Exhibit
4.1


 


EIGHTH AMENDMENT
TO CREDIT AGREEMENT AND WAIVER


 


This EIGHTH AMENDMENT TO
CREDIT AGREEMENT AND WAIVER dated as of November  14, 2003 (this “Amendment”),
is made by and among 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 Fleet Capital Corporation (the
“Lender”).


 


WHEREAS, the Borrowers
and the Lender are parties to a Credit and Security Agreement dated as of
January 31, 2002, as amended by a First Amendment to Credit Agreement and
Waiver dated as of August 8, 2001, a Second Amendment to Credit Agreement dated
as of August 30, 2002, a Third Amendment to Credit Agreement dated as of
November 14, 2002, a Waiver, Joinder and Fourth Amendment to Credit Agreement
dated as of December 27, 2002, a Fifth Amendment to Credit Agreement and Waiver
dated as of April 14, 2003, a Sixth Amendment to Credit Agreement dated as of
July 15, 2003, and a Seventh Amendment to Credit Agreement and Waiver dated as
of August 14, 2003 (as so amended, the “Credit Agreement”);


 


WHEREAS, ARC and its
Subsidiaries failed to satisfy (a) the Tangible Capital Base covenant set forth
in Section 8.10(a) of the Credit Agreement for the fiscal quarter ended
September 30, 2003 and (b) the Fixed Charge coverage shortfall covenant set
forth in Section 8.10(c) for the nine month fiscal period ended September 30,
2003, and each such failure constitutes an Event of Default under Section
9.1(c) of the Credit Agreement (collectively, the “September 30, 2003 Events
of Default”);


 


WHEREAS, the Credit
Parties have requested that the Lender waive the September 30, 2003 Events of
Default as provided herein, and amend certain provisions of the Credit
Agreement; and


 


WHEREAS, the Lender has
agreed to waive the September 30, 2003 Events of Default and to amend certain
provisions of the Credit Agreement, all subject to the terms, conditions and
limitations set forth herein;


 


NOW, THEREFORE, in
consideration of the foregoing and the agreements contained herein, the parties
hereby agree as follows:


 


1.             Capitalized Terms.


 


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


 


2.             Waiver of
September 30, 2003 Events of Default.


 


Subject to the
satisfaction of the terms and conditions set forth in Section 5 hereof, the
Lender hereby waives the September 30, 2003 Events of Default.  The parties agree that the foregoing waiver
is limited solely to the Events of Default arising out of the failure of ARC
and its Subsidiaries to satisfy (a) the Tangible Capital Base covenant set
forth in Section 8.10(a) of the Credit Agreement for the fiscal quarter ended
September 30, 2003 and (b) the Fixed Charge coverage shortfall covenant set
forth in Section 8.10(c) for the nine month fiscal period ending September 30,
2003, and nothing herein shall be construed as a waiver of any other presently
existing or future Event of Default (including without limitation, any Event of
Default caused by reason of the failure of the Borrowers to comply with Section
8.10(a) or Section 8.10(c) of the Credit Agreement, as amended hereby, on any
other occasion or for any


 

















 


other period) or any
failure of the Borrowers to comply with any other provision, term or condition
of the Loan Documents.


 


3.             Amendments.


 


Subject to the
satisfaction of the terms and conditions set forth in Section 5 hereof, the
Borrowers and the Lender agree that the Credit Agreement is hereby amended,
effective as of the date hereof, as follows:


 


(a)           Amendments
to Section 1.1 of the Credit Agreement.  Section 1.1 of the Credit Agreement is hereby amended as follows:


 


(i)            The definition of “Borrowing Base” set forth in
Section 1.1 of the Credit Agreement is hereby amended by replacing clause (c)
contained therein in its entirety with the following new clause (c):


 


“(c)         the lesser of:


 


(i)            70% of the aggregate
of (x) Billed Restricted Product   Line
Accounts and (y) Unbilled Restricted Product Line      Accounts, and


 


(ii)           $3,000,000, minus”


 


(ii)           The definition of “Initial Overadvance Limit” set
forth in Section 1.1 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:


 


“‘Initial Overadvance
Limit’ means $2,000,000.”


 


(iii)          The definition of “LC Sublimit” set
forth in Section 1.1 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:


 


“LC Sublimit” means
a sublimit of Revolving Credit Commitment available for the issuance of Letters
of Credit for the account of the Borrowers in an aggregate maximum amount
available to be drawn equal to (a) $2,100,000, during the period from November
14, 2003 through January 15, 2004, and (b) $2,000,000 at all other times.


 


(iv)          The definition of “Overadvance Termination Date” set
forth in Section 1.1 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:


 


“‘Overadvance
Termination Date’ means March 31, 2004, or such later date as the Lender
may agree in writing.”


 


(b)           Amendment to
Section 8.10 of the Credit Agreement.  Section 8.10 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:


 


“8.10       Certain Financial Covenants.


 


(a)           Tangible Capital
Base.  ARC and its Subsidiaries
shall not (i) as of December 31, 2003, have a consolidated Tangible Capital
Base of less than ($8,500,000) or (ii) as of the end of any fiscal quarter
commencing with the fiscal quarter ending March 31, 2004, have a consolidated
Tangible Capital Base of less than the sum of (x) ($8,500,000) plus (y)
on a cumulative basis, 50% of positive consolidated net income (without
reduction for losses) for each fiscal quarter ending after December 31, 2003.


 


(b)           Fixed Charge
Coverage Ratio.  The Fixed Charge
Coverage Ratio of ARC and its Subsidiaries shall not at any time during any
period set forth below be less than the ratio set opposite such period:


 


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  Period

  	
   

  	
  Minimum
  Fixed

  Charge Coverage

  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July
  1, 2004 through September 30, 2004

  	
   

  	
  1.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July
  1, 2004 through December 31, 2004

  	
   

  	
  1.00 to 1.00

  	
   

  



 


(c)           Fixed Charge
Coverage Shortfall.  The amount by
which (i) the aggregate Fixed Charges of ARC and its Subsidiaries for each
fiscal period set forth below, exceeds (ii) the total of (A) consolidated
EBITDA of ARC and its Subsidiaries for such period (determined on a
consolidated basis without duplication in accordance with GAAP) minus
(B) the aggregate amount of all Non-Financed Capital Expenditures during such
period minus (C) the aggregate amount paid, or required to be paid
(without duplication), in cash in respect of the current portion of all income
taxes for such period minus (D) the aggregate amount of dividends and
distributions permitted to be paid under Section 8.6 and actually paid in cash
during such period, shall not be greater than the maximum shortfall amount set
opposite such fiscal period:


 


	
  Fiscal Period

  	
   

  	
  Maximum
  Shortfall

  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October
  1, 2003 through December 31, 2003

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  October
  1, 2003 through March 31, 2004

  	
   

  	
  $

  	
  1,801,000

  	
   

  
	
  October
  1, 2003 through June 30, 2004

  	
   

  	
  $

  	
  1,867,000

  	
   

  



 


(d)           Capital Expenditures.  The Credit Parties shall not make any
Capital Expenditures (including, without limitation, incurring any Capital
Lease Obligations) which, in the aggregate exceed $50,000 at any time during
any fiscal quarter, commencing with the fiscal quarter ending December 31,
2003.”


 


(c)           Amendment of
Exhibit D to the Credit Agreement. 
Exhibit D to the Credit Agreement is hereby replaced with the new form
of Exhibit D attached thereto.


 


4.             No Default;
Representations and Warranties, etc.


 


The
Borrowers hereby represent, warrant and confirm that: (a) the representations
and warranties of the Credit Parties contained in Article 5 of the Credit
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) after giving effect to this Amendment, the
Borrowers are in compliance with all of the terms and provisions set forth in
the Credit Agreement and the other Loan Documents; (c) after giving effect to
this Amendment, no Default has occurred and is continuing; and (d) the
execution, delivery and performance by the Borrowers of this Amendment (i) have
been duly authorized by all necessary action on the part of the Borrowers, (ii)
will not violate any applicable law or regulation or the organizational
documents of any Borrower, (iii) will not violate or result in a default


 


3

















 


under any indenture,
agreement or other instrument binding on any Borrower or any of its assets,
including without limitation, any Subordinated Debt Document, and (iv) do not
require any consent, waiver or approval of or by any Person (other than the
Lender) which has not been obtained. 
The Borrowers hereby acknowledge that pursuant to the terms of the Fifth
Amendment to the Credit Agreement, and notwithstanding anything to the contrary
set forth in the Credit Agreement, the Borrowers have no right to request or
continue Loans as Eurodollar Loans.


 


5.             Conditions to
Effectiveness.


 


The effectiveness of this Amendment shall be subject
to the satisfaction of the following conditions precedent:


 


(a)           The
Lender shall have received counterparts of this Amendment duly executed by each
of the Borrowers;


 


(b)           The
Lender shall have received a Certificate of the Secretary of ARC, certifying
that this Amendment has been duly authorized by the Boards of Directors of ARC
and each of its Subsidiaries;


 


(c)           The
Borrowers shall have delivered to the Lender evidence that Wynnchurch has
executed and delivered to the Borrowers a written amendment and waiver with
respect to the Subordinated Debt Documents in form and substance reasonably
acceptable to the Lender, pursuant to which Wynnchurch shall have waived all
existing defaults of the Borrowers under the Subordinated Debt Documents and amended
the financial covenant provisions of the Subordinated Debt Documents in a
manner consistent with the financial covenant amendments set forth in this
Amendment;


 


(d)           The
Borrowers and Wynnchurch shall have executed and delivered to the Lender an amendment
to the Wynnchurch Guaranty, in form and substance satisfactory to the Lender,
eliminating the automatic reduction of the amount of Overadvances guarantied
thereunder resulting from payments made in respect of accounts receivable owing
by Bluecurrent, and extending the term of the Wynnchurch Guaranty.


 


(e)           The
Lender shall have received from Wynnchurch a certificate pursuant to which
Wynnchurch shall have (i) ratified and confirmed its obligations under the
Wynnchurch Guaranty, (ii) made the representations and warranties contained in
the first sentence of Section 9(e) of the Wynnchurch Guaranty as of September
30, 2003, (iii) certified as to the continued veracity of the representations
and warranties contained in Section 9 of the Wynnchurch Guaranty, other than
those representations and warranties contained in the first sentence of Section
9(e) of the Wynnchurch Guaranty, and (iv) shall have confirmed Wynnchurch’s
compliance with Section 11 of the Wynnchurch Guaranty;


 


(f)            The
Lender shall have received a written acknowledgement from Wynnchurch with
respect to the existence of the September 30, 2003 Events of Default and the
modifications to the Credit Agreement contemplated by this Amendment; and


 


(g)           The
Lender shall have received from the Borrowers, an amendment fee in an amount
equal to $50,000.


 


6.             Miscellaneous.


 


(a)           Except
as specifically amended hereby, all of the terms and provisions of the Credit
Agreement, the other Loan Documents and all related documents, shall remain in
full force and effect.  Nothing
contained herein shall constitute a waiver of any provision of the Credit
Agreement or the other


 


4

















 


Loan Documents,
except for the waiver of the September 30, 2003 Events of Default expressly set
forth herein.


 


(b)           This
Amendment may be executed in any number of counterparts, each of which, when
executed and delivered, shall be an original, but all counterparts shall
together constitute one instrument. 
Delivery of an executed signature page hereto by facsimile transmission
shall be effective as delivery of a manually executed counterpart hereof.


 


(c)           This
Amendment shall be governed by the laws of The Commonwealth of Massachusetts
and shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns.


 


(d)           The
Borrowers shall reimburse the Lender for all reasonable costs and expenses,
including reasonable legal fees and disbursements, incurred by the Lender in
connection with this Amendment and the transactions contemplated hereby.


 


[Remainder of Page
Left Intentionally Blank]


 


5

















 


IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed by their
respective authorized officers as of the day and year first above written.


 


	
   

  	
  BORROWERS

  
	
   

  	
   

  
	
   

  	
  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 Petropaulos

  	
   

  
	
   

  	
  Name: Marino
  Petropaulos

  
	
   

  	
  Title: Treasurer

  
	
   

  	
   

  
	
   

  	
  ARC STAFFING MANAGEMENT
  LLC

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  By:  

  	
   /s/ Marino Petropaulos

  	
   

  
	
   

  	
  Name: Marino
  Petropaulos

  
	
   

  	
  Title: Treasurer

  
	
   

  	
   

  
	
   

  	
  ARC SHARED SERVICES LLC

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  By:  

  	
   /s/ Marino Petropaulos

  	
   

  
	
   

  	
  Name: Marino
  Petropaulos

  
	
   

  	
  Title: Treasurer

  



 

















 


	
   

  	
  LENDER

  
	
   

  	
   

  
	
   

  	
  FLEET CAPITAL
  CORPORATION, as Lender

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Christopher Godfrey

  	
   

  
	
   

  	
  Name: Christopher
  Godfrey

  
	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ISSUING LENDER

  
	
   

  	
   

  
	
   

  	
  FLEET NATIONAL BANK, as
  Issuing Lender

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Christopher Godfrey

  	
   

  
	
   

  	
  Name: Christopher
  Godfrey

  
	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CASH MANAGEMENT BANK

  
	
   

  	
   

  
	
   

  	
  FLEET NATIONAL BANK, as
  Cash Management Bank

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Christopher Godfrey

  	
   

  
	
   

  	
  Name: Christopher
  Godfrey

  
	
   

  	
  Title: Senior Vice
  President