**Exhibit4.2**

 

SECOND AMENDMENT TO GUARANTY AGREEMENT

 

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

 

W I T N E S S E TH

 

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

 

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

 

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

 

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

 

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

 

WHEREAS, it is acondition to the Lender’s agreement to enter into the Eighth Amendment thatWynnchurch shall have agreed to amend the Guaranty Agreement to extend the

 

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term thereof and to eliminate the automatic reduction in the amount ofOveradvances guarantied thereunder resulting from payments made in respect ofBluecurrent Receivables;

 

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

 

1.             Capitalized Terms.

 

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

 

2.             Amendments toGuaranty Agreement.

 

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

 

(a)           *Amendment to Section 2(b) of theGuaranty Agreement*.  Section2(b) of the Guaranty Agreement is hereby amended and restated in its entiretyas follows:

 

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

 

(b)           *Amendment to Section 3(a) of theGuaranty Agreement*.  Section3(a) of the Guaranty Agreement is hereby amended and restated in its entiretyas follows:

 

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

 

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

 

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

 

3.             Ratification;Acknowledgement.

 

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

 

4.             Representationsand Warranties.

 

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

 

5.             Successors andAssigns.

 

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

 

6.             Counterparts;Governing Law.

 

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

 

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7.             Fee.

 

[In consideration for theGuarantors’ entry into this Amendment, ARC agrees to pay Wynnchurch Capital,Ltd., the amount of One Hundred Twenty Five Thousand Dollars ($125,000) (the “AmendmentPayment”), payable in the manner set forth in this Section 7, and Lenderhereby consents to such payment.  TheAmendment Payment shall be treated as if it is an additional $125,000 ofinterest payable pursuant to that certain Note dated as of January 31, 2002, asamended, of ARC to Wynnchurch Canada, and that certain Note dated as of January31, 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 interestaccrued pursuant to the Notes.  Upon anypayment of interest to Wynnchurch Canada and Wynnchurch USA pursuant to theNotes, ARC shall also pay Wynnchurch Capital, Ltd. its pro rata share of theAmendment 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 IntercreditorAgreement dated as of January 31, 2002, among the Guarantors, the Lender andthe Borrowers (as amended, the “Subordination Agreement”) and shall bedeferred and not be paid, except as permitted under the terms of the CreditAgreement and the Subordination Agreement, treating the payment of theAmendment Payment as the payment of additional interest pursuant to the Notes.]

 

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INWITNESS WHEREOF, the parties have executed this Amendment as a sealedinstrument 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 |
|        |                                            |  |  |  |  |  |  |  |

 

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The undersignedacknowledge the foregoing Amendment and agree to be bound by the terms ofSection 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                         |                     |

 

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| 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                                          |                         |

 

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