Exhibit 10.2
NOTES SECURITIES PURCHASE AGREEMENT
     NOTES SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of
March 31, 2006, by and among Global Employment Solutions, Inc., a Colorado
corporation, with headquarters located at 9090 Ridgeline Boulevard, Suite 205,
Littleton, Colorado 80129 (the “Company”), and the investors listed on the
Schedule of Buyers attached hereto (individually, a “Buyer” and collectively,
the “Buyers”).
     WHEREAS:
     A. The Company and each Buyer is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by
Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and
Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “SEC”) under the 1933 Act.
     B. Prior to the Closing (as defined below) and immediately following the
consummation of the Share Exchange (as defined below), the Company will cause
PubCo (as defined below) to authorize a new series of its senior secured
convertible notes, which notes shall be convertible into PubCo’s common stock
(the “Common Stock”) in accordance with the terms of such notes.
     C. Each Buyer wishes to purchase, and the Company wishes PubCo to sell,
upon the terms and conditions stated in this Agreement, (i) that aggregate
principal amount of notes, in the form attached hereto as Exhibit A (as amended
or modified from time to time, collectively, the "Notes”), set forth opposite
such Buyer’s name in column (3) on the Schedule of Buyers (which aggregate
amount for all Buyers shall be $30,000,000) and (ii) warrants, in the form
attached hereto as Exhibit B (the “Warrants”), to acquire up to that number of
additional shares of Common Stock set forth opposite such Buyer’s name in column
(4) of the Schedule of Buyers (as exercised, collectively, the “Warrant
Shares”).
     D. Contemporaneously with the Closing, the Buyers and PubCo will execute
and deliver a Registration Rights Agreement, in the form attached hereto as
Exhibit C (as amended or modified from time to time, the “Registration Rights
Agreement”), pursuant to which the Company agrees to cause PubCo to provide
certain registration rights with respect to the shares of Common Stock into
which the Notes are convertible (the “Conversion Shares”) and the Warrant Shares
under the 1933 Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.
     E. The Notes, the Conversion Shares, the Warrants and the Warrant Shares
collectively are referred to herein as the “Securities”.
     F. The Notes will be (i) secured by a second priority perfected security
interest in all of the assets of PubCo and the Company and in all of the shares
of capital stock and all assets of all of PubCo’s and the Company’s current and
future Subsidiaries (as hereinafter defined), as evidenced by the Pledge
Agreement, in the form attached hereto as Exhibit D, and the Security Agreement,
in the form attached hereto as Exhibit E (as amended or modified from time to
time,

 

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the “Pledge Agreement” and the “Security Agreement”) in favor of Amatis Limited,
a company organized under the laws of the Cayman Islands, in its capacity as
Collateral Agent (as defined below) for the Buyers hereto and for the holders of
the Securities, which security interest shall be senior to all other security
interests therein, except those security interests securing the Senior
Indebtedness (as defined in the Notes), and (ii) guaranteed by the Guaranty of
all of PubCo’s and the Company’s current and future Subsidiaries, other than the
Inactive Subsidiaries (as defined below), in the form attached hereto as
Exhibit F (each, a “Guaranty,” and together with the Pledge Agreement and the
Security Agreement, as each may amended or modified from time to time,
collectively, the “Security Documents”).
     NOW, THEREFORE, the Company and each Buyer hereby agree as follows:
     1. PURCHASE AND SALE OF NOTES AND WARRANTS.
          (a) Purchase of Notes and Warrants. Subject to the satisfaction (or
waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall
cause PubCo to issue and sell to each Buyer, and each Buyer severally, but not
jointly, agrees to purchase from PubCo on the Closing Date (as defined below),
(x) a principal amount of Notes as is set forth opposite such Buyer’s name in
column (3) on the Schedule of Buyers and (y) Warrants to acquire up to that
number of Warrant Shares as is set forth opposite such Buyer’s name in column
(4) on the Schedule of Buyers (the "Closing”).
          (b) Closing. The date and time of the Closing (the “Closing Date”)
shall be 10:00 a.m., New York City time, on a date mutually agreed to by the
Company and Buyers holding the right to purchase not less than 66-2/3% of the
aggregate principal amount of the Notes, such Closing Date to be as soon as
practicable following satisfaction (or waiver) of the conditions to the Closing
set forth in Sections 6 and 7 below at the offices of Schulte Roth & Zabel LLP,
919 Third Avenue, New York, New York 10022.
          (c) Purchase Price. The aggregate purchase price for the Notes and the
Warrants to be purchased by each Buyer at the Closing (the “Purchase Price”)
shall be the amount set forth opposite such Buyer’s name in column (5) of the
Schedule of Buyers. Each Buyer shall pay $1.00 for each $1.00 of principal
amount of Notes and related Warrants to be purchased by such Buyer at the
Closing.
          (d) Form of Payment. On the Closing Date, (i) each Buyer shall pay its
Purchase Price to PubCo for the Notes and the Warrants to be issued and sold to
such Buyer at the Closing, by wire transfer of immediately available funds in
accordance with the Company’s or PubCo’s written wire instructions, and (ii) the
Company shall cause PubCo to deliver to each Buyer (A) the Notes (in the
principal amounts as such Buyer shall request) which such Buyer is then
purchasing and (B) the Warrants (in the amounts as such Buyer shall request)
which such Buyer is purchasing, in each case duly executed on behalf of PubCo
and registered in the name of such Buyer or its designee.

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     2. BUYER’S REPRESENTATIONS AND WARRANTIES.
          Each Buyer represents and warrants with respect to only itself that:
          (a) No Public Sale or Distribution. Such Buyer is (i) acquiring the
Notes and the Warrants and (ii) upon conversion of the Notes and exercise of the
Warrants will acquire the Conversion Shares and the Warrant Shares (less any
Warrant Shares forfeited in a Cashless Exercise (as defined in the Warrants)),
in each case, for its own account and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to
sales registered or exempted under the 1933 Act; provided, however, that by
making the representations herein, such Buyer does not agree to hold any of the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act. Such Buyer is
acquiring the Securities hereunder in the ordinary course of its business. Such
Buyer does not presently have any agreement or understanding, directly or
indirectly, with any Person to distribute any of the Securities.
          (b) Accredited Investor Status. Such Buyer is an “accredited investor”
as that term is defined in Rule 501(a) of Regulation D.
          (c) Reliance on Exemptions. Such Buyer understands that the Securities
are being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire the Securities.
          (d) Information. Such Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities
that have been requested by such Buyer. Such Buyer and its advisors, if any,
have been afforded the opportunity to ask questions of the Company. Neither such
inquiries nor any other due diligence investigations conducted by such Buyer or
its advisors, if any, or its representatives shall modify, amend or affect such
Buyer’s right to rely on the Company’s representations and warranties contained
herein. Such Buyer understands that its investment in the Securities involves a
high degree of risk. Such Buyer has sought such accounting, legal and tax advice
as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Securities.
          (e) No Governmental Review. Such Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
          (f) Transfer or Resale. Such Buyer understands that except as will be
provided in the Registration Rights Agreement: (I) the Securities have not been
and are not being

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registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to PubCo an opinion,
in generally acceptable form, of counsel selected by the Buyer and reasonably
satisfactory to PubCo, to the effect that such Securities to be sold, assigned
or transferred may be sold, assigned or transferred pursuant to an exemption
from such registration, or (C) such Buyer provides PubCo with reasonable
assurance that such Securities can be sold, assigned or transferred pursuant to
Rule 144 or Rule 144A promulgated under the 1933 Act (or a successor rule
thereto) (collectively, “Rule 144”); (II) any sale of the Securities made in
reliance on Rule 144 may be made only in accordance with the terms of Rule 144
and further, if Rule 144 is not applicable, any resale of the Securities under
circumstances in which the seller (or the Person (as defined in Section 3(o))
through whom the sale is made) may be deemed to be an underwriter (as that term
is defined in the 1933 Act) may require compliance with some other exemption
under the 1933 Act or the rules and regulations of the SEC thereunder; and
(III) none of the Company, PubCo or any other Person is under any obligation to
register the Securities under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder.
          (g) Legends. Such Buyer understands that the certificates or other
instruments representing the Notes and Warrants and, until such time as the
resale of the Conversion Shares and the Warrant Shares have been registered
under the 1933 Act as contemplated by the Registration Rights Agreement, the
stock certificates representing the Conversion Shares and the Warrant Shares,
except as set forth below, shall bear any legend that is required by the “blue
sky” laws of any state and a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of such stock
certificates):
[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE]
HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN]
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL SELECTED BY THE HOLDER AND REASONABLY ACCEPTABLE TO THE ISSUER, IN A
GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES. THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT
BY THE HOLDER OF THIS NOTE

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IN FAVOR OF WELLS FARGO BANK, NATIONAL ASSOCIATION, ACTING THROUGH ITS WELLS
FARGO BUSINESS CREDIT OPERATING DIVISION, DATED AS OF MARCH 31, 2006.
The legend set forth above shall be removed and PubCo shall issue a certificate
without such legend to the holder of the Securities upon which it is stamped,
if, unless otherwise required by state securities laws, (i) such Securities are
registered for resale under the 1933 Act, (ii) in connection with a sale,
assignment or other transfer, such holder provides PubCo with an opinion of
counsel reasonably acceptable to PubCo, in a generally acceptable form, to the
effect that such sale, assignment or transfer of the Securities may be made
without registration under the applicable requirements of the 1933 Act, or
(iii) such holder provides PubCo with reasonable assurances of the holder’s
belief that the Securities can be sold, assigned or transferred pursuant to
Rule 144 or Rule 144A.
          (h) Validity; Enforcement. This Agreement has been, and when the other
Transaction Documents (as defined below) to which such Buyer is a party are
executed and delivered in accordance with the terms and conditions contemplated
hereby and thereby, such documents shall have been, duly and validly authorized,
executed and delivered on behalf of such Buyer and shall constitute the legal,
valid and binding obligations of such Buyer enforceable against such Buyer in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, liquidation and other similar
laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies.
          (i) Residency. Such Buyer is a resident of the jurisdiction specified
below its address on the Schedule of Buyers.
     3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
          The Company represents and warrants to each of the Buyers that:
          (a) Organization and Qualification. The Company and its “Subsidiaries”
(which for purposes of this Agreement means any entity in which the Company
and/or after the Closing, PubCo, directly or indirectly, owns capital stock or
holds an equity or similar interest) are entities duly organized and validly
existing in good standing under the laws of the jurisdiction in which they are
formed, and have the requisite power and authority to own their properties and
to carry on their business as now being conducted. As of the Closing Date,
neither PD Quick — Temps, Inc., a Pennsylvania corporation, nor Placer Staffing,
Inc., a California corporation, (each an “Inactive Subsidiary”) owns or
possesses any property or assets or conducts any business or operations. Each of
the Company and its Subsidiaries is duly qualified as a foreign entity to do
business and is in good standing in every jurisdiction in which its ownership of
property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not reasonably be expected to have a Material Adverse
Effect. As used in this Agreement, “Material Adverse Effect” means any material
adverse effect on the business, properties, assets, operations, results of
operations, condition (financial or otherwise) or prospects of the Company

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and its Subsidiaries, taken as a whole, or on the transactions contemplated
hereby and the other Transaction Documents (as defined below) or by the
agreements and instruments to be entered into in connection herewith or
therewith, or on the authority or ability of the Company to perform its
obligations under the Transaction Documents to which it is a party. The Company
has no Subsidiaries except as set forth on Schedule 3(a).
          (b) Authorization; Enforcement; Validity. The Company has the
requisite power and authority to enter into and perform its obligations under
this Agreement, the Guaranty to which it is a party and each of the other
agreements entered into by the parties hereto in connection with the
transactions contemplated by this Agreement to which the Company is a party
(such documents, and together with the Notes, the Warrants, the Registration
Rights Agreement, the Security Documents, the Irrevocable Transfer Agent
Instructions, the Subordination Agreement (as defined in Section 7(l) below),
and each of the other agreements to be entered into in connection with the
transactions contemplated by this Agreement, collectively, the “Transaction
Documents”). The execution and delivery of the Transaction Documents to which
the Company is a party and the consummation by the Company of the transactions
contemplated hereby and thereby have been duly authorized by the Company’s Board
of Directors and no further filing, consent, or authorization is required by the
Company, its Board of Directors or its stockholders. This Agreement and the
other Transaction Documents to which the Company is a party have been duly
executed and delivered by the Company, and constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies.
          (c) Offer of Securities. The offer by the Company of the Securities is
exempt from registration under the 1933 Act.
          (d) No Conflicts. The execution, delivery and performance of the
Transaction Documents to which the Company is a party and the consummation by
the Company of the transactions contemplated hereby and thereby will not
(i) result in a violation of any certificate of incorporation, certificate of
formation, any certificate of designations or other constituent documents of the
Company or any of its Subsidiaries, any capital stock of the Company or any of
its Subsidiaries, or the bylaws of the Company or any of its Subsidiaries or
(ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations) applicable to the Company or any of its Subsidiaries or by
which any property or asset of the Company or any of its Subsidiaries is bound
or affected.
          (e) Consents. The Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency or any other
Person in order for it to execute, deliver or perform any of its obligations
under or contemplated by the Transaction Documents to which

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it is a party, in each case in accordance with the terms hereof or thereof,
other than (i) the filing of appropriate UCC financing statements with the
appropriate states and other authorities pursuant to the Pledge Agreement and
the Security Agreement, and (ii) the current report on Form 8-K required to be
filed after Closing by PubCo pursuant to Section 4(h) of this Agreement, the
Form D filing required to be made following the Closing by PubCo with the SEC
and the registration statement and related state securities law filings required
by the Registration Rights Agreement.
          (f) Acknowledgment Regarding Buyer’s Purchase of Securities. The
Company acknowledges and agrees that each Buyer is acting solely in the capacity
of an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that no Buyer is (i) an officer
or director of the Company, (ii) an “affiliate” of the Company (as defined in
Rule 144) or (iii) to the knowledge of the Company, a “beneficial owner” of more
than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of
the Securities Exchange Act of 1934, as amended (the “1934 Act”)). The Company
further acknowledges that no Buyer is acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated hereby and thereby, and any advice
given by a Buyer or any of its representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to such Buyer’s purchase of the Securities. The Company
further represents to each Buyer that the decision of the Company and each of
the Subsidiaries to enter into the Transaction Documents, as applicable, has
been based solely on the independent evaluation by the Company, its Subsidiaries
and their representatives.
          (g) No General Solicitation; Placement Agent’s Fees. None of the
Company, any of its affiliates, or any Person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the Securities.
The Company shall be responsible for the payment of any placement agent’s fees,
financial advisory fees, or brokers’ commissions (other than for persons engaged
by any Buyer or its investment advisor) relating to or arising out of the
transactions contemplated hereby. The Company shall pay, and hold each Buyer
harmless against, any liability, loss or expense (including, without limitation,
attorney’s fees and out-of-pocket expenses) arising in connection with any such
claim. The Company acknowledges that it has engaged Rodman & Renshaw, LLC as
placement agent (the “Agent”) in connection with the sale of the Securities. The
Company will also pay a fee of up to $810,000 to Ewing Bemiss & Co. (“Bemiss”)
contemporaneously with the Closing. Other than the Agent and Bemiss, the Company
has not engaged any placement agent or other agent in connection with the sale
of the Securities.
          (h) No Integrated Offering. None of the Company, its Subsidiaries, any
of their affiliates, or any Person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of any of
the Securities under the 1933 Act or cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the 1933 Act or
any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of any exchange or automated quotation system on
which any of the securities of the Company are listed or designated.

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          (i) Financial Statements. The financial statements of the Company have
been prepared in accordance with United States generally accepted accounting
principles consistently applied (“GAAP”), during the periods involved (except
(i) as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they
may exclude footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company as of the
dates thereof and the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments). Except for liabilities and obligations incurred in the
ordinary course of business and consistent with past practice, liabilities and
obligations reflected on or reserved against in the January 1, 2006 audited
balance sheet prepared in accordance with GAAP delivered pursuant to Section
7(o) (the “Balance Sheet”) and as otherwise disclosed herein or in the
disclosure schedules to this Agreement (the “Disclosure Schedules”), since
January 2, 2006, inclusive of such date, the Company has not incurred any
liabilities or obligations that would be required to be reflected or reserved
against in a balance sheet of the Company prepared in accordance with the
principles used in preparation of the Balance Sheet.
          (j) Absence of Certain Changes. Since January 1, 2006, there has been
no change or development in the business, properties, operations, condition
(financial or otherwise), results of operations or prospects of the Company or
its Subsidiaries that has had or could reasonably be expected to have a Material
Adverse Effect. Since January 1, 2006, the Company has not (i) declared or paid
any dividends, (ii) sold any assets, individually or in the aggregate, in excess
of $100,000 outside of the ordinary course of business, (iii) had capital
expenditures, individually or in the aggregate, in excess of $500,000 or
(iv) waived any material rights with respect to any Indebtedness or other rights
in excess of $100,000 owed to it. The Company has not taken any steps to seek
protection pursuant to any bankruptcy law nor does the Company have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact which would
reasonably lead a creditor to do so. The Company is not as of the date hereof,
and after giving effect to the transactions contemplated hereby to occur at the
Closing will not be, Insolvent (as defined below). For purposes of this
Section 3(j), “Insolvent” means (i) the present fair saleable value of the
Company’s assets is less than the amount required to pay the Company’s total
Indebtedness (as defined in Section 3(o)), (ii) the Company is unable to pay its
debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, (iii) the Company intends to incur or
believes that it will incur debts that would be beyond its ability to pay as
such debts mature or (iv) the Company has unreasonably small capital with which
to conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted.
          (k) Conduct of Business; Regulatory Permits. Neither the Company nor
its Subsidiaries is in violation of any term of or in default under its
certificate of incorporation, certificate of formation, any certificate of
designations or other constituent documents or its bylaws. Neither the Company
nor any of its Subsidiaries is in violation of any judgment, decree or order or
any statute, ordinance, rule or regulation applicable to the Company or its
Subsidiaries, except for possible violations which would not, individually or in
the aggregate, have a Material Adverse Effect. The Company and its Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
regulatory authorities necessary to conduct

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their respective businesses, except where the failure to possess such
certificates, authorizations or permits would not have, individually or in the
aggregate, a Material Adverse Effect, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit.
          (l) Foreign Corrupt Practices. Neither the Company, nor any of its
Subsidiaries, nor any director, officer, agent, employee or other Person acting
on behalf of the Company or any of its Subsidiaries has, in the course of its
actions for, or on behalf of, the Company (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.
          (m) Transactions With Affiliates. Except as set forth in Schedule 3(m)
hereto, other than the issuance of restricted stock disclosed on Schedule 3(n),
none of the officers, directors or employees of the Company is presently a party
to any transaction with the Company or any of its Subsidiaries (other than for
ordinary course services as employees, officers or directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any such officer, director or
employee or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any such officer, director, or employee has a
substantial interest or is an officer, director, trustee or partner.
          (n) Equity Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of (i) 10,000,000 shares of common stock,
$.01 par value, 2,693,370 of which are issued and outstanding and
(ii) 50,000,000 shares of preferred stock, $.01 par value, of which 7,000,000
shares have been designated as Series C Preferred Stock, 6,825,780 of which are
issued and outstanding, and 30,000,000 have been designated as Series D
Preferred Stock, 21,841,930.34 of which are issued and outstanding. All of such
outstanding shares have been, or upon issuance will be, validly issued and are
fully paid and nonassessable. Except as disclosed in Schedule 3(n) or
Schedule 3(o): (i) none of the Company’s share capital is subject to preemptive
rights or any other similar rights or any liens or encumbrances suffered or
permitted by the Company; (ii) there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any share capital of the Company or any of its Subsidiaries,
or contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to issue additional share
capital of the Company or any of its Subsidiaries or options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any share capital of the Company or any of its Subsidiaries;
(iii) there are no outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing Indebtedness
(as defined in Section 3(o)) of the Company or any of its Subsidiaries or by
which the Company or any of its Subsidiaries is or may become bound; (iv) there
are no financing statements securing obligations in any material

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amounts, either singly or in the aggregate, filed in connection with the
Company; (v) there are no agreements or arrangements under which the Company or
any of its Subsidiaries is obligated to register the sale of any of their
securities under the 1933 Act (except the Registration Rights Agreement);
(vi) there are no outstanding securities or instruments of the Company or any of
its Subsidiaries which contain any redemption or similar provisions, and there
are no contracts, commitments, understandings or arrangements by which the
Company or any of its Subsidiaries is or may become bound to redeem a security
of the Company or any of its Subsidiaries; (vii) there are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities; (viii) the Company does not have
any stock appreciation rights or “phantom stock” plans or agreements or any
similar plan or agreement; (ix) all the Company’s outstanding options and
warrants shall be cancelled at Closing; and (x) no securities of the Company or
PubCo are listed or quoted on any stock exchange or automated quotation system.
Immediately after giving effect to the Merger and the Share Exchange (as such
terms are defined in Section 7(p) hereof), (i) all of the Company’s issued and
outstanding stock shall be owned by PubCo and (ii) all other securities issued
by the Company (including, without limitation, the Series C Preferred Stock, the
Series D Preferred Stock and any securities disclosed in Schedule 3(n)) shall
have been exchanged for shares of PubCo’s Class A Common Stock (the “Class A
Common Stock”), PubCo’s Class B Common Stock (the “Class B Common Stock”) or
PubCo’s Common Stock, as applicable. The Company has furnished to the Buyer
true, correct and complete copies of the Company’s Certificate of Incorporation,
as amended and as in effect on the date hereof (the "Certificate of
Incorporation”), the Company’s Bylaws, as amended and as in effect on the date
hereof (the “Bylaws”), and all agreements relating to securities convertible
into, or exercisable or exchangeable for, shares of Common Stock and the
material rights of the holders thereof in respect thereto.
          (o) Indebtedness and Other Contracts. Except as disclosed in
Schedule 3(o), neither the Company nor any of its Subsidiaries (i) has any
outstanding Indebtedness (as defined below), (ii) is a party to any contract,
agreement or instrument, the violation of which, or default under which, by the
other party(ies) to such contract, agreement or instrument would result in a
Material Adverse Effect, (iii) is in violation of any term of or in default
under any contract, agreement or instrument relating to any Indebtedness, except
where such violations and defaults would not result, individually or in the
aggregate, in a Material Adverse Effect, or (iv) is a party to any contract,
agreement or instrument relating to any Indebtedness, the performance of which,
in the judgment of the Company’s officers, has or is expected to have a Material
Adverse Effect. Schedule 3(o) provides a detailed description of the material
terms of any such outstanding Indebtedness. Immediately after giving effect to
the Merger and the Share Exchange (as such terms are defined in Section 7(p)
hereof), neither the Company nor PubCo shall have any outstanding Indebtedness,
other than the Notes, the Senior Indebtedness (as defined in the Notes) and the
Permitted Indebtedness (as defined in the Notes) set forth on Schedule 3(o)(i).
For purposes of this Agreement: (x) “Indebtedness” of any Person means, without
duplication (A) all indebtedness for borrowed money, (B) all obligations issued,
undertaken or assumed as the deferred purchase price of property or services
including, without limitation, “capital leases” in accordance with U.S. GAAP
(other than trade payables entered into in the ordinary course of business),
(C) all reimbursement or payment obligations with respect to letters of credit,
surety bonds and other similar instruments, (D) all obligations evidenced by
notes, bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets or
businesses, (E) all indebtedness created or arising under any

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conditional sale or other title retention agreement, or incurred as financing,
in either case with respect to any property or assets acquired with the proceeds
of such indebtedness (even though the rights and remedies of the seller or bank
under such agreement in the event of default are limited to repossession or sale
of such property), (F) all monetary obligations under any leasing or similar
arrangement which, in connection with U.S. GAAP, consistently applied for the
periods covered thereby, is classified as a capital lease, (G) all indebtedness
referred to in clauses (A) through (F) above secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any mortgage, lien, pledge, charge, security interest or other
encumbrance upon or in any property or assets (including accounts and contract
rights) owned by any Person, even though the Person which owns such assets or
property has not assumed or become liable for the payment of such indebtedness,
and (H) all Contingent Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (A) through (G) above; (y)
“Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; and (z)
“Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization or a
government or any department or agency thereof.
          (p) Absence of Litigation. There is no action, suit, proceeding,
inquiry or investigation that is material, individually or in the aggregate,
before or by, any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company, the Common Stock or any of the Company’s
Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or
directors.
          (q) Insurance. The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged. Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.
          (r) Employee Relations.
               (i) Neither the Company nor any of its Subsidiaries is a party to
any collective bargaining agreement or employs any member of a union. The
Company and its Subsidiaries believe that their relations with their employees
are good. None of Howard Brill, Dan Hollenbach, Robert Larkin, Steve Pennington
or any officer in the capacity of President-Professional Staffing or any other
person holding a similar office or holding an office at a similar level as the
foregoing (the “Executive Officers”) have notified the Company that such officer

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intends to leave the Company or otherwise terminate such officer’s employment
with the Company. No Executive Officer of the Company, to the knowledge of the
Company, is, or is expected to be, in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary information
agreement, non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each Executive Officer
does not subject the Company or any of its Subsidiaries to any liability with
respect to any of the foregoing matters.
               (ii) The Company and its Subsidiaries are in compliance with all
federal, state, local and foreign laws and regulations respecting labor,
employment and employment practices and benefits, terms and conditions of
employment and wages and hours, except where failure to be in compliance would
not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.
          (s) Title. The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its Subsidiaries, in each case free and clear of all liens, encumbrances and
defects except for the blanket lien securing the Senior Indebtedness (as defined
in the Notes) and such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property
by the Company and any of its Subsidiaries. Any real property and facilities
held under lease by the Company and any of its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its Subsidiaries.
          (t) Intellectual Property Rights. The Company and its Subsidiaries own
or possess adequate rights or licenses to use all trademarks, service marks, and
all applications and registrations therefor, trade names, patents, patent
rights, copyrights, original works of authorship, inventions, licenses,
approvals, governmental authorizations, trade secrets and other intellectual
property rights (“Intellectual Property Rights”) necessary to conduct their
respective businesses as now conducted. None of the Company’s Intellectual
Property Rights have expired or terminated, or are expected to expire or
terminate, within three years from the date of this Agreement. The Company does
not have any knowledge of any infringement by the Company or its Subsidiaries of
Intellectual Property Rights of others. There is no claim, action or proceeding
being made or brought, or to the knowledge of the Company, being threatened,
against the Company or its Subsidiaries regarding its Intellectual Property
Rights. The Company is unaware of any facts or circumstances which might give
rise to any of the foregoing infringements or claims, actions or proceedings.
The Company and its Subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of all of their Intellectual
Property Rights.
          (u) Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all applicable Environmental Laws (as hereinafter
defined), (ii) have received all permits, licenses or other approvals required
of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such
permit, license or approval where, in each of the foregoing clauses (i),
(ii) and (iii), the failure to so comply could be reasonably expected to have,

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individually or in the aggregate, a Material Adverse Effect. The term
“Environmental Laws” means all federal, state, local or foreign laws relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants, or toxic
or hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.
          (v) Subsidiary Rights. Except as set forth in Schedule 3(v), the
Company or one of its Subsidiaries has the unrestricted right to vote, and
(subject to limitations imposed by applicable law) to receive dividends and
distributions on, all capital securities of its Subsidiaries as owned by the
Company or each Subsidiary.
          (w) Tax Status. The Company and each of its Subsidiaries (i) has made
or filed all foreign, federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and (iii) has set aside
on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company know of no
basis for any such claim. No liens have been filed and no claims are being
asserted by or against the Company or any of its Subsidiaries with respect to
any taxes (other than liens for taxes not yet due and payable). Neither the
Company nor it Subsidiaries has received notice of assessment or proposed
assessment of any taxes claimed to be owed by it or any other Person on its
behalf. Except as disclosed on Schedule 3(w), neither the Company nor any
Subsidiary is a party to any tax sharing or tax indemnity agreement or any other
agreement of a similar nature that remains in effect. Each of the Company and
its Subsidiaries has complied in all material respects with all applicable legal
requirements relating to the payment and withholding of taxes and, within the
time and in the manner prescribed by law, has withheld from wages, fees and
other payments and paid over to the proper governmental or regulatory
authorities all amounts required.
          (x) Internal Accounting Controls. The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with U.S. GAAP and to maintain asset and liability accountability,
(iii) access to assets or incurrence of liabilities is permitted only in
accordance with management’s general or specific authorization and (iv) the
recorded accountability for assets and liabilities is compared with the existing
assets and liabilities at reasonable intervals and appropriate action is taken
with respect to any difference.

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          (y) Ranking of Guaranty. Except for the Senior Indebtedness (as
defined in the Notes), no Indebtedness of the Company or any of its
Subsidiaries, at the Closing, will be senior to or pari passu with the Guaranty
by the Company in right of payment, whether with respect of payment or
redemptions, interest, damages or upon liquidation or dissolution or otherwise,
excluding (i) the obligations of the Company or its Subsidiaries under any lease
of real or personal property by such Person as lessee which is required under
GAAP to be capitalized on such Person’s balance sheet and (ii) Indebtedness
permitted by clause (v) of the definition of “Permitted Lien” set forth in the
Notes.
          (z) Lien Searches. Within 6 Business Days prior to the date hereof,
the Company shall have delivered or caused to be delivered to each Buyer
certified copies of UCC financing statement search results listing any and all
effective financing statements filed within five years prior to such date in any
applicable jurisdiction that name the Company or any of their Subsidiaries as a
debtor to perfect an interest in any of the assets thereof, together with copies
of such financing statements, none of which financing statements, except for any
financing statements filed with respect to the Senior Indebtedness and as
otherwise agreed to in writing by the Buyers, shall cover any of the
“Collateral” (as defined in the Security Documents), and the results of searches
for any effective tax liens and judgment liens filed against any such Person or
its property in any applicable jurisdiction, which results, except as otherwise
agreed to in writing by the Buyers, shall not show any such effective tax liens
and judgment liens.
          (aa) Required Repayments; Management Payments. Upon the payment of
cash and shares of Common Stock in the amounts set forth on Schedule 3(aa)(i)
(the “Required Repayments”) to the holders of the Indebtedness identified as
“Subordinated Indebtedness” on Schedule 3(o), the Company shall have fulfilled
any and all of its obligations to the holders of the Indebtedness identified as
“Subordinated Indebtedness” on Schedule 3(o) arising from, under or with respect
to the Master Investment Agreement, dated as of November 15, 2001, by and among
the Company, Global Investment I, LLC and the other parties identified therein,
as currently in effect (the “Master Investment Agreement”). Upon the payment of
the cash and shares of Common Stock to the parties and in the amounts set forth
on Schedule 3(aa)(ii) (collectively, the “Management Payments”), the Company
shall have fulfilled any and all of its obligations to such parties arising
from, under or with respect to (i) the Certificate of Incorporation, (ii) the
Company’s Series C Preferred Stock, (iii) the Company’s Series D Preferred
Stock, (iv) the Company’s Restricted Stock Plan, as currently in effect, and
(v) the Master Investment Agreement, as applicable.
          (bb) Disclosure. All disclosure, oral or written, provided to the
Buyers regarding the Company, its business and the transactions contemplated
hereby, including the Schedules to this Agreement, furnished by or on behalf of
the Company, taken as a whole, is true and correct and does not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
     4. COVENANTS.
          (a) Best Efforts. Each party shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in Sections 6
and 7 of this Agreement.

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          (b) Form D and Blue Sky. The Company agrees to cause PubCo to file a
Form D with respect to the Securities as required under Regulation D and to
provide a copy thereof to each Buyer promptly after such filing. The Company
shall, on or before the Closing Date, take such action, or cause PubCo to take
such action, as the Company shall reasonably determine is necessary in order to
obtain an exemption for or to qualify the Securities for sale to the Buyers at
the Closing pursuant to this Agreement under applicable securities or “Blue Sky”
laws of the states of the United States (or to obtain an exemption from such
qualification), and shall provide evidence of any such action so taken to the
Buyers on or prior to the Closing Date.
          (c) Reporting Status. Until the date on which the Investors (as
defined in the Registration Rights Agreement) shall have sold all the Conversion
Shares and Warrant Shares and none of the Notes or Warrants is outstanding (the
“Reporting Period”), the Company shall cause PubCo to use every reasonable
effort to timely file all reports required to be filed with the SEC pursuant to
the 1934 Act, and the Company shall not permit PubCo to terminate its status as
an issuer required to file reports under the 1934 Act even if the 1934 Act or
the rules and regulations thereunder would otherwise permit such termination.
          (d) Financial Information. (i) The Company agrees to cause PubCo to
send the following to each Investor during the Reporting Period unless the
following are filed with the SEC through EDGAR and are available to the public
through the EDGAR system, within one Business Day after the filing thereof with
the SEC, a copy of its Annual Reports on Form 10-K or 10-KSB, any interim
reports or any consolidated balance sheets, income statements, stockholders’
equity statements and/or cash flow statements for any period other than annual,
any Current Reports on Form 8-K and any registration statements (other than on
Form S-8) or amendments filed pursuant to the 1933 Act, (ii) on the same day as
the release thereof, facsimile copies of all press releases issued by PubCo, the
Company or any of its Subsidiaries, and (iii) copies of any notices and other
information made available or given to the stockholders of PubCo or the Company
generally, contemporaneously with the making available or giving thereof to the
stockholders.
          (e) Until the Closing, the Company agrees to promptly deliver to each
Buyer a copy of all financial statements prepared by the Company for
distribution to any of the Company’s shareholders, lenders or its board of
directors.
          (f) Fees. The Company and PubCo shall reimburse Amatis Limited (a
Buyer) or its designee(s) for all reasonable costs and expenses (in addition to
any amounts previously paid) incurred in connection with the transactions
contemplated by the Transaction Documents (including all reasonable legal fees
and disbursements in connection therewith, documentation and implementation of
the transactions contemplated by the Transaction Documents and due diligence in
connection therewith), which amount may be, at the sole option of Amatis
Limited, after application of the $50,000 advance toward such fees and expenses
paid by the Company, withheld by such Buyer from its Purchase Price at the
Closing. The Company and PubCo, as applicable, shall be responsible for the
payment of any placement agent’s fees, financial advisory fees, or broker’s
commissions (other than for Persons engaged by any Buyer) relating to or arising
out of the transactions contemplated hereby, including, without limitation, any
fees or commissions payable to the Agent. The Company shall pay, or cause PubCo
to pay, and hold, or cause PubCo to hold, each Buyer harmless against, any
liability, loss or expense (including,

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without limitation, reasonable attorney’s fees and out-of-pocket expenses)
arising in connection with any claim relating to any such payment. Except as
otherwise set forth in the Transaction Documents, each party to this Agreement
shall bear its own expenses in connection with the sale of the Securities to the
Buyers.
          (g) Pledge of Securities. The Company, on behalf of itself and PubCo,
acknowledges and agrees that the Securities may be pledged by an Investor (as
defined in the Registration Rights Agreement) in connection with a bona fide
margin agreement or other loan or financing arrangement that is secured by the
Securities. The pledge of Securities shall not be deemed to be a transfer, sale
or assignment of the Securities hereunder, and no Investor effecting a pledge of
Securities shall be required to provide the Company or PubCo with any notice
thereof or otherwise make any delivery to the Company or PubCo pursuant to this
Agreement or any other Transaction Document, including, without limitation,
Section 2(f) hereof; provided that an Investor and its pledgee shall be required
to comply with the provisions of Section 2(f) hereof in order to effect a sale,
transfer or assignment of Securities to such pledgee. The Company hereby agrees
to execute and deliver, and to cause PubCo to execute and deliver, such
documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by an Investor.
          (h) Disclosure of Transactions and Other Material Information. On or
before 8:30 a.m., New York Time, on the first Business Day following the Closing
Date, the Company shall cause PubCo to file a press release (the “Press
Release”) describing the material terms of the transactions contemplated by the
Transaction Documents. On or before 8:30 a.m., New York Time, on the second
Business Day following the Closing Date, the Company shall cause PubCo to file a
Current Report on Form 8-K, describing the terms of the transactions
contemplated by the Transaction Documents in the form required by the 1934 Act
and attaching the material Transaction Documents (including, without limitation,
this Agreement (and all schedules to this Agreement), the form of each of the
Notes, the form of Warrant, the Registration Rights Agreement and the Security
Documents) as exhibits to such filing (including all attachments, the “8-K
Filing”). From and after the issuance of the Press Release, no Buyer shall be in
possession of any material, nonpublic information received from the Company,
PubCo, any of its Subsidiaries or any of their respective officers, directors,
employees or agents, that is not disclosed in the Press Release. The Company
shall not, and shall cause PubCo and each of their Subsidiaries and their and
each of their respective officers, directors, employees and agents, not to,
provide any Buyer with any material, nonpublic information regarding the
Company, PubCo or any of their Subsidiaries from and after the issuance of the
Press Release without the express written consent of such Buyer. In the event of
a breach of the foregoing covenant by the Company, any of their Subsidiaries, or
any of their respective officers, directors, employees and agents, in addition
to any other remedy provided herein or in the Transaction Documents, a Buyer
shall have the right to make a public disclosure, in the form of a press
release, public advertisement or otherwise, of such material, nonpublic
information without the prior approval by the Company, their Subsidiaries, or
any of their respective officers, directors, employees or agents. No Buyer shall
have any liability to the Company, PubCo, its Subsidiaries, or any of their
respective officers, directors, employees, stockholders or agents for any such
disclosure. Subject to the foregoing, neither the Company, PubCo, nor any Buyer
shall issue any press releases or any other public statements with respect to
the transactions contemplated hereby; provided, however, that PubCo shall be
entitled, without the prior approval of any Buyer, to

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make any press release or other public disclosure with respect to such
transactions (i) in substantial conformity with the 8-K Filing and
contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) the holders of 66 2/3% of
the outstanding principal amount of the Notes shall be consulted by PubCo in
connection with and given an opportunity to review and comment on any such press
release or other public disclosure prior to its release). Notwithstanding the
foregoing, neither PubCo nor the Company shall publicly disclose the name of any
Buyer, or include the name of any Buyer in any filing with the SEC or any
regulatory agency or Principal Market, the stock exchange or automated quotation
system upon which PubCo’s shares of Common Stock are traded, including, without
limitation, any and all discounted issuance rules, if applicable, without the
prior written consent of such Buyer, except (i) for disclosure thereof in the
8-K Filing or Registration Statement or (ii) as required by law or Principal
Market regulations, the regulations of the stock exchange or automatic quotation
system upon which PubCo’s shares of Common Stock are then traded or any order of
any court or other governmental agency, in which case PubCo shall provide such
Buyer with prior notice of such disclosure and the opportunity to review and
comment on such disclosure.
          (i) Special Dividend; Restriction on Redemption and Other Cash
Dividends. Immediately after giving effect to the Merger and the Share Exchange
(as such terms are defined in Section 7(p) hereof), PubCo shall declare and pay
an aggregate cash dividend of not more than $25.58528 per share on its
outstanding Class A Common Stock (the “Class A Dividend”) and an aggregate cash
dividend of not more than $3.21374 per share on its outstanding Class B Common
Stock (the “Class B Dividend,” and collectively with the Class A Dividend, the
“Special Dividend”). Immediately following the payment of the Special Dividend,
each share of Class A Common Stock and each share of Class B Common Stock shall,
automatically and without further action by the Company, PubCo or any other
party, convert into one share of Common Stock (such conversions, the “Required
Conversions”). So long as any Notes are outstanding, the Company shall cause
PubCo not to, directly or indirectly, redeem, or declare or pay any cash
dividend or distribution on, the Common Stock without the prior express written
consent of the holders of Notes representing not less than 66-2/3% of the
aggregate principal amount of the then outstanding Notes; provided that the
foregoing shall not prohibit the payment of the Special Dividend as contemplated
hereby.
          (j) Additional Notes; Variable Securities; Dilutive Issuances. For so
long as any Buyer beneficially owns any Securities, the Company shall cause
PubCo not to issue any Notes other than to the Buyers as contemplated hereby and
the Company shall cause PubCo not to issue any other securities that would cause
a breach or default under the Notes. For so long as any Notes or Warrants remain
outstanding, the Company shall cause PubCo not to, in any manner, issue or sell
any rights, warrants or options to subscribe for or purchase Common Stock or
directly or indirectly convertible into or exchangeable or exercisable for
Common Stock at a price which varies or may vary with the market price of the
Common Stock, including by way of one or more reset(s) to any fixed price unless
the conversion, exchange or exercise price of any such security cannot be less
than the then applicable Conversion Price (as defined in the Notes) with respect
to the Common Stock into which any Note is convertible or the then applicable
Exercise Price (as defined in the Warrants) with respect to the Common Stock
into which any Warrant is exercisable. For so long as any Notes or Warrants
remain outstanding, the Company shall cause PubCo not to, in any manner, enter
into or affect any Dilutive Issuance (as defined in

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the Notes) if the effect of such Dilutive Issuance is to cause PubCo to be
required to issue upon conversion of any Note or exercise of any Warrant any
shares of Common Stock in excess of that number of shares of Common Stock which
PubCo may issue upon conversion of the Notes and exercise of the Warrants
without breaching PubCo’s obligations under the rules or regulations of the
National Association of Securities Dealers, Inc.’s OTC Bulletin Board (the
“Principal Market”) or the stock exchange or automated quotation system upon
which PubCo’s shares of Common Stock are traded, including, without limitation,
any and all discounted issuance rules, if applicable.
          (k) Corporate Existence. So long as any Buyer beneficially owns any
Securities, the Company shall cause PubCo not to be party to any Fundamental
Transaction (as defined in the Notes) unless PubCo is in compliance with the
applicable provisions governing Fundamental Transactions set forth in the Notes
and the Warrants.
          (l) Reservation of Shares. The Company shall cause PubCo to take all
action necessary to at all times have authorized, and reserved for the purpose
of issuance, after the Closing Date, 130% of the number of shares of Common
Stock issuable upon conversion of all of the Notes and upon exercise of the
Warrants.
          (m) Conduct of Business. The business of PubCo, the Company and their
Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any governmental entity, except where such violations would not
result, either individually or in the aggregate, in a Material Adverse Effect.
          (n) Additional Issuances of Securities.
               (i) For purposes of this Section 4(n), the following definitions
shall apply.
          (A) “Convertible Securities” means any stock or securities (other than
Options) convertible into or exercisable or exchangeable for shares of Common
Stock.
          (B) “Options” means any rights, warrants or options to subscribe for
or purchase shares of Common Stock or Convertible Securities.
          (C) “Common Stock Equivalents” means, collectively, Options and
Convertible Securities.
               (ii) From the date hereof until the date that is 180 Trading Days
(as defined in the Notes) following the Effective Date (as defined in the
Registration Rights Agreement), as such date may be extended by one Trading Day
for each Trading Day following the Effective Date on which the Equity Conditions
(as defined in the Notes) are not satisfied (the “Trigger Date”), neither PubCo
nor the Company will, directly or indirectly, offer, sell, grant any option to
purchase, or otherwise dispose of (or announce any offer, sale, grant or any
option to purchase or other disposition of) any of its or its Subsidiaries’
equity or equity equivalent securities, including without limitation any debt,
preferred stock or other instrument or security that is, at any time during its
life and under any circumstances, convertible into or exchangeable or
exercisable for shares of Common Stock or Common Stock Equivalents (any such
offer, sale,

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grant, disposition or announcement being referred to as a “Subsequent
Placement”) without the prior written approval of the holders of 66-2/3% of the
aggregate principal amount of the Notes.
               (iii) From the Trigger Date until the two year anniversary of the
Closing Date, the Company shall cause PubCo not to, directly or indirectly,
effect any Subsequent Placement unless PubCo shall have first complied with this
Section 4(n)(iii).
          (A) PubCo shall deliver to each Buyer a written notice (the “Offer
Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”)
of the securities being offered (the “Offered Securities”) in a Subsequent
Placement, which Offer Notice shall (w) identify and describe the Offered
Securities, (x) describe the price and other terms upon which they are to be
issued, sold or exchanged, and the number or amount of the Offered Securities to
be issued, sold or exchanged, (y) identify the persons or entities (if known) to
which or with which the Offered Securities are to be offered, issued, sold or
exchanged and (z) offer to issue and sell to or exchange with such Buyers a pro
rata portion of 50% of the Offered Securities (a) based on such Buyer’s pro rata
portion of the aggregate principal amount of Notes purchased hereunder (the
“Basic Amount”), and (b) with respect to each Buyer that elects to purchase its
Basic Amount, any additional portion of the Offered Securities attributable to
the Basic Amounts of other Buyers as such Buyer shall indicate it will purchase
or acquire should the other Buyers subscribe for less than their Basic Amounts
(the “Undersubscription Amount”).
          (B) To accept an Offer, in whole or in part, such Buyer must deliver a
written notice to PubCo prior to the end of the 10th Business Day after such
Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the
portion of such Buyer’s Basic Amount that such Buyer elects to purchase and, if
such Buyer shall elect to purchase all of its Basic Amount, the
Undersubscription Amount, if any, that such Buyer elects to purchase (in either
case, the “Notice of Acceptance”). If the Basic Amounts subscribed for by all
Buyers are less than the total of all of the Basic Amounts, then each Buyer who
has set forth an Undersubscription Amount in its Notice of Acceptance shall be
entitled to purchase, in addition to the Basic Amounts subscribed for, the
Undersubscription Amount it has subscribed for; provided, however, that if the
Undersubscription Amounts subscribed for exceed the difference between the total
of all the Basic Amounts and the Basic Amounts subscribed for (the “Available
Undersubscription Amount”), each Buyer who has subscribed for any
Undersubscription Amount shall be entitled to purchase only that portion of the
Available Undersubscription Amount as the Basic Amount of such Buyer bears to
the total Basic Amounts of all Buyers that have subscribed for Undersubscription
Amounts, subject to rounding by PubCo to the extent its deems reasonably
necessary, which process shall be repeated until the Buyers shall have had the
opportunity to subscribe for any remaining Undersubscription Amount.
          (C) PubCo shall have 10 Business Days from the expiration of the Offer
Period above to offer, issue, sell or exchange all or any part of such Offered
Securities as to which a Notice of Acceptance has not been given by the Buyers
(the “Refused Securities”), but only to the offerees described in the Offer
Notice (if so described therein) and only upon terms and conditions (including,
without limitation, unit prices and interest rates) that are not more favorable
to the acquiring person or persons or less favorable to PubCo than those set
forth in the Offer Notice.

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          (D) In the event PubCo shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in
Section 4(n)(iii) above), then each Buyer may, at its sole option and in its
sole discretion, reduce the number or amount of the Offered Securities specified
in its Notice of Acceptance to an amount that shall be not less than the number
or amount of the Offered Securities that such Buyer elected to purchase pursuant
to Section 4(n)(iii) above multiplied by a fraction, (i) the numerator of which
shall be the number or amount of Offered Securities PubCo actually proposes to
issue, sell or exchange (including Offered Securities to be issued or sold to
Buyers pursuant to Section 4(n)(iii) above prior to such reduction) and (ii) the
denominator of which shall be the original amount of the Offered Securities. In
the event that any Buyer so elects to reduce the number or amount of Offered
Securities specified in its Notice of Acceptance, PubCo may not issue, sell or
exchange more than the reduced number or amount of the Offered Securities unless
and until such securities have again been offered to the Buyers in accordance
with Section 4(n)(iii) above.
          (E) Upon the closing of the issuance, sale or exchange of all or less
than all of the Refused Securities, the Buyers shall acquire from PubCo, and
PubCo shall issue to the Buyers, the number or amount of Offered Securities
specified in the Notices of Acceptance, as reduced pursuant to Section 4(n)(iii)
above if the Buyers have so elected, upon the terms and conditions specified in
the Offer. The purchase by the Buyers of any Offered Securities is subject in
all cases to the preparation, execution and delivery by PubCo and the Buyers of
a purchase agreement relating to such Offered Securities reasonably satisfactory
in form and substance to the Buyers and their respective counsel.
          (F) Any Offered Securities not acquired by the Buyers or other persons
in accordance with Section 4(n)(iii) above may not be issued, sold or exchanged
until they are again offered to the Buyers under the procedures specified in
this Agreement.
               (iv) The restrictions contained in subsections (ii) and (iii) of
this Section 4(n) shall not apply in connection with the issuance of any
Excluded Securities (as defined in the Notes) or any bona fide firm commitment
underwritten public offering with a nationally recognized underwriter pursuant
to an effective registration statement under the 1933 Act that generates net
proceeds to the Company or PubCo, as applicable, of at least $30 million (other
than an “at the-market offering” as defined in Rule 415(a)(4) under the 1933 Act
and “equity lines”).
          (o) Integration. None of PubCo, the Company, their Subsidiaries, their
affiliates and any Person acting on their behalf will take any action or steps
referred to in Section 3(h) that would require registration of any of the
Securities under the 1933 Act or cause the offering of the Securities to be
integrated with other offerings.
          (p) Appointment of Collateral Agent. Amatis Limited (the “Collateral
Agent”) is hereby appointed as the collateral agent for the Buyers hereunder,
and each Buyer hereby authorizes the Collateral Agent (and its officers,
directors, employees and agents) to take any and all such actions on behalf of
the Buyers with respect to the Collateral (as defined in the Security Documents)
and the Obligations in accordance with the terms of this Agreement. The
Collateral Agent shall not have, by reason hereof or any of the other
Transaction Documents, a fiduciary relationship in respect of any Buyer. Neither
the Collateral Agent nor any of its

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officers, directors, employees and agents shall have any liability to any Buyer
for any action taken or omitted to be taken in connection hereof except to the
extent caused by its own gross negligence or willful misconduct, and each Buyer
agrees to defend, protect, indemnify and hold harmless the Collateral Agent and
all of its officers, directors, employees and agents (collectively, the
“Indemnitees”) from and against any losses, damages, liabilities, obligations,
penalties, actions, judgments, suits, fees, costs and expenses (including,
without limitation, reasonable attorneys’ fees, costs and expenses) incurred by
such Indemnitee, whether direct, indirect or consequential, arising from or in
connection with the performance by such Indemnitee of the duties and obligations
of Collateral Agent pursuant hereto.
          (q) Holding Period. For the purposes of Rule 144, the Company
acknowledges, on behalf of itself and PubCo, based on current securities laws,
that the holding period of the Conversion Shares may be tacked onto the holding
period of the Notes and the holding period of the Warrant Shares may be tacked
onto the holding period of the Warrants (in the case of Cashless Exercise (as
defined in the Warrants)) and the Company, on behalf of itself and PubCo, agrees
not to take a position contrary to this Section 4(q).
          (r) OTC Bulletin Board. The Company shall cause PubCo to use best
efforts and to cooperate in Rodman & Renshaw, LLC’s application to cause the
Common Stock to become designated for quotation on the Principal Market as soon
as practicable following the Closing Date and thereafter to comply with the
rules of the Principal Market. If the Common Stock is not designated for
quotation on the Principal Market by the 10th Business Day after the earlier to
occur of the Effective Date (as defined in the Registration Rights Agreement) or
the applicable Effectiveness Deadline (as defined in the Registration Rights
Agreement) (such date, the “OTC Deadline”), then, as partial relief for the
damages to any holder by reason of any such delay in or reduction of its ability
to sell the underlying shares of Common Stock (which remedy shall not be
exclusive of any other remedies available at law or in equity), the Company
shall pay to each Investor (as such term is defined in the Registration Rights
Agreement) an amount in cash equal to (i) 1.0% of the aggregate Purchase Price
of such Investor’s Notes on the day of the OTC Deadline and (ii) 2.0% of the
aggregate Purchase Price of such Buyer’s Notes on every 30th day after the day
of the OTC Deadline (prorated for periods totaling less than 30 days) until the
Common Stock is designated for quotation on the Principal Market. The payments
to which an Investor shall be entitled pursuant to this Section 4(r) are
referred to herein as “OTC Delay Payments”. OTC Delay Payments shall be paid on
the earlier of (x) the dates set forth above and (y) the third Business Day
after the first day that the Common Stock is designated for quotation on the
Principal Market. In the event the Company fails to make OTC Delay Payments in a
timely manner, such OTC Delay Payments shall bear interest at the rate of 2.0%
per month (prorated for partial months) until paid in full. Notwithstanding
anything herein or in the Registration Rights Agreement to the contrary, (i) no
OTC Delay Payments shall be due and payable with respect to the Warrants or the
Warrant Shares and (ii) in no event shall the aggregate amount of OTC Delay
Payments payable to any Investor, together with any Registration Delay Payments
(as defined in the Registration Rights Agreement) payable to such Investor, in
each case that are outside of the control of the Company or PubCo, exceed, in
the aggregate, 10% of the aggregate Purchase Price of such Investor’s Notes.
          (s) Guaranty. On or prior to the Closing, the Company and each
Subsidiary shall execute a Guaranty in the form attached hereto as Exhibit F (a
“Guaranty”) and shall

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execute and deliver the Pledge Agreement and the Security Agreement, in the form
attached hereto as Exhibit D and Exhibit E, respectively. In addition, if PubCo,
the Company or any other Grantor (as defined in the Pledge Agreement and the
Security Agreement) shall hereafter own, create or acquire any other Subsidiary
that is not a Grantor hereunder or a party to a Guaranty, then the Company,
PubCo or such other Grantor shall promptly notify the Collateral Agent thereof
and PubCo, the Company or such other such Grantor shall cause such Subsidiary to
become a party to a Guaranty and a party to the Pledge Agreement and the
Security Agreement and to duly execute and/or deliver such opinions of counsel
and other documents, in form and substance reasonably acceptable to the
Collateral Agent or as the Collateral Agent shall reasonably request with
respect thereto.
          (t) Required Repayments; Management Payments. Contemporaneously with
the Closing, the Company or its agent shall make the Required Repayments and the
Management Payments; provided, however, (i) that prior to making any Required
Repayment, the Company shall have received from the holders of the Indebtedness
identified as “Subordinated Indebtedness” on Schedule 3(o) a written statement
acknowledging that upon payment by the Company of the Required Repayments, all
of such Indebtedness shall be satisfied and cancelled; and (ii) that prior to
making any Management Payment, the Company or its agent shall have received a
letter of transmittal from each intended recipient of such Management Payment
acknowledging that such Management Payment satisfies all of the Company’s
obligations to such recipient under (A) the Certificate of Incorporation,
(B) the Company’s Series C Preferred Stock, (C) the Company’s Series D Preferred
Stock, (D) the Company’s Restricted Stock Plan, as in effect on the date hereof,
and (E) the Master Investment Agreement, and, in each case, releasing the
Company from any and all further obligations arising from, under or with respect
thereto.
          (u) As soon as practicable after Closing, but in no event later than
10 days after the Closing, the Company shall cause PubCo and its Subsidiaries,
as applicable, to deliver to the Collateral Agent duly executed assignments for
security with respect to all of the Intellectual Property owned by PubCo and its
Subsidiaries.
          (v) As soon as practicable, but in no event later than May 31, 2006,
the Company shall deliver to the Collateral Agent evidence satisfactory to the
Collateral Agent in its sole discretion that UCC-1 Financing Statement
No. 2006011902869, filed in the Pennsylvania Secretary of State’s Office on
January 19, 2006, naming Main Line Personnel Service, Inc., as debtor, and
General Electric Capital Corporation, as secured party, has been terminated.
     5. REGISTER; TRANSFER AGENT INSTRUCTIONS.
          (a) Register. The Company shall cause PubCo to maintain at its
principal executive offices (or such other office or agency of PubCo as it may
designate by notice to each holder of Securities), a register for the Notes and
the Warrants, in which PubCo shall record the name and address of the Person in
whose name the Notes and the Warrants and have been issued (including the name
and address of each transferee), the principal amount of Notes held by such
Person, the number of Conversion Shares issuable upon conversion of the Notes
and Warrant Shares issuable upon exercise of the Warrants held by such Person.
The Company shall cause PubCo to keep the register open and available at all
times during business hours for inspection of any Buyer or its legal
representatives.

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          (b) Transfer Agent Instructions. The Company shall cause PubCo to
issue irrevocable instructions to its transfer agent, and any subsequent
transfer agent, which legend removal instructions shall be consistent with
Section 2(g) hereof and shall instruct such transfer agent to issue certificates
or credit shares to the applicable balance accounts at The Depository Trust
Company (“DTC”), registered in the name of each Buyer or its respective
nominee(s), for the Conversion Shares and the Warrant Shares issued at the
Closing or upon conversion of the Notes or exercise of the Warrants in such
amounts as specified from time to time by each Buyer to PubCo upon conversion of
the Notes or exercise of the Warrants in the form of Exhibit G attached hereto
(the “Irrevocable Transfer Agent Instructions”). If a Buyer effects a sale,
assignment or transfer of the Securities in accordance with Section 2(f) hereof,
the Company shall cause PubCo to permit the transfer and shall promptly instruct
its transfer agent to issue one or more certificates or credit shares to the
applicable balance accounts at DTC in such name and in such denominations as
specified by such Buyer to effect such sale, transfer or assignment. The Company
acknowledges, on behalf of itself and PubCo, that a breach by it of its
obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the
Company acknowledges, on behalf of itself and PubCo, that the remedy at law for
a breach of its obligations under this Section 5(b) will be inadequate and
agrees, in the event of a breach or threatened breach by the Company or PubCo of
the provisions of this Section 5(b), that a Buyer shall be entitled, in addition
to all other available remedies, to an order and/or injunction restraining any
breach and requiring immediate issuance and transfer, without the necessity of
showing economic loss and without any bond or other security being required.
     6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
          The obligation of the Company and PubCo hereunder to issue and sell
the Notes and the related Warrants to each Buyer at the Closing is subject to
the satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Company’s and PubCo’s
benefit and may be waived by the Company or PubCo at any time in their
discretion by providing each Buyer with prior written notice thereof:
          (a) Such Buyer shall have executed each of the Transaction Documents
to which it is a party and delivered the same to the Company.
          (b) Such Buyer and each other Buyer shall have delivered to the
Company the Purchase Price (less, in the case of Amatis Limited, the amounts
withheld pursuant to Section 4(f) of this Agreement) for the Notes and the
related Warrants being purchased by such Buyer at the Closing by wire transfer
of immediately available funds pursuant to the wire instructions provided by the
Company.
          (c) The representations and warranties of such Buyer shall be true and
correct in all material respects (except for those representations and
warranties that are qualified by materiality or Material Adverse Effect, which
shall be true and correct in all respects) as of the date when made and as of
the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and such Buyer shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Buyer at or prior to the Closing Date.

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     7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.
          The obligation of each Buyer hereunder to purchase the Notes and the
related Warrants at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer’s sole benefit and may be waived by such Buyer at
any time in its sole discretion by providing the Company or PubCo with prior
written notice thereof:
          (a) Each of the Company, PubCo and each of their Subsidiaries, to the
extent each is a party thereto, shall have executed and delivered to such Buyer
(i) each of the Transaction Documents, (ii) the Notes (in such principal amounts
as such Buyer shall request) being purchased by such Buyer at the Closing
pursuant to this Agreement and (iii) the Warrants (in such amounts as such Buyer
shall request) being purchased by such Buyer at the Closing pursuant to this
Agreement.
          (b) PubCo shall have delivered to such Buyer a copy of the Irrevocable
Transfer Agent Instructions, in the form of Exhibit G attached hereto, which
instructions shall have been delivered to and acknowledged in writing by the
Company’s transfer agent.
          (c) Such Buyer shall have received the opinion of Brownstein Hyatt &
Farber, P.C. (“BHF”), PubCo’s and the Company’s outside counsel, dated as of the
Closing Date, in the form of Exhibit H attached hereto.
          (d) The Company and PubCo shall have delivered to such Buyer a
certificate evidencing the formation and good standing of the Company, PubCo and
each of their Subsidiaries in such entity’s jurisdiction of formation issued by
the Secretary of State (or comparable office) of such jurisdiction, as of a date
within 10 days of the Closing Date.
          (e) The Company and PubCo shall have delivered to such Buyer a
certificate evidencing the Company’s and PubCo’s qualification as a foreign
corporation and good standing issued by the Secretary of State (or comparable
office) of each jurisdiction in which the Company and PubCo, conducts business,
as of a date within 10 days of the Closing Date.
          (f) PubCo shall have filed the Certificate of Designations,
Preferences and Rights of PubCo’s Series A Convertible Preferred Stock (the
“Certificate of Designation”) with the Secretary of State of the State of
Delaware and such Certificate of Designation shall continue to be in full force
and effect as of the Closing Date. The Company and PubCo shall have delivered to
such Buyer a certified copy of the Certificate of Incorporation and the
certificate of incorporation of PubCo, as amended by the Certificate of
Designation, as certified by the Secretary of State of the State of Colorado and
Delaware, respectively, within 10 days of the Closing Date.
          (g) The Company shall have delivered to such Buyer a certificate,
executed by the Secretary of the Company and dated as of the Closing Date, as to
(i) the resolutions consistent with Section 3(b) hereof as adopted by the
Company’s Board of Directors in a form reasonably acceptable to such Buyer,
(ii) the Certificate of Incorporation and (iii) the Bylaws, each as in effect at
the Closing, in the form attached hereto as Exhibit I.

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          (h) The representations and warranties of the Company shall be true
and correct, and the Company shall have performed, satisfied and complied in all
respects with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Closing Date. Such Buyer shall have received a certificate,
executed by the Chief Executive Officer of the Company, dated as of the Closing
Date, to the foregoing effect and as to the other matters set forth in the form
attached hereto as Exhibit J.
          (i) PubCo shall have delivered to such Buyer a letter from PubCo’s
transfer agent certifying the number of shares of Common Stock outstanding as of
the Closing Date before giving effect to the transactions contemplated hereby.
          (j) The Company and PubCo shall have obtained all governmental,
regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities.
          (k) The Company shall have (i) received pay-off letters (as provided
in Section 4(t) hereof and in the form attached hereto as Exhibit S), from each
holder of the Indebtedness identified as “Subordinated Indebtedness” on
Schedule 3(o) (the “Subordinated Indebtedness”) providing for the satisfaction
and cancellation of such Indebtedness upon the payment by the Company of the
Required Repayments, (ii) satisfied the Company’s obligations under a management
bonus pool plan of the Company (the “Restricted Stock Plan”) by making the
Management Payments, and the Company’s obligations under the Series C Preferred
Stock and the Series D Preferred Stock upon the payment of the cash and shares
of Common Stock to the persons and in the amounts set forth on
Schedule 3(aa)(ii) and (iii) paid in full and retired all other Indebtedness of
the Company and PubCo (other than the Permitted Indebtedness and the Senior
Indebtedness).
          (l) The Company, Wells Fargo Bank National Association (with its
participants, successors and assigns (“WFB”), acting through its Wells Fargo
Business Credit operating division, the Company and certain of the Company’s
Subsidiaries party to the Credit Facility (as defined in the Notes) shall have
entered into amendments to the documents related to the Senior Indebtedness (as
defined in the Notes) on the terms set forth on Exhibit K, and WFB, the Company,
PubCo and each Buyer shall have entered into and delivered the Subordination
Agreement in the form of Exhibit L (the “Subordination Agreement”).
          (m) Within 6 Business Days prior to the Closing, the Company shall
have delivered or caused to be delivered to each Buyer certified copies of UCC
financing statement search results listing any and all effective financing
statements filed within five years prior to such date in any applicable
jurisdiction that name the Company, PubCo or any of their Subsidiaries as a
debtor to perfect an interest in any of the assets thereof, together with copies
of such financing statements, none of which financing statements, except for any
financing statements filed with respect to the Senior Indebtedness and as
otherwise agreed to in writing by the Buyers, shall cover any of the Collateral
(as defined in the Security Documents), and the results of searches for any
effective tax liens and judgment liens filed against any such Person or its
property in any applicable jurisdiction, which results, except as otherwise
agreed to in writing by the Buyers, shall not show any such effective tax liens
and judgment liens.

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          (n) The Company and each Subsidiary shall have delivered or caused to
be delivered to such Buyer a Guaranty in the form attached hereto as Exhibit F
duly and validly executed and delivered by the Company.
          (o) Not less than 90% of the Company’s equity shall be acquired in a
manner and for consideration described in the Share Purchase Agreement attached
as Exhibit M hereto (the “Share Purchase”) by Global Employment Holdings, Inc.,
a Delaware corporation (hereinafter referred to as “PubCo”), which entity shall
be incorporated and in good standing in the State of Delaware, and the terms of
which shall otherwise be satisfactory to Amatis Limited in its sole discretion.
          (p) The Company or PubCo shall have filed a Certificate of Merger with
the Colorado Secretary of State pursuant to Section 7-111-104 of the Colorado
Business Corporations Act whereby a wholly-owned subsidiary of PubCo will be
merged with and into the Company (the “Merger”), pursuant to which each share of
the remaining equity securities of the Company not acquired by PubCo in the
Share Purchase will be converted into the same number of shares of Common Stock
as in the Share Purchase (the “Share Exchange”), and after giving effect to the
Merger, the Required Repayments and the Management Payments, the shareholders of
the Company, management and the holders of the Subordinated Indebtedness
immediately prior to the Share Purchase, the Merger, the Required Repayments and
the Management Payments will own, on a fully-diluted basis following completion
of the Share Purchase, the Merger, the Required Repayments and the Management
Payments but before giving effect to the Junior Financing (as defined in
Section 7(v)), not less than 97% of PubCo’s common equity.
          (q) The Company shall have delivered to each Buyer audited financial
statements of the Company prepared in accordance with GAAP for the periods ended
December 28, 2003, January 2, 2005 and January 1, 2006, audited by Mayer Hoffman
McCann P.C. or another auditing firm of regionally recognized standing
acceptable to Amatis Limited in its sole discretion, which financial statements
(i) shall contain an opinion of such auditor prepared in accordance with
generally accepted auditing standards (which opinion shall be without (x) a
“going concern” or like qualification or exception, (y) any qualification or
exception as to the scope of such audit, or (z) any qualification which relates
to the treatment or classification of any item and which, as a condition to the
removal of such qualification, would require an adjustment to such item, the
effect of which would be to cause any noncompliance with the provisions of
Section 14(e) (financial covenants) of the Notes), (ii) shall fulfill the
financial statement requirements for inclusion in both the Current Report on
Form 8-K and registration statement on Form S-1 that PubCo will be obligated to
file following the Closing, (iii) shall be materially in conformity with the
financial statements of the Company (audited by Grant Thornton) for the periods
ended December 28, 2003 and January 2, 2005 previously provided to the Buyers
(other than any non-material change in the balance of the accrued liability
related to the worker’s compensation insurance program in place prior to
August 2002, as more fully explained in Notes A and N to the 2004 annual report
(the “Worker’s Compensation Adjustment”)), and (iv) shall reflect earnings
before interest, taxes, depreciation and amortization (EBITDA) (after adjustment
for (A) the Worker’s Compensation Adjustment, (B) the annual management fee to
KRG Capital Partners, LLC, (C) charges related to employee terminations in the
first quarter of 2005, (D) fees and expenses related to the Share Purchase, the
Required Repayments, the Management Payments and the transactions contemplated
hereby and (E) accounting treatment of the Share

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Purchase, the Merger, the Required Repayments, the Management Payments and the
transactions contemplated hereby with respect to outstanding management equity
plan shares and preferred shares of the Company prior to giving effect to the
transactions contemplated hereby)) for the fiscal year ended January 1, 2006 of
at least $10,500,000.
          (r) Assuming the payment of the Special Dividend, the Required
Repayments and the Management Payments, PubCo’s capitalization and contingent
liabilities shall be substantially identical to that set forth on Exhibit N
hereto, after giving effect to the Share Purchase, the Required Repayments, the
Merger, the Special Dividends, the Management Payments, the increase in Senior
Indebtedness as contemplated in Exhibit K attached hereto and the Junior
Financing (as defined below), and Mayer Hoffman McCann P.C. (or the other
auditing firm referred to in clause (q) above) shall have delivered to such
Buyer a statement that such firm has reviewed the pro forma capitalization and
contingent liabilities, such statement to be in substantially similar form to a
customary comfort letter issued to an underwriter in connection with a
registration statement on Form S-1.
          (s) Each Executive Officer and officer of PubCo who assumes the duties
of any such Executive Officer after the date hereof shall have entered into
non-competition and non-solicitation agreements with the Company and PubCo in
the form of Exhibit O and in substance satisfactory to Amatis Limited in its
sole discretion, together with agreements between each such member of management
and PubCo providing that (i) PubCo shall not grant demand or piggyback
registration rights to any such individual or otherwise agree to register any
securities held by any such individual for resale, for a period of one year, and
(ii) no such individual shall sell any securities of PubCo owned of record or
beneficially by such individual for one year from Closing and no such individual
shall sell more than one-third of his or her securities owned of record or
beneficially at the Closing for a period of within two years from the Closing
Date.
          (t) There shall not have developed, occurred, or come into effect or
existence after the date hereof any change, or any development involving a
prospective change, in or affecting the position of the Company or PubCo,
financial or otherwise, that has had, or would be expected to have, a Material
Adverse Effect on the Company’s or PubCo’s general affairs, management,
financial condition, shareholders’ equity, results of operations or prospects,
as determined by Amatis Limited in its sole discretion.
          (u) There shall not have developed, occurred or come into effect or
existence (A) any suspension or material limitation in trading in securities
generally or of PubCo’s shares, (B) a moratorium on commercial banking
activities by either federal or New York State authorities, or (C) any event,
action, state, condition or major financial occurrence of national or
international consequence, including any outbreak or escalation or hostilities,
acts of terrorism, war, national or international emergency, calamity or crisis
or like event, or any governmental action, law, regulation, inquiry or other
occurrence of any nature which, in the case of any event specified in this
clause (C), in the sole opinion of Amatis Limited, materially adversely affects
or may materially affect the financial markets or the business, operations,
affairs or prospects of the Company or PubCo.

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          (v) The Company shall have, concurrently with the Closing, consummated
the transactions contemplated by the purchase agreements attached hereto as
Exhibit P and Exhibit Q securing financing of at least $12.75 million of
preferred stock (the “Preferred Equity”) and at least $4.25 million of Common
Stock (the “Common Equity”), respectively (collectively the “Junior Financing”),
provided, however, the Junior Financing may be reduced to not less than
$14.0 million provided that every dollar of reduction of the Junior Financing
shall result in an additional dollar of equity from the current shareholders of
the Company being rolled over into equity of PubCo, and provided, further, that
any such reduction in the Junior Financing shall be made pro rata between the
Preferred Equity and the Common Equity.
          (w) The Company shall have, concurrently with the Closing, paid in
full and retired all Indebtedness of the Company and PubCo (other than the
Permitted Indebtedness and the Senior Indebtedness set forth on Schedule 3(o).
          (x) PubCo shall have executed and delivered a joinder agreement to
this Agreement, in the form of Exhibit R, dated as of the Closing Date (the
“Joinder Agreement”), to the effect that upon the Closing (i) each of the
representations and warranties made by the Company set forth in Section 3
hereof, mutatis mutundis, shall be true and correct as if each reference to the
Company in such representations and warranties was a reference to PubCo,
(ii) PubCo assumes all covenants and obligations of PubCo set forth herein and
(iii) PubCo assumes all covenants and obligations of the Company set forth
herein (including, without limitation, all indemnification obligations) as if
each obligation of the Company and each reference thereto contained elsewhere
herein was an obligation of and a reference to PubCo.
          (y) Such Buyer shall have been satisfied, in its sole discretion, as
to its due diligence investigation of PubCo, including, without limitation, the
audited annual financial statements of PubCo.
          (z) All equity securities and derivative securities convertible or
exercisable into equity securities of PubCo or the Company, shall have been,
concurrently with the Closing, cancelled or terminated.
          (aa) The Company shall have delivered to such Buyer such other
customary documents relating to the transactions contemplated by this Agreement
as such Buyer or its counsel may reasonably request.
     8. TERMINATION. In the event that the Closing shall not have occurred with
respect to a Buyer on or before March 31, 2006 due to the Company’s or such
Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7 above
(and a nonbreaching party’s failure to waive such unsatisfied condition(s)), any
such nonbreaching party shall have the option to terminate Sections 1, 5, 6 and
7 of this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party, except
as set forth below; provided, however, if the foregoing Sections of this
Agreement are terminated pursuant to this Section 8, the Company shall remain
obligated to reimburse the non-breaching Buyers for the amounts described in
Section 4(f) above. Notwithstanding the foregoing, if at any time prior to
December 28, 2006, (i) the Company closes any transaction or series of
transactions, other than the transactions contemplated hereby, which has the
effect of recapitalizing the Company,

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either by paying down existing senior lenders or by refinancing other than a
refinancing of the existing Indebtedness with Wells Fargo Business Credit or
subsequent refinancing of same (provided that in no event shall such
Indebtedness be increased or be on materially different terms) or involves any
Subsequent Placement or (ii) the Company receives an offer for any of the
foregoing and within twelve months thereof, pursues such transaction or series
of transactions as within such twelve month period then, the Company shall
promptly pay to Amatis Limited $150,000 (the “Break-up Fee”) in addition to any
costs and expenses that the Company will be obligated to pay hereunder;
provided, that (A) if the parties fail to reach mutually acceptable terms to
consummate the transactions contemplated hereby or (B) if the transactions
contemplated hereby are not consummated due to the failure of the Buyers to
fulfill their obligations under this Agreement, the Company shall not be
obligated to pay the Break-up Fee.
     9. MISCELLANEOUS.
          (a) Governing Law; Jurisdiction; Jury Trial. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
          (b) Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
          (c) Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

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          (d) Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
          (e) Entire Agreement; Amendments. This Agreement supersedes all other
prior oral or written agreements between the Buyers, the Company, their
affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of at least 66-2/3% of the aggregate principal amount of
Notes to be issued hereunder, and any amendment to this Agreement made in
conformity with the provisions of this Section 9(e) shall be binding on all
Buyers and holders of Securities, as applicable. No provision hereof may be
waived other than by an instrument in writing signed by the party against whom
enforcement is sought. No such amendment shall be effective to the extent that
it applies to less than all of the holders of the applicable Securities then
outstanding. No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration also is offered to all of the parties to
the Transaction Documents, holders of Notes, or holders of the Warrants, as the
case may be. The Company has not, directly or indirectly, made any agreements
with any Buyers relating to the terms or conditions of the transactions
contemplated by the Transaction Documents except as set forth in the Transaction
Documents.
          (f) Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
an overnight courier service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
If to the Company:
Global Employment Solutions, Inc.
9090 Ridgeline Boulevard, Suite 205
Littleton, Colorado 80129
Telephone: (303) 216-9500
Facsimile: (303) 216-9533
Attention: Chief Executive Officer
Copy to:
Brownstein Hyatt & Farber, P.C.
410 17th Street

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Denver, CO 80202
Telephone:      (303) 223-1160
Facsimile:      (303) 223-1111
Attention:      Jeff Knetsch
          If to a Buyer, to its address and facsimile number set forth on the
Schedule of Buyers, with copies to such Buyer’s representatives as set forth on
the Schedule of Buyers,
Copy (for informational purposes only) to:
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Telephone:      (212) 756-2000
Facsimile:      (212) 593-5955
Attention:      Eleazer N. Klein, Esq.
or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated by
the sender’s facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission (C) provided by an
overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance
with clause (i), (ii) or (iii) above, respectively.
          (g) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Notes or the Warrants. The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the holders of at least 66 2/3% of the aggregate principal
amount of Notes issued hereunder, including by way of a Fundamental Transaction
(unless the Company is in compliance with the applicable provisions governing
Fundamental Transactions set forth in the Notes and the Warrants). A Buyer may
assign some or all of its rights hereunder without the consent of the Company,
in which event such assignee shall be deemed to be a Buyer hereunder with
respect to such assigned rights.
          (h) No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except to the extent set forth in Section 9(k) below.
          (i) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in
Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5, 8
and 9 shall survive the Closing. Each Buyer shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.

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          (j) Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
          (k) Indemnification. In consideration of each Buyer’s execution and
delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company’s other obligations under the Transaction
Documents, the Company, on behalf of itself and PubCo, shall defend, protect,
indemnify and hold harmless each Buyer and each other holder of the Securities
and all of their stockholders, partners, members, officers, directors, employees
and direct or indirect investors and any of the foregoing Persons’ agents or
other representatives (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement) (collectively,
the “Indemnitees”) from and against any and all actions, causes of action,
suits, claims, losses, costs, penalties, fees, liabilities and damages, and
expenses in connection therewith (irrespective of whether any such Indemnitee is
a party to the action for which indemnification hereunder is sought), and
including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or
relating to (a) any misrepresentation or breach of any representation or
warranty made by the Company or PubCo in any Transaction Documents, (b) any
breach of any covenant, agreement or obligation of the Company or PubCo
contained in any Transaction Documents or (c) any cause of action, suit or claim
brought or made against such Indemnitee by a third party (including for these
purposes a derivative action brought on behalf of the Company or PubCo) and
arising out of or resulting from (i) the execution, delivery, performance or
enforcement of any Transaction Documents, (ii) any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of the
issuance of the Securities, (iii) any disclosure made by such Buyer pursuant to
Section 4(h) hereof, or (iv) the status of such Buyer or holder of the
Securities as an investor in the Company or PubCo pursuant to the transactions
contemplated by the Transaction Documents. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law. Except as
otherwise set forth herein, the mechanics and procedures with respect to the
rights and obligations under this Section 9(k) shall be the same as those set
forth in Section 6 of the Registration Rights Agreement.
          (l) No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
          (m) Remedies. Each Buyer and each holder of the Securities shall have
all rights and remedies set forth in the Transaction Documents and all rights
and remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any
law. Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. Furthermore, the
Company recognizes, on behalf of itself and PubCo, that in the event that it
fails to perform, observe, or

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discharge any or all of its obligations under the Transaction Documents, any
remedy at law may prove to be inadequate relief to the Buyers. The Company
therefore agrees that the Buyers shall be entitled to seek temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages and without posting a bond or other security.
          (n) Payment Set Aside. To the extent that the Company or PubCo makes a
payment or payments to the Buyers hereunder or pursuant to any of the other
Transaction Documents or the Buyers enforce or exercise their rights hereunder
or thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any
bankruptcy law, foreign, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.

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          (o) Independent Nature of Buyers’ Obligations and Rights. The
obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity or group, or create a presumption that the
Buyers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each
Buyer confirms that it has independently participated in the negotiation of the
transaction contemplated by this Agreement and the Transaction Documents with
the advice of its own counsel and advisors, that it has independently determined
to enter into the transactions contemplated hereby and thereby, that it is not
relying on any advice from or evaluation by any other Buyer, and that it is not
acting in concert with any other Buyer in making its purchase of Securities
hereunder or in monitoring its investment in PubCo. The Buyers and, to its
knowledge, the Company agree that no action taken by any Buyer pursuant hereto
or to the other Transaction Documents, shall be deemed to constitute the Buyers
as a partnership, an association, a joint venture or any other kind of entity or
group, or create a presumption that the Buyers are in any way acting in concert
or would deem such Buyers to be members of a “group” for purposes of Section
13(d) of the 1934 Act. The Buyers have not agreed to act together for the
purpose of acquiring, holding, voting or disposing of equity securities of
PubCo. The Company has elected to provide all Buyers with the same terms and
Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by any of the Buyers. The Company acknowledges
that such procedure with respect to the Transaction Documents in no way creates
a presumption that the Buyers are in any way acting in concert or as a “group”
for purposes of Section 13(d) of the 1934 Act with respect to the Transaction
Documents or the transactions contemplated hereby or thereby. Each Buyer shall
be entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any other
Transaction Documents, and it shall not be necessary for any other Buyer to be
joined as an additional party in any proceeding for such purpose.
[Signature Page Follows]

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     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

              COMPANY:
 
            GLOBAL EMPLOYMENT SOLUTIONS, INC.
 
       
 
  By:   /s/ Howard Brill
 
       
 
      Name: Howard Brill
 
      Title: President and Chief Executive Officer

[Signature Page to Securities Purchase Agreement]

 

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     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

                  BUYERS:
 
                AMATIS LIMITED
 
      By:   Amaranth Advisors, L.L.C.,
 
          Its Trading Advisor
 
           
 
  By:   /s/ Karl J. Wachter          SVC          
 
      Name:   Karl J. Wachter
 
      Title:   Authorized Signatory

[Signature Page to Securities Purchase Agreement]

 

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     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

                  OTHER BUYERS:
 
                RADCLIFFE SPC, LTD.     for and on behalf of the Class A
Convertible     Crossover Segregated Portfolio
 
                By:   RG Capital Management, L.P.         By:  RGC Management
Company, LLC
 
           
 
      By:   /s/ GERALD F. STAHLECKER
 
           
 
      Name:   Gerald F. Stahlecker
 
      Title:   Managing Director

[Signature Page to Securities Purchase Agreement]

 

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     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

              BUYERS:
 
       
 
            MAGNETAR CAPITAL MASTER     FUND, LTD
 
            By: Magnetar Financial LLC     Its: Investment Manager
 
       
 
  By:   /s/ PAUL SMITH
 
       
 
       
 
            Name: Paul Smith     Title: General Counsel

It is expressly understood and agreed that any closing condition requiring the
execution and delivery of any agreement containing a “lock-up” (including,
without limitation, as set forth in Section 7(s)) shall not be applicable to the
purchase by, or for the benefit of, Magnetar Capital Master Fund, Ltd.
notwithstanding anything contained in this Agreement or in any such agreement.
It is expressly understood and agreed that the purchase by Magnetar Capital
Master Fund, Ltd. ("Magnetar") under this Agreement is subject to the Security
Documents and the interests being granted therein only being for Magnetar’s
benefit to the extent of Magnetar’s interest in Magnetar’s Note itself and not
in any way with respect to any obligations of the Company with respect to any
other security of the Company (including, without limitation, the Common Stock,
the Warrants or the Warrant Shares or under the Registration Rights Agreement)
or to the extent that any of the foregoing may give rise obligations under
Magnetar’s Note itself.
[Signature Page to Notes Securities Purchase Agreement]

 

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     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

         
BUYERS:
       
 
       
 
        By:   /s/ JONATHAN WOOD      
 
  Name:
Title:   Whitebox Intermarket Partners LP
     Whitebox Intermarket Advisors LLC
          Whitebox Advisors LLC
               Jonathan Wood, Chief Financial Officer/Director
 
       
 
      Whitebox Convertible Arbitrage Partners LP
     Whitebox Convertible Arbitrage Advisors LLC
          Whitebox Advisors LLC
               Jonathan Wood, Chief Financial Officer/Director
 
       
 
                Guggenheim Portfolio Company XXXI, LLC
               Guggenheim Advisors, LLC
                    Whitebox Advisors LLC
                         Jonathan Wood, Chief Financial Officer
 
       
 
                Pandora Select Partners LP
               Pandora Select Advisors LLC
                    Jonathan Wood, Chief Financial Officer/Director

[Signature Page to Notes Securities Purchase Agreement]

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     IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

            BUYERS: Context Convertible Arbitrage Fund, LP
      By:   /s/ William D. Fertig         Name:   William D. Fertig       
Title:   CIO & Co-Chairman
Context Capital Management LLC
General Partner     

            BUYERS: Context Convertible Arbitrage Offshore, Ltd
      By:   /s/ William D. Fertig         Name:   William D. Fertig       
Title:   CIO & Co-Chairman
Context Capital Management LLC
Investment Adviser     

            BUYERS: Context Opportunistic Master Fund, LP
      By:   /s/ William D. Fertig         Name:   William D. Fertig       
Title:   CIO & Co-Chairman
Context Capital Management LLC
Investment Adviser     

[Signature Page to Notes Securities Purchase Agreement]

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SCHEDULE OF BUYERS

                                  (1)   (2)   (3)     (4)     (5)     (6)      
  Aggregate                           Principal                       Address
and   Amount of     Number of     Convertible Debt     Legal Representative’s
Address Buyer   Facsimile Number   Notes     Warrant Shares     Purchase Price  
  and Facsimile Number  
Amatis Limited
  c/o Amaranth Advisors L.L.C.                           Schulte Roth & Zabel
LLP
 
  One American Lane                           919 Third Avenue
 
  Greenwich, CT 06831                           New York, New York 10022
 
  Attention: General Counsel                           Attention: Eleazer Klein,
 
  Facsimile: (203) 422-3540                           Esq.
 
  Telephone: (203) 422-3340                           Facsimile: (212) 593-5955
 
  Residence: Cayman Islands   $ 18,170,000.00       290,720.00     $
18,170,000.00     Telephone: (212) 756-2376
Radcliffe SPC, Ltd.
  c/o RG Capital Management, L.P.                            
for and on behalf
  3 Bala Plaza - East, Suite 501                            
of Class A
  Bala Cynwyd, PA 19004                            
Convertible
  Attention: Gerald Stahlecker
                          Drinker Biddle & Reath LLP
Crossover
  Facsimile: (610) 617-5900                           One Logan Square
Segregated
  Telephone: (610) 617-0570                           Philadelphia, PA
19103-6996
Portfolio
  Residence: Cayman Islands   $ 2,500,000.00       40,000.00     $ 2,500,000.00
    Facsimile: (215) 988-2757
Magnetar Capital
  1603 Orrington Ave., #1300                            
Master Fund, Ltd.
  Evanston, IL 60201                            
 
  Telephone: (847) 905-4707   $ 1,000,000.00       16,000.00     $ 1,000,000.00
     

 

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                                  (1)   (2)   (3)     (4)     (5)     (6)      
  Aggregate                           Principal                       Address
and   Amount of     Number of     Convertible Debt     Legal Representative’s
Address Buyer   Facsimile Number   Notes     Warrant Shares     Purchase Price  
  and Facsimile Number
Whitebox
  3033 Excelsior Blvd., #300                            
Convertible
  Minneapolis, MN 55416                            
Arbitrage Partners, LP
  Telephone: (612) 253-6028   $ 3,620,000.00       57,920.00     $ 3,620,000.00
     
Guggenheim
  3033 Excelsior Blvd., #300                            
Portfolio XXXI, LLC
  Minneapolis, MN 55416                            
 
  Telephone: (612) 253-6028   $ 260,000.00       4,160.00     $ 260,000.00      
Pandora Select
  3033 Excelsior Blvd., #300                            
Partners, LP
  Minneapolis, MN 55416                            
 
  Telephone: (612) 253-6028   $ 560,000.00       8,960.00     $ 560,000.00      
Whitebox
  3033 Excelsior Blvd., #300                            
Intermarket
  Minneapolis, MN 55416                            
Partners, LP
  Telephone: (612) 253-6028   $ 560,000.00       8,960.00     $ 560,000.00      
Context Convertible
  289 Greenwich Avenue, 4th Floor                            
Arbitrage Fund, LP
  Greenwich CT 06830                            
 
  Telephone: (203) 422-0197   $ 550,000.00       8,800.00     $ 550,000.00      

 

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                                  (1)   (2)   (3)     (4)     (5)     (6)      
  Aggregate                           Principal                       Address
and   Amount of     Number of     Convertible Debt     Legal Representative’s
Address Buyer   Facsimile Number   Notes     Warrant Shares     Purchase Price  
  and Facsimile Number
Context Convertible
  289 Greenwich Avenue, 4th Floor                            
Arbitrage Offshore,
  Greenwich CT 06830                            
Ltd.
  Telephone: (203) 422-0197   $ 2,114,000.00       33,824.00     $ 2,114,000.00
     
Context
  289 Greenwich Avenue, 4th Floor                            
Opportunistic
  Greenwich CT 06830                              
Master Fund, L.P.
  Telephone: (203) 422-0197   $ 666,000.00       10,656.00     $ 666,000.00    
 

 

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DISCLOSURE SCHEDULE
Global Employment Solutions, Inc. (the “Company”) delivers these schedules (the
“Schedules”) in connection with the following agreements:

  •   Notes Securities Purchase Agreement, dated as of March 31, 2006, by and
among the Company and various buyers (the “Notes SPA”)     •   Preferred Stock
Securities Purchase Agreement, dated as of March 31, 2006, by and among the
Company and various buyers (the “Preferred SPA”)     •   Common Stock Securities
Purchase Agreement, dated as of March 31, 2006, by and among the Company and
various buyers (the “Common SPA”)

The Notes SPA, the Preferred SPA and the Common SPA are collectively referred to
as the “Agreements.” These Schedules are an integral part of the Agreements, are
incorporated therein by reference and are not intended to be an independent
document. Disclosure of any item herein shall not constitute an admission that
such item is required to be disclosed, and the information contained herein is
disclosed solely for the purposes of the Agreements. Nothing contained herein
shall be deemed to be an admission by any party hereto to any third party of any
matter whatsoever, including, without limitation, any violation of law or breach
of agreement. The schedule numbers in these Schedules correspond to the section
numbers in the Agreements. References to any document do not purport to be
complete and are qualified in their entirety by the document itself. Capitalized
terms used but not defined herein shall have the same meanings given them in the
Agreements.

 

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Schedule 3(a)
Subsidiaries
     The table below sets forth all subsidiaries of Global Employment Holdings,
Inc. and the state or other jurisdiction of incorporation or organization of
each subsidiary.

          State of Subsidiary   Incorporation
Global Merger Corp(1)
  CO
Global Employment Solutions, Inc.(2)
  CO
Excell Personnel Services, Inc.(3)
  IL
PD Quick Temps Inc.(4) (inactive)
  PA
Friendly Advanced Software Technology, Inc.(3)
  NY
Main Line Personnel Service, Inc.(3)
  PA
Southeastern Personnel Management, Inc.(3)
  FL
Southeastern Staffing, Inc.(3)
  FL
Bay HR, Inc.(5)
  FL
Placer Staffing, Inc.(5) (inactive)
  CA
Southeastern Georgia HR, Inc.(5)
  GA
Southeastern Staffing II, Inc.(5)
  FL
Southeastern Staffing III, Inc.(5)
  FL
Southeastern Staffing IV, Inc.(5)
  FL
Southeastern Staffing V, Inc.(5)
  FL
Southeastern Staffing VI, Inc.(5)
  FL
Temporary Placement Service, Inc.(3)
  GA

 

(1)   Wholly-owned subsidiary of Global Employment Holdings, Inc.   (2)  
Majority-owned subsidiary of Global Merger Corp   (3)   Wholly-owned subsidiary
of Global Employment Solutions, Inc.   (4)   Wholly-owned subsidiary of Excell
Personnel Services, Inc.   (5)   Wholly-owned subsidiary of Southeastern
Staffing, Inc.

 

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Schedule 3(m)
Transactions with Affiliates
The Company leases office space in Dalton, Georgia from MPS Partnership in which
Stephen Pennington, one of its executive officers, is a partner. For the fiscal
years ended 2005, 2004 and 2003, the Company paid rent to MPS Partnership in the
amounts of approximately $74,000, $74,250 and $59,900, respectively. The Company
expects to continue renting office space from Mr. Pennington for the foreseeable
future.
The Company is party to a management consulting agreement with KRG Colorado, LLC
(“KRG”), a company controlled by some of the Company’s shareholders. The
agreement will be terminated upon the closing of the transaction contemplated by
the Agreements. Under the agreement, the Company receives management, advisory
and corporate structure services from KRG for an annual fee. KRG is eligible for
a bonus fee, based on performance thresholds, for each fiscal year, and fees
related to acquisitions and divestitures. On November 15, 2001, KRG agreed to
waive and forgive amounts accrued as of that date. During the fiscal years ended
January 1, 2006 and January 2, 2005, the Company paid $180,000 and $90,000,
respectively, in consulting fees, and such amounts were included in operating
expenses in the statements of income. The Company did not pay KRG under the
agreement during the fiscal year ended December 28, 2003.
The Company will cause PubCo to issue KRG 50,000 shares of PubCo common stock,
valued at $5 per share, upon the consummation of the transaction contemplated by
the Agreements in consideration for financial advisory services rendered by KRG
during the transaction.
In 2001, KRG, advanced working capital funds to the Company in the approximate
principal amount of $1,500,000 in exchange for a promissory note. These advances
are non-interest bearing and were to mature on February 5, 2005, or share in
distributable proceeds from a sale of the Company along with other holders of
the Company’s subordinated debt. On February 25, 2005, the maturity date of
these notes was extended to February 28, 2007. The Company will retire the debt
on the closing of the transaction contemplated by the Agreements through a
payment partly in cash, partly in PubCo common stock.
In 2001, as part of a recapitalization, certain of the management and debt and
equity holders of the Company formed a limited liability company named Global
Investment I, LLC (the “LLC”) for the purpose of purchasing at a discount
certain senior debt of the Company. The Company then issued its Series C
preferred stock to the LLC to retire the senior debt and related accrued
interest. It is expected that the LLC will participate in the Recapitalization
and thereby exchange its shares of the Company’s Series C preferred stock for
PubCo Common Stock. Furthermore, it is expected that the LLC will dissolve and
distribute to its members all its assets, including any PubCo Common Stock held,
shortly after the Closing.

 

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Schedule 3(n)
Outstanding Securities
542,166 warrants are exercisable into 542,166 shares of common stock at $.01 per
share, at any time prior to the earlier of March 13, 2008 or six years after the
Company’s senior subordinated notes are paid in full. The warrants provide the
holders the right to require the Company to redeem them for fair value at any
time after July 29, 2003. Pursuant to Section 5.1(d) of the Share Purchase
Agreement, dated March 31, 2006, among GES, PubCo and GES shareholders signatory
thereto, the warrants are forfeited to GES and cancelled, without any further
action required, in consideration of the warrant holders’ receiving PubCo Common
Stock and the Special Dividend upon consummation of the transaction contemplated
by the Agreements.
2,000,000 shares of GES common stock are issued under the Company’s Restricted
Stock Plan; all of these shares will be repurchased for the amount set forth on
Schedule 3(aa)(ii) to the Notes SPA and Schedule 3(y)(ii) to the Preferred SPA
and the Common SPA.

 

--------------------------------------------------------------------------------

 

Schedule 3(o)
Indebtedness and Other Contracts
Senior Indebtedness
Effective in March 2002 and as subsequently amended in June 2003, August 2004,
January 2005 and May 2005, the Company and its subsidiaries executed a Credit
and Security Agreement (the “Credit Agreement”) with Wells Fargo Bank, National
Association (“Wells Fargo”) for revolving credit borrowings and letters of
credit collateralized by the Company’s accounts receivable. Maximum available
borrowings of up to $10.0 million ($7.5 million prior to August 30, 2004) are
limited to 85% of eligible billed receivables and 70% of unbilled receivables.
Interest was payable at Wells Fargo’s prime rate plus 1% per annum through
August 29, 2004, and effective August 30, 2004, interest is payable at Wells
Fargo’s prime rate (7% at January 1, 2006), subject to a minimum of $7,500 per
month. A fee of 0.25% per annum is payable on the unused portion of the
commitment. The term of the Credit Agreement expires on July 31, 2006. There
were no outstanding borrowings at January 1, 2006 and January 2, 2005. The
Credit Agreement requires certain customer payments to be paid directly to
blocked lockbox accounts controlled by Wells Fargo, and the Credit Agreement
contains a provision that allows the lender to call the outstanding balance of
the line of credit if any material adverse change in the business or financial
condition of the Company occurs. As of the date hereof and prior to giving
effect to the transaction contemplated by the Agreements, there is an aggregate
of $235,085 outstanding under the Credit Agreement, consisting of two
outstanding letters of credit with Wells Fargo, both of which will remain
outstanding after the closing of the transaction contemplated by the Agreements
until they expire on December 31, 2006.
Concurrently with the Closing, the Credit Agreement will be further amended
pursuant to a Fifth Amendment to the Credit Agreement that will effect the
following changes to the credit facilities provided by Wells Fargo: (i) the
maximum amount of revolving credit borrowings (including letters of credit) will
be increased to $15.0 million and the maturity date for the revolving portion of
the credit facility will be extended to January 31, 2009, (ii) Wells Fargo will
provide a term loan to the borrowers under the Credit Agreement in the amount of
$5.0 million, with interest thereon to accrue at Wells Fargo’s prime rate plus
2.75% per annum, and payable based on a 36-month amortization with a balloon
payment at maturity on April 1, 2008, (iii) 25% of excess cash flow of the
borrowers will be applied to make principal payments in respect of the term loan
on an annual basis, (iv) advance rates will change to 90% for eligible billed
accounts receivable and 75% for eligible unbilled accounts receivable (reducing
to 85% and 70%, respectively, upon payment of the term loan), (v) the borrowers
will pay an amendment fee of $175,000 to Wells Fargo concurrently with the
Closing, (vi) the requirement for minimum average availability under the
revolving portion of the credit facility will be increased to $2.0 million, and
(vii) certain changes will be made to the financial covenants imposed by the
Credit Agreement.

 

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Subordinated Indebtedness
Senior Subordinated Notes
On March 13, 1998, the Company entered into a senior subordinated Note Purchase
Agreement as part of its acquisition of Temporary Placement Service, Inc. and
Excell Personnel Service Corporation. This agreement was amended on July 29,
1998, and September 11, 1998, in conjunction with the Company’s acquisitions of
four other companies. This agreement was further amended on November 15, 2001 as
part of a recapitalization.
The senior subordinated notes bore interest at a fixed annual rate of 13% per
annum. Monthly interest payments of approximately $151,000 were originally to be
paid through September 30, 2004. However, interest payments have not been made
after November 2000, and as amended in conjunction with a 2001 recapitalization,
all remaining principal, together with all unpaid interest as of November 15,
2001, was payable on February 28, 2005. However, on February 25, 2005 the
maturity date of these notes was extended to February 28, 2007. Interest ceased
to accrue on these notes effective November 15, 2001. If the Company is sold
prior to maturity, the subordinated note holders will be entitled to receive
only the amount provided for by the sales proceeds distribution schedule as
described in the Master Investment Agreement.
The Company will retire the senior subordinated notes on the closing of the
transaction contemplated by the Agreements through a payment partly in cash,
partly in PubCo Common Stock.
Purchase Money Subordinated Notes
In conjunction with the Company’s purchase of Southeastern Staffing, Inc., the
Company issued subordinated notes to the sellers that bore interest at a fixed
rate of 8% per annum, payable quarterly. Quarterly principal payments were to
commence June 30, 2000, until paid in full, with any remaining balance due at
maturity on July 29, 2005. As part of a 2001 recapitalization, effective
November 15, 2001, the remaining notes no longer bear interest and were
scheduled to mature July 29, 2005, or share in proceeds from a sale of the
Company along with other subordinated note holders. On February 25, 2005, the
maturity date of these notes was extended to February 28, 2007.
The Company will retire the purchase money subordinated notes on the closing of
the transaction contemplated by the Agreements through a payment partly in cash,
partly in PubCo Common Stock.
KRG Colorado, LLC Subordinated Note
In 2001, KRG advanced working capital funds to the Company in the approximate
principal amount of $1,500,000 in exchange for a promissory note. These advances
are non-interest bearing and were to mature on February 5, 2005, or share in
distributable proceeds from a sale of the Company along with other holders of
the Company’s subordinated debt. On February 25, 2005, the maturity date of
these notes was extended to February 28, 2007.

 

--------------------------------------------------------------------------------

 

The Company will retire the subordinated note on the closing of the transaction
contemplated by the Agreements through a payment partly in cash, partly in PubCo
Common Stock.
Financing Statements to Secure Indebtedness

                  Debtor   Secured Party   Type   File #   Collateral
Global
Employment
Solutions, Inc.
  Wells Fargo Business Credit, Inc.   Financing
Statement
(and 3
amendments)    20012107251 
 20022009136 
 20022017483 
 20022032356   Personal property
 
               
Global
Employment
Solutions, Inc.
  U.S. Bancorp   Financing
Statement    20012113564    Equipment lease
 
               
Bay HR, Inc.
  Wells Fargo Business
Credit, Inc   Financing
Statement    200407033031    Personal property
 
               
Excell Personnel
Service
Corporation
  Wells Fargo Business
Credit, Inc   Financing
Statement
(and 1
amendment)    4465054000 
 4807456     Personal property
 
               
Friendly Advanced
Software
Technology, Inc.
  Wells Fargo Business
Credit, Inc   Financing
Statement
(and 3
amendments)    228104 
 040570 
 040572 
 070535     Personal property
 
               
Main Line
Personnel
Services, Inc.
  Wells Fargo Business
Credit, Inc   Financing
Statement
(and 1
amendment)    34590242 
 34941059    Personal property
 
               
Main Line
Personnel
Services, Inc.
  CIT Technology Financing Services, Inc.   Financing
Statement    20220007868    Equipment lease
 
               
Main Line
Personnel
Services, Inc.
  Citicorp Vendor Finance, Inc.   Financing
Statement    20040080356    Equipment lease
 
               
Main Line
Personnel
Services, Inc.(1)
  General Electric
Capital Corporation   Financing
Statement    2006011902869    Accounts receivable
 
               
Southeastern
Georgia HR, Inc.
  Wells Fargo Business Credit, Inc.   Financing
Statement    060-2004-006974    Personal property
 
               
Southeastern
Personnel
Management, Inc.
  Wells Fargo Business Credit, Inc.   Financing
Statement    200202990026    Personal property
 
               
Southeastern
Staffing, Inc.
  Wells Fargo Business Credit, Inc.   Financing
Statement    200200554253    Equipment lease
 
               
Southeastern
Staffing, Inc.
  Greatamerica Leasing
Corporation   Financing
Statement    200202295468    Equipment lease

 

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                  Debtor   Secured Party   Type   File #   Collateral
Southeastern
Staffing, Inc.
  Eplus Group, Inc.   Financing
Statement    200304038731    Equipment lease
 
               
Southeastern
Staffing, Inc.
  Irwin Business
Finance
Corporation   Financing
Statement    200304744067    Equipment lease
 
               
Southeastern
Staffing, Inc.
  Irwin Business
Finance
Corporation   Financing
Statement    200305356982    Equipment lease
 
               
Southeastern
Staffing, Inc.
  Greatamerica Leasing
Corporation   Financing
Statement    20040722922X    Equipment lease
 
               
Southeastern
Staffing, Inc.
  Credential Leasing Corp of Florida, Inc.   Financing
Statement    200509981737    Equipment lease
 
               
Southeastern
Staffing, Inc.
  Inter-Tel Leasing   Financing
Statement    200601654402    Equipment lease
 
               
Temporary
Placement Service, Inc.
  US Bancorp   Financing
Statement    007-2005-018588    Equipment lease
 
               
Temporary
Placement Service,
Inc.
  Wells Fargo Business Credit, Inc.   Financing
Statement
(and 4
amendments)    060-2001-018586 
 060-2002-002811 
 060-2002-004508 
 060-2002-012053 
 060-2004-006845     Personal property

 

(1)   See Section 4(v) in the Notes SPA.

 

--------------------------------------------------------------------------------

 

Schedule 3(o)(i)
Permitted Indebtedness
Senior Indebtedness
Permitted Liens to secure Senior Indebtedness
Permitted Liens securing the Company’s obligations under the Notes
We have capitalized lease obligations for office furniture and equipment in the
aggregate amount of $135,546 as of January 1, 2006. We also have other leases
that would qualify as capitalized leases, for example copier leases, but we
account for them as operating leases because of the immateriality of such
leases.

 

--------------------------------------------------------------------------------

 

Schedule 3(v)
Subsidiary Rights
Senior Indebtedness restricts, but does not preclude altogether, payment of
dividends by the Company and its subsidiaries.

 

--------------------------------------------------------------------------------

 

Schedule 3(w)
Tax Status
The Company and two of its subsidiaries, Southeastern Staffing, Inc. (including
all of Southeastern Staffing, Inc.’s subsidiaries) and Southeastern Personnel
Management, Inc., have a tax sharing agreement. Southeastern Staffing, Inc.
(including all of its subsidiaries) and Southeastern Personnel Management file a
consolidated tax return with the Company, and the income tax provision
(benefit) is allocated based on the separate return method.

 

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Schedule 3(y)(i) to Preferred Stock Securities Purchase Agreement and
     Common Stock Securities Purchase Agreement — Required Repayments
Schedule 3(aa)(i) to Notes Securities Purchase Agreements — Required Repayments

                              Sub Debt                   Principal     Cash    
        Invested     Distribution     # of Shares ($5.00)  
Parties to the Note Purchase Agreement, Dated March 13, 1998, as amended:
                       
Seacoast Capital
  $ 4,300,000.00     $ 4,184,998.64       23,000.272  
Pacific Mezzanine
    2,866,000.00       2,789,350.26       15,329.949  
Stratford Capital
    4,050,000.00       3,941,684.77       21,663.047  
Rocky Mountain Capital
    2,750,000.00       2,676,452.62       14,709.476  
 
                 
Subtotal
  $ 13,966,000.00     $ 13,592,486.28       74,702.744  
 
                       
Party to the Promissory Note dated November 15, 2001:
                       
KRG Colorado, LLC
    1,500,000.00     $ 1,459,883.25       8,023.351  
 
                       
Parties to the Subordinated Promissory Note Agreement, Dated July 29, 1988:
                       
George Conley
    457,965.06     $ 445,717.01       2,449.610  
Greg Bachrach
    25,944.36       25,250.49       138.774  
 
                   
Subtotal
  $ 483,909.42     $ 470,967.50       2,588.384  
 
                       
Total
  $ 15,949,909.42     $ 15,523,337.03       85,314.479  

 

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Schedule 3(y)(ii) to Prefered Stock Securities Purchase Agreement and
     Common Stock Securities Purchase Agreement — Management Payments
Schedule 3(aa)(ii) to Notes Securities Purchase Agreement — Management Payments
GES
Restricted Stock Plan Distributions

                                      Distributed at Close of Reverse Merger    
Restricted Stock   Cash         Allocated Shares   Consideration   # of Shares
($5.00)
Investor Payouts
                       
Howard Brill
    716,432.04     $ 3,993,817.33       723,538.15  
Robert Pennington
    240,968.95       1,343,304.02       243,359.06  
Robert Larkin
    207,530.79       1,156,899.83       209,589.24  
Lee Elkinson
    51,768.67       288,589.28       52,282.15  
Kenneth Michaels
    149,838.40       835,288.20       151,324.61  
Terry Koch
    121,090.50       675,030.36       122,291.57  
Clinton Burgess
    82,108.83       457,723.38       82,923.25  
Gregory D’Ambrosio
    77,830.58       433,873.85       78,602.56  
Fred Viarrial
    68,081.52       379,526.80       68,756.80  
Daniel Hollenbach
    48,285.15       269,170.08       48,764.08  
Thomas Kennedy
    20,000.00       111,491.87       20,198.38  
Michael Lazrus
    18,354.05       102,316.35       18,536.10  
Derek Golenski
    11,810.54       65,838.99       11,927.69  
John Zaleski
    11,810.54       65,838.99       11,927.69  
Michael Sizemore
    11,250.00       62,714.18       11,361.59  
John Rudakas
    10,938.00       60,974.90       11,046.49  
Stephen Wallach
    10,000.00       55,745.94       10,099.19  
Craig Kasper
    6,613.91       36,869.83       6,679.51  
Sharvani Srinivas
    6,000.00       33,447.56       6,059.51  
Sarah Bullard
    5,886.00       32,812.06       5,944.38  
William Nagel
    5,463.00       30,454.01       5,517.19  
Bill Kilgour
    5,000.00       27,872.97       5,049.59  
Wendell Ellis
    4,750.00       26,479.32       4,797.11  
Barbara Stocks
    4,724.22       26,335.59       4,771.08  
Kimberly LePre
    4,724.22       26,335.59       4,771.08  
Zachary Schnell
    4,724.22       26,335.59       4,771.08  
Deborah Reynolds
    3,779.37       40,152.78       —  
Norma Nunez
    3,779.37       40,152.78       —  
W. Newmaster
    3,560.00       37,822.11       —  
Susan Primrose
    3,401.44       36,137.50       —  
Ralph Moseley
    3,115.00       33,094.35       —  
Srinivas Manepalli
    2,912.00       30,937.63       —  
Ashley Notthoff
    2,834.53       30,114.59       —  
Denyse Robinson
    2,834.53       30,114.59       —  
Susan Brewster
    2,834.53       30,114.59       —  
Monty Shapiro
    2,694.00       28,621.56       —  
Lisa Stanford
    2,362.11       25,095.49       —  
Arnold Tomasello
    2,301.00       24,446.26       —  
Michael DeVlieger
    1,987.00       21,110.27       —  
Douglas Graham
    2,362.11       25,095.49       —  
Elizabeth Matson
    1,889.69       20,076.39       —  
Jennifer Wolochow
    2,087.42       22,177.11       —  
Joel Caballero
    1,889.69       20,076.39       —  
Russell Abramson
    2,362.11       25,095.49       —  
Daniel Gallagher
    1,742.00       18,507.33       —  
Boyd Kelly
    1,655.00       17,583.04       —  
Kevin McCarthy
    1,655.00       17,583.04       —  
Ivette Alon-Kaptzan
    1,526.00       16,212.51       —  
Belia Duke
    750.00       7,968.14       —  
Catherine Byars
    1,417.27       15,057.29       —  
Diane Green
    1,417.27       15,057.29       —  
Rhonda Davis
    1,417.27       15,057.29       —  
Rhonda Wright
    1,417.27       15,057.29       —  
Susan Hudson
    1,417.27       15,057.29       —  
Marilyn Davie
    1,100.00       11,686.61       —  
Patrick Keenan
    1,079.00       11,463.50       —  
Edward Berry
    1,019.00       10,826.05       —  
Rosalie Saraco
    1,012.00       10,751.68       —  
David Lobato
    1,000.00       10,624.19       —  
Stephanie Buongiorno
    966.00       10,262.97       —  
April Loudermilk
    944.84       10,038.19       —  
Jeff Goffinet
    472.42       5,019.10       —  
Jodi Gomberg
    944.84       10,038.19       —  
Lauri Cook
    944.84       10,038.19       —  
Mary Dasher
    944.84       10,038.19       —  
Phil Preston
    283.45       3,011.46       —  
Pollette Jenkins
    944.84       10,038.19       —  
Julie Heath
    615.00       6,533.88       —  
Shashi Sethi
    600.00       6,374.51       —  
Charles LaBenski
    552.00       5,864.55       —  
George Lapworth
    548.00       5,822.05       —  
Mattie Anderson
    537.00       5,705.19       —  
Abigayle Dunn
    500.00       5,312.09       —  
Judith Bates
    500.00       5,312.09       —  
Nicholas Mervosh
    500.00       5,312.09       —  
Rajagopal Vedanthachari
    500.00       5,312.09       —  
Veska Tsenkova
    500.00       5,312.09       —  
Debbie Underkoffler
    944.84       10,038.19       —  
Gavin Meacham
    472.42       5,019.10       —  
Hans Van Ravensberg
    472.42       5,019.10       —  
Kevin Kelly
    472.42       5,019.10       —  
Ron Ellison
    472.42       5,019.10       —  
Tim Dasher
    944.84       10,038.19       —  
Terry Humphrey, Jr.
    448.00       4,759.64       —  
Jai Gulati
    405.00       4,302.80       —  
Ann Thornton
    283.45       3,011.46       —  
Dana Morgan
    283.45       3,011.46       —  
Debra Ponder
    283.45       3,011.46       —  
Joann Johnson
    283.45       3,011.46       —  
Karen Buttram
    283.45       3,011.46       —  
Linda Duckett
    472.42       5,019.10       —  
Phyllis Norman
    283.45       3,011.46       —  
Pilar Holder
    472.42       5,019.10       —  
Shaun Abernathy
    283.45       3,011.46       —  
Wanda McGarity
    283.45       3,011.46       —  
Peggy Sokol
    236.21       2,509.55       —  
Sandy Sanderson
    236.21       2,509.55       —  
Aarthi Krishnaswami
    209.00       2,220.46       —  
Kimberly Warner
    200.00       2,124.84       —  
Pranesh Hanumantha Rao
    168.00       1,784.86       —  

 

--------------------------------------------------------------------------------

 

GES
Restricted Stock Plan Distributions

                                      Distributed at Close of Reverse Merger    
Restricted Stock   Cash         Allocated Shares   Consideration   # of Shares
($5.00)
Investor Payouts
                       
Preethi Krishnaswami
    151.00       1,604.26       —  
Nitin Raut
    109.00       1,158.04       —  
Albert Barbuzza
    100.00       1,062.42       —  
Amy Alderman
    100.00       1,062.42       —  
Catherine Angove
    100.00       1,062.42       —  
Daniel Reid
    100.00       1,062.42       —  
Darryl James
    100.00       1,062.42       —  
Jaganathan Venkatachalam
    100.00       1,062.42       —  
Jalime Vargas
    100.00       1,062.42       —  
Jenny Lazo
    100.00       1,062.42       —  
Jill McCarthy
    100.00       1,062.42       —  
Jo Anne McCann
    100.00       1,062.42       —  
Karol Wiser
    100.00       1,062.42       —  
Kathleen Martinez
    100.00       1,062.42       —  
Keri Kremer
    100.00       1,062.42       —  
Kevin Dodson
    100.00       1,062.42       —  
Lori Peterson
    100.00       1,062.42       —  
Lucille Sheppard
    100.00       1,062.42       —  
Mary Isla
    100.00       1,062.42       —  
Mindy McLeod
    100.00       1,062.42       —  
Nashira Soto
    100.00       1,062.42       —  
Norma Ramos
    100.00       1,062.42       —  
Paul Young
    100.00       1,062.42       —  
Robert Bacharach
    100.00       1,062.42       —  
Ruth Ricchezza
    100.00       1,062.42       —  
Sharon Semple
    100.00       1,062.42       —  
Simmonette Roxas
    100.00       1,062.42       —  
Susan Barr
    100.00       1,062.42       —  
Teresa Clark
    100.00       1,062.42       —  
Angela Butler
    73.00       775.57       —  
Gail Blanco
    73.00       775.57       —  
Eileen Wagner
    59.00       626.83       —  
Jamie Burton
    59.00       626.83       —  
Padmini Vijayan
    48.00       509.96       —  
Patricia Shanks
    48.00       509.96       —  
Sofia Trbovic
    45.00       478.09       —  
Anand Bhat
    42.00       446.22       —  
Kevin Licciardello
    42.00       446.22       —  
Catherine Taber
    36.00       382.47       —  
Tom Shaginaw
    472.42       5,019.10       —  
Lauren Korchinski
    283.45       3,011.46       —  
MaryKate Berry
    94.48       1,003.82       —  
Jennier Lester
    94.48       1,003.82       —  
Casey Chism
    283.45       3,011.46       —  
 
                                     
 
    2,000,000.00     $ 11,623,929.27       1,924,889.11