Document:

monarch10_1.htm

    Exhibit
      10.1

    
 

     

    CERTIFICATE
      OF DESIGNATION OF

     

    SERIES
      A
      PREFERRED STOCK

     

    (PAR
      VALUE $0.001 PER SHARE)

     

    of

     

    Monarch
      Staffing, Inc.

     

    _____________

     

    Pursuant
      to Section 78.1955 of
      the

     

    Nevada
      Revised Statutes

     

    _____________

     

    

     

    Monarch
      Staffing, Inc. (hereinafter called the “Corporation”), a corporation
      organized and existing under and by virtue of the provisions of the law of
      the
      State of Nevada,

     

    DOES
      HEREBY CERTIFY:

     

    FIRST:  The
      Articles of Incorporation (the “Articles of Incorporation”) of the
      Corporation authorizes the issuance of 5,000,000 shares of Preferred Stock
      (the
“Preferred Stock”), in one or more series, and further authorizes the
      Board of Directors of the Corporation to provide by resolution for the issuance
      of shares of Preferred Stock in one or more series not exceeding the aggregate
      number of shares of Preferred Stock authorized by the Articles of Incorporation
      and to determine with respect to each such series, the voting powers, if any
      (which voting powers if granted may be full or limited), and such designations,
      preferences, and relative, participating, optional and other rights, and the
      qualifications, limitations and restrictions appertaining thereto.

     

    SECOND:  A
      resolution providing for and in connection with the issuance of the Preferred
      Stock was duly adopted by the Board of Directors of the Corporation pursuant
      to
      authority conferred on the Board of Directors of the Corporation by the
      provisions of the Articles of Incorporation as aforesaid, which resolution
      provides as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    RESOLVED:  that
      the Board of Directors of the Corporation, pursuant to authority vested in
      it by
      the provisions of the Articles of Incorporation (the ”Articles of
      Incorporation”), of the Corporation, hereby authorizes the issuance of a
      series of Preferred Stock of the Corporation and hereby establishes the powers,
      designations, preferences and relative, participating, optional and other
      rights, and the qualifications, limitations and restrictions appertaining
      thereto in addition to those set forth in such Articles of Incorporation (or
      otherwise provided by law) as follows (the following, referred to hereinafter
      as
“this resolution” or “this Certificate of Designation,” is to be
      filed as part of a Certificate of Designation under Section 78.1955 of
      the
      Nevada Revised Statutes):

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

    

     

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    1.           Designation
      and Number.  The designation of Preferred Stock created
      by this resolution shall be a series of Preferred Stock to be known as
“Series A Preferred Stock” (the “Series A Preferred
      Stock”).  The number of shares constituting Series A Preferred
      Stock which the Corporation shall be authorized to issue shall be
      20,000.

     

    2.           Dividends.  The
      holders of shares of Series A Preferred Stock shall be entitled to receive
      dividends, out of any assets legally available therefor, prior and in preference
      to any declaration or payment of any dividend (payable other than in the
      Corporation’s Common Stock, par value $0.001 per share (the “Common
      Stock”), or other securities and rights convertible into or entitling the
      holder thereof to receive, directly or indirectly, additional shares of Common
      Stock of the Corporation) on the Common Stock, at the rate of $6.00 per share
      (as adjusted for stock splits, stock dividends, combinations, recapitalizations
      and the like) per annum on each outstanding share of Series A Preferred Stock,
      payable quarterly when, as and if declared by the Board of
      Directors.  Such dividends shall be cumulative.

     

    3.           Liquidation
      Preference.  (a) In the event of any liquidation,
      dissolution or winding up of the Corporation, either voluntary or involuntary,
      the holders of the Series A Preferred Stock shall be entitled to receive, prior
      and in preference to any distribution of any of the assets of the Corporation
      to
      the holders of Common Stock, by reason of such holders’ ownership thereof, an
      amount per share equal to $100.00 per share for each share of Series A Preferred
      Stock, as adjusted for any stock dividends, combinations or splits with respect
      to such shares (the “Liquidation Preference”)) then held by
      them, plus accrued but unpaid dividends.  If
      upon the occurrence of such event, the assets and funds thus distributed shall
      be insufficient to permit the payment to such holders of the full aforesaid
      preferential amounts, then, the entire assets and funds of the Corporation
      legally available for distribution shall be distributed ratably among the
      holders of the Series A Preferred Stock in proportion to the preferential amount
      each such holder is otherwise entitled to receive prior and in preference to
      any
      distribution to the holders of Common Stock.

     

    (b)  Upon
      the completion of the distribution required by Section 3(a) above and any other
      distribution that may be required with respect to series of Preferred Stock
      that
      may from time to time come into existence, the remaining assets of the
      Corporation available for distribution to stockholders shall be distributed
      among the holders the Common Stock.

     

     (c)  For
      purposes of this Section 3, a liquidation, dissolution or winding up of the
      Corporation shall be deemed to be occasioned by, or to include, (i) the
      acquisition of the Corporation by another entity by means of any transaction
      or
      series of related transactions (including, without limitation, any
      reorganization, merger or consolidation, but excluding any merger effected
      exclusively for the purpose of changing the domicile of the Corporation); or
      (ii) a sale of all or substantially all of the assets of the Corporation,
unless the Corporation’s stockholders of record as constituted
      immediately prior to such acquisition or sale will, immediately after such
      acquisition or sale (by virtue of securities issued as consideration for the
      Corporation’s acquisition or sale or otherwise) hold at least 50% of the voting
      power of the surviving or acquiring entity in approximately the same relative
      percentages after such acquisition or sale as before such acquisition or
      sale.  In any of the events specified in this Section 3(c), if the
      consideration received by the Corporation is other than cash, its value will
      be
      deemed its fair market value.

     

    4.           Redemption.  The
      Series A Preferred Stock is not redeemable.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.           Conversion.  The
      holders of the Series A Preferred Stock shall have conversion rights as follows
      (the “Conversion Rights”):

     

    (a)  Right
      to Convert.  Each share of Series A
      Preferred Stock shall be convertible, at the option of the holder thereof,
      at
      any time after the date of issuance of such share at the
      office of the Corporation or any transfer agent for such stock, into that number
      of shares of Common Stock (subject to the limitations set forth in Section
      5(j))
      determined by dividing (i) the sum of Liquidation Preference of such share
      of
      Series A Preferred Stock, plus any accrued but unpaid dividend thereon, by
      (ii)
      the Conversion Price (as defined herein).   The “Conversion
      Price” for the Series A Preferred Stock will equal (a) at any time prior to
      November 15, 2007, $0.20 (the “Fixed Conversion Price”) and (b) from and
      after November 15, 2007, the lesser of (i) the Fixed Conversion Price and (ii)
      75% of the Market Price (as defined herein).  “Market Price”
means the average of the lowest three (3) Trading Prices (as defined
      below) for
      the Common Stock during the 20 Trading Day (as defined herein) period ending
      one
      Trading Day prior to the date the holder of Series  A Preferred Stock
      provides written notice of conversion in accordance with Section
      5(b).  “Trading Price” means, for any security as of any date,
      the intraday trading price on the Over-the-Counter Bulletin Board (the “OTCBB”)
      as reported by a reliable reporting service mutually acceptable to and hereafter
      designated by holders of a majority of the then-outstanding shares of Series
      A
      Preferred Stock and the Corporation or, if the OTCBB is not the principal
      trading market for such security, the intraday trading price of such security
      on
      the principal securities exchange or trading market where such security is
      listed or traded or, if no intraday trading price of such security is available
      in any of the foregoing manners, the average of the intraday trading prices
      of
      any market makers for such security that are listed in the “pink sheets” by the
      National Quotation Bureau, Inc.  If the Trading Price cannot be
      calculated for such security on such date in the manner provided above, the
      Trading Price shall be the fair market value as mutually determined by the
      Corporation and the holders of a majority of the then-outstanding shares of
      Series A Preferred Stock being converted for which the calculation of the
      Trading Price is required in order to determine the Conversion Price of such
      Series A Preferred Stock.  “Trading Day” shall mean any day on
      which the Common Stock is traded for any period on the OTCBB, or on the
      principal securities exchange or other securities market on which the Common
      Stock is then being traded.   The Conversion Price shall be
      subject to adjustment as set forth in Section 5(c).

     

     (b)  Mechanics
      of Conversion. Before any holder of Series A
      Preferred Stock shall be entitled to convert the same into shares of Common
      Stock, such holder shall surrender the certificate or certificates therefor,
      duly endorsed, at the office of the Corporation or of any transfer agent for
      the
      Series A Preferred Stock, and shall give written notice to the Corporation
      at
      its principal corporate office, of the election to convert the same and shall
      state therein the name or names in which the certificate or certificates for
      shares of Common Stock are to be issued.  The Corporation shall, as
      soon as practicable thereafter, issue and deliver at such office to such holder
      of Series A Preferred Stock, or to the nominee or nominees of such holder,
      a
      certificate or certificates for the number of shares of Common Stock to which
      such holder shall be entitled as aforesaid.  Such conversion shall be
      deemed to have been made immediately prior to the close of business on the
      date
      of such surrender of the shares of Series A Preferred Stock to be converted,
      and
      the person or persons entitled to receive the shares of Common Stock issuable
      upon such conversion shall be treated for all purposes as the record holder
      or
      holders of such shares of Common Stock as of such
      date.  .

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)  Conversion
      Price Adjustments of Series A Preferred
      Stock.  The Conversion Price of the
      Series A Preferred Stock shall be subject to adjustment from time to time as
      follows:

     

    (i)           If
      the Corporation shall, after the date upon which any shares of Series A
      Preferred Stock were first issued (the “Purchase Date”), fix a record
      date for the effectuation of a split or subdivision of the outstanding shares
      of
      Common Stock or the determination of holders of Common Stock entitled to receive
      a dividend or other distribution payable in additional shares of Common Stock
      or
      other securities or rights convertible into, or entitling the holder thereof
      to
      receive directly or indirectly, additional shares of Common Stock (hereinafter
      referred to as “Common Stock Equivalents”) without payment of any
      consideration by such holder for the additional shares of Common Stock or the
      Common Stock Equivalents (including the additional shares of Common Stock
      issuable upon conversion or exercise thereof), then, as of such record date
      (or
      the date of such dividend distribution, split or subdivision if no record date
      is fixed), the Fixed Conversion Price of the Series A Preferred Stock shall
      be appropriately increased so that the number of shares of Common Stock issuable
      on conversion of each share of Series A Preferred Stock shall be increased
      in
      proportion to such increase of the aggregate of shares of Common Stock
      outstanding.

     

    (ii)           If
      the number of shares of Common Stock outstanding at any time after the Purchase
      Date is decreased by a combination of the outstanding shares of Common Stock,
      then, following the record date of such combination, the Fixed Conversion Price
      for the Series A Preferred Stock shall be appropriately decreased so that
      the number of shares of Common Stock issuable on conversion of each share of
      such series shall be decreased in proportion to such decrease in outstanding
      shares.

     

    (d)  Other
      Distributions. In the event the Corporation shall
      declare a distribution payable in securities of other persons, evidences of
      indebtedness issued by the Corporation or other persons, assets (excluding
      cash
      dividends) or options or rights not referred to in Section 5(c)(i), then, in
      each such case for the purpose of this Section 5(d), the holders of Series
      A
      Preferred Stock shall be entitled to a proportionate share of any such
      distribution as though they were the holders of the number of shares of Common
      Stock of the corporation into which their shares of Series A Preferred Stock
      are
      convertible as of the record date fixed for the determination of the holders
      of
      Common Stock of the corporation entitled to receive such
      distribution.

     

    (e)  Recapitalizations.    If
      at any time or from time to time there shall be a recapitalization of the Common
      Stock (other than a subdivision, combination or merger or sale of assets
      transaction provided for elsewhere in this Section 5 or Section 3) provision
      shall be made so that the holders of the Series A Preferred Stock shall
      thereafter be entitled to receive upon conversion of the Series A Preferred
      Stock the number of shares of stock or other securities or property of the
      Corporation or otherwise, to which a holder of Common Stock deliverable upon
      conversion would have been entitled on such recapitalization.  In any
      such case, appropriate adjustment shall be made in the application of the
      provisions of this Section 5 with respect to the rights of the holders of the
      Series A Preferred Stock after the recapitalization to the end that the
      provisions of this Section 5 (including adjustment of the Conversion Price
      then
      in effect and the number of shares purchasable upon conversion of the
      Series A Preferred Stock) shall be applicable after that event and be as
      nearly equivalent as practicable.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (f)  No
      Fractional Shares and Certificate as to Adjustments.

     

    (i)  No
      fractional shares shall be issued upon the conversion of any share or shares
      of
      the Series A Preferred Stock, and the number of shares of Common Stock to be
      issued shall be rounded to the nearest whole share.  Whether or not
      fractional shares are issuable upon such conversion shall be determined on
      the
      basis of the total number of shares of Series A Preferred Stock the holder
      is at
      the time converting into Common Stock and the number of shares of Common Stock
      issuable upon such aggregate conversion.

     

    (ii)  Upon
      the occurrence of each adjustment or readjustment of the Conversion Price of
      Series A Preferred Stock pursuant to this Section 5, the Corporation, at its
      expense, shall promptly compute such adjustment or readjustment in accordance
      with the terms hereof and prepare and furnish to each holder of Series A
      Preferred Stock a certificate setting forth such adjustment or readjustment
      and
      showing in detail the facts upon which such adjustment or readjustment is
      based.  The Corporation shall, upon the written request at any time of
      any holder of Series A Preferred Stock, furnish or cause to be furnished to
      such
      holder a like certificate setting forth (A) such adjustment and
      readjustment, (B) the Conversion Price for the Series A Preferred Stock at
      the time in effect, and (C) the number of shares of Common Stock and the
      amount, if any, of other property which at the time would be received upon
      the
      conversion of a share of the Series A Preferred Stock.

     

    (g)  Notices
      of Record Date.  In the event of any
      taking by the Corporation of a record of the holders of any class of securities
      for the purpose of determining the holders thereof who are entitled to receive
      any dividend (other than a cash dividend) or other distribution, any right
      to
      subscribe for, purchase or otherwise acquire any shares of stock of any class
      or
      any other securities or property, or to receive any other right, the Corporation
      shall mail to each holder of Series A Preferred Stock, at least 20 days prior
      to
      the date specified therein, a notice specifying the date on which any such
      record is to be taken for the purpose of such dividend, distribution or right,
      and the amount and character of such dividend, distribution or
      right.

     

    (h)  Reservation
      of Stock Issuable Upon Conversion.  The
      Corporation shall at all times reserve and keep available out of its authorized
      but unissued shares of Common Stock, solely for the purpose of effecting the
      conversion of the shares of the Series A Preferred Stock, such number of its
      shares of Common Stock as shall from time to time be sufficient to effect the
      conversion of all outstanding shares of Series A Preferred Stock; and if at
      any
      time the number of authorized but unissued shares of Common Stock shall not
      be
      sufficient to effect the conversion of all then outstanding shares of Series
      A
      Preferred Stock, in addition to such other remedies as shall be available to
      the
      holder of such Preferred Stock, the Corporation will take such corporate action
      as may, in the opinion of its counsel, be necessary to increase its authorized
      but unissued shares of Common Stock to such number of shares as shall be
      sufficient for such purposes, including, without limitation, engaging in best
      efforts to obtain the requisite stockholder approval of any necessary amendment
      to its Articles of Incorporation.

     

    (i)  Notices.
        Any notice required to be given to the holders of shares of
      Series A Preferred Stock shall be deemed given if deposited in the United States
      mail, postage prepaid, and addressed to each holder of record at his address
      appearing on the books of the Corporation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (j)  Beneficial
      Ownership Limitation.  The Corporation shall not effect
      any conversion of the Series A Preferred Stock, and each holder of the Series
      A
      Preferred Stock shall not have the right to convert any  portion of
      the Series A Preferred  Stock to the
      extent  that  after  giving  effect  to
      such  conversion,  such holder (together with the holder's
      affiliates) would beneficially own in excess of 4.99% of the number of shares
      of
      the  Common  Stock  outstanding  immediately  after
      giving  effect  to such conversion.  For purposes
      of the foregoing sentence, the number of shares of Common Stock beneficially
      owned by such holder of Series A Preferred Stock and its affiliates shall
      include the number of shares of Common Stock issuable upon conversion of the
      Series A Preferred Stock with respect to which the determination of such
      sentence is being made, but shall exclude  the  number of
      shares of Common  Stock  which  would be issuable
      upon (A)  conversion  of the  remaining,
      unconverted Series A Preferred Stock beneficially owned by such holder or any
      of
      its affiliates and (B) exercise or conversion of the unexercised or
      unconverted  portion  of  any  other  securities  of  the  Corporation
      subject to a limitation on conversion or exercise analogous to the limitation
      contained herein  beneficially owned by such holder or any of
      its  affiliates.  Except as set forth in the preceding
      sentence, for purposes of this Section 5(j), beneficial ownership shall be
      calculated in accordance with Section 13(d) of the Securities Exchange Act
      of
      1934, as amended.  To the extent that the limitation contained in this
      Section 5(j) applies, the determination of whether the Series A Preferred Stock
      is convertible (in relation to other securities owned by the holder together
      with any affiliates) and of which shares of Series A Preferred Stock are
      convertible shall be in the sole discretion of such holder, and the submission
      of a notice of conversion in accordance with Section 5(b) shall be deemed to
      be
      such holder's determination of whether the shares of Series A Preferred Stock
      may be converted (in relation to other securities owned by such holder) and
      which shares of the Series A Preferred Stock are convertible, in each case
      subject to such aggregate percentage limitations.  To ensure
      compliance with this restriction, a holder of Series A Preferred Stock will
      be
      deemed to represent to the Corporation each time it delivers a notice of
      conversion pursuant to section 5(b) that such notice of conversion has not
      violated the restrictions set forth in this paragraph and the Corporation shall
      have no obligation to verify or confirm the accuracy of such
      determination.  For purposes of this Section 5(j), in determining the
      number of outstanding shares of Common Stock, the holder may rely on
      the  number of outstanding shares of Common Stock as reflected in the
      most recent of the following:  (A) the Corporation's most recent Form
      10-Q or Form 10-K,  as the case may be, (B) a more recent public
      announcement by the Corporation or (C) any other notice by
      the  Corporation or the Corporation's transfer agent setting forth the
      number of shares of Common Stock outstanding.  Upon the written or
      oral request of any holder of Series A Preferred Stock, the Corporation shall
      promptly confirm orally and in writing to the holder the number of shares of
      Common Stock then outstanding.  In any case, the number of outstanding
      shares of Common Stock shall be determined after giving effect to the conversion
      or exercise of securities of the Corporation, including the Series A Preferred
      Stock, by the holder or its affiliates since the date as of which such number
      of
      outstanding shares of Common Stock was reported.  The provisions of
      this Section 5(j) may be waived, at the election of a holder of Series A
      Preferred Stock, upon issuance of the Series A Preferred Stock or thereafter
      upon not less than 61 days' prior notice to the Corporation, and the provisions
      of this Section 5(j) shall continue to apply until such 61st day (or such later
      date, as determined by the holder, as may be specified in such notice of
      waiver).

    

    6.           Voting
      Rights.  In addition to any voting rights provided by
      law, the holder of each share of Series A Preferred Stock shall be entitled
      to
      vote on all matters and shall be entitled to the number of votes per share
      of
      Series A Preferred Stock equal to the number of votes per share a holder of
      the shares of Common Stock into which Series A Preferred Stock is
      convertible (determined taking into account the effective of any applicable
      limitations on conversion as set forth in Section 5(j) above) is entitled to,
      at
      the record date for the determination of the stockholders entitled to vote
      on
      all matters, or, if no such record date is established, at the date such vote
      is
      taken or any written consent of stockholders is solicited.  Except as
      required by law, or as otherwise provided in Section 9 below, the holders of
      shares of Series A Preferred Stock (on an as-converted basis) and Common Stock
      shall vote together as a single class and not as separate classes.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.           Reacquired
      Shares.  Any shares of Series A Preferred Stock
      converted, purchased or otherwise acquired by the Corporation in any manner
      whatsoever shall be retired and cancelled promptly after the acquisition
      thereof.  None of such shares of Series A Preferred Stock shall be
      reissued by the Corporation.

     

    8.           Status
      of Converted Stock. In the event any shares of
      Series A Preferred Stock shall be converted pursuant to
      Section 5 hereof, the shares so converted shall be cancelled and shall not
      be
      issuable by the Corporation.  The Articles of Incorporation of the
      Corporation shall be appropriately amended to effect the corresponding reduction
      in the Corporation’s authorized capital stock.

     

    9.           Protective
      Provisions.  So long as 50% of the
      issued Series A Preferred Stock are outstanding, the Corporation shall not
      without first obtaining the approval (by vote or written consent, as provided
      by
      law) of the holders of at least a majority of the then-outstanding shares of
      Series A Preferred Stock, voting together as a class:

     

    (a)                 alter
      or change the rights, preferences or privileges of the Series A Preferred Stock
      , whether by merger, consolidation or otherwise, where such alteration or change
      would adversely affect the Series A Preferred Stock;

     

     (b)                 redeem,
      repurchase or pay dividends with respect to any shares of stock junior to the
      Series A Preferred Stock; or

     

     (e)                 authorize
      a voluntary dissolution, liquidation or winding up of the
      Corporation.

     

    10.           Notices.  Unless
      otherwise expressly specified or permitted by the terms hereof, all notices,
      requests, demands, consents and other communications hereunder shall be in
      writing and shall be delivered by hand or shall be sent by telex or telecopy
      (with a confirmatory copy sent by a different means within three business days
      of such notice), to the following addresses:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)           if
      to the holder of a share of Series A Preferred Stock, at the holder’s address as
      set forth in the stock register of the Corporation, or at such other address
      as
      may have been furnished to the Corporation by the holder in writing;
      or

     

    (ii)           if
      to the Corporation, at the Corporation’s principal offices or at such other
      address as may have been furnished in writing by the Corporation to the holders
      of the shares of Series A Preferred Stock.  Whenever any notice is
      required to be given hereunder, such notice shall be deemed given and such
      requirement satisfied only when such notice is delivered or, if sent by telex
      or
      telecopier, when received, unless otherwise expressly specified or permitted
      by
      the terms hereof.

     

    

     

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    IN
      WITNESS WHEREOF, Monarch Staffing, Inc. has caused this Certificate of
      Designation to be signed by the Chief Executive Officer this ___ day of May,
      2007.

     

    

     

    Monarch
      Staffing, Inc.

     

    

     

    By:                                                                                             

    Name:

    Title:

    

     

    

    

     

    

     

    

     

    

     

    [Signature
      Page to Certificate of Designation]monarch10_2.htm

    Exhibit
      10.2

     

     

    SUPPORT
      SERVICES AGREEMENT

    

    

    Support
      Services
      Agreement (this "Agreement") dated as of May 11, 2007 (the "Effective
      Date") between Monarch Bay Management Company, LLC, a California limited
      liability company ("MBMC") and Monarch Staffing, Inc., a Nevada corporation
      (“MSTF”).

    

    WHEREAS,
MSTF
      wishes
      to engage MBMC to provide the Services (as defined below) on the terms and
      conditions set forth herein and MBMC wishes to be so retained;

    

    NOW
      THEREFORE, in
      consideration of the premises and of the mutual covenants, conditions and
      agreements contained herein, the parties agree as follows:

    

    

    ARTICLE
      ONE

    SERVICES

    

    1.1           Management
      Services.  MSTF hereby engages MBMC to
      perform the Management Services set forth in Schedule 1 hereto for the benefit
      of MSTF, and MBMC agrees to perform such Management Services, on the terms
      and
      conditions set forth herein.

    

    1.2           Facility
      and Administrative Services.  MSTF
      hereby engages MBMC to perform the Facility and Administrative Services set
      forth in Schedule 1 hereto for the benefit of MSTF, and MBMC agrees to perform
      such Facility and Administrative Services, on the terms and conditions set
      forth
      herein.

    

    1.3           Business
      Development Services.   MSTF hereby engages MBMC, on
      a non-exclusive basis, to identify and introduce to MSTF potential parties
      to
      product development relationships, licensing relationships, customer or
      distribution relationships and other similar transactions or relationships
      with
      MSTF (each, a “BD Transaction”).

    

    1.4           Creditor
      Resolution Services.   MSTF hereby engages MBMC, on
      a non-exclusive basis, to resolve on behalf of MSTF certain claims of MSTF’s
      creditors (the “Creditor Claims”).  MSTF will advise MBMC in writing
      of the Creditor Claims and the confirmed debt of each Creditor Claim (“Confirmed
      Debt”) for which, it requires MBMC’s services. MBMC will, use its reasonable
      efforts to negotiate the Creditor Claims and to attempt to effect a reasonable
      and fair settlement, discharge, or release of Creditor Claims (the “Creditor
      Resolution Services”).  MBMC will consult with MSTF on a regular basis
      with respect to the Creditor Claims assigned to it and prior to presenting
      any
      final agreement to a creditor will consult with MSTF and MSTF will specifically
      approve any such proposed final agreement.

    

    1.5           Other
      Services.  MSTF may, from time to time,
      engage MBMC to perform other services for the benefit of MSTF (“Other
      Services”).   The scope of, the applicable fee for, and any
      additional terms and conditions relating to any such other services shall be
      reflected in a Services Addendum to this Agreement in the form of Exhibit A
      hereto.

    

    
      
        
        

      

      
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    1.6           Reporting.  MSTF
      shall have the right to request written reports at any time during the term
      of
      this Agreement, which shall be furnished within 30 days after such request,
      describing the progress, status of, and other matters pertaining to the
      Management Services, the Facility and Administrative Services, the Creditor
      Resolution Services and any Other Services provided pursuant to Section 1.5
      (collectively, the “Services”) as MSTF shall request. MSTF may freely utilize
      all such information arising out of the performance of the Services under this
      Agreement in any manner desired.

    

    

    ARTICLE
      TWO

    COMPENSATION

    

    2.1           Compensation.

    

    (a)
      Retainer.   Upon execution of this Agreement, MSTF will
      issue to MBMC 5,000 shares of its Series A Preferred Stock, par value $.001
      per
      share, as a non-refundable retainer fee for the Services provided by MBMC
      hereunder.

    

    (b)
Management
      Services.   For each month during the term of this Agreement,
      MSTF will pay to MBMC a fee in respect of the Management Services (the “MS Fee”)
      equal to $20,000 in cash.  The MS Fee will be due and payable on the
      first business day of such month and is non-refundable.

    

    (c)  Facility
      and
      Administrative Services.   For each month during the term of
      this Agreement, MSTF will pay to MBMC a fee in respect of the Facility and
      Administrative Services (the “FAS Fee”) equal to 10% of the MS Fee in
      cash.  The FAS Fee will be due and payable on the first business day
      of such month and is non-refundable.

    

    (d)  Business
      Development
      Services.  MSTF will pay to MBMC a fee (the “BD Fee”) equal to 6%
      of MSTF’s total revenue from any BD Transaction involving MSTF and a partner or
      customer introduced to MSTF by MBMC (each, a “BD Transaction”) that is entered
      into during the term of this Agreement or any Tail Period (as defined
      below)).  The BD Fee will be due and payable in cash, when and as the
      associated revenue from the BD Transaction is collected by MSTF. Notwithstanding
      the foregoing, the BD Fee payable with respect to any BD Transaction will be
      reduced by the amount of any fees paid by MSTF to any investment banker or
      finder engaged by MSTF to represent it in such BD Transaction.

    

    (e)  Creditor
      Resolution
      Services.  For Creditor Claim which MBMC successfully resolves,
      MSTF will pay to MBMC a fee (the “CR Fee”) equal to 20% of the Effected Savings
      (as defined below) in respect of such Creditor Claim.  “Effected
      Savings” means the amount of the Confirmed Debt less the amount which is
      actually paid by MSTF to settle the Creditor Claim. At the MSTF’s option (if
      MSTF’s common stock is then quoted on the OTCBB), CR Fees may be paid in the
      form of shares of MSTF’s common stock (registered under Form S-8 or other form
      to permit the free and immediate resale by MBMC’s designated principals and
      otherwise unlegended and unrestricted), with the number of shares payable
      determined based on a valuation of the common stock equal to 80% of the closing
      bid price of the common stock on the OTCBB on the trading day immediately
      preceding the date of delivery of such shares to MBMC’s designated
      principals.  Payment of each CR Fee shall be made as part of and
      contemporaneous with the settlement date of the Creditor Claim to which it
      relates.

    

    (f)  Other
      Services.   IF MSTF has engaged to perform any Other
      Services, MSTF will pay to MBMC the fee specified for such Other Services in
      the
      applicable Services Addendum (the “Other Services Fee”).  Unless
      otherwise specified in the applicable Services Addendum, the Other Services
      Fee
      will be due and payable in cash on the first business day of each month during
      which the Other Services are provided and will be non-refundable.

    

    2.2           Reimbursement.  MSTF
      will reimburse MBMC for any and all reasonable expenses incurred by MBMC in
      connection with MBMC's performance of the Management Services and any Other
      Services; provided, however, that any such expenses must be pre-approved
      by MSTF and otherwise adhere to control procedures implemented by MSTF. All
      requests for reimbursement for expenses must be accompanied by documentation
      in
      form and detail satisfactory to MSTF.  MSTF will reimburse MBMC for
      expenses incurred in compliance with this Section 2.2 within fifteen days
      following MSTF’s receipt of MBMC’s invoice therefore.

    

    

    ARTICLE
      THREE

    REPRESENTATIONS,
      WARRANTIES AND COVENANTS

    

    3.1           Representations
      and Warranties.  Each party represents
      and warrants to the other that:

    

    (a)
      It has not entered into any
      agreement, whether written or oral, in conflict with this Agreement;
      and

    

    (b)
      It has the full power and authority
      to enter into this Agreement.

    

    3.2           MBMC’s
      Covenants.  MBMC:

    

    (a)
      shall act as an independent
      contractor with no authority to obligate MSTF by contract or
      otherwise;

    

    (b)
      shall exercise only such powers and
      perform such duties as may from time to time be vested in MBMC or assigned
      to
      MBMC by MSTF;

    

    (c)
      shall devote such time and effort
      as is reasonably necessary to provide the Services;

    

    (d)
      shall comply with all applicable
      laws in the performance of the Services; and

    

    (e)
      shall not assign or subcontract
      performance of this Agreement or any of the Services to any person, firm,
      company or organization without MSTF’s prior written consent;

    

    
      
        
        

      

      
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      ARTICLE
        FOUR

    

    CONFIDENTIAL
      INFORMATION

    

    4.1           Confidentiality.  MBMC
      shall, during the term of this Agreement and for a period of five years
      thereafter, keep all MSTF Confidential Information confidential and use such
      information only for the purposes expressly set forth herein.  MSTF
      Confidential Information shall mean all information concerning MSTF or its
      current or planned business, which is disclosed to MBMC by MSTF or which results
      from, or in connection with, any Services performed pursuant to this
      Agreement.

    

    4.2           Access.  MBMC
      agrees to limit the access to MSTF Confidential Information to only those
      persons under MBMC's direct control who, with MSTF’s knowledge and consent, are
      responsible for performing the Services set forth in Article One.

    

    4.3           Authorized
      Disclosure.  MBMC shall have no obligation of
      confidentiality and non-use with respect to any portion of MSTF Confidential
      Information which (i) is or later becomes generally available to the public
      by
      use, publication or the like, through no act or omission of MBMC; (ii) is
      obtained from a third party who had the legal right to disclose the information
      to MBMC; or (iii) MBMC already possesses as evidenced by MBMC’s written records
      predating receipt thereof from MSTF.

    

    4.4           Return
      of Information.  Upon the termination of
      this Agreement, MBMC will promptly return to MSTF all materials, records,
      documents, and other MSTF Confidential Information in tangible
      form.  MBMC shall retain no copies except as required by law of such
      materials and information and, if requested by MSTF, will delete all MSTF
      Confidential Information stored in any magnetic or optical disc or
      memory.

    

    4.5           Third
      Party Information.  MBMC shall not, in connection with
      the Services to be performed under this Agreement, disclose to MSTF any
      information, which is confidential or proprietary to MBMC, or any third
      party.

    

    

    
      
        
        

      

      
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    ARTICLE
      FIVE

    INDEMNITY;
      LIMITATION OF LIABILITY

    

    5.1           Indemnity.

    

    (a)  MSTF
      will indemnify and
      hold harmless MBMC against any and all losses, claims, damages, obligations,
      penalties, judgments, awards, liabilities, costs, expenses and disbursements
      (and any and all actions, suits, proceedings and investigations in respect
      thereof and any and all legal and other costs, expenses and disbursements in
      giving testimony or furnishing documents in response to a subpoena or
      otherwise), including, without limitation, the costs, expenses and
      disbursements, reasonably incurred, as and when incurred, of investigating,
      preparing or defending any such action, suit, proceeding or investigation
      (whether or not in connection with litigation in which MBMC is a party),
      directly or indirectly, caused by, relating to, based upon, arising out of,
      or
      in connection with this Agreement or MBMC's performance hereunder, except to
      the
      extent primarily caused by the gross negligence or willful misconduct of
      MBMC.

    

    (b)  The
      indemnification
      provisions shall be in addition to any liability which MSTF may otherwise have
      to MBMC or the persons indemnified below in this sentence and shall extend
      to
      the following: MBMC, its affiliated entities, members, employees, legal counsel,
      agents and controlling persons (within the meaning of the federal securities
      laws), and the officers, directors, employees, legal counsel, agents and
      controlling persons of any of them. All references to MBMC in this Article
      Five
      shall be understood to include any and all of the foregoing.

    

    5.2           Limitation
      of Liability.  MBMC shall not have any liability (whether
      direct or indirect, in contract or tort or otherwise) to MSTF for or in
      connection with this Agreement or MBMC’s performance hereunder, except to the
      extent that any such liability is found in a final judgment by a court of
      competent jurisdiction (not subject to further appeal) to have resulted
      primarily from MBMC's gross negligence or willful misconduct.  In no
      case shall MBMC’s liability (whether direct or indirect, in contract or tort or
      otherwise) to MSTF for or in connection with this letter agreement or MBMC’s
      performance hereunder exceed the aggregate fees paid by MSTF to MBMC
      hereunder.

    

    

    ARTICLE
      SIX

    TERM
      AND TERMINATION

    

    6.1           Term.
      The initial term of this Agreement shall be from the Effective Date
      through the first anniversary thereof (the “Initial Term”).  After the
      Initial Term, the term of this Agreement will automatically be extended for
      an
      additional successive one-year periods unless either party provides written
      notice to the other party of its intent not to so extend the term at least
      30
      days before the expiration of the then current term.

    

    6.2           Termination.  This
      Agreement may be terminated by either party upon the breach of a material term
      hereof by the other party, which breach remains uncured for 30 days after the
      date that the non-breaching party has served written notice on the other party,
      which notice will set forth the basis of such breach and the non-breaching
      party's intent to terminate the Agreement.

    

    6.3           Effect
      of Termination.  Upon the expiration or
      termination of this Agreement, each party shall be released from all obligations
      and liabilities hereunder except those arising under Articles Four, Five and
      Eight; provided that, following such termination, MBMC shall be entitled to
      receive (a) all amounts payable by MSTF to MBMC through the date of expiration
      or termination and (b) 100% of the BD Fees with respect to any BD Transactions
      consummated within a period of twelve months following the termination of this
      Agreement (the “Tail Period”) with any party identified or introduced by MBMC to
      MSTF.

    

    

    
      
        
        

      

      
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    ARTICLE
      SEVEN

    MISCELLANEOUS

    

    7.1           Relationship
      of the Parties.

    

    (a)  MSTF
      is a sophisticated
      business enterprise that has retained MBMC for the limited purposes set forth
      in
      this letter agreement, and the parties acknowledge and agree that their
      respective rights and obligations are contractual in nature. MSTF recognizes
      that the relationship contemplated hereby is not an exclusive relationship
      for
      MBMC or any of its personnel.  Each party disclaims an intention to
      impose fiduciary obligations on the other by virtue of the engagement
      contemplated by this Agreement.

    

    (b)  The
      Services do not
      include requiring MBMC to engage in any activities for which an investment
      advisor's registration or license is required under the U.S. Investment Advisors
      Act of 1940, or under any other applicable federal or state law; or for which
      a
      "broker's" or "dealer's" registration or license is required under the U.S.
      Securities Exchange Act of 1934, or under any other applicable federal or state
      law.  MBMC's work on this engagement shall not constitute the
      rendering of legal advice, or the providing of legal services, to
      MSTF.  Accordingly, MBMC shall not express any legal opinions with
      respect to any matters affecting MSTF.

    

    (c)  MBMC
      will be responsible
      for making appropriate filings and payments to the federal, state and local
      taxing authorities, including payments of all withholding and payroll taxes
      due
      on compensation received hereunder, estimated income payments, employment and
      self-employment taxes, if applicable.

    

    7.2           Waiver.
      None of the terms of this Agreement may be waived except by an express
      agreement in writing signed by the party against whom enforcement of such waiver
      is sought.  The failure or delay of either party in enforcing any of
      its rights under this Agreement shall not be deemed a continuing waiver of
      such
      right.

    

    7.3           Entire
      Agreement. This Agreement constitutes the entire
      agreement between the parties with respect to the subject matter hereof and
      supersedes all prior agreements and understandings among the parties (whether
      written or oral) relating to said subject matter, including without limitation
      the letter agreement, dated March 21, 2006, between MSTF (formerly MT Ultimate
      Healthcare Corp.) and MBMC, which is hereby terminated.

    

    
      
        
        

      

      
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    7.4           Amendments.  This
      Agreement may not be released, discharged, amended or modified in any manner
      except by an instrument in writing signed by a duly authorized officer of MSTF
      and MBMC.

    

    7.5           Assignment.  MSTF
      has specifically contracted for the Services of MBMC and, therefore, MBMC may
      not assign or delegate MBMC's obligations under this Agreement, either in whole
      or in part, without the prior written consent of MSTF.

    

    7.6           Severability.  If
      any provision of this Agreement is, becomes, or is deemed invalid, illegal
      or
      unenforceable in any jurisdiction, such provision shall be deemed amended to
      conform to the applicable laws so as to be valid and enforceable, or, if it
      can
      not be so amended without materially altering the intention of the parties
      hereto, it shall be stricken and the remainder of this Agreement shall remain
      in
      full force and effect.

    

    7.7           Headings.
      Article and Section headings contained in the Agreement are included
      for convenience only and are not to be used in construing or interpreting this
      Agreement.

    

    7.8              Notices.  All
      notices provided for in this Agreement shall be in writing and shall be deemed
      effective when either served by personal delivery or sent by express, registered
      or certified mail, postage prepaid, return receipt requested, to the other
      party
      at the corresponding mailing address set forth below or at such other address
      as
      such other party may hereafter designate by written notice in the manner
      aforesaid.

    

    7.9              Force
      Majeure.  MBMC shall be excused for
      failure to provide the Services hereunder to the extent that such failure is
      directly or indirectly caused by an occurrence commonly known as force majeure,
      including, without limitation, delays arising out of acts of God, acts or orders
      of a government, agency or instrumentality thereof (whether of fact or law),
      acts of public enemy, riots, embargoes, strikes or other concerted acts of
      workers (whether of MBMC or other persons), casualties or accidents, delivery
      of
      materials, transportation or shortage of cars, trucks, fuel, power, labor or
      materials or any other causes, circumstances or contingencies that are beyond
      the control of MBMC; provided, however, that MBMC shall use its best
      efforts to resume provision of the Services as soon as possible. Notwithstanding
      any events operating to excuse performance by MBMC, this Agreement shall
      continue in full force for the remainder of its term and any renewals
      thereof.

    

    7.10                      Counterparts.  This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original and all of which together shall constitute one and the same
      document, binding on all parties notwithstanding that each of the parties may
      have signed different counterparts.

    

    7.11                      Governing
      Law.  This Agreement shall be governed by and construed
      in accordance with the laws of the state of California and the parties to this
      Agreement hereby submit to the exclusive jurisdiction of the courts, both state
      and federal, in the County of Orange, State of California.

    

    
      
        
        

      

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

    

    MONARCH
      BAY MANAGEMENT COMPANY, LLC

    

    

    ____________________________________

    By:
      Keith
      Moore

    Title:
      Managing Member

    Address:
      30950 Rancho Viejo Rd #120

         San
      Juan
      Capistrano, CA  92675

    

    MONARCH
      STAFFING, INC.

    

    

    ____________________________________

    By:
      Joel
      Williams

    Title:
      Chief Executive Officer

    Address:  30950
      Rancho Viejo Rd #120

         San
      Juan
      Capistrano, CA  92675

     

    
      
        
        

      

      
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    Schedule
      1

    Management
      Services

    

    
      	
              ·  

            	
              Make
                available an individual acceptable to MSTF in its sole discretion
                to serve
                as Chief Financial Officer of MSTF.

            

    

    
      	
              ·  

            	
              Perform
                all principal accounting and financial officer
                duties.

            

    

    
      	
              ·  

            	
              Direct
                all finance, accounting and treasury functions including cash forecasting,
                cash management, operational budgeting, month-end closing, and ensure
                accuracy and compliance in accounting/financial
                reporting.

            

    

    
      	
              ·  

            	
              Re-engineer
                the Finance Department - transform finance operations through improved
                processes, advising on financial performance, evaluation of outsourcing
                options, best management practices, evaluating/appraising strategic
                partnerships.

            

    

    
      	
              ·  

            	
              Support
                fundraising activities.

            

    

    
      	
              ·  

            	
              Analyze
                financial and operating information for management to facilitate
                decision-making and provide input for corrective action, where
                applicable.

            

    

    
      	
              ·  

            	
              Recommend/implement
                improvements to ensure the integrity of the company’s financial
                information and systems.

            

    

    
      	
              ·  

            	
              Forecast
                and monitor financial information against goals and operating
                strategy.

            

    

    
      	
              ·  

            	
              Manage/oversee
                relationships with independent auditors, banks and investment banking
                community.

            

    

    
      	
              ·  

            	
              Handle
                financial negotiations with other third party
                relationships.

            

    

    
      	
              ·  

            	
              Prepare
                quarterly updates to the financial
                forecast.

            

    

    
      	
              ·  

            	
              Lead
                the financial due diligence
                efforts.

            

    

    
      	
              ·  

            	
              Lead
                the integration of accounting and finance systems for
                mergers.

            

    

    

    Facility
      and Administrative Services

    

    
      	
              ·  

            	
              Provision
                of corporate headquarters office
                space.

            

    

    
      	
              ·  

            	
              Provision
                of utilities, telecommunications, cleaning and other services related
                to
                maintaining corporate headquarters office
                space.

            

    

    
      	
              ·  

            	
              Shipping
                and postage related to corporate headquarters
                functions

            

    

     

    
 

    
      
        
        

      

      
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    Attachment
      A

    Services
      Addendum

    

    

    
      	
              Scope
                of Other Services:

               

               

               

               

            	 
	
              Other
                Services Fee:

               

               

               

            	 
	 	 
	
              Other
                Terms and Conditions:

               

               

               

               

               

            	 

    

    

     

    Acknowledged
      and agreed by:

     

    

    MONARCH
      STAFFING, INC.

    

    

    
      	
               

            	
              By:
                ______________________

            

    

    

    
      	
               

            	
              Date:

            

    

    

    

    MONARCH
      BAY MANAGEMENT COMPANY, LLC

    

    

    
      	
               

            	
              By:
                ______________________

            

    

    

    Date:

    

    

    
      
        
        

      

      
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