Document:

Exhibit
10.2

 

 

REGISTRATION
RIGHTS AGREEMENT

 

Dated May 5, 2003

 

among

 

MSC.Software
Corporation

 

and

 

Merrill Lynch,
Pierce, Fenner & Smith

Incorporated

 

 

 

REGISTRATION
RIGHTS AGREEMENT

 

This Registration Rights Agreement (the “Agreement”)
is made and entered into this fifth day of May, 2003, among MSC.Software
Corporation, a Delaware corporation (the “Company”), and Merrill Lynch,
Pierce, Fenner & Smith Incorporated (“Initial Purchaser”).

 

This Agreement is made pursuant to that certain
Purchase Agreement, dated April 29, 2003, among the Company and the Initial
Purchaser (the “Purchase Agreement”), which provides for the sale by the
Company to the Initial Purchaser of $85,000,000 principal amount of the
Company’s 21⁄2% Senior Subordinated Convertible Notes due 2008 (the “Notes”),
plus an additional $15,000,000 aggregate principal amount of Notes as to which
the Initial Purchaser may exercise its over-allotment option set forth in
Section 2(b) of the Purchase Agreement. 
In order to induce the Initial Purchaser to enter into the Purchase
Agreement and in satisfaction of a condition to the Initial Purchaser’s
obligations thereunder, the Company has agreed to provide to the Initial
Purchaser and its direct and indirect transferees and assigns the registration
rights set forth in this Agreement.  The
execution and delivery of this Agreement is a condition to the closing under
the Purchase Agreement.

 

In consideration of the foregoing, the parties hereto
agree as follows:

 

1.             Definitions.

 

As used in this Agreement, the following capitalized
defined terms shall have the following meanings:

 

“1933 Act” shall mean the Securities Act of
1933, as amended from time to time, and the rules and regulations of the SEC
promulgated thereunder.

 

“1934 Act” shall mean the Securities Exchange
Act of l934, as amended from time to time, and the rules and regulations of the
SEC promulgated thereunder.

 

“Closing Date” shall mean the Closing Time as
defined in the Purchase Agreement.

 

“Common Stock” shall mean common stock of the
Company.

 

“Company” shall have the meaning set forth in
the preamble to this Agreement and also includes the Company’s successors.

 

“Depositary” shall mean The Depository Trust
Company, or any other depositary appointed by the Company; provided, however,
that any such depositary must have an address in The Borough of Manhattan, The
City of New York.

 

“Effectiveness Period” shall have the meaning
set forth in Section 2.1(a) hereof.

 

“Effectiveness Target Date” shall mean the one
hundred eightieth (180th) day after the Closing Date.

 

 

“Event Date” shall have the meaning set forth
in Section 2.4 hereof.

 

“Filing Date” shall mean the ninetieth (90th)
day after the Closing Date.

 

“Holder” shall mean an Initial Purchaser, for
so long as it owns any Registrable Securities, and each of its successors,
assigns and direct and indirect transferees who become registered owners of
Registrable Securities under the Indenture.

 

“Indenture” shall mean the Indenture relating
to the Securities, dated as of May 5, 2003, between the Company and J.P. Morgan
Trust Company, National Association, as trustee, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.

 

“Initial Purchaser” shall have the meaning set
forth in the preamble to this Agreement.

 

“Liquidated Damages” shall have the meaning set
forth in Section 2.4 hereof.

 

“Majority Holders” shall mean the Holders of a
majority of the aggregate principal amount of Registrable Securities
outstanding; provided, that whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or any of its affiliates (as such
term is defined in Rule 405 under the 1933 Act) shall be disregarded in
determining whether such consent or approval was given by the Holders of such
required percentage.

 

“NASD” shall mean the National Association of
Securities Dealers, Inc.

 

“Notes” shall have the meaning set forth in the
preamble to this Agreement.

 

“Person” shall mean an individual, partnership,
corporation, limited liability company, joint venture, trust or unincorporated
organization, or a government or agency or political subdivision thereof.

 

“Prospectus” shall mean the prospectus included
in any Registration Statement, including any preliminary prospectus, and any
such prospectus as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments and
supplements to any such prospectus, including post-effective amendments, and in
each case including all material incorporated or deemed to be incorporated by
reference therein.

 

“Purchase Agreement” shall have the meaning set
forth in the preamble to this Agreement.

 

“Registrable Securities” shall mean the Notes
and the shares of Common Stock into which the Notes are convertible, upon
original issuance thereof, and at all times subsequent thereto; provided,
however, that any Securities shall cease to be Registrable Securities
when (i) a Registration Statement with respect to such Securities shall have
been declared effective under the 1933 Act and such Securities shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities shall
have been sold to the public pursuant to Rule l44 (or any

 

2

 

similar provision then in force, but not Rule 144A) under the 1933 Act,
(iii) expiration of the holding period that would be applicable to such
Securities under Rule 144(k) under the 1933 Act were they not held by an
affiliate of the Company or (iv) such Securities shall have ceased to be
outstanding.

 

“Registration Default” shall have the meaning set
forth in Section 2.4 hereof.

 

“Registration Expenses” shall mean any and all
expenses incident to performance of or compliance by the Company with this
Agreement, including without limitation: 
(i) all SEC, stock exchange or NASD registration and filing fees, (ii)
all fees and expenses incurred in connection with compliance with state or
other securities or blue sky laws and compliance with the rules of the NASD
(including reasonable fees and disbursements of counsel for any underwriters or
Holders in connection with qualification of any Registrable Securities under
state or other securities or blue sky laws and any filing with and review by
the NASD), (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements, certificates representing
the Securities and other documents relating to the performance of and compliance
with this Agreement, (iv) all fees and expenses incurred in connection with the
listing, if any, of any of the Registrable Securities on any securities
exchange or exchanges or on any quotation system, (v) all rating agency fees,
(vi) all fees and disbursements relating to the qualification of the Indenture
under applicable securities laws, (vii) the fees and disbursements of counsel
for the Company and the fees and expenses of independent public accountants for
the Company or for any other Person, business or assets whose financial
statements are included in any Registration Statement or Prospectus, including
the expenses of any special audits or “cold comfort” letters required by or
incident to such performance and compliance, (viii) the fees and expenses of
the Trustee, any registrar, any depositary, any paying agent, any escrow agent
or any custodian, in each case including their respective counsel, (ix) the
reasonable fees and disbursements of one law firm representing the Holders of
Registrable Securities and (x) the reasonable fees and expenses of the Initial
Purchaser in connection with the Shelf Registration, including the reasonable
fees and expenses of one counsel to the Initial Purchaser, and (xi) any fees
and disbursements of the underwriters customarily paid by issuers or sellers of
securities and the fees and expenses of any special experts retained by the
Company in connection with any Registration Statement, but excluding
underwriting discounts and commissions and any transfer taxes, if any, relating
to the sale or disposition of Registrable Securities by a Holder.

 

“Registration Statement” shall mean any registration
statement of the Company pursuant to the provisions of Section 2 of this
Agreement that covers all of the Registrable Securities held by Holders that
have provided the information required pursuant to the terms of Section 2.1(d)
hereof on an appropriate form under Rule 415 under the 1933 Act, or any similar
rule that may be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated or deemed to be incorporated by reference therein.

 

“SEC” shall mean the United States Securities
and Exchange Commission or any successor agency or government body performing
the functions currently performed by the United States Securities and Exchange
Commission.

 

3

 

“Securities” shall mean the Notes and the shares of
Common Stock into which the Notes are convertible, upon original issuance
thereof, and at all times subsequent thereto.

 

“Shelf Registration” shall have the meaning set forth
in Section 2.1(a) hereof.

 

“TIA” shall mean the Trust Indenture Act of 1939, as
amended from time to time, and the rules and regulations of the SEC promulgated
thereunder.

 

“Trustee” shall mean the trustee with respect to the
Securities under the Indenture.

 

“Underwriters” shall have the meaning set forth in
Section 4(a) hereof.

 

For purposes of this Agreement, (i) all references in
this Agreement to any Registration Statement or Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the SEC pursuant to its Electronic Data Gathering, Analysis and Retrieval
system; (ii) all references in this Agreement to financial statements and
schedules and other information which is “contained”, “included” or “stated” in
any Registration Statement or Prospectus (or other references of like import)
shall be deemed to mean and include all such financial statements and schedules
and other information which is incorporated or deemed to be incorporated by
reference in such Registration Statement or Prospectus, as the case may be; and
(iii) all references in this Agreement to amendments or supplements to any
Registration Statement or Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act which is incorporated or deemed to be
incorporated by reference in such Registration Statement or Prospectus, as the
case may be.

 

2.             Registration
Under the 1933 Act.

 

2.1           Shelf
Registration.

 

(a)           As
promptly as practicable, but no later than the Filing Date, the Company shall
file with the SEC, a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 under the 1933 Act covering all of the
Registrable Securities held by Holders that have provided the information
required pursuant to the terms of Section 2.1(d) hereof (the “Shelf
Registration”).  The Shelf
Registration shall be on Form S-3 under the 1933 Act or another appropriate
form permitting registration of such Registrable Securities for resale by the
Holders in the manner or manners reasonably designated by them (including,
without limitation, one or more underwritten offerings); provided, however,
that if the manner of resale involves an underwritten offering, the Holders’
selection of the underwriter shall be subject to the consent of the Company,
which consent shall not be unreasonably withheld.  The Company shall use its reasonable best efforts to cause the
Registration Statement to be declared effective by the SEC as promptly as
practicable, but no later than the Effectiveness Target Date, and to keep such
Registration Statement continuously effective, supplemented and amended, as
required in order to permit the Prospectus forming a part thereof to be useable
by the Holders until the earliest of (i) the date when the Holders are able to
sell all of their Securities immediately without restriction pursuant to the
volume limitation provisions of Rule 144 under the 1933 Act or otherwise, or
(ii) all of the Registrable Securities covered by the Registration Statement
have been sold pursuant to the Registration Statement (the “Effectiveness
Period”);  provided, however,
that the Effectiveness Period in respect of the Registration Statement shall be

 

4

 

extended to the extent required to permit dealers to comply with the
applicable prospectus delivery requirements of Rule 174 under the 1933 Act and
as otherwise provided herein.

 

(b)           Notwithstanding
any other provisions hereof, the Company shall use its reasonable best efforts
to ensure that (i) any Registration Statement and any amendment thereto and any
Prospectus forming a part thereof and any supplements thereto complies in all
material respects with the 1933 Act, (ii) any Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming a part of any Registration Statement and any
amendment or supplement to such Prospectus, does not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

 

(c)           The
Company further agrees, if necessary, to supplement or amend the Registration
Statement, as required by Section 3(b) below, and to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly
after its being used or filed with the SEC.

 

(d)           No
Holder of Registrable Securities may include any of its Registrable Securities
in the Registration Statement pursuant to this Agreement unless the Holder
furnishes to the Company a completed questionnaire in the form attached as
Annex A to the Offering Memorandum and such other information in writing as the
Company may reasonably request for use in connection with the Registration
Statement or Prospectus included therein and in any application to be filed
with or under state securities laws. 
Before the effectiveness of the Registration Statement, each Holder of
Registrable Securities must furnish this information to the Company in writing
no later than the 20th business day after receipt of a request from
the Company therefor and the Company will include this information in the
Registration Statement in a manner so that upon effectiveness the Holders will
be permitted to deliver the Prospectus to purchasers of the Holder’s
Securities.  From and after the date
that the Registration Statement is first declared effective, upon receipt of a
completed questionnaire (in the form attached as Annex A to the Offering
memorandum), the Company will, as promptly as practicable but in any event
within 5 business days of receipt, file any amendments or supplements to the
Registration Statement necessary for the relevant Holders to be named as
selling securityholders in the Prospectus contained therein to be permitted to
deliver the Prospectus to purchasers of the Holder’s Securities (subject to the
Company’s right to suspend the Registration Statement as described in Sections
3(e)(ii), 3(e)(iii) and 3(e)(v) through 3(e)(vii) below); provided, however,
that the Company will not be obligated to file more than one such amendment or
supplement to the Registration Statement in any 30-day period following the
date the Registration Statement is declared effective for the purpose of naming
Holders  as selling securityholders who
were not named in the Registration Statement at the time of effectiveness.  Holders that do not complete and deliver the
questionnaire in a timely manner will not be named as selling securityholders
in the Prospectus.  Each Holder as to
which the Registration Statement is being effected agrees to furnish promptly
to the Company all information required to be disclosed in order to make
information previously furnished to the Company by the Holder not materially
misleading.

 

5

 

2.2           Expenses.  The Company shall pay all Registration Expenses
in connection with the Shelf Registration and any Registration Statement.  Each Holder shall pay all fees and
disbursements of its counsel (other than as set forth in the preceding sentence
or in the definition of Registration Expenses) and all underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of such Holder’s Registrable Securities pursuant to the Registration Statement.

 

2.3           Effectiveness.  The Registration Statement shall not be
deemed to have become effective unless it has been declared effective by the
SEC; provided, however, that if, after it has been declared
effective, the offering of Registrable Securities pursuant to the Registration
Statement is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such
Registration Statement shall be deemed not to have been effective during the
period of such interference, until the offering of Registrable Securities
pursuant to such Registration Statement may legally resume.

 

2.4           Liquidated
Damages.  The Company and the
Initial Purchaser agree that the Holders of Registrable Securities will suffer
damages if the Company fails to fulfill its obligations under Section 2.1
hereof and that it would not be feasible to ascertain the extent of such
damages with precision.  Accordingly,
the Company agrees to pay liquidated damages on the Registrable Securities (“Liquidated
Damages”) under the circumstances and to the extent as set forth below.  In the event that (a) the Registration
Statement has not been filed with the SEC on or prior to the Filing Date, (b)
the Registration Statement is not declared effective by the SEC on or prior to
the Effectiveness Target Date, (c) the Registration Statement has been declared
effective by the SEC and such Registration Statement ceases to be effective or
usable at any time during the Effectiveness Period for any reason without being
succeeded within five business days by a post-effective amendment to such
Registration Statement or a report filed with the SEC pursuant to the 1934 Act
that cures such failure or (d) the Company suspends the use of any Prospectus
related to the Registration Statement for a period exceeding forty-five (45)
days in any consecutive three-month period or exceeding an aggregate of ninety
(90) days in any consecutive twelve-month period (each such event referred to
in clauses (a) through (d) above, a “Registration Default”), then the
interest rate borne by the Notes shall be increased as Liquidated Damages (x)
by one-quarter of one percent (0.25%) per annum upon the occurrence of such
Registration Default up to and including the ninetieth (90th) day
following such Registration Default and (y) by one half of one percent (0.50%)
from and after the ninety-first (91st) day following the occurrence
of such Registration Default, provided that the aggregate increase in such
interest rate will in no event exceed one half of one percent (0.50%) per
annum.  Upon the cure of such Registration
Default, the accrual of Liquidated Damages will cease and the interest rate
will revert to the original rate so long as no other Registration Default shall
have occurred and shall be continuing at such time; provided, however,
that, if after any such reduction in interest rate, one or more Registration
Defaults shall again occur, the interest rate shall again be increased pursuant
to the foregoing provisions.  A
Registration Default under clause (a) above shall be cured on the date that the
Shelf Registration is filed with the SEC; a Registration Default under clause
(b) above shall be cured on the date that the Shelf Registration is declared
effective by the SEC; a Registration Default under clause (c) above shall be
cured on the date the Shelf Registration is declared effective or useable; and
a Registration Default under clause (d) above shall be cured on the date the
Prospectus is declared useable by the Company. 
In the event of a Registration Default, the Company shall pay Liquidated
Damages to (x) the holders of Notes and

 

6

 

(y) the holders of Common Stock issued upon conversion of Notes in
proportion to the principal amount of such Notes converted.

 

The Company shall notify the Trustee within three business
days after each and every date on which a Registration Default occurs (an “Event
Date”).  Liquidated Damages shall be
paid by the Company to the Holders of Notes by depositing with the Trustee, in
trust, for the benefit of the Holders of Notes, on or before the applicable
semiannual interest payment date, immediately available funds in sums
sufficient to pay the Liquidated Damages then due.  Such Liquidated Damages due shall be payable on each interest
payment date to the record Holder of Securities entitled to receive the
interest payment to be paid on such date as set forth in the Indenture.  Liquidated Damages in respect of Common
Stock issued upon conversion of Notes shall be payable by the Company to the
holders of Common Stock issued upon conversion of such Notes concurrently with
the payment of Liquidated Damages to the holders of Notes.  Each obligation to pay Liquidated Damages
shall be deemed to accrue from and including the day following the applicable Event
Date.

 

2.5           Specific
Enforcement.  Without limiting the
remedies available to the Initial Purchaser and the Holders, the Company
acknowledges that any failure by the Company to comply with its obligations
under this Section 2 may result in material irreparable injury to the Initial
Purchaser or the Holders for which there is no adequate remedy at law, that it
would not be possible to measure damages for such injuries precisely and that,
in the event of any such failure, the Initial Purchaser or any Holder may
obtain such relief as may be required to specifically enforce the Company’s
obligations under this Section 2.

 

3.             Registration
Procedures.

 

In connection with the obligations of the Company with
respect to the Shelf Registration and the Registration Statement pursuant to
Section 2 hereof, the Company shall:

 

(a)           prepare
and file with the SEC a Registration Statement within the period specified in
Section 2, on the appropriate form under the 1933 Act, which form (i) shall be
selected by the Company, (ii) shall be available for the sale of the
Registrable Securities by the selling Holders thereof, and (iii) shall comply
as to form in all material respects with the requirements of the applicable
form and include or incorporate by reference all financial statements required
by the SEC to be filed therewith or incorporated by reference therein, and use
its reasonable best efforts to cause such Registration Statement to become
effective and remain effective in accordance with Section 2 hereof;

 

(b)           cause
each Prospectus to be supplemented by any required prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 (or any similar provision
then in force) under the 1933 Act; and comply with the provisions of the 1933
Act and the 1934 Act with respect to the disposition of all securities covered
by a Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the selling Holders thereof;

 

(c)           (i)
notify each Holder of Registrable Securities, as promptly as practicable, but in
any event no less than five business days prior to filing, that a Registration
Statement with

 

7

 

respect to the Registrable Securities is being filed and advising such
Holders that the distribution of Registrable Securities will be made in
accordance with the method elected by the Majority Holders subject to Section
2.1(a) above; (ii) furnish to each Holder of Registrable Securities, to counsel
for the Holders, to counsel for the Initial Purchaser and to each underwriter
of an underwritten offering of Registrable Securities, if any, without charge,
as many copies of each Prospectus, including each preliminary Prospectus, and
any amendment or supplement thereto and such other documents as such Holder,
counsel or underwriter may reasonably request, including financial statements
and schedules and, if such Holder, counsel or underwriter so requests, all
exhibits (including those incorporated by reference) in order to facilitate the
public sale or other disposition of the Registrable Securities; and (iii)
subject to any notice by the Company in accordance with Section 3(j) of the
existence of any fact or event of the kind described in Section 3(e)(v) or
3(e)(vi), the Company hereby consents to the use of the Prospectus, including
each preliminary Prospectus, or any amendment or supplement thereto by each of
the Holders and underwriters of Registrable Securities in connection with the
offering and sale of the Registrable Securities covered by any Prospectus or any
amendment or supplement thereto;

 

(d)           use
its reasonable best efforts to register or qualify (or establish an exemption
from such registration or qualification for) the Registrable Securities under
all applicable state securities or “blue sky” laws of such jurisdictions as any
Holder of Registrable Securities covered by a Registration Statement and each
underwriter of an underwritten offering of Registrable Securities shall
reasonably request, to cooperate with the Holders and the underwriters of any
Registrable Securities in connection with any filings required to be made with
the NASD, to keep each such registration or qualification effective during the
period such Registration Statement is required to be effective, and do any and
all other acts and things which may be reasonably necessary or advisable to
enable such Holder to consummate the disposition in each such jurisdiction of
such Registrable Securities owned by such Holder; provided, however,
that the Company shall not be required to (i) qualify as a foreign corporation
or as a dealer in securities in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(d) or (ii) take any action which
would subject it to general service of process or taxation in any such jurisdiction
if it is not then so subject;

 

(e)           notify
each Holder of Registrable Securities as promptly as reasonably practicable
and, if requested by such Holder, confirm such advice in writing as promptly as
reasonably practicable (i) when a Registration Statement has become effective
and when any post-effective amendments and supplements thereto become
effective, (ii) of any request by the SEC or any state securities authority for
post-effective amendments or supplements to a Registration Statement or Prospectus
or for additional information after a Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities authority
of any stop order suspending the effectiveness of a Registration Statement or
the initiation of any proceedings for that purpose, (iv) if between the
effective date of a Registration Statement and the closing of any sale of
Registrable Securities covered thereby, the representations and warranties of
the Company contained in any underwriting agreement, securities sales agreement
or other similar agreement, if any, relating to such offering cease to be true
and correct in all material respects, (v) of the happening of any event or the
discovery of any facts during the period a Registration Statement is effective
which makes any statement made in such Registration Statement or the related
Prospectus untrue in any material respect or which

 

8

 

constitutes an omission to state a material fact in such Registration Statement
or Prospectus or which requires the making of any changes in such Registration
Statement or Prospectus in order to make the statements therein not misleading,
(vi) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose and (vii) of any determination by the Company that a post-effective
amendment to a Registration Statement would be appropriate;

 

(f)            furnish
counsel for the Holders of Registrable Securities and, if known, counsel for
any underwriters of Registrable Securities copies of any comment letters
received from the SEC or any other request by the SEC or any state securities
authority for amendments or supplements to a Registration Statement and
Prospectus or for additional information;

 

(g)           make
every reasonable effort to obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement as soon as practicable and provide
notice as promptly as reasonably practicable to each Holder of the withdrawal
of any such order;

 

(h)           furnish
to each Holder of Registrable Securities, and each underwriter, if any, without
charge, at least one conformed copy of each Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
(without documents incorporated or deemed to be incorporated therein by
reference or exhibits thereto, unless requested);

 

(i)            cooperate
with the selling Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold and not bearing any restrictive legends; and cause such Registrable
Securities to be in such denominations (consistent with the provisions of the
Indenture) and registered in such names as the selling Holders or the
underwriters, if any, may reasonably request in writing at least five business
days prior to the closing of any sale of Registrable Securities;

 

(j)            upon
the occurrence of any event or the discovery of any facts, each as contemplated
by Sections 3(e)(v) and 3(e)(vi) hereof, as promptly as practicable after the
occurrence of such an event, use its reasonable best efforts to prepare a
supplement or post-effective amendment to a Registration Statement or the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, such Prospectus will
not contain at the time of such delivery any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  The Company agrees to
notify each Holder to suspend use of the Prospectus as promptly as practicable
after the occurrence of such an event, and each Holder hereby agrees to suspend
use of the Prospectus until the Company has amended or supplemented the
Prospectus to correct such misstatement or omission.  At such time as such public disclosure is otherwise made or the
Company determines that such disclosure is not necessary, in each case to
correct any misstatement of a material fact or to include any omitted material
fact, the Company agrees promptly to notify each Holder of such determination
and to furnish each Holder such number of copies of the Prospectus, as amended
or supplemented, as such Holder may reasonably request;

 

9

 

(k)           obtain
CUSIP numbers for all Registrable Securities not later than the effective date
of a Registration Statement, and provide the Trustee with printed certificates
for the Registrable Securities in a form eligible for deposit with the
Depositary;

 

(l)            (i)  cause the Indenture to be qualified under
the TIA in connection with the registration of the Registrable Securities, (ii)
cooperate with the Trustee and the Holders to effect such changes, if any, to
the Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and (iii) execute, and use its reasonable
best efforts to cause the Trustee to execute, all documents as may be required
to effect such changes, if any, and all other forms and documents required to
be filed with the SEC to enable the Indenture to be so qualified in a timely
manner;

 

(m)          subject
to Section 2.1(a), enter into agreements (including underwriting agreements)
and take all other customary and appropriate actions in order to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration:

 

(i)    make such representations and warranties to
the Holders of such Registrable Securities and the underwriters, if any, in
form, substance and scope as are customarily made by issuers to underwriters in
similar underwritten offerings as may be reasonably requested by such Holders
and underwriters;

 

(ii)   in connection with any underwritten offering,
seek to obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably satisfactory
to the managing underwriters, if any, and the Holders of a majority in
principal amount of the Registrable Securities being sold) addressed to each
selling Holder (where reasonably possible) and the underwriters, if any,
covering the matters customarily covered in opinions requested in sales of
securities or underwritten offerings and such other matters as may be
reasonably requested by such Holders and underwriters;

 

(iii)  in connection with any underwritten offering,
seek to obtain “comfort letters” and updates thereof with respect to such
Registration Statement and the Prospectus included therein, all amendments and
supplements thereto and all documents incorporated or deemed to be incorporated
by reference therein from the Company’s independent certified public
accountants and (where reasonably possible) from the independent certified
public accountants for any other Person or any business or assets whose
financial statements are included or incorporated by reference in the
Registration Statement or Prospectus, each addressed to the underwriters, if
any, and (where reasonably possible) to have such letter addressed to the
selling Holders of Registrable Securities, such letters to be in customary form
and covering matters of the type customarily covered in “comfort letters” to
underwriters in connection with similar underwritten offerings;

 

(iv)  if an underwriting agreement is entered into
in the case of any underwritten offering, cause the same to set forth
indemnification and contribution provisions and procedures substantially
equivalent to the indemnification and contribution provisions and procedures
set forth in Section 4 hereof with respect to the underwriters and all other
parties to

 

10

 

be indemnified pursuant to Section 4 hereof or, at the request of any
underwriters, in the form customarily provided to such underwriters in similar
types of transactions; and

 

(v)   deliver such other documents and certificates
as may be reasonably requested and as are customarily delivered in similar
offerings to the Holders of a majority in principal amount of the Registrable
Securities being sold and the managing underwriters, if any.

 

The above shall be done at (i) the effectiveness of such Registration
Statement (and, if appropriate, each post-effective amendment thereto) and (ii)
each closing under any underwriting or similar agreement as and to the extent
required thereunder;

 

(n)           if
reasonably requested in writing in connection with a disposition of Registrable
Securities pursuant to a Registration Statement, make reasonably available for
inspection during normal business hours by representatives of the Holders of
the Registrable Securities and any underwriters participating in any
disposition pursuant to a Registration Statement and any counsel or accountant
retained by such Holders or underwriters, all relevant financial and other
records, documents and properties of the Company reasonably requested by any
such Persons, and cause the appropriate officers, directors, employees, and any
other agents of the Company to make all information reasonably requested by any
such representative, underwriter, special counsel or accountant in connection
with a Registration Statement reasonably available for inspection during normal
business hours, and make such representatives of the Company reasonably
available for discussion during normal business hours of such documents as
shall be reasonably requested by the Initial Purchaser; provided, however,
that such persons shall first agree in writing with the Company that any
information that is reasonably designated by the Company in writing as
confidential at the time of delivery of such information shall be kept
confidential by such persons and shall be used solely for the purposes of
exercising rights under this Agreement, unless (i) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities; provided, however,
that such persons shall as promptly as reasonably practicable, provide written
notice to the Company of any request by any such regulatory authority for any
such confidential information of the Company in order to allow the Company a
reasonable amount of time to seek an appropriate protective order to prevent
the disclosure of such information, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to federal
securities laws in connection with the filing of any Registration Statement or
the use of any Prospectus referred to in this Agreement), (iii) such
information becomes generally available to the public other than as a result of
a disclosure or failure to safeguard by any such person or (iv) such
information becomes available to any such person from a source other than the
Company and such source is not bound by a confidentiality agreement or
otherwise obligated to keep such information confidential.

 

(o)           a
reasonable time prior to filing any Registration Statement, any Prospectus
forming a part thereof, any amendment to such Registration Statement or
amendment or supplement to such Prospectus (other than supplements that do
nothing more substantive than name one or more Holders), provide copies of such
document upon request to the Initial Purchaser, to the underwriter or
underwriters of an underwritten offering of Registrable Securities, if any,
and, if known, to counsel for the Initial Purchaser or underwriters, and make
such changes in any such document prior to the filing thereof as the Initial
Purchaser or the 

 

11

 

underwriter or underwriters, or any of their respective counsel may
reasonably request within three business days after the delivery of such copies
by the Company; cause the representatives of the Company to be available for
discussion of such documents during normal business hours as shall be
reasonably requested by the Initial Purchaser on behalf of the Holders or any
underwriter; and shall not at any time make any filing of any such document of
which the Initial Purchaser on behalf of the Holders, their counsel or any
underwriter shall not have previously been advised and furnished a copy or to
which the Majority Holders, the Initial Purchaser on behalf of the Holders, their
counsel or any underwriter shall reasonably object within a reasonable time
period;

 

(p)           use
its reasonable best efforts to cause all Registrable Securities to be listed on
any securities exchange or inter-dealer quotation system such as NASDAQ on
which similar debt or equity securities issued by the Company are then listed,
if any;

 

(q)           use
its reasonable best efforts to cause the Registrable Securities to be rated
with the appropriate rating agencies, if so requested by the Majority Holders
or by the underwriter or underwriters of an underwritten offering of
Registrable Securities, if any, unless the Registrable Securities are already
so rated;

 

(r)            otherwise
comply with all applicable rules and regulations of the SEC and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering at least twelve (12) months which shall satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder; and

 

(s)           cooperate
and assist in any filings required to be made with the NASD.

 

The Company may (as a condition to such Holder’s
participation in the Shelf Registration) require each Holder of Registrable
Securities to furnish to the Company such information regarding such Holder and
the proposed distribution by such Holder of such Registrable Securities as the
Company may from time to time reasonably request in writing.  Each Holder further agrees promptly to
furnish to the Company in writing all information required to be disclosed in
order to make the information previously furnished to the Company by such
Holder not misleading, any other information regarding such Holder and the
distribution of such Registrable Securities as may be required to be disclosed
in the Registration Statement under applicable law or pursuant to SEC comments
and any information otherwise required by the Company to comply with applicable
law or regulations.  Each Holder further
agrees, following termination of the Effectiveness Period, to notify the
Company, within ten business days of a request, of the amount of Registrable
Securities sold pursuant to the Registration Statement and, in the absence of a
response, the Company may assume that all of the Holder’s Registrable
Securities were so sold.

 

Each Holder agrees that, upon receipt of any notice
from the Company of the happening of any event or the discovery of any facts,
each of the kind described in Sections 3(e)(ii), 3(e)(iii) or 3(e)(v) through
3(e)(vii) hereof, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to a Registration Statement until receipt by
such Holder of (i) the copies of the supplemented or amended Prospectus
contemplated by Section 3(j) hereof or (ii) written notice from the Company
that the Shelf Registration is once again effective or that no

 

12

 

supplement or amendment is required. 
If so directed by the Company, such Holder will deliver to the Company
(at the Company’s expense) all copies in such Holder’s possession, other than
permanent file copies then in such Holder’s possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice.  Nothing in this paragraph shall
prevent that accrual of Liquidated Damages on any Securities.

 

If any of the Registrable Securities covered by any
Registration Statement are to be sold in an underwritten offering, the
underwriter or underwriters and manager or managers that will manage such
offering will be selected by the Majority Holders of such Registrable
Securities included in such offering and shall be reasonably acceptable to the
Company.  No Holder of Registrable
Securities may participate in any underwritten registration hereunder unless
such Holder (a) agrees to sell such Holder’s Registrable Securities on the
basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements, (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements and
(c) provides the Company with the information required in Section 2.1(d) above.

 

4.             Indemnification
and Contribution.

 

(a)           The
Company agrees to indemnify and hold harmless the Initial Purchaser, each
Holder, each Person who participates as an underwriter (each, an “Underwriter”)
and each Person, if any, who controls any Initial Purchaser, Holder or
Underwriter within the meaning of either Section 15 of the 1933 Act or Section
20 of the 1934 Act as follows:

 

(i)    against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment or supplement thereto) pursuant to which
Registrable Securities were registered under the 1933 Act, including all
documents incorporated therein by reference, or any omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading, or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto) or any omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;

 

(ii)   against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section 4(d)
below) any such settlement is effected with the written consent of the Company;
and

 

(iii)  against any and all expense whatsoever, as
incurred (including the reasonable fees and disbursements of counsel chosen by
any indemnified party), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim

 

13

 

whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above;

 

provided,
however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of the Initial Purchaser, any Holder or Underwriter (or any person
who expressly controls such Initial Purchaser, Holder or Underwriter) expressly
for use in a Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto) provided  further
that this indemnity agreement shall not apply to any loss, liability, claim,
damage or expense if the Holder fails to deliver at or prior to the written
confirmation of sale, the most recent Prospectus, as amended or supplemented,
and such Prospectus, as amended or supplemented, would have corrected such
untrue statement or omission or alleged untrue statement or omission of a
material fact and the delivery thereof was required by law.

 

(b)           Each
Holder, severally but not jointly, agrees to indemnify and hold harmless the
Company, the Initial Purchaser, each Underwriter and the other selling Holders,
and each of their respective directors and officers, and each Person, if any,
who controls the Company, the Initial Purchaser, any Underwriter or any other
selling Holder within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in Section 4(a) hereof, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto) or any Prospectus included therein (or any amendment or supplement
thereto) in reliance upon and in conformity with written information with
respect to such Holder furnished to the Company by or on behalf of such Holder
or any other person who controls such Holder expressly for use in the Registration
Statement (or any amendment thereto) or such Prospectus (or any amendment or
supplement thereto); provided, however, that no such Holder shall
be liable for any claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Registrable Securities pursuant to
such Registration Statement.

 

(c)           Each
indemnified party shall give notice as promptly as reasonably practicable to
each indemnifying party of any action or proceeding commenced against it in
respect of which indemnity may be sought hereunder, but failure so to notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement.  An indemnifying party may participate at its
own expense in the defense of any such action; provided, however,
that counsel to the indemnifying party shall not (except with the consent of
the indemnified party) also be counsel to the indemnified party.  In no event shall the indemnifying party or
parties be liable for the fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any

 

14

 

litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought under this Section 4
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.

 

(d)           If
at any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 4(a)(ii) effected without its written consent if
(i) such settlement is entered into more than forty-five (45) days after
receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least
thirty (30) days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.

 

(e)           If
the indemnification provided for in this Section 4 is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.

 

The relative fault of such indemnifying party or
parties on the one hand and the indemnified party or parties on the other hand
shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by such
indemnifying party or parties or such indemnified party or parties, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

 

(f)            The
Company, the Holders and the Initial Purchaser agree that it would not be just
or equitable if contribution pursuant to this Section 4 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in paragraph (e) above.  The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred to
above in this Section 4 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.

 

Notwithstanding the provisions of this Section 4, no
Initial Purchaser, Holder or Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which Registrable
Securities sold by it pursuant to a Registration Statement were offered exceeds
the amount of any damages that such Initial Purchaser, Holder or Underwriter

 

15

 

has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.

 

No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.

 

For purposes of this Section 4, each Person, if any,
who controls an Initial Purchaser, Holder or Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as such Initial Purchaser, Holder or Underwriter, as the
case may be, and each director of the Company, each officer of the Company who
signed the Registration Statement and each Person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company.  The respective obligations of the Initial Purchaser,
Holders, and Underwriters to contribute pursuant to this Section 4 are several
in proportion to the principal amount of Securities sold by them pursuant to a
Registration Statement and not joint.

 

The indemnity and contribution provisions contained in
this Section 4 shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Initial Purchaser, Holder or Underwriter or any Person
controlling any Initial Purchaser, Holder or Underwriter, or by or on behalf of
the Company, its officers, or directors or any Person controlling the Company
and (iii) any sale of Registrable Securities pursuant to a Registration
Statement.

 

5.             Miscellaneous.

 

5.1           Rule
144 and Rule 144A.  If the Company
ceases to be subject to the reporting requirements of Section 13 or 15 of the
1934 Act, it will upon the request of any Holder or beneficial owner of
Registrable Securities (a) make publicly available such information (including,
without limitation, the information specified in Rule 144A(d)(4) under the 1933
Act) as is necessary to permit sales pursuant to Rule 144 under the 1933 Act,
(b) deliver or cause to be delivered, promptly following a request by any
Holder or beneficial owner of Registrable Securities or any prospective
purchaser or transferee designated by such Holder or beneficial owner, such
information (including, without limitation, the information specified in Rule
144A(d)(4) under the 1933 Act) as is necessary to permit sales pursuant to Rule
144A under the 1933 Act and it will take such further action as any Holder or
beneficial owner of Registrable Securities may reasonably request, and (c) take
such further action that is reasonable in the circumstances, in each case, to
the extent required from time to time to enable such Holder to sell its
Registrable Securities without registration under the 1933 Act within the
limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, (ii) Rule 144A under the 1933 Act,
as such Rule may be amended from time to time or (iii) any similar rules or
regulations hereafter adopted by the SEC. 
Upon the request of any Holder or beneficial owner of Registrable
Securities, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.

 

5.2           No
Inconsistent Agreements.  The
Company has not entered into nor will the Company on or after the date of this
Agreement enter into any agreement which is inconsistent

 

16

 

with the rights granted to the Holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof.  The rights granted to the Holders hereunder
do not and will not in any way conflict with and are not and will not be
inconsistent with the rights granted to the holders of any of the Company’s
other issued and outstanding securities under any other agreements entered into
by the Company or any of its subsidiaries.

 

5.3           Amendments
and Waivers.  The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or departure. 
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other Holders of Registrable Securities may be given by
Holders of at least a majority of the Registrable Securities being sold by such
Holders pursuant to such Registration Statement; provided that the
provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding
sentence.  Each Holder of Registrable
Securities outstanding at the time of any such amendment, modification,
supplement, waiver or consent or thereafter shall be bound by any such
amendment, modification, supplement, waiver or consent effected pursuant to
this Section 5.3, whether or not any notice, writing or marking indicating
such amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

 

5.4           Notices.  All notices and other communications
provided for or permitted hereunder shall be made in writing by hand delivery,
registered first-class mail, telecopier or any courier guaranteeing overnight
delivery (a) if to a Holder (other than the Initial Purchaser), at the most
current address set forth on the records of the registrar under the Indenture,
(b) if to an Initial Purchaser, at the most current address given by such
Initial Purchaser to the Company by means of a notice given in accordance with
the provisions of this Section 5.4, which address initially is the address set
forth in the Purchase Agreement with respect to such Initial Purchaser, (c) if
to the Company, initially at the Company’s address set forth in the Purchase
Agreement, and thereafter at such other address of which notice is given in
accordance with the provisions of this Section 5.4, and (d) if to any
Underwriter, at the most current address given by such Underwriter to the
Company by means of a notice given in accordance with the provisions of this
Section 5.4, which address initially is the address set forth in the applicable
underwriting agreement.

 

All such notices and communications shall be deemed to
have been duly given:  at the time
delivered by hand, if personally delivered; two business days after being
deposited in the mail, postage prepaid, if mailed; when receipt is
acknowledged, if telecopied; and on the next business day if timely delivered
to an air courier guaranteeing overnight delivery.

 

Copies of all such notices, demands or other
communications shall be concurrently delivered by the Person giving the same to
the Trustee, at the address specified in the Indenture.

 

17

 

5.5           Successors
and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors, assigns and
transferees of each of the parties, including, without limitation and without
the need for an express assignment, subsequent Holders; provided, that (a) this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquires
Registrable Securities from a Holder and (b) nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms hereof or of the Purchase Agreement or the
Indenture.  If any transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be held
subject to all of the terms of this Agreement, and by taking and holding such
Registrable Securities, such Person shall be conclusively deemed to have agreed
to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement
and, if applicable, the Purchase Agreement, and such person shall be entitled
to receive the benefits hereof.

 

5.6           Third
Party Beneficiaries.  The Initial
Purchaser (even if the Initial Purchaser is not a Holder of Registrable
Securities) shall be a third party beneficiary of the agreements made hereunder
between the Company, on the one hand, and the Holders, on the other hand, and
shall have the right to enforce such agreements directly to the extent they
deem such enforcement necessary or advisable to protect their rights or the
rights of Holders hereunder.  Each
Holder of Registrable Securities shall be a third party beneficiary to the
agreements made hereunder between the Company, on the one hand, and the Initial
Purchaser, on the other hand, and shall have the right to enforce such
agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights hereunder.

 

5.7           Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

5.8           Severability.
In the event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.

 

5.9           GOVERNING
LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICT OF LAWS THEREOF.

 

5.10         Counterparts.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

 

18

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.

 

	
   

  	
  MSC.SOFTWARE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Louis A. Greco

  
	
   

  	
   

  	
  Name:

  	
  Louis A. Greco

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President,
  Chief

  Financial Officer and Corporate

  Secretary

  

 

Confirmed and accepted as of the date first above written:

 

MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED

 

 

	
  By:

  	
  /s/ Leonard Chung

  	
   

  
	
   

  	
  Leonard Chung

  
	
   

  	
  Vice President

  

 

19Exhibit 4.1

 

FIFTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER

 

This FIFTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER
dated as of April 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, 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 the
Borrowers and Bluecurrent, Inc. (“Bluecurrent”), regarding accounts
receivable owing from Bluecurrent to the Borrowers and that the Borrowers have
initiated suit against Bluecurrent to recover amounts owing from Bluecurrent;

 

WHEREAS,
as a result of such dispute, the entire amount of accounts receivable owing
from Bluecurrent to the Borrowers no longer satisfy the criteria of “Eligible
Accounts” as set forth in the Credit Agreement, and the Borrowers’ financial
results for the fiscal period ending December 31, 2002 have been adversely
affected;

 

WHEREAS,
after giving effect to the exclusion from the Borrowing Base of the accounts
owing from Bluecurrent, the Revolving Credit Exposure exceeds the Borrowing
Base, and as a result thereof, an Event of Default is continuing under the
Credit 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 Borrowers
have advised the Lender that they failed to satisfy various financial covenants
set forth in the Credit Agreement, which failures constitute additional Events
of Default under the Credit Agreement (the “December 31, 2002 Events of
Default”);

 

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

 

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

 

 

WHEREAS, the Lender has agreed to waive the
Overadvance Event of Default and the December 31, 2002 Events of Default and to
amend certain provisions of the Credit Agreement, among other things, to revise
the financial covenants contained therein and to provide for overadvances for
the benefit of the Borrowers until December 31, 2003, or such later date as the
Lender may agree in writing in an aggregate amount outstanding from time to
time 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 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 Overadvance Event of Default and December 31, 2002 Events of Default.

 

Subject
to 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 parties
agree that the foregoing waiver is limited solely to (i) the Events of Default
arising out of the failure of ARC and its Subsidiaries, through the date
hereof, to cause the Revolving Credit Exposure to be less than or equal to the
Borrowing 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 the
Credit Agreement for the fiscal period ended December 31, 2002, and nothing
herein shall be construed as a waiver of any other presently existing or future
Event of Default 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. is hereby amended by
replacing clause (c) contained in such definition in its entirety with the
following 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

 

2

 

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

 

(ii)                                  The
following new definition of “Overadvance Amount” is hereby inserted in Section
1.1 in appropriate alphabetical order:

 

“‘Overadvance Amount’
means (a) at any time during the period from March 7, 2003 through the
Overadvance Termination Date, the amount by which the Revolving Credit Exposure
exceeds the Borrowing Base at such time; provided that (i) the Overadvance Amount
shall not at any time exceed the Initial Overadvance Limit (as it may be
reduced from time to time), and (ii) for purposes of calculating the
Overadvance Amount, the Borrowing Base shall not include any accounts
receivable owing to the Borrowers by Bluecurrent Inc., and (b) at any other
time, $0.  Notwithstanding the terms of
clause (a) above, the Overadvance Amount shall be $0 at any time that (w) the
Wynnchurch Guaranty shall not be in full force and effect, (x) Wynnchurch shall
have contested the enforceability of the Wynnchurch Guaranty, (y) Wynnchurch
shall have delivered notice to any Credit Party or to the Lender of its
intention to terminate the Wynnchurch Guaranty, or (z) Wynnchurch shall have
failed to pay when due any payment required to be paid or shall for any other reason
be in default under the Wynnchurch Guaranty.

 

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

 

“‘Initial Overadvance
Limit’ means $2,000,000; provided that the Initial Overadvance Limit shall
be reduced from time to time, upon the payment in cash by Bluecurrent, Inc.
(“Bluecurrent”), to the Borrowers of amounts due in respect of accounts
receivable owing by Bluecurrent to the Borrowers, on a dollar for dollar basis in
an amount equal to such cash payments; provided that no such reduction
in the Initial Overadvance Limit shall become effective until three days after
receipt by the Lender of such cash payment for application to the outstanding
Loans.

 

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

 

“‘Interest
Expense’ means, for any period, the sum, without duplication, for the
Borrowers 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 Wynnchurch Subordinated 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 Subordinated Debt Financing, plus (b) the net amounts
payable (or minus the net amounts receivable) in respect of Hedging Agreements
accrued during such period 

 

3

 

(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 hereunder during such period.”

 

(v)                                 The
definition of “Fixed Charges” is amended by inserting, after the term
“September 30, 2002” contained in clause (d) thereof, the term “and December
31, 2002”.

 

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

 

“‘Gross
Availability’ means, at any time, the lesser of (a) the Revolving Credit
Commitment at such time, and (b) the Borrowing Base plus the Overadvance Amount
at such time.”

 

(vii)                           The
following new definition of “New Wynnchurch Subordinated Notes” is hereby
inserted in Section 1.1 in appropriate alphabetical order:

 

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

 

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

 

“‘Overadvance
Termination Date’ means December 31, 2003, or such later date as the Lender
may agree in writing.”

 

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

 

“‘Subordinated
Indebtedness’ means (a) Indebtedness of the Borrowers pursuant to the
Subordinated Debt Financing 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.”

 

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

 

4

 

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

 

(xi)                                The
following new definition of “Wynnchurch Guaranty” is hereby inserted in Section
1.1 in appropriate alphabetical order:

 

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

 

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

 

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

 

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

 

(i)                                     Subsection
2.1(a) is hereby deleted in its entirety and replaced with the following new
Subsection 2.1(a):

 

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

 

(ii)                                  Subsection
2.1(d) is hereby deleted in its entirety and replaced with the following new
Subsection 2.1(d):

 

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

 

5

 

(c)                                  Amendment to
Section 2.4 of the Credit Agreement.  Section 2.4 of the Credit Agreement is hereby amended by deleting
Subsection 2.4(b)(ii)(B) in its entirety and replacing it with the following
new Subsection 2.4(b)(ii)(B):

 

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

 

(d)                                 Amendment to
Section 2.6 of the Credit Agreement.  Section 2.6 of the Credit Agreement is hereby amended by deleting
Subsection 2.6(a)(i)(y) in its entirety and replacing it with the following new
Subsection 2.6(a)(i)(y):

 

“(y) the Borrowing Base
plus the Overadvance Amount, and”

 

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

 

(i)                                     Subsection
8.6(a) is hereby deleted in its entirety and replaced with the following new
Subsection 8.6(a):

 

“(a)                            The
Credit Parties will not declare or make any Restricted Junior Payment at any
time; 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) no
Blockage Period (as defined below) shall be continuing, and (C) 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 holders from time to time of the Wynnchurch
Subordinated Notes or the New Wynnchurch Subordinated Notes, and Wynnchurch and
any other holders from time to time of the Wynnchurch Subordinated Notes or the
New Wynnchurch Subordinated Notes may accept and retain regularly scheduled
quarterly payments of interest but no principal in respect of the Wynnchurch
Subordinated Notes and the New Wynnchurch Subordinated Notes on the dates and
in the amounts set forth in the applicable Subordinated Debt Documents; provided
that in no event shall the aggregate amount of interest payments made in
respect of the Wynnchurch Subordinated Notes or the New Wynnchurch 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 aggregate outstanding principal balance of the Wynnchurch
Subordinated Notes and the New Wynnchurch Subordinated Notes without the prior
written consent of the Lender, except that (1) if (v) the Lender has received a
Compliance Certificate indicating that the Borrowers are in compliance with
Section 8.10(b) 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 Lender that after giving effect to such payment, Excess
Availability shall equal or exceed $5,000,000, the aggregate amount of interest
payments made in respect of

 

6

 

the Wynnchurch Subordinated Notes during any calendar
quarter may total up to (xx) 4.50% of the outstanding principal balance of the
Wynnchurch Subordinated Notes plus (yy) the amount of prior interest
payments that were not paid in respect of the Wynnchurch Subordinated Notes 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 Lender that (xx) for the period
of thirty days immediately prior to giving effect to such payment, Excess
Availability 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 holder of the New Wynnchurch Subordinated Notes, and Wynnchurch and any
other holder of the New Wynnchurch Subordinated Notes may accept and retain
payments of principal and interest in respect of the New Wynnchurch Subordinated
Notes (including without limitation the amount of prior interest payments that
were not paid in respect of the New Wynnchurch 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 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 holder of the Wynnchurch Subordinated Notes or the New Wynnchurch
Subordinated Notes, and Wynnchurch and any other holder of the Wynnchurch
Subordinated Notes or the New Wynnchurch Subordinated Notes may accept and
retain 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 Subordinated
Notes and the New Wynnchurch Subordinated Notes on the dates and in the amounts
provided for in the Wynnchurch Subordinated Notes and the New Wynnchurch
Subordinated Notes, respectively (as in effect on the dates of issuance thereof).”

 

(ii)                                  Subsection
8.6(b) is hereby deleted in its entirety and replaced with the following new
Subsection 8.6(b):

 

(b)                                 In
addition to the interest payments permitted under Section 8.6(a) above, (i) so
long as no Payment Default exists and no Blockage Period is continuing:  (A) the Borrowers may pay reasonable
directors’ fees and reimburse Wynnchurch and any other holder of the Wynnchurch
Subordinated Notes or the New Wynnchurch Subordinated Notes for reasonable costs
and expenses incurred by Wynnchurch or such holder in connection with the
Subordinated Indebtedness owing to Wynnchurch or such holder, and (B) with the
written consent of the Lender, which consent shall not be unreasonably withheld
or delayed, the

 

7

 

Borrowers may retain Wynnchurch or any other holder of
the Wynnchurch Subordinated Notes or the New Wynnchurch Subordinated Notes to
perform, and pay to Wynnchurch or such holder 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 Lender 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 Capital, Ltd.,or the holder of the New Wynnchurch Subordinated
Notes, and Wynnchurch Capital, Ltd., or the holder of the New Wynnchurch
Subordinated 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 Wynnchurch
Guaranty by Wynnchurch.

 

(f)                                    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 March 31, 2003, have a consolidated Tangible
Capital Base of less than (1,000,000) or (ii) 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 (x) (1,000,000) plus
(y) on a cumulative basis, 50% of positive consolidated net income (without
reduction for losses) for each fiscal quarter ending after March 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 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

  

 

8

 

(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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1 through March
  31, 2003

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1 through June
  30, 2003

  	
   

  	
  $

  	
  1,400,000

  	
   

  

 

(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
$2,000,000 at any time during any fiscal year, commencing with the fiscal year
ending December 31, 2003.”

 

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

 

(h)                                 Termination
of Right to Request or Continue Eurodollar Loans.  Notwithstanding anything to the contrary set
forth in the Credit Agreement, the Borrowers shall have no right to request or
continue Loans as Eurodollar Loans, and to the extent that any Eurodollar Loans
remain outstanding as of the date hereof, such Loans shall be converted into
Base Rate Loans as of the date hereof.

 

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

 

9

 

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 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.

 

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 a guaranty made by Wynnchurch (the
“Wynnchurch Guaranty”) of the Borrower’s obligations in respect of the
Overadvance Amount, which guaranty shall be in form and substance satisfactory
to the Lender;

 

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

 

(e)                                  The
Borrowers and Wynnchurch shall have executed and delivered to the Lender an
amendment to the Subordination and Intercreditor Agreement reflecting the
amendments to Section 8.6 of the Credit Agreement contained in this Amendment.

 

(f)                                    The
Borrowers shall have delivered to the Lender evidence that Wynnchurch has
executed and delivered to the Borrowers a written 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;

 

(g)                                 The
Borrowers shall have reimbursed 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; and

 

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

 

10

 

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 Loan Documents, except for the waiver of the Overadvance Event 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.

 

[Remainder of Page Left Intentionally Blank]

 

11

 

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:

  	
   

  	
   

  
	
   

  	
  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:

  
					

 

12

 

	
   

  	
  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:

  

 

13

 

	
   

  	
  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:

  

 

14

 

EXHIBIT D

 

[New Form of Exhibit D to
Credit Agreement]

 

15

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"}]]