8-K: Current report filing

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event
reported):

August 28, 2002

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BARRETT BUSINESS SERVICES, INC.
(Exact name of registrant as specified in charter)

Maryland
(State or other jurisdiction of incorporation)

0-21886
(SEC File Number)

52-0812977
(IRS Employer Identification No.)

4724 S.W. Macadam Avenue
Portland, Oregon 97239
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:

(503) 220-0988





Item 5. Other Events.

On August 28, 2002, Barrett Business Services, Inc. (the "Company"),
entered into an Amended and Restated Credit Agreement, dated as of September 2,
2002 (the "Agreement"), with Wells Fargo Bank, N.A. (the "Bank"). The Agreement
provides for a revolving credit facility of up to $11 million, which includes a
subfeature under the line of credit for standby letters of credit for not more
than $5.5 million, and a term loan in the original amount of $693,750, as to
which the outstanding principal balance as of September 2, 2002 was
approximately $360,000. A portion of the line of credit was used to repay the
Company's existing revolving credit facility with Wells Fargo Bank, which
expired on September 2, 2002; the balance will be used as needed for working
capital. The term loan represents the remaining balance on the Company's
purchase of its corporate office building and is secured by a mortgage on the
property. The Company paid a restructuring fee of $36,667 to Wells Fargo Bank in
connection with the Agreement.

A summary of the terms of the Agreement follows. This summary does not
contain all of the information contained in the Agreement, which is attached to
this report as Exhibit 10.1 and incorporated herein by reference. This summary
is qualified in its entirety by reference to the full text of the Agreement and
other exhibits included with this report.

Under the terms of the Agreement, the Company's total outstanding
borrowings, to a maximum of $11 million, may not at any time exceed an aggregate
of (i) 85% of the Company's eligible billed accounts receivable, plus (ii) 65%
of the Company's eligible unbilled accounts receivable (not to exceed $2.5
million), plus (iii) 75% of the appraised value of the Company's real property
mortgaged to the Bank, minus amounts outstanding under the term loan. Advances
will bear interest at an annual rate of prime rate plus one percent. The
Agreement expires April 30, 2003. The provisions of the term loan were unchanged
by the Agreement and such term loan continues to bear interest at an annual rate
of 7.4%.

The revolving credit facility is secured by the Company's assets,
including, without limitation, its accounts receivable, equipment, intellectual
property, real property and bank deposits, and may be prepaid at anytime without
penalty.

Pursuant to the Agreement, the Company is required to maintain compliance
with the following financial covenants:

o a Current Ratio not less than 1.10 to 1.0 prior to December 31, 2002,
and not less than 1.15 to 1.0 as of December 31, 2002 and thereafter,
with "Current Ratio" defined as total current assets divided by total
current liabilities;

o EBITDA not less than negative $2,750,000 as of the quarter ending
September 30, 2002, not less than $850,000 as of quarter ending
December 31, 2002, and not less than $1,500,000 as of the quarter
ending March 31, 2003, measured on a trailing four-quarter basis, with
"EBITDA" defined as net profit before taxes, interest expense (net of
capitalized interest expense), depreciation expense and amortization
expense;



o Funded Debt to EBITDA Ratio not more than 7.0 to 1.0 as of December
31, 2002 and not more than 3.25 to 1.0 as of March 31, 2003, with
"Funded Debt" defined as all borrowed funds plus the amount of all
capitalized lease obligations of the Company and "Funded Debt to
EBITDA Ratio" defined as Funded Debt divided by EBITDA; and

o EBITDA Coverage Ratio not less than 0.75 to 1.0 as of December 31,
2002 and not less than 1.50 to 1.0 as of March 31, 2003, with "EBITDA
Coverage Ratio" defined as EBITDA divided by the aggregate of total
interest expense plus the prior period current maturity of long-term
debt and the prior period current maturity of subordinated debt.

In addition, under the Agreement, the Company may not, without Wells Fargo
Bank's prior consent, among other things, use proceeds from the revolving credit
facility other than for working capital, incur additional indebtedness, merge or
consolidate with any other entity, sell or otherwise dispose of a substantial
portion of the Company's assets, acquire all or substantially all of the assets
of any other entity in any transaction involving a purchase price of $5,000,000
or more, make any substantial change in the nature of the Company's business,
make any guaranty of, or otherwise become liable for, the indebtedness of
others, make any loans or other investments in other persons or entities, or
grant a security interest in its assets.

Item 7. Financial Statements, Pro Forma Financial Information, and Exhibits.

(c) The following exhibits are filed with this report:

10.1 Amended and Restated Credit Agreement dated as of September 2,
2002, between the Company and Wells Fargo Bank, National Association.

10.2 Revolving Line of Credit Note dated as of September 2, 2002, in
the amount of $11,000,000 issued to Wells Fargo Bank.

10.3 Security Agreement Equipment dated as of September 2, 2002,
executed in favor of Wells Fargo Bank.

10.4 Continuing Security Agreement Rights to Payment dated as of
September 2, 2002, executed in favor of Wells Fargo Bank.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

BARRETT BUSINESS SERVICES, INC.


Dated: September 4, 2002 By: /s/ Michael D. Mulholland
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Michael D. Mulholland
Vice President - Finance