Exhibit
2.4





EXECUTION
COPY





AGREEMENT
AND PLAN OF MERGER





BY AND
AMONG





CORPORATE
RESOURCE SERVICES, INC.,





DIAMOND
STAFFING SERVICES, INC.,





TS
STAFFING CORP.





TRI-DIAMOND
STAFFING INC.





AND





DIAMOND
STAFFING, INC.





Dated as
of January 10, 2011








TABLE OF CONTENTS




PageARTICLE
      I DEFINITIONS
                                                      
                                                      11.1
                                                      
                                                      Definitions
                                                      
                                                      1ARTICLE
      II THE MERGER
                                                      
                                                      82.1
                                                      
                                                      Merger
                                                      
                                                      82.2
                                                      
                                                      Effective
      Time of the Merger
                                                      
                                                      82.3
                                                      
                                                      Closing
                                                      
                                                      82.4
                                                      
                                                      Certificate
      of Incorporation and Bylaws of the Surviving Corporation
                                                      
                                                      82.5
                                                      
                                                      Directors
      and Officers of the Surviving Corporation
                                                      
                                                      8ARTICLE
      III ISSUANCE OF SHARES
                                                      
                                                      93.1
                                                      
                                                      Conversion
      of Shares
                                                      
                                                      93.2
                                                      
                                                      Exchange
      of Certificates
                                                      
                                                      93.3
                                                      
                                                      Purchase
      Price Adjustment
                                                      
                                                      10ARTICLE
      IV REPRESENTATIONS AND WARRANTIES OF PARENT AND THE COMPANY
                                                      
                                                      114.1
                                                      
                                                      Organization
      and Standing of Parent and the Company
                                                      
                                                      114.2
                                                      
                                                      Authorization;
      Enforceability
                                                      
                                                      114.3
                                                      
                                                      Ownership;
      Subsidiaries
                                                      
                                                      114.4
                                                      
                                                      Noncontravention
      of Contemplated Transactions; Consents and Government
      Approvals
                                                      
                                                      124.5
                                                      
                                                      Financial
      Information; Books and Records
                                                      
                                                      134.6
                                                      
                                                      Undisclosed
      Liabilities and Obligations
                                                      
                                                      134.7
                                                      
                                                      No
      Changes
                                                      
                                                      134.8
                                                      
                                                      Title
      to Properties
                                                      
                                                      144.9
                                                      
                                                      Real
      Estate
                                                      
                                                      144.10
                                                      
                                                      Environmental
                                                      
                                                      154.11
                                                      
                                                      Contracts
      and Commitments
                                                      
                                                      154.12
                                                      
                                                      Patents,
      Trademarks, Copyrights and Domains
                                                      
                                                      154.13
                                                      
                                                      Pending
      Litigation, Proceedings or Investigations
                                                      
                                                      164.14
                                                      
                                                      Absence
      of Restrictions; Compliance with Laws; Permits
                                                      
                                                      164.15
                                                      
                                                      No
      brokers
                                                      
                                                      164.16
                                                      
                                                      Customers
                                                      
                                                      164.17
                                                      
                                                      Tax
      Matters
                                                      
                                                      174.18
                                                      
                                                      Employee
      Matters
                                                      
                                                      174.19
                                                      
                                                      Employee
      Benefit Plans
                                                      
                                                      184.20
                                                      
                                                      Insurance
                                                      
                                                      184.21
                                                      
                                                      Related
      Party Transactions
                                                      
                                                      184.22
                                                      
                                                      Bank
      Accounts
                                                      
                                                      184.23
                                                      
                                                      Privacy
      and Security
                                                      
                                                      19


1





ARTICLE
      V REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER
    SUBSIDIARY
                                                                    
                                                                    195.1
                                                                    
                                                                    Organization
      and Standing of Purchaser and Merger Subsidiary
                                                                    
                                                                    195.2
                                                                    
                                                                    Authorization
                                                                    
                                                                    205.3
                                                                    
                                                                    Noncontravention
      of Contemplated Transactions; Consents and Government
      Approvals
                                                                    
                                                                    205.4
                                                                    
                                                                    Litigation
                                                                    
                                                                    205.5
                                                                    
                                                                    Authorized
      Shares
                                                                    
                                                                    20ARTICLE
      VI COVENANTS
                                                                    
                                                                    206.1
                                                                    
                                                                    Public
      Announcements
                                                                    
                                                                    206.2
                                                                    
                                                                    Consents
                                                                    
                                                                    216.3
                                                                    
                                                                    Conduct
      of Business
                                                                    
                                                                    216.4
                                                                    
                                                                    Employee
      Benefits
                                                                    
                                                                    226.5
                                                                    
                                                                    Directors’
      and Officers’ Insurance and Indemnification
                                                                    
                                                                    226.6
                                                                    
                                                                    Tax
      Matters
                                                                    
                                                                    236.7
                                                                    
                                                                    Further
      Assurances
                                                                    
                                                                    236.8
                                                                    
                                                                    Plan
      of Reorganization
                                                                    
                                                                    246.9
                                                                    
                                                                    Further
      Actions
                                                                    
                                                                    246.10
                                                                    
                                                                    Tax
      Refunds
                                                                    
                                                                    246.11
                                                                    
                                                                    Company
      Dividend
                                                                    
                                                                    24ARTICLE
      VII CLOSING DELIVERIES AND CONDITIONS
                                                                    
                                                                    247.1
                                                                    
                                                                    Parent
      and Company Conditions to Closing
                                                                    
                                                                    247.2
                                                                    
                                                                    Purchaser
      and Merger Subsidiary Conditions to Closing
                                                                    
                                                                    25ARTICLE
      VIII INDEMNIFICATION
                                                                    
                                                                    278.1
                                                                    
                                                                    Parent’s
      Indemnification
                                                                    
                                                                    278.2
                                                                    
                                                                    Purchaser’s
      Indemnification
                                                                    
                                                                    288.3
                                                                    
                                                                    Procedure
                                                                    
                                                                    288.4
                                                                    
                                                                    Defense
      by Indemnified Party
                                                                    
                                                                    298.5
                                                                    
                                                                    Defense
      by Indemnifying Party
                                                                    
                                                                    298.6
                                                                    
                                                                    Non-Third-Party
      Claims
                                                                    
                                                                    308.7
                                                                    
                                                                    Payments
                                                                    
                                                                    308.8
                                                                    
                                                                    Limitations
      on Recoverable Losses
                                                                    
                                                                    308.9
                                                                    
                                                                    No
      Contribution
                                                                    
                                                                    318.10
                                                                    
                                                                    Purchase
      Price Adjustment
                                                                    
                                                                    31ARTICLE
      IX TERMINATION
                                                                    
                                                                    319.1
                                                                    
                                                                    Termination
      of Agreement
                                                                    
                                                                    319.2
                                                                    
                                                                    Procedure
      Upon Termination
                                                                    
                                                                    329.3
                                                                    
                                                                    Effect
      of Termination
                                                                    
                                                                    32ARTICLE
      X GENERAL
                                                                    
                                                                    3210.1
                                                                    
                                                                    Usage
                                                                    
                                                                    3210.2
                                                                    
                                                                    Survival
                                                                    
                                                                    3310.3
                                                                    
                                                                    Costs
      and Expenses
                                                                    
                                                                    33


2





10.4
                  
                  Governing
      Law
                  
                  3310.5
                  
                  Consent
      to Jurisdiction
                  
                  3310.6
                  
                  Successors
      and Assigns
                  
                  3310.7
                  
                  Notices
                  
                  3410.8
                  
                  Severability
                  
                  3410.9
                  
                  Representation
      by Counsel; No Inferences
                  
                  3510.10
                  
                  Divisions
      and Headings
                  
                  3510.11
                  
                  No
      Third-party Beneficiaries
                  
                  3510.12
                  
                  Amendment
      and Waiver
                  
                  3510.13
                  
                  Knowledge
                  
                  3510.14
                  
                  Schedules
                  
                  3510.15
                  
                  Counterparts
                  
                  3610.16
                  
                  Entire
      Agreement
                  
                  36


3




AGREEMENT
AND PLAN OF MERGER




THIS
AGREEMENT AND PLAN OF MERGER (this “Agreement”) dated as
of January 10, 2011, is made among TS STAFFING CORP., a Florida corporation
(“Parent”),
TRI-DIAMOND STAFFING INC., a Florida corporation and a wholly owned subsidiary
of Parent (the “Company”), DIAMOND
STAFFING, INC., a Massachusetts corporation and wholly owned subsidiary of the
Company (“Diamond
Staffing”), CORPORATE RESOURCE SERVICES, INC., a Delaware corporation
(“Purchaser”),
and DIAMOND STAFFING SERVICES, INC., a Delaware corporation and wholly owned
subsidiary of Purchaser (“Merger
Subsidiary”).




WITNESSETH:




WHEREAS,
a special committee of the Board of Directors of Purchaser has (a) determined
that the merger provided for herein, in which the Company will merge with and
into Merger Subsidiary, with Merger Subsidiary surviving (the “Merger”) is fair to
and in the best interests of Purchaser, the sole stockholder of Merger
Subsidiary, (b) approved this Agreement and the transactions contemplated
hereby; and (c) recommended that the full Board of Directors of Purchaser
approve and adopt this Agreement and the Merger, on the terms set forth
herein;




WHEREAS,
the respective Boards of Directors of Purchaser and Merger Subsidiary have
approved this Agreement and the Merger and deem it advisable and in the best
interests of their respective stockholders to consummate the Merger, on the
terms set forth herein;




WHEREAS,
the respective Boards of Directors of Parent and the Company have approved this
Agreement and the Merger and deem it advisable and in the best interests of
their respective stockholders to consummate the Merger, on the terms set forth
herein;




WHEREAS,
each of Parent, in its capacity as the sole stockholder of the Company, and
Purchaser, in its capacity as the sole stockholder of Merger Subsidiary, have
approved this Agreement and the Merger;




WHEREAS,
it is the intention of the parties to this Agreement that the Merger provided
for herein be treated as a “reorganization” under Section 368(a) of the Internal
Revenue Code of 1986, as amended (the “Code”).




NOW,
THEREFORE, in consideration of the foregoing, the representations, warranties
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:




ARTICLE
I




DEFINITIONS




1.1           Definitions .  When
used in this Agreement, the following terms shall have the meanings assigned to
them in this Section
1.1.  Unless otherwise specified in this Section 1.1, each
reference to Company shall mean Company and Diamond Staffing.


1


“Adverse Claims” means
any Liabilities, Liens, rights of others and any other burdens and restrictions
whatsoever.




“Affiliate” means, as
to the person in question, any person and/or entity which controls, is
controlled by, or under common control with a Person (within the meaning of the
Securities Act of 1933, as amended).




“Agreement” has the
meaning set forth in the Preamble to this Agreement.




“Benefit Plan” has the
meaning set forth in Section
4.19(a).




“Books and Records”
means all records, documents, lists, electronic records (including all point of
sale data systems), and files, relating to or involving the Business or the
Company, including, but not limited to, organizational documents, stock ledgers,
price lists, lists of accounts, customers (including contact information and
loan and payment history), suppliers and personnel, all product, business and
marketing plans and data, historical sales data and all books, ledgers, files
and business records (including all financial records and books of account) of
or relating to the Business or Company in any of the foregoing cases, whether in
electronic form or otherwise.




“Business” means the
Company’s business of owning and operating a business, which provides temporary
employment services and related support services.




“Business Day” means a
day other than a Saturday, Sunday or other day on which banks located in New
York City are authorized or required by law to close.




“Cap” has the meaning
set forth in Section
8.8.




“Capital Stock” has
the meaning set forth in Section
4.3(a).




“Certificate” has the
meaning set forth in Section
3.2.




“Certificate of
Merger” has the meaning set forth in Section
2.2.




“Claim Notice” has the
meaning set forth in Section
8.3.




“Closing” has the
meaning set forth in Section
2.3.




“Closing Date” has the
meaning set forth in Section
2.3.




“Closing Net Working
Capital” has the meaning set forth in Section
3.3(c).




“COBRA” means
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.




“Code” has the meaning
set forth in the Recitals to this Agreement.


2


“Collected Reserve”
means those amounts collected by the Surviving Corporation from Wells Fargo
pursuant to that certain Account Purchase Agreement dated as of the Closing Date
between the Surviving Corporation and Wells Fargo.




“Common Stock” has the
meaning set forth in Section
3.1.




“Company” has the
meaning set forth in the Preamble to this Agreement.




“Company Factoring
Agreement” means that certain Account Purchase Agreement dated December
23, 2008, as amended, among the Company, as a seller of its accounts, certain
other Affiliates of the Company, and Wells Fargo, as the purchaser of the
Company’s accounts.




“Company Material Adverse
Effect” means any change, effect or event that is or would be reasonably
expected to (a) be materially adverse to the business, assets, results of
operations, financial condition or prospects of the Company, or (b) materially
impair or delay the ability of the Company to perform its obligations under this
Agreement or to consummate the Merger or the transactions contemplated hereby,
other than, in each case, any change, effect or event that results from or
relates to (i) any change affecting general national, international or regional
political, economic, financial or capital market conditions; (ii) any change
relating to the Company’s industry, so long as such change does not
disproportionately affect the Company or its business; (iii) any breach by
Purchaser or Merger Subsidiary of any provision of this Agreement; (iv) any
condition described in the Company’s disclosure schedule; and (v) any action
taken by the Company or any of its Affiliates at the written request of
Purchaser or Merger Subsidiary.




“Consent” means any
consent or approval from any person or entity other than governmental or
regulatory approval.




“Continuing Employee”
has the meaning set forth in Section
6.4(b).




“Contracts” means,
with respect to the Company, all agreements, leases, contracts, purchase orders
and other commitments or arrangements of any kind, whether written or oral,
affecting or relating to the Business of the Company.




“Copyrights” means all
rights of the Company to all copyrights and copyrightable works and any other
works of authorship, whether statutory or common law, registered or
unregistered, together with all registrations, applications and renewals for any
of the foregoing, and all moral rights thereto under the laws of any
jurisdiction, used in or incidental to the conduct of the Company’s Business,
including those set forth on Schedule
4.12.




“Current Financial
Statements” has the meaning set forth in Section
4.5.




“Customer Contracts”
has the meaning set forth in Section
4.4(a).




“DGCL” has the meaning
set forth in Section
2.1.




“Diamond Staffing” has
the meaning set forth in the Preamble to this Agreement.


3


“Diamond Staffing Employment
Agreement” has the meaning set forth in Section
7.2(f).




“Dispute Period” means
the period ending thirty (30) calendar days following the receipt of a Claim
Notice or an Indemnity Notice from an Indemnified Party.




“Dividend Amount” has
the meaning set forth in Section
6.11.




“Effective Time” has
the meaning set forth in Section
2.2.




“Employee Agreements”
has the meaning set forth in Section
4.18(b).




“Employee Benefit
Plans” means, with respect to the Company, (a) all employee benefit
plans, as defined in Section 3(3) of ERISA, and (b) all other deferred
compensation, pension, profit sharing, stock option, stock purchase, savings,
group insurance or retirement plan, and all vacation pay, severance pay,
incentive compensation, consulting, bonus, medical and other employee benefit or
fringe benefit plans or arrangements, maintained by the Company, any ERISA
Affiliate of the Company, and/or any contract provider to the Company
(collectively, the “Plan Sponsors”) for
the benefit of all individuals who are or have been employed by, or who
currently perform or have performed services for, the Company, whether directly
or pursuant to any contractual relationship, within the previous six plan years
or with respect to which contributions are or were (within such six year period)
made or required to be made by the Plan Sponsors or with respect to which the
Plan Sponsors have any liability.




“Employees” means all
of the employees of the Company as of the Closing Date.




“ERISA” means the
Employment Retirement Income Security Act of 1974 and the rules and regulations
promulgated thereunder, as amended.




“ERISA Affiliate” has
the meaning set forth in Section
4.19(a).




“Exchange Act” means
the Securities and Exchange Act of 1934, as amended.




“FBCA” has the meaning
set forth in Section
2.1.




“Financial
Information” has the meaning set forth in Section
4.5.




“Fundamental Representation
Indemnity Cap” has the meaning set forth in Section
8.8.




“Fundamental
Representations” means those representations and warranties of Parent,
Company, Purchaser and/or the Merger Subsidiary, as applicable, set forth in
Sections 4.1, 4.2,
4.3, 4.4, 5.1, 5.2 and 5.3.




“GAAP” means United
States generally accepted accounting principles and practices as in effect from
time to time.




“Governmental Entity”
means any government or any agency, bureau, board, directorate, commission,
court, department, official, political subdivision, tribunal or other
instrumentality of federal, state or local government, with jurisdiction over
the business of the Company.


4


“Indebtedness” means
(a) all obligations (including the principal amount thereof or, if applicable,
the accreted amount thereof and the amount of accrued and unpaid interest
thereon) of the Company, whether or not represented by bonds, debentures, notes
or other securities (whether or not convertible into any other security), for
the repayment of money borrowed, whether owing to banks, financial institutions,
on equipment leases or otherwise; (b) all deferred indebtedness of the Company
for the payment for the purchase price of property or assets purchased (other
than current accounts payable incurred in the ordinary course of business); (c)
all obligations of the Company to pay rent or other payment amounts under a
lease which is required to be classified as a capital lease or a liability on
the face of a balance sheet prepared in accordance with GAAP; (d) all
outstanding reimbursement obligations of the Company with respect to letters of
credit, bankers’ acceptances or similar facilities issued for the account of the
Company; (e) all obligations of the Company under any interest rate swap
agreement, forward rate agreement, interest rate cap or collar agreement or
other financial agreement or arrangement entered into for the purpose of
limiting or managing interest rate risks; (f) all obligations secured by any
Lien existing on property owned by the Company, whether or not indebtedness
secured thereby will have been assumed; (g) all guaranties, endorsements,
assumptions and other contingent obligations of the Company in respect of, or to
purchase or to otherwise acquire Indebtedness of others; (h) all premiums,
penalties, fees, expenses, breakage costs and change of control payments
required to be paid or offered in respect of any of the foregoing on prepayment
(regardless if any of such are actually paid), as a result of the consummation
of the Transactions or in connection with any lender Consent; and (i) all
obligations of the Company, whether interest bearing or otherwise, owed to any
securityholder or any securityholder’s Affiliates.




“Indemnified Officers and
Directors” has the meaning set forth in Section
6.5(b).




“Indemnified Party”
has the meaning set forth in Section
8.3.




“Indemnifying Party”
has the meaning set forth in Section
8.3.




“Indemnity Notice”
means written notification pursuant to Section 8.6 of a
claim not involving a Third-Party Claim as to which indemnity pursuant to
Article VIII is sought by an Indemnified Party, specifying the nature and basis
for the Indemnified Party’s claim against the Indemnifying Party under Article
VIII, together with the amount or, if then not reasonably ascertainable, the
estimated amount, determined in good faith, of the Indemnified Party’s Losses in
respect of such claim.




“Leased Real Property”
has the meaning set forth in Section
4.9(a).




“Legal Proceeding” has
the meaning set forth in Schedule
4.13.




“Liabilities” means
all obligations and liabilities of any kind or nature, whether fixed or unfixed,
known or unknown, asserted or unasserted, choate or inchoate, liquidated or
unliquidated, secured or unsecured.




“Lien” means any
mortgage, deed of trust, lien, claim, pledge, charge, equitable interest,
right-of-way, easement, encroachment, security interest, preemptive right, right
of first refusal or similar restriction or right, option, judgment, title defect
or encumbrance of any kind.


5


“Location” or “Locations” means the
locations set forth on Schedule 4.3(d),
where Business is located and operated from.




“Loss” or “Losses” has the
meaning set forth in Section
8.1.




“Merger” has the
meaning set forth in the Recitals to this Agreement.




“Merger Consideration”
has the meaning set forth in Section
3.1.




“Merger Subsidiary”
has the meaning set forth in the Preamble to this Agreement.




“Net Income Statement”
has the meaning set forth in Section
3.3(a).




“Net Working Capital”
has the meaning set forth in Section
3.3(c).




“Net Working Capital
Benchmark” has the meaning set forth in Section
3.3(c).




“Order” means any
order, writ, injunction, judgment, decree or other determination of any court or
arbitrator or any governmental or regulatory authority, whether preliminary or
final.




“Parent” has the
meaning set forth in the Preamble to this Agreement.




“Parent Indemnitees”
has the meaning set forth in Section
8.2.




“Payoff Letter” means
that certain Payoff Letter issued to the Company, Parent and Merger Subsidiary
by Wells Fargo dated as of the date hereof.




“Permitted Liens”
means (a) any Lien described on Schedule 4.8; (b) any
Lien imposed by law for Taxes, assessments or governmental changes that are not
yet due and payable or that are being contested in good faith by appropriate
proceedings if an adequate reserve for such Liens shall have been made therefor
in the Current Financial Statements; or (c) any carrier’s, warehousemen’s,
mechanic’s, materialmen’s, repairmen’s or other like Lien imposed by law,
arising in the ordinary course of business and securing obligations that are not
overdue or are being contested in good faith by appropriate proceedings if an
adequate reserve for such Liens shall have been made therefor in the Current
Financial Statements.




“Permits and Licenses”
means, with respect to the Company, all governmental or regulatory franchises,
permits, licenses, submissions and approvals necessary for the lawful operation
of the Company’s Business and Locations.




“Person” means any
association, corporation, limited liability company, individual, partnership,
limited liability partnership, firm, trust or any other entity or organization,
including a Governmental Entity.




“Purchaser” has the
meaning set forth in the Preamble to this Agreement.




“Purchaser
Indemnitees” has the meaning set forth in Section
8.1.




“Reconciliation
Period” has the meaning set forth in Section
3.3(a).


6


“Regulatory Approval”
means any consent, approval, authorization, filing, registration or
qualification with any governmental or regulatory authority.




“Requirement of Law”
means any federal, state or local laws, statutes, ordinances, rules, regulations
or governmental or regulatory pronouncements having the effect of law, including
all such laws, statutes, ordinances, rules and regulations related to the
operation of the Business.




“Software” means all
computers, computer software, and other hardware or software owned or licensed
by the Company including data, databases and documentation, Internet websites
and the content thereof, including those set forth on Schedule
4.12.




“Surviving
Corporation” has the meaning set forth in Section
2.1.




“Tax” or “Taxes” means all
taxes including income, gross receipts, franchise, payroll, employment, social
security, unemployment, sales, use and other taxes and penalties and interest
with respect thereto.




“Tax Representation Indemnity
Cap” has the meaning set forth in Section
8.8.




“Tax Returns” means
any federal, state and local return, report and other submissions required to be
filed in connection with the calculation of any Taxes.




“Third-Party Claim”
has the meaning set forth in Section
8.3.




“Trademarks” means all
rights of the Company to all trademarks, service marks, trade names, trade
dress, fictitious names, internet domain names, uniform resource locators
(URLs), and any other names and locators used in or incidental to the conduct of
the Company’s Business, including those listed on Schedule 4.12, and
any related names and derivations thereof, and the interest, whether owned or
licensed and whether registered or unregistered and whether or not currently in
use, together with all registrations, applications and renewals for any of the
foregoing, including those set forth on Schedule 4.12(which
shall include the dates of first use).




“Transaction
Documents” shall mean this Agreement and all other agreements,
certificates, instruments and documents that are executed and delivered by
Parent, the Company, Purchaser or Merger Subsidiary to effectuate the
transactions contemplated by this Agreement.




“Transactions” means
the transactions contemplated by this Agreement.




“Unexpired Leases”
means all leasehold interests of the Company in the unexpired leases of real
property  relating to the Locations.




“Vaccaro” has the
meaning set forth in Section
7.2(d).




“Vaccaro Employment
Agreement” has the meaning set forth in Section
7.2(d).




“Vaccaro Severance
Agreement” has the meaning set forth in Section
7.2(e).




“Wells Fargo” means
Wells Fargo Bank, National Association.


7


ARTICLE
II




THE
MERGER




2.1        Merger .  Subject
to the terms and conditions set forth in this Agreement, and in accordance with
the Delaware General Corporation Law (“DGCL”) and the
Florida Business Corporation Act (“FBCA”), at the
Effective Time (as defined in Section 2.2), the
Company shall be merged with and into Merger Subsidiary.  Following
the Merger, the separate corporate existence of the Company shall cease and
Merger Subsidiary shall continue as the surviving corporation and a wholly owned
subsidiary of Purchaser (Merger Subsidiary following the Merger, the “Surviving
Corporation”).  At the Effective Time, the Merger will have the
effect as set forth in this Agreement and other effects provided in the
applicable provisions of the DGCL and the FBCA.  Without limiting the
generality of the foregoing and subject thereto, at the Effective Time, all the
property, rights, privileges, powers, immunities and franchises of the Company
and Merger Subsidiary will vest in the Surviving Corporation, and all the debts,
liabilities, obligations and duties of the Company and Merger Subsidiary will
become the debts, liabilities, obligations and duties of the Surviving
Corporation.




2.2        Effective Time of the
Merger .  Subject
to the provisions of this Agreement, on or prior to the Closing Date (as defined
in Section
2.3), the Company and Merger Subsidiary will cause an appropriate
certificate or articles of merger (as applicable) to be executed and filed with
(a) the Secretary of State of the State of Delaware in such form as required by,
and executed in accordance with the relevant provisions of, DGCL § 252 and (b)
the Secretary of the State of the State of Florida in such form as required by,
and executed in accordance with the relevant provisions of FBCA § 607.1105 and §
607.1107 (collectively, the “Certificate of
Merger”).  The Merger shall become effective on the date and at
the time when the Certificate of Merger has been duly filed with the Secretary
of State of the State of Delaware and the Secretary of the State of the State of
Florida or, subject to the DGCL and the FBCA, such later time as is agreed upon
by the parties hereto and specified in the Certificate of Merger (such effective
time, the “Effective
Time”).




2.3        Closing .  Subject
to the delivery of the items set forth in Article VII, the consummation of the
Merger (the “Closing”) shall take
place on a date specified by Purchaser and Parent (the “Closing Date”) at the
offices of Bryan Cave LLP, 1290 Avenue of the Americas, New York, New York
10104.




2.4        Certificate of Incorporation
and Bylaws of the Surviving Corporation .  The
certificate of incorporation of the Merger Subsidiary as in effect immediately
prior to the Effective Time shall be the certificate of incorporation of the
Surviving Corporation.  The bylaws of the Merger Subsidiary as in
effect immediately prior to the Effective Time shall be the bylaws of the
Surviving Corporation.




2.5        Directors and Officers of
the Surviving Corporation .  The
directors of Merger Subsidiary immediately prior to the Effective Time shall,
from and after the Effective Time, be the directors of the Surviving Corporation
until their successors shall have been duly elected or appointed and qualified
or until their earlier death, resignation or removal in accordance with the
Surviving Corporation’s certificate of incorporation and bylaws or as otherwise
provided by law.  The officers of Merger Subsidiary immediately prior
to the Effective Time shall, from and after the Effective Time, be the officers
of the Surviving Corporation until their respective successors are chosen and
have qualified in accordance with the certificate of incorporation and bylaws of
the Surviving Corporation or as otherwise provided by law.


8


ARTICLE
III




ISSUANCE
OF SHARES




3.1        Conversion of
Shares .  At
the Effective Time, by virtue of the Merger and without any action on the part
of Purchaser, Merger Subsidiary, Parent or the Company:




(a)        each
share of the Company’s common stock, no par value (the “Common Stock”), held
in the Company’s treasury or owned by the Company or any direct or indirect
wholly-owned subsidiary of the Company immediately prior to the Effective Time,
if any, shall be extinguished and cancelled without payment of any consideration
with respect thereto; and




(b)        100%
of the Company’s Common Stock, issued and outstanding immediately prior to the
Effective Time, shall be converted into and represent the right to receive,
payable upon surrender of the certificate or certificates held by Parent which,
immediately prior to the Effective Time, represented 100% of the issued and
outstanding shares of Common Stock, 29,411,765 shares of common stock of
Purchaser, par value $0.0001 per share (the “Merger
Consideration”), payable to Parent as the sole holder of the Common
Stock.  The Merger Consideration was determined based on a purchase
price of twenty-five million dollars ($25,000,000) and a price per share of
common stock of Purchaser of eighty-four cents ($0.85).  All such
Common Stock, when so converted, shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and Parent, as
the holder of a certificate or certificates previously evidencing such shares of
Common Stock outstanding immediately prior to the Effective Time shall cease to
have any rights with respect thereto, except the right to receive the Merger
Consideration for 100% of the Common Stock upon the surrender of such
certificate or certificates in accordance with Section
3.2.  Shares of common stock of Purchaser issued as part of the
Merger Consideration will not be registered under the Securities Act of 1933, as
amended.




3.2        Exchange of
Certificates .  Immediately
prior to the Effective Time, Purchaser shall deposit or cause to be deposited
with Manhattan Transfer Registrar Company, the Purchaser’s transfer agent, for
the benefit of Parent, a number of shares equal to the Merger Consideration
payable pursuant to this Article III.  Promptly after the Effective
Time, upon surrender to Purchaser of a certificate or certificates that
immediately prior to the Effective Time evidenced 100% of the outstanding shares
of Common Stock (collectively, the “Certificate”) by
Parent, Parent shall be entitled to receive in exchange therefor the Merger
Consideration, and the Certificate so surrendered shall forthwith be
canceled.  The Merger Consideration will be delivered to Parent by the
Manhattan Transfer Registrar Company as promptly as practicable following
surrender of the Certificate.


9


3.3        Purchase Price
Adjustment .




(a)        Within
three Business Days of the end of the calendar month in which the Closing takes
place, Parent shall deliver to the Surviving Company a statement (the “Net Income
Statement”), together with appropriate supporting evidence, showing the
net income, if any, computed in accordance with GAAP and consistent with past
practice, of the Company from the period beginning January 1, 2011 through the
Effective Time (the “Reconciliation
Period”).  In the event that there is positive net income
during the Reconciliation Period, Parent shall, at the time of delivery of the
Net Income Statement, also remit to the Surviving Company by wire transfer in
immediately available funds, an amount equal to any such positive net
income.




(b)        The
Surviving Company shall have five Business Days from the date of delivery of the
Net Income Statement to accept or reject the amount of net income set forth
therein.  If no objection is raised within such five Business Day
Period, the amount shall have been deemed accepted by the Surviving
Company.  If the Surviving Company notifies the Parent in writing
within such five Business Day Period that it disputes the amount of net income
set forth in the Net Income Statement, then the parties shall work in good faith
to promptly resolve such dispute.




(c)        The
parties hereto agree that the net working capital of the Company, computed in
accordance with GAAP (the “Net Working Capital”)
at and as of the Effective Time will be an amount not less than $0 (the “Net Working Capital
Benchmark”).  Within three Business Days following the end of
the calendar month in which the Closing takes place, Purchaser will, or will
cause the Surviving Company to, calculate the Net Working Capital of the Company
as of the Effective Time (the “Closing Net Working
Capital”).  Purchaser shall deliver to Parent a written
calculation of Net Working Capital (the “Working Capital
Calculation”), together with appropriate supporting evidence, computed in
accordance with GAAP and consistent with past practice of the
Company.  If the Closing Net Working Capital is less than the Net
Working Capital Benchmark, then the Parent shall promptly remit to Purchaser an
amount equal to the amount of such deficit.




(d)        The
Parent shall have five Business Days from the date of delivery of the Working
Capital Calculation to accept or reject the amount of Net Working Capital
calculated therein.  If no objection is raised within such five
Business Day period, the amount shall have been deemed accepted by the
Parent.  If the Parent notifies the Purchaser in writing within such
five Business Day period that it disputes the amount of Net Working Capital in
the Working Capital Calculation, then the parties shall work in good faith to
promptly resolve such dispute.


10


ARTICLE
IV




REPRESENTATIONS
AND WARRANTIES OF PARENT AND THE COMPANY




Parent,
Company, and Diamond Staffing jointly and severally, represent and warrant to
Purchaser and Merger Subsidiary, unless otherwise expressly stated, that the
statements contained in this Article IV are true and correct as of the date
hereof except as set forth herein or in the disclosure schedules separately
delivered by the Parent, Company and Diamond Staffing to Purchaser and Merger
Subsidiary on the date hereof.  All references to the Company in Section 4.3(d) and
Sections 4.4 –
4.23 include
both the Company and Diamond Staffing.




4.1        Organization and
Standingof
Parent and the Company .  Each
of Parent, the Company, and Diamond Staffing (a) is duly formed, validly
existing and in good standing under the laws of its state of organization, (b)
is duly qualified and authorized to do business in each jurisdiction where it
conducts business, owns property or has employees, (c) has the power and is
entitled to carry on its business as now being conducted, (d) is authorized to
enter into and perform this Agreement and the Transaction Documents entered into
or to be entered into and performed by Parent, the Company or Diamond Staffing,
and (e) is authorized to do business in all states for which authorization is
required except where the failure to be so qualified would not effect Parent’s
ability to consummate the Transactions.




4.2        Authorization;
Enforceability .




(a)        This
Agreement, the Transaction Documents delivered or to be delivered by Parent, the
Company, or Diamond Staffing, as applicable, to Purchaser and Merger Subsidiary,
as applicable, and the Transactions have been duly authorized by all action
required to be taken on the part of each of Parent, the Company, and Diamond
Staffing, as applicable.




(b)        Each
of Parent, the Company, and Diamond Staffing has full capacity, power and
authority to execute and deliver this Agreement and the Transaction
Documents.




(c)        This
Agreement and each of the Transaction Documents entered into or to be entered
into and performed by Parent, the Company, and Diamond Staffing, as applicable,
are and shall be legal, valid and binding obligations of Parent, the Company,
and Diamond Staffing, enforceable against each of Parent, the Company, and
Diamond Staffing, as applicable, in accordance with their respective
terms.




4.3        Ownership;
Subsidiaries .




(a)        The
authorized capital stock of the Company (“Capital Stock”)
consists of 1,500 shares of Common Stock at no par value, of which 100 shares of
Common Stock are issued and outstanding.  The Parent is the sole
stockholder of the Company, owning all issued and outstanding shares of Common
Stock, and the Company has no other issued or outstanding shares of Capital
Stock.  All shares of Common Stock are validly issued, fully paid and
nonassessable and were not issued in violation of any preemptive or other
similar rights.


11


(b)        No
shares of Capital Stock are held as treasury stock or are owned by the
Company.  The Company has never declared or paid any dividends on any
shares of Capital Stock.  Except as set forth on Schedule 4.3(b), the
Company does not have any stock options, warrants, calls, preemptive rights,
subscriptions or other rights, arrangements, agreements, understandings or
commitment of any character relating to the Capital Stock of the
Company.




(c)        The
Company owns 452,500 shares of common stock of Diamond Staffing, which
represents all issued and outstanding shares of common stock of Diamond
Staffing. Except as set forth on Schedule 4.3(c), the
Company does not own, directly or indirectly, any debt, equity or other
ownership or financial interest in any other entity other than in Diamond
Staffing as described in the preceding sentence.




(d)        Schedule 4.3(d) sets
forth the Locations. The Company does not operate at any location other than the
Locations.




(e)        There
are no Liens on the Capital Stock other than Liens that will be terminated upon
the consummation of the Transactions, at no cost to Purchaser.




4.4        Noncontravention of
Contemplated Transactions; Consents and Government Approvals .




(a)        Except
as set forth on Schedule 4.4(a), the
execution, delivery and performance of this Agreement and the Transaction
Documents delivered or to be delivered pursuant to this Agreement by the Parent
and the Company, as applicable, and the consummation thereof do not and will not
(i) violate any Requirements of Law applicable to Parent or the Company or any
Order to which Parent or the Company is subject or by which the properties of
Parent or the Company are bound, (ii) conflict with, or result in the breach of,
or constitute (or with or without the passage of time or the giving of notice or
both might constitute) a default under any Permit, License, Unexpired Lease or
material Contract of the Company related to the Business, (iii) result in the
creation of any Adverse Claim upon the Business, or (iv) violate any of Parent’s
or the Company’s articles of incorporation or organization, as applicable,
bylaws or other governing or constituting documents or any other agreement to
which Parent or the Company is subject or by which any of its properties are
bound except, in each such case, where such violation or conflict would not be
reasonably expected to effect Parent’s ability to consummate the
Transactions.  Notwithstanding the foregoing, the Parent, Company and
Diamond Staffing do not make any representations regarding any requirements for
any Person to give notice or obtain consent in connection with the Transactions
to the extent such requirements are set forth in any Contracts between Diamond
Staffing and its customers (the “Customer Contracts”);
provided however, the term “Customer Contracts” shall not be deemed to include
any vendor management Contracts or similar arrangements.




(b)        Except
as set forth on Schedule 4.4(b), no
Consent or Regulatory Approval is required for Parent and the Company to enter
into and perform this Agreement or any of the Transaction Documents to be
executed by Parent or the Company, or in connection with the Parent’s or the
Company’s consummation of the Transactions.


12


4.5        Financial
Information;
Books and Records .




(a)        Attached
to this Agreement as Schedule 4.5 are the
reports and financial documents of the Company (collectively, the “Financial
Information”).  The Financial Information has been prepared in
all material respects in accordance with GAAP (except that the unaudited balance
sheet as of June 30, 2010 and the related unaudited statement of income,
stockholder’s equity and cash flow for the three month period ended June 30,
2010 (the “Current
Financial Statements”) do not contain footnotes) consistently applied
through the periods involved and fairly presents the financial condition and
results of operations of the Company as of and for the period ended the date
thereof.  The Financial Information was prepared from, and properly
reflects, the Books and Records, all of which Books and Records accurately and
fairly reflect, in reasonable scope and detail and in accordance with good
business practice, revenues and expenses, assets and liabilities of the Company
and such other information as contained therein.




(b)        The
books of account and other financial and accounting records of the Company
relating to the Business (other than the Financial Information), all of which
have been made available to Purchaser, are complete and correct in all material
respects.  The Books and Records are true, correct, and complete in
all material respects.  At the Closing, all of the Books and Records
will be in possession of Purchaser.




4.6        Undisclosed Liabilities and
Obligations .  The
Company has no Liabilities (whether or not required to be reflected in financial
statements prepared in accordance with GAAP, and whether due or to become due)
except to the extent reflected and adequately reserved against in the most
recent Financial Information or in the financial materials provided to
Purchaser.  Schedule 4.6 sets
forth a complete and correct list of all Indebtedness of the Company, as of the
date of this Agreement and identifies the creditor, creditor’s address, the type
of instrument under which the Indebtedness is owed, the amount of the
Indebtedness, and any offset rights as of the Closing Date.  It is
agreed that the listing of any Indebtedness in Schedule 4.6 shall
not affect the obligations of Parent to indemnify Purchaser, Merger Subsidiary
and Surviving Corporation for any breach of any of the representations and
warranties set forth in this Agreement.  At Closing, the Company will
have no Indebtedness to Wells Fargo under the Company Factoring Agreement,
except as set forth in the Payoff Letter.  No Indebtedness of the
Company contains any restriction upon (i) the prepayment of any of such
Indebtedness, (ii) the incurrence of Indebtedness by the Company, or (iii) the
ability of the Company to grant any Lien on its properties or
assets.  With respect to each item of Indebtedness, the Company is not
in default and no payments are past due.  With respect to all trade
payables, the Company is current in payment, in accordance with all applicable
agreed terms of payment.  The Company has not received any notice of a
default, alleged failure to perform or any offset or counterclaim with respect
to any item of Indebtedness or trade payable that has not been fully remedied
and withdrawn.  With respect to payroll, the Company has paid all
payroll obligations through all dates payroll obligations were due and payable
prior to the date hereof.  The consummation of the Transactions will
not cause a default, breach or an acceleration, automatic or otherwise, of any
conditions, covenants or any other terms of any item of
Indebtedness.  The Company has not guaranteed and is not responsible
or liable for any Indebtedness of any other Person.




4.7        No
Changes .  Since
June 30, 2010:




(a)       
the Company has operated the Business in the ordinary course in a manner
consistent with past practices;


13


(b)        there
has not been any development, event, change, circumstance or condition, whether
considered alone or together, that has or could have, resulted in any
Liabilities of the Business other than Liabilities arising in the ordinary
course;




(c)        there
has not been any change to the accounting methods, principles or practices used
by the Company;




(d)        there
has not been any change to the Financial Information described in Schedule
4.5;




(e)        the
Company has not sold, leased, exchanged, transferred or otherwise disposed of,
or agreed to sell, lease, exchange, transfer or otherwise dispose of, any assets
of the Company other than in the ordinary course of business;




(f)         the
Company has not suffered any Company Material Adverse Effect, and no event,
change or circumstance has occurred with respect to the Company which has had or
would reasonably be expected to have a Company Material Adverse
Effect;




(g)        the
Company has not instituted or settled any legal proceedings which, individually
or in the aggregate, would be material to the Company; and




(h)        the
Company has not entered into any Contract or written commitment to do any of the
foregoing.




4.8        Title to
Properties .  Except
for (a) the properties and assets which are leased or licensed by the Company
and identified with respect to each Location on Schedule 4.8; (b) the
items of Software licensed to the Company and identified as such on Schedule 4.12; (c)
the Permitted Liens, each of which shall be described on Schedule 4.8; and (d)
the Leased Real Property on which each Location is located identified on Schedule 4.9(a), the
Company has good and marketable title to all of its assets, free and clear of
all Adverse Claims except where the failure to have title would not have a
Company Material Adverse Effect.  The Company has a valid and
enforceable license, lease and right to use all material assets which are either
licensed or leased by the Company and the Company enjoys peaceful and
undistributed possession thereunder.  Except as otherwise expressly
contemplated by the first sentence of this Section 4.8, no
person or entity (including any Affiliate of the Company) owns or has any right
or interest in any of the assets and property incidental or relating to, or used
in connection with the Business.  All items of tangible properties and
assets of the Company that are material to the conduct of the Business are in
good operating condition and repair for assets of like type and age, ordinary
wear and tear excepted.  Such tangible properties and assets of the
Company are sufficient for the continued conduct of the Business in
substantially the same manner as previously conducted, and as currently proposed
to be conducted.




4.9        Real
Estate .




(a)        The
Company owns no real property used in the Business.  Schedule 4.9(a) sets
forth the real property used by the Company at the Locations, each of which is
leased pursuant to the leases identified on Schedule 4.9(a)
(collectively, the “Leased Real
Property”).


14


(b)        The
use and operations of the Locations are in conformance with all material
Requirements of Law, Orders and Permits.




(c)        Since
June 30,
2010, the Company has not received any written notice of default in the
performance, observance or fulfillment of any material obligation, covenant or
condition contained in any Unexpired Lease.




(d)        The
Company has good and valid leasehold interests in all Leased Real Property, in
each case, free and clear of all Liens, except Permitted Liens except where the
failure to have such a leasehold interest would not have a Company Material
Adverse Effect.




4.10      Environmental .  There
have occurred no (a) events, conditions, circumstances, activities, practices,
incidents, or actions that may give rise to any material common law or statutory
liability, or otherwise form a basis for any material Legal Proceeding in
connection with any period in which the Company leased or occupied any Location,
or (b) material Orders, remedial or responsive actions, or studies or
investigations involving, or relating to, the Company or any Location, in any
such case, based upon or related to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handing, or the emission,
discharge, release or threatened release into the environment, or any
pollutants, contaminants, chemicals or hazardous substances.




4.11      Contracts and
Commitments .  Schedule 4.11 lists
all material Contracts of the Company other than the Unexpired
Leases.  Schedule 4.11
contains a true and complete list of each Contract entered into and a
description by the Company of all of the material terms of all oral
Contracts.  The Company is not and, to the best of the Company’s
knowledge, all other parties to any Unexpired Lease or Contract are not, in
material breach of, or material default under, any provision thereof, and no
event has occurred which with or without the passage of time or the giving of
notice or both would constitute a material breach or default thereunder with
respect to the Company and, to the best of the Company’s knowledge, with respect
to such other parties to such Contracts and Unexpired Leases.  No
party to any Unexpired Lease or Contract has provided the Company with notice of
such party’s intention to terminate or withdraw its participation in any
Unexpired Lease or Contract.  There have been no waivers, forbearances
or modifications of any kind whatsoever to the express terms set forth in such
written Contract or as described with respect to such oral
Contract.




4.12      Patents, Trademarks,
Copyrights and Domains .  The
Company does not own any patents or any patent applications.  Schedule 4.12
contains complete and correct lists of all Copyrights, Trademarks and domains
owned or used by the Company in the conduct of the Business.  Schedule 4.12
contains a complete and correct list of all material Software used in the
operations of the Company’s Business.  The Company has no obligation
to make any payments by way of royalties, fees, or otherwise to any owner or
licensor of, or other claimant to, any Copyright, Trademark or domain on account
of the Company’s conduct of the Business.  The Company is not
infringing or misappropriating, and the Company has not infringed upon or
misappropriated, the rights of any other person or entity.


15


4.13      Pending Litigation,
Proceedings or Investigations .  Except
as set forth on Schedule 4.13, there
is no suit, action, asserted claim, arbitration, grievance, litigation,
administrative or other proceeding (a “Legal Proceeding”)
pending or, to the best of the Company’s knowledge, threatened, against or
related to Parent, the Company or the Business or which could adversely affect
or restrict the ability of Parent or the Company to consummate fully the
Transactions.  Schedule 4.13 also
contains a true and complete list of all material Orders to which the Company is
subject or by which any of its properties are bound.




4.14      Absence of Restrictions;
Compliance with Laws; Permits .  Except
as set forth on Schedule 4.14, the
Company is not subject to any Contract or other obligation that proposes to or
has the effect of limiting the Company’s right to engage or compete with any
person or entity in any business.  The Company has operated the
Business at all times prior to the Closing Date in compliance with all material
Requirements of Law.  Since June 30, 2010, the
Company has not received any notice that it is in violation of, or in default
under, any material Requirement of Law applicable to the Company or any material
Order issued or pending against the Company or by which the Company or any of
its respective properties are bound, and any such notice received or Order
issued or pending has been resolved in a manner that imposes a Liability or
restriction on the Business and its operations.  The Company has
obtained and filed all material Permits and Licenses that are required for the
operation of the Company’s Business and each Location.  Schedule 4.14
contains a complete and accurate list, by Location, of all of the Company’s
material Permits and Licenses.  To the best of the Company’s
knowledge, all such material Permits and Licenses were made in accordance with
applicable Requirements of Law when obtained or filed.  Except as set
forth in Schedule
4.14, no material deficiencies have been asserted by any governmental or
regulatory authority with respect to any material Permit or License that has not
been finally resolved.  All material Permits and Licenses are valid
and in full force and, to the best of the Company’s knowledge, no revocation,
cancellation, or withdrawal thereof has been effected or
threatened.




4.15      No
brokers .  Neither
the Parent nor the Company has engaged any person or entity as a broker, finder
or intermediary for or on account of any of the Transactions.




4.16      Customers .  Schedule 4.16 sets
forth the Company’s top 25 customers of the Business and the approximate net
revenue associated with each such Person during the fiscal year ended December
31, 2009.  Except as set forth on Schedule 4.16, with
respect to the top 25 existing customers of the Businesses (by revenue for the
quarter ended June 30, 2010]), (a) all amounts owing from such Persons, if not
in dispute, have been paid in accordance with their respective terms; (b) none
of such Persons has notified the Company in writing that it is canceling, or
otherwise terminating, the relationship of such Person with the Company or
intends to do so; and (c) none of such Persons has notified the Company in
writing that it intends to decrease or limit materially its purchases from the
Company.  Schedule 4.16 sets
forth any disputes regarding amounts owing from such Persons with the Company’s
top 25 customers of the Business, including the amount in dispute, the date the
payment was originally due, and the reason for the dispute.


16


4.17      Tax
Matters .  The
Company has duly and timely filed all Tax Returns required to be filed by the
Company.  The Company has provided Purchaser with true and complete
copies of all federal and state income Tax Returns for the Company for the
fiscal year ended December 31, 2009.  Each of the Tax Returns filed by
the Company was true and complete when filed.  The Company has fully
paid all Taxes that were due and payable, or asserted or claimed to be due and
payable by any federal, state or local tax authority from the Company for the
period covered by the applicable Tax Returns or any statement or other document
issued by any such tax authority.  The Company has not received any
outstanding and unresolved notices from the IRS or any other governmental or
regulatory authority of any proposed examination or of any proposed change in
reported information related to the Company except as set forth on Schedule
4.17.  There are no Adverse Claims of any kind for Taxes upon
any of the Company’s assets other than for those Adverse Claims for Taxes not
yet due and payable.  The Company has complied with all applicable
Requirements of Law relating to the payment and withholding of Taxes (including
withholding Taxes pursuant to Sections 1441 and 1442 of the
Code).  All monies that the Company is required by applicable
Requirement of Law to collect or withhold from the employees of the Company for
income Taxes, social security and other payroll Taxes, or from independent
contractors, shareholders or other third parties, have, within the time and
manner presented by applicable Requirement of Law, been collected or withheld,
and paid to the respective governmental or regulatory authority.




4.18      Employee
Matters .




(a)        The
Company has complied with all applicable laws relating to the employment of
personnel and labor, including provisions thereof relating to wages and hours,
equal opportunity, collective bargaining, plant closing and mass layoff, health
and safety, immigration and the payment of social security and other taxes,
except to the extent that any noncompliance would not have a Company Material
Adverse Effect.  Except for those Employees with Employee Agreements
(as defined below), each Employee’s employment for the Company is
“at-will.”




(b)        Except
as set forth on Schedule 4.18(b), the
Company has no obligation to pay any Employee any severance or similar
payments.  A list of agreements between Employees and the Company
(“Employee
Agreements”) are set forth on Schedule
4.18(b).




(c)         The
Company is not a party to or bound by any collective bargaining agreement and no
collective bargaining agreement covering the Company’s employees is currently
being negotiated.




(d)        No
dispute with or claim against the Company relating to any labor or employment
matter including employment practices, discrimination, terms and conditions of
employment, or wages and hours is outstanding or, to the best of the Company’s
knowledge, is threatened.  There is no claim or petition pending
before, or any claim or petition made to, any governmental or regulatory
authority including, but not limited to, the Equal Employment Opportunity
Commission, against the Company with respect to any labor or employment matter,
except as set forth on Schedule
4.18(d).




(e)        All
individuals who are performing or who have performed consulting services have
been correctly classified by the Company as employees or independent
contractors, as the case may be.


17


4.19      Employee Benefit
Plans .




(a)        No
action or failure to take an action by the Company, any Affiliate of the Company
(including affiliates by reason of Sections 414(b), 414(c) or 414(m) of the Code
(“ERISA
Affiliates”), or any other person, and no facts or circumstances exist
that, could directly or indirectly subject Purchaser, Merger Subsidiary or any
of its Affiliates (or any of their employees or directors) to any Liability of
any nature with respect to any pension, profit-sharing, welfare,
hospitalization, insurance, bonus, incentive, perquisite, paid time off,
severance, employment or other benefit plan, policy practice or agreement which
is now, or has been at any time, sponsored, maintained, contributed to, or
required to be contributed to by the Company or any of its ERISA Affiliates, to
which the Company or any of its ERISA Affiliates are a party, or with respect to
which the Company or any of its ERISA Affiliates has or could have any Liability
of any nature (each such plan, policy, practice or agreement is referred to
herein as a “Benefit
Plan”).




(b)        The
only Benefit Plans sponsored or maintained by the Company that are subject to
ERISA are those set forth on Schedule
4.19(b).  Neither the Company nor any ERISA Affiliate has ever
sponsored, maintained, contributed to or had any, and has not withdrawn from
any, obligation to contribute any, and has not withdrawn from any, Benefit Plan
subject to Section 412 of the Code, or Title IV of ERISA, or intended to be
qualified under Section 401(a) of the Code.  No Employee is employed
outside the United States, and no Benefit Plan is subject to the laws of any
foreign jurisdiction.




(c)        Except
as set forth on Schedule 4.19(c), all
Benefit Plans of the Company have been maintained in accordance with applicable
law.




(d)        The
Benefit Plans sponsored by the Company or any ERISA Affiliate have complied with
all COBRA obligations.




4.20      Insurance .  Schedule 4.20
contains a list of all policies of liability, environmental, crime, fidelity,
life, fire, workers’ compensation, health, director and officer liability and
all other forms of insurance currently owned or held by the Company or to which
the Company is a named insured or otherwise the beneficiary, and identifies for
each such policy:  the underwriter, the name of the policy holder,
policy number, retroactive premium adjustments or other loss sharing
arrangements, expiration date, and deductible amount.  All of the
insurance policies listed on Schedule 4.20 are
outstanding and in full force and effect and the Company is not delinquent in
the payment of any premiums with respect to such policies.




4.21      Related Party
Transactions .  To
the knowledge of the Company, no officer or director of the Company or Parent,
no security holder of the Parent, and no member of their respective immediate
families, is, directly or indirectly, a party to or interested in any Contract,
except to the extent disclosed to Purchaser prior to the date of this
Agreement.




4.22      Bank
Accounts .  Immediately
following the Effective Time, the Company’s bank accounts will be
closed.


18


4.23      Privacy and
Security .  To
the knowledge of the Company, the Company complies (and requires and monitors
the compliance of applicable third parties) with all U.S., state, foreign and
multinational Laws (including the Children’s Online Privacy Protection Act,
California S.B. 27, California Consumer Spyware Act, Utah Spyware Control Act
and California Civil Code 1798.81.5), reputable industry practice, standards,
self-governing rules and policies and their own published, posted and internal
agreements and policies (which are in conformance with reputable industry
practice) (“Privacy
Laws”) with respect to:  (i) personally identifiable
information (including but not limited to name, address, telephone number,
electronic mail address, social security number, bank account number or credit
card number), sensitive personal information and any special categories of
personal information regulated thereunder or covered thereby (“Personal
Information”) (including such Personal Information of visitors who use
the Company’s websites, clients and distributors), whether any of same is
accessed or used by the Company or any of its business partners; (ii)
non-personally identifiable information (including such Personal Information of
visitors who use the Company’s websites, clients and distributors), whether any
of same is accessed or used by the Company or any of its business partners;
(iii) spyware and adware; (iv) the procurement and/or placement of
advertising from or with reputable Persons and websites; (v) the use of Internet
searches associated with or using particular words or terms; (vi) the
sending of solicited or unsolicited electronic mail messages; and (vii) privacy
generally.




ARTICLE
V




REPRESENTATIONS
AND WARRANTIES


OF
PURCHASER AND MERGER SUBSIDIARY




Purchaser
and Merger Subsidiary, jointly and severally, represent and warrant to Parent
and the Company that the statements contained in this Article V are true and
correct as of the date hereof.




5.1        Organization and
Standingof
Purchaser and Merger Subsidiary .




(a)        Purchaser
(i) is duly formed, validly existing and in good standing under the laws of its
state of organization, (ii) is duly qualified and authorized to do business in
each jurisdiction where it conducts business, owns property or has employees,
(iii) has the power and is entitled to carry on its business as now being
conducted and (iv) is authorized to enter into and perform this Agreement and
the Transaction Documents entered into or to be entered into and performed by
Purchaser.




(b)        Merger
Subsidiary is a corporation duly formed, validly existing and in good standing
under the laws of its state of organization.  Since its date of
incorporation, Merger Subsidiary has not engaged in any activities other than in
connection with or as contemplated by this Agreement.  Merger
Subsidiary has all requisite corporate power to own, lease and operate its
properties and to carry on its business as now being conducted, and is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the conduct of its business or the ownership, leasing
or holding of its properties makes such qualification
necessary.


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5.2        Authorization .




(a)        This
Agreement, the Transaction Documents delivered or to be delivered by Purchaser
to Parent and the Transactions have been duly authorized by all action required
to be taken on the part of each of Purchaser and Merger Subsidiary.




(b)        Each
of Purchaser and Merger Subsidiary has full capacity, power and authority to
execute and deliver this Agreement and the Transaction Documents.




(c)        This
Agreement and each of the Transaction Documents entered into or to be entered
into and performed by Purchaser and Merger Subsidiary are and shall be legal,
valid and binding obligations of Purchaser and Merger Subsidiary, enforceable
against each of Purchaser and Merger Subsidiary, as applicable, in accordance
with their respective terms.




5.3        Noncontravention of
Contemplated Transactions; Consents and Government Approvals .  The
execution, delivery and performance of this Agreement and the Transaction
Documents delivered or to be delivered pursuant to this Agreement by each of
Purchaser and Merger Subsidiary, as applicable, and the consummation thereof do
not and will not (a) violate any Requirements of Law applicable to Purchaser or
Merger Subsidiary or any Order to which Purchaser or Merger Subsidiary is
subject or by which the properties of Purchaser or Merger Subsidiary are bound,
or (b) violate Purchaser’s or Merger Subsidiary’s certificate of incorporation
or bylaws.  Except as set forth on Schedule 5.3, no
Consent or Regulatory Approval is required for each of Purchaser and Merger
Subsidiary to enter into and perform this Agreement or any of the Transaction
Documents to be executed by Purchaser or Merger Subsidiary, or in connection
with Purchaser’s or Merger Subsidiary’s consummation of the
Transactions.




5.4        Litigation .  There
is no suit, claim, action or proceeding pending or, to the knowledge of
Purchaser or Merger Subsidiary, threatened against or affecting either Purchaser
or Merger Subsidiary which would, individually or in the aggregate, adversely
affect or restrict the ability of Purchaser or Merger Subsidiary to consummate
fully the Transactions.




5.5        Authorized
Shares .   Purchaser
has sufficient shares authorized to deliver the Merger Consideration, free and
clear of all Liens.




ARTICLE
VI




COVENANTS




6.1        Public
Announcements .  Parent
and Purchaser shall consult with each other before issuing any press release or
otherwise making any public statement with respect to the Merger or any of the
Transactions.  Without limiting the generality of the foregoing,
neither the Company or Parent, on the one hand, nor Purchaser or Merger
Subsidiary, on the other hand, shall, and neither Parent nor Purchaser shall
permit any of their respective Affiliates to, make any disclosure regarding the
Merger or any of the Transactions prior to Closing unless (a) the other
party shall have approved such disclosure, or (b) such disclosure is
required by applicable law, in which case the disclosing party shall use its
reasonable best efforts to consult with the other party before issuing any such
release or making any such public statement.


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6.2        Consents .  Purchaser
acknowledges that certain consents and waivers with respect to the Transactions
may be required from parties to Contracts to which the Company is a party, and
that such consents and waivers have not been obtained.  However,
Purchaser agrees that Parent and its Affiliates shall not have any liability
whatsoever to Purchaser arising out of or relating to the failure to obtain any
consents or waivers related to Customer Contracts that may be required in
connection with the transactions contemplated hereby or because of the
termination of any Customer Contract as a result thereof.  Purchaser
further agrees that no representation, warranty or covenant of Parent or the
Company contained herein shall be breached or deemed breached, and no condition
shall be deemed not satisfied, as a result of (a) the failure to obtain any
such consent or waiver in connection with a Customer Contract, (b) any such
termination of a Customer Contract, or (c) any Action commenced or
threatened by or on behalf of any Person arising out of or relating to the
failure to obtain any such consent or any such termination in connection with a
Customer Contract.  Prior to the Closing, Parent shall, and shall
cause the Company to, cooperate with Purchaser and use commercially reasonable
efforts, in connection with Purchaser obtaining any such consents and waivers;
provided, however, that such
cooperation shall not include any requirement of Purchaser or the Company to
expend money, commence, defend or participate in any litigation or offer or
grant any accommodation (financial or otherwise) to any third
party.




6.3        Conduct of
Business .  During
the period from the date hereof and continuing until the Effective Time, except
with the consent of Purchaser (which shall not be unreasonably withheld), Parent
shall cause the Company to:




(a)        carry
on the business of the Company in the same manner as presently conducted and to
keep the Company's business organization and properties intact;




(b)        promptly
(once the Company or the Parent obtains knowledge thereof) inform Purchaser in
writing of any breach of the representations and warranties contained in Article
IV hereof;




(c)        cooperate
with Purchaser and use commercially reasonable efforts and take such actions to
cause the conditions to Purchaser's obligation to close to be satisfied
(including, without limitation, the execution and delivery of all agreements
contemplated hereunder to be so executed and delivered and the making and
obtaining of all third party and governmental filings, authorizations,
approvals, consents, releases and terminations required to be obtained by the
Company hereunder);




(d)        not
incur any Indebtedness for borrowed money or capitalized lease obligations,
other than in the ordinary course of business;




(e)        not
make or change any election, change an annual accounting period, adopt or change
any accounting method, file any amended Tax Return, enter into any closing
agreement, settle any Tax claim or assessment relating to the Company, surrender
any right to claim a refund of Taxes, consent to any extension or waiver of the
limitation period applicable to any Tax claim or assessment relating to the
Company, or take any other similar action, or omit to take any action relating
to the filing of any Tax Return or the payment of any Tax, if such election,
adoption, change, amendment, agreement, settlement, surrender, consent or other
action or omission would have the effect of increasing the present or future Tax
liability or decreasing any present or future Tax asset of the Company;
and


21


(f)         not
enter into any new material Contracts which would have been required to be
disclosed under Section 4.11 if such
new material Contract had been entered into prior to the date of the
Agreement.




6.4        Employee
Benefits .




(a)        Merger
Subsidiary hereby agrees to assume, honor and maintain without any materially
adverse amendment thereto, and Parent hereby agrees to cause the Surviving
Corporation to assume, honor and maintain without any materially adverse
amendment thereto (except as may be required by applicable law), for a period of
one year immediately following the Effective Time, each Benefit Plan and
Employee Agreement and each other agreement identified in Schedules 4.18(b) and
4.19(b) for the benefit of the employees of the Company, and to make
required payments when due under each such Benefit Plan and Employee
Agreement.




(b)        No
Employee who becomes an employee of the Surviving Corporation following the
Effective Time (a “Continuing Employee”)
shall be deemed to be a third-party beneficiary to this
Agreement.  Nothing in this Section 6.4 or
elsewhere in this Agreement shall be construed to create a right of any Employee
to employment with the Surviving Corporation following the Effective Time, and
employment of any Continuing Employee shall be “at-will” except as otherwise may
be provided in any of the Employment Agreements set forth in Schedule
4.18(b).




6.5        Directors’ and Officers’
Insurance and Indemnification .




(a)        The
certificate of incorporation and bylaws of the Surviving Corporation shall
provide for indemnification to the fullest extent permitted by and in accordance
with the DGCL, which provisions shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time (provided that in
the event any claim is asserted or made within such six-year period, all rights
to indemnification in respect of any such claim shall continue until final
disposition of any such claim) in any manner that would adversely affect the
rights thereunder of individuals who at any time prior to the Effective Time
were directors or officers of the Company in respect of actions or omissions
occurring at or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement).


22


(b)        Purchaser
agrees that at all times after the Effective Time it shall, and shall cause the
Surviving Corporation to, indemnify each person who is now, or has been at any
time within two (2) years prior to the date hereof, a director or officer of the
Company (collectively, the “IndemnifiedOfficers and
Directors”), to the full extent permitted by the law of the State of
Delaware, with respect to any claim, liability, loss, damage, cost or expense,
whenever asserted or claimed, based in whole or in part on, or arising in whole
or in part out of, any matter existing or occurring at or prior to the Effective
Time; provided however, Purchaser shall have no obligation under this Section 6.5 to
indemnify a director or officer of the Company for claims arising from or
relating in material part to fraud, gross negligence or intentional misconduct
on the part of such director or officer.  If the Surviving Corporation
or any of its successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers all or substantially all of
its properties and assets to any person, or if Purchaser sells or otherwise
disposes of all or substantially all of its equity interest in the Surviving
Corporation or otherwise disposes of control of the Surviving Corporation, then
and in each such case proper provision shall be made so that the successors and
assigns of the Surviving Corporation, Purchaser or both, as the case may be,
assume the obligations set forth in this Section 6.5 for the
benefit of the Indemnified Officers and Directors.  The provisions of
this Section
6.5 are intended to be for the benefit of, and enforceable by, each such
Indemnified Officer and Director of the Company immediately prior to the
Effective Time and his or her heirs and representatives, and nothing herein
shall affect any indemnification rights that any such party and his or her heirs
and representatives may have under the certificate of incorporation or bylaws of
the Company or any contract or applicable law and shall be enforceable by all
such parties.




6.6        Tax
Matters .




(a)        Parent
shall prepare or cause to be prepared and file or cause to be filed all Tax
Returns for the Company for all Tax periods which begin before the Closing Date
and end on or prior to the Closing Date.  Purchaser shall prepare or
cause to be prepared and file or cause to be filed all Tax Returns for the
Surviving Corporation for all Tax periods which include (but do not end on) the
Closing Date.  All such Tax Returns shall be prepared in a manner
consistent with all prior Tax Returns of the Company, including, without
limitation, the consistent use of any accounting treatment, except to the extent
required by law.  The party preparing a Tax Return pursuant to this
Section 6.6(a)
shall permit the other party to review and comment on such Tax Return prior to
filing and shall make such revisions as are reasonably requested by such other
party.




(b)        Purchaser
and Parent shall, and shall cause their respective subsidiaries and Affiliates
to, provide to the other such cooperation and information, as and to the extent
reasonably requested, in connection with the filing of any Tax Return pursuant
to this Section
6.6, amended Tax Return or claim for refund, determining liability for
Taxes or a right to refund of Taxes, or in conducting any audit, litigation or
other proceeding with respect to Taxes.  Purchaser and Parent further
agree, upon request, to use their commercially reasonable efforts to obtain any
certificate or other document from any governmental authority or any other
Person as may be necessary to mitigate, reduce or eliminate any Tax that could
be imposed (including, but not limited to, with respect to the transactions
contemplated hereby).




6.7        Further
Assurances .  Each
party hereto agrees not to (a) take any action that would, or is reasonably
likely to, prevent or impede the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code or (b) take any action that is
intended or is reasonably likely to result in (i) any of its representations and
warranties set forth in this Agreement being or becoming untrue in any material
respect at any time at or prior to the Effective Time, (ii) any of the conditions to the Transaction set forth in Article VII not being
satisfied or (iii) a material violation of any provision of this Agreement,
except as may be required by applicable law or regulation.


23


6.8        Plan of
Reorganization .  This
Agreement is intended to constitute a “plan of reorganization” within the
meaning of section 1.368-2(g) of the Treasury Regulations.  From and
after the date of this Agreement and until the Effective Time, each party to
this Agreement shall use its reasonable best efforts to cause the Merger to
qualify, and shall not, without the prior written consent of the parties to this
Agreement, knowingly take any actions or cause any actions to be taken which
could prevent the Merger from qualifying, as a reorganization under the
provisions of Section 368(a) of the Code.  Following the Effective
Time, neither Parent, the Surviving Corporation nor any Affiliate thereof shall
knowingly take any action or cause any action to be taken which would cause the
Merger to fail to so qualify as a reorganization under Section 368(a) of the
Code.




6.9        Further
Actions .  Each
of the parties hereto shall use its reasonable best efforts to take, or cause to
be taken, all appropriate action, do or cause to be done all things necessary,
proper or advisable under applicable law, and to execute and deliver such
documents and other instruments or papers as may be required to carry out the
provisions of this Agreement and to consummate and render effective the
transactions contemplated by this Agreement.




6.10      Tax
Refunds .  Any
Tax refunds that are received by Purchaser and any refunds, overpayments, or tax
credits credited against Tax for taxable periods ending on or before the Closing
Date to which Purchaser becomes entitled, which such refunds, overpayments or
tax credits credited relate to taxable periods of the Company (or portions
thereof in the case of a straddle period) ending on or before the Closing Date
shall be for the account of Parent and Purchaser shall pay over to Parent an
amount of cash equal to the actual cash received or the Tax refund or
overpayment actually credited in excess of what it would have received or had
credited in the absence of any such refund or credit within 15 days of the
receipt of such benefit.”




6.11      Company
Dividend .  Immediately
prior to the Closing, the Company shall set a record date (which date shall be
prior to the Closing Date) and declare a dividend to Parent equal to those
amounts deemed, as of the Closing Date (but prior to any amounts being paid to
Wells Fargo pursuant to the Payoff Letter) “Collected Reserve” pursuant to the
terms of the Company Factoring Agreement, but not in excess of $2,700,000 (the
“Dividend
Amount”), which dividend obligation shall be payable by the Surviving
Corporation, after the Effective Time as follows, unless prohibited by Law:
within three (3) Business Days of the end of each month, the Surviving
Corporation shall remit to Parent 10% of the Collected Reserve received by the
Surviving Corporation during such month until the Dividend Amount has been paid
in full.  If, in the good faith determination of Purchaser, such
payments are prohibited by Law at any time, the Surviving Corporation will delay
such payment or payments until such time as the Purchaser determines, in good
faith, that the resumed payment of such payments will not result in the
violation of any Law.




ARTICLE
VII




CLOSING
DELIVERIES AND CONDITIONS




7.1        Parent and Company
Conditions to Closing .  At
or prior to the Effective Time, unless waived by Parent:


24


(a)        (i)
No material law or Order shall have been enacted, entered, issued, promulgated
or enforced by any Governmental Entity that prohibits or restrains any of the
Transactions and (ii) no material action shall have been commenced by or before
any Governmental Entity that seeks to restrain or materially and adversely alter
the Transactions that in the reasonable good faith determination of Company or
Purchaser would render it unlawful to consummate the transactions contemplated
by this Agreement.




(b)        The
representations and warranties of Purchaser and Merger Subsidiary contained
herein shall be true and correct in all material respects, with respect to
representations and warranties not qualified by materiality, or in all respects,
with respect to representations and warranties qualified by materiality, as of
the Effective Time as though made on and as of the Effective Time and as though
the Effective Time were substituted for the date of this Agreement throughout
such representations and warranties, unless such representations and warranties
by their terms speak as of an earlier date, in which case they shall be true and
correct as of such date.




(c)        Purchaser
and Merger Subsidiary shall have performed all obligations and complied with all
covenants set forth in this Agreement that are required to be performed or
complied with by it at or prior to the Effective Time in all material
respects.




(d)        Immediately
prior to the Effective Time, the Company shall have declared a dividend equal to
the Dividend Amount and set a record date which date shall be prior to the
Closing Date.




(e)        Purchaser
and Merger Subsidiary shall deliver to Parent all of the following:




(i)        a
certificate of Purchaser signed by an authorized officer of Purchaser to the
effect that the conditions in Section 7.1(b) and
Section 7.1(c)
have been satisfied; and




(ii)       a
certificate representing the Merger Consideration.




7.2        Purchaser and Merger
Subsidiary Conditions to Closing .  At
or prior to the Effective Time, unless waived by Purchaser:




(a)        (i)
No material law or Order shall have been enacted, entered, issued, promulgated
or enforced by any Governmental Entity that prohibits or restrains any of the
Transactions and (ii) no material action shall have been commenced by or before
any Governmental Entity that seeks to restrain or materially and adversely alter
the Transactions that in the reasonable good faith determination of Company or
Purchaser would render it unlawful to consummate the Transactions.




(b)        The
representations and warranties of Parent and the Company contained herein shall
be true and correct in all material respects, with respect to representations
and warranties not qualified by materiality, or in all respects, with respect to
representations and warranties qualified by materiality, as of the Effective
Time as though made on and as of the Effective Time and as though the Effective
Time were substituted for the date of this Agreement throughout such
representations and warranties, unless such representations and warranties by
their terms speak as of an earlier date, in which case they shall be true and
correct as of such date.


25


(c)        Parent
and the Company shall have performed all obligations and complied with all
covenants set forth in this Agreement that are required to be performed or
complied with by it at or prior to the Effective Time in all material
respects.




(d)        Purchaser
shall have entered into an employment agreement with Frank Vaccaro (“Vaccaro”), relating
to Vaccaro’s position as President of Sales of the Purchaser (the “Vaccaro Employment
Agreement”) prior to or concurrent with the Closing Date.




(e)        The
Severance Agreement between Matthew Vaccaro and Diamond Staffing, dated as of
January 1, 2009 (“Vaccaro Severance
Agreement”), shall each have been terminated.




(f)         The
Employment Agreement between Vaccaro and Diamond Staffing, dated as of January
1, 2009, as amended (“Diamond Staffing Employment
Agreement”), shall have been terminated.




(g)        Parent
and the Company shall deliver to Purchaser all of the following:




(i)        evidence
(which may include a written consent) reasonably satisfactory to Purchaser that
Wells Fargo has, subject to the Payoff Letter, released the Company from
liability for all Indebtedness of the Company to Wells Fargo pursuant to the
Company Factoring Agreement;




(ii)       written
resignations of all officers and directors of the Company, effective as of the
Effective Time;




(iii)      a
certificate of Parent signed by an authorized officer of Parent to the effect
that the conditions in Section 7.2(b) and
Section 7.2(c)
have been satisfied;




(iv)     a
certificate of an executive officer of the Company certifying to true and
correct copies of the organizational documents of the Company and certifying to
a true and correct copy of the resolutions of the Company approving the
Transactions and that such resolutions are in full force and
effect;




(v)      a
certificate of good standing (or comparable certificates, including certificates
of existence) as of a recent date with respect to the Company issued by the
appropriate Governmental Entity in each state where the Company is
organized;




(vi)     executed
copies of:  (1) that certain termination agreement, dated on or prior
to the Closing Date, between Diamond Staffing and Vaccaro terminating, as of the
Effective Time, both Vaccaro’s employment by Diamond Staffing and the Diamond
Staffing Employment Agreement; and (2) that certain termination agreement, dated
on or prior to the Closing Date, between Diamond Staffing and Vaccaro
terminating as of the Effective Time the Vaccaro Severance
Agreement;


26


(vii)     the
Books and Records of the Company; and




(viii)   all
other documents, instruments, certificates or other items required to be
delivered at the Closing by the Company or Parent pursuant to this
Agreement.




(h)        Merger
Subsidiary shall have entered into a factoring arrangement with Wells Fargo
acceptable to Purchaser and Merger Subsidiary in their reasonable
discretion.




(i)         Purchaser
shall have received a fairness opinion from Business Valuation Advisors LLC in
connection with the Merger that is acceptable to Purchaser in its reasonable
discretion.




ARTICLE
VIII




INDEMNIFICATION




8.1        Parent’s
Indemnification .  From
and after the Closing, Parent shall indemnify Purchaser, Merger Subsidiary,
Surviving Corporation and their respective officers, directors, employees,
agents, representatives, successors and permitted assigns (collectively, the
“Purchaser
Indemnitees”) and hold each of them harmless from and against and pay on
behalf of or reimburse such Purchaser Indemnitees in respect of any loss,
diminution in value, Liability, demand, claim, action, cause of action, cost,
damage, deficiency, Tax, penalty, fine or expense, whether or not arising out of
third party claims (including, without limitation, interest, penalties,
reasonable attorneys’, accountants’ and other professionals’ fees and expenses,
court costs and all amounts paid in investigation, defense or settlement of any
of the foregoing) (collectively, “Losses” and
individually, a “Loss”) which any such
Purchaser Indemnitee may suffer, sustain or become subject to, as a result of,
in connection with, relating or incidental to or by virtue of:




(a)        any
breach of any representation or warranty made by Parent or the Company contained
in this Agreement, any misrepresentation made in the officer’s certificate
delivered pursuant to Section 7.2, or the
assertion by any third party of facts which, if proven, would constitute any
such misrepresentation or breach (it being understood that for purposes of
determining a breach of any representation or warranty, such breach shall be
determined without regard to any materiality qualifier contained in such
misrepresentation or warranty);




(b)        the
breach of any covenant or agreement made by Parent or the Company contained in
this Agreement, or the assertion by any third party of facts which, if proven,
would constitute any such breach; or




(c)        any
Tax incurred by the Company prior to the Closing Date (for purposes of this
clause (c), in the case of any Tax Return for a period beginning before and
ending after the Closing Date, the portion of any such Tax that is allocable to
the portion of the period ending on the close of the Closing Date shall be (i)
in the case of Taxes that are (x) based upon or related to income or receipts,
(y) imposed in connection with the sale or other transfer or assignment of
property (real or personal, tangible or intangible), (z) employment, social
security or other similar taxes, deemed equal to the amount which would be
payable if the taxable year ended on the end of the Closing Date; and (ii) in
the case of Taxes imposed on a periodic basis with respect to any assets or
otherwise measured by the level of any item (e.g., ad valorem property taxes),
deemed to be the amount of such Taxes for the entire period (or, in the case of
such Taxes determined on an arrears basis, the amount of such taxes for the
immediately preceding period) multiplied by a fraction, the numerator of which
is the number of calendar days in the period ending on the end of the Closing
Date, and the denominator of which is the number of calendar days in the entire
period).


27


8.2        Purchaser’s
Indemnification .  Purchaser
shall indemnify Parent and its officers, directors, employees, shareholders,
agents, representatives, successors and permitted assigns (collectively, the
“Parent
Indemnitees”) and hold each of them harmless from and against and pay on
behalf of or reimburse the Parent Indemnitees in respect of any Loss which any
such Parent Indemnitee may suffer, sustain or become subject to, as the result
of, in connection with, relating to or incidental to or by virtue
of:




(a)        the
breach by Purchaser or Merger Subsidiary of any representation or warranty made
by Purchaser or Merger Subsidiary contained in this Agreement, any
misrepresentation made in the officer’s certificate delivered pursuant to Section 7.1, or the
assertion by any third party of facts which, if proven, would constitute any
such misrepresentation or breach (it being understood that for purposes of
determining a breach of any representation or warranty, such breach shall be
determined without regard to any materiality qualifier contained in such
misrepresentation or warranty); or




(b)        the
breach of any covenant or agreement made by Purchaser or Merger Subsidiary
contained in this Agreement, or the assertion by any third party of facts which,
if proven, would constitute any such breach.




8.3        Procedure .  If
a Party hereto seeks indemnification under this Article VIII, such Party (the
“Indemnified
Party”) shall give written notice to the other party(ies) (the “Indemnifying Party”)
promptly after receiving written notice of any action, lawsuit, proceeding,
investigation or other claim against it by a third party or discovering the
liability, obligation or facts giving rise to such claim for indemnification
(such claim a “Third-Party Claim”),
describing the claim, and the basis thereof, together with the amount of, or if
not then reasonably ascertainable, the estimated amount, determined in good
faith, of the Indemnified Party’s Losses in respect of such Third-Party Claim
(such notice, the “Claim Notice”); provided that the failure to
promptly provide to the Indemnifying Party the Claim Notice shall not relieve
the Indemnifying Party of its or his Liabilities hereunder except to the extent
such failure shall have harmed the Indemnifying Party.  In that
regard, if any Third Party Claim shall be brought or asserted which, if
adversely determined, would entitle the Indemnified Party to indemnity pursuant
to Article VIII, the Indemnified Party shall promptly provide a Claim Notice to
the Indemnifying Party.  The Indemnifying Party will notify the
Indemnified Party as soon as practicable within the Dispute Period whether the
Indemnifying Party accepts or disputes its Liability to the Indemnified Party
under Article VIII, and, if it accepts such Liability, subject to Section 8.8, whether
the Indemnifying Party desires, at its sole cost and expense, to defend the
Indemnified Party against such Third-Party Claim, provided, however, that the
Indemnifying Party shall only be permitted to assume such defense so long as (a)
such Third-Party Claim involves only monetary damages and does not seek an
injunction or other equitable relief (and does not involve criminal or
quasi-criminal allegations or a claim to which the Indemnified Party reasonably
believes an adverse determination would be detrimental to or injure the
Indemnified Party’s reputation or future business prospects) and (b) the
Indemnifying Party conducts the defense of the Third-Party Claim actively and
diligently.


28


8.4        Defense by Indemnified
Party . If (a)
the Indemnifying Party disputes its Liability under Section 8.3, (b) the
Indemnifying Party accepts its Liability under Section 8.3 but
chooses not to defend the Third-Party Claim, (c) the Indemnifying Party chooses
to defend the Third-Party Claim but any time thereafter fails to prosecute or
defend vigorously and diligently or settle the Third-Party Claim or (d) the
Indemnifying Party fails to give notice of its acceptance or dispute of its
Liability within the Dispute Period, then the Indemnified Party will have the
right (but not the obligation) to defend, at the sole cost and expense of the
Indemnifying Party, the Third-Party Claim by all appropriate proceedings, which
proceedings will be prosecuted by the Indemnified Party in good faith or will be
settled at the discretion of the Indemnified Party.  The Indemnified
Party shall make its election whether or not to defend within ten (10) calendar
days after the expiration of the Dispute Period (if it fails to give any notice
whatsoever during this period, it shall be deemed to have elected not to
defend).  The Indemnified Party will have full control of such defense
and proceedings, including any compromise or settlement thereof; provided, however, that if
requested by the Indemnified Party, the Indemnifying Party will, at the sole
cost and expense of the Indemnifying Party, provide reasonable cooperation to
the Indemnified Party and its counsel in contesting any Third-Party Claim that
the Indemnified Party is contesting.  The Indemnifying Party may
participate in, but not control, any defense or settlement controlled by the
Indemnified Party pursuant to this Section 8.4, and the
Indemnifying Party will bear its own costs and expenses with respect to such
participation.




8.5        Defense by Indemnifying
Party .  If
(a) the Indemnifying Party accepts its Liability to the Indemnified Party under
Section 8.3 and
notifies the Indemnified Party within the Dispute Period that the Indemnifying
Party desires to defend the Indemnified Party with respect to the Third-Party
Claim or (b) the Indemnified Party notifies (or is deemed to have notified) the
Indemnifying Party that it chooses not to defend the Third-Party Claim, then the
Indemnifying Party shall defend, with counsel reasonably satisfactory to the
Indemnified Party, at the sole cost and expense of the Indemnifying Party, such
Third-Party Claim by all appropriate proceedings, which proceedings will be
diligently prosecuted or defended by the Indemnifying Party to a final
conclusion or will be settled at the discretion of the Indemnifying Party (but
only with the prior written consent of the Indemnified Party in its sole
discretion in the case of any settlement (i) that provides for any relief
other than the payment of monetary damages, (ii) that provides for the payment
of monetary damages as to which the Indemnified Party will not be indemnified in
full pursuant to this Article VIII, (iii) that does not expressly
unconditionally release the Indemnified Party from all Liabilities with respect
to such claim and all other claims arising out of the same or similar facts and
circumstances, with prejudices, or (iv) that could adversely affect any Tax or
other Liability of any Indemnified Party).  Subject to the immediately
preceding sentence, the Indemnifying Party will have full control of such
defense and proceedings, including any compromise or settlement thereof; provided, however, that the
Indemnified Party may, at the cost and expense of the Indemnifying Party, at any
time prior to the Indemnifying Party’s delivery of the notice (or deemed notice)
referred to in the first sentence of this Section 8.5, file any
motion, answer or other pleadings or take any other action that the Indemnified
Party reasonably believes to be necessary or appropriate to protect its
interests.  If requested by the Indemnifying Party, the Indemnified
Party will, at the sole cost and expense of the Indemnifying Party, provide
reasonable cooperation to the Indemnifying Party in contesting any Third-Party
Claim that the Indemnifying Party elects to contest.


29


8.6        Non-Third-Party
Claims .  In
the event any Indemnified Party should have a claim under Article VIII against
any Indemnifying Party that does not involve a Third-Party Claim, the
Indemnified Party shall deliver an Indemnity Notice with reasonable promptness
to the Indemnifying Party.  The failure or delay by any Indemnified
Party to give the Indemnity Notice shall not impair such Party’s rights
hereunder except to the extent that the Indemnifying Party is actually
prejudiced by such failure or delay.  If the Indemnifying Party
notifies the Indemnified Party that it does not dispute the claim described in
such Indemnity Notice or fails to notify the Indemnified Party within the
Dispute Period whether the Indemnifying Party disputes the claim described in
such Indemnity Notice, the Loss identified in the Indemnity Notice will be
conclusively deemed a Liability of the Indemnified Party under Article VIII and
subject to Section
8.8.  If the Indemnifying Party has timely disputed its
Liability with respect to such claim, the Indemnifying Party and the Indemnified
Party will proceed in good faith to negotiate a resolution of such dispute and,
if not resolved through negotiations within forty-five (45) days of receipt of
notice of dispute of Liability with respect to such claim, such dispute shall be
resolved by litigation in a court of competent jurisdiction.




8.7        Payments .  The
Indemnifying Party shall pay the Indemnified Party in immediately available
funds promptly after the Indemnified Party provides the Indemnifying Party with
written notice of a claim hereunder and the Parties reasonably agree that there
is a reasonable basis for such claim or the claim has been defended and resolved
by a final, non-appealable resolution pursuant to the terms of this Article
VIII.




8.8        Limitations on Recoverable
Losses .  Notwithstanding
anything to the contrary set forth herein, indemnification pursuant to this
Article VIII shall be the sole remedy of the Parties for any breach of this
Agreement or any other Losses relating to this Agreement and the transactions
contemplated hereby; provided,
however, that nothing in this Agreement (including this Section 8.8) shall
limit or restrict any of the Indemnifying Party’s right to maintain or recover
any amounts in connection with any action or claim based upon fraud or deceit or
any remedy which might otherwise be available pursuant to applicable federal or
state securities laws, including any relief which might otherwise be available
pursuant to Section 10(b)(5) of the Exchange Act or any state law analog
thereof.  Parent’s aggregate liability for all (a) Losses under Section 8.1(a), other
than Section
4.17 (Tax Matters) and the Fundamental Representations, shall not, exceed
the sum of seven hundred fifty thousand dollars ($750,000) (the “Cap”) (b) Losses
under Section
8.1(a) pursuant to violations of Section 4.17 (Tax
Matters) shall not exceed the sum two million dollars ($2,000,000) (the “Tax Representation Indemnity
Cap”) (c) Losses under Section 8.1(a)
pursuant to the Fundamental Representations shall not exceed the sum of twenty
million dollars ($20,000,000) (the “Fundamental Representation
Indemnity Cap”); provided, however, that
Losses suffered to the extent as a result of, arising out of or caused by fraud
or intentional misrepresentation of the Indemnifying Party shall not be subject
to, or limited by, the Cap, the Tax Representation Indemnity Cap, the
Fundamental Representation Indemnity Cap, or any other limitation on recovery
set forth in this Agreement.  Notwithstanding anything herein to the
contrary, payments made by the Indemnifying Party pursuant to Sections 8.1 and 8.2
shall be limited to the amount of Losses, if any, that remains after deducting
therefrom (a) the Tax benefit actually realized by the applicable Indemnified
Parties arising from the incurrence or payment of such Losses (determined on a
with and without basis) in the Tax year in which such losses are incurred, and
(b) any insurance proceeds and any indemnity, contribution or other similar
payment actually recovered by the Indemnified Parties from any third parties
with respect thereto (less (i) the reasonably estimated amount of increased
future premiums resulting therefrom, (ii) any "retro-premiums" obligations,
(iii) any costs incurred in connection with such recovery and all deductibles
and (iv) co-payments and similar obligations).


30


8.9        No
Contribution .  Without
limiting the provisions of Section 6.5, Parent
acknowledges and agrees that it shall not have and shall not exercise or assert
(or attempt to exercise or assert) any right of contribution, right of indemnity
or advancement of expenses or other right or remedy against the Company or
against the Surviving Corporation in connection with any indemnification
obligation or any other Liability to which Parent may become subject under or in
connection with this Agreement or any other agreement or document delivered to
Purchaser in connection with this Agreement.




8.10      Purchase Price
Adjustment Indemnification
payments and any payments made pursuant to Section 6.10 shall be
treated by the parties as an adjustment to the purchase price, unless otherwise
required by Law.




ARTICLE
IX




TERMINATION




9.1        Termination of
Agreement.  This Agreement may be terminated and the
Transactions abandoned at any time before the Effective Time as
follows:




(a)        upon
written notice from either the Company or Purchaser to the other on or after
March 15, 2011 if the Closing will not have occurred by the close of business on
such date, provided that the terminating party is not in material default of any
of its obligations under this Agreement;




(b)        by
mutual written consent of the Company and Purchaser;




(c)        by
written notice from Purchaser to the Company if there has been a Company
Material Adverse Effect;




(d)        by
the Company or Purchaser if there is in effect a final nonappealable Order of a
Governmental Entity of competent jurisdiction restraining, enjoining, or
otherwise prohibiting the consummation of the Transactions; provided, however,
that the right to terminate this Agreement under this Section 9.1(d) will
not be available to a party hereto if such Order was primarily due to the
failure of such party to perform any of its obligations under this
Agreement;




(e)        by
Purchaser, if the Company shall have breached or failed to perform any of its
representations, warranties, covenants, or agreements set forth in this
Agreement or if any representation or warranty of the Company will have become
untrue, in either case such that the conditions set forth in Section 7.2(b) or
7.2(c) would
not be satisfied and such breach is incapable of being cured or, if capable of
being cured, will not have been cured within ten (10) days following receipt by
the Company of notice of such breach from Purchaser; or


31


(f)         by
the Company, if Purchaser shall have breached or failed to perform any of its
representations, warranties, covenants, or agreements set forth in this
Agreement or if any representation or warranty of Purchaser will have become
untrue, in either case such that the conditions set forth in Section 7.1(b) or
7.1(c) would
not be satisfied and such breach is incapable of being cured or, if capable of
being cured, will not have been cured within ten (10) days following receipt by
Purchaser of notice of such breach from the Company.




9.2        Procedure Upon
Termination.  In the event of termination by Purchaser or the
Company in accordance with Section 9.1, the
terminating party will promptly give written notice of such termination to the
other party hereto, and this Agreement will terminate, and the Transactions will
be abandoned, without further action by Purchaser or the Company.




9.3        Effect of
Termination.  In the event that this Agreement is validly
terminated as provided in this Article IX, each of the parties hereto will be
relieved of its duties and obligations arising under this Agreement after the
date of such termination and such termination will be without liability to
Purchaser or the Company; provided, however, that (a) the obligations of the
parties set forth in Section 6.1 and
Article X will survive any such termination and will continue to be enforceable,
and (b) nothing in this Section 9.3 will
relieve a party hereto of any liability for a breach of this Agreement before
the effective date of such termination.




ARTICLE
X




GENERAL




10.1      Usage .  All
terms defined herein have the meanings assigned to them herein for all purposes,
and such meanings are equally applicable to both the singular and plural forms
of the terms defined.  “Include,” “includes” and “including” shall be
deemed to be followed by “without limitation” whether or not they are, in fact,
followed by such words or words of like import.  “Writing,” “written”
and comparable terms refer to printing, typing, lithography and other means of
reproducing words in a visible form.  Any instrument or law defined or
referred to herein means such instrument or law as from time to time amended,
modified or supplemented, including (in the case of instruments) by waiver or
consent and (in the case of any law) by succession of comparable successor laws
and includes (in the case of instruments) references to all attachments thereto
and instruments incorporated therein.  References to a Person are,
unless the context otherwise requires, also to its successors and
assigns.  Any term defined herein by reference to any instrument or
law has such meaning whether or not such instrument or law is in
effect.  References in an instrument to “Article,” “Section” or
another subdivision or to an attachment are, unless the context otherwise
requires, to an article, section or subdivision of or an attachment to such
instrument.  References to any gender include, unless the context
otherwise requires, references to all genders, and references to the singular
include, unless the context otherwise requires, references to the plural and
vice versa.


32


10.2      Survival .  Subject
to Article VIII, the respective representations and warranties of Purchaser,
Merger Subsidiary, Parent and the Company contained herein or in any
certificates or other documents delivered prior to or as of the Effective Time
shall survive until the date that is 180 days after the first anniversary of the
Closing Date; provided,
however, that the Fundamental Representations and shall survive
perpetually, and the representations and warranties set forth in Section 4.10
(Environmental), Section 4.14
(Compliance with Law, etc.), Section 4.17 (Tax)
and Section
4.19 (Employee Benefit Plans) shall survive for the applicable statute of
limitations.  Subject to Article VIII, the covenants and agreements of
the parties hereto (including the Surviving Corporation after the Merger) shall
survive the Effective Time without limitation (except for those which, by their
terms, contemplate a shorter survival period).




10.3      Costs and
Expenses .  Each
party hereto shall bear its own costs and expenses in connection with this
Agreement and the Transactions including, without limitation, all legal,
accounting, financial advisory, consulting and all other fees and expenses of
third parties, whether or not the Transactions are consummated; provided, however, that
Parent shall pay for all Company expenses related thereto.




10.4      Governing
Law .  This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule that would cause the application of the laws of any
jurisdiction other than the State of New York.




10.5      Consent to
Jurisdiction .  Each
party hereto irrevocably submits to the exclusive jurisdiction of any state or
federal court located within the County of New York in the State of
New York for the purposes of any suit, action or other proceeding arising
out of this Agreement or any transaction contemplated hereby, and agrees to
commence any such action, suit or proceeding only in such
courts.  Each party hereto further agrees that service of any process,
summons, notice or document by United States registered mail to such party’s
respective address set forth herein shall be effective service of process for
any such action, suit or proceeding.  Each party hereto irrevocably
and unconditionally waives any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the Transactions in such
courts, and hereby irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient
forum.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
TRANSACTIONS OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF.




10.6      Successors and
Assigns .  This
Agreement may not be assigned by any party hereto without the prior written
consent of the other parties.  Subject to the foregoing, all of the
terms and provisions of this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns.


33


10.7      Notices .  Any
notice or other communication hereunder must be given in writing and shall be
deemed delivered (a) upon delivery if sent by facsimile transmission (confirmed
by any of the methods that follow in clauses (b) or (c) hereof), (b) upon
delivery if sent by overnight courier service (with proof of service) or hand
delivery and (c) three days after mailing by certified or registered mail
(return receipt requested and first-class postage prepaid) and addressed as
follows:




If to
Parent,


the
      Company, or:
            TS
      Staffing Corp.


Diamond
      Staffing
            160
      Broadway, 15th
      Floor


New
      York, NY  10038


Attention:  Jay
      Schecter


Telecopier
      No.:  (212) 346-9601


Telephone
      No.:  (212) 346-7960





with
      copies to:
            Bryan
      Cave LLP


1290
      Avenue of the Americas


New
      York, NY  10104


Attention:  Kenneth
      L. Henderson


Telecopier
      No.:  (212) 541-1357


Telephone
      No.:  (212) 541-2000




If to
Purchaser or


Merger
      Subsidiary:
            Corporate
      Resource Services, Inc.


160
      Broadway, 11th
      Floor


New
      York, NY  10038


Attention:  Jay
      Schecter


Telecopier
      No.:  (212) 346-9601


Telephone
      No.:  (212) 346-7960




with
      copies to:
            Corporate
      Resource Services, Inc.


160
      Broadway, 11th
      Floor


New
      York, NY  10038


Attention:  General
      Counsel


Telecopier
      No.:  (212) 346-9601


Telephone
      No.:  (212) 346-7960




or to
such other address as any party shall specify by written notice so given, and
such notice shall be deemed to have been delivered as of the date
received.




10.8      Severability .  If
any provision of this Agreement is determined to be invalid, illegal or
unenforceable by any Governmental Entity, the remaining provisions of this
Agreement to the extent permitted by law shall remain in full force and effect
provided that the essential terms and conditions of this Agreement for the
parties hereto remain valid, binding and enforceable and provided that the
economic and legal substance of the Transactions is not affected in any manner
materially adverse to any party hereto.  In event of any such
determination, the parties hereto agree to negotiate in good faith to modify
this Agreement to fulfill as closely as possible the original intents and
purposes hereof.  To the extent permitted by law, the parties hereto
hereby to the same extent waive any provision of law that renders any provision
hereof prohibited or unenforceable in any respect.


34


10.9      Representation by Counsel;
No Inferences .  The
parties hereto each acknowledge that each party has been represented by counsel
in connection with this Agreement and the Transactions.  Accordingly,
any rule of law or any legal decision that would require interpretation of any
claimed ambiguities in any portions of this Agreement against the party that
drafted it has no application and is expressly waived.  If any
provision of this Agreement is, in the judgment of the trier of fact, ambiguous
or unclear, that provision shall be interpreted in a reasonable manner to effect
the intent of the parties.




10.10    Divisions and
Headings .  The
divisions of this Agreement into sections and subsections and the use of
captions and headings in connection therewith are solely for convenience and
shall have no legal effect in construing the provisions of this
Agreement.




10.11    No Third-party
Beneficiaries .  Nothing
in this Agreement, express or implied, is intended to confer upon any other
Person any rights or remedies of any nature whatsoever under or by reason of
this Agreement other than the Indemnified Officers and Directors, to the extent
set forth in Section
6.5 (which Section 6.5 is
intended for the benefit of such persons covered thereby and may be enforced by
such persons).  Nothing in this Agreement is intended to relieve or
discharge the obligation of any third person to any party to this
Agreement.




10.12    Amendment and
Waiver .  This
Agreement and any disclosure schedule or Exhibit attached hereto may be amended
only by agreement in writing of all parties hereto.  No waiver of any
provision nor consent to any exception to the terms of this Agreement or any
agreement contemplated hereby shall be effective unless in writing and signed by
the party hereto to be bound and then only to the specific purpose, extent and
instance so provided.  No failure on the part of any party hereto to
exercise or delay in exercising any right hereunder shall be deemed a waiver
thereof, nor shall any single or partial exercise preclude any further or other
exercise of such or any other right.




10.13    Knowledge .  Whenever
any statement herein or in any disclosure schedule, Exhibit, certificate or
other document delivered to any party pursuant to this Agreement is made “to its
knowledge” or words of similar intent or effect of any party or its
representative, the Person making such statement shall be accountable only for
facts and other information, which as of the date the representation is given,
are actually known or could be known upon a reasonable investigation by the
Person making such statement, which with respect to any Persons that are
corporations, means the knowledge of its executive officers.




10.14    Schedules .  Each
disclosure schedule delivered pursuant to the terms of this Agreement shall be
in writing and shall constitute a part of this Agreement, although the
disclosure schedules need not be attached to each copy of this
Agreement.  The mere inclusion of an item in a disclosure schedule as
an exception to a representation or warranty shall not be deemed an admission by
the Company that such item represents an exception or material fact, event or
circumstance or that such item has or may have a Company Material Adverse
Effect.  Further, any fact or item which is clearly disclosed in any
Section of the disclosure schedule in such a way as to make its relevance or
applicability to information called for by another Section of the disclosure
schedule or other Sections of the disclosure schedule reasonably apparent shall
be deemed to be disclosed on such other Section or Sections, as the case may be,
notwithstanding the omission of a reference or cross-reference
thereto.


35


10.15    Counterparts .  This
Agreement and any amendment hereto or any other agreement (or document)
delivered pursuant hereto may be executed in one or more counterparts and by
different parties in separate counterparts.  All of such counterparts
shall constitute one and the same agreement (or other document) and shall become
effective (unless otherwise provided therein) when one or more counterparts have
been signed by each party and delivered to the other party.  The
exchange of a fully executed Agreement (in counterparts or otherwise) and any
amendment hereto or any other agreement (or document) delivered pursuant hereto
by fax or email transmission shall be sufficient to the bind the parties to the
terms and conditions of this Agreement and any amendment hereto or any other
agreement (or document) delivered pursuant hereto.




10.16    Entire
Agreement .  This
Agreement (including the disclosure schedules hereto, which are incorporated
herein by reference and made a part hereof) and the Transaction Documents
constitute the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes any prior understandings, agreements or
representations by or between the parties hereto, written or oral, with respect
to such subject matter.




[SIGNATURE
PAGE TO FOLLOW]


36


IN
WITNESS WHERE OF, the parties hereto have caused this Agreement to be executed
in multiple originals by their authorized officers, all as of the date and year
first above written.




CORPORATE
      RESOURCE SERVICES, INC.By:
                              /s/  John P.
    MessinaName:
      John P. MessinaTitle:  
      PresidentDIAMOND
      STAFFING SERVICES, INC.By:
                              /s/  John P.
    MessinaName:
      John P. MessinaTitle:  
      PresidentTS
      STAFFING CORP.By:
                              /s/ Robert CasseraName:
      Robert CasseraTitle:  
      PresidentTRI-DIAMOND
      STAFFING INC.By:
                              /s/ Robert CasseraName:
      Robert CasseraTitle:  
      President


[Signature
Page to Agreement and Plan of Merger]




DIAMOND
      STAFFING, INC.By:
                /s/  Robert
    CasseraName:
      Robert CasseraTitle:  
      President
  [Signature
Page to Agreement and Plan of Merger]