Document:

exh10_37.htm

    Exhibit
10.37

    

    

    AccountAbilities,
Inc.

    195
Route 9 South, Suite 109

    Manalapan,
New Jersey 07726

     

    February
28, 2008

     

    Rhonda
Faria

    ReStaff
Services, Inc.

    2401
Waterman Boulevard, Suite A3

    Fairfield,
CA 94533

     

    Re:           Exchange
of Notes for Replacement Notes and Stock

     

    Dear Ms.
Faria:

     

    The
following confirms our understanding with respect to the exchange by ReStaff
Services, Inc. (“ReStaff”) of the two Notes dated March 5, 2007 issued to
ReStaff by Accountabilities, Inc. (the “Company”) in the principal amounts of
$300,000 and $2,900,000 (the “Original Notes”) for 250,000 shares of Common
Stock and two notes in the principal amounts of $100,000 and $1,700,000 (the
“New Notes”).

     

    Upon the
execution and delivery of this letter agreement, you will deliver the Original
Notes to the Company for cancellation.  In exchange therefore, you
will receive (a) 250,000 shares of Common Stock and (b) the New Notes in the
forms annexed as Exhibit A-1 and Exhibit A-2 hereto.

     

    If you
agree with the terms set forth above, please countersign this letter in the
space provided below and return a signed copy to the Company with a copy of the
Note.

     

                           Very truly
yours,

     

    

      
        	 	ACCOUNTABILITIES,
      INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Stephen
      DelVecchia	 
	 	 	Name:
      Stephen DelVecchia 	 
	 	 	Title:
      Chief Financial Officer 	 
	 	 	 	 

      

    

     

    
      
        	 	RESTAFF
      SERVICES, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Rhonda
      Faria	 
	 	 	Name:
      Rhonda Faria 	 
	 	 	Title:
      Presidentexh10_38.htm

    Exhibit
10.38

     

    

     

    EXHIBIT
A-1

     

    THE
INDEBTEDNESS EVIDENCED BY THIS PROMISSORY NOTE AND ANY RIGHTS OR REMEDIES
HEREUNDER SHALL BE SUBORDINATE TO MAKER’S PRESENT AND FUTURE BANK AND OTHER
FINANCIAL INSTITUTION DEBT AND OTHER SENIOR DEBT INCURRED OR TO BE INCURRED BY
MAKER.

     

    THE
PAYMENTS UNDER THIS PROMISSORY NOTE ARE SUBJECT TO OFFSET PURSUANT TO SECTION
5.7 OF THE ASSET PURCHASE AGREEMENT ENTERED INTO ON FEBRUARY 26, 2007 BETWEEN
MAKER AND LENDER.

     

    Subordinated
Promissory Note

     

    U.S.
$100,000.00 February 28, 2008

     Manalapan,
NJ

     

    FOR VALUE
RECEIVED, ACCOUNTABILITIES, INC., a Delaware corporation (hereinafter referred
to as the "Maker") promises to pay to the order of RESTAFF, INC., a California
corporation (hereinafter referred to as the "Lender"), at 2401 Waterman
Boulevard, Suite A3, Fairfield, California 94533, or at such address as Lender
may designate from time to time, the principal sum of One Hundred Thousand and
00/100 Dollars ($100,000.00), together with interest thereon at the rate of six
percent (6%) per annum on March 5, 2009.

     

    This
Promissory Note (the “Note”) is made pursuant to the provisions of that certain
Asset Purchase Agreement, dated as of February 26, 2007, by and between Maker
and Lender (the "Asset Purchase Agreement").  Any payment under this
Note may be offset pursuant to the terms of Section 5.7 of the Asset Purchase
Agreement.  The capitalized terms herein not otherwise defined, shall
have the meaning given to such terms in the Asset Purchase
Agreement.

     

    Notwithstanding
anything to the contrary set forth above, if the Maker raises $2,500,000 or more
in a private offering of equity securities prior to March 5, 2009, the Maker
shall pay the balance of the note of One Hundred Thousand Dollars ($100,000) and
accrued interest to Lender no later than 30 days after the completion of such
private offering, in full satisfaction of its obligations under this
Note.

     

    Payments
of the amounts due hereunder shall be made in lawful money of the United States
which shall be legal tender in payment of all debts, public and private, at the
time of payment.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
indebtedness represented by this Note and any rights and remedies hereunder
shall be subordinate to Maker’s present and future bank and other financial
institution debt and other senior debt incurred or to be incurred by Maker and
the indebtedness set forth on Schedule 1.2(a) of the Asset Purchase Agreement,
provided however that this Note shall rank senior to all future acquisition
indebtedness.

     

    Maker
will be in default under this Note if it fails to make payment of any amount due
hereunder within ten (10) days of the applicable due date.

     

    Upon any
default under this Note, with such default continuing for a period of thirty
(30) days after written notice to the Maker of such default, interest will
accrue, commencing at the end of such thirty (30) day period, at an annual rate
equal to the lesser of eighteen percent (18%) or the maximum rate of interest
permitted by applicable law.  Any property of the Maker or of any
endorser held by the Lender hereof may be applied by the Lender to any sums due
and unpaid pursuant to this Note.

     

    As to
this Note and any other instrument securing the indebtedness, the Maker and all
guarantors and endorsers severally waive all notice of acceleration,
presentment, protest and demand, dishonor and non-payment of this Note, and
expressly agreed that the maturity of this Note, or any payment hereunder, may
be extended from time to time without in any way affecting the liability of the
Maker and all guarantors and endorsers.

     

    Should it
become necessary to collect this Note through an attorney, the Maker and any
surety, endorser or guarantor of this Note hereby agrees to pay all costs and
expenses of collection, including reasonable attorneys' fees and any attorneys'
fees incurred in appellate, bankruptcy or post-judgment
proceedings.

     

    This Note
shall be governed by and construed in accordance with the laws of the State of
New Jersey without regard to conflicts of law principles.  The Maker
and Lender agree to submit to the exclusive jurisdiction of the New Jersey state
courts located in Monmouth County, New Jersey to enforce the terms of this
Note.

     

    The Maker
acknowledges and agrees that this Note has been signed and delivered in exchange
for valuable consideration.

     

    This Note
may be prepaid in whole or in part at any time prior to the due date without
penalty.

     

    This Note
may not be changed orally, but only by an agreement in writing, signed by the
party against whom enforcement of any waiver, change, modification or discharge
is sought.

     

    This Note
shall not be transferred, sold, assigned, pledged, hypothecated or otherwise
disposed of by Lender without the prior written consent of the
Maker.  Maker shall not sell, transfer, assign or otherwise dispose of
this Note without the prior written consent of the Lender; provided that Maker
may assign this Note to a subsidiary or affiliate of Maker as long as Maker
remains liable for the obligations hereunder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The term
"Maker" as used herein in every instance shall include the successors and
assigns of Maker.

     

     

    
      
        	 	ACCOUNTABILITIES,
      INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Stephen
      DelVecchia	 
	 	 	Name: 
      Stephen DelVecchia 	 
	 	 	Title: 
      Chief Financial Officer 	 
	 	 	 	 

      

    

                                                                  

    
      	 	RESTAFF
      SERVICES, INC.	 
	 	 	 	 
	
               

            	
              By:
      

            	/s/ Rhonda
      Faria	 
	 	 	Name: 
      Rhonda Faria 	 
	 	 	Title: 
      Presidentexh10_39.htm

    Exhibit
10.39

     

    

     

    EXHIBIT
A-2

     

    THE
INDEBTEDNESS EVIDENCED BY THIS PROMISSORY NOTE AND ANY RIGHTS OR REMEDIES
HEREUNDER SHALL BE SUBORDINATE TO MAKER’S PRESENT AND FUTURE BANK AND OTHER
FINANCIAL INSTITUTION DEBT AND OTHER SENIOR DEBT INCURRED OR TO BE INCURRED BY
MAKER.

     

    THE
PAYMENTS UNDER THIS PROMISSORY NOTE ARE SUBJECT TO OFFSET PURSUANT TO SECTION
5.7 OF THE ASSET PURCHASE AGREEMENT ENTERED INTO ON FEBRUARY 26, 2007 BETWEEN
MAKER AND LENDER.

     

    Subordinated
Promissory Note

     

    U.S.
$1,700,000.00 February 28, 2008

     Manalapan,
NJ

     

    FOR VALUE
RECEIVED, ACCOUNTABILITIES, INC., a Delaware corporation (hereinafter referred
to as the "Maker") promises to pay to the order of RESTAFF, INC., a California
corporation (hereinafter referred to as the "Lender"), at 2401 Waterman
Boulevard, Suite A3, Fairfield, California 94533, or at such address as Lender
may designate from time to time, the principal sum of One Million Seven Hundred
Thousand and 00/100 Dollars ($1,700,000.00), together with interest thereon at
the rate of six percent (6%) per annum, payable in Forty-Eight (48) equal
monthly payments of principal and interest in the amount of Thirty-Nine Thousand
Nine Hundred and Twenty-Four and 55/100 Dollars ($39,924.55), commencing May 1,
2008 , and monthly thereafter on the 1st day of
each month, to account(s) designated by the lender no less than two (2) business
days before a scheduled payment date.

     

    This
Promissory Note (the “Note”) is made pursuant to the provisions of that certain
Asset Purchase Agreement, dated as of February 26, 2007, by and between Maker
and Lender (the "Asset Purchase Agreement").  Any payment under this
Note may be offset pursuant to the terms of Section 5.7 of the Asset Purchase
Agreement.  The capitalized terms herein not otherwise defined, shall
have the meaning given to such terms in the Asset Purchase
Agreement.

     

    The
aggregate principal amount of this Note shall be subject to adjustment in the
event that the Net Income (as defined in the Asset Purchase Agreement) of the
Acquired Business, is less than $1,000,000 in any calendar year, during which
this Note is outstanding.  If the Net Income of the Acquired Business
is less than $1,000,000 during any calendar year, then the principal amount of
the Note shall be reduced to an amount determined by multiplying $1,700,000 by a
fraction, the numerator of which shall be the amount of Net Income of the
Acquired Business for such calendar year, and the denominator of which shall be
the $1,000,000.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Payments
of the amounts due hereunder shall be made in lawful money of the United States
which shall be legal tender in payment of all debts, public and private, at the
time of payment.

     

    The
indebtedness represented by this Note and any rights and remedies hereunder
shall be subordinate to Maker’s present and future bank and other financial
institution debt and other senior debt incurred or to be incurred by Maker and
the indebtedness set forth on Schedule 1.2(a) of the Asset Purchase Agreement,
provided however that this Note shall rank senior to all future acquisition
indebtedness.

     

    Maker
will be in default under this Note if it fails to make payment of any
installment within ten (10) days of the applicable due date.

     

    Upon any
default under this Note, with such default continuing for a period of thirty
(30) days after written notice to the Maker of such default, the unpaid
principal shall, at the option of the Lender, become immediately due and payable
and interest will accrue, commencing at the end of such thirty (30) day period,
at an annual rate equal to the lesser of eighteen percent (18%) or the maximum
rate of interest permitted by applicable law.  Failure to exercise
this right to accelerate the due date, shall not constitute a waiver of Lender's
right to exercise the same in the event of any subsequent
default.  Any property of the Maker or of any endorser held by the
Lender hereof may be applied by the Lender to any sums due and unpaid pursuant
to this Note.

     

    As to
this Note and any other instrument securing the indebtedness, the Maker and all
guarantors and endorsers severally waive all notice of acceleration,
presentment, protest and demand, dishonor and non-payment of this Note, and
expressly agreed that the maturity of this Note, or any payment hereunder, may
be extended from time to time without in any way affecting the liability of the
Maker and all guarantors and endorsers.

     

    Should it
become necessary to collect this Note through an attorney, the Maker and any
surety, endorser or guarantor of this Note hereby agrees to pay all costs and
expenses of collection, including reasonable attorneys' fees and any attorneys'
fees incurred in appellate, bankruptcy or post-judgment
proceedings.

     

    This Note
shall be governed by and construed in accordance with the laws of the State of
New Jersey without regard to conflicts of law principles.  The Maker
and Lender agree to submit to the exclusive jurisdiction of the New Jersey state
courts located in Monmouth County, New Jersey to enforce the terms of this
Note.

     

    The Maker
acknowledges and agrees that this Note has been signed and delivered in exchange
for valuable consideration.

     

    This Note
may be prepaid in whole or in part at any time prior to the due date without
penalty.

     

    This Note
may not be changed orally, but only by an agreement in writing, signed by the
party against whom enforcement of any waiver, change, modification or discharge
is sought.

     

    This Note
shall not be transferred, sold, assigned, pledged, hypothecated or otherwise
disposed of by Lender without the prior written consent of the
Maker.  Maker shall not sell, transfer, assign or otherwise dispose of
this Note without the prior written consent of the Lender; provided that Maker
may assign this Note to a subsidiary or affiliate of Maker as long as Maker
remains liable for the obligations hereunder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The term
"Maker" as used herein in every instance shall include the successors and
assigns of Maker.

     

    

      
        	 	ACCOUNTABILITIES,
      INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Stephen
      DelVecchia	 
	 	 	Name:
      Stephen DelVecchia 	 
	 	 	Title:
      Chief Financial Officer 	 
	 	 	 	 

      

    

     

    
      
        	 	RESTAFF
      SERVICES, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Rhonda
      Faria	 
	 	 	Name:
      Rhonda Faria 	 
	 	 	Title:
      President

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