EXHIBIT EE
SECOND AMENDMENT TO GUARANTY AGREEMENT
This SECOND AMENDMENT TO GUARANTY AGREEMENT dated as of November 14,
2003 (this "Amendment"), is made by WYNNCHURCH CAPITAL PARTNERS, L.P., a
Delaware limited partnership ("Wynnchurch USA", and WYNNCHURCH CAPITAL PARTNERS
CANADA, L.P., an Alberta, Canada limited partnership ("Wynnchurch Canada", and
collectively with Wynnchurch USA, the "Guarantors"), and FLEET CAPITAL
CORPORATION (the "Lender").
W I T N E S S E T H
WHEREAS, 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 the Lender are parties to a Credit and
Security Agreement dated as of January 31, 2002 (as amended, supplemented or
otherwise modified from time to time, including, without limitation, by the
Eighth Amendment described below, the "Credit Agreement"), pursuant to which the
Lender has agreed, subject to the terms and conditions set forth therein, to
make loans and other extensions of credit to the Borrowers;
WHEREAS, the Credit Agreement as in effect prior to the Eighth
Amendment provides, among other things, for the Lender to make overadvances (the
"Overadvances") for the benefit of the Borrowers until March 31, 2004, or such
later date as the Lender may agree in writing (the "Overadvance Termination
Date"), in an aggregate amount outstanding from time to time of up to $2,000,000
(the "Overadvance Limit"), as reduced from time to time;
WHEREAS, Wynnchurch has executed and delivered a Guaranty Agreement
dated as of April 14, 2003, as amended by a First Amendment to Guaranty
Agreement dated as of July 15, 2003 (the "Guaranty Agreement"), pursuant to
which Wynnchurch has guarantied to the Lender the repayment of the Overadvances
up to the Overadvance Limit, as reduced from time to time;
WHEREAS, the terms of the Credit Agreement (as in effect prior to the
Eighth Amendment) and the Guaranty Agreement respectively provide that the
Overadvance Limit and the amount of Overadvances guarantied by Wynnchurch shall
respectively 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 (the "Bluecurrent
Receivables"), on a dollar for dollar basis in an amount equal to such payments;
WHEREAS, the Borrowers have requested that the Lender enter into an
Eighth Amendment to Credit Agreement dated as of the date hereof (the "Eighth
Amendment") whereby the Credit Agreement would be amended, among other things,
to (i) extend the Overadvance Termination Date, and (ii) eliminate the automatic
reduction of the Overadvance Limit resulting from the payment of Bluecurrent
Receivables;
WHEREAS, it is a condition to the Lender's agreement to enter into the
Eighth Amendment that Wynnchurch shall have agreed to amend the Guaranty
Agreement to
extend the term thereof and to eliminate the automatic reduction in the amount
of Overadvances guarantied thereunder resulting from payments made in respect of
Bluecurrent Receivables;
NOW, THEREFORE, in order to induce the Lender to enter into the Eight
Amendment and to continue to make Loans and Overadvances to the Borrowers as
provided in the Credit Agreement, and for other good and valuable consideration,
receipt of which is hereby acknowledged by the Guarantors, the Guarantors hereby
agree as follows:
1. Capitalized Terms.
Capitalized terms used herein which are defined in the Guaranty
Agreement have the same meanings herein as therein, except to the extent that
such meanings are amended hereby.
2. Amendments to Guaranty Agreement.
The Guarantors and the Lender hereby agree that the Guaranty Agreement
is amended as follows:
(a) Amendment to Section 2(b) of the Guaranty Agreement.
Section 2(b) of the Guaranty Agreement is hereby amended and restated in its
entirety as follows:
"(b) Notwithstanding any provision of this
Agreement to the contrary, the obligations of the Guarantors
under this Agreement shall not exceed the sum of (i)
$2,000,000 (the "Initial Guaranty Amount"), plus (ii) in the
event any payment to be made by the Guarantors hereunder is
not made when due, interest at the Post-Default Rate accruing
on such unpaid amount from the date such amount became due
hereunder, plus (iii) the reasonable expenses (including fees
and expenses of counsel), if any, incurred by the Lender in
enforcement of and collection under this Agreement."
(b) Amendment to Section 3(a) of the Guaranty Agreement.
Section 3(a) of the Guaranty Agreement is hereby amended and restated in its
entirety as follows:
"(a) Upon failure by the Borrowers punctually to
pay or perform the Guaranteed Obligation on the Overadvance
Termination Date or on any date prior to the Overadvance
Termination Date that the entire balance of the Loans shall
become due as a result of acceleration or the occurrence of
events described in subsections 9.1(g) or (h) of the Credit
Agreement, the Lender may make demand upon the Guarantors for
the payment or performance of the Guaranteed Obligation (as
outstanding on Overadvance Termination Date or such prior date
as the entire balance of the Loans shall become due, as
applicable) and the Guarantors bind and oblige themselves to
make such payment or performance not later than 20 days
following such demand by Lender.
2
(c) Amendment to Section 7 of the Guaranty Agreement.
Section 7 of the Guaranty Agreement is hereby amended and restated in its
entirety as follows:
"7. Termination. This Agreement shall terminate
upon the earlier to occur of: (a) such time as (i) all of the
Borrower's obligations under the Credit Agreement have been
paid in full, (ii) no Letters of Credit remain outstanding,
and (iii) the Revolving Credit Commitment has terminated or
expired, and (b) such time as all of the Guarantors'
obligations under this Agreement have been paid in full."
3. Ratification; Acknowledgement.
The Guaranty Agreement, as modified and amended by this Amendment,
remains in full force and effect and is hereby ratified and confirmed in all
respects except that, upon and after the effectiveness of the Eighth Amendment,
each reference in the Guaranty Agreement to the Credit Agreement shall mean and
be a reference to the Credit Agreement as amended by the Eighth Amendment. The
Guarantors hereby acknowledge that, as a result of the Eighth Amendment, the
"Overadvance Termination Date" under the Credit Agreement has been extended to
March 31, 2004 or such later date as the Lender may agree in writing.
4. Representations and Warranties.
The Guarantors hereby represent, warrant and confirm that: (a) the
representations and warranties of the Guarantors contained in the Guaranty
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) the Guarantors are in compliance with all of the
covenants, terms and provisions set forth in the Guaranty Agreement; and (c) the
execution, delivery and performance by the Guarantors of this Amendment (i) have
been duly authorized by all necessary action on the part of the Guarantors, (ii)
will not violate any applicable law or regulation or the organizational
documents of any Guarantor, (iii) will not violate or result in a default under
any indenture, agreement or other instrument binding on any Guarantor or any of
its assets, and (iv) do not require any consent, waiver or approval of or by any
Person which has not been obtained.
5. Successors and Assigns.
This Amendment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns
6. Counterparts; Governing Law.
This Amendment may be executed in any number of counterparts which
together shall constitute one agreement and delivery of an executed signature
page by facsimile transmission shall be effective as delivery of a manually
executed counterpart. This Amendment shall be governed and construed in
accordance with the laws (other than the conflict of laws rules) of the
Commonwealth of Massachusetts.
3
7. Fee.
In consideration for the Guarantors' entry into this Amendment, ARC
agrees to pay the Guarantors Thirty Thousand Dollars ($30,000) per month (pro
rated for partial months) for each month during the period (the "Guaranty
Period") from the date of this Amendment to the date of termination of the
Guaranty Agreement and satisfaction in full of all obligations of Guarantors
hereunder (the "Amendment Payment"), payable in the manner set forth in this
Section 7, and Lender hereby consents to such payment. The Amendment Payment
shall be treated as if it is additional interest payable pursuant to that
certain Note dated as of January 31, 2002, as amended, of ARC to Wynnchurch
Canada, and that certain Note dated as of January 31, 2002, as amended, of ARC
to Wynnchurch USA (such notes collectively, the "Notes"). The Amendment Payment
shall be allocated between the Guarantors in proportion to the original
principal amount of such Notes and in each case such payments shall accrue as of
the date when earned (it being agreed that such monthly fee shall be deemed
earned in advance on the date of this Amendment and the first day of each month
during the Guaranty Period) . The Amendment Payment shall accrue interest as if
it were interest accrued pursuant to the Notes. Notwithstanding the foregoing,
the Amendment Payment shall be deemed to be a "Subordinated Obligation" pursuant
to the Subordination and Intercreditor Agreement dated as of January 31, 2002,
among the Guarantors, the Lender and the Borrowers (as amended, the
"Subordination Agreement") and shall be deferred and not be paid, except as
permitted under the terms of the Credit Agreement and the Subordination
Agreement, treating the payment of the Amendment Payment as the payment of
additional interest pursuant to the Notes. In addition to the foregoing, and
without limiting any other agreement between the Guarantors and the Borrower,
the Borrower hereby (i) confirms that it is obligated to pay all fees described
in the Guaranty Agreement as amended (including the fee due Wynnchurch Capital
Ltd. described in the First Amendment to Guaranty Agreement dated as of July 15,
2003) and (ii) agrees to pay (forthwith upon demand by Guarantors) all legal and
accounting fees and expenses incurred by Guarantors in connection with the
Guaranty Agreement and all amendments thereto, including without limitation all
fees and expenses incurred in connection with analysis and filings made under or
in connection with United States securities laws.
4
IN WITNESS WHEREOF, the parties have executed this Amendment as a
sealed instrument as of the date first above written.
GUARANTORS:
WYNNCHURCH CAPITAL PARTNERS, L.P.
By: Wynnchurch Partners, L.P., its General Partner
By: Wynnchurch Management Inc.,
its General Partner
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxx x. Xxxxxxxx
Title: President
WYNNCHURCH CAPITAL PARTNERS CANADA, L.P.
By: Wynnchurch Partners Canada, L.P.,
its General Partner
By: Wynnchurch GP Canada, Inc.,
its General Partner
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxx x. Xxxxxxxx
Title: President
LENDER:
FLEET CAPITAL CORPORATION
By: /s/ Xxxxxxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxxxxxx Xxxxxxx
Title: Senior Vice President
2nd Amendment to Guaranty
The undersigned acknowledge the foregoing Amendment and agree to be bound by the
terms of Section 7 thereof.
ALTERNATIVE RESOURCES CORPORATION
By: /s/ Xxxxxx Xxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Financial Officer
ARC SERVICE, INC.
By: /s/ Xxxxxx Xxxxxxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Treasurer
ARC SOLUTIONS, INC.
By: /s/ Xxxxxx Xxxxxxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Treasurer
ARC MIDHOLDING, INC.
By: /s/ Xxxxxx Xxxxxxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Treasurer
WRITERS INC.
By: /s/ Xxxxxx Xxxxxxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Treasurer
2nd Amendment to Guaranty
ARC TECHNOLOGY MANAGEMENT LLC
By: ARC SERVICE, INC., its Manager and sole member
By: /s/ Xxxxxx Xxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxx
Title: Director
ARC STAFFING MANAGEMENT LLC
By: ARC SERVICE, INC., its Manager and sole member
By: /s/ Xxxxxx Xxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxx
Title: Director
ARC SHARED SERVICES LLC
By: ARC SERVICE, INC., its Manager and sole member
By: /s/ Xxxxxx Xxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxx
Title: Director
2nd Amendment to Guaranty
