BINDING AGREEMENT
Exhibit
10.22
BINDING
AGREEMENT
March 18,
2008
ATTN:
Xxxxxx Xxxx
RE:
Asset Purchase
Dear
Stuart,
The
purpose of this letter (the "Letter") is to set forth certain binding
understandings
between FTS Group, Inc. and OTG Technologies, Inc. a newly formed
wholly-owned subsidiary of FTS Group, Inc. (Company was formed to facilitate
the transaction, hereafter referred to as "FTS") and On The Go HealthCare,
Inc. DBA On The Go Technologies, Inc. (hereafter referred to as "OTG")
regarding the sale of selected assets owned by OTG as described in more detail
on exhibit A (here after referred to as the "ASSETS"), assumption of certain
debt of OTG as described in more detail on Exhibit B, the assumption of certain
contracts of OTG as described in more detail on Exhibit C, Confidentiality and
Non-Competition Agreement as described in more detail on Exhibit D, and a
Promissory Note (the "Note") issued to the Company attached as Exhibit
E.
In
consideration of the significant costs to be borne by FTS in pursuing this
proposed
transaction and further in consideration of their mutual undertakings as to the
matters described herein, upon execution of this Letter or counterparts thereof,
the following paragraphs of this letter shall constitute the binding provisions
of the transaction.
1.
Transaction. FTS has acquired the assets
listed on Exhibit A for a combination
of a note and debt assumption as set forth in the exhibits.
2. Purchase Price. Based on the information
currently known by FTS Group, Inc. on the date hereof, the total deal value is
described in detail below in US dollars:
| Deal Value | $4,000,000 |
| Assumed Vendor Debt | $2,900,000 (Subject to Adjustment) |
| OTG Note (Exhibit D) | $1,100,000 (Subject to Adjustment) |
3.
Representations. OTG represents they are
the sole owner of the ASSETS and has full
authority to enter into a sale transaction with FTS, it is understood
that Laurus Master Fund, Ltd. has 1st security interest in the
Assets of the OTG until such time as their Revolving Line of Credit is paid in
full. Both FTS and OTG agree to work in good faith through the outstanding
issues required to complete all closing documents. Both parties agree that as of
March 18, 2008 the transaction is deemed closed. FTS represents that it will
provide Laurus Master Fund, Ltd with a UCC on its new subsidiary OTG
Technologies Group, Inc. a Florida Corp. if required. FTS represents that all
Accounts Receivables prior to the closing date of March 18, 2008 are the
property of Laurus Master Fund, Ltd.
4.
Closing Date. The closing date is March
18, 2008.
5.
Definitive Agreement and Note Agreement.
FTS and OTG intend promptly to complete the asset purchase agreement and note
agreement, the execution of which has been approved by the board of directors of
FTS Group and OTG and will contain comprehensive representations, warranties,
indemnities, conditions
and agreements by OTG and FTS. It is anticipated that the definitive
agreement will be completed by the proposed closing date, unless an
extension is granted and submitted to each party in writing.
6. Non Competition Agreement. Will be included in
the purchase agreement.
7. Access. Seller shall cause OTG to provide to
FTS access to OTG' books and records
relating to the acquired ASSETS and shall cause accountants and other
agents and representatives (collectively, "Representatives") of OTG to cooperate
fully with FTS and its representatives in connection with FTS' acquisition
review of the ASSETS and any of the assets, contracts, liabilities,
operations, records and other aspects of their business relating
to the transaction and potential audit requirements.
8.
Fees and Expense. FTS is responsible for
all of its fees and expenses relating
to its due diligence, accounting, legal, SEC or other costs associated
with the proposed transaction. OTG is responsible for all of its fee's
and expenses relating to the transaction.
9. Entire
Agreement. This letter constitutes the entire agreement between the
parties, superceding all prior oral or written agreements, understandings,
representations and warranties, and courses of conduct and dealing between the
parties on the subject matter hereof. Except as otherwise provided herein, the
binding provisions may be amended or modified only by a writing executed by both
parties.
10. Governing
Law. The binding provisions shall be governed by and construed in
accordance with the laws of the State of Florida.
Please
sign and date this letter in the space provided below to confirm the
mutual
agreements set forth in this binding letter of intent and return a signed
copy to the undersigned.
Signature
Page and Contact Information
BUYER
By:
/s/ Xxxxx
Xxxxxxxxx
Name: Xxxxx
Xxxxxxxxx
Title:
Chief Executive Officer,
Contact
information:
000 Xxxxx
Xx., Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
Facsimile:
000-000-0000
SELLER
By:
/s/ Xxxxxx
Xxxx
Name: Xxxxxx
Xxxx
Title: Chairman
and CEO
Contact
information:
Facsimile:
000 000 0000
Exhibit A
(Description
of ASSETS)
1.
Goodwill
2.
The trade name of On The Go Technologies Group
3.
Assumed contracts
4.
Assumed employees
5.
All related trade contacts
Exhibit B
1.
Approximately $2,900,000 outstanding vendor debt as listed on the accounts
payable which include all invoices that are dated prior to March 17,
2008.
Exhibit C
Contracts
1.
All contracts in the name of On The Go Technologies Group related to the
Value-Added Reseller business as follows:
*
HP (Gold certified partner)
*
IBM - Premier Business Partner (Advanced service partner)
*
Lenovo
*
Lexmark service partner
*
Xerox
*
Cisco Premier authorized
*
Microsoft Gold Certified
*
OKI Data certified
*
Toshiba Notebook certified
*
Apple
*
Isilon
*
Alias
*
Symantec
*
Extreme
*
Fortinet
*
VM Xxxx
*
Autodesk
*
Altiris
*
Pano
*
Codonix
*
Rimage
*
Acuo
*
Equal Logics
*
Viatronix
*
Pacsgear
*
Bluearc
*
Softimage
*
Foundry
*
Extreme
*
Final Cut Pro
*
AJA
*
Automatic Duck
*
Avid Xpress pro
*
Convergent Design
*
Massive
*
The Foundry
*
Tactic
*
Logic Pro
*
Digidesign
*
Xinet
*
Asante
*
Adic
*
X-rite
*
Sony
*
Epson
*
Xyratex
*
Lacie
Exhibit D
CONFIDENTIALITY
AND NON-COMPETITION AGREEMENT
B E T W E
E N
ON THE GO
HEALTHCARE INC., operating as
ON THE GO
TECHNOLOGIES GROUP
(hereinafter
referred to as the "Company")
- and
-
FTS GROUP
operating as
ON THE GO
TECHNOLOGIES GROUP INC.
(hereinafter
referred to as the "Purchaser")
WHEREAS the
Company is engaged in the business of selling computer hardware, software,
supplies and services to customers across Canada, the United States and
abroad;
AND
WHEREAS the Company has offered to sell the operations to the Purchaser
and the
Company will be privy to a great deal of confidential information, the
disclosure of any of which could be very harmful to the Purchaser;
THEREFORE,
for good and valuable consideration, receipt of which is acknowledged,
the Company agrees as follows:
Article 1
- Confidential Information
1.01 The
following constitutes confidential information belonging to the Purchaser:
a)
all customer lists, customer account information, supplier account information,
supplier lists, invoice schedules, commission schedules,
pricing policies, discount policies, and the terms and conditions
of all contracts entered into by the Company with both customers
and suppliers;
b)
the methods, techniques, incentives, devices and all associated information
used by the Company to secure suppliers or attract customers
to the Company;
c)
any intellectual property including, but not limited to, computer hardware
development, computer software development, including programming
code or computer internet web design, produced or developed
by the Purchaser while he is engaged as a Purchaser of the
Company;
d)
all technical information and data, and especially all computer technology
and data, whether maintained on paper or on computer diskette;
e)
all marketing plans and company sales strategies;
f)
all of the Company's financial affairs;
g)
all personnel information, especially the names of all purchasers, the terms
upon which they have agreed to provide their services and the details of their
remuneration; and
h)
all other information which may reasonably be designated as confidential
by the Company.
Article 2
- Disclosure of Confidential Information
Prohibited
2.01
Beginning on the Effective Date of this agreement and at all times afterwards,
the Company agrees that he/she will not use the confidential information
outlined above in Article 1 except to futher the business of the Company, and
that he/she will refrain from disclosing any confidential information to any
person, business or corporation, other than to a purchaser of the Company who
requires access to such information to perform his or her job, without prior
written consent from the Company. However, this restriction will not apply
to any portion of the confidential information which becomes generally known in
the industry, unless the Purchaser is responsible or partly responsible for
making it generally known.
2.02 The Purchaser agrees that all documents provided to
him/her by the Company remain the property of the Company.
2.03 The
Purchaser acknowledges that he/she is not entitled to remove any documents of
any kind from the Company's premises, including any documents containing
confidential information.
Article 3
- Non-Solicitation
3.01 The
Company agrees that during the term of this agreement with the Purchaser,
the Company shall not, either directly or indirectly, for his/her
own benefit or for the benefit of any person, enterprise or entity,
solicit or attempt to solicit the business of any customer of the
Purchaser
Article 4
- Non-Competition
4.01 The
Company agrees that it will not, anywhere in Ontario, directly or indirectly,
carry on, act as agent for, be employed by or become otherwise associated with a
firm, business or corporation which competes with the Purchaser for a period of
two years from the Effective Date of this agreement (the "Non-Compete
Period")
4.02 It
is further agreed that if the Company shall engage in any business in violation
of the obligations herein, the running of the Non-Compete Period referred to
above shall be interrupted until such violation shall cease and shall begin
again only when the Company is in compliance with the provisions of the covenant
whether voluntarily or pursuant to a court order.
Article 5
- General
5.01 The
Company agrees that this Agreement has been made for valuable consideration
and is legally binding.
5.02 The Company agrees that this Agreement is
reasonable in the circumstances and necessary to protect the financial interests
of the Purchaser. If any portions of this Agreement are found not to be legally
enforceable by a Court, the remaining paragraphs or parts will nonetheless be
considered to be legally enforceable.
5.03 The
Company agrees that if he/she is in breach of Articles 2, 3 or 4 above,
the Purchaser will be entitled to obtain a court injunction to prevent
the Company from breaching or continuing to breach such provisions,
in addition to any other remedies the Purchaser may have the right to
pursue.
5.04 The
Company agrees that the Purchaser has given the Company a reasonable opportunity
to obtain independent legal advice before deciding to execute this
Agreement.
All of
which is agreed this 17th day of March 2008 (the "Effective Date").
SIGNED,
SEALED AND DELIVERED
)
ON THE GO HEALTHCARE, INC.
)
) /s/
Xxxxxx Xxxx
)
------------------------------------
)
Name: Xxxxxx Xxxx, CEO
|
|
)
I have authority to bind the
Company
|
)
)
)
) /s/
Xxxxx Xxxxxxxxx
)
------------------------------------
)
Name: Xxxxx Xxxxxxxxx, CEO
|
|
)
I have authority to bind
the Company
|
EXHIBIT E
Promissory
Note
| FACE AMOUNT | $1,100,000 |
| INTEREST RATE | 0% |
| NOTE NUMBER | OTGST001 |
| MATURITY DATE | October 16, 2008 |
FOR VALUE
RECEIVED, OTG Technologies Group, Inc. a Florida corporation (the "Company"),
and wholly-owned subsidiary of FTS Group, Inc., a Nevada Corporation,
hereby promises to pay On The Go Healthcare, Inc. (the "Holder") by
October 16, 2008, (the "Maturity Date"), or earlier, the amount of one
million
one hundred thousand ($1,100,000) U.S. dollars, at such times and on
such
terms and conditions as are specified herein (this "Note"). This Note is
non-interest
bearing.
Article
1 Method of
Payment
The
Company may draw a check or wire transfer the funds for payment to the
order of
the Holder of this Note. A check may be mailed to the Holder's address
as set forth in Article 5 herein.
Article
2 Payments
The
Company shall make minimum monthly cash payments of $150,000 in immediately
available funds beginning on April 1, 2008 and the first of each month until the
note is paid in full (each a "Payment Date")
The
Holder may at its sole option extend the first payment date in
writing.
Notwithstanding
any provision to the contrary in this Note, the Company may pay in
full to the Holder the Face Amount, or any balance remaining thereof,
in cash
at any time and from time to time without penalty ("Prepayment"). Prepayments
will be applied to the next payment due on the payment schedule and
subsequent payments afterwards.
Article
3 Conversion
Upon the
happening of an Event of Default, as set forth in Article 4 below, the
Holder shall have the right to convert any unpaid amounts not to exceed
the
Default Amount, as defined herein, into shares of restricted common stock
of FTS
Group, Inc., at the Holder's sole option. The terms of conversion are
as
follows:
3.01 Conversion Notice. Such conversion shall be
effectuated by surrending to the Company, or its attorney, a facsimile or
original of the signed notice of conversion (the "Notice of Conversion"). The
Notice of Conversion shall set forth the cash amount to be converted (the
"Conversion Amount") which shall not exceed the Default Amount. The restricted
common stock to be issued shall be the Default Amount divided
by the Conversion Rate as set forth in Section 3.02 below. The date on
which the Notice of Conversion is effective ("Conversion Date") shall be the
date delivered pursuant to Article 5 herein. Notwithstanding the foregoing, the
Conversion Date shall be no sooner than the third (3rd) business day following
an Event of Default under this Note.
3.02.
Conversion Rate. The conversion rate (the "Conversion Rate") shall be
95% of
the lowest closing best bid price of FTS Group, Inc.'s common stock on
the three (3) trading days prior to the Conversion Date.
3.03.
True-up. If after 180 calendar days following the issuance of common
stock
pursuant to this Note, the value of the stock is less than the Conversion
Amount, and the Holder still holds the shares, then, the Company
will, within ten (10) business days following the 180th day, pay the
Holder in the Company's discretion in cash or common stock, the
amount by which such value falls short of the Conversion Amount.
Article
4 Defaults and
Remedies
An "Event
of Default" or "Default" occurs if the Company does not make the minimum
monthly cash payment within three (3) business days after the Payment
Date as
set forth in Article 2 above. Such unpaid amounts which would
otherwise
be due to the Holder on one or more Payment Dates shall be deemed the
"Default Amount."
Article
5 Notices
Any
notices, consents, waivers or other communications required or permitted
to be
given under the terms of this Note must be in writing and will be deemed to have
been delivered (i) upon receipt, when delivered personally; (ii) upon receipt,
when sent by facsimile (provided a confirmation of transmission is mechanically
or electronically generated and kept on file by the sending party); or (iii) one
(1) day after deposit with a nationally recognized overnight delivery service,
in each case properly addressed to the party to receive the same at the
following address:
If to the
Holder:
Xxxxxx
Xxxx
Chief
Executive Officer
On The Go
Healthcare, Inc.
00
Xxxxxxxx Xxxxxx, Xxxx 0
Xxxxxxx,
Xxxxxxx
Xxxxxx
X0X 0X0
Facsimile:
(000) 000-0000
If to the
Company:
Xxxxx
Xxxxxxxxx
Chief
Executive Officer
000 Xxxxx
Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
Facsimile:
(000) 000-0000
Article
6 Rules of
Construction
In this
Note, unless the context otherwise requires, words in the singular number
include the plural, and in the plural include the singular, and words
of the
masculine gender include the feminine and the neuter, and when the tense so
indicates, words of the neuter gender may refer to any gender. The
numbers and titles of sections contained in the Note are inserted for
convenience of reference only, and they neither form a part of this Note nor are
they to be used in the construction or interpretation
hereof. Wherever, in this Note, a determination of the Company is
required or allowed, such determination shall be made by a majority of the Board
of Directors of the Company and, if it is made in good faith, it shall be
conclusive and binding upon the Company and the Holder.
Article
7 Senior
Obligation
The
Company shall cause this Note and all other existing Notes with the Holder to be
senior in right of payment to all other Indebtedness of the
Company.
Article
8 Assignment
This Note
is not assignable unless both parties agree in writing.
Article
9 Governing Law
The
validity, terms, performance and enforcement of this Note shall be governed and
construed by the provisions hereof and in accordance with the laws of the State
of Florida applicable to agreements that are negotiated, executed, delivered and
performed solely in the State of Florida.
Article
10 Litigation
The
parties to this agreement will submit all disputes arising under this
agreement
to arbitration in Orlando, Florida before a single arbitrator of the
American Arbitration Association ("AAA"). The arbitrator shall be selected by
application of the rules of the AAA, or by mutual agreement of the parties,
except that such arbitrator shall be an attorney admitted to practice law in the
state of Florida. No party to this agreement will challenge the jurisdiction or
venue provisions as provided in this section.
IN
WITNESS WHEREOF, the parties have duly executed this Note as of the
date
first
written above.
| The Comany: | The Holder: | ||
| FTS Group, Inc. | On The Go Healthcare, Inc. | ||
| Name: | Xxxxx Xxxxxxxxx | Name: | Xxxxxx Xxxx |
| Title: | Chairman and Chief Executive Officer | Title: | Chairman and Chief Executive Officer |
