Document:

Exhibit 4.2

 

FIFTH AMENDMENT TO SECURITIES
PURCHASE AGREEMENT

AND WAIVER

 

This FIFTH AMENDMENT TO SECURITIES PURCHASE AGREEMENT
AND WAIVER dated as of April 14, 2003 (this “Amendment”), among
Alternative Resources Corporation, a Delaware corporation  (the “Company”), with headquarters
located at 600 Hart Road, Suite 300, Barrington, Illinois 60010,  Wynnchurch Capital Partners, L.P., a
Delaware limited partnership and Wynnchurch Capital Partners Canada, L.P., an
Alberta, Canada limited partnership (each a “Purchaser,” and
collectively, the “Purchasers”), amends the Securities Purchase
Agreement dated as of January 31, 2002, as amended by the First Amendment to
Securities Purchase Agreement and Waiver dated August 8, 2002, the Second
Amendment to Securities Purchase Agreement dated August 30, 2002, the Third
Amendment to Securities Purchase Agreement and Waiver dated as of November 14,
2002, and the Fourth Amendment to Securities Purchase Agreement and Consent
dated as of December 27, 2002 (such Securities Purchase Agreement, as so
amended, the “Securities Purchase Agreement”), each among the Company
and the Purchasers.

 

WHEREAS, the Company has advised Purchasers that the
Company failed to satisfy various financial covenants set forth in the
Securities Purchase Agreement, which failures constitute Events of Default
under the Securities Purchase Agreement (the “December 31, 2002 Events of
Default”);

 

WHEREAS,
the Company has further advised Purchasers that the Company will not be able to
satisfy the financial covenants set forth in the Securities Purchase Agreement
for the fiscal quarter ending March 31, 2003;

 

WHEREAS, the Company and Fleet Capital Corporation, as
Lender pursuant to that certain Credit and Security Agreement dated as of
January 31, 2002 (the “Credit Agreement”) have requested that the
Purchasers waive the December 31, 2002 Event of Default and any other existing
defaults by the Company as provided herein, and amend certain provisions of the
Securities Purchase Agreement, among other things, to revise the financial
covenants contained therein; and

 

WHEREAS, the Purchasers have agreed to waive the the
December 31, 2002 Events of Default and to amend certain provisions of the
Securities Purchase Agreement, among other things, to revise the financial covenants
contained therein, 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
Securities Purchase Agreement have the same meanings herein as therein, except
to the extent that such meanings are amended hereby.  The Securities Purchase Agreement, together with the Notes, the
New Wynnchurch Subordinated Notes, the Warrants, the Subordination
Agreement, the Company Security Agreement, the Guaranty executed and delivered
by the subsidiaries of the Company, the Guarantor Security Agreement executed
and delivered by the subsidiaries of the Company, the Pledge Agreement executed
by Services and any other related documents, in each case as the same have been
amended, modified or supplemented to date, are referred to herein as the “Subordinated
Debt Documents.”

 

 

2.  Waiver
of Defaults.

 

Subject to the satisfaction of the terms and
conditions set forth in Section 6 hereof, the Purchasers hereby waive the
December 31, 2002 Event of Default and any other existing defaults by the
Company pursuant to the Securities Purchase Agreement and the other
Subordinated Debt Documents.  The
parties agree that nothing herein shall be construed as a waiver of any future
Event of Default (including without limitation, any Event of Default caused by
reason of the failure of the Company to comply with Section 7.5(h) of the
Securities Purchase Agreement, as amended hereby, on any other occasion or for
any other period) or any failure of the Company to comply with any other
provision, term or condition of the Subordinated Debt Documents.

 

3.  Amendments.

 

Subject to the satisfaction of the terms and
conditions set forth in Section 6 hereof, the Company and the Purchasers agree
that the Securities Purchase Agreement is hereby amended, effective as of the
date hereof, as follows:

 

(a)  Recital A to the Securities Purchase
Agreement is hereby amended by the insertion of the phrase “,as amended from
time to time” immediately following the phrase “15% Secured Subordinated
Convertible Promissory Notes” in clause (i) and also immediately following the
phrase “each of the B-1 Warrants and B-2 Warrants” in clause (ii).

 

(b)  The definition of “Interest Expense” in
Section 7.2(p) of the Securities Purchase Agreement is hereby deleted in its
entirety and replaced with the following new definition:

 

“(p)                           ‘Interest
Expense’ means, for any period, the sum, without duplication, for the
Company and all subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all interest in
respect of Indebtedness accrued or paid during such period (whether or not
actually paid during such period), but excluding (i) interest accrued in
respect of the Notes and New Wynnchurch Subordinated Notes that is capitalized
and not paid in cash, (ii) capitalized debt acquisition costs (including
capitalized fees and expenses related to this Agreement), and (iii) capitalized
costs associated with the accounting treatment of the sale of securities under
this Agreement, plus (b) the net amounts payable (or minus the net
amounts receivable) in respect of Hedging Agreements accrued during such period
(whether or not actually paid (or received) during such period) excluding
reimbursement of legal fees and other similar transaction costs and excluding
payments required by reason of the early termination of Hedging Agreements in
effect on the date hereof plus (c) all fees, including letter of credit
fees and expenses, (but excluding reimbursement of legal fees) incurred under
the Credit Agreement during such period.”

 

(c)  The definition of “Fixed Charges” in Section
7.2(j1) of the Securities Purchase Agreement is amended by inserting, after the
term “September 30, 2002” contained in clause (d) thereof, the term “and
December 31, 2002”.

 

(d)  The following new definition of “New
Wynnchurch Subordinated Notes” is hereby inserted in Section  7.2 of the Securities Purchase Agreement in
appropriate alphabetical order:

 

“(t1)                        ‘New
Wynnchurch Subordinated Notes’ means any Senior Subordinated Secured
Convertible Promissory Notes, substantially in the form of

 

2

 

the Wynnchurch
Subordinated Notes, 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 the Wynnchurch Guaranty, as such notes may be amended from time to
time. ”

 

(e)  The definition of “Subordinated
Indebtedness” in Section 7.2(x)  of the
Securities Purchase Agreement is hereby deleted in its entirety and replaced
with the following new definition:

 

“(x)                             ‘Subordinated
Indebtedness’ means (a) Indebtedness of the Company pursuant to the sale of
the Notes hereunder and the New Wynnchurch Subordinated Notes, and (b) any
other Indebtedness of the Credit Parties incurred after the Closing Date with
the consent of the Lender that by its terms (or by the terms of the instrument
under which it is outstanding and to which appropriate reference is made in the
instrument evidencing such Subordinated Indebtedness) is made subordinate and
junior in right of payment to the Loans and to the other Obligations of the
Credit Parties by provisions in form and substance reasonably satisfactory to
the Lender and Special Counsel.”

 

(f)  The definition of “Tangible Capital Base” in
Section 7.2(y) of the Securities Purchase Agreement is hereby deleted in its
entirety and replaced with the following new definition:

 

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

 

(g)  The following new definition of “Wynnchurch
Guaranty” is hereby inserted in Section 7.2 of the Securities Purchase
Agreement in the appropriate alphabetical order:

 

“(aa)                      ‘Wynnchurch
Guaranty’ means the Guaranty Agreement dated as of April 14, 2003, made by
Purchasers for the benefit of the Lender, as the same may be amended,
supplemented or otherwise modified from time to time.”

 

(h)  Section 7.5(h) of the Securities Purchase
Agreement is hereby amended and restated in its entirety to read as follows:

 

“(h)                           Certain
Financial Covenants.

 

(i)                                     Tangible
Capital Base.  The Company
and its subsidiaries shall not (x) as of March 31, 2003, have a consolidated
Tangible Capital Base of less than ($1,050,000) or (y) as of the end of
any fiscal quarter commencing with the fiscal quarter ending June 30, 2003,
have a consolidated Tangible Capital Base of less than the sum of (A) ($1,050,000)
plus (B) on a cumulative basis, 45% of positive consolidated net income
(without reduction for losses) for each fiscal quarter ending after March 31,
2003.

 

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

 

3

 

	
  Period

  	
   

  	
  Minimum
  Fixed Charge

  Coverage Ratio

  
	
   

  	
   

  	
   

  
	
  July
  1, 2003 through September 30, 2003

  	
   

  	
  0.95 to 1.0

  
	
   

  	
   

  	
   

  
	
  July
  1, 2003 through December 31, 2003

  	
   

  	
  0.95 to 1.0

  
	
   

  	
   

  	
   

  
	
  July
  1, 2003 through March 31, 2004

  	
   

  	
  0.95 to 1.0

  
	
   

  	
   

  	
   

  
	
  July
  1, 2003 through June 30, 2004 

  	
   

  	
  0.95 to 1.0

  
	
   

  	
   

  	
   

  
	
  Thereafter
  (on a rolling four quarters basis)

  	
   

  	
  0.95 to 1.0

  

 

(iii)                               Fixed Charge
Coverage Shortfall.  The
amount by which (a) the aggregate Fixed Charges of the Company and its
subsidiaries for each fiscal period set forth below, exceeds (b) the total of
(w) consolidated EBITDA of the Company and its Subsidiaries for such period (determined
on a consolidated basis without duplication in accordance with GAAP) minus
(x) the aggregate amount of all Non-Financed Capital Expenditures during such
period minus (y) 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 (z) the aggregate amount of dividends and
distributions permitted to be paid under Section 8.6 of the Credit Agreement
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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January
  1 through March 31, 2003

  	
   

  	
  $

  	
  1,050,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January
  1 through June 30, 2003

  	
   

  	
  $

  	
  1,470,000

  	
   

  

 

4.  Acknowledgments.

 

The parties hereby acknowledge and agree that the New
Wynnchurch Subordinated Notes shall be deemed “Notes” pursuant to the
Registration Rights Agreement, and accordingly, that any shares of Common Stock
of the Company into which such New Wynnchurch Subordinated Notes are converted
shall be deemed “Registrable Securities” under the Registration Rights
Agreement.  The parties hereby further
acknowledge and agree that the New Wynnchurch Subordinated Notes shall be
deemed “Notes” pursuant to the Security Agreements.

 

5.  No
Default; Representations and Warranties, etc.

 

The
Company hereby represents, warrants and confirms that: (a) the representations
and warranties of the Company contained in Article 3 of the Securities Purchase
Agreement, as amended by this Amendment, 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

 

4

 

to this Amendment,
the Company is in compliance with all of the terms and provisions set forth in
the Securities Purchase Agreement and the other Subordinated Debt Documents;
(c) after giving effect to this Amendment, no Event of Default (as defined in the
Notes) has occurred and is continuing; and (d) the execution, delivery and
performance by the Company of this Amendment (i) have been duly authorized by
all necessary action on the part of the Company, (ii) will not violate any
applicable law or regulation or the organizational documents of the Company or
any of its subsidiaries, (iii) will not violate or result in a default under
any indenture, agreement or other instrument binding on the Company or any of
its assets, including without limitation, the Credit Agreement or any other
Loan Document (as defined in the Credit Agreement), and (iv) do not require any
consent, waiver or approval of or by any person (other than the Purchasers)
which has not been obtained.

 

6.  Conditions
to Effectiveness.

 

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

 

(a)  The Purchasers shall have received
counterparts of this Amendment duly executed by the Company;

 

(b)  The Purchasers shall have received counterparts
of the Amendment to Notes and the Amendment to Warrants duly executed by the
Company;

 

(c)  The Purchasers shall have received a
Certificate of the Secretary of the Company, certifying that this Amendment has
been duly authorized by the Board of Directors of the Company;

 

(d)  The Company shall have delivered to the
Purchasers evidence that Lender has executed and delivered to the Company a
written amendment and waiver with respect to the Loan Documents (as defined in
the Credit Agreement), in form and substance reasonably acceptable to the
Purchasers; and

 

(e)  The Company shall have reimbursed the
Purchasers for all reasonable costs and expenses, including reasonable legal
fees and disbursements, incurred by the Purchasers in connection with this
Amendment, the Wynnchurch Guaranty (including, without limitation, all
documents and opinions to be issued thereunder), the Amendment to Notes, the
Amendment to Warrants, the First Amendment to the Subordination Agreement and
the transactions contemplated hereby and thereby, including any purchases by
Purchasers pursuant to the Wynnchurch Guaranty.

 

7.  Miscellaneous.

 

(a)  Except as specifically amended hereby or by
the Amendment to Notes and the Amendment to Warrants, all of the terms and
provisions of the Securities Purchase Agreement, the other Subordinated Debt
Documents and all related documents, shall remain in full force and
effect.  The parties hereby acknowledge
and agree that the New Wynnchurch Subordinated Notes shall be deemed “Notes”
pursuant to that certain Registration Rights Agreement between the Company and
Purchasers, dated as of January 31, 2002 (the “Registration Rights Agreement”),
and accordingly, that any shares of Common Stock of the Company into which such
New Wynnchurch Subordinated Notes are converted shall be deemed “Registrable
Securities” under the Registration Rights Agreement.

 

5

 

(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 State of Illinois and shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.

 

[Remainder of Page Left Intentionally Blank]

 

6

 

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.

 

 

	
  COMPANY:

  
	
   

  	
   

  
	
  ALTERNATIVE
  RESOURCES CORPORATION

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  PURCHASERS:

  	
   

  
	
   

  	
   

  
	
  WYNNCHURCH
  CAPITAL PARTNERS, L.P.

  
	
  By:

  	
  Wynnchurch
  Partners, L.P., its general partner

  
	
  By:

  	
  Wynnchurch
  Management, Inc., its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  WYNNCHURCH
  CAPITAL PARTNERS CANADA, L.P.

  
	
  By:

  	
  Wynnchurch
  Partners Canada, L.P., its general partner

  
	
  By:

  	
  Wynnchurch
  GP Canada, Inc., its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  ACKNOWLEDGED AND AGREED TO BY THE UNDERSIGNED SOLELY WITH
  RESPECT TO SECTION 4 OF THIS AMENDMENT:

  
	
   

  	
   

  
	
  ARC
  SERVICE, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  ARC
  SOLUTIONS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							

 

7

 

	
  ARC
  MIDHOLDING, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  WRITERS
  INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  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:

  	
   

  	
   

  
					

 

8Exhibit 4.3

 

FIRST AMENDMENT TO SUBORDINATION AND INTERCREDITOR AGREEMENT

 

This FIRST AMENDMENT TO SUBORDINATION AND
INTERCREDITOR AGREEMENT (this “Amendment”) is dated as of April 14, 2003
and made by and among Wynnchurch Capital Partners, L.P. (“Wynnchurch Capital”),
Wynnchurch Capital Partners Canada, L.P. (“Wynnchurch Canada”),
Wynnchurch Capital, Ltd., Alternative Resources Corporation (“ARC”), ARC
Service, Inc.(“Service”), ARC Solutions, Inc. (“Solutions”), ARC
Midholding, Inc. (“Midholding”), Writers Inc. (“Writers”), ARC
Technology Management LLC (“ARC Technology”), ARC Staffing Management
LLC (“ARC Staffing”), ARC Shared Services LLC (“ARC Shared Services”),
and Fleet Capital Corporation (the “FCC”).  Wynnchurch Capital and Wynnchurch Canada are from time to time
collectively referred to herein as “Wynnchurch”.  ARC, Service, Solutions, Midholding,
Writers, ARC Technology, ARC Staffing and ARC Shared Services are from time to
time collectively referred to herein as the “Borrowers”)

 

WHEREAS, the Borrowers and FCC are parties to a Credit
and Security Agreement dated as of January 31, 2002, as amended by that certain
First Amendment to Credit Agreement and Waiver dated as of August 8, 2002, that
certain Second Amendment to Credit Agreement dated as of August 30, 2002, that
certain Third Amendment to Credit Agreement dated as of November 14, 2002, that
certain Waiver, Joinder and Fourth Amendment to Credit Agreement dated as of
December 27, 2002 (the “Fourth Amendment”), and that certain Fifth
Amendment to Credit Agreement and Waiver dated as of the date hereof (the “Fifth
Amendment”)(as so amended, the “Credit Agreement”);

 

WHEREAS, Wynnchurch, ARC, Service, Solutions,
Midholding, Writers, and FCC are parties to that certain Subordination and
Intercreditor Agreement dated as of January 31, 2002 (the “Subordination
Agreement”);

 

WHEREAS, pursuant to the Fourth Amendment, ARC
Technology, ARC Staffing, and ARC Shared Services became “Borrowers” under the
Credit Agreement, the Subordination Agreement, and the other Loan Documents (as
defined in the Credit Agreement);

 

WHEREAS, pursuant to the Fifth Amendment, the
Borrowers and FCC amended the Credit Agreement, among other things, to make
provision for the issuance and repayment of certain additional Senior Subordinated
Secured Convertible Promissory Notes of ARC which may be issued to Wynnchurch
and/or Wynnchurch Capital, Ltd., as consideration for payments made by
Wynnchurch pursuant to a Guaranty dated as of the date hereof made by
Wynnchurch for the benefit of FCC (the “New Wynnchurch Subordinated Notes”),

 

WHEREAS, Wynnchurch, the Borrowers and the Lender
desire to amend the Subordination Agreement to reflect the addition of ARC
Technology, ARC Staffing and ARC Shared Services as Borrowers under the Credit
Agreement, to reflect the terms of the Credit Agreement relating to the
issuance and repayment of the New Wynnchurch Subordinated Notes, and to add
Wynnchurch Capital, Ltd., as a “Subordinated Creditor” thereunder;

 

NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.                                       Capitalized
Terms.

 

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

 

 

2.                                       Amendments.

 

(a)                                  Amendments
to Section 1 of the Subordination Agreement.

 

(i)                                     The
definition of “Borrowers” contained in Section 1.1 of the Subordination
Agreement is hereby deleted in its entirety and replaced with the following new
definition:

 

“‘Borrowers’ means, collectively, ARC, Service,
Solutions, Midholding, Writers, ARC Technology Management LLC, ARC Staffing
Management LLC, and ARC Shared Services LLC, together with their respective
successors and assigns and any additional subsidiaries of any of the foregoing
that become “Borrowers” under the Senior Credit Agreement or guarantors of the
obligations of the Borrowers under the Senior Credit Agreement.”

 

(ii)                                  The
definition of “Subordinated Creditor” contained in Section 1.11 of the
Subordination Agreement is hereby deleted in its entirety and replaced with the
following new definition:

 

“‘Subordinated Creditors’ means Wynnchurch Capital,
Wynnchurch Canada, and Wynnchurch Capital, Ltd., together with their
successors, assigns and affiliates, and any other holder from time to time of
all or any portion of the Subordinated Obligations.”

 

(iii)                               The
definition of “Subordinated Note and Warrant Documents” contained in Section
1.12 of the Subordination Agreement is hereby deleted in its entirety and
replaced with the following new defintion:

 

“‘Subordinated Note and Warrant Documents’ means,
collectively, the Securities Purchase Agreement dated as of January 31, 2002 by
and between ARC and Wynnchurch, the Subordinated Notes, the New Subordinated
Notes, the Guaranty, the Stock Purchase Warrants issued by ARC in favor of
Wynnchurch and all other instruments, agreements and documents executed or
delivered by ARC or any of the other Borrowers to Wynnchurch in connection with
the foregoing, as the same may be assigned or transferred to one or more
Subordinated Creditors.”

 

(iv)                              The
following definition of “New Subordinated Notes” is hereby inserted as a new
Section 1.15 of the Subordination Agreement:

 

“‘New Subordinated Notes’ means any Senior
Subordinated Secured Convertible Promissory Notes, substantially in the form of
the Subordinated Notes, 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 the Wynnchurch Guaranty.”

 

(v)                                 The
following definition of “Wynnchurch Guaranty” is hereby inserted as a new
Section 1.16 of the Subordination Agreement:

 

“‘Wynnchurch Guaranty’ means that certain Guaranty
Agreement dated as of April 14, 2003 made by Wynnchurch for the benefit of FCC,
as the same may be amended, supplemented or otherwise modified from time to
time.”

 

2

 

(b)                                 Amendments
to Section 2.6 of the Subordination Agreement.

 

(i)                                     Section
2.6(a) of the Subordination Agreement is hereby amended and restated in its
entirety as follows

 

(a)                                  Notwithstanding
anything to the contrary set forth herein, so long as (i) no Payment Default
exists, (ii) no Blockage Period shall be continuing, and (iii) no Event of
Default shall result from the making of such payment, ARC may pay or cause to
be paid to Wynnchurch and any other Subordinated Creditor, and Wynnchurch and any
other Subordinated Creditor may accept and retain regularly scheduled quarterly
payments of interest but no principal in respect of the Subordinated Notes or
the New Subordinated Notes on the dates and in the amounts provided for in the
Subordinated Notes (as in effect on January 31, 2002) and the New Subordinated
Notes (as in effect on the date of issuance thereof); provided that so long as
the FCC Senior Credit Agreement shall remain in effect in no event shall the
aggregate amount of interest payments made in respect of the Subordinated Notes
or the New Subordinated Notes during any calendar quarter beginning with the
calendar quarter beginning January 1, 2002 and ending with the calendar quarter
ending December 31, 2005 exceed 1.875% of the outstanding principal balance of
the Subordinated Notes and the New Subordinated Notes without the prior written
consent of the Senior Creditor, except that (1) if (v) the Senior Creditor has
received a Compliance Certificate indicating that the Borrowers are in compliance
with Section 8.10(b) of the FCC Senior Credit Agreement for the period
from January 1, 2002 through June 30, 2002 or any other two consecutive
fiscal quarters following the Effective Time, (w) no Payment Default exists,
(x) no Blockage Period shall have commenced and be continuing, (y) no Event of
Default shall result from the making of such payment, and (z) prior to such
payment, the Borrowers shall have delivered evidence to the Senior Creditor
that after giving effect to such payment, Excess Availability (as defined in
the Senior Credit Agreement) shall equal or exceed $5,000,000, the aggregate
amount of interest payments made in respect of the Subordinated Notes during
any calendar quarter may total up to (xx) 4.50% of the outstanding principal balance
of the Subordinated Notes plus (yy) the amount of prior interest
payments that were not paid as a result of the prior existence of a Payment
Default or prior commencement of a Blockage Period, and (2) if (w) no Payment
Default exists, (x) no Blockage Period shall have commenced and be continuing,
(y) no Event of Default shall result from the making of such payment, and (z)
prior to such payment, the Borrowers shall have delivered evidence to the
Senior Creditor that (xx) for the period 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, (yy) during such thirty day
period, there shall not have been more than four days on which daily Excess
Availability shall not have equaled or exceeded $500,000, and (zz) after giving
effect to such payment, Excess Availability shall equal or exceed $1,000,000,
ARC may pay or cause to be paid to Wynnchurch and any other Subordinated
Creditor, and Wynnchurch and any other Subordinated Creditor may accept and
retain payments of principal and interest in respect of the New Subordinated
Notes (including without limitation the amount of prior interest payments that
were not paid in respect of the New Subordinated Notes as a result of the prior
existence of a Payment Default or prior commencement of a Blockage
Period).  Notwithstanding anything to
the contrary set forth herein, beginning with the

 

3

 

calendar quarter beginning January 1, 2006, so long as
no Payment Default exists, no Blockage Period shall have commenced and be
continuing, and no Event of Default shall result from the making of such
payment, ARC may pay or cause to be paid to Wynnchurch and any other
Subordinated Creditor, and Wynnchurch and any other Subordinated Creditors may
accept and retain, scheduled quarterly payments of interest but no principal
(unless the payment of principal is otherwise permitted pursuant to exception
(2) to Section 2.6(a)(ii) above) in respect of the Subordinated Notes and the
New Subordinated Notes on the dates and in the amounts provided for in the
Subordinated Notes and the New Subordinated Notes (in each case, as in effect
on the date of issuance thereof).  If
Wynnchurch or any other holder of the Subordinated Indebtedness receives
payment from the Borrowers pursuant to the first sentence of this Section
2.6(a), such payment shall be deemed to constitute a representation of the
Borrowers to the Senior Creditor and to the Subordinated Creditors that no
Event of Default exists, and that such payment is permitted to be paid by the
Borrowers under this Agreement; and the Subordinated Creditors shall be
entitled to keep and retain such payment unless prior to the Subordinated
Creditors’ receipt of such payment there shall occur a Payment Default or the
Senior Creditor shall have sent a Blockage Notice to the Subordinated
Creditors, in which case the Subordinated Creditors shall forthwith deliver
such payment or an amount of cash equal thereto to the Senior Creditor for
application in payment of the Senior Obligations.  Notwithstanding anything to the contrary set forth herein, the
Senior Creditor shall not be entitled to block payments pursuant to the delivery
of Blockage Notices hereunder for more than 180 days during any 360 day period
or commence more than three Blockage Periods during the term of this Agreement.

 

(ii)                                  Section
2.6(c) of the Subordination Agreement is hereby amended and restated in its
entirety as follows:

 

(b)                                 In
addition to the foregoing limitations, the Borrowers and the Subordinated
Creditors agree that so long as any of the Senior Obligations shall remain
outstanding, the Borrowers shall not pay and no Subordinated Creditor shall
accept or receive, any management, consulting, advisory or other fees, except
that (i) so long as no Payment Default exists and no Blockage Period is
continuing:  (A) the Borrowers may pay
reasonable directors’ fees and reimburse the Subordinated Creditors for
reasonable costs and expenses incurred by the Subordinated Creditors in
connection with the Subordinated Obligations, and (B) with the written consent
of the Senior Creditor, which consent shall not be unreasonably withheld or
delayed, the Borrowers may retain Wynnchurch or any other Subordinated Creditor
to perform, and pay to Wynnchurch or such other Subordinated Creditor fees for,
advisory services at market rates, and (ii) so long as (A) no Payment Default
exists, (B) no Blockage Period shall have commenced and be continuing, (C) no
Event of Default shall result from the making of such payment, and (D) prior to
such payment, the Borrowers shall have delivered evidence to the Senior
Creditor that (x) for the period 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 more than four days on which daily Excess Availability
shall not have equaled or exceeded $500,000, and (z) after giving effect to
such payment, Excess Availability shall equal or exceed $1,000,000, ARC may pay
or cause to be paid to Wynnchurch and any other Subordinated Creditor, and

 

4

 

Wynnchurch and any other Subordinated Creditor may
accept and retain fees in an aggregate amount of up to $250,000 in connection
with the payment of any obligations under the Wynnchurch Guaranty by
Wynnchurch.

 

3.                                       Ratification.

 

The
Subordination Agreement, as modified and amended by this Amendment remains in
full force and effect.  The Borrowers
and the Subordinated Creditors hereby confirm for the benefit of FCC the
continued subordination of the Subordinated Obligation (including without
limitation, any and all indebtedness, liabilities and obligations in respect of
the New Wynnchurch Subordinated Notes) to the Senior Obgligations.

 

4.                                       Successors
and Assigns.

 

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

 

5.                                       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.

 

 

[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.

 

 

	
   

  	
  WYNNCHURCH
  CAPITAL PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:Wynnchurch
  Partners, L.P., its General Partner

  
	
   

  	
   

  
	
   

  	
  By:
  Wynnchurch Management Inc., its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WYNNCHURCH
  CAPITAL PARTNERS CANADA, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  Wynnchurch Partners Canada, L.P., its General Partner

  
	
   

  	
   

  
	
   

  	
  By:
  Wynnchurch GP Canada, Inc., its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WYNNCHURCH
  CAPITAL, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALTERNATIVE
  RESOURCES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ARC SERVICE,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

6

 

	
   

  	
  ARC
  SOLUTIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ARC
  MIDHOLDING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WRITERS
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  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:

  

 

7

 

	
   

  	
  FLEET CAPITAL CORPORATION, as Lender

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}]]