FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
Exhibit 10.4
FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
This Amendment, dated as of September 26, 2006, is made by and among GLOBAL EMPLOYMENT
SOLUTIONS, INC., a Colorado corporation (“Global”), EXCELL PERSONNEL SERVICES CORPORATION, an
Illinois corporation (“Excell”), FRIENDLY ADVANCED SOFTWARE TECHNOLOGY, INC., a New York
corporation (“Friendly”), TEMPORARY PLACEMENT SERVICE, INC., f/k/a Xxxxxxx & Associates, Inc. and
successor by merger to Temporary Placement Service, Inc., a Georgia corporation (“TPS”),
SOUTHEASTERN STAFFING, INC., a Florida corporation (“Southeastern”), SOUTHEASTERN PERSONNEL
MANAGEMENT, INC., a Florida corporation (“SPM”), MAIN LINE PERSONNEL SERVICES, INC., a Pennsylvania
corporation (“Main Line”), BAY HR, Inc., a Florida corporation (“BHR”) and SOUTHEASTERN GEORGIA HR,
INC., a Georgia corporation (“SGHR”), SOUTHEASTERN STAFFING II, INC., a Florida corporation
(“SEII”), SOUTHEASTERN STAFFING III, INC., a Florida corporation (“SEIII”), SOUTHEASTERN STAFFING
IV, INC., a Florida corporation (“SEIV”), SOUTHEASTERN STAFFING V, INC., a Florida corporation
(“SEV”), and SOUTHEASTERN STAFFING VI, INC., a Florida corporation (“SEVI”) (Global, Excell,
Friendly, TPS, Southeastern, SPM, Main Line, BHR, SGHR, SEII, SEIII, SEIV, SEV and SEVI are each
referred to herein as a “Borrower” and collectively as the “Borrowers”), and XXXXX FARGO BANK,
NATIONAL ASSOCIATION (“Lender”), acting through its Xxxxx Fargo Business Credit operating division.
The Borrowers and the Lender are parties to an Amended and Restated Credit and Security
Agreement dated as of July 24, 2006 (the “Credit Agreement”). Capitalized terms used in these
recitals have the meanings given to them in the Credit Agreement unless otherwise specified.
The Borrowers have requested that certain amendments be made to the Credit Agreement, which
the Lender is willing to make pursuant to the terms and conditions set forth herein.
”(i) (A) That portion of Accounts, other than (I) during the period from September 26,
2006 to and including November 13, 2006, Accounts owed by Total Logistics and (II) Accounts
owed to Southeastern, unpaid 90 days or more after the invoice date, (B) that portion of
Accounts owed to Southeastern unpaid 14 days or more after the invoice date and (C) during
the period from September 26, 2006 to and
including November 13, 2006, that portion of Accounts owed by Total Logistics, unpaid
120 days or more after the invoice date;”
2. Section 6.2(d) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
”(d) Minimum Availability. At all times after March 31, 2007, the average monthly
Availability, with respect to all Borrowers on a consolidated basis, measured on the last
day of each month, shall exceed $2,000,000.”
2
(a) The Acknowledgment and Agreement of Guarantor set forth at the end of this Amendment, duly
executed by each Guarantor.
(b) A Certificate of an Officer of each Borrower certifying as to (i) the resolutions of the
board of directors of such Borrower approving the execution and delivery of this Amendment, (ii)
the fact that the articles of incorporation and bylaws of such Borrower, which were previously
certified and delivered to the Lender pursuant to a Certificate of Authority of an authorized
Officer of such Borrower continue in full force and effect and have not been amended or otherwise
modified except as set forth in the Certificate to be delivered, and (iii) certifying that the
officers and agents of such Borrower who have been previously certified to the Lender, pursuant to
a Certificate of Authority of an authorized Officer of such Borrower, as being authorized to sign
and to act on behalf of such Borrower continue to be so authorized or setting forth the sample
signatures of each of the officers and agents of such Borrower authorized to execute and deliver
this Amendment and all other documents, agreements and certificates on behalf of such Borrower.
(c) An Affidavit Regarding Out-of-State Execution of Credit and Security Agreement and Notes
(for Florida Borrowers);
(d) Evidence of the repayment of Subordinated Debt by the Borrowers or the Public Parent in an
aggregate amount of up to $5,000,000 on the terms and conditions previously provided to the Lender
by the Borrowers;
(e) Payment of the fee described in Paragraph 6; and
(f) Such other matters as the Lender may require.
(a) Each Borrower has all requisite power and authority to execute this Amendment and all
other agreements, instruments and documents related hereto and to perform all of its obligations
hereunder and thereunder, and this Amendment and all other agreements, instruments and documents
related hereto have been duly executed and delivered by it and constitutes the legal, valid and
binding obligation of it, enforceable in accordance with its terms.
(b) The execution, delivery and performance by each Borrower of this Amendment and all other
agreements, instruments and documents related hereto to which such Borrower is a party have been
duly authorized by all necessary corporate action and do not
3
(i) require any authorization, consent or approval by any governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any
law, rule or regulation or of any order, writ, injunction or decree presently in effect, having
applicability to such Borrower, or the articles of incorporation or by-laws of such Borrower, or
(iii) result in a breach of or constitute a default under any indenture or loan or credit agreement
or any other agreement, lease or instrument to which such Borrower is a party or by which it or its
properties may be bound or affected.
(c) This Amendment and all other agreements, instruments and documents related hereto were
signed, executed, and delivered by the Borrowers in Colorado.
(d) All of the representations and warranties contained in Article V of the Credit Agreement
are correct on and as of the date hereof as though made on and as of such date, except to the
extent that such representations and warranties relate solely to an earlier date.
(e) The Borrowers have delivered to each Subordinated Creditor a copy of this Amendment and
all other agreements, instruments and documents requested by such Persons.
4
reasonable fees and disbursements of legal counsel. Without limiting the generality of the
foregoing, each Borrower specifically agrees to pay all fees and disbursements of counsel to the
Lender for the services performed by such counsel in connection with the preparation of this
Amendment and the documents and instruments incidental hereto. Each Borrower hereby agrees that
the Lender may, at any time or from time to time in its sole discretion and without further
authorization by such Borrower, make a loan to such Borrower under the Credit Agreement, or apply
the proceeds of any loan, for the purpose of paying any such fees, disbursements, costs and
expenses and the fee required under Paragraph 6 hereof.
[The remainder of this page intentionally left blank.]
5
XXXXX FARGO BANK, N.A., acting through its XXXXX FARGO BUSINESS CREDIT operating division. | GLOBAL EMPLOYMENT SOLUTIONS, INC. | |||||
By:
|
/s/ Xxxxxx X. Xxxxx | By: | /s/ Xxxxxx Xxxxx | |||
Name:
|
Xxxxxx X. Xxxxx | Name: | Xxxxxx Xxxxx | |||
Its:
|
Vice President | Its: | Chief Executive Officer and President | |||
SOUTHEASTERN STAFFING, INC. | EXCELL PERSONNEL SERVICES CORPORATION | |||||
By:
|
/s/ Xxxxxx Xxxxx | By: | /s/ Xxxxxx Xxxxx | |||
Name:
|
Xxxxxx Xxxxx | Name: | Xxxxxx Xxxxx | |||
Its:
|
Executive Vice President | Its: | Executive Vice President | |||
MAIN LINE PERSONNEL SERVICES, INC. | FRIENDLY ADVANCED SOFTWARE TECHNOLOGY, INC. | |||||
By:
|
/s/ Xxxxxx Xxxxx | By: | /s/ Xxxxxx Xxxxx | |||
Name: Its: |
Xxxxxx Xxxxx Executive Vice President |
Name: Its: |
Xxxxxx Xxxxx Executive Vice President |
|||
BAY HR, INC. | TEMPORARY PLACEMENT SERVICE, INC., f/k/a Xxxxxxx & Associates, Inc. and successor by merger to Temporary Placement Service, Inc. | |||||
By:
|
/s/ Xxxxxx Xxxxx | By: | /s/ Xxxxxx Xxxxx | |||
Name: Its: |
Xxxxxx Xxxxx Executive Vice President |
Name: Its: |
Xxxxxx Xxxxx Executive Vice President |
|||
SOUTHEASTERN GEORGIA HR, INC. | SOUTHEASTERN PERSONNEL MANAGEMENT, INC. | |||||
By:
|
/s/ Xxxxxx Xxxxx | By: | /s/ Xxxxxx Xxxxx | |||
Name: Its: |
Xxxxxx Xxxxx Executive Vice President |
Name: Its: |
Xxxxxx Xxxxx Executive Vice President |
6
SOUTHEASTERN STAFFING II, INC. | SOUTHEASTERN STAFFING III, INC. | |||||
By:
|
/s/ Xxxxxx Xxxxx | By: | /s/ Xxxxxx Xxxxx | |||
Name: Its: |
Xxxxxx Xxxxx Executive Vice President |
Name: Its: |
Xxxxxx Xxxxx Executive Vice President |
|||
SOUTHEASTERN STAFFING IV, INC. | SOUTHEASTERN STAFFING V, INC. | |||||
By:
|
/s/ Xxxxxx Xxxxx | By: | /s/ Xxxxxx Xxxxx | |||
Name: Its: |
Xxxxxx Xxxxx Executive Vice President |
Name: Its: |
Xxxxxx Xxxxx Executive Vice President |
|||
SOUTHEASTERN STAFFING VI, INC. | ||||||
By:
|
/s/ Xxxxxx Xxxxx | |||||
Name: Its: |
Xxxxxx Xxxxx Executive Vice President |
7
ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR
The undersigned, a guarantor of the indebtedness of GLOBAL EMPLOYMENT SOLUTIONS, INC.,
a Colorado corporation (“Global”), EXCELL PERSONNEL SERVICES CORPORATION, an Illinois
corporation (“Excell”), FRIENDLY ADVANCED SOFTWARE TECHNOLOGY, INC., a New York corporation
(“Friendly”), TEMPORARY PLACEMENT SERVICE, INC., f/k/a Xxxxxxx & Associates, Inc. and
successor by merger to Temporary Placement Service, Inc., a Georgia corporation (“TPS”),
SOUTHEASTERN STAFFING, INC., a Florida corporation (“Southeastern”), SOUTHEASTERN PERSONNEL
MANAGEMENT, INC., a Florida corporation (“SPM”), MAIN LINE PERSONNEL SERVICES, INC., a
Pennsylvania corporation (“Main Line”), BAY HR, Inc., a Florida corporation (“BHR”) and
SOUTHEASTERN GEORGIA HR, INC., a Georgia corporation (“SGHR”), SOUTHEASTERN STAFFING II,
INC., a Florida corporation (“SEII”), SOUTHEASTERN STAFFING III, INC., a Florida corporation
(“SEIII”), SOUTHEASTERN STAFFING IV, INC., a Florida corporation (“SEIV”), SOUTHEASTERN
STAFFING V, INC., a Florida corporation (“SEV”), and SOUTHEASTERN STAFFING VI, INC., a
Florida corporation (“SEVI”) (Global, Excell, Friendly, TPS, Southeastern, SPM, Main Line,
BHR, SGHR, SEII, SEIII, SEIV, SEV and SEVI are each referred to herein as a “Borrower” and
collectively as the “Borrowers”), to XXXXX FARGO BANK, NATIONAL ASSOCIATION (the “Lender”),
acting through its Xxxxx Fargo Business Credit operating division pursuant to a Guaranty
dated as of March 31, 2006 (as amended, the “Guaranty”), hereby (i) acknowledges receipt of
the foregoing Amendment; (ii) consents to the terms (including without limitation the
release set forth in Paragraph 12 of the Amendment) and execution thereof; (iii) reaffirms
all obligations to the Lender pursuant to the terms of the Guaranty; and (iv) acknowledges
that the Lender may amend, restate, extend, renew or otherwise modify the Credit Agreement
and any indebtedness or agreement of any Borrower, or enter into any agreement or extend
additional or other credit accommodations, without notifying or obtaining the consent of the
undersigned and without impairing the liability of the undersigned under the Guaranty for
all of the Borrowers’ present and future indebtedness to the Lender.
GLOBAL EMPLOYMENT HOLDINGS, INC. |
||||
By: | /s/ Xxxxxx Xxxxx | |||
Name: | Xxxxxx Xxxxx | |||
Its: Chief Executive Officer and President | ||||
8