GUARANTY
Exhibit-10.6
EXECUTION
VERSION
This Guaranty (this “Guaranty”) is dated as of June 15, 2006 by COMSYS IT CANADA, INC., a
North Carolina corporation, formerly known as VTP-CA, Inc. (“COMSYS Canada”; COMSYS Canada together
with each other Person who becomes a party to this Agreement by execution of a joinder in the form
of Exhibit A attached hereto are sometimes referred to hereinafter individually as a “Guarantor”
and collectively as the “Guarantors”) in favor of NEXBANK, SSB, a Texas-Chartered Bank, in its
capacity as Collateral Agent under the Credit Agreement described below (the “Collateral Agent”),
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc.
(“Administrative Agent; Administrative Agent and Collateral Agent are sometimes hereinafter
referred to individually as an “Agent” and together as the “Agents”).
I. RECITALS
Reference is made to that certain Term Loan Credit Agreement dated as of December 14, 2005 (as
the same may be amended, restated, modified or supplemented and in effect from time to time, the
"Credit Agreement”) by and among COMSYS Services LLC, a Delaware limited liability company (“COMSYS
Services”), Pure Solutions, Inc., a California corporation (“Pure Solutions”), COMSYS Information
Technology Services, Inc., a Delaware corporation (“COMSYS IT”; COMSYS IT together with COMSYS
Services and Pure Solutions are sometimes referred to herein individually as a “Borrower” and
collectively as the “Borrowers”), each other Credit Party (as such term is defined therein), COMSYS
Services, in its capacity as borrowing agent and funds administrator for the Borrowers, the Lenders
from time to time party thereto, the Collateral Agent and the Administrative Agent. As one of the
conditions to the making of the Second Lien Term Loan (the “Loans”) available to Borrowers under
the Credit Agreement, the Lenders have required that each Guarantor guarantee the obligations of
the Borrowers to Agent and the Lenders. Capitalized terms used and not otherwise defined herein
shall have the respective meanings provided for in the Credit Agreement.
II. GUARANTY
Therefore, for value received, and in consideration of any loan, advance or financial
accommodation of any kind whatsoever heretofore, now or hereafter made, given or granted to the
Borrowers by either Agent or any Lender, each Guarantor hereby unconditionally guarantees the full
and prompt payment when due, whether at maturity or earlier, by reason of acceleration or
otherwise, and at all times thereafter, of all of the Obligations. Without limiting the foregoing,
the Obligations guaranteed hereby include all fees, costs and expenses (including attorneys’ fees
and expenses) incurred by either Agent or any Lender in attempting to collect any amount due under
this Guaranty or in prosecuting any action against any Borrower, any Guarantor or any other
guarantor of all or part of the Obligations and all interest, fees, costs and expenses owing to
either Agent or any Lender after the commencement of bankruptcy proceedings with respect to any
Borrower, any Guarantor or any other guarantor of all or part of the Obligations (whether or not
the same may be collected while such proceedings are pending).
Each Guarantor hereby agrees that this Guaranty is a present and continuing guaranty of
payment and not of collection and that its obligations hereunder shall be unconditional,
irrespective of (i) the validity or enforceability of the Obligations or any part thereof, or of
any of the Financing Documents, (ii) the waiver or consent by either Agent or any Lender with
respect to any provision of any Financing Document, or any amendment, modification or other change
with respect to any Financing Document, (iii) any merger or consolidation of any Borrower, any
Guarantor or any other guarantor of all or part of the Obligations into or with any Person or any
change in the ownership of the equity of any Borrower, any Guarantor or any other guarantor of all
or part of the Obligations, (iv) any dissolution of any Guarantor or any insolvency, bankruptcy,
liquidation, reorganization or similar proceedings with respect to any Borrower, any Guarantor or
any other guarantor of all or part of the Obligations, (v) any action or inaction on the part of
either Agent or any Lender, including without limitation the absence of any attempt to collect the
Obligations from any Borrower, any Guarantor or any other guarantor of all or part of the
Obligations or other action to enforce the same or the failure by either Agent to take any steps to
perfect and maintain the Collateral Agent’s Lien on, or to preserve its rights to, any security or
collateral for the Obligations, (vi) either Agent’s election, in any proceeding instituted under
Chapter 11 of Title 11 of the United States Code (11 U.S.C. Section 101 et seq.), as amended (the
“Bankruptcy Code”) of the application of Section 1111(b)(2) of the Bankruptcy Code, (vii) any
borrowing or grant of a Lien by any Borrower, any Guarantor or any other guarantor of all or part
of the Obligations, as debtor-in-possession, under Section 364 of the Bankruptcy Code, (viii) the
disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of either Agent’s or
any Lender’s claims for repayment of the Obligations, (ix) either Agent’s or any Lender’s inability
to enforce the Obligations of any Borrower as a result of the automatic stay provisions under
Section 362 of the Bankruptcy Code, (x) the discharge or release by either Agent and/or Lenders of
any Guarantor’s obligations and liabilities under this Guaranty, (xi) the discharge or release by
either Agent and/or Lenders of any other guarantor’s obligations and liabilities under any guaranty
or (xii) any other circumstance which might otherwise constitute a legal or equitable discharge or
defense of any Borrower, any Guarantor or any other guarantor of all or part of the Obligations
other than a defense of payment and performance in full in cash of all Obligations.
Notwithstanding any provision of this Guaranty to the contrary, it is intended that this
Guaranty, and any Liens granted by any Guarantor to secure the obligations and liabilities arising
pursuant to this Guaranty, not constitute a “Fraudulent Conveyance” (as defined below).
Consequently, each Guarantor agrees that if this Guaranty, or any Liens securing the obligations
and liabilities arising pursuant to this Guaranty, would, but for the application of this sentence,
constitute a Fraudulent Conveyance, this Guaranty and each such Lien shall be valid and enforceable
only to the maximum extent that would not cause this Guaranty or such Lien to constitute a
Fraudulent Conveyance, and this Guaranty shall automatically be deemed to have been amended
accordingly at all relevant times. For purposes hereof, “Fraudulent Conveyance” means a fraudulent
conveyance or fraudulent transfer under Section 548 of the Bankruptcy Code or a fraudulent
conveyance or fraudulent transfer under the provisions of any applicable fraudulent conveyance or
fraudulent transfer law or similar law of any state, nation or other governmental unit, as in
effect from time to time.
No payment made by or for the account or benefit of any Guarantor (including, without
limitation, (i) a payment made by any Borrower in respect of the Obligations, (ii) a payment made
by any Person under any other guaranty of the Obligations or (iii) a payment made by
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means of set-off or other application of funds by either Agent or any Lender) pursuant to this
Guaranty shall entitle any Guarantor, by subrogation or otherwise, to any payment by any Borrower
or from or out of any property of any Borrower, and no Guarantor shall exercise any right or remedy
against any Borrower or any property of any Borrower including, without limitation, any right of
contribution or reimbursement by reason of any performance by any Guarantor under this Guaranty,
until the Obligations have been indefeasibly paid in full in cash and the Credit Agreement has been
terminated; provided that, any of the foregoing to the contrary notwithstanding, effective upon any
sale, registration, assignment or transfer of or foreclosure on, or any other disposition or
remedial action in respect of, any equity interests of any Borrower or any other Subsidiary of any
Guarantor or any Borrower by either Agent or Lenders pursuant to the Financing Documents and/or
applicable law, all such rights and claims of subrogation, contribution, exoneration, reimbursement
and enforcement against the Borrowers and their Subsidiaries shall be, and hereby are, forever
extinguished and indefeasibly waived and released by each Guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with
a court in the event of any bankruptcy proceeding (or other insolvency proceeding) of any Borrower,
protest or notice with respect to the Obligations and all demands whatsoever, and covenants that
this Guaranty will not be discharged, except by complete and irrevocable payment and performance of
the obligations and liabilities contained herein. No notice to the Guarantors or any other party
shall be required for either Agent, on behalf of the Agents or any Lender, to make demand
hereunder. Such demand shall constitute a mature and liquidated claim against Guarantors. Upon
the occurrence and during the continuance of any Event of Default, either Agent may, at its sole
election, proceed directly and at once, without notice, against any Guarantor to collect and
recover the full amount or any portion of the Obligations, without first proceeding against any
Borrower, any other Guarantor, any other guarantor of the Obligations, or any other Person or any
security or collateral for the Obligations. The Administrative Agent shall have the exclusive
right to determine the application of payments and credits, if any, from any Guarantor, any
Borrower, any other Person, or any security or collateral for the Obligations, on account of the
Obligations or of any other liability of any Guarantor to the Agents and Lenders arising hereunder.
The Agents and Lenders are hereby authorized, without notice or demand to any Guarantor and
without affecting or impairing the liability of any Guarantor hereunder, to, from time to time, (i)
renew, extend, accelerate or otherwise change the time for payment of, or other terms relating to,
the Obligations or otherwise modify, amend or change the terms of any Financing Document, (ii)
accept partial payments on the Obligations, (iii) take and hold collateral for the payment of the
Obligations, or for the payment of this Guaranty, or for the payment of any other guaranties of the
Obligations or other liabilities of any Borrower, and exchange, enforce, waive and release any such
collateral, (iv) apply such collateral and direct the order or manner of sale thereof as in their
sole discretion they may determine and (v) settle, release, compromise, collect or otherwise
liquidate the Obligations and any collateral therefor in any manner.
At any time after maturity of the Obligations, the Agents and Lenders may, in their sole
discretion, without notice to any Guarantor and regardless of the acceptance of any collateral for
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the payment hereof, appropriate and apply toward payment of the Obligations (i) any indebtedness
due or to become due from either Agent or any Lender to any Guarantor and (ii) any moneys, credits
or other property belonging to any Guarantor at any time held by or coming into the possession of
either Agent or any Lender or any Affiliates thereof, whether for deposit or otherwise.
Each Guarantor hereby assumes responsibility for keeping itself informed of the financial
condition of each Borrower, and any and all endorsers and other guarantors of all or any part of
the Obligations and of all other circumstances bearing upon the risk of nonpayment of the
Obligations or any part thereof that diligent inquiry would reveal, and each Guarantor hereby
agrees that no Agent nor any Lender shall have any duty to advise any Guarantor of information
known to such Agent or Lender regarding such condition or any such circumstances. Each Guarantor
hereby acknowledges familiarity with each Borrower’s financial condition and that it has not relied
on any statements by either Agent or any Lender in obtaining such information. In the event either
Agent or any Lender, in its sole discretion, undertakes at any time or from time to time to provide
any such information to any Guarantor, no Agent nor any Lender shall be under any obligation (i) to
undertake any investigation with respect thereto, (ii) to disclose any information which, pursuant
to accepted or reasonable commercial finance practices, such Agent or such Lender wishes to
maintain confidential or (iii) to make any other or future disclosures of such information, or any
other information, to such Guarantor.
Each Guarantor consents and agrees that no Agent nor any Lender shall be under any obligation
to marshal any assets in favor of any Guarantor or against or in payment of any or all of the
Obligations. Each Guarantor further agrees that, to the extent that any Borrower makes a payment
or payments to either Agent or any Lender, or either Agent or any Lender receives any proceeds of
Collateral, which payment or payments or any part thereof are subsequently invalidated, declared to
be fraudulent or preferential, set aside or required to be repaid to any Borrower, its estate,
trustee, receiver or any other party, including without limitation any Guarantor, under any
bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such
payment or repayment, the Obligations or the part thereof which has been paid, reduced or satisfied
by such amount shall be reinstated and continued in full force and effect as of the date such
initial payment, reduction or satisfaction occurred, and this Guaranty shall continue to be in
existence and in full force and effect, irrespective of whether any evidence of indebtedness has
been surrendered or cancelled.
Each Guarantor also waives all set-offs and counterclaims and all presentments, demands for
performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices
of acceleration, notices of intent to accelerate and notices of acceptance of this Guaranty. Each
Guarantor further waives all notices of the existence, creation or incurring of new or additional
indebtedness, arising either from additional loans extended to any Borrower or otherwise, and also
waives all notices that the principal amount, or any portion thereof, or any interest under or on
any Financing Document is due, notices of any and all proceedings to collect from the maker, any
endorser or any other guarantor of all or any part of the Obligations, or from anyone else, and, to
the extent permitted by law, notices of exchange, sale, surrender or other handling of any security
or collateral given to the Collateral Agent to secure payment of the Obligations.
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III. REPRESENTATIONS AND WARRANTIES
Each Guarantor hereby represents and warrants to the Agents and Lenders that (i) it is duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
organization, (ii) the execution, delivery and performance by such Guarantor of this Guaranty and
the other Financing Documents to which it is a party are within its powers, have been duly
authorized by all necessary action pursuant to its Organizational Documents, require no further
action by or in respect of, or filing with, any governmental body, agency or official (other than
(a) routine corporate, tax, ERISA, intellectual property, environmental filings and other filings
from time to time necessary in connection with the conduct of such Guarantor’s business in the
ordinary course, and (b) recordings and filings in connection with the Liens granted to the
Collateral Agent under the Financing Documents) and do not violate, conflict with or cause a breach
or a default under any provision of applicable law or regulation, any of its Organizational
Documents or any agreement, judgment, injunction, order, decree or other instrument binding upon
it, except for such violations, conflicts, breaches or defaults as could not reasonably be expected
to have a Material Adverse Effect, and (iii) this Guaranty, and each other Financing Document to
which it is a party, constitutes a valid and binding agreement or instrument of such Guarantor,
enforceable against such Guarantor in accordance with its respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other similar laws relating to
the enforcement of creditors’ rights generally and by general equitable principles.
IV. MISCELLANEOUS
No delay on the part of either Agent in the exercise of any right or remedy shall operate as a
waiver thereof, and no single or partial exercise by either Agent of any right or remedy shall
preclude any further exercise thereof; nor shall any modification or waiver of any of the
provisions of this Guaranty be binding upon either Agent or Lenders, except as expressly set forth
in a writing duly signed and delivered on the Agents’ behalf by an authorized officer or agent of
the Agents. The Agents’ or any Lender’s failure at any time or times hereafter to require strict
performance by Borrowers or Guarantors of any of the provisions, warranties, terms and conditions
contained in this Guaranty shall not waive, affect or diminish any right of either Agent and
Lenders at any time or times hereafter to demand strict performance thereof and such right shall
not be deemed to have been waived by any act or knowledge of either Agent or any Lender, or its
respective agents, officers or employees, unless such waiver is contained in an instrument in
writing signed by an officer or agent of the Administrative Agent, and directed to Borrowers or
Guarantors, as applicable, specifying such waiver. No failure or delay by either Agent or any
Lender in exercising any right, power or privilege under this Guaranty shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies provided by law. The
obligations of each Guarantor under this Guaranty are secured by, among other things, that certain
Security Agreement dated of even date herewith by and among the Guarantors and the Collateral
Agent.
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This Guaranty shall be binding upon each Guarantor and its successors and assigns and shall
inure to the benefit of each Agent and Lenders and their respective successors and assigns, except
that no Guarantor may assign its obligations hereunder without the written consent of the
Administrative Agent.
All notices, approvals, requests, demands and other communications hereunder shall be given
and deemed effective in accordance with the notice provision of the Credit Agreement;
provided, that such notices shall be given to each Guarantor at its address or facsimile
number set forth on the signature pages hereof.
THIS GUARANTY SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. EACH AGENT AND EACH
GUARANTOR HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
COUNTY OF ▇▇▇▇, STATE OF ILLINOIS AND IRREVOCABLY AGREE THAT, SUBJECT TO THE ADMINISTRATIVE AGENT’S
ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS GUARANTY SHALL BE LITIGATED
IN SUCH COURTS. EACH AGENT AND EACH GUARANTOR EXPRESSLY SUBMIT AND CONSENT TO THE JURISDICTION OF
THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENS. EACH AGENT AND EACH GUARANTOR
HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREE THAT ALL SUCH SERVICE OF PROCESS MAY
BE MADE UPON SUCH PARTY BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
SUCH PARTY IN ACCORDANCE WITH THE PROVISIONS OF THE IMMEDIATE PRECEDING PARAGRAPH HEREOF AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
EACH GUARANTOR AND EACH AGENT HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
This Guaranty may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same instrument.
In addition to and without limitation of any of the foregoing, this Guaranty shall be deemed
to be a Financing Document and shall otherwise be subject to all of general terms and conditions
contained in Article XII of the Credit Agreement, mutatis mutandi.
Administrative Agent, Collateral Agent, Lenders, First Lien Agent, Borrowers and the
Guarantors have entered into that certain Intercreditor and Lien Subordination Agreement date as
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of December 14, 2005 (as the same may be amended from time to time pursuant to the terms
thereof, the “Second Lien Intercreditor Agreement”). To the extent any provision of this Guaranty
conflicts with the Second Lien Intercreditor Agreement, the Second Lien Intercreditor Agreement
shall control.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
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EXECUTION
VERSION
IN WITNESS WHEREOF, this Guaranty has been duly executed as of the date first written
above.
| GUARANTOR: | ||||
| COMSYS IT CANADA, INC., a North Carolina corporation, formerly known as VTP-CA, Inc. | ||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Name: | ▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Title: | Senior Vice President — Corporate Development | |||
| AGENTS: | ||||
| ▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc., as Administrative Agent | ||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Name: | ▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Title: | Vice President | |||
| NEXBANK, SSB, a Texas-chartered savings bank, as Collateral Agent |
||||
| By: | /s/ ▇▇▇▇ ▇▇▇ | |||
| Name: | ▇▇▇▇ ▇▇▇ | |||
| Title: | Vice President | |||
Guaranty (Second Lien)
EXECUTION
VERSION
Exhibit A
Form of Joinder to Guaranty
Joinder to Guaranty
The undersigned, , for consideration received, including its affiliation with
COMSYS IT Holdings, Inc. and its Subsidiaries (and the support and benefits therefrom), hereby
joins in the execution of that certain Guaranty dated as of June 15, 2006 (as amended, restated,
supplemented or otherwise modified and in effect from time to time, the “Guaranty”) made by COMSYS
IT Canada, Inc., a North Carolina corporation, and each of the other Persons signatories thereto as
Guarantors and each other Person that becomes a Guarantor under the Guaranty after the date and
pursuant to the terms thereof, to and in favor of NEXBANK, SSB, a Texas-chartered savings Bank, as
Collateral Agent, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial
Services Inc., as Administrative Agent. By executing this Joinder, the undersigned hereby agrees
that it is a Guarantor thereunder with the same force and effect as if originally named therein as
a Guarantor. The undersigned agrees to be bound by all of the terms and provisions of the
Guaranty, which are incorporated herein by reference as fully as though set forth herein verbatim,
and represents and warrants that the representations and warranties set forth in the Guaranty are,
with respect to the undersigned, true and correct as of the date hereof. Each reference to a
Guarantor in the Guaranty shall be deemed to include the undersigned.
IN WITNESS WHEREOF, the undersigned has executed this Joinder this ___day of
.
| By: | ||||
| Name: | ||||
| Title: | ||||
Guaranty (Second Lien)