Exhibit
10.43


 


SECURITIES
PURCHASE AGREEMENT


 


This SECURITIES PURCHASE
AGREEMENT (this “Agreement”) is dated effective as of the 21st day of November 2003,
by and among Diversified Corporate Resources, Inc., a Texas corporation (the “Company”),
and Microcapital Strategies, Inc., a Texas corporation and Jupiter Orbit Fund,
LTD hereto (the “Investor”).


 


W I T N E S S E T
H:


 


WHEREAS, the Company
desires to issue and sell to the Investor, pursuant to this Agreement and the
Investor desires to purchase from the Company, the $1,650,000 in aggregate
principal amount of the Company’s Series A Convertible Preferred Stock, will be
upon issuance convertible into authorized but unissued shares of the Company’s
cCommon stockStock, $.01 par value per share (the “Common Stock”);. and


 


WHEREAS, the Company has
authorized the issuance of up to 165,000 shares of its Preferred Stock, which
shares will be upon issuance, convertible into authorized but unissued shares
of Common Stock;


 


NOW THEREFORE, in
consideration of the mutual agreements, representations, warranties and
covenants herein contained, the parties hereto agree as follows:


 


1. Definitions. As
used in this Agreement, the following terms shall have the following respective
meanings:


 


1.1. “Affiliate”
shall mean, with respect to any Person, any other Person controlling,
controlled by or under direct or indirect common control with such Person. For
the purposes of this definition “control,” when used with respect to any
specified Person, shall mean the power to direct the management and policies of
such Person, directly or indirectly, whether through ownership of voting
securities, by contract or otherwise; and the terms “controlling” and “controlled”
shall have meanings correlative to the foregoing.


 


1.2. “Disclosure Documents”
means the Company’s Annual Report on Form 10-K for the year ended December 31,
2002, the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30,
2003, any Current Reports on Form 8-K filed or furnished by the Company on or
after December 31, 2002, the Company’s Schedule 14A Proxy Statement
for its Annual Meeting of Stockholders, dated April 29, 2003,


 


1.3. “Exchange Act”
means the Securities Exchange Act of 1934 and all of the rules and regulations
promulgated thereunder.


 


1.4 “Fully Diluted
Basis” means whereby the denominator for computing the percentage of the
Common Stock into which the shares of the Preferred Stock (as defined below)
are convertible consists solely of the sum of (i) the number of the issued and
outstanding shares of the Common Stock as of the date hereof (3,934,865) plus
(ii) the number of shares of the Common Stock issuable upon exercise of the
1,800,000 warrants held by J. Michael Moore and plus (iii) the 1,650,000
shares of the Common Stock issuable upon conversion of the shares of the
Preferred Stock.


 


1.5. “Material Adverse
Effect” means any change, event or occurrence which, individually or in the
aggregate, has had a material adverse effect on, or a material adverse change
in, (i) the business, operations, financial condition or results of operations
of the


 





















 


Company and its
subsidiaries, taken as a whole, or (ii) the ability of the Company to perform
its obligations under this Agreement, in each case other than any change, event
or occurrence (a) resulting from conditions in the United States or foreign
economies or securities markets in general or any change in the Company’s stock
price, (b) resulting from conditions in the telecommunications employment
services industry in general, except to the extent that the Company is
disproportionately affected thereby, (c) resulting from the public announcement
of the transactions contemplated by this Agreement or (d) arising out of or
resulting from actions of the Investors in connection with this Agreement.


 


1.6. “Preferred Stock”
means 165,000 shares of the Company’s Series A Convertible Preferred Stock, par
value $10.00 per share, convertible at the rate of ten (10) shares of the
Common Stock for each share of the Preferred Stock and containing having such
other the same rights and preferences and with the same conversion features as
are set forth in the term sheet attached hereto as EXHIBIT B. Certificate of
Designation attached hereto as Exhibit A.


 


1.7. “Person”
means an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association or joint
venture.


 


1.8. “SEC” shall
mean the Securities and Exchange Commission.


 


1.9. “Securities”
shall mean shares of the Preferred Stock and of the Common Stock issuable upon
conversion of the Preferred Stock and upon conversion of the Preferred Stock.


 


1.10. “Securities Act”
shall mean the Securities Act of 1933, as amended, and all of the rules and
regulations promulgated thereunder.


 


2. Authorization, Purchase
and Sale of the Preferred Stock.


 


2.1. Authorization of
Securities. The Company will have authorized, on or before the Closing Date
(as defined below), the Preferred Stock and shall, within five (5) business
days after has, or on or before the Closing Date file the Certificate of
Designation with the Secretary of State of the State of Texas. It is agreed and
understood that the number of shares of the Common Stock issuable upon
conversion of the Preferred Stock would constitute 22.34% of the Common Stock
on a Fully Diluted Basis.


 


2.2. Purchase and Sale
of the Preferred Stock.  Subject to
and upon the terms and conditions set forth in this Agreement, at the Closing
(as defined below), the Company shall issue and sell to the Investor, and the
Investor shall purchase from the Company the $1,650,000 in aggregate principal
amount of Preferred Stock at a purchase price equal to the par value of the
Preferred Stock.


 


2.3. Closing. The
closing (the “Closing”) shall take place on one or more occasions at the
offices of the Company, on or before February 15, 2004.  At the Closing, the Investor shall make
payment to the Company of the purchase price by wire transfer to the Company of
immediately available funds, against delivery to the Investor by the Company of
appropriate stock certificates.


 


3. Representations and
Warranties of the Company. Except as set forth in the Disclosure Documents,
the Company hereby represents and warrants to the each of the Investors as
follows:


 


3.1. Incorporation.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas and is qualified to do business
in each jurisdiction in which the character of its properties or the nature of
its business requires such qualification, except where the failure to so
qualify would not have a Material Adverse Effect. The Company has all requisite
corporate power and authority to carry on its business as now


 





















 


conducted.


 


3.2. Subsidiaries.
Each subsidiary of the Company that is a corporation has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its properties and to conduct its business and is duly
registered, qualified and authorized to transact business and is in good
standing in each jurisdiction in which the conduct of its business or the
nature of its properties requires such registration, qualification or
authorization, except where such failure to so qualify or register would not be
reasonably likely to have a Material Adverse Effect.


 


3.3. Capitalization.
As of the date of this Agreement, the authorized capital stock of the Company
consists of 10,000,000 shares of Common Stock, and 1,000,000 shares of undesignated
preferred stock, of which there are no shares of preferred stock issued and
outstanding. All outstanding shares of Common Stock have been duly authorized,
and have been validly issued, are fully paid and nonassessable.


 


3.4. Authorization.
All corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization of the Series A Convertible
Preferred Stock and the filing of the Certificate of Rights and Designation,
the authorization, execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated herein has been taken. When
executed and delivered by the Company, this Agreement shall constitute the
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as rights to indemnity and
contribution may be limited by state or federal securities laws or the public
policy underlying such laws, and except as may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors’ rights generally
and by general equitable principles. The Company has all requisite corporate
power to enter into this Agreement and to carry out and perform its obligations
under the terms of this Agreement. At or prior to the Closing, the Company will
have reserved for issuance the shares of Preferred Stock and Common Stock
issuable upon conversion of the Preferred Stock.


 


3.5. Valid Issuance.


 


Upon their issuance in
accordance with their terms of the shares of the Preferred Stock or and of the
Common Stock issued upon conversion of the Preferred Stock will be duly
authorized, validly issued, fully paid and non-assessable shares of Preferred
Stock or Common Stock, as the case may be, free of all preemptive or similar
rights.


 


3.6. Absence of
Certain Changes. Since September 30, 2003, there has not been any
Material Adverse Effect.


 


3.7. Disclosure
Documents. The information contained or incorporated by reference in the
Disclosure Documents was true and correct in all material respects as of the
respective dates of the filing thereof with the SEC; and, as of such respective
dates, the Disclosure Documents did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except to the extent updated or
superseded by any report subsequently filed by the Company with the SEC.


 


3.8. Consents. All
consents, approvals, orders and authorizations required on the part of the
Company in connection with the execution, delivery or performance of this
Agreement and the consummation of the transactions contemplated herein have
been obtained and will be effective as of the Closing Date, other than (i) the
filing of the Certificate of Designations with the Secretary of State of the
State of Texas, have been obtained and will be effective as of the


 





















 


Closing Date, other than
(ii) the making of such filings required to be made after the Closing under
applicable federal and state securities laws and (iii) other than any other
consents, approvals, orders and authorizations of the foregoing, the failure to
make or obtain of which will not have a Material Adverse Effect.


 


3.9. No Conflict.
The execution and delivery of this Agreement by the Company and the
consummation of the transactions contemplated hereby will not conflict with or
result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to a loss of a material benefit under (i) any
provision of the Certificate Articles of Incorporation or By-laws of the
Company or (ii) any agreement or instrument, permit, franchise, license,
judgment, order, statute, law, ordinance, rule or regulations, applicable to
the Company or its properties or assets, except, in the case of clause (ii), as
would not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect.


 


3.10. No Manipulation
of Stock. The Company has not taken, in violation of applicable law, any
action designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate
the transactions contemplated hereby or the sale or resale of the shares of
Common Stock.


 


3.11. Company Not an “Investment
Company”. The Company is not, and immediately after receipt of payment for
the Preferred Stock will not be, an “investment company” or an entity “controlled”
by an “investment company” within the meaning of the Investment Company Act of
1940, as amended.


 


3.12. Litigation.  Except as shown in the Disclosure Documents,
there is no action, suit or proceeding pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary, before any court or
arbitrator or any governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which could materially adversely
affect the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Company or which challenges the
validity of this Agreement.


 


4. Representations and
Warranties of the Investor. The Investor represents and warrants to the
Company as follows:


 


4.1. Organization.
The Investor, if it is a legal entity, is duly and validly existing under the
jurisdiction of its organization.


 


4.2. Authorization.
All action on the part of the Investor necessary for the authorization,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated herein has been taken. This Agreement constitutes
the legal, valid and binding obligation of the Investor, enforceable against the
Investor in accordance with its terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other laws affecting creditors’
rights generally and by general equitable principles. The Investor has all
requisite power to enter into this Agreement and to carry out and perform its
obligations under the terms of this Agreement.


 


4.3. No Conflict.
The execution and delivery of this Agreement by the Investor and the
consummation of the transactions contemplated hereby will not conflict with or
result in any violation of or default by the Investor (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to a loss of a material
benefit under (i) any provision of the organizational documents of such
Investor or (ii) any agreement or instrument, permit, franchise, license,
judgment, order, statute, law, ordinance, rule or regulations, applicable to
such Investor or its respective properties or assets


 





















 


4.4. Consents. All
consents, approvals, orders and authorizations required on the part of the
Investor in connection with the execution, delivery or performance of this
Agreement and the consummation of the transactions contemplated herein have
been obtained and will be effective as of the Closing Date.


 


4.5. No Manipulation
of Stock. The Investor has not taken, in violation of applicable law, any
action designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate
the transactions contemplated hereby or the sale or resale of the shares of
Common Stock.


 


4.6. Investment
Representations.


 


(a) The Investor is an
experienced investor in unregistered and restricted securities of companies.
The Investor understands that this investment involves substantial risks.


 


(b) The Investor has (i)
a preexisting personal or business relationship with the Company or one or more
of its officers, directors, or control persons or (ii) the Investor has such
knowledge and experience in financial and business matters that the Investor is
capable of evaluating the merits and risks of the acquisition of the Preferred
Shares and, by reason of the Investor’s financial and business experience, the
Investor has the capacity to protect the Investor’s interest in connection with
the acquisition of the Preferred Stock. The Investor is financially able to
bear the economic risk of the investment, including the total loss thereof.


 


(c) The Investor’s sole
shareholder is an “accredited investor” as defined in Rule 501 (a) promulgated
under the Securities Act.


 


(d) The Investor has
received and reviewed a copy of the Disclosure Documents. The Investor has had
an opportunity to ask questions and receive answers from the Company and its
officers and employees regarding the terms and conditions of the purchase of
the Preferred Stock and regarding the business, financial affairs and other
aspects of the Company.


 


(e) The Preferred Stock
is being acquired by the Investor for investment purposes for the Investor’s
own account only and not for sale or with a view to distribution of all of any
part of such Preferred Stock. However, it is agreed and understood that the
Investor may assign its rights and obligations hereunder to certain non-U.S.
purchasers and to a domestic fiscally transparent entity in which the Investor
or its sole shareholder acts as the general partner or managing member,
provided, however, that (i) each assignee and partner or member of any such
entity qualified as an accredited investor, and (ii) the assignment is effected
by a document, satisfactory to the Company, on the basis of which the Company
can reasonably conclude that the sale of any shares of the Preferred Stock if
made directly to each assignee, partner or member would not have disqualified
the sale of all such shares as a private placement under Rule 506 under the
Securities Act.


 


4A.                             Acknowledgement
by Investor.


 


Investor acknowledges
that the Preferred Stock will have been acquired from the Company in a
transaction not involving a public offering. Under federal securities laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances and that otherwise
such securities must be held indefinitely. In this connection, the Investor
understands the resale limitations imposed by the Securities Act and is
familiar with Rule 144 of the Securities Act, as presently in effect, and the
conditions which must be met in order for that Rule to be available for resale
of “restricted securities.” Except as set forth in Section 5.3 hereof, the
Company is under no obligation to register the Preferred Stock (or the Common
Stock issuable upon conversion) on behalf of


 





















 


Investor or to assist the
Investor in complying with any exemption from registration.


 


5. Covenants.


 


5.1. Governmental
Approvals. As soon as practicable after the execution this Agreement, the
Company and the Investor shall file all applications and reports and take such
other action which is reasonably required to be taken or filed with any
governmental authority in connection with the transactions contemplated by this
Agreement. The Company and the Investor shall give all additional notices to
third parties and take other action reasonably required to be or taken by it
under any authorization, lease, note, mortgage, indenture, agreement or other
instrument or any law, rule, regulation, demand or court or administrative
order in connection with the transactions contemplated by this Agreement.


 


5.2. Further
Assurances. Each party agrees to cooperate with each other and their
respective officers, employees, attorneys, accountants and other agents, and,
generally, do such other acts and things in good faith as may be reasonable or
appropriate to timely effectuate the intents and purposes of this Agreement and
of the provisions of the letter Term Sheet, dated November 21, 2003
(herein so called), attached hereto as Exhibit B (as such provisions shall have
been modified by operation of the provisions hereof and the Certificate of
Designation) and the consummation of the transactions contemplated hereby,
including, but not limited to, taking any action to facilitate the filing any
document or the taking of any action to assist the other parties hereto in
complying with the terms of Section 5.1 hereof and thereby.


 


5.3. Registration.
The Investor shall be entitled to one demand registration right relating to the
registration under the Securities Act of the Common Stock issuable upon
conversion of the Preferred Stock (the “Restricted Stock”) (a) within thirty
(30) days after the occurrence of the earlier of (i) the first anniversary of
the Closing date of (ii) the conversion of the Preferred Stock into Common
Stock pursuant to the terms of the Term Sheet or (b) at the time at which
demand to register other restricted stock of the Company (other than employee
stock options on Form S-8) is made by the holders thereof.  In addition, the Investor shall have, for a
period of three (3) years after the Closing Date, so called “piggy back”
registration rights with respect to the Restricted Stock in case the Company
undertakes to sell shares of Common Stock in an underwritten public offering
pursuant to a registration statement under the Securities Act.  Such rights shall be subject to customary
limitations imposed by the underwriters, or customary terms and conditions to
be mutually agreed upon by the Company and such Investor. In addition, in the
event an Investor becomes an Affiliate of the Company or is deemed an Affiliate
of the Company, then such Investor shall be entitled to one demand registration
right relating to the registration of the Securities under the Securities Act;
provided, however, that such registration shall not be available to the
Investor if the Investor has exercised his registration right pursuant to one
of the alternatives set forth above. The Company shall bear all expenses in
connection with the Company’s registration of the Securities pursuant to this Section 5.3,
provided, however, that the Investor shall bear the costs of all underwriting
discounts and selling commissions and similar fees applicable to the sale of
the Securities and fees and expenses of its legal counsel and all transfer
taxes.


 


5.4. Certificate of Designations.
As soon as practicable, but in no event later than 5 business days, after the
execution of this Agreement, the Company shall file the Certificate of
Designations with the Secretary of State of the State of Texas, and deliver
satisfactory evidence of such filing to the Investors.


 


5.5. Information.
The Company will make available to the Investor,


 


(a) promptly upon the
filing thereof, copies of (i) all registration statements (other than the
exhibits thereto and any registration statements on Form S-8 or its
equivalent), and (ii) all Disclosure Documents;


 





















 


(b) promptly upon the
mailing thereof to the shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so mailed and any other
document generally distributed to shareholders; and


 


(c) promptly following
the commencement thereof, notice and a description in reasonable detail of any
litigation or proceeding to which the Company or any Subsidiary is a party in
which the amount involved is $100,000 or more and not covered by insurance.


 


5.6. Maintenance
of Reporting Status; Supplemental Information. So long as any of the
Preferred Stock and Restricted Securities are outstanding, the Company shall
use its best lawful efforts to timely file all reports required to be filed
with the SEC pursuant to the Exchange Act. The Company shall not terminate its
status as an issuer required to file reports under the Exchange Act, even if
the Exchange Act or the rules and regulations thereunder would permit such termination.
If at anytime the Company is not subject to the requirements of Section 13
or 15(d) of the Exchange Act, the Company will promptly furnish at its expense,
upon request, for the benefit of the holders from time to time of Securities,
and prospective purchasers of Securities, information satisfying the
information requirements of Rule 144 under the Securities Act.


 


5.7. Indemnification.
The Company agrees to indemnify and hold harmless the Investor, its respective
Affiliates, and each Person, if any, who controls such Investor, or any of its
respective Affiliates, and the respective partners, agents, employees and
officers of the Investor and their Affiliates (each an “Indemnified
Party”) and collectively, the “Indemnified Parties”),
from and against any and all losses, claims, damages, liabilities and expenses
(including, without limitation and as incurred, reasonable costs of
investigating, preparing or defending any such claim or action, whether or not
such Indemnified Party is a party thereto), which may be incurred by such
Indemnified Party that relates to or arises out of or in connection with a
breach of any of the Company’s representations or warranties or covenants
herein, including in connection with any administrative or judicial proceeding
brought or threatened that relates to or arises out of, or is in connection
with a breach of any of the Company’s representations and warranties or
covenants contained herein; provided that the Company will not be
responsible for any claims, liabilities, losses, damages or expenses that are
determined by final judgment of a court of competent jurisdiction to result
from such Indemnified Party’s gross negligence or willful misconduct.


 


6. Conditions
Precedent


 


6.1. Conditions to the
Obligation of the Investor to Consummate the Closing. (a) The obligation of
the Investor to purchase and pay for the Preferred Stock being purchased by it
at the Closing pursuant to this Agreement shall not be prohibited or enjoined
by any law or governmental or court order or regulation. (b) the
representations and warranties of the Company contained herein shall be true
and correct in all material respects (except for representations and warranties
that speak as of a specified date, which representations and warranties shall
have been true and correct as of such specified date), and the Company shall
have performed, satisfied and complied with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by it at or prior to the Closing.


 


6.2. Conditions to the
Obligation of the Company to Consummate the Closing.  The obligation of the Company to issue and
sell to the Investor the Preferred Stock to be purchased by it at the Closing
pursuant to this Agreement, is subject to the satisfaction of the following
conditions precedent:


 


(a) The Investor shall
have paid the purchase price.


 


(b) The sale of the
Preferred Stock by the Company shall bot be prohibited or enjoined by any law
or governmental or court order or retulation.


 





















 


7. Termination.


 


7.1. Conditions of
Termination. Notwithstanding anything to the contrary contained herein,
this Agreement may be terminated at any time before the Closing (a) by mutual
consent of the Company and the Investors, or (b) by either the Investors or the
Company if the final Closing shall not have occurred on or prior to February 21,
2004.


 


7.2. Effect of
Termination. In the event of termination pursuant to Section 7.1
hereof, Robert A. Shuey, III, shall refund the Company the $25,000 fee received
by him prior to the date hereof and this Agreement shall become null and void
and have no effect, with no liability on the part of the Company or the
Investors, or their respective directors, officers, agents or stockholders,
with respect to this Agreement, except for the liability for any willful breach
of this Agreement.


 


8. Miscellaneous
Provisions.


 


8.1. Public Statements
or Releases. Neither the Company nor any Investor shall make any public
announcement with respect to the existence or terms of this Agreement or the
transactions provided for herein without the prior approval of the other
parties, which shall not be unreasonably withheld or delayed. Notwithstanding
the foregoing, nothing in this Section 8.1 shall prevent any party from
making any public announcement it considers necessary in order to satisfy its
obligations under the law or the rules of any national securities exchange or
market, provided such party, to the extent practicable, provides the other
parties with an opportunity to review and comment on any proposed public
announcement before it is made.


 


8.2. Pronouns. All
pronouns or any variation thereof shall be deemed to refer to the masculine,
feminine or neuter, singular or plural, as the identity of the person, persons,
entity or entities may require.


 


8.3. Notices.


 


(a) Any notices, reports
or other correspondence (hereinafter collectively referred to as “correspondence”)
required or permitted to be given hereunder shall be sent by postage prepaid
first class mail, courier or facsimile or delivered by hand to the party to
whom such correspondence is required or permitted to be given hereunder. The
date of giving any notice shall be the date of its actual receipt.


 


(b) All correspondence to
the Company shall be addressed as follows:


 


Diversified Corporate
Resources, Inc. 

10670 N. Central Expressway

Dallas, Texas 75231

Attention: J. Michael Moore


 


(c) All correspondence to
any Investor shall be sent to such Investor at the address as follows:


 


c/o Microcap Strategies,
Inc.Jupiter Orbit Fund, Ltd

15851 Dallas Parkway, Suite 180

Addison, Texas 75001

Attn: Robert A. Shuey, III, President


 


(d) Any Person may change
the address to which correspondence to it is to be addressed by notification as
provided for herein.


 


8.4. Captions. The
captions and paragraph headings of this Agreement are solely for the
convenience of reference and shall not affect its interpretation.


 





















 


8.5. Severability.
Should any part or provision of this Agreement be held unenforceable or in
conflict with the applicable laws or regulations of any jurisdiction, the
invalid or unenforceable part or provisions shall be replaced with a provision
which accomplishes, to the extent possible, the original business purpose of
such part or provision in a valid and enforceable manner, and the remainder of
this Agreement shall remain binding upon the parties hereto.


 


8.6. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws
of the State of Texas, without giving effect to conflict of law principles thereof.


 


8.7. Waiver. No
waiver of any term, provision or condition of this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or
be construed as, a further or continuing waiver of any such term, provision or
condition or as a waiver of any other term, provision or condition of this
Agreement.


 


8.8. Expenses.
Each party shall bear the cost of any and all fees and expenses incurred in
connection with the transactions contemplated hereby including, without
limitation, legal, consulting and accounting fees; provided, however, that the
Company shall pay the fees of one counsel to the Investors not in excess of
$5,000.


 


8.9. Assignment.
The rights and obligations of the parties hereto inure to the benefit of and
shall be binding upon the authorized successors and permitted assigns of each
party. None of the parties may assign its rights or obligations under this
Agreement or designate another person (i) to perform all or part of its
obligations under this Agreement or (ii) to have all or part of its rights and
benefits under this Agreement, in each case without the prior written consent
of the other parties. In the event of any assignment in accordance with the
terms of this Agreement, the assignee shall specifically assume and be bound by
the provisions of the Agreement by executing and agreeing to an assumption
agreement reasonably acceptable to the Company.


 


8.10. Counterparts.
This Agreement may be signed in one or counterparts, each of which shall be an
original, but all of which together shall constitute one instrument


 


8.11. Entire Agreement.
This Agreement (including the exhibits hereto) constitutes the entire agreement
between the parties hereto respecting the subject matter hereof and supersedes
all prior agreements, negotiations, understandings, representations and
statements respecting the subject matter hereof, whether written or oral, other
than that certain “Whereas Agreement,” dated as the date hereof.. No
modification, alteration, waiver or change in any of the terms of this
Agreement shall be valid or binding upon the parties hereto unless made in
writing and duly executed by the Company and Investors


 


IN WITNESS WHEREOF, the
parties hereto have executed this Agreement under seal as of the day and year
first above written.


 


“COMPANY”


 


	
   

  	
  DIVERSIFIED CORPORATE
  RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ J. Michael Moore

  	
   

  
	
   

  	
  Name: J. Michael Moore

  
	
   

  	
  Title: Chief Executive
  Officer

  



 


“INVESTOR”


 


	
   

  	
  MICROCAP STRATEGIES,
  INC.

  
	
   

  	
  a Texas corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Robert A. Shuey,
  III

  	
   

  
	
   

  	
  Name: Robert A. Shuey,
  III

  
	
   

  	
  Title: President

  






















 


 


Robert A.
Shuey, III


 


November 21, 2003


 


Mr. J. Michael Moore

Chairman of the Board

Diversified Corporate Resources, Inc.

Search Plaza

10670 N. Central Expressway

Dallas, Texas 75231


 


Dear Mr. Moore:


 


The purpose of this
letter is to set out to options for providing $1,650,000 in additional capital
to Diversified Corporate Resources, Inc. (“DCRI”).


 


It is anticipated that
Robert Shuey and B4Ventures will create a new fund the Mercury Orbit Special
Situation Equity Fund Ltd. The placement document is the responsibility of
Robert Shuey and B4Ventures and not the Company. There would be a single
shareholder “MOSSES” interested in the private placement of $1,650,000 Series A
Convertible Preferred Stock.


 


The salient features of
the issue are:


 


•                  Security:
Convertible Preferred Stock


 


•                  Dividend:
Series A 10% Cumulative paid quarterly;


 


•                  Liquidation
Preference: Issue price plus accrued but unpaid dividends


 


•                  Conversion
Ratio: Series A Fixed at 1,650,000 shares of Common Stock ($ 1.00 per share),
Term: The Preferred Explodes into common when DCRI Common Stock trades 825,000
shares at a bid price over $3.00 per share and eight quarterly dividends have
been paid. DCRI has the right to force conversion at any time the Common Stock
trades above $2.00 per sham subject to the payment of 8 quarterly dividends.


 


•                  Governance
Rights: Full voting at conversion ratio, one seat on the Board of Directors so
long as the Preferred is outstanding and $1.5 million in net proceeds has been
funded.


 


•                  Voting
Proxy. MOSSES agrees to grant its Proxy to vote all shares it is entitled to
vote under this subscription agreement with the majority of the Board for a
period of two (2) years. This Proxy period will commence with the final funding.
This Proxy is subject to come along and tag along rights such that any shares
sold by J. Michael Moore, his


 





















 


successors, assigns or
affiliates at a price in excess of the market price, Mosses shall have the ri
the obligation, to sell its shares pro-rata.


 


•                  Fees
and Expenses paid by DCRI: $1 50,000 to be paid as follows; $25,000 to be paid
upon execution of this Term Sheet with the balance being paid out pro-rata as
the Series A funds and cashless exercise warrants covering 169,428 shares of
DCRI Common Stock exercisable at $0.80 per share.


 


•                  Registration
Rights: One Shelf Registration and Piggyback on the common shares underlying
the Preferred subject to Underwriter’s approval. Preferred stock automatically
converts upon registration.


 


•                  Additional
Warrants: DCRI will issue one Common Stock Wan-ant for every seven (7) Series A
Preferred shares purchased (235,714). The Warrants will be exercisable at any
time within thirty six (36) months of issuance at an exercise price as follows:


 


1.               If
DCRI’s net pre-tax income, as reported in its audited financial statements
included in its Annual Report on Form 10K for the fiscal year ended December 31,
2004 is at least $3,000,000, less dividends paid, the exercise price of the
Warrants will be $2.00 per share; but


 


2.               If
Net pre-tax income is between $2,500,000 and $2,999,999 less dividends paid,
the exercise price of the Warrants will be $1.50 per share.


 


3.               If
the Net Pre-Tax income is between $2,251,000 and $2,499,999, less dividends
paid, the exercise price of the Warrants will be $1.00 per share.


 


If the net pre-tax income
is less than $2,250,000, less dividends paid, the exercise price of the
Warrants will be $.50 per share multiplied by a fraction where the Numerator is
the Company’s reported Net Pre-Tax income and the Denominator of which is
$3,000,000.


 


	
   

  	
   

  	
  Shares

  	
   

  	
  Principal

  	
   

  	
  Per Share

  	
   

  
	
  Series
  A

  	
   

  	
  1,650,000

  	
   

  	
  $

  	
  1,650,000

  	
   

  	
  $

  	
  1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Warrants
  A*

  	
   

  	
  235,714

  	
   

  	
  $

  	
  471,428

  	
   

  	
  $

  	
  2.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SPK
  Warrant**

  	
   

  	
  169,428

  	
   

  	
  $

  	
  135,542

  	
   

  	
  $

  	
  0.80

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2,055,142

  	
   

  	
  $

  	
  2,256,970

  	
   

  	
  $

  	
  1.10

  	
   

  



 










*Subject to adjustment
based on attainment of earnings target.


 


** These Warrants will
have a cashless exercise feature and vest according to the following schedule:


 


1.               169,428
to be granted on a pro rata basis with fundings and vest: 1) 55,000 when the
bid price of DCRI is $1.50 per share; 2) 55,000 when the bid price of DCRI is
$2.50 per share; 3) 59,428 when the bid price of DCRI is $3.50 per share.


 


2.               Robert
Shuey agrees to fund no less than $500,000 in net proceeds to the Company on or


 





















 


before December 2l,
2003 with an additional $500,000 in net proceeds by December 29th.
The final $500,000 must be funded on or before January 15th,
2004. In the event that Robert Shuey is unable to meet a scheduled funding, the
Company has the right to renegotiate its term and conditions for any subsequent
fundings. All fees, expenses and Warrants will be pro-rated based on actual
amounts funded.


 


If this Term Sheet meets
with your approval please sign and return with a check for $25,000. We look for
a long and mutually beneficial relationship between Robert Shuey, B4Ventures,
Inc., our Mercury Orbit Special Situation Equity Fund, Ltd. and Diversified
Corporate Resources, Inc. Respectfully submitted, Accepted and Agreed.


 


	
  /S/ Robert A. Shuey,
  III

  	
   

  	
  /S/ J. Michael Moore

  	
   

  
	
   

  	
  J. Michael Moore

  Chairman of the Baord

  Diversified Corporate Resources, Inc.