Debt

In January 2016, the Company amended its $150.0 million Financing Program with PNC to (1) extend the termination date to January 31, 2017; (2) eliminate the interest coverage ratio and modify the liquidity level requirement; (3) reduce the minimum funding threshold, as defined, from 60% to 40%; and (4) revise pricing from a LIBOR based rate plus 1.75% per the prior agreement, to a LIBOR based rate plus 1.90% on outstanding borrowings, and to increase the facility fee from 0.65% to 0.70%. The Financing Program is secured by receivables from certain Staffing Services businesses in the United States, Europe and Canada that are sold to a wholly-owned, consolidated, bankruptcy remote subsidiary. The bankruptcy remote subsidiary's sole business consists of the purchase of the receivables and subsequent granting of a security interest to PNC under the program, and its assets are available first to satisfy obligations to PNC and are not available to pay creditors of the Company's other legal entities. Borrowing capacity under the Financing Program is directly impacted by the level of accounts receivable. At October 30, 2016, the accounts receivable borrowing base was $160.5 million.

The Financing Program provides for a minimum liquidity covenant which is measured weekly and is calculated as the sum of cash in banks and undrawn amounts under the program. The liquidity covenant level was set at $20.0 million at the origination of the Financing Program in July 2015. Under three subsequent amendments to the program from January 2016 to July 2016, the minimum liquidity level was increased to a maximum of $50.0 million based on specific liquidity events. In September 2016, the Company amended the Financing Program to increase the facility limit from $150.0 million to $160.0 million under the expandable accordion feature in the program. The Company entered into this amendment to utilize the additional borrowing base provided by the current and potential growth in eligible accounts receivable balances. Under the amendment to the program dated October 28, 2016, the required minimum liquidity level is $35.0 million through the earlier of: 1) the date of the sale of the Company's subsidiary, Maintech Incorporated, at which time the minimum liquidity level increases to $40.0 million and 2) the expiration of the Financing Program on January 31, 2017. In addition, this amendment adds a negative covenant prohibiting share buybacks or dividends by the Company through January 31, 2017.

In addition to customary representations, warranties and affirmative and negative covenants, the program is subject to termination under standard events of default including change of control, failure to pay principal or interest, breach of the liquidity covenant, triggering of portfolio ratio limits, or other material adverse events as defined. At October 30, 2016, the Company was in compliance with all debt covenant requirements.

The Financing Program has a feature under which the facility limit can be increased up to $250.0 million subject to credit approval from PNC. Borrowings are priced based upon a fixed program rate plus the daily adjusted one-month LIBOR index, as defined. The program also contains a revolving credit provision under which proceeds can be drawn for a definitive tranche period of 30, 60, 90 or 180 days priced at the adjusted LIBOR index rate in effect for that period. In addition to United States dollars, drawings can be denominated in Canadian dollars, subject to a Canadian dollar $30.0 million limit, and British Pounds Sterling, subject to a £20.0 million limit. The program also includes a letter of credit sublimit of $50.0 million and minimum borrowing requirements. As of October 30, 2016, there were no foreign currency denominated borrowings, and the letter of credit participation was $31.0 million inclusive of $28.9 million for the Company's casualty insurance program and $2.1 million for the security deposit required under the Orange facility lease agreement.

At October 30, 2016 and November 1, 2015, the Company had outstanding borrowings under this program of $95.0 million and $100.0 million, respectively, and bore a weighted average annual interest rate of 2.3% and 1.8% in fiscal 2016 and 2015, respectively, which is inclusive of certain facility fees. At October 30, 2016, there was $34.0 million additional availability under this program, exclusive of the potential availability under the aforementioned accordion feature.

In February 2016, the Company's information technology infrastructure business, as borrower, entered into a $10.0 million 364-day secured revolving credit agreement with Bank of America, N.A. The credit agreement provides for revolving loans as well as a $0.1 million sub-line for letters of credit and is subject to borrowing base and availability restrictions and requirements. The credit agreement is secured by assets of the borrower, including accounts receivable, and the Company has guaranteed the obligations of the borrower under the agreement not to exceed $3.0 million. The credit agreement contains certain customary representations and warranties, events of default and affirmative and negative covenants, including a minimum interest requirement based on $2.0 million drawn. At October 30, 2016, the amount outstanding was $2.1 million with $3.3 million of additional availability. When a Maintech sale occurs, the then outstanding balance is required to be satisfied.

The borrower may optionally terminate the credit agreement and repay the borrowings prior to the expiration date, without premium or penalty at any time by the delivery of a notice to that effect as provided under the credit agreement. It is anticipated that the credit agreement will be terminated before a sale of the borrower. Borrowings will be used for working capital and general corporate purposes. Interest under the credit agreement is one month LIBOR plus 2.75% on drawn amounts and a fixed rate of 0.375% on undrawn amounts.

Term Loan

At November 1, 2015, the Company had $7.3 million outstanding under a twenty-year fully amortizing loan that would have matured on October 1, 2021, secured by a deed of trust on certain land and buildings, which bore interest at 8.2% per annum and required principal and interest payments of $0.4 million per quarter.

In February 2016, Volt Orangeca Real Estate Corp., an indirect wholly-owned subsidiary of the Company, entered into a PSA for the sale of real property comprised of land and buildings with office space of approximately 191,000 square feet in Orange, California (the “Property”) for a purchase price of $35.9 million. The transaction closed in March 2016 with terms consistent with the PSA and the term loan on the Property was repaid. At November 1, 2015, the Company had $7.3 million of a long-term term loan on this Property, of which $1.0 million was current at the period end date.

Long-term debt consists of the following (in thousands):



	October 30, 2016		November 1, 2015
Financing program	$	97,050	$	100,000
8.2% term loan	—		7,295
Total debt	97,050		107,295
Less: amounts due within one year	2,050		982
Total long-term debt	$	95,000	$	106,313