10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

x                         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 3, 2005

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 000-27792

COMSYS IT PARTNERS, INC.

(Exact name of Registrant as specified in its charter)

Delaware	7363	56-1930691
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code number)	(I.R.S. employer identification number)

4400 Post Oak Parkway, Suite 1800

Houston, TX 77027

(Address, including zip code, of

Registrant’s principal executive offices)

(713) 386-1400

(Registrant’s telephone number, including area code)

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 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 [    ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes [    ] No [ X ]

As of May 5, 2005, 15,540,155 shares of the registrant’s Common Stock, $.01 par value, were outstanding.

COMSYS IT PARTNERS, INC.

TABLE OF CONTENTS

		Page
Item 1.	Financial Statements
	Unaudited Consolidated Statements of Operations for the Three Months Ended April 3, 2005 and March 31, 2004	3
	Unaudited Consolidated Balance Sheets as of April 3, 2005 and January 2, 2005	4
	Unaudited Consolidated Statements of Cash Flows for the Three Months Ended April 3, 2005 and March 31, 2004	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22
PART II — OTHER INFORMATION
		Page
Item 5.	Other Information	23
Item 6.	Exhibits	23
Signatures		25
Index to Exhibits		26

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PART I – FINANCIAL INFORMATION

ITEM 1.             FINANCIAL STATE MENTS

COMSYS IT Partners, Inc. and Subsidiaries

Unaudited Consolidated Statements of Operations

For the Three Months Ended April 3, 2005 and March 31, 2004

(in thousands, except per share data)

	Three months ended
	April 3, 2005			March 31, 2004
Revenues from services	$	164,953		$	88,858
Cost of services		127,366			68,003
Gross profit		37,587			20,855
Operating expenses:
Selling, general and administrative		27,518			16,640
Restructuring and integration costs		3,428			—
Stock based compensation expense		437			—
Depreciation and amortization		2,471			3,984
		33,854			20,624
Operating income		3,733			231
Interest expense		4,026			15,249
Other income, net		(87	)		—
Loss before income taxes		(206	)		(15,018	)
Income tax expense		—			—
Net loss	$	(206	)	$	(15,018	)
Basic and diluted loss per common share	$	(0.01	)	$	(6,155.41	)
Weighted average basic and diluted shares outstanding		15,332			2.4

The accompanying notes are an integral part of these statements.

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COMSYS IT Partners, Inc. and Subsidiaries

Unaudited Consolidated Balance Sheets

At April 3, 2005 and January 2, 2005

(in thousands, except shares and par value)

	April 3, 2005			January 2, 2005
Assets
Current assets:
Accounts receivable, net of allowance of $3,739 and $3,195, respectively	$	144,918		$	131,445
Restricted cash		2,500			2,500
Prepaid expenses and other		5,529			6,858
Total current assets		152,947			140,803
Fixed assets, net		14,454			14,076
Goodwill		153,731			153,677
Other intangible assets, net		6,662			7,137
Deferred financing costs, net		4,971			5,207
Other		913			601
Total assets	$	333,678		$	321,501
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	76,278		$	62,938
Accrued payroll and related taxes		24,232			35,405
Other		14,842			14,510
Interest payable		1,334			1,363
Current maturities of long-term debt		7,500			7,500
Total current liabilities		124,186			121,716
Senior credit facility		70,917			62,623
Second lien term loan		70,000			70,000
Mandatorily redeemable preferred stock		24,156			23,314
Other noncurrent liabilities		7,694			7,823
Total liabilities		296,953			285,476
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $.01; 95,000,000 shares authorized and 15,532,155 and 15,515,155 shares outstanding at April 3, 2005 and January 2, 2005, respectively		155			155
Common stock warrant		5,361			5,361
Deferred stock compensation		(3,061	)		(3,499	)
Additional paid-in capital		168,391			168,242
Accumulated other comprehensive income		319			—
Accumulated deficit		(134,440	)		(134,234	)
Total stockholders’ equity		36,725			36,025
Total liabilities and stockholders’ equity	$	333,678		$	321,501

The accompanying notes are an integral part of these balance sheets.

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COMSYS IT Partners, Inc. and Subsidiaries

Unaudited Consolidated Statements of Cash Flows

For the Three Months Ended April 3, 2005 and March 31, 2004

(in thousands)

	Three months ended
	April 3, 2005			March 31, 2004
Cash flows from operating activities
Net loss	$	(206	)	$	(15,018	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,471			3,984
Provision for doubtful accounts		651			68
Stock based compensation		437			—
Loss on asset disposal		—			43
Amortization of deferred financing costs		275			474
Noncash interest expense, net		842			10,989
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable		(14,124	)		(7,518	)
Prepaid expenses and other current assets		1,329			(25	)
Accounts payable		13,211			1,970
Accrued payroll and related taxes		(11,173	)		2,039
Other liabilities		2			2,419
Net cash used in operating activities		(6,285	)		(575	)
Cash flows from investing activities
Capital expenditures		(1,984	)		(559	)
Cash paid for acquisitions		(51	)		—
Cash paid for other noncurrent assets		(84	)		(1	)
Net cash used in investing activities		(2,119	)		(560	)
Cash flows from financing activities
Proceeds from long-term debt, net		10,169			53,550
Repayments of long-term debt		(1,875	)		(51,906	)
Exercise of stock options		149			—
Advances to stockholders		—			(355	)
Cash paid for financing costs		(39	)		(154	)
Net cash provided by financing activities		8,404			1,135
Net increase in cash		—			—
Cash, beginning of period		—			—
Cash, end of period	$	—		$	—
Supplemental cash flow information
Interest paid	$	2,919		$	1,219

The accompanying notes are an integral part of these statements.

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COMSYS IT Partners, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(1) General

The unaudited consolidated financial statements included herein have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and footnotes required by U.S. generally accepted accounting principles; however, they do include all adjustments of a normal recurring nature that, in the opinion of management, are necessary to present fairly the results of operations of COMSYS IT Partners, Inc. and its subsidiaries (collectively, the “Company”) for the interim periods presented. These interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended January 2, 2005. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the entire year.

On September 30, 2004, COMSYS Holding, Inc. (“COMSYS Holding”) completed a merger transaction with Venturi Partners, Inc. (“Venturi”), a publicly traded IT and commercial staffing company, in which COMSYS Holding merged with a subsidiary of Venturi (the “merger”). At the effective time of the merger, Venturi changed its name to COMSYS IT Partners, Inc. and issued new shares of its common stock to stockholders of COMSYS Holding, resulting in former COMSYS Holding stockholders owning approximately 55.4% of Venturi’s outstanding common stock on a fully diluted basis. Also on September 30, 2004, Venturi sold its commercial staffing business.

Accounting principles generally accepted in the United States of America require that one of the two companies in the transaction be designated as the acquirer for accounting purposes. Because former COMSYS Holding stockholders now own a majority of the outstanding common stock as a result of the merger, COMSYS Holding is deemed the acquiring company for accounting and financial reporting purposes. A majority of the initial board of directors of the Company are COMSYS Holding designees, and most members of management are former COMSYS Holding employees. References to “Old COMSYS” refer to COMSYS Holding and its consolidated subsidiaries prior to the merger, and references to “COMSYS” or “the Company” refer to COMSYS IT Partners, Inc. and its consolidated subsidiaries after the merger. References to “Venturi” refer to Venturi and its consolidated subsidiaries prior to the merger.

The financial results included in this report include only the historical results of Old COMSYS for the three months ended March 31, 2004. Financial results for the three months ended April 3, 2005 include the combined operations of Old COMSYS and Venturi. Following the merger, COMSYS adopted the fiscal accounting periods of Venturi. As a result, the Company’s fiscal year ends on the Sunday closest to December 31^st and its first three fiscal quarters are each equal to 13 calendar weeks (ending on a Sunday). Prior to the merger, Old COMSYS’ fiscal quarters were consistent with calendar quarters and its fiscal year-end was December 31^st.

All references to common stock, share and per share amounts have been retroactively restated to reflect the exchange ratio of .0001 of a share of COMSYS common stock for each share of COMSYS Holding common stock outstanding immediately prior to the merger as if the exchange had taken place as of the beginning of the earliest period presented.

(2) Restructuring and Other Charges

In connection with the merger in 2004, the Company recorded reserves amounting to $17.2 million for severance payouts and the costs to exit duplicate office space. Of this amount, $12.5 million was related to the termination of Venturi employees and leases and was included in the purchase price allocation in accordance with Emerging Issues Task Force Issue No. 95-3, and $4.7 million was related primarily to terminated employees and leases of Old COMSYS and was charged to integration and restructuring expense in 2004. At April 3, 2005, $8.3 million remained of the reserves.

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Following is a summary of the liability for integration and restructuring costs for the three months ended April 3, 2005 (in thousands):

	Employee severance			Lease costs			Professional fees			Total
Balance, January 2, 2005	$	2,119		$	7,986		$	48		$	10,153
Charges		—			—			—			—
Cash payments		(850	)		(960	)		(48	)		(1,858	)
Balance, April 3, 2005	$	1,269		$	7,026		$	—		$	8,295

Of the remaining balance at April 3, 2005, COMSYS expects to pay approximately $3.5 million in the remainder of fiscal 2005 and the balance, which consists primarily of lease payments, over the following ten years.

For the three months ended April 3, 2005, the Company recorded restructuring and integration costs of $3.4 million, which represent integration services provided by third parties and transition costs related to duplicative leases and integration of back office systems.

(3) Long-Term Debt

Long-term debt consisted of the following:

	April 3, 2005		January 2, 2005
	(in thousands)
Debt outstanding under credit facilities:
Senior credit facility—revolver	$	67,167	$	56,998
Senior credit facility—senior term loan		11,250		13,125
Second lien term loan		70,000		70,000
		148,417		140,123
Less current maturities		7,500		7,500
Long-term obligations, excluding current maturities	$	140,917	$	132,623

Effective September 30, 2004, in conjunction with the merger, COMSYS entered into a new senior credit facility with Merrill Lynch Capital and a syndicate of lenders (the “senior credit agreement”) that replaced Old COMSYS’ prior credit arrangements. The senior credit agreement provides for borrowings of up to $100 million under a revolving line of credit (the “revolver”) and a $15 million term loan payable in eight quarterly installments (the “senior term loan”). At the same time, COMSYS borrowed $70 million under a second lien term loan credit agreement (the “second lien term loan credit agreement”) with Merrill Lynch Capital, Heritage Bank, SSB and a syndicate of lenders (the “second lien term loan”).

Borrowings under the revolver are limited to 85% of eligible accounts receivable, as defined in the senior credit agreement, reduced by the amount of outstanding letters of credit and designated reserves. Interest on the revolver and senior term loan is based on LIBOR plus a margin, which on the revolver is 2.25% or 2.50%, depending upon the Company’s ratio of total debt to adjusted EBITDA, as defined in the senior credit agreement, and which is 3.00% for the senior term loan. At our election, the interest on the revolver and senior term loan may be based on the prime rate plus a margin, which on the revolver is 1.25% or 1.50% depending upon the Company’s ratio of total debt to adjusted EBITDA, and which is 2.00% for the senior term loan. The borrowings under the senior credit agreement are secured by a pledge of the stock of the Company’s subsidiaries and a lien on the assets of the Company’s subsidiaries. The senior credit agreement expires in September 2009.

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At April 3, 2005, the Company had outstanding borrowings of $67.2 million under the revolver at interest rates ranging from 5.00% to 7.25% per annum (5.48% weighted average). The principal balance of the senior term loan was $11.3 million with tranches bearing interest rates ranging from 5.50% to 7.75% per annum (5.55% weighted average). At April 3, 2005, the Company had available borrowing capacity under the revolver in the amount of $23.5 million plus an additional $1.1 million available for restructuring costs.

The second lien term loan bears interest at the prime rate plus a margin of 6.50% or, at our election, LIBOR plus a margin of 7.50%. The principal balance of the second lien term loan was $70.0 million as of April 3, 2005, and the interest rate on the loan was 10.0%. The second lien term loan is secured by a second lien position in the stock and assets of the Company’s subsidiaries and matures on April 30, 2010.

The Company pays a fee on outstanding letters of credit equal to the LIBOR margin then applicable to the revolver. As of April 3, 2005, the Company’s outstanding letters of credit totaled $3.3 million and the fee was 2.50% per annum. The Company also pays commitment fees of 0.50% per annum on the unused portion of the revolver commitment.

Both the senior credit agreement and second lien term loan credit agreement contain customary covenants and events of default, including the maintenance of fixed charge coverage ratios, total debt to adjusted EBITDA ratios and minimum levels of EBITDA, all as defined in the agreements. As of April 3, 2005, COMSYS was in compliance with all covenant requirements and believes it will be able to comply with these covenants in 2005. These agreements also place restrictions on the Company’s ability to enter into certain transactions without the approval of the lenders, such as the payment of dividends, disposition and acquisition of assets and the assumption of contingent obligations.

Effective February 22, 2005, the Company entered into an interest rate swap and an interest rate cap that together effectively convert $40.0 million of variable rate debt to modified fixed rate debt through September 20, 2009, thus potentially reducing the impact of changes in interest rates on future interest expense. The swap and the cap are designated as cash flow hedges of the variable LIBOR-based interest payments on $40.0 million of borrowings under the senior credit agreement and, as such, are carried at fair value. The swap is based on a $20.0 million notional amount at a rate of 4.59%, and the cap is based on a $20.0 million notional amount at a rate of 4.50%. The net fair value of the interest rate swap and cap is reflected in the Company’s consolidated balance sheet at April 3, 2005 as a noncurrent asset with an offset to accumulated other comprehensive income of $319,000.

(4) Stock Based Compensation

Effective with the merger, 1,000 shares of Class D Preferred Stock that were issued as of July 1, 2004 under the 2004 Management Incentive Plan (the “Plan”), which was adopted by Old COMSYS effective January 1, 2004, were exchanged for a total of 1,405,844 restricted shares of COMSYS common stock. One-third of these shares, or 468,615 shares, were vested at the merger date. Another 468,615 shares vest in equal installments of 156,205 shares on January 1^st of each of the years 2005, 2006 and 2007, and the remaining 468,614 shares vest in equal annual installments if specified earnings targets are met for fiscal years 2004, 2005 and 2006, in each case subject to earlier vesting as discussed below. A total of 624,820 shares vested in fiscal 2004. The intrinsic value of shares that will vest automatically with the passage of time, which amounted to $3.5 million at January 2, 2005, is recorded in stockholders’ equity as deferred stock compensation and is charged to expense throughout the vesting periods. The stock based compensation expense recognized during the three months ended April 3, 2005 was $437,000.

Upon the occurrence of certain events, including the sale or transfer of more than 50% of the Company’s assets, a merger or consolidation in which the Company is not the surviving corporation, the liquidation or dissolution of the Company, a “change in ownership” (as defined in the Plan) or the completion of an equity

8

offering resulting in gross proceeds of $35 million (a “Qualified Offering”), all outstanding shares of restricted stock issued under the Plan will immediately vest in full other than shares that vest subject to the satisfaction of specified earnings targets. The shares subject to specified earnings targets are also subject to immediate vesting if the aggregate value of the securities issued in the merger to the stockholders of Old COMSYS exceed $175 million over a 30-day period beginning after a Qualified Offering and ending on or prior to December 31, 2006.

As of April 3, 2005, there were 1,086,945 options outstanding to purchase COMSYS stock under the Company’s various stock incentive plans with a fair value of approximately $10.4 million. Additionally, the 1,405,844 restricted common shares described above are outstanding at April 3, 2005 with a fair value of $18.3 million. The Company determined the fair value of these shares using the Black-Scholes option pricing model based on the following weighted average assumptions: risk-free interest rate of 4.0%; dividend yield of 0%; expected volatility of 81.7%; and a weighted average expected life of five years.

Had compensation expense been determined consistent with the fair value method, utilizing the assumptions set forth above and amortized over the vesting period, the Company’s pro forma net loss would have been reported as follows:

	Three months ended
	April 3, 2005			March 31, 2004
	(in thousands)
Net loss attributable to common stockholders as reported	$	(206	)	$	(15,018	)
Add stock compensation included in reported net loss		437			—
Deduct stock compensation determined under fair value based method for all awards		(434	)		—
Tax effect		—			—
Pro forma net loss attributable to common stockholders	$	(203	)	$	(15,018	)
Basic and diluted loss per share, as reported	$	(0.01	)	$	(6,155.41	)
Pro forma net loss per share, basic and diluted	$	(0.01	)	$	(6,155.41	)

The effective date for the adoption of Statement of Financial Accounting Standards No. 123(R), Share-Based Payment (“SFAS No. 123(R)”), has been delayed to the first interim or annual reporting period of the first fiscal year beginning on or after June 15, 2005. The Company plans to adopt SFAS No. 123(R) in the first quarter of 2006.

(5) Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that would occur if options or other contracts to issue common stock were exercised or converted into common stock.

The impact of outstanding stock options and warrants to purchase 1,855,942 shares of COMSYS common stock are excluded from the computation of diluted loss per share because their effect is antidilutive.

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(6) Commitments and Contingencies

The Company leases various office space and equipment under noncancelable operating leases expiring through 2114. The Company has also entered into employment agreements with certain of its executives covering, among other things, base compensation, incentive bonus determinations and payments in the event of termination or a change in control of the Company.

In connection with the merger and the sale of Venturi’s commercial staffing business, the Company placed $2.5 million in cash and 187,556 shares of its common stock in escrow pending the final determination of certain state tax and unclaimed property assessments. Management cannot ascertain at this time what the final outcome of those assessments will be in the aggregate. Accordingly, the purchase price allocation related to the merger is subject to finalization. The cash in escrow is reflected in the unaudited consolidated balance sheets as restricted cash.

The Company is a defendant in various lawsuits and claims arising in the normal course of business and is defending them vigorously. While the results of litigation cannot be predicted with certainty, management believes the final outcome of such litigation will not have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

(7) Comprehensive Income

The following sets forth the amount of comprehensive income of the Company for the periods indicated.

	Three months ended
	April 3, 2005			March 31, 2004
	(in thousands)
Net loss	$	(206	)	$	(15,018	)
Net unrealized gain on change in fair values of derivative instruments		319			—
Total comprehensive income	$	113		$	(15,018	)

(8) Subsequent Event — Proposed Public Offering of Stock

On April 4, 2005, the Company filed a registration statement with the Securities and Exchange Commission for a proposed public offering of its common stock. A portion of the shares will be issued and sold by the Company and a portion will be sold by certain stockholders of the Company. The Company has not yet determined the number of shares to be offered or the price range for the offering. The registration statement has not yet become effective. The shares will be offered for sale in an underwritten offering after the registration statement becomes effective.

The Company intends to use the net proceeds from the proposed offering to redeem all of COMSYS’ outstanding Series A-1 redeemable preferred stock and to repay approximately $25.0 million of outstanding principal and interest under the second lien term loan. Any additional proceeds (including any proceeds from any exercise by the underwriters of their overallotment option) will be used to pay down the balance on the revolver, which will provide additional liquidity that can be used for general corporate purposes, including working capital and potential acquisitions of, or investments in, companies, technologies, products or assets that complement the Company’s business. COMSYS will not receive any proceeds from the sale of shares by the selling stockholders.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and related notes appearing elsewhere in this report, as well our audited consolidated financial statements and related notes appearing in our Annual Report on Form 10-K for the fiscal year ended January 2, 2005. This discussion contains forward-looking statements reflecting our current expectations and estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled “Forward-Looking Information” elsewhere in this report and in the section entitled “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended January 2, 2005. For accounting purposes, the merger of Old COMSYS with Venturi was treated as a reverse merger in which Old COMSYS was deemed to be the acquirer. The financial data and discussion and analysis set forth below relating to all periods prior to the merger on September 30, 2004 reflect the historical results of Old COMSYS. The financial data and discussion and analysis set forth below relating to periods subsequent to September 30, 2004 reflect the financial results of COMSYS after giving effect to the merger and include Venturi’s results of operations from the effective date of the merger. In light of the merger of Old COMSYS and Venturi, the historical data presented below is not necessarily indicative of future results.

Introduction

We are a leading information technology, or IT, staffing services company that provides a full range of specialized staffing and project implementation services and products. The staffing services we provide allow our clients to focus their resources on their core businesses rather than on recruiting, training and managing IT professionals. In using our staffing services, our clients benefit from:

• our extensive recruiting channels, providing our clients ready access to highly skilled IT professionals, often within 48 hours of submitting a placement request;

• access to a flexible workforce, allowing our clients to manage their labor costs more effectively without compromising their IT goals; and

• our knowledge of the market for IT resources, providing our clients with qualified candidates at competitive prices.

We contract with our customers to provide both short- and long-term IT staffing services at client locations throughout the U.S. Our consultants possess a wide range of skills and experience, including website development and integration, application programming and development, client/server development, systems software architecture and design, systems engineering and systems integration.

In addition to our core IT staffing business, we also offer our customers services that complement our staffing activities, such as:

• vendor management, in which we assist our clients in quantifying, rationalizing and monitoring their procurement of temporary staffing and other services from multiple suppliers;

• project solutions, including software development and maintenance, network design and management and offshore application maintenance and development; and

• recruitment and permanent placement of IT professionals.

These additional services provide us opportunities to build relationships with new clients and enhance our service offerings to our existing clients.

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Overview

Our business strategy is to become the leading provider of IT staffing services in the United States. Among our immediate peer group, we are the only staffing provider focused exclusively on the IT sector. We intend to continue implementing our business strategy through a combination of internal growth and strategic acquisitions that complement or enhance our business.

Industry trends that affect our business include:

• rate of technological change;

• rate of growth in corporate IT budgets;

• penetration of IT staffing in the general workforce;

• outsourcing of the IT workforce; and

• consolidation of supplier bases.

Beginning in the second half of 2000, the overall growth of the United States economy began to slow. While this slowdown negatively affected most industry segments, its greatest impact was on the telecommunications and Internet sectors. The combination of the slowdown in the economy, which also resulted in business failures, and the uncertainty as to when an economic recovery would take place led many companies to postpone or cancel IT projects. As a result, our business declined as evidenced by a 46% reduction in billable consultants from January 2001 through June 2003. During the economic downturn, we took steps to strengthen our operations and better position us to grow our business. The steps we took included diversifying our client base, implementing consistent business practices across our organization and improving our front office and back office infrastructure.

Recently we have seen signs of growth in the industry, which can be attributed to an improvement in general economic conditions. We believe that a continuation of the recent economic recovery will drive a renewed need for IT investments and initiatives by corporate clients. We expect this increase in IT spending, combined with the need to maintain financial flexibility by using variable workforce strategies, to result in increased demand for our services.

Since the beginning of the third quarter of 2003, our headcount numbers have been trending upward, reflecting an increase in the commencement of new projects, a decline in project postponements and cancellations and an improving economy. Our billable consultant headcount increased from approximately 2,800 for Old COMSYS at March 31, 2004 to approximately 3,000 for Old COMSYS prior to the merger on September 30, 2004. At January 2, 2005, billable headcount was approximately 4,900, and it was approximately 4,800 at April 3, 2005. If general economic conditions continue to improve, we expect consultant headcount to increase during 2005.

We anticipate that our growth will be primarily generated from greater penetration of our service offerings with our current clients, introducing new service offerings to our customers and obtaining new clients. Our strategy for achieving this growth includes expanding our geographic presence, cross-selling our VMS and project solutions services to existing IT staffing customers, aggressively marketing our services to new clients, expanding our range of value-added services, enhancing brand recognition and making strategic acquisitions.

The success of our business depends primarily on the volume of assignments we secure, the bill rates for those assignments, the costs of the consultants that provide the services and the quality and efficiency of our recruiting, sales and marketing and administrative functions. Our brand name, our proven track record, our recruiting and candidate screening processes, our strong account management team and our efficient and consistent administrative processes are factors that we believe are key to the success of our business. Factors

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outside of our control, such as the demand for IT services, general economic conditions and the supply of qualified IT professionals, will also affect our success.

Our revenue is primarily driven by bill rates and billable hours. Most of our billings for our staffing and project solutions services are on a time-and-materials basis, which means that we bill our customers based on pre-agreed bill rates for the number of hours that each of our consultants works on an assignment. Hourly bill rates are typically determined based on the level of skill and experience of the consultants assigned and the supply and demand in the current market for those qualifications. General economic conditions, macro IT expenditure trends and competition may create pressure on our pricing. Increasingly, large customers, including those with preferred supplier arrangements, have been seeking pricing discounts in exchange for higher volumes of business. Billable hours are affected by numerous factors, such as the quality and scope of our service offerings and competition at the national and local levels. We also generate fee income by providing vendor management and permanent placement services.

Our principal operating expenses include cost of services and selling, general and administrative expenses. Cost of services is comprised primarily of the costs of consultant labor, including employees, subcontractors and independent contractors, and related employee benefits. Approximately 70% of our consultants are employees, and the remainder are subcontractors and independent contractors. We compensate most of our consultants only for the hours that we bill to our clients, which allows us to better match our labor costs with our revenue generation. With respect to our consultant employees, we are responsible for employment-related taxes, medical and health care costs, and workers’ compensation. Labor costs are sensitive to shifts in the supply and demand of IT professionals, as well as increases in the costs of benefits and taxes.

The principal components of selling, general and administrative expenses are salaries, selling commissions, advertising, lead generation and other marketing costs and branch office expenses. Our branch office network allows us to leverage certain selling, general and administrative expenses, such as advertising and back office functions.

Our infrastructure includes a shared services operation in Phoenix, Arizona for all of our back office functions, including payroll, billing, accounts payable, collections and financial reporting. This single site, shared services operation is the platform for providing high quality service to our customers and enables us to integrate acquisitions rapidly while reducing corporate overhead and other expenses. We also have a proprietary, web-enabled front-office system (FOX) that facilitates the identification, qualification and placement of consultants in a timely manner. We also maintain a national recruiting center, a centralized call center for setting sales appointments and a centralized proposals and contract services department. We expect that this scalable infrastructure will facilitate our internal growth strategy and allow us to integrate acquisitions rapidly.

The Merger

On September 30, 2004, Old COMSYS completed a merger transaction with Venturi, a publicly traded IT and commercial staffing company, in which COMSYS Holding was merged with a wholly owned subsidiary of Venturi. Concurrent with the merger, we sold Venturi’s commercial staffing business for $30.3 million in cash and the assumption of approximately $700,000 in liabilities. At the effective time of the merger, we changed our name to COMSYS IT Partners, Inc. and issued new shares of our common stock to the stockholders of Old COMSYS, resulting in such stockholders owning approximately 55.4% of our outstanding common stock on a fully diluted basis. Since former Old COMSYS stockholders own a majority of our outstanding common stock as a result of the merger, Old COMSYS is deemed the acquiring company for accounting and financial reporting purposes.

The key elements of the integration of the legacy businesses of Old COMSYS and Venturi have been completed on or ahead of the original schedule. We believe this diminishes the business risks associated with the integration and accelerates the recognition of cost savings. Further, we have created a corporate infrastructure capable of supporting our internal growth strategy and future acquisitions. During the few

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months since the merger was completed, we have made substantial progress toward the integration of the businesses of Old COMSYS and Venturi, including:

• consolidation of all 17 duplicate branch offices;

• deployment of our proprietary front office information system (FOX) to the Venturi branch offices;

• standardization of compensation plans for all account managers, recruiters and managing directors;

• implementation of common health care and 401(k) programs;

• transition of the Old COMSYS back office information system to Venturi’s PeopleSoft system and transition of legacy Venturi back office and accounting processes to our shared services operation located in Phoenix, Arizona, together resulting in the consolidation of all of our back office operations for COMSYS, including payroll, billing, accounts payable, collections and financial reporting; and

• elimination of approximately 169 duplicative staff positions, with another 16 positions to be eliminated in the second quarter of 2005.

Results of Operations

The following table sets forth the percentage relationship to revenues of certain items included in our consolidated statements of operations:

	Fiscal quarter ended(1)
	April 3, 2005		March 31, 2004
Revenues	100.0	%	100.0	%
Cost of services	77.2		76.5
Gross profit	22.8		23.5
Selling, general and administrative expenses	16.6		18.7
Restructuring and integration costs	2.1		—
Stock based compensation expense	0.3		—
Depreciation and amortization	1.5		4.5
	20.5		23.2
Operating income	2.3		0.3
Interest expense and other expenses, net	2.4		17.2
Income tax expense	—		—
Net loss	(0.1	%)	(16.9	%)
Billable headcount at end of period	4,794		2,835

(1) Historically, Old COMSYS’ fiscal quarters ended with calendar quarters, while Venturi’s first three fiscal quarters were each equal to 13 calendar weeks (ending on a Sunday). In connection with the merger, we adopted Venturi’s fiscal accounting periods. Accordingly, our first fiscal quarter ended on April 3, 2005.

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Quarter Ended April 3, 2005 Versus Quarter Ended March 31, 2004

We recorded operating income of $3.7 million and a net loss of $206,000 in the first quarter of 2005 compared to operating income of $231,000 and a net loss of $15.0 million in the first quarter of 2004. The increase in operating income was due primarily to the merger with Venturi as well as a general improvement in the Company’s operating results subsequent to the first quarter of 2004. A decrease in net interest expense of $11.2 million from the first quarter of 2004 to the first quarter of 2005, which was due primarily to the redemption of Old COMSYS mandatorily redeemable preferred stock in connection with the merger, also contributed to the improvement in our results of operations. See “—Interest Expense.”

Revenues. Revenues for the first quarter of 2005 and the first quarter of 2004 were $165.0 million and $88.9 million, respectively, representing an increase of 85.6%. The increase for the first quarter of 2005 was due to revenues from our combined operations following the merger and overall economic growth. Billable headcount was 4,794 as of April 3, 2005 compared to Old COMSYS’ billable headcount of 2,835 as of March 31, 2004. In addition, fee revenues from our vendor management services increased 82.5% to $2.7 million for the three months ended April 3, 2005 compared to $1.5 million for Old COMSYS for the three months ended March 31, 2004. This increase was due to the merger and growth in vendor management programs.

Our revenue growth was driven by our clients in the financial services and telecommunications industry sectors. Revenues from the financial services sector increased by $21.8 million, or 72.2% in the first quarter of 2005 compared to the first quarter of 2004 and accounted for 31.9% of our revenues in the first quarter of 2005 compared to 34.0% of Old COMSYS’ revenues in the first quarter of 2004. Revenues from the telecommunications sector increased over the same period by $2.1 million, or 10.2%, but declined as a percentage of total revenues from 22.8% of Old COMSYS’ first quarter 2004 revenues to 13.7% of our first quarter 2005 revenues as we diversified our client base following the merger.

Cost of Services. Cost of services for the first quarter of 2005 and first quarter of 2004 were $127.4 million and $68.0 million, respectively, representing an increase of 87.3%. The increase for the first quarter of 2005 was due to our combined operations following the merger. Cost of services as a percentage of revenue increased to 77.2% in the first quarter of 2005 from 76.5% in the first quarter of 2004. The increase in cost of services as a percentage of revenue was primarily due to increases in state unemployment taxes and health care expenses.

Selling, General and Administrative Expenses. Selling, general and administrative expenses in the first quarter of 2005 and first quarter of 2004 were $27.5 million and $16.6 million, respectively, representing an increase of 65.4%. The increase was due to our combined operations following the merger. As a percentage of revenue, selling, general and administrative expenses decreased to 16.6% in the first quarter of 2005 from 18.7% in the first quarter of 2004. The decrease as a percentage of revenue was due to the elimination of duplicative office space and staff positions following the merger and our ability to leverage fixed overhead costs over an expanding revenue base.

Restructuring and Integration Costs. For the three months ended April 3, 2005, we recorded restructuring and integration costs of $3.4 million, which represent services provided by third parties to integrate back office systems and transition costs related to duplicative leases.

The following is an analysis of the restructuring reserve for the quarter ended April 3, 2005 (in thousands):

	Employee severance			Lease costs			Professional fees			Total
Balance, January 2, 2005	$	2,119		$	7,986		$	48		$	10,153
Charges		—			—			—			—
Cash payments		(850	)		(960	)		(48	)		(1,858	)
Balance, April 3, 2005	$	1,269		$	7,026		$	—		$	8,295

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Stock Based Compensation. Stock based compensation expense in the first quarter of 2005 was $437,000, which represents amortization of deferred stock based compensation. See Note 4 to the unaudited consolidated financial statements included elsewhere in this report.

Depreciation and Amortization. Depreciation and amortization expense consists primarily of depreciation of our fixed assets and amortization of our customer base and contract cost intangible assets. For the first quarter of 2005 and the first quarter of 2004, depreciation and amortization expense was $2.5 million and $4.0 million, respectively, representing a decrease of 38.0%. This decline was due primarily to certain intangible assets becoming fully amortized subsequent to March 31, 2004.

Interest Expense. Interest expense was $4.0 million and $15.2 million in the first quarter of 2005 and the first quarter of 2004, respectively, a decrease of $11.2 million which was due to the redemption of Old COMSYS’ preferred stock in connection with the merger. On July 1, 2003, we adopted SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity, which requires that dividends on mandatorily redeemable preferred stock be recorded as interest expense. SFAS No. 150 applies to COMSYS’ mandatorily redeemable preferred stock and, as a result, interest expense includes dividends in the amount of $10.9 million in the first quarter of 2004 compared to $843,000 in the first quarter of 2005. Net interest expense on borrowings under our credit facilities was $3.2 million in the first quarter of 2005 compared to $4.3 million in the first quarter of 2004. The decrease was due to the repayment of $64.8 million of senior subordinated notes in the third quarter of 2004 with a weighted average interest rate of 16.6% at March 31, 2004 and the repayment of a $7.8 million interest deferred note with an interest rate of 11.0%, compounded quarterly. The increase in borrowings under the new senior credit facility entered into in connection with the merger were offset by more favorable interest rates on this facility. See “Liquidity and Capital Resources—Overview.”

Provision for Income Taxes. As of January 2, 2005 and April 3, 2005, we had net deferred tax assets of approximately $82.2 million and had recorded a reserve against those net assets due to the uncertainty related to the realization of these amounts. Net operating loss carryforwards from prior years will offset any tax provision generated during the current year.

Liquidity and Capital Resources

Overview

Old COMSYS had historically financed its operations through internally generated funds, the issuance of preferred stock and borrowings under its credit facilities. At April 3, 2005, we had net working capital of $28.8 million compared to net working capital of $19.1 million at January 2, 2005.

On September 30, 2004, in conjunction with the merger with Venturi, we issued $22.4 million of mandatorily redeemable preferred stock and entered into a new senior credit facility with Merrill Lynch Capital and a syndicate of lenders (the “senior credit agreement”) that replaced our prior credit facility. The senior credit agreement provides for borrowings of up to $100.0 million under a revolving line of credit (the “revolver”) and a $15.0 million term loan payable in eight quarterly installments (the “senior term loan”). At the same time, we borrowed $70.0 million under a second lien term loan credit agreement with Merrill Lynch Capital, Heritage Bank, SSB and a syndicate of lenders (the “second lien term loan”).

Borrowings under the revolver are limited to 85% of eligible accounts receivable, as defined, reduced by the amount of outstanding letters of credit and designated reserves. At September 30, 2004, these designated reserves were a minimum availability reserve of $5.0 million and a restructuring reserve of $22.9 million intended to fund certain liabilities of Venturi as of September 30, 2004, purchase accounting reserves established in connection with the merger and the estimated cash outlays related to restructuring and transition costs associated with the merger that were not eligible for accrual in the purchase price allocation (comprised primarily of expenses related to duplicative leases, redundant headcount, severance arrangements, asset write-

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offs and integration services provided by third parties). Interest on the revolver and senior term loan is based on LIBOR plus a margin, which on the revolver is 2.25% or 2.50%, depending upon our ratio of total debt to adjusted EBITDA, as defined in the senior credit agreement, and which is 3.00% for the senior term loan. At our election, interest on the revolver and senior term loan may be based on the prime rate plus a margin, which on the revolver is 1.25% or 1.50%, depending upon our ratio of total debt to adjusted EBITDA, and which is 2.00% for the senior term loan. The senior credit agreement is secured by a pledge of the stock of our subsidiaries and a lien on the assets of our subsidiaries and expires in September 2009. At April 3, 2005, we had outstanding borrowings of $67.2 million under the revolver at interest rates ranging from 5.00% to 7.25% per annum (weighted average rate of 5.48%) and borrowing availability under the revolver of $23.5 million for general corporate purposes and an additional $1.1 million for merger integration costs. The principal balance of the senior term loan on that date was $11.3 million with tranches bearing interest ranging from 5.50% to 7.75% per annum (weighted average rate of 5.55%). Our borrowing availability at April 3, 2005 was reduced from $29.3 million at January 2, 2005 due to delayed billings to customers that occurred in February 2005 as a result of the transition of Old COMSYS’ back office information systems to Venturi’s PeopleSoft system. Our customer billings returned to normal cycles in March 2005. We believe that borrowing availability will return to year-end 2004 levels during the second quarter of 2005.

The second lien term loan bears interest at the prime rate plus a margin of 6.50% or, at our election, LIBOR plus a margin of 7.50%. The principal balance of the second lien term loan was $70.0 million as of April 3, 2005, and the interest rate on the loan was 10.0%. The second lien term loan is secured by a second lien position in the stock and assets of our subsidiaries and matures on April 30, 2010. Prepayment of principal will be required under the senior term loan, the revolver and the second lien term loan in certain circumstances.

We pay a fee on outstanding letters of credit equal to the LIBOR margin then applicable to the revolver. As of April 3, 2005, our outstanding letters of credit totaled $3.3 million and the fee was 2.50% per annum. We also pay commitment fees of 0.50% per annum on the unused portion of the revolver.

Effective February 22, 2005, we entered into an interest rate swap and an interest rate cap that together effectively convert $40.0 million of variable rate debt to modified fixed rate debt through September 20, 2009, thus potentially reducing the impact of changes in interest rates on future interest expense. The swap and the cap are designated as cash flow hedges of the variable LIBOR-based interest payments on $40.0 million of borrowings under the senior credit agreement and, as such, are carried at fair value. The swap is based on a $20.0 million notional amount at a rate of 4.59%, and the cap is based on a $20.0 million notional amount at a rate of 4.50%. The net fair value of the interest rate swap and cap is reflected in our consolidated balance sheet at April 3, 2005 as a noncurrent asset with an offset to accumulated other comprehensive income of $319,000.

The following table summarizes our cash flow activity during the periods indicated (in thousands):

	Three months ended
	April 3, 2005			March 31, 2004
Net cash used in operating activities	$	(6,285	)	$	(575	)
Net cash used in investing activities		(2,119	)		(560	)
Net cash provided by financing activities		8,404			1,135
Net increase in cash	$	—		$	—

Cash used in operating activities in the first quarter of 2005 was $6.3 million compared to $575,000 in the first quarter of 2004. Cash used in operating activities in the first quarter of 2005 included an increase in accounts receivable of $14.1 million compared to $7.5 million in the prior year period. This increase was due to revenue growth as well as the delayed billings resulting from the back office transition referred to above.

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Cash flows from operating activities were affected by the timing of cash receipts and disbursements and working capital requirements related to the growth in revenue.

Cash used in investing activities in the first quarter of 2005 was $2.1 million compared to $560,000 for the same period in 2004. The increase was due to an increase in capital expenditures related to computer systems and leasehold improvements.

Cash provided by financing activities was $8.4 million for three months ended April 3, 2005, representing primarily net borrowings under the senior credit agreement of $8.3 million to fund operating and investing activities. For the three months ended March 31, 2004, net cash provided by financing activities was $1.1 million, which represented net borrowings under Old COMSYS’ prior credit facility of $1.6 million less financing costs and advances to stockholders.

On April 4, 2005, the Company filed a registration statement with the Securities and Exchange Commission for a proposed public offering of its common stock. A portion of the shares will be issued and sold by the Company, and a portion will be sold by certain stockholders of the Company. The Company has not yet determined the number of shares to be offered or the price range for the offering, and the registration statement has not yet become effective. The shares will be offered for sale in an underwritten offering after the registration statement becomes effective. The Company intends to use the net proceeds from the proposed offering to redeem all of our outstanding Series A-1 redeemable preferred stock and to repay approximately $25.0 million of outstanding principal and interest under the second lien term loan. Any additional proceeds (including any proceeds from any exercise by the underwriters of their overallotment option) will be used to pay down the balance on the revolver, which will provide additional liquidity that can be used for general corporate purposes, including working capital and potential acquisitions of, or investments in, companies, technologies, products or assets that complement our business. We will not receive any proceeds from the sale of shares by the selling stockholders.

In the three months ended April 3, 2005, we incurred $2.0 million in capital expenditures for computer systems and leasehold improvements and $3.4 million in expenditures for merger integration costs. Capital expenditure requirements, primarily for software upgrades to our PeopleSoft system, hardware for our internal information systems and leasehold improvements, are currently expected to be approximately $4.5 million for the remainder of 2005. In addition, we expect to incur an additional $1.1 million in expenditures for merger integration costs for the remainder of 2005. We anticipate that our capital requirements for the remainder of fiscal 2005 will be satisfied through a combination of cash flow from operations and borrowings under our revolver.

Pursuant to the terms of the revolver, we maintain a zero balance in our cash accounts. Any excess cash in our accounts is swept on a daily basis and applied to repay borrowings under the revolver, and any cash needs are satisfied through borrowings under the revolver.

Since May 13, 2004, our common stock has traded on the NASDAQ National Market. Following our name change in connection with our merger with Old COMSYS in September 2004, our common stock has traded under the symbol “CITP”.

Debt Compliance

Our ability to continue operating is largely dependent upon our ability to maintain compliance with the financial covenants of our credit facilities. Both the senior credit agreement and second lien term loan contain customary covenants and events of default, including the maintenance of fixed charge coverage ratios, total debt to adjusted EBITDA ratios and minimum levels of EBITDA, all as defined in the agreements. As of April 3, 2005, we were in compliance with all covenant requirements under the senior credit agreement and the second lien term loan, and we believe we will be able to comply with these covenants during the remainder of fiscal year 2005.

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Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, also referred to as GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates include the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. We evaluate these estimates and assumptions on an ongoing basis, including but not limited to those related to revenue recognition, the recoverability of goodwill, collectibility of accounts receivable, reserves for medical costs and realization of deferred tax assets. Estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. The results of these estimates may form the basis of the carrying value of certain assets and liabilities and may not be readily apparent from other sources. Actual results, under conditions and circumstances different from those assumed, may differ materially from these estimates.

We believe the following accounting policies are critical to our business operations and the understanding of our operations and include the more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

Revenue under time-and-materials contracts is recorded at the time services are performed. Revenue from fixed-price contracts is recognized using the units of production method based on the ratio of time incurred to total estimated time to complete the project. Provisions for estimated losses on incomplete contracts are made on a contract-by-contract basis and are recorded in the period the losses are determinable. Estimated losses on incomplete projects are determined by comparing the revenue remaining to be recognized on fixed-price contracts to judgments as to estimated time and cost required to complete the project. If the estimated cost to complete the project exceeds the remaining revenue to be recognized, the excess cost is recorded as a loss provision on the contract.

We report revenues from vendor management services net of the related pass-through labor costs. We also report revenues net of payrolling activity. “Payrolling” is defined as a situation in which we accept a client-identified IT consultant for payroll processing in exchange for a fee. Revenue generated by payrollees is recorded net of labor costs. In our permanent placement business, we recognize revenue when employment candidates accept offers of permanent employment.

Recoverability of Goodwill and Other Intangible Assets

Effective at the beginning of 2002, Old COMSYS adopted SFAS No. 142, Goodwill and Other Intangible Assets, which established a new method for testing goodwill and other intangible assets for impairment using a fair value based approach. Under the new standard, goodwill and other intangible assets with indefinite lives are no longer amortized as was previously required, but are tested annually for impairment, unless an event occurs or circumstances change during the year that reduce or may reduce the fair value of the reporting unit below its book value, in which case an impairment charge may be required during the year. The annual test, which we perform on October 1^st, requires estimates and judgments by management to determine valuations for each reporting unit. Although we believe our assumptions and estimates are reasonable and appropriate, different assumptions and estimates could materially affect our reported financial results. Different assumptions related to future cash flows, operating margins, growth rates and discount rates could result in an impairment charge, which would be recognized as a non-cash charge to operating income and a reduction in asset values on our balance sheet. We recorded impairment charges in 2002 totaling $152.7 million and recorded no impairment charges in 2003 or 2004. At April 3, 2005 and January 2, 2005, total goodwill was $153.7 million.

Our intangible assets other than goodwill represent contract costs and a customer base and are amortized over the respective contract terms or estimated life of the customer base, ranging from two to five years. At

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April 3, 2005 and January 2, 2005, net intangible assets were $6.7 million and $7.1 million, respectively. In the event that facts and circumstances indicate intangibles or other long-lived assets may be impaired, we evaluate the recoverability and estimated useful lives of such assets. The estimated future undiscounted cash flows associated with the assets are compared to the assets’ carrying amount to determine if a write-down to fair value is necessary. We believe that all of our long-lived assets are fully realizable as of April 3, 2005.

Collectibility of Accounts Receivable

We make ongoing estimates relating to the collectibility of our accounts receivable and maintain allowances for estimated losses resulting from the inability of our customers to make required payments. In determining the amount of the allowance, we consider our historical level of credit losses and make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. Further, we monitor current economic trends that might impact the level of credit losses in the future. Since we cannot predict with certainty future changes in the financial stability of our customers, actual future losses from uncollectible accounts may differ from our estimates. Additional allowances may be required if the economy or the financial condition of our customers deteriorates. If we determined that a smaller or larger allowance was appropriate, we would record a credit or a charge to selling, general and administrative expense in the period in which we made such a determination. As of April 3, 2005 and January 2, 2005, the allowance for uncollectible accounts receivable was $3.7 million and $3.2 million, respectively.

Income Tax Assets and Liabilities

We record an income tax valuation allowance when it is more likely than not that certain deferred tax assets will not be realized. These deferred tax items represent expenses or operating losses recognized for financial reporting purposes, which will result in tax deductions over varying future periods. The judgments, assumptions and estimates that may affect the amount of the valuation allowance include estimates of future taxable income, availability of capital gains in future periods, timing or amount of future reversals of existing deferred tax liabilities and other tax planning strategies that may be available to us.

We record an estimated tax liability or tax benefit for income and other taxes based on what we determine will likely be paid in the various tax jurisdictions in which we operate. We use our best judgment in the determination of these amounts. However, the liabilities ultimately realized and paid are dependent upon various matters, including resolution of tax audits, and may differ from amounts recorded. An adjustment to the estimated liability would be recorded as a provision or benefit to income tax expense in the period in which it becomes probable that the amount of the actual liability differs from the recorded amount.

Derivatives

We are a party to an interest rate swap and an interest rate cap that mature in September 2009 and are designated as cash flow hedges under the provisions of SFAS No. 133, Accounting for Derivative Financial Instruments and Hedging Activities. The combined net fair value of the swap and cap is recorded on our consolidated balance sheet at April 3, 2005 as an asset in the amount of $319,000. The estimated fair values of derivatives used to hedge our interest rate risk, which have been provided to us by Merrill Lynch Capital, fluctuate over time and should be viewed in relation to the underlying hedging transaction and the overall management of our exposure to fluctuations in the underlying risk.

The offsetting amount for the net fair value of our interest rate swap and cap is recorded in other comprehensive income within the equity section of our consolidated balance sheet. Upon termination, the associated balance in other comprehensive income is amortized to earnings as the hedged cash flows occur. Any ineffectiveness present in our cash flow hedges will be recognized immediately in earnings without offset. There was no significant ineffectiveness in the first quarter of 2005.

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Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment, a revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS 123(R) will require us to, among other things, measure all employee stock based compensation awards using a fair value method and record such expense in our consolidated financial statements. The provisions of SFAS 123(R) are effective for the first interim or annual reporting period of the first fiscal year beginning on or after June 15, 2005; therefore, we will adopt the new requirements no later than the beginning of our first quarter of fiscal 2006. Adoption of the expensing requirements may reduce our reported earnings. Management is currently evaluating the specific impacts of adoption, which include whether we should adopt the requirements on a retrospective basis and which valuation model is most appropriate.

FORWARD-LOOKING INFORMATION

Our disclosure and analysis in this report, including information incorporated by reference, may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. Forward-looking statements give our current expectations and projections relating to the financial condition, results of operations, plans, objectives, future performance and business of COMSYS and its subsidiaries, as well as those relating to the merger on September 30, 2004 of Old COMSYS and Venturi. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. All statements other than statements of historical facts included in, or incorporated into, this report that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements.

These forward-looking statements are largely based on our expectations and beliefs concerning future events, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, including:

• the impact of competitive pressures on our ability to maintain or improve operating margins, including any change in the demand for our services;

• our success in attracting, training, retaining and motivating consultants and key officers and employees;

• changes in levels of unemployment and other economic conditions in the United States, or in particular regions or industries;

• weakness or reduction in corporate information technology spending levels;

• our ability to maintain existing client relationships and attract new clients in the context of changing economic or competitive conditions;

• the challenges of integration and restructuring associated with the merger or other planned business activities and the challenges of achieving anticipated synergies; and

• the entry of new competitors into the U.S. staffing services market because of the limited barriers to entry or the expansion of existing competitors in that market.

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Although we believe our estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this report are not guarantees of future performance, and we cannot assure any reader that those statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to the factors listed in this section and elsewhere in this report, as well as the factors listed in the “Risk Factors” section and elsewhere in our Annual Report on Form 10-K for the fiscal year ended January 2, 2005. All forward-looking statements speak only as of the date of this report. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise, except as required by law. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Outstanding debt under our senior and term loan credit agreements at April 3, 2005 was $148.4 million. Interest on borrowings under these facilities is based on the prime rate or LIBOR plus a variable margin. Based on the outstanding balance at April 3, 2005, a change of 1% in the interest rate would cause a change in interest expense of approximately $1.48 million on an annual basis.

We have historically been subject to market risk on all or a part of our borrowings under bank credit lines, which have variable interest rates. Effective February 22, 2005, we entered into an interest rate swap and an interest rate cap. The swap agreement and cap agreement are contracts to effectively exchange variable interest rate payments for fixed rate payments over the life of the instrument. The notional amount is used to measure interest to be paid or received and does not represent the exposure to credit loss. The purpose of the swap and cap is to limit our exposure to increases in interest rates on the notional amount of bank borrowings over the term of the swap and cap. The swap is based on a $20.0 million notional amount at a rate of 4.59%, and the cap is based on a $20.0 million notional amount at a rate of 4.50%.

The interest rate swap and cap are recorded at fair value, based on an amount estimated by Merrill Lynch Capital, which represents the amount that Merrill Lynch Capital would have paid us at April 3, 2005 if the swap and cap had been terminated at that date. The combined net fair value at April 3, 2005 is $319,000, which is included in our consolidated balance sheet in noncurrent assets, with an offset to accumulated other comprehensive income.

ITEM 4. CONTROLS AND PROCEDURES

As of April 3, 2005, our management, including our Chief Executive Officer and our Chief Financial Officer (our principal executive officer and principal financial officer, respectively), conducted an evaluation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Offer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Following the merger of Venturi and Old COMSYS on September 30, 2004, as part of our integration of the two businesses, we began the process of transitioning Old COMSYS’ back office information system to Venturi’s PeopleSoft system and consolidating Venturi’s disparate back office operations, including payroll, billing, accounts payable, collections and financial reporting, to Old COMSYS’ shared services center located in Phoenix, Arizona. This transition has continued throughout the first quarter of fiscal 2005. Other than changes relating to this transition, there has been no change in our internal control over financial reporting during the fiscal quarter ended April 3, 2005 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 5. OTHER INFORMATION

(a) On May 4, 2005, the Company entered into (i) the Consent and Third Amendment to Credit Agreement among COMSYS Services LLC, COMSYS Information Technology Services, Inc., the Company, PFI Corp., Merrill Lynch Capital, as Administrative Agent, ING Capital LLC, as Documentation Agent, GMAC Commercial Finance LLC, as Syndication Agent, and the lenders from time to time party thereto, and (ii) the Consent and Second Amendment to Term Loan Credit Agreement among COMSYS Services LLC, COMSYS Information Technology Services, Inc., the Company, PFI Corp., Merrill Lynch Capital, as Administrative Agent, Heritage Bank, SSB, as Collateral Agent, and the lenders from time to time party thereto. The amendments to these credit facilities were entered into in connection with the pending offering of the Company’s common stock pursuant to the Registration Statement on Form S-1 filed with the SEC on April 4, 2005. The Company expects to use the proceeds of such offering to, among other things, (i) redeem all of the Company’s outstanding shares of Series A-1 redeemable preferred stock at an estimated aggregate cost of $25.0 million and (ii) repay approximately $25.0 million of outstanding principal and interest under the Company’s second lien term loan, as more fully described in the Registration Statement on Form S-1 referenced above. Pursuant to the amendments to these credit facilities, the lenders and agents thereunder consented to the Series A-1 preferred stock redemption and the second lien term loan prepayment as described above. Under these amendments, the lenders and agents also consented to the Company’s use of any remaining proceeds to pay all accrued and unpaid interest on such prepaid principal and any applicable prepayment premiums associated therewith and to repay revolving loans.

Merrill Lynch Capital, a lender and an agent under these credit facilities, is an affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated, which serves as one of the underwriters with respect to the Company’s offering pursuant to the Registration Statement on Form S-1 referenced above.

ITEM 6. EXHIBITS

Each exhibit identified below is filed as part of this report. Exhibits designated with an “*” are filed as an exhibit to this Quarterly Report on Form 10-Q. Exhibits designated with a “+” are identified as management contracts or compensatory plans or arrangements. Exhibits previously filed as indicated below are incorporated by reference.

Exhibit Number	Description
2.1	Amendment to Stock Purchase Agreement dated as of March 28, 2005, among the Company, PFI Corp. and CBS Personnel Holdings, Inc. (formerly known as Compass CS, Inc.) (incorporated by reference to Exhibit 2.4 to the Company’s Annual Report on Form 10-K filed with the SEC on April 1, 2005).
3.1	Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2004).
3.2	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.21 to the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2004).
3.3	First Amendment, effective April 28, 2005, to the Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 4, 2004).
4.1	Registration Rights Agreement, dated as of September 30, 2004, by and among the Company and the stockholders party thereto (incorporated by reference to Exhibit 4.2 to the Company’s Form 8-A/A filed with the SEC on November 2, 2004).
4.2*	Amendment No. 1, effective April 1, 2005, to Registration Rights Agreement, dated as of September 30, 2004, by and among the Company and the stockholders party thereto.

23

Exhibit Number	Description
4.3	Amended and Restated Registration Rights Agreement, dated as of September 30, 2004, by and among the Registrant and the stockholders party thereto (incorporated by reference to Exhibit 4.3 to the Company’s Form 8-A/A filed with the SEC on November 2, 2004).
4.4*	Amendment No. 1, effective April 1, 2005, to Amended and Restated Registration Rights Agreement, dated as of September 30, 2004, by and among the Company and the stockholders party thereto.
10.1+	Separation Agreement dated January 24, 2005 between the Company and Tom Stafford (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K filed with the SEC on April 1, 2005).
10.2+	Form of Indemnification Agreement with directors and executive officers of the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 4, 2004).
10.3*	Consent and Second Amendment to Term Loan Credit Agreement dated May 4, 2005 among COMSYS Services LLC, COMSYS Information Technology Services, Inc., the Company, PFI Corp., Merrill Lynch Capital, as Administrative Agent, Heritage Bank, SSB, as Collateral Agent, and the lenders from time to time party thereto.
10.4*	Consent and Third Amendment to Credit Agreement dated May 4, 2005 among COMSYS Services LLC, COMSYS Information Technology Services, Inc., the Company, PFI Corp., Merrill Lynch Capital, as Administrative Agent, ING Capital LLC, as Documentation Agent, GMAC Commercial Finance LLC, as Syndication Agent, and the lenders from time to time party thereto.
31.1*	Certification of Chief Executive Officer of the Company pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.2*	Certification of Chief Financial Officer of the Company pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
32*	Certifications of Chief Executive Officer and Chief Financial Officer of the Company pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

* Filed herewith.

+ Management contract or compensatory plan or arrangement.

24

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.

	COMSYS IT PARTNERS, INC. (Registrant)
Date: May 6, 2005	By:	/S/    MICHAEL T. WILLIS
		Michael T. Willis President and Chief Executive Officer
Date: May 6, 2005	By:	/S/    JOSEPH C. TUSA, JR.
		Joseph C. Tusa, Jr. Senior Vice President and Chief Financial Officer

25

INDEX TO EXHIBITS

Exhibit Number	Description
2.1	Amendment to Stock Purchase Agreement dated as of March 28, 2005, among the Company, PFI Corp. and CBS Personnel Holdings, Inc. (formerly known as Compass CS, Inc.) (incorporated by reference to Exhibit 2.4 to the Company’s Annual Report on Form 10-K filed with the SEC on April 1, 2005).
3.1	Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2004).
3.2	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.21 to the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2004).
3.3	First Amendment, effective April 28, 2005, to the Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 4, 2004).
4.1	Registration Rights Agreement, dated as of September 30, 2004, by and among the Company and the stockholders party thereto (incorporated by reference to Exhibit 4.2 to the Company’s Form 8-A/A filed with the SEC on November 2, 2004).
4.2*	Amendment No. 1, effective April 1, 2005, to Registration Rights Agreement, dated as of September 30, 2004, by and among the Company and the stockholders party thereto.
4.3	Amended and Restated Registration Rights Agreement, dated as of September 30, 2004, by and among the Registrant and the stockholders party thereto (incorporated by reference to Exhibit 4.3 to the Company’s Form 8-A/A filed with the SEC on November 2, 2004).
4.4*	Amendment No. 1, effective April 1, 2005, to Amended and Restated Registration Rights Agreement, dated as of September 30, 2004, by and among the Company and the stockholders party thereto.
10.1+	Separation Agreement dated January 24, 2005 between the Company and Tom Stafford (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K filed with the SEC on April 1, 2005).
10.2+	Form of Indemnification Agreement with directors and executive officers of the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 4, 2004).
10.3*	Consent and Second Amendment to Term Loan Credit Agreement dated May 4, 2005 among COMSYS Services LLC, COMSYS Information Technology Services, Inc., the Company, PFI Corp., Merrill Lynch Capital, as Administrative Agent, Heritage Bank, SSB, as Collateral Agent, and the lenders from time to time party thereto.
10.4*	Consent and Third Amendment to Credit Agreement dated May 4, 2005 among COMSYS Services LLC, COMSYS Information Technology Services, Inc., the Company, PFI Corp., Merrill Lynch Capital, as Administrative Agent, ING Capital LLC, as Documentation Agent, GMAC Commercial Finance LLC, as Syndication Agent, and the lenders from time to time party thereto.
31.1*	Certification of Chief Executive Officer of the Company pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.2*	Certification of Chief Financial Officer of the Company pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
32*	Certifications of Chief Executive Officer and Chief Financial Officer of the Company pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

* Filed herewith.

+Management contract or compensatory plan or arrangement.

26

EX-4.2

Exhibit 4.2

AMENDMENT NO. 1 TO

REGISTRATION RIGHTS AGREEMENT

This Amendment No. 1 (the “Amendment”) is made as of the 1^st day of April, 2005 to that certain Registration Rights Agreement (the “Agreement”) made and entered into as of September 30, 2004, by and among COMSYS IT Partners, Inc. (f/k/a Venturi Partners, Inc.), a Delaware corporation (the “Company”), the persons and entities listed on Exhibit A thereto (collectively, the “Wachovia Group”), the persons and entities listed on Exhibit B thereto (collectively, the “Junior Securities Group”), and the persons listed on Exhibit C thereto (collectively, the “Comsys Management Group”). Capitalized terms used but not defined herein have the meanings given such terms in the Agreement or the Merger Agreement (as defined below).

A. Pursuant to the terms of the Agreement and Plan of Merger dated as of July 19, 2004 among the Company, Venturi Technology Partners, LLC, VTP, Inc., COMSYS Information Technology Services, Inc., COMSYS Holding, Inc. and certain stockholders of COMSYS Holding, Inc. signatory thereto (the “Holding Stockholders”) (as amended or supplemented, the “Merger Agreement”), the Company issued to the Holding Stockholders shares of Company Common Stock in connection with the Merger.

B. In connection with the Merger, the parties entered into the Agreement to govern certain of their rights, duties and obligations relating to registration of their Registrable Securities (as defined in the Agreement).

C. Section 11(c) of the Agreement provides that the provisions of the Agreement may be amended, modified, supplemented or waived upon the prior written consent of the Company and the Holders of a majority of the outstanding Registrable Securities.

D. The Company and the undersigned Holders representing a majority of the outstanding Registrable Securities desire to amend, modify, supplement and waive provisions of the Agreement as set forth herein.

E. Now, therefore, for good, valuable and binding consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, now agree as follows:

STATEMENT OF AGREEMENT

Section 1. Section 3(a) of the Agreement is hereby amended by

(i) deleting the first sentence thereof and inserting the following in lieu thereof:

Whenever the Company or another party having registration rights proposes that the Company register any of the Company’s equity securities under the Securities Act (other than a registration on Form S-4 relating solely to a transaction

described in Rule 145 of the Securities Act or a registration on Form S-8 or any successor forms thereto), whether or not for sale for the Company’s own account, the Company will give written notice of such proposed filing to all Holders prior to or promptly after the initial filing of the registration statement.

and

(ii) deleting the last sentence thereof and inserting the following in lieu thereof:

Each Holder shall be permitted to withdraw all or part of the Registrable Securities from a Piggyback Registration at any time prior to the effective time of such Piggyback Registration except to the extent such withdrawal rights may be limited in any subsequent agreement entered into by a Holder.

Section 2. Section 4(a) of the Agreement is hereby amended by

(i) deleting the second sentence thereof and inserting the following in lieu thereof:

The Company agrees to use its commercially reasonable efforts to keep such Shelf Registration continuously effective and usable for resale of Registrable Securities for 18 months after the date such Shelf Registration is declared effective by the Commission or such shorter period which will terminate at such time as the Holders have sold all the Registrable Securities covered by such Shelf Registration.

and

(ii) adding the following sentence at the end thereof:

Notwithstanding the foregoing provisions of this Section 4(a), in the event: (i) the Company proposes to undertake a registered underwritten offering of its securities, (ii) the Company files a registration statement relating thereto on or before April 30, 2005 and such registration statement is declared effective by the Commission on or before July 31, 2005 and (iii) the Holders are given the opportunity to include Registrable Securities in such offering in accordance with Section 3 above, the Company shall not be obligated to cause the Shelf Registration to be declared effective by the SEC until 90 days after the closing of such other securities offering. If the registration statement for such proposed underwritten offering has not been declared effective on or before July 31, 2005, the Company shall again be obligated to cause the Shelf Registration to be declared effective as promptly thereafter as practicable.

Section 3. Section 5(a)(i) is hereby amended and restated to read as follows:

(i) the Board of Directors of the Company determines that filing or maintaining the effectiveness of such Registration Statement would have a material adverse effect on the Company or the holders of its capital stock in relation to any material acquisition or disposition, financing or other corporate transaction or

2

Section 4. Miscellaneous.

(a) Ratification and Confirmation. Except as expressly set forth in this Amendment, the terms, provisions and conditions of the Agreement shall remain unchanged and in full force and effect without interruption or impairment of any kind.

(b) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving regard to the conflict of law principles thereof.

(c) Headings. The article and section headings contained in this Amendment are inserted for convenience only and will not affect in any way the meaning or interpretation of this Amendment.

(d) Counterparts. This Amendment may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. This Agreement may be delivered by exchange of copies of the signature page by facsimile transmission.

(e) Severability. The provisions of this Amendment will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof; provided that if any provision of this Amendment, as applied to any party or to any circumstance, is judicially determined not to be enforceable in accordance with its terms, the parties agree that the court judicially making such determination may modify the provision in a manner consistent with its objectives such that it is enforceable, and/or to delete specific words or phrases, and in its modified form, such provision will then be enforceable and will be enforced.

(f) Amendment. This Amendment may not be amended or modified except in the manner specified for an amendment of or modification to the Agreement in Section 11(c) of the Agreement.

(g) Entire Agreement. The Agreement as amended by this Amendment constitutes the entire agreement and understanding of the parties in respect of the subject matter of the Agreement as amended by this Amendment and supersedes all prior understandings, agreements or representations by or among the parties, written, or oral, to the extent they relate in any way to the subject matter of the Agreement as amended by this Amendment.

3

IN WITNESS WHEREOF the parties hereto have or have caused this Registration Rights Agreement to be duly executed as of the date first above written

THE COMPANY:
COMSYS IT Partners, Inc.
By:	/s/ David L. Kerr
Name:	David L. Kerr
Title:	Senior Vice President—Corporate Development
THE STOCKHOLDERS:
Wachovia Investors, Inc.
By:	/s/ Courtney Rountree
Name:	Courtney Rountree
Title:	Vice President
GTCR Fund VI, L.P.
By:
Name:	Dan Yih
Title:	Principal
GTCR VI Executive Fund, L.P.
By:
Name:	Dan Yih
Title:	Principal
GTCR Associates VI
By:
Name:	Dan Yih
Title:	Principal

[Signature Page to Amendment No. 1 to Registration Rights Agreement]

J.P. Morgan Direct Corporate Finance Institutional Investors LLC
By:	J.P. Morgan Chase Bank as Investment Advisor
By:
Name:	Eliot H. Powell
Title:	Vice President
J.P. Morgan Direct Corporate Finance Private Investors LLC
By:	J.P. Morgan Investment Management Inc. as Investment Advisor
By:
Name:	Eliot H. Powell
Title:	Vice President
Old Trafford Investment Pte. Ltd.
By:
Name:	Lim Hock Tay
Title:	Director
522 Fifth Avenue Fund, L.P.
By:	J.P. Morgan Investment Management Inc. as Investment Advisor
By:
Name:	Eliot H. Powell
Title:	Vice President

[Signature Page to Amendment No. 1 to Registration Rights Agreement]

/s/ Michael T. Willis

Michael T. Willis, individually

/s/ David L. Kerr

David L. Kerr, individually

/s/ Margaret G. Reed

Margaret G. Reed, individually

/s/ Joseph C. Tusa, Jr.

Joseph C. Tusa, Jr., individually

/s/ Albert S. Wright IV

Albert S. Wright IV, individually

/s/ Mark R. Bierman

Mark R. Bierman, individually

/s/ Jeffrey J. Weiner

Jeffrey J. Weiner, individually

/s/ Bernice L. Arceneaux

Bernice L. Arceneaux, individually

[Signature Page to Amendment No. 1 to Registration Rights Agreement]

EX-4.4

Exhibit 4.4

AMENDMENT NO. 1 TO

AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

This Amendment No. 1 (the “Amendment”) is made as of this 1^st day of April, 2005 to that certain Amended and Restated Registration Rights Agreement (the “Agreement”) made and entered into as of September 30, 2004, by and among COMSYS IT Partners, Inc. (f/k/a Venturi Partners, Inc.), a Delaware corporation (the “Company”), and the parties identified as “Investors” on the signature pages thereto (the “Investors”). Capitalized terms used but not defined herein have the meanings given such terms in the Agreement.

A. The Company and the Investors entered into the Agreement to govern certain of their rights, duties and obligations relating to registration of their Registrable Securities.

B. Section 11(c) of the Agreement provides that the provisions of the Agreement may be amended, modified, supplemented or waived upon the prior written consent of the Company and the Holders of a majority of the outstanding Registrable Securities.

C. The Company and the undersigned Holders representing a majority of the outstanding Registrable Securities desire to amend, modify, supplement and waive provisions of the Agreement as set forth herein.

D. Now, therefore, for good, valuable and binding consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, now agree as follows:

STATEMENT OF AGREEMENT

Section 1. Section 3(a) of the Agreement is hereby amended by

(i) deleting the first sentence thereof and inserting the following in lieu thereof:

Whenever the Company or another party having registration rights proposes that the Company register any of the Company’s equity securities under the Securities Act (other than a registration on Form S-4 relating solely to a transaction described in Rule 145 of the Securities Act or a registration on Form S-8 or any successor forms thereto), whether or not for sale for the Company’s own account, the Company will give written notice of such proposed filing to all Holders prior to or promptly after the initial filing of the registration statement.

and

(ii) deleting the last sentence thereof and inserting the following in lieu thereof:

Each Holder shall be permitted to withdraw all or part of the Registrable Securities from a Piggyback Registration at any time prior to the effective time of such Piggyback Registration except to the extent such withdrawal rights may be limited in any subsequent agreement entered into by a Holder.

Section 2. Section 4(a) of the Agreement is hereby amended by

(i) deleting the second sentence thereof and inserting the following in lieu thereof:

The Company agrees to use its commercially reasonable efforts to keep such Shelf Registration continuously effective and usable for resale of Registrable Securities for 18 months after the date such Shelf Registration is declared effective by the Commission or such shorter period which will terminate at such time as the Holders have sold all the Registrable Securities covered by such Shelf Registration.

and

(ii) adding the following sentence at the end thereof:

Notwithstanding the foregoing provisions of this Section 4(a), in the event: (i) the Company proposes to undertake a registered underwritten offering of its securities, (ii) the Company files a registration statement relating thereto on or before April 30, 2005 and such registration statement is declared effective by the Commission on or before July 31, 2005 and (iii) the Holders are given the opportunity to include Registrable Securities in such offering in accordance with Section 3 above, the Company shall not be obligated to cause the Shelf Registration to be declared effective by the SEC until 90 days after the closing of such other securities offering. If the registration statement for such proposed underwritten offering has not been declared effective on or before July 31, 2005, the Company shall again be obligated to cause the Shelf Registration to be declared effective as promptly thereafter as practicable.

Section 3. Section 5(a)(i) is hereby amended and restated to read as follows:

(i) the Board of Directors of the Company determines that filing or maintaining the effectiveness of such Registration Statement would have a material adverse effect on the Company or the holders of its capital stock in relation to any material acquisition or disposition, financing or other corporate transaction or

Section 4. Miscellaneous.

(a) Ratification and Confirmation. Except as expressly set forth in this Amendment, the terms, provisions and conditions of the Agreement shall remain unchanged and in full force and effect without interruption or impairment of any kind.

2

(b) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving regard to the conflict of law principles thereof.

(c) Headings. The article and section headings contained in this Amendment are inserted for convenience only and will not affect in any way the meaning or interpretation of this Amendment.

(d) Counterparts. This Amendment may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. This Agreement may be delivered by exchange of copies of the signature page by facsimile transmission.

(e) Severability. The provisions of this Amendment will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof; provided that if any provision of this Amendment, as applied to any party or to any circumstance, is judicially determined not to be enforceable in accordance with its terms, the parties agree that the court judicially making such determination may modify the provision in a manner consistent with its objectives such that it is enforceable, and/or to delete specific words or phrases, and in its modified form, such provision will then be enforceable and will be enforced.

(f) Amendment. This Amendment may not be amended or modified except in the manner specified for an amendment of or modification to the Agreement in Section 11(c) of the Agreement.

(g) Entire Agreement. The Agreement as amended by this Amendment constitutes the entire agreement and understanding of the parties in respect of the subject matter of the Agreement as amended by this Amendment and supersedes all prior understandings, agreements or representations by or among the parties, written, or oral, to the extent they relate in any way to the subject matter of the Agreement as amended by this Amendment.

3

IN WITNESS WHEREOF the parties hereto have or have caused this Registration Rights Agreement to be duly executed as of the date first above written

THE COMPANY:
COMSYS IT Partners, Inc.
By:	/s/ David L. Kerr
Name:	David L. Kerr
Title:	Senior Vice President—Corporate Development
THE INVESTORS:
INLAND PARTNERS, L.P.
By:	Coryton Management LTD, its General Partner
By:	/s/ Elias J. Sabo
Name:	Elias J. Sabo
Title:	Attorney-in-Fact
LINKS PARTNERS, L.P.
By:	Coryton Management LTD, its General Partner
By:	/s/ Elias J. Sabo
Name:	Elias J. Sabo
Title:	Attorney-in-Fact

[Signature Page to Amendment No. 1 to Amended and Restated Registration Rights Agreement]

MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS, L.P.
By:	MatlinPatterson Global Advisors LLC, its Investment Advisor
By:	/s/ Robert H. Weiss
Name:	Robert H. Weiss
Title:	General Counsel

ZAZOVE ASSOCIATES, LLC, FOR AND ON
     BEHALF OF:

CENTURY NATIONAL INSURANCE COMPANY,

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA,

SAN DIEGO COUNTY EMPLOYEE RETIREMENT ASSOCIATION (BONY ACCOUNT),

ZAZOVE CONVERTIBLE SECURITIES FUND, INC.,

QWEST OCCUPATIONAL HEALTH TRUST,

QWEST PENSION TRUST,

HFR CA SELECT FUND,

ZURICH INSTITUTIONAL BENCHMARKS MASTER FUND LTD.,

ZAZOVE HIGH YIELD CONVERTIBLE SECURITIES FUND, L.P.,

ZAZOVE AGGRESSIVE GROWTH FUND,

ZAZOVE GLOBAL CONVERTIBLE FUND, L.P.,

ZAZOVE INCOME FUND, L.P.,

SAN DIEGO COUNTY EMPLOYEES RETIREMENT ASSOCIATION,

ZAZOVE HEDGED CONVERTIBLE FUND, L.P.

By:

Name:

Title:

[Signature Page to Amendment No. 1 to Amended and Restated Registration Rights Agreement]

R2 INVESTMENTS, LDC
By:	Amalgamated Gadget, L.P., its Investment Manager
By:	Scepter Holdings, Inc., its General Partner
By:
Name:
Title:
JAMES E. LINKENAUGER
By:
SALOMON SMITH BARNEY
By:
Name:
Title:
SC FUNDAMENTAL VALUE FUND, L.P.
By:	SC Fundamental LLC, its General Partner
By:	/s/ Neil Koffer
Name:	Neil Koffer
Title:	Member
SC FUNDAMENTAL VALUE BVI, LTD.
By:	SC Fundamental Value BVI, Inc., as Managing General Partner of its Investment Manager
By:	/s/ Neil Koffer
Name:	Neil Koffer
Title:	Member

[Signature Page to Amendment No. 1 to Amended and Restated Registration Rights Agreement]

BENSON ASSOCIATES, LLC
By:
Name:
Title:
HIGHBRIDGE CAPITAL MANAGEMENT LLC
By:	Highbridge Capital Management
By:
Name:
Title:
GENE PRETTI
By:
LOUIS F. PRETTI & MARY KAY PRETTI JTWROS
By:	Zazove Associates, LLC, registered investment advisor with discretionary authority
By:
By:
LC CAPITAL MASTER FUND, LTD.
By:
Name:
Title:

[Signature Page to Amendment No. 1 to Amended and Restated Registration Rights Agreement]

BANK OF AMERICA, N.A., formerly known as
    NationsBank, N.A. and Bank of America Illinois

By:

Name:

Title:

BNP PARIBAS

By:

Name:

Title:

BANK ONE, NA

By:

Name:

Title:

HBV CAPITAL MANAGEMENT LLC

By:

Name:

Title:

[Signature Page to Amendment No. 1 to Amended and Restated Registration Rights Agreement]

EX-10.3

Exhibit 10.3

CONSENT AND SECOND AMENDMENT TO TERM LOAN CREDIT AGREEMENT

THIS CONSENT AND SECOND AMENDMENT TO TERM LOAN CREDIT AGREEMENT (this “Amendment”) is entered into as of May 4, 2005 by and among COMSYS SERVICES LLC, a Delaware limited liability company and successor by merger to Venturi Technology Partners, LLC (“COMSYS Services”), COMSYS INFORMATION TECHNOLOGY SERVICES, INC., a Delaware corporation and successor by merger to COMSYS Holding, Inc. (“COMSYS IT”; COMSYS Services and COMSYS IT are referred to herein each individually as a “Borrower” and collectively as the “Borrowers”), COMSYS IT PARTNERS, INC., a Delaware corporation (“Holdings”), PFI Corp., a Delaware corporation (“PFI Holdings”), COMSYS Services, acting in its capacity as borrowing agent and funds administrator for and on behalf of the Borrowers (in such capacity, the “Funds Administrator”), the financial institutions parties hereto as lenders under the Credit Agreement described below (each individually a “Lender” and collectively the “Lenders”), MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services Inc., as administrative agent (in such capacity, the “Administrative Agent”), and HERITAGE BANK, SSB, a Texas-chartered savings bank, as collateral agent (in such capacity, the “Collateral Agent”).

W I T N E S S E T H:

WHEREAS, the Borrowers, Holdings, PFI Holdings, the Administrative Agent, the Collateral Agent and each Lender are parties to that certain Term Loan Credit Agreement dated as of September 30, 2004 (as the same has been, here is and hereafter may be further amended, modified, restated or otherwise supplemented and in effect from time to time, the “Credit Agreement”); and

WHEREAS, the Credit Parties that are a party hereto have informed the Agents and the Lenders that Holdings intends to issue shares of common stock of Holdings (the “2005 Equity Issuance”), the Net Cash Proceeds of which shall be used by Holdings to repurchase all of the issued and outstanding “Series A-1 Preferred Stock” (as such term is defined in the Holdings Certificate of Designations), including accrued and unpaid dividends and all fees and expenses incurred in connection with the 2005 Equity Issuance (the “Series A-1 Repurchase”), with all Net Cash Proceeds remaining after the Series A-1 Repurchase (such remaining Net Cash Proceeds are referred to herein as the “Additional Net Cash Proceeds”) being promptly loaned by Holdings to COMSYS IT (the “Holdings Intercompany Loan”) and substantially contemporaneously used by COMSYS IT to prepay a portion of the outstanding principal amount of the Second Lien Term Loan in an amount equal to $25,000,000 (or, in the event the Additional Net Cash Proceeds are less than $25,000,000, such lesser amount) (the “Second Lien Term Loan Prepayment”) and, in the event any excess Additional Net Cash Proceeds remain following the Second Lien Term Loan Prepayment, to pay all accrued and unpaid interest on such prepaid principal and any applicable prepayment premiums associated with such prepayment, and to repay Revolving Loans (as such term is defined in the First Lien Credit Agreement) outstanding under the First Lien Credit Agreement;

WHEREAS, the Credit Parties that are a party hereto have requested, among other things, that the Agents and the Lenders (i) consent to the Series A-1 Repurchase and the Second Lien Term Loan Prepayment and (ii) amend the Credit Agreement as hereinafter set forth; and

WHEREAS, the Administrative Agent, the Collateral Agent and the Lenders agree to accommodate such requests of the Credit Parties, on the terms and subject to the conditions herein set forth.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows:

1. Defined Terms. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Credit Agreement.

2. Amendments. Effective as of the date hereof, upon satisfaction of the conditions precedent set forth in Section 4 hereof, the Credit Agreement is amended as set forth in this Section 2:

(a) Section 1.1. Section 1.1 of the Credit Agreement is hereby amended by adding thereto the following defined terms and their respective definitions in the correct alphabetical order:

“Holdings Intercompany Loan” means an intercompany loan made by Holdings to COMSYS IT with a portion of the Net Cash Proceeds of the 2005 Equity Issuance, which loan shall comply with Section 5.1(j) and be evidenced by a promissory note that has been pledged to the Collateral Agent and delivered to the First Lien Agent as contractual representative for the Collateral Agent pursuant to the Second Lien Intercreditor Agreement (or, following the Discharge of all First Lien Debt, the Collateral Agent) promptly upon the issuance thereof, as security for the Obligations.

“Second Amendment” means that certain Consent and Second Amendment to Term Loan Credit Agreement dated as of May 4, 2005 by and among the Borrowers and certain other Credit Parties, the Administrative Agent, the Collateral Agent and the Lenders.

“2005 Equity Issuance” means the issuance by Holdings of shares of common stock of Holdings, the proceeds of which shall be used promptly by Holdings to (i) repurchase all of the issued and outstanding Series A-1 Preferred Stock, and (ii) make the Holdings Intercompany Loan, the proceeds of which shall be used promptly by COMSYS IT to repay a portion of the outstanding principal amount of the Second Lien Term Loan, accrued and unpaid interest on such prepaid portion and any applicable prepayment premiums, and to repay Revolving Loans (as such term is defined in the First Lien Credit Agreement).

(b) Section 1.1. Section 1.1 of the Credit Agreement is hereby amended by substituting the definition of the term “Financing Documents” as set forth below in lieu of the current version of such definition contained in Section 1.1 of the Credit Agreement:

“Financing Documents” means this Agreement, the Second Lien Term Notes, the Security Documents, the Information Certificate, the Fee Letter, the Second Lien Intercreditor Agreement, any subordination agreement to be entered into among the Agent, the Borrowers and Holdings in connection with the Holdings

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Intercompany Loan, the First Amendment, the Second Amendment, any fee letter between an Agent and any Borrower relating to the transactions contemplated hereby and all other documents, instruments and agreements contemplated herein or thereby and executed concurrently by a Credit Party with or in favor of an Agent or the Lenders in connection herewith or at any time and from time to time hereafter, as any or all of the same may be amended, supplemented, restated or otherwise modified from time to time.

(c) Section 3.5. Section 3.5(f) of the Credit Agreement is hereby deleted in its entirety and the following is substituted in lieu thereof:

“(f) Except as contemplated and permitted by this Agreement, and other than administrative and other ministerial activities related to (i) its investment in COMSYS IT, (ii) the maintenance of its corporate existence, and (iii) the performance of its obligations under the Operative Documents to which it is a party and any other agreement to which it is a party, to the extent not otherwise prohibited by this Agreement, Holdings has no significant assets or liabilities (other than the capital stock of COMSYS IT and the Holdings Intercompany Loan).”

(d) Section 5.1. Section 5.1 of the Credit Agreement is hereby amended by (i) deleting the period at the end of clause (i) thereof and substituting “; and” therefor and (ii) adding a new clause (j) thereto immediately following clause (i) thereof as follows:

“(j) intercompany Debt of COMSYS IT constituting the Holdings Intercompany Loan, provided, that (i) all interest on such Debt shall be payable in kind (and not in cash), and (ii) such Debt shall be evidenced by a promissory note, all payments under which are subordinated to the prior indefeasible payment in full in cash of the Obligations in manner acceptable to Collateral Agent and which otherwise contains terms reasonably satisfactory to Collateral Agent, the sole originally executed counterpart of which shall be pledged to the Collateral Agent and delivered to the First Lien Agent as contractual representative for the Collateral Agent pursuant to the Second Lien Intercreditor Agreement (or, following the Discharge of all First Lien Debt, the Collateral Agent), as security for the Obligations.”

(e) Section 5.6. Section 5.6 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in lieu thereof:

“Section 5.6 Payments and Modifications of Second Lien Debt and Subordinated Debt.

The Credit Parties will not, and will not permit their Subsidiaries to, directly or indirectly:

(a) amend, alter, waive or modify the First Lien Debt Documents, except to the extent permitted pursuant to the Second Lien Intercreditor Agreement; and

(b) declare, pay, make or set aside any amount for any payment in respect of the Holdings Intercompany Loan.”

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(f) Compliance Certificate. Notwithstanding anything to the contrary contained in Exhibit B (Section 7.3) of the Compliance Certificate, solely for purposes of calculating the Total Debt to Adjusted EBITDA Ratio, the intercompany Debt evidenced by the Holdings Intercompany Loan shall not be included in the calculation of Total Debt for any Defined Period.

3. Consent and Waiver. Effective as of the date hereof, upon satisfaction of the conditions precedent set forth in Section 4 hereof, and in reliance upon the representations and warranties of the Credit Parties set forth in the Credit Agreement, the other Financing Documents and in this Amendment, and notwithstanding anything to the contrary contained in the Credit Agreement or any other Financing Document (including, without limitation, Section 2.1(c)(iii), Section 2.1(e), Section 5.4(g) and Section 5.6 of the Credit Agreement), the Agents and the Lenders hereby consent to the Series A-1 Repurchase and the Second Lien Term Loan Prepayment, waive the applicability of Sections 2.1(c)(iii) and 2.1(e) of the Credit Agreement solely with respect to the Net Cash Proceeds of the 2005 Equity Issuance and acknowledge and consent to the waivers and consents provided by the First Lien Lender Parties in Section 3 of the Consent and Third Amendment to Credit Agreement dated of even date herewith by and among the Credit Parties and the First Lien Lender Parties, provided that the effectiveness of such waiver and consents are subject to the following conditions: (i) the Series A-1 Repurchase is consummated solely with Net Cash Proceeds from the 2005 Equity Issuance, (ii) all Additional Net Cash Proceeds shall be promptly loaned by Holdings to COMSYS IT and all or, in the event such Additional Net Cash Proceeds are in excess of $25,000,000, a portion of such Additional Net Cash Proceeds shall be promptly used by COMSYS IT to consummate the Second Lien Term Loan Prepayment, (iii) in the event the Additional Net Cash Proceeds are in excess of $25,000,000, such portion of the Additional Net Cash Proceeds in excess of $25,000,000 shall be applied to pay all accrued and unpaid interest on the principal amount of the Second Lien Term Loan prepaid in connection with the Second Lien Term Loan Prepayment and any applicable prepayment premiums associated with such prepayment and to repay any outstanding Revolving Loans (as such term is defined in the First Lien Credit Agreement) without a permanent reduction of the Revolving Loan Commitment (as such term is defined in the First Lien Credit Agreement), (iv) the Additional Net Cash Proceeds loaned by Holdings to COMSYS IT pursuant to clauses (ii) of this Section 3 shall be evidenced by a promissory note, all payments under which are subordinated to the prior indefeasible payment in full in cash of the Obligations in manner acceptable to Collateral Agent and which otherwise contains terms reasonably satisfactory to the Collateral Agent, the sole originally executed counterpart of which shall be pledged to the Collateral Agent and delivered to the First Lien Agent as contractual representative for the Collateral Agent pursuant to the Second Lien Intercreditor Agreement (or, following the Discharge of all First Lien Debt, the Collateral Agent), as security for the Obligations, and, in connection therewith, Holdings and COMSYS IT shall have entered into a subordination agreement with the Collateral Agent, in form and substance satisfactory to the Collateral Agent, and shall have executed and delivered such other documents as the Collateral Agent may reasonably request to evidence the subordination of the Holdings Intercompany Loan, and (v) the 2005 Equity Issuance shall have occurred on or prior to July 31, 2005.

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

(a) the execution and delivery of this Amendment by each Credit Party that is a party hereto, the Administrative Agent, the Collateral Agent and the Lenders;

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(b) the delivery to the Administrative Agent of a copy of the fully executed consent and amendment to the First Lien Debt Documents regarding the substance of this Amendment, in form and substance reasonably acceptable to the Administrative Agent, and evidence that all conditions contained in such consent and amendment (other than the effectiveness of this Amendment) have been satisfied; and

(c) the truth and accuracy of the representations and warranties contained in Section 5 hereof; and

(d) no Default or Event of Default under the Credit Agreement, as amended hereby, shall have occurred and be continuing.

5. Representations and Warranties. Each Credit Party that is a party hereto hereby represents and warrants to the Agents and each Lender as follows:

(a) the representations and warranties of the Borrowers and the other Credit Parties contained in the Financing Documents are true and correct in all material respects as of the date hereof, except to the extent that any such representation or warranty (i) relates to a specific date, in which case such representation and warranty shall be true and correct as of such earlier date or (ii) is qualified by materiality or has Material Adverse Effect qualifiers, in which case, such representations and warranties shall be true and correct in all respects;

(b) the execution, delivery and performance by such Credit Party of this Amendment 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 and do not violate, conflict with or cause a breach or a default under any provision of applicable law or regulation or of the Organizational Documents of any Credit Party or of any agreement, judgment, injunction, order, decree or other instrument binding upon it;

(c) this Amendment constitutes the valid and binding obligation of the Credit Parties that are parties hereto, enforceable against such Persons in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws relating to the enforcement of creditor’s rights generally and by general equitable principles;

(d) no Default or Event of Default exists or will result from consummation of the 2005 Equity Issuance; and

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(e) the 2005 Equity Issuance is permitted pursuant to all applicable law and all material agreements, documents and instruments to which any Credit Party is a party or by which any of their respective properties or assets are bound.

6. No Waiver. Except as expressly set forth herein, nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Credit Agreement or any of the other Financing Documents or constitute a course of conduct or dealing among the parties. Except as expressly stated herein, the Administrative Agent, the Collateral Agent and Lenders reserve all rights, privileges and remedies under the Financing Documents. Except as amended or consented to hereby, the Credit Agreement and other Financing Documents remain unmodified and in full force and effect. All references in the Financing Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement as amended hereby.

7. Severability. In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

8. Headings. Headings and captions used in this Amendment (including the Exhibits, Schedules and Annexes hereto, if any) are included for convenience of reference only and shall not be given any substantive effect.

9. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AMENDMENT 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 CREDIT PARTY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS AND IRREVOCABLY AGREES THAT, SUBJECT TO THE ADMINISTRATIVE AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE OTHER FINANCING DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH PERSON BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED C/O FUNDS ADMINISTRATOR AT THE ADDRESS SET FORTH IN THE CREDIT AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

10. WAIVER OF JURY TRIAL. EACH CREDIT PARTY, THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

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11. Counterparts; Integration. This Amendment may be executed and delivered via facsimile with the same force and effect as if an original were executed and may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures hereto were upon the same instrument. This Amendment constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.

12. Reaffirmation. Each of the Credit Parties that is a party hereto, as debtor, grantor, pledgor, guarantor, assignor, or in other any other similar capacity in which such Credit Party grants liens or security interests in its property or otherwise acts as accommodation party or guarantor, as the case may be, hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each of the Financing Documents to which it is a party (after giving effect hereto) and (ii) to the extent such Credit Party granted liens on or security interests in any of its property pursuant to any such Financing Document as security for or otherwise guaranteed the Borrowers’ Obligations under or with respect to the Financing Documents, ratifies and reaffirms such guarantee and grant of security interests and liens and confirms and agrees that such security interests and liens hereafter secure all of the Obligations as amended hereby. Each of the Credit Parties hereby consents to this Amendment and acknowledges that each of the Financing Documents remains in full force and effect and is hereby ratified and reaffirmed, subject to the amendments, consents and waivers set forth herein. The execution of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent, the Collateral Agent or Lenders or constitute a waiver of any provision of any of the Financing Documents (except as expressly set forth herein) or serve to effect a novation of the Obligations.

[remainder of page intentionally left blank;

signature page follows]

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth above.

BORROWERS:
COMSYS SERVICES LLC, a Delaware limited liability company, and as successor by merger to Venturi Technology Partners, LLC, as the Funds Administrator and as a Borrower
By:	/s/ David L. Kerr
Name:	David L. Kerr
Title:	Senior Vice President – Corporate Development
COMSYS INFORMATION TECHNOLOGY SERVICES, INC., a Delaware corporation, and as successor by merger to COMSYS Holding, Inc., as a Borrower
By:	/s/ David L. Kerr
Name:	David L. Kerr
Title:	Senior Vice President – Corporate Development

Consent and Second Amendment to Term Loan Credit Agreement

(COMSYS)

OTHER CREDIT PARTIES:
COMSYS IT PARTNERS, INC., a Delaware corporation
By:	/s/ David L. Kerr
Name:	David L. Kerr
Title:	Senior Vice President – Corporate Development
PFI CORP., a Delaware corporation
By:	/s/ David L. Kerr
Name:	David L. Kerr
Title:	Senior Vice President – Corporate Development

Consent and Second Amendment to Term Loan Credit Agreement

(COMSYS)

ADMINISTRATIVE AGENT:
MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services Inc.,
as Administrative Agent
By:	/s/ Scott E. Gast
Name:	Scott E. Gast
Title:	Vice President
COLLATERAL AGENT:
HERITAGE BANK, a Texas-chartered savings bank, as Collateral Agent
By:	/s/ [ILLEGIBLE]
Name:
Title:

Consent and Second Amendment to Term Loan Credit Agreement

(COMSYS)

LENDERS:
HIGHLAND FLOATING RATE ADVANTAGE FUND, as a Lender
By:	Highland Capital Management, L.P., its Investment Advisor
	By:	/s/ Todd A. Travers
	Name:	Todd A. Travers
	Title:	Assistant Secretary Highland Capital Management, L.P.
HIGHLAND FLOATING RATE LIMITED LIABILITY COMPANY, as a Lender
By:	Highland Capital Management, L.P., its Investment Advisor
	By:	/s/ Todd A. Travers
	Name:	Todd A. Travers
	Title:	Assistant Secretary Highland Capital Management, L.P.
ELF FUNDING TRUST I, as a Lender
By:	Highland Capital Management, L.P., as Collateral Manager
	By:	/s/ David Lancelot
	Name:	David Lancelot
	Title:	Treasurer Highland Capital Management, L.P.
BLUE SQUARE FUNDING LIMITED SERIES 3, as a Lender
By:	/s/ Alice L. Wagner
Name:	Alice L. Wagner
Title:	Vice President

Consent and Second Amendment to Term Loan Credit Agreement

(COMSYS)

LOAN FUNDING IV LLC, as a Lender
By:	Highland Capital Management, L.P.,
	as Portfolio Manager
	By:	/s/ David Lancelot
	Name:	David Lancelot
	Title:	Treasurer Highland Capital Management, L.P.
RESTORATION FUNDING CLO, LTD., as a Lender
By:	Highland Capital Management, L.P.,
	as Collateral Manager
	By:	/s/ David Lancelot
	Name:	David Lancelot
	Title:	Treasurer Highland Capital Management, L.P.
HIGHLAND LOAN FUNDING V LTD., as a Lender
By:	Highland Capital Management, L.P.,
	as Collateral Manager
	By:	/s/ David Lancelot
	Name:	David Lancelot
	Title:	Treasurer Highland Capital Management, L.P.
PAM CAPITAL FUNDING LP, as a Lender
By:	Highland Capital Management, L.P.,
	as Collateral Manager
	By:	/s/ David Lancelot
	Name:	David Lancelot
	Title:	Treasurer Highland Capital Management, L.P.
HIGHLAND LEGACY LIMITED, as a Lender
By:	Highland Capital Management, L.P.,
	as Collateral Manager
	By:	/s/ David Lancelot
	Name:	David Lancelot
	Title:	Treasurer Highland Capital Management, L.P.

Consent and Second Amendment to Term Loan Credit Agreement

(COMSYS)

HIGHLAND OFFSHORE PARTNERS, L.P., as a Lender
By:	Highland Capital Manager, L.P., as General Partner
	By:	/s/ David Lancelot
	Name:	David Lancelot
	Title:	Treasurer Highland Capital Management, L.P.
LOAN FUNDING VII LLC, as a Lender
By:	Highland Capital Management, L.P., as Collateral Manager
	By:	/s/ David Lancelot
	Name:	David Lancelot
	Title:	Treasurer Highland Capital Management, L.P.
JZ EQUITY PARTNERS PLC, as a Lender
By:	/s/ David W. Zalaznick
Name:	David W. Zalaznick
Title:	Investment Advisor
GOLDENTREE CAPITAL SOLUTIONS FUND, as a Lender
By:	GoldenTree Asset Management, L.P.
	By:	/s/ Jonathan Ezrow
	Name:	Jonathan Ezrow
	Title:	Partner
GOLDENTREE CAPITAL SOLUTIONS OFFSHORE FUND, as a Lender
By:	GoldenTree Asset Management, L.P.
	By:	/s/ Jonathan Ezrow
	Name:	Jonathan Ezrow
	Title:	Partner

Consent and Second Amendment to Term Loan Credit Agreement

(COMSYS)

ORIX FINANCE CORP I, as a Lender
By:	/s/ Robert Storo
Name:	Robert Storo
Title:	Director

Consent and Second Amendment to Term Loan Credit Agreement

(COMSYS)

EX-10.4

Exhibit 10.4

CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT

THIS CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of May 4, 2005 by and among COMSYS SERVICES LLC, a Delaware limited liability company and successor by merger to Venturi Technology Partners, LLC (“COMSYS Services”), COMSYS INFORMATION TECHNOLOGY SERVICES, INC., a Delaware corporation and successor by merger to COMSYS Holding, Inc. (“COMSYS IT”; COMSYS Services and COMSYS IT are referred to herein each individually as a “Borrower” and collectively as the “Borrowers”), COMSYS IT PARTNERS, INC., a Delaware corporation (“Holdings”), PFI CORP., a Delaware corporation (“PFI Holdings”), COMSYS Services, acting in its capacity as borrowing agent and funds administrator for and on behalf of the Borrowers (in such capacity, the “Funds Administrator”), the financial institutions parties hereto as lenders under the Credit Agreement described below (each individually a “Lender” and collectively the “Lenders”), MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services Inc., as administrative agent (in such capacity, the “Agent”), Sole Bookrunner and Sole Lead Arranger and as a Lender, ING CAPITAL LLC, as documentation agent (in such capacity, the “Documentation Agent”) and as a Lender, and GMAC COMMERCIAL FINANCE LLC, as syndication agent (in such capacity, the “Syndication Agent”) and as a Lender.

W I T N E S S E T H:

WHEREAS, the Borrowers, Holdings, PFI Holdings, the Agent, the Documentation Agent, the Syndication Agent and each Lender are parties to that certain Credit Agreement dated as of September 30, 2004 (as the same has been, here is and hereafter may be further amended, modified, restated or otherwise supplemented and in effect from time to time, the “Credit Agreement”); and

WHEREAS, the Credit Parties that are a party hereto have informed the Agent and the Lenders that Holdings intends to issue shares of common stock of Holdings (the “2005 Equity Issuance”), the Net Cash Proceeds of which shall be used by Holdings to repurchase all of the issued and outstanding “Series A-1 Preferred Stock” (as such term is defined in the Holdings Certificate of Designations), including accrued and unpaid dividends and all fees and expenses incurred in connection with the 2005 Equity Issuance (the “Series A-1 Repurchase”), with all Net Cash Proceeds remaining after the Series A-1 Repurchase (such remaining Net Cash Proceeds are referred to herein as the “Additional Net Cash Proceeds”) being promptly loaned by Holdings to COMSYS IT (the “Holdings Intercompany Loan”) and substantially contemporaneously used by COMSYS IT to prepay a portion of the outstanding principal amount of the Second Lien Term Loan in an amount equal to $25,000,000 (or, in the event the Additional Net Cash Proceeds are less than $25,000,000, such lesser amount) (the “Second Lien Term Loan Prepayment”) and, in the event any excess Additional Net Cash Proceeds remain following the Second Lien Term Loan Prepayment, to pay all accrued and unpaid interest on such prepaid principal and any applicable prepayment premiums associated with such prepayment, and to repay Revolving Loans;

WHEREAS, the Credit Parties that are a party hereto have requested, among other things, that the Agent and the Lenders (i) consent to the Series A-1 Repurchase and the Second Lien Term Loan Prepayment and (ii) amend the Credit Agreement as hereinafter set forth; and

WHEREAS, the Agent and the Lenders agree to accommodate such requests of the Credit Parties, on the terms and subject to the conditions herein set forth.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows:

1. Defined Terms. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Credit Agreement.

2. Amendments. Effective as of the date hereof, upon satisfaction of the conditions precedent set forth in Section 4 hereof, the Credit Agreement is amended as set forth in this Section 2:

(a) Section 1.1. Section 1.1 of the Credit Agreement is hereby amended by adding thereto the following defined terms and their respective definitions in the correct alphabetical order:

“Holdings Intercompany Loan” means an intercompany loan made by Holdings to COMSYS IT with a portion of the Net Cash Proceeds of the 2005 Equity Issuance, which loan shall comply with Section 5.1(j) and be evidenced by a promissory note that has been pledged and delivered by Holdings to Agent promptly upon the issuance thereof, for the benefit of Agent and Lenders, as security for the Obligations.

“Third Amendment” means that certain Consent and Third Amendment to Credit Agreement dated as of May 4, 2005 by and among the Borrowers and certain other Credit Parties, the Agent, the Documentation Agent, the Syndication Agent and the Lenders.

“2005 Equity Issuance” means the issuance by Holdings of shares of common stock of Holdings, the proceeds of which shall be used promptly by Holdings to (i) repurchase all of the issued and outstanding Series A-1 Preferred Stock, and (ii) make the Holdings Intercompany Loan, the proceeds of which shall be used promptly by COMSYS IT to repay a portion of the outstanding principal amount of the Second Lien Term Loan, accrued and unpaid interest on such prepaid portion and any applicable prepayment premiums, and to repay Revolving Loans.

(b) Section 1.1. Section 1.1 of the Credit Agreement is hereby amended by substituting the definition of the term “Financing Documents” as set forth below in lieu of the current version of such definition contained in Section 1.1 of the Credit Agreement:

“Financing Documents” means this Agreement, the Notes, the Security Documents, the Information Certificate, the Fee Letter, the Second Lien Intercreditor Agreement, any subordination agreement to be entered into among the Agent, the Borrowers and Holdings in connection with the Holdings Intercompany Loan, the First Amendment, the Second Amendment, the Third Amendment, any fee letter between Merrill Lynch and any Borrower relating to the transactions contemplated hereby, any Swap Contract entered into between any Credit Party and any Eligible Swap Counterparty, and all other documents,

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instruments and agreements contemplated herein or thereby and executed concurrently by a Credit Party with or in favor of the Agent or the Lenders in connection herewith or at any time and from time to time hereafter, as any or all of the same may be amended, supplemented, restated or otherwise modified from time to time.

(c) Section 3.5. Section 3.5(f) of the Credit Agreement is hereby deleted in its entirety and the following is substituted in lieu thereof:

“(f) Except as contemplated and permitted by this Agreement, and other than administrative and other ministerial activities related to (i) its investment in COMSYS IT, (ii) the maintenance of its corporate existence, and (iii) the performance of its obligations under the Operative Documents to which it is a party and any other agreement to which it is a party, to the extent not otherwise prohibited by this Agreement, Holdings has no significant assets or liabilities (other than the capital stock of COMSYS IT and the Holdings Intercompany Loan).”

(d) Section 5.1. Section 5.1 of the Credit Agreement is hereby amended by (i) deleting the period at the end of clause (i) thereof and substituting “; and” therefor and (ii) adding a new clause (j) thereto immediately following clause (i) thereof as follows:

“(j) intercompany Debt of COMSYS IT constituting the Holdings Intercompany Loan, provided, that (i) all interest on such Debt shall be payable in kind (and not in cash), and (ii) such Debt shall be evidenced by a promissory note, all payments under which are subordinated to the prior indefeasible payment in full in cash of the Obligations in manner acceptable to Agent and which otherwise contains terms reasonably satisfactory to Agent, the sole originally executed counterpart of which shall be pledged and delivered to Agent, for the benefit of Agent and Lenders, as security for the Obligations.”

(e) Section 5.6. Section 5.6 of the Credit Agreement is hereby deleted in its entirety and the following is substituted in lieu thereof:

“Section 5.6 Payments and Modifications of Second Lien Debt and Subordinated Debt.

The Credit Parties will not, and will not permit their Subsidiaries to, directly or indirectly:

(a) declare, pay, make or set aside any amount for any payment in respect of the Second Lien Debt, except for such payments required under and made pursuant to the terms of the Second Lien Debt Documents and the Second Lien Intercreditor Agreement;

(b) amend, alter, waive or modify the Second Lien Debt Documents, except to the extent permitted pursuant to the Second Lien Intercreditor Agreement; and

(c) declare, pay, make or set aside any amount for any payment in respect of the Holdings Intercompany Loan.”

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(f) Compliance Certificate. Notwithstanding anything to the contrary contained in Exhibit B (Section 7.3) of the Compliance Certificate, solely for purposes of calculating the Total Debt to Adjusted EBITDA Ratio, the intercompany Debt evidenced by the Holdings Intercompany Loan shall not be included in the calculation of Total Debt for any Defined Period.

3. Consent and Waiver. Effective as of the date hereof, upon satisfaction of the conditions precedent set forth in Section 4 hereof, and in reliance upon the representations and warranties of the Credit Parties set forth in the Credit Agreement, the other Financing Documents and in this Amendment, and notwithstanding anything to the contrary contained in the Credit Agreement or any other Financing Document (including, without limitation, Section 2.1(c)(iii), Section 2.1(e), Section 5.4(g) and Section 5.6 of the Credit Agreement), the Agent and the Lenders hereby consent to the Series A-1 Repurchase and the Second Lien Term Loan Prepayment and waive the applicability of Sections 2.1(c)(iii) and 2.1(e) of the Credit Agreement solely with respect to the Net Cash Proceeds of the 2005 Equity Issuance, provided that the effectiveness of such waiver and consents are subject to the following conditions: (i) the Series A-1 Repurchase is consummated solely with Net Cash Proceeds from the 2005 Equity Issuance, (ii) all Additional Net Cash Proceeds shall be promptly loaned by Holdings to COMSYS IT and all or, in the event such Additional Net Cash Proceeds are in excess of $25,000,000, a portion of such Additional Net Cash Proceeds shall be promptly used by COMSYS IT to consummate the Second Lien Term Loan Prepayment, (iii) in the event the Additional Net Cash Proceeds are in excess of $25,000,000, such portion of the Additional Net Cash Proceeds in excess of $25,000,000 shall be applied to pay all accrued and unpaid interest on the principal amount of the Second Lien Term Loan prepaid in connection with the Second Lien Term Loan Prepayment and any applicable prepayment premiums associated with such prepayment and to repay any outstanding Revolving Loans (without a permanent reduction of the Revolving Loan Commitment), pro rata among all Lenders having a Revolving Loan Commitment Percentage, (iv) the Additional Net Cash Proceeds loaned by Holdings to COMSYS IT pursuant to clauses (ii) of this Section 3 shall be evidenced by a promissory note, all payments under which are subordinated to the prior indefeasible payment in full in cash of the Obligations in manner acceptable to Agent and which otherwise contains terms reasonably satisfactory to Agent, the sole originally executed counterpart of which shall be pledged and delivered to Agent, for the benefit of Agent and Lenders, as security for the Obligations, and, in connection therewith, Holdings and COMSYS IT shall have entered into a subordination agreement with the Agent, in form and substance satisfactory to the Agent, and shall have executed and delivered such other documents as the Agent may reasonably request to evidence the subordination of the Holdings Intercompany Loan, (v) the Borrowers shall have provided evidence to the Agent, reasonably satisfactory to the Agent, that the prepayment required pursuant to the foregoing clause (ii) has been applied to the Second Lien Term Loan, and (vi) the 2005 Equity Issuance shall have occurred on or prior to July 31, 2005.

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

(a) the execution and delivery of this Amendment by each Credit Party that is a party hereto, the Agent and the Lenders;

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(b) the delivery to Agent of a copy of the fully executed consent and amendment to the Second Lien Debt Documents regarding the substance of this Amendment (which shall include, without limitation, the Second Lien Lenders’ consent to the transactions contemplated by Section 3 of this Amendment), in form and substance reasonably acceptable to the Agent, and evidence that all conditions contained in such consent and amendment (other than the effectiveness of this Amendment) have been satisfied; and

(c) the truth and accuracy of the representations and warranties contained in Section 5 hereof; and

(d) no Default or Event of Default under the Credit Agreement, as amended hereby, shall have occurred and be continuing.

5. Representations and Warranties. Each Credit Party that is a party hereto hereby represents and warrants to the Agent and each Lender as follows:

(a) the representations and warranties of the Borrowers and the other Credit Parties contained in the Financing Documents are true and correct in all material respects as of the date hereof, except to the extent that any such representation or warranty (i) relates to a specific date, in which case such representation and warranty shall be true and correct as of such earlier date or (ii) is qualified by materiality or has Material Adverse Effect qualifiers, in which case, such representations and warranties shall be true and correct in all respects;

(b) the execution, delivery and performance by such Credit Party of this Amendment 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 and do not violate, conflict with or cause a breach or a default under any provision of applicable law or regulation or of the Organizational Documents of any Credit Party or of any agreement, judgment, injunction, order, decree or other instrument binding upon it;

(c) this Amendment constitutes the valid and binding obligation of the Credit Parties that are parties hereto, enforceable against such Persons in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws relating to the enforcement of creditor’s rights generally and by general equitable principles;

(d) no Default or Event of Default exists or will result from consummation of the 2005 Equity Issuance; and

(e) the 2005 Equity Issuance is permitted pursuant to all applicable law and all material agreements, documents and instruments to which any Credit Party is a party or by which any of their respective properties or assets are bound.

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6. No Waiver. Except as expressly set forth herein, nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Credit Agreement or any of the other Financing Documents or constitute a course of conduct or dealing among the parties. Except as expressly stated herein, the Agent and Lenders reserve all rights, privileges and remedies under the Financing Documents. Except as amended or consented to hereby, the Credit Agreement and other Financing Documents remain unmodified and in full force and effect. All references in the Financing Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement as amended hereby.

7. Severability. In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

8. Headings. Headings and captions used in this Amendment (including the Exhibits, Schedules and Annexes hereto, if any) are included for convenience of reference only and shall not be given any substantive effect.

9. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AMENDMENT 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 CREDIT PARTY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS AND IRREVOCABLY AGREES THAT, SUBJECT TO THE AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE OTHER FINANCING DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH PERSON BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED C/O FUNDS ADMINISTRATOR AT THE ADDRESS SET FORTH IN THE CREDIT AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

10. WAIVER OF JURY TRIAL. EACH CREDIT PARTY, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

11. Counterparts; Integration. This Amendment may be executed and delivered via facsimile with the same force and effect as if an original were executed and may be signed in any

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number of counterparts, each of which shall be an original, with the same effect as if the signatures hereto were upon the same instrument. This Amendment constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.

12. Reaffirmation. Each of the Credit Parties that is a party hereto, as debtor, grantor, pledgor, guarantor, assignor, or in other any other similar capacity in which such Credit Party grants liens or security interests in its property or otherwise acts as accommodation party or guarantor, as the case may be, hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each of the Financing Documents to which it is a party (after giving effect hereto) and (ii) to the extent such Credit Party granted liens on or security interests in any of its property pursuant to any such Financing Document as security for or otherwise guaranteed the Borrowers’ Obligations under or with respect to the Financing Documents, ratifies and reaffirms such guarantee and grant of security interests and liens and confirms and agrees that such security interests and liens hereafter secure all of the Obligations as amended hereby. Each of the Credit Parties hereby consents to this Amendment and acknowledges that each of the Financing Documents remains in full force and effect and is hereby ratified and reaffirmed, subject to the amendments, consents and waivers set forth herein. The execution of this Amendment shall not operate as a waiver of any right, power or remedy of the Agent or Lenders or constitute a waiver of any provision of any of the Financing Documents (except as expressly set forth herein) or serve to effect a novation of the Obligations.

[remainder of page intentionally left blank;

signature page follows]

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth above.

BORROWERS:
COMSYS SERVICES LLC, a Delaware limited liability company, and as successor by merger to Venturi Technology Partners, LLC, as the Funds Administrator and as a Borrower
By:	/s/ David L. Kerr
Name:	David L. Kerr
Title:	Senior Vice President – Corporate Development
COMSYS INFORMATION TECHNOLOGY SERVICES, INC., a Delaware corporation, and as successor by merger to COMSYS Holding, Inc., as a Borrower
By:	/s/ David L. Kerr
Name:	David L. Kerr
Title:	Senior Vice President – Corporate Development

Consent and Third Amendment to Credit Agreement

(COMSYS)

OTHER CREDIT PARTIES:
COMSYS IT PARTNERS, INC., a Delaware corporation
By:	/s/ David L. Kerr
Name:	David L. Kerr
Title:	Senior Vice President – Corporate Development
PFI CORP., a Delaware corporation
By:	/s/ David L. Kerr
Name:	David L. Kerr
Title:	Senior Vice President – Corporate Development

Consent and Third Amendment to Credit Agreement

(COMSYS)

AGENT AND LENDER:
MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services Inc.,
as Agent and a Lender
By:	/s/ Scott E. Gast
Name:	Scott E. Gast
Title:	Vice President

Consent and Third Amendment to Credit Agreement

(COMSYS)

LENDERS:
GMAC COMMERCIAL FINANCE LLC, as Syndication Agent and as a Lender
By:	/s/ Thomas Brent
Name:	Thomas Brent
Title:	Director
ING CAPITAL LLC, as Documentation Agent and as a Lender
By:	/s/ Daryn K. Veney
Name:	Daryn K. Veney
Title:	Vice President
ALLIED IRISH BANKS PLC, as a Lender
By:	/s/ John Farrace
Name:	John Farrace
Title:	Senior Vice President
ALLIED IRISH BANKS PLC, as a Lender
By:	/s/ Martin S. Chin
Name:	Martin S. Chin
Title:	VP
NORTH FORK BUSINESS CAPITAL CORPORATION, as a Lender
By:	/s/ Ari Kaplan
Name:	Ari Kaplan
Title:	Vice President
LOAN FUNDING VII LLC, as a Lender
By:	Highland Capital Management, L.P., as Collateral Manager
	By:	/s/ David Lancelot
	Name:	David Lancelot
	Title:	Treasurer Highland Capital Management, L.P.
FRIEDBERGMILSTEIN PRIVATE
CAPITAL FUND I, as a Lender
By:	/s/ Eric Green
Name:	Eric Green
Title:	SENIOR PARTNER

Consent and Third Amendment to Credit Agreement

(COMSYS)

LENDERS:
AIB Debt Management Limited, as a Lender
By:	/s/ John Farrace
Name:	John Farrace
Title:	Senior Vice President Investment Advisor to AIB Debt Management, Limited
AIB Debt Management Limited, as a Lender
By:	/s/ Martin S. Chin
Name:	MARTIN S. CHIN
Title:	VP

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, Michael T. Willis, Chairman of the Board, Chief Executive Officer and President of COMSYS IT Partners, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of COMSYS IT Partners, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [Intentionally omitted pursuant to SEC Release No. 33-8238 and 34-47986];

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2005

/S/    MICHAEL T. WILLIS        

Michael T. Willis

Chairman, of the Board, Chief Executive Officer and President

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, Joseph C. Tusa, Jr., Senior Vice President and Chief Financial Officer of COMSYS IT Partners, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of COMSYS IT Partners, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [Intentionally omitted pursuant to SEC Release No. 33-8238 and 34-47986];

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2005

/S/    JOSEPH C. TUSA, JR.        

Joseph C. Tusa, Jr.

Senior Vice President and Chief Financial Officer

EX-32

Exhibit 32

COMSYS IT PARTNERS, INC. AND AFFILIATES

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This certification is furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and accompanies this quarterly report on Form 10-Q (the “Form 10-Q”) for the three months ended April 3, 2005 of COMSYS IT Partners, Inc. (the “Issuer”).

In connection with the Form 10-Q, each of the undersigned, Michael T. Willis, the Chairman of the Board, Chief Executive Officer and President of the Issuer, and Joseph C. Tusa, Jr., Senior Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, that to the best of their knowledge:

(i) the Form 10-Q fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Issuer as of the dates and for the periods indicated in the Form 10-Q.

Dated: May 6, 2005.

By: /S/    MICHAEL T. WILLIS        

Name:	Michael T. Willis
Title:	Chairman of the Board, Chief Executive Officer and President
By:	/S/    JOSEPH C. TUSA, JR.
Name:	Joseph C. Tusa, Jr.
Title:	Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to COMSYS IT Partners, Inc. and will be retained by COMSYS IT Partners, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.