Document:

Exhibit 10.1

 

SEPARATION AGREEMENT, WAIVER AND RELEASE

 

Separation
Agreement, Waiver and Release (“Agreement”) by and among  Medical
Staffing Network, Inc. (“MSN”), Medical Staffing Network Holdings, Inc.
(“Holdings”) and Gregory K. Guckes (“Employee”).

 

Recitals

 

A.            MSN, Holdings and Employee are
parties to an Employment Agreement (the “Employment Agreement”) dated as of
June 9, 2003.

 

B.            MSN, Holdings and Employee desire to
terminate the Employment Agreement subject to the terms and conditions set
forth in this Agreement.

 

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

 

1.             Resignation;
Termination of Employment Agreement. 
Employee hereby resigns from all positions held by him with MSN
effective June 7, 2004 (the “Effective Date”) and such resignation is hereby
accepted by MSN.  The Employment
Agreement is hereby terminated effective as of June 7, 2004; provided, however,
MSN, Holdings and Employee acknowledge and agree that each of Section 6(j)
(Survival of Operative Sections), Section 7 (Restrictive Covenants), Section 8
(Injunctive Relief), Section 10 (Taxes) and Section 13 (Severability and
Governing Law) shall remain in full force and effect.

 

2.             Severance.  MSN agrees to pay as severance to Employee
an amount equal to 12 months’ salary plus other compensation to which Employee
is entitled as of the Effective Date minus any applicable withholding and
similar taxes required by law (the “Severance Amount”).  The Severance Amount shall be paid to
Employee in accordance with MSN’s normal payroll practices.  In addition, MSN agrees to pay to Employee
on the Effective Date an amount equal to $9,443.31 minus any applicable
withholding and similar taxes required by law (the “Accrued Vacation Amount”),
which amount represents accrued vacation for the period commencing on June 9,
2003 and ending on the Effective Date.  To
the extent permitted by MSN’s health plans, Employee will continue to receive
the health benefits provided to him as of the Effective Date for the 12-month
period following the Effective Date. 
Employee acknowledges and agrees that upon payment of the Severance
Amount and the Accrued Vacation Amount, no wages, commission, bonuses, sick
pay, personal leave pay, severance pay, vacation pay or other compensation or
payments or form of remuneration of any kind or nature is or will be owed to
him under this Agreement or the Employment Agreement.

 

3.             Release.  Employee, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, for
himself and his heirs, executors, administrators, successors, personal
representatives and assigns, does hereby remise, release, acquit, satisfy and
forever discharge MSN and Holdings, and their respective predecessors, 

 

 

subsidiaries, affiliates, officers,
employees, stockholders, directors, attorneys, sureties, successors and assigns
(collectively, the “MSN Parties”), of and from any claim and all causes of
action, contracts, agreements, promises, claims for tort or negligence,
damages, claims for wages and demands whatsoever, in law or in equity, under
state, federal or local law, including but not limited to claims arising under 29
U.S.C. §201 et.seq., 29 U.S.C. §623, Title VII of the Civil Rights Act
of 1964, 42 U.S.C. §1981, Chapter 760 of the Florida Civil Rights Act, and all
other causes of action which Employee ever had, now has, or he or any of his
heirs, executors, administrators, successors, personal representatives or
assigns hereafter can, shall or may have against the MSN Parties or any of
them, known, unknown, foreseen or unforeseen from the beginning of the world to
the Effective Date.

 

4.             Claims
and Lawsuits.  Employee agrees not
to file any claims or lawsuits against any of the MSN Parties with any court or
governmental agency.  If Employee is
requested to participate in any lawsuit, other proceeding, or investigation
against any of the MSN Parties, Employee agrees to immediately notify MSN in
writing of such request, to the extent permitted by applicable law.

 

5.             Confidentiality.  Employee agrees to keep the existence of
this Agreement confidential and not to make or cause to have made any
disparaging or negative remarks about any of the MSN Parties.  Employee further agrees not to disclose to
any third party the terms of this Agreement; provided, however,
the Employee may make such disclosure if, in the opinion of counsel, it is
determined that such disclosure must be made (i) in order that Employee does
not violate any applicable law, (ii) to comply with any proper request of any
governmental or judicial authority having proper jurisdiction and authority to
require such disclosure, (iii) to comply with any properly issued subpoena or
(iv) as otherwise required by applicable law; and provided, further,
that in the event of any such determination, Employee agrees to notify MSN as
promptly as practicable prior to disclosure.

 

6.             Return
of Company Property.  Except for the
equipment described on Schedule 1 to this Agreement which MSN has agreed to
allow Employee to retain for his personal use, Employee hereby certifies that
all property of the MSN Parties in his possession or control including, but not
limited to, credit cards, keys, cellular telephones, computers, computer
manuals and disks, equipment, employee manuals, letters and reports, has been
returned to MSN and that all returned equipment and computers are in good
working order, ordinary wear and tear excepted.

 

7.             No
Admission.  The parties understand
that nothing in this Agreement shall be construed as an admission or evidence
of liability for any violation of the law, willful or otherwise, by any entity
or person.

 

8.             Representations
of Employee.  By signing this Agreement,
Employee acknowledges that he has:

 

(a)           been
advised to review this Agreement with counsel of his choice and has been given
twenty-one (21) days in which to consider signing this Agreement;

 

 

2

 

(b)           seven
(7) days in which to revoke this Agreement by written notice to MSN;

 

(c)           fully
read and understands the terms of this Agreement including, without limitation,
the release set forth in Section 3;

 

(d)           signed
this Agreement freely and voluntarily; and

 

(e)           not
relied on any representation or statement made by any of the MSN Parties or any
of the MSN Parties’ respective agents or employees, except those set forth in
this Agreement.

 

9.             Waiver.  No term or condition of this Agreement shall
be deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement, except by written instrument
signed by the party charged with the waiver or estoppel.  No written waiver shall be deemed to be a
continuing waiver unless specifically stated therein, and each waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of the term or condition for the future or as to any act
other than that specifically waived.

 

10.           Governing
Law; Venue and Jurisdiction.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Florida without regard to conflicts of law principles.  Venue and jurisdiction of all actions
relating to the performance or interpretation of this Agreement may be brought
only in the courts of the State of Florida located in Palm Beach County or in
the United Stated District Court for the Southern District of Florida.  The parties consent to personal jurisdiction
in the courts described in this Section for the purpose of all actions, and
waive all objections to venue and the right to assert that a court chosen under
this Section is improper based on the doctrine of forum non conveniens.

 

11.           Attorneys’
Fees.  If litigation is brought
concerning this Agreement, the prevailing party shall be entitled to receive
from the nonprevailing party, and the nonprevailing party shall immediately pay
upon demand, all reasonable attorneys’ fees and expenses of the prevailing
party.  Except as otherwise provided in
this Agreement, each party shall pay its own legal fees and disbursements and
other expenses incurred in connection with this Agreement.

 

12.           Notices.  All notices and other communications
required or permitted under this Agreement shall be in writing and delivered
personally or sent by certified or registered mail, postage prepaid, return
receipt requested (deemed delivered five business days after the date sent)
addressed to the address of the applicable party appearing on the signature
page of this Agreement.  Any party may
by notice given in accordance with this Section to the other party designate
another address or person for receipt of notices.

 

13.           Binding
Effect.  This Agreement shall inure
to the benefit of and be legally binding upon all successors and assigns of the
Company.

 

14.           Entire
Agreement; Amendment.  This
Agreement constitutes the entire understanding of the parties and supersedes
all discussions, negotiations, agreements and understandings, whether oral or
written, with respect to its subject matter. 
This Agreement may 

 

3

 

be modified only by a written instrument
properly executed by the Employee, MSN and MSN Holdings.

 

15.           Severability.  If any one or more of the provisions of this
Agreement is held invalid, illegal or unenforceable, the remaining provisions
of this Agreement shall be unimpaired, and the invalid, illegal or
unenforceable provision shall be replaced by a mutually acceptable valid, legal
and enforceable provision which comes closest to the intent of the parties.

 

16.           Counterparts.  This Agreement may be executed by the
parties in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same agreement.

 

17.           WAIVER OF
JURY TRIAL.  IF LITIGATION IS
BROUGHT TO ENFORCE THIS AGREEMENT, THE PARTIES KNOWINGLY AND INTENTIONALLY
WAIVE THE RIGHT ANY OF THEM HAS TO A TRIAL BY JURY.  THE PARTIES AGREE THIS PROVISION IS A MATERIAL INDUCEMENT TO THE
PARTIES’ ENTERING INTO THIS AGREEMENT.

 

IN WITNESS
WHEREOF, this Agreement has been executed as of the date first written above.

 

MEDICAL STAFFING NETWORK, INC.

 

	
  By:

  	
  /s/

  	
  Robert J.
  Adamson

  	
   

  
	
  Name:

  	
   

  	
  Robert J. Adamson

  	
   

  
	
  Title:

  	
   

  	
  Chief
  Executive Officer

  	
   

  
	
  Address:

  	
   

  	
  901 Yamato
  Road, Suite 110

  
	
   

  	
   

  	
  Boca Raton,
  Florida 33431

  
							

 

 

MEDICAL STAFFING NETWORK
HOLDINGS, INC.

 

 

	
  By:

  	
  /s/

  	
  Robert J.
  Adamson

  	
   

  
	
  Name:

  	
   

  	
  Robert J. Adamson

  	
   

  
	
  Title:

  	
   

  	
  Chief
  Executive Officer

  	
   

  
	
  Address:

  	
   

  	
  901 Yamato
  Road, Suite 110

  
	
   

  	
   

  	
  Boca Raton,
  Florida 33431

  
							

 

 

	
  By:

  	
  /s/

  	
  Gregory K.
  Guckes

  	
   

  
	
  Name:

  	
  Gregory K. Guckes

  	
   

  
	
  Address:

  	
  c/o Medical
  Staffing Network Holdings, Inc.

  
	
   

  	
   

  	
  901 Yamato
  Road, Suite 110

  
	
   

  	
   

  	
  Boca Raton,
  Florida 33431

  
						

 

4

 

SCHEDULE 1

 

EQUIPMENT RETAINED BY
EMPLOYEE

 

1              IBM T40 Laptop Computer

1              Port Replicator

1              Linksys Wireless Router

1              Booster

1              Ink Jet Printer

1              APC Surge ProtectorExhibit
10.2

 

FIRST AMENDMENT TO CREDIT
AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this
“Amendment”)
is made as of June 25, 2004 (the “Effective
Date”) by and among MEDICAL STAFFING NETWORK, INC, a Delaware
corporation (the “Borrower”), the other Credit Parties
signatory hereto, GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation (“Administrative Agent”) for itself, as a
Lender, and as Administrative Agent for the Lenders, LASALLE BANK NATIONAL ASSOCIATION, as a Lender and SPECIAL SITUATIONS INVESTING GROUP, INC.,
as a Lender.

 

Statement of Facts

 

WHEREAS, Administrative Agent, the Lenders,
the Borrower and each of the other Credit Parties are parties to that certain
Credit Agreement, dated as of December 22, 2003 (such Credit Agreement, as
the same may be amended, supplemented, extended, renewed, restated or replaced
from time to time being hereinafter referred to as the “Credit Agreement”);

 

WHEREAS, Borrower desires to amend its
financial covenants so as to avoid a default under the Credit Agreement and the
Administrative Agent and the Lenders are willing to allow such amendments
provided that the Revolving Credit Commitment is reduced to $60,000,000, the
outstanding principal amount of the Term Loans is paid by an amount of
$5,000,000 (to be paid together with the prepayment fee and any LIBOR breakage
fees), the rates of interest are increased, the Availability Block is increased
by $2,000,000 and certain other conditions are satisfied; and

 

WHEREAS, Administrative Agent, the Lenders,
Borrower and each of the Credit Parties desire to amend the 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, the covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree that all capitalized terms used
herein shall have the meanings ascribed thereto in the Credit Agreement (except
as otherwise expressly defined or limited herein) and do hereby further agree
as follows:

 

Statement of Terms

 

1.                                                                                      Amendment
to Credit Agreement.  Subject to
the terms and conditions of this Amendment, the Credit Agreement is hereby
amended as follows:

 

1.1                                                                                 Section 1.1
is hereby amended by deleting the definitions of “Applicable Margin,”
“Availability Block,” “EBITDAR,” and “Revolving Credit Commitment,” in their
entirety in and substituting in lieu thereof the following definitions to read
in their entirety as follows:

 

 

“Applicable Margin” means: (a) (i) 2.50% per
annum for LIBOR Loan Advances and 1.25% per annum for Base Rate Advances, (ii)
1.25% per annum for Swingline Loans, (iii) 2.50% per annum for the Letter of
Credit Fee Applicable Margin and (iv) 0.50% for the Unused Line Fee Applicable
Margin; and (b) (i) from the Closing Date until the Initial Adjustment Date
9.00% per annum for Term Loans constituting LIBOR Loans and (ii) commencing on
the Initial Adjustment Date and on the first day of each calendar month
thereafter that follows by at least five (5) days the receipt of financial
statements delivered pursuant to Section 5.1(a), the Applicable Margin
for Term Loans shall be that determined from the chart below based on such
financial statements:

 

 

	
  If Leverage Ratio is:

  	
   

  	
  Level of

  Applicable Margins:

  
	
  <2.5 to 1.0

  	
   

  	
  Level I

  
	
  <3.0 to 1.0, but >
  2.5 to 1.0

  	
   

  	
  Level II

  
	
  <3.5 to 1.0, but >
  3.0 to 1.0

  	
   

  	
  Level III

  
	
  >3.5 to 1.0

  	
   

  	
  Level IV

  

 

 

	
   

  	
   

  	
  Level I

  	
   

  	
  Level II

  	
   

  	
  Level III

  	
   

  	
  Level IV

  	
   

  
	
  Applicable
  Margin for Term Loans constituting LIBOR Loans

  	
   

  	
  8.50%

  	
   

  	
  9.00%

  	
   

  	
  9.50%

  	
   

  	
  11.00%

  	
   

  
	
  Applicable
  Margin for Term Loans constituting Base Rate Loans

  	
   

  	
  7.00%

  	
   

  	
  7.50%

  	
   

  	
  8.00%

  	
   

  	
  9.50%

  	
   

  

 

Notwithstanding the foregoing, if the Borrower shall fail to timely
deliver to the Administrative Agent the financial statements required for the
calculation of the Leverage Ratio for any Fiscal Month, then commencing after
the date such financial statements were due and continuing through the next
Business Day following the date of delivery thereof, the Leverage Ratio for
such period shall be conclusively presumed to be, and the Applicable Margin
shall be calculated based upon, the highest Leverage Ratio level listed in the
table set forth above.

 

Furthermore, notwithstanding the foregoing, at the election of the
Administrative Agent  so long as a
Default shall have occurred and be continuing, the Applicable Margins shall be
the highest rate specified in the table above for all Classes of Extensions of
Credit.

 

“Availability Block” means an amount equal
to $7,000,000, provided that such amount shall equal $0 for all times that the
Borrower demonstrates that the Borrower’s EBITDA for the twelve month period
ending on such date of determination is greater than $25,000,000.

 

2

 

“EBITDAR” means, for any period, with
respect to the Credit Parties and their Subsidiaries on a consolidated basis,
the sum of (a) Net Income for such period (excluding the effect of any (i)
intercompany items, (ii) all earnings attributable to equity interests in
Persons that are not Subsidiaries unless actually received by such Person,
(iii) all income arising from the forgiveness, adjustment or negotiated
settlement of any Indebtedness, (iv) any extraordinary items of income and (v)
any increase or decrease in income arising from any change in such Person’s
method of accounting, subject to Section 1.2) plus (b) an amount which, in
the determination of Net Income for such period has been deducted for (i)
Interest Expense for such period, (ii) total Federal, state, foreign or other
income taxes for such period, (iii) depreciation and amortization expense for
such period and (iv) Rent Expense for such period, all as determined in
accordance with GAAP minus (c) the amount of all earn-out payments made during
such period in connection with Permitted Acquisitions consummated subsequent to
the Closing Date; provided that, for the calculation of EBITDAR made (i)
for the first Fiscal Quarter of Fiscal Year 2003, EBITDAR shall be the sum of
the amounts set forth above plus the amount of the Discontinued Operation Fees
First Quarter 2003, (ii) for the second Fiscal Quarter of Fiscal Year 2003,
EBITDAR shall be the sum of the amounts set forth above plus the amount of the
Discontinued Operation Fees Second Quarter 2003 plus the amount of the
Restructuring Fees, (iii) during and for the fourth Fiscal Quarter of Fiscal
Year 2003, EBITDAR shall be the sum of the amounts set forth above plus the
amount of the Prior Facility Financing Fees, (iv) during and for the third
Fiscal Quarter of Fiscal Year 2004 and for the subsequent four Fiscal Quarters
after incurrence, EBITDAR shall be the sum of the amounts set forth above minus
the amount of the Term Loan Paydown, and (v) for the subsequent four Fiscal
Quarters after incurrence, EBITDAR shall be the sum of the amounts set forth
above minus the amount of the Severance Payments and minus the amount of the
D&O Deductible.

 

“Revolving Credit Commitment” means (a) with
respect to any Lender listed on the signature pages of the First Amendment, the
amount (if any) set forth thereon opposite the name of such Lender under the
heading “Revolving Credit Commitment”, (b) with respect to any assignee of a
Revolving Credit Commitment, the amount of the transferor Lender’s Revolving
Credit Commitment assigned to such assignee pursuant to Section 11.6, and (c) as to all
Lenders having a Revolving Credit Commitment, the aggregate commitment of all
Lenders to make Revolving Credit Advances, which aggregate commitment shall be
sixty million dollars ($60,000,000) on the First Amendment Effective Date, in
each case, as such amount may be reduced from time to time pursuant to Section 2.8 or changed as a result of
an assignment pursuant to Section 11.6.  The term “Revolving Credit Commitment” does
not include the Swingline Commitment.

 

1.2                                                                                 Section 1.1
is hereby further amended by adding the following definitions to read in their
entirety as follows:

 

3

 

“D&O Deductible” means the amount of
charges incurred by Borrower during or after the second Fiscal Quarter of
Fiscal Year 2004 for the deductible required for the D&O policy to defend
shareholder lawsuit, not to exceed $500,000.

 

“First Amendment” means that certain First
Amendment to Credit Agreement dated as of June 25, 2004 by and among
Medical Staffing Network, Inc., the other Credit Parties signatory thereto,
General Electric Capital Corporation, LaSalle Bank National Association and
Special Situation Investing Group, Inc.

 

“First Amendment Effective Date” means
June 25, 2004.

 

“Severance Payments” means the amount of
payments paid by Borrower during or after the second Fiscal Quarter of Fiscal
Year 2004 for severance and search firm costs, not to exceed $750,000.

 

“Term Loan Paydown” means the amount of
$5,000,000 paid by Borrower in the third Fiscal Quarter of Fiscal Year 2004 as
a prepayment of the outstanding Term Loans in connection with the First
Amendment.

 

1.3                                                                                 Section 6.10
is hereby amended by deleting such section in its entirety in and
substituting in lieu thereof the following revised Section 6.10 to
read in its entirety as follows:

 

Section 6.10                            Financial
Covenants.  The Borrower’s fiscal
year ends on the Sunday closest to December 31 of each calendar year.  Each reference to March 31,
June 30, September 30 and December 31 in this Section 6.10 shall be deemed to refer
to the last day of the fiscal quarter or fiscal year of the Borrower, as
applicable, ending on or about such date. 
In addition, each reference to January 1, April 1, July 1
and October 1 shall be deemed to refer to the first day of the fiscal
quarter or fiscal year of the Borrower, as applicable, beginning on or about
such date.

 

(a)                                  Leverage
Ratio.  The Leverage Ratio, at all
times during the periods set forth below, shall be less than or equal to the
ratio set forth opposite such period:

 

(i)                                     From
the Closing Date to and including December 31, 2003, 3.00 to 1.0.

 

(ii)                                  From
January 1, 2004 to and including June 30, 2004, 4.50 to 1.0;

 

(iii)                               From July 1, 2004
to and including September 30, 2004, 5.90 to 1.0.

 

(iv)                              From
October 1, 2004 to and including December 31, 2004,  7.00 to 1.0.

 

4

 

(v)                                 From
January 1, 2005 to and including March 31, 2005, 5.75 to 1.0.

 

(vi)                              From
April 1, 2005 to and including June 30, 2005, 4.50 to 1.0.

 

(vii)                           From July 1, 2005 to
and including September 30, 2005, 3.50 to 1.0.

 

(viii)                        From October 1, 2005 to
and including December 31, 2005, 2.75 to 1.0.

 

(ix)                                From
January 1, 2006  to and including
June 30, 2006, 2.50 to 1.0

 

(x)                                   From
July 1, 2006 and thereafter, 2.25 to 1.0.

 

(b)                                 Fixed
Charge Coverage Ratio.  The Fixed
Charge Coverage Ratio, as of the end of each Fiscal Quarter of the Borrower set
forth below, shall be greater than or equal to the ratio set forth opposite
such Fiscal Quarter:

 

	
  Fiscal Quarter

  	
   

  	
  Minimum
  Fixed Charge Coverage

  Ratio

  
	
  Fiscal
  Quarter ending December 31, 2003

  	
   

  	
  1.15 to 1.0

  
	
  Fiscal
  Quarter ending March 31, 2004

  	
   

  	
  1.15 to 1.0

  
	
  Fiscal
  Quarter ending June 30, 2004

  	
   

  	
  1.25 to 1.0

  
	
  Fiscal
  Quarter ending September 30, 2004

  	
   

  	
  1.00 to 1.0

  
	
  Fiscal
  Quarter ending December 31, 2004

  	
   

  	
  0.75 to 1.0

  
	
  Fiscal
  Quarter ending March 31, 2005

  	
   

  	
  0.75 to 1.0

  
	
  Fiscal
  Quarter ending June 30, 2005

  	
   

  	
  1.20 to 1.0

  
	
  Fiscal
  Quarter ending September 30, 2005

  	
   

  	
  1.50 to 1.0

  

 

5

 

	
  Fiscal Quarter

  	
   

  	
  Minimum
  Fixed Charge Coverage

  Ratio

  
	
  Fiscal
  Quarter ending December 31, 2005

  	
   

  	
  0.75 to 1.0

  
	
  Fiscal
  Quarter ending March 31, 2006

  	
   

  	
  0.75 to 1.0

  
	
  Fiscal
  Quarter ending June 30, 2006

  	
   

  	
  0.75 to 1.0

  
	
  Fiscal
  Quarter ending September 30, 2006

  	
   

  	
  0.75 to 1.0

  
	
  Fiscal Quarter ending December 31, 2006 and
  each Fiscal Quarter thereafter

  	
   

  	
  2.00 to 1.0

  

 

(c)                                  EBITDA.  EBITDA, for each 12 month period ending as
of the last day of each Fiscal Quarter set forth below, shall not be less than
the amount set forth opposite such period:

 

	
  Fiscal Quarter

  	
   

  	
  EBITDA

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2003

  	
   

  	
  $

  	
  21,000,000

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2004

  	
   

  	
  $

  	
  13,000,000

  	
   

  
	
  Fiscal Quarter
  ending June 30, 2004

  	
   

  	
  $

  	
  11,200,000

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2004

  	
   

  	
  $

  	
  8,000,000

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2004

  	
   

  	
  $

  	
  6,500,000

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2005

  	
   

  	
  $

  	
  8,100,000

  	
   

  
	
  Fiscal Quarter
  ending June 30, 2005

  	
   

  	
  $

  	
  10,500,000

  	
   

  

 

6

 

	
  Fiscal Quarter

  	
   

  	
  EBITDA

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2005

  	
   

  	
  $

  	
  13,600,000

  	
   

  
	
  Fiscal Quarter
  ending December 31, 2005

  	
   

  	
  $

  	
  17,800,000

  	
   

  
	
  Fiscal Quarter
  ending March 31, 2006

  	
   

  	
  $

  	
  18,500,000

  	
   

  
	
  Fiscal Quarter
  ending June 30, 2006

  	
   

  	
  $

  	
  18,500,000

  	
   

  
	
  Fiscal Quarter
  ending September 30, 2006 and each Fiscal Quarter thereafter.

  	
   

  	
  $

  	
  19,000,000

  	
   

  

 

(d)  Days Sales Outstanding.  As of the end of each Fiscal Month  from the Closing Date, Days Sales
Outstanding shall not be greater than 70 days for any Fiscal Month.

 

1.4                                                                                 Section 7.13
is hereby amended by deleting such section in its entirety in and
substituting in lieu thereof the following revised Section 7.13 to
read in its entirety as follows:

 

Section 7.13  Capital Expenditures.  The Credit Parties will not permit aggregate
Capital Expenditures for each period set forth below to exceed the amount set
forth opposite such period:

 

	
  Fiscal Quarter ending on or about
  December 31, 2003

  	
   

  	
  $

  	
  1,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	 

	
  Fiscal Year ending on or about December 31,
  2004

  	
   

  	
  $

  	
  4,000,000

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  Fiscal Year ending on or about December 31,
  2005

  	
   

  	
  $

  	
  4,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	 

	
  Fiscal Year ending on or about December 31, 2006

  	
   

  	
  $

  	
  5,500,000.

  	
   

  
									

 

2.                                                                                      No
Other Amendments.  Except for
the amendments set forth in Section 1 of this Amendment, the Credit
Agreement shall remain unchanged and in full force and effect. Nothing in this
Amendment is intended, or shall be construed, to constitute a novation or an
accord and satisfaction of any of Borrower’s or any other Credit Party’s Obligations
under or in connection with the Credit Agreement or any other Loan Document or
to modify, affect or

 

7

 

impair the perfection or continuity of Administrative Agent’s security
interests in, security titles to or other liens on any Collateral for the
Obligations.

 

3.                                                                                      Representations
and Warranties.  To induce
Administrative Agent to enter into this Amendment, Borrower and each of the
other Credit Parties hereby warrant, represent and covenant to Administrative
Agent and Lender that after giving effect to this Amendment:

 

3.1                                                                                 Each
representation or warranty of Borrower and each other Credit Party set forth in
the Credit Agreement is true and correct in all material respects on and as of
the date hereof (except to the extent that any such representation or warranty
expressly relates to a prior specific date or period).

 

3.2                                                                                 No
Default or Event of Default has occurred and is continuing.

 

3.3                                                                                 Borrower
and each other Credit Party have the power and are each duly authorized to
enter into, deliver and perform this Amendment, and this Amendment is the
legal, valid and binding obligation of the Borrower and each other Credit Party
enforceable against it in accordance with its terms.

 

3.4                                                                                 The
execution, delivery and performance by each Credit Party of the Credit
Agreement, as amended by this Amendment: (a) is within such Person’s power; (b)
has been duly authorized by all necessary corporate, limited liability company
or limited partnership action; (c) does not contravene any provision of such
Person’s charter or bylaws; (d) does not violate any law or regulation, or any
order or decree of any court or Governmental Authority (including specifically
any applicable rule or regulation relating to the eligibility of such Person or
to receive payment and to participate as an accredited and certified provider
of health care services under Medicare, Medicaid, TRICARE, CHAMPVA or any
equivalent program or relating to the licenses and permits required therein or
in connection therewith); (e) does not conflict with or result in the breach or
termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which such Person is a party or
by which such Person or any of its property is bound; (f) does not result in
the creation or imposition of any Lien upon any of the property of such Person
other than those in favor of Administrative Agent, on behalf of itself and
Lenders, pursuant to the Loan Documents; and (g) does not require the consent
or approval of any Governmental Authority or any other Person.

 

4.                                                                                      Conditions
Precedent to Effectiveness of this Amendment.  This Amendment shall become effective, as of the Effective Date,
upon receipt by Administrative Agent, in form and substance satisfactory to
Administrative Agent, of:

 

4.1                                                                                 one
or more counterparts of this Amendment duly executed and delivered by Borrower
and each other Credit Party;

 

8

 

4.2                                                                                 payment
by Borrower to the Term Lenders pro rata, an amount to reduce the outstanding
principal amount of the Term Loans by an aggregate amount of $5,000,000;

 

4.3                                                                                 Revolving
Notes evidencing the amended Revolving Credit Commitments, duly executed and
delivered to the Revolving Lenders by Borrower;

 

4.4                                                                                 within
60 days of the Effective Date, evidence satisfactory to the Administrative
Agent that each Credit Party has entered into control agreements for all
lockbox and deposit accounts of such Credit Party, including, without
limitation, payroll and other zero accounts;

 

4.5                                                                                 payment
by the Borrower to the Administrative Agent for the ratable benefit of the Term
Lenders a prepayment fee in the amount of $62,500 pursuant to
Section 2.7(c) of the Credit Agreement in connection with the prepayment
of the Term Loan Commitments;

 

4.6                                                                                 payment
by the Borrower to the Term Lenders the amount of any LIBOR breakage fee due to
such Lender pursuant to Section 9.4(d) of the Credit Agreement in
connection with the prepayment of the Term Loan Commitments;

 

4.7                                                                                 payment
by Borrower to the Administrative Agent for the ratable benefit of the
Revolving Lenders of an amendment fee in the amount of $225,000, which fee
shall be fully earned and non-refundable when paid; and

 

4.8                                                                                 payment
by Borrower to the Administrative Agent for the ratable benefit of the Term
Lenders of an amendment fee in the amount of $45,000, which fee shall be fully
earned and non-refundable when paid.

 

5.                                                                                      Reimbursement
of Expenses.  The
Borrower hereby agrees that it shall reimburse the Administrative Agent and the
Lenders on demand for all costs and expenses (including without limitation
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.

 

6.                                                                                      Ratification;
No Novation.  Borrower and each of the other Credit
Parties hereby ratifies and reaffirms each and every term, covenant and
condition set forth or incorporated by reference in the Credit Agreement (as
amended and supplemented by this Amendment), all Loan Documents and all other
documents delivered by Borrower in connection therewith (including without
limitation the other documents executed in connection with Letters of Credit to
which any Credit Party is a party) effective as of the date hereof and none of
the rights, interests and obligations existing and to exist under such
documents are hereby released, diminished or impaired. The execution and
delivery of this Amendment shall not, and shall not be deemed to, constitute a
novation of any indebtedness or other obligations owing to the Administrative
Agent or the Lenders under the Credit Agreement, the other Loan Documents or
any other documents delivered by Borrower in connection therewith (including
without limitation the other documents executed in connection with Letters of
Credit to which any Credit

 

9

 

Party is a party).  Subject to Section 4,
on the date of this Amendment, the Credit Agreement shall be amended and
supplemented as described in this Amendment, and all loans and other
obligations of the Credit Parties outstanding as of the date hereof under the
Credit Agreement shall be deemed to be loans and obligations outstanding under
the Credit Agreement as amended, without further action by any Person.

 

7.                                                                                       Waiver
and Release.  To induce the Administrative Agent and the Lenders
to enter into this Amendment, Borrower and each of the other Credit Parties
hereby waives and releases any claim, defense, demand, action or suit of any
kind or nature whatsoever against any or all of the Administrative Agent or
Lenders arising on or prior to the date hereof in connection with the Credit
Agreement or any of the other Loan Documents, or any of the transactions
contemplated thereunder, except that this Section 7 shall not waive or release any of the
Administrative Agent’s or the Lenders’ contractual obligations under this
Amendment, the Credit Agreement or any of the other Loan Documents.

 

8.                                                                                      Estoppel.  To
induce Administrative Agent (in its various capacities) to enter into this
Amendment, Borrower and each of the other Credit Parties hereby acknowledge and
agree that, as of the date hereof, there exists no right of offset, defense or
counterclaim in favor of any Credit Party as against Administrative Agent (in
its various capacities) with respect to the obligations of any Credit Party to
Administrative Agent (in its various capacities) under the Credit Agreement or
the other Loan Documents, either with or without giving effect to this
Amendment.

 

9.                                                                                      Counterparts.  This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which
when taken together shall constitute one and the same instrument.

 

10.                                                                               Governing
Law.  THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE.

 

11.                                                                               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,
Borrower and each of the other Credit Parties hereby waive any provision of law
that renders any provision hereof prohibited or unenforceable in any respect.

 

12.                                                                               Entire
Agreement.  The Credit Agreement as amended 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.

 

13.                                                                               Binding
Effect.  This Amendment shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns, provided that

 

10

 

no Credit Party may assign any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and the Lender.

 

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

 

11

 

IN WITNESS WHEREOF, the parties hereto have
caused this First Amendment to Credit Agreement to be duly executed and
delivered as of the day and year specified at the beginning hereof.

 

	
   

  	
  MEDICAL STAFFING NETWORK, INC., as

  Borrower

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Kevin S. Little

  	
   

  	
   

  
	
   

  	
  Name: Kevin S. Little

  	
   

  
	
   

  	
  Title: President and
  Chief Operating Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OTHER
  CREDIT PARTIES:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEDICAL STAFFING NETWORK HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Kevin S. Little

  	
   

  	
   

  
	
   

  	
  Name: Kevin S. Little

  	
   

  
	
   

  	
  Title: President and
  Chief Operating Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEDICAL STAFFING HOLDINGS, LLC

  	
   

  
	
   

  	
  By: Medical Staffing Network Holdings,

  Inc., as its sole Member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Kevin S. Little

  	
   

  	
   

  
	
   

  	
  Name: Kevin S. Little

  	
   

  
	
   

  	
  Title: President and
  Chief Operating Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MSN-ILLINOIS HOLDINGS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Kevin S. Little

  	
   

  	
   

  
	
   

  	
  Name: Kevin S. Little

  	
   

  
	
   

  	
  Title: Director

  	
   

  

 

 

	
   

  	
  MEDICAL STAFFING NETWORK OF ILLINOIS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Kevin S. Little

  	
   

  	
   

  
	
   

  	
  Name: Kevin S. Little

  	
   

  
	
   

  	
  Title: Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEDICAL STAFFING NETWORK ASSETS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Kevin S. Little

  	
   

  	
   

  
	
   

  	
  Name: Kevin S. Little

  	
   

  
	
   

  	
  Title: Manager

  	
   

  

 

13

 

	
   

  	
  AGENT
  AND LENDERS:

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION, as Lender and as

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
  Revolving Credit

  	
  By:

  	
  /s/
  Steven Wagnblas

  	
   

  
	
  Commitment:  $42,500,000

  	
  Name:

  	
  Steven
  Wagnblas

  	
   

  
	
   

  	
  Its Duly Authorized
  Signatory

  
					

 

 

	
   

  	
  LASALLE BANK NATIONAL

  ASSOCIATION, as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
  Revolving Loan

  	
  By:

  	
  /s/
  Dana Friedman

  	
   

  
	
  Commitment:  $17,500,000

  	
  Name:

  	
  Dana
  Friedman

  	
   

  
	
   

  	
  Title:
  

  	
  First Vice President

  	
   

  
						

 

 

	
   

  	
  SPECIAL SITUATIONS INVESTING

  GROUP, INC., as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Mansour

  	
   

  
	
   

  	
  Name:

  	
  Michael Mansour

  	
   

  
	
   

  	
  Title:
  

  	
  Authorized Signatory

  	
   

  
						

 

14

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