SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1995
------------------------------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ----------------- to -------------------------
Commission file number 0-11876
-------
UNIFORCE TEMPORARY PERSONNEL, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 13-1996648
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1335 JERICHO TURNPIKE, NEW HYDE PARK, NY 11040
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 437-3300
------------------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /.
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practical date. 4,172,313 (as of August 1, 1995).
---------
<PAGE>
UNIFORCE TEMPORARY PERSONNEL, INC.
INDEX
PAGE NO.
PART I FINANCIAL INFORMATION:
Item 1. Consolidated Financial Statements
Consolidated condensed statements of earnings -
three months and six months ended
June 30, 1995 and 1994 (unaudited) 1
Consolidated condensed balance sheets -
June 30, 1995 (unaudited) and December
31, 1994 2
Consolidated condensed statements of cash flows -
six months ended June 30, 1995 and 1994
(unaudited) 3
Notes to consolidated condensed financial
statements (unaudited) 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
PART II OTHER INFORMATION:
Item 4. Submission of Matters to a Vote of Security
Holders 9
Item 6. Exhibits and Reports on Form 8-K 10
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
UNIFORCE TEMPORARY PERSONNEL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
JUNE 30, JUNE 30,
---------------------------------- --------------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales of supplemental
staffing services $30,444,171 $27,711,936 $59,638,872 $49,957,116
Service revenues and fees 1,704,764 1,882,351 3,193,113 3,151,691
----------- ----------- ----------- -----------
Total revenues 32,148,935 29,594,287 62,831,985 53,108,807
----------- ----------- ----------- -----------
Costs and expenses:
Cost of supplemental
staffing services 23,695,693 21,742,654 46,403,540 39,048,397
Licensees' share of gross
margin 2,349,617 2,505,539 4,569,090 4,742,669
General and administrative 4,393,510 3,839,865 8,872,723 6,849,607
Depreciation & amortization 236,093 235,630 466,335 428,738
----------- ----------- ----------- -----------
Total costs and expenses 30,674,913 28,323,688 60,311,688 51,069,411
----------- ----------- ----------- -----------
Earnings from operations 1,474,022 1,270,599 2,520,297 2,039,396
Other income (expense):
Interest - net (165,170) (10,041) (249,295) 20,139
Other - net 25,590 (18,396) 34,433 53,951
----------- ----------- ----------- -----------
Earnings before provision for
income taxes 1,334,442 1,242,162 2,305,435 2,113,486
Provision for income taxes 506,000 472,000 874,000 803,000
----------- ----------- ----------- -----------
NET EARNINGS $ 828,442 $ 770,162 $ 1,431,435 $ 1,310,486
=========== =========== =========== ===========
Weighted average number of shares outstanding:
Primary 4,301,178 4,595,315 4,365,416 4,471,489
Fully diluted 4,301,178 4,752,693 4,365,416 4,558,350
Earnings per common share:
Primary $ .19 $ .17 $ .33 $ .29
=========== =========== =========== ===========
Fully diluted $ .19 $ .16 $ .33 $ .29
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Earnings per share for the six month periods may not necessarily equal the total
for the quarters.
1
<PAGE>
UNIFORCE TEMPORARY PERSONNEL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
----------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 3,411,953 $ 7,298,823
Accounts receivable - net 14,245,504 11,818,740
Funding and service fees
receivable - net 20,007,806 14,466,995
Current maturities of notes
receivable from licensees - net 306,635 399,714
Prepaid expenses and other
current assets 430,538 501,088
Deferred income taxes 379,771 379,771
----------- ------------
Total current assets 38,782,207 34,865,131
----------- ------------
Notes receivable from licensees - net 213,086 277,767
Fixed assets - net 1,747,107 1,294,550
Deferred costs and other assets - net 1,130,942 1,336,284
Cost in excess of fair value of net
assets acquired 3,624,158 3,722,576
----------- ------------
$45,497,500 $ 41,496,308
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Loan payable $ 7,900,000 $ 3,500,000
Payroll and related taxes payable 7,460,568 7,007,921
Payable to licensees and clients 2,083,843 1,910,111
Income taxes payable 214,252 ---
Accrued expenses and
other liabilities 3,012,160 3,165,869
----------- ------------
Total current liabilities 20,670,823 15,583,901
----------- ------------
Loan payable - non-current 2,400,000 2,800,000
STOCKHOLDERS' EQUITY:
Common stock $.01 par value 49,868 49,468
Additional paid-in capital 7,653,922 7,411,572
Retained earnings 22,111,855 20,952,594
----------- ------------
29,815,645 28,413,634
Treasury stock, at cost, 802,500
shares in 1995 and 578,750
shares in 1994 (7,388,968) (5,301,227)
----------- ------------
Total stockholders' equity 22,426,677 23,112,407
----------- ------------
$45,497,500 $ 41,496,308
=========== ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
2
<PAGE>
UNIFORCE TEMPORARY PERSONNEL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1995 1994
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $1,431,435 $1,310,486
Adjustments to reconcile net
earnings to net cash (used)
by operating activities:
Depreciation and amortization 466,335 428,738
(Increase) in receivables
and prepaid expenses (7,897,025) (6,776,080)
Stock option compensation expense 9,000 9,000
Increase in liabilities 686,922 1,877,110
---------- ----------
Net cash (used) by operating
activities (5,303,333) (3,150,746)
---------- ----------
Cash flows from investing activities:
Purchases of fixed assets (628,443) (391,197)
(Increase) decrease in deferred
costs and other investments 13,311 (4,415,990)
Decrease in notes receivable
from licensees 157,760 60,334
---------- ----------
Net cash (used) by investing
activities (457,372) (4,746,853)
---------- ----------
Cash flows from financing activities:
Increase in loan payable 4,000,000 6,300,000
Cash dividends paid (272,174) (262,783)
Purchase of treasury stock (2,087,741) ---
Proceeds from issuance of
common stock 233,750 363,902
---------- ----------
Net cash provided by financing
activities 1,873,835 6,401,119
---------- ----------
Net (decrease) in cash
and cash equivalents (3,886,870) (1,496,480)
Cash and cash equivalents at
beginning of period 7,298,823 7,155,081
---------- ----------
Cash and cash equivalents at
end of period $3,411,953 $5,658,601
========== ==========
Supplemental disclosures:
Cash paid for:
Interest $ 273,016 $ 50,574
---------- ----------
Income taxes $ 669,087 $ 798,031
---------- ----------
</TABLE>
Non-cash investing and financing activity:
In April 1994, the Company issued 127,720 shares of common stock in connection
with the acquisition of certain assets of Brannon & Tully.
See accompanying notes to consolidated condensed financial statements.
3
<PAGE>
UNIFORCE TEMPORARY PERSONNEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of
Uniforce Temporary Personnel, Inc. and its wholly-owned subsidiaries (the
"Company"). All significant intercompany accounts and transactions have been
eliminated in consolidation.
2. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements as shown in the
accompanying index have been prepared by the Company without audit. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows at June 30, 1995, and for all periods presented have
been made.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed, reclassified or omitted. It is
suggested that these consolidated condensed financial statements be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's December 31, 1994 financial statements. The results of
operations for the period ended June 30, 1995 are not necessarily indicative of
the operating results which may be achieved for the full year.
Tax accruals have been made based on estimated effective
annual tax rates for the periods presented.
3. CONTINGENCIES
In April 1994, various prior insurance carriers and their
not-for-profit trade association filed an action against the Company, its
officers and various unrelated parties. The action alleges breach of contracts
of insurance and underpayment of premiums. The Company's motion to dismiss the
action has not yet been decided and the Company continues to deny the validity
of the claims of the Plaintiffs. Further, it intends to assert substantial
claims in opposition to the claims of the Plaintiffs. Additionally, the Company
and its subsidiaries have filed suit against various prior worker compensation
carriers alleging claims mismanagement.
Management believes that the ultimate outcome of these matters
will not have a material adverse affect upon the financial position of the
Company.
4
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Total revenues increased by $2,554,648, or 8.6%, from
$29,594,287 in the second quarter of 1994 to $32,148,935 in the second quarter
of 1995. For the first six months, total revenues increased by $9,723,178 or
18.3% from $53,108,807 in 1994 to $62,831,985 in 1995.
Sales of supplemental staffing services increased by
$2,732,235 and $9,681,756, respectively, for the second quarter and first six
months of 1995 as compared to 1994. These increases resulted principally from
the Company's acquisition in April 1994 of certain assets of Brannon & Tully,
Inc., a provider of information services ("IS") contract professionals. This
company now operates under the tradename of Brannon & Tully/Uniforce Information
Services. This acquisition contributed $6,070,257 and $11,765,240, respectively,
for the second quarter and first six months of 1995 and $2,977,770 for the
period from April 18, 1994 to June 30, 1994. The acquisition has had a favorable
impact on the Company's results of operations and its ability to develop higher
margin professional services. Sales by the Company's subsidiaries, PrO
Unlimited, and to a lesser degree LabForce, continued to increase as the Company
emphasized the marketing of these services.
The Company's strategy is to expand through the development of
higher margin professional services such as IS, technical, automated office and
other professional support services as well as its PrO Unlimited and LabForce
subsidiaries, while continuing to reduce the percentage of its sales derived
from light industrial assignments. In addition, the Company intends to continue
to pursue acquisitions of established independent supplemental staffing service
companies that offer specialty services.
Service revenues and fees decreased by 9.4% from $1,882,351 in
the second quarter of 1994 to $1,704,764 in the second quarter of 1995 and
increased by 1.3% from $3,151,691 for the first six months of 1994 to $3,193,113
for first six months of 1995. Service revenues and fees generated by Temporary
Help Industry Servicing Company, Inc. (THISCO) and Brentwood Service Group, Inc.
(BSG), two of the Company's subsidiaries, increased by 15.2% and 16.2%,
respectively, for the second quarter and first six months of 1995 as compared to
1994. The Company intends to continue to expand this portion of its business
through THISCO and BSG during 1995. These increases were more than offset by
certain licensee service revenues and fees which were reported in the 1994
periods and for which there were none in the 1995 periods. In addition, system
wide sales, which include sales of Associated Offices serviced by THISCO and
BSG, increased $12,320,707 or 19.6% from $62,833,751 in the second quarter of
1994 to $75,154,458 in the second quarter of 1995. In the first six months,
system wide sales increased by $28,017,112 or 24.5% from $114,270,872 in 1994 to
$142,287,984 in 1995.
5
<PAGE>
Cost of supplemental staffing services was 77.8% of sales of
supplemental staffing services in the second quarter of 1995, compared to 78.5%
in the second quarter of 1994. For the first six months, cost of supplemental
staffing services was 77.8% of sales of supplemental staffing services in 1995
and 78.2% in 1994. The lower percentage in 1995 was principally due to increased
sales in the higher margin professional services.
Licensees' share of gross margin is principally based upon a
percentage of the gross margin generated from sales by licensed offices. The
gross margin from sales of supplemental staffing services amounted to $6,748,478
and $5,969,282 for the second quarter of 1995 and 1994, respectively. For the
first six months, gross margin from such sales amounted to $13,235,332 in 1995
and $10,908,719 in 1994. Licensees' share of gross margin was 34.8% for the
second quarter of 1995 as compared to 42.0% for the second quarter of 1994. For
the first six months, licensees' share of gross margin was 34.5% in 1995 and
43.5% in 1994. The lower share as a percentage of total gross margin in 1995 is
due, in part, to the sales of Brannon & Tully/Uniforce Information Services for
which there are no related licensee distributions, and to the sales of PrO
Unlimited for which there are limited distributions.
General and administrative expenses increased by $553,645 or
14.4% during the second quarter of 1995 as compared to the second quarter of
1994. For the first six months, general and administrative expenses increased by
$2,023,116 or 29.5% in 1995 compared to 1994. As a percentage of revenues,
general and administrative expenses were 13.7% and 13.0% for the second quarter
of 1995 and 1994, respectively and 14.1% in 1995 and 12.9% in 1994 for the first
six month periods. These increases resulted principally from expenses relating
to the Brannon & Tully/Uniforce Information Services operations and higher
payroll and marketing costs at PrO Unlimited. Further contributing to the
increase were higher expenses relating to payroll costs with respect to
permanent staff and professional fees relating to the litigation described in
Note 3 of the notes to the consolidated condensed financial statements.
The increase in net interest expense in the 1995 periods as
compared to 1994 is a direct result of increased borrowings used for the
acquisition of Brannon & Tully, Inc. and to meet working capital requirements.
As a result of the factors discussed above, net earnings
increased by 7.6% from $770,162 ($.16 per share on a fully diluted basis) in the
second quarter of 1994 to $828,442 ($.19 per share) in the second quarter of
1995. For the first six months, net earnings increased by 9.2% from $1,310,486
($.29 per share) in 1994 to $1,431,435 ($.33 per share) in 1995.
6
<PAGE>
FINANCIAL CONDITION
As of June 30, 1995, the Company's working capital decreased
to $18,111,384, as compared to $19,281,230 at December 31, 1994. This decrease
was due primarily to the continuing profitable operations of the Company being
more than offset by the repurchase of its common stock, the acquisition of fixed
assets and the payment of the cash dividend detailed below. Funding and service
fees receivables increased by $5,540,811 to $20,007,806 during the first six
months of 1995. This increase is due principally to the increased service
revenues and fees generated by THISCO and BSG.
During 1995, the Company has paid quarterly cash dividends on
shares of common stock of Uniforce at the quarterly rate of $.03 per share.
Subsequent to June 30, 1995, the Board of Directors declared a quarterly cash
dividend of $.03 per share, which was paid on July 28, 1995 to holders of record
on July 18, 1995.
On April 18, 1994, the Company acquired certain assets of
Brannon & Tully, Inc., a provider of IS contract professionals. The purchase
price consisted of $3,150,000 in cash and the issuance of 127,720 shares of
common stock of the Company. The Company also acquired from Brannon & Tully,
Inc. certain accounts receivable, with recourse, for $1,301,595. The cash
portion of the purchase price and the accounts receivable acquired were
initially financed through a $4,500,000 borrowing under the Company's working
capital credit facility noted below.
The Company maintains, with two banks, a working capital
credit facility and a revolving credit and term loan facility. The working
capital credit facility represents an open line of credit of up to $10,000,000,
borrowings under which are payable on demand. Outstanding borrowings bear
interest, at the Company's option, at the banks' prime rate or at a rate 120
basis points above the banks' LIBOR Rate (a rate based upon the London Interbank
Offered Rate). At June 30, 1995, the Company had outstanding borrowings of
$7,100,000 with interest being charged as follows: 7.3875% (120 basis points
above the 90 day LIBOR) on $5,000,000, 7.2625% (120 basis points above the 30
day LIBOR) on 1,100,000.00 and 9% (Prime Rate) on $1,000,000.
On August 31, 1994, the Company entered into a new revolving
credit and term loan agreement establishing a two-year $6,000,000 facility,
outstanding borrowings under which, at the Company's option, may be converted at
the maturity of the revolving credit facility into a five-year term loan. The
loan agreement contains restrictive covenants relating to, among other things,
minimum net worth and profitability with which the Company is in
7
<PAGE>
compliance. Borrowings under the revolving credit portion of the facility will
bear interest, at the Company's option, either at the banks' prime rate or at a
rate 120 basis points above the banks' LIBOR Rate. Such borrowings, if converted
to a term loan, will bear interest, at the Company's option, either at the
banks' prime rate plus 1/4%, or at a rate 145 basis points above the LIBOR Rate.
This facility replaced a prior revolving credit facility that matured in June,
1994. Borrowings under the prior facility, which aggregated $4,000,000 at
maturity, were converted into a five-year term loan. At June 30, 1995,
$3,200,000 was outstanding with interest being charged at 7.5125% (145 basis
points above the 90- day LIBOR). The terms of the prior facility are
substantially identical to the new revolving credit and term loan facility.
The Company does not currently have material commitments for
capital expenditures and does not anticipate entering into any such commitments
during the next 12 months. The Company believes that internally generated cash
flow and existing borrowing facilities will be adequate to meet operating
requirements. The Company intends to expand its business through the development
of higher margin professional services as well as through PrO Unlimited,
LabForce and Brannon & Tully/Uniforce Information Services. Additionally, the
Company continues to pursue expansion by acquisition of established independent
supplemental staffing service companies that offer specialty services. The
Company anticipates that this expansion will be financed from internally
generated cash flow and existing borrowing facilities (of which $6,000,000 is
available under the long term revolving credit facility described above).
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders of the Company was held on
June 6, 1995. Votes were cast with respect to the reelection of the seven
incumbent Directors as follows:
Number of Shares
of Common Stock
Number of Shares as to Which
of Common Stock Authority to
Nominees Voted In Favor Vote Was Withheld
- -------- -------------- -----------------
John Fanning 3,789,216 31,350
Rosemary Maniscalco 3,804,516 16,050
Gordon Robinett 3,721,679 98,887
Harry V. Maccarrone 3,804,016 16,550
Joseph A. Driscoll 3,745,197 75,369
John H. Brinckerhoff III 3,807,407 13,159
Daniel Raynor 3,743,097 77,469
The Shareholders also adopted the Company's Director's Stock
Option Plan by a vote of 3,430,613 shares in favor and 301,946 shares against.
The holders of 75,507 shares abstained from voting and there were 12,500 broker
non-votes.
The Shareholders also approved an amendment to the Company's
Certificate of Incorporation changing the Company's name to "Uniforce Services,
Inc." by a vote of 3,742,850 shares in favor and 50,705 shares against. The
holders of 5,077 shares abstained from voting and there were 21,934 broker
non-votes.
The Shareholders also ratified the appointment of KPMG Peat
Marwick LLP as independent auditors of the Company for the year ending December
31, 1995 by a vote of 3,785,319 shares in favor, 27,005 shares against, the
holders of 8,242 shares abstaining from voting.
9
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10(a) Fourth Amendment dated as of April 26, 1995 to Revolving
Credit and Term Loan Agreement dated as of June 19, 1991
among Uniforce Services, Inc., Natwest Bank, N.A. and
Chemical Bank.
10(b) First Amendment dated as of April 26, 1995 to Revolving
Credit and Term Loan Agreement dated as of August 31,
1994 among Uniforce Services, Inc., Natwest Bank, N.A.
and Chemical Bank.
10(c) Promissory Note in the maximum principal amount of
$5,000,000 made by Uniforce Services, Inc. to Chemical
Bank.
27 Financial Data Schedule
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter
ended June 30, 1995.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Dated: August 11, 1995 UNIFORCE TEMPORARY PERSONNEL, INC.
By: /S/ JOHN FANNING
----------------------------------------
John Fanning, Chairman of the Board
and President
By: /S/ HARRY MACCARRONE
----------------------------------------
Harry Maccarrone, V.P. of Finance,
Principal Financial and Accounting
Officer
11
UNIFORCE SERVICES, INC.
UNIFORCE TEMPORARY PERSONNEL, INC.,
TEMPORARY HELP INDUSTRY SERVICING COMPANY, INC.
E.O. OPERATIONS CORP.
E.O. SERVICING CO., INC.
UTS CORP. OF MINNESOTA
USI INC. OF CALIFORNIA
UTS OF DELAWARE, INC.
TEMPFUNDS INTERNATIONAL, INC.
PrO UNLIMITED, INC.
THISCO OF CANADA, INC.
UNIFORCE PAYROLLING SERVICES, INC.
BRENTWOOD SERVICE GROUP, INC.
UNIFORCE MIS SERVICES OF GEORGIA, INC.
LABFORCE OF AMERICA, INC.
UNIFORCE MEDICAL SUPPORT, INC.
COMPUTER CONSULTANTS FUNDING & SUPPORT, INC.
AND
NATWEST BANK N.A.,
FORMERLY KNOWN AS NATIONAL WESTMINSTER BANK USA,
AND
CHEMICAL BANK
--------------------------
FOURTH AMENDMENT DATED AS OF
APRIL 26, 1995 TO REVOLVING CREDIT
AND TERM LOAN AGREEMENT
DATED AS OF JUNE 19, 1991
--------------------------
<PAGE>
THIS FOURTH AMENDMENT made as of the 26th day of April, 1995
among UNIFORCE SERVICES, INC., a New York corporation, having its principal
place of business at 1335 Jericho Turnpike, New Hyde Park, New York 11040 (the
"Company"), each of the corporations listed as a guarantor in the signature
pages hereto (collectively, the "Guarantors")
and
NATWEST BANK, N.A., FORMERLY KNOWN AS NATIONAL WESTMINSTER
BANK USA, a national banking association, organized under the laws of the United
States of America, having an office at 100 Jericho Quadrangle, Jericho, New York
11753 ("NatWest")
and
CHEMICAL BANK, a bank organized under the laws of New York State with an office
at 7600 Jericho Turnpike, Woodbury, New York 11797 ("Chemical") (NatWest and
Chemical each a "Bank", and, collectively, the "Banks").
W I T N E S S E T H:
WHEREAS, the Company, certain of the Guarantors and NatWest
entered into a certain revolving credit and term loan agreement dated as of June
19, 1991, as amended by a certain first amendment dated as of November 1, 1991
and a second amendment dated as of November 30, 1992 among the Company, certain
of the Guarantors and NatWest providing for certain financial accommodations to
the Company and which Agreement is now in full force and effect;
WHEREAS, NatWest sold and assigned and Chemical purchased and
assumed a fifty (50%) percent interest in and to such agreement pursuant to an
Assignment and Acceptance agreement dated as of November 30, 1992;
WHEREAS, such agreement was further amended by a third
amendment dated as of August 31, 1994 among the Company, the Guarantors and the
Banks (such agreement, as amended, collectively, the "Agreement");
WHEREAS, the Company, the Guarantors and the Banks have agreed
to modify the Agreement; and
WHEREAS, the Banks are willing to modify the Agreement on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth and for other good and valuable consideration,
the parties hereto agree as follows:
<PAGE>
1. As used in this Fourth Amendment capitalized terms, unless
otherwise defined, shall have the meaning ascribed thereto in the Agreement.
2. the Banks and the Company agree that the outstanding
principal balance of the Term Loans evidenced by the Term Notes is $-0- as to
each Bank as of April 26, 1995 and all interest due on the Term Loans has been
paid to such date.
3. As an inducement for the Bank to enter into this Fourth
Amendment, the Company and the Guarantors hereby jointly and severally represent
and warrant as follows:
(A) There are no defenses or offsets to their respective
obligations under the Agreement or any of the Loan Documents, and if any such
defenses or offsets exist without the knowledge of the Company or the
Guarantors, the same are hereby waived.
(B) All the representations and warranties made by the
Company and the Guarantors in the Agreement or any of the Loan Documents are
true and correct in all respects as if made on the date hereof.
(C) No event which constitutes a Default or an Event of
Default has occurred and is continuing under the Agreement or any of the Loan
Documents.
4. The Company, the Guarantors and the Banks hereby agree
that, subject to the conditions contained in paragraph 5, hereof, the Agreement
is hereby amended as follows:
(A) Section 1.1 of the Agreement is hereby amended to
delete the definition of "Guarantors" and to substitute the following therefor:
"'Guarantors' shall mean Uniforce Temporary
Personnel, Inc., Temporary Help Industry Servicing
Company, Inc., E.O. Operations Corp., E.O. Servicing
Co., Inc., UTS Corp. Of Minnesota, USI Inc. Of
California, UTS of Delaware, Inc., Tempfunds
International, Inc., PrO Unlimited, Inc., Thisco of
Canada, Inc., Uniforce Payrolling Services, Inc.,
Brentwood Service Group, Inc., Uniforce MIS Services
of Georgia, Inc., Labforce of America, Inc., Uniforce
Medical Support, Inc., Computer Consultants Funding &
Support, Inc., and each corporation required to
guaranty pursuant to Section 5.12 hereof."
-2-
<PAGE>
(B) Section 6.1(i) of the Agreement is hereby amended to
delete the language appearing therein and to substitute the following therefor:
"(i) Debt owing to the Banks; provided,
however, the aggregate amount of Debt permitted under
this subsection (i) shall not exceed $25,000,000.00
(including amounts not outstanding but committed by
the Bank)."
(C) Effective as of 12/31/94, Section 6.6(ii) of the
Agreement is hereby amended to delete "$650,000.00" appearing therein and to
substitute "$1,000,000.00" therefor.
(D) Section 7.1 of the Agreement is hereby amended to add
a new subsection (m) to read as follows:
"(m) A default shall occur and shall continue
beyond the applicable grace period, if any, relating
to such default under any of the documents related to
a certain standby letter of credit dated April 26,
1995 in the stated amount of $1,513,000.00 issued by
the Banks for the account of the Company and the
benefit of National Union Fire Insurance Company of
Pittsburgh, Pa."
5. This Fourth Amendment shall become effective on such date
as all of the following conditions shall be satisfied:
(A) FEES. The Banks shall have received evidence of
payment of the Banks' fees (in the amount of $1,500.00 with respect to each
Bank) and all attorneys' fees and expenses associated with the preparation of
this Fourth Amendment and any documents executed in connection herewith.
(B) APPROVAL OF THE BANKS' COUNSEL. All legal matters
incident to this Fourth Amendment shall be satisfactory to counsel to the Banks.
6. This Fourth Amendment is dated for convenience as of April
26, 1995 and shall be effective, unless otherwise indicated, upon the date of
the execution of this Third Amendment by the Banks.
7. This Fourth Amendment may be executed in two or more
counterparts, each of which shall be deemed an original.
8. Except as hereby amended the said Agreement dated as of
June 19, 1991, as previously amended, is in all respects ratified and confirmed.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to be executed by their duly authorized officers on the dates set
forth below.
UNIFORCE SERVICES, INC.
By:/S/ HARRY V. MACCARRONE
-----------------------------
Harry V. Maccarrone
Vice President-Finance
Dated: As of April 26, 1995
GUARANTORS:
UNIFORCE TEMPORARY PERSONNEL,
INC.
TEMPORARY HELP INDUSTRY SERVICING
COMPANY, INC.
E.O. OPERATIONS CORP.
E.O. SERVICING CO., INC.
UTS CORP. OF MINNESOTA
USI INC. OF CALIFORNIA
UTS OF DELAWARE INC.
PrO UNLIMITED, INC.
THISCO OF CANADA, INC.
UNIFORCE PAYROLLING SERVICES,
INC.
LABFORCE OF AMERICA, INC.
UNIFORCE MEDICAL SUPPORT, INC.
COMPUTER CONSULTANTS FUNDING &
SUPPORT, INC.
By:/S/ HARRY V. MACCARRONE
-----------------------------
Harry V. Maccarrone
Vice President-Finance
Dated: As of April 26, 1995
BRENTWOOD SERVICE GROUP, INC.
By:/S/ HARRY V. MACCARRONE
-----------------------------
Harry V. Maccarrone
President
Dated: As of April 26, 1995
-4-
<PAGE>
BANKS:
NATWEST BANK N.A.
(formerly known as National
Westminster Bank USA)
By:/S/ TARA M. KAZAK
---------------------------
Tara M. Kazak
Vice President
Dated: As of April 26, 1995
CHEMICAL BANK
By:/S/ JOHN T. MAST
---------------------------
John T. Mast
Vice President
Dated: As of April 26, 1995
-5-
<PAGE>
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On the 26th day of April, 1995, before me personally came HARRY V.
MACCARRONE, to me known, who, being by me duly sworn, did depose and say that he
resides at c/o 1335 Jericho Turnpike, New Hyde park, New York 11040 that he is
the Vice President-Finance of UNIFORCE SERVICES, INC., UNIFORCE TEMPORARY
PERSONNEL, INC., TEMPORARY HELP INDUSTRY SERVICING COMPANY, INC., E.O.
OPERATIONS CORP., E.O. SERVICING CO., INC., UTS CORP. OF MINNESOTA, USI INC. OF
CALIFORNIA, UTS OF DELAWARE, INC., TEMPFUNDS INTERNATIONAL, INC., PrO UNLIMITED,
INC., THISCO OF CANADA, INC., UNIFORCE PAYROLLING SERVICES, INC., BRENTWOOD
SERVICE GROUP, INC., UNIFORCE MIS SERVICES OF GEORGIA, INC., LABFORCE OF
AMERICA, INC., UNIFORCE MEDICAL SUPPORT, INC., and COMPUTER CONSULTANTS FUNDING
& SUPPORT, INC., the corporations described in and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of said corporations.
/S/ THERESA MADY-GROVE
------------------------------
Notary Public
THERESA MADY-GROVE
NOTARY PUBLIC, State of New York
No. 24-4943584
Qualified in Nassau County
Commission Expires Oct. 31, 1996
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On the 26th day of April, 1995, before me personally came
HARRY V. MACCARRONE, to me known, who, being by me duly sworn, did depose and
say that he resides at c/o 1335 Jericho Turnpike, New Hyde Park, New York 11040;
that he is the President of BRENTWOOD SERVICE GROUP, INC., the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto by order of the board of directors of said corporation.
/S/ THERESA MADY-GROVE
------------------------------
Notary Public
THERESA MADY-GROVE
NOTARY PUBLIC, State of New York
No. 24-4943584
Qualified in Nassau County
Commission Expires Oct. 31, 1996
-6-
<PAGE>
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On the 26th day of April, 1995, before me personally came TARA
M. KAZAK to me known, who, being by me duly sworn, did depose and say that she
resides at c/o 100 Jericho Quadrangle, Jericho, New York 11753; that she is a
Vice President of NATWEST BANK N.A., the banking institution described in and
which executed the foregoing document and that she signed her name thereto by
authority of such banking institution.
/S/ THERESA MADY-GROVE
------------------------------
Notary Public
THERESA MADY-GROVE
NOTARY PUBLIC, State of New York
No. 24-4943584
Qualified in Nassau County
Commission Expires Oct. 31, 1996
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On the 26th day of April, 1995, before me personally came John
T. Mast, to me known, who, being by me duly sworn, did depose and say that he
resides at c/o 7600 Jericho Turnpike, Woodbury, New York 11797; that he is a
Vice President of CHEMICAL BANK, the banking institution described in and which
executed the foregoing document and that he signed his name thereto by authority
of such banking institution.
/S/ THERESA MADY-GROVE
------------------------------
Notary Public
THERESA MADY-GROVE
NOTARY PUBLIC, State of New York
No. 24-4943584
Qualified in Nassau County
Commission Expires Oct. 31, 1996
-7-
UNIFORCE SERVICES, INC.
UNIFORCE TEMPORARY PERSONNEL, INC.,
TEMPORARY HELP INDUSTRY SERVICING COMPANY, INC.
E.O. OPERATIONS CORP.
E.O. SERVICING CO., INC.
UTS CORP. OF MINNESOTA
USI INC. OF CALIFORNIA
UTS OF DELAWARE, INC.
TEMPFUNDS INTERNATIONAL, INC.
PrO UNLIMITED, INC.
THISCO OF CANADA, INC.
UNIFORCE PAYROLLING SERVICES, INC.
BRENTWOOD SERVICE GROUP, INC.
UNIFORCE MIS SERVICES OF GEORGIA, INC.
LABFORCE OF AMERICA, INC.
UNIFORCE MEDICAL SUPPORT, INC.
COMPUTER CONSULTANTS FUNDING & SUPPORT, INC.
AND
NATWEST BANK N.A.,
FORMERLY KNOWN AS NATIONAL WESTMINSTER BANK USA,
AND
CHEMICAL BANK
--------------------------
FIRST AMENDMENT DATED AS OF
APRIL 26, 1995 TO REVOLVING CREDIT
AND TERM LOAN AGREEMENT
DATED AS OF AUGUST 31, 1994
--------------------------
<PAGE>
THIS FIRST AMENDMENT made as of the 26th day of April, 1995
among UNIFORCE SERVICES, INC., a New York corporation, having its principal
place of business at 1335 Jericho Turnpike, New Hyde Park, New York 11040 (the
"Company"), each of the corporations listed as a guarantor on the signature
pages hereto (collectively, the "Guarantors")
and
NATWEST BANK, N.A., FORMERLY KNOWN AS NATIONAL WESTMINSTER
BANK USA, a national banking association, organized under the laws of the United
States of America, having an office at 100 Jericho Quadrangle, Jericho, New York
11753 ("NatWest")
and
CHEMICAL BANK, a bank organized under the laws of New York State with an office
at 7600 Jericho Turnpike, Woodbury, New York 11797 ("Chemical") (Natwest and
Chemical each a "Bank", and, collectively, the "Banks").
W I T N E S S E T H:
WHEREAS, the Company, the Guarantors and the Bank entered into
a certain revolving credit and term loan agreement dated as of August 31, 1994,
(the "Agreement") providing for certain financial accommodations to the Company
and which Agreement is now in full force and effect;
WHEREAS, the Company, the Guarantors and the Banks have agreed
to modify the Agreement; and
WHEREAS, the Banks are willing to modify the Agreement on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth and for other good and valuable consideration,
the parties hereto agree as follows:
1. As used in this First Amendment capitalized terms, unless
otherwise defined, shall have the meaning ascribed thereto in the Agreement.
2. The Banks and the Company agree that the outstanding
principal balance of the Revolving Credit Loans evidenced by the Revolving
Credit Notes is $-0- as to each Bank as of April 26, 1995 and all interest due
on the Revolving Credit Loans has been paid to such date.
3. The Banks and the Company agree that the outstanding
principal balance of the Term Loans evidenced by the Term Notes is
<PAGE>
$1,700,000.00 as to each Bank as of April 26, 1995 and all interest due on the
Term Loans has been paid to such date.
4. As an inducement for the Bank to enter into this First
Amendment, the Company and the Guarantors hereby jointly and severally represent
and warrant as follows:
(A) There are no defenses or offsets to their respective
obligations under the Agreement or any of the Loan Documents, and if any such
defenses or offsets exist without the knowledge of the Company or the
Guarantors, the same are hereby waived.
(B) All the representations and warranties made by the
Company and the Guarantors in the Agreement or any of the Loan Documents are
true and correct in all respects as if made on the date hereof.
(C) No event which constitutes a Default or an Event of
Default has occurred and is continuing under the Agreement or any of the Loan
Documents.
5. The Company, the Guarantors and the Banks hereby agree
that, subject to the conditions contained in paragraph 6, hereof, the Agreement
is hereby amended as follows:
(A) Section 1.1 of the Agreement is hereby amended to
delete the definition of "Guarantors" and to substitute the following therefor:
"'Guarantors' shall mean Uniforce Temporary
Personnel, Inc., Temporary Help Industry Servicing
Company, Inc., E.O. Operations Corp., E.O. Servicing
Co., Inc., UTS Corp. Of Minnesota, USI Inc. Of
California, UTS of Delaware, Inc., Tempfunds
International, Inc., PrO Unlimited, Inc., Thisco of
Canada, Inc., Uniforce Payrolling Services, Inc.,
Brentwood Service Group, Inc., Uniforce MIS Services
of Georgia, Inc., Labforce of America, Inc., Uniforce
Medical Support, Inc., Computer Consultants Funding &
Support, Inc., and each corporation required to
guaranty pursuant to Section 5.12 hereof."
(B) Section 6.1(i) of the Agreement is hereby amended to
delete the language appearing therein and to substitute the following therefor:
"(i) Debt owing to the Banks; provided,
however, the aggregate amount of Debt permitted under
this subsection (i) shall not exceed
-2-
<PAGE>
$25,000,000.00 (including amounts not outstanding but
committed by the Banks)."
(C) Effective as of 12/31/94, Section 6.6(ii) of the Agreement
is hereby amended to delete "$650,000.00" appearing therein and to substitute
$1,000,000.00" therefor.
(D) Section 7.1 of the Agreement is hereby amended to add a
new subsection (n) to read as follows:
"(n) A default shall occur and shall
continue beyond the applicable grace period, if any,
relating to such default under any of the documents
related to a certain standby letter of credit dated
April 26, 1995 in the stated amount of $1,513,000.00
issued by the Banks for the account of the Company
and the benefit of National Union Fire Insurance
Company of Pittsburgh, Pa."
6. This First Amendment shall become effective on such date as
all of the following conditions shall be satisfied:
(A) FEES. The Banks shall have received evidence of
payment of the Banks' fees (in the amount of $1,500.00 with respect to each
Bank) and all attorneys' fees and expenses associated with the preparation of
this First Amendment and any documents executed in connection herewith.
(B) APPROVAL OF THE BANKS' COUNSEL. All legal matters
incident to this First Amendment shall be satisfactory to counsel to the Banks.
7. this First Amendment is dated for convenience as of April
26, 1995 and shall be effective, unless otherwise indicated, upon the date of
the execution of this First Amendment by the Banks.
8. This First Amendment may be executed in two or more
counterparts, each of which shall be deemed an original.
9. Except as hereby amended the said Agreement dated as of
August 31, 1994, is in all respects ratified and confirmed.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed by their duly authorized officers on the dates set
forth below.
UNIFORCE SERVICES, INC.
By:/S/ HARRY V. MACCARRONE
---------------------------
Harry V. Maccarrone
Vice President-Finance
Dated: As of April 26, 1995
GUARANTORS:
UNIFORCE TEMPORARY PERSONNEL, INC.
TEMPORARY HELP INDUSTRY SERVICING
COMPANY, INC.
E.O. OPERATIONS CORP.
E.O. SERVICING CO., INC.
UTS CORP. OF MINNESOTA
USI INC. OF CALIFORNIA
UTS OF DELAWARE, INC.
TEMPFUNDS INTERNATIONAL, INC.
PrO UNLIMITED, INC.
THISCO OF CANADA, INC.
UNIFORCE PAYROLLING SERVICES,
INC.
UNIFORCE MIS SERVICES OF GEORGIA,
INC.
LABFORCE OF AMERICA, INC.
UNIFORCE MEDICAL SUPPORT, INC.
COMPUTER CONSULTANTS FUNDING &
SUPPORT, INC.
By:/S/ HARRY V. MACCARRONE
---------------------------
Harry V. Maccarrone
Vice President-Finance
Dated: As of April 26, 1995
BRENTWOOD SERVICE GROUP, INC.
By:/S/ HARRY V. MACCARRONE
---------------------------
Harry V. Maccarrone
President
Dated: As of April 26, 1995
-4-
<PAGE>
BANKS:
NATWEST BANK N.A.
(formerly known as National
Westminster Bank USA)
By:/S/ TARA M. KAZAK
---------------------------
Tara M. Kazak
Vice President
Dated: As of April 26, 1995
CHEMICAL BANK
By:/S/ JOHN T. MAST
---------------------------
John T. Mast
Vice President
Dated: As of April 26, 1995
-5-
<PAGE>
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On the 26th day of April, 1995, before me personally came
HARRY V. MACCARRONE, to me known, who, being by me duly sworn, did depose and
say that he resides at c/o 1335 Jericho Turnpike, New Hyde Park, New York 11040
that he is the Vice President-Finance of UNIFORCE SERVICES, INC., UNIFORCE
TEMPORARY PERSONNEL, INC., TEMPORARY HELP INDUSTRY SERVICING COMPANY, INC., E.O.
OPERATIONS CORP., E.O. SERVICING CO., INC., UTS CORP. OF MINNESOTA, USI INC. OF
CALIFORNIA, UTS OF DELAWARE, INC., TEMPFUNDS INTERNATIONAL, INC., PrO UNLIMITED,
INC., THISCO OF CANADA, INC., UNIFORCE PAYROLLING SERVICES, INC., BRENTWOOD
SERVICE GROUP, INC., UNIFORCE MIS SERVICES OF GEORGIA, INC., LABFORCE OF
AMERICA, INC., UNIFORCE MEDICAL SUPPORT, INC., and COMPUTER CONSULTANTS FUNDING
& SUPPORT, INC., the corporations described in and which executed the foregoing
instrument; and that he signed his name thereto by order of the board of
directors of said corporations.
/S/ THERESA MADY-GROVE
------------------------------
Notary Public
THERESA MADY-GROVE
NOTARY PUBLIC, State of New York
No. 24-4943584
Qualified in Nassau County
Commission Expires Oct. 31, 1996
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On the 26th day of April, 1995, before me personally came
HARRY V. MACCARRONE, to me known, who, being by me duly sworn, did depose and
say that he resides at c/o 1335 Jericho Turnpike, New Hyde Park, New York 11040;
that he is the President of BRENTWOOD SERVICE GROUP, INC., the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto by order of the board of directors of said corporation.
/S/ THERESA MADY-GROVE
------------------------------
Notary Public
THERESA MADY-GROVE
NOTARY PUBLIC, State of New York
No. 24-4943584
Qualified in Nassau County
Commission Expires Oct. 31, 1996
-6-
<PAGE>
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On the 26th day of April, 1995, before me personally came TARA
M. KAZAK to me known, who, being by me duly sworn, did depose and say that she
resides at c/o 100 Jericho Quadrangle, Jericho, New York 11753; that she is a
Vice President of NATWEST BANK N.A., the banking institution described in and
which executed the foregoing document and that she signed her name thereto by
authority of such banking institution.
/S/ THERESA MADY-GROVE
------------------------------
Notary Public
THERESA MADY-GROVE
NOTARY PUBLIC, State of New York
No. 24-4943584
Qualified in Nassau County
Commission Expires Oct. 31, 1996
STATE OF NEW YORK )
:ss.:
COUNTY OF NASSAU )
On the 26th day of April, 1995, before me personally came John
T. Mast, to me known, who, being by me duly sworn, did depose and say that he
resides at c/o 7600 Jericho Turnpike, Woodbury, New York 11797; that he is a
Vice President of CHEMICAL BANK, the banking institution described in and which
executed the foregoing document and that he signed his name thereto by authority
of such banking institution.
/S/ THERESA MADY-GROVE
------------------------------
Notary Public
THERESA MADY-GROVE
NOTARY PUBLIC, State of New York
No. 24-4943584
Qualified in Nassau County
Commission Expires Oct. 31, 1996
-7-
PROMISSORY NOTE
$5,000,000 New York, New York
June 30, 1995
1. FOR VALUE RECEIVED, UNIFORCE SERVICES, INC. (the "Borrower"), by
this promissory note (the "Note") unconditionally promises to pay to the order
of CHEMICAL BANK (the "Bank"), in lawful money of the United States, the
principal amount of FIVE MILLION DOLLARS ($5,000,000) or the aggregate unpaid
principal amount of all advances (individually, an "Advance" and collectively,
"Advances") made by the Bank to the Borrower and recorded on the schedules
attached hereto, whichever is less. Each Advance evidenced hereby shall be made
available and shall bear interest at the applicable rate selected by the
Borrower, subject to availability, as provided in subparagraph (a) hereof (a
"Prime Rate Advance") or subparagraph (b) hereof (an Adjusted "LIBOR Rate
Advance").
(a) Each Prime Rate Advance shall be made available by the Bank to
the Borrower at the Bank's New York, New York office and shall
bear interest at the rate per annum which is equal to the
Bank's Prime Rate. "Prime Rate" shall mean the rate per annum
publicly announced by the Bank at its principal office from
time to time as its prime rate. Each change in the Prime Rate
shall result in a change in the interest rate herein,
effective as of the opening of business on the day on which
such change in the Prime Rate becomes effective.
(b) Each Adjusted Libor Rate Advance shall be made available by
the Bank to the Borrower at the lending office designated by
the Bank (the "Lending Office"), shall be in a minimum amount
of $500,000 and shall bear interest for each Interest Period
(as hereinafter defined in paragraph 3) applicable thereto at
a rate per annum which is equal to 1.20% above the rate per
annum, adjusted as provided in the last sentence of this
paragraph, at which U.S. dollar deposits are offered to the
Lending Office in the London interbank market as at 11:00
a.m., local time of such Lending Office, two Working Days
prior to the first day of such Interest Period in an amount
equal to the amount of such Advance which will be outstanding
during such Interest Period for delivery on the first day of
such Interest Period for the number of days in such Interest
Period. "Working Day" shall mean a day on which dealings in
currencies and exchange between banks may be carried on in New
York, New York and on which dealings in currencies and
exchange between banks are also carried on in the London
interbank market and banks are open for business in London and
the place where such Lending Office is located. The interest
rate determined hereunder shall be adjusted by dividing such
interest rate by the number equal to 1.00 minus the rate
(expressed as a decimal and rounded upward, if necessary, to
the next higher 1/16 of 1%) of reserves which are required to
be maintained (or which will be required to be maintained),
under Regulation D of the Board of Governors of the Federal
Reserve System (as in effect on the date of determination of
such interest
<PAGE>
rate), against "Eurocurrency liabilities" (as such term is
defined in Regulation D) from time to time during the period
for which the interest rate is determined.
2. The Bank may lend, in its sole discretion in each instance, such
amounts as may be requested by the Debtor hereunder, which Loans shall in no
event exceed $5,000,000 in aggregate principal amount outstanding at any time.
Each such request for a Advance shall be made by an officer of the Borrower or
any person designated in writing by any such officer, all of which are hereby
designated and authorized by the Borrower to request Advances and agree to the
terms thereof (including without limitation the applicable interest rate and
Maturity Date with respect thereto). The Debtor shall give the Bank notice at
least two (2) Working Days prior to the date hereof and the end of each Interest
Period (as hereafter defined) specifying whether the Advance shall be a Prime
Rate Advance or an Adjusted LIBOR Rate Advance and the Interest Period
applicable thereto. In the event the Borrower shall fail to provide such notice,
the Advance shall be deemed to bear interest at the applicable Prime Rate.
3. "Interest Period" shall mean (i) with respect to each Adjusted LIBOR
Rate Advance, the period beginning on the date of such Advance and ending 1, 2
or 3 months thereafter, as agreed between the Borrower and the Bank not less
than two (2) Working Days prior to the date of such Advance. "Business Day"
shall mean a day other than a Saturday, Sunday of other day on which the Bank is
authorized to close under the laws of the State of New York.
4. Each Prime Rate Advance shall be payable on the earlier of demand or
June 30, 1996. Each Adjusted LIBOR Rate Advance shall be payable on the last day
of the Interest Period therefor (the "Maturity Date") but not later than June
30, 1996. Interest on each Prime Rate Advance shall be payable monthly on the
last day of each month and upon payment or prepayment in full of the unpaid
principal amount thereof. Interest on each Adjusted LIBOR Rate Advance shall be
payable on the Maturity Date thereof.
5. Each Advance, the date on which it is made, the Maturity Date and
the rate charged thereon, if other than a Prime Rate Advance, and each payment
made on account of the principal thereof shall be noted on the appropriate
schedule attached hereto. The failure of the Bank, however, to record any such
information shall not relieve the Borrower of its obligation to repay such
Advance with interest thereon as applicable. This Note shall be used to record
all Advances and payments of principal made hereunder until it is surrendered to
the Borrower by the Bank and it shall continue to be used even though there may
be periods prior to such surrender when no amount of principal or interest is
owing hereunder.
6. If all or a portion of any Adjusted LIBOR Rate Advance shall not be
paid when due (whether as stated, by acceleration or otherwise), such Advance
shall bear interest for the period from the due date until the Maturity Date of
such Advance at the rate per annum which is equal to 2% above the rate which
would otherwise be applicable hereunder and thereafter until paid in full at the
rate per annum which is equal to 2% above the rate which the Bank would
-2-
<PAGE>
charge the Borrower on such Maturity Date for a Prime Rate Advance. If all or
any portion of any Prime Rate Advance is not paid when due (whether as stated,
by acceleration or otherwise), such Advance shall bear interest from the due
date until paid in full at the rate per annum which is equal to 2% above the
rate which was in effect on the due date.
7. The Borrower may not prepay any adjusted LIBOR Rate Advance without
the prior written consent of the Bank.
8. If any payment in respect of a Prime Rate Advance becomes due and
payable on a day which is not a Business Day, such payment shall be made on, and
interest at the applicable rate shall be payable to, the next succeeding
Business Day. If any payment in respect of an Adjusted LIBOR Rate Advance
becomes due and payable on a day which is not a Working Day, such payment shall
be made on, and interest at the applicable rate shall be payable to, the next
succeeding Working Day, unless such succeeding Working Day shall fall in the
next succeeding calendar month, in which event such payment shall be made on the
next preceding Working Day, and any relevant Interest Period shall be adjusted
accordingly by the Bank.
9. Interest shall be computed on the basis of a 360 day year for actual
days elapsed. Anything in this Note to the contrary notwithstanding, the Bank
shall not be permitted to charge or receive, and the Borrower shall not be
obligated to pay, interest in excess of the maximum rate from time to time
permitted by applicable law; provided, however, if the maximum rate permitted by
law changes, the rate hereunder shall change, without notice to the Borrower, on
the same day the maximum rate permitted by law changes.
10. All payments on account of Prime Rate Advances to be made hereunder
by the Borrower shall be made in immediately available funds at the office of
the Bank located at 7600 Jericho Turnpike, Woodbury, New York 11797 or such
other office as the Bank may designate. All payments on account of Adjusted
LIBOR Rate Advances to be made hereunder by the Borrower shall be made in
immediately available funds at the office of the Bank located at 4 New York
Plaza, New York, New York.
11. If any existing or future applicable law, regulation or directive,
or any change therein or in the interpretation thereof, or compliance by the
Bank with any request (whether or not having the force of law) of any relevant
central bank or other comparable agency, subjects the Bank to any tax of any
kind whatsoever with respect to this Note or changes the basis of taxation of
payments to the Bank of principal, interest or any other amount payable
hereunder (except for changes in the rate of any tax presently imposed on the
Bank) or imposes, modifies or deems applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, or advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of the Bank
which are not otherwise included in the determination of the rate applicable to
Adjusted LIBOR Rate Advances hereunder, or imposes on the Bank any other
condition with respect to the London interbank market or this Note or the loans
evidenced hereby, and the result of any of the
-3-
<PAGE>
foregoing is to increase the cost to the Bank of maintaining advances or credit
hereunder or to reduce any amount receivable in respect thereof, then the
Borrower agrees to pay to the Bank, upon demand, additional amounts which will
compensate the Bank for such increased cost or reduced amount receivable as
determined by the Bank with respect to this Note. The Bank's certificate as to
any additional amounts payable pursuant to the preceding sentence shall be
conclusive as to the amounts due in the absence of manifest error.
12. Notwithstanding anything to the contrary contained elsewhere in
this Note, if any change after the date hereof in any law or regulation or in
the interpretation thereof by any governmental authority charged with the
administration thereof shall make it unlawful (based on the opinion of any
counsel, whether in-house, special or general, for the Bank) for the Bank to
make or maintain any Adjusted LIBOR Rate Advance or to give effect to its
obligations as contemplated hereby with respect to any Adjusted LIBOR Rate
Advance, then, by written notice to the Borrower by the Bank the Bank may
require that all outstanding Adjusted LIBOR Rate Advances made hereunder be
converted to Prime Rate Advances, whereupon all such Adjusted LIBOR Rate
Advances shall be automatically converted to Prime Rate Advances as of the
effective Date of such notice as provided herein for purposes of this paragraph,
a notice to the Borrower by the Bank pursuant to this paragraph shall be
effective, if lawful and if any Adjusted LIBOR Rate Rate Advances shall then be
outstanding, on the last day of the then current Interest Period; otherwise,
such notice shall be effective on the date of receipt by the Borrower.
13. The Borrower agrees to pay all the Bank's costs and out-of-pocket
expenses (including, without limitation, reasonable attorneys' fees) arising in
connection with the enforcement of, and preservation of its rights under, this
Note.
14. The Borrower agrees to indemnify the Bank for, and to hold the Bank
harmless from, any loss or expense which the Bank may sustain or incur,
including any interest payment by the Bank to lenders of funds borrowed by it in
order to make or maintain the loans evidenced hereby, as a consequence of (i)
default by the Borrower in payment of the principal amount of, or interest on,
this Note and (ii) with respect to Adjusted LIBOR Rate Advances, payment by the
Borrower on a day other than the Maturity Date thereof as a result of
acceleration of the obligations hereunder or otherwise. This covenant shall
survive payment of this Note.
15. Upon the occurrence, with respect to the Borrower, or any endorser
or guarantor, of any of the following: default in payment of this Note or any
other obligation of any nature or description to the Bank including, without
limitation any obligations pursuant to the Term Loan Note dated June 6, 1994
made by the Borrower payable to the Bank or pursuant to the terms of that
certain Revolving Credit and Term Loan Agreement among the Borrower, certain of
its subsidiaries and National Westminster Bank USA dated as of June 19, 1991, as
such agreement was amended pursuant to (i) a First Amendment dated as of
November 1, 1991, (ii) a Second Amendment dated as of November 30, 1992, of
which 50% of the indebtedness due thereunder was assigned to the Bank pursuant
to the Second Amendment (collectively, the "Obligations"), (iii) a Third
Amendment dated August 31, 1994, and (iv) a Fourth Amendment
-4-
<PAGE>
dated as of April 26, 1995 (as amended, the "Agreement"); the occurrence of any
material breach of any covenant or provision of any agreement between the Bank
and any of them; calling a meeting of any creditors; filing of a voluntary or
involuntary petition under the Federal Bankruptcy Code which, in the case of an
involuntary petition, is not dismissed, discharged or bonded within 60 days of
the date of such petition; insolvency; failure to pay or remit any tax when
assessed or due unless contested in good faith by appropriate proceedings, for
which adequate reserves are being provided; failing to furnish financial
information or to permit inspection of books or records; making any material
representation to the Bank in obtaining credit; then the Obligations shall be
due and payable immediately without notice or demand.
16. The Bank shall have a continuing lien and/or right of set-off on
deposits (general and special) and credits with the Bank of the Borrower and
every endorser and guarantor, and may apply all or part of same to the
Obligations (whether contingent or unmatured), at any time or times, without
notice. The Bank shall have a continuing lien on all property of the Borrower
and every endorser and guarantor and the proceeds thereof held or received by or
for the Bank for any purpose. Any notice of disposition of property shall be
deemed reasonable if mailed at least five (5) days before such disposition to
the last address of the Borrower or such endorser or guarantor on the Bank's
records. Each of the Borrower and each endorser and guarantor agrees to pay the
costs and expenses (including, without limitation, reasonable attorneys' fees)
of enforcing the Obligations. Each of the Borrower and each maker, endorser and
guarantor waives protest and, in any litigation (whether or not relating to the
Obligations) in which the Bank and any of them shall be adverse parties, waives
the right to interpose any set-off or counterclaim of any nature or description.
Time for payment extended by law shall be included in the computation of
interest.
17. The Borrower hereby irrevocably (a) submits, in any legal
proceeding relating to this Note, to the non-exclusive in personam jurisdiction
of any state or United States court of competent jurisdiction sitting in the
State of New York and agrees to suit being brought in any such court, and (b)
agrees that nothing contained herein shall affect the Bank's right to effect
service of process in any other manner permitted by law; and the Borrower and
the Bank hereby irrevocably waive, in any such legal proceeding, trial by jury.
18. This Note shall be governed by, and construed in accordance with,
the laws of the State of New York.
UNIFORCE SERVICES, INC.
By:/S/ HARRY V. MACCARRONE
--------------------------
Harry V. Maccarrone
Vice President - Finance
-5-
<PAGE>
PRIME RATE ADVANCES
<TABLE>
<CAPTION>
Unpaid
Interest Amount of Principal
Amount of Maturity Rate Per Principal Balance of Notation
DATE ADVANCE DATE ANNUM PAID ADVANCE MADE BY
- ---- ------- ---- ----- ---- ------- -------
<S> <C> <C> <C> <C> <C> <C>
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</TABLE>
-6-
<PAGE>
ADJUSTED LIBOR RATE ADVANCES
<TABLE>
<CAPTION>
Unpaid
Interest Amount of Principal
Amount of Maturity Rate Per Principal Balance of Notation
DATE ADVANCE DATE ANNUM PAID ADVANCE MADE BY
- ---- ------- ---- ----- ---- ------- -------
<S> <C> <C> <C> <C> <C> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNIFORCE'S
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 3,411,953
<SECURITIES> 0
<RECEIVABLES> 35,259,946
<ALLOWANCES> 486,915
<INVENTORY> 0
<CURRENT-ASSETS> 38,782,207
<PP&E> 3,997,560
<DEPRECIATION> 2,250,453
<TOTAL-ASSETS> 45,497,500
<CURRENT-LIABILITIES> 20,670,823
<BONDS> 0
<COMMON> 49,868
0
0
<OTHER-SE> 22,376,809
<TOTAL-LIABILITY-AND-EQUITY> 45,497,500
<SALES> 0
<TOTAL-REVENUES> 62,831,985
<CGS> 0
<TOTAL-COSTS> 60,311,688
<OTHER-EXPENSES> (34,433)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 249,295
<INCOME-PRETAX> 2,305,435
<INCOME-TAX> 874,000
<INCOME-CONTINUING> 1,431,435
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,431,435
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.33
</TABLE>
