FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND OTHER LOAN DOCUMENTS
Exhibit 10.16
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND OTHER LOAN DOCUMENTS
This FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND OTHER LOAN DOCUMENTS (this “Amendment”) is made as of the 21st day of November, 2011, by and among LTN STAFFING, LLC, a Delaware limited liability company (“LTN Staffing”), BG STAFFING, LLC, a Delaware limited liability company (“BG Staffing”), BG PERSONNEL SERVICES, LP, a Texas limited partnership (“BG Personnel Services”), BG PERSONNEL, LP, a Texas limited partnership (“BG Personnel”), and B G STAFF SERVICES INC., a Texas corporation (“B G Staff Services”, and together with LTN Staffing, BG Staffing, BG Personnel Services and BG Personnel, collectively, “Borrowers” and each a “Borrower”), and FIFTH THIRD BANK, an Ohio banking corporation, successor by merger with Fifth Third Bank, a Michigan banking corporation (“Lender”).
WHEREAS, Borrowers and Lender are parties to that certain Loan and Security Agreement dated as of May 24, 2010, as amended from time to time (as amended, and as it may be further amended, restated, modified or supplemented and in effect from time to time, the “Loan Agreement”);
NOW, THEREFORE, the parties hereto hereby agree as follows:
2. Amendments to Loan Agreement. The Loan Agreement is hereby amended as follows:
(a) by amending and restating each of the following definitions in Section 1.1 as follows:
“Debt Service” shall mean, for any period, the sum of (i) Cash Interest Expense for such period and the principal portion of Borrowers’ Total Debt payable during such period (excluding payments required to be made pursuant to Section 2.2(d) hereof), determined in accordance with GAAP, plus (ii) the aggregate amount of Earn Out Payments paid in cash by any Borrower for such period.
“Default Rate” shall mean a per annum rate of interest equal to the LIBOR Rate plus eight and one-half percent (8.5%) per annum.
“EBITDA” shall mean for any period, the consolidated net income of Borrowers, determined in accordance with GAAP consistently applied, plus (i) Interest Expense for such period, plus (ii) federal and state income taxes of Borrowers for such period, plus (iii) all depreciation and amortization of capitalized costs for such period, plus (iv) actual closing costs in an amount not to exceed $500,000 incurred by Borrowers in connection with closing the Extrinsic Purchase Transaction, provided that such closing costs are verified by Lender and consented to by Lender in its sole discretion.
“Earn Out Payments” shall mean, collectively, (i) those payments made or required to be made by LTN Staffing and BG Staffing pursuant to Section 1.8 of the Purchase Agreement; provided, however, the maximum amount of Earn Out Payments made shall not exceed $250,000.00 for each of the first two (2) full consecutive twelve (12) month periods commencing after May 24, 2010, and $500,000.00 in the aggregate, (ii) those payments made or required to be made by LTN Staffing pursuant to Section 1.6 of the JNA Purchase Agreement, and (iii) those payments made or required to be made by BG Staffing pursuant to Section 1.6 of the Extrinsic Purchase Agreement.
“Excess Cash Flow” shall mean, for any period, the remainder of (a) Borrowers’ EBITDA for such period plus (i) all Earn Out Payments made by any Borrower for such period to the extent treated as an expense, plus (ii) all management fees due to Taglich Brothers, Inc. and its affiliates which Borrowers have accrued but not paid, plus (iii) all other non-cash items, less (iv) all distributions made to the members, shareholders or partners of any Borrower (other than distributions to other Borrowers), less (v) federal and state income taxes paid by Borrowers for such period, less (vi) capital expenditures (other than capital expenditures financed with the proceeds of purchase money indebtedness or capital leases to the extent permitted under this Agreement), minus (b) the sum, without duplication, of (i) scheduled repayments of principal of the Term Loan made during such period, plus (ii) voluntary prepayments of the Term Loan made during such period, plus (iii) all income taxes paid in cash by Borrowers during such period, plus (iv) Cash Interest Expense of Borrowers during such period, plus (v) Earn Out Payments to the extent capitalized.
“Revolving Interest Rate” shall mean the LIBOR Rate plus the Applicable Margin.
| -2- |
“Revolving Loan Maturity Date” shall mean November 21, 2014, unless extended by Lender pursuant to any modification, extension or renewal note executed by Borrowers and accepted by Lender in its sole and absolute discretion in substitution for the Revolving Note.
“Senior Funded Indebtedness” shall mean all Debt of the Borrowers other than Subordinated Debt.
“Term Loan Commitment” shall mean Six Million and No/100 Dollars ($6,000,000.00).
“Term Loan Maturity Date” shall mean November 21, 2014, unless extended by Lender pursuant to any modification, extension or renewal note executed by Borrowers and accepted by Lender in its sole and absolute discretion in substitution for the Term Note.
(b) by inserting the following definitions to Section 1.1 in their respective proper alphabetical order:
“Applicable Margin” shall mean the rate per annum added to the LIBOR Rate to determine the Revolving Interest Rate as determined by the Senior Funded Indebtedness to EBITDA Ratio of Borrowers for the prior fiscal quarter, effective as of any Interest Rate Change Date, as set forth below:
| Senior Funded Indebtedness to EBITDA Ratio | Applicable Margin | |||
| ≥2.50 to 1.00 | 5.0 | % | ||
| >2.00 to 1.00 but <2.50 to 1.00 | 4.5 | % | ||
| ≤2.00 to 1.00 | 4.0 | % | ||
The Applicable Margin as of November 21, 2011 is 5.0%.
“Cash Interest Expense” shall mean, for any period, the aggregate amount of interest actually paid by Borrowers during such period in respect to Total Debt (including, without limitation, the interest portion, determined in accordance with GAAP, of all lease payments accrued during such period in respect of all leases which should have been or must be, in accordance with GAAP, recorded as capital leases).
“Clarkston” shall mean Clarkston-Potomac Group, Inc., a Delaware corporation.
| -3- |
“Debt Service Coverage Ratio” shall mean the ratio of (a) consolidated EBITDA plus (i) all Earn Out Payments made by any Borrower for such period to the extent treated as an expense, plus (ii) all management fees due to Taglich Brothers, Inc. and its affiliates which Borrowers have accrued but not paid, plus (iii) all other non-cash items, less (iv) all distributions made to the members, shareholders or partners of Borrowers (other than distributions to other Borrowers), less (v) federal and state income taxes paid by Borrowers for such period, less (vi) capital expenditures (other than capital expenditures financed with the proceeds of purchase money indebtedness or capital leases to the extent permitted under this Agreement), to (b) consolidated Debt Service.
“Extrinsic Purchase Agreement” shall mean that certain Asset Purchase Agreement dated as of November ___, 2011 by and among BG Staffing, Extrinsic, LLC, a Delaware limited liability company, Clarkston and Xxxxxx.
“Extrinsic Purchase Transaction” shall mean the purchase by BG Staffing of certain of the assets of and the assumption by BG Staffing of certain liabilities of Extrinsic, LLC, a Delaware limited liability company, pursuant to the terms of the Extrinsic Purchase Agreement.
“Interest Expense” shall mean, for any period, the aggregate amount of interest expense of Borrowers during such period, determined in accordance with GAAP.
“Interest Rate Change Date” shall mean the date two (2) Business Days after the delivery to Lender of the quarterly or year-end financial statements of Borrowers, which initial change date shall occur after the delivery to Lender of the financial statements of Borrowers for the fiscal year ending in December 2011.
“Xxxxxx” means Xxxxxxx Xxxxx Xxxxxx.
“Senior Funded Indebtedness to EBITDA Ratio” shall mean the ratio of (a) consolidated Senior Funded Indebtedness, to (b) consolidated EBITDA.
(c) by amending and restating Section 2.2(a) in its entirety to read as follows:
(a) Term Loan Commitment. Lender has heretofore made to Borrowers a term loan in the principal amount of $5,540,000.00, of which $3,982,000.00 is outstanding as of November 21, 2011 prior to the closing of the transactions contemplated on such date. On November 21, 2011, the amount of such term loan is being increased such that the amount outstanding as of November 21, 2011 after the closing of the transactions contemplated on such date is equal to the amount of the Term Loan Commitment. As of November 21, 2011, and after the closing of the transactions contemplated on such date, the Term Loan in the amount of the Term Loan Commitment (i) shall be deemed to be an obligation of and indebtedness of Borrowers, jointly and severally, (ii) shall be deemed to be outstanding under this Agreement, and (iii) shall be subject to all of the terms and conditions stated in this Agreement. The Term Loan may be prepaid in whole or in part at any time subject to Section 2.2(d), but shall be due in full on the Term Loan Maturity Date, unless the credit extended under the Term Loan is otherwise accelerated, terminated or extended as provided in this Agreement.
| -4- |
(d) by amending and restating Section 2.2(c) in its entirety to read as follows:
(c) Term Loan Principal Payments. The outstanding principal balance of the Term Loan shall be repaid as follows (i) equal monthly principal installments each in the amount of Eighty Thousand and No/100 Dollars ($80,000.00), together with an additional amount representing accrued and unpaid interest on the principal amount of the Term Loan outstanding as set forth above, beginning on January 1, 2012 and continuing on the first day of each month thereafter until and including December 1, 2012, and (ii) thereafter, equal monthly principal installments each in the amount of One Hundred Thousand and No/100 Dollars ($100,000.00), together with an additional amount representing accrued and unpaid interest on the principal amount of the Term Loan outstanding as set forth above, beginning on January 1, 2013 and continuing on the first day of each month thereafter, with a final payment of all outstanding principal and accrued interest due on the Term Loan Maturity Date. Principal amounts repaid on the Term Note may not be borrowed again.
(e) by amending and restating Section 2.2(d) in its entirety to read as follows:
(i) Concurrently with the receipt by any of the Borrowers of any Net Cash Proceeds from any Asset Disposition, in an amount equal to 100% of such Net Cash Proceeds.
(ii) Within ten (10) days after receipt by Borrowers of the audited financial statements each year (but in no event later than one hundred thirty (130) days after the end of each fiscal year), in an amount equal to 50% of Excess Cash Flow for such prior fiscal year; provided that if the Senior Funded Indebtedness to EBITDA Ratio as of the end of such prior fiscal year is less than 2.00 to 1.00, then such payment shall be in an amount equal to 25% of such Excess Cash Flow for the prior fiscal year.
All such prepayments shall be applied to the principal balance of the Term Loan and shall not reduce the amounts of future monthly installments.
| -5- |
(f) by deleting Section 2.10 in its entirety.
(g) by amending and restating Section 9.1 in its entirety to read as follows:
9.1 Debt. No Borrower shall, either directly or indirectly, create, assume, incur or have outstanding any Debt (including purchase money indebtedness), or become liable, whether as endorser, guarantor, surety or otherwise, for any debt or obligation of any other Person, except:
(i) the Obligations under this Agreement and the other Loan Documents;
(ii) obligations of such Borrower for Taxes, assessments, municipal or other governmental charges;
(iii) obligations of such Borrower for accounts payable, other than for money borrowed, incurred in the ordinary course of business;
(iv) Subordinated Debt, consisting of (A) 2007 Subordinated Debt in outstanding principal amount not to exceed $9,000,000, and (B) 2009 Subordinated Debt and 2010 Subordinated Debt in an aggregate amount not to exceed $500,000, and not repay at maturity more than $250,000 in aggregate principal amount of 2009 Subordinated Debt and 2010 Subordinated Debt. All such 2007, 2009 and 2010 Subordinated Debt shall be subject to the terms of the 2007 Subordination Agreement, the 2009 Subordination Agreement and the 2010 Subordination Agreement, as applicable, or such other subordination agreement acceptable to Lender in its sole discretion; and
(v) Rate Management Obligations incurred in favor of Lender or an Affiliate thereof for bona fide hedging purposes and not for speculation.
(h) by amending and restating Section 9.6 in its entirety to read as follows:
| -6- |
(i) by amending and restating Section 10.1 in its entirety to read as follows:
10.1 Debt Service Coverage. As of the end of each fiscal quarter of Borrowers for the four quarter period then ending, Borrowers shall not permit the Debt Service Coverage Ratio to be less than 1.20 to 1.00.
(j) by amending and restating Section 10.2 in its entirety to read as follows:
| -7- |
| Four Quarters Ended In: | Maximum Ratio | |
| March 2012 | 3.25 to 1.00 | |
| June 2012 | 2.75 to 1.00 | |
| September 2012 | 2.25 to 1.00 | |
| December 2012 | 2.00 to 1.00 | |
| March 2013 | 2.00 to 1.00 | |
| June 2013 | 2.00 to 1.00 | |
| September 2013 | 2.00 to 1.00 | |
| December 2013 and the end of each quarter ended thereafter | 1.50 to 1.00 |
| -8- |
In addition to the foregoing:
(a) LTN Staffing hereby confirms to Lender that LTN Staffing has granted to Lender a security interest in or Lien upon the Pledged Collateral (as defined in that certain Membership Interests Security Agreement dated as of May 24, 2010 by and between LTN Staffing and Lender (as amended, restated, modified or supplemented and in effect from time to time, the “LTN Staffing Membership Interests Security Agreement”)), to secure the Liabilities (as defined in the LTN Staffing Membership Interests Security Agreement), under and pursuant to the LTN Staffing Membership Interests Security Agreement. LTN Staffing hereby expressly agrees that the Lien on the Pledged Collateral shall secure all of the Liabilities (as defined in the LTN Staffing Membership Interests Security Agreement), including, without limitation, the Loans, and hereby reaffirms its grant of such security interest and Lien to Lender for such purpose in all respects.
(b) LTN Staffing hereby confirms to Lender that LTN Staffing has granted to Lender a security interest in or Lien upon the Pledged Collateral (as defined in that certain Partnership Interests Security Agreement dated as of May 24, 2010 by and between LTN Staffing and Lender (as amended, restated, modified or supplemented and in effect from time to time, the “LTN Staffing Partnership Interests Security Agreement”)), to secure the Liabilities (as defined in the LTN Staffing Partnership Interests Security Agreement), under and pursuant to the LTN Staffing Partnership Interests Security Agreement. LTN Staffing hereby expressly agrees that the Lien on the Pledged Collateral shall secure all of the Liabilities (as defined in the LTN Staffing Partnership Interests Security Agreement), including, without limitation, the Loans, and hereby reaffirms its grant of such security interest and Lien to Lender for such purpose in all respects.
(c) BG Staffing hereby confirms to Lender that BG Staffing has granted to Lender a security interest in or Lien upon the Pledged Collateral (as defined in that certain Partnership Interests Security Agreement dated as of May 24, 2010 by and between BG Staffing and Lender (as amended, restated, modified or supplemented and in effect from time to time, the “BG Staffing Partnership Interests Security Agreement”)), to secure the Liabilities (as defined in the BG Staffing Partnership Interests Security Agreement), under and pursuant to the BG Staffing Partnership Interests Security Agreement. LTN Staffing hereby expressly agrees that the Lien on the Pledged Collateral shall secure all of the Liabilities (as defined in the BG Staffing Partnership Interests Security Agreement), including, without limitation, the Loans, and hereby reaffirms its grant of such security interest and Lien to Lender for such purpose in all respects.
| -9- |
(d) LTN Staffing hereby confirms to Lender that LTN Staffing has granted to Lender a security interest in or Lien upon the Pledged Collateral (as defined in that certain Securities Pledge Agreement dated as of May 24, 2010 by and between LTN Staffing and Lender (as amended, restated, modified or supplemented and in effect from time to time, the “LTN Staffing Securities Pledge Agreement”)), to secure the Liabilities (as defined in the LTN Staffing Securities Pledge Agreement), under and pursuant to the LTN Staffing Securities Pledge Agreement. LTN Staffing hereby expressly agrees that the Lien on the Pledged Collateral shall secure all of the Liabilities (as defined in the LTN Staffing Securities Pledge Agreement), including, without limitation, the Loans, and hereby reaffirms its grant of such security interest and Lien to Lender for such purpose in all respects.
(a) This Amendment, duly authorized and fully executed by each Borrower and Lender, and the Consent and Ratification of Guaranty and the Consent and Ratification of Membership Interests Security Agreement, each attached hereto and made a part hereof, each duly authorized and fully executed by the parties thereto, shall have been delivered to Lender.
| -10- |
(b) The Fourth Amended and Restated Revolving Note, duly authorized and fully executed by each Borrower, shall have been delivered to Lender.
(c) The Third Amended and Restated Term Note, duly authorized and fully executed by each Borrower, shall have been delivered to Lender.
(d) A fully-executed copy of the Extrinsic Purchase Agreement, together with all other agreements, documents or instruments executed or to be delivered in connection with the Extrinsic Purchase Transaction, shall have been delivered to Lender.
(e) That certain Third Amendment to Subordination and Intercreditor Agreement dated as of even date herewith, duly authorized and fully executed by each of the 2007 Subordinated Creditors, shall have been delivered to Lender.
(f) That certain Sixth Amendment to the 2007 Subordinated Loan Documents, in form and substance acceptable to Lender, duly executed by each of the parties thereto, shall have been delivered to Lender.
(g) Borrowers shall have received not less than $4,400,000 of additional equity contributions (net of fees paid to Taglich Private Equity, LLC and its affiliates in connection therewith) and evidence thereof, in form and substance acceptable to Lender, shall have been delivered to Lender.
(h) The existing Debt under the 2007 Subordinated Loan Documents, the 2009 Subordinated Loan Documents and the 2010 Subordinated Loan Documents shall have converted to equity as follows: (i) in an amount sufficient to reduce the outstanding principal balance of Debt under the 2007 Subordinated Loan Documents to not more than $9,000,000.00, and (ii) in an amount sufficient to reduce the aggregate outstanding principal balance of Debt under the 2009 Subordinated Loan Documents and 2010 Subordinated Loan Documents to not more than $500,000.00, and evidence thereof, in form and substance acceptable to Lender, shall have been delivered to Lender.
(i) A Capital Contribution Agreement dated as of even date herewith by and among Taglich Private Equity, LLC, Borrowers and Lender, in form and substance acceptable to Lender, shall have been delivered to Lender.
(j) A copy of the Master Services Agreement between BG Staffing and Clarkston-Potomac Group, Inc. entered into in connection with the Extrinsic Purchase Transaction, duly executed by each of the parties thereto, in form and substance acceptable to Lender, shall have been delivered to Lender.
(k) An aged schedule of the Accounts of Extrinsic, listing the name and amount due from each Account Debtor and showing the aggregate amounts due from (a) 0-30 days, (b) 31-60 days, (c) 61-90 days and (d) more than 90 days, and certified as accurate by Extrinsic’s treasurer or chief financial officer, shall have been delivered to Lender.
(l) A Borrowing Base Certificate which includes the Accounts of Extrinsic shall have been delivered to Lender.
| -11- |
(m) Certificates of Insurance with respect to property and liability insurance of Borrowers, showing Lender as certificate holder, lenders loss payee with respect to property insurance, and showing Lender as certificate holder and additional insured with respect to liability insurance, together a lender’s loss payable endorsement, shall have been delivered to Lender.
(n) Resolutions shall have been adopted by Guarantor’s board of managers authorizing the execution, delivery and performance of the Consents and Ratifications to this Amendment, and a copy thereof, certified by a manager of Guarantor, together with a certificate of a manager of Guarantor stating that there have been no amendments, modifications or changes to Guarantor’s Certificate of Formation or Limited Liability Company Agreement since October 1, 2011, shall have been delivered to Lender.
(o) Resolutions shall have been adopted by LTN Staffing’s members authorizing the execution, delivery and performance of this Amendment, the Fourth Amended and Restated Revolving Note, the Third Amended and Restated Term Note and the other documents to be delivered in connection herewith, and a copy thereof, certified by a member of LTN Staffing, together with a certificate of a member of LTN Staffing stating that there have been no amendments, modifications or changes to LTN Staffing’s Certificate of Formation or Limited Liability Company Agreement since October 1, 2011, shall have been delivered to Lender.
(p) Resolutions shall have been adopted by BG Staffing’s members authorizing the execution, delivery and performance of this Amendment, the Fourth Amended and Restated Revolving Note, the Third Amended and Restated Term Note, the Extrinic Purchase Agreement and the other documents to be delivered in connection herewith, and a copy thereof, certified by a member of BG Staffing, together with a certificate of a member of BG Staffing stating that there have been no amendments, modifications or changes to BG Staffing’s Certificate of Formation or Limited Liability Company Agreement since October 1, 2011, shall have been delivered to Lender.
(q) Resolutions shall have been adopted by BG Staffing’s members authorizing the execution, delivery and performance of this Amendment, the Fourth Amended and Restated Revolving Note, the Third Amended and Restated Term Note and the other documents to be delivered in connection herewith, on behalf of and as the general partner of BG Personnel Services, certified by a member of BG Staffing, together with a certificate of a member of BG Staffing stating that there have been no amendments, modifications or changes to BG Personnel Services’ Certificate of Limited Partnership or Limited Partnership Agreement, or to BG Staffing’s Certificate of Formation or Limited Liability Company Agreement, in each case since October 1, 2011, shall have been delivered to Lender.
(r) Resolutions shall have been adopted by BG Staffing’s members authorizing the execution, delivery and performance of this Amendment, the Fourth Amended and Restated Revolving Note, the Third Amended and Restated Term Note and the other documents to be delivered in connection herewith, on behalf of and as the general partner of BG Personnel, certified by a member of BG Staffing, together with a certificate of a member of BG Staffing stating that there have been no amendments, modifications or changes to BG Personnel’s Certificate of Limited Partnership or Limited Partnership Agreement, or to BG Staffing’s Certificate of Formation or Limited Liability Company Agreement, in each case since October 1, 2011, shall have been delivered to Lender.
| -12- |
(s) Resolutions shall have been adopted by B G Staff Services’ Board of Directors authorizing the execution, delivery and performance of this Amendment, the Fourth Amended and Restated Revolving Note, the Third Amended and Restated Term Note and the other documents to be delivered in connection herewith, and a copy thereof, certified by the corporate secretary of B G Staff Services, together with a certificate of the corporate secretary of B G Staff Services stating that there have been no amendments, modifications or changes to B G Staff Services’ Articles of Incorporation or By-Laws since October 1, 2011, shall have been delivered to Lender.
(t) (i) An amendment fee in the amount of $30,000, (ii) a note processing fee with respect to the Revolving Loans in the amount of $900.00, and (ii) a note processing fee with respect to the Term Loan in the amount of $900.00, shall in each case have been paid by Borrowers to Lender.
(u) Each of the other conditions of borrowing set forth in Section 3 of the Loan Agreement (including, without limitation, Sections 3.2, 3.3, 3.4 and 3.5) shall have been met to the satisfaction of Lender.
(v) Such other documents, instruments or agreements as Lender may reasonably request in order to effectuate fully the transactions contemplated herein shall have been duly executed and delivered to Lender; provided, however that Borrowers shall have up to thirty (30) days following the date hereof to qualify BG Staffing to do business in the State of North Carolina and provide to the Lender and certificate or other satisfactory evidence of such qualification.
(b) Governing Law. This Amendment shall be a contract made under and governed by the laws of the State of Illinois, without regard to conflict of laws principles. Whenever possible, each provision of this Amendment shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Amendment shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Amendment.
| -13- |
[Remainder of page intentionally left blank; signature pages follow]
| -14- |
IN WITNESS WHEREOF, the parties have executed this Fourth Amendment to Loan and Security Agreement and Other Loan Documents as of the date first set forth above.
| BORROWERS: | ||
| LTN STAFFING, LLC, a Delaware limited liability company | ||
| By: | /s/ L. Xxxxx Xxxxx, Xx. | |
| Name: | L. Xxxxx Xxxxx, Xx. | |
| Title: | President and Chief Executive Officer | |
| BG STAFFING, LLC, a Delaware limited liability company | ||
| By: | LTN Staffing, LLC, a Delaware limited liability company | |
| Its: | Sole Member | |
| By: | /s/ L. Xxxxx Xxxxx, Xx. | ||
| Name: | L. Xxxxx Xxxxx, Xx. | ||
| Title: | President and Chief Executive Officer |
| BG PERSONNEL SERVICES, LP, a Texas limited partnership | ||
| By: | BG Staffing, LLC, a Delaware limited liability company | |
| Its: | General Partner | |
| By: | LTN Staffing, LLC, a Delaware limited liability company | ||
| Its: | Sole Member |
| By: | /s/ L. Xxxxx Xxxxx, Xx. | |||
| Name: | L. Xxxxx Xxxxx, Xx. | |||
| Title: | President and Chief Executive Officer |
| BG PERSONNEL, LP, a Texas limited partnership | ||
| By: | BG Staffing, LLC, a Delaware limited liability company | |
| Its: | General Partner | |
| By: | LTN Staffing, LLC, a Delaware limited liability company | ||
| Its: | Sole Member |
| By: | /s/ L. Xxxxx Xxxxx, Xx. | |||
| Name: | L. Xxxxx Xxxxx, Xx. | |||
| Title: | President and Chief Executive Officer |
| B G STAFF SERVICES INC., a Texas corporation | ||
| By: | /s/ L. Xxxxx Xxxxx, Xx. | |
| Name: | L. Xxxxx Xxxxx, Xx. | |
| Title: | President and Chief Executive Officer | |
| LENDER: | ||
| FIFTH THIRD BANK, an Ohio banking corporation, successor by merger with Fifth Third Bank, a Michigan banking corporation | ||
| By: | /s/ Xxxxxx X. Xxxxxxxxx | |
| Name: | Xxxxxx X. Xxxxxxxxx | |
| Title: | Vice President | |
Consent and ratification OF GUARANTY
The undersigned (“Guarantor”) is a guarantor of Borrowers to Lender under the terms of that certain Continuing Unconditional Guaranty dated as of May 24, 2010 made by Guarantor in favor of Lender (as amended, restated, modified or supplemented and in effect from time to time, the “Guaranty”). Guarantor hereby expressly: (a) consents to the execution by Borrowers and Lender of the above Fourth Amendment to Loan and Security Agreement and Other Loan Documents; (b) acknowledges that “Borrowers’ Liabilities” (as defined in the Guaranty) includes all of the obligations and liabilities owing from time to time by Borrowers to Lender, including, but not limited to, the obligations and liabilities of Borrowers to Lender under the Fourth Amended and Restated Revolving Note and the Third Amended and Restated Term Note, each as modified, extended and/or replaced from time to time, and any other Notes (as defined in the Loan Agreement); (c) acknowledges that Guarantor does not have any set-off, defense or counterclaim to the payment or performance of any of the obligations of Borrowers under the Fourth Amended and Restated Revolving Note, the Third Amended and Restated Term Note or any of the other Loan Documents or Guarantor under the Guaranty; (d) reaffirms, assumes and binds itself in all respects to all of the obligations, liabilities, duties, covenants, terms and conditions that are contained in the Guaranty; (e) agrees that all such obligations and liabilities under the Guaranty shall continue in full force and that the execution and delivery of the above Fourth Amendment to Loan and Security Agreement and Other Loan Documents to, and its acceptance by, Lender shall not in any manner whatsoever (i) impair or affect the liability of Guarantor to Lender under the Guaranty, (ii) prejudice, waive, or be construed to impair, affect, prejudice or waive the rights and abilities of Lender at law, in equity or by statute, against Guarantor pursuant to the Guaranty, and/or (iii) release or discharge, nor be construed to release or discharge, any of the obligations and liabilities owing to Lender by Guarantor under the Guaranty; and (f) represents and warrants that each of the representations and warranties made by Guarantor in any of the documents executed in connection with the Loans remain true and correct as of the date hereof.
| LTN ACQUISITION, LLC, a Delaware limited liability company | ||
| By: | /s/ L. Xxxxx Xxxxx, Xx. | |
| Name: | L. Xxxxx Xxxxx, Xx. | |
| Title: | Manager and Authorized Person | |
MEMBERSHIP INTERESTS SECURITY AGREEMENT
The undersigned (“Grantor”) is a grantor under the terms of that certain Membership Interests Security Agreement dated as of May 24, 2010 by and between Grantor and Lender (as amended, restated, modified or supplemented and in effect from time to time, the “LTN Acquisition Membership Interests Security Agreement”). Grantor hereby consents to the above Fourth Amendment to Loan and Security Agreement and Other Loan Documents and hereby confirms that Grantor has granted to Lender a security interest in the Pledged Collateral (as defined in the LTN Acquisition Membership Interests Security Agreement) to secure the Liabilities (as defined in the Membership Interests Security Agreement), under and pursuant to the LTN Acquisition Membership Interests Security Agreement. The undersigned hereby expressly agrees that the Liens on the Pledged Collateral shall secure all of the Liabilities (as defined in the LTN Acquisition Membership Interests Security Agreement), including, without limitation, the Loans, and hereby reaffirms its grant of such security interests and Liens to Lender for such purpose in all respects.
| LTN ACQUISITION, LLC, a Delaware limited liability company | ||
| By: | /s/ L. Xxxxx Xxxxx, Xx. | |
| Name: | L. Xxxxx Xxxxx, Xx. | |
| Title: | Manager and Authorized Person | |