FIRST
AMENDMENT TO LOAN AGREEMENT
THIS FIRST
AMENDMENT TO LOAN AGREEMENT, dated as of April 24, 2009 (this
“Amendment”), is among KELLY SERVICES, INC., a Delaware
corporation(the “Company”), the Foreign Subsidiary
Borrowers set forth on the signature pages hereof (together with
the Company, the “Borrowers”), the lenders set forth on
the signature pages hereof (collectively, the
“Lenders”) and JPMORGAN CHASE BANK, N.A. a national
banking association, as administrative agent for the Lenders (in
such capacity, the “Agent”).
A. The
Borrowers, the Agent and the Lenders are parties to a Loan
Agreement, dated as of November 30, 2005 (as now and hereafter
amended, the “Loan Agreement”), pursuant to which the
Lenders agreed, subject to the terms and conditions thereof, to
extend credit to the Borrowers.
B. The
Borrowers desire to amend the Loan Agreement and the Agent and the
Lenders are willing to do so strictly in accordance with the terms
hereof.
In
consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:
Upon
fulfillment of the conditions set forth in Article 3 hereof,
the Loan Agreement shall be amended as follows:
1.1 The
definition of “EBITDA” in Section 1.1 shall be
amended by adding the following language at the end
thereof:
“
plus (e) for any calculation including the fiscal
quarter ending September 30, 2008, an amount equal to $23,460,000
relating to charges taken for past litigation, plus (f) for
any calculation including the fiscal quarter ending
December 31, 2008, an amount equal to $1,500,000 relating to
restructuring charges, plus (g) an amount not to exceed
$5,000,000 in aggregate amount relating to future cash
restructuring charges taken by the Company on or after
January 1, 2009, which add-back shall be taken by the Company
in the quarter in which any such charges were taken and shall
continue for any calculation thereafter which includes such
quarter.”
1.2 The
following definitions in Section 1.1 are restated to read as
follows:
“
Alternate Base Rate ” means, for any day, a rate per
annum equal to the greatest of (a) the Prime Rate in effect on
such day, (b) the Federal Funds Effective Rate in effect on
such day plus 1
/
2
of 1% and
(c) the Adjusted LIBO Rate for a one month Interest Period on
such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1%, provided that, for the
avoidance of doubt, the Adjusted LIBO Rate for any day shall be
based on the rate appearing on the Reuters Screen LIBOR01 Page (or
on any successor or substitute page) at approximately
11:00 a.m. London time on such day (without any rounding). Any
change in the Alternate Base Rate due to a change in the Prime
Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate
shall be effective from and including the effective date of such
change in the Prime Rate, the Federal Funds Effective Rate or the
Adjusted LIBO Rate, respectively.
“
Floating Rate ” means, for any day, a rate per annum
equal to (i) the Alternate Base Rate for such day, in each
case changing when and as the Alternate Base Rate changes, plus
(ii) the Applicable Margin.
1.3 The
following definitions shall be added to Section 1.1 in
appropriate alphabetical order:
“
Adjusted LIBO Rate ” means, with respect to any
calculation of the Alternate Base Rate, the quotient of
(i) the Eurocurrency Reference Rate for deposits in Dollars
divided by (ii) one minus the Reserve Requirement (expressed
as a decimal).
“
Equity Interests ” means shares of capital stock,
partnership interests, membership interests in a limited liability
company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such equity
interest.
“
First Amendment Effective Date ” means April 24,
2009.
“
Restricted Payment ” means any dividend or other
distribution (whether in cash, securities or other property) with
respect to any Equity Interests in any Borrower or any Subsidiary,
or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests in any Borrower or any
Subsidiary or any option, warrant or other right to acquire any
such Equity Interests in any Borrower or any Subsidiary.
1.4
Section 6.12(k) shall be restated as follows:
(k)
(x) Liens encumbering Property of the Company or any
Subsidiary securing Indebtedness of the Company or any Subsidiary
and (y) unsecured Indebtedness of Subsidiaries, in each case,
in addition to the Liens and Indebtedness described in clauses
(a) through (j) above, in an aggregate amount not
exceeding 10% of the consolidated Net Worth of the Company and its
Subsidiaries.
1.5
Section 6.15 shall be restated as follows:
6.15
Interest Coverage Ratio . The Company shall not permit its
Interest Coverage Ratio as of the last day of each fiscal quarter
to be less than (i) as of the fiscal quarter ending
March 31, 2009, 5.0 to 1.0; (ii) as of the fiscal quarter
ending December 31, 2009, 3.5 to 1.0; (iii) as of the
fiscal quarters ending March 31, 2010 and June 30, 2010,
4.0 to 1.0; and (iv) thereafter, 5.0 to 1.0. The Interest
Coverage Ratio shall not be tested for the fiscal quarters ending
June 30, 2009 and September 30, 2009.
1.6 New
Sections 6.17 and 6.18 shall be added at the end of
Article VI to read as follows:
6.17.
Restricted Payments . The Company will not, nor will it
permit any Subsidiary to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except (i) the
Borrower may declare and pay dividends with respect to its common
stock payable solely in additional shares of its common stock, and,
with respect to its preferred stock, payable solely in additional
shares of such preferred
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