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Exhibit
10.22
SERVICES AND ESCROW
AGREEMENT
This SERVICES AND ESCROW AGREEMENT (this
“ Agreement ”), dated as of May 8, 2008, is
by and between International RAM Associates LLC, a [Delaware]
limited liability company (“ RAM ”), and FLO
Corporation, a Delaware corporation (“ FLO ”).
RAM and FLO are sometimes hereinafter referred to individually as a
“Party” and collectively as the “Parties.”
Capitalized terms used but not defined herein have the meaning
given to such terms in the Purchase Agreement (as defined
below).
WHEREAS, RAM and FLO have
entered into a Note and Warrant Purchase Agreement, dated as of
May 8, 2008 (the “ Purchase Agreement ”),
for FLO’s issuance and sale of a 12% senior convertible note
(the “ Note ”) in the principal amount of
$325,000 together with certain warrants (the “
Warrants ”) to purchase shares of FLO’s common
stock.
WHEREAS, FLO desires to
purchase the Services (as defined below) from RAM and RAM desires
to provide such Services to FLO, in each case, subject to the terms
and conditions in this Agreement.
WHEREAS, the Parties desire
that FLO shall purchase the Services on a pre-paid basis by issuing
to RAM, pursuant to the Purchase Agreement, the Note and the
Warrants, and that RAM’s consideration for the Note and the
Warrants shall be paid on an in-kind basis by RAM’s promise
to perform the Services as set forth in this Agreement.
NOW, THEREFORE, in
consideration of the premises and mutual covenants, agreements and
provisions herein contained, and intending to be legally bound, the
Parties hereto agree as follows:
ARTICLE I
PROVISION OF
SERVICES
Section 1.1.
Definitions . As used in this Agreement:
“ Service
” or “ Services ” will mean those services
provided by RAM to FLO under this Agreement, including without
limitation the services described on Schedule A , which is
hereby incorporated by this reference, and which may be attached to
this Agreement after the date hereof, in which case the Parties
shall negotiate in good faith the contents thereof reasonably
promptly following the date hereof.
Section 1.2.
Provision of Services . RAM shall provide to FLO the
Services. RAM shall not be obligated to provide, and FLO shall not
be obligated to purchase or accept, any services under this
Agreement other than the Services; provided , however
, that there may be additional services to be provided by RAM to
FLO under other agreements. The Services shall be provided in
accordance with and subject to the terms, limitations and
conditions set forth in this Agreement and in Schedule A
.
Section 1.3. General
Standards of Performance and Conduct . Except as specifically
set forth in Schedule A or otherwise agreed by the Parties
in writing, the Services shall be performed by RAM for FLO in
compliance with all applicable laws in a workmanlike manner and
with professional diligence and skill. RAM personnel shall at all
times comply with all policies and regulations then in effect on
FLO premises of which they have written notice, including, but not
limited to, those relating to workplace conduct, security, and
entry into and departure from said premises. In addition, while on
FLO premises, RAM shall conduct its activities in such a manner as
to seek to avoid any interference with the work or activities of
FLO or other persons.
Section 1.4.
Relationship of Parties . RAM is an independent contractor
and not an agent, partner, employee or joint venturer of FLO.
Employees or agents of RAM providing Services to FLO will not be
deemed employees or agents of FLO. RAM will retain the exclusive
right of control with respect to its employees and
agents.
Section 1.5. Mutual
Cooperation . The Parties shall cooperate with each other in
connection with the performance and receipt of the Services. FLO
shall make available on a timely basis to RAM all information and
materials reasonably requested by RAM to enable RAM to provide the
Services. Upon prior written notice to FLO by RAM, FLO shall give
RAM reasonable access, during regular business hours and at such
other times as are reasonably required (and in a manner so as not
to interfere with the normal business operations of FLO), to the
premises on which FLO conducts business to the extent necessary for
RAM to provide the Services.
Section 1.6.
Confidentiality; Privacy . RAM shall, and shall cause its
officers, directors, employees and affiliates to, keep confidential
and not disclose to any other person any trade secrets or other
confidential, private or proprietary information in their
possession or control related to FLO or related to the Services
(the “ Confidential Information ”), shall treat
all such trade secrets and other confidential and proprietary
information with the same degree of care as RAM accords to
RAM’s own confidential information, but not less than
reasonable care and shall comply with, and shall take any action
necessary or appropriate to facilitate FLO’s compliance with,
FLO’s privacy or similar policies. RAM shall disclose the
Confidential Information only to those of its employees and
contractors who have a need to know the Confidential Information.
RAM certifies that each such employee will have agreed, either as a
condition of employment or in order to obtain the Confidential
Information, to be bound by terms and conditions substantially
similar to those terms and conditions applicable to RAM in this
Section. RAM shall immediately give written notice to FLO of any
unauthorized use or disclosure of any Confidential Information or
other violation of any privacy or similar policy. The obligation of
RAM under this Section 1.6 shall not apply to
information that RAM can show (i) is or becomes generally
available to the public without breach of the commitment provided
for in this Section 1.6 or (ii) is required to be
disclosed by law, order or regulation of a court or tribunal or
governmental authority; provided, however, that, in any such case
(x) RAM shall notify FLO as early as reasonably practicable
prior to disclosure to allow FLO to take appropriate measures to
preserve the confidentiality of Confidential Information,
(y) RAM shall take all steps reasonably necessary to minimize
the amount of Confidential Information to be disclosed and
(z) any such disclosure shall not be considered to be a waiver
of confidentiality for other purposes. A breach of this Section
will cause irreparable and continuing damage to FLO
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for which money damages are
insufficient, and FLO shall be entitled to injunctive relief and/or
a decree for specific performance, and such other relief as may be
proper (including money damages if appropriate). The terms in this
Section shall continue in perpetuity notwithstanding anything to
the contrary in this Agreement. In the event of any conflict
between the terms in this Section and the terms in the Purchase
Agreement, the terms in this Section shall control.
Section 1.7.
Governance . Each Party shall appoint a “Contact
Person” in relation to each of the Services in Schedule
A and shall notify the other Party in writing of such appointed
Contact Persons. The Contact Persons shall be knowledgeable about
the relevant Services and this Agreement and will be responsible
for the ongoing management of the relevant Services. Any dispute,
disagreement or other matter concerning the Services shall be first
referred to the relevant Contact Persons. Each Party may substitute
its Contact Persons by giving the other Party prior written
notice.
Section 1.8. Change
Orders . The Parties acknowledge that this Agreement may not
describe in detail the precise nature of each of the Services to be
provided hereunder. To the extent that questions arise as to
matters relating to the Services that are not covered in this
Agreement, the Parties agree to be guided by the past reasonable
practices of FLO and RAM. Any change in the Services to be provided
or Schedule A or other requirements thereof must be agreed
upon by the Parties in advance of its implementation and, if the
Parties so agree to a change, the Parties shall execute a written
change order describing the change. If any such change would affect
RAM’s actual costs of providing such Services, the Parties
shall negotiate in good faith an adjustment to the fees provided in
Schedule A , which adjustment shall be embodied in the
change order.
ARTICLE II
FEES;
ESCROW
Section 2.1. Fees and
Expenses .
(a) Minimum Guarantee.
RAM shall provide to FLO services, valued by reference to
Schedule A hereto, in an amount equal to $325,000 before
May 8, 2009 (the “ Minimum Guarantee ”). As
used herein, the “ Ending Date ” shall mean
May 8, 2009. FLO and RAM agree that the aggregate fees for the
Services provided hereunder, in the amount of $325,000 (the “
Pre-Paid Amount ”), have been pre-paid by FLO issuing
to RAM the Note and the Warrants. Total consideration for any and
all services provided by RAM under this Agreement, including the
Services, shall not exceed $325,000 unless otherwise expressly
agree to in writing by FLO. Each invoice submitted by RAM for
Services provided shall set forth in reasonable detail the
calculation of the charges and costs upon which the invoiced
amounts are based, and such amounts, if accepted by FLO, shall be
subtracted from the Remaining Pre-Paid Amount (as defined below).
The “ Remaining Pre-Paid Amount ” at any time
means the Pre-Paid Amount less all invoiced amounts accepted by FLO
for Services under this Agreement.
(b) Work Orders.
FLO is responsible for issuing work orders for Services to
RAM (the “ Work Orders ”). FLO agrees to issue
Work Orders to RAM at times and for
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Services such that RAM could
reasonably be expected to satisfy the Minimum Guarantee by the
Ending Date (the “ Minimum Work Orders ”). If,
by the Ending Date, FLO shall not have issued the Minimum Work
Orders and RAM shall have satisfied all reasonable Work Orders that
FLO shall have delivered to RAM prior to such date, then the
Remaining Pre-Paid Amount shall be deemed to be $0.00 as of such
date, and neither the Set-Off nor the Automatic Conversion (each as
defined below) shall be effected.
(c) Set-Off. If,
on the Ending Date, the Remaining Pre-Paid Amount shall be greater
than $0.00, then the principal amount of the Note shall be reduced
by the Remaining Pre-Paid Amount on such date, any interest accrued
on such reduced amount shall be cancelled, and the Warrants shall
be amended to reduce pro-rata the number of shares of common stock
into which each such Warrant is exercisable by the number obtained
by multiplying the number of shares into which such Warrant was
initially exercisable by the Set-Off Ratio (as defined below) (the
“ Set-Off ”). The “ Set-Off Ratio
” means the quotient obtained by dividing the Remaining
Pre-Paid Amount as of the Ending Date by $325,000.
(d) Automatic Conversion
of Series B Preferred Stock. RAM acknowledges it was
permitted to consummate the transactions contemplated by the
Exchange Agreement, dated as of the date hereof (the “
Exchange Agreement ”), between FLO and RAM, in
reliance on it having purchased the Note with a principal amount of
at least $203,618.61 (the “ Minimum Investment
”). If the Set-Off results in the principal amount of the
Note being reduced to less than the Minimum Investment, then
RAM’s shares of Series B Preferred Stock issued to it
pursuant to the Exchange Agreement (the “ Series B
Shares ”) shall be automatically converted into 899,504
shares of FLO common stock (the “ Automatic Conversion
”) on the Ending Date.
Section 2.2. Disputed
Invoices . If FLO disputes an invoiced amount, FLO will provide
written notice to RAM of the reason FLO is disputing the invoiced
amount. Upon receipt of such notice, the Parties will work together
in good faith promptly to resolve the dispute. If any such disputes
are unresolved as of the Ending Date, FLO may, in its sole
discretion, delay effecting the Set-Off and/or Automatic Conversion
until some or all of such disputes are resolved and treat such
invoiced amounts, adjusted if at all pursuant to such resolutions,
as accepted by FLO as of the Ending Date.
Section 2.3. Escrow
Instructions . The provisions in this Section 2.3
shall be referred to herein as the “ Escrow
Instructions. ” RAM hereby authorizes and directs FLO to
hold the Series B Shares, the Note, the Warrants, and any
securities issued pursuant to the terms of any of them during the
term of these Escrow Instructions (the “ Issuable
Securities ,” and, together with the Series B
Shar
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