Exhibit 10.16
AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 4 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
3. 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 and
Amendment No. 3 thereto as of September 21, 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).
4. The Loan Parties, and Lenders desire to amend the Original Loan and
Security Agreement as provided herein.
5. In accordance with Subsection 7.6 of the Original Loan and Security
Agreement, (a) each of the following Borrowers has merged with another
Borrower and therefore is no longer a Borrower: Computer Consultants
Funding & Support, Inc.; G.M.G. Resources, Inc.; Professional Staffing
Funding & Support, Inc.; Uniforce MIS Services of Georgia, Inc.; and
UTS of Delaware, Inc. and (b) each of the following Inactive
Subsidiaries has dissolved and its assets and liabilities distributed
to another subsidiary of a Borrower and therefore is no longer an
Inactive Subsidiary: Camelot Consulting Group, Inc.; and Camelot
Group, Inc.
NOW, THEREFORE, in consideration of the premises set forth herein, the Loan
Parties and the Lenders hereby agree as follows:
8. 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. 4' shall mean Amendment No. 4, dated as of December
7, 2001, of this Agreement."
"`Amendment No. 4 Effective Date' shall mean the date on which the
amendments contemplated by Amendment No. 4 become effective."
"`Borrowing Base Condition'" shall mean that the Collateral Agent
and the Administrative Agent have determined in their reasonable
discretion, that the percentage obtained by dividing (i) the total
non-cash credits (not including credits to charge back invoices) to
Purchased Accounts of the Borrowers during the 3-month period ending
on September 30, 2001 by (ii) total Purchased Accounts sales of the
Borrowers during such 3-month period, does not exceed 5%."
"`Borrowing Base Percentage'" shall mean (i) 80% at all times prior
to satisfaction, if any, of the Borrowing Base Condition or (ii)
82.5% from and after satisfaction, if any, of the Borrowing Base
Condition.
b. Subsection 1.1 of the Original Loan and Security Agreement is amended
by amending and restating the definition of "Revolving Loan
Commitment" as follows:
"`Revolving Loan Commitment' means (a) as to any Lender, the
commitment of such Lender to make Revolving Advances pursuant to
subsection 2.1(A), and to purchase participations in Letters of
Credit pursuant to subsection 2.1(F) in the aggregate amount set
forth on the signature page of Amendment No. 4 to this Agreement (or
any amendment subsequent to Amendment No. 4) below such Lender's
signature or in the most recent Assignment and Assumption Agreement,
if any, executed by such Lender and (b) as to all Lenders, the
aggregate commitment of all Lenders to make Revolving Advances and
to purchase participations in Letters of Credit."
c. subsection 2.1(A) of the Original Loan and Security Agreement is
amended by substituting the figure "$110,000,000" appearing in the
first paragraph thereof, with the figure "$95,000,000";
d. clause (2) of subsection 2.1(A) of the Original Loan and Security
Agreement is amended and restated as follows:
"`Borrowing Base' means, as of any date of determination, an amount
equal to eighty-five per cent (85%) of Eligible Accounts other than
Eligible Accounts that are Purchased Accounts plus the Borrowing
Base Percentage of Eligible Accounts that are Purchased Accounts
plus the lesser of eighty-five per cent (85%) of (x) Unbilled
Eligible Accounts and (y) an amount equal to 8% of the sum of
Unbilled Eligible Accounts plus Eligible Accounts; less Landlord
Waiver Reserves and less such other reserves as Collateral Agent in
its reasonable discretion may elect to establish from time to time;
provided, however, that so long as any Senior Notes or Senior PIK
Notes are outstanding, the Borrowing Base shall not exceed the
maximum principal amount of Indebtedness permitted to be incurred
under section 4.3(b)(i) of the Senior Notes Indenture or section
4.3(b)(i) of the Senior Debentures Indenture. With reasonable
promptness following delivery by the Borrower Representative of
financial statements in accordance with subsection 5.1(A) in respect
of the month ending May 31, 2002, assuming that at such time there
shall be continuing no Default or Event of Default, the Lenders in
good faith shall consider whether the advance rate against Eligible
Accounts that are Purchased Accounts be increased to 85%; provided,
however, that no such increase shall become effective without the
consent of all Lenders and no Lender shall have any obligation to
consent to such increase."; and
e. subsections 7.1(c) and 7.1(d) of the Original Loan and Security
Agreement are amended and restated as follows:
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"(c) Indebtedness (including Capital Leases) not to exceed
$5,000,000 in the aggregate at any time outstanding secured by
purchase money Liens; (d) Omitted.;".
9. 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. 4.
b. this Amendment No. 4 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. 4 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.
10. Effectiveness. The foregoing amendments contained in this Amendment
No. 4 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. 4 shall have been executed and delivered by each
Loan Party and the 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;
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. 4 and the other Loan Documents, in form and substance
satisfactory to the Administrative Agent; and
f. Each Lender shall have received a Revolving Note (in substantially the
same form as that issued by the Borrowers to IBJW on the Closing
Date), dated the Effective Date, in the amount of the Revolving Loan
Commitment for such Lender as set forth on the signature page of
Amendment No. 4, by the Borrowers to the order of such Lender (and
after such delivery, each Lender shall return its Revolving Note,
dated January 5, 2001, to Borrowers marked "Cancelled and Replaced").
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11. Governing Law. This Amendment No. 4 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.
12. Counterparts. This Amendment No. 4 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.
13. Consent. By signing below, each Loan Party consents to the execution
and delivery of this Amendment No. 4 by each other Loan Party and
agrees that the obligations of such Loan Party under the Loan
Documents continue in full force and effect.
14. 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. 4 (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. 4 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. 4]
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. 4]
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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