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EXHIBIT 10.4
 
FIRST AMENDMENT TO
AMENDED AND RESTATED ACCOUNT PURCHASE AGREEMENT
 
THIS FIRST AMENDMENT (this “Amendment”), dated as of March 29, 2012, is entered
into by and between TS STAFFING SERVICES, INC., a Texas corporation (the
“Customer”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (together with its
participants, successors and assigns, “WFBC”).
 
RECITALS
 
A. The Customer and WFBC are parties to an Amended and Restated Account Purchase
Agreement, dated as of November 21, 2011 (as amended or otherwise modified from
time to time, the “Account Purchase Agreement”).
 
B. The Customer has requested that certain amendments be made to the Account
Purchase Agreement, which WFBC is willing to make pursuant to the terms and
conditions set forth herein.
 
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, it is agreed as follows:
 
1. Defined Terms.  Capitalized terms used in this Amendment which are defined in
the Recitals above shall have the same meanings as defined in such Recitals,
unless otherwise defined herein.  Capitalized terms used in this Amendment which
are defined in the Account Purchase Agreement shall have the same meanings as
defined in the Account Purchase Agreement, unless otherwise defined herein.
 
2. Amendments to Account Purchase Agreement.
 
(a) Section 2.06 of the Account Purchase Agreement is hereby amended and
restated to read in its entirety as follows:
 
“2.06           “Aggregate Facility Maximum” means $67,500,000, which amount may
be reduced, from to time and at the election of WFBC in its sole discretion if a
Participant defaults under its participation arrangement with WFBC or if such
participation arrangement is terminated, by an amount determined by WFBC in its
sole discretion, which amount shall not exceed the amount of any participating
interests in the interests of WFBC hereunder sold by WFBC to a Participant.”
 
(b) Section 2.56 of the Account Purchase Agreement is hereby amended and
restated to read in its entirety as follows:
 
 
 

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“2.56           “WFBC Discount” means, with respect to each Purchased Account
and the Related Rights with respect thereto, an amount equal to the lesser of
(i) the sum of LIBOR, which interest rate shall change whenever LIBOR changes,
plus five and fifty-five one hundredths of one percent (5.55%) per annum, or
(ii) the lawful maximum, if any, in effect from time to time for advances to
customers of the type, in the amount, for the purposes and otherwise of the kind
herein contemplated.  Upon the occurrence and during the continuation of an
Event of Termination, with respect to each Purchased Account and the Related
Rights with respect thereto, the WFBC Discount shall be equal to the sum of
LIBOR, which interest rate shall change whenever LIBOR changes, plus eight and
fifty-five one hundredths of one percent (8.55%) per annum, or such lesser
amount as WFBC in its sole discretion may determine (but in no event shall such
fee be more than the lawful maximum, if any, in effect from time to time for
advances of the type, in the amount, for the purposes and otherwise of the kind
herein contemplated).  The WFBC Discount shall be calculated on the basis of a
360-day year for the actual number of days elapsed.  WFBC may increase the WFBC
Discount if WFBC’s cost of funds increases for any reason.  Such change shall be
effective upon the actual change in WFBC’s cost of funds.”
 
(c) Section 3.20(e) of the Account Purchase Agreement is hereby amended and
restated to read in its entirety as follows:
 
“(e)           The Customer will pay on demand to WFBC interest (before and
after default and before and after judgment, with interest on overdue interest
at the same rate) on all amounts not paid to or deposited when due hereunder
(other than amounts due under Section 3.10(b)) at a rate equal to LIBOR, which
interest rate shall change whenever LIBOR changes, plus eight and fifty-five one
hundredths of one percent (8.55%) per annum calculated daily.”
 
(d) Section 6.07(a) of the Account Purchase Agreement is hereby amended and
restated to read in its entirety as follows:
 
“(a)           as soon as available and in any event within 30 days after the
end of each month, year-to-date unaudited financial statements of the Customer
and its Subsidiaries including a statement of monthly income and a balance sheet
of the Customer and its Subsidiaries, certified by an authorized officer of the
Customer and its Subsidiaries, as applicable;”
 
(e) Section 6.07(c) of the Account Purchase Agreement is hereby amended and
restated to read in its entirety as follows:
 
“(c)           within 30 days after the end of each month, the Customer will
deliver to WFBC a certificate in form acceptable to WFBC in its reasonable
discretion which is signed by an officer of the Customer and shall include:  (i)
a compliance certificate regarding the occurrence of an Event of Termination and
(ii) a listing by Account Debtor of the outstanding Purchased Accounts of such
Account Debtor, as of the last day of such month, determined in accordance with
this Agreement and the instructions of WFBC;”
 
 
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(f) The first sentence of Section 6.18 is hereby amended and restated to read in
its entirety as follows:
 
“The Customer will notify WFBC in writing at least thirty (30) days prior to any
(a) proposed change of the Customer’s legal name, jurisdiction of incorporation,
identity, legal entity, or corporate structure or (b) business dissolution;
provided that the Customer shall merge with and into TS Staffing Services, Inc.,
a Delaware corporation, with TS Staffing Services, Inc., a Delaware corporation,
as the surviving entity, on or before June 30, 2012.”
 
(g) Article 6 of the Account Purchase Agreement is hereby amended to add a new
Section 6.23 to read in its entirety as follows:
 
“Section 6.23  Financial Projections.  The Customer will provide to WFBC, as
soon as available and in any event within 30 days after each fiscal year end
commencing with the fiscal year ending September 30, 2012, the Customer’s
projected balance sheet, income statement and statement of cash flows for each
month of the next fiscal year, certified as accurate by the Customer’s chief
financial officer and accompanied by a statement of assumptions and supporting
schedules and information, prepared on a consolidated and consolidating basis to
include Corporate Resource Services, Inc. and each Subsidiary of Corporate
Resource Services, Inc.  If the Customer fails to provide such financial
projections to WFBC within 30 days after any fiscal year end commencing with the
fiscal year ending September 30, 2012, the Customer shall pay to WFBC, as a full
recourse obligation, a fee of $50,000 for each such failure to provide such
financial projections; provided, that the payment of such fee shall not waive
any Event of Termination caused by the Customer’s failure to provide such
financial projections.”
 
3. No Other Changes.  Except as explicitly amended by this Amendment, all of the
terms and conditions of the Account Purchase Agreement shall remain in full
force and effect.
 
4. Conditions Precedent.  This Amendment shall be effective when WFBC shall have
received an executed original hereof and such other matters as WFBC may require,
each in substance and form acceptable to WFBC in its reasonable discretion.
 
5. Representations and Warranties.  The Customer hereby represents and warrants
to WFBC as follows:
 
(a) The Customer has all requisite power and authority to execute and deliver
this Amendment and any other agreements or instruments required hereunder and to
perform all of its obligations hereunder and thereunder, and this Amendment and
all such other agreements and instruments have been duly executed and delivered
by the Customer and constitute the legal, valid and binding obligation of the
Customer, enforceable in accordance with its terms.
 
 
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(b) The execution, delivery and performance by the Customer of this Amendment
and any other agreements or instruments required hereunder have been duly
authorized by all necessary corporate action and do not (i) require any
authorization, consent or approval by any governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any
provision of any law, rule or regulation or of any order, writ, injunction or
decree presently in effect, having applicability to the Customer, or the
articles of incorporation or by-laws of the Customer, or (iii) result in a
breach of or constitute a default under any agreement, lease or instrument to
which the Customer is a party or by which it or its properties may be bound or
affected.
 
(c) All of the representations and warranties contained in the Account Purchase
Agreement are correct on and as of the date hereof as though made on and as of
such date, except to the extent that such representations and warranties relate
solely to an earlier date.
 
6. References.  All references in the Account Purchase Agreement to “this
Agreement” shall be deemed to refer to the Account Purchase Agreement as amended
hereby; and any and all references in any of the Related Documents to the
Account Purchase Agreement shall be deemed to refer to the Account Purchase
Agreement as amended hereby.
 
7. No Waiver.  The execution of this Amendment and the acceptance of all other
agreements and instruments related hereto shall not be deemed to be a waiver of
any default or Event of Termination under the Account Purchase Agreement or any
other Related Document or other document held by WFBC, whether or not known to
WFBC and whether or not existing on the date of this Amendment.
 
8. Release.  The Customer and each Guarantor by signing the Acknowledgment and
Agreement of Guarantors set forth below, each hereby absolutely and
unconditionally releases and forever discharges WFBC, and any and all
participants, parent entities, subsidiary entities, affiliated entities,
insurers, indemnitors, successors and assigns thereof, together with all of the
present and former directors, officers, agents and employees of any of the
foregoing, from any and all claims, demands or causes of action of any kind,
nature or description, whether arising in law or equity or upon contract or tort
or under any state or federal law or otherwise, which the Customer or such
Guarantor has had, now has or has made claim to have against any such Person for
or by reason of any act, omission, matter, cause or thing whatsoever arising
from the beginning of time to and including the date of this Amendment, whether
such claims, demands and causes of action are matured or unmatured or known or
unknown.
 
9. Costs and Expenses.  The Customer hereby reaffirms its agreement under the
Account Purchase Agreement to pay or reimburse WFBC on demand for all costs and
expenses incurred by WFBC in connection with the Account Purchase Agreement and
the Related Documents, including without limitation all disbursements and
reasonable fees of counsel.  Without limiting the generality of the foregoing,
the Customer specifically agrees to pay all disbursements and fees of counsel to
WFBC for the services performed by such counsel in connection with the
preparation of this Amendment and the documents and instruments incidental
hereto.  The Customer acknowledges and agrees that WFBC may charge such fees and
disbursements to the Collected Reserve Account.
 
 
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10. Miscellaneous.  This Amendment and the Acknowledgment and Agreement of
Guarantors may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same
instrument.  Manually executed counterparts of the signature pages of this
Amendment and the Acknowledgment and Agreement of Guarantors may be delivered by
the parties electronically so long as transmitted pages are reproducible on
paper medium upon receipt.  Each party is duly authorized to print any executed
signature page so received and attach it to this Amendment and the
Acknowledgment and Agreement of Guarantors, whereupon this Amendment and the
Acknowledgment and Agreement of Guarantors shall be deemed to have been duly
executed and delivered by the transmitting party and the paper copy of this
Amendment and the Acknowledgment and Agreement of Guarantors assembled by the
recipient with such signature page attached shall be deemed an original for all
purposes, absent manifest error or bad faith.  This Amendment and the
Acknowledgment and Agreement of Guarantors shall be governed by and construed in
accordance with the substantive laws (other than conflict laws) of the State of
Colorado.  The parties hereby (a) consent to the personal jurisdiction of the
state and federal courts located in the State of Colorado, and any appellate
court from which any appeals therefrom are available, in connection with any
controversy related to this Amendment or the Acknowledgment and Agreement of
Guarantors; (b) waive any argument that venue in any such forum is not
convenient; (c) agree that any litigation initiated by any party in connection
with this Amendment and the Acknowledgment and Agreement of Guarantors may be
venued in the state or federal courts located in the City and County of Denver,
Colorado; and (d) agree that a final judgment in any such suit, action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
 
11. WAIVER OF JURY TRIAL.  THE CUSTOMER, EACH GUARANTOR AND WFBC HEREBY
IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION AT LAW OR IN EQUITY
OR IN ANY OTHER PROCEEDING BASED ON OR PERTAINING TO THIS AMENDMENT OR THE
ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS.
 
[The remainder of this page intentionally left blank.]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.
 
WELLS FARGO BANK, NATIONAL ASSOCIATION
 
 
By:  /s/ Jason M.
Cole                                                               
Name:  Jason M.
Cole                                                             
Its:  Authorized Signatory
TS STAFFING SERVICES, INC.
 
 
 
By: /s/ Jay H. Schecter                                                        
Name:  Jay H. Schecter
Its:  Chief Executive Officer
 

 
 
 
Signature Page to
First Amendment to Amended and Restated Account Purchase Agreement
 
 
 

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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS
 
Each of the undersigned, each a guarantor of the debts, obligations and
liabilities of TS Staffing Services, Inc., a Texas corporation (the “Customer”)
to Wells Fargo Bank, National Association (together with its participants,
successors and assigns, “WFBC”), pursuant to (a) a Continuing Guaranty by Robert
Cassera in favor of WFBC, dated as of August 27, 2010, (b) an Amended and
Restated Continuing Guaranty by Corporate Resource Services, Inc. in favor of
WFBC, dated as of November 21, 2011, (c) a Continuing Guaranty by Diamond
Staffing Services, Inc. in favor of WFBC, dated as of January 31, 2011, (d) a
Continuing Guaranty by Insurance Overload Services, Inc. in favor of WFBC, dated
as of August 27, 2010, and (e) a Continuing Guaranty by Corporate Resource
Development Inc. in favor of WFBC, dated as of November 21, 2011 (each of the
foregoing as amended or otherwise modified from time to time, a “Guaranty”),
hereby (i) acknowledges receipt of the foregoing Amendment; (ii) consents to the
terms (including without limitation the release by each of the undersigned set
forth in the Amendment) and execution thereof; (iii) reaffirms all obligations
to WFBC pursuant to the terms of his or its Guaranty; and (iv) acknowledges that
WFBC may amend, restate, extend, renew or otherwise modify the Account Purchase
Agreement and any debts, obligations, liabilities or agreement of the Customer,
or enter into any agreement or extend additional or other credit accommodations,
without notifying or obtaining the consent of the undersigned and without
impairing the liability of the undersigned under his or its Guaranty for all of
the Customer’s present and future debts, obligations and liabilities to WFBC.
 
 
 
 
/s/ Robert Cassera
Robert Cassera
CORPORATE RESOURCE
SERVICES, INC.
 
 
By:  /s/ Jay H.
Schecter                                                               
Name:  Jay H. Schecter
Its:  Chief Executive Officer
 
DIAMOND STAFFING SERVICES, INC.
 
 
 
By:  /s/ Jay H.
Schecter                                                                
Name:  Jay H. Schecter
Its:  Chief Executive Officer
 
INSURANCE OVERLOAD
SERVICES, INC.
 
 
By:   /s/ Jay H.
Schecter                                                             
Name:  Jay H. Schecter
Its:  Chief Executive Officer
CORPORATE RESOURCE DEVELOPMENT INC.
 
 
By:  /s/ Jay H.
Schecter                                                               
Name:  Jay H. Schecter
Its:  Chief Executive Officer
 

 
Signature Page to
Acknowledgment and Agreement of Guarantors
First Amendment to Amended and Restated Account Purchase Agreement