Exhibit 2.1
MERGER AGREEMENT
BY AND AMONG
I-TRAX, INC., DCG ACQUISITION, INC.,
MERIDIAN OCCUPATIONAL HEALTHCARE ASSOCIATES, inc.
(D/B/A chd MERIDIAN HEALTHCARE),
and
CHDM HEALTHCARE, LLC
DECEMBER 26, 2003
TABLE OF CONTENTS
1. Definitions..............................................................................................5
2. Basic Transaction........................................................................................9
(a) Two-Step Merger................................................................................10
(b) Merger Consideration...........................................................................10
(c) The Closing....................................................................................10
(d) Deliveries at the Closing......................................................................10
(e) Effect of First Merger.........................................................................10
(f) Procedure for Payment..........................................................................12
(g) Closing of Transfer Records....................................................................12
(h) Closing Escrow.................................................................................12
(i) Earn Out.......................................................................................12
(j) CHDM Representative as Limited Agent...........................................................13
(k) Effect of Second Merger........................................................................14
3. Representations and Warranties of I-trax and Acquisition................................................14
(a) Organization...................................................................................14
(b) Authorization of Transaction...................................................................15
(c) Capitalization.................................................................................15
(d) Filings with the SEC...........................................................................16
(e) Financial Statements...........................................................................16
(f) Events Subsequent to November 14, 2003.........................................................16
(g) Noncontravention...............................................................................18
(h) Brokers' Fees..................................................................................18
(i) Tax Matters....................................................................................18
(j) Subsidiaries...................................................................................19
(k) Litigation.....................................................................................19
(l) Legal Compliance...............................................................................19
(m) Title to Assets................................................................................19
(n) Undisclosed Liabilities........................................................................19
(o) Real Property..................................................................................20
(p) Intellectual Property..........................................................................20
(q) Tangible Assets................................................................................21
(r) Contracts......................................................................................21
(s) Notes and Accounts Receivable..................................................................22
(t) Insurance......................................................................................22
(u) Employees......................................................................................22
(v) Employee Benefits..............................................................................22
(w) Guaranties.....................................................................................23
(x) Environmental, Health, and Safety Matters......................................................23
(y) Certain Business Relationships with I-trax.....................................................23
(z) Status of Officers and Directors...............................................................23
(aa) Investment.....................................................................................23
(bb) Disclosure.....................................................................................23
(cc) Definitive Proxy Materials.....................................................................23
4. Representations and Warranties of CHDM..................................................................24
(a) Organization...................................................................................24
(b) Capitalization.................................................................................24
(c) Authorization of Transaction...................................................................24
(d) Noncontravention...............................................................................25
(e) Brokers' Fees..................................................................................25
(f) Title to Assets................................................................................25
(g) Subsidiaries...................................................................................25
(h) Financial Statements...........................................................................25
(i) Events Subsequent to Most Recent Fiscal Month End..............................................26
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(j) Undisclosed Liabilities........................................................................27
(k) Legal Compliance...............................................................................27
(l) Tax Matters....................................................................................27
(m) Real Property..................................................................................28
(n) Intellectual Property..........................................................................29
(o) Tangible Assets................................................................................29
(p) Contracts......................................................................................29
(q) Notes and Accounts Receivable..................................................................30
(r) Insurance......................................................................................30
(s) Litigation.....................................................................................31
(t) Employees......................................................................................31
(u) Employee Benefits..............................................................................31
(v) Guaranties.....................................................................................32
(w) Environmental, Health, and Safety Matters......................................................32
(x) Certain Business Relationships with CHDM.......................................................32
(y) Status of Officers and Directors...............................................................32
(z) Definitive Proxy Materials.....................................................................32
(aa) Disclosure.....................................................................................32
5. Pre-Closing Covenants...................................................................................32
(a) General........................................................................................32
(b) Notices and Consents...........................................................................33
(c) Regulatory Matters and Approvals...............................................................33
(d) Fairness Opinion...............................................................................33
(e) Financing......................................................................................34
(f) Operation of Businesses........................................................................34
(g) Full Access....................................................................................35
(h) Notice of Developments.........................................................................35
(i) Exclusivity....................................................................................35
(j) Listing of Shares..............................................................................35
(k) Financial Statements Re-characterization.......................................................35
6. Conditions to Obligation to Close.......................................................................35
(a) Conditions to Obligation of I-trax, Acquisition and Acquisition LLC............................36
(b) Conditions to Obligation of CHDM...............................................................37
7. Post-Closing Covenants..................................................................................39
(a) I-trax Common Shares...........................................................................39
(b) Insurance and Indemnification..................................................................39
(c) Registration Statement on Form S-3.............................................................40
(d) General Cooperation............................................................................40
(e) Tax-Free Reorganization Treatment..............................................................40
8. Remedies for Breaches of this Agreement.................................................................41
(a) Survival of Representations and Warranties.....................................................41
(b) Indemnification Provisions for Benefit of I-trax...............................................41
(c) Matters Involving Third Parties................................................................41
(d) Limitations on Liability.......................................................................42
(e) Determination of Adverse Consequences..........................................................42
(f) Basket.........................................................................................42
9. Termination.............................................................................................42
(a) Termination of Agreement.......................................................................42
(b) Effect of Termination..........................................................................43
10. Miscellaneous...........................................................................................43
(a) Press Releases and Public Announcements........................................................43
(b) No Third-Party Beneficiaries...................................................................43
(c) Entire Agreement...............................................................................44
(d) Succession and Assignment......................................................................44
(e) Counterparts...................................................................................44
(f) Headings.......................................................................................44
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(g) Notices........................................................................................44
(h) Governing Law..................................................................................45
(i) Amendments and Waivers.........................................................................45
(j) Severability...................................................................................45
(k) Expenses.......................................................................................45
(l) Construction...................................................................................45
(m) Incorporation of Exhibits, Annexes, and Schedules..............................................45
(n) Specific Performance...........................................................................46
(o) Submission to Jurisdiction.....................................................................46
Exhibit A -- First Merger Certificate of Merger
Exhibit B -- Directors and Officers of the First Merger Surviving Corporation
Exhibit C -- Certificate of Designations, Preferences and Rights of Series A
Convertible Preferred Stock of I-trax
Exhibit D -- Form of Letter of Transmittal and Subscription Agreement
Exhibit E -- Form of Escrow Agreement
Exhibit F -- Acquisition LLC EBIDTA Calculation Rules
Exhibit G -- Second Merger Certificate of Merger
Exhibit H -- CHDM and its Subsidiaries Budget
Exhibit I -- Form of Opinion of Counsel to CHDM
Exhibit J -- Form of Opinion of Counsel to I-trax
Exhibit K -- Form of Registration Statement on Form S-3
I-trax Disclosure Schedule -- Exceptions to Representations and Warranties of I-trax and Acquisition
CHDM Disclosure Schedule -- Exceptions to Representations and Warranties of CHDM
iv
MERGER AGREEMENT
Agreement entered into on December 26, 2003, by and among I-trax, Inc.,
a Delaware corporation ("I-trax"), DCG Acquisition, Inc., a Delaware corporation
and a wholly owned subsidiary of I-trax ("Acquisition"), CHDM Healthcare, LLC, a
Delaware limited liability company of which I-trax is the sole member
("Acquisition LLC"), and Meridian Occupational Healthcare Associates, Inc.
(d/b/a CHD Meridian Healthcare), a Delaware corporation ("CHDM"). Each of
I-trax, Acquisition, Acquisition LLC and CHDM are referred to herein
individually as a "Party" and collectively as the "Parties."
This Agreement provides for a two-step reorganization transaction. The
initial step of the reorganization transaction will involve a merger of
Acquisition with and into CHDM, in which merger CHDM will continue as the
surviving corporation. The second step of the reorganization transaction will
involve a statutory merger of the surviving corporation of the initial step of
the reorganization transaction with and into Acquisition LLC, in which merger
Acquisition LLC will continue as the surviving entity. The Parties intend to
complete the initial step and the second step of the reorganization as part of
an integrated plan, such that the two steps will constitute a single transaction
treated as a tax-free reorganization pursuant to Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code").
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties
and covenants herein contained, the Parties agree as follows:
1. Definitions.
"2004 EBITDA" has the meaning set forth in Section 2(i) below.
"Accrued CHDM Professional Expenditures" has the meaning set forth in
Section 10(k) below.
"Acquisition" has the meaning set forth in the preface above.
"Acquisition LLC" has the meaning set forth in the preface above.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs (including the
costs of investigating or litigating or arbitrating any claim), amounts paid in
settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and fees,
including court costs and reasonable attorneys' fees and expenses associated
with the foregoing, net of any insurance proceeds actually received by the party
suffering such consequences.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of
Code Section 1504(a) or any similar group defined under a similar provision of
state, local or foreign law.
"Authority" means any Federal, state, local or foreign, court,
governmental bureau, commission, board, agency or instrumentality.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"Cash Consideration" has the meaning set forth in Section 2(b) below.
"CHDM" has the meaning set forth in the preface above.
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"CHDM Disclosure Schedule" has the meaning set forth in Section 4
below.
"CHDM Material Adverse Effect" means: (i) an adverse effect on the
business, operations, results of operations, properties (including intangible
properties), conditions (financial or otherwise), assets or liabilities
(including contingent liabilities) of CHDM, which would have an economic impact
of more than $500,000; or (ii) a material adverse effect on the ability of CHDM
to perform its obligations under this Agreement and each other agreement
contemplated by this Agreement.
"CHDM Representative" means Xxxxxxx X. Xxxxxxxx, Xx. or such other
Person that may succeed him according to the procedures set out in Section
2(j)(ii) below.
"CHDM Share" means a share of common stock, $.001 par value, of CHDM.
"CHDM Shares Deemed Outstanding" means the number of CHDM Shares deemed
outstanding immediately prior to the Effective Time, calculated on a fully
diluted basis, including without limitation, CHDM Shares issuable upon
conversion of outstanding preferred stock or the exercise of options to acquire
CHDM Shares, warrants or any other rights to acquire securities of CHDM, but
specifically excluding CHDM Shares in treasury and any CHDM Share or any option
to acquire CHDM Share which is redeemed at or prior to the Effective Time.
"CHDM Stockholder" means any Person who or which holds any CHDM Share.
"Closing" has the meaning set forth in Section 2(c) below.
"Closing Date" has the meaning set forth in Section 2(c) below.
"Code" has the meaning set forth in the preface above.
"Common Shares Consideration" has the meaning set from in Section 2(b)
below.
"Confidential Information" means any information concerning the
businesses and affairs of a Party that is not already generally available to the
public.
"Controlled Group" means a controlled group within the meaning of
Sections 414(b), (c), (m) and (o) of the Code.
"Definitive Proxy Materials" means the Definitive Proxy Materials
relating to the Special I-trax Meeting and Special CHDM Meeting.
"Delaware General Corporation Law" means the General Corporation Law of
the State of Delaware, as amended.
"Dissenting Share" means any CHDM Share that any stockholder who or
which has exercised his, her or its appraisal rights under the Delaware General
Corporation Law holds of record.
"Effective Time" has the meaning set forth in Section 2(e)(i) below.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Section 3(1).
"Environmental, Health, and Safety Requirements" shall mean all
Federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, and pollution or
protection of the environment, including without limitation all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
6
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" means a reputable financial institution reasonably
acceptable to I-trax and CHDM Representative.
"Escrow Agreement" has the meaning set forth in Section 2(h) below.
"Escrow Shares" has the meaning set forth in Section 2(h) below.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agent" means StockTrans, Inc.
"Financial Statements" has the meaning set forth in Section 4(h) below.
"First Merger" has the meaning set forth in Section 2(a) below.
"First Merger Certificate of Merger" has the meaning set forth in
Section 2(d) below.
"First Merger Surviving Corporation" has the meaning set forth in
Section 2(a) below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"I-trax" has the meaning set forth in the preface above.
"I-trax Common Share" means a share of common stock, $.001 par value
per share, of I-trax.
"I-trax Disclosure Schedule" has the meaning set forth in Section 3
below.
"I-trax Material Adverse Effect" means: (i) an adverse effect on the
business, operations, results of operations, properties (including intangible
properties), conditions (financial or otherwise), assets or liabilities
(including contingent liabilities) of I-trax, which would have an economic
impact of more than $250,000; or (ii) a material adverse effect on the ability
of I-trax to perform its obligations under this Agreement and each other
agreement contemplated by this Agreement.
"I-trax Preferred Share" means a share of Series A Preferred Stock,
$.001 par value per share, of I-trax issued pursuant to the Certificate of
Designations, Preferences and Rights of Series A Convertible Preferred Stock of
I-trax attached hereto as Exhibit C.
"I-trax Preferred Designations" means the designations, preferences and
rights of I-trax Preferred Shares attached hereto as Exhibit C.
"I-trax Stockholder" means any Person who or which holds an I-trax
Common Share.
"Intellectual Property" means (i) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (ii) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
7
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (iii) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (iv) all mask works and all
applications, registrations, and renewals in connection therewith, (v) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (vi) all computer software and related code
(including data and related documentation), (vii) all other proprietary rights,
and (viii) all copies and tangible embodiments thereof (in whatever form or
medium).
"Knowledge" means, as to CHDM, the actual knowledge, or the knowledge
which would be obtained after reasonable investigation, of Xxxxxxx X. Xxxxxxxx,
Xx., Xxxx Xxxxxxxx or Xxxxxxx Xxxxxxx and means, as to I-trax, the actual
knowledge, or the knowledge which would be obtained after reasonable
investigation, of Xxxxx X. Xxxxxx, Xxxxxxx Xxxxxx or Xxxx Xxxxxxxxx.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Merger" has the meaning set forth in Section 2(a) below.
"Merger Consideration" has the meaning set forth in Section 2(b) below.
"Most Recent Balance Sheet" means the balance sheet contained within
the Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in Section
4(h) below.
"Most Recent Fiscal Month End" has the meaning set forth in Section
4(h) below.
"Most Recent Fiscal Year End" has the meaning set forth in Section 4(h)
below. "Multiemployer Plan" has the meaning set forth in ERISA Section
3(37).
"Ordinary Course of Business" means, with respect to a Person, the
conduct of business consistent with past custom and practice (including with
respect to quantity and frequency) of such Person.
"Party" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Plan" has the meaning set forth in Section 3(3) of ERISA.
"Preferred Shares Consideration" has the meaning set from in Section
2(b) below.
"Process Agent" has the meaning set forth in Section 10(o) below.
"Prohibited Transaction" has the meaning set forth in ERISA Section 406
and Code Section 4975.
"Public Reports" has the meaning set forth in Section 3(d) below.
8
"Requisite Stockholder Approval" means the affirmative vote or consent
of the holders of a majority of the I-trax Common Shares and the CHDM Shares, in
each case outstanding as of the applicable record date, in favor of this
Agreement, the First Merger and such other matters as are contemplated herein.
"SEC" means the Securities and Exchange Commission.
"Second Merger" has the meaning set forth in Section 2(a) below.
"Second Merger Certificate of Merger" has the meaning set forth in
Section 2(k)(i) below.
"Second Merger Effective Time" has the meaning set forth in Section
2(k)(i) below.
"Second Merger Surviving Company" has the meaning set forth in Section
2(a) below.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (i) landlords, carriers,
warehousemen, mechanic's, materialmen's, and similar liens, (ii) liens for
Taxes, assessments, governmental charges or claims not yet due and payable,
(iii) letters of credit or other instruments in favor of insurers in connection
with insurance policies, (iv) surety and appeal bonds and letters of credit
securing performance under client contracts, (v) any attachment or judgment
lien, unless the judgment it secures shall not, within sixty (60) days after the
entry thereof, have been discharged or the execution thereof stayed pending
appeal, or shall not have been discharged within sixty (60) days after the
expiration of any such stay, (vi) reservations, exceptions, encroachments,
easements, rights of way, covenants, conditions, restrictions, leases and other
title exceptions pertaining to real property (except encumbrances to secure
payment of money), which (individually and in the aggregate) do not materially
impair the use of such property or the value of such property in the business
for which it is used; (vii) Any lien on property acquired after the date hereof;
provided that each such lien shall at all times be confined solely to the item
or items of property so acquired; and the principal amount of indebtedness
secured by each such lien shall at no time exceed the cost of the property so
acquired; and (viii) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Special I-trax Meeting" has the meaning set forth in Section 5(c)(i)
below.
"Special CHDM Meeting" has the meaning set forth in Section 5(c)(i)
below.
"Subsidiary" means any business entity with respect to which a
specified Person (or a Subsidiary thereof) owns more than 50 percent of the fair
market value of the equity interests or has the power to vote or direct the
voting of sufficient voting interests to elect a majority of the directors or
managers.
"Tax" means any Federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
"Tax-Free Reorganization" has the meaning set forth in Section 7(e)
below.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section 8(c)(i) below.
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2. Basic Transaction.
(a) Two-Step Merger. On and subject to the terms and conditions of this
Agreement, Acquisition will merge with and into CHDM (the "First Merger") at the
Effective Time. CHDM shall be the entity surviving the First Merger (the "First
Merger Surviving Corporation"). As soon as practicable following the First
Merger and on and subject to the terms and conditions of this Agreement, First
Merger Surviving Corporation will merge with and into Acquisition LLC (the
"Second Merger"). Acquisition LLC shall be the entity surviving the Second
Merger (the "Second Merger Surviving Company"). The First Merger and the Second
Merger are referred to, collectively, as the "Merger."
(b) Merger Consideration. The aggregate consideration to be paid by
I-trax in the Merger (the "Merger Consideration") equals: (i) 10,000,000 I-trax
Common Shares (the "Common Shares Consideration"); (ii) 400,000 I-trax Preferred
Shares (the "Preferred Shares Consideration"); and (iii) cash in the amount of
$35,000,000 minus, and without double counting: (A) the expenditure CHDM incurs
or commits to incur to redeem or purchase, as the case may be, any CHDM Share or
any option to acquire CHDM Share during the period beginning on the date hereof
and ending at the Effective Time; and (B) the amount, if any, by which the
actual cash balance of CHDM as of the Effective Time, measured in accordance
with GAAP, minus any unpaid Accrued CHDM Professional Expenditures, is less than
$13,258,338 (the resulting amount, the "Cash Consideration"). For the avoidance
of doubt, such cash balance shall be calculated net of all deposits and payments
in transit at the Effective Time, and shall be deemed to include the aggregate
amount of outstanding promissory notes in favor of CHDM given by employees upon
exercise of options, which notes shall be set off against Merger Consideration
due to such employees.
(c) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxxx Xxxxx
Xxxxxxx & Xxxxxxxxx, LLP, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx,
commencing at 10:00 a.m. local time on the second business day following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective Parties will take at the Closing itself) or
such other date as the Parties may mutually determine (the "Closing Date").
(d) Deliveries at the Closing. At the Closing, (i) CHDM will deliver to
I-trax and Acquisition the various certificates, instruments, and documents
referred to in Section 6(a) below, (ii) I-trax and Acquisition will deliver to
CHDM the various certificates, instruments, and documents referred to in Section
6(b) below, (iii) Acquisition and CHDM will file with the Secretary of State of
the State of Delaware a Delaware Certificate of Merger in the form attached
hereto as Exhibit A (the "First Merger Certificate of Merger"); (iv) I-trax will
deliver the Merger Consideration in the manner provided in Section 2(e) and 2(f)
below and (v) I-trax will comply with its covenant under Section 7(c) below
concerning filing a registration statement on Form S-3 covering I-trax Common
Shares issued pursuant to the Merger and the I-trax Common Shares issuable upon
conversion of I-trax Preferred Shares issued pursuant to the Merger.
(e) Effect of First Merger.
(i) General. The First Merger shall become effective at the time
(the "Effective Time") CHDM and Acquisition file the First Merger
Certificate of Merger with the Secretary of State of the State of
Delaware. The First Merger shall have the effects set forth in the
Delaware General Corporation Law. I-trax may, at any time after the
Effective Time, take any action (including executing and delivering any
document) in the name and on behalf of either Acquisition or CHDM in
order to carry out and effectuate the transactions contemplated by this
Agreement.
(ii) Certificate of Incorporation. The Certificate of
Incorporation of the First Merger Surviving Corporation shall be the
Certificate of Incorporation of Acquisition in effect immediately
before the Effective Time without any modification or amendment as a
result of the First Merger.
(iii) Bylaws. The Bylaws of the First Merger Surviving
Corporation shall be the Bylaws of Acquisition in effect immediately
before the Effective Time without any modification or amendment as a
result of the First Merger.
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(iv) Directors and Officers. The directors and officers listed on
Exhibit B attached hereto shall become the directors and officers of
the First Merger Surviving Corporation at and as of the Effective Time.
(v) Conversion of CHDM Shares. At and as of the Effective Time:
(A) each outstanding CHDM Share (other than any Dissenting Share or
CHDM Share held in treasury) shall be converted into the right to
receive: (1) the number of I-trax Common Shares obtained by dividing
the Common Shares Consideration by the number of CHDM Shares Deemed
Outstanding, rounded, with respect to each CHDM Stockholder, to the
nearest whole I-trax Common Share; (2) the number of I-trax Preferred
Shares obtained by dividing the Preferred Shares Consideration by the
number of CHDM Shares Deemed Outstanding, rounded, with respect to each
CHDM Stockholder, to the nearest one-hundredth of one I-trax Preferred
Share and (3) the amount of cash (without interest) determined by
dividing the Cash Consideration by the number of CHDM Shares Deemed
Outstanding rounded, with respect to each CHDM Stockholder, to the
nearest cent, subject, however, to any withholding described in Section
2(e)(vii) below; (B) each Dissenting Share shall be converted into the
right to receive payment from the First Merger Surviving Corporation
with respect thereto in accordance with the provisions of Delaware
General Corporation Law and Section 2(e)(vii) below; and (C) each CHDM
Share held in treasury shall be canceled. No CHDM Share shall be deemed
to be outstanding or to have any rights other than those set forth in
this Section 2(e)(v) after the Effective Time.
(vi) Conversion of CHDM Options. At and as of the Effective Time,
each outstanding option to purchase a CHDM Share will be converted into
an option to purchase the Merger Consideration divided by the CHDM
Shares Deemed Outstanding for an exercise price per CHDM Share equal to
the exercise price in effect immediately prior to the Effective Time.
Each such option as converted will be subject to the same terms and
conditions (including exercise rights, termination dates and
restrictions) as were applicable to such CHDM option at the Effective
Time; provided, however, that in the case of any CHDM option to which
Code Section 421 applies by reason of its qualification under any of
Code Sections 422-424, the exercise price and number of I-trax Common
Shares subject to such option shall be determined in a manner that
meets the requirements for "issuing or assuming a stock option in a
transaction to which Code Section 424(a) applies," within the meaning
of Code Section 424(a).
(vii) Tax Withholdings. I-trax will deduct and withhold, or cause
to be deducted or withheld, from the Merger Consideration deliverable
to any holder of (A) a CHDM Share that received such CHDM Share upon
the exercise of any CHDM option or (B) a CHDM option, an amount
required to be deducted and withheld with respect to the making of such
payment under the Code, or any provision of applicable state, local or
foreign Tax law. To the extent that amounts are so deducted and
withheld, such deducted and withheld amounts will be treated for all
purposes of this Agreement as having been paid to such holders in
respect of which such deduction and withholding was made.
(viii) Dissenting Shares. Notwithstanding any provision of this
Agreement to the contrary, CHDM Shares outstanding as of the Effective
Time and held by CHDM Stockholders who do not vote in favor of the
Merger and who demand in writing appraisal for such CHDM Shares in
accordance with Section 262 of the Delaware General Corporation Law
will not receive the Merger Consideration. Such CHDM Stockholders will
be entitled to receive payment of the appraised value of the CHDM
Shares held by them in accordance with Section 262 of the Delaware
General Corporation Law, except that all Dissenting Shares held by CHDM
Stockholders who fail to perfect or effectively withdraw or lose their
rights to appraisal of such Dissenting Shares under Section 262 of the
Delaware General Corporation Law will thereupon be deemed to have been
converted into and to have become exchangeable for, as of the Effective
Time, the right to receive Merger Consideration, without any interest
thereon, upon surrender, in the manner provided in Section 2(f) below,
of the stock certificate representing such stockholder's CHDM Shares.
The CHDM Representative shall give I-trax prompt notice of any demands
received by CHDM for appraisal of CHDM Shares and I-trax will have the
right to be informed of all negotiations and proceedings with respect
to such demands. Neither CHDM nor the CHDM Representative may, except
with the prior written consent of I-trax, make any payment with respect
to, or settle or make a binding offer to settle, any such demands.
11
(ix) Conversion of Capital Stock of Acquisition. At and as of the
Effective Time, each share of common stock, $.001 par value per share,
of Acquisition shall be converted into one share of common stock,
without par value, of the First Merger Surviving Corporation.
(f) Procedure for Payment.
(i) At Closing, (A) CHDM will deliver to I-trax a certified list
of all record holders of outstanding CHDM Shares, including each such
holder's name, address and CHDM Share ownership, (B) each CHDM
Stockholder of record will deliver to I-trax a completed Letter of
Transmittal and Subscription Agreement in the form attached hereto as
Exhibit D together with the applicable stock certificates which
represented such holder's CHDM Shares, and (C) I-trax will deliver to
each CHDM Stockholder, by wire if requested by such CHDM Stockholder,
and otherwise by check or wire, for each CHDM Share owned of record by
such CHDM Stockholder, the pro rata cash portion of the Merger
Consideration as calculated pursuant to Section 2(e)(v) above (less any
withholding described in Section 2(e)(vii) above), and will cause the
Exchange Agent to deliver to each CHDM Stockholder the pro rata stock
portion of the Merger Consideration.
(ii) I-trax will not pay any dividend or make any distribution on
I-trax Common Shares or I-trax Preferred Shares (with a record date at
or after the Effective Time) to any record holder of outstanding CHDM
Shares until the holder surrenders for exchange the certificates
representing the holder's CHDM Shares. I-trax instead will pay the
dividend or make the distribution to the Exchange Agent in trust for
the benefit of such the holder pending surrender and exchange. No
holder of outstanding CHDM Shares will be entitled to any interest or
earnings on the dividend or distribution pending receipt.
(iii) I-trax may cause the Exchange Agent to return any I-trax
Common Shares, I-trax Preferred Shares and dividends and distributions
thereon remaining unclaimed one hundred eighty (180) days after the
Effective Time, and thereafter each remaining record holder of
outstanding CHDM Shares shall be entitled to look to I-trax (subject to
abandoned property, escheat, and other similar laws) as a general
creditor thereof with respect to I-trax Common Shares, I-trax Preferred
Shares and dividends and distributions thereon to which such holder is
entitled upon surrender of the holder's certificates representing
former CHDM Shares.
(iv) I-trax shall pay all charges and expenses of the Exchange
Agent.
(g) Closing of Transfer Records. After the Effective Time, transfers of
CHDM Shares shall not be made on the stock transfer books of the First Merger
Surviving Corporation.
(h) Closing Escrow. At Closing, the Parties will establish an escrow
with the Escrow Agent for Four Million (4,000,000) I-trax Common Shares (the
"Escrow Shares") that will be delivered at the Effective Time by I-trax to the
Escrow Agent. The Escrow Shares are in addition to the I-trax Common Shares
deliverable to the CHDM Stockholders at Closing under Section 2(b). The Escrow
Agent shall hold and distribute the Escrow Shares in accordance with the terms
of this Section 2(h), Section 2(i) and the escrow agreement (the "Escrow
Agreement") substantially in the form of Exhibit E attached hereto to be entered
into at the Closing by I-trax, the CHDM Representative and the Escrow Agent.
(i) Earn Out. On the earlier of (X) two business days following the
date on which I-trax files its annual report on Form 10-K or Form 10-KSB for the
year ended December 31, 2004, or (Y) April 30, 2005, I-trax and the CHDM
Representative shall cause the Deliverable Escrow Shares (as defined below) to
be delivered to the CHDM Stockholders in accordance with the Escrow Agreement if
CHDM (prior to the Effective Time) and First Merger Surviving Corporation or
Acquisition LLC, as applicable (after the Effective Time), record calendar year
2004 earnings before interest, taxes, depreciation, and amortization ("2004
EBITDA") of not less than $8,100,000. I-trax and the CHDM Representative shall
calculate 2004 EBITDA in accordance with the rules set forth in Exhibit F to
this Agreement. "Deliverable Escrow Shares" means that number of the Escrow
Shares equal to the product of (i) a fraction, the numerator of which is the
lesser of 2004 EBITDA or Nine Million Dollars ($9,000,000) and the denominator
of which is Nine Million Dollars ($9,000,000) multiplied by (ii) 4,000,000
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shares, less (A) any Escrow Shares released to I-trax pursuant to Section 8 and
(B) any Escrow Shares which are subject to a pending claim that has been made
against the Escrow Shares in accordance with Section 8 on or before August 31,
2004; provided, however, that any Escrow Shares subtracted from the Deliverable
Escrow Shares pursuant to clause (B) shall be deliverable to CHDM Stockholders
at a later date if such claim is ultimately resolved against I-trax. Any Escrow
Shares not delivered to CHDM Stockholders in accordance with this Section 2(i),
will be returned to I-trax and canceled.
(j) CHDM Representative as Limited Agent.
(i) At the Effective Time, CHDM Stockholders will be deemed to
have (A) directed I-trax to deliver to the Escrow Agent the Escrow
Shares in accordance with Section 2(h) above, (B) irrevocably appointed
Xxxxxxx X. Xxxxxxxx, Xx. as the CHDM Stockholders' exclusive agent to
act on the CHDM Stockholders' behalf with respect to any and all claims
under (U) Section 2(i) above, (V) the Escrow Shares and Escrow
Agreement, (W) Section 8 below, (X) the obligation of I-trax to keep
the Form S-3 effective for two years, (Y) the continuing obligation of
I-trax to report the Merger on all Tax returns and filings as a
Tax-Free Reorganization, and/or (Z) the representations and warranties
of I-trax and Acquisition set forth in Section 3 below, and (C)
authorized the CHDM Representative to exercise any rights on behalf of
the CHDM Stockholders under the Escrow Agreement. In such
representative capacity, the CHDM Representative will take, and the
CHDM Stockholders agree that the CHDM Representative will take, any and
all actions which he believes are necessary or appropriate under this
Agreement for and on behalf of the CHDM Stockholders, as fully as if
the CHDM Stockholders were acting on their own behalf, including
without limitation, defending all Third Party Claims, consenting to,
compromising or settling all Third Party Claims, conducting
negotiations with I-trax and its representatives regarding such Third
Party Claims, interacting with I-trax and the Escrow Agent under the
Escrow Agreement with respect to all matters arising under the Escrow
Agreement, taking any and all other actions specified in or
contemplated by this Agreement and engaging counsel, accountants or
other representatives in connection with the foregoing matters.
(ii) The CHDM Representative may resign at any time by providing
written notice to I-trax and the CHDM Stockholders, and may appoint a
successor CHDM Representative by providing notice of such appointment
to I-trax and the CHDM Stockholders before the effective time of his
resignation. In the event of the death or incapacity of the CHDM
Representative, or the resignation of the CHDM Representative without
his appointing a successor, a successor representative will be
appointed by an affirmative vote or written consent of the holders of
the majority of the CHDM Shares outstanding as of the Closing Date at a
meeting of such holders called for such purpose or in an action by
written consent without a meeting. The CHDM Representative may also be
removed and replaced by the vote or written consent of the holders of a
majority of the CHDM Shares outstanding as of the Closing Date. A
meeting for removal or replacement of the CHDM Representative may be
called by any three members of the CHDM Board of Directors as it
existed immediately prior to the First Merger.
(iii) In connection with his duties hereunder, the CHDM
Representative, in his capacity as such, shall be protected in acting
or refraining from acting upon any written notice, request, consent,
certificate, order, affidavit, letter, telegram or other document
furnished to him hereunder and believed by him to be genuine and to
have been signed or sent by the proper party or parties, and the CHDM
Representative shall not be liable for anything he may do or refrain
from doing in connection with his duties hereunder, except as a result
of his own gross negligence, willful misconduct or bad faith. The CHDM
Representative may consult counsel and shall be protected in respect of
any action, claim or proceeding brought against the CHDM Representative
by a CHDM Stockholder if the CHDM Representative took or omitted taking
action in good faith on the advice of such counsel.
(iv) CHDM Stockholders, by adopting this Agreement, shall be
deemed to have agreed jointly and severally to indemnify the CHDM
Representative from and against the entirety of any Adverse
Consequences the CHDM Representative may suffer resulting from, arising
out of, relating to, in the nature of, or caused by his serving as the
CHDM Representative under this Agreement. Without limiting the
generality of the foregoing, should the CHDM Representative incur any
legal, accounting, arbitrator or other professional fees on behalf of
13
the CHDM Stockholders in connection with determination of the earn-out
or asserting or defending claims arising out of the representations and
warranties or other provisions of the Merger Agreement, each Person who
holds CHDM Shares immediately prior to the First Merger shall pay its
pro rata share of such expenses, and shall, if so requested by the CHDM
Representative, advance such funds as the CHDM may reasonably request
for that purpose; provided, that in no case, shall a former CHDM
Stockholder be required to pay under this provision an amount in excess
of the aggregate Merger Consideration received by such CHDM
Stockholder. Should any CHDM Stockholder fail to meet its obligation
under this Section 2(j)(iv), the CHDM Representative shall be entitled
to advance funds and/or borrow funds from other CHDM Stockholders, and
to repay the amount so advanced, with interest at 10% per year, at the
time of distribution of the Escrow Shares, from the Escrow Shares that
would otherwise be distributed to the defaulting CHDM Stockholder.
(k) Effect of Second Merger.
(i) General. The Second Merger shall become effective (the
"Second Merger Effective Time") at the time the First Merger Surviving
Corporation and Acquisition LLC file the Second Merger Certificate of
Merger in the form attached hereto as Exhibit G (the "Second Merger
Certificate of Merger") with the Secretary of State of the State of
Delaware. The Second Merger shall have the effects set forth in the
Delaware General Corporation Law. I-trax may, at any time after the
Second Merger Effective Time, take any action (including executing and
delivering any document) in the name and on behalf of either
Acquisition or Acquisition LLC in order to carry out and effectuate the
transactions contemplated by this Agreement.
(ii) Operating Agreement. The Operating Agreement of Acquisition
LLC in effect at and as of the Second Merger Effective Time will be the
Operating Agreement of the Second Merger Surviving Company without any
modification or amendment as a result of the Second Merger.
(iii) Certificate of Formation. The Certificate of Formation of
Acquisition LLC in effect at and as of the Second Merger Effective Time
will be the Certificate of Formation of the Second Merger Surviving
Company without any modification or amendment as a result of the Second
Merger.
(iv) Officers. The officers listed on Exhibit B attached hereto
shall become the officers of the Second Merger Surviving Company at and
as of the Second Merger Effective Time.
(v) Cancellation of First Merger Surviving Corporation Stock. At
the Second Merger Effective Time, all outstanding shares of stock of
the First Merger Surviving Corporation shall be canceled.
(vi) Second Merger Surviving Company Interests. At the Second
Merger Effective Time, each limited liability company interest in
Acquisition LLC shall be converted into a like interest of the Second
Merger Surviving Company.
3. Representations and Warranties of I-trax and Acquisition. I-trax and
Acquisition, jointly and severally, represent and warrant to CHDM that the
statements contained in this Section 3 are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Section 3), except as set forth in the disclosure
schedule accompanying this Agreement (the "I-trax Disclosure Schedule"). The
I-trax Disclosure Schedule will be arranged in paragraphs corresponding to the
numbered and lettered paragraphs contained in this Section 3.
(a) Organization.
(i) Each of I-trax and its Subsidiaries is a corporation or
limited liability company validly existing and in good standing under
the laws of the State of Delaware and has all requisite corporate power
and authority to own, lease and operate its properties and to carry on
its business as it is now being conducted. Each of I-trax and its
14
Subsidiaries is duly authorized to conduct business and is in good
standing under the laws of each jurisdiction where such qualification
is required, except for failures to be so duly authorized or good
standing that would not, individually or in the aggregate, have a
I-trax Material Adverse Effect. Each of I-trax and its Subsidiaries has
full corporate power and authority and all licenses, permits, and
authorizations necessary to carry on the businesses in which it is
engaged and to own and use the properties owned and used by it. I-trax
has delivered to CHDM complete and correct copies of its and its
Subsidiaries' charter, bylaws and other organizational documents and
all amendments thereto to the date hereof. The minute books
(containing, as the case may be, the records of meetings of the
stockholders, the board of directors, and any committees of the board
of directors), the stock certificates and the stock record of I-trax
are correct and complete. I-trax is not in default under or in
violation of any provision of its organizational documents, charter or
bylaws.
(ii) Acquisition is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware.
Acquisition has delivered to CHDM complete and correct copies of its
charter, bylaws and other organizational documents and all amendments
thereto to the date hereof. The minute books (containing, as the case
may be, the records of meetings of the stockholders, the board of
directors, and any committees of the board of directors), the stock
certificates and the stock record of Acquisition are correct and
complete. Acquisition is not in default under or in violation of any
provision of its organizational documents, charter or bylaws.
(b) Authorization of Transaction. Each of I-trax and Acquisition has
full power and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations hereunder;
provided, however, that I-trax cannot consummate the Merger unless and until it
receives the Requisite Stockholder Approval. This Agreement constitutes the
valid and legally binding obligation of I-trax and Acquisition, enforceable in
accordance with its terms. Other than filings required by the Delaware General
Corporation Law, Regulation D under the Securities Act, blue sky state filings
and filings required by means the Xxxx-Xxxxx-Xxxxxx Act, none of I-trax and
Acquisition need give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order to consummate the transactions contemplated by this Agreement.
(c) Capitalization.
(i) The entire authorized capital stock of I-trax consists of
102,000,000 shares, of which 100,000,000 shares are designated as
common stock, par value $0.001 per share, of which 13,766,817 shares
are issued and outstanding on the date hereof, and of which 2,000,000
shares are designated as preferred stock, par value $0.001 per share,
none of which is issued or outstanding. All of the outstanding shares
of common stock are duly authorized, validly issued, fully paid and
nonassessable and are not subject to any preemptive rights. All I-trax
Common Shares and I-trax Preferred Shares to be issued in the First
Merger in accordance with this Agreement, and I-trax Common Shares
issuable upon conversion of I-trax Preferred Shares will be, when so
issued in accordance with this Agreement or the I-trax Preferred
Designations, duly authorized, validly issued, fully paid and
nonassessable and not subject to any preemptive rights. A sufficient
number of I-trax Common Shares is reserved to permit the conversion of
all I-trax Preferred Shares to be issued in the First Merger in
accordance with this Agreement and the I-trax Preferred Designations.
Except as set forth in Section 3(c) of the I-trax Disclosure Schedule,
there are no outstanding options, warrants or rights to purchase or
acquire from I-trax any capital stock of I-trax, there are no existing
registration covenants with I-trax with respect to outstanding I-trax
Common Shares, and there are no convertible securities or other
contracts, commitments, agreements, understandings, arrangements or
restrictions by which I-trax is bound to issue any additional shares of
its capital stock or other securities.
(ii) The entire authorized capital stock of Acquisition consists
of 1,000 shares of common stock, par value $.001 per share, of which
100 shares are issued and outstanding and owned by I-trax. All of the
outstanding shares of common stock, par value $0.001 per share, of
Acquisition are duly authorized, validly issued, fully paid and
nonassessable and not subject to any preemptive rights.
15
(d) Filings with the SEC. I-trax has made all filings with the SEC that
it has been required to make since January 1, 2000 under the Securities Act and
the Exchange Act (collectively the "Public Reports") in accordance within the
time requirements of the Securities Act and the Exchange Act and the rules and
regulations promulgated thereunder. Each of the Public Reports has complied with
the Securities Act and the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to such Public Reports in all material
respects. None of the Public Reports, as of its applicable date, contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. I-trax has advised
CHDM that a correct and complete copy of each Public Report (together with all
exhibits and schedules thereto and as amended to date) is available at
xxxx://xxx.xxx.xxx, a website maintained by the SEC where CHDM Stockholders may
view such Public Reports. I-trax is currently eligible to register on Form S-3
the resale of I-trax Common Shares issuable in the Merger and I-trax Common
Shares issuable upon conversion of the I-trax Preferred Shares issuable in the
Merger.
(e) Financial Statements. The consolidated financial statements of
I-trax and its Subsidiaries (including, if applicable, the notes thereto)
included in the Public Reports have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby (except as
may be indicated in the notes thereto or, in the case of unaudited financial
statements, as permitted by Form 10-QSB of the SEC), comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, present fairly the
results of operations of I-trax and its Subsidiaries for such periods (subject
to normal year-end adjustments, which will not be material individually or in
the aggregate) and the financial condition of I-trax and its Subsidiaries at the
end of such periods, are correct and complete and are consistent with the books
and records of I-trax and its Subsidiaries (which books and records are correct
and complete).
(f) Events Subsequent to November 14, 2003. Except as disclosed in the
Public Reports and in Section 3(f) of the I-trax Disclosure Schedule, since
November 14, 2003 there has not been any: (i) change, event, condition
(financial or otherwise) or state of circumstances or facts in the business,
financial condition or results of operations of I-trax and its Subsidiaries
taken as a whole, which has had or could reasonably be expected to have an
I-trax Material Adverse Effect; (ii) amendment to the Certificate of
Incorporation of I-trax; (iii) payment of dividends or changes in the capital
structure of I-trax; or (iv) other transactions material to I-trax and its
Subsidiaries taken as a whole. Except as disclosed in Section 3(f) of the I-trax
Disclosure Schedule, since November 14, 2003, I-trax has conducted its, and has
caused its Subsidiaries to conduct their, business and affairs only in the
Ordinary Course of Business. Since November 14, 2003 and except as disclosed in
Public Reports filed after November 14, 2003 or in Section 3(f) of the I-trax
Disclosure Schedule:
(i) None of I-trax and its Subsidiaries has sold, leased,
transferred, or assigned any of its assets, tangible or intangible
outside the Ordinary Course of Business;
(ii) None of I-trax and its Subsidiaries has entered into any
agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more than
$50,000;
(iii) No party (including I-trax or its Subsidiaries) has
accelerated, terminated, modified, or canceled any agreement, contract,
lease, or license (or series of related agreements, contracts, leases,
and licenses) involving more than $50,000 to which I-trax is a party or
by which it is bound;
(iv) None of I-trax and its Subsidiaries has granted any Security
Interest on any of its assets, tangible or intangible;
(v) None of I-trax and its Subsidiaries has made any capital
expenditure (or series of related capital expenditures) involving more
than $50,000;
(vi) None of I-trax and its Subsidiaries has made any capital
investment in, any loan to, or any acquisition of the securities or
assets of, any other Person (or series of related capital investments,
loans, and acquisitions) involving more than $50,000;
16
(vii) None of I-trax and its Subsidiaries has issued any note,
bond, or other debt security or created, incurred, assumed, or
guaranteed any indebtedness for borrowed money or capitalized lease
obligation either involving more than $25,000 singly or $50,000 in the
aggregate;
(viii) None of I-trax and its Subsidiaries has delayed or
postponed the payment of accounts payable and other Liabilities outside
the Ordinary Course of Business;
(ix) None of I-trax and its Subsidiaries has canceled,
compromised, waived or released any right or claim (or series of
related rights and claims) involving more than $50,000;
(x) None of I-trax and its Subsidiaries has granted any license
or sublicense of any rights under or with respect to any Intellectual
Property outside the Ordinary Course of Business;
(xi) There has been no change made or authorized in the charter,
bylaws or other organizational documents of I-trax or any Subsidiary;
(xii) None of I-trax and its Subsidiaries has issued, sold, or
otherwise disposed of any of its capital stock, or granted any options,
warrants, or other rights to purchase or obtain (including upon
conversion, exchange, or exercise) any of its capital stock, other than
options to employees granted in the Ordinary Course of Business all of
which are disclosed in Section 3(c) of the I-trax Disclosure Schedule;
(xiii) None of I-trax and its Subsidiaries has declared, set
aside, or paid any dividend or made any distribution with respect to
its capital stock (whether in cash or in kind) or redeemed, purchased,
or otherwise acquired any of its capital stock;
(xiv) None of I-trax and its Subsidiaries has experienced any
damage, destruction, or loss (whether or not covered by insurance) to
its property except where such damage, destruction or loss did not
cause an I-trax Material Adverse Effect;
(xv) None of I-trax and its Subsidiaries has made any loan to, or
entered into any other transaction with, any of its directors,
managers, officers, and employees;
(xvi) None of I-trax and its Subsidiaries has entered into any
employment contract or collective bargaining agreement, written or
oral, or modified the terms of any existing such contract or agreement;
(xvii) None of I-trax and its Subsidiaries has granted any
increase in the base compensation or made any other change in
employment terms of any of its directors, managers, officers, and
employees;
(xviii) None of I-trax and its Subsidiaries has adopted, amended,
modified, or terminated any bonus, profit-sharing, incentive,
severance, or other plan, contract, or commitment for the benefit of
any of its directors, officers, and employees (or taken any such action
with respect to any other Employee Welfare Benefit Plan or Employee
Pension Benefit Plan);
(xix) None of I-trax and its Subsidiaries has made or pledged to
make any charitable or other capital contribution;
(xx) There has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course of
Business involving I-trax or its Subsidiaries which would have an
economic impact of more than $50,000;
(xxi) None of I-trax and its Subsidiaries has agreed to do any of
the foregoing; and
There has not been an I-trax Material Adverse Effect.
17
(g) Noncontravention. Except as disclosed on Schedule 3(g) of the
I-trax Disclosure Schedule, neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which any of I-trax or any of its Subsidiaries
is subject or any provision of their respective certificates of incorporation or
bylaws or (ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which any of
I-trax or any of its Subsidiaries is a party or by which it is bound or to which
any of its assets is subject (or result in the imposition of any Security
Interest on any of its assets), excluding from the foregoing clauses (i) and
(ii) violations or conflicts that, individually or in the aggregate, would not
have an I-trax Material Adverse Effect. Other than in connection with the
provisions of the Delaware General Corporation Law, the Securities Act, the
state securities laws, and the Xxxx-Xxxxx-Xxxxxx Act none of I-trax and its
Subsidiaries needs to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement.
(h) Brokers' Fees. Except as disclosed on Schedule 3(h) of the I-trax
Disclosure Schedule, none of I-trax, its Subsidiaries or I-trax Stockholders,
has or will have any Liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement.
(i) Tax Matters.
(i) Each of I-trax and its Subsidiaries has filed all Tax Returns
that it was required to file. All such Tax Returns were correct and
complete in all material respects. All Taxes owed by any of I-trax and
its Subsidiaries (whether or not shown on any Tax Return) have been
paid. No claim has ever been made by an Authority in a jurisdiction
where one of I-trax and its Subsidiaries does not file Tax Returns that
it is or may be subject to taxation by that jurisdiction. There are no
Security Interests on any of the assets of I-trax and its Subsidiaries
that arose in connection with any failure (or alleged failure) to pay
any Tax.
(ii) Each of I-trax and its Subsidiaries has withheld and paid
all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.
(iii) No director or officer (or employee responsible for Tax
matters) of I-trax or its Subsidiaries has been informed formally or
informally or has any reason to believe any Authority may assess
additional Taxes for any period for which Tax Returns have been filed
or is aware of any state of facts which could give rise to any claim,
audit, action, suit, proceeding, or investigation which respect to any
Tax for which I-trax could be liable. Schedule 5(i)(iii) of the I-trax
Disclosure Schedule lists all Federal, state, local, and foreign income
Tax Returns filed with respect to I-trax and its Subsidiaries for
taxable periods ended on or after December 31, 2000, indicates those
Tax Returns that have been audited, and indicates those Tax Returns
that currently are the subject of audit. I-trax has delivered to CHDM
correct and complete copies of all Federal income Tax Returns,
examination reports, and statements of deficiencies assessed against or
agreed to by I-trax or any of its Subsidiaries for calendar year 2000
through the Closing Date.
(iv) None of I-trax and its Subsidiaries has waived any statute
of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.
(v) None of I-trax and its Subsidiaries has made any payments, is
not obligated to make any payments, or is a party to any agreement that
under certain circumstances could obligate it to make any payments that
will not be deductible under Code Section 280G. None of I-trax and its
Subsidiaries has been a United States real property holding corporation
within the meaning of Code Section 897(c)(2) during the applicable
period specified in Code Section 897(c)(1)(A)(ii). None of I-trax and
18
its Subsidiaries is a party to any Tax allocation or sharing agreement.
None of I-trax and its Subsidiaries (A) has been a member of an
Affiliated Group filing a consolidated Federal income Tax Return (other
than a group the common parent of which was I-trax) or (B) has any
Liability for the Taxes of any Person (other than I-trax) under
Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
(vi) The unpaid Taxes of I-trax and its Subsidiaries (A) did not,
as of the fiscal quarter ended September 30, 2003, exceed the reserve
for Tax Liability of I-trax and its Subsidiaries (rather than any
reserve for deferred Taxes established to reflect timing differences
between book and Tax income) set forth on the face of I-trax and its
Subsidiaries consolidated balance sheet at September 30, 2003 (rather
than in any notes thereto) and (B) do not exceed that reserve as
adjusted for the passage of time through the Closing Date in accordance
with the past custom and practice of I-trax and its Subsidiaries in
filing their Tax Returns.
(j) Subsidiaries. Section 3(j) of the I-trax Disclosure Schedule sets
forth for each Subsidiary of I-trax (i) its name and jurisdiction of
incorporation or formation, (ii) the type of entity, (iii) the number of shares
or of authorized capital stock of each class of its capital stock or other
equity interests, (iv) the number of issued and outstanding shares of each class
of its capital stock or other equity interests, and (v) the number of shares of
its capital stock or other equity interests held in treasury. All of the issued
and outstanding shares of capital stock or other equity interests of each
Subsidiary of I-trax have been duly authorized and are validly issued, fully
paid, and nonassessable. I-trax holds of record and owns beneficially all of the
outstanding shares or other equity interests of each Subsidiary of I-trax, free
and clear of any restrictions on transfer (other than restrictions under the
Securities Act and state securities laws), Taxes, Security Interests, options,
warrants, purchase rights, contracts, commitments, equities, claims, and
demands.
(k) Litigation. Section 3(k) of the I-trax Disclosure Schedule sets
forth each instance in which any of I-trax, any of its Subsidiaries or any of
their directors or officers in their capacity as such: (i) (A) is subject to any
outstanding injunction, judgment, order, decree, ruling, or charge or (B) is a
party or, to the Knowledge of I-trax, is threatened to be made a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any court
or quasi-judicial or administrative agency of any Federal, state, local, or
foreign jurisdiction or before any arbitrator; and (ii) identifies if such
instance, including associated litigation costs, is covered by insurance. To the
Knowledge of I-trax, and unless otherwise disclosed on Section 3(k) of the
I-trax Disclosure Schedule, none of the actions, suits, proceedings, hearings
and investigations set forth in Section 3(k) of the I-trax Disclosure Schedule
could result in a I-trax Material Adverse Effect. None of I-trax, any of its
Subsidiaries or directors or officers (or employees with responsibility for
litigation matters) of I-trax or any of its Subsidiaries has any reason to
believe that any such action, suit, proceeding, hearing, or investigation may be
brought or threatened against I-trax.
(l) Legal Compliance. Each of I-trax, its Subsidiaries and their
respective predecessors and Affiliates has complied with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of Federal, state, local, and foreign
governments (and all agencies thereof) except where failure to comply with such
laws would not, individually or in the aggregate, have an I-trax Material
Adverse Effect, and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or commenced against any of
them alleging any failure so to comply.
(m) Title to Assets. Each of I-trax and its Subsidiaries has good and
marketable title to, or a valid leasehold interest in, the properties and assets
used by it and located on its premises or, except for properties and assets
disposed of in the Ordinary Course of Business since September 30, 2003, shown
on the of I-trax and its Subsidiaries' consolidated balance sheet at September
30, 2003, free and clear of all Security Interests (other than Security
Interests disclosed on Section 3(r) of the I-trax Disclosure Schedule), except
where failure to have such marketable title or valid leasehold interest,
individually or in the aggregate, would not have an I-trax Material Adverse
Effect.
(n) Undisclosed Liabilities. None of I-trax and its Subsidiaries has
any Liability (and there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
it giving rise to any Liability), except for (i) Liabilities set forth on the
face of I-trax and its Subsidiaries' consolidated balance sheet at September 30,
19
2003 (rather than in any notes thereto), (ii) Liabilities which have arisen
after September 30, 2003 in the Ordinary Course of Business (none of which
results from, arises out of, relates to, is in the nature of, or was caused by
any breach of contract, breach of warranty, tort, infringement, or violation of
law), and (iii) Liabilities which, individually or in the aggregate, do not
constitute an I-trax Material Adverse Effect.
(o) Real Property.
(i) None of I-trax and its Subsidiaries owns any real property.
(ii) Section 3(o)(ii) of the I-trax Disclosure Schedule lists and
describes briefly all real property leased or subleased to I-trax or
its Subsidiaries. I-trax has delivered to I-trax correct and complete
copies of the leases and subleases listed in Section 3(o)(ii) of the
I-trax Disclosure Schedule (as amended to date). With respect to each
lease and sublease listed in Section 3(o)(ii) of the I-trax Disclosure
Schedule: (A) the lease or sublease is in full force and effect; (B)
the lease or sublease will continue to be in full force and effect on
identical terms immediately following the consummation of the
transactions contemplated by this Agreement; (C) to the Knowledge of
I-trax, no party to the lease or sublease is in breach or default, and
no event has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination, modification, or
acceleration thereunder; (D) the Knowledge of I-trax, no party to the
lease or sublease has repudiated any provision thereof; (E) there are
no disputes, oral agreements, or forbearance programs in effect as to
the lease or sublease; (F) with respect to each sublease, to the
Knowledge of I-trax, the representations and warranties set forth in
subsections (A) through (E) above are true and correct with respect to
the underlying lease; (G) none of I-trax and its Subsidiaries has
assigned, transferred, conveyed, mortgaged, deeded in trust, or
encumbered any interest in the leasehold or subleasehold created
thereunder; and (H) to the Knowledge of I-trax, all facilities leased
or subleased thereunder have received all approvals of Authorities
(including licenses and permits) required in connection with the
operation thereof and have been operated and maintained in accordance
with applicable laws, rules, and regulations.
(p) Intellectual Property. Section 3(p) of the Disclosure Schedule
lists all registrations and applications for patents, trademarks and copyrights
by I-trax and all Universal Resource Locators material to the conduct of the
business of I-trax and its Subsidiaries as now conducted. Section 3(p) of the
Disclosure Schedule also identifies each trade name or unregistered trademark or
service xxxx used by I-trax and its Subsidiaries in connection with any of their
businesses. To the Knowledge of I-trax, each of I-trax and its Subsidiaries has
all right, title and interest in, or a valid and binding license to use, the
Intellectual Property necessary or required to conduct the business of I-trax
and its Subsidiaries as now conducted. None of I-trax and its Subsidiaries is in
default (nor would it be in default but for the giving of notice or lapse of
time or both) under any license, sublicense, agreement, or permission to use
such Intellectual Property and, to the Knowledge of I-trax, there is no
threatened dispute or disagreement with respect to any such license, sublicense,
agreement, or permission except for such defaults, disputes and disagreements
which, individually or in the aggregate, would not have an I-trax Material
Adverse Effect. To the Knowledge of I-trax, such Intellectual Property is not
being infringed or misappropriated by any third party and no such claims have
been brought against any third party. To the Knowledge of I-trax, each item of
Intellectual Property owned or used by I-trax and its Subsidiaries immediately
prior to the Closing will be owned or available for use by First Merger
Surviving Corporation and its Subsidiaries on identical terms and conditions
immediately subsequent to the Closing. To the Knowledge of I-trax, none of
I-trax and its Subsidiaries is infringing any Intellectual Property of any third
party and no litigation is pending and no notice or other claim in writing has
been received by I-trax or its Subsidiaries alleging any such infringement.
Except as set forth in Section 3(p) of the Disclosure Schedule, to the Knowledge
of I-trax, there are no claims against I-trax or any of its Subsidiaries
asserting the invalidity, misuse or unenforceability of any Intellectual
Property. To the Knowledge of I-trax, none of the present or former executive
officers or employees of I-trax or any of its Subsidiaries has any claims
whatsoever (whether direct, indirect or contingent) of right, title or interest
in or to any of the Intellectual Property of I-trax or any of its Subsidiaries.
To the Knowledge of I-trax, none of the present or former executive officers or
employees of I-trax or any of its Subsidiaries are precluded by an agreement
from engaging in the business of I-trax as now conducted.
20
(q) Tangible Assets. I-trax owns or leases all buildings, machinery,
equipment, and other tangible assets necessary for the conduct of its businesses
as currently conducted and as currently proposed to be conducted except where
failure to own or lease such assets, individually or in the aggregate, would not
have an I-trax Material Adverse Effect. Each such tangible asset is free from
defects (patent and latent), has been maintained in accordance with normal
industry practice, is in good operating condition and repair (subject to normal
wear and tear), and is suitable for the purposes for which it is used and is
proposed to be used except where such defects would not, individually or in the
aggregate, have an I-trax Material Adverse Effect.
(r) Contracts. Except as executed in connection with the transactions
contemplated herein, Section 3(r) of the I-trax Disclosure Schedule lists the
following contracts and other agreements to which I-trax or any of its
Subsidiaries is a party:
(i) any agreement (or group of related agreements) for the lease
of personal property to or from any Person providing for lease payments
in excess of $50,000 per annum;
(ii) any agreement (or group of related agreements) for the
purchase of raw materials, commodities, supplies, products, or other
personal property, or for the receipt of services, the performance of
which will extend over a period of more than one year, result in a
material loss to I-trax or any of Subsidiaries or involve consideration
in excess of $50,000;
(iii) any agreement (or group of related agreements) for the sale
of raw materials, commodities, supplies, products, or other personal
property, or for the furnishing of services, the performance of which
will extend over a period of more than one year, result in a material
loss to I-trax or any of Subsidiaries or involve consideration in
excess of $50,000;
(iv) any agreement concerning a partnership or joint venture;
(v) any agreement (or group of related agreements) under which it
has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of
$50,000 or under which it has granted a Security Interest on any of its
assets, tangible or intangible;
(vi) any agreement concerning confidentiality or noncompetition;
(vii) any agreement with any of the I-trax Stockholders or any of
their Affiliates (other than I-trax);
(viii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors,
officers, and employees;
(ix) any collective bargaining agreement;
(x) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of $100,000 or providing severance benefits;
(xi) any agreement under which it has advanced or loaned any
amount to any of its directors, officers, and employees outside the
Ordinary Course of Business;
I-trax has delivered to I-trax a correct and complete copy of each agreement
listed in Section 3(r) of the I-trax Disclosure Schedule (as amended to date)
and a written summary setting forth the terms and conditions of each oral
agreement referred to in Section 3(r) of the I-trax Disclosure Schedule. With
respect to each such agreement: (A) the agreement is in full force and effect;
21
(B) the agreement will continue to be in full force and effect on identical
terms immediately following the consummation of the transactions contemplated
hereby; (C) I-trax, its Subsidiaries and, to the Knowledge of I-trax, the other
parties thereto, are not in breach or default, and, to the Knowledge of I-trax,
no event has occurred which with notice or lapse of time would constitute a
breach or default, or permit termination, modification, or acceleration, under
the agreement; and (D) to the Knowledge of I-trax, no party has repudiated any
provision of the agreement.
(s) Notes and Accounts Receivable. Section 3(s) of the I-trax
Disclosure Schedule sets a list of all notes and accounts receivable of I-trax
and its Subsidiaries. All such notes and accounts receivable of I-trax and its
Subsidiaries are reflected properly on their books and records, are valid
receivables subject to no setoffs or counterclaims, are current and collectible,
and will be collected in accordance with their terms at their recorded amounts,
subject only to the reserve for bad debts set forth on the face of I-trax and
its Subsidiaries consolidated balance sheet at September 30, 2003 (rather than
in any notes thereto) as adjusted for the passage of time through the Closing
Date in accordance with the past custom and practice of I-trax and its
Subsidiaries, except where the validity and collection of such accounts
receivables and any failure to properly record such notes and accounts
receivables would not, individually or in the aggregate, have an I-trax Material
Adverse Effect.
(t) Insurance.
(i) Section 4(t) of the I-trax Disclosure Schedule sets forth the
following information with respect to each insurance policy (including
policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which I-trax
or any of its Subsidiaries is a party, a named insured, or otherwise
the beneficiary of coverage: (A) the name of the insurer, the name of
the policyholder, and the name of each covered insured; (B) the policy
number and the period of coverage; (C) the scope (including an
indication of whether the coverage was on a claims made, occurrence, or
other basis) and amount (including a description of how deductibles and
ceilings are calculated and operate) of coverage; and (D) a description
of any retroactive premium adjustments or other loss-sharing
arrangements.
(ii) With respect to each such insurance policy: (A) the policy
is in full force and effect; (B) the policy will continue to be in full
force and effect on identical terms immediately following the
consummation of the transactions contemplated hereby; (C) neither
I-trax, any of its Subsidiaries nor, to the Knowledge of I-trax, any
other party to any such policy is in breach or default (including with
respect to the payment of premiums or the giving of notices), and no
event has occurred which, with notice or the lapse of time, would
constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; and (D) no party to
the policy has repudiated any provision thereof. Each of I-trax and its
Subsidiaries has been covered during the period of its existence by
insurance in scope and amount customary and reasonable for the
businesses in which it has engaged. Section 3(t) of the I-trax
Disclosure Schedule describes any self-insurance arrangements affecting
any of I-trax and its Subsidiaries.
(u) Employees. Section 3(u) of the I-trax Disclosure Schedule lists
each executive officer of I-trax, such executive's annual base salary as of such
date and such executive's expected base salary for the next calendar year. To
the Knowledge of I-trax, no executive, key employee, or group of employees of
I-trax or its Subsidiaries has any plans to terminate employment with I-trax or
any of its Subsidiaries. None of I-trax and its Subsidiaries is a party to or
bound by any collective bargaining agreement, and has not experienced any
strikes, grievances, claims of unfair labor practices, or other collective
bargaining disputes. None of I-trax and its Subsidiaries has committed any
unfair labor practice. I-trax has no Knowledge of any organizational effort
currently being made or threatened by or on behalf of any labor union with
respect to employees of any of I-trax and its Subsidiaries.
(v) Employee Benefits. None of I-trax and its Subsidiaries is a member
of a Controlled Group. Except as disclosed in Section 3(v) of the I-trax
Disclosure Schedule, none of I-trax and its Subsidiaries maintains any Plan or
any other severance, bonus, stock option, stock appreciation, stock purchase,
restricted stock, retirement, insurance, profit sharing, deferred compensation,
change of control, incentive or fringe benefit plan, agreement or arrangement,
whether written or unwritten, providing benefits for employees or former
employees of I-trax or any of its Subsidiaries (including such arrangements
22
contained within the provisions of an individual employment or consulting
agreement). None of I-trax and its Subsidiaries maintains or has ever maintained
an Employee Pension Benefit Plan which is a "defined benefit" or other plan
subject to the funding requirements of Section 302 of ERISA or Code Section 312,
or which is subject to Title IV of ERISA. None of I-trax and its Subsidiaries is
now nor has it ever been obligated to contribute to a Multiemployer Plan. None
of the plans, agreements or arrangements listed in Section 3(v) of the I-trax
Disclosure Schedule is an Employee Welfare Benefit Plan which provides for
benefits or coverage for any former or retired employees or their dependents,
except to the extent required by Code Section 3980B or Section 601 et. seq. of
ERISA. Each plan, agreement or arrangement listed on Section 3(v) of the I-trax
Disclosure Schedule has at all times been maintained and administered in all
material respects in accordance with its terms and the applicable requirements
of the Code and ERISA, including the reporting, disclosure and fiduciary
responsibility requirements thereof. I-trax has delivered or after the Closing
will deliver to I-trax true and complete copies of all plan documents and
summary plan descriptions of the plans, agreements or arrangements listed on
Section 3(v) of the I-trax Disclosure Schedule. I-trax has also delivered to
I-trax true and complete copies of the IRS Form 5500 filed in the most recent
year with respect to any such plan, agreement or arrangement, including all
schedules thereto.
(w) Guaranties. None of I-trax and its Subsidiaries is a guarantor or
otherwise liable for any Liability or obligation (including indebtedness) of any
other Person.
(x) Environmental, Health, and Safety Matters. To the Knowledge of
I-trax, each of I-trax, its Subsidiaries and their respective predecessors and
Affiliates has complied and is in compliance with all Environmental, Health, and
Safety Requirements. Without limiting the generality of the foregoing, each of
I-trax, its Subsidiaries and their respective predecessors and Affiliates has
obtained and complied with, and is in compliance with, all permits, licenses and
other authorizations that are required pursuant to Environmental, Health, and
Safety Requirements for the occupation of its facilities and the operation of
its business, except where such compliance, individually or in the aggregate,
would not have an I-Trax Material Adverse Effect. None of I-trax, its
Subsidiaries and their predecessors and Affiliates has received any written or
oral notice, report or other information regarding any actual or alleged
violation of Environmental, Health, and Safety Requirements, or any liabilities
or potential liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise), including any investigatory, remedial or corrective obligations,
relating to any of them or its facilities arising under Environmental, Health,
and Safety Requirements.
(y) Certain Business Relationships with I-trax. Except as disclosed in
the most recent Proxy Statement filed with the SEC by I-trax prior to the date
of this Agreement, or in Section 3(y) of the I-trax Disclosure Schedules, none
of I-trax Stockholders or any of their Affiliates has been involved in any
contract, lease or business arrangement or relationship with I-trax within the
past 12 months, and none of I-trax Stockholders or any of their Affiliates owns
any asset, tangible or intangible, which is used in the business of I-trax or
any of its Subsidiaries.
(z) Status of Officers and Directors. No officer or director of I-trax
has been involved in legal proceedings that would currently require disclosure
in any registration statement under the Securities Act covering I-trax's
securities under Section 401(f) of Regulation S-K promulgated by the SEC if such
registration statement were to be filed on the date hereof.
(aa) Investment. I-trax is not acquiring the CHDM Shares with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act.
(bb) Disclosure. The representations and warranties contained in this
Section 3 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 3 not misleading.
(cc) Definitive Proxy Materials. None of the information supplied or to
be supplied by I-trax for inclusion or incorporation by reference in (i) the
Definitive Proxy Materials, or (ii) any other documents to be filed with the SEC
in connection with the transactions contemplated hereby will, at the respective
23
times such documents are filed, and, in the case of the Definitive Proxy
Materials, when it is delivered to I-trax Stockholders cause the Definitive
Proxy Materials or such other documents to contain any untrue statement of a
material fact, or omit to state any material fact necessary in order to make the
statements therein not misleading. All documents that I-trax is responsible for
filing with the SEC and any other regulatory agency in connection with the
transactions contemplated by this Agreement will comply as to form in all
material respects with the provisions of applicable law and any applicable rules
or regulations thereunder. I-trax, however, makes no representation with respect
to statements made in the documentation referenced in this Section 3(cc) based
on information supplied by CHDM. The offer and sale by I-trax of the I-trax
Common Shares and I-trax Preferred Shares pursuant to this Agreement will be
exempt from registration under the Securities Act and the applicable state
securities laws, or if not exempt under applicable state securities laws, I-trax
will take such steps as are required to register such shares in compliance with
the applicable state securities laws.
4. Representations and Warranties of CHDM. CHDM represents and warrants
to I-trax and Acquisition that the statements contained in this Section 4 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 4)
except as set forth in the CHDM Disclosure Schedule (the "CHDM Disclosure
Schedule"). The CHDM Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this Section
4.
(a) Organization. Each of CHDM and its Subsidiaries is a corporation,
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its formation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. Each of CHDM and its Subsidiaries is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required, except for failures to be so duly
authorized or good standing that would not, individually or in the aggregate,
have a CHDM Material Adverse Effect. Each of CHDM and its Subsidiaries has full
corporate power and authority and all licenses, permits, and authorizations
necessary to carry on the businesses in which it is engaged and in which it
proposes to engage and to own and use the properties owned and used by it.
Section 4(a) of the CHDM Disclosure Schedule lists all directors and officers of
CHDM and each of its Subsidiaries. CHDM has delivered to I-trax correct and
complete copies, as applicable, of its and each of its Subsidiary's charters,
bylaws and other organizational documents and all amendments thereto to the date
hereof. The minute books (containing, as the case may be, the records of
meetings of the stockholders, the board of directors, and any committees of the
board of directors), the stock certificates, and the stock records of CHDM are
correct and complete. CHDM is not in default under or in violation of any
provision of its organizational documents, charter or bylaws.
(b) Capitalization. The authorized capital of CHDM consists of 403,500
shares, of which 250,000 shares are designated as common stock, par value $0.001
per share, of which 233,247 shares are issued and outstanding and none of which
are held in treasury, and of which 93,500 shares are designated as Series A
Preferred Stock, without par value per share, and 60,000 shares are designated
as Series B Preferred Stock, without par value per share, none of which is
issued or outstanding. All of the issued and outstanding CHDM Shares have been
duly authorized, are validly issued, fully paid, and nonassessable, and are held
of record by the respective CHDM Stockholders as set forth in Section 4(b) of
the CHDM Disclosure Schedule. Except as set forth in Section 4(b) of the CHDM
Disclosure Schedule, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights,
agreements of sale or other contracts or commitments that could require CHDM to
issue, sell, or otherwise cause to become outstanding any of its capital stock.
Except as set forth in Section 4(b) of the CHDM Disclosure Schedule, there are
no outstanding or authorized equity appreciation, phantom stock, profit
participation, or similar rights with respect to CHDM. Except as set forth in
Section 4(b) of the CHDM Disclosure Schedule, there are no voting trusts,
proxies, or other agreements or understandings with respect to the voting of the
capital stock of CHDM.
(c) Authorization of Transaction. CHDM has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder; provided, however, that CHDM
cannot consummate the Merger unless and until it receives the Requisite
Stockholder Approval. This Agreement constitutes the valid and legally binding
obligation of CHDM enforceable in accordance with its terms.
24
(d) Noncontravention. Except as disclosed on Schedule 4(d) of the CHDM
Disclosure Schedule, neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will (i) violate
any constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government, governmental
agency, or court to which CHDM or any of its Subsidiaries is subject or any
provision of the charter or bylaws of CHDM or any of its Subsidiaries or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which CHDM or any of its Subsidiaries is a
party or by which it is bound or to which any of its assets is subject (or
result in the imposition of any Security Interest on any of its assets),
excluding from the foregoing clauses (i) and (ii) violations or conflicts that,
individually or in the aggregate, would not have a CHDM Material Adverse Effect.
Other than in connection with the provisions of the Delaware General Corporation
Law, the Securities Act, the state securities laws and the Xxxx-Xxxxx-Xxxxxx
Act, none of CHDM and its Subsidiaries needs to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any government
or governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement.
(e) Brokers' Fees. Except as disclosed on Schedule 4(e) of the CHDM
Disclosure Schedule, none of CHDM, its Subsidiaries and CHDM Stockholders has or
will have any Liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by this
Agreement.
(f) Title to Assets. Each of CHDM and its Subsidiaries has good and
marketable title to, or a valid leasehold interest in, the properties and assets
used by it and located on its premises or, except for properties and assets
disposed of in the Ordinary Course of Business since the date of the Most Recent
Balance Sheet, shown on the Most Recent Balance Sheet, free and clear of all
Security Interests (other than Security Interests disclosed on Section 4(f) of
the CHDM Disclosure Schedule), except where failure to have such marketable
title or valid leasehold interest, individually or in the aggregate, would not
have a CHDM Material Adverse Effect.
(g) Subsidiaries. Section 4(g) of the CHDM Disclosure Schedule sets
forth for each Subsidiary of CHDM (i) its name and jurisdiction of incorporation
or formation, (ii) the type of entity, (iii) the number of shares of authorized
capital stock of each class of its capital stock or other equity interests, (iv)
the number of issued and outstanding shares of each class of its capital stock
or other equity interests, the names of the holders thereof, and the number of
shares or other equity interests held by each such holder, and (v) the number of
shares of its capital stock or other equity interests held in treasury. All of
the issued and outstanding shares of capital stock or other equity interests of
each Subsidiary of CHDM have been duly authorized and are validly issued, fully
paid, and nonassessable. Except as disclosed on Section 4(g) of the CHDM
Disclosure Schedule, CHDM holds of record and owns beneficially all of the
outstanding shares or other equity interests of each Subsidiary of CHDM, free
and clear of any restrictions on transfer (other than restrictions under the
Securities Act and state securities laws), Taxes, Security Interests, options,
warrants, purchase rights, contracts, commitments, equities, claims, and
demands.
(h) Financial Statements. Attached to Section 4(h) of the CHDM
Disclosure Schedule are the following financial statements (collectively the
"Financial Statements"): (i) audited consolidated balance sheet and statements
of income, changes in stockholders' equity, and cash flow as of and for the
fiscal years ended December 31, 2000, December 31, 2001 and December 31, 2002
(the "Most Recent Fiscal Year End") for CHDM and its Subsidiaries; (ii)
unaudited balance sheet and statements of income, changes in stockholders'
equity, and cash flow (the "Most Recent Financial Statements") as of and for the
ten months ended October 31, 2003 (the "Most Recent Fiscal Month End") for CHDM
and its Subsidiaries; and (iii) unaudited consolidating balance sheet and
statements of income, changes in stockholders' equity, and cash flow as of and
for the Most Recent Fiscal Year End for CHDM and its Subsidiaries. The Financial
Statements (including, if applicable, the notes thereto) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, present fairly the financial condition of CHDM and its
Subsidiaries as of such dates and the results of operations of CHDM and its
Subsidiaries for such periods, are correct and complete, and are consistent with
the books and records of CHDM and its Subsidiaries (which books and records are
correct and complete); provided, however, that the Most Recent Financial
25
Statements are subject to normal year-end adjustments (which will not be
material individually or in the aggregate) and lack footnotes and other
presentation items.
(i) Events Subsequent to Most Recent Fiscal Month End. Since the Most
Recent Fiscal Month End and except as disclosed in Section 4(i) of the CHDM
Disclosure Schedule:
(i) None of CHDM and its Subsidiaries has sold, leased,
transferred, or assigned any of its assets, tangible or intangible
outside the Ordinary Course of Business;
(ii) None of CHDM and its Subsidiaries has entered into any
agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more than
$350,000;
(iii) No party (including CHDM or its Subsidiaries) has
accelerated, terminated, modified, or canceled any agreement, contract,
lease, or license (or series of related agreements, contracts, leases,
and licenses) involving more than $100,000 to which CHDM is a party or
by which it is bound;
(iv) None of CHDM and its Subsidiaries has granted any Security
Interest on any of its assets, tangible or intangible;
(v) None of CHDM and its Subsidiaries has made any capital
expenditure (or series of related capital expenditures) involving more
than $350,000;
(vi) None of CHDM and its Subsidiaries has made any capital
investment in, any loan to, or any acquisition of the securities or
assets of, any other Person (or series of related capital investments,
loans, and acquisitions) involving more than $350,000;
(vii) None of CHDM and its Subsidiaries has issued any note,
bond, or other debt security or created, incurred, assumed, or
guaranteed any indebtedness for borrowed money or capitalized lease
obligation either involving more than $25,000 singly or $350,000 in the
aggregate;
(viii) None of CHDM and its Subsidiaries has delayed or postponed
the payment of accounts payable and other Liabilities outside the
Ordinary Course of Business;
(ix) None of CHDM and its Subsidiaries has canceled, compromised,
waived or released any right or claim (or series of related rights and
claims) involving more than $350,000;
(x) None of CHDM and its Subsidiaries has granted any license or
sublicense of any rights under or with respect to any Intellectual
Property outside the Ordinary Course of Business;
(xi) There has been no change made or authorized in the charter,
bylaws or other organizational documents of CHDM or any Subsidiary;
(xii) None of CHDM and its Subsidiaries has issued, sold, or
otherwise disposed of any of its capital stock, or granted any options,
warrants, or other rights to purchase or obtain (including upon
conversion, exchange, or exercise) any of its capital stock, other than
options to employees granted in the Ordinary Course of Business all of
which are disclosed in Section 4(b) of the CHDM Disclosure Schedule;
(xiii) None of CHDM and its Subsidiaries has declared, set aside,
or paid any dividend or made any distribution with respect to its
capital stock (whether in cash or in kind) or redeemed, purchased, or
otherwise acquired any of its capital stock;
26
(xiv) None of CHDM and its Subsidiaries has experienced any
damage, destruction, or loss (whether or not covered by insurance) to
its property except where such damage, destruction or loss did not
cause a CHDM Material Adverse Effect;
(xv) None of CHDM and its Subsidiaries has made any loan to, or
entered into any other transaction with, any of its directors,
managers, officers, and employees;
(xvi) None of CHDM and its Subsidiaries has entered into any
employment contract or collective bargaining agreement, written or
oral, or modified the terms of any existing such contract or agreement;
(xvii) None of CHDM and its Subsidiaries has granted any increase
in the base compensation or made any other change in employment terms
of any of its directors, managers, officers, and employees;
(xviii) None of CHDM and its Subsidiaries has adopted, amended,
modified, or terminated any bonus, profit-sharing, incentive,
severance, or other plan, contract, or commitment for the benefit of
any of its directors, officers, and employees (or taken any such action
with respect to any other Employee Welfare Benefit Plan or Employee
Pension Benefit Plan);
(xix) None of CHDM and its Subsidiaries has made or pledged to
make any charitable or other capital contribution;
(xx) There has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course of
Business involving CHDM or its Subsidiaries which would have an
economic impact of more than $350,000;
(xxi) None of CHDM and its Subsidiaries has agreed to do any of
the foregoing; and
(xxii) There has not been a CHDM Material Adverse Effect.
(j) Undisclosed Liabilities. None of CHDM and its Subsidiaries has any
Liability (and there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
it giving rise to any Liability), except for (i) Liabilities set forth on the
face of the Most Recent Balance Sheet (rather than in any notes thereto), (ii)
Liabilities which have arisen after the Most Recent Fiscal Month End in the
Ordinary Course of Business (none of which results from, arises out of, relates
to, is in the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law), and (iii) Liabilities which,
individually or in the aggregate, do not constitute a CHDM Material Adverse
Effect.
(k) Legal Compliance. Each of CHDM, its Subsidiaries and their
respective predecessors and Affiliates has complied with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of Federal, state, local, and foreign
governments (and all agencies thereof) except where failure to comply with such
laws would not, individually or in the aggregate, have a CHDM Material Adverse
Effect, and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or commenced against any of
them alleging any failure so to comply.
(l) Tax Matters.
(i) Each of CHDM and its Subsidiaries has filed all Tax Returns
that it was required to file. All such Tax Returns were correct and
complete in all material respects. All Taxes owed by CHDM and its
Subsidiaries (whether or not shown on any Tax Return) have been paid.
No claim has ever been made by an Authority in a jurisdiction where
CHDM or any of its Subsidiaries does not file Tax Returns that it is or
may be subject to taxation by that jurisdiction. There are no Security
Interests on any of the assets of CHDM and its Subsidiaries that arose
in connection with any failure (or alleged failure) to pay any Tax.
27
(ii) Each of CHDM and its Subsidiaries has withheld and paid all
Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.
(iii) No director or officer (or employee responsible for Tax
matters) of CHDM or its Subsidiaries has been informed formally or
informally or has any reason to believe any Authority may assess
additional Taxes for any period for which Tax Returns have been filed
or is aware of any state of facts which could give rise to any claim,
audit, action, suit, proceeding, or investigation which respect to any
Tax for which CHDM could be liable. Schedule 4(l)(iii) of the CHDM
Disclosure Schedule lists all Federal, state, local, and foreign income
Tax Returns filed with respect to CHDM and its Subsidiaries for taxable
periods ended on or after December 31, 2000, indicates those Tax
Returns that have been audited, and indicates those Tax Returns that
currently are the subject of audit. CHDM has delivered to I-trax
correct and complete copies of all Federal income Tax Returns,
examination reports, and statements of deficiencies assessed against or
agreed to by CHDM or any of its Subsidiaries for calendar year 2000
through the Closing Date.
(iv) None of CHDM and its Subsidiaries has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency.
(v) None of CHDM and its Subsidiaries has made any payments, is
not obligated to make any payments, or is a party to any agreement that
under certain circumstances could obligate it to make any payments that
will not be deductible under Code Section 280G. None of CHDM and its
Subsidiaries has been a United States real property holding corporation
within the meaning of Code Section 897(c)(2) during the applicable
period specified in Code Section 897(c)(1)(A)(ii). None of CHDM and its
Subsidiaries is a party to any Tax allocation or sharing agreement.
None of CHDM and its Subsidiaries (A) has been a member of an
Affiliated Group filing a consolidated Federal income Tax Return (other
than a group the common parent of which was CHDM) or (B) has any
Liability for the Taxes of any Person (other than CHDM) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local,
or foreign law), as a transferee or successor, by contract, or
otherwise.
(vi) The unpaid Taxes of CHDM and its Subsidiaries (A) did not,
as of the Most Recent Fiscal Year End, exceed the reserve for Tax
Liability (rather than any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) set forth on
the face of the Most Recent Balance Sheet (rather than in any notes
thereto) and (B) do not exceed that reserve as adjusted for the passage
of time through the Closing Date in accordance with the past custom and
practice of CHDM or its Subsidiary in filing its Tax Returns.
(m) Real Property.
(i) None of CHDM and its Subsidiaries owns any real property.
(ii) Section 4(m)(ii) of the CHDM Disclosure Schedule lists and
describes briefly all real property leased or subleased to CHDM or its
Subsidiaries. CHDM has delivered to I-trax correct and complete copies
of the leases and subleases listed in Section 4(m)(ii) of the CHDM
Disclosure Schedule (as amended to date). With respect to each lease
and sublease listed in Section 4(m)(ii) of the CHDM Disclosure
Schedule: (A) the lease or sublease is in full force and effect; (B)
the lease or sublease will continue to be in full force and effect on
identical terms immediately following the consummation of the
transactions contemplated by this Agreement; (C) to the Knowledge of
CHDM, no party to the lease or sublease is in breach or default, and no
event has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination, modification, or
acceleration thereunder; (D) the Knowledge of CHDM, no party to the
lease or sublease has repudiated any provision thereof; (E) there are
no disputes, oral agreements, or forbearance programs in effect as to
the lease or sublease; (F) with respect to each sublease, to the
Knowledge of CHDM, the representations and warranties set forth in
subsections (A) through (E) above are true and correct with respect to
the underlying lease; (G) none of CHDM and its Subsidiaries has
assigned, transferred, conveyed, mortgaged, deeded in trust, or
28
encumbered any interest in the leasehold or subleasehold created
thereunder; and (H) to the Knowledge of CHDM, all facilities leased or
subleased thereunder have received all approvals of Authorities
(including licenses and permits) required in connection with the
operation thereof and have been operated and maintained in accordance
with applicable laws, rules, and regulations.
(n) Intellectual Property. Section 4(n) of the CHDM Disclosure Schedule
lists all registrations and applications for patents, trademarks and copyrights
by CHDM and all Universal Resource Locators material to the conduct of the
business of CHDM and its Subsidiaries as now conducted. Section 4(n) of the CHDM
Disclosure Schedule also identifies each trade name or unregistered trademark or
service xxxx used by CHDM and its Subsidiaries in connection with any of their
businesses. To the Knowledge of CHDM, each of CHDM and its Subsidiaries has all
right, title and interest in, or a valid and binding license to use, the
Intellectual Property necessary or required to conduct the business of CHDM and
its Subsidiaries as now conducted. None of CHDM and its Subsidiaries is in
default (nor would it be in default but for the giving of notice or lapse of
time or both) under any license, sublicense, agreement, or permission to use
such Intellectual Property and, to the Knowledge of CHDM, there is no threatened
dispute or disagreement with respect to any such license, sublicense, agreement,
or permission except for such defaults, disputes and disagreements which,
individually or in the aggregate, would not have a CHDM Material Adverse Effect.
To the Knowledge of CHDM, such Intellectual Property is not being infringed or
misappropriated by any third party and no such claims have been brought against
any third party. To the Knowledge of CHDM, each item of Intellectual Property
owned or used by CHDM and its Subsidiaries immediately prior to the Closing will
be owned or available for use by Second Merger Surviving Company and its
Subsidiaries on identical terms and conditions immediately subsequent to the
Closing. To the Knowledge of CHDM, none of CHDM and its Subsidiaries is
infringing any Intellectual Property of any third party and no litigation is
pending and no notice or other claim in writing has been received by CHDM or its
Subsidiaries alleging any such infringement. Except as set forth in Section 4(n)
of the CHDM Disclosure Schedule, to the Knowledge of CHDM, there are no claims
against CHDM or any of its Subsidiaries asserting the invalidity, misuse or
unenforceability of any Intellectual Property. To the Knowledge of CHDM, none of
the present or former executive officers or employees of CHDM or any of its
Subsidiaries has any claims whatsoever (whether direct, indirect or contingent)
of right, title or interest in or to any of the Intellectual Property of CHDM or
any of its Subsidiaries. To the Knowledge of CHDM, none of the present or former
executive officers or employees of CHDM or any of its Subsidiaries are precluded
by an agreement from engaging in the business of CHDM as now conducted.
(o) Tangible Assets. CHDM owns or leases all buildings, machinery,
equipment, and other tangible assets necessary for the conduct of its businesses
as currently conducted and as currently proposed to be conducted except where
failure to own or lease such assets, individually or in the aggregate, would not
have a CHDM Material Adverse Effect. Each such tangible asset is free from
defects (patent and latent), has been maintained in accordance with normal
industry practice, is in good operating condition and repair (subject to normal
wear and tear), and is suitable for the purposes for which it is used and is
proposed to be used except where such defects would not, individually or in the
aggregate, have a CHDM Material Adverse Effect.
(p) Contracts. Except as executed in connection with the transactions
contemplated herein, Section 4(p) of the CHDM Disclosure Schedule lists the
following contracts and other agreements to which CHDM or any of its
Subsidiaries is a party:
(i) any agreement (or group of related agreements) for the lease
of personal property to or from any Person providing for lease payments
in excess of $350,000 per annum;
(ii) any agreement (or group of related agreements) for the
purchase of raw materials, commodities, supplies, products, or other
personal property, or for the receipt of services, the performance of
which will extend over a period of more than one year, result in a
material loss to CHDM or any of Subsidiaries or involve consideration
in excess of $350,000;
(iii) any agreement (or group of related agreements) for the sale
of raw materials, commodities, supplies, products, or other personal
property, or for the furnishing of services, the performance of which
will extend over a period of more than one year, result in a material
loss to CHDM or any of Subsidiaries or involve consideration in excess
of $350,000;
29
(iv) any agreement concerning a partnership or joint venture;
(v) any agreement (or group of related agreements) under which it
has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of
$350,000 or under which it has granted a Security Interest on any of
its assets, tangible or intangible;
(vi) any agreement concerning confidentiality or noncompetition;
(vii) any agreement with any of the CHDM Stockholders or any of
their Affiliates (other than CHDM);
(viii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors,
officers, and employees;
(ix) any collective bargaining agreement;
(x) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of $50,000 or providing severance benefits;
(xi) any agreement under which it has advanced or loaned any
amount to any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xii) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $350,000.
CHDM has delivered to I-trax a correct and complete copy of each agreement
listed in Section 4(p) of the CHDM Disclosure Schedule (as amended to date) and
a written summary setting forth the terms and conditions of each oral agreement
referred to in Section 4(p) of the CHDM Disclosure Schedule. With respect to
each such agreement: (A) the agreement is in full force and effect; (B) the
agreement will continue to be in full force and effect on identical terms
immediately following the consummation of the transactions contemplated hereby;
(C) CHDM, its Subsidiaries and, to the Knowledge of CHDM, the other parties
thereto, are not in breach or default, and, to the Knowledge of CHDM, no event
has occurred which with notice or lapse of time would constitute a breach or
default, or permit termination, modification, or acceleration, under the
agreement; and (D) to the Knowledge of CHDM, no party has repudiated any
provision of the agreement.
(q) Notes and Accounts Receivable. Section 4(r) of the CHDM Disclosure
Schedule sets forth the list of all notes and accounts receivable of CHDM and
its Subsidiaries. All such notes and accounts receivable of CHDM and its
Subsidiaries are reflected properly on their books and records, are valid
receivables subject to no setoffs or counterclaims, are current and collectible,
and will be collected in accordance with their terms at their recorded amounts,
subject only to the reserve for bad debts set forth on the face of the Most
Recent Balance Sheet (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of CHDM and its Subsidiaries, except where the validity and collection
of such accounts receivables and any failure to properly record such notes and
accounts receivables would not, individually or in the aggregate, have a CHDM
Material Adverse Effect.
(r) Insurance.
(i) Section 4(r) of the CHDM Disclosure Schedule sets forth the
following information with respect to each insurance policy (including
policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which CHDM
or any of its Subsidiaries is a party, a named insured, or otherwise
30
the beneficiary of coverage: (A) the name of the insurer, the name of
the policyholder, and the name of each covered insured; (B) the policy
number and the period of coverage; (C) the scope (including an
indication of whether the coverage was on a claims made, occurrence, or
other basis) and amount (including a description of how deductibles and
ceilings are calculated and operate) of coverage; and (D) a description
of any retroactive premium adjustments or other loss-sharing
arrangements.
(ii) With respect to each such insurance policy: (A) the policy
is in full force and effect; (B) the policy will continue to be in full
force and effect on identical terms immediately following the
consummation of the transactions contemplated hereby; (C) neither CHDM,
any of its Subsidiaries nor, to the Knowledge of CHDM, any other party
to any such policy is in breach or default (including with respect to
the payment of premiums or the giving of notices), and no event has
occurred which, with notice or the lapse of time, would constitute such
a breach or default, or permit termination, modification, or
acceleration, under the policy; and (D) no party to the policy has
repudiated any provision thereof. Each of CHDM and its Subsidiaries has
been covered during the period of its existence by insurance in scope
and amount customary and reasonable for the businesses in which it has
engaged. Section 4(r) of the CHDM Disclosure Schedule describes any
self-insurance arrangements affecting any of CHDM and its Subsidiaries.
(s) Litigation. Section 4(s) of the CHDM Disclosure Schedule sets forth
each instance in which any of CHDM, any of its Subsidiaries or any of their
directors or officers in their capacity as such: (i) (A) is subject to any
outstanding injunction, judgment, order, decree, ruling, or charge or (B) is a
party or, to the Knowledge of CHDM, is threatened to be made a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any court
or quasi-judicial or administrative agency of any Federal, state, local, or
foreign jurisdiction or before any arbitrator; and (ii) identifies if such
instance, including associated litigation costs, is covered by insurance. To the
Knowledge of CHDM, and unless otherwise disclosed on Section 4(s) of the CHDM
Disclosure Schedule, none of the actions, suits, proceedings, hearings and
investigations set forth in Section 4(s) of the CHDM Disclosure Schedule could
result in a CHDM Material Adverse Effect. None of CHDM, any of its Subsidiaries
or directors or officers (or employees with responsibility for litigation
matters) of CHDM or any of its Subsidiaries has any reason to believe that any
such action, suit, proceeding, hearing, or investigation may be brought or
threatened against CHDM.
(t) Employees. Section 4(t) of the CHDM Disclosure Schedule lists each
executive officer of CHDM, such officer's annual base salary as of such date and
such officer's expected base salary for the next calendar year. To the Knowledge
of CHDM, no executive, key employee, or group of employees of CHDM or its
Subsidiaries has any plans to terminate employment with CHDM or any of its
Subsidiaries. None of CHDM and its Subsidiaries is a party to or bound by any
collective bargaining agreement, and has not experienced any strikes,
grievances, claims of unfair labor practices, or other collective bargaining
disputes. None of CHDM and its Subsidiaries has committed any unfair labor
practice. CHDM has no Knowledge of any organizational effort currently being
made or threatened by or on behalf of any labor union with respect to employees
of any of CHDM and its Subsidiaries.
(u) Employee Benefits. None of CHDM and its Subsidiaries is a member of
a Controlled Group. Except as disclosed in Section 4(u) of the CHDM Disclosure
Schedule, none of CHDM and its Subsidiaries maintains any Plan or any other
severance, bonus, stock option, stock appreciation, stock purchase, restricted
stock, retirement, insurance, profit sharing, deferred compensation, change of
control, incentive or fringe benefit plan, agreement or arrangement, whether
written or unwritten, providing benefits for employees or former employees of
CHDM or any of its Subsidiaries (including such arrangements contained within
the provisions of an individual employment or consulting agreement). None of
CHDM and its Subsidiaries maintains or has ever maintained an Employee Pension
Benefit Plan which is a "defined benefit" or other plan subject to the funding
requirements of Section 302 of ERISA or Code Section 412, or which is subject to
Title IV of ERISA. None of CHDM and its Subsidiaries is now nor has it ever been
obligated to contribute to a Multiemployer Plan. None of the plans, agreements
or arrangements listed in Section 4(u) of the CHDM Disclosure Schedule is an
Employee Welfare Benefit Plan which provides for benefits or coverage for any
former or retired employees or their dependents, except to the extent required
by Code Section 4980B or Section 601 et. seq. of ERISA. Each plan, agreement or
31
arrangement listed on Section 4(u) of the CHDM Disclosure Schedule has at all
times been maintained and administered in all material respects in accordance
with its terms and the applicable requirements of the Code and ERISA, including
the reporting, disclosure and fiduciary responsibility requirements thereof.
CHDM has delivered or after the Closing will deliver to I-trax true and complete
copies of all plan documents and summary plan descriptions of the plans,
agreements or arrangements listed on Section 4(u) of the CHDM Disclosure
Schedule. CHDM has also delivered to I-trax true and complete copies of the IRS
Form 5500 filed in the most recent year with respect to any such plan, agreement
or arrangement, including all schedules thereto.
(v) Guaranties. Except as disclosed on Schedule 4(v) of the CHDM
Disclosure Schedule, none of CHDM and its Subsidiaries is a guarantor or
otherwise liable for any Liability or obligation (including indebtedness) of any
other Person.
(w) Environmental, Health, and Safety Matters. Except as disclosed on
Schedule 4(w) of the CHDM Disclosure Schedule, to the Knowledge of CHDM, each of
CHDM, its Subsidiaries and their respective predecessors and Affiliates has
complied and is in compliance with all Environmental, Health, and Safety
Requirements. Without limiting the generality of the foregoing, each of CHDM,
its Subsidiaries and their respective predecessors and Affiliates has obtained
and complied with, and is in compliance with, all permits, licenses and other
authorizations that are required pursuant to Environmental, Health, and Safety
Requirements for the occupation of its facilities and the operation of its
business, except where such compliance, individually or in the aggregate, would
not have a CHDM Material Adverse Effect. None of CHDM, its Subsidiaries and
their predecessors and Affiliates has received any written or oral notice,
report or other information regarding any actual or alleged violation of
Environmental, Health, and Safety Requirements, or any liabilities or potential
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise),
including any investigatory, remedial or corrective obligations, relating to any
of them or its facilities arising under Environmental, Health, and Safety
Requirements.
(x) Certain Business Relationships with CHDM. Except as disclosed in
Section 4(x) of the CHDM Disclosure Schedules, none of CHDM Stockholders or any
of their Affiliates has been involved in any contract, lease or business
arrangement or relationship with CHDM within the past 12 months, and none of
CHDM Stockholders or any of their Affiliates owns any asset, tangible or
intangible, which is used in the business of CHDM or any of its Subsidiaries.
(y) Status of Officers and Directors. No officer or director of CHDM
has been involved in legal proceedings that would currently require disclosure
in any registration statement under the Securities Act covering CHDM's
securities under Section 401(f) of Regulation S-K promulgated by the SEC if such
registration statement were to be filed on the date hereof.
(z) Definitive Proxy Materials. None of the information supplied or to
be supplied by CHDM for inclusion or incorporation by reference in (i) the
Definitive Proxy Materials, or (ii) any other documents to be filed with the SEC
in connection with the transactions contemplated hereby will, at the respective
times such documents are filed, and, in the case of the Definitive Proxy
Materials, when it is delivered to CHDM Stockholders, cause the Definitive Proxy
Materials or such othe documents to contain any untrue statement of a material
fact, or omit to state any material fact necessary in order to make the
statements therein not misleading.
(aa) Disclosure. The representations and warranties contained in this
Section 4 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 3 not misleading.
5. Pre-Closing Covenants. The Parties agree as follows with respect to
the period between the execution of this Agreement and earlier of (x) the
Closing and (y) the termination of this Agreement in accordance with Section 9
below:
(a) General. Each of CHDM, I-trax and Acquisition will use its
reasonable efforts to take all action and to do all things necessary, proper, or
advisable to consummate and make effective the transactions contemplated by this
32
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth in Section 6 below).
(b) Notices and Consents. Each of CHDM, I-trax and Acquisition will
give any notices to third parties, and will use its reasonable efforts to obtain
any third party consents, that any of CHDM, I-trax or Acquisition reasonably may
request in connection with the matters referred to in Sections 3(g) and 4(d)
above, with CHDM giving any notices to third parties, and obtaining any third
party consents under Section 4(d) above and I-trax and Acquisition giving any
notices to third parties, and obtaining any third party consents under Section
3(g) above.
(c) Regulatory Matters and Approvals. CHDM, I-trax and Acquisition will
give any notices to, make any filings with, and use its reasonable efforts to
obtain any authorizations, consents, and approvals of governments and
governmental agencies in connection with the matters referred to in Section 3(g)
and Section 4(d) above. Without limiting the generality of the foregoing:
(i) Delaware Law. Each of I-trax and CHDM will call, and will
take all actions necessary in connection with, a special meeting of
I-trax Stockholders and a special meeting of CHDM Stockholders (the
"Special I-trax Meeting" and "Special CHDM Meeting," respectively) as
soon as reasonably practicable, in order that the I-trax Stockholders
and CHDM Stockholders may consider and vote upon the adoption of this
Agreement and the approval of the Merger in accordance with the
Delaware General Corporation Law and the Delaware Limited Liability
Company Act. Each of I-trax and CHDM will use its reasonable efforts to
obtain the Requisite Stockholder Approval, and the written materials
provided to the CHDM Stockholders in connection with obtaining of the
Requisite Stockholder Approval will contain the affirmative
recommendation of the board of directors of CHDM and I-trax in favor of
the adoption of this Agreement and the approval of the Merger;
provided, however, that no director or officer of CHDM or I-trax shall
be required to violate any fiduciary duty or other requirement imposed
by law in connection therewith.
(ii) Securities Act and State Securities Laws. I-trax and CHDM
will prepare and distribute to CHDM Stockholders and I-trax
Stockholders the Definitive Proxy Materials to permit CHDM Stockholders
and I-trax Stockholders to deliver the Requisite Stockholder Approval,
at the Special I-trax Meeting and Special CHDM Meeting. The Definitive
Proxy Materials will contain such information as is required for the
offering and issuance of I-trax Common Shares and I-trax Preferred
Shares to CHDM Stockholders pursuant to the First Merger to qualify for
an exemption from registration under Section 4(2) of the Securities Act
and the regulations promulgated thereunder. Each of I-trax and CHDM
will, and will cause its professional advisors to, provide to the other
Party any information and assistance required or requested in
connection with the foregoing matters. I-trax will take all actions
that may be necessary, proper, or advisable under Federal and state
securities laws in connection with the offering and issuance of I-trax
Common Shares and I-trax Preferred Shares. Each of I-trax and CHDM
will, and will cause its professional advisors to, provide to the other
Party any information and assistance required or requested in
connection with the foregoing matters, including, if required by
applicable securities laws, an opinion by Irella and Xxxxxxx LLP
supporting any tax matters and consequences to the CHDM Stockholders
described in the Definitive Proxy Materials. I-trax will take all
actions that may be necessary, proper, or advisable under Federal and
state securities laws in connection with the offering and issuance of
I-trax Common Shares and I-trax Preferred Shares.
(iii) Xxxx-Xxxxx-Xxxxxx Act. Each of the Parties will file any
Notification and Report Forms and related material that it may be
required to file with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the
Xxxx-Xxxxx-Xxxxxx Act, will use its reasonable efforts to obtain an
early termination of the applicable waiting period, and will make any
further filings pursuant thereto that may be necessary, proper, or
advisable.
(d) Fairness Opinion. I-trax will engage a financial advisor to
consider the fairness, from a financial point of view, of the Merger
Consideration to I-trax.
33
(e) Financing. I-trax will use commercially reasonable efforts to enter
into agreements to acquire the financings required for I-trax and Acquisition to
deliver the cash portion of the Merger Consideration as soon as reasonably
practicable on terms and conditions reasonably acceptable to CHDM and I-trax.
I-trax will furnish correct and complete copies of such agreements to CHDM. Any
provision of this Agreement to the contrary notwithstanding, none of I-trax and
CHDM will mail the Definitive Proxy Materials to its stockholders until I-trax
has delivered copies of such agreements to CHDM.
(f) Operation of Businesses. None of CHDM, I-trax and their respective
Subsidiaries will engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business unless such practice, action
or transaction is disclosed in writing to the other Parties and approved in
writing by such other Parties (which approval will not be unreasonably
withheld), except for actions taken in connection with the consummation of the
Merger or the terms of this Agreement. Without limiting the generality of the
foregoing, unless each of the following items is disclosed in writing by CHDM to
I-trax and by I-trax to CHDM and approved in writing by the Party receiving the
disclosure (which approval will not be unreasonably withheld), and except in
connection with the consummation of the Merger or the terms of this Agreement:
(i) None of CHDM, I-trax and their respective Subsidiaries will
authorize or effect any change in its charter or bylaws;
(ii) None of CHDM and its Subsidiaries will grant any options,
warrants, or other rights to purchase or obtain any of its capital
stock or issue, sell, or otherwise dispose of any of its capital stock
(except upon the conversion or exercise of options, warrants, and other
rights currently outstanding and identified in Section 4(b) of the CHDM
Disclosure Schedules);
(iii) None of I-trax and its Subsidiaries will grant any options,
warrants, or other rights to purchase or obtain any of its capital
stock or issue, sell, or otherwise dispose of any of its capital stock,
except (A) upon the conversion or exercise of options, warrants, and
other rights currently outstanding, (B) under I-trax's 2000 and 2001
Equity Compensation Plans as presently in force; or (C) at fair market
value as determined by the Board of Directors of I-trax;
(iv) None of CHDM, I-trax and their respective Subsidiaries will
declare, set aside, or pay any dividend or distribution with respect to
its capital stock (whether in cash or in kind), or redeem, repurchase,
or otherwise acquire any of its capital stock, except, subject to an
aggregate limit of $11,000,000, CHDM may redeem or purchase pursuant to
a written instrument in form and substance satisfactory to I-trax in
its sole discretion, and for cash consideration determined by the Board
of Directors of CHDM (and acceptable to I-trax) to be fair in light of
all relevant facts and circumstances, certain outstanding CHDM options
and CHDM Shares in the manner that could not cause a breach of the
representation and warranty of CHDM in Section 4(j) above;
(iii) None of CHDM, I-trax and their respective Subsidiaries will
issue any note, bond, or other debt security or create, incur, assume,
or guarantee any indebtedness for borrowed money or capitalized lease
obligation;
(iv) None of CHDM, I-trax and their respective Subsidiaries will
grant any Security Interest with respect to any of its assets;
(v) None of CHDM, I-trax and their respective Subsidiaries will
make any capital investment in, make any loan to, or acquire the
securities or assets of any other Person, except $4,000,000 to fund the
proposed captive insurance subsidiary of CHDM;
(vi) None of CHDM, I-trax and their respective Subsidiaries will
make any change in employment terms for any of its directors or
officers;
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(vii) None of CHDM and its Subsidiaries will (A) incur any
expenditures of $50,000 or more individually or $100,000 or more in the
aggregate if such expenditures are not set forth in the CHDM and its
Subsidiaries budget attached to this Agreement as Exhibit H or (B)
delay payment of any account payable or accrued liability in a manner
that is not in CHDM's Ordinary Course of Business; and
(viii) None of CHDM and its Subsidiaries will agree to do any of
the foregoing.
(g) Full Access. Each Party will permit representatives of the other
Parties to have full access at all reasonable times and on reasonable notice,
and in a manner so as not to interfere with its normal business operations, to
all of its premises, properties, personnel, books, records (including tax
records), contracts, and documents. Each Party will treat and hold as such any
Confidential Information it receives from the other Party in the course of the
reviews contemplated by this Section 5(g), will not use any such Confidential
Information except in connection with this Agreement, and, if this Agreement is
terminated for any reason whatsoever, agrees to return to the Party providing
such Confidential Information all tangible embodiments (and all copies) thereof
which are in its possession. Any such Confidential Information is further
subject to that certain Confidentiality Agreement dated as of June 16, 2003
between I-trax and CHDM.
(h) Notice of Developments. Each of CHDM, I-trax and Acquisition will
give prompt notice to the others of any material Adverse Consequences or any
breach of any of its respective representations and warranties in Sections 3 and
4 above. No disclosure by any Party pursuant to this Section 5(h), however,
shall be deemed to amend or supplement the CHDM Disclosure Schedule or the
I-trax Disclosure Schedule, as applicable, or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant. Notwithstanding
the foregoing, but subject to Sections 6(a)(iii) and 6(b)(iii), each Party will
update its respective Disclosure Schedule prior to the Closing so that such
Party's Disclosure Schedule is correct and complete as of the Closing Date.
(i) Exclusivity. None of CHDM, I-trax or Acquisition will (and will
cause or permit any of its Subsidiaries not to): (i) solicit, initiate, or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of all or substantially all of the capital stock or assets of
CHDM, I-trax or any of their Subsidiaries (including any acquisition structured
as a merger, consolidation, or share exchange); or (ii) participate in any
discussions or negotiations regarding, furnish any information with respect to,
assist or participate in, or facilitate in any other manner any effort or
attempt by any Person to do or seek to do any of the foregoing; provided,
however, that any of CHDM, I-trax, Acquisition or their Subsidiaries, and their
directors and officers will remain free to participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek to do any of the foregoing to the extent their fiduciary
duties require them to do so. Notwithstanding the limitations set forth in this
Section 5(i), I-trax may engage in any of the actions and activities
contemplated by this Section 5(i) if such actions and activities will not impair
the ability or commitment of I-trax to consummate the transactions contemplated
herein and if I-trax promptly informs CHDM of such actions and activities and
allows CHDM to participate therein to the extent reasonably requested. Each of
CHDM, I-trax and Acquisition shall notify all the others immediately if any
Person makes any proposal or offer contact with respect to any of the foregoing.
(j) Listing of Shares. I-trax shall take reasonable commercial efforts
to have the I-trax Common Shares (including Escrow Shares) and the I-trax Common
Shares issuable upon conversion of the I-trax Preferred Shares issuable pursuant
to the Merger, to be approved for listing on any stock market or exchange on
which I-trax Common Shares are then listed.
(k) Financial Statements Re-characterization. CHDM will use its
reasonable efforts, and will cause its Subsidiaries and independent auditors to
use their respective reasonable efforts, to re-state its Financial Statements to
re-characterize gross net revenue and net revenue line items to exclude from
such items revenue associated with CHDM and its Subsidiaries pharmaceutical
sales and to deliver them to I-trax prior to Closing.
35
6. Conditions to Obligation to Close.
(a) Conditions to Obligation of I-trax, Acquisition and Acquisition
LLC. The obligation of I-trax, Acquisition and Acquisition LLC to consummate the
transactions to be performed by each of them respectively in connection with the
Closing is subject to satisfaction of the following conditions:
(i) this Agreement and the First Merger shall have received the
Requisite Stockholder Approval;
(ii) CHDM shall have procured all of the third party consents
specified in Section 5(b) above;
(iii) the representations and warranties set forth in Sections 4
above shall be true and correct in all respects at and as of the
Closing Date and the aggregate negative financial impact of all matters
or events added to the CHDM Disclosure Schedule since the date of
execution of this Agreement must not exceed $250,000;
(iv) CHDM shall have performed and complied with all of its
covenants hereunder in all respects through the Closing;
(v) no action, suit, or proceeding shall be pending or threatened
against CHDM or any of its Subsidiaries before any court or
quasi-judicial or administrative agency of any Federal, state, local,
or foreign jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this
Agreement, (B) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, (C) affect adversely
the right of I-trax to own the capital stock of the First Merger
Surviving Corporation and all of the equity interest of the Second
Merger Surviving Company and to control the First Merger Surviving
Corporation and the Second Merger Surviving Company, or (D) affect
adversely the right of each of CHDM and its Subsidiaries to own its
assets and to operate its businesses (and no such injunction, judgment,
order, decree, ruling, or charge shall be in effect);
(vi) CHDM shall have delivered to I-trax a certificate to the
effect that each of the conditions specified above in Section
6(a)(i)-(v) have been satisfied in all respects, together with a
exhibit identifying all amendments to the CHDM Disclosure Schedule;
(vii) CHDM shall have delivered to I-trax a certificate of CHDM's
Secretary attaching, and certifying that each such attachment is true,
correct, complete and in effect on the Closing Date: (A) CHDM's
Certificate of Incorporation, (B) CHDM's Bylaws, (C) resolutions of the
Board of Directors of CHDM with respect to all transactions
contemplated by this Agreement; and (D) resolutions or minutes of
meeting of CHDM Stockholders approving this Agreement and the First
Merger, and (E) a good standing certificate issued by the Secretary of
State of the State of Delaware date not more than five days prior to
the Closing Date;
(viii) CHDM shall have delivered to I-trax a certificate stating
that each officer of CHDM executing this Agreement and all related
agreements and certificates is an incumbent officer of CHDM;
(ix) CHDM, I-trax and Acquisition shall have received all other
authorizations, consents, and approvals of governments and governmental
agencies referred to in Sections 5(b) and 5(c) above;
(x) I-trax shall have received from counsel to CHDM an opinion in
form and substance as set forth in Exhibit I attached hereto, addressed
to I-trax and dated as of the Closing Date;
36
(xi) I-trax shall have received the resignations, effective as of
the Closing, of each director of CHDM, and of each officer of CHDM
other than those whom I-trax shall have specified, after consultation
with CHDM, in writing at least five business days prior to the Closing;
(xii) I-trax shall have closed the sale of I-trax Preferred
Shares the gross proceeds of which are not less than $15,000,000
pursuant to the agreements referred to in Section 5(e) above;
(xiii) I-trax shall have filed the I-trax Preferred Designations
with the Secretary of State of the State of Delaware;
(xiv) Acquisition LLC and each employee of CHDM deemed key in the
reasonable discretion of I-trax and CHDM Representative shall have
entered into employment agreements on mutually acceptable terms;
(xv) I-trax, the CHDM Representative and the Escrow Agent shall
have entered into the Escrow Agreement in form and substance
substantially as attached hereto as Exhibit E hereto;
(xvi) CHDM shall have delivered a certificate of CHDM's Chief
Financial Officer stating the cash balance of CHDM and its Subsidiaries
as of the Closing Date computed in accordance with Section 2(b) above;
(xvii) I-trax shall have determined, in the exercise of its
reasonable judgment, that issuance of I-trax Common Shares and I-trax
Preferred Shares will qualify for exemption from registration under
Section 4(2) of the Securities Act and the regulations promulgated
thereunder;
(xviii) I-trax and CHDM shall have closed on a senior loan
facility pursuant to which not less than $16,000,000 is available to be
borrowed by I-trax and CHDM on the Closing Date;
(xix) The waiting period applicable to the consummation of the
Merger under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or been
terminated;
(xx) CHDM and its Subsidiaries shall have caused any of its
employee that have borrowed money from CHDM or its Subsidiaries to
repay such loans; and
(xxi) All actions to be taken by CHDM in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to I-trax.
I-trax may waive any condition specified in this Section 6(a) if it executes a
writing so stating at or prior to the Closing.
(b) Conditions to Obligation of CHDM. The obligation of CHDM to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) this Agreement and the First Merger shall have received the
Requisite Stockholder Approval;
(ii) I-trax shall have procured all of the third party consents
specified in Section 5(b) above;
37
(iii) the representations and warranties set forth in Section 3
above shall be true and correct in all respects at and as of the
Closing Date and the aggregate negative financial impact of all matters
or events added to the I-trax Disclosure Schedule since the date of
execution of this Agreement must not exceed $250,000;
(iv) I-trax shall have performed and complied with all of its
covenants hereunder in all respects through the Closing;
(v) no action, suit, or proceeding shall be pending or threatened
against I-trax or any of its Subsidiaries before any court or
quasi-judicial or administrative agency of any Federal, state, local,
or foreign jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this
Agreement, (B) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, (C) affect adversely
the right of CHDM Stockholders to own the I-trax Common Shares I-trax
Preferred Shares issued in the First Merger (excluding, however,
fluctuations of price of I-trax Common Shares not below $2.25), or (D)
affect adversely the right of I-trax to own the combined assets and
operations of I-trax and CHDM after the Merger;
(vi) I-trax and Acquisition shall have delivered to CHDM a
certificate to the effect that each of the conditions specified above
in Sections 6(b)(i)-(v) is satisfied in all respects; together with an
exhibit identifying all amendments to the I-trax Disclosure Schedule;
(vii) I-trax and Acquisition shall have delivered to CHDM a
certificate of I-trax's Secretary and Acquisition's Secretary
attaching, and certifying that each such attachment is true, correct,
complete and in effect on the Closing Date, I-trax's and Acquisition's:
(A) certificate of incorporation, (B) Bylaws, (C) resolutions of the
Board of Directors with respect to all transactions contemplated by
this Agreement; and (D) resolutions or minutes of meeting of
stockholders approving this Agreement and the Merger, and (E) a good
standing certificate issued by the Secretary of State of the State of
Delaware date not more than five days prior to the Closing Date;
(viii) I-trax shall have delivered to CHDM a certificate stating
that each officer of I-trax executing this Agreement and all related
agreements and certificates is an incumbent officer of I-trax;
(ix) CHDM, I-trax and Acquisition shall have received all other
authorizations, consents, and approvals of governments and governmental
agencies referred to in Sections 5(b) and 5(c) above;
(x) CHDM shall have received from counsel to I-trax an opinion in
form and substance as set forth in Exhibit J attached hereto, addressed
to CHDM and dated as of the Closing Date and any tax opinion to be
rendered pursuant to Section 5(c)(ii);
(xi) CHDM shall have received a written opinion of Irell &
Xxxxxxx LLP, in form and substance reasonably satisfactory to CHDM, to
the effect that the transactions contemplated herein will constitute a
reorganization within the meaning of Section 368(a) of the Code; the
Parties agree to make such reasonable written representations as
requested by Irell & Xxxxxxx LLP for the purpose of rendering such
opinion;
(xii) Xxxxxxx X. Xxxxxxxx, Xx. shall have been elected to the
Board of Directors of I-trax;
(xiii) I-trax shall have closed the sale of I-trax Preferred
Shares the gross proceeds of which are not less than $15,000,000
pursuant to agreements referred to in Section 5(e) above;
38
(xiv) I-trax shall have filed the I-trax Preferred Designations
with the Secretary of State of the State of Delaware;
(xv) I-trax and CHDM shall have closed on a senior loan facility
pursuant to which not less than $16,000,000, is available to be
borrowed by I-trax and CHDM on the Closing Date;
(xvi) I-trax, the CHDM Representative and the Escrow Agent shall
have entered into the Escrow Agreement in form and substance
substantially as attached hereto as Exhibit E hereto;
(xvii) the waiting period applicable to the consummation of the
Merger under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or been
terminated;
(xviii) I-trax Common Shares shall not have been delisted or
otherwise removed from the stock market or exchange on which I-trax
Common Shares are traded as of the date of this Agreement, I-trax shall
not have received any notice of the delisting or removal of the I-trax
Common Shares from the stock market or exchange on which I-trax Common
Shares are traded as of the date of this Agreement and there shall be
no Basis for the delisting or removal of the I-trax Common Shares from
the stock market or exchange on which I-trax Common Shares are traded
as of the date of this Agreement; and
(xix) all actions to be taken by I-trax in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to CHDM.
Each of CHDM or the CHDM Representative may waive any condition specified in
this Section 6(b) if it or he executes a writing so stating at or prior to the
Closing.
7. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing.
(a) I-trax Common Shares. Each I-trax Common Share issued in the First
Merger will be imprinted with a legend substantially in the following form:
The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended. Said shares cannot be
sold, transferred, disposed of, pledged or hypothecated in any manner
whatsoever in the absence of an effective registration statement for
the shares under said Act, or in the opinion reasonably satisfactory to
the Company in form and of counsel, an exemption from the registration
requirements is in fact applicable to said shares.
(b) Insurance and Indemnification.
(i) I-trax will provide each individual who served as a director
or officer of CHDM at any time prior to the Effective Time with
liability insurance for a period of 48 months after the Effective Time
no less favorable in coverage and amount than any applicable insurance
in effect immediately prior to the Effective Time.
(ii) I-trax will observe any indemnification provisions now
existing in the certificate of incorporation or bylaws of CHDM for the
benefit of any individual who served as a director or officer of CHDM
at any time prior to the Effective Time.
(iii) I-trax will provide each CHDM Stockholder who joins the
I-trax board of directors or becomes an officer of I-trax or its
Subsidiaries with reasonable coverage under I-trax's directors and
officers liability insurance policy beginning with the time period when
such CHDM Stockholder is an officer or director of I-trax and for the
39
applicable statute of limitations period after such CHDM Stockholder
ceases to be an officer and director of I-trax.
(iv) I-trax will observe the indemnification provisions set forth
in Section 7(b) of the Employment Agreement dated as of March 3, 1997
and in Section 2 of the letter agreement dated September 20, 1999, in
each case between Xxxxxxx X. Xxxxxxx and Corporate Health Dimensions,
Inc., a Subsidiary of CHDM, for a period of four years after the
Effective Time.
(c) Registration Statement on Form S-3. Subject to compliance with SEC
regulations under the Securities Act, including the requirement that current
financial information is available as a condition to effectiveness of certain
registration statements filed under the Securities Act, I-trax shall file with
the SEC a registration statement on Form S-3 in the form of Exhibit G attached
hereto as amended in such respects as I-trax determines in necessary to comply
with its obligations under the securities laws covering I-trax Common Shares
issuable in the First Merger and the I-trax Common Shares issueable upon
conversion of I-trax Preferred Shares in the First Merger. I-trax shall use its
commercially reasonable efforts to cause such Form S-3 to become effective
promptly. I-trax shall promptly convey to CHDM and its counsel all
correspondence with the SEC related to the Form S-3. I-trax shall keep such
registration statement effective for a period of two years from its initial
effective date. I-trax will cause its executive officers to enter into lock-up
agreements prohibiting the sale of their I-trax stock until such time as the
Form S-3 has been effective for 90 days. CHDM Representative will cause its
executive officers to enter into lock-up agreements prohibiting the sale of
their I-trax stock until such time as the Form S-3 has been effective for 90
days. All fees, disbursements and out-of-pocket expenses and costs incurred by
I-trax in connection with the preparation and filing of the Form S-3 and in
complying with applicable Federal and state securities laws (including, without
limitation, all attorneys' fees of I-trax) shall be borne by I-trax. The former
CHDM Stockholders shall bear the cost of underwriting and/or brokerage
discounts, fees and commissions, if any, applicable to the shares being
registered and the fees and expenses of their counsel. I-trax shall use its
reasonable best efforts to qualify any of the registered I-trax Common Stock for
sale in such states as any former CHDM Stockholder reasonably designates.
However, I-trax shall not be required to qualify in any state which will require
an escrow or other restriction relating to I-trax and/or the sellers, or which
will require I-trax to qualify to do business in such state or require I-trax to
file therein any general consent to service of process. I-trax at its expense
will supply the former CHDM Stockholders with copies of the Form S-3 and any
prospectus included therein and other related documents in such quantities as
may be reasonably requested by the former CHDM Stockholders. I-trax will
indemnify and hold harmless the former CHDM Stockholders and their affiliates
against any liability or expense under the Securities Act of 1933 or otherwise,
insofar as such liability or expense is caused by any untrue statement or
alleged untrue statement of any material fact contained in the Form S-3, any
prospectus contained therein or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading;
provided, however, that I-trax will not be liable to the extent that any such
liability or expense arises out of an untrue statement or alleged untrue
statement or omission or alleged omission made in conformity with information
furnished by such former CHDM Stockholder in writing specifically for use in the
preparation of the Form S-3.
(d) General Cooperation. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
Party reasonably may request, all at the sole cost and expense of the requesting
Party (unless the requesting Party is entitled to indemnification therefor under
Section 8 below).
(e) Tax-Free Reorganization Treatment. Each of I-trax, Acquisition,
Acquisition LLC shall use its or their best efforts to cause the Merger to
constitute a "reorganization" within the meaning of Section 368(a) of the Code
for federal income tax purposes (a "Tax-Free Reorganization"). None of the
aforementioned Parties has taken or will take, either before or after
consummation of the Merger, any action that, to the Knowledge of such Party,
would cause the Merger to fail to constitute a Tax-Free Reorganization. Unless
otherwise required by law, each Party shall (i) report the Merger on all Tax
returns and filings as a Tax-Free Reorganization, and (ii) not take any position
or action that is inconsistent with the characteristics of the Merger as a
Tax-Free Reorganization in any audit, administrative proceeding, litigation or
otherwise.
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8. Remedies for Breaches of this Agreement.
(a) Survival of Representations and Warranties. All of the
representations and warranties contained in this Agreement will survive the
Closing hereunder (even if the beneficiary of such representation and warranties
knew or had reason to know of any misrepresentation or breach of representation
or warranty at the time of Closing) and continue in full force and effect until
August 14, 2004, at which time they shall expire and be of no further force or
effect except for covenants which by their specific terms extend for a longer
period of time in which case such specific longer period of time shall be
applicable and control. Any claim based on any of representation or warranty
will be time barred unless submitted in writing prior to August 14, 2004 to the
Party charged with such claim, regardless of the applicable legal theory
underlying such claim and regardless of any different statute of limitation that
might otherwise apply under applicable law.
(b) Indemnification Provisions for Benefit of I-trax.
(i) In the event CHDM breaches (or in the event any third party
alleges facts that, if true, would mean CHDM has breached) any of its
representations, warranties, or covenants contained herein or in any
other document or instrument delivered in connection with the
transactions contemplated hereby, and, if there is an applicable
survival period pursuant to Section 8(a) above, provided that I-trax
makes a written claim for indemnification against the Escrow Shares in
accordance with the terms of the Escrow Agreement within such survival
period, then I-trax shall recover a portion of the Escrow Shares, equal
to the lesser of (a) 3,200,000 I-trax Common Shares, (b) I-trax Common
Shares with a value, measured at the time of final resolution of such
claim, of $8,000,000, or (c) Shares with a value, measured at the time
of final resolution of such claim, equal to the entirety of any Adverse
Consequences I-trax suffers through and after the date of the claim for
indemnification (including any Adverse Consequences I-trax suffers
after the end of any applicable survival period from the events that
are the subject of an indemnification claim made prior to the end of
the survival period) resulting from, arising out of, relating to or
caused by the breach (or the alleged breach).
(ii) For purposes of determining the number of Escrow Shares that
shall be released to I-trax in satisfaction of any Adverse Consequences
claimed under this Section 8(b), each Escrow Share shall be valued at
the average of the closing price of I-trax Common Shares for ten (10)
consecutive trading days ending the day prior to the final resolution
of the claim in question. All Adverse Consequences paid pursuant to
this Section 8(b) out of the Escrow Shares shall be treated as an
adjustment to the Merger Consideration and such Adverse Consequences
shall be charged on a pro rata basis to the CHDM Stockholders whose
I-trax Shares are held in escrow. In the event the Escrow Shares are
not sufficient to cover the full amount of the Adverse Consequences
claimed pursuant to this Section 8(b), I-trax shall have no claim or
right against CHDM Stockholders regardless of whether all or any of the
Escrow Shares are actually earned by the CHDM Stockholders pursuant to
terms set forth in this Agreement. Notwithstanding any other provision
in this Agreement, recourse to such of the Escrow Shares is the sole
post-Closing remedy of I-trax for breach of any representations and
warranties of CHDM. After the Escrow Shares have been distributed,
I-trax shall have no claim or right against CHDM Stockholders.
(c) Matters Involving Third Parties.
(i) If any third party shall notify I-trax with respect to any
matter (a "Third Party Claim") which may give rise to a claim for
indemnification against the Escrow Shares under this Section 8, then
I-trax shall promptly notify the CHDM Representative in writing and
promptly make available to the CHDM Representative all relevant
information which is material to the claim and which is in the
possession of I-trax; provided, however, that no delay on the part of
I-trax in notifying the CHDM Representative shall limited the ability
of I-trax to claim for indemnification against the Escrow Shares unless
(and then solely to the extent) such delay is actually prejudicial to
the defense of such Third Party Claim.
(ii) The CHDM Representative will have the right to defend I-trax
against the Third Party Claim with counsel of his choice reasonably
satisfactory to I-trax (with legal expenses to be paid out of escrow by
41
the Escrow Agent) as long as (A) the CHDM Representative notifies
I-trax in writing within 15 days after I-trax has given notice of the
Third Party Claim that the CHDM Representative will indemnify I-trax
from and against the entirety of any Adverse Consequences I-trax may
suffer resulting from, arising out of, relating to, in the nature of,
or caused by the Third Party Claim, (B) the Third Party Claim involves
only money damages and does not seek an injunction or other equitable
relief, and (D) the CHDM Representative conducts the defense of the
Third Party Claim in a commercially reasonable, active and diligent
manner.
(iii) As long as the CHDM Representative is conducting the
defense of the Third Party Claim in accordance with Section 8(c)(ii)
above, (A) I-trax may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (B)
CHMD Representative will not consent to the entry of any judgment or
enter into any settlement with respect to the Third Party Claim without
the prior written consent of I-trax (not to be withheld unreasonably),
and (C) the CHDM Representative will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnified Parties (not
to be withheld unreasonably).
(iv) In the event any of the conditions in Section 8(c)(ii) above
is breached materially and such breach is not cured within ten (10)
days of notice thereof, or becomes unsatisfied, however, (A) I-trax may
defend against, and consent to the entry of any judgment or enter into
any settlement with respect to, the Third Party Claim in any manner
they reasonably may deem appropriate (and I-trax need not consult with,
or obtain any consent from, the CHDM Representative in connection
therewith), and (B) I-trax will collect the costs of defending against
the Third Party Claim (including reasonable attorneys' fees and
expenses) out of the Escrow Shares.
(d) Limitations on Liability. In no event will the aggregate Liability
for breach of any CHDM representations and warranties contained in this
Agreement exceed the Escrow Shares. In no event will any CHDM Stockholder be
personally liable on account of a breach of any representation or warranty of
CHDM hereunder.
(e) Determination of Adverse Consequences. All indemnification payments
under this Section 8 shall be deemed adjustments to Merger Consideration.
(f) Basket.
(i) Notwithstanding anything in Section 8(b) above to the
contrary, no Escrow Shares will be applied to indemnify I-trax from and
against any Adverse Consequences resulting from, arising out of,
relating to, in the nature of, or caused by any breach (or any alleged
breach) of any representation or warranty until I-trax has suffered
Adverse Consequences by reason of all such breaches (or alleged
breaches) in excess of $500,000 and then only to the extent that I-trax
has suffered Adverse Consequences by reason of all such breaches (or
alleged breaches) in excess of $500,000.
(ii) For purposes of Sections 8(b) and this Section 8(f), any and
all references to a "Material Adverse Effect" or "material" limitations
in the representations and warranties of CHDM which determine whether a
breach has occurred shall not be considered deductibles or a separate
basket, i.e., Adverse Consequences shall be calculated from the first
dollar of loss.
9. Termination.
(a) Termination of Agreement. Any of the Parties may terminate this
Agreement with the prior authorization of its board of directors (whether before
or after stockholder approval) as provided below:
(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Effective Time;
42
(ii) I-trax may terminate this Agreement by giving notice to CHDM
prior to the Effective Time (A) in the event CHDM has breached any
representation, warranty, or covenant contained in this Agreement in
any respect, I-trax or Acquisition has notified CHDM of the breach, and
the breach has continued without cure for a period of 30 days after the
notice of breach or (B) if the Closing shall not have occurred on or
before April 30, 2004 by reason of the failure of any condition
precedent under Section 6(a) hereof (unless the failure results
primarily from I-trax's or Acquisition's breaching any representation,
warranty, or covenant contained in this Agreement); provided, however,
if the sole condition precedent which has failed is the condition under
Section 6(a)(xvii) above, I-trax may, by notice to CHDM, elect to
extend the termination date set forth in Sections 9(a)(ii) and
9(a)(iii) to July 31, 2004 if I-trax promptly files a registration
statement on Form S-4 to register the I-trax Shares issuable in the
Merger.
(iii) CHDM may terminate this Agreement by giving notice to
I-trax and Acquisition at any time prior to the Effective Time (A) in
the event I-trax or Acquisition has breached any representation,
warranty, or covenant contained in this Agreement in any respect, CHDM
has notified I-trax and Acquisition of the breach, and the breach has
continued without cure for a period of 30 days after the notice of
breach or (B) if the Closing shall not have occurred on or before April
30, 2004 by reason of the failure of any condition precedent under
Section 6(b) hereof (unless the failure results primarily from CHDM's
breaching any representation, warranty, or covenant contained in this
Agreement);
(iv) I-trax and Acquisition may terminate this Agreement by
giving notice to the other Parties at any time prior to the Effective
Time in the event the fairness opinion referred to in Section 5(d) is
withdrawn;
(v) CHDM may terminate this Agreement by giving notice to I-trax
at any time prior to the Effective Time in the event the closing price
of I-trax Common Shares of the American Stock Exchange for ten (10)
consecutive trading days is less than $2.25.
(vi) any Party may terminate this Agreement by giving written
notice to the other Parties at any time after the Special CHDM Meeting
or the Special I-trax Meeting in the event this Agreement and the
Merger fail to receive the Requisite Stockholder Approval.
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 9(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach); provided, however, that
the confidentiality provisions contained in Section 5(g) above shall survive any
such termination.
10. Miscellaneous.
(a) Press Releases and Public Announcements. None of the Parties shall
issue any press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior written approval
of the other Party; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable efforts to advise the other
Parties prior to making the disclosure).
(b) No Third-Party Beneficiaries. This Agreement does not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns; provided, however, that (i) the provisions of
this Agreement concerning delivery of the Merger Consideration, the obligation
of I-trax to keep the Form S-3 effective for two years, the continuing
obligation of I-trax to report the Merger on all Tax returns and filings as a
Tax-Free Reorganization, and the representations and warranties of I-trax and
Acquisition set forth in Section 3 above are for the benefit of the CHDM
Stockholders (in each case to be enforced on their behalf by the CHDM
Representative), and (ii) the provisions in Section 5(i) above concerning
insurance and indemnification are intended for the benefit of the individuals
specified therein and their respective legal representatives.
43
(c) Entire Agreement. This Agreement and the Confidentiality Agreement
dated as of June 16, 2003 between I-trax and CHDM constitute the entire
agreement among the Parties and supersedes any prior understandings, agreements,
or representations by or among the Parties, written or oral, to the extent they
related in any way to the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of his
or its rights, interests, or obligations hereunder without the prior written
approval of the other Parties.
(e) 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.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to CHDM: CHD Meridian Healthcare
00 Xxxxxx Xxxxx Xxxx.
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Xx., CEO
Copies to: X. Xxxxx Sweat
Managing Director
Xxxxxxx Xxxxx & Associates
0000 Xxxx Xxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
and to:
Xxxxxxx X. Xxxxxxx, Esq.
0000 Xxxxxxx Xxxx
Xxxxx Xxxxxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
If to I-trax or Acquisition I-trax, Inc.
One Xxxxx Square, Suite 2615
000 X. 00xx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Fax No. (000) 000-0000
Attention: Xxxxx X. Xxxxxx, CEO
and Xxxx Xxxxxxxxx, Esq.
Copy to: Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Fax No. (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
44
If to the Process Agent: Corporate Trust Center
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Delaware, State of Tennessee or Commonwealth of Pennsylvania or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware, as may be required by this Section 10(h).
(i) Amendments and Waivers. The Parties may mutually amend any
provision of this Agreement at any time prior to the Effective Time with the
prior authorization of their respective boards of directors; provided, however,
that any amendment effected subsequent to stockholder approval will be subject
to the restrictions contained in the Delaware General Corporation Law. No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by CHDM and I-trax. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby. Further, CHDM will cause its
attorneys, accountants and investment professionals, including without
limitation, Xxxxxxx Xxxxx and Associates to invoice CHDM at or prior to Closing
for all of their fees and expenses incurred in connection with this Agreement
and the transactions contemplated hereby, to the extent not yet paid (such
amounts, in the aggregate, "Accrued CHDM Professional Expenditures").
(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any Federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
(m) Incorporation of Exhibits, Annexes, and Schedules. The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
45
(n) Specific Performance. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter (subject to the provisions set forth in Section 10(o)
below), in addition to any other remedy to which they may be entitled, at law or
in equity.
(o) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or Federal court sitting in the State of Pennsylvania,
in any action or proceeding arising out of or relating to this Agreement and
agrees that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other Party with respect thereto. Each
Party appoints CT Corporation (the "Process Agent") as his, her or its agent to
receive on his, her or its behalf service of copies of the summons and complaint
and any other process that might be served in the action or proceeding. Any
Party may make service on any other Party by sending or delivering a copy of the
process (i) to the Party to be served at the address and in the manner provided
for the giving of notices in Section 10(g) above or (ii) to the Party to be
served in care of the Process Agent at the address and in the manner provided
for the giving of notices in Section 10(g) above. Nothing in this Section 10(o),
however, shall affect the right of any Party to bring any action or proceeding
arising out of or relating to this Agreement in any other court or to serve
legal process in any other manner permitted by law or at equity. Each Party
agrees that a final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.
46
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
I-TRAX, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Xxxxx X. Xxxxxx
Chief Executive Officer
DCG ACQUISITION, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx
Chief Executive Officer
MERIDIAN OCCUPATIONAL HEALTHCARE ASSOCIATES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
-----------------------------------------
Xxxxxxx X. Xxxxxxxx, Xx.
Chief Executive Officer
CHD MERIDIAN HEALTHCARE, LLC
By: I-trax, Inc., its sole member
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxxx
Chief Executive Officer
47
