MEMBER INTEREST PURCHASE AGREEMENT BY AND AMONG I-TRAX, INC., PRO FITNESS HEALTH SOLUTIONS, LLC, AND MINUTE MEN, INCORPORATED NOVEMBER 27, 2007
BY
AND AMONG
I-TRAX,
INC.,
PRO
FITNESS HEALTH SOLUTIONS, LLC,
AND
MINUTE
MEN, INCORPORATED
NOVEMBER
27, 2007
TABLE
OF CONTENTS
1.
|
Definitions.
|
1
|
2.
|
Purchase
and Sale of Membership Interests.
|
7
|
(a)
|
Basic
Transaction.
|
7
|
(b)
|
Purchase
Price.
|
7
|
(c)
|
The
Closing.
|
7
|
(d)
|
Deliveries
at the Closing.
|
7
|
(e)
|
Escrow.
|
8
|
(f)
|
[INTENTIONALLY
OMITTED].
|
8
|
(g)
|
[INTENTIONALLY
OMITTED].
|
8
|
(h)
|
Earn-Out.
|
8
|
(i)
|
Make-Whole
Payment.
|
12
|
3.
|
Representations
and Warranties of I-trax.
|
12
|
(a)
|
Organization.
|
12
|
(b)
|
Authorization
of Transaction.
|
13
|
(c)
|
Capitalization.
|
13
|
(d)
|
Filings
with the SEC.
|
13
|
(e)
|
Financial
Statements.
|
13
|
(f)
|
Events
Subsequent to September 30, 2007.
|
14
|
(g)
|
Noncontravention.
|
14
|
(h)
|
Brokers’
Fees.
|
14
|
(i)
|
Investment.
|
14
|
(j)
|
Disclosure.
|
14
|
4.
|
Representations
and Warranties of the Member.
|
14
|
(a)
|
Organization
of the Member.
|
15
|
(b)
|
Authorization
of Transaction.
|
15
|
(c)
|
Noncontravention.
|
15
|
(d)
|
Brokers’
Fees.
|
15
|
(e)
|
Investment.
|
15
|
(f)
|
ProFitness
Interests.
|
16
|
(g)
|
Liabilities/Assets.
|
16
|
(h)
|
Stockholders
of the Member.
|
16
|
5.
|
Representations
and Warranties Concerning ProFitness.
|
16
|
(a)
|
Organization,
Qualification, and Corporate Power.
|
16
|
(b)
|
Authorization
of Transaction.
|
17
|
(c)
|
Capitalization.
|
17
|
(d)
|
Noncontravention.
|
17
|
(e)
|
Brokers’
Fees.
|
18
|
(f)
|
Title
to Assets.
|
18
|
(g)
|
Subsidiaries.
|
18
|
(h)
|
Financial
Statements.
|
18
|
(i)
|
Subsequent
Events.
|
18
|
(j)
|
Undisclosed
Liabilities.
|
19
|
(k)
|
Legal
Compliance.
|
19
|
(l)
|
Tax
Matters.
|
19
|
i
(m)
|
Real
Property.
|
20
|
(n)
|
Intellectual
Property.
|
20
|
(o)
|
Tangible
Assets.
|
21
|
(p)
|
Contracts.
|
21
|
(q)
|
Notes
and Accounts Receivable.
|
22
|
(r)
|
Insurance.
|
22
|
(s)
|
Litigation.
|
23
|
(t)
|
Employees.
|
23
|
(u)
|
Employee
Benefits.
|
23
|
(v)
|
Guaranties.
|
24
|
(w)
|
Environmental,
Health, and Safety Matters.
|
24
|
(x)
|
Certain
Business Relationships with ProFitness.
|
24
|
(y)
|
Disclosure.
|
24
|
6.
|
Pre-Closing
Covenants.
|
24
|
(a)
|
General.
|
24
|
(b)
|
Notices
and Consents.
|
25
|
(c)
|
Operation
of Business.
|
25
|
(d)
|
Preservation
of Business.
|
26
|
(e)
|
Full
Access.
|
26
|
(f)
|
Notice
of Developments.
|
26
|
(g)
|
Exclusivity.
|
26
|
(h)
|
Delivery
of Audited Financial Statements.
|
26
|
(i)
|
Prohibition
on Trading in I-trax Securities.
|
27
|
7.
|
Conditions
to Obligation to Close.
|
27
|
(a)
|
Conditions
to Obligation of I-trax.
|
27
|
(b)
|
Conditions
to Obligation of the Member.
|
29
|
8.
|
Post-Closing
Covenants.
|
30
|
(a)
|
General.
|
30
|
(b)
|
Litigation
Support.
|
30
|
(c)
|
Transition.
|
30
|
(d)
|
Confidentiality.
|
31
|
(e)
|
Covenant
Not to Compete.
|
31
|
(f)
|
Listing
of Shares; Current Information.
|
33
|
(g)
|
Securities
Law Filings.
|
33
|
(h)
|
ProFitness
Senior Management.
|
33
|
(i)
|
Potential
Post-Closing Adjustment with respect to Cash at Closing.
|
33
|
9.
|
Indemnification.
|
33
|
(a)
|
Survival
of Representations and Warranties.
|
33
|
(b)
|
Indemnification
Provisions for Benefit of I-trax.
|
34
|
(c)
|
Indemnification
Provisions for Benefit of the Member.
|
35
|
(d)
|
Matters
Involving Third Parties.
|
35
|
(e)
|
Determination
of Adverse Consequences.
|
36
|
(f)
|
Set-Off.
|
36
|
(g)
|
Exclusive
Remedy.
|
37
|
(h)
|
Baskets.
|
37
|
(i)
|
Limitations
on Indemnification.
|
38
|
ii
(j)
|
Procedural
Matters.
|
38
|
10.
|
Tax
Matters.
|
39
|
(a)
|
Employment
Tax Returns.
|
39
|
(b)
|
Other
Tax Returns.
|
40
|
(c)
|
Cooperation
on Tax Matters.
|
40
|
(d)
|
Tax
Sharing Agreements.
|
40
|
(e)
|
Certain
Taxes.
|
40
|
(f)
|
Tax
Purchase Price Allocation.
|
41
|
11.
|
Termination.
|
41
|
(a)
|
Termination
of Agreement.
|
41
|
(b)
|
Effect
of Termination.
|
42
|
12.
|
Miscellaneous.
|
42
|
(a)
|
Press
Releases and Public Announcements.
|
42
|
(b)
|
No
Third-Party Beneficiaries.
|
42
|
(c)
|
Entire
Agreement.
|
42
|
(d)
|
Succession
and Assignment.
|
42
|
(e)
|
Counterparts.
|
43
|
(f)
|
Headings.
|
43
|
(g)
|
Notices.
|
43
|
(h)
|
Governing
Law.
|
44
|
(i)
|
Amendments
and Waivers.
|
44
|
(j)
|
Severability.
|
44
|
(k)
|
Expenses.
|
44
|
(l)
|
Construction.
|
44
|
(m)
|
Incorporation
of Exhibits, Annexes, and Schedules.
|
45
|
(n)
|
Specific
Performance.
|
45
|
iii
Exhibit
A
|
--
|
Form
of Promissory Note
|
Exhibit
B
|
--
|
Form
of Assignment of Membership
Interest
|
Exhibit
C
|
--
|
Form
of Escrow Agreement
|
Exhibit
D
|
--
|
Form
of Opinion of Counsel to ProFitness
|
Exhibit
E
|
--
|
Form
of Opinion of Counsel to I-trax
|
Exhibit
F
|
--
|
Forms
of Offer Letters and Severance and Non-competition
Agreements
|
Schedule
1
|
--
|
ProFitness
2008 Organic Gross Profit
|
Schedule
7(a)
|
--
|
Senior
Management Team
|
Schedule
8(h)
|
--
|
List
of Employees receiving offer letters and severance
agreements
|
ProFitness
Disclosure Schedule
iv
Agreement
(this “Agreement”) entered into as of November 27, 2007, by and
among I-trax, Inc., a Delaware corporation (“I-trax”), and Pro Fitness
Health Solutions, LLC, a New York limited liability company
(“ProFitness”), Minute Men, Incorporated, a Connecticut corporation
(“Member”) and sole member of ProFitness and, solely for purposes of
Sections 8(d) and 8(e) of this Agreement, Xxxxx Xxxxxxx, an individual residing
at 000 Xxxxxx Xxxx, Xxx Xxxxxx, XX 00000. Each
of I-trax, ProFitness and Member are referred to herein individually as a
“Party” and collectively as the “Parties.”
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.
“Additional
Purchase Price Payment” has the meaning set forth in Section
2(h)(ii).
“Additional
Purchase Price Payment Election” has the meaning set forth in Section
2(h)(iii).
“Adverse
Consequences” means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
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 realized by the Party claiming indemnification
resulting from, arising out of, relating to or caused by the applicable
breach.
“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.
“Allocation”
has the meaning set forth in Section 2(j).
“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 reasonably be expected to form the basis
for
any specified consequence.
“Blue
Sky Laws” means the laws of any state, the District of Columbia, or any
territory or other jurisdiction in the United States governing the offer and/or
sale of securities in such jurisdiction.
“Cash”
means, at a specific date, cash and cash equivalents (including marketable
securities and short term investments) at such date calculated in accordance
with GAAP applied on a basis consistent with the preparation of the Financial
Statements.
“Cash
Consideration” has the meaning set forth in Section 2(b).
“Closing”
has the meaning set forth in Section 2(c).
“Closing
Date” has the meaning set forth in Section 2(c).
“Code”
means the Internal Revenue Code of 1986, as amended.
“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, affiliated service group or other group
that is treated as a single employer pursuant to Sections 414(b), (c), (m)
or
(o) of the Code.
“Current
Liabilities” means, at a specific date, the current liabilities of
ProFitness at such date, determined in accordance with GAAP applied on a basis
consistent with the preparation of the Financial Statements.
“Delaware
General Corporation Law” means the General Corporation Law of the State of
Delaware, as amended.
“Earn-Out
Objection Notice” has the meaning set forth in Section 2(h)(v).
“Earn-Out
Period” means the twelve month period ending on December 31,
2008.
“Employee
Benefit Plan” means each “employee benefit plan” (as such term is defined in
ERISA §3(3)) and all other compensation, severance, bonus, equity compensation,
retirement or supplemental retirement, insurance, profit sharing, deferred
compensation, change of control, vacation, incentive or fringe benefit plan,
agreement or arrangement, whether written or unwritten, providing benefits
for
employees or former employees of ProFitness (including such arrangements
contained within the provisions of an individual employment or consulting
agreement).
“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, discharge, release, threatened
release, control, or cleanup of any
2
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” has the meaning set forth in Section 2(e).
“Escrow
Agreement” has the meaning set forth in Section 2(e).
“Escrow
Shares” has the meaning set forth in Section 2(e).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Expenses
Schedule” has the meaning set forth in Section 5(i).
“Financial
Statements” has the meaning set forth in Section 5(h).
“GAAP”
means generally accepted accounting principles as in effect from time to time
in
the United States of America.
“Income
Tax” means any Tax imposed on net income.
“Indebtedness”
means all outstanding bank and other loans, notes, lines of credit, debt
instruments, and other indebtedness of ProFitness, and all debt of any third
party for which the assets of ProFitness serve as collateral or for which
ProFitness is a party or guarantor, including all accrued interest on all of
the
foregoing, but excluding trade payables, capital leases, and other Current
Liabilities and long term liabilities (other than the above).
“Indemnification
Amount” has the meaning set forth in Section 9(j)(i).
“Indemnified
Party” has the meaning set forth in Section 9(d)(i).
“Indemnifying
Party” has the meaning set forth in Section 9(d)(i).
“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, 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
3
(including
data and related documentation), (vii) all other proprietary rights, and (viii)
all copies and tangible embodiments thereof (in whatever form or
medium).
“I-trax”
has the meaning set forth in the preface above.
“I-trax
Material Adverse Effect” means an adverse effect on: (i) 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
$500,000; or (ii) the ability of I-trax to perform its obligations under this
Agreement and each other agreement contemplated by this Agreement.
“I-trax
Notice of Claim” has the meaning set forth in Section 9(b)(i).
“I-trax
Share” means a share of common stock, $.001 par value per share, of
I-trax.
“I-trax
Share Closing Price” with respect to a date means, (i) if the principal
trading market for the I-trax Shares is the New York Stock Exchange, American
Stock Exchange, the NASDAQ Global Market, the NASDAQ Global Select Market,
or
the NASDAQ Capital Market or other national securities exchange, the last
reported sale price thereof on such date (or if there were no trades on such
date, on the last trading day on which there were trades), or (ii) if
I-trax Shares are not principally traded on such an exchange or market, the
mean
between the last reported “bid” and “asked” prices of I-trax Shares on the such
date, as reported by the OTC Bulletin Board.
“I-trax
Stockholder” means any Person who or which beneficially owns any I-trax
Share.
“Knowledge”
means, as to ProFitness, the actual knowledge without independent investigation
of Xxxxx Xxxxxxx, Xxx Xxxxx, Xxxxx Xxxxx and Xxxxx Karaikos.
“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.
“Make
Whole Payment” has the meaning set forth in Section (2)(i).
“Member”
has the meaning set forth in the preface above.
“Member’s
Review Period” has the meaning set forth in Section 2(h)(v).
“Member
Notice of Claim” has the has the meaning set forth in Section
9(c)(i).
“Most
Recent Balance Sheet” means the balance sheet contained within the Financial
Statements at September 30, 2007.
“Most
Recent Fiscal Month End” means September 30, 2007.
“Multiemployer
Plan” has the meaning set forth in ERISA Section 3(37).
“Neutral
Accounting Firm” has the meaning set forth in Section 2(h)(iv).
4
“Neutral
Party” has the meaning set forth in Section 9(j)(ii).
“Notice
of Claim” means an I-trax Notice of Claim or a Member Notice of
Claim.
“Note
Payment Date” means, subject to the terms of the Promissory Note, a form of
which is attached hereto as Exhibit A, the date which is ten (10)
business days after the date on which the audit of the consolidated financial
statements of I-trax for the fiscal year ending December 31, 2008 is completed,
but in no event later than the first to occur of (i) the date which is ten
(10)
business days after the filing of I-trax’s Annual Report on Form 10-K for the
fiscal year ending December 31, 2008 or (ii) April 5, 2009.
“Note
Payment Date Share Closing Price” has the meaning set forth in Section
2(i).
“Objection
Notice” has the meaning set forth in Section 9(j)(ii).
“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.
“Organic
Gross Profit Target” has the meaning set forth in Section
2(h)(ii).
“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.
“Post-Closing
Statement” meaning set forth in Section 2(h)(i).
“Prime
Rate” means at the time of determination the prime rate reported in the Wall
Street Journal immediately prior to the date of calculation.
“ProFitness”
has the meaning set forth in the preface above.
“ProFitness
2008 Organic Gross Profit” means the gross profit of ProFitness for the
Earn-Out Period (as normally determined in accordance with GAAP consistently
applied with ProFitness’s practices prior to the Closing), which the Parties
agree will be the gross revenues derived from the existing customers of
ProFitness and existing pipeline of ProFitness in place as of the
Closing Date (represented by signed contracts and bids in progress as identified
in Schedule 1 attached hereto which shall be updated as of the Closing Date
to
include any contracts and bids added between signing and closing), less the
direct costs associated with the servicing of such existing customers and
existing pipeline (which costs shall include all contract related direct payroll
expenses and contract related direct site-related expenses) but excluding all
selling, general and administrative expenses.
“ProFitness
Interest” means any membership interest in ProFitness.
5
“ProFitness
Material Adverse Effect” means an adverse effect on: (i) the business,
operations, results of operations, properties (including intangible properties),
conditions (financial or otherwise), assets or liabilities (including contingent
liabilities) of ProFitness, which would have an economic impact of more than
$50,000; or (ii) the ability of ProFitness to perform its obligations under
this
Agreement and each other agreement contemplated by this Agreement.
“Prohibited
Transaction” has the meaning set forth in ERISA Section 406 and Code Section
4975.
“Promissory
Note” has the meaning set forth in Section 2(b).
“Public
Reports” has the meaning set forth in Section 3(d).
“Purchase
Price” has the meaning set forth in Section 2(b).
“Related
Documents” has the meaning set forth in Section 4(b).
“SEC”
means the Securities and Exchange Commission.
“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) mechanic’s, materialmen’s, and similar liens,
(ii) liens for Taxes not yet due and payable or for Taxes that the taxpayer
is
contesting in good faith through appropriate proceedings, and (iii) other liens
arising in the Ordinary Course of Business and not incurred in connection with
the borrowing of money.
“Share
Consideration” has the meaning set forth in Section 2(b).
“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
Purchase Price” means the sum of the Purchase Price and the Liabilities of
ProFitness immediately after the Closing.
“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.
6
“Third
Party Claim” has the meaning set forth in Section 9(d)(i).
“Transaction
Expenses” means all of the expenses of ProFitness incurred or
accrued in connection with the transactions contemplated by this Agreement
and
the Related Documents, including, but not limited to, legal, accounting and
financial advisory fees. For purposes of clarification, “Transaction
Expenses” do not include: (i) expenses incurred by ProFitness but paid by the
Member, provided ProFitness has no obligation to reimburse the Member therefor;
and (ii) all expenses, if any, of I-trax incurred in connection with the
transactions contemplated by this Agreement and the Related Documents which
I-trax charges or allocates to ProFitness. For the further purposes of
clarification, “Transaction Expenses” include expenses incurred by Member or
Xxxxx Xxxxxxx paid for by ProFitness, or for which ProFitness is charged, or
for
which ProFitness has an obligation to reimburse.
“Working
Capital” means the current assets less Current Liabilities of ProFitness,
determined in accordance with GAAP on a basis consistent with the preparation
of
the Financial Statements.
2. Purchase
and Sale of Membership Interests.
(a) Basic
Transaction. On
and subject to the terms and conditions of this Agreement, I-trax agrees to
purchase from the Member, and the Member agrees to sell to I-trax, all of
Member’s ProFitness Interests for the consideration specified below in this
Section 2.
(b) Purchase
Price. Subject
to adjustment pursuant to Sections 2(g), 2(h), 2(i) and
9(e), the purchase price (the “Purchase Price”) for all of the Member’s
ProFitness Interests will be $7,500,000 plus the earn-out amount pursuant to
Section 2(i), if any. The $7,500,000 will be paid to the Member
as follows: (i) $6,000,000 in cash (the “Cash
Consideration”); (ii) a promissory note in the principal amount of
$750,000 due and payable on the Note Payment Date substantially in the form
of
the Promissory Note attached hereto as Exhibit A (the “Promissory
Note”); and (iii) the number of I-trax Shares determined by dividing
$750,000 by the average I-trax Share Closing Price over the five consecutive
trading days immediately preceding the Closing Date, rounded to the nearest
whole share (“Share Consideration”), which Share Consideration shall be
held in escrow pursuant to Section 2(e).
(c) The
Closing. The
closing of the transactions contemplated by this Agreement (the
“Closing”) will take place by mail or in person at the offices of Xxxxxxx
Xxxxx Xxxxxxx & Ingersoll, LLP, 0000 Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, 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) Deliveries
by the Member. The Member will deliver to I-trax the
following:
7
(A) an
Assignment of Membership Interests in the form attached hereto as Exhibit
B representing all of its ProFitness Interests;
(B) the
Escrow Agreement, duly executed by the Member; and
(C) A
general
release of ProFitness by the Member and all stockholders of the
Member;
(D) the
various certificates, instruments, and documents referred to in Section 7(a);
and
(ii) Deliveries
by I-trax. I-trax will deliver to the Member the
following:
(A) the
Cash
Consideration payable by wire transfer (in accordance with the written
instructions of the Member previously given to I-trax prior to the Closing)
or
delivery of other immediately available funds (without interest);
(B) the
Promissory Note;
(C) the
Escrow Agreement, duly executed by I-trax; and
(D) the
various certificates, instruments, and documents referred to in Section 7(b)
below.
(e) Escrow. At
Closing, the Parties will establish an escrow with the Escrow Agent to hold
the
Share Consideration (the “Escrow Shares”) which shall be delivered on the
Closing Date by I-trax to an escrow agent mutually acceptable to all Parties
(the “Escrow Agent”). The Escrow Agent will distribute the
Escrow Shares in accordance with the terms of the escrow agreement (the
“Escrow Agreement”) substantially in the form of Exhibit C
attached hereto to be entered into at the Closing by I-trax, the Member, and
the
Escrow Agent.
(f) [INTENTIONALLY
OMITTED].
(g) [INTENTIONALLY
OMITTED].
(h) Earn-Out.
(i) On
or
before February 15, 2009, I-trax will prepare or cause to be prepared a
statement setting forth the ProFitness 2008 Organic Gross Profit (the
“Post-Closing Statement”) and deliver such statement to the
Member.
(ii) If
the
ProFitness 2008 Organic Gross Profit exceeds $2,450,000 (the “Organic Gross
Profit Target”), then I-trax will pay to the Member an amount (the
“Additional Purchase Price Payment”) equal to the product of: (i) two
(2); multiplied by (ii) the amount by which the ProFitness 2008 Organic Gross
Profit exceeds the Organic Gross Profit Target.
8
(iii) The
Additional Purchase Price Payment, if any, will be paid by I-trax on or before
the Note Payment Date in (y) Cash (by wire transfer in accordance with the
written instructions of the Member previously given to I-trax pursuant to
Section 2(d)(ii)(A) or delivery of other immediately available funds) or (z)
at
the Member’s election (the “Additional Purchase Price Payment Election”),
in I-trax Shares. The Additional Purchase Price Payment Election must
be in writing and delivered by the Member to I-trax no later than close of
business on the date of the Additional Purchase Price Payment. If the
Member elects to receive the Additional Purchase Price Payment in I-trax Shares,
the number of I-trax Shares will be determined by dividing the Additional
Purchase Price Payment by the average Closing Price of I-trax Shares over the
five consecutive trading days immediately preceding the Note Payment
Date.
(iv) If
the
ProFitness 2008 Organic Gross Profit is less than the Organic Gross Profit
Target, then the Member will pay to I-trax an amount (the “Deficit
Payment”) equal to the product of: (i) 3.164; multiplied by (ii) the amount
by which the Organic Gross Profit Target exceeds the ProFitness 2008 Organic
Gross Profit, but not to exceed the aggregate of the combined dollar value
of
the items specified in clauses (i) through (iv), inclusive, of Section 9(f)
below. The Deficit Payment, if any, will be paid by the Member to
I-trax on or before the Note Payment Date either (y) by the release of
Escrow Shares and/or by the set-off against payments that may be owed by I-trax
to the Member with respect to the other items specified in clauses (i) through
(iv), inclusive, of Section 9(f) below, on the Note Payment Date or (z) at
the Member’s written election (which must be received by I-trax prior to the
expiration of Member’s Review Period (as defined below)) in cash (by wire
transfer in accordance with written instructions given by I-trax to the Member
in advance of the Note Payment Date delivery of other immediately available
funds). If the Member does not elect to make the Deficit Payment in
cash, I-trax’s sole recourse for recovery of the Deficit Payment will be the
release of Escrow Shares and/or the offset of such Deficit Payment against
payments owed by I-trax to the Member under the Promissory Note and Make-Whole
Payment, in whatever order selected by I-trax.
(v) If
the
Member in good faith disagrees with the Post-Closing Statement, the Member
may
deliver to I-trax, within twenty (20) business days after receipt of the
Post-Closing Statement (the “Member’s Review Period”), a written
statement (the “Earn-out Objection Notice”) setting forth in reasonable
detail its objections. The Member will be deemed to have agreed with
all amounts contained in the Post-Closing Statement to which no specific
objection has been made. If the Member does not deliver an Earn-out
Objection Notice prior to the expiration of Member’s Review Period, the Member
will be deemed to agree in all respects with I-trax’s calculation of the
ProFitness 2008 Organic Gross Profit and the ProFitness 2008 Organic Gross
Profit set forth in the Post-Closing Statement will be final and binding upon
the Member and I-trax. I-trax will, upon written request, make
available to the Member and its agents all such documents and information in
I-trax’s possession or control necessary to facilitate the Member’s review of
the Post-Closing Statement in a timely manner.
(vi) If
an
Earn-out Objection Notice is properly and timely delivered, the Member and
I-trax will negotiate in good faith with each other to attempt to resolve
9
the
disputed amounts set forth in the Earn-out Objection Notice. If the
Parties are unable to resolve the disputed amounts set forth in the Earn-out
Objection Notice within ten (10) business days after the Member’s delivery of
the Earn-out Objection Notice to I-trax, the Parties shall cause an accounting
firm mutually acceptable to them (the “Neutral Accounting Firm”) promptly
to review this Agreement and the disputed amounts in the Post-Closing Statement
for the purpose of calculating the ProFitness 2008 Organic Gross
Profit. If I-trax and the Member are unable to agree on the choice of
a Neutral Accounting Firm, they will select a nationally recognized accounting
firm by lot (after excluding their respective regular outside accounting
firms). In making any such calculations, the Neutral Accounting Firm
will consider only those amounts in the Post-Closing Statement as to which
the
Member has, in the Earn-out Objection Notice, disagreed.
(vii) The
Neutral Accounting Firm will deliver to the Member and I-trax, as promptly
as
practicable, a written report setting forth its calculation of the disputed
amounts and percentages. Upon such delivery, such report and the
calculations set forth therein shall be final and binding upon the Member and
I-trax. In the event Itrax and the Member submit any unresolved
objections to the Post-Closing Statement to the Neutral Accounting Firm for
resolution as provided herein, I-trax and the Member will share responsibility
for the fees and expenses of the Neutral Accounting Firm as
follows:
(A) If
the
Neutral Accounting Firm resolves all of the disputes in favor of I-trax, the
Member will be responsible for all of the fees and expenses of the Neutral
Accounting Firm;
(B) If
the
Neutral Accounting Firm resolves all of the disputes in favor of the Member,
I-trax will be responsible for all of the fees and expenses of the Neutral
Accounting Firm; and
(C) If
the
Neutral Accounting Firm resolves some of the disputes in favor of Itrax and
the rest of the disputes in favor of the Member, I-trax will be responsible
for
a proportionate amount of the fees and expenses of the Neutral Accounting Firm
based on the dollar amount of the disputes resolved against I-trax compared
to
the total dollar amount of all disputes submitted to the Neutral Accounting
Firm
and the Member shall be responsible for a proportionate amount of the fees
and
expenses of the Neutral Accounting Firm based on the dollar amount of the
disputes resolved against the Member compared to the total dollar amount of
all
disputes submitted to the Neutral Accounting Firm.
(viii) If
an
Earn-Out Objection Notice is properly and timely delivered by the Member with
respect to any Post-Closing Statement, pending resolution of the disputed
amounts, I-trax will not be required to make any Additional Purchase Price
Payment and the Member will not be required to make any Deficit Payment,
provided, however, that, if, based upon the written report of the
Neutral Accounting Firm, I-trax is required to make an Additional Purchase
Price
Payment or the Member is required to make a Deficit Payment, such payment shall
be made, in accordance with this Section
10
2(h),
within three (3) business days after the Neutral Accounting Firm’s delivery of
its written report pursuant to Section 2(h)(vii).
(ix) If
any
Party hereto is obligated to make a cash payment under this Section 2(h)
and fails to make such payment within the time established by
Section 2(h)(viii), then such Party shall pay interest at the Prime Rate on
the amount of such payment for the period from the date such payment was due
through (but excluding) the actual day of such payment.
(x) Member
acknowledges and agrees that, after the Closing, I-trax will have the authority
to manage and operate the businesses of ProFitness in accordance with
commercially reasonable standards and the general practices and policies of
I-trax based on the historical practices of ProFitness and in the best interests
of I-trax and its stockholders, including, without limitation, the authority
to
(i) establish pricing and discounts with customers, (ii) manage the work and
sales force of ProFitness, including the hiring and termination of employees,
and the establishment of new or modification of existing compensation and
benefit arrangements, (iii) elect new officers of ProFitness, (iv) modify the
corporate structure of ProFitness, and (v) accept, reject, modify, or otherwise
determine the appropriate terms and conditions of agreements with third
parties. Notwithstanding the foregoing, from the Closing until
December 31, 2008, I-trax shall, and shall cause its Affiliates to:
(A) use
commercially reasonable efforts to keep available to ProFitness a level of
service capacity that, in the aggregate, is reasonably comparable to the
ProFitness’s current employee service capacity;
(B) use
commercially reasonable efforts to maintain ProFitness’s properties in good
repair, working order and condition, subject to normal wear and tear (provided
that nothing herein shall preclude the sale, transfer or other disposition
of
any such property);
(C) use
commercially reasonable efforts to maintain good commercial relationships with
all ProFitness customer accounts which will be relevant to the determination
of
ProFitness 2008 Organic Gross Profit and to fulfill its commercial obligations
with respect to each customer contract in a commercially reasonable manner
consistent with good commercial practices;
(D) not
take
any action or omit to take any action, and not make any change in methodology
or
approach which deviates from the methodology or approach used by ProFitness
in
calculating gross profit with respect to customer accounts prior to the Closing,
which is intended, designed to, or would have the effect of impairing or
diminishing the value of, or Member’s expectations with respect to, the final
determination of ProFitness 2008 Organic Gross Profit (such as by way of
illustration, and not for purposes of exclusion, the front-loading of costs
or
discounts in multi-year contracts to the Earn-Out Period); and
11
(E) report
quarterly to Member on ProFitness 2008 Organic Gross Profit and within thirty
(30) days after the end of each calendar quarter, provide Member a report
setting forth a reasonably detailed estimate of organic gross profit (calculated
in a manner consistent with the definition of ProFitness 2008 Organic Gross
Profit) for such quarter.
(xi) Any
payment required to be made pursuant to Section 2(h) shall be treated as an
adjustment to the Purchase Price.
(xii) Member
also acknowledges and agrees that, after the Closing, I-trax will have the
authority to transfer, merge or consolidate the assets, business or ProFitness
Interests, into I-trax or an Affiliate thereof; and in that event, I-trax agrees
to continue to determine the ProFitness 2008 Organic Gross Profit as set forth
in Sections 2(h)(x)(A)-(D) above, based on the separate results of operations
of
the ProFitness business unit which, prior to such transfer, merger or
consolidation, constituted the business of ProFitness. For purposes
of clarification, however, I-trax acknowledges and agrees that customer accounts
serviced by I-trax or an Affiliate thereof other than ProFitness, but which
were
in the pipleline set forth on Schedule 1 hereto, as same shall be amended as
of
the Closing, shall be included for purposes of determining the ProFitness 2008
Organic Gross Profit.
(i) Make-Whole
Payment. If
the average I-trax Share Closing Price over the five consecutive trading days
immediately preceding the Note Payment Date (the “Note Payment Date Share
Closing Price”) is less than the average I-trax Share Closing Price over the
five consecutive trading days immediately preceding the Closing Date (the
“Transaction Share Closing Price”), then I-trax will pay to the Member or
its designees in writing an amount (the “Make Whole Payment”) equal to
the product of (i) the number of I-trax Shares ultimately delivered to the
Member by the Escrow Agent, if any; and (ii) the amount by which the Note
Payment Date Share Closing Price is less than the Transaction Share Closing
Price. The Make Whole Payment, if any, will be paid by I-trax on the
Note Payment Date in cash (by wire transfer in accordance with the written
instructions of the Member previously given to I-trax pursuant to
Section 2(d)(ii)(A) or delivery of other immediately available
funds). Any payment required to be made pursuant to this
Section 2(i) shall be treated as an adjustment to the Purchase
Price.
3. Representations
and Warranties of I-trax. I-trax
represents and warrants to the Member that the statements contained in this
Section 3 are correct and complete as of the date of this
Agreement.
(a) Organization. I-trax
is a corporation 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. I-trax is duly authorized to conduct business and is in
good standing under the laws of each jurisdiction where such qualification
is
required. I-trax 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.
12
(b) Authorization
of Transaction. I-trax
has full power and authority (including full corporate power and authority)
to
execute and deliver this Agreement and all other agreements, documents,
certificates and instruments required to be executed and delivered pursuant
hereto (collectively, the “Related Documents”) and to perform its
obligations hereunder and thereunder. This Agreement and each Related
Document constitutes the valid and legally binding obligation of I-trax,
enforceable in accordance with its terms. Other than filings required
by the Delaware General Corporation Law and filings pursuant to the Blue Sky
Laws and the rules of the American Stock Exchange, none of which, if not made,
will cause an I-trax Material Adverse Effect, I-trax need not 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 and the Related Documents.
(c) Capitalization. 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, as of November 20, 2007, 41,315,366 shares are issued and
outstanding, and of which 2,000,000 shares are designated as preferred stock,
par value $0.001 per share, of which, as of November 20, 2007, 219,126 shares
are issued and outstanding. All of the outstanding shares of capital
stock are duly authorized, validly issued, fully paid and nonassessable and
are
not subject to any preemptive rights. All I-trax Shares issuable
pursuant to Section 2 will be, when so issued, duly authorized, validly issued,
fully paid and nonassessable and not subject to any preemptive
rights.
(d) Filings
with the SEC. I-trax
has made all filings with the SEC that it has been required to make since
January 1, 2005 under the Securities Act and the Exchange Act (collectively
the
“Public Reports”). 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. 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 Member may view
such Public Reports.
(e) Financial
Statements. The
consolidated financial statements of I-trax and its Subsidiaries 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-Q of the SEC and subject to normal year-end
adjustments which will not be material in the aggregate), 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 in the aggregate)
and
the financial condition of I-trax and its Subsidiaries at the end of such
periods, and are consistent with the books and records of I-trax and its
Subsidiaries.
13
(f) Events
Subsequent to September 30, 2007. Except
as disclosed in the Public Reports, since September 30, 2007 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; or (iii) other
transactions material to I-trax and its Subsidiaries taken as a
whole. Since September 30, 2007, I-trax has conducted its, and
has caused its Subsidiaries to conduct their, business and affairs only in
the
Ordinary Course of Business.
(g) Noncontravention. Neither
the execution and the delivery of this Agreement or the Related Documents,
nor
the consummation of the transactions contemplated hereby and thereby, 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
rules of the American Stock Exchange, and the state securities laws, none of
I-trax or any of its Subsidiaries need 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. None
of I-trax and its Subsidiaries has 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 which is or which could become the obligation
of
Member.
(i) Investment. I-trax
is not acquiring the ProFitness Interests with a view to or for sale in
connection with any distribution thereof within the meaning of the Securities
Act.
(j) 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.
4. Representations
and Warranties of the Member. The
Member represents and warrants to I-trax, with respect to itself only, that
the
statements contained in this Section 4 are correct and complete as of the date
of this Agreement. All of the representations and warranties in this
Section 4 (and those contained in Section 5) are subject to the exceptions
set
forth in the ProFitness Disclosure Schedule attached hereto and made a part
hereof (the “ProFitness Disclosure Schedule”).
14
(a) Organization
of the Member. The
Member is a corporation, duly organized, validly existing, and in good standing
under the laws of Connecticut.
(b) Authorization
of Transaction. The
Member has full power and authority to execute and deliver this Agreement and
the Related Documents and to perform its obligations hereunder and
thereunder. This Agreement and each Related Document to which the
Member is a Party constitutes the valid and legally binding obligation of the
Member, enforceable in accordance with its terms. The Member need not
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 and the Related
Documents.
(c) Noncontravention. Neither
the execution and the delivery of this Agreement or the Related Documents,
nor
the consummation of the transactions contemplated hereby or thereby, nor
compliance by the Member with any of the provisions hereof or thereof 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 the Member is subject or any provision
of
the Related Documents, its charter 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 the Member is a party or by which it is bound or to which
any of its assets is subject, except for such violations, breaches, defaults,
or
rights of termination, cancellation, acceleration, creation, imposition,
suspension, revocation or modification as to which requisite waivers or consents
have been or will be obtained prior to Closing and copies of which have been
or
will prior to Closing be delivered to I-trax.
(d) Brokers’
Fees. The
Member has no Liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by this
Agreement for which I-trax or ProFitness could become liable or
obligated.
(e) Investment. The
Member (i) understands that the I-trax Shares constituting the Share
Consideration have not been, and will not be, registered under the Securities
Act or under any Blue Sky Laws, and are being offered and sold in reliance
on
Federal and state exemptions for transactions not involving any public offering;
(ii) represents that any I-trax Shares acquired pursuant to this Agreement
are being acquired solely for its own account for investment purposes, and
not
with a view to the distribution thereof; (iii) is a sophisticated investor
with knowledge and experience in business and financial matters; (iv) has
received certain information concerning I-trax and has had the opportunity
to
obtain additional information as desired in order to evaluate the merits and
the
risks inherent in owning and holding I-trax Shares; (v) is able to bear the
economic risk and lack of liquidity inherent in holding any I-trax Shares
acquired pursuant to this Agreement; (vi) is an “Accredited Investor”
within the definition set forth in Rule 501(a) under the Securities Act;
(vii) was not formed for the purpose of the transactions contemplated by
this Agreement; (viii) has been advised by I-trax to review, and has been given
the opportunity to read the Public Reports; and (ix) understands that any
I-trax shares issued to the Member pursuant to this Agreement will be imprinted
with a legend in substantially the following form:
15
“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.”
(f) ProFitness
Interests. The
Member holds of record and owns beneficially 100% of the ProFitness
Interests. The Member holds, or will hold at Closing, such ProFitness
Interests, free and clear of any restrictions on transfer (other than any
restrictions under the Securities Act and state securities laws), Security
Interests, options, warrants, purchase rights, contracts, commitments, equities,
claims and demands. The ProFitness Interests are not represented by
certificates. The ProFitness Interests owned by the Member constitute
all of the issued and outstanding ProFitness Interests. The Member is
not a party to any option, warrant, purchase right or other contract or
commitment that could require the Member to sell, transfer or otherwise dispose
of any ProFitness Interest (other than this Agreement). The Member is
not a party to any voting trust, proxy or other agreement or understanding
with
respect to the voting of any ProFitness Interest.
(g) Liabilities/Assets. Except
as set forth on Section 4(g) of the ProFitness Disclosure Schedule, there are
no
Security Interests that have been granted or have been asserted or attached
to
any tangible or intangible property or assets, including, without limitation,
Intellectual Property, necessary or desirable for the operation of the business
of ProFitness. Except as set forth on Section 4(g) of the ProFitness
Disclosure Schedule or the Financial Statements: (i) there have been
no payments of cash or consideration made by the Member on behalf of ProFitness;
(ii) there are no related party transactions between the Member and ProFitness
(excluding for this purpose, ordinary dividend or other distributions from
ProFitness to the Member); and (iii) ProFitness is not a party to or bound
by
any contract with Member or any of Member’s Affiliates.
(h) Stockholders
of the Member. Schedule
4(h) sets forth a complete list of all stockholders of the Member.
5. Representations
and Warranties Concerning ProFitness. The
Member and ProFitness, jointly and severally, represent and warrant to I-trax
that the statements contained in this Section 5 are correct and complete as
of
the date of this Agreement. All of the representations and warranties
in this Section 5 (and those contained in Section 4) are subject to the
exceptions set forth in the Pro Fitness Disclosure Schedule.
(a) Organization,
Qualification, and Corporate Power. ProFitness
is a limited liability company, duly organized, validly existing, and in good
standing under the laws of the State of New York. ProFitness is duly
authorized to conduct business and is, or by the Closing will be, in good
standing under the laws of each jurisdiction where such qualification is
required. ProFitness has full limited liability company power and
authority and all licenses, permits, and authorizations necessary to carry
on
the businesses in which it is engaged and in
16
which
it
currently proposes to engage and to own and use the properties owned and used
by
it. Section 5(a) of the Disclosure Schedule
lists the managers and officers of
ProFitness. The Member has delivered to I-trax correct and complete
copies, as applicable, of the organizational documents of ProFitness (as amended
to date). ProFitness does not have any membership interest books or
records of meetings of members or managers, board of managers, or any committees
of the board of managers. ProFitness is not in default under or in
violation of any provision of its organizational documents.
(b) Authorization
of Transaction. ProFitness
has full power and authority to execute and deliver this Agreement and the
Related Documents and to perform its obligations hereunder and
thereunder. This Agreement and each Related Document to which
ProFitness is a party constitutes the valid and legally binding obligation
of
ProFitness, enforceable in accordance with its terms. ProFitness need
not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency to consummate
the
transactions contemplated by this Agreement or the Related
Documents.
(c) Capitalization. All
of the issued and outstanding ProFitness Interests have been duly authorized,
are validly issued, fully paid, and nonassessable, and are held of record by
the
Member. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require ProFitness to issue, sell,
or
otherwise cause to become outstanding any ProFitness
Interests. Except as set forth on Section 5(c) of the ProFitness
Disclosure Schedule, there are no outstanding or authorized equity appreciation,
phantom stock, profit participation, or similar rights with respect to
ProFitness. There are no outstanding equity securities of ProFitness
other than the ProFitness Interests. There are no voting trusts,
proxies, or other agreements or understandings with respect to the voting of
the
ProFitness Interests. None of the outstanding equity securities or
other securities of the ProFitness were issued in violation of the Securities
Act or any other applicable Federal, state or local laws, regulations,
judgments, decrees, court orders or administrative orders.
(d) Noncontravention. Neither
the execution and the delivery of this Agreement or the Related Documents,
nor
the consummation of the transactions contemplated hereby or thereby, 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 ProFitness is subject or any provision
of, as applicable, the organizational documents of ProFitness 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 ProFitness 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 upon 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 ProFitness Material Adverse
Effect. ProFitness does not need 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 or the Related Documents.
17
(e) Brokers’
Fees. ProFitness
does not 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. Except
for properties and assets disposed of in the Ordinary Course of Business since
the date of the Most Recent Balance Sheet, ProFitness has good title to, or
a
valid leasehold interest in, the properties and assets used by it, located
on
their premises, or shown on the Most Recent Balance Sheet or acquired after
the
date thereof, free and clear of all Security Interests, except where failure
to
have such title or valid leasehold interest, individually or in the aggregate,
would not have a ProFitness Material Adverse Effect.
(g) Subsidiaries. ProFitness
does not have any Subsidiaries.
(h) Financial
Statements.
(i) Attached
to Section 5(h) of the ProFitness Disclosure Schedule are the unaudited
financial statements (collectively the “Financial Statements”) of
ProFitness for the fiscal year ended December 31, 2006 and the nine months
ended September 30, 2007. The Financial Statements have been
prepared in conformity with GAAP applied on a consistent basis, and present
fairly the financial position and results of operations of ProFitness at the
dates and for the periods covered by such Financial Statements. All
liabilities and obligations of ProFitness outstanding as of the dates of the
Financial Statements required to be reflected as liabilities in accordance
with
GAAP have been included in the Financial Statements. Since September
30, 2007, ProFitness has conducted its operations in the Ordinary Course of
Business.
(ii) ProFitness
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (a) transactions are executed with management’s
authorizations, (b) transactions are recorded as necessary to permit preparation
of financial statements in accordance with GAAP and to maintain accountability
for assets, (c) access to assets is permitted only in accordance with
management’s authorization, and (d) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action
is
taken with respect to any differences.
(iii) ProFitness
has not engaged in any transaction, maintained any bank account, or used any
corporate funds except for the transactions, bank accounts or funds which have
been and are reflected in its books and records.
(i) Subsequent
Events. There
have been no material changes in the financial condition, assets, liabilities
or
results of operations of ProFitness since September 30, 2007, except changes
in
the Ordinary Course of Business or in contemplation of the transactions
contemplated by this Agreement, none of which, either singly or in the
aggregate, have caused or are reasonably likely to cause a ProFitness Material
Adverse Effect. Section 5(i) of the ProFitness
Disclosure Schedule sets forth a preliminary estimate as
of September 30, 2007, of certain expenses ProFitness expects to incur and
the
Parties have agreed should be accrued prior to the Closing Date (“Expenses
Schedule”).
18
(j) Undisclosed
Liabilities. ProFitness
has no Liability (and, to its Knowledge, there is no Basis for any present
or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against ProFitness that could reasonably be expected to give
rise to such Liability), except for (i) Liabilities set forth on the face
of the Most Recent Balance Sheet, (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 which do not individually or in the aggregate constitute
a
ProFitness Material Adverse Effect, (iii) Liabilities under contracts entered
into 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) which are not
required under GAAP to be reflected or reserved against in the Financial
Statements, (iv) Liabilities which, individually or in the aggregate, do
not constitute a ProFitness Material Adverse Effect, and (v) Liabilities
described on Section 5(j) of the ProFitness Disclosure Schedule.
(k) Legal
Compliance. Except
as set forth on Section 5(k) of the ProFitness
Disclosure Schedule, ProFitness has complied, in all
respects, 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 ProFitness 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) ProFitness
has been treated as an entity disregarded from its owner for the purpose of
any
Income Tax applicable to business entities since the date of its formation
and
has never made an election to be taxed as a corporation for such
purpose. ProFitness 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 due and payable by ProFitness have been
paid. ProFitness currently is not the beneficiary of any extension of
time within which to file any Tax Return. No claim has ever been made
by an Authority in a jurisdiction where ProFitness 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 ProFitness that arose in
connection with any failure (or alleged failure) to pay any Tax.
(ii) ProFitness
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, equity owner, or other third party.
(iii) No
Member, manager, director or officer (or employee responsible for Tax matters)
of ProFitness 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 reasonably
be expected to give rise to any claim, audit, action, suit, proceeding, or
investigation which
19
respect
to any Tax for which ProFitness could be liable. No Tax Returns of
ProFitness have been audited, or currently are the subject of
audit. ProFitness has delivered or made available to I-trax correct
and complete copies of all of its Income Tax Returns, examination reports,
and
statements of deficiencies assessed against or agreed to by ProFitness since
its
date of formation.
(iv) ProFitness
has not 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) ProFitness
has not 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. ProFitness has not 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). ProFitness is not
a party to any Tax allocation or sharing agreement. ProFitness (A)
has not been a member of an Affiliated Group filing a consolidated Federal
Income Tax Return (other than a group the common parent of which was ProFitness)
nor (B) has any Liability for the Taxes of any Person (other than ProFitness)
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 ProFitness (A) did not, as of the Most Recent Fiscal Month
End,
exceed the reserve for Tax Liability of ProFitness (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 ProFitness in filing their Tax Returns.
(m) Real
Property.
(i) ProFitness
owns no real property.
(ii) Section
5(m)(ii) of the ProFitness Disclosure Schedule lists and describes briefly
all
real property leased or subleased to ProFitness. To the Knowledge of
ProFitness, with respect to each lease and sublease listed in
Section 5(m)(ii) of the ProFitness Disclosure Schedule: (A) such lease
or sublease is legal, valid, binding, enforceable, and in full force and effect;
(B) no party to such lease or sublease is in breach or default in any
material respect, and no event has occurred which, with notice or lapse of
time,
or both, would constitute a breach or default in any material respect or permit
termination, modification, or acceleration thereunder; and (C) there are no
disputes, oral agreements, or forbearance programs in effect as to such lease
or
sublease.
(n) Intellectual
Property. Section
5(n) of the ProFitness Disclosure Schedule lists all registrations and
applications for patents, trademarks and copyrights by ProFitness and all
Universal Resource Locators utilized in the conduct of the business of
ProFitness as now conducted. ProFitness has all right, title and
interest in, or a valid and binding
20
license
to use, the Intellectual Property used in the business of ProFitness as now
conducted. ProFitness is not in default (nor would it be in such
default but for the giving of notice or lapse of time or both) under any
license, material to its business, to use such Intellectual Property and, to
the
Knowledge of ProFitness, there is no threatened dispute or disagreement with
respect to any such license except for such defaults, disputes and disagreements
which, individually or in the aggregate, would not have a ProFitness Material
Adverse Effect. To the Knowledge of ProFitness, 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 ProFitness, ProFitness is not 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 ProFitness alleging any such infringement, except
for such infringements which, individually or in the aggregate, would not have
a
ProFitness Material Adverse Effect. To the Knowledge of ProFitness,
there are no claims against ProFitness asserting the invalidity, misuse or
unenforceability of any Intellectual Property, except for such claims which
individually or in the aggregate, would not have a ProFitness Material Adverse
Effect. To the Knowledge of ProFitness, none of the present or former
executive officers or employees of ProFitness has any claims whatsoever (whether
direct, indirect or contingent) of right, title or interest in or to any of
the
Intellectual Property of ProFitness. To the Knowledge of
ProFitness, none of the present executive officers or employees of ProFitness
is
precluded by an agreement from engaging in the business of ProFitness as now
conducted. Member and ProFitness make no claim to the exclusive right
to use “ProFitness” or “Pro Fitness.”
(o) Tangible
Assets. ProFitness
owns or leases all buildings, machinery, equipment, and other tangible assets
utilized by it for the conduct of its business as currently conducted except
where failure to own or lease such assets, individually or in the aggregate,
would have a ProFitness Material Adverse Effect.
(p) Contracts. Except
as executed in connection with the transactions contemplated herein,
Section 5(p) of the ProFitness Disclosure Schedule lists the following
contracts and other agreements to which ProFitness 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) all
customer contracts;
(iii) any
agreement concerning a partnership or joint venture;
(iv) 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 imposed a Security
Interest on any of its assets, tangible or intangible;
(v) any
agreement concerning confidentiality or noncompetition;
(vi) any
agreement with the Member or any of its Affiliates;
21
(vii) 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;
(viii) any
collective bargaining agreement;
(ix) 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;
(x) 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;
(xi) any
other
agreement (or group of related agreements) the performance of which involves
consideration in excess of $50,000.
The
Member has delivered or made available to I-trax a correct and complete copy
of
each written agreement listed in Section 5(p) of the ProFitness Disclosure
Schedule. With respect to each such
agreement: (A) such agreement is legal, valid, binding,
enforceable, and in full force and effect; (B) such agreement will continue
to
be legal, valid, binding, enforceable, and in full force and effect in
accordance with its terms following the consummation of the transactions
contemplated hereby; (C) no party is in breach or default in any material
respect, and no event has occurred which, with notice or lapse of time, or
both,
would constitute a breach or default in any material respect, or permit
termination, modification, or acceleration, under such agreement; and
(D) no party has repudiated any provision of such agreement.
(q) Notes
and Accounts Receivable. All
notes and accounts receivable of ProFitness are reflected properly on its books
and records, are valid receivables subject to no setoffs or counterclaims,
are
current and to the Knowledge of ProFitness, collectible in full in the Ordinary
Course of Business.
(r) Insurance.
(i) Section
5(r) of the Disclosure Schedule identifies each insurance policy (including
policies providing property, casualty, liability, and workers’ compensation
coverage and bond and surety arrangements) to which ProFitness is a party,
a
named insured, or otherwise the beneficiary of coverage. Section 5(r) includes
a
list of any claims which have been made and remain outstanding under each such
policy, and a list of any events or circumstances which, to the Knowledge of
ProFitness, would likely form the Basis for any claims made in the
future.
(ii) With
respect to each such insurance policy: (A) the policy is legal, valid, binding,
enforceable, and in full force and effect; (B) the policy will continue to
be
legal, valid, binding, enforceable, and in full force and effect in accordance
with its respective terms following the consummation of the transactions
contemplated hereby; (C) neither ProFitness nor any other party to the policy
is
in breach or default (including with respect to the payment of premiums or
the
giving of notices) in any material respect, and no event has occurred which,
with notice or the lapse of time or both, would
22
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. ProFitness 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. ProFitness does not maintain any
self-insurance arrangements
(s) Litigation. Section
5(s) of the ProFitness Disclosure Schedule sets forth each instance in which
ProFitness or any of its directors, managers 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 ProFitness, 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. None of the actions,
suits, proceedings, hearings and investigations set forth in Section 5(s) of
the
Disclosure Schedule could reasonably be expected to result in a ProFitness
Material Adverse Effect.
(t) Employees. ProFitness
has provided I-trax with a list of full-time employees of ProFitness, including
salary information. ProFitness is not a party to or bound by any
collective bargaining agreement, nor has it experienced any strikes, grievances,
claims of unfair labor practices, or other collective bargaining disputes,
as
the foregoing terms are defined in the National Labor Relations Act or rules
promulgated thereunder. To its Knowledge, ProFitness has not
committed any unfair labor practice. ProFitness has no Knowledge of
any organizational effort presently being made or threatened by or on behalf
of
any labor union with respect to employees of ProFitness.
(u) Employee
Benefits. For
employee benefit purposes, ProFitness is part of a “Controlled Group” consisting
of Member, ProFitness and Minute Men Cleaners, Inc., a subsidiary of
Member. Except as disclosed in Section 5(u) of the ProFitness
Disclosure Schedule, ProFitness does not maintain 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
ProFitness (including such arrangements contained within the provisions of
an
individual employment or consulting agreement). ProFitness does not
maintain nor has it 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. ProFitness is not now and has never been obligated to
contribute to a Multiemployer Plan. None of the plans, agreements or
arrangements listed in Section 4(u) of the ProFitness 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 arrangement listed on Section 4(u) of
the ProFitness 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, and other
applicable laws, regulations and rules. ProFitness has delivered or
after the Closing will deliver to I-trax true and complete copies of all
23
plan
documents and summary plan descriptions of the plans, agreements or arrangements
listed on Section 4(u) of the ProFitness Disclosure
Schedule. ProFitness 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. Each Employee Benefit Plan that is intended to meet the
requirements of a “qualified plan” under Code Section 401(a) has received a
current, favorable determination letter from the Internal Revenue Service and
to
the Knowledge of ProFitness there are no facts or circumstances that could
adversely affect the qualified status of any such plan, agreement or
arrangement.
(v) Guaranties. ProFitness
is not a guarantor or otherwise is liable for any Liability or obligation
(including indebtedness) of any other Person.
(w) Environmental,
Health, and Safety Matters. To
its Knowledge, ProFitness has complied in all material respects and is in
compliance, in all material respects, with all Environmental, Health, and Safety
Requirements. Without limiting the generality of the foregoing,
ProFitness has obtained and complied with, in all material respects, and is
in
compliance, in all material respects, 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 failure to comply, individually or in the aggregate,
would have a ProFitness Material Adverse
Effect. ProFitness has not received any written notice or report
regarding any actual or alleged violation of Environmental, Health, and Safety
Requirements, or any material liabilities or potential material liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise), including
any investigatory, remedial or corrective obligations, relating to any of its
facilities arising under Environmental, Health, and Safety
Requirements.
(x) Certain
Business Relationships with ProFitness. Neither
the Member nor its Affiliates has been involved in any business arrangement
or
relationship with ProFitness within the twelve month period prior to the date
hereof (other than through the receipt of normal course dividends or other
distributions in its capacity as the Member of ProFitness), and neither the
Member nor its Affiliates owns any asset, tangible or intangible, which is
used
by or on behalf of ProFitness, or in the business of ProFitness.
(y) Disclosure. To
the Knowledge of ProFitness, none of the representations and warranties
contained in this Section 5, any other portion of this Agreement, the Exhibits,
Annexes and Schedules to this Agreement or, to the Knowledge of ProFitness,
any
report, certificate or instrument furnished to I-trax or its representatives
in
connection with the transactions contemplated by this Agreement, contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements and information contained herein
or
therein not misleading.
6. 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 11 below:
(a) General. Each
of the Parties will use his, her or its reasonable best efforts to take all
action and to do all things necessary, proper, or advisable in order to
consummate and
24
make
effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth in Section
7
below).
(b) Notices
and Consents. The
Member will cause ProFitness to give any notices to third parties, and will
cause ProFitness to use its reasonable best efforts to obtain any third party
consents that are or may be required in order to comply with the representations
and warranties provided to I-trax under this Agreement or to otherwise assure
that all conditions to Closing identified in Section 7 of this Agreement are
satisfied or are otherwise required to achieve Closing.
(c) Operation
of Business. ProFitness
will not cause or engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business consistent with past
practices. Without limiting the generality of the
foregoing, unless each of the following items is disclosed in writing by
ProFitness to I-trax and approved in writing by I-trax (which approval I-trax
will not unreasonably withhold), and except in connection with the consummation
of the transactions contemplated hereby or the terms of this
Agreement:
(i) ProFitness
will not authorize or effect any change in its organizational
documents;
(ii) ProFitness
will not issue any ProFitness Interests or other equity interests, grant any
options, warrants, or other rights to purchase or obtain any of its equity
securities or issue, sell, or otherwise dispose of any of its equity
securities;
(iii) ProFitness
will not sell, transfer, or otherwise dispose of any of its assets, other than
in the ordinary course of business consistent with past practices;
(iv) ProFitness
will not accelerate the collection of its accounts receivable or delay the
payment of any account payable or other liabilities outside of the
Ordinary Course of Business;
(v) ProFitness
will maintain its level of Working Capital in a manner consistent with past
practices and in the Ordinary Course of Business;
(vi) ProFitness
will not issue any note, bond, or other debt security or create, incur, assume,
or guarantee any indebtedness for borrowed money, except that prior to Closing,
ProFitness may enter into a lease of equipment, lessor to be determined,
providing for a total purchase price (exclusive of interest) of approximately
$136,000, in connection with its performance of a contract with
ING;
(vii) ProFitness
will not permit any insurance policy covering its assets or business to be
cancelled or terminated; and
(viii) ProFitness
will not enter into or amend any employment, consulting or severance or similar
arrangements with any Person in a manner which will remain in effect following
the Closing, other than in the Ordinary Course of Business consistent with
past
practices.
25
(d) Preservation
of Business. ProFitness
will use commercially reasonable efforts to keep the business and properties
of
ProFitness substantially intact, including its present operations, physical
facilities, working conditions, and relationships with lessors, licensors,
suppliers, customers and employees.
(e) Full
Access. ProFitness
will permit representatives of I-trax requesting information to have full access
at all reasonable times, upon reasonable notice and in a manner so as not to
interfere with the normal business operations of ProFitness, to all premises,
properties, personnel, books, records (including Tax records), contracts, and
documents of or pertaining to ProFitness.
(f) Notice
of Developments. The
Member shall give prompt written notice to I-trax of any breach of any of the
representations or warranties in Sections 4 or 5. Disclosures by
Member to I-trax pursuant to this Section 6(f) shall be deemed to amend and/or
supplement the representations and warranties of Member and/or ProFitness set
forth herein, including the ProFitness Disclosure Schedule, if Member discloses
such breach to I-trax under Section 7(a) and I-trax closes notwithstanding
that
it might have otherwise terminated this Agreement under Section
11(a)(ii). I-trax will give prompt written notice to the other
Parties of any breach of the representations or warranties set forth in
Section 3. Disclosures by I-trax to Member pursuant to this
Section 6(f) shall be deemed to amend and/or supplement the representations
and
warranties of I-trax set forth herein if I-trax discloses such breach to Member
and ProFitness under Section 7(b) and Member closes notwithstanding that it
might have otherwise terminated this Agreement under Section
11(a)(iii).
(g) Exclusivity. Neither
ProFitness nor the Member will: (i) solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating to the acquisition
of any ProFitness Interest or other interests or voting securities, or any
substantial portion of the assets, of any of ProFitness (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 any of the
foregoing. The Member will not vote its ProFitness Interests in favor
of any such acquisition structured as a merger, consolidation, or share
exchange. ProFitness will notify I-trax immediately if any Person
makes any proposal, offer, inquiry, or contact with respect to any of the
foregoing.
(h) Delivery
of Audited Financial Statements. ProFitness
shall promptly cause the Financial Statements to be audited and no later than
five (5) business days prior to the Closing, the audited Financial Statements of
ProFitness shall have been completed and delivered to I-trax together with
an
audit report of the auditing firm. Upon its receipt of the audited
Financial Statements, I-trax may reject the audited Financial Statements if
(i)
they contain any material qualifications or identify any material exceptions
to
GAAP; (ii) they are not in form or substance sufficient to: (A) satisfy I-trax’s
obligations under Form 8-K following the Closing; or (B) comply with Regulation
S-X promulgated under the Exchange Act; or (iii) do not conform in all material
respects to the unaudited Financial Statements attached to Section 5(h) of
the
ProFitness Disclosure Schedule, provided, however, that if such
rejection is based on a deficiency in form rather than substance, ProFitness
shall be given an additional five (5) business day period in which to cure
such
deficiency. If I-trax does not reject the audited Financial
26
Statements
within the aforesaid five (5) business day period (as same may be extended
pursuant to the aforesaid cure provision), then such audited Financial
Statements shall be deemed accepted by I-trax and, effective as of the Closing,
all references in this Agreement to Financial Statements, shall be deemed to
refer to the audited Financial Statements delivered by ProFitness to I-trax
under this Section 5(h).
(i) Prohibition
on Trading in I-trax Securities. The
Member acknowledges that the United States securities laws prohibit any person
who has received material non-public information concerning the matters which
are the subject matter of this Agreement from purchasing or selling the
securities of I-trax, or from communicating such information to any person
under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell securities of I-trax. Accordingly, the Member
agrees that it will not purchase or sell any securities of I-trax, or
communicate such information to any other person under circumstances in which
it
is reasonably foreseeable that such person is likely to purchase or sell
securities of I-trax, until no earlier than seventy-two (72) hours following
the
(i) filing of a Current Report on Form 8-K with the SEC announcing the
Closing pursuant to this Agreement or (ii) termination of this
Agreement.
7. Conditions
to Obligation to Close.
(a) Conditions
to Obligation of I-trax. The
obligation of I-trax to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) The
representations and warranties set forth in Section 4 and Section 5 above shall
be true and correct in all material respects (provided, however, that the
foregoing materiality qualifier will be ignored with respect to any
representation or warranty already qualified by materiality or ProFitness
Material Adverse Effect) at and as of the Closing Date and the aggregate
negative financial impact of all matters or events added to the ProFitness
Disclosure Schedules in accordance with Section 6(f) since the date of execution
of this Agreement does not exceed $250,000;
(ii) the
Member and/or ProFitness shall have performed and complied with all of their
covenants hereunder in all material respects through the Closing;
(iii) ProFitness
shall have procured any and all third party consents specified in the ProFitness
Disclosure Schedule;
(iv) no
action, suit, or proceeding shall be pending or, to the Knowledge of ProFitness,
threatened before any court or quasi-judicial or administrative agency of any
Federal, state, local, or foreign jurisdiction or before any arbitrator, or
any
self-regulatory organization (including AMEX), 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 materially and adversely the right of I-trax
to own ProFitness Interests and to control ProFitness, or (D) be deemed a
ProFitness Material Adverse Event;
27
(v) the
Member shall have delivered to I-trax a certificate from a duly authorized
officer of ProFitness and the Member to the effect that each of the conditions
specified above in Section 7(a)(i)-(iv) has been satisfied in all material
respects and, if not, specify the conditions that have not been
satisfied;
(vi) At
least
seventy-five percent (75%) of the members of the senior management team of
ProFitness identified on Schedule 7(a) of the ProFitness Disclosure Schedule
shall remain employed by ProFitness on the Closing Date;
(vii) I-trax
shall have received from counsel to the Member an opinion in form and substance
as set forth in Exhibit D attached hereto, addressed to I-trax, and dated
as of the Closing Date;
(viii) I-trax
shall have received the written resignation, effective as of the Closing, of
Xxxxx Xxxxxxx as the Manager and Chief Executive Officer of
ProFitness;
(ix) the
Member shall have delivered to I-trax an affidavit of such Member, in form
satisfactory to I-trax, stating, under penalties of perjury, the Member’s United
States taxpayer identification number and that the Member is not a foreign
person for purposes of Section 1445 of the Code;
(x) all
limited liability company and other actions necessary to authorize and
effectuate the consummation of the transactions contemplated hereby by
ProFitness shall have been duly taken prior to the Closing, and ProFitness
shall
have delivered to I-trax a certificate of a duly authorized officer of
ProFitness to that effect, 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;
(xi) the
Member shall have made the deliveries required to be made by it under Section
2(d)(i);
(xii) ProFitness
shall have delivered to I-trax a certificate of the existence and good standing
of ProFitness from its jurisdiction of organization and the Member shall have
delivered to I-trax a certificate of the existence and good standing of the
Member from its jurisdiction of incorporation, each dated a date reasonably
proximate to the Closing Date;
(xiii) the
Member shall have either (A) furnished evidence satisfactory to I-trax that
all
outstanding Indebtedness has been repaid in full or (B) requested that I-trax
apply that portion of the Purchase Price to be paid at the Closing to the
repayment in full of all outstanding Indebtedness;
(xiv) the
audited Financial Statements of ProFitness shall have been completed and
delivered to I-trax in accordance with Section 6(h);
28
(xv) ProFitness
shall have delivered to I-trax a certificate of Xxxxx Xxxxxxx and the President
of ProFitness updating the Expenses Schedule as of the Closing
Date;
(xvi) Xxxxx
Xxxxx, Xxxxx Xxxxx and Xxx Xxxxx shall have signed releases in mutually
acceptable form releasing Pro-Fitness and I-trax from any liability with respect
to the agreements referred to on Schedule 5(c) of the ProFitness Disclosure
Schedule (or any related agreements);
(xvii) Xxxxxxx
Xxxxxxx and Xxxxxxxx Xxxxxxx shall have signed a joinder agreeing to be bound
by
the covenants set forth in Section 8(e) to the same extent as Xxxxx Xxxxxxx
is
bound by thereby; and
(xviii) the
aggregate financial impact of all matters or events otherwise excluded from
disclosure because of materiality or because they did not constitute a
ProFitness Material Adverse Effect, shall not exceed $250,000.
I-trax
may waive any condition specified in this Section 7(a) if it executes a writing
so stating at or prior to the Closing. In addition, if any
unsatisfied condition to Closing under this Section 7(a) is identified in
accordance with Section 7(a)(v) and I-trax elects to close on this Agreement,
then such condition shall be deemed to be waived by I-trax.
(b) Conditions
to Obligation of the Member. The
obligation of the Member to consummate the transactions to be performed by
it or
ProFitness in connection with the Closing is subject to satisfaction of the
following conditions:
(i) the
representations and warranties set forth in Section 3 above shall be true and
correct in all material respects at and as of the Closing Date;
(ii) I-trax
shall have performed and complied with all of its covenants hereunder in all
material respects through the Closing;
(iii) ProFitness
shall have procured all of the third party consents specified in the ProFitness
Disclosure Schedule or otherwise required to achieve a Closing;
(iv) no
action, suit, or proceeding shall be pending or threatened before any court
or
quasi-judicial or administrative agency of any Federal, state, local, or foreign
jurisdiction or before any arbitrator, or any self-regulatory organization
(including AMEX), wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement or (B) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation (and no such
injunction, judgment, order, decree, ruling, or charge shall be in
effect);
(v) I-trax
shall have delivered to the Member a certificate to the effect that each of
the
conditions specified above in Section 7(b)(i)-(iv) has been satisfied in all
material respects and, if not, specify the conditions that have not been
satisfied;
29
(vi) I-trax
shall have made the deliveries required to be made by it under Section
2(d)(ii);
(vii) the
Member shall have received from counsel to I-trax an opinion in form and
substance as set forth in Exhibit E attached hereto, addressed to Member,
and dated as of the Closing Date;
(viii) 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 the Member; and
(ix) there
shall have been no circumstance that resulted in an I-trax Material Adverse
Effect.
The
Member may waive any condition specified in this Section 7(b) if it executes
a
writing so stating at or prior to the Closing. In addition, if any
unsatisfied condition to Closing under this Section 7(b) is identified in
accordance with Section 7(b)(v) and Member elects to close on this Agreement,
then such condition shall be deemed to be waived by Member.
8. Post-Closing
Covenants. The
Parties agree as follows with respect to the period following the
Closing.
(a) General. 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 9 below). The Member
acknowledges and agrees that from and after the Closing, I-trax will be entitled
to possession of all documents, books, records (including Tax records),
agreements, and financial data of any sort relating to ProFitness
provided, that, the Member will be provided reasonable access to
such documents, books and records of ProFitness at reasonable times and in
a
manner so as not to interfere with the normal business operations of
I-trax.
(b) Litigation
Support. In
the event and for as long as any Party actively is contesting or defending
against any action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand (excluding any dispute between I-trax and another Party) in
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving ProFitness, each of the other Parties will
cooperate with him, her or it and his, her or its counsel in the contest or
defense, make available their personnel, and provide such testimony and access
to their books and records as shall be reasonably necessary in connection with
the contest or defense, all at the sole cost and expense of the contesting
or
defending Party (unless the contesting or defending Party is entitled to
indemnification therefor under Section 9 below).
(c) Transition. Neither
the Member nor ProFitness will take any action that is designed or intended
or
that is reasonably likely to have the effect of discouraging any lessor,
30
licensor,
customer, supplier, or other business associate of ProFitness from maintaining
the same business relationships with ProFitness after the Closing as it
maintained with ProFitness prior to the Closing. The Member will
refer all customer inquiries relating to the businesses of ProFitness to I-trax
from and after the Closing.
(d) Confidentiality. The
Member and its Affiliates, including Xxxxx Xxxxxxx, will treat and hold as
such
all of the Confidential Information, refrain from using any of the Confidential
Information except in connection with this Agreement, and deliver promptly
to
I-trax or destroy, at the request and option of I-trax, all tangible embodiments
(and all copies) of the Confidential Information which are in its
possession. In the event that the Member or any of its Affiliates is
requested or required (by oral question or request for information or documents
in any legal proceeding, interrogatory, subpoena, civil investigative demand,
or
similar process) to disclose any Confidential Information, the Member will
notify I-trax promptly of the request or requirement so that I-trax may seek
an
appropriate protective order or waive compliance with the provisions of this
Section 8(d). If, in the absence of a protective order or the receipt
of a waiver hereunder, the Member or such Affiliate is, on the advice of
counsel, compelled to disclose any Confidential Information to any tribunal
or
else stand liable for contempt, the Member or such Affiliate may disclose the
Confidential Information to the tribunal; provided, however, that
the Member shall use its reasonable best efforts to obtain, at the reasonable
request of I-trax, an order or other assurance that confidential treatment
will
be accorded to such portion of the Confidential Information required to be
disclosed as I-trax shall designate; provided, that, I-trax shall
reimburse the Member for all costs incurred obtaining such
protection. The foregoing provisions shall not apply to any
Confidential Information which is generally available to the public immediately
prior to the time of disclosure or becomes available to the public pursuant
to
actions taken by I-trax. In addition to the foregoing, unless and
until the Closing occurs, I-trax shall continue to be bound by and agrees to
comply with the terms and provisions of the Confidentiality Agreement dated
June
28, 2007 between I-trax and ProFitness. Notwithstanding the foregoing
provisions of this Section 8(d), the Parties may retain copies of or disclose
Confidential Information of another Party to the extent necessary or reasonably
required (i) for the purpose of preparing financial statements and Tax returns
and pursuing Tax refund claims or contesting Tax claims, and (ii) in connection
with any dispute between the Parties. Further notwithstanding the
foregoing, Xxxxx Xxxxxxx shall be permitted to maintain full access to his
ProFitness Outlook account for at least 120 days after the Closing.
(e) Covenant
Not to Compete.
(i) To
induce
I-trax to enter into this Agreement and to consummate the transactions
contemplated hereby, for a period of five (5) years from and after the Closing
Date, neither the Member nor Xxxxx Xxxxxxx nor any of their respective
Affiliates shall, directly or indirectly, including through an
Affiliate: (A) own, manage, operate, finance, join, control or
participate in the ownership, management, operation, financing or control of,
or
be connected with as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise, any Competing Business (defined below);
(B) recruit, solicit or induce, or attempt to induce any employee of, or
independent contractor to, ProFitness or I-trax to terminate their employment
with, or otherwise cease their relationship with, ProFitness or I-trax, as
the
case may be; (C) in connection with any Competing Business, call on, solicit,
divert, take away or attempt to
31
take
away, any business or patronage, individual or entity which is a current or
prospective client, customer, vendor or supplier of ProFitness or I-trax or
any
of their Affiliates or was such a client, customer, vendor or supplier at any
time during the eighteen (18) months preceding the Closing Date or assist any
other Person to do so, or be a proprietor, equity holder, investor, lender,
partner, director, officer, employee, consultant or representative of any Person
who does or attempts to do so; or (D) publicly disparage, deprecate or make
any
untrue negative comment with respect to any other Party or any of their
Subsidiaries or their respective businesses, operations or
properties.
(ii) For
purposes of Section 8(e)(i) above, the following is deemed not engaging in
Competing Business: (A) ownership of an interest of less than 1% as a
passive investor in companies with securities traded on any of the New York
Stock Exchange, the American Stock Exchange, the NASDAQ Global Market, the
NASDAQ Global Select Market, the NASDAQ Capital Market or quoted on the OTC
Bulletin Board; (B) ownership of an interest of less than 5% as a passive
investor in companies with securities not traded on any of the New York Stock
Exchange, the American Stock Exchange, the NASDAQ Global Market, the NASDAQ
Global Select Market, the NASDAQ Capital Market or quoted on the OTC Bulletin
Board if such interest was acquired while the subject companies were not engaged
in the Competing Business; (C) ownership of any interest in I-trax; and (D)
the
engaging by Xxxxx Xxxxxxx in the DS Permitted Activities (defined
below).
(iii) If
the
final judgment of a court of competent jurisdiction declares that any term
or
provision of this Section 8(e) is invalid or unenforceable, the Parties agree
that the court making the determination of invalidity or unenforceability shall
have the power to reduce the scope, duration, or area of the term or provision,
to delete specific words or phrases, or to replace any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable.
(iv) The
term
“Competing Business” shall mean any business or enterprise (other than
ProFitness or I-trax or their Affiliates) engaged in the business of managing,
operating or developing corporate fitness centers, wellness programs or
occupational health clinics for employers and their employees in any state
or
county in which ProFitness is engaged in any such business as of the
Closing. The term Competing Business shall not encompass commercial
fitness centers, health clubs, health clinics or wellness programs which are
open to the general public.
(v) Notwithstanding
this Section 8(e), provided that it is not for or on behalf of a Competing
Business, Xxxxx Xxxxxxx may engage, directly or indirectly, and as agent,
consultant, partner, shareholder or employee, in counseling, life coaching
and
executive coaching to any individual, and to organizations (including
educational institutions), corporations and other Persons who are not existing
clients of ProFitness, have not been clients of ProFitness for the prior one
year period, and are not potential clients included within Schedule
1.
32
(vi) If
I-trax
defaults with respect to payment of funds or delivery of Shares payable or
deliverable after the Closing to Member pursuant to the terms of this Agreement
or any Related Document, then the covenants and restrictions on competition
set
forth in this Section 8(e) shall be terminated and deemed null and
void.
(f) Listing
of Shares; Current Information. I-trax
shall cause any I-trax Shares issued pursuant to Section 2 to be approved for
listing on any stock market or exchange on which I-trax Shares are then
listed. As long as Member owns any I-trax Shares issued pursuant to
Section 2, I-trax will file all reports required to be filed by I-trax under
the
Exchange Act to permit Member to sell such I-trax Shares under Rule 144 of
the
Securities Act.
(g) Securities
Law Filings. The
Member shall, and shall cause the accountants of ProFitness to, cooperate with
I-trax and its accountants in the provision of such information and documents
as
may be reasonably required in order to complete any filings required under
the
Exchange Act or other United States securities laws relating to the transactions
contemplated by this Agreement. I-trax shall reimburse Member’s
and/or ProFitness’s accountants for all reasonable fees and expenses incurred by
them in providing such cooperation.
(h) ProFitness
Senior Management. I-trax
shall, or shall cause ProFitness to, offer terms of employment to those
employees listed on Section 8(h) of the ProFitness Disclosure Schedules on
terms
and conditions at least as favorable as those set forth in the forms of
employment offer letters and severance agreements attached as Exhibit F
to this Agreement. The Member agrees to assume responsibility for,
and indemnify and hold I-trax and ProFitness harmless against, one half of
the
severance costs paid or payable to any employee listed on Section 8(h) of the
ProFitness Disclosure Schedules who is terminated prior to the first anniversary
of the Closing in a manner which results in a severance obligation;
provided, that notwithstanding any severance amounts payable to such
terminated employee, the Member shall only be responsible to the extent of
50%
of a maximum severance obligation equal to one week of base salary for each
one
year of service with ProFitness.
(i) Potential
Post-Closing Adjustment with respect to Cash at Closing. Within
fifteen (15) Business Days after Closing, I-trax shall advise Member whether
and
if so, to what extent, Cash at Closing was more or less than sufficient to
pay
the actual expenses listed on the updated Expenses Schedule. If there
is a deficiency or an excess, then the Parties will negotiate in good faith
an
appropriate adjustment. If there is a deficiency, Member will pay to
I-trax the amount thereof in cash within five (5) business days after the
adjustment is finalized. If there is an excess, then such excess
amount will be added to the principal amount of the Promissory Note as of the
date such adjustment is finalized.
9. Indemnification.
(a) Survival
of Representations and Warranties. All
of the representations and warranties of the Member and ProFitness contained
in
this Agreement shall survive the Closing hereunder and continue in full force
and effect until and including the twentieth (20th) business
day
after I-trax files its Annual Report on Form 10-K for the fiscal year ending
December 31, 2008 but in no event later than April 15, 2009. All
representations and warranties
33
of
I-trax
contained in this Agreement shall survive the Closing hereunder and continue
in
full force and effect until and including the twentieth (20th) business day
after I-trax files its Annual Report on Form 10-K for the fiscal year ending
December 31, 2008, but in no event later than April 15, 2009. On
the Closing Date, all representations and warranties contained in this Agreement
and made by the Member and ProFitness will expire as to ProFitness and
thereafter will be deemed to have been made exclusively by the
Member.
(b) Indemnification
Provisions for Benefit of I-trax.
(i) In
the
event ProFitness or the Member breaches (or in the event any third party alleges
facts that, if true, would mean that the Member had breached) any of their
respective representations, warranties or covenants contained herein and, if
there is an applicable survival period pursuant to Section 9(a), provided that
I-trax makes a written claim for indemnification against the Member (an
“I-trax Notice of Claim”) in accordance with Section 9(j) and 12(g)
within such survival period, then the Member agrees to indemnify I-trax from
and
against the entirety of any Adverse Consequences I-trax may suffer through
and
after the date of the claim for indemnification (including any Adverse
Consequences I-trax may suffer after the end of any applicable survival period)
resulting from, arising out of, relating to, in the nature of, or caused by
such
breach (or the alleged breach).
(ii) Notwithstanding
any limitations on recovery or on the survival period contained within Sections
9(a) and 9(b)(i), the Member agrees to 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: (A) any Liability of
ProFitness for any Taxes of ProFitness with respect to any Tax year or portion
thereof ending on or before the Closing Date (including any Taxes that would
be
required to be accrued for as of the Closing Date under GAAP, but net of any
refunds of or credits in respect of Taxes which ProFitness may receive after
the
Closing with respect to any such Tax year or portion thereof) to the extent
such
Taxes are not reflected in the reserve for Tax Liability of ProFitness shown
on
the face of the Most Recent Balance Sheet (rather than in any notes thereto),
as
such reserve is adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of ProFitness in filing its Tax
Returns; (B) any Liability of ProFitness for the unpaid Taxes of any Person
(other than ProFitness) under Treasury Regulation §1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise; (C) a breach of the representations and warranties
set
forth in Sections (4)(b), 4(c), 4(f), 5(b), 5(c), and 5(d); (D) any fraudulent
misrepresentation or conduct by Member or ProFitness under this Agreement;
(E)
the use of the name “ProFitness” prior to the date of this Agreement; and (F)
any claims asserted against I-trax or ProFitness arising from or relating to
any
of the entitlement or alleged entitlement to any equity, phantom stock, profit
participation or similar rights disclosed in Schedule 5(c) of the ProFitness
Disclosure Schedules. In the event I-trax incurs any Adverse
Consequences as a result of any of the items enumerated within subsections
(A)
through (F) above, the survival period relating thereto shall extend to the
applicable statute of limitations and there shall be no limitation on
recovery. Any claim for indemnification under this Section 9(b)(ii)
shall be made in accordance with Section 9(j) and 12(g).
34
(c) Indemnification
Provisions for Benefit of the Member.
(i) In
the
event I-trax breaches (or in the event any third party alleges facts that,
if
true, would mean that I-trax had breached) any of its representations,
warranties, covenants contained herein, and, if there is an applicable survival
period pursuant to Section 9(a), provided that the Member makes a written claim
for indemnification against I-trax (a “Member Notice of Claim”) in accordance
with Section 9(j) and 12(g) within such survival period, then I-trax agrees
to
indemnify the Member from and against the entirety of any Adverse Consequences
the Member may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences the Member may suffer after
the end of any applicable survival period) resulting from, arising out of,
relating to, in the nature of, or caused by such breach (or such alleged
breach).
(ii) Notwithstanding
any limitations on recovery or on the survival period contained within Sections
9(a) and 9(c)(i), I-trax agrees to indemnify the Member from and against the
entirety of any Adverse Consequences the Member may suffer resulting from,
arising out of, relating to, in the nature of, or caused by (A) any breach
of
the representations and warranties set forth in Sections (3)(b) and 3(g) and
(B)
any fraudulent misrepresentation or conduct by I-trax under this
Agreement. In the event Member or ProFitness incurs any Adverse
Consequences as a result of any of the items enumerated within subsections (A)
and (B) above, the survival period relating thereto shall extend to the
applicable statute of limitations and there shall be no limitation on
recovery. Any claim for indemnification under this Section 9(c)(ii)
shall be made in accordance with Section 9(j) and 12(g).
(d) Matters
Involving Third Parties.
(i) If
any
third party shall notify any Party (the “Indemnified Party”) with respect
to any matter (a “Third Party Claim”) which may give rise to a claim for
indemnification against any other Party (the “Indemnifying Party”) under
this Section 9, then the Indemnified Party shall promptly notify each
Indemnifying Party thereof in writing; provided, however, that no
delay on the part of the Indemnified Party in notifying any Indemnifying Party
shall relieve the Indemnifying Party from any obligation hereunder unless (and
then solely to the extent) the Indemnifying Party is actually prejudiced by
such
delay.
(ii) Any
Indemnifying Party will have the right to defend the Indemnified Party against
the Third Party Claim with counsel of its choice reasonably satisfactory to
the
Indemnified Party as long as (A) the Indemnifying Party notifies the Indemnified
Party in writing not later than fifteen (15) days after the Indemnified Party
has given notice of the Third Party Claim that the Indemnifying Party will
indemnify the Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party Claim, (B) the
Indemnifying Party provides the Indemnified Party with evidence reasonably
acceptable to the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and
fulfill
35
its
indemnification obligations hereunder, (C) the Third Party Claim involves only
money damages and does not seek an injunction or other equitable relief, (D)
settlement of, or an adverse judgment with respect to, the Third Party Claim
is
not, in the good faith judgment of the Indemnified Party, likely to establish
a
precedential custom or practice materially adverse to the continuing business
interests of the Indemnified Party, and (E) the Indemnifying Party conducts
the
defense of the Third Party Claim actively and diligently.
(iii) As
long
as the Indemnifying Party is conducting the defense of the Third Party Claim
in
accordance with Section 9(d)(ii) above, (A) the Indemnified Party may retain
separate co-counsel at its sole cost and expense and participate in the defense
of the Third Party Claim, (B) the Indemnified Party 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 Indemnifying Party (not
to
be withheld unreasonably), and (C) the Indemnifying Party 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 Party (not
to
be withheld unreasonably) or written agreement is obtained releasing the
Indemnified Party from all liability thereunder.
(iv) In
the
event any of the conditions in Section 9(d)(ii) above is or becomes unsatisfied,
however, (A) the Indemnified Party 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 it reasonably may deem appropriate (and the Indemnified
Party need not consult with, or obtain any consent from, any Indemnifying Party
in connection therewith), (B) the Indemnifying Parties will reimburse the
Indemnified Party promptly and periodically for the costs of defending against
the Third Party Claim (including reasonable attorneys’ fees and expenses and the
amount paid in settlement), and (C) the Indemnifying Parties will remain
responsible for any Adverse Consequences the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused by
the
Third Party Claim to the fullest extent provided in this Section 9.
(e) Determination
of Adverse Consequences. All
indemnification payments under this Section 9 shall be deemed adjustments to
the
Purchase Price.
(f) Set-Off. Subject
to and in accordance with the terms of this Section 9, with respect to any
claim
for indemnification under Section 9(b)(i), I-trax shall have recourse against
the Member (including any shareholder, director, officer, agent or Affiliate
thereof) solely to the extent of the following, any or all of which I-trax
may
look to in its sole discretion:
(i) the
release of Escrow Shares, provided that the Escrow Shares have not been released
to the Member in accordance with Section 2(e) and the Escrow
Agreement;
(ii) the
exercise of I-trax’s set-off right against the amount due under the Promissory
Note, if any;
36
(iii) the
exercise of I-trax’s set-off right against the unpaid Additional Purchase Price
Payment, if any;
(iv) the
exercise of I-trax’s set-off right against the unpaid Make-Whole Payment, if
any; or
(v) any
combination of (i), (ii), (iii), (iv) and (v) above.
The
limitations in this Section 9(f) apply only to claims under Section
9(b)(i).
For
purposes of determining the number of Escrow Shares that shall be released
to
I-trax pursuant to this Section 9(f), each Escrow Share shall be valued at
the
average of Closing Price during the five (5) consecutive trading days prior
to a
claim by I-trax against the Escrow Shares pursuant to this Section.
(g) Exclusive
Remedy.
(i) This
Section 9 shall provide the sole and exclusive remedy for any and all Adverse
Consequences sustained or incurred by a Party, or its successors or
assigns. The Member hereby agrees that it will not make any claim for
indemnification against ProFitness by reason of the fact that it was a manager
or agent of any such entity or was serving at the request of any such entity
as
a partner, trustee, member or agent of another entity (whether such claim is
for
judgments, damages, penalties, fines, costs, amounts paid in settlement, losses,
expenses, or otherwise) with respect to any action, suit, proceeding, complaint,
claim, or demand brought by I-trax against the Member (whether such action,
suit, proceeding, complaint, claim, or demand is pursuant to this Agreement,
applicable law, or otherwise).
(ii) For
the
purposes of determining whether (a) the Party against whom indemnification
is
sought shall have breached any representation or warranty and have an obligation
to indemnify the Party claiming indemnification pursuant to this Section 9
or
(b) the amount of any Adverse Consequences suffered, any qualifications and
exceptions relating to materiality, an I-trax Material Adverse Effect or a
ProFitness Material Adverse Effect, as applicable, with respect to any
representations or warranties shall be disregarded.
(h) Baskets.
(i) Notwithstanding
anything contained in this Section 9 to the contrary, no Party shall have any
obligation to indemnify any other Party from and against any Adverse
Consequences resulting from, arising out of, relating to, in the nature of,
or
caused by any breach (or alleged breach) of any representation or warranty
until
the Party claiming indemnification has suffered Adverse Consequences by reason
of all such breaches (or alleged breaches) in excess of a $100,000 aggregate
threshold (the “Threshold Amount”); thereupon, the Party claiming
indemnification shall be entitled to the full amount of such claim to the extent
it exceeds a deductible amount of $50,000.
37
(i) Limitations
on Indemnification.
(i) I-trax’s
sole recourse for any claim regarding indemnification liability of the Member
and ProFitness pursuant to Section 9(b)(i) shall be, in the manner provided
for
in Section 9(f); provided, however, that such limitation shall not
apply to any obligation to indemnify for Adverse Consequences resulting from
fraudulent misrepresentation.
(ii) I-trax
shall not be entitled to any indemnification pursuant to this Section 9 with
respect to any claim which has been satisfied through a Purchase Price reduction
made pursuant to another section of this Agreement.
(iii) In
no
event shall the aggregate indemnification liability of I-trax pursuant to this
Section 9(c)(i) exceed the Purchase Price (as it may be adjusted
hereunder);
(iv) In
no
event shall any Party have a right to indemnification based on a breach of
a
representation or warranty which such Party knew to be untrue or incorrect
as of
Closing.
(j) Procedural
Matters.
(i) Any
Notice of Claim shall set forth (A) a brief description of the nature of the
potential or actual Adverse Consequences and (B) to the extent then feasible,
the total dollar amount of the anticipated cost to the Indemnified Party of
the
Adverse Consequences (including any costs or expenses that have been or may
be
reasonably incurred in connection therewith) (the “Indemnification
Amount”). In addition, if any I-trax Notice of Claim involves a
claim under Section 9(b)(i), such I-trax Notice of Claim shall also set forth
the means of recourse selected by I-trax in accordance with Section
9(f). Payment of the Indemnification Amount to the Indemnified Party
as set forth in a Notice of Claim shall be made by the Indemnifying Party no
later than the thirtieth (30th) day after the date of the Notice of Claim (or
such later date as the Indemnifying Party receives written notice of the
Indemnification Amount), unless the provisions of subsection 9(j)(ii) are
applicable.
(ii) If
the
Indemnifying Party (acting reasonably) shall object to the nature of a claim
as
being an indemnifiable claim and/or to any Adverse Consequence as to which
a
Notice of Claim is sent by the Indemnified Party or to the Indemnification
Amount in connection with such Adverse Consequences, the Indemnifying Party
shall give written notice of such objection (“Objection Notice”) to the
Indemnified Party within twenty (20) business days after receipt of the Notice
of Claim. The Objection Notice shall specify in reasonable detail the
reason for the objection. Upon such objection, the Parties shall
attempt in good faith to resolve any disagreement, and any payment required
to
be made by any Party as a result of the mutual resolution of such disagreement
shall be made within five (5) business days of such mutual
resolution. If any such disagreement remains unresolved as of the
tenth (10th) business day after receipt of Objection Notice, the dispute shall
be determined by an independent third party
38
(the
“Neutral Party”) selected jointly by I-trax and the Member, and the
decision of such Neutral Party shall, in the absence of manifest error, be
final
and binding on the Parties. If I-trax and the Member are unable to
agree on the choice of a Neutral Party, they will select a nationally recognized
accounting firm by lot (after excluding their respective regular outside
accounting firms). Upon resolution of the dispute by the Neutral
Party, any payment deemed to be required to be made by any Party pursuant to
the
Neutral Party’s determination shall be made no later than the fifth (5th)
business day after such determination is rendered. In the event
Itrax and the Member submit any unresolved disputes to a Neutral Party for
resolution as provided this Section 9(j), I-trax and the Member will share
responsibility for the fees and expenses of the Neutral Party as
follows:
(A) If
the
Neutral Party resolves all of the disputes in favor of I-trax, the Member will
be responsible for all of the fees and expenses of the Neutral
Party;
(B) If
the
Neutral Party resolves all of the disputes in favor of the Member, I-trax will
be responsible for all of the fees and expenses of the Neutral Party;
and
(C) If
the
Neutral Party resolves some of the disputes in favor of Itrax and the rest
of the disputes in favor of the Member, I-trax will be responsible for a
proportionate amount of the fees and expenses of the Neutral Party based on
the
dollar amount of the dispute resolved against I-trax compared to the total
dollar amount of all disputes submitted to the Neutral Party and the Member
shall be responsible for a proportionate amount of the fees and expenses of
the
Neutral Party based on the dollar amount of the disputes resolved against the
Member compared to the total dollar amount of all disputes submitted to the
Neutral Party.
(iii) Each
Indemnified Party shall take commercially reasonable actions to mitigate Adverse
Consequences, including pursuing insurance claims and Third Party Claims, and
shall reasonably consult and cooperate with each Indemnifying Party with a
view
towards mitigating Losses, in connection with claims for which an Indemnified
Party seeks indemnification hereunder.
10. Tax
Matters. The
following provisions shall govern the allocation of responsibility as between
I-trax and the Member for certain tax matters following the Closing
Date:
(a) Employment
Tax Returns. The
Member and I-trax shall cause ProFitness to follow the Alternate Procedure
specified in Rev. Proc. 2004-53, 2004-2 C.B. 320, Sec. 4, whereby, among other
things (i) the Member shall be relieved from filing a Form W-2 with respect
to
any employee of ProFitness for the portion of the 2007 calendar year Tax period
ending on the Closing Date, and (iii) I-trax shall file (or cause ProFitness
to
file) a Form W-2 for each employee for the 2007 calendar year Tax period
(including the portion of such Tax period that such employee was
employed prior to the Closing Date). The Member shall provide I-trax
39
on
a
timely basis with all payroll and employment-related information with respect
to
each employee, to the extent such information is not contained in the Tax
records of ProFitness.
(b) Other
Tax Returns. The
Member shall prepare or cause to be prepared at its own expense and in
accordance with the past custom and practice of ProFitness all Income Tax
Returns of ProFitness for jurisdictions that do not impose Taxes on ProFitness
at the business entity level (i.e. those jurisdictions that tax ProFitness
as a
pass through entity) for Tax periods ending on or prior to the Closing Date
(“pre-Closing Periods”), the due date of which Tax Returns is on or after
the Closing Date. The items of income, gain, loss, deduction and
credit of ProFitness shall be allocated between any pre-Closing Period and
any
Tax period ending after the Closing Date in accordance with the
closing-of-the-books method so long as such method is consistent with the Code
and the Treasury Regulations. The Member shall afford I-trax a
reasonable opportunity to review and comment upon such Tax Returns prior to
their filing. I-trax shall prepare or cause to be prepared and file
or cause to be filed all other Tax Returns of ProFitness, the due date of which
Tax Returns is after the Closing Date.
(c) Cooperation
on Tax Matters.
(i) I-trax,
ProFitness and the Member shall cooperate fully, as and to the extent reasonably
requested by the other party, in connection with the filing of Tax Returns
pursuant to this Section and any audit, litigation or other proceeding with
respect to Taxes. Such cooperation shall include the retention and
(upon the other party’s request) the provision of records and information which
are reasonably relevant to any such audit, litigation or other proceeding and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided
hereunder. ProFitness and the Member agree (A) to retain all books
and records with respect to Tax matters pertinent to ProFitness relating to
any
Tax period beginning before the Closing Date until the expiration of the statute
of limitations (and, to the extent notified by I-trax or the Member, any
extensions thereof) of the respective Tax periods, and to abide by all record
retention agreements entered into with any Authority, and (B) to give the other
party reasonable written notice prior to transferring, destroying or discarding
any such books and records and, if the other party so requests, ProFitness
and
or the Member, as the case may be, shall allow the other party to take
possession of such books and records.
(ii) I-trax
and the Member further agree, upon request, to use their best efforts to obtain
any certificate or other document from any Authority or any other Person as
may
be necessary to mitigate, reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the transactions contemplated
hereby).
(d) Tax
Sharing Agreements. All
tax sharing agreements or similar agreements with respect to or involving
ProFitness, if any, shall be terminated as of the Closing Date and, after the
Closing Date, ProFitness shall not be bound thereby or have any liability
thereunder.
(e) Certain
Taxes. All
transfer, documentary, sales, use, stamp, registration and other such Taxes
and
fees (including any penalties and interest) incurred in connection with
40
this
Agreement, shall be paid by the Member when due, and the Member will, at its
own
expense, file all necessary Tax Returns and other documentation with respect
to
all such transfer, documentary, sales, use, stamp, registration and other Taxes
and fees, and, if required by applicable law, I-trax will, and will cause its
affiliates to, join in the execution of any such Tax Returns and other
documentation.
(f) Tax
Purchase Price Allocation. The
purchase of the ProFitness Interests shall be treated as a sale of the assets
of
ProFitness for federal Income Tax purposes and for the purposes of any other
Income Tax that treats ProFitness as an entity disregarded from its
owner. The Tax Purchase Price shall be allocated among the assets of
ProFitness and the covenant not to compete described in Section 8(e) in
accordance with the requirements of the Code (the “Allocation”);
provided, that the amount of Tax Purchase Price allocated to the covenant
not to compete (including with the joinder contemplated by Section 7(a)(xvii))
shall not exceed 1% - 5% of the Tax Purchase Price. The Allocation
shall be prepared by I-trax for the review and approval of Member by the
sixtieth (60th)
business day after the Closing Date. If within thirty (30) days after
delivery of the Allocation, Member notifies I-trax in writing that Member
objects to the Allocation, I-trax and Member shall use commercially reasonable
efforts to resolve such dispute within twenty (20) business days. In
the event the Parties are unable to resolve any such dispute within such twenty
(20) business day period, the Parties will engage the Neutral Accounting Firm
(selected under Section 2(h)(iv) if needed), to resolve such dispute as promptly
as practicable in accordance with rules to be established by I-trax, the Member
and the Neutral Accounting Firm. The Neutral Accounting Firm’s
decision shall be final, non-appealable and binding on I-trax and the Member,
and the fees and expenses of the Neutral Accounting Firm shall be paid one-half
by I-trax and one-half by the Member. The Member, ProFitness, and
I-trax agree to report, pursuant to Section 1060 of the Code and the regulations
promulgated thereunder or any other similar provision under state, local or
foreign law, as and when required, the Allocation of the Purchase Price
(including subsequent adjustments, if any), among the assets of ProFitness
and
the covenant not to compete described in Section 8(e) in a manner entirely
consistent with such Allocation in the preparation and filing of all Tax Returns
(including IRS Form 8594 and any amendment thereto). Neither I-trax
nor the Member shall take any position (whether in audits, Tax Returns, or
otherwise) that is inconsistent with such Allocation unless required to do
so by
applicable law.
11. Termination.
(a) Termination
of Agreement. Certain
of the Parties may terminate this Agreement as provided below:
(i) I-trax
and the Member may terminate this Agreement by mutual written consent at any
time prior to the Closing;
(ii) I-trax
may terminate this Agreement by giving written notice to the Member and
ProFitness at any time prior to the Closing (A) in the event the Member or
ProFitness has breached any representation, warranty, or covenant contained
in
this Agreement in any material respect, I-trax has notified the Member and
ProFitness 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 January 15, 2008 by
41
reason
of
the failure of any condition set forth in Section 7(a) hereof (unless the
failure results primarily from I-trax itself breaching any representation,
warranty, or covenant contained in this Agreement); and
(iii) the
Member may terminate this Agreement by giving written notice to I-trax at any
time prior to the Closing (A) in the event I-trax has breached any
representation, warranty, or covenant contained in this Agreement in any
material respect, the Member has notified I-trax 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 January 15, 2008 by
reason of the failure of any condition set forth in Section 7(b) hereof (unless
the failure results primarily from the Member itself breaching any
representation, warranty, or covenant contained in this Agreement).
(b) Effect
of Termination. If
any Party terminates this Agreement pursuant to Section 11(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).
12. 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 I-trax and the Member; 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 best efforts to advise the other Parties prior to making
the disclosure).
(b) No
Third-Party Beneficiaries. This
Agreement shall not confer any rights or remedies upon any Person other than
the
Parties and their respective successors and permitted assigns.
(c) Entire
Agreement. This
Agreement (including the documents referred to herein) constitutes the entire
agreement among the Parties and supersedes any prior or contemporaneous
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 I-trax and the
Member; provided, however, that I-trax may: (i) assign any or all
of its rights and interests hereunder to one or more of its Affiliates; (ii)
designate one or more of its Affiliates to perform its obligations hereunder
(in
any or all of which cases described in (i) or (ii) I-trax nonetheless shall
remain responsible for the performance of all of its obligations hereunder);
and
(iii) assign any or all of its rights and interests hereunder to any Person
with
which or into which I-trax may be merged or which may succeed to all or
substantially all its assets or business.
42
(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 or by a nationally
recognized overnight xxxxxxx, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If
to ProFitness:
|
ProFitness
Health Solutions
0
Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxxxxxx 00000
Attention:
Xxxxx Xxxxxxx
P:
000-000-0000
F:
203-929-6723
|
If
to Member:
|
Minute
Man, Incorporated
000
Xxxxxxxxx Xxxxx
Xxxxxxxx,
Xxxxxxxxxxx 00000
Attention:
Xxxxx Xxxxxxx
P:
203-227-6153
F:
000-000-0000
|
Copy
to:
|
Wofsey,
Rosen, Kweskin & Kuriansky, LLP
000
Xxxxxx Xxxxxx
Xxxxxxxx,
Xxxxxxxxxxx 00000-0000
Attention:
Xxxxxxxx Xxxxxxxx, Esq.
P:
000-000-0000
F:
000-000-0000
|
If
to I-trax :
|
Xxxxx
X. Xxxxxx
Chairman,
I-trax, Inc.
0
Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx
Xxxx, XX 00000
P:
000-000-0000 x000
F:
000-000-0000
|
Copy
to:
|
Xxxx
Xxxxxxxxx
General
Counsel
I-trax,
Inc.
0
Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx
Xxxx, XX 00000
P:
000-000-0000 x000
F:
000-000-0000
|
43
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 Delaware
General Corporate Law as to matters within the scope thereof, and as to all
other matters shall be governed by and construed in accordance with in
accordance with the domestic laws of the Commonwealth of Pennsylvania without
giving effect to any choice or conflict of law provision or rule (whether of
the
State of Delaware, the Commonwealth of Pennsylvania or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than
the
State of Delaware or the Commonwealth of Pennsylvania, as may be required by
this Section 12(h).
(i) Amendments
and Waivers. No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by I-trax and the Member. 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 Member and I-trax will bear its own costs and expenses (including legal
fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby. The Member agrees to bear any and
all of the Transaction Costs to the extent not taken into account at the
Closing.
(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)
44
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.
(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, in addition to any other remedy to which they may be entitled, at law
or
in equity.
[remainder
of page intentionally left blank-signature page follows]
45
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
|
|
Name:
Xxxxx X. Xxxxxx
|
|
Title:
Chairman
|
|
PRO
FITNESS HEALTH SOLUTIONS, LLC,
|
|
By:
/s/Xxxxx Xxxxxxx
|
|
Name:
Xxxxx Xxxxxxx
|
|
Title:
Manager
|
|
MINUTE
MEN, INCORPORATED
|
|
By:
/s/Xxxxx Xxxxxxx
|
|
Name:
Xxxxx Xxxxxxx
|
|
Title:
Secretary and Treasurer
|
|
/s/Xxxxx Xxxxxxx | |
Xxxxx
Xxxxxxx
|
46