Exhibit 10.1


 


SECOND
AMENDMENT TO SECOND AMENDED AND RESTATED FORBEARANCE AGREEMENT


 


THIS SECOND AMENDMENT TO SECOND AMENDED AND
RESTATED FORBEARANCE AGREEMENT (this “Amendment”), dated as of December 3,
2008, is entered into by and among the financial institutions identified on the
signature pages hereto (collectively, the “Lenders”), U.S. Bank
National Association, as administrative agent for the Lenders (in such
capacity, the “Agent”), Westaff (USA), Inc., a California
corporation (the “Borrower”), and Westaff, Inc., a Delaware
corporation and the sole shareholder of the Borrower, as parent guarantor (the “Parent
Guarantor”),
with reference to the following facts:


 


RECITALS


 


A.            The Borrower, the Parent Guarantor,
the Agent and the Lenders are parties to a Second Amended and Restated
Forbearance Agreement, dated as of September 30, 2008 (the “Forbearance
Agreement”), pursuant to which the Agent and the Lenders agreed to forbear
through November 21, 2008 from exercising their available Default Rights
and Remedies in response to the occurrence and continuation of certain Existing
Events of Default under the Financing Agreement, dated as of February 14,
2008, among the Borrower, the Parent Guarantor, the Agent and the Lenders, as
amended.


 


B.            Pursuant to the First Amendment to
Second Amended and Restated Forbearance Agreement, dated as of November 20,
2008, the parties to the Forbearance Agreement amended the Forbearance
Agreement to extend the term of the forbearance period thereunder by ten (10) business
days, from November 21, 2008 to December 5, 2008.


 


C.            The parties are in the process of
exploring further negotiations with respect to certain additional terms and
conditions of an extended forbearance period and, in an effort to provide
additional time for such discussions, the parties hereto wish to amend the
Forbearance Agreement to extend the term of the forbearance period thereunder
by an additional ten (10) business days, from December 5, 2008 to December 19,
2008.


 


NOW, THEREFORE, the parties hereby agree as follows:


 


1.             Defined Terms.  Any and all initially-capitalized terms used
in this Amendment (including, without limitation, in the recitals to this
Amendment) without definition shall have the respective meanings assigned
thereto in the Forbearance Agreement.


 


2.             Extension of Forbearance Period.  Section 2 of the Forbearance
Agreement is hereby amended to read in full as follows:


 


“2.  Limited Forbearance Agreement.  So long as no additional Events of Default
occur during such period, the Agent and the Lenders hereby agree to forbear
from exercising any of their Default Rights and Remedies in response to the
occurrence and continuance of the Existing Events of Default throughout the
period commencing on December 5, 2008 and ending on December 19, 2008
(the ‘Forbearance Period’).”


 

















 


3.             No Waiver.  The agreement of the Agent and the Lenders
under Section 2 of this Amendment conditionally to forbear from exercising
their Default Rights and Remedies throughout the Forbearance Period as extended
hereby shall not constitute a waiver of either of the Existing Events of
Default, and the Agent and the Lenders hereby expressly reserve all their
Default Rights and Remedies in connection with the Existing Events of Default.


 


4.             General Release.  In consideration of the agreement of the
Agent and the Lenders to enter into this Amendment and hereby conditionally
forbear from exercising their available Default Rights and Remedies throughout
the Forbearance Period as extended hereby, the Borrower and the Parent Guarantor
hereby release, discharge and acquit the Agent, each Lender and their
respective agents, servants, employees, successors and assigns from any and all
claims, demands, liabilities, obligations and causes of action, whether known
or unknown, against them, which the Borrower or the Parent Guarantor now own or
hold, which the Borrower or the Parent Guarantor has at any time heretofore
owned or held, or which the Borrower or the Parent Guarantor hereafter may own
or hold, by reason of any action, matter, cause or thing whatsoever done prior
to the date of this Amendment, including specifically, but not limited to, any
and all claims, demands, rights and causes of action whatsoever arising out of
or which could be alleged to arise out of the Forbearance Agreement, the
Financing Agreement or any of the other Loan Documents.


 


It is the intention of the Borrower and the
Parent Guarantor in executing this Amendment that the same shall be effective
as a bar to each and every claim, demand, and cause of action hereinabove
specified, and in furtherance of this intention the Borrower and the Parent
Guarantor each waives and relinquishes all rights and benefits under Section 1542
of the Civil Code of the State of California, which provides:


 


“A general
release does not extend to claims which the creditor does not know or suspect
to exist in his or her favor at the time of executing the release, which if
known by him or her might have materially affected his or her settlement with
the debtor.”


 


The Borrower and the Parent Guarantor
acknowledge that each of them may hereafter discover facts different from or in
addition to those now known or believed to be true with respect to such claims,
demands, or causes of action and agree that this Amendment shall be and remain
effective in all respects notwithstanding any such differences or additional
facts.


 


5.             Condition Precedent.  The effectiveness of this Amendment shall be
subject to the Agent’s receipt of this Amendment, duly executed by the
Borrower, the Parent Guarantor and each of the Lenders.


 


6.             Reaffirmation and Ratification.  The Borrower and the Parent Guarantor hereby
reaffirm, ratify and confirm their respective Obligations under the Forbearance
Agreement, the Financing Agreement and the other Loan Documents, acknowledge that
all of the terms and conditions of the Forbearance Agreement, the Financing
Agreement and such other Loan Documents remain in full force and effect, and
further acknowledge that the security interests granted to Agent in the
Collateral are valid and perfected.


 


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7.             Integration.  This Agreement constitutes the entire
agreement of the parties in connection with the subject matter hereof and
cannot be changed or terminated orally. 
All prior agreements, understandings, representations, warranties and
negotiations regarding the subject matter hereof, if any, are merged into this
Amendment.


 


8.             Counterparts.  This Agreement may be executed in multiple
counterparts, each of which when so executed and delivered shall be deemed an
original, and all of which, taken together, shall constitute but one and the
same agreement.


 


9.             Governing Law.  This Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws (as opposed to the
conflicts of law principles) of the State of California.


 


[Rest of page intentionally left blank; signature pages follow]


 


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IN WITNESS
WHEREOF, the parties hereto have executed this Amendment by their respective
duly authorized officers as of the date first above written.


 


 


	
   

  	
   

  	
  WESTAFF (USA), INC.,

  
	
   

  	
   

  	
  a California corporation,

  
	
   

  	
   

  	
  as the Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Christa C. Leonard

  
	
   

  	
   

  	
   

  	
  Christa C. Leonard

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WESTAFF, INC.,

  
	
   

  	
   

  	
  a Delaware corporation,

  
	
   

  	
   

  	
  as the Parent Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Christa C. Leonard

  
	
   

  	
   

  	
   

  	
  Christa C. Leonard

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  



 


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  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
   

  	
  as the Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Suzanne E. Geiger

  
	
   

  	
   

  	
   

  	
  Suzanne E. Geiger

  
	
   

  	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Suzanne E. Geiger

  
	
   

  	
   

  	
   

  	
  Suzanne E. Geiger

  
	
   

  	
   

  	
   

  	
  Senior Vice President

  



 


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  WELLS FARGO BANK,

  
	
   

  	
   

  	
  NATIONAL ASSOCIATION,

  
	
   

  	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Supremna Thurmond

  
	
   

  	
   

  	
   

  	
  Supremna Thurmond

  
	
   

  	
   

  	
   

  	
  Relationship Manager

  



 


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