**Exhibit 4.1**

 

FIFTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER

 

This FIFTH AMENDMENT TO CREDIT AGREEMENT AND WAIVERdated as of April 14, 2003 (this “Amendment”) is made by and amongAlternative Resources Corporation (“ARC”), ARC Service, Inc., ARCSolutions, Inc., ARC Midholding, Inc., Writers Inc., ARC Technology ManagementLLC, 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 aCredit and Security Agreement dated as of January 31, 2002, as amended by aFirst Amendment to Credit Agreement and Waiver dated as of August 8, 2001, aSecond Amendment to Credit Agreement dated as of August 30, 2002, a ThirdAmendment to Credit Agreement dated as of November 14, 2002, and a Waiver,Joinder and Fourth Amendment to Credit Agreement dated as of December 27, 2002(as so amended, the “Credit Agreement”);

 

WHEREAS,the Borrowers have advised the Lender that a dispute has arisen between theBorrowers and Bluecurrent, Inc. (“Bluecurrent”), regarding accountsreceivable owing from Bluecurrent to the Borrowers and that the Borrowers haveinitiated suit against Bluecurrent to recover amounts owing from Bluecurrent;

 

WHEREAS,as a result of such dispute, the entire amount of accounts receivable owingfrom Bluecurrent to the Borrowers no longer satisfy the criteria of “EligibleAccounts” as set forth in the Credit Agreement, and the Borrowers’ financialresults for the fiscal period ending December 31, 2002 have been adverselyaffected;

 

WHEREAS,after giving effect to the exclusion from the Borrowing Base of the accountsowing from Bluecurrent, the Revolving Credit Exposure exceeds the BorrowingBase, and as a result thereof, an Event of Default is continuing under theCredit Agreement (the “Overadvance Event of Default”);

 

WHEREAS,as a result of adverse effect of the Bluecurrent dispute on the Borrowers’financial results for the fiscal period ending December 31, 2002, the Borrowershave advised the Lender that they failed to satisfy various financial covenantsset forth in the Credit Agreement, which failures constitute additional Eventsof Default under the Credit Agreement (the “December 31, 2002 Events ofDefault”);

 

WHEREAS,the Borrowers have further advised the Lender that as a result of the adverseeffect of the Bluecurrent dispute on the Borrowers’ financial results, theBorrowers will not be able to satisfy the financial covenants set forth in theCredit Agreement for the fiscal quarter ending March 31, 2003;

 

WHEREAS, the Credit Parties have requested that theLender waive the Overadvance Event of Default and the December 31, 2002 Eventsof Default, as provided herein, and amend certain provisions of the CreditAgreement, among other things, to revise the financial covenants containedtherein, and to provide for the Lender to continue to make overadvances for thebenefit of the Borrowers until December 31, 2003, or such later date as theLender may agree in writing, in an aggregate amount outstanding from time totime of up to $2,000,000; and

 

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WHEREAS, the Lender has agreed to waive theOveradvance Event of Default and the December 31, 2002 Events of Default and toamend certain provisions of the Credit Agreement, among other things, to revisethe financial covenants contained therein and to provide for overadvances forthe benefit of the Borrowers until December 31, 2003, or such later date as theLender may agree in writing in an aggregate amount outstanding from time totime of up to $2,000,000 (subject to reductions), all subject to the terms,conditions and limitations set forth herein;

 

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

 

1.                                       CapitalizedTerms.

 

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

 

2.                                       Waiverof Overadvance Event of Default and December 31, 2002 Events of Default.

 

Subjectto the satisfaction of the terms and conditions set forth in Section 5 hereof,the Lender hereby waives the Overadvance Event of Default and the December 31,2002 Events of Default.  The partiesagree that the foregoing waiver is limited solely to (i) the Events of Defaultarising out of the failure of ARC and its Subsidiaries, through the datehereof, to cause the Revolving Credit Exposure to be less than or equal to theBorrowing Base, and (ii) the Events of Default arising out of the Borrowers’failure to satisfy the financial covenants set forth in Section 8.10 of theCredit Agreement for the fiscal period ended December 31, 2002, and nothingherein shall be construed as a waiver of any other presently existing or futureEvent of Default or any failure of the Borrowers to comply with any otherprovision, term or condition of the Loan Documents.

 

3.                                       Amendments.

 

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

 

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

 

(i)                                     Thedefinition of “Borrowing Base” set forth in Section 1.1. is hereby amended byreplacing clause (c) contained in such definition in its entirety with thefollowing clause (c):

 

“(c)                            thelesser of:

 

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

 

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(ii)                                  $4,500,000,minus”

 

(ii)                                  Thefollowing new definition of “Overadvance Amount” is hereby inserted in Section1.1 in appropriate alphabetical order:

 

“‘Overadvance Amount’means (a) at any time during the period from March 7, 2003 through theOveradvance Termination Date, the amount by which the Revolving Credit Exposureexceeds the Borrowing Base at such time; *provided* that (i) the Overadvance Amountshall not at any time exceed the Initial Overadvance Limit (as it may bereduced from time to time), and (ii) for purposes of calculating theOveradvance Amount, the Borrowing Base shall not include any accountsreceivable owing to the Borrowers by Bluecurrent Inc., and (b) at any othertime, $0.  Notwithstanding the terms ofclause (a) above, the Overadvance Amount shall be $0 at any time that (w) theWynnchurch Guaranty shall not be in full force and effect, (x) Wynnchurch shallhave contested the enforceability of the Wynnchurch Guaranty, (y) Wynnchurchshall have delivered notice to any Credit Party or to the Lender of itsintention to terminate the Wynnchurch Guaranty, or (z) Wynnchurch shall havefailed to pay when due any payment required to be paid or shall for any other reasonbe in default under the Wynnchurch Guaranty.

 

(iii)                               Thefollowing new definition of “Initial Overadvance Limit” is hereby inserted inSection 1.1 in appropriate alphabetical order:

 

“‘Initial OveradvanceLimit’ means $2,000,000; provided that the Initial Overadvance Limit shallbe reduced from time to time, upon the payment in cash by Bluecurrent, Inc.(“Bluecurrent”), to the Borrowers of amounts due in respect of accountsreceivable owing by Bluecurrent to the Borrowers, on a dollar for dollar basis inan amount equal to such cash payments; provided that no such reductionin the Initial Overadvance Limit shall become effective until three days afterreceipt by the Lender of such cash payment for application to the outstandingLoans.

 

(iv)                              Thedefinition of “Interest Expense” is hereby deleted in its entirety and replacedwith the following new definition:

 

“‘InterestExpense’ means, for any period, the sum, without duplication, for theBorrowers and all Subsidiaries (determined on a consolidated basis withoutduplication in accordance with GAAP), of the following: (a) all interest inrespect of Indebtedness accrued or paid during such period (whether or notactually paid during such period), but excluding (i) interest accrued inrespect of the Wynnchurch Subordinated Notes and New Wynnchurch SubordinatedNotes that is capitalized and not paid in cash, (ii) capitalized debtacquisition costs (including capitalized fees and expenses related to thisAgreement), and (iii) capitalized costs associated with the accountingtreatment of the Subordinated Debt Financing, plus (b) the net amountspayable (or minus the net amounts receivable) in respect of Hedging Agreementsaccrued during such period 

 

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(whether or not actually paid (or received) duringsuch period) excluding reimbursement of legal fees and other similartransaction costs and excluding payments required by reason of the earlytermination of Hedging Agreements in effect on the date hereof plus (c)all fees, including letter of credit fees and expenses, (but excludingreimbursement of legal fees) incurred hereunder during such period.”

 

(v)                                 Thedefinition of “Fixed Charges” is amended by inserting, after the term“September 30, 2002” contained in clause (d) thereof, the term “and December31, 2002”.

 

(vi)                              Thedefinition of “Gross Availability” is hereby deleted in its entirety andreplaced with the following new definition:

 

“‘GrossAvailability’ means, at any time, the lesser of (a) the Revolving CreditCommitment at such time, and (b) the Borrowing Base plus the Overadvance Amountat such time.”

 

(vii)                           Thefollowing new definition of “New Wynnchurch Subordinated Notes” is herebyinserted in Section 1.1 in appropriate alphabetical order:

 

“‘New WynnchurchSubordinated Notes’ means any Senior Subordinated Secured ConvertiblePromissory Notes, substantially in the form of the Wynnchurch SubordinatedNotes, that may be issued by ARC to Wynnchurch and/or Wynnchurch Capital, Ltd.,in consideration for payments made by Wynnchurch to the Lender pursuant to theWynnchurch Guaranty.”

 

(viii)                        Thefollowing new definition of “Overadvance Termination Date” is hereby insertedin Section 1.1 in appropriate alphabetical order:

 

“‘OveradvanceTermination Date’ means December 31, 2003, or such later date as the Lendermay agree in writing.”

 

(ix)                                Thedefinition of “Subordinated Indebtedness” is hereby deleted in its entirety andreplaced with the following new definition:

 

“‘SubordinatedIndebtedness’ means (a) Indebtedness of the Borrowers pursuant to theSubordinated Debt Financing and the New Wynnchurch Subordinated Notes, and (b)any other Indebtedness of the Credit Parties incurred after the Closing Datewith the consent of the Lender that by its terms (or by the terms of theinstrument under which it is outstanding and to which appropriate reference ismade in the instrument evidencing such Subordinated Indebtedness) is madesubordinate and junior in right of payment to the Loans and to the otherObligations of the Credit Parties by provisions in form and substancereasonably satisfactory to the Lender and Special Counsel.”

 

(x)                                   Thedefinition of “Tangible Capital Base” is hereby deleted in its entirety andreplaced with the following new definition:

 

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“‘TangibleCapital Base’ means, at any time, (a) Tangible Net Worth plus (b)the outstanding principal balance of the Wynnchurch Subordinated Notes and theNew Wynnchurch Subordinated Notes (including interest accrued in respect of theWynnchurch Subordinated Notes and the New Wynnchurch Subordinated Notes thathas been capitalized and not paid in cash).”

 

(xi)                                Thefollowing new definition of “Wynnchurch Guaranty” is hereby inserted in Section1.1 in appropriate alphabetical order:

 

“‘Wynnchurch Guaranty’means the Guaranty Agreement dated as of April 14, 2003, made by Wynnchurch forthe benefit of the Lender, as the same may be amended, supplemented orotherwise modified from time to time.”

 

(xii)                             Thedefinition of “Wynnchurch Subordinated Notes” is hereby deleted in its entiretyand replaced with the following new definition:

 

“‘WynnchurchSubordinated Notes’ means the Senior Subordinated Secured ConvertiblePromissory Notes due January 31, 2009 issued by ARC to Wynnchurch immediatelyprior to the Effective Time for cash proceeds of $10,000,000, as such notes maybe amended from time to time in accordance with Section 8.13.’

 

(b)                                 *Amendmentsto Section 2.1 of the Credit Agreement.*  Section 2.1 of the Credit Agreement is hereby amended as follows:

 

(i)                                     Subsection2.1(a) is hereby deleted in its entirety and replaced with the following newSubsection 2.1(a):

 

“(a)                            Subjectto the terms and conditions set forth herein, the Lender agrees to make Loansto the Borrowers from time to time during the Revolving Credit AvailabilityPeriod in an aggregate principal amount that will not result in the RevolvingCredit Exposure exceeding the lesser of (i) the Revolving Credit Commitment atsuch time and (ii) the Borrowing Base plus the Overadvance Amount at suchtime.  Within the foregoing limits andsubject to the terms and conditions set forth herein, the Borrower may borrow,prepay and reborrow Loans.”

 

(ii)                                  Subsection2.1(d) is hereby deleted in its entirety and replaced with the following newSubsection 2.1(d):

 

“(d)                           Repaymentof Loans.  The Borrowersunconditionally promise to pay to the Lender the then unpaid principal amountof the Loans on the Revolving Credit Maturity Date.  In addition, if following any reduction in the Revolving CreditCommitment or at any other time the Revolving Credit Exposure shall exceed thelesser of (i) the Revolving Credit Commitment at such time, or (ii) theBorrowing Base plus the Overadvance Amount at such time, the Borrowers shallfirst, repay the Loans in an aggregate amount equal to such excess, and second,provide cash collateral for Total LC Exposure as specified inSection 2.4(g) in an aggregate amount equal to such excess.”

 

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(c)                                  *Amendment toSection 2.4 of the Credit Agreement.*  Section 2.4 of the Credit Agreement is hereby amended by deletingSubsection 2.4(b)(ii)(B) in its entirety and replacing it with the followingnew Subsection 2.4(b)(ii)(B):

 

“(B) the Borrowing Baseplus the Overadvance Amount at such time.”

 

(d)                                 *Amendment toSection 2.6 of the Credit Agreement*.  Section 2.6 of the Credit Agreement is hereby amended by deletingSubsection 2.6(a)(i)(y) in its entirety and replacing it with the following newSubsection 2.6(a)(i)(y):

 

“(y) the Borrowing Baseplus the Overadvance Amount, and”

 

(e)                                  *Amendmentsto Section 8.6 of the Credit Agreement.*  Section 8.6 of the Credit Agreement is hereby amended as follows:

 

(i)                                     Subsection8.6(a) is hereby deleted in its entirety and replaced with the following newSubsection 8.6(a):

 

“(a)                            TheCredit Parties will not declare or make any Restricted Junior Payment at anytime; *provided*,*however*,that (i) any Credit Party (other than ARC) may pay dividends to a Borrower, and(ii) so long as (A) no Payment Default (as defined below) exists, (B) noBlockage Period (as defined below) shall be continuing, and (C) no Event ofDefault shall result from the making of such payment, ARC may pay or cause tobe paid to Wynnchurch and any other holders from time to time of the WynnchurchSubordinated Notes or the New Wynnchurch Subordinated Notes, and Wynnchurch andany other holders from time to time of the Wynnchurch Subordinated Notes or theNew Wynnchurch Subordinated Notes may accept and retain regularly scheduledquarterly payments of interest but no principal in respect of the WynnchurchSubordinated Notes and the New Wynnchurch Subordinated Notes on the dates andin the amounts set forth in the applicable Subordinated Debt Documents; *provided*that in no event shall the aggregate amount of interest payments made inrespect of the Wynnchurch Subordinated Notes or the New Wynnchurch SubordinatedNotes during any calendar quarter beginning with the calendar quarter beginningJanuary 1, 2002 and ending with the calendar quarter ending December 31, 2005exceed 1.875% of the aggregate outstanding principal balance of the WynnchurchSubordinated Notes and the New Wynnchurch Subordinated Notes without the priorwritten consent of the Lender, except that (1) if (v) the Lender has received aCompliance Certificate indicating that the Borrowers are in compliance withSection 8.10(b) for the period from January 1, 2002 through June 30, 2002 orany other two consecutive fiscal quarters following the Effective Time, (w) noPayment Default exists, (x) no Blockage Period shall have commenced and becontinuing, (y) no Event of Default shall result from the making of suchpayment, and (z) prior to such payment, the Borrowers shall have deliveredevidence to the Lender that after giving effect to such payment, ExcessAvailability shall equal or exceed $5,000,000, the aggregate amount of interestpayments made in respect of

 

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the Wynnchurch Subordinated Notes during any calendarquarter may total up to (xx) 4.50% of the outstanding principal balance of theWynnchurch Subordinated Notes plus (yy) the amount of prior interestpayments that were not paid in respect of the Wynnchurch Subordinated Notes asa result of the prior existence of a Payment Default or prior commencement of aBlockage Period, and (2) if (w) no Payment Default exists, (x) no BlockagePeriod shall have commenced and be continuing, (y) no Event of Default shallresult from the making of such payment, and (z) prior to such payment, theBorrowers shall have delivered evidence to the Lender that (xx) for the periodof thirty days immediately prior to giving effect to such payment, ExcessAvailability shall have equaled or exceeded, on average, $1,000,000, (yy)during such thirty day period, there shall not have been more than four days onwhich daily Excess Availability shall not have equaled or exceeded $500,000,and (zz) after giving effect to such payment, Excess Availability shall equalor exceed $1,000,000, ARC may pay or cause to be paid to Wynnchurch and anyother holder of the New Wynnchurch Subordinated Notes, and Wynnchurch and anyother holder of the New Wynnchurch Subordinated Notes may accept and retainpayments of principal and interest in respect of the New Wynnchurch SubordinatedNotes (including without limitation the amount of prior interest payments thatwere not paid in respect of the New Wynnchurch Subordinated Notes as a resultof the prior existence of a Payment Default or prior commencement of a BlockagePeriod).  Notwithstanding anything tothe contrary set forth herein, beginning with the calendar quarter beginningJanuary 1, 2006, so long as no Payment Default exists, no Blockage Period shallhave commenced and be continuing, and no Event of Default shall result from themaking of such payment, ARC may pay or cause to be paid to Wynnchurch and anyother holder of the Wynnchurch Subordinated Notes or the New WynnchurchSubordinated Notes, and Wynnchurch and any other holder of the WynnchurchSubordinated Notes or the New Wynnchurch Subordinated Notes may accept andretain regularly scheduled quarterly payments of interest but no principal(unless the payment of principal is otherwise permitted pursuant to exception(2) to Section 8.6(a)(ii) above) in respect of the Wynnchurch SubordinatedNotes and the New Wynnchurch Subordinated Notes on the dates and in the amountsprovided for in the Wynnchurch Subordinated Notes and the New WynnchurchSubordinated Notes, respectively (as in effect on the dates of issuance thereof).”

 

(ii)                                  Subsection8.6(b) is hereby deleted in its entirety and replaced with the following newSubsection 8.6(b):

 

(b)                                 Inaddition to the interest payments permitted under Section 8.6(a) above, (i) solong as no Payment Default exists and no Blockage Period is continuing:  (A) the Borrowers may pay reasonabledirectors’ fees and reimburse Wynnchurch and any other holder of the WynnchurchSubordinated Notes or the New Wynnchurch Subordinated Notes for reasonable costsand expenses incurred by Wynnchurch or such holder in connection with theSubordinated Indebtedness owing to Wynnchurch or such holder, and (B) with thewritten consent of the Lender, which consent shall not be unreasonably withheldor delayed, the

 

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Borrowers may retain Wynnchurch or any other holder ofthe Wynnchurch Subordinated Notes or the New Wynnchurch Subordinated Notes toperform, and pay to Wynnchurch or such holder fees for, advisory services atmarket rates, and (ii) so long as (A) no Payment Default exists, (B) noBlockage Period shall have commenced and be continuing, (C) no Event of Defaultshall result from the making of such payment, and (D) prior to such payment,the Borrowers shall have delivered evidence to the Lender that (x) for theperiod of thirty days immediately prior to giving effect to such payment,Excess Availability on each day shall have equaled or exceeded, on average,$1,000,000, (y) during such thirty day period, there shall not have been morethan four days on which daily Excess Availability shall not have equaled orexceeded $500,000, and (z) after giving effect to such payment, ExcessAvailability shall equal or exceed $1,000,000, ARC may pay or cause to be paidto Wynnchurch Capital, Ltd.,or the holder of the New Wynnchurch SubordinatedNotes, and Wynnchurch Capital, Ltd., or the holder of the New WynnchurchSubordinated Notes may accept and retain fees in an aggregate amount of up to$250,000 in connection with the payment of any obligations under the WynnchurchGuaranty by Wynnchurch.

 

(f)                                    *Amendment toSection 8.10 of the Credit Agreement*.  Section 8.10 of the Credit Agreement is hereby amended andrestated in its entirety to read as follows:

 

“8.10                     **Certain Financial Covenants**.

 

(a)                                  TangibleCapital Base.  ARC and itsSubsidiaries shall not (i) as of March 31, 2003, have a consolidated TangibleCapital Base of less than (1,000,000) or (ii) as of the end of any fiscalquarter commencing with the fiscal quarter ending June 30, 2003, have aconsolidated Tangible Capital Base of less than the sum of (x) (1,000,000) plus(y) on a cumulative basis, 50% of positive consolidated net income (withoutreduction for losses) for each fiscal quarter ending after March 31, 2003.

 

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

 
| **Period**                                     |   | **Minimum  Fixed  Charge Coverage  Ratio** |
|------------------------------------------------|--------|--------------------------------------------|
|                                           |   |                                       |
| July 1, 2003  through September 30, 2003       |   | 1.00 to 1.00                               |
|                                           |   |                                       |
| July 1, 2003  through December 31, 2003        |   | 1.00 to 1.00                               |
|                                           |   |                                       |
| July 1, 2003  through March 31, 2004           |   | 1.00 to 1.00                               |
|                                           |   |                                       |
| July 1, 2003  through June 30, 2004            |   | 1.00 to 1.00                               |
|                                           |   |                                       |
| Thereafter (on a  rolling four quarters basis) |   | 1.00 to 1.00                               |

 

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(c)                                  FixedCharge Coverage Shortfall.  Theamount by which (i) the aggregate Fixed Charges of ARC and its Subsidiaries foreach fiscal period set forth below, exceeds (ii) the total of (A) consolidatedEBITDA of ARC and its Subsidiaries for such period (determined on aconsolidated basis without duplication in accordance with GAAP) minus(B) the aggregate amount of all Non-Financed Capital Expenditures during suchperiod minus (C) the aggregate amount paid, or required to be paid(without duplication), in cash in respect of the current portion of all incometaxes for such period minus (D) the aggregate amount of dividends anddistributions permitted to be paid under Section 8.6 and actually paid in cashduring such period, shall not be greater than the maximum shortfall amount setopposite such fiscal period:

 
| **Fiscal Period**                 |   | **Maximum  Shortfall  Amount** |      |
|-----------------------------------|--------|--------------------------------|-----------|
|                              |   |                           |      |
| January 1 through March  31, 2003 |   | $                              | 1,000,000 |   |
|                              |   |                           |      |
| January 1 through June  30, 2003  |   | $                              | 1,400,000 |   |

 

(d)                                 CapitalExpenditures.  The Credit Partiesshall not make any Capital Expenditures (including, without limitation,incurring any Capital Lease Obligations) which, in the aggregate exceed$2,000,000 at any time during any fiscal year, commencing with the fiscal yearending December 31, 2003.”

 

(g)                                 *Amendment toExhibit D of the Credit Agreement*. Exhibit D to the Credit Agreement is hereby replaced with the new formof Exhibit D attached hereto.

 

(h)                                 *Terminationof Right to Request or Continue Eurodollar Loans.*  Notwithstanding anything to the contrary setforth in the Credit Agreement, the Borrowers shall have no right to request orcontinue Loans as Eurodollar Loans, and to the extent that any Eurodollar Loansremain outstanding as of the date hereof, such Loans shall be converted intoBase Rate Loans as of the date hereof.

 

4.                                       NoDefault; Representations and Warranties, etc.

 

TheBorrowers hereby represent, warrant and confirm that: (a) the representationsand warranties of the Credit Parties contained in Article 5 of the CreditAgreement are true and correct on and as of the date hereof as if made on suchdate (except to the extent that such representations and warranties expresslyrelate to an earlier date); (b) after giving effect to this Amendment, theBorrowers are in compliance with all of the terms and provisions set forth inthe Credit Agreement and the other Loan Documents; (c) after giving effect tothis Amendment, no

 

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Default hasoccurred and is continuing; and (d) the execution, delivery andperformance by the Borrowers of this Amendment (i) have been duly authorized byall necessary action on the part of the Borrowers, (ii) will not violate anyapplicable law or regulation or the organizational documents of any Borrower,(iii) will not violate or result in a default under any indenture, agreement orother instrument binding on any Borrower or any of its assets, includingwithout limitation, any Subordinated Debt Document, and (iv) do not require anyconsent, waiver or approval of or by any Person (other than the Lender) whichhas not been obtained.

 

5.                                       Conditionsto Effectiveness.

 

Theeffectiveness of this Amendment shall be subject to the satisfaction of thefollowing conditions precedent:

 

(a)                                  TheLender shall have received counterparts of this Amendment duly executed by eachof the Borrowers;

 

(b)                                 TheLender shall have received a Certificate of the Secretary of ARC, certifyingthat this Amendment has been duly authorized by the Boards of Directors of ARCand each of its Subsidiaries;

 

(c)                                  TheBorrowers shall have delivered to the Lender a guaranty made by Wynnchurch (the“Wynnchurch Guaranty”) of the Borrower’s obligations in respect of theOveradvance Amount, which guaranty shall be in form and substance satisfactoryto the Lender;

 

(d)                                 TheLender shall have received a favorable written opinion of counsel toWynnchurch, covering such matters relating to Wynnchurch and the WynnchurchGuaranty, as the Lender shall reasonably request;

 

(e)                                  TheBorrowers and Wynnchurch shall have executed and delivered to the Lender anamendment to the Subordination and Intercreditor Agreement reflecting theamendments to Section 8.6 of the Credit Agreement contained in this Amendment.

 

(f)                                    TheBorrowers shall have delivered to the Lender evidence that Wynnchurch hasexecuted and delivered to the Borrowers a written waiver with respect to theSubordinated Debt Documents in form and substance reasonably acceptable to theLender, pursuant to which Wynnchurch shall have waived all existing defaults ofthe Borrowers under the Subordinated Debt Documents;

 

(g)                                 TheBorrowers shall have reimbursed the Lender for all reasonable costs andexpenses, including reasonable legal fees and disbursements, incurred by theLender in connection with this Amendment and the transactions contemplatedhereby; and

 

(h)                                 TheLender shall have received from the Borrowers, an amendment fee in an amountequal to $50,000.

 

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6.                                       Miscellaneous.

 

(a)                                  Exceptas specifically amended hereby, all of the terms and provisions of the CreditAgreement, the other Loan Documents and all related documents, shall remain infull force and effect.  Nothingcontained herein shall constitute a waiver of any provision of the Credit Agreementor the other Loan Documents, except for the waiver of the Overadvance Event ofDefault expressly set forth herein.

 

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

 

(c)                                  ThisAmendment shall be governed by the laws of The Commonwealth of Massachusettsand shall be binding upon and inure to the benefit of the parties hereto andtheir respective successors and assigns.

 

[Remainder of Page Left Intentionally Blank]

 

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INWITNESS WHEREOF, the parties hereto have caused this Amendment to be dulyexecuted by their respective authorized officers as of the day and year firstabove written.

 

 
|   | BORROWERS                          |
|--------|------------------------------------|
|   |                               |
|   | ALTERNATIVE  RESOURCES CORPORATION |
|   |                               |
|   | By:                                |   |   |
|   | Name:                              |
|   | Title:                             |
|   |                               |
|   | ARC SERVICE,  INC.                 |
|   |                               |
|   | By                                 |   |   |
|   | Name:                              |
|   | Title:                             |
|   |                               |
|   | ARC  SOLUTIONS, INC.               |
|   |                               |
|   | By                                 |   |   |
|   | Name:                              |
|   | Title:                             |
|   |                               |
|   | ARC  MIDHOLDING, INC.              |
|   |                               |
|   | By                                 |   |   |
|   | Name:                              |
|   | Title:                             |
|   |                               |
|   | WRITERS  INC.                      |
|   |                               |
|   | By                                 |   |   |
|   | Name:                              |
|   | Title:                             |
|        |                                    |  |  |  |

 

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|   | ARC  TECHNOLOGY MANAGEMENT LLC                            |
|--------|-----------------------------------------------------------|
|   |                                                      |
|   | By:  ARC SERVICE, INC., its Manager and sole  member |
|   |                                                      |
|   | By:                                                       |   |   |
|   | Name:                                                     |
|   | Title:                                                    |
|   |                                                      |
|   | ARC  STAFFING MANAGEMENT LLC                              |
|   |                                                      |
|   | By:  ARC SERVICE, INC., its Manager and sole  member |
|   |                                                      |
|   | By:                                                       |   |   |
|   | Name:                                                     |
|   | Title:                                                    |
|   |                                                      |
|   | ARC  SHARED SERVICES LLC                                  |
|   |                                                      |
|   | By:  ARC SERVICE, INC., its Manager and sole  member |
|   |                                                      |
|   | By:                                                       |   |   |
|   | Name:                                                     |
|   | Title:                                                    |

 

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|   | LENDER                                       |
|--------|----------------------------------------------|
|   |                                         |
|   | FLEET CAPITAL CORPORATION, as Lender         |
|   |                                         |
|   | By                                           |   |   |
|   | Name:                                        |
|   | Title:                                       |
|   |                                         |
|   | ISSUING LENDER                               |
|   |                                         |
|   | FLEET NATIONAL BANK, as Issuing Lender       |
|   |                                         |
|   | By                                           |   |   |
|   | Name:                                        |
|   | Title:                                       |
|   |                                         |
|   | CASH MANAGEMENT BANK                         |
|   |                                         |
|   | FLEET NATIONAL BANK, as Cash Management Bank |
|   |                                         |
|   | By                                           |   |   |
|   | Name:                                        |
|   | Title:                                       |

 

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EXHIBIT D

 

[New Form of Exhibit D toCredit Agreement]

 

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