Exhibit 10.17
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 5 dated as of December 7, 2001 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"), 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
6. 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 as of
January 5, 2001, Amendment No. 2 thereto as of March 5, 2001,
Amendment No. 3 thereto as of September 21, 2001 and Amendment No. 4
thereto 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).
7. 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:
15. Amendments. The Original Loan and Security Agreement is, subject to
the satisfaction of the conditions referred to below, amended as
follows:
a. the following definitions are added to subsection 1.1 of the Original
Loan and Security Agreement in their respective proper alphabetical
places:
"'Amendment No. 5' shall mean Amendment No. 5, dated as of December
7, 2001, of this Agreement."
"'Amendment No. 5 Effective Date' shall mean the date on which the
amendments contemplated by Amendment No. 5 become effective."
"'Excess Accounts' shall mean, with respect to the Purchased
Accounts and Service Fee Accounts for any Account Seller at any
time, that portion of Purchase Accounts of such Account Seller
constituting Eligible Accounts and that portion of Service Fee
Accounts of such Account Seller constituting Eligible Accounts, in
excess, in the aggregate, of $7,000,000 at such time."
"'Special Amount' shall mean, at any time, that portion of the
outstanding principal balance of the Loans (as determined on a daily
basis by the Collateral Agent and Administrative Agent) equal to the
lesser of (i) the Excess Accounts at such time and (ii) the
outstanding principal balance of the Loan at such time. Special
Amounts shall be deemed to be Base Rate Loans, except to the extent
that the aggregate amount thereof, at any time, exceeds the amount
of Base Rate Loans outstanding at such time, and the amount of any
such excess shall be deemed to be LIBOR Loans."
"'Unauthorized Purchased Account' shall mean any Purchased Account
of an Account Seller (i) if as of the time of acquisition thereof by
a Borrower, (x) Purchased Accounts and Service Fee Accounts of all
Account Sellers constitute more than 50% of otherwise Eligible
Accounts (as determined by the Collateral Agent) and (y) such
acquisition thereof by a Borrower caused the sum of Purchased
Accounts and Service Fee Accounts acquired or created by Borrower
from such Account Seller to exceed $5,000,000 and (ii) for which the
applicable Borrower did not receive, prior to the acquisition of
such Purchased Account, written approval from the Requisite Lenders
pursuant to subsection 7.17 hereof for the acquisition thereof by a
Borrower. An Unauthorized Purchased Account shall not constitute an
Eligible Account."
"'Unauthorized Service Fee Account' shall mean any Service Fee
Account of an Account Seller (i) if as of the time of creation or
acquisition thereof by a Borrower (x) Purchased Accounts and Service
Fee Accounts of all Account Sellers constitute more than 50% of
otherwise Eligible Accounts (as determined by the Collateral Agent)
and (y) such creation or acquisition thereof by a Borrower caused
the sum of Purchased Accounts and Service Fee Accounts created or
acquired by Borrower from such Account Seller to exceed $5,000,000
and (ii) for which the applicable Borrower did not receive, prior to
the creation or acquisition thereof by a Borrower, written approval
from the Requisite Lenders pursuant to subsection 7.17 hereof for
the creation or acquisition thereof by a Borrower. An Unauthorized
Service Fee Account shall not constitute an Eligible Account.";
b. 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, 60% of
otherwise Eligible Accounts;";
c. clause (22) of subsection 2.1(B) of the Original Loan and Security
Agreement is amended and restated as follows:
"Purchased Accounts or Service Fee Accounts which exceed, as to any
single Account Seller, $7,000,000 in the aggregate; provided,
however, if Borrower has obtained the prior written consent of the
Requisite Lenders allowing the sum of such Purchased Accounts and
Service Fee Accounts to exceed, as to such Account Seller,
$7,000,000 in the aggregate, such accounts shall be deemed Eligible
Accounts;";
d. clause (23) of subsection 2.1(B) is amended by replacing the period
with the word "and" at the end thereof and adding a new clause (24)
immediately thereafter, such new clause to read as follows:
"Purchased Accounts and Service Fee Accounts that constitute
Unauthorized Purchased Accounts or Unauthorized Service Fee
Accounts.";
e. subsection 2.2(A) is amended and restated in its entirety as follows:
"The Loans and all other Obligations shall bear interest from the
date such Loans are made or such other Obligations become due to the
date paid at a rate per annum equal to (i) (x) except for Special
Amounts constituting Base Rate Loans, in the case of Base Rate Loans
and other Obligations for
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which no other interest rate is specified, the Base Rate plus the
Applicable Base Rate Margin, and (y) in the case of Special Amounts
constituting Base Rate Loans, the Base Rate plus the Applicable
Margin plus 1% per annum, and (ii) (x) except for Special Amounts
constituting LIBOR Loans, in the case of LIBOR Loans, LIBOR, plus
the Applicable LIBOR Margin and (y) in the case of Special Amounts
constituting LIBOR Loans LIBOR, plus the Applicable LIBOR Margin
plus 1% per annum (the "Interest Rate"). The applicable basis for
determining the rate of interest shall be selected by Borrower
Representative initially at the time a Notice of Borrowing is given
pursuant to subsection 2.1(C). The basis for determining the
interest rate with respect to any Loan or a portion of any Loan may
be changed from time to time pursuant to subsection 2.2(E). If on
any day a Loan or a portion of any Loan is outstanding with respect
to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the basis for
determining the rate of interest, then for that day that Loan or
portion thereof shall bear interest determined by reference to the
Base Rate.
After the occurrence and during the continuance of an Event of
Default (i) the Loans and all other Obligations shall, at the option
of Requisite Lenders, bear interest at a rate per annum equal to two
percent (2%) plus the applicable Interest Rate (the "Default Rate"),
(ii) each LIBOR Loan shall automatically convert to a Base Rate Loan
at the end of any applicable Interest Period and (iii) no Loans may
be converted to LIBOR Loans.";
f. subsection 5.3 of the Original Loan and Security Agreement is amended
and restated as follows:
"The Loan Parties shall permit any one or more of the Agents and Co-
Agent and any authorized representatives designated by any Agent or
Co-Agent to visit and inspect any of the properties of any Loan
Party, including their financial and accounting records (for the
purposes of field audit or otherwise), and in conjunction with such
inspection, to make copies and take extracts therefrom, and to
discuss their affairs, finances and business with their officers and
independent public accountants, at such reasonable times during
normal business hours and as often as may be reasonably requested
provided such visits and inspections shall be made 3 times per
Fiscal Year. Each Lender may, with the consent of any Agent or Co-
Agent making such visit or inspection, which consent will not be
unreasonably denied, accompany such Agent or Co-Agent on any such
visit or inspection."; and
g. a new subsection 7.17 is added immediately after the end of subsection
7.16, such new subsection to be titled "Restrictions on Purchased
Accounts and Service Fee Accounts" and to read as follows:
"At any time that Purchased Accounts and Service Fee Accounts of all
Account Sellers constitute more than 50% of otherwise Eligible
Accounts, prior to creating or acquiring any Service Fee Account or
Purchased Account of an Account Seller that as of the time of
creation or acquisition thereof by a Borrower, would cause the sum
of Purchased Accounts and Service Fee Accounts created or acquired
by Borrower from such Account Seller to exceed $5,000,000, a
Borrower shall obtain the prior written consent of the Requisite
Lenders. The Requisite Lenders shall endeavor to respond to any
request for approval under this subsection 7.17 within five (5)
Business Days of such request; provided, however, that no Lender
shall be liable for failure to approve such request within such
time."
16. Representations and Warranties. Each 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 is required to authorize,
or is otherwise required in connection with the execution, delivery
and performance of this Amendment No. 5.
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b. this Amendment No. 5 has been duly executed and delivered by a duly
authorized officer of each Loan Party, and constitutes the legal,
valid and binding obligations of such 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. 5 will
not violate any law, statute or regulation applicable to any 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.
17. Effectiveness. The foregoing amendments contained in this Amendment
No. 5 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 December 7, 2001:
a. this Amendment No. 5 shall have been executed and delivered by each
Loan Party and the Requisite Lenders;
b. as of the Effective Date, there shall be continuing no Default or
Event of Default;
c. the representations made by the 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 $30,000 for the 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, as to the Original Loan and Security Agreement, as amended by
Amendment No. 5 and the other Loan Documents, in form and substance
satisfactory to the Administrative Agent.
18. Governing Law. This Amendment No. 5 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.
19. Counterparts. This Amendment No. 5 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.
20. Consent. By signing below, each Loan Party consents to the execution
and delivery of this Amendment No. 5 by each other Loan Party and
agrees that the obligations of such Loan Party under the Loan
Documents continue in full force and effect.
21. 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. 5 (as well as by all subsequent amendments, restatements,
modifications and supplements thereto).
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[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the Loan Parties, the Lenders, the Co-Agent, the Collateral
Agent and the Administrative Agent have caused this Amendment No. 5 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 SERVICES, INC.
COMFORCE TELECOM, INC.
XXXXX X., INC.
LABFORCE OF AMERICA, 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.
[Signatures Continued on Following Page]
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[Signature page 1 of 2 to Amendment No. 5]
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. 5]
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
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