Document:

Exhibit 10.60

 

 

CREDIT AGREEMENT

 

Dated as of July 24, 2003

 

Among

 

THE FINANCIAL INSTITUTIONS NAMED HEREIN

 

as the Lenders

 

and

 

BANK OF AMERICA, N.A.

 

as the Administrative Agent and as Collateral
Agent

 

and

 

SPHERION CORPORATION

 

as the Borrower

 

 

 

BANC OF AMERICA SECURITIES LLC

 

as Lead Arranger

 

 

TABLE OF CONTENTS

 

	
  Section

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1 LOANS AND LETTERS OF CREDIT

  	
  1

  
	
   

  	
   

  
	
  1.1

  	
  Total Facility

  	
  1

  
	
  1.2

  	
  Revolving Loans

  	
  1

  
	
  1.3

  	
  [Intentionally omitted]

  	
  4

  
	
  1.4

  	
  Letters of Credit

  	
  4

  
	
  1.5

  	
  Bank Products

  	
  7

  
	
  1.6

  	
  Increase in Commitments

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 INTEREST AND FEES

  	
  8

  
	
   

  	
   

  
	
  2.1

  	
  Interest

  	
  8

  
	
  2.2

  	
  Continuation and Conversion Elections

  	
  9

  
	
  2.3

  	
  Maximum Interest Rate

  	
  10

  
	
  2.4

  	
  Closing Fee

  	
  10

  
	
  2.5

  	
  Unused Line Fee

  	
  10

  
	
  2.6

  	
  Letter of Credit Fee

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 PAYMENTS AND PREPAYMENTS

  	
  11

  
	
   

  	
   

  
	
  3.1

  	
  Revolving Loans

  	
  11

  
	
  3.2

  	
  Termination of Facility

  	
  11

  
	
  3.3

  	
  [Intentionally omitted

  	
  11

  
	
  3.4

  	
  [Intentionally omitted

  	
  12

  
	
  3.5

  	
  Repayments of the Loans From Asset
  Dispositions

  	
  12

  
	
  3.6

  	
  Payments by the Borrower

  	
  12

  
	
  3.7

  	
  Payments as Revolving Loans

  	
  13

  
	
  3.8

  	
  Apportionment, Application and Reversal of
  Payments

  	
  13

  
	
  3.9

  	
  Indemnity for Returned Payments

  	
  13

  
	
  3.10

  	
  Agent’s and Lenders’ Books and Records;
  Monthly Statements

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 TAXES, YIELD PROTECTION AND ILLEGALITY

  	
  14

  
	
   

  	
   

  
	
  4.1

  	
  Taxes

  	
  14

  
	
  4.2

  	
  Illegality

  	
  16

  
	
  4.3

  	
  Increased Costs and Reduction of Return

  	
  16

  
	
  4.4

  	
  Funding Losses

  	
  17

  
	
  4.5

  	
  Inability to Determine Rates

  	
  17

  
	
  4.6

  	
  Certificates of Agent

  	
  17

  
	
  4.7

  	
  Survival

  	
  18

  
	
  4.8

  	
  Participant Rights

  	
  18

  
	
  4.9

  	
  Alternate Office; Minimization of Costs

  	
  18

  
						

 

i

 

	
  ARTICLE 5 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES

  	
  19

  
	
   

  	
   

  
	
  5.1

  	
  Books and Records

  	
  19

  
	
  5.2

  	
  Financial Information

  	
  19

  
	
  5.3

  	
  Notices to the Lenders

  	
  21

  
	
   

  	
   

  
	
  ARTICLE 6 GENERAL WARRANTIES AND REPRESENTATIONS

  	
  23

  
	
   

  	
   

  
	
  6.1

  	
  Authorization, Validity, and Enforceability
  of this Agreement and the Loan Documents

  	
  23

  
	
  6.2

  	
  Validity and Priority of Security Interest

  	
  24

  
	
  6.3

  	
  Organization and Qualification

  	
  24

  
	
  6.4

  	
  Corporate Name; Prior Transactions

  	
  24

  
	
  6.5

  	
  Subsidiaries and Affiliates

  	
  24

  
	
  6.6

  	
  Financial Statements and Projections

  	
  24

  
	
  6.7

  	
  Capitalization

  	
  25

  
	
  6.8

  	
  Solvency

  	
  25

  
	
  6.9

  	
  Debt

  	
  25

  
	
  6.10

  	
  Distributions

  	
  25

  
	
  6.11

  	
  [Intentionally omitted]

  	
  25

  
	
  6.12

  	
  Proprietary Rights

  	
  25

  
	
  6.13

  	
  Trade Names

  	
  25

  
	
  6.14

  	
  Litigation

  	
  25

  
	
  6.15

  	
  Labor Disputes

  	
  26

  
	
  6.16

  	
  Environmental Laws

  	
  26

  
	
  6.17

  	
  No Violation of Law

  	
  27

  
	
  6.18

  	
  No Default

  	
  27

  
	
  6.19

  	
  ERISA Compliance

  	
  27

  
	
  6.20

  	
  Taxes

  	
  28

  
	
  6.21

  	
  Regulated Entities

  	
  28

  
	
  6.22

  	
  Use of Proceeds; Margin Regulations

  	
  28

  
	
  6.23

  	
  Copyrights, Patents, Trademarks and
  Licenses, etc

  	
  28

  
	
  6.24

  	
  No Material Adverse Change

  	
  28

  
	
  6.25

  	
  Full Disclosure

  	
  28

  
	
  6.26

  	
  [Intentionally omitted]

  	
  28

  
	
  6.27

  	
  Bank Accounts

  	
  29

  
	
  6.28

  	
  Governmental Authorization

  	
  29

  
	
  6.29

  	
  Tax Shelter Regulations

  	
  29

  
	
   

  	
   

  
	
  ARTICLE 7 AFFIRMATIVE AND NEGATIVE COVENANTS

  	
  29

  
	
   

  	
   

  
	
  7.1

  	
  Taxes and Other Obligations

  	
  29

  
	
  7.2

  	
  Legal Existence and Good Standing

  	
  29

  
	
  7.3

  	
  Compliance with Law and Agreements;
  Maintenance of Licenses

  	
  29

  
	
  7.4

  	
  Maintenance of Property; Inspection of
  Property

  	
  30

  
	
  7.5

  	
  Insurance

  	
  30

  
	
  7.6

  	
  [Intentionally Omitted]

  	
  30

  
	
  7.7

  	
  Environmental Laws

  	
  30

  
	
  7.8

  	
  Compliance with ERISA

  	
  31

  
				

 

ii

 

	
  7.9

  	
  Mergers, Consolidations or Sales

  	
  31

  
	
  7.10

  	
  Distributions; Capital Change; Restricted
  Investments

  	
  32

  
	
  7.11

  	
  Transactions Affecting Collateral or
  Obligations

  	
  32

  
	
  7.12

  	
  Guaranties

  	
  32

  
	
  7.13

  	
  Debt

  	
  32

  
	
  7.14

  	
  Prepayment

  	
  32

  
	
  7.15

  	
  Transactions with Affiliates

  	
  33

  
	
  7.16

  	
  Investment Banking and Finder’s Fees

  	
  33

  
	
  7.17

  	
  Business Conducted

  	
  33

  
	
  7.18

  	
  Liens

  	
  33

  
	
  7.19

  	
  Sale and Leaseback Transactions

  	
  33

  
	
  7.20

  	
  New Subsidiaries

  	
  33

  
	
  7.21

  	
  Fiscal Year

  	
  33

  
	
  7.22

  	
  Capital Expenditures

  	
  33

  
	
  7.23

  	
  Fixed Charge Coverage
  Ratio; Minimum Availability

  	
  34

  
	
  7.24

  	
  Use of Proceeds

  	
  34

  
	
  7.25

  	
  Minimum Availability

  	
  34

  
	
  7.26

  	
  Further Assurances

  	
  34

  
	
   

  	
  Mergers, Consolidations or Sales

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 CONDITIONS OF LENDING

  	
  34

  
	
   

  	
   

  
	
  8.1

  	
  Conditions Precedent to Making of Loans on
  the Closing Date

  	
  34

  
	
  8.2

  	
  Conditions Precedent to Each Loan

  	
  36

  
	
   

  	
   

  
	
  ARTICLE 9 DEFAULT; REMEDIES

  	
  37

  
	
   

  	
   

  
	
  9.1

  	
  Events of Default

  	
  37

  
	
  9.2

  	
  Remedies

  	
  39

  
	
   

  	
   

  
	
  ARTICLE 10 TERM AND TERMINATION

  	
  41

  
	
   

  	
   

  
	
  10.1

  	
  Term and Termination

  	
  41

  
	
   

  	
   

  
	
  ARTICLE 11 AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS;
  SUCCESSORS

  	
  41

  
	
   

  	
   

  
	
  11.1

  	
  Amendments and Waivers

  	
  41

  
	
  11.2

  	
  Assignments; Participations

  	
  42

  
	
   

  	
   

  
	
  ARTICLE 12 THE AGENT

  	
  44

  
	
   

  	
   

  
	
  12.1

  	
  Appointment and Authorization

  	
  44

  
	
  12.2

  	
  Delegation of Duties

  	
  45

  
	
  12.3

  	
  Liability of Agent

  	
  45

  
	
  12.4

  	
  Reliance by Agent

  	
  45

  
	
  12.5

  	
  Notice of Default

  	
  45

  
	
  12.6

  	
  Credit Decision

  	
  46

  
	
  12.7

  	
  Indemnification

  	
  46

  
	
  12.8

  	
  Agent in Individual Capacity

  	
  46

  
				

 

iii

 

	
  12.9

  	
  Successor Agent

  	
  47

  
	
  12.10

  	
  Withholding Tax

  	
  47

  
	
  12.11

  	
  Collateral Matters

  	
  48

  
	
  12.12

  	
  Restrictions on Actions by Lenders; Sharing
  of Payments

  	
  49

  
	
  12.13

  	
  Agency for Perfection

  	
  50

  
	
  12.14

  	
  Payments by Agent to Lenders

  	
  50

  
	
  12.15

  	
  Settlement

  	
  50

  
	
  12.16

  	
  Letters of Credit; Intra-Lender Issues

  	
  53

  
	
  12.17

  	
  Concerning the Collateral and the Related
  Loan Documents

  	
  55

  
	
  12.18

  	
  Field Audit and Examination Reports;
  Disclaimer by Lenders

  	
  55

  
	
  12.19

  	
  Relation Among Lenders

  	
  56

  
	
  12.20

  	
  Co-Agents

  	
  56

  
	
   

  	
   

  
	
  ARTICLE 13 MISCELLANEOUS

  	
  56

  
	
   

  	
   

  
	
  13.1

  	
  No Waivers; Cumulative Remedies

  	
  56

  
	
  13.2

  	
  Severability

  	
  56

  
	
  13.3

  	
  Governing Law; Choice of Forum; Service of
  Process

  	
  56

  
	
  13.4

  	
  WAIVER OF JURY TRIAL

  	
  58

  
	
  13.5

  	
  Survival of Representations and Warranties

  	
  58

  
	
  13.6

  	
  Other Security and Guaranties

  	
  58

  
	
  13.7

  	
  Fees and Expenses

  	
  58

  
	
  13.8

  	
  Notices

  	
  59

  
	
  13.9

  	
  Waiver of Notices

  	
  60

  
	
  13.10

  	
  Binding Effect

  	
  60

  
	
  13.11

  	
  Indemnity of the Agent and the Lenders by
  the Borrower

  	
  60

  
	
  13.12

  	
  Limitation of Liability

  	
  61

  
	
  13.13

  	
  Final Agreement

  	
  61

  
	
  13.14

  	
  Counterparts

  	
  61

  
	
  13.15

  	
  Captions

  	
  61

  
	
  13.16

  	
  Right of Setoff

  	
  62

  
	
  13.17

  	
  Confidentiality

  	
  62

  
	
  13.18

  	
  Conflicts with Other Loan Documents

  	
  63

  
				

 

iv

 

ANNEXES, EXHIBITS AND SCHEDULES

 

	
  ANNEX A

  	
  -

  	
   

  	
  DEFINITIONS

  	
   

  
	
  EXHIBIT A

  	
  -

  	
   

  	
  [RESERVED]

  	
   

  
	
  EXHIBIT B

  	
  -

  	
   

  	
  FORM OF BORROWING BASE CERTIFICATE

  	
   

  
	
  EXHIBIT C

  	
  -

  	
   

  	
  FINANCIAL STATEMENTS

  	
   

  
	
  EXHIBIT D

  	
  -

  	
   

  	
  FORM OF NOTICE OF BORROWING

  	
   

  
	
  EXHIBIT E

  	
  -

  	
   

  	
  FORM OF NOTICE OF CONTINUATION/CONVERSION

  	
   

  
	
  EXHIBIT F

  	
  -

  	
   

  	
  FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

  	
   

  
	
  EXHIBIT G

  	
  -

  	
   

  	
  FORM OF SECURITY AGREEMENT

  	
   

  
	
  EXHIBIT H

  	
  -

  	
   

  	
  FORM OF PLEDGE AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 1.1 – COMMITMENTS

  	
   

  
	
  SCHEDULE 1.2 – EXISTING LETTERS OF CREDIT

  	
   

  
	
  SCHEDULE 6.3 – ORGANIZATION AND
  QUALIFICATIONS

  	
   

  
	
  SCHEDULE 6.5 – SUBSIDIARIES AND AFFILIATES

  	
   

  
	
  SCHEDULE 6.7 – SUBSIDIARY CAPITALIZATION

  	
   

  
	
  SCHEDULE 6.9 – DEBT

  	
   

  
	
  SCHEDULE 6.12 – PROPRIETARY RIGHTS

  	
   

  
	
  SCHEDULE 6.13 – TRADE NAMES

  	
   

  
	
  SCHEDULE 6.14 – LITIGATION

  	
   

  
	
  SCHEDULE 6.15 – LABOR DISPUTES

  	
   

  
	
  SCHEDULE 6.16 – ENVIRONMENTAL LAW

  	
   

  
	
  SCHEDULE 6.19 – ERISA COMPLIANCE

  	
   

  
	
  SCHEDULE 6.27 – BANK ACCOUNTS

  	
   

  
						

 

v

 

CREDIT AGREEMENT

 

This Credit Agreement, dated as of July 24, 2003 (this “Agreement”), is
made by and among the financial institutions from time to time parties hereto
(such financial institutions, together with their respective successors and
assigns, are referred to hereinafter each individually as a “Lender” and
collectively as the “Lenders”), BANK OF AMERICA, N.A., as Administrative Agent
and Collateral Agent for the Lenders (in such capacities, the “Agent”), and
SPHERION CORPORATION, a Delaware corporation, with offices at 2050 Spectrum Boulevard,
Ft. Lauderdale, Florida 33309 (the “Borrower”).

 

W  I  T  N
E  S  S  E  T  H:

 

WHEREAS, the Borrower has requested that the Lenders make available to
it a revolving line of credit for loans and letters of credit in an amount not
to exceed $200,000,000 and which extensions of credit the Borrowers will use
for the purposes permitted hereunder;

 

WHEREAS, capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed thereto in Annex A which
is attached hereto and incorporated herein; the rules of construction contained
therein shall govern the interpretation of this Agreement and the other Loan
Documents, and all Annexes, Exhibits and Schedules attached hereto are
incorporated herein by reference;

 

WHEREAS, the Lenders have agreed to make available to the Borrower a
revolving credit facility upon the terms and conditions set forth in this
Agreement.

 

NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable
consideration, the receipt of which is hereby acknowledged, the Lenders, the
Agent, and the Borrower hereby agree as follows.

 

ARTICLE 1

LOANS AND LETTERS OF CREDIT

 

1.1                                 Total Facility. 
Subject to all of the terms and conditions of this Agreement, the
Lenders agree to make available a total credit facility of up to $200,000,000,
or such greater amount as may be established pursuant to Section 1.6
(the “Total Facility”), to the Borrower from time to time during the term of
this Agreement.  The Total Facility
shall be composed of a revolving line of credit consisting of Revolving Loans
and Letters of Credit.

 

1.2                                 Revolving Loans.

 

(a)                                  Amounts.  Subject to the satisfaction of the
conditions precedent set forth in Article 8, each Lender severally, but
not jointly, agrees, upon the Borrowers’ request from time to time on any
Business Day during the period from the Closing Date to the Termination Date,
to make revolving loans (the “Revolving Loans”) to the Borrowers in amounts not
to exceed such Lender’s Pro Rata Share of Availability, except for Non-Ratable
Loans and Agent Advances.  The Lenders,
however, in their unanimous discretion, may elect to make Revolving Loans or
issue or arrange to have issued Letters of Credit in excess of the Borrowing
Base on one or more occasions, but if they do so, neither the Agent nor the
Lenders shall be deemed thereby to have changed the limits of the Borrowing
Base or to be obligated to exceed such limits on any other occasion.  If any 

 

 

Borrowing
would exceed Availability, the Lenders may refuse to make or may otherwise
restrict the making of Revolving Loans as the Lenders determine until such
excess has been eliminated, subject to the Agent’s authority, in its sole
discretion, to make Agent Advances pursuant to the terms of Section 1.2(i).

 

(b)                                 Procedure
for Borrowing.

 

(i)                                     Each
Borrowing shall be made upon the Borrower’s irrevocable written notice
delivered to the Agent in the form of a notice of borrowing (“Notice of
Borrowing”), which must be received by the Agent prior to (i) 12:00 noon
(Atlanta, Georgia time) three Business Days prior to the requested Funding
Date, in the case of LIBOR Loans and (ii) 11:00 a.m. (Atlanta, Georgia time) on
the requested Funding Date, in the case of Base Rate Loans, specifying:

 

(A)                              the
amount of the Borrowing, which in the case of a LIBOR Loan must equal or exceed
$1,000,000 (and increments of $500,000 in excess of such amount);

 

(B)                                the
requested Funding Date, which must be a Business Day;

 

(C)                                whether
the Revolving Loans requested are to be Base Rate Loans or LIBOR Loans (and if
not specified, it shall be deemed a request for a Base Rate Loan); and

 

(D)                               the
duration of the Interest Period for LIBOR Loans (and if not specified, it shall
be deemed a request for an Interest Period of one month);

 

provided, however, that with respect to the Borrowing to be made on the
Closing Date, such Borrowings will consist of Base Rate Loans only.

 

(ii)                                  In
lieu of delivering a Notice of Borrowing, the Borrower may give the Agent
telephonic notice of such request for advances to the Designated Account on or
before the deadline set forth above. 
The Agent at all times shall be entitled to rely on such telephonic
notice in making such Revolving Loans, regardless of whether any written
confirmation is received.

 

(iii)                               The
Borrower shall have no right to request a LIBOR Loan while a Default or Event
of Default has occurred and is continuing.

 

(iv)                              The
Borrower has requested and the Agent may, in its discretion from time to time
as a business accommodation to the Borrower, automatically fund the Designated
Account of the Borrower to permit payment of items drawn on such account for
which there are not sufficient funds by making Loans in amounts and upon
notices not in accordance with the borrowing procedures contained in this Section
1.2(b) and such Borrowings shall be deemed made in accordance with and not
as a violation of the requirements of this Section 1.2(b).

 

(c)                                  Reliance
upon Authority.

 

(i)                                     Prior
to the Closing Date, the Borrower shall deliver to the Agent, a notice setting
forth the account of the Borrower (“Designated Account”) to which the Agent is
authorized to transfer the proceeds of the Revolving Loans requested
hereunder.  The Borrower

 

2

 

may designate a replacement
account from time to time by written notice from a Responsible Officer.  All such Designated Accounts must be
reasonably satisfactory to the Agent.

 

(ii)                                  The
Agent is entitled to rely conclusively on any person’s request for Revolving
Loans on behalf of the Borrower, so long as the proceeds thereof are to be
transferred to the Designated Account. 
The Agent has no duty to verify the identity of any individual
representing himself or herself as a person authorized by the Borrower to make
such requests on its behalf.

 

(d)                                 No
Liability.  The Agent shall not
incur any liability to the Borrower as a result of (i) any automatic funding
described in Section 1.2(b)(iv) above or (ii) acting upon any notice
referred to in Sections 1.2(b) and (c), which the Agent
reasonably believes in good faith to have been given by an officer or other
person duly authorized by the Borrower to request Revolving Loans on its
behalf.  The crediting of Revolving
Loans to the Designated Account conclusively establishes the obligation of the
Borrower to repay such Revolving Loans as provided herein.

 

(e)                                  Notice
Irrevocable.  Any Notice of
Borrowing (or telephonic notice in lieu thereof) made pursuant to Section
1.2(b) shall be irrevocable.  The
Borrower shall be bound to borrow the funds requested therein in accordance
therewith.

 

(f)                                    Agent’s
Election.  Promptly after receipt of
a Notice of Borrowing (or telephonic notice in lieu thereof), the Agent shall
elect to have the terms of Section 1.2(g) or the terms of Section
1.2(h) apply to such requested Borrowing. 
If the Bank declines in its sole discretion to make a Non-Ratable Loan
pursuant to Section 1.2(h), the terms of Section 1.2(g) shall
apply to the requested Borrowing.

 

(g)                                 Making
of Revolving Loans.  If Agent elects
to have the terms of this Section 1.2(g) apply to a requested Borrowing,
then promptly after receipt of a Notice of Borrowing or telephonic notice in
lieu thereof, the Agent shall notify the Lenders by telecopy, telephone or
e-mail of the requested Borrowing.  Each
Lender shall transfer its Pro Rata Share of the requested Borrowing available
to the Agent in immediately available funds, to the account from time to time
designated by Agent, not later than 12:00 noon (Atlanta, Georgia time) on the
applicable Funding Date.  After the
Agent’s receipt of all proceeds of such Revolving Loans, the Agent shall make
the proceeds of such Revolving Loans available to the Borrower on the
applicable Funding Date by transferring same day funds to the account designated
by the Borrower; provided, however, that the amount of Revolving
Loans so made on any date shall not exceed the Availability on such date.

 

(h)                                 Making
of Non-Ratable Loans.

 

(i)                                     If
Agent elects, with the consent of the Bank, to have the terms of this Section
1.2(h) apply to a requested Borrowing, the Bank shall make a Revolving Loan
in the amount of that Borrowing available to the Borrower on the applicable
Funding Date by transferring same day funds to Borrower’s Designated Account.  Each Revolving Loan made solely by the Bank
pursuant to this Section is herein referred to as a “Non-Ratable Loan”, and
such Revolving Loans are collectively referred to as the “Non-Ratable
Loans.”  Each Non-Ratable Loan shall be
subject to all the terms and conditions applicable to other Revolving Loans
except that all payments thereon shall be payable to the Bank solely for its
own account.  The Agent shall not
request the Bank to make any Non-Ratable Loan if (A) the Agent has received
written notice from any Lender that one or more of the applicable conditions
precedent set forth in Article 8 will not be

 

3

 

satisfied on the requested
Funding Date for the applicable Borrowing, or (B) the requested Borrowing would
exceed Availability on that Funding Date.

 

(ii)                                  The
Non-Ratable Loans shall be secured by the Agent’s Liens in and to the
Collateral and shall constitute Base Rate Loans and Obligations hereunder.

 

(i)                                     Agent
Advances.

 

(i)                                     Subject
to the limitations set forth below, the Agent is authorized by the Borrower and
the Lenders, from time to time in the Agent’s sole discretion, (A) after the
occurrence of a Default or an Event of Default, or (B) at any time that any of
the other conditions precedent set forth in Article 8 have not been
satisfied, to make Base Rate Loans to the Borrower on behalf of the Lenders in
an aggregate amount outstanding at any time not to exceed 10% of the Borrowing
Base but not in excess of the Maximum Revolver Amount which the Agent, in its
reasonable business judgment, deems necessary or desirable (1) to preserve or
protect the Collateral, or any portion thereof, (2) to enhance the likelihood
of, or maximize the amount of, repayment of the Loans and other Obligations, or
(3) to pay any other amount chargeable to the Borrower pursuant to the terms of
this Agreement, including costs, fees and expenses as described in Section
13.7 (any of such advances are herein referred to as “Agent Advances”); provided,
that the Required Lenders may at any time revoke the Agent’s authorization to
make Agent Advances.  Any such
revocation must be in writing and shall become effective prospectively upon the
Agent’s receipt thereof.

 

(ii)                                  The
Agent Advances shall be secured by the Agent’s Liens in and to the Collateral and
shall constitute Base Rate Loans and Obligations hereunder.

 

1.3                                 [Intentionally omitted.]

 

1.4                                 Letters of Credit.

 

(a)                                  Agreement
to Issue or Cause To Issue.  Subject
to the terms and conditions of this Agreement, the Agent agrees to cause the
Letter of Credit Issuer to issue for the account of the Borrower one or more
commercial/documentary and standby letters of credit pursuant to the terms of
this Agreement (each a “Letter of Credit”).

 

(b)                                 Amounts;
Outside Expiration Date.  The Agent
shall not have any obligation to cause to be issued and the Letter of Credit
Issuer shall have no obligation to issue any Letter of Credit at any time if:
(i) the maximum face amount of the requested Letter of Credit is greater than
the Unused Letter of Credit Subfacility at such time; (ii) the maximum undrawn
amount of the requested Letter of Credit and all commissions, fees, and charges
due from the Borrower in connection with the opening thereof would exceed
Availability at such time; or (iii) such Letter of Credit has an expiration
date less than 30 days prior to the Stated Termination Date or more than 12
months from the date of issuance for standby letters of credit and 180 days for
documentary letters of credit.  With
respect to any Letter of Credit which contains any “evergreen” or automatic
renewal provision, each Lender shall be deemed to have consented to any such
extension or renewal unless any such Lender shall have provided to the Agent,
written notice that it declines to consent to any such extension or renewal at
least thirty (30) days prior to the date on which the Letter of Credit Issuer
is entitled to decline to extend or renew the Letter of Credit.  If all of the requirements of this

 

4

 

Section 1.4 are
met and no Default or Event of Default has occurred and is continuing, no
Lender shall decline to consent to any such extension or renewal.

 

(c)                                  Other
Conditions.  In addition to
conditions precedent contained in Article 8, the obligation of the Agent
to cause to be issued or of the Letter of Credit Issuer to issue any Letter of
Credit is subject to the following conditions precedent having been satisfied
in a manner reasonably satisfactory to the Letter of Credit Issuer and the
Agent:

 

(i)                                     The
Borrower shall have delivered to the Letter of Credit Issuer, at such times and
in such manner as such Letter of Credit Issuer may prescribe, an application in
form and substance satisfactory to such Letter of Credit Issuer and reasonably
satisfactory to the Agent for the issuance of the Letter of Credit and such
other documents as may be required pursuant to the terms thereof, and the form,
terms and purpose of the proposed Letter of Credit shall be reasonably
satisfactory to the Agent and the Letter of Credit Issuer; and

 

(ii)                                  As
of the date of issuance, no order of any court, arbitrator or Governmental
Authority shall purport by its terms to enjoin or restrain money center banks
generally from issuing letters of credit of the type and in the amount of the
proposed Letter of Credit, and no law, rule or regulation applicable to money
center banks generally and no request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over money
center banks generally shall prohibit, or request that the proposed Letter of
Credit Issuer refrain from, the issuance of letters of credit generally or the
issuance of such Letters of Credit.

 

(d)                                 Issuance
of Letters of Credit.

 

(i)                                     Request
for Issuance.  Borrower must notify
the Agent and the Letter of Credit Issuer of a requested Letter of Credit at
least three (3) Business Days prior to the proposed issuance date.  Such notice shall be irrevocable and must
specify the original face amount of the Letter of Credit requested, the
Business Day of issuance of such requested Letter of Credit, whether such
Letter of Credit may be drawn in a single or in partial draws, the Business Day
on which the requested Letter of Credit is to expire, the purpose for which
such Letter of Credit is to be issued, and the beneficiary of the requested
Letter of Credit.  The Borrower shall
attach to such notice the proposed form of the Letter of Credit.

 

(ii)                                  Responsibilities
of the Agent; Issuance.  As of the
Business Day immediately preceding the requested issuance date of the Letter of
Credit, the Agent shall determine the amount of the applicable Unused Letter of
Credit Subfacility and Availability.  If
(i) the face amount of the requested Letter of Credit is less than the Unused
Letter of Credit Subfacility and (ii) the amount of such requested Letter of
Credit and all commissions, fees, and charges due from the Borrower in
connection with the opening thereof would not exceed Availability, the Agent
shall cause the Letter of Credit Issuer to issue the requested Letter of Credit
on the requested issuance date so long as the other conditions hereof are met.

 

(iii)                               No
Extensions or Amendment.  The Agent
shall not be obligated to cause the Letter of Credit Issuer to extend (except
pursuant to “evergreen” or automatic renewal provisions) or amend any Letter of
Credit unless the requirements of this Section 1.4 are met as though a
new Letter of Credit were being requested and issued.

 

5

 

(e)                                  Payments
Pursuant to Letters of Credit.  The
Borrower agrees to reimburse immediately the Letter of Credit Issuer for any
draw under any Letter of Credit and to pay the Letter of Credit Issuer the
amount of all other charges and fees payable to the Letter of Credit Issuer in
connection with any Letter of Credit immediately when due, irrespective of any
claim, setoff, defense or other right which the Borrower may have at any time
against the Letter of Credit Issuer or any other Person.  Each drawing under any Letter of Credit
shall constitute a request by the Borrower to the Agent for a Borrowing of a
Base Rate Loan in the amount of such drawing. 
The Funding Date with respect to such borrowing shall be the date of
such drawing.

 

(f)                                    Indemnification;
Exoneration; Power of Attorney.

 

(i)                                     Indemnification.  In addition to amounts payable as elsewhere
provided in this Section 1.4, the Borrower agrees to protect, indemnify,
pay and save the Lenders and the Agent harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys’ fees) which any Lender or the Agent (other
than a Lender in its capacity as Letter of Credit Issuer) may incur or be
subject to as a consequence, direct or indirect, of the issuance of any Letter of
Credit.  The Borrower’s obligations
under this Section shall survive payment of all other Obligations.

 

(ii)                                  Assumption
of Risk by the Borrower.  As among
the Borrower, the Lenders, and the Agent, the Borrower assumes all risks of the
acts and omissions of, or misuse of any of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit.  In furtherance and not in limitation of the foregoing, the
Lenders and the Agent (other than a Lender in its capacity as Letter of Credit
Issuer) shall not be responsible for: 
(A) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any document submitted by any Person in connection with the
application for and issuance of and presentation of drafts with respect to any
of the Letters of Credit, even if it should prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (C) the failure of the beneficiary of any Letter of
Credit to comply duly with conditions required in order to draw upon such
Letter of Credit; (D) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (E) errors in interpretation of
technical terms; (F) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (G) the misapplication by the beneficiary of any Letter
of Credit of the proceeds of any drawing under such Letter of Credit; (H) any
consequences arising from causes beyond the control of the Lenders or the
Agent, including any act or omission, whether rightful or wrongful, of any
present or future de  jure or de  facto Governmental
Authority or (I) the Letter of Credit Issuer’s honor of a draw for which the
draw or any certificate fails to comply in any respect with the terms of the
Letter of Credit.  None of the foregoing
shall affect, impair or prevent the vesting of any rights or powers of the
Agent or any Lender under this Section 1.4(f).

 

(iii)                               Exoneration.  Without limiting the foregoing, no action or
omission whatsoever by Agent or any Lender (excluding any Lender in its
capacity as a Letter of Credit Issuer) shall result in any liability of Agent
or any such Lender to the Borrower, or relieve the Borrower of any of its
obligations hereunder to any such Person.

 

6

 

 

(iv)                              Rights Against Letter of Credit Issuer. 
Nothing contained in this Agreement is intended to limit the Borrower’s
rights, if any, with respect to the Letter of Credit Issuer which arise as a
result of the letter of credit application and related documents executed by
and between the Borrower and the Letter of Credit Issuer.

 

(v)                                 Account Party.  The
Borrower hereby authorizes and directs any Letter of Credit Issuer to name the
Borrower as the “account party” therein and to deliver to the Agent all
instruments, documents and other writings and property received by the Letter
of Credit Issuer pursuant to the Letter of Credit, and to accept and rely upon
the Agent’s instructions and agreements with respect to all matters arising in
connection with the Letter of Credit or the application therefor.

 

(g)                                 Support of Letters of Credit.  If,
notwithstanding the provisions of Section 1.4(b) and Section 10.1,
any Letter of Credit is outstanding upon the termination of this Agreement,
then upon such termination the Borrower shall cause such letter of Credit to be
Fully Supported.

 

1.5                                 Bank Products.  The Borrower may request and
each Lender may, in its sole and absolute discretion, arrange for the Borrower
to obtain from such Lender or such Lender’s Affiliates Bank Products although
the Borrower is not required to do so. 
If Bank Products are provided by an Affiliate of a Lender, the Borrower
agrees to indemnify and hold the Agent, the Lender providing such Bank Products
and the other Lenders harmless from any and all costs and obligations now or
hereafter incurred by the Agent, the Lender providing such Bank Products and
the other Lenders which arise from any indemnity given by the Lender providing
such Bank Products to its Affiliates related to such Bank Products; provided,
however, nothing contained herein is intended to limit the Borrower’s
rights or increase the Borrower’s obligations, with respect to such Lender or
its Affiliates, if any, which arise as a result of the execution of documents
by and between the Borrower and such Lender which relate to Bank Products or
transactions pursuant to such documents. 
The agreement contained in this Section shall survive termination of
this Agreement with respect to obligations theretofore accrued.  The Borrower acknowledges and agrees that
the obtaining of Bank Products from a Lender or such Lender’s Affiliates (a) is
in the sole and absolute discretion of such Lender or such Lender’s Affiliates,
and (b) is subject to all rules and regulations of such Lender or such Lender’s
Affiliates.

 

1.6                                 Increase
in Commitments

 

(a)                                  Provided no Default or Event of Default exists,
upon notice to the Agent (which shall promptly notify the Lenders), the
Borrower may from time to time prior to the third anniversary of the Closing
Date, request an increase in the Total Facility Amount and the aggregate
Commitments hereunder by an amount (for all such requests) not exceeding
$50,000,000.  At the time of sending
such notice, the Borrower (in consultation with the Agent) shall specify the
time period within which each Lender is requested to respond (which shall in no
event be less than ten Business Days from the date of delivery of such notice
to the Lenders).  Each Lender shall
notify the Agent within such time period whether or not it agrees to increase
its Commitment and, if so, whether by an amount equal to, greater than, or less
than its Pro Rata Share of such requested increase.  Any Lender not responding within such time period shall be deemed
to have declined to increase its Commitment. 
The Agent shall notify the Borrower and each Lender of the Lenders’
responses to each request made hereunder. 
To achieve the full amount of a requested increase, the 

 

7

 

Borrower may also invite
additional Eligible Assignees to become Lenders pursuant to a joinder agreement
in form and substance satisfactory to the Agent and its counsel.

 

(b)                                 If the aggregate Commitments are increased in
accordance with this Section, the Agent and the Borrower shall determine the
effective date (the “Increase Effective Date”) and the final allocation of such
increase.  The Agent shall promptly
notify the Borrower and the Lenders of the final allocation of such increase
and the Increase Effective Date.  As a
condition precedent to such increase, the Borrower shall deliver to the Agent a
certificate of each Credit Party dated as of the Increase Effective Date (in
sufficient copies for each Lender) signed by a Responsible Officer of such
Credit Party (i) certifying and attaching the resolutions adopted by such
Credit Party approving or consenting to such increase, and (ii) in the case of
the Borrower, certifying that, before and after giving effect to such increase,
(A) the representations and warranties contained in Article 6 and the other
Loan Documents are true and correct on and as of the Extension Effective Date,
except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they are true and correct as of such
earlier date, and except that for purposes of this Section 1.6, the
representations and warranties contained in subsections (a) of Section 6.6
shall be deemed to refer to the most recent statements furnished pursuant to
subsections (a) and (b), of Section 5.2, and (B) no Default or Event of
Default exists.  On the Increase
Effective Date, Schedule 1.1 shall be deemed to be deleted in its
entirety and replaced with a new Schedule 1.1 reflecting the increased
Commitments. The respective Lenders shall fund and/or be pre-paid, as
applicable, any Loans outstanding on the Increase Effective Date (and the
Borrower shall pay any additional amounts required pursuant to Section 4.4)
to the extent necessary to keep the outstanding Loans ratable with any revised
Pro Rata Shares arising from any non-ratable increase in the Commitments under
this Section.

 

(c)                                  This Section shall supersede any provisions
in Sections 11.1 or 12.12 to the contrary.

 

ARTICLE 2

INTEREST
AND FEES

 

2.1                                 Interest.

 

(a)                                  Interest Rates.  All
outstanding Obligations shall bear interest on the unpaid principal amount
thereof (including, to the extent permitted by law, on interest thereon not
paid when due) from the date made until paid in full in cash at a rate
determined by reference to the Base Rate or the LIBOR Rate plus the
Applicable Margins as set forth below, but not to exceed the Maximum Rate.  If at any time Loans are outstanding with
respect to which the Borrower has not delivered to the Agent a notice
specifying the basis for determining the interest rate applicable thereto in
accordance herewith, those Loans shall bear interest at a rate determined by
reference to the Base Rate until notice to the contrary has been given to the
Agent in accordance with this Agreement and such notice has become
effective.  Except as otherwise provided
herein, the outstanding Obligations shall bear interest as follows:

 

(i)                                     For all Base Rate Loans and other Obligations
(other than LIBOR Loans) at a fluctuating per annum rate equal to the Base Rate
plus the Applicable Margin; and

 

8

 

(ii)                                  For all LIBOR Loans at a per annum rate equal
to the LIBOR Rate plus the Applicable Margin.

 

Each
change in the Base Rate shall be reflected in the interest rate applicable to
Base Rate Loans as of the effective date of such change.  All interest charges shall be computed on
the basis of a year of 360 days and actual days elapsed (which results in more
interest being paid than if computed on the basis of a 365-day year).

 

(b)                                 Payment of Interest.  The
Borrower shall pay to the Agent, for the ratable benefit of Lenders, interest
accrued on all Base Rate Loans in arrears on the first day of each month
hereafter and on the Termination Date. 
The Borrower shall pay to the Agent, for the ratable benefit of Lenders,
interest on all LIBOR Loans in arrears on each LIBOR Interest Payment Date.

 

(c)                                  Default Rate.  If
any Event of Default occurs and is continuing and the Agent or the Required
Lenders in their discretion so elect, then, while any such Event of Default is
continuing, all of the Obligations shall bear interest at the Default Rate applicable
thereto.

 

2.2                                 Continuation and Conversion Elections.

 

(a)                                  The Borrower may:

 

(i)                                     elect, as of any Business Day, in the case of
Base Rate Loans to convert any Base Rate Loans (or any part thereof in an
amount not less than $1,000,000, or that is in an integral multiple of
$1,000,000 in excess thereof) into LIBOR Loans; or

 

(ii)                                  elect, as of the last day of the applicable
Interest Period, to continue any LIBOR Loans having Interest Periods expiring
on such day (or any part thereof in an amount not less than $1,000,000, or that
is in an integral multiple of $1,000,000 in excess thereof);

 

provided, that if at any time the aggregate amount of
LIBOR Loans in respect of any Borrowing is reduced, by payment, prepayment, or
conversion of part thereof to be less than $1,000,000, such LIBOR Loans shall
automatically convert into Base Rate Loans; provided  further that
if the notice shall fail to specify the duration of the Interest Period, such
Interest Period shall be one month.

 

(b)                                 The Borrower shall deliver a notice of
continuation/conversion (“Notice of Continuation/Conversion”) to the Agent not
later than 12:00 noon (Atlanta, Georgia time) at least three (3) Business Days
in advance of the Continuation/Conversion Date, if the Loans are to be
converted into or continued as LIBOR Loans and specifying:

 

(i)                                     the proposed Continuation/Conversion Date;

 

(ii)                                  the aggregate amount of Loans to be converted
or renewed;

 

(iii)                               the type of Loans resulting from the proposed conversion or
continuation; and

 

9

 

(iv)                              the duration of the requested Interest Period, provided, however,
the Borrower may not select an Interest Period that ends after the Stated
Termination Date.

 

(c)                                  If upon the expiration of any Interest Period
applicable to LIBOR Loans, the Borrower has failed to select timely a new
Interest Period to be applicable to LIBOR Loans or if any Default or Event of
Default then exists, the Borrower shall be deemed to have elected to convert
such LIBOR Loans into Base Rate Loans effective as of the expiration date of
such Interest Period.

 

(d)                                 The Agent will promptly notify each Lender of
its receipt of a Notice of Continuation/Conversion.  All conversions and continuations shall be made ratably according
to the respective outstanding principal amounts of the Loans with respect to
which the notice was given held by each Lender.

 

(e)                                  There may not be more than ten (10) different
LIBOR Loans in effect hereunder at any time.

 

2.3                                 Maximum
Interest Rate.  In
no event shall any interest rate provided for hereunder exceed the maximum rate
legally chargeable by any Lender under applicable law for such Lender with
respect to loans of the type provided for hereunder (the “Maximum Rate”).  If, in any month, any interest rate, absent
such limitation, would have exceeded the Maximum Rate, then the interest rate
for that month shall be the Maximum Rate, and, if in future months, that
interest rate would otherwise be less than the Maximum Rate, then that interest
rate shall remain at the Maximum Rate until such time as the amount of interest
paid hereunder equals the amount of interest which would have been paid if the
same had not been limited by the Maximum Rate. 
In the event that, upon payment in full of the Obligations, the total
amount of interest paid or accrued under the terms of this Agreement is less
than the total amount of interest which would, but for this Section 2.3,
have been paid or accrued if the interest rate otherwise set forth in this
Agreement had at all times been in effect, then the Borrower shall, to the
extent permitted by applicable law, pay the Agent, for the account of the
Lenders, an amount equal to the excess of (a) the lesser of (i) the amount of
interest which would have been charged if the Maximum Rate had, at all times,
been in effect or (ii) the amount of interest which would have accrued had the
interest rate otherwise set forth in this Agreement, at all times, been in
effect over (b) the amount of interest actually paid or accrued under this
Agreement.  If a court of competent
jurisdiction determines that the Agent and/or any Lender has received interest
and other charges hereunder in excess of the Maximum Rate, such excess shall be
deemed received on account of, and shall automatically be applied to reduce, the
Obligations other than interest, in the inverse order of maturity, and if there
are no Obligations outstanding, the Agent and/or such Lender shall refund to
the Borrower such excess.

 

2.4                                 Closing Fee.  The Borrower agrees to pay the Agent on the
Closing Date a closing fee (the “Closing Fee”) as set forth in the fee letter
dated June 16, 2003, between the Agent and the Borrower (the “Fee Letter”).

 

2.5                                 Unused Line Fee.  On the first day of each
month and on the Termination Date the Borrower agrees to pay to the Agent, for
the account of the Lenders, in accordance with their respective Pro Rata
Shares, an unused line fee (the “Unused Line Fee”) equal to one-half of one
percent (.50%) per annum times the amount by which the Maximum Revolver Amount
exceeded the sum of the average daily outstanding amount of Revolving Loans and
the average daily undrawn face 

 

10

 

amount of outstanding
Letters of Credit, during the immediately preceding month or shorter period if
calculated for the first month hereafter or on the Termination Date.  The Unused Line Fee shall be computed on the
basis of a 360-day year for the actual number of days elapsed.  All principal payments received by the Agent
shall be deemed to be credited to the Borrower’s Loan Account immediately upon
receipt for purposes of calculating the Unused Line Fee pursuant to this Section
2.5.

 

2.6                                 Letter of Credit Fee.  The Borrower agrees to pay to
the Agent, for the account of the Lenders, in accordance with their respective
Pro Rata Shares, for each Letter of Credit, a fee (the “Letter of Credit Fee”)
equal to the Applicable Margin for LIBOR Loans and to Agent for the benefit of
the Letter of Credit Issuer a fronting fee (the “Fronting Fee”) of one-quarter
of one percent (.250%) per annum of the undrawn face amount of each Letter of
Credit, and to the Letter of Credit Issuer, such out-of-pocket costs, fees and
expenses incurred by the Letter of Credit Issuer in connection with the
application for, processing of, issuance of, or amendment to any Letter of
Credit, as the Letter of Credit Issuer and the Borrower shall agree upon, but
which costs, fees and expenses shall not include the Fronting Fee.  The Letter of Credit Fee shall be payable
monthly in arrears on the first day of each month following any month in which
a Letter of Credit is outstanding and on the Termination Date.  The Fronting Fee shall be payable on each
date of issuance or renewal (automatic or otherwise) of each Letter of Credit.
The Letter of Credit Fee and the Fronting Fee shall be computed on the basis of
a 360-day year for the actual number of days elapsed.

 

ARTICLE 3

PAYMENTS
AND PREPAYMENTS

 

3.1                                 Revolving Loans.  The Borrower shall repay the
outstanding principal balance of the Revolving Loans, plus all accrued but
unpaid interest thereon, on the Termination Date.  The Borrower may prepay Revolving Loans at any time, and reborrow
subject to the terms of this Agreement. 
In addition, and without limiting the generality of the foregoing, upon demand
the Borrower shall pay to the Agent, for account of the Lenders, the amount,
without duplication, by which the Aggregate Revolver Outstandings exceeds the
lesser of the Borrowing Base or the Maximum Revolver Amount.

 

3.2                                 Termination
of Facility.  The
Borrower may terminate this Agreement upon at least five (5) Business Days’
notice to the Agent and the Lenders, upon (a) the payment in full of all
outstanding Revolving Loans, together with accrued interest thereon, and the
cancellation and return of all outstanding Letters of Credit or such Letters of
Credit being Fully Supported, (b) the payment of the early termination fee set
forth below, (c) the payment in full in cash of all reimbursable expenses and
other Obligations, and (d) with respect to any LIBOR Loans prepaid, payment of
the amounts due under Section 4.4, if any, in each case on the
Termination Date.  If this Agreement is
terminated at any time prior to the first anniversary of the Closing Date,
whether pursuant to this Section or pursuant to Section 9.2, the
Borrower shall pay to the Agent, for the account of the Lenders, an early
termination fee in an amount equal to one percent (1.00%) of the Commitments
(the “Termination Fee”). 
Notwithstanding the foregoing, no Termination Fee shall be payable if
the termination referred to in the immediately preceding sentence shall occur
as a result of a refinancing of the credit facilities provided hereunder by a
replacement credit facility or facilities provided by, or participated in and
agented by, Bank of America or any Affiliate thereof.

 

3.3                                 [Intentionally omitted.]

 

11

 

3.4                                 [Intentionally omitted.]

 

3.5                                 Repayments of the Loans From Asset Dispositions.

 

(a)                                  Immediately upon receipt by any Credit Party
of proceeds of any asset disposition (excluding proceeds of asset dispositions
permitted by Section 7.9(b)), if at the time of such receipt
Availability is not $60,000,000 or more, then the Borrower shall repay any
outstanding Loans (excluding any Letters of Credit) by making a payment to the
Agent in an amount equal to all such proceeds, net of (A) commissions and other
reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by Borrower in connection
therewith (in each case, paid to non-Affiliates), (B) transfer taxes, (C)
amounts payable to holders of senior Liens (to the extent such Liens constitute
Permitted Liens hereunder), if any, and (D) 
appropriate reserves reasonably acceptable to the Agent for income taxes
and contingent liabilities in accordance with GAAP in connection therewith
(“Net Proceeds”); provided, however, that with respect to repayment of LIBOR
Loans pursuant to this Section, if additional amounts would be required to be paid
pursuant to Section 4.4, at the Borrower’s request, the Agent shall not
apply such Net Proceeds to repay such LIBOR Loans until the end of the Interest
Periods applicable thereto and shall hold such Net Proceeds as cash collateral
for the benefit of the Lenders until such repayment is made.

 

(b)                                 Repayments from proceeds of any asset
disposition shall be applied as follows: first, to accrued interest with
respect to the Revolving Loans, second, to pay the principal of the
Revolving Loans, third to cash collateralize outstanding Letters of
Credit, and fourth, to repay any other outstanding Obligations, and fifth,
to the Borrower or otherwise as directed by a court of competent jurisdiction.

 

(c)                                  No provision contained in this Section 3.5
shall constitute a consent to an asset disposition that is otherwise not
permitted by the terms of this Agreement.

 

3.6                                 Payments
by the Borrower.

 

(a)                                  All payments to be made by the Borrower shall
be made without set-off, recoupment or counterclaim.  Except as otherwise expressly provided herein, all payments by
the Borrower shall be made to the Agent for the account of the Lenders, at the
account designated by the Agent and shall be made in Dollars and in immediately
available funds, no later than 12:00 noon (Atlanta, Georgia time) on the date
specified herein.  Any payment received
by the Agent after such time shall be deemed (for purposes of calculating
interest only) to have been received on the following Business Day and any
applicable interest shall continue to accrue.

 

(b)                                 Subject to the provisions set forth in the
definition of “Interest Period”, whenever any payment is due on a day other
than a Business Day, such payment shall be due on the following Business Day,
and such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.

 

(c)                                  If any LIBOR Loans are repaid prior to the
expiration date of the Interest Period applicable thereto, the Borrower shall
pay to the Lenders the amounts described in Section 4.4.

 

12

 

3.7                                 Payments
as Revolving Loans.  At
the election of Agent, all payments of principal, interest, reimbursement
obligations in connection with Letters of Credit, fees, premiums, reimbursable
expenses and other sums payable hereunder, may be paid from the proceeds of
Revolving Loans made hereunder.  The
Borrower hereby irrevocably authorizes the Agent to charge the Loan Account for
the purpose of paying all amounts from time to time due hereunder and agrees
that all such amounts charged shall constitute Revolving Loans (including
Non-Ratable Loans and Agent Advances). 
The Agent shall give the Borrower notice thereof to the extent any
charge is made to the Loan Account pursuant to this Section 3.7.

 

3.8                                 Apportionment, Application and Reversal of Payments. 
Principal and interest payments shall be apportioned ratably among the
Lenders (according to the unpaid principal balance of the Loans to which such
payments relate held by each Lender) and payments of the fees shall, as
applicable, be apportioned ratably among the Lenders, except for fees payable
solely to Agent and the Letter of Credit Issuer and except as provided in Section
11.1(b).  All payments shall be
remitted to the Agent and all such payments not relating to principal or
interest of specific Loans, or not constituting payment of specific fees, and
all proceeds of Accounts or other Collateral received by the Agent, shall be
applied, ratably, subject to the provisions of this Agreement, first, to
pay any fees, indemnities or expense reimbursements then due to the Agent from
any Credit Party and to pay any amounts under ACH Transactions then owing to
the Bank or any Affiliate of the Bank; second, to pay any fees or
expense reimbursements then due to the Lenders from any Credit Party; third,
to pay interest due in respect of all Loans, including Non-Ratable Loans and
Agent Advances; fourth, to pay or prepay principal of the Non-Ratable
Loans and Agent Advances; fifth, to pay or prepay principal of the
Revolving Loans (other than Non-Ratable Loans and Agent Advances) and unpaid
reimbursement obligations in respect of Letters of Credit; sixth, to pay
an amount to the Agent equal to all outstanding Letter of Credit Obligations to
be held as cash collateral for such Obligations; and seventh, to the
payment of any other Obligation due to the Agent, any Lender or any of their
Affiliates by any Credit Party (including any Obligations arising under Hedge
Agreements; provided, that, (i) if any Lender (or its Affiliates) other than
the Bank (or its Affiliates) provides Hedge Agreements to a Credit Party, such
Lender shall report to the Agent the current exposure of the Credit Parties to
such Lender under such Hedge Agreements (and any increase in such exposure
since the last report) no less frequently than monthly and whenever requested
by the Agent, and (ii) if there is any increase in the exposure of the Credit
Parties to such Lender under such Hedge Agreements and such Lender fails to
report such increased exposure to the Agent as required in clause (i) above,
then, notwithstanding anything to the contrary in this Agreement or any other
Loan Document, the payment of such increased exposure shall not constitute an
Obligation and shall not be secured by any of the Agent’s Liens.  Notwithstanding anything to the contrary
contained in this Agreement, unless so directed by the Borrower, or unless an
Event of Default has occurred and is continuing, neither the Agent nor any
Lender shall apply any payments which it receives to any LIBOR Loan, except (a)
on the expiration date of the Interest Period applicable to any such LIBOR
Loan, or (b) in the event, and only to the extent, that there are no
outstanding Base Rate Loans and, in any event, the Borrowers shall pay LIBOR
breakage losses in accordance with Section 4.4.  The Agent and the Lenders shall have the
continuing and exclusive right to apply and reverse and reapply any and all
such proceeds and payments to any portion of the Obligations.

 

3.9                                 Indemnity
for Returned Payments.  If
after receipt of any payment which is applied to the payment of all or any part
of the Obligations, the Agent, any Lender, the Bank or any Affiliate of the
Bank (each an “Affected Payee”) is for any reason compelled to surrender such
payment or proceeds to any Person because such payment or application of
proceeds is invalidated,

 

13

 

declared fraudulent, set
aside, determined to be void or voidable as a preference, impermissible setoff,
or a diversion of trust funds, or for any other reason, then the Obligations or
part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Affected Payee and the Borrower shall be liable to pay to
the Affected Payee and the Lenders, and hereby does indemnify the Affected
Payee and hold the Agent and the Lenders harmless for the amount of such
payment or proceeds surrendered.  The
provisions of this Section 3.9 shall be and remain effective
notwithstanding any contrary action which may have been taken by the Affected
Payee in reliance upon such payment or application of proceeds, and any such
contrary action so taken shall be without prejudice to the Affected Payee’s
rights under this Agreement and shall be deemed to have been conditioned upon
such payment or application of proceeds having become final and
irrevocable.  The provisions of this Section
3.9 shall survive the termination of this Agreement.

 

3.10                           Agent’s and Lenders’ Books and Records; Monthly Statements.  The
Agent shall record the principal amount of the Loans owing to each Lender, the
undrawn face amount of all outstanding Letters of Credit and the aggregate
amount of unpaid reimbursement obligations outstanding with respect to the
Letters of Credit from time to time on its books.  In addition, each Lender may note the date and amount of each
payment or prepayment of principal of such Lender’s Loans in its books and
records.  Failure by Agent or any Lender
to make such notation shall not affect the obligations of the Borrower with
respect to the Loans or the Letters of Credit. 
The Borrower agrees that the Agent’s and each Lender’s books and records
showing the Obligations and the transactions pursuant to this Agreement and the
other Loan Documents shall be admissible in any action or proceeding arising
therefrom, and shall constitute rebuttably presumptive proof thereof,
irrespective of whether any Obligation is also evidenced by a promissory note
or other instrument.  The Agent will
provide to the Borrower a monthly statement of Loans, payments, and other
transactions pursuant to this Agreement. 
Such statement shall be rebuttably presumed correct, accurate, and
binding on the Borrower and an account stated (except for reversals and
reapplications of payments made as provided in Section 3.8 and
corrections of errors discovered by the Agent), unless the Borrower notifies
the Agent in writing to the contrary within thirty (30) days after such
statement is rendered.  In the event a
timely written notice of objections is given by the Borrower, only the items to
which exception is expressly made will be considered to be disputed by the
Borrower.

 

ARTICLE 4

TAXES,
YIELD PROTECTION AND ILLEGALITY

 

4.1                                 Taxes.

 

(a)                                  Any and all payments by the Borrower to each
Lender or the Agent under this Agreement and any other Loan Document shall be
made free and clear of, and without deduction or withholding for any
Taxes.  In addition, the Borrower shall
pay all Other Taxes.

 

(b)                                 The Borrower agrees to indemnify and hold
harmless each Lender and the Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by any Lender or the Agent and any liability
(including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. 
Payment under this indemnification shall be made within 30 days after
the date such Lender or the Agent makes written demand describing in reasonable
detail the basis therefor.

 

14

 

(c)                                  If the Borrower shall be required by law to
deduct or withhold any Taxes or Other Taxes from or in respect of any sum
payable hereunder to any Lender or the Agent, then:

 

(i)                                     the sum payable shall be increased as
necessary so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums payable
under this Section) such Lender or the Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions or
withholdings been made;

 

(ii)                                  the Borrower shall make such deductions and
withholdings;

 

(iii)                               the Borrower shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with applicable law;
and

 

(iv)                              the Borrower shall also pay to each Lender or the Agent for the account
of such Lender, at the time interest is paid, all additional amounts which the
respective Lender specifies as necessary to preserve the after-tax yield such
Lender would have received if such Taxes or Other Taxes had not been imposed.

 

(d)                                 At the Agent’s request, within 30 days after
the date of any payment by the Borrower of Taxes or Other Taxes, the Borrower
shall furnish the Agent the original or a certified copy of a receipt
evidencing payment thereof, or other evidence of payment satisfactory to the
Agent.

 

(e)                                  If the Borrower is required to pay additional
amounts to any Lender or the Agent pursuant to subsection (c) of this
Section, then such Lender shall use reasonable efforts (consistent with legal
and regulatory restrictions) to change the jurisdiction of its lending office
so as to eliminate any such additional payment by the Borrower which may
thereafter accrue, if such change in the judgment of such Lender is not
otherwise disadvantageous to such Lender.

 

(f)                                    If the Agent or a Lender determines, in its
sole discretion, that it has received a refund of any Taxes or Other Taxes or a
credit resulting from the payment of any Taxes or Other Taxes as to which it
has been indemnified by the Borrower or with respect to which the Borrower has
paid additional amounts pursuant to this Section 4.1, it shall pay to
the Borrower an amount equal to such refund or credit (but only to the extent
of indemnity payments made, or additional amounts paid, by the Borrower under
this Section with respect to the Taxes or Other Taxes or credit giving rise to
such refund), net of all out-of-pocket expenses of the Agent or such Lender, as
the case may be, and without interest (other than any interest paid by the
relevant Government Authority with respect to such refund), provided that
the Borrower, upon the request of the Agent or such Lender, agrees to repay the
amount paid over to the Borrower (plus any penalties in the nature of interest,
interest or other charges (but not other penalties) imposed by the relevant
Governmental Authority) to the Agent or such Lender in the event the Agent or
such Lender is required to repay such refund or credit to such Governmental
Authority.  This paragraph shall not be
construed to require the Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Borrower or any other Person.

 

15

 

(g)                                 The Borrower shall not be obligated to pay
any additional amounts in respect of United States federal income tax (or make
an indemnification payment) pursuant to this Section 4.1 to any Lender
(including, without limitation, any entity to which any Lender sells, assigns,
grants a participation in, or otherwise transfers its rights under this
Agreement) if the obligation to pay such additional amounts (or such
indemnification) would not have arisen but for a failure of such Lender to
comply with its obligations under Section 12.10.

 

(h)                                 To the extent the Agent or any Lender is
contesting any Taxes or Other Taxes it reasonably believes were improperly
assessed, the Agent or such Lender will give the Borrower prior notice of and
the reasonable opportunity to participate in any such action.

 

4.2                                 Illegality.

 

(a)                                  If after the date of this Agreement the
introduction of any Requirement of Law, or any change in any Requirement of
Law, or in the interpretation or administration of any Requirement of Law, has
made it unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Lender or its applicable lending office
to make LIBOR Loans, then, on notice thereof by that Lender to the Borrower
through the Agent, any obligation of that Lender to make LIBOR Loans shall be
suspended until that Lender notifies the Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.

 

(b)                                 If pursuant to any circumstance listed in Section
4.2(a) it is unlawful to maintain any LIBOR Loan, the Borrower shall, upon
its receipt of notice of such fact and demand from a Lender (with a copy to the
Agent), prepay in full such LIBOR Loans of that Lender then outstanding,
together with interest accrued thereon and amounts required under Section
4.4, either on the last day of the Interest Period thereof, if that Lender
may lawfully continue to maintain such LIBOR Loans to such day, or immediately,
if that Lender may not lawfully continue to maintain such LIBOR Loans.  If the Borrower is required to so prepay any
LIBOR Loans, then concurrently with such prepayment, the Borrower shall borrow
from the affected Lender, in the amount of such repayment, a Base Rate Loan.

 

4.3                                 Increased Costs and Reduction of Return.

 

(a)                                  If any Lender determines that due to either
(i) the introduction of or any change in the interpretation of any law or
regulation after the date of this Agreement or (ii) the compliance by that
Lender with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to such Lender of agreeing to make or making, funding
or maintaining any LIBOR Loans, then the Borrower shall be liable for, and
shall from time to time, upon demand (with a copy of such demand to be sent to
the Agent), pay to the Agent for the account of such Lender, additional amounts
as are sufficient to compensate such Lender for such increased costs.

 

(b)                                 If any Lender shall have determined that (i)
the introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance by such Lender or any corporation or other entity
controlling such Lender with any Capital Adequacy Regulation, affects or would
affect the amount of capital required or expected to

 

16

 

be maintained by such Lender
or any corporation or other entity controlling such Lender and (taking into
consideration such Lender’s or such corporation’s or other entity’s policies
with respect to capital adequacy and such Lender’s desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitments, loans, credits or obligations under this Agreement, then, upon
demand of such Lender to the Borrower through the Agent, the Borrower shall pay
to such Lender, from time to time as specified by such Lender, additional
amounts sufficient to compensate such Lender for such increase.

 

4.4                                 Funding Losses.  The Borrower shall reimburse
each Lender and hold each Lender harmless from any loss or expense which such
Lender may sustain or incur as a consequence of:

 

(a)                                  the failure of the Borrower to make on a
timely basis any payment of principal of any LIBOR Loan;

 

(b)                                 the failure of the Borrower to borrow,
continue or convert a Loan after the Borrower has given (or is deemed to have
given) a Notice of Borrowing or a Notice of Continuation/Conversion; or

 

(c)                                  the prepayment or other payment (including
after acceleration thereof) of any LIBOR Loans on a day that is not the last
day of the relevant Interest Period;

 

including
any such loss of anticipated profit and any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain its LIBOR Loans
or from fees payable to terminate the deposits from which such funds were
obtained.

 

4.5                                 Inability
to Determine Rates.  If
the Agent determines that for any reason adequate and reasonable means do not
exist for determining the LIBOR Rate for any requested Interest Period with
respect to a proposed LIBOR Loan, or that the LIBOR Rate for any requested
Interest Period with respect to a proposed LIBOR Loan does not adequately and
fairly reflect the cost to the Lenders of funding such Loan, the Agent will
promptly so notify the Borrower and each Lender (a “Rate Suspension
Notice”).  Upon receipt of such Rate
Suspension Notice, the Borrower may revoke any Notice of Borrowing or Notice of
Continuation/Conversion then submitted by it. 
If the Borrower does not revoke such Notice of Borrowing or Notice of
Continuation/Conversion, the Lenders shall make, convert or continue the Loans,
as proposed by the Borrower, in the amount specified in the applicable notice
submitted by the Borrower, but such Loans shall be made, converted or continued
as Base Rate Loans instead of LIBOR Loans. 
After the giving of any Rate Suspension Notice and until Agent shall
otherwise notify Borrower and the Lenders in writing that the circumstances
giving rise to such condition no longer exist, Borrower’s right to request the
making of or conversion to, and the Lenders’ obligations to make or convert to,
LIBOR Rate Loans shall be suspended. 
Any LIBOR Rate Loans outstanding at the commencement of any such
suspension shall be converted at the end of the then current Interest Period
for such Loans into Base Rate Loans unless such suspension has then ended or
LIBOR Rate Loans for another Interest Period are then available.

 

4.6                                 Certificates
of Agent.  If
any Lender claims reimbursement or compensation under this Article 4,
Agent shall determine the amount thereof and shall deliver to the Borrower
(with a copy to the affected Lender) a certificate setting forth in reasonable
detail the basis therefore and

 

17

 

the amount payable to the
affected Lender, and such certificate shall be presumptively correct absent
demonstrable error.

 

4.7                                 Survival.  The agreements and obligations of the
Borrower in this Article 4 shall survive the payment of all other
Obligations.

 

4.8                                 Participant
Rights.  No
Person purchasing from a Lender a participation in any Loan (as opposed to an
assignment) shall be entitled to any payment from or on behalf of Borrower
pursuant to Section 4.3 or Section 4.4 which would be in excess
of the applicable proportionate amount (based on the portion of the Loan in
which such Person is participating) which would then be payable to such Lender
if such Lender had not sold a participation in that portion of the Loan.

 

4.9                                 Alternate Office; Minimization of Costs.

 

(a)                                  To the extent reasonably possible, each
Lender shall designate an alternative lending office with respect to its LIBOR
Loans and otherwise take any reasonable actions to reduce any liability of
Borrower to such Lender under this Article 4, or to avoid the
unavailability of any type of Loans under Section 4.2 so long as such
Lender does not determine that such designation is materially disadvantageous
to such Lender.

 

(b)                                 If and with respect to each occasion that a
Lender either makes a demand for compensation pursuant to Sections 4.1
or 4.3 or is unable to fund LIBOR Rate Loans pursuant to Section 4.2
or such Lender is a Defaulting Lender, Borrower may, upon at least five
Business Days’ prior irrevocable written notice to each of such Lender and
Agent, in whole permanently replace the Commitment of such Lender; provided
that (i) no Default or Event of Default has occurred and is continuing at the
time of such proposed replacement of the Commitment of such Lender, and (ii)
Borrower shall replace such Commitment with the Commitment of a financial
institution reasonably satisfactory to Agent (and such consent of the Agent
shall not to be unreasonably withheld or delayed).  Such replacement Lender shall upon the effective date of
replacement purchase the Loans owed to such replaced Lender for the aggregate
amount thereof and shall thereupon for all purposes become a “Lender”
hereunder.  Such notice from Borrower
shall specify an effective date for the replacement of such Lender’s
Commitment, which date shall not be later than the thirtieth (30th)
day after the day such notice is given. 
On the effective date of any replacement of such Lender’s Commitment
pursuant to this Section 4.9, Borrower shall pay to Agent for the
account of such Lender (a) any fees due to such Lender to the date of such
replacement; (b) accrued interest on the principal amount of outstanding Loans
held by such Lender to the date of such replacement, and (c) the amount or
amounts requested by such Lender pursuant to Article 4.  On or before the effective date for the
replacement of such Lender’s Commitment, Borrower will cause any Letter of
Credit issued by such replaced Lender to be terminated or transferred to the
replacement Lender or to another Lender. 
Upon the effective date of repayment of any Lender’s Loans, the
termination or transfer of such Lender’s Letters of Credit and termination of
such Lender’s Commitment pursuant to this Section 4.9, such Lender shall
cease to be a Lender hereunder.  No such
termination of any such Lender’s Commitment and the purchase of such Lender’s
Loans and termination or transfer of such Lender’s Letters of Credit pursuant
to this Section 4.9 shall affect (i) any liability or obligation of
Borrower or any other Lender to such terminated Lender which accrued on or
prior to the date of such termination or (ii) such terminated Lender’s rights
hereunder in respect of any such liability or obligation.

 

18

 

(c)                                  Upon written notice to Agent and Borrower,
any Lender may designate a lending office other than that set forth on Schedule
1.1 and may assign all of its interests under this Agreement to such
lending office; provided that such designation and assignment do not at the
time of such designation and assignment increase the reasonably foreseeable
liability of Borrower under Article 4 or make an Interest Rate option
unavailable pursuant to Section 4.2.

 

ARTICLE 5

BOOKS
AND RECORDS; FINANCIAL INFORMATION; NOTICES

 

5.1                                 Books and
Records.  The
Borrower shall, and shall cause its Subsidiaries to, maintain, at all times,
correct and complete books, records and accounts in which complete, correct and
timely entries are made of its transactions in accordance with GAAP applied
consistently with the audited Financial Statements required to be delivered
pursuant to Section 5.2(a).  The
Borrower shall, and shall cause its Subsidiaries to, by means of appropriate
entries, reflect in such accounts and in all Financial Statements proper
liabilities and reserves for all taxes and proper provision for depreciation
and amortization of property and bad debts, all in accordance with GAAP.  The Borrower shall, and shall cause its
Subsidiaries to, maintain at all times books and records pertaining to the
Collateral in such detail, form and scope as the Agent or any Lender shall
reasonably require, including, but not limited to, records of (a) all payments
received and all credits and extensions granted with respect to the Accounts;
(b) the return, rejection, repossession, stoppage in transit, loss, damage, or
destruction of any Inventory; and (c) all other dealings affecting the
Collateral.

 

5.2                                 Financial
Information.  The
Borrower shall, and shall cause its Subsidiaries to, promptly furnish to each
Lender, all such financial information as the Agent shall reasonably request.
Without limiting the foregoing, the Borrower will furnish to the Agent, in
sufficient copies for distribution by the Agent to each Lender, in such detail
as the Agent or the Lenders shall request, the following:

 

(a)                                  As soon as available, but in any event not
later than ninety (90) days after the close of each Fiscal Year, a consolidated
audited balance sheet, income statement, cash flow statement and statement of
change in stockholders’ equity for the Borrower and its Subsidiaries for such
Fiscal Year, and the accompanying notes thereto, setting forth in each case in
comparative form figures for the previous Fiscal Year, all in reasonable
detail, fairly presenting the financial position and the results of operations
of the Borrower and its consolidated Subsidiaries as at the date thereof and
for the Fiscal Year then ended, and prepared in accordance with GAAP.  Such statements shall be examined in
accordance with generally accepted auditing standards by and, in the case of
such statements performed on a consolidated basis, accompanied by a report
thereon unqualified in any respect of independent certified public accountants
selected by the Borrower and reasonably satisfactory to the Agent.  The Borrower hereby authorizes the Agent to
communicate directly with its certified public accountants and, by this
provision, authorizes those accountants to disclose to the Agent any and all
financial statements and other supporting financial documents and schedules
relating to the Borrower and to discuss directly with the Agent the finances
and affairs of the Borrower; provided, however, that (i) the
Agent shall notify the Borrower of the Agent’s intention to discuss with such
certified public accountants the finances and affairs of the Borrower and (ii)
nothing herein shall restrict the right of the Borrower to be present during
any such discussion between its certified public accountants and the Agent.

 

(b)                                 As soon as available, but in any event not
later than (i) thirty (30) days after the end of each month (other than the
last month of any fiscal quarter), a consolidated 

 

19

 

unaudited balance sheet,
income statement and cash flow statement for the Borrower and its consolidated
Subsidiaries for such month and for the period from the beginning of the Fiscal
Year to the end of such month, and (ii) forty-five (45) days after the end of
each fiscal quarter, consolidated and consolidating unaudited balance sheets
and a consolidated income statement for the Borrower and its consolidated
United States Subsidiaries for such fiscal quarter and for the period from the
beginning of the Fiscal Year to the end of such fiscal quarter, all in
reasonable detail, fairly presenting the financial position and results of
operations of the Borrower and its consolidated Subsidiaries (or United States
Subsidiaries, as applicable) as at the date thereof and for such periods, and
in each case in comparable form, figures for the corresponding period in the
prior Fiscal Year, and prepared, other than with respect to consolidating
balance sheets, in accordance with GAAP applied consistently with the audited
Financial Statements required to be delivered pursuant to Section 5.2(a).  The Borrower shall certify by a certificate
signed by a Responsible Officer that all such statements have been prepared in
accordance with GAAP and present fairly the Borrower’s financial position as at
the dates thereof and its results of operations for the periods then ended,
subject to normal year-end adjustments.

 

(c)                                  With each of the annual audited Financial
Statements delivered pursuant to Section 5.2(a), and within forty-five
(45) days after the end of each fiscal quarter, a certificate of a Responsible
Officer of the Borrower setting forth in reasonable detail the calculations
required to establish that the Borrower was in compliance with the covenants
set forth in Sections 7.22 and 7.23 during the period covered in
such Financial Statements and as at the end thereof.  Within thirty (30) days after the end of each month, a
certificate of a Responsible Officer of the Borrower stating that, except as
explained in reasonable detail in such certificate, (i) all of the
representations and warranties of the Borrower contained in this Agreement and
the other Loan Documents are correct and complete in all material respects as
at the date of such certificate as if made at such time, except for those that
speak as of a particular date, (ii) the Borrower is, at the date of such
certificate, in compliance in all material respects with all of its respective
covenants and agreements in this Agreement and the other Loan Documents, (iii)
no Default or Event of Default then exists, and (iv) describing and analyzing
in reasonable detail all material trends, changes, and developments in each and
all Financial Statements.  If such
certificate discloses that a representation or warranty is not correct or
complete, or that a covenant has not been complied with, or that a Default or
Event of Default existed or exists, such certificate shall set forth what
action the Borrower has taken or proposes to take with respect thereto.

 

(d)                                 No sooner than sixty (60) days and not less
than thirty (30) days prior to the beginning of each Fiscal Year, annual
forecasts (to include a forecasted consolidated balance sheet, income statement
and cash flow statement) for the Borrower and its Subsidiaries as at the end of
and for each month of such Fiscal Year.

 

(e)                                  If requested by the Agent, promptly after
filing with the PBGC and the IRS, a copy of each annual report or other filing
filed with respect to each Plan of the Borrower.

 

(f)                                    Promptly upon the filing thereof, copies of
all reports on Forms 10-Q or 10-K and definitive proxy statements filed by the
Borrower or any of its Subsidiaries with the SEC under the Exchange Act, and
all material reports, notices, or statements received by the Borrower or any of
its Subsidiaries from the trustee under the Subordinated Note Indenture.

 

20

 

(g)                                 As soon as available, but in any event not
later than 15 days after the Borrower’s receipt thereof, a copy of each annual
management report and management letter prepared for the Borrower by any
independent certified public accountants of the Borrower.

 

(h)                                 Promptly after their preparation, copies of
any and all proxy statements, financial statements, and reports which the
Borrower makes available to its shareholders.

 

(i)                                     If requested by the Agent, within 30 days
after filing with the IRS, a copy of each federal income tax return filed by
the Borrower or by any of its Subsidiaries.

 

(j)                                     As soon as available, but in any event within
the period set forth in the Security Agreement, a Borrowing Base Certificate
with supporting information in accordance with Section 9 of the Security
Agreement.

 

(k)                                  Promptly after the Borrower has notified the
Agent of any intention by the Borrower to treat the Loans and/or Letters of
Credit and related transactions as being a “reportable transaction” (within the
meaning of Treasury Regulation Section 1.6011-4), a duly completed copy of IRS
Form 8886 or any successor form.

 

(l)                                     Such additional information as the Agent
and/or any Lender may from time to time reasonably request regarding the
financial and business affairs of the Borrower or any Subsidiary.

 

(m)                               Notwithstanding the requirements to Section
5.2(a) and (b) above, if there are no Loans outstanding and no
Borrowings hereunder for a period of ninety (90) consecutive days, the
requirements of Section 5.2(a) and (b) shall be suspended for as
long as no Borrowing occurs hereunder (the “Suspension Period”); provided,
however, all other reporting requirements under this Agreement shall
remain effective during the Suspension Period, including delivery of item
required under Section 5.2(c), (d) and (j) on the dates
they would otherwise have been required were the Suspension Period not in
effect.

 

5.3                                 Notices to the Lenders.  The Borrower shall notify the
Agent in writing of the following matters at the following times:

 

(a)                                  Immediately after becoming aware of any
Default or Event of Default;

 

(b)                                 Immediately after becoming aware of the
assertion by the holder of five percent (5%) or more any capital stock of the
Borrower or of any Subsidiary or the holder of any Debt of the Borrower or any
Subsidiary in a face amount in excess of $1,000,000 that a default exists with
respect thereto or that the Borrower or such Subsidiary is not in compliance
with the terms thereof, or the threat or commencement by such holder of any
enforcement action because of such asserted default or non-compliance (subject
in each above case to any applicable grace or cure periods);

 

(c)                                  Immediately after becoming aware of any event
or circumstance which could reasonably be expected to have a Material Adverse
Effect;

 

21

 

(d)                                 Immediately after becoming aware of any pending
or threatened action, suit, or proceeding, by any Person, or any pending or
threatened investigation by a Governmental Authority, which could reasonably be
expected to have a Material Adverse Effect;

 

(e)                                  Immediately after becoming aware of any pending
or threatened strike, work stoppage, unfair labor practice claim, or other
labor dispute affecting the Borrower or any of its Subsidiaries in a manner
which could reasonably be expected to have a Material Adverse Effect;

 

(f)                                    Immediately after becoming aware of any
violation of any law, statute, regulation, or ordinance of a Governmental
Authority affecting the Borrower or any Subsidiary which could reasonably be
expected to have a Material Adverse Effect;

 

(g)                                 Immediately after receipt of any notice of
any violation by the Borrower or any of its Subsidiaries of any Environmental
Law which could reasonably be expected to have a Material Adverse Effect or
that any Governmental Authority has asserted in writing that the Borrower or
any Subsidiary is not in compliance with any Environmental Law or is
investigating the Borrower’s or such Subsidiary’s compliance therewith;

 

(h)                                 Immediately after receipt of any written
notice that the Borrower or any of its Subsidiaries is or may be liable to any
Person as a result of the Release or threatened Release of any Contaminant or
that the Borrower or any Subsidiary is subject to investigation by any
Governmental Authority evaluating whether any remedial action is needed to
respond to the Release or threatened Release of any Contaminant which, in
either case, is reasonably likely to give rise to liability in excess of
$1,000,000;

 

(i)                                     Immediately after receipt of any written
notice of the imposition of any Environmental Lien against any property of the
Borrower or any of its Subsidiaries;

 

(j)                                     Within thirty (30) days prior to any change
in (i) any Credit Party’s name as it appears in the state of its incorporation
or other organization, (ii) any Credit Party’s state of incorporation or
organization, type of entity, organizational identification number, or trade
names under which any Credit Party will create Accounts or to which instruments
in payment of Accounts may be made payable or (iii) the locations of
Collateral;

 

(k)                                  Within ten (10) Business Days after the
Borrower or any ERISA Affiliate knows or has reason to know, that an ERISA
Event or a prohibited transaction (as defined in Sections 406 of ERISA and 4975
of the Code) has occurred, and, when known, any action taken or threatened by
the IRS, the DOL or the PBGC with respect thereto;

 

(l)                                     Upon request, or, in the event that such
filing reflects a significant change with respect to the matters covered
thereby, within ten (10) Business Days after the filing thereof with the PBGC,
the DOL or the IRS, as applicable, copies of the following:  (i) each annual report (form 5500 series),
including Schedule B thereto, filed with the PBGC, the DOL or the IRS with
respect to each Plan, (ii) a copy of each funding waiver request filed with the
PBGC, the DOL or the IRS with respect to any Plan and all communications
received by the Borrower or any ERISA Affiliate from the PBGC, the DOL or the
IRS with respect to such request, and (iii) a copy of each other filing or
notice filed with the PBGC, the DOL or the IRS, with respect to each Plan by
either the Borrower or any ERISA Affiliate;

 

22

 

(m)                               Upon request, copies of each actuarial report
for any Plan or Multi-employer Plan and annual report for any Multi-employer
Plan; and within ten (10) Business Days after receipt thereof by the Borrower
or any ERISA Affiliate, copies of the following:  (i) any notices of the PBGC’s intention to terminate a Plan or to
have a trustee appointed to administer such Plan; (ii) any favorable or
unfavorable determination letter from the IRS regarding the qualification of a
Plan under Section 401(a) of the Code; or (iii) any notice from a
Multi-employer Plan regarding the imposition of withdrawal liability;

 

(n)                                 Within ten (10) Business Days after the
occurrence thereof: (i) any changes in the benefits of any existing Plan which
increase the Borrower’s annual costs with respect thereto by an amount in
excess of $3,000,000, or the establishment of any new Plan or the commencement
of contributions to any Plan to which the Borrower or any ERISA Affiliate was
not previously contributing; or (ii) any failure by the Borrower or any ERISA
Affiliate to make a required installment or any other required payment under
Section 412 of the Code on or before the due date for such installment or
payment; or

 

(o)                                 Within ten (10) Business Days after the
Borrower or any ERISA Affiliate knows or has reason to know that any of the
following events has or will occur:  (i)
a Multi-employer Plan has been or will be terminated; (ii) the administrator or
plan sponsor of a Multi-employer Plan intends to terminate a Multi-employer
Plan; or (iii) the PBGC has instituted or will institute proceedings under
Section 4042 of ERISA to terminate a Multi-employer Plan.

 

Each notice given under this Section shall describe the subject matter
thereof in reasonable detail, and shall set forth the action that the Borrower,
its Subsidiary, or any ERISA Affiliate, as applicable, has taken or proposes to
take with respect thereto.

 

ARTICLE 6

GENERAL
WARRANTIES AND REPRESENTATIONS

 

The Borrower warrants and represents to the Agent and the Lenders that
except as hereafter disclosed to and accepted by the Agent and the Majority
Lenders in writing:

 

6.1                                 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents. 
Each Credit Party has the power and authority to execute, deliver and
perform each of the Loan Documents to which it is a party, to incur the
Obligations or the obligations under the Facility Guaranty, as applicable, and
to grant to the Agent Liens upon and security interests in the Collateral.  Each Credit Party has taken all necessary
action (including obtaining approval of its stockholders if necessary) to
authorize its execution, delivery, and performance of the Loan Documents to
which it is a party.  The Loan Documents
to which it is a party have been duly executed and delivered by each Credit
Party, and constitute the legal, valid and binding obligations of each Credit
Party, enforceable against it in accordance with their respective terms, except
to the extent that enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting the
enforcement of creditors’ rights or by the effect of general equitable principles.  Each Credit Party’s execution, delivery, and
performance of the Loan Documents to which it is a party do not and will not
conflict with, or constitute a violation or breach of, or result in the
imposition of any Lien upon the property of each Credit Party or any of its
Subsidiaries, by reason of the terms of (a) any contract, mortgage, lease,
agreement, indenture, or instrument to which the Borrower is a party or which
is binding upon it, (b) any Requirement of Law applicable to any Credit Party
or any of its Subsidiaries, or (c) the certificate or articles of 

 

23

 

incorporation or by-laws or
the limited liability company or limited partnership agreement of any Credit
Party or any of its Subsidiaries.

 

6.2                                 Validity and Priority of Security Interest.  The provisions of this
Agreement,  and the other Loan Documents
create legal and valid Liens on all the Collateral in favor of the Agent, for
the ratable benefit of the Agent and the Lenders, and such Liens constitute
perfected and continuing Liens on all the Collateral, having priority over all
other Liens on the Collateral, except for those Liens identified in clauses
(c), (d) and (e) of the definition of Permitted Liens
securing all the Obligations, and enforceable against each Credit Party and all
third parties. All of the Obligations constitute “Senior Debt” under and as
defined in the Subordinated Note Indenture.

 

6.3                                 Organization
and Qualification. 
Each Credit Party and each of its Subsidiaries (a) is duly organized or
incorporated and validly existing in good standing under the laws of the state
of its organization or incorporation, (b) is qualified to do business and is in
good standing in the jurisdictions set forth on Schedule 6.3 which are
the only jurisdictions in which qualification is necessary in order for it to
own or lease its property and conduct its business, except to the extent any
such failure to be so qualified would not have a Material Adverse Effect on
Borrower and (c) has all requisite power and authority to conduct its business
and to own its property.

 

6.4                                 Corporate
Name; Prior Transactions.  No
Credit Party has, during the past two (2) years, been known by or used any
other corporate or fictitious name, or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any
Person, or acquired any of its property outside of the ordinary course of
business.

 

6.5                                 Subsidiaries
and Affiliates.  Schedule
6.5 is a correct and complete list of the name and relationship to the
Borrower of each and all of the Borrower’s Subsidiaries and other Affiliates as
of the Closing Date.  Each Credit Party
is (a) duly incorporated or organized and validly existing in good standing under
the laws of its state of incorporation or organization set forth on Schedule
6.5, and (b) qualified to do business and in good standing in each
jurisdiction in which the failure to so qualify or be in good standing could
reasonably be expected to have a Material Adverse Effect and (c) has all
requisite power and authority to conduct its business and own its property.

 

6.6                                 Financial Statements and Projections.

 

(a)                                  The Borrower has delivered to the Agent and
the Lenders the audited balance sheet and related statements of income,
retained earnings, cash flows, and changes in stockholders equity for the
Borrower and its consolidated Subsidiaries as of December 27, 2002, and for the
Fiscal Year then ended, accompanied by the report thereon of its independent
certified public accountants, presently Deloitte & Touche LLP. The Borrower
has also delivered to the Agent and the Lenders the unaudited balance sheet and
related statements of income and cash flows for the Parent and its consolidated
Subsidiaries as of March 28, 2003. Such financial statements are attached
hereto as Exhibit C.  All such
financial statements have been prepared in accordance with GAAP and present
accurately and fairly in all material respects the financial position of the
Borrower and its consolidated Subsidiaries as at the dates thereof and their
results of operations for the periods then ended.

 

(b)                                 The Latest Projections when submitted to the
Lenders as required herein represent the Borrower’s best estimate of the future
financial performance of the Borrower and 

 

24

 

its consolidated
Subsidiaries for the periods set forth therein.  The Latest Projections have been prepared on the basis of the
assumptions set forth therein, which the Borrower believes are fair and
reasonable in light of current and reasonably foreseeable business conditions
at the time submitted to the Lenders.

 

6.7                                 Capitalization.

 

(a)                                  The Borrower’s authorized capital stock
consists of 200,000,000 shares of common stock, par value $.01 per share and
250,000 shares of preferred stock, par value $.01 per share, of which, as of
March 28, 2003, 59,289,544 shares of common stock were validly issued and
outstanding, fully paid and non-assessable.

 

(b)                                 The authorized capital stock of each
Subsidiary is set forth on Schedule 6.7 and all such shares are validly
issued and outstanding, fully paid and non-assessable and are owned
beneficially and of record as set forth in Schedule 6.7 hereto.

 

6.8                                 Solvency.  Each of the Borrower and its Subsidiaries,
on a consolidated basis, is Solvent prior to and after giving effect to the
Borrowings to be made on the Closing Date and the issuance of the Letters of
Credit to be issued on the Closing Date, and shall remain Solvent during the
term of this Agreement.

 

6.9                                 Debt.  After giving effect to the making of the
Revolving Loans to be made on the Closing Date, the Borrower and its
Subsidiaries other than Foreign Subsidiaries have no Debt, except (a) the
Obligations, and (b) Debt described on Schedule 6.9.

 

6.10                           Distributions.  Since March 31, 2003, no
Distribution has been declared, paid, or made upon or in respect of any capital
stock or other securities of the Borrower.

 

6.11                           [Intentionally omitted].

 

6.12                           Proprietary
Rights.  Schedule
6.12 sets forth a correct and complete list of all of the Credit Parties’
Proprietary Rights.  None of the
Proprietary Rights is subject to any licensing agreement or similar arrangement
except as set forth on Schedule 6.12. 
To the best of the Borrower’s knowledge, none of the Proprietary Rights
infringes on or conflicts with any other Person’s property, and no other
Person’s property infringes on or conflicts with the Proprietary Rights.  The Proprietary Rights described on Schedule
6.12 constitute all of the property of such type necessary to the current and
anticipated future conduct of the Credit Parties’ business.

 

6.13                           Trade Names.  All material trade names or styles under
which any Credit Party will create Accounts in the United States, or to which
instruments in payment of Accounts may be made payable, are listed on Schedule
6.13.

 

6.14                           Litigation.  Except as set forth on Schedule 6.14,
there is no pending, or to the best of the Borrower’s knowledge threatened,
action, suit, proceeding, or counterclaim by any Person, or to the best of the
Borrower’s knowledge, investigation by any Governmental Authority, or any basis
for any of the foregoing, which could reasonably be expected to have a Material
Adverse Effect.

 

25

 

6.15                           Labor Disputes.  Except as set forth on Schedule
6.15, as of the Closing Date (a) there is no collective bargaining
agreement or other labor contract covering employees of the Credit Parties, (b)
no such collective bargaining agreement or other labor contract is scheduled to
expire during the term of this Agreement, (c) no union or other labor
organization is seeking to organize, or to be recognized as, a collective
bargaining unit of employees of the Credit Parties or for any similar purpose,
and (d) there is no pending or (to the best of the Borrower’s knowledge)
threatened, strike, work stoppage, material unfair labor practice claim, or
other material labor dispute against or affecting the Credit Parties or their
employees.

 

6.16                           Environmental
Laws. 
Except as otherwise disclosed on Schedule 6.16:

 

(a)                                  The Credit Parties have complied in all
material respects with all Environmental Laws and no Credit Party nor any of
its presently owned real property or presently conducted operations, nor its
previously owned real property or prior operations, is subject to any
enforcement order from or liability agreement with any Governmental Authority
or private Person respecting (i) compliance with any Environmental Law or (ii)
any potential liabilities and costs or remedial action arising from the Release
or threatened Release of a Contaminant.

 

(b)                                 The Credit Parties have obtained all permits
necessary for their current operations under Environmental Laws, and all such
permits are in good standing and the Credit Parties are in compliance with all
material terms and conditions of such permits.

 

(c)                                  No Credit Party, nor, to the best of the
Borrower’s knowledge, any of its predecessors in interest, has in violation of
applicable law stored, treated or disposed of any hazardous waste.

 

(d)                                 No Credit Party has received any summons,
complaint, order or similar written notice indicating that it is not currently
in compliance with, or that any Governmental Authority is investigating its
compliance with, any Environmental Laws or that it is or may be liable to any
other Person as a result of a Release or threatened Release of a Contaminant.

 

(e)                                  To the best of the Borrower’s knowledge, none
of the present or past operations of the Credit Parties is the subject of any
investigation by any Governmental Authority evaluating whether any remedial
action is needed to respond to a Release or threatened Release of a
Contaminant.

 

(f)                                    There is not now, nor to the best of the
Borrower’s knowledge has there ever been on or in the Real Estate:

 

(1)                                  any underground storage tanks or surface
impoundments,

 

(2)                                  any asbestos-containing material, or

 

(3)                                  any polychlorinated biphenyls (PCBs) used in
hydraulic oils, electrical transformers or other equipment.

 

(g)                                 No Credit Party has filed any notice under
any requirement of Environmental Law reporting a spill or accidental and
unpermitted Release or discharge of a Contaminant into the environment.

 

26

 

(h)                                 No Credit Party has entered into any
negotiations or settlement agreements with any Person (including the prior
owner of its property) imposing material obligations or liabilities on any
Credit Party with respect to any remedial action in response to the Release of
a Contaminant or environmentally related claim.

 

(i)                                     None of the products manufactured,
distributed or sold by any Credit Party contain asbestos containing material.

 

(j)                                     No Environmental Lien has attached to the
Real Estate.

 

(k)                                  Notwithstanding the foregoing provisions of
this Section 6.16, all warranties, representations or other statements
in this Section 6.16 to the extent they relate to any property or
facility that is neither owned by, nor was previously owned by, any Credit
Party, which non-owed properties or facilities would include without limitation
any that are or were leased, licensed or otherwise occupied by any Credit
Party, are made based solely on the actual knowledge of any Credit Party.

 

6.17                           No Violation
of Law. 
Neither the Borrower nor any of its Subsidiaries is in violation of any
law, statute, regulation, ordinance, judgment, order, or decree applicable to
it which violation could reasonably be expected to have a Material Adverse
Effect.

 

6.18                           No Default.  Neither the Borrower nor any of its
Subsidiaries is in default with respect to any note, indenture, loan agreement,
mortgage, lease, deed, or other agreement to which the Borrower or such
Subsidiary is a party or by which it is bound, which default could reasonably
be expected to have a Material Adverse Effect.

 

6.19                           ERISA
Compliance. 
Except as specifically disclosed in Schedule 6.19:

 

(a)                                  Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law.  Each Plan which is intended
to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS and to the best knowledge of the Borrower,
nothing has occurred which would cause the loss of such qualification.  The Borrower and each ERISA Affiliate has
made all required contributions to any Plan subject to Section 412 of the Code,
and no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to any
Plan.

 

(b)                                 There are no pending or, to the best
knowledge of Borrower, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect.  There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.

 

(c)                                  (i) 
No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither the Borrower
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of 

 

27

 

ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a Multi-employer
Plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.

 

6.20                           Taxes.  The
Credit Parties have filed all federal income tax and all other material tax
returns and reports required to be filed, and have paid all federal and other
material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable unless such unpaid taxes and assessments would constitute a Permitted
Lien.

 

6.21                           Regulated Entities.  None
of the Borrower, any Person controlling the Borrower, or any Subsidiary, is an
“Investment Company” within the meaning of the Investment Company Act of
1940.  The Borrower is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code or law,
or any other federal or state statute or regulation limiting its ability to
incur indebtedness.

 

6.22                           Use
of Proceeds; Margin Regulations.  The
proceeds of the Loans are to be used solely for working capital and other
corporate purposes.  Neither the
Borrower nor any Subsidiary is engaged in the business of purchasing or selling
Margin Stock or extending credit for the purpose of purchasing or carrying
Margin Stock.

 

6.23                           Copyrights, Patents, Trademarks and Licenses, etc.  Each Credit Party owns or is
licensed or otherwise has the right to use all of the patents, trademarks,
service marks, trade names, copyrights, contractual franchises, licenses,
rights of way, authorizations and other rights that are material and reasonably
necessary for the operation of its businesses, without conflict with the rights
of any other Person.  To the best
knowledge of the Borrower, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by any Credit Party infringes upon any rights held
by any other Person.  No claim or
litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Borrower,
proposed, which, in either case, could reasonably be expected to have a
Material Adverse Effect.

 

6.24                           No
Material Adverse Change.  No
Material Adverse Effect has occurred since the date of the audited Financial
Statements delivered to the Lenders pursuant to Section 6.6(a).

 

6.25                           Full
Disclosure. 
None of the representations or warranties made by any Credit Party in
the Loan Documents as of the date such representations and warranties are made
or deemed made, and none of the statements contained in any exhibit, report,
statement or certificate furnished by or on behalf of any Credit Party in
connection with the Loan Documents (including the offering and disclosure
materials delivered by or on behalf of the Borrower to the Lenders prior to the
Closing Date), contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered.

 

6.26                           [Intentionally omitted].

 

28

 

6.27                           Bank Accounts.  Schedule 6.27 contains
as of the Closing Date a complete and accurate list of all bank accounts
maintained by all Credit Parties with any bank or other financial institution
in any Credit Party’s individual capacity, and not for any employee benefit
plan or political action committee.

 

6.28                           Governmental
Authorization.  No
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or other Person is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, the Credit Parties of any Loan Document to which it is a
party, except such as have been obtained, given or made, as applicable.

 

6.29                           Tax
Shelter Regulations.  The
Borrower does not intend to treat the Loans and/or Letters of Credit and
related transactions as being a “reportable transaction” (within the meaning of
Treasury Regulation Section 1.6011-4). 
In the event the Borrower determines to take any action inconsistent
with such intention, it will promptly notify the Agent thereof.   If the Borrower so notifies the Agent, the
Borrower acknowledges that one or more of the Lenders may treat its Loans
and/or its interest in Non-Ratable Loans and/or Agent Advances and/or Letters
of Credit as part of a transaction that is subject to Treasury Regulation
Section 301.6112-1, and such Lender or Lenders, as applicable, will maintain
the lists and other records required by such Treasury Regulation.

 

ARTICLE 7

AFFIRMATIVE
AND NEGATIVE COVENANTS

 

The Borrower covenants to the Agent and each Lender that, unless
written consent is obtained from the Majority Lenders or, if required under Section
11.1, all of the Lenders, so long as any of the Obligations remain
outstanding or this Agreement is in effect:

 

7.1                                 Taxes
and Other Obligations.  The
Borrower shall, and shall cause each of its Subsidiaries to, (a) file when due
all tax returns and other reports which it is required to file; and (b) pay, or
provide for the payment, when due, of all taxes, fees, assessments and other
governmental charges against it or upon its property, income and franchises,
make all required withholding and other tax deposits, and establish adequate
reserves for the payment of all such items, and provide to the Agent and the
Lenders, upon request, satisfactory evidence of its timely compliance with the
foregoing; provided, however, so long as the Borrower has
notified the Agent in writing, none of the Borrower nor any of its Subsidiaries
need pay any tax, fee, assessment, or governmental charge (i) it is contesting
in good faith by appropriate proceedings diligently pursued, (ii) as to which
the Borrower or its Subsidiary, as the case may be, has established proper
reserves as required under GAAP, and (iii) the nonpayment of which does not
result in the imposition of a Lien (other than a Permitted Lien).

 

7.2                                 Legal
Existence and Good Standing.  The
Borrower shall, and shall cause each of its Subsidiaries to, maintain its legal
existence and its qualification and good standing in all jurisdictions in which
the failure to maintain such existence and qualification or good standing could
reasonably be expected to have a Material Adverse Effect.

 

7.3                                 Compliance with Law and Agreements; Maintenance of Licenses.  The
Borrower shall comply, and shall cause each Subsidiary to comply, in all
material respects with all Requirements of Law of any Governmental Authority
having jurisdiction over it or its business (including the Federal Fair Labor
Standards Act and all Environmental Laws). 
Each Credit Party 

 

29

 

shall obtain and maintain
all licenses, permits, franchises, and governmental authorizations necessary to
own its property and to conduct its business as conducted on the Closing
Date.  The Borrower shall not permit any
Credit Party to, modify, amend or alter its certificate or articles of
incorporation, or its limited liability company operating agreement or limited
partnership agreement, as applicable, other than in a manner which does not
adversely affect the rights of the Lenders or the Agent.

 

7.4                                 Maintenance of Property; Inspection of Property.

 

(a)                                  Each Credit Party shall maintain all of its
property necessary and useful in the conduct of its business, in good operating
condition and repair, ordinary wear and tear excepted.

 

(b)                                 The Borrower shall permit representatives and
independent contractors of the Agent (at the expense of the Borrower not to
exceed four (4) times per year unless an Event of Default has occurred and is
continuing) to visit and inspect any of its or the other Credit Parties’
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom and to discuss its affairs, finances and
accounts with its officers and independent public accountants (in accordance
with Section 5.2(b)), at such reasonable times during normal business
hours and as soon as may be reasonably desired, upon reasonable advance notice
to the Borrower; provided, however, when an Event of Default
exists, the Agent or any Lender may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.

 

7.5                                 Insurance.

 

(a)                                  The Borrower shall maintain, and shall cause
each of the other Credit Parties to maintain, with financially sound and
reputable insurers having a rating of at least A- or better by Best Rating
Guide, insurance against loss or damage by fire with extended coverage; theft,
burglary, pilferage and loss in transit; public liability and third party
property damage; larceny, embezzlement or other criminal liability; business
extra expense; public liability and third party property damage; and such other
hazards, in each case having such limits, deductibles, exclusions and
co-insurance and other provisions providing no less coverage than insurance
customarily carried by similar businesses owning similar properties and
conducting similar operations.

 

(b)                                 The Borrower shall cause the Agent, for the
ratable benefit of the Agent and the Lenders, to be named as additional
insured, in a manner acceptable to the Agent. 
Each policy of insurance shall contain a clause or endorsement requiring
the insurer to give not less than thirty (30) days’ prior written notice to the
Agent in the event of cancellation of the policy for any reason whatsoever.  All premiums for such insurance shall be
paid by the Borrower when due, and certificates of insurance and, if requested
by the Agent or any Lender, photocopies of the policies, shall be delivered to
the Agent, in each case in sufficient quantity for distribution by the Agent to
each of the Lenders.  If the Borrower
fails to procure such insurance or to pay the premiums therefor when due, the
Agent may, and at the direction of the Majority Lenders shall, do so from the
proceeds of Revolving Loans.

 

7.6                                 [Intentionally
Omitted]

 

7.7                                 Environmental
Laws.

 

30

 

(a)                                  The Borrower shall, and shall cause each of
its Subsidiaries to, conduct its business in compliance with all Environmental
Laws applicable to it, including those relating to the generation, handling,
use, storage, and disposal of any Contaminant. 
The Borrower shall, and shall cause each of its Subsidiaries to, take
prompt and appropriate action to respond to any non-compliance with Environmental
Laws and shall regularly report to the Agent on such response.

 

(b)                                 The Agent and its representatives will have
the right at any reasonable time to enter and visit the Real Estate owned by
any Credit Party and any other place where any property of a Credit Party is
located for the purposes of observing such Real Estate, taking and removing
soil or groundwater samples, and conducting tests on any part of such Real
Estate.  The Agent is under no duty,
however, to visit or observe the Real Estate or to conduct tests, and any such
acts by the Agent will be solely for the purposes of protecting the Agent’s
Liens and preserving the Agent and the Lenders’ rights under the Loan
Documents.  No site visit, observation
or testing by the Agent and the Lenders will result in a waiver of any default
of the Borrower or impose any liability on the Agent or the Lenders.  In no event will any site visit, observation
or testing by the Agent be a representation that hazardous substances are or
are not present in, on or under the Real Estate, or that there has been or will
be compliance with any Environmental Law. 
None of the Borrower, any other Credit Party nor any other party is
entitled to rely on any site visit, observation or testing by the Agent.  The Agent and the Lenders owe no duty of
care to protect the Borrower, any other Credit Party or any other party
against, or to inform the Borrower, any other Credit Party or any other party
of, any hazardous substances or any other adverse condition affecting the Real
Estate.  The Agent may in its discretion
disclose to the Borrower or to any other party if so required by law any report
or findings made as a result of, or in connection with, any site visit,
observation or testing by the Agent. 
The Borrower understands and agrees that the Agent makes no warranty or
representation to the Borrower or any other party regarding the truth, accuracy
or completeness of any such report or findings that may be disclosed.  The Borrower also understands that depending
on the results of any site visit, observation or testing by the Agent and
disclosed to the Borrower, the Borrower or its Subsidiaries may have a legal
obligation to notify one or more environmental agencies of the results, that
such reporting requirements are site-specific, and are to be evaluated by the
Borrower without advice or assistance from the Agent.  In each instance, the Agent will give the Borrower reasonable
notice before entering such Real Estate or any other place the Agent is
permitted to enter under this Section 7.7(c).  The Agent will make reasonable efforts to avoid interfering with
the Borrower’s use of such Real Estate or any other property in exercising any
rights provided hereunder.

 

7.8                                 Compliance
with ERISA.  The
Borrower shall, and shall cause each of its ERISA Affiliates to:  (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; (c) make all required contributions
to any Plan subject to Section 412 of the Code; (d) not engage in a prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan; and (e) not engage in a transaction that could be subject to Section
4069 or 4212(c) of ERISA.

 

7.9                                 Mergers,
Consolidations or Sales.  (a)
No Credit Party shall enter into any transaction of merger, reorganization, or
consolidation, or sell, transfer, lease or otherwise dispose of all or
substantially all of its assets or wind up, liquidate or dissolve, or agree to
do any of the foregoing; provided, however, (i) any Guarantor may merge with or
transfer all or substantially all of its assets into or consolidate with the
Borrower or any other Guarantor and (ii) any other Person may merge into or
consolidate with the Borrower or any Subsidiary in connection with a Permitted
Acquisition; and (b) no Credit Party shall dispose of any of its assets (other
than in a merger, 

 

31

 

consolidation or sale
permitted under clause (a) above) having an aggregate value (determined at the
higher of book or market value) in excess of $10,000,000 in any Fiscal Year; provided,
however, that the Borrower may make additional dispositions of assets
having an aggregate value (determined at the higher of book or market value) of
up to $40,000,000 in any Fiscal Year if Availability is greater than
$75,000,000 before and after giving effect to any such additional
disposition.  Notwithstanding the
foregoing, nothing in this Section 7.9 shall limit or restrict Borrower
or any of its Subsidiaries from transactions involving the sale of the shares,
interests or assets of any of their respective Immaterial Subsidiaries.

 

7.10                           Distributions; Capital Change; Restricted Investments.  No
Credit Party shall (a) directly or indirectly declare or make, or incur any
liability to make, any Distribution, except Distributions to a Credit Party by
its Subsidiaries and Permitted Distributions, (b) make any change in its
capital structure which could have a Material Adverse Effect or (c) make any
Restricted Investment.

 

7.11                           Transactions Affecting Collateral or Obligations.  None of the Borrower nor any
of its Subsidiaries shall enter into any transaction which would be reasonably
expected to have a Material Adverse Effect.

 

7.12                           Guaranties.  No Credit Party shall make, issue, or become
liable on any Guaranty, except (a) any Facility Guaranty, (b) any Guaranty of
performance issued in support of operating agreements and transactions (except
borrowing or loan transactions) entered into in the ordinary course of their
business, (c) any Guaranty (other than a Facility Guaranty) of in respect of
borrowing or loan transactions provided that such Guaranty, together with all
other such Guaranty agreements in respect of borrowing or loan transactions, do
not at any point in time guaranty Debt other than Debt permitted under Section
7.13(e), (d) any Guaranty entered into in the ordinary course of business
to support the workers’ compensation insurance programs; and (e) Guaranties of
obligations of franchisees and licensees of Borrower and its Subsidiaries in an
aggregate amount not in excess of $20,000,000.

 

7.13                           Debt.  No Credit Party shall incur or maintain any
Debt, other than (a) the Obligations; (b) Debt described on Schedule 6.9;
(c) Capital Leases of Equipment and purchase money secured Debt incurred to
purchase Equipment provided that (i) Liens securing the same attach only
to the Equipment acquired by the incurrence of such Debt, and (ii) the
aggregate amount of such Debt (including Capital Leases) outstanding does not
exceed $10,000,000 at any time; (d) Debt evidencing a refunding, renewal or
extension of the Debt described on Schedule 6.9; provided that
(i) the principal amount thereof is not increased, (ii) the Liens, if any,
securing such refunded, renewed or extended Debt do not attach to any assets in
addition to those assets, if any, securing the Debt to be refunded, renewed or
extended, (iii) no Person that is not an obligor or guarantor of such Debt as
of the Closing Date shall become an obligor or guarantor thereof, and (iv) the
terms of such refunding, renewal or extension are no less favorable to the
applicable Credit Party, the Agent or the Lenders than the original Debt, (e)
Debt, other than any Debt described in clauses (a) through (d) of this Section
7.13, in an aggregate outstanding principal amount not in excess of
$20,000,000, (f) Permitted Affiliate Transactions, and (g) Permitted
Intercompany Advances.

 

7.14                           Prepayment.  No Credit Party shall voluntarily prepay any
Debt, except the Obligations in accordance with the terms of this Agreement and
Permitted Prepayments.

 

32

 

7.15                           Transactions
with Affiliates. 
Except for Permitted Affiliate Transactions, no Credit Party shall,
sell, transfer, distribute, or pay any money or property, including, but not
limited to, any fees or expenses of any nature (including, but not limited to,
any fees or expenses for management services), to any Affiliate, or lend or
advance money or property to any Affiliate, or invest in (by capital
contribution or otherwise) or purchase or repurchase any stock or indebtedness,
or any property, of any Affiliate, or become liable on any Guaranty of the
indebtedness, dividends, or other obligations of any Affiliate.

 

7.16                           Investment
Banking and Finder’s Fees. 
Neither the Borrower nor any of its Subsidiaries shall pay or agree to
pay, or reimburse any other party with respect to, any investment banking or
similar or related fee, underwriter’s fee, finder’s fee, or broker’s fee to any
Person in connection with this Agreement other than as set forth in the Fee
Letter.  The Borrower shall defend and
indemnify the Agent and the Lenders against and hold them harmless from all
claims of any Person that the Borrower is obligated to pay for any such fees,
and all costs and expenses (including attorneys’ fees) incurred by the Agent
and/or any Lender in connection therewith.

 

7.17                           Business
Conducted.  The
Borrower shall not and shall not permit any of its Subsidiaries to, engage
directly or indirectly, in any line of business other than the businesses in
which the Borrower is engaged on the Closing Date and businesses incidental or
directly related thereto.

 

7.18                           Liens.  No Credit Party shall create, incur, assume,
or permit to exist any Lien on any property now owned or hereafter acquired by
any of them, except Permitted Liens, and Liens, if any, in effect as of the
Closing Date described in Schedule 6.9 securing Debt described in Schedule
6.9 and Liens securing Capital Leases, purchase money Debt and other Debt
permitted in clause (e) of Section 7.13.

 

7.19                           Sale
and Leaseback Transactions.  No
Credit Party shall, directly or indirectly, enter into any arrangement with any
Person providing for such Credit Party to lease or rent property that such
Credit Party has sold or will sell or otherwise transfer to such Person, other
than any such transaction with respect to all or part of the Borrower’s
headquarters office facilities located at 2050 Spectrum Boulevard in Ft.
Lauderdale, Florida entered into on commercially reasonable terms.

 

7.20                           New
Subsidiaries.  The
Borrower shall not, directly or indirectly, organize, create, acquire or permit
to exist any Subsidiary other than (a) those Subsidiaries listed on Schedule
6.5, (b) Subsidiaries acquired in Permitted Acquisitions, (c) Immaterial
Subsidiaries and (d) other wholly-owned Subsidiaries that become Credit Parties
and with respect to which the Borrower shall have delivered all opinions, Loan
Documents and other documents and agreements required under Section 8.1
to have been delivered on the Closing Date with respect to comparable Credit
Parties.

 

7.21                           Fiscal Year.  The Borrower shall not change its Fiscal
Year.

 

7.22                           Capital
Expenditures.  The
Borrower and its Subsidiaries may make or incur any Capital Expenditure without
restriction hereunder if Availability is greater than $75,000,000 and no
Default or Event of Default exists or would be created thereby.  If Availability is less than or equal to
$75,000,000, neither the Borrower nor any of its Subsidiaries shall make or
incur any Capital Expenditure if, after giving effect thereto, any Default or
Event of Default shall exist or the aggregate amount of all Capital
Expenditures by the Borrower and its Subsidiaries on a consolidated 

 

33

 

basis would exceed (a)
$75,000,000 during the Fiscal Year ending December 26, 2003, (b) $35,000,000
during the Fiscal Year ending December 31, 2004 or (c) $25,000,000 during any
Fiscal Year thereafter.  To the extent
that the amount of Capital Expenditures of the Borrower and the Subsidiaries
during a Fiscal Year is less than the amount that is permitted by the preceding
sentence, but not an amount greater than $10,000,000 (the result of such
permitted amount minus the actual amount of Capital Expenditures during a
Fiscal Year being the “Unused Amount”), the aggregate amount of Capital
Expenditures that may be made by the Borrower and the Subsidiaries during the
next succeeding Fiscal Year will be the sum of the amount otherwise permitted
by the preceding sentence plus the Unused Amount from the previous Fiscal Year.

 

7.23                           Fixed Charge Coverage Ratio; Minimum Availability.  If as of the last day of any
fiscal month (each a “Calculation Month”) the Borrower shall not have a Fixed
Charge Coverage Ratio for the Twelve Month Period then ended of at least 1.25
to 1.00 (the “Fixed Charge Threshold”), the Borrower will maintain Availability
of at least $40,000,000 until the end of a Calculation Month for which the
Fixed Charge Threshold for the Twelve Month Period then ended is met.  In addition, upon delivery of the annual
financial statements required under Section 5.2(a) and the quarterly
financial statements required under 5.2 (b), the Borrower shall
recalculate the Fixed Charge Coverage Ratio for the Twelve Month Period most
recently ended incorporating any adjustments applicable for the Fiscal Year or
fiscal quarter then ended and the Availability requirements set forth in the
immediately preceding sentence shall apply; provided, however, if
the Borrower fails to deliver such financial statements on the date due
(without giving effect to any cure periods set forth in Section 9.1(c)),
the Borrower shall be deemed not to have met the Fixed Charge Threshold until
such time as such financial statements are delivered.

 

7.24                           Use of Proceeds.  The Borrower shall not, and
shall not suffer or permit any Subsidiary to, use any portion of the Loan
proceeds, directly or indirectly, (i) to purchase or carry Margin Stock, (ii)
to repay or otherwise refinance indebtedness of the Borrower or others incurred
to purchase or carry Margin Stock, (iii) to extend credit for the purpose of
purchasing or carrying any Margin Stock, or (iv) to acquire any security in any
transaction that is subject to Section 13 or 14 of the Exchange Act.

 

7.25                           Minimum
Availability.  The
Borrower shall not permit Availability at any time to be less than an amount
equal to two (2) weeks payroll expenses and payroll taxes of the Borrower and
its Subsidiaries other than Foreign Subsidiaries.

 

7.26                           Further
Assurances.  The
Credit Parties shall execute and deliver, or cause to be executed and
delivered, to the Agent and/or the Lenders such documents and agreements, and
shall take or cause to be taken such actions, as the Agent or any Lender may,
from time to time, reasonably request to carry out the terms and conditions of
this Agreement and the other Loan Documents.

 

ARTICLE 8

CONDITIONS
OF LENDING

 

8.1                                 Conditions Precedent to Making of Loans on the Closing Date.  The
obligation of the Lenders to make the initial Revolving Loans on the Closing
Date, and the obligation of the Agent to cause the Letter of Credit Issuer to
issue any Letter of Credit on the Closing Date, are subject to the following
conditions precedent having been satisfied in a manner satisfactory to the
Agent and each Lender:

 

34

 

(a)                                  This Agreement and the other Loan Documents
shall have been executed by each party thereto and the Borrower shall have
performed and complied with all covenants, agreements and conditions contained
herein and the other Loan Documents which are required to be performed or
complied with by the Borrower before or on such Closing Date.

 

(b)                                 All representations and warranties made
hereunder and in the other Loan Documents shall be true and correct as if made
on such date.

 

(c)                                  No Default or Event of Default shall have
occurred and be continuing after giving effect to the Loans to be made and the
Letters of Credit to be issued on the Closing Date.

 

(d)                                 The Agent and the Lenders shall have received
such opinions of counsel for the Borrower and its Subsidiaries as the Agent
shall request, each such opinion to be in a form, scope, and substance
satisfactory to the Agent, the Lenders, and their respective counsel.

 

(e)                                  Copies of the Subordinated Note Indenture,
certified as true and correct by a Responsible Officer.

 

(f)                                    The Agent shall have received a payoff letter
with respect to, or termination letter or other evidence of the termination of,
the Securitization Facility and the Securitization Documents, and termination
statements or other evidence of termination of any security interest granted in
connection with the Securitization Facility, together with evidence of the sale
or other transfer of any Accounts subject to the Securitization Facility to the
Borrower, all in form and substance satisfactory to the Agent.

 

(g)                                 The Agent shall have received:

 

(i)                                     acknowledgment copies of proper financing
statements, duly filed on or before the Closing Date under the UCC of all
jurisdictions that the Agent may deem necessary or desirable in order to
perfect the Agent’s Liens; and

 

(ii)                                  duly executed UCC-3 Termination Statements
and such other instruments, in form and substance satisfactory to the Agent, as
shall be necessary to terminate and satisfy all Liens on the property of the
Borrower and its Subsidiaries except Permitted Liens.

 

(h)                                 The Borrower shall have paid all fees and
expenses of the Agent and the Attorney Costs incurred in connection with any of
the Loan Documents and the transactions contemplated thereby to the extent
invoiced.

 

(i)                                     The Agent shall have received, in form,
scope, and substance, reasonably satisfactory to the Agent, evidence of all
insurance coverage as required by this Agreement.

 

(j)                                     The Agent and the Lenders shall have had an
opportunity, upon reasonable request if they so choose, to examine the books of
account and other records and files of the Borrower and its Subsidiaries and to
make copies thereof, and to conduct a pre-closing audit which shall include,
without limitation, verification of Accounts and the Borrowing Base, and the 

 

35

 

results of such examination
and audit shall have been satisfactory to the Agent and the Lenders in all
respects.

 

(k)                                  All proceedings taken in connection with the
execution of this Agreement, all other Loan Documents and all documents and
papers relating thereto shall be satisfactory in form, scope, and substance to
the Agent and the Lenders.

 

(l)                                     Without limiting the generality of the items
described above, the Borrower and each Person guarantying or securing payment
of the Obligations shall have delivered or caused to be delivered to the Agent
(in form and substance reasonably satisfactory to the Agent), the financial
statements, instruments, resolutions, documents, agreements, certificates,
opinions and other items set forth on the “Closing Checklist” delivered by the
Agent to the Borrower prior to the Closing Date.

 

The acceptance by the Borrower of any Loans made or Letters of Credit
issued on the Closing Date shall be deemed to be a representation and warranty
made by the Borrower to the effect that all of the conditions precedent to the
making of such Loans or the issuance of such Letters of Credit have been
satisfied, with the same effect as delivery to the Agent and the Lenders of a
certificate signed by a Responsible Officer of the Borrower, dated the Closing
Date, to such effect.

 

Execution and delivery to the Agent by a Lender of a counterpart of
this Agreement shall be deemed confirmation by such Lender that (i) all
conditions precedent in this Section 8.1 have been fulfilled to the
satisfaction of such Lender, (ii) the decision of such Lender to execute and
deliver to the Agent an executed counterpart of this Agreement was made by such
Lender independently and without reliance on the Agent or any other Lender as
to the satisfaction of any condition precedent set forth in this Section 8.1,
and (iii) all documents sent to such Lender for approval consent, or
satisfaction were acceptable to such Lender.

 

8.2                                 Conditions
Precedent to Each Loan.  The
obligation of the Lenders to make each Loan, including the initial Revolving
Loans on the Closing Date, and the obligation of the Agent to cause the Letter
of Credit Issuer to issue or permit the renewal (automatic or otherwise) of any
Letter of Credit shall be subject to the further conditions precedent that on
and as of the date of any such Borrowing:

 

(a)                                  The following statements shall be true, and
the acceptance by the Borrower of any extension of credit shall be deemed to be
a statement to the effect set forth in clauses (i), (ii) and (iii)
with the same effect as the delivery to the Agent and the Lenders of a
certificate signed by a Responsible Officer, dated the date of such Borrowing,
stating that:

 

(i)                                     The representations and warranties contained
in this Agreement and the other Loan Documents are correct in all material
respects on and as of the date of such extension of credit as though made on
and as of such date, other than any such representation or warranty which
relates to a specified prior date and except to the extent the Agent and the
Lenders have been notified in writing by the Borrower that any representation
or warranty is not correct and the Majority Lenders have explicitly waived in
writing compliance with such representation or warranty; and

 

36

 

(ii)                                  No event has occurred and is continuing, or
would result from such extension of credit, which constitutes a Default or an
Event of Default;

 

(iii)                               No event has occurred and is continuing, or would result from such
extension of credit, which has had or would have a Material Adverse Effect; and

 

(iv)                              After giving effect to such extension of credit, Availability is equal
to or exceeds an amount equal to two (2) weeks payroll expenses and payroll
taxes of the Borrower and its Subsidiaries.

 

(b)                                 No such Borrowing shall exceed Availability, provided,
however, that the foregoing conditions precedent are not conditions to
each Lender participating in or reimbursing the Bank or the Agent for such
Lenders’ Pro Rata Share of any Non-Ratable Loan or Agent Advance made in
accordance with the provisions of Sections 1.2(h) and (i).

 

(c)                                  If the Borrowing requested is the first
Borrowing to occur at the end of a Suspension Period, the Borrower will provide
to the Agent all financial statements required under Section 5.2 for the
most recently ended Fiscal Year or fiscal month, as applicable, to the extent
not delivered as a result of the existence of such Suspension Period.

 

ARTICLE 9

DEFAULT;
REMEDIES

 

9.1                                 Events of
Default.  It
shall constitute an event of default (“Event of Default”) if any one or more of
the following shall occur for any reason:

 

(a)                                  any failure by the Borrower to pay (i) the
principal of any of the Obligations when due, whether upon demand or otherwise,
and such failure shall continue for one (1) or more Business Days or (ii)
interest or premium on any of the Obligations or any fee or other amount owing
hereunder when due, whether upon demand or otherwise, and such failure shall
continue for three (3) or more Business Days;

 

(b)                                 any representation or warranty made or deemed
made by the Borrower in this Agreement or by the Borrower or any of its
Subsidiaries in any of the other Loan Documents, any Financial Statement, or
any certificate furnished by the Borrower or any of its Subsidiaries at any
time to the Agent or any Lender shall prove to be untrue in any material
respect as of the date on which made, deemed made, or furnished;

 

(c)                                  (i) 
any default shall occur in the observance or performance of any of the
covenants and agreements contained in Sections 7.2, 7.9 through 7.25,
or Section 11 of the Security Agreement, (ii) any default shall occur in the
observance or performance of any of the covenants and agreements contained in Sections
5.2, 5.3 or 7.5 and such default shall continue for five (5) Business Days
or more; or (iii) any default shall occur in the observance or performance of
any of the other covenants or agreements contained in any other Section of this
Agreement or any other Loan Document, or any other agreement entered into at
any time to which the Borrower or any Subsidiary and the Agent or any Lender
are party (including in respect of any Bank Products) and such default shall
continue for thirty (30) days or more;

 

37

 

(d)                                 any default shall occur with respect to any
Debt (other than the Obligations) of the Borrower or any of its Subsidiaries in
an outstanding principal amount which exceeds $5,000,000 (“Material Debt”), or
under any agreement or instrument under or pursuant to which any such Material
Debt may have been issued, created, assumed, or guaranteed by the Borrower or
any of its Subsidiaries, and such default shall continue for more than the
period of grace, if any, therein specified, if the effect thereof (with or
without the giving of notice or further lapse of time or both) is to
accelerate, or to permit the holders of any such Material Debt to accelerate,
the maturity of any such Material Debt; or any such Material Debt shall be
declared due and payable or be required to be prepaid (other than by a regularly
scheduled required prepayment) prior to the stated maturity thereof;

 

(e)                                  the Borrower or any of its Subsidiaries shall
(i) file a voluntary petition in bankruptcy or file a voluntary petition or an
answer or otherwise commence any action or proceeding seeking reorganization,
arrangement or readjustment of its debts or for any other relief under the
Bankruptcy Code or under any other bankruptcy or insolvency act or law, state
or federal, now or hereafter existing, or consent to, approve of, or acquiesce
in, any such petition, action or proceeding; (ii) apply for or acquiesce in the
appointment of a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for it or for all or any part of its
property; (iii) make an assignment for the benefit of creditors; or (iv) admits
it is or is judicially determined to be unable to or fails generally to pay its
debts as they become due;

 

(f)                                    an involuntary petition shall be filed or an
action or proceeding otherwise commenced seeking reorganization, arrangement,
consolidation or readjustment of the debts of the Borrower or any of its
Subsidiaries or for any other relief under the Bankruptcy Code or under any
other bankruptcy or insolvency act or law, state or federal, now or hereafter
existing and such petition or proceeding shall continue in effect and not be
dismissed or stayed for a period of sixty (60) consecutive days after the
filing or commencement thereof, or an order of relief shall be entered with
respect thereto under the Bankruptcy Code;

 

(g)                                 a receiver, assignee, liquidator,
sequestrator, custodian, monitor, trustee or similar officer for the Borrower
or any of its Subsidiaries or for all or any material part of its property
shall be appointed or a warrant of attachment, execution or similar process
shall be issued against any material part of the property of the Borrower or
any of its Subsidiaries;

 

(h)                                 the Borrower or any of its Subsidiaries shall
file a certificate of dissolution under applicable state law or shall be liquidated,
dissolved or wound-up or shall commence or have commenced against it any action
or proceeding for dissolution, winding-up or liquidation, or shall take any
corporate action in furtherance thereof;

 

(i)                                     all or any material part of the property of the
Borrower or any of its Subsidiaries shall be nationalized, expropriated or
condemned, seized or otherwise appropriated, or custody or control of such
property or of the Borrower or such Subsidiary shall be assumed by any
Governmental Authority or any court of competent jurisdiction at the instance
of any Governmental Authority, except where contested in good faith by proper
proceedings diligently pursued where a stay of enforcement is in effect;

 

(j)                                     any Loan Document shall be terminated,
revoked or declared void,  invalid or
unenforceable or challenged as to validity by the Borrower or any other Credit
Party;

 

38

 

(k)                                  one or more judgments, orders, decrees or
arbitration awards is entered against the Borrower involving in the aggregate
liability (to the extent not covered by independent third-party insurance as to
which the insurer does not dispute coverage) as to any single or related or
unrelated series of transactions, incidents or conditions, of $3,000,000 or
more, and the same shall remain unsatisfied, unvacated and unstayed pending
appeal for a period of thirty (30) days after the entry thereof;

 

(l)                                     any loss, theft, damage or destruction of any
item or items of Collateral or other property of the Borrower or any Subsidiary
occurs which would reasonably be expected to cause a Material Adverse Effect
and is not adequately covered by insurance;

 

(m)                               there is filed against the Borrower or any of
its Subsidiaries any action, suit or proceeding under any federal or state
racketeering statute (including the Racketeer Influenced and Corrupt
Organization Act of 1970), which action, suit or proceeding (i) is not
dismissed within one hundred twenty (120) days, and (ii) could reasonably be
expected to result in the confiscation or forfeiture of any material portion of
the Collateral;

 

(n)                                 for any reason other than the failure of the
Agent to take any action available to it to maintain perfection of the Agent’s
Liens, pursuant to the Loan Documents, any Loan Document ceases to be in full
force and effect or any Lien with respect to any material portion of the
Collateral intended to be secured thereby ceases to be, or is not, valid,
perfected and prior to all other Liens (other than Permitted Liens) or is
terminated, revoked or declared void;

 

(o)                                 an ERISA Event shall occur with respect to a
Pension Plan or Multi-employer Plan which has resulted or could reasonably be
expected to result in liability of the Borrower under Title IV of ERISA to the
Pension Plan, Multi-employer Plan or the PBGC in an aggregate amount in excess
of $3,000,000 ; (ii) the aggregate amount of Unfunded Pension Liability among
all Pension Plans at any time exceeds an amount that has, or could reasonably
be likely to have, a Material Adverse Effect; or (iii) the Borrower or any
ERISA Affiliate shall fail to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multi-employer Plan in an aggregate
amount in excess of $3,000,000; or

 

(p)                                 there occurs a Change of Control; or

 

(q)                                 any event not described in clauses (a)
through (p) above has occurred and is continuing which has had or would have a
Material Adverse Effect.

 

9.2                                 Remedies.

 

(a)                                  If a Default or an Event of Default exists,
the Agent may, in its discretion, and shall, at the direction of the Majority
Lenders, do one or more of the following at any time or times and in any order,
without notice to or demand on the Borrower: 
(i) reduce the Maximum Revolver Amount, or the advance rates against
Eligible Accounts used in computing the Borrowing Base, or reduce one or more
of the other elements used in computing the Borrowing Base; (ii) restrict the
amount of or refuse to make Revolving Loans; and (iii) restrict or refuse to
provide Letters of Credit.  If an Event
of Default exists, the Agent shall, at the direction of the Required Lenders,
do one or more of the following, in addition to the actions described in the
preceding sentence, at any time or times and in any order, without notice to or
demand on the Borrower:  (A) 

 

39

 

terminate the Commitments
and this Agreement; (B) declare any or all Obligations to be immediately due
and payable; provided, however, that upon the occurrence of any
Event of Default described in Sections 9.1(e), 9.1(f), 9.1(g),
or 9.1(h), the Commitments shall automatically and immediately expire
and all Obligations shall automatically become immediately due and payable
without notice or demand of any kind; (C) require the Borrower to cash
collateralize all outstanding Letter of Credit Obligations; and (D) pursue its
other rights and remedies under the Loan Documents and applicable law.

 

(b)                                 If an Event of Default has occurred and is
continuing:  (i) the Agent shall have
for the benefit of the Lenders, in addition to all other rights of the Agent
and the Lenders, the rights and remedies of a secured party under the Loan
Documents and the UCC; (ii) the Agent may, at any time, take possession of the
Collateral and keep it on the Borrower’s premises, at no cost to the Agent or
any Lender, or remove any part of it to such other place or places as the Agent
may desire, or the Borrower shall, upon the Agent’s demand, at the Borrower’s
cost, assemble the Collateral and make it available to the Agent at a place
reasonably convenient to the Agent; and (iii) the Agent may sell and deliver
any Collateral at public or private sales, for cash, upon credit or otherwise,
at such prices and upon such terms as the Agent deems reasonably advisable and
may, if the Agent deems it reasonable, postpone or adjourn any sale of the
Collateral by an announcement at the time and place of sale or of such
postponed or adjourned sale without giving a new notice of sale.  Without in any way requiring notice to be
given in the following manner, the Borrower agrees that any notice by the Agent
of sale, disposition or other intended action hereunder or in connection herewith,
whether required by the UCC or otherwise, shall constitute reasonable notice to
the Borrower if such notice is mailed by registered or certified mail, return
receipt requested, postage prepaid, or is delivered personally against receipt,
at least five (5) Business Days prior to such action to the Borrower’s address
specified in or pursuant to Section 13.8.  If any Collateral is sold on terms other than payment in full at
the time of sale, no credit shall be given against the Obligations until the
Agent or the Lenders receive payment, and if the buyer defaults in payment, the
Agent may resell the Collateral without further notice to the Borrower.  In the event the Agent seeks to take
possession of all or any portion of the Collateral by judicial process, the
Borrower irrevocably waives:  (A) the
posting of any bond, surety or security with respect thereto which might
otherwise be required; (B) any demand for possession prior to the commencement
of any suit or action to recover the Collateral; and (C) any requirement that
the Agent retain possession and not dispose of any Collateral until after trial
or final judgment.  The Borrower agrees
that the Agent has no obligation to preserve rights to the Collateral or
marshal any Collateral for the benefit of any Person.  The Agent is hereby granted a license or other right to use,
without charge, the Borrower’s labels, patents, copyrights, name, trade
secrets, trade names, trademarks, and advertising matter, or any similar
property, in completing production of, advertising or selling any Collateral, and
the Borrower’s rights under all licenses and all franchise agreements shall
inure to the Agent’s benefit for such purpose. 
The proceeds of sale shall be applied first to all expenses of sale,
including attorneys’ fees, and then to the Obligations.  The Agent will return any excess to the
Borrower and the Borrower shall remain liable for any deficiency.

 

(c)                                  If an Event of Default occurs, the Borrower
hereby waives all rights to notice and hearing prior to the exercise by the
Agent of the Agent’s rights to repossess the Collateral without judicial
process or to reply, attach or levy upon the Collateral without notice or
hearing.

 

40

 

ARTICLE 10

TERM
AND TERMINATION

 

10.1                           Term and
Termination.  The
term of this Agreement shall end on the Stated Termination Date unless sooner
terminated in accordance with the terms hereof.  The Agent upon direction from the Required Lenders may terminate
this Agreement without notice upon the occurrence of an Event of Default.  Upon the effective date of termination of
this Agreement for any reason whatsoever, all Obligations (including all unpaid
principal, accrued and unpaid interest and any early termination or prepayment
fees or penalties) shall become immediately due and payable and the Borrower
shall immediately arrange for the Letters of Credit then outstanding to be
Fully Supported.  Notwithstanding the
termination of this Agreement, until all Obligations are indefeasibly paid and
performed in full in cash, the Borrower shall remain bound by the terms of this
Agreement and shall not be relieved of any of its Obligations hereunder or
under any other Loan Document, and the Agent and the Lenders shall retain all
their rights and remedies hereunder (including the Agent’s Liens in and all
rights and remedies with respect to all then existing and after-arising
Collateral).

 

ARTICLE 11

AMENDMENTS;
WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS

 

11.1                           Amendments
and Waivers.

 

(a)                                  No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall
be in writing and signed by the Majority Lenders (or by the Agent at the
written request of the Majority Lenders) and the Borrower and then any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all the
Lenders and the Borrower and acknowledged by the Agent, do any of the
following:

 

(i)                                     increase or extend the Commitment of any
Lender;

 

(ii)                                  postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of principal, interest,
fees or other amounts due to the Lenders (or any of them) hereunder or under
any other Loan Document;

 

(iii)                               reduce the principal of, or the rate of interest specified herein on
any Loan, or any fees or other amounts payable hereunder or under any other
Loan Document;

 

(iv)                              change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which is required for the Lenders or any of them
to take any action hereunder;

 

(v)                                 increase any of the percentages set forth in
the definition of the Borrowing Base;

 

(vi)                              amend this Section or any provision of this Agreement providing for
consent or other action by all Lenders;

 

41

 

(vii)                           release any Guaranties of the Obligations or release Collateral other
than as permitted by Section 12.11;

 

(viii)                        change the definitions of “Majority Lenders” or “Required Lenders”; or

 

(ix)                                increase the Maximum Revolver Amount or Letter of Credit Subfacility;

 

provided, however, the Agent may, in its sole
discretion and notwithstanding the limitations contained in clauses (v)
and (ix) above and any other terms of this Agreement, make Agent
Advances in accordance with Section 1.2(i) and, provided  further,
that no amendment, waiver or consent shall, unless in writing and signed by the
Agent, affect the rights or duties of the Agent under this Agreement or any
other Loan Document and provided  further, that Schedule 1.1
hereto (Commitments) may be amended from time to time by Agent alone to reflect
assignments of Commitments in accordance herewith.

 

(b)                                 If, in connection with any proposed
amendment, waiver or consent (a “Proposed Change”):

 

(i)                                     requiring the consent of all Lenders, the
consent of Required Lenders is obtained, but the consent of other Lenders is
not obtained (any such Lender whose consent is not obtained as described in
this clause (i) and in clause (ii) below being referred to as a “Non-Consenting
Lender”), or

 

(ii)                                  requiring the consent of Required Lenders,
the consent of Majority Lenders is obtained,

 

then,
so long as the Agent is not a Non-Consenting Lender, at the Borrower’s request,
the Agent or an Eligible Assignee shall have the right (but not the obligation)
with the Agent’s approval, to purchase from the Non-Consenting Lenders, and the
Non-Consenting Lenders agree that they shall sell, all the Non-Consenting
Lenders’ Commitments for an amount equal to the principal balances thereof and
all accrued interest and fees with respect thereto through the date of sale
pursuant to Assignment and Acceptance Agreement(s), without premium or
discount.

 

11.2                           Assignments; Participations.

 

(a)                                  Any Lender may assign and delegate to one or
more Eligible Assignees (each an “Assignee”) all, or any ratable part of
all, of the Loans, the Commitments and the other rights and obligations of such
Lender hereunder, in a minimum amount of $1,000,000 (provided that, unless an
assignor Lender has assigned and delegated all of its Loans and Commitments, no
such assignment and/or delegation shall be permitted unless, after giving
effect thereto, such assignor Lender retains a Commitment in a minimum amount
of $5,000,000); provided, however, that the Borrower and the
Agent may continue to deal solely and directly with such Lender in connection
with the interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Borrower
and the Agent by such Lender and the Assignee; (ii) such Lender and its
Assignee shall have delivered to the Borrower and the Agent an Assignment and
Acceptance in the form of Exhibit F (“Assignment and Acceptance”)
together with any note or notes 

 

42

 

subject to such assignment and (iii) the assignor Lender or Assignee
has paid to the Agent a processing fee in the amount of $3,500.  The Borrower agrees to promptly execute and
deliver new promissory notes and replacement promissory notes as reasonably requested
by the Agent to evidence assignments of the Loans and Commitments in accordance
herewith; provided that execution and delivery thereof at such time as a
Responsible Officer of Borrower is otherwise available at a location outside of
the State of Florida shall be deemed sufficiently prompt, unless the Assignee
shall have tendered to Borrower such amount as shall be due in respect of any
taxes payable in respect of such notes deemed to be executed and delivered in
the State of Florida.

 

(b)                                 From and after the date that the Agent
notifies the assignor Lender that it has received an executed Assignment and
Acceptance and payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and obligations,
including, but not limited to, the obligation to participate in Letters of
Credit have been assigned to it pursuant to such Assignment and Acceptance,
shall have the rights and obligations of a Lender under the Loan Documents, and
(ii) the assignor Lender shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto).

 

(c)                                  By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows:  (i) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant hereto or
the attachment, perfection, or priority of any Lien granted by the Borrower to
the Agent or any Lender in the Collateral; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (iii) such Assignee confirms that it has
received a copy of this Agreement, together with such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such Assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such Assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers, including the discretionary rights and
incidental power, as are reasonably incidental thereto; and (vi) such Assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed
by it as a Lender.

 

(d)                                 Immediately upon satisfaction of the
requirements of Section 11.2(a), this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro  tanto.

 

43

 

(e)                                  Any Lender may at any time sell to one or
more commercial banks, financial institutions, or other Persons not Affiliates
of the Borrower (a “Participant”) participating interests in any Loans,
the Commitment of that Lender and the other interests of that Lender (the
“originating Lender”) hereunder and under the other Loan Documents; provided,
however, that (i) the originating Lender’s obligations under this
Agreement shall remain unchanged, (ii) the originating Lender shall remain
solely responsible for the performance of such obligations, (iii) the Borrower
and the Agent shall continue to deal solely and directly with the originating
Lender in connection with the originating Lender’s rights and obligations under
this Agreement and the other Loan Documents, and (iv) no Lender shall transfer
or grant any participating interest under which the Participant has rights to
approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document except the matters set forth in Section
11.1(a)(i), (ii) and (iii), and all amounts payable by the
Borrower hereunder shall be determined as if such Lender had not sold such
participation; [except that, if amounts outstanding under this Agreement are
due and unpaid, or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall be deemed to have the right of set-off
in respect of its participating interest in amounts owing under this Agreement
to the same extent and subject to the same limitation as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement].

 

(f)                                    Notwithstanding any other provision in this
Agreement, any Lender may at any time create a security interest in, or pledge,
all or any portion of its rights under and interest in this Agreement in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR §203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.

 

ARTICLE 12

THE
AGENT

 

12.1                           Appointment
and Authorization. 
Each Lender hereby designates and appoints Bank as its Agent under this
Agreement and the other Loan Documents and each Lender hereby irrevocably
authorizes the Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto.  The
Agent agrees to act as such on the express conditions contained in this Article
12.  The provisions of this Article
12 are solely for the benefit of the Agent and the Lenders and the Borrower
shall have no rights as a third party beneficiary of any of the provisions
contained herein.  Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any other
Loan Document, the Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall the Agent have or be deemed to have
any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the Agent.  Without limiting the generality of the
foregoing sentence, the use of the term “agent” in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any
applicable law.  Instead, such term is
used merely as a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting parties.  Except as expressly otherwise provided in
this Agreement, the Agent shall have and may use its sole discretion with
respect to exercising or refraining from exercising any discretionary rights or
taking or refraining from taking any actions which the Agent is expressly
entitled to take or assert under this Agreement and the other Loan Documents,
including (a) the determination of the applicability of

 

44

 

ineligibility criteria with respect to the calculation of the Borrowing
Base, (b) the making of Agent Advances pursuant to Section 1.2(i), and
(c) the exercise of remedies pursuant to Section 9.2, and any action so
taken or not taken shall be deemed consented to by the Lenders.

 

12.2                           Delegation of Duties.  The Agent may execute any of
its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.  The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.

 

12.3                           Liability of
Agent. 
None of the Agent-Related Persons shall (i) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct), or (ii) be
responsible in any manner to any of the Lenders for any recital, statement,
representation or warranty made by the Borrower or any Subsidiary or Affiliate
of the Borrower, or any officer thereof, contained in this Agreement or in any
other Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Borrower or any other party
to any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower or any of the Borrower’s Subsidiaries or Affiliates.

 

12.4                           Reliance by
Agent.  The
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Borrower), independent accountants and
other experts selected by the Agent. 
The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such
action.  The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of the
Majority Lenders (or all Lenders if so required by Section 11.1) and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all of the Lenders.

 

12.5                           Notice of
Default.  The
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default, unless the Agent shall have received written
notice from a Lender or the Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a “notice of
default.”  The Agent will notify the
Lenders of its receipt of any such notice. 
The Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Majority Lenders in accordance with Section
9; provided, however, that unless and until the Agent has
received any such request, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable.

 

45

 

12.6                           Credit Decision.  Each Lender acknowledges that
none of the Agent-Related Persons has made any representation or warranty to
it, and that no act by the Agent hereinafter taken, including any review of the
affairs of the Borrower and its Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender.  Each Lender represents to the Agent that it
has, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower
and its Affiliates, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower.  Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the
Borrower.  Except for notices, reports
and other documents expressly herein required to be furnished to the Lenders by
the Agent, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of the
Borrower which may come into the possession of any of the Agent-Related
Persons.

 

12.7                           Indemnification.  Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrower to
do so), in accordance with their Pro Rata Shares, from and against any and all
Indemnified Liabilities as such term is defined in Section 13.11; provided,
however, that no Lender shall be liable for the payment to the
Agent-Related Persons of any portion of such Indemnified Liabilities resulting
solely from such Person’s gross negligence or willful misconduct.  Without limitation of the foregoing, each
Lender shall reimburse the Agent upon demand for its Pro Rata Share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or responsibilities
under, this Agreement, any other Loan Document, or any document contemplated by
or referred to herein, to the extent that the Agent is not reimbursed for such
expenses by or on behalf of the Borrower. 
The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of the Agent.

 

12.8                           Agent
in Individual Capacity.  The
Bank and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Borrower and its Subsidiaries and Affiliates as though the
Bank were not the Agent hereunder and without notice to or consent of the
Lenders.  The Bank or its Affiliates may
receive information regarding the Borrower, its Affiliates and Account Debtors
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Subsidiary) and acknowledge that the Agent and
the Bank shall be under no obligation to provide such information to them.  With respect to its Loans, the Bank shall
have the same rights and powers under this Agreement as any other Lender and
may exercise the same as though it were not the Agent, and the terms “Lender”
and “Lenders” include the Bank in its individual capacity.

 

46

 

12.9                           Successor Agent.  The Agent may resign as Agent
upon at least 30 days’ prior notice to the Lenders and the Borrower, such
resignation to be effective upon the acceptance of a successor agent to its
appointment as Agent.  In the event the
Bank sells all of its Commitment and Revolving Loans as part of a sale, transfer
or other disposition by the Bank of substantially all of its loan portfolio,
the Bank shall resign as Agent and such purchaser or transferee shall become
the successor Agent hereunder.  Subject
to the foregoing, if the Agent resigns under this Agreement, the Majority
Lenders shall appoint from among the Lenders a successor agent for the
Lenders.  If no successor agent is
appointed prior to the effective date of the resignation of the Agent, the
Agent may appoint, after consulting with the Lenders and the Borrower, a
successor agent from among the Lenders. 
Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term “Agent” shall mean such successor agent and the
retiring Agent’s appointment, powers and duties as Agent shall be terminated.
After any retiring Agent’s resignation hereunder as Agent, the provisions of
this Article 12 shall continue to inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.

 

12.10                     Withholding Tax.

 

(a)                                  If any Lender is a “foreign corporation,
partnership or trust” within the meaning of the Code and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Lender agrees with and in favor of the Agent, to deliver
to the Agent and the Borrower:

 

(i)                                     if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States of America tax treaty,
properly completed IRS Forms W-8BEN and W-8ECI before the payment of any
interest in the first calendar year and before the payment of any interest in
each third succeeding calendar year during which interest may be paid under
this Agreement;

 

(ii)                                  if such Lender claims that interest paid
under this Agreement is exempt from United States of America withholding tax
because it is effectively connected with a United States of America trade or
business of such Lender, two properly completed and executed copies of IRS Form
W-8ECI before the payment of any interest is due in the first taxable year of
such Lender and in each succeeding taxable year of such Lender during which
interest may be paid under this Agreement, and IRS Form W-9; and

 

(iii)                               such other form or forms as may be required under the Code or other
laws of the United States of America as a condition to exemption from, or
reduction of, United States of America withholding tax.

 

Such
Lender agrees to promptly notify the Agent and the Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.

 

(b)                                 If any Lender claims exemption from, or
reduction of, withholding tax under a United States of America tax treaty by
providing IRS Form FW-8BEN and such Lender sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations owing
to such Lender, such Lender agrees to notify the Agent of the percentage amount
in which it is no

 

47

 

longer the beneficial owner of Obligations of the Borrower to such
Lender.  To the extent of such
percentage amount, the Agent will treat such Lender’s IRS Form W-8BEN as no
longer valid.

 

(c)                                  If any Lender claiming exemption from United
States of America withholding tax by filing IRS Form W-8ECI with the Agent
sells, assigns, grants a participation in, or otherwise transfers all or part
of the Obligations owing to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.

 

(d)                                 If any Lender is entitled to a reduction in
the applicable withholding tax, the Agent may withhold from any interest
payment to such Lender an amount equivalent to the applicable withholding tax
after taking into account such reduction. 
If the forms or other documentation required by subsection (a) of
this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.

 

(e)                                  If the IRS or any other Governmental
Authority of the United States of America or other jurisdiction asserts a claim
that the Agent did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not delivered, was not
properly executed, or because such Lender failed to notify the Agent of a
change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender shall
indemnify the Agent fully for all amounts paid, directly or indirectly, by the
Agent as tax or otherwise, including penalties and interest, and including any
taxes imposed by any jurisdiction on the amounts payable to the Agent under
this Section, together with all costs and expenses (including Attorney
Costs).  The obligation of the Lenders
under this subsection shall survive the payment of all Obligations and the
resignation or replacement of the Agent.

 

12.11                     Collateral
Matters.

 

(a)                                  The Lenders hereby irrevocably authorize the
Agent, at its option and in its sole discretion, to release any Agent’s Liens
upon any Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by Borrower of all Loans and reimbursement obligations in
respect of Letters of Credit, and the termination of all outstanding Letters of
Credit (whether or not any of such obligations are due) and all other
Obligations; (ii) constituting property being sold or disposed of if the
Borrower certifies to the Agent that the sale or disposition is made in
compliance with Section 7.9 (and the Agent may rely conclusively on any
such certificate, without further inquiry); (iii) constituting property in which
the Borrower owned no interest at the time the Lien was granted or at any time
thereafter; or (iv) constituting property leased to the Borrower under a lease
which has expired or been terminated in a transaction permitted under this
Agreement.  Except as provided above,
the Agent will not release any of the Agent’s Liens without the prior written
authorization of the Lenders; provided that the Agent may, in its
discretion, release the Agent’s Liens on Collateral valued in the aggregate not
in excess of $5,000,000 during each Fiscal Year without the prior written
authorization of the Lenders and the Agent may release the Agent’s Liens on
Collateral valued in the aggregate not in excess of $10,000,000 during each
Fiscal Year with the prior written authorization of Majority Lenders.  Upon request by the Agent or the Borrower at
any time, the Lenders will confirm in writing the Agent’s authority to release
any Agent’s Liens upon particular types or items of Collateral pursuant to this
Section 12.11.

 

48

 

(b)                                 Upon receipt by the Agent of any
authorization required pursuant to Section 12.11(a) from the Lenders of
the Agent’s authority to release Agent’s Liens upon particular types or items
of Collateral, and upon at least five (5) Business Days prior written request
by the Borrower, the Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the release
of the Agent’s Liens upon such Collateral; provided, however,
that (i) the Agent shall not be required to execute any such document on terms
which, in the Agent’s opinion, would expose the Agent to liability or create
any obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Borrower in respect of)
all interests retained by the Borrower, including the proceeds of any sale, all
of which shall continue to constitute part of the Collateral.

 

(c)                                  The Agent shall have no obligation whatsoever
to any of the Lenders to assure that the Collateral exists or is owned by the
Borrower or is cared for, protected or insured or has been encumbered, or that
the Agent’s Liens have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Agent pursuant to any of the
Loan Documents, it being understood and agreed that in respect of the Collateral,
or any act, omission or event related thereto, the Agent may act in any manner
it may deem appropriate, in its sole discretion given the Agent’s own interest
in the Collateral in its capacity as one of the Lenders and that the Agent
shall have no other duty or liability whatsoever to any Lender as to any of the
foregoing.

 

12.12                     Restrictions on Actions by Lenders; Sharing of Payments.

 

(a)                                  Each of the Lenders agrees that it shall not,
without the express consent of all Lenders, and that it shall, to the extent it
is lawfully entitled to do so, upon the request of all Lenders, set off against
the Obligations, any amounts owing by such Lender to the Borrower or any
accounts of the Borrower now or hereafter maintained with such Lender.  Each of the Lenders further agrees that it
shall not, unless specifically requested to do so by the Agent, take or cause
to be taken any action to enforce its rights under this Agreement or against
the Borrower, including the commencement of any legal or equitable proceedings,
to foreclose any Lien on, or otherwise enforce any security interest in, any of
the Collateral.

 

(b)                                 If at any time or times any Lender shall
receive (i) by payment, foreclosure, setoff or otherwise, any proceeds of
Collateral or any payments with respect to the Obligations of the Borrower to
such Lender arising under, or relating to, this Agreement or the other Loan
Documents, except for any such proceeds or payments received by such Lender
from the Agent pursuant to the terms of this Agreement, or (ii) payments from
the Agent in excess of such Lender’s ratable portion of all such distributions
by the Agent, such Lender shall promptly (1) turn the same over to the Agent,
in kind, and with such endorsements as may be required to negotiate the same to
the Agent, or in same day funds, as applicable, for the account of all of the
Lenders and for application to the Obligations in accordance with the
applicable provisions of this Agreement, or (2) purchase, without recourse or
warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, those purchases of

 

49

 

participations shall be rescinded in whole or in part, as applicable,
and the applicable portion of the purchase price paid therefor shall be
returned to such purchasing party, but without interest except to the extent
that such purchasing party is required to pay interest in connection with the
recovery of the excess payment.

 

12.13                     Agency for
Perfection. 
Each Lender hereby appoints each other Lender as agent for the purpose
of perfecting the Lenders’ security interest in assets which, in accordance
with Article 9 of the UCC can be perfected only by possession.  Should any Lender (other than the Agent)
obtain possession of any such Collateral, such Lender shall notify the Agent
thereof, and, promptly upon the Agent’s request therefor shall deliver such
Collateral to the Agent or in accordance with the Agent’s instructions.

 

12.14                     Payments
by Agent to Lenders.  All
payments to be made by the Agent to the Lenders shall be made by bank wire
transfer or internal transfer of immediately available funds to each Lender
pursuant to wire transfer instructions delivered in writing to the Agent on or
prior to the Closing Date (or if such Lender is an Assignee, on the applicable
Assignment and Acceptance), or pursuant to such other wire transfer
instructions as each party may designate for itself by written notice to the
Agent.  Concurrently with each such
payment, the Agent shall identify whether such payment (or any portion thereof)
represents principal, premium or interest on the Revolving Loans
otherwise.  Unless the Agent receives
notice from the Borrower prior to the date on which any payment is due to the
Lenders that the Borrower will not make such payment in full as and when
required, the Agent may assume that the Borrower has made such payment in full
to the Agent on such date in immediately available funds and the Agent may (but
shall not be so required), in reliance upon such assumption, distribute to each
Lender on such due date an amount equal to the amount then due such
Lender.  If and to the extent the
Borrower has not made such payment in full to the Agent, each Lender shall
repay to the Agent on demand such amount distributed to such Lender, together
with interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Lender until the date repaid.

 

12.15                     Settlement.

 

(a)                                  (i)                                     Each Lender’s funded portion of the Revolving
Loans is intended by the Lenders to be equal at all times to such Lender’s Pro
Rata Share of the outstanding Revolving Loans. 
Notwithstanding such agreement, the Agent, the Bank, and the other
Lenders agree (which agreement shall not be for the benefit of or enforceable
by the Borrower) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among them as to the
Revolving Loans, the Non-Ratable Loans and the Agent Advances shall take place
on a periodic basis in accordance with the following provisions:

 

(ii)                                  The Agent shall request settlement
(“Settlement”) with the Lenders on at least a weekly basis, or on a more
frequent basis at Agent’s election, (A) on behalf of the Bank, with respect to
each outstanding Non-Ratable Loan, (B) for itself, with respect to each Agent
Advance, and (C) with respect to collections received, in each case, by
notifying the Lenders of such requested Settlement by telecopy, telephone or
other similar form of transmission, of such requested Settlement, no later than
12:00 noon (Atlanta, Georgia time) on the date of such requested Settlement
(the “Settlement Date”).  Each Lender
(other than the Bank, in the case of Non-Ratable Loans and the Agent in the
case of Agent Advances) shall

 

50

 

transfer the amount of such Lender’s Pro Rata
Share of the outstanding principal amount of the Non-Ratable Loans and Agent
Advances with respect to each Settlement to the Agent, to Agent’s account, not
later than 2:00 p.m. (Atlanta, Georgia time), on the Settlement Date applicable
thereto.  Settlements may occur during
the continuation of a Default or an Event of Default and whether or not the
applicable conditions precedent set forth in Article 8 have then been satisfied.  Such amounts made available to the Agent
shall be applied against the amounts of the applicable Non-Ratable Loan or
Agent Advance and, together with the portion of such Non-Ratable Loan or Agent
Advance representing the Bank’s Pro Rata Share thereof, shall constitute
Revolving Loans of such Lenders.  If any
such amount is not transferred to the Agent by any Lender on the Settlement
Date applicable thereto, the Agent shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the Federal Funds
Rate for the first three (3) days from and after the Settlement Date and
thereafter at the Interest Rate then applicable to the Revolving Loans (A) on
behalf of the Bank, with respect to each outstanding Non-Ratable Loan, and (B)
for itself, with respect to each Agent Advance.

 

(iii)                               Notwithstanding the foregoing, not more than one (1) Business Day after
demand is made by the Agent (whether before or after the occurrence of a
Default or an Event of Default and regardless of whether the Agent has
requested a Settlement with respect to a Non-Ratable Loan or Agent Advance),
each other Lender (A) shall irrevocably and unconditionally purchase and
receive from the Bank or the Agent, as applicable, without recourse or
warranty, an undivided interest and participation in such Non-Ratable Loan or
Agent Advance equal to such Lender’s Pro Rata Share of such Non-Ratable Loan or
Agent Advance and (B) if Settlement has not previously occurred with respect to
such Non-Ratable Loans or Agent Advances, upon demand by Bank or Agent, as
applicable, shall pay to Bank or Agent, as applicable, as the purchase price of
such participation an amount equal to one-hundred percent (100%) of such
Lender’s Pro Rata Share of such Non-Ratable Loans or Agent Advances.  If such amount is not in fact made available
to the Agent by any Lender, the Agent shall be entitled to recover such amount
on demand from such Lender together with interest thereon at the Federal Funds Rate
for the first three (3) days from and after such demand and thereafter at the
Interest Rate then applicable to Base Rate Loans.

 

(iv)                              From and after the date, if any, on which any Lender purchases an
undivided interest and participation in any Non-Ratable Loan or Agent Advance
pursuant to clause (iii) above, the Agent shall promptly distribute to
such Lender, such Lender’s Pro Rata Share of all payments of principal and
interest and all proceeds of Collateral received by the Agent in respect of
such Non-Ratable Loan or Agent Advance.

 

(v)                                 Between Settlement Dates, the Agent, to the
extent no Agent Advances are outstanding, may pay over to the Bank any payments
received by the Agent, which in accordance with the terms of this Agreement
would be applied to the reduction of the Revolving Loans, for application to
the Bank’s Revolving Loans including Non-Ratable Loans.  If, as of any Settlement Date, collections
received since the then immediately preceding Settlement Date have been applied
to the Bank’s Revolving Loans (other than to Non-Ratable Loans or Agent
Advances in

 

51

 

which such Lender has not yet funded its
purchase of a participation pursuant to clause (iii) above), as provided for in
the previous sentence, the Bank shall pay to the Agent for the accounts of the
Lenders, to be applied to the outstanding Revolving Loans of such Lenders, an
amount such that each Lender shall, upon receipt of such amount, have, as of
such Settlement Date, its Pro Rata Share of the Revolving Loans.  During the period between Settlement Dates,
the Bank with respect to Non-Ratable Loans, the Agent with respect to Agent
Advances, and each Lender with respect to the Revolving Loans other than
Non-Ratable Loans and Agent Advances, shall be entitled to interest at the
applicable rate or rates payable under this Agreement on the actual average
daily amount of funds employed by the Bank, the Agent and the other Lenders.

 

(vi)                              Unless the Agent has received written notice from a Lender to the
contrary, the Agent may assume that the applicable conditions precedent set
forth in Article 8 have been satisfied and the requested Borrowing will
not exceed Availability on any Funding Date for a Revolving Loan or Non-Ratable
Loan.

 

(b)                                 Lenders’ Failure to Perform.  All
Revolving Loans (other than Non-Ratable Loans and Agent Advances) shall be made
by the Lenders simultaneously and in accordance with their Pro Rata
Shares.  It is understood that (i) no
Lender shall be responsible for any failure by any other Lender to perform its
obligation to make any Revolving Loans hereunder, nor shall any Commitment of
any Lender be increased or decreased as a result of any failure by any other
Lender to perform its obligation to make any Revolving Loans hereunder, (ii) no
failure by any Lender to perform its obligation to make any Revolving Loans
hereunder shall excuse any other Lender from its obligation to make any
Revolving Loans hereunder, and (iii) the obligations of each Lender hereunder
shall be several, not joint and several.

 

(c)                                  Defaulting Lenders. 
Unless the Agent receives notice from a Lender on or prior to the
Closing Date or, with respect to any Borrowing after the Closing Date, at least
one Business Day prior to the date of such Borrowing, that such Lender will not
make available as and when required hereunder to the Agent that Lender’s Pro
Rata Share of a Borrowing, the Agent may assume that each Lender has made such
amount available to the Agent in immediately available funds on the Funding
Date.  Furthermore, the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount.  If any Lender has
not transferred its full Pro Rata Share to the Agent in immediately available
funds and the Agent has transferred corresponding amount to the Borrower on the
Business Day following such Funding Date that Lender shall make such amount
available to the Agent, together with interest at the Federal Funds Rate for
that day.  A notice by the Agent
submitted to any Lender with respect to amounts owing shall be conclusive,
absent manifest error.  If each Lender’s
full Pro Rata Share is transferred to the Agent as required, the amount
transferred to the Agent shall constitute that Lender’s Revolving Loan for all
purposes of this Agreement.  If that
amount is not transferred to the Agent on the Business Day following the
Funding Date, the Agent will notify the Borrower of such failure to fund and,
upon demand by the Agent, the Borrower shall pay such amount to the Agent for
the Agent’s account, together with interest thereon for each day elapsed since
the date of such Borrowing, at a rate per annum equal to the Interest Rate
applicable at the time to the Revolving Loans comprising that particular
Borrowing.  The failure of any Lender to
make any Revolving Loan on any Funding Date (any such Lender, prior to
the cure of such failure, being hereinafter referred to as a “Defaulting
Lender”) shall not relieve any other Lender of its obligation hereunder to make
a Revolving Loan on 

 

52

 

that Funding Date.  No Lender
shall be responsible for any other Lender’s failure to advance such other
Lenders’ Pro Rata Share of any Borrowing.

 

(d)                                 Retention of Defaulting Lender’s Payments.  The
Agent shall not be obligated to transfer to a Defaulting Lender any payments
made by Borrower to the Agent for the Defaulting Lender’s benefit; nor shall a
Defaulting Lender be entitled to the sharing of any payments hereunder.  Amounts payable to a Defaulting Lender shall
instead be paid to or retained by the Agent. 
In its discretion, the Agent may loan Borrower the amount of all such
payments received or retained by it for the account of such Defaulting
Lender.  Any amounts so loaned to the
Borrower shall bear interest at the rate applicable to Base Rate Loans and for
all other purposes of this Agreement shall be treated as if they were Revolving
Loans, provided, however, that for purposes of voting or consenting to matters
with respect to the Loan Documents and determining Pro Rata Shares, such
Defaulting Lender shall be deemed not to be a “Lender”.  Until a Defaulting Lender cures its failure
to fund its Pro Rata Share of any Borrowing (A) such Defaulting Lender shall
not be entitled to any portion of the Unused Line Fee and (B) the Unused Line
Fee shall accrue in favor of the Lenders which have funded their respective Pro
Rata Shares of such requested Borrowing and shall be allocated among such
performing Lenders ratably based upon their relative Commitments.  This Section shall remain effective with
respect to such Lender until such time as the Defaulting Lender shall no longer
be in default of any of its obligations under this Agreement.  The terms of this Section shall not be
construed to increase or otherwise affect the Commitment of any Lender, or
relieve or excuse the performance by the Borrower of its duties and obligations
hereunder.

 

12.16                     Letters
of Credit; Intra-Lender Issues.

 

(a)                                  Notice of Letter of Credit Balance.  On
each Settlement Date the Agent shall notify each Lender of the issuance of all
Letters of Credit since the prior Settlement Date.

 

(b)                                 Participations in Letters of Credit.

 

(i)                                     Purchase of Participations. 
Immediately upon issuance of any Letter of Credit in accordance with Section
1.4(d), each Lender shall be deemed to have irrevocably and unconditionally
purchased and received without recourse or warranty, an undivided interest and
participation equal to such Lender’s Pro Rata Share of the face amount of such
Letter of Credit (including all obligations of the Borrower with respect
thereto, and any security therefor or guaranty pertaining thereto).

 

(ii)                                  Sharing of Reimbursement Obligation Payments. 
Whenever the Agent receives a payment from the Borrower on account of
reimbursement obligations in respect of a Letter of Credit as to which the
Agent has previously received for the account of the Letter of Credit Issuer
thereof payment from a Lender, the Agent shall promptly pay to such Lender such
Lender’s Pro Rata Share of such payment from the Borrower.  Each such payment shall be made by the Agent
on the next Settlement Date.

 

(iii)                               Documentation. 
Upon the request of any Lender, the Agent shall furnish to such Lender
copies of any Letter of Credit, reimbursement agreements executed in connection
therewith, applications for any Letter of Credit, and such other documentation
as may reasonably be requested by such Lender.

 

53

 

(iv)                              Obligations Irrevocable.  The
obligations of each Lender to make payments to the Agent with respect to any
Letter of Credit or with respect to their participation therein or with respect
to the Revolving Loans made as a result of a drawing under a Letter of Credit
and the obligations of the Borrower for whose account the Letter of Credit was
issued to make payments to the Agent, for the account of the Lenders, shall be
irrevocable and shall not be subject to any qualification or exception
whatsoever, including any of the following circumstances:

 

(1)                                  any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;

 

(2)                                  the existence of any claim, setoff, defense
or other right which the Borrower may have at any time against a beneficiary
named in a Letter of Credit or any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), any Lender, the Agent, the
issuer of such Letter of Credit, or any other Person, whether in connection
with this Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transactions between
the Borrower or any other Person and the beneficiary named in any Letter of
Credit);

 

(3)                                  any draft, certificate or any other document
presented under the Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;

 

(4)                                  the surrender or impairment of any security
for the performance or observance of any of the terms of any of the Loan
Documents;

 

(5)                                  the occurrence of any Default or Event of
Default; or

 

(6)                                  the failure of the Borrower to satisfy the
applicable conditions precedent set forth in Article 8.

 

(c)                                  Recovery or Avoidance of Payments; Refund of
Payments In Error.  In the event any payment by or on behalf of
the Borrower received by the Agent with respect to any Letter of Credit and
distributed by the Agent to the Lenders on account of their respective
participations therein is thereafter set aside, avoided or recovered from the
Agent in connection with any receivership, liquidation or bankruptcy
proceeding, the Lenders shall, upon demand by the Agent, pay to the Agent their
respective Pro Rata Shares of such amount set aside, avoided or recovered,
together with interest at the rate required to be paid by the Agent upon the
amount required to be repaid by it. 
Unless the Agent receives notice from the Borrower prior to the date on
which any payment is due to the Lenders that the Borrower will not make such
payment in full as and when required, the Agent may assume that the Borrower
has made such payment in full to the Agent on such date in immediately
available funds and the Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Lender on such due date an amount equal
to the amount then due such Lender. If and to the extent the Borrower has not
made such payment in full to the Agent, each Lender shall repay to the Agent on
demand such amount distributed to such Lender,

 

54

 

together with interest thereon at the Federal Funds Rate for each day
from the date such amount is distributed to such Lender until the date repaid.

 

(d)                                 Indemnification by Lenders.  To
the extent not reimbursed by the Borrower and without limiting the obligations
of the Borrower hereunder, the Lenders agree to indemnify the Letter of Credit
Issuer ratably in accordance with their respective Pro Rata Shares, for any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including attorneys’ fees) or disbursements of any kind
and nature whatsoever that may be imposed on, incurred by or asserted against
the Letter of Credit Issuer in any way relating to or arising out of any Letter
of Credit or the transactions contemplated thereby or any action taken or
omitted by the Letter of Credit Issuer under any Letter of Credit or any Loan
Document in connection therewith; provided that no Lender shall be
liable for any of the foregoing to the extent it arises from the gross
negligence or willful misconduct of the Person to be indemnified.  Without limitation of the foregoing, each
Lender agrees to reimburse the Letter of Credit Issuer promptly upon demand for
its Pro Rata Share of any costs or expenses payable by the Borrower to the
Letter of Credit Issuer, to the extent that the Letter of Credit Issuer is not
promptly reimbursed for such costs and expenses by the Borrower.  The agreement contained in this Section
shall survive payment in full of all other Obligations.

 

12.17                     Concerning the Collateral and the Related Loan Documents. 
Each Lender authorizes and directs the Agent to enter into the other
Loan Documents, for the ratable benefit and obligation of the Agent and the
Lenders.  Each Lender agrees that any action
taken by the Agent, or the Majority Lenders, as applicable, in accordance with
the terms of this Agreement or the other Loan Documents, and the exercise by
the Agent or the Majority Lenders, as applicable, of their respective powers
set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Lenders.  The Lenders acknowledge that the Revolving
Loans, Agent Advances, Non-Ratable Loans, Hedge Agreements, Bank Products and
all interest, fees and expenses hereunder constitute one Debt, secured pari
passu by all of the Collateral.

 

12.18                     Field Audit and Examination Reports; Disclaimer by Lenders.  By
signing this Agreement, each Lender:

 

(a)                                  is deemed to have requested that the Agent furnish
such Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a “Report” and collectively, “Reports”) prepared by or
on behalf of the Agent;

 

(b)                                 expressly agrees and acknowledges that
neither the Bank nor the Agent (i) makes any representation or warranty as to
the accuracy of any Report, or (ii) shall be liable for any information
contained in any Report;

 

(c)                                  expressly agrees and acknowledges that the
Reports are not comprehensive audits or examinations, that the Agent or the
Bank or other party performing any audit or examination will inspect only
specific information regarding the Borrower and will rely significantly upon
the Borrower’s books and records, as well as on representations of the
Borrower’s personnel;

 

(d)                                 agrees to keep all Reports confidential and
strictly for its internal use, and not to distribute except to its
participants, or use any Report in any other manner; and

 

55

 

(e)                                  without limiting the generality of any other
indemnification provision contained in this Agreement, agrees:  (i) to hold the Agent and any such other
Lender preparing a Report harmless from any action the indemnifying Lender may
take or conclusion the indemnifying Lender may reach or draw from any Report in
connection with any loans or other credit accommodations that the indemnifying
Lender has made or may make to the Borrower, or the indemnifying Lender’s
participation in, or the indemnifying Lender’s purchase of, a loan or loans of
the Borrower; and (ii) to pay and protect, and indemnify, defend and hold the
Agent and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses and other amounts
(including Attorney Costs) incurred by the Agent and any such other Lender
preparing a Report as the direct or indirect result of any third parties who
might obtain all or part of any Report through the indemnifying Lender.

 

12.19                     Relation
Among Lenders.  The
Lenders are not partners or co-venturers, and no Lender shall be liable for the
acts or omissions of, or (except as otherwise set forth herein in case of the
Agent) authorized to act for, any other Lender.

 

12.20                     Co-Agents.  None of the Lenders identified on the facing
page or signature pages of this Agreement as a “co-agent” or a “documentation
agent” shall have any right, power, obligation, liability, responsibility or
duty under this Agreement other than those applicable to all Lenders as such.  Without limiting the foregoing, none of the
Lenders so identified as a “co-agent” or a “documentation agent” shall have or
be deemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not relied,
and will not rely, on any of the Lenders so identified in deciding to enter
into this Agreement or in taking or not taking action hereunder.

 

ARTICLE 13

MISCELLANEOUS

 

13.1                           No
Waivers; Cumulative Remedies.  No
failure by the Agent or any Lender to exercise any right, remedy, or option
under this Agreement or any present or future supplement thereto, or in any
other agreement between or among the Borrower and the Agent and/or any Lender,
or delay by the Agent or any Lender in exercising the same, will operate as a
waiver thereof.  No waiver by the Agent
or any Lender will be effective unless it is in writing, and then only to the
extent specifically stated.  No waiver
by the Agent or the Lenders on any occasion shall affect or diminish the
Agent’s and each Lender’s rights thereafter to require strict performance by
the Borrower of any provision of this Agreement.  The Agent and the Lenders may proceed directly to collect the
Obligations without any prior recourse to the Collateral.  The Agent’s and each Lender’s rights under
this Agreement will be cumulative and not exclusive of any other right or
remedy which the Agent or any Lender may have.

 

13.2                           Severability.  The illegality or
unenforceability of any provision of this Agreement or any Loan Document or any
instrument or agreement required hereunder shall not in any way affect or
impair the legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.

 

13.3                           Governing Law; Choice of Forum; Service of Process.

 

(a)                                  THIS AGREEMENT SHALL BE INTERPRETED AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK; PROVIDED THAT THE

 

56

 

AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL
LAW.

 

(b)                                 ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER,
THE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH OF THE BORROWER, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF
THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. 
NOTWITHSTANDING THE FOREGOING: 
(1) THE AGENT AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION
OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO
REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS AND (2) EACH OF
THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN
THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE THOSE JURISDICTIONS.

 

(c)                                  THE BORROWER HEREBY WAIVES PERSONAL SERVICE
OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS
MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE
BORROWER AT ITS ADDRESS SET FORTH IN SECTION 13.8 AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO
DEPOSITED IN THE U.S. MAILS POSTAGE PREPAID. 
NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT OR THE LENDERS
TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.

 

57

 

13.4                           WAIVER OF
JURY TRIAL.  THE
BORROWER, THE LENDERS AND THE AGENT EACH IRREVOCABLY WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. 
THE BORROWER, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM
OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.  WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY
OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR
THEREOF.  THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.

 

13.5                           Survival of Representations and Warranties.  All of the Borrower’s
representations and warranties contained in this Agreement shall survive the
execution, delivery, and acceptance thereof by the parties, notwithstanding any
investigation by the Agent or the Lenders or their respective agents.

 

13.6                           Other
Security and Guaranties.  The
Agent, may, without notice or demand and without affecting the Borrower’s
obligations hereunder, from time to time: 
(a) take from any Person and hold collateral (other than the Collateral)
for the payment of all or any part of the Obligations and exchange, enforce or
release such collateral or any part thereof; and (b) accept and hold any
endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or
any part of the Obligations, or any other Person in any way obligated to pay
all or any part of the Obligations.

 

13.7                           Fees and
Expenses.  The
Borrower agrees to pay to the Agent, for its benefit, on demand, all costs and
expenses that Agent pays or incurs in connection with the negotiation,
preparation, syndication, consummation, administration, enforcement, and termination
of this Agreement or any of the other Loan Documents, including: (a) Attorney
Costs; (b) costs and expenses (including attorneys’ and paralegals’ fees and
disbursements) for any amendment, supplement, waiver, consent, or subsequent
closing in connection with the Loan Documents and the transactions contemplated
thereby; (c) costs and expenses of lien and title searches and title insurance;
(d) taxes, fees and other charges for recording the Mortgages, filing financing
statements and continuations, and other actions to perfect, protect, and
continue the Agent’s Liens (including costs and expenses paid or incurred by
the Agent in connection with the consummation of Agreement); (e) sums paid or
incurred to pay any amount or take any action required of the Borrower under
the Loan Documents that the Borrower fails to pay or take; (f) costs of
appraisals, inspections, and verifications of the Collateral, including travel,
lodging, and meals for inspections of the Collateral and the Borrower’s
operations by the Agent plus the Agent’s then customary charge for field
examinations and audits and the preparation of reports thereof (such charge is
currently $850 per day (or portion thereof) for each Person retained or
employed by the Agent with respect to each

 

58

 

field examination or audit); and (g) costs and expenses of forwarding
loan proceeds, collecting checks and other items of payment, and establishing
and maintaining Payment Accounts and lock boxes, and costs and expenses of
preserving and protecting the Collateral. 
In addition, the Borrower agrees to pay costs and expenses incurred by
the Agent (including Attorneys’ Costs) to the Agent, for its benefit, on
demand, and to the other Lenders for their benefit, on demand, and all
reasonable fees, expenses and disbursements incurred by such other Lenders for
one law firm retained by such other Lenders, in each case, paid or incurred to
obtain payment of the Obligations, enforce the Agent’s Liens, sell or otherwise
realize upon the Collateral, and otherwise enforce the provisions of the Loan
Documents, or to defend any claims made or threatened against the Agent or any
Lender arising out of the transactions contemplated hereby (including
preparations for and consultations concerning any such matters).  The foregoing shall not be construed to
limit any other provisions of the Loan Documents regarding costs and expenses
to be paid by the Borrower.  All of the
foregoing costs and expenses shall be charged to the Borrower’s Loan Account as
Revolving Loans as described in Section 3.7.

 

13.8                           Notices.  Except as otherwise provided herein, all
notices, demands and requests that any party is required or elects to give to
any other shall be in writing, or by a telecommunications device capable of
creating a written record, and any such notice shall become effective (a) upon
personal delivery thereof, including, but not limited to, delivery by overnight
mail and courier service, (b) four (4) days after it shall have been mailed by
United States mail, first class, certified or registered, with postage prepaid,
or (c) in the case of notice by such a telecommunications device, when properly
transmitted, in each case addressed to the party to be notified as follows:

 

If to the Agent or to the Bank:

 

Bank of America, N.A.

GA1-006-05-14

600 Peachtree Street, 5th Floor

Atlanta, Georgia  30308

Attention: Business Credit-Account Executive

Telephone: (404) 607-5302

Telecopy:   (404) 607-6439

 

with copies to:

 

If to the Borrower:

 

Spherion Corporation

2050 Spectrum Blvd.

Ft. Lauderdale, FL 
33309

Attention: Bruce T. Petersen

Telephone: (954) 308-6120

Telecopy:  
(954) 308-6085

 

with a copy to:

 

Spherion Corporation

2050 Spectrum Blvd.

Ft. Lauderdale, FL 
33309

Attention: Heather M. McFall

Telephone: (954) 308-6174

Telecopy:  
(954) 308-6012

 

59

 

 

 

or
to such other address as each party may designate for itself by like
notice.  Failure or delay in delivering
copies of any notice, demand, request, consent, approval, declaration or other
communication to the persons designated above to receive copies shall not
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication. 
With respect to any notice to the Borrower made by any telecommunication
device, the Agent shall use its reasonable best efforts to obtain telephonic
confirmation of receipt of such notice by the Borrower but the failure to
obtain such confirmation shall not impair the effectiveness of a notice
otherwise delivered in accordance with the terms of this Section 13.8.

 

13.9                           Waiver of
Notices.  The
Borrower waives presentment, and notice of demand or dishonor and protest as to
any instrument, notice of intent to accelerate the Obligations and notice of
acceleration of the Obligations, as well as any and all other notices to which
it might otherwise be entitled, except, in each case, to the extent expressly
provided for in the Loan Documents.  No
notice to or demand on the Borrower which the Agent or any Lender may elect to
give shall entitle the Borrower to any or further notice or demand in the same,
similar or other circumstances.

 

13.10                     Binding Effect.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the respective
representatives, successors, and assigns of the parties hereto; provided,
however, that no interest herein may be assigned by the Borrower without
prior written consent of the Agent and each Lender, or assigned by any Lender
without prior written consent of the Agent in accordance with Section 11.2.  Each Lender agrees to give prompt notice of
any such assignment to the Agent and the Borrower.  The rights and benefits of the Agent and the Lenders hereunder
shall, if such Persons so agree, inure to any party acquiring any interest in
the Obligations or any part thereof.

 

13.11                     Indemnity of the Agent and the Lenders by the Borrower.

 

(a)                                  The Borrower agrees to defend, indemnify and
hold the Agent-Related Persons, and each Lender and each of its respective
officers, directors, employees, counsel, representatives, agents and
attorneys-in-fact (each, an “Indemnified Person”) harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements
(including Attorney Costs) of any kind or nature whatsoever which may at any
time (including at any time following repayment of the Loans and the
termination, resignation or replacement of the Agent or replacement of any
Lender)  be imposed on, incurred by or
asserted against any such Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including any Insolvency
Proceeding or appellate proceeding) related to or arising out of this
Agreement, any other Loan Document, or the Loans or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the “Indemnified Liabilities”); provided,
that the Borrower shall have no obligation hereunder to any Indemnified Person
with respect to Indemnified Liabilities to the extent, as to any Indemnified
Person, it shall be determined in a final, nonappealable judgment by a court of
competent jurisdiction that such losses, claims, damages, liabilities or

 

60

 

expenses resulted from the gross negligence or willful misconduct of
such Indemnified Person. The agreements in this Section shall survive payment
of all other Obligations.

 

(b)                                 The Borrower agrees to indemnify, defend and
hold harmless the Agent and the Lenders from any loss or liability directly or
indirectly arising out of the use, generation, manufacture, production,
storage, release, threatened release, discharge, disposal or presence of a
hazardous substance relating to the Borrower’s operations, business or
property.  This indemnity will apply
whether the hazardous substance is on, under or about the Borrower’s property
or operations or property leased to the Borrower.  The indemnity includes but is not limited to Attorneys
Costs.  The indemnity extends to the
Agent and the Lenders, their parents, affiliates, subsidiaries and all of their
directors, officers, employees, agents, successors, attorneys and assigns.  “Hazardous substances” means any substance,
material or waste that is or becomes designated or regulated as “toxic,”
“hazardous,” “pollutant,” or “contaminant” or a similar designation or
regulation under any federal, state or local law (whether under common law,
statute, regulation or otherwise) or judicial or administrative interpretation
of such, including petroleum or natural gas. 
This indemnity will survive repayment of all other Obligations.

 

13.12                     Limitation
of Liability.  NO
CLAIM MAY BE MADE BY THE BORROWER, ANY LENDER OR OTHER PERSON AGAINST THE
AGENT, ANY LENDER, OR THE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL,
REPRESENTATIVES, AGENTS OR ATTORNEYS-IN-FACT OF ANY OF THEM FOR ANY SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH
OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, AND THE BORROWER AND
EACH LENDER HEREBY WAIVE, RELEASE AND AGREE NOT TO SUE UPON ANY CLAIM FOR SUCH
DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST
IN ITS FAVOR.

 

13.13                     Final
Agreement. 
This Agreement and the other Loan Documents are intended by the
Borrower, the Agent and the Lenders to be the final, complete, and exclusive
expression of the agreement between them. 
This Agreement supersedes any and all prior oral or written agreements
relating to the subject matter hereof except for the Fee Letter.  No modification, rescission, waiver,
release, or amendment of any provision of this Agreement or any other Loan
Document shall be made, except by a written agreement signed by the Borrower
and a duly authorized officer of each of the Agent and the requisite Lenders.

 

13.14                     Counterparts.  This Agreement may be
executed in any number of counterparts, and by the Agent, each Lender and the
Borrower in separate counterparts, each of which shall be an original, but all
of which shall together constitute one and the same agreement; signature pages
may be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.

 

13.15                     Captions.  The captions contained in this Agreement are
for convenience of reference only, are without substantive meaning and should
not be construed to modify, enlarge, or restrict any provision.

 

61

 

13.16                     Right of Setoff.  In addition to any rights and
remedies of the Lenders provided by law, if an Event of Default exists or the
Loans have been accelerated, each Lender is authorized at any time and from
time to time, without prior notice to the Borrower, any such notice being
waived by the Borrower to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held by, and other indebtedness at any time owing by, such
Lender or any Affiliate of such Lender to or for the credit or the account of
the Borrower against any and all Obligations owing to such Lender, now or
hereafter existing, irrespective of whether or not the Agent or such Lender
shall have made demand under this Agreement or any Loan Document and although
such Obligations may be contingent or unmatured.  Each Lender agrees promptly to notify the Borrower and the Agent
after any such set-off and application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. 
NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT OF
SET-OFF, BANKER’S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF
THE BORROWER HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN
UNANIMOUS CONSENT OF THE LENDERS.

 

13.17                     Confidentiality.

 

(a)                                  The Borrower hereby consents that the Agent
and each Lender may issue and disseminate to the public general information
describing the credit accommodation entered into pursuant to this Agreement,
including the name and address of the Borrower and any other Subsidiary and a
general description of the Borrower’s and its Subsidiaries’ business and may
use the Borrower’s and any Subsidiary’s name in advertising and other
promotional material.

 

(b)                                 Each Lender and the Agent severally agrees to
take normal and reasonable precautions and exercise due care to maintain the
confidentiality of all non-public information provided to the Agent or such
Lender by or on behalf of the Borrower or an Affiliate thereof, under this
Agreement or any other Loan Document, except to the extent that such
information (i) was or becomes generally available to the public other than as
a result of disclosure by the Agent or such Lender, or (ii) was or becomes
available on a nonconfidential basis from a source other than the Borrower or
an Affiliate thereof, provided that such source is not bound by a
confidentiality agreement with the Borrower or an Affiliate thereof known to
the Agent or such Lender; provided, however, that the Agent and
any Lender may disclose such information (1) at the request or pursuant to any
requirement of any Governmental Authority to which the Agent or such Lender is
subject or in connection with an examination of the Agent or such Lender by any
such Governmental Authority; (2) pursuant to subpoena or other court process;
(3) when required to do so in accordance with the provisions of any applicable
Requirement of Law; (4) to the extent reasonably required in connection with
any litigation or proceeding (including, but not limited to, any bankruptcy
proceeding) to which the Agent, any Lender or their respective Affiliates may
be party; (5) to the extent reasonably required in connection with the exercise
of any remedy hereunder or under any other Loan Document; (6) to the Agent’s or
such Lender’s independent auditors, accountants, attorneys and other
professional advisors; (7) to any prospective Participant or Assignee under any
Assignment and Acceptance, actual or potential, provided that such prospective
Participant or Assignee agrees to keep such information confidential to the
same extent required of the Agent and the Lenders hereunder;  (8) as expressly permitted under the terms
of any other document or agreement regarding confidentiality to which the
Borrower is party or is deemed party with the Agent or such Lender, and (9) to
its Affiliates.

 

62

 

Notwithstanding
anything herein to the contrary, the information subject to this Section
13.17(b) shall not include, and the Agent and each Lender may disclose without
limitation of any kind, any information with respect to the “tax treatment” and
“tax structure” (in each case, within the meaning of Treasury Regulation
Section 1.6011-4) of the transactions contemplated hereby and all materials of
any kind (including opinions or other tax analyses) that are provided to the
Agent or such Lender relating to such tax treatment and tax structure; provided
that with respect to any document or similar item that in either case contains
information concerning the tax treatment or tax structure of the transactions
as well as other information, this sentence shall only apply to such portions
of the document or similar item that relate to the tax treatment or tax
structure of the Loans, Letters of Credit and transactions contemplated hereby.

 

13.18                     Conflicts with Other Loan Documents. 
Unless otherwise expressly provided in this Agreement (or in another
Loan Document by specific reference to the applicable provision contained in
this Agreement), if any provision contained in this Agreement conflicts with
any provision of any other Loan Document, the provision contained in this
Agreement shall govern and control.

 

63

 

IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  SPHERION
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter Houchin

  
	
   

  	
  Name:

  	
  Peter
  Houchin

  
	
   

  	
  Title:

  	
  Vice
  President, Corporate Finance & Treasury

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADMINISTRATIVE AGENT AND

  
	
   

  	
  COLLATERAL AGENT:

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A., as the Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mark Herdman

  
	
   

  	
  Name:

  	
  Mark
  Herdman

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mark Herdman

  
	
   

  	
  Name:

  	
  Mark
  Herdman

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

64

 

ANNEX A

to

Credit Agreement

 

Definitions

 

Capitalized terms used in the Loan Documents shall have the following
respective meanings (unless otherwise defined therein), and all section
references in the following definitions shall refer to sections of the
Agreement:

 

“Accounts” means all of the Credit Parties’ now owned or
hereafter acquired or arising accounts, as defined in the UCC, including any
rights to payment for the sale or lease of goods or rendition of services,
whether or not they have been earned by performance.

 

“Account Debtor” means each Person obligated in any way on or in
connection with an Account.

 

“ACH Transactions” means any cash management or related services
including the automatic clearing house transfer of funds by the Bank for the
account of the Borrower pursuant to agreement or overdrafts.

 

“Adjusted Net Earnings from Operations” means, with respect to
any fiscal period of the Borrower, the Borrower’s net income after provision
for income taxes for such fiscal period, as determined in accordance with GAAP
and reported on the Financial Statements for such period, excluding any and all
of the following included in such net income: 
(a) gain or loss arising from the sale of any capital assets; (b) gain
arising from any write-up in the book value of any asset; (c) earnings of any
Person, substantially all the assets of which have been acquired by the
Borrower or its Subsidiaries in any manner, to the extent realized by such other
Person prior to the date of acquisition; (d) earnings of any Person in which
the Borrower or any of its Subsidiaries has an ownership interest unless (and
only to the extent) such earnings shall actually have been received by the
Borrower or any Subsidiary in the form of cash distributions; (e) earnings of
any Person to which assets of the Borrower or any Subsidiary shall have been
sold, transferred or disposed of, or into which the Borrower or any Subsidiary
shall have been merged, or which has been a party with the Borrower or any
Subsidiary to any consolidation or other form of reorganization, prior to the
date of such transaction; (f) gain or loss arising from the acquisition of debt
or equity securities of the Borrower or any Subsidiary or from cancellation or
forgiveness of Debt; and (g) gain or non-cash loss arising (y) from
extraordinary items, as determined in accordance with GAAP.

 

“Affected Payee” has the meaning given to such term in Section
3.9.

 

“Affiliate” means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person or which owns, directly or indirectly, ten percent
(10%) or more of the outstanding equity interest of such Person. A Person shall
be deemed to control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of
voting securities, by contract, or otherwise.

 

“Agent” means the Bank, solely in its capacity as agent for the
Lenders, and any successor agent.

 

 

“Agent Advances” has the meaning specified in Section 1.2(i).

 

“Agent’s Liens” means the Liens in the Collateral granted to the
Agent, for the benefit of the Lenders, Bank, and Agent pursuant to this
Agreement and the other Loan Documents.

 

“Agent-Related Persons” means the Agent, together with its
Affiliates, and the officers, directors, employees, counsel, representatives,
agents and attorneys-in-fact of the Agent and such Affiliates.

 

“Aggregate Revolver Outstandings” means, at any date of
determination:  the sum of (a) the
unpaid balance of Revolving Loans, (b) the aggregate amount of Pending
Revolving Loans, (c) one hundred percent (100%) of the aggregate undrawn face
amount of all outstanding Letters of Credit, and (d) the aggregate amount of
any unpaid reimbursement obligations in respect of Letters of Credit.

 

“Agreement” means the Credit Agreement to which this Annex A
is attached, as from time to time amended, modified or restated.

 

“Applicable Margin” means

 

(i)                                     with respect to Base Rate Loans and all other
Obligations (other than LIBOR Loans), .250%; and

 

(ii)                                  with respect to LIBOR Loans, 2.00%.

 

The Applicable Margins shall be adjusted (up or down) prospectively on
a quarterly basis as determined by the Average Daily Availability for the
fiscal quarter most recently ended, commencing with the first day of the first
calendar month that occurs more than 5 days after delivery of the Borrower’s
quarterly Financial Statements to Lenders for the fiscal quarter ending
December 26, 2003 (the “Initial Adjustment Date”).  Adjustments in Applicable Margins shall be determined by
reference to the following grids:

 

 

	
  If Average Daily

  Availability is:

  	
   

  	
  Level of

  Applicable Margins:

  
	
  >
  Greater than $175,000,000

  	
   

  	
  Level
  I

  
	
  Greater
  than $125,000,000 but less than or equal to $175,000,000

  	
   

  	
  Level
  II

  
	
  Greater
  than $75,000,000 but less than or equal to $125,000,000

  	
   

  	
  Level
  III

  
	
  Greater
  than $25,000,000 but less than or equal to $75,000,000

  	
   

  	
  Level
  IV

  
	
  Less
  than or equal to $25,000,000

  	
   

  	
  Level
  V

  

 

Low to High

 

	
   

  	
   

  	
  Applicable
  Margins

  	
   

  
	
   

  	
   

  	
  Level I

  	
   

  	
  Level II

  	
   

  	
  Level III

  	
   

  	
  Level IV

  	
   

  	
  Level V

  	
   

  
	
  Base
  Rate Loans

  	
   

  	
  .000

  	
  %

  	
  .250

  	
  %

  	
  .250

  	
  %

  	
  .250

  	
  %

  	
  .500

  	
  %

  
	
  LIBOR
  Loans

  	
   

  	
  1.50

  	
  %

  	
  1.75

  	
  %

  	
  2.00

  	
  %

  	
  2.25

  	
  %

  	
  2.50

  	
  %

  

 

All adjustments in the Applicable Margins after the Initial Adjustment
Date shall be implemented quarterly on a prospective basis, for each calendar
month commencing at least 5 days after the date of delivery to the Lenders of
quarterly unaudited or annual audited (as applicable) Financial Statements
evidencing the need for an adjustment. 
Concurrently with the delivery of those Financial Statements, the
Borrower shall deliver to the Agent and the Lenders a certificate, signed by a
Responsible Officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins. Failure to timely
deliver such Financial Statements shall, in addition to any other remedy
provided for in this Agreement, result in an increase in the Applicable Margins
to the highest level set forth in the foregoing grid, until the first day of
the first calendar month following the delivery of those Financial Statements
demonstrating that such an increase is not required.  If a Default or Event of Default has occurred and is continuing
at the time any reduction in the Applicable Margins is to be implemented, no
reduction may occur until the first day of the first calendar month following
the date on which such Default or Event of Default is waived or cured.

 

“Assignee” has the meaning specified in Section 11.2(a).

 

“Assignment and Acceptance” has the meaning specified in Section
11.2(a).

 

“Attorney Costs” means and includes all reasonable fees,
expenses and disbursements of any law firm or other counsel engaged by the
Agent, the reasonably allocated costs and expenses of internal legal services
of the Agent.

 

 

“Availability” means, at any time (a) the lesser of (i) the
Maximum Revolver Amount or (ii) the Borrowing Base, minus (b) Reserves
other than Reserves deducted in the calculation of the Borrowing Base, minus
(c) in each case, the Aggregate Revolver Outstandings.

 

“Average Daily Availability” means average daily Availability
for the most recently ended fiscal quarter.

 

“Bank” means Bank of America, N.A., a national banking
association, or any successor entity thereto.

 

“Bank Products” means any one or more of the following types of
services or facilities extended to the Borrower by a Lender or any affiliate of
a Lender in reliance on the Lender’s agreement to indemnify such
affiliate:  (i) credit cards; (ii) ACH
Transactions; (iii) cash management, including controlled disbursement
services; and (iv) Hedge Agreements.

 

“Bank Product Reserves” means all reserves for the Bank Products
then provided or outstanding from time to time established by the Agent in its
reasonable credit judgment exercised in good faith and consistent with accepted
practices of the asset based lending industry.

 

“Bankruptcy Code” means Title 11 of the United States Code (11
U.S.C. § 101 et  seq.), as amended.

 

“Base Rate” means, for any day, the rate of interest in effect
for such day as publicly announced from time to time by the Bank in Charlotte,
North Carolina as its “prime rate” (the “prime rate” being a rate set by the
Bank based upon various factors including the Bank’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate).  Any change in the prime rate
announced by the Bank shall take effect at the opening of business on the day
specified in the public announcement of such change.  Each Interest Rate based upon the Base Rate shall be adjusted
simultaneously with any change in the Base Rate.

 

“Base Rate Loans” means a Revolving Loan during any period in
which it bears interest based on the Base Rate.

 

“Blocked Account Agreement” means an agreement among each Credit
Party, the Agent and a Clearing Bank, in form and substance reasonably
satisfactory to the Agent, concerning the collection of payments which
represent the proceeds of Accounts or of any other Collateral.

 

“Borrowing” means a borrowing hereunder consisting of Revolving
Loans made on the same day by the Lenders to the Borrower or by Bank in the
case of a Borrowing funded by Non-Ratable Loans or by the Agent in the case of
a Borrowing consisting of an Agent Advance, or the issuance of Letters of
Credit hereunder.

 

“Borrowing Base” means, at any time, an amount equal to the sum
of eighty-five percent (85%) of the Net Amount of Eligible Accounts minus
Reserves from time to time established by the Agent in its reasonable credit
judgment exercised in good faith and consistent with accepted practices of the
asset based lending industry.

 

“Borrowing Base Certificate” means a certificate by a
Responsible Officer of the Borrower, substantially in the form of Exhibit B
(or another form acceptable to the Agent) setting

 

 

forth the calculation of the Borrowing Base, including a calculation of
each component thereof, all in such detail as shall be reasonably satisfactory
to the Agent.  All calculations of the
Borrowing Base in connection with the preparation of any Borrowing Base Certificate
shall originally be made by the Borrower and certified to the Agent; provided,
that the Agent shall have the right to review and adjust, in the exercise of
its reasonable credit judgment, any such calculation (1) to reflect its
reasonable estimate of declines in value of any of the Collateral described
therein, and (2) to the extent that such calculation is not in accordance with
this Agreement.

 

“Business Day” means (a) any day that is not a Saturday, Sunday,
or a day on which banks in New York, New York, Atlanta, Georgia, Charlotte, North
Carolina or Miami, Florida are required or permitted to be closed, and (b) with
respect to all notices, determinations, fundings and payments in connection
with the LIBOR Rate or LIBOR Loans, any day that is a Business Day pursuant to clause
(a) above and that is also a day on which trading in Dollars is carried on
by and between banks in the London interbank market.

 

“Capital Adequacy Regulation” means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a
bank.

 

“Capital Expenditures” means all payments due (whether or not
paid during any fiscal period) in respect of the cost of any fixed asset or
improvement, or replacement, substitution, or addition thereto, which has a
useful life of more than one year, including, without limitation, those costs
arising in connection with the direct or indirect acquisition of such asset by
way of increased product or service charges or in connection with a Capital
Lease.

 

“Capital Lease” means any lease of property by any Credit Party
which, in accordance with GAAP, should be reflected as a capital lease on the
balance sheet of such Credit Party.

 

“Change of Control” means an event or series
of events by which:

 

(a)                                  any “person” or “group” (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such person or its subsidiaries, and any
person or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have “beneficial ownership” of all
securities that such person or group has the right to acquire (such right, an “option
right”), whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 25% or more of the equity securities of
the Borrower entitled to vote for members of the board of directors or
equivalent governing body of the Borrower on a fully-diluted basis (and taking
into account all such securities that such person or group has the right to
acquire pursuant to any option right); or

 

(b)                                 during any period of 12 consecutive months, a
majority of the members of the board of directors or other equivalent governing
body of the Borrower cease to be composed of individuals (i) who were members
of that board or equivalent governing body on the first day of such period,
(ii) whose election or nomination to that board or equivalent governing

 

 

body was approved by individuals referred to
in clause (i) above constituting at the time of such election or nomination at
least a majority of that board or equivalent governing body or (iii) whose
election or nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above constituting
at the time of such election or nomination at least a majority of that board or
equivalent governing body (excluding, in the case of both clause (ii) and
clause (iii), any individual whose initial nomination for, or assumption of
office as, a member of that board or equivalent governing body occurs as a
result of an actual or threatened solicitation of proxies or consents for the
election or removal of one or more directors by any person or group other than
a solicitation for the election of one or more directors by or on behalf of the
board of directors).

 

“Clearing Bank” means the Bank or any other banking institution
with whom a Payment Account has been established pursuant to a Blocked Account
Agreement.

 

“Closing Date” means the date of this Agreement.

 

“Closing Fee” has the meaning specified in Section 2.4.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means all of each Credit Party’s Accounts and other
assets of any Credit Party from time to time subject to Agent’s Liens securing
payment or performance of the Obligations pursuant to the Security Instruments.

 

“Commitment” means, at any time with respect to a Lender, the
principal amount set forth beside such Lender’s name under the heading “Commitment”
on Schedule 1.1 attached to the Agreement or on the signature page of
the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 11.2, as such
Commitment may be adjusted from time to time in accordance with the provisions
of Section 11.2, and “Commitments” means, collectively, the
aggregate amount of the commitments of all of the Lenders.

 

“Contaminant” means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated
biphenyls (“PCBs”), or any constituent of any such substance or waste.

 

“Continuation/Conversion Date” means the date on which a Loan is
converted into or continued as a LIBOR Loan.

 

“Credit Party” means the Borrower and any Guarantor.

 

 “Debt” means, without
duplication, all liabilities, obligations and indebtedness of the Borrower to
any Person, of any kind or nature, now or hereafter owing, arising, due or
payable, howsoever evidenced, created, incurred, acquired or owing, whether
primary, secondary, direct, contingent, fixed or otherwise, consisting of
indebtedness for borrowed money or the deferred purchase price of property, excluding
trade payables, but including (a) all Obligations; (b) all obligations and
liabilities of any Person secured by any Lien on the Borrower’s property, even
though the Borrower shall not have assumed or become liable for the payment
thereof; provided, however,

 

 

that all such obligations and liabilities which are limited in recourse
to such property shall be included in Debt only to the extent of the book value
of such property as would be shown on a balance sheet of the Borrower prepared
in accordance with GAAP; (c) all obligations or liabilities created or arising
under any Capital Lease or conditional sale or other title retention agreement
with respect to property used or acquired by the Borrower, even if the rights
and remedies of the lessor, seller or lender thereunder are limited to
repossession of such property; provided, however, that all such
obligations and liabilities which are limited in recourse to such property
shall be included in Debt only to the extent of the book value of such property
as would be shown on a balance sheet of the Borrower prepared in accordance
with GAAP; (d) all obligations and liabilities under Guaranties and (e) the
present value (discounted at the Base Rate) of lease payments due under
synthetic leases.

 

“Default” means any event or circumstance which, with the giving
of notice, the lapse of time, or both, would constitute an Event of Default.

 

“Default Rate” means a fluctuating per annum interest rate at
all times equal to the sum of (a) the otherwise applicable Interest Rate plus
(b) two percent (2%) per annum.  Each
Default Rate shall be adjusted simultaneously with any change in the applicable
Interest Rate.  In addition, the Default
Rate shall result in an increase in the Letter of Credit Fee by two percent
(2%) per annum.

 

“Defaulting Lender” has the meaning specified in Section
12.15(c).

 

“Designated Account” has the meaning specified in Section
1.2(c).

 

“Distribution” means, in respect of any corporation:  (a) the payment or making of any dividend or
other distribution of property in respect of capital stock (or any options or
warrants for, or other rights with respect to, such stock) of such corporation,
other than distributions in capital stock (or any options or warrants for such
stock) of the same class; or (b) the redemption or other acquisition by such
corporation of any capital stock (or any options or warrants for such stock) of
such corporation.

 

“Documents” means all documents as such term is defined in the
UCC, including bills of lading, warehouse receipts or other documents of title,
now owned or hereafter acquired by any Credit Party.

 

“DOL” means the United States Department of Labor or any
successor department or agency.

 

“Dollar” and “$” means dollars in the lawful currency of
the United States.  Unless otherwise
specified, all payments under the Agreements shall be made in Dollars.

 

“EBITDA” means, with respect to any fiscal period of the
Borrower, Adjusted Net Earnings from Operations, plus, to the extent
deducted in the determination of Adjusted Net Earnings from Operations for that
fiscal period, Interest Expense, Federal, state, local and foreign income
taxes, depreciation and amortization.

 

“Eligible Accounts” means the Accounts which the Agent in the
exercise of its reasonable commercial discretion determines to be Eligible
Accounts.  Without limiting the

 

 

discretion of the Agent to establish other criteria of ineligibility,
Eligible Accounts shall not, unless the Agent in its sole discretion elects,
include any Account:

 

(a)                                  with respect to which more than 90 days have
elapsed since the date of the original invoice therefor or which is more than
60 days past due;

 

(b)                                 with respect to which any of the
representations, warranties, covenants, and agreements contained in the
Security Agreement are incorrect or have been breached;

 

(c)                                  with respect to which Account (or any other
Account due from such Account Debtor), in whole or in part, a check, promissory
note, draft, trade acceptance or other instrument for the payment of money has
been received, presented for payment and returned uncollected for any reason;

 

(d)                                 which represents a progress billing (as
hereinafter defined) or as to which the Borrower has extended the time for
payment without the consent of the Agent; for the purposes hereof, “progress
billing” means any invoice for goods sold or leased or services rendered under
a contract or agreement pursuant to which the Account Debtor’s obligation to
pay such invoice is conditioned upon the Borrower’s completion of any further
performance under the contract or agreement;

 

(e)                                  with respect to which any one or more of the
following events has occurred to the Account Debtor on such Account:  death or judicial declaration of
incompetency of an Account Debtor who is an individual; the filing by or
against the Account Debtor of a request or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as a bankrupt,
winding-up, or other relief under the bankruptcy, insolvency, or similar laws
of the United States, any state or territory thereof, or any foreign
jurisdiction, now or hereafter in effect; the making of any general assignment
by the Account Debtor for the benefit of creditors; the appointment of a
receiver or trustee for the Account Debtor or for any of the assets of the
Account Debtor, including, without limitation, the appointment of or taking
possession by a “custodian,” as defined in the Federal Bankruptcy Code; the
institution by or against the Account Debtor of any other type of insolvency
proceeding (under the bankruptcy laws of the United States or otherwise) or of
any formal or informal proceeding for the dissolution or liquidation of,
settlement of claims against, or winding up of affairs of, the Account Debtor;
the sale, assignment, or transfer of all or any material part of the assets of
the Account Debtor; the nonpayment generally by the Account Debtor of its debts
as they become due; or the cessation of the business of the Account Debtor as a
going concern;

 

(f)                                    owed by an Account Debtor with respect to
which fifty percent (50%) or more of the aggregate Dollar amount of outstanding
Accounts owed at such time by such Account Debtor is classified as ineligible
under clause (a) above;

 

(g)                                 owed by an Account Debtor which: (i) does not
maintain its chief executive office in the United States of America or Canada
(other than the Province of Newfoundland); or (ii) is not organized under the
laws of the United States of America or Canada or any state or province
thereof; or (iii) is the government of any foreign country or sovereign state,
or of any state, province, municipality, or other political subdivision
thereof, or of any department, agency, public corporation, or other
instrumentality thereof; except to the extent that such Account is secured or
payable by a letter of credit satisfactory to the Agent in its discretion;

 

 

(h)                           owed by an Account Debtor which is an
Affiliate or employee of the Borrower;

 

(i)                               except as provided in clause (k)
below, with respect to which either the perfection, enforceability, or validity
of the Agent’s Liens in such Account, or the Agent’s right or ability to obtain
direct payment to the Agent of the proceeds of such Account, is governed by any
federal, state, or local statutory requirements other than those of the UCC;

 

(j)                               owed by an Account Debtor to which the
Borrower or any of its Subsidiaries, is indebted in any way, or which is
subject to any right of setoff or recoupment by the Account Debtor, unless the
Account Debtor has entered into an agreement acceptable to the Agent to waive
setoff rights; or if the Account Debtor thereon has disputed liability or made
any claim with respect to any other Account due from such Account Debtor; but
in each such case only to the extent of such indebtedness, setoff, recoupment,
dispute, or claim;

 

(k)                            owed by the federal government of the United
States of America, or any department, agency, public corporation, or other
instrumentality thereof, unless the Federal Assignment of Claims Act of 1940,
as amended (31 U.S.C. § 3727 et  seq.), and any other steps
necessary to perfect the Agent’s Liens therein, have been complied with to the
Agent’s satisfaction with respect to such Account;

 

(l)                               which is evidenced by a promissory note or
other instrument or by chattel paper;

 

(m)                         if the Agent believes, in the exercise of its
reasonable judgment, that the prospect of collection of such Account is
impaired or that the Account may not be paid by reason of the Account Debtor’s
financial inability to pay;

 

(n)                           with respect to which the Account Debtor is
located in any state requiring the filing of a Notice of Business Activities
Report or similar report in order to permit the Borrower to seek judicial
enforcement in such State of payment of such Account, unless such Borrower has
qualified to do business in such state or has filed a Notice of Business
Activities Report or equivalent report for the then current year;

 

(o)                           which arises out of a sale not made in the
ordinary course of the Borrower’s or any other Credit Party’s business;

 

(p)                           with respect to which the services giving
rise to such Account have not been performed by the Borrower or the other
applicable Credit Party, and, if applicable, accepted by the Account Debtor, or
the Account Debtor revokes its acceptance of such services;

 

(q)                           owed by an Account Debtor which is obligated
to the Borrower or other Credit Party respecting Accounts the aggregate unpaid
balance of which exceeds twenty-five percent (25%) of the aggregate unpaid
balance of all Accounts at such time, but only to the extent of such excess;

 

(r)                              which is not subject to a first priority and
perfected security interest in favor of the Agent for the benefit of the
Lenders.

 

 

If any Account at any time ceases to be an Eligible Account, then such
Account shall promptly be excluded from the calculation of Eligible Accounts.

 

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a
Lender; and (c) any other commercial financial institution having total assets
in excess of $1,000,000,000 approved by the Agent (such approval not to be
unreasonably withheld or delayed).

 

“Environmental Laws” means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, licenses, authorizations and permits
of, and agreements with, any Governmental Authority, in each case relating to
environmental, health, safety and land use matters.

 

“Environmental Lien” means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages
arising from, or costs incurred by such Governmental Authority in response to,
a Release or threatened Release of a Contaminant into the environment.

 

“Equipment” means all of the Credit Parties’ now owned and
hereafter acquired machinery, equipment, furniture, furnishings, fixtures, and
other tangible personal property (except Inventory), including embedded
software, motor vehicles with respect to which a certificate of title has been
issued, aircraft, dies, tools, jigs, molds and office equipment, as well as all
of such types of property leased by the Borrower or such Guarantor and all of
the Borrower’s and such Guarantor’s rights and interests with respect thereto
under such leases (including, without limitation, options to purchase); together
with all present and future additions and accessions thereto, replacements
therefor, component and auxiliary parts and supplies used or to be used in
connection therewith, and all substitutes for any of the foregoing, and all
manuals, drawings, instructions, warranties and rights with respect thereto;
wherever any of the foregoing is located.

 

“ERISA” means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.

 

“ERISA Affiliate” means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a
Pension Plan, (b) a withdrawal by the Borrower or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA, (c) a complete or partial withdrawal by the Borrower or any
ERISA Affiliate from a Multi-employer Plan or notification that a
Multi-employer Plan is in reorganization, (d) the filing of a notice of intent
to terminate, the treatment of a Plan amendment as a termination under Section
4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multi-employer Plan, (e) the occurrence of an event
or condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any Pension Plan or Multi-employer Plan, or (f) the imposition
of any liability under Title IV of ERISA, other than for PBGC premiums due but
not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA
Affiliate.

 

 

“Event of Default” has the meaning specified in Section 9.1.

 

“Excess Pension Contribution” means any contribution to a
Pension Plan during any period in excess of the Pension Plan accruals during
such period.

 

“Existing Letters of Credit” means those certain letters of
credit outstanding on the date hereof issued for the account of the Borrower or
as United States Subsidiary and described in Schedule 1.2.

 

“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and regulations promulgated thereunder.

 

“Facility Guaranty” means each Guaranty Agreement between a
Guarantor and the Agent for the benefit of the Agent and the Lenders, delivered
as of the Closing Date or thereafter in accordance with the terms of this
Agreement, as the same may be amended, modified or supplemented.

 

“Federal Funds Rate” means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to the Bank on such day on such transactions as determined
by the Agent.

 

“Federal Reserve Board” means the Board of Governors of the
Federal Reserve System or any successor thereto.

 

“Fee Letter” has the meaning given to such term in Section
2.4.

 

“Financial Statements” means, according to the context in which
it is used, the financial statements referred to in Sections 5.2 and 6.6
or any other financial statements required to be given to the Lenders pursuant
to this Agreement.

 

“Fiscal Year” means the Borrower’s fiscal year for financial
accounting purposes.  The current Fiscal
Year of the Borrower will end on December 26, 2003.

 

“Fixed Charge Coverage Ratio” means, with respect to any fiscal
period of the Borrower, the ratio of (a) EBITDA minus Capital Expenditures paid
in cash during such period to (b) Fixed Charges.

 

“Fixed Charges” means, with respect to any fiscal period of the
Borrower and its Subsidiaries on a consolidated basis, without duplication,
Interest Expense, all scheduled principal payments and mandatory prepayments
(by acceleration or otherwise) of Debt, all Distributions, Excess Pension
Contributions during such period, and Federal, state, local and foreign income
taxes, excluding deferred taxes.

 

“Foreign Subsidiary” means any Subsidiary that is not organized
under a political subdivision of the United States of America.

 

 

“Fronting Fee” has the meaning given to such term in Section
2.6.

 

“Fully Supported” means, with respect to any outstanding Letter
of Credit, the Borrower shall have deposited with the Agent, for the ratable
benefit of the Letter of Credit Issuer and the Lenders, at the Agent’s
election, either (a) a standby letter of credit (a “Supporting Letter of
Credit”) in form and substance satisfactory to the Agent, issued by an issuer
satisfactory to the Agent in an amount equal to the greatest amount for which
such Letter of Credit may be drawn plus any fees and expenses associated with
such Letter of Credit (the “Letter of Credit Exposure”), under which Supporting
Letter of Credit the Agent shall be entitled to draw amounts necessary to
reimburse the Letter of Credit Issuer and the Lenders for payments to be made
by the Letter of Credit Issuer and the Lenders under such Letter of Credit and
any fees and expenses associated with such Letter of Credit or (b) cash in an
amount equal to the Letter of Credit Exposure to be held as cash collateral for
such Letter of Credit Exposure.

 

“Funding Date” means the date on which a Borrowing occurs.

 

“GAAP” means generally accepted accounting principles and
practices set forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to the
circumstances as of the Closing Date.

 

“Governmental Authority” means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.

 

“Guarantor” means each existing or hereafter acquired or created
Subsidiary of Borrower other than Immaterial Subsidiaries.

 

“Guaranty” means, with respect to any Person, all obligations of
such Person which in any manner directly or indirectly guarantee or assure, or
in effect guarantee or assure, the payment or performance of any indebtedness,
dividend or other obligations of any other Person (the “guaranteed
obligations”), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services.

 

“Hedge Agreement” means any and all transactions, agreements or
documents now existing or hereafter entered into, which provides for an
interest rate, credit, commodity or equity swap, cap, floor, collar, forward
foreign exchange transaction, currency swap, cross currency rate swap, currency
option, or any combination of, or option with respect to, these or similar
transactions, for the purpose of hedging the Borrower’s exposure to
fluctuations in interest or exchange rates, loan, credit exchange, security or
currency valuations or commodity prices.

 

 

“Immaterial Subsidiary” means (a) any Foreign Subsidiary, (b)
each of Spherion Receivables, Spherion Newco, Inc. and Norrell Healthcare of
New York, Inc. and each of its Subsidiaries (but only to the extent each such
entity under this clause (a) is dissolved or otherwise ceases to exist within
180 day of the Closing Date), and (c) any Subsidiary, other than a Foreign
Subsidiary that has assets (valued at the greater of book or market value), or
net income in any Fiscal Year, whichever is greater of less than $5,000,000; provided,
that the aggregate value of such assets or income, when added to the assets and
income of all other Immaterial Subsidiaries other than Foreign Subsidiaries
under this clause (c) is not in excess of $15,000,000 at any time.

 

“Interest Expense” means, for any fiscal period, the aggregate
amount of interest required to be paid or accrued by the Borrower and its
Subsidiaries during such period on all Debt of the Borrower and its
Subsidiaries during such period, whether such interest was or is required to be
reflected as an item of expense or capitalized, including payments consisting
of interest in respect of Capital Leases or synthetic leases), net of all
interest income they receive during such period.

 

“Interest Period” means, as to any LIBOR Loan, the period
commencing on the Funding Date of such Loan or on the Continuation/Conversion
Date on which the Loan is converted into or continued as a LIBOR Loan, and
ending on the date one, two, three or six months thereafter as selected by the
Borrower in its Notice of Borrowing, in the form attached hereto as Exhibit
D, or Notice of Continuation/Conversion, in the form attached hereto as Exhibit
E, provided that:

 

(a)                                  if any Interest Period would otherwise end on
a day that is not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;

 

(b)                                 any Interest Period pertaining to a LIBOR
Loan that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period; and

 

(c)                                  no Interest Period shall extend beyond the
Stated Termination Date.

 

“Interest Rate” means each or any of the interest rates,
including the Default Rate, set forth in Section 2.1.

 

“Inventory” means all of each Credit Party’s now owned and
hereafter acquired inventory, goods and merchandise, wherever located, to be
furnished under any contract of service or held for sale or lease, all returned
goods, raw materials, work-in-process, finished goods (including embedded
software), other materials and supplies of any kind, nature or description
which are used or consumed in each Credit Party’s business or used in
connection with the packing, shipping, advertising, selling or finishing of
such goods, merchandise, and all documents of title or other Documents
representing them.

 

“IRS” means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the Code.

 

“Latest Projections” means: 
(a) on the Closing Date and thereafter until the Agent receives new
projections pursuant to Section 5.2(d), the projections of the
Borrower’s consolidated

 

 

financial condition, results of operations, and cash flows, for the
Fiscal Years 2003 through 2007, and delivered to the Agent prior to the Closing
Date; and (b) thereafter, the projections most recently received by the Agent
pursuant to Section 5.2(d).

 

“Lender” and “Lenders” have the meanings specified in the
introductory paragraph hereof and shall include the Agent to the extent of any
Agent Advance outstanding and the Bank to the extent of any Non-Ratable Loan
outstanding; provided that no such Agent Advance or Non-Ratable Loan
shall be taken into account in determining any Lender’s Pro Rata Share.

 

“Letter of Credit” has the meaning specified in Section
1.4(a).

 

“Letter of Credit Fee” has the meaning specified in Section
2.6.

 

“Letter of Credit Issuer” means the Bank or any affiliate of the
Bank that issues any Letter of Credit pursuant to this Agreement.

 

“Letter of Credit Subfacility” means $100,000,000.

 

“LIBOR Interest Payment Date” means, with respect to a LIBOR
Loan, (a) the Termination Date, (b) the first day of each calendar month during
which such LIBOR Loan is outstanding and (c) the last day of each Interest
Period applicable to such LIBOR Loan.

 

“LIBOR Rate” means, for any Interest Period, with respect to
LIBOR Loans, the rate of interest per annum determined pursuant to the
following formula:

 

	
  LIBOR
  Rate

  	
  =

  	
   

  	
  Offshore
  Base Rate

  
	
  1.00
  - Eurodollar Reserve Percentage

  

 

Where,

 

“Offshore Base Rate” means the rate per annum
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period.  If
for any reason such rate is not available, the Offshore Base Rate shall be, for
any Interest Period, the rate per annum appearing on Reuters Screen LIBO Page
as the London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page,
the applicable rate shall be the arithmetic mean of all such rates.  If for any reason none of the foregoing
rates is available, the Offshore Base Rate shall be, for any Interest Period,
the rate per annum determined by Agent as the rate of interest at which dollar
deposits in the approximate amount of the LIBOR Loan comprising part of such
Borrowing would be offered by the Bank’s London Branch to major banks in the
offshore dollar market at their request at or about 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period.

 

 

“Eurodollar Reserve Percentage” means, for
any day during any Interest Period, the reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect on such day
applicable to member banks under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).  The Offshore Base Rate for
each outstanding LIBOR Loan shall be adjusted automatically as of the effective
date of any change in the Eurodollar Reserve Percentage.

 

“LIBOR Loans” means a Revolving Loan during any period in which
it bears interest based on the LIBOR Rate.

 

“Lien” means:  (a) any
interest in property securing an obligation owed to, or a claim by, a Person
other than the owner of the property, whether such interest is based on the
common law, statute, or contract, and including a security interest, charge,
claim, or lien arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, agreement, security agreement,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes; (b) to the extent not included under clause (a), any
reservation, exception, encroachment, easement, right-of-way, covenant,
condition, restriction, lease or other title exception or encumbrance affecting
property; and (c) any contingent or other agreement to provide any of the
foregoing.

 

“Loan Account” means the loan account of the Borrower, which
account shall be maintained by the Agent.

 

“Loan Documents” means this Agreement, the Security Instruments,
the Facility Guaranty, and any other agreements, instruments, and documents
heretofore, now or hereafter evidencing, securing, guaranteeing or otherwise
relating to the Obligations, the Collateral, or any other aspect of the
transactions contemplated by this Agreement.

 

“Loans” means, collectively, all loans and advances provided for
in Article 1.

 

“Majority Lenders” means at any time Lenders whose Pro Rata
Shares aggregate more than 50% of the aggregate of all Lenders’ Pro Rata
Shares.

 

“Margin Stock” means “margin stock” as such term is defined in
Regulation T, U or X of the Federal Reserve Board.

 

“Material Adverse Effect” means (a) a material adverse change
in, or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Credit Parties taken as
a whole, or the Collateral; (b) a material impairment of the ability of the
Borrower or any other Credit Party to perform under any Loan Document to which
it is a party; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against any Credit Party of any Loan Document
to which it is a party; provided, however, the impairment and adverse effects
referred to in clause (b) and (c) above shall be “Material Adverse Effects”
only to the extent they materially and adversely affect a material right or
interest of the Agent or the Lenders under the Loan Documents.

 

 

“Maximum Revolver Amount” means $200,000,000.

 

“Moody’s” means Moody’s Investors Service,
Inc.

 

“Multi-employer Plan” means a “multi-employer plan” as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding six (6) years contributed to by the Borrower
or any ERISA Affiliate.

 

“Net Amount of Eligible Accounts” means, at any time, the gross
amount of Eligible Accounts less sales, excise or similar taxes, and less
returns, discounts, claims, credits allowances, accrued rebates, offsets,
deductions, counterclaims, disputes and other defenses of any nature at any
time issued, owing, granted, outstanding, available or claimed.

 

“Net Proceeds” has the meaning specified in Section 3.5(a).

 

“Non-Ratable Loan” and “Non-Ratable Loans” have the
meanings specified in Section 1.2(h).

 

“Notice of Borrowing” has the meaning specified in Section
1.2(b).

 

“Notice of Continuation/Conversion” has the meaning specified in
Section 2.2(b).

 

“Obligations” means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrower to
the Agent and/or any Lender, arising under or pursuant to this Agreement or any
of the other Loan Documents, whether or not evidenced by any note, or other
instrument or document, whether arising from an extension of credit, opening of
a letter of credit, acceptance, loan, guaranty, indemnification or otherwise,
whether direct or indirect, absolute or contingent, due or to become due,
primary or secondary, as principal or guarantor, and including all principal,
interest, charges, expenses, fees, attorneys’ fees, filing fees and any other
sums chargeable to the Borrower hereunder or under any of the other Loan
Documents.  “Obligations” includes,
without limitation, (a) all debts, liabilities, and obligations now or
hereafter arising from or in connection with the Letters of Credit and (b) all
debts, liabilities and obligations now or hereafter arising from or in
connection with Bank Products.

 

“Other Taxes” means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any other Loan Documents.

 

“Participant” means any Person who shall have been granted the
right by any Lender to participate in the financing provided by such Lender
under this Agreement, and who shall have entered into a participation agreement
in form and substance satisfactory to such Lender.

 

“Payment Account” means each bank account established pursuant
to the Security Agreement, to which the proceeds of Accounts and other
Collateral are deposited or credited, and which is maintained in the name of
the Agent or the Borrower, as the Agent may determine, on terms acceptable to
the Agent.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.

 

 

“Pending Revolving Loans” means, at any time, the aggregate
principal amount of all Revolving Loans requested in any Notice of Borrowing
received by the Agent which have not yet been advanced.

 

“Pension Plan” means a pension plan (as defined in Section 3(2)
of ERISA) subject to Title IV of ERISA which the Borrower (or an ERISA
Affiliate) sponsors, maintains, or to which it makes, is making, or is
obligated to make contributions, or in the case of a Multi-employer Plan has
made contributions at any time during the immediately preceding five (5) plan
years.

 

“Permitted Acquisition” means any acquisition by any Credit
Party of all or substantially all of the assets or a line of business of a
Person or all or substantially all of the capital stock of a Person so long as
(a) no Default or Event of Default exists or would be caused thereby, (b)
EBITDA (after adjustments reasonably acceptable to the Agent for calculation as
if the assets or line of business acquired were operating on a stand alone basis)
attributable to such acquired assets or Person for the most recently ended
twelve (12) month period prior to such acquisition is greater than zero, (c)
after giving effect to such acquisition and payment of the purchase price
therefor, Availability (as reduced for any past due accounts payable) is equal
to or greater than $75,000,000, and (d) the Person so acquired shall be in
substantially the same line of business as the Borrower and its Subsidiaries;
provided, however, that no Accounts of such Person so acquired shall be
included in the Borrowing Base without the prior written consent of the Agent
and completion of an audit by the Agent.

 

“Permitted Affiliate Transactions” means (a) loans and advances
to franchisees and licensees in the ordinary course of business consistent with
past practices that are also Permitted Investments, (b) transactions between
the Borrower and any Subsidiary whose voting stock or other equity interest is
at least 75% owned, directly or indirectly, by the Borrower (a “Majority-Owned
Subsidiary”), and transactions between Majority-Owned Subsidiaries to the
extent otherwise permitted under this Agreement and (c) so long as no Event of
Default has occurred and is continuing, any other transactions with Affiliates
in the ordinary course of business consistent with past practices, and no less
favorable to the Borrower and its Subsidiaries than would be obtained in a
comparable arm’s-length transaction with a third party who is not an Affiliate.

 

“Permitted Distribution” means a Distribution made by the
Borrower or any of its Subsidiaries, provided that prior to and after giving
effect to such Distribution (a) no Default or Event of Default exists or would
be caused thereby and (b) Availability shall be greater than $75,000,000.

 

“Permitted Intercompany Advances” means loans, advances, capital
contributions, credits, adjustments, or payments made by or letters of credit
issued for the account of any Credit Party (a) to fund payments due in
connection with retained layers of coverage and other insurance arrangements in
the ordinary course of business or (b) to fund operating expenses or other
working capital needs in the ordinary course of business consistent with past
practices of any Credit Party to or on behalf of (i) any Credit Party or (ii)
any Immaterial Subsidiary to the extent the aggregate net outstanding amount of
such loans, advances, capital contributions, credits, adjustments, letters of
credit or payments made after the Closing Date under this clause (b)(ii) does
not increase by more than $20,000,000 in the aggregate and no Event of Default
exists before or immediately after such loans, advances, capital contributions,
credits, adjustments, or payments.

 

 

“Permitted Investment” means (a) Permitted Intercompany Advances,
(b) Permitted Affiliate Transactions, and (c) the acquisition, other than a
Permitted Acquisition, by the Borrower or any Subsidiary of any capital stock,
securities, or equity interest in, and any loan, advance, capital contribution,
or subscription to, any Person provided that prior to and after giving effect
to such acquisition, loan, advance, contribution or subscription, (i) no
Default or Event of Default exists or would be caused thereby and (ii)
Availability shall be greater than $75,000,000.

 

“Permitted Prepayment” means a prepayment or redemption of the
Subordinated Notes, provided that prior to and after giving effect to such
prepayment, (a) no Default or Event of Default exists or would be caused
thereby and (b) Availability shall be greater than $60,000,000.

 

“Permitted Liens” means:

 

(a)                                  Liens for taxes not delinquent or statutory
Liens for taxes in an amount not to exceed $5,000,000 provided that the payment
of such taxes which are due and payable is being contested in good faith and by
appropriate proceedings diligently pursued and as to which adequate financial
reserves have been established on Borrower’s books and records and a stay of
enforcement of any such Lien is in effect;

 

(b)                                 the Agent’s Liens;

 

(c)                                  Liens consisting of deposits made in the
ordinary course of business in connection with, or to secure payment of,
obligations under or insurance arrangements relating to worker’s compensation,
unemployment insurance, social security and other similar laws, or to secure
the performance of bids, tenders or contracts (other than for the repayment of
Debt) or to secure indemnity, performance or other similar bonds for the
performance of bids, tenders or contracts (other than for the repayment of
Debt) or to secure statutory obligations (other than liens arising under ERISA
or Environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds or retained layers in insurance policies
(including fronted, self-insured and deductible layers).;

 

(d)                                 Liens securing the rights claims or demands
of materialmen, mechanics, carriers, warehousemen, landlords, lessors of
property and equipment (other than under any Capital Leases) and other like
Persons, provided that if any such Lien arises from the nonpayment of
such claims or demand when due, such claims or demands do not exceed $5,000,000
provided that the payment of such claims or demands is being contested in good
faith and by appropriate proceedings diligently pursued and as to which
adequate financial reserves have been established on Borrower’s books and
records and a stay of enforcement of any such Lien is in effect;

 

(e)                                  Liens constituting encumbrances in the nature
of reservations, exceptions, encroachments, easements, rights of way, covenants
running with the land, and other similar title exceptions or encumbrances
affecting any Real Estate; provided that they do not in the aggregate
materially detract from the value of the Real Estate or materially interfere
with its use in the ordinary conduct of the Borrower’s business; and

 

(f)                                    Liens arising from judgments and attachments
in connection with court proceedings provided that the attachment or
enforcement of such Liens would not result in an Event of Default hereunder and
such Liens are being contested in good faith by appropriate proceedings,
adequate reserves have been set aside and no material property is subject to a
material risk of loss or

 

 

forfeiture and the claims in respect of such Liens are fully covered by
insurance (subject to ordinary and customary deductibles) and a stay of
execution pending appeal or proceeding for review is in effect.

 

“Person” means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, Governmental Authority, or any other entity.

 

“Plan” means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Borrower (or an ERISA Affiliate) sponsors or maintains
or to which the Borrower (or an ERISA Affiliate) makes, is making, or is
obligated to make contributions and includes any Pension Plan.

 

“Pledge Agreement” means the Pledge Agreement dated as of the
date hereof by the Borrower to the Agent in Form of Exhibit H hereto and
each other pledge or similar agreement delivered pursuant to the terms of the
Loan Documents, each as hereafter modified, amended or supplemented from time
to time.

 

“Proprietary Rights” means all of each Credit Party’s now owned
and hereafter arising or acquired: 
licenses, franchises, permits, patents, patent rights, copyrights, works
which are the subject matter of copyrights, trademarks, service marks, trade
names, trade styles, patent, trademark and service mark applications, and all
licenses and rights related to any of the foregoing, including those patents,
trademarks, service marks, trade names and copyrights set forth on Schedule
6.12 hereto, and all other rights under any of the foregoing, all
extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing, and all rights to sue for past,
present and future infringement of any of the foregoing.

 

“Pro Rata Share” means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender’s Commitment and the denominator of which is the sum of the amounts of
all of the Lenders’ Commitments, or if no Commitments are outstanding, a
fraction (expressed as a percentage), the numerator of which is the amount of
Obligations owed to such Lender and the denominator of which is the aggregate
amount of the Obligations owed to the Lenders, in each case giving effect to a
Lender’s participation in Non-Ratable Loans and Agent Advances.

 

“Rate Suspension Notice” has the meaning specified in Section
4.5.

 

“Real Estate” means all of any Credit Party’s now or hereafter
owned or leased estates in real property, including, without limitation, all
fees, leaseholds and future interests, together with all of such Credit Party’s
now or hereafter owned or leased interests in the improvements thereon, the
fixtures attached thereto and the easements appurtenant thereto.

 

“Release” means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.

 

“Reportable Event” means, any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.

 

 

“Required Lenders” means at any time Lenders whose Pro Rata
Shares aggregate more than 66 2/3  % of the aggregate of all Lenders’ Pro Rata
Shares.

 

“Requirement of Law” means, as to any Person, any law (statutory
or common), treaty, rule, order, regulation or determination of an arbitrator
or of a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property is
subject.

 

“Reserves” means reserves that limit the availability of credit
hereunder, consisting of reserves against Availability or Eligible Accounts
established by the Agent from time to time in its reasonable credit judgment
exercised in good faith and consistent with accepted practices of the asset
based lending industry.  Without
limiting the generality of the foregoing, the following reserves shall be
deemed to be a reasonable exercise of Agent’s credit judgment exercised in good
faith and consistent with accepted practices of the asset based lending
industry: (a) Bank Product Reserves, (b) a reserve for accrued, unpaid interest
on the Obligations, (c) reserves for rent at leased locations subject to
statutory or contractual landlord liens, (d) dilution and (e) warehousemen’s or
bailees’ charges.

 

“Responsible Officer” means the chief executive officer, the
president, the chief financial officer, the general counsel (other than with
respect to financial reporting matters), any vice president or any assistant
treasurer of the Borrower, or any other officer having substantially the same
authority and responsibility.

 

“Restricted Investment” means, as to any Credit Party, any
acquisition of property by such Credit Party in exchange for cash or other
property, whether in the form of an acquisition of stock, debt, or other
indebtedness or obligation, or the purchase or acquisition of any other
property, or a loan, advance, capital contribution, or subscription, except the
following:  (a) acquisitions of
Equipment to be used in the business of the Credit Parties so long as the
acquisition costs thereof constitute Capital Expenditures permitted hereunder;
(b) acquisitions of Inventory in the ordinary course of business of the Credit
Parties; (c) acquisitions of current assets acquired in the ordinary course of
business of the Credit Parties; (d) Permitted Investments; (e) Permitted
Acquisitions, (f) direct obligations of the United States of America, or any
agency thereof, or obligations guaranteed by the United States of America, provided
that such obligations mature within one year from the date of acquisition
thereof; (g) any certificate of deposit or bankers acceptance, maturing not
more than one year after such time, which is issued by either: (i) a commercial
banking institution that is a member of the Federal Reserve System and has a
combined capital and surplus and undivided profits of not less than
$500,000,000, or (ii) any Lender; (h) money market preferred stock of companies
listed on the S&P 500 and having a long-term debt rating of A- or better by
S&P or A3 or better by Moody’s, and short-term (one-year or less) debt instruments,
so long as the underlying obligor has a short-term debt rating of A-2 or better
by S&P or P-2 or better by Moody’s; (i) investments in money market funds
that invest primarily in items described in clauses (f), (g) and (h) above; (i)
participations in short-term loans to any corporation (other than the Borrower
or any Subsidiary) organized under the laws of the United States of America or
any state thereof and rated at least A-2 by S&P or P-2 by Moody’s, (j)
Hedge Agreements, (k) obligations of franchisees and licensees of the Credit
Parties created or acquired in the ordinary course of the Credit Parties’
business; and (l) Distributions.

 

“Revolving Loans” has the meaning specified in Section 1.2
and includes each Agent Advance and Non-Ratable Loan.

 

 

“S&P” means Standard & Poor’s Ratings Group, a division
of The McGraw-Hill Companies, Inc.

 

“SEC” means the Securities and Exchange Commission, or any other
Governmental Authority succeeding to any of its principal functions.

 

“Securitization Credit Agreement” means that certain Amended and
Restated Credit and Security Agreement dated as of August 19, 2002 by and among
Spherion Receivables, the Borrower, Blue Ridge Asset Funding Corporation, the
Liquidity Banks from time to time party thereto and Wachovia Bank, N.A., as
administrative agent, as from time to time amended, supplemented or restated
from time to time.

 

“Securitization Documents” means the Securitization Credit
Agreement, the Securitization Sale Agreement and the other Transaction Documents
(as defined in the Securitization Credit Agreement).

 

“Securitization Facility” means that certain securitization
financing arrangement established pursuant to the Securitization Documents
providing for aggregate advances of up to $200,000,000 to Spherion Receivables.

 

“Securitization Sale Agreement” means that certain Amended and
Restated Credit and Security Agreement dated as of August 19, 2002 by and among
the Borrower, Spherion Assessment Inc., Norcross Teleservices Inc., Comtex
Information Systems, Inc., Spherion Pacific Enterprises LLC,  Spherion Atlantic Enterprises LLC, Spherion
Pacific Operations LLC, Spherion Atlantic Operations LLC, Spherion Atlantic
Resources LLC, Spherion Atlantic Workforce LLC, Spherion Pacific Resources LLC,
Spherion Pacific Workforce LLC and each of the Borrower’s direct or indirect
wholly-owned subsidiaries that thereafter becomes an originator thereunder, as
originators, and Spherion Receivables, as buyer, as from time to time amended,
supplemented or restated from time to time.

 

“Security Agreement” means the Security Agreement dated as of
the date hereof by the Borrower and the Guarantors to the Agent in Form of Exhibit
G hereto, and each other security agreement delivered pursuant to the terms
of the Loan Documents, each as hereafter modified, amended or supplemented from
time to time.

 

“Security Instruments” means, collectively, the Security
Agreement, the Pledge Agreement, the Blocked Account Agreements, and all other
agreements (including control agreements), instruments and other documents,
whether now existing or hereafter in effect, pursuant to which the Borrower or
the Guarantor or other Person shall grant or convey to the Agent or the Lenders
a Lien in, or any other Person shall acknowledge any such Lien in, property as
security for all or any portion of the Obligations or any other obligation
under any Loan Document, as any of them may be amended, modified or
supplemented from time to time.

 

“Settlement” and “Settlement Date” have the meanings
specified in Section 12.15(a)(ii).

 

“Solvent” means, when used with respect to any Person, that at
the time of determination:

 

 

(a)                                  the assets of such Person, at a fair
valuation, are in excess of the total amount of its debts (including contingent
liabilities); and

 

(b)                                 the present fair saleable value of its assets
is greater than its probable liability on its existing debts as such debts
become absolute and matured; and

 

(c)                                  it is then able and expects to be able to pay
its debts (including contingent debts and other commitments) as they mature;
and

 

(d)                                 it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.

 

For purposes of determining whether a Person is Solvent, the amount of
any contingent liability shall be computed as the amount that, in light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.

 

“Spherion Receivables” means Spherion Receivables LLC, a
Delaware limited liability company.

 

“Stated Termination Date” means July 23, 2007.

 

“Subsidiary” of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than fifty percent (50%) of the voting stock or other equity
interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof.  Unless the context otherwise clearly requires, references herein
to a “Subsidiary” refer to a Subsidiary of the Borrower.

 

“Subordinated Note Indenture” means that certain Indenture dated
May 27, 1998 by and among the Borrower and The Bank of New York, as trustee,
providing for the issuance of the Subordinated Notes, as amended, supplemented
or amended and restated from time to time.

 

“Subordinated Notes” means the 4 1/2 % Convertible Subordinated
Notes due 2005 issued by the Borrower pursuant to the Subordinated Note
Indenture in an aggregate original principal amount of $207,000,000.

 

“Suspension Period” has the meaning given to such term in Section
5.2(m).

 

“Taxes” means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
the Agent’s or each Lender’s net income in any the jurisdiction (whether
federal, state or local and including any political subdivision thereof) under
the laws of which such Lender or the Agent, as the case may be, is organized or
maintains a lending office.

 

“Termination Date” means the earliest to occur of (i) the Stated
Termination Date, (ii) the date the Total Facility is terminated either by the
Borrower pursuant to Section 3.2 or by the Required Lenders pursuant to Section
9.2, and (iii) the date this Agreement is otherwise terminated for any
reason whatsoever pursuant to the terms of this Agreement.

 

 

“Total Facility” has the meaning specified in Section 1.1.

 

“Twelve Month Period” a period of twelve full consecutive fiscal
months of the Borrower and its Subsidiaries, taken together as one accounting
period.

 

“UCC” means the Uniform Commercial Code, as in effect from time
to time, of the State of New York or of any other state the laws of which are
required as a result thereof to be applied in connection with the issue of
perfection of security interests; provided, that to the extent that the
UCC is used to define any term herein or in any other documents and such term
is defined differently in different Articles or Divisions of the UCC, the
definition of such term contained in Article or Division 9 shall govern.

 

“Unfunded Pension Liability” means the excess of a Plan’s
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

 

“Unused Letter of Credit Subfacility” means an amount equal to
$100,000,000 minus the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit plus, without duplication, (b) the
aggregate unpaid reimbursement obligations with respect to all Letters of
Credit.

 

“Unused Line Fee” has the meaning specified in Section 2.5.

 

Accounting Terms.  Any accounting term used in the Agreement
shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations in
the Agreement shall be computed, unless otherwise specifically provided
therein, in accordance with GAAP as consistently applied and using the same
method for inventory valuation as used in the preparation of the Financial
Statements.

 

Interpretive Provisions.  (a)  The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.

 

(b)                                 The words “hereof,” “herein,” “hereunder” and
similar words refer to the Agreement as a whole and not to any particular
provision of the Agreement; and Subsection, Section, Schedule and Exhibit
references are to the Agreement unless otherwise specified.

 

(c)                                  (i)                                     The term “documents” includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced.

 

(ii)                                  The term “including” is not limiting and
means “including without limitation.”

 

(iii)                               In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including,” the words “to” and
“until” each mean “to but excluding” and the word “through” means “to and
including.”

 

(iv)                              The word “or” is not exclusive.

 

(d)                                 Unless otherwise expressly provided herein,
(i) references to agreements (including the Agreement) and other contractual
instruments shall be deemed to include all

 

 

subsequent amendments and other modifications thereto, but only to the
extent such amendments and other modifications are not prohibited by the terms of
any Loan Document, and (ii) references to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting the statute or regulation.

 

(e)                                  The captions and headings of the Agreement
and other Loan Documents are for convenience of reference only and shall not
affect the interpretation of the Agreement.

 

(f)                                    The Agreement and other Loan Documents may
use several different limitations, tests or measurements to regulate the same
or similar matters.  All such
limitations, tests and measurements, subject to express exclusions therein, are
cumulative and shall each be performed in accordance with their terms.

 

(g)                                 For purposes of Section 9.1, a breach
of a financial covenant contained in Sections 7.22 or 7.23 shall be
deemed to have occurred as of any date of determination thereof by the Agent or
as of the last day of any specified measuring period, regardless of when the
Financial Statements reflecting such breach are delivered to the Agent.

 

(h)                                 The Agreement and the other Loan Documents
are the result of negotiations among and have been reviewed by counsel to the
Agent, the Borrower and the other parties, and are the products of all
parties.  Accordingly, they shall not be
construed against the Lenders or the Agent merely because of the Agent’s or
Lenders’ involvement in their preparation.

 

 

SCHEDULE 1.1

 

COMMITMENTS

 

	
  Lender

  	
   

  	
  Revolving Loan

  Commitment

  	
   

  	
  Pro Rata Share

  (3 decimals)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  200,000,000

  	
   

  	
  $

  	
  100.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  100

  	
  %EXHIBIT
10.61

 

FIRST
AMENDMENT TO CREDIT AGREEMENT, SECURITY AGREEMENT, PLEDGE AGREEMENT AND
GUARANTY AGREEMENT

 

This FIRST AMENDMENT TO CREDIT AGREEMENT, SECURITY
AGREEMENT, PLEDGE AGREEMENT AND GUARANTY AGREEMENT (this “First Amendment”),
dated as of August 27, 2003, is by and among Spherion Corporation, as borrower
(the “Borrower”), each subsidiary of the Borrower party to the Security
Agreement (as defined below), the Pledge Agreement (as defined below), and the
Guaranty Agreement (as defined below), each of the Lenders signatory hereto
(the “Lenders”) and Bank of America, N.A., as agent for the Lenders (in
such capacity, the “Agent”). 
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned such term in the Credit Agreement (as defined below).

 

RECITALS:

 

A.                                   The
Borrower, the Lenders and the Agent are parties to that certain Credit
Agreement, dated as of July 24, 2003 (the “Credit Agreement”).

 

B.                                     The
Borrower, the Guarantors and the Agent are parties to that certain Security
Agreement, dated as of July 24, 2003 (the “Security Agreement”).

 

C.                                     The
Borrower, the Guarantors and the Agent are parties to that certain Pledge
Agreement, dated as of July 24, 2003 (the “Pledge Agreement”).

 

D.                                    The
Guarantors and the Agent are parties to that certain Guaranty Agreement, dated
as of July 24, 2003 (the “Guaranty Agreement” and, together with the
Credit Agreement, the Security Agreement and the Pledge Agreement, the “Subject
Documents” and the Subject Documents, as amended by, and together with,
this First Amendment, and as hereinafter amended, modified, supplemented,
extended or restated from time to time, being called the “Amended Agreements”).

 

E.                                      The
parties hereto have agreed to amend each of the Subject Documents as set forth
below.

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants hereinafter contained,
the parties hereto agree as follows:

 

SECTION
1.01                                     Amendments
to Credit Agreement.

 

(a)                                  Amendment
to Cover Page.  The cover page of
the Credit Agreement is hereby amended by inserting “JPMORGAN CHASE BANK, as
Syndication Agent, THE CIT GROUP/BUSINESS CREDIT, INC., as Documentation Agent”
immediately after “BANK OF AMERICA, N.A., as the Administrative Agent and as
Collateral Agent”.

 

(b)                                 Amendment
to Introductory Paragraph.  The
introductory paragraph to the Credit Agreement is hereby amended by inserting
“JPMORGAN CHASE BANK, as Syndication Agent, THE CIT GROUP/BUSINESS CREDIT,
INC., as Documentation

 

 

Agent” immediately after the parenthetical “(in such capacities, the
“Agent”),” in the fifth line thereof.

 

(c)                                  Amendments
to Section 1.2.

 

(i)                               Section
1.2(g) of the Credit Agreement is hereby amended by deleting the reference to
“12:00 noon” in the sixth line thereof and inserting “2:00 p.m.” in lieu
thereof.

 

(ii)                            Clause
(A) of the fourth sentence of Section 1.2(h)(i) of the Credit Agreement is
hereby amended by inserting the phrase “the Borrower or” between the words
“from” and “any” in the first line of such clause.

 

(d)                                 Amendment
to Section 1.6.  Section 1.6 of the
Credit Agreement is hereby amended by deleting the term “Total Facility Amount”
in the third line thereof and inserting “amount of the Total Facility” in lieu
thereof.

 

(e)                                  Amendments
to Section 2.2(a).

 

(i)                               Section
2.2(a)(i) of the Credit Agreement is hereby amended by deleting the second
reference to “$1,000,000” in the third line thereof and inserting “$500,000” in
lieu thereof.

 

(ii)                            Section
2.2(a)(ii) of the Credit Agreement is hereby amended by deleting the reference
to “$1,000,000” in the last line thereof and inserting “$500,000” in lieu
thereof.

 

(f)                                    Amendments
to Section 3.8.  Section 3.8 of the
Credit Agreement is hereby deleted in its entirety and replaced with the
following:

 

“Apportionment, Application and Reversal of
Payments.  Principal and interest
payments shall be apportioned ratably among the Lenders (according to the
unpaid principal balance of the Loans to which such payments relate held by
each Lender) and payments of the fees shall, as applicable, be apportioned
ratably among the Lenders, except for fees payable solely to Agent and the
Letter of Credit Issuer and except as provided in Section 11.1(b).  All payments shall be remitted to the Agent
and all such payments not relating to principal or interest of specific Loans,
or not constituting payment of specific fees, and all proceeds of Accounts or
other Collateral received by the Agent, shall be applied, ratably, subject to
the provisions of this Agreement, first, to pay any fees, indemnities or
expense reimbursements then due to the Agent from any Credit Party; second,
to pay any fees or expense reimbursements then due to the Lenders from any
Credit Party; third, to pay interest due in respect of all Loans,
including Non-Ratable Loans and Agent

 

2

 

Advances; fourth, to pay or prepay principal of
the Non-Ratable Loans and Agent Advances; fifth, to pay or prepay
principal of the Revolving Loans (other than Non-Ratable Loans and Agent
Advances) and unpaid reimbursement obligations in respect of Letters of Credit;
sixth, to pay an amount to the Agent equal to all outstanding
Obligations in respect of Letters of Credit to be held as cash collateral for
such Obligations; and seventh, to the payment of any other Obligation
due to the Agent, any Lender or any of their Affiliates by any Credit Party
(including any Obligations arising under Bank Products); provided, that, (i) if
any Lender (or its Affiliates) other than the Bank (or its Affiliates) provides
Bank Products to a Credit Party, such Lender shall report to the Agent the
current exposure of the Credit Parties to such Lender under such Bank Products
(and any increase in such exposure since the last report) no less frequently
than monthly and whenever requested by the Agent, and (ii) if there is any
increase in the exposure of the Credit Parties to such Lender under such Bank
Products and such Lender fails to report such increased exposure to the Agent
as required in clause (i) above, then, notwithstanding anything to the contrary
in this Agreement or any other Loan Document, the payment of such increased
exposure shall not constitute an Obligation and shall not be secured by any of
the Agent’s Liens.  Notwithstanding
anything to the contrary contained in this Agreement, unless so directed by the
Borrower, or unless an Event of Default has occurred and is continuing, neither
the Agent nor any Lender shall apply any payments which it receives to any
LIBOR Loan, except (a) on the expiration date of the Interest Period applicable
to any such LIBOR Loan, or (b) in the event, and only to the extent, that there
are no outstanding Base Rate Loans and, in any event, the Borrowers shall pay
LIBOR breakage losses in accordance with Section 4.4.  The Agent and the Lenders shall have the
continuing and exclusive right to apply and reverse and reapply any and all
such proceeds and payments to any portion of the Obligations.”

 

(g)                                 Amendment
to Section 4.6.  Section 4.6 of the
Credit Agreement is hereby amended by inserting the phrase “verify such amount
with such Lender and shall” between the words “shall” and “deliver” in the
second line thereof.

 

(h)                                 Amendments
to Section 5.2.  (i) The first
sentence of Section 5.2(a) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

 

3

 

“As soon as available, but in any event not later than
ninety (90) days after the close of each Fiscal Year, consolidated and
consolidating audited balance sheets, and a consolidated income statement, cash
flow statement and statement of change in stockholders’ equity for the Borrower
and its Subsidiaries for such Fiscal Year, and the accompanying notes thereto,
setting forth in each case in comparative form figures for the previous Fiscal
Year, all in reasonable detail, fairly presenting the financial position and
the results of operations of the Borrower and its consolidated Subsidiaries as
at the date thereof and for the Fiscal Year then ended, and prepared, other
than with respect to consolidating balance sheets, in accordance with GAAP.”

 

(ii)                                  The
first sentence of Section 5.2(b) of the Credit Agreement is hereby deleted in
its entirety and replaced with the following:

 

“As soon as available, but in any event not later than
(i) thirty (30) days after the end of each month (other than the last month of
any fiscal quarter), a consolidated unaudited balance sheet, income statement
and cash flow statement for the Borrower and its consolidated Subsidiaries for
such month and for the period from the beginning of the Fiscal Year to the end
of such month, and (ii) forty-five (45) days after the end of each fiscal
quarter, a consolidated unaudited balance sheet and income statement for the
Borrower and its consolidated United States Subsidiaries for such fiscal
quarter and for the period from the beginning of the Fiscal Year to the end of
such fiscal quarter, all in reasonable detail, fairly presenting the financial
position and results of operations of the Borrower and its consolidated
Subsidiaries (or United States Subsidiaries, as applicable) as at the date
thereof and for such periods, and in each case in comparable form, figures for
the corresponding period in the prior Fiscal Year, and prepared in accordance
with GAAP applied consistently with the audited Financial Statements required
to be delivered pursuant to Section 5.2(a).”

 

(iii)                               The
first sentence of Section 5.2(c) of the Credit Agreement is hereby deleted in
its entirety and replaced with the following:

 

“With each of the annual audited Financial Statements
delivered pursuant to Section 5.2(a), and within thirty (30) days after
the end of each fiscal month that is not the last month of a fiscal quarter,
and within forty-five (45) days after the end of each fiscal month that is the
last month of a fiscal quarter, a certificate of a Responsible Officer of the
Borrower setting forth in reasonable detail the calculations required to
establish that the Borrower was in compliance with the covenants set forth in Section
7.22, 7.23 and 7.25 during the period covered in such
Financial Statements and as at the end thereof.”

 

4

 

(i)                                     Amendment
to Section 7.18.  Section 7.18 of
the Credit Agreement is hereby amended by inserting the phrase “on assets other
than the Collateral” between the words “Liens” and “securing” in the fourth
line thereof.

 

(j)                                     Amendment
to Section 7.23.  Section 7.23 of
the Credit Agreement is hereby amended by inserting the word “thereafter”
between the words “Calculation Month” and “for” in the fifth line thereof.

 

(k)                                  Amendment
to Section 9.1(c).  Section
9.1(c)(i) of the Credit Agreement is hereby amended by inserting “7.4(b),”
between the numbers “7.2,” and “7.9”.

 

(l)                                     Amendment
to Section 12.17.  The last sentence
of Section 12.17 of the Credit Agreement is hereby amended by inserting the
phrase “Letters of Credit” between the words “Revolving Loans,” and “Agent
Advances” in the second line thereof.

 

(m)                               Amendment
to Section 12.20.  Section 12.20 of
the Credit Agreement is hereby amended by inserting the words “, a “syndication
agent”“ immediately after the words “co-agent” in the second line thereof.

 

(n)                                 Amendments
to Annex A to the Credit Agreement.

 

(i)                               The
definition of “ACH Transactions” set forth in Annex A to the Credit Agreement
is hereby deleted in its entirety and replaced with the following:

 

““ACH Transactions”
means any cash management or related services including the automatic clearing
house transfer of funds by a Lender or an Affiliate of a Lender for the account
of any Credit Party pursuant to agreement or overdrafts.”

 

(ii)                            The
definition of “Credit Party” set forth in Annex A to the Credit Agreement is
hereby deleted in its entirety and replaced with the following:

 

““Credit Party”
means the Borrower and/or any Guarantor.”

 

(iii)                         Clause
(a) of the definition of “Eligible Accounts” set forth in Annex A to the Credit
Agreement is hereby deleted in its entirety and replaced with the following:

 

“(a) that has not been invoiced and billed to the
applicable Account Debtor or with respect to which more than 90 days have
elapsed since the date of the original invoice therefor or which is more than
60 days past due;”

 

(iv)                        Clause (c)
of the definition of “Eligible Assignee” set forth in Annex A to the Credit
Agreement is hereby amended by deleting the word “institution” in the second
line thereof and inserting the word “lender” in lieu thereof.

 

5

 

(v)                           The
definition of “Obligations” set forth in Annex A to the Credit Agreement is hereby
amended by (A) deleting the words “the Borrower” in the second and eighth lines
thereof and inserting “any Credit Party” in lieu thereof and (B) inserting the
phrase “or any of its Affiliates” between the word “Lender” and the comma in
the second line thereof.

 

(vi)                        Clause (a)
of the definition of “Permitted Affiliate Transactions” is hereby deleted in
its entirety and replaced with the following:

 

“(a) loans and advances to franchisees and licensees
in the ordinary course of business consistent with past practices that are also
Permitted Investments (other than pursuant to clause (b) of the definition of
“Permitted Investments”)”

 

SECTION
1.02                                     Amendments
to Security Agreement.  

 

(a)                                  Amendment
to Recitals.  The first recital of
the Security Agreement is hereby amended by deleting the phrase “and J.P.
Morgan Chase & Co., as Co-Lead Arrangers” in the second line thereof.

 

(b)                                 Amendments
to Section 1.

 

(i)                               The
following defined term is hereby added to Section 1 in appropriate alphabetical
order:

 

““General Intangibles”
means all of each Grantor’s now owned or hereafter acquired general
intangibles, as defined in the UCC, (other than Accounts), including, without
limitation, all (a) choses in action, causes of action, payment intangibles,
corporate or other business records, patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, goodwill,
copyrights, computer software, customer lists, registrations, licenses and
franchises, (b) tax refund claims, (c) rights and claims against carriers and
shippers, (d) rights to indemnification, (e) rights to receive dividends,
distributions, cash, instruments and other property in respect of or in
exchange for (i) pledged equity interests or (ii) any letter of credit, guarantee,
claim, security interest or other supporting obligation or security held by or
granted to such Grantor, (f) extensions, renewals, reissues, divisions,
continuations, and continuations-in-part of any of the foregoing, and (g)
rights to sue for past, present and future infringement of any of the
foregoing.”

 

(ii)                            The
definition of “Accounts” is hereby amended by inserting the phrase “and any and
all supporting obligations in respect thereof” at the end of such definition.

 

6

 

(c)                                  Amendments
to Section 2.

 

(i)                               Section
2(a) of the Security Agreement is hereby amended by inserting the phrase “and
their respective Affiliates” between the word “Lenders” and the comma in the
second line thereof.

 

(ii)                            Section
2(a)(ii) of the Security Agreement is hereby amended by inserting the word
“money” after the word “Grantor’s” in the first line thereof.

 

(d)                                 Amendments
to Section 3.

 

(i)                               Section
3(c) of the Security Agreement is hereby amended by inserting the phrase “and
their respective Affiliates” between the word “Lenders” and the comma in the
third line thereof.

 

(ii)                            Section
3(f) of the Security Agreement is hereby amended by deleting the word
“Contract” in the second line thereof and inserting the phrase “contract or
agreement” in lieu thereof.

 

(e)                                  Amendments
to Section 9.  Section 9 of the
Security Agreement is hereby amended by (i) inserting the clause “(e) on a
monthly basis by the 21st day of the following fiscal month, a
statement of the Borrower’s and its Subsidiaries (other than Foreign
Subsidiaries) (i) accrued and unpaid consolidated payroll and payroll taxes as
of the date of such statement, (ii) estimated consolidated payroll and payroll
tax expenses for the two week period following the date of such statement and
(iii) consolidated payroll and payroll tax expenses for the fiscal month most
recently ended,” immediately after clause (d) thereof; (ii) redesignating the
original clauses (e), (f), (g) and (h) as clauses (f), (g), (h) and (i),
respectively and (iii) adding a new sentence at the end of Section 9 as
follows:

 

“To the extent that any of the documents referred to
in this Section 9 are required to be delivered on any day that is not a
Business Day, such documents shall be delivered on the next Business Day
following such day.”

 

(f)                                    The
fifth sentence of Section 11 of the Security Agreement is hereby amended by
deleting the words “subject to the Agent’s sole control and withdrawals by any
Grantor shall not be permitted” immediately prior to the proviso therein and
inserting the following in lieu thereof:

 

“subject to an Activation Period (as defined in the
Blocked Account Agreement) commencing upon delivery of an Activation Notice (as
defined in the Blocked Account Agreement) which Activation Notice may, and at
the direction of the Required Lenders shall, be given by the Agent after the
occurrence of certain events set forth in the Blocked Account Agreement”

 

(g)                                 Amendment
to Section 18(d).  Section 18(d) of
the Security Agreement is hereby amended by deleting the word “Contracts” in
the third line thereof and inserting the phrase “contracts or agreements” in
lieu thereof.

 

7

 

(h)                                 Amendment
to Section 23(b).  The penultimate
sentence of Section 23(b) of the Security Agreement is hereby amended by
deleting the phrase “ten (10)” in the first line thereof and inserting the
phrase “five (5)” in lieu thereof.

 

(i)                                     Amendment
to Section 24.  Section 24 of the
Security Agreement is hereby amended by deleting the term “Intellectual
Property” in the eighth line thereof and inserting the phrase “trademarks,
trade names, service marks, copyrights and other intellectual property” in lieu
thereof.

 

SECTION
1.03                                     Amendments
to Pledge Agreement.

 

(a)                                  Amendment
to Recitals.  (i) The first recital
of the Pledge Agreement is hereby amended by deleting the words “financial
institutions” in the third line thereof and inserting the word “lenders” in
lieu thereof.

 

(ii)                            The
clause beginning “NOW THEREFORE,” is hereby deleted in its entirety and
replaced with the following:

 

“NOW THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce the Lenders to make Loans (including the
initial Loan) to the Borrower pursuant to the Credit Agreement, each Pledgor
agrees, for the benefit of the Agent, each Lender and each of their respective
Affiliates, as follows:”

 

(b)                                 Amendment
to Section 2.1.  Section 2.1 of the
Pledge Agreement is hereby amended by (i) inserting the words “its benefit and
for” between the words “for” and “the” in the third line thereof; and (ii)
inserting the phrase “and their respective Affiliates” between the word
“Lenders” and the comma in the third line thereof.

 

(c)                                  Amendment
to Section 2.4.  The last sentence
of Section 2.4 of the Pledge Agreement is hereby amended by inserting the
phrase “for the benefit of the Agent, the Lenders and their respective
Affiliates” at the end thereof.

 

(d)                                 Amendment
to Section 2.8.  The penultimate
sentence of Section 2.8 of the Pledge Agreement is hereby amended by (i)
inserting the words “Agent, the” between the words “the” and “Lenders” in the
third line thereof; and (ii) inserting the phrase “and their respective
Affiliates” between the word “Lenders” and the comma in the third line thereof.

 

(e)                                  Amendment
to Section 6.1(a).  The second
sentence of Section 6.1(a) is hereby amended by deleting the phrase “ten (10)”
in the second line thereof and inserting the phrase “five (5)” in lieu thereof.

 

SECTION 1.04              Amendments to
Guaranty Agreement.

 

(a)                                  Amendments
to Recitals.

 

8

 

(i)                               The
first recital of the Guaranty Agreement is hereby amended by deleting the words
“financial institutions” in the fourth line thereof and inserting the word
“lenders” in lieu thereof.

 

(ii)                            The
clause beginning “NOW THEREFORE,” is hereby deleted in its entirety and
replaced with the following:

 

“NOW THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
and in order to induce the Lenders to make the Loans to the Borrower pursuant
to the Credit Agreement, each Guarantor agrees, for the benefit of the Agent,
each Lender and each of their respective Affiliates, as follows:”

 

(b)                                 Amendments
to Section 1.1.

 

(i)                               The
definition of “Credit Party” in Section 1.1 of the Guaranty Agreement is hereby
deleted in its entirety and replaced with the following:

 

““Credit Party”
means the Borrower and/or each Guarantor.”

 

(ii)                            The
definition of “Termination Date” in Section 1.1 of the Guaranty Agreement is
hereby deleted in its entirety and replaced with the following:

 

““Termination Date”
means the date on which all Commitments of the Lenders shall have terminated
and all other Obligations have been indefeasibly paid in full and all Letters
of Credit have been cancelled or have expired and all amounts drawn thereunder
have been indefeasibly reimbursed in full or such Letters of Credit are Fully
Supported.”

 

(c)                                  Amendment
to Section 2.3(c).  Section 2.3(c)
of the Guaranty Agreement is hereby amended by (i) deleting the word “and” at
the end of clause (i) thereof and inserting a comma in lieu thereof, (ii)
deleting the period at the end of clause (ii) thereof and inserting “and” in
lieu thereof, and (iii) inserting the following clause (iii) immediately after
clause (ii) thereof:

 

“(iii) to the fullest
extent permitted by applicable law, the benefit of any statute of limitations
affecting such Guarantor’s liability hereunder or the enforcement thereof, and
any act which shall defer or delay the operation of any statute of limitations
applicable to the Guaranteed Obligations shall similarly operate to defer or
delay the operation of such statute of limitations applicable to such
Guarantor’s liability hereunder.”

 

(d)                                 Amendment
to Section 2.4.  The second sentence
of Section 2.4 of the Guaranty Agreement is hereby amended by deleting the
words “the Lenders” in the third line thereof and inserting the words “the
Agent, the Lenders and each of their respective Affiliates” in lieu thereof.

 

9

 

SECTION
1.05                                     Representations
and Warranties.  The Borrower hereby
represents and warrants to each Lender and the Agent, on the First Amendment
Effective Date (as hereinafter defined), as follows:

 

(a)                                  After
giving effect to this amendment, the representations and warranties set forth
in Article 6 of the Credit Agreement, and in each other Loan Document, are true
and correct in all material respects on and as of the date hereof and on and as
of the First Amendment Effective Date with the same effect as if made on and as
of the date hereof or the First Amendment Effective Date, as the case may be,
except to the extent such representations and warranties expressly relate
solely to an early date.

 

(b)                                 Each
of the Borrower and the other Credit Parties is in compliance with all terms
and conditions of the Credit Agreement and the other Loan Documents on its part
to be observed and performed and no Default or Event of Default has occurred
and is continuing.

 

(c)                                  The
execution, delivery and performance by the Borrower and each other Credit Party
of this First Amendment has been duly authorized by the Borrower and each other
Credit Party, as applicable.

 

(d)                                 This
First Amendment constitutes the legal, valid and binding obligations of each
Credit Party, enforceable against each such Credit Party in accordance with its
terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting the enforcement of creditors’ rights or by the effect of general
equitable principles.

 

(e)                                  The
execution, delivery and performance by the Borrower and each other Credit Party
of this First Amendment do not and will not conflict with, or constitute a
violation or breach of, or result in the imposition of any Lien upon the
property of each Credit Party or any of its Subsidiaries, by reason of the
terms of (i) any contract, mortgage, lease, agreement, indenture, or instrument
to which the Borrower is a party or which is binding upon it, (ii) any
Requirement of Law applicable to any Credit Party or any of its Subsidiaries,
or (iii) the certificate or articles of incorporation or by-laws or the limited
liability company or limited partnership agreement of any Credit Party or any
of its Subsidiaries.

 

SECTION
1.06                                     Effectiveness.  This First Amendment shall become effective
only upon satisfaction of the following conditions precedent (the first date
upon which each such condition has been satisfied being herein called the “First
Amendment Effective Date”):

 

(a)                                  The
Agent shall have received duly executed counterparts of this First Amendment
which, when taken together, bear the authorized signatures of the Borrower,
each other Credit Party, the Agent and the Required Lenders.

 

(b)                                 The
Agent and the Required Lenders shall be satisfied that the representations and
warranties set forth in Section 1.05 of this First Amendment are true
and correct on and as of the First Amendment Effective Date and that no Default
or Event

 

10

 

of Default has occurred and is continuing on and as of the First
Amendment Effective Date.

 

(c)                                  The
Agent shall have received all fees and expenses to be paid by the Borrower pursuant
to Section 1.07 of this First Amendment.

 

(d)                                 There
shall not be any action pending or any judgment, order or decree in effect
which, in the judgment of the Agent or the Required Lenders, is likely to
restrain, prevent or impose materially adverse conditions upon the performance
by the Borrower or any other Credit Party of its obligations under the Credit
Agreement.

 

(e)                                  The
Agent shall have received such other documents, legal opinions, instruments and
certificates relating to this First Amendment as it shall reasonably request
and such other documents, legal opinions, instruments and certificates that
shall be reasonably satisfactory in form and substance to the Agent and the
Required Lenders.  All corporate
proceedings taken or to be taken in connection with this First Amendment and
documents incidental thereto whether or not referred to herein shall be
reasonably satisfactory in form and substance to the Agent and the Required
Lenders.

 

SECTION
1.07                                     Expenses.  The Borrower shall pay all reasonable
out-of-pocket expenses incurred by Agent in connection with the preparation,
negotiation, execution and delivery of this First Amendment, including, but not
limited to, the reasonable fees and disbursements of counsel to the Agent.

 

SECTION
1.08                                     Cross-References.  References in this First Amendment to any
Section are, unless otherwise specified, to such Section of this First
Amendment.

 

SECTION
1.09                                     Instrument
Pursuant to Credit Agreement.  This
First Amendment is a Loan Document executed pursuant to the Credit Agreement
and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions of the
Credit Agreement.

 

SECTION
1.10                                     Further
Acts.  Each of the parties to this
First Amendment agrees that at any time and from time to time upon the written
request of any other party, it will execute and deliver such further documents
and do such further acts and things as such other party may reasonably request
in order to effect the purposes of this First Amendment.

 

SECTION
1.11                                     Governing
Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)                                  THIS
FIRST AMENDMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.

 

11

 

(b)                                 ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS FIRST AMENDMENT OR ANY OTHER
LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS FIRST AMENDMENT, EACH OF THE BORROWER, EACH OTHER CREDIT
PARTY, THE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH OF THE BORROWER, EACH OTHER CREDIT
PARTY, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS FIRST AMENDMENT OR
ANY DOCUMENT RELATED HERETO. 
NOTWITHSTANDING THE FOREGOING: 
(1) THE AGENT AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION
OR PROCEEDING AGAINST THE BORROWER OR ANY OTHER CREDIT PARTY OR THEIR
RESPECTIVE PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR THE
LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR
OTHER SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY
PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.

 

(c)                                  THE
BORROWER AND EACH OTHER CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE
BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS
ADDRESS SET FORTH IN SECTION 13.8 OF THE CREDIT AGREEMENT AND SERVICE SO
MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE
BEEN SO DEPOSITED IN THE U.S. MAILS POSTAGE PREPAID.  NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT OR THE
LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.

 

(d)                                 THE
BORROWER, EACH OTHER CREDIT PARTY, THE LENDERS AND THE AGENT EACH IRREVOCABLY
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS FIRST AMENDMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE.  THE BORROWER, EACH OTHER
CREDIT PARTY, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL

 

12

 

BE TRIED BY A COURT TRIAL WITHOUT A JURY.  WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS FIRST
AMENDMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.  THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.

 

SECTION
1.12                                     Counterparts.  This First Amendment may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.

 

SECTION
1.13                                     Severability.  In case any provision in or obligation under
this First Amendment or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

 

SECTION
1.14                                     Benefit
of Agreement.  This First Amendment
shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto; provided that the
Borrower may not assign or transfer any of its interest hereunder without the
prior written consent of the Lenders.

 

SECTION
1.15                                     Integration.  This First Amendment represents the
agreement of the Borrower, each other Credit Party, the Agent and each of the
Lenders signatory hereto with respect to the subject matter hereof, and there
are no promises, undertakings, representations or warranties relative to the
subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.

 

SECTION
1.16                                     Confirmation.  Except as expressly amended by the terms
hereof, all of the terms of the Credit Agreement, the Security Agreement, the
Pledge Agreement, the Guaranty Agreement and the other Loan Documents shall
continue in full force and effect and are hereby ratified and confirmed in all
respects.

 

SECTION
1.17                                     Loan
Documents.  Except as expressly set
forth herein, the amendments provided herein shall not by implication or
otherwise limit, constitute a waiver of, or otherwise affect the rights and
remedies of the Lenders or the Agent under the Amended Agreements or any other
Loan Document, nor shall they constitute a waiver of any Event of Default, nor
shall they alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Amended
Agreements or any other Loan Document. 
Each of the amendments provided herein shall apply and be effective only
with respect to the provisions of the applicable Amended Agreement specifically
referred to by such amendments.  Except
as expressly amended

 

13

 

herein, the Amended Agreements and the other Loan Documents shall
continue in full force and effect in accordance with the provisions
thereof.  As used in any Amended
Agreement, the terms “Agreement”, “herein”, “hereinafter”, “hereunder”,
“hereto” and words of similar import shall mean, from and after the date
hereof, such Amended Agreement.

 

[Signature
Pages to Follow]

 

14

 

IN WITNESS WHEREOF, each of the parties hereto has
caused a counterpart of this First Amendment to be duly executed and delivered
as of the date first above written.

 

	
   

  	
  BORROWER AND OTHER CREDIT

  
	
   

  	
  PARTIES:

  
	
   

  	
   

  
	
   

  	
  SPHERION CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NORCROSS TELESERVICES L.P.

  
	
   

  	
  By:

  	
  Norcross Holdings, LLC, its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NORRELL CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
	
   

  	
   

  
	
   

  	
  SPHERION ASSESSMENT INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
	
   

  	
   

  
	
   

  	
  SPHERION ATLANTIC ENTERPRISES LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPHERION ATLANTIC RESOURCES LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
									

 

15

 

	
   

  	
  SPHERION ATLANTIC WORKFORCE

  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPHERION (EUROPE) INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPHERION FINANCIAL

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPHERION PACIFIC ENTERPRISES

  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPHERION PACIFIC RESOURCES

  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPHERION PACIFIC WORKFORCE

  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
										

 

16

 

	
   

  	
  SPHERION U.S. INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NORRELL TEMPORARY SERVICES,

  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NORRELL RESOURCES

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shannon W. Russo

  	
   

  
	
   

  	
  Name:

  	
  Shannon W. Russo

  	
   

  
	
   

  	
  Title:

  	
  VP Finance

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADMINISTRATIVE AGENT AND

  
	
   

  	
  COLLATERAL AGENT:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,
  as the Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Herdman

  	
   

  
	
   

  	
  Name:

  	
  Mark Herdman

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,
  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Herdman

  	
   

  
	
   

  	
  Name:

  	
  Mark Herdman

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
								

 

17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]