10Q doc

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GOjFL7cY+74EibVr6ULWRwn9rKo2aGQlmIpfelnw/jR0LyVDK/D1G9Xl4mH7BZv5 eS/y1tSQjrYZpDuM6W6Oig== 0000945028-00-000001.txt : 20000203 0000945028-00-000001.hdr.sgml : 20000203 ACCESSION NUMBER: 0000945028-00-000001 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19991031 FILED AS OF DATE: 20000131 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BUSINESS RESOURCE GROUP CENTRAL INDEX KEY: 0000945028 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-FURNITURE & HOME FURNISHINGS [5020] IRS NUMBER: 770150337 STATE OF INCORPORATION: CA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-26208 FILM NUMBER: 517070 BUSINESS ADDRESS: STREET 1: 2150 N FIRST ST STREET 2: STE 101 CITY: SAN JOSE STATE: CA ZIP: 95131 BUSINESS PHONE: 4083253200 MAIL ADDRESS: STREET 1: 2150 NORTH FIRST STREET SUITE 101 CITY: SAN JOSE STATE: CA ZIP: 95131 10-K405 1 FORM 10-K FOR THE YEAR ENDED OCTOBER 31, 1999 10Q doc

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(MARK ONE)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 1999

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ___________ TO _____________

Commission file number 0-26208

BUSINESS RESOURCE GROUP
(Exact name of Registrant as Specified in its Charter)

California 77-0150337

(State or Other Jurisdiction of Incorporation or Organization) (IRS Employer Identification Number)

2150 NORTH FIRST STREET, SUITE 101
SAN JOSE, CALIFORNIA 95131
(Address of Principal Executive Offices including Zip Code)

(408) 325-3200
(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK $0.01 PAR VALUE
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of the Registrant was approximately $5,882,367 as of December 31, 1999, based upon the closing sale price on the Nasdaq National Market reported for such date. Shares of Common Stock held by each officer and director and by each person who owns 5% or more of the outstanding Common Stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

There were 5,232,549 shares of Registrant's Common Stock outstanding as of December 31, 1999.

DOCUMENTS INCORPORATED BY REFERENCE

PORTIONS OF THE PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MARCH 23, 2000 ARE INCORPORATED BY REFERENCE INTO PART III OF THIS REPORT ON FORM 10-K.

BUSINESS RESOURCE GROUP

FORM 10-K
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1999

TABLE OF CONTENTS

PART I

Item 1. Business

Item 2. Properties

Item 3. Legal Proceedings

Item 4. Submission of Matters to a Vote of Security Holders

PART II

Item 5. Market for Registrant's Common Stock and Related Stockholder Matters

Item 6. Selected Financial Data

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

Results of Operations

Liquidity and Capital Resources

Year 2000 Compliance
Business Environment and Risk Factors

Item 7A. Quantitative and Qualitative Disclosure About Market Risks

Item 8. Financial Statements and Supplementary Data

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

PART III

Item 10. Directors and Executive Officers of the Registrant

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management

Item 13. Certain Relationships and Related Transactions

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

Signatures

INTRODUCTORY STATEMENT

Except for the historical information contained in this Annual Report on Form 10-K, the matters discussed herein are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected. Such forward-looking statements include, without limitation, statements relating to the Company's future revenue, gross margins, operating expenses, management's plans and objectives for the Company's future operations, Year 2000 readiness, and the sufficiency of financial resources to support future operations and expenditures. Factors that could cause actual results to differ materially include, but are not limited to, the timely availability, delivery and acceptance of new products and services, the continued strength of sales to Cisco Systems, Inc. (one of the Company's principal customers), the impact of competitive products and pricing, the management of growth and acquisitions, and other risks detailed below and included from time to time in the Company's other reports filed with the Securities and Exchange Commission ("SEC") and press releases, copies of which are available from the Company upon request. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

References made in this Annual Report on Form 10-K to "BRG," the "Company" or the "Registrant" refer to Business Resource Group.

PART I

Item 1. Business

Business Resource Group, a California corporation, was organized in 1986 and is a leading provider of workspace products and services to businesses. Headquartered in San Jose, California, the Company has additional offices in San Francisco, Los Angeles and San Diego, California; Las Vegas, Nevada; Phoenix, Arizona; Dallas, Texas; and Raleigh and Greensboro, North Carolina. Between July 1989 and June 25, 1995, the Company was an S Corporation pursuant to the Internal Revenue Code of 1986, as amended. Effective June 25, 1995, in conjunction with the Company's initial public offering of its common stock, the Company terminated its S Corporation status and became a C Corporation.

The Company markets a full range of new office workstation products, refurbished office systems furniture and related services such as facilities management outsourcing and consulting services, computer- aided facilities management, computerized space planning and design, project management, move management, installation, product specification and order management. The Company believes that its broad scope of services allows it to offer a customer-oriented, single-source solution that provides for effective management of workspace requirements for growing and changing businesses, while minimizing the involvement of their in-house staff through outsourcing.

Financial information about the Company's business segments is included in Note 16 of the Notes to Consolidated Financial Statements in Item 8.

Industry Background

According to The Business and Institutional Furniture Manufacturer's Association ("BIFMA"), the United States office furniture trade association, estimated office furniture manufacturers' shipments of new product in the United States in 1999 were approximately $12 billion. The Company believes that on-going changes in corporate organizational structures, technology and work processes are driving growth in office furniture products and services. These changes are driven by several significant factors including continued new business growth, corporate restructuring and reorganizing, corporate relocations, new office technology and concerns about ergonomic standards. Management also believes recent market trends towards outsourcing in order to focus on core business strengths have influenced the growth of the office furniture manufacturing and service industry.

The Company believes, based on its experience with customers, that the desire to minimize in-house facilities management headcount, reduce overhead and improve coordination has led many companies to outsource facilities-related tasks where feasible, including space planning, design and project management and fulfillment services. Furthermore, customers' use of modular office systems has increased the importance of product functionality and layout, which have become increasingly complex due to the need to integrate rapidly changing office technology requirements. The Company believes that such trends have led to the demand for a proactive workspace services and products solution.

Customer Oriented Integrated Solution

The Company believes that traditional approaches to the business furnishings industry are not well suited to meet the current requirements of growing and changing businesses. In response, the Company has positioned itself as the representative of the customer and as a single source provider of a full range of integrated workspace solutions. The Company has grown due to management's recognition and response to customer requirements for a single source solution for facilities needs.

The Company has leveraged its knowledge of the office furniture industry, including suppliers and business methods, to develop an integrated approach which offers a single-source point of contact for modern interior workspaces. This approach incorporates a consultative selling approach in which the Company's sales representatives listen to the customer's needs. A team of BRG professionals chosen for each account then meets with the customer to build a partnership and reach consensus on the solution which best suits the customers needs. The Company believes it is able to fashion an integrated solution because of the wide array of services and products it can provide. The Company believes it offers customers a much broader range of value-added services and product choices than its major competitors.

The Company believes the benefits to customers of the Company's integrated solution approach include:

Reduced overhead and more efficient coordination by having a single point of contact;
More favorable pricing, product selection and delivery available from a multi-line representative;
Accelerated design and installation through early coordination with a service provider; and
Superior customer communications, response and project control through the implementation of highly automated systems.

Services And Products

The Company provides integrated workspace solutions for customers from the suite of services and products its offers:

Workspace Services

Workspace Product-Related Services. A substantial portion of the Company's services are initiated prior to delivery of workspace products, including overall project management, computerized space planning and design, product specification and order management. The Company believes that the superior quality of its services differentiates its services from its competitors' and contributes to the Company's ability to win initial orders. The Company believes that its pre- installation services allow a close and efficient partnership with customers, moving them from needs identification and analysis to the development and selection of the solutions which best fit their needs. Once the customer and the Company have identified the workspace products best suited to the customer's needs, the Company provides additional services to implement set-up and maintenance of these products in the customer's facility and provides coordination and management services both during and after the move.

Facilities Strategic Planning. The Company provides a systematic needs analysis based on a customer's current facility and their future growth plans. The resulting analysis will often yield a strategic facility plan which allows for facility programming, site selection, lease reviews and facilities alternatives.

Facilities Planning Outsourcing. The Company fulfills a customer's short or long term staffing requirements by providing experienced facility professionals for specific temporary assignments. This service offers the customer operational and financial flexibility in meeting staffing requirements by allowing the customer to focus fixed resources on its core competencies.

Facilities Automation Services. The Company, on a contract, outsourced or data center basis, provides efficient access to facilities information throughout organizations by automating and standardizing processes and data. The Company's internet and desktop based solutions are designed to incorporate cutting-edge technology and enable centralized data control, standardization, reporting and analysis throughout all areas of facilities management, such as physical space, people, properties, leases, assets, maintenance, telecommunications and utilities.

Design Management. The Company manages a design team on behalf of its customers, which it believes ensures that the customer's design requirements are met while staying within time frame commitments and budget constraints.

Move Management. The Company coordinates all components of a customer's move to a new location, including the development of a master move plan, communication to employees, the coordination of all vendor activities, and the management of building activation. This service is provided with minimal involvement or downtime to the customer's employees or disruption to ongoing business activities.

Workspace Products

The Company offers a broad range of office furniture products and accessories that support the Company's strategy of providing a single source for quality workspace management. The Company's five basic product categories are new office furniture systems; seating; storage and filing cabinets; desks and casegoods; and refurbished office furniture systems.

Sales and Marketing

The Company markets its products and services through a direct sales force consisting of approximately 58 salespeople, operating out of the Company's offices in San Jose, San Francisco, Los Angeles and San Diego, California; Las Vegas, Nevada; Phoenix, Arizona; Dallas, Texas; and Raleigh and Greensboro, North Carolina.

Customers

The Company's client base includes companies in networking and communications, software, electronics, financial services, life sciences and health care industries, as well as service providers of various types. The Company's customers also vary widely in size, ranging from large enterprises with over $1.0 billion in sales, to emerging companies, which are often thinly staffed and which the Company believes are, therefore, receptive to the Company's comprehensive solution strategy.

The Company's largest customer is Cisco Systems, Inc., which accounted for approximately 48%, 44% and 30% of net revenues during the fiscal years ending October 31, 1999, 1998 and 1997 respectively. No other single customer accounted for more than 10% of revenues in fiscal 1999, 1998 or 1997.

Raw Materials and Suppliers

There was no material change during fiscal 1999 in the source and availability of workspace products. None of the products currently offered by the Company are obtained on a sole-source basis from any vendor, and materials are considered to be widely available. The Company does not anticipate that the availability of materials will be a significant factor in the Company's business. During the fiscal years ended October 31, 1999, 1998 and 1997 respectively, the Company purchased approximately 44%, 43% and 24% of its total workspace products purchases from one supplier, Teknion, Inc.

Competition

The office workspace products marketplace is highly competitive and fragmented with a significant number of companies providing products and services. In the United States, the Company believes the primary manufacturers of office furniture products are: Haworth, Inc., Herman Miller, Inc., HON Industries, Inc., Kimball International, Inc., Knoll, Inc., Steelcase, Inc., and Teknion, Inc. The Company currently represents HON Industries, Inc., Kimball International, Inc., and Teknion, Inc. All of these manufacturers typically market their products through independent distribution companies who are responsible for providing on- going service to their customers. Typically these independent distribution companies are small, privately-held organizations that vary in size, product offering and breadth of service offering.

The Company believes that while product design, quality and price play a part in a customer's purchasing decision, the primary purchasing decision is based upon the independent distributor's overall service capabilities. Independent distributors compete on the basis of: (i) project management capabilities, (ii) strategic facilities consulting capabilities, (iii) innovative use of technology tools, (iv) on-time delivery and installation and (v) price. The Company believes its comprehensive range of products and services, ability to utilize trained company employees in the delivery of its full range of comprehensive services, use of current technology to provide higher level solutions and overall financial strength, provides a competitive advantage. To remain competitive, the Company must continue to offer a broad range of services and products to meet the needs of its customers, maintain quality levels, offer flexible delivery schedules, deliver finished products on a reliable basis and compete favorably on the basis of price. There can be no assurance that other manufacturers and independent distributors will not price their products and services, or offer other terms, to be more competitive with the Company's products and services, or that such actions, if taken, would not have a material adverse affect on the Company or its results of operations.

Employees

As of October 31, 1999, the Company had approximately 512 full-time employees. None of the Company's employees are represented by a collective bargaining agreement. From time to time, installation of workspace products require the use of union labor to comply with the requirements of the customer or the work rules for the job location. In these situations, the Company subcontracts the installation to other parties that employ union labor. To date, the Company has not experienced difficulties obtaining subcontract installation services where required. The Company believes its relationship with its employees is good.

Item 2. Properties

The Company currently leases approximately 21,000 square feet of office space at 2150 North First Street in San Jose, California. The Company leases the majority of this space under an operating lease which runs through August 2001. The San Jose facilities serve as the Company's principal offices and also function as a working showroom for products offered by the Company. The Company also leases sales offices, which function as working showrooms, in San Francisco, California; Phoenix, Arizona and Dallas, Texas. In San Francisco, the sales office leases approximately 6,800 square feet under an operating lease which runs through December 2003; in Phoenix, the sales office leases approximately 4,200 square feet of space under an operating lease which runs through January 2004; and in Dallas, the sales office leases approximately 11,900 square feet of space under an operating lease which runs through March 2002. The Company maintains a distribution center, in Dallas, Texas under an operating lease for approximately 21,000 square feet of space running through October 2002. The Company, through its subsidiary, OFN, Inc., also leases approximately 25,000 square feet of office and warehouse space in San Diego, California under an operating lease which expires in April 2002. Through its subsidiary, Re'Nu Acquisition Corp., the Company leases approximately 55,800 square feet of office and warehouse space in Santa Fe Springs, California under operating leases which run through March 2002 and maintains sales offices in Orange County and Sherman Oaks, California, and Las Vegas, Nevada. Through its subsidiary, MOI Acquisition Corp., the Company leases approximately 50,000 square feet of office and warehouse space in Morrisville, North Carolina under an operating lease running through September 2008 and maintains a sales office in Greensboro, North Carolina. The Company leases approximately 3,400 square feet of office space in San Antonio, Texas under an operating lease with a term running through November 2001. The Company has entered into a sublease agreement to lease the existing San Antonio facility to a company at the same lease rate and for the same term as the Company has in its operating lease. The Company believes that its existing facilities will generally be sufficient for its needs for the foreseeable future.

Item 3. Legal Proceedings

The Company is not a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse affect on the Company. The Company may from time to time become a party to various legal proceedings arising in the normal course of its business.

Item 4a. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 4b. Executive Officers of the Registrant

Information with respect to directors of the Company is incorporated by reference from the information under the caption "Election of Directors--Nominees" in the Registrant's Proxy Statement. The executive officers of the Company, and their ages as of January 27, 2000, are as follows:

Name Age Position

John W. Peth........ 51 President, Chief Executive Officer and Director Brian D. McNay...... 43 Executive Vice President of Sales and Director John M. Palmer...... 41 Chief Operating Officer, Vice President, Finance and Chief Financial Officer Jeffrey Tuttle...... 43 Executive Vice President of Marketing and Director

Mr. Peth has served as President and Chief Executive Officer since December 1997 and also served as Chief Financial Officer from December 1997 to February 1998 and as a director of the Company since April 1995. From July 1997 to December 1997, Mr. Peth was a consultant to the Company. From June 1996 to March 1997, Mr. Peth served as Acting President and Chief Executive Officer of Tab Products Co. ("TAB"), an office filing and furniture systems manufacturer and distributor. From April 1991 until June 1997, Mr. Peth served as Executive Vice President and Chief Operating Officer of TAB. From August 1984 to April 1991, Mr. Peth served as the managing partner of the San Jose region of Deloitte & Touche LLP and one of its predecessor accounting firms. Mr. Peth is also a director of Aspect Telecommunications, Inc., a provider of call transaction processing systems. Mr. Peth received his BA degree in Economics in 1970 from the University of California at Santa Barbara, and an MBA from the University of California at Los Angeles in 1972.

Mr. McNay has served as Executive Vice President of Sales since April 1995, and as a member of the Board of Directors since its inception in April 1987. Mr. McNay also served as President between April 1987 and April 1995. Mr. McNay was also the founder and owner of Business Interiors, a sole proprietorship sold to the Company in April 1987. In addition, Mr. McNay served as a sales executive at various office furniture dealerships from 1979 to 1986, including the Contract Source Center, the Contract Office Group and Design Performance.

Mr. Palmer has served as Chief Operating Officer since August 1999 and as Vice President, Finance and Chief Financial Officer since February 1998. From August 1994 to February 1998 Mr. Palmer served as Vice President, Finance and Chief Financial Officer of TAB, an office filing and furniture systems manufacturer and distributor. From September 1992 to August 1994, he served as Vice President, Finance for Tab Products of Canada, Limited. From January 1986 to September 1992 Mr. Palmer served as Controller of Wright Line of Canada Ltd. He received his C.G.A. designation from the Certified General Accountants Association of Canada in 1985.

Mr. Tuttle has served as Executive Vice President of Marketing since April 1995, and as a member of the Board of Directors since its inception in 1987. Mr. Tuttle also served as Vice President of Sales between April 1987 and April 1995. From 1978 to 1987, Mr. Tuttle served as a sales executive with KBM Office Furniture, an office furniture dealership. He received his BS degree in Marketing in 1980 from Santa Clara University.

PART II

Item 5. Market for the Registrant's Common Stock and Related Shareholder Matters

The Company's Common Stock has been traded on the Nasdaq National Market under the symbol BRGP since the effective date of the Company's initial public offering on June 27, 1995. The price per share reflected in the table below represents the range of low and high closing sale prices for the Company's Common Stock as reported in the Nasdaq National Market for the quarters indicated.

High Low

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

Fiscal 1999:

Fourth Quarter ended October 31, 1999........... 4 1/16 3 Third Quarter ended July 31, 1999............... 3 3/4 2 11/16 Second Quarter ended April 30, 1999............. 3 7/16 2 5/8 First Quarter ended January 31, 1999............ 3 5/8 2 3/8

High Low

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

Fiscal 1998:

Fourth Quarter ended October 31, 1998........... 3 1/4 1 1/8 Third Quarter ended July 31, 1998............... 3 3/8 2 3/16 Second Quarter ended April 30, 1998............. 3 3/4 3 1/16 First Quarter ended January 31, 1998............ 3 3/4 3

The Company estimates it had approximately 527 shareholders as of December 31, 1999, including beneficial owners included in securities position listings as described in Rule 17Ad-8.

The Company has never paid a cash dividend on its capital stock. Covenants in the Company's revolving line of credit facility prohibit the Company from paying dividends without prior approval by the lender. The Company currently anticipates that it will retain all available funds for use in the operation and expansion of its business, and does not anticipate paying any cash dividends in the foreseeable future.

The Company issued 19,100 shares of Common Stock to 191 employees of the Company on January 6, 1999, as a bonus pursuant to the 1998 Employee Stock Bonus Plan. Only employees who were employed with the Company on October 31, 1998 and had been in employment with the Company for at least six months prior to October 31, 1998 were eligible to receive the bonus. The issuance did not constitute a sale of securities under the Securities Act of 1933, as amended, and therefore did not require registration.

Item 6. Selected Financial Data

Summary Financial Data

(in thousands, except per share data)

Consolidated Statements of Income Data:

                                              Year Ended October 31,
                               -------------------------------------------------
                                 1999      1998      1997      1996      1995
                               --------- --------- --------- --------- ---------

Net revenues:
  Workspace products.......... $103,511   $76,433   $58,574   $68,125   $34,509
  Workspace services..........   21,463    17,132    14,127    10,155     6,119
                               --------- --------- --------- --------- ---------
   Total net revenues.........  124,974    93,565    72,701    78,280    40,628
                               --------- --------- --------- --------- ---------
Cost of net revenues:
  Workspace products..........   81,088    60,623    47,100    55,051    26,605
  Workspace services..........   16,214    12,611    10,330     7,320     4,179
                               --------- --------- --------- --------- ---------
   Total cost of net revenues.   97,302    73,234    57,430    62,371    30,784
                               --------- --------- --------- --------- ---------
Gross profit..................   27,672    20,331    15,271    15,909     9,844
Selling, general and
  administrative expenses.....   22,449    17,498    16,622    12,870     8,143
                               --------- --------- --------- --------- ---------
Income/(loss) from operations.    5,223     2,833    (1,351)    3,039     1,701
Other income/(expense)........     (663)     (264)       66       124         7
                               --------- --------- --------- --------- ---------
Income/(loss) before
  income taxes................    4,560     2,569    (1,285)    3,163     1,708
Income taxes..................    1,885     1,066      (523)    1,309       122
                               --------- --------- --------- --------- ---------
Net income/(loss).............   $2,675    $1,503     ($762)   $1,854    $1,586
                               ========= ========= ========= ========= =========
Net income/(loss) per share
  Basic.......................    $0.52     $0.30    ($0.16)    $0.38
                               ========= ========= ========= =========
  Diluted.....................    $0.52     $0.30    ($0.16)    $0.38
                               ========= ========= ========= =========
Pro forma(1):
  Historical income before
   income taxes...............                                           $1,708
  Pro forma income taxes......                                              709
                                                                       ---------
Pro forma net income..........                                             $999
                                                                       =========
Pro forma net income per
  share(1):
  Basic.......................                                            $0.26
                                                                       =========
  Diluted.....................                                            $0.26
                                                                       =========

(1) Pro Forma Net Income and Net Income Per Basic and Diluted Shares -- Through June 1995, the Company was not subject to federal and most state income taxes since its shareholders elected that the Company be taxed as an S Corporation pursuant to the Internal Revenue Code. Therefore, no provision for federal income taxes has been included in the summary financial data for fiscal 1994 and the portion of fiscal 1995 during which the Company was an S Corporation. Although the S Corporation election is recognized for California income tax purposes, the State of California requires S Corporations to pay a tax of 1.5% of taxable income. Effective June 1995, in conjunction with the Company's initial public offering of its common stock, the Company's status as an S Corporation was terminated and the Company became subject to federal and state income taxes.

The pro forma information presented with the summary financial data reflect a provision for income taxes at an effective rate of 41% for fiscal 1995. Pro forma financial information is provided to show what the significant effects on the historical financial information might have been had the Company been treated as a C Corporation for income tax purposes for all of fiscal 1995.

Consolidated Balance Sheet Data:

October 31, ------------------------------------------------- 1999 1998 1997 1996 1995 --------- --------- --------- --------- --------- (in thousands)

Working capital............... $10,187 $9,075 $9,279 $10,063 $9,470 Total assets.................. 50,813 27,978 20,760 22,560 16,053 Long-term obligations......... 1,552 733 -- -- 120 Shareholders' equity.......... 17,455 14,396 12,452 13,002 11,020

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the

Financial Statements and Notes thereto included elsewhere in this Annual

Report on Form 10-K.

Overview

Most of the Company's net revenues are derived from billings for workspace products, including new office furniture systems, seating, storage and filing cabinets, desks and casegoods, and refurbished office furniture systems. The Company's experience is that its success in generating product revenues is dependent upon providing a full range of related services

The Company has leveraged its knowledge of the office furniture industry, including suppliers and business methods, to develop an integrated approach which offers a single source point of contact for modern interior workspaces. This approach incorporates a consultative selling approach in which the Company's sales representatives listen to the customer's needs. A team of BRG professionals chosen for each account then meets with the customer to build a relationship and reach consensus on the solution which best suits the customers needs. The Company believes it is able to fashion an integrated solution because of the wide array of services and products it can provide. The Company believes it is able to offer customers a much broader range of value-added services and product choices than its major competitors.

Results of Operations:

Net Revenues

Net revenues increased $31.4 million, or 34%, to $125.0 million in fiscal 1999 from $93.6 million in fiscal 1998. The increase in net revenues was attributable to increased revenues of $20.3 million from Cisco Systems and $11.1 million from other customers. Fiscal 1999 product revenues of $103.5 million increased $27.1 million, or 35%, over fiscal 1998 product revenues of $76.4 million. Increased product revenues were attributable to a $19.1 million increase in new product revenue and a $8.0 million increase in refurbished product revenue. Services revenues in fiscal 1999 were $21.5 million, an increase of $4.4 million, or 26%, as compared to services revenues of $17.1 million in fiscal 1998. The increase in services revenues was attributable to increased product- related services revenues of $2.6 million as a result of higher product sales, in addition to increased revenues of $1.7 million from facilities planning and automation services.

Net revenues increased $20.9 million, or 29%, to $93.6 million in fiscal 1998 from $72.7 million in fiscal 1997. The increase in net revenues was attributable to increased revenues of $18.6 million from Cisco Systems and $2.3 million from other customers. Fiscal 1998 product revenues of $76.4 million increased $17.8 million, or 30%, over fiscal 1997 product revenues of $58.6 million, primarily due to the increased Cisco Systems business. Services revenues in fiscal 1998 were $17.1 million, an increase of $3.0 million, or 21%, as compared to services revenues of $14.1 million in fiscal 1997. The increase in services revenues was attributable to increased revenue from product-related services of $2.0 million as a result of higher product sales, in addition to increased services revenues of $1.0 million from facilities planning and automation services.

Gross Profit

Gross profit as a percentage of net revenues increased to 22.1% in fiscal 1999 from 21.7% in fiscal 1998. The improved overall gross profit is the result of product margins improving from 20.7% in fiscal 1998 to 21.7% in fiscal 1999, primarily due to a change in the sales mix toward higher margin refurbished products, partially offset by a decline in services gross margins during the year to 24.5% in fiscal 1999 from 26.4% in fiscal 1998.

Gross profit as a percentage of net revenues increased to 21.7% in fiscal 1998 from 21.0% in fiscal 1997. The improved overall gross profit is the result of new product margins improving from 19.6% in fiscal 1997 to 19.9% in fiscal 1998 and a change in sales mix with the introduction of refurbished products which generally sell at higher gross margins, which were partially offset by a slight decline in services gross margins during the year.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for fiscal 1999 were $22.4 million, an increase of approximately $4.9 million over the $17.5 million reported in fiscal 1998. The increase in selling, general and administrative expense was primarily attributable to incremental expenses as a result of acquisitions completed during fiscal 1998 and fiscal 1999. As a percentage of revenue, selling, general and administrative expenses were 18.0% of revenues in fiscal 1999, as compared to 18.7% in fiscal 1998.

Selling, general and administrative expenses for fiscal 1998 were $17.5 million, an increase of approximately $900,000 over the $16.6 million reported in fiscal 1997. The increase in selling, general and administrative expense was primarily attributable to incremental expenses as a result of the acquisition of OFN, Inc. in May 1998. As a percentage of revenue, selling, general and administrative expenses were 18.7% of revenues in fiscal 1998, as compared to 22.9% in fiscal 1997.

Other income (expense) - net

Other income (expense) for fiscal 1999 consisted of interest expense of $678,000 as compared to interest expense of $319,000 in fiscal 1998. The increase in interest expense is the result of increased use of the Company's bank line of credit as a result of the acquisition of Re'Nu Office Systems, Inc. and MOI Inc. and increased in-transit inventories during the year.

Other income (expense) for fiscal 1998 consisted of interest expense of $319,000 as compared to interest income of $66,000 in fiscal 1997. The increase in interest expense is the result of increased use of the Company's bank line of credit as a result of the acquisition of OFN, Inc. and increased in-transit inventories during the year. The gain on sale of assets was primarily the result of the sale of certain assets from the Company's former San Antonio operations.

Income Taxes

Income tax expense, as a percentage of pre-tax income, was 41.3% for the year ended October 31, 1999, compared to income tax expense of 41.5% of pre-tax income for the year ended October 31, 1998.

Liquidity and Capital Resources

Working capital at October 31, 1999 was $10.2 million, an increase from the working capital of $9.1 million reported at October 31, 1998. The current ratio of 1.3 at October 31, 1999 decreased from the current ratio of 1.7 at October 31, 1998. During fiscal 1999, net cash used by operating activities was $1,436,000, an increased use of cash from the $313,000 in net cash used by operating activities in fiscal 1998. Accounts receivable at October 31, 1999 was $18.0 million, an increase of $7.3 million from accounts receivable of $10.7 million reported at October 31, 1998. The increased accounts receivable is primarily a result of increased sales volume in the fourth quarter of fiscal 1999 as compared to the fourth quarter of fiscal 1998. Inventories at October 31, 1999 were $20.1 million, an increase of $11.8 million over the $8.3 million in inventories reported at October 31, 1998. The increased inventories were the result of an increase in in-transit inventories at October 31, 1999 by approximately $8.8 million, representing payments made to vendors on new office workstation product that is either in- transit to customers or awaiting installation at the customer's facility. In addition, inventories increased as a result of incremental inventories of approximately $3.0 million in refurbished product associated with the Company's subsidiaries, MOI Acquisition Corp., RN Acquisition Corp. and OFN, Inc. Accounts payable at October 31, 1999 were $15.1 million, an increase of approximately $11.7 million from accounts payable of $3.4 million reported at October 31, 1998, reflecting the increased in-transit Inventories at October 31, 1999. Accrued liabilities at October 31, 1999 were $6.3 million, an increase of $1.2 million from accrued liabilities of $5.1 million at October 31, 1998. The increase in accrued liabilities is primarily attributable to increased sales taxes payable and accrued sales commissions, partially offset by a decrease in customer deposits.

During fiscal 1999, the Company invested approximately $2.3 million in property and equipment, which represented investments in management information systems, leasehold improvements, and furniture and equipment of approximately $1.7 million, and includes $0.6 million of equipment related to the acquisitions of Re'Nu Office Systems, Inc. and Modern Office Interiors, Inc. Capital expenditures for fiscal 2000, which will consist primarily of investments in showroom furniture replacements and information technology, are expected to be in the range of $0.5 million to $1.0 million.

The Company has a $15.0 million credit facility with a bank which expires in February 2001. The Company maintains an irrevocable stand-by letter of credit in the amount of $3.0 million against this facility. At October 31, 1999, the Company had bank borrowings of $9.2 million under such credit facility.

The Company believes its existing cash, together with cash generated from operations and the Company's available borrowing capacity will provide sufficient funds to meet the Company's anticipated working capital requirements for the foreseeable future.

Year 2000

The Company's overall goal was and remains, to be prepared for the year 2000, meaning that critical systems, devices, applications or business relationships have been evaluated and are expected to be suitable for continued use into and beyond the year 2000, or when contingency plans are put into place. The Company's assessments to date of the impact of the year 2000 upon its critical systems, devices, applications or business relationships have not identified any material issues with respect to their ability to function appropriately. The Company continues to monitor and assess any potential impact. If, as a result of ongoing assessment, a business function is determined to be at risk, contingency plans will be developed on an as needed basis. Based on assessment efforts to date, the Company does not believe that the year 2000 issue will have a material adverse effect on its financial condition or results of operations. The Company's beliefs and expectations, however, are based on certain assumptions and expectations that ultimately may prove to be inaccurate.

Even though the date is now past January 1, 2000, and the Company has not experienced any immediate adverse impact from the transition to the Year 2000, it cannot provide assurance that its suppliers and customers have not been affected in a manner that is not yet apparent. In addition, certain computer programs which were date sensitive to the Year 2000 may not have been programmed to process the Year 2000 as a leap year, and any negative consequential effects remain unknown. As a result, the Company will continue to monitor its Year 2000 compliance and the Year 2000 compliance of its suppliers and customers.

Costs: The Company estimates that the total cost of replacing its information systems and achieving year 2000 readiness for its internal systems and equipment will range from $1.7 to $2.0 million, of which $1.7 million has been incurred by October 31, 1999. Based on its current estimates and information currently available, the Company does not anticipate that the costs associated with this project will have a material adverse affect on the Company's consolidated financial position, results of operations or cash flows in future periods. The Company's aggregate cost estimate does not include time and costs that may be incurred by the Company as a result of the failure of any third parties, including suppliers, to be prepared for the year 2000 or costs to implement any contingency plans.

Based upon assessments to date, the Company believes the most reasonably likely worst case scenario would be the possible malfunction of personal computer equipment or non- system critical applications software . In the event of such malfunction the Company would replace the equipment or software.

Business Environment and Risk Factors

The Company's future results of operations may be adversely affected by various factors, including those discussed below. The Company's revenues and operating results may fluctuate from period to period depending on such factors as the timing of customer orders, the timing of revenue and cost recognition, variations in contract service and product mix, changes in customer buying patterns, changes in vendor lead times and trends in the economy of the geographic region in which the Company operates. Any unfavorable changes in these or other factors could have a material adverse effect on the Company's business and results of operations. Given the variability of these factors, the Company expects that quarter to quarter performance may fluctuate and that results in any single quarter may therefore not be indicative of future results.

A large portion of the Company's net revenues for any period are frequently dependent on a few large customer projects involving relocation, including a move to a new facility or an upgrade of an existing facility. At the conclusion of a major project, that customer may not have an immediate need for additional services or products on the same scale. The Company does not enter into long term or volume purchase contracts with its customers, and customers may discontinue further purchases of the Company's services or products at any time without notice. There can be no assurance that any of the Company's customers will expand their operations, relocate their offices or facilities or otherwise require the Company's services or products in the future. To maintain or increase existing levels of revenues and profits, the Company must identify and book major projects within its existing base of customers or with new customers. There can be no assurance that any of the Company's current customers will engage the Company for major projects in the future or that the Company will be able to obtain additional new customers.

A large portion of the Company's revenues are derived from projects involving relocation to new facilities; additions, moves and changes to existing facilities; and outsourcing of facilities personnel to Cisco Systems, Inc. While the Company's relationship with Cisco Systems, Inc. remains strong, there can be no assurances that Cisco Systems, Inc. will continue to expand its operations, relocate its offices or facilities or otherwise require the Company's services or products in the future. In addition, there can be no assurances that Cisco Systems, Inc. will continue to engage the Company for major projects in the future.

While the Company's strategy is to maintain multiple sources of supply for each of its workspace product lines, the Company is dependent upon these suppliers for timely delivery and product quality once orders are placed. The Company has, from time to time, experienced delays in product delivery from a number of suppliers. These delays have adversely affected the timing of customer deliveries and installations. Delays by suppliers have also resulted in increased costs to the Company and in certain cases lost revenues. Almost all of the Company's purchases from its vendors are made on a purchase order basis, and liabilities of such vendors to the Company for late deliveries are therefore principally based on the terms and conditions set forth in the applicable purchase order and the supplier's confirming document (if any). The Company customarily enters into negotiations with its vendors for price adjustments and late fees as may be appropriate in the event of late deliveries. Future delays in delivery by suppliers or poor product quality could have a material adverse effect on the Company's ability to meet customer requirements and thereby adversely affect revenues or increase costs.

The market for workspace services and products is influenced by economic conditions, including consumer behavior and consumer confidence, the level of discretionary spending, interest rates and credit availability. Purchases of these services and products are often discretionary and tend to be deferred in times of economic stress. During economic downturns, the furniture industry tends to experience longer and deeper periods of recession than the general economy. Although the economy in the United States, and in particular those markets in which the company has offices, has been strong in recent years, there can be no assurance that it will continue to be strong or that it will not decline in the future.

The Company has made acquisitions during prior fiscal years and may continue to make acquisitions in the future. The expansion of corporate operations in addition to managing acquired operations in new geographic areas entails numerous operational and financial risks, including difficulties in assimilating acquired operations, diversion of management's attention to other business concerns, amortization of acquired intangible assets, potential loss of employees or customers of acquired operations and difficulties in developing a local market for the Company's services and products. There can be no assurance that the Company will be able to achieve growth, or effectively manage any such growth, and failure to do so could have a material adverse effect on the Company's operating results.

The Company will require significant capital for the expansion of its existing business, expansion into other geographic markets and acquisition of other businesses, each of which are key elements of the Company's strategy. There are no assurances that this capital will be available at all or available on terms which will not have a material adverse effect on the Company or its financial results.

Recent Accounting Pronouncements

In June 1998, SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, which defines derivatives, requires all derivatives be carried at fair value, and provides for hedging accounting when certain conditions are met, was issued. The Company will adopt this statement November 1, 2000. Although the Company has not yet fully assessed the effect of this statement, the Company does not believe adoption of this statement will have a material impact on the Company's financial statements.

In December 1999, the Securities and Exchange Commission (SEC) released Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements. This bulletin summarizes certain interpretations and practices followed by the Division of Corporation Finance and the Office of the Chief Accountant of the SEC in administering the disclosure requirements of the Federal securities laws in applying generally accepted accounting principles to revenue recognition in financial statements. Although the Company has not fully assessed the implications of SAB No. 101, the Company does not believe adoption of this bulletin will have a material impact on the Company's financial statements.

Item 7.a. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to interest rate risk primarily through its borrowing activities. The Company has not used derivative financial instruments to hedge such risks. There is inherent roll-over risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and business financing requirements. A hypothetical 100 basis point increase in market interest rates from levels at October 31, 1999 would not materially affect the Company's future earnings, the fair value of its borrowings, or its cash flows.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

Page

Independent Auditors' Report 17 Consolidated Financial Statements: Consolidated Balance Sheets at October 31, 1999 and 1998 18 Consolidated Statements of Operations for the Years Ended October 31, 1999, 1998 and 1997 19 Consolidated Statements of Shareholders' Equity for the Years Ended October 31, 1999, 1998 and 1997 20 Consolidated Statements of Cash Flows for the Years Ended October 31, 1999, 1998 and 1997 21 Notes to Consolidated Financial Statements 22

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of Business Resource Group:

We have audited the accompanying consolidated balance sheets of Business Resource Group and Subsidiaries (collectively the "Company") as of October 31, 1999 and 1998, and the related consolidated statements of operations, shareholders' equity and cash flows for each of the three years in the period ended October 31, 1999. Our audits also included the financial statement schedule listed at Item 14(a) (2). These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company at October 31, 1999 and 1998, and the results of its operations and its cash flows for each of the three years in the period ended October 31, 1999 in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

DELOITTE & TOUCHE LLP
San Jose, California
December 8, 1999

BUSINESS RESOURCE GROUP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

October 31,

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

1999 1998

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

ASSETS

Current assets: Cash and equivalents.................................. $479 $412 Accounts receivable, less allowance for doubtful accounts of $500 in 1999 and $400 in 1998.......... 18,026 10,662 Inventories........................................... 20,080 8,279 Prepaids and other current assets..................... 3,251 2,411 ---------- ---------- Total current assets.......................... 41,836 21,764 Property and equipment -- net........................... 3,609 3,107 Other assets............................................ 5,368 3,107 ---------- ---------- $50,813 $27,978 ========== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities: Line of credit........................................ $9,165 $3,858 Accounts payable...................................... 15,119 3,369 Accrued liabilities................................... 5,690 4,789 Income taxes payable.................................. 615 337 Current portion of long-term debt..................... 1,060 336 ---------- ---------- Total current liabilities..................... 31,649 12,689 Long-term debt.......................................... 1,552 733 Deferred Lease Liability 98 -- Deferred income tax liability........................... 59 160 Shareholders' equity: Preferred stock, par value $0.01 per share; 2,000,000 shares authorized; no shares outstanding........... -- -- Common stock, par value $0.01 per share; 50,000,000 shares authorized; outstanding: 5,170,524 shares in 1999 and 5,023,778 shares in 1998.............................................. 52 50 Additional paid-in capital............................ 11,719 11,337 Retained earnings..................................... 5,684 3,009 ---------- ---------- Total shareholders' equity.................... 17,455 14,396 ---------- ---------- $50,813 $27,978 ========== ==========

See notes to consolidated financial statements. .

BUSINESS RESOURCE GROUP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)


                                                      Year Ended October 31,
                                                --------------------------------
                                                   1999       1998       1997
                                                ---------- ---------- ----------
Net revenues:
  Workspace products...........................  $103,511    $76,433    $58,574
  Workspace services...........................    21,463     17,132     14,127
                                                ---------- ---------- ----------
          Total net revenues...................   124,974     93,565     72,701
                                                ---------- ---------- ----------
Cost of net revenues:
  Workspace products...........................    81,088     60,623     47,100
  Workspace services...........................    16,214     12,611     10,330
                                                ---------- ---------- ----------
          Total cost of net revenues...........    97,302     73,234     57,430
                                                ---------- ---------- ----------
Gross profit...................................    27,672     20,331     15,271
Selling, general and administrative expenses...    22,449     17,498     16,622
                                                ---------- ---------- ----------
Income(loss) from operations..................      5,223      2,833     (1,351)
Other income(expense):
  Interest income/(expense)....................      (678)      (319)        66
  Gain on sale of assets.......................        15         55       --
                                                ---------- ---------- ----------
          Total other income/(expense).........      (663)      (264)        66
                                                ---------- ---------- ----------
Income/(loss) before income taxes..............     4,560      2,569     (1,285)
Income taxes...................................     1,885      1,066       (523)
                                                ---------- ---------- ----------
Net income/(loss)..............................    $2,675     $1,503      ($762)
                                                ========== ========== ==========
Net income/(loss) per share
  Basic........................................     $0.52      $0.30     ($0.16)
                                                ========== ========== ==========

  Diluted......................................     $0.52      $0.30     ($0.16)
                                                ========== ========== ==========
Shares used in computation
  Basic........................................     5,122      4,963      4,902
                                                ========== ========== ==========

  Diluted......................................     5,162      4,965      4,902
                                                ========== ========== ==========

See notes to consolidated financial statements.

BUSINESS RESOURCE GROUP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands, except share data)


                               Common Stock    Additional
                          --------------------   Paid-in    Retained
                            Shares     Amount    Capital    Earnings    Total
                          ----------- -------- ----------- ---------- ---------
Balances, October 31,
 1996...................   4,858,864      $49     $10,685     $2,268   $13,002

Employee stock
  purchase program......      54,848      --          212        --        212
Net loss................         --       --         --         (762)     (762)
                          ----------- -------- ----------- ---------- ---------
Balances, October 31,
 1997...................   4,913,712       49      10,897      1,506    12,452
Employee stock
  purchase program......      10,066      --           24        --         24
Issuance of warrants....         --       --          167        --        167
Issuance of common
  stock in connection
  with acquisition......     100,000        1         249        --        250
Net income..............         --       --         --        1,503     1,503
                          ----------- -------- ----------- ---------- ---------
Balances, October 31,
 1998...................   5,023,778       50      11,337      3,009    14,396
Employee stock
  purchase program......      15,789      --           37        --         37
Employee stock issuance       17,400        1          54        --         55
Stock options exercised       13,557      --           42        --         42
Issuance of common
  stock in connection
  with acquisition......     100,000        1         249        --        250
Net income..............         --       --         --        2,675     2,675
                          ----------- -------- ----------- ---------- ---------
Balances, October 31,
 1999...................   5,170,524      $52     $11,719     $5,684   $17,455
                          =========== ======== =========== ========== =========

See notes to consolidated financial statements.

BUSINESS RESOURCE GROUP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)


                                                    Year Ended October 31,
                                              --------------------------------
                                                 1999       1998       1997
                                              ---------- ---------- ----------
Cash flows from operating activities:
  Net income (loss).........................     $2,675     $1,503      ($762)
Adjustments to reconcile to net cash
  provided (used) by operating activities:
    Depreciation and amortization...........      1,692      1,060        766
    Gain on sale of property and equipment..        (15)       (55)       --
    Warrants issued for services............        --         167        --
    Deferred income taxes...................       (101)      (211)      (292)
    Deferred lease                                    5        --         --
    Changes in operating assets and
     liabilities (net of effect of
     acquisitions):
        Accounts receivable -- net..........     (5,814)     3,554      2,358
        Inventories...........................  (10,120)    (6,391)      (424)
        Prepaids and other current assets...       (825)       (12)      (449)
        Accounts payable....................     10,516       (704)    (1,938)
        Accrued liabilities.................        551        776      1,216
                                              ---------- ---------- ----------
          Net cash provided (used) by
            operating activities............     (1,436)      (313)       475
                                              ---------- ---------- ----------
Cash flows from investing activities:
  Purchase of property and equipment.........    (1,667)    (1,562)      (928)
  Proceeds from sales of property and
    equipment................................        79         55        --
  Cash paid for acquisitions.................    (2,146)    (1,926)       --
  Other assets...............................      (228)         2        (20)
                                              ---------- ---------- ----------
          Net cash used by investing
             activities.............             (3,962)    (3,431)      (948)
                                              ---------- ---------- ----------
Cash flows from financing activities:
  Bank overdraft increase (decrease).........       --         819       (476)
  Repayment of notes payable and
    capital lease obligations                      (870)       --         --
  Issuance of notes payable                       1,840      1,069        --
  Issuance of common stock...................       134         24        212
  Borrowings on line of credit -- net........     4,361      1,970        --
                                              ---------- ---------- ----------
          Net cash provided (used) by
             financing activities............     5,465      3,882       (264)
                                              ---------- ---------- ----------
Increase (decrease) in cash and equivalents..        67        138       (737)
Cash and equivalents balances:
  Beginning of period........................       412        274      1,011
                                              ---------- ---------- ----------
  End of period..............................      $479       $412       $274
                                              ========== ========== ==========
Supplemental disclosures of cash flow
 information --
  Cash paid during the period for:
     Interest................................      $690       $319     $  --
                                              ========== ========== ==========
     Income taxes............................    $2,134       $200       $470
                                              ========== ========== ==========
Noncash investing and financing transactions:
 Acquisitions:
  Tangible assets acquired...................     3,490     $1,030     $  --
  Intangible assets acquired.................     2,380      2,407        --
  Liabilities assumed........................    (3,474)      (192)       --
  Notes payable issued.......................       --      (1,069)       --
  Common stock issued........................      (250)      (250)       --
                                              ---------- ---------- ----------
          Cash paid for acquisitions.........    $2,146     $1,926     $  --
                                              ========== ========== ==========

See notes to consolidated financial statements.

BUSINESS RESOURCE GROUP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Significant Accounting Policies

Nature of Business - Business Resource Group markets a full range of new office workstation products, refurbished office systems furniture and related services such as facilities management outsourcing and consulting services, computer-aided facilities management, computerized space planning and design, project management, move management, installation, product specification and order management.

Principles of Consolidation - The consolidated financial statements include the accounts of Business Resource Group and its wholly-owned subsidiaries (collectively the "Company"). Intercompany transactions have been eliminated in consolidation.

Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. Such management estimates include the allowance for doubtful accounts, Inventories reserves and certain accruals. Actual results could differ from those estimates.

Concentrations of Credit Risk - Financial instruments which potentially subject the Company to concentration of credit risk principally consist of cash, cash equivalents and trade accounts receivable. The Company places its cash and cash equivalents with what it believes are high credit quality financial institutions. The Company sells its products and services primarily to companies in California, Nevada, Arizona, Texas and North Carolina. The Company maintains reserves for potential credit losses.

Fair Value of Financial Instruments - The Company believes that the carrying amount for cash and cash equivalents, accounts receivable, accounts payable, and long-term debt approximated fair values at the date of the financial statements.

Cash and equivalents are highly liquid investments purchased with a maturity of three months or less when acquired.

Inventories are valued at the lower of cost or market and consist primarily of in-transit products shipped directly to customers by suppliers and refurbished product.

Property and equipment are stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of three to ten years for computer equipment, office furniture, and equipment. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the lease.

Other Assets - Goodwill represents the excess of the purchase price over the estimated fair value of net assets of acquired businesses. Goodwill is being amortized on a straight-line basis over periods not exceeding twenty years. Goodwill amortization amounted to $346,000, $215,000, and $167,000 in fiscal years 1999, 1998 and 1997, respectively. The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Impairments are recognized when the net book value of assets exceeds the future undiscounted cash flows attributable to such assets.

Revenue Recognition - Revenues from workspace product sales and vendor commissions are recognized at the start of installation of products at the customers facility. Service revenues are recognized upon customer acceptance of the project.

Stock Based Compensation - The Company accounts for stock-based awards to employees using the intrinsic value method in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees.

Income Taxes - Deferred income taxes are provided for temporary differences between financial statements and income tax reporting. Earnings per Share - Earnings per share (EPS) are computed as basic EPS using the average number of common shares outstanding and diluted EPS using the weighted average number of common and dilutive common equivalent shares outstanding, in accordance with SFAS 128 (see Note 13).

Recently Issued Accounting Standards - The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 130, Reporting Comprehensive Income, during fiscal 1999. SFAS No. 130 establishes standards for reporting comprehensive income and its components in financial statements. Total comprehensive income is comprised of net income and all changes to shareholders' equity, except those related to investments by and distributions to owners. Other comprehensive income typically includes foreign currency translation adjustments, unrealized gain or loss on investments, minimum pension liabilities, and changes in the market value of futures contracts. The Company's comprehensive income is equal to its reported net income for all years presented.

In fiscal 1999, the Company adopted SFAS No. 131, Disclosures About Segments of an Enterprise and Related Information, which establishes annual and interim reporting standards for an enterprise's business segments and related disclosures about its products, services, geographic areas and major customers. The Company operates in two reportable segments (see Note 16).

2.Inventories (in thousands)




                                                1999       1998
                                             ---------- ----------
New office workstation products in-transit     $16,335     $7,517
Refurbished products and Raw Materials....       3,745        762
                                             ---------- ----------
Total inventories..........................    $20,080     $8,279
                                             ========== ==========

3.Property and Equipment (in thousands)



                                                1999       1998
                                             ---------- ----------
Computer equipment.........................     $4,322     $3,581
Office furniture and equipment.............      1,732      1,412
Leasehold improvements.....................        562        146
                                             ---------- ----------
                                                 6,616      5,139
Accumulated depreciation and amortization..     (3,007)    (2,032)
                                             ---------- ----------
    Total property and equipment -- net....     $3,609     $3,107
                                             ========== ==========

4. Long-term Debt and Line of Credit (in thousands)




                                                1999       1998
                                             ---------- ----------
Unsecured term loans.......................       $733     $1,069
Secured term loans                               1,879
                                             ---------- ----------
                                                 2,612      1,069
Less current portion.......................     (1,060)      (336)
                                             ---------- ----------
Long-term debt.............................     $1,552       $733
                                             ========== ==========

The Company has a $733,000 unsecured term loan outstanding, bearing interest at the rate of 6% per annum with principal payments through fiscal 2001.

The Company has a $1,834,000 secured term loan outstanding from a bank with principal payments through September 2002. Interest on the bank loan is at the bank's base rate (8.25% at October 31, 1999). The Company, at its discretion, can select other interest rate methods for this bank loan. These interest rate methods include the base rate option currently in effect, an offshore rate option, and an option related to the bank's cost of funds-overnight rate.

The Company also has $45,000 of other secured term loans outstanding. The first of these notes bears interest at the rate of 12.5% per annum with principal payments through September 2000. The second of these notes bears interest at the rate of 11.7% per annum with principal payments through March 2002.

The Company has a $15,000,000 revolving line of credit with a bank which expires in February 2001. The line bears interest at the bank's base rate (8.25% at October 31, 1999) and is secured by substantially all of the Company's assets. The line of credit contains restrictions with respect to certain payments, including dividends, additional debt, and the maintenance of minimum quick assets and stockholders equity. The Company currently maintains an irrevocable stand-by letter of credit in the amount of $3.0 million against this facility.

Required principal payments of long-term debt are payable as follows: Year ending October 31, 2000 - $1,060,000; 2001 - $1,050,000; and 2002 - $502,000.

5. Accrued Liabilities (in thousands)


                                                  October 31,
                                             ---------------------
                                                1999       1998
                                             ---------- ----------
Sales taxes payable........................     $1,494       $284
Commissions payable........................      1,029        667
Customer deposits..........................        999      1,867
Other liabilities..........................      2,168      1,971
                                             ---------- ----------
          Total accrued liabilities........     $5,690     $4,789
                                             ========== ==========

6. Commitments

The Company is obligated under certain operating leases expiring at various dates through 2008. Future minimum lease payments under these lease agreements at October 31, 1999 are as follows (in thousands):

Years Ending October 31,

2000................................................ $1,963 2001................................................ 1,941 2002................................................ 1,107 2003................................................ 604 2004................................................ 317 Thereafter 1,003 ---------- Total future minimum payments......................... $6,935 ==========

Total rent charged to expense amounted to $1,551,000, $955,000 and $803,000 for the years ended October 31, 1999, 1998 and 1997, respectively.

7. Employee Benefit Plan

The Company and some of its subsidiaries have 401(k) plans (tax deferred savings plans) ("the plans") which cover substantially all full-time employees. The plans require that the Company make cash contributions ranging from 0% to 25% of contributions made by participating employees. In fiscal 1999, 1998 and 1997, the Company contributed $124,000, $107,000, and $93,000 to the plans.

8. Income Taxes

The provisions for income taxes consisted of the following (in thousands):


                                                   Year Ended October 31,
                                             --------------------------------
                                                1999       1998       1997
                                             ---------- ---------- ----------
Current:
  Federal..................................     $1,903     $1,035      ($229)
  State....................................        470        242         (2)
                                             ---------- ---------- ----------
                                                 2,373      1,277       (231)
                                             ---------- ---------- ----------
Deferred:
  Federal..................................       (392)      (195)      (207)
  State....................................        (96)       (16)       (85)
                                             ---------- ---------- ----------
                                                  (488)      (211)      (292)
                                             ---------- ---------- ----------
          Total............................     $1,885     $1,066      ($523)
                                             ========== ========== ==========

The components of the actual deferred tax assets and liabilities at October 31, 1999 and 1998 were as follows (in thousands):







                                                             October 31,
                                                        ---------------------
                                                           1999       1998
                                                        ---------- ----------
Deferred tax assets:
  Accruals recognized in different periods for tax
     purposes..........................................    $1,197       $810
  Amortization of intangibles..........................        61        104
  Deferred tax liabilities -- accelerated depreciation.      (120)      (264)
                                                        ---------- ----------
Net deferred tax assets................................    $1,138       $650
                                                        ========== ==========

Current deferred income tax assets of $1,197,000 and $767,000 at October 31, 1999 and 1998, respectively, are included in prepaids and other current assets.

The following is a reconciliation of the effective income tax rates, for financial statement purposes:


                                                   Year Ended October 31,
                                             --------------------------------
                                                1999       1998       1997
                                             ---------- ---------- ----------
Tax computed at federal statutory rate.....       34.0%      34.0%    (35.0%)
State income taxes, net of federal effect..        5.3%       5.8%     (6.1%)
Other......................................        2.0%       1.7%       0.4%
                                             ---------- ---------- ----------
Effective income tax rate..................       41.3%      41.5%    (40.7%)
                                             ========== ========== ==========

9. Major Customers and Vendors

One customer, Cisco Systems, Inc., represented 48%, 44%, and 30% of net revenues for the years ended October 31, 1999, 1998 and 1997, respectively.

One vendor, Teknion, Inc., represented 44%, 43% and 24% of total purchases for the years ended October 31, 1999, 1998 and 1997, respectively. In response to customer orders for new office furniture, the Company issues purchase orders to Teknion for the corresponding product, which is delivered directly to the customer for installation by Company personnel.

10. Warrants

The Company issued warrants in fiscal year 1995 to purchase 110,000 shares of common stock, at an exercise price per share of 120% of the initial offering price ($8.40 per share), to the underwriters who managed the initial public offering of the Company's common stock. The warrants are exercisable over a period of five years beginning from the date of the initial public offering (June 1995). The Company also issued a warrant in fiscal 1997 to purchase 60,000 shares of common stock, at an exercise price per share of $5.50 per share, to an advisor. Such warrant is exercisable at any time from April 1997 until it expires in April 2002. As of October 31, 1999, no warrants had been exercised.

11. Stock Option Plans and Stock Purchase Plans

Under the 1995 Stock Option Plan (the 1995 Plan), the Company may grant stock options at an exercise price of not less than 100% of fair market value on the date of the grant and non-statutory stock options at not less than 85% of the fair market value on the date of the grant. Stock options granted under the 1995 Plan for new employees generally become exercisable at the rate of 1/8 of the total shares granted six months after the date of the grant and 1/48 of the total number of shares granted each month thereafter. Generally, stock options granted for existing employees become exercisable at a rate of 1/48 of the total shares granted each month after the date of the grant. During fiscal 1998 and 1997, the Company increased the number of shares of common stock reserved for issuance under the 1995 Stock Option Plan (the 1995 Plan) from 1,700,000 to 2,200,000 and from 1,200,000 to 1,700,000, respectively. At October 31, 1999, 969,201 shares are available for future grant under the 1995 Plan.

In March 1998, the Company canceled stock options to acquire 361,992 shares of the Company's common stock price at prices ranging from $3.375 to $7.000 and exchanged them for options to purchase 361,992 shares of the Company's common stock at the then current market value of $3.187 per share with new vesting periods. The vesting for exchanged options was 50% of the shares on the one year anniversary of the date of grant pursuant to the exchange and 1/24th of the total number of shares granted each month thereafter. No options held by the Company's directors or executive officers were included in these pricing actions taken by the Company.

Under the 1995 Directors' Stock Option Plan (the Directors' Plan) non-employee directors of the Company receive an initial grant of non-statutory stock options on the date they join the Board and automatic annual grants of non-statutory stock options issued on the first day of each fiscal year to all non-employee directors of the Company who have served at least three months as of such grant date. Options are granted under the Directors' Plan at an exercise price equal to the fair market value on the grant date. Initial grants become exercisable ratably over four years and automatic grants become exercisable four years after the date of grants. A total of 175,000 shares of common stock have been reserved for issuance under the Directors' Plan. At October 31, 1999, 90,000 shares are available for future grant under the Directors' Plan.

Option activity under the plans is as follows:


                            1999                 1998                 1997
                    -------------------- -------------------- -------------------
                               Weighted             Weighted            Weighted
                                Average              Average             Average
                               Exercise             Exercise            Exercise
                     Options     Price    Options     Price    Options    Price
                    ---------- --------- ---------- --------- --------- ---------
Outstanding --
 beginning of year. 1,271,376     $3.28    737,863     $4.75   865,844     $5.12
Granted............   233,600     $2.98  1,177,086     $3.10   295,742     $4.24
Exercised..........   (13,557)    $3.12       --        --     (34,051)    $4.00
Canceled...........  (175,680)    $3.21   (643,573)    $4.70  (389,672)    $5.43
                    ----------           ----------           ---------
Outstanding --
 end of year....... 1,315,739     $3.24  1,271,376     $3.28   737,863     $4.65
                    ==========           ==========           =========
Exercisable at
 end of year.......   739,178     $3.33    293,695     $3.53   243,315     $4.89
                    ==========           ==========           =========


                         Options Outstanding             Options Exercisable
                  -----------------------------------  ----------------------
                                Weighted
                                 Average    Weighted                Weighted
                                Remaining    Average                 Average
  Range of          Number     Contractual  Exercise     Number     Exercise
 Exercise Prices  Outstanding  Life (Years)   Price    Exercisable    Price
- ----------------- -----------  -----------  ---------  -----------  ---------
 $2.375 - $5.000   1,265,799          3.4     $3.117      689,178     $3.119
 $5.001 - $7.000      50,000          5.8     $6.225       50,000     $6.225
                  -----------                          -----------
 $2.375 - $7.000   1,315,799          3.5     $3.235      739,178     $3.329
                  ===========                          ===========

Under the 1995 Employee Stock Purchase Plan (Purchase Plan) eligible employees may purchase common stock through payroll deductions of up to 10% of their compensation at a purchase price equal to the lower of 85% of the fair market value of the Company's common stock at the beginning or end of each six-month offering period. A total of 200,000 shares of common stock have been reserved for issuance under the Purchase Plan. There were 15,789 and 10,066 shares issued under the Employee Stock Purchase Plan in fiscal 1999 and 1998, respectively.

Additional Stock Plan Information

The Company accounts for its stock-based awards using the intrinsic value method in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and its related interpretations. Accordingly, no compensation cost has been recognized in the financial statements for its stock plans.

SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), requires the disclosure of pro forma net income (loss) and net income (loss) per share had the Company used the fair value method to account for its stock-based compensation awards granted subsequent to October 31, 1995. Under SFAS 123, the fair value of stock-based awards to employees is calculated through the use of option pricing models. The Black-Scholes model used by the Company to calculate option values for purposes of this note, as well as other currently accepted option valuation models, were developed to estimate the fair value of stock options that are freely tradable and fully transferable and that have no vesting restrictions. These models also require highly subjective assumptions, including future stock price volatility and expected term until exercise, which greatly affect the calculated values. Accordingly, management believes that this model does not necessarily provide a reliable measure of the fair value of the Company's option awards.

The Company's calculations were made using the Black-Scholes multiple option-pricing model. The following weighted average assumptions were used: expected option life of 12 months beyond each respective vesting period; risk-free interest rates of 5.49% in fiscal 1999, 4.6% in fiscal 1998 and 6.0% in fiscal 1997; expected stock volatility of 70% in fiscal 1999 and 1998, 88% in fiscal 1997 and a dividend yield of zero. If the computed fair values of the awards had been amortized to expense over the vesting period of the awards, pro forma net income (loss) would have been as follows:

1999 1998 1997

---------- ---------- ---------- (in thousands, except per share) Net income/(loss): As reported................................ $2,675 $1,503 ($762) Pro forma.................................. $2,336 $1,183 ($1,241) Basic & Diluted income(loss) per share: As reported................................ $0.52 $0.30 ($0.16) Pro forma.................................. $0.45 $0.24 ($0.25)

12. Acquisitions

In August 1999, the Company acquired, in a purchase transaction, certain assets and assumed certain liabilities of Modern Office Interiors, Inc. ("MOI") for $132,000 in cash. MOI is a Morrisville, North Carolina-based seller of new and refurbished office workstations.

In February 1999, the Company acquired, in a purchase transaction, certain assets and assumed certain liabilities of Re'Nu Office Systems, Inc. ("Re'Nu") in exchange for $2,000,000 in cash and 100,000 shares of the Company's Common Stock. Re'Nu is a Los Angeles- based seller of new and refurbished office workstations.

In May 1998, the Company acquired, in a purchase transaction, certain assets and assumed certain liabilities of OFN, Inc. ("OFN") in exchange for $2,093,000 in cash, the Company's promissory note in the aggregate principal amount of $1,069,000, and 100,000 shares of the Company's Common Stock. OFN is a San Diego-based seller of new and refurbished office workstations.

Results of operations include those operations relating to the acquired companies' assets and liabilities from the date of acquisition. In connection with these acquisitions, the Company recorded intangible assets consisting primarily of goodwill, totaling $2,407,000 for OFN, $98,000 for MOI and $3,540,000 for Re'Nu, which will be amortized over twenty years.

Had these acquisitions taken place at the beginning of fiscal 1999, 1998 and 1997, unaudited pro forma net revenues would have been approximately $130.7 million, $108.3 million and $90.5 million, respectively. Pro forma unaudited net earnings (loss) would have been approximately $2.7 million, $1.6 million and $(316,000) for fiscal 1999, 1998 and 1997, respectively. Basic and diluted net earnings (loss) per share would have been approximately $0.53 per share for fiscal 1999, $0.32 per share for fiscal 1998 and $(0.06) per share for fiscal 1997.

13. Per Share Information

Basic earnings per share is computed by dividing net income by the weighted average common shares outstanding for the period while diluted earnings per share includes the dilutive effects of stock options. Basic and diluted earnings per share for the fiscal years ended October 31, 1999, 1998 and 1997, respectively, are calculated as follows:


                                                  1999       1998       1997
                                               ---------- ---------- ----------
                                                          (IN THOUSANDS)

Basic weighted average shares outstanding....      5,122      4,963      4,902
Dilutive effect of options...................         40          2        --
                                               ---------- ---------- ----------
Diluted weighted average shares outstanding..      5,162      4,965      4,902
                                               ========== ========== ==========

14. SELECTED QUARTERLY DATA (UNAUDITED)

The following presents unaudited quarterly operating results for fiscal years ended October 31, 1999 and 1998:

(In thousands, except per share data)

January 31, April 30, July 31, October 31,

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

Fiscal 1999

Net revenues................. $26,017 $29,370 $33,404 $36,183 Gross profit................. 5,373 6,851 7,448 8,000 Net income................... 361 563 869 882 Basic earnings per share..... $0.07 $0.11 $0.17 $0.17 Diluted earnings per share... $0.07 $0.11 $0.17 $0.17

FISCAL 1998

Net revenues................. $18,283 $21,810 $26,281 $27,191 Gross profit................. 3,799 4,729 5,850 5,953 Net income................... 137 313 517 536 Basic earnings per share..... $0.03 $0.06 $0.10 $0.11 Diluted earnings per share... $0.03 $0.06 $0.10 $0.11

15. Subsequent Events

On November 8th, 1999, the Company, pursuant to a Stock Purchase Agreement dated November 8, 1999 by and among the Company, Baquet-Pastirjak, Inc., a California corporation ("BPI" and the "Seller"), and William H. Baquet, Jr. and Robert G. Pastirjak (collectively, the "Selling Shareholders"), purchased all the outstanding capital stock of BPI. BPI is primarily engaged in the contract furniture business. The Selling Shareholders were the sole shareholders of BPI. The purchase price paid by the Company consisted of (i) $2,071,000 in cash; (ii) 50,000 shares of common stock of the Company at a fair value of $3.50 per share and (iii) an earn out of up to the aggregate amount of $2,600,000 in cash to be paid over four years based upon annual net income of BPI ("collectively, the "Purchase Price"). The cash paid to the Seller was obtained from a draw down on the Company's $15,000,000 line of credit.

On January 6, 2000, the Company announced that it had retained the services of an investment banking firm to explore various strategic and financial alternatives for maximizing shareholder value. Such alternatives may include, but are not limited to, a merger, a strategic alliance, the infusion of additional equity, or an affiliation with a strategic partner

16. Segment Reporting

During fiscal 1999, the Company adopted SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information, during fiscal 1999. SFAS No. 131 establishes standards for reporting information about operating segments in financial statements. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. By this definition, the Company has two operating segments, workspace products and workspace services. Workspace products include new office furniture systems, seating, storage and filing cabinets, desks and casegoods, and refurbished office furniture systems. Workspace service offerings include workspace products installation, facilities strategic planning, facilities planning outsourcing, facilities automation services, design management and move management.

The Company does not analyze these segments below the gross profit line. Segment assets are not presented as all assets of the Company are commingled and are not available by segment.

The following information by segment is for the fiscal years ended October 31 (in thousands):

1999 1998 1997

--------- --------- --------- Revenues (1): Workspace products $103,511 $76,433 $58,574 Workspace services 21,463 17,132 14,127 --------- --------- --------- Consolidated Revenues $124,974 $93,565 $72,701 --------- --------- ---------

1999 1998 1997

--------- --------- --------- Gross Profit (1): Workspace products $22,423 $15,810 $11,474 Workspace services 5,249 4,521 3,797 --------- --------- --------- Consolidated Gross Profit $27,672 $20,331 $15,271 --------- --------- ---------

(1) The presentation of revenues and gross profit is consistent with the Company's internal presentation of financial information to management.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

PART III

Certain information required by Part III is omitted from this report because the Registrant will file a definitive proxy statement within 120 days after the end of its fiscal year pursuant to Regulation 14A (the "Proxy Statement") for its annual meeting of shareholders to be held March 23, 2000 and the information included therein is incorporated herein by reference.

Item 10. Directors and Executive Officers of the Registrant

Incorporated by reference from the information under the caption "Executive Officers of the Registrant" in the Registrant's Proxy Statement.

Item 11. Executive Compensation

Incorporated by reference from the information under the caption "Compensation Committee Report on Executive Compensation" in the Registrant's Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Incorporated by reference from the information under the caption "Common Stock Ownership of Certain Beneficial Owners and Management" in the Registrant's Proxy Statement.

Item 13. Certain Relationships and Related Transactions

Incorporated by reference from the information under the captions "Compensation Committee Report on Executive Compensation" and "Transactions with Management and Others" in the Registrant's Proxy Statement.

Part IV

Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K

(a) The following documents are filed as part of this Report:

(1) Financial Statements

See index to Financial Statements at Item 8 of this report.

(2) Financial Statement Schedule

Schedule II - Valuation and Qualifying Accounts (see page 38).

(3) Exhibits (numbered in accordance with Item 601 of Regulation S-K

Exhibit

Number Description

3.1 Amended and Restated Articles of Incorporation of Registrant. (1)
3.2 Amended and restated bylaws of Registrant. (1)
4.1 Buy and Sell Agreement dated October 31, 1987, as amended on March 15, 1988, August 17, 1994, October 27, 1994 and April 22, 1995 among the Registrant, Brian McNay, Charles Winter, Jeffrey Tuttle, Alison Lazarus and Jeffrey Bernstein. (1)
10.1 1995 Stock Option Plan, as amended and forms of agreements thereunder. (8)
10.2 1995 Directors' Stock Option Plan and form of option agreement thereunder. (1)
10.3 1995 Employee Stock Purchase Plan and form of subscription agreement thereunder. (1)
10.4 Form of Directors' and Officers' Indemnification Agreement. (1)
10.5 Form of Common Stock Purchase Warrant. (1)
10.6 North First Street Plaza Lease Agreement dated May 28, 1991, as amended on December 21, 1993, between the Registrant and Wells Fargo Bank, N.A. (1)
10.6A Second Amendment to Lease between the Registrant and Wells Fargo Bank, NA, dated November 30, 1995 with respect to premises at 2150 N. First Street, San Jose, CA 95131. (3)
10.7 Sublease Agreement dated January 15, 1995, as amended on April 20, 1995, by and between the Registrant and First Franklin Financial Corporation. (1)
10.8 Lease Agreement dated June 10, 1994 between the Registrant and Alexander M. Maisin, Trustee of the Alexander M. and June L. Maisin Revocable Trust. (1)
10.9 Business Loan Agreements between the Registrant and Silicon Valley Bank, including related promissory notes and amendments thereto. (1)
10.9A Business Loan Modification Agreement between the Registrant and Silicon Valley Bank, dated January 16, 1996. (3)
10.9B Business Loan Modification Agreement between the Registrant and Silicon Valley Bank, dated March 6, 1996. (3)
10.9C Business Loan Modification Agreement between the Registrant and Silicon Valley Bank, dated March 13, 1996. (3)
10.10 Commercial Security Agreement dated March 15, 1988, as amended on February 25, 1993, between the Registrant and Silicon Valley Bank. (1)
10.11 Direct Sales Representative Agreement dated October 5, 1994 between the Registrant and TAB Products Co. (1)
10.12 Letter Agreement dated April 28, 1995 between the Registrant and Landmark Pacific Group, Inc. (1)
10.13 Letter Agreement dated April 30, 1995 between the Registrant and Refurbished Panel Systems. (1)
10.14 Asset Purchase Agreement dated September 27, 1995 between the Registrant and RST & Associates, Inc. (4)
10.15 Assignment and Assumption of Lease between RST & Associates, Inc. and the Registrant dated September 1, 1995 with respect to premises at 2010 East University, Tempe, Arizona. (4)
10.16 Assignment and Assumption of Lease between RST & Associates Inc. and the Registrant dated September 27, 1995 with respect to premises at 3957 East Speedway, Tucson, Arizona. (4)
10.17 Assignment and Assumption of Lease between RST & Associates Inc. and the Registrant dated September 27, 1995 with respect to premises at 5140 South Rogers, Las Vegas, Nevada. (4)
10.18 Purchase Agreement between Cisco Systems, Inc., Teknion, Inc., Teknion International and the Registrant effective as of September 1, 1995. (4)
10.19 Master Lease and Lease Renewal Agreement between the Registrant and OMI Properties Inc., dated July 21, 1995 and February 1, 1996, respectively, for facilities located at 130 Andover Park East, Suite 204, Tukwila, WA 98188. (3)
10.20 Master Lease Agreement between the Registrant and IM Joint Venture, dated June 23, 1995, for facilities located at Infomart Suite 5001, 1950 Stemmons Freeway, Dallas, Texas 75207. (3)
10.21 Asset Purchase Agreement dated January 25, 1996 between the Registrant and Dartmouth Group, Inc. d/b/a Corporate Source. (3)
10.22 Assignment and Assumption of Lease between the Registrant and Corporate Source, dated January 25, 1996 with respect to premises at 2811 McKinney Avenue, Suite 18, Dallas, Texas 75204. (3)
10.23 Assignment and Assumption of Lease between the Registrant and Corporate Source, dated January 25, 1996 with respect to premises at 1367 & 1369 Glenville Drive, Richardson, Texas 75081. (3)
10.24 Vehicle Lease Service Agreement between the Company and Penske Truck Leasing Co., L.P., dated January 23, 1996. (3)
10.25 Master Lease Agreement between the Registrant and Southwestern Bell Telephone Company Inc., dated May 2, 1996 for facilities located at 105 Auditorium Circle, San Antonio, Texas 78209. (5)
10.26 Third Amendment to Lease between the Registrant and Wells Fargo Bank, NA, dated August 5, 1996 with respect to premises at 2150 N. First Street, San Jose, CA 95131. (5)
10.27 Amended and Restated Loan and Security Agreement between the Registrant and Silicon Valley Bank, dated July 3, 1996. (5)
10.28 Master Lease Agreement between the Registrant and Centennial Plaza, LLC, dated October 4, 1996 for facilities located at Centennial Airport Plaza Building, 12200 E. Briarwood Avenue, Suite 199, Englewood, Colorado 80112. (4)
10.29 Master Lease Agreement between the Registrant and Amberjack Ltd., dated December 16, 1996 for facilities located at 1515 E. Missouri, Phoenix, AZ 85014. (4)
10.30 Common Stock Purchase Warrant Agreement between the Company and Gateway Advisors dated April 21, 1997. (6)
10.31 Revolving Credit Loan and Security Agreement between the Company and Comerica Bank dated August 8, 1997. (7)
10.32 Severance and Mutual Release Agreement between the Company and Charles J. Winter dated December 17, 1997. (8)
10.33 Stand by Letter of Credit with Comerica Bank. (9)
10.34 Amended Stand by Letter of Credit with Comerica Bank. (9)
10.35 Collateral Security Agreement with Teknion, Inc. (9)
10.36 Asset Purchase Agreement dated May 22, 1998 between the Registrant, OFN, Inc., BRG Acquisition Corp. and David & Rebecca Nagorski, Husband and Wife as Joint Tenants. (10)
10.37 Assignment and Assumption of Lease between the Registrant and OFN Inc., dated May 22, 1998 with respect to premises at 8060 Arjons Drive, San Diego, California. (2)
10.38 Consulting Services Agreement between the Registrant and Hewlett-Packard Company dated May 1998. (2)
10.39 Commercial Lease Agreement between the Registrant and Crow Carrara No.2 dated October 8, 1997 with respect to premises at 2015 Surveyor Boulevard, Carrollton, Texas . (2)
10.40 Retail Lease Agreement between the Registrant and Blue Jean Equities West dated August 11, 1998 with respect to premises at 1225 Battery Street, San Francisco, California. (2)
10.41 Office Lease Agreement between the Registrant and Scottsdale Spectrum, L.L.C. dated October 7, 1998 with respect to premises at 6720 North Scottsdale Road, Scottsdale, Arizona. (2)
10.42 Revolving Credit Loan and Security Agreement between the Company and Comerica Bank dated February 15, 1999.
10.43 Asset Purchase Agreement dated February 1, 1999 between the Registrant, RN Acquisition Corp., Re'Nu Office Systems, Inc., a California corporation, Re'Nu South, Inc., a California corporation and wholly owned subsidiary of Re'Nu Office Systems, Inc., Re'Nu Office Systems, Inc., a Nevada corporation and wholly owned subsidiary of Re'Nu Office Systems, Inc., and Fred Cook. (11)
10.44 Asset Purchase Agreement dated August 3, 1999 between the Registrant, Modern Office Interiors, Inc., a North Carolina corporation, MOI Acquisition Corp., a California corporation, and Richard Nellis, Craig Parr, and Mark Baldwin.
10.45 Lease Agreement Number BU061698 between the Registrant and Winthrop Resources Corporation dated June 16, 1998 with respect to information technology equipment.
10.46 Employment Agreement dated August 3, 1999 between the Registrant and Richard Nellis.
10.47 Employment Agreement dated August 3, 1999 between the Registrant and Craig Parr.
22.1 Subsidiaries of Registrant (2)
23.1 Independent Auditor's Consent. (2)
24.1 Power of Attorney (see page 37). (2)
_________________

(1) Incorporated by reference to exhibits filed in response to Item 16(a), "Exhibits," of the Registrant's Registration Statement on Form S-1 and Amendment No. 1, Amendment No. 2 and Amendment No. 3 thereto (File No. 33-46527), which became effective on June 27, 1995.
(2) Filed herewith.
(3) Incorporated by reference to the Registrant's Form 10-Q dated March 14, 1996.
(4) Incorporated by reference to the Registrant's Form 10-K dated January 22, 1996.
(5) Incorporated by reference to the Registrant's Form 10-Q dated September 13, 1996.
(6) Incorporated by reference the Registrant's Form 10-Q dated June 13, 1997.
(7) Incorporated by reference to the Registrant's Form 10-Q dated September 13, 1997.
(8) Incorporated by reference to the Registrant's Form 10-K dated January 26, 1998.
(9) Incorporated by reference to the Registrant's Form 10-Q dated March 11, 1998.
(10) Incorporated by reference to the Registrant's Form 8-K/A dated July 31, 1998.
(11) Incorporated by reference to the Registrant's Form 8-K dated February 16, 1999.

BUSINESS RESOURCE GROUP

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

BUSINESS RESOURCE GROUP

(Registrant)

Date: January 27, 2000

By: /s/ JOHN W. PETH

John W. Peth

President, Chief Executive Officer and Director

(Principal Executive Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John W. Peth and John M. Palmer, his attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign any amendments to this Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons in the capacities and on the dates indicated.


        Signature                       Title                     Date
- -------------------------  -------------------------------  -----------------
/s/ JOHN W. PETH           President, Chief Executive       January 27, 2000
- -------------------------    Officer and Director
(John W. Peth)             (Principal Executive
                           Officer)


/s/ BRIAN D. MCNAY         Executive Vice President of      January 27, 2000
- -------------------------    Sales and Director
(Brian D. McNay)


/s/ JEFFREY TUTTLE         Executive Vice President of      January 27, 2000
- -------------------------    Marketing, Secretary and
(Jeffrey Tuttle)           Director


/s/ JOHN M. PALMER         Vice President, Finance and      January 27, 2000
- -------------------------    Chief Financial Officer
(John M. Palmer)           (Principal Financial and
                           Accounting Officer)


/s/ HARRY S. ROBBINS       Director                         January 27, 2000
- -------------------------
(Harry S. Robbins)


/s/ GEORGE KELLY           Director                         January 27, 2000
- -------------------------
(George Kelly)

BUSINESS RESOURCE GROUP AND SUBSIDIARY
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(in thousands)


                                          Additions
                                   ---------------------
                        Balance at Charged to Charged to              Balance at
                        Beginning  Costs and    Other                   End of
      Description        of Year    Expenses   Accounts  Deductions(1)   Year
- ----------------------- ---------- ---------- ---------- ------------ ----------
Allowance for doubtful
 accounts:
  Fiscal 1997..........       $57        $33        --         --           $90
  Fiscal 1998..........        90        397        --           (87)       400
  Fiscal 1999..........       400        142        146         (188)       500

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

(1) Charge off of accounts, net of recoveries.

EX-10.44 2 ASSET PURCHASE AGREEMENT Asset Purchase

Exhibit 10.44

ASSET PURCHASE AGREEMENT


This Asset Purchase Agreement (this "Agreement") is made effective
as of August 3, 1999, by and among Business Resource Group, a California
corporation with its principal place of business at 2150 North First
Street, Suite 101, San Jose, California 95131 ("BRG"), Modern Office
Interiors, Inc., a North Carolina corporation with its principal place of
business at 220 Dominion Drive, Morrisville, North Carolina  27560
("MOI"), MOI Acquisition Corp., a California corporation and wholly owned
subsidiary of BRG with its principal place of business at 2150 North
First Street, Suite 101, San Jose, California 95131 ("MOI Acquisition
Corp."), and Richard Nellis, an individual residing at 801 Birkdale
Drive, Clayton, NC 27260, Craig Parr, an individual residing at
973 Wyckshire Court, Stoney Creek, NC 27377, and Mark Baldwin, an
individual residing at 4800 Oak Park Road, Raleigh, NC 27612 (each, a
"Shareholder" and, collectively, the "Shareholders").
RECITALS
On the terms and conditions set forth below, BRG desires to
purchase the assets of MOI identified on Exhibit A to this Agreement (the
"Purchased Assets") and assume certain scheduled liabilities of MOI.  BRG
currently intends to deploy the Purchased Assets through MOI Acquisition
Corp.
In consideration of the mutual agreements, representations and
warranties contained in this Agreement, the parties agree as follows:
1.      Purchase and Sale.
(a)     Purchased Assets.  Subject to the terms and conditions
contained in this Agreement, at the Closing (as defined below), MOI shall
sell, assign, transfer and convey to MOI Acquisition Corp., free and
clear of all liens and encumbrances, and MOI Acquisition Corp. shall
purchase from MOI, the Purchased Assets identified on Exhibit A.  MOI and
the Shareholders agree to take all steps reasonably requested by BRG or
MOI Acquisition Corp. to transfer title to the Purchased Assets to MOI
Acquisition Corp. at or as soon as possible after the Closing.
(b)     Assumed Liabilities.  Neither BRG nor MOI Acquisition
Corp. assumes hereby or in connection with this Agreement any liabilities
of MOI whatsoever, except for the obligations under those contracts and
other arrangements specifically described on Exhibit B to this Agreement
which arise after the Closing (as defined below).  The foregoing
contracts and other arrangements listed on Exhibit B are sometimes
referred to in this Agreement as the "Assumed Contracts" or the "Assumed
Liabilities."  All of the obligations retained by MOI shall be referred
to in this Agreement as the "Non-Assumed Liabilities" and shall include
all debts, liabilities, payables and expenses not specifically included
within the Assumed Liabilities, including, but not limited to, those
obligations under the Assumed Contracts which arise or become due prior
to the Closing (as defined below).
2.      Purchase Price; Terms of Payment.
(a)     Closing.  The consummation of the purchase and sale of
the Purchased Assets shall take place at a closing (the "Closing") to be
held at BRG's San Jose offices on August 3, 1999 concurrently with the
execution and delivery of this Agreement.  The time and date of the
Closing are referred to in this Agreement as the "Closing Date."
                (b)     Preliminary Purchase Price.  The preliminary purchase
price to be paid for the Purchased Assets (the "Preliminary Purchase
Price") shall consist of the following:
(i)     At the Closing, BRG shall deliver to MOI $70,308
by check or wire transfer (the "Initial Preliminary Payment") which
represents the difference obtained by subtracting the total amount of
Assumed Liabilities as of June 30, 1999 ($1,195,391) from the total value
of the Purchased Assets as of June 30, 1999 ($1,265,699) (such difference
being referred to herein as "MOI's Net Book Value").
(ii)    As soon as practicable after MOI's financial
results for the period from June 30, 1999 to July 31, 1999 (the "Stub
Period") are available, BRG, MOI and the Shareholders shall cooperate in
good faith to calculate any changes to MOI's Net Book Value based on Stub
Period results.  On or before August 31, 1999 (or within five business
days of the parties' calculation of any changes to MOI's Net Book Value
if completed later than August 31, 1999), BRG shall pay to MOI by check
or wire transfer an amount (the "Final Preliminary Payment") equal to the
increase, if any, in MOI's Net Book Value during the Stub Period.  In the
event that there is a decrease in MOI's Net Book Value based on Stub
Period results, then no Final Preliminary Payment shall be payable by BRG
to MOI or the Shareholders.
(c)     Additional Purchase Price.
        (i)     MOI and the Shareholders agree with BRG that
neither MOI nor the Shareholders have any expectation that further
consideration for the sale of the Purchased Assets (beyond the
Preliminary Purchase Price) shall be payable to MOI unless and until the
operating income of MOI Acquisition Corp. shall have met certain
thresholds as contemplated in the calculation of the Additional Purchase
Price defined in Section 2(c)(ii) below.  As a material inducement for
BRG and MOI Acquisition Corp. to enter into this Agreement, MOI and the
Shareholders agree that they will assume the risks associated with MOI
Acquisition Corp. achieving the operating income results necessary for
MOI to earn the payments of the Additional Purchase Price provided for in
this Section 2(c).
        (ii)    Subject to the terms and conditions herein, on
the 60th day following the end of each 12-month period (each, an
"Applicable Period") set forth on Exhibit C hereto (each, an "Additional
Payment Date") (or on the immediately following business day if an
Additional Payment Date is not a business day), and in addition to the
Preliminary Purchase Price, BRG shall deliver to MOI the amount set forth
on Exhibit C (in each case, "Additional Purchase Price") for such
Applicable Period calculated as set forth in such Exhibit C.  Each
Additional Purchase Price payment, if any, shall be allocated entirely to
goodwill as set forth on Exhibit E.
The Preliminary Purchase Price and the Additional Purchase
Price, if any, are collectively referred to herein as the "Purchase
Price."
(d)     Delivery.  At the Closing, MOI shall deliver to MOI
Acquisition Corp. an executed Bill of Sale in the form attached hereto as
Exhibit D and any other appropriate instruments of transfer of title to
the Purchased Assets evidencing the purchase and sale of the Purchased
Assets, as well as all title documents relating to the Purchased Assets,
duly executed or endorsed for transfer to MOI Acquisition Corp.  At the
Closing, BRG shall deliver to MOI the Initial Preliminary Payment.
(e)     Allocation of Purchase Price.  The Purchase Price shall
be allocated as provided in Exhibit E hereto (the "Allocation") for
purposes of complying with the requirements of Section 1060 of the
Internal Revenue Code of 1986, as amended.  Each party hereto agrees to
prepare its federal and state income tax returns for all current and
future tax reporting periods and file Form 8594 (and corresponding state
forms) with respect to this transaction in a manner consistent with the
Allocation.  If any state or federal taxing authority challenges such
allocation, the party receiving notice of such challenge shall give the
other prompt written notice of such challenge, and the parties shall
cooperate in good faith in responding to it in order to preserve the
effectiveness of such Allocation.
(f)     Taxes.  BRG shall pay all sales, use, transfer, excise
or other similar taxes, if any, arising out of the transfer of the
Purchased Assets or otherwise as a consequence of the transactions
contemplated by this Agreement (other than sales taxes arising from the
sale of the Purchased Assets pursuant to this Agreement).
3.      Representations and Warranties of MOI and the Shareholders.
Subject to and except for information contained in a disclosure schedule
delivered to BRG and MOI Acquisition Corp. prior to the signing of this
Agreement and attached hereto as Exhibit F (the "MOI Disclosure
Schedule"), MOI and the Shareholders jointly and severally represent and
warrant to BRG and MOI Acquisition Corp. as follows:
(a)     Organization.  MOI is a corporation duly incorporated,
validly existing and in good standing under the laws of North Carolina,
has the corporate power and authority to own or lease its properties and
to carry on its business as now being conducted, and possesses all
licenses, franchises, rights and privileges necessary to the conduct of
its business.  MOI is not qualified or licensed to do business as a
foreign company in any other jurisdiction, and neither the character of
the properties owned or leased by MOI nor the nature of the business
transacted by MOI requires MOI to be qualified in any other jurisdiction,
except where failure to so qualify would not have a material adverse
effect on MOI `s business.
(b)     Financial Statements.  MOI has furnished to BRG the
audited MOI balance sheet as of  December 31, 1998, and the related
audited statements of operations for the year then ended, and the
unaudited MOI balance sheets as at June 30, 1999 and the related
unaudited statement of operations for the period then ended (the " MOI
Financial Statements").  All such MOI Financial Statements, together with
any notes thereto, (i) are in accordance with MOI's books and records,
(ii) present fairly the financial position of MOI as of such date or such
period and (iii) have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis (subject to normal
year-end adjustments as required by MOI's independent accounting firm and
except that such statements do not contain footnotes).  In the opinion of
the management of MOI and the Shareholders, the ongoing financial results
of MOI, including revenue, margins and net income, shall remain
consistent with the Financial Statements from June 30, 1999 until the
Closing Date.
(c)     Authorization.  MOI has, or will have at the Closing
Date, the corporate power to enter into this Agreement, and the
execution, delivery and performance of this Agreement has been, or will
be at the Closing Date, duly authorized by all requisite corporate
action; and this Agreement has been, or will be at the Closing Date, duly
executed and delivered and constitutes the valid and binding obligation
of MOI and the Shareholders, enforceable against MOI and the Shareholders
in accordance with its terms.
(d)     Effect of Agreement.  The execution, delivery and
performance by MOI and the Shareholders of this Agreement and the
consummation of the transactions herein contemplated, will not conflict
with, or result in a breach of the terms of, or constitute a default
under or violation of, any law or regulation of any governmental
authority, domestic or foreign applicable to MOI, or the charter
documents or Bylaws of MOI or any material agreement or instrument to
which MOI is a party or by which it is bound or to which it is subject,
other than any conflicts, breaches, defaults or violations which
individually or in the aggregate would not have a material adverse effect
on MOI; nor will it give to others any interests or rights, including
rights of termination, acceleration or cancellation in or with respect to
any of the properties, assets, agreements, contracts or business of MOI
or the capital stock of MOI held by the Shareholders.  No consent of any
person not a party to this Agreement and no consent of any governmental
authorities are required to be obtained on the part of MOI or the
Shareholders to permit the continuation by MOI Acquisition Corp. after
the Closing Date of the business activities of MOI in the manner such
business is now carried on by MOI.
(e)     Inventories.  The inventories of MOI, whether finished
goods, work in process or raw materials, are all items of a quality
usable or salable in the ordinary and usual course of MOI's business,
except for inventory items which are obsolete or not usable or salable in
the ordinary course of business which have been written down to an amount
not in excess of realizable market value or for which adequate reserves
or allowances have been provided.  The values at which inventories are
carried reflect the inventory valuation policy of MOI, which is in
accordance with generally accepted accounting principles applied on a
consistent basis.  In the opinion of the management of MOI and the
Shareholders, the inventories of MOI are saleable at margins consistent
with (i) the margins MOI has received in the past and (ii) the Financial
Statements.
(f)     Accounts Receivable.  Exhibit A includes a complete
list of the accounts and notes receivable of MOI as of the date shown,
aged by customer or debtor, as the case may be.  The accounts and notes
receivable of MOI as of the date shown or thereafter acquired arose from
valid transactions and are collectible (net of the allowance for doubtful
accounts) in the ordinary and usual course of business and are not
subject to any assertable defense or set-off.  The reserve for doubtful
accounts is adequate and the values at which accounts and notes
receivable are carried reflect the policies of MOI consistent with MOI's
past practice and are in accordance with generally accepted accounting
principles applied on a consistent basis.
(g)     Insurance.  The MOI Disclosure Schedule contains a true
and complete list and description of all policies of insurance maintained
by MOI.  Such insurance or comparable insurance will be maintained in
full force and effect to and including the Closing Date.
(h)     Absence of Certain Changes.  Since June 30, 1999, MOI
has not (i) issued or delivered to any person any shares of stock, bonds
or other corporate securities, (ii) incurred any obligation or liability
(absolute or contingent) in excess of $10,000 individually or in the
aggregate, (iii) discharged or satisfied any lien or encumbrance, or paid
any obligation or liability (absolute or contingent), other than current
liabilities reflected on the MOI Financial Statements and current
liabilities incurred since the date of the MOI Financial Statements in
the ordinary course of business, (iv) declared or made any payment or
distribution to shareholders (other than the payment of employment-
related compensation consistent with past practice to shareholders who
are MOI employees), or purchased or redeemed any shares of stock,
(v) increased the wage or salary of any employee, (vi) mortgaged, pledged
or subjected to lien or any other encumbrance any assets (tangible or
intangible, other than assets which are subject to purchase money
security interests and which were acquired in the ordinary course of
business) and do not exceed $10,000 individually or in the aggregate,
(vii) sold or transferred any tangible assets or canceled any debts or
claims, except in the ordinary course of business or in an aggregate
amount which does not exceed $10,000, (viii)  sold, assigned, licensed or
transferred any patents, trademarks, trade names, copyrights, licenses,
computer software programs or other intangible assets other than in the
ordinary course of business, (ix) suffered any extraordinary loss or
waived any right of substantial value, (x) entered into any transactions
other than in the ordinary course of business, or (xi) agreed to any of
the foregoing.  Since June 30, 1999, there has been no material adverse
change in the business, financial condition, results of operations or
prospects of MOI.
(i)     Compliance with Laws.  Except as set forth in the MOI
Disclosure Schedule, MOI and the Shareholders have complied with, and are
not in violation of any statute, law, rule or regulation with respect to
the conduct of the business of MOI, the ownership or operation of the
properties of MOI, or the sale or purchase of the securities of MOI or
disclosure to shareholders which violation might have a material adverse
effect on the business, financial condition or prospects of MOI.
(j)     Brokers or Finders.  Except as set forth on the MOI
Disclosure Schedule, neither MOI nor the Shareholders are obligated,
directly or indirectly, to any person for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this
Agreement or any transaction contemplated hereby.
(k)     Title to Purchased Assets.  MOI has and will convey on
the Closing Date full, absolute, good and marketable title to the
Purchased Assets, free and clear of all security interests, mortgages,
liens (including, but not limited to, liens with respect to taxes),
attachments, orders of court, rights of redemption, debts, claims,
charges or other encumbrances of any kind whatsoever and not subject to
any continuing commission, profit or revenue sharing or other
compensation contract or obligation that could apply to BRG, MOI
Acquisition Corp. or the Purchased Assets.
(l)     Litigation, etc.  There are no suits, actions or
administrative, arbitration, unfair labor practice, worker's compensation
or other proceedings or governmental investigations, pending or, to the
best knowledge of MOI and the Shareholders, threatened against or
relating, directly or indirectly, to the Purchased Assets or MOI's
business, and there are no judgments, orders, injunctions, decrees,
stipulations or awards (whether rendered by a court, administrative
agency or by arbitration, pursuant to a grievance or other procedure)
against or relating to MOI or the Purchased Assets which could result in
a material adverse effect, or any lien or other encumbrance, on the
Purchased Assets or MOI's business.
(m)     Assignability of Contracts; No Default.  All
assignments or other transfers of the Assumed Contracts have been
obtained for transfer to MOI Acquisition Corp. in accordance with the
terms of this Agreement, without default, penalty or other similar
restriction.  No default or condition permitting declaration of default
exists with respect to the Assumed Contracts.  MOI is not obligated to
make any future payments (other than those required in connection with
the Assumed Liabilities) under the Assumed Contracts.
(n)     Taxes.  All sales and use taxes, real and personal
property taxes, gross receipts taxes, documentary transfer taxes, income
taxes, employment taxes, withholding taxes, unemployment insurance
contributions and other taxes or governmental charges of any kind,
however denominated, for which BRG or MOI Acquisition Corp. could become
liable with respect to the Purchased Assets or which could result in a
lien on or charge against the Purchased Assets (other than sales taxes
arising from the sale of the Purchased Assets pursuant to this Agreement)
(collectively, "Taxes") have been or will be paid with respect to all
periods prior to and including the Closing Date.  MOI and any other
person required to file returns or reports of Taxes relating to MOI or
the Purchased Assets has duly and timely filed all returns and reports of
Taxes required to be filed, and all such returns and reports are true,
correct and complete.  There are not any liens for Taxes on any of the
Purchased Assets (other than liens for Taxes not yet due and payable).
MOI has complied with all record keeping and tax reporting obligations
relating to income and employment taxes due with respect to compensation
paid to employees.  MOI is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended (the
"Code").  There are no pending or threatened proceedings with respect to
Taxes.  No agreement or arrangement regarding compensation which will be
assumed by BRG or MOI Acquisition Corp. provides for any payments which
could result in a nondeductible expense to BRG or MOI Acquisition Corp.
pursuant to Section 280G of the Code or an excise tax to the recipient of
such payment pursuant to Section 4999 of the Code.  MOI has provided to
BRG copies of all tax returns filed by MOI during the previous five years
and all such tax returns are accurate in all respects.
(o)     Environmental and Safety Laws.  MOI is not in violation
of any applicable statute, law or regulation relating to the environment
or occupational health and safety and no material expenditures are or, to
the best knowledge of MOI and the Shareholders after reasonable
investigation, will be required in order to comply with any such existing
statute, law or regulation.  No Hazardous Materials (as defined below)
are used or have been used, stored or disposed of by MOI or, to the best
knowledge of MOI and the Shareholders after reasonable investigation, by
any other person or entity on any property owned, leased or used by MOI.
For the purposes of the preceding sentence, "Hazardous Materials" shall
mean (i) materials which are listed or otherwise defined as "hazardous"
or "toxic" under any applicable local, state, federal and/or foreign laws
and regulations that govern the existence and/or remedy of contamination
on property, the protection of the environment from contamination, the
control of hazardous wastes, or other activities involving hazardous
substances, including, but not limited to, building materials, or
(ii) any petroleum products.
(p)     Intellectual Property.  MOI owns or possesses
sufficient legal rights to all patents, trademarks, service marks,
tradenames, copyrights, trade secrets, licenses, information and
proprietary rights and processes necessary for the conduct of its
business without any conflict with, or infringement of, the rights of
others.  Neither MOI nor the Shareholders have received any
communications alleging that MOI has violated or, by conducting its
business, would violate any of the patents, trademarks, service marks,
tradenames, copyrights, trade secrets or other proprietary rights or
processes of any other person or entity.  Neither MOI nor the
Shareholders are aware that any of its employees is obligated under any
contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court
or administrative agency, that would interfere with the use of such
employee's best efforts to promote the interest of MOI or that would
conflict with MOI's business.  Neither the execution or delivery of this
Agreement, nor the carrying on of MOI's business by the employees of MOI,
will, to the best knowledge of MOI and the Shareholders after reasonable
investigation, conflict with or result in a breach of the terms,
conditions, or provisions of, or constitute a default under, any
contract, covenant or instrument under which any such employee is now
obligated.  Neither MOI nor the Shareholders believe it is or will be
necessary to use any inventions of any of MOI's employees (or persons it
currently intends to hire) made prior to their employment by MOI.
(q)     Employee Relations.  MOI and the Shareholders consider
MOI's relations with its employees to be good and is not aware of any key
employee that presently intends to terminate his or her employment
relationship with MOI.  No employee of MOI is represented by a labor
union and MOI has not experienced any work stoppages.
(r)     Employee Benefit Plans.  MOI does not have any Employee
Benefit Plan as defined in the Employee Retirement Income Security Act of
1974 ("ERISA").
(s)     Sole Shareholders.  The Shareholders are the sole
shareholders of MOI and no other person or entity has any right, warrant
or option to acquire any shares of capital stock of MOI.
(t)     MOI Employees.  All employees of MOI and each such
employee's respective compensation arrangement are set forth on Exhibit G
hereto.
(u)     Material Misrepresentations and Omissions.  No
representation or warranty by MOI or the Shareholders in this Agreement,
or in any certificate furnished or to be furnished by MOI or the
Shareholders pursuant hereto or in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
4.      Representations and Warranties of BRG and MOI Acquisition
Corp.  Subject to and except for the information contained in a
disclosure schedule delivered to MOI prior to the signing of this
Agreement and attached hereto as Exhibit H (the "BRG Disclosure
Schedule"), BRG and MOI Acquisition Corp. jointly and severally represent
and warrant to MOI as follows:
(a)     Organization.  BRG is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
California and has all necessary corporate power and authority to own or
lease its properties and to carry on its business as now being conducted,
and possesses all licenses, franchises, rights and privileges material to
the conduct of its business.  MOI Acquisition Corp. is a wholly owned
subsidiary of BRG and a corporation duly incorporated, validly existing
and in good standing under the laws of the State of California having all
necessary corporate power and authority to own or lease its properties
and to carry on its business as now being conducted, and possesses all
licenses, franchises, rights and privileges material to the conduct of
its business.
(b)     Authorization.  BRG and MOI Acquisition Corp. each have
the corporate power to enter into this Agreement, and the execution,
delivery and performance of this Agreement has been duly authorized by
all requisite corporate action, and the Agreement has been, or will be at
the Closing Date, duly executed and delivered and constitute the valid
and binding obligations of BRG and MOI Acquisition Corp.
(c)     Effect of Agreement.  The execution, delivery and
performance of this Agreement, and the consummation of the transactions
herein contemplated, will not conflict with, or result in a material
breach of the terms of, or constitute a material default under or
violation of, any law or regulation of any governmental authority,
domestic or foreign, the Articles of Incorporation or Bylaws of BRG or
MOI Acquisition Corp., or any material agreement to which either BRG or
MOI Acquisition Corp. is a party or by which either is bound or to which
either is subject.  Except for approval of the Agreement and the
transactions contemplated thereby pursuant to BRG's line of credit
agreements, no consent of any person not a party to this Agreement, nor
consent of any governmental authority, except as may be required by
applicable state blue sky regulatory agencies, is required to be obtained
on the part of BRG or MOI Acquisition Corp. to consummate the
transactions contemplated by this Agreement.
(d)     Full Disclosure.  Any information furnished by or on
behalf of BRG or MOI Acquisition Corp. to MOI in writing pursuant to this
Agreement and any information contained in the BRG and MOI Acquisition
Corp. Disclosure Schedule referred to in this Agreement, at any time
prior to the Closing Date, do not and will not contain any untrue
statement of a material fact and do not and will not omit to state any
material fact necessary to make any statement, in light of the
circumstances under which each statement is made, not misleading.
5.      Conditions to Obligations of BRG and MOI Acquisition Corp.
Absent a waiver in writing, all obligations of BRG and MOI Acquisition
Corp. under this Agreement are subject to the satisfaction of the
following conditions, to BRG's reasonable satisfaction, on or before the
completion of the Closing on the Closing Date:
(a)     Representations, Warranties and Performance.  The
representations and warranties of MOI and the Shareholders contained in
this Agreement shall be deemed to have been made again at and as of the
Closing Date and shall then be true and correct with the same force and
effect as if such representations and warranties have been made at and as
of the Closing Date, and MOI and the Shareholders shall have performed
and complied with all agreements, conditions and covenants required by
this Agreement to be performed or complied with by them prior to or at
the Closing Date.
(b)     Litigation.  There shall not be pending any litigation
before any court or governmental agency (i) the outcome of which, as
determined in good faith by BRG, could reasonably be expected to have a
material adverse effect on the Purchased Assets or their value to BRG or
MOI Acquisition Corp. or (ii) to restrain or prohibit or to obtain
damages or other relief in connection with, or which is related to or
arises out of, this Agreement or the transactions contemplated hereby.
(c)     Certain Assignments.  Assignments of the Assumed
Contracts shall have been received to BRG's reasonable satisfaction.
(d)     Absence of Material Changes.  There shall not have been
any adverse change in or to the Purchased Assets or revenues obtained or
anticipated to be obtained therefrom.
(e)     Approvals.  All consents, approvals and filings
required under any applicable law, rule or regulation, or under any
applicable contract, to be completed or obtained prior to the
transactions contemplated by this Agreement shall have been so completed
or obtained, as the case may be, to BRG's reasonable satisfaction.
(f)     Corporate Approval.  The Board of Directors of MOI and
the Shareholders shall have approved this Agreement and the transactions
contemplated by this Agreement in a manner consistent with applicable law
and the charter documents and Bylaws of MOI.
(g)     Employment Agreements.  At the Closing, Richard Nellis
and Craig Parr shall have executed and delivered an employment agreement
(each, an "Employment Agreement" and together, the "Employment
Agreements") in form and substance satisfactory to BRG.
6.      Conditions to Obligations of MOI.  Absent a waiver in
writing, all obligations of MOI under this Agreement are subject to the
satisfaction of the following conditions, to MOI's reasonable
satisfaction, on or before the completion of the Closing on the Closing
Date:
(a)     Representations, Warranties and Performance.  The
representations and warranties of BRG and MOI Acquisition Corp. contained
in this Agreement shall be deemed to have been made again at and as of
the Closing Date and shall then be true and correct with the same force
and effect as if such representations and warranties had been made at and
as of the Closing Date, and BRG and MOI Acquisition Corp. shall have
performed and complied with all agreements, conditions and covenants
required by this Agreement to be performed or complied with by each
respective entity prior to or at the Closing Date.
(b)     Litigation.  There shall not be pending any litigation
before any court or governmental agency to restrain or prohibit or to
obtain damages or other relief in connection with, or which is related to
or arises out of, this Agreement or the transactions contemplated hereby,
or which could reasonably be expected to have a material adverse effect
upon the ability of BRG or MOI Acquisition Corp. to perform its
respective obligations under this Agreement.
(c)     Approvals.  All consents, approvals and filings
required under any applicable law, rule or regulation, or under any
applicable contract, to be completed or obtained prior to the
transactions contemplated by this Agreement shall have been so completed
or obtained, as the case may be, to MOI's reasonable satisfaction.
(d)     Corporate Approval.  Each of the Board of Directors of
BRG and MOI Acquisition Corp. shall have approved this Agreement and the
transactions contemplated by this Agreement in a manner consistent with
applicable law and the Articles of Incorporation and Bylaws of BRG and
MOI Acquisition Corp., respectively.
(e)     Employment Agreement.  At the Closing, each of the
Employment Agreements shall have been  executed and delivered in form and
substance satisfactory to Richard Nellis and Craig Parr, respectively.
7.      Covenants Following Closing.
(a)     Operations Following the Closing.
        (i)     MOI Acquisition Corp.  Notwithstanding any other
provision in this Agreement to the contrary, BRG, MOI Acquisition Corp.,
MOI and the Shareholders each understand and agree that after the
Closing, MOI Acquisition Corp. shall own the Purchased Assets free and
clear of all liens and encumbrances, and that nothing in this Agreement
shall be construed to limit either BRG's or MOI Acquisition Corp.'s
respective rights to manage and operate MOI Acquisition Corp., the
Purchased Assets and the Assumed Liabilities in any manner, or to sell,
liquidate or otherwise dispose of MOI Acquisition Corp., the Purchased
Assets or the Assumed Liabilities in BRG's sole discretion (provided that
BRG's obligation to satisfy its obligations pursuant to the Assumed
Liabilities, pay the Purchase Price as provided in this Agreement, and
indemnify MOI and the Shareholders pursuant to Section 7(c) below, shall
remain in full force and effect).
                        (ii)    Employees.  At or as soon as practicable
following the Closing, MOI Acquisition Corp. will make employment offers
to all of the employees of MOI as identified on Exhibit G upon the
existing salary terms set forth on such exhibit.  Such employment will be
subject to BRG's and MOI Acquisition Corp.'s policies generally
applicable to new employees.  All such persons who agree to become
employees of MOI Acquisition Corp. shall execute and deliver a
Confidentiality and Assignment Agreement in the form attached hereto as
Exhibit I.
        (iii)   Change of Corporate Name.  Promptly following the
Closing, MOI and the Shareholders shall each use their respective best
efforts to change the name of MOI to "Nellis/Parr/Baldwin Holdings."
(b)     Release of Liens and Consents.  MOI and the
Shareholders shall take all reasonable actions as may be necessary to (1)
release any outstanding liens or encumbrances on the Purchased Assets and
(2) obtain such consents as may be necessary for the transfer of the
Assumed Contracts to MOI Acquisition Corp. in accordance with the terms
of this Agreement.
(c)     Indemnification.
        (i)     By MOI and the Shareholders.  MOI and the
Shareholders jointly and severally agree to indemnify BRG and/or MOI
Acquisition Corp. and hold BRG and/or MOI Acquisition Corp. harmless from
and against, and to reimburse BRG and/or MOI Acquisition Corp. in respect
of, any and all damages, losses, liabilities, claims, judgments,
settlements, penalties, costs and expenses (including attorneys' fees and
costs) of every nature reasonably incurred by BRG and/or MOI Acquisition
Corp., whether absolute or contingent, including costs of investigation
and defense, arising from or in connection with (A) any Non-Assumed
Liabilities, (B) any breach or inaccuracy of or omission from any of the
representations, warranties or covenants of MOI or the Shareholders set
forth in this Agreement, or (C) any non-compliance with applicable bulk
sales laws.
        (ii)    By BRG and MOI Acquisition Corp.  BRG and MOI
Acquisition Corp. jointly and severally agree to indemnify MOI and the
Shareholders and hold MOI and the Shareholders harmless from and against,
and to reimburse MOI and the Shareholders in respect of, any and all
damages, losses, liabilities, claims, judgments, settlements, penalties,
costs and expenses (including attorneys' fees and costs) of every nature
reasonably incurred by either of them, whether absolute or contingent,
including costs of investigation and defense, arising from or in
connection with (A) the Assumed Liabilities, (B) any breach or inaccuracy
of, or omissions from, any of the representations, warranties or
covenants of BRG or MOI Acquisition Corp. set forth in this Agreement, or
(C) the conduct of MOI Acquisition Corp. following the Closing Date.
(d)     MOI's Employees.  MOI agrees that, except as otherwise
expressly provided herein, it shall bear sole responsibility for all
amounts due and payable or otherwise arising with respect to MOI
employees at and prior to the Closing Date, including, but not limited
to, all salaries, wages, commissions, profit and revenue sharing, and
holiday, vacation and severance pay, bonuses and past service credits and
shall have made and remitted, for all periods through and including the
Closing Date, all payroll deductions, remittances and contributions,
including, but not limited, to, employees' salaries and wages,
commissions, bonuses and profit-sharing required under contract, any
collective bargaining agreements or applicable laws and regulations.
(e)     Assumed Contracts.  Notwithstanding any other provision
in this Agreement to the contrary, MOI and the Shareholders accept and
acknowledge full responsibility for payment of all obligations under the
Assumed Contracts that were incurred or created or that otherwise arose
prior to the Closing Date.
        (f)     Noncompetition Covenant.
                (i)     Agreement.  MOI and the Shareholders hereby agree
that it and they shall not, during the period of five (5) years following
the date hereof (the "Noncompetition Period"), do any of the following
within the United States without the prior written consent of BRG:
                (A)     Compete.  Carry on any business or activity
(whether directly or indirectly, as a partner, stockholder, principal,
agent, director, affiliate, employee or consultant) which is competitive
with the business conducted by BRG or any of its subsidiaries (as
conducted now or during the Noncompetition Period), nor engage in any
other activities that conflict with the business or prospects of BRG or
any of its subsidiaries.
                (B)     Solicit Business.  Solicit or influence or
attempt to influence any client, customer or other person, either
directly or indirectly, to direct his, her or its purchase of BRG's or
any of its subsidiaries' products and/or services to any person, firm,
corporation, institution or other entity in competition with the business
of BRG or any of its subsidiaries.
                (C)     Solicit Personnel.  Solicit or influence or
attempt to influence any person employed by BRG or any of its
subsidiaries to terminate or otherwise cease his or her employment with
BRG or any of its subsidiaries or become an employee of any competitor of
BRG or any of its subsidiaries.
        (ii)    Termination.  The obligations of MOI and the
Shareholders under this Section 7(f) shall terminate immediately and be
of no further force or effect on the date on which BRG (A) files a
petition in bankruptcy (or an involuntary petition in bankruptcy is filed
against the BRG and is not dismissed within thirty (30) days) or (B)
makes an assignment of all or substantially all of its assets for the
benefit of its creditors.
        (iii)   Severability.  Without limitation, the parties
agree and intend that the covenants contained in this Section 7(f) shall
be deemed to be a series of separate covenants and agreements, one for
each and every county of each state and political subdivision of the
United States.  If, in any judicial proceeding, a court shall refuse to
enforce in such action all of the separate covenants deemed included
herein, then at the option of BRG, wholly unenforceable covenants shall
be deemed eliminated from the provisions hereof for the purpose of such
proceeding to the extent necessary to permit the remaining separate
covenants to be enforced in such a proceeding.
(g)     Confidentiality.  Each party hereto agrees that, except
with the prior written permission of the other parties hereto, it shall
at all times keep confidential and not divulge, furnish or make
accessible to anyone any confidential information, knowledge or other
information concerning or relating to (1) the business or financial
affairs of the other parties to which such party has been or shall become
privy by reason of this Agreement, (2) the terms of this Agreement or any
other agreement contemplated or executed hereby, (3) the content of any
discussions or negotiations relating to this Agreement or the
transactions and other agreements contemplated or executed hereby and (4)
the performance of obligations hereunder; provided, however, that each
party may disclose the terms and conditions of this Agreement (i) as
required by any court or other governmental body or as otherwise required
by law, (ii) to legal counsel of the parties, (iii) in confidence to
accountants, banks, and financing sources and their advisors, (iv) in
connection with the enforcement of this Agreement or rights under this
Agreement or (v) in confidence by BRG in connection with an actual or
proposed merger, acquisition, or similar transaction.  The provisions of
this Section 7(g) shall be in addition to, and not in substitution for,
the provisions of any separate nondisclosure agreement executed by the
parties hereto with respect to the transactions contemplated hereby.
(h)     Further Assurances.  MOI and each of the Shareholders
agree to deliver to BRG and MOI Acquisition Corp. such bill of sale,
deed, instrument or assignment and other documents as BRG or MOI
Acquisition Corp. may reasonably request to evidence sale, assignment,
conveyance and transfer to MOI Acquisition Corp. of the Purchased Assets.
If, at any time BRG or MOI Acquisition Corp. reasonably considers or is
advised that any further bills of sale, deeds, assignments or assurances
are reasonably necessary or desirable to vest, perfect or confirm in MOI
Acquisition Corp. title to any of the Purchased Assets, then MOI and each
of the Shareholders will promptly cause all such further bills of sale,
deeds, assignments and assurances to be executed and delivered by MOI and
each of the Shareholders, as applicable, and will do all other things
necessary or desirable to vest, perfect or confirm title to such
Purchased Assets in MOI Acquisition Corp. and otherwise to carry out the
purposes of this Agreement.

8.      Miscellaneous.
(a)     Survival of Representations and Warranties.  All
representations and warranties of BRG, MOI Acquisition Corp., MOI and the
Shareholders made in this Agreement or in any certificate, document or
other instrument delivered pursuant hereto shall survive for a period of
two years following the execution and delivery hereof and the Closing;
provided, however, that the representations and warranties of MOI and the
Shareholders set forth in Section 3(n) ("Taxes") shall survive until all
applicable statutes of limitations, including waivers and extensions
thereof, have expired with respect to each matter addressed therein, and
shall thereafter automatically expire.  Any actions or claims brought
pursuant to this Section 8(a) shall be brought within six (6) months of
the respective designated survival periods described in the immediately
preceding sentence.
(b)     Fees and Expenses.  Each of the parties hereto shall
bear its own fees and expenses, including fees of counsel and
accountants, incurred in connection with the negotiation of this
Agreement and the consummation of the transactions contemplated hereby or
otherwise arising out of, or by reason of, this Agreement.
(c)     Entire Agreement; Third Party Beneficiaries.  This
Agreement and the exhibits and schedules hereto constitute the entire
agreement among the parties hereto and thereto with respect to the
subject matter hereof and thereof and supersede all prior and
contemporaneous agreements, term sheets, understandings, negotiations and
discussions, whether oral or written, of the parties with respect
thereto.  The parties hereto acknowledge and agree that no third party
(including, without limitation, employees of MOI) is intended to be a
third-party beneficiary of this Agreement.
(d)     Amendments.  No amendment, modification or rescission
of this Agreement shall be effective unless set forth in writing executed
by the party sought to be bound thereby.
(e)     Notices.  Any notice given under this Agreement shall
be in writing and shall be deemed effective upon the earlier of personal
delivery (including personal delivery by telex or other means) to the
President of such party or to such party if an individual, the day after
delivery by commercial courier  or the third day after mailing by
certified or registered mail, postage prepaid, to the address first set
forth above (Attention: President, in the case of MOI, BRG or MOI
Acquisition Corp.), or to such other address as any party may have
furnished in writing to the other party in the manner provided above.
(f)     Assignment.  Neither MOI nor the Shareholders may
assign this Agreement or any of its rights hereunder in any manner
without the prior written consent of BRG.  Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective transferees, successors, assigns and
legal representatives.
(h)     Governing Law.  This Agreement and the respective
rights and obligations of the parties in this Agreement shall be
construed under and by the laws of the State of California as such laws
are applied to contracts entered into in that state between residents
thereof.
(i)     Attorneys' Fees.  If any legal action or proceeding is
brought to enforce or interpret this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with this
Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees and costs in connection with such action or proceeding in
addition to all other relief to which such party may be entitled.
(j)     No Waiver.  It is understood and agreed that no failure
or delay by any party in exercising any right, power, or privilege
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege be deemed to operate as
a waiver of any other right, power or privilege under this Agreement.
(k)     Counterparts.  This Agreement may be executed in any
number of counterparts, each of which shall be considered to be an
original, but all of which together shall constitute one and the same
instrument.
(l)     Advice of Counsel.  EACH PARTY TO THIS AGREEMENT
ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE
OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ
AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.  THIS
AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE
DRAFTING OR PREPARATION HEREOF.

(Signature Page Follows)



The parties hereto have duly executed this Asset Purchase Agreement
as of the date first set forth above.


BUSINESS RESOURCE GROUP,                MOI ACQUISITION CORP.,
a California corporation                a California corporation


By:             By:

Name:           Name:

Title:          Title:



SHAREHOLDERS:           MODERN OFFICE INTERIORS, INC., a
        North Carolina corporation

                By:
Richard Nellis
                Name:

                Title:
Craig Parr


____________________________________
Mark Baldwin




LIST OF EXHIBITS


Exhibit A       Purchased Assets

Exhibit B       Assumed Liabilities

Exhibit C       Additional Purchase Price

Exhibit D       Bill of Sale

Exhibit E       Purchase Price Allocation

Exhibit F       MOI Disclosure Schedule

Exhibit G       MOI Employees

Exhibit H       BRG and MOI Acquisition Corp. Disclosure Schedule

Exhibit I       Form of Confidentiality and Assignment Agreement


EXHIBIT A

PURCHASED ASSETS



EXHIBIT B

ASSUMED LIABILITIES





EXHIBIT C

ADDITIONAL PURCHASE PRICE

The Additional Purchase Price, if any, paid for each Applicable
Period set forth below shall be based on the operating income of MOI
Acquisition Corp. as set forth below.  The operating income of MOI
Acquisition Corp. shall be determined in good faith by BRG in accordance
with generally accepted accounting principles applied on a consistent
basis, and shall be calculated as follows:  revenues minus cost of goods
sold, operating expenses (including Richard Nellis and Craig Parr's
employment compensation) and operating interest, but before acquisition
interest and goodwill.  The calculation of the operating income of MOI
Acquisition Corp. as set forth in the immediately preceding sentence
shall not include any corporate allocation charges between BRG and MOI
Acquisition Corp.  The operating income of MOI Acquisition Corp. for the
First Applicable Period (as defined below) shall be deemed to include the
operating income (per the calculation described in the second and third
sentences above) of MOI for August 1 and August 2, 1999.

I.      First Applicable Period = August 1, 1999 to July 31, 2000:

If the Operating Income of
MOI Acquisition Corp.
during the Applicable
Period is:

Then the Additional
Purchase Price payable
for such Applicable
Period shall be:
1. $0 to $150,000.99

$0
2. $150,001 - $300,000.99

66 2/3% of any operating
income in excess of
$150,000, but less than
$300,000

3. $300,001 and above

$100,000 plus 20% of any
operating income in
excess of $300,000


Solely for purpose of illustration, (1) if the operating income of MOI
Acquisition Corp. during the First Applicable Period is $150,000, then
the Additional Purchase Price payable for such period shall be $0; (2) if
the operating income of MOI Acquisition Corp. during the First Applicable
Period is $200,000, then the Additional Purchase Price payable for such
period shall be $33,333.33; and (3) if the operating income of MOI
Acquisition Corp. during the First Applicable Period is $400,000, then
the Additional Purchase Price payable for such period shall be $120,000.

II.     Second Applicable Period = August 1, 2000 to July 31, 2001:

If the Operating Income of
MOI Acquisition Corp.
during the Applicable
Period is:

Then the Additional
Purchase Price payable
for such Applicable
Period shall be:
1.  $0 to $200,000.99

$0
2.  $200,001 - $400,000.99

66 2/3% any operating
income in excess of
$200,000, but less than
$400,000

3.  $400,001 and above

$133,333 plus 20% of any
operating income in
excess of $400,000



Solely for purpose of illustration, (1) if the operating income of MOI
Acquisition Corp. during the Second Applicable Period is $200,000, then
the Additional Purchase Price payable for such period shall be $0; (2) if
the operating income of MOI Acquisition Corp. during the Second
Applicable Period is $300,000, then the Additional Purchase Price payable
for such period shall be $66,666.67; and (3) if the operating income of
MOI Acquisition Corp. during the Second Applicable Period is $500,000,
then the Additional Purchase Price payable for such period shall be
$153,333.

III.    Third Applicable Period = August 1, 2001 to July 31, 2002:

If the Operating Income of
MOI Acquisition Corp.
during the Applicable
Period is:

Then the Additional
Purchase Price payable
for such Applicable
Period shall be:
1.  $0 to $250,000.99

$0
2.  $250,001 - $500,000.99

66 2/3% of any operating
income in excess of
$250,000, but less than
$500,000

3.  $500,001 and above

$166,666 plus 20% of any
operating income in
excess of $500,000

Solely for purpose of illustration, (1) if the operating income of MOI
Acquisition Corp. during the Third Applicable Period is $250,000, then
the Additional Purchase Price payable for such period shall be $0; (2) if
the operating income of MOI Acquisition Corp. during the Third Applicable
Period is $400,000, then the Additional Purchase Price payable for such
period shall be $100,000; and (3) if the operating income of MOI
Acquisition Corp. during the Third Applicable Period is $600,000, then
the Additional Purchase Price payable for such period shall be $186,666.

EXHIBIT D

BILL OF SALE

Know all persons by these presents, that Modern Office Interiors,
Inc., a North Carolina corporation, Richard Nellis, Craig Parr and Mark
Baldwin (collectively, the "Transferor"), in exchange for consideration
set forth in the Asset Purchase Agreement (the "Agreement") dated as of
August 3, 1999, by and among the Transferor, Business Resource Group, a
California corporation ("BRG"), and MOI Acquisition Corp., a wholly owned
subsidiary of BRG and a California corporation (the "Transferee"), hereby
sell, transfer, assign and convey unto Transferee, its successors and
assigns, free and clear of all liens and encumbrances, all of the right,
title and interest of Transferors in and to the Purchased Assets (as
defined in the Agreement).
TO HAVE AND TO HOLD the same unto the Transferee, its successors or
assigns, forever, and the Transferor does hereby covenant and agree that
the Transferor will from time to time, if requested by the Transferee,
its successors and assigns, do, execute, acknowledge and deliver, or will
cause to be done, executed and delivered to the Transferee, or its
successors or assigns, such and all further acts, transfers, assignments,
deeds, powers and assurances of title, and additional papers and
instruments, and do or cause to be done all acts or things as often as
may be proper or necessary for better assuring, conveying, transferring
and assigning all of the property hereby conveyed, transferred or
assigned, and effectively to carry out the intent hereof, and to vest in
the Transferee the entire right, title and interest of the Transferor in
and to all of the said property, and the Transferor will warrant and
defend the same to the Transferee, its successors and assigns, forever
against all claims or demands whatsoever.
IN WITNESS WHEREOF, the Transferor has executed this instrument
effective as of August 3, 1999.
        MODERN OFFICE INTERIORS, INC.

        By:

        Title:


        ____________________________________
        Richard Nellis

        ____________________________________
        Craig Parr

        ____________________________________
        Mark Baldwin

EXHIBIT E

PURCHASE PRICE ALLOCATION


EXHIBIT F

MOI DISCLOSURE SCHEDULE


EXHIBIT G

MOI EMPLOYEES


EXHIBIT H

BRG AND MOI ACQUISITION CORP. DISCLOSURE SCHEDULE

NONE


EXHIBIT I

FORM OF  CONFIDENTIALITY AND ASSIGNMENT AGREEMENT

EX-10.45 3 WINTHROP LEASE Winthrop Lease

Exhibit 10.45

WINTHROP RESOURCES CORPORATION
Lease Agreement Number BU061698
Lease Agreement


This Lease Agreement, dated June 16, 1998, by and between WINTHROP
RESOURCES

CORPORATION (the "Lessor") with an office located at 1015 Opus Center,
9900 Bren Road East, Minnetonka, Minnesota 55343 and BUSINESS RESOURCE
GROUP (the "Lessee") with an office located At 2150 North First Street,
Suite 101 San Jose, CA 95131

Lessor hereby leases or grants to the lessee the right to use and Lessee
hereby rents and accepts the right to use the equipment listed by serial
number and related services, and software and related services on the
Lease schedule(s) attached hereto or incorporated herein by reference
from the time to time (collectively, the equipment, software and services
are the "Equipment"), subject to the terms and conditions hereof, as
supplemented with respect to each item of Equipment by the terms and
conditions set forth in the appropriate Lease Schedule. The term "Lease
Agreement" shall include this Lease Agreement and the various Lease
Schedule(s) identifying one or more particular items of Equipment.

1.      Term
        This Lease Agreement is effective from the date it is
executed by both parties. The term of this Lease Agreement as to
all Equipment designated on any particular Lease Schedule shall
commence on the installation Date for all Equipment on such Lease
Schedule and shall continue for an initial period ending that
number of months from the Commencement Date as set forth in such
Lease Agreement as to all Equipment designated in any particular
Lease Schedule may be terminated without cause at the end of the
initial Term or any year thereafter by either party mailing written
notice of its termination to the other party not less than one-
hundred twenty (120) days prior to such termination date.

2. Commencement Date
The Installation Date for each item of Equipment shall be the
day said item of Equipment is Installed at the location of
Installation, ready for use, and accepted in writing by the Lessee.
The Commencement Date for any Lease Schedule is the first of the
month following Installation Date for any Equipment on the Lease
Schedule, unless the latest Installation Date for any Equipment on
the Lease Schedule falls on the first day of the month, in which
case that is the Commencement Date. The Lessee Agrees to complete,
execute and deliver a Certificate of Acceptance to Lessor upon
installation of the Equipment.



3. Lease Charge
The Lease charges for the Equipment leased pursuant to this
Lease Agreement shall be the Aggregate "Monthly Lease Charge [s]"
as set forth on each and every Lease Schedule executed pursuant
hereto (the aggregate "Monthly Lease Charge [s]" are the "Lease
Charges"). Lessee agrees to pay to Lessor the Lease Charges in
accordance with the Lease Schedule(s), and the payments shall be
made at Lessor's address indicated thereon. The Lease Charges shall
be paid by Lessee monthly in advance with the first full month's
payment due on the Commencement Date. If the Installation Date does
not fall on the first day of a month, the Lease Charge for the
period from the Installation Date to the Commencement Date shall be
an amount equal to the "Monthly Lease Charge" divided by thirty
(30) and multiplied by the number of days from and including the
Installation Date to the Commencement Date and such amount shall be
due and payable upon receipt of an invoice from Lessor.  Charges
for taxes made in accordance with Section 4 and charges made under
any other provision of the Lease Agreement and payable by Lessee
shall be paid to Lessor at Lessor's address specified above is not
received by Lessor on the due date, Lessee agrees to and shall, to
the extent permitted by law, pay on demand, as a late charge, an
amount equal to one and one half percent (1 1/2%), or the maximum
percentage allowed by law of less, of the amount past due ("Late
Charges"). Late Charges shall be charged and added to any past due
amount on the date such payment is due and every thirty (30) days
thereafter until past due amounts are paid in full to Lessor.

4. Taxes
In addition to the Lease Charges set forth in Section 3, the
Lessee shall reimburse Lessor for the License or registration fees,
assessments, sales and use taxes, rental taxes, gross receipts
taxes, personal property taxes, and other taxes now or hereafter
imposed by any government, agency province or otherwise upon the
Equipment, the Lease Charges or upon the ownership, leasing,
renting, purchase, possession or use of the Equipment, whether the
same be assessed to Lessor or Lessee (the "Taxes"). Lessee's should
file all property tax returns and pay all Taxes when due. Lessee,
upon notice to Lessor, may, in Lessee's own name, contest or
protest any Taxes, and Lessor shall honor any such notice except
when in Lessor's sole opinion such contest is futile or will cause
a levy or lien to arise on the Equipment or cloud Lessor's title
thereto. Lessee shall, in addition, be responsible to Lessor for
the payment and actions and inaction. Nothing herein shall be
construed to require Lessee to be responsible for any federal or
state taxes or payments in lieu thereof, imposed upon or measured
by the net income of the Lessor, or the state franchise taxes of
Lessor, or except as provided hereinabove, any penalties or
interest resulting from Lessor's failure to timely remit such tax
payments.

5. Delivery and Freight Costs
Lessee shall accept delivery of the Equipment and allow the
Equipment to be installed within seven (7) days after the delivery.
All transportation charges upon the Equipment for delivery to
Lessee's designated Location of installation are to be paid by
Lessee. All rigging, drayage charges, structural alterations,
rental of heavy equipment and/or other expense necessary to place
the Equipment at the Location of Installation are to be promptly
paid by Lessee.

6. Installation
Lessee agrees to pay for the actual installation of the
Equipment at Lessee's site. Lessee shall make available and agrees
to pay for all costs associated with providing a suitable place of
installation and necessary electrical power, outlets, and air
conditioning required for operating the Equipment as defined in the
Equipment manufacture's installation manual or instructions. All
supplies consumed or required by the Equipment shall be furnished
and paid for by Lessee.

7. Return to Lessor
On the day following the last day the Lessee is entitled or
obligated to possess and use the Equipment on the applicable Lease
Schedule (the "Return date"), Lessee shall cause and pay for the
Equipment on that Lease Schedule to be deinstalled, packed, using
the manufacture's standard packing materials, and shipped to a
location designated in writing by the Lessor (the "Return
Location"). If the Equipment on the applicable Lease Schedule is
not at the Return Location within ten (10) days of the Return Date,
or Lessee fails to deinstall the Equipment on the Return Date, then
any written notice of termination delivered by Lessee shall become
void, and the Lease Schedule shall continue in accordance with this
Lease Agreement. Irrespective of any other provision hereof, Lessee
will bear the risk of damage from fire, the elements otherwise
until delivery of the Equipment to the Return Location. At such
time as the Equipment is delivered to the Lessor at the Return
Location, the Equipment will be at the risk of Lessor.

8. Maintenance
Lessee, at its sole expense, shall maintain the Equipment in
good working order and condition. Lessee shall enter into, pay for
and maintain in force during the entire term of any Lease Schedule,
a maintenance agreement with the manufacture of the Equipment
providing for continuous uninterrupted maintenance of the Equipment
(the "Maintenance Agreement"). Lessee will cause the manufacture to
keep the Equipment in good working order in accordance with the
provisions of the Maintenance Agreement and make all necessary
adjustments and repairs to the Equipment. The manufacturer is
hereby authorized to accept the directions of Lessee with respect
thereto. Lessee agrees to allow the manufactures full and free
access to the Equipment. All maintenance and service charges,
whether under the Maintenance Agreement or otherwise, and all
expenses, if any, of the manufacture's customer engineers incurred
in connection with maintenance and repair services, should be
promptly paid by Lessee. Upon termination of any Lease Schedule or
this Lease Agreement, Lessee warrants that the Equipment shall be
in eligible for the manufacture's standard maintenance agreement,
Lessee agrees to reimburse Lessor for any costs it incurs in making
the Equipment eligible for such standard maintenance.

9. Location, Ownership and Use
The Equipment shall. At all times, be the sole and exclusive
property of Lessor. Lessee shall have no right or property interest
therein, except for the right to use the Equipment in the normal
operation of its business at the Location of Installation, or as
otherwise provided herein. The Equipment is and shall remain
personal property even if installed in or attached to real
property. Lessor shall be permitted to display notice of its
ownership on the Equipment by means of a suitable stencil, label or
plaque affixed thereto.

Lessee shall keep the Equipment at all times free and clear
from all other claims, levies, encumbrances and process. Lessee
shall give Lessor immediate notice of any such attachment or other
judicial process affecting any of the Equipment. Without Lessor's
written permission, Lessee shall not attempt to or actually: (1)
pledge, lend, create a security interest in, sublet, exchange,
trade, assign, swap, use for an allowance or credit or otherwise;
(2) allow another use;(3) part with possession;(4) dispose of; or
(5) remove from the Location of Installation, any item of the
Equipment. If any item of Equipment is exchange, assigned, traded,
swapped, used for an allowance or credit or otherwise to acquire
new or different equipment (the "New Equipment") without the
Lessor's prior written consent, then all of the New Equipment shall
become Equipment owned by the Lessor subject to this Lease
Agreement and the applicable Lease Schedule.

Any feature(s) installed on the Equipment at the time of
delivery which is not specified on the Lease Schedule(s) are and
shall remain the sole property of the Lessor.

Lessee shall cause the Equipment to be operated in accordance
with the applicable vendor's or manufacture's manual of
instructions by competent and qualified personnel.

10. Financing Statement
Lessor is hereby authorized by Lessee to cause this Lease
Agreement or other instruments, including Uniform Commercial Code
Financing Statements, to be filed or recorded for the purposes of
showing Lessor's interest in the Equipment. Lessee agrees to
execute any such instrument as Lessor may request from time to
time.

11. Alterations and Attachments
Upon prior written notice to Lessor, Lessee may, at its own
expense, make minor alterations in or add attachments to the
Equipment, provided such alterations and attachments shall not
interfere with the normal operation of the Equipment and do not
otherwise involve the pledge, assignment, exchange, trade, or
substitution of the Equipment or any component or part thereof.
All such alterations and attachments to the Equipment or interferes
with the normal and satisfactory operation or maintenance of any of
the Equipment, or creates a safety hazard. Lessee shall, upon
notice from Lessor to that effect, promptly remove the alteration
or attachment at Lessee's expense and restore the Equipment to the
condition the Equipment was in just prior to the alteration or
attachment.

12.     Loss and Damage
                Lessee shall assume and bear the risk of loss, theft and
damage (including any governmental requisition, condemnation or
confiscation) to the Equipment and all component parts thereof from
any and every cause whatsoever, whether or not covered by
insurance.  No loss or damage to the Equipment or any component
part thereof shall impair any obligation of Lessee under this Lease
Agreement, which shall continue in full force and effect except as
hereinafter expressly provided.  Lessee shall repair or cause to be
repaired all damage to the Equipment.  In the event that all or
part of the Equipment shall, as a result of any cause whatsoever,
become lost, stolen, destroyed or otherwise rendered irreparably
unusable or damaged (collectively, the "Loss") then Lessee shall,
within ten (10) days after the Loss, fully inform Lessor in regard
thereto and shall pay to Lessor the following amount: (i) the
Monthly Lease Charges (and other amounts) due and owing under this
Lease Agreement at the time of the Loss, plus (ii) one-hundred
twelve (112%) percent of the original cost of the Equipment subject
to the Loss amortized by the Monthly Lease Charges received by
Lessor during the Initial Term using an amortization rate of 350
basis points over the interest rate of the three (3) year United
States Treasury Note as reported by The Wall Street Journal on the
Commencement Date (collectively, the sum of (i) plus (ii) shall be
the "Casualty Loss Value: (i) the applicable Equipment shall be
removed from the Lease Schedule; and (ii) Lessee's obligation to
pay Lease Charges associated with the applicable Equipment shall
cease.  Lessor may request, and Lessee shall complete, and
affidavit(s) which swears out the facts supporting the Loss of any
item of Equipment.

13.     Insurance
Limited to, reconditioning and removal expenses repair costs,
commissions and attorneys' fees.  If the net proceeds are not
enough to satisfy all of the amounts owed by Lessee hereunder,
Lessee shall remain liable to Lessor for any deficiency.  Lessor's
pursuit and enforcement of any one or more remedies shall not be
deemed an election or waiver by Lessor of any other remedy.  Lessor
shall not be obligated to sell or re-lease the Equipment.  Any sale
or re-lease may be held at such place or places as are selected by
Lessor, with or without having the Equipment present.  Any such
sale or re-lease, may be at wholesale or retail, in bulk or in
parcels.  Time and exactitude of each of the terms and conditions
of this Lease Agreement are hereby declared to be of the essence.
Lessor may accept past due payments without modifying the terms of
this Lease Agreement and without waiving any rights of Lessor
hereunder.


14. Enforcement of Warranties
Upon receipt of a written request from Lessee, Lessor shall,
so long as this Lease Agreement is in force, take all reasonable
action requested by Lessee to enforce the equipment manufacture's
warranties, expressed or implied, issued on or applicable to the
Equipment, which are enforceable by Lessor in its own name. Lessor
shall obtain for Lessee all services furnished by the manufacturer
in connection therewith; provided, however, that Lessor shall not
be required to commence any suit or action or resort to litigation
to enforce any such warranty unless Lessee shall first pay to
Lessor in advance all expenses in connection therewith, including
attorneys' fees.

        If any such warranty shall be enforceable by Lessee in its
own name, Lessee shall, upon receipt of written request from
Lessor, so long as this Lease Agreement is in force, take all
responsibility action requested by Lessor to enforce any such
warranty which is enforceable by Lessee in its own name; provided,
however, that Lessee shall not be obligated to commence any suit or
action or resort to litigation to enforce any such warranty unless
Lessor shall pay all expenses in connection therewith.

15. Warranties, Disclaimers and Indemnity
Lessor warrants that at the time the Equipment is delivered
to Lessee, Lessor will have full right, power and authority to
lease the Equipment to Lessee, EXCEPT FOR THE WARRANTY IN THE
SENTENCE DIRECTLY PRECEDING THIS ONE, THE LESSOR DOES NOT MAKE ANY
WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING THE WARRANTY OF
MERCHANABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. LESSEE
ACKNOWLEDGES THAT IT IS NOT RELYING ON THE LESSOR'S SKILL OR
JUDGEMENT TO SELECT OR FURNISH GOODS SUITABLE FOR ANY PARTICULAR
PURPOSE AND THAT THERE ARE NO WARRANTIES CONTAINED IN THIS LEASE
AGREEMENT. LESSOR SHALL NOT BE LIABLE FOR DAMAGES, INCLUDING
SPECAIL, INCIDENTIAL OR CONSEQEUNTIAL, DAMAGES ARISING OUT OF OR IN
CONNECTION WITH THE PERFORMANCE OF THE EQUIPMENT OR ITS USE BY
LESSEE, AND SHALL NOT BE LIABLE FOR ANY SPECAIL, INCIDENTIAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH LESSOR'S
FAILURE TO PERFORM ITS OBLIGATION HEREUNDER. NO RIGHTS OR REMEDIES
REFERRED TO IN ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE WILL BE
CONFERRED ON LESSEE.

        Lessee agrees that Lessor shall not be liable to Lessee for,
and Lessee shall indemnify, defend and hold Lessor harmless with
respect to, any claim from a third party for any liability, claim,
loss, damage or expense of any kind of nature, whether based on
upon a theory of strict liability or otherwise, caused, directly or
indirectly, by (1) the inadequacy of any item of Equipment,
including software, for any purpose; (2) any defieciency or latent
or other defects in any Equipment, including software, whether or
not detectable by Lessee; (3) the selection, manufacture,
rejection, ownership, lease, possession, maittenance, operation,
use or performance of anty item of Equipment, including software;
(4) any interruption of loss of service, use or performance of any
item of Equpment, including software; (5) patent, trsdemark, or
copyright infrigment; or (6) any loss of business or other specail,
incidential or consequential damages whether or not resulting from
any of the foregoing. Lesee's duty to defend and indemnify Lessor
shall survive the expiration, termination, cancellation, or
assignment of this Lease Agreement or a Lease Schedule and shall be
binding upon Lessee's successors amd permitted assigns.

16. Event of Default
The occurance of any of the gfollowing events shall constitue an
Event of Default under this Lease Agreeement and/or any Lease
Schedule:
(1) the nonpayment by Lessee of any Lease Charges when due, or
nonpayment be Lessee of any other sum required hereunder to be
paid by Lessee which non-payment continues for a period of
ten(10) days from the date when due;
(2) the failure of Lessee t operform any other term, covenant  or
condition of this Lease Agreement, any Lease Scheduleor any
other document, agreement or instrument executed pursuant hereto
or in connection herewith which is not cured within ten (10)
days after written notice thereof from Lessor;
(3) Lessee attempts to or does remove, transfer, sell, swap, asign,
sublease, trade, exchange, encumber, receive an aloownace or
credit for, or part with possession of, any item of Equipment;
(4) Lessee ceases doing business  as a going concern, is insolvent ,
makes an assignment for the benefit of creditors, fail to pay
its debt as they become due, offers a settlement to creditors or
calls a due, offers a settlement t ocreditors  or call a meeting
of creitors for any such purpose, files a voluntary petition in
bankrupcy, is subject to an invulantary petition in bankrupcy,
is adjucated bankrupt or insolvent, files  or has filed against
it a  petion seeking any reorganization, arrangement or
compositoin under any present or future statue, law or
regulation.
(5) Any of Lessee's representations or warranties made  herein or
ant statement or certificate at any given in writing pursuant
hereto or in connection herewith shall be false or misleading in
any material respect;
(6) Lessee defaults undert or otherwise has accelerated any material
obligation, credit agreement, loan agreement, conditional sales
contract, lease, indenture or debenture; or Lessee defaults
under any other agreement now existing or hereafter made with
Lessor; or
(7) The breach or repudiation by any party thereto of any guaranty,
subordination agreement running in favor of Lessor obtained in
connection with this Lease Agreement.

17. Remedies
Should any Event of default occur and be continuing, Lessor may, in
order to protect its interests and resonably expected profits, with
or without notice or demand upon Lessee, pursue and enforce,
alternatively, successivly and/or concurrently, any one or more of
the following remedies:


(1) recover from Lessee all accrued and unpaid Lease Charges and
other amounts due and owing on the date of default;
(2) recover form Lessee from time to time all Lease Charges and
other amounts as and due hereunder;
(3) accelerate, cause to become immediately due and recover the
present value of all Lease Charges and other amounts due and/or
likely to become due hereunder from the date of the default  to
the end of the lease term using a discount rate of six (6%)
percent;
(4) cause to become immediately due and payable and recover from
Lessee the Casualty Loss Value of the Equipment;
(5) terminate any or all of the Lessee's rights, but not its
obligations, associated with the lease of Equipment under this
Lease Agreement;
(6) retake (by Lessor, independent contractor, or by requiring
Lessee to assemble and surrender the Equipment in accordance
with the provisions of Section 7 hereinabove) possession of the
Equipment without terminating the Lease Schedule or the Lease
Agreement free from claims by Lessee which claims are hereby
expressly waived by Lessee;
(7) required Lessee to deliver the equipment to a location
designated by Lessor;
(8) proceed by court action to enforce performance by Lessee of its
obligation associated with any Lease Schedule and/or this Lease
Agreement; and/or
(9) Pursue any other remedy Lessor may otherwise have, at law,
equity or under any statute, and recover damages and expenses
(including attorneys' fees) incurred by Lessor by reason of the
Event Of Default.

Upon repossession of the Equipment, Lessor shall have the right to
lease, sell or otherwise dispose of such Equipment in a
commercially reasonable manner, with or without notice, at a public
or private sale, and apply the net proceeds thereof to the amounts
owed by Lessee hereunder. For purposes of this paragraph, net
proceeds shall mean either: (1) the present value of the Monthly
Lease Charges to be received under the new lease using a term not
to exceed the remaining number of months in the Initial Term of the
Lease Schedule in default and a discount rate of twelve (12%)
percent; or (2) the amount received in cash upon the sale of the
Equipment, less, in either event, all expenses incurred by or for
Lessor in connection with such lease or sale, including, but not
limited to, reconditioning and removal expenses, repair costs,
commissions and attorneys' fees.  If the net proceeds are not
enough to satisfy all of the amounts owed by Lessee hereunder;
Lessee shall remain liable to Lessor for any deficiency.  Lessor's
pursuit and enforcement of any one or more remedies shall not be
deemed an election or waiver by Lessor of any other remedy.  Lessor
shall not be obligated to sell or re-lease the Equipment.  Any sale
or re-lease may be held at such place or places as are selected by
Lessor, with or without having the Equipment present.  Any such
sale or re-lease, may be at wholesale or retail, in bulk or in
parcels.  Time and exactitude of each of the terms and conditions
of this Lease Agreement are hereby declared to be of the essence.
Lessor may accept past due payments without modifying the terms of
this Lease Agreement and without waiving any rights of Lessor
hereunder.


18. Costs and Attorneys' Fees
In the event of any default, claim, proceeding, including a
bankruptcy proceeding, arbitration, mediation, counter-claim,
action (whether legal or equitable), appeal or otherwise, whether
initiated by Lessor or Lessee (or a debtor-in-possession or
bankruptcy trustee), which arises out of, under, or is related in
any way to this Lease Agreement, any Lease Schedule, or any other
document, agreement or instrument executed pursuant hereto or in
connection herewith, or any governmental examination or
investigation of Lessee which requires Lessor's participation
(individually and collectively, the "Claim"), Lessee, in addition
to all other sums which Lessee may be called upon to pay under the
provisions of this Lease Agreement, shall pay to Lessor, on demand,
all costs, expenses and fees paid or payable in connection with the
Claim, including, but not limited to, attorney's fees and out-of-
pocket costs, including travel and related expenses incurred by
Lessor or its attorneys.


19.     Lessor's Performance Option
Should Lessee fail to make any payment or to do any act as
provided by this Lease Agreement, then Lessor shall have the right
(but not the obligation), without notice to Lessee of its intention
to do so without releasing Lessee from any obligation hereunder to
make or to do the same, to make advances to preserve the Equipment
or Lessor's title thereto, and to pay, purchase, contest or
compromise any insurance premium, encumbrance, charge, tax, lien or
other sum which in the judgment of Lessor appears to affect the
Equipment, and in exercising any such rights, Lessor may incur any
liability and expend whatever amounts in its absolute discretion it
may deem necessary therefore.  All sums so incurred or expended by
Lessor shall be cue and payable by lessee within ten (10) days of
notice thereof.


20.     Quiet Possession and Inspection
Lessor hereby covenants with Lessee that Lessee shall quietly
possess the Equipment subject to and in accordance with the
provisions hereof so long as Lessee is not in default hereunder;
provided, however, that Lessor or its designated agent may, at any
and all reasonable times during business hours, enter Lessee's
premises for the purposes of inspecting the Equipment and the
manner in which it is being used.



21.     Assignments
This Lease Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns.  Lessee, however, shall not assign this Lease Agreement or
sublet any of the Equipment without first obtaining the prior
written consent of Lessor and its assigns, if any.  Lessee
acknowledges that the terms and conditions of this Lease Agreement
have been fixed in anticipation of the possible assignment of
Lessor's rights under this Lease Agreement and in and to the
Equipment as collateral security to a third party ("Assignee"
herein) which will rely upon and be entitled to the benefit of the
provisions of this Lease Agreement.  Lessee agrees to provide
Lessor or its potential assigns with Lessee's most recent audited
and its most current financial statements.  Lessee agrees with
Lessor and such Assignee to recognize in writing any such
assignment within fifteen (15) days after receipt of written notice
thereof and to pay thereafter all sums due to Lessor hereunder
directly to such Assignee if directed by Lessor, notwithstanding
any defense, set-off or counterclaim whatsoever (whether arising
from a breach of this Lease Agreement or not) that Lessee may from
time to time have against Lessor.  Upon such assignment, the Lessor
shall remain obligated to perform any obligations it may have under
this Lease Agreement and the Assignee shall (unless otherwise
expressly agreed to in writing by the Assignee) have no obligation
to perform such obligations.  Any such assignment shall be subject
to Lessee's tights to use and possession of the Equipment so long
as Lessee is not in default hereunder.


22.     Survival of Obligations
                Agreement, any Lease Schedules, or in any document attached
thereto, shall be for the benefit of Lessor and Lessee and their
successors, any assignee or secured party and shall survive the
execution and delivery of this Lease Agreement and the expiration
or other termination of this Lease Agreement.

23.     Corporate Authority
                The parties hereto covenant and warrant that the persons
executing this Lease agreement and each Lease Schedule on their
behalf have been duly authorized to do so, and this Lease Agreement
and any Lease Schedule constitute a valid and binding obligation of
the parties hereto.  The Lessee will, if requested by Lessor,
provide to Lessor Certificates of Authority naming the officers of
the Lessee who have the authority to execute this Lease Agreement
and any Lease Schedules attached thereto.

24.     Landlords' and Mortgagees' Waiver
        If requested, Lessee shall furnish waivers, in form and
substance satisfactory to Lessor, from all landlords and mortgages
of any premises upon which any Equipment is located.



25.     Miscellaneous
        This Lease Agreement, the Lease Schedule(s), attached riders
and any documents or instruments issued or executed pursuant hereto
will have been made, executed and delivered in and shall be
governed by the internal laws (as opposed to conflicts of law
provisions) and decisions of the State of Minnesota.  Lessee and
Lessor consent to jurisdiction of any local, state or federal court
located within Minnesota.  Venue shall be in Minnesota and lessee
hereby waives local venue and any objection relating to Minnesota
being an improper venue to conduct any proceeding relating to this
Lease Agreement.  At Lessor's sole election and determination,
Lessor may select an alternative forum, including arbitration or
mediation, to adjudicate any dispute arising out of this Lease
Agreement.

        This Lease Agreement and associated Lease Schedule(s)
constitute the entire agreement between Lessor and lessee with
respect to the lease of the Equipment superseding all prior
correspondence between the parties.  No provision of this Lease
Agreement or any Lease Schedule shall be deemed waived, amended or
modified by either party unless such waiver, amendment or
modification is in writing and signed by each of the parties
hereto.  If any one or more of the provisions of this Lease
Agreement or any Lease Schedule will be unimpaired, and the
invalid, illegal or unenforceable provision that is closest to the
original intention of the parties.  Lessee agrees that neither the
manufacturer, nor the supplier, nor any of their salespersons,
employees or agents are agents of Lessor.

        Any notice provided for herein shall be in writing and sent
by certified or registered mail to the parties at the addresses
stated on page 1 of the Lease Agreement.

        This Lease Agreement shall not become effective until
delivered to Lessor at its offices at Minnetonka, Minnesota and
executed by Lessor.  If this Lease Agreement shall be executed by
Lessor prior to being executed by Lessee, it shall become void at
Lessor's option five (5) days after the date of Lessor's execution
hereof, unless Lessor shall have received by such date a copy
hereof executed by a duly authorized representative of Lessee.

        This Lease Agreement is made subject to the terms and
conditions included herein and Lessee's acceptance is effective
only to the extent that such terms and conditions are consistent
with the terms and conditions herein.  Any acceptance which
contains terms and conditions which are in addition to or
inconsistent with the terms and conditions herein will be counter-
offer and will not be binding unless agreed to in writing by
Lessor.

        The terms used in this Lease Agreement, unless otherwise
defined, shall have the meanings ascribed to them in the Lease
Schedule(s).

26.     REPOSESSION
        LESSEE ACKNOWLEDGES THAT, PURSUANT TO SECTION 17 HEREOF,
LESSOR HAS BEEN GIVEN THE RIGHT TO REPOSSESS THE EQUIPMENT SHOULD
LESSEE BECOME IN DEFAULT OF ITS OBLIGATIONS HEREUNDER.  LESSEE
HEREBY WAIVES THE RIGHT, IF ANY, TO REQUIRE LESSOR TO GIVE LESSEE
NOTICE AND A JUDICIAL HEARING PRIOR TO EXERCISING SUCH RIGHT OF
REPOSSESSION.

27.     Net Lease
        This Lease Agreement is a net lease and Lessee's obligations
to pay all Lease Charges and other amounts payable hereunder shall
be absolute and unconditional and, except as expressly provided
herein, shall not be subject to any: (i) delay, abatement,
reduction, defense, counterclaim, set-ff, or recoupment; (ii)
discontinuance or termination of any license; (iii) Equipment
failure, defect or deficiency; (iv) damage to or destruction of the
Equipment; or (v) dissatisfaction with the Equipment or otherwise,
including any present or future claim against Lessor to the
manufacturer, supplier, reseller, vendor of the Equipment.  To the
extent that the Equipment includes intangible (or intellectual)
property, Lessee understands and agrees that: (i) Lessor is not a
party to and does not have any responsibility under any software;
and (ii) Lessee will be responsible to pay all of the Lease Charges
and perform all its other obligations under this Lease Agreement
despite any defect, deficiency, failure, termination,
dissatisfaction, damage or destruction of any software or software
license.  Except as expressly provided herein, this Lease Agreement
shall not terminate for any reason, including any defect in the
Equipment or Lessor's title thereto or any destruction or loss of
use of any item of Equipment.

28.     Headings
        Section headings herein are used for convenience only and
shall not otherwise affect the provisions of this Lease Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement
to be signed by their respective duty authorized representative.

Every Term is Agreed to and Accepted:   Every Term is Agreed to and
Accepted:

WINTHROP RESOURCES CORPORATION  BUSINESS RESOURCE GROUP

By:                                                     By:

Print Name:  Kirk A. MacKenzie                  Print Name:     John Palmer


Title:   Exec Vice President/Treasurer          Title:  VP
Finance/CFO

Date:   July 2, 1998                                    Date:   July 1, 1998

EX-10.46 4 NELLIS EMPLOYMENT Nellis Employment

Exhibit 10.46

BUSINESS RESOURCE GROUP
EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is dated as of August
3, 1999 by and between Richard Nellis ("Employee") and Business Resource
Group, a California corporation, including any wholly-owned subsidiaries
of Business Resource Group (collectively, the "Company").
Recitals:
A. The Employee was previously employed as Treasurer and
Secretary of Modern Office Interiors, Inc. ("MOI"), a North Carolina
corporation engaged in the sale of office furniture and related services
in Morrisville, North Carolina.
B. Pursuant to that certain Asset Purchase Agreement dated as of
August 3, 1999 by and among MOI, the Company, MOI Acquisition Corp., a
California corporation and wholly-owned subsidiary of the Company
("Acquisition Corp."), and certain other parties named therein, the
Company has purchased substantially all of the assets of MOI (the
"Assets") as set forth therein (the "Asset Purchase Agreement"), which
Assets shall be deployed through Acquisition Corp.
C. In consideration of and as an inducement to the Company
entering into the Asset Purchase Agreement, and subject to the execution
of the Asset Purchase Agreement, the parties, intending to be bound
hereby, have agreed to execute an employment agreement in the form hereof
in order to assure continuance of Employee's service in connection with
the Assets.
NOW, THEREFORE, the parties hereto agree as follows:
1. Term of Agreement. This Agreement shall commence on the date
hereof and shall have a term of three (3) years (the "Original Term"),
unless earlier terminated by either party pursuant to Section 4 below.
2. Duties.
(a) Position. Employee shall be employed as President of
Acquisition Corp., and as such will have primary responsibility for
managing the sales operations of the Acquisition Corp. and will initially
report to the Company's Chief Executive Officer.
(b) Obligations to the Company. Employee agrees to the
best of his ability and experience that he will at all times loyally and
conscientiously perform all of the duties and obligations required of and
from Employee pursuant to the express and implicit terms hereof to the
reasonable satisfaction of the Company. During the term of Employee's
employment relationship with the Company, Employee further agrees that he
will devote all of his business time and attention to the business of the
Company, the Company will be entitled to all of the benefits and profits
arising from or incident to all such work services and advice, Employee
will not render commercial or professional services of any nature to any
person or organization, whether or not for compensation, without the
prior written consent of the Company's Board of Directors, and Employee
will not directly or indirectly engage or participate in any business
that is competitive in any manner with the business of the Company.
Nothing in this Agreement will prevent Employee from owning no more than
1% of the outstanding equity securities of a corporation whose stock is
listed on a national stock exchange or The Nasdaq Stock Market.
Employee will comply with and be bound by the Company's operating
policies, procedures and practices from time to time in effect during the
term of Employee's employment.
3. Compensation. For the duties and services to be performed by
Employee hereunder, the Company shall pay Employee, and Employee agrees
to accept, the salary and other benefits as described below in this
Section 3.
(a) Salary. Employee shall receive a monthly salary of
$6,800, which is equivalent to $81,600 on an annualized basis.
Employee's monthly salary will be payable pursuant to the Company's
normal payroll practices. Employee's base salary shall be reviewed
annually pursuant to the Company's normal compensation review practices
by the Company's Board of Directors, its Compensation Committee or the
Chief Executive Officer of the Company, and any increase will be
effective as of the date determined appropriate by the Board of
Directors, its Compensation Committee or the Chief Executive Officer.
(b) Additional Benefits. Employee will be eligible to
participate in the Company's employee benefit plans of general
application, including, without limitation, those plans covering medical,
disability and life insurance in accordance with the rules established
for individual participation in any such plan and under applicable law.
Notwithstanding the foregoing sentence, Employee shall be allowed to
continue to receive standard medical benefit plan provided to him by MOI.
Employee will be eligible for vacation and sick leave in accordance with
the policies in effect during the term of this Agreement (currently 3
weeks of accrued paid vacation per year and 7 paid holidays per year)
and will receive such other benefits as the Company generally provides to
its other employees of comparable position and experience, including, but
not limited to, participation in the Company's 401(k) plan and employee
stock purchase plan.
(c) Reimbursement of Expenses. Employee shall be
authorized to incur on behalf and for the benefit of, and shall be
reimbursed by, the Company for reasonable expenses, provided that such
expenses are substantiated in accordance with Company policies.
4. Termination of Employment and Severance Benefits. The
Company and Employee acknowledge and agree that, notwithstanding the
specified term of this Agreement, Employee's employment is and shall
continue to be at-will, as defined under applicable law, and that
Employee's employment with the Company may be terminated by either party
at any time for any or no reason. If Employee's employment terminates
for any reason, Employee shall not be entitled to any payments, benefits,
damages, award or compensation other than as provided in Section 4(a)
below. The rights and duties created by this Section 4 may not be
modified in any way except by a written agreement executed by the Chief
Executive Officer of the Company.
(a) Severance Benefits. If Employee's employment is
involuntarily terminated by the Company other than for Cause (as defined
below), Employee will be entitled to receive payment of severance
benefits equal to Employee's regular monthly salary until the earlier of
(i) six months (6) after the termination date; or (ii) the date on which
Employee commences full-time employment, part-time employment, or some
combination thereof pursuant to which Employee works or is paid for an
equivalent of at least 30 hours per week (the "Severance Period"). Such
severance payments shall be made ratably over the Severance Period
according to the Company's standard payroll schedule. Health insurance
benefits with the same coverage provided to Employee prior to the
termination (e.g. medical, dental, optical, mental health) and in all
other respects significantly comparable to those in place immediately
prior to the termination will be provided at the Company's cost over the
Severance Period.
Employee's entitlement to any severance benefits under this
Section 4(a) is conditioned upon Employee's execution and delivery to the
Company of (i) a general release of all claims in the form provided by
the Company at the time of termination and (ii) a resignation from all of
Employee's positions with the Company in a form satisfactory to the
Company.
(b) Cause. For purposes of this Agreement, "Cause" for
Employee's termination will exist at any time after the happening of one
or more of the following events:
(i) Employee's willful misconduct or gross negligence
in performance of his duties hereunder, as determined in good faith by
the Company, including Employee's refusal to comply in any material
respect with the legal directives of the Company's Chief Executive
Officer or Board of Directors so long as such directives are not
inconsistent with Employee's then-current position and duties, and such
refusal to comply is not remedied within 10 working days after written
notice from the Company to Employee, which written notice shall state
that failure to remedy such conduct may result in an involuntary
termination for Cause;
(ii) Dishonest or fraudulent conduct, a deliberate
attempt to do an injury to the Company or the conviction of a felony; or
(iii) Employee's incurable material breach of any
element of the Company's Confidential Information and Invention
Assignment Agreement, including, without limitation, Employee's theft or
other misappropriation of the Company's proprietary information.
5. Confidentiality Agreement. Employee shall sign, or has
signed, a Confidential Information and Invention Assignment Agreement
(the "Confidentiality Agreement") substantially in the form attached
hereto as Exhibit A. Employee hereby represents and warrants to the
Company that he has complied with all obligations under the
Confidentiality Agreement and agrees to continue to abide by the terms of
the Confidentiality Agreement and further agrees that the provisions of
the Confidentiality Agreement shall survive any termination of this
Agreement or of Employee's employment relationship with the Company.
6. Employee Covenants. Employee hereby agrees that he shall
not, during the term of his employment pursuant to this Agreement and for
a period of either: (i) two years following the expiration of the
Original Term; or (ii) three years following termination of this
Agreement by either party, whichever period is longer (the "Noncompete
Period"), do any of the following without the prior written consent of
the Company's Board of Directors:
(a) Solicit Business. Solicit or influence or attempt to
influence any client, customer or other person either directly or
indirectly, to direct his, her or its purchase of the Company's or
Acquisition Corp.'s products and/or services to any person, firm,
corporation, institution or other entity in competition with the business
of the Company or Acquisition Corp.
(b) Solicit Personnel. Solicit or influence or attempt to
influence any person employed by the Company or Acquisition Corp. to
terminate or otherwise cease his or her employment with the Company or
Acquisition Corp. or become an employee of any competitor of the Company
or Acquisition Corp.
(c) Compete. Carry on any business or activity (whether
directly or indirectly, as a partner, stockholder, principal, agent,
director, affiliate, employee or consultant) which is competitive with
the business conducted by the Company or Acquisition Corp. (as conducted
now or during the Noncompete Period), nor engage in any other activities
that conflict with Employee's obligations to the Company or Acquisition
Corp.
(d) Acknowledgment. The Employee acknowledges and agrees
that the covenants set forth in this Section 6 are essential to the
growth and stability of the business of Acquisition Corp. during the five
years after acquisition of the Assets by the Company and to the
continuing viability of such business.
7. Conflicts. Employee represents that his performance of all
the terms of this Agreement will not breach any other agreement to which
Employee is a party. Employee has not, and will not during the term of
this Agreement (and during the Noncompete Period with respect to Section
6 above only), enter into any oral or written agreement in conflict with
any of the provisions of this Agreement. Employee further represents
that he is entering into or has entered into an employment relationship
with the Company of his own free will and that he has not been solicited
as an employee in any way by the Company.
8. Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's
business and/or assets shall assume the obligations under this Agreement
and agrees expressly to perform the obligations under this Agreement in
the same manner and to the same extent as the Company would be required
to perform such obligations in the absence of a succession. The terms of
this Agreement and all of Employee's rights hereunder shall inure to the
benefit of, and be enforceable by, Employee's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
9. Miscellaneous Provisions.
(a) Amendments and Waivers. Any term of this Agreement may
be amended or waived only with the prior written consent of the parties.
(b) Sole Agreement. This Agreement, including any Exhibits
hereto, constitutes the sole agreement of the parties, and supersedes all
oral negotiations and prior writings, with respect to the subject matter
hereof.
(c) Notices. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient upon
receipt, when delivered personally or by a nationally-recognized delivery
service (such as Federal Express or UPS), or 48 hours after being
deposited in the U.S. mail as certified or registered mail with postage
prepaid, if such notice is addressed to the party to be notified at such
party's address as set forth below or as subsequently modified by written
notice.
(d) Choice of Law. The validity, interpretation,
construction and performance of this Agreement shall be governed by the
laws of the State of California, without giving effect to the principles
of conflict of laws.
(e) Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, the parties
agree to renegotiate such provision in good faith. In the event that the
parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this
Agreement, (ii) the balance of the Agreement shall be interpreted as if
such provision were so excluded and (iii) the balance of the Agreement
shall be enforceable in accordance with its terms.
(f) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
(g) Arbitration. Any dispute or claim arising out of or in
connection with this Agreement will be finally settled by binding
arbitration in Raleigh, North Carolina in accordance with the rules of
the American Arbitration Association by one arbitrator appointed in
accordance with said rules. The arbitrator shall apply California law,
without reference to rules of conflicts of law or rules of statutory
arbitration, to the resolution of any dispute. Judgment on the award
rendered by the arbitrator may be entered in any court having
jurisdiction thereof. Notwithstanding the foregoing, the parties may
apply to any court of competent jurisdiction for preliminary or interim
equitable relief, or to compel arbitration in accordance with this
paragraph, without breach of this arbitration provision. This Section
9(g) shall not apply to the Confidentiality Agreement.
(h) Advice of Counsel. EACH PARTY TO THIS AGREEMENT
ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE
OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ
AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS
AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE
DRAFTING OR PREPARATION HEREOF.
[Signature Page Follows]

The parties have executed this Employment Agreement the date first
written above.

BUSINESS RESOURCE GROUP

By:

Name: ______________________________

Title:

Address: 2150 North First Street
Suite 101
San Jose, CA 95131

Richard nellis

Signature:

Address:

EXHIBIT A
CONFIDENTIALITY AND ASSIGNMENT AGREEMENT
In consideration of, and as a condition of my employment with
Business Resource Group, a California corporation (the "Company"), doing
business in the State of California located at 2150 North First Street,
Suite 101, San Jose, California 95131, I hereby represent to and agree
with the Company as follows:
1. Purpose of Agreement. I understand that the Company is
engaged in a continuous program of production, sales and marketing in
connection with its business and that it is critical for the Company to
preserve and protect its Proprietary Information (as defined below), its
rights in Inventions (as defined below) and in all related rights.
2. Disclosure of Inventions. I will promptly disclose in
confidence to the Company all inventions, improvements, designs, original
works of authorship, processes, computer software programs, databases and
trade secrets ("Inventions") that I make or conceive or first reduce to
practice or create, either alone or jointly with others, during the
period of my employment, whether or not in the course of my employment.
3. Work for Hire; Assignment of Inventions. I acknowledge and
agree that any copyrightable works prepared by me within the scope of my
employment are "works for hire" under the Copyright Act and that the
Company will be considered the author and owner of such copyrightable
works. I agree that all Inventions, and all patent, copyright, trade
secret, and other intellectual property rights relating to such
Inventions, that (a) are developed using equipment, supplies, facilities
or trade secrets of the Company, (b) result from work performed by me for
the Company, or (c) relate to the Company's business or current or
anticipated research and development, will be the sole and exclusive
property of the Company and are hereby irrevocably assigned by me to the
Company.
4. Assistance. I agree to assist the Company in every proper
way to obtain for the Company and enforce patents, copyrights, mask work
rights, trade secret rights and other legal protections for the Company's
Inventions in any and all countries and I will execute any documents that
the Company may reasonably request for such purpose both before and after
my employment with the Company terminates. I hereby appoint the
Secretary of the Company as my attorney-in-fact to execute documents on
my behalf for this purpose.
5. Proprietary Information. I understand that my employment by
the Company creates a relationship of confidence and trust with respect
to any information of a confidential or secret nature that may be
disclosed to me by the Company that relates to the business of the
Company or to the business of any parent, subsidiary, affiliate, customer
or supplier of the Company or any other party with whom the Company
agrees to hold information of such party in confidence ("Proprietary
Information"). Such Proprietary Information includes but is not limited
to Inventions, marketing plans, product plans, business strategies,
financial information, forecasts, personnel information and customer
lists.
6. Confidentiality. At all times, both during my employment and
after its termination, I will keep and hold all such Proprietary
Information in strict confidence and trust, and I will not use or
disclose any of such Proprietary Information without the prior written
consent of the Company, except as may be necessary to perform my duties
as an employee of the Company for the benefit of the Company. Upon
termination of my employment with the Company, I will promptly deliver to
the Company all documents and materials of any nature pertaining to my
work, including without limitation all documents and materials containing
Proprietary Information. My obligations under Section 5 above and this
Section 6 shall survive any termination of my employment with the
Company.
7. Solicitation of Employees, Consultants and Other Parties. I
agree that during the term of my employment or consulting relationship
with the Company, and for a period of 24 months following the termination
of my relationship with the Company for any reason, I shall not directly
or indirectly solicit, induce, recruit or encourage any of the Company's
employees or consultants to terminate their relationship with the
Company, or attempt any of the foregoing, either for myself or any other
person or entity. For a period of 24 months following termination of my
relationship with the Company for any reason, I shall not solicit any
licensor to or customer of the Company or licensee of the Company's
products, that are known to me, with respect to any business, products or
services that are competitive to the products or services offered by the
Company or under development as of the date of termination of my
relationship with the Company.
8. No Breach of Prior Agreement. I represent that my
performance of all the terms of this Agreement and my duties as an
employee of the Company will not breach any invention assignment,
proprietary information or similar agreement with any former employer or
other party. I represent that I will not bring with me to the Company or
use in the performance of my duties for the Company any documents or
materials of a former employer that are not generally available to the
public or have not been legally transferred to the Company.
9. Severability. In the event that any provision of this
Agreement is found by a court, arbitrator or other tribunal to be
illegal, invalid or unenforceable, then such provision shall not be
voided, but shall be enforced to the maximum extent permissible under
applicable law, and the remainder of this Agreement shall remain in full
force and effect.
10. No Duty to Employ. I understand that this Agreement does not
constitute a contract of employment or obligate the Company to employ me
for any stated period of time. This Agreement shall be effective as of
the first day of my employment by the Company.
11. Assignment. I agree that this Agreement may be assigned to
any successor or parent corporation of the Company.
12. Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto
shall be governed, construed and interpreted in accordance with the laws
of the State of California, without reference to rules of conflict of
law.
13. Remedies. I understand and acknowledge that any breach or
threatened breach of this Agreement by me is likely to cause or threaten
irreparable harm to the Company, and, accordingly, I agree that in such
event, the Company shall be entitled to equitable relief to protect its
interest therein, including but not limited to preliminary and permanent
injunctive or mandatory relief, as well as money damages. This Section
13 shall survive any termination of my employment with the Company.
14. Entire Agreement. This Agreement sets forth the entire
Agreement and understanding of the parties relating to its subject matter
and merges all prior discussions and agreements between them. No
modification or amendment to this Agreement, nor any waiver of any rights
under this Agreement, will be effective unless in writing signed by both
parties.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Confidentiality
and Assignment Agreement as of August ___, 1999.

BUSINESS RESOURCE GROUP EMPLOYEE:
("COMPANY")

By: _____________________________

Richard Nellis
Title: ____________________________

Address: 2150 North First Street Address: ____________________________
Suite 101 ____________________________
San Jose, CA 95131

EX-10.47 5 PARR EMPLOYMENT Parr Employment

Exhibit 10.47

BUSINESS RESOURCE GROUP
EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is dated as of August
3, 1999 by and between Craig Parr ("Employee") and Business Resource
Group, a California corporation, including any wholly-owned subsidiaries
of Business Resource Group (collectively, the "Company").
Recitals:
A. The Employee was previously employed as Vice President of
Modern Office Interiors, Inc. ("MOI"), a North Carolina corporation
engaged in the sale of office furniture and related services in
Morrisville, North Carolina.
B. Pursuant to that certain Asset Purchase Agreement dated as of
August 3, 1999 by and among MOI, the Company, MOI Acquisition Corp., a
California corporation and wholly-owned subsidiary of the Company
("Acquisition Corp."), and certain other parties named therein, the
Company has purchased substantially all of the assets of MOI (the
"Assets") as set forth therein (the "Asset Purchase Agreement"), which
Assets shall be deployed through Acquisition Corp.
C. In consideration of and as an inducement to the Company
entering into the Asset Purchase Agreement, and subject to the execution
of the Asset Purchase Agreement, the parties, intending to be bound
hereby, have agreed to execute an employment agreement in the form hereof
in order to assure continuance of Employee's service in connection with
the Assets.
NOW, THEREFORE, the parties hereto agree as follows:
1. Term of Agreement. This Agreement shall commence on the date
hereof and shall have a term of three (3) years (the "Original Term"),
unless earlier terminated by either party pursuant to Section 4 below.
2. Duties.
(a) Position. Employee shall be employed as Manager of
Operations of Acquisition Corp., and as such will have primary
responsibility for managing the business operations of Acquisition Corp.
and will initially report to the Company's Chief Executive Officer.
(b) Obligations to the Company. Employee agrees to the
best of his ability and experience that he will at all times loyally and
conscientiously perform all of the duties and obligations required of and
from Employee pursuant to the express and implicit terms hereof to the
reasonable satisfaction of the Company. During the term of Employee's
employment relationship with the Company, Employee further agrees that he
will devote all of his business time and attention to the business of the
Company, the Company will be entitled to all of the benefits and profits
arising from or incident to all such work services and advice, Employee
will not render commercial or professional services of any nature to any
person or organization, whether or not for compensation, without the
prior written consent of the Company's Board of Directors, and Employee
will not directly or indirectly engage or participate in any business
that is competitive in any manner with the business of the Company.
Nothing in this Agreement will prevent Employee from owning no more than
1% of the outstanding equity securities of a corporation whose stock is
listed on a national stock exchange or The Nasdaq Stock Market.
Employee will comply with and be bound by the Company's operating
policies, procedures and practices from time to time in effect during the
term of Employee's employment.
3. Compensation. For the duties and services to be performed by
Employee hereunder, the Company shall pay Employee, and Employee agrees
to accept, the salary and other benefits as described below in this
Section 3.
(a) Salary. Employee shall receive a monthly salary of
$6,800, which is equivalent to $81,600 on an annualized basis.
Employee's monthly salary will be payable pursuant to the Company's
normal payroll practices. Employee's base salary shall be reviewed
annually pursuant to the Company's normal compensation review practices
by the Company's Board of Directors, its Compensation Committee or the
Chief Executive Officer of the Company, and any increase will be
effective as of the date determined appropriate by the Board of
Directors, its Compensation Committee or the Chief Executive Officer.
(b) Additional Benefits. Employee will be eligible to
participate in the Company's employee benefit plans of general
application, including, without limitation, those plans covering medical,
disability and life insurance in accordance with the rules established
for individual participation in any such plan and under applicable law.
Notwithstanding the foregoing sentence, Employee shall be allowed to
continue to receive standard medical benefit plan provided to him by MOI.
Employee will be eligible for vacation and sick leave in accordance with
the policies in effect during the term of this Agreement (currently 3
weeks of accrued paid vacation per year and 7 paid holidays per year)
and will receive such other benefits as the Company generally provides to
its other employees of comparable position and experience, including, but
not limited to, participation in the Company's 401(k) plan and employee
stock purchase plan.
(c) Reimbursement of Expenses. Employee shall be
authorized to incur on behalf and for the benefit of, and shall be
reimbursed by, the Company for reasonable expenses, provided that such
expenses are substantiated in accordance with Company policies.
4. Termination of Employment and Severance Benefits. The
Company and Employee acknowledge and agree that, notwithstanding the
specified term of this Agreement, Employee's employment is and shall
continue to be at-will, as defined under applicable law, and that
Employee's employment with the Company may be terminated by either party
at any time for any or no reason. If Employee's employment terminates
for any reason, Employee shall not be entitled to any payments, benefits,
damages, award or compensation other than as provided in Section 4(a)
below. The rights and duties created by this Section 4 may not be
modified in any way except by a written agreement executed by the Chief
Executive Officer of the Company.
(a) Severance Benefits. If Employee's employment is
involuntarily terminated by the Company other than for Cause (as defined
below), Employee will be entitled to receive payment of severance
benefits equal to Employee's regular monthly salary until the earlier of
(i) six months after the termination date; or (ii) the date on which
Employee commences full-time employment, part-time employment, or some
combination thereof pursuant to which Employee works or is paid for an
equivalent of at least 30 hours per week (the "Severance Period"). Such
severance payments shall be made ratably over the Severance Period
according to the Company's standard payroll schedule. Health insurance
benefits with the same coverage provided to Employee prior to the
termination (e.g. medical, dental, optical, mental health) and in all
other respects significantly comparable to those in place immediately
prior to the termination will be provided at the Company's cost over the
Severance Period.
Employee's entitlement to any severance benefits under this
Section 4(a) is conditioned upon Employee's execution and delivery to the
Company of (i) a general release of all claims in the form provided by
the Company at the time of termination and (ii) a resignation from all of
Employee's positions with the Company in a form satisfactory to the
Company.
(b) Cause. For purposes of this Agreement, "Cause" for
Employee's termination will exist at any time after the happening of one
or more of the following events:
(i) Employee's willful misconduct or gross negligence
in performance of his duties hereunder, as determined in good faith by
the Company, including Employee's refusal to comply in any material
respect with the legal directives of the Company's Chief Executive
Officer or Board of Directors so long as such directives are not
inconsistent with Employee's then-current position and duties, and such
refusal to comply is not remedied within 10 working days after written
notice from the Company to Employee, which written notice shall state
that failure to remedy such conduct may result in an involuntary
termination for Cause;
(ii) Dishonest or fraudulent conduct, a deliberate
attempt to do an injury to the Company or the conviction of a felony; or
(iii) Employee's incurable material breach of any
element of the Company's Confidential Information and Invention
Assignment Agreement, including, without limitation, Employee's theft or
other misappropriation of the Company's proprietary information.
5. Confidentiality Agreement. Employee shall sign, or has
signed, a Confidential Information and Invention Assignment Agreement
(the "Confidentiality Agreement") substantially in the form attached
hereto as Exhibit A. Employee hereby represents and warrants to the
Company that he has complied with all obligations under the
Confidentiality Agreement and agrees to continue to abide by the terms of
the Confidentiality Agreement and further agrees that the provisions of
the Confidentiality Agreement shall survive any termination of this
Agreement or of Employee's employment relationship with the Company.
6. Employee Covenants. Employee hereby agrees that he shall
not, during the term of his employment pursuant to this Agreement and for
a period of either: (i) two years following the expiration of the
Original Term; or (ii) three years following termination of this
Agreement by either party, whichever period is longer (the "Noncompete
Period"), do any of the following without the prior written consent of
the Company's Board of Directors:
(a) Solicit Business. Solicit or influence or attempt to
influence any client, customer or other person either directly or
indirectly, to direct his, her or its purchase of the Company's or
Acquisition Corp.'s products and/or services to any person, firm,
corporation, institution or other entity in competition with the business
of the Company or Acquisition Corp.
(b) Solicit Personnel. Solicit or influence or attempt to
influence any person employed by the Company or Acquisition Corp. to
terminate or otherwise cease his or her employment with the Company or
Acquisition Corp. or become an employee of any competitor of the Company
or Acquisition Corp.
(c) Compete. Carry on any business or activity (whether
directly or indirectly, as a partner, stockholder, principal, agent,
director, affiliate, employee or consultant) which is competitive with
the business conducted by the Company or Acquisition Corp. (as conducted
now or during the Noncompete Period), nor engage in any other activities
that conflict with Employee's obligations to the Company or Acquisition
Corp.
(d) Acknowledgment. The Employee acknowledges and agrees
that the covenants set forth in this Section 6 are essential to the
growth and stability of the business of Acquisition Corp. during the five
years after acquisition of the Assets by the Company and to the
continuing viability of such business.
7. Conflicts. Employee represents that his performance of all
the terms of this Agreement will not breach any other agreement to which
Employee is a party. Employee has not, and will not during the term of
this Agreement (and during the Noncompete Period with respect to Section
6 above only), enter into any oral or written agreement in conflict with
any of the provisions of this Agreement. Employee further represents
that he is entering into or has entered into an employment relationship
with the Company of his own free will and that he has not been solicited
as an employee in any way by the Company.
8. Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's
business and/or assets shall assume the obligations under this Agreement
and agrees expressly to perform the obligations under this Agreement in
the same manner and to the same extent as the Company would be required
to perform such obligations in the absence of a succession. The terms of
this Agreement and all of Employee's rights hereunder shall inure to the
benefit of, and be enforceable by, Employee's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
9. Miscellaneous Provisions.
(a) Amendments and Waivers. Any term of this Agreement may
be amended or waived only with the prior written consent of the parties.
(b) Sole Agreement. This Agreement, including any Exhibits
hereto, constitutes the sole agreement of the parties, and supersedes all
oral negotiations and prior writings, with respect to the subject matter
hereof.
(c) Notices. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient upon
receipt, when delivered personally or by a nationally-recognized delivery
service (such as Federal Express or UPS), or 48 hours after being
deposited in the U.S. mail as certified or registered mail with postage
prepaid, if such notice is addressed to the party to be notified at such
party's address as set forth below or as subsequently modified by written
notice.
(d) Choice of Law. The validity, interpretation,
construction and performance of this Agreement shall be governed by the
laws of the State of California, without giving effect to the principles
of conflict of laws.
(e) Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, the parties
agree to renegotiate such provision in good faith. In the event that the
parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this
Agreement, (ii) the balance of the Agreement shall be interpreted as if
such provision were so excluded and (iii) the balance of the Agreement
shall be enforceable in accordance with its terms.
(f) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
(g) Arbitration. Any dispute or claim arising out of or in
connection with this Agreement will be finally settled by binding
arbitration in Raleigh, North Carolina in accordance with the rules of
the American Arbitration Association by one arbitrator appointed in
accordance with said rules. The arbitrator shall apply California law,
without reference to rules of conflicts of law or rules of statutory
arbitration, to the resolution of any dispute. Judgment on the award
rendered by the arbitrator may be entered in any court having
jurisdiction thereof. Notwithstanding the foregoing, the parties may
apply to any court of competent jurisdiction for preliminary or interim
equitable relief, or to compel arbitration in accordance with this
paragraph, without breach of this arbitration provision. This Section
9(g) shall not apply to the Confidentiality Agreement.
(h) Advice of Counsel. EACH PARTY TO THIS AGREEMENT
ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE
OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ
AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS
AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE
DRAFTING OR PREPARATION HEREOF.
[Signature Page Follows]

The parties have executed this Employment Agreement the date first
written above.

BUSINESS RESOURCE GROUP

By:

Name: ______________________________

Title:

Address: 2150 North First Street
Suite 101
San Jose, CA 95131

Craig Parr

Signature:

Address:

BUSINESS RESOURCE GROUP EMPLOYEE:
("COMPANY")

By: _____________________________

Craig Parr
Title: ____________________________

Address: 2150 North First Street Address: ____________________________
Suite 101 ____________________________
San Jose, CA 95131

EX-22.1 6 SUBSIDIARIES OF REGISTRANT Subsidiary

Exhibit 22.1

                           State of               Doing
      Subsidiary         Incorporation         Business As
- ----------------------- --------------- -------------------------
OFN, Inc.               California      Office Furniture Networking
RN Acquisition Corp.    California      Re'Nu Office Systems
MOI Acquisition Corp.   California      Modern Office Interiors

EX-23.1 7 INDEPENDENT AUDITOR'S CONSENT Consent

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statements (Form S-8 Nos. 33-95144, 333-02388, 333-23495 and 333-49849) of Business Resource Group of our report dated December 8, 1999, appearing in this Annual Report on Form 10-K of Business Resource Group for the year ended October 31, 1999.

Deloitte & Touche LLP

San Jose, California
January 25, 2000

EX-27.1 8 EXHIBIT 27.1
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE FISCAL YEAR ENDED OCTOBER 31, 1999 AS REPORTED ON FORM 10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. YEAR OCT-31-1999 NOV-01-1998 OCT-31-1999 479 0 18,426 400 20,080 41,836 6,616 (3,007) 50,813 31,649 0 0 0 52 17,403 50,813 124,974 124,974 97,302 97,302 22,449 0 (678) 4,560 1,885 2,675 0 0 0 2,675 0.52 0.52

~~-----END PRIVACY-ENHANCED MESSAGE-----~~

California	77-0150337
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification Number)



	John W. Peth
	President, Chief Executive Officer and Director
	(Principal Executive Officer)