Exhibit 10.1

 

SIXTH AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT

 

THIS SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Sixth
Amendment”) dated as of August 26, 2004, is made by and among Kforce Inc.,
formerly known as kforce.com, Inc., a Florida corporation (the “Borrower “), the
Subsidiary Guarantors, the Lenders identified on the signature pages hereof and
Bank of America, N.A., as Administrative Agent for the Lenders (in such
capacity, the “Administrative Agent”). Terms used herein but not otherwise
defined herein shall have the meanings provided to such terms in the Credit
Agreement (as hereinafter defined).

 

W I T N E S S E T H

 

WHEREAS, the Borrower, the Subsidiary Guarantors, the Lenders and Bank of
America, N.A., in its capacity as Administrative Agent, are parties to that
certain Amended and Restated Credit Agreement dated as of November 3, 2000, as
amended December 10, 2000, February 12, 2001, January 23, 2002, August 5, 2002
and December 5, 2002, (as at any time further amended, modified, supplemented,
extended or restated from time to time, the “Credit Agreement”); and

 

WHEREAS, the Borrower has requested and the Lenders have agreed to amend certain
terms of the Credit Agreement as set forth herein;

 

NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

1. Amendments. The Credit Agreement is hereby amended as follows:

 

(a) effective as of August 1, 2004, by deleting the definition of “Applicable
Margin” set forth in Annex A to the Credit Agreement and by restating such
definition as follows:

 

“Applicable Margin” means

 

  (i) with respect to Base Rate Revolving Loans and all other Obligations (other
than LIBOR Rate Loans), -0-%; and

 

  (ii) with respect to LIBOR Revolving Loans, 1.75%.

 

Commencing on March 31, 2005, the foregoing Applicable Margins shall be adjusted
(up or down) prospectively on a quarterly basis as determined by the Borrower’s
consolidated financial performance with respect to the Borrower’s quarterly
Financial Statements for the fiscal quarter ending March 31, 2005, and
thereafter on the first day of the first calendar month that occurs more than 5
days after delivery of the Borrower’s quarterly Financial Statements to Lenders,
in each case based on Borrower’s consolidated

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financial performance for the four (4) fiscal quarters then ending. Adjustments
in Applicable Margins shall be determined by reference to the following grids:

 

If Funded Debt to

EBITDA is

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Applicable

Margin for

LIBOR Rate

Loans

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Applicable

Margin for

Base Rate

Loans

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³ 3.5X

   250 bps    25 bps

³ 3.0X but < 3.5X

   225 bps    0 bps

³ 2.5X but < 3.0X

   200 bps    0 bps

³ 1.25X but < 2.5X

   175 bps    0 bps

< 1.25X

   150 bps    (25)bps

 

All adjustments in the Applicable Margins after March 31, 2005, shall be
implemented quarterly on a prospective basis, for each calendar month commencing
at least 5 days after the date of delivery to the Lenders of quarterly unaudited
or annual audited (as applicable) Financial Statements evidencing the need for
an adjustment. Concurrently with the delivery of those Financial Statements, the
Borrower shall deliver to the Administrative Agent and the Lenders a
certificate, signed by its chief financial officer, setting forth in reasonable
detail the basis for the continuance of, or any change in, the Applicable
Margins. Failure to timely deliver such Financial Statements shall, in addition
to any other remedy provided for in this Agreement, result in an increase in the
Applicable Margins to the highest level set forth in the foregoing grid, until
the first day of the first calendar month following the delivery of those
Financial Statements demonstrating that such an increase is not required. If a
Default or Event of Default has occurred and is continuing at the time any
reduction in the Applicable Margins is to be implemented, no reduction may occur
until the first day of the first calendar month following the date on which such
Default or Event of Default is waived or cured.

 

(c) by deleting the definition of “Borrowing Base” set forth in Annex A to the
Credit Agreement and by restating such definition as follows:

 

“Borrowing Base” means, at any time, an amount equal to (a) the sum of (A)
eighty-five 85% of the Net Amount of Eligible Accounts; plus (B) the lesser of
the sum of (i) (y) 80% of the Net Amount of Eligible Non-Invoiced Accounts and
(z) 50% of the Net Amount of Eligible Employee Placement Accounts up to an
aggregate amount not to exceed at any time $2,000,000, or (ii) 35% of the
aggregate Net Amount of Eligible Accounts, Eligible Non-Invoiced Accounts and
Eligible Placement Accounts (as measured as of the last day of the most recent
fiscal quarter of the Borrower and as of the date of the funding of any
Acquisition Loan, whichever occurred most recently) minus (b) Reserves from time
to time established by the Administrative Agent in its reasonable credit
judgment.

 

(d) by deleting the definition of “ Net Amount of Eligible Accounts/ Net Amount
of Eligible Non-Invoiced Accounts” set forth in Annex A to the Credit Agreement
and by

 

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restating such definition as follows:

 

“Net Amount of Eligible Accounts/ Net Amount of Eligible Non-Invoiced Accounts/
Net Amount of Eligible Employee Placement Accounts” means, at any time, the
gross amount of Eligible Accounts, Eligible Non-Invoiced Accounts or Eligible
Employee Placement Accounts, as the case may be, less sales, excise or similar
taxes, and less discounts, claims, credits, and allowances, accrued rebates,
offsets, deductions, counterclaims, disputes and other defenses of any nature at
any time issued, owing, granted, outstanding, available or claimed.

 

(e) by adding the following new definitions to Annex A to the Credit Agreement
in the proper alphabetical sequence:

 

“Collateral Availability” means at any time (a) the Borrowing Base minus (b) the
Aggregate Revolver Outstandings.

 

“Eligible Employee Placement Accounts” means Accounts (a) which arise from
placement fees earned by a Credit Party under written employee placement
agreements in substantially the form present to Administrative Agent prior to
the date of the Sixth Amendment and which are accrued on a Credit Party’s books
and records but which have not been invoiced by such Credit party; (b) which
remain uninvoiced for no longer than 30 days after the date on which a Credit
Party shall have entered into an employee placement agreement with the
applicable customer; (c) which are reflected on such Credit Party’s books and
records in form reasonably acceptable to Administrative Agent; (d) except for
clauses (a) and (b) above, would otherwise satisfy the criteria applicable to
Eligible Accounts generally; and (e) which the Administrative Agent in the
exercise of its reasonable commercial discretion determines to be Eligible
Employee Placement Accounts.

 

“Sixth Amendment” means the Sixth Amendment to Amended and Restated Credit
Agreement, dated as of August 26, 2004, among the Borrower, the Subsidiary
Guarantors, the Lenders and the Administrative Agent.

 

(f) Section 2.6 of the Credit Agreement is hereby deleted in its entirety and
restated as follows:

 

2.6 Letter of Credit Fee. The Borrower agrees to pay to the Administrative
Agent, for the account of the Lenders, in accordance with their respective Pro
Rata Shares, for each Letter of Credit, a fee (the “Letter of Credit Fee”) equal
to the Applicable Margin in respect of LIBOR Revolving Loans and to
Administrative Agent for the benefit of the Letter of Credit Issuer a fronting
fee of one quarter of one percent (0.25%) per annum of the undrawn face amount
of each Letter of Credit, and to the Letter of Credit Issuer, all out-of-pocket
costs, fees and expenses incurred by the Letter of Credit Issuer in connection
with the application for, processing of, issuance of, or amendment to any Letter
of Credit. The Letter of Credit Fee shall be payable monthly in arrears on the
first day of each month following any month in which a Letter of Credit is

 

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outstanding and on the Termination Date. The Letter of Credit Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.

 

(g) Sections 7.23 and 7.24 of the Credit Agreement are hereby deleted in their
entirety and restated as follows:

 

7.23 EBITDA. The Borrower shall achieve EBITDA, on a consolidated basis, of not
less than the amount indicated as of the last day of any fiscal quarter in which
the Borrower fails to maintain Availability of at least $15,000,000 (the
“Availability Threshold”) unless, after any date on which the Availability
Threshold is not satisfied (any such date being a “Threshold Breach Date”),
Borrower shall have (i) achieved the Availability Threshold within (10) ten days
after such Threshold Breach Date and (ii) continued to maintain the Availability
Threshold thereafter for each of the next 30 days:

 

Period Ending

     EBITDA

The fiscal quarter ending December 31, 2002

   $ 500,000

The two (2) fiscal quarters ending March 31, 2003

   $ 1,000,000

The three (3) fiscal quarters ending June 30, 2003

   $ 2,000,000

The four (4) fiscal quarters ending September 30, 2003

   $ 6,000,000

The four (4) fiscal quarters ending December 31, 2003

   $ 9,000,000

The four (4) fiscal quarters ending March 31, 2004

   $ 10,000,000

The four (4) fiscal quarters ending June 30, 2004

   $ 11,500,000

The four (4) fiscal quarters ending September 30, 2004

   $ 12,500,000

The four (4) fiscal quarters ending December 31, 2004

   $ 15,500,000

The four (4) fiscal quarters ending March 31, 2005

   $ 16,000,000

The four (4) fiscal quarters ending June 30, 2005

   $ 17,000,000

The four (4) fiscal quarters ending September 30, 2005

   $ 18,000,000

 

7.24 Minimum Availability. The Borrower shall maintain Collateral Availability
of not less than $10,000,000 at all times during the term of this Agreement. In
addition to the foregoing, for each of the thirty (30) days following the
funding of (i) a Securities Repurchase Loan or (ii) an Acquisition Loan,
Borrower shall maintain Availability of not less than $15,000,000; provided,
however, that if the Target Asset Inclusion Conditions are satisfied, assets of
the Target shall be included in the calculation of Availability for purposes of
clause (ii) hereof.

 

2. Conditions Precedent. The effectiveness of this Sixth Amendment is subject to
the satisfaction of each of the following conditions (in form and substance
satisfactory to the Administrative Agent):

 

(a) The Administrative Agent shall have received executed counterparts of this
Sixth Amendment duly executed by the Credit Parties, the Administrative Agent
and the Lenders; and

 

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(b) The Administrative Agent shall have received such additional agreements,
certificates or documents as it may reasonably request in connection with this
Sixth Amendment.

 

3. Representations and Warranties. The Borrower and the Guarantors represent and
warrant to the Administrative Agent and the Lenders that (i) the representations
and warranties of the Credit Parties set out in Article 6 of the Credit
Agreement are true and correct as of the date hereof (except those which
expressly relate to an earlier period), (ii) no event has occurred and is
continuing which constitutes a Default or Event of Default and (iii) no Credit
Party has any counterclaims, offsets, credits or defenses to the Loan Documents
and the performance of its obligations thereunder, or if any Credit Party has
any such claims, counterclaims, offsets, credits or defenses to the Loan
Documents or any transaction related to the Loan Documents, same are hereby
waived, relinquished and released in consideration of the Lenders’ execution and
delivery of this Sixth Amendment.

 

4. Guarantor Acknowledgments. The Guarantors (i) acknowledge and consent to all
of the terms and conditions of this Sixth Amendment, (ii) affirm all of their
obligations under the Loan Documents and (iii) agree that this Sixth Amendment
and all documents executed in connection herewith do not operate to reduce or
discharge the Guarantors’ obligations under Article 13 of the Credit Agreement
or the other Loan Documents.

 

5. Authorization. The Borrower and the Guarantors hereby represent and warrant
to the Administrative Agent and the Lenders as follows:

 

(i) Each Credit Party has taken all necessary action to authorize the execution,
delivery and performance of this Sixth Amendment.

 

(ii) This Sixth Amendment has been duly executed and delivered by the Credit
Parties and constitutes each of the Credit Parties’ legal, valid and binding
obligations, enforceable in accordance with its terms, except as such
enforceability may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting
creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity).

 

(iii) No consent, approval, authorization or order of, or filing, registration
or qualification with, any court or governmental authority or third party is
required in connection with the execution, delivery or performance by any Credit
Party of this Sixth Amendment.

 

6. No Novation; Etc. Except as modified hereby, all of the terms and provisions
of the Credit Agreement (including Schedules and Exhibits) and the other Loan
Documents, and the obligations of the Credit Parties under the Credit Agreement
and the other Loan Documents, are hereby ratified and confirmed. This Sixth
Amendment is not intended to be, nor shall it be construed to create, a novation
or accord and satisfaction, and the Credit Agreement and the other Loan
Documents as herein modified shall continue in full force and effect.

 

7. Counterparts. This Sixth Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original and it shall not be necessary in making proof of this Sixth Amendment
to produce or account for more

 

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than one such counterpart.

 

8. Governing Law. This Sixth Amendment shall be deemed to be a contract made
under, and for all purposes shall be construed in accordance with, the laws of
the State of Georgia.

 

WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Sixth Amendment to be duly executed and delivered as of the date first above
written.

 

BORROWER:

  

KFORCE INC., formerly known as KFORCE.COM, INC., a Florida corporation

 

By:     /s/ Judy Genshino                 

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Name:    Judy Genshino

Title:      Assistant Treasurer

 

 

GUARANTORS:

  

KFORCE AIRLINES, INC., a Florida corporation

 

By:     /s/ Judy Genshino                 

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Name:    Judy Genshino

Title:      Assistant Treasurer

 

 

    

ROMAC INTERNATIONAL, INC., a Florida corporation

 

By:     /s/ Judy Genshino                 

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Name:    Judy Genshino

Title:      Assistant Treasurer

 

 

    

KFORCE.COM, INC., formerly known as Kforce, Inc.

 

By:     /s/ Judy Genshino                 

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Name:    Judy Genshino

Title:      Assistant Treasurer

 

[Signatures continue on following page]

 

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TKO PERSONNEL, INC.

 

By: /s/ Judy Genshino

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Name:    Judy Genshino

Title:      Assistant Treasurer

 

 

AGENT:

  

BANK OF AMERICA, N.A., as Administrative Agent

 

By: /s/ Mark Herdman

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Name:    Mark Herdman

Title:      Vice President

 

 

LENDERS:

  

BANK OF AMERICA, N.A., individually in its capacity as a Lender

 

By: /s/ Mark Herdman

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Name:    Mark Herdman

Title:      Vice President

 

    

FLEET CAPITAL CORPORATION

 

By: /s/ Christopher Nairne

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Name:    Christopher Nairne

Title:      Vice President

 

 

    

THE CIT GROUP/BUSINESS CREDIT, INC.

 

By: /s/ John Bohan

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Name:    John Bohan

Title:      Vice President

 

 

    

PNC BANK, NATIONAL ASSOCIATION

 

By: /s/ Jay Stein

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Name:    Jay Stein

Title:      Vice President

 

 

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