**Exhibit 10.8.20.5**

 

***EXECUTION COPY***

 

**FIFTH AMENDMENT**

**TO**

**MULTICURRENCY CREDIT AGREEMENT**

**AND CONSENT OF GUARANTORS**

 

This **FIFTH AMENDMENT TO MULTICURRENCYCREDIT AGREEMENT AND CONSENT OF GUARANTORS**(this “Amendment”)is dated as of July 31, 2004, and entered into by and among**WESTAFF, INC.**, a Delaware corporation (“Parent”),**WESTAFF (USA), INC.,**a Californiacorporation (“US Borrower”), **WESTAFF(U.K.) LIMITED,**a limited liability company incorporated under thelaws of England and Wales (“UK Borrower”), **WESTAFF SUPPORT, INC.,** a California corporation (“TermBorrower”, and together with US Borrower and UK Borrower, the “Borrowers”),the financial institutions signatory hereto that are parties as Lenders to theCredit Agreement referred to below (the “Lenders”), and **GENERAL ELECTRIC CAPITAL CORPORATION**, asagent for the US Revolving Lenders, the Term Lenders and the UK RevolvingLenders (as defined in the Credit Agreement referred to below).

 

**Recitals**

 

***Whereas****,* the Parent, the Borrowers, the Lendersand Agents have entered into that certain Multicurrency Credit Agreement datedas of May 17, 2002 (as amended by that certain First Amendment to MulticurrencyCredit Agreement, Limited Waivers and Consent of Guarantors, dated as ofOctober 31, 2002, as further amended by that certain Second Amendment toMulticurrency Credit Agreement, Limited Waivers and Consent of Guarantors,dated as of June 13, 2003, that certain Third Amendment to MulticurrencyCredit Agreement, Limited Waivers and Consent of Guarantors, dated as of September 3,2003, and that certain Fourth Amendment to Multicurrency Credit Agreement,Limited Waivers and Consent of Guarantors, dated as of February 20, 2004,and as further modified by certain consents and waivers of the Lenders, the “CreditAgreement”; capitalized terms used in this Amendment without definitionshall have the meanings given such terms in the Credit Agreement); and

 

***Whereas***,the Borrowers have requested that the Lenders agree to amend certain provisionsof the Loan Documents; and

 

***Whereas***,the Requisite Lenders are willing to approve certain amendments requested bythe Borrowers on the terms and conditions set forth in this Amendment (whichAmendment shall be effective as of the date that all conditions to sucheffectiveness set forth herein have been satisfied).

 

***Now, therefore,***inconsideration of the premises and the mutual agreements set forth herein, theParent, the Borrowers, the Lenders, and Agents agree as follows:

 

----

 

# 1.**             AMENDMENTSTO CREDIT AGREEMENT**.  Subject to theconditions and upon the terms set forth in this Amendment, the Credit Agreementis hereby amended as follows:

#  

## 1.1           ***Amendment to Section 1.5(a)of the Credit Agreement.*** Section 1.5(a) of the Credit Agreement is hereby amended todelete all paragraphs but the first paragraph of such Section, including thegrid contained therein,  and to replacethem with the following:

##  

“As of the Fifth 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 (upor down) prospectively on a quarterly basis as determined by Borrowers’consolidated financial performance, commencing with the first day of the firstcalendar month that occurs more than 5 days after delivery of Borrowers’quarterly Financial Statements to Lenders for the Fiscal Quarter ending inOctober, 2004.  Adjustments inApplicable Margins shall be determined by reference to the following grids**:**

 
| **If  Trailing 13-Fiscal Period  EBITDA IS:** |   | **Level of  Applicable Margins:** |   |
|----------------------------------------------------|--------|-----------------------------------|--------|
| > $12.5 million                                 |   | Level I                           |   |
| < $12.5 million, and > $8.8 million          |   | Level II                          |   |
| < $8.8 million                                  |   | Level III                         |   |

 
|                             |   | **Applicable  Margins** |   |
|----------------------------------|--------|-------------------------|--------|
|                             |   | **Level I**             |   | **Level II** |   | **Level III** |   |
| Applicable Revolver Index Margin |   | 0.00                    | %      | 0.25 | % | 0.50 | % |
| Applicable Revolver LIBOR Margin |   | 2.25                    | %      | 2.50 | % | 2.75 | % |
| Applicable L/C Margin            |   | 2.25                    | %      | 2.50 | % | 2.75 | % |

 

All adjustments in the Applicable Marginsafter October 2004 shall be implemented quarterly on a prospective basisbased on the EBITDA (adjusted in accordance with the Fourth Amendment and FifthAmendments) for Parent and its Subsidiaries on a consolidated basis for the 13Fiscal Periods then ended, for each calendar month commencing at least 5 daysafter the date of delivery to Lenders of the quarterly unaudited FinancialStatements evidencing the need for an adjustment.  Concurrently with the delivery of those Financial Statements,Borrower Representative

 

2

----

 

shall deliver to Agents and Lenders a certificate, signed by aFinancial Officer, setting forth in reasonable detail the basis for thecontinuance of, or any change in, the Applicable Margins.  Borrowers hereby agree, that if at any timeafter receipt by the Applicable Agent of any audited Financial Statementsrequired to be delivered hereunder, the Applicable Agent determines in its solediscretion that an unjustified reduction in the Applicable Margin has beengranted to Borrowers, Borrowers shall pay upon demand therefore an amount equalto the difference between (i) the interest amount that should have been paid byBorrowers for such period but for such unjustified reduction in the ApplicableMargin and (ii) the interest amount actually paid by Borrowers for such period.** **Failureto timely deliver any Financial Statements required in this Section 1.5(a)shall, in addition to any other remedy provided for in this Agreement, resultin an increase in the Applicable Margins to the highest level set forth in theforegoing grid, until the first day of the first calendar month following thedelivery of those Financial Statements demonstrating that such an increase isnot required.  If a Default or Event ofDefault has occurred and is continuing at the time any reduction in theApplicable Margins is to be implemented, that reduction shall be deferred untilthe first day of the first calendar month following the date on which suchDefault or Event of Default is waived or cured.”

 

## 1.2           ***Amendments to Section 1.6 ofthe Credit Agreement***.  Section 1.6of the Credit Agreement is hereby amended as follows:

##  

### (a)   Clause (e) is hereby amended to add the phrase“Other than Revenue Week Accounts,” at the beginning of such clause;

###  

### (b)   Clause (h) is hereby amended to add the following provisoat the end of such clause:  “providedthat up to $2,500,000 of Accounts from state, county or municipal GovernmentalAuthorities or departments, agencies or instrumentalities thereof may beEligible Accounts without compliance with applicable state, county or municipallaws relating to assignments of claims”; and

###  

### (c)   Clause (s) is hereby deleted.

###  

## 1.3           ***Amendments to Section 1.8(c) ofthe Credit Agreement. ***Section 1.8(c)of the Credit Agreement is hereby amended to delete the next to the lastsentence and to replace it with the following:

##  

## As used herein, the term “Applicable Percentage” shall mean (v)  three percent (3.0%), in the case of aprepayment on or prior to the first anniversary of the Closing Date, (w) twopercent (2.0%), in the case of a prepayment after the first anniversary of theClosing Date but on or prior to the second anniversary thereof, (x) one percent(1.0%), in the case of a prepayment after the second anniversary of the ClosingDate but on or prior to the third anniversary thereof, (y) one half of onepercent (0.5%) in the case of a prepayment after the third anniversary of theClosing Date but on or prior to the fourth anniversary thereof, and (z) zeropercent (0%) from and after the fourth anniversary of the Closing Date,provided however, that the Applicable Percentage shall be zero in the eventsuch

 

3

----

 

## prepayment is made as a result of a Change of Control occurring afterthe third anniversary of the Closing Date.

##  

## 1.4           ***Amendment to Section 1.13of the Credit Agreement is amended to delete the word “three” in the next tothe last sentence and to replace it with “two”***

##  

## 1.5           ***Amendments to Annex A (Definitions)of the Credit Agreement. ***AnnexA to the Credit Agreement is hereby amended to amend and/ to or add thefollowing definitions as set forth below:

##  

### (a)   the following definitions in Annex A to theCredit Agreement are each hereby amended and restated in their entirety to readas follows:

###  

“Availability Reserve” means zero.

 

“EBITDA” means with respect to any Person for any fiscal period,without duplication, an amount equal to (a) consolidated net income of suchPerson for such period determined in accordance with GAAP, minus (b) the sum of(i) income tax credits, (ii) interest income, (iii) gain from extraordinaryitems for such period, (iv) any aggregate net gain (but not any aggregate netloss) during such period arising from the sale, exchange or other dispositionof capital assets by such Person (including any fixed assets, whether tangibleor intangible, all inventory sold in conjunction with the disposition of fixedassets and all securities), (v) any other non-cash gains that have been addedin determining consolidated net income, in each case to the extent included inthe calculation of consolidated net income of such Person for such period inaccordance with GAAP, and (vi) gains from foreign currency exchangeadjustments, but without duplication, plus (c) the sum of (i) any provision forincome taxes, (ii) Interest Expense, (iii) loss from extraordinary items forsuch period, (iv) depreciation and amortization for such period, (v) amortizeddebt discount for such period, (vi) the amount of any deduction to consolidatednet income as the result of any grant to any members of the management oremployees of such Person of any Stock, in each case to the extent included inthe calculation of consolidated net income of such Person for such period inaccordance with GAAP, (vii) losses from foreign currency exchange adjustments,(viii) write-down of good will, but without duplication and (ix) withoutduplication, premium or other expenses up to $2.5 million related to closingthe Alternative Collateral Transaction for policy years 1992

 

4

----

 

through 2004, provided that the form and substance of the transactionis satisfactory to Lenders.** **For purposes of this definition,the following items shall be excluded in determining consolidated net income ofa Person without duplication: (1) the income (or deficit) of any other Personaccrued prior to the date it became a Subsidiary of, or was merged orconsolidated into, such Person or any of such Person’s Subsidiaries; (2) theincome (or deficit) of any other Person (other than a Subsidiary) in which suchPerson has an ownership interest, except to the extent any such income hasactually been received by such Person in the form of cash dividends ordistributions; (3) the undistributed earnings of any Subsidiary of such Personto the extent that the declaration or payment of dividends or similardistributions by such Subsidiary is not at the time permitted by the terms ofany contractual obligation or requirement of law applicable to such Subsidiary;(4) any restoration to income of any contingency reserve, except to the extentthat provision for such reserve was made out of income accrued during suchperiod; (5) any write-up of any asset; (6) any net gain from the collection ofthe proceeds of life insurance policies; (7) any net gain arising from the acquisitionof any securities, or the extinguishment, under GAAP, of any Indebtedness, ofsuch Person, (8) in the case of a successor to such Person by consolidation ormerger or as a transferee of its assets, any earnings of such successor priorto such consolidation, merger or transfer of assets, (9) any deferred creditrepresenting the excess of equity in any Subsidiary of such Person at the dateof acquisition of such Subsidiary over the cost to such Person of theinvestment in such Subsidiary and (10) subsequent to closing the AlternativeCollateral Transaction, the income or expense charge required under generallyaccepted accounting principles to increase or decrease the reserves forworkers’ compensation incurred claim losses relating to fiscal years 1992 through2004, however, only to the extent such charges arise from periodic adjustmentssupported by actuarial review (excluding recurring monthly accruals) and onlyto the extent that such charges do not and will not result in any current orfuture cash outlays by any Credit Party or any of its Subsidiaries.

 

“Revenue Week Account’ means an Account for which the serviceshave been performed and accepted by the customer (as evidenced by an approvedtime card) but for which an invoice has not been issued;

 

5

----

 

provided that eachRevenue Week Account shall cease to be an Eligible Account upon the earlier of(x) seven (7) days after the receipt of the approved time card or (y) issuanceof an invoice for such Account.”

 

“‘UK Borrowing Base’ means, as of any date of determination byUK Agent, from time to time, an amount equal to (a) up to 85% of the book valueof UK Borrower’s Eligible Accounts (other than Revenue Week Accounts) in PoundsSterling; plus (b) the lesser of (i) up to 50% of the book value of UKBorrower’s Revenue Week Accounts and (ii) the Pound Sterling Equivalent of$500,000; less (c) any Reserves established by UK Agent at such time.”

 

“‘US Borrowing Base’ means, as of any date of determination byUS Agent, from time to time, an amount equal to (a) up to 85% of the book valueof US Borrower’s Eligible Accounts (other than Revenue Week Accounts); plusthe lesser of (i) up to 50% of the book value of US Borrower’s Revenue WeekAccounts and (ii) $5,000,000**;**less(b) any Reserves established by US Agent at such time.”

 

### (b)   the following new definitions are hereby added to AnnexA to the Credit Agreement in the proper alphabetical order, whichdefinitions shall read as follows:

###  

“Alternative Collateral Transaction” means a transaction involving therestructuring of the existing workers compensation collateral program forParent and its Subsidiaries, in form and substance satisfactory to Lenders andpursuant to documentation satisfactory to Lenders.

 

“‘Fifth Amendment’ means the Fifth Amendment to MulticurrencyCredit Agreement and Consent of Guarantors, dated as ofJuly       , 2004, among the Parent, theBorrowers, the Lenders and Agents.”

 

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

 

## 1.6           Amendmentsto Annex E (Financial Statements and Projections – Reporting), AnnexF (Collateral Reports), and Annex G (Financial Covenants) to theCredit Agreement.

 

6

----

 

### (a)   AnnexE (Financial Statements and Projections – Reporting) to the CreditAgreement is amended to delete Paragraph (o) in its entirety.

###  

### (b)   AnnexF (Collateral Reports) to the Credit Agreement is amended to delete Paragraph(b) in its entirety and to replace it with the following:

###  

“To the Applicable Agent, upon the request of the Applicable Agent andin any event on the first Business Day of each week (together with a copy ofall or any part of the following report requested by any Lender in writingafter the Closing Date**),**acollateral report with respect to the Accounts of the US Borrowers and the UKBorrower, identifying the balance of all Accounts (other than Revenue WeekAccounts) and the balance of all Revenue Week Accounts, and reflecting allcollections of Accounts, in each case accompanied by such supporting detail anddocumentation as shall be requested by the Applicable Agent in its reasonablediscretion, each of which shall be prepared by the Applicable Borrower as of theend of the immediately preceding week;”

 

### (c)   Annex G (Financial Covenants) to the CreditAgreement is hereby amended as follows:

###  

(a)* *Paragraph (a) (Maximum CapitalExpenditures) of**Annex G of theCredit Agreement is hereby amended to increase the maximum Capital Expenditurespermitted thereunder with respect to Fiscal Year 2004 from $2,500,000 to$5,000,000;

 

### (b)** **Paragraph (c) (Minimum EBITDA) of such Annex Gis amended and restated****in itsentirety to read as follows:

###  

“(c)         Minimum EBITDA  Parent and its Subsidiaries on aconsolidated basis shall have at the end of each Fiscal Period set forth below,

 

(i)**  **EBITDA for the 13 Fiscal Periodsthen ended of not less than the amount set forth below for such period:

 

7

----

 
| **PERIOD**      |   | **FISCAL  PERIOD  ENDING** |   | **MINIMUM  EBITDA** |       |
|-----------------|--------|----------------------------|--------|---------------------|------------|
| Period 9, 2004  |   | 7/10/2004                  |   | $                   | 9,000,000  |   |
| Period 10, 2004 |   | 8/7/2004                   |   | $                   | 9,000,000  |   |
| Period 11, 2004 |   | 9/4/2004                   |   | $                   | 8,800,000  |   |
| Period 12, 2004 |   | 10/2/2004                  |   | $                   | 8,300,000  |   |
| Period 13, 2004 |   | 10/30/2004                 |   | $                   | 8,200,000  |   |
| Period 1, 2005  |   | 11/27/2004                 |   | $                   | 8,000,000  |   |
| Period 2, 2005  |   | 12/25/2004                 |   | $                   | 7,900,000  |   |
| Period 3, 2005  |   | 1/22/2005                  |   | $                   | 8,200,000  |   |
| Period 4, 2005  |   | 2/19/2005                  |   | $                   | 8,300,000  |   |
| Period 5, 2005  |   | 3/19/2005                  |   | $                   | 8,500,000  |   |
| Period 6, 2005  |   | 4/16/2005                  |   | $                   | 9,000,000  |   |
| Period 7, 2005  |   | 5/14/2005                  |   | $                   | 8,900,000  |   |
| Period 8, 2005  |   | 6/11/2005                  |   | $                   | 8,800,000  |   |
| Period 9, 2005  |   | 7/9/2005                   |   | $                   | 9,200,000  |   |
| Period 10, 2005 |   | 8/6/2005                   |   | $                   | 9,800,000  |   |
| Period 11, 2005 |   | 9/3/2005                   |   | $                   | 10,500,000 |   |
| Period 12, 2005 |   | 10/1/2005                  |   | $                   | 11,200,000 |   |

 

(ii) at the end of each Fiscal Quarter set forth below, EBITDA for the13 Fiscal Periods then ended of not less than the amount set forth below forsuch period:

 
| **FISCAL QUARTER  ENDING** |   | **MINIMUM  EBITDA** |       |
|----------------------------|--------|---------------------|------------|
| 10/29/2005                 |   | $                   | 11,900,000 |   |
| 1/21/2006                  |   | $                   | 12,000,000 |   |
| 4/15/2006                  |   | $                   | 12,000,000 |   |
| 7/8/2006                   |   | $                   | 12,000,000 |   |
| 10/28/2006                 |   | $                   | 14,000,000 |   |

 

8

----

 

(iii) at the end of each Fiscal Quarter after October 28, 2006,EBITDA for the 13 Fiscal Periods then ended of not less than $14,000,000

 

and (c) to delete Paragraph (d) (Minimum Domestic EBITDA) ofsuch Annex G in its entirety.

 

## 1.7           ***Amendments to Exhibit 1.1(a)(i)(Combined Notice of Revolving Credit Advance and Collateral Activity Report)and Exhibit 4.1(b) (Borrowing Base Certificate) to the Credit Agreement.***

##  

### (a)   Exhibit 1.1(a)(i) to the Credit Agreement ishereby amended and restated in its entirety by substituting therefore Schedule 1/Exhibit1.1(a)(i)  attached hereto, suchthat Schedule 1/Exhibit 1.1(a)(i) shall be Exhibit 1.1(a)(i)under the Credit Agreement; and

###  

### (b)   Exhibit 4.1(b) to the Credit Agreement ishereby amended and restated in its entirety by substituting therefore Schedule 2/Exhibit4.1(b)  attached hereto, such that Schedule 2/Exhibit4.1(b) shall be Exhibit 4.1(b) under the Credit Agreement.

###  

## 1.8           ***Deletion of Covenant Under FourthAmendment.***  The covenantset forth in Section 4(b) of the Fourth Amendment is hereby deleted andshall have no force and effect.

##  

# 2.             **ONE-TIME ADD-BACK TO EBITDA.  **Subject to the provisions of this Section 2 andthe satisfaction of the other conditions set forth in this Amendment, theLenders hereby agree that, solely for the purpose of determining compliancewith the minimum EBITDA covenants set forth in Paragraphs (c) and (d) of AnnexG (Financial Covenants) to the Credit Agreement, as amended by this Amendment,the Parent and its Subsidiaries may, for the Fiscal Period ended April 17,2004, make a one-time add-back adjustment to EBITDA in the aggregate amount of$480,000 with respect to certain adjustments directly resulting from a quarterend adjustment in the amount of $480,000 to increase workers’ compensationreserves for all periods prior to November 1, 2003.  This add-back is in addition to the add-backto EBITDA set forth in Section 2 of the Fourth Amendment.

#  

# 3.             **REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THEBORROWERS. **The Parent andthe US Borrower, jointly and severally, and UK Borrower, only in respect ofitself, severally, make the following representations and warranties to eachLender and each Agent with respect to all Credit Parties:

#  

## 3.1                           ***Power and Authority***.*** ***Each of the Credit Parties has all corporate or otherorganizational power and authority to enter into this Amendment and, asapplicable, the Consent of Guarantors attached hereto (the “Consent”),and to carry out the transactions contemplated by, and to perform itsobligations under or in respect of, the Credit Agreement, as amended hereby.

 

9

----

 

## 3.2                           ***Due Authorization,Non-Contravention. ***Theexecution, delivery and performance by each Credit Party of this Amendment andthe Consent, as applicable, and the performance of the obligations of eachCredit Party under or in respect of the Credit Agreement as amended hereby (a)have been duly authorized by all necessary corporate, limited liability companyor partnership action, (b) do not contravene any provision of such Person’scharter, bylaws or partnership or operating agreement, as applicable, (c) donot violate any law or regulation or any order or decree of any court orGovernmental Authority of the United States or the United Kingdom or, in eachcase, any political subdivision thereof, (d) do not conflict with or result inthe breach or termination of, constitute a default under or accelerate orpermit the acceleration of any performance required by, any indenture,mortgage, deed of trust, lease, agreement or other instrument to which suchPerson 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 notreasonably be expected to have a Material Adverse Effect, and (e) do not resultin the creation or imposition of any Lien on any of the property of suchPerson.

##  

## 3.3                           ***Execution, Delivery andEnforceability***.*** ***This Amendmentand the Consent have been duly executed and delivered by each Credit Partywhich is a party thereto and this Amendment, the Consent and the CreditAgreement as amended hereby constitute the legal, valid and binding obligationsof such Credit Party, enforceable in accordance with their terms, except asenforceability may be limited by Insolvency Laws or similar laws affectingcreditors’ rights generally or by general equitable principles.

##  

## 3.4                           ***No Default or Event of Default***.*** ***No event has occurred and is continuing after givingeffect to this Amendment or will result from the execution and delivery of thisAmendment or the Consent that would constitute a Default or an Event of Default.

##  

## 3.5                           ***Representations and Warranties***.*** ***After giving effect to this Amendment, each of therepresentations and warranties contained in the Loan Documents is and will betrue and correct in all material respects on and as of the date hereof and asof the effective date of this Amendment, except to the extent that suchrepresentations and warranties specifically relate to an earlier date, in whichcase they were true, correct and complete in all material respects as of suchearlier date.

##  

# 4.             **CONDITIONS TO EFFECTIVENESS OF THIS AMENDMENT. **This Amendment shall be effectiveonly if and when (i) signed by, and when counterparts hereof shall have beendelivered to the US Agent (by hand delivery, mail or telecopy) by, the Parent,the Borrowers and the Requisite Lenders; (ii) each Guarantor shall havedelivered to the US Agent executed counterparts of the Consent; (iii) Borrowersshall have delivered to the US Agent a certificate certifying that thecharters, bylaws (or other similar organizational document) and resolutionsauthorizing the execution, delivery and performance by the Credit Parties oftheir obligations under the Credit Agreement, each in the form delivered to theAgents on the Closing Date, are in full force and effect and have not beenamended, 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 ofthe board of directors from six to five); that no other resolutions have beenadopted with respect to this Amendment and that no further authorization orconsent is required to be obtained with respect to the execution, delivery andperformance of this

 

10

----

 

# Amendment, theConsent and the Credit Agreement as amended hereby; and an incumbencycertificate for each Credit Party; and (iv) the US Agent, for the ratablebenefit of the Lenders, shall have received payment by the Borrowers of anon-refundable fee equal to $50,000.

#  

# 5.**             EFFECTOF AMENDMENT; RATIFICATION.**  This Amendmentis a Loan Document.  From and after thedate on which this Amendment becomes effective, all references in the LoanDocuments to the Credit Agreement shall mean the Credit Agreement as amendedhereby.  Except as expressly amended orwaived hereby, the Credit Agreement and the other Loan Documents, including theLiens granted thereunder, shall remain in full force and effect, and all termsand provisions thereof are hereby ratified and confirmed.  Each of the Parent and each Borrowerconfirms that, as amended hereby, each of the Loan Documents is in full forceand effect.

#  

# 6.**             RELEASEAND WAIVER OF CLAIMS, DEFENSES AND RIGHTS OF SET OFF.**  Each of the Parent and the Borrowersacknowledges that the US Agent, the UK Agent and the Lenders have performed allobligations and duties owed to the Parent and the Borrowers under the LoanDocuments through the date hereof, and each such party further, acknowledges,represents and warrants that, none of the Parent or the Borrowers has anyclaim, cause of action, defense, or right of set off against the US Agent, theUK Agent or the Lenders, and, to the extent that any such party has any suchrights, each of the Parent and the Borrowers hereby releases, waives, andforever discharges the US Agent, the UK Agent and the Lenders (together witheach of their predecessors, successors and assigns) and each of their officers,directors, employees, agents and representatives from each action, cause ofaction, suit, debt, defense, right of set off, or other claim whatsoever, in lawor in equity, known or unknown against the US Agent, the UK Agent or theLenders, or such officers, employees, agents or representatives.  Each of the Parent and each Borrower herebyspecifically waives as against the US Agent, the UK Agent or the Lenders anyrights they or any of them may have under Section 1542 of the CaliforniaCivil Code, which provides as follows: “A general release does not extend to claims which the creditor does notknow or suspect to exist in his favor at the time of executing the release,which if known by him must have materially affected his settlement with thedebtor.”

#  

# 7.**             APPLICABLELAW. **THIS AMENDMENT SHALL BEGOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWSAND DECISIONS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE ANDPERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES.

#  

# 8.**             COMPLETEAGREEMENT. **This Amendment setsforth the complete agreement of the parties in respect of any amendment to anyof the provisions of any Loan Document. The execution, delivery and effectiveness of this Amendment do notconstitute a waiver of any Default or Event of Default, amend or modify anyprovision of any Loan Document except as expressly set forth herein orconstitute a course of dealing or any other basis for altering the Obligationsof any Credit Party.

#  

# 9.**             CAPTIONS;COUNTERPARTS. **The catchlines andcaptions herein are intended solely for convenience of reference and shall notbe used to interpret or construe the

 

11

----

 

# provisionshereof. This Amendment may be executed by one or more of the parties to thisAmendment on any number of separate counterparts (including by telecopy), allof which taken together shall constitute but one and the same instrument.

 

12

----

 

**IN WITNESS WHEREOF**,each of the undersigned has duly executed this Fifth Amendment to MulticurrencyCredit Agreement 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/ Dwight S. Pedersen |   |
|   | Name:                                                                                   | Dwight S. Pedersen |
|   | 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 |
|        |                                                                                         |  |  |  |  |  |  |  |  |

 

S-1

----

 

The following Person is a signatory to this Fifth Amendment toMulticurrency Credit Agreement and Consent of Guarantors in its capacity as aCredit Party and not as a Borrower.

 
|   | **WESTAFF, INC.** |
|--------|-------------------|
|   |              |
|   | By:               | /s/ Dirk A. Sodestrom |   |
|   | Name:             | Dirk A.  Sodestrom |
|   | Title:            | Senior Vice President and Chief Financial  Officer |
|        |                   |  |  |  |

 

S-1

----

 

**CONSENT OF GUARANTORS**

 

Each of the undersigned is a Guarantor of the Obligations of theBorrowers under the Credit Agreement and each other Loan Document (including USBorrower and Term Borrower in its capacity as a Guarantor of the Obligations ofthe other Borrowers) and hereby (a) consents to the foregoing Amendment, (b)acknowledges that notwithstanding the execution and delivery of the foregoingAmendment, the obligations of each of the undersigned Guarantors are notimpaired or affected and the Parent Guaranty, the Subsidiary Guaranty, and thecross-guaranty contained in the Credit Agreement continue in full force andeffect, and (c) ratifies the Parent Guaranty, the Subsidiary Guaranty or thecross-guaranty contained in the Credit Agreement, as applicable, and each ofthe Loan Documents to which it is a party and further ratifies the Liensgranted by it to any Agent for its benefit and the benefit of the Lenders.

 

*[signatures following; remainder of pageintentionally left blank]*

 

Consent -1

----

 

IN WITNESS WHEREOF, each of the undersignedhas executed and delivered this CONSENT OF GUARANTORS as of the date first setforth 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/ Gary A. Kittleson |   |
|   | Name:                               | Gary Kittleson |
|   | Title:                              |  Executive Vice President, Chief  Financial Officer and Secretary |
|   |                                |
|   |                                |
|   | **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 |
|        |                                     |  |  |  |  |  |

 

Consent Signatures - 1

----

 
|   | **MEDIAWORLD INTERNATIONAL** |
|--------|------------------------------|
|   |                         |
|   |                         |
|   | By:                          | /s/ Dirk A. Sodestrom |   |
|   | Name:                        | Dirk A. Sodestrom |
|   | Title:                       | Senior Vice President and Chief  Financial Officer |
|        |                              |  |  |  |

 

Consent Signatures - 2

----

 

**Schedule 1/Exhibit 1.1(a)(i)**

 

[see attached]

 

----

 

Exhibit 1.1(a)(i)

**Westaff (USA), Inc.**

 

**Combined Notice of Revolving Credit Advanceand Collateral Activity Report - (A/R Only Rollforward)**

 

*Capitalized terms used herein which aredefined in the Credit Agreement dated as of 5-17-02 shall have the meaningstherein defined.  The undersigned herebycertifies that on the date hereof and on the borrowing date set forth below,and after giving effect to the Advances requested hereby: (i) there exists andthere shall exist no Default or Event of Default under the Credit Agreement;(ii) the proceeds of the Revolving Credit Advances will be used in accordancewith Section 1.4  of the CreditAgreement; and (iii) each of the representations and warranties contained inthe Credit Agreement and the other Loan Documents is true and correct in allmaterial respects.*

 
| **Client and Address**                                                                                                                                                                                   |    |                                             |                                               | **Name of Contact**           |   |           | Phone       |    |   |          |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|--------------------------------------------------|----------------------------------------------------|-------------------------------|--------|----------------|-------------|---------|--------|---------------|
|                                                                                                                                                                                                     |    |                                             |                                               |                          | Phone  |           |        |    |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           | Phone       |    |   |          |
| Request  Date                                                                                                                                                                                            |    |                                             |                                               | LIBOR  Loan Amount            |   |           |        | Fax     |   |          |   |
| Current  Index Rate Loan Request                                                                                                                                                                         |    |                                             |                                               |                          |   | LIBOR  Period: |        |    |   |          |   |   |   |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **Wire  Information**                                                                                                                                                                                    |    | US  Bank                                         |                                               | Bank  of America              |   |           |        |    |   |          |   |
| **Address**                                                                                                                                                                                              |    | 2890 North Main Street                           |                                               | 345 Montgomery Street         |   |           |        |    |   |          |   |
|                                                                                                                                                                                                     |    | Walnut Creek, CA 94596                           |                                               | San Francisco, CA  94104 |   |           |        |    |   |          |   |
| **Account  Name**                                                                                                                                                                                        |    | Westaff USA, Inc                                 |                                               | Westaff USA, Inc              |   |           |        |    |   |          |   |
| **ABA#**                                                                                                                                                                                                 |    | 091 000 022                                      |                                               | 121 000 358                   |   |           |        |    |   |          |   |
| **Acct#**                                                                                                                                                                                                |    | 1534  906 00159                                  |                                               | 14990 13019                   |   |           |        |    |   |          |   |
| **Wire Amount**                                                                                                                                                                                          |    |                                             | **$****0.00**                                      |                          |   |           | **$0.00**   |    |   |          |   |   |   |   |   |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **Bank  Contact**                                                                                                                                                                                        |    | Scott Smith (925) 942-9484                       |                                               | Nancy Tully (714) 850-6589    |   |           |        |    |   |          |   |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **Collateral Availability  Information**                                                                                                                                                                 |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| A/R Aging Balance                                                                                                                                                                                        |    | from  AR Aging dated                             |                                               |                          |   |           | $           |    |   |          |   |   |
| Ineligible Accounts                                                                                                                                                                                      |    | from  Borrowing Base Cert for P/E                |                                               |                          |   |           | $           |    |   |          |   |   |
| **Eligible Aging Balance**                                                                                                                                                                               |    |                                             |                                               |                          |   |           | #VALUE!     |    |   |          |   |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **Current Week Activity**                                                                                                                                                                                |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **Beginning AR Balance**                                                                                                                                                                                 |    | from previous request dated                      |                                               |                          | +      |           | $           | —  |   |          |   |   |
| Plus: Sales                                                                                                                                                                                              |    | Information recorded on                |                                               |                          | +      |           | $           | —  |   |          |   |   |
| Minus: Cash Receipts Applied                                                                                                                                                                             |    |                                             |                                               |                          | -      |           | $           | —  |   |          |   |   |
| Minus: Credit Memos                                                                                                                                                                                      |    |                                             |                                               |                          | -      |           | $           | —  |   |          |   |   |
| Minus: Discounts                                                                                                                                                                                         |    |                                             |                                               |                          | -      |           | $           | —  |   |          |   |   |
| Plus/Minus: Other Debits/Credits                                                                                                                                                                         |    |                                             |                                               |                          | +/-    |           | $           | —  |   |          |   |   |
| Explanation                                                                                                                                                                                              |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **Ending Net Current AR Activity**                                                                                                                                                                       |    |                                             |                                               |                          |   |           | $           | —  |   |          |   |   |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **Current A/R Balance**                                                                                                                                                                                  |    |                                             |                                               |                          |   |           | **#VALUE!** |    |   |          |   |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **Available A/R Aging Advance rate**                                                                                                                                                                     |    |                                             |                                               | 85%                           |   |           |        |    |   | #VALUE!       |   |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **Revenue Week**                                                                                                                                                                                         |    |                                             |                                               |                          |   |           | $           |    |   |          |   |   |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           | $           |    |   |          |   |   |
| **Beginning Net Current Activity**                                                                                                                                                                       |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| Plus: Estimated Sales                                                                                                                                                                                    |    |                                             |                                               |                          | +      |           | $           | —  |   |          |   |   |
| Minus: Current billing                                                                                                                                                                                   |    |                                             |                                               |                          | -      |           | $           | —  |   |          |   |   |
| **Ending Net Current Week Activity**                                                                                                                                                                     |    |                                             |                                               |                          |   |           | $           | —  |   |          |   |   |
| **Net Current Revenue Week Balance**                                                                                                                                                                     |    |                                             |                                               |                          |   |           | **#VALUE!** |    |   |          |   |
| **Revenue Week Advance rate**                                                                                                                                                                            |    | Lesser  of 50% of net revenue week or $5,000,000 |                                               | 50%                           |   |           |        |    |   | $             |   |   |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **Total Available**                                                                                                                                                                                      |    | Lesser  of total available or $50,000,000        |                                               |                          |   |           |        |    |   | #VALUE!       |   |
| Less: Revolver                                                                                                                                                                                           |    |                                             |                                               |                          |   |           |        | -       |   | $             |   |   |
| Less: LIBOR Outstanding                                                                                                                                                                                  |    |                                             |                                               |                          |   |           |        | -       |   | $             |   |   |
| Less: Outstanding Letters of Credit                                                                                                                                                                      |    |                                             |                                               |                          |   |           |        | -       |   | $             |   |   |
| Less: Reserves                                                                                                                                                                                           |    | $                                                | —                                             |                          |   |           |        |    | -      |          | $ | — |   |
| (                         )                                                 |    |                                             |                                               |                          |   |           |        | -       |   | $             | — |   |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **Excess Availability**                                                                                                                                                                                  |    |                                             |                                               |                          |   |           |        |    |   | #VALUE!       |   |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **Loan Balance**                                                                                                                                                                                         |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| Revolver Balance                                                                                                                                                                                         |    | Line  H Last Request Dated                       |                                               |                          |   |           | $           |    |   |          |   |   |
| Minus: Deposit Sweep From Last to Current Request                                                                                                                                                        |    |                                             | -                                                  |                          | $      | —         |        |    |   |          |
| Plus: Current Amount Requested (From Above)                                                                                                                                                              |    |                                             | +                                                  |                          | $      | —         |        |    |   |          |
| Plus: Interest/Other (From MM/DD/YY to MM/DD/YY)                                                                                                                                                         |    |                                             | +                                                  |                          | $      | —         |        |    |   |          |
| Minus: Other(From MM/DD/YY to MM/DD/YY)                                                                                                                                                                  |    |                                             | -                                                  |                          | $      | —         |        |    |   |          |
| Revolver  Balance After Advance                                                                                                                                                                          |    |                                             |                                               |                          |   |           |        | #VALUE! |   |
| *Westaff (USA), Inc. has caused this Request to be executed  by its duly authorized officer as of the date and year first written above.*                                                                |    |                                             |                                               |                          |
| Westaff  (USA), Inc. certifies that the Advance herein requested is for the separate  accounts of the following Borrowers in the following respective amount by  11:30 am PST:  Westaff (USA), Inc. |    |                                             | $                                                  | —                        |   |           |        |    |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **Authorizations**                                                                                                                                                                                       |    | Christa Leonard                                  |                                               |                          |   |           | Phone       |    |   | Treasury  Fax |   |
|   Requested by:                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
|                                                                                                                                                                                                     |    | Duly Authorized Signatory                        |                                               |                          |   |           |        |    |   |
| 68411.2                                                                                                                                                                                                  |    |                                             |                                               |                          |   |           |        |    |   |          |   |
|                                                                                                                                                                                                     | Fax to: |                                             | Meri  Yermakov at GE Capital  (312) 463-3854; | Phone:  (312) 441-7542   |   |           |        |    |   |          |   |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| **FOR WESTAFF PURPOSES ONLY**                                                                                                                                                                            |
|                                                                                                                                                                                                     |    |                                             |                                               |                          |   |           |        |    |   |          |   |
| Prepared By:                                                                                                                                                                                             |    |                                             | Reviewed  By:                                      |                          |   |           |        |    |   |          |   |   |   |
|                                                                                                                                                                                                          |         |                                                  |                                                    |                               |        |                |             |         |        |               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

----

 

**Schedule 2/Exhibit 4.1(b)**

 

[see attached]

 

----

 

***WestaffUSA,  Inc.***

 

**PERIOD-END COLLATERALREPORT AND BORROWING CERTIFICATE**

 
|   |   |   |   | Period-Ending: |   | XXXX    |   |
|--------|--------|--------|--------|----------------|--------|---------|--------|
|   |   |   |   | Report #:      |   | 1       |   |
|   |   |   |   | Report Date:   |   | #VALUE! |   |

 

**REVOLVINGFACILITY**

 
|                                                                                       |   |                      |   |   |   |    |   | **Consolidated** |        |
|--------------------------------------------------------------------------------------------|--------|---------------------------|--------|--------|--------|---------|--------|------------------|-------------|
| **ELIGIBLE ACCOUNTS**                                                                      |   |                      |   |   |   |    |   |             |        |
|                                                                                       |   |                      |   | As of: |   |    |   |             |        |
| 1.) A/R Aging Balance as of the Period End                                                 |   |                      |   | XXXX   |   |    |   | $                | XXXX        |   |
| 2.)  LESS:   Ineligible Accounts Receivable (Per Attached  Schedule A) |   |                      |   | XXXX   |   |    |   | $                | —      |   |
| 3.) Eligible Accounts Receivable                                                           |   |                      |   | XXXX   |   |    |   | $                | #VALUE!     |   |
|                                                                                       |   |                      |   |   |   |    |   |             |        |
| **REVENUE WEEK**                                                                           |   |                      |   |   |   |    |   |             |        |
|                                                                                       |   |                      |   |   |   |    |   |             |        |
|                                                                                       |   |                      |   | From:  |   | To:     |   |             |        |
| 4.) ADD:   Revenue Week for  the period to date:                            |   |                      |   | XXXX   |   | #VALUE! |   | XXXX             |        |
|                                                                                       |   |                      |   |   |   |    |   |             |        |
| **BORROWING BASE**                                                                         |   |                      |   |   |   |    |   |             |        |
|                                                                                       |   |                      |   |   |   |    |   |             |        |
| 5.)  ADD:       85%   (of Line  3)       |   |                      |   |   |   |    |   | $                | #VALUE!     |   |
| 6.)  ADD:       50%   (of Line  4)       |   | Not to exceed $5,000,000  |   |   |   | As of:  |   | $                | #VALUE!     |   |
| 7.) Borrowing Base as of the period to  date:                                              |   | Not to exceed $50,000,000 |   |   |   | XXXX    |   | $                | #VALUE!     |   |
|                                                                                       |   |                      |   |   |   |    |   |             |        |
| **BORROWING  AVAILABILITY**                                                                |   |                      |   |   |   | As of:  |   |             |        |
| Index Rate Loan                                                                            |   |                      |   |   |   | XXXX    |   | $                | XXXX        |   |
| LIBOR One Month                                                                            |   |                      |   |   |   | XXXX    |   | $                | XXXX        |   |
| LIBOR Two Month                                                                            |   |                      |   |   |   | XXXX    |   | $                | —      |   |
| LIBOR Three Month                                                                          |   |                      |   |   |   | XXXX    |   | $                |        |   |
| Stand-by L/Cs                                                                              |   |                      |   |   |   | XXXX    |   | $                | XXXX        |   |
| Other  (Specify)        Reserve                    |   |                      |   |   |   | XXXX    |   | $                | XXXX        |   |
| 8.) Total Obligations at Period-end                                                        |   |                      |   |   |   | XXXX    |   | $                | —      |   |
|                                                                                       |   |                      |   |   |   | As of:  |   |             |        |
| 9.) **Borrowing  Availability (Line 8 minus Line 9)**                                      |   |                      |   |   |   | XXXX    |   | **$**            | **#VALUE!** | ** ** |

 

***The undersigned represents and warrants,that as an officer of Westaff (USA), Inc. and not in his or herindividual capacity, as follows:***

**(A)  The informationprovided above and in the accompanying supporting documentation is true,complete and correct, and**

**complies fully with the conditions, terms and covenants ofthe Multicurrency Credit Agreement dated May 17, 2002, among Westaff USA, Inc.,(“Westaff USA”), Westaff (CA), Inc., (“WCA”), Westaff Limited Partnership(“WestLP”, and collectively with Westaff USA and WCA, the “US Borrowers”),Westaff (U.K.) Limited, as UK Borrower, Westaff Support, Inc., as TermBorrower, Westaff Inc., as the Parent, Agent, and the Lenders from time to timeparty thereto (as may be amended, restated, amended and restated, supplemented,replaced or otherwise modified from time to time, the “Credit Agreement”).**

**(B)  Each of therepresentations and warranties contained in the Loan Documents is true andcorrect as of the date hereof, except where such representation and warrantymay otherwise expressly refer to an earlier date, in which case it is true andcorrect of such earlier date.**

**(C)  The calculationsset forth herein are made in accordance with the Credit Agreement, and do notinclude as Eligible Accounts those Accounts which are ineligible pursuant tothe terms of Section 1.6 of the Credit Agreement.**

**(D)  Since the date ofthe last financial statement or certification furnished to the US agent:**

**(i)  No event orcircumstance has occurred that would have a Material Adverse Effect; and**

**(ii) No event which is, or with notice or lapse of time orboth would be, a default under the Credit Agreement**

 

**IN WITNESS WHEREOF, I have signed this Borrowing BaseCertificate as of this XX day of Month, 2004**

 
|   | **Westaff  USA,  Inc.** |                |
|--------|------------------------------|---------------------|
|   |                         |
|   | *   By:*      | *Christa Leonard*   |   |
|   |                         |                |
|   |  Name:                  | Christa  Leonard    |   |
|   |                         |                |
|   | Title:                       | V.P.  and Treasurer |   |
|        |                              |                     |  |  |  |

 

5th Amendment Exh-borrowing certificate

 

----

 

**Westaff USA,  Inc.**

**SCHEDULE A**

**SCHEDULE OF INELIGIBLES**

**FOR THE PERIOD ENDED:**

**XXXX**

 
| **Ineligible Accounts Receivable**              |   | **Domestic** |   |
|-------------------------------------------------|--------|--------------|--------|
|                                            |   |         |   |
| Over 90 days past invoice date                  |   | $            | XXXX   |   |
| 50% Cross Aging                                 |   | $            | XXXX   |   |
| Credit Balances Over 90 days past invoice  date |   | $            | XXXX   |   |
| Foreign Accounts                                |   | $            | — |   |
| Government - Note 1                             |   | $            | XXXX   |   |
| Contra Elimination                              |   | $            | XXXX   |   |
| InterCompany                                    |   | $            | XXXX   |   |
| Datings/Futures                                 |   | $            | — |   |
| Cash/COD’s                                 |   | $            | — |   |
| Bankrupt Accounts                               |   | $            | — |   |
| Concentration excess                            |   | $            | — |   |
| Other (Specify)                       |   | $            | — |   |
|                                            |   |         |   |
| **TOTAL ACCOUNTS  RECEIVABLE INELIGIBLES**      |   |         |   |
| **(To Line #10 of  Borrowing Certificate)**     |   | $            | — |   |

 

----

Note1: Excluded Government accounts include all federal accounts that have notexecuted an assignment of claims and all state, county, city and other localstate government in excess of $2,500,000 of the aggregate of all state accountsthat have not executed an assignment of claims.

 

----

 

***Westaff USA Inc.***

***Detailed AR Reconciliation***

***For Period XX, FY 2004***

 
|                                                               |   | **XX/XX/XX** |       | **Comments**                                                                                                        |                                  |
|--------------------------------------------------------------------|--------|--------------|------------|---------------------------------------------------------------------------------------------------------------------|---------------------------------------|
| **A/R Balance by  Category per the Summary Aging**                 |   | XXXX         |       | See detail e-mailed as GEARpeX-XX.xls                                                                               |                                  |
|                                                               |   |         |       |                                                                                                                |                                  |
| **Reconciling Items**                                              |   |         |       |                                                                                                                |                                  |
| **a)**    Period  X Sales invoiced on XX/XX/XX |   | XXXX         |       | See faxed support denoted as (a)                                                                                    |                                  |
| **Total Reconciling  Items**                                       |   | $            | 0          |                                                                                                                |                                  |   |
|                                                               |   |         |       |                                                                                                                |                                  |
| **Reconciled Balance**                                             |   | $            | 0          |                                                                                                                | See detail e-mailed as GEARpeX-XX.xls |   |
|                                                               |   |         |       |                                                                                                                |                                  |
| **A/R Open Amount  (balance) per the Summary Aging**               |   | #VALUE!      |       | Per BBC Template                                                                                                    |                                  |
| ***Variance***                                                     |   | #VALUE!      |       |                                                                                                                |                                  |
|                                                               |   |         |       |                                                                                                                |                                  |
| **A/R Beginning  Borrowing Base Figure**                           |   | **#VALUE!**  | ** ** |                                                                                                                | ** **                            |
|                                                               |   |         |       |                                                                                                                |                                  |
| **Reconciling Items**                                              |   |         |       |                                                                                                                |                                  |
| **b)**    Revenue  Week                        |   | XXXX         |       | See detail e-mailed as ARRevWeekXXXXXX.xls                                                                          |                                  |
| **c)**    Unapplied  Cash                      |   | XXXX         |       | See detail e-mailed as GEARReconX-XX.xls                                                                            |                                  |
| **d)**    Adjusted  Accrual Revenue Week       |   | XXXX         |       | See faxed support denoted as (d)                                                                                    |                                  |
| **e)**    ”QPX”  Receivables         |   | XXXX         |       | QPX receivables are trade receivables but  are included in “Other Current Assets” for accounting purposes |                                  |
| **f)**    Other                                |   | XXXX         |       | Immaterial                                                                                                          |                                  |
| **Total Reconciling  Items**                                       |   | $            | 0          |                                                                                                                |                                  |   |
|                                                               |   |         |       |                                                                                                                |                                  |
| **Reconciled A/R  Aging Balance**                                  |   | #VALUE!      |       |                                                                                                                |                                  |
|                                                               |   |         |       |                                                                                                                |                                  |
| **General Ledger A/R  Balance - Domestic**                         |   | **XXXX**     |       | See detail e-mailed as ARBBCGLX-XX.xls                                                                              |                                  |
| ***Variance***                                                     |   | #VALUE!      |       |                                                                                                                |                                  |
|                                                               |   |         |       |                                                                                                                |                                  |
| **Reconciling Items**                                              |   |         |       |                                                                                                                |                                  |
| **g)**    Allowance  for doubtful accounts     |   | XXXX         |       | See detail e-mailed as ARBBCGLX-XX.xls                                                                              |                                  |
| **h)**    Foreign  Accounts Receivable         |   | XXXX         |       | See detail e-mailed as ARBBCGLX-XX.xls                                                                              |                                  |
| **Total Recconciling  Items**                                      |   | —       |       |                                                                                                                |                                  |
|                                                               |   |         |       |                                                                                                                |                                  |
| **Aggregated General  Ledger A/R Balance - Consolidated**          |   | —       |       | See detail e-mailed as ARBBCGLX-XX.xls                                                                              |                                  |
|                                                               |   |         |       |                                                                                                                |                                  |
| **A/R Balance per the  Financial Statements**                      |   | **XXXX**     |       | From Financial Statements provided each period                                                                      |                                  |
| ***Variance***                                                     |   | #VALUE!      |       |                                                                                                                |                                  |

 

----

 

***Westaff USA,Inc.***

 

**Consolidated Accounts ReceivableReconciliation**

 
| **As  of  XX/XX/2004 in $000:**           |   | **Domestic  Aging** |   | **Domestic  G/L** |   | **Consolidated  Financials** |   |
|-----------------------------------------------------|--------|---------------------|--------|-------------------|--------|------------------------------|--------|
|                                                |   |                |   |              |   |                         |   |
| Balance per Source Records:                         |   | #VALUE!             |   | XXXX              |   | #VALUE!                      |   |
|                                                |   |                |   |              |   |                         |   |
| Revenue Week                                        |   |                |   | #VALUE!           |   | #VALUE!                      |   |
| Unapplied Cash (DIT)                                |   |                |   | #VALUE!           |   | #VALUE!                      |   |
| Adjustments: Accrual Revenue Week                   |   |                |   | #VALUE!           |   | #VALUE!                      |   |
| Foreign                                             |   |                |   | —            |   | #VALUE!                      |   |
| QPX Receivables                                     |   |                |   | #VALUE!           |   | #VALUE!                      |   |
| Other                                               |   |                |   | #VALUE!           |   | #VALUE!                      |   |
|                                                |   |                |   |              |   |                         |   |
| Total Adjustments                                   |   |                |   | #VALUE!           |   | #VALUE!                      |   |
|                                                |   |                |   |              |   |                         |   |
| Reconciled Totals                                   |   | #VALUE!             |   | #VALUE!           |   | #VALUE!                      |   |
|                                                |   |                |   |              |   |                         |   |
| Variance ineligible:                                |   |                |   |              |   |                         |   |
| Variance Between Aging & G/L (if G/L is  lower) |   |                |   | $                 | — |                         |   |   |
|                                                     |        |                     |        |                   |        |                              |        |  |

 

----