Exhibit
10.3
  EXECUTION
VERSION




FORECLOSURE
AND ASSET PURCHASE AGREEMENT




by
and among





Rosenthal
& Rosenthal, Inc.,


as
Secured Party Seller,




GT
Systems Inc.


and


GT’s
Operating Affiliates Party Hereto,


as
Borrowers and Obligors,





Eric
Goldstein,


as
an Obligor,





Corporate
Resource Development Inc.


as
Buyer, and




Corporate
Resource Services, Inc.


and


Tri-State
Employment Services, Inc.,




as
Guarantors




Dated as
of March 24, 2010












Table of
Contents




PageARTICLE
      I OBLIGORS’ ACKNOWLEDGEMENTS, AGREEMENTS AND WAIVERS
            
            3Section
      1.1
            
            Acknowledgment
      of Factual Matters
            
            3Section
      1.2
            
            Disposition
      of Purchased Assets
            
            3Section
      1.3
            
            Deficiency;
      Surplus
            
            3Section
      1.4
            
            Waiver
      of Notice and Right to Redeem
            
            4Section
      1.5
            
            Liabilities
      and Liens Remain Outstanding
            
            4Section
      1.6
            
            Separate
      Entities; No Agency Relationship
            
            4ARTICLE
      II PURCHASE AND SALE OF ASSETS
            
            5Section
      2.1
            
            Purchase
      and Sale of Assets
            
            5Section
      2.2
            
            Excluded
      Assets
            
            6Section
      2.3
            
            Assumed
      Liabilities
            
            7Section
      2.4
            
            Excluded
      Liabilities
            
            7Section
      2.5
            
            Purchase
      Price
            
            7Section
      2.6
            
            Closing
      Transactions
            
            9Section
      2.7
            
            Allocations
            
            9Section
      2.8
            
            Non-Assignable
      Assets
            
            10ARTICLE
      III REPRESENTATIONS AND WARRANTIES OF OBLIGORS
            
            10Section
      3.1
            
            Organization
      and Qualification; Subsidiaries; Operating Affiliates
            
            10Section
      3.2
            
            Authority
      Relative to this Agreement and Related Matters
            
            11Section
      3.3
            
            Borrower
      Organizational Documents
            
            11Section
      3.4
            
            No
      Conflict; Required Filings and Consents
            
            11Section
      3.5
            
            Financial
      Statements; Undisclosed Liabilities; Absence of Certain
      Changes
            
            12Section
      3.6
            
            Absence
      of Litigation
            
            13Section
      3.7
            
            Employee
      Benefit Plans
            
            13Section
      3.8
            
            Permits
            
            14Section
      3.9
            
            Purchased
      Assets; Business
            
            14Section
      3.10
            
            Assumed
      Contracts
            
            14Section
      3.11
            
            Compliance
      with Laws
            
            15Section
      3.12
            
            Labor
      Matters
            
            15Section
      3.13
            
            Tax
      Matters
            
            15Section
      3.14
            
            Brokers
            
            15Section
      3.15
            
            Intellectual
      Property
            
            16Section
      3.16
            
            Operation
      of Business
            
            16Section
      3.17
            
            Sound
      Business Judgment
            
            16Section
      3.18
            
            Lack
      of Collusion; Arm’s Length Transaction
            
            17Section
      3.19
            
            Bulk
      Sales
            
            17ARTICLE
      IV ROSENTHAL’S LIMITED WARRANTIES; LIMITATIONS OF DAMAGES
            
            17Section
      4.1
            
            Organization;
      Authority Relative to this Agreement
            
            17Section
      4.2
            
            No
      Conflict; Required Filings and Consents
            
            18Section
      4.3
            
            Absence
      of Litigation
            
            18




i




Table
of Contents






PageSection
      4.4
            
            Holder
      of Loan Documents
            
            18Section
      4.5
            
            No
      Subordination
            
            18Section
      4.6
            
            Brokers
            
            18Section
      4.7
            
            Notice
      of Article 9 Sale
            
            18Section
      4.8
            
            Limitations
      of Damages
            
            19Section
      4.9
            
            Lack
      of Collusion; Arm’s Length Transaction
            
            19ARTICLE
      V REPRESENTATIONS AND WARRANTIES OF BUYER AND GUARANTORS
            
            19Section
      5.1
            
            Organization;
      Authority Relative to this Agreement
            
            20Section
      5.2
            
            No
      Conflict; Required Filings and Consents
            
            20Section
      5.3
            
            Absence
      of Litigation
            
            20Section
      5.4
            
            Brokers
            
            20ARTICLE
      VI COVENANTS OF OBLIGORS
            
            21Section
      6.1
            
            Conduct
      of Business by Obligors Pending the Closing
            
            21Section
      6.2
            
            Notification
      of Certain Events
            
            22Section
      6.3
            
            Non-Competition;
      Non-Solicitation
            
            22Section
      6.4
            
            Name
      Change
            
            24Section
      6.5
            
            Payments
      to Employees
            
            24ARTICLE
      VII COVENANTS OF BUYER AND ROSENTHAL
            
            24Section
      7.1
            
            Representations
      and Warranties
            
            24Section
      7.2
            
            Notification
      of Certain Events
            
            25Section
      7.3
            
            Reimbursement
      of Costs; Post-Closing Assistance
            
            25Section
      7.4
            
            Access
      to Business Records
            
            26ARTICLE
      VIII ADDITIONAL AGREEMENTS OF THE PARTIES
            
            26Section
      8.1
            
            Access
      to Information
            
            26Section
      8.2
            
            Commercially
      Reasonable Efforts; Further Assurances
            
            26Section
      8.3
            
            Public
      Announcements
            
            27Section
      8.4
            
            Transfer
      Taxes
            
            27Section
      8.5
            
            Release
      of Security Interests
            
            27Section
      8.6
            
            Release
      by Obligors
            
            27Section
      8.7
            
            Consents
            
            28Section
      8.8
            
            No
      Solicitation
            
            28ARTICLE
      IX CONDITIONS TO THE CLOSING
            
            28Section
      9.1
            
            Conditions
      to Obligations of Each Party
            
            28Section
      9.2
            
            Additional
      Conditions to Obligations of Buyer
            
            28Section
      9.3
            
            Additional
      Conditions to Obligations of Rosenthal
            
            30ARTICLE
      X TERMINATION
            
            31Section
      10.1
            
            Termination
            
            31Section
      10.2
            
            Effect
      of Termination
            
            32




ii




Table
of Contents






PageARTICLE
      XI INDEMNIFICATION PROVISIONS
            
            32Section
      11.1
            
            Borrowers’
      Indemnification Obligation
            
            32Section
      11.2
            
            Rosenthal’s
      Indemnification Obligation
            
            33Section
      11.3
            
            Buyer’s
      Indemnification Obligation
            
            33Section
      11.4
            
            Procedures
      for Indemnification for Third Party Claims
            
            33Section
      11.5
            
            Indemnification
      Limitations
            
            35Section
      11.6
            
            Exclusive
      Remedy
            
            36ARTICLE
      XII GENERAL PROVISIONS
            
            36Section
      12.1
            
            Survival
      of Representations and Warranties; Disclosure
            
            36Section
      12.2
            
            Notices
            
            37Section
      12.3
            
            Headings
            
            38Section
      12.4
            
            Entire
      Agreement
            
            38Section
      12.5
            
            Assignment;
      Parties in Interest
            
            38Section
      12.6
            
            Governing
      Law; Consent to Jurisdiction
            
            38Section
      12.7
            
            Counterparts
            
            39Section
      12.8
            
            Severability
            
            39Section
      12.9
            
            Specific
      Performance
            
            39Section
      12.10
            
            Fees
      and Expenses
            
            39Section
      12.11
            
            Amendment
            
            40Section
      12.12
            
            Waiver
            
            40Section
      12.13
            
            Guaranty
            
            40ARTICLE
      XIII CERTAIN DEFINITIONS
            
            41Exhibit
      A
            
            Form
      of Bill of SaleExhibit
      B
            
            Purchase
      Price AllocationExhibit
      C
            
            Intentionally
      Left BlankExhibit
      D
            
            Form
      of Article 9 Sale NoticeExhibit
      E
            
            List
      of Persons to Whom Article 9 Sale Notice Was SentExhibit
      F
            
            Form
      of Service and Collections AgreementExhibit
      G
            
            Form
      of Consulting Agreement for Eric GoldsteinExhibit
      H
            
            Form
      of Legal Opinion to Buyer from Obligors’ CounselExhibit
      I
            
            Form
      of Assignment and Assumption Agreement - Light IndustrialExhibit
      J
            
            Form
      of Amended and Restated Service Agreement - Light
    IndustrialExhibit
      K
            
            Form
      of Assignment of Domain NamesExhibit
      L
            
            Form
      of Assignment of Trade NamesObligor
      Disclosure ScheduleBuyer
      Disclosure ScheduleRosenthal
      Disclosure Schedule





iii


FORECLOSURE
AND ASSET PURCHASE AGREEMENT




FORECLOSURE AND ASSET PURCHASE
AGREEMENT(this “Agreement”), dated as
of March 24, 2010 (the “Execution Date”), by
and among Rosenthal & Rosenthal, Inc., a New York corporation (“Rosenthal”), GT
Systems Inc., a New York corporation (“GT”), Eric Goldstein
(“Mr.
Goldstein”), GT’s operating affiliates party hereto (collectively, the
“Operating
Affiliates”, and together with GT, collectively, “Borrowers” and each,
individually, a “Borrower”, and
together with Mr. Goldstein, the “Obligors” and each,
individually, an “Obligor”), Corporate
Resource Development Inc., a Delaware Corporation (“Buyer”),  Corporate
Resource Services, Inc. (“CRS”) and Tri-State
Employment Services, Inc. (“Tri-State” and
together with CRS, “Guarantors”).  Obligors,
Rosenthal, Buyer and Guarantors are referred to collectively herein as the
“Parties.”




WHEREAS, Borrowers and
Rosenthal are parties to that Loan and Security Agreement, dated as of September
11, 2007, as amended, supplemented, assumed or otherwise modified from time to
time (the “2007 Loan
Agreement”);




WHEREAS, pursuant to the 2007
Loan Agreement and subject to the terms and conditions therein, Rosenthal agreed
to make revolving loans to Borrowers in the original principal amount of up to
$27,000,000 (the “Revolver Loans”) and
to make a term loan to Borrowers in the original principal amount of $5,000,000
(the “Term
Loan” and together with the Revolver Loans, the “Loans”).  The
Loans are secured by all of the assets of Borrowers and are guaranteed by (i)
Mr. Goldstein, as the sole owner of each Borrower, which guarantee is secured by
a security interest in certain of Mr. Goldstein’s assets, including, among other
things, a cooperative apartment located at 866 Fifth Avenue, New York, New York
10065, and (ii) Iris Goldstein pursuant to a guaranty limited to her interest in
such cooperative apartment;




WHEREAS, there have occurred
and continue to exist Events of Default under the 2007 Loan Agreement (as such
term is defined therein), including, but not limited to, those set forth in that
certain Amendment No. 2 and Forbearance Agreement (the “Forbearance
Agreement”), dated as of December 19, 2008, among Borrowers and Rosenthal
and the letter from Rosenthal to Borrowers dated August 10, 2009 (the “Reservation of Rights
Letter”) and the following additional Events of Default, among others,
subsequent to the delivery of the Reservation of Rights Letter and prior to the
date hereof: the continued existences of Over-advances (as defined in the 2007
Loan Agreement) above any amounts agreed to by Rosenthal, and Borrowers’
violation of the Tangible Net Worth covenant and Working Capital covenant (each
as defined in the 2007 Loan Agreement) for the fiscal quarters ended June 30,
2009 and September 30, 2009 (collectively, the “Designated Events of
Default”);




WHEREAS, as of March 3, 2010,
the outstanding principal amount of, and accrued but unpaid interest on, and
bank fees and expenses on, the indebtedness evidenced by the Loans is
approximately $15,885,152;




WHEREAS, each Obligor agrees
that all of the Obligations (as defined in the 2007 Loan Agreement) to Rosenthal
are secured by a properly perfected, first priority lien on the Collateral (as
defined in the 2007 Loan Agreement);




1




WHEREAS, by reason of the
expiration of the Forbearance Agreement and the existence of the Designated
Events of Default, Rosenthal presently has the right to (i) declare all of the
Loans and other Obligations to be immediately due and payable, (ii) terminate
the right of Borrowers to receive any further advance of the Loans, (iii)
terminate the 2007 Loan Agreement, and (iv) realize upon, and exercise its
rights with respect to, the Collateral pursuant to the 2007 Loan Agreement and
the accompanying loan documents and as otherwise provided by applicable law, in
addition to all other rights and remedies provided in the loan documents or
available at law or in equity (such rights being called, collectively, the
“Lender
Rights”).  Further, in addition to any action heretofore taken
by Rosenthal, the existing Designated Events of Default permitted Rosenthal to
immediately exercise any and all rights and remedies provided in the Loan
Documents (as defined hereinafter) and pursuant to applicable law to collect the
Obligations and take actions to foreclose, sell and collect the Subject
Collateral (as defined hereinafter);




WHEREAS, each Obligor agrees
that Rosenthal may enforce its rights as a secured creditor after default,
including, without limitation, by selling all of Borrowers’ right, title and
interest in and to any or all of the tangible and intangible assets subject to
Rosenthal’s liens (collectively, the “Subject Collateral”),
and further acknowledges and agrees that the anticipated outcome of such steps
would be the partial reimbursement of the Obligations owed to
Rosenthal;




WHEREAS, the Parties
acknowledge and agree that under the terms and conditions set forth herein, each
Obligor will maintain control over its business and operations until the Closing
Date, it being understood and agreed that on the Closing Date each Obligor will
relinquish dominion and control over the Purchased Assets (as defined
hereinafter) to Buyer;




WHEREAS, the Parties
acknowledge and agree that the continued conduct of the business and operations
of the Borrowers with respect to the Purchased Assets would not generate a
benefit for creditors;




WHEREAS, Obligors have been
provided with sufficient time and opportunity to consult with attorneys,
appraisers and accountants of their choice to obtain advice regarding this
Agreement and the value of the Collateral;




WHEREAS, Rosenthal has asked
Obligors and each Obligor has agreed, to surrender possession of the Subject
Collateral solely for the purpose of effecting a private sale, and Buyer desires
to purchase certain of the Subject Collateral on the terms and subject to the
conditions set forth herein; and




WHEREAS, Rosenthal, Obligors
and Buyer desire to enter into this Agreement to memorialize their agreement as
to Rosenthal’s collection and other disposition of the Subject Collateral
pursuant to Article 9 (“Article 9”) of the
UCC (as hereinafter defined) in a secured creditor’s private sale and Buyer’s
purchase thereof and related matters.




NOW, THEREFORE, in
consideration of the foregoing, of the mutual covenants and agreements herein
contained and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the Parties hereby agree as follows:




2




ARTICLE
I




OBLIGORS’ ACKNOWLEDGEMENTS,
AGREEMENTS AND WAIVERS




Section
1.1 Acknowledgment of
Factual Matters




Each
Obligor acknowledges and confirms the truth and accuracy of the recitals set
forth in the recital paragraphs of this Agreement.  Without limiting
the generality of the immediately preceding sentence, each Obligor acknowledges
and confirms: (i) the existence of the Designated Events of Default and (ii)
that, by reason of the Designated Events of Default, Rosenthal presently has the
right to exercise the Lender Rights.  Further, each Obligor
acknowledges and confirms that, on Rosenthal’s demand, Rosenthal is entitled to
exercise any or all of the Lender Rights and thereupon all of the Obligations
will be immediately due and payable to Rosenthal in full, without offset,
defense, recoupment or counterclaim, and that no Obligor has any claim or
defense of any kind, by way of offset or otherwise, to the payment and
performance of all of the Obligations.  Obligors, jointly and
severally, absolutely and unconditionally promise to pay and perform all
Obligations.




Section
1.2 Disposition of
Purchased Assets




Each
Obligor hereby consents and authorizes Rosenthal to commence immediately all
actions that Rosenthal considers in its sole judgment to be necessary or
desirable to effectuate a foreclosure of the Purchased Assets.  For
purposes of this Agreement, “foreclosure” includes, without limitation,
Rosenthal’s exercise of its rights in the Purchased Assets as collateral as a
secured party after the debtors’ default, sending notice to certain parties in
accordance with the UCC, including, without limitation, the debtors, certain
other creditors of the debtors, and other parties identified by Obligors who
have expressed interest in acquiring the Purchased Assets, of Rosenthal’s
intention to sell the Purchased Assets at a private sale pursuant to Article 9
under this Agreement (“Article 9 Sale”) and
selling the Purchased Assets at such Article 9 Sale; for the avoidance of doubt,
“foreclosure” shall not mean a judicial sale of the Purchased
Assets.  Each Obligor hereby consents to the foreclosure and
disposition of the Purchased Assets to be made by Rosenthal to Buyer pursuant to
this Agreement or such other agreement providing for the sale of the Purchased
Assets, and each Obligor represents, warrants and covenants that every aspect of
Rosenthal’s disposition of the Purchased Assets at a private sale pursuant to
this Agreement, including the method, manner, time, place and other terms, are
commercially reasonable.  Rosenthal is not, pursuant to the terms of
this Agreement, taking possession of any of the Purchased Assets, and each
Obligor will continue to have dominion and control over the Purchased Assets in
its possession until the Closing Date.  On the Closing Date, each
Obligor will be deemed to have irrevocably abandoned and surrendered to Buyer
all possession of, dominion and control over, all rights to collect, and all
other rights to the sold or otherwise transferred Purchased Assets, and
Rosenthal will be deemed to have irrevocably abandoned and surrendered any
security interest, lien, other encumbrance, claim or right to Borrowers’ right,
title and interest in the Purchased Assets.




Section
1.3 Deficiency;
Surplus




The
proceeds of the sale of the Purchased Assets pursuant to this Agreement or any
other foreclosure, sale, collection or other disposition of the remaining
Subject Collateral shall be applied to repay the Obligations to
Rosenthal.  To the extent that the proceeds of the sale of the
Purchased Assets pursuant to this Agreement or any other foreclosure, sale,
collection, or other disposition of the remaining Subject Collateral are
insufficient to fully repay the Obligations to Rosenthal, each Obligor
acknowledges and agrees that it or he will be jointly and severally responsible
for any such deficiency.  To the extent all Obligations have been
fully and completely paid and satisfied, Rosenthal agrees that any portion of
the Purchase Price in excess of the Obligations shall be transferred and turned
over to the Designated Obligor.




3




Section
1.4 Waiver of Notice
and Right to Redeem




Each
Obligor’s agreement to enter into this Agreement is voluntary and has not been
induced by coercion of any type.  Each Obligor irrevocably waives any
right to redeem all or any of the Subject Collateral under the UCC or any other
applicable law.  Notwithstanding anything to the contrary in this
Agreement, each Obligor irrevocably waives any right to further notice of any
sale or other disposition of the Subject Collateral under Section 9-611 of the
UCC or otherwise.  In addition, no authorizations and consents under
this Agreement shall constitute Rosenthal’s retention of the Subject Collateral
in satisfaction of the Obligations under Section 9-620 of the UCC and,
therefore, such authorizations and consents under this Agreement will not
extinguish any deficiency hereafter owing by any Obligor with respect to the
Obligations.




Section
1.5 Liabilities and
Liens Remain Outstanding




Rosenthal
and Obligors specifically acknowledge and agree that the Loans and other
Obligations shall remain outstanding, and Rosenthal does not release any, but
instead specifically reserves all, security interests, liens and other
encumbrances and rights, including, without limitation, Lender Rights, relating
thereto, in all assets and collateral described in the Loan Documents which are
not included in the Purchased Assets and not sold to Buyer pursuant to this
Agreement, including, without limitation, all of the Excluded
Assets.




Section
1.6 Separate Entities;
No Agency Relationship




Rosenthal
is not, and is not to be construed or deemed to be, a successor of any Obligor,
it being understood and agreed that Rosenthal shall not and does not by virtue
of this Agreement or Obligors’ authorizations and consents under this Agreement,
assume or agree to assume any liability whatsoever of any Obligor, nor does
Rosenthal assume or agree to assume any obligation of any Obligor under any
lease, contract, agreement, or any other document to which any Obligor is a
party, by which each Obligor is or may be bound, or which in any manner affects
the Subject Collateral, including the Purchased Assets, or any part
thereof.  In exercising its rights under this Agreement and the other
Loan Documents, Rosenthal is not acting as the agent of any Obligor, Buyer or
the Guarantors and does not assume and will not be deemed to have assumed any
agency obligation toward, or relationship of agency or trust with or for, any
Obligor, Buyer or the Guarantors.




4




ARTICLE
II




PURCHASE AND SALE OF
ASSETS




Section
2.1 Purchase and Sale
of Assets




On and
subject to the terms and conditions of this Agreement, at the Closing, Rosenthal
shall, in a secured creditor’s Article 9 Sale, sell, assign, transfer, convey
and deliver to Buyer, and Buyer shall, in a secured creditor’s Article 9 Sale,
purchase and acquire from Rosenthal, free and clear of all Encumbrances, other
than Assumed Liabilities, all of Borrowers’ right, title and interest, as of the
Closing, in and to the following assets, properties and rights that are used in
connection with the Business as currently conducted by Borrowers (collectively,
the “Purchased
Assets”):




(a) all
fixed assets, including, without limitation, all fixtures, furniture,
furnishings, equipment, products, tools, programs, communications equipment,
accessories, computers, computer hardware and peripheral devices, office and
other equipment and appliances, any replacement and spare parts for any such
assets, and all software embedded therein and all manuals, instruction booklets,
forms, guides, written warranties, bills of sales, other documents of
conveyances and other materials used in connection therewith or related thereto
(collectively, the “Fixed Assets”),
including without limitation, all material Fixed Assets listed in Section 2.1(a) of the
Obligor Disclosure Schedule;




(b) all
contact information (including the name, phone number and address), resumes and
records relating to all individuals (which are listed in Section 2.1(b) of the
Obligor Disclosure Schedule) that serve as temporary employees and shift workers
for clients and customers of Borrowers (other than in the Excluded Industries)
(such individuals are collectively referred to herein as the “Employee
Assets”);




(c) all
books, records, files and papers (“Business Records”),
other than Business Records related exclusively to the Excluded Industries, that
contain information relating, directly or indirectly, to the Business or the
Purchased Assets, including without limitation, all client and customer lists
and information relating to Borrowers’ personnel and in place
workforce.  To the extent any Business Records are in computer format,
Borrowers will, in their sole and absolute discretion, either provide hard
copies or file transfers of such Business Records to Buyer;




(d) all
written contracts and agreements of Borrowers related to the Business listed in
Section 2.1(d)
of the Obligor Disclosure Schedule (the “Assumed Contracts”)
to the extent the required Consents related to the Assumed Contracts are
obtained on or prior to the Closing Date;




(e) all
deposits held for the account or benefit of Borrowers under the Assumed
Contracts;




(f) all
Intellectual Property listed in Section 2.1(f) of the
Obligor Disclosure Schedule;




(g) all
Permits listed in Section 2.1(g) of the
Obligor Disclosure Schedule, to the extent transferable; and




5




(h) all
of the goodwill relating to the Business or any of the Purchased Assets, other
than goodwill related exclusively to the Excluded Industries.




Section
2.2 Excluded
Assets




Notwithstanding
anything to the contrary herein, Buyer shall not purchase from Rosenthal or
Borrowers, any assets, properties and rights that are not included among the
Purchased Assets (collectively, the “Excluded Assets”),
including, without limitation:




(a) any
assets, properties and rights, including receivables, Business Records and
goodwill, related to the Excluded Industries (for the avoidance of any doubt,
Buyer is not purchasing the membership interests of ICG or the assets of
ICG);




(b) any
cash and cash equivalents other than deposits described in Section 2.1(e),
including checks received pending collection as of the close of business on the
Closing Date, notes, bank deposits, certificates of deposit and marketable
securities;




(c) any
receivables arising from the operation of the Business and services performed in
connection with the Business prior to the Closing Date (whether or not billed or
invoiced prior to the Closing Date), including, without limitation, all
receivables with respect to permanent placement of employees (i) placed with or
introduced to a prospective employer prior to Closing Date, and (ii) employed on
a permanent basis with such prospective employer, whether or not prior to
Closing Date;




(d) any
deposits and cash collateral relating to Borrowers’ worker’s compensation
insurance programs and any interest of Borrowers in Segregated Portfolio 132, a
segregated portfolio of Caledonian Indemnity SPC, a Cayman Islands segregated
portfolio company (“Segregated”);




(e) any
contracts and agreements, whether written or oral, other than the Assumed
Contracts; provided, however, that in the
event that the required Consents related to the Assumed Contracts are not
obtained on or prior to the Closing Date, then the Assumed Contract for which
such consent has not been obtained prior to the Closing Date shall be deemed an
Excluded Asset hereunder;




(f) the
Purchase Price to be paid to Rosenthal by Buyer pursuant to this Agreement and
any rights of Rosenthal under this Agreement and any other agreements,
documents, certificates and instruments to be delivered at the Closing pursuant
to Section
2.6(c) hereof;




(g) any
interests in any real estate including any leases;




(h) any
claims, deposits, prepayments, prepaid assets, prepaid expenses, deferred
revenues, refunds, rebates, credits, causes of action, rights of recovery,
rights of setoff and rights of recoupment relating to or arising out of the
ownership or operation of the Business or any of the Purchased Assets prior to
the Closing;




(i) GT’s
corporate name;




6




(j) any
minute books, corporate seals, stock record books and stock transfer records of
Borrowers; and




(k) any
Fixed Assets owned by The Tuttle Agency of Pennsylvania, Inc.




Section
2.3 Assumed
Liabilities




Upon the
terms and subject to the conditions set forth in this Agreement, at the Closing,
Buyer shall assume and pay, honor, perform and discharge when due the following
liabilities and obligations, to the extent arising and relating to the period
after the Closing (collectively, the “Assumed
Liabilities”):




(a) all
liabilities and obligations under the Assumed Contracts for the period after the
Closing if and only if the required Consents related to applicable Assumed
Contracts are obtained on or prior to the Closing Date; and




(b) all
liabilities and obligations with respect to the operation of the Business after
the Closing.




Section
2.4 Excluded
Liabilities




Buyer
shall not assume, and each Obligor shall remain exclusively obligated to
discharge, all liabilities and obligations of Obligors (whether known or
unknown, including but not limited to any liabilities incurred with respect to
the Borrower Employee Plans) other than the Assumed Liabilities (collectively,
the “Excluded
Liabilities”).  Buyer and Obligors each agree that Rosenthal is
not assuming nor shall it be liable for any liabilities and obligations of
Obligors, including, without limitation, any federal, state or local
taxes.




Section
2.5 Purchase
Price




(a) The
purchase price (the “Purchase Price”) paid
by the Buyer for the Purchased Assets shall be the sum of Three Million Dollars
(the “Cash Purchase
Price”) and the CRS Shares, plus the assumption by the Buyer of the
Assumed Liabilities.




(b) Payment of Cash Purchase
Price.




(i) Buyer
has previously paid to Rosenthal, contemporaneously with the execution and
delivery of a letter of intent by CRS, Rosenthal and Obligors dated March 19,
2010, as amended (the “Letter of Intent”),
the sum of Two Hundred Fifty Thousand Dollars ($250,000) (the “Deposit”) and is
paying to Rosenthal in accordance with the Letter of Intent, contemporaneously
with the execution and delivery of this Agreement the additional sum of One
Hundred Fifty Thousand Dollars ($150,000) (the “Signing Deposit”) by
wire transfer of immediately available funds in accordance with the instructions
of Rosenthal.  The Deposit and the Signing Deposit shall be refunded
to Buyer only if the Closing is not effective by April 5, 2010 (or
such later date agreed to by the Parties) for any reason other than
(x) Buyer’s breach of any of its representations, warranties, covenants,
conditions or agreements under this Agreement or (y) Rosenthal’s or the
Obligors’ breach of any of their respective representations, warranties,
covenants, conditions or agreements under this Agreement.  For
avoidance of doubt, if the Closing does not occur by the Outside Date because of
actions taken by Habib Noor, then the Deposit and the Signing Deposit shall be
nonrefundable and retained by Rosenthal, and Rosenthal and the Obligors shall
have no further remedy against the Buyer except in the event Rosenthal or the
Obligors incur Liabilities.




7




(ii) On
or before April 2, 2010, Buyer shall pay Three Hundred Fifty Thousand Dollars
($350,000) (the “Closing Payment”) to
Rosenthal by wire transfer of immediately available funds in accordance with the
instructions of Rosenthal.  The Deposit, the Signing Deposit and the
Closing Payment are collectively referred to in the aggregate as the “Initial
Payment.”




(iii)
Buyer shall pay Rosenthal the balance of the Cash Purchase Price, by wire
transfer of immediately available funds as follows, in accordance with the
instructions of Rosenthal:




(A) Four
(4) quarterly payments (“Quarterly Payments”)
of $250,000 each, with the first payment made on the 3-month anniversary of the
Closing Date and succeeding Quarterly Payments to be made on each of the
6-month, 9-month and 12-month anniversaries of the Closing Date, for total
Quarterly Payments aggregating One Million Dollars ($1,000,000);
and




(B)
Subject to Section
2.5(b)(iv) below, commencing on the one-year anniversary of the Closing
Date, monthly payments (“Gross Sales
Payments”), payable within ten days of the end of each month, equal to
0.75% of the gross sales of the Business (as operated by Buyer following the
Closing Date) for such month attributable to the Purchased Assets and evidenced
by a certificate from Buyer verifying such amount.




(iv)
Maximum Cash Purchase
Price.  Notwithstanding anything in this Section 2.5(b) to the
contrary, in no event shall the Cash Purchase Price exceed $3,000,000 in the
aggregate.  Consequently, the Gross Sales Payments shall be reduced
and/or terminate once Rosenthal has received $3,000,000 in the
aggregate.  By way of example only, if on any date on which a Gross
Sales Payment is payable to Rosenthal, Buyer has already paid to Rosenthal a
total of $2,950,000 (the Initial Payment of $750,000, four Quarterly Payments
totaling $1,000,000 and Gross Sales Payments totaling $1,200,000), and if on
such date the Gross Sales Payment calculated under Section
2.5(b)(iii)(B) would have been $200,000, such Gross Sales Payment shall
nevertheless be limited to $50,000, bringing the total Cash Purchase Price to
$3,000,000, and after payment thereof the Cash Purchase Price shall have been
paid in full and no further Gross Sales Payments shall be required.




(v) On
the third anniversary of the Closing Date, any portion of the Cash Purchase
Price outstanding shall be due and payable by Buyer to Rosenthal by wire
transfer of immediately available funds in accordance with the instructions of
Rosenthal.




(vi) If
Rosenthal notifies Buyer in writing that all Obligations under the 2007 Loan
Agreement have been fully paid and satisfied, any payments of the Cash Purchase
Price following such notification shall be made to the Designated
Obligor.  In such event any reference in this Agreement to payments to
Rosenthal shall be deemed payments to the Designated
Obligor.  Rosenthal shall, within five (5) Business Days from the date
that all such Obligations have been fully paid and satisfied, notify Buyer in
writing (with a copy sent to GT and Mr. Goldstein) of such event.




8




Section
2.6 Closing
Transactions




(a) Closing.  Unless
this Agreement shall have been terminated in accordance with Section 10.1, and
subject to the satisfaction or, if permissible, waiver of the conditions set
forth in Article
IX, the closing and effectiveness of the Transactions (the “Closing”) will take
place at 10:00 a.m., New York City time, on a date to be specified by the
Parties (the “Closing
Date”), which shall be not later than the second Business Day after the
satisfaction or, if permissible, waiver of the conditions set forth in Article IX (other
than those that by their terms are to be satisfied or waived at the Closing), at
the offices of Bryan Cave, LLP, 1290 Avenue of the Americas, New York,
NY  10104, unless another time, date or place is agreed to in writing
by the Parties.




(b) Actions and Deliveries by
Rosenthal and Obligors.  At the Closing, Rosenthal and/or
Obligors, as applicable, shall deliver to Buyer:




(i) a
bill of sale substantially in the form of Exhibit A dated the
Closing Date and duly executed by Borrowers and Rosenthal (the “Bill of
Sale”);




(ii) a
list of permanent placements in process as of March 28, 2010, to be delivered by
Obligors;




(iii) a
list of all billed pre-closing receivables as of March 28, 2010, that are
included in the Excluded Assets pursuant to Section 2.2(c);
and




(iv) the
certificates and documents required to be delivered by Rosenthal and/or
Obligors, as applicable, pursuant to Section
9.2.




(c) Actions and Deliveries by
Buyer.  At the Closing, Buyer shall deliver to
Rosenthal:




(i) any
filings or other evidence indicating that any Taxes, fees and charges described
in Section 8.4
that are due on or prior to the Closing Date have been paid by
Buyer;




(ii) the
certificates and documents required to be delivered by Buyer pursuant to Section 9.3;
and




(iii) the
Bill of Sale dated the Closing Date and duly executed by Buyer.




Section
2.7 Allocations




The
Purchase Price shall be allocated among the Purchased Assets in accordance with
Exhibit B
hereto.  Each of Rosenthal and Buyer agrees to complete (and, if
required by law, file) IRS Form 8594 (and any amended Forms 8594) consistently
with such allocation and, if requested by the other Party hereto, to furnish
such Party with a copy of such Form prepared in draft form no less than 45 days
prior to the filing due date of such Form.  Neither Rosenthal nor
Buyer shall file any Return or take a position with any taxing authority or in
connection with any Tax-related Action or audit that is inconsistent with this
Section
2.7.




9




Section
2.8 Non-Assignable
Assets




Notwithstanding
anything in this Agreement to the contrary, to the extent that the assignment of
any contracts or the transfer of any properties or assets requires the consent
of any other Person or Governmental Authority and such consent has not been
obtained, this Agreement shall not constitute an agreement to assign or transfer
any such contracts, properties or assets or any claim, right or benefit arising
thereunder or resulting therefrom if any such attempted assignment or transfer
would constitute a breach or default thereunder or otherwise materially
adversely affect the rights of Buyer thereunder.  If consent to the
assignment or transfer of any such contracts, properties or assets is not
obtained, or if an attempted assignment or transfer thereof in the absence of
such a consent would be ineffective or would materially adversely affect the
rights of Buyer thereunder, then, at Buyer’s request, Obligors shall cooperate
with Buyer in any reasonable arrangement designed to provide to Buyer the
benefits under such contracts, properties or assets; provided that such
cooperation by Obligors shall not cause Obligors to violate any terms of any
such contract or any applicable Law; provided, further, that Buyer
shall assume all of the post-Closing liabilities and obligations of Obligors
under such contracts to the extent to which Buyer receives the post-Closing
benefits thereof.  Notwithstanding the foregoing, nothing in this
Section 2.8
shall require Buyer to waive any condition to Closing contained in Section 9.1 or 9.2 hereof or excuse
Rosenthal or Obligors from making all deliveries required by Section
2.6(b).




ARTICLE
III




REPRESENTATIONS AND
WARRANTIES OF OBLIGORS




Each
Obligor hereby jointly and severally represents and warrants to Rosenthal and
Buyer that as of the date hereof and as of the Closing:




Section
3.1 Organization and
Qualification; Subsidiaries; Operating Affiliates




(a)
Except as set forth in Section 3.1(a)of the
Obligor Disclosure Schedule, each of Borrowers is duly organized, validly
existing and, as applicable, in good standing under the Laws of the jurisdiction
of its organization.  Each of Borrowers has the requisite corporate or
limited liability company power and authority, as the case may be, and authority
to own, operate or lease the properties that it purports to own, operate or
lease and to carry on the Business as it is now being
conducted.  Except as set forth in Section 3.1(a) of the
Obligor Disclosure Schedule, each of Borrowers is in good standing in the
jurisdictions set forth in Section 3.1(a) of the
Obligor Disclosure Schedule, which includes each jurisdiction where the
character of its properties owned, operated or leased or the nature of its
activities makes such qualification necessary, other than those jurisdictions in
which the failure to so qualify or be in good standing would not have an Obligor
Material Adverse Effect.




(b) Section 3.1(b) of the
Obligor Disclosure Schedule sets forth a complete and accurate list, by
Borrower, of the jurisdictions of formation of each Borrower.




(c) Section 3.1(c) of the
Obligor Disclosure Schedule sets forth a complete and accurate list, by Borrower
of each of the jurisdictions in which each such Borrower is qualified to do
business.




10




(d) Section 3.1(d) of the
Obligor Disclosure Schedule sets forth a complete and accurate list, by Borrower
of each state in which each such Borrower does business.




(e) None
of Borrowers has any subsidiaries, except that ICG is owned by The Tuttle Agency
Inc., The Tuttle Agency of New Jersey, Inc., Tuttle Specialty Services Inc. and
Segue Search of New Jersey Inc. and Segregated is a wholly-owned subsidiary of
GT.




(f) All
of the entities necessary for, or that are currently engaged in, the operation
of the Business are Parties to this Agreement.




Section
3.2 Authority Relative
to this Agreement and Related Matters




Each of
the Borrowers has all necessary corporate and limited liability company power
and authority, as the case may be, to enter into this Agreement and the other
agreements and instruments to be delivered by such Borrower pursuant to this
Agreement and to carry out its obligations hereunder and
thereunder.  The execution and delivery by each of the Borrowers of
this Agreement and the consummation by each of the Borrowers of the transactions
contemplated hereby and thereby (the “Transactions”) have
been duly authorized by all necessary corporate or limited liability company
action on its part.  Mr. Goldstein is an individual residing in the
State of New York and has all requisite power, authority and capacity and is
competent to execute and deliver this Agreement and the other agreements and
instruments to be delivered by Mr. Goldstein pursuant to this Agreement and to
perform his obligations hereunder and thereunder and to consummate the
Transactions.  This Agreement has been duly executed and delivered by
each Obligor and, assuming the due authorization, execution and delivery hereof
by Rosenthal and Buyer, constitutes the legal, valid and binding obligation of
the Obligors, enforceable against each Obligor in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at
law).




Section
3.3 Borrower
Organizational Documents




Each of
the Borrowers has heretofore furnished to Buyer true, complete and correct
copies of its certificate of incorporation and by-laws (or similar
organizational documents) or certificate of formation and operating agreement,
if any, (or similar organizational documents), as the case may be (together, the
“Borrower
Organizational Documents”).  Such Borrower Organizational
Documents are in full force and effect and none of Borrowers are in violation in
any respect of any of the provisions of such Borrower Organizational
Documents.




Section
3.4 No Conflict;
Required Filings and Consents




The
execution and delivery of this Agreement by each Obligor do not, and the
consummation by Obligors of the Transactions will not, (a) conflict with or
violate the Borrower Organizational Documents of any Borrower, (b) conflict with
or violate any Law or Order applicable to each of the Obligors, or any of them,
or by which the Obligors or any of their properties is bound, (c) result in a
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give rise to any right of termination,
acceleration or cancellation under, or result in the creation of an Encumbrance
on any of the Purchased Assets pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license or other instrument or obligation, oral or
written, to which any Obligor is a party or by which the Obligors or any of
their properties is bound, or (d) require any Obligor to obtain any consent,
approval, authorization or permit of, or to make any filing with or notification
to, any Governmental Authority, except (i) as set forth in Section 3.4 of the
Obligor Disclosure Schedule, (ii) for any filings required pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the “Exchange Act”), or
(iii) in the case of clauses (b) through (d) above, where such conflicts,
violations, breaches, defaults or other acts or omissions could not reasonably
be expected to have an Obligor Material Adverse Effect.




11




Section
3.5 Financial
Statements; Undisclosed Liabilities; Absence of Certain
Changes




(a)
Obligors have delivered to Buyer, as Section 3.5 to the
Obligor Disclosure Schedule, true and complete copies of the
following:  (a) the balance sheets of the Business and the Excluded
Industries as of December 31, 2008 and December 31, 2007 (the balance sheet of
the Business and the Excluded Industries as of December 31, 2008 is referred to
herein as the “Balance
Sheet” and December 31, 2008 is referred to herein as the “Balance Sheet Date”)
and statements of operations and retained earnings and statements of cash flows
of the Business and the Excluded Industries for each of the fiscal years ended
December 31, 2008 and December 31, 2007 and (b) the balance sheet of the
Business and the Excluded Industries as of September 30, 2009 and income
statement of the Business and the Excluded Industries for the nine months ended
September 30, 2009 (all such financial statements and any notes thereto are
hereinafter collectively referred to as the “Financial
Statements”).




(b)
Except as set forth in Section 3.5(b) of the
Obligor Disclosure Schedule, the Financial Statements, to Obligors’
knowledge:  (i) present fairly in all material respects the financial
position of the Business and the Excluded Industries as of the dates thereof and
the results of operations of the Business for the periods covered thereby; (ii)
are consistent in all material respects with the books and records of the
Business and the Excluded Industries; and (iii) have been prepared in accordance
with GAAP throughout the periods indicated (except as may be indicated therein),
except that any interim Financial Statements are subject to normal and recurring
year-end adjustments, none of which is expected to be material individually or
in the aggregate.




(c)
Except as set forth in Section 3.5(c) of the
Obligor Disclosure Schedule, none of Borrowers have any material liabilities of
any nature, whether accrued, absolute, contingent or otherwise, and whether due
or to become due, other than (i) liabilities reflected on the Balance Sheet, or
(ii) liabilities incurred subsequent to the Balance Sheet Date in the ordinary
course of business.  At the Balance Sheet Date, there were no material
loss contingencies (as such term is used in Statement of Financial Accounting
Standards No. 5 issued by the Financial Accounting Standards Board in March
1975) that will not be adequately provided for in the Balance Sheet as required
by said Statement No. 5.




(d)
Except as set forth in Section 3.5(d) of the
Obligor Disclosure Schedule or as otherwise contemplated by this Agreement,
there has not occurred any Obligor Material Adverse Effect and since December
31, 2009, Obligors have conducted the Business in the ordinary course of
business.




12




Section
3.6 Absence of
Litigation




Except as
disclosed in Section
3.6 of the Obligor Disclosure Schedule, as of the date hereof, to
Obligors’ knowledge (a) there is no private or governmental action, suit,
proceeding, litigation, arbitration, or investigation, criminal prosecution or
inquiry (“Action”) pending or,
to the knowledge of Obligors, threatened against any of Obligors before any
Governmental Authority that, if adversely determined, would have an Obligor
Material Adverse Effect, and (b) there is no legally binding judgment, decree,
order, injunction, decision or award of any Governmental Authority (“Order”) against any
of Obligors that has or would have an Obligor Material Adverse
Effect.




Section
3.7 Employee Benefit
Plans




Section 3.7 of the
Obligor Disclosure Schedule sets forth a true and complete list of the employee
benefit plans (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)) currently
maintained, sponsored or contributed to by Borrowers or any entity that would be
deemed a “single employer” with Borrowers within the meaning of Section 414(b),
(c), (m) or (o) of the Code, and all material bonus, stock option, stock
purchase, stock appreciation right, incentive, deferred compensation,
supplemental retirement, post-retirement or post-termination health or welfare
benefit, severance, welfare, medical, life, vacation, sickness, change in
control, death benefit and other similar fringe and employee benefit plans,
programs, policies and arrangements, and all employment and consulting
agreements, in each case for the benefit of, or relating to, any employee or
former employee of Borrowers (including their beneficiaries) (collectively, the
“Borrower Employee
Plans”). For purposes of the preceding sentence, “material” means any
program, plan, benefit, policy or arrangement involving either more than five
(5) persons or aggregate liability in excess of $250,000.  Except as
set forth in Section
3.7 of the Obligor Disclosure Schedule and except as would not have an
Obligor Material Adverse Effect, with respect to any of the Borrower Employee
Plans, (i) each Borrower Employee Plan (other than a Multiemployer Plan)
intended to qualify under Section 401(a) of the Code is so qualified and has
received a favorable determination letter from the Internal Revenue Service (the
“IRS”) or,
pursuant to Revenue Proceeding 2005-16, may rely upon an opinion or advisory
letter; (ii) no such Borrower Employee Plan is a “multiemployer plan” within the
meaning of Section 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code (a
“Multiemployer
Plan”) or a single employer pension plan within the meaning of Section
4001(a)(15) of ERISA that is subject to Sections 4063 and 4064 of ERISA (a
“Multiple Employer
Plan”), and no withdrawal liability exists with respect to any
Multiemployer Plan or Multiple Employer Plan; (iii) there has been no
“prohibited transaction” within the meaning of Section 4975(c) of the Code or
Section 406 of ERISA, involving the assets of any of the Borrower Employee
Plans; (iv) no “accumulated funding deficiency” (within the meaning of Section
412 of the Code and Section 302 of ERISA) has been incurred, and no excise or
other Taxes have been incurred or are due and owing by Borrowers with respect to
any of the Borrower Employee Plans because of any failure to comply with the
minimum funding standards of the Code and ERISA; (v) no Action has been
instituted or is threatened against or with respect to any Borrower Employee
Plan (other than routine claims for benefits and appeals of such claims); (vi)
each Borrower Employee Plan (other than a Multiemployer Plan) complies and has
been maintained and operated in accordance with its terms and applicable Law,
including, without limitation, ERISA and the Code; (vii) no Borrower Employee
Plan (other than a Multiemployer Plan) is under audit or investigation by the
IRS, U.S. Department of Labor or any other Governmental Authority; (viii) except
as required by Section 4980B(f) of the Code, no Borrower Employee Plan provides
medical, death or welfare benefits (whether or not insured) with respect to
current or former employees of Borrowers beyond their retirement or other
termination of employment; and (ix) the consummation of the Transactions (either
alone or in conjunction with any other event) will not entitle any current or
former employee of Borrowers to any payment (whether of severance pay,
unemployment compensation, golden parachute, bonus or otherwise) or increase the
amount of compensation due to any employee of
Borrowers.  Notwithstanding the foregoing, the representations and
warranties contained in this Section 3.7 (other
than the representations and warranties contained in subsections (ii), (iii) and
(viii)) are qualified such that to the extent that any such representation or
warranty applies to a Borrower Employee Plan that is a Multiemployer Plan, such
representation or warranty shall be deemed to be to the knowledge of
Obligors.




13




Section
3.8 Permits




Section 3.8 of the
Obligor Disclosure Schedule lists the material Permits required in connection
with the operation of the Business as it is now being operated and conducted by
Obligors (collectively, “Borrower
Permits”).  Obligors are in compliance with the terms and
conditions of such Borrower Permits, except where the failure to so comply would
not have an Obligor Material Adverse Effect, and, as of the date hereof, no
revocation, suspension or cancellation of any such Borrower Permit is pending
or, to the knowledge of Obligors, threatened.




Section
3.9 Purchased Assets;
Business




(a)
Except as set forth in Section 3.9 of the
Obligor Disclosure Schedule, Borrowers have good, marketable and valid title to
or, in the case of leases and licenses, valid and subsisting leasehold interests
or licenses in, all of the Purchased Assets (except for such Purchased Assets
disposed of as permitted by Section 6.1), in each
case free and clear of all Encumbrances, except as set forth in the Financial
Statements.  Except as set forth in Section 3.9 of the
Obligor Disclosure Schedule, none of the Purchased Assets are subject to any
covenant or restriction prohibiting or limiting their transfer under this
Agreement.  Except as set forth in Section 3.9 of the
Obligor Disclosure Schedule, Borrowers do not own or lease any real
property.




(b) Since
its inception, the Business has been operated solely by Obligors.  The
Purchased Assets constitute all of the assets necessary to conduct the Business
in the manner in which it has been operated and conducted by Obligors in the
past year and as it is currently operated and conducted.




Section
3.10 Assumed
Contracts




Except as
set forth in Section
3.10 of the Obligor Disclosure Schedule, Obligors have made available to
Buyer a correct and complete copy of each Assumed Contract, or in the case of an
oral Assumed Contract, a correct and complete written description
thereof.  With respect to each Assumed Contract, except as set forth
in Section 3.10
of the Obligor Disclosure Schedule:  (i) the Assumed Contract is a
legal, valid and binding obligation of the parties thereto and is in full force
and effect; (ii) none of Borrowers are in breach of or default in any material
respect, and no event has occurred that with the passage of time or giving of
notice or both would constitute such a breach or default in any material respect
by any of Borrowers, under the Assumed Contract; and (iii) to each Obligor’s
knowledge, no other party to the Assumed Contract is in breach of or default in
any material respect, and no event has occurred that with the passage of time or
giving of notice or both would constitute such a breach or default in any
material respect by such other party, under such Assumed Contract.




14




Section
3.11 Compliance with
Laws




The
Business has been operated since January 1, 2009 in compliance with all Laws
applicable thereto, except for any instances of non-compliance which would not
have an Obligor Material Adverse Effect.




Section
3.12 Labor
Matters




(a)
Except as would not have an Obligor Material Adverse Effect and except as set
forth in Section
3.12(a) of the Obligor Disclosure Schedule, Obligors: (i) are in
compliance with all applicable Laws respecting employment, employment practices,
terms and conditions of employment, pay equity and wages and hours, in each
case, with respect to current, former or retired employees or consultants of
Borrowers (collectively, “Borrower Employees”);
and (ii) have timely withheld and paid over to the appropriate Governmental
Authorities all amounts required by Law to be withheld from the wages, salaries
and other payments to Borrower Employees.




(b)
Obligors are not involved in or threatened with any labor dispute, grievance or
Action relating to labor, safety or discrimination matters involving any
Borrower Employee, including, without limitation, charges of unfair labor
practices or discrimination complaints.  Obligors have not engaged in
any unfair labor practices within the meaning of the National Labor Relations
Act.  Obligors are not a party to, or bound by, any collective
bargaining agreement with respect to Borrower Employees and no collective
bargaining agreement is being negotiated by Obligors.




Section
3.13 Tax
Matters




(a)
Except as set forth in Section 3.13 of the
Obligor Disclosure Schedule, Borrowers have filed, or will timely file, all
Returns relating to Taxes of Borrowers for periods ending on or prior to the
Closing Date and have paid, or will timely pay, all Taxes shown thereon as
owing, except where the failure to file such Returns or pay such Taxes would not
have an Obligor Material Adverse Effect.




(b)
Except as set forth in Section 3.13 of the
Obligor Disclosure Schedule, (i) there is no Action or audit pending or, to the
knowledge of Obligors, threatened with respect to any liability for Tax relating
to income of Borrowers for which a material amount of Tax is at issue, and (ii)
there is no liability for Tax pursuant to United States Treasury Regulations
Section 1.1502-6 (or any comparable provision of state or local
law).




Section
3.14 Brokers




Except as
set forth in Section
3.14 of the Obligor Disclosure Schedule, no broker, finder or investment
banker is entitled to any brokerage, finder’s or other similar fee or commission
in connection with the Transactions based upon arrangements made by or on behalf
of Obligors and any such fee or commission shall be borne by
Obligors.




15




Section
3.15 Intellectual
Property




Section 3.15 of the
Obligor Disclosure Schedule sets forth a complete and accurate list of all
Intellectual Property owned or licensed by any of the Borrowers.




(a)
Except as set forth in Section 3.15 of the
Obligor Disclosure Schedule, to Obligors’ knowledge (i) with respect to any
Intellectual Property owned by Borrowers (as opposed to Intellectual Property of
which Borrowers is a licensee), Borrowers own all right, title and interest to
all such Intellectual Property, without any conflict known to Obligors with the
rights of others, (ii) no Person other than Borrowers has the right to use the
Intellectual Property owned by Borrowers, and (iii) Borrowers have the valid
right to use, pursuant to a license, sublicense or other agreement, any
Intellectual Property used in the Business that is owned by a party other than
Borrowers.




(b) To
Obligors’ knowledge, the conduct of the Business as currently conducted does not
infringe upon any intellectual property right of any third party except where
such infringement would not be reasonably expected to have an Obligor Material
Adverse Effect.




(c) To
Obligors’ knowledge, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not result in the loss
of, or any encumbrance on, the rights of Borrowers with respect to the
Intellectual Property owned by them.




(d) To
Obligors’ knowledge, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not result in the
breach of, or create on behalf of any third party the right to terminate or
modify, (i) any license, sublicense or other agreement relating to any
Intellectual Property owned by Borrowers, or (ii) any license, sublicense
and other agreement as to which Borrowers are a party and pursuant to which
Borrowers are authorized to use any third party Intellectual Property, excluding
generally commercially available, off-the-shelf software programs.




(e) To
Obligors’ knowledge, no claim by any third party contesting the validity,
enforceability, use or ownership of any of the Intellectual Property has been
made, is currently outstanding or, to Obligors’ knowledge, has been threatened,
and to Obligors’ knowledge, there are no grounds for the same.




(f) To
Obligors’ knowledge, the loss or expiration of any Intellectual Property rights
would not reasonably be expected to result in an Obligor Material Adverse
Effect, and no such loss or expiration is threatened, pending or reasonably
foreseeable.




Section
3.16 Operation of
Business




Since
March 3, 2010 through the Closing Date Borrowers have not expended assets or
accepted liabilities that would render them materially more
insolvent.




Section
3.17 Sound Business
Judgment




Obligors
believe that the execution and delivery of this Agreement by Obligors and the
consummation of the transactions contemplated hereby reflect the exercise of
sound business judgment by the Obligors, are proper exercises of their
contractual and fiduciary duties, are fair and reasonable, and are in the best
interests of the Borrowers and their creditors.  Obligors believe that
total consideration to be realized by Rosenthal under this Agreement represents
fair consideration and reasonably equivalent value for the Purchased
Assets.  Obligors believe, as a result, there exists good and
sufficient business justification to consummate the transactions contemplated
hereby.




16




Section
3.18 Lack of
Collusion; Arm’s Length Transaction




This
Agreement was negotiated, proposed, and entered into by the Parties without
collusion, in good faith, and from arm’s-length bargaining
positions.




Section
3.19 Bulk
Sales




The
Tuttle Agency of Pennsylvania, Inc. represents and warrants that the Purchased
Assets that it owns represent less than fifty percent of the assets owned by
such Obligor. Each Obligor represents and warrants that the sale of the
Purchased Assets owned by such Obligor does not require such Obligor to provide
ten (10) days' notice to the Pennsylvania Department of Revenue of the
Commonwealth of Pennsylvania of such sale under Pennsylvania Statute 72 P.S.
Section 7321.1, Pennsylvania Statute 72 P.S. Section 7240, Pennsylvania Statute
72 P.S. Section 788.3 or Pennsylvania Statute 72 P.S. Section 1403.




ARTICLE
IV




ROSENTHAL’S LIMITED
WARRANTIES; LIMITATIONS OF DAMAGES




Rosenthal
hereby represents and warrants to Buyer and Obligors that as of the date hereof
and as of the Closing:




Section
4.1 Organization;
Authority Relative to this Agreement




Rosenthal
is duly organized and validly existing and in good standing under the Laws of
its jurisdiction of organization and has the requisite corporate power and
authority to enter into, execute and deliver this Agreement and the other
agreements and instruments to be delivered by Rosenthal pursuant to this
Agreement, consummate the Transactions, and to carry out its obligations
hereunder and thereunder.  The execution and delivery by Rosenthal of
this Agreement and the other agreements and instruments to be delivered by
Rosenthal pursuant to this Agreement, and the consummation by Rosenthal of the
Transactions have been duly authorized by all necessary corporate action on its
part.  This Agreement and the other agreements and instruments to be
delivered by Rosenthal pursuant to this Agreement, have been duly executed and
delivered by Rosenthal, and constitute the legal, valid and binding obligation
of Rosenthal, enforceable against Rosenthal in accordance with the terms hereof
and thereof (except as enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization, arrangement, voidable preference and other similar
laws relating to or affecting the rights of creditors generally and except as
the same may be subject to the effect of general principles of
equity).




17




Section
4.2 No Conflict;
Required Filings and Consents




The
execution and delivery of this Agreement and the other agreements and
instruments to be delivered by Rosenthal pursuant to this Agreement do not, and
the consummation by Rosenthal of the Transactions will not, (a) conflict with or
violate the organizational or governing documents of Rosenthal, (b) conflict
with or violate any Law or Order applicable to Rosenthal or by which Rosenthal
or any of its properties is bound, (c) result in a breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give rise to any right of termination, acceleration or
cancellation under, any note, bond, mortgage, indenture, contract, agreement,
lease, license or other instrument or obligation to which Rosenthal is a party
or by which Rosenthal or any of its properties is bound, or (d) require
Rosenthal to obtain any consent, approval, authorization or permit of, or to
make any filing with or notification to, any Governmental Authority, except (i)
as set forth in Section 4.2 of the
Rosenthal Disclosure Schedule, (ii) in the case of clauses (b) through (d)
above, where such conflicts, violations, breaches, defaults or other failures or
occurrences would not prohibit, prevent, enjoin, restrict or materially impair
or delay any of the Transactions.




Section
4.3 Absence of
Litigation




Except as
disclosed in Section
4.3 of the Rosenthal Disclosure Schedule, as of the date hereof, (a)
there is no Action pending or, to the knowledge of Rosenthal, threatened against
Rosenthal before any Governmental Authority that, if adversely determined, would
prohibit, prevent, enjoin, restrict or materially impair or delay any of the
Transactions, and (b) there is no Order against Rosenthal that would
prohibit, prevent, enjoin, restrict or materially impair or delay any of the
Transactions.




Section
4.4 Holder of Loan
Documents




Rosenthal
is the holder of the 2007 Loan Agreement and all ancillary documents thereto
(the “Loan
Documents”) and has not transferred Rosenthal’s interest in the Loan
Documents or the Purchased Assets, except the Loans are participated in by
Sovereign Business Capital (f/k/a Business Alliance Capital Company) and Burdale
Financial Limited, each pursuant to its respective participation agreement dated
September 11, 2007, as amended, with Rosenthal.  Copies of the Loan
Documents have been provided to Buyer and are true and correct, and, as of the
date hereof, there have been no further material written amendments or written
modifications thereto.




Section
4.5 No
Subordination




Rosenthal
has not released any security interest or lien it has in, or consented to the
sale or disposition of, any Purchased Assets (except for sales in the ordinary
course of Borrowers’ business and for the sale pursuant hereto) and has not
heretofore sold, assigned or transferred any of the Purchased Assets being
purchased hereunder.  Rosenthal has not agreed to subordinate its
security interests in the Purchased Assets to any third party.




Section
4.6 Brokers




No
broker, finder or investment banker is entitled to any brokerage, finder’s or
other similar fee or commission from Rosenthal in connection with the execution
of this Agreement or the consummation of the Transactions and any such fee or
commission shall be borne by Rosenthal.




18




Section
4.7 Notice of Article
9 Sale




On or
before March 5, 2010 (the “Notice Date”),
Rosenthal provided notice of the Article 9 Sale (each a “Notice” and
collectively, the “Notices”), which
Notices were substantially in the form attached hereto as Exhibit D, to all
persons and entities set forth on Exhibit E attached
hereto.  Except as disclosed in Section 4.7 of the Rosenthal
Disclosure Schedules, as of the date hereof, Rosenthal has not received any
objections to the Article 9 Sale.




Section
4.8 Limitations of
Damages




Other
than the foregoing representations and warranties specifically provided in this
Article IV,
ROSENTHAL MAKES NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS OF ANY KIND
WHATSOEVER WITH RESPECT TO THE PURCHASED ASSETS (AND THE OTHER PARTIES HERETO
EXPRESSLY AGREE THAT, EXCEPT AS PROVIDED IN THIS AGREEMENT, ROSENTHAL MAKES AND
GIVES NO COVENANT, UNDERTAKING, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
IN CONNECTION WITH THIS AGREEMENT, THE PURCHASED ASSETS OR ANY OTHER MATTER
RELATING HERETO OR THERETO), INCLUDING, BUT NOT LIMITED TO:  TITLE,
MERCHANTABILITY; FITNESS FOR ANY PARTICULAR PURPOSE; DESIGN, QUALITY, CAPACITY,
CONDITION OR WORKMANSHIP; COMPLIANCE OF THE PURCHASED ASSETS WITH ANY LAW, RULE,
SPECIFICATION OR CONTRACT; ANY ASPECT OF BORROWERS’ FINANCIAL CONDITION,
BUSINESSES, PROSPECTS OR OPERATIONS; IMMUNITY FROM LIABILITY FOR EXCLUDED
LIABILITIES; OR THE EXISTENCE OR NON-EXISTENCE OF ANY SECURITY INTERESTS, LIENS
OR OTHER CLAIMS OF ANY THIRD PARTIES TO THE PURCHASED ASSETS.  BUYER
AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ROSENTHAL SHALL
HAVE NO LIABILITY TO BUYER OR TO ANY PERSON CLAIMING BY OR THROUGH BUYER FOR ANY
MATTER DISCLAIMED HEREBY, OR FOR ANY INCIDENTAL, CONSEQUENTIAL, OR OTHER DAMAGES
OF ANY KIND WHATSOEVER, WHETHER ANY CLAIMS ARE BASED UPON THEORIES OF CONTRACT,
NEGLIGENCE OR TORT (INCLUDING STRICT LIABILITY); AS BETWEEN ROSENTHAL AND BUYER,
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE PURCHASED ASSETS ARE BEING
TRANSFERRED “AS IS, WHERE IS.”




Section
4.9 Lack of Collusion;
Arm’s Length Transaction




This
Agreement was negotiated, proposed, and entered into by the Parties without
collusion, in good faith, and from arm’s-length bargaining
positions.




ARTICLE
V




REPRESENTATIONS AND
WARRANTIES OF BUYER AND GUARANTORS




Buyer and
the Guarantors hereby represent and warrant to Rosenthal and Obligors as of the
date hereof and as of the Closing that, except as set forth in the disclosure
schedule delivered by Buyer to Rosenthal and attached hereto and made a part
hereof (the “Buyer
Disclosure Schedule”):




19




Section
5.1 Organization;
Authority Relative to this Agreement




Each of
Guarantors and Buyer is duly organized, validly existing and in good standing
under the Laws of its jurisdiction of organization and has the requisite
corporate power and authority to enter into, execute and deliver this Agreement,
consummate the Transactions, and to carry out its obligations
hereunder.  The execution and delivery by each of Guarantors and Buyer
of this Agreement and the consummation by each of Guarantors and Buyer of the
Transactions have been duly authorized by all necessary corporate action on its
part.  This Agreement has been duly executed and delivered by each of
Guarantors and Buyer, and constitutes the legal, valid and binding obligation of
Guarantors and Buyer, enforceable against Guarantors and Buyer in accordance
with the terms hereof (except as enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization, arrangement, voidable preference and
other similar laws relating to or affecting the rights of creditors generally
and except as the same may be subject to the effect of general principles of
equity).




Section
5.2 No Conflict;
Required Filings and Consents




The
execution and delivery of this Agreement by Guarantors and Buyer do not, and the
consummation by Buyer of the Transactions will not, (a) conflict with or violate
the organizational or governing documents of Guarantors or Buyer, (b) conflict
with or violate any Law or Order applicable to Guarantors or Buyer or by which
Guarantors or Buyer or any of their properties is bound, (c) result in a breach
of or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give rise to any right of termination,
acceleration or cancellation under, any note, bond, mortgage, indenture,
contract, agreement, lease, license or other instrument or obligation to which
Guarantors or Buyer is a party or by which Guarantors or Buyer or any of their
properties is bound, or (d) require Guarantors or Buyer to obtain any consent,
approval, authorization or permit of, or to make any filing with or notification
to, any Governmental Authority, except (i) as set forth in Section 5.2 of the
Buyer Disclosure Schedule, (ii) in the case of clauses (b) through (d) above,
where such conflicts, violations, breaches, defaults or other failures or
occurrences would not prohibit, prevent, enjoin, restrict or materially impair
or delay any of the Transactions.




Section
5.3 Absence of
Litigation




Except as
disclosed in Section
5.3 of the Buyer Disclosure Schedule, as of the date hereof, (a) there is
no Action pending or, to the knowledge of Buyer, threatened against Guarantors
or Buyer before any Governmental Authority that, if adversely determined, would
prohibit, prevent, enjoin, restrict or materially impair or delay any of the
Transactions, and (b) there is no Order against Guarantors or Buyer that
would prohibit, prevent, enjoin, restrict or materially impair or delay any of
the Transactions.




Section
5.4 Brokers




Except as
set forth in Section
5.4 of the Buyer Disclosure Schedule, no broker, finder or investment
banker is entitled to any brokerage, finder’s or other similar fee or commission
in connection with the Transactions based upon arrangements made by or on behalf
of Guarantors or Buyer, and any such fee or commission shall be borne by
Buyer.




20




ARTICLE
VI




COVENANTS OF
OBLIGORS




Section
6.1 Conduct of
Business by Obligors Pending the Closing




Except as
otherwise contemplated by this Agreement or as disclosed in Section 6.1 of the
Obligor Disclosure Schedule, or unless Buyer shall give its prior written
consent, between the date of this Agreement and the Closing Date or the earlier
termination of this Agreement, Obligors shall (i) conduct the Business in the
ordinary course of business and in a manner consistent with past practice and
(ii) use commercially reasonable efforts to preserve intact its current business
organization, keep available the services of its current employees and maintain
satisfactory relationships with its customers, client, suppliers and others
having business relationships with it and (iii) not expend assets or accept
liabilities that would render them materially more insolvent at the Closing Date
than the Borrowers were on March 3, 2010.  Buyer agrees to cooperate
reasonably with Obligors in connection with the foregoing.  Without
limiting the generality of the foregoing, and except as contemplated by this
Agreement or disclosed in Section 6.1 of the
Obligor Disclosure Schedule, Obligors shall not, between the date of this
Agreement and the Closing Date or the earlier termination of this Agreement, do
or agree to do any of the following without the prior written consent of Buyer
and Rosenthal:




(a) amend
or otherwise change the organizational documents of any Borrower;




(b) issue
any additional shares or issue, sell or grant any option or right to acquire, or
otherwise dispose of, any of its authorized but unissued shares;




(c)
effect any dissolution, winding up, liquidation or termination of the
Business;




(d) incur
or guarantee, or perform, pay or otherwise discharge, any material obligation or
liability (absolute or contingent), except in the ordinary course of
business;




(e)
terminate or amend in any material respect any Assumed Contract;




(f) take
or fail to take, or agree to take or fail to take, any action which would make
any representation or warranty made by Obligors herein untrue or incorrect in
any material respect;




(g) sell,
lease, license, transfer or otherwise dispose of any Purchased
Assets;




(h) merge
or consolidate with any Person;




(i) make
any investment in, or make any loan or advance to, any Person, except in the
ordinary course of business;




(j) enter
into any employment agreement or arrangement or make any increase in the number
or compensation of persons employed in the Business; or




(k) agree
to do any of the foregoing.




21




Section
6.2 Notification of
Certain Events




Obligors
shall give prompt notice to Buyer and Rosenthal if any of the following occurs
after the date of this Agreement: (i) there has been a material failure of
any of Obligors to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder; (ii) receipt by any of
Obligors of any material notice or other material communication from any
Governmental Authority in connection with the Transactions; (iii) the
occurrence of an event which would cause a representation or warranty made in
Article III to
become untrue, or that would or reasonably could cause a condition in Section 9.2 not to be
satisfied; or (iv) the commencement or threat, in writing, of any Action
against any of Obligors, or any of their properties, with respect to the
Transactions. No such notice to Buyer and Rosenthal shall have any effect on the
determination of whether or not any of the conditions to Closing or to the
consummation of the Transactions have been satisfied or in determining whether
or not any of the representations, warranties or covenants contained in this
Agreement have been breached.




Section
6.3 Non-Competition;
Non-Solicitation




(a) Each
Obligor hereby acknowledges that it is familiar with the Business and the trade
secrets and with other confidential information related to the
Business.  Each Obligor acknowledges and agrees that Buyer would be
irreparably damaged if any of Obligors, or any of their respective Affiliates,
were to provide services to or otherwise participate in the business of any
Person competing with the Business in a similar business and that any such
competition by such Obligor would result in a significant loss of goodwill by
Buyer.  Each Obligor further acknowledges and agrees that the
covenants and agreements set forth in this Section 6.3 were good
and sufficient consideration for Obligors and were a material inducement to
Buyer and Rosenthal to enter into this Agreement and to perform their respective
obligations hereunder, and that Buyer and Rosenthal would not obtain the benefit
of the bargain set forth in this Agreement as specifically negotiated by the
Parties hereto if such Obligor breached the provisions of this Section
6.3.  Therefore, each Obligor agrees, in further consideration
of the Purchased Assets and the goodwill of the Business sold by such Obligor,
that during the three (3) year period after the Closing Date (the “Restricted Period”),
each Obligor shall not (and shall cause its Affiliates not to) directly or
indirectly own any interest in, manage, control, participate in (whether as an
owner, officer, director, manager, employee, partner, agent, representative or
otherwise), consult with, render services for, or in any other manner engage
anywhere in the Restricted Territories in any business engaged directly or
indirectly relating to the Business or the business engaged in by Buyer; provided that nothing
herein shall prohibit any Obligor from being a passive owner of not more than 2%
of the outstanding stock of any class of a corporation which is publicly traded
so long as none of such Persons has any active participation in the business of
such corporation.  Each Obligor acknowledges that the Business and
Buyer’s business has been conducted or is presently proposed to be conducted
throughout the Restricted Territories and that the geographic restrictions and
time periods, as well as all other restrictions and covenants contained in Section 6.3 are
reasonable and necessary, and supported by good and valuable consideration, to
protect the goodwill of Buyer’s business and the Business being sold by each
Borrower pursuant to this Agreement.




22




(b) Each
Obligor agrees that it shall not (and each Obligor shall cause its Affiliates
not to) directly, or indirectly through another Person during the Restricted
Period, (i) induce or attempt to induce any employee of the Business, or any of
their Affiliates to leave the employ of the Business, Buyer or any of their
Affiliates, or in any way interfere with the relationship between the Business,
Buyer or any of their Affiliates and any employee thereof, (ii) hire any person
who was an employee of the Business, Buyer or any of their Affiliates at any
time during the twelve-month period immediately prior to the date on which such
hiring would take place (it being conclusively presumed by the parties so as to
avoid any disputes under this Section 6.3(b) that
any such hiring within such twelve-month period is in violation of clause (i)
above), or (iii) call on, solicit or service any client, customer, supplier,
licensee, licensor or other business relation of Buyer, the Business, or any of
their Affiliates (including any Person that was a client, customer, supplier or
other potential business relation of Buyer, the Business, or any of their
Affiliates at any time during the twelve month period immediately prior to such
call, solicit or service), induce or attempt to induce such Person to cease
doing business with the Business, Buyer or any of their Affiliates, or in any
way interfere with the relationship between any such customer, supplier,
licensee, licensor or business relation and the Business, Buyer or any of their
Affiliates (including making any negative statements or communications about the
Business, Buyer or any of their Affiliates).  After the Closing, no
Obligor shall make any negative statements or communications about Buyer, the
Business, the Purchased Assets or any of their Affiliates’
businesses.




(c) If,
at the time of enforcement of the covenants contained in this Section 6.3 (the
“Restrictive
Covenants”), a court shall hold that the duration, scope or area
restrictions stated herein are unreasonable under circumstances then existing,
the Parties agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or area and
that the court shall be allowed and directed to revise the restrictions
contained herein to cover the maximum period, scope and area permitted by
law.  Each Obligor has consulted with legal counsel regarding the
Restrictive Covenants and based on such consultation has determined and hereby
acknowledges that the Restrictive Covenants are reasonable in terms of duration,
scope and area restrictions and are necessary to protect the goodwill of the
Business, Buyer’s business and the substantial investment in the Business made
by Buyer hereunder.




(d) If
any Obligor or any Affiliate of any Obligor breaches, or threatens to commit a
breach of, any of the Restrictive Covenants, Buyer shall have the following
rights and remedies, each of which rights and remedies shall be independent of
the others and severally enforceable, and each of which is in addition to, and
not in lieu of, any other rights and remedies available to Buyer at law or in
equity: (i) the right and remedy to have the Restrictive Covenants specifically
enforced by any court of competent jurisdiction, it being agreed that any breach
or threatened breach of the Restrictive Covenants would cause irreparable injury
to the Business and Buyer and that money damages would not provide an adequate
remedy to Buyer and that a bond of no more than $250 is sufficient to any action
by Buyer for temporary or injunctive relief; and (ii) the right and remedy to
require such Obligor to account for and pay over to Buyer any profits, monies,
accruals, increments or other benefits derived or received by such Person as the
result of any transactions constituting a breach of the Restrictive
Covenants.




(e) In
the event of any breach or violation by any Obligor of any of the Restrictive
Covenants, the time period of such covenant shall be tolled until such breach or
violation is resolved.




(f)
Nothing contained in this Agreement shall prohibit Rosenthal with respect to
clause (i) below, and Obligors and any Affiliates of Obligors, from (i)
collecting any receivables of Borrowers arising from the operation of the
Business prior to the Closing, (ii) winding down the business of Borrowers
(other than the Business and the Purchased Assets), or (iii) actively
participating or engaging in the business of the Excluded
Industries.




23




Section
6.4 Name
Change




On the
Execution Date, Mr. Goldstein and GT shall (i) deliver to Buyer for filing, the
documents necessary to amend the organizational documents of Tuttle Agency of
Pennsylvania, Inc., and (ii) take all other actions requested by Buyer to change
the name of Tuttle Agency of Pennsylvania, Inc. to a name sufficiently
dissimilar to Tuttle Agency of Pennsylvania, Inc., in Buyer’s reasonable
judgment, to avoid confusion; provided, that Buyer
hereby agrees not to file such documents until on or after the Closing Date.
Between the Execution Date and the Closing Date, and after the Closing Date, Mr.
Goldstein and GT shall and shall cause each of the Operating Affiliates to take
all other actions reasonably requested by Buyer to enable Buyer to utilize the
names of each of the Operating Affiliates, as dbas, assumed names, trade names
or otherwise.  After the Closing Date, no Obligor or any of their
respective Affiliates, shall transact business as, or use in the conduct of its
businesses or otherwise, the name used by it as of the date hereof or any other
similar names.  Furthermore, after the Closing, Mr. Goldstein and GT
shall and shall cause each of the Operating Affiliates to discontinue the use of
the current names of the Operating Affiliates (and any other trade names
currently utilized by the Operating Affiliates) and shall not subsequently
change its name to or otherwise use or employ any name that is similar to the
name that is used by it as of the date hereof without the prior written consent
of Buyer.  From and after the Closing, each Obligor covenants and
agrees not to and to cause its Affiliates not to use or otherwise employ any of
the trade names, corporate names, dbas or similar Intellectual Property rights
utilized by Obligors in the conduct of the Business, which rights are included
in the Purchased Assets purchased hereunder.  If the Closing does not
take place on or by the Outside Date and this Agreement has been terminated,
Buyer shall promptly return to GT the documents delivered by Mr. Goldstein and
GT on the Execution Date pursuant to this Section
6.4.




Section
6.5 Payments to
Employees




Borrowers
covenant and agree that they shall pay all employees of the Business for
services rendered by said employees through the day prior to the Closing
Date.




ARTICLE
VII




COVENANTS OF BUYER AND
ROSENTHAL




Section
7.1 Representations
and Warranties




Each of
Buyer and Rosenthal covenant and agree that, except as otherwise contemplated by
this Agreement or unless the other Party shall give its prior written consent,
neither Buyer, on the one hand, nor Rosenthal, on the other hand, shall, between
the date of this Agreement and the Closing Date or the earlier termination of
this Agreement, take or fail to take, or agree to take or fail to take, any
action which would make any representation or warranty made by Buyer, on the one
hand, or Rosenthal, on the other hand, herein untrue or incorrect in any
material respect.




24




Section
7.2 Notification of
Certain Events




(a) Buyer
shall give prompt written notice to Rosenthal and Obligors if any of the
following occurs after the date of this Agreement: (i) there has been a
material failure of Buyer to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; (ii) receipt by
Guarantors or Buyer of any material notice or other communication from any
Governmental Authority in connection with the Transactions; (iii) the
occurrence of an event which would cause a condition in Section 9.3 not to be
satisfied; or (iv) the commencement or threat, in writing, of any Action
against Guarantors or Buyer, or any of their properties, with respect to the
Transactions. No such notice to Rosenthal and Obligors shall have any effect on
the determination of whether or not any of the conditions to Closing or to the
consummation of the Transactions have been satisfied or in determining whether
or not any of the representations, warranties or covenants contained in this
Agreement have been breached.




(b)
Rosenthal shall give prompt written notice to Buyer if any of the following
occurs after the date of this Agreement: (i) there has been a material
failure of Rosenthal to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; (ii) receipt by
Rosenthal of any material notice or other communication from any Governmental
Authority in connection with the Transactions; (iii) the occurrence of an
event which would cause a condition in Section 9.3 not to be
satisfied; or (iv) the commencement or threat, in writing, of any Action
against Rosenthal with respect to the Transactions.  No such notice to
Buyer shall have any effect on the determination of whether or not any of the
conditions to Closing or to the consummation of the Transactions have been
satisfied or in determining whether or not any of the representations,
warranties or covenants contained in this Agreement have been
breached.




Section
7.3 Reimbursement of
Costs; Post-Closing Assistance




(a) If
after the Closing Date, Buyer uses the office space located at 295 Madison
Avenue, New York, New York, 20 Broadhollow Road, Melville, New York, and/or 6400
North Andrews Avenue, Fort Lauderdale, Florida (each, a “Location”), and/or
equipment leased by any Borrower and for which such Borrower remains responsible
after the Closing Date, Buyer shall reimburse Borrowers for (i) all rent and
additional rent (including utilities supplied by the landlord) due related to
the period after the Closing Date during which Buyer has used any Location, or a
pro rata portion thereof for a partial month, unless and to the extent, for any
reason, Buyer pays the landlord of the relevant Location directly for such rent
and additional rent (including proportional utilities supplied by the landlord)
and (ii) all reasonably documented expenses incurred by Borrowers for the lease
of any such equipment.  For the avoidance of doubt, in no event shall
Buyer be obligated to pay or reimburse Borrowers for any amounts which became
due, accrued or otherwise relate to the period prior to the Closing
Date.




(b) After
the Closing, upon Borrowers’ reasonable request, and at Borrowers’ sole expense,
Buyer agrees to use commercially reasonable efforts to make available to
Borrowers during regular business hours certain former employees of Borrowers,
if any, that may be hired by Buyer to the extent reasonably necessary to assist
Borrowers in: (i) the preparation and filing of income and other tax returns of
Borrowers and their Affiliates for the 2009 tax year and a portion of the 2010
tax year, and (ii) the discharge of liens and other Encumbrances against
Borrowers or their assets.  The preceding sentence shall not impose
any obligation on the part of any Borrower to request Buyer’s assistance in the
matters described above.  Obligors shall reimburse Buyer for all
employee compensation associated with the assistance provided by the employees
of Buyer to Borrowers.




25




Section
7.4 Access to Business
Records




Notwithstanding
anything to the contrary herein, after the Closing Date, Borrowers, Rosenthal
and/or their duly authorized representatives shall have the right, during
reasonable business hours and upon three (3) Business Days’ notice, to inspect,
examine and make copies of the Business Records containing records and
information of Borrowers through the Closing Date and all records and
documentation related to permanent placement receivables, reasonably necessary
for the purpose of addressing audit and regulatory matters with any Governmental
Authority.  The right of Borrowers and Rosenthal to inspect, examine
and make copies of such Business Records under this Section 7.4 shall
survive for a period of five (5) years from the Closing Date and such right of
Borrowers and Rosenthal with respect to the permanent placement receivables
shall survive for  period of three (3) months from the Closing
Date.




ARTICLE
VIII




ADDITIONAL AGREEMENTS OF THE
PARTIES




Section
8.1 Access to
Information




Upon
reasonable prior notice, Obligors shall afford to the officers, employees,
accountants, counsel and other agents and representatives of Buyer and Rosenthal
reasonable access at reasonable times, during the period prior to the Closing
Date or the earlier termination of this Agreement, to all of Borrowers’
properties, books, contracts, commitments and records.  In addition,
during such period, Obligors shall furnish to Buyer and/or Rosenthal all
information concerning the Business and Borrowers’ properties and personnel as
Buyer and/or Rosenthal may reasonably request, and shall make available to Buyer
and/or Rosenthal the appropriate individuals (including attorneys, accountants
and other professionals) for discussion of the Business and Borrowers’
properties and personnel as Buyer and/or Rosenthal may reasonably
request.  Notwithstanding the foregoing, no such review, inquiry or
investigation shall affect any representations or warranties of any Parties
herein or the conditions to the obligations of any Parties.




Section
8.2 Commercially
Reasonable Efforts; Further Assurances




(a) Upon
the terms and subject to the conditions hereof, each of the Parties agrees to
use its commercially reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
Transactions, including obtaining all consents, waivers, authorizations and
approvals from Governmental Authorities and other third parties required for the
consummation of the Transactions.




(b) From
time to time after the Closing, at the request of Buyer and without further
consideration, Rosenthal and Obligors agree on their own behalf, as well as on
behalf of their parents, subsidiaries, Affiliates, successors, assigns and legal
representatives, to execute and deliver to Buyer any further documents or
instruments and perform any further acts that may reasonably be deemed necessary
or desirable by Buyer to vest, record, perfect, support and/or confirm the
rights herein conveyed.  Nothing herein shall be deemed a waiver by
Buyer of its right to receive at the Closing an effective assignment of such
rights by Rosenthal as otherwise set forth in this Agreement.




26




(c) From
time to time after the Closing, at the request of Buyer and without further
consideration, Obligors agree on their own behalf, as well as on behalf of their
parents, subsidiaries, Affiliates, successors, assigns and legal
representatives, to take such actions as may be necessary and to otherwise
cooperate with Buyer in facilitating the transfer to Buyer of: (i) Obligors’
relationships with the Employee Assets and (ii) Obligors’ relationships with its
clients and customers, and all accounts related thereto (other than those
relationships and accounts in the Excluded Industries).




Section
8.3 Public
Announcements




Each of
the Parties agrees that no press release or announcement concerning this
Agreement or the Transactions shall be issued by it or any of its Affiliates
without the prior consent of the other Parties (which consent shall not be
unreasonably withheld or delayed), except as such release or announcement may be
required by applicable Law or the rules or regulations of any securities
exchange, in which case such Party shall use its commercially reasonable efforts
to allow the other Party reasonable time to comment on such release or
announcement in advance of such issuance.




Section
8.4 Transfer
Taxes




Buyer
shall pay, when due, all transfer, documentary, sales, use, stamp, registration
and other similar Taxes, and all conveyance fees, recording charges and other
fees and charges (including any penalties and interest) incurred in connection
with the consummation of purchase of the Purchased Assets by the Buyer and
shall, at its own expense, file all necessary Returns and other documentation
with respect to such Taxes, fees and charges.  Obligors and Rosenthal
shall cooperate with Buyer in the preparation and execution of these Returns, or
other documentation.




Section
8.5 Release of
Security Interests




Effective
as of the Closing Date, to the extent Rosenthal has any security interest or
other liens in any of the Purchased Assets, Rosenthal shall release all security
interests and other liens granted in favor of Rosenthal with respect to the
Purchased Assets.




Section
8.6 Release by
Obligors




Effective
as of the Closing Date, except for such rights expressly provided herein, and
except for Obligors’ right to receive  any remaining Collateral after
all Obligations have been fully and completely paid and satisfied, each Obligor,
on behalf of itself and their affiliates, subsidiaries and, to the full extent
applicable, their general partners, limited partners, members, successors,
assigns, attorneys, employees, agents, representatives, officers and directors,
hereby release Rosenthal, including, its respective affiliates, subsidiaries,
successors, assigns, attorneys, employees, agents, representatives, officers and
directors, from all claims, rights, demands, debts, liabilities, actions and
causes of action of any and every type or nature whatsoever, whether known or
unknown, whether arising in law or equity, or by tort or contract, relating
directly or indirectly to each Obligor and the Loan Documents.




27




Section
8.7 Consents




Each
Obligor shall use its commercially reasonable efforts to, on or prior to the
Closing Date, obtain from the counterparty to each contract, agreement, lease,
license or other instrument set forth in Section 3.4 of the
Obligor Disclosure Schedule, such counterparty’s required consent to the
Transactions, in the case of any Assumed Contracts, on terms reasonably
acceptable to Buyer (the “Consents”).  Notwithstanding
anything to the contrary herein, the inability of Obligors to obtain the
Consents, despite their commercially reasonable efforts, shall not, by itself
(i) constitute a failure of a condition to Closing, or (ii) prevent a Closing or
give any Party the right to terminate this Agreement.  The inability
to convey the Assumed Contracts shall not affect or reduce the Purchase Price,
and such inability shall cause the Assumed Contracts to be excluded from the
Purchased Assets and the Assumed Liabilities.




Section
8.8 No
Solicitation




From and
after the date of this Agreement, until the earlier of the Closing or the
termination of this Agreement pursuant to Section 10.1, (i) the Obligors and
Rosenthal shall, and in each case cause their and its respective
representatives, directors, officers, partners, employees, counsel, accountants,
advisors and other authorized representative (collectively, “Representatives”) to
terminate any existing discussions with third parties relating to any sale of
the equity interests in any Obligor, any sale of the Business or any sale of the
Purchased Assets, any merger of any Obligor or any joint venture or business
combination involving any Obligor; and (ii)  the Obligors and
Rosenthal shall not and each shall cause their and its respective
Representatives not to, directly or indirectly, initiate, solicit or engage in
discussions or negotiations with, or provide any information to, or otherwise
cooperate with, encourage or assist, any third party regarding any such
transaction described in inquiries or proposals described in (i)
above.  The Obligors and Rosenthal agree to immediately advise the
Buyer of any inquiries or proposals received from third parties regarding any
such transaction.




ARTICLE
IX




CONDITIONS TO THE
CLOSING




Section
9.1 Conditions to
Obligations of Each Party




The
respective obligations of each Party to consummate the Transactions shall be
subject to the satisfaction or waiver (where permissible), on or prior to the
Closing Date, of the following condition:  no Governmental Authority
shall have enacted, issued, promulgated, enforced or entered any Law or Order
(whether temporary, preliminary or permanent) that is then in effect and has the
effect of making the Transactions illegal or otherwise preventing or prohibiting
consummation of the Transactions.




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Section
9.2 Additional
Conditions to Obligations of Buyer




The
obligation of Buyer to consummate the Transactions shall also be subject to the
satisfaction or waiver (where permissible), on or prior to the Closing Date, of
each of the following conditions:




(a) The
representations and warranties of the Obligors set forth in Article III of this
Agreement and the representations and warranties of Rosenthal set forth in Article IV of this
Agreement (i) that are qualified by the words “material” or “material adverse
effect” shall be true and correct in all respects on and as of the Closing Date
as if made on and as of such date and (ii) that are not so qualified shall be
true and correct in all material respects on and as of the Closing Date as if
made on and as of such date, except in any such case to the extent that any such
representation or warranty is made as of a specified date, in which case such
representation or warranty shall remain true and correct in all material
respects, as the case may be, as of such date.




(b)
Obligors and Rosenthal shall in all material respects have performed or complied
with each obligation and covenant to be performed or complied with by Obligors
and Rosenthal hereunder on or prior to the Closing Date, including the
deliveries under Section
2.6(b).




(c) Buyer
shall have received a certificate of Rosenthal, dated the Closing Date, signed
by an officer of Rosenthal, to the effect that the conditions specified in Sections 9.2(a) and
(b) with
respect to Rosenthal have been satisfied.




(d) Buyer
shall have received a certificate of Obligors, dated the Closing Date, signed by
an officer of Obligors, to the effect that the conditions specified in Sections 9.2(a) and
(b) with
respect to Obligors have been satisfied.




(e) Buyer
shall have received all documentation as required by Section
2.6(b).




(f) Buyer
shall have received a Service and Collections Agreement, substantially in the
form of Exhibit
F dated the Closing Date and duly executed by Rosenthal and Obligors (the
“Service and
Collections Agreement”).




(g) Buyer
shall have received a Consulting Agreement, substantially in the form attached
hereto as Exhibit
G dated the Closing Date and duly executed by Eric Goldstein (the “Consulting
Agreement”).




(h) Buyer
shall have received a legal opinion addressed to Buyer from counsel to Obligors,
substantially in the form attached hereto as Exhibit
H.




(i) Buyer
shall have received the Assignment and Assumption Agreement, substantially in
the form of Exhibit
I (the “Assignment and Assumption
Agreement”) dated the Closing Date and duly executed by GT, GT’s
operating affiliates party to the 2007 Loan Agreement, Rosenthal, Summa Capital
Corp and ICG.




(j)
 Buyer shall have received the Amended and Restated Service Agreement,
substantially in the form of Exhibit J (the “Service Agreement”)
dated the Closing Date and duly executed by ICG, GT and Rosenthal.




29




(k) Buyer
shall have received the Assignment of Domain Names, substantially in the form of
Exhibit K dated
the Closing Date and duly executed by Borrowers and Rosenthal.




(l) Buyer
shall have received the Assignment of Trade Names, substantially in the form of
Exhibit L dated
the Closing Date and duly executed by Obligors and Rosenthal.




(m) Buyer
shall have received the documents described in Section 6.4
hereof.




(n) Buyer
shall have received evidence that Obligors have fully paid the judgment in favor
of the Workers’ Compensation Board of the State of New York against Aldan Troy
Group Inc., effective July 14, 2009, in the amount of $39,309.05, and all
interest, penalties and assessments accrued thereon or with respect
thereto.




(o)
Rosenthal shall deliver and authorize the Buyer to file a UCC-3 Amendment
releasing the Purchased Assets acquired by the Buyer in connection with the
Transactions contemplated by this Agreement




(p)
Rosenthal shall have provided Buyer with a list of all objections to the Article
9 Sale that Rosenthal shall have received through the Closing Date.




(q) Buyer
shall have received a letter agreement dated the Closing Date and duly executed
by Rosenthal pursuant to which Rosenthal shall agree to reduce the amount of the
guarantees provided by each of the Guarantors to the extent Habib Noor acquires
a portion of the Business or the Purchased Assets from Buyer and provides
Rosenthal with a substitute guarantee acceptable to Rosenthal in its discretion
in accordance with its then generally applicable internal underwriting
standards.




(r) Buyer
shall have received a share repurchase agreement dated the Closing Date (the
“Share Repurchase
Agreement”) for the CRS Shares duly executed by Rosenthal.




Section
9.3 Additional
Conditions to Obligations of Rosenthal




The
obligation of Rosenthal to consummate the Transactions shall also be subject to
the satisfaction or waiver (where permissible), on or prior to the Closing Date,
of each of the following conditions:




(a) The
representations and warranties of Buyer set forth in Article V of this
Agreement and the representations and warranties of the Obligors set forth in
Article III of
this Agreement (i) that are qualified by the words “material” or “material
adverse effect” shall be true and correct in all respects on and as of the
Closing Date as if made on and as of that date and (ii) that are not so
qualified shall be true and correct in all material respects on and as of the
Closing Date as if made on and as of such date, except in any such case to the
extent that any such representation or warranty is made as of a specified date,
in which case such representation or warranty shall remain true and correct in
all material respects, as the case may be, as of such date.




(b)
Buyer, on the one hand, and the Obligors, on the other hand, shall in all
material respects have performed or complied with each obligation and covenant
to be performed or complied with by them hereunder on or prior to the Closing
Date, including the deliveries under Section
2.6(c).




30




(c)
Rosenthal shall have received a certificate of Buyer, dated the Closing Date,
signed by an executive officer of Buyer, to the effect that the conditions
specified in Sections 9.3(a)
and (b) have
been satisfied.




(d)
Rosenthal shall have received all documentation as required by Section
2.6(c).




(e)
Rosenthal shall have received the Service and Collections Agreement, duly
executed by Buyer.




(f)
Rosenthal shall have received the Assignment and Assumption Agreement dated the
Closing Date and duly executed by Buyer.




(g)
Rosenthal shall have received the Service Agreement dated the Closing Date and
duly executed by Buyer.




(h)
Rosenthal shall have received evidence that Obligors have fully paid the
judgment in favor of the Workers’ Compensation Board of the State of New York
against Aldan Troy Group Inc., effective July 14, 2009, in the amount of
$39,309.05, and all interest, penalties and assessments accrued thereon or with
respect thereto.




(i)
Rosenthal shall have received the CRS Shares.




(j)
Rosenthal shall have received the Share Repurchase Agreement duly executed by
CRS.




(k) Rosenthal
shall have received an agreement duly executed by Wells Fargo Credit Finance
dated as of the Closing Date pursuant to which Wells Fargo Credit Finance shall
agree to comply with the terms of the Service and Collections Agreement in
respect of the allocation of receivable collections, which agreement shall be
reasonably acceptable to Rosenthal.




ARTICLE
X




TERMINATION




Section
10.1 Termination




This
Agreement may be terminated and the Transactions may be abandoned at any time
prior to the Closing Date:




(a) by
mutual written consent of Buyer and Rosenthal;




(b) by
Rosenthal or Buyer, if the Closing shall not have become effective on or before
April 5, 2010 (the “Outside Date”);
provided, however, that the right to terminate this Agreement under this Section 10.1(b) shall
not be available to any Party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Transactions
to be consummated on or before the Outside Date;




31




(c) by
any Party, if any Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any Law or Order that is, in each case, then in
effect and is final and nonappealable and has the effect of making the
Transactions illegal or otherwise preventing or prohibiting consummation of the
Transactions; provided, however, that the
right to terminate this Agreement under this Section 10.1(c) shall
not be available to any Party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, any such Law or Order to have
been enacted, issued, promulgated, enforced or entered;




(d) by
Buyer (if Buyer is not in material breach of any of its representations,
warranties, covenants, conditions or agreements under this Agreement), if there
has been a material breach by Rosenthal of any of its representations,
warranties, covenants, conditions or agreements contained in this Agreement, or
if any representation or warranty of Rosenthal shall have become inaccurate, in
either case that would result in a failure of a condition set forth in Section 9.2(a) or
Section
9.2(b);




(e) by
Buyer (if Buyer is not in material breach of any of its representations,
warranties, covenants, conditions or agreements under this Agreement), if there
has been a material breach by any of Obligors of any of their respective
representations, warranties, covenants, conditions or agreements contained in
this Agreement, or if any representation or warranty of any of Obligors shall
have become inaccurate, in either case that would result in a failure of a
condition set forth in Section 9.2(a) or
Section 9.2(b);
or




(f) by
Rosenthal (if Rosenthal is not in material breach of any of its representations,
warranties, covenants, conditions or agreements under this Agreement), if there
has been a material breach by Buyer of any of their respective representations,
warranties, covenants, conditions or agreements contained in this Agreement, or
if any representation or warranty of Buyer shall have become inaccurate, in
either case that would result in a failure of a condition set forth in Section 9.3(a)or
Section
9.3(b).




(g) by
Rosenthal, if Buyer fails to pay the Closing Payment to Rosenthal on or before
April 2, 2010.




Section
10.2 Effect of
Termination




(a) In
the event of the termination of this Agreement pursuant to Section 10.1, this
Agreement shall forthwith become void, and there shall be no liability on the
part of any Party hereto or any of their respective Affiliates or the directors,
officers, partners, members, managers, employees, agents or other
representatives of any of them, and all rights and obligations of each Party
hereto shall cease, except that nothing herein shall relieve any Party from
liability for any willful breach of this Agreement.  Without limiting
the foregoing, Sections 2.5(b)(i), 3.14,
4.6, 5.4, 8.3, 10.2, 12.6, 12.9, 12.10 shall survive the termination of
this Agreement.  Notwithstanding anything to the contrary contained in
this Agreement, nothing shall limit or prevent any Party from exercising any
rights or remedies it may have under Section 12.9 hereof
in lieu of terminating this Agreement pursuant to Section
10.1.




32




ARTICLE
XI




INDEMNIFICATION
PROVISIONS




Section
11.1 Borrowers’
Indemnification Obligation




Each
Borrower agrees that, from and after the Closing, it shall, jointly and
severally, indemnify, defend and hold harmless Buyer, Rosenthal, their
respective officers, directors, Affiliates, partners, members, managers,
employees, agents and other representatives from and against any damages,
claims, losses, liabilities, costs and expenses (including, without limitation,
reasonable attorneys’ fees) (each, a “Liability” and,
collectively, “Liabilities”)
incurred by any of the foregoing Persons arising out of (a) any inaccuracy or
breach of any representation or warranty of Obligors contained in Article III of this
Agreement, (b) any breach of any covenant or agreement of Obligors contained in
this Agreement, (c) any successor liability claims or claims with respect to
liens on the Purchased Assets whether senior to or junior to Rosenthal’s
security interest in the Purchased Assets, (d) any of the Excluded Liabilities
or (e) the operation of the Business prior to the Closing.  For the
avoidance of doubt, Mr. Goldstein has no indemnification obligations under this
Agreement for the benefit of any other Party.  The indemnification
obligation set forth in clause (c) above shall be joint and several with
Rosenthal.




Section
11.2 Rosenthal’s
Indemnification Obligation




Rosenthal
agrees that, from and after the Closing, it shall indemnify, defend and hold
harmless Buyer, its officers, directors, Affiliates, partners, members,
managers, employees, agents and other representatives from and against any
Liabilities incurred by any of the foregoing Persons arising out of (a) any
inaccuracy or breach of any representation or warranty of Rosenthal contained in
Article IV of
this Agreement (b) any breach of any covenant or agreement of Rosenthal
contained in this Agreement, (c) any of the Excluded Liabilities and (d) any
successor liability claims or claims with respect to liens on the Purchased
Assets whether senior to or junior to Rosenthal’s security interest in the
Purchased Assets.  The indemnification obligation set forth in clause
(d) above shall be joint and several with the Borrowers.  Any
indemnification which Rosenthal is required to make hereunder shall be offset
against payments due under Section 2.5(b)(iii)(B).




Section
11.3 Buyer’s
Indemnification Obligation




(a) Buyer
agrees that, from and after the Closing, it shall indemnify, defend and hold
harmless Rosenthal and Borrowers, their respective officers, directors,
Affiliates, partners, members, managers, employees, agents and other
representatives from and against any Liabilities incurred by any of the
foregoing Persons arising out of (i) any inaccuracy or breach of any
representation or warranty of Buyer contained in Article V of this
Agreement, (ii) any breach of any covenant or agreement of Buyer contained in
this Agreement, (iii) any of the Assumed Liabilities or (iv) the operation of
the Business from and after the Closing.




(b) Buyer
agrees that from and after the Closing, it shall indemnify, defend and hold
harmless Rosenthal and Borrowers, their respective officers, directors,
Affiliates, partners, members, managers, employees, agents and representatives
from and against any Liabilities incurred by any of the foregoing Persons
arising out of claims asserted or brought against any of the aforementioned
Persons by Habib Noor in connection with this Agreement, the Letter of Intent,
or the transactions contemplated by this Agreement.




33




Section
11.4 Procedures for
Indemnification for Third Party Claims




For
purposes of this Article XI, any Party
entitled to be indemnified under Article XI is
referred to herein as an “Indemnified Party,”
and any Party obligated to provide indemnification under Article XI is
referred to herein as an “Indemnifying
Party.”  The obligations and liabilities of the Parties under
this Article XI
with respect to, relating to or arising out of claims of third parties
(individually, a “Third Party Claim”
and, collectively, the “Third Party Claims”)
shall be subject to the following terms and conditions:




(a) The
Indemnified Party shall give the Indemnifying Party prompt written notice (but
in no event later than ten (10) Business Days following the receipt) of any
Third Party Claim, and the Indemnifying Party may undertake the defense of that
claim by representatives chosen by it and reasonably satisfactory to the
Indemnified Party; provided that (i)
such Third Party Claim involves only monetary (and does not involve criminal or
quasi criminal allegations or a claim 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 (ii) the
Indemnifying Party shall have acknowledged in writing its indemnification
obligations hereunder in respect of such claim.  Any such notice of a
Third Party Claim shall identify with reasonable specificity the basis for the
Third Party Claim, the facts giving rise to the Third Party Claim and the amount
of the Third Party Claim (or, if such amount is not yet known, a reasonable
estimate of the amount of the Third Party Claim).  The Indemnified
Party shall make available to the Indemnifying Party copies of all relevant
documents and records in its possession.  Failure of an Indemnified
Party to give prompt notice shall not relieve the Indemnifying Party of its
obligation to indemnify, except to the extent that the failure to so notify
materially prejudices the Indemnifying Party’s ability to defend such claim
against a third party.




(b) If
(i) the Indemnifying Party disputes its liability, (ii) the Indemnifying Party
accepts it liability but chooses not to defend the Third-Party Claim, (iii) 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 (iv) the Indemnifying Party fails to give notice of its
acceptance or dispute of its liability within the thirty-day notice 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 thirty-day notice 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.  Notwithstanding the foregoing
provisions of this Section 11.4(b), the
Indemnifying Party will not bear the costs and expenses of the Indemnified
Party’s defense pursuant to this Section 11.4 or of
the Indemnifying Party’s participation therein at the Indemnified Party’s
request.




34




(c) Each
Indemnified Party shall have the right to employ separate counsel in such claim
and participate in the defense thereof, but the fees and expenses of such
counsel (other than expenses reasonably incurred prior to the Indemnifying
Party’s assumption of the defense) shall be at the expense of each Indemnified
Party unless: (i) the Indemnifying Party has agreed to pay such expenses; (ii)
the Indemnifying Party has failed promptly to assume the defense and employ
counsel reasonably satisfactory to such Indemnified Party; or (iii) the named
parties to any such Proceeding (including any impleaded parties) include any
Indemnified Party and the Indemnifying Party or an Affiliate of the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that either
(x) there is reasonably likely to be one or more legal defenses available to it
which are different from or in addition to those available to the Indemnifying
Party or such Affiliate or (y) a conflict of interest is reasonably likely to
exist if such counsel represents such Indemnified Party and the Indemnifying
Party or its Affiliate; provided, however, that the Indemnifying Party shall
not, in connection with any one such Proceeding or separate but substantially
similar or related proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be responsible hereunder for the fees and
expenses of more than one such firm of separate counsel (in addition to any
local counsel), which counsel shall be designated by such Indemnified
Party.




(d)
Without the consent of the Indemnified Party, the Indemnifying Party or Parties
shall not consent to, and the Indemnified Party shall not be required to agree
to, the entry of any judgment or enter into any settlement (A) where the
Third-Party Claim which the Indemnifying Party proposes to settle involves the
business reputation of the Purchaser or its Affiliates or the possible criminal
culpability of the Purchaser or its Affiliates or any of their respective
officers, directors or employees, and (B) unless such judgment or settlement (i)
includes as an unconditional term thereof the giving of a release from all
liability with respect to such claim by each claimant or plaintiff to each
Indemnified Party that is the subject of such Third-Party Claim, (ii) provides
that the sole relief is monetary damages which are paid in full by the
Indemnifying Party or Parties (and such monetary damages shall be actually paid
in full by the Indemnifying Party or Parties) and (iii) does not include a
statement as to or any admission of fault, culpability or a failure to act, by
or on behalf of any Indemnified Party.




Section
11.5 Indemnification
Limitations




(a) Time Limits On
Indemnification.  No claim for indemnification hereunder on
account of a breach or inaccuracy of a representation or warranty shall be made
after the expiration of the survival periods referred to in Section 12.1 of this
Agreement.  No claim for indemnification for any other claim hereunder
shall be made after the second anniversary of the Closing
Date.  Notwithstanding the foregoing, if a written claim or written
notice for indemnification is given under this Article XI with
respect to (i) any representation or warranty or (ii) any other indemnification
claim prior to the expiration of its applicable survival period, the claim for
indemnification with respect thereto shall continue until such claim is finally
resolved.




(b) Net
Recovery.  The amount which an Indemnified Party shall be
entitled to receive from an Indemnifying Party under this Article XI with
respect to any indemnifiable Liability shall be net of any recovery actually
received by such Indemnified Party from unaffiliated third parties (including
insurance proceeds (except from self-insurance programs), counterclaims,
subrogation actions, warranties and indemnification from, and other claims
against, third parties and the like).




35




(c) Damage
Limitation.  An Indemnified Party shall not be entitled to
indemnification for consequential, punitive, indirect, incidental, speculative
or special damages or lost profits, except in the event of fraud.




(d) Waiver of
Conditions.  The right of an Indemnified Party to
indemnification hereunder shall not be affected by any investigation conducted
with respect to the accuracy of or compliance with any of the representations,
warranties, covenants or obligations set forth in this
Agreement.  Notwithstanding the foregoing, the waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, shall negate the right to
indemnification or other remedy based on such representations, warranties,
covenants and obligations.




(e) Right to
Indemnification.  No Party shall have a right to
indemnification hereunder unless the Liabilities incurred by such Party, in the
aggregate, exceed $25,000, at which time such Party shall be entitled to the
entire amount of Liabilities incurred by such Party, including the initial
$25,000.




(f) Maximum Recovery. (i)
The maximum aggregate recovery that Buyer shall be entitled to receive from
Rosenthal under this Article XI shall not
exceed $1,000,000 in the aggregate for claims made through the one year
anniversary of the Closing Date and the lesser of (x) $750,000 and (y)
$1,000,000 minus Liabilities in respect of claims made through the one year
anniversary of the Closing Date, in the aggregate for claims made
thereafter.  The maximum aggregate recovery that Buyer shall be
entitled to receive from the Borrowers under this Article XI shall not
exceed $1,000,000 in the aggregate for claims made through the one year
anniversary of the Closing Date and the lesser of (x) $750,000 and (y)
$1,000,000 minus Liabilities in respect of claims made through the one year
anniversary of the Closing Date, in the aggregate for claims made
thereafter.  Except with respect to claims made pursuant to Section 11.3(b), the
maximum aggregate recovery that Rosenthal and the Obligors, in the aggregate,
shall be entitled to receive from the Buyer under this Article XI shall be
$1,000,000 in the aggregate for claims made through the one year anniversary of
the Closing Date and the lesser of (x) $750,000 and (y) $1,000,000 minus
Liabilities in respect of claims made through the one year anniversary of the
Closing Date in the aggregate for claims made thereafter.




(ii)
Notwithstanding the foregoing or anything to the contrary contained herein, the
Parties hereto acknowledge and agree that any indemnification claims which apply
to the maximum aggregate recovery amount to which Buyer is entitled pursuant to
Section
11.5(f)(i) above shall only be applicable to the extent that Buyer
actually incurs expenses or is determined liable.  By way of example,
in the event that there is a Third-Party Claim against both Buyer and Rosenthal
and Rosenthal assumes the defense of such Third-Party Claim (thereby accepting
indemnification liability) and a judgment is entered against Rosenthal for such
claim and there is no finding of liability on the part of Buyer but there is a
finding of liability on the part of Rosenthal, then the expenses incurred by
Rosenthal in defending such claim and any amounts paid by Rosenthal to satisfy
such judgment shall not apply to the maximum aggregate recovery amount to which
Buyer is entitled pursuant to Section 11.5(f)(i)
above.




36




Section
11.6 Exclusive
Remedy




Except as
set forth in Sections
2.5(b)(i) and 12.9, the remedies
provided in this Article XI shall be
the sole and exclusive remedies of the Parties with respect to any claim
hereunder.




ARTICLE
XII




GENERAL
PROVISIONS




Section
12.1 Survival of
Representations and Warranties; Disclosure




The
representations and warranties made by Obligors in Article III of this
Agreement shall survive until the date that is 15 months after the Closing Date;
provided, however that the
representations and warranties made by Obligors in Section 3.13 hereof
shall terminate when the applicable statutes of limitations with respect to the
liabilities in question expire (after giving effect to any extensions or waivers
thereof), plus thirty (30) days.  The representations and warranties
made by Buyer in Article V of this
Agreement shall survive until the date that is 15 months after the Closing
Date.  The representations and warranties made by Rosenthal in Article IV of this
Agreement shall survive until the date that is 15 months after the Closing
Date.  Disclosure by any Party in any section of its disclosure
schedule shall be deemed disclosure with respect to all applicable sections so
long as it is readily apparent from the context that the disclosure in one
section is also applicable to such other sections.




Section
12.2 Notices




All
notices and other communications under this Agreement shall be in writing and
shall be deemed given (a) when delivered personally by hand (with written
confirmation of receipt) or (b) one Business Day following the day sent by
nationally-recognized overnight courier (with written confirmation of receipt),
in each case at the following addresses (or to such other address as a Party may
have specified by notice given to the other Party pursuant to this
provision):




(a) if to
Rosenthal:




Rosenthal
& Rosenthal, Inc.


1370
Broadway


New York,
New York  10018


Telephone:
(212) 356-1415


Attention:
James Occhiogrosso




with a
copy to:




Kaye
Scholer LLP


425 Park
Avenue


New York,
New York 10022


Telephone:
(212) 836-8505


Attention:  Benjamin
Mintz, Esq.




37




(b) If to
Buyer or Guarantors:




Corporate
Resource Development Inc.


160
Broadway, 15th
Floor


New York,
NY  10038


Telephone:
(212) 346-7960


Attention:  Jay
Schecter




with a
copy to:




Bryan
Cave LLP


1290
Avenue of the Americas


New York,
New York  10104


Telephone:
(212) 541-2000


Attention:  Kenneth
L. Henderson, Esq.




(c) If to
Obligors:




GT
Systems Inc.


295
Madison Avenue, 14th Floor


New York,
New York 10017


Telephone:
(917) 270-1380


Attention:
Eric Goldstein




with a
copy to:




Todtman,
Nachamie, Spizz & Johns, P.C.


425 Park
Avenue


New York,
New York 10022


Telephone:
(212) 754-9400


Attention:  Alex
Spizz, Esq.




Any
notice or other communication that has been given or made as of a date that is
not a Business Day shall be deemed to have been given or made on the next
succeeding day that is a Business Day.




Section
12.3 Headings




The
headings contained in this Agreement and the disclosure schedules are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement or the disclosure schedules.  Unless
the context of this Agreement otherwise requires, words of any gender are deemed
to include each other gender and words using the singular or plural number also
include the plural or singular number, respectively.




Section
12.4 Entire
Agreement




This
Agreement, together with the exhibits and schedules attached hereto, any other
agreement or certificates delivered pursuant hereto constitute the entire
agreement, and supersede all prior agreements and undertakings, both written and
oral, between the parties hereto with respect to the subject matter
hereof.




38




Section
12.5 Assignment;
Parties in Interest




Neither
this Agreement nor any rights or obligations hereunder shall be assigned by any
Party without the prior written consent of the other Party.  This
Agreement shall be binding upon and inure solely to the benefit of each Party
hereto and its successors and permitted assigns, and nothing in this Agreement,
express or implied, is intended to confer upon any other Person any rights or
remedies of any nature whatsoever under this Agreement, other than Article XI hereof
(which are intended to be for the benefit of the Persons covered thereby and may
be enforced by such Persons).




Section
12.6 Governing Law;
Consent to Jurisdiction




This
Agreement shall be governed by, and construed in accordance with, the Laws of
the State of New York applicable to contracts executed in and to be performed
entirely in that State, without regard to conflicts of Laws principles thereof
to the extent that the general application of the Laws of another jurisdiction
would be required thereby.  The Parties hereto hereby irrevocably
submit to the jurisdiction of any state or federal court sitting in the County
of New York, State of New York, in any action or proceeding arising out of or
relating to this Agreement, and the Parties hereby irrevocably agree that all
claims in respect of such action or proceeding may be heard and determined
exclusively in such state or federal court.  The Parties hereto hereby
irrevocably waive, to the fullest extent permitted by Law, any objection which
they or any of them may now or hereafter have to the laying of the venue of any
such action or proceeding brought in any such court, and any claim that any such
action or proceeding brought in any such court has been brought in an
inconvenient forum.  EACH PARTY 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 OR THE
ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF.




Section
12.7 Counterparts




This
Agreement may be executed and delivered (including by facsimile transmission or
..pdf) in one or more counterparts, and by the parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same
agreement.




Section
12.8 Severability




In case
any provision in this Agreement shall be held invalid, illegal or unenforceable
in a jurisdiction, such provision shall be modified or deleted, as to the
jurisdiction involved, only to the extent necessary to render the same valid,
legal and enforceable, and the validity, legality and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired thereby
nor shall the validity, legality or enforceability of such provision be affected
thereby in any other jurisdiction.




39




Section
12.9 Specific
Performance




(a) The
Parties hereto agree that time is of the essence of the Transactions and if the
Closing shall not have occurred on or before the Outside Date, Buyer shall be
entitled to seek specific enforcement of the terms and provisions of this
Agreement, unless Buyer’s failure to fulfill any obligation under this Agreement
has been the cause of, or resulted in, the failure of the Transactions to be
consummated on or before the Outside Date.




(b) The
Parties hereto further agree that irreparable damage would occur in the event
that the provisions of Sections 6.3, 8.3, and 8.8 were not
performed in accordance with their specific terms or were otherwise
breached.  Accordingly, the Parties further agree that Buyer shall be
entitled to seek an injunction or restraining order to prevent breaches of these
sections and to seek to enforce specifically the terms and provisions thereof,
this being in addition to any other right or remedy to which Buyer may be
entitled under this Agreement, at law or in equity.




Section
12.10 Fees and
Expenses




Except as
otherwise expressly provided herein, all fees, costs and expenses incurred in
connection with this Agreement and the Transactions shall be paid by the Party
incurring the same, regardless of the termination, if any, of this Agreement
pursuant to Section
10.1.  Notwithstanding the foregoing, any costs and expenses
incurred by Rosenthal hereunder and any transactions contemplated hereunder
shall become Obligations under the 2007 Loan Agreement and Obligors shall,
jointly and severally, indemnify Rosenthal for such fees and
expenses.




Section
12.11 Amendment




This
Agreement may not be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by Obligors, Buyer,
Rosenthal, and the Guarantors (with respect to any provision applicable to
them).




Section
12.12 Waiver




At any
time prior to the Closing Date, any Party hereto may (a) extend the time for the
performance of any of the obligations or other acts of the other Party hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions contained herein.  Any such
extension or waiver shall be valid if set forth in an instrument in writing
signed by the Parties hereto.  The failure of any Party hereto to
assert any of its rights hereunder shall not constitute a waiver of such
rights.




Section
12.13 Guaranty




(a) The
Guarantors hereby irrevocably and unconditionally guarantee the due and punctual
payment of the Cash Purchase Price and all other monetary obligations of the
Buyer to Rosenthal under this Agreement.  Guarantors acknowledge and
agree that their obligations hereunder are absolute, unconditional and
irrevocable, that this is a continuing guarantee of payment, and that this
guarantee shall remain in full force and effect and be binding upon the
Guarantors, and their respective successors and assigns until the indefeasible
payment and satisfaction in full of the obligations guaranteed
hereby.




40




(b) Each
Guarantor hereby waives presentment to, demand of payment from and protest to
Buyer of the Cash Purchase Price and all other monetary obligations of the Buyer
to Rosenthal under this Agreement, and also waives notice of acceptance of its
guaranty and notice of protest for nonpayment.  The obligations of
each Guarantor hereunder shall not be affected by (i) the failure of Rosenthal
to assert any claim or demand or to enforce any right or remedy against Buyer or
the Guarantors or (ii) the failure of Rosenthal to exercise any right or remedy
against any other guarantor of the Cash Purchase Price and all other monetary
obligations of the Buyer to Rosenthal under this Agreement.




(c) The
obligations of each Guarantor hereunder shall not be subject to any limitation,
impairment or termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of Cash
Purchase Price, all other monetary obligations of the Buyer to Rosenthal or
otherwise.  Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of Rosenthal to assert any claim or demand or
to enforce any remedy under this Agreement, or any guaranty or any other
agreement, by any waiver or modification of any provision thereof, by any
default, failure or delay, willful or otherwise, in the performance of any
obligations, or by any other act or omission which may or might otherwise in any
manner or to any extent vary the risk or reduce or extinguish the liability of
such Guarantor or otherwise operate as a discharge of such Guarantor as a matter
of law or equity.




(d) Each
Guarantor hereby waives and releases in favor of Rosenthal all rights of
subrogation against or in respect of Buyer and all rights of indemnification,
contribution and reimbursement from Buyer and its property, in each case in
connection with this guaranty and any payments made hereunder, and regardless of
whether such rights arise by operation of law, pursuant to contract or otherwise
until such time as the Cash Purchase Price and all other monetary obligations of
the Buyer to Rosenthal under this Agreement have been fully paid.




ARTICLE
XIII




CERTAIN
DEFINITIONS




For
purposes of this Agreement, the term:




“2007 Loan Agreement”
shall have the meaning ascribed to it in the Recitals.




“Action” shall have
the meaning ascribed to it in Section
3.6.




“Affiliate” of a
Person means a Person that directly or indirectly, through one or more
intermediaries, Controls, is Controlled by, or is under common Control with, the
first mentioned Person.




“Agreement” shall have
the meaning ascribed to it in the Preamble.




“Article 9” shall have
the meaning ascribed to it in the Recitals.




41




“Article 9 Sale” shall
have the meaning ascribed to it in Section
1.2.




“Assignment and Assumption
Agreement” shall have the meaning ascribed to it in Section
9.2(i).




“Assumed Contracts”
shall have the meaning ascribed to it in Section
2.1(d).




“Assumed Liabilities”
shall have the meaning ascribed to it in Section
2.3.




“Balance Sheet” shall
have the meaning ascribed to it in Section
3.5(a).




“Balance Sheet Date”
shall have the meaning ascribed to it in Section
3.5(a).




“Bill of Sale” shall
have the meaning ascribed to it in Section
2.6(b)(i).




“Borrowers” and “Borrower” shall have
the meanings ascribed to them the Preamble.




“Borrower Employee
Plans” shall have the meaning ascribed to it in Section
3.7.




“Borrower Employees”
shall have the meaning ascribed to it in Section
3.12(a).




“Borrower Organizational
Documents” shall have the meaning ascribed to it in Section
3.3.




“Borrower Permits”
shall have the meaning ascribed to it in Section
3.8.




“Business” means the
business Obligors are engaged in, consisting of the temporary and permanent
placement of employees, other than the portion of such business which relates
exclusively to the Excluded Industries.




“Business Day” means
any calendar day which is not a Saturday, Sunday or federal
holiday.




“Business Records”
shall have the meaning ascribed to it in Section
2.1(c).




“Buyer” shall have the
meaning ascribed to it in the Preamble.




“Buyer Disclosure
Schedule” shall have the meaning ascribed to it in the preamble to Article
V.




“Cash Purchase Price”
shall have the meaning ascribed to it in Section
2.5(a).




“Closing” shall have
the meaning ascribed to it in Section
2.6(a).




“Closing Date” shall
have the meaning ascribed to it in Section
2.6(a).




“Closing Date Payment”
shall have the meaning ascribed to it in Section
2.5(b)(ii).




“Code” means the
Internal Revenue Code of 1986, as amended.




42




“Collateral” shall
have the meaning ascribed to it in the Recitals.




“Consents” shall have
the meaning ascribed to it in Section
8.7.




“Consulting Agreement”
shall have the meaning ascribed to it in Section
9.2(g).




“Control” (including
the terms “Controlled by” and “under common Control with”) means the possession,
directly or indirectly or as trustee or executor, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, as trustee or executor, by contract or
credit arrangement or otherwise.




“CRS” shall have the
meaning ascribed to it in the Preamble.




“CRS Shares” shall
mean the number of shares of CRS common stock issued to Rosenthal on the Closing
Date as part of the Purchase Price with a fair market value (measured based on a
30-day volume-weighted average price) equal to $2,250,000 in the aggregate and
subject to the Share Repurchase Agreement.




“Deposit” shall have
the meaning ascribed to it in Section
2.5(b)(ii).




“Designated Events of
Default” shall have the meaning ascribed to it in the
Recitals.




“Designated Obligor”
means such Obligor as named and designated by Mr. Goldstein as agent for
Obligors in writing to Rosenthal.




“Employee Assets”
shall have the meaning ascribed in Section
2.1(b).




“Encumbrance” means
any charge, claim, community property interest, condition, easement, covenant,
warrant, demand, encumbrance, equitable interest, lien, deed of trust, mortgage,
option, purchase right, pledge, hypothecation security interest, right of first
refusal or other right of third parties or restriction of any kind, including
any restriction on use, voting, transfer, receipt of income or exercise of any
other attribute of ownership, the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement or any
purchase option, call or similar right.




“ERISA” shall have the
meaning ascribed to it in Section
3.7.




“Events of Default”
shall have the meaning ascribed to it in the Recitals.




“Exchange Act” shall
have the meaning ascribed to it in Section
3.4.




“Excluded Assets”
shall have the meaning ascribed to it in Section
2.2.




“Excluded Industries”
means the businesses of GT and Affiliates of Obligors consisting of the
temporary and permanent placement of employees (i) in the light industrial
industry and (ii) for translation and interpreting services.




“Excluded Liabilities”
shall have the meaning ascribed to it in Section
2.4.




“Execution Date” shall
have the meaning ascribed to it in the Preamble.




43




“Financial Statements”
shall have the meaning ascribed to it in Section
3.5(a).




“Fixed Assets” shall
have the meaning ascribed to it in Section
2.1(a).




“Forbearance
Agreement” shall have the meaning ascribed to it in the
Recitals.




“GAAP” means United
States generally accepted accounting principles consistently
applied.




“Governmental
Authority” means any United States federal, state or local government,
governmental, regulatory or administrative authority, agency, self-regulatory
body, instrumentality or commission, and any court, tribunal or judicial or
arbitral body (including private bodies) and any political or other subdivision,
department or branch of any of the foregoing.




“Gross Sales Payments”
shall have the meaning ascribed to it in Section
2.5(b)(iii)(B).




“GT” shall have the
meaning ascribed to it in the Preamble.




“Guarantors” shall
have the meaning ascribed to it in the Preamble.




“ICG” means Integrated
Consulting Group of NY LLC, a New York limited liability company.




“Initial Payment”
shall have the meaning ascribed to it in Section
2.5(b)(ii).




“Intellectual
Property” means all rights of Borrowers in and to (a) patents, patent
applications and patent disclosures, together with all reissuances,
continuations, continuations in part, revisions, extensions, reexaminations,
provisionals, divisions, renewals, revivals, and foreign counterparts thereof
and all registrations and renewals in connection therewith, (b) trademarks,
service marks, trade dress, logos, trade names and corporate names and other
indicia of origin and corporate branding, assumed names and dbas, together with
all translations, adaptations, derivations and combinations thereof and
including all goodwill associated therewith, and all applications, registrations
and renewals in connection therewith, (c) works of authorship, copyrightable
works, copyrights and all applications, registrations and renewals in connection
therewith, (d) mask works and all applications, registrations and renewals in
connection therewith, (e) trade secrets, inventions and confidential business
information (including ideas, research and development, know-how, formulas,
compositions, manufacturing and production processes and techniques, technical
data, designs, drawings, specifications, customer and supplier lists, pricing
and cost information, business and marketing plans and proposals, assembly,
test, installation, service and inspection instructions and procedures,
technical, operating and service and maintenance manuals and data, hardware
reference manuals and engineering, programming, service and maintenance notes
and logs), (f) Internet addresses, uniform resource locaters, domain names,
Websites and Web pages, (g) any and all other intellectual property and
proprietary rights, (h) company-wide telephone numbers and (i) goodwill related
to all of the foregoing, in each case to the extent used or useful in the
operation of the Business or related to the Purchased Assets.




“Indemnified Party”
shall have the meaning ascribed to it in Section
11.4.




44




“Indemnifying Party”
shall have the meaning ascribed to it in Section
11.4.




“IRS” shall have the
meaning ascribed to it in Section
3.7.




“knowledge” means,
with respect to Obligors, the knowledge obtained or obtainable after due inquiry
and reasonable investigation by Mr. Goldstein and/or Kurt Carlson.




“Laws” means any
federal, state or local statute, law, rule, ordinance, code or regulation of any
Governmental Authority.




“Lender Rights” shall
have the meaning ascribed to it in the Recitals.




“Letter of Intent”
shall have the meaning ascribed to it in Section 2.5(b)(i).




“Liability” and,
collectively, “Liabilities” shall
have the meaning ascribed to it in Section
11.1.




“Loan Documents” shall
have the meaning ascribed to it in Section
4.4.




“Loans” shall have the
meaning ascribed to it in the Recitals.




“Location” shall have
the meaning ascribed to it in Section
7.3(a).




“Mr. Goldstein” shall
have the meaning ascribed to it in the Preamble.




“Multiemployer Plan”
shall have the meaning ascribed to it in Section
3.7.




“Multiple Employer
Plan” shall have the meaning ascribed to it in Section
3.7.




“Notice” and “Notices” shall have
the meanings ascribed to them in Section
4.7.




“Notice Date” shall
have the meaning ascribed to it in Section
4.7.




“Obligations” shall
have the meaning ascribed to it in the Recitals.




“Obligor Disclosure
Schedule” means that certain disclosure schedule delivered by Obligors to
Buyer and attached hereto and made part hereof.




“Obligor Material Adverse
Effect” means a material adverse effect on (A) the Business or the
Purchased Assets or (B) the ability of Obligors to consummate the Transactions,
except in each case for any such effect resulting from, arising out of or
relating to (i) general economic conditions in the United States of America or
changes therein which affects the business of the temporary and permanent
placement of employees generally and not the Borrowers’ in particular; (ii)
national or international political conditions, including any engagement in or
escalation of hostilities, pursuant to the declaration of a national emergency
or war, or the occurrence of any military or terrorist attack; or (iv) the
taking of any action by Rosenthal, Buyer or any of their respective
Affiliates.




“Obligors” and “Obligor” shall have
the meanings ascribed to them in the Preamble.




45




“Operating Affiliates”
shall have the meaning ascribed to it in the Preamble.




“Order” shall have the
meaning ascribed to it in Section
3.6.




“Outside Date” shall
have the meaning ascribed to it in Section
10.1(b).




“Over-advances” shall
have the meaning ascribed to it in the Recitals.




“Parties” shall have
the meaning ascribed to it in the Preamble.




“Permits” means
permits, certificates, licenses, approvals and other authorizations from
Governmental Authorities.




“Person” means an
individual, corporation, partnership, limited liability company, association,
trust, unincorporated organization or other entity.




“Purchase Price” shall
have the meaning ascribed to it in Section
2.5(a).




“Purchased Assets”
shall have the meaning ascribed to it in Section
2.1.




“Quarterly Payments”
shall have the meaning ascribed to it in Section
2.5(b)(iii)(A).




“Representatives”
shall have the meaning ascribed to it in Section
8.8.




“Reservation of Rights
Letter” shall have the meaning ascribed to it in the
Recitals.




“Restrictive
Covenants” shall have the meaning ascribed to it in Section
6.3(c).




“Restricted Period”
shall have the meaning ascribed to it in Section
6.3(a).




“Restricted
Territories” means New York, New Jersey, Pennsylvania, Connecticut, the
District of Columbia and Florida.




“Return” means, with
respect to Taxes, any report, return, statement, estimate, declaration, form or
other information required to be supplied to a Governmental Authority in
connection with Taxes.




“Revolver Loans” shall
have the meaning ascribed to it in the Recitals.




“Rosenthal” shall have
the meaning ascribed to it in the Preamble.




“Rosenthal Disclosure
Schedule” means the disclosure schedule delivered by Rosenthal and
attached hereto and made a part hereof.




“Segregated” shall
have the meaning ascribed to it in Section
2.2(d).




“Service and Collections
Agreement” shall have the meaning ascribed to it in Section
9.2(f).




“Service Agreement”
shall have the meaning ascribed to it in Section
9.2(j).




46




“Share Repurchase
Agreement” shall have the meaning ascribed to it in Section
9.2(r).




“Signing Deposit”
shall have the meaning ascribed to it in Section
2.5(b)(ii).




“Subject Collateral”
shall have the meaning ascribed to it in the Recitals.




“Subsidiary” means any
Person with respect to which a specified Person directly or indirectly
(A) owns a majority of the equity interests, (B) has the power to
elect a majority of that Person’s board of directors or similar governing body,
or (C) otherwise has the power, directly or indirectly, to direct the
business and policies of that Person.




“Tangible Net Worth”
shall have the meaning ascribed to it in the Recitals.




“Tax” or “Taxes” means any and
all taxes, fees, levies, duties, tariffs, imposts and other charges of any kind
(together with any and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any Governmental Authority,
including:  taxes or other charges on or with respect to income,
franchise, windfall or other profits, gross receipts, property, sales, use,
equity interests, payroll, employment, social security, workers’ compensation,
unemployment compensation or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value-added or gains taxes;
license, registration and documentation fees; and customers’ duties, tariffs and
similar charges.




“Term Loan” shall have
the meaning ascribed to it in the Recitals.




“Third Party Claim”
and, collectively, “Third Party Claims”
shall have the meaning ascribed to it in Section
11.4.




“Transactions” shall
have the meaning ascribed to it in Section
3.2.




“Tri-State” shall have
the meaning ascribed to it in the Preamble.




“UCC” means the
Uniform Commercial Code, as in effect from time to time, of the State of New
York or of any other state the laws of which are required as a result thereof to
be applied in connection with the issue of perfection of security
interests.




“Working Capital”
shall have the meaning ascribed to it in the Recitals.




[Signature page
follows]




47





IN WITNESS WHEREOF, each of
the parties hereto has caused this Agreement to be duly executed as of the date
first written above.




ROSENTHAL
      & ROSENTHAL, INC.By:
              /s/
      James J. OcchiogrossoName:
      James
      J. OcchiogrossoTitle:
      Executive
      Vice President




GT
      SYSTEMS INC.By:
              /s/
      Eric GoldsteinName: Eric
      GoldsteinTitle: President




ACCOUNTEKNOLOGY
      GROUP INC.
              ALDAN
      TROY GROUP, INC.
              B.
      BARNES ASSOCIATES INC.
              CREATIVE
      NETWORK SYSTEMS INC.
              DECORUM
      CONSULTING GROUP INC.
              DIVERSITY
      SERVICES OF DC, INC.
              DIVERSITY
      STAFFING, INC.
              F.S.I.
      SERVICES, INC.
              H
      R STAFFING INC.
              J.D.
      & TUTTLE HOSPITALITY STAFFING, INC.
              LERNER,
      CUMBO & ASSOCIATES, INC.
              ON
      THE MARKS PERSONNEL INC.
              PAULSON
      SEARCH INC.
              PEOPLE
      FINDERS PLUS, INC.
              PERSONNEL
      SPECIALIST INC.
              PROMPT
      PERSONNEL ASSOCIATES INC.
              PYRAMID
      STAFFING SERVICE, INC.
              RWP
      SOLUTIONS INC.
              SEARCHPOINT
      1 INC.
              SEGUE
      SEARCH OF CONNECTICUT, INC.
              SEGUE
      SEARCH, INC.
              STAFF
      “ONE” INC.
              STAFF
      DESIGN, INC.
              STAFFING
      REMEDIES INC.
              STAFFING
      UNLIMITED.COM INC.
              STRATEGIC
      RESOURCES STAFFING INC.
              SYNERGY PERSONNEL
INC.




[Signature
Page to Foreclosure and Asset Purchase Agreement]




48






TDF
      CONSULTING GROUP INC.
                TEMPORARY
      ALTERNATIVES, INC.
                TEMPORARY
      SERVICES INC.
                THE
      DRAYER SEARCH GROUP INC.
                THE
      EMPLOYMENT SOURCE INC.
                THE
      GOLD STANDARD INC.
                THE
      MILLER CANG AGENCY INC.
                THE
      PROFESSIONALS PERSONNEL INC.
                THE
      TUTTLE AGENCY INC.
                TRIANGLE
      PERSONNEL ASSOCIATES INC.
                TROY
      ASSOCIATES INC.
                TUTTLE
      AGENCY OF PENNSYLVANIA, INC.






By:
              /s/
      Eric GoldsteinName: Eric
      GoldsteinTitle: President




STAFFING
      REMEDIES, LLCBy:
              /s/
      Eric GoldsteinName: Eric
      GoldsteinTitle: Managing
      Member


/s/
      Eric GoldsteinERIC
      GOLDSTEIN





[Signature
Page to Foreclosure and Asset Purchase Agreement]




49




CORPORATE
      RESOURCE DEVELOPMENT INC.By:
              /s/
      Jay H. SchecterName: Jay
      H. SchecterTitle:  Chief
      Executive Officer




With
respect to Section 12.13, Article V and Article XII only (as
applicable)





CORPORATE
      RESOURCE SERVICES, INC.By:
              /s/
      Jay H. SchecterName:Title:




With
respect to Section 12.13, Article V and Article XII only (as
applicable)


TRI-STATE
      EMPLOYMENT SERVICES, INC.By:
              /s/
      Jay H. SchecterName:Title:




[Signature
Page to Foreclosure and Asset Purchase Agreement]




50





EXHIBIT
A




Form of Bill of
Sale




51





EXHIBIT
B




Purchase Price
Allocation




The
Purchase Price (including, for this purpose, Assumed Liabilities) shall be
allocated among the Purchased Assets as specified in a schedule to be prepared
and delivered by Buyer to Rosenthal within 180 days after the Closing Date.
 Such allocation shall be mutually agreed upon between Buyer and Rosenthal,
and be prepared in accordance with section 1060 of the Internal Revenue Code of
1986 and the regulations implementing that section, as reasonably determined by
Buyer.




52




EXHIBIT
C




[Intentionally Left
Blank]




53




EXHIBIT
D




Form of Article 9 Sale
Notice




54




EXHIBIT
E




List of Persons to Whom
Article 9 Sale Notice Was Sent




55




EXHIBIT
F




Form of Service and
Collections Agreement




56




EXHIBIT
G




Form of Consulting Agreement
for Eric Goldstein




57




EXHIBIT
H




Form of Legal Opinion to
Buyer from Obligors’ Counsel




58




EXHIBIT
I




Form of Assignment and
Assumption Agreement - Light Industrial




59




EXHIBIT
J




Form of Amended and Restated
Service Agreement - Light Industrial




60




EXHIBIT
K




Form of Assignment of Domain
Names




61




EXHIBIT
L




Form of Assignment of Trade
Names




62