Exhibit 10.7
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT entered into this
14th day of May, 2003 by and among TEAMSTAFF, INC. (the "Borrower"), a
corporation incorporated under the laws of the State of New Jersey, having its
principal office at 000 Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, TeamStaff
Solutions, Inc, DSI Staff Connxions Northeast, Inc., DSI Staff Connxions
Southwest, Inc., TeamStaff Rx, Inc., TeamStaff I, Inc., TeamStaff II, Inc.,
TeamStaff III, Inc., TeamStaff IV, Inc., TeamStaff V, Inc., TeamStaff VI, Inc.,
TeamStaff VIII, Inc., TeamStaff IX, Inc., TeamStaff Insurance Services, Inc.,
Employer Support Services, Inc., HR2, Inc., XxxxxxXxxx.xxx, Inc., Digital
Insurance Services, Inc. (collectively, the "Guarantors") with respective
addresses as shown on Schedule 5.13 hereof and FLEET NATIONAL BANK (the "Bank"),
a national bank association organized under the laws of the United States of
America, having an office at 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Bank Guarantors and the Borrower have previously entered into
a commercial lending arrangement in accordance with the terms and conditions of
a certain Loan and Security Agreement dated April 9, 2002 as amended by a First
Amendment to Loan and Security Agreement dated March 21, 2003 (the "Agreement");
WHEREAS, on April 9, 2002, the "Guarantors" each executed in favor of the
Lender a certain Continuing Unlimited and Collateralized Guaranty as ratified by
a Guarantors Ratification dated March 21, 2003 (the "Guaranty") pursuant to
which the Guarantors each guaranteed the Loan of the Borrower to the Bank;
WHEREAS, the Lender and the Borrower seek to memorialize the modifications
to the Agreement by this writing.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, and other good and valuable consideration, receipt
of which is hereby acknowledged, it is agreed as follows:
1. Section 1, Definitions of the Agreement is hereby modified to delete
the definition of Interest Coverage Ratio and a new definition of EBIT less
Intangible Write Down Expense is substituted therefore to read as follows:
"EBIT less Intangible Write Down Expense": Net Income less Tax
Expense less Interest Expense less Intangible Write Down Expense Covenant
Test on Quarter by Quarter Basis.
2. Subsections 6.23(n) of the Agreement is waived for the quarter ended
3/31/03 and going forward is hereby deleted and new Subsections 6.23(n) is
substituted therefor to read as follows:
(n) EBIT Less Intangible Write Down Expense. Cause, suffer or permit the
Obligors' EBIT less Intangible Write Down Expense to be less than the
following test period required minimum as follows:
Test Period Required Minimum
----------------------------
QE 6/30/2003 -$100,000.00
QE 9/30/2003 $500,000.00
QE 12/31/2003 $600,000.00
QE 3/31/2004 $800,000.00
QE 6/30/2004 and $900,000.00
thereafter
3. Upon execution of this Amendment, the Borrower shall deliver the
following to the Bank: (a) Bank fee of $7,500.00, (b) Bank's legal fee, (c) this
Amendment properly executed, (d) the Guarantors' Ratification properly executed,
(e) within 45 days from the date hereof an executed opinion of Borrower's
counsel in form and
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substance satisfactory to Bank, and (f) such other materials reasonably required
by the Bank. It is understood and agreed that Borrower shall pay all fees and
costs incurred by Bank in entering into this Amendment and the other documents
executed in connection herewith, including but not limited to all reasonable
attorney fees and expenses of Bank's counsel.
4. All of the remaining terms and conditions of the Agreement shall remain
in full force and effect as though set forth herein at length to the extent not
inconsistent with the terms of this Amendment, and any term in initial capital
letters not otherwise defined herein shall have the meaning ascribed thereto in
the Agreement.
IN WITNESS WHEREOF, the parties hereunto set their hands and seals or
caused these presents to be signed by their respective corporate officers and
the proper corporate seal to be affixed hereto the day and year first above
mentioned.
ATTEST: TEAMSTAFF, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
ATTEST: TEAMSTAFF SOLUTIONS, INC
________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
ATTEST: DSI STAFF CONNXIONS NORTHEAST, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICE
ATTEST: DSI STAFF CONNXIONS SOUTHWEST, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
ATTEST: TEAMSTAFF RX, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
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ATTEST: TEAMSTAFF I, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
ATTEST: TEAMSTAFF II, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
ATTEST: TEAMSTAFF III, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
ATTEST: TEAMSTAFF IV, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICE
ATTEST: TEAMSTAFF V, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
ATTEST: TEAMSTAFF VI, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
ATTEST: TEAMSTAFF VIII, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
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ATTEST: TEAMSTAFF IX, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
ATTEST: TEAMSTAFF INSURANCE SERVICES, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
ATTEST: EMPLOYER SUPPORT SERVICES, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
ATTEST: HR2, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
ATTEST: XXXXXXXXXX.XXX, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
ATTEST: DIGITAL INSURANCE SERVICES, INC.
_________________________________ BY:___________________________________
XXXXXX X. XXXXXX, CONTROLLER XXXXXX X. XXXXXXX, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
FLEET NATIONAL BANK
BY:___________________________________
XXXX XXXXX, VICE PRESIDENT
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