Exhibit 2
ESCROW AGREEMENT
ESCROW AGREEMENT dated this 5th day of February, 2002 by and among
I-trax, Inc., a Delaware corporation (the "COMPANY"), Xxxx Xxxxxx solely in his
capacity as limited agent of the shareholders of WellComm (as defined below)
pursuant to the Merger Agreement (as defined below) ("WELLCOMM REPRESENTATIVE")
and Five Points Bank, a Nebraska state chartered bank (the "ESCROW AGENT"). The
Company, WellComm Representative and Escrow Agent are sometimes referred to
herein individually as a "PARTY" and collectively as the "PARTIES."
BACKGROUND
A. I-trax, WellComm Group, Inc., an Illinois corporation ("WELLCOMM"),
WC Acquisition, Inc., an Illinois corporation ("ACQUISITION") and a subsidiary
of I-trax, and such other parties as are specifically named therein are parties
to a Merger Agreement dated as of January 28, 2002, as amended effective as of
the date hereof (the "MERGER AGREEMENT"). Except as provided herein, capitalized
terms used but not defined herein have the meanings given to such terms in the
Merger Agreement.
B. The Merger Agreement contemplates, among other things, a merger of
WellComm with and into Acquisition, in which merger WellComm will continue as
the surviving corporation. In the merger, I-trax will issue to the former
stockholders of WellComm an aggregate of 7,440,000 I-trax Shares (the "MERGER
SHARES").
C. Of the Merger Shares being delivered at the Closing, an aggregate of
1,000,000 shares (the "ESCROW SHARES") are simultaneously being deposited by
I-trax into escrow as security for any Adverse Consequence for which I-trax is
entitled to be indemnified pursuant to Section 8 of the Merger Agreement or for
such other matters as are set forth in the Merger Agreement.
D. The Parties now wish to provide for the appointment of an escrow
agent to hold the Escrow Shares, and to set forth the terms and conditions under
which the Escrow Shares shall be disbursed.
AGREEMENT
NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto agree as follows:
1. APPOINTMENT OF ESCROW AGENT. The WellComm Representative and the
Company hereby appoint the Escrow Agent as the escrow agent under this Agreement
and the Escrow Agent hereby accepts such appointment and agrees to hold the
Escrow Shares deposited into escrow with it pursuant to the Merger Agreement in
accordance with the terms hereof, and to perform its other duties hereunder.
2. ESTABLISHMENT OF ESCROW ACCOUNT. Concurrently with the execution of
this Agreement, I-trax, as provided in Section 2(j) of the Merger Agreement,
shall deliver the Escrow Shares represented by a single stock certificate in the
name of the Escrow Agent, to the Escrow Agent, which shall upon receipt thereof
provide written confirmation to the other Parties that such shares have been
deposited with it. The portion of the Escrow Shares attributable to each
WellComm Stockholder is as set forth on ANNEX A hereto (such portion being
hereinafter referred to, with respect to any particular WellComm Stockholder, as
that WellComm Stockholder's "APPLICABLE ESCROW SHARES").
3. SECURITY INTEREST. The Company shall have a security interest in the
Escrow Shares for purposes of satisfying any indemnity claim of the Company
against any Adverse Consequence.
4. NO LIQUIDATION OF SHARES. The Escrow Agent shall not liquidate or be
required to liquidate any Escrow Shares prior to any delivery of all or a
portion of such shares pursuant to the terms of this Agreement.
5. DIVIDENDS; VOTING. For Federal income tax purposes or otherwise,
each WellComm Stockholder shall be deemed to be the owner of his, her or its
Applicable Escrow Shares while such shares are held by the Escrow Agent. Each
WellComm Stockholder shall be entitled to receive any regular or liquidating
dividends paid on his, her or its Applicable Escrow Shares. While the Escrow
Shares are held by the Escrow Agent, each WellComm Stockholder shall be entitled
to vote his, her or its Applicable Escrow Shares.
6. FEES AND EXPENSES OF ESCROW AGENT. The Escrow Agent's fees and
expenses shall be borne one half by the Company and one half WellComm
Representative and shall be paid promptly upon receipt of an invoice from the
Escrow Agent.
7. DELIVERY OF SHARES. The Escrow Agent shall deliver the Escrow Shares
only:
(a) In accordance with mutual written and executed directions of the
Company and the WellComm Representative; or
(b) In accordance with the terms and provisions of Section 8 hereof; or
(c) If no Claims are then pending 800,000 of the Escrow Shares, to the
WellComm Stockholders on the later of (i) April 1, 2003 or (ii) within three (3)
business days of the Escrow Agent's receipt of written notice from the Company
and the WellComm Representative that the Company's independent auditors have
delivered the final audited statements of the Company covering the Company's
fiscal year ended December 31, 2002 to the Company; or
(d) If no Claims are then pending 200,000 of the Escrow Shares to the
WellComm Stockholders on May 1, 2005 without any further instructions from any
Party.
Any delivery of Escrow Shares to the WellComm Stockholders pursuant to
this Agreement shall be made to the WellComm Stockholders pro rata in accordance
with the percentage interests in the Escrow Shares of each WellComm Stockholder
as set forth on ANNEX A attached hereto.
8. CLAIMS PROCEDURES. If, while the Escrow Shares are held in
escrow by the Escrow Agent, the Company acting in good faith, shall determine
that it has incurred a loss as a result of an Adverse Consequence for which the
Company is entitled to be indemnified out of the Escrow Shares (a "CLAIM"),
then:
(a) The Company shall deliver to the Escrow Agent and the WellComm
Representative written notice of the Claim (a "CLAIM NOTICE"). The Claim Notice
shall specify the reasons for the conclusion that a loss caused by an Adverse
Consequence has been incurred, the approximate date on which such Claim was
first incurred, the dollar amount of the loss, if it can be reasonably
estimated, and the number of the Escrow Shares representing such dollar amount
of the loss as calculated pursuant to Sections 8(b) or 8(d), as applicable, of
the Merger Agreement (the "CLAIM SHARES").
(b) On the tenth (10th) business day following the date on which the
Company shall give written notice to WellComm Representative and the Escrow
Agent of the Claim, the Escrow Agent shall release and deliver to the Company
from the Escrow Shares the number of Claim Shares set forth in the Claim Notice,
together with any dividends earned thereon; PROVIDED, HOWEVER, that if the
Escrow Agent and the Company shall receive a written notice from WellComm
Representative (an "OBJECTION NOTICE"), at any time prior to the date on which
it would otherwise be required to so release the Claim Shares pursuant to this
Section 8(b), stating that WellComm Representative objects to the Company's
Claim Notice because the Company has not incurred all or a portion of the dollar
amount of the loss and specifying the reasons for such conclusion and the
portion, if any, of the Claim Shares, calculated on the same basis and as of the
same date as provided for in Section 8(a) above, to which the Company is
entitled, the Escrow Agent shall: (i) release out of the Escrow Shares only the
undisputed portion, if any, of the Claim Shares set forth in the Claim Notice
together with any dividends earned thereon; (ii) not release from the Escrow
Shares the remainder of the Claim Shares; and (iii) promptly notify the other
Parties of the amounts so released and retained pursuant to this Section 8(b).
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(c) If the Escrow Agent distributes to the Company a number of shares
less than the Claim Shares pursuant to Section 8(b) above and the Parties
cannot, within an additional ten (10) days of the Claim Notice, resolve the
dispute, the extent to which the Company has suffered an Adverse Consequence
shall be resolved through an arbitration proceeding conducted in Philadelphia,
Pennsylvania, under the rules of the American Arbitration Association. Upon
delivery to the Parties of the arbitrator's determination, the Escrow Agent
shall promptly deliver to the Company that number of the Escrow Shares,
calculated on the same basis and as of the same date as provided for in Section
8(a) above, as equals the loss caused by the Adverse Consequence as determined
by the arbitrator, taking into consideration the shares, if any, that may have
already been delivered by the Escrow Agent with respect to such Adverse
Consequence pursuant to Section 8(b) above. The fees and expenses of arbitration
shall be paid by the Company and the WellComm Stockholders as follows: (i) if
the arbitrator resolves all of the disputes in favor of the Company, the
WellComm Stockholders shall be responsible for all of the fees and expenses of
the arbitration; (ii) if the arbitrator resolves all of the disputes in favor of
the WellComm Stockholders, the Company shall be responsible for all of the fees
and expenses of the arbitration; and (iii) if the arbitrator resolves some of
the disputes in favor of the Company and the rest of the disputes in favor of
the WellComm Stockholders, the Company shall be responsible for a proportionate
amount of the fees and expenses of the arbitration based on the dollar amount of
the disputes resolved against the Company compared to the total dollar amount of
all disputes submitted to the arbitrator and the WellComm Stockholders shall be
responsible for a proportionate amount of the fees and expenses of the
arbitration based on the dollar amount of the disputes resolved against the
WellComm Stockholders compared to the total dollar amount of all disputes
submitted to the arbitrator.
9. TRANSFER AGENT. If the Escrow Shares are to be divided among the
WellComm Stockholders and the Company, the Escrow Agent shall return the
certificate(s) to the Company's transfer agent directing that the shares be
issued to the applicable WellComm Stockholders and the Company in accordance
with the instructions received by the Escrow Agent.
10. TERMINATION. This Agreement shall terminate on May 2, 2005 (such
date, the "TERMINATION DATE"); PROVIDED, HOWEVER, that if all Escrow Shares
shall have been distributed by the Escrow Agent in accordance with the terms
hereof prior to such date, this Agreement shall terminate on the date on which
the last share held by the Escrow Agent pursuant to the terms of this Agreement
is so distributed.
11. RETENTION OF ESCROW SHARES FOLLOWING THE TERMINATION DATE. If, at
the Termination Date, there shall be pending any Claim asserted pursuant to
Section 8 above, then the Company may deliver to the Escrow Agent, at any time
prior to the Termination Date, with a copy to WellComm Representative, a written
notice describing, in reasonable detail, the basis for each such Claim and the
Company's reasonable estimate of the loss caused by the Adverse Consequence, and
the corresponding number of Escrow Shares required to be reserved on account of
such loss. The Escrow Agent shall set aside and retain such number of Escrow
Shares set forth in the written notice so delivered by the Company as a reserve
to cover such Claim (the Escrow Shares so set aside on account of such loss
caused by the Adverse Consequence, as reduced from time to time pursuant to the
provisions of this Section 11 and Section 8 above are herein called the
"RESERVED SHARES"). The Reserved Shares shall be released from time to time
hereunder by the Escrow Agent in accordance with Section 8 above.
12. RESIGNATION OR REMOVAL OF ESCROW AGENT. The Escrow Agent may resign
at any time upon thirty (30) days' prior notice to the other Parties, and may be
removed by the mutual consent of the other Parties upon thirty (30) days' prior
notice to the Escrow Agent. Prior to the effective date of the resignation or
removal of the Escrow Agent or any successor escrow agent, the Parties other
than the Escrow Agent shall appoint a successor escrow agent to hold the Escrow
Shares, and any such successor escrow agent shall execute and deliver to the
predecessor escrow agent an instrument accepting such appointment; thereupon
such successor escrow agent shall, without further act, become vested with all
of the rights, powers and duties of the predecessor escrow agent as if
originally named herein.
13. LIABILITY OF ESCROW AGENT.
(a) The duties of the Escrow Agent hereunder are entirely
administrative and not discretionary. The Escrow Agent is obligated to act only
in accordance with written instructions received by it as provided in this
Agreement, is authorized hereby to comply with any orders, judgments or decrees
of any court or
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arbitration panel and shall not incur any liability as a result of its
compliance with such instructions, orders, judgments or decrees.
(b) The Escrow Agent may rely upon any instrument, not only as to its
due execution, validity and effectiveness, but also as to the truth and accuracy
of any information contained therein, which the Escrow Agent shall in good faith
believe to be genuine, to have been signed or presented by the persons or
parties purporting to sign the same and to conform to the provisions of this
Agreement.
(c) Each of WellComm Representative and the Company hereby waive any
suit, claim, demand or cause of action of any kind which any of them may have
against the Escrow Agent arising out of or relating to the execution or
performance by the Escrow Agent of this Agreement, unless such suit, claim,
demand or cause of action is based upon the willful misappropriation of funds or
shares by the Escrow Agent or the gross negligence or willful misconduct of the
Escrow Agent.
14. DISPUTE RESOLUTION; ACTION IN INTERPLEADER. Notwithstanding any
other provision of this Agreement, if any dispute or difference arises between
the Escrow Agent and any other Party hereto, or if any conflicting demand shall
be made upon the Escrow Agent, the Escrow Agent shall not be required to
determine the same or take any action thereon. Rather, the Escrow Agent may
await settlement of the controversy by appropriate legal proceedings; or the
Escrow Agent may, by written notice to the other Parties hereto, require the
Parties to enter binding arbitration or litigation to determine to whom the
Escrow Shares or any portion thereof held under this Agreement shall be
delivered; or the Escrow Agent may file suit in interpleader with the proper
court in Philadelphia, Pennsylvania for the purpose of having the respective
rights of the Parties adjudicated. The Escrow Agent, upon initiation of such
suit, may deposit the Escrow Shares with the court and, upon giving notice
thereof to the Parties hereto, the Escrow Agent shall be fully released and
discharged from all further obligations hereunder with respect to the Escrowed
Shares under this Agreement.
15. NOTICES. Any notices required or permitted hereunder shall be in
writing and shall be deemed to be properly given when personally delivered to
the party entitled to receive such notice or when sent by certified or
registered mail, postage prepaid, properly addressed to the party entitled to
receive such notice at its respective address set forth opposite its name below,
or at such other address as it shall have heretofore specified by written notice
similarly delivered.
If to the Company or I-trax: I-trax, Inc.
One Xxxxx Square
000 X. 00xx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Fax No. (000) 000-0000
with a copy to: I-trax, Inc.
One Xxxxx Square
000 X. 00xx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
Fax No. (000) 000-0000
If to the WellComm Representative: Xxxx Xxxxxx
0000 X. 000xx
Xxxxx, XX 00000
with a copy to: Xxxxx Xxxxxx P.C.
A Limited Liability Organization
0000 X. 000xx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Fax No. (000) 000-0000
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If to Escrow Agent:
Five Points Bank
P.O. Box 1507
Attn: Trust Department
Xxxxx Xxxxxx, XX 00000
(000) 000-0000
15. MISCELLANEOUS. This Agreement, the Merger Agreement, and all
exhibits and schedules to the Merger Agreement set forth the entire
understanding of the Parties with respect to the subject matter hereof. All of
the terms and provisions of this Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of the Parties hereto.
16. GOVERNING LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of
Delaware, without regard to any choice
or conflict of laws provision or rule that will cause the applicability of the
laws of any jurisdiction other than the State of
Delaware.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and/or by facsimile, each of which shall be deemed an original but
all of which together will constitute one and the same instrument.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE.]
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IN WITNESS WHEREOF, this Agreement has been executed as of the date and
year first-above written.
I-TRAX, INC.
By:_______________________________
Name:
Title:
WELLCOMM REPRESENTATIVE
-------------------------------------
Xxxx Xxxxxx
ESCROW AGENT
By:__________________________________
Name:
Title:
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