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
February 4, 2015
Date of Report
(Date of earliest event reported)
Corporate Resource Services, Inc.
(Exact name of registrant as specified in its
charter)
Delaware |
1-36060 |
80-0551965 |
(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(IRS Employer Identification No.) |
160 Broadway 13th Floor, New York, NY 10038
(Address of principal executive offices and
zip code)
(646)
443-2380
(Registrant’s telephone number, including
area code)
Not
Applicable
(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.
The information provided in Item 2.04 of this
Current Report on Form 8-K is incorporated herein by reference.
Item 2.03. | | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant. |
The information included in Item 2.04 of this
Current Report on Form 8-K is incorporated herein by reference.
Item 2.04 | | Triggering Events That Accelerate or Increase a Direct Financial Obligation or
an Obligation under an Off-Balance Sheet Arrangement. |
On February 4, 2015, Corporate Resource Services,
Inc. (“CRS”) and each of its subsidiaries, Corporate Resource Development Inc., Diamond Staffing Services, Inc., Insurance
Overload Services, Inc., TS Staffing Services, Inc., Accountabilities, Inc. and Integrated Consulting Group, Inc. (together the
“Company”), entered into a letter agreement further amending their account purchase agreements (each an “Account
Purchase Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”) (the “February 4, 2015 Amendment”).
The February 4, 2015 Amendment included an acknowledgement that: (i) events of termination have occurred and are continuing under
the Account Purchase Agreements including as a result of the failure of the Company to repay in full, on or before January 31,
2015, all indebtedness of the Company to Wells Fargo; (ii) Wells Fargo has no obligation to make advances, or to purchase accounts
under the Account Purchase Agreements except in its sole and absolute discretion; (iii) in the event Wells Fargo elects, in its
sole discretion, to make advances, or to purchase accounts under the Account Purchase Agreements, it may thereafter cease doing
so at any time and for any reason without notice; and (iv) Wells Fargo has the right to demand immediate repayment of all indebtedness
and obligations of the Company under the Account Purchase Agreements.
The Company agreed
to retain and appoint Robert Riiska of Focus Management Group USA, Inc. as the Chief Restructuring Officer (the
“CRO”) of CRS and each entity subject to the Account Purchase Agreements, and the Company further agreed that the
CRO will be vested with all power, authority and responsibility as set forth in a retention agreement annexed to the February
4, 2015 Amendment. No payments or transfers of any funds received or controlled by the Company may be made without the
prior approval of the CRO, and the CRO will supervise and oversee the sale, liquidation and/or transition of the assets and
customer contracts of the Company.
The Company also agreed, among other things,
to deliver to Wells Fargo a forecast of daily cash receipts, cash disbursements covering the period through and including February
28, 2015 (the "Budget") and evidence, satisfactory to Wells Fargo, that the Company has issued an invoice for all accounts
that, pursuant to the terms thereof, are eligible to be invoiced as of such date. Any failure to comply with the terms and conditions
of the February 4, 2015 Amendment will constitute an additional termination event under each Account Purchase Agreement.
Each Account Purchase Agreement was amended
to increase the rate used to (i) calculate the Wells Fargo discount prior to the occurrence of an event of termination by two (2)
percentage points in excess of the highest rate otherwise used under the Account Purchase Agreements; and (ii) calculate the Wells Fargo discount on and after the occurrence of an event of termination
(excluding for this purpose the default specified in the February 4, 2015 Amendment) by two (2) percentage points in excess of
the highest rate otherwise used under the Account Purchase Agreements to calculate the Wells Fargo discount on and after the occurrence
of an event of termination.
In addition to all other
fees, charges, interest and expenses payable to Wells Fargo under the Account
Purchase Agreements, the
Company agreed to pay an amendment fee of $500,000.
A copy of the letter agreement
with Wells Fargo is filed as Exhibit 10.52 to this Current Report on Form 8-K.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) EXHIBITS
Exhibit 10.52 |
Letter Agreement Amendment dated February 4, 2015 to the Amendment
to the Account Purchase Agreement dated December 3, 2014, by and between Wells Fargo Bank, National Association and the
Company and certain of its subsidiaries (including Focus Management Group USA, Inc. work project authorization). |
SIGNATURE
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 thereunto duly authorized.
Date: February 10, 2015 |
Corporate Resource Services, Inc. |
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By |
/s/ John P. Messina, Sr. |
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Name: John P. Messina, Sr. |
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Title: Chief Executive Officer |
Exhibit 10.52
WELLS FARGO BANK, NATIONAL ASSOCIATION
110 East Broward Boulevard, Suite
100
Fort Lauderdale, Florida 33301
CORPORATE RESOURCE DEVELOPMENT INC.
DIAMOND STAFFING SERVICES, INC.
INSURANCE OVERLOAD SERVICES, INC.
TS STAFFING SERVICES, INC.
ACCOUNTABILITIES, INC.
INTEGRATED CONSULTING GROUP, INC.
295 Madison Avenue
New York, New York 10038
RE: CORPORATE
RESOURCE SERVICES, INC. ET AL.
Ladies and Gentlemen:
Reference is made to that
certain (i) Account Purchase Agreement, dated November 2, 2010 (“CRD APA”), by and between Corporate Resource
Development Inc. (“CRD”) and Wells Fargo Bank,
National Association (“WFB”), (ii) Account Purchase Agreement, dated August 27, 2010 (“Insurance
APA”), by and between Insurance Overload Services, Inc. (“Insurance”)
and WFB, (iii) Amended and Restated Account Purchase Agreement, dated November 21, 2011 (“TS APA”), by and
between TS Staffing Services, Inc. (“TS”) and WFB, (iv) Account Purchase Agreement, dated January 31, 2011
(“Diamond APA”), by and between Diamond Staffing
Services, Inc. (“Diamond”) and WFB, (v) Account
Purchase Agreement, dated June 13, 2013 (“Accountabilities APA”), by and between Accountabilities, Inc. (“Accountabilities”)
and WFB, and (vi) Account Purchase Agreement, dated November 1, 2013 (“Integrated APA”, together with the CRD
APA, Insurance APA, TS APA, Diamond APA and Accountabilities APA, each individually, an “Account
Purchase Agreement” and collectively, the “Account
Purchase Agreements”), by and between Integrated Consulting Group, Inc. (“Integrated”,
together with CRD, Insurance, TS, Diamond and Accountabilities, each individually, a “Customer”
and collectively, the “Customers”) and
WFB. Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Account Purchase Agreements.
Events of Termination have
occurred and are continuing under the Account Purchase Agreements including as a result of the failure of Customers to repay in
full, on or before January 31, 2015, all indebtedness, liabilities and obligations (including the Repurchase Price for all Accounts)
of Customers to WFB as required by Section 6.34(c) of each Account Purchase Agreement (collectively, the “Specified
Default”).
In consideration of the foregoing,
and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged, it is agreed as follows:
1. Acknowledgments.
(a) Customer
acknowledges confirms and agrees that (i) the Specified Default has occurred and is continuing, (ii) the Specified Default constitutes
an Event of Termination
under the Account Purchase Agreements, and (iii)
WFB has no obligation to make advances, or to purchase Accounts, under the Account Purchase Agreements except in the sole and
absolute discretion of WFB, (iv) in the event WFB elects, in its sole discretion, to make advances, or to purchase Accounts, under
the Account Purchase Agreements, WFB may thereafter cease doing so at any time and for any reason without notice to Customers
and (v) WFB has the right to demand immediate repayment of all indebtedness and obligations of the Customer to WFB under the Account
Purchase Agreement.
(b) The
specific identification of the Specified Default should not be deemed to constitute a waiver of such Specified Default or of any
other Event of Termination which may now or hereafter exist under the Account Purchase Agreement. An Event of Termination may
only be waived in a writing duly executed by an authorized representative of WFB. Any delay by WFB in pursuing any of its rights
or remedies as a result of an Event of Termination should not be deemed a waiver of such Event of Termination or of any of such
rights or remedies, all of which shall remain in full force and effect and shall not be deemed to be waived, impaired, estopped,
diminished or prejudiced in any manner.
2. Additional
Covenants and Agreements.
(a) Chief
Restructuring Officer. Customers shall retain and appoint, and shall cause each corporate Guarantor to retain and appoint,
in each case effective not later than the date hereof, Robert Riiska of Focus Management as the Chief Restructuring Officer of
each Customer and such corporate Guarantor (the “CRO”). The CRO shall be appointed as an officer of each such
Customer and Guarantor by the Board of Directors (or comparable corporate authority) and shall be vested with all such power,
authority and responsibility as set forth in the retention agreement annexed hereto as Exhibit
A. Without limiting the foregoing, no payments or transfers of any of funds received or controlled by any Customer
shall be made without the prior approval of the CRO, and the CRO shall supervise and oversee the sale, liquidation and/or transition
of the assets and customer contracts of each Customer.
(b) Budget.
No later than February 6, 2015 (or at such later date as WFB may agree in its sole discretion), Customers shall deliver to WFB
a forecast of daily cash receipts, cash disbursements and loan balance, in form and substance satisfactory to WFB, covering the
period through and including February 28, 2015 (the “Budget”).
(c) Billings.
No later than February 5, 2015 (or at such later date as WFB may agree in its sole discretion), Customers shall deliver to WFB
evidence, satisfactory to WFB, that Customers have issued an invoice for all Accounts that, pursuant to the terms thereof, are
eligible to be invoiced as of such date. In addition, for each Account of Customer, Customers shall issue an invoice for such
Account no later than the date such Account is first eligible to be invoiced in accordance with the terms thereof.
(d) Customers
shall (a) deliver to WFB such information as WFB may request concerning Customers, the Accounts or the business or financial operations
of Customers and (b) provide WFB with access to and cooperation of the management of Customers and corporate Guarantor.
(e) Customers
have no objection and hereby consent to WFB independently conferring with the CRO and/or the CRO of TS Employment Inc. concerning
any and all aspects of the operations and management of any of the Customers and/or TS Employment Inc.
(f) Tax
Guard. Each Customer shall deliver to WFB, and shall cause each corporate Guarantor to deliver to WFB, from time to
time at the request of WFB, an Internal Revenue Service form 8821 from and executed by such Person with respect to all payroll
taxes of such Person and/or in respect of payroll or wages related to the staffing services provided by such Person or any Customer.
(g) Additional
Event of Termination. Any failure of Customer to comply with the terms and conditions of this agreement, including
Sections 2(a)-(f) above shall constitute an additional Termination Event under each Account Purchase Agreement.
3. Amendment
to Account Purchase Agreements. Each Account Purchase Agreements is hereby amended by (a) increasing the rate used
under the Account Purchase Agreements to calculate the WFBC Discount, prior to the occurrence of an Event of Termination, by two
(2) percentage points in excess of the highest rate otherwise used under the Account Purchase Agreements to calculate the WFBC
Discount prior to the occurrence of an Event of Termination; and (b) increasing the rate used under the Account Purchase Agreements
to calculate the WFBC Discount, on and after the occurrence of an Event of Termination (excluding for this purpose the Specified
Default), by two (2) percentage points in excess of the highest rate otherwise used under the Account Purchase Agreements to calculate
the WFBC Discount on and after the occurrence of an Event of Termination (excluding for this purpose the Specified Default).
4. Amendment
Fee. In addition to all other fees, charges, interest and expenses payable by Customers to WFB under the Account Purchase
Agreements, Customers shall pay to WFB an amendment fee of $500,000, which amount is fully earned and payable on the date hereof
and may be charged directly to any account(s) of Customers maintained by WFB.
5. Conditions
Precedent. The effectiveness of this letter agreement shall be conditioned upon, and this letter agreement shall not
be effective until, the receipt by WFB of (a) an original (or electronic copy) of this letter agreement executed by each Customer
and acknowledged and agreed to by each Guarantor (b) evidence, satisfactory to WFB, of the retention and appointment of the CRO
by each Customer and corporate Guarantor.
6. Effect
of this Agreement. Except as modified pursuant hereto, no other changes or modifications to the Account Purchase Agreements
or any Related Documents are intended or implied, and in all other respects the Account Purchase Agreements and Related Documents
are hereby specifically ratified, restated and confirmed by all parties hereto as of the date hereof. To the extent of conflict
between the terms of this letter agreement, on the one hand, and any of the Account Purchase Agreements, on the other hand, the
terms of this letter agreement shall control.
7. Release.
Each Customer and each Guarantor hereby absolutely and unconditionally releases and forever discharges WFB, and any and all participants,
parent entities, subsidiary entities, affiliated entities, insurers, indemnitors, successors and assigns thereof, together with
all of the present and former directors, officers, attorneys, agents and employees of any of the foregoing, from any and all claims,
demands or causes of action of any kind, nature or description, whether arising in
law or equity or upon contract or tort or under
any state or federal law or otherwise, which such Customer or such Guarantor has had, now has or has made claim to have against
any such Person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to
and including the date of this letter agreement, whether such claims, demands and causes of action are matured or unmatured or
known or unknown.
8. Governing
Law. The rights and obligations hereunder of each of the parties hereto shall be governed by and interpreted and determined
in accordance with the internal laws of the State of Colorado (without giving effect to principles of conflicts of laws or other
rules of law that would result in the application of the law of any jurisdiction other than the State of Colorado).
[SIGNATURE PAGES FOLLOW]
9. Counterparts.
This letter agreement may be executed in any number of counterparts, each of which shall be an original with the same force and
effect as if the signatures thereto and hereto were upon the same instrument. Delivery of an executed counterpart of this letter
agreement by telefacsimile shall have the same force and effect as delivery of an original executed counterpart of this letter
agreement.
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Very truly
yours, |
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WELLS FARGO
BANK, NATIONAL ASSOCIATION |
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By: |
/s/ Alexander J. Chobot |
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Name: |
Alexander J. Chobot |
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Title: |
Senior Vice President |
AGREED
AND ACKNOWLEDGED:
Each of the parties signing below are agreeing to this
agreement in its capacity as a Customer under its Account Purchase Agreement with WFB and are acknowledging and agreeing to this
agreement as a Guarantor to each other Customer’s respective Account Purchase Agreement with WFB:
CORPORATE RESOURCE DEVELOPMENT INC. |
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DIAMOND STAFFING SERVICES, INC. |
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By: |
/s/ John P.
Messina, Sr. |
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By: |
/s/ John P.
Messina, Sr. |
Name: |
John P. Messina, Sr. |
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Name: |
John P. Messina, Sr. |
Title: |
CEO |
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Title: |
CEO |
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INSURANCE OVERLOAD SERVICES, INC. |
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TS STAFFING SERVICES, INC. |
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By: |
/s/ John P. Messina, Sr. |
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By: |
/s/ John P. Messina, Sr. |
Name: |
John P. Messina, Sr. |
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Name: |
John P. Messina, Sr. |
Title: |
CEO |
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Title: |
CEO |
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ACCOUNTABILITIES, INC. |
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INTEGRATED CONSULTING GROUP, INC. |
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By: |
/s/ John P. Messina, Sr. |
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By: |
/s/ John P. Messina, Sr. |
Name: |
John P. Messina, Sr. |
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Name: |
John P. Messina, Sr. |
Title: |
CEO |
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Title: |
CEO |
AGREED
AND ACKNOWLEDGED:
/s/ ROBERT CASSERA |
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ROBERT
CASSERA, as a Guarantor to each |
Customer’s
Account Purchase Agreement with WFB |
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CORPORATE
RESOURCE SERVICES, INC., |
as a Guarantor
to each Customer’s Account Purchase Agreement with WFB |
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By: |
/s/ John P. Messina,
Sr. |
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Name: |
John P. Messina,
Sr. |
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FOCUS
MANAGEMENT GROUP USA, INC.
Agreement
for Consulting Services
General
Terms and Conditions
This
Agreement (the “Agreement”) is made this 4th day of February, 2015 by and between Focus Management Group
USA, Inc. (“Consultant”) and Corporate Resource Services, Inc. (CRS), Corporate Resource Development, Inc.
(“CRDI”), Diamond Staffing Services, Inc. (“DSSI”), Insurance Overload Services, Inc. (“IOSI”),
TS Staffing Services, Inc. (“TSSI”), Accountabilities,
Inc. (“AI”) and Integrated Consulting Group, Inc. (“ICGI”
and together with CRDI, DSSI, IOSI, TSSI and AI, individually and collectively, the “Client). . In consideration
of the mutual covenants contained herein, the parties agree as follows:
1. Scope
of Work. From time to time, Consultant shall perform services for or on behalf of Client as requested by one
or more “Authorizations.” Each Authorization shall specify the terms and conditions and deliverables of the services
to be performed by Consultant, and shall become effective only upon execution by Client and Consultant. In the event certain provisions
of an Authorization conflict with the provisions of this Agreement, the parties hereto agree that the provisions of this Agreement
shall be controlling.
2. Compensation
– Payment of Fees and Expenses. Client shall pay Consultant fees for services as set forth in each Authorization.
The fees for services performed during a given week will be invoiced and shall be paid when presented on the Monday (or next succeeding
business day if such Monday is a non-business day) of the following week. Late payments by Client shall be subject to late penalty
fees of 1.5% per month from the due date until the amount is paid. Time traveling will not be charged. Client shall also pay Consultant
for all costs and expenses incurred in connection with the services provided pursuant to this Agreement.
3. Retainer.
In respect of each Authorization, Client shall pay Consultant a retainer (as described in the applicable Authorization)
to cover fees and out of pocket expenses of Consultant. The retainer is not a substitute for Client’s timely weekly payment
of fees and out of pocket expenses, as defined in Section 2. The retainer shall be paid to Consultant before Consultant is obligated
to perform any work in respect of the applicable Authorization. At the completion or earlier termination of the work in respect
of the applicable Authorization, without further authorization from Client, Consultant may apply the retainer to any unpaid fees,
out of pocket expenses and other charges due Consultant, and any amount of the retainer that is not required to pay Consultant’s
fees, out of pocket expenses or other charges will be refunded to Client at such time. Client acknowledges that (i) the retainer
will be deposited into Consultant’s Client Account and (ii) Client is not entitled to any interest on the retainer.
4. Support
Services. Client shall provide Consultant with duplicating, secretarial and other support services at the location
of the work, provided these services are necessary to complete the work. If such services are unavailable at the locations of
the work, Consultant may provide such services, and shall be entitled to reimbursement from Client for these services charged
at the customary published hourly rates for Consultant’s administrative personnel as may be established by Consultant from
time to time.
5. Rights
to Work Product. Client shall retain exclusive rights to ownership of all work product hereunder. Work
product shall include reports issued pursuant to any Authorization, but shall exclude, among other things, all working papers
by Consultant, memoranda, correspondence, notes, and calculations that Consultant may have prepared or used in the development
of reports. Consultant shall have the right to retain copies of reports issued to Client for Consultant’s records. Consultant
shall have the right to designate in writing certain work product as belonging to Consultant prior to the creation of such work
product, and such designated work product shall be the exclusive property of Consultant if Client permits such work product created
by Consultant
6. Access.
Client shall provide Consultant and its Personnel (as defined below) with access to all of Client’s information, Personnel,
books, records, and facilities deemed necessary by Consultant to complete the work under each Authorization. It may be necessary
for Consultant to arrange for prospective investors/lenders to visit one or more of the facilities and meet with certain members
of Client. It may also be necessary for Client to make certain of its Personnel available for conference calls to answer questions
of prospective investors/lenders. Client will accommodate such requests for access, provided they are made during normal business
hours. Consultant will use its best efforts to (i) accommodate Client’s working schedule so as not to cause undue disruption
of Client’s business, and (ii) attend any visits made by prospective investors/lenders.
7. Personnel.
Each party agrees that neither it nor its affiliates will at any time during the period commencing on the date hereof
and continuing until the first anniversary of the date that (i) all work provided under all Authorizations has been completed
or (ii) this Agreement is otherwise terminated, whichever occurs last, directly or indirectly, solicit for employment any current
or former director, officer, employee or representative of the other party (“Personnel”) without the prior written
consent of the other party.
8. Independent
Contractor. Consultant is an independent contractor. Unless otherwise specifically set forth in an Authorization,
neither Consultant nor any of its Personnel shall be deemed to be an employee, officer or director of Client.
9. No
Assumption of Liabilities. Notwithstanding any provision herein to the contrary, Consultant does not
assume, and shall not be deemed to have assumed, any liabilities, debts or obligations of Client of any kind or
description.
10. Limitation
of Liability; Indemnification.
(a) Neither
Consultant nor any of its Personnel shall have any liability to Client for any action taken or for refraining from the taking
of any action, or for errors in judgment, except for any such claims, damages, liabilities and expenses that are found in a final
judgment by a court of competent jurisdiction to have resulted primarily and directly from such person’s willful misconduct
or gross negligence of any sort.
(b) In
no event will either party be liable to the other party for any loss of profit, business or goodwill or any indirect, special,
consequential, incidental, exemplary, or punitive damages, howsoever arising under or in connection with this Agreement, regardless
of the basis of the claim or form of any action, even if a party has been advised of the possibility of such damages.
(c) Client
hereby agrees to defend, protect, indemnify and hold harmless Consultant and its Personnel (each of the foregoing being an “Indemnitee”
and all of the foregoing being collectively the “Indemnitees”) from and against any and all claims, actions, damages,
liabilities, judgments, costs and expenses (including all fees and disbursements of counsel, legal assistants and paralegals which
may be incurred in the investigation or defense of any matter and, in the event of litigation, at all trial and appellate levels)
imposed upon, incurred by or asserted against any Indemnitee, whether direct, indirect or consequential and whether based on any
federal, state, local or foreign laws or regulations, under common law on an equitable cause, or on contract or otherwise by reasons
of an Indemnitee’s services to Client (irrespective of whether an Indemnitee’s services have been rendered in connection
with this engagement or otherwise), except to the extent that any such claims, damages, liabilities and expenses that are found
in a final judgment by a court of competent jurisdiction to have resulted primarily and directly from such Indemnitee’s
willful misconduct or gross negligence of any sort. In the event this indemnity is unenforceable as a matter of law as to a particular
matter or consequence referred to herein, it shall be enforceable to the full extent permitted by law.
(d) This
indemnification applies, without limitation, to any act, omission, event or circumstance existing or occurring on or prior to
the termination of the relationship between Consultant
and
Client. The indemnification provisions set forth above shall be in addition to any liability Client may otherwise have to Consultant.
Without prejudice to the survival of any other obligation of Client or Consultant, the indemnities and obligations of the parties
contained herein shall survive the termination of the relationship between the parties.
11. Confidentiality.
Consultant shall maintain in strict confidence any information of a non-public nature relating to Client or its business
that Consultant may gain or develop in the course of its engagement by Client, and shall not disclose any such information to
any person during or after its engagement by Client except (i) information that is legally in Consultant’s possession prior
to the disclosure of such information hereunder; (ii) information that, subsequent to its disclosure hereunder, becomes publicly
available; (iii) information that becomes legally available to Consultant on a non-confidential basis from any third party; (iv)
information that Consultant discloses as permitted or required by law or order of court; or (v) information that is disclosed
with the consent of Client. Notwithstanding the above, Consultant shall be permitted to disclose any information regarding Client
to (x) Consultant’s Personnel who need to know such information to perform the services described in the Authorization,
(y) any of Client’s current creditors including Clients’s secured lenders(s) and (z) any shareholder, partner, member,
or other equity holder of Client. Upon termination of this Agreement, Consultant shall return to Client all materials of a non-public
nature from Client in the course of the engagement (other than Consultant’s work product), and shall either deliver to Client
or destroy any copies thereof that it may have made or received.
12. Termination.
This Agreement may be terminated immediately by either the Board of Directors of the Client or by Focus, in its sole
discretion, for any reason whatsoever, with or without cause, by giving written notice of termination to the other party. Upon
termination of this Agreement, Consultant shall be entitled to all unpaid expenses incurred pursuant to this Agreement and the
remaining unpaid balance of any fee which is due and payable pursuant hereto. For the purposes of this Section 12, “Agreement”
shall include any Authorization issued pursuant to this Agreement. Termination of this Agreement at any time shall not affect
any rights, obligations or interests of either party arising prior to the effective date of termination and which, to give effect
to their meaning, must continue in accordance with their terms. Without limiting the foregoing, Sections 9, 10, 13 and 14 expressly
survive the termination of this Agreement.
13. Governing
Law and Venue. This Agreement shall be interpreted, construed and enforced under the laws of the State
of Florida, without regard to conflicts of laws, regardless of the location of the performance of services hereunder. Any claim,
action or proceeding involving the parties hereto shall be brought (and to the extent that the claim, action or proceeding is
brought in any other court, the parties consent to the removal of such matter to) (i) to the extent that a federal court could
have jurisdiction (whether diversity or subject matter based) over the matter at hand, exclusively in the federal courts sitting
in Florida, located in Hillsborough County, Florida, and (ii) in any other matter, exclusively in the courts of the State of Florida,
located in Hillsborough County, Florida. The parties hereby irrevocably consent to the jurisdiction of these courts and the proper
venue therein, each party hereby waiving any claim that any such forum would be inconvenient.
14. Joint
and Several Obligation. If Client consists of more than one person or entity, each shall be jointly and
severally liable to perform the obligations of Client under this Agreement and any and all Authorizations. Any one or more parties
constituting Client may be released from an obligation hereunder without affecting the liability of any party not so released.
15. Miscellaneous.
This Agreement expresses the entire agreement of the parties hereto and supersedes all prior promises, representations,
understandings, arrangements and agreements among the parties with respect to the subject matter hereof. No change, alteration,
or modification of this Agreement shall be effective unless made in writing and signed by both parties hereto. This Agreement
shall inure to the benefit of, and shall be binding upon, the successors and assigns of the parties hereto; provided, however,
that Client shall not assign any right herein or delegate any duties without the prior written consent of Consultant. Failure
of either party hereto to enforce any of the provisions of this
Agreement
or any rights with respect thereto shall in no way be considered to be a waiver of such provisions or rights or in any way affect
the validity of this Agreement. In the event that any provision of this Agreement is held to be invalid, void or illegal by any
court of competent jurisdiction, then the court making such determination may reduce the obligations so as to be enforceable according
to applicable law and enforce such obligations as reduced. The remaining provisions of this Agreement shall be enforced according
to their terms
IN
WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
“Consultant” |
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“Client” |
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FOCUS
MANAGEMENT GROUP USA, INC. |
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CORPORATE
RESOURCE SERVICES, INC. |
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By: |
/s/ Michael
Doland |
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By: |
/s/
John P. Messina, Sr. |
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Name: |
Michael
Doland |
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Name: |
John P. Messina, Sr. |
Title: |
Chief
Operating Officer |
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Title: |
CEO |
FOCUS
MANAGEMENT GROUP USA, INC.
WORK/PROJECT
AUTHORIZATION NO. 1
DATED:
February 4, 2015
In
accordance with that certain Agreement for Consulting Services dated February 4, 2015, by and between the undersigned Client and
Focus Management Group USA, Inc. (the “Agreement”), Client hereby authorizes Focus Management Group USA, Inc., (“Consultant”)
to perform the following services in accordance with the terms, conditions and covenants set forth in the Agreement and in this
Authorization:
As
per the Amendment of the Financing agreement with Wells Fargo and Client dated February 4, 2015, and effective on execution of
said agreement, Robert Riiska of Focus is to assume the responsibilities of Chief Restructuring Officer (“CRO”) of
the Client, on a go forward basis, reporting to Client’s Board of Directors,
| • | Serve as the senior executive
managing operations, finance, sales and marketing, margin enhancement, and cost analysis
and cost reduction; |
| • | Prepare and implement a liquidation
plan for Client assets for the best realization of the Stakeholders. The liquidation
may take the form of the sale or transferring of the contracts/accounts to competitors,
sale or merger of the Client with another Company, and or refinance of the Client with
another Lender. |
| • | CRO will have total control over
the employment of and termination of employees as necessary. |
| • | Review and approve all cash expenditures
(i.e. payroll and related taxes, operating cost etc.) requested by Client Management
in junction with the dual control requested and implemented by the Lender. The CRO is
to be a signatory on the account and will provide the Board of Director a complete list
of daily expenditures. |
| • | The CRO will approve all draws of funds from the Lender
to CRS or on CRS’s behalf. |
| • | No payments or transfers of any manner or description can
be allowed to be sent to TSE by CRS without a full reconciliation by the CRO and approval of the CRO. |
| • | Participate in all Board of Directors
Meetings, except executive sessions involving issues of the CRO’s retention. |
| • | Participate in all meetings with
lenders. |
| • | Participate in all meetings with
investment bankers and financial advisors. |
| 2. | Lender
Relationship Management: |
| • | Assist Client to manage relationship
with its incumbent Lender. |
| • | Monitor progress of business towards
stated goals. |
| • | Communicate with the Lender providing
all company information required per the Lenders information requests as outlined in
Section 11(y) of the Agreement. |
| • | Develop appropriate key indicator
reports and provide same to Client and Lender. |
| 3. | Accounting
Management and Operations Support: |
| • | Review and if necessary prepare
the Client’s rolling 13 week cash flow forecast; |
| • | Monitor performance against budget
and lead communications regarding variances in periodic discussions with Client’s
Lender. |
| • | Consultant to develop appropriate
internal reporting mechanisms. |
| • | Discuss the Client’s financial
condition and opportunities, as understood at that time, with the Client’s management
and stakeholders including its incumbent Lender. |
Compensation:
| • | Retainer: Consultant shall receive
a retainer of $150,000.00 prior to the commencement of any work described herein or in
the Agreement. The retainer will be applied to the fees and expenses payable by Client
to Consultant under the Agreement. Robert Riiska CRO and Focus are to be added as an
additional insured party to the Company’s existing D&O Insurance policy. |
| • | Professional Fees: Professional
fees for this Authorization will be charged at the following hourly rates plus reasonable
expenses, as stated in Section 2 of the Agreement: Travel time w/ill not charged |
o Chief Restructuring Officer |
$550.00 per hour |
o Senior Managing Directors |
$450.00 per hour |
“Consultant” |
|
“Client” |
|
|
|
FOCUS
MANAGEMENT GROUP USA, INC. |
|
CORPORATE
RESOURCE SERVICES, INC. |
|
|
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By: |
/s/ Michael
Doland |
|
By: |
/s/
John P. Messina, Sr. |
|
|
|
Name: |
Michael
Doland |
|
Name: |
John P. Messina, Sr. |
Title: |
Chief
Operating Officer |
|
Title: |
CEO |
Corporate Resource Servi... (CE) (USOTC:CRRSQ)
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