Exhibit 10.15
AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 3 dated as of September 21, 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 (f/k/a 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 as of
January 5, 2001 and Amendment ▇▇. ▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇ ▇, ▇▇▇▇ (▇▇▇
"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 (2) of the Recitals to the Original Loan and Security
Agreement is amended and restated as follows:
"Holding Parties and Borrowers desire that Lenders extend a credit
facility to Borrowers to i) acquire and retire in one or more
purchases Senior Notes at a discounted purchase price as permitted
by this Agreement (the 'Senior Note Prepayment') and to pay related
tax expenses; ii) acquire and retire in one or more purchases Senior
PIK Notes held by any Person not employed by a Loan Party as of the
Amendment No. 2 Effective Date, at a discounted purchase price as
permitted by this Agreement (the 'Senior PIK Note Prepayment') and
to pay related tax expenses; iii) refinance certain indebtedness of
Borrowers; iv) make payments in cash required under the Exchange
Offer; and v) provide financing for working capital and for general
corporate purposes from time to time to Borrowers and their
Subsidiaries;".
b. the following definitions are added to subsection 1.1 of the Original
Loan and Security Agreement in their respective proper alphabetical
places:
"'Amendment No. 3' shall mean Amendment No. 3, dated as of September
21, 2001, of this Agreement."
"'Amendment No. 3 Effective Date' shall mean the date on which the
amendments contemplated by Amendment No. 3 become effective."
"'Convertible Subordinated Notes' shall mean CC's 8% convertible
subordinated notes due 2009, substantially in the form of Exhibit 1
hereto, not exceeding $8,000,000 in aggregate principal amount, (plus
any convertible subordinated notes issued in lieu of cash interest in
accordance with the terms of such notes) to be issued in connection
with the Exchange Offer."
"'Exchange Offer' shall mean the (i) the offer made by CC and
evidenced by the Exchange Offer Documents, to exchange up to
$18,000,000 in aggregate principal amount of Senior PIK Notes for, as
to each $1,000 in Senior PIK Notes, $444.44 in face amount of
Convertible Subordinated Notes and $55.56 in cash and (ii) the
solicitation, made pursuant to the Exchange Offer Documents, of the
holders of the Senior PIK Notes to consent to the elimination of the
Subject Covenants."
"'Exchange Offer Consent Documents' shall mean the definitive
documents implementing the consents solicited by the Exchange Offer
Documents."
"'Exchange Offer Documents' shall mean the Confidential Private
Placement Memorandum, Exchange Offer Circular and Consent Solicitation
Statement dated May 30, 2001, substantially in the form of Exhibit 2
hereto, issued by CC in connection with Exchange Offer, the letter
dated August 30, 2001 from CC to holders of the Senior PIK Notes
revising and renewing the Exchange Offer and all documents,
instruments and agreements distributed by or on behalf of CC in
connection therewith and in accordance with this Agreement."
"'Subject Covenants' shall mean the covenants of the Senior Debenture
Indenture to be eliminated by the Exchange Offer Consent Documents,
including, without limitation, the covenants contained in Sections
4.3, 4.5, 4.6, 4.7, 4.10, 4.11, and 4.12 (if consents from at least a
majority of the holders of the Senior PIK Notes is obtained) and in
addition, Sections 4.8 and 4.9 (if consents from 100% of the holders
of the Senior PIK Notes is obtained) of the Senior Debenture
Indenture."
c. subsection 1.1 of the Original Loan and Security Agreement is amended by
amending the definition of "Fixed Charges" appearing therein by adding the
phrase "(excluding those made pursuant to the Exchange Offer but including
any payment of interest in cash on the Convertible Subordinated Notes)"
immediately after the phrase "Restricted Junior Payments" appearing
therein;
d. subsection 1.1 of the Original Loan and Security Agreement is amended by
amending the definition of "Restricted Junior Payment" appearing therein by
restating clause (b) of such definition as follows:
"any payment or prepayment of principal of, premium, if any, or
interest on, or any acquisition, redemption, conversion, exchange,
retirement, defeasance, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of the Convertible
Subordinated Notes or any other Indebtedness subordinated in right of
payment to the Obligations or any shares of any class of stock of CC
or any of its Subsidiaries now or hereafter outstanding, or the
issuance of a notice of an intention to do any of the foregoing;";
e. subsection 2.5 of the Original Loan and Security Agreement is amended and
restated in its entirety as follows:
"Borrower shall utilize the proceeds of the Revolving Loan solely (i)
for the Senior Note Prepayment; (ii) for the Senior PIK Note
Prepayment; (iii) to refinance senior revolving debt of the Borrowers;
(iv) for the cash required to be paid under the Exchange Offer and (v)
to provide working
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capital and for general corporate purposes from time to time for CC
and its Subsidiaries. Prior to and as a condition to the making of the
Revolving Loan, a Borrower Representative will, as of the Closing
Date, deliver to Administrative Agent a funds flow memorandum
detailing how funds from the Revolving Loan are to be transferred to
particular uses.";
f. subsection 4.1(B) of the Original Loan and Security Agreement is
amended by adding the phrase ", it being understood that shares of CC may
be issued to holders of Convertible Subordinated Notes upon conversion of
such Convertible Subordinated Notes (so long as no Event of Default
described in subsection 8.1(F) occurs as a result thereof)" immediately
after the phrase "The capital stock of each of the Loan Parties is owned by
the stockholders and in the amounts set forth on Schedule 4.1(B) (in the
case of CC with shares held by the public being specified in the
aggregate)" appearing therein;
g. subsection 4.16 of the Original Loan and Security Agreement is amended and
restated in its entirety as follows:
"All governmental and material third party consents and approvals
necessary in connection with the credit facilities provided under this
Agreement and the other transactions contemplated hereby, including
the Consent Solicitations, Senior Note Prepayment, Senior PIK Note
Prepayment, the Exchange Offer and the transactions contemplated by
the Exchange Offer, including the issuance of the Convertible
Subordinated Notes in exchange for Senior PIK Notes and the
solicitation of consents pursuant to the Exchange Offer Documents,
have been obtained (without the imposition of any conditions that are
acceptable to the Lenders) and shall remain in effect.";
h. subsection 7.1(b)(ii) of the Original Loan and Security Agreement is
amended and restated in its entirety as follows:
"provided that no Default of Event of Default shall have occurred and
be continuing at the time of the incurrence thereof or would result
therefrom, Indebtedness incurred by CC or COI (and advanced by a
Borrower other than CC or COI) to permit CC or COI to make payments in
cash then due under, after taking into account any options to pay in
kind, and pursuant to the Senior Notes, the Senior PIK Notes and the
Convertible Subordinated Notes, pay expenses incurred in the ordinary
course of business and to make Restricted Junior Payments permitted
under subsection 7.5; provided that, in each case, such Indebtedness
shall be unsecured and subordinated in right of payment to the
Obligations in a manner and upon terms acceptable to Administrative
Agent (and by its execution and delivery hereof, each Borrower agrees
that any such Indebtedness shall be so unsecured and so subordinate to
such Indebtedness) and shall not be evidenced by any note or other
instrument, unless the same is pledged to Administrative Agent and
Lenders pursuant to subsection 5.14;";
i. subsection 7.1 of the Original Loan and Security Agreement is amended by
(1) deleting the word "and" appearing at the end of clause (g) thereof and
(2) adding the following immediately after clause (h) thereof:
"; and (i) Indebtedness of CC, not exceeding $8,000,000 in aggregate
principal amount evidenced by the Convertible Subordinated Notes or
such less principal amount as may be outstanding from time to time,
plus the amount of additional Convertible Subordinated Notes that may
be issued in lieu of cash interest on and prior to December 15, 2003
so long as at the time of the incurrence of any Indebtedness under
this subsection 7.1(i), CC would be entitled to acquire Senior PIK
Notes under subsection 7.4(g)";
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j. subsection 7.4 of the Original Loan and Security Agreement is amended by
(1) deleting the word "and" appearing at the end of clause (e) thereof and
(2) adding the following immediately after clause (f) thereof:
"; and (g) acquisitions by CC of not more than $18,000,000 in face
amount of Senior PIK Notes pursuant to and in accordance with the
terms of the Exchange Offer Documents; provided, however, that (i) no
such acquisition shall be made unless (w) no Default or Event of
Default shall be continuing or shall arise as a consequence thereof,
(x) the Exchange Offer Documents, the Convertible Subordinated Notes
and the Exchange Offer Consent Documents shall have become effective
on or prior to September 21, 2001, shall be in the forms attached
hereto as Exhibits 1 and 2 (in the case of the Confidential Private
Placement Memorandum, Exchange Offering Circular and Consent
Solicitation Statement dated May 30, 2001 and form of Convertible
Subordinated Note) and shall otherwise be in form and substance
satisfactory to the Administrative Agent, (y) the Administrative Agent
shall have received such legal opinions as to the Exchange Offer as it
shall have reasonably requested, and (z) all conditions to the
Exchange Offer shall have been satisfied or, with the prior written
consent of the Requisite Lenders, waived, and (ii) upon acquiring any
Senior PIK Note pursuant to the Exchange Offer, CC shall cancel such
Senior PIK Note (or cause such Senior PIK Note to be cancelled)";
k. subsection 7.5 of the Original Loan and Security Agreement is amended by
(1) deleting the word "and" appearing at the end of clause (A) thereof, (2)
restating clause (B)(iii) in its entirety to read: "to permit CC to make
scheduled payments (but not prepayments) of interest in cash then due
(after giving effect to any options to make in kind payments in lieu of
cash) under and pursuant to the Senior PIK Notes or Convertible
Subordinated Notes;" and (3) adding the following immediately after clause
(B):
"and (C) to provide to CC the funds (not exceeding $1,000,000 plus
taxes payable in connection with the Exchange Offer in the aggregate)
as and when necessary to make the payment of cash required to effect
the Exchange Offer so long as at the time of such Restricted Junior
Payment, CC would be entitled to acquire Senior PIK Notes under
subsection 7.4(g).";
l. subsection 7.16 of the Original Loan and Security Agreement is amended by
(1) amending and restating the heading of such subsection to "Changes
Relating to Senior Notes, Senior PIK Notes and Convertible Subordinated
Notes" and (2) adding the phrase "the Convertible Subordinated Notes, the
Exchange Offer Documents, the Exchange Offer Consent Documents" immediately
following the phrase "Change or amend, or agree to change or amend, any of
the terms of the Senior Notes, the Senior PIK Notes, the Senior Notes
Indenture, the Senior Debentures Indenture,";
m. subsection 8.1(B)(B) of the Original Loan and Security Agreement is amended
and restated in its entirety as follows:
"default by CC, COI or any Subsidiary of either thereof under the
Senior Notes Indenture, Senior Debentures Indenture, the Convertible
Subordinated Notes or the Exchange Offer Documents, including any
breach of any covenant thereunder regardless of whether such covenant
is more restrictive than, or conflicts with, or covers the same or
similar matters as the covenants set forth in this Agreement or any
other Loan Documents;"; and
n. subsection 8.1(S) of the Original Loan and Security Agreement is amended
and restated in its entirety as follows:
"CC or COI shall engage in any business activities, other than
activities solely related to ownership of the stock of COI (in the
case of CC) and of the stock of Borrowers (in the case of COI),
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compliance with the Senior Notes Indenture, the Senior Debentures
Indenture, the Convertible Subordinated Notes and the Exchange
Offer Documents, Corporate Overhead activities, and activities
related to compliance with laws and regulations applicable to CC as
a publicly-owned corporation; or".
2. 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. 3.
b. this Amendment No. 3 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. 3 will
not violate any law, statute or regulation applicable to any Loan
Party, or any order or decree of any court or governmental
instrumentally 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.
3. Effectiveness. The foregoing amendments contained in this Amendment
No. 3 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 September 21, 2001:
a. this Amendment No. 3 shall have been executed and delivered by each
Loan Party and the Requisite Lenders as set forth on the signature
pages hereto;
b. as of the Effective Date, there shall be continuing no Default or
Event of Default; and
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).
4. Governing Law. This Amendment No. 3 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.
5. Counterparts. This Amendment No. 3 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.
6. Consent. By signing below, each Loan Party consents to the execution
and delivery of this Amendment No. 3 by each other Loan Party and
agrees that the obligations of such Loan Party under the Loan
Documents continue in full force and effect.
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7. 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. 3
(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 Lenders, the Co-Agent, the Collateral
Agent and the Administrative Agent have caused this Amendment No. 3 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.
▇▇▇▇▇ ▇., 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. 3]
For each of the foregoing corporations:
By: _____________________________________________
Name:
Title:
IBJ WHITEHALL BUSINESS CREDIT CORPORATION, as
Administrative Agent and Lender
By: _____________________________________________
Name:
Title:
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Collateral Agent and Lender
By: _____________________________________________
Name:
Title:
TRANSAMERICA BUSINESS CAPITAL CORPORATION (f/k/a
Transamerica Business Credit Corporation), as Co-
Agent and Lender
By: _____________________________________________
Name:
Title:
FLEET CAPITAL CORPORATION, as Lender
By: _____________________________________________
Name:
Title:
[Signatures Continued on Following Page]
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[Signature page 2 of 2 to Amendment No. 3]
GUARANTY BUSINESS CREDIT CORPORATION, as Lender
By: _____________________________________________
Name:
Title:
LASALLE BUSINESS CREDIT, INC, as Lender
By: _____________________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as Lender
By: _____________________________________________
Name:
Title:
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