EXHIBIT 10.1

 

$130,000,000 CREDIT FACILITY

 

CREDIT AGREEMENT

 

DATED AS OF DECEMBER 14, 2005

 

AMONG

 

COMSYS SERVICES LLC,

COMSYS INFORMATION TECHNOLOGY SERVICES, INC.,

PURE SOLUTIONS, INC.,

 

as Borrowers,

 

COMSYS IT PARTNERS, INC.,

 

PFI LLC,

 

as Guarantors,

 

MERRILL LYNCH CAPITAL,

a Division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent, as a Lender and as Sole Bookrunner and Sole Lead
Arranger

 

ING CAPITAL LLC,

 

as Co-Documentation Agent and as a Lender,

 

ALLIED IRISH BANKS PLC,

 

as Co-Documentation Agent and as a Lender,

 

GMAC COMMERCIAL FINANCE LLC,

 

as Syndication Agent and as a Lender,

 

AND

 

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

 

LOGO [g34439img01.jpg]

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ARTICLE I

  DEFINITIONS    2

      Section 1.1

  Certain Defined Terms.    2

      Section 1.2

  Accounting Terms and Determinations.    29

      Section 1.3

  Other Definitional Provisions.    29

ARTICLE II

  LOANS AND LETTERS OF CREDIT    30

      Section 2.1

  Term Loan.    30

      Section 2.2

  Revolving Loans.    34

      Section 2.3

  Interest, Interest Calculations and Certain Fees.    36

      Section 2.4

  Notes.    40

      Section 2.5

  Letters of Credit and Letter of Credit Fees.    40

      Section 2.6

  General Provisions Regarding Payment; Loan Account.    43

      Section 2.7

  Maximum Interest.    43

      Section 2.8

  Taxes.    44

      Section 2.9

  Appointment of the Funds Administrator.    45

ARTICLE III

  REPRESENTATION AND WARRANTIES    47

      Section 3.1

  Existence and Power.    47

      Section 3.2

  Organization and Governmental Authorization; No Contravention.    47

      Section 3.3

  Binding Effect.    47

      Section 3.4

  Capitalization.    48

      Section 3.5

  Financial Information.    48

      Section 3.6

  Litigation.    49

      Section 3.7

  Ownership of Property.    49

      Section 3.8

  No Default.    49

      Section 3.9

  Labor Matters.    50

      Section 3.10

  Regulated Entities.    50

      Section 3.11

  Margin Regulations.    50

      Section 3.12

  Compliance With Laws; Anti-Terrorism Laws.    50

      Section 3.13

  Taxes.    51

      Section 3.14

  Compliance with ERISA.    51

      Section 3.15

  Brokers.    52

      Section 3.16

  Related Transactions.    52

      Section 3.17

  Employment, Equityholders and Subscription Agreements.    52

      Section 3.18

  Compliance with Environmental Requirements; No Hazardous Materials.    52

      Section 3.19

  Intellectual Property.    53

      Section 3.20

  Real Property Interests.    54

      Section 3.21

  Solvency.    54

      Section 3.22

  Full Disclosure.    54

      Section 3.23

  Representations and Warranties Incorporated from Other Operative Documents.   
54

ARTICLE IV

  AFFIRMATIVE COVENANTS    55

      Section 4.1

  Financial Statements and Other Reports.    55

      Section 4.2

  Payment and Performance of Obligations.    59

 

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      Section 4.3

  Conduct of Business and Maintenance of Existence.    59

      Section 4.4

  Maintenance of Property; Insurance.    59

      Section 4.5

  Compliance with Laws.    61

      Section 4.6

  Inspection of Property, Books and Records.    61

      Section 4.7

  Use of Proceeds.    61

      Section 4.8

  Lenders’ Meetings.    61

      Section 4.9

  Further Assurances.    62

ARTICLE V

  NEGATIVE COVENANTS    62

      Section 5.1

  Debt.    62

      Section 5.2

  Liens.    64

      Section 5.3

  Contingent Obligations.    65

      Section 5.4

  Restricted Distributions.    66

      Section 5.5

  Restrictive Agreements.    68

      Section 5.6

  Payments and Modifications of Second Lien Debt and Subordinated Debt.    69

      Section 5.7

  Consolidations, Mergers and Sales of Assets.    70

      Section 5.8

  Purchase of Assets, Investments.    71

      Section 5.9

  Transactions with Affiliates.    72

      Section 5.10

  Modification of Organizational Documents.    72

      Section 5.11

  Fiscal Year.    72

      Section 5.12

  Conduct of Business.    73

      Section 5.13

  Intentionally Omitted.    73

      Section 5.14

  Lease Payments.    73

      Section 5.15

  Bank Accounts.    73

      Section 5.16

  Compliance with Anti-Terrorism Laws.    73

ARTICLE VI

  ACCOUNTS REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS    74

      Section 6.1

  Accounts and Account Collections.    74

ARTICLE VII

  FINANCIAL COVENANTS    76

      Section 7.1

  Fixed Charge Coverage Ratio.    76

      Section 7.2

  Total Debt to Adjusted EBITDA Ratio.    77

ARTICLE VIII

  CONDITIONS    78

      Section 8.1

  Conditions to Closing.    78

      Section 8.2

  Conditions to Each Loan and Support Agreement.    79

ARTICLE IX

  EVENTS OF DEFAULT    23

      Section 9.1

  Events of Default.    79

      Section 9.2

  Acceleration and Suspension or Termination of Revolving Loan Commitment.    82

      Section 9.3

  Cash Collateral.    83

      Section 9.4

  Default Rate of Interest and Suspension of LIBOR Rate Options.    83

      Section 9.5

  Setoff Rights.    83

      Section 9.6

  Application of Proceeds.    83

 

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ARTICLE X

  EXPENSES, INDEMNITY, TAXES AND RIGHT TO PERFORM    84

      Section 10.1

  Expenses.    84

      Section 10.2

  Indemnity.    84

      Section 10.3

  Taxes.    85

      Section 10.4

  Right to Perform.    85

ARTICLE XI

  AGENT    86

      Section 11.1

  Appointment and Authorization.    86

      Section 11.2

  Agent and Affiliates.    86

      Section 11.3

  Action by Agent.    86

      Section 11.4

  Consultation with Experts.    86

      Section 11.5

  Liability of Agent.    87

      Section 11.6

  Indemnification.    87

      Section 11.7

  Right to Request and Act on Instructions.    87

      Section 11.8

  Credit Decision.    88

      Section 11.9

  Collateral Matters.    88

      Section 11.10

  Agency for Perfection.    88

      Section 11.11

  Notice of Default.    89

      Section 11.12

  Successor Agent.    89

      Section 11.13

  Disbursements of Revolving Loans; Payment.    89

      Section 11.14

  Additional Titled Agents.    92

ARTICLE XII

  MISCELLANEOUS    92

      Section 12.1

  Survival.    92

      Section 12.2

  No Waivers.    92

      Section 12.3

  Notices.    92

      Section 12.4

  Severability.    93

      Section 12.5

  Amendments and Waivers.    93

      Section 12.6

  Assignments; Participations.    93

      Section 12.7

  Headings.    95

      Section 12.8

  Confidentiality.    95

      Section 12.9

  GOVERNING LAW; SUBMISSION TO JURISDICTION.    96

      Section 12.10

  WAIVER OF JURY TRIAL.    96

      Section 12.11

  Publication; Advertisement.    96

      Section 12.12

  Counterparts; Integration.    97

ARTICLE XIII

  LIABILITY OF THE BORROWERS    97

      Section 13.1

  Joint and Several Liability.    97

      Section 13.2

  Waivers by the Borrowers.    98

      Section 13.3

  Benefit.    98

      Section 13.4

  Waiver of Subrogation, Etc.    98

      Section 13.5

  Election of Remedies.    98

      Section 13.6

  Limitation.    99

      Section 13.7

  Contribution with Respect to Obligations.    99

      Section 13.8

  Liability Cumulative.    100

 

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ANNEX AND EXHIBITS

 

ANNEXES

 

Annex A    -    Commitment Annex Annex B    -    Closing Checklist Annex C    -
   Existing Letters of Credit Annex D    -    Existing Debt

 

EXHIBITS

 

Exhibit A    -    Assignment Agreement Exhibit B    -    Excess Cash Flow
Certificate Exhibit C    -    Compliance Certificate Exhibit D    -    Borrowing
Base Certificate Exhibit E    -    Notice of Borrowing Exhibit F    -    Form of
Reconciliation Report

 

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CREDIT AGREEMENT

 

CREDIT AGREEMENT dated as of December 14, 2005 among COMSYS SERVICES LLC, a
Delaware limited liability company and successor by merger to Venturi Technology
Partners, LLC (“COMSYS Services”), COMSYS INFORMATION TECHNOLOGY SERVICES, INC.,
a Delaware corporation and successor by merger to COMSYS Holding, Inc. (“COMSYS
IT”), PURE SOLUTIONS, INC., a California corporation (“Pure Solutions”; COMSYS
Services, COMSYS IT and Pure Solutions are referred to herein each individually
as a “Borrower” and collectively as the “Borrowers”), COMSYS IT PARTNERS, INC.,
a Delaware corporation (“Holdings”), PFI LLC, a Delaware limited liability
company (“PFI”), COMSYS Services, acting in its capacity as borrowing agent and
funds administrator for the Borrowers (in such capacity, the “Funds
Administrator”), the financial institutions from time to time parties hereto,
each as a Lender, and MERRILL LYNCH CAPITAL, a division of Merrill Lynch
Business Financial Services Inc., individually as a Lender, as administrative
agent (the “Agent”), Sole Bookrunner and Sole Lead Arranger, ING CAPITAL LLC, as
co-documentation agent and as a Lender, ALLIED IRISH BANKS PLC, as
co-documentation agent (together with ING Capital LLC, the “Co-Documentation
Agents”) and as a Lender, and GMAC COMMERCIAL FINANCE LLC, as syndication agent
(the “Syndication Agent”) and as a Lender.

 

RECITALS:

 

WHEREAS, the Borrowers desire that Lenders extend certain term credit and
working capital facilities to the Borrowers to (i) provide funds necessary to
refinance existing indebtedness of the Borrowers, (ii) pay fees and expenses
related to this Agreement and the other Operative Documents and (iii) provide
working capital financing for the Borrowers; and

 

WHEREAS, each Borrower desires to secure all of its Obligations under the
Financing Documents by granting to Agent, for the benefit of Agent and Lenders,
a first priority security interest in and lien upon substantially all of its
personal and real property, including without limitation all of the outstanding
capital stock or other equity securities, as applicable, of each Domestic
Subsidiary and, to the extent provided herein, each Foreign Subsidiary; and

 

WHEREAS, Holdings, as the direct owner of all of the issued and outstanding
capital stock or membership interests, as the case may be, of COMSYS IT and PFI,
and the indirect owner of all of the issued and outstanding capital stock or
membership interests, as the case may be, of COMSYS Services, Pure Solutions and
certain other Credit Parties, is willing to guarantee all of the Obligations of
the Borrowers to Lenders under the Financing Documents, and to grant to Agent,
for the benefit of Agent and Lenders, a first priority security interest in and
lien upon substantially all of its personal and real property, including,
without limitation, all of the outstanding capital stock or other equity
securities, as applicable, of each Domestic Subsidiary (including, without
limitation, all of the outstanding capital stock or membership interest, as the
case may be, of COMSYS IT and PFI) and, to the extent provided herein, each
Foreign Subsidiary; and

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WHEREAS, each other Domestic Subsidiary of Holdings (including, without
limitation, PFI), other than the Borrowers, is willing to guaranty all of the
Obligations of the Borrowers to Lenders under the Financing Documents, and to
grant to Agent, for the benefit of Agent and Lenders, a first priority security
interest in and lien upon substantially all of its personal and real property to
the extent provided for herein;

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, the Borrowers, Holdings, PFI, Lenders and Agent
agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1 Certain Defined Terms.

 

The following terms have the following meanings:

 

“2006 Equity Issuance” means an issuance by Holdings of shares of common stock
of Holdings that is consummated no later than February 15, 2006.

 

“2006 Equity Issuance Available Amount” means, as of any date of determination,
the Net Cash Proceeds received by Holdings in connection with the 2006 Equity
Issuance minus the sum of (i) the aggregate amount of such proceeds that have
been previously used by or have been committed to be used by the Credit Parties
to consummate Series A-1 Preferred Stock Redemptions, (ii) the aggregate amount
of such proceeds that have been used by, or have been committed to be used by,
the Credit Parties to consummate Permitted Acquisitions and (iii) the 2006
Equity Issuance Non-Net Cash Proceeds Consideration Amounts with respect to all
Permitted Acquisitions consummated with Net Cash Proceeds of the 2006 Equity
Issuance.

 

“2006 Equity Issuance Cash Consideration” has the meaning set forth in the
definition of 2006 Equity Issuance Non-Net Cash Proceeds Consideration Amount.

 

“2006 Equity Issuance Non-Net Cash Proceeds Consideration Amount” means, in the
event a Permitted Acquisition is consummated and any cash portion of such
consideration is deemed pursuant to a 2006 Equity Use Certificate to be paid
with Net Cash Proceeds of the 2006 Equity Issuance (such portion the “2006
Equity Issuance Cash Consideration”), an amount equal to (a) the total
consideration paid or payable in connection with such Permitted Acquisition
(including all Debt, liabilities and Contingent Obligations incurred or assumed
and, with respect to any Earnout or comparable payment obligation in connection
therewith, the aggregate amount reasonably expected to be paid by the Borrowers
in connection with such Earnout, as determined by the Borrowers in their
reasonable business judgment, whether or not reflected on a consolidated balance
sheet of the Borrowers and Target) minus (b) the 2006 Equity Issuance Cash
Consideration.

 

“2006 Equity Issuance Reserve” has the meaning set forth in Section 2.1(c).

 

“2006 Equity Use Certificate” has the meaning set forth in Section 2.1(c).

 

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“Account Debtor” means “account debtor,” as defined in Article 9 of the UCC.

 

“Accounts” means “accounts” (as defined in Article 9 of the UCC) of the
Borrowers, including without limitation any and all rights to payment for the
sale or lease of goods or rendition of services, whether or not they have been
earned by performance, in each case, for purposes of calculating the Borrowing
Base, net of any credits, rebates or offsets owed by any Borrower, to the
respective customer.

 

“Adjusted EBITDA” has the meaning as defined pursuant to the terms of the
Compliance Certificate.

 

“Adjustment Date” means the first Business Day of each February, May, August and
November of each year, commencing with the first Business day of May, 2006.

 

“Affiliate” means with respect to any Person (i) any Person that directly or
indirectly controls such Person, (ii) any Person which is controlled by or is
under common control with such controlling Person and (iii) in the case of an
individual, the parents, children, siblings and spouse of such individual. As
used in this definition, the term “control” of a Person means the possession,
directly or indirectly, of the power to vote ten percent (10%) or more of any
class of voting securities of such Person or to direct or cause the direction of
the management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

 

“Agent” means Merrill Lynch in its capacity as administrative agent for the
Lenders hereunder, as such capacity is established and subject to the provisions
of Article XI and the successors of Merrill Lynch in such capacity.

 

“Agent Advances” has the meaning set forth in Section 2.2(a)(ii).

 

“Agreement” means this Credit Agreement, as the same may be amended,
supplemented, restated or otherwise modified from time to time.

 

“Anti-Terrorism Laws” means any Laws relating to terrorism or money laundering,
including Executive Order No. 13224 (effective September 24, 2001), the USA
PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, and the
Laws administered by OFAC.

 

“Approved Fund” means any (i) investment company, trust, securitization vehicle
or conduit that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the
ordinary course of its business or (ii) any Person (other than a natural person)
which temporarily warehouses loans for any Lender or any entity described in the
preceding clause (i) and that, with respect to each of the preceding clauses
(i) and (ii), is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) a Person (other than a natural person) or an Affiliate of a Person
(other than a natural person) that administers or manages a Lender.

 

“Asset Disposition” means any sale, lease, exclusive and irrevocable license
granted other than in the ordinary course of business or other consensual
disposition by any Credit Party of any asset, but excluding dispositions of Cash
Equivalents.

 

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“Assignee” has the meaning set forth in Exhibit A to this Agreement.

 

“Assignment Agreement” means an agreement substantially in the form of Exhibit A
hereto.

 

“Assignment of PS Purchase Agreement” means that certain Collateral Assignment
of Stock Purchase Agreement dated as of the PS Closing Date by and between the
Agent and COMSYS IT.

 

“Attempted 2005 Equity Issuance” means the attempted issuance by Holdings of
shares of common stock of Holdings, the proceeds of which were intended to be
used to repurchase all of the issued and outstanding Series A-1 Preferred Stock,
to repay a portion of the outstanding principal amount of the “Second Lien Term
Loan” and the “Revolving Loans” as such terms are defined in the Prior Credit
Agreement.

 

“Blocked Account” has the meaning set forth in Section 6.1(d).

 

“Blocked Person” means any Person: (i) listed in the annex to, or is otherwise
subject to the provisions of, Executive Order No. 13224; (ii) a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224; (iii) a Person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law; (iv) a Person
that commits, threatens or conspires to commit or supports “terrorism” as
defined in Executive Order No. 13224; or (v) a Person that is named a “specially
designated national” or “blocked person” on the most current list published by
OFAC or other similar list.

 

“Borrowers” has the meaning set forth in the Preamble to this Agreement.

 

“Borrowers’ Account” means the accounts specified in Section G of the
Information Certificate into which Loans (other than Agent Advances, which shall
be disbursed by Agent in a manner permitted by Section 2.2(a)(ii)) shall be made
at the direction of the Funds Administrator, or such other account as the Funds
Administrator may specify by written notice to Agent.

 

“Borrowing Base” means, as of any date of calculation, a dollar amount
calculated pursuant to the Borrowing Base Certificate most recently delivered to
Agent in accordance with the terms hereof, equal to the sum of eighty-five
percent (85%) (subject to adjustment as provided below) of Eligible Billed
Accounts plus eighty-five percent (85%) (subject to adjustment as provided
below) of Eligible Unbilled Accounts and minus (i) at all times from and after
the PS Closing Date until such time as such reserve shall have reduced to zero,
the PS Year One Earnout Reserve, (ii) from and after the first day of the PS
Year Two Earnout Period until such time as such reserve shall have reduced to
zero, the PS Year Two Earnout Reserve, and (iii) from and after the first day of
the PS Year Three Earnout Period until such time as such reserve shall have
reduced to zero, the PS Year Three Earnout Reserve, (iv) at all times, the
Permanent Reserve, and (v) any other Reserves then established by Agent. Agent
may, from time to time, in the exercise of its Permitted Discretion reduce or
increase any percentage amount set forth in the immediately preceding sentence
(any such increase not to exceed the percentages established on the Closing
Date). Agent shall provide the Funds Administrator with prior written
notification of any change in the percentage amount pursuant to the preceding
sentence together with a reasonably detailed description of the reason for such
change.

 

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“Borrowing Base Certificate” means a certificate, duly executed by a Responsible
Officer of the Funds Administrator, appropriately completed and substantially in
the form of Exhibit D hereto.

 

“Business Day” means any day except a Saturday, Sunday or other day on which
either the New York Stock Exchange is closed, or on which commercial banks in
Chicago are authorized by law to close and, in the case of a Business Day which
relates to a LIBOR Loan, a day on which dealings are carried on in the London
interbank eurodollar market.

 

“Capital Expenditures” has the meaning provided in the Compliance Certificate.

 

“Capital Lease” of any Person means any lease of any property by such Person as
lessee which would, in accordance with GAAP, be required to be accounted for as
a capital lease on the balance sheet of such Person.

 

“Cash Equivalents” means any Investment in (i) direct obligations of the United
States or any agency thereof, or obligations guaranteed by the United States or
any agency thereof, (ii) commercial paper rated at least A-1 by Standard &
Poor’s Ratings Service and P-1 by Moody’s Investors Services, Inc., (iii) demand
deposits and time deposits with, including certificates of deposit issued by,
any office located in the United States of any bank or trust company which is
organized under the laws of the United States or any State thereof and has
capital, surplus and undivided profits aggregating at least $500,000,000 and
which issues (or the parent of which issues) certificates of deposit or
commercial paper with a rating described in clause (ii) above, (iv) repurchase
agreements with respect to securities described in clause (i) above entered into
with an office of a bank or trust company meeting the criteria specified in
clause (iii) above, provided in each case that such Investment matures within
one (1) year from the date of acquisition thereof by any Credit Party, or
(v) any money market or mutual fund which invests only in the foregoing types of
investments and the liquidity of which is reasonably satisfactory to Agent.

 

“Closing Checklist” means Annex B to this Agreement.

 

“Closing Date” means the date of this Agreement.

 

“Co-Documentation Agents” has the meaning set forth in the Preamble to this
Agreement.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means all property, now existing or hereafter acquired, mortgaged
or pledged to, or purported to be subjected to a Lien in favor of, Agent, for
the benefit of Agent and Lenders, pursuant to the Security Documents.

 

“Commitment Annex” means Annex A to this Agreement.

 

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“Commitment Expiry Date” means the earliest to occur of (i) March 31, 2010 and
(ii) ninety (90) days prior to the Junior Lien Maturity Date (as defined in the
Second Lien Credit Agreement).

 

“Compliance Certificate” means a certificate, duly executed by a Responsible
Officer of Holdings, appropriately completed and substantially in the form of
Exhibit C hereto.

 

“COMSYS IT” has the meaning set forth in the Preamble to this Agreement.

 

“COMSYS Limited” means COMSYS VMS Limited, a company formed under the laws of
England and Wales.

 

“COMSYS Services” has the meaning set forth in the Preamble to this Agreement.

 

“Consolidated Subsidiary” means at any date any Subsidiary or other Person the
accounts of which would be consolidated with those of Holdings in its
consolidated financial statements if such statements were prepared as of such
date.

 

“Contingent Obligations” means, with respect to any Person, any direct or
indirect liability of such Person: (i) with respect to any debt, lease, dividend
or other obligation of another Person if the purpose or intent of such Person
incurring such liability, or the effect thereof, is to provide assurance to the
obligee of such liability that such liability will be paid or discharged, or
that any agreement relating thereto will be complied with, or that any holder of
such liability will be protected, in whole or in part, against loss with respect
thereto; (ii) with respect to any letter of credit issued for the account of
such Person or as to which such Person is otherwise liable for the reimbursement
of any drawing; (iii) under any foreign exchange contract, currency swap
agreement, interest rate swap agreement or other similar agreement or
arrangement designed to alter the risks of such Person arising from fluctuations
in currency values or interest rates; (iv) to make take-or-pay or similar
payments if required regardless of nonperformance by any other party or parties
to an agreement; or (v) for any obligation of another Person pursuant to any
agreement to purchase or otherwise acquire any obligation or any property
constituting security therefor, to provide funds for the payment or discharge of
such obligation or to preserve the solvency, financial condition or level of
income of another Person. The amount of any Contingent Obligation shall be equal
to the amount of the obligation so guaranteed or otherwise supported or, if not
a fixed determinable amount, the maximum amount so guaranteed or otherwise
supported.

 

“Controlled Group” means all members of a group of corporations and all members
of a group of trades or businesses (whether or not incorporated) under common
control which, together with the Credit Parties, are treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of
ERISA.

 

“Credit Exposure” means any period of time during which the Revolving Loan
Commitment is outstanding or any Loan, Reimbursement Obligation or other
Obligation remains unpaid or any Letter of Credit or Support Agreement remains
outstanding; provided, that no Credit Exposure shall be deemed to exist solely
due to the existence of contingent indemnification liability, absent the written
assertion of a claim with respect thereto.

 

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“Credit Party” means Holdings, PFI, each Borrower and each of their respective
Subsidiaries.

 

“Debt” of a Person means at any date, without duplication, (i) all obligations
of such Person for borrowed money, (ii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (iii) all obligations
of such Person to pay the deferred purchase price of property or services,
except trade accounts payable arising and payable in the ordinary course of
business and except any working capital adjustment that may be required to be
paid in accordance with Section 1.4 of the PS Purchase Agreement, as in effect
on the PS Closing Date, (iv) all Capital Leases of such Person, (v) all
non-contingent obligations of such Person to reimburse any bank or other Person
in respect of amounts paid under a letter of credit or similar instrument,
(vi) all equity securities of such Person subject to repurchase or redemption on
a date which is prior to the Commitment Expiry Date at the option of the holder
thereof, other than repurchases and redemptions (a) as a result of a change of
control with respect to such Person or a sale of all or substantially all of the
assets of such Person or (b) as a result of a “Fundamental Change” or a “Change
in Ownership” (in each case, as defined in the Holdings Certificate of
Designations), (vii) all obligations secured by a Lien on any asset of such
Person, whether or not such obligation is otherwise an obligation of such
Person, (viii) Earnouts and other similar payment obligations including, without
limitation, the PS Earnout (provided, that, solely for purposes of determining
compliance by the Credit Parties with the respective financial covenants set
forth in Article VII, as of any date of determination, the amount of an Earnout
or similar payment obligation shall be deemed to be equal to the sum of, without
duplication, (a) any liquidated amounts actually due and owing on account of
such Earnout or similar payment obligation, to the extent not yet paid, and
(b) all amounts reasonably expected to be paid by the Borrowers, as determined
by the Borrowers in their reasonable business judgment, in each case, during the
immediately succeeding four (4) fiscal quarter period), and (ix) all Debt of
others Guaranteed by such Person.

 

“Default” means any condition or event which with the giving of notice or lapse
of time or both would, unless cured or waived, become an Event of Default.

 

“Defaulted Lender” means, so long as such failure shall remain in existence and
uncured, any Lender which shall have failed to make any Loan or other credit
accommodation, disbursement or reimbursement required pursuant to the terms of
any Financing Documents.

 

“Deposit Account” means a “deposit account” (as defined in Article 9 of the UCC)
of any Credit Party.

 

“Deposit Account Control Agreement” means an agreement, in form and substance
reasonably satisfactory to Agent, among Agent, any Credit Party or any
Subsidiary of any Credit Party maintaining a Deposit Account at any bank, and
such bank, which agreement provides that (x) such bank shall comply with
instructions originated by Agent directing disposition of the funds in such
Deposit Account without further consent by such Borrower or such Credit Party
(as applicable), and (y) such bank shall agree that it shall have no Lien on, or
right of setoff against, such Deposit Account or the contents thereof, other
than in respect of commercially reasonable fees and other items reasonably and
expressly consented to by Agent, and containing such other terms and conditions
as Agent may reasonably require, including as to any such

 

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agreement pertaining to any Blocked Account, providing that all items received
or deposited in such Blocked Account are the property of Agent, and that such
bank shall wire, or otherwise transfer, in immediately available funds, on a
daily basis to the Payment Account all funds received or deposited into such
Blocked Account.

 

“Domestic Subsidiary” means, with respect to any Person, a Subsidiary of such
Person, which Subsidiary is incorporated or otherwise organized under the laws
of a State of the United States of America.

 

“Domestic Wholly-Owned Subsidiary” means any Domestic Subsidiary in which (other
than directors’ qualifying shares required by law) one hundred percent (100%) of
equity securities, at the time as of which any determination is being made, is
owned, beneficially and of record, by any Borrower, or by one or more of the
other Domestic Wholly-Owned Subsidiaries, or both.

 

“Earnouts” means all “earnouts” and other unsecured liabilities of a Credit
Party arising under an agreement to make any deferred payment as a part of the
purchase consideration for a Permitted Acquisition, including performance
bonuses or consulting payments in any related services, employment or similar
agreement, in an amount that is subject to or contingent upon the revenues,
income, cash flow or profits (or the like) of the Target.

 

“EBITDA” has the meaning as defined pursuant to the terms of the Compliance
Certificate.

 

“Eligible Assignee” means (i) a Lender, (ii) an Affiliate of a Lender, (iii) an
Approved Fund, and (iv) any other Person (other than a natural person) approved
by (a) Agent and (b) unless an Event of Default has occurred and is continuing,
the Funds Administrator (each such approval not to be unreasonably withheld or
delayed, and shall be deemed provided unless expressly withheld by the Funds
Administrator within five (5) Business Days of request therefor); provided that
notwithstanding the foregoing, (x) “Eligible Assignee” shall not include a
Borrower or any Affiliates or Subsidiaries of any Borrower and (y) no proposed
assignee intending to assume all or any portion of the Revolving Loan Commitment
shall be an Eligible Assignee unless such proposed assignee either already holds
a portion of the Revolving Loan Commitment, or has been approved as an Eligible
Assignee by Agent.

 

“Eligible Billed Accounts” has the meaning provided in the Borrowing Base
Certificate; provided, that Agent may, from time to time, change the criteria
for Eligible Billed Accounts set forth in the Borrowing Base Certificate, in the
exercise of its Permitted Discretion. In furtherance of and not in limitation of
the foregoing, Agent may change the criteria for Eligible Billed Accounts based
on either: (i) an event, condition or other circumstance arising after the
Closing Date, or (ii) an event, condition or other circumstance existing on the
Closing Date to the extent Agent has no written notice thereof from a Credit
Party prior to the Closing Date, in either case under clause (i) or (ii) which
materially adversely affects or, in the Permitted Discretion of Agent, could
reasonably be expected to materially adversely affect the Accounts as determined
by Agent in the exercise of its Permitted Discretion. Agent shall provide the
Funds Administrator with prior written notification of any change in the
criteria for Eligible Billed Accounts pursuant to the preceding sentence
together with a reasonably detailed description of

 

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the reason for such change. For purposes of this Agreement, the net amount of
Eligible Billed Accounts at any time shall be the face amount of such Eligible
Billed Accounts less any and all returns, rebates, discounts (which may, at
Agent’s option, be calculated on shortest terms), credits, allowances or excise
taxes of any nature at any time issued, owing, claimed by Account Debtors,
granted, outstanding or payable in connection with such Accounts at such time.
Any Accounts which are not Eligible Billed Accounts shall nevertheless be part
of the Collateral.

 

“Eligible Swap Counterparty” means Agent, any Affiliate of Agent, any Lender
and/or any Affiliate of any Lender that (i) from time to time enters into a Swap
Contract with any Borrower or any Subsidiary and (ii) in the case of a Lender or
an Affiliate of a Lender other than Agent, is expressly identified by Agent, in
its reasonable discretion, as an Eligible Swap Counterparty. Without limitation
of Agent’s discretion to identify a Lender or Affiliate of a Lender as an
Eligible Swap Counterparty, no Lender or Affiliate of any Lender shall be
designated an Eligible Swap Counterparty unless such Person maintains reporting
systems reasonably acceptable to Agent with respect to Swap Contract exposure.

 

“Eligible Unbilled Accounts” has the meaning provided in the Borrowing Base
Certificate; provided, that Agent may change the criteria for Eligible Unbilled
Accounts set forth in the Borrowing Base Certificate, from time to time, in the
exercise of its Permitted Discretion. In furtherance of and not in limitation of
the foregoing, Agent may change the criteria for Eligible Billed Accounts based
on either: (i) an event, condition or other circumstance arising after the
Closing Date, or (ii) an event, condition or other circumstance existing on the
Closing Date to the extent Agent has no written notice thereof from a Credit
Party prior to the Closing Date, in either case under clause (i) or (ii) which
materially adversely affects or, in the Permitted Discretion of Agent, could
reasonably be expected to materially adversely affect the Accounts as determined
by Agent in the exercise of its Permitted Discretion. Agent shall provide the
Funds Administrator with prior written notification of any change in the
criteria for Eligible Unbilled Accounts pursuant to the preceding sentence
together with a reasonably detailed description of the reason for such change.
For purposes of this Agreement, the net amount of Eligible Unbilled Accounts at
any time shall be the face amount of such Eligible Unbilled Accounts less any
and all returns, rebates, discounts (which may, at Agent’s option, be calculated
on shortest terms), credits, allowances or excise taxes of any nature at any
time issued, owing, claimed by Account Debtors, granted, outstanding or payable
in connection with such Accounts at such time. Any Accounts which are not
Eligible Unbilled Accounts shall nevertheless be part of the Collateral.

 

“Environmental Laws” means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, codes, injunctions, permits, licenses, agreements and
governmental restrictions, whether now or hereafter in effect, relating to the
environment or the effect of the environment on human health or to emissions,
discharges or releases of Hazardous Materials into the environment, including
ambient air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials or the clean-up or other
remediation thereof.

 

“Equipment” means, collectively, “equipment” and “fixtures” (as each term is
defined in Article 9 of the UCC) of the Credit Parties and their respective
Subsidiaries.

 

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“Equity Documents” means the Holdings Certificate of Designations and the
Holdings Charter.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Plan” means any “employee benefit plan,” as such term is defined in
Section 3(3) of ERISA (other than a Multiemployer Pension Plan), which any
Credit Party maintains, sponsors or contributes to, or, which is subject to
Section 412 of the Code or Title IV of ERISA, to which any Credit Party or any
member of the Controlled Group may have any liability, including any liability
by reason of having been a substantial employer within the meaning of
Section 4063 of ERISA at any time during the preceding five (5) years, or by
reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.

 

“Event of Default” has the meaning set forth in Section 9.1.

 

“Excess Cash Flow” has the meaning provided in the Excess Cash Flow Certificate.

 

“Excess Cash Flow Certificate” means a certificate, duly executed by a
Responsible Officer of Holdings, appropriately completed and substantially in
the form of Exhibit B hereto.

 

“Existing Debt” means all Debt set forth in Annex D attached hereto to be repaid
in full in cash on the Closing Date.

 

“Existing Letters of Credit” means letters of credit outstanding on the Closing
Date issued under that certain Credit Agreement dated as of September 30, 2004
by and among the Borrowers, as borrowers, the other “Credit Parties”, the
“Agent” and the “Lenders” (in each case, as defined therein) and listed on Annex
C.

 

“Federal Funds Rate” means, for any day, the rate of interest per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day and (ii) if no such rate is so published on such
next preceding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to Agent on such day on such transactions as reasonably
determined by Agent.

 

“Fee Letter” means that certain letter agreement dated as of the Closing Date
among the Borrowers and the Agent.

 

“Financing Documents” means this Agreement, the Notes, the Security Documents,
the Information Certificate, the Fee Letter, the Second Lien Intercreditor
Agreement, any subordination agreement to be entered into among the Agent, the
Borrowers and Holdings in connection with the Holdings Intercompany Loan, the
Assignment of PS Purchase Agreement, any fee letter between Merrill Lynch and
any Borrower relating to the transactions contemplated hereby, any Swap Contract
entered into between any Credit Party and any Eligible Swap Counterparty, and
all other documents, instruments and agreements contemplated herein or

 

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thereby and executed concurrently by a Credit Party with or in favor of the
Agent or the Lenders in connection herewith or at any time and from time to time
hereafter, as any or all of the same may be amended, supplemented, restated or
otherwise modified from time to time.

 

“Fiscal Year” means a fiscal year of Holdings and its Subsidiaries, ending on
the Sunday closest to December 31 of each calendar year.

 

“Fixed Charge Coverage Ratio” has the meaning provided in the Compliance
Certificate.

 

“Foreign Subsidiary” means, with respect to any Person, a Subsidiary of such
Person, which Subsidiary is not a Domestic Subsidiary of such Person.

 

“Funds Administrator” has the meaning set forth in the Preamble to this
Agreement.

 

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.

 

“Guarantee” by any Person means any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Debt or other obligation of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the obligee of
such Debt or other obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part), provided that the term
“Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business. The term “Guarantee” used as a verb has a
corresponding meaning.

 

“Hazardous Materials” means (i) any “hazardous substance” as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
(ii) asbestos, (iii) polychlorinated biphenyls, (iv) petroleum, its derivatives,
by-products and other hydrocarbons, and (v) any other toxic, radioactive,
caustic or otherwise hazardous substance regulated under law.

 

“Hazardous Materials Contamination” means contamination (whether now existing or
hereafter occurring) of the improvements, buildings, facilities, personality,
soil, groundwater, air or other elements on or of the relevant property by
Hazardous Materials, or any derivatives thereof, or on or of any other property
as a result of Hazardous Materials, or any derivatives thereof, generated on,
emanating from or disposed of in connection with the relevant property.

 

“Holdings” has the meaning set forth in the Recitals to this Agreement.

 

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“Holdings Certificate of Designations” means that certain Certificate of
Designation of Preferences and Rights of Series A-1 Preferred Stock of Holdings
as in effect on the Closing Date.

 

“Holdings Charter” means that certain Amended and Restated Certificate of
Incorporation of Holdings, as in effect on Closing Date.

 

“Holdings Intercompany Loan” means an intercompany loan made by Holdings to
COMSYS IT with a portion of the Net Cash Proceeds received by Holdings in
connection with an issuance of shares of common stock of Holdings, the proceeds
of which shall be used promptly by COMSYS IT to repay a portion of the
outstanding principal amount of the Loans or, to the extent required pursuant to
the terms of this Agreement, the Second Lien Term Loan, which loan shall comply
with Section 5.1(o) and be evidenced by a promissory note that has been pledged
and delivered by Holdings to Agent promptly upon the issuance thereof, for the
benefit of Agent and Lenders, as security for the Obligations.

 

“Holdings Loans” means intercompany loans made by a Borrower to Holdings to the
extent that, at the time such loan is made, a Restricted Distribution from a
Borrower to Holdings would be permitted pursuant to Section 5.4 and provided
that (i) the proceeds of such loans are used for the purposes set forth in
Section 5.4, (ii) at the request of the Agent, such loans are evidenced by
promissory notes, the sole originally executed copy of which shall be pledged to
the Agent, for the benefit of the Agent and the Lenders, as security for the
Obligations and (iii) such Holdings Loans shall be treated as a Restricted
Distribution for purposes of this Agreement, including determining compliance
with Section 5.4 and Section 7.1.

 

“Indemnitees” has the meaning set forth in Section 10.2.

 

“Information Certificate” means that certain Information Certificate of even
date herewith executed by each Credit Party and delivered to Agent.

 

“Intellectual Property” means, with respect to any Person, all patents,
trademarks, trade names, copyrights, technology, know-how and processes, and all
applications therefor, used in or necessary for the conduct of business by such
Person.

 

“Interest Period” means, as to any LIBOR Loan, (i) during the Primary
Syndication Period, the period commencing on the date such Loan is borrowed or
continued as, or converted into, a LIBOR Loan and ending on the date two
(2) weeks thereafter and (ii) thereafter, the period commencing on the date such
Loan is borrowed or continued as, or converted into, a LIBOR Loan and ending on
the date one (1), two (2), three (3) or six (6) months thereafter, or, if
available to all Lenders, ending on the date nine (9) or twelve (12) months
thereafter, as selected by the Funds Administrator pursuant to Section 2.3(f);
provided, that: (a) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the following
Business Day unless the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest Period shall
end on the preceding Business Day; (b) any Interest Period that begins on a day
for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period shall end on the last Business Day of the calendar
month at the end of such Interest Period; (c) the Funds

 

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Administrator may not select any Interest Period for a Revolving Loan which
would extend beyond the Commitment Expiry Date; and (d) the Borrowers may not
select any Interest Period for a Term Loan if, after giving effect to such
selection, the aggregate principal amount of such Term Loan having Interest
Periods ending after any date on which an installment of such Term Loan is
scheduled to be repaid would exceed the aggregate principal amount of such Term
Loan scheduled to be outstanding after giving effect to such repayment.

 

“Inventory” means “inventory” (as defined in Article 9 of the UCC) of the Credit
Parties.

 

“Investment” means any investment in any Person, whether by means of acquiring
or holding securities, capital contribution, loan, time deposit, advance,
Guarantee or otherwise.

 

“Laws” means any and all federal, state, local and foreign statutes, laws,
judicial decisions, regulations, ordinances, rules, judgments, orders, decrees,
codes, injunctions, permits, concessions, grants, franchises, governmental
agreements and governmental restrictions, whether now or hereafter in effect.

 

“LC Issuer” means a bank or trust company acceptable to Merrill Lynch, as issuer
of one or more Letters of Credit outstanding at any time.

 

“Lender” means each of (i) Merrill Lynch, (ii) each other financial institution
party hereto, (iii) each other Eligible Assignee that becomes a party hereto
pursuant to Section 12.6, (iv) Agent, to the extent of any Agent Advances and
other Revolving Loans made by Agent which have not been settled among the
Lenders pursuant to Section 11.13, and (v) the respective successors of all of
the foregoing, subject to Section 12.6(a)(ii), and “Lenders” means all of the
foregoing. In addition to the foregoing, for the purpose of identifying the
Persons entitled to share in the Collateral and the proceeds thereof under, and
in accordance with the provisions of, this Agreement and the Security Documents,
the term “Lender” shall include Eligible Swap Counterparties.

 

“Letter of Credit” means a standby letter of credit issued for the account of
any Borrower by an LC Issuer which expires by its terms within one (1) year
after the date of issuance and in any event at least thirty (30) days prior to
the Commitment Expiry Date. Notwithstanding the foregoing, a Letter of Credit
may provide for automatic extensions of its expiry date for one or more
successive one (1) year periods provided that the LC Issuer that issued such
Letter of Credit has the right to terminate such Letter of Credit on each such
annual expiration date and no renewal term may extend the term of the Letter of
Credit to a date that is later than the thirtieth (30th) day prior to the
Commitment Expiry Date.

 

“Letter of Credit Liabilities” means, at any time of calculation, the sum of
(i) the amount then available for drawing under all outstanding Letters of
Credit (without regard to whether any conditions to drawing thereunder can then
be met), to the extent subject to a Support Agreement plus (ii) the aggregate
unpaid amount of all reimbursement obligations in respect of previous drawings
made under such Letters of Credit, to the extent subject to a Support Agreement.

 

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“LIBOR” means, with respect to any LIBOR Loan for any Interest Period, a rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
(i) the rate of interest which is identified and normally published by Bloomberg
Professional Service Page BBAM 1 as the offered rate for loans in U.S. dollars
for the applicable Interest Period under the caption British Bankers Association
LIBOR Rates as of 11:00 a.m. (London time), on the second full Business Day next
preceding the first day of such Interest Period (unless such date is not a
Business Day, in which event the next succeeding Business Day will be used);
divided by (ii) the difference of one minus the daily average during such
Interest Period of the aggregate maximum reserve requirement (expressed as a
decimal) then imposed under Regulation D of the Board of Governors of the
Federal Reserve System (or any successor thereto) for “Eurocurrency Liabilities”
(as defined therein). If Bloomberg Professional Service no longer reports the
LIBOR or Agent determines in good faith that the rate so reported no longer
accurately reflects the rate available to Agent in the London Interbank Market
or if such index no longer exists or if Page BBAM 1 no longer exists or
accurately reflects the rate available to Agent in the London Interbank Market,
Agent may select a reasonable replacement index or replacement page, as the case
may be.

 

“LIBOR Loans” means any Loans which accrue interest by reference to the LIBOR,
in accordance with the terms of this Agreement.

 

“LIBOR Margin” means (i) as of the Closing Date, two and one half percent
(2.50%) per annum with respect to the Revolving Loans and other Obligations
(other than the Term Loan) and three percent (3.00%) per annum with respect to
the Term Loan, and (ii) thereafter, as of each Adjustment Date, the LIBOR Margin
shall be adjusted, if necessary, to the applicable percent per annum set forth
in the Pricing Table corresponding to the ratio of (x) Total Debt on the last
day of the most recently completed fiscal quarter prior to the applicable
Adjustment Date to (y) Adjusted EBITDA for the twelve (12) month period ending
on the last day of such fiscal quarter; provided, that if an Event of Default
has occurred and is continuing on an Adjustment Date, no reduction in the LIBOR
Margin shall occur on such Adjustment Date.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, or any other type of preferential
arrangement that has the practical effect of creating a security interest, in
respect of such asset. For the purposes of this Agreement and the other
Financing Documents, a Credit Party shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, Capital Lease or other title
retention agreement relating to such asset.

 

“Loan Account” has the meaning set forth in Section 2.6(b).

 

“Loans” means the Term Loan and the Revolving Loans, or any combination of the
foregoing, as the context may require.

 

“Major Casualty Proceeds” means (i) the aggregate insurance proceeds consisting
of cash, checks or other cash equivalent financial instruments (including Cash
Equivalents) received in connection with one or more related events under any
Property Insurance Policy or (ii) any award or other compensation consisting of
cash, checks or other cash equivalent

 

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financial instruments (including Cash Equivalents) with respect to any
condemnation of property (or any transfer or disposition of property in lieu of
condemnation), in each case, net of all fees, costs and expenses incurred in
connection with obtaining such proceeds, awards or other compensation.

 

“Margin Stock” has the meaning assigned thereto in Regulation U of the Federal
Reserve Board.

 

“Material Adverse Effect” means, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences, whether or not related, a material
adverse change in, or a material adverse effect upon, any of (i) the financial
condition, operations, business or properties of the Credit Parties taken as a
whole, (ii) the rights and remedies of Agent or Lenders under any Financing
Document, or the ability of any Credit Party to perform any of its material
obligations under any Financing Document to which it is a party, (iii) the
legality, validity or enforceability of any Financing Document, or (iv) the
existence, perfection or priority of any security interest granted in any
Financing Document or the value of any material Collateral.

 

“Maximum Lawful Rate” has the meaning set forth in Section 2.7(b).

 

“Merger” means the merger of VTP, Inc., a Delaware corporation with and into
COMSYS Holding, Inc. with COMSYS Holding, Inc. as the surviving entity
consummated on September 30, 2004 in accordance with the terms of the Merger
Documents.

 

“Merger Agreement” means that certain Agreement and Plan of Merger dated as of
July 19, 2004 among Holdings, VTP, Inc., a Delaware corporation, Venturi
Technology Partners, LLC, a North Carolina limited liability company, COMSYS
Holding, Inc., COMSYS IT and the shareholders of Holdings party thereto.

 

“Merger Documents” means the Merger Agreement, the Certificate of Merger
certified by the Secretary of State of the State of Delaware and all documents,
agreements and instruments executed in connection therewith.

 

“Merrill Lynch” means Merrill Lynch Capital, a division of Merrill Lynch
Business Financial Services Inc., and its successors.

 

“Multiemployer Pension Plan” means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Credit Party or any member of the
Controlled Group may have any liability.

 

“Net Borrowing Availability” has the meaning provided in the Borrowing Base
Certificate.

 

“Net Cash Proceeds” means, with respect to any transaction or event, an amount
equal to the cash proceeds received by the Credit Party from or in respect of
such transaction or event (including proceeds of any non-cash proceeds of such
transaction), less (i) any out-of-pocket

 

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expenses incurred by such Person in connection therewith and (ii) in the case of
an Asset Disposition, (a) the amount of any Debt secured by a Lien on the
related asset and discharged from the proceeds of such Asset Disposition,
(b) any taxes paid or payable by such Person in respect of such Asset
Disposition and (c) any reserves for purchase price adjustments and reserves
against retained liabilities required to be maintained in accordance with the
documentation governing such Asset Disposition and/or in accordance with GAAP.

 

“Notes” means the Term Notes and the Revolving Loan Notes, or any combination of
the foregoing, as the context may require.

 

“Notice of Borrowing” means a written notice of a Responsible Officer of the
Funds Administrator, appropriately completed and substantially in the form of
Exhibit E hereto.

 

“Notice of LC Credit Event” means a written notice from a Responsible Officer to
Agent with respect to any issuance, increase or extension of a Letter of Credit
specifying: (i) the date of issuance or increase of a Letter of Credit; (ii) the
expiry date of such Letter of Credit; (iii) the proposed terms of such Letter of
Credit, including the face amount; and (iv) the transactions or additional
transaction or transactions that are to be supported or financed with such
Letter of Credit or increase thereof.

 

“Obligations” means all obligations, liabilities and indebtedness (monetary
(including post-petition interest, whether or not allowed) or otherwise) of each
Credit Party under this Agreement or any other Financing Document, in each case
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due. The Obligations
shall include, without limitation, all obligations, liabilities and indebtedness
arising from or in connection with all Support Agreements and all Swap Contracts
entered into with any Eligible Swap Counterparty.

 

“OFAC” means the U.S. Department of Treasury Office of Foreign Assets Control.

 

“OFAC Lists” means, collectively, the Specially Designated Nationals and Blocked
Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed.
Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other
restricted Persons maintained pursuant to any of the rules and regulations of
OFAC or pursuant to any other applicable Executive Orders.

 

“Operative Documents” means the Financing Documents, the Merger Documents, the
PS Purchase Documents, the Venturi Staffing Purchase Agreement, the Equity
Documents and the Second Lien Debt Documents.

 

“Organizational Documents” means, with respect to any Person other than a
natural person, the documents by which such Person was organized (such as a
certificate of incorporation, certificate of limited partnership or articles of
organization, and including, without limitation, any certificates of designation
for preferred stock or other forms of preferred equity) and which relate to the
internal governance of such Person (such as by-laws, a partnership agreement or
an operating, limited liability or members agreement).

 

“Participant” has the meaning set forth in Section 12.6(b).

 

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“Payment Account” means the account specified in Section G of the Information
Certificate into which all payments by or on behalf of the Borrowers to Agent
under the Financing Documents shall be made, or such other account as Agent
shall from time to time specify by notice to the Funds Administrator.

 

“PBGC” means the Pension Benefit Guaranty Corporation and any Person succeeding
to any or all of its functions under ERISA.

 

“Pension Plan” means any ERISA Plan that is subject to Section 412 of the Code
or Title IV of ERISA.

 

“Permanent Reserve” means a reserve against the Borrowing Base in an aggregate
amount at all times equal to $5,000,000.

 

“Permitted Acquisition” means an acquisition by a Borrower of a Target that
satisfies all of the following conditions:

 

(1) The Agent shall receive not less than five (5) Business Days’ prior written
notice of such acquisition, which notice shall include a reasonably detailed
description of the proposed terms of such acquisition and identify the
anticipated closing date thereof;

 

(2) such acquisition shall be structured as (i) an asset acquisition by a
Borrower or a Domestic Wholly-Owned Subsidiary of a Borrower, (ii) a merger of
the applicable Target with and into a Borrower or a Domestic Wholly-Owned
Subsidiary of a Borrower, with such Borrower or such Subsidiary, as the case may
be, as the surviving corporation in such merger, (iii) a merger of a
Wholly-Owned Subsidiary of a Borrower with and into the applicable Target with
the applicable Target as the surviving corporation in such merger and as a
Domestic Wholly-Owned Subsidiary of a Borrower, or (iv) a purchase of one
hundred percent (100%) of the Stock of the applicable Target, which is a
domestic entity, by a Borrower or a Domestic Wholly-Owned Subsidiary of a
Borrower;

 

(3) The Agent shall receive, not less than five (5) Business Days’ prior to the
consummation of such acquisition, a due diligence package, reasonably
satisfactory to it, which package shall include, without limitation, the
following with regard to the acquisition of any Target:

 

(a) pro forma financial projections for the Borrowers and their respective
Subsidiaries for the current and next two Fiscal Years;

 

(b) in the event Accounts of the applicable Target when aggregated with the
Accounts of the Borrowers, account for greater than ten percent (10%) of all
Accounts of the Borrowers (including such Target), a field exam with respect to
such Target;

 

(c) historical financial statements of the applicable Target for the three
(3) fiscal years prior to such acquisition (or, if such Target has not been in
existence for three (3) years, for each year such Target has existed or if such
historical financial statements do not exist, then such historical financial
statements as are available);

 

17

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(d) a general description of the applicable Target’s business;

 

(e) pending material litigation involving the applicable Target;

 

(f) description of the proposed method of financing the acquisition, including
sources and uses;

 

(g) locations of all personal and real property of the applicable Target,
including the location of its chief executive office;

 

(h) a description of, and if requested by the Agent, copies of all material
agreements binding upon the applicable Target or any of its real property;

 

(i) any other material due diligence information with respect to such
acquisition reasonably required by the Agent;

 

(j) if obtained in connection with the acquisition, Phase I Environmental
Reports and related information regarding any property owned, leased or
otherwise used by the applicable Target; and

 

(k) a financial due diligence report from a big four or other nationally
recognized accounting firm reasonably acceptable to the Agent with respect to
any Target whose Relative Contribution, as of the closing date of such
acquisition, would equal or exceed 20%. “Relative Contribution” means, with
respect to any Target, an amount (expressed as a percentage) equal to: (x) Pro
Forma EBITDA of such Target, divided by (y) Adjusted EBITDA of the Borrowers and
their Subsidiaries plus Pro Forma EBITDA of such Target;

 

(4) the Agent shall receive evidence reasonably satisfactory to it that the
applicable Target has had a positive Pro Forma EBITDA for the most recent four
fiscal quarter period ending prior to the acquisition date for which financial
statements are available;

 

(5) evidence that (a) the applicable Target has in place, with financially sound
and reputable insurers, public liability and property damage insurance with
respect to its business and properties against loss or damage of the kinds
customarily carried or maintained by Persons of established reputation engaged
in similar businesses and in commercially reasonable amounts and (b) pursuant to
endorsements and/or assignments in form and substance reasonably satisfactory to
the Agent, (i) the Agent has been named as lender’s loss payee, for its benefit
and the benefit of the Lenders, in the case of casualty insurance, and (ii) the
Agent and each of the Lenders have been named as additional insureds in the case
of all liability insurance;

 

(6) the Agent, for the benefit of the Agent and Lenders, (a) is granted a first
priority perfected Lien (subject only to Permitted Liens) on all real and
personal property being acquired pursuant to such acquisition (and, in the case
of an acquisition involving the purchase of any applicable Target’s capital
stock, all of such capital stock shall be pledged to the Agent for the benefit
of the Agent and Lenders, and such Target shall guarantee the Obligations and
grant to the Agent, for the benefit of the Agent and Lenders, a first priority
perfected Lien (subject only to Permitted Liens) on such Person’s assets) and
(b) will be provided such other documents and instruments as the Agent shall
reasonably request to perfect or maintain the perfection of its Lien

 

18

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on all real and personal property of the applicable Target, as the case may be
(including, without limitation, in the event any Target maintains Collateral at
any leased locations or in any warehouse facility, the Borrowers shall use
commercially reasonable efforts to obtain any landlord agreements and/or bailee
waivers in form and substance reasonably acceptable to the Agent);

 

(7) (a) after giving effect to such acquisition and the incurrence of any Loans,
other Debt or Contingent Obligations in connection therewith, (i) no Default or
Event of Default shall exist, (ii) the Credit Parties shall be in compliance on
a pro forma basis with the covenants set forth in Article VII recomputed for the
most recently ended quarter of the Credit Parties for which information is
available regarding the business being acquired, (iii) the Credit Parties shall
demonstrate to the Agent projected pro forma compliance with the covenants set
forth in Article VII, for the twelve (12) month period immediately following the
consummation of the proposed acquisition based on the combined operating results
of the applicable Target and of the Credit Parties and their Subsidiaries for
the twelve (12) month period ending on the last day of the month for which
financial statements for the applicable Target and for the Credit Parties are
available (provided, that, for purposes of the foregoing clauses (ii) and (iii),
respectively, (x) in determining the Borrowers’ pro forma compliance with the
covenants set forth in Article VII, the maximum permitted ratio of Total Debt to
Adjusted EBITDA at such time pursuant to Section 7.2 shall be deemed to be the
maximum permitted ratio at such time minus 0.25 and (y) anything contained in
Article VII to the contrary notwithstanding, the Credit Parties shall be deemed
to be bound by the covenants set forth in such Article VII at such time); and
(b) assuming for the purposes of this clause (b) only that the total
consideration paid or payable in connection with the consummation of such
acquisition (including all transaction costs, Debt and Contingent Obligations
incurred or assumed, as the case may be, in connection with such acquisition,
but excluding any portion of such total consideration (i) that is to be paid
with Net Cash Proceeds of any equity issuance by Holdings of common stock of
Holdings, or (ii) that is to be satisfied by the issuance by Holdings of common
stock of Holdings; provided, that, for purposes of determining the amount of any
Earnout incurred in connection with such acquisition, the amount of such Earnout
shall be deemed to be the aggregate amount reasonably expected to be paid by the
Borrowers in connection with such Earnout, as determined by Borrowers in their
reasonable business judgment) is to be paid in cash with proceeds of Revolving
Loans, both before and after giving pro forma effect to such acquisition and the
borrowing of such Revolving Loans, the Borrowers would have Net Borrowing
Availability of not less than $25,000,000 (provided, that, for purposes of the
foregoing clause (b), in determining Net Borrowing Availability, the Permanent
Reserve shall not be deducted in the calculation of the Borrowing Base);

 

(8) all material consents necessary for such acquisition (including such
consents as the Agent deems reasonably necessary) have been acquired and such
acquisition shall have been approved by the applicable Target’s board of
directors or similar governing body;

 

(9) the applicable Target must be engaged in substantially the same type of
business as is currently conducted by the Borrowers;

 

(10) the Credit Parties’ computation of Pro Forma EBITDA shall comply with this
Agreement;

 

19

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(11) subject to clause (6) above, as soon as practicable after the closing of
such acquisition, and in any event within ten (10) Business Days after such
closing, the Borrowers shall deliver copies of all documents executed in
connection with such acquisition to the Agent; and

 

(12) the total consideration paid or payable (including all transaction costs,
all Debt, liabilities and Contingent Obligations incurred or assumed and, with
respect to any Earnout or comparable payment obligation in connection therewith,
the aggregate amount reasonably expected to be paid by the Borrowers in
connection with such Earnout, as determined by the Borrowers in their reasonable
business judgment, whether or not reflected on a consolidated balance sheet of
the Borrowers and Target) for (i) any individual acquisition or group of related
acquisitions shall not exceed $25,000,000 and (ii) all acquisitions consummated
during the term of this Agreement shall not exceed $75,000,000 in the aggregate
for all such acquisitions.

 

An acquisition of a Target that does not otherwise satisfy all of the
requirements in clauses (1) through (12) above shall constitute a “Permitted
Acquisition” if consented to by the Agent; provided, that if an acquisition of a
Target does not satisfy clauses (7) or (12) above, such acquisition shall only
constitute a “Permitted Acquisition” if consented to by the Agent and the
Required Lenders. In the event that prior to the consummation of such
acquisition, the Borrowers obtain knowledge of any material change to any of the
documents or information previously provided pursuant to clauses (3)(a) through
(c), (3)(k), (4), (7) and (10) above, the Borrowers shall promptly notify the
Agent of such change.

 

“Permitted Acquisition Reserve” has the meaning set forth in Section 2.1(c).

 

“Permitted Contest” means a contest maintained in good faith by appropriate
proceedings promptly instituted and diligently conducted and with respect to
which such reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made; provided that compliance with the
obligation that is the subject of such contest is effectively stayed during such
challenge.

 

“Permitted Discretion” means the Agent’s judgment exercised in good faith based
upon its consideration of any reasonable factor which the Agent believes in good
faith could adversely affect the value of any Collateral, including any Accounts
of any Borrower, or the amount which the Agent and the Lenders would be likely
to receive (after giving consideration to delays in payment and costs of
enforcement) in the liquidation of such Collateral. In exercising such judgment,
the Agent may consider such factors which are already included in or tested by
the definition of Eligible Billed Accounts or Eligible Unbilled Accounts, as
well as any of the following: (i) the financial and business climate of any
Borrower’s industry, (ii) changes in collection history and dilution with
respect to the Accounts of any Borrower, (iii) changes in any concentration of
risk with respect to Accounts of any Borrower, and (iv) any other factors that
change in any material respect the credit risk of lending to the Borrowers on
the security of the Accounts and other property of the Borrowers.

 

“Permitted Liens” means Liens permitted pursuant to Section 5.2.

 

20

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“Person” means any natural person, corporation, limited liability company,
professional association, limited partnership, general partnership, joint stock
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity, and
any government or agency or political subdivision thereof.

 

“PFI” has the meaning set forth in the Preamble to this Agreement.

 

“Pricing Table” means the following table:

 

Total Debt to

Adjusted

EBITDA Ratio

--------------------------------------------------------------------------------

  

Revolving Loans

and all other

Obligations (other

than the Term

Loan)

--------------------------------------------------------------------------------

    Term Loan

--------------------------------------------------------------------------------

    

Prime

Rate

--------------------------------------------------------------------------------

    LIBOR

--------------------------------------------------------------------------------

   

Prime

Rate

--------------------------------------------------------------------------------

    LIBOR

--------------------------------------------------------------------------------

 

Greater than or equal to 2.50 to 1.0

   1.50 %   2.50 %   2.00 %   3.00 %

Less than 2.50 to 1.0

   1.25 %   2.25 %   1.75 %   2.75 %

 

For purposes of the Pricing Table, if the Funds Administrator, on behalf of the
Borrowers, shall at any time fail to timely deliver a Compliance Certificate,
then effective as of the tenth (10th) Business Day following the date on which
such Compliance Certificate was due, each applicable Prime Rate Margin and each
applicable LIBOR Margin shall be conclusively presumed to equal the highest
applicable Prime Rate Margin and the highest applicable LIBOR Margin specified
in the Pricing Table until the date of delivery of such Compliance Certificate.

 

“Primary Syndication Period” means a period commencing on the Closing Date and
ending on the date the Agent notifies the Funds Administrator that it has
completed the primary syndication of the Loans (which notice shall be delivered
promptly after such primary syndication), which date shall in no event be later
than ninety (90) days following the Closing Date.

 

“Prime Rate” means a variable per annum rate, as of any date of determination,
equal to the greater of (i) the Federal Funds Rate plus one-half of one percent
(0.50%) per annum and (ii) the rate of interest which is identified and normally
published by Bloomberg Professional Service Page Prime as the “Prime Rate” (or,
if more than one rate is published as the Prime Rate, then the highest of such
rates). Any change in Prime Rate will become effective as of the date the rate
of interest which is so identified as the “Prime Rate” is different from that
published on the preceding Business Day. If Bloomberg Professional Service no
longer reports the Prime Rate, or if such Page Prime no longer exists, or Agent
determines in good faith that the rate so reported no longer accurately reflects
an accurate determination of the prevailing Prime Rate, Agent may select a
reasonably comparable index or source to use as the basis for the Prime Rate.

 

“Prime Rate Loans” means Loans which accrue interest by reference to the Prime
Rate, in accordance with the terms of this Agreement.

 

21

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“Prime Rate Margin” means (i) as of the Closing Date, one and one half percent
(1.50%) per annum with respect to the Revolving Loans and other Obligations
(other than the Term Loan) and two percent (2.00%) per annum with respect to the
Term Loan, and (ii) thereafter, as of each Adjustment Date, the Prime Rate
Margin shall be adjusted, if necessary, to the applicable percent per annum set
forth in the Pricing Table corresponding to the ratio of (x) Total Debt on the
last day of the most recently completed fiscal quarter prior to the applicable
Adjustment Date to (y) Adjusted EBITDA for the twelve (12) month period ending
on the last day of such fiscal quarter; provided, that if an Event of Default
has occurred and is continuing on an Adjustment Date, no reduction in the Prime
Rate Margin shall occur on such Adjustment Date.

 

“Prior COMSYS Credit Parties” means COMSYS IT and COMSYS Services and, prior to
the merger of COMSYS Holding, Inc. with and into COMSYS IT, COMSYS Holding,
Inc., a Delaware corporation.

 

“Prior Credit Agreement” means that certain Credit Agreement dated as of
September 30, 2004 by and among COMSYS IT and COMSYS Services, as the borrowers,
the other Credit Parties, the “Agent” (as defined therein) and the “Lenders” (as
defined therein), as the same was amended from time to time prior to the date
hereof.

 

“Prior Venturi Credit Parties” means Holdings, PFI and, prior to the merger of
Venturi Technology Partners, LLC with and into COMSYS Services, Venturi
Technology Partners, LLC, a North Carolina limited liability company.

 

“Pro Forma EBITDA” means (i) EBITDA attributable to each Permitted Acquisition
(with such pro forma adjustments as are reasonably acceptable to Agent based
upon data presented to Agent to its reasonable satisfaction) consummated during
the one (1) year period preceding the date of determination calculated solely
for a number of months immediately preceding the consummation of the applicable
Permitted Acquisition, which number equals twelve (12) minus the number of
months following the consummation of the applicable Permitted Acquisition for
which financial statements of Holdings and its Subsidiaries have been delivered
to Agent pursuant to Section 4.1, and (ii) for purposes of determining
compliance with the definition of “Permitted Acquisition,” EBITDA of the Target
of any proposed Permitted Acquisition (adjusted with such pro forma adjustments
as are reasonably acceptable to Agent based upon data presented to Agent to its
reasonable satisfaction) calculated for the four (4) fiscal quarters immediately
preceding the consummation of the proposed Permitted Acquisition.

 

“Property Insurance Policy” means any insurance policy maintained by any Credit
Party covering losses with respect to tangible real or personal property or
improvements or losses from business interruption.

 

“Pro Rata Share” means (i) with respect to a Lender’s right to receive payments
of principal and interest with respect to the Term Loan, the Term Loan
Commitment Percentage of such Lender, (ii) with respect to a Lender’s obligation
to make Revolving Loans, such Lender’s right to receive payments of principal
and interest with respect thereto, such Lender’s right to receive the unused
line fee described in Section 2.3(b), and such Lender’s obligation to share in
Letter of Credit Liabilities and to receive the related Letter of Credit fee
described in

 

22

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Section 2.5(b), the Revolving Loan Commitment Percentage of such Lender and
(iii) for all other purposes (including without limitation the indemnification
obligations arising under Section 11.6) with respect to any Lender, the
percentage obtained by dividing (x) the sum of the Revolving Loan Commitment
Amount of such Lender (or, in the event the Revolving Loan Commitment shall have
been terminated, such Lender’s then existing Revolving Loan Outstandings), plus
such Lender’s then outstanding principal amount of the Term Loan by (y) the sum
of the Revolving Loan Commitment (or, in the event the Revolving Loan Commitment
shall have been terminated, the then existing Revolving Loan Outstandings of all
Lenders), plus the then outstanding principal amount of the Term Loan.

 

“PS Additional Earnout” means all amounts payable by COMSYS IT, with respect to
the “Additional Earnout Payment” (as such term is defined in Section 1.5(b) of
the PS Purchase Agreement, as in effect on the PS Closing Date), to be paid in
accordance with Section 1.5(b) of the PS Purchase Agreement, as in effect on the
PS Closing Date.

 

“PS Annual Earnout” means the PS Year One Earnout, the PS Year Two Earnout
and/or the PS Year Three Earnout.

 

“PS Annual Earnout Payments” means all amounts payable by COMSYS IT in respect
of the PS Year One Earnout, the PS Year Two Earnout and/or the PS Year Three
Earnout.

 

“PS Closing Date” means October 31, 2005.

 

“PS Earnout” means the PS Year One Earnout, the PS Year Two Earnout, the PS Year
Three Earnout and the PS Additional Earnout.

 

“PS Earnout Period” means the PS Year One Earnout Period, the PS Year Two
Earnout Period and the PS Year Three Earnout Period.

 

“PS Earnout Repayment Amount” means, with respect to any PS Earnout Period, the
amount by which the applicable PS Interim Earnout Payment made by a Credit Party
during such PS Earnout Period exceeds the applicable PS Annual Earnout Payment
required to be paid at the end of such PS Earnout Period.

 

“PS Earnout Repayment Event” means, with respect to any PS Earnout Period, a
determination in accordance with provisions of the PS Purchase Agreement, as in
effect on the PS Closing Date, that the PS Annual Earnout Payment required to be
paid at the end of such PS Earnout Period in accordance with Section 1.5(a)(i)
of the PS Purchase Agreement, as in effect on the PS Closing Date, is less than
the PS Interim Earnout Payment made by or on behalf of COMSYS IT during such PS
Earnout Period in accordance with Section 1.5(a)(v) of the PS Purchase
Agreement, as in effect on the PS Closing Date.

 

“PS Interim Earnout Payments” mean, with respect to each PS Earnout Period, each
“Interim Earnout Payment” (as such term is defined in Section 1.5(a)(v) of the
PS Purchase Agreement, as in effect on the PS Closing Date), paid in accordance
with Section 1.5(a)(v) of the PS Purchase Agreement, as in effect on the PS
Closing Date.

 

23

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“PS Purchase Agreement” means that certain Stock Purchase Agreement dated as of
the PS Closing Date by and among COMSYS IT and the PS Seller.

 

“PS Purchase Documents” means the PS Purchase Agreement and all documents,
agreements and instruments executed in connection therewith.

 

“PS Seller” means the Eddie and Stephanie Lee Family Trust, as amended.

 

“PS Year One Earnout” means all amounts that are or may become payable by COMSYS
IT, with respect to the PS Year One Earnout Period in accordance with
Section 1.5(a)(i) of the PS Purchase Agreement, as in effect on the PS Closing
Date.

 

“PS Year One Earnout Period” means the “First Earnout Period” as such term is
defined in Section 1.5(a)(iii) of the PS Purchase Agreement, as in effect on the
PS Closing Date.

 

“PS Year One Earnout Reserve” means (a) $2,500,000 minus (b) the aggregate
amount of any payments in respect of the PS Year One Earnout permitted to be
paid pursuant to the terms hereof and, in fact, so paid (provided that,
notwithstanding the foregoing, at such time as COMSYS IT shall have no further
obligations (including contingent obligations) with respect to the PS Year One
Earnout, the PS Year One Earnout Reserve with respect to the PS Year One Earnout
Period shall be reduced to zero).

 

“PS Year Two Earnout” means all amounts that are or may become payable by COMSYS
IT, with respect to the PS Year Two Earnout Period in accordance with
Section 1.5(a)(i) of the PS Purchase Agreement, as in effect on the PS Closing
Date.

 

“PS Year Two Earnout Period” means the “Second Earnout Period” as such term is
defined in Section 1.5(a)(iii) of the PS Purchase Agreement, as in effect on the
PS Closing Date.

 

“PS Year Two Earnout Reserve” means (a) $2,500,000 minus (b) the aggregate
amount of any payments in respect of the PS Year Two Earnout permitted to be
paid pursuant to the terms hereof and, in fact, so paid (provided that,
notwithstanding the foregoing, at such time as COMSYS IT shall have no further
obligations (including contingent obligations) with respect to the PS Year Two
Earnout, the PS Year Two Earnout Reserve with respect to the PS Year Two Earnout
Period shall reduced to zero).

 

“PS Year Three Earnout” means all amounts that are or may become payable by
COMSYS IT, with respect to the PS Year Three Earnout Period in accordance with
Section 1.5(a)(i) of the PS Purchase Agreement, as in effect on the PS Closing
Date.

 

“PS Year Three Earnout Period” means the “Third Earnout Period” as such term is
defined in Section 1.5(a)(iii) of the PS Purchase Agreement, as in effect on the
PS Closing Date.

 

“PS Year Three Earnout Reserve” means (a) $3,250,000 minus (b) the aggregate
amount of any payments in respect of the PS Year Three Earnout and the PS
Additional Earnout, in each case permitted to be paid pursuant to the terms
hereof and, in fact, so paid (provided that, notwithstanding the foregoing, at
such time as COMSYS IT shall have no further obligations (including contingent
obligations) with respect to the PS Year Three Earnout and the PS Additional
Earnout, the PS Year Three Earnout Reserve with respect to the PS Year Three
Earnout Period shall reduced to zero).

 

24

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“Pure Solutions” has the meaning set forth in the Preamble to this Agreement.

 

“Real Property” means real property of the Credit Parties or any of their
respective Subsidiaries, together with all buildings, structures and other
improvements thereon, and all licenses, easements and appurtenances related
thereto.

 

“Reimbursement Obligations” means, at any date, the obligations of the Borrowers
then outstanding to reimburse Merrill Lynch for payments made by Merrill Lynch
under a Support Agreement.

 

“Reinvestment Reserve” has the meaning set forth in Section 2.1(c).

 

“Required Lenders” means at any time Lenders holding (i) greater than fifty
percent (50%) of the sum of the Revolving Loan Commitment and the outstanding
principal balance of the Term Loan or (ii) if the Revolving Loan Commitment has
been terminated, greater than fifty percent (50%) of the sum of (x) the
aggregate outstanding principal balance of the Loans plus (y) the aggregate
amount of Reimbursement Obligations.

 

“Reserves” means such amounts as Agent may from time to time establish and
revise, in each case in the exercise of its Permitted Discretion, reducing the
amount of Revolving Loans and Support Agreements which would otherwise be
available to the Borrowers under the lending formula(s) provided for herein:
(a) to reflect events, conditions, contingencies or risks which, as determined
by Agent in the exercise of its Permitted Discretion, adversely affect, or could
reasonably be expected to adversely affect, any of: (i) the Collateral or any
other property which is security for the Obligations or its value, (ii) the
assets, business or prospects of any Credit Party or (iii) the Liens and other
rights of Agent or any Lender in the Collateral (including the enforceability,
perfection and priority thereof), (b) to reflect Agent’s good faith belief that
any collateral report or financial information furnished by or on behalf of any
Credit Party to Agent is or may have been incomplete, inaccurate or misleading
in any material respect, or (c) to reflect accrued and unpaid interest and fees
hereunder. Agent shall provide the Funds Administrator with prior written
notification of the establishment of any Reserves or the change in any Reserves
in effect pursuant to the preceding sentence together with a reasonably detailed
description of the reason for such change. To the extent Agent may, in
accordance with any other terms hereof, revise the lending formula(s) used to
determine the Borrowing Base or establish new criteria or revise existing
criteria for Eligible Billed Accounts or Eligible Unbilled Accounts, Agent shall
not also establish a Reserve for the same purpose. The amount of any Reserve
established by Agent shall have a reasonable relationship to the event,
condition or other matter which is the basis for such Reserve as determined by
Agent in its Permitted Discretion. Without limitation of the foregoing, Agent
shall have the right to establish a Reserve for the amount by which the total
dilution of Accounts exceeds five percent (5%), with dilution referring to all
actual and potential offsets to an Account.

 

25

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“Responsible Officer” means any of the Chief Executive Officer, Chief Financial
Officer, Vice President of Finance, Senior Vice President – Corporate
Development or General Counsel of a Credit Party.

 

“Restricted Account” means each bank account of the Credit Parties labeled as a
“Restricted Account” on the Bank Account Schedule of the Information
Certificate, as in effect on the Closing Date.

 

“Restricted Distribution” means as to any Person (i) any dividend or other
distribution on any equity interest in such Person (except those payable solely
in its equity interests of the same class) or (ii) any payment on account of
(a) the purchase, redemption, retirement, defeasance, surrender or acquisition
of any equity interests in such Person or any claim respecting the purchase or
sale of any equity interest in such Person or (b) any option, warrant or other
right to acquire any equity interests in such Person.

 

“Revolving Loan Borrowing” means a borrowing of a Revolving Loan.

 

“Revolving Loan Commitment” means the sum of each Lender’s Revolving Loan
Commitment Amount.

 

“Revolving Loan Commitment Amount” means, as to any Lender, the dollar amount
set forth opposite such Lender’s name on the Commitment Annex under the column
“Revolving Loan Commitment Amount,” or, if different, in the most recent
Assignment Agreement to which such Lender is a party.

 

“Revolving Loan Commitment Percentage” means, as to any Lender, the percentage
set forth opposite such Lender’s name on the Commitment Annex under the column
“Revolving Loan Commitment Percentage,” or, if different, in the most recent
Assignment Agreement to which such Lender is a party.

 

“Revolving Loan Limit” means, at any time, the lesser of (i) the Borrowing Base,
plus any Agent Advances and (ii) the Revolving Loan Commitment.

 

“Revolving Loan Note” has the meaning set forth in Section 2.4.

 

“Revolving Loan Outstandings” means at any time of calculation the sum of the
then existing aggregate outstanding principal amount of Revolving Loans and the
then existing Letter of Credit Liabilities.

 

“Revolving Loans” has the meaning set forth in Section 2.2(a), and includes all
Agent Advances.

 

“Second Lien Agent” means Merrill Lynch, together with its successors and
assigns, solely in its capacity as administrative agent for the Second Lien
Lenders under the Second Lien Debt Documents.

 

26

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“Second Lien Collateral Agent” means NexBank, SSB, a Texas-chartered Savings
Bank, together with its successors and assigns, in its capacity as collateral
agent for the Second Lien Lenders under the Second Lien Debt Documents.

 

“Second Lien Credit Agreement” means that certain Term Loan Credit Agreement of
even date herewith, by and among the Second Lien Agent, the Second Lien
Collateral Agent, the Second Lien Lenders and the Borrowers, as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms of the Second Lien Intercreditor Agreement.

 

“Second Lien Debt” means the Second Lien Term Loan owing by the Borrowers to the
Second Lien Lenders, together with capitalized interest, if any, and fees, costs
and other amounts, in each case, incurred pursuant to the terms of the Second
Lien Debt Documents.

 

“Second Lien Debt Documents” means the Second Lien Credit Agreement, including
the exhibits and schedules thereto, and all agreements, documents and
instruments executed and delivered pursuant thereto or in connection therewith,
in each case, as amended, restated, supplemented or otherwise modified in
accordance with the terms of the Second Lien Intercreditor Agreement and this
Agreement.

 

“Second Lien Debt Liens” means a Lien in favor of the Second Lien Collateral
Agent second in priority to the Liens granted to the Agent under the Financing
Documents (but in any event subject to Permitted Liens), for the benefit of the
Second Lien Collateral Agent and Second Lien Lenders, on the assets and capital
stock of the Credit Parties (other than the capital stock of Holdings) and their
Subsidiaries.

 

“Second Lien Intercreditor Agreement” means that certain Intercreditor and Lien
Subordination Agreement of even date herewith, by and among the Second Lien
Agent, the Second Lien Collateral Agent, the Second Lien Lenders, Agent, the
Credit Parties and their Subsidiaries, as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.

 

“Second Lien Lenders” means each “Lender” under and as defined in the Second
Lien Credit Agreement and any other lender thereunder, together with their
respective successors and assigns.

 

“Second Lien Term Loan” means the term loan in the aggregate principal amount of
$100,000,000 made to the Borrowers on the date hereof by the Second Lien Lenders
pursuant to the Second Lien Credit Agreement.

 

“Security Documents” means any agreement, document or instrument executed
concurrently herewith or at any time hereafter pursuant to which one or more
Credit Parties or any other Person either (i) Guarantees payment or performance
of all or any portion of the Obligations and/or (ii) provides, as security for
all or any portion of the Obligations, a Lien on any of its assets in favor of
Agent for its own benefit and the benefit of the Lenders, as any or all of the
same may be amended, supplemented, restated or otherwise modified from time to
time.

 

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“Series A-1 Preferred Stock” means the “Series A-1 Preferred Stock” as defined
in the Holdings Certificate of Designations.

 

“Series A-1 Preferred Stock Redemption” means a redemption by Holdings (whether
in a single transaction or a series of transactions) of all or any portion of
(i) the Series A-1 Preferred Stock that has been issued and is outstanding prior
to the Closing Date and (ii) the Series A-1 Preferred Stock issued after the
Closing Date solely to the extent such Series A-1 Preferred Stock has been
issued as a dividend on Series A-1 Preferred Stock in accordance with the terms
of the Holdings Certificate of Designations.

 

“Settlement Date” has the meaning set forth in Section 11.13(a).

 

“Stated Rate” has the meaning set forth in Section 2.7(b).

 

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, limited partnership or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions (without
regard to the occurrence of any contingency) are at the time directly or
indirectly owned by such Person. Unless otherwise specified, the term Subsidiary
shall refer to a Subsidiary of the Borrowers.

 

“Support Agreement” has the meaning set forth in Section 2.5(a).

 

“Swap Contract” means any “swap agreement,” as defined in Section 101 of the
Bankruptcy Code, that is intended to provide protection against fluctuations in
interest or currency exchange rates.

 

“Syndication Agent” has the meaning set forth in the Preamble to this Agreement.

 

“Target” means any Person or material group of assets (excluding a product line,
formula or recipe) acquired or proposed to be acquired pursuant to a Permitted
Acquisition.

 

“Taxes” has the meaning set forth in Section 2.8.

 

“Term Loan” has the meaning set forth in Section 2.1.

 

“Term Loan Commitment Percentage” means, as to any Lender, the percentage set
forth opposite such Lender’s name on the Commitment Annex under the column “Term
Loan Commitment Percentage,” or, if different, in the most recent Assignment
Agreement to which such Lender is a party.

 

“Term Note” has the meaning set forth in Section 2.4.

 

“Termination Date” has the meaning set forth in Section 2.2(c).

 

“Total Debt” has the meaning provided in the Compliance Certificate.

 

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“Total Debt to Adjusted EBITDA Ratio” has the meaning provided in the Compliance
Certificate.

 

“Transaction” means all of the factual elements relevant to the expected Tax
treatment of any investment, entity, plan or arrangement contemplated pursuant
to this Agreement, and includes any series of steps carried out as part of a
plan.

 

“UCC” means the Uniform Commercial Code of the State of Illinois or of any other
state the laws of which are required to be applied in connection with the
perfection of security interests in any Collateral.

 

“Venturi Staffing Purchase Agreement” means that certain Stock Purchase
Agreement dated as of July 19, 2004, by and among Holdings, PFI, as the seller,
and Compass CS Inc., as the buyer, and all agreements, documents and instruments
executed in connection therewith.

 

“Wholly-Owned Subsidiary” means any Subsidiary in which (other than directors’
qualifying shares required by law) one hundred percent (100%) of equity
securities, at the time as of which any determination is being made, is owned,
beneficially and of record, by a Borrower, or by one or more of the other
Wholly-Owned Subsidiaries, or both.

 

Section 1.2 Accounting Terms and Determinations.

 

Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder (including without
limitation determinations made pursuant to the exhibits hereto) shall be made,
and all financial statements required to be delivered hereunder shall be
prepared on a consolidated basis in accordance with GAAP applied on a basis
consistent (except for changes concurred with by the Borrowers’ independent
public accountants) with the most recent audited consolidated financial
statements of Holdings and its Consolidated Subsidiaries delivered to Agent and
each of the Lenders; provided that if (a) the Borrowers shall object to
determining compliance with the provisions of this Agreement on such basis by
written notice delivered to Agent and the Lenders at the time of delivery of
required financial statements due to any change in GAAP or the rules promulgated
with respect thereto or (b) Agent or the Required Lenders shall so object in
writing by written notice delivered to the Funds Administrator within sixty
(60) days after delivery of such financial statements, then such calculations
shall be made on a basis consistent with the most recent financial statements
delivered by the Borrowers to the Lenders as to which no such objection shall
have been made. All amounts used for purposes of financial calculations required
to be made herein shall be without duplication.

 

Section 1.3 Other Definitional Provisions.

 

References in this Agreement to “Articles,” “Sections,” “Annexes” or “Exhibits”
shall be to Articles, Sections, Annexes or Exhibits of or to this Agreement
unless otherwise specifically provided. Any term defined herein may be used in
the singular or plural. “Include,” “includes” and “including” shall be deemed to
be followed by “without limitation.” Except as otherwise specified herein,
references to any Person include the successors and assigns of such Person.
References “from” or “through” any date mean, unless otherwise specified, “from
and including” or “through and including,” respectively. References to any
statute or act shall include all related current regulations and all amendments
and any successor statutes, acts and regulations.

 

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ARTICLE II

LOANS AND LETTERS OF CREDIT

 

Section 2.1 Term Loan.

 

(a) Term Loan Amounts. On the terms and subject to the conditions set forth
herein, the Lenders hereby agree to make to the Borrowers on the Closing Date a
term loan in an original principal amount equal to $10,000,000 (the “Term
Loan”). Each Lender’s obligation to fund the Term Loan shall be limited to such
Lender’s Term Loan Commitment Percentage of the Term Loan, and no Lender shall
have any obligation to fund any portion of the Term Loan required to be funded
by any other Lender, but not so funded. The Term Loan Commitment of each Lender
shall expire concurrently with the making of the Term Loan on the Closing Date.
The Borrowers shall not have any right to reborrow any portion of the Term Loan
which is repaid or prepaid from time to time.

 

(b) Scheduled Repayments. The Borrowers shall repay the Term Loan in equal
installments of $1,250,000 due and payable on the last day of each December,
March, June and September of each Fiscal Year, commencing on March 31, 2006,
with the remaining principal balance thereof, if any, being immediately due and
payable in full on December 31, 2007.

 

(c) Mandatory Prepayments. There shall become due and payable and the Borrowers
shall prepay the Term Loan (and the Revolving Loans, to the extent required by
Section 2.1(e)) in the following amounts and at the following times:

 

(i) for so long as any portion of the Term Loan remains outstanding, on the
ninety-fifth (95th) day following the last day of each Fiscal Year, beginning
with the Fiscal Year ending closest to December 31, 2006, an amount equal to
(A) if the Total Debt to Adjusted EBITDA Ratio, determined as of the last day of
such Fiscal Year is greater than 3.25 to 1.00, seventy five percent (75%) of
Excess Cash Flow, or (B) if the Total Debt to Adjusted EBITDA Ratio, determined
as of the last day of such Fiscal Year is less than or equal to 3.25 to 1.00,
fifty percent (50%) of such Excess Cash Flow, provided, that if the Total Debt
to Adjusted EBITDA Ratio calculated as of the last day of any Fiscal Year is
less than 2.00 to 1.00 for such Fiscal Year, then no prepayment shall be
required pursuant to this Section 2.1(c)(i) with respect to such Fiscal Year (in
each such case, Total Debt to Adjusted EBITDA Ratio shall be determined by
reference to the respective Compliance Certificate absent demonstrable error);

 

(ii) on the date on which any Credit Party other than a Foreign Subsidiary (or
Agent as loss payee or assignee thereof) receives any payment which constitutes
Major Casualty Proceeds, an amount equal to the amount of such payment;
provided, that such Credit Party, at its election, may either reinvest such
payment within one hundred twenty (120) days after the date of receipt of such
Major Casualty Proceeds or enter into a binding commitment to reinvest such
payment within said one hundred twenty (120) days (provided such Credit Party
subsequently consummates such reinvestment within one hundred eighty (180) days
following the receipt of such Major Casualty Proceeds), in productive assets
then used or usable in the

 

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business of such Credit Party, any Borrower or any Domestic Wholly-Owned
Subsidiary of any Borrower; provided further, that the aggregate amount which
may be reinvested by the Credit Parties pursuant to the preceding proviso may
not exceed $1,000,000 in any Fiscal Year. If the applicable Credit Party does
not intend to reinvest such payment, or if the time period set forth in this
sentence expires without such Credit Party having reinvested such payment, the
Borrowers shall prepay the Loans in an amount equal to such payment;

 

(iii) (A) promptly upon receipt by any Credit Party of the proceeds from the
issuance and sale of any Debt securities or equity securities (other than
(1) proceeds of Debt securities expressly permitted pursuant to Section 5.1,
(2) proceeds of the issuance of equity securities by Holdings received on or
before the Closing Date, (3) proceeds from the issuance of equity securities to
current or former directors, employees or members of the management of any
Credit Party, (4) proceeds of the issuance of equity securities to Holdings or
any Subsidiary, (5) proceeds of the issuance of equity securities concurrently
used to finance the consummation of a Permitted Acquisition and (6) proceeds
from the issuance of common stock of Holdings described in clauses (B), (C) and
(D) of this Section 2.1(c)(iii)), an amount equal to one hundred percent
(100%) of the Net Cash Proceeds of such issuance and sale;

 

(B) in the event Holdings issues and sells common stock to be used to consummate
a Series A-1 Preferred Stock Redemption (other than any such issuance and sale
constituting the 2006 Equity Issuance), promptly upon receipt by Holdings of the
proceeds from such issuance and sale, an amount equal to fifty percent (50%) of
the Net Cash Proceeds of any such issuance and sale;

 

(C) in the event Holdings issues and sells common stock to be used to consummate
a Permitted Acquisition (other than any such issuance and sale constituting the
2006 Equity Issuance) that has been identified in a certificate executed by a
Responsible Officer of the Funds Administrator and delivered to Agent
contemporaneously therewith, promptly upon receipt by Holdings of such Net Cash
Proceeds, an amount equal to one hundred percent (100%) of such Net Cash
Proceeds; provided, that, notwithstanding the foregoing, Holdings or any other
Credit Party may use such Net Cash Proceeds within sixty (60) days after receipt
thereof to consummate such identified Permitted Acquisition, such use to reduce
the amount of such required prepayment on a dollar-for-dollar basis. If at any
time following the receipt of any such Net Cash Proceeds, the Credit Parties
determine not to consummate such Permitted Acquisition, or if the period set
forth in the immediately preceding sentence expires without the applicable
Credit Parties having consummated such Permitted Acquisition (or if the funds
used to consummate such Permitted Acquisition are not sufficient to reduce the
amount of such required prepayment to zero (0)), the Borrowers shall prepay the
Loans in an amount equal to the unused portion of such Net Cash Proceeds; and

 

(D) (1) in the event the 2006 Equity Issuance is consummated, promptly upon
receipt by Holdings of the proceeds from the 2006 Equity Issuance, an amount
equal to one hundred percent (100%) of the Net Cash Proceeds of the 2006 Equity
Issuance; provided, that, notwithstanding the foregoing, Holdings or any other
Credit Party may allocate any portion not exceeding the 2006 Equity Issuance
Available Amount at the time of such allocation within one hundred eighty
(180) days after the 2006 Equity Issuance is

 

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consummated to either (a) the consummation of Series A-1 Preferred Stock
Redemptions, and/or (b) the consummation of one or more Permitted Acquisitions,
in each case to the extent that such proposed use has been identified in a
certificate executed by a Responsible Officer of the Funds Administrator and
delivered to Agent within five (5) Business Days prior to such use (each such
certificate a “2006 Equity Use Certificate”), each such use to concurrently
reduce on a dollar-for-dollar basis the 2006 Equity Issuance Available Amount.

 

(2) All Net Cash Proceeds of the 2006 Equity Issuance shall be immediately
applied by the Borrowers as a prepayment against then outstanding Revolving
Loans (without a permanent reduction of the Revolving Loan Commitment), and
Agent shall establish a Reserve (the “2006 Equity Issuance Reserve”) against the
Revolving Loan Limit in an amount equal to such amount.

 

(3) Notwithstanding Section 8.2, so long as no Default or Event of Default then
exists, Agent shall, upon receipt of (i) a Notice of Borrowing from the Funds
Administrator in accordance with Section 2.2(b) and (ii) a 2006 Equity Use
Certificate, permit Revolving Loan Borrowings to finance the consummation of
Series A-1 Preferred Stock Redemptions (to the extent each such Series A-1
Preferred Stock Redemption is permitted pursuant to Section 5.4(g)) or to
finance the consummation of a Permitted Acquisition, as the case may be, to the
extent permitted pursuant to clause (iii)(D)(1), and shall concurrently reduce
the 2006 Equity Issuance Reserve by an equivalent amount. Any remaining portion
of the 2006 Equity Issuance Reserve shall be reduced to zero (0) upon the
expiration of the applicable time period set forth in the preceding clause
(iii)(D)(1).

 

(4) If the Credit Parties determine not to use any portion of the 2006 Equity
Issuance Available Amount to consummate a Series A-1 Preferred Stock Redemption
or to consummate Permitted Acquisitions, or if the period set forth in the
immediately preceding sentence expires without the applicable Credit Parties
having expended the entire 2006 Equity Issuance Available Amount, the Borrowers
shall, notwithstanding Section 8.2, be deemed to have borrowed Revolving Loans
in an amount equal to the 2006 Equity Issuance Available Amount, which Revolving
Loans shall be applied to prepay the Loans as required pursuant to
Section 2.1(e). In addition, promptly upon the consummation of a Permitted
Acquisition, the Borrowers shall prepay the Revolving Loans (to the extent not
prepaid from such funds pursuant to clause (iii)(D)(2) and without a permanent
reduction of the Revolving Loan Commitment), in an amount equal to one hundred
percent (100%) of the applicable 2006 Equity Issuance Non-Net Cash Proceeds
Consideration Amount (to be applied pro rata among all Lenders having a
Revolving Loan Commitment Percentage). Upon the application of any such 2006
Equity Issuance Non-Net Cash Proceeds Consideration Amount to the Revolving
Loans, the 2006 Equity Issuance Reserve shall be concurrently reduced by an
equivalent amount;

 

(iv) promptly upon receipt by any Credit Party (other than a Foreign Subsidiary)
of the proceeds of any Asset Disposition, an amount equal to one hundred percent
(100%) of the Net Cash Proceeds of such Asset Disposition; provided, that no
prepayment shall

 

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be required pursuant to this Section 2.1(c)(iv) unless and until the aggregate
Net Cash Proceeds received during any Fiscal Year (commencing after the Closing
Date) from Asset Dispositions exceeds $1,000,000 (in which case all Net Cash
Proceeds in excess of such amount shall be used to make prepayments pursuant to
this Section 2.1(c)(iv)), and provided, that the recipient of such Net Cash
Proceeds may reinvest such Net Cash Proceeds, within one hundred twenty
(120) days after the date of receipt of such Net Cash Proceeds or enter into a
binding commitment to reinvest such payment within said one hundred twenty
(120) days (provided such Credit Party subsequently consummates such
reinvestment within one hundred eighty (180) days following the receipt of such
Net Cash Proceeds), in replacement assets of a kind then used or usable in the
business of such Credit Party, any Borrower or any Domestic Wholly-Owned
Subsidiary of any Borrower. If the applicable Credit Party does not intend to so
reinvest such Net Cash Proceeds, or if the period set forth in the immediately
preceding sentence expires without such Credit Party having reinvested such Net
Cash Proceeds, the Borrowers shall prepay the Loans in an amount equal to such
Net Cash Proceeds; and

 

(v) for so long as any portion of the Term Loan remains outstanding, promptly
upon receipt by any Credit Party of any United States federal tax refunds
relating to the carryback of the net operating loss for the tax year 2002, an
amount equal to one hundred percent (100%) of such refund.

 

Any amounts permitted to be reinvested pursuant to the preceding clauses (ii) or
(iv) shall be immediately applied by the Borrowers as a prepayment against then
outstanding Revolving Loans, and Agent shall establish a Reserve (the
“Reinvestment Reserve”) against the Revolving Loan Limit in an amount equal to
such permitted reinvestment amount. Notwithstanding Section 8.2, so long as no
Event of Default then exists, Agent shall permit Revolving Loan Borrowings upon
receipt of a Notice of Borrowing from the Funds Administrator in accordance with
Section 2.2(b) to finance the making of reinvestments permitted pursuant to the
preceding clauses (ii) and (iv), and shall concurrently reduce the Reinvestment
Reserve by an equivalent amount. Any remaining portion of the Reinvestment
Reserve shall be reduced to zero (0) upon the expiration of the applicable
reinvestment periods pursuant to the preceding clauses (ii) and (iv).

 

Any amounts permitted to be used to consummate Permitted Acquisitions pursuant
to the preceding clause (iii)(C) shall be immediately applied by the Borrowers
as a prepayment against then outstanding Revolving Loans, and Agent shall
establish a Reserve (the “Permitted Acquisition Reserve”) against the Revolving
Loan Limit in an amount equal to such amount. Notwithstanding Section 8.2, so
long as no Default or Event of Default then exists, Agent shall permit Revolving
Loan Borrowings upon receipt of a Notice of Borrowing from the Funds
Administrator in accordance with Section 2.2(b) to finance the consummation of
such Permitted Acquisition permitted pursuant to the preceding clause (iii)(C),
and shall concurrently reduce the Permitted Acquisition Reserve by an equivalent
amount. Any remaining portion of the Permitted Acquisition Reserve shall be
reduced to zero (0) upon the expiration of the applicable time period set forth
in the preceding clause (iii)(C).

 

(d) Optional Prepayments. Subject to the provisions of Section 2.1(e), the
Borrowers may from time to time, on at least one (1) Business Day’s prior
written notice to the Agent specifying the date and amount of such prepayment,
prepay the Term Loan in whole or in part; provided that any such partial
prepayment shall be in an amount equal to $100,000 or a higher

 

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integral multiple of $25,000. No payment pursuant to this Section 2.1(d) shall
(except as reflected in any determination of Excess Cash Flow), reduce the
amount of any payment required by Section 2.1(c).

 

(e) All Prepayments. Any prepayment of a LIBOR Loan on a day other than the last
day of an Interest Period therefor shall include interest on the principal
amount being repaid and shall be subject to Section 2.3(f)(iv). All prepayments
of a Loan shall be applied first to that portion of such Loan comprised of Prime
Rate Loans and then to that portion of such Loan comprised of LIBOR Loans, in
direct order of Interest Period maturities. All prepayments of the Term Loan
shall be applied pro rata to the remaining installments thereof. Following the
payment in full of the Term Loan, any remaining amounts required by
Section 2.1(c)(ii), (iii) and (iv) to be used to prepay the Term Loan shall
instead be applied as a repayment of the outstanding Revolving Loans (with any
excess to be held by the Agent as cash collateral to be applied to repay future
outstanding Revolving Loans as and when made), pro rata among all Lenders having
a Revolving Loan Commitment Percentage (with a permanent reduction of the
Revolving Loan Commitment to the extent required pursuant to
Section 2.2(c)(iv)). Notwithstanding anything to the contrary contained in this
Section 2.1, each Lender holding a portion of the Term Loan may elect not to
have such Lender’s Pro Rata Share of the Term Loan prepaid in the case of a
mandatory prepayment pursuant clause (c) of this Section 2.1, by notice to Agent
received one (1) Business Day prior to the date of such prepayment. The amount
of any such prepayment which would have been applied to the Term Loan but for
such elections shall be applied to the Second Lien Term Loan in accordance with
the provisions of the Second Lien Credit Agreement until paid in full and,
thereafter (or, in the event the Second Lien Lenders waive such prepayment in
accordance with the terms of the Second Lien Credit Agreement), such prepayment
shall be retained by the Borrowers.

 

(f) The Funds Administrator, on behalf of the Borrowers, shall give prior
written notice to Agent at least one (1) Business day prior to each mandatory
prepayment pursuant to Section 2.1(c) and Section 2.2(c)(iii) and each voluntary
prepayment pursuant to Section 2.1(d) and Agent shall promptly notify each
Lender of such notice.

 

Section 2.2 Revolving Loans.

 

(a) Revolving Loans and Borrowings.

 

(i) On the terms and subject to the conditions set forth herein, each Lender
severally agrees to make Loans to the Borrowers from time to time as set forth
herein equal to such Lender’s Revolving Loan Commitment Percentage of revolving
loans (“Revolving Loans”) requested by the Funds Administrator, on behalf of the
Borrowers, hereunder, provided that after giving effect thereto, the Revolving
Loan Outstandings shall not exceed the Revolving Loan Limit. Within the
foregoing limits, the Borrowers may borrow under this Section 2.2(a)(i), prepay
or repay Revolving Loans as required or permitted under this Section 2.2 and
reborrow Revolving Loans pursuant to this Section 2.2(a)(i).

 

(ii) Agent Advances. Subject to the limitations set forth in this
Section 2.2(a)(ii), Agent is hereby authorized by the Borrowers and Lenders,
from time to time in Agent’s sole discretion, (A) after the occurrence of a
Default or an Event of Default, or (B) at

 

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any time that any of the other applicable conditions precedent set forth in
Section 8.2 have not been satisfied (including without limitation the condition
precedent that the Revolving Loan Outstandings not exceed the Borrowing Base
plus any other then outstanding Agent Advances), to make Revolving Loans to the
Borrowers on behalf of the Lenders which Agent, in its reasonable business
judgment, deems necessary or desirable (1) to preserve or protect the business
conducted by the Borrowers, the Collateral, or any portion thereof, (2) to
enhance the likelihood of, or maximize the amount of, repayment of the Loans and
other Obligations, (3) to pay any amount chargeable to the Borrowers pursuant to
the terms of this Agreement, including required principal payments on the Term
Loan, interest payments and costs, fees and expenses as described in
Section 10.1 and/or Section 10.4 or (4) to satisfy payment obligations under
Support Agreements (any of the advances described in this Section 2.2(a)(ii)
being hereafter referred to as “Agent Advances”); provided, that (i) Required
Lenders may at any time revoke Agent’s authorization to make Agent Advances,
except Agent Advances applied in the manner described in the preceding clauses
(3) and (4), any such revocation to be in writing and to become effective
prospectively upon the Agent’s receipt thereof, (ii) Agent Advances shall be
made solely as Prime Rate Loans, (iii) the aggregate amount of Agent Advances
outstanding at any time, exclusive of those made pursuant to the preceding
clauses (3) and (4), shall not exceed $10,000,000 and (iv) Agent shall be
prohibited from making Agent Advances to the extent the making thereof would
cause the Revolving Loan Outstandings (inclusive of Agent Advances) to exceed
the Revolving Loan Commitment.

 

(b) Advancing Revolving Loans.

 

(i) The Funds Administrator, on behalf of the Borrowers, shall deliver to Agent
a Notice of Borrowing with respect to each proposed Revolving Loan Borrowing
(other than Agent Advances), such Notice of Borrowing to be delivered no later
than noon (Chicago time) (A) on the day of such proposed borrowing, in the case
of Prime Rate Loans in an aggregate principal amount equal to or less than
$10,000,000, (B) on the Business Day prior to such proposed borrowing, in the
case of Prime Rate Loans in an aggregate principal amount greater than
$10,000,000 and (C) on the third (3rd) Business Day prior to such proposed
borrowing, in the case of all LIBOR Loans. Once given, except as provided in
Section 2.3(f)(ii), a Notice of Borrowing shall be irrevocable and the Borrowers
shall be bound thereby.

 

(ii) The Borrowers hereby authorize Lenders and Agent to make Revolving Loans
(other than LIBOR Loans) based on telephonic notices made by any Person which
Agent, in good faith, believes to be a Responsible Officer of the Funds
Administrator. The Funds Administrator agrees to deliver to Agent a Notice of
Borrowing in respect of each Revolving Loan requested by telephone no later than
one (1) Business Day following such request. If the Notice of Borrowing differs
in any respect from the action taken by Agent and Lenders, the records of Agent
and the Lenders shall govern absent manifest error. The Borrowers further hereby
authorize Lenders and Agent to make Revolving Loans based on electronic notices
made by any Person which Agent, in good faith, believes to be a Responsible
Officer of the Funds Administrator acting on behalf of the Borrowers, but only
after Agent shall have established procedures acceptable to Agent for accepting
electronic Notices of Borrowing, as indicated by Agent’s written confirmation
thereof.

 

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(c) Mandatory Revolving Loan Repayments and Prepayments; Mandatory Reductions in
Revolving Loan Commitment.

 

(i) The Revolving Loan Commitment shall terminate upon the earlier to occur of
(A) the Commitment Expiry Date and (B) the date on which Agent or Required
Lenders elect to terminate the Revolving Loan Commitment pursuant to Section 9.2
(such earlier date being the “Termination Date”), and there shall become due and
the Borrowers shall pay on the Termination Date, the entire outstanding
principal amount of each Revolving Loan, together with accrued and unpaid
interest thereon to but excluding the Termination Date.

 

(ii) If at any time the Revolving Loan Outstandings exceed the Revolving Loan
Limit, then, on the next succeeding Business Day, the Borrowers shall repay the
Revolving Loans or cash collateralize Letter of Credit Liabilities in the manner
specified in Section 2.5(e) or cancel outstanding Letters of Credit, or any
combination of the foregoing, in an aggregate amount equal to such excess.

 

(iii) There shall become due and payable and the Borrowers shall prepay the
outstanding Revolving Loans (without a permanent reduction of the Revolving Loan
Commitment), within five (5) Business Days following the occurrence of a PS
Earnout Repayment Event and the receipt by a Credit Party of the applicable PS
Earnout Repayment Amount, an amount equal to one hundred percent (100%) of the
applicable PS Earnout Repayment Amount (to be applied pro rata among all Lenders
having a Revolving Loan Commitment Percentage).

 

(iv) Upon repayment in full of the Term Loan, the Revolving Loan Commitment
shall be automatically and permanently reduced by an amount equal to any
prepayment required pursuant to Sections 2.1(c)(ii), (iii) and (iv) of this
Agreement, such reduction to be effective at the time such mandatory prepayment
is required to be made (such reduction to be applied to ratably reduce the
Revolving Loan Commitment Amount of all Lenders having a Revolving Loan
Commitment Percentage).

 

Section 2.3 Interest, Interest Calculations and Certain Fees.

 

(a) Interest. From and following the Closing Date, depending upon the Borrowers’
election from time to time, subject to the terms hereof, to have portions of the
Loans accrue interest determined by reference to the Prime Rate or the LIBOR,
the Loans and the other Obligations shall bear interest at the applicable rates
set forth below:

 

(i) If a Prime Rate Loan, or any other Obligation other than a LIBOR Loan, then
at the sum of the Prime Rate plus the applicable Prime Rate Margin, but in no
event in excess of the Maximum Lawful Rate.

 

(ii) If a LIBOR Loan, then at the sum of the LIBOR plus the applicable LIBOR
Margin, but in no event in excess of the Maximum Lawful Rate.

 

(b) Unused Line Fee. From and following the Closing Date, the Borrowers shall
pay Agent, for the benefit of all Lenders committed to make Revolving Loans, in
accordance with their respective Pro Rata Shares, an aggregate fee in an amount
equal to (1) (a) the Revolving

 

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Loan Commitment less (b) the average daily balance of the Revolving Loan
Outstandings during the preceding quarter, multiplied by (2) one-half of one
percent (.50%) per annum. Such fee is to be paid quarterly in arrears on the
first day of each calendar quarter.

 

(c) Intentionally Omitted.

 

(d) Intentionally Omitted.

 

(e) Computation of Interest and Related Fees. All interest and fees under each
Financing Document shall be calculated on the basis of a 360-day year for the
actual number of days elapsed. The date of funding of a Prime Rate Loan and the
first day of an Interest Period with respect to a LIBOR Loan shall be included
in the calculation of interest. The date of payment of a Prime Rate Loan and the
last day of an Interest Period with respect to a LIBOR Loan shall be excluded
from the calculation of interest. If a Loan is repaid on the same day that it is
made, one (1) day’s interest shall be charged. Interest on all Prime Rate Loans
is payable in arrears on the first day of each month and on the maturity of such
Loans, whether by acceleration or otherwise. Interest on LIBOR Loans shall be
payable on the last day of the applicable Interest Period, unless the Interest
Period is greater than three (3) months, in which case interest will be payable
on the last day of each three (3) month interval. In addition, interest on LIBOR
Loans is due on the maturity of such Loans, whether by acceleration or
otherwise.

 

(f) LIBOR Provisions.

 

(i) LIBOR Election. All Loans made on the Closing Date shall be Prime Rate Loans
and shall remain so until three (3) Business Days after the Closing Date.
Thereafter, the Borrowers may request that Revolving Loans to be made be LIBOR
Loans, that outstanding portions of Revolving Loans and outstanding portions of
each Term Loan be converted to LIBOR Loans and that all or any portion of a
LIBOR Loan be continued as a LIBOR Loan upon expiration of the applicable
Interest Period. Any such request will be made by submitting a Notice of
Borrowing to Agent. Once given, and except as provided in clause (ii) below, a
Notice of Borrowing shall be irrevocable and the Borrowers shall be bound
thereby. Upon the expiration of an Interest Period, in the absence of a new
Notice of Borrowing submitted to Agent not less than three (3) Business Days
prior to the end of such Interest Period, the LIBOR Loan then maturing shall be
automatically converted to a Prime Rate Loan. There may be no more than eight
(8) LIBOR Loans outstanding at any one time. Loans which are not requested as
LIBOR Loans in accordance with this Section 2.3(f)(i) shall be Prime Rate Loans.
Agent will notify Lenders, by telephonic or facsimile notice, of each Notice of
Borrowing received by Agent not less than two (2) Business Days prior to the
first day of the Interest Period of the LIBOR Loan requested thereby.

 

(ii) Inability to Determine LIBOR. In the event, prior to commencement of any
Interest Period relating to a LIBOR Loan, Agent shall determine or be notified
in writing by Required Lenders that adequate and reasonable methods do not exist
for ascertaining LIBOR, Agent shall promptly provide notice of such
determination to the Funds Administrator and Lenders (which shall be conclusive
and binding on the Borrowers and Lenders). In such event (1) any request for a
LIBOR Loan or for a conversion to or continuation of a LIBOR Loan shall be
automatically withdrawn and shall be deemed a request for a Prime Rate Loan,
(2) each

 

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LIBOR Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Prime Rate Loan and (3) the obligations of
Lenders to make LIBOR Loans shall be suspended until Agent or Required Lenders
determine that the circumstances giving rise to such suspension no longer exist,
in which event Agent shall so notify the Funds Administrator and Lenders.

 

(iii) Illegality. Notwithstanding any other provisions hereof, if any Law,
treaty or directive or interpretation or application thereof shall make it
unlawful for any Lender to make, fund or maintain LIBOR Loans, such Lender shall
promptly give notice of such circumstances to Agent, the Funds Administrator and
the other Lenders. In such an event, (1) the commitment of such Lender to make
LIBOR Loans or convert Prime Rate Loans to LIBOR Loans shall be immediately
suspended and (2) such Lender’s outstanding LIBOR Loans shall be converted
automatically to Prime Rate Loans on the last day of the Interest Period thereof
or at such earlier time as may be required by law.

 

(iv) LIBOR Breakage Fee. Upon (i) any default by the Borrowers in making any
borrowing of, conversion into or continuation of any LIBOR Loan following the
Funds Administrator’s delivery to Agent of any applicable Notice of Borrowing or
(ii) any payment of a LIBOR Loan on any day that is not the last day of the
Interest Period applicable thereto (regardless of the source of such prepayment
and whether voluntary, by acceleration or otherwise), the Borrowers shall pay
Agent, for the benefit of all Lenders that funded or were prepared to fund any
such LIBOR Loan, an amount equal to the amount of any losses, expenses and
liabilities (including, without limitation, any loss (including interest paid)
in connection with the re-employment of such funds) that any Lender may sustain
as a result of such default or such payment. For purposes of calculating amounts
payable to a Lender under this paragraph, each Lender shall be deemed to have
actually funded its relevant LIBOR Loan through the purchase of a deposit
bearing interest at LIBOR in an amount equal to the amount of that LIBOR Loan
and having a maturity and repricing characteristics comparable to the relevant
Interest Period; provided, however, that each Lender may fund each of its LIBOR
Loans in any manner it sees fit, and the foregoing assumption shall be utilized
only for the calculation of amounts payable under this subsection.

 

(v) Increased Costs. If, after the Closing Date, the adoption of, or any change
in, any applicable Law or any change in the interpretation or administration of
any applicable Law by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency: (i) shall impose,
modify or deem applicable any reserve (including any reserve imposed by the
Board of Governors of the Federal Reserve System, or any successor thereto, but
excluding any reserve included in the determination of the LIBOR pursuant to the
provisions of this Agreement), special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by any
Lender; or (ii) shall impose on any Lender any other condition affecting its
LIBOR Loans, its Notes (if any) or its obligation to make LIBOR Loans; and the
result of anything described in clauses (i) above and (ii) is to increase the
cost to (or to impose a cost on) such Lender of making or maintaining any LIBOR
Loan, or to reduce the amount of any sum received or receivable by such Lender
under this Agreement or under its Notes (if any) with respect thereto, then upon
demand by such Lender (which demand

 

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shall be accompanied by a statement setting forth the basis for such demand and
a calculation of the amount thereof in reasonable detail, a copy of which shall
be furnished to Agent), the Borrowers shall pay directly to such Lender such
additional amount as will compensate such Lender for such increased cost or such
reduction, so long as such amounts have accrued on or after the day which is one
hundred eighty (180) days prior to the date on which such Lender first made
demand therefor.

 

(vi) Capital Adequacy. If any Lender shall reasonably determine that any change
in, or the adoption or phase-in of, any applicable law, rule or regulation
regarding capital adequacy, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or the
compliance by any Lender or any Person controlling such Lender with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender’s or such controlling
Person’s capital as a consequence of such Lender’s obligations hereunder or
under any Support Agreement to a level below that which such Lender or such
controlling Person could have achieved but for such change, adoption, phase-in
or compliance (taking into consideration such Lender’s or such controlling
Person’s policies with respect to capital adequacy) by an amount deemed by such
Lender or such controlling Person to be material, then from time to time, upon
demand by such Lender (which demand shall be accompanied by a statement setting
forth the basis for such demand and a calculation of the amount thereof in
reasonable detail, a copy of which shall be furnished to Agent), the Borrowers
shall pay to such Lender such additional amount as will compensate such Lender
or such controlling Person for such reduction, so long as such amounts have
accrued on or after the day which is one hundred eighty (180) days prior to the
date on which such Lender first made demand therefor. Notwithstanding any other
provision of this Section 2.3(f)(vi) to the contrary, a Lender shall not demand
any payment referred to in this subsection if it shall not be the general policy
or practice of such Lender to demand similar compensation in similar
circumstances with respect to similarly situated borrowers under comparable
provisions of like credit agreements.

 

(vii) Replacement of Lenders. Within thirty (30) days after: (i) receipt by the
Funds Administrator of written notice and demand from any Lender (an “Affected
Lender”) for payment of additional amounts as provided in Sections 2.3(f)(v),
2.3(f)(vi) and 2.8, which demand shall not have been revoked; (ii) any default
by a Lender in its obligation to make Loans hereunder, provided such default
shall not have been cured; or (iii) any failure by any Lender to consent to a
requested amendment, waiver or modification to any Financing Document to which
Required Lenders have already consented but the consent of each Lender, or each
Lender affected thereby, is required with respect thereto, the Borrowers may, at
their option, notify the Agent and such Affected Lender (or defaulting or
non-consenting Lender, as the case may be) of the Borrowers’ intention to
obtain, at Borrowers’ expense, a replacement Lender (“Replacement Lender”) for
such Lender, which Replacement Lender shall be reasonably satisfactory to the
Agent. In the event the Borrowers obtain a Replacement Lender within ninety
(90) days following notice of their intention to do so, the Affected Lender (or
defaulting or non-consenting Lender, as the case may be) shall sell and assign
its Loans and Commitments to such Replacement Lender; provided, the Borrowers
have reimbursed such Lender for all increased costs for which it is entitled to
reimbursement under this Agreement through the date of such sale

 

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and assignment. In the event that a replaced Lender does not execute an
Assignment Agreement pursuant to Section 12.6 within five (5) Business Days
after receipt by such replaced Lender of notice of replacement pursuant to this
Section 2.3(f)(vii) and presentation to such replaced Lender of an Assignment
Agreement evidencing an assignment pursuant to this Section 2.3(f)(viii), the
Borrowers shall be entitled (but not obligated) to execute such an Assignment
Agreement on behalf of such replaced Lender, and any such Assignment Agreement
so executed by the Borrowers, the replacement Lender and, to the extent required
pursuant to Section 12.6, the Agent, shall be effective for purposes of this
Section 2.3(f)(vii) and Section 12.6. Upon any such assignment and payment, such
replaced Lender shall no longer constitute a “Lender” for purposes hereof;
provided, any rights of such replaced Lender to indemnification hereunder shall
survive as to such replaced Lender.

 

(viii) Mitigation of Claims. Each Lender agrees that, upon the occurrence of any
event giving rise to the operation of Section 2.3(f)(v), 2.3(f)(vi) or 2.8, with
respect to such Lender, it will, if requested by the Borrowers, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event with the object of
avoiding the consequences of such event; provided, that such designation is made
on terms that, in the sole judgment of such Lender, cause such Lender and its
lending officer(s) to suffer no economic, legal or regulatory disadvantage, and
provided, further, that nothing in this Section shall affect or postpone any of
the obligations of the Borrowers or the rights of any Lender pursuant to
Sections 2.3(f)(v), 2.3(f)(vi) or 2.8.

 

Section 2.4 Notes.

 

The portion of the Term Loan made by each Lender shall be evidenced, if so
requested by such Lender, by a promissory note executed by each Borrower (a
“Term Note”), and the portion of the Revolving Loans made by each Lender shall
be evidenced, if so requested by such Lender, by a promissory note executed by
each Borrower (a “Revolving Loan Note”) in an original principal amount equal to
such Lender’s Pro Rata Share of the Term Loan and the Revolving Loan Commitment,
respectively.

 

Section 2.5 Letters of Credit and Letter of Credit Fees.

 

(a) Letter of Credit. On the terms and subject to the conditions set forth
herein, Agent will prior to the Termination Date issue letters of credit or
guarantees (each, a “Support Agreement”) to induce an LC Issuer to issue or
increase the amount of, or extend the expiry date of, a Letter of Credit so long
as:

 

(i) Agent shall have received a Notice of LC Credit Event at least two
(2) Business days before the relevant date of issuance, increase or extension;
and

 

(ii) After giving effect to such issuance or increase (x) the aggregate Letter
of Credit Liabilities under all Letters of Credit do not exceed $8,000,000 and
(y) the Revolving Loan Outstandings do not exceed the Revolving Loan Limit.

 

(b) Letter of Credit Fee. The Borrowers shall pay to Agent, for the benefit of
the Lenders which have committed to make Revolving Loans, a letter of credit fee
with respect to the Letter of Credit Liabilities for each Letter of Credit,
computed for each day from the date of

 

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issuance of such Letter of Credit to the date that is the last day a drawing is
available under such Letter of Credit, at a rate per annum equal to the LIBOR
Margin then applicable to Revolving Loans. Such fee shall be payable in arrears
on the first Business Day of each calendar quarter prior to the Termination Date
and on such date. In addition, the Borrowers agree to pay promptly to the LC
Issuer any standard and customary fronting or other fees that it may charge in
connection with any Letter of Credit.

 

(c) Reimbursement Obligations of the Borrowers. If Agent shall make a payment to
an LC Issuer pursuant to a Support Agreement, the Borrowers shall promptly
reimburse Agent for the amount of such payment and, to the extent that so doing
would not, to Agent’s knowledge, cause the Revolving Loan Outstandings to exceed
the Revolving Loan Limit, the Borrowers shall be deemed to have requested a
Revolving Loan, the proceeds of which will be used to satisfy such Reimbursement
Obligations. The Borrowers shall pay interest, on demand, on all amounts so paid
by Agent for each day until the Borrowers reimburse Agent therefor at a rate per
annum equal to the sum of two percent (2%) plus the interest rate applicable to
Revolving Loans (which are Prime Rate Loans) for such day, but in no event in
excess of the Maximum Lawful Rate.

 

(d) Reimbursement and Other Payments by the Borrowers. The obligations of the
Borrowers to reimburse Agent pursuant to Section 2.5(c) shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under all circumstances whatsoever, including
the following:

 

(i) any lack of validity or enforceability of, or any amendment or waiver of or
any consent to departure from, any Letter of Credit or any related document;

 

(ii) the existence of any claim, set-off, defense or other right which the
Borrowers may have at any time against the beneficiary of any Letter of Credit,
the LC Issuer (including any claim for improper payment), Agent, any Lender or
any other Person, whether in connection with any Financing Document or any
unrelated transaction, provided that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory counterclaim;

 

(iii) any statement or any other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;

 

(iv) any affiliation between the LC Issuer and Agent; or

 

(v) to the extent permitted under applicable law, any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing.

 

(e) Deposit Obligations of the Borrowers. In the event any Letters of Credit are
outstanding at the time that the Borrowers prepay or are required to repay the
Obligations in full or the Revolving Loan Commitment is terminated, the
Borrowers shall (1) deposit with Agent for the benefit of all Lenders with a
portion of the Revolving Loan Commitment cash in an amount equal to one hundred
and five percent (105%) of the aggregate outstanding Letter of Credit
Liabilities to be available to Agent to reimburse payments of drafts drawn under
such Letters of Credit and pay any fees and expenses related thereto and
(2) prepay the fee payable

 

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under Section 2.5(b) with respect to such Letters of Credit for the full
remaining terms of such Letters of Credit. Upon termination of any such Letter
of Credit, the unearned portion of such prepaid fee attributable to such Letter
of Credit shall be refunded to the Borrowers, together with the deposit
described in the preceding clause (1) to the extent not previously applied by
Agent in the manner described herein.

 

(f) Participations in Support Agreements.

 

(i) Concurrently with the issuance of each Letter of Credit, Agent shall be
deemed to have sold and transferred to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from
Agent, without recourse or warranty, an undivided interest and participation in,
to the extent of such Lender’s Pro Rata Share of the Revolving Loan Commitment,
Agent’s Support Agreement liabilities and obligations in respect of such Letters
of Credit and the Borrowers’ Reimbursement Obligations with respect thereto. If
the Borrowers do not pay any Reimbursement Obligation when due, then the
Borrowers shall be deemed to have immediately requested that Lenders make a
Revolving Loan which is a Prime Rate Loan in a principal amount equal to such
Reimbursement Obligation. Agent shall promptly notify Lenders of such deemed
request and each Lender shall make available to Agent its Pro Rata Share of such
Loan. The proceeds of such Loan shall be paid over by Agent to the LC Issuer for
the account of the Borrowers in satisfaction of reimbursement obligations then
owing by the Borrowers to such LC Issuer in respect of outstanding Letters of
Credit.

 

(ii) If Agent makes any payment or disbursement under any Support Agreement and
(x) the Borrowers have not reimbursed Agent in full for such payment or
disbursement in accordance with Section 2.5(c), (y) a Revolving Loan may not be
made pursuant to the immediately preceding clause (i) or (z) any reimbursement
received by Agent from the Borrowers is or must be returned or rescinded upon or
during any bankruptcy or reorganization of any Credit Party or otherwise, each
Lender shall be irrevocably and unconditionally obligated to pay to Agent its
Pro Rata Share of such payment or disbursement (but no such payment shall
diminish the Obligations of the Borrowers under Section 2.5(c)). To the extent
any Lender shall not have made such amount available to Agent by noon (Chicago
time) on the Business Day on which such Lender receives notice from Agent of
such payment or disbursement, such Lender agrees to pay interest on such amount
to Agent forthwith on demand accruing daily at the Federal Funds Rate, for the
first three (3) days following such Lender’s receipt of such notice, and
thereafter at the Prime Rate plus the Prime Rate Margin in respect of Revolving
Loans. Any Lender’s failure to make available to Agent its Pro Rata Share of any
such payment or disbursement shall not relieve any other Lender of its
obligation hereunder to make available to Agent such other Lender’s Pro Rata
Share of such payment, but no Lender shall be responsible for the failure of any
other Lender to make available to Agent such other Lender’s Pro Rata Share of
any such payment or disbursement.

 

(g) Existing Letters of Credit. Notwithstanding anything to the contrary herein,
as of the Closing Date, all of the Existing Letters of Credit shall be deemed to
be Letters of Credit issued hereunder and shall be subject to all of the terms
and provisions of this Agreement and the other Financing Documents applicable to
Letters of Credit issued hereunder, and each Person liable as an account party
thereunder shall be automatically released and the Borrowers shall be

 

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deemed to be the account parties for all purposes thereunder and hereunder. Each
Lender agrees that its obligations with respect to Letters of Credit pursuant to
this Section 2.5 shall include the Existing Letters of Credit and the Borrowers
hereby (x) represent, warrant, agree, covenant and reaffirm that they have no
(and each Borrower permanently and irrevocably waives and releases the Agent and
the Lenders from any, to the extent arising on or prior to the Closing Date)
defense, set off, claim or counterclaim against the Agent and the Lenders with
regard to its Obligations in respect of such Existing Letters of Credit and
(y) reaffirm their obligations to reimburse LC Issuer for honored drawings under
such Existing Letters of Credit in accordance with the terms and provisions of
this Agreement and the other Financing Documents applicable to Letters of Credit
issued hereunder. With respect to each Existing Letter of Credit, for the period
commencing on the Closing Date to and including the expiration date of any such
Existing Letter of Credit, the Borrowers shall pay all fees and commissions set
forth in Section 2.5 at the times and in the manner set forth therein.

 

Section 2.6 General Provisions Regarding Payment; Loan Account.

 

(a) All payments to be made by the Borrowers under any Financing Document,
including payments of principal and interest made hereunder, and all fees,
expenses, indemnities and reimbursements, shall be made without set-off or
counterclaim, in lawful money of the United States of America and in immediately
available funds. If any payment hereunder becomes due and payable on a day other
than a Business Day, such payment shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension. The Borrowers
shall make all payments in immediately available funds to the Payment Account
before noon (Chicago time) on the date when due. Notwithstanding anything to the
contrary set forth in this Section 2.6(a), Agent shall be permitted, in its sole
discretion, but subject to the limitations set forth in Section 2.2(a)(ii), to
satisfy any of the payment obligations described in this Section 2.6(a) through
the making of Agent Advances.

 

(b) Agent shall maintain a loan account (the “Loan Account”) on its books to
record Loans and other extensions of credit made by the Lenders hereunder or
under any other Financing Document, and all payments thereon made by the
Borrowers. All entries in the Loan Account shall be made in accordance with
Agent’s customary accounting practices as in effect from time to time. The
balance in the Loan Account, as recorded on Agent’s most recent printout or
other written statement, shall be conclusive and binding evidence of the amounts
due and owing to Agent by the Borrowers absent clear and convincing evidence to
the contrary; provided that any failure to so record or any error in so
recording shall not limit or otherwise affect the Borrowers’ duty to pay all
amounts owing hereunder or under any other Financing Document. Unless the Funds
Administrator notifies Agent in writing of any objection to any such printout or
statement (specifically describing the basis for such objection) within thirty
(30) days after the date of receipt thereof, it shall be deemed final, binding
and conclusive upon the Borrowers in all respects as to all matters reflected
therein.

 

Section 2.7 Maximum Interest.

 

(a) In no event shall the interest contracted for, charged or received with
respect to the Notes (if any) or any other obligations of the Borrowers under
any Financing Document exceed the maximum amount permitted under the laws of the
State of Illinois or of any other applicable jurisdiction.

 

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(b) Notwithstanding anything to the contrary herein or elsewhere, if at any time
the rate of interest payable hereunder or under any Note (if any) or other
Financing Document (the “Stated Rate”) would exceed the highest rate of interest
permitted under any applicable Law to be charged (the “Maximum Lawful Rate”),
then for so long as the Maximum Lawful Rate would be so exceeded, the rate of
interest payable shall be equal to the Maximum Lawful Rate; provided, that if at
any time thereafter the Stated Rate is less than the Maximum Lawful Rate, the
Borrowers shall, to the extent permitted by law, continue to pay interest at the
Maximum Lawful Rate until such time as the total interest received is equal to
the total interest which would have received had the Stated Rate been (but for
the operation of this provision) the interest rate payable. Thereafter, the
interest rate payable shall be the Stated Rate unless and until the Stated Rate
again would exceed the Maximum Lawful Rate, in which event this provision shall
again apply.

 

(c) In no event shall the total interest received by any Lender exceed the
amount which it could lawfully have received had the interest been calculated
for the actual term hereof at the Maximum Lawful Rate. If, notwithstanding the
prior sentence, any Lender has received interest hereunder or under any other
Financing Document in excess of the Maximum Lawful Rate, such excess amount
shall be applied to the reduction of the principal balance of the Loans or to
other amounts (other than interest) payable hereunder or thereunder, and if no
such principal or other amounts are then outstanding, such excess or part
thereof remaining shall be paid to the Borrowers.

 

(d) In computing interest payable with reference to the Maximum Lawful Rate
applicable to any Lender, such interest shall be calculated at a daily rate
equal to the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made.

 

Section 2.8 Taxes.

 

(a) All payments of principal and interest on the Loans and all other amounts
payable hereunder shall be made free and clear of and without deduction for any
present or future income, stamp, documentary, property or franchise taxes and
other taxes, fees, duties, levies, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, excluding taxes imposed on or
measured by Agent’s or any Lender’s receipts, capital or income by the
jurisdiction under which Agent or such Lender is organized or conducts business
(all non-excluded items being called “Taxes”). If any withholding or deduction
from any payment to be made by the Borrowers hereunder is required in respect of
any Taxes pursuant to any applicable Law, rule or regulation, then the Borrowers
will: (a) pay directly to the relevant authority the full amount required to be
so withheld or deducted; (b) promptly forward to Agent an official receipt or
other documentation reasonably satisfactory to Agent evidencing such payment to
such authority; and (c) pay to Agent for the account of Agent and Lenders such
additional amount or amounts as is necessary to ensure that the net amount
actually received by Agent and each Lender will equal the full amount Agent and
such Lender would have received had no such withholding or deduction been
required. If any Taxes are directly asserted against Agent or any Lender with
respect to any payment received by Agent or such Lender hereunder, Agent or such

 

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Lender may pay such Taxes and the Borrowers will promptly pay such additional
amounts (including any penalty, interest or expense) as is necessary in order
that the net amount received by such Person after the payment of such Taxes
(including any Taxes on such additional amount) shall equal the amount such
Person would have received had such Taxes not been asserted so long as such
amounts have accrued on or after the day which is one hundred eighty (180) days
prior to the date on which Agent or such Lender first made demand therefor.

 

(b) If the Borrowers fail to pay any Taxes when due to the appropriate taxing
authority or fails to remit to Agent, for the account of Agent and the
respective Lenders, the required receipts or other required documentary
evidence, the Borrowers shall indemnify Agent and Lenders for any incremental
Taxes, interest or penalties that may become payable by Agent or any Lender as a
result of any such failure.

 

(c) Each Lender that (i) is organized under the laws of a jurisdiction other
than the United States of America and (ii)(A) is a party hereto on the Closing
Date or (B) becomes an assignee of an interest under this Agreement under
Section 12.6(a) after the Closing Date (unless such Lender was already a Lender
hereunder immediately prior to such assignment) shall execute and deliver to the
Funds Administrator and Agent one or more (as the Funds Administrator or Agent
may reasonably request) Forms W-8ECI, W-8BEN, W-8IMY (as applicable) or other
applicable form, certificate or document prescribed by the United States
Internal Revenue Service certifying as to such Lender’s entitlement to exemption
from withholding or deduction of Taxes. The Borrowers shall not be required to
pay additional amounts to any Lender pursuant to this Section 2.8 to the extent
that the obligation to pay such additional amounts would not have arisen but for
the failure of such Lender to comply with this paragraph.

 

Section 2.9 Appointment of the Funds Administrator.

 

(a) The Borrowers maintain an integrated cash management system reflecting their
interdependence on one another and the mutual benefits shared among them as a
result of their respective operations. In order to efficiently fund and operate
their respective businesses and minimize the number of borrowings which they
will make under this Agreement and thereby reduce the administrative costs and
record keeping required in connection therewith, including the necessity to
enter into and maintain separately identified and monitored borrowing
facilities, the Borrowers have requested, and the Agent and the Lenders have
agreed that, subject to Article XIII, (i) all Loans will be advanced to and for
the account of the Borrowers on a joint and several basis pursuant to the
instructions set forth in Section G of the Information Certificate and (ii) all
Letters of Credit and Support Agreements will be issued pursuant to requests
executed by the Funds Administrator on behalf of and for the account of the
Borrowers. Each Borrower hereby acknowledges that it will be receiving a direct
benefit from each Loan made and each Letter of Credit and Support Agreement
issued pursuant to this Agreement.

 

(b) Each Borrower hereby designates, appoints, authorizes and empowers the Funds
Administrator as its agent to act as specified in this Agreement and each of the
other Financing Documents and the Funds Administrator hereby acknowledges such
designation, authorization and empowerment, and accepts such appointment. Each
Borrower hereby irrevocably authorizes and directs the Funds Administrator to
take such action on its behalf under the provisions of this

 

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Agreement and the other Financing Documents, and any other instruments,
documents and agreements referred to herein or therein, and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Funds Administrator by the respective terms and
provisions hereof and thereof, and such other powers as are reasonably
incidental thereto, including, without limitation, to take the following actions
for and on such Borrower’s behalf (it being agreed that each Borrower retains
the right to act for itself):

 

(i) to submit on behalf of each Borrower Notices of Borrowing and each Notice of
LC Credit Event to the Agent in accordance with the provisions of this
Agreement;

 

(ii) to receive on behalf of each Borrower the proceeds of the Loans in
accordance with the provisions of this Agreement, such proceeds to be disbursed
to or for the account of the applicable Borrower as soon as practicable after
its receipt thereof;

 

(iii) to submit on behalf of each Borrower requests for the issuance of Letters
of Credit and Support Agreements in accordance with the provisions of this
Agreement, each such request for the issuance of a Letter of Credit or a Support
Agreement to be submitted by the Funds Administrator as soon as practicable
after its receipt of a request to do so from any Borrower; and

 

(iv) to submit on behalf of each Borrower all certificates, notices and other
communications given or required to be given hereunder.

 

The Funds Administrator is further authorized and directed by each Borrower to
take all such actions on behalf of such Borrower necessary to exercise the
specific powers granted in clauses (i) through (iv) above and to perform such
other duties hereunder and under the other Financing Documents, and deliver such
documents as delegated to or required of the Funds Administrator by the terms
hereof or thereof.

 

(c) The administration by the Agent and the Lenders of the credit facility under
this Agreement as a co-borrowing facility with a funds administrator in the
manner set forth herein is solely as an accommodation to the Borrowers and at
their request and neither Agent nor any Lender shall incur any liability to any
Borrower as a result thereof. The Agent shall be entitled to rely upon, and
shall be fully protected in relying upon, any Notice of Borrowing, Notice of LC
Credit Event or similar notice believed by the Agent in good faith to be
genuine. The Agent may assume that each Person executing and delivering any
notice in accordance herewith was duly authorized.

 

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ARTICLE III

REPRESENTATION AND WARRANTIES

 

To induce Agent and Lenders to enter into this Agreement and to make the Loans
and other credit accommodations contemplated hereby, each Credit Party that is a
party hereto hereby represents and warrants to Agent and each Lender that:

 

Section 3.1 Existence and Power.

 

Each Credit Party is an entity as specified on the Information Certificate, duly
organized, validly existing and in good standing (or, with respect to any
Subsidiary that is a Foreign Subsidiary, licensed and authorized to conduct its
business and otherwise in the applicable foreign jurisdiction’s equivalent to
good standing) under the laws of the jurisdiction specified on the Information
Certificate, has an organizational identification number (if any) as specified
on the Information Certificate, and has all powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except where the failure to have such powers,
licenses, authorizations, consents and approvals could not reasonably be
expected to have a Material Adverse Effect. Each Credit Party is qualified to do
business as a foreign entity in each jurisdiction in which it is required to be
so qualified (or, with respect to any Subsidiary that is a Foreign Subsidiary,
authorized to conduct its business and otherwise in the applicable foreign
jurisdiction’s equivalent to good standing), which jurisdictions as of the
Closing Date are specified on the Information Certificate, except where the
failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect.

 

Section 3.2 Organization and Governmental Authorization; No Contravention.

 

The execution, delivery and performance by each Credit Party of the Operative
Documents to which it is a party are within its powers, have been duly
authorized by all necessary action pursuant to its Organizational Documents,
require no further action by or in respect of, or filing with, any governmental
body, agency or official (other than (a) routine corporate, tax, ERISA,
intellectual property, environmental filings and other filings from time to time
necessary in connection with the conduct of such Credit Party’s business in the
ordinary course, and (b) recordings and filings in connection with the Liens
granted to the Agent under the Financing Documents) and do not violate, conflict
with or cause a breach or a default under any provision of applicable Law or of
the Organizational Documents of any Credit Party or of any agreement, judgment,
injunction, order, decree or other instrument binding upon it, except for such
failures to file, violations, conflicts, breaches or defaults as could not
reasonably be expected to have a Material Adverse Effect.

 

Section 3.3 Binding Effect.

 

Each of the Operative Documents to which any Credit Party is a party constitutes
a valid and binding agreement or instrument of such Credit Party, enforceable
against such Credit Party in accordance with its respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other similar
laws relating to the enforcement of creditors’ rights generally and by general
equitable principles.

 

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Section 3.4 Capitalization.

 

The authorized equity securities of each of the Credit Parties as of the Closing
Date is as set forth on the Information Certificate. All issued and outstanding
equity securities of each of the Credit Parties are duly authorized and validly
issued, fully paid, nonassessable, and, solely with respect to the equity
securities of PFI, each Borrower and each of their respective Subsidiaries, free
and clear of all Liens other than those in favor of Agent for the benefit of
Agent and Lenders, Second Lien Debt Liens and other Liens permitted pursuant to
Section 5.2(d) and Section 5.2(h), and all such equity securities of each Credit
Party were issued in compliance with all applicable state, federal and foreign
laws concerning the issuance of securities. The identity of the holders of the
equity securities of each of the Credit Parties and the percentage of their
fully-diluted ownership of the equity securities of each of the Credit Parties
as of the Closing Date is set forth on the Information Certificate. Holdings
owns all of the issued and outstanding equity securities of COMSYS IT and PFI.
COMSYS IT owns all of the issued and outstanding equity securities of COMSYS
Services, Pure Solutions and COMSYS Limited. No shares of the capital stock or
other equity securities of any Credit Party, other than those described above,
are issued and outstanding. Except as set forth on the Information Certificate,
as of the Closing Date there are no preemptive or other outstanding rights,
options, warrants, conversion rights or similar agreements or understandings for
the purchase or acquisition from any Credit Party of any equity securities of
any such entity.

 

Section 3.5 Financial Information.

 

(a) The consolidated balance sheet of Holdings and its Consolidated Subsidiaries
as of January 2, 2005 and the related consolidated statements of operations,
stockholders’ equity (or comparable calculation, if such Person is not a
corporation) and cash flows for the fiscal year then ended, reported on by
Ernst & Young LLP, copies of which have been delivered to Agent, fairly present,
in all material respects, in conformity with GAAP, the consolidated financial
position of Holdings and its Consolidated Subsidiaries as of such date and their
consolidated results of operations, changes in stockholders’ equity (or
comparable calculation) and cash flows for such period.

 

(b) The unaudited consolidated balance sheet of Holdings and its Consolidated
Subsidiaries as of October 30, 2005 and the related unaudited consolidated
statements of operations and cash flows for the ten (10) months then ended,
copies of which have been delivered to Agent, fairly present, in all material
respects, in conformity with GAAP applied on a basis consistent with the
financial statements referred to in Section 3.5(a), the consolidated financial
position of Holdings and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for the ten (10) months then
ended (subject to normal year-end adjustments and the absence of footnote
disclosures).

 

(c) The pro forma balance sheet of Holdings and its Consolidated Subsidiaries as
of October 30, 2005, a copy of which has been delivered to Agent, fairly
presents, in all material respects, in conformity with GAAP applied on a basis
consistent with the financial statements referred to in Section 3.5(a), the
consolidated financial position of Holdings and its Consolidated Subsidiaries as
of such date, adjusted to give effect (as if such events had occurred on such
date) to (i) the transactions contemplated by the Operative Documents, (ii) the
making of the Loans,

 

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(iii) the application of the proceeds therefrom as contemplated by the Operative
Documents and (iv) the payment of all legal, accounting and other fees related
thereto to the extent known at the time of the preparation of such balance
sheet. As of the date of such balance sheet and the date hereof, no Credit Party
had or has any material liabilities, contingent or otherwise, including
liabilities for taxes, long-term leases or forward or long-term commitments,
which are not properly reflected on such balance sheet in conformity with GAAP.

 

(d) The information contained in the most recently delivered Borrowing Base
Certificate is complete and correct and the amounts shown therein as “Eligible
Billed Accounts” and “Eligible Unbilled Accounts” have been determined as
provided in the Financing Documents.

 

(e) Since January 2, 2005, there has been no material adverse change in the
business, operations, properties or condition (financial or otherwise) of
Holdings and its Consolidated Subsidiaries taken as a whole.

 

(f) Except as contemplated and permitted by this Agreement, and other than
administrative and other ministerial activities related to (i) its investments
in COMSYS IT and PFI, (ii) the maintenance of its corporate existence, and
(iii) the performance of its obligations under the Operative Documents to which
it is a party and any other agreement to which it is a party, to the extent not
otherwise prohibited by this Agreement, Holdings has no significant assets or
liabilities (other than the equity securities of COMSYS IT and PFI and the
Holdings Intercompany Loan).

 

Section 3.6 Litigation.

 

There is no action, suit or proceeding pending against, or to any Credit Party’s
knowledge threatened against or affecting, any Credit Party or, to any Credit
Party’s knowledge (without any inquiry), any party to any Operative Document
other than a Credit Party, before any court or arbitrator or any governmental
body or agency in which a decision could reasonably be expected to be determined
adversely to such Credit Party and have a Material Adverse Effect or which in
any manner draws into question the validity of any of the Operative Documents.

 

Section 3.7 Ownership of Property.

 

Each Credit Party is the lawful owner of, has good title to and is in lawful
possession of, or has valid leasehold interests in, all material properties and
other assets (real or personal, tangible, intangible or mixed) purported to be
owned or leased (as the case may be) by such Person on the pro forma balance
sheet referred to in Section 3.5(c), except as disposed of in the ordinary
course of business.

 

Section 3.8 No Default.

 

No Default or Event of Default has occurred and is continuing and no Credit
Party is in breach or default under or with respect to any contract, agreement,
lease or other instrument to which it is a party or by which its property is
bound or affected, which breach or default could reasonably be expected to have
a Material Adverse Effect.

 

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Section 3.9 Labor Matters.

 

As of the Closing Date, there are no strikes or other labor disputes pending or,
to any Credit Party’s knowledge, threatened against any Credit Party. Hours
worked and payments made to the employees of the Credit Parties in the United
States have not been in violation of the Fair Labor Standards Act or any other
applicable Law dealing with such matters in any material respect. All payments
due from the Credit Parties, or for which any claim may be made against any of
them, on account of wages and employee and retiree health and welfare insurance
and other benefits have been paid or accrued as a liability on their books, as
the case may be. The consummation of the transactions contemplated by the
Financing Documents and the other Operative Documents will not give rise to a
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which it is a party or by which it is
bound.

 

Section 3.10 Regulated Entities.

 

No Credit Party is an “investment company” or a company “controlled” by an
“investment company” or a “subsidiary” of an “investment company,” all within
the meaning of the Investment Company Act of 1940. No Credit Party is a “holding
company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of
a “holding company” or of a “subsidiary company” of a “holding company,” within
the meaning of the Public Utility Holding Company Act of 1935.

 

Section 3.11 Margin Regulations.

 

None of the proceeds from the Loans have been or will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the
purpose of reducing or retiring any indebtedness which was originally incurred
to purchase or carry any Margin Stock or for any other purpose which might cause
any of the Loans to be considered a “purpose credit” within the meaning of
Regulation T, U or X of the Federal Reserve Board.

 

Section 3.12 Compliance With Laws; Anti-Terrorism Laws.

 

(a) Each Credit Party and each of its Subsidiaries is in compliance with the
requirements of all applicable Laws, except for such noncompliance as could not
reasonably be expected to have a Material Adverse Effect.

 

(b) None of the Credit Parties, their Affiliates or any of their respective
agents acting or benefiting in any capacity in connection with the transactions
contemplated by this Agreement (i) is in violation of any Anti-Terrorism Law,
(ii) engages in or conspires to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law, (iii) is a Blocked Person, or
is controlled by a Blocked Person, (iv) is acting for or on behalf of a Blocked
Person, (v) is associated with a Blocked Person or (vi) is providing material,
financial or technological support or other services to or in support of acts of
terrorism of a Blocked Person. No Credit Party nor, to the knowledge of any
Credit Party, any of its Affiliates or agents acting or benefiting in any
capacity in connection with the transactions contemplated by this Agreement,
(x) conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for

 

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the benefit of any Blocked Person, or (y) deals in, or otherwise engages in any
transaction relating to, any property or interest in property blocked pursuant
to Executive Order No. 13224, any similar executive order or other
Anti-Terrorism Law.

 

Section 3.13 Taxes.

 

Except to the extent subject to a Permitted Contest, all Federal, state and
local tax returns, reports and statements required to be filed by or on behalf
of each Credit Party have been filed with the appropriate governmental agencies
in all jurisdictions in which such returns, reports and statements are required
to be filed, and all material Taxes (including real property Taxes) and other
material charges shown to be due and payable in respect thereof have been timely
paid prior to the date on which any fine, penalty, interest, late charge or loss
may be added thereto for nonpayment thereof. Except to the extent subject to a
Permitted Contest, all material state and local sales and use Taxes required to
be paid by each Credit Party have been paid. Except to the extent subject to a
Permitted Contest, all Federal and state returns have been filed by each Credit
Party for all periods for which returns were due with respect to employee income
tax withholding, social security and unemployment taxes, and the amounts shown
thereon to be due and payable have been paid in full or adequate provisions
therefor have been made. All payroll, employee income and other employment
related Taxes required to be paid by each Credit Party have been paid.

 

Section 3.14 Compliance with ERISA.

 

(a) Each ERISA Plan (and the related trusts and funding agreements) complies in
form and in operation with, has been administered in compliance with, and the
terms of each ERISA Plan satisfy, the applicable requirements of ERISA and the
Code in all material respects. Each ERISA Plan which is intended to be qualified
under Section 401(a) of the Code is so qualified, and the United States Internal
Revenue Service has issued a favorable determination letter with respect to each
such ERISA Plan which may be relied on currently. No Credit Party has incurred
liability for any material excise tax under Sections 4971 through 5000 of the
Code.

 

(b) During the thirty-six (36) month period prior to the Closing Date or the
making of any Loan or the issuance of any Letter of Credit, (i) no steps have
been taken to terminate any Pension Plan under Section 4041(c) or 4042 of ERISA
and (ii) no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA. No condition
exists or event or transaction has occurred with respect to any Pension Plan
which could result in the incurrence by any Credit Party of any liability, fine
or penalty which could reasonably be expected to result in a Material Adverse
Effect. No Credit Party has incurred liability to the PBGC (other than for
current premiums) with respect to any employee Pension Plan in an amount which
could reasonably be expected to result in a Material Adverse Effect. All
contributions (if any) have been made on a timely basis to any Multiemployer
Pension Plan that are required to be made by any Credit Party or any other
member of the Controlled Group under the terms of the plan or of any collective
bargaining agreement or by applicable Law; no Credit Party nor any member of the
Controlled Group has withdrawn or partially withdrawn from any Multiemployer
Pension Plan which could reasonably be expected to result in a Material Adverse
Effect, incurred any withdrawal liability with respect to any such plan or
received notice of any claim or demand for withdrawal liability or partial
withdrawal

 

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liability from any such plan which could reasonably be expected to result in a
Material Adverse Effect, and no condition has occurred which, if continued,
could reasonably be expected to result in a withdrawal or partial withdrawal
from any such plan, and no Credit Party nor any member of the Controlled Group
has received any notice that any Multiemployer Pension Plan is in
reorganization, that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of any excise tax, that any such
plan is or has been funded at a rate less than that required under Section 412
of the Code, that any such plan is or may be terminated, or that any such plan
is or may become insolvent which could reasonably be expected to result in a
Material Adverse Effect.

 

Section 3.15 Brokers.

 

Except as set forth in the Information Certificate, no broker, finder or other
intermediary has brought about the obtaining, making or closing of the
transactions contemplated by the Operative Documents, and no Credit Party has or
will have any obligation to any Person in respect of any finder’s or brokerage
fees in connection herewith or therewith.

 

Section 3.16 Related Transactions.

 

The transactions contemplated by the Second Lien Debt Documents and other
Operative Documents to be consummated on or prior to the date hereof have been
so consummated (including without limitation the disbursement and transfer of
all funds in connection therewith) in all material respects pursuant to the
provisions of the applicable Operative Documents, true and complete copies of
which have been delivered to Agent, and in compliance with all applicable
provisions of Law.

 

Section 3.17 Employment, Equityholders and Subscription Agreements.

 

Except for the Operative Documents and the other agreements set forth in the
Information Certificate, as of the Closing Date there are no (i) employment
agreements covering the management of any Credit Party, (ii) collective
bargaining agreements or other labor agreements covering any employees of any
Credit Party, (iii) agreements for managerial, consulting or similar services to
be provided to any Credit Party pursuant to which such Credit Party has a
contractual obligation to make payments in excess of $200,000 or (iv) agreements
regarding any Credit Party, its assets or operations or any investment therein
to which any of its equityholders is a party or by which it is bound.

 

Section 3.18 Compliance with Environmental Requirements; No Hazardous Materials.

 

(a) No Hazardous Materials are located on any properties now or previously
owned, leased or operated by any Credit Party or have been released into the
environment, or deposited, discharged, placed or disposed of at, on, under or
near any of such properties in a manner that would require the taking of any
action under any Environmental Law and which could reasonably be expected to
have a Material Adverse Effect. No portion of any such property is being used,
or has been used at any previous time, for the disposal, storage, treatment,
processing or other handling of Hazardous Materials in violation of any
Environmental Law, which could reasonably be expected to have a Material Adverse
Effect, nor is any such property affected by any Hazardous Materials
Contamination which, in the case of any of the foregoing, would reasonably be
expected to have a Material Adverse Effect.

 

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(b) No underground storage tanks are located on any properties now or previously
owned, leased or operated by any Credit Party, or were located on any such
property and subsequently removed or filled, which would reasonably be expect to
have a Material Adverse Effect.

 

(c) No notice, notification, demand, request for information, complaint,
citation, summons, investigation, administrative order, consent order and
agreement, litigation or settlement with respect to Hazardous Materials or
Hazardous Materials Contamination is in existence or, to any Borrower’s
knowledge, proposed, threatened or anticipated with respect to or in connection
with the operation of any properties now or previously owned, leased or operated
by any Credit Party, which, in the case of any of the foregoing, would
reasonably be expected to have a Material Adverse Effect. All such properties
and their existing and prior uses, and any disposal of Hazardous Materials from
any thereof, comply and at all times have complied with all Environmental Laws
except for any non-compliance that would not reasonably be expected to have a
Material Adverse Effect. There is no condition on any of such properties which
is in violation of any Environmental Laws and no Credit Party has received any
communication from or on behalf of any governmental authority that any such
condition exists which would reasonably be expected to have a Material Adverse
Effect.

 

(d) There has been no material environmental investigation, study, audit, test,
review or other analysis conducted of which any Credit Party has knowledge in
relation to the current or prior business of such Credit Party or any property
or facility now or previously owned, leased or operated by any Credit Party
which has not been delivered to Agent.

 

(e) For purposes of this Section 3.18, each Credit Party shall be deemed to
include any business or business entity (including a corporation) which is, in
whole or in part, a predecessor of such Credit Party and for which such Credit
Party would have liability under Environmental Law.

 

Section 3.19 Intellectual Property.

 

Each Credit Party owns, is licensed to use or otherwise has the right to use,
all Intellectual Property that is material to the condition (financial or
other), business or operations of such Credit Party, and all such Intellectual
Property existing as of the Closing Date and registered with the U.S.
government, any foreign government or any agency or department thereof is set
forth on the Information Certificate. All material Intellectual Property of each
Credit Party is fully protected and/or duly and properly registered, filed or
issued in the appropriate office and jurisdictions for such registrations,
filings or issuances. To each Credit Parties’ knowledge, each Credit Party
conducts its business without infringement or claim of infringement of any
Intellectual Property rights of others and there is no infringement or claim of
infringement by others of any Intellectual Property rights of any Credit Party,
which infringement or claim of infringement could reasonably be expected to have
a Material Adverse Effect.

 

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Section 3.20 Real Property Interests.

 

Except for the ownership, leasehold or other interests set forth in the
Information Certificate, no Credit Party has, as of the Closing Date, any
ownership, leasehold or other interest in real property.

 

Section 3.21 Solvency.

 

The Credit Parties taken as a whole, after giving effect to their rights of
contribution: (a) own and will own assets the fair saleable value of which are
(i) greater than the total amount of their liabilities (including contingent
liabilities) and (ii) greater than the amount that will be required to pay the
probable liabilities of their then existing debts as they become absolute and
matured considering all financing alternatives and potential asset sales
reasonably available to them; (b) have capital that is not unreasonably small in
relation to their business as presently conducted or after giving effect to any
contemplated transaction; and (c) do not intend to incur and do not believe that
they will incur debts beyond their ability to pay such debts as they become due.

 

Section 3.22 Full Disclosure.

 

None of the information (financial or otherwise) furnished by or on behalf of
any Credit Party to Agent or any Lender in connection with the consummation of
the transactions contemplated by the Operative Documents, including without
limitation the information set forth in the Information Certificate, contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained herein or therein not misleading in
the light of the circumstances under which such statements were made. All
financial projections delivered to Agent and the Lenders have been prepared on
the basis of the assumptions stated therein. Such projections represent the
Credit Parties’ best estimate of the Credit Parties’ future financial
performance and such assumptions are believed by the Credit Parties to be fair
in light of current business conditions; provided that the Credit Parties can
give no assurance that such projections will be attained.

 

Section 3.23 Representations and Warranties Incorporated from Other Operative
Documents.

 

As of the Closing Date, each of the representations and warranties made in the
Operative Documents by each of the Credit Parties thereto and, to the Credit
Parties’ knowledge, each of the representations and warranties made in the
Operative Documents by each party other than a Credit Party, is true and correct
in all material respects, and such representations and warranties are hereby
incorporated herein by reference with the same effect as though set forth in
their entirety herein, as qualified therein, except to the extent that such
representation or warranty relates to a specific date, in which case such
representation and warranty shall be true as of such earlier date.

 

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ARTICLE IV

AFFIRMATIVE COVENANTS

 

Each Credit Party that is a party hereto agrees that, so long as any Credit
Exposure exists:

 

Section 4.1 Financial Statements and Other Reports.

 

The Credit Parties will maintain a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in accordance with GAAP and to provide the information
required to be delivered to the Lenders hereunder, and will deliver to Agent,
and, in the case of the deliveries required by paragraphs (a) through (f) and
(l) through (s), with adequate copies for each Lender:

 

(a) as soon as practicable and in any event within thirty (30) days after the
end of each fiscal month (including the last month of Holdings’ Fiscal Year), a
consolidated balance sheet of Holdings and its Consolidated Subsidiaries as at
the end of such month and the related consolidated statements of operations and
cash flows for such month, and for the portion of the Fiscal Year ended at the
end of such month setting forth in each case in comparative form the figures for
the corresponding periods of the previous Fiscal Year and the figures for such
month and for such portion of the Fiscal Year ended at the end of such month set
forth in the annual operating and capital expenditure budgets and cash flow
forecast delivered pursuant to Section 4.1(l), all in reasonable detail and
certified by a Responsible Officer of Holdings as fairly presenting in all
material respects the financial condition and results of operations of Holdings
and its Consolidated Subsidiaries and as having been prepared in accordance with
GAAP applied on a basis consistent with the audited financial statements of
Holdings, subject to changes resulting from audit and normal year-end
adjustments and the absence of footnote disclosures;

 

(b) as soon as available and in any event within ninety (90) days after the end
of each Fiscal Year, a consolidated balance sheet of Holdings and its
Consolidated Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of operations, stockholders’ equity (or the comparable
item, if Holdings is not a corporation) and cash flows for such Fiscal Year,
setting forth in each case in comparative form the figures for the previous
Fiscal Year and the figures for such Fiscal Year set forth in the annual
operating and capital expenditure budgets and cash flow forecast delivered
pursuant to Section 4.1(l), certified (solely with respect to such consolidated
statements) without qualification by Ernst & Young, LLP or any other independent
public accountants reasonably acceptable to Agent of nationally recognized
standing;

 

(c) (i) together with each delivery of financial statements pursuant to Sections
4.1(a) and 4.1(b), a Compliance Certificate (it being understood that the Credit
Parties shall only be required to complete and deliver the financial covenant
calculations attached to the Compliance Certificate to the extent that the
Borrowers are required to evidence compliance with the financial covenants set
forth in Article VII hereof and, with respect to the Total Debt to Adjusted
EBITDA Ratio, as necessary to determine the applicable Prime Rate Margin and
LIBOR Margin as of any Adjustment Date), (ii) together with each delivery of
financial statements pursuant to Section 4.1(b), an Excess Cash Flow
Certificate, and (iii) together with each delivery of financial statements
pursuant to Sections 4.1(a) and 4.1(b), a reconciliation report in the form set
forth in Exhibit F, with respect to the Borrowing Base Certificate most recently
delivered to Agent

 

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pursuant to Section 4.1(m), the financial statements of the Credit Parties
delivered to Agent, the Borrowers’ general ledger and/or the reports required
pursuant to Section 4.1(o), in form and substance, and with such supporting
detail and documentation, as may be reasonably requested by Agent;

 

(d) together with each delivery of financial statements pursuant to
Section 4.1(b) above, a written statement by the independent public accountants
giving the report thereon stating that their audit examination has included a
review of the terms of this Agreement as it relates to accounting matters;

 

(e) promptly upon receipt thereof, copies of all reports submitted to any Credit
Party by independent public accountants in connection with each annual, interim
or special audit of the financial statements of any Credit Party made by such
accountants, including the comment letter submitted by such accountants to
management in connection with their annual audit;

 

(f) promptly upon their becoming available, copies of (i) all financial
statements, reports, notices and proxy statements sent or made available
generally by any Credit Party to its security holders, (ii) all regular and
periodic reports and all registration statements and prospectuses filed by any
Credit Party with any securities exchange or with the Securities and Exchange
Commission or any successor, (iii) all press releases and other statements made
available generally by any Credit Party concerning material developments in the
business of any Credit Party and (iv) all Swap Contracts entered into by any
Credit Party;

 

(g) promptly upon any officer of any Credit Party obtaining knowledge (i) of the
existence of any Event of Default or Default, or becoming aware that the holder
of any Debt of any Credit Party has given any notice or taken any other action
with respect to a claimed default thereunder, (ii) of any change in any Credit
Party’s certified accountant or any resignation, or decision not to stand for
re-election, by any member of any Credit Party’s board of directors (or
comparable body), (iii) that any Person has given any notice to any Credit Party
or taken any other action with respect to a claimed default under any material
agreement or instrument (other than the Financing Documents) to which any Credit
Party is a party or by which any of its assets is bound or (iv) of the
institution of any litigation or arbitration involving an alleged liability of
any Credit Party equal to or greater than $2,000,000 or any adverse
determination in any litigation or arbitration involving a potential liability
of any Credit Party equal to or greater than $2,000,000, a certificate of a
Responsible Officer of the Funds Administrator, on behalf of the Borrowers
specifying the nature and period of existence of any such condition or event, or
specifying the notice given or action taken by such holder or Person and the
nature of such claimed default (including any Event of Default or Default),
event or condition, and what action the applicable Credit Party has taken, is
taking or proposes to take with respect thereto;

 

(h) promptly upon any officer of any Credit Party obtaining knowledge of (i) the
institution of any steps by any member of the Controlled Group or any other
Person to terminate any Pension Plan under Section 4041(c) or 4042 of ERISA,
(ii) the failure of any member of the Controlled Group to make a required
contribution on a timely basis to any ERISA Plan or to any Multiemployer Pension
Plan in an amount that is material, (iii) the taking of any action with respect
to a Pension Plan which could result in the requirement that any Credit Party or
any Subsidiary of any Credit Party furnish a bond or other security to the PBGC
or such Pension

 

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Plan, (iv) the occurrence of a reportable event under Section 4043 of ERISA (for
which a reporting requirement is not waived) with respect to any Pension Plan,
(v) the occurrence of any event with respect to any Pension Plan or
Multiemployer Pension Plan which could result in the incurrence by any member of
the Controlled Group of any material liability, fine or penalty (including any
claim or demand for withdrawal liability or partial withdrawal from any
Multiemployer Pension Plan), (vi) any material increase in the contingent
liability of any Credit Party or any Subsidiary of any Credit Party with respect
to any post-retirement welfare plan benefit or (vii) the receipt by any Credit
Party of any notice that any Multiemployer Pension Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of an excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become
insolvent, a certificate of a Responsible Officer of the Funds Administrator, on
behalf of the Borrowers, specifying the nature and period of existence of any
such condition or event, or specifying the notice given or action taken by such
holder or Person, and what action the applicable Credit Party has taken, is
taking or proposed to take with respect thereto;

 

(i) promptly upon any officer of any Credit Party obtaining knowledge of any
complaint, order, citation, notice or other written communication from any
Person delivered to any Credit Party with respect to, or if any officer of any
Credit Party becomes aware of the following, except as would not reasonably be
expected to have a Material Adverse Effect: (x) the existence or alleged
existence of a violation of any Environmental Law or the incurrence of any
liability, obligation, loss, damage, cost, expense, fine, penalty or sanction or
the requirement to commence any remedial action resulting from or in connection
with any air emission, water discharge, noise emission, Hazardous Material or
any other environmental, health or safety matter at, upon, under or within any
of the properties now or previously owned, leased or operated by any Credit
Party, or due to the operations or activities of any Credit Party or any other
Person on or in connection with any such property or any part thereof or (y) any
release on any of such properties of Hazardous Materials in a quantity that is
reportable under any applicable Environmental Law, a certificate of a
Responsible Officer of the Funds Administrator, on behalf of the Borrowers,
specifying the nature and period of existence of any such condition or event, or
specifying the notice given or action taken by such holder or Person, and what
action the applicable Credit Party has taken, is taking or proposes to take with
respect thereto;

 

(j) promptly upon any officer of any Credit Party obtaining knowledge that any
Credit Party has either (x) registered or applied to register any Intellectual
Property with the U.S. government, any foreign government or any agency or
department thereof, or (y) acquired any interest in real property (including
leasehold interests in real property), a certificate of a Responsible Officer of
the Funds Administrator, on behalf of the Borrowers, describing such
Intellectual Property and/or such real property in such detail as Agent shall
reasonably require;

 

(k) copies of any reports or notices related to any material taxes and any other
material reports or notices received by any Credit Party from, or filed by any
Credit Party with, any Federal, state or local governmental agency or body;

 

(l) within thirty (30) days after the conclusion of each Fiscal Year, the Credit
Parties’ annual operating plans, operating and capital expenditure budgets, and
financial forecasts,

 

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including cash flow projections covering proposed fundings, repayments,
additional advances, investments and other cash receipts and disbursements, each
presented on a monthly basis for the then current Fiscal Year and annually for
the two (2) subsequent Fiscal Years, all of which shall be in a format
reasonably consistent with projections, budgets and forecasts theretofore
provided to the Lenders, and promptly following the preparation thereof, updates
to any of the foregoing from time to time prepared by management of the Credit
Parties;

 

(m) as soon as available and in any event within fifteen (15) Business Days
after the end of each fiscal month, and from time to time upon the request of
Agent (which request may be made as frequently as daily), a Borrowing Base
Certificate as of the last day of the month most recently ended (or, in the case
of Borrowing Base Certificates requested more frequently than monthly, as of the
second preceding Business Day);

 

(n) as soon as available and in any event within fifteen (15) Business Days
after the end of each fiscal month, and from time to time upon the request of
Agent (which request may be made as frequently as daily) schedules of sales
made, credits issued and cash received for and during such month (or, in the
case of such schedules requested more frequently than monthly, as of the second
preceding Business Day);

 

(o) as soon as available and in any event within fifteen (15) Business Days
after the end of each fiscal month, on a monthly basis or more frequently as
Agent may reasonably request, (i) agings of Accounts, (ii) unbilled revenue from
the general ledger, (iii) vworx unbilled accounts, (iv) fixed price contracts
report, (v) accrued rebates report, (vi) schedules of contra-accounts,
(vii) schedules of deferred revenue, (viii) schedule of unapplied debits and
credits, (ix) federal government receivables report, (x) schedule of unapplied
cash, (xi) schedule of eliminating entries, (xii) schedule of foreign accounts,
(xiii) schedule of customer refunds, (xiv) schedule of discount reserves, and
(xv) schedule of accounts payable, each in form and substance, and with such
supporting detail and documentation, as may be reasonably requested by Agent;

 

(p) upon Agent’s reasonable request, (i) copies of customer statements and
credit memos, remittance advices and reports and copies of deposit slips and
bank statements, (ii) copies of shipping and delivery documents, and
(iii) copies of purchase orders, invoices and delivery documents for material
Equipment acquired by any Credit Party;

 

(q) within two (2) Business Days after any request therefor, such additional
information in such detail concerning the amount, composition and manner of
calculation of the Borrowing Base as Agent or any Lender may reasonably request;

 

(r) upon the request of Agent, which may be made no more than four (4) times
each year prior to an Event of Default and at any time while and so long as an
Event of Default shall be continuing, a report of an independent collateral
auditor satisfactory to Agent (which may be, or be affiliated with, a Lender)
with respect to the components of the Borrowing Base, which report shall
indicate whether or not the information set forth in the Borrowing Base
Certificate most recently delivered is accurate and complete in all material
respects based upon a review by such auditors of the Accounts (including
verification with respect to the amount, aging, identity and credit of the
respective Account Debtors and the billing practices of the Borrowers);

 

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(s) with reasonable promptness, such other information and data with respect to
any Credit Party as from time to time may be reasonably requested by Agent or
any Lender;

 

(t) promptly after delivery to the recipient thereof, copies of all notices and
financial information of the Credit Parties delivered to any Person in
accordance with the provisions of the Second Lien Credit Agreement;

 

(u) without limiting or being limited by any other provision of any Financing
Document, the Credit Parties shall retain and use Ceridian Corporation and its
Affiliates or any other third-party reasonably acceptable to Agent to process,
manage and pay the payroll taxes of the Credit Parties and shall, upon the
request of Agent, cause to be delivered to Agent within ten (10) calendar days
of such request, a report of such payroll taxes of the Credit Parties for the
immediately preceding calendar month and evidence of payment thereof; and

 

(v) not less than five (5) days prior to the making of any payment in respect of
the PS Earnout, copies of certificates evidencing calculation of all amounts
owing in respect of the PS Earnout.

 

Section 4.2 Payment and Performance of Obligations.

 

(i) Each Credit Party will pay and discharge, and cause each of its Subsidiaries
to pay and discharge, at or before maturity, all of their respective obligations
and liabilities, including tax liabilities, except (x) where the same may be the
subject of a Permitted Contest and (y) for such obligations and/or liabilities
the nonpayment or nondischarge of which could not reasonably be expected to have
a Material Adverse Effect, (ii) Each Credit Party will pay, and will cause each
of its Subsidiaries to pay, all payroll and other employment related taxes as
and when due and payable, (iii) Each Credit Party will maintain, and cause each
of its Subsidiaries of such Credit Party to maintain, in accordance with GAAP,
appropriate reserves for the accrual of all of their respective obligations and
liabilities and (iv) No Credit Party will breach nor will any Credit Party
permit any Subsidiary of such Credit Party to breach, or permit to exist any
default under, the terms of any lease, commitment, contract, instrument or
obligation to which it is a party, or by which its properties or assets are
bound, except for such breaches or defaults which could not reasonably be
expected to have a Material Adverse Effect.

 

Section 4.3 Conduct of Business and Maintenance of Existence.

 

Each Borrower will continue, and will cause each Subsidiary to continue, to
engage in business of the same general type as they now conduct and will
preserve, renew and keep in full force and effect, and, except as permitted
pursuant to Section 5.7, will cause each Subsidiary to preserve, renew and keep
in full force and effect their respective existence and their respective rights,
privileges and franchises necessary or desirable in the normal conduct of
business.

 

Section 4.4 Maintenance of Property; Insurance.

 

(a) Each Credit Party will keep, and will cause each of its Subsidiaries to
keep, all property useful and necessary in any material respect in its business
in good working order and condition, ordinary wear and tear excepted.

 

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(b) Each Credit Party will maintain, and will cause each of its Subsidiaries to
maintain, (i) physical damage insurance on all real and personal property on an
all risks basis (including the perils of flood and quake), covering the repair
and replacement cost of all such property and consequential loss coverage for
business interruption and public liability insurance (including
products/completed operations liability coverage) in each case of the kinds
customarily carried or maintained by Persons of established reputation engaged
in similar businesses and in amounts reasonably acceptable to Agent and
(ii) such other insurance coverage in such amounts and with respect to such
risks as Agent may reasonably request. All such insurance shall be provided by
insurers having an A.M. Best policyholders rating reasonably acceptable to
Agent.

 

(c) On or prior to the Closing Date, the Credit Parties will cause Agent to be
named as an additional insured, assignee and loss payee, as applicable, on each
insurance policy required to be maintained pursuant to this Section 4.4 pursuant
to endorsements in form and content reasonably acceptable to Agent. The Credit
Parties will deliver to Agent (i) on the Closing Date, a certificate from the
Credit Parties’ insurance broker dated as of a date within thirty (30) day of
the Closing Date showing the amount of coverage as of such date, and that such
policies will include effective waivers (whether under the terms of any such
policy or otherwise) by the insurer of all rights of subrogation against all
loss payees and additional insureds, and that if all or any part of such policy
is canceled, terminated or expires, the insurer will forthwith give notice
thereof to each additional insured and loss payee and that no cancellation,
reduction in amount or material change in coverage thereof shall be effective
until at least thirty (30) days after receipt by each additional insured and
loss payee of written notice thereof (or, in the case of non-payment of
premiums, at least ten (10) days after receipt by each additional insured and
loss payee of written notice thereof), (ii) on an annual basis, and upon the
request of any Lender through Agent from time to time, full information as to
the insurance carried, (iii) within five (5) days of receipt of notice from any
insurer, a copy of any notice of cancellation, nonrenewal or material change in
coverage from that existing on the date of this Agreement and (iv) forthwith,
notice of any cancellation or nonrenewal of coverage by the Credit Parties.

 

(d) In the event the Credit Parties fail to provide Agent with evidence of the
insurance coverage required by this Agreement, Agent may purchase insurance at
the Credit Parties’ expense to protect Agent’s interests in the Collateral. This
insurance may, but need not, protect the Credit Parties’ interests. The coverage
purchased by Agent may not pay any claim made by the Credit Parties or any claim
that is made against the Credit Parties in connection with the Collateral. The
Credit Parties may later cancel any insurance purchased by Agent, but only after
providing Agent with evidence that the Credit Parties have obtained insurance as
required by this Agreement. If Agent purchases insurance for the Collateral, the
Credit Parties will be responsible for the costs of that insurance, including
interest and other charges imposed by Agent in connection with the placement of
the insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added to the Obligations. The costs
of the insurance may be more than the cost of insurance the Credit Parties are
able to obtain on their own.

 

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Section 4.5 Compliance with Laws.

 

The Credit Parties will comply, and cause each of their respective Subsidiaries
to comply, with the requirements of all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities (including
Environmental Laws and ERISA and the rules and regulations thereunder), except
for such noncompliance which could not reasonably be expected to have a Material
Adverse Effect.

 

Section 4.6 Inspection of Property, Books and Records.

 

The Credit Parties will keep, and will cause each of their respective
Subsidiaries to keep, proper books of record and account in accordance with GAAP
in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause each of their respective Subsidiaries to permit, at the sole cost of
such Credit Party or any applicable Subsidiary of such Credit Party,
representatives of Agent and of any Lender (but at such Lender’s expense unless
such visit or inspection is made concurrently with Agent) to visit and inspect
any of their respective properties, to examine and make abstracts or copies from
any of their respective books and records, to conduct a collateral audit and
analysis of their respective Inventory and Accounts and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants as often as may reasonably be
desired; provided that so long as no Default or Event of Default has occurred
and is continuing, the Credit Parties shall only be required to pay for two
(2) such inspections or visits per year. In the absence of an Event of Default,
Agent or any Lender exercising any rights pursuant to this Section 4.6 shall
give the Funds Administrator commercially reasonable prior written notice of
such exercise. No notice shall be required during the existence and continuance
of any Event of Default.

 

Section 4.7 Use of Proceeds.

 

The Borrowers will use the proceeds of the Term Loan solely for (i) transaction
fees incurred in connection with the Operative Documents entered into on the
Closing Date, and (ii) the repayment on the Closing Date of Existing Debt of the
Credit Parties. The proceeds of Revolving Loans shall be used by the Borrowers
solely for the purposes set forth in the preceding sentence and for working
capital needs of the Borrowers including, without limitation, for making
Permitted Acquisitions and for the making of Restricted Distributions to the
extent permitted pursuant to Section 5.4.

 

Section 4.8 Lenders’ Meetings.

 

Within forty-five (45) days after the end of each Fiscal Year (or more
frequently upon the request of the Agent upon the occurrence and during the
continuance of an Event of Default), the Credit Parties will conduct a meeting
of Agent, the Lenders, the Second Lien Agent, the Second Lien Collateral Agent
and the Second Lien Lenders to discuss such Fiscal Year’s results and the
financial condition of the Credit Parties and their respective Subsidiaries at
which shall be present a Responsible Officer and such officers of the Credit
Parties as may be reasonably requested to attend by Agent or any Lender, such
request or requests to be made within a reasonable time prior to the scheduled
date of such meeting. Such meetings shall be held at a time and place convenient
to the Lenders and to the Credit Parties.

 

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Section 4.9 Further Assurances.

 

Each Credit Party will, and will cause each Subsidiary to, at its own cost and
expense, cause to be promptly and duly taken, executed, acknowledged and
delivered all such further acts, documents and assurances as may from time to
time be necessary or as Agent or the Required Lenders may from time to time
reasonably request in order to carry out the intent and purposes of the
Financing Documents and the transactions contemplated thereby, including all
such actions to establish, preserve, protect and perfect a first priority Lien
(subject only to Permitted Liens) in favor of Agent for the benefit of the
Lenders on the Collateral (including Collateral acquired after the date hereof),
subject to exceptions permitted by the Financing Documents, including on any and
all assets of each Credit Party, whether now owned or hereafter acquired.
Without limiting the generality of the foregoing and except as otherwise
approved in writing by Required Lenders, (i) each Credit Party (other than the
Borrowers) and each of its Subsidiaries (other than the Borrowers) shall
guaranty the Obligations and cause each such Subsidiary (other than the
Borrowers) to grant to Agent, for the benefit of Agent and Lenders, a security
interest in all of such Subsidiary’s property to secure such guaranty, (ii) each
Credit Party (other than the Borrowers) shall pledge the stock or other equity
interests of each of their respective Subsidiaries to Agent, for the benefit of
Agent and Lenders, to secure such Credit Party’s guaranty, and (iii) each
Borrower shall pledge the stock or other equity interest of each of its
Subsidiaries to Agent, for the benefit of Agent and Lenders, to secure the
Obligations; provided, that, anything contained in this Section 4.9 to the
contrary notwithstanding, no direct or indirect Foreign Subsidiary of Holdings
shall be required to deliver any such guaranty or grant a security interest in
any of its property to secure any such guaranty, and neither Holdings nor any of
its direct or indirect Subsidiaries will be required to pledge more than
sixty-five percent (65%) of the equity interests of any Foreign Subsidiary, in
any such case, to the extent but only for so long as such guaranty or granting,
or a pledge of more such equity interests, would result in material and adverse
tax consequences to Holdings under Section 956 of the Code, as determined by
Holdings in its reasonable business judgment, provided that Holdings has
delivered to Agent and the Required Lenders evidence reasonably satisfactory to
Agent and the Required Lenders of such determination.

 

ARTICLE V

NEGATIVE COVENANTS

 

Each Credit Party that is a party hereto agrees that, so long as any Credit
Exposure exists:

 

Section 5.1 Debt.

 

Such Credit Party will not, and will not permit any Subsidiary to, directly or
indirectly, create, incur, assume, guarantee or otherwise become or remain
directly or indirectly liable with respect to, any Debt except for:

 

(a) Debt, Letter of Credit Liabilities and all other Obligations under the
Financing Documents;

 

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(b) Debt outstanding on the date of this Agreement as set forth in the
Information Certificate (other than Debt permitted pursuant to clause (d) of
this Section 5.1) to the extent set forth therein;

 

(c) Debt of the Borrowers incurred or assumed for the purpose of financing all
or any part of the cost of acquiring any fixed asset (including through Capital
Leases) and related costs and refinancings thereof, in an aggregate principal
amount at any time outstanding not greater than $1,500,000;

 

(d) intercompany Debt arising from loans made by a Borrower to (i) any other
Borrower or any Domestic Wholly-Owned Subsidiary of any Borrower and (ii) its
Foreign Subsidiaries which are Wholly-Owned Subsidiaries in an aggregate amount
under this clause (ii) not to exceed $1,000,000 at any time outstanding;
provided, however, in each case, such Debt shall be evidenced by promissory
notes having terms reasonably satisfactory to Agent, the sole originally
executed counterparts of which shall be pledged and delivered to Agent, for the
benefit of Agent and Lenders, as security for the Obligations;

 

(e) unsecured Debt of any Borrower not to exceed $1,000,000 in the aggregate at
any time outstanding which is subordinated to the Obligations in a manner
reasonably satisfactory to Agent;

 

(f) net obligations to a counterparty under any Swap Contract permitted pursuant
to the terms of this Agreement;

 

(g) Debt consisting of Contingent Obligations, to the extent permitted pursuant
to Section 5.3;

 

(h) the Second Lien Debt and refinancings and replacements thereof, to the
extent permitted pursuant to the terms of the Second Lien Intercreditor
Agreement;

 

(i) Debt arising from Holdings Loans;

 

(j) Debt of COMSYS IT incurred pursuant to the PS Year One Earnout in an
aggregate amount not to exceed $2,500,000;

 

(k) Debt of COMSYS IT incurred pursuant to the PS Year Two Earnout in an
aggregate amount not to exceed $2,500,000;

 

(l) Debt of COMSYS IT incurred pursuant to the PS Year Three Earnout in an
aggregate amount not to exceed $2,500,000;

 

(m) Debt of COMSYS IT incurred pursuant to the PS Additional Earnout in an
aggregate amount not to exceed $750,000;

 

(n) Debt evidenced by Earnouts incurred in connection with Permitted
Acquisitions; and

 

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(o) intercompany Debt of COMSYS IT constituting the Holdings Intercompany Loan,
provided, that (i) all interest on such Debt shall be payable in kind (and not
in cash), and (ii) such Debt shall be evidenced by a promissory note, all
payments under which are subordinated to the prior indefeasible payment in full
in cash of the Obligations in manner acceptable to Agent and which otherwise
contains terms reasonably satisfactory to Agent, the sole originally executed
counterpart of which shall be pledged and delivered to Agent, for the benefit of
Agent and Lenders, as security for the Obligations.

 

Section 5.2 Liens.

 

Such Credit Party will not, and will not permit any Subsidiary to, directly or
indirectly, create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:

 

(a) Liens created by the Security Documents;

 

(b) Liens existing on the date of this Agreement as set forth in the Information
Certificate;

 

(c) any Lien on any asset of any Borrower, as the case may be (including
additions and accessions to and proceeds of any such asset), securing Debt
permitted under Section 5.1(c) incurred or assumed for the purpose of financing
or refinancing all or any part of the cost of acquiring such asset, provided
that such Lien attaches to such asset concurrently with or within ninety
(90) days after the acquisition thereof;

 

(d) Liens for taxes or other governmental charges not at the time delinquent or
thereafter payable without penalty or the subject of a Permitted Contest;

 

(e) Liens on assets of any Credit Party arising in the ordinary course of
business (i) in favor of carriers, warehousemen, mechanics, landlords and
materialmen, and other similar Liens imposed by law or, with respect to
warehousemen and/or landlords, by contract and (ii) in connection with worker’s
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with surety bonds, bids,
performance bonds and similar obligations) for sums not overdue or the subject
of a Permitted Contest and not involving any deposits or advances or borrowed
money or the deferred purchase price of property or services and, in each case,
for which it maintains adequate reserves;

 

(f) attachments, appeal bonds, judgments and other similar Liens on assets of
the Credit Parties, for sums not exceeding $1,000,000 in the aggregate arising
in connection with court proceedings; provided that the execution or other
enforcement of such Liens is effectively stayed and the claims secured thereby
are the subject of a Permitted Contest;

 

(g) banker’s Liens and rights of set-off of financial institutions arising in
connection with items deposited in accounts maintained at such financial
institutions and subsequently unpaid and unpaid fees and expenses that are
charged to a Credit Party by such financial institutions in the ordinary course
of business of the maintenance and operation of such accounts;

 

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(h) the Second Lien Debt Liens to the extent securing permitted Second Lien
Debt; and

 

(i) easements, rights of way, restrictions, minor defects or irregularities in
title and other similar Liens not interfering in any material respect with the
ordinary conduct of the business of the Credit Parties.

 

Section 5.3 Contingent Obligations.

 

Such Credit Party will not, and will not permit any Subsidiary to, directly or
indirectly, create, assume, incur or suffer to exist any Contingent Obligations,
except for:

 

(a) Contingent Obligations arising under the Financing Documents;

 

(b) Contingent Obligations resulting from endorsements for collection or deposit
in the ordinary course of business;

 

(c) Contingent Obligations outstanding on the date of this Agreement as set
forth in the Information Certificate, to the extent set forth therein;

 

(d) Contingent Obligations incurred in the ordinary course of business with
respect to surety and appeal bonds, performance bonds and other similar
obligations not to exceed $1,000,000 in the aggregate at any time outstanding;

 

(e) Contingent Obligations arising under indemnity agreements with title
insurers to cause such title insurers to issue to Agent mortgagee title
insurance policies;

 

(f) so long as there exists no Event of Default both immediately before and
immediately after giving effect to any such transaction, Contingent Obligations
existing or arising under any Swap Contract, provided that such obligations are
unsecured and are (or were) entered into by a Credit Party in the ordinary
course of business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person and not for purposes of speculation;

 

(g) Contingent Obligations arising with respect to customary indemnification
obligations in favor of purchasers in connection with dispositions permitted
under Section 5.8;

 

(h) Contingent Obligations representing guarantees by a Credit Party of another
Credit Party’s Debt or other obligations, so long as (i) such Debt or other
obligations are permitted to exist pursuant to the terms of this Agreement and
(ii) if such Debt or other obligations are subordinated to the Obligations, such
guaranty shall be subordinated to the Obligations on the same terms as such Debt
or other obligations are subordinated to the Obligations;

 

(i) Contingent Obligations arising under the Venturi Staffing Purchase
Agreement, as in effect on the date hereof, including, without limitation the
transition services and guarantees of leases contemplated therein in an amount
not to exceed $5,500,000 in the aggregate at any time outstanding; and

 

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(j) Contingent Obligations arising under the Second Lien Debt Documents.

 

Section 5.4 Restricted Distributions.

 

Such Credit Party will not, and will not permit any Subsidiary to, directly or
indirectly, declare, order, pay, make or set apart any sum for any Restricted
Distribution or accept any Restricted Distribution; provided that the foregoing
shall not restrict or prohibit Subsidiaries of any Borrower from making
dividends or distributions to such Borrower (and the acceptance by such Borrower
of such dividends and distributions) and shall not restrict or prohibit:

 

(a) dividends or distributions by COMSYS IT to Holdings, which are immediately
used by Holdings to pay taxes payable by Holdings;

 

(b) dividends or distributions by COMSYS IT to Holdings, which are immediately
used by Holdings to pay reasonable director fees payable by Holdings, so long as
before and after giving effect to any such dividend or distribution no Event of
Default shall have occurred and be continuing;

 

(c) dividends or distributions by COMSYS IT to Holdings, which are immediately
used by Holdings to pay administrative expenses, including without limitation
reimbursements of directors for actual out-of-pocket expenses incurred in
connection with attending board of director meetings and attorney fees, so long
as (i) before and after giving effect to any such dividends or distributions no
Event of Default shall have occurred and be continuing and (ii) such payments do
not exceed $200,000 in the aggregate in any Fiscal Year;

 

(d) dividends or distributions by COMSYS IT to Holdings, which are immediately
used by Holdings to pay, in the ordinary course of business, liabilities of
Holdings in respect of (i) lease obligations, (ii) license obligations,
(iii) insurance premiums and (iv) other liabilities customarily incurred by
public holding companies similarly situated, so long as (x) with respect to
obligations arising under leases and licenses, such leases and licenses were
entered into by Holdings prior to September 30, 2004 or constitute renewals or
extensions thereof (provided that such renewals or extensions are on
substantially the same terms and conditions as such leases and licenses in
effect on September 30, 2004) and (y) all such payments do not exceed $5,000,000
in the aggregate in any Fiscal Year;

 

(e) in the event any Lender elects to waive such Lender’s Pro Rata Share of any
mandatory prepayment in accordance with the terms and provisions set forth in
Section 2.1(e) and such mandatory prepayment is subsequently waived by the
Second Lien Lenders in accordance with the terms and provisions of
Section 2.1(e) of the Second Lien Credit Agreement, dividends or distributions
by COMSYS IT to Holdings, which are immediately used by Holdings to consummate a
Series A-1 Preferred Stock Redemption in an amount not exceeding such waived
mandatory prepayment;

 

(f) in the event Holdings issues and sells common stock of Holdings (other than
any such issuance and sale constituting the 2006 Equity Issuance), a Series A-1
Preferred Stock Redemption made solely with the Net Cash Proceeds of such
issuance and sale, to the extent the Net Cash Proceeds of such equity issuance
and sale are not required to be applied as a mandatory prepayment of the Loans
in accordance with Section 2.1(c)(iii)(B), and in any event, in an amount not
exceeding fifty percent (50%) of such Net Cash Proceeds; and

 

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(g) in the event the 2006 Equity Issuance is consummated, Series A-1 Preferred
Stock Redemptions, so long as:

 

(i) the amount of any such Restricted Distribution does not exceed the lesser at
such time of (A) the cash amount necessary to redeem all then outstanding Series
A-1 Preferred Stock and (B) the 2006 Equity Issuance Available Amount;

 

(ii) after giving effect to any such Restricted Distribution, the Borrowers are
in compliance on a pro forma basis with the covenants set forth in Article VII,
recomputed for the most recent fiscal quarter for which financial statements
have been delivered hereunder (provided, that, solely for purposes of this
Section 5.4(g)(ii), anything contained in Article VII to the contrary
notwithstanding, the Credit Parties shall be deemed to be bound by the covenants
set forth in such Article VII at the time of such Restricted Distribution);

 

(iii) after giving effect to any such Restricted Distribution, the ratio of
(x) Total Debt as of such date to (y) Adjusted EBITDA for the most recent four
(4) fiscal quarter period ended for which financial statements have been
delivered hereunder is less than 3.75 to 1.00;

 

(iv) immediately before giving effect thereto, no Default or Event of Default
has occurred and is continuing and no Default or Event of Default would arise as
a result of such Restricted Distribution; and

 

(v) such Restricted Distribution is made within one hundred eighty days
(180) days following the consummation of the 2006 Equity Issuance; and

 

(h) dividends or distributions by COMSYS IT to Holdings, which are immediately
used by Holdings to consummate a Series A-1 Preferred Stock Redemption, so long
as:

 

(i) immediately before giving effect thereto, no Default or Event of Default has
occurred and is continuing and no Default or Event of Default would arise as a
result of such Restricted Distribution and/or any payment required pursuant to
clause (v) of this Section 5.4(h);

 

(ii) after giving effect to such Restricted Distribution and any payment
required pursuant to clause (v) of this Section 5.4(h), the Borrowers are in
compliance on a pro forma basis with the covenants set forth in Article VII,
recomputed for the most recent fiscal quarter for which financial statements
have been delivered hereunder (provided, that, solely for purposes of this
Section 5.4(h)(ii), anything contained in Article VII to the contrary
notwithstanding, the Credit Parties shall be deemed to be bound by the covenants
set forth in such Article VII at the time of such Restricted Distribution);

 

(iii) after giving effect to such Restricted Distribution and any payment
required pursuant to clause (v) of this Section 5.4(h), the Borrowers shall have
Net Borrowing Availability of not less than $30,000,000 (provided, that, for
purposes of determining Net Borrowing Availability solely with respect to this
Section 5.4(h)(iii), the Permanent Reserve shall not be deducted in the
calculation of the Borrowing Base);

 

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(iv) after giving effect to such Restricted Distribution and any payment
required pursuant to clause (v) of this Section 5.4(h), the ratio of (x) Total
Debt as of such date to (y) Adjusted EBITDA for the most recent four (4) fiscal
quarter period ended for which financial statements have been delivered
hereunder is no greater than 3.50 to 1.00; and

 

(v) to the extent required by the Second Lien Credit Agreement (and not waived
or refused by the Second Lien Lenders), the Borrowers shall have prepaid the
Second Lien Term Loan and any applicable prepayment premiums associated with
such prepayment in an amount equal to the amount of the Restricted Distribution
to be made by the Borrowers to Holdings and used by Holdings to consummate such
Series A-1 Preferred Stock Redemption and shall have provided evidence to the
Agent, reasonably satisfactory to the Agent, that such prepayment has been
applied to the Second Lien Term Loan; and

 

(i) dividends or distributions by COMSYS IT to Holdings, which are immediately
used by Holdings to pay remaining costs and expenses resulting from the
Attempted 2005 Equity Issuance and the attempted bond offering abandoned in
2005, so long as (i) before and after giving effect to any such dividends or
distributions no Event of Default shall have occurred and be continuing,
(ii) all such payments are made no later than January 31, 2006 and (iii) such
payments do not exceed $250,000 in the aggregate.

 

Section 5.5 Restrictive Agreements.

 

Such Credit Party will not, and will not permit any Subsidiary to, directly or
indirectly:

 

(a) enter into or assume any agreement (other than the Financing Documents, the
Second Lien Debt Documents and documents governing Permitted Liens) prohibiting
the creation or assumption of any Lien upon its properties or assets, whether
now owned or hereafter acquired; or

 

(b) create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any
Subsidiary to: (i) pay or make Restricted Distributions to any Credit Party
(except as provided by the Second Lien Credit Agreement and the Financing
Documents); (ii) pay any Debt owed to any Credit Party (except as provided by
the Second Lien Credit Agreement and the Financing Documents); (iii) make loans
or advances to any Credit Party (except as provided by the Second Lien Credit
Agreement and the Financing Documents); or (iv) transfer any of its property or
assets to any Credit Party (except (A) as provided by the Second Lien Credit
Agreement and the Financing Documents, (B) by reason of customary provisions
restricting assignments, subletting or other transfers contained in leases,
licenses, customer agreements and joint venture agreements entered into in the
ordinary course of business, provided that, in each case, any such restriction
contained therein relates only to the asset or assets subject to such agreement
and (C) as provided in other agreements governing Permitted Liens).

 

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Section 5.6 Payments and Modifications of Second Lien Debt, Subordinated Debt
and Earnouts.

 

The Credit Parties will not, and will not permit their Subsidiaries to, directly
or indirectly:

 

(a) declare, pay, make or set aside any amount for any payment in respect of the
Second Lien Debt, except for such payments required under and made pursuant to
the terms of the Second Lien Debt Documents and the Second Lien Intercreditor
Agreement;

 

(b) amend, alter, waive or modify the Second Lien Debt Documents, except to the
extent permitted pursuant to the Second Lien Intercreditor Agreement;

 

(c) declare, pay, make or set aside any amount for any payment in respect of the
Holdings Intercompany Loan;

 

(d) declare, pay, make or set aside any amount for any payment in respect of the
PS Earnout, except for such payments required to be made in accordance with
Sections 1.5(a)(i), 1.5(a)(v) and 1.5(b) of the PS Purchase Agreement, as in
effect on the PS Closing Date, or as otherwise agreed to by Agent, in each case,
in accordance with the following and provided that the following conditions are
satisfied in respect of any and all such distributions and payments:

 

(i) no more than $2,500,000 shall be paid in cash in respect of any PS Annual
Earnout (including, without limitation, any PS Interim Earnout Payments) during
any PS Earnout Period and no more than $7,500,000 in respect of all PS Annual
Earnouts in the aggregate during the term of this Agreement;

 

(ii) no more than $750,000 shall be paid in cash in respect of the PS Additional
Earnout;

 

(iii) no Default or Event of Default has occurred and is continuing or would
arise as a result of any such payment;

 

(iv) after giving effect to any such payment, the Borrowers are in compliance on
a pro forma basis with the covenants set forth in Article VII, recomputed for
the most recent quarter for which financial statements have been delivered
(provided, that, solely for purposes of this Section 5.6(d)(iv), anything
contained in Article VII to the contrary notwithstanding, the Credit Parties
shall be deemed to be bound by the covenants set forth in such Article VII at
the time of such payment); and

 

(v) the Funds Administrator shall have delivered to the Agent a certificate
certified by an authorized officer of the Funds Administrator setting forth the
calculation of the amount of the applicable PS Earnout in form and substance
reasonably acceptable to the Agent;

 

(e) declare, pay, make or set aside any amount for payment in respect of any
Earnout (other than the PS Earnout), except for such payments required to be
made in accordance with the terms set forth in the applicable acquisition
document, provided that the following conditions are satisfied in respect of any
and all such distributions and payments:

 

(i) immediately before giving effect thereto, no Default or Event of Default has
occurred and is continuing and no Default or Event of Default would arise as a
result of any such payment;

 

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(ii) after giving effect to any such payment, the Borrowers are in compliance on
a pro forma basis with the covenants set forth in Article VII, recomputed for
the most recent fiscal quarter for which financial statements have been
delivered (provided, that, solely for purposes of this Section 5.6(e)(ii),
anything contained in Article VII to the contrary notwithstanding, the Credit
Parties shall be deemed to be bound by the covenants set forth in such Article
VII at the time of such payment); and

 

(iii) after giving effect to such payment, the Borrowers shall have Net
Borrowing Availability of not less than $25,000,000 (provided, that, for
purposes of determining Net Borrowing Availability solely with respect to this
Section 5.6(e)(iii), the Permanent Reserve shall not be deducted in the
calculation of the Borrowing Base); or

 

(f) amend or otherwise modify the terms of any Earnout if the effect of such
amendment or modification is to (i) change the dates upon which payments are due
and owing with respect to such Earnout or the amounts of such payments;
(ii) change the subordination provisions applicable thereto, if any; or
(iii) change or amend any other term if such change or amendment would
materially increase the obligations of the applicable obligor or confer
additional material rights on the applicable obligee in respect of such Earnout
in a manner adverse to any Borrower, any Subsidiaries, Agent or Lenders.

 

Section 5.7 Consolidations, Mergers and Sales of Assets.

 

Such Credit Party will not, and will not permit any Subsidiary to, directly or
indirectly:

 

(a) consolidate or merge with or into any other Person (except, upon not less
than five (5) Business Days’ prior written notice to Agent, (i) any Subsidiary
of any Borrower may merge with, or dissolve or liquidate into any Borrower,
provided that such Borrower shall be the continuing or surviving entity,
(ii) PFI may merge with any Borrower, provided that such Borrower shall be the
continuing or surviving entity, (iii) PFI may merge with and into Holdings and
(iv) any Borrower may merge with any other Borrower, provided that, in the case
of clauses (i) through (iv) above, such Credit Party shall comply with the
provisions set forth in Section 4.9); or

 

(b) sell, lease, license or otherwise transfer, directly or indirectly, any of
its or their assets, other than:

 

(i) the granting of licenses of intellectual property (as licensor) in the
ordinary course of business;

 

(ii) dispositions of cash and Cash Equivalents; and

 

(iii) dispositions of Equipment for cash and fair value that the board of
directors (or comparable body) of such Credit Party determines in good faith is
no longer used or useful in the business of such Credit Party and its
Subsidiaries if all of the following conditions

 

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are met: (1) the market value of assets sold or otherwise disposed of in any
single transaction or series of related transactions does not exceed $500,000
and the aggregate market value of assets sold or otherwise disposed of in any
Fiscal Year of the Credit Parties does not exceed $1,000,000 in the aggregate;
(2) the Net Cash Proceeds of such Asset Disposition are applied as required by
Section 2.1(c)(iv); (3) after giving effect to the Asset Disposition and the
repayment of Debt with the proceeds thereof, the Credit Parties are in
compliance on a pro forma basis with the covenants set forth in Article VII
recomputed for the most recently ended quarter for which information is
available and are in compliance with all other terms and conditions of this
Agreement (provided, that, solely for purposes of this Section 5.7(b)(iii),
anything contained in Article VII to the contrary notwithstanding, the Credit
Parties shall be deemed to be bound by the covenants set forth in such Article
VII at the time of such disposition); and (4) no Default or Event of Default
then exists or would result from such Asset Disposition. The Agent will upon the
written request of the Borrowers, release its Lien and security interest in any
Collateral that is sold or transferred in a transaction permitted by this
Section 5.7 (other than with respect to a transaction from one Credit Party to
another), provided that the Second Lien Collateral Agent concurrently releases
its Lien and security interest in such Collateral. To facilitate any such
release the Agent will, at the expense of the Borrowers, execute and deliver
release documentation as reasonably requested by the Borrowers.

 

Section 5.8 Purchase of Assets, Investments.

 

Such Credit Party will not, and will not permit any of its Subsidiaries to,
directly or indirectly acquire any assets other than, solely with respect to the
Borrowers and their respective Subsidiaries, (i) in the ordinary course of
business or (ii) as otherwise set forth in this Section 5.8. Such Credit Party
will not, and will not permit any Subsidiary to, directly or indirectly make,
acquire or own any Investment in any Person other than:

 

(a) Investments set forth on the Information Certificate, to the extent set
forth therein (other than (i) Investments in Subsidiaries permitted pursuant to
clause (c) and (j) of this Section 5.8);

 

(b) Cash Equivalents;

 

(c) Investments in Borrowers and Domestic Wholly-Owned Subsidiaries of the
Borrowers, so long as (i) all of the outstanding capital stock or other equity
interests of any such Subsidiary or such Borrower, as the case may be, has been
pledged to Agent and (ii) with respect to investments in Subsidiaries that are
not Borrowers, any such Subsidiary has Guaranteed the Obligations and secured
such Guarantee by granting in favor of Agent, for its benefit and the benefit of
the Lenders, a Lien on all or substantially all of the assets;

 

(d) intercompany loans to Foreign Subsidiaries to the extent permitted pursuant
to Section 5.1(d);

 

(e) bank deposits established in accordance with Section 5.15;

 

(f) Investments in securities of Account Debtors received pursuant to any plan
of reorganization or similar arrangement upon the bankruptcy or insolvency of
such Account Debtors;

 

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(g) Investments in the form of Holdings Loans;

 

(h) the Holdings Intercompany Loan;

 

(i) Permitted Acquisitions, including the establishment and capitalization of
wholly-owned Subsidiaries in connection therewith; and

 

(j) Investments of Holdings (to the extent owned by Holdings on the Closing
Date) in the capital stock or other equity securities of (i) Econometrix, Inc.,
a California corporation, (ii) AutoHire Development, Inc., (iii) VTP-CA, Inc., a
North Carolina corporation and (iv) PFI, provided, in each case, all of the
outstanding capital stock or other equity interests of any such Person owned by
Holdings has been pledged to Agent;

 

(k) Investments in the form of Swap Contracts permitted under Section 5.3(f);
and

 

(l) other Investments not described above in an aggregate amount not to exceed
$1,000,000 at any one time outstanding.

 

Without limiting the generality of the foregoing, such Credit Party will not,
and will not permit any Subsidiary to, (i) acquire or create any Subsidiary
(other than in connection with a Permitted Acquisition) or (ii) engage in any
joint venture or partnership with any other Person.

 

Section 5.9 Transactions with Affiliates.

 

Except (i) as otherwise disclosed in the Information Certificate, (ii) as
permitted pursuant to the terms of this Agreement, (iii) for transactions
between or among the Borrowers, and their Domestic Wholly-Owned Subsidiaries in
the ordinary course of business, (iv) transactions contemplated by the Venturi
Staffing Purchase Agreement and (v) for transactions that are disclosed to Agent
in writing in advance of being entered into and which contain terms that are no
less favorable to such Credit Party or any Subsidiary, as the case may be, than
those which might be obtained from a third party not an Affiliate of any Credit
Party, such Credit Party will not, and will not permit any Subsidiary to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of the Credit Parties.

 

Section 5.10 Modification of Organizational Documents.

 

Such Credit Party will not, and will not permit any Subsidiary to, directly or
indirectly amend or otherwise modify any Organizational Documents of such Person
in any material respect in a manner that would be adverse to the rights and
remedies of Agent and Lenders or adversely impair the ability of such Credit
Party to perform its obligations under the Financing Documents.

 

Section 5.11 Fiscal Year.

 

Such Credit Party will not, and will not permit any Subsidiary to, change its
Fiscal Year.

 

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Section 5.12 Conduct of Business.

 

Such Credit Party will not, and will not permit any Subsidiary to, directly or
indirectly, engage in any line of business other than those businesses engaged
in on the Closing Date and businesses reasonably related thereto.

 

Section 5.13 Intentionally Omitted.

 

Section 5.14 Lease Payments.

 

Such Credit Party will not, and will not permit any Subsidiary to, directly or
indirectly, incur or assume (whether pursuant to a Guarantee or otherwise) any
liability for rental payments under a lease (other than, with respect to the
Credit Parties, leases for real property) with a lease term of one (1) year or
more if, after giving effect thereto, the aggregate amount of minimum lease
payments that Holdings and its Consolidated Subsidiaries have so incurred or
assumed will exceed, on a consolidated basis, $1,000,000 for any calendar year
under all such leases (excluding, with respect to the Credit Parties, Capital
Leases and leases for real property).

 

Section 5.15 Bank Accounts.

 

Without limiting the provisions of Section 6.1(d), such Credit Party will not,
and will not permit any Subsidiary to, directly or indirectly, establish any new
bank account without prior written notice to Agent and unless Agent, such Credit
Party or such Subsidiary and the bank at which the account is to be opened enter
into a control agreement regarding such bank account pursuant to which such bank
acknowledges the security interest of Agent in such bank account, agrees to
comply with instructions originated by Agent directing disposition of the funds
in the bank account without further consent from any Credit Party, and agrees to
subordinate and limit any security interest the bank may have in the bank
account on terms reasonably satisfactory to Agent.

 

Section 5.16 Compliance with Anti-Terrorism Laws.

 

(a) No Borrower will, or will permit any Subsidiary to, directly or indirectly,
knowingly enter into any Operative Documents or Material Contracts with any
Person listed on the OFAC Lists. Each Borrower shall immediately notify Agent if
such Borrower has knowledge that any Borrower or any additional Credit Party or
any of their Affiliates or agents acting or benefiting in a capacity in
connection with the transactions contemplated by this Agreement is or becomes a
Blocked Person or (i) is convicted on, (ii) pleads nolo contendere to, (iii) is
indicted on or (iv) is arraigned and held over on charges involving money
laundering or predicate crimes to money laundering. No Borrower will, or will
permit any Subsidiary to, directly or indirectly, (i) conduct any business or
engage in any transaction or dealing with any Blocked Person, including, without
limitation, the making or receiving of any contribution of funds, goods or
services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise
engage in any transaction relating to, any property or interests in property
blocked pursuant to Executive Order No. 13224, any similar executive order or
other Anti-Terrorism Law, or (iii) engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in Executive Order
No. 13224 or other Anti-Terrorism Law.

 

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(b) Agent hereby notifies each Borrower that pursuant to the requirements of the
USA PATRIOT Act, and Agent’s policies and procedures, Agent is required to
obtain, verify and record certain information and documentation that identifies
each Borrower, which information includes the name and address of each Borrower
and such other information that will allow Agent to identify each Borrower in
accordance with the USA PATRIOT Act.

 

ARTICLE VI

ACCOUNTS REPRESENTATIONS,

WARRANTIES, COVENANTS AND AGREEMENTS

 

To induce Agent and Lenders to enter into this Agreement and to make the Loans
and other credit accommodations contemplated hereby, each Credit Party hereby
represents and warrants to Agent and each Lender, and further agrees with Agent
and each Lender, that:

 

Section 6.1 Accounts and Account Collections.

 

(a) Such Credit Party shall notify Agent promptly of: (i) any material delay in
the performance by such Credit Party or any of its Subsidiaries of any of their
material obligations to any Account Debtor or the assertion of any material
claims, offsets, defenses or counterclaims by any Account Debtor, or any
material disputes with Account Debtors, or any settlement, adjustment or
compromise thereof, (ii) all material adverse information known to any Credit
Party relating to the financial condition of any Account Debtor and (iii) any
event or circumstance which, to any Credit Party’s knowledge, would result in
any Account no longer constituting an Eligible Account. Each Credit Party hereby
agrees not to grant to any Account Debtor, and to cause each of its Subsidiaries
not to grant to any Account Debtor, any material credit, discount, allowance or
extension, or to enter into any agreement for any of the foregoing, without
Agent’s consent, except in the ordinary course of business in accordance with
past practices. So long as no Event of Default has occurred and is continuing,
any such Credit Party may settle, adjust or compromise, and may permit each of
its Subsidiaries to settle, adjust or compromise, any claim, offset,
counterclaim or dispute with any Account Debtor. At any time that an Event of
Default has occurred and is continuing, Agent shall, at its option, have the
exclusive right to settle, adjust or compromise any claim, offset, counterclaim
or dispute with Account Debtors of any Credit Party or grant any credits,
discounts or allowances.

 

(b) With respect to each Account: (i) the amounts shown on any invoice delivered
to Agent or schedule thereof delivered to Agent shall be true and complete in
all material respects, (ii) no payments shall be made thereon except payments
immediately delivered to Agent pursuant to the terms of this Agreement or any
applicable Security Document (to the extent so required), (iii) there shall be
no setoffs, deductions, contras, defenses, counterclaims or disputes existing or
asserted with respect thereto except as reported to Agent in accordance with the
terms of this Agreement, and (iv) none of the transactions giving rise thereto
will violate any applicable laws or regulations, all documentation relating
thereto will be legally sufficient under such laws and regulations and all such
documentation will be legally enforceable in accordance with its terms.

 

(c) Agent shall have the right at any time or times, upon prior notice to the
Funds Administrator so long as no Default or Event of Default has occurred and
is continuing, in

 

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Agent’s name or in the name of a nominee of Agent, to verify the validity,
amount or any other matter relating to any Account or other Collateral, by mail,
telephone, e-mail, facsimile transmission or otherwise; provided, that so long
as no Default or Event of Default has occurred and is continuing, Agent shall
afford the Funds Administrator the opportunity to participate in any such
discussions with Account Debtors. To facilitate the exercise of the right
described in the immediately preceding sentence, each Credit Party hereby agrees
to provide Agent upon request the name and address of each Account Debtor of any
Credit Party or any of such Credit Party’s Subsidiaries.

 

(d) Each Credit Party (other than Foreign Subsidiaries) shall establish and
maintain, at its sole expense, and shall cause each Subsidiary to establish and
maintain, at its sole expense, blocked accounts or lockboxes and related blocked
accounts (in either case, “Blocked Accounts”), as Agent may reasonably specify,
with such banks as are reasonably acceptable to Agent into which such Credit
Party and its Subsidiaries shall promptly deposit and direct their respective
Account Debtors to directly remit all payments on Accounts and all payments
constituting proceeds of Collateral in the identical form in which such payments
are made, whether by cash, check or other manner. Each Credit Party shall
deliver, or cause to be delivered, to Agent a Deposit Account Control Agreement
duly authorized, executed and delivered by each bank where a Blocked Account for
the benefit of such Credit Party or any of its Subsidiaries is maintained, and
by each bank where any other Deposit Account is from time to time maintained.
Each Credit Party shall further execute and deliver, and shall cause each of its
Subsidiaries to execute and deliver, such agreements and documents as Agent may
reasonably require in connection with such Blocked Accounts, Deposit Accounts
and such Deposit Account Control Agreements. Without limiting the provisions of
Section 5.15, no Credit Party shall establish, and no Credit Party (other than a
Foreign Subsidiary) shall cause or permit any of its Subsidiaries to establish,
any Deposit Accounts not existing as of the Closing Date, unless such Credit
Party or its Subsidiaries (as applicable) have complied in full with the
provisions of this Section 6.1 with respect to such Deposit Accounts. Each
Credit Party agrees that all payments made to such Blocked Accounts or other
funds received and collected by Agent or any Lender, whether in respect of the
Accounts, as proceeds of Collateral or otherwise shall be treated as payments to
Agent and Lenders in respect of the Obligations and therefore shall constitute
the property of Agent and Lenders to the extent of the then outstanding
Obligations. The foregoing and anything contained in any Financing Document to
the contrary notwithstanding, the Credit Parties shall not be required to
deliver any such Deposit Account Control Agreements in respect of (i) any
“Payroll Account” or “Payroll Tax Account” (in each case, as defined on the Bank
Account Schedule to the Information Certificate) each maintained at Wachovia
Bank, National Association; provided, that, the Credit Parties shall not, and
shall not cause or permit any of their respective Subsidiaries to, deposit or
maintain funds in such account other than funds deposited therein in the
ordinary course of business for purposes of funding current payroll liabilities,
(ii) the “Benefit Accounts” (as defined on the Bank Account Schedule to the
Information Certificate) and the “Pre-Tax Parking Account” (as defined on the
Bank Account Schedule to the Information Certificate) maintained at Wachovia
Bank, National Association; provided, that, in each case, the Credit Parties
shall not, and shall not cause or permit any of their respective Subsidiaries
to, deposit or maintain funds in such accounts other than funds deposited
therein at the direction of such Credit Party’s employees to be held therein for
the benefit of the employees of such Credit Party and the Credit Parties will at
no time deposit any of their own assets into such accounts and (iii) any other
Restricted Account; provided, that the Credit Parties shall not,

 

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and shall not cause or permit any of their respective Subsidiaries to, deposit
or maintain funds in such Restricted Accounts other than funds deposited therein
in the ordinary course of business for funding current liabilities. At no time
shall any Credit Party or any of its Subsidiaries deposit, or permit or direct
any Account Debtor or any other Person (other than Agent) to deposit, funds
directly into any account maintained by any Credit Party other than the
“Depository Accounts,” and/or the “Lockboxes” maintained at Wachovia Bank,
National Association (in each case, as defined in the Information Certificate).

 

(e) For purposes of calculating the amount of the Loans available to the
Borrowers, payments made to a Blocked Account will be applied (conditional upon
final collection) to the Obligations on the Business Day of receipt by Agent of
immediately available funds in the Payment Account provided such payments and
notice thereof are received in accordance with Agent’s usual and customary
practices as in effect from time to time and with sufficient time to credit the
Loan Account on such day, and if not, then on the next Business Day. For the
purposes of calculating interest on the Obligations, such payments or other
funds received shall be deemed applied (conditional upon final collection) to
the Obligations one (1) Business Day following the date of receipt of
immediately available funds by Agent in the Payment Account provided such
payments or other funds and notice thereof are received in accordance with
Agent’s usual and customary practices as in effect from time to time and with
sufficient time to credit the Loan Account on such day, and if not, then on the
next Business Day.

 

(f) The Credit Parties and their respective directors, employees, agents,
Subsidiaries and other Affiliates shall, acting as trustee for Agent, receive,
as the property of Agent, any monies, checks, notes, drafts or any other payment
relating to and/or proceeds of Accounts, Inventory or other Collateral which
come into their possession or under their control and immediately upon receipt
thereof, shall deposit or cause the same to be deposited in the Blocked
Accounts, or remit the same or cause the same to be remitted, in kind, to Agent.
In no event shall the same be commingled with the Credit Parties’ own funds.
Each Credit Party agrees to reimburse Agent on demand for any amounts owed or
paid to any bank at which a Blocked Account is established or any other bank or
Person involved in the transfer of funds to or from the Blocked Accounts arising
out of Agent’s payments to or indemnification of such bank or Person.

 

ARTICLE VII

FINANCIAL COVENANTS

 

Credit Party that is a party hereto agrees that, so long as any Credit Exposure
exists:

 

Section 7.1 Fixed Charge Coverage Ratio.

 

In the event Net Borrowing Availability of the Borrowers (disregarding the
Permanent Reserve in the calculation of the Borrowing Base) is equal to or less
than $25,000,000 as reflected on any Borrowing Base Certificate delivered to
Agent in accordance with the terms of this Agreement (or, if the Funds
Administrator, on behalf of the Borrowers, shall at any time fail to timely
deliver a Borrowing Base Certificate in accordance with the terms of this
Agreement, and Net Borrowing Availability is determined by Agent to be equal to
or less than $25,000,000 in the exercise of its reasonable credit judgment based
on a calculation of Net Borrowing

 

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Availability reflected in the most recently delivered Borrowing Base
Certificate, with such adjustments to the values of Eligible Billed Accounts and
Eligible Unbilled Accounts as Agent deems appropriate in the exercise of its
reasonable credit judgment), then commencing with the first fiscal quarter
ending after delivery of such Borrowing Base Certificate (or such determination
by Agent, as the case may be) and at all times thereafter, the Credit Parties
shall not permit the Fixed Charge Coverage Ratio for the four (4) fiscal quarter
period ending on the last day of such fiscal quarter or any subsequent fiscal
quarter to be less than 1.10 to 1.00.

 

Section 7.2 Total Debt to Adjusted EBITDA Ratio.

 

In the event Net Borrowing Availability of the Borrowers (disregarding the
Permanent Reserve in the calculation of the Borrowing Base) is equal to or less
than $25,000,000 as reflected on any Borrowing Base Certificate delivered to
Agent in accordance with the terms of this Agreement (or, if the Funds
Administrator, on behalf of the Borrowers, shall at any time fail to timely
deliver a Borrowing Base Certificate in accordance with the terms of this
Agreement, and Net Borrowing Availability is determined by Agent to be equal to
or less than $25,000,000 in the exercise of its reasonable credit judgment based
on a calculation of Net Borrowing Availability reflected in the most recently
delivered Borrowing Base Certificate, with such adjustments to the values of
Eligible Billed Accounts and Eligible Unbilled Accounts as Agent deems
appropriate in the exercise of its reasonable credit judgment), then commencing
with the first fiscal quarter ending after delivery of such Borrowing Base
Certificate (or such determination by Agent, as the case may be) and at all
times thereafter, the Credit Parties shall not permit the ratio of (i) Total
Debt as of the last day of each such fiscal quarter ending closest to a date set
forth below to (ii) Adjusted EBITDA for the four (4) fiscal quarter period
ending on such last day to exceed the ratio set forth below opposite such date:

 

Date

--------------------------------------------------------------------------------

   Maximum Ratio

--------------------------------------------------------------------------------

December 31, 2005

   4.50 to 1.00

March 31, 2006

   4.50 to 1.00

June 30, 2006

   4.50 to 1.00

September 30, 2006

   4.50 to 1.00

December 31, 2006

   4.50 to 1.00

March 31, 2007

   4.25 to 1.00

June 30, 2007

   4.25 to 1.00

September 30, 2007

   4.00 to 1.00

December 31, 2007

   3.75 to 1.00

March 31, 2008

   3.75 to 1.00

June 30, 2008 and the last day of each calendar quarter thereafter

   3.50 to 1.00

 

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ARTICLE VIII

CONDITIONS

 

Section 8.1 Conditions to Closing.

 

The obligation of each Lender to make the initial Loans and of Agent to issue
any Support Agreements on the Closing Date shall be subject to the receipt by
Agent of each agreement, document and instrument set forth on the Closing
Checklist, each in form and substance reasonably satisfactory to Agent, and to
the consummation of the following conditions precedent, each to the satisfaction
of Agent and Lenders in their sole discretion:

 

(a) evidence of the consummation of the transactions contemplated by the
Operative Documents, including without limitation the funding of $100,000,000.00
of Second Lien Debt pursuant to the Second Lien Debt Documents;

 

(b) the payment of all fees, expenses and other amounts due and payable under
each Financing Document;

 

(c) the satisfaction of Agent and Lenders as to the absence, since January 2,
2005, of any material adverse change in the business, operations, properties or
condition (financial or otherwise) of the Credit Parties taken as a whole, or
any event or condition which could reasonably be expected to result in such a
material adverse change;

 

(d) the receipt of the initial Borrowing Base Certificate, prepared as of the
Closing Date, which certificate shall evidence Net Borrowing Availability of not
less than $25,000,000 after giving effect to the initial funding of Loans on the
Closing Date and the consummation of the transactions contemplated by the
Operative Documents;

 

(e) after giving effect to the initial funding of the Loans and the consummation
of the transactions contemplated by the Operative Documents, the ratio of
(x) Total Debt as of the Closing Date to (y) EBITDA for the four (4) fiscal
quarter period ending September 30, 2005 does not exceed 3.75 to 1.00;

 

(f) the receipt of pro forma financial statements of Holdings and its
Consolidated Subsidiaries which evidence minimum EBITDA for the four (4) quarter
period for which financial information has been delivered of no less than
$40,500,000;

 

(g) receipt by Agent of evidence of completion to the satisfaction of the Agent
of such investigations, reviews and audits with respect to the Credit Parties as
the Agent or any Lender may deem appropriate;

 

(h) receipt by Agent of payoff letters and releases evidencing the repayment in
full of all Existing Debt; and

 

(i) receipt by Agent of such other documents, instruments and/or agreements as
Agent may reasonably request.

 

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Section 8.2 Conditions to Each Loan and Support Agreement.

 

Except as set forth in the final two paragraphs of Section 2.1(c) and
Section 2.1(c)(iii)(D)(3) and (4), the obligation of the Lenders to make a Loan
or of Agent to issue any Support Agreement (including on the Closing Date) is
subject to the satisfaction of the following additional conditions:

 

(a) in the case of a Revolving Loan Borrowing, receipt by Agent of a Notice of
Borrowing in accordance with Section 2.2(b) and, in the case of any Support
Agreement, receipt by Agent of a Notice of LC Credit Event in accordance with
Section 2.5(a);

 

(b) the fact that, immediately after such borrowing and after application of the
proceeds thereof or after such issuance, the Revolving Loan Outstandings will
not exceed the Revolving Loan Limit;

 

(c) the fact that, immediately before and after such borrowing or issuance, no
Default or Event of Default shall have occurred and be continuing; and

 

(d) the fact that the representations and warranties of each Credit Party
contained in the Financing Documents shall be true and correct in all material
respects on and as of the date of such borrowing or issuance, except to the
extent that any such representation or warranty (i) relates to a specific date
in which case such representation or warranty shall be true and correct as of
such earlier date and (ii) is qualified by materiality or has Material Adverse
Effect qualifiers, in which case, such representations and warranties shall be
true and correct in all respects on and as of the date of such borrowing or
issuance.

 

Except as set forth in the final two paragraphs of Section 2.1(c) and
Section 2.1(c)(iii)(D)(3) and (4), each borrowing, each giving of a Notice of LC
Credit Event hereunder and each giving of a Notice of Borrowing hereunder shall
be deemed to be a representation and warranty by each Credit Party on the date
of such borrowing or notice as to the facts specified in Sections 8.2(b), 8.2(c)
and 8.2(d).

 

ARTICLE IX

EVENTS OF DEFAULT

 

Section 9.1 Events of Default.

 

For purposes of the Financing Documents, the occurrence of any of the following
conditions and/or events, whether voluntary or involuntary, by operation of law
or otherwise, shall constitute an “Event of Default”:

 

(a) The Borrowers shall fail to pay when due any principal, interest, premium or
fee under any Financing Document or any other amount payable under any Financing
Document;

 

(b) Any Borrower or other Credit Party shall fail to observe or perform any
covenant contained in the Fee Letter, Section 4.1, Section 4.4, Section 4.7,
Section 4.9, Article V, Article VI or Article VII;

 

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(c) any Credit Party defaults in the performance of or compliance with any term
contained in this Agreement or in any other Financing Document (other than
occurrences described in other provisions of this Section 9.1 for which a
different grace or cure period is specified or which constitute immediate Events
of Default) and such default is not remedied or waived within fifteen (15) days
after the earlier of (1) receipt by the Funds Administrator of notice from Agent
or Required Lenders of such default or (2) actual knowledge of any Borrower or
any other Credit Party of such default;

 

(d) any representation, warranty, certification or statement made by any Credit
Party or any other Person in any Financing Document or in any certificate,
financial statement or other document delivered pursuant to any Financing
Document is incorrect in any respect (or in any material respect if such
representation, warranty, certification or statement is not by its terms already
qualified as to materiality) when made (or deemed made);

 

(e) (1) failure of any Credit Party to pay when due or within any applicable
grace period any principal, interest or other amount on Debt (other than the
Loans) or in respect of any Swap Contract, or the occurrence of any breach,
default, condition or event with respect to any Debt (other than the Loans) or
in respect of any Swap Contract, if the effect of such failure or occurrence is
to cause or to permit the holder or holders of any such Debt, or the
counterparty under any such Swap Contract, to cause, Debt or other liabilities
having an individual principal amount in excess of $1,000,000 or having an
aggregate principal amount in excess of $1,500,000 to become or be declared due
prior to its stated maturity; or (2) the occurrence of any “Event of Default”
(as defined in the Second Lien Credit Agreement) under the Second Lien Debt
Documents;

 

(f) any Credit Party shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing;

 

(g) an involuntary case or other proceeding shall be commenced against any
Credit Party seeking liquidation, reorganization or other relief with respect to
it or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of sixty (60) days; or an order for relief
shall be entered against any Credit Party under the federal bankruptcy laws as
now or hereafter in effect;

 

(h) (1) institution of any steps by any Person to terminate a Pension Plan if as
a result of such termination any Credit Party or any member of the Controlled
Group could be required to make a contribution to such Pension Plan, or could
incur a liability or obligation to such Pension Plan, in excess of $1,000,000,
(2) a contribution failure occurs with respect to any Pension Plan sufficient to
give rise to a Lien under Section 302(f) of ERISA, or (3) there shall occur any
withdrawal or partial withdrawal from a Multiemployer Pension Plan and the

 

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withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans
as a result of such withdrawal (including any outstanding withdrawal liability
that any Credit Party or any member of the Controlled Group have incurred on the
date of such withdrawal) exceeds $1,000,000;

 

(i) one or more judgments or orders for the payment of money aggregating in
excess of $2,000,000 shall be rendered against any or all Credit Parties and
such judgments or orders shall continue unsatisfied and unstayed for a period of
ten (10) days;

 

(j) (1) any person or group of persons (within the meaning of the Securities
Exchange Act of 1934) (other than Wachovia Investors, Inc. and its Affiliates)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934) of fifty percent (50%) or more of the
issued and outstanding shares of capital stock of Holdings having the right to
vote for the election of the directors of Holdings under ordinary circumstances,
(2) Holdings shall cease to directly own and control one hundred percent
(100%) of each class of the outstanding equity interests of COMSYS IT and PFI,
(3) COMSYS IT shall cease to directly own and control one hundred percent
(100%) of the equity interests of COMSYS Services, Pure Solutions and COMSYS
Limited, (4) each Borrower shall cease to, directly or indirectly, own and
control one hundred percent (100%) of each class of the outstanding equity
interests of each Subsidiary of such Borrower (except, with respect to clauses
(2), (3) and (4), to the extent permitted in Section 5.7(a)), (5) any “Change in
Ownership,” “Fundamental Change,” or terms of similar import occurs under the
Holdings Certificate of Designations, or (6) a period of ninety (90) consecutive
days shall have elapsed during which Michael Willis shall cease to be the
chairman of the board, chief executive officer or president of each Credit Party
for any reason unless prior to the expiration of such time, a replacement
reasonably satisfactory to Agent shall have been appointed and employed;

 

(k) the accountant’s report or reports on the audited statements delivered
pursuant to Section 4.1(b) shall include any material qualification (including
with respect to the scope of audit) or exception;

 

(l) any Lien created by any of the Security Documents shall at any time fail to
constitute a valid and perfected Lien on all of the Collateral purported to be
secured thereby, subject to no prior or equal Lien except Permitted Liens, or
any Credit Party shall so assert in writing; provided that an Event of Default
shall occur if at any time the Liens in favor of Agent, for the benefit of Agent
and Lenders, do not have the priority contemplated in the Second Lien
Intercreditor Agreement;

 

(m) any Credit Party shall be prohibited or otherwise materially restrained from
conducting the business theretofore conducted by it by virtue of any casualty,
any labor strike, any determination, ruling, decision, decree or order of any
court or regulatory authority of competent jurisdiction or any other event and
such casualty, labor strike, determination, ruling, decision, decree, order or
other event remains unstayed and in effect for any period of ten (10) days;

 

(n) (i) any of the Financing Documents or the Second Lien Debt Documents shall
for any reason fail to constitute the valid and binding agreement of any party
thereto (other than,

 

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with respect to the Second Lien Debt Documents, to the extent same are paid in
full in accordance with the terms of the Financing Documents), or any such party
shall so assert in writing or (ii) any of the other Operative Documents shall
fail to constitute the valid and binding agreement of any party thereto, or any
such party shall so assert in writing, and the result of any such failures or
asserted failures, as the case may be, of such Operative Document to be a valid
and binding agreement could reasonably be expected to result in a Material
Adverse Effect;

 

(o) (i) any Security Document or other Financing Document to which Holdings,
PFI, or any other Credit Party is a party shall for any reason be partially
(including with respect to future advances) or wholly revoked or invalidated, or
otherwise ceases to be in full force and effect; or (ii) Holdings or any other
Credit Party or any Affiliate thereof shall contest in any manner the validity
or enforceability thereof or deny that it has any further liability or
obligation thereunder; or (iii) Holdings shall engage in any business activity
other than (A) as contemplated by this Agreement, (B) activities customarily
engaged in by public holding companies similarly situated, (C) activities of the
type set forth in Section 5.4 and (D) the performance of its obligations under
this Agreement, the Financing Documents to which it is a party, the Operative
Documents and any other instruments, documents or agreements entered into by
Holdings, under the Operative Documents and any other agreement to which
Holdings is a party, to the extent not otherwise prohibited by this Agreement,
or (iv) PFI shall engage in any business activity other than (A) as contemplated
by this Agreement, (B) activities incidental to maintenance of its existence and
(C) the performance of its obligations under this Agreement, the Financing
Documents to which it is a party and the Operative Documents, or

 

(p) COMSYS Limited shall (i) incur, grant or suffer to exist any Liens on any
material portion of its assets, any Debt or any Contingent Obligations (except
as expressly permitted herein), (ii) issue, sell or dispose of any equity
securities other than to COMSYS IT or (iii) consummate any merger or
consolidation with any other Person.

 

Section 9.2 Acceleration and Suspension or Termination of Revolving Loan
Commitment.

 

Upon the occurrence and during the continuance of an Event of Default, Agent
may, and shall if requested by Required Lenders, (i) by notice to the Funds
Administrator suspend or terminate the Revolving Loan Commitment, in whole or in
part (and, if in part, such reduction shall be pro rata among the Lenders having
a Revolving Loan Commitment Percentage) and/or (ii) by notice to the Funds
Administrator declare the Obligations to be, and the Obligations shall thereupon
become, immediately due and payable without presentment, demand, protest, notice
of intent to accelerate, notice of acceleration or other notice of any kind, all
of which are hereby waived by the Borrowers and the Borrowers will pay the same;
provided that in the case of any of the Events of Default specified in
Section 9.1(f) or 9.1(g) above, without any notice to the Funds Administrator or
the Borrowers or any other act by Agent or the Lenders, the Revolving Loan
Commitment shall thereupon terminate and all of the Obligations shall become
immediately due and payable without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other notice of any kind, all of
which are hereby waived by the Borrowers and the Borrowers will pay the same.

 

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Section 9.3 Cash Collateral.

 

If (i) any Event of Default specified in Section 9.1(f) or 9.1(g) shall occur,
(ii) the Obligations shall have otherwise been accelerated pursuant to
Section 9.2 or (iii) the Revolving Loan Commitment shall have been terminated
pursuant to Section 9.2, then without any request or the taking of any other
action by Agent or the Lenders, the Borrowers shall immediately comply with the
provisions of Section 2.5(e) with respect to the deposit of cash collateral to
secure the existing Letter of Credit Liability and future payment of related
fees.

 

Section 9.4 Default Rate of Interest and Suspension of LIBOR Rate Options.

 

At the election of Agent or Required Lenders, after the occurrence of an Event
of Default and for so long as it continues, the Loans and other Obligations
shall bear interest at rates that are two percent (2.0%) in excess of the rates
otherwise payable under this Agreement, but in no event in excess of the Maximum
Lawful Rate. Furthermore, at the election of Agent or Required Lenders during
any period in which any Event of Default is continuing (x) as the Interest
Periods for LIBOR Loans then in effect expire, such Loans shall be converted
into Prime Rate Loans and (y) the LIBOR election will not be available to the
Borrowers.

 

Section 9.5 Setoff Rights.

 

During the continuance of any Event of Default, each Lender is hereby authorized
by each Credit Party at any time or from time to time, with reasonably prompt
subsequent notice to the Funds Administrator (any prior or contemporaneous
notice being hereby expressly waived by the Credit Parties) to set off and to
appropriate and to apply any and all (A) balances held by such Lender at any of
its offices for the account of any Credit Party or any of its Subsidiaries
(regardless of whether such balances are then due to such Credit Party or its
Subsidiaries), and (B) other property at any time held or owing by such Lender
to or for the credit or for the account of any Credit Party or any of its
Subsidiaries, against and on account of any of the Obligations; except that no
Lender shall exercise any such right without the prior written consent of Agent.
Any Lender exercising a right to set off shall purchase for cash (and the other
Lenders shall sell) interests in each of such other Lender’s Pro Rata Share of
the Obligations as would be necessary to cause all Lenders to share the amount
so set off with each other Lender in accordance with their respective Pro Rata
Share of the Obligations. Each Credit Party agrees, to the fullest extent
permitted by law, that any Lender may exercise its right to set off with respect
to the Obligations as provided in this Section 9.5.

 

Section 9.6 Application of Proceeds.

 

Notwithstanding anything to the contrary contained in this Agreement, upon the
occurrence and during the continuance of an Event of Default, (a) each Borrower
irrevocably waives the right to direct the application of any and all payments
at any time or times thereafter received by Agent from or on behalf of the
Borrowers or any guarantor of all or any part of the Obligations, and, as
between the Borrowers on the one hand and Agent and Lenders on the other, Agent
shall have the continuing and exclusive right to apply and to reapply any and
all payments received against the Obligations in such manner as Agent may deem
advisable notwithstanding any previous application by Agent and (b) the proceeds
of any sale of, or other realization upon,

 

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all or any part of the Collateral shall be applied: first, to all fees, costs,
indemnities, liabilities, obligations and expenses incurred by or owing to Agent
(in its capacity as the Agent) with respect to this Agreement, the other
Financing Documents or the Collateral; second, to all fees, costs, indemnities,
liabilities, obligations and expenses incurred by or owing to any Lender with
respect to this Agreement, the other Financing Documents or the Collateral;
third, to accrued and unpaid interest on the Obligations (other than interest
owing to any Eligible Swap Counterparty in respect of any Swap Contracts)
(including any interest which but for the provisions of the Bankruptcy Code,
would have accrued on such amounts); fourth, to the principal amount of the
Obligations outstanding (other than obligations owing to any Eligible Swap
Counterparty in respect of any Swap Contracts); fifth, to any other indebtedness
or obligations of the Borrowers owing to Agent or any Lender under the Financing
Documents (other than obligations owing to any Eligible Swap Counterparty in
respect of any Swap Contracts) and sixth, to the obligations owing to any
Eligible Swap Counterparty in respect of any Swap Contracts. Any balance
remaining shall be delivered, to the extent applicable, in accordance with the
Second Lien Debt Documents, to the Borrowers or to whomever may be lawfully
entitled to receive such balance or as a court of competent jurisdiction may
direct.

 

ARTICLE X

EXPENSES, INDEMNITY, TAXES AND RIGHT TO PERFORM

 

Section 10.1 Expenses.

 

Each Borrower hereby agrees to promptly pay (i) all costs and expenses of Agent
(including without limitation the fees, costs and expenses of counsel to, and
independent appraisers and consultants retained by Agent) in connection with the
examination, review, due diligence investigation, documentation, negotiation,
closing and syndication of the transactions contemplated by the Financing
Documents, in connection with the performance by Agent of its rights and
remedies under the Financing Documents and in connection with the continued
administration of the Financing Documents including any amendments,
modifications, consents and waivers to and/or under any and all Financing
Documents, (ii) without limitation of the preceding clause (i), all costs and
expenses of Agent in connection with the creation, perfection and maintenance of
Liens pursuant to the Financing Documents, including title investigations,
(iii) without limitation of the preceding clause (i), expenses of Agent in
connection with protecting, storing, insuring, handling, maintaining or selling
any Collateral and in connection with any workout, collection, bankruptcy,
insolvency and other enforcement proceedings under any and all of the Financing
Documents, and (iv) all costs and expenses incurred by Lenders in connection
with any workout, collection, bankruptcy, insolvency and other enforcement
proceedings under any and all Financing Documents, provided, that to the extent
that the costs and expenses referred to in this clause (iv) consist of fees,
costs and expenses of counsel, the Borrowers shall be obligated to pay such
fees, costs and expenses for only one counsel acting for all Lenders (other than
Agent).

 

Section 10.2 Indemnity.

 

Each Credit Party that is a party hereto hereby agrees to indemnify, pay and
hold harmless Agent and Lenders and the officers, directors, employees and
counsel of Agent and Lenders (collectively called the “Indemnitees”) from and
against any and all liabilities,

 

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obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including
the fees and disbursements of counsel for such Indemnitee) in connection with
any investigative, administrative or judicial proceeding, whether or not such
Indemnitee shall be designated a party thereto and including any such proceeding
initiated by or on behalf of a Credit Party, and the reasonable expenses of
investigation by engineers, environmental consultants and similar technical
personnel and any commission, fee or compensation claimed by any broker (other
than any broker retained by Agent or Lenders) asserting any right to payment for
the transactions contemplated hereby, which may be imposed on, incurred by or
asserted against such Indemnitee as a result of or in connection with the
transactions contemplated hereby or by the other Operative Documents (including
(i)(A) as a direct or indirect result of the presence on or under, or escape,
seepage, leakage, spillage, discharge, emission or release from, any property
now or previously owned, leased or operated by any Credit Party, any Subsidiary
of any Credit Party or any other Person of any Hazardous Materials or any
Hazardous Materials Contamination, (B) arising out of or relating to the offsite
disposal of any Hazardous Materials generated or present on any such property or
(C) arising out of or resulting from the environmental condition of any such
property or the applicability of any governmental requirements relating to
Hazardous Materials, whether or not occasioned wholly or in part by any
condition, accident or event caused by any act or omission of any Credit Party
or any Subsidiary of any Credit Party, and (ii) proposed and actual extensions
of credit under this Agreement) and the use or intended use of the proceeds of
the Loans and Letters of Credit, except that no Credit Party shall have any
obligation hereunder to an Indemnitee with respect to any liability resulting
from the gross negligence or willful misconduct of such Indemnitee, as
determined by a court of competent jurisdiction. To the extent that the
undertaking set forth in the immediately preceding sentence may be
unenforceable, each Credit Party shall contribute the maximum portion which it
is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all such indemnified liabilities incurred by the Indemnitees or
any of them.

 

Section 10.3 Taxes.

 

Each Credit Party agrees to pay all governmental assessments, charges or taxes
(except income or other similar taxes imposed on Agent or Lenders), including
any interest or penalties thereon, at any time payable or ruled to be payable in
respect of the existence, execution or delivery of this Agreement or the other
Financing Documents or the making of the Loans or the issuance of Letters of
Credit and to indemnify and hold Agent and Lenders harmless against liability in
connection with any such assessments, charges or taxes.

 

Section 10.4 Right to Perform.

 

If any Credit Party fails to perform any obligation hereunder or under any other
Financing Document, Agent itself may, but shall not be obligated to, cause such
obligation to be performed at the Borrowers’ expense and the Borrowers agree to
reimburse Agent therefor on demand. All amounts owing hereunder or under any
other Financing Document may be satisfied in full, subject to the provisions of
Section 2.2(a)(ii), through the making of Agent Advances.

 

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ARTICLE XI

AGENT

 

Section 11.1 Appointment and Authorization.

 

Each Lender hereby irrevocably appoints and authorizes Agent to enter into each
of the Security Documents and the Second Lien Intercreditor Agreement on its
behalf and to take such actions as Agent on its behalf and to exercise such
powers under the Financing Documents as are delegated to Agent by the terms
thereof, together with all such powers as are reasonably incidental thereto.
Except as otherwise expressly provided in Section 12.5 or by the terms of the
Financing Documents, Agent is authorized and empowered to amend, modify, or
waive any provisions of this Agreement or the other Financing Documents on
behalf of Lenders. The provisions of this Article XI are solely for the benefit
of Agent and Lenders (except for the consent rights granted for the benefit of
the Borrowers under Section 11.12 to the extent provided for therein) and
neither the Borrowers nor any other Credit Party shall have any rights as a
third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, Agent shall act solely as agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for the Borrowers
or any other Credit Party. Agent may perform any of its duties hereunder, or
under the Financing Documents, by or through its agents or employees. Without
limiting the generality of the foregoing, each Lender (x) acknowledges that it
has received a copy of the Second Lien Intercreditor Agreement, (y) consents to
Agent’s execution of the Second Lien Intercreditor Agreement on behalf of such
Lender and (z) agrees to be bound by the terms and provisions of the Second Lien
Intercreditor Agreement, including, without limitation, its agreement to sell
its Loans upon exercise of the purchase options contained therein.

 

Section 11.2 Agent and Affiliates.

 

Agent shall have the same rights and powers under the Financing Documents as any
other Lender and may exercise or refrain from exercising the same as though it
were not Agent, and Agent and its Affiliates may lend money to, invest in and
generally engage in any kind of business with each Credit Party or Affiliate of
any Credit Party as if it were not Agent hereunder.

 

Section 11.3 Action by Agent.

 

The duties of Agent shall be mechanical and administrative in nature. Agent
shall not have by reason of this Agreement a fiduciary relationship in respect
of any Lender. Nothing in this Agreement or any of the Financing Documents,
express or implied, is intended to or shall be construed to impose upon Agent
any obligations in respect of this Agreement or any of the Financing Documents
except as expressly set forth herein or therein.

 

Section 11.4 Consultation with Experts.

 

Agent may consult with legal counsel, independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.

 

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Section 11.5 Liability of Agent.

 

Neither Agent nor any of its directors, officers, agents or employees shall be
liable to any Lender for any action taken or not taken by it in connection with
the Financing Documents, except that Agent shall be liable to the extent of its
own gross negligence or willful misconduct as determined by a court of competent
jurisdiction. Neither Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify (i) any statement, warranty or representation made in connection with
any Financing Document or any borrowing hereunder; (ii) the performance or
observance of any of the covenants or agreements specified in any Financing
Document; (iii) the satisfaction of any condition specified in any Financing
Document, except receipt of items required to be delivered to Agent; (iv) the
validity, effectiveness, sufficiency or genuineness of any Financing Document,
any Lien purported to be created or perfected thereby or any other instrument or
writing furnished in connection therewith; (v) the existence or non-existence of
any Default or Event of Default; or (vi) the financial condition of any Credit
Party. Agent shall not incur any liability by acting in reliance upon any
notice, consent, certificate, statement, or other writing (which may be a bank
wire, telex, facsimile or electronic transmission or similar writing) believed
by it to be genuine or to be signed by the proper party or parties. Agent shall
not be liable for any apportionment or distribution of payments made by it in
good faith and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Lender to whom
payment was due but not made, shall be to recover from other Lenders any payment
in excess of the amount to which they are determined to be entitled (and such
other Lenders hereby agree to return to such Lender any such erroneous payments
received by them).

 

Section 11.6 Indemnification.

 

Each Lender shall, in accordance with its Pro Rata Share, indemnify Agent (to
the extent not reimbursed by the Credit Parties) against any cost, expense
(including counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from Agent’s gross negligence or willful
misconduct as determined by a court of competent jurisdiction) that Agent may
suffer or incur in connection with the Financing Documents or any action taken
or omitted by Agent hereunder or thereunder. If any indemnity furnished to Agent
for any purpose shall, in the opinion of Agent, be insufficient or become
impaired, Agent may call for additional indemnity and cease, or not commence, to
do the acts indemnified against even if so directed by Required Lenders until
such additional indemnity is furnished. The obligations of Lenders under this
Section 11.6 shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

Section 11.7 Right to Request and Act on Instructions.

 

Agent may at any time request instructions from Lenders with respect to any
actions or approvals which by the terms of this Agreement or of any of the
Financing Documents Agent is permitted or desires to take or to grant, and if
such instructions are promptly requested, Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Financing Documents until it shall
have received such

 

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instructions from Required Lenders or all or such other portion of the Lenders
as shall be prescribed by this Agreement. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against Agent as a result of
Agent acting or refraining from acting under this Agreement or any of the other
Financing Documents in accordance with the instructions of Required Lenders and,
notwithstanding the instructions of Required Lenders, Agent shall have no
obligation to take any action if it believes, in good faith, that such action
exposes Agent to any liability for which it has not received satisfactory
indemnification in accordance with the provisions of Section 11.6.

 

Section 11.8 Credit Decision.

 

Each Lender acknowledges that it has, independently and without reliance upon
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under the Financing
Documents.

 

Section 11.9 Collateral Matters.

 

Lenders irrevocably authorize Agent, at its option and in its discretion, to
release any Lien granted to or held by Agent under any Security Document
(i) upon termination of the Revolving Loan Commitment and payment in full of all
Obligations and the expiration, termination or cash collateralization (to the
satisfaction of Agent) of all Letters of Credit; or (ii) constituting property
sold or to be sold or disposed of as part of or in connection with any
disposition permitted under any Financing Document (it being understood and
agreed that Agent may conclusively rely without further inquiry on a certificate
of a Responsible Officer as to the sale or other disposition of property being
made in full compliance with the provisions of the Financing Documents). Upon
request by Agent at any time, Lenders will confirm in writing Agent’s authority
to release particular types or items of Collateral pursuant to this
Section 11.9.

 

Section 11.10 Agency for Perfection.

 

Agent and each Lender hereby appoint each other Lender as agent for the purpose
of perfecting Agent’s security interest in assets which, in accordance with the
Uniform Commercial Code in any applicable jurisdiction, can be perfected by
possession or control. Should any Lender (other than Agent) obtain possession or
control of any such assets, such Lender shall notify Agent thereof, and,
promptly upon Agent’s request therefore, shall deliver such assets to Agent or
in accordance with Agent’s instructions or transfer control to Agent in
accordance with Agent’s instructions. Each Lender agrees that it will not have
any right individually to enforce or seek to enforce any Security Document or to
realize upon any Collateral for the Loans unless instructed to do so by Agent,
it being understood and agreed that such rights and remedies may be exercised
only by Agent.

 

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Section 11.11 Notice of Default.

 

Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default except with respect to defaults in the payment of
principal, interest and fees required to be paid to Agent for the account of
Lenders, unless Agent shall have received written notice from a Lender or a
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default.” Agent will notify
each Lender of its receipt of any such notice. Agent shall take such action with
respect to such Default or Event of Default as may be requested by Required
Lenders in accordance with the terms hereof. Unless and until Agent has received
any such request, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interests of Lenders.

 

Section 11.12 Successor Agent.

 

Agent may resign at any time by giving written notice thereof to the Lenders and
the Funds Administrator (or immediately without notice to any Person upon
exercise of the purchase options contained in the Second Lien Intercreditor
Agreement). Upon any such resignation, Required Lenders shall have the right to
appoint a successor Agent; provided that, so long as no Default or Event of
Default exists, the Required Lenders shall obtain the consent of the Funds
Administrator (which consent shall not be unreasonably withheld or delayed)
prior to appointing any such successor agent. If no successor Agent shall have
been so appointed by Required Lenders, and shall have accepted such appointment,
within thirty (30) days after the retiring Agent gives notice of resignation,
then the retiring Agent may, on behalf of Lenders, appoint a successor Agent,
which shall be an institution organized or licensed under the laws of the United
States of America or of any State thereof; provided that, so long as no Default
or Event of Default exists, the Required Lenders shall obtain the consent of the
Funds Administrator (which consent shall not be unreasonably withheld or
delayed) prior to appointing any such successor agent. Upon the acceptance of
its appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent’s resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.

 

Section 11.13 Disbursements of Revolving Loans; Payment.

 

(a) Revolving Loan Advances, Payments and Settlements; Interest and Fee
Payments.

 

(i) Agent shall have the right, on behalf of Lenders, to disburse funds to the
Borrowers (or to the Funds Administrator for the account of the Borrowers) for
all Revolving Loans requested by the Funds Administrator pursuant to the terms
of this Agreement. Absent the prior receipt by Agent of a written notice from
any Lender pursuant to which such Lender notifies Agent that such Lender shall
cease making Revolving Loans (whether due to the existence of a Default or Event
of Default or otherwise), Agent shall be conclusively entitled to assume, for
purposes of the preceding sentence, that each Lender will fund its Pro Rata
Share of all Revolving Loans requested by the Funds Administrator. Each Lender
shall reimburse Agent

 

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on demand, in accordance with the provisions of the immediately following
paragraph, for all funds disbursed on its behalf by Agent pursuant to the first
sentence of this clause (i), or if Agent so requests, each Lender will remit to
Agent its Pro Rata Share of any Revolving Loan before Agent disburses the same
to the Borrowers or the Funds Administrator. If Agent elects to require that
each Lender make funds available to Agent, prior to a disbursement by Agent to
the Funds Administrator or any Borrower, as the case may be, Agent shall advise
each Lender by telephone, facsimile or e-mail of the amount of such Lender’s
Pro Rata Share of the Revolving Loan requested by the Funds Administrator no
later than noon (Chicago time) on the date of funding of such Revolving Loan,
and each such Lender shall pay Agent on such date such Lender’s Pro Rata Share
of such requested Revolving Loan, in same day funds, by wire transfer to the
Payment Account, or such other account as may be identified in writing by Agent
to Lenders from time to time. If any Lender fails to pay the amount of its
Pro Rata Share within one (1) Business Day after Agent’s demand, Agent shall
promptly the notify the Funds Administrator, and the Borrowers shall immediately
repay such amount to Agent. Any repayment required pursuant to this
Section 11.13 shall be without premium or penalty. Nothing in this Section 11.13
or elsewhere in this Agreement or the other Financing Documents shall be deemed
to require Agent to advance funds on behalf of any Lender or to relieve any
Lender from its obligation to fulfill its commitments hereunder or to prejudice
any rights that Agent or the Borrowers may have against any Lender as a result
of any default by such Lender hereunder.

 

(ii) On a Business Day of each week as selected from time to time by Agent, or
more frequently (including daily), if Agent so elects (each such day being a
“Settlement Date”), Agent will advise each Lender by telephone, facsimile or
e-mail of the amount of each such Lender’s Pro Rata Share of the Revolving Loan
balance (including any Agent Advances) as of the close of business of the
Business Day immediately preceding the Settlement Date. In the event that
payments are necessary to adjust the amount of such Lender’s actual Pro Rata
Share of the Revolving Loan balance to such Lender’s required Pro Rata Share of
the Revolving Loan balance as of any Settlement Date, the party from which such
payment is due (i) shall be deemed, irrevocably and unconditionally, to have
purchased, without recourse or warranty, an undivided interest and participation
in the Revolving Loans sufficient to equate such Lender’s actual Pro Rata Share
of the Revolving Loan balance as of such Settlement Date with such Lender’s
required Pro Rata Share of the Revolving Loans as of such date and (ii) shall
pay Agent, without setoff or discount, in same day funds, by wire transfer to
the Payment Account not later than noon (Chicago time) on the Business Day
following the Settlement Date the full purchase price for such interest and
participation, equal to one hundred percent (100%) of the principal amount of
the Revolving Loans being purchased and sold. In the event settlement shall not
have occurred by the date and time specified in the immediately preceding
sentence, interest shall accrue on the unsettled amount at the Federal Funds
Rate, for the first three (3) days following the scheduled date of settlement,
and thereafter at the Prime Rate plus the Prime Rate Margin.

 

(iii) On each Settlement Date, Agent shall advise each Lender by telephone,
facsimile or e-mail of the amount of such Lender’s Pro Rata Share of principal,
interest and fees paid for the benefit of Lenders with respect to each
applicable Loan, to the extent of such Lender’s credit exposure with respect
thereto, and shall make payment to such Lender not later than noon (Chicago
time) on the Business Day following the Settlement Date of such amounts in
accordance with wire instructions delivered by such Lender to Agent, as the same
may be

 

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modified from time to time by written notice to Agent; provided, that, in the
case such Lender is a Defaulted Lender, Agent shall be entitled to set off the
funding short-fall against that Defaulted Lender’s respective share of all
payments received from the Borrowers.

 

(iv) The provisions of this Section 11.13(a) shall be deemed to be binding upon
Agent and Lenders notwithstanding the occurrence of any Default or Event of
Default, or any insolvency or bankruptcy proceeding pertaining to any Borrower
or other Credit Party.

 

(b) Term Loan Principal Payments. Payments of principal of the Term Loan will be
settled on the date of receipt if received by Agent on the first Business Day of
a month or on the Business Day immediately following the date of receipt if
received on any day other than the first Business Day of a month.

 

(c) Return of Payments.

 

(i) If Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Agent from
any Borrower and such related payment is not received by Agent, then Agent will
be entitled to recover such amount from such Lender on demand without setoff,
counterclaim or deduction of any kind, together with interest accruing on a
daily basis at the Federal Funds Rate.

 

(ii) If Agent determines at any time that any amount received by Agent under or
in connection with this Agreement must be returned to any Borrower or other
Credit Party or paid to any other Person pursuant to any insolvency law or
otherwise, then, notwithstanding any other term or condition of this Agreement
or any other Financing Document, Agent will not be required to distribute any
portion thereof to any Lender. In addition, each Lender will repay to Agent on
demand any portion of such amount that Agent has distributed to such Lender,
together with interest at such rate, if any, as Agent is required to pay to such
Credit Party or such other Person, without setoff, counterclaim or deduction of
any kind.

 

(d) Defaulted Lenders. The failure of any Defaulted Lender to make any Revolving
Loan or any payment required by it hereunder shall not relieve any other Lender
of its obligations to make such Revolving Loan or payment, but neither any
Lender nor Agent shall be responsible for the failure of any Defaulted Lender to
make a Revolving Loan or make any other payment required hereunder.
Notwithstanding anything set forth herein to the contrary, a Defaulted Lender
shall not have any voting or consent rights under or with respect to any
Financing Document or constitute a “Lender” (or be included in the calculation
of “Required Lenders” hereunder) for any voting or consent rights under or with
respect to any Financing Document. At the Borrowers’ request, Agent or a Person
reasonably acceptable to Agent shall have the right with Agent’s consent and in
Agent’s sole discretion (but shall have no obligation) to purchase from any
Defaulted Lender, and each Defaulted Lender agrees that it shall, at Agent’s
request, sell and assign to Agent or such Person, all of the lending commitments
and commitment interests of that Defaulted Lender for an amount equal to the
principal balance of all Loans held by such Defaulted Lender and all accrued
interest and fees with respect thereto through the date of sale, such purchase
and sale to be consummated pursuant to an executed Assignment Agreement.

 

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Section 11.14 Additional Titled Agents.

 

Except for rights and powers, if any, expressly reserved under this Agreement to
any bookrunner, arranger, syndication agent, documentation agent or to any other
titled agent named on the cover page of this Agreement (including, without
limitation, the Co-Documentation Agents and the Syndication Agent), other than
Agent (collectively, the “Additional Titled Agents”), and except for
obligations, liabilities, duties and responsibilities, if any, expressly assumed
under this Agreement by any Additional Titled Agent, no Additional Titled Agent,
in such capacity, has any rights, powers, liabilities, duties or
responsibilities hereunder or under any of the other Financing Documents.
Without limiting the foregoing, no Additional Titled Agent shall have or be
deemed to have a fiduciary relationship with any Lender. At any time that any
Lender serving as an Additional Titled Agent shall have transferred to any other
Person (other than in connection with any assignment which, pursuant to
Section 12.6, does not require the consent of the Agent or any Borrower prior to
the occurrence and continuance of an Event of Default) all of its interests in
the Loans and in the Revolving Loan Commitment, such Lender shall be deemed to
have concurrently resigned as such Additional Titled Agent. No successor or
replacement Additional Titled Agent shall be designated or elected to serve upon
the resignation or deemed resignation by any Person of its role as an Additional
Titled Agent.

 

ARTICLE XII

MISCELLANEOUS

 

Section 12.1 Survival.

 

All agreements, representations and warranties made herein and in every other
Financing Document shall survive the execution and delivery of this Agreement
and the other Financing Documents and the other Operative Documents and the
execution and delivery of the Notes (if any). The indemnities and agreements set
forth in Article VI and Article X shall survive the payment of the Obligations
and any termination of this Agreement.

 

Section 12.2 No Waivers.

 

No failure or delay by Agent or any Lender in exercising any right, power or
privilege under any Financing Document shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein and therein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.

 

Section 12.3 Notices.

 

All notices, requests and other communications to any party hereunder shall be
in writing (including prepaid overnight courier, facsimile transmission, e-mail
transmission or similar writing) and shall be given to such party at its
address, facsimile number or e-mail address set forth on the signature pages
hereof (or, in the case of any such Lender who becomes a Lender after the date
hereof, in an Assignment Agreement or in a notice delivered to the Funds
Administrator, and Agent by the assignee Lender forthwith upon such assignment)
or at such other address, facsimile number or e-mail address as such party may
hereafter specify for the

 

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purpose by notice to Agent and the Funds Administrator; provided, that notices,
requests or other communications shall be permitted by e-mail only where
expressly provided in the Financing Documents. Each such notice, request or
other communication shall be effective (i) if given by facsimile or e-mail, when
such notice is transmitted to the facsimile number or e-mail address specified
by this Section or (ii) if given by mail, prepaid overnight courier or any other
means, when received at the applicable address specified by this Section.

 

Section 12.4 Severability.

 

In case any provision of or obligation under this Agreement or the Notes (if
any) or any other Financing Document shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

 

Section 12.5 Amendments and Waivers.

 

Any provision of this Agreement or the Notes (if any) may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by the
Funds Administrator, each Borrower, each other Credit Party that is a party
hereto and the Required Lenders (and, if (x) any amendment would increase either
such Lender’s Revolving Loan Commitment Amount or increase such Lender’s funding
obligations in respect of any Term Loan, by such Lender and (y) the rights or
duties of Agent or LC Issuer are affected thereby, by Agent or the LC Issuer, as
the case may be); provided that no such amendment or waiver shall:

 

(a) unless signed by all the Lenders: (i) reduce the principal of, rate of
interest on or any fees with respect to any Loan or Reimbursement Obligation;
(ii) postpone the date fixed for any payment (other than a payment pursuant to
Section 2.1(c) or Section 2.2(c)(iii)) of principal of any Loan, or of any
Reimbursement Obligation or of interest on any Loan or any Reimbursement
Obligation or any fees hereunder or for any termination of any commitment;
(iii) change the definition of the term Required Lenders or the percentage of
Lenders which shall be required for Lenders to take any action hereunder;
(iv) amend or waive this Section 12.5 or the definitions of the terms used in
this Section 12.5 insofar as the definitions affect the substance of this
Section 12.5; (v) consent to the assignment, delegation or other transfer by any
Credit Party of any of its rights and obligations under any Financing Document
(other than any Swap Contract entered into between any Credit Party and any
Eligible Swap Counterparty); and

 

(b) unless signed by all the Lenders (other than Lenders who are also Second
Lien Lenders or Affiliates or Related Funds of Second Lien Lenders):
(i) increase the Revolving Commitment Amount; (ii) increase any of the advance
rates set forth in the Borrowing Base Certificate or (iii) increase any of the
dollar limitations set forth in Section 5.7.

 

Section 12.6 Assignments; Participations.

 

(a) Assignments.

 

(i) Any Lender may at any time assign to one or more Eligible Assignees all or
any portion of such Lender’s Loans and interest in the Revolving Loan
Commitment, together

 

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with all related obligations of such Lender hereunder. Except as Agent may
otherwise agree, the amount of any such assignment (determined as of the date of
the applicable Assignment Agreement or, if a “Trade Date” is specified in such
Assignment Agreement, as of such Trade Date) shall be in a minimum aggregate
amount equal to $1,000,000 or, if less, the assignor’s entire interests in the
Revolving Loan Commitment and outstanding Loans. The Funds Administrator, the
Borrowers and Agent shall be entitled to continue to deal solely and directly
with such Lender in connection with the interests so assigned to an Eligible
Assignee until Agent shall have received and accepted an effective Assignment
Agreement executed, delivered and fully completed by the applicable parties
thereto and a processing fee of $3,500.

 

(ii) From and after the date on which the conditions described in clause
(i) above have been met, (i) such Eligible Assignee shall be deemed
automatically to have become a party hereto and, to the extent of the interests
assigned to such Eligible Assignee pursuant to such Assignment Agreement, shall
have the rights and obligations of a Lender hereunder and (ii) the assigning
Lender, to the extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment Agreement, shall be released from such rights
(other than its indemnification rights) and obligations (other than those
obligations set forth in Section 11.6 or Section 12.8, respectively), and, in
the case of an assignment of all interests, shall cease to be a “Lender”
hereunder. Each Assignee (x) acknowledges that it has received a copy of the
Second Lien Intercreditor Agreement, (y) consents to Agent’s execution and
delivery of the Second Lien Intercreditor Agreement on behalf of such Assignee
and (z) agrees to be bound by the terms and provisions of the Second Lien
Intercreditor Agreement, including, without limitation, its agreement to sell
its Loans upon exercise of the purchase options contained therein. Upon the
request of the Eligible Assignee (and, as applicable, the assigning Lender)
pursuant to an effective Assignment Agreement, the Borrowers shall execute and
deliver to Agent for delivery to the Eligible Assignee (and, as applicable, the
assigning Lender) Notes in the aggregate principal amount of the Eligible
Assignee’s percentage interest in the Revolving Loan Commitment plus the
principal amount of the Eligible Assignee’s Term Loan (and, as applicable, Notes
in the principal amount of that portion of the Revolving Loan Commitment
retained by the assigning Lender plus the principal amount of the Term Loan
retained by the assigning Lender). Upon receipt by the assigning Lender of such
Note, the assigning Lender shall return to the Funds Administrator any prior
Note held by it.

 

(iii) Agent, acting solely for this purpose as an agent of the Borrowers, shall
maintain at its offices located in Chicago, Illinois a copy of each Assignment
Agreement delivered to it and a register for the recordation of the names and
addresses of each Lender, and the commitments of, and principal amount of the
Loans owing to, such Lender pursuant to the terms hereof. The entries in such
register shall be conclusive, and the Borrowers, Agent and Lenders may treat
each Person whose name is recorded therein pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. Such register shall be available for inspection by the Borrowers
and any Lender, at any reasonable time upon reasonable prior notice to Agent.

 

(iv) Notwithstanding the foregoing provisions of this Section 12.6(a) or any
other provision of this Agreement, any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

 

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(b) Participations.

 

Any Lender may at any time, without the consent of, or notice to, any Borrower
or any other Credit Party, or to Agent or any other Lender, sell to one or more
Persons participating interests in its Loans, commitments or other interests
hereunder (any such Person, a “Participant”). In the event of a sale by a Lender
of a participating interest to a Participant, (a) such Lender’s obligations
hereunder shall remain unchanged for all purposes, (b) the Borrowers and Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations hereunder and (c) all amounts payable by
the Borrowers shall be determined as if such Lender had not sold such
participation and shall be paid directly to such Lender. Each Participant
(x) acknowledges that it has received a copy of the Second Lien Intercreditor
Agreement, (y) consents to Agent’s execution and delivery of the Second Lien
Intercreditor Agreement on behalf of such Participant and (z) agrees that its
participating interest is subject to the terms and provisions of the Second Lien
Intercreditor Agreement. Except as otherwise consented to by Agent, no
Participant shall have any direct or indirect voting rights hereunder except
with respect to any event described in Section 12.5 expressly requiring the
unanimous vote of all Lenders or, as applicable, all affected Lenders (provided
that no Participant that is a Second Lien Lender or an Affiliate or a Related
Fund of a Second Lien Lender shall be permitted to vote with respect to any
event described in Section 12.5(b)). Each Lender agrees to incorporate the
requirements of the preceding sentence into each participation agreement which
such Lender enters into with any Participant. Each Borrower agrees that if
amounts outstanding under this Agreement are due and payable (as a result of
acceleration or otherwise), each Participant shall be deemed to have the right
of set-off in respect of its participating interest in amounts owing under this
Agreement and with respect to any Letter of Credit to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement; provided that such right of set-off shall be subject to the
obligation of each Participant to share with Lenders, and Lenders agree to share
with each Participant, as provided in Section 9.5.

 

Section 12.7 Headings.

 

Headings and captions used in the Financing Documents (including the Exhibits,
Schedules and Annexes hereto and thereto) are included for convenience of
reference only and shall not be given any substantive effect.

 

Section 12.8 Confidentiality.

 

In handling any confidential information of any Credit Party, Agent and each
Lender shall exercise the same degree of care that it exercises with respect to
its own proprietary information of the same types to maintain the
confidentiality of any non-public information thereby received or received
pursuant to this Agreement, except that disclosure of such information may be
made (i) subject to a confidentiality obligation similar to the one set forth in
this Section 12.8, to their respective agents, employees, Subsidiaries,
Affiliates, attorneys, auditors, professional consultants, rating agencies,
insurance industry associations and portfolio

 

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management services, (ii) to prospective transferees or purchasers of any
interest in the Loans, provided that they have agreed to be bound by the
provisions of this Section 12.8, (iii) as required by Law, subpoena, judicial
order or similar order and in connection with any litigation and (iv) as may be
required in connection with the examination, audit or similar investigation of
such Person. Confidential information shall include only such information
identified as such at the time provided to Agent and shall not include
information that either: (i) is in the public domain, or becomes part of the
public domain after disclosure to such Person through no fault of such Person,
or (ii) is disclosed to such Person by a Person other than a Credit Party,
provided Agent does not have actual knowledge that such Person is prohibited
from disclosing such information. The obligations of Agent and Lenders under
this Section 12.8 shall supersede and replace the obligations of Agent and
Lenders under any confidentiality agreement in respect of this financing
executed and delivered by Agent or any Lender prior to the date hereof.

 

Section 12.9 GOVERNING LAW; SUBMISSION TO JURISDICTION.

 

THIS AGREEMENT, EACH NOTE AND EACH OTHER FINANCING DOCUMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. EACH
CREDIT PARTY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS AND IRREVOCABLY AGREES
THAT, SUBJECT TO AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER FINANCING DOCUMENTS SHALL BE LITIGATED
IN SUCH COURTS. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS TO THE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH CREDIT
PARTY BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE
SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

 

Section 12.10 WAIVER OF JURY TRIAL.

 

EACH CREDIT PARTY, AGENT AND LENDER EACH HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.

 

Section 12.11 Publication; Advertisement.

 

(a) Publication. Except as required by Law, subpoena or judicial order, no
Credit Party will directly or indirectly publish, disclose or otherwise use in
any public disclosure,

 

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advertising material, promotional material, press release or interview, any
reference to the name, logo or any trademark of Merrill Lynch or any of its
Affiliates or any reference to this Agreement or the financing evidenced hereby,
in any case without Merrill Lynch’s prior written consent.

 

(b) Advertisement. Each Credit Party hereby authorizes Merrill Lynch to publish
the name of such Credit Party and the amount of the financing evidenced hereby
in any “tombstone” or comparable advertisement which Merrill Lynch elects to
publish. In addition, each Credit Party agrees that Merrill Lynch may provide
lending industry trade organizations with information necessary and customary
for inclusion in league table measurements after the Closing Date. With respect
to any of the foregoing, Merrill Lynch shall provide the Funds Administator with
an opportunity to review and confer with Merrill Lynch regarding the contents of
any such tombstone, advertisement or information, as applicable, prior to its
publication or disclosure.

 

Section 12.12 Counterparts; Integration.

 

This Agreement and the other Financing Documents may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement and
the other Financing Documents constitute the entire agreement and understanding
among the parties hereto and supersede any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.

 

ARTICLE XIII

LIABILITY OF THE BORROWERS

 

Section 13.1 Joint and Several Liability.

 

Each Borrower hereby agrees that such Borrower is jointly and severally liable
for the full and prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance of, all Obligations owed or hereafter owing to the
Agent and the Lenders. Each Borrower agrees that its obligations under this
Article XIII shall not be discharged until indefeasible payment and performance,
in full in cash, of the Obligations has occurred, and that its obligations under
this Agreement shall be absolute and unconditional, irrespective of, and
unaffected by,

 

(a) the genuineness, validity, regularity, enforceability or any future
amendment of, or change in, this Agreement, any other Financing Document or any
other agreement, document or instrument to which any Borrower or any other
Credit Party is or may become a party;

 

(b) the existence, value or condition of, or failure by the Agent or any Lender
to perfect its Lien against, any security for the Obligations, or any action, or
the absence of any action, by the Agent or any of the Lenders in respect thereof
(including the release of any such Lien); or

 

(c) the insolvency of any Credit Party.

 

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Section 13.2 Waivers by the Borrowers.

 

Each Borrower expressly waives all rights it may have now or in the future under
any statute, or at common law, or at law or in equity, or otherwise, to compel
the Agent or the Lenders to marshal assets or to proceed in respect of the
Obligations hereunder against any other Credit Party, any other Person or
against any security for the payment, performance and observance of the
Obligations before proceeding against, or as a condition to proceeding against,
such Borrower. It is agreed among each Borrower, Agent and the Lenders that the
foregoing waivers are of the essence of the transaction contemplated by this
Agreement and the other Financing Documents and that, but for the provisions of
this Article XIII and such waivers, the Agent and the Lenders would decline to
enter into this Agreement.

 

Section 13.3 Benefit.

 

Each Borrower agrees that the provisions of this Article XIII are for the
benefit of the Agent and the Lenders and their respective successors,
transferees, endorsees and assigns, and nothing herein contained shall impair,
as between any other Borrower and the Agent or the Lenders, the obligations of
such other Borrower under the Financing Documents.

 

Section 13.4 Waiver of Subrogation, Etc.

 

Notwithstanding anything to the contrary in this Agreement or in any other
Financing Document, and except as set forth in Section 13.7, each Borrower
hereby expressly and irrevocably waives any and all rights at law or in equity
to subrogation, reimbursement, exoneration, contribution, indemnification or set
off and any and all defenses available to a co-obligor. Each Borrower
acknowledges and agrees that this waiver is intended to benefit the Agent and
the Lenders and shall not limit or otherwise affect such Borrower’s liability
hereunder or the enforceability of this Article XIII, and that the Agent, the
Lenders and their respective successors and assigns are intended third party
beneficiaries of the waivers and agreements set forth in this Section 13.4.

 

Section 13.5 Election of Remedies.

 

If the Agent or any Lender may, under applicable law, proceed to realize its
benefits under any of the Financing Documents giving the Agent or such Lender a
Lien upon any Collateral, whether owned by any Borrower, any other Credit Party
or by any other Person, either by judicial foreclosure or by non-judicial sale
or enforcement, the Agent or such Lender may, at its sole option, determine
which of its remedies or rights it may pursue without affecting any of its
rights and remedies under this Article XIII. If, in the exercise of any of its
rights and remedies, the Agent or such Lender shall forfeit any of its rights or
remedies, including its right to enter a deficiency judgment against any
Borrower, any other Credit Party or any other Person, whether because of any
applicable laws pertaining to “election of remedies” or the like, each Borrower
and each other Credit Party hereby consents to such action by the Agent or such
Lender, as the case may be, and waives any claim such Borrower or such other
Credit Party may have based upon such action, even if such action by the Agent
or such Lender shall result in a full or partial loss of any rights of
subrogation or any other similar rights that such Borrower might otherwise have
had but for such action by the Agent or such Lender. Any election of

 

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remedies that results in the denial or impairment of the right of the Agent or
any Lender to seek a deficiency judgment against any Borrower or other Credit
Party shall not impair any other Borrower’s obligation to pay the full amount of
the Obligations. In the event the Agent or any Lender shall bid at any
foreclosure or trustee’s sale or at any private sale permitted by law or the
Financing Documents, the Agent or such Lender may bid all or less than the
amount of the Obligations and the amount of such bid need not be paid by the
Agent or such Lender but shall be credited against the Obligations. The amount
of the successful bid at any such sale, whether the Agent, any Lender or any
other Person is the successful bidder, shall be conclusively deemed to be the
fair market value of the Collateral and the difference between such bid amount
and the remaining balance of the Obligations shall be conclusively deemed to be
the amount of the Obligations under this Article XIII, notwithstanding that any
present or future law or court decision or ruling may have the effect of
reducing the amount of any deficiency claim to which the Agent or any Lender
might otherwise be entitled but for such bidding at any such sale.

 

Section 13.6 Limitation.

 

Notwithstanding any provision in this Article XIII to the contrary, each
Borrower’s liability hereunder and under the other Financing Documents or in
respect of the Obligations shall be limited to an amount not to exceed as of any
date of determination the amount that could be claimed by the Agent and the
Lenders from such Borrower without rendering such claim voidable or avoidable
under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable
state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or
similar statute or common law after taking into account, among other things,
such Borrower’s right of contribution and indemnification from each other
Borrower under Section 13.7.

 

Section 13.7 Contribution with Respect to Obligations.

 

(a) To the extent that any Borrower shall make a payment in respect of all or
any of the Obligations (a “Payment”) that, taking into account all other
Payments then previously or concurrently made by any other Borrower, exceeds the
amount that such Borrower would otherwise have paid if each Borrower had paid
the aggregate Obligations satisfied by such Payment in the same proportion that
such Borrower’s “Allocable Amount” (as defined below) (as determined immediately
prior to such Payment) bore to the aggregate Allocable Amounts of each of the
Borrowers as determined immediately prior to the making of such Payment, then,
following indefeasible payment in full in cash of the Obligations and
termination of the Commitments, such Borrower shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, each other
Borrower for the amount of such excess, pro rata based upon their respective
Allocable Amounts in effect immediately prior to such Payment.

 

(b) As of any date of determination, the “Allocable Amount” of any Borrower
shall be equal to the maximum amount of the claim that could then be recovered
from such Borrower without rendering such claim voidable or avoidable under
Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state
Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar
statute or common law.

 

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(c) This Section 13.7 is intended only to define the relative rights of the
Borrowers and nothing set forth in this Section 13.7 is intended to or shall
impair the obligations of the Borrowers, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Agreement, including Section 13.1. Nothing contained in this
Section 13.7 shall limit the liability of any Borrower to pay the Loans made to
or for the account of any Borrower and accrued interest, fees and expenses with
respect thereto.

 

(d) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Borrowers to which such
contribution and indemnification is owing.

 

(e) The rights of the contributing and indemnifying the Borrowers against other
Credit Parties under this Section 13.7 shall be exercisable upon the full and
indefeasible payment of the Obligations and the termination of the Commitments.

 

Section 13.8 Liability Cumulative.

 

The liability of the Borrowers under this Article XIII is in addition to and
shall be cumulative with all liabilities of each Borrower to the Agent and the
Lenders under this Agreement and the other Financing Documents to which such
Borrower is a party or in respect of any Obligations or obligation of the other
Borrowers, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.

 

[remainder of page intentionally left blank;

signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

Borrowers and Funds Administrator:

COMSYS SERVICES LLC, a Delaware limited liability company, as the Funds
Administrator and as a Borrower

By:  

 

--------------------------------------------------------------------------------

Name:   David L. Kerr Title:   Senior Vice President – Corporate Development

COMSYS INFORMATION TECHNOLOGY SERVICES, INC., a Delaware corporation, as a
Borrower

By:  

 

--------------------------------------------------------------------------------

Name:   David L. Kerr Title:   Senior Vice President – Corporate Development

PURE SOLUTIONS, INC., a California corporation

By:  

 

--------------------------------------------------------------------------------

Name:   David L. Kerr Title:   Senior Vice President – Corporate Development

Address:

    4400 Post Oak Parkway, Suite 1800 Houston, Texas 77027 Attn.:   David Kerr
and Molly Reed Fax:   (713) 386-1427; (713) 386-1504

with a copy to:

Akin Gump Strauss Hauer & Feld LLP 300 West 6th Street, Suite 2100 Austin, Texas
78701 Attention: Alan L. Laves, P.C. Facsimile: (512) 703-1111

--------------------------------------------------------------------------------

Other Credit Parties:

COMSYS IT PARTNERS, INC., a Delaware corporation

By:  

 

--------------------------------------------------------------------------------

Name:   David L. Kerr Title:   Senior Vice President – Corporate Development PFI
LLC, a Delaware limited liability company By:  

 

--------------------------------------------------------------------------------

Name:   David L. Kerr Title:   Senior Vice President – Corporate Development
Address:     4400 Post Oak Parkway, Suite 1800 Houston, Texas 77027 Attn.:  
David Kerr and Molly Reed Fax:   (713) 386-1427; (713) 386-1504 with a copy to:
Akin Gump Strauss Hauer & Feld LLP 300 West 6th Street, Suite 2100 Austin, Texas
78701 Attention: Alan L. Laves, P.C. Facsimile: (512) 703-1111

--------------------------------------------------------------------------------

AGENT AND LENDER:

MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services
Inc., as Agent and a Lender

By:  

 

--------------------------------------------------------------------------------

Name:   Scott E. Gast Title:   Vice President Address:     222 North LaSalle
Street, 16th Floor Chicago, Illinois 60601 Attn: Legal Department Facsimile:
312-499-3126 Payment Account Designation: Bank: LaSalle Bank National
Association ABA #071000505 Account #5800393182 Account Name MLBFS Corporate
Finance Other Ref: COMSYS

--------------------------------------------------------------------------------

SYNDICATION AGENT AND LENDER:

GMAC COMMERCIAL FINANCE LLC, as Syndication Agent and as a Lender

By:  

 

--------------------------------------------------------------------------------

Name:   Thomas Brent Title:   Director Address:     500 West Madison Street,
Suite 3130 Chicago, Illinois 60661 Attn:   Thomas Brent Facsimile:
(312) 775-6006

--------------------------------------------------------------------------------

CO-DOCUMENTATION AGENT AND LENDER:

ING CAPITAL LLC, as Documentation Agent and as a Lender

By:  

 

--------------------------------------------------------------------------------

Name:   Daryn K. Venéy Title:   Vice President Address: 200 Galleria Parkway
Suite 950 Atlanta, Georgia 30339 Attn:   Portfolio Manager - COMSYS Facsimile:
(770) 951-1005

--------------------------------------------------------------------------------

CO-DOCUMENTATION AGENT AND LENDER:

ALLIED IRISH BANKS PLC, as Co-Documentation Agent and a Lender

By:  

 

--------------------------------------------------------------------------------

Name:   John Farrace Title:   Director By:  

 

--------------------------------------------------------------------------------

Name:   Derrick Lynch Title:   Assistant Vice President Address:     601 South
Figueroa Street Suite 4650 Los Angeles, California 90017 Attn:   Martin S. Chin
Facsimile: (213) 593-4766

--------------------------------------------------------------------------------

LENDER:

NORTH FORK BUSINESS CAPITAL CORPORATION, as a Lender

By:  

 

--------------------------------------------------------------------------------

Name:   Ari Kaplan Title:   Vice President Address:     1415 West 22nd Street
Suite 750E Oakbrook, Illinois Attn:   Portfolio Manager - COMSYS Facsimile:
(630) 684-0228

--------------------------------------------------------------------------------

Annex A

 

Commitment Annex

 

Lender

--------------------------------------------------------------------------------

   Revolving Loan
Commitment
Amount

--------------------------------------------------------------------------------

   Revolving Loan
Commitment
Percentage

--------------------------------------------------------------------------------

    Term Loan
Commitment
Amount

--------------------------------------------------------------------------------

   Term Loan
Commitment
Percentage

--------------------------------------------------------------------------------

 

Merrill Lynch Capital

   $ 41,700,000.00    34.75 %   $ 5,200,000.00    52.00 %

GMAC Commercial Finance LLC

   $ 23,100,000.00    19.25 %   $ 1,900,000.00    19.00 %

ING Capital LLC

   $ 23,100,000.00    19.25 %   $ 1,900,000.00    19.00 %

North Fork Business Capital Corporation

   $ 9,000,000.00    7.50 %   $ 1,000,000.00    10.00 %

Allied Irish Banks plc

   $ 23,100,000.00    19.25 %     N/A    N/A  

TOTALS

   $ 120,000,000.00    100 %   $ 10,000,000.00    100 %

--------------------------------------------------------------------------------

Annex B

 

Closing Checklist

--------------------------------------------------------------------------------

Annex C

 

Existing Letters of Credit

 

L/C #

--------------------------------------------------------------------------------

   Amount

--------------------------------------------------------------------------------

  

Beneficiary

--------------------------------------------------------------------------------

  

Applicant

--------------------------------------------------------------------------------

200894

   $ 200,000.00    Hartford Fire Insurance Company    COMSYS Services

200895

   $ 225,000.00    Zurich American Insurance Company    COMSYS Services

200896

   $ 275,000.00    Zurich American Insurance Company    COMSYS Services

200897

   $ 232,500.00    One Penn Plaza, LLC    COMSYS Services

200938

   $ 988,928.00    National Union Fire Insurance Co.    COMSYS Services, fka
Venturi Technology Partners

200982

   $ 400,000.00    Zurich American Insurance    COMSYS Services

S861123

   $ 67,392.00    ACStar Insurance Company    COMSYS Services

S861751

   $ 4,095.00    ACStar Insurance Company    COMSYS Services

S858293

   $ 339,862.50    State of California    COMSYS Services, fka Venturi
Technology Partners

S857859

   $ 123,730.00    ACTStar Insurance Company    COMSYS Services, fka Venturi
Technology Partners

S858062

   $ 220,000.00    Self Insurance Plan    COMSYS Services, fka Venturi
Technology Partners

--------------------------------------------------------------------------------

Annex D

 

Existing Debt

 

a. Debt evidenced by the Prior Credit Agreement and all documents, agreement and
instruments executed in connection therewith.

 

b. Debt evidenced by that certain Term Loan Credit Agreement dated as of
September 30, 2004 by and among COMSYS Services and COMSYS IT, as the borrowers,
Holdings, Pure Solutions and PFI, as credit parties, Merrill Lynch Capital, a
division of Merrill Lynch Business Financial Services Inc., as administrative
agent for the financial institutions from time to time party thereto and such
other “Lenders” (as defined therein) and NexBank SSB, a Texas chartered savings
bank, as collateral agent, and all documents, agreement and instruments executed
in connection therewith.