Exhibit
4.2


 


SECOND AMENDMENT TO GUARANTY AGREEMENT


 


This SECOND
AMENDMENT TO GUARANTY AGREEMENT dated as of November  14, 2003 (this “Amendment”),
is made by WYNNCHURCH CAPITAL PARTNERS, L.P., a Delaware limited partnership (“Wynnchurch
USA”, and WYNNCHURCH CAPITAL PARTNERS CANADA, L.P., an Alberta, Canada
limited partnership (“Wynnchurch Canada”, and collectively with
Wynnchurch USA, the “Guarantors”), and FLEET CAPITAL CORPORATION (the “Lender”).


 


W I T N E S S E T
H


 


WHEREAS, Alternative
Resources Corporation (“ARC”), ARC Service, Inc., ARC Solutions, Inc.,
ARC Midholding, Inc., Writers Inc., ARC Technology Management LLC, ARC Staffing
Management LLC, and ARC Shared Services LLC (collectively, the “Borrowers”)
and the Lender are parties to a Credit and Security Agreement dated as of
January 31, 2002 (as amended, supplemented or otherwise modified from time to
time, including, without limitation, by the Eighth Amendment described below,
the “Credit Agreement”), pursuant to which the Lender has agreed, subject
to the terms and conditions set forth therein, to make loans and other
extensions of credit to the Borrowers;


 


WHEREAS, the Credit Agreement as in effect prior to
the Eighth Amendment provides, among other things, for the Lender to make
overadvances (the “Overadvances”) for the benefit of the Borrowers until
March 31, 2004, or such later date as the Lender may agree in writing (the “Overadvance
Termination Date”), in an aggregate amount outstanding from time to time of
up to $2,000,000 (the “Overadvance Limit”), as reduced from time to
time;


 


WHEREAS, Wynnchurch has
executed and delivered a Guaranty Agreement dated as of April 14, 2003, as
amended by a First Amendment to Guaranty Agreement dated as of July 15, 2003
(the “Guaranty Agreement”), pursuant to which Wynnchurch has guarantied
to the Lender the repayment of the Overadvances up to the Overadvance Limit, as
reduced from time to time;


 


WHEREAS, the terms of the
Credit Agreement (as in effect prior to the Eighth Amendment) and the Guaranty
Agreement respectively provide that the Overadvance Limit and the amount of
Overadvances guarantied by Wynnchurch shall respectively be reduced from time
to time upon the payment in cash by Bluecurrent, Inc. (“Bluecurrent”) to
the Borrowers of amounts due in respect of accounts receivable owing by
Bluecurrent to the Borrowers (the “Bluecurrent Receivables”), on a
dollar for dollar basis in an amount equal to such payments;


 


WHEREAS, the Borrowers
have requested that the Lender enter into an Eighth Amendment to Credit
Agreement dated as of the date hereof (the “Eighth Amendment”) whereby
the Credit Agreement would be amended, among other things, to (i) extend the
Overadvance Termination Date, and (ii) eliminate the automatic reduction of the
Overadvance Limit resulting from the payment of Bluecurrent Receivables;


 


WHEREAS, it is a
condition to the Lender’s agreement to enter into the Eighth Amendment that
Wynnchurch shall have agreed to amend the Guaranty Agreement to extend the


 

















 


term thereof and to eliminate the automatic reduction in the amount of
Overadvances guarantied thereunder resulting from payments made in respect of
Bluecurrent Receivables;


 


NOW,
THEREFORE, in order to induce the Lender to enter into the Eight Amendment and
to continue to make Loans and Overadvances to the Borrowers as provided in the
Credit Agreement, and for other good and valuable consideration, receipt of
which is hereby acknowledged by the Guarantors, the Guarantors hereby agree as
follows:


 


1.             Capitalized Terms.


 


Capitalized terms used
herein which are defined in the Guaranty Agreement have the same meanings
herein as therein, except to the extent that such meanings are amended hereby.


 


2.             Amendments to
Guaranty Agreement.


 


The Guarantors and the
Lender hereby agree that the Guaranty Agreement is amended as follows:


 


(a)           Amendment to Section 2(b) of the
Guaranty Agreement.  Section
2(b) of the Guaranty Agreement is hereby amended and restated in its entirety
as follows:


 


“(b)         Notwithstanding any
provision of this Agreement to the contrary, the obligations of the Guarantors
under this Agreement shall not exceed the sum of (i) $2,000,000 (the “Initial
Guaranty Amount”), plus (ii) in the event any payment to be made by
the Guarantors hereunder is not made when due, interest at the Post-Default
Rate accruing on such unpaid amount from the date such amount became due
hereunder, plus (iii) the reasonable expenses (including fees and
expenses of counsel), if any, incurred by the Lender in enforcement of and
collection under this Agreement.”


 


(b)           Amendment to Section 3(a) of the
Guaranty Agreement.  Section
3(a) of the Guaranty Agreement is hereby amended and restated in its entirety
as follows:


 


“(a)         Upon failure by the
Borrowers punctually to pay or perform the Guaranteed Obligation on the Overadvance
Termination Date or on any date prior to the Overadvance Termination Date that
the entire balance of the Loans shall become due as a result of acceleration or
the occurrence of events described in subsections 9.1(g) or (h) of the Credit
Agreement, the Lender may make demand upon the Guarantors for the payment or
performance of the Guaranteed Obligation (as outstanding on Overadvance
Termination Date or such prior date as the entire balance of the Loans shall
become due, as applicable) and the Guarantors bind and oblige themselves to
make such payment or performance not later than 20 days following such demand
by Lender.


 


2

















 


(c)           Amendment to Section 7 of the Guaranty
Agreement.  Section 7 of the
Guaranty Agreement is hereby amended and restated in its entirety as follows:


 


“7.           Termination.  This Agreement shall terminate upon the
earlier to occur of: (a) such time as (i) all of the Borrower’s obligations
under the Credit Agreement have been paid in full, (ii) no Letters of Credit
remain outstanding, and (iii) the Revolving Credit Commitment has terminated or
expired, and (b) such time as all of the Guarantors’ obligations under this
Agreement have been paid in full.”


 


3.             Ratification;
Acknowledgement.


 


The Guaranty Agreement, as modified and amended by
this Amendment, remains in full force and effect and is hereby ratified and
confirmed in all respects except that, upon and after the effectiveness of the
Eighth Amendment, each reference in the Guaranty Agreement to the Credit
Agreement shall mean and be a reference to the Credit Agreement as amended by
the Eighth Amendment.  The Guarantors
hereby acknowledge that, as a result of the Eighth Amendment, the “Overadvance
Termination Date” under the Credit Agreement has been extended to March 31,
2004 or such later date as the Lender may agree in writing.


 


4.             Representations
and Warranties.


 


The Guarantors hereby represent, warrant and confirm
that: (a) the representations and warranties of the Guarantors contained in the
Guaranty Agreement are true and correct on and as of the date hereof as if made
on such date (except to the extent that such representations and warranties
expressly relate to an earlier date); (b) the Guarantors are in compliance with
all of the covenants, terms and provisions set forth in the Guaranty Agreement;
and (c) the execution, delivery and performance by the Guarantors of this
Amendment (i) have been duly authorized by all necessary action on the part of
the Guarantors, (ii) will not violate any applicable law or regulation or the
organizational documents of any Guarantor, (iii) will not violate or result in
a default under any indenture, agreement or other instrument binding on any
Guarantor or any of its assets, and (iv) do not require any consent, waiver or
approval of or by any Person which has not been obtained.


 


5.             Successors and
Assigns.


 


This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns


 


6.             Counterparts;
Governing Law.


 


This Amendment may be executed in any number of
counterparts which together shall constitute one agreement and delivery of an
executed signature page by facsimile transmission shall be effective as
delivery of a manually executed counterpart. 
This Amendment shall be governed and construed in accordance with the
laws (other than the conflict of laws rules) of the Commonwealth of
Massachusetts.


 


3

















 


7.             Fee.


 


[In consideration for the
Guarantors’ entry into this Amendment, ARC agrees to pay Wynnchurch Capital,
Ltd., the amount of One Hundred Twenty Five Thousand Dollars ($125,000) (the “Amendment
Payment”), payable in the manner set forth in this Section 7, and Lender
hereby consents to such payment.  The
Amendment Payment shall be treated as if it is an additional $125,000 of
interest payable pursuant to that certain Note dated as of January 31, 2002, as
amended, of ARC to Wynnchurch Canada, and that certain Note dated as of January
31, 2002, as amended, of ARC to Wynnchurch USA (such notes collectively, the “Notes”),
in each case accrued as of the date hereof. 
The Amendment Payment shall accrue interest as if it were interest
accrued pursuant to the Notes.  Upon any
payment of interest to Wynnchurch Canada and Wynnchurch USA pursuant to the
Notes, ARC shall also pay Wynnchurch Capital, Ltd. its pro rata share of the
Amendment Payment (as well as any interest accrued thereon), in cash.
Notwithstanding the foregoing, the Amendment Payment shall be deemed to be a
“Subordinated Obligation” pursuant to the Subordination and Intercreditor
Agreement dated as of January 31, 2002, among the Guarantors, the Lender and
the Borrowers (as amended, the “Subordination Agreement”) and shall be
deferred and not be paid, except as permitted under the terms of the Credit
Agreement and the Subordination Agreement, treating the payment of the
Amendment Payment as the payment of additional interest pursuant to the Notes.]


 


4

















 


IN
WITNESS WHEREOF, the parties have executed this Amendment as a sealed
instrument as of the date first above written.


 


	
   

  	
  GUARANTORS:

  
	
   

  	
  WYNNCHURCH CAPITAL
  PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Wynnchurch Partners,
  L.P., its General

  Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Wynnchurch Management
  Inc.,

  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Hatherly

  	
   

  
	
   

  	
  Name: John Hatherly

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WYNNCHURCH CAPITAL
  PARTNERS

  CANADA, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Wynnchurch Partners
  Canada, L.P.,

  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Wynnchurch GP Canada,
  Inc.,

  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ John Hatherly

  	
   

  
	
   

  	
  Name: John Hatherly

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  FLEET CAPITAL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Christopher Godfrey

  	
   

  
	
   

  	
   

  	
  Name: Christopher
  Godfrey

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
									



 

















 


The undersigned
acknowledge the foregoing Amendment and agree to be bound by the terms of
Section 7 thereof.


 


	
  ALTERNATIVE RESOURCES
  CORPORATION

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   /s/ Steven Purcell

  	
   

  	
   

  
	
  Name: Steven Purcell

  	
   

  
	
  Title: CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ARC SERVICE, INC.

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   /s/ Steven Purcell

  	
   

  	
   

  
	
  Name: Steven Purcell

  	
   

  
	
  Title: CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ARC SOLUTIONS, INC.

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   /s/ Steven Purcell

  	
   

  	
   

  
	
  Name: Steven Purcell

  	
   

  
	
  Title: CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ARC MIDHOLDING, INC.

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   /s/ Steven Purcell

  	
   

  	
   

  
	
  Name: Steven Purcell

  	
   

  
	
  Title: CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  WRITERS INC.

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   /s/ Steven Purcell

  	
   

  	
   

  
	
  Name: Steven Purcell

  	
   

  
	
  Title: CFO

  	
   

  



 

















 


	
  ARC TECHNOLOGY
  MANAGEMENT LLC

  	
   

  
	
   

  	
   

  
	
  By:  ARC SERVICE, INC., its Manager and sole
  member

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   /s/ Marino Petropoulos

  	
   

  	
   

  
	
  Name: Marino
  Petropoulos

  	
   

  
	
  Title: Treasurer

  	
   

  
	
   

  	
   

  
	
  ARC STAFFING MANAGEMENT
  LLC

  	
   

  
	
   

  	
   

  
	
  By:  ARC SERVICE, INC., its Manager and sole
  member

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   /s/ Marino Petropoulos

  	
   

  	
   

  
	
  Name: Marino
  Petropoulos

  	
   

  
	
  Title: Treasurer

  	
   

  
	
   

  	
   

  
	
  ARC SHARED SERVICES LLC

  	
   

  
	
   

  	
   

  
	
  By:  ARC SERVICE, INC., its Manager and sole
  member

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   /s/ Marino Petropoulos

  	
   

  	
   

  
	
  Name: Marino
  Petropoulos

  	
   

  
	
  Title: Treasurer