SEVENTH AMENDMENT TO CREDIT AGREEMENT
AND AMENDMENT TO COLLATERAL DOCUMENTS AND GUARANTIES
THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT AND AMENDMENT TO COLLATERAL
DOCUMENTS AND GUARANTIES dated as of December 4, 2000 (the "AMENDMENT"), is
among Alternative Resources Corporation, a Delaware corporation, the undersigned
Lenders and American National Bank and Trust Company of Chicago, as Agent and as
Lender. Unless otherwise defined herein, capitalized terms used herein shall
have the meanings ascribed to them in Credit Agreement (as hereinafter defined).
ARC Solutions, Inc., Writers, Inc., ARC Service, Inc. and ARC Midholding, Inc.
execute and deliver this Amendment for the purpose of making certain amendments
to the Collateral Documents and Guaranties and confirming certain agreements
with respect thereto.
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and the Lenders entered into that
certain Credit Agreement dated as of November 7, 1997 as heretofore amended (as
so amended and as the same may hereafter be amended, modified, restated or
otherwise supplemented from time to time, the "CREDIT AGREEMENT");
WHEREAS, the Borrower, Agent and the Lenders wish to make certain
amendments to the Credit Agreement and the Borrower, Guarantors, Agent and
Lenders wish to make certain amendments to the Collateral Documents and
Guaranties;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, each of the undersigned agrees as
follows:
1. AMENDMENTS TO CREDIT AGREEMENT.
(a) Article I of the Credit Agreement shall be amended by adding
the following new definitions thereto in the appropriate alphabetical order:
"ANB Letter of Credit" means that certain Irrevocable Standby
Letter of Credit No. 60750813 issued by ANB for the account of the
Borrower in favor of Hartford Fire Insurance Company as Beneficiary in
an amount equal to $417,989 as amended, extended or replaced from time
to time.
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"L/C Outstandings" means with respect to the Letter of Credit
the maximum aggregate amount available for drawing thereunder under any
and all circumstances plus (b) the aggregate amount of all unreimbursed
payments and disbursements under the Letter of Credit.
"Cash Collateralize" means to deliver cash collateral to the
Agent to be held as cash collateral for the outstanding Letter of
Credit pursuant to documentation satisfactory to Agent. Derivatives of
such term have corresponding meanings.
(b) The definitions of Letter of Credit, Loan Documents, Obligations
and Outstanding Credit Exposure contained in Article I of the Credit Agreement
shall be amended in their entirety and as so amended shall read as follows:
"Letter of Credit " means that certain Irrevocable Standby
Letter of Credit issued by the Agent in favor of Hartford Fire
Insurance Company in the amount of $432,011, as amended, extended or
replaced from time to time.
"Loan Documents" means this Agreement and any Notes issued
pursuant to Section 2.13 hereof, the Collateral Documents, the
Guaranties and the applications executed and delivered in connection
with the ANB Letter of Credit and the Letter of Credit.
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Loans, all reimbursement obligations in respect
of the Letter of Credit and the ANB Letter of Credit, and accrued and
unpaid fees and all expenses, reimbursements, indemnities and other
obligations of the Borrower to the Lenders or to any Lender, the Agent
or any indemnified party arising under the Loan Documents.
"Outstanding Credit Exposure" means, as to any Lender at any
time, the sum of (a) the aggregate principal amount of its Loans
outstanding at such time plus (b) an amount equal to its Pro Rata Share
of L/C Outstandings at such time.
(c) Article II of the Credit Agreement shall be amended in its
entirety and as so amended shall read as follows:
2.1 COMMITMENT. From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make Loans to the Borrower
from time to time in amounts not to exceed in the aggregate at any one time
outstanding its Pro Rata Share of the Available Aggregate Commitment (i.e. the
Aggregate Commitments then in effect minus the aggregate principal amount of
Loans and L/C Outstandings), PROVIDED that at no time shall the Aggregate
Outstanding Credit Exposure (i.e. the aggregate principal amount of outstanding
Loans and L/C
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Outstandings hereunder) exceed the Borrowing Base as then determined and
computed. Subject to the terms of this Agreement, the Borrower may borrow, repay
and reborrow at any time prior to the Facility Termination Date. The Commitments
to lend hereunder shall expire on the Facility Termination Date.
2.2 REQUIRED PAYMENTS; TERMINATION. Any outstanding Advances and
all other unpaid Obligations shall be paid in full by the Borrower on the
Facility Termination Date. Additionally, on the Facility Termination Date
Borrower shall Cash Collateralize the outstanding amount of the Letter of
Credit. Additionally, if on any day the Aggregate Outstanding Credit Exposure
exceeds the lesser of (a) the Borrowing Base or (b) the Aggregate Commitment,
the Borrower shall immediately make a prepayment of the Loans in an amount
sufficient to eliminate such excess. Additionally, the Borrower shall, from time
to time, immediately prepay the Loans and the Aggregate Commitment shall
automatically reduce (subject to re-instatement upon request of the Borrower and
consent to do so by all the Lenders) in an amount equal to all income tax
refunds received by the Borrower. Additionally, the Borrower shall, from time to
time, immediately prepay the Loans in an amount equal to the net proceeds
received on account of the sale of any of its assets, including, without
limitation, any sale of Collateral.
2.3 RATABLE LOANS. Each Advance hereunder shall consist of
Revolving Loans made from the several Lenders ratably in proportion to the ratio
that their respective Commitments bear to the Aggregate Commitment.
2.4 TYPES OF ADVANCES. The Advances shall be Floating Rate
Advances selected by the Borrower in accordance with Section 2.9.
2.5 LETTER OF CREDIT PROVISIONS.
2.5.1 NOTICE AND APPLICATION. The Borrower shall give notice to the
Agent of the proposed issuance of the Letter of Credit on a Business Day which
is at least three Business Days (or such lesser number of days as the Agent
shall agree in its sole discretion) prior to the proposed date of issuance of
the Letter of Credit. Each such notice shall be accompanied by a letter of
credit application in form satisfactory to the Agent and be duly executed by the
Borrower. So long as the Agent has not received written notice that the
conditions precedent set forth in Section 4.2 with respect to the issuance of
such Letter of Credit have not been satisfied, the Agent shall issue the Letter
of Credit on the requested issuance date.
2.5.2 PARTICIPATIONS IN LETTER OF CREDIT. Concurrently with the
issuance of the Letter of Credit, the Agent shall be deemed to have sold and
transferred to each Lender and each Lender shall be deemed irrevocably and
unconditionally to have purchased and received from Agent, without recourse or
warranty, an undivided interest and participation, to the extent of its Pro Rata
Share in the Letter of Credit and the Borrower's reimbursement obligations with
respect thereto.
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2.5.3 REIMBURSEMENT OBLIGATIONS. The Borrower hereby unconditionally
and irrevocably agrees to reimburse the Agent for each payment or disbursement
made by the Agent under the Letter of Credit honoring any demand for payment
made by the beneficiary thereunder, in each case on the date that such payment
or disbursement is made. Any amount not reimbursed on the date of such payment
or disbursement shall bear interest from the date of such payment or
disbursement to the date that the Agent is reimbursed by he Borrower therefor,
payable on demand, at a rate per annum equal to the Alternate Base Rate from
time to time in effect PLUS 2.25% PLUS, beginning on the third Business Day
after receipt of notice from the Agent of such payment or disbursement, 2%. The
Agent shall notify the Borrower whenever any demand for payment is made under
the Letter of Credit by the beneficiary thereunder; PROVIDED that the failure of
the Agent to so notify the Borrower shall not affect the rights of the Agent in
any manner whatsoever.
2.5.4 LIMITATION ON OBLIGATIONS OF AGENT. In determining whether to
pay under the Letter of Credit, the Agent shall not have any obligation to the
Borrower or any Lender other than to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and appear
to comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by the Agent under or in connection with any
Letter of Credit, if taken or omitted in the absence of gross negligence and
willful misconduct, shall not impose upon the Agent any liability to the
Borrower or any Lender and shall not reduce or impair the Borrower's
reimbursement obligations set forth in SECTION 2.5.3 or the obligations of the
Lenders pursuant to SECTION 2.5.5.
2.5.5 FUNDING BY LENDERS TO AGENT. If the Agent makes any payment or
disbursement under the Letter of Credit and the Borrower has not reimbursed the
Agent in full for such payment or disbursement by 11:00 a.m., Chicago time, on
the date of such payment or disbursement, or if any reimbursement received by
the Agent from the Borrower is or must be returned or rescinded upon or during
any bankruptcy or reorganization of the Borrower or otherwise, each Lender shall
be obligated to pay to the Agent for its account, in full or partial payment of
the purchase price of its participation in such Letter of Credit, its Pro Rata
Share of such payment or disbursement (but no such payment shall diminish the
obligations of the Borrower under SECTION 2.5.3), and the Agent shall promptly
notify each Lender thereof. Each Lender irrevocably and unconditionally agrees
to so pay to the Agent in immediately available funds for its own account the
amount of such Lender's Pro Rata Share of such payment or disbursement. If and
to the extent any Lender shall not have made such amount available to the Agent
by 2:00 p.m., Chicago time, on the Business Day on which such Lender receives
notice from the Agent of such payment or disbursement (it being understood that
any such notice received after noon, Chicago time, on any Business Day shall be
deemed to have been received on the next following Business Day), such Lender
agrees to pay interest on such amount to the Agent for its account forthwith on
demand, for each day from the date such amount was to have been delivered to the
Agent to the date such amount is paid, at a rate per annum equal to (a) for the
first three days after demand, the Federal Funds Effective Rate from time to
time in effect and (b) thereafter, the Corporate Base Rate from time to time in
effect. Any Lender's failure to make available to the Agent its Pro Rata Share
of any such payment or disbursement shall not
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relieve any other Lender of its obligation hereunder to make available to the
Agent such other Lender's Pro Rata Share of such payment, but no Lender shall be
responsible for the failure of any other Lender to make available to the Agent
such other Lender's Pro Rata Share of any such payment or disbursement.
2.6 COMMITMENT FEE; REDUCTIONS IN AGGREGATE COMMITMENT; LETTER OF
CREDIT FEE.
(a) The Borrower agrees to pay to the Agent for the account of each
Lender a commitment fee at a per annum rate equal to one-half of one percent
(1/2%) on the daily unused portion of such Lender's Commitment from the date
hereof to and including the Facility Termination Date, payable on each
Payment Date hereafter and on the Facility Termination Date. The Letter of
Credit shall count as usage of the Commitments for purposes of calculating
the commitment fee due hereunder. The Borrower may permanently reduce the
Aggregate Commitment in whole, or in part ratably among the Lenders in
integral multiples of $1,000,000, upon at least one (1) Business Day's
written notice to the Agent, which notice shall specify the amount of any
such reduction, PROVIDED, HOWEVER, that the amount of the Aggregate
Commitment may not be reduced below the aggregate principal amount of the
Aggregate Outstanding Credit Exposure. All accrued commitment fees shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Loans hereunder.
(b) The Borrower agrees to pay to the Agent for the account of the
Lenders a letter of credit fee for the Letter of Credit equal to 2.25% per
annum of the average daily amount of L/C Outstandings in effect from time to
time from the date hereof to and including the Facility Termination Date,
payable on each Payment Date hereafter and on the Facility Termination Date
such fee to be for the pro rata account of the Lenders and computed on the
basis of a 360-day year, PROVIDED that at all times when the default rate of
interest is in effect pursuant to Section 2.12 hereof, the letter of credit
fee payable hereunder shall be increased by 2% per annum.
2.7 INTEREST OPTIONS. No Advance may be made as, converted
into or continued as a Eurodollar Advance.
2.8 OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from time to
time pay, without penalty or premium, all outstanding Floating Rate Advances or
any portion of the outstanding Floating Rate Advances upon notice to Agent by
11:00 a.m. (Chicago time) on the date of repayment.
2.9 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW
ADVANCES. The Borrower shall select the Type of Advance from time to time. The
Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Chicago time) on the Borrowing Date of each Floating Rate
Advance:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance, and
(ii) the aggregate amount of such Advance.
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Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Revolving Loan or Revolving Loans in funds immediately
available in Chicago to the Agent at its address specified pursuant to Article
XIII. The Agent will make the funds so received from the Lenders available to
the Borrower at the Agent's aforesaid address.
2.10 CONTINUATION OF OUTSTANDING ADVANCES. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are repaid.
2.11 CHANGES IN INTEREST RATE, ETC. Each Floating Rate Advance
shall bear interest on the outstanding principal amount thereof, for each day
from and including the date such Advance is made, to but excluding the date it
is paid, at a rate per annum equal to the Floating Rate for such day. Changes in
the rate of interest on that portion of any Advance maintained as a Floating
Rate Advance will take effect simultaneously with each change in the Alternate
Base Rate.
2.12 RATES APPLICABLE AFTER DEFAULT AND UNDER OTHER CIRCUMSTANCES.
Notwithstanding anything to the contrary contained in Section 2.9 or 2.10,
during the continuance of a Default or Unmatured Default the Required Lenders
may, at their option, by notice to the Borrower (which notice may be revoked at
the option of the Required Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in interest rates),
declare that each Floating Rate Advance shall bear interest at a rate per annum
equal to the Floating Rate in effect from time to time plus 2% per annum,
PROVIDED that, during the continuance of a Default under Section 7.6 or 7.7,
such interest rate shall be applicable to all Advances without any election or
action on the part of the Agent or any Lender.
2.13 METHOD OF PAYMENT. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds that the Agent received at
its address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge the account of the Borrower maintained with ANB for
each payment of principal, interest and fees as it becomes due hereunder.
2.14 NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS. (i) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record
(a) the amount of each Loan made hereunder and the Type thereof, (b) the amount
of any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (c) the
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amount of any sum received by the Agent hereunder from the Borrower and each
Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be PRIMA FACIE evidence of the existence and
amounts of the Obligations therein recorded absent demonstrable or manifest
error; PROVIDED, HOWEVER, that the failure of the Agent or any Lender to
maintain such accounts or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Obligations in accordance with their
terms.
(iv) Any Lender may request that its Loans be evidenced by a
promissory note representing its Revolving Loans, substantially in the form of
Exhibit E (each a "Note"). In such event, the Borrower shall prepare, execute
and deliver to such Lender such Note or Notes payable to the order of such
Lender. Thereafter, the Loans evidenced by each such Note and interest thereon
shall at all times (including after any assignment pursuant to Section 12.3) be
represented by one or more Notes payable to the order of the payee named therein
or any assignee pursuant to Section 12.3, except to the extent that any such
Lender or assignee subsequently returns any such Note for cancellation and
requests that such Loans once again be evidenced as described in paragraphs (i)
and (ii) above.
2.15. TELEPHONIC NOTICES. The Borrower hereby authorizes the Lenders
and the Agent to extend or continue Advances, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith believes to be acting on behalf of
the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices to be given telephonically. The
Borrower agrees to deliver promptly to the Agent a written confirmation, if such
confirmation is requested by the Agent or any Lender, of each telephonic notice
signed by an Authorized Officer. If the written confirmation differs in any
material respect from the action taken by the Agent and the Lenders, the records
of the Agent and the Lenders shall govern absent manifest or demonstrable error.
2.16. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof and at
maturity. Interest and commitment fees shall be calculated for actual days
elapsed on the basis of a 360-day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if payment
is received prior to 1:00 p.m. (local time) at the place of payment. If any
payment of principal of or interest on an Advance shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such payment.
2.17. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, and repayment notice received
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by it hereunder. The Agent will give each Lender prompt notice of each change in
the Alternate Base Rate.
2.18 LENDING INSTALLATIONS. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of any such Lending Installation.
Each Lender may, by written notice to the Agent and the Borrower in accordance
with Article XIII, designate replacement or additional Lending Installations
through which Loans will be made by it and for whose account Loan payments are
to be made.
2.19 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.20 DISBURSEMENTS OF ADVANCES; SETTLEMENTS AMONG AGENT AND LENDERS;
PAYMENTS OF INTEREST AND FEES; DISGORGEMENT OBLIGATIONS. (a) The outstanding
balance of Advances may fluctuate from day to day through the Agent's
disbursement of funds to, and receipt of funds from, the Borrower. In order to
minimize the frequency of transfers of funds between the Agent and each Lender,
Advances and payments will be settled according to the procedures described in
this Section 2.20. Notwithstanding these procedures, each Lender's obligation to
fund its portion of any Advances made by the Agent to the Borrower will commence
on the date such Advances are made by the Agent. Such payments will be made by
each Lender without setoff, counterclaim or reduction of any kind. The
provisions of this Section 2.20 shall not apply to the funding obligations of
the Lenders described in Section 2.5.5 hereof.
(b) On Friday of each week, or more frequently (including daily) if
the Agent so elects (each such day being a "Settlement Date"), the Agent will
advise each Lender by telephone or telecopy of the amount of each such Lender's
ratable share of the outstanding balance of Advance as of the close of business
of the Business Day immediately preceding the Settlement Date. In the event that
payments are necessary to adjust the amount of such Lender's share of the
outstanding balance of Advances to equal such Lender's Commitment percentage of
the Obligations as of any Settlement Date, such Lender will pay to the Agent, or
the Agent will
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pay to such Lender (as applicable) the amount necessary in same day funds by
wire transfer to the other's account not later than 4:00 p.m. Chicago time on
the Business Day following the Settlement Date.
(c) Notwithstanding the foregoing, the Agent, at its option, may
elect to require that each Lender provide funds in connection with any requested
borrowing hereunder on the scheduled borrowing date, and in such event the Agent
shall advise each Lender by telephone or telecopy of the amount to be funded by
such Lender no later than the borrowing date applicable thereto, and each such
Lender shall pay to the Agent such Lender's Commitment percentage of the
borrowing in same day funds by wire transfer to the Agent's account not later
than 4:00 p.m. Chicago time on such Borrowing date.
(d) On the first Business Day of each month (each, an "Interest
Settlement Date"), the Agent will advise each Lender by telephone or telecopy of
the amount of such Lender's commitment percentage of interest and fees on each
Loan and Letter of Credit fees as of the end of the last day of the immediately
preceding month. Provided that such Lender has made all payments required to be
made by it under this Agreement, the Agent will pay to such Lender, by wire
transfer to such Lender's account (as specified by such Lender on the signature
page of this Agreement or the applicable Assignment and Acceptance) not later
than 2:00 p.m. Chicago time on the next Business Day following the Interest
Settlement Date, such Lender's commitment percentage of interest and commitment
fees, in each instance, received by Agent in the immediately preceding month.
(e) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full as and when required hereunder, the
Agent may assume that the Borrower has made such payment in full to the Agent on
such date in immediately available funds and the Agent may (but shall not be so
required), in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender. If
the Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by the Agent
from the Borrower and such related payment is not received by the Agent, the
Agent shall be entitled to recover such amount from such Lender, and each Lender
shall repay to Agent on demand such amount, together with interest thereon for
each day from the date such amount is distributed to such Lender until the date
such Lender repays such amount to the Agent, at the Agent's cost of funds,
without setoff, counterclaim or deduction of any kind. If the Agent determines
at any time that any amount received by the Agent under this Agreement must be
returned to the Borrower or paid to any other Person pursuant to any solvency,
fraudulent conveyance or similar law or otherwise, then, notwithstanding any
other term or condition of this Agreement, the Agent will not be required to
distribute any portion of such payment to any Lender. In addition, each Lender
will repay to the Agent on demand any portion of such amount that the Agent has
distributed to such Lender, together with interest thereon at such rate, if any,
as the Agent is required to pay to the Borrower or such other Person, without
setoff, counterclaim or deduction of any kind.
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(d) Section 4.2 shall be amended in its entirety and as so amended
shall read as follows:
"4.2. EACH ADVANCE OR LETTER OF CREDIT ISSUANCE. The Lenders shall not
be required to make any Advance (other than as provided in Section 2.5 hereof or
with respect to an Advance that, after giving effect thereto and to the
application of the proceeds thereof, does not increase the aggregate amount of
outstanding Advances or nor shall the Agent be required to issue the Letter of
Credit), unless on the applicable Borrowing Date or issuance date, as the case
may be:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are true
and correct as of such Borrowing Date except to the extent any such
representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall have been true and correct on
and as of such earlier date.
(iii) All legal matters incident to the making of such Advance shall be
reasonably satisfactory to the Lenders and their counsel.
Each Borrowing Notice or request for issuance of the Letter of Credit
as the case may be, shall constitute a representation and warranty by the
Borrower that the conditions contained in Sections 4.2(i) and (ii) have been
satisfied."
(e) Section 6.31(c) of the Credit Agreement shall be amended in
its entirety to read as follows:
(c) All payments and collections received in respect of the
Obligations and all proceeds of the Collateral received, in each
instance, by the Agent or any of the Lenders shall be remitted to the
Agent and distributed as follows:
(i) first, to the payment of any outstanding costs
and expenses incurred by the Agent in monitoring, verifying,
protecting, preserving or enforcing the Liens on the
Collateral, and in protecting, preserving or enforcing rights
under this Agreement or any of the other Loan Documents, and
in any event including all costs and expenses of a character
which the Borrower has agreed to pay under Section 9.6 hereof
(such funds to be retained by the Agent for its own account
unless it has previously been reimbursed for such costs and
expenses by the Lenders, in which event such amounts shall be
remitted to the Lenders to reimburse them for payments
theretofore made to the Agent);
(ii) second, to the payment of any outstanding
interest or other fees or amounts due under this Agreement or
any of the other Loan Documents (other than for principal, or
on account of the ANB Letter of Credit) pro rata as among
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the Agent and the Lenders in accord with the amount of such
interest and other fees or amounts owing each;
(iii) third, to the payment of the principal of the
Loans and reimbursement obligations in respect of the Letter
of Credit , pro rata as among the Lenders in accord with the
then respective unpaid principal balances of the Loans and
reimbursement obligations;
(iv) fourth, to the Agent and the Lenders pro rata in
accord with the amounts of any other indebtedness, obligations
or liabilities of the Borrower owing to them and secured by
the Collateral Documents unless and until all such
indebtedness, obligations and liabilities have been fully paid
and satisfied; and
(v) fifth, to the Agent, to be held as collateral
security for any undrawn amounts in respect of the Letter of
Credit until the Agent is holding an amount of cash equal to
the then outstanding undrawn amount of the Letter of Credit;
(vi) sixth, to ANB, to the payment of any interest,
fees, principal or other amounts owing to ANB on account of
the ANB Letter of Credit, with any excess to ANB to be held as
collateral security for any undrawn amounts in respect of the
ANB Letter of Credit until ANB is holding an amount of cash
equal to the then outstanding undrawn amount of the ANB Letter
of Credit;
(vii) seventh, to the Borrower or to whomever the
Agent reasonably determines to be lawfully entitled thereto."
(f) The first paragraph of Section 8.1 of the Credit Agreement shall be
amended in its entirety and as so amended shall read as follows:
"8.1. Acceleration. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans or of the Agent to issue the Letter of Credit hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable and the Borrower shall immediately Cash Collateralize the full amount of
the Letter of Credit without any election or action on the part of the Agent or
any Lender. If any other Default occurs, the Required Lenders (or the Agent with
the consent of the Required Lenders) may, by notice to the Borrower terminate or
suspend the obligations of the Lenders to make Loans or to issue the Letter of
Credit hereunder, or declare the Obligations to be due and payable, or require
the Borrower to Cash Collateralize the full amount of the Letter of Credit or
all of the foregoing, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or further notice of any kind, all
of which the Borrower hereby expressly waives. The Borrower acknowledges and
agrees that the Lenders would not have an adequate remedy at law for failure of
the Borrower to Cash Collateralize the Letter of Credit and that the Agent on
behalf of the Lenders shall have the right to require the Borrower to
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specifically perform such undertaking whether or not any draws have been made
under the Letter of Credit
2. AMENDMENTS TO COLLATERAL DOCUMENTS AND GUARANTIES/REAFFIRMATION OF
SECURITY INTERESTS AND GUARANTEE OBLIGATIONS.
(a) Each Guaranty is hereby amended by amending the first
paragraph thereof in its entirety to read as follows:
"The undersigned hereby requests AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO ("ANB") (ANB and the other financial
institutions from time to time parties as lenders to the hereinafter
defined Credit Agreement being hereinafter collectively referred to as
the "Lenders" and individually as a "Lender") and the other Lenders, to
extend credit to ALTERNATIVE RESOURCES CORPORATION, a Delaware
corporation (the "Borrower") pursuant to that certain Credit Agreement
dated as of November 7, 1997 among ANB, as Agent (ANB in such capacity
together with its successors, the "Agent"), the Lenders and the
Borrower (as amended from time to time, the "Credit Agreement"), and in
consideration of any credit so extended, the undersigned hereby
absolutely and unconditionally guarantees prompt payment when due,
whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of any and all existing and future Secured
Obligations (as such term and any other capitalized term used herein
without definition is defined in the Credit Agreement and which
includes, without limitation, Loans, the Letter of Credit and the ANB
Letter of Credit) of every kind, nature and character, direct or
indirect, absolute or contingent (including all renewals, extensions
and modifications thereof and all reasonable attorneys' fees incurred
by any Lender or the Agent in connection with the collection or
enforcement thereof or hereof), of the Borrower to the Agent or any
Lender howsoever and whensoever created, arising, evidenced or acquired
under or in connection with the Credit Agreement or the ANB Letter of
Credit (as defined in the Credit Agreement) or any Loan Document (the
"Guaranteed Debt").
(b) The Pledge Agreement is hereby amended by amending the definition
of "Obligations" contained in Section 1 thereof in its entirety to read as
follows:
"Obligations" means any and all existing and future Secured
Obligations (as defined in the Credit Agreement and which includes,
without limitation, Loans, the Letter of Credit and the ANB Letter of
Credit, as such terms are defined in the Credit Agreement) of every
kind, nature and character, direct or indirect, absolute or contingent
(including all renewals, extensions and modifications thereof and all
reasonable fees, costs and expenses incurred by the Agent or any Lender
in connection with the documentation, administration, collection or
enforcement thereof), of the Company to the Agent or any Lender,
howsoever and whensoever created, arising, evidenced or acquired under
the Credit Agreement or in connection with the ANB Letter of Credit or
any Loan
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Document (as defined in the Credit Agreement) including, without
limitation, those arising under or pursuant to this Pledge Agreement."
(c) The Security Agreement is hereby amended by amending the definition
of "Liabilities" contained therein in its entirety to read as follows:
"LIABILITIES" means, as to each Debtor, any and all existing
and future Secured Obligations (as defined in the Credit Agreement and
which includes, without limitation, Loans, the Letter of Credit and the
ANB Letter of credit, as such terms are defined in the Credit
Agreement) of every kind, nature and character, direct or indirect,
absolute or contingent (including all renewals, extensions and
modifications thereof and all reasonable fees, costs and expenses
incurred by the Agent or any Lender in connection with the
documentation, administration, collection or enforcement thereof) of
such Debtor to the Agent or any Lender, howsoever and whensoever
created, arising, evidenced or acquired under the Credit Agreement or
in connection with the ANB Letter of Credit, or any Loan Document (as
defined in the Credit Agreement), including, without limitation, those
arising under or pursuant to this Agreement."
(d) The Collateral Assignment of Stock Purchase Agreement dated
November 7, 1997 from the Borrower in favor of the Agent for the benefit of the
Lenders shall be amended by amending the second paragraph thereof in its
entirety to read as follows:
"This Assignment is made and given as collateral security for
(i) the payment in full of any and all indebtedness, obligations and
liabilities of the Assignor to the Agent and the Lenders, evidenced by
or otherwise arising out of or relating to the Credit Agreement or any
other Loan Document, as well as for any and all other indebtedness,
obligations and liabilities of Assignor to the Agent and the Lenders
evidenced by or otherwise arising out of or relating to this Assignment
or constituting Secured Obligations (as such term is defined in the
Credit Agreement and which includes, without limitation, Loans, the
Letter of credit and the ANB Letter of Credit as such terms are defined
in the Credit Agreement) or in connection with the ANB Letter of Credit
or any Loan Document, in each case, whether now existing or hereafter
arising, due or to become due, direct or indirect, absolute or
contingent, joint or several or joint and several and however
evidenced, held or acquired, and (ii) all expenses and charges, legal
and otherwise incurred by the Agent or any Lender in collecting or
enforcing any of said indebtedness, obligations and liabilities or in
realizing on or protecting any security therefor including, without
limitation, the security interest granted hereunder (all of such
indebtedness, obligations, liabilities, expenses and charges identified
in the immediately foregoing clauses (i) and (ii) above being herein
referred to as the "LIABILITIES").
(e) The Borrower hereby confirms and agrees that the amendment
provided for in the foregoing clause (c) to the definition of the term
"Liabilities" contained in the Security Agreement is effective for all purposes
of the incorporation of such term by reference into the
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Trademark Security Agreement dated September 14, 2000 from the Borrower in favor
of the Agent for the benefit of the Lenders.
(f) The Borrower and Guarantors each hereby acknowledges and
agrees that, notwithstanding the execution and delivery of this Amendment, each
of the Collateral Documents and Guaranties, as amended hereby remains in full
force and effect and the rights and remedies of the Agent and Lenders
thereunder, the obligations of the Borrower thereunder and the liens and
security interests created and provided for thereunder remain in full force and
effect and shall not be affected, impaired or discharged hereby.
3. RELEASE.
In consideration for the agreement of the Agent and the Lenders to this
Amendment, Borrower and each Guarantor hereby release and forever discharge
Agent, each Lender, each of their parent corporations, affiliated corporations,
subsidiary corporations, predecessor corporations and successor corporations,
and the past and present officers, directors, agents, assigns, subrogees,
servants, employees, financial advisors and attorneys of each of them from any
and all claims, actions, causes of action, choses in action and suits of every
kind and nature whatsoever, whether at law or in equity, under any facts or
legal theory that Borrower or any Guarantor ever had, now has, or hereafter can,
shall or may have, in any way related to, arising out of or based upon this
Agreement, the Credit Agreement or any Loan Document, except for any such claims
arising out of Agent's or any Lender's future willful breach of this Agreement.
4. REPRESENTATIONS.
In order to induce the Lenders to execute and deliver this Amendment,
the Borrower hereby represents to the Lenders that as of the date hereof, the
representations and warranties set forth in Article 5 of the Credit Agreement
are and shall be and remain true and correct (except that the representations
contained in Section 5.4 shall be deemed to refer to the most recent financial
statements of the Borrower delivered to the Lenders) and the Borrower is in
compliance with all of the terms and conditions of the Credit Agreement after
giving effect to the amendments and waivers contemplated hereby and no Unmatured
Default or Default has occurred and is continuing under the Credit Agreement or
shall result after giving effect to this Amendment.
5. CONDITIONS PRECEDENT. This effectiveness of this Amendment shall be
subject to the satisfaction of all of the following conditions:
(a) CERTAIN DOCUMENTS. Agent shall have received this Amendment
duly executed by the Borrower, Guarantors and the Lenders.
(b) NO DEFAULT. After giving effect to this Amendment and the
waivers contained herein, no Unmatured Default or Default shall have occurred
and be continuing or will result
14
from the execution and delivery of, or the performance by Borrower of any of its
obligations under this Amendment.
6. MISCELLANEOUS.
(a) This Amendment shall become effective upon the execution and
delivery hereof to the Agent by the Borrower and the Lenders and the
satisfaction of the conditions precedent set forth in Section 4 hereof.
(b) Except as specifically amended herein, the Credit Agreement,
Guaranties and Collateral Documents shall continue in full force and effect
in accordance with its original terms. Reference to this specific Amendment
need not be made in any note, document, letter, certificate, the Credit
Agreement itself, any Guaranty, any Collateral Documents, the Notes, any
other Loan Document or any communication issued or made pursuant to or with
respect to the Credit Agreement, any Guaranty or any Collateral Document any
reference in any of such to the Credit Agreement, any Guaranty or any
Collateral Document being sufficient to refer to the same as amended hereby.
(c) The Borrower agrees to pay on demand all costs and expenses of
or incurred by the Agent in connection with the negotiation, preparation,
execution and delivery of this Amendment, including the reasonable fees and
expenses of counsel for the Agent.
(d) This Amendment may be executed in any number of counterparts,
and by the different parties on different counterparts, all of which taken
together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
[remainder of this page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, this Amendment has been duly executed by each of the
undersigned as of the day and year first set forth above.
ALTERNATIVE RESOURCES CORPORATION
By:_____________________________________
Name:___________________________________
Its:____________________________________
ARC SOLUTIONS, INC.
(formerly known as CGI Systems, Inc.)
By:_____________________________________
Name:___________________________________
Its:____________________________________
ARC SERVICE, INC.
By:_____________________________________
Name:___________________________________
Its:____________________________________
WRITERS, INC.
By:_____________________________________
Name:___________________________________
Its:____________________________________
ARC MIDHOLDING, INC.
(formerly known as CGI Corp.)
By:_____________________________________
Name:___________________________________
Its:____________________________________
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AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO, as Agent and
individually as a Lender
By:____________________________________
Name:__________________________________
Its:___________________________________
MELLON BANK, N.A.
By:____________________________________
Name:__________________________________
Its:___________________________________
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By:____________________________________
Name:__________________________________
Its:___________________________________
FLEET NATIONAL BANK
By:____________________________________
Name:__________________________________
Its:___________________________________
NATIONAL CITY BANK
By:____________________________________
Name:__________________________________
Its:___________________________________
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