Document:

<PAGE>
                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

         AGREEMENT made as of the 1st day of January 2003 by and between
Elizabeth Hoaglin, residing at 30 Midway Island, Clearwater, Florida 34630
(hereinafter referred to as the "Employee") and TEAMSTAFF, INC., a New Jersey
corporation with principal offices located at 300 Atrium Drive, Somerset, New
Jersey 08873 (hereinafter referred to as the "Company").

                              W I T N E S S E T H :

         WHEREAS, the Company and its subsidiaries are engaged in the business
of providing professional employer organization ("PEO"), temporary and permanent
staffing and payroll administration services, including temporary and permanent
medical staffing through its wholly-owned subsidiary, TeamStaff Rx, Inc.;

         WHEREAS, the Company desires to employ the Employee for the purpose of
securing for the Company the experience, ability and services of the Employee;
and

         WHEREAS, the Employee desires to be employed with the Company, pursuant
to the terms and conditions herein set forth;

         NOW, THEREFORE, it is mutually agreed by and between the parties hereto
as follows:

                                    ARTICLE I
                                EMPLOYMENT/DUTIES

         1.1 Subject to and upon the terms and conditions of this Agreement, the
Company hereby employs the Employee, and the Employee hereby accepts such
employment in her capacity as President of TeamStaff, Rx, Inc.

         1.2 The Employee shall, during the term of her employment with the
Company, and subject to the direction and control of the President and/or CEO of
the Company ("Executive Management"), perform such duties and functions as she
may be called upon to perform during the term of this Agreement.

         1.3 The Employee agrees to devote full business time and her best
efforts in the performance of her duties for the Company and any subsidiary
corporation of the Company.

         1.4 The Employee shall perform, in conjunction with the Company's
Executive Management, to the best of her ability the following services and
duties for the Company and its subsidiary corporations (by way of example, and
not by way of limitation):

         (i)      Those duties attendant to the position with the Company for
                  which she is hired;

                                       1
<PAGE>
         (ii)     Establish and implement current and long range objectives,
                  plans, and policies, subject to the approval of the Executive
                  Management;

         (iii)    Managerial oversight of the Company's temporary and permanent
                  medical staffing division from the Company's offices in
                  Clearwater, New Jersey;

         (iv)     Ensure that all Company temporary and permanent medical
                  staffing activities and operations are carried out in
                  compliance with local, state and federal regulations and laws
                  governing business operations

         (v)      Growth and profitability of the Company's temporary and
                  permanent medical staffing business; and

         (vi)     Promotion of the relationships of the Company and its
                  subsidiaries with their respective employees, customers,
                  suppliers and others in the business community.

         1.5 Employee shall be based in the Clearwater, Florida area, and shall
undertake such occasional travel, within or without the United States as is or
may be reasonably necessary in the interests of the Company and the performance
of her duties.

                                   ARTICLE II
                                  COMPENSATION

         2.1 Commencing the date hereof and during the term hereof, Employee
shall be compensated initially at the rate of $130,000 per annum (the "Base
Salary"), which shall be paid to Employee as in accordance with the Company's
regular payroll periods.

         2.2 Employee shall be entitled to receive a bonus (the "Bonus") for any
fiscal year ending during the term hereof in accordance with the Company's
Division Management Bonus Program to be determined by the Compensation Committee
of the Company's Board of Directors as of the commencement of each fiscal year.

         2.3 The Company shall deduct from Employee's compensation all federal,
state, and local taxes that it may now or may hereafter be required to deduct.

                                   ARTICLE III
                                    BENEFITS

         3.1 During the term hereof, the Company shall provide Employee with
group health care, insurance and such other benefits as generally made available
to the Company's senior management; reimburse the Employee, upon presentation of
appropriate vouchers, for all reasonable business expenses incurred by the
Employee on behalf of the Company upon presentation of suitable documentation;
and pay to Employee the sum of $300 per month as and for an automobile
allowance.

         3.2 For each year of the term hereof, in addition to paid holidays
established by the

                                       2
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Company from time to time, Employee shall be entitled to four (4) weeks paid
vacation.

                                   ARTICLE IV
                                 NON-DISCLOSURE

         4.1 The Employee shall not, at any time during or after the termination
of her employment hereunder, except when acting on behalf of and with the
authorization of the Company, make use of or disclose to any person,
corporation, or other entity, for any purpose whatsoever, any trade secret or
other confidential information concerning the Company's business, finances,
marketing, computerized payroll and voucher, accounting and information
business, personnel, temporary and permanent staffing and/or professional
employer organization, administrative service organization or employee leasing
business of the Company and its subsidiaries, including, without limitation,
information relating to any customer of the Company or pool of temporary
employees, product or service pricing or any other nonpublic business
information of the Company and/or its subsidiaries learned as a consequence of
Employee's employment with the Company (collectively referred to as the
"Proprietary Information"). For the purposes of this Agreement, trade secrets
and confidential information shall mean information disclosed to the Employee or
known by her as a consequence of her employment by the Company, whether or not
pursuant to this Agreement, and not generally known in the industry. The
Employee acknowledges that trade secrets and other items of confidential
information, as they may exist from time to time, are valuable and unique assets
of the Company, and that disclosure of any such information would cause
substantial injury to the Company.

                                    ARTICLE V
                              RESTRICTIVE COVENANT

         5.1 In the event of the voluntary termination of employment with the
Company prior to the expiration of the term hereof, or Employee's discharge in
accordance with Article VIII, or the expiration of the term hereof without
renewal, Employee agrees that she will not, for a period of one (1) year
following such termination (or expiration, as the case may be) directly or
indirectly enter into or become associated with or engage in any other business
(whether as a partner, officer, director, shareholder, employee, consultant, or
otherwise), if such business is involved in the temporary or permanent medical
staffing business, or is otherwise engaged in the same or similar business as
the Company shall be engaged and is in direct competition with the Company, or
which the Company is in the process of developing, during the tenure of
Employee's employment by the Company. Notwithstanding the foregoing, the
ownership by Employee of less than 2% percent of the shares of any publicly held
corporation shall not violate

                                       3
<PAGE>
the provisions of this Article V.

         5.2 In furtherance of the foregoing, Employee shall not during the
aforesaid period of non-competition, directly or indirectly, in connection with
any computerized payroll or voucher, professional employer organization,
administrative service organization, employee leasing, or temporary or permanent
staffing business, or any business similar to the business in which the Company
was engaged, or in the process of developing, during Employee's tenure with the
Company, solicit any customer or employee of the Company who was a customer or
employee of the Company during the tenure of her employment.

         5.3 If any court shall hold that the duration of non-competition or any
other restriction contained in this Article is unenforceable, it is our
intention that same shall not thereby be terminated but shall be deemed amended
to delete therefrom such provision or portion adjudicated to be invalid or
unenforceable or, in the alternative, such judicially substituted term may be
substituted therefor.

                                   ARTICLE VI
                                      TERM

         6.1 This Agreement shall commence on the date hereof and terminate on
December 31, 2003 (the "Expiration Date"), unless sooner terminated as provided
for herein.

         6.2 Unless this Agreement is earlier terminated pursuant to the terms
hereof, the Company and Employee agree to meet in good faith at either party's
request to discuss whether the Company intends to negotiate an extension or
renewal of this Agreement. The discussion contemplated by this Article 6.2 may
be initiated by either party by written notice given no sooner than 90 days
prior to the Expiration Date.

                                   ARTICLE VII
                             DISABILITY DURING TERM

         7.1 In the event Employee becomes totally disabled so that she is
unable or prevented from performing any one or all of her usual duties hereunder
for a period of 60 consecutive days or 60 days within any one year period, and
the Company elects to terminate this agreement in accordance with Article VIII,
paragraph (B) then, and in that event, Employee shall receive her Base Salary as
provided under Article II of this Agreement for a period of the lesser of three
(3) months commencing from the date of such total disability or the balance of
the then current one year term of this Agreement. The obligation of the Company
to make the aforesaid payments shall be modified and reduced and the Company
shall receive a credit for all disability insurance payments which Employee may
receive from insurance policies provided by the Company.

                                       4
<PAGE>
                                  ARTICLE VIII
                                   TERMINATION

         8.1      The Company may terminate this Agreement:
                  a. Upon the death of Employee during the term hereof, except
that the Employee's legal representatives, successors, assigns, and heirs shall
have those rights and interests as otherwise provided in this Agreement,
including the right to receive accrued but unpaid incentive compensation and
special bonus compensation on a pro rata basis.

                  b. Subject to the terms of Article VIII, upon written notice
from the Company to the Employee, if Employee becomes totally disabled and as a
result of such total disability, has been prevented from and unable to perform
all of her duties hereunder for a consecutive period of 60 days or for 60 days
in any one year period.

                  c. Upon written notice from the Company to the Employee, at
any time for "Cause." For purposes of this Agreement, "Cause" shall be defined
as: (i) willful disobedience by the Employee of a material and lawful
instruction of the Executive Management; (ii) conviction of the Employee of any
misdemeanor involving fraud or embezzlement or similar crime, or any felony;
(iii) breach by the Employee of any material provision of this Agreement or any
material written policy or procedure of the Company; (iv) conduct amounting to
fraud, dishonesty, negligence, willful misconduct, recurring insubordination,
inattention to or unsatisfactory performance of duties which adversely affects
operations of the Company; or (v) violation of any state or federal securities
or employee labor laws or regulations relating to sexual harassment or
discrimination, as determined in good faith by the Board of Directors or a
governmental entity or court of law, provided that the Company shall not have
the right to terminate the employment of Employee pursuant to the foregoing
clauses (i), (iii), (iv) or (v) above unless written notice specifying such
breach shall have been given to the Employee and, in the case of breach which is
capable of being cured, the Employee shall have failed to cure such breach
within 20 days after her receipt of such notice.

         8.2 Employee may terminate this agreement at any time upon 15 days
notice with or without cause.

         8.3 In the event of the termination of this Agreement and the discharge
of Employee by the Company in breach and violation of this Agreement, Employee
shall not be obligated to mitigate damages by seeking or obtaining alternate
employment.

         8.4 In the event of the termination of this Agreement for any reason,
all rights and obligations of the parties provided herein shall immediately
cease except for those provisions contained in Articles 4, 6 and 8.1(a) hereof.

                                       5
<PAGE>
                                   ARTICLE IX
                         TERMINATION OF PRIOR AGREEMENTS

         9.1 This Agreement sets forth the entire agreement between the parties
and supersedes all prior agreements between the parties concerning the subject
matter hereof, whether oral or written, prior to the effective date of this
Agreement.

                                    ARTICLE X
                         ARBITRATION AND INDEMNIFICATION

         10.1 Any dispute arising out of the interpretation, application, and/or
performance of this Agreement with the sole exception of any claim, breach, or
violation arising under Articles IV or V hereof shall be settled through final
and binding arbitration before a single arbitrator in the State of New Jersey in
accordance with the Rules of the American Arbitration Association. The
arbitrator shall be selected by the Association and shall be an attorney-at-law
experienced in the field of corporate and/or employment law. Any judgment upon
any arbitration award may be entered in any court, federal or state, having
competent jurisdiction of the parties.

          10.2 The Company hereby agrees to indemnify, defend, and hold harmless
the Employee for any and all claims arising from or related to her employment by
the Company at any time asserted, at any place asserted, to the fullest extent
as provided for in the Company's Articles of incorporation and Bylaws. The
Company shall maintain such insurance as is necessary and reasonable to protect
the Employee from any and all claims arising from or in connection with her
employment by the Company, provided such insurance can be obtained without
unreasonable effort and expense.

                                   ARTICLE XI
                                  SEVERABILITY

         11.1 If any provision of this Agreement shall be held invalid and
unenforceable, the remainder of this Agreement shall remain in full force and
effect. If any provision is held invalid or unenforceable with respect to
particular circumstances, it shall remain in full force and effect in all other
circumstances.

                                       6
<PAGE>
                                   ARTICLE XII
                                     NOTICE

         12.1 All notices required to be given under the terms of this Agreement
shall be in writing and shall be deemed to have been duly given only if
delivered to the addressee in person, with written acknowledgment received, or
mailed by certified mail, return receipt requested, as follows:

                  IF TO THE COMPANY:        TeamStaff, Inc.
                                            300 Atrium Drive
                                            Somerset, NJ 08873
                                            Attn: Chief Executive Officer

                  IF TO THE EMPLOYEE:       Elizabeth Hoaglin
                                            30 Midway Island
                                            Clearwater, FL  34630

or to any such other address as the party to receive the notice shall advise by
due notice given in accordance with this paragraph. Notice shall be effective
three (3) days after delivery or mailing.

                                  ARTICLE XIII
                                     BENEFIT

         13.1 This Agreement shall inure to, and shall be binding upon, the
parties hereto, the successors and assigns of the Company, and the heirs and
personal representatives of the Employee.

                                   ARTICLE XIV
                                     WAIVER

         14.1 The waiver by either party of any breach or violation of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of construction and validity.

                                       7
<PAGE>
                                   ARTICLE XV
                                  GOVERNING LAW

         15.1 This Agreement has been negotiated and executed in the State of
New Jersey and the laws of the State of New Jersey shall govern its construction
and validity.

                                   ARTICLE XVI
                                ENTIRE AGREEMENT

         16.1 This Agreement contains the entire agreement between the parties
hereto regarding the subject matter hereof. No change, addition, or amendment
shall be made hereto, except by written agreement signed by the parties hereto.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
affixed their hands and seals effective the day and year first above written.

                                            TEAMSTAFF, INC.

                                            By:
                                                --------------------------------
                                                     Donald W. Kappauf
                                                     President & CEO

                                            ------------------------------------
                                            Elizabeth Hoaglin

                                       8<PAGE>
                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

         AGREEMENT made as of the 1st day of January 2003 by and between Edmund
C. Kenealy, residing at 12 Ruddock Road, Sudbury, MA 01776 (hereinafter referred
to as the "Employee") and TEAMSTAFF, INC., a New Jersey corporation with
principal offices located at 300 Atrium Drive, Somerset, New Jersey 08873
(hereinafter referred to as the "Company").

                              W I T N E S S E T H :

         WHEREAS, the Company and its subsidiaries are engaged in the business
of providing professional employer organization ("PEO"), temporary and permanent
staffing and payroll administration services;

         WHEREAS, the Company desires to employ the Employee for the purpose of
securing for the Company the experience, ability and services of the Employee;
and

         WHEREAS, the Employee desires to be employed with the Company, pursuant
to the terms and conditions herein set forth;

         NOW, THEREFORE, it is mutually agreed by and between the parties hereto
as follows:

                                    ARTICLE I
                                EMPLOYMENT/DUTIES

         1.1 Subject to and upon the terms and conditions of this Agreement, the
Company hereby employs the Employee, and the Employee hereby accepts such
employment in his capacity as Vice President , General Counsel.

         1.2 The Employee shall, during the term of his employment with the
Company, and subject to the direction and control of the President and/or CEO of
the Company ("Executive Management"), perform such duties and functions as he
may be called upon to perform during the term of this Agreement.

         1.3 The Employee agrees to devote full business time and his best
efforts in the performance of his duties for the Company and any subsidiary
corporation of the Company.

         1.4 The Employee shall perform, in conjunction with the Company's
Executive Management, to the best of his ability the following services and
duties for the Company and its subsidiary corporations (by way of example, and
not by way of limitation):

         (i)      Those duties attendant to the position with the Company for
                  which he is hired;

                                        1
<PAGE>
         (ii)     Establish and implement current and long range objectives,
                  plans, and policies, subject to the approval of the Executive
                  Management;

         (iii)    Managerial oversight of the Company's legal department,
                  including coordinating relationships and legal services
                  provided by outside legal service providers;

         (iv)     Legal planning for the Company, including oversight of
                  maintaining the legal status of the Company in the various
                  states of operation; and

         (v)      Promotion of the relationships of the Company and its
                  subsidiaries with their respective employees, customers,
                  suppliers and others in the business community.

         1.5 Employee shall be based in the Boston, Massachusetts area, and
shall undertake such occasional travel, within or without the United States as
is or may be reasonably necessary in the interests of the Company and the
performance of his duties.

                                   ARTICLE II
                                  COMPENSATION

         2.1 Commencing the date hereof and during the term hereof, Employee
shall be compensated initially at the rate of $160,000 per annum, subject to an
increase to be determined as of October 1, 2003 (the "Base Salary"), which shall
be paid to Employee as in accordance with the Company's regular payroll periods.

         2.2 Employee shall be entitled to receive a bonus (the "Bonus") for any
fiscal year ending during the term hereof in accordance with the Company's
Management Bonus Program to be determined as of the commencement of each fiscal
year.

         2.3 The Company shall deduct from Employee's compensation all federal,
state, and local taxes that it may now or may hereafter be required to deduct.

                                   ARTICLE III
                                    BENEFITS

         3.1 During the term hereof, the Company shall provide Employee with
group health care, insurance and other benefits as generally made available to
the Company's senior management; reimburse the Employee, upon presentation of
appropriate vouchers, for all reasonable business expenses incurred by the
Employee on behalf of the Company upon presentation of suitable documentation;
and pay to Employee the sum of $500 per month as and for an automobile
allowance.

         3.2 For each year of the term hereof, Employee shall be entitled to
three (3) weeks paid vacation.

                                       2
<PAGE>
                                   ARTICLE IV
                                 NON-DISCLOSURE

         4.1 The Employee shall not, at any time during or after the termination
of his employment hereunder, except when acting on behalf of and with the
authorization of the Company, make use of or disclose to any person,
corporation, or other entity, for any purpose whatsoever, any trade secret or
other confidential information concerning the Company's business, finances,
marketing, computerized payroll and voucher, accounting and information
business, personnel, temporary and permanent staffing and/or professional
employer organization, administrative service organization or employee leasing
business of the Company and its subsidiaries, including, without limitation,
information relating to any customer of the Company or pool of temporary
employees, product or service pricing or any other nonpublic business
information of the Company and/or its subsidiaries learned as a consequence of
Employee's employment with the Company (collectively referred to as the
"Proprietary Information"). For the purposes of this Agreement, trade secrets
and confidential information shall mean information disclosed to the Employee or
known by him as a consequence of his employment by the Company, whether or not
pursuant to this Agreement, and not generally known in the industry. The
Employee acknowledges that trade secrets and other items of confidential
information, as they may exist from time to time, are valuable and unique assets
of the Company, and that disclosure of any such information would cause
substantial injury to the Company.

                                    ARTICLE V
                              RESTRICTIVE COVENANT

         5.1 In the event of the voluntary termination of employment with the
Company prior to the expiration of the term hereof, or Employee's discharge in
accordance with Article VIII, or the expiration of the term hereof without
renewal, Employee agrees that he will not, for a period of one (1) year
following such termination (or expiration, as the case may be) directly or
indirectly enter into or become associated with or engage in any other business
(whether as a partner, officer, director, shareholder, employee, consultant, or
otherwise), which business is located in the States of Massachusetts, New
Hampshire, Vermont, Connecticut, Rhode Island, Texas, Florida, New Jersey and
New York, and such business is involved in the professional employer
organization business, or is otherwise engaged in the same or similar business
as the Company shall be engaged and is in direct competition with the Company,
or which the Company is in the process of developing, during the tenure of
Employee's employment by the Company. Notwithstanding the foregoing, the
ownership by Employee of less than 2% percent of the shares of any publicly held
corporation shall not violate the provisions of this Article V.

         5.2 In furtherance of the foregoing, Employee shall not during the
aforesaid period of

                                       3
<PAGE>
non-competition, directly or indirectly, in connection with any computerized
payroll, employee leasing, or permanent or temporary personnel business, or any
business similar to the business in which the Company was engaged, or in the
process of developing, during Employee's tenure with the Company, solicit any
customer or employee of the Company who was a customer or employee of the
Company during the tenure of his employment.

         5.3 If any court shall hold that the duration of non-competition or any
other restriction contained in this Article is unenforceable, it is our
intention that same shall not thereby be terminated but shall be deemed amended
to delete therefrom such provision or portion adjudicated to be invalid or
unenforceable or, in the alternative, such judicially substituted term may be
substituted therefor.

                                   ARTICLE VI
                                      TERM

         6.1 This Agreement shall commence on the date hereof and terminate on
December 31, 2003 (the "Expiration Date"), unless sooner terminated as provided
for herein.

         6.2 Unless this Agreement is earlier terminated pursuant to the terms
hereof, the Company and Employee agree to meet in good faith at either party's
request to discuss whether the Company intends to negotiate an extension or
renewal of this Agreement. The discussion contemplated by this Article 6.2 may
be initiated by either party by written notice given no sooner than 90 days
prior to the Expiration Date.

                                   ARTICLE VII
                             DISABILITY DURING TERM

         7.1 In the event Employee becomes totally disabled so that he is unable
or prevented from performing any one or all of his usual duties hereunder for a
period of 60 consecutive days or 60 days within any one year period, and the
Company elects to terminate this agreement in accordance with Article VIII,
paragraph (B) then, and in that event, Employee shall receive his Base Salary as
provided under Article II of this Agreement for a period of the lesser of three
(3) months commencing from the date of such total disability or the balance of
the then current one year term of this agreement. The obligation of the Company
to make the aforesaid payments shall be modified and reduced and the Company
shall receive a credit for all disability insurance payments which Employee may
receive from insurance policies provided by the Company.

                                  ARTICLE VIII
                                   TERMINATION

         8.1      The Company may terminate this Agreement:

                                       4
<PAGE>
                  a. Upon the death of Employee during the term hereof, except
that the Employee's legal representatives, successors, assigns, and heirs shall
have those rights and interests as otherwise provided in this Agreement,
including the right to receive accrued but unpaid incentive compensation and
special bonus compensation on a pro rata basis.

                  b. Subject to the terms of Article VIII, upon written notice
from the Company to the Employee, if Employee becomes totally disabled and as a
result of such total disability, has been prevented from and unable to perform
all of his duties hereunder for a consecutive period of 60 days or for 60 days
in any one year period.

                  c. Upon written notice from the Company to the Employee, at
any time for "Cause." For purposes of this Agreement, "Cause" shall be defined
as: (i) willful disobedience by the Employee of a material and lawful
instruction of the Executive Management; (ii) conviction of the Employee of any
misdemeanor involving fraud or embezzlement or similar crime, or any felony;
(iii) breach by the Employee of any material provision of this Agreement or any
material written policy or procedure of the Company; (iv) conduct amounting to
fraud, dishonesty, negligence, willful misconduct, recurring insubordination,
inattention to or unsatisfactory performance of duties which adversely affects
operations of the Company; or (v) violation of any state or federal securities
or employee labor laws or regulations relating to sexual harassment or
discrimination , as determined in good faith by the Board of Directors or a
governmental entity or court of law, provided that the Company shall not have
the right to terminate the employment of Employee pursuant to the foregoing
clauses (i), (iii), (iv) or (v) above unless written notice specifying such
breach shall have been given to the Employee and, in the case of breach which is
capable of being cured, the Employee shall have failed to cure such breach
within 20 days after his receipt of such notice.

         8.2 Employee may terminate this agreement at any time upon 15 days
notice with or without cause.

         8.3 In the event of the termination of this Agreement and the discharge
of Employee by the Company in breach and violation of this Agreement, Employee
shall not be obligated to mitigate damages by seeking or obtaining alternate
employment.

         8.4 In the event of the termination of this Agreement for any reason,
all rights and obligations of the parties provided herein shall immediately
cease except for those provisions contained in Articles 4, 6 and 8.1(a) hereof.

                                   ARTICLE IX
                         TERMINATION OF PRIOR AGREEMENTS

         9.1 This Agreement sets forth the entire agreement between the parties
and supersedes all prior agreements between the parties concerning the subject
matter hereof, whether oral or written, prior to the effective date of this
Agreement.

                                       5
<PAGE>
                                    ARTICLE X
                         ARBITRATION AND INDEMNIFICATION

         10.1 Any dispute arising out of the interpretation, application, and/or
performance of this Agreement with the sole exception of any claim, breach, or
violation arising under Articles IV or V hereof shall be settled through final
and binding arbitration before a single arbitrator in the State of New Jersey in
accordance with the Rules of the American Arbitration Association. The
arbitrator shall be selected by the Association and shall be an attorney-at-law
experienced in the field of corporate and/or employment law. Any judgment upon
any arbitration award may be entered in any court, federal or state, having
competent jurisdiction of the parties.

         10.2 The Company hereby agrees to indemnify, defend, and hold harmless
the Employee for any and all claims arising from or related to his employment by
the Company at any time asserted, at any place asserted, to the fullest extent
as provided for in the Company's Articles of incorporation and Bylaws. The
Company shall maintain such insurance as is necessary and reasonable to protect
the Employee from any and all claims arising from or in connection with his
employment by the Company, provided such insurance can be obtained without
unreasonable effort and expense.

                                   ARTICLE XI
                                  SEVERABILITY

         11.1 If any provision of this Agreement shall be held invalid and
unenforceable, the remainder of this Agreement shall remain in full force and
effect. If any provision is held invalid or unenforceable with respect to
particular circumstances, it shall remain in full force and effect in all other
circumstances.

                                   ARTICLE XII
                                     NOTICE

         12.1 All notices required to be given under the terms of this Agreement
shall be in writing and shall be deemed to have been duly given only if
delivered to the addressee in person, with written acknowledgment received, or
mailed by certified mail, return receipt requested, as follows:

                  IF TO THE COMPANY:        TeamStaff, Inc.
                                            300 Atrium Drive
                                            Somerset, NJ 08873
                                            Attn: Chief Executive Officer

                                        6
<PAGE>
                  IF TO THE EMPLOYEE:       Edmund C. Kenealy
                                            12 Ruddock Road
                                            Sudbury, MA 01776

or to any such other address as the party to receive the notice shall advise by
due notice given in accordance with this paragraph. Notice shall be effective
three (3) days after delivery or mailing.

                                  ARTICLE XIII
                                     BENEFIT

         13.1 This Agreement shall inure to, and shall be binding upon, the
parties hereto, the successors and assigns of the Company, and the heirs and
personal representatives of the Employee.

                                   ARTICLE XIV
                                     WAIVER

         14.1 The waiver by either party of any breach or violation of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of construction and validity.

                                   ARTICLE XV
                                  GOVERNING LAW

         15.1 This Agreement has been negotiated and executed in the State of
New Jersey and the laws of the State of New Jersey shall govern its construction
and validity.

                                   ARTICLE XVI
                                ENTIRE AGREEMENT

         16.1 This Agreement contains the entire agreement between the parties
hereto regarding the subject matter hereof. No change, addition, or amendment
shall be made hereto, except by written agreement signed by the parties hereto.

                                       7
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
affixed their hands and seals effective the day and year first above written.

                                            TEAMSTAFF, INC.

                                            By:
                                                --------------------------------
                                                     Donald W. Kappauf
                                                     President & CEO

                                            ------------------------------------
                                            Edmund C. Kenealy

                                        8

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