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.
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.
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 again
