Exhibit 10.8.20.7

 

SEVENTH AMENDMENT

TO

MULTICURRENCY CREDIT AGREEMENT, LIMITED WAIVER

AND CONSENT OF GUARANTORS

 

This SEVENTH AMENDMENT TO MULTICURRENCY CREDIT AGREEMENT, LIMITED WAIVER AND
CONSENT OF GUARANTORS (this “Amendment”) is dated as of August 19, 2005, and
entered into by and among WESTAFF, INC., a Delaware corporation (“Parent”),
WESTAFF (USA), INC., a California corporation (“US Borrower”), WESTAFF (U.K.)
LIMITED, a limited liability company incorporated under the laws of England and
Wales (“UK Borrower”), WESTAFF SUPPORT, INC., a California corporation (“Term
Borrower”, and together with US Borrower and UK Borrower, the “Borrowers”), the
financial institutions signatory hereto that are parties as Lenders to the
Credit Agreement referred to below (the “Lenders”), and GENERAL ELECTRIC CAPITAL
CORPORATION, as agent for the US Revolving Lenders, the Term Lenders and the UK
Revolving Lenders (as defined in the Credit Agreement referred to below).

 

Recitals

 

Whereas, the Parent, the Borrowers, the Lenders and Agents have entered into
that certain Multicurrency Credit Agreement dated as of May 17, 2002 (as amended
by that certain First Amendment to Multicurrency Credit Agreement, Limited
Waivers and Consent of Guarantors, dated as of October 31, 2002, as further
amended by that certain Second Amendment to Multicurrency Credit Agreement,
Limited Waivers and Consent of Guarantors, dated as of June 13, 2003, that
certain Third Amendment to Multicurrency Credit Agreement, Limited Waivers and
Consent of Guarantors, dated as of September 3, 2003, that certain Fourth
Amendment to Multicurrency Credit Agreement, Limited Waivers and Consent of
Guarantors, dated as of February 20, 2004, that certain Fifth Amendment to
Multicurrency Credit Agreement and Consent of Guarantors, dated as of July 31,
2004, and that certain Sixth Amendment to Multicurrency Credit Agreement and
Consent of Guarantors, dated as of January 5, 2004 (the “Sixth Amendment”) and
as further modified by certain consents and waivers of the Lenders (the “Credit
Agreement”; capitalized terms used in this Amendment without definition shall
have the meanings given such terms in the Credit Agreement); and

 

Whereas, the Borrowers have requested that the Lenders agree to amend the Credit
Agreement to increase the L/C Sublimit and permitted Capital Expenditures and
grant a limited waiver on the terms set forth herein; and

 

Whereas, the Requisite Lenders are willing to approve the increase in the L/C
Sublimit and permitted Capital Expenditures and a limited waiver on the terms
and conditions set forth in this Amendment (which Amendment shall be effective
as of the date that all conditions to such effectiveness set forth herein have
been satisfied, the “Effective Date”).

 

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Now, therefore, in consideration of the premises and the mutual agreements set
forth herein, the Parent, the Borrowers, the Lenders, and Agents agree as
follows:

 

1.                                       AMENDMENTS TO CREDIT AGREEMENT. 
SUBJECT TO THE CONDITIONS AND UPON THE TERMS SET FORTH IN THIS AMENDMENT, THE
CREDIT AGREEMENT IS HEREBY AMENDED AS FOLLOWS:

 

1.1                                 AMENDMENT TO ANNEX B (LETTERS OF CREDIT) OF
THE CREDIT AGREEMENT.  ANNEX B OF THE CREDIT AGREEMENT IS HEREBY AMENDED TO
DELETE THE SECOND SENTENCE OF CLAUSE (A)(I) OF SUCH ANNEX B IN ITS ENTIRETY AND
TO REPLACE IT WITH THE FOLLOWING:

 

“The aggregate amount of all such Letter of Credit Obligations shall not at any
time exceed the least of (i) Forty Million Dollars ($40,000,000) (the “L/C
Sublimit”), (ii) the Maximum US Amount less the aggregate outstanding principal
balance of the US Revolving Credit Advances and the Swing Line Loan and
(iii) the US Borrowing Base less the aggregate outstanding principal balance of
the US Revolving Credit Advances and the Swing Line Loan.”

 

1.2                                 Amendment to Annex G (Financial Covenants)
of the Credit Agreement.  Paragraph (a) of Annex G of the Credit Agreement is
hereby amended to delete the amount set forth therein for Fiscal Year 2005 in
its entirety and to replace it with “$8,500,000”.

 

2.                                       CLARIFICATION TO SECTION 6.14.  The
Lenders hereby withdraw the consent given under the third paragraph of that
certain Consent to Sale of Norway and Denmark Operations and Payment of
Subordinated Debt dated June 15, 2005  to certain payments of Subordinated
Debt.  By execution of this Amendment, the parties acknowledge that all payments
of Subordinated Debt are, and shall remain, subject to satisfaction of the
conditions set forth in Sections 6.14(j) (x), (y) and (z) of the Credit
Agreement

 

3.                                       ONE-TIME ADJUSTMENTS TO EBITDA.  
Subject to the provisions of this Section 3 and the satisfaction of the other
conditions set forth in this Amendment, the Lenders hereby agree that, solely
for the purpose of determining compliance with Annex G (Financial Covenants) to
the Credit Agreement, the Parent and its Subsidiaries may (i) make a one-time
add-back adjustment to EBITDA for the Fiscal Period ended March 19, 2005 for CEO
separation charges in the aggregate amount of $533,000, (ii) make a one-time
adjustment to increase EBITDA for the Fiscal Period ended July 9, 2005 in the
aggregate amount of up to $1,163,000 to include gains recorded on the sale of
the shares of Westaff A/S and Westaff AS, and (iii) make a one-time add back
adjustment for the Fiscal Period ended August 6, 2005 for restructuring charges,
to the extent incurred in such Fiscal Period, in the aggregate amount of up to
$450,000.  Such add-back adjustments and adjustments are in addition to the
add-back adjustments to EBITDA for non-cash charges set forth in Section 2 of
the Sixth Amendment.  For the avoidance of doubt, the add-backs to EBITDA under
all Amendments to the Credit Agreement are solely for the purpose of determining
compliance with Annex G (Financial Covenants) and are not to be added back for
the purpose of determining interest in accordance with Section 1.5(a) of the
Credit Agreement.

 

4.                                       REPRESENTATIONS AND WARRANTIES OF THE
PARENT AND THE BORROWERS.  THE PARENT AND THE US BORROWER, JOINTLY AND
SEVERALLY, AND THE UK

 

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BORROWER, ONLY IN RESPECT OF ITSELF, SEVERALLY, MAKE THE FOLLOWING
REPRESENTATIONS AND WARRANTIES TO EACH LENDER AND EACH AGENT WITH RESPECT TO ALL
CREDIT PARTIES:

 

4.1                                 POWER AND AUTHORITY.  EACH OF THE CREDIT
PARTIES HAS ALL CORPORATE OR OTHER ORGANIZATIONAL POWER AND AUTHORITY TO ENTER
INTO THIS AMENDMENT AND, AS APPLICABLE, THE CONSENT OF GUARANTORS ATTACHED
HERETO (THE “CONSENT”), AND TO CARRY OUT THE TRANSACTIONS CONTEMPLATED BY, AND
TO PERFORM ITS OBLIGATIONS UNDER OR IN RESPECT OF, THE CREDIT AGREEMENT, AS
AMENDED HEREBY.

 

4.2                                 DUE AUTHORIZATION, NON-CONTRAVENTION.  THE
EXECUTION, DELIVERY AND PERFORMANCE BY EACH CREDIT PARTY OF THIS AMENDMENT AND
THE CONSENT, AS APPLICABLE, AND THE PERFORMANCE OF THE OBLIGATIONS OF EACH
CREDIT PARTY UNDER OR IN RESPECT OF THE CREDIT AGREEMENT AS AMENDED HEREBY
(A) HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE, LIMITED LIABILITY
COMPANY OR PARTNERSHIP ACTION, (B) DO NOT CONTRAVENE ANY PROVISION OF SUCH
PERSON’S CHARTER, BYLAWS OR PARTNERSHIP OR OPERATING AGREEMENT, AS APPLICABLE,
(C) DO NOT VIOLATE ANY LAW OR REGULATION OR ANY ORDER OR DECREE OF ANY COURT OR
GOVERNMENTAL AUTHORITY OF THE UNITED STATES OR THE UNITED KINGDOM OR, IN EACH
CASE, ANY POLITICAL SUBDIVISION THEREOF, (D) DO NOT CONFLICT WITH OR RESULT IN
THE BREACH OR TERMINATION OF, CONSTITUTE A DEFAULT UNDER OR ACCELERATE OR PERMIT
THE ACCELERATION OF ANY PERFORMANCE REQUIRED BY, ANY INDENTURE, MORTGAGE, DEED
OF TRUST, LEASE, AGREEMENT OR OTHER INSTRUMENT TO WHICH SUCH PERSON IS A PARTY
OR BY WHICH SUCH PERSON OR ANY OF ITS PROPERTY IS BOUND, EXCEPT WHERE ANY SUCH
VIOLATIONS, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT, AND (E) DO NOT RESULT IN THE CREATION OR
IMPOSITION OF ANY LIEN ON ANY OF THE PROPERTY OF SUCH PERSON.

 

4.3                                 EXECUTION, DELIVERY AND ENFORCEABILITY. 
THIS AMENDMENT AND THE CONSENT HAVE BEEN DULY EXECUTED AND DELIVERED BY EACH
CREDIT PARTY WHICH IS A PARTY THERETO AND THIS AMENDMENT, THE CONSENT AND THE
CREDIT AGREEMENT AS AMENDED HEREBY CONSTITUTE THE LEGAL, VALID AND BINDING
OBLIGATIONS OF SUCH CREDIT PARTY, ENFORCEABLE IN ACCORDANCE WITH THEIR TERMS,
EXCEPT AS ENFORCEABILITY MAY BE LIMITED BY INSOLVENCY LAWS OR SIMILAR LAWS
AFFECTING CREDITORS’ RIGHTS GENERALLY OR BY GENERAL EQUITABLE PRINCIPLES.

 

4.4                                 NO DEFAULT OR EVENT OF DEFAULT.  NO EVENT
HAS OCCURRED AND IS CONTINUING AFTER GIVING EFFECT TO THIS AMENDMENT OR WILL
RESULT FROM THE EXECUTION AND DELIVERY OF THIS AMENDMENT OR THE CONSENT THAT
WOULD CONSTITUTE A DEFAULT OR AN EVENT OF DEFAULT.

 

4.5                                 REPRESENTATIONS AND WARRANTIES.  AFTER
GIVING EFFECT TO THIS AMENDMENT, EACH OF THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THE LOAN DOCUMENTS IS AND WILL BE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS ON AND AS OF THE DATE HEREOF AND AS OF THE EFFECTIVE DATE OF THIS
AMENDMENT, EXCEPT TO THE EXTENT THAT SUCH REPRESENTATIONS AND WARRANTIES
SPECIFICALLY RELATE TO AN EARLIER DATE, IN WHICH CASE THEY WERE TRUE, CORRECT
AND COMPLETE IN ALL MATERIAL RESPECTS AS OF SUCH EARLIER DATE.

 

5.                                       CONDITIONS TO EFFECTIVENESS OF THIS
AMENDMENT.  THIS AMENDMENT SHALL BE EFFECTIVE ONLY IF AND WHEN (I) SIGNED BY,
AND WHEN COUNTERPARTS HEREOF SHALL HAVE BEEN DELIVERED TO THE US AGENT OR ITS
COUNSEL (BY HAND DELIVERY, MAIL OR TELECOPY) BY THE PARENT, THE BORROWERS AND
THE REQUISITE LENDERS; (II) EACH GUARANTOR SHALL HAVE DELIVERED TO THE

 

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US AGENT OR ITS COUNSEL EXECUTED COUNTERPARTS OF THE CONSENT; (III) BORROWERS
SHALL HAVE DELIVERED TO THE US AGENT OR ITS COUNSEL A CERTIFICATE CERTIFYING
THAT THE CHARTERS, BYLAWS (OR OTHER SIMILAR ORGANIZATIONAL DOCUMENTS) AND
RESOLUTIONS AUTHORIZING THE EXECUTION, DELIVERY AND PERFORMANCE BY THE CREDIT
PARTIES OF THEIR OBLIGATIONS UNDER THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS, EACH IN THE FORM DELIVERED TO THE AGENTS ON THE CLOSING DATE, ARE IN
FULL FORCE AND EFFECT AND HAVE NOT BEEN AMENDED, RESCINDED OR OTHERWISE MODIFIED
AS OF THE DATE OF THIS AMENDMENT (OTHER THAN AN AMENDMENT TO PARENT’S BYLAWS TO
REDUCE THE NUMBER OF MEMBERS OF THE BOARD OF DIRECTORS FROM SIX TO FIVE); THAT
NO OTHER RESOLUTIONS HAVE BEEN ADOPTED WITH RESPECT TO THIS AMENDMENT AND THAT
NO FURTHER AUTHORIZATION OR CONSENT IS REQUIRED TO BE OBTAINED WITH RESPECT TO
THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AMENDMENT, THE CONSENT AND THE
CREDIT AGREEMENT AS AMENDED HEREBY; AND AN INCUMBENCY CERTIFICATE FOR EACH
CREDIT PARTY AND (IV) THE US AGENT, FOR THE RATABLE BENEFIT OF THE LENDERS,
SHALL HAVE RECEIVED PAYMENT BY THE US BORROWER OF A NON-REFUNDABLE FEE EQUAL TO
$50,000..

 

6.                                       EFFECT OF AMENDMENT; RATIFICATION. 
THIS AMENDMENT IS A LOAN DOCUMENT.  FROM AND AFTER THE DATE ON WHICH THIS
AMENDMENT BECOMES EFFECTIVE, ALL REFERENCES IN THE LOAN DOCUMENTS TO THE CREDIT
AGREEMENT SHALL MEAN THE CREDIT AGREEMENT AS AMENDED HEREBY.  EXCEPT AS
EXPRESSLY AMENDED OR WAIVED HEREBY, THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS, INCLUDING THE LIENS GRANTED THEREUNDER, SHALL REMAIN IN FULL FORCE
AND EFFECT, AND ALL TERMS AND PROVISIONS THEREOF ARE HEREBY RATIFIED AND
CONFIRMED.  EACH OF THE PARENT AND EACH BORROWER CONFIRMS THAT, AS AMENDED
HEREBY, EACH OF THE LOAN DOCUMENTS IS IN FULL FORCE AND EFFECT.

 

7.                                       RELEASE AND WAIVER OF CLAIMS, DEFENSES
AND RIGHTS OF SET OFF.  EACH OF THE PARENT AND THE BORROWERS ACKNOWLEDGES THAT
THE US AGENT, THE UK AGENT AND THE LENDERS HAVE PERFORMED ALL OBLIGATIONS AND
DUTIES OWED TO THE PARENT AND THE BORROWERS UNDER THE LOAN DOCUMENTS THROUGH THE
DATE HEREOF, AND EACH SUCH PARTY FURTHER, ACKNOWLEDGES, REPRESENTS AND WARRANTS
THAT NONE OF THE PARENT OR THE BORROWERS HAS ANY CLAIM, CAUSE OF ACTION,
DEFENSE, OR RIGHT OF SET OFF AGAINST THE US AGENT, THE UK AGENT OR THE LENDERS,
AND, TO THE EXTENT THAT ANY SUCH PARTY HAS ANY SUCH RIGHTS, EACH OF THE PARENT
AND THE BORROWERS HEREBY RELEASES, WAIVES, AND FOREVER DISCHARGES THE US AGENT,
THE UK AGENT AND THE LENDERS (TOGETHER WITH EACH OF THEIR PREDECESSORS,
SUCCESSORS AND ASSIGNS) AND EACH OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
AND REPRESENTATIVES FROM EACH ACTION, CAUSE OF ACTION, SUIT, DEBT, DEFENSE,
RIGHT OF SET OFF, OR OTHER CLAIM WHATSOEVER, IN LAW OR IN EQUITY, KNOWN OR
UNKNOWN AGAINST THE US AGENT, THE UK AGENT OR THE LENDERS, OR SUCH OFFICERS,
EMPLOYEES, AGENTS OR REPRESENTATIVES.  EACH OF THE PARENT AND EACH BORROWER
HEREBY SPECIFICALLY WAIVES AS AGAINST THE US AGENT, THE UK AGENT OR THE LENDERS
ANY RIGHTS THEY OR ANY OF THEM MAY HAVE UNDER SECTION 1542 OF THE CALIFORNIA
CIVIL CODE, WHICH PROVIDES AS FOLLOWS:  “A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

 

8.                                       APPLICABLE LAW.  THIS AMENDMENT SHALL
BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS
AND DECISIONS OF THE STATE OF CALIFORNIA APPLICABLE TO

 

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CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED
STATES.

 

9.                                       COMPLETE AGREEMENT.  THIS AMENDMENT
SETS FORTH THE COMPLETE AGREEMENT OF THE PARTIES IN RESPECT OF ANY AMENDMENT TO
ANY OF THE PROVISIONS OF ANY LOAN DOCUMENT.  THE EXECUTION, DELIVERY AND
EFFECTIVENESS OF THIS AMENDMENT DO NOT CONSTITUTE A WAIVER OF ANY DEFAULT OR
EVENT OF DEFAULT, AMEND OR MODIFY ANY PROVISION OF ANY LOAN DOCUMENT EXCEPT AS
EXPRESSLY SET FORTH HEREIN OR CONSTITUTE A COURSE OF DEALING OR ANY OTHER BASIS
FOR ALTERING THE OBLIGATIONS OF ANY CREDIT PARTY.

 

10.                                 CAPTIONS; COUNTERPARTS.  THE CATCHLINES AND
CAPTIONS HEREIN ARE INTENDED SOLELY FOR CONVENIENCE OF REFERENCE AND SHALL NOT
BE USED TO INTERPRET OR CONSTRUE THE PROVISIONS HEREOF. THIS AMENDMENT MAY BE
EXECUTED BY ONE OR MORE OF THE PARTIES TO THIS AMENDMENT ON ANY NUMBER OF
SEPARATE COUNTERPARTS (INCLUDING BY TELECOPY), ALL OF WHICH TAKEN TOGETHER SHALL
CONSTITUTE BUT ONE AND THE SAME INSTRUMENT.

 

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IN WITNESS WHEREOF, each of the undersigned has duly executed this Seventh
Amendment to Multicurrency Credit Agreement, Limited Waiver and Consent of
Guarantors as of the date set forth above.

 

 

WESTAFF (USA), INC.

 

 

 

By:

/s/ Dirk A. Sodestrom

 

Name:

Dirk A. Sodestrom

 

Title:

Senior Vice President and Chief Financial
Officer

 

 

 

WESTAFF SUPPORT, INC.

 

 

 

By:

/s/ Dirk A. Sodestrom

 

Name:

Dirk A. Sodestrom

 

Title:

Senior Vice President and Chief Financial
Officer

 

 

 

WESTAFF (U.K.) LIMITED

 

 

 

By:

/s/ Patricia M. Newman

 

Name:

Patricia M. Newman

 

Title:

Director

 

 

 

GENERAL ELECTRIC CAPITAL

 

CORPORATION,

 

as US Agent, UK Agent, a US Revolving Lender, a
Term Lender and a UK Revolving Lender

 

 

 

By:

/s/ Lawrence E. Ridgway

 

By: Lawrence E. Ridgway

 

Duly Authorized Signatory

 

 

 

BANK OF AMERICA, N. A.,

 

as Documentation Agent, a US Revolving Lender, a
Term Lender and a UK Revolving Lender

 

 

 

By:

/s/ David T. Knoblauch

 

Name: David T. Knoblauch

 

Title: Senior Vice President

 

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The following Person is a signatory to this Seventh Amendment to Multicurrency
Credit Agreement, Limited Waiver and Consent of Guarantors in its capacity as a
Credit Party and not as a Borrower.

 

 

WESTAFF, INC.

 

 

 

By:

/s/ Dirk A. Sodestrom

 

Name:

Dirk A. Sodestrom

 

Title:

Senior Vice President and Chief Financial
Officer

 

S-1

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CONSENT OF GUARANTORS

 

Each of the undersigned is a Guarantor of the Obligations of the Borrowers under
the Credit Agreement and each other Loan Document (including US Borrower and
Term Borrower in its capacity as a Guarantor of the Obligations of the other
Borrowers) and hereby (a) consents to the foregoing Amendment, (b) acknowledges
that notwithstanding the execution and delivery of the foregoing Amendment, the
obligations of each of the undersigned Guarantors are not impaired or affected
and the Parent Guaranty, the Subsidiary Guaranty, and the cross-guaranty
contained in the Credit Agreement continue in full force and effect, and
(c) ratifies the Parent Guaranty, the Subsidiary Guaranty or the cross-guaranty
contained in the Credit Agreement, as applicable, and each of the Loan Documents
to which it is a party and further ratifies the Liens granted by it to any Agent
for its benefit and the benefit of the Lenders.

 

[signatures following; remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, each of the undersigned has executed and delivered this
CONSENT OF GUARANTORS as of the date first set forth above.

 

 

 

WESTAFF, INC.

 

 

 

 

 

By

/s/ Dirk A. Sodestrom

 

 

Name:  Dirk A. Sodestrom

 

Title:  Senior Vice President and Chief

 

            Financial Officer

 

 

 

 

 

WESTERN MEDICAL SERVICES, INC.,

 

a California corporation

 

 

 

 

 

By:

/s/ Dirk A. Sodestrom

 

 

Name:  Dirk A. Sodestrom

 

Title:  Senior Vice President and Chief

 

            Financial Officer

 

 

 

 

 

WESTAFF (USA), INC.

 

 

 

 

 

By:

/s/ Dirk A. Sodestrom

 

 

Name:  Dirk A. Sodestrom

 

Title:  Senior Vice President and Chief

 

            Financial Officer

 

 

 

 

 

WESTAFF SUPPORT, INC.

 

 

 

 

 

By:

/s/ Dirk A. Sodestrom

 

 

Name:  Dirk A. Sodestrom

 

Title:  Senior Vice President and Chief

 

            Financial Officer

 

 

 

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MEDIAWORLD INTERNATIONAL

 

 

 

 

 

By:

/s/ Dirk A. Sodestrom

 

 

Name:  Dirk A. Sodestrom

 

Title:  Senior Vice President and Chief

 

            Financial Officer

 

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