**Exhibit10.8.20.4**

 

**FOURTHAMENDMENTTO****MULTICURRENCY CREDIT AGREEMENT, LIMITED WAIVERSAND CONSENT OF GUARANTORS**

 

This **FOURTH AMENDMENT TO MULTICURRENCY CREDIT AGREEMENT, LIMITED WAIVERS ANDCONSENT OF GUARANTORS**(this “Amendment”) is dated as ofFebruary 20, 2004, and entered into by and among**WESTAFF, INC.**, a Delawarecorporation (“Parent “),**WESTAFF (USA), INC.,**a Californiacorporation (“US Borrower”), **WESTAFF (U.K.) LIMITED,**a limited liabilitycompany incorporated under the laws of England and Wales (“UK Borrower”),**WESTAFFSUPPORT, INC.,** a California corporation (“Term Borrower”, andtogether with US Borrower and UK Borrower, the “Borrowers”), thefinancial institutions signatory hereto that are parties as Lenders to theCredit Agreement referred to below (the “Lenders”), and **GENERALELECTRIC CAPITAL CORPORATION**,****as agent for the US Revolving Lenders, theTerm Lenders and the UK Revolving Lenders (as defined in the Credit Agreementreferred to below).

 

**Recitals**

 

***Whereas****,*the Parent, the Borrowers, the Lenders and Agents have entered into thatcertain Multicurrency Credit Agreement dated as of May 17, 2002 (as amended bythat certain First Amendment to Multicurrency Credit Agreement, Limited Waiversand Consent of Guarantors, dated as of October 31, 2002, as further amended bythat certain Second Amendment to Multicurrency Credit Agreement, LimitedWaivers and Consent of Guarantors, dated as of June 13, 2003, and as furtheramended by that certain Third Amendment to Multicurrency Credit Agreement,Limited Waivers and Consent of Guarantors, dated as of September 3, 2003, 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 waive certain Events of Default; and

 

***Whereas****,*the parties have determined that certain adjustments are necessary to thecalculation of the Borrowing Base and Reserves and to the determination ofEligible Accounts; and

 

***Whereas***,the Requisite Lenders are willing to approve certain amendments and waiversrequested by the Borrowers on the terms and conditions set forth in thisAmendment (which Amendment shall be effective as of the date that allconditions to such effectiveness 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:

 

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1.             **AMENDMENTSTO CREDIT AGREEMENT**.  Subjectto the conditions and upon the terms set forth in this Amendment, the CreditAgreement is hereby amended as follows:

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## 1.1           ***Amendment to Section 1.5(a)of the Credit Agreement. ***Section1.5(a) of the Credit Agreement is hereby amended to increase each of theApplicable L/C Margins set forth in the grid entitled “Applicable Margins”therein by 1.0% (for all levels), such that such grid in its entirety shallread as follows:

 
|                              |   | **Applicable Margins** |   |
|-----------------------------------|--------|------------------------|--------|
|                              |   | **Level I**            |   | **Level II** |   | **Level III** |   |
| Applicable Revolver Index Margin  |   | 0.25                   | %      | 0.75 | % | 1.25 | % |
| Applicable Revolver LIBOR Margin  |   | 2.50                   | %      | 3.00 | % | 3.50 | % |
| Applicable Term Loan Index Margin |   | 5.50                   | %      | 6.00 | % | 6.50 | % |
| Applicable L/C Margin             |   | 2.50                   | %      | 3.00 | % | 3.50 | % |

 

## 1.2           ***Amendments to Section 1.6 ofthe Credit Agreement***.  Section1.6 of the Credit Agreement is hereby amended as follows:

 

(a)           Clause (e) is herebyamended to delete the phrase “other than Revenue Week Accounts,” beginning suchclause; and

 

(b)           Clause (s) is herebyamended and restated in its entirety to read as follows, “(s) that is a RevenueWeek Account;”

 

## 1.3           ***Amendments to Section 6.3 of the Credit Agreement****.*

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(a)           Section6.3(a)(x)(F),Section 6.3(a)(x)(G), and Section 6.3(a)(x)(H) of the CreditAgreement are hereby amended and restated in their entirety to read as follows:

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“(F) in the case of any intercompany Indebtedness for which the UKBorrower is advancing funds, the UK Borrower shall have Borrowing Availabilityunder its UK Borrowing Base of not less than £551,724 Pounds Sterling, aftergiving effect to such intercompany loan; (G) the aggregate amount of suchintercompany Indebtedness owing by any Borrower shall be subordinated to thepayment in full of the Obligations (which subordination shall be in form andsubstance satisfactory to Agent) and shall not exceed, at any time outstanding,$2,000,000, provided that, with respect to such loans in existence onthe Closing Date, the US Dollar Equivalent of such loans

 

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denominated in a foreign currency shall be determined by the applicableforeign currency Spot Rate in effect on May 17, 2002 as set forth on Schedule 1to the Fourth Amendment; (H) the aggregate balance of all such intercompanyloans and advances owing to Borrowers by all Subsidiaries shall not exceed, atany time, $8,000,000, provided that, with respect to such loans inexistence on the Closing Date, the US Dollar Equivalent of such loansdenominated in a foreign currency shall be determined by the applicable foreigncurrency Spot Rate in effect on May 17, 2002 as set forth on Schedule 1 to theFourth Amendment;”

 

## 1.4           ***Amendments to Annex A (Definitions) of the Credit Agreement***.  Annex A to the Credit Agreement ishereby amended to amend and/ to or add the following definitions as set forthbelow:

 

(a)           the followingdefinitions in Annex A to the Credit Agreement are each hereby amendedand restated in their entirety to read as follows:

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“Availability Reserve” means (a) as tothe US Borrower, a reserve in the following amounts for each of the periodsindicated:

 
| **AMOUNT OF  AVAILABILITY  RESERVE** |   | **PERIOD IN EFFECT**                                                 |   |
|--------------------------------------|--------|----------------------------------------------------------------------|--------|
| Zero                                 |   | Fourth Amendment Effective Date through and including April 14, 2004 |   |
| $350,000                             |   | April 15, 2004 through and including May 14, 2004                    |   |
| $700,000                             |   | May 15, 2004 through and including June 14, 2004                     |   |
| $1,050,000                           |   | June 15, 2004 through and including July 14, 2004                    |   |
| $1,400,000                           |   | July 15, 2004 through and including August 14, 2004                  |   |
| $1,750,000                           |   | August 15, 2004 through and including September 14, 2004             |   |
| $2,100,000                           |   | September 15, 2004 through and including October 14, 2004            |   |
| $2,500,000                           |   | October 15, 2004 and thereafter                                      |   |

 

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provided that on orafter October 15, 2004 (i) at such time that (1) the consolidated EBITDA ofParent and its Subsidiaries at the end of the most recent Fiscal Period isequal to or greater than $9,000,000, measured on a 13 Fiscal Periods then endedbasis, and (2) no Default or Event of Default then exists, then, upon receiptby Agents of a Compliance Certificate with respect to such matters, theAvailability Reserve then in effect under this clause (a) shall be reduced to$1,250,000; and (ii) at such time that (1) the consolidated EBITDA of Parentand its Subsidiaries at the end of the most recent Fiscal Period is equal to orgreater than $10,000,000, measured on a 13 Fiscal Periods then ended basis, and(2) no Default or Event of Default then exists, then, upon receipt by Agents ofa Compliance Certificate with respect to such matters, the Availability Reservethen in effect under this clause (a) shall be reduced to $0.00; and (b) as to the UK Borrower, a reserve inthe amount of £132,177 from the Fourth Amendment Effective Date through andincluding October 14, 2004 and £264,354 on October 15, 2004 and thereafter; providedthat if the Spot Rate fluctuates by more than 10% from the Spot Rate in effecton the Fourth Amendment Effective Date, the UK Agent may adjust the foregoingAvailability Reserve under this clause (b) to equal the Pounds Sterlingequivalent of the otherwise applicable Availability Reserve as of the date ofsuch adjustment (determined by using the Spot Rate in effect as of such date)by delivery of written notice of such adjustment to the UK Borrower.”

 

“‘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.”

 

“‘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

 

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Eligible Accounts in Pounds Sterling; less (b) any Reservesestablished by UK Agent at such time.”

 

“‘US Borrowers” and “US Borrower’ have the meaning given suchterms in the preamble to the Agreement; provided that upon itsdissolution, each of WCA and WestLP shall cease to be a Borrower hereunder, andboth “US Borrowers” and “US Borrower” shall mean Westaff (USA).”

 

“‘US Borrowing Base’ means, as of anydate of determination by US Agent, from time to time, an amount equal to (a) upto 85% of the book value of Eligible Accounts of US Borrowers; less (b)any Reserves established by US Agent at such time.”

 

### (b)   the following newdefinitions are hereby added to Annex A to the Credit Agreement in theproper alphabetical order, which definitions shall read as follows:

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“‘Fourth Amendment’ means the Fourth Amendment to MulticurrencyCredit Agreement, Limited Waivers and Consent of Guarantors, dated as ofFebruary 20, 2004, among the Parent, the Borrowers, the Lenders and Agents.”

 

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

 

## 1.5           ***Amendments to Annex E, Annex F and Annex G to theCredit Agreement.***

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(a)           Annex E tothe Credit Agreement is hereby amended to add a new Paragraph (o) to suchAnnex, which Paragraph (o) shall read as follows:

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“(o)  Cash Forecasts.  On a weekly basis, Borrowers shall deliver toAgents cash forecasts of each Borrower for the 13 week period following thedelivery of such cash forecast, presented on a daily basis.”

 

(b)           Annex F tothe Credit Agreement is hereby amended and restated in its entirety bysubstituting therefore Schedule 2/Annex F attached hereto, such that Schedule2/Annex F shall be Annex F under the Credit Agreement; and

 

(c)             Annex G ofthe Credit Agreement is hereby amended to:

 

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(i)      reducethe Maximum Capital Expenditures permitted under Paragraph (a) (CapitalExpenditures) of such Annex G with respect to Fiscal Year 2004 to$2,500,000;

 

(ii)     amendand restate Paragraph (c) (Minimum EBITDA) of such Annex G in itsentirety to read as follows:

 

“(c)         MinimumEBITDA  Parent and its Subsidiarieson a consolidated basis shall have:

 

(x)            atthe end of each Fiscal Period set forth below, EBITDA measured from May 18,2003, of not less than the amount set forth below for such period:

 
| **FISCAL PERIOD  ENDING** |   | **MINIMUM EBITDA** |   |
|---------------------------|--------|--------------------|--------|
| June 14, 2003             |   | $80,000            |   |
| July 12, 2003             |   | $250,000           |   |
| August 9, 2003            |   | $1,000,000         |   |
| September 6, 2003         |   | $1,625,000         |   |
| October 4, 2003           |   | $2,750,000         |   |
| November 1, 2003          |   | $3,750,000         |   |
| November 29, 2003         |   | $4,600,000         |   |
| December 27,2003          |   | $4,800,000         |   |
| January 24, 2004          |   | $4,525,000         |   |

 

                (y)           at the end of eachFiscal Period set forth below, EBITDA for the 13 Fiscal Periods then ended ofnot less than the amount set forth below for such period: 

 
| **PERIOD** |   | **FISCAL PERIOD  ENDING** |   | **MINIMUM  EBITDA  WESTAFF, INC.** |   |
|------------|--------|---------------------------|--------|------------------------------------|--------|
| 4          |   | 2/21/04                   |   | $4,800,000                         |   |
| 5          |   | 3/20/04                   |   | $5,000,000                         |   |
| 6          |   | 4/17/04                   |   | $5,100,000                         |   |
| 7          |   | 5/15/04                   |   | $5,500,000                         |   |
| 8          |   | 6/12/04                   |   | $5,700,000                         |   |
| 9          |   | 7/10/04                   |   | $6,100,000                         |   |
| 10         |   | 8/7/04                    |   | $6,600,000                         |   |
| 11         |   | 9/4/04                    |   | $6,600,000                         |   |
| 12         |   | 10/2/04                   |   | $6,900,000                         |   |
| 13         |   | 10/30/04                  |   | $7,000,000                         |   |

 

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(z)            atthe end of each Fiscal Quarter set forth below, EBITDA for the 13 FiscalPeriods then ended of not less than the amount set forth below for such period:

 
| **FISCAL QUARTER  ENDING**      |   | **MINIMUM  EBITDA** |   |
|---------------------------------|--------|---------------------|--------|
| January 22, 2005                |   | $8,000,000          |   |
| April 16, 2005                  |   | $8,500,000          |   |
| July 9, 2005                    |   | $9,000,000          |   |
| October 29, 2005 and thereafter |   | $10,000,000         |   |

 

(iii)    adda new Paragraph (d) (Minimum Domestic EBITDA) of such Annex G to read asfollows:

 

“(d) Minimum Domestic EBITDA.  At the end of each Fiscal Period set forthbelow, Parent and its Domestic Subsidiaries shall have EBITDA for the 13 FiscalPeriods then ended of not less than the amount set forth below for such period:

 

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| **PERIOD** |   | **FISCAL PERIOD  ENDING** |   | **MINIMUM DOMESTIC  EBITDA** |   |
|------------|--------|---------------------------|--------|------------------------------|--------|
| 4          |   | 2/21/04                   |   | $1,100,000                   |   |
| 5          |   | 3/20/04                   |   | $800,000                     |   |
| 6          |   | 4/17/04                   |   | $1,800,000                   |   |
| 7          |   | 5/15/04                   |   | $2,100,000                   |   |
| 8          |   | 6/12/04                   |   | $2,300,000                   |   |
| 9          |   | 7/10/04                   |   | $2,200,000                   |   |
| 10         |   | 8/7/04                    |   | $2,400,000                   |   |
| 11         |   | 9/4/04                    |   | $2,400,000                   |   |
| 12         |   | 10/2/04                   |   | $2,500,000                   |   |
| 13         |   | 10/30/04 and thereafter   |   | $2,900,000                   |   |

 

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

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(a)           Exhibit 1.1(a)(i)to the Credit Agreement is hereby amended and restated in its entirety bysubstituting therefore Schedule 3/Exhibit 1.1(a)(i)  attached hereto, such that Schedule3/Exhibit 1.1(a)(i) shall be Exhibit 1.1(a)(i) under the CreditAgreement; and

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(b)           Exhibit 4.1(b)to the Credit Agreement is hereby amended and restated in its entirety bysubstituting therefore Schedule 4/Exhibit 4.1(b)  attached hereto, such that Schedule4/Exhibit 4.1(b) shall be Exhibit 4.1(b) under the Credit Agreement.

 

# 2.             **ONE-TIMEADD-BACK TO EBITDA AND LIMITED WAIVERS.**  Subject to the provisions of this Section 2 and thesatisfaction of the other conditions set forth in this Amendment, the Lendershereby (i) agree that, solely for the purpose of determining compliance withthe minimum EBITDA covenants set forth in Paragraphs (c) and (d) of Annex G(Financial Covenants), to the Credit Agreement, as amended by this Amendment,the Parent and its Subsidiaries may, for the Fiscal Period ended November 1,2003, make a one-time

 

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# add-backadjustment to EBITDA in the aggregate amount of $2.8 million with respect tocertain adjustments directly resulting from (a) a $0.95 million settlementpayment made in connection with that certain Synergy Staffing litigation and(b) a year end adjustment in the amount of $1.85 million to increase worker’scompensation reserves for all periods prior to May 18, 2003; and (ii)waive  the Events of Default that arosefrom the failure of Parent and its Subsidiaries to maintain the requiredminimum EBITDA with respect to the Fiscal Periods ended November 1, 2003,November 29, 2003 and December 27, 2003 and any Default or Event of Defaultwhich may have arisen solely from the failure to deliver audited FinancialStatements for Fiscal Year 2003 in compliance with Annex E to the CreditAgreement or failure to comply with Section 11.14  of the Credit Agreement.  For the avoidance of doubt, the partieshereby agree that the add-back to EBITDA permitted by this Section 2 ispermitted solely for the purpose set forth above and shall not (i) be deemed toamend in any way the definition of “EBITDA” in the Credit Agreement or (ii) bepermitted for any other purpose, including without limitation, for the purposesof determining the consolidated EBITDA of Parent and its Subsidiaries withrespect to the definition of Availability Reserve.  The waivers contained in this Section 2 shall be limitedprecisely as written, shall apply solely with respect to the occurrences andcircumstances described in this Section 2, and nothing contained in thisAmendment shall be deemed to constitute a waiver of any other Default or Eventof Default or provision of the Credit Agreement, or any consent to departure fromthe terms of the Credit Agreement.

 

# 3.             **REPRESENTATIONSAND WARRANTIES OF THE PARENT AND THE BORROWERS. **The Credit Parties (other than UK Borrower), jointlyand severally, and UK Borrower, only in respect of itself, severally, make thefollowing representations and warranties to each Lender and each Agent withrespect to all Credit Parties:

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

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## 3.2     ***Due Authorization,Non-Contravention.***  The execution,delivery and performance by each Credit Party of this Amendment and theConsent, as applicable, and the performance of the obligations of each CreditParty under or in respect of the Credit Agreement as amended hereby(a) have been duly authorized by all necessary corporate, limitedliability company or partnership action, (b) do not contravene anyprovision of such Person’s charter, bylaws or partnership or operatingagreement, as applicable, (c) do not violate any law or regulation or anyorder or decree of any court or Governmental Authority of the United States orthe United Kingdom or, in each case, any political subdivision thereof,(d) do not conflict with or result in the breach or termination of,constitute a default under or accelerate or permit the acceleration of anyperformance required by, any indenture, mortgage, deed of trust, lease,agreement or other instrument to which such Person is a party or by which suchPerson or any of its property is bound, except where any such violations,individually or in the aggregate, could not reasonably be expected to have aMaterial Adverse Effect, and (e) do not result in the creation orimposition of any Lien on any of the property of such Person.

 

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## 3.3     ***Execution, Delivery andEnforceability.***  ThisAmendment and the Consent have been duly executed and delivered by each CreditParty which 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 orEvent of Default.***  Noevent has occurred and is continuing after giving effect to this Amendment orwill result from the execution and delivery of this Amendment or the Consentthat would constitute a Default or an Event of Default.

 

## 3.5***     Representationsand Warranties.***  Aftergiving effect to this Amendment, each of the representations and warrantiescontained in the Loan Documents is and will be true and correct in all materialrespects on and as of the date hereof and as of the effective date of thisAmendment, except to the extent that such representations and warrantiesspecifically relate to an earlier date, in which case they were true, correctand complete in all material respects as of such earlier date.

 

4.             **COVENANTS**.****(a)****TheBorrowers hereby agree that they shall deliver or cause to be delivered to theUS Agent on or prior to February 25, 2004, a certificate certifying  that the charters, bylaws (or other similarorganizational document) and resolutions authorizing the execution, deliveryand performance by the Credit Parties of their obligations under the CreditAgreement, each in the form delivered to the Agents on the Closing Date, are infull force and effect and have not been amended, rescinded or otherwisemodified as of the date of this Amendment (other than an amendment to Parent’sbylaws to reduce the number of members of the board of directors from six tofive); that no other resolutions have been adopted with respect to thisAmendment and that no further authorization or consent is required to beobtained with respect to the execution, delivery and performance of thisAmendment, the Consent and the Credit Agreement as amended hereby.  The parties agree that the failure of theCredit Parties to comply with the covenant set forth in this Section 4(a)shall constitute an immediate Event of Default under the Credit Agreement.

 

(b)           In the event thateither (x) on or before April 30, 2004 US Borrower has not obtained (i) a firmcommitment for the issuance of Stock which will result in a capitalcontribution to US Borrower in the aggregate amount of at least $5,000,000 orfor the issuance of Additional Subordinated Debt (excluding any Indebtedness toany Subsidiary of US Borrower) which will result in the receipt by US Borrowerof net proceeds in the aggregate amount of at least $5,000,000 (either, an “InvestmentEvent”) or (ii) a written agreement for the cancellation of, or reductionin the amount available to be drawn under, outstanding Letters of Credit whichwill result in the increase in Borrowing Availability of US Borrower by atleast $5,000,000 (an “L/C Reduction”)or (iii) a letter of intent from acreditworthy Person to purchase all or part of the Stock or assets of one ormore of Parent’s Subsidiaries in a transaction which will result in theincrease in Borrowing Availability of US Borrower by at least $5,000,000 (a “Sale”),in each case on terms and conditions satisfactory to the US Agent and theLenders in their sole discretion (any of the foregoing, a “QualifyingTransaction”) or (y) on or before June 30, 2004 US Borrower has notconsummated a Qualifying Transaction and repaid the US Revolving Credit 

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Advances with the proceedsthereof and increased Borrowing Availability of US Borrower in the amount of atleast $5,000,000,  then at the requestof the Requisite Lenders, US Borrower shall on or before May 10, 2004 (in thecase of failure to meet the conditions in clause (x)) or July 12, 2004 (in thecase of failure to meet the conditions in clause (y)) select and engage, at itsexpense, a consultant, reasonably acceptable to US Borrower and the Lenders, toadvise US Borrower on strategies to improve its operations and cash flows (suchPerson is referred to herein as the “Consultant”).  The terms and scope of the engagement of theConsultant shall be reasonably satisfactory to US Borrower and theLenders.  US Borrower will,notwithstanding any confidentiality provisions of the Consultant’s engagementby US Borrower, authorize the Consultant to meet with, and discuss Consultant’srecommendations to US Borrower with respect to its operations with, Agents andLenders, accompanied by representatives of US Borrower.  If US Borrower has engaged the Consultant inaccordance with the terms of this Section 4(b) and thereafterconsummates a Qualifying Transaction and repays the Revolving Credit Advanceswith the net proceeds and increases Borrowing Availability of US Borrower by atleast $5,000,000, then US Borrower shall no longer be obligated to continue itsengagement of the Consultant.  Each ofthe parties hereto acknowledges and agrees that such Consultant will beselected and engaged solely by US Borrower and will operate under the directionof US Borrower and neither the requirements of this Section 4(b) nor anydiscussions of the parties shall imply that either Agent or the Lenders, or anyof them, will have selected or engaged the Consultant.  Failure of US Borrower to engage aConsultant within the time period specified if required by the terms of this Section4(b) shall constitute an immediate Event of Default under the CreditAgreement.  The parties acknowledge andagree that the provisions of this Section 4(b) only determine if andwhen US Borrower shall be obligated to engage a consultant and do not waive,amend or otherwise affect any terms or requirements of the Credit Agreement orconstitute a consent to any transaction.

 

# 5.             **CONDITIONSTO EFFECTIVENESS OF THIS AMENDMENT. **ThisAmendment shall be effective only if and when (i) signed by, and whencounterparts hereof shall have been delivered to the US Agent (by handdelivery, mail or telecopy) by, the Parent, the Borrowers and the RequisiteLenders; (ii) each Guarantor shall have delivered to the US Agent executedcounterparts of the Consent; and (iii) the US Agent, for the ratable benefit ofthe Lenders, shall have received payment by the Borrowers of a non-refundablefee equal to $60,000.

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# 6.             **EFFECT OFAMENDMENT; RATIFICATION.** This Amendment is a Loan Document. From and after the date on which this Amendment becomes effective, allreferences in the Loan Documents to the Credit Agreement shall mean the CreditAgreement as amended hereby.  Except asexpressly amended or waived hereby, the Credit Agreement and the other LoanDocuments, including the Liens granted thereunder, shall remain in full forceand effect, and all terms and provisions thereof are hereby ratified andconfirmed.  Each of the Parent and eachBorrower confirms that, as amended hereby, each of the Loan Documents is infull force and effect.

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# 7.             **RELEASE AND WAIVER OF CLAIMS, DEFENSES AND RIGHTS OF SET OFF.**  Each ofthe Parent and the Borrowers acknowledges that the US Agent, the UK Agent andthe Lenders have performed all obligations and duties owed to the Parent andthe

 

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# Borrowers under the Loan Documents through the datehereof, and each such party further, acknowledges, represents and warrantsthat, none of the Parent or the Borrowers has any claim, cause of action,defense, or right of set off against the US Agent, the UK Agent or the Lenders,and, to the extent that any such party has any such rights, each of the Parentand the Borrowers hereby releases, waives, and forever discharges the US Agent,the UK Agent and the Lenders (together with each of their predecessors,successors and assigns) and each of their officers, directors, employees,agents and representatives from each action, cause of action, suit, debt,defense, right of set off, or other claim whatsoever, in law or in equity,known or unknown against the US Agent, the UK Agent or the Lenders, or suchofficers, employees, agents or representatives.  Each of the Parent and each Borrower hereby specifically waives asagainst the US Agent, the UK Agent or the Lenders any rights they or any ofthem may have under Section 1542 of the California Civil Code, which providesas follows:  “**A general release does not extend toclaims which the creditor does not know or suspect to exist in his favor at thetime of executing the release, which if known by him must have materiallyaffected his settlement with the debtor.”**

 

# 8.             **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.

 

# 9.             **COMPLETEAGREEMENT. **This Amendmentsets forth the complete agreement of the parties in respect of any amendment toany of 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.

 

# 10.           **CAPTIONS;COUNTERPARTS. **The catchlinesand captions herein are intended solely for convenience of reference and shallnot be used to interpret or construe the provisions hereof. This Amendment maybe executed by one or more of the parties to this Amendment on any number ofseparate counterparts (including by telecopy), all of which taken togethershall constitute but one and the same instrument.

 

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**IN WITNESS WHEREOF**,each of the undersigned has duly executed this Fourth Amendment toMulticurrency Credit Agreement, Limited Waivers and Consent of Guarantors as ofthe 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/ Philip J. Sefchovich |   |
|   | Name:                                                                                                                                   | Philip J. Sefchovich |
|   | Title:                                                                                                                                  | Assistant Vice President |
|        |                                                                                                                                         |  |  |  |  |  |

 

S-1

----

 

The following Person is a signatory to this Fourth Amendment toMulticurrency Credit Agreement, Limited Waivers, and Consent of Guarantors inits capacity as a Credit Party and not as a Borrower.

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

 

S-1

----

 

**CONSENTOF GUARANTORS**

 

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

 

*[signatures following; remainder of page intentionally left blank]*

 

Consent-1

----

 

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

 

 
|   | **WESTAFF, INC.**                                              |
|--------|----------------------------------------------------------------|
|   |                                                           |
|   |                                                           |
|   | By                                                             | /s/ Dirk A. Sodestrom |   |
|   | Name:                                                          | Dirk A. Sodestrom |
|   | Title:                                                         | Senior Vice President and Chief  Financial Officer |
|   |                                                           |
|   |                                                           |
|   | **WESTERN MEDICAL  SERVICES, INC.**,  a California corporation |
|   |                                                           |
|   |                                                           |
|   | By:                                                            | /s/ Gary 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

----

 

**Schedule1**

 
| **CURRENCY**            |   | **SPOT RATE** |   |
|-------------------------|--------|---------------|--------|
| Australian  Dollar      |   | 0.5490        |   |
| Danish Krone            |   | 0.1226        |   |
| British  Pound Sterling |   | 1.4566        |   |
| Norwegian  Kroner       |   | 0.1207        |   |
| New Zealand  Dollar     |   | 0.4613        |   |

 

----

 

**Schedule2/Annex F**

 

**AMENDEDANNEX F (Section 4.1(b))toCREDIT AGREEMENT**

 

**COLLATERALREPORTS**

 

Borrowers shall deliver or cause to be delivered the following:

 

(a)           To the ApplicableAgent, upon the request of the Applicable Agent, and in any event no lessfrequently than 15 Business Days after the end of each Fiscal Period (togetherwith a copy of all or any part of the following reports requested by any Lenderin writing after the Closing Date), each of the following reports, each ofwhich shall be prepared by the applicable Borrower as of the last day of theimmediately preceding Fiscal Period or the date 2 days prior to the date of anysuch request:

 

(i)            aBorrowing Base Certificate with respect to US Borrowers and UK Borrower, ineach case accompanied by such supporting detail and documentation as shall berequested by the Applicable Agent in its reasonable discretion;

 

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

 

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

 

(b)           To the ApplicableAgent, upon the request of the Applicable Agent and in any event on the firstBusiness Day of each week (together with a copy of all or any part of thefollowing report requested by any Lender in writing after 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 reflecting all collections of Accounts, in each case accompaniedby such supporting detail and documentation as shall be requested by theApplicable Agent in its reasonable discretion, each of which shall be preparedby the Applicable Borrower as of the end of the immediately preceding week;

 

(c)           To the ApplicableAgent, on a daily basis or at such other intervals as the Applicable Agent(with the consent of the Lenders) may request from time to time (together witha copy of all or any part of such delivery requested by any Lender in writingafter the Closing Date), collateral reports with respect to US Borrowers and UKBorrower, including all additions and reductions (cash and non-cash) with respectto the Accounts of each such Borrower, in each case accompanied by suchsupporting detail and documentation as shall be requested by the

 

----

 

Applicable Agent in itsreasonable discretion, each of which shall be prepared by the applicableBorrower as of the end of the immediately preceding day;

 

(d)           To the ApplicableAgent, at the time of delivery of each of the Fiscal Period FinancialStatements delivered pursuant to Annex E:

 

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

 

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

 

(e)           To the ApplicableAgent, at the time of delivery of each of the quarterly Financial Statementsdelivered pursuant to Annex E, a listing of government contracts of eachBorrower subject to the Federal Assignment of Claims Act of 1940 or any similarstatute of any applicable jurisdiction;

 

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

 

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

 

----

 

**Schedule 3/Exhibit 1.1(a)(i)**

 

Exhibit 1.1(a)(i)

**[Westaff (USA), Inc.] [Westaff (UK) Limited]**

 

**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 hereby certifies that on the date hereof and on the borrowing date setforth below, and after giving effect to the Advances requested hereby: (i)there exists and there shall exist no Default or Event of Default under theCredit Agreement; (ii) the proceeds of the Revolving Credit Advances will beused in accordance with Section 1.4  ofthe Credit Agreement; and (iii) each of the representations and warrantiescontained in the Credit Agreement and the other Loan Documents  is true and correct .*

 
| **Client and Address**          |   | Westaff (USA), Inc                                | **Name of Contact** | Corinne Wilson, or             | **Phone**      | (925)-256-1512 |
|---------------------------------|--------|---------------------------------------------------|---------------------|--------------------------------|----------------|----------------|
|                            |   | 220 North Wiget Lane, Walnut Creek CA  94598 | Christa Leonard     | **Phone**                      | (925)-952-2502 |
|                            |   |                                              |                |                           |           |
| Request Date                    |   | **#REF!**                                         | LIBOR Loan Amount   |                           | **$0.00**      | **Fax**        | (925)-930-5361 |
| Current Index Rate Loan Request |   | **$0.00**                                         | LIBOR Period:       |                           | **$0.00**      |           |
|                            |   |                                              |                |                           |
| **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              |   | #REF!  |   |   |   |   |
| Ineligible  Accounts                                                                                                                                                                                     |   | from  Borrowing Base Cert for P/E |   | #REF!  |   |   |   |   |
| **Eligible Aging Balance**                                                                                                                                                                               |   |                              |   |   |   | $      | — |   |   |
|                                                                                                                                                                                                     |   |                              |   |   |   |   |   |   |
| **Current Week Activity**                                                                                                                                                                                |   |                              |   |   |   |   |   |   |
| **Beginning Net Current Activity**                                                                                                                                                                       |   | from previous request dated       |   | #REF!  |   | #REF!  |   |   |
| Plus: Sales                                                                                                                                                                                              |   | Information recorded on           |   | #REF!  |   | $      | — |   |   |
| Minus: Cash Receipts Applied                                                                                                                                                                             |   |                              |   |   | -      | $      | — |   |   |
| Minus: Credit Memos                                                                                                                                                                                      |   |                              |   |   | -      | $      | — |   |   |
| Minus: Discounts                                                                                                                                                                                         |   |                              |   |   | -      | $      | — |   |   |
| Plus/Minus: Other Debits/Credits                                                                                                                                                                         |   |                              |   |   | +/-    | $      | — |   |   |
| Explanation                                                                                                                                                                                              |   |                              |   |   |   |   |   |   |
| **Ending Net Current Week Activity**                                                                                                                                                                     |   |                              |   |   |   | #REF!  |   |   |
|                                                                                                                                                                                                     |   |                              |   |   |   |   |   |   |
| **Current A/R Balance**                                                                                                                                                                                  |   |                              |   | #REF!  |   | #REF!  |   |   |
|                                                                                                                                                                                                     |   |                              |   |   |   |   |   |   |
| **Available A/R Aging Advance rate**                                                                                                                                                                     |   |                              |   | 85%    |   |   |   | #REF!  |
|                                                                                                                                                                                                     |   |                              |   |   |   |   |   |   |
|                                                                                                                                                                                                     |   |                              |   |   |   |   |   |   |
| **Total Available: Lesser of: Line I  or Total Credit Line**                                                                                                                                             |   |                              |   |   |   |   |   |   |
| Less: Revolver                                                                                                                                                                                           |   |                              |   |   |   |   | -      | #REF!  |
| Less: LIBOR Outstanding                                                                                                                                                                                  |   |                              |   |   |   |   | -      |   |
| Less: Outstanding Letters of Credit                                                                                                                                                                      |   |                              |   |   |   |   | -      |   |
| Less: Reserves                                                                                                                                                                                           |   |                              |   |   |   |   | -      | $      | — |
| (                                 ) |   |                              |   |   |   |   | -      | $      | — |
|                                                                                                                                                                                                     |   |                              |   |   |   |   |   |   |
| **Excess Availability**                                                                                                                                                                                  |   |                              |   |   |   |   |   | #REF!  |

 
| **Loan Balance**                                  |   |                       |   |   |   |   |   |   |
|---------------------------------------------------|--------|----------------------------|--------|--------|--------|--------|--------|--------|
| Revolver  Balance                                 |   | Line  H Last Request Dated |   | #REF!  |   | #REF!  |   |   |
| 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                   |   |                       |   |   |   |   |   | #REF!  |

 
| *[Westaff (USA), Inc.] [Westaff (UK) Limited] has caused  this Request to be executed by its duly authorized officer as of the date and  year first written above.*                                                                                         |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
| [Westaff  (USA), Inc.] [Westaff (UK) Limited] 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.] [Westaff (UK) Limited] |   | $      | — |   |   |
|                                                                                                                                                                                                                                                             |        |        |  |  |  |

 
| **Authorizations** |   | Christa  Leonard          |   |            |   | Phone           |   | Treasury  Fax |
|--------------------|--------|---------------------------|--------|-----------------|--------|-----------------|--------|---------------|
| Requested  by:     |   |                      |   | (925)  930-5300 |   | (925)  930-5316 |
|               |   | Duly Authorized Signatory |   |            |   |            |

 
| Fax to:   Bill Langford at GE Capital   (312) 463-3843;Phone:  (312) 441-7554 |   |
|----------------------------------------------------------------------------------------------|--------|

 
| **FOR WESTAFF PURPOSES ONLY**                                                                                                                                                                                                                                                             |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Prepared  By:                        Reviewed  By:                      |

 

----

 

**Schedule 4/Exhibit 4.1(a)(i)**

* *

***[Westaff (USA),  Inc.] [Westaff (UK) Limited]***

 

**PERIOD-END COLLATERAL REPORT AND BORROWINGCERTIFICATE**

 

|   | Period-Ending: | XXX     |
|--------|----------------|---------|
|   | Report  #:     | XXX     |
|   | Report  Date:  | #VALUE! |

 

**REVOLVING FACILITY**

 
|                       |                                                                                          | ** ** |        | ** ** |       | ** ** | **Consolidated** | ** **  |
|----------------------------|-----------------------------------------------------------------------------------------------|------------|-------------|------------|------------|------------|------------------|-------------|
| **ELIGIBLE ACCOUNTS**      | ** **                                                                                    |       | ** **  |       | ** ** |       | ** **       |
|                       |                                                                                          |       | As  of:     |       |       |       |             |        |
| 1                          | A/R Aging Balance as of the Period End                                                        |       | XXX         |       |       |       | $                | XXX         |   |
| 2                          | LESS:      Ineligible Accounts Receivable (Per Attached  Schedule A) |       | XXX         |       |       |       | $                | #REF!       |   |
| 3                          | Eligible Accounts Receivable (Line 1 minus  Line 2)                                           |       | XXX         |       |       |       | $                | #VALUE!     |   |
|                       |                                                                                          |       |        |       |       |       |             |        |
| **BORROWING BASE**         | ** **                                                                                    |       | ** **  |       | ** ** |       | ** **       |
|                       |                                                                                          |       |        |       |       |       |             |        |
| 4                          | Available AR as of the period end                                                             | 85%        | (of Line 3) |       |       |       |             |        | $ | #VALUE! |   |
| 5                          | Maximum [US] [UK] Amount                                                                      |       |        |       |       |       |             |        |
|                       |                                                                                          |       |        |       |       |       |             |        |
| **BORROWING AVAILABILITY** |                                                                                          |       |        | As  of:    |       |       |             |
|                       | Index  Rate Loan                                                                              |       |        |       | XXX        |       | $                | XXX         |   |
|                       | LIBOR  One Month                                                                              |       |        |       | XXX        |       | $                | XXX         |   |
|                       | LIBOR  Two Month                                                                              |       |        |       | XXX        |       | $                | XXX         |   |
|                       | LIBOR  Three Month                                                                            |       |        |       | XXX        |       | $                | XXX         |   |
|                       | Stand-by  L/Cs                                                                                |       |        |       | XXX        |       | $                | XXX         |   |
|                       | Other  (Specify)                                                                              | Reserve    |        |       |       | XXX        |             | $           | XXX |   |
| 6                          | Total Obligations at Period-end                                                               |       |        |       | XXX        |       | $                | —      |   |
|                       |                                                                                          |       |        |       |       |       |             |        |
| 7                          | Lessor of Line 4 and 5                                                                        |       |        |       |       |       |             |        |
|                       |                                                                                          |       |        |       | As  of:    |       |             |        |
| 8                          | **Borrowing Availability  (Line 7 minus Line 6)**                                             |       |        |       | XXX        | ** ** | $                | **#VALUE!** | ** ** |
|                            |                                                                                               |            |             |            |            |            |                  |             |  |  |  |  |

 

***Theundersigned represents and warrants, that as an officer of Westaff (USA),Inc.and not in his or her individual capacity, as follows:***

**(A)  The information provided above and in theaccompanying supporting documentation is true, complete and correct, and**

**complies fully with theconditions, terms and covenants of the Multicurrency Credit Agreement dated May17, 2002, among Westaff USA, Inc., (“Westaff USA”), Westaff (CA), Inc.,(“WCA”), Westaff Limited Partnership (“WestLP”, and collectively with Westaff USAand WCA, the “US Borrowers”), Westaff (U.K.) Limited, as UK Borrower, WestaffSupport, Inc., as Term Borrower, Westaff Inc., as the Parent, Agent, and theLenders from time to time party thereto (as may be amended, restated, amendedand 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 calculations set forth herein are madein accordance with the Credit Agreement, and do not include as EligibleAccounts those Accounts which are ineligible pursuant to the terms of Section1.6 of the Credit Agreement.**

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

**(i) No event or circumstance has occurred that would have aMaterial 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 XXX day of XXX, 2004**

 
| **[Westaff (USA),  Inc.] [Westaff (UK) Limited]** |
|--------------------------------------------------------|
|                                                   |   |
|                                                   | *By:/S/* | *Christa Leonard* |   |
|                                                   |   |
|                                                   | Name: |  Christa Leonard |   |
|                                                   |   |
|                                                   | Title: | V.P. and Treasurer |   |
|                                                        |  |  |  |  |  |  |  |

 

----

 

February 22, 2004

 

General Electric Capital Corporation

6130 Stoneridge Mall Road

Suite 300

Pleasanton, California 94588

Attention:  Westaff AccountManager

 

Re:  DisbursementInstructions and Borrower Acknowledgment

 

Ladies and Gentlemen:

 

Reference ishereby made to the Multicurrency Credit Agreement dated as of May 17, 2002among Westaff, Inc., Westaff (USA), Inc., Westaff (CA), Inc., Westaff LimitedPartnership, Westaff (UK) Limited, Westaff Support, Inc., the financialinstitutions parties thereto, and General Electric Capital Corporation, asagent for the US Revolving Lenders, the Term Lenders, the UK Revolving Lendersand as security trustee for the UK Revolving Lenders (as amended to date, the“Credit Agreement”).  Capitalized termsused herein without definition shall have the meaning given such terms in theCredit Agreement.

 

On the datehereof, UK Borrower has delivered to UK Agent the Notice of Revolving CreditAdvance for the UK Revolving Lenders to make UK Revolving Credit Advances inthe aggregate amount of                   Pounds Sterling (the “UK Revolving Loan Advance”) to UK Borrower (a copyof which is attached hereto), which funds have been duly authorized by UKBorrower to be paid to Westaff (USA) as a dividend.  UK Borrower hereby irrevocably directs that UK Agent debit theLoan Account of UK Borrower in the amount of the UK Revolving Loan Advance andtransfer, in immediately available funds, the US Dollar Equivalent of theamount of the UK Revolving Loan Advance to the Collection Account of USBorrower as follows:

 
| Bank:     |   | Deutsche Bank Trust Company Americas |
|-----------|--------|--------------------------------------|
|      |   | New York, New York                   |
| ABA#:     |   | 021001033                            |
| Account#: |   | 50232854                             |
| Name:     |   | GECC/CAF Depository                  |
| Ref:      |   | CFN4698-Westaff                      |

 

US Borroweracknowledges that, in accordance with the terms of the Credit Agreement, thefunds so transferred for the account of US Borrower shall be credited to theLoan Account of the US Borrower upon receipt of immediately available funds inDollars.

 

US Borrowerand UK Borrower hereby acknowledge and agree that the amount of the UKRevolving Loan Advance shall be debited to the Loan Account of the UK Borroweron

 

----

 

February 23, 2004 and creditedto the Loan Account of US Borrower, whether or not the funds can be transferredas required hereby on such date due to the time difference between the UnitedKingdom and the United States. Notwithstanding the foregoing, US Borrower acknowledges and agrees thatif the amount of the UK Revolving Loan Advance is not actually received in theCollection Account on or before February 25, 2004, the credit to US Borrower’sLoan Account shall be reversed, and US Borrower shall repay any RevolvingCredit Advances to the extent required by the Credit Agreement.

 
|   | Very truly yours,    |
|--------|----------------------|
|   |
|   | WESTAFF (USA), INC.  |
|   |
|   |
|   | By:                  |   |   |
|   | Name:                |   |   |
|   | Title:               |   |   |
|   |
|   | WESTAFF (UK) LIMITED |
|   |
|   |
|   | By:                  |   |   |
|   | Name:                |   |   |
|   | Title:               |   |   |
|        |                      |  |  |  |  |  |

 

ACKNOWLEDGED and AGREED:

 

GENERAL ELECTRIC CAPITAL CORPORATION,

as US Agent, UK Agent, Security Trustee, a US Revolving

Lender and a UK Revolving Lender

 
| By:                                         |                      |   |
|---------------------------------------------|---------------------------|--------|
|                                        | Lawrence A. Ridgway       |
|                                        | Duly Authorized Signatory |
|                                        |                      |
| BANK OF AMERICA, N.A.,                      |
| as a US Revolving Lender and a UK Revolving |
| Lender                                      |
|                                        |                      |
| By:                                         |                      |   |
|                                        | Philip J. Sefchovich      |
|                                        | Assistant Vice President  |
|                                             |                           |        |  |

 

----

 

cc:  Latham & Watkins LLP

633 West 5th  Street

Los Angeles, California 9007

Attention:  Mary B. Ruhl

Telecopier:  213-891-8763

 

General Electric Capital Corporation

2091 High Ridge Road

Stamford, Connecticut 06927-5100

Attention:  West Region Counsel—Westaff

Telecopier:  203-357-7822

 

----