Document:

Form 8-K 12-15-14Exhibit 101

SECOND AMENDMENT TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT 
AND OTHER LOAN DOCUMENTS

This SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT AND OTHER LOAN DOCUMENTS (this “Amendment”) is made as of the 12th day of December, 2014, by and among BG STAFFING, INC., a Delaware corporation, f/k/a LTN Staffing, LLC, a Delaware limited liability company (“BG Staffing, Inc.”), BG STAFFING, LLC, a Delaware limited liability company (“BG Staffing, LLC”), BG PERSONNEL, LP, a Texas limited partnership (“BG Personnel”), and B G STAFF SERVICES INC., a Texas corporation (“B G Staff Services”, and together with BG Staffing, Inc., BG Staffing, LLC and BG Personnel, collectively, “Borrowers” and each a “Borrower”), and FIFTH THIRD BANK, an Ohio banking corporation, successor by merger with Fifth Third Bank, a Michigan banking corporation (“Lender”).
W I T N E S S E T H:
WHEREAS, Borrowers and Lender are parties to that certain Amended and Restated Loan and Security Agreement dated as of January 29, 2014 (as amended, restated, modified or supplemented and in effect from time to time, the “Loan Agreement”); and
WHEREAS, Borrowers have informed Lender that on September 26, 2014, BG Personnel Services, LP, a Texas limited partnership (“BG Personnel Services”), merged with and into BG Personnel, with BG Personnel as the surviving entity, pursuant to that certain Certificate of Merger dated September 26, 2014 filed with the Secretary of State of Texas (the “Merger Transaction”) and have requested that Lender waive the Event of Default occurring by reason of the Merger Transaction; and
WHEREAS, Borrowers have also requested that Lender amend the Loan Agreement and the other Loan Documents in certain respects, and Lender is agreeable to such request, on and subject to the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1.Definitions.  Capitalized terms used herein which are defined in the Loan Agreement and not otherwise defined herein are used with the meanings given such terms in the Loan Agreement.
2.    Amendment to Loan Agreement.  The Loan Agreement is hereby amended as follows:
(a)    by amending and restating Section 9.6 in its entirety to read as follows:
9.6    Distributions.  No Borrower shall (a) make any distribution or dividend, whether in cash or otherwise, to any of its equityholders, except that a Borrower may make a distribution or dividend so long as (i) no Event of Default or Unmatured Event of Default exists or would result from the 

making of any such distribution or dividend, and (ii) Borrowers are in pro forma compliance with each of the financial covenants set forth in Section 10 of this Agreement both before and after giving effect to such distribution or dividend, (b) purchase or redeem any of its equity interests or any warrants, options or other rights in respect thereof, other than redemptions pursuant to Section 6.16 of the Securities Purchase Agreement but subject to the terms and conditions of the Subordination Agreement, (c) pay any Management Fees, Director Fees or similar fees without the prior written consent of Lender, except that so long as no Event of Default exists and Borrowers are in pro forma compliance with each of the financial covenants set forth in Section 10 of this Agreement both before and after giving effect to such payment, Borrowers may pay Management Fees to Taglich Brothers, Inc. and its affiliates, and BG Staffing, Inc. may pay annual Director Fees to each non-management director in the ordinary course of business, in a combined amount not to exceed $175,000 in the aggregate in any one fiscal year, (d) make any Earn Out Payments (i) unless Borrowers are in pro forma compliance with each of the financial covenants set forth in Section 10 of this Agreement both before and after giving effect to such Earn Out Payments, and (ii) so long as no Event or Default or Unmatured Event of Default exists or would result therefrom, (e) pay or prepay interest on, principal of, premium, if any, redemption, conversion, exchange, purchase, retirement, defeasance, sinking fund or any other payment in respect of any Subordinated Debt, or (f) set aside funds for any of the foregoing.  Notwithstanding anything to the contrary contained in this Section 9.6, so long as (a) no Event or Default or Unmatured Event of Default exists or would result from the making of any such distribution,  dividend  or payment, and (b) Borrowers are in pro forma compliance with each of the financial covenants set forth in Section 10 of this Agreement both before and after giving effect to such payment, (i) BG Staffing, Inc. may declare and pay dividends in respect of its Capital Securities so long as such dividends are in the form of the issuance of stock, warrants, options or other rights or interests (none of which shall have any ‘put’ rights or be subject to mandatory redemption) and do not include cash or notes or other property of BG Staffing, Inc., and (ii) a Borrower may make a distribution or dividend to another Borrower that has granted a first perfected security interest in all of its assets in favor of Lender.  Notwithstanding anything to the contrary contained herein, (i) no Borrower shall make any cash Put Payments without the prior written consent of the Lender, and (ii) no Borrower may make any cash interest payments on any Put Notes (as defined in the Securities Purchase Agreement) without the prior written consent of Lender, unless in each case BG Staffing, Inc. has received in cash the amounts necessary to make each such payment from equity capital contributions to BG Staffing, Inc. made for such purpose on terms acceptable to Lender.

	
			
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3.    Amendment to the Other Loan Documents.  The other Loan Documents are hereby amended to the extent necessary to be consistent with the foregoing amendments to the Loan Agreement.
4.    Waiver of Merger Transaction.  Section 9.4 of the Loan Agreement prohibits any Borrower from being a party to any merger or consolidation, including without limitation, the Merger Transaction.  Borrowers have therefore violated Section 9.4 of the Loan Agreement and an Event of Default has occurred and is continuing under the Loan Agreement.  Borrowers have requested that Lender waive their violation of Section 9.4 with respect to the Merger Transaction and the Event of Default arising directly therefrom.
Lender hereby waives Borrowers’ violation of Section 9.4 with respect to the Merger Transaction and the Event of Default arising directly therefrom.  The waiver set forth herein shall be effective only in the specific instance and for the specific purpose set forth herein, shall be narrowly construed and shall neither extend to any other violations under, or default of, the Loan Agreement, including, but not limited to, any violation of Section 9.4 for any future period of time or with respect to any future event, and is and shall be without prejudice to the rights of Lender under the Loan Agreement and the other Loan Documents with respect to matters not specifically addressed hereby, including, without limitation, with respect to future violations or defaults.
5.    Reaffirmation and Confirmation of Security Interests.  Each Borrower hereby confirms to Lender that such Borrower has granted to Lender a security interest in or Lien upon substantially all of the property of such Borrower, including, without limitation, the Collateral, to secure the Obligations.  Each Borrower hereby reaffirms its grant of such security interest and Lien to Lender for such purpose in all respects.
In addition to the foregoing:
(a)    BG Staffing, Inc. hereby confirms to Lender that BG Staffing, Inc. has granted to Lender a security interest in or Lien upon the Pledged Collateral (as defined in that certain Membership Interests Security Agreement dated as of May 24, 2010 by and between BG Staffing, Inc. and Lender (as amended, restated, modified or supplemented and in effect from time to time, the “Membership Interests Security Agreement”)), to secure the Liabilities (as defined in the Membership Interests Security Agreement), under and pursuant to the Membership Interests Security Agreement.  BG Staffing, Inc. hereby expressly agrees that the Lien on the Pledged Collateral shall secure all of the Liabilities (as defined in the Membership Interests Security Agreement), including, without limitation, the Loans, and hereby reaffirms its grant of such security interest and Lien to Lender for such purpose in all respects.  BG Staffing, Inc. hereby further expressly agrees that upon consummation of the Subject Transactions, the Lien on such Pledged Collateral shall continue to secure all of the Liabilities, including, without limitation, the Loans.
(b)    BG Staffing, Inc. hereby confirms to Lender that BG Staffing, Inc. has granted to Lender a security interest in or Lien upon the Pledged Collateral (as defined in that certain Partnership Interests Security Agreement dated as of May 24, 2010 by and between BG Staffing, Inc. and Lender (as amended, restated, modified or supplemented and in effect from time to time, the “Partnership Interests Security Agreement”)), to secure the Liabilities (as defined in the Partnership Interests Security Agreement), under and pursuant to the Partnership Interests Security Agreement.  BG 

	
			
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Staffing, Inc. hereby expressly agrees that the Lien on the Pledged Collateral shall secure all of the Liabilities (as defined in the Partnership Interests Security Agreement), including, without limitation, the Loans, and hereby reaffirms its grant of such security interest and Lien to Lender for such purpose in all respects.  BG Staffing, Inc. hereby further expressly agrees that upon consummation of the Subject Transactions, the Lien on such Pledged Collateral shall continue to secure all of the Liabilities, including, without limitation, the Loans.
(c)    BG Staffing, LLC hereby confirms to Lender that BG Staffing, LLC has granted to Lender a security interest in or Lien upon the Pledged Collateral (as defined in that certain Partnership Interests Security Agreement dated as of May 24, 2010 by and between BG Staffing, LLC and Lender (as amended, restated, modified or supplemented and in effect from time to time, the “BG Staffing, LLC Partnership Interests Security Agreement”)), to secure the Liabilities (as defined in the BG Staffing, LLC Partnership Interests Security Agreement), under and pursuant to the BG Staffing, LLC Partnership Interests Security Agreement.  BG Staffing, LLC hereby expressly agrees that the Lien on the Pledged Collateral shall secure all of the Liabilities (as defined in the BG Staffing, LLC Partnership Interests Security Agreement), including, without limitation, the Loans, and hereby reaffirms its grant of such security interest and Lien to Lender for such purpose in all respects.  BG Staffing hereby further expressly agrees that upon consummation of the Subject Transactions, the Lien on such Pledged Collateral shall continue to secure all of the Liabilities, including, without limitation, the Loans.
(d)    BG Staffing, Inc. hereby confirms to Lender that BG Staffing, Inc. has granted to Lender a security interest in or Lien upon the Pledged Collateral (as defined in that certain Securities Pledge Agreement dated as of May 24, 2010 by and between BG Staffing, Inc. and Lender (as amended, restated, modified or supplemented and in effect from time to time, the “Securities Pledge Agreement”)), to secure the Liabilities (as defined in the Securities Pledge Agreement), under and pursuant to the Securities Pledge Agreement.  BG Staffing, Inc. hereby expressly agrees that the Lien on the Pledged Collateral shall secure all of the Liabilities (as defined in the Securities Pledge Agreement), including, without limitation, the Loans, and hereby reaffirms its grant of such security interest and Lien to Lender for such purpose in all respects.  BG Staffing, Inc. hereby further expressly agrees that upon consummation of the Subject Transactions, the Lien on such Pledged Collateral shall continue to secure all of the Liabilities, including, without limitation, the Loans.
6.    Representations and Warranties.  Each Borrower hereby represents, warrants and covenants to Lender that:
(a)    Authorization.  Each Borrower is duly authorized to execute and deliver this Amendment and all deliveries required hereunder, and is and will continue to be duly authorized to borrow monies under the Loan Agreement, as amended hereby, and to perform its obligations under the Loan Agreement and the other Loan Documents.
(b)    No Conflicts.  The execution and delivery of this Amendment and all deliveries required hereunder, and the performance by each Borrower of its obligations under the Loan Agreement and the other Loan Documents do not and will not conflict with any provision of law or of the charter or by-laws, operating agreement or partnership agreement of any Borrower or of any agreement binding upon any Borrower.

	
			
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(c)    Validity and Binding Effect.  This Amendment, the Loan Agreement and the other Loan Documents are a legal, valid and binding obligation of each Borrower, enforceable against such Borrower in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights or by general principles of equity limiting the availability of equitable remedies.
(d)    No Events of Default.  As of the date hereof, no default or Event of Default under the Loan Agreement or any of the other Loan Documents has occurred or is continuing.
(e)    Warranties.  As of the date hereof, the representations and warranties in the Loan Agreement and the other Loan Documents are true and correct in all material respects as though made on such date, except where a different date is specifically indicated.
7.    Conditions to Effectiveness.  This Amendment shall be deemed to be effective as of the date hereof (the “Amendment Effective Date”), and the effectiveness of this Amendment shall be subject to, the satisfaction of all of the following conditions: 
(a)    This Amendment, duly authorized and fully executed by each Borrower and Lender, duly authorized and fully executed by the parties thereto, shall have been delivered to Lender.
(b)    True, correct and complete copies of the Certificate of Merger filed with the Secretary of State of Texas with respect to the Merger Transaction, shall have been delivered to Lender.
(c)    Borrowers shall have received cash capital contributions of not less than Six Million Nine Hundred Thousand and No/100 Dollars ($6,900,000.00) in the aggregate from a PIPE transaction, on and subject to term and conditions acceptable to Lender, and such proceeds shall have been used to pay down the outstanding principal balance on the Revolving Loans.
(d)    Such other documents, instruments or agreements as Lender may reasonably request in order to effectuate fully the transactions contemplated herein shall have been duly executed and delivered to Lender.
8.    Costs and Expenses.  Borrowers shall jointly and severally pay all costs and expenses in connection with the preparation of this Amendment and other related loan documents, including, without limitation, reasonable attorneys’ fees.
9.    Further Assurances.  Each Borrower shall take such actions as are necessary or as Lender may reasonably request from time to time to ensure that the Obligations under the Loan Documents are secured by substantially all of the assets of such Borrower, in each case as Lender may determine, including (a) the execution and delivery of security agreements, pledge agreements, mortgages, deeds of trust, financing statements and other documents, and the filing or recording of any of the foregoing, and (b) the delivery of certificated securities and other collateral with respect to which perfection is obtained by possession.

	
			
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10.    Miscellaneous.
(a)    Recitals; Captions.  The WHEREAS clauses at the beginning of this Amendment are part of this Amendment.  Section captions and headings used in this Amendment are for convenience only and are not part of and shall not affect the construction of this Amendment.
(b)    Governing Law.  This Amendment shall be a contract made under and governed by the laws of the State of Illinois, without regard to conflict of laws principles.  Whenever possible, each provision of this Amendment shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Amendment shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Amendment.
(c)    Counterparts.  This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall together constitute but one and the same document.
(d)    Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
(e)    References.  From and after the Amendment Effective Date, any reference to the Loan Agreement or the other Loan Documents contained in any notice, request, certificate or other instrument, document or agreement executed concurrently with or after the execution and delivery of this Amendment shall be deemed to include this Amendment unless the context shall otherwise require.
(f)    Continued Effectiveness.  Notwithstanding anything contained herein, the terms of this Amendment are not intended to and do not serve to effect a novation as to the Loan Agreement.  The parties hereto expressly do not intend to extinguish the Loan Agreement.  Instead, it is the express intention of the parties hereto to reaffirm the indebtedness created under the Loan Agreement and secured by the Collateral.  The Loan Agreement and each of the other Loan Documents, except as modified hereby, remain in full force and effect and are hereby reaffirmed in all respects.
(g)    Customer Identification - USA Patriot Act Notice; OFAC and Bank Secrecy Act.  Lender hereby notifies each Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Act”), and Lender’s policies and practices, Lender is required to obtain, verify and record certain information and documentation that identifies such Borrower, which information includes the name and address of such Borrower and such other information that will allow Lender to identify such Borrower in accordance with the Act.  In addition, each Borrower shall (a) ensure that no person who owns a controlling interest in or otherwise controls such Borrower or any subsidiary of such Borrower is or shall be listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the Office of Foreign Assets Control (“OFAC”), the Department of the Treasury or included in any Executive Orders, (b) not use or permit the use of the proceeds of the Loan to violate any of the foreign asset control regulations of OFAC or any enabling statute or Executive Order relating thereto, 

	
			
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and (c) comply, and cause any of its subsidiaries to comply, with all applicable Bank Secrecy Act (“BSA”) laws and regulations, as amended.
[Remainder of page intentionally left blank; signature pages follow]

	
			
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IN WITNESS WHEREOF, the parties have executed this Second Amendment to Amended and Restated Loan and Security Agreement and Other Loan Documents as of the date first set forth above.
	
		
	

	BORROWERS:

BG STAFFING, INC., a Delaware corporation, f/k/a LTN Staffing, LLC, a Delaware limited liability company

By:  /s/ L. Allen Baker, Jr.              
Name:   L. Allen Baker, Jr.
Title:   President and Chief Executive Officer

	BG STAFFING, LLC, a Delaware limited liability company

By:   BG Staffing, Inc., a Delaware corporation, f/k/a LTN Staffing, LLC, a Delaware limited liability company
Its:   Sole Member

   By:  /s/ L. Allen Baker, Jr.              
   Name:   L. Allen Baker, Jr.
   Title:   President and Chief Executive Officer

	
		
	 
	BG PERSONNEL, LP, a Texas limited partnership

By:   BG Staffing, LLC, a Delaware limited liability company, 
Its:   General Partner

   By:   BG Staffing, Inc., a Delaware corporation, f/k/a LTN Staffing, LLC, a Delaware limited liability company
   Its:   Sole Member

      By:  /s/ L. Allen Baker, Jr.           
      Name:   L. Allen Baker, Jr.
      Title:   President and Chief Executive Officer

	 
	B G STAFF SERVICES INC., a Texas corporation

By:  /s/ L. Allen Baker, Jr.              
Name:   L. Allen Baker, Jr.
Title:   President and Chief Executive Officer

	
		
	 
	LENDER:

FIFTH THIRD BANK, an Ohio banking corporation, successor by merger with Fifth Third Bank, a Michigan banking corporation

By:  /s/ David L. Mistic              
Name:   David L. Mistic
Title:   Vice President

By:  /s/ Clayton A. Bruce              
Name:   Clayton A. Bruce
Title:   Vice PresidentAMENDMENT NO. 19 TO THE AMENDED AND RESTATED

 

RECEIVABLES PURCHASE AGREEMENT

 

THIS AMENDMENT NO. 19 TO THE AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (this “Amendment”), dated as of December 12, 2014 is among VOLT FUNDING CORP., a Delaware corporation (the “Seller”), VOLT INFORMATION SCIENCES, INC., a New York corporation, in its individual capacity (“Volt”) and in its capacity as servicer (in such capacity, the “Servicer”), PNC BANK, NATIONAL ASSOCIATION, a national banking association (“PNC”), as the Buyer (the “Buyer”), as Buyer Agent for the Buyer (the “Buyer Agent”), and as Administrator (in such capacity, the “Administrator”).

 

BACKGROUND

 

WHEREAS, the Seller, the Servicer, Volt, the Buyer, the Buyer Agent and the Administrator are parties to a certain Amended and Restated Receivables Purchase Agreement, dated as of June 3, 2008 (as amended supplemented and/or otherwise modified prior to giving effect to this Amendment, the “Amended and Restated Receivables Purchase Agreement”); and

 

WHEREAS, in furtherance of the continuation of the securitization program maintained under the Amended and Restated Receivables Purchase Agreement, the parties hereto desire to further amend the Amended and Restated Receivables Purchase Agreement in the manner and to the extent provided in this Amendment;

 

NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1.     Definitions.  Capitalized terms used but not defined in this Amendment shall have the meanings assigned to them in the Amended and Restated Receivables Purchase Agreement.

 

SECTION 2.     Amendments to Amended and Restated Receivables Purchase Agreement.  Effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, the Amended and Restated Receivables Purchase Agreement is hereby amended as follows:

 

(a)           The definition of “Buyer Termination Date” in Section 1.01 of the Amended and Restated Receivables Purchase Agreement is hereby amended and restated to read in its entirety as follows:

 

“‘Buyer Termination Date’ means December 18, 2015, which date may be extended from time to time for an additional period or periods in accordance with Section 2.05 (as though applicable thereto).”

 

(b)           The definition of “Credit Enhancement Reserve” in Section 1.01 of the Amended and Restated Receivables Purchase Agreement is hereby amended and restated to read in its entirety as follows:

 

  

  

  

 

“‘Credit Enhancement Reserve’ shall mean, with respect to any Settlement Date, an amount equal to, the product of (A) the greater of (1) the Credit Dynamic Reserve as of such Settlement Date and (2) the Credit Enhancement Floor as of such Settlement Date, and (B) the positive result, if any, of (1) the aggregate outstanding Account Balance of Eligible Receivables in the Receivables Pool as of the last day of the Accounting Period immediately preceding such Settlement Date, minus (2) the Yield Reserve with respect to the related Settlement Period, minus (3) the aggregate amount by which the Account Balance of Eligible Receivables of each Obligor as of the last day of the Accounting Period immediately preceding such Settlement Date exceeds the Concentration Limit for such Obligor, minus (4) the aggregate amount by which the Account Balance of Eligible Receivables of each Obligor as of the last day of the Accounting Period immediately preceding such Settlement Date with payment terms equal to or greater than 61 days but less than or equal to 95 days after the date of the  original invoice of such Eligible Receivables exceeds 5% of the aggregate Account Balance of all Eligible Receivables in the Receivables Pool as of the last day of such Accounting Period, and minus (5) the aggregate amount by which the Account Balance of Eligible Unbilled Receivables of each Obligor as of the last day of the Accounting Period immediately preceding such Settlement Date exceeds 15% of the aggregate Account Balance of all Eligible Receivables in the Receivables Pool as of the last day of such Accounting Period.”

 

(c)           Sub-section (d) of the definition of “Eligible Receivable” in Section 1.01 of the Amended and Restated Receivables Purchase Agreement is hereby amended and restated to read in its entirety as follows:

 

“arises from a Contract (the form of which, if not entered into in the ordinary course of the Staffing Solutions Business, has been approved by the Administrator) and has been billed, or is an Eligible Unbilled Receivable, or in respect of which the related Obligor is otherwise liable, in accordance with the terms of such Contract;”

 

(d)           Sub-section (q) of the definition of “Eligible Receivable” in Section 1.01 of the Amended and Restated Receivables Purchase Agreement is hereby amended and restated to read in its entirety as follows:

 

“such Receivable must, by its terms, require full payment in respect thereof to be paid no later than 95 days after the date the original invoice with respect thereto was sent (or, in the case of an Eligible Unbilled Receivable, is sent) to the related Obligor;”

 

(e)           Sub-section (r) of the definition of “Eligible Receivable” in Section 1.01 of the Amended and Restated Receivables Purchase Agreement is hereby amended and restated to read in its entirety as follows:

 

“has an Obligor who is located in the United States, including Puerto Rico, and is not a Sanctioned Person;”

 

(f)           The definition of “Loss Horizon Ratio” in Section 1.01 of the Amended and Restated Receivables Purchase Agreement is hereby amended and restated to read in its entirety as follows:

 

  

2

  

 

“‘Loss Horizon Ratio’ shall mean, with respect to any Settlement Date, a fraction, expressed as a percentage, the numerator of which is the aggregate amount of sales of the Originators, attributable to the Staffing Solutions Business, during the six Accounting Periods immediately preceding such Settlement Date and the denominator of which is the aggregate outstanding balance of Eligible Receivables in the Receivables Pool as of the last day of the Accounting Period immediately preceding such Settlement Date.”

 

(g)           The definition of “Program Termination Date” in Section 1.01 of the Amended and Restated Receivables Purchase Agreement is hereby amended and restated to read in its entirety as follows:

 

“‘Program Termination Date’ means December 31, 2017.”

 

(h)           The following defined terms are hereby inserted in Section 1.01 of the Amended and Restated Receivables Purchase Agreement in their proper alphabetical position:

 

“‘Anti-Terrorism Laws’ means any applicable laws or regulation relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering or bribery, and any regulation, order, or directive promulgated, issued or enforced pursuant to such applicable laws or regulations, all as amended, supplemented or replaced from time to time.”

 

“‘Covered Entity’ means (a) the Seller, the Servicer, Volt and each Originator and (b) each Person that, directly or indirectly, is in control of a Person described in clause (a) above.  For purposes of this definition, control of a Person shall mean the direct or indirect (x) ownership of, or power to vote, 25% or more of the issued and outstanding equity interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for such Person, or (y) power to direct or cause the direction of the management and policies of such Person whether by ownership of equity interests, contract or otherwise.”

 

“‘Eligible Unbilled Receivable’ shall mean, at any time, any Receivable as to which the invoice or bill with respect thereto has not yet been sent to the Obligor thereof if (a) the related Originator has recognized the related revenue on its financial books and records under GAAP, and (b) not more than 30 days have expired since the date such Receivable arose.  If that 30th day is not a Business Day, clause (b) instead shall continue through the next succeeding Business Day.”

 

“‘Reportable Compliance Event’ means that any Covered Entity becomes a Sanctioned Person, or is charged by indictment, criminal complaint or similar charging instrument, arraigned, or custodially detained in connection with any Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or has knowledge of facts or circumstances to the effect that it is reasonably likely that any aspect of its operations is in actual or probable violation of any Anti-Terrorism Law.”

 

“‘Sanctioned Country’ means a country subject to a sanctions program maintained under any Anti-Terrorism Law.”

 

  

3

  

 

“‘Sanctioned Person’ means any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person, group, regime, entity or thing, or subject to any limitations or prohibitions (including but not limited to the blocking of property or rejection of transactions), under any Anti-Terrorism Law.”

 

(i)           Section 5.01 of the Amended and Restated Receivables Purchase Agreement is hereby amended by the addition of the following new subsection (d) at the end thereof:

 

“(d)           Notwithstanding subsection (a) above, or any corresponding provision elsewhere in this Agreement, the Seller (directly or through the Servicer) may request that the Aggregate Net Investment: (i) be increased on a Settlement Date even though not so indicated on the Settlement Statement delivered under subsection (a) in respect of that Settlement Date; or (ii) be increased on a Business Day that is not also a Settlement Date.  Any such request must be given no later than 11:00 a.m. (New York City time) on the day proposed for such increase.  Each Buyer, in its sole discretion, may accept or decline any such request and may condition its acceptance on such terms and conditions (as to amount or otherwise) as it may require.  References in this Agreement to any increase in the Aggregate Net Investment (or, as to any Buyer, its respective Net Investment) on a Settlement Date shall be deemed also to refer to any such increase made on some other date in accordance with this subsection.”

 

(j)           The proviso to Section 5.02 of the Amended and Restated Receivables Purchase Agreement is hereby amended and restated to read in its entirety as follows:

 

“provided that the Administrator or Buyer Agent may specify in such notice that such written report, in the form attached hereto as Exhibit K (any such report, an “Interim Report”), be furnished to the Administrator, the Buyers and Buyer Agents on a more frequent basis until the Administrator, Buyers or Buyer Agents gives notice otherwise.”

 

(k)           Sub-section (e) of Section 5.03 of the Amended and Restated Receivables Purchase Agreement is hereby amended and restated to read in its entirety as follows:

 

“Notwithstanding anything to the contrary contained herein, if, on any Settlement Date which is not a Liquidation Day (after giving effect to all payments required to be made by the Seller or the Servicer to or for the account of the Buyers pursuant to this Section 5.03 and any increase in the Net Investment of the Buyers effected on such day) or on any day on which the Interim Report is delivered pursuant to Section 5.02, the Aggregate Buyers’ Allocation shall exceed one hundred percent (100%), the Seller shall make a payment of an amount in immediately available funds to the Buyer Agents for the account of the applicable Buyers as a reduction of the Net Investment of the Buyers such that, after giving effect to such payment, the Aggregate Buyers’ Allocation is equal to one hundred percent (100%).”

 

(l)           Sub-section (m) of Section 8.01 of the Amended and Restated Receivables Purchase Agreement is hereby amended and restated to read in its entirety as follows:

 

“(m)           Not an Investment Company.  The Seller is not and will not become as a result of the transactions contemplated by the Purchase Documents, an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  In addition, the Seller is not a “covered fund” under Section 13 of the U.S. Bank Holding Company Act of 1956, as amended, and the applicable rules and regulations thereunder.”

 

  

4

  

 

(m)           Section 8.01 of the Amended and Restated Receivables Purchase Agreement is hereby amended by adding the following sub-section (o) at the end thereof:

 

“(o)           Anti-Money Laundering/International Trade Law.  To the Seller’s knowledge, no Obligor was a Sanctioned Person at the time of origination of any Receivable owing by such Obligor.  No Covered Entity, either in its own right or through any third party, is a Sanctioned Person.  No Covered Entity (i) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (ii) does business in or with, or derives any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; or (iii) engages in any dealings or transactions prohibited by any Anti-Terrorism Law.”

 

(n)           Section 8.03 of the Amended and Restated Receivables Purchase Agreement is hereby amended by adding the following sub-section (k) at the end thereof:

 

“(k)           Anti-Money Laundering/International Trade Law.  To the Servicer’s knowledge, no Obligor was a Sanctioned Person at the time of origination of any Receivable owing by such Obligor.  No Covered Entity, either in its own right or through any third party, is a Sanctioned Person.  No Covered Entity (i) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (ii) does business in or with, or derives any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; or (iii) engages in any dealings or transactions prohibited by any Anti-Terrorism Law.”

 

(o)           Section 9.02 of the Amended and Restated Receivables Purchase Agreement is hereby amended by adding the following sub-section (k) at the end thereof:

 

“(k)           Anti-Money Laundering/International Trade Law Compliance.  No Covered Entity, either in its own right or through any third party, will become a Sanctioned Person.  No Covered Entity will (i) have any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (ii) do business in or with, or derive any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; (iii) engage in any dealings or transactions prohibited by any Anti-Terrorism Law or (iv) use the proceeds of any purchase to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law.  The funds used to repay Seller’s obligations under this Agreement and each of the other Purchase Documents will not be derived from any unlawful activity.  Each Covered Entity shall comply with all Anti-Terrorism Laws.  Seller shall promptly notify the Administrator in writing upon the occurrence of a Reportable Compliance Event.”

 

  

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(p)           Section 9.04 of the Amended and Restated Receivables Purchase Agreement is hereby amended by adding the following sub-section (d) at the end thereof:

 

“(d)           Anti-Money Laundering/International Trade Law Compliance.  No Covered Entity, either in its own right or through any third party, will become a Sanctioned Person.  No Covered Entity will (i) have any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (ii) do business in or with, or derive any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; (iii) engage in any dealings or transactions prohibited by any Anti-Terrorism Law or (iv) use the proceeds of any purchase to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law.  The funds used to repay Servicer’s obligations under this Agreement and each of the other Purchase Documents will not be derived from any unlawful activity.  Each Covered Entity shall comply with all Anti-Terrorism Laws.  Servicer shall promptly notify the Administrator in writing upon the occurrence of a Reportable Compliance Event.”

 

(q)           The Amended and Restated Receivables Purchase Agreement is hereby amended by adding the form Interim Report (attached to this Amendment Exhibit A) as Exhibit K to the Amended and Restated Receivables Purchase Agreement.

 

SECTION 3.     Representations and Warranties.  Each of the Seller and Servicer hereby represents and warrants to the Buyer, the Buyer Agent and the Administrator, as of the date hereof, as follows:

 

(a)           the representations and warranties of the Seller and the Servicer contained in Article VIII of the Amended and Restated Receivables Purchase Agreement are true and correct in all material respects on and as of the date hereof as though made on and as of such date (except for representations and warranties which apply as to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date); and

 

(b)           no event has occurred and is continuing, or would result from such respective amendment, that constitutes a Termination Event or Potential Termination Event.

 

SECTION 4.     Conditions Precedent.  The effectiveness of this Amendment is subject to the satisfaction of all of the following conditions precedent:

 

(a)           Administrator shall have received a fully executed counterpart of this Amendment from each of the parties hereto;

 

(b)           each representation and warranty of the Seller, Volt, and Servicer contained herein or in any other Purchase Document (after giving effect to this Amendment) shall be true and correct;

 

(c)           no Termination Event, as set forth in Section 10.01 of the Amended and Restated Receivables Purchase Agreement, shall have occurred and be continuing;

 

  

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(d)           Administrator shall have received (i) a fully executed copy of (A) Amendment No. 16 to the Receivables Sale and Contribution Agreement, dated as of the date hereof, between the Seller and Volt, (B) Amendment No. 3 to the Volt Management and P/S Partner Solutions Receivables Purchase and Sale Agreement and Amendment No. 1 to the VMC Consulting Receivables Purchase and Sale Agreement, dated as of the date hereof among Volt Management Corp., P/S Partner Solutions, Ltd., VMC Consulting Corporation and Volt and (C) Fifteenth Amended and Restated Fee Letter, dated as of the date hereof, among PNC and Seller, and (ii) the fees due pursuant to such Fifteenth Amended and Restated Fee Letter;

 

(e)           all proceedings taken in connection with this Amendment and all documents relating hereto shall be reasonably satisfactory to Administrator, Buyer Agent and the Buyer and their respective counsel, and each such Person shall have received copies of such documents as they may reasonably request in connection therewith, all in form and substance reasonably satisfactory to each such Person.

 

SECTION 5.     Amendment.  Seller, Servicer, Buyer Agent, Buyer and Administrator hereby agree that the provisions and effectiveness of this Amendment shall apply to the Amended and Restated Receivables Purchase Agreement as of the date hereof.  Except as amended by this Amendment, the Amended and Restated Receivables Purchase Agreement remains unchanged and in full force and effect.  This Amendment is a Purchase Document.

 

SECTION 6.     THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE MANDATORILY GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.  This Amendment may not be amended, supplemented or waived except pursuant to a writing signed by the party to be charged.  This Amendment may be executed in counterparts, and by the different parties on different counterparts, each of which shall constitute an original, but all together shall constitute one and the same agreement.  The section and other headings contained in this Amendment are for reference purposes only and shall not control or affect the construction of this Amendment or the interpretation hereof in any respect.

 

[SIGNATURES BEGIN ON NEXT PAGE]

 

 

 

 

 

  

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment by their duly authorized officers as of the date first above written.

 

	 	VOLT FUNDING CORP., as Seller	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ James Whitney	 
	 	Name: 	James Whitney	 
	 	Title: 	Senior Vice President and Chief Financial Officer	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

Amendment No. 19 to A&R RPA

 

  

S-1

  

              

	 	VOLT INFORMATION SCIENCES, INC., 

individually and as Servicer

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ James Whitney	 
	 	Name: 	James Whitney	 
	 	Title: 	Senior Vice President and Chief Financial Officer	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

Amendment No. 19 to A&R RPA

 

  

S-2

  

         

	 	PNC BANK NATIONAL, ASSOCIATION, as

a Buyer, Buyer Agent and the Administrator

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ Robyn Reeher	 
	 	Name: 	Robyn Reeher	 
	 	Title: 	Vice President	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

Amendment No. 19 to A&R RPA

 

  

S-3

  

 

EXHIBIT A

 

TO

 

AMENDMENT NO. 19 TO THE

 

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

 

(NEW “EXHIBIT K” TO AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT)

 

Form of Interim Report

(See Attached)

 

 

 

 

 

 

 

 

 

 

  

A-1

  

              

	
Volt Information Sciences, Inc.

	 	
More frequent report due date

	  	 
	
Report for the Period Ended

	 	
Most recent monthly report date

	  	 
	
[Date]

	 	
More frequent report date of data*

	  	 
	
$ in (000s)

	 	  	  	 

                 

	  	  	  
	
Rollforward

	  	  
	
Beginning Balance

	  	  
	
Collections (enter as negative)

	  	  
	
Sales

	  	  
	
Write-offs (recoveries as a positive)

	  	  
	
Dilution from the previous monthly report

	  	  
	
Miscellaneous Adjustments

	  	  
	
Unapplied Cash

	  	  
	
Maintenance

	  	  
	
Ending Balance

	  	  
	  	  	  
	
Aging Days Past Invoice Due Date (“DPD”)

	  	  
	
Current Invoiced and Not Past Due

	  	  
	
1 - 30 DPD

	  	  
	
31 - 60 DPD

	  	  
	
61 - 90 DPD

	  	  
	
91 - 120 DPD

	  	  
	
121+ DPD

	  	  
	
Aged Credits (> 120 DPD) (enter as negative)

	  	  
	
Unbilled Receivables (1-30 days)**

	  	  
	
Unbilled Receivables (31+ days)

	  	  
	  	  	  
	
1.       Reported Ending Aging Balance:

	  	  
	
2.       Deduct: Unapplied Cash

	  	  
	
3.       Deduct: Ineligible Receivables (percentage from previous monthly report)

	  	  
	
4.       Eligible Receivables [(1-2-3)]

	  	  
	
5.       Deduct: Excess Concentrations from previous monthly report

	  	  
	
6.       Net Receivables Balance [(4-5)]

	  	  
	
7.       Required Reserve (%) from previous monthly report

	  	  
	
8.       Yield Reserve ($) from previous monthly report

	  	  
	
9.       Required Reserve ($) [(6-8)*7]

	  	  
	
10.       Borrowing Availability [min(6-9,16)]

	  	  
	
11.       Current Net Investment

	  	  
	
12.       Purchase Notice

	  	  
	
13.       Paydown Notice (enter as positive)

	  	  
	
14.       Effective Date - Net Investment increase/decrease

	  	  
	
15.       New Net Investment

	  	  
	
16.       Facility Amount

	  	  
	
17.       Percentage Interest Prior to Weekly Activity [(11+9)/6)]

	  	  
	
18.       Percentage Interest After Weekly Activity [(15+9)/6)]

	  	  
	  	  	  
	
19. Additional Availability/(Paydown Required) [(10-15)]

	  	  

              

  

A-2

  

               

 

	
The undersigned hereby represents and warrants that the foregoing and attachments represent true and accurate information as of date of data shown above and is in accordance with the AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT dated as of June 3, 2008 (as amended from time to time) among VOLT FUNDING CORP., a Delaware corporation (the “Seller”), THE VARIOUS BUYERS AND BUYER AGENTS FROM TIME TO TIME PARTY THERETO, VOLT INFORMATION SCIENCES, INC., a New York corporation (the “Company”), and PNC BANK, NATIONAL ASSOCIATION, as Administrator for each Buyer Group (in such capacity, the “Administrator”), and that all representations and warranties made therein are true and correct in all material respects on and as of such date as though made on and as of such date (except to the extent relating solely to an earlier date).

	  
	  	  
	  	  
	  	  
	  	  
	
Signed:  ____________________

	  	
Date:  __________

	  
	  	  	  	  
	  	  	  	  
	
Title:  ______________________________________

	  	  	  

                

*           To be most recent data reasonably available (and in any event as of a date within 8 Business Days of the date of this Interim Report); except as otherwise noted in the table.

 

**         If Day 30 is not a Business Day, also includes Receivables through next Business Day.

 

 

 

 

 

 

 

 

 

 

A-3

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