UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 14, 2013

 

STAFFING 360 SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   333-169152   68-0680859
(State or other jurisdiction of   (Commission File Number)   (IRS Employer Identification No.)
incorporation)        

641 Lexington Ave

Suite 1526

New York, NY 10022
(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: 212.634.6410

 

300 S. Pine Island Road, Suite 305

Fort Lauderdale, FL 33324
(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

 

 
 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Minton Employment Agreement

 

On February 15, 2013, the Company entered into an employment agreement (the “Minton Employment Agreement”) with Darren Minton to serve as the Senior Vice President of the Company.  In addition, the parties agreed that Mr. Minton shall not engage or participate in any business that is in competition in any manner whatsoever with the business of the Company, or any business which the Company contemplates conducting or intends to conducts.

 

Pursuant to the terms of the Minton Employment Agreement, the Company will pay Mr. Minton $48,000 annually. In addition, Mr. Minton will receive reimbursement for all reasonable expenses which Minton incurs during the course of performance under the Minton Employment Agreement. Mr. Minton can terminate the Employment Agreement after four months with 30 days notice. The Company can terminate the Minton Employment Agreement upon notice to Mr. Minton.

 

The foregoing description of the terms of the Minton Employment Agreement does not purport to be complete and are qualified in their entirety by reference to the provision of such Agreement file as an exhibit to this Report.

 

Cervantes Employment Agreement

 

On February 15, 2013, the Company approved an employment agreement (the “Cervantes Employment Agreement”) with Alfonso J. Cervantes, the President of the Company.  In addition, the parties agreed that Mr. Cervantes shall not engage or participate in any business that is in competition in any manner whatsoever with the business of the Company, or any business which the Company contemplates conducting or intends to conducts.

 

Pursuant to the terms of the Cervantes Employment Agreement, the Company will pay Mr. Cervantes $120,000 annually. In addition, Mr. Cervantes will receive reimbursement for all reasonable expenses which Minton incurs during the course of performance under the Cervantes Employment Agreement. Mr. Cervantes can terminate the Employment Agreement after four months with 30 days notice. The Company can terminate the Cervantes Employment Agreement upon notice to Mr. Cervantes.

 

The foregoing description of the terms of the Cervantes Employment Agreement does not purport to be complete and are qualified in their entirety by reference to the provision of such Agreement file as an exhibit to this Report.

 

Chord Advisors Agreement

 

On February 15, 2013, the Company entered into an advisory agreement (the “Chord Agreement”) with Chord Advisors, LLC (“Chord”) . Pursuant to the Chord Agreement, Chord will provide the Company with comprehensive outsourced accounting solutions. The Company will pay Chord $6,250 per month for a period of 12 months. Our Chief Financial Officer, David Horin, is the President of Chord. The Agreement may be terminated by either party.

 

The foregoing description of the terms of the Chord Agreement does not purport to be complete and are qualified in their entirety by reference to the provision of such Agreement file as an exhibit to this Current Report on Form 8-K (this “Report”).

 

Grandview Advisory Agreement

 

On February 15, 2013, the Company entered into an advisory agreement (the “Grandview Advisory Agreement”) with Grandview Capital Partners, Inc. (“Grandview”). Pursuant to the Grandview Advisory Agreement, Grandview will provide the Company primarily with assistance and advice in seeking out a potential merger or acquisition partner or target.

 

 
 

 

The Company will pay Grandview $10,000 per month for a period of 18 months and will increase to $15,000 per month on the completion of the first acquisition of a temporary staffing company by the Company and contemporaneous financing. The Company will further compensate Grandview as its exclusive buy side advisor to locate and facilitate qualified businesses or companies that may desire to have the Company provide financing, (debt or equity) or fund the acquisition of certain of the stock or assets of such business transactions. Grandview will receive a fee between one (1%) and ten (10%) percent of the total transaction, depending on the transaction value, as defined in the Grandview Advisory Agreement.

 

The foregoing description of the terms of the Grandview Advisory Agreement does not purport to be complete and are qualified in their entirety by reference to the provision of such Agreement file as an exhibit to this Report.

 

Pylon Agreement

 

On February 14, 2013, the Company entered into a corporate services agreement (the “Pylon Agreement”) with Pylon Management, Inc. (“Pylon”). Pursuant to the Pylon Agreement, Pylon will provide the Company primarily with assistance and advice in identifying out a potential merger or acquisition targets and integrating such acquired business into the Company for a period of eighteen (18) months.

 

Pursuant to the Pylon Agreement, for any M&A Transaction, as defined in the Pylon Agreement, Pylon will receive a fee between three (3%) and five (5%) percent of the Transaction Value, as defined in the Pylon Agreement. Pylon shall also receive equity compensation in the amount of two percent (2%) of the outstanding shares of the Company’s common stock on the date of the first M&A Transaction, and one percent (1%) of the outstanding shares of the Company’s common stock on the date of the second M&A Transaction. All shares of the Company common stock issued under the Pylon Agreement shall have “piggyback” registration rights at the Company’s election and shall be included in any registration statement filed by the Company with the Securities and Exchange Commission. The Company will also pay Pylon $30,000 in accrued fees under the Pylon Agreement, as well as 2% of the net sales of the Company for administrative services rendered, which amount may be reduced pursuant to the Pylon Agreement. The Agreement may be terminated by either party upon ninety (90) days written notice.

 

The foregoing description of the terms of the Pylon Agreement does not purport to be complete and are qualified in their entirety by reference to the provision of such Agreement file as an exhibit to this Report.

 

Joshua Capital Agreement

 

On February 15, 2013, Staffing 360 Solutions, Inc. (the “Company”) entered into an advisory agreement (the “Joshua Capital Agreement”) with Joshua Capital, LLC (“Joshua Capital”). Pursuant to the Joshua Capital Agreement, Joshua Capital will provide the Company primarily with advisory and consulting services in connection with the Company’s business operations.

 

The Company will pay Joshua Capital $10,000 per month for a period of 18 months and will increase to $15,000 per month on the completion of the first acquisition of a temporary staffing company by the Company and contemporaneous financing. The agreement may be terminated by the Company for cause, as defined in the agreement.

 

The foregoing description of the terms of the Joshua Capital Agreement does not purport to be complete and are qualified in their entirety by reference to the provision of such Agreement file as an exhibit to this Report.

 

 
 

 

Item 4.01 Changes in Registrant’s Certifying Accountant.

 

On February 14, 2013 the Company dismissed M&K CPAS, PLLC (“M&K”) as the Company’s independent registered public accounting firm. The Company has engaged RBSM LLP (“RBSM”) as its registered public accounting firm, effective February 14, 2013. The decision to change registered public accounting firms and the appointment of the new registered public accounting firm was made by the Company’s Board of Directors.

 

The reports of M&K on the financial statements of the Company as of and for the two most recent fiscal years did not contain any adverse opinion or a disclaimer of opinion, and, except for an emphasis paragraph regarding a going concern uncertainty, were not qualified or modified as to uncertainty, audit scope or accounting principles.

 

During the Company’s two most recent fiscal years and through February 14, 2013, there were no disagreements with M&K on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of M&K, would have caused them to make reference thereto in their reports on the financial statements for such years. During the two most recent fiscal years and through February 14, 2013, there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

 

During the Company’s two most recent fiscal years and through February 14, 2013, the Company did not consult with RBSM with respect to any of (i) the application of accounting principles to a specified transaction, either completed or proposed; (ii) the type of audit opinion that might be rendered on the Company’s financial statements; or (iii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K) or an event of the type described in Item 304(a)(1)(v) of Regulation S-K.

 

The Company provided M&K a copy of the foregoing disclosures and requested M&K to furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether or not it agrees with the statements made therein. A copy of that letter dated February 20, 2013, furnished by M&K is filed as Exhibit 16.1 to this Current Report on Form 8-K.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

On February 15, 2013, Adam Wasserman notified the Company that he would resign from his position as Chief Financial Officer of the Company (the “Board”), effective immediately.  Mr. Wasserman’s resignation was not a result of any disagreement with the Company or its executive officers, or any matter relating to the Company’s operations, policies or practices.

 

On February 15, 2013, the Board appointed David Horin as Chief Financial Officer the Company. On that same day, the Board increased its size from two (2) to three (3) members and appointed Allan Hartley, the Company’s Chief Executive Officer, to fill the vacancy.

 

Biographical information for Mr. Hartley has previously been disclosed on the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September 13, 2012. Mr. Harley is qualified to serve on our Board because of his experience with public companies.

 

David Horin, CPA, 44, Chief Financial Officer . Mr. Horin is currently the President of Chord Advisors, LLC, an advisory firm that provides targeted financial solutions to public (small-cap and mid-cap) and private small and mid-sized companies and Chief Financial Officer of TRIG Acquisition 1, Inc. From March 2008 to June 2012, Mr. Horin was the Chief Financial Officer of Rodman & Renshaw Capital Group, Inc., a full-service investment bank dedicated to providing corporate finance, strategic advisory, sales and trading and related services to public and private companies across multiple sectors and regions. From March 2003 through March 2008, Mr. Horin was the Managing Director of Accounting Policy and Financial Reporting at Jefferies Group, Inc,, a full-service global investment bank and institutional securities firm focused on growth and middle-market companies and their investors. Prior to his employment at Jefferies Group, Inc., from 2000 to 2003, Mr. Horin was a Senior Manager in KPMG’s Department of Professional Practice in New York, where he advised firm members and clients on technical accounting and risk management matters for a variety of public, international and early growth stage entities. Mr. Horin has a Bachelor of Science degree in Accounting from Baruch College, City University of New York. Mr. Horin is also a Certified Public Accountant.

 

 
 

 

Family Relationships

 

No family relationship has ever existed between any director, executive officer of the Company, and any person contemplated to become such.

 

Related Party Transactions

 

Chord Advisors Agreement

 

Reference is made to the disclosure set forth under Items 1.01 of this Report, which disclosure is incorporated herein by reference.

 

Employment Agreements

 

Cervantes Agreement

 

Reference is made to the disclosure set forth under Items 1.01 of this Report, which disclosure is incorporated herein by reference.

 

Except as disclosed above, the Company has not entered into an employment agreements its officers and directors.

 

Item 9.01 Financial Statements and Exhibits

 

(d)  Exhibits

 

Exhibit No.   Description
     
10.1   Minton Employment Agreement
10.2   Cervantes Employment Agreement
10.3   Chord Advisors Agreement
10.4   Grandview Advisory Agreement
10.5   Pylon Agreement
10.6   Joshua Capital Agreement
16.1   Letter from M&K CPAS, PLLC to the Securities and Exchange Commission dated February 20, 2013.

 

 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: February 20, 2013

 

  STAFFING 360 SOLUTIONS, INC.
     
  By: /s/ Alfonso J. Cervantes
    Alfonso J. Cervantes
    President

 

 

 

 

Staffing 360 Solutions, Inc.

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “ Agreement ”) is made and entered into as of February 15, 2013 by and between Staffing 360 Solutions, Inc . , a Nevada corporation (“ S360 ” or the “ Company ”), and Darren Minton (“ MINTON ”).

 

1) Engagement and Responsibilities

 

a) Upon the terms and subject to the conditions set forth in this Agreement, the Company hereby employs MINTON as Senior Vice President of the Company. MINTON hereby accepts such employment.

 

b) MINTON’s duties and responsibilities shall be those incident to the positions described in Section 1(a) as set forth in the Bylaws of the Company and those which are normally and customarily vested in such offices of a corporation. In addition, MINTON’s duties shall include those duties and services for the Company and its affiliates as the Board shall, in its sole and absolute discretion, from time to time reasonably direct which are not inconsistent with MINTON’s position described in Section 1(a).

 

c) MINTON agrees to devote, on a non-exclusive basis, the necessary time, energy and efforts to the business of the Company and will use his best efforts and abilities faithfully and diligently to promote the Company’s business interests. It is understood between the Company and MINTON that he will devote no less than 15 hours per week in the execution of his duties. For as long as MINTON is employed by the Company, MINTON shall not, directly or indirectly, either as an employee, employer, consultant, agent, investor, principal, partner, stockholder (except as the holder of less than 1% of the issued and outstanding stock of a publicly held corporation), corporate officer or director, or in any other individual or representative capacity, engage or participate in any business that is in competition in any manner whatsoever with the business of the Company, as such businesses are now or hereafter conducted, or any business which the Company contemplates conducting or intends to conduct.

 

2) Definitions

 

Board ” shall mean the Board of Directors of the Company.

 

Disability ,” with respect to MINTON, shall mean that, for physical or mental reasons, MINTON is unable to perform the essential functions of MINTON’s duties under this Agreement for 30 consecutive days, or 60 days during any one six month period. MINTON agrees to submit to a reasonable number of examinations by a medical doctor advising the Company as to whether MINTON shall have suffered a disability and MINTON hereby authorizes the disclosure and release to the Company and its agents and representatives all supporting medical records. If MINTON is not legally competent, MINTON’s legal guardian or duly authorized attorney-in-fact will act in MINTON’s stead for the purposes of submitting MINTON to the examinations, and providing the authorization of disclosure.

 

 

Effective Date ” shall mean on completion of the first acquisition of a temporary staffing company by S360 and contemporaneous financing.

 

 
 

 

For Cause ” shall mean, in the context of a basis for termination of MINTON’s employment with the Company, that:

 

a) MINTON breaches any obligation, duty or agreement under this Agreement, which breach is not cured or corrected within 15 days of written notice thereof from the Company (except for breaches of Sections 1(c), 6 or 7 of this Agreement, which cannot be cured and for which the Company need not give any opportunity to cure); or

 

b) MINTON is grossly negligent in the performance of services to the Company, or commits any act of personal dishonesty, fraud, embezzlement, breach of fiduciary duty or trust against the Company; or

 

c) MINTON is indicted for, or convicted of, or pleads guilty or nolo contendere with respect to, theft, fraud, a crime involving moral turpitude, or a felony under federal or applicable state law; or

 

d) MINTON commits continued and repeated substantive violations of specific written directions of the Board, which directions are consistent with this Agreement and MINTON’s position as an executive officer, or continued and repeated substantive failure to perform duties assigned by or pursuant to this Agreement; or

 

e) MINTON continues to neglect his duties after receipt of notice thereof from the Company (and the Company need give such notice only once).

 

Person ” shall mean an individual or a partnership, corporation, trust, association, Limited Liability Company, governmental authority or other entity.

 

Portfolio Company ” shall mean any person which has engaged the Company for the provision of services.

 

Term ” shall mean the period commencing on the Effective Date and ending at the close of business on the business day immediately preceding the eighteenth month anniversary of the Effective Date.

 

3) Compensation and Benefits

 

For as long as MINTON shall be employed by the Company, MINTON shall receive the compensation and benefits set forth in this Section 3.

 

 

(a) Salary . Compensation will commence at an annualized salary of $48,000 beginning upon the Effective Date. The base salary shall be payable in $4,000 installments on the last day of each month.

 

(b) Expense Reimbursement . MINTON shall be entitled to reimbursement from the Company for the reasonable out-of-pocket costs and expenses which MINTON incurs in connection with the performance of MINTON’s duties and obligations under this Agreement in a manner consistent with the Company’s practices and policies therefore.

 

(c) Vacation. MINTON shall be entitled to three weeks paid vacation per year (based on the Effective Date).

 

 
 

 

(d) Disability . In the event of any Disability MINTON shall receive the compensation and benefits specified herein for 30 days. Such compensation and benefits shall be received at the end of the disability.

 

(e) Withholding . The Company may deduct from any compensation payable to MINTON (including payments made pursuant to Section 5 of this Agreement in connection with or following termination of employment) amounts it believes are required to be withheld under federal and state law, including applicable federal, state and/or local income tax withholding, old-age and survivors’ and other social security payments, state disability and other insurance premiums and payments.

 

(f) Key Man Insurance. The Company may, at its own expense, purchase a key man life insurance policy at an amount to be determined naming the Company as a beneficiary. At the time that MINTON is no longer employed by the Company, MINTON will have the right to retain the policy. It is expressly understood between the Company and MINTON that the Company will not have any further obligation with respect to the policy following MINTON’s employment by the Company.

 

(g) Restricted Common Stock. In consideration of the services to be rendered by MINTON, MINTON shall be entitled to receive as compensation 20,000 shares of the Company’s common stock. The shares of common stock of the Company shall be issued at the Effective Date. MINTON acknowledges that the common stock has not been registered under the Securities Act of 1933, as amended, or under any state securities laws. MINTON is familiar with the provisions of the Securities Act and Rule 144 thereunder and understands that restrictions governing sale apply.

 

4) Term of Employment

 

MINTON’s employment pursuant to this Agreement shall commence on the Effective Date, as defined in Section 2 and shall terminate on the earliest to occur of the following:

 

a) upon the date set forth in a written notice of termination from MINTON to the Company (which date shall be at least four months after the effective date and at least 30 days after the delivery of that notice); provided, however , that in the event MINTON delivers such notice to the Company, the Company shall have the right to accelerate such termination by written notice thereof to MINTON (and such termination by the Company shall be deemed to be a termination of employment pursuant to this Section 4(a), and not a termination pursuant to Section 4(d) or 4(e) hereof);

 

b) upon the death of MINTON;

 

c) upon delivery to MINTON of written notice of termination by the Company if MINTON shall suffer a Disability;

 

d) upon delivery to MINTON of written notice of termination by the Company For Cause;

 

e) upon delivery to MINTON of written notice of termination by the Company Without Cause; or

 

 

5) Confidentiality .

 

 
 

 

MINTON agrees not to disclose or use at any time (whether during or after MINTON’s employment with the Company) for MINTON’s own benefit or purposes or the benefit or purposes of any other Person any databases, trade secrets, proprietary data, or other confidential information, development programs, costs, marketing, trading, investment, sales activities, promotion, credit and financial data, financial methods, plans, or the business and affairs of the Company generally, provided that the foregoing shall not apply to information which is not unique to the Company or which is generally known to the industry or the public other than as a result of MINTON’s employment with the company. MINTON agrees that upon termination of his employment with the Company for any reason, he will return to the Company immediately all memoranda, books, papers, plans, information, letters and other data, and all copies thereof or therefrom, in any way relating to the business of the Company and/or any Portfolio Company, except that he may retain personal notes, notebooks, diaries and addresses and phone numbers. MINTON further agrees that he will not retain or use for his account at any time any trade names, trademark or other proprietary business designation used or owned in connection with the business of the Company.

 

6) Miscellaneous

 

a) Notices .  All notices, requests, demands and other communications (collectively, “ Notices ”) given pursuant to this Agreement shall be in writing, and shall be delivered by personal service, courier, facsimile transmission or by United States first class, registered or certified mail, addressed to the following addresses:

 

If to the Company, to:

 

Staffing 360 Solutions, Inc.

Alfonso J. Cervantes, President

641 Lexington Avenue, Suite 1526

New York, NY 10022

 

If to MINTON, to:

 

Darren Minton

260 W 54 th Street, Apt. 28J

New York, NY 10019

 

Any Notice, other than a Notice sent by registered or certified mail, shall be effective when received; a Notice sent by registered or certified mail, postage prepaid return receipt requested, shall be effective on the earlier of when received or the third day following deposit in the United States mails. Any party may from time to time change its address for further Notices hereunder by giving notice to the other party in the manner prescribed in this Section.

 

b) Entire Agreement .  This Agreement contains the sole and entire agreement and understanding of the parties with respect to the entire subject matter of this Agreement, and any and all prior discussions, negotiations, commitments and understandings, whether oral or otherwise, related to the subject matter of this Agreement are hereby merged herein.  Without limiting the foregoing, this Agreement supersedes those certain term sheets and/or agreements dated prior to date hereof. No representations, oral or otherwise, express or implied, other than those contained in this Agreement have been relied upon by any party to this Agreement.

 

c) Severability . In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law.

 

 
 

 

d) Governing Law .  This Agreement has been made and entered into in the State of New York and shall be construed in accordance with the laws of the State of New York.

 

e) Captions .  The various captions of this Agreement are for reference only and shall not be considered or referred to in resolving questions of interpretation of this Agreement.

 

f) Counterparts .  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

 

g) Attorneys’ Fees .  If any action or proceeding is brought to enforce or interpret any provision of this Agreement, the prevailing party shall be entitled to recover as an element of its costs, and not its damages, its reasonable attorneys’ fees, costs and expenses.  The prevailing party is the party who is entitled to recover its costs in the action or proceeding.  A party not entitled to recover its costs may not recover attorneys’ fees.  No sum for attorneys’ fees shall be counted in calculating the amount of a judgment for purposes of determining whether a party is entitled to recover its costs or attorneys’ fees.

 

In Witness Whereof, the parties have executed this Agreement as of the date first above written.

 

Staffing 360 Solutions, Inc.

 

By: _ /a/ Allan Hartley ______________

 

Its: CEO

 

 

/s/ Darren Minton _________________

Darren Minton

 

 

 

 

Staffing 360 Solutions, Inc.

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “ Agreement ”) is made and entered into as of February 15, 2013 by and between Staffing 360 Solutions, Inc . , a Nevada corporation (“ S360 ” or the “ Company ”), and Alfonso J. Cervantes (“ CERVANTES ”).

 

1) Engagement and Responsibilities

 

a) Upon the terms and subject to the conditions set forth in this Agreement, the Company hereby employs CERVANTES as President of the Company. CERVANTES hereby accepts such employment.

 

b) Cervantes’ duties and responsibilities shall be those incident to the positions described in Section 1(a) as set forth in the Bylaws of the Company and those which are normally and customarily vested in such offices of a corporation. In addition, Cervantes’ duties shall include those duties and services for the Company and its affiliates as the Board shall, in its sole and absolute discretion, from time to time reasonably direct which are not inconsistent with Cervantes’ position described in Section 1(a).

 

c) CERVANTES agrees to devote, on a non-exclusive basis, the necessary time, energy and efforts to the business of the Company and will use his best efforts and abilities faithfully and diligently to promote the Company’s business interests. It is understood between the Company and CERVANTES that he will devote no less than 20 hours per week in the execution of his duties. For as long as CERVANTES is employed by the Company, CERVANTES shall not, directly or indirectly, either as an employee, employer, consultant, agent, investor, principal, partner, stockholder (except as the holder of less than 1% of the issued and outstanding stock of a publicly held corporation), corporate officer or director, or in any other individual or representative capacity, engage or participate in any business that is in competition in any manner whatsoever with the business of the Company, as such businesses are now or hereafter conducted, or any business which the Company contemplates conducting or intends to conduct.

 

2) Definitions

 

Board ” shall mean the Board of Directors of the Company.

 

Disability ,” with respect to CERVANTES, shall mean that, for physical or mental reasons, CERVANTES is unable to perform the essential functions of Cervantes’ duties under this Agreement for 30 consecutive days, or 60 days during any one six month period. CERVANTES agrees to submit to a reasonable number of examinations by a medical doctor advising the Company as to whether CERVANTES shall have suffered a disability and CERVANTES hereby authorizes the disclosure and release to the Company and its agents and representatives all supporting medical records. If CERVANTES is not legally competent, Cervantes’ legal guardian or duly authorized attorney-in-fact will act in Cervantes’ stead for the purposes of submitting CERVANTES to the examinations, and providing the authorization of disclosure.

 

 

Effective Date ” shall mean on completion of the initial acquisition of a temporary staffing company by S360 and contemporaneous financing.

 

 
 

 

For Cause ” shall mean, in the context of a basis for termination of Cervantes’ employment with the Company, that:

 

a) CERVANTES breaches any obligation, duty or agreement under this Agreement, which breach is not cured or corrected within 15 days of written notice thereof from the Company (except for breaches of Sections 1(c), 6 or 7 of this Agreement, which cannot be cured and for which the Company need not give any opportunity to cure); or

 

b) CERVANTES is grossly negligent in the performance of services to the Company, or commits any act of personal dishonesty, fraud, embezzlement, breach of fiduciary duty or trust against the Company; or

 

c) CERVANTES is indicted for, or convicted of, or pleads guilty or nolo contendere with respect to, theft, fraud, a crime involving moral turpitude, or a felony under federal or applicable state law; or

 

d) CERVANTES commits continued and repeated substantive violations of specific written directions of the Board, which directions are consistent with this Agreement and Cervantes’ position as an executive officer, or continued and repeated substantive failure to perform duties assigned by or pursuant to this Agreement; or

 

e) CERVANTES continues to neglect his duties after receipt of notice thereof from the Company (and the Company need give such notice only once).

 

Person ” shall mean an individual or a partnership, corporation, trust, association, Limited Liability Company, governmental authority or other entity.

 

Portfolio Company ” shall mean any person which has engaged the Company for the provision of services.

 

Term ” shall mean the period commencing on the Effective Date and ending at the close of business on the business day immediately preceding the eighteenth month anniversary of the Effective Date.

 

3) Compensation and Benefits

 

For as long as CERVANTES shall be employed by the Company, CERVANTES shall receive the compensation and benefits set forth in this Section 3.

 

 

(a) Salary . Compensation will commence at an annualized salary of $120,000 beginning upon the Effective Date. The base salary shall be payable in two $5,000 installments on the 15th and first day of each month.

 

(b) Expense Reimbursement . CERVANTES shall be entitled to reimbursement from the Company for the reasonable out-of-pocket costs and expenses which CERVANTES incurs in connection with the performance of Cervantes’ duties and obligations under this Agreement in a manner consistent with the Company’s practices and policies therefore.

 

(c) Vacation . CERVANTES shall be entitled to three weeks paid vacation per year (based on the Effective Date).

 

 
 

 

(d) Disability . In the event of any Disability CERVANTES shall receive the compensation and benefits specified herein for 30 days. Such compensation and benefits shall be received at the end of the disability.

 

(e) Withholding . At Cervantes’ election, the Company may deduct from any compensation payable to CERVANTES (including payments made pursuant to Section 5 of this Agreement in connection with or following termination of employment) amounts it believes are required to be withheld under federal and state law, including applicable federal, state and/or local income tax withholding, old-age and survivors’ and other social security payments, state disability and other insurance premiums and payments.

 

(f) Key Man Insurance. The Company may, at its own expense, purchase a key man life insurance policy at an amount to be determined naming the Company as a beneficiary. At the time that CERVANTES is no longer employed by the Company, CERVANTES will have the right to retain the policy. It is expressly understood between the Company and CERVANTES that the Company will not have any further obligation with respect to the policy following Cervantes’ employment by the Company.

 

4) Term of Employment

 

Cervantes’ employment pursuant to this Agreement shall commence on the Effective Date, as defined in Section 2 and shall terminate on the earliest to occur of the following:

 

a) upon the date set forth in a written notice of termination from CERVANTES to the Company (which date shall be at least four months after the effective date and at least 30 days after the delivery of that notice); provided, however , that in the event CERVANTES delivers such notice to the Company, the Company shall have the right to accelerate such termination by written notice thereof to CERVANTES (and such termination by the Company shall be deemed to be a termination of employment pursuant to this Section 4(a), and not a termination pursuant to Section 4(d) or 4(e) hereof);

 

b) upon the death of CERVANTES;

 

c) upon delivery to CERVANTES of written notice of termination by the Company if CERVANTES shall suffer a Disability;

 

d) upon delivery to CERVANTES of written notice of termination by the Company For Cause;

 

e) upon delivery to CERVANTES of written notice of termination by the Company Without Cause; or

 

5) Confidentiality .

 

CERVANTES agrees not to disclose or use at any time (whether during or after Cervantes’ employment with the Company) for Cervantes’ own benefit or purposes or the benefit or purposes of any other Person any databases, trade secrets, proprietary data, or other confidential information, development programs, costs, marketing, trading, investment, sales activities, promotion, credit and financial data, financial methods, plans, or the business and affairs of the Company generally, provided that the foregoing shall not apply to information which is not unique to the Company or which is generally known to the industry or the public other than as a result of Cervantes’ employment with the company. CERVANTES agrees that upon termination of his employment with the Company for any reason, he will return to the Company immediately all memoranda, books, papers, plans, information, letters and other data, and all copies thereof or therefrom, in any way relating to the business of the Company and/or any Portfolio Company, except that he may retain personal notes, notebooks, diaries and addresses and phone numbers. CERVANTES further agrees that he will not retain or use for his account at any time any trade names, trademark or other proprietary business designation used or owned in connection with the business of the Company.

 

 
 

 

6) Miscellaneous

 

a) Notices .  All notices, requests, demands and other communications (collectively, “ Notices ”) given pursuant to this Agreement shall be in writing, and shall be delivered by personal service, courier, facsimile transmission or by United States first class, registered or certified mail, addressed to the following addresses:

 

If to the Company, to:

 

Staffing 360 Solutions, Inc.

Alfonso J. Cervantes, President

641 Lexington Avenue, Suite 1526

New York, NY 10022

 

If to CERVANTES, to:

 

Alfonso J. Cervantes

641 Lexington Avenue, Suite 1526

New York, NY 10022

 

Any Notice, other than a Notice sent by registered or certified mail, shall be effective when received; a Notice sent by registered or certified mail, postage prepaid return receipt requested, shall be effective on the earlier of when received or the third day following deposit in the United States mails. Any party may from time to time change its address for further Notices hereunder by giving notice to the other party in the manner prescribed in this Section.

 

b) Entire Agreement .  This Agreement contains the sole and entire agreement and understanding of the parties with respect to the entire subject matter of this Agreement, and any and all prior discussions, negotiations, commitments and understandings, whether oral or otherwise, related to the subject matter of this Agreement are hereby merged herein.  Without limiting the foregoing, this Agreement supersedes those certain term sheets and/or agreements dated prior to date hereof. No representations, oral or otherwise, express or implied, other than those contained in this Agreement have been relied upon by any party to this Agreement.

 

c) Severability . In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law.

 

d) Governing Law .  This Agreement has been made and entered into in the State of New York and shall be construed in accordance with the laws of the State of New York.

 

e) Captions .  The various captions of this Agreement are for reference only and shall not be considered or referred to in resolving questions of interpretation of this Agreement.

 

f) Counterparts .  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

 

 
 

 

g) Attorneys’ Fees .  If any action or proceeding is brought to enforce or interpret any provision of this Agreement, the prevailing party shall be entitled to recover as an element of its costs, and not its damages, its reasonable attorneys’ fees, costs and expenses.  The prevailing party is the party who is entitled to recover its costs in the action or proceeding.  A party not entitled to recover its costs may not recover attorneys’ fees.  No sum for attorneys’ fees shall be counted in calculating the amount of a judgment for purposes of determining whether a party is entitled to recover its costs or attorneys’ fees.

 

In Witness Whereof, the parties have executed this Agreement as of the date first above written.

 

Staffing 360 Solutions, Inc.

 

By: /s/ Allan Hartley _______________

 

Its: CEO

 

 

_ /s/ Alfonso J. Cervantes ___________

Alfonso J. Cervantes

 

 

 

 

 

 

 

 

CHORD ADVISORS, LLC

LETTER OF AGREEMENT

Date: February 14, 2013

 

Section 1. Services to be Rendered . The purpose of this letter is to set forth the terms and conditions on which Chord Advisors, LLC (“Chord”) agrees to provide Staffing 360 Solutions, Inc. (the “ Company ”) comprehensive outsourced accounting solutions. These services may include, but are not limited to, all items listed in “Addendum A.” The Company represents and warrants that it will provide on a timely basis any information requested by Chord which is necessary to perform such services and further represents and warrants that such information shall be accurate.

 

Section 2. Engagement Period . Unless sooner terminated as provided herein, the term of this agreement (the “ Engagement Period ”) shall commence on February 1, 2013 and shall continue for a period of twelve (12) calendar months. Following expiration of the initial Engagement Period, this agreement shall be automatically renewed for successive Engagement Periods of 12 months each unless either party shall give the other written notice of its intent not to renew this agreement no later than 30 days prior to the expiration of any Engagement Period hereunder. The Company represents that it is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and is duly qualified as a foreign corporation and in good standing in all jurisdictions in which the nature of its activities requires such qualification. The Company further represents to Chord: (1) that it has full power and authority to carry on its business as presently or proposed to be conducted and to enter into and perform its obligations under this Agreement; (2) that this Agreement has been duly authorized by all necessary corporate actions; and (3) that this Agreement constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms (except as such enforcement may be limited by bankruptcy, creditors’ rights laws or general principles of equity).

 

Section 3. Fees . (a) The Company shall pay to Chord for its services hereunder an advisory fee (the “ Advisory Fee ”) of $ $ 6,250.00 per month for CFO Services and $5,000.00 per month in Controller/Back-Office Services beginning February 14, 2013 ; provided , that the amount of such Advisory Fee shall be subject to change by the mutual agreement of the parties at any time after expiration of the initial twelve (12) month Engagement Period. Advisory Fees shall be payable on or before the 30th day of each calendar month which occurs during the Engagement Period. In the event that a partial month shall occur during the Engagement Period, then the amount of the Advisory Fee for such month shall be prorated based upon the number of days in such month that occur during the Engagement Period. In addition, the Company shall issue $2,500 per month of Common Stock at the closing Fair Value at the end of the month.

 

Confidential Page 1

 
 

 

 

 

 

Section 4. Expenses . In addition to all other fees payable to Chord hereunder, the Company hereby agrees to reimburse Chord for all reasonable out-of-pocket expenses incurred in connection with the performance of services hereunder. No individual expenses over $100 per month will be expended without the prior written approval of the Company.

 

Section 5. Indemnification . Each of the Company and Chord agrees to defend, indemnify and hold the other and its respective affiliates, stockholders, directors officers, agents, employees, successors and assigns (each an " Indemnified Person ") harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind whatsoever (including, without limitation, reasonable attorneys' fees) which arise from the Company's or Chord's (as the case may be) breach of its obligations hereunder or any representation or warranty made by it herein. It is further agreed that the foregoing indemnity shall be in addition to any rights that either party may have at common law or otherwise, including, but not limited to, any right to contribution.

 

Section 6. Termination of Agreement . (a) Subject to paragraph (b) below, either party may terminate this Agreement and Chord’s engagement hereunder, with or without cause, immediately upon written notice given to the other party at any time during the Engagement Period hereunder. In such event, all compensation accrued to Chord prior to such cancellation, whether in the form of Advisory Fees, reimbursement for expenses or otherwise, will become due and payable promptly upon such termination and Chord shall be relieved of any and all further obligation to provide any services hereunder.

(b) Notwithstanding anything to the contrary herein contained, Sections 4, 5, 6, 7, 8, 9, 10 and 11 shall survive any termination or breach of this agreement by either party.

 

Section 7. Severability . In case any provision of this letter agreement shall be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired thereby.

 

 

Section 8. Consent to Jurisdiction . This agreement shall be governed and construed in accordance with the laws of the State of New York without regard to conflicts of laws principles. The parties further consent to the exclusive jurisdiction of the State and Federal courts located within the City, County and State of New York to resolve any dispute arising under this Agreement, and waive any defense to such jurisdiction based upon inconvenient forum.

 

Section 9. Other Services . If the Company desires additional services not provided for in this agreement, any such additional services shall be covered by a separate agreement between the parties hereto.

 

Confidential Page 2

 
 

 

 

 

 

Section 10. Entire Agreement . This letter agreement contains the entire agreement of the Company and Chord, and supersedes any and all prior discussions and agreements, whether oral or written, with respect to the matters addressed herein.

 

Section 11. Counterparts . This letter agreement may executed in two or more counterparts, each of which shall be considered an original and all of which, taken together, shall be considered as one and the same instrument.

 

Please evidence your acceptance of the provisions of this letter by signing below and returning a copy to Chord Advisors, LLC.

 

Very truly yours,

 

 

_____ /s/ David Horin ______________________

David Horin

President Chord Advisors, LLC

 

 

ACCEPTED AND AGREED

AS OF THE DATE FIRST ABOVE WRITTEN:

 

 

By: _ /s/ Allan Hartley ___________________________

Name: Allan Hartley

Title: President

 

 

Confidential Page 3

 
 

 

 

 

 

ADDENDUM “A”

 

 

Chord will provide senior financial leadership and perform the following functions:

 

Business analysis and planning
System selection and implementation
Financial process improvement
Full service bookkeeping
General ledger accounting
Account reconciliation
Accounts receivable
Accounts payable
Payroll and related tax reporting
Management reporting
Advise on accounting for complex transactions, including those featuring options, warrants derivatives and other forms of equity enhancements
Document and implement new and existing accounting policies
Respond to SEC Comment Letters
Audit committee support
Drafting documents such as 10-K's, 10-Q's and registration statements
Assistance with earnings releases and deal and non-deal roadshows

 

 

Confidential Page 4

 

 

 

 

 

 

PERSONAL AND CONFIDENTIAL

 

February 15, 2013

 

A.J. Cervantes

360 Solutions, Inc.

641 Lexington Avenue

Suite 1526

New York, NY 10022

 

Mr. Cervantes:

 

This letter agreement confirms our understanding of the engagement of Grandview Capital Partners, Inc. (“Grandview”) by 360 Solutions, Inc.(together with its subsidiaries and affiliates, the “Company”) to act as an advisor to the Company.

 

1.           Services. Grandview will provide you with advisory services, and Grandview accepts such retention on the terms and conditions set forth in this Agreement. In such capacity, Grandview shall: (i) assist the Company in identifying, screening, analyzing and ranking potential merger or acquisition partners or targets; (ii) advise the Company as to strategy and tactics for discussions and negotiations with potential merger or acquisition partners or targets, and, if requested by the Company, participate in such discussions and negotiations; (iii) advise the Company with respect to the structure, form, terms and timing of the merger or acquisition; (iv) assist the Company in preparing the required merger or acquisition documents (including a letter of intent, information memorandum and definitive agreement); and (v) provide such other customary merger related services upon which the parties may mutually agree. It is expressly agreed that this Agreement does not constitute an agreement, commitment, covenant or representation by Grandview to purchase any securities of the Company or introduce the Company to any third party financing sources, whether debt, equity or otherwise. It is understood and agreed that Grandview’s services hereunder will not include providing any legal, accounting, regulatory or tax advice or developing any tax strategies for the Company. If you should request us to provide additional services not otherwise contemplated by this letter agreement, the Company and Grandview will enter into an additional letter agreement which will set forth the nature and scope of the services, appropriate compensation and other customary matters, as mutually agreed upon by the Company and Grandview.

 

2.           Information . In connection with Grandview’s activities hereunder, the Company will cooperate with Grandview and furnish Grandview upon request with all information regarding the business, operations, properties, financial condition, management and prospects of the Company (all such information so furnished being the “ Information ”) which Grandview deems appropriate and will provide Grandview with access to the Company’s officers, directors, employees, independent accountants and legal counsel. The Company represents and warrants to Grandview that all Information made available to Grandview hereunder will be complete and correct in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances under which such statements are or will be made. The Company further represents and warrants that any projections and other forward-looking information provided by it to Grandview will have been prepared in good faith and will be based upon assumptions which, in light of the circumstances under which they are made, are reasonable. The Company recognizes and confirms that Grandview: (i) will use and rely primarily on the Information and on information available from generally recognized public sources in performing the services contemplated by this Agreement without having independently verified the same; (ii) does not assume responsibility for the accuracy or completeness of the Information and such other information; and (iii) will not make an appraisal of any assets of the Company or the Company generally. Any advice rendered by Grandview pursuant to this Agreement may not be disclosed publicly without Grandview’s prior written consent.

 

 
 

 

3.           Compensation . In connection with this engagement, the Company agrees to pay us

 

(a) Compensation will commence at a rate of $10,000 per month beginning upon the execution of this agreement and will increase to $15,000 per month on completion of the first acquisition of a temporary staffing company by S360 and contemporaneous financing. If the commencement date is not on the first day of the month; the Company shall pay a pro rata share of the monthly fee for the remainder of such month plus the monthly fee for the following month. Subsequent payments shall be due and payable on the first day on each month thereafter.

 

(b) The Company will further Compensate Grandview as its exclusive buy side advisor to locate and facilitate qualified businesses or companies (each, a “Prospect” ) that may desire to have the Company provide financing, (debt or equity) or fund the acquisition of certain of the stock or assets of such Prospect (such transactions described above individually or together, a “Transaction” ).

 

In the event that the Company enters into any Transaction as defined above or any Transaction involving a sale of the Corporation or the sale of any substantial/material assets within 36 months of the date of this letter, Grandview will be paid a fee based on Transaction Value (as defined below) as follows:

 

10% of the Transaction Value up to $1,000,000 plus

5.0% of the Transaction Value from $1,000,001 to $2,000,000 plus

4.0% of the Transaction Value from $2,000,001 to $3,000,000 plus

3.0% of the Transaction Value from $3,000,000 to $4,000,000 plus

2.0% of the Transaction Value above $4,000,000 $5,000,000 plus

1.0% of the Transaction Value above $5,000,000

 

The “Transaction Value” shall mean (i) for any Prospect in which the Company and/or its controlled subsidiaries will acquire more than a majority of the ownership of such Prospect or substantially all of the assets of such Prospect, the aggregate purchase price actually paid to a Prospect or its owners introduced by Grandview, by the Company and investment partners for such equity or assets as full compensation for Grandview’s services under this agreement or (ii) for any Prospect in which the Company and/or its Affiliates will acquire less than a majority of the ownership or less than substantially all of the assets of such Prospect or not for any reason directly control the Board of Directors, the Board of Managers or similar governing body of Prospect or its successor (or the acquisition entity used to consummate a Transaction that involves a sale/purchase of assets), the amount paid to such Prospect or its owners by the Company and/or its controlled subsidiaries. All fees shall be paid in like kind to the consideration paid to the Sellers as part of the transaction. Therefore in the event that the consideration shall be paid either in full or partially in the Company common stock then the Grand shall receive the fees set forth above in common stock issued at the same valuation as the common stock issued in the transaction. All cash fees are to be paid in US funds by bank draft or wire transfer at the closing and funding of a Transaction; provided, however, that in the event the Transaction includes any contingent consideration, earn out, royalty, or deferred purchase price, then the Company shall pay to Grand such portion of the fee when and if such contingent consideration is paid to Prospect or its owners. Grand is responsible for paying all taxes on any monies received relating to the terms of this Agreement.

 

 
 

 

For any Transaction in which the Prospect has retained a sell-side advisor or is engaging other buy-side intermediaries, the Company agrees to pay Grandview the fee referenced in in section 3 (b) above less any compensation that Grandview receives directly from the Prospect or an agent of the Prospect.

 

“Transaction Value” is defined as the total of all transaction consideration including, but not limited to cash, notes, warrants, options, stock, management agreements, employment compensation and signing bonuses in excess of the industry standard for the job actually performed, covenants not to compete, earn-outs, royalties, debt assumption, and any other valuable consideration given in exchange for securities or assets of the Company;

 

(c) The Company also agrees to periodically reimburse Grandview promptly when invoiced for all of its reasonable expenses (including reasonable fees and expenses of its legal counsel) in connection with the performance of its services hereunder, regardless of whether a Transaction occurs. Upon termination of this letter agreement or completion of a Transaction, the Company agrees to pay promptly in cash any unreimbursed expenses that have accrued as of such date. To the extent officers and employees of Grandview assist in, or provide testimony in trial or deposition for any action, suit or proceeding relating to a Transaction or our engagement hereunder, the Company will pay Grandview a per diem charge for the services of such officers and reasonable fees and expenses of legal counsel in connection with such services in an amount to be mutually agreed upon by the Company and Grandview prior to such assistance.

 

4.           Term . This engagement will commence on the date of this letter agreement and terminate on the earlier of (i) Eighteen Months from the date of this agreement, which such term may be renewed or extended by the mutual written agreement of the parties or (ii) 30 days from the date on which a party receives written notice from the other party of termination of this engagement. Notwithstanding the foregoing, the Company agrees that the provisions relating to the payment of fees, reimbursement of expenses, indemnification and contribution, independent contractor, conflicts, confidentiality and waiver of the right to trial by jury will survive any such termination.

 

5.           Indemnification . As Grandview will be acting on your behalf, you agree to indemnify Grandview and certain related parties in the manner set forth in Annex A which is attached and incorporated by reference in its entirety to this letter agreement, the provisions of which are hereby acknowledged by the Company.

 

6.           Use of Information . The Company will furnish (or will use its best efforts to cause other potential parties to the Transaction to furnish) to Grandview such information as Grandview requests for purposes of performing services under this letter agreement (the “Information”) and will provide Grandview with access to the Company’s officers, directors, employees, independent accountants and legal counsel. The Company hereby agrees and represents that all Information relating to the Company furnished to Grandview will be accurate and complete in all material respects at the time provided, and that, if the Company is aware of any Information becoming materially inaccurate, incomplete or misleading during the engagement hereunder, the Company will promptly advise Grandview. The Company further represents and warrants that any projections and other forward-looking information provided by it to Grandview will have been prepared in good faith and will be based upon assumptions which, in light of the circumstances under which they are made, are reasonable. The Company recognizes and confirms that Grandview: (i) will use and rely primarily on the Information and on information available from generally recognized public sources in performing the services contemplated by this Agreement without having independently verified the same; (ii) does not assume responsibility for the accuracy or completeness of the Information and such other information; and (iii) will not make an appraisal of any assets of the Company or the Company generally.

 

 
 

 

7.           Independent Contractor . The Company acknowledges that in performing its services, Grandview is acting as an independent contractor, and not as a fiduciary, agent or otherwise, to the Company or any other person. The Company acknowledges that in performing its services hereunder, Grandview shall act solely pursuant to a contractual relationship on an arm's length basis.

 

8.           Confidentiality . The Company further acknowledges that any service, information or advice, including the Opinion, provided by Grandview to the Company in connection with this engagement is for the confidential use of the Board of Directors and senior management of the Company and may not be disclosed or referred to publicly or to any third party, without our prior written consent, which consent will not be unreasonably withheld.

 

Each party to this Agreement shall safeguard and hold confidential from disclosure to unauthorized parties all “Confidential Information” of the other party. For purposes of this Section, the term “Confidential Information” shall mean any and all information which is in any way connected with, derived from or related to the business of a party, including without limitation, any business and financial records, any retail or institutional customer information, computer programs, technical data, investment information, lists, compilations, compositions, programs, plans, devices, descriptions, drawings, methods, techniques, processes, designs, theories concepts or ideas, and any information relating to the pricing or marketing policies, suppliers or customers of a party. Confidential Information shall not include information to the extent such information is: (i) already known to the receiving party free of any restriction at the time obtained, including information in the public domain; (ii) subsequently learned from an independent third party free of restriction; (iii) known through no wrongful act of either party; or (iv) independently developed by one party without reference to information that is confidential. Unless otherwise required by applicable law or as requested or required by any regulatory or governmental authority (whether or not such request or requirements has the force of law), each party to this Agreement agree not to disclose the terms and conditions of this Agreement nor any Confidential Information made available to it pursuant to the terms of this Agreement, provided, however, that this Agreement may be disclosed to any auditors, legal counsel and rating agencies and any other entities to whom disclosure is required.

 

Without limiting the generality of the foregoing, each party agrees to comply with the other party's then current privacy policies, as the same may be amended from time to time, with respect to customer information. Each party agrees upon request to provide the other party with a copy of the most current privacy policies, or any changes thereto, at the same time that such privacy policies or changes are disseminated to the public.

 

9.           Conflicts . The Company acknowledges that Grandview and its affiliates may have and may continue to have investment banking and other relationships with parties other than the Company pursuant to which Grandview may acquire information of interest to the Company. Grandview shall have no obligation to disclose such information to the Company or to use such information in connection with any contemplated transaction. It is possible that Grandview will represent more than one potential bidder in connection with the financing of the Transaction and you acknowledge that such representation could directly or indirectly impact a Transaction. Despite any conflicts of interest which may exist, the Company hereby agrees to allow Grandview to continue representing the Company and any such other bidders and hereby irrevocably waives and releases and its directors, agents, employees and controlling persons from, any claims or causes of action arising out of any such conflicts of interest whether arising prior to, on or after the date of this letter.

 

10.          Anti-Money Laundering . To help the United States government fight the funding of terrorism and money laundering activities, the federal law of the United States requires all financial institutions to obtain, verify and record information that identifies each person with whom they do business. This means we must ask you for certain identifying information, including a government-issued identification number (e.g., a U.S. taxpayer identification number) and such other information or documents that we consider appropriate to verify your identity, such as certified articles of incorporation, a government-issued business license, a partnership agreement or a trust instrument.

 

 
 

 

11.          Governing Law; Jurisdiction; Waiver of Jury Trial . This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be fully performed therein, without regard to conflicts of law principles. The Company irrevocably submits to the exclusive jurisdiction of any court of the State of New York or the United States District Court for the Southern District of the State of New York for the purpose of any suit, action or other proceeding arising out of this Agreement, or any of the agreements or transactions contemplated hereby, which is brought by or against the Company, and agrees that service of process in connection with any such suit, action or proceeding may be made upon the Company in accordance with Section 19 hereof. The parties hereby expressly waive all rights to trial by jury in any suit, action or proceeding arising under this Agreement.

 

12.          Amendments . This Agreement may not be modified or amended except in a writing duly executed by the parties hereto.

 

13.          Headings . The section headings in this Agreement have been inserted as a matter of reference and are not part of this Agreement.

 

14.          Successors and Assigns . The benefits of this Agreement shall inure to the parties hereto, their respective successors and assigns and to the indemnified parties hereunder and their respective successors and assigns, and the obligations and liabilities assumed in this Agreement shall be binding upon the parties hereto and their respective successors and assigns. Notwithstanding anything contained herein to the contrary, neither Grandview nor the Company shall assign any of its obligations hereunder without the prior written consent of the other party.

 

15.          No Third Party Beneficiaries . This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person or entity not a party hereto, except those entitled to the benefits of the Indemnification Provisions. Without limiting the foregoing, the Company acknowledges and agrees that Grandview is not being engaged as, and shall not be deemed to be, an agent or fiduciary of the Company’s stockholders or creditors or any other person by virtue of this Agreement or the retention of Grandview hereunder, all of which are hereby expressly waived.

 

16.          Waiver . Any waiver or any breach of any of the terms or conditions of this Agreement shall not operate as a waiver of any other breach of such terms or conditions or of any other term or condition, nor shall any failure to insist upon strict performance or to enforce any provision hereof on any one occasion operate as a waiver of such provision or of any other provision hereof or a waiver of the right to insist upon strict performance or to enforce such provision or any other provision on any subsequent occasion. Any waiver must be in writing.

 

17.          Counterparts . This Agreement may be executed in any number of counterparts and by facsimile transmission, each of which shall be deemed to be an original instrument, but all of which taken together shall constitute one and the same agreement. Facsimile signatures shall be deemed to be original signatures for all purposes.

 

18.          Limitation of Liability . Grandview and the Company agree that neither Grandview nor any of its affiliates or any of its/their respective officers, directors, controlling persons (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act of 1934), employees or agents shall have any liability to the Company, its security holders or creditors, or any person asserting claims on behalf of or in the right of the Company (whether direct or indirect, in contract, tort, for an act of negligence or otherwise) for any losses, fees, damages, liabilities, costs, expenses or equitable relief arising out of or relating to this Agreement or the Services detailed herein, except for losses, fees, damages, liabilities, costs or expenses that arise out of or are based on any action of or failure to act by Grandview and that are finally and fully judicially determined to have resulted solely from the gross negligence or willful misconduct of Grandview.

 

 
 

 

19.          Miscellaneous . The Company represents and warrants to Grandview that there are no brokers, representatives or other persons which have an interest in compensation due to Grandview from any Transaction or our services contemplated herein. Grandview may, at its own expense, place announcements or advertisements in financial newspapers and journals describing our services hereunder upon consummation of a Transaction.

 

20.          Notices . All notices provided hereunder shall be given in writing and either delivered personally or by overnight courier service or sent by certified mail, return receipt requested, or by facsimile transmission, if to Grandview, Grandview 300 South Pine Island Road, Suite 240, Plantation, FL 33324 , Attention: Peter Goldstein, Fax No. 954.337.4610, and if to the Company, at 360 Solutions, Inc., 641 Lexington Avenue, Suite 1526, New York, NY 10022. Attention: A.J. Cervantes. Any notice delivered personally or by fax shall be deemed given upon receipt (with confirmation of receipt required in the case of fax transmissions); any notice given by overnight courier shall be deemed given on the next business day after delivery to the overnight courier; and any notice given by certified mail shall be deemed given upon the second business day after certification thereof.

 

[Signature Page Follows]

 

 
 

 

Please confirm our mutual understanding of this engagement by signing and returning to us the enclosed duplicate copy of this letter agreement. We are pleased that you have engaged us to act as your advisor and are looking forward to working with you on this assignment.

 

  Very truly yours,
   
  Grandview Capital Partners, Inc.
   
  /s/ Peter Goldstein
  Name: Peter Goldstein
  Title: President

 

Agreed to and accepted this 15 th Day of February, 2013

 

Staffing 360 Solutions, Inc.

 

/s/ A.J. Cervantes  
Name: A.J. Cervantes  
Title: President  

 

 
 

 

Exhibit A

 

INDEMNIFICATION PROVISIONS

 

Capitalized terms used in this Exhibit shall have the meanings ascribed to such terms in the Agreement to which this Exhibit is attached (the “ Agreement ”).

 

Staffing 360 Solutions, Inc. agrees to indemnify and hold harmless Grandview and each of the other Indemnified Parties (as hereinafter defined) from and against any and all losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements, and any and all actions, suits, proceedings and investigations in respect thereof and any and all legal and other costs, expenses and disbursements in giving testimony or furnishing documents in response to a subpoena or otherwise (including, without limitation, the costs, expenses and disbursements, as and when incurred, of investigating, preparing, pursing or defending any such action, suit, proceeding or investigation (whether or not in connection with litigation in which any Indemnified Party is a party)) (collectively, “ Losses ”), directly or indirectly, caused by, relating to, based upon, arising out of, or in connection with, Grandview’s acting for the Company, including, without limitation, any act or omission by Grandview in connection with its acceptance of or the performance or non-performance of its obligations under the Agreement , any breach by the Company of any representation, warranty, covenant or agreement contained in the Agreement (or in any instrument, document or agreement relating thereto, including any Agency Agreement), or the enforcement by Grandview of its rights under the Agreement or these indemnification provisions, except to the extent that any such Losses are found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from the gross negligence or willful misconduct of the Indemnified Party seeking indemnification hereunder. The Company also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the engagement of Grandview by the Company or for any other reason, except to the extent that any such liability is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from such Indemnified Party’s gross negligence or willful misconduct.

 

These Indemnification Provisions shall extend to the following persons (collectively, the “ Indemnified Parties ”): Grandview, its present and former affiliated entities, managers, members, officers, employees, legal counsel, agents and controlling persons (within the meaning of the federal securities laws), and the officers, directors, partners, stockholders, members, managers, employees, legal counsel, agents and controlling persons of any of them. These indemnification provisions shall be in addition to any liability which the Company may otherwise have to any Indemnified Party.

 

If any action, suit, proceeding or investigation is commenced, as to which an Indemnified Party proposes to demand indemnification, it shall notify the Company with reasonable promptness; provided , however , that any failure by an Indemnified Party to notify the Company shall not relieve the Company from its obligations hereunder. An Indemnified Party shall have the right to retain counsel of its own choice to represent it, and the fees, expenses and disbursements of such counsel shall be borne by the Company. Any such counsel shall, to the extent consistent with its professional responsibilities, cooperate with the Company and any counsel designated by the Company. The Company shall be liable for any settlement of any claim against any Indemnified Party made with the Company’s written consent. The Company shall not, without the prior written consent of Grandview, settle or compromise any claim, or permit a default or consent to the entry of any judgment in respect thereof, unless such settlement, compromise or consent (i) includes, as an unconditional term thereof, the giving by the claimant to all of the Indemnified Parties of an unconditional release from all liability in respect of such claim, and (ii) does not contain any factual or legal admission by or with respect to an Indemnified Party or an adverse statement with respect to the character, professionalism, expertise or reputation of any Indemnified Party or any action or inaction of any Indemnified Party.

 

 
 

 

In order to provide for just and equitable contribution, if a claim for indemnification pursuant to these indemnification provisions is made but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification may not be enforced in such case, even though the express provisions hereof provide for indemnification in such case, then the Company shall contribute to the Losses to which any Indemnified Party may be subject (i) in accordance with the relative benefits received by the Company and its stockholders, subsidiaries and affiliates, on the one hand, and the Indemnified Party, on the other hand, and (ii) if (and only if) the allocation provided in clause (i) of this sentence is not permitted by applicable law, in such proportion as to reflect not only the relative benefits, but also the relative fault of the Company, on the one hand, and the Indemnified Party, on the other hand, in connection with the statements, acts or omissions which resulted in such Losses as well as any relevant equitable considerations. No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable for fraudulent misrepresentation. The relative benefits received (or anticipated to be received) by the Company and it stockholders, subsidiaries and affiliates shall be deemed to be equal to the aggregate consideration payable or receivable by such parties in connection with the transaction or transactions to which the Agreement relates relative to the amount of fees actually received by Grandview in connection with such transaction or transactions. Notwithstanding the foregoing, in no event shall the amount contributed by all Indemnified Parties exceed the amount of fees previously received by Grandview pursuant to the Agreement.

 

Neither termination nor completion of the Agreement shall affect these Indemnification Provisions which shall remain operative and in full force and effect. The Indemnification Provisions shall be binding upon the Company and its successors and assigns and shall inure to the benefit of the Indemnified Parties and their respective successors, assigns, heirs and personal representatives.

 

 

 

 

CORPORATE Services agreement

 

This Corporate Services Agreement (this “Agreement”) is entered into as of this 14 th day of February 2013 by and between Pylon Management, Inc. (the “Consultant”) and Staffing 360 Solutions, Inc., a Nevada corporation (the “Company”).

 

RECITALS

 

A.           Consultant to provide comprehensive turnkey solutions for all back office administrative services and to integrate acquired companies in the staffing industry.

 

B.           Consultant to provide services to assist in identifying potential acquisition targets and also integrating such acquired businesses.

 

C.           Company agrees to retain Consultant to provide the services set forth below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and intending to be legally bound, the parties agree as follows:

 

1.           ENGAGEMENT . Company hereby engages and retains Consultant to perform the Services (as that term is hereinafter defined) and Consultant hereby accepts such appointment on the terms and subject to the conditions hereinafter set forth and agrees to use its best efforts in providing such Services.

 

2.           SERVICES .

 

A.            Staffing Related Consulting Services . Consultant agrees to provide services to Company, which shall include, but not be limited to, the following services (hereafter collectively referred to as the “Services”):

 

(a)          Provide comprehensive back office administrative services to the Company as set forth in Exhibit A for a period of 18 months following the date of this Agreement.

 

(b)          Advise and assist Company in identifying one or more acquisition targets (the “Prospect(s)”) that may have an interest in pursuing an M&A Transaction as defined below, financed either with cash, promissory note or securities of the Company.

 

(c)          Advise Company on technical, legal and accounting due diligence aspects of acquiring related businesses and enable them to make well informed acquisition decisions.

 

 
 

 

(d)          Identify, analyze, structure and/or negotiate sales and/or acquisitions of other businesses, including without limitation, through merger, stock purchase, and any other structure relating to such sales or acquisitions.

 

(e)          Assist the Company in its corporate strategies and operations.

 

(f)          Assist the Company in the implementation of its business plan and capital market strategies.

 

For purposes of this Agreement, an “M&A Transaction” shall mean (i) any merger, consolidation, reorganization or other business combination pursuant to which the businesses of a third party are combined with that of the Company, or (ii) the acquisition, directly or indirectly, by the Company of all or a substantial portion of the assets or common equity of a third party by way of negotiated purchase or otherwise.

 

B.            Best Efforts . Consultant shall devote such full-time and effort, as both parties deem commercially reasonable and adequate under the circumstances, to the affairs of Company, to render the services contemplated by this Agreement. In particular, it shall cause Jeff Raymond to be the primary service contact person on behalf of Consultant.

 

D.            Authority to Engage Other Service Providers . Consultant shall have the authority to engage other third parties to assist it in providing services to Company, and to pay compensation to such third parties, including but not limited to portions of its compensation to be received under this Agreement but only with Company’s prior written consent. Company shall not be responsible for the fees or other charges of such third parties unless and to the extent that Company otherwise agrees with Consultant or such third party in advance in writing.

 

3.           EXPENSES .

 

A.            General Expenses . It is expressly agreed and understood that each party shall be responsible for its own normal and reasonable out-of-pocket expenses which shall include, but shall not be limited to, accounting, long distance communication, and the printing and mailing of materials between the parties hereto; provided, however, that this shall not include expenses incurred by Consultant in connection with the reproduction, printing or special delivery of Business Plans, Corporate Profiles, or other similar documents required by third parties.

 

B.            Travel Expenses . Any travel expenses incurred by Consultant in the rendering of its Services hereunder shall be reimbursed by Company on a monthly basis. This shall only apply to travel that is requested by and approved in advance by Company.

 

4.           COMPENSATION . In consideration for the Services rendered pursuant to this Agreement, Company agrees that Consultant shall be entitled to the following compensation:

 

 
 

 

A.            Monthly Retainer . The parties agree that Consultant has accrued fees from the Company that, as of December 2, 2012, was $30,000. The parties agree that $15,000 of this balance shall be paid upon execution of this agreement and the remaining $15,000 plus any additional accrued amounts shall be paid upon the closing of the first M&A Transaction and concurrent financing. After such time, the Company will pay Consultant the Monthly Retainer earned at the end of each fiscal month thereafter within 15 days of the following month.

 

B.            Equity Compensation . Consultant shall receive equity compensation in the amount of two percent (2%) of the Company’s then outstanding common shares (“Common Shares), upon the closing of the Company’s first M&A Transaction; and equity compensation in the amount of one percent (1%) of the Company’s Common Shares upon the Closing of the Company’s second and third M&A Transactions. All Common Shares issued under this Agreement shall have “piggyback” registration rights at the Company’s election and shall be included in any registration statement filed by the Company with the Securities and Exchange Commission unless the Company’s investment banker objects to the inclusion of such shares on the grounds that it may adversely affect the ability to complete any capital formation after the Common Shares are issued; provided that such shares shall not be included if they may be sold under Rule 144 under the Securities Act of 1933, as amended. All Common Shares shall be issued with a customary restrictive legend which the Company agrees it will remove upon receipt of a valid legal opinion reasonably acceptable to the Company that these Common Shares may be sold in compliance with applicable federal and state securities laws.

 

C.            M&A Compensation . For any M&A Transaction, for which the Consultant introduces a prospect that enters into an M&A Transaction with the Company, the Company agrees to pay Consultant 5% of the first $1 million in Transaction Value, 4% of the second $1 million in Transaction Value, 3% of the third $1 million in Transaction Value plus 1% of the balance of the Transaction Value.

 

The Transaction Value” shall mean (i) for any transaction that in which the Company and/or its controlled subsidiaries will acquire more than a majority of the ownership of such prospect or substantially all of the assets of such Prospect, the aggregate purchase price actually paid to a prospect or its owners introduced by the Consultant, by the Company for such equity or assets as full compensation for Consultant’s services under this agreement or (ii) for any prospect in which the Company will acquire less than a majority of the ownership or less than substantially all of the assets of such prospect or not for any reason directly control the Board of Directors or similar governing body of prospect or its successor (or the acquisition entity used to consummate a Transaction that involves a sale/purchase of assets), the amount paid to such prospect or its owners by the Company and/or its controlled subsidiaries. All fees shall be paid in like kind to the consideration paid to the sellers as part of the transaction. Therefore in the event that the consideration shall be paid either in full or partially in the Company common stock then the Consultant shall receive the fees set forth above in common stock issued at the same valuation as the common stock issued in the transaction.

 

Any fees paid to Consultant as M&A compensation will be reduced by the amount paid to the Consultant in the monthly retainer. All cash fees are to be paid in US funds by bank draft or wire transfer at the closing and funding of a Transaction; provided, however, that in the event the Transaction includes any contingent consideration, earn out, royalty, or deferred purchase price, then the Company shall pay to Consultant such portion of the fee when and if such contingent consideration is paid to Prospect or its owners.

 

 
 

 

D.            Administrative Services . The Company shall pay Consultant for administrative services rendered under Section 2(A)(g), a fee (“Administrative Fee”) equal to 2% of the “Net Sales” of the Company; provided that such fee shall be reduced to 1.5% of the “Net Sales” of the Company once the Company achieves Net Sales of at least $1,000,000 per month. “Net Sales” shall mean, for any period, the aggregate gross amounts invoiced for services of the Company less any good faith estimates of deductions to the extent specifically relating to sales and normal and customary for services of the nature provided by the Company, including without limitation, customary discounts, commissions and credits; taxes applied to services rendered; and allowance for bad debt. The Administrative Fee shall be payable with respect to the Net Sales within the Company’s fiscal quarter within 30 days following the end of such fiscal quarter.

 

5.           INDEPENDENT CONTRACTOR . Consultant shall be, and in all respects shall be deemed to be, an independent contractor in the performance of its duties hereunder, any law of any jurisdiction to the contrary notwithstanding. Consultant shall be solely responsible for making all payments to and on behalf of its employees and subcontractors, including those required by law, and Company shall in no event be liable for any debts or other liabilities of Consultant. Consultant shall not, by reason of this Agreement or the performance of the Services, be or be deemed to be, an employee, agent, partner, co-venturer or controlling person of Company, and Consultant shall have no power to enter into any agreement on behalf of, or otherwise bind Company. Subject to the following sentence, Consultant shall be free to pursue, conduct and carry on for its own account (or for the account of others) such activities, employments, ventures, businesses, and other pursuits as Consultant in its sole, absolute and unfettered discretion, may elect. Notwithstanding the above, no activity, employment, venture, business or other pursuit of Consultant during the term of this Agreement shall conflict with Consultant’s obligations under this Agreement or be adverse to Company’s interests during the term of this Agreement.

 

6.           REPRESENTATIONS, WARRANTIES AND COVENANTS .

 

A.            Corporate Authority. Both Company and Consultant have full legal authority to enter into this Agreement and to perform their respective obligations as provided for in this Agreement. The individuals whose signatures appear below are authorized to sign this Agreement on behalf of their respective corporations.

 

B.            Consultant Ability . Consultant represents and warrants to Company that (a) it has the experience and ability as may be necessary to perform all the required Services with a high standard of quality, (b) all Services will be performed in a professional manner, and (c) all individuals it provides to perform the Services will be appropriately qualified and subject to appropriate agreements concerning the protection of trade secrets and confidential information of Company which such persons may have access to over the term of this Agreement.

 

 
 

 

7.           TERM AND TERMINATION .

 

A.           From the date this Agreement is fully executed, the “Term” of this Agreement shall be eighteen (18) months; provided however that this Agreement may be terminated by either party, with or without cause, upon delivery of a 90 day written notice by one party to the other; provided, however, the termination or expiration of this Agreement shall not in any way limit, modify, or otherwise affect the rights of Consultant to: (i) receive retainers due and reimbursement of expenses incurred by Consultant up to the date of termination, and (ii) be protected by the indemnification rights, waivers and other provisions of this Agreement.

 

B.           In the event of early termination for any reason other than a breach of this Agreement by Consultant, Company shall pay any compensation earned under the terms of this Agreement which has not yet been paid by Company to Consultant, including payment for all merger and acquisition activity as forth in Section 4 (c), and reimburse Consultant for all reasonable and approved expenses incurred by Consultant until the date of termination.

 

8.           CONFIDENTIAL DATA .

 

A.           Consultant shall not divulge to others, any trade secret or confidential information, knowledge, or data concerning or pertaining to the business and affairs of Company, obtained by Consultant as a result of its engagement hereunder, except to the extent necessary for Consultant to perform its services or as otherwise authorized in writing by Company. Consultant represents and warrants that it has established appropriate internal procedures for protecting the trade secrets and confidential information of Company, including, without limitation, restrictions on disclosure of such information to employees and other persons who may be engaged in rendering services to any person, firm or entity which may be a competitor of Company.

 

B.           Company shall not divulge to others, any trade secret or confidential information, knowledge, or data concerning or pertaining to the business and affairs of Consultant, obtained as a result of its engagement hereunder, unless authorized, in writing by Consultant.

 

9.           OTHER MATERIAL TERMS AND CONDITIONS .

 

A.            Indemnity .

 

(a)           Indemnification by Company . Company agrees to indemnify and hold harmless Consultant, its affiliates and their respective officers, directors, managers, partners, shareholders and agents, from any claims, lawsuits or litigation arising from disputes between Company and any third parties other than those arising from the gross negligence or willful misconduct of Consultant.

 

 
 

 

(b)           Indemnification by Consultant . Consultant agrees to indemnify and hold harmless Company from any claims, lawsuits or litigation arising from disputes between Consultant and any third parties other than those arising from the gross negligence or willful misconduct of Company.

 

B.            Governing Law; Waiver of Jury Trial . This agreement shall be governed by and construed in accordance with the laws of the state of New York. The parties hereby consent and submit, to the personal jurisdiction of any state or federal court located in the city and state of New York, New York in connection with any legal action relating to this agreement and waives any right it might have in connection with such action to assert the doctrine of forum non conveniens or to object to venue. Notwithstanding the foregoing, nothing contained in this engagement agreement shall be construed to restrict in any way the right of any party hereto to seek injunctive or similar equitable relief in any court of competent jurisdiction with respect to any threatened breach of the provisions of this agreement or any of the respective parties’ obligations hereunder.          EACH PARTY HEREBY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

C.            Attorneys Fees . In the event any of the parties hereto are required to commence any action or proceeding in order to enforce the obligations of the other parties hereto, then the prevailing party shall be entitled to reasonable attorney fees and costs incurred in any such action.

 

D.            Provisions . Neither termination nor completion of the assignment shall affect the provisions of this Agreement, which shall remain operative and in full force and effect.

 

E.            Additional Instruments . Each of the parties shall from time to time, at the request of others, execute, acknowledge and deliver to the other party any and all further instruments that may be reasonably required to give full effect and force to the provisions of this Agreement.

 

F.            Entire Agreement. Each of the parties hereby covenants that this Agreement, together with the exhibits attached hereto as earlier referenced, is intended to and does contain and embody herein all of the understandings and agreements, both written or oral, of the parties hereby with respect to the subject matter of this Agreement, and that there exists no oral agreement or understanding or expressed or implied liability, whereby the absolute, final and unconditional character and nature of this Agreement shall be in any way invalidated, empowered or affected. There are no representations, warranties or covenants other than those set forth herein.

 

G.            Assignment . This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns; provided, however, that Consultant may not assign any or all of Consultant’s rights or duties hereunder without the prior written consent of the Company.

 

 
 

 

H.            Originals . This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed an original and constitute one and the same agreement. Facsimile copies with signatures shall be given the same legal effect as an original.

 

I.            Notices. Each party shall at all times keep the other informed of its principal place of business if different from that stated herein, and shall promptly notify the other of any change, giving the address of the new place of business or residence. Notices provided under this Agreement shall be provided in writing and delivered by hand, by facsimile transmission or by overnight courier. Notices shall be deemed received upon personal receipt if personally delivered, upon completion of facsimile transmission with electronic evidence of receipt, or upon delivery with evidence of delivery. Notices shall be delivered to the information set forth below the signatures of each party hereto, or to such other address, as a party shall have provided in writing to the other party.

 

J.            Modification and Waiver. A modification or waiver of any of the provisions of this Agreement shall be effective only if made in writing and executed with the same formality as this Agreement. The failure of any party to insist upon strict performance of any of the provisions of this Agreement shall not be construed as a waiver of any subsequent default of the same or similar nature or of any other nature.

 

WHEREOF, the parties hereto have executed this Corporate Services Agreement as of the date first written above.

 

Pylon Management, Inc.   Staffing 360 Solutions, Inc.
     
/s/ Jeff Raymond   /s/ Allan Hartley
By: Jeff Raymond   By: Allan Hartley
Its: Chief Executive Officer   Its: Chief Executive Officer

 

 
 

 

EXHIBIT A

 

ADMINISTRATIVE SERVICES

 

Exhibit A

SCOPE OF SERVICES

 

PAYROLL ADMINSTRATION

· Payroll Processing
· Billing Processing
· Employee- Set-up
· Check Printing
· Direct Deposit
· Invoices – Mail/Electronic
· Payroll Check Reconciliation
· Local, State and Federal Payroll Reports
· Year-end W-2 Forms and 1099’s.
· Quarterly 940 tax reports
· Reimbursement and Deductions
· Wage Garnishments
· Paid Time-off Tracking
· Purchase Order Tracking
· Record Maintenance
· Bonus, Commissions and Variable Pay Plan Processing

 

TAX ADMINISTRATION

· Tax Depository
· Federal Payroll Deposits and Summary
· State Withholding Deposits and Reports
· Social Security (FICA) Tax Filings and Reports
· State Unemployed (SUTA) Tax Filings and Payment and Claims Filing
· State Disability Insurance (SDI) Filing and Reports
· Local, City Taxes – Compliance/Filings

 

WORKERS COMPENSATION

· Negotiate and manage workers compensation policies
· Manage year-end audits from Workers Compensation companies
· Manage risk for company including injury reports, physician referrals and medical care management
· Respond to injured workers and client injuries
· Accident investigation and reporting
· Post accident drug testing
· Back to work policy
· Inspections, reports and data tracking
· Develop and implement safety programs as needed

 

 
 

 

HUMAN RESOURCES

· Monitor hiring process
· Maintaining employment files and records
· Handling employment matters with employees
· Providing employment verifications
· Exit interviews and administering separation process
· Retaining records during the post employment period
· Manage unemployment insurance claims

 

EMPLOYEE BENEFITS

Analyze, select and maintain employee’s benefits for company

· Major medical insurance
· Dental/Vision Insurance
· Supplemental Insurance
· Cafeteria 125 Plans
· 401 (K) Retirement Plans
· Direct Deposit

 

ACCOUNTING

· Set up chart of accounts for each company
· Produce P&L and balance sheet for company
· Produce financial P&L by division
· Manage commission programs
· Bank reconciliation
· Manage cash flow
· Liaison with lender
· Transmit weekly sales to lender
· Manage bank relationship
· Month end claims
· P&L analyses
· Set up companies to do business in multi-states

 

ACCOUNTS RECEIVABLE

· A/R collections
· Collection Notices
· Demand Notices
· Customer A/R Inquiries
· Lender Reconciliation on over 90 invoices
· Posting of payments

 

ACCOUNTS PAYABLE

· A/P aging
· Schedule Payments and Pay
· Verify Invoices
· Handle Lender issues

 

 

 

 

Staffing 360 Solutions, Inc.

 

ADVISORY AGREEMENT

 

THIS ADVISORY (“Agreement”) is made and entered into as of this 15th day of February 2013 (“Effective Date”) by and between Staffing 360 Solutions, Inc ., a publicly held Nevada corporation (“Company”) and Joshua Capital, LLC an Arizona Corporation (“Advisor”).

 

RECITALS

 

WHEREAS , Company desires to obtain independent advisory and consulting services in connection with its business operations; and

 

WHEREAS , Advisor is engaged in the business of providing advisory services and advising companies in connection with their business operations;

 

WHEREAS , Company desires to engage Advisor to perform certain consulting services for it, and Advisor desires to perform consulting services for the Company, subject to the terms and conditions of this Agreement;

 

THEREFORE , for the mutual promises contained herein, the parties hereto agree as follows:

 

AGREEMENT

 

1.           ENGAGEMENT BY ADVISOR .

 

Company hereby engages Advisor and Advisor hereby agrees to hold itself available to render, and to render at the reasonable request of the Company, independent advisory and consulting services for the Company to the best of its ability, upon the terms and conditions hereinafter set forth. Such consulting services shall include, but not be limited to, general consulting advice and performance of services.

 

2.           TERM .

 

The term of this Agreement shall commence on February 4, 2013 and shall continue for a period of 18 months, unless extended in accordance with provisions of this Agreement.

 

3.           COMPENSATION .

 

The aggregate compensation payable during the term pursuant to this Agreement is payable in cash on the following basis:

 

3.1 Compensation will commence at a rate of $10,000 per month beginning upon the execution of this agreement.

 

3.2 Compensation will increase to $15,000 per month on completion of the first acquisition of a temporary staffing company by S360 and contemporaneous financing.

 

4.           INDEPENDENT CONTRACTOR .

 

It is expressly agreed that Advisor is acting as an independent contractor in performing its services hereunder, and this Agreement is not intended to, nor does it create, an employer-employee relationship nor shall it be construed as creating any joint venture or partnership between the Company and Advisor. Advisor shall be responsible for all applicable federal, state and other taxes related to Advisor's consulting fee and Company shall not withhold or pay any such taxes on behalf of Advisor, including without limitation social security, federal, state and other local income taxes. Since Advisor is acting solely as an independent contractor under this Agreement, Advisor shall not be entitled to insurance or other benefits normally provided by Company to its employees. Advisor shall be relying upon the Company to supply accurate data and information without independent verification.

 

Page 1 of 5
 

 

5.           ASSIGNMENT .

 

This Agreement is being entered into in reliance upon and in consideration of the singular skill and qualifications of Advisor. Neither Advisor nor the Company shall voluntarily, or by operation of law assign or otherwise transfer the obligations incurred on its part pursuant to terms of this Agreement without the prior written consent of the other party. Any attempt at assignment or transfer by either party of its obligations hereunder, without such consent, shall be null and void.

 

6.           CONFIDENTIALITY .

 

Advisor recognizes that during the course of Advisor's activities on behalf of the Company, it will accumulate certain proprietary and confidential information and trade secrets used in the Company's business and will have divulged to it certain confidential and proprietary information and trade secrets about the business, operations and prospects of the Company, which constitute valuable business assets of the Company. Advisor hereby acknowledges and agrees that such information, except for information which is in the public domain prior to Advisor’s receipt thereof, or which subsequently becomes part of the public domain other than by Advisor’s breach of a confidentiality obligation, or which Advisor can clearly demonstrate was in its possession prior to receipt thereof from the Company and was developed by Advisor or received by Advisor from a third-party without breach of such third-parties confidentiality obligations with respect thereto (“Proprietary Information”) is confidential and proprietary and constitutes trade secret information and the Proprietary Information belongs to the Company and not to Advisor. Advisor agrees, to the extent not prohibited by law, that it shall not, at any time during or after the Term of this Agreement and one year after the expiration or termination of this Agreement, disclose, divulge or make known, directly or indirectly, to any person, or otherwise use or exploit in any manner any Proprietary Information obtained by Advisor under this Agreement, except in connection with and to the extent required by its performance of its duties hereunder for the Company. Upon termination of this Agreement, Advisor shall deliver to Company all tangible displays and repositories of Proprietary Information.

 

7.           TERMINATION .

 

This Agreement may be terminated on the occurrence of any one of the following events:

 

7.1           The expiration of the Term hereof;

 

7.2           By the Company “with cause,” effective upon delivery of written notice to Advisor given at any time (without any necessity for prior notice) if any of the following shall occur:

(a)          a material breach of this Agreement by Advisor, which breach has not been cured within thirty (30) days after a written demand for such performance is delivered to Advisor by the Company that specifically identifies the manner in which the Company believes that Advisor has breached this Agreement;

 

(b)          any material acts or events which inhibit Advisor from fully performing its responsibilities to the Company in good faith, such as (i) a felony criminal conviction; (ii) any other criminal conviction involving Advisor's lack of honesty or Advisor's moral turpitude; (iii) drug or alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross misconduct.

 

Page 2 of 5
 

 

8.           DISCLAIMER OF RESPONSIBILITY FOR ACTS OF COMPANY .

 

The obligations of the Advisor described in this Agreement consist solely of the furnishing of information and advice to the Company. In no event shall Advisor be required by this Agreement to act as the agent of the Company or otherwise to represent or make decisions for the Company. All final decisions with respect to acts of the Company or its affiliates, whether or not made pursuant to or in reliance on information or advice furnished by Advisor hereunder, shall be those of the Company or such affiliates and Advisor shall under no circumstances be liable for any expenses incurred or loss suffered by the Company as a consequence of such decisions.

 

9.           GENERAL PROVISIONS .

 

9.1            Governing Law and Jurisdiction . This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York. Each of the parties hereto consents to such jurisdiction for the enforcement of this Agreement and matters pertaining to the transaction and activities contemplated hereby.

 

9.2            Attorneys' Fees . In the event a dispute arises with respect to this Agreement, the party prevailing in such dispute shall be entitled to recover all expenses, including, without limitation, reasonable attorneys' fees and expenses incurred in ascertaining such party's rights, in preparing to enforce or in enforcing such party's rights under this Agreement, whether or not it was necessary for such party to institute suit.

 

9.3            Complete Agreement . This Agreement supersedes any and all of the other agreements, either oral or in writing, between the Parties with respect to the subject matter hereof and contains all of the covenants and agreements between the parties with respect to such subject matter in any manner whatsoever. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, oral or otherwise, have been made by any party, or anyone herein, and that no other agreement, statement or promise not contained in this Agreement shall be valid or binding. This Agreement may be changed or amended only by an amendment in writing signed by all of the Parties or their respective successors-in-interest.

 

9.4            Binding . This Agreement shall be binding upon and inure to the benefit of the successors-in-interest, assigns and personal representatives of the respective Parties.

 

9.5            Notices . All notices and other communications provided for or permitted hereunder shall be made by hand delivery, first class mail, telex or telecopied, addressed as follows:

 

Party: Company: Staffing 360 Solutions, Inc.
    A. J. Cervantes
    641 Lexington Avenue
    Suite 1526
    New York, NY 10022
     
  Advisor: Joshua Capital
    Robert Y. Lee

 

All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five (5) business days after deposit in any Post Office in the continental United States or Canada, postage prepaid, if mailed; when answered back, if telexed; and when receipt is acknowledged or confirmed, if telefaxed. No notices may be sent via computer generated electronic mail (so-called “email”).

 

9.6            Unenforceable Terms . Any provision hereof prohibited by law or unenforceable under the law of any jurisdiction in which such provision is applicable shall as to such jurisdiction only be ineffective without affecting any other provision of this Agreement. To the full extent, however, that such applicable law may be waived to the end that this Agreement be deemed to be a valid and binding agreement enforceable in accordance with its terms, the Parties hereto hereby waive such applicable law knowingly and understanding the effect of such waiver.

 

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9.7            Execution in Counterparts . This Agreement may be executed in several counterparts and when so executed shall constitute one agreement binding on all the Parties, notwithstanding that all the Parties are not signatory to the original and same counterpart.

 

9.8            Further Assurance . From time to time each Party will execute and deliver such further instruments and will take such other action as any other Party may reasonably request in order to discharge and perform their obligations and agreements hereunder and to give effect to the intentions expressed in this Agreement.

 

9.9            Incorporation by Reference . All exhibits referred to in this Agreement are incorporated herein in their entirety by such reference.

 

9.10          Miscellaneous Provisions . The various headings and numbers herein and the grouping of provisions of this Agreement into separate articles and paragraphs are for the purpose of convenience only and shall not be considered a party hereof. The language in all parts of this Agreement shall in all cases be construed in accordance with its fair meaning as if repared by all Parties to the Agreement and not strictly for or against any of the Parties.

 

9.11          Applicable Law . This Agreement shall be construed as a whole and in accordance with its fair meaning. This Agreement shall be interpreted in accordance with the laws of the State of New York.

 

9.12          Entire Agreement . This Agreement, together with the documents and exhibits referred to herein, embodies the entire understanding among the parties and merges all prior discussions or communications among them, and no party shall be bound by any definitions, conditions, warranties, or representations other than as expressly stated in this Agreement, or as subsequently set forth in writing, signed by the duly authorized representatives of all of the parties hereto. This agreement, when executed shall supercede and render null and void any and all preceding oral or written understandings and agreements.

 

9.13          No Oral Change; Waiver . This Agreement may only be changed, modified, or amended in writing by the mutual consent of the parties hereto. The provisions of this Agreement may only be waived in or by a writing signed by the party against whom enforcement of any waiver is sought.

 

10.          INDEMNIFICATION .

 

Both Parties shall indemnify, defend and hold the other party harmless against any and all claims, loss, cost, liability, or expense (including, without limitation, reasonable attorneys’ fees and costs) incurred, sustained and/or paid by either party arising out of (i) any breach by either party of any of its representations, warranties or covenants made under or in connection with this Agreement, or (ii) the gross negligence or willful misconduct of either party in its performance under this Agreement.

 

11.          WARRANTIES AND REPRESENTATIONS.

 

Advisor’s advisory services are provided on a best efforts basis and are based on its personal experience and expertise. There are no guarantees, warranties or representations of any kind that Advisor's advice or services will produce any specific results for the benefit of the Company. Actual results may substantially and materially differ from those suggested by Advisor or included in the Exhibits attached hereto. Advisor represents and warrants to Company that (a) it is under no contractual restriction or other restrictions or obligations that are inconsistent with this Agreement, the performance of his duties and the covenants hereunder, and (b) it is under no physical or mental disability that would interfere with his keeping and performing all of the agreements, covenants and conditions to be kept or performed hereunder.

 

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IN WITNESS WHEREOF , the Parties hereto have executed this Agreement as of the day and year first above written.

 

COMPANY   ADVISOR
         
Staffing 360 Solutions, Inc.   Joshua Capital, Inc.
         
By: /s/ Alfonso J. Lervantes              By: Robert Lee           
       
Its: President   Its: President
         
Date: 2/15/13   Date: 2/18/13

 

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EXHIBIT 16.1

 

 

 

 

February 20, 2013

 

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

 

Re: Staffing 360 Solutions, Inc.

File Ref. # 333-169152

 

We have read the statements of Staffing 360 Solutions, Inc. pertaining to our firm included under Item 4.01 of Form 8-K dated February 20, 2013 and agree with such statements as they pertain to our firm.

 

Sincerely,

 

/s/M&K CPAS, PLLC