exv10w19



 







Exhibit 10.19




FIFTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT




     This Amendment, dated as of March 31, 2006, is made by and among GLOBAL EMPLOYMENT SOLUTIONS,
INC., a Colorado corporation (“Global”), EXCELL PERSONNEL SERVICES CORPORATION, an Illinois
corporation (“Excell”), FRIENDLY ADVANCED SOFTWARE TECHNOLOGY, INC., a New York corporation
(“Friendly”), TEMPORARY PLACEMENT SERVICE, INC., f/k/a Michael & Associates, Inc. and successor by
merger to Temporary Placement Service, Inc., a Georgia corporation (“TPS”), SOUTHEASTERN STAFFING,
INC., a Florida corporation (“Southeastern”), SOUTHEASTERN PERSONNEL MANAGEMENT, INC., a Florida
corporation (“SPM”), MAIN LINE PERSONNEL SERVICES, INC., a Pennsylvania corporation (“Main Line”),
BAY HR, Inc., a Florida corporation (“BHR”) and SOUTHEASTERN GEORGIA HR, INC., a Georgia
corporation (“SGHR”) (Global, Excell, Friendly, TPS, Southeastern, SPM, Main Line, BHR and SGHR are
each referred to herein as a “Borrower” and collectively as the “Borrowers”), and WELLS FARGO BANK,
N.A. (the “Lender”), acting through its WELLS FARGO BUSINESS CREDIT operating division.



Recitals




     The Borrowers and the Lender are parties to a Credit and Security Agreement dated as of March
7, 2002, as amended by a First Amendment to Credit and Security Agreement dated as of June 26,
2003, a Second Amendment to Credit and Security Agreement and Waiver of Defaults dated as of August
30, 2004, a Third Amendment to Credit and Security Agreement and Waiver of Defaults dated as of
January 31, 2005 and a Fourth Amendment to Credit and Security Agreement and Waiver of Defaults
dated as of May 13, 2005 (as so amended, the “Credit Agreement”). Capitalized terms used in these
recitals have the meanings given to them in the Credit Agreement unless otherwise specified.



     The Borrowers have requested that certain amendments be made to the Credit Agreement, which
the Lender is willing to make pursuant to the terms and conditions set forth herein.



     NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
herein contained, it is agreed as follows:



     1. The preamble of the Credit Agreement is hereby amended to read in its entirety as follows:



     “Global Employment Solutions, Inc., a Colorado corporation (‘Global’), Excell Personnel
Services Corporation, an Illinois corporation (‘Excell’), Friendly Advanced Software Technology,
Inc., a New York corporation (‘Friendly’), Temporary Placement Service, Inc., f/k/a Michael &
Associates, Inc. and successor by merger to Temporary Placement Service, Inc., a Georgia
corporation (‘TPS’), Southeastern Staffing, Inc., a Florida corporation (‘Southeastern’),
Southeastern Personnel Management, Inc., a Florida corporation (‘SPM’), Main Line Personnel
Services, Inc., a Pennsylvania corporation (‘Main Line’), Bay HR, Inc., a Florida corporation
(‘BHR’) and Southeastern Georgia HR, Inc., a Georgia corporation



 









 







(‘SGHR’)(Global, Excell, Friendly,
TPS, Southeastern, SPM, Main Line, BHR and SGHR, each a
“Borrower” and collectively the ‘Borrowers’), and Wells Fargo Bank, N.A. (the ‘Lender’),
acting through its Wells Fargo Business Credit operating division, hereby agree as follows:”



     2. Defined Terms. Capitalized terms used in this Amendment which are defined in the
Credit Agreement shall have the same meanings as defined therein, unless otherwise defined herein.
In addition, Section 1.1 of the Credit Agreement is amended by adding or amending, as the case may
be, the following definitions:




     “Accounts” shall have the meaning given it under the UCC.




     “Availability” means (i) with respect to all Borrowers on a consolidated basis, the
difference between (x) the aggregate Borrowing Base for all Borrowers and (y) the sum of (A)
the outstanding principal balance of the Revolving Note, (B) the L/C Amount, (C) the
Borrowing Base Reserve and (D) the Obligations that all Borrowers on a consolidated basis
owe to the Lender that have not yet been advanced on the Revolving Note, and the dollar
amount that the Lender in its reasonable discretion then determines to be a reasonable
determination of the Borrowers’ aggregate credit exposure with respect to Wells Fargo Bank
Affiliate Obligations and obligations owed to Wells Fargo Merchant Services, LLC, and (ii)
with respect to any Borrower individually, the difference between (x) the Borrowing Base for
that Borrower and (y) the sum of (A) the outstanding principal balance of Revolving Advances
made to that Borrower, (B) the L/C Amount for that Borrower, (C) the Borrowing Base Reserve
related to such Borrower and (D) the Obligations that such Borrower on a consolidated basis
owes to the Lender that have not yet been advanced on the Revolving Note, and the dollar
amount that the Lender in its reasonable discretion then determines to be a reasonable
determination of such Borrower’s aggregate credit exposure with respect to Wells Fargo Bank
Affiliate Obligations and obligations owed to Wells Fargo Merchant Services, LLC.




     “Advance” means a Revolving Advance or the Term Advance.




     “Book Net Worth” means, with respect to any Borrower, the aggregate of the common and
preferred shareholders’ equity in such Borrower determined in accordance with GAAP.




     “Borrowing Base” means, at any time and without duplication:




	 	(a)	 	for Southeastern, the lesser of:






	 	(i)	 	the Maximum Line; and
	 
	 	(ii)	 	subject to change from time to time in the
Lender’s sole discretion, the sum of:
	 
	 	 	 	(x) the lesser of (A) the Eligible Account Advance Rate Percentage of
the Eligible Accounts of Southeastern and (B) $2,000,000, plus




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	 	 	 	(y) the lesser of (A) the Eligible Unbilled Account Advance Rate
Percentage of the Eligible Unbilled Accounts of Southeastern and (B)
$3,500,000;






	 	(b)	 	for all Borrowers (other than Southeastern) the lesser of:






	 	(i)	 	the Maximum Line; and
	 
	 	(ii)	 	subject to change from time to time in the
Lender’s sole discretion, the sum of:
	 
	 	 	 	(x) the Eligible Account Advance Rate Percentage of the aggregate
Eligible Accounts of all Borrowers (other than Southeastern), plus
	 
	 	 	 	(y) the lesser of (A) the Eligible Unbilled Account Advance Rate
Percentage of the aggregate Eligible Unbilled Accounts of all
Borrowers (other than Southeastern) and (B) $3,500,000.






     “Borrowing Base Reserve” means, as of any date of determination, such amounts
(expressed as either a specified amount or as a percentage of a specified category or item)
as the Lender may from time to time establish and adjust in reducing Availability (a) to
reflect events, conditions, contingencies or risks which, as determined by the Lender, do or
may affect (i) the Collateral or its value, (ii) the assets, business or prospects of any
Borrower, or (iii) the security interests and other rights of the Lender in the Collateral
(including the enforceability, perfection and priority thereof), or (b) to reflect the
Lender’s judgment that any collateral report or financial information furnished by or on
behalf of a Borrower to the Lender is or may have been incomplete, inaccurate or misleading
in any material respect, or (c) in respect of any state of facts that the Lender determines
constitutes a Default or an Event of Default.




     “Business Day” means a day on which the Federal Reserve Bank of New York is open for
business.




     “Change of Control” means the occurrence of any of the following events:




     (a) Other than with respect to the purchasers of the preferred stock of the
Public Parent and the holders of the Secured Subordinated Debt as of March 31, 2006,
any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) is or becomes the “beneficial owner”
(as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as
amended, except that a Person will be deemed to have “beneficial ownership” of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or indirectly,
of more than 10 percent of the voting power of all classes of voting stock of the
Public Parent or any Borrower.



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     (b) During any consecutive two-year period, individuals who at the beginning of
such period constituted the board of Directors of the Public Parent or any Borrower
(together with any new Directors whose election to such board of Directors, or whose
nomination for election by the owners of the Public Parent or such Borrower, was
approved by a vote of 66 2/3% of the Directors then still in office who were either
Directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a majority
of the board of Directors of the Public Parent or such Borrower then in office.




     (c) Howard Brill or Daniel Hollenbach shall cease to actively manage the
applicable Borrower’s day-to-day business activities unless, in each case, a
replacement of any such person, acceptable to Lender in its reasonable discretion,
is put in place within 120 days of such cessation.




     (d) any Fundamental Transaction occurs.”




     “Collateral” means each Borrower’s Accounts, chattel paper and electronic chattel
paper, deposit accounts, documents, Equipment, General Intangibles, goods, instruments,
Inventory, Intellectual Property Rights, Investment Property, letter-of-credit rights,
letters of credit, all sums on deposit in any Collateral Account or in the Southeastern
Blocked Account, and any items in any Lockbox; together with (i) all substitutions and
replacements for and products of any of the foregoing; (ii) in the case of all goods, all
accessions; (iii) all accessories, attachments, parts, equipment and repairs now or
hereafter attached or affixed to or used in connection with any goods; (iv) all warehouse
receipts, bills of lading and other documents of title now or hereafter covering such goods;
(v) all collateral subject to the Lien of any Security Document; (vi) any money, or other
assets of each Borrower that now or hereafter come into the possession, custody, or control
of the Lender; (vii) all sums on deposit in the Special Account; (viii) proceeds of any and
all of the foregoing; (ix) books and records of each Borrower, including all mail or
electronic mail addressed to each Borrower; and (x) all of the foregoing, whether now owned
or existing or hereafter acquired or arising or in which any Borrower now has or hereafter
acquires any rights.




     “Cut-off Time” means 11:00 a.m., Denver, Colorado time.




     “Director” means a director if the Public Parent or such Borrower is a corporation, a
governor or manager if the Public Parent or such Borrower is a limited liability company, or
a general partner if the Public Parent or such Borrower is a partnership.




     “Eligible Account Advance Rate Percentage” means, 90% from the date of the Term Note
until the earlier to occur of (i) repayment in full of the Term Note, (ii) April 1, 2008 or
(iii) the Termination Date, and at all other times 85%.



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     “Eligible Unbilled Account Advance Rate Percentage” means, 75% from the date of the
Term Note until the earlier to occur of (i) repayment in full of the Term Note, (ii) April
1, 2008 or (iii) the Termination Date, and at all other times 70%.




     “Excess Cash Flow” means, for a given period, the sum of (a) Net Income, plus (b)
depreciation, amortization, deferred income taxes and other non-cash items, minus (c)
Capital Expenditures and the amount of the Borrowers’ long-term debt and capitalized leases
which become due during such period including under the Term Note, each such amount
described in clauses (a) through (c) as determined for such period in accordance with GAAP.




     “Floating Rate” means, (i) with respect to Revolving Advances evidenced by the
Revolving Note, an annual interest rate equal to the Prime Rate, and (ii) with respect to
Term Advances evidenced by the Term Note, an annual interest rate equal to the sum of the
Prime Rate plus 2.75%, which interest rate shall, in each case, change when and as the Prime
Rate changes.




     “Fundamental Transaction” means (i) a transaction or series of related transactions
pursuant to which the Public Parent: (A) sells, conveys or disposes of all or substantially
all of its assets determined on either a quantitative or qualitative basis (the presentation
of any such transaction for stockholder approval being conclusive evidence that such
transaction involves the sale of all or substantially all of the assets of the Public
Parent); (B) merges or consolidates with or into, or engages in any other business
combination with, any other Person, in any case that results in the holders of the voting
securities of the Public Parent immediately prior to such transaction holding or having the
right to direct the voting of 50% or less of the total outstanding voting securities of the
Public Parent or such other surviving or acquiring person or entity immediately following
such transaction; or (C) sells or issues, or any of its stockholders sells or transfers, any
securities to any Person, or the acquisition or right to acquire securities by any Person,
in either case acting individually or in concert with others, such that, following the
consummation of such transaction(s), such Person(s) (together with their respective
affiliates, as such term is used under Section 13(d) of the Exchange Act) would own or have
the right to acquire greater than 50% of the outstanding shares of common stock of the
Public Parent (on a fully-diluted basis, assuming the full conversion, exercise or exchange
of all rights then outstanding); (ii) any reclassification or change of the outstanding shares of common stock of the Public Parent (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a subdivision or
combination); or (iii) any event, transaction or series of related transactions that results
in individuals serving on the board of Directors of the Public Parent on March 31, 2006
ceasing for any reason to constitute at least a majority of the board of Directors of the
Public Parent; provided, however, that any individual becoming a director of
the Public Parent subsequent to March 31, 2006 whose appointment, election, or nomination
for election by the Public Parent’s stockholders was approved by a vote of at least
two-thirds of the individuals serving on the board of Directors of the Public Parent on
March 31, 2006 (other than an appointment, election, or



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nomination of an individual whose
initial assumption of office is in connection with an actual or threatened election contest
relating to the election of the
Directors of the Public Parent) shall be considered as though such Person were a member of
the board of Directors of the Public Parent on March 31, 2006.




     “General Intangibles” shall have the meaning given it under the UCC.




     “Guaranty” means each unconditional continuing guaranty or unconditional continuing
guaranty by corporation executed by a Guarantor in favor of the Lender (collectively, the
“Guaranties”).




     “Infringement” or “Infringing” when used with respect to Intellectual Property Rights
means any infringement or other violation of Intellectual Property Rights.




     “Inventory” shall have the meaning given it under the UCC.




     “Loan Documents” means this Agreement, the Notes, any Guaranties, the Subordination
Agreements, any L/C Applications and the Security Documents, together with every other
agreement, note, document, contract or instrument to which the Borrower now or in the future
may be a party and which is required by the Lender.




     “Maturity Date” means July 31, 2009.




     “Maximum Line” means $15,000,000 unless said amount is replaced pursuant to Section
2.11, in which event it means such lower amount.



          “Net Income” means fiscal year-to-date after-tax net income from continuing operations,
including extraordinary losses but excluding extraordinary gains, all as determined in accordance
with GAAP.





     “Note” means the Revolving Note or the Term Note, and “Notes” means the Revolving Note
and the Term Note.




     “Obligations” means each Note, the Obligation of Reimbursement and each and every other
debt, liability and obligation of every type and description which any Borrower may now or
at any time hereafter owe to the Lender, whether such debt, liability or obligation now
exists or is hereafter created or incurred, whether it arises in a transaction involving the
Lender alone or in a transaction involving other creditors of such Borrower, and whether it
is direct or indirect, due or to become due, absolute or contingent, primary or secondary,
liquidated or unliquidated, or sole, joint, several or joint and several, and including all
indebtedness of such Borrower arising under any Loan Document or guaranty between such
Borrower and the Lender, whether now in effect or subsequently entered into, and all Wells
Fargo Bank Affiliate Obligations and indebtedness owed by such Borrower to Wells Fargo
Merchant Services, LLC.



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     “Owner” means, with respect to the Public Parent or any Borrower, each Person having
legal or beneficial title to an ownership interest in the Public Parent or such Borrower or
a right to acquire such an interest.




     “Public Parent” means Global Employment Holdings, Inc.




     “Prime Rate” means at any time the rate of interest most recently announced by the
Lender at its principal office as its Prime Rate, with the understanding that the Prime Rate
is one of the Lender’s base rates, and serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto, and is evidenced by the
recording thereof in such internal publication or publications as the Lender may designate.
Each change in the rate of interest shall become effective on the date each Prime Rate
change is announced by the Lender.




     “Registration Rights Agreements” means the Registration Rights Agreement, dated as of
March 31, 2006, by and among the Public Parent and the purchasers of the Secured
Subordinated Debt, the Registration Rights Agreement, dated as of March 31, 2006, by and
among the Public Parent and the purchasers of the Public Parent’s Series A Preferred Stock
and the Registration Rights Agreement, dated as of March 31, 2006, by and among the Public
Parent and the purchasers of the Public Parent’s common stock.




     “Revolving Note” means the Borrowers’ revolving promissory note, payable to the order
of the Lender in substantially the form of Exhibit A hereto, as same may be renewed and
amended from time to time, and all replacements thereto.




     “Secured Subordinated Debt” means any and all amounts owing by any Borrower or the
Public Parent under the terms of any of the following: the Note Securities Purchase
Agreement by and among Global, Amatis Limited and the other buyers party thereto, if any
(collectively, the “Buyers”), dated as of March 31, 2006; the Public Parent’s Senior Secured
Convertible Notes, each dated as of March 31, 2006, payable to the order of Amatis Limited
and the Buyers, in the original aggregate principal amount of $30,000,000; the Guaranty
executed by each Borrower in favor of Amatis Limited in its capacity as collateral agent for
the Buyers and any other agreements, instruments and documents related thereto.




     “Subordinated Debt” means the Secured Subordinated Debt.




     “Subsidiary” means any Person of which more than 50% of the outstanding ownership
interests having general voting power under ordinary circumstances to elect a majority of
the board of directors or the equivalent of such Person, regardless of whether or not at the
time ownership interests of any other class or classes shall have or might have voting power
by reason of the happening of any contingency, is at the time directly or indirectly owned
by a Borrower, by a Borrower and one or more other Subsidiaries, or by one or more other
Subsidiaries.




     “Term Advance” is defined in Section 2.17.



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     “Term Note” means the Borrowers’ term promissory note, payable to the order of the
Lender, as same may be renewed and amended from time to time, and all replacements thereto.




     “Wells Fargo Bank Affiliate Obligations” means all obligations, liabilities, contingent
reimbursement obligations, fees, and expenses owing by any Borrower or its Subsidiaries to
any Person that is owned in material part by the Lender, and that relates to any service or
facility extended to any Borrower or its Subsidiaries, including: (a) credit cards, (b)
credit card processing services, (c) debit cards, and (d) purchase cards, as well as any
other services or facilities from time to time specified by the Lender, whether direct or
indirect, absolute or contingent, due or to become due, and whether existing now or in the
future.



     3. Section 2.7(a) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:




     “(a) Notes. Except as set forth in Subsections (b), (c) and (f), the outstanding
principal balance of each Note shall bear interest at the applicable Floating Rate.”



     4. Subsections (b) and (c) of Section 2.8 of the Credit Agreement are hereby amended and
restated to read in their entirety as follows:




     “(b) Audit Fees. The Borrowers shall pay the Lender, on demand, audit fees in
connection with any audits or inspections conducted by the Lender of any Collateral or any
Borrower’s operations or business, including any surveys conducted by Lender with respect to
any Borrower prior to the execution of this Agreement, at the rates established from time to
time by the Lender as its audit fees (which fees are currently $100 per hour per auditor),
together with all actual out-of-pocket costs and expenses incurred in conducting any such
audit or inspection; provided that, (i) until repayment in full of the Term Note, the Lender
may not conduct more than three (3) such audits in any 12 month period unless a Default has
occurred and is continuing and (ii) after repayment in full of the Term Note, the Lender may
not conduct more than two (2) such audits in any 12 month period unless a Default has
occurred and is continuing or the average Availability over a rolling three month period is
less than $3,000,000.




     (c) Termination and Line Reduction Fees. If the Credit Facility is terminated (i) by
the Lender during a Default Period that begins before the Maturity Date, (ii) by any
Borrower (A) as of a date other than the Maturity Date or (B) as of the Maturity Date but
without the Lender having received written notice of such termination at least 90 days
before such Maturity Date, or if any Borrower reduces the Maximum Line, the Borrowers shall
pay to the Lender a fee in an amount equal to: (A) if the termination or reduction occurs
on or before April 1, 2007, 2% of the Maximum Line (or the reduction of the Maximum Line, as
the case may be), plus 2% of the amount of the Term Note prepaid;
(B) if the termination or
reduction occurs after April 1, 2007 but on or before April 1, 2008, 1.5% of the Maximum
Line (or the reduction of the Maximum Line, as the case may be) plus 1.5% of the amount of
the Term Note prepaid; and (C) if



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the termination or reduction occurs after April 1, 2008,
1% of the Maximum Line (or the reduction of the Maximum Line, as the case may be).”



     5. Subsections (f) and (g) of Section 2.8 of the Credit Agreement are hereby amended and
restated to read in their entirety as follows:




     “(f) Monthly Accommodation Fee. The Borrowers agree to pay to the Lender a fully
earned and non-refundable monthly accommodation fee of $300 per month from the date of this
Agreement to and including the Termination Date, due and payable monthly in arrears on the
first day of each month and on the Termination Date.”




     (g) Other Fees and Charges. The Lender may from time to time impose additional fees
and charges as consideration for Advances made in excess of Availability or for other events
that constitute an Event of Default or a Default hereunder, including fees and charges for
the administration of Collateral by the Lender, and fees and charges for the late delivery
of reports, which may be assessed in the Lender’s sole discretion on either an hourly,
periodic, or flat fee basis, and in lieu of or in addition to imposing interest at the
Default Rate.”



     6. Section 2.13 of the Credit Agreement is hereby amended and restated to read in its entirety
as follows:




     “Section 2.13 Revolving Advances to Pay Obligations. Notwithstanding anything
in Section 2.1, the Lender may, in its discretion at any time or from time to time, without
a Borrower’s request and even if the conditions set forth in Section 4.2 would not be
satisfied, make a Revolving Advance in an amount equal to the portion of the Obligations
from time to time due and payable, and may deliver the proceeds of any such Revolving
Advance to any affiliate of the Lender in satisfaction of any Wells Fargo Bank Affiliate
Obligations and may deliver the proceeds of any such Revolving Advance to Wells Fargo
Merchant Services, LLC in satisfaction of any unpaid obligations due to that entity.”



     7. Article II of the Credit Agreement is hereby amended by adding new Sections 2.17 and 2.18
to read in their entirety as follows:



     “Section 2.17 Term Advance.




     (a) The Lender agrees, subject to the terms and conditions of this Agreement, to make a
single advance to the Borrowers on March 31, 2006 (the ‘Term Advance’) in an amount equal to
$5,000,0000. The Borrowers’ joint and several obligation to pay the Term Advance shall be
evidenced by the Term Note and shall be secured by the Collateral as provided in Article
III.




     (b) The Borrowers shall make their request for the Term Advance to the Lender no later
than the Cut-off Time on the Business Day on which the Borrowers wish to receive the Term
Advance. Such request may be made in writing or by telephone,



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specifying the date of the
requested Term Advance. Such request shall be by an individual authorized pursuant to
Section 2.2. Upon fulfillment of the applicable conditions set forth in Article IV, the
Lender shall deposit the proceeds of the requested Term Advance by crediting the same to
Global’s demand deposit account specified in Section 2.2 unless the
Lender and the Global shall agree in writing to another manner of disbursement. Upon
the Lender’s request, Global shall promptly confirm any such telephonic request for the Term
Advance by executing and delivering an appropriate confirmation certificate to the Lender.
The Borrowers shall be obligated to repay the Term Advance notwithstanding the Lender’s
failure to receive such confirmation and notwithstanding the fact that the Person requesting
the same was not in fact authorized to do so. Any request for the Term Advance, whether
written or telephonic, shall be deemed to be a representation by the Borrowers, upon which
the Lender may rely, that the Borrowers are in compliance with the conditions set forth in
Section 4.2 as of the time of the request.




Section 2.18 Payment of Term Note. All prepayments of principal with respect to the
Term Note shall be applied to the most remote principal installment or installments then
unpaid. The outstanding principal balance of the Term Note shall be due and payable as
follows:




     (a) In equal monthly installments of $138,889, beginning on May 1, 2006, and on the
first day of each month thereafter until March 1, 2008;




     (b) On February 15, 2007 and February 15, 2008, 25% of the Borrowers’ Excess Cash Flow
from the preceding fiscal year shall be due and payable and shall be applied to the most
remote principal installment or installments then unpaid; and




     (c) On the earlier of April 1, 2008 or the Termination Date of the Credit Facility,
the entire unpaid principal balance of the Term Note, and all unpaid interest accrued
thereon, shall also be fully due and payable.”



     8. Section 3.1 of the Credit Agreement is hereby amended and restated to read in its entirety
as follows:




“Section 3.1. Grant of Security Interest. Each Borrower hereby pledges, assigns and
grants to the Lender for the benefit of itself and as agent for Wells Fargo Merchant
Services, LLC and any affiliate of the Lender that may provide credit or services to any
Borrower that constitute Wells Fargo Bank Affiliate Obligations a lien and security interest
(collectively referred to as the “Security Interest”) in the Collateral, as security for the
payment and performance of the Obligations. Upon request by the Lender, the Borrowers will
grant the Lender, for the benefit of itself and as agent for Wells Fargo Merchant Services,
LLC and any affiliate of the Lender that may provide credit or services to any Borrower that
constitute Wells Fargo Bank Affiliate Obligations, a security interest in all commercial
tort claims it may have against any Person.”



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     9. Section 6.2 of the Credit Agreement is hereby amended and restated in full to read in its
entirety as follows:



     “Section 6.2. Financial Covenants.




     (a) Minimum Net Income. The Borrowers on a consolidated basis including all
Subsidiaries and the Public Parent will achieve during each period described below, Net
Income greater than the amount set forth opposite such period (numbers appearing
between “< >” are negative):



	 	 	 
	Period	 	Minimum Net Income
	The three months ending April 2, 2006
	 	$<1,105,000>
	The six months ending July 2, 2006
	 	$0
	The nine months ending October 1, 2006
	 	$1,500,000
	The twelve months ending December 31, 2006
	 	$2,714,000







     (b) Minimum Book Net Worth Plus Subordinated Debt. Each Borrower will
maintain, determined as at the end of each calendar month, its Book Net Worth at an amount
not less than $200,000. The Borrowers will maintain, on a consolidated basis including all
Subsidiaries and the Public Parent, determined as at the end of each calendar month set
forth below, their Book Net Worth plus all Debt subject to a Subordination Agreement, at an
amount not less than the amount set forth below opposite each such month:



	 	 	 
	 	 	Minimum
	 	 	Book Net Worth Plus
	Period	 	Subordinated Debt
	The month ending April 2, 2006
	 	$20,066,000
	The month ending April 30, 2006
	 	$20,066,000
	The month ending May 28, 2006
	 	$20,066,000
	The month ending July 2, 2006
	 	$21,171,000
	The month ending July 30, 2006
	 	$21,171,000
	The month ending August 27, 2006
	 	$21,171,000
	The month ending October 1, 2006
	 	$22,671,000
	The month ending October 29, 2006
	 	$22,671,000
	The month ending November 26, 2006
	 	$22,671,000
	The month ending December 31, 2006
and each fiscal month thereafter
	 	$23,885,000






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     (c) Capital Expenditures. The Borrowers will not incur or contract to incur
Capital Expenditures of more than $800,000 in the aggregate during fiscal 2006 and zero
thereafter until new Financial Covenants are set pursuant to Section 6.2(e).




     (d) Minimum Availability. The average Availability, with respect to all
Borrowers on a consolidated basis, measured monthly on the last day of each month, shall
exceed $2,000,000.




     (e) New Covenants. On or before May 31, 2006, the Borrowers and the Lender
shall negotiate in good faith new covenant levels for Section 6.2(b) that (i) the Borrowers
shall be required to maintain for periods after March 31, 2006, based upon any non-cash
balance sheet adjustments resulting from the issuance of securities by the Public Parent,
including the Secured Subordinated Debt, and (ii) shall be no less favorable to the Lender
than the levels from the prior periods. Prior to December 31, 2006, the Borrowers and the
Lender shall negotiate in good faith new covenant levels for Section 6.2 that (i) the
Borrowers shall be required to maintain for periods after December 31, 2006, based upon the
Borrowers’ projections for such period, and (ii) shall be no less favorable to the Lender
than the levels from the prior periods.”



     10. Section 6.3 of the Credit Agreement is hereby amended and restated to read in its entirety
as follows:



     “Section 6.3 Permitted Liens; Financing Statements.




     (a) No Borrower will create, incur or suffer to exist any Lien upon or of any of its
assets, now owned or hereafter acquired, to secure any indebtedness; excluding, however,
from the operation of the foregoing, the following (collectively, “Permitted Liens”):




     (i) in the case of any Borrower’s property which is not Collateral, covenants,
restrictions, rights, easements and minor irregularities in title which do not
materially interfere with any Borrower’s business or operations as presently
conducted;




     (ii) Liens in existence on the date hereof and listed in Schedule 6.3 hereto,
securing indebtedness for borrowed money permitted under Section 6.4;




     (iii) the Security Interest and Liens created by the Security Documents;




     (iv) Liens securing repayment of the Secured Subordinated Debt;




     (v) purchase money Liens relating to the acquisition of machinery and equipment
of any Borrowers not exceeding the lesser of cost or fair market value thereof not
exceeding $50,000 for any one purchase and so long as no Default



-12-









 






Period is then in
existence and none would exist immediately after such acquisition; and




     (vi) Liens in respect of judgments or awards for which appeals or proceedings
for review are being prosecuted and in respect of which a stay of execution upon any
such appeal or proceeding for review shall have been secured, provided that (i) such
Person shall have established adequate reserves for such
judgments or awards in accordance with GAAP, (ii) such judgments or awards
shall be fully insured (subject to deductibles) and the insurer shall not have
denied coverage, or (iii) such judgments or awards shall have been bonded to the
satisfaction of Lender.




     (b) No Borrower will amend any financing statements in favor of the Lender except as
permitted by law.”



     11. Section 6.5 of the Credit Agreement is hereby amended and restated to read in its entirety
as follows:




“Section 6.5. Guaranties. No Borrower will assume, guarantee, endorse or otherwise
become directly or contingently liable in connection with any obligations of any other
Person, except:




     (a) the endorsement of negotiable instruments by the Borrowers for deposit or
collection or similar transactions in the ordinary course of business;




     (b) guaranties, endorsements and other direct or contingent liabilities in connection
with the obligations of other Persons, in existence on the date hereof and listed in
Schedule 6.4 hereto; and




     (c) guaranties of the Secured Subordinated Debt.”



     12. Section 6.7 of the Credit Agreement is hereby amended and restated to read in its entirety
as follows:




“Section 6.7. Dividends and Distribution. No Borrower will declare or pay any
dividends (other than dividends payable solely in stock of such Borrower) on any class of
its stock or the Public Parent’s stock or make any payment on account of the purchase,
redemption or other retirement of any shares of such stock or any indebtedness or liability
of the Public Parent or any Borrower evidenced by or related to notes, bonds, debentures or
other securities or similar obligations, including the agreements, instruments and documents
evidencing the Secured Subordinated Debt, or make any distribution in respect thereof,
either directly or indirectly; provided, however, that so long as no Event
of Default has occurred and is continuing or will occur as a result of or immediately
following any such payment, (a) the Borrowers may declare and pay dividends to their
corporate parents that are Borrowers, (b) Global may declare and pay dividends to the Public
Parent up to five days prior to the due date of each scheduled



-13-









 






payment (but not prepayment)
of interest under the Secured Subordinated Debt in an amount equal to such scheduled payment
and (c) Global may pay dividends to the Public Parent in an amount up to $1,300,000 in the
aggregate for the payment of the fees and penalties (but in no event for the payment of any
amounts related to redemption) due and payable to the holders of the Secured Subordinated
Debt, the holders of the Public Parent’s Series A Preferred Stock and the holders of the
Public Parent’s common stock pursuant to the Registration Rights Agreements, the Public
Parent’s Senior Secured Convertible Notes, each dated as
of March 31, 2006, payable to the order of the holders of the Secured Subordinated Debt, in
the original aggregate principal amount of $30,000,000 and the Note Securities Purchase
Agreement by and among Global and the holders of the Secured Subordinated Debt, so long as
Global has delivered to the Lender prior written notice that such fees or penalties will be
due and payable, which notice shall be delivered to the Lender at least five Business Days
prior to the date on which such payment is due.”



     13. Section 7.1 of the Credit Agreement shall be amended by deleting the word “or” at the end
of subsection (o) of Section 7.1, by replacing the period at the end of subsection (p) of Section
7.1 with a semi-colon and by adding the following new subsections (q) and (r) to read in their
entirety as follows:




     “(q) The indictment of any Director, Officer or Guarantor for a felony offence under
state or federal law; or




     (r) A default or an event of default shall occur under any agreement, instrument or
document evidencing or related to any securities issued by the Public Parent or any
Subordinated Debt.”



     14. Schedule 5.2 of the Credit Agreement is hereby amended and restated to read in its
entirety as set forth on Exhibit A to this Amendment.



     15. The Credit Agreement is hereby amended to remove Placer Staffing, Inc. as a Borrower and
signatory thereto.



     16. No Other Changes. Except as explicitly amended by this Amendment, all of the
terms and conditions of the Credit Agreement shall remain in full force and effect and shall apply
to any advance or letter of credit thereunder.



     17. Consent. The Borrowers have requested that the Lender consent to the acquisition
of not less than 90% of Global’s equity by the Public Parent, which entity shall be incorporated
and in good standing in the State of Delaware (the “Share Purchase”) and the merger of Global
Merger Corp, a wholly-owned Subsidiary of the Public Parent, with and into Global, pursuant to
which each share of the remaining equity securities of Global not acquired by the Public Parent in
the Share Purchase will be converted into the same number of shares of Common Stock as in the Share
Purchase, and after giving effect to such merger the shareholders of Global immediately prior to
the Share Purchase and such merger will own, on a fully-diluted basis following completion of the
Share Purchase and such merger, not less than 97% of the



-14-









 




Public Parent’s common equity (the “Sale
and Merger”). Consummation of the Sale and Merger would be a default under the Credit Agreement,
including without limitation Section 5.2, Section 6.8, Section 6.18, Section 6.25 and Section
7.1(c). Each Borrower represents and warrants to the Lender that, both before and after giving
effect (a) to this Amendment, and all of the agreements, instruments and documents evidencing or
related hereto, and (b) the Sale and Merger, including without limitation all of the transactions
contemplated in the agreements, instruments and documents evidencing or related to any of the
securities issued with respect to the Sale and Merger, including without limitation the Secured
Subordinated Debt (collectively, the “New Debt Documents”), none of the Borrowers nor any of their Affiliates: (i) was or will be insolvent,
as that term is used and defined in Section 101(32) of the United States Bankruptcy Code and
Section 2 of the Uniform Fraudulent Transfer Act; (ii) has unreasonably small capital or is engaged
or about to engage in a business or a transaction for which any remaining assets of such Borrower
or such Affiliate are unreasonably small; (iii) by executing, delivering or performing its
obligations under this Amendment, the New Debt Documents or any other agreements, instruments or
documents to which it is a party or by taking any action with respect thereto, intends to, nor
believes that it will, incur debts beyond its ability to pay them as they mature; (iv) by
executing, delivering or performing its obligations under this Amendment, the New Debt Documents or
any other agreements, instruments or documents to which it is a party or by taking any action with
respect thereto, intends to hinder, delay or defraud either its present or future creditors; and
(v) at this time contemplates filing a petition in bankruptcy or for an arrangement or
reorganization or similar proceeding under any law of any jurisdiction, nor, to the best knowledge
of any Borrower, is the subject of any actual, pending or threatened bankruptcy, insolvency or
similar proceedings under any law of any jurisdiction. Each Borrower further represents and
warrants to the Lender that (i) all actions required to consummate the Sale and Merger have been
taken, (ii) consummation of the Sale and Merger does not and will not violate or conflict with any
agreement presently binding upon any Borrower, (iii) Global Merger Corp has no liabilities of any
kind and is not encumbered by any Liens other than those of the Lender; (iv) upon consummation of
the Sale and Merger, Global will be the surviving entity and (iv) upon consummation of the Sale and
Merger, the Public Parent will own 100% of the outstanding preferred and common stock of Global.
Upon the terms and subject to the conditions set forth in this Amendment, the Lender consents to
the Sale and Merger. This consent shall be effective only in this specific instance and for the
specific purpose for which it is given, and this consent shall not entitle any Borrower to any
other or further consents in any similar or other circumstances.




     18. Amendment; Placer and GECC UCC. The Borrowers agree that the Borrowers’ failure,
on or before May 31, 2006, (a) to deliver to the Lender those promissory notes listed on Part II of
Schedule I to the Pledge Agreement by TPS in favor of the Lender dated as of the date hereof, (b)
to deliver to the Lender evidence satisfactory to the Lender in its sole discretion that Placer
Staffing, Inc. has been dissolved, (c) to deliver to the Lender evidence satisfactory to the Lender
in its sole discretion that UCC-1 Financing Statement No. 2006011902869, filed in the Pennsylvania
Secretary of State’s Office on January 19, 2006, naming Main Line, as debtor, and GECC, as secured
party, has been terminated or (d) to enter into an amended and restated credit and security
agreement with the Lender, together with any other agreements, instruments and documents required
thereunder, each in form and substance acceptable to the Lender in its sole



-15-









 




discretion, shall
constitute an Event of Default under the Credit Agreement. Each Borrower agrees that it will not
sell, lease, assign, or otherwise transfer any of its assets to, or make or permit to exist any
loans or advances to, or make any additional investment or acquire any additional interest
whatsoever in, Placer Staffing, Inc. Global further agrees that it will cause Placer Staffing,
Inc. not to become an obligor of the Subordinated Debt, including without limitation, guarantying
the obligations of any Borrower or Global Employment Holdings, Inc. under the Subordinated Debt or
pledging assets to secure the repayment of the Subordinated Debt.




     19. Accommodation Fees. The Borrowers shall pay the Lender as of the date hereof a
fully earned, non-refundable fee in the amount of $175,000 in consideration of the Lender’s
execution and delivery of this Amendment. The Borrowers shall also pay the Lender, on or before
April 3, 2006, a fully earned, non-refundable fee in the amount of $8,076.72 if the Term Advance
and a Revolving Advance in the amount of $5,731,700 are not made before 2:00 p.m. on the date
hereof, which fee is in consideration of the Lender’s reserving funds for such Advances.



     20. Conditions Precedent. This Amendment shall be effective when the Lender shall
have received an executed original hereof, together with each of the following, each in substance
and form acceptable to the Lender in its sole discretion:



          (a) The Fourth Amended and Restated Revolving Note, duly executed on behalf of each Borrower;




          (b) The Term Note, duly executed on behalf of each Borrower;




          (c) A Certificate of Authority for Amendment , duly executed by Officers of each of the
Borrowers;




          (d) A Pledge Agreement by each Borrower in favor of the Lender, duly executed by such
Borrower, including all stock certificates;




          (e) A Patent and Trademark Security Agreement by each Borrower, Global Merger Corp and Global
Employment Holdings, Inc., in favor of the Lender, each duly executed by such Borrower, Global
Merger Corp or Global Employment Holdings, Inc., as the case may be;




          (f) A Copyright Security Agreement by each Borrower, Global Merger Corp and Global Employment
Holdings, Inc., in favor of the Lender, each duly executed by such Borrower, Global Merger Corp or
Global Employment Holdings, Inc., as the case may be;




          (g) A Guaranty by Global Employment Solutions, Inc., duly executed by Global Employment
Solutions, Inc.;




          (h) A Guaranty by Global Employment Holdings, Inc., duly executed by Global Employment
Holdings, Inc.;




-16-









 








          (i) A Security Agreement by Global Employment Holdings, Inc., duly executed by Global
Employment Holdings, Inc.;




          (j) A Pledge Agreement, duly executed by Global Employment Holdings, Inc., including all stock
certificates;




          (k) A Certificate of Authority of Guarantor, duly executed by Officers of Global Employment
Holdings, Inc.;




          (l) A Guaranty by Global Merger Corp, duly executed by Global Employment Holdings, Inc.;




          (m) A Security Agreement by Global Merger Corp, duly executed by Global Employment Holdings,
Inc.;




          (n) A Pledge Agreement, duly executed by Global Merger Corp, including all stock certificates;




          (o) A Certificate of Authority of Guarantor, duly executed by Officers of Global Merger Corp;




          (p) The Subordination Agreement, properly executed by all parties required by Lender in its
sole discretion, each acknowledged by the Borrowers and the Public Parent;




          (q) The Borrowers’ audited consolidated financial statements for its fiscal year 2005,
together with all other items required under Section 6.1(a) of the Credit Agreement;




          (r) A current certificate issued by the Secretary of State of Colorado, certifying that, prior
to its merger into Global, Global Merger Corp is in compliance with all applicable organizational
requirements of the State of Colorado;




          (s) An opinion of counsel to each Borrower, Global Merger Corp and Global Employment Holdings,
Inc.;




          (t) An Affidavit Regarding Out-of-State Execution of Credit and Security Agreement and Notes
(for Florida Borrowers);




          (u) An Authority to Pay Letter;




          (v) Evidence that the Sale and Merger have been consummated and completion of a satisfactory
review by the Lender of each Borrower’s and the Public Parent’s capital structure, together with a
certificate from an Officer of each Borrower certifying true, correct and complete copies of all
documents relating to the recapitalization, including all Subordinated Debt and the purchase of the
Public Parent’s Series A Preferred Stock and the Public Parent’s Common Stock;




          (w) Payment of the fee described in Paragraph 19; and




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          (x) Such other matters as the Lender may require.




     21. Representations and Warranties. Each Borrower hereby represents and warrants to
the Lender as follows:



          (a) Each Borrower has all requisite power and authority to execute this Amendment, the Fourth
Amended Restated Promissory Note, the Term Note and all other agreements, instruments and documents
related to the Sale and Merger and to perform all of its
obligations hereunder and thereunder, and this Amendment, the Fourth Amended and Restated
Promissory Note, the Term Note and all other agreements, instruments and documents related to the
Sale and Merger have been duly executed and delivered by it and constitutes the legal, valid and
binding obligation of it, enforceable in accordance with its terms.




          (b) The execution, delivery and performance by each Borrower of this Amendment, the Fourth
Amended Restated Promissory Note, the Term Note and all other agreements, instruments and documents
related to the Sale and Merger to which such Borrower is a party have been duly authorized by all
necessary corporate action and do not (i) require any authorization, consent or approval by any
governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign,
(ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or
decree presently in effect, having applicability to such Borrower, or the articles of incorporation
or by-laws of such Borrower, or (iii) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease or instrument to which Borrower
is a party or by which it or its properties may be bound or affected.




          (c) This Amendment, the Fourth Amended Restated Promissory Note and the Term Note were signed,
executed, and delivered by the Borrowers in Colorado.




          (d) All of the representations and warranties contained in Article V of the Credit Agreement
are correct on and as of the date hereof as though made on and as of such date, except to the
extent that such representations and warranties relate solely to an earlier date.




          (e) The Borrowers have delivered to the purchasers of the Public Parent’s securities being
sold in conjunction with the Sale and Merger, including without limitation the purchasers of the
Secured Subordinated Debt, a copy of this Amendment and all other agreements, instruments and
documents requested by such Persons.




     22. References. All references in the Credit Agreement to “this Agreement” shall be
deemed to refer to the Credit Agreement as amended hereby; and any and all references in the
Security Documents to the Credit Agreement shall be deemed to refer to the Credit Agreement as
amended hereby. All references to the “Borrowers” or any variation thereof in any guaranty of the
Obligations executed by any of the undersigned shall be deemed to refer to each Borrower (as
defined in the Credit Agreement), other than such Guarantor.



     23. No Other Waiver. The execution of this Amendment and acceptance of the Fourth
Amended Restated Promissory Note, the Term Note and any other documents related



-18-









 







hereto shall not be
deemed to be a waiver of any Default or Event of Default under the Credit Agreement or breach,
default or event of default under any Security Document or other document held by the Lender,
whether or not known to the Lender and whether or not existing on the date of this Amendment.



     24. Release. Each Borrower, in its capacity as both borrower and guarantor, hereby
absolutely and unconditionally releases and forever discharges the Lender, and any and all
participants, parent corporations, subsidiary corporations, affiliated corporations, insurers,
indemnitors, successors and assigns thereof, together with all of the present and former
directors, officers, agents and employees of any of the foregoing, from any and all claims, demands
or causes of action of any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which any Borrower has had, now
has or has made claim to have against any such person for or by reason of any act, omission,
matter, cause or thing whatsoever arising from the beginning of time to and including the date of
this Amendment, whether such claims, demands and causes of action are matured or unmatured or known
or unknown.



     25. Costs and Expenses. Each Borrower hereby reaffirms its agreement under the Credit
Agreement to pay or reimburse the Lender on demand for all costs and expenses incurred by the
Lender in connection with the Loan Documents, including without limitation all reasonable fees and
disbursements of legal counsel. Without limiting the generality of the foregoing, each Borrower
specifically agrees to pay all fees and disbursements of counsel to the Lender for the services
performed by such counsel in connection with the preparation of this Amendment and the documents
and instruments incidental hereto. Each Borrower hereby agrees that the Lender may, at any time or
from time to time in its sole discretion and without further authorization by such Borrower, make a
loan to such Borrower under the Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses and the fee required under
Paragraph 19 hereof.



     26. Joint and Several Liability. All obligations of each Borrower under this
Amendment shall be joint and several. Each Borrower shall be bound both severally and jointly with
the other. Each Borrower is responsible for each other Borrower’s obligations under this
Amendment. Notices from the Lender to any Borrower shall constitute notice to all Borrowers.
Directions, instructions, representations, warranties or covenants made by any Borrower to the
Lender shall be binding on all Borrowers.



     27. Miscellaneous. This Amendment may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original and all of which counterparts,
taken together, shall constitute one and the same instrument.



[The remainder of this page intentionally left blank.]




-19-









 





     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of
the date first written above.



	 	 	 	 	 	 	 	 	 
	WELLS FARGO BANK, N.A., acting
through its WELLS FARGO BUSINESS
CREDIT operating division.	 	 	 	GLOBAL EMPLOYMENT SOLUTIONS, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Pamela R. Cates	 	 	 	By:	 	/s/ Howard Brill
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Pamela R. Cates
	 	 	 	Name:
	 	Howard Brill
	Its:

	 	Vice President
	 	 	 	Its:
	 	Chief Executive Officer and President
	 
	 	 	 	 	 	 	 	 
	SOUTHEASTERN STAFFING, INC.	 	 	 	EXCELL PERSONNEL SERVICES CORPORATION
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Howard Brill	 	 	 	By:	 	/s/ Howard Brill
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Howard Brill
	 	 	 	Name:
	 	Howard Brill
	Its:

	 	Executive Vice President
	 	 	 	Its:
	 	Executive Vice President
	 
	 	 	 	 	 	 	 	 
	MAIN LINE PERSONNEL SERVICES,
INC.	 	 	 	FRIENDLY ADVANCED SOFTWARE TECHNOLOGY, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Howard Brill	 	 	 	By:	 	/s/ Howard Brill
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Howard Brill
	 	 	 	Name:
	 	Howard Brill
	Its:

	 	Executive Vice President
	 	 	 	Its:
	 	Executive Vice President
	 
	 	 	 	 	 	 	 	 
	BAY HR, INC.	 	 	 	TEMPORARY PLACEMENT SERVICE, INC.,
f/k/a Michael & Associates, Inc. and successor by
merger to Temporary Placement Service, Inc.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Howard Brill	 	 	 	By:	 	/s/ Steve Pennington
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Howard Brill
	 	 	 	Name:
	 	Steve Pennington
	Its:

	 	Executive Vice President
	 	 	 	Its:
	 	President
	 
	 	 	 	 	 	 	 	 
	SOUTHEASTERN GEORGIA HR, INC.	 	 	 	SOUTHEASTERN PERSONNEL 
MANAGEMENT, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Howard Brill	 	 	 	By:	 	/s/ Howard Brill
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Howard Brill
	 	 	 	Name:
	 	Howard Brill
	Its:

	 	Executive Vice President
	 	 	 	Its:
	 	Executive Vice President






Sig-1









 





EXHIBIT A

TO

FIFTH AMENDMENT TO CREDIT AND SECURITY

AGREEMENT AND WAIVER OF DEFAULTS




SCHEDULE 5.2

TO CREDIT AND SECURITY AGREEMENT




CAPITALIZATION AND ORGANIZATIONAL CHART




	 	 	 	 	 	 	 
	 	 	 	 	No. of Shares	 	Percent interest
	 	 	 	 	(after exercise of all	 	on a fully diluted
	Holder of Global Shares	 	Type of Rights/Stock	 	rights to acquire shares	 	basis
	Prior to the merger of
Global Merger Corp
with and into Global: Global
Merger Corp
	 	Common	 	—	 	up to 97%
	After the merger of
Global Merger Corp
with and into Global: Global
Employment
Holdings, Inc.
	 	Common	 	100	 	100%






Attach organizational chart showing the ownership structure of all Subsidiaries of the Borrower.




See Attached.




A-1









 












A-2