Document:

QuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.8.20.3  

 
 

THIRD AMENDMENT TO
  MULTICURRENCY CREDIT AGREEMENT,
  LIMITED WAIVERS
  AND CONSENT OF GUARANTORS    
    

        This THIRD AMENDMENT TO MULTICURRENCY CREDIT AGREEMENT, LIMITED WAIVERS AND CONSENT OF GUARANTORS (this
"Amendment") is dated as of September 3, 2003, and entered into by and among  WESTAFF, INC., a Delaware corporation ("Parent"), WESTAFF
(USA), INC., a California corporation ("US Borrower"), WESTAFF (U.K.)
LIMITED, a limited liability company incorporated under the laws of England and Wales ("UK Borrower"),  WESTAFF SUPPORT, INC.,
a California corporation ("Term Borrower", and together with US Borrower
and UK Borrower, the "Borrowers"), the financial institutions signatory hereto that are parties as Lenders to the Credit Agreement referred to below
(the "Lenders"), and GENERAL ELECTRIC CAPITAL CORPORATION, as agent for the US Revolving Lenders, the
Term Lenders and the UK Revolving Lenders (as defined in the Credit Agreement referred to below). 

Recitals  

        Whereas, the Parent, the Borrowers, the Lenders and Agents have entered into that certain
Multicurrency Credit Agreement dated as of May 17, 2002 (as amended by that certain First Amendment to Multicurrency Credit Agreement, Limited Waivers and Consent of Guarantors, dated as of
October 31, 2002, and as further amended by that certain Second Amendment to Multicurrency Credit Agreement, Limited Waivers and Consent of Guarantors, dated as of June 13, 2003, the
"Credit Agreement"; capitalized terms used in this Amendment without definition shall have the meanings given such terms in the Credit Agreement); and 

        Whereas, the Borrowers have requested that the Lenders agree to permit US Borrower to incur and repay certain
revolving indebtedness pursuant to an Unsecured Subordinated Draw Down Note, to be dated as of the date hereof (the "Subordinated Draw Down Note") and
executed by the US Borrower in favor of W. Robert Stover (the "Subordinated Creditor"); and 

        Whereas, the obligations under such Subordinated Draw Down Note are to be treated as Additional Subordinated Debt under the Credit
Agreement; 

        Whereas, the Requisite Lenders are willing to permit such incurrence, on the terms and conditions set forth in
this Amendment (which Amendment shall be effective as of the date that all conditions to such effectiveness set forth herein have been satisfied (the "Effective
Date")). 

        Now, therefore, in consideration of the premises and the mutual agreements set forth herein, the Parent, the Borrowers, the Lenders, and
Agents agree as follows: 

        1.     AMENDMENTS TO CREDIT AGREEMENT. Subject to the conditions and upon the terms set forth in this Amendment, the Credit
Agreement is hereby amended as follows: 

        1.1   Amendment to Annex A of the Credit Agreement. Annex A to the Credit Agreement is hereby amended to add the following
definition in the proper alphabetical sequence: 

        "'Subordinated Draw Down Note' means that certain Unsecured Subordinated Draw Down Note dated as of September    , 2003 and
executed by US Borrower in favor of W. Robert Stover evidencing borrowings made from time to time thereunder by US Borrower in an amount not to exceed $1,000,000. For the avoidance of doubt,
obligations under the Subordinated Draw Down Note are Additional Subordinated Debt." 

 

        1.2   Amendment to Section 1.3(b)(iii) of the Credit Agreement.
Section 1.3(b)(iii) is hereby amended in its entirety to read as follows: 

        "(iii) If
any Credit Party issues Stock (other than directors qualifying shares and other than the issuance of Stock of Parent upon exercise of warrants, options and purchasing
rights pursuant to incentive, stock option and employee purchasing plans) or incurs Indebtedness (other than as expressly permitted by  Section 6.3 but including any Subordinated Debt and Additional
Subordinated Debt issued after the Closing Date), no later than the Business Day
following the date of receipt of the proceeds thereof, Parent shall contribute the proceeds to Borrowers and all Borrowers (in the case of an
issuance by Parent or any other Guarantor) or the issuing Borrower shall prepay the Loans in an amount equal to all such proceeds, net of underwriting discounts and commissions and other reasonable
costs, fees and expenses paid to non-Affiliates in connection therewith. Any such prepayment shall be applied in accordance with  Section 1.3(c). Notwithstanding the foregoing, in the event of any
such issuance by UK Borrower, only the UK Revolving Loans shall be prepaid
with the net proceeds of such issuance." 

        1.3   Amendment to Section 6.3(a)(vii) of the Credit Agreement.
Section 6.3(a)(vii) is hereby amended in its entirety to read as follows: 

        "(vii) Additional
Subordinated Debt, provided that (A) (except with respect to the Subordinated Draw Down Note) such Indebtedness does not provide for any scheduled
principal payments until all Obligations have been paid in full and all Commitments have been terminated, and (B) immediately prior to and after giving effect to such Indebtedness, no Default
or Event of Default shall have occurred and be continuing and such Indebtedness is subordinated on terms satisfactory in all respects to the Applicable Agent in its sole discretion;" 

        1.4   Amendment to Section 6.3(b) of the Credit Agreement. Section 6.3(b) is hereby
amended in its entirety to read as follows: 

        "(b) No
Credit Party shall, directly or indirectly, voluntarily purchase, redeem, defease or prepay before the scheduled payment date therefore any principal of, premium, if
any, interest or other amount payable in respect of any Indebtedness, other than (i) the Obligations; (ii) the Refinancing; (iii) Indebtedness secured by a Permitted Encumbrance
if the asset securing such Indebtedness has been sold or otherwise disposed of in accordance with Sections 6.8(b) or (c); (iv) Indebtedness
permitted by Section 6.3(a)(v) upon any refinancing thereof in accordance with  Section 6.3(a)(v); (v) intercompany Indebtedness owed to a
Borrower; (vi) other Indebtedness (excluding Subordinated Debt) not in
excess of $250,000; (vii) the Subordinated Debt solely to the extent that payment is permitted under Section 6.14; and (viii) the
Subordinated Draw Down Note solely to the extent that payment is permitted under Section 6.14(e)." 

        1.5   Amendment to Section 6.14(e) of the Credit Agreement. Section 6.14(e) of the Credit Agreement is hereby
amended in its entirety to read as follows: 

        "(e)
(i) with respect to Subordinated Debt and Additional Subordinated Debt (other than the Subordinated Draw Down Note) scheduled payments of interest;  provided, that (A) no Default or Event of
Default has occurred and is continuing or would result after giving effect to any Restricted Payment
pursuant to clause (e)(i) above; (B) Borrowers collectively shall have aggregate Borrowing Availability of the US Dollar Equivalent of at
least fifteen percent (15%) of the Aggregate Borrowing Base (but in no event less than the US Dollar Equivalent of $5,000,000) after giving effect to any Restricted Payment pursuant to  clause (e)(i) above; and (C) the timing of the Restricted Payments referred to in  clause (e)(i) above shall be set at 

2

 

dates
that permit the delivery of Fiscal Period Financial Statements set forth in clause (a) of Annex E prior to each such payment; and
(ii) with respect to the Subordinated Draw Down Note, scheduled payments of principal and interest, provided that prior to and immediately after
giving effect to such Restricted Payment, (A) no Default or Event of Default has occurred and is continuing or would result after giving effect to any Restricted Payment pursuant to  clause (e)(ii) above; (B) the US Borrower shall have maintained and upon giving effect to any Restricted Payment pursuant to  clause (e)(ii) above, will have both (1) an average daily Borrowing
Availability with respect to the US Borrowing Base of not less than
$2,500,000 for the period including the proposed date of such Restricted Payment (after having given effect to such payment) and the twenty-two (22) Business Days immediately prior
to the proposed date of such Restricted Payment, and (2) a daily Borrowing Availability with respect to the US Borrowing Base of not less than $1,000,000 for each of the twenty-two
(22) Business Days immediately prior to the proposed date of such Restricted Payment and for the proposed date of such Restricted Payment (after having given effect to such payment); and
(C) US Agent shall have received a certificate from the Financial Officer of the US Borrower prior to the making of any Restricted Payment under this  clause (e)(ii) above certifying that
(1) no Default or Event of Default exists immediately prior to or would result from the making of any
Restricted Payment under this clause (e)(ii), and (2) any such Restricted Payment is being made in accordance with and is not otherwise
prohibited by this Section 6.14(e)(ii), which certificate shall set forth in reasonable detail the calculations required in order to deliver such
certificate;" 

        1.6   Amendment to Section 6.14(x) of the Credit Agreement. Section 6.14(x) of the Credit Agreement
is hereby amended to be clause "(i)" and such clause is further amended in its entirety to read as follows: 

        "(i) payment
of up to $1 million of principal of Subordinated Debt from the proceeds of a sale of the Mortgaged Properties;  provided that (y) the Term Loan has been repaid in full, and (z) no Default
or Event of Default has occurred and is continuing or would
result after giving effect to any Restricted Payment pursuant to this clause (i);" 

        1.7   Amendment to Section 11.8 of the Credit Agreement. Section 11.8 of the Credit Agreement is hereby amended
to add the following new paragraph at the end of such Section: 

"Notwithstanding
anything to the contrary set forth herein or in any other written or oral understanding or agreement to which the parties hereto are parties or by which they are bound, the parties
acknowledge and agree that (i) any obligations of confidentiality contained herein and therein do not apply and have not applied from the commencement of discussions between the parties to the
tax treatment and tax structure of the transactions contemplated hereby (and any related transactions or arrangements), and (ii) each party (and each of its employees, representatives, or other
agents) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure, all within the meaning of Treasury Regulations Section 1.6011-4;
provided, however, that each party recognizes that the privilege each has to maintain, in its sole discretion, the confidentiality of a communication relating to the transaction contemplated hereby,
including a confidential communication with its attorney or a confidential communication with a federally authorized tax practitioner under Section 7525 of the Internal Revenue Code, is not
intended to be affected by the foregoing. The preceding sentence is intended to cause the transaction contemplated by this Agreement to be treated as not having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations promulgated under Section 6011 of the IRC, and shall be
construed in a 

3

 

manner
consistent with such purpose. In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the federal tax structure of the transaction contemplated by this
Agreement or any federal tax matter or federal tax idea related to the transaction contemplated by this Agreement." 

        2.     LIMITED WAIVERS. Subject to the satisfaction of the conditions set forth herein, the Lenders hereby agree that,
notwithstanding the restrictions set forth in the Credit Agreement regarding investments in Affiliates who are not Credit Parties set forth in Section 6.3(a)(x)(K) of the Credit Agreement and
the restrictions on transactions among Affiliates set forth in Section 6.4 of the Credit Agreement, the Agents and Lenders hereby agree that for a period not to exceed twelve months from the
date hereof, US Borrower may accrue, and Westaff Australia may defer the making of, royalty payments (the "Deferred Royalty Payments") that would
otherwise be required to be paid by Westaff Australia to the US Borrower pursuant to that certain License and Royalty Agreement (Australia), dated October 28, 1997, but solely to the extent
that (i) Westaff Australia is expressly prohibited from making such Deferred Royalty Payments under the terms of the Australian Loan Documents, as amended through the date hereof, and
(ii) the aggregate amount of such Deferred Royalty Payments does not exceed Australian $1,300,000 at any time. The waiver herein provided shall be limited precisely as written, shall apply
solely with respect to the Deferred Royalty Payments, and nothing contained in this Amendment shall be deemed to constitute a waiver of any Default or Event of Default or provision of the Credit
Agreement, or any consent to departure from the terms of the Credit Agreement. 

        3.     REPRESENTATIONS AND WARRANTIES OF PARENT AND THE BORROWERS. The Credit Parties (other than UK Borrower), jointly and
severally, and UK Borrower, only in respect of itself, severally, make the following representations and warranties to each Lender and each Agent with respect to all Credit Parties: 

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

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

        3.3   Execution, Delivery and Enforceability. This Amendment and the Consent have been duly executed and delivered by each
Credit Party which is a party thereto and constitute the legal, valid and binding obligations of such Credit Party, enforceable in accordance with their terms, except as enforceability may be limited
by Insolvency Laws or similar laws affecting creditors' rights generally or by general equitable principles. 

4

 

        3.4   Additional Subordinated Debt. The US Borrower has delivered to US Agent a complete and correct copy of the Subordinated
Draw Down Note (including all schedules, exhibits, amendments, supplements, modifications, assignments and all other documents delivered pursuant thereto or in connection therewith). US Borrower has
the corporate power and authority to incur the Indebtedness evidenced by the Subordinated Draw Down Note. All Obligations, including the Letter of Credit Obligations and Obligations under the
Guaranties constitute senior indebtedness entitled to the benefits of the subordination provisions contained in the Subordinated Draw Down Note. The Borrowers acknowledge that each Agent and each
Lender are entering into this Amendment in reliance upon the subordination provisions of the Subordinated Draw Down Note and the representations contained herein. 

        3.5   No Default or Event of Default. No event has occurred and is continuing after giving effect to this Amendment or will
result from the execution and delivery of this Amendment or the Consent that would constitute a Default or an Event of Default. 

        3.6   Representations and Warranties. After giving effect to this Amendment, each of the representations and warranties
contained in the Loan Documents is and will be true and correct in all material respects on and as of the date hereof and as of the effective date of this Amendment, except to the extent that such
representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects as of such earlier date. 

        4.     CONDITIONS TO EFFECTIVENESS OF THIS AMENDMENT. This Amendment shall be effective only if and when (i) signed by,
and when counterparts hereof shall have been delivered to the US Agent (by hand delivery, mail or telecopy) by, the Parent, the Borrowers and the Requisite Lenders, (ii) each Guarantor shall
have delivered to the US Agent executed counterparts of the Consent and (iii) US Agent shall have received an executed copy of the Subordinated Draw Down Note (including all schedules,
exhibits, amendments, supplements, modifications, assignments and all other documents delivered pursuant thereto or in connection therewith), in form and substance and containing subordination
provisions satisfactory to the US Agent (which documents shall be certified by an officer of the US Borrower as being true, complete and correct). 

        5.     EFFECT OF AMENDMENT; RATIFICATION. This Amendment is a Loan Document. From and after the date on which this Amendment
becomes effective, all references in the Loan Documents to the Credit Agreement shall mean the Credit Agreement as amended hereby. Except as expressly amended or waived hereby, the Credit Agreement
and the other Loan Documents, including the Liens granted thereunder, shall remain in full force and effect, and all terms and provisions thereof are hereby ratified and confirmed. Each of the Parent
and each Borrower confirms that as amended hereby, each of the Loan Documents is in full force and effect. 

        6.     RELEASE AND WAIVER OF CLAIMS. DEFENSES AND RIGHTS OF SET OFF. Each of Parent and the Borrowers acknowledges that the US
Agent, the UK Agent and the Lenders have performed all obligations and duties owed to Parent and the Borrowers under the Loan Documents through the date hereof, and each such party further,
acknowledges, represents and warrants that, none of Parent or the Borrowers has any claim, cause of action, defense, or right of set off against the US Agent, the UK Agent or the Lenders, and, to the
extent that any such party has any such rights, each of the Parent and the Borrowers hereby releases, waives, and forever discharges the US Agent, the UK Agent and the Lenders (together with each of
their predecessors, successors and assigns) and each of their officers, directors employees, agents and representative 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. 

        7.     APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS AND 

5

 

DECISIONS
OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES. 

        8.     COMPLETE AGREEMENT. This Amendment sets forth the complete agreement of the parties in respect of any amendment to any of
the provisions of any Loan Document. The execution, delivery and effectiveness of this Amendment do not constitute a waiver of any Default or Event of Default, amend or modify any provision of any
Loan Document except as expressly set forth herein or constitute a course of dealing or any other basis for altering the Obligations of any Credit Party. 

        9.     CAPTIONS; COUNTERPARTS. The catchlines and captions herein are intended solely for convenience of reference and shall not
be used to interpret or construe the provisions hereof. This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts (including by telecopy),
all of which taken together shall constitute but one and the same instrument. 

6

        IN WITNESS WHEREOF, each of the undersigned has duly executed this Third Amendment to Multicurrency Credit Agreement, Limited Waivers and
Consent of Guarantors as of the date set forth above. 

	 	 	WESTAFF (USA), INC.
	

 	
 	

By:	

/s/  DIRK A. SODESTROM      
	
 	

 
	 	 	Name:	Dirk A. Sodestrom	 	 
	 	 	Title:	Senior Vice President and Chief Financial Officer	 	 
	 	 	 	 	 	 
	

 	
 	
WESTAFF SUPPORT, INC.
	

 	
 	

By:	

/s/  DIRK A. SODESTROM      
	
 	

 
	 	 	Name:	Dirk A. Sodestrom	 	 
	 	 	Title:	Senior Vice President and Chief Financial Officer	 	 
	 	 	 	 	 	 
	

 	
 	
WESTAFF (U.K.) LIMITED
	

 	
 	

By:	

/s/  DWIGHT S. PEDERSEN      
	
 	

 
	 	 	Name:	Dwight S. Pedersen	 	 
	 	 	Title:	Director	 	 
	 	 	 	 	 	 
	

 	
 	
GENERAL ELECTRIC CAPITAL CORPORATION,

as US Agent, UK Agent, a US Revolving Lender, a Term Lender and a UK Revolving Lender
	

 	
 	

By:	

/s/  LAWRENCE E. RIDGWAY      
	
 	

 
	 	 	By:	Lawrence E. Ridgway	 	 
	 	 	Duly Authorized Signatory	 	 
	 	 	 	 	 	 
	

 	
 	
BANK OF AMERICA, N. A.,
 as Documentation Agent, a US Revolving Lender, a Term Lender and a UK Revolving Lender
	

 	
 	

By:	

/s/  PHILIP J. SEFCHOVICH      
	
 	

 
	 	 	Name:	Philip J. Sefchovich	 	 
	 	 	Title:	Assistant Vice President	 	 

S-1

        The
following Persons are signatories to this Third Amendment to Multicurrency Credit Agreement, Limited Waivers and Consent of Guarantors in their capacity as Credit Parties and not as
Borrowers. 

	 	 	WESTAFF, INC.
	

 	
 	

By:	

/s/  DIRK A. SODESTROM      
	
 	

 
	 	 	Name:	Dirk A. Sodestrom	 	 
	 	 	Title:	Senior Vice President and Chief Financial Officer	 	 
	 	 	 	 	 	 

S-1

CONSENT OF GUARANTORS  

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

[signatures following; remainder of page intentionally left blank]

Consent-1

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

	 	 	WESTAFF, INC.
	

 	
 	

By:	

/s/  DIRK A. SODESTROM      
	
 	

 
	 	 	Name:	Dirk A. Sodestrom	 	 
	 	 	Title:	Senior Vice President and Chief Financial Officer	 	 
	 	 	 	 	 	 
	

 	
 	
WESTERN MEDICAL SERVICES, INC.,

a California corporation
	

 	
 	

By:	

/s/  GARY A. KITTLESON      
	
 	

 
	 	 	Name:	Gary Kittleson	 	 
	 	 	Title:	Executive Vice President, Chief Financial Officer and Secretary	 	 
	 	 	 	 	 	 
	

 	
 	
WESTAFF (USA), INC.
	

 	
 	

By:	

/s/  DIRK A. SODESTROM      
	
 	

 
	 	 	Name:	Dirk A. Sodestrom	 	 
	 	 	Title:	Senior Vice President and Chief Financial Officer	 	 
	 	 	 	 	 	 
	

 	
 	
WESTAFF SUPPORT, INC.
	

 	
 	

By:	

/s/  DIRK A. SODESTROM      
	
 	

 
	 	 	Name:	Dirk A. Sodestrom	 	 
	 	 	Title:	Senior Vice President and Chief Financial Officer	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

Consent
Signatures-1 

	

 	
 	

MEDIAWORLD INTERNATIONAL
	

 	
 	

By:	

/s/  DIRK A. SODESTROM      
	
 	

 
	 	 	Name:	Dirk A. Sodestrom	 	 
	 	 	Title:	Senior Vice President and Chief Financial Officer	 	 
	 	 	 	 	 	 

Consent
Signatures-2 

QuickLinks

THIRD AMENDMENT TO MULTICURRENCY CREDIT AGREEMENT, LIMITED WAIVERS AND CONSENT OF GUARANTORSQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.8.27    
    

 
  UNSECURED SUBORDINATED

  DRAW DOWN NOTE    
    

	$1,000,000 Maximum Principal Amount	 	September 25, 2003

Walnut Creek, California

         1.     Promise to Pay. This Unsecured Subordinated Draw Down Note (this "Note"), is
the promise of
WESTAFF (USA), INC., a California corporation ("Payor") to pay to W. Robert Stover, and his successors and assigns
("Holder"), the principal amount and all interest accrued upon the periodic loan disbursements made by Holder to the undersigned, (each, a
"Advance" and collectively, the "Advances")) in the aggregate principal amount not to exceed the sum of
ONE MILLION DOLLARS (US$1,000,000) (the "Maximum Principal Amount"). Upon the terms and conditions hereof, Payor hereby unconditionally promises to pay
to the order of Holder at such address as Holder shall hereinafter designate to Payor in writing, in lawful money of the United States of America and in immediately available funds, (a) the
lesser of (i) the Maximum Principal Amount, or (ii) so much thereof as may be borrowed hereunder; plus (b) interest on the outstanding principal balance of the Advances as
computed in the manner set forth in Section 4 below. 

        All
capitalized terms herein shall have the meanings as provided herein (including Section 15 below), and if not defined herein,
shall have the respective meanings as defined in Annex A of that certain Multicurrency Credit Agreement dated on or about May 17, 2002, by and
among Westaff (USA), Inc.,
Westaff (U.K.) Limited, and Westaff Support, Inc., as Borrowers, Westaff, Inc., as Guarantor, General Electric Capital Corporation, as Agent, and the Lenders signatory thereto (as
amended, supplemented, replaced, refinanced or otherwise modified from time to time, "Credit Agreement"). 

         2.     Drawdown of Advances.

        (a)   Payor
may request that Holder make a loan Advance hereunder upon a certification made by Payor that (i) the US Borrowing Availability is or will be insufficient
to meet Payor's working capital requirements, including a schedule showing the current US Borrowing Availability and a forecast of the projected US Borrowing Availability over the next twenty two
(22) Business Days; (ii) no Default or Event of Default exists under the Credit Agreement or, if such Default or Event of Default exists, the nature of such Default or Event of Default
and a discussion of the actions that Payor expects to take with respect thereto; and (iii) Payor does not reasonably expect that any Default or Event of Default will occur under the Credit
Agreement over the next twenty-two (22) Business Days or, if such Default or Event of Default is anticipated, the nature of such anticipated Default or Event of Default and a
discussion of the actions that Payor expects to take with respect thereto. 

        (b)   Upon
each request for an Advance made by Payor hereunder, Holder may, in his sole discretion and without any obligation to do so, loan an Advance of principal hereunder,
provided, however, that the aggregate Advances loaned to Payor hereunder shall not exceed the principal amount of $1,000,000 outstanding at any one time. 

        (c)   Advances
borrowed and repaid by Payor hereunder may be reborrowed by Payor pursuant to the terms hereof. 

        3.     Maturity.

        (a)   Subject
to the provisions of Section 6(c), the principal amount of each Advance from time to time outstanding
under this Note shall be due and payable on the earlier of (i) the date that is twenty-two (22) Business Days after such Advance is made hereunder (the
"Scheduled Payment Date"); or (ii) the one (1)-year anniversary of this Note (the "Final Maturity
Date"). 

 

        (b)   Subject
to the provisions of Section 6(c), Payor may prepay all or any portion of the principal amount of this
Note at any time, without penalty. 

        (c)   All
payments to Holder shall be accompanied by a certificate from an officer of Payor certifying that Payor is not prohibited from making payments under  Section 6(c) hereof. 

        4.     Interest Rate.

        (a)   Payor
shall pay interest to Holder on the outstanding and unpaid principal amount of each Advance at the rate (the "Interest
Rate") equal to the US Index Rate (as calculated under the Credit Agreement) plus seven percent (7%), calculated on the basis of a year of 365 days for the actual number
of days elapsed and compounded monthly, provided, however, that in no event shall the Interest Rate
exceed the maximum rate permitted by law. 

        (b)   Subject
to the provisions of Section 6(c), interest accruing on the principal amount of each Advance shall be paid
by Payor to Holder on the date that such Advance is repaid by Payor pursuant to Section 3 above. 

         5.     Application of Payments.     All payments received from Payor hereunder with respect to any Advance shall
be applied first, to the
payment of any unpaid interest accruing with respect to such Advance, and second, to reduce the principal balance of such Advance. 

         6.     Subordination. 

        (a)   Payor
and Holder agree that all payments under this Note are and shall be subordinate, to the extent and in the manner hereinafter set forth, in right of payment to the
prior cash payment in full of all of Payor's payment obligations now or hereafter existing in respect of any Senior Debt, whether for principal, interest, fees, expenses or otherwise (such payment
obligations being the "Senior Obligations"). 

        (b)   Senior
Debt Holders will be entitled to receive payment in full of all Senior Obligations due in respect of Senior Debt (including interest after the commencement of any
bankruptcy proceeding at the rate specified in the applicable Senior Debt, without regard to whether or not such interest is an allowed claim, but except for any contingent indemnity obligation)
before Holder will be entitled to receive any payment with respect to this Note, in the event of any distribution to creditors of Payor in connection with any of the following events: (i) in a
liquidation or dissolution of Payor; (ii) in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to Payor or its
property; (iii) in an assignment for the benefit of creditors; or (iv) in any marshaling of Payor's assets and liabilities. 

        (c)   Payor
may make principal and interest payments under this Note when due, except, as long as any Senior Obligations are outstanding, Payor may not make any principal or
interest payment in respect of this Note unless each of the following conditions are satisfied: 

        (i)    prior
to and after giving effect to a proposed payment hereunder, the US Borrower (as defined in the Credit Agreement) shall have maintained, and after giving effect to
such proposed payment, the US Borrower must have maintained, both (A) an average daily US Borrowing Availability of not less than two million five hundred thousand dollars ($2,500,000) for the
period including the proposed date of such payment (after having given effect to such payment) and the twenty-two (22) Business Days immediately prior to the proposed date of such
payment, and (B) a daily US Borrowing Availability of not less than one million dollars ($1,000,000) for each of the twenty-two (22) Business Days immediately prior to the
proposed date of such payment and for the proposed date of such payment (after having given effect to such payment); and 

2

 

        (ii)   no
default in the payment of principal of, interest or premium, if any, on any Senior Debt and no other event of default shall have occurred and be continuing or, after
giving effect to the payment to be made under this Note, would result, in each case, under the agreement, indenture or other document governing such Senior Debt; and 

        (iii)  no
default shall have occurred and be continuing with respect to any Senior Debt which, with the giving of notice or the passage of time, would permit the Agent or the
Senior Debt Holders to accelerate the maturity of the Senior Debt; or (B) after giving effect to the payment to be made in respect of this Note, a default would exist that, with the giving of
notice or the passage of time, would permit the Agent or the Senior Debt Holders to accelerate the maturity of the Senior Debt; and 

        (iv)  Payor
shall have delivered to Agent a certificate from the chief financial officer of the Payor prior to the making of any proposed payment hereunder certifying on
behalf of the Payor that such proposed payment to Holder hereunder is permitted under Section 6.14(e)(ii) of the Credit Agreement, which certificate shall set forth in reasonable detail
the calculations required in order to deliver such certificate. 

        (d)   Payments
on this Note may and shall be resumed when they are permitted to be made in accordance with Section 6(c),
and, in the case in which any such payments are not permitted solely as a result of the failure to satisfy a condition set forth in  Section 6(c)(ii), (iii) and (iv), when such
defaults
are cured or waived, such conditions are satisfied and such proposed payment may otherwise be made under Section 6(c). 

        (e)   In
the event that Holder receives any payment with respect to this Note at a time when such payment is prohibited by  Section 6(c) hereof or receives any amount in breach of the provisions set forth in
this  Section 6, such payment or amount (the "Unpermitted Payment") shall be held by Holder, in trust
for the benefit of the Senior Debt Holders. Upon written request of the Agent, Holder shall deliver the Unpermitted Payment in trust to the Agent to be applied to the Senior Obligations. 

        (f)    This
Section 6 defines the relative rights of Holder and Senior Debt Holders. Nothing in this Note shall: 

        (i)    impair,
as between Payor and Holder, the obligation of Payor, which is absolute and unconditional, to pay principal of and interest on this Note in accordance with its
terms; 

        (ii)   affect
the relative rights of Holder and creditors of Payor other than their rights in relation to Senior Debt Holders; and 

        (iii)  if
Payor fails because of this Section 6 to pay principal of or interest on this Note on the due date, the
failure is still a default hereunder. 

        (g)   No
right of any Senior Debt Holder to enforce the subordination of the indebtedness evidenced by this Note shall be impaired by any act or failure to act by Payor or
Holder or by the failure of Payor or Holder to comply with the terms of this Note. 

        (h)   Upon
any payment or distribution of assets of Payor referred to in Section 6(b), Holder shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any certificate of a representative or of the liquidating trustee or agent or other Person making any distribution to
Holder of this Note for the purpose of ascertaining the Persons entitled to participate in such distribution, the Senior Debt Holders and other indebtedness of Payor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 6. 

3

 

        (i)    For
the purposes of this Note, the Senior Obligations shall not be deemed to have been paid in full unless the Senior Debt Holders shall have received cash payment in
full of all Senior Obligations (whether matured or unmatured), with the exception of contingent indemnity obligations and all commitments to extend further financial accommodations under the Credit
Agreement shall have terminated. 

        (j)    Holder
(i) will not take, sue for, or demand from Payor payment of all or any portion of this Note (with the exception of a demand for a regularly scheduled
principal or interest payment for which payment is permitted under Section 6(c)); (ii) will not commence, or join with any creditor other
than the Senior Debt Holders in commencing, directly or indirectly, or cause Payor to commence, or assist Payor in commencing, any proceeding referred to in  Section 6(b); and (iii) will not
initiate, prosecute or participate in any claim, action or other proceeding challenging the
enforceability, validity, perfection or priority of the Senior Debt or any lien or security interest granted to secure the Senior Debt. 

        (k)   Holder
undertakes to promptly execute, verify, deliver and file any proofs of claim that the Senior Debt Holders may at any time require to prove and realize upon any
rights or claims pertaining to this Note and to effectuate the full benefit of the subordination contained herein; and upon failure of Holder so to do, the Senior Debt Holders shall be deemed to be
irrevocably appointed the agent and attorney-in-fact of Holder to execute, verify, deliver and file any such proofs of claim; provided, that neither the Agent nor any Senior
Debt Holder shall have any obligation to execute, verify, deliver or file such proof of claim. 

        (l)    The
Senior Debt Holders shall have the right to enforce the provisions of this Section 6. No right of the Senior
Debt Holders to enforce subordination as herein provided shall at any time or in any way be affected or impaired by any failure to act on the part of Payor or the Senior Debt Holders, or by any
noncompliance by Payor with any of the terms and provisions of this Note, regardless of any knowledge thereof that the Senior Debt Holders may have or be otherwise charged with. 

         7.     Subrogation. Subject to the payment in full of all the Senior Debt (other than contingent indemnity
obligations) and
termination of all commitments to extend further financial accommodations under the Credit Agreement and until this Note shall be paid in full, Holder shall be subrogated to the rights of the Senior
Debt Holders (to the extent of payments or distributions previously made to such Senior Debt Holders pursuant to the provisions of Section 6(e)
above) to receive payments or distributions of assets of Payor applicable to the Senior Debt. No such payments or distributions applicable to the Senior Debt shall, as between Payor and its creditors,
other than the Senior Debt Holders and Holder, be deemed to be a payment by Payor to or on account of this Note; and for the purposes of such subrogation, no payments or distributions to the Senior
Debt Holders to which Holder would be entitled except for the provisions of Section 6 shall, as between Payor and its creditors, other than the
Senior Debt Holders and Holder, be deemed to be a payment by Payor to or on account of the Senior Debt. If all or any part of any payment to the Senior Debt Holders is recovered from or required to be
repaid by any Senior Debt Holder, then this Agreement shall be reinstated and any payment or distribution to Holder at any time thereafter, whether pursuant to the right of subrogation or otherwise,
shall be deemed to have been received in trust for the Senior Debt Holders and promptly paid to the Agent to be applied to the Senior Debt. 

         8.     Usury Savings Provision. Under no circumstances (and notwithstanding any other provisions of this Note) shall the interest
charged, collected, or
contracted for on this Note exceed the maximum rate permitted by law. If any part of this Note cannot be enforced, this fact will not affect the rest of this Note. 

         9.     Reimbursement of Expenses. If Holder incurs any out-of-pocket expenses (including, without limitation, the fees and
expenses of Holder's attorneys) in connection with the placement of this Note 

4

 

in
the hands of its attorneys for collection, or if this Note is collected through any legal proceedings at law or in equity or in bankruptcy, receivership or other court proceedings, then Payor shall
pay to Holder, on demand, all reasonable costs and expenses of collection, including, but not limited to, court costs and reasonable attorneys' fees. 

         10.   Notices. Any confirmation, notice or any other communication provided for hereunder shall be in writing or by a telecommunications device
capable
of creating a written record, and shall be effective (a) upon personal delivery thereof, including without limitation, by overnight mail and courier service or the United States mail, certified
or registered, postage prepaid, return receipt requested, or (b) in the case of notice by such telecommunications device, when properly transmitted and confirmed by telephone, addressed to the
party to be noticed as follows: 

If
to Payor at: 

Westaff
(USA), Inc.

P.O. Box 9280

Walnut Creek, CA 94598

Attention: Treasurer

Telecopier No.: 925-930-5361

Telephone No.: 925-952-2502 

with
copies to: 

Westaff
(USA), Inc.

P.O. Box 9280

Walnut Creek, CA 94598

Attention: Chief Financial Officer

Telecopier No.: 925-934-5489

Telephone No.: 925-256-1518 

Westaff
(USA), Inc.

P.O. Box 9280

Walnut Creek, CA 94598

Attention: Legal Department

Telecopier No.: 925-937-0593

Telephone No.: 925-930-5380 

If
to Holder at: 

Mr. W.
Robert Stover

c/o Westaff (USA), Inc.

P.O. Box 9280

Walnut Creek, CA 94598 

or
to such other address as either party may hereafter designate for itself by written notice to the other party in the manner herein prescribed. 

        11.   Binding Nature; Assignment. This Note and all of the provisions hereof shall be binding upon and inure to the benefit of Payor and Holder
and
their respective successors and permitted assigns, but neither this Note nor any of the rights, interests or obligations hereunder shall be assigned or transferred by Payor without the prior written
consent of Holder. In no event shall any successor or assign of Payor, or any other party, other than Payor, be entitled to request Advances from Holder hereunder. The Senior Debt Holders shall be
entitled to rely upon the provisions set forth herein and are express beneficiaries of the subordination provisions set forth herein. 

5

 

         12.   Amendments and Waivers. 

        (a)   The
Senior Debt and any Senior Obligations may be amended, modified, increased, waived or extended, without notice to or consent of Holder, and such amendment,
modification, increase, waiver or extension shall not change or modify the subordinated nature of this Note or Holder's or Payor's obligations under  Section 6 hereof. 

        (b)   Except
as otherwise expressly provided herein, this Note may not be amended or modified except by written instruments signed by the Agent, Payor and Holder. Each waiver
or consent under any
provision hereof shall be effective only in the specific instances for the purpose for which it is given. Holder may delay or forego the enforcement of any of its rights or remedies under this Note or
any other document evidencing or securing this Note without losing them. Payor and any other Person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand
for performance, notice of non-performance, protest, notice of protest, notice of dishonor, notice of default, or any other notice whatsoever. Upon any change in the terms of this Note in
compliance with this Section 12 and unless otherwise expressly stated in writing, no party who signs this Note, whether as Payor, guarantor,
accommodation Payor or endorser, shall be released from liability. 

         13.   Applicable Law. THIS NOTE SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF
CALIFORNIA
WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS, PRINCIPLE OR RULE THAT MIGHT REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. 

        14.   Waiver of Jury Trial. EACH OF THE PARTIES HERETO WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR
ARISING OUT OF OR RELATED TO THIS NOTE, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS OR OTHERWISE. EACH PARTY HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS SUBORDINATION AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS SUBORDINATION AGREEMENT. 

         15.   Definitions. 

        (a)   For
the purposes of this Note, the terms below shall have the following meanings: 

        "Agent" means General Electric Capital Corporation, as agent for the Lenders under the
Credit Agreement, and its successors and assigns. 

        "Borrowing Availability" has the meaning given such term in the Credit Agreement. 

        "Business Day" has the meaning given such term in the Credit Agreement. 

        "Lenders" means each of the financial institutions party to the Credit Agreement from time to time. 

        "Credit Agreement" has the meaning set forth in the introductory paragraph hereto. 

6

 

        "Senior Debt Holders" means the Agent and the Lenders under the Credit Agreement and their respective successors, participants and
assigns, as permitted under the Credit Agreement. 

        "Senior Debt" means all amounts, loans, advances, debts, liabilities and obligations, tasks or duties (in each case, whether now or
hereafter existing, whether then required or contingent, or whether any such amounts are liquidated or determinable) owing to the Senior Debt Holders and arising under the Credit Agreement or any of
the other Loan Documents (as defined in the Credit Agreement). This term includes, without limitation, all principal, interest (including all interest that accrues after the commencement of any case
or proceeding by or against Payor or any other Credit Party (as defined in the Credit Agreement) in any insolvency, bankruptcy or similar case or proceeding, whether or not allowed in such case or
proceeding), fees, charges, expenses, attorneys' fees, liabilities (including fees and charges) with respect to Bank Products (as defined in the Credit Agreement) and any other sum chargeable to Payor
or any other Credit Party under the Credit Agreement or any of the other Loan Documents. 

        "US Borrowing Availability" shall mean, with respect to any date of determination, the Borrowing Availability as calculated solely in
respect of the US Borrower(as such term is defined in the Credit Agreement) and the US Borrowing Base. 

        (b)   The
meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. 

        (c)   Unless
otherwise expressly provided herein, references to agreements (including this Note) and other contractual instruments shall be deemed to include all subsequent
amendments. amendment and restatements and other modifications thereto. 

        (d)   The
words "hereof," "hereto," "herein," "hereunder" and similar words refer to this Note as a whole and not to any particular provision of this Note; and Section and
clause references are to this Note unless otherwise specified. 

        (e)   The
captions and headings of this Note are for convenience of reference only and shall not affect the interpretation of this Note. 

[Signature
Page to Follow] 

7

 

        IN
WITNESS WHEREOF, Payor has caused this Note to be duly executed by its officer hereunto authorized as of the date first above written. 

	 	 	WESTAFF (USA), INC., a California corporation:
	

 	
 	

By:	
 	

/s/ Dirk A. Sodestrom

	 	 	Name:	 	Dirk A. Sodestrom
	 	 	Title:	 	Senior Vice President and Chief Financial Officer

The
undersigned hereby acknowledges and consents to the terms and conditions of the above Unsecured Subordinated Note: 

	/s/ W. Robert Stover
 W. Robert Stover, an individual	 	 

8

QuickLinks

Exhibit 10.8.27

UNSECURED SUBORDINATED DRAW DOWN NOTE

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}]]