SEPARATION AND SALE AGREEMENT
Exhibit
2
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SEPARATION
AND SALE AGREEMENT
This
SEPARATION AGREEMENT, is dated March 29, 2007, by and among DALRADA FINANCIAL
CORPORATION (“DFCO” or the “Company”), a Delaware corporation, and SOLVIS GROUP,
INC. (“SLVG”), a Nevada corporation.
PRELIMINARY
STATEMENT
DFCO
owns
125,062,058 shares or approximately 75.8% (percent) of the issued and
outstanding shares of capital stock (“Shares”)
of
SLVG and 100% (percent) of Heritage Staffing, Inc. SLVG owns Solvis Financial
Services, Inc.
NOW,
THEREFORE, in consideration of the mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
ARTICLE
1. SEPARATION
AND SALE TERMS
Section 1.1. SLVG
to Sell Certain Assets and Operations to DFCO|HiddenPara|
Subject
to the terms and conditions of this Agreement and in reliance upon the
representations, warranties and covenants contained herein, SLVG will sell
to
DFCO assets and operations, as follows:
Section
1.1.1. Solvis
Financial Services, Inc. (“SFS”). The
assets of its SFS subsidiary, which consists of SLVG California PEO/staff
leasing client contracts, including clients, accounts
receivable, and accounts payable, for the sum of three million, two hundred
forty thousand dollars ($3,240,000.00).
Section
1.1.2 Settlement
of Inter-company accounts.
DFCO and
SLVG agree that the accounts being transferred between the two companies as
listed on SCHEDULE 1 total eight million and sixty thousand dollars
($8,060,000.00) due SLVG.
Section 1.2. DFCO
to Sell Heritage Staffing, Inc. to SLVG.
DFCO
hereby sells its 100% interest in its subsidiary Heritage Staffing, Inc., to
SLVG. The compensation for the sale is included in the settlement of
Inter-company accounts as described in Section 1.1.2 above.
Section 1.3. DFCO
to Return Shares of SLVG to Treasury
|HiddenPara|
As
further consideration, subject to the terms and conditions of this Agreement
and
in reliance upon the representations, warranties and covenants contained herein,
DFCO hereby transfers, assigns and delivers to SLVG treasury 125,062,058 shares
of SLVG it currently holds, less 30,000,000 shares representing a retained
ownership percentage in SLVG. DFCO agrees that the SLVG shares it retains shall
not be transferred or sold without advance notice to the SLVG Board of
Directors.
Section
1.4. Share
AIG Workers’ Compensation Policy.
Both
DFCO and SLVG may continue to share the AIG worker’s compensation policy. Both
DFCO and SLVG will record their respective interests in premium payments and
reserves proportionately.
1
Section
1.5 Payment.
Subject
to the terms and conditions of this Agreement and in reliance upon the
representations, warranties and covenants contained herein, DFCO shall pay
to
SLVG the sum of eleven million, three hundred thousand dollars ($11,300,000.00),
as follows:
Section
1.5.1. Promissory
Note Number 1 - Solvis Financial Services. DFCO
shall execute on behalf of SLVG a promissory note (“Note 1”) in the amount of
three million two hundred forty thousand dollars ($3,240,000.00), dated as
of
the effective date of this Agreement, payable over five (5) years with interest
accruing at eight percent (8%) per annum without pre-payment penalty. The
monthly amount due shall be fifty thousand dollars ($50,000.00) for the first
five (5) years with a balloon payment due at the end of the 5-year period of
one
million, one hundred and sixty thousand, nine hundred forty five dollars
($1,160,945). (Assuming Note 1 is not pre-paid, the total of payments will
be
four million one hundred sixty thousand, nine hundred forty five dollars
($4,160,945).
Section
1.5.2. Promissory
Note Number 2 - Inter-Company Balances. DFCO
shall execute on behalf of SLVG a promissory note (“Note 3”) in the amount of
eight million sixty thousand dollars ($8,060,000.00), dated as of the effective
date of this Agreement, payable over five (5) years with interest accruing
at
eight percent (8%) per annum without pre-payment penalty. The monthly amount
due
shall be eighty-five thousand dollars ($85,000.00) for the first five (5) years
with a balloon payment due at the end of the 5-year period of five million
eight
hundred one thousand, forty one dollars ($5,801,041). (Assuming Note 2 is not
pre-paid, the total of payments will be ten million nine hundred one thousand
and forty one dollars ($10,901,041).
Section
1.5.3. Payments.
Unless
and until otherwise instructed, DFCO shall remit all payments by wire on the
first of each month to a bank account specified by SLVG, beginning as of the
date of the signing of this Agreement.
ARTICLE
2. CLOSING
Section
2.1. Closing.
Subject
to the terms and conditions of this Agreement and in reliance upon the
representations, warranties and covenants contained herein, this Agreement
shall
become effective as of March 29, 2007.
Section
2.2. Material
Changes.
Both
DFCO and SLVG agree that there may be changes in calculations associated with
establishing the financial terms of this Agreement. To the extent that the
changes are not deemed material (changes of 10% or less), this Agreement shall
by revised by addenda attached to and incorporated into this Agreement. Material
changes may require re-negotiation of the terms of this Agreement.
ARTICLE
3. Representations
and Warranties of DFCO
|HiddenPara|
DFCO
represents and warrants to SLVG as follows:
Section 3.1. Organization and Qualification of the Company
|HiddenPara|
The
Company is a corporation that is duly organized, validly existing and in good
standing under the laws of the State of Delaware.
Section
3.2. Authorization and Validity of Agreements
|HiddenPara|
DFCO
shall provide a Board of Directors resolution confirming that DFCO has the
power
and authority to execute and deliver this Agreement and all other agreements
specified in or contemplated by this Agreement to be executed and delivered
by
DFCO and to perform its obligations hereunder and there under. This Agreement
and all other agreements specified in or contemplated by this Agreement to
be
executed and delivered by DFCO have been duly authorized and approved by all
required corporate action and executed and delivered by DFCO and constitute
the
valid and binding obligations of DFCO enforceable against it in accordance
with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, securities or other laws
or
policies relating to or affecting creditors’ rights or the enforcement of
indemnification obligations or by general principles of equity.
2
Section
3.3. Brokers
|HiddenPara|
All
negotiations relating to this Agreement and the transactions contemplated hereby
have been carried out without the intervention of any person acting on behalf
of
Seller in such manner as to give rise to any valid claim against either Buyer
or
the Company for any brokerage or finder’s commission, fee or similar
compensation.
ARTICLE
4. Representations and Warranties of SLVG
|HiddenPara|
SLVG
represents and warrants to DFCO as follows:
Section
4.1. Organization and Qualification
|HiddenPara|
SLVG
is a
corporation that is duly incorporated, validly existing and in good standing
under the laws of Nevada. SLVG has the requisite power and authority to own,
lease and operate its properties and to carry on its business as it is now
being
conducted.
Section
4.2 Authorization and Validity of Agreements
|HiddenPara|
SLVG
has
the power and authority to execute and deliver this Agreement, and all other
agreements specified in or contemplated by this Agreement to be executed and
to
perform their respective obligations hereunder and hereunder. This Agreement
and
all other agreements specified in or contemplated by this Agreement have been
duly authorized and approved by all required corporate action and executed
and
delivered by Buyer and constitute the valid and binding obligations of the
Buyer
enforceable against them in accordance with their respective terms, except
as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, securities or other laws or policies relating to
or
affecting creditors’ rights or the enforcement of indemnification obligations or
by general principles of equity.
Section
4.5. Brokers
|HiddenPara|
All
negotiations relating to this Agreement and the transactions contemplated hereby
have been carried out without the intervention of any person acting on behalf
the Buyer in such manner as to give rise to any valid claim against Seller
for
any brokerage or finder’s commission, fee or similar compensation, other than
fees to be paid by Buyers.
ARTICLE
5. Covenants
|HiddenPara|
The
parties hereto further agree as follows:
Section
5.1. DFCO Cooperation
|HiddenPara|
DFCO
shall
cause its company and its employees to, cooperate fully with SLVG in order
to
enable SLVG to enforce any and all rights of indemnity which SLVG may be
entitled to enforce against third parties, and, in connection therewith, DFCO
shall, upon the request of SLVG, provide SLVG and its representatives, including
third party insurers, with full access at all reasonable times to the books,
records and documents of the company which have been transferred to SLVG and
to
the employees of the company and others to enable SLVG to enforce its right
of
indemnity against third parties.
Section
5.2. SLVG’s Cooperation
|HiddenPara|
SLVG
shall,
and they shall cause the company and its employees to, cooperate fully with
DFCO
in order to enable DFCO to enforce any and all rights of indemnity which DFCO
may be entitled to enforce against third parties, and, in connection therewith,
SLVG shall, upon the request of DFCO, provide DFCO and its representatives,
including third party insurers, with full access at all reasonable times to
the
books, records and documents of the company which have been transferred to
DFCO
and to the employees of the company and others to enable DFCO to enforce its
right of indemnity against third parties.
3
Section
5.3. DFCO’s Specific Performance
|HiddenPara|
If
there
is any breach or threatened breach of any of the provisions in this Article
4,
DFCO shall have the right to obtain specific enforcement and performance of
such
provisions by any court of competent jurisdiction, it being agreed that any
such
breach or threatened breach would cause irreparable injury to DFCO and that
money damages would not provide an adequate remedy to DFCO. Such right shall
be
in addition to, and not in lieu of, any other rights and remedies available
to
DFCO under law or in equity.
Section
5.4. SLVG’s Specific Performance
|HiddenPara|
If
there
is any breach or threatened breach of any of the provisions in this Article
4,
SLVG shall have the right to obtain specific enforcement and performance of
such
provisions by any court of competent jurisdiction, it being agreed that any
such
breach or threatened breach would cause irreparable injury to SLVG and that
money damages would not provide an adequate remedy to SLVG. Such right shall
be
in addition to, and not in lieu of, any other rights and remedies available
to
SLVG under law or in equity.
ARTICLE
6. Survival; Indemnification
Section
6.1. Survival of the Representations, Warranties and
Covenants
|HiddenPara|
The
representations and warranties contained in or made pursuant to this Agreement
shall not survive the closing of the transactions contemplated hereby. All
covenants and agreements contained in this Agreement shall survive until
performed in accordance with their terms.
Section
6.2. Indemnity by the parties
|HiddenPara|
DFCO
and
SLVG, shall indemnify and hold harmless each other from and against any and
all
demands, claims, recoveries, obligations, losses, damages, deficiencies and
liabilities, and all reasonable and related costs, expenses (including
reasonable attorneys’ fees), interest and penalties, which any of them shall
incur which results from the breach of any of the representations, warranties,
covenants or agreements made by DFCO and SLVG under this Agreement.
ARTICLE
7. General Provisions.
Section
7.1. Entire
Agreement
|HiddenPara|
This
Agreement supersedes all other prior agreements, understandings, representations
and warranties, oral or written, between the parties hereto with respect of
the
subject matter hereof.
Section
7.2. Expenses
|HiddenPara|
Except,
as otherwise specifically provided herein, whether or not the transactions
contemplated herein are consummated, each party shall pay its own expenses
incident to the preparation and performance of this Agreement.
Section
7.3. Further
Assurances
|HiddenPara|
From
time
to time prior to, at and after the date hereof, each party hereto will execute
all such instruments and take all such actions as the other, being advised
by
counsel, shall reasonably request (and which it is reasonably within their
respective powers to accomplish), in connection with the carrying out and
effectuating of the intent and purposes hereof and all transactions and things
contemplated by this Agreement, including, without limitation, the execution
and
delivery of any and all confirmatory and other instruments in addition to those
to be delivered on the date hereof, and any and all actions which may reasonably
be necessary or desirable to complete the transactions contemplated
hereby.
4
Section
7.4. Notices
|HiddenPara|
Any
notice or other communication required or permitted under this Agreement by
any
party to the other shall be in writing, and shall be deemed effective upon
(a)
personal delivery, if delivered by hand; (b) three days after the date of
deposit in the mails, if mailed by certified or registered mail, postage
prepaid, return receipt requested; (c) the next business day, if sent by a
prepaid overnight courier service; or (d) when sent, if sent by facsimile
transmission with a confirmation copy sent by first class mail on the date
of
fax transmission, and in each case addressed as follows:
If
to Solvis Group, Inc.:
Solvis
Group, Inc.
0000
Xxxxx Xxx Xxxxx Xxxxx 000 X
Xxxxxxxx
XX, 00000
Attn:
Xxxx Xxxx
Telecopier:
________________
with
a copy to:
Xxxxxxxxx
& Associates
00000
Xxx
Xxxxxx, Xxx. 000
Xxxxxx,
XX 00000
Telecopier:
000-000-0000
If
to Dalrada Financial Corporation:
DALRADA
FINANCIAL CORPORATION
0000
Xxxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxxx, XX 00000
Attn:
Xxxxx X. Xxxxxxxxx
Telecopier:
858.277.4043
with
a copy to:
Xxxxxxxxx & Associates
00000
Xxx
Xxxxxx, Xxx. 000
Xxxxxx,
XX 00000
Telecopier:
000-000-0000
or
to
such other address or to such other person as any party hereto shall have last
designated by notice to another party in accordance with the provisions of
this
Section 7.4.
Assignment
|HiddenPara|
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
Counterparts
|HiddenPara|
This
Agreement may be executed in two or more counterparts, all of which shall
constitute one and the same instrument.
Governing
Law
|HiddenPara|
This
Agreement shall be construed, performed and enforced in accordance with the
laws
of the State of Nevada.
5
Consent
to Jurisdiction; Waiver of Jury Right
|HiddenPara|
Each
party to this Agreement hereby irrevocably and unconditionally consents to
submit to the exclusive jurisdiction of a court sitting in Orange County,
California for any actions, suits or proceedings arising out of or relating
to
this Agreement and the transactions contemplated hereby (and each party agrees
not to commence any action, suit or proceeding relating thereto except in such
court), and further agrees that service of any process, summons, notice or
document in accordance with the Notice provisions herein shall be effective
service of process for any action, suit or proceeding brought against such
party
in any such court. Each party hereby irrevocably and unconditionally waives
to
the fullest extent of permitted by applicable law, (a) any and all rights to
trial by jury and (b) any objections such party may now or hereafter may have
to
the laying of venue, of any such action, suit or proceeding arising out of
this
Agreement or the transactions contemplated hereby.
Headings
|HiddenPara|
The
article and section headings in this Agreement are for convenience of reference
only and shall not be deemed to alter or affect the meaning or interpretation
of
any provision hereof.
Severability
|HiddenPara|
Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid, but if any provision of this Agreement is held
to
be invalid or unenforceable in any respect, such invalidity or unenforceability
shall not render invalid or unenforceable any other provision of this Agreement.
Acknowledgement
and Waiver.
Xxxxxxxxx & Associates has explained to each of the undersigned that present
and conflicting dual interests may exist in reviewing the above-described
agreement and has informed each of us of the nature and possible consequences
of
these conflicts.
We
understand that we have the right to seek independent counsel before executing
this consent,
or at any future time. Each of the undersigned nevertheless desires
representation
by Xxxxxxxxx & Associates and therefore consents and gives approval for
such
representation.
We
further release Xxxxxxxxx & Associates from any and all liability and
further agree to indemnify
and defend Xxxxxxxxx & Associates from all suits, judgments arbitration
awards and alike as resulting from its representation of our interests and
specifically involving the disclosed potential conflict of interest.
IN
WITNESS WHEREOF, the parties hereto have caused this agreement to be executed
as
of the date first above written.
DALRADA
FINANCIAL CORPORATION
/s/
Xxxxx
Xxxxx
By:
_______________
Name:
Xxxxx Xxxxx
Title:
CEO
SOLVIS
GROUP, INC.
/s/
Xxxx
Xxxx
By:
___________________
Name:
Xxxx Xxxx
Title:
CEO
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