SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
----------------------
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 Services, 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.)
415 Crossways Park Drive, Woodbury, NY 11797
- --------------------------------------------------------------------------------
(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. 3,038,543 (as of August 8, 1997).
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.1 FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND OTHER LOAN
DOCUMENTS dated as of June 30, 1997 by and among BRENTWOOD
SERVICE GROUP, INC., a New York corporation, COMPUTER
CONSULTANTS FUNDING & SUPPORT, INC., a New York corporation,
LABFORCE OF AMERICA, INC., a New York corporation, PRO
UNLIMITED, INC., a New York corporation, PROFESSIONAL STAFFING
FUNDING & SUPPORT, INC., a New York corporation, TEMPORARY
HELP INDUSTRY SERVICING COMPANY, INC., a New York corporation,
UNIFORCE INFORMATION SERVICES OF TEXAS, INC., a New York
corporation, UNIFORCE MIS SERVICES OF GEORGIA, INC., a Georgia
corporation, UNIFORCE STAFFING SERVICES, INC., a New York
corporation, HELLER FINANCIAL, INC., a Delaware corporation,
SUMMIT BANK, a New Jersey banking corporation, and each
Guarantor named in the Loan Agreement.
*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, 1997.
12
- --------------
* Previously filed.
<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 20, 1997 UNIFORCE SERVICES, INC.
By: /s/ John Fanning
----------------------------------
John Fanning, Chairman of the Board
and President
By: /s/ Harry V. Maccarrone
------------------------------------
Harry V. Maccarrone, V.P. of Finance,
Principal Financial and Accounting
Officer
13
FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND OTHER LOAN DOCUMENTS
This FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND OTHER LOAN
DOCUMENTS (this "Amendment") is dated as of June 30, 1997 by and among BRENTWOOD
SERVICE GROUP, INC., a New York corporation, COMPUTER CONSULTANTS FUNDING &
SUPPORT, INC., a New York corporation, LABFORCE OF AMERICA, INC., a New York
corporation, PRO UNLIMITED, INC., a New York corporation, PROFESSIONAL STAFFING
FUNDING & SUPPORT, INC., a New York corporation, TEMPORARY HELP INDUSTRY
SERVICING COMPANY, INC., a New York corporation, UNIFORCE INFORMATION SERVICES
OF TEXAS, INC., a New York corporation, UNIFORCE MIS SERVICES OF GEORGIA, INC.,
a Georgia corporation, UNIFORCE STAFFING SERVICES, INC., a New York corporation
(the foregoing, collectively, "Borrowers" and individually, each a "Borrower"),
HELLER FINANCIAL, INC., a Delaware corporation (in its individual capacity,
Heller"), for itself as Lender, and as Agent for Lenders ("Agent"), SUMMIT BANK,
a New Jersey banking corporation, as a Lender, and each Guarantor named in the
Loan Agreement (as hereinafter defined) after giving effect to this Amendment.
RECITALS
WHEREAS, Borrowers, Agent, Lenders and Guarantors are parties
to that certain Loan and Security Agreement dated as of December 8, 1995 (as
from time to time amended, restated, supplemented or otherwise modified, the
"Loan Agreement"; capitalized terms used but not otherwise defined herein having
the definitions provided therefor in the Loan Agreement); and
WHEREAS, the parties hereto desire to amend the Loan Agreement
and certain other Loan Documents on the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, and for other good and valuable
consideration, the parties hereto agree as follows:
1. LIMITED CONSENT. Subject to the terms and conditions set forth in SECTION 5
of this Amendment and notwithstanding the provisions of Section 7.12 of the Loan
Agreement, Agent and Requisite Lenders hereby consent to the establishment of
PrO N.E., INC., a New York corporation ("PrO"), as a wholly-owned Subsidiary of
PrO Unlimited, Inc., and USSI-NE CORP., a New York Corporation ("USSI"), as a
wholly-owned Subsidiary of Uniforce Staffing Services, Inc.
<PAGE>
2. AMENDMENT TO LOAN AGREEMENT AND OTHER LOAN DOCUMENTS.
(a) Subject to the terms and conditions set forth in SECTION 5 of this
Amendment, the Loan Agreement is hereby amended as follows:
(i) The text "(or any amendment of this Agreement)" is
inserted immediately after the text "this Agreement" contained in
clause (a) of the definition of Revolving Loan Commitment set forth in
Section 1.1 of the Loan Agreement.
(ii) The text "(or any amendment of this Agreement)" is
inserted immediately after the text "this Agreement" contained in
clause (a) of the definition of Term Loan Commitment set forth in
Section 1.1 of the Loan Agreement.
(iii) The text of subsection 2.1(A) of the Loan Agreement is
replaced with the following text:
"TERM LOAN. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and
warranties of Holdings and Borrowers herein set forth, each
Lender, severally, agrees to advance to Borrowers, on June 30,
1997, its Pro Rata Share of the Term Loan. After giving effect
to such advances, the Term Loan shall have an initial
aggregate outstanding balance of $6,000,000. The Term Loan
shall be funded in one drawing and shall be a joint and
several obligation of Borrowers. Amounts borrowed under this
SUBSECTION 2.1(A) and repaid may not be reborrowed. The
principal amount of the Term Loan shall be payable in
thirty-six (36) consecutive installments on the first day of
each month of each calendar year, commencing August 1, 1997,
in amount of (i) $166,667 (or such lesser principal amount as
shall then be outstanding) for the first thirty-five of such
installments and (ii) $166,655 (or, if different, the then
remaining balance of the Term Loan) for the final such
installment (each, a "Scheduled Installment")."
(iv) The text "$32,000,000" contained in subsection 2.1(B) of
the Loan Agreement is replaced with the text "$40,000,000".
(v) The first sentence of subsection 2.2(A) of the Loan
Agreement is replaced with the following text:
"The Loans and all other Obligations shall bear interest from
the date such Loans are made or such other Obligations become
due to the date paid at a rate per annum equal to (i)
-2-
<PAGE>
in the case of Base Rate Loans, (a) the Base Rate minus one
quarter of one percent (.25%) with respect to the Revolving
Loan, and (b) the Base Rate with respect to the Term Loan and
(ii) in the case of LIBOR Rate Loans, (a) the LIBOR Rate plus
one and three-quarters of one percent (1.75%) with respect to
the Revolving Loan and (b) the LIBOR Rate plus two percent
(2.00%) with respect to the Term Loan (each, an "Interest
Rate")."
(vi) The text of subsection 2.3(A) of the Loan Agreements is
replaced with the following text:
"CLOSING FEE. Borrowers shall pay to Agent, for the ratable
benefit of the Lenders, on June 30, 1997, a closing fee of
$41,250."
(vii) The text "one-half of one percent (.50%)" contained in
subsection 2.3(B) of the Loan Agreement is replaced with the text
"three-eighths of one percent (.375%)".
(viii) The text of subsection 2.3(E) of the Loan Agreement is
replaced with the following text:
"COLLATERAL MONITORING FEE. On June 30, 1997 and on the
first day of each calendar quarter thereafter, commencing
October 1, 1997, Borrowers shall pay to Agent, for its own
account, a nonrefundable collateral monitoring fee of $6,250."
(ix) The text "December 1, 1998" contained in Section 2.5 of
the Loan Agreement is replaced with the text "June 30, 2000".
(x) The text "$1,250,000" contained in Section 6.4 of the Loan
Agreement is replaced with the text "$1,600,000".
(xi) The text "$1,500,000" contained in clause (c) of Section
7.1 of the Loan Agreement is replaced with the text "$1,800,000".
(xii) The text "$2,500,000" in each place contained in
subclause (i)(y) of subsection 7.6(B)(9) of the Loan Agreement is in
each case replaced with the text $2,000,000".
(b) The Guaranty is hereby amended by including PrO and USSI in the
definition of "Guarantors" contained therein.
-3-
<PAGE>
(c) The Guarantor Security Agreement is hereby amended by including PrO
and USSI in the definition of "Grantors" contained therein.
(d) The Pledge Agreement is hereby amended by (i) including the capital
stock of PrO and USSI in the definition of "Pledged Shares" contained therein
and (ii) including PrO and USSI in the definition of "Subsidiary" contained
therein.
(e) The Loan Documents are hereby amended by inserting into each of the
applicable schedules to the Loan Documents the information contained in the
corresponding supplemental schedules attached hereto.
3. UNDERSTANDINGS.
(a) By its execution and delivery hereof, each of PrO and USSI agrees,
from and after the date hereof, to be a party to the Guaranty, Guarantor
Security Agreement and Loan Agreement and, as such, to assume all of its
obligations under the Loan Documents to which it is a party, and to make and be
bound by all of the representations, warranties, covenants, terms and conditions
of the Guaranty, Guarantor Security Agreement and Loan Agreement as if it were a
direct signatory thereto, all of which representations, warranties, covenants,
terms and conditions are incorporated herein by this reference.
(b) By its execution and delivery hereof, each Person which was a Loan
Party prior to the date hereof hereby reaffirms the validity of its obligations
under the Loan Documents to which it is a party and acknowledges and agrees that
each of PrO and USSI shall hereafter be parties to the Guaranty, Guarantor
Security Agreement and Loan Agreement and shall be bound by the terms and
conditions of each such Loan Document as if each were a direct signatory
thereto.
(c) By its execution and delivery hereof, each Pledgor under the Pledge
Agreement confirms that the capital stock of PrO and USSI shall be subject to
the terms and conditions of the Pledge Agreement.
4. REPRESENTATIONS AND WARRANTIES. The Loan Parties jointly and severally
represent and warrant to Agent and Lenders that the execution, delivery and
performance by each Loan Party of this Amendment are within each such Person's
corporate powers, have been duly authorized by all necessary corporate action
(including, without limitation, all necessary shareholder approval) of each such
Person, have received all necessary governmental approvals, and do not and will
not contravene or conflict with any provision of law applicable to any such
Person, the certificate or articles of incorporation or bylaws of any such
Person, or any order, judgment or decree of any court or other agency of
government or any contractual obligation binding upon any such Person; and this
Amendment, the Loan Agreement, as amended hereby, and each Loan Document is the
-4-
<PAGE>
legal, valid and binding obligation of each Loan Party, as applicable,
enforceable against each such Person in accordance with its terms.
5. CONDITIONS. The effectiveness of the amendments stated in this Amendment is
subject to satisfaction of the following conditions:
(a) On or prior to the date hereof (except as set forth in clause (v)
below), the following conditions shall have been satisfied in a manner, and in
form and substance, as the case may be, reasonable acceptable to Agent:
(i) AMENDMENT. This Amendment shall have been duly executed by
all parties hereto and delivered to Agent.
(ii) NOTES. The Amended Revolving Notes and the Amended Term
Notes shall have been duly executed and delivered to Agent.
(iii) FINANCIAL CONDITION CERTIFICATE. A certificate of the
chief financial officer of Borrower Representative, dated the date
hereof, shall have been duly executed and delivered to Agent, stating
that, after giving effect to the Loans and the other transactions
contemplated by the Loan Agreement, as amended hereby, each Borrower
will remain "solvent" (in accordance with the description of such term
contained in Section 4.16 of the Loan Agreement.
(iv) SECRETARIES CERTIFICATES. A certificate of the Secretary
or an assistant secretary of each Loan Party, dated the date hereof,
shall have been duly executed and delivered to Agent, stating that (i)
the certificate of incorporation and by-laws of such Loan Party, as
most recently delivered to Agent, and are in full force and effect
without modification or amendment (provided that, in the case of PrO
and USSI, such certification shall be with respect to the attached
by-laws and, to the extent state certified versions are unavailable,
attached non-state certified certificates of incorporation of PrO and
USSI), (ii) the names and signatures of the officers of such Loan Party
authorized to execute and deliver the Loan Documents to which such Loan
Party is a party are set forth on such certificate, (iii) the
resolutions of the Board of Directors of such Loan Party authorizing
and approving the execution, delivery and performance of the Loan
Documents to which it is a party are in full force and effect without
modification or amendment and are attached to such certificate and (iv)
each Loan Party is in good standing and qualified to do business in its
state of incorporation, the state in which its principal places of
business is located and in each jurisdiction where the failure of such
Loan Party to be so qualified could reasonably be expected to have a
Material Adverse Effect.
(v) TENNESSEE RECORDING TAX. A UCC-3 financing statement
amending the recording tax information contained in the UCC-1 financing
statement filed in
-5-
<PAGE>
Tennessee as document number 498544 with respect to Brentwood, together
with the related Sworn Statement of Apportionment, shall have been duly
executed and, within three (3) days after the date hereof, properly
filed on behalf of Brentwood, together with payment of all necessary
recording taxes, in the appropriate office in the State of Tennessee.
(vi) LEGAL OPINIONS. A legal opinion of counsel to the Loan
Parties, as well as a legal opinion of special Tennessee counsel to
Brentwood, each dated the date hereof and in substantially the form
previously delivered by such counsel to Agent, shall have been duly
executed and delivered to Agent.
(vii) SCHEDULES. Agent shall have received supplemental
schedules to the Loan Documents containing all information required to
be reflected on the schedules to the Loan Documents in respect of PrO
and USSI (and Brentwood, as indicated below), including, without
limitation, Schedules 4.1(B), 4.6 (as to Brentwood) and 4.7 of the Loan
Agreement, Schedule II of the Guarantor Security Agreement and Schedule
I of the Pledge Agreement.
(viii) PLEDGED SHARES. Original stock certificates
representing all of the issued and outstanding capital stock of PrO and
USSI shall have been duly executed and delivered to Agent, together
with undated stock powers therefor duly endorsed in blank.
(ix) INTELLECTUAL PROPERTY ASSIGNMENTS. To the extent PrO or
USSI maintains any copyrights, patents, trademarks or licenses,
Intellectual Property Assignments with respect thereto shall have been
duly executed and delivered to Agent.
(x) UCC FILINGS. Executed UCC-1 financing statements with
respect to each jurisdiction in which PrO or USSI maintains Collateral,
and with respect to each additional name under which Brentwood is
registered to do business in the State of Tennessee, shall have been
duly executed and delivered to Agent, such that, after the filing
thereof, Agent, on behalf of Lenders, shall have a valid and perfected
first priority security interest in the Collateral purported to be
covered thereby, subject only to permitted encumbrances.
(xi) APPOINTMENT OF AGENT FOR SERVICE. A letter (or letters)
appointing Olshan Grundman Frome and Rosenzweig LLP as agent for
service of process in the State of New York on behalf of the Loan
Parties to and including the Termination Date shall have been duly
executed and delivered to Agent.
(xii) FEES. The Closing Fee and the initial Collateral
Monitoring Fee shall have been delivered to Agent in immediately
available funds.
-6-
<PAGE>
(xiii) OPENING AVAILABILITY. After giving effect to the
consummation of the transactions contemplated hereunder on the date
hereof and the payment by Borrowers of all costs, fees and expenses
relating thereto, the Maximum Revolving Loan Amount on the such date
shall exceed the principal balance of the Revolving Loans plus the
Letter of Credit Reserve by at least $5,000,000.
(xiv) SYNDICATION. On or prior to the date hereof, Lenders
other than Heller shall have Total Loan Commitments of at least
$11,000,000 in the aggregate.
(xv) NO DEFAULT. No Default or Event of Default under the Loan
Agreement, as amended hereby, shall have occurred and be continuing.
(xvi) WARRANTIES AND REPRESENTATIONS. The warranties and
representations of each Loan Party contained in this Amendment, the
Loan Agreement, as amended hereby, and the other Loan Documents shall
be true and correct as of the date hereof, with the same effect as
though made on such date, except to the extent that such warranties and
representations expressly relate to an earlier date, in which case such
warranties and representations shall have been true and correct as of
such earlier date.
(xvii) OTHER DOCUMENTS. Such other documents as Agent may
reasonably request for a secured financing transaction of the nature
contemplated by the Loan Documents.
(b) As soon as possible and, in any event, within ten (10) Business
Days after the date hereof, the following conditions shall have been satisfied
in a manner, and in form and substance, as the case may be, reasonable
acceptable to Agent:
(i) BLOCKED ACCOUNT AGREEMENTS. To the extent PrO or USSI
maintains any depository accounts, Blocked Account Agreements with
respect thereto shall have been duly executed by all parties thereto
and delivered to Agent.
(ii) LANDLORD'S WAIVERS AND CONSENTS. To the extent PrO or
USSI maintains any lease with respect to its principal place of
business or any location of books and records relating to its business,
such Loan Party shall use its best efforts to deliver to Agent a
landlord's waiver and consent duly executed by all applicable parties
with respect to such lease.
(iii) INSURANCE POLICIES AND ENDORSEMENTS. Copies of insurance
policies of PrO and USSI, with duly executed endorsements naming Agent,
on behalf of Lenders, as loss payee on all property and casualty
policies of PrO and USSI and naming Agent and each Lender additional
insured on all liability policies of PrO and USSI, shall have been
delivered to Agent.
-7-
<PAGE>
(iv) CHARTER AND GOOD STANDING. Certified copies of the
certificates of incorporation of PrO and USSI (to the extent not
provided pursuant to subclause (a)(iv) above), together with good
standing certificates from the respective states of incorporation and
the respective states in which the principal places of business of each
such Loan Party is located and from all states where the failure of
such Loan Party to be so qualified could reasonably be expected to have
a Material Adverse Effect, shall have been delivered to Agent.
(v) OTHER DOCUMENTS. Such other documents as Agent may
reasonably request for a secured financing transaction of the nature
contemplated by the Loan Documents.
6. CONTINUING LOANS. Notwithstanding this Amendment, the Loans owing to Lenders
by Borrowers under the Loan Agreement that remain outstanding as of the date
hereof shall constitute continuing Obligations of all Borrowers under the Loan
Agreement and shall continue to be secured by the Collateral, and this Amendment
shall not be deemed to evidence or result in a novation, or repayment and
reborrowing, of such Loans.
7. MISCELLANEOUS.
(a) CAPTIONS. Section captions used in this Amendment are for
convenience only, 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 NEW YORK, WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES. Whenever possible each provision of this Amendment shall be
interpreted in such 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 any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
(d) SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon, and
shall inure to the sole benefit of the Loan Parties, Agent and Lenders, and
their respective successors and assigns; provided that no Loan Party shall be
entitled to assign its rights or obligations hereunder without the prior written
consent of Agent and Lenders.
(e) REFERENCES. Any reference to the Loan Agreement contained in any
notice, request, certificate, or other document executed concurrently with or
after the execution
-8-
<PAGE>
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; instead, it is the express intention of the
parties hereto to reaffirm the Indebtedness created under the Loan Agreement
which is evidenced by the Notes and secured by the Collateral. The Loan
Agreement, as amended hereby, and each of the other Loan Documents shall remain
in full force and effect.
(g) COSTS. EXPENSES AND INDEMNITY. Borrowers affirm and acknowledge
that Section 10.1 and Section 10.2 of the Loan Agreement apply to this Amendment
and the transactions and agreements and documents contemplated hereunder, and
the Loan Parties affirm and acknowledge their obligation to reimburse Agent for
the costs and expenses incurred in connection with lien searches conducted on
behalf of Agent pursuant to this Amendment.
[signature pages follow]
-9-
<PAGE>
IN WITNESS WHEREOF, this Fifth Amendment to Loan and Security Agreement
and Other Loan Documents has been duly executed and delivered as of the day and
year first above written.
BORROWERS:
COMPUTER CONSULTANTS
FUNDING & SUPPORT, INC. LABFORCE OF
AMERICA, INC. PRO UNLIMITED, INC.
PROFESSIONAL STAFFING
FUNDING & SUPPORT, INC.
TEMPORARY HELP INDUSTRY
SERVICING COMPANY, INC.
UNIFORCE INFORMATION SERVICES
OF TEXAS, INC.
UNIFORCE MIS SERVICES OF GEORGIA, INC.
UNIFORCE STAFFING SERVICES, INC.
By:
Title: Vice President
BRENTWOOD SERVICE GROUP, INC.
By:
Title: President
GUARANTORS:
BRANNON & TULLY, INC.
E.O. OPERATIONS CORP.
E.O. SERVICING CO., INC.
PRO N.E., INC.
STAFFING INDUSTRY FUNDING &
SUPPORT, INC.
TEMPFUNDS INTERNATIONAL, INC.
THISCO OF CANADA, INC.
UNIFORCE INFORMATION SERVICES, INC.
UNIFORCE MEDICAL OFFICE SUPPORT, INC.
UNIFORCE PAYROLLING SERVICES, INC.
UNIFORCE SERVICES, INC.
-10-
<PAGE>
USI, INC. OF CALIFORNIA
USSI-NE CORP.
UTS OF DELAWARE, INC.
UTS CORP. OF MINNESOTA
By:
Title: Vice President
HELLER FINANCIAL, INC., as Agent and a Lender
By:
Title: Senior Vice President
Revolving Loan Commitment:
$28,509,880
Term Loan Commitment:
S 4,276,482
SUMMIT BANK, as a Lender
By:
Title: Vice President
Revolving Loan Commitment:
$11,490,120
Term Loan Commitment:
$ 1,723,518
[signature pages end]
-11-
