Smart-Tek Solutions, Inc. - Exhibit 10.13 - Filed by newsfilecorp.com





ACQUISITION OF SOLVIS MEDICAL GROUP 

            
This is an Agreement, entered into on October 1, 2011 (the “Effective Date”), by
and between SMART-TEK SOLUTIONS, INC., a Nevada company (“Buyer”) and AMERICAN
MARINE, LLC dba AMS OUTSCOURCING, a Montana Limited Liability Corporation
(“Seller”), and its wholly owned subsidiary SOLVIS MEDICAL GROUP, a
Nevada corporation (the “Acquired Company”).

Background 

            
A.        Buyer is engaged in the business of
providing professional employer organization outsourcing (PEO) and human
resources services to small and medium-size businesses.

            
B.        Seller wishes to sell its
subsidiary Solvis Medical Group which has three distinct business’: Solvis
Medical Staffing and Solvis Medical provides medical staffing
services to hospitals, medical clinics, surgical centers, and skilled nursing
facilities; and, in certain cases, nursing care to patients in their homes.
Solvis Physical Therapy, Inc. is a licensed provider of physical therapy
services, but is currently inactive. 

            
C.        Seller has agreed to sell to Buyer,
and Buyer has agreed to purchase from Seller, Solvis Medical Group.

            
NOW, THEREFORE, intending to be legally bound, the parties
agree as follows: 

            
1.        Purchase and Sale of
Assets.

                        1.1       
For fair consideration (see section 3), Solvis Medical Group will exchange 100%
of its issued and outstanding stock to Smart-Tek Solutions Inc.

                        1.2      
 Acquired Net Assets. Upon the terms and conditions of this
Agreement, Seller hereby sells, transfers, assigns, conveys and delivers to
Buyer, and Buyer hereby purchases, accepts and acquires from Seller, the net
tangible assets of the Seller as of the closing date with the exception of cash
and accounts receivable. In addition, the below assets, not necessarily
tangible, will become the property of the Buyer (the “Acquired Net Assets”):


                                     a)       
All trade name and licenses, certifications and registrations 

                                     
b)        Transfer of Solvis Employees to
Buyer at Buyer’s discretion 

                        1.3       
Following the Closing Date, all payments received by Seller from any customers
related to receivables transacted prior to the acquisition date, such amounts
will belong to the Seller. A list of such receivables is in Exhibit
A 




           
2.        Purchase Price and Payment.


                        2.1       
Purchase Price. The purchase price for the Acquired Company (the
“Purchase Price”) shall be Five Hundred Thirty Five Thousand Dollars ($535,000).
(See Valuation – Exhibit B) 

                        2.2       
Payment. The Purchase Price shall be paid as follows: 

                               
    2.2.1       
$35,000 Thousand Dollars ($35,000) shall be paid on the Closing Date by a wire
transfer to the following account: 

________________________ 

________________________ 

                              
     2.2.2       
Five Hundred Thousand Dollars ($500,000) shall be paid by delivery of a
promissory note on the Closing Date providing for the balance of the purchase
price as Exhibit C.

                        2.3      
 Purchase Price Revaluation. 

                              
     •        Year
2012 – At December 31, 2012, the company will be revalued at four (4) times
pretax earnings. A one year promissory note at 6% interest will be issued for
the net change between the original value and the 2012 revalue.

                                    •       
Year 2013 – At December 31, 2013, the company will be revalued at four (4) times
pretax earnings.  A one year promissory note at 6% interest will be issued
for the net change between the revalue as of December 31, 2012 and the revalue
at December 31, 2013.

          
 3.        Allocation of Purchase
Price. The Purchase Price shall be allocated as set forth on Exhibit
C. Buyer and Seller hereby covenant that the foregoing allocation of the
Purchase Price shall, for tax purposes, be binding on them and they each shall
file their respective tax returns, including the statement required by section
1060 of the Internal Revenue Code of 1986, as amended (the “Code”), in
accordance with such allocations, and shall not take any position inconsistent
with such allocations. 

           
4.        Closing. 

                        4.1      
 Time and Place of Closing. The closing of the transactions
described in this Agreement “Closing”) shall take place on September 30, 2011 or
at such other time as the parties may mutually agree (the “Closing Date”). 

                        4.2      
 Deliveries. 

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         4.2.1      
 Deliveries by Seller. At Closing, Seller shall deliver to Buyer:


                                                4.2.1.1
Such executed bills of sale, endorsements, assignments, and other good and
sufficient instruments of conveyance and transfer, in form and substance
reasonably satisfactory to Buyer’s counsel, as shall be effective to vest in
Buyer all of such Seller’s right, title, and interest in and to the Acquired
Assets; 

                                                4.2.1.2
All necessary consents or assurances of third parties, if any; 

                                                4.2.1.3
Such executed corporate approvals, resolutions, and authorizations, in form and
substance reasonably satisfactory to Buyer’s counsel, including, but not limited
to, approval of the sale of the Acquired Assets by the Seller’s governing body.


                        
       4.2.2      
 Deliveries by Buyer. At Closing, Buyer shall deliver to Seller:


                                                4.2.2.1     
Such executed assignment and assumption agreements and other documentation, in
form and substance reasonably satisfactory to Sellers’ counsel, as shall be
effective to evidence Buyer’s purchase of the Acquired Assets; 

                                                4.2.2.2     
All necessary consents or assurances of third parties, if any; 

                                                4.2.2.3    
 Such executed corporate approvals, resolutions, and authorizations, in
form and substance reasonably satisfactory to Seller’s counsel, including, but
not limited to, approval of the purchase of the Acquired Assets by the governing
body of Buyer; 

                                                4.2.2.4     
The portion of the Purchase Price payable at Closing; and 

                                                4.2.2.5     
The executed Note. 

                        
            4.2.3   Form
of Delivery. The deliveries described above may be made at Closing by fax or
electronic transmission. Within ten (10) days after Closing, the parties shall
exchange original, fully-executed originals. 

           
5.        Post Closing Condition. 

An audit of Solvis Medical Group will be successfully completed
within seventy days (70) of closing. Such audit will paid by Smart-Tek Solutions
Inc., however it will be Solvis’ responsibility to ensure that such audit is
completed on time. 

      
      6.       
Representations and Warranties. Seller hereby makes the following
representations and warranties to Buyer, each of which shall survive the
Closing: 

                        6.1      
 Corporate Organization. Seller is duly organized, validly existing,
and in good standing under the laws of the State of Montana and has qualified to
do business in each jurisdiction where such qualification is required and Seller
has all requisite corporate power and authority and all necessary licenses and
permits to conduct its business as now conducted and to own, lease, and operate
the assets and properties now owned, leased, or operated by it.

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                        6.2       
Approvals. Seller is legally permitted and authorized by its shareholders
and directors to consummate this Agreement and the transactions contemplated
herein. 

                        6.3      
 Enforceability. This Agreement and any documents to be delivered
under this Agreement are valid and binding obligations of Seller and are
enforceable against Seller in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting creditors’ rights generally, and except that the
availability of specific performance, injunctive relief or other equitable
remedies is subject to the discretion of the court before which any proceeding
is brought. 

                        6.4      
 Title to Assets. Seller has exclusive rights to and good and
marketable title to all of the Acquired Assets, free and clear of any and all
liens, leases, licenses, claims of others, mortgages, pledges, claims, security
interests, conditional sales agreements, charges, options and other encumbrances
whatsoever. 

                        6.5      
 No Consents Required. Seller has the full power and authority to
execute, deliver, and perform this Agreement and consummate the transactions
contemplated by this Agreement, and such execution and performance does not
require the consent or permission of any third party.

                        6.6      
 No Violation. Neither the execution or delivery of this Agreement
or any documents to be delivered under this Agreement nor their performance by
Seller will violate the terms of Seller’s Certificate of Incorporation, Bylaws,
or other governing instruments, or any agreement, instrument, or decree to which
it is a party or by which it is bound. 

                        6.7      
 Infringement. The sale of the Acquired Assets to Buyer and Buyer’s
replication and sale of such Acquired Assets in the ordinary course of business
will not infringe upon the intellectual property rights or any other proprietary
right of any person or entity. 

                        6.8      
 No Licenses. There are no licenses now outstanding or other rights
granted to any person or entity under or in connection with any of the Acquired
Assets and Seller is not a party to any agreement or understanding with respect
to the use, sale, assignment, or otherwise of the Acquired Assets. 

                        6.9      
 No Claims. There is no pending challenge or claim asserting the
invalidity, misuse or unenforceability of Seller’s rights or challenging
Seller’s right to ownership or use of the Acquired Assets or to transfer and
assign the Acquired Assets, and Seller has no knowledge of facts that would
support such a challenge or claim. 

                        6.10     
 No Litigation. There is no litigation, administrative, or
governmental proceeding or investigation pending or, to Seller’s knowledge,
threatened against Seller relating to any of the Acquired Assets, and Seller
knows of no facts or circumstances that could reasonably be expected to give
rise to any such litigation or proceeding. 

                        6.11     
 Compliance with Laws. Seller has complied with all applicable laws
in the operation of its business and has not received any notice of violation of
any law, ordinance, rule, regulation, or order which has a material adverse
affect on or, so far as any of them can now 

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reasonably foresee, could reasonably be expected to in the
future to have a material adverse affect on the Acquired Assets. 

                        6.12      
Completeness. No certificate, statement, schedule, exhibit, or other
instrument furnished by Seller contains an untrue statement of material fact or
omits to state any fact that would be necessary to make such certificate,
statement, schedule, exhibit, or other instrument not misleading. 

                        6.13      
Brokers. Seller has not employed a broker in connection with the
transactions described in this Agreement, nor entered into any other agreement
which may cause any person to become entitled to a commission as a result of
such transactions. 

            
7.        Buyer’s Representations and
Warranties. Buyer hereby makes the following representations and warranties
to Seller, each of which shall survive the Closing: 

                        7.1       
Corporate Organization. Buyer is duly organized, validly existing, and in
good standing under the laws of the State of Nevada and has qualified to do
business in each jurisdiction where such qualification is required. Buyer has
all requisite corporate power and authority and all necessary licenses and
permits to conduct its business as now conducted and to own, lease, and operate
the assets and properties now owned, leased, or operated by it. 

                        7.2      
 Approvals. Buyer is legally permitted and authorized by its members
and managers to consummate this Agreement and the transactions contemplated
herein.

                        7.3       
Enforceability. This Agreement and any documents to be delivered under
this Agreement are valid and binding obligations of Buyer and are enforceable
against Buyer in accordance with their respective terms, except as enforcement
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting creditors’ rights generally, and except that the availability of
specific performance, injunctive relief or other equitable remedies is subject
to the discretion of the court before which any proceeding is brought. 

                        7.4      
 No Consents Required. Buyer has the full power and authority to
execute, deliver, and perform this Agreement and consummate the transactions
contemplated by this Agreement, and such execution and performance does not
require the consent or permission of any third party. 

                        7.5      
 No Violation. Neither the execution or delivery of this Agreement
or any documents to be delivered under this Agreement nor their performance by
Buyer will violate the terms of Buyer’s Certificate of Formation, Operating
Agreement, or other governing instruments, or any agreement, instrument, or
decree to which it is a party or by which it is bound. 

                        7.6      
 Completeness. No certificate, statement, schedule, exhibit, or
other instrument furnished by Buyer contains an untrue statement of material
fact or omits to state any fact that would be necessary to make such
certificate, statement, schedule, exhibit, or other instrument not misleading.


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                        7.7      
 Brokers. Buyer has not employed a broker in connection with the
transactions described in this Agreement, nor entered into any other agreement
which may cause any person to become entitled to a commission as a result of
such transactions. 

                        7.8


           
8.        Indemnifications. 

                        8.1       
Indemnification by Seller. Seller shall defend, hold harmless, and
indemnify Buyer and its employees, officers, and managers, and members against
all liabilities, damages, losses, claims, judgments and expenses (including
reasonable attorneys’ fees and related costs) arising from (i) the conduct of
Seller’s business; or (ii) a breach by Seller of any of the covenants,
agreements, warranties or representations contained in this Agreement. 

                        8.2      
 Indemnification by Buyer. Buyer shall defend, hold harmless, and
indemnify Seller and its employees, officers, directors, and shareholders
against all liabilities, damages, losses, claims, judgments and expenses
(including reasonable attorneys’ fees and related costs) arising out of (i) the
conduct of Buyer’s business; or (ii) a breach by Buyer of any of the covenants,
agreements, warranties or representations contained in this Agreement. 

                        8.3       
Notice of Claim. Upon receipt of a third party claim or demand for which
a party is entitled to indemnification, or in any other event where a party
believes it is entitled to indemnification, such party (the “Indemnified Party”)
shall (i) notify the party required to provide such indemnification (the
“Indemnifying Party”) in writing of the nature of the claim and the names and
addresses of the persons involved in or having an interest in such claim; (ii)
furnish the Indemnifying Party with all documents and information within the
possession, custody, or control of the Indemnified Party and relating to such
claim; and (iii) cooperate with the Indemnifying Party should the Indemnifying
Party choose to defend such claim pursuant to section 10.4. 

                        8.4      
 Defense of Claim. Upon receipt of the notice described in section
10.3, the Indemnifying Party shall be entitled to exercise control of the
defense and settlement of any third party claim giving rise to the claim to
indemnification, provided that (i) such defense and settlement shall be at the
sole cost and expense of the Indemnifying Party; (ii) the Indemnifying Party
shall notify the Indemnified Party of its intention to assume control of the
defense and settlement within a reasonable time of its receipt of the notice
described in section 10.3; (iii) the Indemnifying Party shall be permitted to
control the defense of the claim only if the Indemnifying Party is financially
capable of such defense and engages the services of a qualified attorney, each
in the reasonable judgment of the Indemnified Party; (iv) the Indemnifying Party
shall not thereafter withdraw from control of such defense and settlement
without giving reasonable advance notice to the Indemnified Party; (v) the
Indemnified Party shall be entitled to participate in, but not control, such
defense and settlement at its own cost and expense; (vi) before entering into
any settlement of the claim, the Indemnifying Party shall be required to obtain
the prior written approval of the Indemnified Party, which shall be not
unreasonably withheld, if pursuant to or as a result of such settlement,
injunctive or other equitable relief would be imposed against the Indemnified
Party or its assets or business; and (vii) the Indemnifying Party will not enter
into any settlement of any such claim without the prior written 

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consent of the Indemnified Party, unless the Indemnifying Party
agrees to be liable for any amounts to be paid to the third party pursuant to
such settlement and satisfies to the reasonable satisfaction of the Indemnified
Party its ability to satisfy such liability. 

                        8.5      
 Limitation on Actions. 

                                
    8.5.1        Time
Limitation. No action for indemnification based on an alleged breach of
representations or warranties pursuant to this section shall be effective unless
the notice described in section 10.3 is received by the party from whom
indemnification is sought within eighteen (18) months following the Closing
Date. 

                  
                  8.5.2      
 Reservation of Rights. The election of the Indemnifying Party to
defend a claim shall not preclude the Indemnifying Party from subsequently
contesting its obligation to indemnify the Indemnified Party with respect to
such claim. 

           
9.        Restrictive Covenants.

                         9.1       
Confidential Information. At all times after the date of this Agreement,
Seller shall not, except with the express prior written consent of Buyer,
directly or indirectly, communicate, disclose or divulge to any person or
entity, or use for its own benefit or the benefit of any person, any
confidential or proprietary information of Buyer or Buyer’s business, including
but not limited to business plans, trade secrets, financial statements and
projections, marketing plans, business practices, pricing, cost, and expense
information, and all discussions and negotiations relating to this Agreement and
the transactions contemplated hereunder.

                         9.2      
 Remedies for Breach. Seller acknowledges that the restrictions
contained in this section 11 are reasonable and necessary in order to protect
Buyer’s legitimate interests and that any violation thereof would result in
irreparable injury to Buyer. Seller therefore acknowledges and agrees that, in
the event of any violation thereof, Buyer shall be authorized and entitled to
obtain, from any court of competent jurisdiction, preliminary and permanent
injunctive relief as well as an equitable accounting of all profits or benefits
arising out of such violation, which rights and remedies shall be cumulative and
in addition to any rights or remedies to which Buyer may be entitled. In the
event that this section 11 is held to be in any respect an unreasonable
restriction upon Seller, the court so holding may reduce the territory to which
it pertains and/or the period of time during which it operates, or effect any
other changes to the extent necessary to render this Section enforceable by said
court. 

           
10.        Miscellaneous. 

                         10.1    
 Amendments; Waivers. No amendment, modification, or waiver of any
provision of this Agreement shall be binding unless in writing and signed by the
party against whom the operation of such amendment, modification, or waiver is
sought to be enforced. No delay in the exercise of any right shall be deemed a
waiver thereof, nor shall the waiver of a right or remedy in a particular
instance constitute a waiver of such right or remedy generally. 

                         10.2    
 Notices. Any notice or document required or permitted to be given
under this Agreement shall be deemed to be given on the date such notice is (i)
deposited in the United States mail, postage prepaid, certified mail, return
receipt requested, (ii) deposited with a 

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commercial overnight delivery service with delivery fees paid,
or (iii) transmitted by facsimile or electronic mail with transmission
acknowledgment, to the following addresses or such other address or addresses as
the parties may designate from time to time by notice satisfactory under this
section: 

	 	Buyer: 	Smart-Tek Solutions Inc. 
	 	  	11838 Bernardo Plaza Ct 
	 	  	Suite 240 
	 	  	San Diego, CA 92128 
	 	  	  
	 	Seller: 	AMERICAN MA3RINE, LLC 
	 	  	11838 Bernardo Plaza Ct 
	 	  	Suite 210 
	 	  	San Diego, CA 92128 


                         A
copy of any notice to Buyer shall be sent to Owen Naccarato, Esq., Naccarato
& Associates, 1100 Quail Street, Suite 100, Newport Beach, California 92660,
FAX (949) 851-9262, owen@owenn.com, and a copy of any notice to Seller shall be
sent to Sellers’ address above, provided that such copies shall not themselves
constitute notice. 

                         10.3      
 Governing Law.

                              
         10.3.1       
In case of breach of Buyers Warranties and Representations and breach of
Promissory Note. This Agreement shall be governed by the internal laws of
California without giving effect to the principles of conflicts of laws. Each
party hereby consents to the personal jurisdiction of the Federal or California
courts located in San Diego County, California, and agrees that all disputes
arising from this Agreement shall be prosecuted in such courts. Each party
hereby agrees that any such court shall have in personam jurisdiction over such
party and consents to service of process by notice sent by regular mail to the
address set forth above and/or by any means authorized by California law. 

                          
            
10.3.2        In case of breach of Sellers
Warranties and Representations.

                         10.4       
Language Construction. The language of this Agreement shall be construed
in accordance with its fair meaning and not for or against any party. The
parties acknowledge that each party and its counsel have reviewed and had the
opportunity to participate in the drafting of this Agreement and, accordingly,
that the rule of construction that would resolve ambiguities in favor of
non-drafting parties shall not apply to the interpretation of this Agreement.


                         10.5      
 No Offer. The submission of this Agreement by any party for the
review and/or execution by another party does not constitute an offer or
reservation of rights for the benefit of any party. This Agreement shall become
effective, and the parties shall become legally bound, only if and when all
parties have executed this Agreement. 

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                         10.6      
 Payment of Fees. In the event of a dispute arising under this
Agreement, the prevailing party shall be entitled to recover reasonable
attorney’s fees and costs, provided that if a party prevails only in part the
court shall award fees and costs in accordance with the relative success of each
party. 

                         10.7      
 Signature in Counterparts. This Agreement may be signed in
counterparts, each of which shall be deemed to be a fully-executed original.


                         10.8       
Signature by Facsimile. An original signature transmitted by facsimile
shall be deemed to be original for purposes of this Agreement. 

                         10.9       
Assignment. Neither party to this Agreement shall assign its rights or
duties hereunder without the prior written consent of the other party. Any
attempted assignment without such prior written consent shall be null and void.


                         10.10    
 No Third Party Beneficiaries. Except as otherwise specifically
provided in this Agreement, this Agreement is made for the sole benefit of the
parties. No other persons shall have any rights or remedies by reason of this
Agreement against any of the parties or shall be considered to be third party
beneficiaries of this Agreement in any way. 

                         10.11    
 Binding Effect. This Agreement shall inure to the benefit of the
respective heirs, legal representatives and permitted assigns of each party, and
shall be binding upon the heirs, legal representatives, successors and assigns
of each party. 

                         10.12    
 Titles and Captions. All article, section and paragraph titles and
captions contained in this Agreement are for convenience only and are not deemed
a part of the context hereof. 

                         10.13    
 Pronouns and Plurals. All pronouns and any variations thereof are
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or persons may require. 

                         10.14    
 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to its subject matter and supersedes all prior
agreements and understandings. 

                         10.15    
 Time is of the Essence: Time is of the essence and both parties
mutually agree to prepare and provide all necessary documentation as may be
required to complete this transaction. 

                         10.16    
 Employer of Record: AMS Outsourcing will remain the Employer of
Record until January 1, 2012 to facilitate the processing of government year-end
filings and Form W-2 processing. 

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                         IN
WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above. 

SMART-TEK SOLUTIONS, INC.: 

          /s/
Kelly Mowrey 

By:_______________________________________
      
Kelly Mowrey, COO 

AMERICAN MARINE, LLC: 

          /s/
Niven Bonar 

By:
______________________________________
      
C. Niven Bonar, Managing Member 

SOLVIS MEDICAL GROUP 

          /s/
Eric Gaer 

By:
_____________________________________
      
Eric Gaer, CEO 

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Exhibit A 

Net Tangible Assets

	         Description                                                                            
       	Book Value 
	  	  
	1.) Furniture and Fixtures 	$ 6,341 
	2.) Prepaids 	$52,303 






Exhibit B 
Valuation 


Hanover Federal Capital Corporation

Merchant Bankers 


Member: The EMCO/Hanover Group 

July 15, 2011 

AMS Outsourcing 
11838 Bernardo Plaza Court,
Suite 210,

  San Diego, CA 92128 

Attention:     Mr. Eric Gaer,
Chief Executive Officer

                      
Re: Fairness Opinion – Solvis, as collectively referenced below 

Gentlemen: 

The EMCO/Hanover Group under Hanover
Federal Capital Corporation (collectively referred to herein as
“Hanover”) has been requested to express an opinion as to the Fair Market
Value (“FMC”) of Solvis Medical
Group under an intent to sell by AMS Outsourcing
(“AMS”), as of June 30, 2011 and as collectively referenced
herein under General Background. 

Conclusion 

Hanover’s Opinion is that the Fair Market Value that
should be assigned to the Shareholder’ Equity Account of Solvis Medical Group
should be $535,445 as determined on Page 8 of
this Report. 

General Background 

In March, 2010, AMS Outsourcing (“AMS”)
acquired Solvis Medical Staffing, Inc.; Solvis Medical,
Inc.; and Solvis Physical Therapy, Inc. (collectively
referred to herein as “Solvis” or “Solvis Medial Group”) from
Solvis Healthcare, Inc. in exchange of indebtedness of
approximately $300,000.

Description of Business 

Solvis Medical Staffing and Solvis Medical
provides medical staffing services to hospitals, medical clinics, surgical
centers, and skilled nursing facilities; and, in certain cases, nursing care to
patients in their homes. Solvis Physical Therapy, Inc. is a licensed
provider of physical therapy services, but is currently inactive. 

11740-11 Sunset Boulevard, Los Angeles, California
90049-2996 
Telephone: (310) 471-3735 Fax: (310) 440-2214 Email:
bb@emchano.com 

  Website: www.emcohanover.com





Medical Staffing Services 

The Company specializes in providing a broad range of
staffing services, including nurses and other clinical personnel, to hospitals,
clinics, and private patients. They provide these services through contracts
they have with numerous hospitals and clinics in Michigan and California. The
hospitals and clinics are not obligated to use their services under these
agreements; the agreements set forth the terms under which the hospitals and
clinics may use their staffing services. 

Solvis employs several different methods to promote and
advertise their staffing services to acquire new customers, including
advertising, direct mail, and an internal sales staff. They use their internal
staff to contact hospital staffing managers regarding their hospital nurse
staffing services. 

Medical Provider Services 

Solvis provide nurses and other medical personnel to
patients in their homes through the Company’s home healthcare operations
in Michigan and California. They most frequently obtain patients through
referral by other medical services providers or insurance company case managers.
Some patients are obtained by advertising. They use our internal sales staff to
call physicians, hospitals, case managers and insurance companies regarding our
home healthcare staffing services 

Solvis’ Strategy 

Solvis recruit nurses and allied health (non-nursing)
professionals. Their strategic objective is to be a profitable provider of
medical staffing services and home healthcare services; and to be a preferred
provider of physical therapy services. They currently provide our services with
operations in California and Michigan. They hope to expand our business presence
in other locations throughout the U.S. They seek to profitably serve our target
markets by achieving scale and efficiency in their operations. They believe our
target market is large and growing rapidly due to the nature of the medical
industry. They medical staffing and medical provider personnel are trained in
their various experts of expertise and are employees of one of their
subsidiaries, through which they are on payroll. 

They market their services to two distinct customer groups: (1)
temporary healthcare professionals and (2) hospital and healthcare facility
clients. To assist in recruitment, they provide their temporary healthcare
professionals with an attractive benefits package, including a 401(k) plan and
health insurance. Management believes that they attract temporary healthcare
professionals due to: 1.) their long-standing reputation for providing a high
level of service; 2.) their numerous job opportunities; and 3.) their benefit
packages and word-of-mouth referrals from their current and former temporary
healthcare professionals. 

Hanover Federal Capital Corporation

Merchant Bankers

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They have established a growing and diverse hospital and
healthcare facility client base, ranging from national healthcare providers to
premier teaching and regional hospitals. Hospital and healthcare facilities
utilize our services to help cost-effectively manage staff shortages, new unit
openings, seasonal variations, budgeted vacant positions, long-term leaves of
absence and other flexible staffing needs. 

Their medical staffing business segment also includes placement
of nursing and allied (non-nursing) personnel in home healthcare, which is
growing in importance due to the changing demographics of the U.S. toward an
older population and the need for home care of patients who have experienced
debilitating injuries that require daily care outside of a medical facility.
Solvis’ target markets include a number of niche opportunities,
including: hospitals, specialized facilities, government contracts, private duty
cases, nursing/assisted living centers, and brain injury cases. 

In order to grow their medical staffing business, management
intends to pursue two parallel strategies: organic growth of their existing
business, including Solvis Medical Staffing and Solvis Medical –
in Michigan and in California. 

According to Solvis, the growth of their staffing and
home healthcare units will depend on their ability to increase their pool of
nurses. In-house recruiting personnel in local markets, trade and employment
fairs, and targeted mailers are used as tools for recruitment of nurses and
other health professionals.

The Market 

According to Healthcare Market Resources, the healthcare
staffing industry in the U.S. is averaging 10% annual growth. The trend within
hospital systems, however, is to reduce the number of outside agencies used.
Hospitals are beginning to move toward approved supplier lists, supplier
consolidation, and separate staffing offices, which will enable them to lower
their agency numbers and create uniformity. According to The Braff Group,
entry into new markets for staffing agencies has become increasing difficult,
which can be mitigated by an acquisitions strategy.

According to American Family Physician, home healthcare
is one of the fastest growing markets in all of healthcare. Between 1980 and
1996, for example, the number of patients receiving Medicare-sponsored home care
increased by more than 400 percent. Our nation’s largest population group, “baby
boomers”, is beginning to reach the age where many need medical assistance or
help but do not want to live in a nursing home.

Despite its anticipated growth, recruiting of nurse
professionals in the healthcare staffing industry is difficult as there is a
national shortage of nurses. According to Health Resources and Service
Administration, the current shortage of registered nurses is projected to
worsen, to a shortfall of 800,000 by 2020. On a percentage basis, this means
that the supply is expected to fall short of demand in 2020 by approximately
29%. All healthcare providers, including those in

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The U.S. healthcare market continues to experience an increase
in the use of physical therapy and rehabilitation services. This increase is
driven by an aging population, advances in medical technologies, growing
availability of services in hospitals and clinics, and more frequent physician
referrals for therapeutic and diagnostic procedures. 

Demand and Supply Drivers 

Since the mid-1990s, changes in the healthcare industry
prompted a permanent shift in staffing models that led to an increased usage of
temporary staffing at hospitals and other healthcare facilities. These changes
have also resulted in increased demand for outpatient services including home
healthcare, and physical therapy/rehabilitation. Management believes that this
expanded demand and supply pattern will continue because of the following
drivers: 

a.) Demand Drivers 

Demographics and Advances in Medicine and
Technology. As the U.S. population ages and as advances in
medicine result in longer life expectancy, it is likely that chronic illnesses,
injuries, and hospital populations will continue to increase. Management
believes that these factors will increase the demand for temporary nurses, as
well as for allied health professionals (in hospital and in home). In addition,
advances in healthcare technology have increased the demand for specialty nurses
who are qualified to operate advanced medical equipment or perform complex
medical procedures.

Shift to Flexible Staffing Models.
Nurse wages comprise the largest percentage of hospitals’ labor
expenses. Cost containment initiatives and a renewed focus on cost-effective
healthcare service delivery continue to lead many hospitals and other healthcare
facilities to adopt flexible staffing models that include reduced permanent
staffing levels and increased utilization of flexible staffing sources, such as
traveling nurses. 

Nursing Shortage. Most regions of
the United States are experiencing a shortage of nurses. The Journal of the
American Medical Association has reported that the registered nurse
workforce is expected to be 20% below projected requirements by 2020. Faced with
increasing demand for and a shrinking supply of nurses, hospitals are utilizing
more temporary nurses to meet staffing requirements. Factors contributing to the
current and projected declining supply of nurses include: 

State Legislation Requiring Healthcare Facilities to
Utilize More Nurses. In response to concerns by consumer groups over the
quality of care provided in healthcare facilities and concerns by nursing
organizations about the increased workloads and pressures placed upon nurses,
several states have passed or introduced legislation that is expected to
increase the demand for nurses. California passed legislation that requires the
establishment of minimum nurse-to-patient ratios throughout all hospitals.
Several states are considering similar legislation. 

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b.) Supply Drivers 

Word-of-Mouth Referrals. Nursing applicants are
most often referred to staffing companies by current or former temporary
healthcare professionals. Growth in the number of healthcare professionals that
have traveled, as well as the increased number of hospital and healthcare
facilities that utilize temporary healthcare professionals, creates more
opportunities for referrals. 

More Nurses Choosing Temporary Assignment Due to the
Nursing Shortage. In times of nursing shortages, nurses with permanent
jobs generally feel more secure about their employment prospects. They have a
higher degree of confidence that they can leave their permanent position to take
a temporary assignment and have the ability to return to a permanent position in
the future. Additionally, during a nursing shortage, permanent staff nurses are
often required to assume greater responsibility and patient loads, work
mandatory overtime and deal with increased pressures within the hospital. Many
experienced nurses consequently choose to leave their permanent employer, and
look for a more flexible and rewarding position. 

Growth Strategy 

Solvis’ goal is to expand their healthcare business
units, including nurse staffing, home healthcare, and physical
therapy/rehabilitation. They expect to expand through both organic growth and
through strategic acquisitions as they become available and/or affordable.
According to management, the key components of their business strategy include:


Expanding Network of Qualified Temporary Healthcare
Professionals. Through the Company’s recruiting efforts, they
will continue to expand their network of qualified temporary healthcare
professionals. Management believes that growth in their temporary healthcare
professional network in the past has been due primarily to referrals from their
current and former temporary healthcare professionals, as well as through
advertising and direct mailings. They expect these methods to continue to gain
momentum as we implement consistent recruitment programs, including
participation in local job fairs. 

Strengthening and Expanding Their Relationships with
Hospitals and Healthcare Facilities. According to corporate management,
the Company seeks to continue to strengthen and expand their
relationships with their hospital and healthcare facility clients, and to
develop new relationships. They believe that they are well positioned to offer
their hospital and healthcare facility client’s effective solutions to meet
their staffing needs. While the Company holds contracts with most of the
hospitals in the markets they currently serve, they expect to increase their
marketing efforts to receive a larger amount of available shifts to increase
their overall market share. 

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Competition 

The market for medical staffing and medical provider services
is highly competitive. There are no substantial barriers to entry, and corporate
management expects that competition will intensify in the future. Management
believes that their ability to compete successfully depends upon a number of
factors, including successfully maintaining their existing customers, as well
originating new clients and patients through their internal sales staff. 

The healthcare staffing industry is highly competitive.
Solvis competes with both national firms and local and regional firms. In
addition, some of their hospital and healthcare facility clients maintain their
own national staffing organizations that provide staffing services to their
member hospitals. Solvis competes with these firms to attract nurses and
other healthcare professionals as temporary healthcare professionals and to
attract hospital and healthcare facility clients. Management competes for
temporary healthcare professionals on the basis of customer service and
expertise, the quantity, diversity and quality of assignments available,
compensation packages, and the benefits that they provide to a temporary
healthcare professional while they are on an assignment. According to management
Solvis competes for hospital and healthcare facility clients on the basis
of the quality of their temporary healthcare professionals, the timely
availability of their professionals with requisite skills, the quality, scope
and price of their services, and their recruitment expertise. 

Management believes that their model of local, community-based
staffing offices provide the level and quality of service demanded by the
hospitals, clinics, and patients we serve through our nurse staffing and home
healthcare business units. Continuing nursing shortages and factors driving the
demand for nurses over the past several years have made it increasingly
difficult for hospitals to meet their staffing needs. Their local offices
maintain a base of available nursing candidates and word-of-mouth referral
enabling them to attract a consistent flow of new applicants.

Industry Selected Comparatives: Publicly-Traded and
Private Companies 

According to Solvis’ managements, some of Solvis’
“smaller” competitors in the temporary healthcare staffing sector include:
AMN Healthcare Services Inc. (NYSE: AHS) with annual revenues of
$689 million – selling at a forward price/ earnings ratio of 17.7x and a price/
sales ratio of .40x; Cross Country Healthcare, Inc. (Nasdaq GS:
CCRN ) with annual revenues of $469 million - selling at a forward price/
earnings ratio of 25.7X and a price/ sales ratio of .47x; and On Assignment
Inc. (Nasdaq GS: ASGN) with annual revenues of $438 million – selling
at a forward price/ earnings ratio of 16.8x and a price/ book ratio of .74x.
Even though IntelliStaf, Medical Staffing Network and RehabCare
Group were listed by management, they are not publicly-traded companies and
thus, have only been listed here for reference purposes.

Larger publicly-traded companies in Solvis’ industry
sector include: SFN Group, Inc. (NYSE: SFN) with annual revenues
of $2.1 billion - selling at a forward price/ earnings ratio of

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16.8x and a price/ sales ratio of .33x; Kelly Services,
Inc. (Nasdaq GS: KELYA ) with annual revenues of $11.8 billion -
selling at a forward price/ earnings ratio of 11.8x and a price/ sales ratio of
..14x; and Manpower Inc. Common Stock (NYSE: MAN) with annual
revenues of $18.9 billion - selling at a forward price/ earnings ratio of 14.9x
and a price/ sales ratio of .26x; plus Paycheck Inc. (Nasdaq GS: PAYX )
with annual revenues of $2.0 billion - selling at a forward price/ earnings
ratio of 21.0x and a price/ sales ratio of 5.60x. 

General Note: All of the above
comparatives are considerably larger than the Solvis medical Group and thus, are
included herein only as a point of reference and were not used in determining
Hanover’s Fair Market Value Opinion. 

Government Regulation 

The healthcare industry is subject to extensive and complex
federal and state laws and regulations related to professional licensure,
conduct of operations, payment for services and payment for referrals.

Nurse Staffing. Solvis’ nurse staffing
business is not directly impacted by or subject to the extensive and complex
laws and regulations that generally govern the healthcare industry. The laws and
regulations which are applicable to their hospital and healthcare facility
clients could indirectly impact their business to a certain extent, but because
they provide services on a contract basis and are paid directly by their
hospital and healthcare facility clients, they do not have any direct Medicare
or managed care reimbursement risk. Most of the temporary healthcare
professionals that they employ are required to be individually licensed or
certified under applicable state laws. According to management, they take
reasonable steps to ensure that their employees possess all necessary licenses
and certifications in all material respects. 

Current Operating and Financial Condition 

As of February 28, 2011 Solvis Medical Group had
revenues for the 6 months period of $1,992,752 and earned Pre-tax Income of
$111,551 (if annualized: $223,102) This
compared to 2010 fiscal year results of annual revenue of $2,341,431 but with a
reported fiscal 2010 loss of <$283,950>. Its reported balance sheet at
February 28, 2011 had an unaudited Shareholders’ Equity Account balance of
<$12,138>. 

Basis of Opinion 

For purposes of its Opinion, Hanover
believes that a pre-tax earnings multiple of 4x would be
appropriate, not only because of the Company’s revenue size but also
because of the fact it has yet to report on a fiscal basis any profits, given
also the Company’s Retained Balance Earnings Account Balance of
<$458,488> through June 30, 2011. The multiple
selected typically compares to a 3-5x standard for smaller acquisitions (under
$5.0 million in annualized revenues. 

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Using the selected multiple prior stated, this would then
result in a Fair Market Value of $360,816 – calculated as follows: 

$223,102 (annualized 2011 fiscal earnings,
per above) x .60 (the reciprocal for a 40% effective 
State/ Federal tax
rate) = $133,861 x 4 = $535,445 

Opinion Qualification 

For purposes of this Opinion, Mr. Barren has relied on
certain information supplied by the Company and certain other
sources referenced herein. Mr. Barren does not attest to the accuracy or
reliability of this information or to any subsequent events that might or might
not affect their accuracy or reliability, either positively or adversely, since
the reference period for this Opinion. 

Undersigned’s Credentials 

Bruce W. Barren is Group Chairman of The EMCO/Hanover
Group, which, since its inception in 1971, has concluded more than $3+
billion in financial transactions worldwide as international merchant bankers,
representing more than 1,000 separate corporate transactions. Mr. Barren
specializes in matters attendant to the senior management decision process,
including those relating to executive and employee compensation, wrongful
terminations, board representation, operating management, planning, financial
administration, short and long-term debt and capital involvement, including
capital sourcing, encompassing all types of investment requirements - business
turnarounds, capital restructuring and merger/acquisition, plus foreign
licensing along with corporate valuations for cash/ collateral purposes under
the U. S. Bankruptcy Act and separately, for estate planning - including
tangible and intangible assets. Mr. Barren has personally been involved
in more than 200 business turnarounds, representing more than $1 billion in
annualized payroll.

Achievements and Accolades

Mr. Barren has been honored on more than 50 separate occasions by: the
Governors of the Commonwealth of Pennsylvania plus New York and New Jersey (in
addition to their respective U.S. Senators) along with the Governors of Kentucky
and Tennessee. In California, he has received commendations from various
municipal and county governments as well as its State Assembly, Senate, Offices
of the State Treasurer, Controller and several Governors. 

As part of these accolades, Mr. Barren has also received
more than a dozen individual U.S. Congressional Tributes, both from the U.S.
Senate and House of Representatives, including one in 1990 from then Congressman Christopher Cox - subsequently the 28th
Chairman of the Securities and Exchange Commission. In 1989, Mr. Barren
was honored with a commemorative from President Ronald Reagan. Further, between
2000 to 2005 he received letters of commendation from then President Clinton and
Vice President Al Gore plus President George W.

Bush and Vice President Richard Cheney along with then U.S.
Senator Hilary Rodham Clinton (subsequently appointed in 2009 as the U.S.
Secretary of State under President Obama) for his then 35+ years of service to
the country, various states and their respective community. 

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Specific Solvis Related Industry Credentials 

Mr. Barren’s involvements in the Employment and
Related Services, including Out-Placement, have been -- corporate
assignments have included such companies as Snelling and Snelling (a nationwide
employment services company); Alert Staffing (general base- and middle-level
employee staffing); plus King Chapman Broussard & Gallagher, Inc. (executive
out placement services), New Jersey Models (serving the South New Jersey market)
along with The Right Man (an employment search firm) and Cahners Publishing -
Trade Shows (stated to be one of the largest trade show companies in the United
States) plus Employment Systems, Inc. (dealing in the municipal market)
and Premier Staffing, Inc. (serving the fashion industry). 

In the Medical Industry, Mr. Barren’s involvements have
included corporate reorganizations and medical related valuations, involving
estate planning and litigation including that related to the tax court and
Chapter 11/7 situations. Assignments: Community Health Facilities (retirement
homes); Charter Medical Corporation (hospital ownership/ management worldwide);
Park West Medical Group (an HMO); La Habra Villa Retirement Home; Pacific
Gardens Retirement Hotel; Global Medical Products Holdings Ltd. (medical
products) and its various affiliated businesses; Isotrol Systems/Medi-Power
Products, Inc. (medical products); Mission Dialysis, Inc.; Mission Viejo Medical
Center; R & S Medical Enterprises (retail/ wholesale product distribution);
Medi-Centers of America plus Safety Consultants Service, Inc./School Ten, Inc.
(drug and alcoholic treatment facilities); Alcohol Abuse Hospitals, Inc. plus
BioGentec Incorporated (medical consumer products) and Sunnylife Global, Inc.
(hospital ownership/ management plus retail health stores); plus Ivybank Care
Home, Ltd. (Senior Assisted Care Living - England). 

Business Affiliations/ History

Under EMCO/Hanover's Executive Loan Program, Mr.
Barren has assumed a number of senior on-line managerial positions, ranging
from small- and medium-sized companies to those in the multi-national
marketplace. Under this program, Mr. Barren has acted as: a Chief
Executive Officer on a motorcycle manufacturer and a President of a satellite
microwave equipment manufacturing company – both for separate venture capital
firms then located in New York City; a Chief Executive Officer of a California
bank under FDIC approval; President of a HMO medical provider, with 23 offices
in Southern California, under the State of California, Department of Insurance's
approval; Chairman of a printing/graphic design business and as a Chief
Executive and Administrative Officer for various companies in the construction/
real estate industry, both commercial and residential. 

From 1959 to 1962, Mr. Barren was an Executive Vice
President and Board Member of a multinational industrial processing and chemical
company, which he was forced to assume while he was in college, following the
death of his father. Other prior experiences included an association with Price
Waterhouse (1963-1967) where his responsibilities were directed primarily to
client marketing-related problems at the chief executive officer level,
involving such companies as Paramount Pictures, Saab Motors (Sweden) and
Electrolux.

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Between 1968 and 1971 Mr. Barren was a member of several
Securities and Exchange Commission (SEC) regulated investment banking firms,
first as a Vice President at Walston & Co., Inc. and then as a Director/
Senior Vice President of Delafield Childs, Inc. Both were then located in New
York City. Since then, he has been advisor to a number of other SEC regulated
firms (Bregman Securities, Jesup & Lamont plus Birr Wilson) and in the late
1980’s to Transatlantic Capital Bio-Sciences Fund (London, England) - a
“first-stage”, medical biosciences venture fund, whose investors included
Johnson & Johnson International and Fison Pharmaceutical. 

In 1971, Mr. Barren became a Senior Vice President for
an AMEX publicly-traded printing services company which also controlled a
related company, listed in the Over-the-Counter Marketplace. This company is
also in consumer product marketing today, with more than 100 separate entities
selling nationwide and internationally through various media and buyer outlets.
Mr. Barren is actively involved with this company today. Currently,
Mr. Barren continues to act as an advisor to a variety of companies,
engaged in a diversity of business – worldwide, including having served as the
designated Chairman of the Executive Committee in 2005-6 for a U.S. publicly
held company, with two mandates from the Peoples Republic of China (PRC): to
upgrade its Level II hospitals and to introduce the concept of Assisted Care
Living.

From 1985-87, Mr. Barren acted as Chief Executive
Officer and Vice Chairman of a $200 million multi-national transportation
services company operating in some 40 different countries involving Europe along
with North, Central and South America, plus Africa and the Middle East in
addition to the Far East prior to its acquisition by a foreign corporation, In
1990-91, he was appointed Chief Executive office for a $900 million
revenue-based company operating throughout North America, Korea and England.
From 1993 to 1996, Mr. Barren initially acted as an advisor and then
became the Chief Executive Officer for an aerospace company in order to affect
its capital formation program. In so doing, he was further appointed a
co-conservator of this company by The Superior Court of Los Angeles,
California.

Prior to becoming Chairman of a technical asset management and
product disposal company located in England, Mr. Barren was Chief
Executive Officer for a multi-national direct sales company, headquartered in
Nanjing (PRC), and serving the Far East. Through 2004, Mr. Barren acted
as the Lead Consultant for a medical services company whose primary activities
focused on Mainland China. 

Because of his vast experience, Mr. Barren has been
featured in more than 150 articles by various newspapers
and internet media in the Far East (China and Japan), Europe and the
United States, as "turnaround" specialist and business expert. Included therein
were also for one of the "Big 4" accounting firms' KMPG’s Banking
Insider, and separately, KMPG's Commissions 

Markets Insider plus the California CPA Magazine,
The Outlook. 

In 2005, Mr. Barren became an audio conferencing
instructor for Progressive Business Publications (PBP) – representing an
audience of some 70,000 people, including Chief Financial

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Officers for both publicly- and privately-held companies. In
2007, he continued as a CPE- accredited instructor but this time the topic was:
“Cash Management: Building and fortifying a strong cash flow strategy.” 

Since
  2005, Mr. Barren has received a number of accolades from various Latin
  American Countries for his many years of service to them. First, he was honored
  by the Central American Parliament and then by the President of CENTROAMERICANA
  DE INVERSIONES S. DE R. L. for his 40-years of service to its member countries
  in aiding their trade, both imports and exports – worldwide. This was then
  followed by honoring Mr. Barren for his countless efforts in helping Latin
  Americans in North America which has resulted in the creation or saving of
  employment of its people. Subsequently, Mr. Barren was also given another
  commendation. This was from FUNHDICOL (Fundacion Hondurena Para El Desarrollo
  Intelectual Colectivo) for his many years of services in which he has assisted
  in many of this institution’s financial transactions which has helped in this
  country’s development.

In 2006, Mr. Barren was the Presenter for "Businessman
of the Year" Award at the Trumpet Awards Ceremony in Atlanta, Georgia - the “Oscars” for
African American Community Service. In 2006, Mr. Barren was presented
with a Certificate of Honor from China's
State-owned Supervision and Administration Commission of the People's Government
of Hunan Province for his "great contribution" for establishing the first
Sino-American Joint Ventured Hospital. Subsequently, he was also the keynote speaker at the 20th Annual China Industry
Development Forum in Dongguan held by the China Tourist Hotels Association and
received a plaque for his being an advisor to
the Association. Mr. Barren, under EMCO/Hanover, has further been
given an exclusive right to acquire majority control in the privatization of the
multiple water treatment facility(s) in China.

In 2007, Mr. Barren, who has appeared on Chinese
television on a number of occasions, was presented with a second Certificate of
Honor. This time, it was in recognition of his efforts in the award of the first
ever granted license to build an assisted-care living community in China which
will consist of some 12,000 senior citizen, housing units. Separately, he also
received a Letter of Appointment as a senior consultant for the Prosperity
of Baotou business and investment from the Baotou Disabled People Welfare Fund
Association of The Red Cross of Baotou City, Inner Mongolia from its Chairman –
Zheng Jinduo. Concurrent with that, Mr. Barren was further appointed a
senior consultant for The Association of Entrepreneur’s Friend, Baotou CPPCC by
its President – Li yu ran. 

In 2008, Mr. Barren joined the Board of Directors of a
publicly-traded U.S. Company, which is an international telecom operator and
enabler plus systems integrator to the multi-media industry by facilitating the
distribution of all forms of content and telecom services to global consumers.
The company also has certain patented technology to prevent credit card fraud.
Besides various worldwide licenses in over a dozen markets in Europe, Asia and
the Middle East, it also has a license to operate telecommunication switching
facilities in China. Through mid-2009, Mr. Barren served as its Company’s
Vice Chairman in addition to being Chairman of its

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Compensation Committees plus the Independent Director for its
Nominating and Corporate Governance Committee along with its Audit Committee.


In May 2009, Mr. Barren met with the Mayor of Shenyang, China. Mr. Li Yingjie named Mr.
  Barren the honorary financial and economic adviser to the City of
  Shenyang. As part of his appointment Mr. Barren will attend
  the City’s yearly economic forum and other key meetings with the Mayor
  of Shenyang. This was a great honor. Mr. Barren is the
  first foreigner to be appointed to be the City’s adviser. In 2011, Mr.
  Barren further received a Certificate of Recognition from Mr. Bingzhong
  Zhang, Director - Chinese & International Experts Organization of China
  (CIEO). He was also a keynote Speaker and Presenter at the Winalite's China
  2011 For You Globa lCongress.Winalite, where Mr. Barren is in
  charge of its North American marketing, including its sales efforts, is a company
  that sells consumer products through direct marketing under a multiple-level
  format and through e-commerce plus selective products to hospitals.

Litigation/ Expert Witness

In litigation support as an
expert witness, Mr. Barren has been accepted as a multi-industry expert
in some 2 dozen industries and has been involved in some 40+ cases, including
against such industry leaders like The Chase Manhattan Bank, Merrill Lynch,
Wells Fargo Bank and The Ford Motor Company - representing a variety of capital
transactions involving all types of capital, plus minority shareholder interest,
management and their fiduciary responsibilities, executive and employee
compensation, wrongful employment terminations, corporate valuations plus a
diversity of corporate transactions, including mergers and acquisitions. As
such, he has given testimony in both District and State Courts plus the U.S. Tax
Court and before the IRS plus acted as an expert on behalf of the Securities and
Exchange Commission. During his 40 year career, he has written more than 500
valuation and fairness opinions.

Media Coverage and Professional Societies Involvements


Mr. Barren, who has been on various television and radio
stations throughout the U.S. as part of his distinguished career, has appeared
before numerous professional societies, including the American Management
Association, where he wrote articles, conducted lectures and seminars on
executive management, strategic planning, corporate finance, merger/acquisition
and other business-related matters. From 1978 through 1995, Mr. Barren
authored and conducted advanced courses in CRISIS MANAGEMENT, CORPORATE
VALUATION TECHNIQUES, MERGER AND ACQUISITIONS, LITIGATION SUPPORT plus CAPITAL
SOURCING under the Continuing Professional Education (CPE) program of the then
32,000-member California Certified Public Accountants Foundation for Education
and Research, the 35,000-member State of New York, and the 30,000-member Texas
Society of Certified Public Accountants.

During the 1980's and 1990's, Mr. Barren appeared on
various radio and television shows as an expert in business and the U. S.
economy. Between 1991-1993, he was a frequent guest speaker to a number of Price
Waterhouse (now PriceWaterhouseCoopers) CFO Forums in Southern California plus
acted as a panel judge for Ernst & Young’s Annual Entrepreneurial Awards.
For

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2001, Mr. Barren was appointed to the Editorial Advisory
Board of Prentice-Hall. 

Academic Credentials plus University Lecturing

From 1990 to 2002, Mr. Barren taught courses as a
part-time visiting lecturer for the Anderson Graduate School of Business-UCLA,
The University of Southern California; Pepperdine University's Executive MBA
Program plus Whittier College of Law and Chapman University's School of Law. In
1995-1996, Mr. Barren co-instructed various "workshop" courses in loan
documentation and valuation procedures for Sanwa Bank, then one of the top five
international banks. 

* * * * *

Mr. Barren has been listed in Marquis' Who's Who in the World since 1989 where
also his academic credentials are presented. These include a Bachelor of Science
degree from Babson College in 1962 in Accounting and Finance. In addition, he
has a Master’s Degree from Bucknell University in 1963 in Finance and Economics
plus in 1967 and 1968, two graduate certificates in International Marketing and
Finance - with one, from the Harvard Business School and the other, from
Cambridge University (Pembroke College) – England. 

Respectively submitted, 

Hanover Federal Capital Corporation 

 

/s/ Bruce W. Barren 

Bruce W. Barren 

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Exhibit C 

Promissory Note

	Principal $500,000 	Issue Date: October 1, 2011
  


SECURED CONVERTIBLE NOTE 

          FOR
VALUE RECEIVED, Smart-Tek Solutions, Inc. (a Nevada corporation), their
employees, heirs, subsidiaries, and successors in interest (hereinafter called
“Borrower”), hereby promises to pay to AMS Outsourcing, a business unit of
American Marine, LLC, a Montana, Limited Liability Company (the “Holder”) on
order, without demand, the sum of Five Hundred Thousand Dollars, with unpaid
accrued interest, on September 30, 2012 (the “Maturity Date”) or sooner as
described herein. The following terms shall apply to this Note: 

ARTICLE I 

  GENERAL PROVISIONS 

          1.1      Principal
Owed: The principal amount of this Note is $500,000.00 that is owing to
Holder as of the Issue Date: 

          1.2      Interest
Rate. Subject to Section 5.6 hereof, interest payable on this Note shall
accrue from the Issue Date at a rate per annum (the "Interest Rate") equal to
six percent (6%) per year on the outstanding principal balance. 

         1.2      Default
Interest Rate. A default interest rate of twelve percent (10%) per annum
shall apply to amounts owed hereunder which are not paid on their respective due
dates. 

          1.2      Payments.
Interest only payments of two thousand five hundred dollars ($2,500.00) shall
first be payable on November 1, 2011 and on the first day of each of the
following months prior to the payment of the entire principal amount of this
Note. 

          1.3      Pre-Payment;
Payments in Excess of Amounts Due. The Borrower shall have the right to pre-pay
the principal prior to the maturity date of this Note without penalty or the
accrual of interest on any balances paid. The Borrower may also accelerate
payments of the principal without penalty or the accrual of interest on any
balances paid. 

ARTICLE II 

  EVENT OF DEFAULT 

          The
occurrence of any of the following events of default ("Event of Default") shall,
at the option of the Holder hereof, make all sums of principal and interest (to
the extent accrued) then remaining unpaid hereon and all other amounts payable
hereunder immediately due and payable, upon demand, without presentment, or
grace period, all of which hereby are expressly waived, except as set forth
below: 

          2.1      Failure
to Pay Principal or Interest. The Borrower fails to pay any installment of
principal, interest or other sum due under this Note when due and such failure
continues for a period of five (10) business days after the due date. 

          2.2     
Breach of Covenant. The Borrower breaches any material covenant or other
term or condition of this Note in any material respect and such breach, if
subject to cure, continues for a period of five (10) business days after written
notice to the Borrower from the Holder. 




          2.3      Breach
of Representations and Warranties. Any material representation or warranty
of the Borrower made herein, or in any agreement, statement or certificate given
in writing pursuant hereto or in connection therewith shall be false or
misleading in any material respect as of the date made and the Closing Date.


          2.4      Receiver
or Trustee. The Borrower shall make an assignment for the benefit of
creditors, or apply for or consent to the appointment of a receiver or trustee
for it or for a substantial part of its property or business; or such a receiver
or trustee shall otherwise be appointed without the consent of the Borrower and
is not dismissed within thirty (30) days of appointment. 

          2.5      Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation proceedings or other
proceedings or relief under any bankruptcy law or any law, or the issuance of
any notice in relation to such event, for the relief of debtors shall be
instituted by or against the Borrower and if instituted against Borrower are not
dismissed within thirty (30) days of initiation. 

          2.6      Cross
Default. A default by the Borrower of a material term, covenant, warranty or
undertaking of any other agreement to which the Borrower and Holder are parties,
or the occurrence of a material event of default under any such other agreement
which is not cured after any required notice and/or cure period. 

ARTICLE III 

  SECURITY INTEREST 

          3.        
Security Interest/Waiver of Automatic Stay. This Note is secured by a
security interest granted to the Holder on the assets sold by Holder to Borrower
pursuant to the October 1, 2011 “Acquisition of Solvis”. The Borrower
acknowledges and agrees that should a proceeding under any bankruptcy or
insolvency law be commenced by or against the Borrower, or if any of the
Collateral (as defined in the Security Agreement) should become the subject of
any bankruptcy or insolvency proceeding, then the Holder should be entitled to,
among other relief to which the Holder may be entitled under the Transaction
Documents and any other agreement to which the Borrower and Holder are parties
(collectively, "Loan Documents") and/or applicable law, an order from the court
granting immediate relief from the automatic stay pursuant to 11 U.S.C. Section
362 to permit the Holder to exercise all of its rights and remedies pursuant to
the Loan Documents and/or applicable law. THE BORROWER EXPRESSLY WAIVES THE
BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION 362. FURTHERMORE, THE
BORROWER EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362
NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE
(INCLUDING, WITHOUT LIMITATION, 11 U.S.C. SECTION 105) SHALL STAY, INTERDICT,
CONDITION, REDUCE OR INHIBIT IN ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY
OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW. The
Borrower hereby consents to any motion for relief from stay that may be filed by
the Holder in any bankruptcy or insolvency proceeding initiated by or against
the Borrower and, further, agrees not to file any opposition to any motion for
relief from stay filed by the Holder. The Borrower represents, acknowledges and
agrees that this provision is a specific and material aspect of the Loan
Documents, and that the Holder would not agree to the terms of the Loan
Documents if this waiver were not a part of this Note. The Borrower further
represents, acknowledges and agrees that this waiver is knowingly, intelligently
and voluntarily made, that neither the Holder nor any person acting on behalf of
the Holder has made any representations to induce this waiver, that the Borrower
has been represented (or has had the opportunity to he represented) in the
signing of this Note and the Loan Documents and in the making of this waiver by
independent legal counsel selected by the Borrower and that the Borrower has
discussed this waiver with counsel. 

ARTICLE IV 

  MISCELLANEOUS 

          4.1     
Failure or Indulgence Not Waiver. No failure or delay on the part of
Holder hereof in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available. 

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          4.2     
Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Borrower to: Smart-Tek Solutions, Inc.,
11838 Bernardo Plaza Court, Suite 140, San Diego, CA 92128, Attn: Kelly Mowrey,
Chief Operating Officer, and (ii) if to the Holder, to AMS Outsourcing, 11838
Bernardo Plaza Court, Suite 210, San Diego, CA 92128, ATTN: Eric Gaer, Chief
Executive Officer. 

          4.3      Amendment
Provision. The term "Note" and all reference thereto, as used throughout
this instrument, shall mean this instrument as originally executed, or if later
amended or supplemented, then as so amended or supplemented. 

          4.4      Assignability.
The obligations of Borrower under this Note are not assignable without the
consent of the Holder. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and the
permitted assigns of the Note. 

          4.5     
Governing Law. This Note shall be governed by and construed in accordance
with the laws of the State of California. Any action brought by either party
against the other concerning the transactions contemplated by this Agreement
shall be brought only in the civil or state courts of California or in the
federal courts located in San Diego, California. Each of the Borrower, Holder
and any signator hereto in his personal capacity hereby waives, and agrees not
to assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction in California of such court, that the
suit, action or proceeding is brought in an inconvenient forum or that the venue
of the suit, action or proceeding is improper. The prevailing party shall be
entitled to recover from the other party its reasonable attorney's fees and
costs. 

          4.6     
Maximum Payments. Nothing contained herein shall be deemed to establish
or require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest
required to be paid or other charges hereunder exceed the maximum permitted by
such law, any payments in excess of such maximum shall be credited against
amounts owed by the Borrower to the Holder and thus refunded to the Borrower.


          IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by
an authorized officer as of the 1st day of October, 2011. 

SMART-TEK SOLUTIONS, INC. 

      
/s/ Kelly Mowrey 

By:
________________________________
       Kelly
Mowrey 
       COO

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WITNESS: 

By:
________________________________


Name: 

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