Exhibit 10.8.20.8


 


EIGHTH
AMENDMENT


TO


MULTICURRENCY CREDIT AGREEMENT, LIMITED
WAIVER


AND CONSENT OF GUARANTORS


 


This EIGHTH
AMENDMENT TO MULTICURRENCY CREDIT AGREEMENT,
LIMITED WAIVER AND CONSENT OF GUARANTORS (this “Amendment”)
is dated as of March 1, 2006, 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, collectively, 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 (each
as defined in the Credit Agreement referred to below).


 


Recitals


 


Whereas, the
Parent, the Borrowers, the Lenders and Agents (as defined in the Credit
Agreement referred to below) have entered into that certain Multicurrency
Credit Agreement dated as of May 17, 2002 (as amended by (i) that certain First
Amendment to Multicurrency Credit Agreement, Limited Waivers and Consent of
Guarantors, dated as of October 31, 2002, (ii) that certain Second Amendment to
Multicurrency Credit Agreement, Limited Waivers and Consent of Guarantors,
dated as of June 13, 2003, (iii) that certain Third Amendment to Multicurrency
Credit Agreement, Limited Waivers and Consent of Guarantors, dated as of
September 25, 2003, (iv) that certain Fourth Amendment to Multicurrency Credit
Agreement, Limited Waivers and Consent of Guarantors, dated as of February 20,
2004, (v) that certain Fifth Amendment to Multicurrency Credit Agreement and
Consent of Guarantors, dated as of July 31, 2004, (vi) that certain Sixth
Amendment to Multicurrency Credit Agreement and Consent of Guarantors, dated as
of January 5, 2004, and (vii) that certain Seventh Amendment to Multicurrency
Credit Agreement, Limited Waiver and Consent of Guarantors, dated as of August
19, 2005, and as further modified by certain consents and waivers of the
Lenders prior to the date hereof, 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 (i) agree to amend certain provisions
of, and grant certain consents under, the Credit Agreement, including
increasing the US Revolving Loan Commitment by $5,000,000 and extending the
Commitment Termination Date by one year and (ii) waive a certain Event of
Default; and


 


Whereas, the
Lenders are willing to approve certain amendments of, and consents under, the
Credit Agreement and waive a certain Event of Default 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).


 

















 


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
Recitals in the Credit Agreement. The Recitals to the Credit
Agreement are hereby amended by adding the following “WHEREAS” clause
immediately after the first “WHEREAS” clause of the Recitals:


 


“WHEREAS, the parties hereto acknowledge and
agree that the Term Loan Commitments have been reduced to zero and, as of the
Eighth Amendment Effective Date, the US Revolving Loan Commitment has been
increased as set forth in the Eighth Amendment; and”


 


1.2           Amendment to
Section 1.5(a) of the Credit Agreement. Section 1.5(a) of
the Credit Agreement is hereby amended to read as follows:


 


(a)           “The Applicable Borrowers shall pay interest to the
Applicable Agent, for the ratable benefit of the Applicable Lenders in
accordance with the various Loans being made by each Lender, in arrears on each
applicable Interest Payment Date, at the following rates:  (i) with respect to the Revolving Credit
Advances, the US Index Rate or the UK Index Rate, as the case may be, plus the
Applicable Revolver Index Margin per annum; or in the case of the US Revolving
Credit Advances only, at the election of Borrower Representative, the LIBOR
Rate plus the Applicable Revolver LIBOR Margin per annum, based on the
aggregate Revolving Credit Advances outstanding to such Borrower from time to
time; (ii) with respect to the Term Loan, the US Index Rate plus the Applicable
Term Loan Index Margin per annum; and (iii) with respect to the Swing Line
Loan, the US Index Rate plus the Applicable Revolver Index Margin per annum.


 


As of the Eighth Amendment Effective Date,
the Applicable Margins are as follows:


 


	
  Applicable Revolver Index Margin

  	
   

  	
  0.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable Revolver LIBOR Margin

  	
   

  	
  2.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable L/C Margin

  	
   

  	
  2.50

  	
  %

  



 


The Applicable Margins shall be adjusted (up
or down) prospectively on a quarterly basis as determined by Borrowers’
consolidated financial performance, commencing with the first day of the first
calendar month that occurs more than 5 days after delivery of Borrowers’
quarterly Financial Statements to Lenders for the Fiscal Quarter ending April
15, 2006. Adjustments in Applicable Margins shall be determined by reference to
the following grids:


 


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  If Trailing 13-Period EBITDA IS:

  	
   

  	
  Level of Applicable Margins:

  
	
  >$14 million

  	
   

  	
  Level I

  
	
  <$14 million and > $12.5 million

  	
   

  	
  Level II

  
	
  <$12.5 million and > $8.8 million

  	
   

  	
  Level III

  
	
  <$8.8 million

  	
   

  	
  Level IV

  



 


	
   

  	
   

  	
  Applicable Margins

  	
   

  
	
   

  	
   

  	
  Level I

  	
   

  	
  Level II

  	
   

  	
  Level III

  	
   

  	
  Level IV

  	
   

  
	
  Applicable Revolver Index Margin

  	
   

  	
  0.00

  	
  %

  	
  0.00

  	
  %

  	
  0.25

  	
  %

  	
  0.50

  	
  %

  
	
  Applicable Revolver LIBOR Margin

  	
   

  	
  2.00

  	
  %

  	
  2.25

  	
  %

  	
  2.50

  	
  %

  	
  2.75

  	
  %

  
	
  Applicable L/C Margin

  	
   

  	
  2.00

  	
  %

  	
  2.25

  	
  %

  	
  2.50

  	
  %

  	
  2.75

  	
  %

  



 


All adjustments in the Applicable Margins
after April 2006 shall be implemented quarterly on a prospective basis based on
the EBITDA for Parent and its Subsidiaries on a consolidated basis for the 13
Fiscal Periods then ended, for each calendar month commencing at least 5 days
after the date of delivery to Lenders of the quarterly unaudited Financial
Statements evidencing the need for an adjustment. Concurrently with the
delivery of those Financial Statements, Borrower Representative shall deliver
to Agents and Lenders a certificate, signed by a Financial Officer, setting
forth in reasonable detail the basis for the continuance of, or any change in,
the Applicable Margins. Borrowers hereby agree, that if at any time after
receipt by the Applicable Agent of any audited Financial Statements required to
be delivered hereunder, the Applicable Agent determines in its sole discretion
that an unjustified reduction in the Applicable Margin has been granted to
Borrowers, Borrowers shall pay upon demand therefore an amount equal to the
difference between (i) the interest amount that should have been paid by
Borrowers for such period but for such unjustified reduction in the Applicable
Margin and (ii) the interest amount actually paid by Borrowers for such period.
Failure to timely deliver any Financial Statements required in this Section
1.5(a) shall, in addition to any other remedy provided for in this
Agreement, result in an increase in the Applicable Margins to the highest level
set forth in the foregoing grid, until the first day of the first calendar
month following the delivery of those Financial Statements demonstrating that
such an increase is not required. If a Default or Event of Default has occurred
and is continuing at the time any reduction in the Applicable Margins is to be
implemented, that reduction shall be deferred until the first day of the first
calendar month following the date on which such Default or Event of Default is
waived or cured.”


 


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1.3           Amendment to
Section 1.8(c) of the Credit Agreement. Section 1.8(c) of
the Credit Agreement is hereby amended by deleting the words “fourth
anniversary” in clause (z) of the definition of Applicable Percentage
and replacing them with the words “fifth anniversary”.


 


1.4           Amendment to
Section 2.2(d) of the Credit Agreement. Section 2.2(d) of
the Credit Agreement is hereby amended by deleting the reference to “US Maximum
Amount” therein and replacing such reference with “Maximum US Amount”.


 


1.5           Amendment to
Section 3.24 of the Credit Agreement. Section 3.24 of the
Credit Agreement is hereby amended by deleting the word “owing” in clause
(v) thereof and replacing it with the word “owning”.


 


1.6           Amendment to
Section 6.1 of the Credit Agreement. Section 6.1 of the
Credit Agreement is hereby amended by adding a new subclause (iii) to
the proviso set forth therein which shall read as follows:


 


“and (iii) US Borrower may acquire all or
substantially all of the assets or Stock of any franchisee of US Borrower, provided
that payments made in respect of all such acquisitions shall not exceed
$1,000,000 in the aggregate in any Fiscal Year and provided  further
that immediately before and after giving effect to any such acquisition, (x) no
Default or Event of Default shall have occurred and be continuing or would
result from such acquisition and (y) US Borrower shall have Borrowing
Availability of not less than $7,500,000, and US Borrower and UK Borrower shall
have a combined Borrowing Availability of not less than $10,000,000.”


 


1.7           Amendment to
Section 6.3 of the Credit Agreement. Section 6.3(a)  of the Credit Agreement is hereby amended to
delete the “and” just before clause (x) thereof and to add an “; and” just
before the period at the end of subclause (K) of clause (x) thereof and
to add a new clause (xi) which shall read as follows:


 


“(xi)
unsecured Indebtedness incurred by the US Borrower in connection with any
deferred purchase price (including with respect to earn-outs) in connection
with acquisitions permitted by subclause (iii) of the proviso in Section
6.1, provided that such Indebtedness not exceed 50% of the purchase
price of any such acquisition.”


 


1.8           Amendment to
Section 6.8 of the Credit Agreement. Section 6.8 of the
Credit Agreement is hereby amended by (a) deleting the word “and” immediately
prior to clause (i) in the first sentence thereof and adding a new
clause (j) to read as follows:


 


“and (j) such other sales, transfers or other
dispositions of assets in an amount not to exceed $1,000,000 in the aggregate
in any Fiscal Year, provided that immediately before and after giving
effect to any such sale, transfer or disposition (i) no Default or Event of
Default shall have occurred and be continuing or would result from such sale,
transfer or disposition and (ii) US Borrower shall have Borrowing Availability
of not less than $7,500,000, and US Borrower and UK Borrower shall have a
combined Borrowing Availability of not less than $10,000,000.”; and


 


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(b) deleting
the second sentence thereof in its entirety and replacing it with the
following:


 


“With respect to any disposition of assets or
other properties permitted pursuant to clauses (a), (b), (h)
or (j) above, subject to Section 1.3(b), each Agent agrees
on reasonable prior written notice to release its Lien on such assets or other
properties in order to permit the applicable Credit Party to effect such
disposition and shall execute and deliver to Borrowers, at Borrowers’ expense,
appropriate UCC-3 termination statements and other releases as reasonably
requested by Borrowers.”


 


1.9           Amendment to
Section 6.14(j) of the Credit Agreement. Section 6.14(j) of
the Credit Agreement is hereby amended by deleting the clause in its entirety
and replacing it with the following:


 


“(j)
payment of up to $2,000,000 of principal of Subordinated Debt; provided that
(i) no Default or Event of Default has occurred and is continuing or would
result after giving effect to any Restricted Payment pursuant to this clause
(j), (ii) on a pro-forma basis, after giving effect to such payment, US Borrower
shall have had daily average Borrowing Availability for the 90 days immediately
preceding such payment of at least $7,500,000, and US Borrower and UK Borrower
shall have had combined daily average Borrowing Availability for the 90 days
immediately preceding such payment of at least $10,000,000, (iii) on the date
of such payment and after giving effect thereto, US Borrower shall have
Borrowing Availability of at least $7,500,000, and US Borrower and UK Borrower
shall have a combined Borrowing Availability of at least $10,000,000, and (iv)
on a pro-forma basis, after giving effect to such payment as if such payment
had been made in the immediately preceding Fiscal Quarter, the Fixed Charge
Coverage Ratio requirement applicable to the end of such Fiscal Quarter would
have been satisfied, and (v) US Borrower shall have delivered to US Agent an
officer’s certificate in form and substance reasonably satisfactory to US Agent
certifying the items set forth in (i) thru (iv) of this clause
(j).”


 


1.10         Amendments to Annex A
(Definitions) to the Credit Agreement.


 


(a)           The following new definitions are hereby added to Annex
A to the Credit Agreement, in each case in proper alphabetical order:


 


“‘Available Cash’
means, as of any date of determination, all cash on hand (and then available at
the close of business) deposited in that certain account of US Borrower,
account number 2-534-1002-4785, located at U.S. Bank National Association, but
solely to the extent that such account is subject to a control agreement in form
and substance satisfactory to US Agent.”


 


“‘Eighth Amendment’
means the Eighth Amendment to Multicurrency Credit Agreement, Limited Waiver
and Consent of Guarantors dated as of March 1, 2006, among the Parent, the
Borrowers, the Lenders and Agents.”


 


“‘Eighth Amendment
Effective Date’ means the date on which the Eighth Amendment became
effective in accordance with its terms.”


 


5

















 


(b)           The definition of “Borrowing Availability” is hereby
amended by deleting the definition in its entirety and replacing it with the
following:


 


“‘Borrowing
Availability’ means as of any date of determination (a) as to the US
Borrower, the lesser of (i) the Maximum US Amount and (ii) the US Borrowing
Base, in each case less the sum of the aggregate Revolving Loan and Swing Line
Loan then outstanding to the US Borrower or (b) as to the UK Borrower, the
lesser of (i) the Maximum UK Amount and (ii) the UK Borrowing Base, in each
case less the sum of the Revolving Loan outstanding to the UK Borrower; provided
that if on such date of determination the balances of each of the US Revolving
Loan, the Swing Line Loan and the UK Revolving Loan are zero, the Borrowing
Availability as determined by clause (a) above shall be increased by an amount equal
to Available Cash as of such date of determination; provided  further
that an Overadvance in accordance with Section 1.1 may cause the
Revolving Loan and, in the case of the US Borrower, the Swing Line Loan to
exceed the US Borrowing Base or the UK Borrowing Base of the Applicable
Borrower by the amount of such permitted Overadvance.”


 


(c)           The definition of “Commitment Termination Date” is
hereby amended by changing the reference in clause (a) thereof from “May
17, 2007”, to “May 17, 2008”.


 


(d)           The definition of “Maximum US Amount” is hereby
amended by changing the reference to “Fifty Million Dollars ($50,000,000)”
therein to “Fifty-five Million Dollars ($55,000,000)”.


 


(e)           The definition of “Revolving Loan Commitment” is
hereby amended by changing the reference to “Fifty-four Million Dollars
($54,000,000) on the Closing Date” in clause (b) thereof to “Fifty-nine
Million Dollars ($59,000,000) on the Eighth Amendment Effective Date”.


 


(f)            The definition of “Term Loan Commitment” is hereby
amended by deleting the definition in its entirety and replacing it with the
following:


 


“‘Term Loan Commitment’ means the Term Loan Commitment of the
Term Loan Lenders set forth on Annex J, which shall be zero.


 


(g) The definition of “US Revolving Loan Commitment” is hereby amended
by deleting the definition in its entirety and replacing it with the following:


 


“‘US Revolving
Loan Commitment’ means (a) as to any
US Revolving Lender, the commitment of a US Revolving Lender to make US Revolving
Credit Advances as set forth in Annex J to the Agreement or in the most
recent Assignment Agreement executed by such US Revolving Lender and (b) as to
all US Revolving Lenders, the aggregate commitment of all US Revolving Lenders
to make US Revolving Credit Advances, which aggregate commitment shall be
Fifty-five Million Dollars ($55,000,000) on the Eighth Amendment Effective
Date, as such amount may be adjusted, if at all, from time to time in
accordance with the Agreement.”


 


6

















 


1.11         Amendments to
Annex B to the Credit Agreement. Paragraph (a)(i) of
Annex B to the Credit Agreement is hereby amended by (i) changing the
reference in the definition of L/C Sublimit (specified in clause (i) of
the second sentence paragraph (a)(i)) from “Forty Million Dollars
($40,000,000)” to “Forty-five Million Dollars ($45,000,000)” and (ii) deleting
the third sentence thereof in its entirety and replacing it with the following:


 


“For the avoidance of doubt, US Borrower is
required to comply with the obligations set forth in paragraph (c) of
this Annex B (including, without limitation, under clause (ii)
thereof) with respect to all Letter of Credit Obligations in respect of any
Letter of Credit having an expiry date that is later than the Commitment
Termination Date.”; and


 


(b) deleting
the reference to “US Maximum Amount” in the penultimate sentence of Paragraph
(c)(iv) thereof and replacing such reference with “Maximum US Amount”.


 


1.12         Amendment to
Annex F to the Credit Agreement. Annex F to the
Credit Agreement is hereby amended by deleting it in its entirety and replacing
it with the Annex F attached hereto as Exhibit E.


 


1.13         Amendment to
Annex G to the Credit Agreement. Annex G to the
Credit Agreement is hereby amended by deleting paragraph (c)(ii) and (iii)
thereof (including the matrix therein) in their entirety and replacing them
with the following:


 


“(ii)         at the end of each Fiscal
Quarter set forth below, EBITDA for the 13 Fiscal Periods then ended of not
less than the amount set forth below for such period:


 




	
  FISCAL QUARTER

  ENDING

  	
   

  	
  MINIMUM EBITDA

  	
   

  
	
  1/21/2006

  	
   

  	
  $

  	
  10,500,000

  	
   

  
	
  4/15/2006

  	
   

  	
  $

  	
  10,500,000

  	
   

  
	
  7/8/2006

  	
   

  	
  $

  	
  10,500,000

  	
   

  
	
  10/28/2006

  	
   

  	
  $

  	
  13,000,000

  	
   

  
	
  1/20/2007

  	
   

  	
  $

  	
  13,000,000

  	
   

  
	
  4/14/2007

  	
   

  	
  $

  	
  13,000,000

  	
   

  
	
  7/7/2007 and for each Fiscal
  Quarter ended thereafter

  	
   

  	
  $

  	
  14,000,000

  	
   

  






 


1.14         Amendment to
Annex J to the Credit Agreement. Annex J to the
Credit Agreement is hereby amended by deleting the annex in its entirety and
replacing it with the amended Annex J attached hereto as Exhibit A.


 


7

















 


1.15         Amendment to
Schedule Annex C (Controlled Accounts). Schedule Annex C
(Controlled Accounts) is hereby amended by deleting such Schedule in its
entirety and replacing it in its entirety with the amended Schedule Annex C
(Controlled Accounts) attached hereto as Exhibit D.


 


2.             LIMITED WAIVER. Subject to the satisfaction of the
conditions set forth herein, the Lenders hereby agree that, notwithstanding the
requirements of paragraph (c)(ii) of Annex G (Financial Covenants) to the
Credit Agreement (without giving effect to this Amendment), the Lenders hereby
waive the Event of Default that arose from the failure of Parent and its
Subsidiaries to have on a consolidated basis a minimum EBITDA for the 13 Fiscal
Periods ending January 21, 2006 of not less than $12,000,000, provided that the
minimum EBITDA for such Fiscal Quarter, measured on a 13 Fiscal Periods then
ended basis, may not be less than $10,500,000.  This waiver shall be
limited precisely as written, shall apply solely with respect to the failure of
Parent and its Subsidiaries to have on a consolidated basis a minimum EBITDA of
not less than $12,000,000, measured on a 13 Fiscal Periods then ended basis,
for the Fiscal Quarter ending January 21, 2006, as required pursuant to
paragraph (c)(ii) of Annex G (Financial Covenants) to the Credit Agreement, and
nothing contained in this Amendment shall be deemed to constitute a waiver of
any other Default or Event of Default or provision of the Credit Agreement, or
any consent to or departure from the terms of the Credit Agreement.


 


3.             ONE-TIME ADJUSTMENT IN FIXED
CHARGE COVERAGE RATIO. 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 paragraph (b) of Annex G (Financial Covenants) to the
Credit Agreement, the minimum Fixed Charge Coverage Ratio for the Fiscal
Quarter ending April 15, 2006, shall be adjusted from a minimum of not less
than 1.25:1.00, measured on a 13 Fiscal Periods then ended basis, to a minimum
of not less than 1.10:1.00, measured on a 13 Fiscal Periods then ended basis.


 


4.             REPRESENTATIONS AND WARRANTIES OF THE PARENT AND
THE BORROWERS. The
Parent and the US Borrower jointly and severally make, and the UK Borrower,
only in respect of itself, severally makes, 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 hereby, 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 


 


8

















 


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)            executed by the Parent, the Borrowers and all Lenders,
and counterparts hereof shall have been delivered to Agents or their counsel
(by hand delivery, mail or telecopy);


 


(ii)           each Guarantor shall have delivered to Agents or their
counsel executed counterparts of the Consent;


 


(iii)          the US Borrower on behalf of itself and the other
Credit Parties and the UK Borrower on behalf of itself shall have delivered to
Agents or their counsel a certificate certifying (x) that the representations
and warranties contained herein and in the Loan Documents are true and correct
in all material respects as of such date (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), and (y) no Default or Event of Default has occurred and will be
continuing (after giving effect to this Amendment);


 


(iv)          the US Borrower shall have delivered to the US Agent
or its counsel (x) an executed Amended and Restated US Revolving Note in favor
of GE Capital substantially in the form of Exhibit B hereto and (y) an
executed Amended and Restated US Revolving Note in favor of Bank of America
substantially in the form of Exhibit C hereto;


 


9

















 


(v)           the Credit Parties shall have delivered to Agents or
their counsel a certificate certifying (a) 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
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); (b) duly adopted resolutions
authorizing the execution, delivery and performance of this Amendment, the
Amended and Restated US Revolving Notes, and the Consent; and (c) the
incumbency of the applicable Credit Party’s officers executing the Amendment,
the Amended and Restated US Revolving Notes or Consent; and


 


(vi)          the Credit Parties shall have delivered to Agents or
their counsel opinions of inside and outside U.S. counsel in form and substance
reasonably satisfactory to Agents.


 


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.


 


After
receipt of the executed Amended and Restated US Revolving Notes by each of GE
Capital and Bank of America and after full effectiveness of this Amendment, the
Lenders shall return to US Borrower the original US Revolving Notes delivered
to the US Revolving Lenders on the Closing Date.


 


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
any 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 


 


10

















 


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 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.


 


[signatures
following; remainder of page intentionally left blank]


 


11

















 


IN WITNESS
WHEREOF, each of the undersigned has duly executed
this Eighth 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

  
										



 


 


[SIGNATURE PAGE TO EIGHTH AMENDMENT TO MULTICURRENCY CREDIT AGREEMENT, 


LIMITED WAIVER AND CONSENT OF GUARANTORS]


 


12

















 


The following
Person is a signatory to this Eighth 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

  
					



 

















 


EXHIBIT A


 


AMENDED ANNEX J (from Annex A -
Commitments definition)


to


CREDIT AGREEMENT


 


 


	
  Lenders

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GENERAL ELECTRIC CAPITAL CORPORATION,

  	
   

  	
  US Revolving Loan Commitment (including a 

  Swing Line Commitment

  of $10,000,000)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $31,694,915.25

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UK Revolving Loan Commitment

  £1,579,149.65

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Term Loan Commitment

  
	
   

  	
   

  	
  $0

  
	
   

  	
   

  	
   

  
	
  BANK OF AMERICA, N.A.

  	
   

  	
  US Revolving Loan Commitment

  $23,305,084.75

  
	
   

  	
   

  	
  UK Revolving Loan Commitment

  £1,161,139.45

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Term Loan Commitment

  $0

  



 

















 


EXHIBIT B


 


FORM OF AMENDED AND RESTATED US REVOLVING
NOTE


 


March    ,
2006


San Francisco,
California


 


$31,694,915.25


 


FOR VALUE RECEIVED, each of the undersigned,
WESTAFF (USA), INC., a California corporation (“US Borrower”) HEREBY
PROMISES TO PAY to the order of GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation (“Lender”), at the offices of GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation, as US Agent for the US Revolving
Lenders (“Agent”) at its address at 6130 Stoneridge Mall Rd, Ste. 300,
Pleasanton, California 94588, or at such other place as Agent may designate
from time to time in writing, in lawful money of the United States of America
and in immediately available funds, the amount of THIRTY-ONE MILLION SIX
HUNDRED NINETY-FOUR THOUSAND NINE HUNDRED FIFTEEN DOLLARS AND TWENTY-FIVE CENTS
($31,694,915.25) or, if less, the aggregate unpaid amount of all Revolving
Credit Advances made to the undersigned under the “Credit Agreement” (as
hereinafter defined). All capitalized terms used but not otherwise defined
herein have the meanings given to them in the Credit Agreement (as hereinafter
defined) or in Annex A thereto.


 


This Amended and Restated US Revolving Note
is one of the Revolving Notes issued pursuant to that certain Multicurrency
Credit Agreement dated as of May 17, 2002, by and among Borrower, Westaff,
Inc., as Parent, Westaff Support, Inc., as Term Borrower, Westaff (U.K.)
Limited, as UK Borrower, Westaff (USA) Inc., as a US Borrower, Westaff (CA),
Inc., as a US Borrower, Westaff Limited Partnership, as a US Borrower, Agent,
and the other Persons signatory thereto from time to time as Lenders (including
all annexes, exhibits and schedules thereto, and as from time to time amended,
restated, amended and restated supplemented, replaced or otherwise modified,
including, without limitation, pursuant to (i) that certain First Amendment to
Multicurrency Credit Agreement, Limited Waivers and Consent of Guarantors,
dated as of October 31, 2002, (ii) that certain Second Amendment to
Multicurrency Credit Agreement, Limited Waivers and Consent of Guarantors,
dated as of June 13, 2003, (iii) that certain Third Amendment to Multicurrency
Credit Agreement, Limited Waivers and Consent of Guarantors, dated as of
September 3, 2003, (iv) that certain Fourth Amendment to Multicurrency Credit
Agreement, Limited Waivers and Consent of Guarantors, dated as of February 20,
2004, (v) that certain Fifth Amendment to Multicurrency Credit Agreement and
Consent of Guarantors, dated as of July 31, 2004, (vi) that certain Sixth
Amendment to Multicurrency Credit Agreement and Consent of Guarantors, dated as
of January 5, 2004, (vii) that certain Seventh Amendment to Multicurrency
Credit Agreement, Limited Waiver and Consent of Guarantors, dated as of August
19, 2005, and (viii) that certain Eighth Amendment to Multicurrency Credit
Agreement, Limited Waiver and Consent of Guarantors, dated as of March 1, 2006,
the “Credit Agreement”), and is entitled to the benefit and security of
the Credit Agreement, the Security Agreement and all of the other Loan
Documents referred to therein. Reference is hereby made to the Credit Agreement
for a statement of all of the terms and conditions under which the Loans
evidenced 


 


1

















 


hereby are made and are to be repaid. The
date and amount of each Revolving Credit Advance made by US Revolving Lenders
to Borrower, the rates of interest applicable thereto and each payment made on
account of the principal thereof, shall be recorded by Agent on its books;
provided that the failure of Agent to make any such recordation shall not
affect the obligations of Borrower to make a payment when due of any amount
owing under the Credit Agreement or this Note in respect of the Revolving Credit
Advances made by US Revolving Lender to Borrower. This
Amended and Restated US Revolving Notes amends and restates in its entirety
that certain US Revolving Note in favor of Lender, dated as of May 17, 2002.


 


The principal amount of the indebtedness
evidenced hereby shall be payable in the amounts and on the dates specified in
the Credit Agreement, the terms of which are hereby incorporated herein by
reference. Interest thereon shall be paid until such principal amount is paid
in full at such interest rates and at such times, and pursuant to such
calculations, as are specified in the Credit Agreement.


 


If any payment on this Amended and Restated
US Revolving Note becomes due and payable on a day other than a Business Day,
the maturity thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension.


 


Upon and after the occurrence of any Event of
Default, this Amended and Restated US Revolving Note may, as provided in the
Credit Agreement, and without demand, notice or legal process of any kind, be
declared, and immediately shall become, due and payable.


 


Time is of the essence of this Amended and
Restated US Revolving Note. Demand, presentment, protest and notice of
nonpayment and protest are hereby waived by US Borrower.


 


Except as provided in the Credit Agreement,
this Amended and Restated US Revolving Note may not be assigned by US Revolving
Lender to any Person.


 


THIS AMENDED AND RESTATED US REVOLVING NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA (USA) APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.


 


[Signature Page to Follow]


 


2

















 


IN WITNESS WHEREOF, the undersigned has
executed this Note as of the date first above written.


 


	
   

  	
  WESTAFF (USA), INC.,

  	
   

  
	
   

  	
  a California corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Dirk A. Sodestrom

  	
   

  
	
   

  	
  Name:

  	
  Dirk A. Sodestrom

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President and Chief

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Financial Officer

  	
   

  
						



 


3

















 


EXHIBIT C


 


FORM OF AMENDED AND RESTATED US REVOLVING
NOTE


 


March    ,
2006


San Francisco,
California


 


$23,305,084.75


 


FOR VALUE RECEIVED, each of the undersigned,
WESTAFF (USA), INC., a California corporation (“US Borrower”) HEREBY
PROMISES TO PAY to the order of BANK OF AMERICA, N.A. (“Lender”), at the
offices of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as US
Agent for the US Revolving Lenders (“Agent”) at its address at 6130
Stoneridge Mall Rd, Ste. 300, Pleasanton, California 94588, or at such other
place as Agent may designate from time to time in writing, in lawful money of
the United States of America and in immediately available funds, the amount of
TWENTY-THREE MILLION THREE HUNDRED FIVE THOUSAND EIGHTY-FOUR DOLLARS AND
SEVENTY-FIVE CENTS ($23,305,084.75) or, if less, the aggregate unpaid amount of
all Revolving Credit Advances made to the undersigned under the “Credit
Agreement” (as hereinafter defined). All capitalized terms used but not
otherwise defined herein have the meanings given to them in the Credit
Agreement (as hereinafter defined) or in Annex A thereto.


 


This Amended and Restated US Revolving Note
is one of the Revolving Notes issued pursuant to that certain Multicurrency
Credit Agreement dated as of May 17, 2002, by and among Borrower, Westaff,
Inc., as Parent, Westaff Support, Inc., as Term Borrower, Westaff (U.K.)
Limited, as UK Borrower, Westaff (USA) Inc., as a US Borrower, Westaff (CA),
Inc., as a US Borrower, Westaff Limited Partnership, as a US Borrower, Agent,
and the other Persons signatory thereto from time to time as Lenders (including
all annexes, exhibits and schedules thereto, and as from time to time amended,
restated, amended and restated supplemented, replaced or otherwise modified,
including, without limitation, pursuant to (i) that certain First Amendment to
Multicurrency Credit Agreement, Limited Waivers and Consent of Guarantors,
dated as of October 31, 2002, (ii) that certain Second Amendment to
Multicurrency Credit Agreement, Limited Waivers and Consent of Guarantors,
dated as of June 13, 2003, (iii) that certain Third Amendment to Multicurrency
Credit Agreement, Limited Waivers and Consent of Guarantors, dated as of
September 3, 2003, (iv) that certain Fourth Amendment to Multicurrency Credit
Agreement, Limited Waivers and Consent of Guarantors, dated as of February 20,
2004, (v) that certain Fifth Amendment to Multicurrency Credit Agreement and
Consent of Guarantors, dated as of July 31, 2004, (vi) that certain Sixth
Amendment to Multicurrency Credit Agreement and Consent of Guarantors, dated as
of January 5, 2004, (vii) that certain Seventh Amendment to Multicurrency
Credit Agreement, Limited Waiver and Consent of Guarantors, dated as of August
19, 2005, and (viii) that certain Eighth Amendment to Multicurrency Credit
Agreement, Limited Waiver and Consent of Guarantors, dated as of March 1, 2006,
the “Credit Agreement”), and is entitled to the benefit and security of
the Credit Agreement, the Security Agreement and all of the other Loan
Documents referred to therein. Reference is hereby made to the Credit Agreement
for a statement of all of the terms and conditions under which the Loans
evidenced hereby are made and are to be repaid. The date and amount of each
Revolving Credit Advance 


 


1

















 


made by US Revolving Lenders to Borrower, the
rates of interest applicable thereto and each payment made on account of the
principal thereof, shall be recorded by Agent on its books; provided that the
failure of Agent to make any such recordation shall not affect the obligations
of Borrower to make a payment when due of any amount owing under the Credit
Agreement or this Note in respect of the Revolving Credit Advances made by US
Revolving Lender to Borrower. This Amended and Restated
US Revolving Notes amends and restates in its entirety that certain US
Revolving Note in favor of Lender, dated as of May 17, 2002.


 


The principal amount of the indebtedness
evidenced hereby shall be payable in the amounts and on the dates specified in
the Credit Agreement, the terms of which are hereby incorporated herein by
reference. Interest thereon shall be paid until such principal amount is paid
in full at such interest rates and at such times, and pursuant to such
calculations, as are specified in the Credit Agreement.


 


If any payment on this Amended and Restated
US Revolving Note becomes due and payable on a day other than a Business Day,
the maturity thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension.


 


Upon and after the occurrence of any Event of
Default, this Amended and Restated US Revolving Note may, as provided in the
Credit Agreement, and without demand, notice or legal process of any kind, be
declared, and immediately shall become, due and payable.


 


Time is of the essence of this Amended and
Restated US Revolving Note. Demand, presentment, protest and notice of
nonpayment and protest are hereby waived by US Borrower.


 


Except as provided in the Credit Agreement,
this Amended and Restated US Revolving Note may not be assigned by US Revolving
Lender to any Person.


 


THIS AMENDED AND RESTATED US REVOLVING NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA (USA) APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.


 


[Signature Page to Follow]


 


2

















 


IN WITNESS WHEREOF, the undersigned has
executed this Note as of the date first above written.


 


	
   

  	
  WESTAFF (USA), INC.,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Dirk A. Sodestrom

  	
   

  
	
   

  	
  Name:

  	
  Dirk A. Sodestrom

  
	
   

  	
  Title:

  	
  Senior Vice President and Chief

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Financial Officer

  
					



 


3

















 


EXHIBIT D


 


SCHEDULE ANNEX C


TO


CREDIT AGREEMENT


 


CONTROLLED ACCOUNTS


 


US Controlled Accounts


 


	
  US Lock Boxes

  	
   

  	
  US Blocked

  Accounts

  	
   

  	
  US Disbursement

  Accounts Subject

  to Control

  Agreements

  	
   

  	
  US Disbursement Accounts Not Subject to Control Agreements

  
	
  US Bank West Coast Lock box Number 153490526693

  	
   

  	
   

  	
   

  	
  US Bank New Concentration Account # 153490600159

  	
   

  	
  US Bank Controlled Disbursement Temp Payroll Account #130103010612

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  US Bank New Concentration Account # 153453157635

  

  US Bank Account #2-534-1002-4785

  	
   

  	
  US Bank Controlled Disbursement Accounts Payable Account
  #130103010620

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  BofA Main Funding Account Number 1499013019

  	
   

  	
  US Bank Regular Payroll ZBA Account #153453157643

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Bank of America Controlled Disbursement Temp Payroll Account
  #7313500975

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Bank of America Controlled Disbursement Temp Payroll Raleigh Account
  #7313802062

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  US Bank Regular Payroll ZBA Account #153453157643

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  US Bank State of Washington Surety CD Account #CD-98554000, provided
  that amounts deposited therein shall at no time exceed $750,000. (Amount
  currently on deposit - $595,000)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Other bank accounts in name of any Credit Party which do not exceed
  $25,000 in deposits for all accounts at such institution in the aggregate, or
  $250,000 in the aggregate for all Credit Parties, including without
  limitation all check cashing only accounts identified below:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Bank Name 

  	
   

  	
  Account #

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Amsouth Bank

  	
   

  	
  8321132

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Coppermark Bank

  	
   

  	
  7009138D

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Banknorth, N.A. 

  	
   

  	
  00009110108796

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Bank One

  	
   

  	
  616261012

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Busey Bank

  	
   

  	
  21502293

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Charter One Bank

  	
   

  	
  4400127437

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Republic Bank

  	
   

  	
  0601026820

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Citizens Bank

  	
   

  	
  3345109381

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  CB&T Bank of Russell County

  	
   

  	
  0000135615

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Extraco Banks

  	
   

  	
  10638

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Horizons Bank

  	
   

  	
  5009405

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Merchants Bank

  	
   

  	
  3190001424

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  River Bank, The

  	
   

  	
  3900522

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Sovereign Bank – NE

  	
   

  	
  44000034908

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Stillwater NB&T Co.

  	
   

  	
  6173820

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Trustco Bank

  	
   

  	
  31391462

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Bank, The

  	
   

  	
  0000037845

  	
   

  



 


1

















 


UK Controlled Accounts


 


	
  Blocked Accounts

  	
   

  	
  UK Disbursement

  Accounts Subject to

  Control Agreements

  	
   

  	
  UK Disbursement Accounts Not Subject to Control Agreements

  
	
  National Westminister Main Checking Account #72153938

  Barclays Bank,

  Main Account

  10812234



  	
   

  	
  Barclays Bank, Expense Account - Disbursement 80813435

  



  	
   

  	
  Barclays Bank, Payroll Account –
  Disbursement #50180831

  



 


2

















 


EXHIBIT E


 


ANNEX F (Section 4.1(b))


to


CREDIT AGREEMENT


 


COLLATERAL REPORTS


 


Borrowers shall deliver or cause to be
delivered the following:


 


(a)           To
the Applicable Agent, upon the request of the Applicable Agent, and in any
event no less frequently than 15 Business Days after the end of each Fiscal
Period (together with a copy of all or any part of the following reports
requested by any Lender in writing after the Closing Date), each of the
following reports, each of which shall be prepared by the applicable Borrower
as of the last day of the immediately preceding Fiscal Period or the date 2
days prior to the date of any such request:


 


(i)            a Borrowing Base
Certificate with respect to US Borrowers and UK Borrower, in each case
accompanied by such supporting detail and documentation as shall be requested
by the Applicable Agent in its reasonable discretion;


 


(ii)           with respect to US
Borrowers and UK Borrower, a periodic trial balance showing Accounts
outstanding aged from invoice date as follows: 
1 to 30 days, 31 to 60 days, 61 to 90 days and 91 days or more,
accompanied by such supporting detail and documentation as shall be requested
by the Applicable Agent in its reasonable discretion; and


 


(iii)          with respect to US
Borrowers, a “Master Tax” report which evidences each US Borrower’s daily
payment of United States payroll withholding taxes for the prior Fiscal Period
(or the period since the last report);


 


(b)           To the Applicable Agent, (1) on a Fiscal Period basis
provided that (i) US Borrower shall have Borrowing Availability of not less
than $7,500,000, (ii) US Borrower and UK Borrower shall have a combined
Borrowing Availability of not less than $10,000,000 and (iii) no Default or
Event of Default exists, otherwise (2) on a weekly basis (or, upon the request
of the Applicable Agent, on a daily basis) collateral reports with respect to
US Borrowers and UK Borrower, identifying all balances of and including all
additions and reductions (cash and non-cash) with respect to the Accounts and
Revenue Week Accounts of each such Borrower, in each case, accompanied by such
supporting detail and documentation as shall be requested by the Applicable
Agent in its reasonable discretion, each of which shall be prepared by the
applicable Borrower as of the last day of the applicable Fiscal Period (with
respect to a report delivered pursuant to clause (1)), or as of the last day of
the week (with respect to a weekly report delivered pursuant to clause (2)), or
as of the immediately preceding day (as to a daily report delivered pursuant to
clause (2)) and, in the case of a report to be delivered under clause (1),
delivered to the Applicable Agent within 15 Business Days 


 

















 


after the end of such
Fiscal Period or, in the case of a report to be delivered under clause (2),
delivered to the Applicable Agent no later than the next succeeding Business
Day. It is understood that the Applicable Agent may request this information at
such other intervals as the Applicable Agent (with the consent of the Lenders)
may request from time to time (together with a copy of all or any part of such
delivery requested by any Lender in writing after the Closing Date);


 


(c)                           To the Applicable Agent, at the time
of delivery of each of the Fiscal Period Financial Statements delivered
pursuant to Annex E:


 


(i)            a reconciliation of
the Accounts trial balance of US Borrowers and UK Borrower to such Borrower’s
most recent Borrowing Base Certificate, general ledger and Fiscal Period
Financial Statements delivered pursuant to Annex E, in each case
accompanied by such supporting detail and documentation as shall be requested
by the Applicable Agent in its reasonable discretion; and


 


(ii)           a reconciliation of the
outstanding Revolving Loans as set forth in the Fiscal Period Loan Account
statement provided by the Applicable Agent to US Borrowers’ and UK Borrower’s
general ledger and Fiscal Period Financial Statements delivered pursuant to Annex E,
in each case accompanied by such supporting detail and documentation as shall
be requested by the Applicable Agent in its reasonable discretion;


 


(d)           To
the Applicable Agent, at the time of delivery of each of the quarterly
Financial Statements delivered pursuant to Annex E, a listing of
government contracts of each Borrower subject to the Federal Assignment of
Claims Act of 1940 or any similar statute of any applicable jurisdiction;


 


(e)           To
the Applicable Agent such appraisals of the assets of the Applicable Borrower
as the Applicable Agent may request at any time after the occurrence and during
the continuance of an Event of Default, such appraisals to be conducted by an
appraiser, and in form and substance reasonably satisfactory to the Applicable
Agent; and


 


(f)            Such
other reports, statements and reconciliations with respect to the Borrowing
Base, Collateral or Obligations of any or all Credit Parties as the Applicable
Agent shall from time to time request in its reasonable discretion.


 


2

















 


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, including without limitation, the increase in the
Revolving Loan Commitment by Five Million Dollars and the extension of the
Commitment Termination Date by one year, 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 and reaffirms 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]


 

















 


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

  
	
   

  	
   

  	
   

  
	
   

  	
  MEDIAWORLD INTERNATIONAL

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dirk A. Sodestrom

  	
   

  
	
   

  	
  Name:

  	
  Dirk A. Sodestrom

  
	
   

  	
  Title:

  	
  Senior Vice President and Chief

  
	
   

  	
   

  	
  Financial Officer

  
													



 


[SIGNATURE PAGE TO CONSENT OF GUARANTORS]