WSTF Westaff (MM)

Item 2.03                   Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On February 28, 2008, Westaff (USA), Inc. (the “ Borrower ”), a wholly-owned subsidiary of Westaff, Inc. (the “ Company ”), was advanced credit in the form of letters of credit issued and loans advanced in an aggregate amount of approximately $29.6 million under the previously-announced Financing Agreement, dated as of February 14, 2008 (the “ Financing Agreement ”), among the Borrower, the Company, as parent guarantor, certain lenders party thereto (the “ Lenders ”) and U.S. Bank National Association, as agent for the Lenders and letter of credit issuer.  The Lenders under the Financing Agreement are Wells Fargo Bank, National Association and U.S. Bank National Association.  The Borrower used the proceeds from the extension of credit to repay amounts outstanding under the existing Multicurrency Credit Agreement, dated as of May 17, 2002, among the Company, the Borrower, certain other subsidiaries of the Company, certain lenders party thereto and General Electric Capital Corporation, as amended, to replace or cash collateralize letters of credit issued under such Multicurrency Credit Agreement, and for its working capital needs.  A description of the Financing Agreement was previously included in the Company’s Form 8-K filed on February 21, 2008, which is incorporated herein by reference.