EXHIBIT 10.8.33
STOCK PLEDGE
AGREEMENT
This STOCK PLEDGE AGREEMENT (this “
Pledge Agreement ”) dated as of February 14,
2008, is entered into by and among U.S. BANK NATIONAL ASSOCIATION,
a national banking association, as administrative agent for the
benefit of the Secured Parties (as such term is defined in the
Financing Agreement, as defined below) (“ Agent
”), WESTAFF, INC., a Delaware corporation (“ Parent
Pledgor ”), WESTAFF (USA), INC., a California corporation
(“ Borrower ”), WESTAFF SUPPORT, INC., a
California corporation (“ Westaff Support ”),
and MEDIAWORLD INTERNATIONAL, a California corporation (“
MediaWorld ”; and together with Borrower, Parent
Pledgor and Westaff Support, each is individually from time to time
is referred to herein as a “ Pledgor ” and
collectively as “ Pledgors ”).
RECITALS
A.
Concurrently herewith, Borrower is entering into a Financing
Agreement dated of even date herewith (as the same from time to
time hereafter may be amended, modified, supplemented or restated,
the “ Financing Agreement ”) among the Borrower,
as borrower, the Parent Pledgor, as parent guarantor, the Lenders
party thereto (collectively, the “ Lenders ”),
and Agent, pursuant to which the Secured Parties have agreed to
make and maintain certain loans of money and to extend certain
other credit (collectively, the “ Credit ”) to
the Borrower on the terms and subject to the conditions set forth
in the Financing Agreement and the other Loan Documents.
B.
Concurrently therewith and herewith, (i) Parent Pledgor is
entering into a Continuing Guaranty dated as of even date herewith
in favor of Agent for the benefit of the Secured Parties (the
“ Parent Guaranty ”), pursuant to which Parent
Pledgor agrees to guaranty the payment and performance of
Borrower’s obligations under the Financing Agreement and the
other Loan Documents; and (ii) Westaff Support and MediaWorld
are entering into a Continuing Guaranty dated as of even date
herewith in favor of Agent for the benefit of the Secured Parties
(the “ Subsidiary Guaranty ”), pursuant to which
Westaff Support and MediaWorld agree to guaranty the payment and
performance of Borrower’s obligations under the Financing
Agreement and the other Loan Documents.
C.
Borrower is a member of an affiliated group of companies that
includes each other Pledgor.
D.
The proceeds of the extensions of credit under the Financing
Agreement will be used in part to enable Borrower to make valuable
transfers to one or more of the other Pledgors in connection with
the operation of their respective businesses.
E.
Borrower and the other Pledgors are engaged in related businesses,
and each Pledgor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the
Financing Agreement.
F.
Pledgors are the record and beneficial owners of the issued and
outstanding capital stock in Borrower and its subsidiaries, as
described on Exhibit A attached hereto, which
Exhibit is incorporated herein by this reference and may be
amended or supplemented pursuant to the terms of this Pledge
Agreement.
G.
The Secured Parties are willing to make, extend and maintain the
Credit to the Borrower on and after the date of the Financing
Agreement, but only upon the condition, among others, that Pledgors
shall have executed this Pledge Agreement and delivered this Pledge
Agreement and the Pledged Collateral (as defined below) to the
Agent, on behalf of and for the benefit of the Secured Parties.
AGREEMENT
NOW, THEREFORE, in
consideration of the foregoing Recitals and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, each
Pledgor hereby represents, warrants, covenants and agrees as
follows:
ARTICLE I
DEFINITIONS
1.1
Definitions. Except as provided in
Section 1.2 below, all capitalized terms used but not
defined herein shall have the respective meanings given to them in
the Financing Agreement. In addition, the following terms
shall have the following meanings:
“ Pledged Collateral ” has
the meaning set forth in Section 2.1 ,
below and shall not include any Excluded Collateral.
“
Code ” means the Uniform Commercial Code, as enacted
in the State of California, as amended or superseded from time to
time after the date of this Pledge Agreement.
1.2
Code Definitions; Rules of Construction. Unless
otherwise defined herein or the context otherwise requires, terms
for which meanings are provided in the Code are used in this Pledge
Agreement, including its preamble and recitals, with such meanings.
Section 1.2 of the Financing Agreement, including those
provisions relating to rules of contract construction and
interpretation, are incorporated into and shall apply to this
Pledge Agreement in the same way and manner as they apply to the
Financing Agreement (provided that all references to “
Pledge Agreement ” shall refer to this Pledge
Agreement and not the Financing Agreement).
ARTICLE II
PLEDGE
2.1
Pledge and Grant of Security Interest. As security for the
full, complete and final payment and performance when due (whether
at stated maturity, by acceleration or otherwise) of
Pledgors’ joint and several Obligations under the Financing
Agreement, the Affiliate Guaranty Agreements and the other Loan
Documents to which such Pledgor is a party, any and all other
debts, liabilities and reimbursement obligations, indemnity
obligations and other obligations for monetary amounts (including
reimbursement and indemnity obligations), fees, expenses, costs or
other sums (including Attorneys’ Fees) chargeable to Pledgors
under or
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pursuant to any of the
Loan Documents, including the Financing Agreement, the Parent
Guaranty, the Subsidiary Guaranty and this Pledge Agreement
(collectively, the “ Secured Obligations ”),
each Pledgor hereby collaterally assigns, grants, conveys,
mortgages, pledges and hypothecates to the Agent, on behalf of and
for the benefit of the Secured Parties, and hereby grants to the
Agent, on behalf of and for the benefit of the Secured Parties, a
security interest in and to all of such Pledgor’s right,
title and interest in, to and under each of the following, whether
now existing or hereafter acquired (all of which being hereinafter
collectively called the “ Pledged Collateral
”):
(a)
all Capital Stock or other equity securities in the Borrower and
its subsidiaries owned by such Pledgor and described on
Exhibit A hereto (collectively, the “
Shares ”), and the certificates representing the
Shares, and all dividends, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all such
Shares;
(b)
all additional Investments, including shares of capital stock or
other equity securities in or of the Borrower and its subsidiaries
and voting trust certificates from time to time acquired by such
Pledgor in any manner, and the certificates representing such
additional shares, and all dividends, cash, instruments, and other
property or proceeds from time to time received, receivable, or
otherwise distributed in respect of or in exchange for any or all
of such shares; and
(c)
The rents, issues, profits, returns, income, allocations,
distributions and proceeds of and from any and all of the
foregoing;
provided , however , that
(A) if and solely to the extent that the grant of a Lien
herein in the Capital Stock of any Foreign Subsidiary owned by such
Pledgor (other than Westaff (U.K.) Limited) would constitute an
investment of earnings in United States property under
Section 956 (or a successor provision) of the Internal Revenue
Code, which investment would trigger any increase in the gross
income of a United States shareholder of such Pledgor pursuant to
Section 951 (or a successor provision) of the Internal Revenue
Code, there shall be excluded from the Pledged Collateral
thirty-four percent (34.0%) of each class of the issued and
outstanding voting Capital Stock of such Foreign Subsidiary; it
being understood and agreed that all non-voting Capital Stock of
such Foreign Subsidiary shall constitute Pledged Collateral
hereunder and (B) the Pledged Collateral shall not include any
of the Capital Stock of Westaff Australia so long as the Australian
Subordination Deed remains in effect and prohibits Westaff Support
from pledging any of the Capital Stock of Westaff Australia,
provided that the Pledged Collateral shall, automatically and
without further action, include, subject to subsection (A) of
this proviso, the Capital Stock of Westaff Australia upon the
termination, extinguishment or other removal of such prohibition
(the Capital Stock excluded pursuant to subsections (A) and
(B) of this proviso is collectively referred to herein as the
“ Excluded Collateral ”).
2.2
Continuing Security Interest. This Pledge Agreement shall
create a continuing security interest in the Pledged Collateral and
shall:
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(a)
remain in full force and effect until the Payment in Full (other
than contingent indemnification obligations as to which no claims
have yet been asserted) of the Secured Obligations and the
termination of all Revolving Credit Commitments;
(b)
be binding upon each Pledgor and its successors, transferees and
assigns; and
(c)
inure, together with the rights and remedies of the Agent and the
Secured Parties hereunder, to the benefit of the Agent and the
Secured Parties.
Upon the Payment in
Full of the Secured Obligations (other than contingent
indemnification obligations as to which no claims have yet been
asserted) and the termination of all Revolving Credit Commitments,
the security interest granted herein shall terminate and all rights
to the Pledged Collateral shall revert to the respective Pledgor.
Upon any such termination, the Agent then shall, at each
Pledgor’s sole expense, deliver to such Pledgor, without any
representations, warranties or recourse of any kind whatsoever, any
and all certificates and instruments representing or evidencing
such Pledgor’s interest in the Shares that had been
previously delivered by such Pledgor to the Agent, together with
all other Pledged Collateral held by the Agent hereunder, and
execute and deliver to such Pledgor, at such Pledgor’s sole
expense, such documents as such Pledgor shall reasonably request to
evidence such termination.
2.3
No Assumption. This Pledge Agreement is executed and
delivered to the Agent for collateral security purposes only.
Notwithstanding anything herein to the contrary:
(a)
Each Pledgor shall remain liable under any contracts and agreements
included in the Pledged Collateral to the extent set forth therein,
and shall perform all of its duties and obligations under such
contracts and agreements to the same extent as if this Pledge
Agreement had not been executed;
(b)
the exercise by the Agent or any Secured Party of any of its or
their rights hereunder shall not release any Pledgor from any of
its duties or obligations under any such contracts or agreements
included in the Pledged Collateral; and
(c)
the Agent and the Secured Parties shall not have any obligation or
liability under any such contracts or agreements included in the
Pledged Collateral by reason of this Pledge Agreement, nor shall
the Agent or any Secured Party be obligated to perform any of the
obligations or duties of any Pledgor thereunder or to take any
action to collect or enforce any claim for payment assigned
hereunder.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES
3.1
Representations And Warranties. Each Pledgor hereby
represents and warrants to the Agent for the benefit of the Secured
Parties, as at the date of each pledge and delivery hereunder by
such Pledgor to the Agent of any Pledged Collateral and as of each
date that the representations and warranties under the Financing
Agreement are made (other than representations and warranties made
as of a specific date, which shall be deemed to have been
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made as of such
specific date), as set forth in the following Sections
3.1(a) through 3.1(m) , inclusive.
(a)
Organization. Such Pledgor is duly formed and validly
existing under the laws of its state of incorporation and has full
power and authority to enter into and perform its obligations under
this Pledge Agreement.
(b)
Capacity; Due Authorization; Non-Contravention. The
execution, delivery and performance by such Pledgor of this Pledge
Agreement and each other Loan Document executed or to be executed
by it have been duly authorized by all necessary action, and do not
contravene its organizational documents; and in each case do
not:
(i)
contravene any material contractual restriction, court decree or
order binding on or affecting such Pledgor or, to the best of such
Pledgor’s knowledge, after due inquiry, any material law
binding on or affecting such Pledgor in a manner that would, in
each case, be reasonably expected to adversely affect the
enforceability of this Agreement; or
(ii)
result in, or require the creation or imposition of, any Lien on
any of such Pledgor’s properties except as contemplated
hereby.
(c)
Binding Obligations. This Pledge Agreement, when executed
and delivered, constitutes, and each other Loan Document executed
by such Pledgor will, on the due execution and delivery thereof,
constitute, the legal, valid and binding obligations of such
Pledgor, enforceable against such Pledgor in accordance with their
respective terms, except as enforcement hereof may be limited by
bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors’ rights generally and
by general principles of equity.
(d)
Filing. As of the Closing Date, no presently effective
Uniform Commercial Code financing statement covering any of the
Pledged Collateral is on file in any public office, except for
Uniform Commercial Code financing statements in favor of the
Agent.
(e)
Ownership; No Liens. Each Pledgor is the legal and
beneficial owner of, and has all rights and good title to (and has
full right and authority to pledge and collaterally assign) all
Pledged Collateral pledged by such Pledgor hereunder, free and
clear of all adverse claims or other Liens, except Permitted Liens
and the Lien granted herein to the Agent.
(f)
Ownership Interests. Set forth in Exhibit A is
the true and accurate description of such Pledgor’s ownership
interest in the Shares.
(g)
Certificate. No interest of such Pledgor in the Borrower or
its Subsidiaries is represented by a certificate of interest or
similar instrument, except, such certificates or instruments
(together with all necessary instruments of transfer or assignment,
duly executed in blank) as have been delivered to the Agent or the
Agent’s designated bailee and are held in its possession,
except for such certificates which represent the Excluded
Collateral.
(h)
Information. All information with respect to the Pledged
Collateral set forth in any schedule, certificate or other writing
at any time furnished by such Pledgor to the
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Agent or any Secured
Party, and all other written information at any time furnished by
such Pledgor to the Agent or any Secured Party, is and shall be
true and correct in all material respects as of the date
furnished.
(i)
Records. The address of the location of the records of such
Pledgor concerning the Pledged Collateral and the address of such
Pledgor’s principal place of business and chief executive
office as of the Closing Date is set forth in Schedule I to
this Pledge Agreement.
(j)
Authorization; Approval. No authorization, approval, or
other action by, and no notice to or filing with, any Governmental
Authority, or any other Person is required for the pledge by such
Pledgor of any Pledged Collateral pursuant to this Pledge Agreement
or for the execution, delivery, and performance of this Pledge
Agreement by such Pledgor.
(k)
[Reserved.]
(l)
No Offset or Defense. The Secured Obligations are not
subject to any offset or defense of any kind against the Agent, the
Secured Parties or such Pledgor.
(m)
Continuation of Representations and Warranties. Such Pledgor
covenants, warrants and represents to the Agent and each Secured
Party that all representations and warranties contained in this
Pledge Agreement shall be true, accurate and complete in all
material respects at the time of such Pledgor’s execution of
this Pledge Agreement and, shall continue to be true, accurate and
complete in all material respects until the Secured Obligations
have been fully, completely and finally paid and performed and all
Revolving Credit Commitments terminated.
ARTICLE IV
COVENANTS
4.1
Protect Pledged Collateral; Further Assurances. No Pledgor
shall sell, assign, transfer, pledge or otherwise encumber the
Pledged Collateral in any manner (except for the pledge granted
herein to the Agent), except to the extent permitted by the
Financing Agreement. Each Pledgor shall warrant and defend the
right and title granted by this Pledge Agreement to the Agent in
and to the Pledged Collateral (and all right, title and interest
represented by
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