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.
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.
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
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.
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:
