SEPARATION AND SALE AGREEMENT
EXHIBIT 2
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
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.
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.
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ARTICLE 3. Representations
and Warranties of DFCO
DFCO represents and warrants to SLVG as
follows:
Section 3.1.
Organization and Qualification of the Company
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
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.
Section
3.3. Brokers
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
SLVG represents and warrants to DFCO as
follows:
Section 4.1.
Organization and Qualification
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
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
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
The parties hereto further agree as
follows:
Section 5.1. DFCO
Cooperation
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
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.
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Section
5.3. DFCO’s Specific Performance
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
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
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
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
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
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
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.
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Section 7.4.
Notices
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.:
0000 XxxxxXxx Xxxxx Xxxxx 000 X
XxxxxxxxXX, 00000
Attn: Xxxx Xxxx
Telecopier: ________________
Telecopier: ________________
with a copy to:
Xxxxxxxxx & Associates
00000 Xxx Xxxxxx, Xxx. 000
Xxxxxx, XX00000
Telecopier: 000-000-0000
If to Dalrada Financial Corporation:
DALRADA FINANCIAL CORPORATION
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX00000
Attn: Xxxxx X. Xxxxxxxxx
Telecopier: 858.277.4043
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX00000
Attn: Xxxxx X. Xxxxxxxxx
Telecopier: 858.277.4043
with a copy to:
Xxxxxxxxx & Associates
00000 Xxx Xxxxxx, Xxx. 000
Xxxxxx, XX00000
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
This Agreement shall be binding upon and
inure
to the benefit of the parties hereto and their respective successors and
assigns.
Counterparts
This Agreement may be executed in two or
more
counterparts, all of which shall constitute one and the same instrument.
Governing Law
This Agreement shall be construed, performed
and enforced in accordance with the laws of the State of Nevada.
Consent to Jurisdiction; Waiver of Jury Right
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
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
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.
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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
/s/ Xxxx Xxxx
By: ___________________
Name: Xxxx Xxxx
Title: CEO
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