledges and agrees

that, as of the date hereof, there exists no right of offset, defense or counterclaim

in favor of any Company as against any Lender, the Administrative Agent or the

Collateral Agent with respect to the obligations of any Company to any Lender,

the Administrative Agent or the Collateral Agent under the Securitization

Agreements or the other Related Documents, either with or without giving effect

to this Amendment.

 

6.             Conditions to

Effectiveness.  This

Amendment shall be effective as of the Effective Date upon the satisfaction of

the following conditions: (i) receipt by the Administrative Agent of this

Amendment, duly executed, completed and delivered by each of the Companies,

each Lender, the Administrative Agent and the Collateral Agent and (ii) receipt

by the Administrative Agent of the Second Amendment to Letter of Credit

Agreement, dated as of the date hereof, by and between Parent, as Debtor

therein, and GE Capital, as Creditor therein, and all conditions to

effectiveness of said amendment have been satisfied.

 

7.             Reimbursement of

Expenses.  Each Company

hereby agrees that it shall reimburse the Administrative Agent 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 the

extent permitted by Applicable Law, each Company 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 Securitization Agreements as amended

from time to time and by this Amendment embody the entire agreement between the

parties hereto relating to the subject matter hereof and supersede all prior agreements,

representations and understandings, if any, relating to the subject matter

hereof.

 

12.           Parent and GE

Capital’s Capacities. 

The Parent is executing and delivering this Amendment both in its

capacity as an Originator under the Transfer Agreement and as the Servicer

under the Funding Agreement, and all references herein to the “Parent” shall be

deemed to include the Parent in both such capacities unless otherwise expressly

indicated.  GE Capital is executing and

delivering this Amendment both in its capacity as a Lender and as the

Administrative Agent for the Lenders and the Collateral Agent for the Conduit

Lender and the

 

4

 

Conduit Lender Secured Parties, and all

references herein to “GE Capital” shall be deemed to include it in both such

capacities unless otherwise expressly indicated.

 

[Remainder

of page intentionally blank; next page is signature page]

 

5

 

IN WITNESS WHEREOF,  the parties

have caused this Fourth Amendment to Securitization Agreements to be duly

executed by their respective officers thereunto duly authorized, as of the date

first above written.

 

	

   

  	

  REDWOOD

  RECEIVABLES CORPORATION,

  
	

   

  	

  as the Conduit Lender

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Brian P. Schwinn

  	

   

  
	

   

  	

  Name

  	

  Brian P. Schwinn

  
	

   

  	

  Title:

  	

  Assistant Secretary

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  GENERAL

  ELECTRIC CAPITAL

  CORPORATION, as Committed Lender,

  Administrative Agent and Collateral Agent

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Craig Winslow

  	

   

  
	

   

  	

   

  	

  Its Duly Authorized Signatory

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY FUNDING CORPORATION

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Bruce H. Marley

  	

   

  
	

   

  	

  Name: 

  	

  Bruce H. Marley

  
	

   

  	

  Title:

  	

  President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  
	

   

  	

  Name:

  	

  Tim J. Adams

  
	

   

  	

  Title:

  	

  Executive Vice President

  and Secretary

  
						

 

6

 

	

   

  	

  SELLING

  SUBSIDARIES:

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY CENTRAL, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  
	

   

  	

  Name:

  	

  Tim J Adams

  
	

   

  	

  Title:

  	

  President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY CENTRAL II, LLC

  
	

   

  	

   

  
	

   

  	

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

  Member

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  
	

   

  	

  Name:

  	

  Tim J. Adams

  
	

   

  	

  Title:

  	

  President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY CENTRAL III, LP

  
	

   

  	

   

  
	

   

  	

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

  General

  
	

   

  	

  Partner

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  
	

   

  	

  Name:

  	

  Tim J. Adams

  
	

   

  	

  Title:

  	

  President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY GP CO., INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  
	

   

  	

  Name:

  	

  Tim J. Adams

  
	

   

  	

  Title:

  	

  President

  
						

 

7

 

	

   

  	

  LABOR

  READY MID-ATLANTIC, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  
	

   

  	

  Name:

  	

  Tim J. Adams

  
	

   

  	

  Title:

  	

  President

  
	

   

  	

  LABOR

  READY MID-ATLANTIC II, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  
	

   

  	

  Name:

  	

  Tim J. Adams

  
	

   

  	

  Title:

  	

  President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY MID-ATLANTIC III, LP

  
	

   

  	

   

  
	

   

  	

  By:  

  	

  Labor Ready GP Co., Inc.,

  as its sole General

  
	

   

  	

  Partner

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  
	

   

  	

  Name:

  	

  Tim J. Adams

  
	

   

  	

  Title:

  	

  President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY MIDWEST, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  
	

   

  	

  Name:

  	

  Tim J. Adams

  
	

   

  	

  Title:

  	

  President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY NORTHEAST, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  
	

   

  	

  Name:

  	

  Tim J. Adams

  
	

   

  	

  Title:

  	

  President

  
					

 

8

 

	

   

  	

  LABOR

  READY NORTHWEST, INC.

  	 

	

   

  	

   

  	 

	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  	 

	

   

  	

  Name:

  	

  Tim J. Adams

  	 

	

   

  	

  Title:

  	

  President

  	 

	

   

  	

   

  	 

	

   

  	

   

  	 

	

   

  	

  LABOR

  READY SOUTHEAST, INC.

  	 

	

   

  	

   

  	 

	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  	 

	

   

  	

  Name:

  	

  Tim J. Adams

  	 

	

   

  	

  Title:

  	

  President

  	 

	

   

  	

   

  	 

	

   

  	

   

  	 

	

   

  	

  LABOR

  READY SOUTHEAST II, INC.

  	 

	

   

  	

   

  	 

	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  	 

	

   

  	

  Name:

  	

  Tim J. Adams

  	 

	

   

  	

  Title:

  	

  President

  	 

	

   

  	

   

  	 

	

   

  	

   

  	 

	

   

  	

  LABOR

  READY SOUTHEAST III, LP

  	 

	

   

  	

   

  	 

	

   

  	

  By:   

  	

  Labor Ready GP Co., Inc.,

  as its sole

  
	

   

  	

   

  	

  General Partner

  	 

	

   

  	

   

  	 

	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  	 

	

   

  	

  Name:

  	

  Tim J. Adams

  	 

	

   

  	

  Title:

  	

  President

  	 

	

   

  	

   

  	 

	

   

  	

   

  	 

	

   

  	

  LABOR

  READY SOUTHWEST, INC.

  	 

	

   

  	

   

  	 

	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  	 

	

   

  	

  Name:

  	

  Tim J. Adams

  	 

	

   

  	

  Title:

  	

  President

  	 

									

 

9

 

	

   

  	

  LABOR

  READY PUERTO RICO, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Tim J. Adams

  	

   

  
	

   

  	

  Name:

  	

  Tim J. Adams

  
	

   

  	

  Title:

  	

  President

  
					

 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}]]