Document:

Exhibit 10(e).11

 

AMENDED AND
RESTATED AGREEMENT 

WITH WILLIAM A. COOPER

 

 

                THIS AGREEMENT is made and
entered into as of July 31, 2008 between TCF FINANCIAL CORPORATION, a
Delaware corporation (the “Company”) and WILLIAM A. COOPER (“Cooper”).

 

R  E  C
I  T  A  L  S:

 

                WHEREAS, the Company is a bank
holding company and Cooper is now and has been Chairman of the Board of the
Company; and

 

                WHEREAS, Cooper has been elected
Chief Executive Officer of the Company effective July 26, 2008; and

 

                WHEREAS, Cooper and the Company are
parties to an agreement dated as of January 25, 2005 (the “Chairman’s Agreement”)
and the Supplement to Chairman’s Agreement dated as of January 25, 2005
(the “Supplement”);

 

                WHEREAS, Cooper and the Company
wish to enter into this Agreement to provide for the amendment and restatement
of the Chairman’s Agreement and the Supplement effective as of the date hereof;

 

                NOW, THEREFORE, in consideration
of the mutual premises and agreements set forth herein, the parties agree as
follows:

 

                1.             Employment   and  
Duties.      During   the  
term  of  this 
Agreement  as  set 
forth  in  paragraph 
2  below,   Cooper shall 
be  employed  as 
Chief  Executive  Officer 
of  the Company  with 
overall  responsibility  for 
the  business  and 
affairs  of  the 
Company  and  Cooper’s powers and  authority 
shall  be  superior 
to  those  of 
any  other  officer 
or  employee of  the 
Company  or  its 
subsidiaries.    If  elected, 
Cooper also  agrees  to 
continue to serve  as
Chairman  of the  Board 
of  Directors  of 
the  Company.    In 
discharging  such  duties 
and  responsibilities, Cooper
may  also 
serve  as  an 
executive  officer and/or director
of any direct or indirect subsidiary of the Company (collectively, the “TCF
Subsidiaries”).  During the term of this
Agreement, Cooper shall apply on a substantially full-time basis (allowing for
usual vacations and sick leave) all of his skill and experience to the
performance of his duties in his positions with the Company and the TCF
Subsidiaries.  It is understood that
Cooper may have other business investments and participate in other business
ventures which shall not interfere or be inconsistent with his duties under
this Agreement.  Cooper shall perform his
duties at the Company’s principal executive offices in Wayzata, Minnesota or at
such other location as may be mutually agreed upon by Cooper and the Company;
provided that Cooper shall travel to other locations at such times as may be
necessary for the performance of his duties under this Agreement.

 

 

2.             Term of Employment.  This Agreement shall commence on the date
hereof and shall continue through January 1, 2012; provided that the term
shall be automatically extended for one year on each January 1st
commencing January 1, 2012 unless either party gives written notice of
non-renewal to the other three months prior to the date on which the automatic
extension would be effective.

 

                3.             Compensation
and Benefits.  During the term of
this Agreement, Cooper shall be entitled to the following compensation and
benefits:

 

                (a)           Base
Salary, Bonus.  Cooper shall not
receive any cash compensation, salary or bonus.

 

                (b)           Stock
Incentives.  Cooper shall receive
stock options and restricted stock under the terms and conditions set forth in a
Restricted Stock Agreement dated July 31, 2008 between the Company and
Cooper (the “Restricted Stock Agreement”) and a Non-Qualified Stock Option
Agreement dated July 31, 2008 between the Company and Cooper (the “Option
Agreement”) (the Option Agreement collectively with the Restricted Stock
Agreement are referred to as the “Award Agreements”) pursuant to the TCF Financial
Incentive Stock Program, as amended and restated January 21, 2008 (the “TCF
Incentive Stock Program”).  Additional
awards, if any, of stock options, restricted stock and stock appreciation
rights would be made under any stock based plan from time to time adopted by
the Company (the “Stock Plans”) as from time to time determined by the Board of
Directors or Compensation Committee of the Company.

 

                (c)           Reimbursement
of Expenses.  The Company shall
reimburse Cooper for all business expenses properly documented, including
without limitation, Cooper’s legal fees incurred in the preparation of this
Agreement.  Any such payments shall be
made no later than 2 1⁄2 months after the end of the calendar year in which the
expense was incurred.

 

                (d)           Aircraft.  Cooper shall be entitled to use of the
Company’s corporate aircraft at the Company’s expense, provided that Cooper
shall be responsible for all individual income taxes resulting from his use of
the aircraft for non-business travel.

 

                (e)           Other
Benefits.  Cooper shall be entitled
to participate in and shall be included in any employee benefit plan, pension
plan, supplemental employee retirement plan, fringe benefit programs or similar
plan of the Company now existing or established hereafter to the extent that he
is eligible under the general provisions thereof.

 

                (f)            Perquisites.  Cooper shall be entitled to other perquisites
provided to executive officers, subject to annual review by the Compensation
Committee of the Board of Directors. 
Payment of perquisites, if any, shall be made no later than 2 1⁄2 months
after the end of the calendar year in which Cooper was entitled to such
payments.

 

                (g)           Chairman’s
Compensation and Benefits.  Cooper
shall retain two-thirds of the restricted stock grant described in the Chairman’s
Agreement that has already been earned and he shall be eligible for earning the
remaining portion of that award in accordance with the terms of a Restricted Stock
Agreement between the Company and Cooper dated January 25, 2005.  He shall no longer receive director’s fees
paid to non-employee directors or an annual fee for serving as 

 

2

 

Chairman.

 

                (h)           Return
of Compensation under Section 304 of the Sarbanes-Oxley Act.  Notwithstanding anything in this Agreement to
the contrary, in the event of a restatement of financial results by the
Company, the Audit Committee of the Board of Directors shall determine (after
reasonable notice to Cooper and an opportunity for Cooper, together with his
legal counsel, to be heard before the Audit Committee) whether or not repayment
of any compensation is required under Section 304 of the Sarbanes-Oxley
Act.  If the Audit Committee determines
that such repayment is required, the Committee shall make a demand for
repayment by Cooper of any bonus or other incentive-based or equity-based
compensation, and any profits realized from the sale of TCF stock or other TCF
securities, which are required to be returned to the Company as a result of Section 304
of the Sarbanes-Oxley Act.  Cooper shall
promptly tender such repayment unless he disputes the findings of the Audit
Committee.

 

                4.             Termination
of Employment.

 

                                Upon termination of employment for
whatever reason, Cooper shall be entitled to compensation and benefits
determined under the Company’s benefit plans and policies applicable to Company
executives then in effect and as provided in the Award Agreements.

 

                5.             Covenant Not to Compete; Non-Solicitation Covenant.

 

                                (a)           Covenant Not to Compete.  During the term of this Agreement, Cooper
agrees that he will not directly or indirectly substantially compete with TCF
Financial, TCF National Bank, TCF National Bank Arizona or their respective
subsidiaries in the Relevant Market.  The
“Relevant Market” is financial businesses located in the States of Arizona, Michigan,
Minnesota, Iowa, North Dakota, South Dakota, Colorado and Wisconsin, and the
Chicago metropolitan area.

 

                                (b)           Non-Solicitation Covenant.  During the term of this Agreement, Cooper
agrees that, except with the prior written permission of the Board of Directors
of TCF Financial, he will not offer to hire, entice away, or in any manner
attempt to persuade any officer, employee, or agent of TCF Financial, TCF National
Bank or TCF National Bank Arizona or any of their subsidiaries to discontinue
his or her relationship with TCF Financial, TCF National Bank, TCF National
Bank Arizona or any of their subsidiaries nor will he directly or indirectly
solicit, divert, take away or attempt to solicit any business of the Company or
any of its subsidiaries as to which Cooper has acquired any knowledge during the
term of his employment with the Company or his service as a director of TCF Financial.

 

                                (c)           Extension of Terms of Covenant Not
to Compete and Non-Solicitation Covenant. 
In consideration for the acceleration of benefits under the Award
Agreements upon a Change in Control as defined in the TCF Incentive Stock
Program, Cooper’s obligations under paragraphs 5(a) and 5(b) shall be
extended for three (3) years following any such Change in Control;
provided, however, that during such extended period Cooper may be permitted to
engage in activities  otherwise
prohibited by paragraphs 5 (a) and 5 (b) with the prior written
permission of the Board of Directors of the Company, which shall not be
withheld if the nature and extent of such activity would be immaterial or
inconsequential to the Company.

 

3

 

                (d)           Remedies.  If
Cooper commits a breach, or threatens to commit a breach, of any of the
provisions of this paragraph 5, the Company shall have the right of specific
performance in addition to any rights and remedies otherwise available at law
or in equity.

 

                6.             Certain
Additional Payments by the Company.

 

                (a)           Gross-Up
Payment.  Anything to the contrary
notwithstanding, in the event it shall be determined that any payment,
distribution or benefit made or provided by the Company (or any successor thereto)
to or for the benefit of Cooper (whether pursuant to this Agreement, the Award
Agreements or otherwise) (a “Payment”) would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the “Code”) or any interest or penalties with respect to such excise tax (such
excise tax, together with any such interest and penalties, are collectively
referred to as the “Excise Tax”), then the Company shall pay Cooper in cash an
amount (the “Gross-Up Payment”) such that after payment by Cooper of all taxes
(including any interest or penalties imposed with respect to such taxes),
including but not limited to income taxes (and any interest and penalties
imposed with respect thereto) and any additional Excise Tax, imposed upon the
Gross-Up Payment, Cooper retains (after payment of such taxes, interest and
penalties) an amount of the Gross-Up Payment equal to the Excise Tax imposed on
the Payments.

 

                (b)           Determination
of Gross-Up Payment.  Subject to
paragraph (c) below, all determinations required to be made under this Agreement
or under the Award Agreements, including whether a Gross-Up Payment is required
and the amount of the Gross-Up Payment, shall be made by the firm of
independent public accountants selected by the Company to audit its financial
statements for the year immediately preceding a Change in Control (the “Accounting
Firm”) which shall provide detailed supporting calculations to the Company and
Cooper within thirty (30) days after a Payment is made.  In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change in Control, Cooper shall appoint another nationally recognized
accounting firm to make the determinations required under this paragraph (which
accounting firm shall then be referred to as the “Accounting Firm”).  All fees and expenses of the Accounting Firm
in connection with the work it performs pursuant to this paragraph shall be
promptly paid by the Company.  A Gross-Up
Payment (as determined pursuant to this paragraph) shall be paid by the Company
to Cooper within five (5) days of the receipt of the Accounting Firm’s
determination.  If the Accounting Firm
determines that no Excise Tax is payable by Cooper, it shall furnish Cooper
with a written opinion that failure to report the Excise Tax on Cooper’s
applicable federal income tax return would not result in the imposition of a
negligence or a similar penalty.  Any
determination by the Accounting Firm shall be binding upon the Company and Cooper.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm, it is possible that Gross-Up Payments
which will not have been made by the Company should have been made (“Underpayment”).  In the event that the Company exhausts its
remedies pursuant to paragraph (c) below, and Cooper is thereafter
required to make a payment of Excise Tax, the Accounting Firm shall promptly
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be paid by the Company to Cooper within five (5) days
after such determination.

 

4

 

                (c)           Contest.  Cooper shall notify the Company in writing of
any claim made by the Internal Revenue Service that, if successful, would
require the Company to pay a Gross-Up Payment. 
Such notification shall be given as soon as practicable but no later
than ten (10) business days after Cooper knows of such claim and shall
apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid.  Cooper
shall not pay such claim prior to the expiration of the thirty (30) day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due).  If the Company notifies Cooper
in writing prior to the expiration of such period that it desires to contest
such claim, Cooper shall:

 

                                                                (i)            give the Company any information
reasonably requested by the Company relating to such claim;

 

                                                                (ii)           take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, without limitation, accepting legal representation with respect
to such claim by an attorney selected by the Company and reasonably acceptable
to Cooper;

 

                                                                (iii)          cooperate with the Company in good
faith in order effectively to contest such claim;

 

                                                                (iv)          permit the Company to participate in
any proceedings relating to such claim; provided, however, that the Company
shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall
indemnify and hold Cooper harmless, on an after-tax basis, for any Excise Tax
or income tax, including interest and penalties with respect thereto, imposed
as a result of such representation and payment of costs and expenses.  Without limitation on the foregoing provisions
of this paragraph (c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct Cooper to pay the tax, interest and penalties claimed and sue for a
refund or contest the claim in any permissible manner, and Cooper agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs Cooper
to pay such claim and sue for a refund, the Company shall advance, on an
interest-free basis, the amount of such payment to Cooper together with any
Excise Tax and income taxes imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment
of taxes for the taxable year of Cooper with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Cooper shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.

 

5

 

                (d)           If,
after the receipt by Cooper of an amount advanced by the Company pursuant to
paragraph (c), Cooper becomes entitled to receive any refund with respect to
such claim, Cooper shall (subject to the Company’s complying with the
requirements of paragraph (c)) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after any income or
other taxes applicable thereto and assessed on Cooper have been paid by Cooper
from such refund).  If, after the receipt
by Cooper of an amount advanced by the Company pursuant to paragraph (c), a
determination is made that Cooper shall not be entitled to any refund with
respect to such claim and the Company does not notify Cooper in writing of its
intent to contest such denial of refund prior to the expiration of thirty (30)
days after such determination, then such advance shall be forgiven and shall
not be required to be repaid and the amount of such advance shall offset, to
the extent thereof, the amount of Gross-Up Payment required to be paid.

 

                (e)           Section 409A
of the Internal Revenue Code.  The
arrangements described in this Agreement and the Award Agreements are intended
to comply with Section 409A of the Internal Revenue Code to the extent
such arrangements are subject to that law. 
The parties agree that they will negotiate in good faith regarding
amendments necessary to bring this Agreement into compliance with the terms of
that Section or an exemption therefrom as interpreted by guidance issued
by the Internal Revenue Service.  The
parties further agree that to the extent any part of this Agreement fails to
qualify for exemption from or satisfy the requirements of Section 409A,
the affected arrangement may be operated in compliance with Section 409A
pending amendment to the extent authorized by the Internal Revenue
Service.  In such circumstances Company
will administer this Agreement in a manner which adheres as closely as possible
to the existing terms and intent of the Agreement while complying with Section 409A.  This paragraph does not restrict Company’s
rights (including, without limitation, the right to amend or terminate) with
respect to this Agreement to the extent such rights are reserved under the
terms of this Agreement.

 

                7.             Attorney’s Fees. 
In the event
of a dispute between the Company and Cooper relating to the Cooper’s services
hereunder or the terms or performance of this Agreement, the Company shall
promptly pay Cooper’s reasonable expenses of attorney’s fees and expenses in
connection with such dispute upon delivery of periodic billings for same,
provided that (i) Cooper shall promptly repay all amounts paid under this
paragraph 7 at the conclusion of such dispute if the resolution thereof
includes a finding that Cooper did not act in good faith in the matter in
dispute or in the dispute proceeding itself, and (ii) no claim for
expenses of attorney’s fees and expenses shall be submitted by Cooper unless
made in writing to the Board of Directors within one year of the performance of
the services for which such claim is made.

 

                8.             Other
Benefits.  The benefits provided
under this Agreement shall, except to the extent otherwise specifically
provided herein, be in addition to, and not in derogation or diminution of, any
benefits that Cooper or his beneficiary may be entitled to receive under any
other plan or program now or hereafter maintained by the Company or TCF Subsidiaries.

 

                9.             Successors.  The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
to all or substantially all of the business and/or assets of the Company, to
expressly assume and agree to perform its obligations under this Agreement in
the same manner and to the same extent that the Company would be required to 

 

6

 

perform them if no
succession had taken place unless, in the opinion of legal counsel mutually
acceptable to the Company and Cooper, such obligations have been assumed by the
successor as a matter of law.  Cooper’s
rights under this Agreement shall inure to the benefit of, and shall be
enforceable by, Cooper’s legal representative or other successors in interest,
but shall not otherwise be assignable or transferable.

 

                10.           Other
Agreements.  This Agreement supersedes
and replaces effective the date hereof all prior agreements or understandings relating
to the terms of Cooper’s service with the Company, including the Chairman’s Agreement
and the Supplement, except as set forth herein. 
Except as specifically provided herein, this Agreement does not
supersede or replace any agreement between the Company and Cooper pursuant to
any plans or programs of the Company, including any stock option agreement,
restricted stock agreement or supplemental retirement agreement.

 

                11.           Governing Law. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of Minnesota.

 

                12.           Parties to this Amended and Restated Agreement.  TCF National Bank was a party to the Chairman’s
Agreement and the Supplement but will not be a party to this Amended and
Restated Agreement except to indicate by its signature below that it has
consented to its removal as a party.

 

                IN WITNESS WHEREOF, the parties
have duly executed this Agreement as of the day and year first written above.

 

	
   

  	
  TCF
  FINANCIAL CORPORATION

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gregory J. Pulles

  
	
  /s/
  Pamela J. Gordley

  	
  Its:

  	
  Vice
  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Pamela J. Gordley

  	
   

  	
  /s/
  William A. Cooper

  
	
   

  	
   

  	
  William A. Cooper

  
	
   

  	
   

  	
   

  

 

7

 

TCF
National Bank acknowledges and agrees that as provided in paragraph 12 above,
it will not be a party to this Amended and Restated Agreement.

 

	
   

  	
  TCF
  NATIONAL BANK

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Joseph T. Green

  
	
  /s/
  Pamela J. Gordley

  	
  Its:

  	
   Senior Vice President

  

 

8Exhibit 10.1

 

FORBEARANCE AGREEMENT

 

THIS
FORBEARANCE AGREEMENT, dated as of July 31, 2008, is entered into by and
among the financial institutions identified on the signature pages hereto
(collectively, the “Lenders”), U.S. Bank National Association, as administrative
agent for the Lenders (in such capacity, the “Agent”), Westaff (USA), Inc.,
a California corporation (the “Borrower”), and Westaff, Inc., a
Delaware corporation and the sole shareholder of the Borrower, as parent
guarantor (the “Parent Guarantor”), with reference to
the following facts:

 

RECITALS

 

A.            The Borrower, the Parent Guarantor, the Agent and the
Lenders are parties to a Financing Agreement, dated as of February 14,
2008, as amended (collectively, the “Financing Agreement”), pursuant to
which the Agent and the Lenders provide certain credit facilities to the
Borrower.

 

B.            An Event of Default (the “Existing Event of Default”)
has occurred and is continuing under Section 11.1(b)(1) of the
Financing Agreement.  The Existing Event
of Default was caused by the Borrower’s failure to comply with Section 10.28
of the Financing Agreement, due to the Borrower’s failure to achieve a Fixed
Charge Coverage Ratio of at least 1.25 to 1.00 for the Applicable Period ended April 19,
2008.

 

C.            The Borrower and the Parent Guarantor have requested that
the Agent and the Lenders temporarily forbear from exercising their available
default rights and remedies under the Financing Agreement, the other Loan
Documents, applicable law and equity (collectively, “Default Rights and
Remedies”) in response to the occurrence and continuance of the Existing
Event of Default, and the Agent and the Lenders are willing to do so on the
terms and conditions set forth below.

 

NOW, THEREFORE, the parties
hereby agree as follows:

 

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

 

2.             Limited Forbearance Agreement.  So long as no additional Events of Default
occur during such period, the Agent and the Lenders hereby agree to forbear
from exercising any of their Default Rights and Remedies in response to the
occurrence and continuance of the Existing Event of Default throughout the
period commencing on the date of this Agreement and ending on August 26,
2008 (the “Forbearance Period”).

 

3.             No Waiver. 
The agreement of the Agent and the Lenders under Section 2 of this
Agreement conditionally to forbear from exercising their Default Rights and
Remedies throughout the Forbearance Period shall not constitute a waiver of any
of their Default Rights and Remedies, and the Agent and the Lenders hereby
expressly reserve all such Default Rights and Remedies.

 

 

4.             Reduction of Revolving Credit Facility.  The aggregate amount of the Revolving Credit
Commitments of the Lenders has been reduced from $50,000,000 to $33,000,000,
effective as of June 23, 2008.

 

5.             Reserve
for Payroll and Payroll Taxes.  The
Agent shall maintain a reserve against Revolving Credit Availability to cover
the Borrower’s payroll and payroll tax obligations.  The required amount of such reserve shall be
based upon the assumptions that the Borrower’s weekly payroll obligations total
$4,400,000 and that the Borrower’s weekly federal and state payroll tax
obligations total $135,000.  The Agent
shall adjust the required amount of the reserve if the Borrower’s actual weekly
payroll obligations total materially more (or less) than $4,400,000 or if the
Borrower’s actual weekly unemployment taxes total materially more (or less)
than $135,000.  The Agent shall add
$135,000 to such reserve each week.  Upon
the Agent’s receipt of evidence of the Borrower’s payment of all of its weekly
federal and state payroll tax obligations for the preceding quarter, the Agent
shall relieve the entire amount of the cumulative weekly reserves imposed by
the Agent for such quarter and thereafter shall add $135,000 to the reserve for
each week of the following quarter. The reserve against Revolving Credit
Availability under this Section 5 shall be reduced by the $5,000,000 of
cash which the Borrower maintains in a deposit account at U.S. Bank National
Association.

 

6.             Field Examination.  The Borrower shall assist and cooperate with
the Agent’s field examiners in connection with the audit and examination of the
Borrower’s books and records currently being conducted by the Agent.

 

7.             FTI
Report.  FTI Consulting Inc. shall
complete and deliver to the Agent  its
final report on the Borrower’s operations no later than July 31,
2008.  Such report shall include a
13-week cash flow forecast and a 12-month projection, including a Borrowing
Base calculation.

 

8.             Return of Travelers Letter of Credit.  The Borrower shall use its best efforts to
cause The Travelers Indemnity Company (“Travelers”) as  promptly as practicable to return to the LC
Issuer the original, undrawn Letter of Credit in the face amount of
$27,000,0000 issued by the LC Issuer to Travelers.  The Borrower shall offer to provide Travelers
cash collateral in the amount of $27,000,000 in exchange for the Borrower’s
requested return of such Letter of Credit, and the Borrower shall obtain such
cash collateral by requesting a Revolving Loan under the Financing Agreement.

 

9.             Continued Imposition of Default Interest.  The Agent shall continue to assess interest
on the Obligations at the Default Rate throughout the Forbearance Period.

 

10.           Twice
Weekly Delivery of Borrowing Base Certificates; Updated Receivables Agings.  Notwithstanding anything to the contrary set
forth in Section 8.3 of the Financing Agreement, the Borrower shall
deliver a Borrowing Base Certificate to the Agent not less frequently than
twice each week.  With each such delivery
of a Borrowing Base Certificate, the Borrower shall deliver to the Agent an
aging of the Eligible Billed Receivables, so that the Agent can adjust the
amount of such Receivables that are outstanding more than 90 days after their
invoice date, in relation to the amount of such aged 

 

 

Receivables reflected in the immediately preceding Borrowing Base
Certificate delivered by the Borrower to the Agent.

 

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

 

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

 

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

 

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

 

12.           Forbearance Fee. 
In consideration of the agreement of the Agent and the Lenders to enter
into this Agreement and hereby conditionally forbear from exercising their
available Default Rights and Remedies throughout the Forbearance Period, the
Borrower shall pay to the Agent, for the ratable benefit of the Lenders, a
one-time forbearance fee in the amount of $50,000 (the “Forbearance Fee”).  The Forbearance Fee shall be fully-earned,
non-refundable and due and payable in one lump sum on the date of this
Agreement.  The Borrower and the Parent
Guarantor acknowledge and agree that the Agent shall effect payment of the
Forbearance Fee when due by charging the full amount thereof to the Borrower’s
Revolving Loans account.

 

13.           Conditions Precedent.  The effectiveness of this Agreement shall be
subject to the prior satisfaction of each of the following conditions:

 

                      (a)  This Agreement.  The Agent shall have received this Agreement,
duly executed by the Borrower, the Parent Guarantor and each of the Lenders;
and

 

 

                (b)  Replacement Notes. The Agent shall
have received a replacement Note for each Lender, in the principal amount of
such Lender’s Revolving Credit Commitment, as reduced hereby, duly executed by
the Borrower, and each Lender shall have returned its original Note to the
Agent for cancellation and return to the Borrower.

 

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

 

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

 

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

 

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

 

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

 

 

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

 

 

	
   

  	
  WESTAFF
  (USA), INC.,

  
	
   

  	
  a
  California corporation,

  
	
   

  	
  as
  the Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Christa C. Leonard

  
	
   

  	
  Name:

  	
  Christa
  C. Leonard

  
	
   

  	
  Title:

  	
  SVP
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
  WESTAFF,
  INC.,

  
	
   

  	
  a
  Delaware corporation,

  as the Parent Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Christa C. Leonard

  
	
   

  	
  Name:

  	
  Christa
  C. Leonard

  
	
   

  	
  Title:

  	
  SVP
  CFO

  

 

 

	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as
  the Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Daryl A. Jagstrp,

  
	
   

  	
   

  	
  Daryl
  A. Hagstrom

  
	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Daryl A. Hagstrom

  
	
   

  	
   

  	
  Daryl
  A. Hagstrom

  
	
   

  	
   

  	
  Vice
  President

  

 

 

	
   

  	
  WELLS
  FARGO BANK,

  
	
   

  	
  NATIONAL ASSOCIATION,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Supremna Thurmond

  
	
   

  	
   

  	
  Supremna M. Thurmond

  
	
   

  	
   

  	
  Relationship Manager

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