Document:

Exhibit 10.58

 

SECOND AMENDMENT TO LETTER OF CREDIT AGREEMENTS

 

THIS SECOND AMENDMENT TO LETTER OF CREDIT AGREEMENTS (this “Amendment”), is made and entered into as of

June 12, 2002, by and between LABOR READY,

INC., a Washington corporation (“Debtor”),

and GENERAL ELECTRIC CAPITAL CORPORATION, a

Delaware corporation (“Creditor”).

 

W  I  T

N  E  S  E  T  H:

 

WHEREAS, Debtor and Creditor are

parties to that certain Letter of Credit Agreement dated as of March 1, 2001

(the “Letter of Credit Agreement”;

capitalized terms used herein and not otherwise defined herein shall have the

meanings given such terms in the Letter of Credit Agreement or Annex A

thereto), whereby Creditor has agreed, subject to certain terms and conditions,

to incur Letter of Credit Obligations or cause the issuance of Letters of

Credit; and

 

WHEREAS, Creditor and Debtor desire

to modify the Letter of Credit Agreement in certain respects, all in accordance

with and subject to the terms and conditions set forth herein.

 

NOW THEREFORE, in consideration of the

premises and mutual covenants contained herein, and other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged,

the parties hereto agree as follows:

 

1.             Amendments to

Letter of Credit Agreement. 

Subject to the terms and conditions of this Amendment, the Letter of

Credit Agreement shall be amended as follows:

 

1.1           Section 6.3 to the Letter of

Credit Agreement is hereby amended by deleting the word “and” from the end of

clause (iv) and adding the word “and” to the end of clause (v) and adding a new

clause (vi) to read in its entirety as follows:

 

(vi)          the Subordinated Indebtedness, provided

that:  (A) the aggregate

principal amount of such Indebtedness shall not exceed $90,000,000; (B) such

Indebtedness is not redeemable at the option of the holders thereof prior to

its stated maturity date (except upon a change of control event acceptable to

Creditor) and does not have any required scheduled payments of principal prior

to the maturity date thereof; (C) the stated maturity date of such Indebtedness

shall be not less than six (6) months after the Commitment Termination Date;

and (D) such Indebtedness shall be unsecured and subordinated in right of

payment to the Obligations on terms satisfactory to Creditor, including

customary payment blockage provisions.

 

1.2           Section 6.5 to the Letter of

Credit Agreement is hereby amended by deleting clause (b) thereof and

substituting in lieu thereof the following clause (b) to read in its entirety

as follows:

 

 

(b) make any change in its

capital structure as described on Disclosure Schedule (3.8), including

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

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

any changes in capital structure resulting from the issuance by Debtor of the

Subordinated Notes, the incurrence by Debtor of any Subordinated Indebtedness

or the conversion by Debtor of any of the Subordinated Indebtedness into common

stock of Debtor in accordance with the terms of the Subordinated Note

Indenture, provided that: (A) the aggregate principal amount of such

Subordinated Indebtedness shall not exceed $90,000,000, (B) the Subordinated

Indebtedness is not redeemable at the option of the holders thereof prior to

its stated maturity date (except upon a change of control event acceptable to

the Creditor) and does not have any required scheduled payments of principal

prior to the maturity date thereof; (C) the stated maturity date of the

Subordinated Indebtedness shall be not less than six (6) months after the

Commitment Termination Date; and (D) the Subordinated Indebtedness shall be

unsecured and subordinated in right of payment to the Obligations on terms

satisfactory to the Creditor, including customary payment blockage provisions,

or

 

1.3           The first sentence of Section 6.14

is hereby deleted in its entirety and the following new sentence is substituted

in lieu thereof:

 

6.14   Restricted Payments.  No Credit Party shall make any Restricted

Payment, except: (a)(i) intercompany loans and advances between Debtor and its

Subsidiaries (other than the Existing Foreign Subsidiaries, LR Assurance and

Workers’ Assurance) and (ii) intercompany loans and advances between Debtor and

the Existing Foreign Subsidiaries, LR Assurance and Workers’ Assurance, so long

as the aggregate of all such loans and advances permitted under this clause

(ii) does not exceed $500,000 during any Fiscal Year; (b) dividends and

distributions by Subsidiaries of Debtor paid to Debtor; and (c) subject to the

subordination provisions provided for in the Subordinated Notes Indenture,

scheduled semi-annual payments of interest to the holders of the Subordinated

Notes, in the manner provided for therein or pursuant to the Subordinated Notes

Indenture.

 

1.4           Section 8.1 to the Letter of

Credit Agreement is hereby amended by adding a new subsection (n) to read in

its entirety as follows:

 

(n)           The occurrence of any “Event of

Default” under and as defined in the Subordinated Notes Indenture.

 

1.5           Annex A to the Letter of

Credit Agreement is hereby amended by adding in alphabetical order the

following definitions:

 

2

 

“Subordinated

Notes Indenture” shall mean that certain Indenture dated on or about June

13, 2002, between Debtor and The Bank of New York, as Trustee.

 

“Subordinated

Notes” shall mean those certain Convertible Subordinated Notes due in 2007

and issued pursuant to the Subordinated Notes Indenture.

 

“Subordinated

Indebtedness” shall mean the Indebtedness incurred by Debtor under and

pursuant to the Subordinated Notes and the Subordinated Notes Indenture.

 

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

forth and referred to in Section 1 above, the Letter of Credit Agreement

shall remain unchanged and in full force and effect. Without limiting the

generality of the foregoing, the parties hereto hereby acknowledge and agree

that this Amendment is not intended to, nor shall it be construed as, waiving

any Default or Event of Default that now or hereafter may exist as a result of

any transactions between or among Debtor or any other Credit Party, except for

those transactions specifically described in Section 1 of this

Amendment.

 

3.             Representations and

Warranties.  Debtor

hereby represents and warrants to Creditor that (a) this Amendment has been

duly authorized, executed and delivered by Debtor, (b) after giving effect to

this Amendment, no Default or Event of Default has occurred and is continuing

as of this date, and (c) after giving effect to this Amendment, all of the

representations and warranties made by Debtor in the Letter of Credit Agreement

are true and correct in all material respects on and as of the date of this

Amendment (except to the extent that any such representations or warranties

expressly referred to a specific prior date). 

Any breach in any material respect by Debtor of any of its

representations and warranties contained in this Section 3 shall be a

Default and an Event of Default for all purposes of the Letter of Credit Agreement.

 

4.             Ratification.  Debtor hereby ratifies and reaffirms each

and every term, covenant and condition set forth or incorporated by reference

in the Letter of Credit Agreement and all other documents delivered by Debtor

in connection therewith (including without limitation the other Letter of

Credit Documents to which Debtor is a party) effective as of the date hereof.

 

5.             Estoppel.  To induce Creditor to enter into this

Amendment, Debtor hereby acknowledges and agrees that, as of the date hereof, there

exists no right of offset, defense or counterclaim in favor of Debtor as

against Creditor with respect to the obligations of Debtor under the Letter of

Credit Agreement or the other Letter of Credit Documents, either with or

without giving effect to this Amendment.

 

6.             Conditions to

Effectiveness.  Upon the

receipt by Creditor of (i) this Amendment, duly executed, completed and

delivered by Debtor and each Guarantor and (ii) a copy of the final

Subordinated Notes Indenture in form and substance satisfactory to Creditor,

this Amendment shall become effective.

 

3

 

7.             Reimbursement of

Expenses.  Debtor hereby

agrees that it shall reimburse Creditor on demand for all costs and expenses

(including without limitation reasonable attorney’s fees) incurred by such

parties in connection with the negotiation, documentation and consummation of

this Amendment and the other documents executed in connection herewith and

therewith and the transactions contemplated hereby and thereby.

 

8.             Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND

CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK FOR CONTRACTS

TO BE PERFORMED ENTIRELY WITHIN SAID STATE.

 

9.             Severability of

Provisions.  Any

provision of this Amendment which is prohibited or unenforceable in any

jurisdiction shall, as to such jurisdiction, be ineffective to the extent of

such prohibition or unenforceability without invalidating the remaining

provisions hereof or affecting the validity or enforceability of such provision

in any other jurisdiction. To the extent permitted by applicable law, Debtor

hereby waives any provision of law that renders any provision hereof prohibited

or unenforceable in any respect.

 

10.           Counterparts.  This Amendment may be executed in any number

of several counterparts, all of which shall be deemed to constitute but one

original and shall be binding upon all parties, their successors and permitted

assigns.

 

11.           Entire Agreement.  The Letter of Credit Agreement as amended

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

the parties hereto relating to the subject matter hereof and supersedes all

prior agreements, representations and understandings, if any, relating to the

subject matter hereof.

 

[Remainder of page intentionally blank; next page is

signature page]

 

4

 

IN WITNESS WHEREOF, the parties have caused

this Second Amendment to Letter of Credit Agreements to be duly executed by

their respective officers thereunto duly authorized, as of the date first above

written.

 

	

   

  	

  GENERAL ELECTRIC CAPITAL CORPORTION

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  Craig Winslow

  	

   

  
	

   

  	

   

  	

   

  	

  Its Duly Authorized Signatory

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR READY, INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  Steven C. Cooper

  	

   

  
	

   

  	

  Name:

  

  	

  Steven

  C. Cooper

  
	

   

  	

  Title:

  	

  Executive

  Vice President & Chief

  
	

   

  	

   

  	

  Financial

  Officer

  
							

 

 

 

Each

of the undersigned Guarantors hereby acknowledges and agrees with the terms of

the foregoing Second Amendment to Letter of Credit Agreements and hereby

ratifies and reaffirms all of its obligations under that certain Subsidiary

Guaranty dated as of March 1, 2001 by the Guarantors in favor of Creditor.

 

	

   

  	

  LABOR

  READY CENTRAL, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY CENTRAL II, LLC

  
	

   

  	

   

  
	

   

  	

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

  Member

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY CENTRAL III, LP

  
	

   

  	

   

  
	

   

  	

  By:

  	

  Labor Ready Central, Inc.,

  as its sole General

  
	

   

  	

   

  	

  Partner

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY GP CO., INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
					

 

 

	

   

  	

  LABOR

  READY MID-ATLANTIC, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY MID-ATLANTIC II, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY MID-ATLANTIC III, LP

  
	

   

  	

   

  
	

   

  	

  By:

  	

  Labor Ready GP Co., Inc.,

  as its sole General

  
	

   

  	

   

  	

  Partner

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY MIDWEST, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY NORTHEAST, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
							

 

 

	

   

  	

  LABOR

  READY NORTHWEST, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY SOUTHEAST, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY SOUTHEAST, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY SOUTHEAST III, LP

  
	

   

  	

   

  
	

   

  	

  By:

  	

  Labor Ready GP Co., Inc.,

  as its sole General

  
	

   

  	

   

  	

  Partner

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
							

 

 

	

   

  	

  LABOR

  READY SOUTHWEST, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY PROPERTIES, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY HOLDINGS, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: President

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LABOR

  READY PUERTO RICO, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy J. Adams

  	

   

  
	

   

  	

  Name: Timothy J. Adams

  
	

   

  	

  Title: PresidentEXHIBIT 10.59

 

Wells Fargo

Bank N.A.

Tacoma Regional Commercial Banking Office

1201 Pacific Avenue, Third Floor

Tacoma, WA 98402-4301

800 688-0224

253 593-5215 Fax

 

 

 

July 31, 2002

 

Mr. Steven C. Cooper

Executive Vice President &

 

Chief Financial Officer

Labor Ready, Inc.

P.O. Box 2910

Tacoma, Washington  98401

 

Dear Steve:

 

                Wells

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

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

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

incorrectly shows the date as January 4, 2001), executed by Bank and Borrower

(the “Credit Agreement”).  Except as

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

given in the Credit Agreement.

 

                In

Bank’s prior letter to Borrower dated June 12, 202 (the “Consent Letter”), the

parties confirmed Bank’s consent to a certain subordinated debt offering and

modified the EBITDA Coverage Ratio in Section 4.9(d) of the Credit Agreement.  When the consent Letter was executed the

parties agreed to subsequently negotiate a mutually acceptable “change of

control” provision for the Credit Agreement. 

This letter will confirm the following agreement between Bank and

Borrower:

 

	

  1.

  	

   

  	

  Section 6.1 of the Credit

  Agreement shall be deemed modified hereby to include the following paragraph

  at the end thereof: 

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “(i)  The occurrence of any “Change of Control”

  as defined in the GECC Letter of Credit Documents, as same may be amended by

  any amendment consented to by Bank.”

  	

   

  

 

 

 

	

  2.

  	

   

  	

  Except as expressly

  provide herein, all terms and provision of the Credit Agreement and the other

  loan documents shall continue in full force and effect without waiver or

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

  connection therewith

  	

   

  

 

                Please

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

undersigned this letter or a copy hereof not later than August 7, 2002.

 

Sincerely,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

 

 

	

  By:

  	

  /s/ Edward Foreman

  
	

  Title:

  	

  VICE PRESIDENT

  
			

 

 

Acknowledged and agreed to by:

 

LABOR READY, INC.

 

 

	

  By:

  	

  /s/ Steve Cooper

  
	

  Title:

  	

  CFO

  
			

 

2

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