EXHIBIT 10.8.32

 

Execution Version

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (this “Agreement”), dated as of February 14, 2008, is
entered into by and among U.S. BANK NATIONAL ASSOCIATION, a national banking
association, as administrative agent for the benefit of the Secured Parties (as
such term is defined in the Financing Agreement, as defined below) (“Agent”),
and WESTAFF (USA), INC., a California corporation (“Borrower”), WESTAFF, INC., a
Delaware corporation and the sole shareholder of Borrower (“Parent Guarantor”),
WESTAFF SUPPORT, INC., a California corporation and a wholly owned subsidiary of
Borrower (“Westaff Support”), and MEDIAWORLD INTERNATIONAL, a California
corporation and a wholly owned subsidiary of Borrower (“MediaWorld”; and
together with Borrower, Parent Guarantor and Westaff Support, each is
individually from time to time is referred to herein as a “Grantor” and
collectively as “Grantors”), with reference to the following facts:

 

RECITALS

 

A.            Borrower, Parent Guarantor, the Lenders party thereto
(collectively, the “Lenders”) and Agent are entering into a Financing Agreement
of even date herewith (the “Financing Agreement”), pursuant to which Agent and
the Lenders propose to provide certain credit facilities to Borrower.

 

B.            Concurrently therewith and herewith, (i) Parent Guarantor is
entering into a Continuing Guaranty dated as of even date herewith in favor of
Agent for the benefit of the Secured Parties (the “Parent Guaranty”), pursuant
to which Parent Guarantor agrees to guaranty the payment and performance of
Borrower’s obligations under the Financing Agreement and the other Loan
Documents; and (ii) Westaff Support and MediaWorld are entering into a
Continuing Guaranty dated as of even date herewith in favor of Agent for the
benefit of the Secured Parties (the “Subsidiary Guaranty”), pursuant to which
Westaff Support and MediaWorld agree to guaranty the payment and performance of
Borrower’s obligations under the Financing Agreement and the other Loan
Documents.

 

C.            Borrower is a member of an affiliated group of companies that
includes each other Grantor.

 

D.            The proceeds of the extensions of credit under the Financing
Agreement will be used in part to enable Borrower to make valuable transfers to
one or more of the other Grantors in connection with the operation of their
respective businesses.

 

E.             Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Financing Agreement.

 

F.             It is a condition to the effectiveness of the Financing Agreement
that each Grantor enter into this Agreement with Agent and hereby grant Agent a
security interest in the Collateral described below to secure the payment and
performance of such Grantor’s obligations to Agent and the Lenders under the
Financing Agreement and the other related Loan Documents entered into in
connection with (and as defined in) the Financing Agreement.

 

--------------------------------------------------------------------------------

 

G.            To induce Agent and the Lenders to enter into the Financing
Agreement and the other Loan Documents with Borrower and provide Borrower the
credit facilities contemplated thereunder, each Grantor is willing to enter into
this Agreement with Agent and grant Agent a security interest in the Collateral.

 

NOW, THEREFORE, the parties hereby agree as follows:

 

1.             DEFINITIONS.

 

1.1           Financing Agreement.  Any capitalized term used but not defined
herein shall have the meaning ascribed thereto in the Financing Agreement.

 

1.2           Defined Terms.  In addition to the other terms defined in this
Agreement, whenever the following capitalized terms (whether or not underscored)
are used, they shall be defined as follows:

 

“Code” means the Uniform Commercial Code, as enacted in the State of California,
as amended or superseded from time to time after the date of this Agreement.

 

“Collateral” means all of each Grantor’s right, title and interest in and to all
of each such Grantor’s personal property and assets, tangible and intangible,
now existing or hereafter acquired or arising, and wherever located, including:

 

(i)            all of such Grantor’s accounts, chattel paper, deposit accounts,
documents, equipment, fixtures, instruments, inventory, investment property,
general intangibles, goods, and letter-of-credit rights;

 

(ii)           all of such Grantor’s right, title and interest in and to the
commercial tort claims listed, or required to be listed, in Exhibit 5.7 to this
Agreement;

 

(iii)          without limiting the description of the property or any rights or
interests in the property described above in this definition of Collateral, all
of such Grantor’s right, title and interest in and to (a) all of such Grantor’s
money, cash, and other funds; (b) all attachments, accessions, parts and
appurtenances to, all substitutions for, and all replacements of any and all of
such Grantor’s equipment, fixtures and other goods; (c) all of such Grantor’s
agreements, as-extracted collateral, tangible chattel paper, electronic chattel
paper, health-care-insurance receivables, leases, lease contracts, lease
agreements, payment intangibles, proceeds of letters of credit, promissory
notes, records and software; and (d) all of such Grantor’s franchises, customer
lists, insurance refunds, insurance refund claims, tax refunds, tax refund
claims, pension plan refunds, pension plan reversions, (i) patents and patent
applications, (ii) service marks, service mark applications, trademarks,
trademark applications and trade names and all good will associated with any of
the foregoing, (iii) trade secrets, (iv) copyrights and copyright applications
and (v) licenses of all rights or property interests in any of the foregoing;

 

(iv)          all supporting obligations;

 

(v)           all of the products and proceeds of all of the foregoing described
property and interests in property, including cash proceeds and noncash
proceeds, and including proceeds of

 

2

--------------------------------------------------------------------------------

 

any insurance, whether in the form of original collateral or any of the property
or rights or interests in property described above in this definition of
Collateral; and

 

(vi)          all of the foregoing, whether now owned or existing or hereafter
acquired or arising, or in which such Grantor now has or hereafter acquires any
right, title or interest;

 

provided, however, that the Collateral shall not include any Excluded Property.

 

“Excluded Property” means collectively,

 

(i)            any equipment, fixture, inventory or other goods of such Grantor
which is subject to a Permitted Lien, but solely to the extent that the
documents evidencing such Permitted Lien explicitly prohibit the grant of a
security interest in or Lien on such property or asset; provided, however, that
at such time as such property or asset is no longer subject to such Lien or such
prohibition, such property or asset shall (without any act or delivery by any
Person) constitute Collateral hereunder;

 

(ii)           any rights of such Grantor under any General Intangible existing
prior to the Closing Date (other than with respect to any Account, payment
intangible, Chattel Paper or promissory note related thereto or as may otherwise
be provided under applicable law) (the “Affected Collateral”) if and solely to
the extent the creation by the relevant Grantor of a security interest pursuant
to this Agreement in such Grantor’s right, title and interest in such Affected
Collateral (A) is prohibited by legally enforceable provisions of any contract,
agreement, instrument or indenture governing such Affected Collateral and such
prohibition is not otherwise ineffective as a matter of law (such as pursuant
Section 9-406(f), 9-407(a) or 9-408(a) of the Code), (B) would give any other
party to such contract, agreement, instrument or indenture a legally enforceable
right to terminate its obligations thereunder or (C) is permitted only with the
consent of another party, if the requirement to obtain such consent is legally
enforceable and is not otherwise ineffective as a matter of law (such as
pursuant Section 9-406(f), 9-407(a) or 9-408(a) of the Code) and such consent
has not been obtained (provided, that in any event any account or any money or
other amounts due or to become due under any such contract, agreement,
instrument or indenture shall not be Excluded Property to the extent that any of
the foregoing is (or if it contained a provision limiting the transferability or
pledge thereof would be) subject to Section 9-406 of the Code); provided,
however, that, notwithstanding the foregoing, at such time as such Affected
Collateral is no longer subject to such prohibition, such right of termination
or such consent requirement, as the case may be, such Affected Collateral shall
(without any act or delivery by any Person) constitute Collateral hereunder;

 

(iii)          34% of each class of the issued and outstanding voting Capital
Stock of any Foreign Subsidiary owned by any Grantor, if and solely to the
extent that the grant of a Lien herein in the Capital Stock of such Foreign
Subsidiary would constitute an investment of earnings in United States property
under Section 956 (or a successor provision) of the Internal Revenue Code, which
investment would trigger any increase in the gross income of a United States
shareholder of such Grantor pursuant to Section 951 (or a successor provision)
of the Internal Revenue Code (it being understood and agreed that the remaining
66% of each class of the issued and outstanding voting Capital Stock of each
such Foreign Subsidiary and all non-voting

 

3

--------------------------------------------------------------------------------

 

Capital Stock of each such Foreign Subsidiary shall constitute Collateral
hereunder owned by any Grantor;

 

(iv)          any (A) of the Capital Stock of Westaff Australia and (B) “Junior
Debt,” as such term is defined in the Australian Subordination Agreement, in
each case, only for so long as the Australian Subordination Deed remains in
effect and prohibits any Grantor from (x) pledging any of the Capital Stock of
Westaff Australia and (y) granting a security interest in such Junior Debt; and

 

(v)           any Permit now or hereafter acquired or held by any Grantor,
together with all amendments, modifications, extensions, renewals and
replacements of any thereof) solely to the extent the granting of a security
interest therein in favor of Agent would be prohibited by applicable law and
such prohibition is not otherwise ineffective as a matter of law; provided,
however, that at such time as such Permit is no longer subject to such
prohibition, such Permit shall (without any act or delivery by any Person)
constitute Collateral hereunder.

 

“Government Contracts” means each of the contracts entered into by Borrower with
Government Authorities, as such contracts may be amended, restated, replaced,
extended or reaffirmed from time to time, which Government Contracts as of the
Closing Date are identified on Schedule 9.29 of the Financing Agreement.

 

“Permit” means any and all permits, certificates, approvals, authorizations,
consents, licenses, variances, franchises or other instruments, however
characterized, of any Governmental Authority (or any Person acting on behalf of
a Government Authority).

 

“Surety Account” means that certain U.S. Bank National Association Account no.
98554000 which has been pledged by Borrower to the Washington State Department
of Labor and Industries as security for providing workers’ compensation benefits
and assessments in the event of default by the self insurer.

 

1.3           Other Definitional Provisions; Construction.  Unless otherwise
specified,

 

(i)            As used in this Agreement, accounting terms relating to Borrower
not defined in this Agreement have the respective meanings given to them in
accordance with GAAP.

 

(ii)           The definition of any document, instrument or agreement includes
all schedules, attachments and exhibits thereto and all renewals, extensions,
supplements, restatements and amendments thereof.  All Exhibits and Schedules
attached to this Agreement are incorporated into, made and form an integral part
of, this Agreement for all purposes.

 

(iii)          “Hereunder,” “herein,” “hereto,” “this Agreement” and words of
similar import refer to this entire document; “including” is used by way of
illustration and not by way of limitation, unless the context clearly indicates
the contrary; the singular includes the plural and conversely; and any action
required to be taken by Borrower is to be taken promptly, unless the context
clearly indicates the contrary.

 

4

--------------------------------------------------------------------------------

 

(iv)          All of the uncapitalized terms contained in this Agreement which
are now or hereafter defined under the Code will, unless the context indicates
otherwise, have the meanings provided for now or hereafter in the Code.

 

2.             GRANT OF SECURITY INTEREST; SET-OFF AND RELATED MATTERS.

 

2.1           Security Interest.  As security for the full, prompt and complete
payment and performance by each Grantor of its respective obligations under the
Financing Agreement and the other Loan Documents, including, without limitation,
the Obligations (as such term is defined in the Financing Agreement) of Borrower
and the joint and several Liabilities (as such term is defined in the applicable
Affiliate Guaranty Agreements) of Parent Guarantor, Westaff Support and
MediaWorld (collectively, for purposes of this Agreement, the “Obligations”),
each Guarantor hereby grants to, and creates in favor of, Agent, for the benefit
of the Secured Parties, a continuing security interest in, and Lien on, all of
the Collateral.

 

2.2           Government Contracts.  In addition to, and without limiting any of
the foregoing, in order to support the payment and performance of the
Obligations, and until the Revolving Credit Commitment Termination Date, each
Grantor hereby absolutely assigns, sells and transfers to Agent, for benefit of
the Secured Parties, all claims and moneys due or to become due under the
Government Contracts, and agrees that all payments due or to become due under
the Government Contracts shall be made to and at the direction of Agent.

 

2.3           Set-Off.  All cash, moneys, investment property and other
properties of any Grantor and the proceeds thereof now or hereafter held or
received by Agent from or for the account of any Grantor, including any and all
deposits (general or special), account balances and credits of any Grantor with
any Secured Party at any time existing, (i) are part of the Collateral,
(ii) will be held as security for the Obligations, and (iii) may be set-off and
applied against any or all Obligations at any time following the occurrence and
during the continuance of any Event of Default, and after the occurrence of and
during the continuance of an Event of Default, Agent has the right at any time
to refuse to allow withdrawals from any account of any Grantor.  At any time
following the occurrence and during the continuance of any Event of Default,
each Grantor authorizes each Secured Party and its and their respective
Affiliates to pay or to deliver to Agent any deposits or other sums credited by,
or due from, such Affiliates to any Grantor for application against any or all
Obligations, all without further notice to Grantors (such notice being expressly
waived) and without any necessity on Agent’s part to resort to other security or
sources of reimbursement for the Obligations.  The rights given to Agent and the
Secured Parties hereunder are cumulative with Agent’s and the Secured Parties’
other rights and remedies, including other rights of setoff.  Agent will
promptly notify Borrower of Agent’s receipt of such funds for application
against the Obligations, but Agent’s failure to do so will not affect the
validity or enforceability thereof.

 

3.             PERFECTION OF AGENT’S SECURITY INTEREST; DUTY OF CARE.

 

3.1           Required Grantor Actions.  Until the termination of this
Agreement, each Grantor shall perform any and all steps and take all actions
reasonably requested by Agent from time to time to perfect, maintain, protect,
and enforce Agent’s security interest in, and Lien on, the Collateral, including
(i) executing and delivering all appropriate documents and instruments as

 

5

--------------------------------------------------------------------------------

 

Agent may determine are necessary or reasonably desirable to perfect, preserve,
or enforce Agent’s interest in the Collateral, all in form and substance
satisfactory to Agent, (ii) delivering to Agent any warehouse receipts or other
documents of title covering that portion of the Collateral which may be located
in warehouses and in respect of which warehouse receipts are issued, (iii) upon
the occurrence and the continuance of any Event of Default, transferring
inventory to warehouses approved by Agent, (iv) placing notations on such
Grantor’s books of account to disclose Agent’s security interest and Lien
therein, and (v) taking such other steps and actions as deemed necessary or
reasonably desirable by Agent to perfect and enforce Agent’s security interest
in, and Lien on, and other rights and interests in, the Collateral.

 

3.2           Financing Statements; Notices.  Each Grantor hereby irrevocably
authorizes Agent at any time and from time to time to file in any filing office
in any jurisdiction any initial financing statements and amendments thereto that
(a) indicate the Collateral (i) as all assets of such Grantor, whether now owned
or hereafter acquired or arising, and all proceeds and products thereof, (ii) as
being of an equal or lesser scope or with greater detail, and (b) provide any
other information required by Part 5 of Article 9 of the Uniform Commercial Code
as enacted in any jurisdiction for the sufficiency or filing office acceptance
of any financing statement or amendment, including whether such Grantor is an
organization, the type of organization and any organizational identification
number issued to such Grantor.  Each Grantor hereby irrevocably authorizes Agent
at any time and from time to time to correct or complete, or to cause to be
corrected or completed, any financing statements, continuation statements or
other such documents as have been filed naming such Grantor as debtor and Agent
as secured party.  Each Grantor agrees to furnish any such information to Agent
promptly upon request.  At Agent’s request, each Grantor will execute notices
appropriate under any applicable requirements of law that Agent deems desirable
to evidence, perfect, or protect its security interest in and other Liens on the
Collateral in such form(s) as are satisfactory to Agent.  Each Grantor, jointly
and severally, agrees to pay the cost of filing all financing statements and
other notices in all public offices where filing is deemed by Agent to be
necessary or desirable to perfect, protect or enforce the security interest and
Lien granted to Agent hereunder.  A carbon, photographic, photostatic or other
reproduction of this Agreement or of a financing statement is sufficient as a
financing statement.  Agent is hereby authorized to give notice to any creditor,
landlord or any other Person as may be necessary or desirable under applicable
laws to evidence, protect, perfect, or enforce the security interest and Lien
granted to Agent in the Collateral.

 

3.3           Bailees; Consignees; Warehousemen.  If any Collateral having a
value in excess of $100,000 individually or $250,000 in the aggregate is in the
possession or control of any warehouseman or any of any Grantor’s consignees,
agents, processors, customers or other bailees, upon the request of Agent the
applicable Grantor shall notify such warehousemen, consignee, agents,
processors, customers or other bailees of Agent’s security interest and Lien
therein, and upon Agent’s request, such Grantor shall use commercially
reasonable efforts to obtain a bailee letter agreement and financing statements
acceptable to Agent from such warehousemen, consignees, agents, processors,
customers or other bailees, pursuant to which each such warehousemen, consignee,
agent, processor, customer or other bailee acknowledges in an authenticated
record that such Person is holding the Collateral for Agent’s benefit, and such
documentation from any secured creditor or lessor of such Person as Agent may
request.

 

6

--------------------------------------------------------------------------------

 

3.4           Impositions; Protection of Agent’s Interests.  To protect,
perfect, or enforce, from time to time, Agent’s rights or interests in the
Collateral, Agent may, in its discretion (but without any obligation to do so),
(i) discharge any Liens (other than Permitted Liens so long as no Event of
Default has occurred and is continuing) at any time levied or placed on the
Collateral, (ii) pay any insurance to the extent any Grantor has failed to
timely pay the same, (iii) if determined by the Agent, in its reasonable
judgment, to be necessary to protect the Collateral, maintain guards where any
Collateral is located if an Event of Default has occurred and is continuing, and
(iv) obtain any record from any service bureau and pay such service bureau the
cost thereof.  All costs and expenses incurred by Agent in exercising its
discretion under this Section 3.4 will be part of the Obligations, payable on
Agent’s demand and secured by the Loan Collateral.

 

3.5           Agent’s Duty of Care.  Agent shall have no duty of care with
respect to the Collateral except that Agent shall exercise reasonable care with
respect to the Collateral in Agent’s custody.  Agent shall be deemed to have
exercised reasonable care if (i) such property is accorded treatment
substantially equal to that which Agent accords its own property or (ii) Agent
takes such action with respect to the Collateral as the applicable Grantor shall
reasonably request in writing.  Agent will not be deemed to have, and nothing in
this Section 3.5 may be construed to deem that Agent has, failed to exercise
reasonable care in the custody or preservation of Collateral in its possession
merely because either (a) Agent failed to comply with any request of any Grantor
or (b) Agent failed to take steps to preserve rights against any Persons in such
property.  Each Grantor agrees that Agent has no obligation to take steps to
preserve rights against any prior parties.

 

3.6           Verification.  Except as may otherwise be provided by the
Financing Agreement, after the occurrence and during the continuance of any
Event of Default, Agent, in its own name or in the name of others, may
periodically communicate with each Grantor’s account debtors, customers and
other obligors to verify with them, to Agent’s satisfaction, the existence,
amount and terms of any sums owed by such account debtors, customers or other
obligors to each Grantor and the nature of any such account debtor’s, customer’s
or other obligor’s relationship with such Grantor.

 

3.7           [Reserved].

 

3.8           Control Agreement.  With respect to any of the Collateral for
which control of such Collateral is a method of perfection under the Uniform
Commercial Code as enacted in any jurisdiction, including all of each Grantor’s
right, title and interest in deposit accounts, investment property, electronic
chattel paper and letter-of-credit rights, and without limiting the obligations
of each Grantor under the provisions of Sections 3.9, 3.10, and 3.11 below, each
Grantor shall, on Agent’s reasonable request, cause to be executed by each
Person that Agent determines is appropriate, a control agreement in a form
reasonably acceptable to Agent; provided that, the Grantors are not required to
obtain such a control agreement for such Collateral in deposit, investment or
securities accounts which do not have a balance in excess of $25,000 (or
$750,000 with respect to the Surety Account), and provided further, that at no
time shall the aggregate balances (other than amounts deposited in the Surety
Account up to $750,000) for all Grantors in such deposit, investment or
securities accounts exceed $250,000 in the aggregate.

 

7

--------------------------------------------------------------------------------

 

3.9           Promissory Notes and Tangible Chattel Paper.  If any Grantor shall
at any time hold or acquire any promissory notes or tangible chattel paper
evidencing obligations owing to such Grantor in excess of $100,000 (individually
or as part of a related series of transactions) that is not Excluded Property,
such Grantor shall forthwith endorse, assign and deliver the same to Agent,
accompanied by such instruments of transfer or assignment duly executed in blank
as Agent may from time to time specify.

 

3.10         Electronic Chattel Paper and Transferable Records.  If any Grantor
at any time holds or acquires an interest in any electronic chattel paper or any
“transferable record,” as that term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act, or in § 16 of the
Uniform Electronic Transactions Act as in effect in any relevant jurisdiction,
such Grantor shall promptly notify Agent thereof and, at the request and option
of Agent, shall take such action as Agent may reasonably request to vest in
Agent control, under § 9-105 of the Uniform Commercial Code, of such electronic
chattel paper or control under Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act or, as the case may be, § 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record.

 

3.11         Letter-of-Credit Rights.  If any Grantor is at any time now or
hereafter a beneficiary under a letter of credit having a face amount in excess
of $100,000, such Grantor shall promptly notify Agent thereof and, at the
request and option of Agent, such Grantor shall, pursuant to an agreement in
form and substance satisfactory to Agent, either, at the option of Agent,
(i) arrange for the issuer and any confirmer or other nominated person of such
letter of credit to consent to an assignment to Agent of the proceeds of the
letter of credit or (ii) arrange for Agent to become the beneficiary of the
letter of credit.

 

3.12         Commercial Tort Claims.  If any Grantor shall at any time hold or
acquire a commercial tort claim for an asserted amount in excess of $100,000,
such Grantor shall promptly notify Agent in a writing signed by such Grantor of
the particulars thereof and grant to Agent in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance satisfactory to Agent.

 

4.             POWER OF ATTORNEY.

 

4.1           Grant of Power.  Each Grantor does hereby severally make,
constitute and appoint Agent (or any officer or agent of Agent) as such
Grantor’s true and lawful attorney-in-fact, with full power of substitution, in
the name of such Grantor or in the name of Agent or otherwise, for the use and
benefit of Agent, but at the joint and several cost and expense of Grantors,
(i) to endorse the name of such Grantor on any instruments, notes, checks,
drafts, money orders, or other media of payment (including payments payable
under any policy of insurance on the Collateral) or Collateral that may come
into the possession of Agent or any Affiliate of Agent in full or part payment
of any of the Obligations; (ii) upon the occurrence and during the continuance
of any Event of Default, to sign and indorse the name of such Grantor on any
invoice, freight or express bill, bill of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications and notices in connection
with any Collateral, and any instrument or document relating thereto or to any
of such Grantor’s rights therein; (iii) to file financing statements pursuant to
the Code and other notices appropriate under applicable law as

 

8

--------------------------------------------------------------------------------

 

Agent deems necessary to perfect, preserve, and protect Agent’s rights and
interests under this Agreement; (iv) after an Event of Default has occurred and
is continuing, to obtain the insurance referred to in Section 10.14 of the
Financing Agreement and indorse any drafts and cancel any insurance so obtained
by Agent; (v) after an Event of Default has occurred and is continuing, to give
written notice to the United States Post Office to effect change(s) of address
so that all mail addressed to such Grantor may be delivered directly to Agent;
and (vi) to do any and all things necessary or desirable to perfect Agent’s
security interest in, and Lien on, and other rights and interests in, the
Collateral, to preserve and protect the Collateral and to otherwise carry out
this Agreement.

 

4.2           Duration; Ratification of Acts.  This power of attorney, being
coupled with an interest, will be irrevocable for the term of this Agreement and
all transactions under this Agreement and thereafter until the Obligations have
been Paid in Full.  Each Grantor jointly and severally ratifies and approves all
acts of such attorney, and neither Agent nor its attorney will be liable for any
acts or omissions or for any error of judgment or mistake of fact or law, other
than as results from such Person’s own gross negligence or willful misconduct. 
Each Grantor shall will execute and deliver promptly to Agent all instruments
necessary or desirable, as determined in Agent’s discretion, to further Agent’s
exercise of the rights and powers granted it in this Section 4.

 

5.             WARRANTIES AND REPRESENTATIONS.  To induce Agent and the Lenders
to make the Loans and other extensions of credit pursuant to the Loan Documents,
each Grantor severally represents to Agent that the following statements are,
and will continue throughout the term of this Agreement to be, true:

 

5.1           Jurisdiction of Organization; Places of Business, etc.  Such
Grantor’s (i) jurisdiction of organization is the jurisdiction identified on
Exhibit 5.1, (ii) exact legal name is as set forth in the first paragraph of
this Agreement (as may be updated from time to time as provided in Section 6.2),
(iii) chief executive office and principal place of business are set forth on
Exhibit 5.1 (as may be updated from time to time as provided in Section 6.2),
(iv) offices or locations where such Grantor keeps the Collateral (except for
inventory in transit) or conducts any of its business are listed on Exhibit 5.1
(as may be updated from time to time as provided in Section 6.2), (v) federal
tax identification number is identified on Exhibit 5.1, and (vii) organizational
identification number in its jurisdiction of organization is identified on
Exhibit 5.1.

 

5.2           Prior Locations Of Collateral.  Except for inventory in transit,
none of the inventory or equipment constituting part of the Collateral has been
at, or has been removed from, any location as of the date of this Agreement
other than those locations set forth on Exhibit 5.1.

 

5.3           Names.  All trade names, assumed names, fictitious names and other
names used by such Grantor during the 5 year period preceding the date of this
Agreement are set forth on Exhibit 5.3, and such Grantor has not, during the
preceding 5 year period, except as may be set forth on Exhibit 5.3, acquired any
of its assets in any bulk transfer.

 

5.4           Investment Property.  Exhibit 5.4 lists all of such Grantor’s
rights, title or interests in, or with respect to, any investment property as of
the Closing Date.

 

9

--------------------------------------------------------------------------------

 

5.5           Letter-of-Credit Rights.  Exhibit 5.5 lists all of such Grantor’s
rights, title or interests in, or with respect to, any letters of credit as of
the Closing Date.

 

5.6           Electronic Chattel Paper.  Exhibit 5.6 lists all of such Grantor’s
rights, title or interests in, or with respect to, any electronic chattel paper
as of the Closing Date.

 

5.7           Commercial Tort Claims.  Exhibit 5.7 lists all of such Grantor’s
rights, titles or interests in, or with respect to, any commercial tort claims
as of the Closing Date.

 

5.8           Instruments.  Exhibit 5.8 lists all of such Grantor’s rights,
titles or interests in, or with respect to, any instruments, including
promissory notes having and outstanding or committed principal amount in excess
of $100,000, as of the Closing Date.

 

5.9           State of Title.  Such Grantor has good and marketable title to,
and ownership of, all the Collateral not owned by the other Grantors, free and
clear of all Liens except to the extent, if any, of the Permitted Liens.

 

6.             COLLATERAL COVENANTS.  Until the Obligations are fully paid,
performed and satisfied and this Agreement is terminated, each Grantor shall:

 

6.1           Claims Against Collateral.  Maintain the Collateral, as the same
is constituted from time to time, free and clear of all Liens, except to the
extent, if any, of the Permitted Liens, and defend or cause to be defended the
Collateral against all of the claims and demands of all Persons whomsoever
(except to the extent, if any, of the Permitted Liens).

 

6.2           Notice of Change in Place of Business; Names, etc.  (i) Give Agent
at least 30 Business Days advance notice in writing of any change in Borrower’s
(a) chief executive office or (b) exact legal name as set forth in the first
paragraph of this Agreement, and (ii) not, without the prior written consent of
Agent, change Borrower’s jurisdiction of organization.

 

6.3           [Reserved].

 

6.4           Notice of Adverse Information.  Promptly notify Agent in writing
of any Lien or claim known to the Borrower which could reasonably be expected to
materially and adversely affect the value of any material portion of the
Collateral or the rights of Agent with respect thereto.

 

6.5           Equipment.  Maintain the equipment in good operating condition and
repair in accordance with the Grantors’ standard business practice, ordinary
wear and tear excepted.

 

6.6           [Reserved].

 

6.7           Insurance.  Insure the Collateral in accordance with the terms of
the Financing Agreement.

 

6.8           Removal of Collateral.  Not remove any of the Collateral (except
for inventory in transit) with a value in excess of $100,000 at any one location
or $250,000 in the aggregate, in each case during any Fiscal Year, from the
locations set forth in Exhibit 5.1 of this Agreement or

 

10

--------------------------------------------------------------------------------

 

keep any of such Collateral (except for inventory in transit) at any other
office or location without providing Agent with an updated Exhibit 5.1 within 30
days thereof.

 

6.9           No Liens.  Not create or permit to be created or to exist any Lien
on any of the Collateral except to the extent, if any, of the Permitted Liens.

 

7.             TERM.  Subject to Section 11.6 below, this Agreement will
terminate on the later to occur of (i) the Payment in Full of the Obligations or
(ii) the termination of the Financing Agreement.

 

8.             AGENT’S RIGHTS AND REMEDIES.

 

8.1           Remedies.  (i)  On the occurrence and during the continuance of an
Event of Default and after the lapse of any applicable period of cure provided
in Section 11.2 of the Financing Agreement, Agent may immediately, at any time,
while such Event of Default is continuing, take any one or more of the following
actions, without notice, demand or legal process of any kind (except as may be
required by law), all of which each Grantor waives to the fullest extent
permitted by law:

 

(a)           proceed to enforce payment of the Obligations and to exercise all
of the rights and remedies afforded to Agent by the Uniform Commercial Code as
enacted in any jurisdiction, under the terms of the Loan Documents and by law
and in equity provided, including those set forth below in this Section 8.1;

 

(b)           take possession of the Collateral and maintain such possession on
any Grantor’s premises at no cost to Agent, or remove the Collateral, or any
part thereof, to such other place(s) as Agent may desire;

 

(c)           enter on any premises on which the Collateral, or any part or
records thereof, may be situated and remove the same therefrom, for which action
no Grantor shall assert against Agent any claim for trespass, breach of the
peace or similar claim and no Grantor shall not hinder Agent’s efforts to effect
such removal;

 

(d)           require Grantors, at their joint and several cost, to assemble the
Collateral and make it available at a place designated by Agent;

 

(e)           collect, compromise, take, sell or otherwise deal with the
Collateral and proceeds thereof in its own name or in the name of any Grantor,
including (1) bringing suit on any one or more of the accounts, chattel paper,
instruments, documents, leases or other agreements (collectively, “Contracts”)
in the name of any Grantor or Agent, and exercise all such other rights
respecting the Contracts, in the name of any Grantor or Agent, including the
right to accelerate or extend the time of payment, settle, release in whole or
in part any amounts owing on any Contract and issue credits in the name of any
Grantor or Agent, and including proceeding against any collateral or security
provided in respect of any Contract and (2) bringing suit on any one or more of
the general intangibles, in the name of any Grantor or Agent, and exercise all
such other rights respecting the general intangibles, including the right to
accelerate or extend the time of payment, settle, release in whole or in part
any amounts owing on any general intangible

 

11

--------------------------------------------------------------------------------

 

and issue credits in the name of any Grantor or Agent, and including proceeding
against any collateral or security provided in respect of any general
intangible;

 

(f)            sell part or all of the Collateral at public or private sale(s),
for cash, upon credit or otherwise, at such prices and upon such terms as Agent
deems advisable, at Agent’s discretion, and Agent may, if Agent deems it
reasonable, postpone or adjourn any sale of the Collateral from time to time by
an announcement at the time and place of sale or by announcement at the time and
place of such postponed or adjourned sale, without being required to give a new
notice of sale, and without being obligated to make any sale of the Collateral
regardless of notice of sale having been given;

 

(g)           to the extent Agent has not so acted or is currently so acting
pursuant to the other terms of this Agreement, notify any Grantor’s customers,
account debtors and any other Persons (1) obligated on the Collateral to make
payment or otherwise render performance to or for the benefit of Agent and
(2) that, without limiting the generality of clause (1), the Contracts and
general intangibles have been assigned to Agent and that payments should be made
directly to Agent;

 

(h)           require any Grantor, using such form as Agent may approve, to
notify such Grantor’s customers, account debtors and any other Persons, and to
indicate on all of any such Grantor’s correspondence to such customers, account
debtors and other Persons, that the Contracts and general intangibles must be
paid to Agent directly;

 

(i)            sign any indorsements, assignments or other writings of
conveyance or transfer in connection with any disposition of the Collateral;

 

(j)            sell, assign, transfer or otherwise dispose of all or any part of
the Collateral in any manner permitted by law and do any other thing and
exercise any other right or remedy which Agent may, with or without judicial
process, do or exercise under applicable law, and in any such sale Agent may
sell, assign, transfer or otherwise dispose of all or any part of the Collateral
without giving any warranties and Agent may specifically disclaim any warranties
of title and the like;

 

(k)           apply for and have a receiver appointed under state or federal law
by a court of competent jurisdiction in any action taken by Agent to enforce its
rights and remedies under this Agreement and, as applicable, the other Loan
Documents in order to manage, protect, preserve, and sell and otherwise dispose
of all or any portion of the Collateral and continue the operation of the
business of any Grantor, and to collect all revenues and profits thereof and
apply the same to the payment of all expenses and other charges of such
receivership, including the compensation of the receiver, and to the payment of
the Obligations until a sale or other disposition of such Collateral is finally
made and consummated;

 

(l)            enforce the obligations of an account debtor or other Person
obligated on collateral and exercise the rights of the debtor with respect to
the obligation of the account debtor or other Person obligated on collateral to
make payment or otherwise render performance to any Grantor, and with respect to
any property that secures the obligations of the account debtor or

 

12

--------------------------------------------------------------------------------

 

other Person obligated on collateral, in any case directly or through collection
agencies or other collection specialists; and

 

(m)          without limiting the provisions of Section 2.3 above, apply (or
instruct another Person to apply) to the Obligations the balance of any deposit
account that is part of the Collateral.

 

(ii)           Each Grantor acknowledges that portions of the Collateral could
be difficult to preserve and dispose of and be further subject to complex
maintenance and management.  Accordingly, Agent, in exercising its rights under
this Section 8.1, shall have the widest possible latitude to preserve and
protect the Collateral and Agent’s security interest in and Lien thereon. 
Moreover, each Grantor acknowledges and agrees that Agent shall have no
obligation to, and each Grantor hereby waives to the fullest extent permitted by
law any right that it may have to require Agent to (a) clean up or otherwise
prepare any of the Collateral for sale, (b) pursue any Person to collect any of
the Obligations or (c) exercise collection remedies against any Persons
obligated on the Collateral.  Agent’s compliance with applicable local, state or
federal law requirements, in addition to those imposed by the Uniform Commercial
Code as enacted in any jurisdiction, in connection with a disposition of any or
all of the Collateral will not be considered to adversely affect the commercial
reasonableness of any disposition of any or all of the Collateral under the
Uniform Commercial Code as enacted in any jurisdiction.

 

8.2           Notice of Disposition; Allocations.  If any notice is required by
law to effectuate any sale or other disposition of the Collateral, (i) Agent
will give the applicable Grantor(s) written notice of the time and place of any
public sale or of the time after which any private sale or other intended
disposition thereof will be made, and at any such public or private sale, Agent
may purchase all or any of the Collateral; and (ii) Agent and each Grantor agree
that such notice will not be unreasonable as to time if given in compliance with
this Agreement ten days prior to any sale or other disposition.  The proceeds of
the sale will be applied first to all costs and expenses of such sale including
Attorneys’ Fees and other costs and expenses, and second to the payment of all
Obligations in the manner and order determined by Agent in its discretion.  Each
Grantor shall remain jointly and severally liable to Agent and the Lenders for
any deficiency.  Unless otherwise directed by law, Agent will return any excess
to Borrower.

 

8.3           Payment of Expenses.  Grantors shall, jointly and severally, pay
to Agent, on its demand, all costs and expenses, including court costs,
Attorneys’ Fees and costs of sale, incurred by Agent in exercising any of its
rights or remedies hereunder, all of which constitute part of the Obligations
and are secured by the Loan Collateral.

 

9.             INDEMNIFICATION.  In consideration of the execution and delivery
of the Financing Agreement and the making of any Loan to Borrower, each Grantor
agrees, jointly and severally, to indemnify and hold Agent and each other
Secured Party and each of Agent’s and such other Secured Party’s directors,
Affiliates and agents (for the purposes of this Section 9 each is an
“Indemnified Party”) harmless from and against any and all claims, losses,
obligations and liabilities arising out of or resulting from any or all of
(i) this Agreement and (ii) the transactions contemplated by this Agreement
(including enforcement of this Agreement), except for claims, losses or
liabilities to the extent resulting from an Indemnified Party’s gross negligence
or willful misconduct.  The indemnification provided for in this Section 9 is in

 

13

--------------------------------------------------------------------------------

 

addition to, and not in limitation of, any other indemnification or insurance
provided by any Grantor to Agent or any other Secured Party.

 

10.           NOTICE.  Any notice, certificate, request, notification and other
communication required, permitted or contemplated hereunder must be in writing
and given in accordance with the Financing Agreement.

 

11.           GENERAL.

 

11.1         Severability.  If any term of this Agreement is found invalid under
California law or other laws of mandatory application by a court of competent
jurisdiction, the invalid term will be considered excluded from this Agreement
and will not invalidate the remaining terms of this Agreement.

 

11.2         GOVERNING LAW.  THIS AGREEMENT HAS BEEN DELIVERED AND ACCEPTED AT
AND SHALL BE DEEMED TO HAVE BEEN MADE AT LOS ANGELES, CALIFORNIA.  THIS
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF CALIFORNIA (WITHOUT REGARD TO CALIFORNIA CONFLICTS
OF LAW PRINCIPLES).

 

11.3         WAIVER OF JURISDICTION.  AS A SPECIFICALLY BARGAINED INDUCEMENT FOR
AGENT TO ENTER INTO THIS AGREEMENT AND EXTEND CREDIT TO BORROWER, EACH GRANTOR
AND AGENT AGREE THAT ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT
OF THIS AGREEMENT, ITS VALIDITY OR PERFORMANCE AND WITHOUT LIMITATION ON THE
ABILITY OF AGENT, ITS SUCCESSORS AND ASSIGNS, TO INITIATE AND PROSECUTE IN ANY
APPLICABLE JURISDICTION ACTIONS RELATED TO THE REPAYMENT AND COLLECTION OF THE
OBLIGATIONS AND THE EXERCISE OF ALL OF AGENT’S RIGHTS AGAINST ANY GRANTOR WITH
RESPECT THERETO AND ANY SECURITY OR PROPERTY OF ANY GRANTOR, INCLUDING
DISPOSITIONS OF THE COLLATERAL, SHALL BE INITIATED AND PROSECUTED AS TO ALL
PARTIES AND THEIR SUCCESSORS AND ASSIGNS AT LOS ANGELES, CALIFORNIA.  AGENT AND
EACH GRANTOR CONSENTS TO AND SUBMITS TO THE EXERCISE OF JURISDICTION OVER ITS
PERSON BY ANY COURT SITUATED AT LOS ANGELES, CALIFORNIA HAVING JURISDICTION OVER
THE SUBJECT MATTER, AND CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY
CERTIFIED MAIL DIRECTED TO ANY GRANTOR OR AGENT AT THEIR RESPECTIVE ADDRESSES
SET FORTH IN THE FINANCING AGREEMENT OR ANY OTHER LOAN DOCUMENT OR AS OTHERWISE
PROVIDED UNDER THE LAWS OF THE STATE OF CALIFORNIA.  EACH GRANTOR WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER, AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.

 

11.4         Survival and Continuation of Representations and Warranties.  All
of each Grantor’s representations and warranties contained in this Agreement
shall (i) survive the execution, delivery and acceptance hereof by the parties
hereto and the closing of the

 

14

--------------------------------------------------------------------------------

 

transactions described herein or related hereto and (ii) shall be brought down
from time to time as provided in the Financing Agreement and any certificate
delivered pursuant to the last sentence of Section 8.9 thereof.

 

11.5         Agent’s Additional Rights Regarding Collateral.  All of the
Obligations shall constitute one obligation secured by all of the Collateral. 
In addition to Agent’s other rights and remedies under the Loan Documents, Agent
may, in its discretion exercised in good faith, following the occurrence and
during the continuance of any Event of Default:  (i) exchange, enforce, waive or
release any of the Collateral or portion thereof, (ii) apply the proceeds of the
Collateral against the Obligations and direct the order or manner of the
liquidation thereof (including any sale or other disposition), as Agent may,
from time to time, in each instance determine, and (iii) settle, compromise,
collect or otherwise liquidate any such security in any manner without affecting
or impairing its right to take any other further action with respect to any
security or any part thereof.

 

11.6         Application of Payments; Revival of Obligations.  Agent shall have
the continuing right to apply or reverse and reapply any payments to any portion
of the Obligations.  To the extent any Grantor makes a payment or payments to
Agent or Agent receives any payment or proceeds of the Collateral or any other
security for any Grantor’s benefit, which payment(s) or proceeds or any part
thereof are subsequently voided, invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party under any bankruptcy act, state or federal law, common law or
equitable cause, then, to the extent of such payment(s) or proceeds received,
the Obligations or part thereof intended to be satisfied shall be revived and
shall continue in full force and effect, as if such payment(s) or proceeds had
not been received by Agent.

 

11.7         Additional Waivers by Grantors.  Each Grantor waives presentment
and protest of any instrument and notice thereof, and, except as expressly
provided in the Loan Documents, demand, notice of default and all other notices
to which such Grantor might otherwise be entitled.  No Grantor shall assert any
claim against Agent or any other Secured Party on any theory of liability for
consequential, special, indirect or punitive damages.

 

11.8         Equitable Relief.  Each Grantor recognizes that, in the event any
Grantor fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to Agent; therefore, each Grantor agrees that Agent, if Agent so
requests, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.

 

11.9         Entire Agreement; Counterparts; Fax Signatures.  This Agreement and
the other Loan Documents set forth the entire agreement of the parties with
respect to subject matter of this Agreement and supersede all previous
understandings, written or oral, in respect thereof.  Any request from time to
time by any Grantor for Agent’s consent under any provision in the Loan
Documents must be in writing, and any consent to be provided by Agent under the
Loan Documents from time to time must be in writing in order to be binding on
Agent; however, Agent will have no obligation to provide any consent requested
by any Grantor, and Agent may, for any reason in its discretion exercised in
good faith, elect to withhold the requested consent.  Two or more duplicate
originals of this Agreement may be signed by the parties, each of which

 

15

--------------------------------------------------------------------------------

 

shall be an original but all of which together shall constitute one and the same
instrument.  Any documents delivered by, or on behalf of, any Grantor by fax
transmission (i) may be relied on by Agent as if the document were a manually
signed original and (ii) will be binding on such Grantor for all purposes of the
Loan Documents.

 

11.10       Headings.  Section headings in this Agreement are included for
convenience of reference only and shall not relate to the interpretation or
construction of this Agreement.

 

11.11       Cumulative Remedies.  The remedies provided in this Agreement and
the other Loan Documents are cumulative and not exclusive of any remedies
provided by law.  Exercise of one or more remedy(ies) by Agent does not require
that all or any other remedy(ies) be exercised and does not preclude later
exercise of the same remedy.

 

11.12       Waivers and Amendments in Writing.  Failure by Agent to exercise any
right, remedy or option under this Agreement or in any Loan Documents or delay
by Agent in exercising the same shall not operate as a waiver by Agent of its
right to exercise any such right, remedy or option.  No waiver by Agent shall be
effective unless it is in writing and then only to the extent specifically
stated.  This Agreement may only be amended, modified, supplemented or restated
in a writing signed by Agent and each Grantor affected thereby and may not be
amended, modified, supplanted or otherwise changed orally.

 

11.13       Recourse to Directors or Officers.  The obligations of each party
under this Agreement are solely the corporate obligations of each party.  No
recourse shall be had for any obligation or claim arising out of or based upon
this Agreement against any stockholder, employee, officer, or director of each
party.

 

11.14       Assignment.  Agent shall have the right to assign this Agreement and
the other Loan Documents in accordance with Section 14.1 of the Financing
Agreement.  No Grantor may assign, transfer or otherwise dispose of any of its
rights or obligations hereunder, by operation of law or otherwise, and any such
assignment, transfer or other disposition without Agent’s written consent (with
the consent of the Lenders as specified in Section 14.2 of the Financing
Agreement) shall be void.  All of the rights, privileges, remedies and options
given to any Secured Party under the Loan Documents shall inure to the benefit
of the successors and assigns of the applicable Secured Party, and all the
terms, conditions, covenants, provisions and warranties herein shall inure to
the benefit of and bind the permitted successors and assigns of each Grantor and
each Secured Party, respectively.

 

11.15       Agent.  As among the Secured Parties, (a) Agent shall hold all items
of the Collateral at any time received under this Agreement in accordance with
the terms of this Agreement and the Financing Agreement and (b) by accepting the
benefits of this Agreement, each Secured Party acknowledges and agrees that
(1) the obligations of Agent as holder of the Collateral and any interests
therein and with respect to any disposition of any of the Collateral or any
interests therein are only those obligations expressly set forth in this
Agreement and the Financing Agreement and (2) this Agreement may be enforced
only by the action of Agent and that no other Secured Party shall have any right
individually to seek to enforce or to enforce this Agreement, it being
understood and agreed that such rights and remedies may be exercised by

 

16

--------------------------------------------------------------------------------

 

Agent, for the benefit of the Secured Parties, upon the terms of this Agreement
and the Financing Agreement.

 

11.16       Conflict.  If there is any conflict, ambiguity, or inconsistency, in
Agent’s judgment, between the terms of this Agreement and any of the other Loan
Documents, then the applicable terms and provisions, in Agent’s judgment,
providing Agent with greater rights, remedies, powers, privileges, or benefits
will control.

 

11.17       WAIVER OF JURY TRIAL.  AS A SPECIFICALLY BARGAINED INDUCEMENT FOR
AGENT TO ENTER INTO THIS AGREEMENT AND FOR TE LENDERS AND THE OTHER SECURED
PARTIES TO EXTEND CREDIT TO BORROWER, EACH GRANTOR AND AGENT EACH WAIVES TRIAL
BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR
ARISING OUT OF THIS AGREEMENT OR THE CONDUCT OF THE RELATIONSHIP BETWEEN AGENT
AND GRANTORS.

 

11.18       Incorporation of Judicial Reference Provisions.  The judicial
reference provisions set forth in Section 15.15 of the Financing Agreement are
hereby incorporated into this Agreement by reference (provided that for purposes
of this Section 11.18, each reference to “Borrower” therein shall be deemed to
refer to Grantors, individually and collectively, hereunder) .

 

17

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this Agreement has been duly executed by each Grantor as of
the date first set forth above in the preamble to this Agreement.

 

 

WESTAFF (USA), INC., a California corporation

 

 

 

 

 

By:

/s/ Dawn M. Jaffray

 

 

Dawn M. Jaffray

 

 

Senior Vice President and Chief Financial

Officer

 

 

 

 

 

 

 

WESTAFF, INC., a Delaware corporation

 

 

 

 

 

By:

/s/ Dawn M. Jaffray

 

 

Dawn M. Jaffray

 

 

Senior Vice President and Chief Financial

Officer

 

 

 

 

 

 

 

WESTAFF SUPPORT, INC., a California

corporation

 

 

 

 

 

By:

/s/ Dawn M. Jaffray

 

 

Dawn M. Jaffray

 

 

Senior Vice President and Chief Financial

Officer

 

 

 

 

 

 

 

MEDIAWORLD INTERNATIONAL, a California

corporation

 

 

 

 

 

By:

/s/ Dawn M. Jaffray

 

 

Dawn M. Jaffray

 

 

Senior Vice President and Chief Financial

Officer

 

18

--------------------------------------------------------------------------------

 

Accepted at Los Angeles, California as of the date
first set forth above in the preamble to this Agreement.

 

February 14, 2008

 

U.S. BANK NATIONAL ASSOCIATION,

 

as Agent

 

 

 

By:

/s/ Susan V. Freed

 

 

Susan V. Freed

 

 

Vice President

 

 

19

--------------------------------------------------------------------------------