EXHIBIT 10.21
AMENDMENT NO. 6 TO LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 6 dated as of May 10, 2002 to LOAN AND SECURITY
AGREEMENT dated as of December 14, 2000 among COMFORCE CORPORATION, COMFORCE
OPERATING, INC. (the "Holding Companies"), certain direct and indirect
subsidiaries of the Holding Companies and UNIFORCE SERVICES, INC. (the "Other
Loan Parties"), LABFORCE SERVICES OF AMERICA, INC., a New York corporation,
COMFORCE CODING SERVICES, INC., a New York corporation, BXI NET, INC., a
California corporation and COMFORCE P-T-P SERVICES, INC., a New York corporation
(the "New Loan Parties"), the Lenders whose signatures appear below,
TRANSAMERICA BUSINESS CAPITAL CORPORATION (as successor to TRANSAMERICA BUSINESS
CREDIT CORPORATION), as Co-Agent (the "Co-Agent"), THE CIT GROUP/BUSINESS
CREDIT, INC., as Collateral Agent (the "Collateral Agent") and IBJ WHITEHALL
BUSINESS CREDIT CORPORATION, as Administrative Agent for the benefit of itself
and the Lenders (the "Administrative Agent").
PRELIMINARY STATEMENT
(1) The Holding Companies, the Other Loan Parties, the Co-Agent, the
Collateral Agent, the Administrative Agent, and the Lenders (as
defined therein) have entered into a Loan and Security Agreement dated
as of December 14, 2000, as amended by Amendment No. 1 thereto dated
as of January 5, 2001, Amendment No. 2 thereto dated as of March 5,
2001, Amendment No. 3 thereto dated as of September 21, 2001 and
Amendments No. 4 and No. 5 thereto each dated as of December 7, 2001
(the "Original Loan and Security Agreement"; terms defined in the
Original Loan and Security Agreement and not otherwise defined herein
shall have the meanings assigned thereto in the Original Loan and
Security Agreement).
(2) The Loan Parties, and Lenders desire to amend the Original Loan and
Security Agreement as provided herein.
NOW, THEREFORE, in consideration of the premises set forth herein, the
Loan Parties and the Lenders hereby agree as follows:
1. Amendments. The Original Loan and Security Agreement is, subject to
the satisfaction of the conditions referred to below, amended as
follows:
(a) paragraph (3) of the preamble to the Original Loan and Security
Agreement is amended by replacing "LABFORCE OF AMERICA, INC."
appearing therein with "COMFORCE TECHNICAL NW, INC. (as successor
to LABFORCE OF AMERICA, INC.)."
(b) the following parties are added as "Borrowers" to paragraph (3)
of the preamble to the Original Loan and Security Agreement: BXI
NET, INC., a California corporation, COMFORCE CODING SERVICES,
INC., a New York corporation and LABFORCE SERVICES OF AMERICA,
INC., a New York corporation.
(c) the following party is added as an "Inactive Subsidiary" to
paragraph (4) of the preamble to the Original Loan and Security
Agreement: COMFORCE P-T-P SERVICES, INC., a New York corporation.
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(d) a new Schedule 2.8 is added immediately after Schedule 2.1(B) in
the list of Schedules to the Original Loan and Security Agreement
and to the Schedules attached to the Original Loan and Security
Agreement, such new schedule to be titled "Commercial Tort
Claims".
(e) the following definitions are added to subsection 1.1 of the
Original Loan and Security Agreement in their respective proper
alphabetical places:
"'Amendment No. 6' shall mean Amendment No. 6, dated as of May
10, 2002, of this Agreement."
"'Amendment No. 6 Effective Date' shall mean the date on which
the amendments contemplated by Amendment No. 6 become effective."
"'Deposit Accounts' shall mean all 'deposit accounts,' as such
term is defined in the UCC, now or hereafter held in the name of
any Loan Party, wherever located."
"'Documents' shall mean all 'documents,' as such term is defined
in the UCC, now owned or hereafter acquired by any Loan Party,
wherever located."
"'General Intangibles' shall mean all 'general intangibles,' as
such term is defined in the UCC, now owned or hereafter acquired
by any Loan Party, wherever located."
"'Letter-of-Credit Rights' shall mean 'letter-of-credit rights,'
as such term is defined in the UCC, now owned or hereafter
acquired by any Loan Party, including rights to payment or
performance under a letter of credit, whether or not such Loan
Party, as beneficiary, has demanded or is entitled to demand
payment or performance."
"'Software' shall mean all 'software,' as such term is defined in
the UCC, now owned or hereafter acquired by any Loan Party, other
than software embedded in any category of goods, including all
computer programs and all supporting information provided in
connection with a transaction related to any program."
"'Special Condition I Satisfaction Date' shall mean, the date, if
any, on which Administrative Agent is satisfied that the
following conditions have been satisfied in full on or prior to
the date 90 days after May 2, 2002:
(i) the Borrowers shall have delivered to the Lenders,
Administrative Agent and Collateral Agent a risk
acceptance criteria presentation, in form and substance
reasonably satisfactory to the Requisite Lenders and, in
any event, noting specific credit procedures that COI's
credit committee will follow in the analysis of
prospective and/or existing Account Sellers to ensure the
preservation of the Borrowers' overall credit quality in
relation to Purchased Accounts and such presentation,
credit policy and procedures shall have been reviewed by
a third party consultant satisfactory to Administrative
Agent, Collateral Agent and COI shall have implemented
any recommendations of such consultant;
(ii) Administrative Agent, Collateral Agent and the Lenders
shall have received from the Borrowers a detailed report
noting the amount of chargebacks outstanding for each
Account Debtor and Account Seller and the amount of cash
that has been applied to such chargebacks, and such
report shall be acceptable to the Requisite Lenders as
reviewed by the Lenders as part of the field examination
next occurring after the Amendment No. 6 Effective Date
and within 90 days following May 2, 2002; and
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(iii) Administrative Agent and Collateral Agent shall be
satisfied that the Borrowers have installed a separate
telephone line for verification of amounts owing by the
account debtors in respect of Purchased Accounts."
"'Special Condition II Satisfaction Date' shall mean the date, if
any, on which Administrative Agent is satisfied that the
following conditions have been satisfied in full:
(i) the Special Condition I Satisfaction Date shall have
occurred; and
(ii) in connection with the two field examinations of the
Borrowers conducted by the Lenders next following the
Amendment No. 6 Effective Date, the Requisite Lenders
shall have confirmed the continued adherence by the
Borrowers to the implementation of the credit policies
and procedures referred to in the definition of Special
Condition I Satisfaction Date and the continued existence
and use of the telephone line referred to in the
definition of Special Condition I Satisfaction Date."
"'Supporting Obligations' shall mean all 'supporting
obligations,' as such term is defined in the UCC, now owned or
hereafter acquired by any Loan Party, wherever located."
"'Uniform Commercial Code Jurisdiction' shall mean any
jurisdiction that has adopted all or substantially all of Article
9 as contained in the 2000 Official Text of the Uniform
Commercial Code, as recommended by the National Conference of
Commissioners on Uniform State Laws and the American Law
Institute, together with any subsequent amendments or
modifications to the Official Text."
(f) the definition of "Applicable Base Rate Margin" appearing in
subsection 1.1 of the Original Loan and Security Agreement is
amended by changing the percentages appearing therein as follows:
(i) .0% is increased to .25%, (ii) .25% is increased to .50%,
(iii) .50% is increased to .75%, (iv) .75% is increased to 1.00%
and (v) 1.00% is increased to 1.25%.
(g) the definition of "Applicable LIBOR Margin" appearing in
subsection 1.1 of the Original Loan and Security Agreement is
amended by changing the percentages appearing therein as follows:
(i) 1.75% is increased to 2.00%, (ii) 2.00% is increased to
2.25%, (iii) 2.25% is increased to 2.50%, (iv) 2.50% is increased
to 2.75% and (v) 2.75% is increased to 3.00%.
(h) the following definitions appearing in subsection 1.1 of the
Original Loan and Security Agreement are amended and restated as
follows:
"'Accounts' shall mean all 'accounts' (as defined in the UCC),
accounts receivable, contract rights and general intangibles
relating thereto, notes, drafts, health-care-insurance
receivables and other forms of obligations owed to or owned by
any Borrower arising or resulting from the sale of goods or the
rendering of services and including, in any event, all Purchased
Accounts and Service Fee Accounts."
"'Account Debtor' shall mean any Person who may become obligated
to any Loan Party under, with respect to, or on account of, an
Account, Chattel Paper or General Intangibles (including a
payment intangible)."
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"'Asset Disposition' shall mean the disposition, whether by sale,
lease, license, transfer, loss, damage, destruction, condemnation
or otherwise, of any or all of the assets of any Loan Party."
"'Chattel Paper' shall mean any 'chattel paper,' as such term is
defined in the UCC, including electronic chattel paper, now owned
or hereafter acquired by any Loan Party, wherever located."
"'Contract' shall mean all contracts, undertakings, general
intangibles or agreements (other than rights evidenced by Chattel
Paper, Documents, Instruments or Accounts) in or under which any
Loan Party may now or hereafter have any right, title or
interest."
(i) Clause (2) of subsection 2.1(A) of the Original Loan and Security
Agreement is amended and restated as follows:
"'Borrowing Base' means, as of any date of determination, an
amount equal to eighty-five per cent (85%) of Eligible Accounts
other than Eligible Accounts that are Purchased Accounts plus 80%
of Eligible Accounts that are Purchased Accounts less, until the
Special Condition I Satisfaction Date, a reserve equal to 2.5% of
Eligible Accounts that are Purchased Accounts, plus the lesser of
eighty-five per cent (85%) of (x) Unbilled Eligible Accounts and
(y) an amount equal to 8% of the sum of Unbilled Eligible
Accounts plus Eligible Accounts; less Landlord Waiver Reserves
and less such other reserves as Collateral Agent in its
reasonable discretion may elect to establish from time to time;
provided, however, that so long as any Senior Notes or Senior PIK
Notes are outstanding, the Borrowing Base shall not exceed the
maximum principal amount of Indebtedness permitted to be incurred
under section 4.3(b)(i) of the Senior Notes Indenture or section
4.3(b)(i) of the Senior Debentures Indenture. With reasonable
promptness following delivery by the Borrower Representative of
financial statements in accordance with subsection 5.1(A) in
respect of the month ending May 31, 2002, assuming that at such
time there shall be continuing no Default or Event of Default,
the Lenders in good faith shall consider whether the advance rate
against Eligible Accounts that are Purchased Accounts be
increased to 85%; provided, however, that no such increase shall
become effective without the consent of all Lenders and no Lender
shall have any obligation to consent to such increase."
(j) clause (21) of subsection 2.1(B) of the Original Loan and
Security Agreement is amended and restated as follows:
"Purchased Accounts and Service Fee Accounts (other than arising
from Licensing Agreements) which exceed, in the aggregate, 50%,
or from and after the Special Condition II Satisfaction Date,
55%, of otherwise Eligible Accounts;";
(k) subsection 2.8 of the Original Loan and Security Agreement is
amended and restated in its entirety as follows (it being
understood that all security interests granted under the Original
Loan and Security Agreement shall continue uninterrupted):
"2.8 Grant of Security Interest
To secure the payment and performance of the Obligations,
including all renewals, extensions, restructurings and
refinancings of any or all of the Obligations, each Loan Party
hereby grants to Administrative Agent, on behalf of Lenders and
on behalf of the Issuing Banks a continuing security interest,
lien and mortgage in and to all right, title
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and interest of such Loan Party in the following property of such
Loan Party (whether owned or consigned by or to, or leased from
or to such Loan Party), whether now owned or existing or
hereafter acquired or arising and regardless of where located
(all being collectively referred to as the 'Collateral'): (A)
Accounts, and all guaranties and security therefor, and all goods
and rights represented thereby or arising therefrom including the
rights of stoppage in transit, replevin and reclamation; (B)
Inventory; (C) General Intangibles (as defined in the UCC),
including payment intangibles, Software and the Account
Agreements; (D) Documents (as defined in the UCC) or other
receipts covering, evidencing or representing goods; (E)
Instruments (as defined in the UCC); (F) Chattel Paper (as
defined in the UCC); (G) Equipment; (H) all Letter-of-Credit
Rights; (I) all Deposit Accounts of each Loan Party maintained
with any bank or financial institution; (J) all money, cash or
cash equivalents and property of such Borrower and such Holding
Party, any Lender or any participant; (K) all books, records,
ledger cards, files, correspondence, computer programs, tapes,
disks and related data processing software that at any time
evidence or contain information relating to any of the property
described above or are otherwise necessary or helpful in the
collection thereof or realization thereon; (L) all goods; (M) all
Fixtures (as defined in the UCC); (N) all Investment Property (as
defined in the UCC) (other than any covered by the Pledge
Agreement); (O) all Supporting Obligations; (P) any commercial
tort claim listed and described in Schedule 2.8; and (Q) proceeds
of all or any of the property described above, including, without
limitation, the proceeds of any tort claims or any insurance
policies covering any of the above described property and all
accessions to, substitutions and replacements for and rents and
profits of, each of the foregoing."
(l) subsection 3.1(B) of the Original Loan and Security Agreement is
amended and restated in its entirety as follows:
"3.1(B) Security Interests
Administrative Agent and Lenders shall have received satisfactory
evidence that all security interests and liens granted to
Administrative Agent for the benefit of Lenders pursuant to this
Agreement or the other Loan Documents (including, without
limitation, a pledge of all present and future capital stock of
all Subsidiaries of CC) have been duly perfected and constitute
first priority liens on the Collateral, subject only to Permitted
Encumbrances. Such first priority liens shall be enforceable
against any and all creditors of and purchasers from any Loan
Party (other than purchasers and lessees of Inventory in the
ordinary course of business and non-exclusive licensees of
General Intangibles in the ordinary course of business). All
filings, recordations and searches necessary or desirable in
connection with such liens and security interests shall have been
duly made and all filing and recording fees and taxes shall have
been duly paid."
(m) subsection 4.8 of the Original Loan and Security Agreement is
amended and restated in its entirety as follows:
"4.8 Locations; Organizational Identification Number; FEIN
Schedule 4.8 sets forth each Loan Party's name as it appears in
official filings in the state of its incorporation or other
organization, the type of entity of each Loan Party, the
organizational identification number issued by each Loan Party's
state of incorporation or organization or a statement that no
such number has been issued, the location of each Loan Party's
principal place of business, chief executive office, the location
of each Loan
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Party's books and records, the location of all other offices of
such Loan Party and all Collateral locations, and such locations
are such Loan Party's sole locations for its business and the
Collateral. Each Loan Party's federal employer identification
number is also set forth on Schedule 4.8. No Loan Party will
change its jurisdiction of organization except in connection with
a merger permitted by subsection 7.6."
(n) subsection 4.9 of the Original Loan and Security Agreement is
amended and restated in its entirety as follows:
"4.9 Title to Properties; Liens
Each Loan Party has the power to transfer and has good,
sufficient and legal title to, subject to Permitted Encumbrances,
all its respective material properties and assets. Except for
Permitted Encumbrances, all such properties and assets are free
and clear of Liens. To the best knowledge of any Loan Party after
due inquiry, there are no actual, threatened or alleged defaults
with respect to any leases of real property under which any Loan
Party is lessee or lessor which could reasonably be expected to
have a Material Adverse Effect. Schedule 4.9 sets forth a
description of each lease of real property to which a Loan Party
is a lessee and each parcel of real property owned in fee by any
Loan Party."
(o) the first sentence of subsection 5.6(a) of the Original Loan and
Security Agreement is amended and restated in its entirety as
follows:
"As and when requested by Administrative Agent, Borrowers shall
establish lockboxes and blocked accounts (collectively, 'Blocked
Accounts') in Borrowers' names or, by separate agreement with
Administrative Agent, in Administrative Agent's name, with such
banks ('Collecting Banks') as are acceptable to Administrative
Agent (subject to irrevocable instructions acceptable to
Administrative Agent as hereinafter set forth and contained in
agreements in form and substance acceptable to Administrative
Agent among the applicable Borrowers and Collecting Banks and
Administrative Agent ('Blocked Account Agreement')) to which all
Account Debtors shall directly remit all payments on Accounts and
in which Borrowers will immediately deposit all payments
constituting proceeds of Collateral in the identical form in
which such payment was made, whether by cash or check."
(p) subsection 5.6(b) of the Original Loan and Security Agreement is
amended and restated in its entirety as follows:
"Borrowers shall, in addition to the matters referred to in (a)
above, as and when requested by Administrative Agent, establish a
cash management arrangement pursuant to such instruments and
documents and with such bank or banks as shall be satisfactory to
Administrative Agent. The arrangements referred to in (a) above
and the cash management arrangement referred to in this clause
(b) are herein referred to collectively as the 'Cash Dominion
Arrangement.'"
(q) subsection 5.12 of the Original Loan and Security Agreement is
amended and restated in its entirety as follows:
"5.12 Further Assurances
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(a) Each Loan Party shall, from time to time, execute such
guaranties, financing or continuation statements
(including financing or continuation statements in those
jurisdictions that are not Uniform Commercial Code
Jurisdictions), documents, security agreements, reports
and other documents or deliver to Administrative Agent
such instruments, certificates of title or other
documents as Administrative Agent at any time may
reasonably request to evidence, perfect or otherwise
implement the guaranties and security for repayment of
the Obligations provided for in the Loan Documents. Each
Loan Party shall obtain or use its best efforts to obtain
waivers or subordinations of Liens from landlords or
mortgagees, and each Loan Party shall in all instances
obtain signed acknowledgements of Administrative Agent's
Liens from bailees having possession of any Loan Party's
goods that such bailees hold for the benefit of
Administrative Agent. Unless waived by Administrative
Agent in writing (which waiver may be revoked), each
Borrower shall cause each Loan Party to enter into
control agreements, in form and substance satisfactory to
the Administrative Agent, to perfect the Lien of
Administrative Agent on Collateral consisting of
Letter-of Credit Rights, electronic chattel paper (as
defined in the UCC), uncertificated securities,
securities accounts and commodity accounts issued or held
by a securities intermediary or commodities intermediary,
and other Collateral of a type as to which perfection by
control is advisable or required under the UCC. With
respect to Letter-of-Credit Rights, each Loan Party that
is or becomes the beneficiary of a letter of credit shall
promptly, and in any event within two (2) Business Days
after becoming a beneficiary, notify Administrative Agent
thereof, and enter into a tri-party agreement with
Administrative Agent and the issuer and/or confirmation
bank with respect to Letter-of-Credit Rights assigning
such Letter-or-Credit Rights to Administrative Agent and
directing all payments thereunder to Administrative
Agent's Account, all in form and substance reasonably
satisfactory to Administrative Agent. Each Loan Party
shall obtain a Blocked Account Agreement or similar
agreement with each bank or financial institution holding
a Deposit Account for such Loan Party in accordance with
subsection 5.6. Each Loan Party shall also promptly, and
in any event within two (2) Business Days after the same
is acquired by it, notify Administrative Agent of any
commercial tort claims (as defined in the UCC) acquired
by it and unless otherwise consented by Administrative
Agent, such Loan Party shall enter into a supplement to
this Agreement, granting to Administrative Agent a Lien
on such commercial tort claim.
(b) Upon creation or acquisition thereof, each Loan Party
shall cause any newly created or acquired Subsidiary of a
Borrower or a Loan Party promptly to become a Borrower
and/or Corporate Guarantor hereunder (as specified by
Administrative Agent) and to grant to Administrative
Agent, on behalf of Lenders, perfected first priority
(subject only to Permitted Encumbrances) security
interests in all present and future real, personal and
mixed property of such Subsidiary, and shall cause all
present and future equity interests in such Subsidiary to
be pledged to Administrative Agent as security for the
Obligations on a first priority basis (subject only to
Permitted Encumbrances) and, to the extent requested by
Administrative Agent, and at Borrowers' sole cost and
expense, shall deliver or cause to be delivered to
Administrative Agent such legal opinion, certificates,
title insurance, evidence of UCC and other searches,
evidence of perfection of security interests,
environmental reports, appraisals (including real estate
appraisals contemplated by the Financial Institutions
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Reform, Recovery and Enforcement Act of 1989, as amended,
and the regulations promulgated thereunder), landlord
waivers, bailee letters and similar documents and
agreements, as Administrative Agent may have reasonably
requested. Nothing contained in this paragraph shall be
deemed to be a consent to the acquisition, establishment
or creation of any Subsidiary by any Loan Party.
(c) Each Loan Party hereby irrevocably authorizes the
Administrative Agent to file financing statements (and to
sign same where required by applicable law) with respect
to the Collateral without the signature of such Loan
Party that (a) indicate the Collateral (i) as all assets
of such Loan Party or words of similar effect, regardless
of whether any particular asset comprised in the
Collateral falls within the scope of Article 9 of the
UCC, or (ii) as being of an equal or lesser scope or with
greater detail, and (b) contain any other information
required by part 5 of Article 9 of the UCC for the
sufficiency or filing office acceptance of any financing
statement or amendment, including (i) whether such Loan
Party is an organization, the type of organization and
any organization identification number issued to such
Loan Party, and (ii) in the case of a financing statement
filed as a fixture filing or indicating Collateral as
as-extracted collateral or timber to be cut, a sufficient
description of real property to which the Collateral
relates. Each Loan Party agrees to furnish any such
information to the Administrative Agent promptly upon
request. Each Loan Party also ratifies its authorization
for the Administrative Agent to have filed any initial
financing statements or amendments thereto if filed prior
to the date hereof."
(r) subsection 5.14 of the Original Loan and Security Agreement is
amended and restated in its entirety as follows:
"5.14 Instruments; Chattel Paper
Except to the extent Indebtedness evidenced thereby does not
exceed $50,000 outstanding at any time in the aggregate, Loan
Parties will deliver and pledge to Administrative Agent all
notes, negotiable Documents, certificated securities (other than
any securities covered by a Pledge Agreement), Chattel Paper, and
instruments (as defined in the UCC) duly endorsed and accompanied
by duly executed instruments of transfer or assignment (including
stock powers, allonges or other instruments of transfer executed
in blank), all in form and substance satisfactory to
Administrative Agent. If the Loan Parties retain possession of
any Chattel Paper or Instruments with Administrative Agent's
consent, the Loan Parties will xxxx conspicuously all chattel
paper and instruments with a legend, in form and substance
satisfactory to Administrative Agent, indicating that such
chattel paper or instrument is subject to the security interest
of Administrative Agent, for the benefit of itself and Lenders.
Borrowers shall take all steps necessary to grant to
Administrative Agent control of all electronic chattel paper in
accordance with any provisions of the UCC regarding same which
may come into effect and all 'transferable records' as defined in
each of the Uniform Electronic Transactions Act and the
Electronic Signatures in Global and National Commerce Act."
Without limiting the generality of the foregoing, Loan Parties
will xxxx conspicuously all Account Agreements with the legend
referred to in the preceding paragraph."
(s) a new subsection 5.17 is added immediately after the end of
subsection 5.16, such new subsection to be titled "Authorized
Terminations" and to read as follows:
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"Upon payment and satisfaction in full in cash of all Obligations
hereunder and termination of the Commitments in accordance with
subsection 2.6, Administrative Agent shall deliver to the Loan
Parties for filing or authorize each Loan Party to prepare and
file termination statements, releases and other documents
necessary or appropriate to evidence the termination of the Liens
securing payment of the Obligations."
(t) subsection 6.2 of the Original Loan and Security Agreement is
amended and restated in its entirety as follows:
"6.2 Fixed Charge Coverage
The Loan Parties shall not suffer or permit Fixed Charge Coverage
for any period of four consecutive fiscal quarters ending on the
last day of (i) the fiscal quarter ending on March 31, 2002, to
be less than 1.10:1.00, (ii) the fiscal quarter ending on June
30, 2002, to be less than .75:1.00, (iii) the fiscal quarter
ending on September 30, 2002, to be less than .75:1.00 and (iv)
any fiscal quarter ending after September 30, 2002, to be less
than 1.00:1.00."
(u) subsection 7.3(A) of the Original Loan and Security Agreement is
amended by adding the phrase ", lease, license" appearing therein
immediately after the phrase "Sell, assign" appearing therein.
(v) a new subsection 7.6(D) is added immediately after the end of
subsection 7.6(C), such new subsection to read as follows:
"Reincorporate or reorganize itself under the laws of any
jurisdiction other than the jurisdiction in which it is
incorporated or organized as of the date hereof or change its
name."
(w) a new subsection 7.18 is added immediately after the end of
subsection 7.17, such new subsection to be titled "Financing
Statements; Amendments; Termination Statements" and to read as
follows:
"File any financing statement or amendment or termination
statement with respect to any financing statement without the
prior written consent of Administrative Agent, subject to each
Loan Party's rights under Section 9-509(d)(2) of the UCC."
(x) subsection 8.4(A) of the Original Loan and Security Agreement is
amended by (1) adding the phrase "lease, license, assign, give an
option or options to purchase or otherwise dispose of" appearing
therein immediately after the phrase "without notice except as
specified below, sell" appearing therein and (2) adding a new
paragraph at the end of such subsection to read as follows:
"To the extent that applicable law imposes duties on the Agent to
exercise remedies in a commercially reasonable manner, each Loan
Party acknowledges and agrees that it is not commercially
unreasonable for the Agent (i) to fail to incur expenses
reasonably deemed significant by the Agent to prepare the
Collateral for disposition or otherwise to complete raw material
or work in process into finished goods or other finished products
for disposition, (ii) to fail to obtain third party consents for
access to Collateral to be disposed of, or to obtain or, if not
required by other law, to fail to obtain governmental or third
party consents for the collection or disposition of Collateral to
be collected or disposed of, (iii) to fail to exercise collection
remedies against Account Debtors or other
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Persons obligated on the Collateral or to remove Liens on or any
adverse claims against the Collateral, (iv) to exercise
collection remedies against Account Debtors and other Persons
obligated on the Collateral directly or through the use of
collection agencies and other collection specialists, (v) to
advertise dispositions of Collateral through publications or
media of general circulation, whether or not the Collateral is of
a specialized nature, (vi) to contact other Persons, whether or
not in the same business as the Loan Party, for expressions of
interest in acquiring all or any portion of such Collateral,
(vii) to hire one or more professional auctioneers to assist in
the disposition of Collateral, whether or not the Collateral is
of a specialized nature, (viii) to dispose of Collateral by
utilizing internet sites that provide for the auction of assets
of the types included in the Collateral or that have the
reasonable capacity of doing so, or that match buyers and sellers
of assets, (ix) to dispose of assets in wholesale rather than
retail markets, (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance
or credit enhancements to insure the Agent against risks of loss,
collection or disposition of Collateral or to provide to the
Agent a guaranteed return from the collection or disposition of
Collateral, or (xii) to the extent deemed appropriate by the
Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Agent
in the collection or disposition of any of the Collateral. Each
Loan Party acknowledges that the purpose of this paragraph under
this subsection 8.4(A) is to provide non-exhaustive indications
of what actions or omissions by the Agent would not be
commercially unreasonable in the Agent's exercise of remedies
against the Collateral and that other actions or omissions by the
Agent shall not be deemed commercially unreasonable solely on
account of not being indicated in this paragraph of this
subsection 8.4(A). Without limitation upon the foregoing, nothing
contained in this paragraph shall be construed to grant any
rights to any Loan Party or to impose any duties on any Agent
that would not have been granted or imposed by this Agreement or
by applicable law in the absence of this paragraph."
(y) subsection 8.4(B) of the Original Loan and Security Agreement is
amended and restated in its entirety as follows:
"At any time after an Event of Default shall have occurred and be
continuing (or if any rights of set-off (other than set-off
against an Account arising under the contract giving rise to the
same Account) or contra accounts may be asserted with respect to
the following), (i) Collateral Agent may, without prior notice to
each Loan Party, notify Account Debtors and other Persons
obligated on the Collateral that Administrative Agent has a
security interest therein, and that payments shall be made
directly to Administrative Agent, for itself and the benefit of
Lenders, and (ii) each Loan Party shall, if so requested by
Collateral Agent, so notify Account Debtors and other Persons
obligated on the Collateral."
(z) the first sentence of subsection 8.4(C) of the Original Loan and
Security Agreement is amended and restated in its entirety as
follows:
"Collateral Agent may, if an Event of Default shall have occurred
and be continuing, in Collateral Agent's own name or in the name
of a Loan Party, communicate with Account Debtors, parties to
Contracts, obligors in respect of Instruments and obligors in
respect of Chattel Paper and/or payment intangibles to verify
with such Persons, to Collateral Agent's satisfaction, the
existence, amount and terms of any such Accounts, Contracts,
Instruments or Chattel Paper and/or payment intangibles."
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(aa) subsection 8.5 of the Original Loan and Security Agreement is
amended and restated in its entirety as follows:
"8.5 Appointment of Attorney-in-Fact
Each Loan Party hereby constitutes and appoints each Agent as
such Loan Party's attorney-in-fact with full authority in the
place and stead of such Loan Party and in the name of such Loan
Party, any Agent or otherwise, from time to time in such Agent's
discretion while an Event of Default is continuing to take any
action and to execute any instrument that such Agent may deem
necessary or advisable to accomplish the purposes of this
Agreement, including: (a) to ask, demand, collect, xxx for,
recover, compound, receive and give acquittance and receipts for
moneys due and to become due under or in respect of any of the
Collateral; (b) to adjust, settle or compromise the amount or
payment of any Account, or release wholly or partly any customer
or obligor thereunder or allow any credit or discount thereon;
(c) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with
clause (a) above; (d) to file any claims or take any action or
institute any proceedings that such Agent may deem necessary or
desirable for the collection of any of the Collateral or
otherwise to enforce the rights of such Agent and Lenders with
respect to any of the Collateral; and (e) to sign and endorse any
invoices, freight or express bills, bills of lading, storage or
warehouse receipts, assignments, verifications and notices in
connection with Accounts and other documents relating to the
Collateral. Regardless of whether an Event of Default has
occurred or is continuing, each Loan Party that is a party hereto
authorizes Administrative Agent to file financing statements
describing Collateral of such Loan Party with or without the
signature of the Loan Party, or to file a photocopy of this
Agreement in substitution for a financing statement, as
Administrative Agent may deem appropriate and to execute in such
Loan Party's name such financing statements and amendments
thereto and continuation statements which may require the Loan
Party's signature. The appointment of Agents as each Loan Party's
attorney and Agents' rights and powers are coupled with an
interest and are irrevocable until payment in full and complete
performance of all of the Obligations."
(bb) subsection 8.6(B) of the Original Loan and Security Agreement is
amended and restated in its entirety as follows:
"It is expressly agreed by each Loan Party that, anything herein
to the contrary notwithstanding, each Loan Party shall remain
liable in respect of the Collateral and all other agreements to
which it is a party or by which it is bound relating to the
Collateral to observe and perform all the conditions and
obligations to be observed and performed by it thereunder.
Neither any Agent nor any Lender shall have any obligation or
liability under any Contract by reason of or arising out of this
Agreement or the granting herein of a Lien thereon or the receipt
by any Agent or any Lender of any payment relating to any
Contract pursuant hereto. Neither any Agent nor any Lender shall
be required or obligated in any manner to perform or fulfill any
of the obligations of each Loan Party in respect of the
Collateral, or to make any payment, or to make any inquiry as to
the nature or the sufficiency of any payment received by it or
the sufficiency of any performance by any party in respect of the
Collateral, or to present or file any claims, or to take any
action to collect or enforce any performance or the payment of
any amounts which may have been assigned to it or to which it may
be entitled at any time or times."
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2. Waivers.
(a) Effective on the Effective Date, as hereinafter defined, the
Requisite Lenders waive any Default or Event of Default arising
by virtue of any failure by the Loan Parties to comply with the
covenant set forth in subsection 6.2 for the period of four
consecutive fiscal quarters ending on the last day of the fiscal
quarter ending on March 31, 2002. Such waiver shall pertain only
to such covenant for such fiscal quarter and shall not entitle
any Loan Party to any other waiver.
(b) Effective on the Effective Date, as hereinafter defined, the
Requisite Lenders waive any Default or Event of Default arising
by virtue of failure by the Loan Parties to comply with the
covenant set forth in subsection 7.12 only to the extent that
non-compliance arises from the creation of the New Loan Parties;
provided, however, that the waiver contained in this paragraph
(b) shall cease and be of no further force or effect from and
after the date 45 days following the Effective Date, as
hereinafter defined, unless on or prior to such date the Loan
Parties shall have complied with the requirements of paragraph
(c) of this Section 2. Each New Loan Party hereby (i) agrees that
it is a Corporate Guarantor, a Loan Party and, except in the case
of COMFORCE P-T-P Services, Inc., a Borrower, in each case, under
the terms of the Original Loan and Security Agreement as amended
by Amendment No. 6 (and as it may hereafter be amended), (ii)
acknowledges that it is unconditionally and jointly and severally
obligated for all Obligations of the Loan Parties heretofore
incurred under the Original Loan and Security Agreement or that
may hereafter be incurred under the Original Loan and Security
Agreement as amended by this Amendment No. 6 and as it may
subsequently be amended as a Corporate Guarantor and, except in
the case of COMFORCE P-T-P Services, Inc., as a Borrower, (iii)
makes, as to itself and as of the date hereof, all
representations and warranties of a Loan Party contained in the
Original Loan and Security Agreement and (iv) agrees to cause
each of the covenants contained in paragraph (c) of this Section
2 to be performed on or before the date 45 days following the
Effective Date, as hereinafter defined. The waiver contained in
this paragraph (b) shall apply only to the failure to comply with
subsection 7.12 with respect to the creation of the New Loan
Parties and shall not entitle any Loan Party to any other waiver.
(c) In connection with such waiver, on or before the date 45 days
following the Effective Date, as hereinafter defined, the Loan
Parties shall (A) deliver to the Administrative Agent for each
New Loan Party, (i) incumbency certificates, certified as of a
recent date by such party's corporate secretary or an assistant
secretary, (ii) resolutions of the Board of Directors authorizing
and approving the execution, delivery and performance of this
Amendment No. 6 consummation of the transactions contemplated
hereby, certified as of a recent date by such party's corporate
secretary or assistant secretary as being in full force and
effect without modification or amendment, (iii) certified copies
of the certificate or articles of incorporation together with
good standing certificates from the state of its incorporation
and (iv) a copy of the bylaws certified as of a recent date by
its corporate secretary or assistant secretary as being in full
force and effect without modification or amendment, in the case
of each of clauses (i) and (ii), in form and substance
satisfactory to the Administrative Agent, (B) deliver a legal
opinion from independent counsel to the New Loan Parties in form
and substance satisfactory to the Administrative Agent as to such
matters in connection with the execution, delivery performance by
the New Loan Parties of this Amendment No. 6 and the pledge of
stock referred to below as the Administrative Agent may
reasonably request and (C) pledge to the Administrative Agent
pursuant to the Pledge Agreement all issued and outstanding
capital stock of the New Loan Parties and all other equity
interests, if any, therein, deliver to the Administrative Agent
all certificates evidencing such capital stock and other equity
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interests endorsed in blank or accompanied by stock powers
signed, undated and left blank as to the transferee and caused
the Pledge Agreement to be amended (in form and substance
satisfactory to the Administrative Agent) to accommodate such
pledge.
3. Representations and Warranties. Each Loan Party and New Loan Party
represents and warrants (which representations and warranties shall
survive the execution and delivery hereof) to the Lenders that:
(a) no consent of any other person, including, without limitation,
shareholders or creditors of any Loan Party or New Loan Party is
required to authorize, or is otherwise required in connection
with the execution, delivery and performance of this Amendment
No. 6.
(b) this Amendment No. 6 has been duly executed and delivered by a
duly authorized officer of each Loan Party and New Loan Party,
and constitutes the legal, valid and binding obligations of such
Loan Party or New Loan Party, enforceable against such party in
accordance with its terms, except as enforcement thereof may be
subject to the effect of any applicable (i) bankruptcy,
insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally and (ii) general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law).
(c) the execution, delivery and performance of this Amendment No. 6
will not violate any law, statute or regulation applicable to any
Loan Party or New Loan Party, or any order or decree of any court
or governmental instrumentality applicable to such company, or
conflict with, or result in the breach of, or constitute a
default under any contractual obligation of such company,
including the Loan Documents.
4. Effectiveness. The foregoing amendments contained in this Amendment
No. 6 to the Original Loan and Security Agreement shall become
effective upon the satisfaction in full of the following conditions on
a date (the "Effective Date") on or before May 10, 2002:
(a) this Amendment No. 6 shall have been executed and delivered by
each Loan Party, New Loan Party and the Requisite Lenders;
(b) as of the Effective Date, there shall be continuing no Default or
Event of Default, other than (i) the failure of the Loan Parties
to comply with the covenant set forth in subsection 6.2 of the
Original Loan and Security Agreement for the period of four
consecutive fiscal quarters ending on the last day of the fiscal
quarter ending on March 31, 2002 and (ii) the failure of the Loan
Parties to comply with the covenant set forth in subsection 7.12
of the Original Loan and Security Agreement with respect to the
creation of the New Loan Parties;
(c) the representations made by the Loan Parties and New Loan Parties
herein and in the Loan Documents shall be true in all respects as
of the Effective Date (except as to any representation or
warranty limited to a specific earlier date);
(d) the Administrative Agent shall have received from CC, COI and USI
a fee of $50,000 for the pro rata account of the Lenders; and
(e) the Administrative Agent shall have received a legal opinion,
dated the Effective Date and addressed to the Administrative
Agent, the Collateral Agent and the Lenders, from independent
counsel to the Loan Parties and the New Loan Parties, as to the
Original
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Loan and Security Agreement, as amended by Amendment No. 6 and
the other Loan Documents, in form and substance satisfactory to
the Administrative Agent.
5. Special Condition I Non-Satisfaction Fee. If Borrowers fail to satisfy
in full the conditions specified in the definition of "Special
Condition I Satisfaction Date" on or prior to the date 90 days after
May 2, 2002, CC, COI and USI shall pay, as compensation to the Lenders
for their increased risk, to the Administrative Agent for the pro rata
account of the Lenders a fee in the amount of $25,000.
6. New or Replaced Schedules. Schedule 2.8 referred to in Section 1(d) of
this Amendment No. 6 shall be added to the Original Loan and Security
Agreement and is attached hereto as Exhibit A. Schedule 4.8 of the
Original Loan and Security Agreement shall be replaced with a new
Schedule 4.8 referred to in Section 1(m) of this Amendment No. 6 and
is attached hereto as Exhibit B.
7. Governing Law. This Amendment No. 6 to the Original Loan and Security
Agreement is being delivered in the State of New York and shall be
governed by and construed in accordance with the laws of the State of
New York.
8. Counterparts. This Amendment No. 6 to the Original Loan and Security
Agreement is being executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall
constitute but one and the same instrument.
9. Consent. By signing below, each Loan Party and New Loan Party consents
to the execution and delivery of this Amendment No. 6 by each other
Loan Party and each other New Loan Party and agrees that the
obligations of such Loan Party or such New Loan Party under the Loan
Documents continue in full force and effect.
10. Miscellaneous. All references in the Loan Documents to the "Loan and
Security Agreement" and in the Original Loan and Security Agreement to
"this Agreement," "hereof," "herein" or the like shall mean and refer
to the Original Loan and Security Agreement and this Amendment No. 6
(as well as by all subsequent amendments, restatements, modifications
and supplements thereto).
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Loan Parties, the New Loan Parties, the
Lenders, the Co-Agent, the Collateral Agent and the Administrative Agent have
caused this Amendment No. 6 to the Original Loan and Security Agreement to be
executed as of the day and year first written above.
Holding Parties: COMFORCE CORPORATION
COMFORCE OPERATING, INC.
Borrowers: BRENTWOOD OF CANADA, INC.
BRENTWOOD SERVICE GROUP, INC.
CAMELOT COMMUNICATIONS GROUP, INC.
CAMELOT CONTROL GROUP, INC.
CLINICAL LABFORCE OF AMERICA, INC.
COMFORCE INFORMATION TECHNOLOGIES, INC.
COMFORCE TECHNICAL ADMINISTRATIVE SERVICES, INC.
COMFORCE TECHNICAL NW, INC. (as successor to
LABFORCE OF AMERICA, INC.)
COMFORCE TECHNICAL SERVICES, INC.
COMFORCE TELECOM, INC.
XXXXX X., INC.
PRO SERVICES, INC.
PRO UNLIMITED, INC.
PRO UNLIMITED SERVICES, INC.
SUMTEC CORPORATION
TEMPORARY HELP INDUSTRY SERVICING COMPANY, INC.
THISCO OF CANADA, INC.
UNIFORCE PAYROLLING SERVICES, INC.
UNIFORCE PAYROLLING TRI-STATE INC.
UNIFORCE SERVICES, INC.
UNIFORCE STAFFING SERVICES, INC.
Inactive Subsidiaries: COMFORCE ACQUISITION 1 CORP.
New Loan Parties: BXI NET, INC.
COMFORCE CODING SERVICES, INC.
COMFORCE P-T-P SERVICES, INC.
LABFORCE SERVICES OF AMERICA, INC.
[Signatures Continued on Following Page]
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[SIGNATURE PAGE 1 OF 2 TO AMENDMENT NO. 6]
For each of the foregoing corporations:
By:
----------------------------------
Name:
Title:
IBJ WHITEHALL BUSINESS CREDIT
CORPORATION, as Administrative Agent and
Lender
By:
----------------------------------
Name:
Title:
Revolving Loan Commitment:
$17,272,727.00
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Collateral Agent and Lender
By:
----------------------------------
Name:
Title:
Revolving Loan Commitment:
$17,272,727.00
TRANSAMERICA BUSINESS CAPITAL
CORPORATION (as successor to
Transamerica Business Credit
Corporation), as Co-Agent and Lender
By:
----------------------------------
Name:
Title:
Revolving Loan Commitment:
$17,272,727.00
[Signatures Continued on Following Page]
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[SIGNATURE PAGE 2 OF 2 TO AMENDMENT NO. 6]
FLEET CAPITAL CORPORATION, as Lender
By:
----------------------------------
Name:
Title:
Revolving Loan Commitment:
$12,954,546.00
JPMORGAN CHASE BANK (formerly known as
The Chase Manhattan Bank), as Lender
By:
----------------------------------
Name:
Title:
Revolving Loan Commitment:
$12,954,546.00
LASALLE BUSINESS CREDIT, INC., as Lender
By:
----------------------------------
Name:
Title:
Revolving Loan Commitment:
$10,795,454.00
GUARANTY BUSINESS CREDIT
CORPORATION, as Lender
By:
----------------------------------
Name:
Title:
Revolving Loan Commitment:
$6,477,273.00
-17-
