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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF SMALL BUSINESS ISSUER
Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934
I-TRAX.COM, INC.
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(Name of Small Business Issuer in its charter)
Delaware 13-3212593
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12020 Sunrise Valley Drive,
Suite 350
Reston, VA 20191
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: 703-860-0600
Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
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(Title of Class)
PHL_A 1347900 v 6
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INDEX
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Page
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PART I ................................................................................................2
Item 1. Business......................................................................2
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................................18
Item 3. Description of Properties....................................................21
Item 4. Security Ownership of Certain Beneficial Owners and Management...............21
Item 5. Directors and Executive Officers.............................................24
Item 6. Executive Compensation.......................................................28
Item 7. Certain Relationships and Related Transactions...............................31
Item 8. Description of Securities....................................................32
PART II ...............................................................................................33
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters..................................................33
Item 2. Legal Proceedings............................................................34
Item 3. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.........................................................34
Item 4. Recent Sales of Unregistered Securities......................................34
Item 5. Indemnification of Directors and Officers....................................36
PART F/S. Financial Statements.........................................................37
PART III ...............................................................................................37
Item 1/2. Index to Exhibits............................................................37
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PART I
Item 1. Business.
Business History
We were incorporated in the State of Delaware under the name of
Marmac Corporation in May 1969. In December 1979, we changed the Company's name
to Ibex Industries International, Inc. On April 1, 1996, we purchased the assets
of certain physician practices, changed the Company's name to U.S. Medical
Alliance, Inc., and commenced operations as a physician practice management
company.
As U.S. Medical Alliance we completed one additional physician
practice acquisition. However, we did not have adequate liquidity and capital
resources to withstand the downturn in the physician practice management
industry, nor the ability to acquire profitable physician practices. In January
1997, the Board of Directors, in an effort to reorganize the Company, elected
Frank A. Martin as its President. Mr. Martin negotiated for the return of the
previously acquired physician practice assets to the physicians in exchange for
the cancellation of any U.S. Medical Alliance capital stock or notes associated
with those acquisitions. We then changed the Company's name to I-Trax.com, Inc.
on August 27, 1999.
On September 3, 1999, we entered into a Software and Proprietary
Product Corporate License Agreement with Member-Link Systems, Inc., a health
information technology company. The license agreement gave us the exclusive
right to use certain software in an immunization tracking system (which we call
I-Trax(TM)), and to develop an application allowing, among other parties, public
and private health systems to track immunizations over the Internet.
Concurrently with entering into the license agreement, the parties also entered
into a technical services agreement, related to the technology licensed pursuant
to the license agreement, and a management services agreement, related to the
management and implementation of our business plan. As consideration for these
agreements, we issued 3,000,000 shares of our Common Stock to Member-Link and an
aggregate of 2,000,000 shares of our Common Stock to certain executive officers
of Member-Link.
Effective as of December 30, 1999, Member-Link merged with and into
us pursuant to a Merger Agreement dated as of December 14, 1999. In the merger,
each of the 1,809,686 outstanding shares of Common Stock of Member-Link was
converted into a right to receive 4.4207 shares of our Common Stock. An
aggregate of 8,000,082 shares of our Common Stock was issued in the merger. The
3,000,000 shares of our Common Stock held of record by Member-Link at the time
of the merger were canceled. As a further consequence of the merger, each of the
license agreement, the technical services agreement and management services
agreement were canceled.
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On February 20, 2000, we completed the sale of 1,830,000 shares of
Common Stock at a price of $1.00 per share in a series of closings pursuant to a
private placement. The entire net proceeds of the sale (approximately
$1,780,000) are being used for working capital.
As of April 4, 2000 the Company had 17,858,084 outstanding shares of
Common Stock.
Overview/Background
Our discussion in this registration statement describes the combined
businesses of our Company with that of Member-Link. All references in this
registration statement to "we", "us", "I-Trax.com", "our Company", or "the
Company", unless expressed otherwise, include the combined businesses of our
Company and Member-Link as in effect as of December 30, 1999.
Our Company is a medical information systems and eHealth organization
that is building an Internet portal focused on providing a secure and
confidential repository of clinical health information to public health
agencies, private health organizations, health care providers, and the public at
large. The Company's technology, which is already deployed in non-Internet
applications, provides a platform for collecting certain disease specific data
at the point of care, offers a secure and confidential repository of clinical
health information, which is fully accessible with proper authorization by any
branch of the health care community, and is well positioned to offer commerce
opportunities in an interactive setting. We are developing a series of
proprietary data management applications, that we will make available over the
Internet.
The initial Internet application will be a version of our
immunization tracking system (I-Trax(TM)). A version of I-Trax(TM) was first
installed at the Walter Reed Army Medical Center in Washington, DC in January
1997 to maintain military immunization records. The Internet version of
I-Trax(TM) will give public health agencies and private health organizations,
the ability to create online immunization records that can be accessed over the
Internet by parents, schools, primary care, and other health providers.
Our second Internet application is an asthma and respiratory disease
management system (AsthmaWatch(TM)), developed in conjunction with The
University of Southern California Los Angeles County Medical Center and The
Asthma and Allergy Foundation of America. This application institutes team
asthma care management by combining the collective expertise of specialists,
nurses, care managers, acute and primary care providers and pharmacists, and
providing up to the minute disease and patient information. An application of
AsthmaWatch(TM) has proven to be an integral part of aggressive asthma programs
such as Breathmobile(TM) projects which are underway across the nation and
leading the attack on inner- city pediatric asthma.
Research and development activities involve adding new
functionalities to existing products and developing new disease management
modules for the most difficult to manage diseases. Current work includes
development of C-Trax, a sophisticated cardiovascular disease management module
and development of a complete patient encounter module.
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The Market
We believe that the market for these disease management and medical
information services is currently very large and is expected to continue to
increase. There is a growing recognition throughout the health care community of
the need for coordinated medical care for the following reasons:
o There is a growing demand in the United States for immunization
registries in both public and private health care sectors to track
and report the immunizations administered to children and adults.
Managed care plans are looking to registries to assist in their
meeting the quality measures of Health Plan Employer Data and
Information Set (HEDIS) and the accreditation requirements of the
National Committee for Quality Assurance (NCQA). Many health care
experts believe that utilization of immunization registries will
provide health system cost savings and increased vaccine safety.
o The incidence and severity of asthma is reaching epidemic
proportions, particularly in highly populated American cities. The
Health Journal (Wall Street Journal) reported on December 3, 1999
that, "Asthma has tripled since 1980 for children under age five."
We believe that effective asthma management requires the ability to
connect health care providers at every level of specialty, with
schools, pharmacies, and community health centers. AsthmaWatch(TM)
enables such networking and care coordination.
The Company's first two Internet applications will, in essence, create
integrated models of care through their unique data repositories that are fully
accessible to all branches of the health care community - providers, hospitals,
health plans, pharmacies, consumers and government agencies. The benefits of
such a system include both quality and cost advantages.
We believe that current software technologies for managing medical
data are outdated, cumbersome to use, and extremely expensive. In the case of
immunization registries, many software products are non-compliant with the data
elements required by the current Center for Disease Control requirements. The
Internet is likely to be the preferred methodology for the healthcare community
to access easily software data management systems with the desired
functionality.
Our software applications are built on a proprietary, intelligent
software architecture, Medicive Enterprise Database(R). The Medicive Enterprise
Database(R) is designed to receive information for both the most complex and the
simplest tasks encountered in a medical setting. It currently contains over
2,000 standard data entries containing in excess of 1,000,000 data elements. A
key feature of the system is the architecture's ability to accept new and
critical data elements, which is important for an industry experiencing rapid
advances in clinical and laboratory research, as well as changes in treatment
protocols. We believe the technology is "user-friendly" and personalized because
it was developed by a team of health care providers, technology experts, and 3rd
party users. At the point of care, our products collect data such as
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demographics and staff and physician assessments, and allow the user to view a
record over time, call it up in graphical display, generate reports, and make
quick comparisons in easy-to-read formats. The clinical encounter tracking
feature not only gives the provider a view of the progress of treatments and
factors that contribute to a particular disease but also provides a
comprehensive picture of the management of the disease and the treatment
outcome. We believe that comprehensive, accessible information of this type
supports successful health care delivery. Overall, we believe our technology
promotes user interaction, facilitates decision- making and supports health care
management. And we believe that these advantages will enable our products to be
accepted as an enterprise-wide solution.
We are beginning to track the cost savings and efficiencies which we
believe are realized though use of our software. We recently completed a study
of immunization tracking in one of the largest public health care systems in the
United States. The report revealed that three of 30 community health centers
covered by the study deliver some 3,000 vaccines per month. Further, the study
found that the health provider responsible for delivering the vaccinations must
complete mandatory paperwork each month to satisfy the requirements set forth by
the existing immunization program. This process requires a health provider in
each department of each facility to complete 2 hours of paperwork a week. This
equates to approximately 289 hours of work per week, by governmental health care
professionals, creating a total of 15,043 hours per year for paperwork. The
I-Trax.com system can effectively produce one central report covering the
activities for all facilities with one person 3 hours per week. A saving of
14,887 employee hours per year would be realized by this system. These hours can
then be converted into time delivering health care.
Furthermore, the study discovered that each vaccine encounter takes
approximately 30 minutes per patient. There are approximately 19,800 patient
vaccination encounters in this study population per year, equating to 9,900
employee hours. I-Trax.com has proven in existing installations that the entire
vaccine encounter can be reduced to 10 to 15 minutes, which reduces total
delivery times by half and produces an additional 4000(+) employee hours
savings.
Patient Encounters: Employee Hours for Current Approach vs. I-Trax(TM)Approach
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Current Process I-Trax.com Approach
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Time/Patient Encounter 30 minutes 10-15 minutes
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# of Patient Encounters 19,800 19,800
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Total Hours/Year 9,900 4,125
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Represents 3 of 30 community health centers in one of the largest
counties in the United States.
Data on cost savings, efficiencies and improved care is currently
being collected by the AsthmaWatch(TM) system and being analyzed by medical
professionals currently using the system. This data should be available shortly.
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Strategy
When our Internet applications are operational, we intend to charge
fees on a per user basis. We also intend to create virtual communities around
our online record/disease management systems between parents, schools, doctors,
public health agencies, hospitals and other health care providers. We further
plan to develop children and adult health information and referral resources, as
well as marketing services for companies selling relevant health care products,
educational products and other goods and services. We believe that the user's
ability to use and benefit from the secure database through the convenience and
utility of the Internet, will foster long-term advertising and promotional
relationships, licensing fees, business-to-business and as well as
business-to-consumer e-commerce. I-Trax(TM) immunization record management
system will be the first application using this model. We will follow a similar
business model for AsthmaWatch(TM), initially focusing marketing efforts on
larger public health agencies, academic medical centers and major health care
systems along with networks of specialist doctors and pediatricians.
We believe that I-Trax.com is one of the first companies to target
immunization, healthcare and disease management online applications. We believe
that our competitive advantages are the clinician-developed, high quality,
proprietary interfaces which are combined with a flexible and expandable
database system.
In the future we intend to develop new disease management
applications for difficult to manage diseases, as well as to provide additional
functionality and modifications to currently available software. Included will
be support for new government and industry standards, such as those set forth in
the Health Insurance Portability and Accountability Act of 1996 and any further
requirements from the National Centers for Disease Control. There is no
assurance that we can successfully do so.
The Company believes that there will be strong advantages to be the
first entrant in the market for these products. As such, we believe it will be
possible for us to become the preferred Application Service Provider in
particular communities, thus establishing ourselves as the dominant leader in
such communities. We believe that our potential success factors include offering
high quality software applications, secure and expandable databases and a high
level of service quality. Our primary goal in providing many interface and
service options such that I- Trax.com software is easy to use and so that there
would be minimal impediments to health care providers using our products.
Greater compliance in reporting and tracking immunizations and managing the
health of asthmatics will be made possible by I-Trax.com.
We believe industry partnerships can play a central role in our
business strategy by providing access to key relationships, established customer
bases, value-added content, and specific knowledge. Possible partners include
eHealth web sites, pharmaceutical companies, and managed care organizations,
research institutions and hospitals. I-Trax.com's partnerships will enable it to
effectively launch multiple disease specific portals that draw upon existing
market share and brand name recognition. At this time we have not initiated any
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substantive negotiations with any such possible partners and there is no
assurance that once we do so that we will be able to enter into agreements with
such possible partners.
The I-Trax.com Web Site
The I-Trax.com web site is currently available as an informational
site offering product descriptions and demonstrations. We just begun the
development of our first Internet application, the I-Trax(TM) immunization
registry. When it is available, physicians who have subscribed to the software
will be given access to the application. Other modules will be added to our web
site at later dates. As of the date hereof, we have not established a pricing
model for our products.
The Company intends to provide space on its web site for sponsorship by
pharmaceutical manufacturers, corporate and institutional supporters. The
Company believes that this will lead to reciprocal opportunities for advertising
on other Internet websites.
At this time, the Company does not intend to engage in Internet
advertising in the form of banner ads.
Customer Service
Historically, Member-Link had been known for its high level of customer
service and satisfaction. I-Trax.com enjoys a high rate of new business referral
from satisfied customers as well as a healthy rate of return business from its
existing customer base. I-Trax.com intends to continue this high level of
customer service, as it is a key factor for its success in this market space.
Management has recently implemented a staffing plan in advance of growth to
assure that premier standards in customer service are met.
Competition
Many companies are operating in a segment of our market space. We
believe our focus on building disease-specific, coordinated-care applications,
intended to operate in conjunction with health care providers, is unique and we
are not aware of any direct competitors in this market segment. We, however,
consider the following to be our competition:
o Healthcare portals including: Business to Business (B to B): e.g.,
Medscape/Medicalogic, Healtheon/Careinsite and Business to Consumer
(B to C): e.g., Healtheon/WebMD, iVillage. (Although we view many
firms in this category as competitors they are also likely to be
strategic partners.)
o Disease management companies and electronic medical record
companies. E.g. H2I, Wellmed, BreathAmerica.
o Established providers of existing, health care information
technology. These firms have competencies in hospital information
systems but also offer general electronic medical records, practice
management systems, clinical data repositories, hospital info
systems, accounting systems. E.g. Cerner Corporation, SMS, McKesson
HBOC.
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Intellectual Property
The Company's proprietary software for the structure, integration and
access to its databases is registered under United States copyright laws, and
the Company's graphic user interfaces (screens) are similarly protected. The
Company has registered the use of certain of its tradenames and service names in
the United States. The Company also has the rights to several Internet domain
names, including I-Trax.com and I-Trax.net; Asthma-Watch.com and
Asthma-Watch.net; Member-Link.com; eImmune.com and eImmune.net; and
MedicalRecordsDept.com. In addition, the Company is currently exploring the
potential availability of patent protection for its business processes and
innovations.
Employees
The Company believes its success depends to a significant extent on its
ability to attract, motivate and retain highly skilled vision-oriented
management and employees. To this end, the Company focuses on incentive programs
for its employees and endeavors to create a corporate culture which is
challenging, rewarding and fun. As of March 1, 2000, the Company had 12
full-time employees and 2 part-time employees and considers its employee
relations satisfactory.
Research and Development
We conduct research and development on three levels on a continuing
basis. First, the Company continually studies the business process in the
medical community. A pivotal part of the success of our products is
understanding the exact needs of our customers, and applying that knowledge to
the graphic user interface, thus allowing our systems to integrate into the
user's workflow without disruption. The Company was founded on this principle.
We are constantly studying the changing work environment and clinical landscape
of our customers and the industry as a whole. New disease modules, such as the
C-Trax cardiovascular module, are under development and modifications and
additional functionality will continue to be added to currently available
software applications.
Second, as a by-product of the business process study, the invention
and development of unique problem solving tools embedded in our software make
possible the process of entering and retrieving vast amounts of information in
short periods of time. Constant development, re-engineering and implementation
of these tools is a priority of the design and engineering staff and will
continue to be a focus of the Company, allowing us to maintain a leading role in
information systems development.
Third, further technology platform research, development and
engineering is conducted on a continual basis. New technologies, such as the
Internet and the commercial software that support it, lack certain capabilities
and functionalities required to allow the medical and health care industry to
migrate to a total eHealth strategy. We believe we are in the process of
creating software components to solve these problems and are constantly
educating ourselves on available and emerging technologies that will help
support and enhance our products.
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Risk Factors
An investment in our Common Stock is very risky. You should carefully
consider the following risk factors in addition to the other available
information about the Company before purchasing our Common Stock. Each of the
following risks could have a material adverse effect on our business, financial
condition or operating results. In such a case, the trading price of our Common
Stock would probably decline, and you may lose all or part of your investment.
Our Extremely Limited Operating Experience May Cause Us to Misjudge our Markets
or Needs
Although we have been in existence since 1969, our involvement in
software development and marketing has been a much more recent development. Our
initial enterprise software application has been operational for less than two
years and we are just preparing to launch our Internet operations. Accordingly,
we have an extremely limited operating history in our current business. An
investor in our Common Stock must consider the risks, uncertainties, expenses
and difficulties frequently encountered by companies in their early stages of
development.
We May Be Unable to Implement Our Business Strategy
Although we believe our strategy can be successful, there are many
reasons why we may be unable to implement it, including our possible inability
to:
o deploy I-Trax(TM), AsthmaWatch(TM)and other potential products on a
large scale due to software development or other problems;
o attract a sufficiently large audience of users to our
Internet-based healthcare information network;
o increase awareness of our brand;
o strengthen user loyalty;
o develop and improve our product;
o continue to develop and upgrade our technology; and
o attract, retain and motivate qualified personnel.
We Have a History of Operating Losses and Anticipate We Will Incur Continued
Losses for the Foreseeable Future and Therefore May Eventually be Unable to
Continue Our Operations
We have had substantial operating losses since incorporation in May
1969, and we have never earned a profit. As of December 31, 1999, our
accumulated deficit was approximately $646,000. Moreover, We expect that our
operating losses will continue for the foreseeable future. Our future
profitability depends, in part, on:
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o the success of our product development efforts;
o the acceptance of our business model by our targeted customers;
o our sales and marketing activities.
The success of our business model depends upon consumers, such as
parents, schools, doctors, public health agencies, hospitals, health plans and
other health care providers being attracted to and using health care information
and related proprietary content which we expect to make available on our
Internet-based health care network for a fee. This business model is not yet
proven, and we cannot assure you that we will ever achieve or sustain
profitability or that our operating losses will not increase in the future.
There is substantial uncertainty as to our ability to continue as a going
concern due to our historical negative cash flow and because we may not have
access to sufficient committed capital to meet our projected operating needs for
at least the next twelve months.
Our Capital Resources May Be Insufficient to Fund Implementation of Our System
and Marketing Its Advantages to Potential Users
Substantial funds are required to complete our planned product
development efforts and expand our sales and marketing activities. We expect
that our existing capital resources, will be adequate to fund our operations
through the third quarter of 2000, but we cannot guarantee that this will be the
case.
Our future capital requirements and the adequacy of available funds
will depend on numerous factors, including:
o the successful commercialization of our existing products;
o progress in our product development efforts;
o the growth and success of effective sales and marketing activities;
and
o the cost of filing, prosecuting, defending and enforcing intellectual
property rights;
If funds generated from our operations, together with our existing
capital resources and the proceeds of this offering, are insufficient to meet
current or planned operating requirements, we will have to obtain additional
funds through equity or debt financing, strategic alliances with corporate
partners and others, or through other sources. We do not have any committed
sources of additional financing, and we cannot provide assurance that additional
funding, if necessary, will be available on acceptable terms, if at all. If
adequate funds are not available, we may have to delay, scale-back or eliminate
certain aspects of our operations or attempt to obtain funds through
arrangements with collaborative partners or others. This may result in the
relinquishment of our rights to certain of our technologies, products or
potential markets. Therefore, the inability to obtain adequate funds could have
a material adverse impact on our business, financial condition and results of
operations.
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Our Products May Not be Accepted by the Market
To date, consumers have generally looked to health care professionals
as their principal source for health and wellness information. In turn, these
professionals are not accustomed to our system. The success of our business
model will depend on public health agencies, parents, schools, primary care
providers and other health professionals and other consumers being attracted to
and using the health care information for a fee. This business model is not yet
proven, and we cannot assure you that it will be successful or, if so, that our
Company will be able to successfully implement this business model in this
market.
We Have Limited Sales and Marketing Experience
Once our Internet application is operational, a major thrust of our
strategy will be to make potential users aware of its existence and
functionalities. This will require sales and marketing expertise. However, our
current employees have limited sales and marketing experience. Although we
intend to identify and recruit employees with sales and marketing experience, we
may be unable to do so and may therefore be unable to successfully establish and
maintain a significant sales and marketing organization.
We Are Dependent on Our Ability to Recruit and Retain Skilled Employees
Our future success depends to a significant extent on our ability to
attract, retain and motivate highly skilled employees. As we implement our
products, we will need to hire additional personnel in all operational areas.
Competition for personnel throughout the Internet and related new-media industry
is intense. We may be unable to retain our key employees or attract, assimilate
or retain other highly qualified employees in the future. We have from time to
time in the past experienced, and we expect to continue to experience in the
future, difficulty in hiring and retaining highly skilled employees with
appropriate qualifications. If we do not succeed in attracting new personnel or
retaining and motivating our current personnel, our business will be adversely
affected.
We May Be Unable to Compete Successfully Against Companies Offering Other,
Similar Functions
A large number of Internet companies compete for users, advertisers,
e-commerce transactions and other sources of on-line revenue. The number of
Internet websites offering users health care content, products and services is
vast and increasing at a rapid rate. In addition, traditional media and health
care providers compete for consumers' attention both through traditional means
as well as through new Internet initiatives. We believe that competition for
healthcare consumers will continue to increase as the Internet develops as a
communication and commercial medium. Although we believe our products are
unique, we compete directly and indirectly for subscribers, syndication partners
and other affiliates with numerous Internet and non-Internet businesses,
including:
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o health-related on-line services or websites targeted at consumers,
such as accesshealth.com, ahn.com, betterhealth.com, drkoop.com,
drweil.com, healthcentral.com, healthgate.com, intelihealth.com,
mayohealth.org; mediconsult.com, onhealth.com, thriveonline.com and
webmd.com;
o on-line and Internet portal companies, such as America Online, Inc.;
Microsoft Network; Yahoo! Inc.; Excite, Inc.; Lycos Corporation and
Infoseek Corporation;
o electronic merchants and conventional retailers that provide
healthcare goods and services competitive to those available from
links on our website;
o hospitals, HMOs, managed care organizations, insurance companies and
other healthcare providers and payors which offer healthcare
information through the Internet; and
o other consumer affinity groups, such as the American Association of
Retired Persons, SeniorNet and ThirdAge Media, Inc. which offer
healthcare-related content to special demographic groups.
Many of these potential competitors are likely to enjoy substantial
competitive advantages compared to our Company, including:
o the ability to offer a wider array of on-line products and services;
o larger production and technical staffs; o greater name recognition
and larger marketing budgets and resources; o larger customer and
user bases; and o substantially greater financial, technical and
other resources.
To be competitive, we must respond promptly and effectively to the
challenges of technological change, evolving standards and our competitors'
innovations by continuing to enhance our products and services, as well as our
sales and marketing channels. Increased competition could result in loss of
market share, reduced prices or reduced margins, any of which could adversely
affect our business. Competition is likely to increase significantly as new
companies enter the market and current competitors expand their services.
Government Regulation Could Adversely Affect Our Business
Our business is subject to government regulation. Laws and regulations
have been or may be adopted with respect to the Internet or other on-line
services covering issues such as:
o user libel and personal privacy;
o the regulation of medical devices;
o the practice of medicine and pharmacology;
o the regulation of government and third-party cost reimbursement;
o copyright protection;
o distribution; and
o characteristics and quality of products and services.
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The applicability to the Internet of existing laws in various
jurisdictions governing issues is uncertain and may take years to resolve.
Demand for our content, features and services may be affected by additional
regulation of the Internet. Although our transmissions have not yet been
initiated, once initiated, the governments of other states or foreign countries
may attempt to regulate our transmissions, levy sales or other taxes relating to
our activities or impose other restrictions on our content or services. The laws
governing the Internet, however, remain largely unsettled, even in areas where
there has been some legislative action. In addition, the growth and development
of the market for Internet commerce may prompt the adoption of more stringent
consumer protection laws, both in the United States and abroad, that impose
additional burdens on companies conducting business over the Internet. The
requirement that we comply with any new legislation or regulation, or any
unanticipated application or interpretation of existing laws, may decrease the
demand for our services, increase our cost of doing business or otherwise have a
material adverse effect on our business, results of operations and financial
condition.
Furthermore, the practice of medicine and pharmacology requires
licensing under applicable State law. We will endeavor to structure our website,
programs and affiliate relationships to avoid violation of State licensing
requirements, and specifically warn against and disclaim such practice, but a
state regulatory authority may at some point allege that some portion of our
business violates these statutes. Any such allegation could result in a material
adverse effect on our business, results of operations and financial condition.
Further, any liability based on a determination that we engaged in the practice
of medicine without a license may be excluded from coverage under the terms of
our present general liability insurance policy.
The Federal Trade Commission and state governmental bodies have
recently investigated the disclosure of personal identifying information
obtained from individuals by Internet companies. Legislative proposals have also
been made by the Federal government in this area, specifically relating to the
use and ownership of patient medical information. Although we believe that our
current use of patient medical information complies with all applicable rules
and regulations, in the event the Federal Trade Commission or other governmental
authorities adopt or modify laws or regulations relating to the Internet, it is
possible that the dissemination of our products may be curtailed. If this
occurs, our business, results of operations and financial condition could be
adversely affected.
A number of legislative proposals have been made at the Federal, state
and local level, and by certain foreign governments, that would impose
additional taxes on the sale of goods and services over the Internet or
Internet-related activities. Such legislation or other attempts at regulating
commerce over the Internet may substantially impair the growth of commerce on
the Internet and, as a result, adversely affect our opportunity to derive
financial benefit from such activities.
Some computer applications and software are considered medical devices
and are subject to regulation by the United States Food and Drug Administration
(the "FDA"). We do not believe that any of our proposed applications or services
will be regulated by the FDA; however, our proposed applications and services
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<PAGE>
may become subject to FDA regulation. Additionally, we may expand our
application and service offerings into areas that subject us to FDA regulation.
We have no experience in complying with FDA regulations. We believe that
complying with FDA regulations would be time consuming, burdensome and expensive
and could delay or prevent our introduction of our applications or services.
Our Prior Line of Business May Lead to Liabilities; We May be Exposed to
Uninsured Liability Claims
As U.S. Medical Alliance, we were engaged in the physician practice
management business. While we are no longer engaged in that business, the
Company may be subject to unknown liabilities arising from such prior business
operations, which may have a material adverse effect on our business,
operations, financial condition, or prospects.
In addition, during 1998, several judgments were entered against U.S.
Medical Alliance, the predecessor to the Company, relating among other things,
to the Company's prior line of business of managing physician practices. The
allegations made in the underlying suits relate to wrongful discharge, general
breach of contract, breach of equipment lease agreements and miscellaneous
vendor claims. The aggregate amount of such judgments entered against the
Company and certain associated physicians is approximately $600,000. None of the
plaintiffs in the underlying suits has attempted to collect on the judgments.
While it remains unclear whether the Company can successfully satisfy the
judgments in a favorable manner, based on a reasoned opinion issued by the
Company's special counsel retained to resolve these matters, the Company has
accrued, as of December 31, 1999, approximately $22,500, with a related charge
to operations, as a reserve for satisfying such judgments.
Prior to the merger with us, Member-Link was engaged in the business
of marketing, selling and installing certain software products, including
I-Trax(TM) AsthmaWatch(TM). Since beginning its operations in 1996 until March
15, 2000, we did so without obtaining product or professional liability
insurance. Accordingly, in the event any customer of Member-Link and of I-Trax,
as a successor-in-interest to Member-Link, should in the future claim that the
software Member-Link sold prior to the merger was defective and allege related
damages, we would not have the protection of insurance in satisfying such claims
if such claims are deemed meritorious. Any such claims could have a material
adverse effect on our business, results of operations, financial condition and
prospects.
Consumers may sue us if any of the products or services that are sold
through our website are defective, fail to perform properly or injure the user,
even if such goods and services are provided by unrelated third parties. Even
though we currently have product liability insurance, liability claims could
require us to spend significant time and money in litigation, to pay significant
damages and to reserve for such liability on our financial statements. As a
result, any such claims, whether or not successful, could seriously damage our
reputation and our business, results of operations or financial position.
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There is no Established Market for Consumer Healthcare E-commerce Transactions
We plan to develop relationships with parents, schools, doctors, public
health agencies, hospitals and other health care providers to offer our products
and services. Such a strategy involves numerous risks and uncertainties. There
is no established business model for the sale of health care products or
services over the Internet. Accordingly, we cannot predict whether parents,
schools, doctors, public health agencies, hospitals and other health care
providers will elect to purchase our services and information.
The Internet Capacity Constraints May Inhibit Our Success
Our success will depend, in large part, on Internet access and the
ability of the Internet to accommodate rapidly increasing traffic. The Internet
may not prove to be a viable commercial medium because of inadequate development
of the necessary infrastructure (e.g., reliable network backbone), timely
development of complementary products (e.g., high speed modems), delays in the
development or adoption of new standards and protocols required to handle
increased levels of Internet activity, or increased government regulation. If
the Internet continues to experience significant growth in the number of users
and the level of use, then the Internet infrastructure may not be able to
continue to support the demands placed on it.
We Face Risks Related to Systems Operation
We rely on the Internet and, accordingly, depend upon the continuous,
reliable and secure operation of Internet servers and related hardware and
software. Recently, several large internet commerce companies have suffered
highly publicized system failures which resulted in adverse reactions to their
stock prices, significant negative publicity and, in certain instances,
litigation. It is likely that we will also suffer service outages from time to
time. To the extent that our service is interrupted, our users will be
inconvenienced and our reputation may be diminished. If access to our system
becomes unavailable at a critical time, users could allege we are liable as a
result. Some of these outcomes could directly result in a reduction in our stock
price, significant negative publicity and litigation. Although we anticipate
that our computer and communications hardware will be protected through physical
and software safeguards, they will still be vulnerable to fire, storm, flood,
power loss, telecommunications failures, physical or software break-ins and
similar events. We will not have full redundancy for all of our computer and
telecommunications facilities. A catastrophic event could have a significant
negative effect on our business, results of operations, and financial condition.
We will also depend upon third parties to provide potential users with web
browsers and Internet and on-line services necessary for access to our website.
It is possible that our users will experience difficulties with Internet and
other on-line services due to system failures, including failures unrelated to
our systems. Any sustained disruption in Internet access provided by third
parties could have a material adverse effect on our business, results of
operations and financial condition. We also intend to retain confidential
customer information in our database. It is, therefore, critical that our
facilities and infrastructure remain secure and that our facilities and
infrastructure are perceived by consumers to be secure. Despite the
implementation of measures in the Internet industry, our infrastructure is
likely to be vulnerable to physical break-ins, computer viruses, programming
errors or similar disruptive problems. A material security breach could damage
our reputation or result in liability to us.
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<PAGE>
Our Platform Infrastructure and its Scalability Are Not Proven
We have not yet implemented our Internet based products. When we do, if
the system is used by an increasing number of users, we would need to expand our
network infrastructure from time to time. In addition we will need to
accommodate changing consumer and customer requirements. We may not be able to
accurately project the rate or timing of increases, if any, in the use of our
website or to expand and upgrade our systems and infrastructure to accommodate
such changes on a timely basis, at a commercially reasonable cost, or at all.
Our systems may not accommodate increased use while maintaining acceptable
overall performance. Service lapses could cause our users to instead use the
on-line services of our competitors.
We May Have Liability for Information Retrieved From the Web
Because users of our website will access health content and services
relating to a condition they may have or may distribute our content to others,
third parties may sue us for defamation, negligence, copyright or trademark
infringement, personal injury or other matters. We could also become liable if
confidential information is disclosed inappropriately. These types of claims
have been brought, sometimes successfully, against on-line services in the past.
Others could also sue us for the content and services that will be accessible
from our website through links to other websites or through content and
materials that may be posted by our users in chat rooms or bulletin boards. Any
such liability will have a material adverse effect on our reputation and our
business, results of operations or financial position.
We Depend on Our Intellectual Property Rights
Our intellectual property is important to our business. We rely on a
combination of copyright, trademark and trade secret laws, confidentiality
procedures and contractual provisions to protect our intellectual property. Our
efforts to protect our intellectual property may not be adequate. Our
competitors may independently develop similar technology or duplicate our
products or services. Unauthorized parties may infringe upon or misappropriate
our products, services or proprietary information. In addition, the laws of some
foreign countries do not protect proprietary rights as well as the laws of the
United States, and the global nature of the Internet makes it difficult to
control the ultimate destination of our products and services. In the future,
litigation may be necessary to enforce our intellectual property rights or to
determine the validity and scope of the proprietary rights of others. Any such
litigation could be time-consuming and costly. We could be subject to
intellectual property infringement claims as the number of our competitors grows
and the content and functionality of our website overlaps with competitive
offerings. Defending against these claims, even if not meritorious, could be
expensive and divert our attention from operating our company. If we become
liable to third parties for infringing their intellectual property rights, we
could be required to pay a substantial damage award and forced to develop
noninfringing technology, obtain a license or cease selling the applications
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<PAGE>
that contain the infringing technology. We may be unable to develop
noninfringing technology or obtain a license on commercially reasonable terms,
or at all. We also intend to rely on a variety of technologies that we will
license from third parties, including any database and Internet server software,
which will be used to operate our future website to perform key functions. These
third-party licenses may not be available to us on commercially reasonable
terms. The loss of or inability to originating and maintaining any of these
licenses could delay the introduction of software enhancements, interactive
tools and other features until equivalent technology could be licensed or
developed. Any such delays could materially adversely affect the company's
business, results of operations and financial condition.
Anti-takeover Considerations
Our Board of Directors has the authority, without further action by the
stockholders, to issue from time to time, up to 2,000,000 shares of preferred
stock in one or more classes or series, and to fix the rights and preferences of
such preferred stock. We are subject to provisions of Delaware corporate law
which, subject to certain exceptions, will prohibit us from engaging in any
"business combination" with a person who, together with affiliates and
associates, owns 15% or more of our common stock (referred to as an interested
stockholder) for a period of three years following the date that such person
became an interested stockholder, unless the business combination is approved in
a prescribed manner. Additionally, our Bylaws establish an advance notice
procedure for stockholder proposals and for nominating candidates for election
as directors. These provisions of Delaware law and of our Certificate of
Incorporation and Bylaws may have the effect of delaying, deterring or
preventing a change in our control, may discourage bids for our common stock at
a premium over market price and may adversely affect the market price, and the
voting and other rights of the holders, of our common stock.
Our Officers Have Effective Control of the Company and Other Stockholders May
Have Little or No Voice in Corporate Management
Our Chairman and President (together with the venture capital firm with
which our Chairman is affiliated) beneficially own an aggregate of approximately
40.4% of our outstanding shares of Common Stock. As a result, these
stockholders, acting together, effectively control the election of directors and
matters requiring approval by our stockholders. Thus, they may be able to
prevent corporate transactions such as future mergers which might be favorable
from our standpoint or the standpoint of the other stockholders.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Basis of Presentation
The following discussion of the financial condition and related results
of operations of the Company should be reviewed in conjunction with the
financial statements of the Company. The Company believes that the merger of
Member-Link into the Company effective as of December 30, 1999 will have
substantial impact on its future operating results.
Introduction
During 1997, the Company, formerly known as US Medical Alliance, Inc.,
ceased doing its business activities as a physician practice management company
and embarked on a program of winding down such activities, returning physician
practice assets to physicians in exchange for cancellation of stock in the
Company issued for such assets, and settling its obligations. During 1998, the
Company had no operations. In August, 1999, six principal stockholders of the
Company purchased 4,000,000 shares of the Company's Common Stock for $400,000 to
raise working capital which enabled the Company to enter into a license
agreement, a technical services agreement and a management services agreement
with Member-Link, a health information technology company, to own and develop
the Internet application of an immunization tracking system known as "I-Trax."
As consideration for these agreements, I- Trax.com issued to Member-Link
3,000,000 shares of its Common Stock and to certain executive officers of
Member-Link an aggregate of 2,000,000 shares of I-Trax.com Common Stock. The
Company also changed its name to "I-Trax.com, Inc." on August 27, 1999.
Effective as of December 30, 1999, Member-Link merged with and into
I-Trax.com pursuant to a Merger Agreement dated as of December 14, 1999. In the
merger, each of the 1,809,686 outstanding shares of Common Stock of Member-Link
was converted into a right to receive 4.4207 shares of I-Trax.com Common Stock.
An aggregate of 8,000,082 shares of I-Trax.com Common Stock was issued in the
merger. Furthermore, 3,000,000 shares of I-Trax.com Common Stock held of record
by Member-Link were canceled. As a further consequence of the merger, each of
the license agreement, the technical services agreement and management services
agreement between I-Trax.com and Member-Link were canceled.
Overview
The Company has historically developed enterprise or client server
applications for collecting disease specific data at the point of care. The
Company has just begun the development of its Internet applications and no
revenues have been generated from these applications. The Company intends to
increase significantly its expenditures primarily in the areas of product
development, client services, business development, and sales and marketing. As
a result, the Company expects to incur substantial operating losses over the
next twelve months.
The Company's current primary sources of revenues are license fees and
product development fees it charges its customers. In the future, the Company
expects to generate a significant portion of its revenue from subscriptions to
the Company's products delivered over the Internet.
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<PAGE>
Results of Operations
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998.
Total revenues in fiscal year 1999 were $987,533 as compared to $347,800 for
fiscal 1998. Revenues for fiscal 1999 were comprised of $625,209 for the
licensing and development of "C-Trax," the Company's cardiovascular disease
management program for Walter Reed Army Medical Center ("WRAMC"), $87,055 for
"AsthmaWatch" for LA County-USC, Phoenix Children's Hospital, and Mobile Care
Foundation in Chicago, $123,161 for the Medicive Medical Records database for
The Office of Attending Physician, and $52,108 of other revenue from small
subcontracts. Revenues for 1998 consisted of $62,000 from WRAMC for "I-Trax,"
the Company's immunization tracking system, $81,800 for LA County-USC's
"AsthmaWatch," and $204,000 for "C-Trax" from WRAMC.
Cost of Revenue was $374,132 for fiscal 1999 consisting primarily of
hardware and network installations and subcontractors as compared to $149,115
for the same items in fiscal 1998. The increase was due to the increase in
revenue.
Research and development expenses of $186,908 for fiscal 1999 consist
primarily of employee compensation of information systems personnel. There was
no employee compensation for fiscal 1998. Although the Company has expensed its
R&D costs in the past, it will likely capitalize a significant percentage of the
costs associated with the development of its web-based versions of its existing
products in the future.
Selling, general and administrative expenses consist primarily of
compensation for legal, finance, sales, management, travel, rent, telephone and
consulting services. Selling, general and administrative expenses were $997,045
for fiscal 1999 and $125,161 for fiscal 1998. The increase resulted primarily
from increased costs necessary to support the growth of the Company's business
activities. The Company intends to increase the amounts spent in these
categories to support continued growth and expansion in future periods.
Liquidity and Capital Resources
The Company's accumulated deficit of $646,635 from inception has been
funded through capital contributions from the sale of common stock of the
Company. On February 20, 2000, the Company completed a private placement of
1,830,000 shares of its Common Stock at $1.00 per share to fund the next phase
of the Company's planned expansion. The Company believes that these funds,
together with anticipated revenue, will be sufficient to meet the Company's
present business expansion requirements until the end of the third quarter of
2000. Although the Company plans to seek additional capital during that period,
there can be no assurance that such financing will be available on acceptable
terms, if at all.
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<PAGE>
At December 31, 1999, the Company's cash and cash equivalents were
$195,728. The Company's principal source of liquidity is the cash obtained from
the private placement transaction. The Company currently has no available credit
facilities to fund operating cash flow or investment opportunities.
During 1998, several judgments were entered against U.S. Medical
Alliance, the predecessor to the Company, relating among other things, to the
Company's prior line of business of managing physician practices. The
allegations made in the underlying suits relate to wrongful discharge, general
breach of contract, breach of equipment lease agreements and miscellaneous
vendor claims. The aggregate amount of such judgments entered against the
Company and certain associated physicians is approximately $600,000. None of the
plaintiffs in the underlying suits has attempted to collect on the judgments.
While it remains unclear whether the Company can successfully satisfy the
judgments in a favorable manner, based on a reasoned opinion issued by the
Company's special counsel retained to resolve these matters, the Company has
accrued, as of December 31, 1999, approximately $22,500, with a related charge
to operations, as a reserve for satisfying such judgments.
Factors Affecting the Company's Business and Prospects
The Company expects to experience significant fluctuations in its
future quarterly operating results due to a variety of factors, many of which
are outside the Company's control. These issues are discussed more fully in the
Risk Factors section in Item 1 of this Form 10-SB.
Market Risk
The Company has no material interest-bearing assets or liabilities, nor
does the Company have any current exposure for changes in foreign currency
exchange rates. The Company does not use derivatives or other financial
instruments. The Company's financial instruments consist of cash and
receivables. The market values of these financial instruments approximate book
value.
Inflation
The financial statements are presented on a historical cost basis and
do not fully reflect the impact of prior years' inflation. While the U.S.
inflation rate has been modest for several years, inflation issues may impact
the Company's business in the future. The ability to pass on inflation costs is
an uncertainty due to general economic conditions and competitive situations.
Year 2000 Preparation
Software failures due to calculations using Year 2000 dates are a known
risk. Although the most critical date (January 1, 2000) has occurred without
incident in our software, problems with Year 2000 software could nonetheless
result in system failures or miscalculations causing disruptions of operations,
including, among others, a temporary inability to process transactions, send
invoices or engage in similar normal business activities. To date, the Company
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has experienced very few problems related to Year 2000 testing and those
requiring modification have been fixed. The Company does not believe that there
is material exposure to the Year 2000 issue with respect to its electronic
commerce transaction processing and online activity since these systems
correctly define the Year 2000. The Company is nonetheless conducting an
analysis to determine whether others with whom the Company does business have
Year 2000 issues on a continual basis.
The Company has not incurred any material expenses in addressing Year
2000 compliance to date.
Item 3. Description of Properties.
The Company leases approximately 6,455 square feet of office space in
Reston, Virginia pursuant to a lease expiring in October 2004 at a current
annual rate of $161,375. The property is in good condition.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of April 4, 2000, the number of
shares and percentage of the Company's Common Stock beneficially owned by (i)
each person who is known by the Company to own beneficially 5% or more of the
Company's outstanding Common Stock, (ii) each director of the Company, (iii)
each executive officer of the Company and (iv) all executive officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
Percent of
Name of Individual Shares of Common Stock Outstanding
or Identity of Group (1) Beneficially Owned (2) Common Stock
- ------------------------ ---------------------- ------------
<S> <C> <C>
Hans C. Kastensmith.................................. 3,519,534 19.71%
Nantucket Healthcare Ventures I, L.P. (4)............ 2,149,203 12.04
Frank A. Martin (4)(5)............................... 1,550,000 8.68
Melvin B. Siegel (6)................................. 1,050,000 5.88
Joseph E. Shamy (7).................................. 1,067,000 5.97
Greta Shamy (8)...................................... 1,375,000 7.70
David C. McCormack .................................. 782,680 4.38
David R. Bock (4).................................... 500,000 2.78
William S. Wheeler .................................. 50,000 (3)
Dr. Craig Jones .................................... 130,000 (3)
Philip D. Green (9).................................. -- (3)
John R. Palumbo (10)................................. 25,000 (3)
Gary Reiss (11)...................................... 28,000 (3)
Michael O'Connell (12)............................... 100,000 (3)
All executive officers and directors
as a group (10 persons) (13)....................... 8,834,417 49.47
</TABLE>
- ---------------------
(1) The address of each beneficial owner is in care of the Company.
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(2) Under the rules of the Securities and Exchange Commission (the "SEC"), a
person is deemed to be the beneficial owner of securities if he has, or
shares, "voting power" which includes the power to vote, or to direct the
voting of, such securities or "investment power" which includes the power
to dispose, or to direct the disposition, of such securities. Under these
rules, more than one person may be deemed to be the beneficial owner of the
same securities. Securities beneficially owned also include securities
owned jointly, in whole or in part, or individually by the person's spouse,
minor children or other relatives who share the same home or securities
which may be acquired within 60 days from options, warrants, rights,
conversion privileges or similar obligations. The information set forth in
the above table includes all shares of Common Stock over which the named
individuals individually or together share voting power or investment
power, adjusted, however, to eliminate the reporting shares as to which the
named individuals disclaim beneficial ownership.
(3) Less than 1%.
(4) Frank A. Martin and David R. Bock are members and Managing Directors of the
Nantucket Group, LLC, the general partner of Nantucket Healthcare Ventures
I, L.P.
(5) Excludes a total of 35,500 shares held by members of the immediate family
of Mr. Martin, as to which shares Mr. Martin disclaims beneficial
ownership.
(6) Excludes a total of 45,000 shares held by members of the immediate family
of Mr. Siegel, as to which shares Mr. Siegel disclaims beneficial
ownership.
(7) Represents shares owned by Mr. Shamy and Mrs. Shamy, as tenants in common.
Excludes a total of 318,000 other shares held by members of the immediate
family of Mr. Shamy, as to which shares Mr. Shamy disclaims beneficial
ownership.
(8) Represents 1,067,000 shares owned by Mr. Shamy and Mrs. Shamy, as tenants
in common, and 308,000 shares owned by Mrs. Shamy individually. Excludes a
total of 10,000 other shares held by members of the immediate family of
Mrs. Shamy, as to which shares Mrs. Shamy disclaims beneficial ownership.
(9) Excludes options granted to Mr. Green as of March 14, 2000 to acquire
100,000 shares of Common Stock at a price of $1.00 per share, which options
are not exercisable within 60 days of April 4, 2000.
(10) Excludes options granted to Mr. Palumbo as of March 14, 2000 to acquire
100,000 shares of Common Stock at a price of $1.00 per share, which options
are not exercisable within 60 days of April 4, 2000.
(11) Excludes options granted to Mr. Reiss as of February 20, 2000 to acquire
350,000 share of Common Stock at a price of $1.00 per share, which options
are not exercisable within 60 days of April 4, 2000. Also excludes a total
of 4,000 shares held by members of the immediate family of Mr. Reiss, as to
which shares Mr. Reiss disclaims beneficial ownership.
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<PAGE>
(12) Excludes options granted to Dr. O'Connell as of February 20, 2000 to
acquire 100,000 share of Common Stock at a price of $1.00 per share, which
options are not exercisable within 60 days of April 4, 2000.
(13) Calculated in a manner consistent with the prior applicable footnotes.
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Item 5. Directors and Executive Officers.
Certain information as to the directors and executive officers of the
Company is as follows:
Name Age Position
---- --- --------
Frank A. Martin 49 Chairman, Chief Executive
Officer, Treasurer and Director
Hans C. Kastensmith 40 President and Director
David C. McCormack 30 Vice President and Chief
Technology Officer
Dr. Michael O'Connell 40 Chief Medical Officer
Gary Reiss 49 Chief Operating Officer
Dr. Craig Jones 41 Director
David R. Bock 56 Director
William S. Wheeler 43 Director
Philip D. Green 50 Director
John R. Palumbo 49 Director
Frank A. Martin has been a director of I-Trax.com, Inc. since 1996,
President since January 1997 and the Chief Executive Officer and Treasurer since
February 1, 2000. Mr. Martin founded, and has been a Managing Director of, the
Nantucket Group, LLC, a health care venture capital firm specializing in
investing in early stage health care service and technology companies since
December 1998. He is currently also on the Board of Directors of three
companies, including ReCall Services, Inc., Beansprout Networks, Inc. and
EduNeering, Inc. In November of 1992 Mr. Martin founded Physician Dispensing
Systems, Inc. ("PDS"), a health care information technology company that
developed pharmaceutical software for physicians' offices. Mr. Martin assisted
in the sale of PDS to Allscripts Inc. in December of 1996 and joined its Board
of Directors where he remained until 1998.
Hans C. Kastensmith has been the President and one of the directors of
I-Trax.com, Inc. since September 1999. Mr. Kastensmith founded and served as the
Chief Executive Officer of Member-Link since 1992. Mr. Kastensmith is
responsible for bringing the Medicive Medical Enterprise Data System from
concept to reality, playing an active role in the design both of the Medical
Enterprise Database and its various graphic user interfaces and application
modules. He has personally built the Company's present customer base, and
overseen all aspects of the development to date.
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Dr. Michael O'Connell has been the Chief Medical Officer of I-Trax.com,
Inc. since November 1999. In this role, he oversees development of the
I-Trax(TM) database system. He is responsible for intellectual content and
successful compliance with current Center for Disease Control and other national
immunization guidelines. Dr. O'Connell has served as the Assistant Chief of the
Allergy-Immunology Department at Walter Reed Army Medical Center and as a
Co-Consultant to the Army Surgeon General for Allergy & Immunizations since May
1997. He has been intimately involved in the development and deployment of the
I-Trax.com immunization system at Walter Reed, providing the current
immunization data, tables, and guideline/recommendations for incorporation. Dr.
O'Connell has served as a United States Army Medical Officer since 1985 and
offers us excellent leadership skills.
David C. McCormack has been the Chief Technology Officer of I-Trax.com,
Inc. since January 2000. Mr. McCormack was the Vice President, Engineering of
Member-Link since January 1999. In this capacity, he advises software system
developers and integrators on issues related to the analysis, development,
integration and testing of distributed enterprise information systems. Mr.
McCormack has significant software development experience with both Microsoft
Windows and Unix based operating systems. He has developed and deployed systems
with most major programming languages. From April 1997 until January 1999, Mr.
McCormack served as a partner in a Virginia based consulting firm, where he
oversaw all software developed by the firm: an inventory management system, an
EDI transaction processing system and an electronic document management system.
Additionally, from January 1995 until April 1997 Mr. McCormack consulted
Lockheed Martin Mission Systems during its development of the Global
Transportation Network (GTN) for the Air Force. His architectural guidance was
instrumental in successfully fielding multi-terabyte distributed data warehouse
that integrates millions of transportation related transactions daily. Mr.
McCormack has worked for several large defense contractors. His responsibilities
have included the design, development and integration of mission critical
systems for the Army, Navy and Air Force. Mr. McCormack has a current Top Secret
clearance.
Gary Reiss has been the Chief Operating Officer of I-Trax.com, Inc.
since March 1999. In this capacity, he oversees the daily operations of the
Company. Mr. Reiss has over eight years of experience as the chief operating
officer of health and medical information management companies. From 1999 to
March 2000, Mr. Reiss served as the Chief Operating Officer of EduNeering, Inc.,
an electronic knowledge management company, where his responsibilities include
positioning the company as a web provider and portal. From 1995 to 1999, Mr
Reiss served as the Chief Operating Officer of Allscripts, Inc., a one billion
dollar health care information and implementation publicly traded company, where
he was responsible for all operations and implementations. And from 1992 to
1995, Mr. Reiss was an Executive Vice President and Chief Operating Officer of
Physician Dispensing Systems, a company he founded and which was later acquired
by Allscripts, Inc.
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Dr. Craig A. Jones has been a director of I-Trax.com, Inc. since
January 2000. Dr. Jones is currently Director of the Division of Allergy &
Immunology and the Allergy & Immunology Residency Training Program at the Los
Angeles County and University of Southern California Medical Center and an
Assistant Professor of Pediatrics at the University of Southern California
School of Medicine. From November 1996 to present Dr. Jones serves as Director
of the Breathmobile Mobile Asthma Clinic Program, which he developed. The
Company's AsthmaWatch system is currently installed and in use in this
Breathmobile. Based on the clinical impact, the program is serving as a model
for community based preventive healthcare and disease management. From January
1997 to December 1997 Dr. Jones served as President of the Los Angeles Society
of Asthma, Allergy & Immunology. Because of this position, Dr. Jones is widely
respected for his clinical, educational, and managerial commitment to this
public health problem. Currently, he is designing and implementing for the Los
Angeles County Department of Health Services. This program integrates clinical
operations and patient flow in three Breathmobiles serving more than sixty
school sites, County Comprehensive Health Centers, and Pediatric Services at the
LAC+USC Medical Center. He is instrumental in the future development of the
AsthmaWatch application.
William S. Wheeler has been a director of I-Trax.com, Inc. since
September 1999. Mr. Wheeler offers an excellent technology, financial and
customer perspective to the Board of Directors. Mr. Wheeler was a Vice President
at Cable & Wireless USA from June 1989 until February 1999. During this period,
Mr. Wheeler held the positions Vice President & Controller, Senior Vice
President, Finance and acting President, Dial Internet Services. While leading
the Dial Internet Services division, Mr. Wheeler successfully transitioned
300,000 consumer and business dial Internet customers to Cable & Wireless USA
from MCI as a result of Cable & Wireless' acquisition of MCI's Internet
Business. In this capacity, Mr. Wheeler had full responsibility for Marketing,
Finance, a 500-seat Customer Service Center, and all Operational Support Systems
(billing, registration, authentication, etc.). He developed a Marketing and
Financial Plan to increase the customer base and improve profitability in a very
short time frame; and he directed the launch of Cable & Wireless USA's first
Consumer Internet Service (www.cwix.com). The business was later sold to Prodigy
Internet in the 3rd quarter of 1999. In May 1999 Mr. Wheeler co-founded an
Internet Communications business that is being launched in April 2000. Mr.
Wheeler's experience is critical to the development of the I-Trax.com Internet
disease specific applications.
David R. Bock has been a director of I-Trax.com, Inc. since February 1,
2000. Mr. Bock has been a managing partner in Federal City Capital Advisors, LLC
("FCCA"), an investment banking firm located in Washington, D.C. Mr. Bock is
also a Managing Director of the Nantucket Group, LLC. From 1992 to 1995 Mr. Bock
was a Managing Director in the London corporate finance group of Lehman Brothers
and was responsible for developing Lehman Brothers' investment banking business
in a wide range of emerging markets, including India, Russia, Turkey and Central
Europe. Mr. Bock also served in a variety of management positions in the World
Bank, including as chief of staff for the Bank's worldwide lending operations.
From 1995 to 1997, he was President of Maitland-Ruick & Company, a predecessor
firm to FCCA. He was also a partner in a corporate finance boutique focused on
the Mid-Atlantic region of the United States from 1979 to 1982, and an Associate
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with McKinsey & Company in London, Paris and Washington, D.C. from 1970 to 1974.
Mr. Bock has extensive experience in economic policy, capital markets and
corporate strategy across a wide range of sectors, including financial services,
health care, real estate, energy and natural resources.
Philip D. Green, has been our director since March 2000. Mr. Green is a
founding principal of the Washington, D.C. based law firm of Green, Stewart,
Farber & Anderson, P.C., formed in 1989. From 1978 through 1989, Mr. Green was a
partner in the Washington, D.C. based law firm of Schwalb, Donnenfeld, Bray and
Silbert, P.C. Mr. Green practices health care law, and corporate planning and
transactions. Mr. Green represents a significant number of major teaching
hospitals and integrated health care delivery systems. Mr. Green also represents
a number of public and private for-profit health care companies. Mr. Green is
currently a member of the Board of Director of Allscripts, Inc. and Imagyn
Medical Technologies.
John R. Palumbo, has been our director since March 2000. Since 1996,
Mr. Palumbo has served as a Vice President of Shared Medical Systems
Corporation, a worldwide leader of health information solutions serving over
5,000 providers in the United States, Europe and the Pacific Rim. At Shared
Medical, Mr. Palumbo oversaw the start-up of the National Health Services
division, which markets to and services the for-profit and not-for profit
national health systems, such as for example Tenant and UHS, and now has
responsibility for National Health and Western Operations. From 1995 to 1996,
Mr. Palumbo served as an Executive Vice President and Chief Operating Officer of
Allscipts, Inc. From 1990 to 1995, Mr. Palumbo was the Executive Vice President
of Healthworks Alliance, Inc., a company he founded specializing in point of
care technology and reengineering services allowing physicians to process
patients through the healthcare delivery system.
The Company's Board of Directors has an Audit Committee, consisting of
Messrs. Wheeler and Jones. The Audit Committee has responsibility for
recommending to the Board of Directors the selection of independent auditors,
reviewing the scope and results of the audit and reviewing the adequacy of the
Company's accounting, financial, internal and operating controls.
The Company's Board of Directors has a Compensation Committee,
consisting of Mr. Bock and Dr. Jones. The Compensation Committee has
responsibility for considering personnel and compensation matters relating to
the executive officers of the Company and for administering the Company's 2000
Equity Compensation Plan.
All directors hold office until their respective successors are
elected, or until death, resignation or removal. Officers serve at the
discretion of the Board of Directors. There are no family relationships between
any directors or executive officers of the Company.
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Item 6. Executive Compensation.
Executive Compensation.
I-Trax.com
Frank A. Martin, Chairman, Chief Executive Officer and Treasurer of
I-Trax.com received during fiscal 1999, in lieu of compensation, 250,000 shares
of Common Stock of I-Trax.com, valued at $.10 per share, representing aggregate
compensation of $25,000. Mr. Martin did not receive any compensation during
fiscal 1998.
Member-Link
Hans C. Kastensmith, former President of Member-Link and current
President of I-Trax.com received no compensation from Member-Link during fiscal
1998. Mr. Kastensmith received $77,250 in compensation from Member-Link in
fiscal 1999. Mr. Kastensmith also received during fiscal 1999, in lieu of
compensation, 1,000,000 shares of Common Stock of I- Trax.com, valued at $.125
per share, representing aggregate compensation of $125,000.
David C. McCormack, former Chief Technology Officer of Member-Link and
current President of Chief Technology Officer received $100,984 in compensation
from Member-Link in fiscal 1999. Mr. McCormack also received during fiscal 1999,
in lieu of compensation, 330,000 shares of Common Stock of I-Trax.com, valued at
$.125 per share, representing aggregate compensation of $41,250.
Employment Agreements
We have entered into employment agreements with each of Dr. Michael
O'Connell, Hans C. Kastensmith and David C. McCormack.
Dr. Michael O'Connell
On November 29, 1999, we entered into an employment agreement with Dr.
Michael O'Connell, our Chief Medical Officer, for a period of three years ending
on November 29, 2002. The agreement provides for an annual base salary of
$85,000 and cash bonuses from time to time as our Board of Directors may deem
appropriate. We also issued to Dr. O'Connell 100,000 shares of our Common Stock
and agreed to grant to him options to acquire an additional 100,000 shares of
our Common Stock under our 2000 Equity Competition Plan. When granted, the
options will vest in increments to be determined but in no event later than
November 29, 2002.
Dr. O'Connell is also entitled to a sales bonus for sales of our
enterprise application systems for which he is determined to be primarily
responsible. The bonus is equivalent to a commission of six percent (6%) of the
revenue realized from such sales net of sales costs and expenses, gross receipts
taxes, and capital cost recovery.
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The agreement prohibits Dr. O'Connell from using or disclosing any of
our confidential information at any time in the future and he has agreed that
any inventions he develops during his employment relating to our business will
become our sole and absolute property. He is also prohibited from competing with
us for a period of 24 months following the termination of the agreement, unless
the resulting termination is due to our breaching the agreement.
Dr. O'Connell may terminate the agreement at any time upon at least 60
days written notice.
Hans C. Kastensmith
On June 1, 1999, Member-Link, our predecessor, entered into an
employment agreement with Hans C. Kastensmith, our President and one of our
directors, for a period of three years ending on May 31, 2002. We are bound by
the agreement as a successor-in-interest to Member-Link. The agreement provides
for an annual base salary of $175,000 and cash bonuses from time to time as our
Board of Directors may deem appropriate. Effective March 23, 2000, Mr.
Kastensmith waived his right to receive any compensation, bonuses or any other
benefits accumulated but unpaid under this agreement during fiscal 1999.
The agreement prohibits Mr. Kastensmith from using or disclosing any of
our confidential information at any time in the future and he has agreed that
any inventions he develops during his employment relating to our business will
become our sole and absolute property. He is also prohibited from competing with
us for a period of 12 months following the termination of the agreement, unless
the resulting termination is due to our breaching the agreement.
Mr. Kastensmith may terminate the agreement at any time upon at least
60 days written notice.
David C. McCormack
On June 1, 1999, Member-Link, our predecessor, entered into an
employment agreement with David C. McCormack, our Chief Technology Officer, for
a period of three years ending on May 31, 2002. We are bound by the agreement as
a successor-in-interest to Member-Link. The agreement provides for an annual
base salary of $175,000 and cash bonuses from time to time as our Board of
Directors may deem appropriate. Effective March 23, 2000, Mr. McCormack waived
his right to receive any compensation, bonuses or any other benefits accumulated
but unpaid under this employment agreement during fiscal 1999.
The agreement prohibits Mr. McCormack from using or disclosing any of
our confidential information at any time in the future and he has agreed that
any inventions he develops during his employment relating to our business will
become our sole and absolute property. He is also prohibited from competing with
us for a period of 12 months following the termination of the agreement, unless
the resulting termination is due to our breaching the agreement.
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Mr. McCormack may terminate the agreement at any time upon at least 60
days written notice.
Equity Incentive Plan
On February 1, 2000 and March 14, 2000, the Company's Board of
Directors adopted and amended, respectively, and as of March 14, 2000 the
Company's then stockholders ratified and approved, the Company's 2000 Equity
Compensation Plan. The purpose of the Plan is to provide (i) designated
employees of I-Trax.com and its subsidiaries, (ii) certain consultants and
advisors who perform services for the Company or its subsidiaries and (iii)
non-employee members of the Board of Directors of the Company with the
opportunity to receive grants of incentive stock options, nonqualified stock
options and restricted stock. The Company believes that the Plan will encourage
the participants to contribute materially to the growth of the Company, thereby
benefitting the Company's stockholders, and will align the economic interests of
the individuals to whom grants are made with those of the stockholders.
The Plan permits grants to be made for a total of 3,000,000 shares of
Common Stock. The maximum aggregate number of shares of Common Stock that shall
be subject to grants made under the Plan to any individual during any calendar
year is 350,000 shares. Shares issuable pursuant to grants that terminate or
expire unexercised will be available for future grants under the Plan. As of
April, 2000, the Company has granted options to purchase an aggregate of 550,000
shares of Common Stock at a price of $1.00 per share, of which options to
purchase 350,000 shares were granted to Gary Reiss, the Company's Chief
Operating Officer, options to purchase 100,000 shares were granted to Phillip D.
Green, a director of the Company, and options to purchase 100,000 shares were
granted to John R. Palumbo, director of the Company.
All employees of the Company and its subsidiaries, including employees
who are officers or members of the Board of Directors, and members of the Board
of Directors who are not employees shall be eligible to participate in the Plan.
Consultants and advisors who perform services for the Company or any of its
subsidiaries shall be eligible to participate in the Plan if such key advisors
render bona fide services to the Company or its subsidiaries, the services are
not in connection with the offer and sale of securities in a capital-raising
transaction, and such key advisors do not directly or indirectly promote or
maintain a market for the Company's securities.
The Plan is administered by the Compensation Committee of the Board of
Directors. The Compensation Committee has the sole authority to (i) determine
the individuals to whom grants shall be made under the Plan, (ii) determine the
type, size and terms of the grants to be made to each such individual, (iii)
determine the time when the grants will be made and the duration of any
applicable exercise or restriction period, including the criteria for
exercisability and the acceleration of exercisability, (iv) amend the terms of
any previously issued grant, and (v) deal with any other matters arising under
the Plan. The Compensation Committee shall from time to time review the
implementation and results of the Plan to determine the extent to which the
Plan's purpose is being accomplished. In addition, the Compensation Committee
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shall periodically meet with senior management of the Company to review
management's suggestions regarding grants under the Plan, including the
individuals who are proposed to receive grants and the amount and time of such
grants; provided, that all such grants shall be determined solely by the
Committee in its discretion.
Recipients of stock options under the Plan will have the right to
purchase shares of Common Stock at an exercise price, during a period of time
and on such other terms and conditions as are determined by the Compensation
Committee. For incentive stock options, the recipient must be an employee, the
exercise price must be at least 100% (110% if issued to persons owning 10% or
more of the Common Stock of the Company) of the fair market value, as defined in
the Plan, of the Common Stock on the date of grant and the term cannot exceed
ten years (five years if issued to persons owning 10% or more of the Common
Stock of the Company) from the date of grant. If permitted by the Compensation
Committee and subject to certain conditions, an option exercise price may be
paid by delivery of shares of Common Stock that have been outstanding, a
promissory note, a broker's undertaking to deliver promptly the necessary funds
or by a combination of these methods. If permitted by the Compensation
Committee, options may be settled by the Company's paying to the recipient, in
cash or in shares of Common Stock valued at the then fair market value of the
Common Stock, an amount equal to such fair market value minus the exercise price
of the option shares.
Generally, upon termination of a recipient's employment or other
relationship with the Company, stock options remain exercisable for a period of
three months (one year if termination is due to death or disability) to the
extent the stock options were exercisable at the date of expiration, except as
otherwise agreed between the employee and the Company.
Item 7. Certain Relationships and Related Transactions.
On July 15, 1999, we issued and sold 1,000,000 shares of our Common
Stock to each of Frank A. Martin, Melvin B. Siegel and Joseph E. Shamy and Greta
Shamy, as tenants in common, at a per share price of $.10, for an aggregate cash
consideration of $300,000 to raise working capital. Each buyer is more fully
identified under Item 4., Security Ownership of Certain Beneficial Owners and
Management, and Item 5., Directors and Executive Officers.
On or about September 3, 1999, we issued to certain executive officers
of Member-Link an aggregate of 2,000,000 shares, of which 1,000,000 shares were
issued to Hans C. Kastensmith, the Company's President and Director, as
consideration for services to be rendered by Mr. Kastensmith in connection with
a certain license agreement, a management services agreement and a technical
services agreement between Member-Link and the Company. The aggregate
consideration deemed received by Mr. Kastensmith in this transaction was
$125,000.
Effective as of December 30, 1999, Member-Link merged with and into
I-Trax.com pursuant to a Merger Agreement dated as of December 14, 1999. In the
merger, each of the 1,809,686 outstanding shares of Common Stock of Member-Link
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was converted into a right to receive 4.4207 shares of I-Trax.com Common Stock.
8,000,082 shares of I-Trax.com Common Stock were issued in the merger. At the
time of the merger, Nantucket Healthcare Ventures I, L.P., an affiliate of Mr.
Martin, the Chairman and a Director of the Company, and an affiliate of David R.
Bock, a Director of the Company, held in the aggregate 486,168 shares of Member-
Link Common Stock, which shares were converted in the merger into 2,149,203
shares of our Common Stock.
On February 20, 2000, we sold 1,830,000 shares of our Common Stock for
an aggregate consideration of $1,830,000, in a series of closings pursuant to a
private placement. Mr. Martin together with his wife and children purchased
125,000 of such shares for an aggregate purchase price of $125,000.
Dr. Craig A. Jones, one of our Directors, is the Director of the
Division of Allergy & Immunology at the Los Angeles County and University of
Southern California Medical Center, which is operated by the Los Angeles County
Department of Health Services (DHS). The Los Angeles County DHS is purchasing an
information system from us at an approximate cost of $100,000 to support
implementation of a clinical disease management program. Dr. Jones is the
director of that clinical program.
Item 8. Description of Securities.
General
The authorized capital stock of the Company is 52,000,000 shares, (i)
of which 50,000,000 shares are designated as Common Stock, par value $.001 per
share, 17,858,084 with shares are issued and outstanding, and (ii) of which
2,000,000 shares are designated as Preferred Stock, par value $.001 per share,
none of which shares are issued or outstanding.
Common Stock
The holders of Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the shareholders. Subject
to preferences that may be applicable to any outstanding Preferred Stock,
holders of Common Stock are entitled to receive ratably such dividends as may be
declared by the Board of Directors out of funds legally available therefor. In
the event of a liquidation, dissolution or winding up of the Company, holders of
Common Stock are entitled to share ratably in all assets remaining after payment
of liabilities and the liquidation preferences of any outstanding shares of
Preferred Stock. Holders of Common Stock have no preemptive rights.
Preferred Stock
The Company also has authorized 2,000,000 shares of Preferred Stock
issuable in series upon resolution of the Board of Directors. The Board of
Directors is authorized to establish the relative terms, rights and other
provisions of any series of Preferred Stock. No Preferred Stock is outstanding,
and the Board of Directors has no current intention of issuing any Preferred
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Stock. However, unless otherwise required by law in a particular circumstance,
the Board of Directors can, without stockholder approval, issue Preferred Stock
in the future with voting and conversion rights which could adversely affect the
voting power of the Common Stock. The issuance of Preferred Stock could be
expected to, and may have the effect of, delaying, averting or preventing a
change in control of the Company.
The Company's Certificate of Incorporation provides that directors of
the Company will not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law relating to prohibited dividends,
distributions and repurchases or redemptions of stock or (iv) for any
transaction from which the director derives an improper personal benefit.
However, such limitation on liability would not generally apply to violations of
the Federal securities laws, nor does it limit the availability of non-monetary
relief in any action or proceeding.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters.
Since September 29, 1999, the Company's Common Stock has been quoted on
the OTC Bulletin Board under the symbol "IMTX." Prior to September 29, 1999, the
Company's Common Stock had been quoted on the OTC Bulletin Board under the
symbol "UMAI." The following table sets forth the high and low closing bid
information for the Common Stock for the periods indicated:
High Low
---- ---
1999
----
Fourth Quarter 0.1875 2.2500
Third Quarter 0.1875 0.1875
Second Quarter No inside quotes reported
First Quarter No inside quotes reported
1998
Fourth Quarter No inside quotes reported
Third Quarter No inside quotes reported
Second Quarter No inside quotes reported
First Quarter No inside quotes reported
The information presented above was supplied to the Company by Nasdaq Trading
and Market Services and reflects inter-dealer prices, without retail mark-up,
mark-down or commission and may not represent actual transactions.
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Immediately following the effectiveness of this Registration Statement
on Form 10-SB, the Company will file an application to have its Common Stock
listed on the Nasdaq Small Cap Market under the symbol "IMTX," although there is
no assurance that such application will be accepted and that the shares will
actually be listed or traded there.
The Company has not paid any dividends since its formation in 1969 and
does not intend to pay cash dividends on its Common Stock in the foreseeable
future. In any event, any declaration of cash dividends would be at the
discretion of the Company's Board of Directors and would depend upon all then
relevant factors, including the earnings, capital requirements and financial
position of the Company as well as general economic conditions.
As of April 4, 2000, there were approximately 623 registered holders of
record of the Common Stock. Approximately 118,000 shares of our Common Stock are
registered in the name of the Depository Trust Company. At this time, the
Company cannot establish with certainty the number or beneficial owners of those
shares.
The transfer agent for the Company's Common Stock is StockTrans, Inc.,
Ardmore, Pennsylvania.
Item 2. Legal Proceedings.
The Company is not a party to any pending legal proceedings.
Item 3. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
Item 4. Recent Sales of Unregistered Securities.
During 1996, we issued various 10% subordinated convertible promissory
notes, which were convertible into shares of our Common Stock. During October
1999, twenty of such holders agreed to convert the principal balance of these
notes, which amounted to $405,500, into 270,333 shares of our Common Stock at
$1.50 per share. In issuing such shares, the Company relied on an exemption from
registration under Section 4(2) of the Securities Act and Regulation D
thereunder. All accrued and unpaid interest on such notes was forgiven by all
debt holders. One debt holder that did not convert a convertible note into our
Common Stock was repaid the principal balance on such note, $37,500, in full
immediately subsequent to December 31, 1999.
On July 1, 1999, we issued an aggregate of 685,000 shares of our Common
Stock to certain individuals in lieu of salary and compensation for services. In
issuing such shares, we relied on an exemption from registration under Section
4(2) of the Securities Act and Regulation D thereunder.
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On July 15, 1999, we issued and sold an aggregate of 4,000,000 shares
of our Common Stock to certain stockholders of the Company, including Messrs.
Martin, Bock and Seigel and Mr. and Mrs. Shamy, as tenants in common, at a per
share price of $.10, for an aggregate consideration of $400,000 to raise working
capital. In issuing such shares, we relied on an exemption from registration
under Section 4(2) of the Securities Act and Regulation D thereunder.
On November 30, 1999 we issued and sold an aggregate of 220,000 shares
of our Common Stock to certain individuals, at a per share price of $.50, for an
aggregate consideration of $110,000 to raise working capital. In issuing such
shares, we relied on an exemption from registration under Section 4(2) of the
Securities Act and Regulation D thereunder.
On or about September 3, 1999, we issued to Member-Link 3,000,000
shares of our Common Stock and to certain executive officers of Member-Link an
aggregate of 2,000,000 shares of our Common Stock as consideration for the
execution and delivery by Member-Link of a license agreement, a management
services agreement and a technical services agreement and as consideration for
certain key Member-Link executives performing services in connection with such
agreements. The 3,000,000 shares issued to Member-Link were subsequently
canceled effective as of December 30, 1999 pursuant to the terms of the merger
of Member- Link and I-Trax.com. The aggregate consideration deemed received by
the executives of Member-Link in this transaction was $250,000. In issuing such
shares, we relied on an exemption from registration under Section 4(2) of the
Securities Act and Regulation D thereunder.
Effective as of December 30, 1999, Member-Link merged with and into
I-Trax.com pursuant to a Merger Agreement dated as of December 14, 1999. In the
merger, each of the 1,809,686 outstanding shares of Common Stock of Member-Link
was converted into a right to receive 4.4207 shares of I-Trax.com Common Stock.
An aggregate of 8,000,082 shares of our Common Stock was issued in the merger.
Furthermore, 3,000,000 shares of our Common Stock held of record by Member-Link
were canceled. As a further consequence of the merger, each of the license
agreement, the technical services agreement and management services agreement
between I-Trax.com and Member-Link were canceled. In issuing the shares in this
merger, we relied on an exemption from registration under Section 4(2) of the
Securities Act and Regulation D thereunder.
On February 20, 2000, we completed the sale of 1,830,000 shares of our
Common Stock for an aggregate consideration of $1,830,000, at a price of $1.00
per share, in a series of closings pursuant to a private placement to accredited
investors. The entire proceeds of the Private Placement, with the exception of a
portion of the proceeds used to cover related expense, is being used by the
Company for working capital. In issuing such private placement shares, we relied
on an exemption from registration under Section 4(2) of the Securities Act and
Regulation D thereunder. We filed with the SEC a Form D in connection with the
issuance of our shares in this private placement.
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Item 5. Indemnification of Directors and Officers.
Section 145(a) of the Delaware General Corporation Law provides that a
Delaware corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
other than an action by or in the right of the corporation, by reason of the
fact that he is or was a director, officer, employee or agent of the corporation
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or enterprise, against expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no cause to believe his conduct was unlawful.
Section 145(b) of the Delaware General Corporation Law provides that a
Delaware corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set forth
above, against expenses actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted under similar
standards, except that no indemnification may be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to
the corporation unless and only to the extent that the court in which such
action or suit was brought shall determine that, despite such adjudication of
liability, such person is fairly and reasonably entitled to be indemnified for
such expenses which the court shall deem proper.
Section 145 of the Delaware General Corporation Law further provides
that to the extent a director or officer of a Delaware corporation has been
successful in the defense of any action, suit or proceeding referred to in
subsections (a) or (b) of Section 145 or in the defense of any claim, issue or
matter therein, he shall be indemnified against any expenses actually and
reasonably incurred by him in connection therewith; that the indemnification
provided for by Section 145 shall not be deemed exclusive of any rights to which
the indemnified party may be entitled and the corporation may purchase and
maintain insurance on behalf of a director or officer of the corporation against
any liability asserted against him or incurred by him in any such capacity or
arising out of his status as such whether or not the corporation would have the
power to indemnify him against such liabilities under Section 145.
Section 102(b)(7) of the Delaware General Corporation Law permits a
Delaware corporation to include a provision in its Certificate of Incorporation,
and the Company's Certificate of Incorporation contains such a provision, to the
effect that, subject to certain exceptions, a director of a Delaware corporation
is not personally liable to the corporation or its stockholders for monetary
damages for breach of his fiduciary duty as a director.
The Company's Amended and Restated By-laws also provide that the
Company shall indemnify its directors and officers and, to the extent permitted
by the Board of Directors, the Company's employees and agents, to the full
extent permitted by and in the manner permissible under the laws of the State of
Delaware. In addition, the Company's By-laws permit the Board of Directors to
authorize the Company to purchase and maintain insurance against any liability
asserted against any of the Company's directors, officers, employees or agents
arising out of their capacity as such.
PART F/S. Financial Statements.
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PART III
Item 1/2. Index to Exhibits.
2.1 Agreement and Plan of Merger dated December 14, 1999 between
I-Trax.com, Inc. and Member-Link Systems, Inc.
3.1 Certificate of Incorporation of I-Trax.com, Inc.
3.2 Amended and Restated By-laws of I-Trax.com, Inc.
4.1 Form of Common Stock certificate of I-Trax.com, Inc.
10.1 Agreement between Member-Link Systems, Inc. and The Office of the
Attending Physician of The Capitol.
10.2 Software License Agreement between Member-Link Systems, Inc. and
Walter Reed Army Medical Center.
10.3 Office Lease dated October 22, 1999 by and between Reston Plaza I
& II, LLC and Member-Link Systems, Inc.
10.4 Consulting Agreement dated as of August 27, 1998, by and between
Member- Link Systems, Inc. and Enterprise Integration Corporation.
10.5 Agreement to Hold Harmless and Indemnify dated September 2, 1999
between I-Trax.com, Inc. and Member-Link Systems, Inc.
10.6 Software and Proprietary Product Corporate License Agreement dated
September 1999 between I-Trax.com, Inc. and Member-Link Systems,
Inc.
10.7 Management Services Agreement dated September 3, 1999 between
I-Trax.com, Inc. and Member-Link Systems, Inc.
10.8 Technical Services Agreement dated September 3, 1999 between
I-Trax.com, Inc. and Member-Link Systems, Inc.
10.9 Software License Agreement dated October 1, 1999, by and between
Member-Link Systems, Inc. and Mobile Care Foundation.
10.10 License Agreement dated November 9, 1999 between Member-Link
Systems, Inc. and Mobile Care Foundation.
10.11 Agreement dated December 1, 1999 between Member-Link Systems, Inc.
and Phoenix Children's Hospital.
10.12 Consulting Agreement dated February 2, 2000 between I-Trax.com,
Inc. and Kenneth Jennings, Ph.D.
10.13 Employment Agreement dated November 29, 1999 between I-Trax.com,
Inc. and Michael O'Connell, M.D.
10.14 Employment Agreement dated June1, 1999 between Member-Link
Systems, Inc. and Hans C. Kastensmith.
10.15 Employment Agreement dated June1, 1999 between Member-Link
Systems, Inc. and David C. McCormack.
10.16 I-Trax.com, Inc. 2000 Equity Compensation Plan.
21.1 Subsidiaries of I-Trax.com, Inc.
23.1 Consent of Massella, Tomaro & Co., LLP.
27.1 Financial data schedule.
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
I-TRAX.COM, INC.
Date April 10, 2000 By: /s/ Frank A. Martin
-------------------------------
Name: Frank A. Martin
Title: Chief Executive Officer
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
INDEX TO FINANCIAL STATEMENTS
Page
Number
------
Independent auditors' report F-1
Balance sheet at December 31, 1999 F-2
Statements of operations for the years
ended December 31, 1999 and 1998 F-3
Statement of stockholders' equity (deficiency) for the
years ended December 31, 1999 and 1998 F-4
Statements of cash flows for the
years ended December 31, 1999 and 1998 F-5
Notes to financial statements F-6 to F-15
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
I-Trax.com, Inc. (formerly U.S. Medical Alliance, Inc.)
We have audited the accompanying balance sheet of I-Trax.com, Inc. (formerly
U.S. Medical Alliance, Inc.) (the "Company") as of December 31, 1999, and
the related statements of operations, stockholders' equity (deficiency) and
cash flows for the years ended December 31, 1999 and 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Company as of
December 31, 1999, and the results of its operations and cash flows for the
years ended December 31, 1999 and 1998 in conformity with generally accepted
accounting principles.
Massella, Tomaro & Co., LLP
Jericho, New York
March 13, 2000, except for
note 10(c) as to which
the date is April 4, 2000
F - 1
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
BALANCE SHEET
DECEMBER 31, 1999
ASSETS
<TABLE>
<S> <C>
Current assets:
Cash $ 195,728
Accounts receivable 412,038
Prepaid expenses 24,770
-----------
Total current assets 632,536
-----------
Property and equipment, net 36,120
Security deposits 40,162
-----------
Total Assets $ 708,818
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 192,578
Convertible note payable 37,500
Due to related parties 66,048
-----------
Total current liabilities 296,126
-----------
Commitments & Contingencies (Note 8 ) --
Stockholders' Equity:
Preferred stock - $.001 par value, 2,000,000 shares authorized,
-0- issued and outstanding --
Common Stock - $.001 par value, 50,000,000 shares authorized,
16,028,084 issued and outstanding 16,028
Additional paid - in capital 1,043,299
Accumulated deficit (646,635)
-----------
Total stockholders' equity 412,692
-----------
Total Liabilities and Stockholders' Equity $ 708,818
===========
</TABLE>
See accompanying notes to financial statements
F - 2
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Revenue $ 987,533 $ 347,800
------------ ------------
Operating expenses:
Cost of revenue 374,132 149,115
Selling, general and administrative 997,047 125,161
Research and development 186,908 --
------------ ------------
Total operating expenses 1,558,087 274,276
------------ ------------
(Loss) income before other income
(expenses) and provision for income tax (570,554) 73,524
------------ ------------
Other income (expenses):
Miscellaneous income 9,171 --
Interest expense (258) (500)
------------ ------------
Total other income (expenses) 8,913 (500)
------------ ------------
(Loss) income before provision for income taxes (561,641) 73,024
------------ ------------
Provision for income taxes -- --
------------ ------------
Net (loss) income $ (561,641) $ 73,024
============ ============
Basic:
Net (loss)
income
$ (.05) $ .01
============ ============
Weighted average number of shares
outstanding 11,336,168 8,852,751
============ ============
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
Total
Common Stock Additional Stockholders'
------------ Paid-in Accumulated Equity
Shares Amount Capital Deficit (Deficiency)
----------- ------ ------- ------- ------------
<S> <C> <C> <C> <C> <C>
Balances at December 31, 1997 852,669 $ 853 $ 434,156 $ (910,509) $ (475,500)
Net income for the year ended
December 31, 1998 -- -- -- 73,024 73,024
----------- --------- ----------- ----------- -----------
Balances at December 31, 1998 852,669 853 434,156 (837,485) (402,476)
Issuance of common stock in
connection with conversion of
subordinated convertible notes 270,333 270 405,230 -- 405,500
Issuance of common stock in
connection with services
rendered to the Company 685,000 685 67,815 -- 68,500
Sale of common stock 4,220,000 4,220 530,780 -- 535,000
Issuance of common stock to the
former stockholders of
Memberlink-System
for services rendered to
the Company 2,000,000 2,000 248,000 -- 250,000
Issuance of common stock in
connection with the merger
of Memberlink-Systems, Inc.,
net of costs 8,000,082 8,000 300,327 (190,518) 117,809
Recapitalization in connection
with reverse acquisition -- -- (943,009) 943,009 --
Net loss for the year ended
December 31, 1999 -- -- -- (561,641) (561,641)
----------- --------- ----------- ----------- -----------
Balances at December 31, 1999 16,028,084 $ 16,028 $ 1,043,299 $ (646,635) $ 412,692
=========== ========= =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
I-TRAX.COM, INC
(FORMERLY U.S. MEDICAL ALLIANCE INC.)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
---- ----
<S> <C> <C>
Operating activities:
Net (loss) income $(561,641) $ 73,024
Adjustments to reconcile net loss to net
Cash used for operating activities:
Depreciation and amortization 7,647 --
Issuance of common stock for consideration of services 318,500 --
Decrease (increase) in:
Accounts receivable (165,538) (156,500)
Prepaid expenses (18,770) 1,450
(Decrease) increase in:
Accounts payable and accrued expenses 62,654 2,697
--------- ---------
Net cash used for operating activities (357,148) (79,329)
--------- ---------
Investing activities:
Purchase of property and equipment (43,817) (5,950)
Security deposits (40,162) --
--------- ---------
Net cash used for investing activities (83,979) (5,950)
--------- ---------
Financing activities:
Proceeds from notes payable 150,000 100,000
Costs in connection with merger (92,952) --
(Repayments to) advances from related parties (8,076) 23,760
Proceeds from sale of common stock 535,000 --
--------- ---------
Net cash provided by financing activities 583,972 123,760
--------- ---------
Net increase in cash 142,845 38,481
Cash and cash equivalents at beginning of year 52,883 14,402
--------- ---------
Cash and cash equivalents at end of year $ 195,728 $ 52,883
========= =========
Supplemental disclosure of non-cash flow information:
Cash paid during the year for:
Interest $ 258 $ 500
========= =========
Income taxes $ -- $ --
========= =========
Schedule of non-cash financing activities:
Issuance of 270,333 shares of common
stock in connection with conversion of
debentures $ 405,500 $ --
========= =========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 1-- ORGANIZATION
HISTORY
-------
I-Trax.com, Inc (the "Company") was incorporated in the state
of Delaware on May 23, 1969 under the name Marmac Corporation.
During December 1979, the Company changed its name to Ibex
Industries International, Inc. During April 1996, in
connection with the acquisition of assets and the assumption
of liabilities of various medical practices (which reverted
back to the original owners during 1997 as a result of cash
flow deficiencies), the Company changed its name to U.S.
Medical Alliance, Inc. The Company, on August 27, 1999 changed
its name to I-Trax.com, Inc. prior to the merger discussed
below. The Company had no operations for the year ended
December 31, 1998 and only general and corporate expenses for
the year ended December 31, 1999.
MERGER
------
Pursuant to a merger agreement dated as of December 14, 1999
(with an effective date of December 30, 1999), the Company
issued 8,000,082 shares of its common stock in exchange for
all the issued and outstanding common stock of Member-Link
Systems, Inc. ("Memberlink"). Memberlink which is also a
Delaware corporation, is a health information technology
company which has developed certain software technology which
it sells and licenses to various organizations, including but
not limited to governmental agencies.
The merger of the Company and Memberlink has been treated as a
recapitalization of Memberlink with Memberlink as the acquirer
(reverse acquisition). The accompanying financial statements
reflect this transaction as if it had occurred on January 1,
1998. Such transaction is considered a capital transaction
whereby Memberlink contributed its stock for the net assets of
the Company. Upon consummation of the merger on December 30,
1999, the shareholders of Memberlink received 8,000,082 shares
of the Company's common stock, which represented 49.9% of the
outstanding common stock immediately after the issuance.
Simultaneously with the merger, Memberlink's former President
was elected as the Company's President. Upon consummation of
the merger transaction the Company was recapitalized and
Memberlink ceased to exist with the Company being the
surviving entity.
MEMBERLINK
----------
Memberlink was originally incorporated in the state of New
York on June 8, 1993. On June 29, 1999, Memberlink as a New
York corporation was merged into Memberlink - Delaware
pursuant to an agreement and plan of merger dated June 29,
1999. In connection with such merger from Memberlink - New
York to Memberlink - Delaware, the previous shareholders of
Memberlink New York exchanged their stock on a one for one
basis for a total of 1,323,518 shares of MemberLink -
Delaware.
F - 6
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 2-- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Cash and cash equivalents
-------------------------
The Company considers highly liquid investments with
maturities of three months or less at the time of purchase
to be cash equivalents.
b) Income Taxes
------------
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards ("SFAS") No.
109 "Accounting for Income Taxes" which requires the use
of the "liability method" of accounting for income taxes.
Accordingly, deferred tax liabilities and assets are
determined based on the difference between the financial
statement and tax bases of assets and liabilities, using
enacted tax rates in effect for the year in which the
differences are expected to reverse. Current income taxes
are based on the respective periods' taxable income for
federal and state income tax reporting purposes.
c) Earnings per share
------------------
Earnings per share are computed pursuant to Financial
Accounting Standards Board, "SFAS No. 128," "Earnings Per
Share." SFAS No. 128 replaced the previously required
reporting of primary and fully diluted earnings per share
with basic and diluted earnings per share, respectively.
Unlike the previously reported primary earnings per share,
basic earnings per share exclude the dilutive effects of
stock options. Diluted earnings per share are similar to
the previously reported fully diluted earnings per share.
Earnings per share amounts for all periods presented have
been calculated in accordance with the requirements of
SFAS No. 128.
d) Use of estimates
----------------
In preparing the financial statements in conformity with
generally accepted accounting principles, management is
required to make estimates and assumptions which affect
the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the
date of the financial statements and revenues and expenses
during the reporting period. Actual results could differ
from those estimates.
e) Fair value disclosure at December 31, 1999
------------------------------------------
The carrying value of cash, accounts receivable, accounts
payable and accrued expenses are a reasonable estimate of
their fair value because of the short-term maturity.
f) Effect of New Accounting Standards
----------------------------------
The Company does not believe that any recently issued
accounting standards, not yet adopted will have a material
impact on its financial position and results of operations
when adopted.
F - 7
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 2-- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
g) Property and Equipment
----------------------
Property and equipment are recorded at cost less
accumulated depreciation which is provided on the straight
line basis over the estimated useful lives of the assets
which range between five and seven years. Expenditures for
maintenance and repairs are expensed as incurred.
h) Accounts Receivable
-------------------
The Company utilizes the allowance method for recognizing
the collectibility of its accounts receivable. The
allowance method recognizes bad debt expense based on a
review of the individual accounts outstanding based on the
surrounding facts. As of December 31, 1999 no allowance
was deemed necessary by management.
i) Research and Development Costs
------------------------------
Research and development costs are expensed as incurred.
Such costs amounted to $186,908 and $- 0 - for the years
ended December 31, 1999 and 1998, respectively.
j) Revenue Recognition
-------------------
In October 1997, the American Institute of Certified
Public Accountant's Accounting Standards Executive
Committee ("ACSEC") issued Statement of Position ("SOP")
97-2, "Software Revenue Recognition." SOP 97-2 was
effective January 1, 1998 and generally requires revenue
earned on software arrangements involving multiple
elements such as software products, upgrades,
enhancements, post-contract customer support, installation
and training to be allocated to each element based on the
relative fair value of the elements. There was no material
change to the Company's accounting policy for revenue as a
result of the adoption of SOP 97-2.
In December 1998, the ACSEC released SOP 98-9,
"Modification of SOP 97-2, "Software Revenue Recognition
with Respect to Certain Transactions." SOP 98-9 amends SOP
97-2 to require that an entity recognize revenue for
multiple element arrangements by means of the "residual
method" when (1) there is vendor-specific objective
evidence ("VSOE") of the fair values of all the
undelivered elements that are not accounted for by means
of long-term contract accounting, (2) VSOE of fair value
does not exist for one or more of the delivered elements,
and (3) all revenue recognition criteria of SOP 97-2
(other than the requirement for VSOE of the fair value of
each delivered element) are satisfied.
F - 8
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 2-- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
k) Comprehensive income
--------------------
The Company adopted SFAS No. 130, "Accounting for
Comprehensive Income," during the fiscal year ended 1998.
This statement establishes standards for reporting and
disclosing of comprehensive income and its components
(including revenues, expenses, gains and losses) in a full
set of general-purpose financial statements. The Company
had no comprehensive income in any of the years ended
December 31, 1999 and 1998.
NOTE 3-- PROPERTY AND EQUIPMENT
Property and equipment are as follows at December 31, 1999:
Furniture & fixtures $ 2,700
Computer equipment $ 41,067
---------
43,767
Less: accumulated depreciation 7,647
---------
$ 36,120
=========
Depreciation expense for the years ended December 31, 1999
and 1998 amounted to $7,647, and $- 0 - respectively.
NOTE 4-- ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the
following at December 31, 1999:
Consulting $104,188
Professional fees 17,522
Rent 23,123
Contingency loss 22,500
Other 25,245
--------
Total $192,578
========
NOTE 5-- CONVERTIBLE NOTE PAYABLE
During 1996, the Company issued subordinated convertible
promissory notes to investors accruing interest at an annual rate
of 10% which were convertible into shares of common stock at a
conversion rate of one share for each $5 of principal and accrued
and unpaid interest.
F - 9
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 5-- CONVERTIBLE NOTE PAYABLE (cont'd)
During October 1999, all such noteholders, except one, agreed to
convert their principal balance on the notes which amounted to
$405,500 at $1.50 per share. Accordingly, the Company issued
270,333 shares of its common stock to certain noteholders. All
interest due pursuant to the notes was waived by all noteholders.
The convertible note balance at December 31, 1999 amounting to
$37,500 represents one noteholder who did not convert the note
to common stock, and accordingly, was repaid the principal
balance in full subsequent to December 31, 1999.
NOTE 6-- DUE TO RELATED PARTIES
Due to related parties as of December 31, 1999 amounting to
$66,048 is comprised of the following:
i) Advances made by a former officer of Memberlink
amounting to $35,683. The former officer and current
shareholder of the Company has agreed to a repayment
of the advances at a rate of $3,000 per month until
fully paid, without interest, commencing April 2000.
ii) Advances made by a current officer of the Company
(previously an officer of Memberlink) amounting to
$18,679. The amount is due on demand and is
non-interest bearing.
iii) Advances made by a relative of the officer discussed
in (ii) above amounting to $11,686. The amount is
also due on demand and is non-interest bearing.
NOTE 7 -- PROVISION FOR INCOME TAXES
The Company accounts for income taxes in accordance with SFAS
109. Income taxes are provided for the tax effects of
transactions reported in the financial statements and consist
of taxes currently due plus deferred taxes related to
differences between the financial statement and tax bases of
assets and liabilities for financial statement and income tax
reporting purposes. Deferred tax assets and liabilities
represent the future tax return consequences of these
temporary differences, which will either be taxable or
deductible in the year when the assets or liabilities are
recovered or settled. Accordingly, measurement of the deferred
tax assets and liabilities attributable to the book-tax basis
differentials are computed at a rate of 34% federal and 6%
state pursuant to SFAS No. 109.
The only material tax effect of significant items comprising
the Company's current deferred tax assets as of December 31,
1999 is its net operating loss carryforwards which amounted
to approximately $997,000. The deferred tax asset associated
with the Company's NOL's amounted to approximately $358,000 as
of December 31, 1999.
F - 10
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 7 -- PROVISION FOR INCOME TAXES (cont'd)
In accordance with SFAS No. 109, the Company has recorded a
100% valuation allowance for such deferred tax asset since
management could not determine that it was "more likely than
not" that the deferred tax asset would be realized in the
future. The Company's NOL's will expire between 2011 and 2014
if not utilized.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
a) Lack of Insurance
The Company through March 14, 2000, did not maintain any
liability insurance or any other form of general insurance.
Although the Company is not aware of any claims resulting from
product malfunctions or any other type, there is no assurance
that none exists.
b) Significant customers and vendors.
---------------------------------
For the year ended December 31, 1999, the Company had two
unrelated customers, which accounted for approximately 63%,
and 13%, respectively, of total revenues. For the year ended
December 31, 1998 the Company had one unrelated customer which
accounted for approximately 71% of total revenues. As of
December 31, 1999, the Company had three unrelated customers,
which accounted for approximately 12%, 30% and 40%
respectively, of accounts receivables.
c) Office Lease
------------
On October 22, 1999, the Company entered into a non-cancelable
lease agreement for its administrative offices pursuant to a
five year lease expiring October 31, 2004 with annual rent at
approximately $162,000 before annual escalations.
The Company's approximate future minimum rental payments under
non-cancelable operating leases in effect on December 31, 1999
are as follows:
2000 $ 161,376
2001 166,212
2002 171,192
2003 176,352
2004 151,370
---------
$ 826,502
Prior to October 1999, the Company rented office space on a
month to month basis at a rate of approximately $2,500 per
month for a portion of the year ended December 31, 1999 and
$1,700 per month for the year ended December 31, 1998.
Rent expense for the years ended December 31, 1999 and 1998
amounted to approximately $52,625 and $21,020, respectively.
F - 11
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 8 - COMMITMENTS AND CONTINGENCIES (cont'd)
d) Employment Agreements
---------------------
i) On June 1, 1999, Memberlink entered into four employment
agreements with certain officers' of the Company. The
employment agreements terminate on May 31, 2000 with annual
salaries ranging from $125,000 to $175,000. Subsequent to year
end, the Company began renegotiating the remaining three
employment agreements (since one was terminated) due to the
merger effectuated on December 30, 1999. (See note 10(c) for
additional information)
ii) The Company entered into an employment agreement on
November 29, 1999, with an individual to act as the Company's
Chief Medical Officer at an annual salary of $85,000. In
addition, the Company agreed to grant options to purchase
100,000 shares of common stock pursuant to the Company's newly
established 2000 Equity Compensation Plan (see note 10(b)).
Such options will vest in increments to be determined, but in
no event later than November 29, 2002. Such individual also
received additional 100,000 common shares, valued at $12,500
for past services rendered to the Company during the year
ended December 31, 1999. Lastly, such individual is also
entitled to a sales bonus for sales (after costs and related
expenses) of the Company's application systems for which he is
primarily responsible.
e) Judgments
---------
During 1998, several judgments were entered against U.S.
Medical Alliance, the predecessor to the Company, relating
among other things, to the Company's prior line of business of
managing physician practices. The allegations made in the
underlying suits relate to wrongful discharge, general breach
of contract, breach of equipment lease agreements and
miscellaneous vendor claims. The aggregate amount of such
judgments entered against the Company and certain associated
physicians is approximately $600,000. None of the plaintiffs
in the underlying suits has attempted to collect on the
judgments. While it remains unclear whether the Company can
successfully satisfy the judgments in a favorable manner,
based on a reasoned opinion issued by the Company's special
counsel retained to resolve these matters, the Company has
accrued, as of December 31, 1999, approximately $22,500, with
a related charge to operations, as a reserve for satisfying
such judgments.
F - 12
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 9-- STOCKHOLDERS' EQUITY
a) Subordinated Loan and Warrant Purchase Agreement
------------------------------------------------
Pursuant to a Subordinated Loan and Warrant Purchase Agreement
dated September 24, 1998 between Memberlink - New York (prior
to its re-incorporation in Delaware) and Nantucket Healthcare
Ventures I, L.P., ("Nantucket") a Delaware limited
partnership, a partnership controlled by the Company's Chief
Executive Officer, Memberlink - New York borrowed a total of
$250,000 from Nantucket by issuing a convertible promissory
note. In addition to the convertible promissory note,
Nantucket was also issued a warrant to purchase at an exercise
price of $.01 per share the number of fully paid and
non-assessable shares of common stock of Memberlink - Delaware
as will equal 1.5% of the issued and outstanding common stock
at the time Nantucket exercised such warrant. Additionally,
Nantucket received the option to purchase from Memberlink -
Delaware additional warrants determined as follows: an
additional 0.5% of the issued and outstanding common stock of
Memberlink - Delaware at the time Nantucket exercised such
warrant shall be subject to such warrant for each $10,000
increment purchased by Nantucket in the form of notes.
Effective as of December 30, 1999, Memberlink - Delaware
issued 486,168 shares to Nantucket, upon Nantucket's
exercising its warrants. During June 1999, Memberlink - New
York's shareholders converted their stock in Memberlink - New
York for stock of Memberlink - Delaware. Accordingly, during
June and December 1999, Memberlink - Delaware issued 486,168
and 1,323,518, respectively, of its common stock.
b) Issuance of common stock for settlement of debt
-----------------------------------------------
During 1996, the Company issued subordinated convertible
promissory notes to investors accruing interest at an annual
rate of 10% which were convertible into shares of common stock
at a conversion rate of one share for each $5 of principal and
accrued and unpaid interest.
During October 1999, all such noteholders, except one, agreed
to convert their principal balance on the notes which amounted
to $405,500 at $1.50 per share. Accordingly, the Company
issued 270,333 shares of its common stock to certain
noteholders. All accrued and unpaid interest on such notes was
waived by all noteholders. The convertible note balance at
December 31, 1999 amounting to $37,500 represents one
noteholder which did not convert the note to common stock, and
accordingly, was repaid the principal balance in full
subsequent to December 31, 1999.
F - 13
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 9-- STOCKHOLDERS' EQUITY (cont'd)
c) Issuance of common stock for consulting services
------------------------------------------------
In connection with various services provided to the Company
for legal, accounting, public relations and financial
consulting, the Company, during July 1999, issued an aggregate
of 685,000 shares of its restricted common stock to various
individuals which has been valued at $68,500. Included in the
common stock issued are 250,000 shares issued to its Chief
Executive Officer valued at $25,000 for consulting services.
d) Sale of common stock
--------------------
From July 1999 to November 1999, the Company sold 4,220,000
restricted shares of its common stock yielding net proceeds of
$535,000 pursuant to Regulation D promulgated under the
Securities Act of 1933. The shares of common stock were sold
pursuant to subscription agreements with prices ranging
between $.10 to $.50 a share, and include 1,000,000 shares
having been sold to its Chief Executive Officer for $100,000.
e) Issuance of common stock in connection with acquisition of
license and related consulting/management agreements
----------------------------------------------------------
Prior to the Company's considering a merger with Memberlink,
on September 3, 1999, it had entered into Software and
Proprietary Product Corporate License Agreement ("License
Agreement), a Technical Service Agreement ("Technical
Agreement") and a Management Service Agreement ("Management
Agreement") with Memberlink for the use and exploitation of
certain proprietary software created by Memberlink. In
consideration for the license and the technical and management
support from Memberlink, the Company paid a $10,000 per month
management fee to Memberlink and issued an aggregate of
2,000,000 shares of its common stock to it's officers and to
key personnel responsible for the successful implementation
and customization of the proprietary software. Such shares
have been valued at $250,000 and charged to operations during
year ended December 31, 1999.
Due to the merger on December 30, 1999, the agreements are
deemed void and are no longer applicable since the Company's
is the surviving entity after the transaction.
f) Acquisition of Memberlink
-------------------------
Pursuant to the merger agreement, dated as of December 14,
1999 (with an effective date of December 30, 1999), the
Company issued 8,000,082 shares of its common stock in
exchange for all the issued and outstanding common stock of
Memberlink.
F - 14
<PAGE>
I-TRAX.COM, INC.
(FORMERLY U.S. MEDICAL ALLIANCE, INC.)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 9-- STOCKHOLDERS' EQUITY (cont'd)
e) Acquisition of Memberlink (cont'd)
----------------------------------
For accounting purposes the acquisition is treated as a
recapitalization of Memberlink with Memberlink as the acquirer
(reverse acquisition). The accompanying financial statements
reflect this merger as if it had occurred on January 1, 1998.
Such transactions are considered capital transactions whereby
Memberlink contributed its stock for the net assets of the
Company and accordingly, no goodwill is recorded. Upon
consummation of the merger on December 30, 1999, the previous
shareholders of Memberlink received 8,000,082 shares of the
Company's common stock, which represented 49.9% of the
outstanding common stock immediately after the issuance.
Simultaneously with the merger, Memberlink's former President
was elected as the Company's President. Upon consummation of
the merger transaction, all of the issued and outstanding
common stock of Memberlink was cancelled and, accordingly,
Memberlink ceased to exist with the Company being the
surviving entity.
NOTE 10-- SUBSEQUENT EVENTS
a) Sale of common stock
--------------------
On February 20, 2000, the Company sold an aggregate of
1,830,000 shares of its common stock at $1 per share yielding
net proceeds of approximately $1,780,000 after certain
offering expenses. Such shares were sold pursuant to Rule 506
of Regulation D promulgated under the Securities Act of 1933.
b) 2000 Equity Compensation Plan
-----------------------------
During February 2000, the Company established the 2000 Equity
Compensation Plan (the "Plan") to provide (i) designated
employees of the Company and its subsidiaries, (ii) certain
consultants and advisors who perform services for the Company
or its subsidiaries, and (iii) non-employee members of the
Board of Directors of the Company with the opportunity to
receive grants of incentive stock options, non-qualified stock
options and restricted stock.
The aggregate number of shares of common stock of the Company
that may be issued or transferred under the Plan is 3,000,000
shares. The maximum aggregate number of shares of that shall
be subject to grants made under the Plan to any individual
during any calendar year shall be 350,000 shares.
c) Termination of Employment Agreement
-----------------------------------
Effective April 4, 2000, the Company and an employee
responsible to act as in-house counsel for the Company,
executed an agreement of settlement for the termination of the
underlying employment agreement entered on June 1, 1999. The
Company agreed to pay $50,000 payable in $10,000 monthly
installments commencing April 15, 2000 for compensation. The
Company also agreed to arrange for the sale of 70,000 shares
of the employee's common stock in the Company at a price of
not less than $1.25 per share.
F-15
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Item 2. Description of Exhibits.
Exhibit
Number Description of Exhibit
- ---------- ---------------------------------------------------------
2.1 Agreement and Plan of Merger dated August 19, 1999 between
I-Trax.com, Inc. and Member-Link Systems, Inc.
3.1 Certificate of Incorporation of I-Trax.com, Inc.
3.2 Amended and Restated By-laws of I-Trax.com, Inc.
4.1 Form of Common Stock certificate of I-Trax.com, Inc.
4.2 I-Trax.com, Inc. 2000 Equity Compensation Plan.
10.1 Agreement between Member-Link Systems, Inc. and The Office of
the Attending Physician of The Capitol.
10.2 Software License Agreement between Member-Link Systems, Inc.
and Walter Reed Army Medical Center.
10.3 Office Lease dated October 22, 1999 by and between Reston
Plaza I & II, LLC and Member-Link Systems, Inc.
10.4 Consulting Agreement dated as of August 27, 1998, by and
between Member-Link Systems, Inc. and Enterprise Integration
Corporation.
10.5 Agreement to Hold Harmless and Indemnify dated September 2,
1999 between I-Trax.com, Inc. and Member-Link Systems, Inc.
10.6 Software and Proprietary Product Corporate License Agreement
dated September 1999 between I-Trax.com, Inc. and Member-Link
Systems, Inc.
10.7 Management Services Agreement dated September 3, 1999 between
I-Trax.com, Inc. and Member-Link Systems, Inc.
10.8 Technical Services Agreement dated September 3, 1999 between
I-Trax.com, Inc. and Member-Link Systems, Inc.
10.9 Software License Agreement dated October 1, 1999, by and
between Member-Link Systems, Inc. and Mobile Care Foundation.
10.10 License Agreement between Member-Link Systems, Inc. and Mobile
Care Foundation.
10.11 Agreement between Member-Link Systems, Inc. and Phoenix
Children's Hospital.
10.12 Consulting Agreement dated February 2, 2000 between
I-Trax.com, Inc. and Kenneth Jennings, Ph.D.
10.13 Employment Agreement dated November 29, 1999 between
I-Trax.com, Inc. and Michael O'Connell, M.D.
10.14 Employment Agreement dated June1, 1999 between Member-Link
Systems, Inc. and Hans C. Kastensmith.
10.15 Employment Agreement dated June1, 1999 between Member-Link
Systems, Inc. and David C. McCormack.
10.16 I-Trax.com, Inc. 2000 Equity Compensation Plan.
21.1 Subsidiaries of I-Trax.com, Inc.
23.1 Consent of Massella, Tomaro & Co., LLP.
27.1 Financial data schedule.
<PAGE>
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
Agreement entered into on as of December 14, 1999 by and
between I-Trax.com, Inc., a Delaware corporation ("I-Trax"), and Member-Link
Systems, Inc., a Delaware corporation ("Member-Link"). I-Trax and Member-Link
are referred to collectively herein as the "Parties."
This Agreement contemplates a tax-free merger of Member-Link
with and into I-Trax in a reorganization pursuant to Code Section 368(a)(1)(A).
Member-Link Stockholders will receive capital stock in I-Trax in exchange for
their capital stock in Member-Link. The issuance of I-Trax Shares in this
transaction is intended to qualify under Section 4(2) of the securities Act of
1933, as amended, and the regulations promulgated thereunder as a transaction
not requiring registration. The Parties expect that the Merger will further
certain of their business objectives and is in the best interest of their
stockholders.
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.
SECTION 1.
Definitions
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"I-Trax" has the meaning set forth in the preface above.
"I-Trax Share" means any share of the Common Stock, $0.001 par value
per share, of I-Trax.
"Certificate of Merger" has the meaning set forth in Section 2(c)
below.
"Closing" has the meaning set forth in Section 2(b) below.
"Closing Date" has the meaning set forth in Section 2(b) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
businesses and affairs of Member-Link and its Subsidiaries that is not already
generally available to the public.
"Conversion Ratio" has the meaning set forth in Section 2(d)(v) below.
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"Definitive I-Trax Proxy Materials" means the definitive proxy
materials relating to the Special I-Trax Meeting.
"Definitive Member-Link Proxy Materials" means the definitive proxy
materials relating to the Special Member-Link Meeting.
"Delaware General Corporation Law" means the General Corporation Law of
the State of Delaware, as amended.
"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Dissenting Share" means any Member-Link Share which any stockholder
who or which has exercised his or its appraisal rights under the Delaware
General Corporation Law holds of record.
"Effective Time" has the meaning set forth in Section 2(d)(i) below.
"Exchange Agent" has the meaning set forth in Section 2(e) below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Joint Disclosure Document" means the disclosure document combining the
Definitive I-Trax Proxy Materials, and the Definitive Member-Link Proxy
Materials.
"Member-Link-owned Share" means an aggregate of 3,000,000 shares of
I-Trax Shares issued and outstanding and held of record by Member-Link.
"Merger" has the meaning set forth in Section 2(a) below.
"Most Recent Fiscal Quarter End" has the meaning set forth in Section
3(f) below.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"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).
"Requisite I-Trax Stockholder Approval" means the affirmative vote or
consent of the holders of a majority of I-Trax Shares in favor of this Agreement
and the Merger in accordance with the applicable provisions of the Delaware
General Corporation Law.
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<PAGE>
"Requisite Member-Link Stockholder Approval" means the affirmative vote
or consent of the holders of a majority of Member-Link Shares in favor of this
Agreement and the Merger in accordance with the applicable provisions of the
Delaware General Corporation Law.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for taxes not yet due and payable or for taxes that
the taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Special I-Trax Meeting" has the meaning set forth in Section 5(c)(ii)
below.
"Special Member-Link Meeting" has the meaning set forth in Section
5(c)(ii) below.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Surviving Corporation" has the meaning set forth in Section 2(a)
below.
"Member-Link" has the meaning set forth in the preface above.
"Member-Link Share" means any share of the Common Stock, $0.001 par
value per share, of Member-Link.
"Member-Link Stockholder" means any Person who or which holds any
Member-Link Shares.
SECTION 2.
Basic Transaction.
(a) The Merger. On and subject to the terms and conditions of this
Agreement, Member-Link will merge with and into I-Trax (the "Merger") at the
Effective Time. I-Trax shall be the corporation surviving the Merger (the
"Surviving Corporation").
3
<PAGE>
(b) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Ballard Spahr
Andrews & Ingersoll, LLP in Philadelphia, Pennsylvania, commencing at 9:00 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"); provided, however, that the
Closing Date shall be no earlier than December 21, 1999.
(c) Actions at the Closing. At the Closing, (i) Member-Link will
deliver to I-Trax the various certificates, instruments, and documents referred
to in Section 6(a) below, (ii) I-Trax will deliver to Member-Link the various
certificates, instruments, and documents referred to in Section 6(b) below,
(iii) I-Trax and Member-Link will file with the Secretary of State of the State
of Delaware a Certificate of Merger in the form attached hereto as Exhibit A
(the "Certificate of Merger"), and (iv) I-Trax will deliver to the Exchange
Agent in the manner provided below in this Section 2 the certificate evidencing
I-Trax Shares issued in the Merger.
(d) Effect of Merger.
(i) General. The Merger shall become effective at the time
(the "Effective Time") I-Trax and Member-Link file the Certificate of Merger
with the Secretary of State of the State of Delaware. The Merger shall have the
effect set forth in the Delaware General Corporation Law. The Surviving
Corporation may, at any time after the Effective Time, take any action
(including executing and delivering any document) in the name and on behalf of
either I-Trax or Member-Link in order to carry out and effectuate the
transactions contemplated by this Agreement.
(ii) Certificate of Incorporation. The Certificate of
Incorporation attached to the Certificate of Merger will be filed together with
the Certificate of Merger and shall be the Certificate of Incorporation of the
Surviving Corporation upon the Closing of the Merger.
(iii) Bylaws. The Bylaws of I-Trax in effect at and as of the
Effective Time will remain the Bylaws of the Surviving Corporation without any
modification or amendment in the Merger.
(iv) Directors and Officers. The directors and officers of the
Surviving Corporation are listed on Exhibit B attached hereto.
(v) Conversion of Member-Link Shares. At and as of the
Effective Time, (A) each Member-Link Share (other than any Dissenting Share or
Member-Link-owned Share) shall be converted into the right to receive 4.4207
I-Trax Shares (the ratio of 4.4207 I-Trax Shares to one Member-Link Share is
referred to herein as the "Conversion Ratio"), (B) each Dissenting Share shall
be converted into the right to receive payment from the Surviving Corporation
with respect thereto in accordance with the provisions of the Delaware General
Corporation Law, and
4
<PAGE>
(C) each Member-Link-owned Share shall be canceled; provided, however, that the
Conversion Ratio shall be subject to equitable adjustment in the event of any
stock split, stock dividend, reverse stock split, or other change in the number
of Member-Link Shares outstanding. No Member-Link Share shall be deemed to be
outstanding or to have any rights other than those set forth above in this
Section 2(d)(v) after the Effective Time.
(vi) I-Trax Shares. Each I-Trax Share issued and outstanding
at and as of the Effective Time will remain issued and outstanding.
(e) Procedure for Payment.
(i) Immediately after the Effective Time, (A) I-Trax will
furnish to an entity that the Parties shall mutually designate (the "Exchange
Agent") a stock certificate (issued in the name of the Exchange Agent or its
nominee) representing that number of I-Trax Shares equal to the product of (I)
the Conversion Ratio times (II) the number of outstanding Member-Link Shares
(other than any Dissenting Shares and Member-Link-owned Shares) and (B) I-Trax
will cause the Exchange Agent to mail a letter of transmittal (with instructions
for its use) to each record holder of outstanding Member-Link Shares for the
holder to use in surrendering the certificates which represented his or its
Member-Link Shares in exchange for a certificate representing the number of
I-Trax Shares to which he or it is entitled.
(ii) I-Trax will not pay any dividend or make any distribution
on I-Trax Shares (with a record date at or after the Effective Time) to any
record holder of outstanding Member-Link Shares until the holder surrenders for
exchange his or its certificates which represented Member-Link Shares. I-Trax
instead will pay the dividend or make the distribution to the Exchange Agent in
trust for the benefit of the holder pending surrender and exchange. I-Trax may
cause the Exchange Agent to invest any cash the Exchange Agent receives from
I-Trax as a dividend or distribution in one or more investments which the
Parties shall mutually select; provided, however, that the terms and conditions
of the investments shall be such as to permit the Exchange Agent to make prompt
payments of cash to the holders of outstanding Member-Link Shares as necessary.
I-Trax may cause the Exchange Agent to pay over to I-Trax any net earnings with
respect to the investments, and I-Trax will replace promptly any cash which the
Exchange Agent loses through investments. In no event, however, will any holder
of outstanding Member-Link Shares be entitled to any interest or earnings on the
dividend or distribution pending receipt.
(iii) I-Trax may cause the Exchange Agent to return any I-Trax
Shares and dividends and distributions thereon remaining unclaimed 180 days
after the Effective Time, and thereafter each remaining record holder of
outstanding Member-Link Shares shall be entitled to look to I-Trax (subject to
abandoned property, escheat, and other similar laws) as a general creditor
thereof with respect to I-Trax Shares and dividends and distributions thereon to
which he or it is entitled upon surrender of his or its certificates.
(iv) I-Trax shall pay all charges and expenses of the Exchange
Agent.
5
<PAGE>
(f) Closing of Transfer Records. After the close of business on the
Closing Date, transfers of Member-Link Shares outstanding prior to the Effective
Time shall not be made on the stock transfer books of the Surviving Corporation.
SECTION 3.
Representations and Warranties of Member-Link
Member-Link represents and warrants to I-Trax that the statements
contained in this Section 3 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 3), except as set forth in the disclosure
schedule accompanying this Agreement and initialed by the Parties (the
"Disclosure Schedule"). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this
Section 3.
(a) Organization, Qualification, and Corporate Power. Each of
Member-Link and its Subsidiaries is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation. Each of Member-Link and its Subsidiaries is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required, except where the lack of such
qualification would not have a material adverse effect on the financial
condition of Member-Link and its Subsidiaries taken as a whole or on the ability
of the Parties to consummate the transactions contemplated by this Agreement.
Each of Member-Link and its Subsidiaries has full corporate power and authority
to carry on the businesses in which it is engaged and to own and use the
properties owned and used by it.
(b) Capitalization. The entire authorized capital stock of Member-Link
consists of (i) 10,000,000 Member-Link Shares, of which 1,147,318 Member-Link
Shares are issued and outstanding, 662,368 Member-Link Shares are reserved for
issuance upon the exercise of outstanding options, warrants and conversion
rights and no Member-Link Shares are held in treasury and (ii) 1,000,000 shares
of preferred stock, par value $.01 per share, none of which are issued or
outstanding. All of the issued and outstanding Member-Link Shares have been duly
authorized and are validly issued, fully paid, and nonassessable. Other than
outstanding options, warrants and conversion rights that will obligate
Member-Link to issue up to 662,368 Member-Link Shares, there are no outstanding
or authorized options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or commitments that could
require Member-Link to issue, sell, or otherwise cause to become outstanding any
of its capital stock. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to
Member-Link.
(c) Authorization of Transaction. Member-Link has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder; provided, however, that
Member-Link cannot consummate the Merger unless and until it receives the
Requisite Member-Link Stockholder Approval. This Agreement constitutes the valid
and legally binding obligation of Member-Link, enforceable in accordance with
its terms and conditions.
6
<PAGE>
(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which any of Member-Link and its Subsidiaries
is subject or any provision of the charter or bylaws of any of Member-Link and
its Subsidiaries or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument or other arrangement to which
any of Member-Link and 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 upon any of its assets). Other than in connection with the provisions
of the Delaware General Corporation Law, the Securities Act, and the state
securities laws, none of Member-Link and its Subsidiaries needs to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement, except where the
failure to give notice, to file, or to obtain any authorization, consent, or
approval would not have a material adverse effect on Member-Link and its
Subsidiaries taken as a whole or on the ability of the Parties to consummate the
transactions contemplated by this Agreement.
(e) No Bankruptcy or Similar Proceeding. Member-Link is not under the
jurisdiction of a court in a Title 11 or similar proceeding within the meaning
of Section 368(a)(3)(A) of the Code.
(f) Financial Statements. Attached to Schedule 3(f) are the following
financial statements (collectively the "Financial Statements"): (i) unaudited
consolidated and consolidating balance sheets and statements of income, changes
in shareholder's equity and cash flow as of and for the fiscal year ended
December 31, 1998 (the "Most Recent Fiscal Year End") for the Member-Link; and
(ii) unaudited consolidated and consolidating balance sheets and statements of
income, changes in shareholder's equity and cash flow (the "Most Recent
Financial Statements") as of and for the six months ended June 30, 1999 (the
"Most Recent Fiscal Period") for the Member-Link. The Financial Statements
(including the related notes and schedules) have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods covered thereby,
and present fairly the financial condition of Member-Link and its Subsidiaries
as of the indicated dates and the results of operations of Member-Link and its
Subsidiaries for the indicated periods, are correct and complete in all
respects, and are consistent with the books and records of Member-Link and its
Subsidiaries; provided, however, that the interim statements are subject to
normal year-end audit adjustments.
(g) Events Subsequent to Most Recent Fiscal Quarter End. Since the Most
Recent Fiscal Year End, there has not been any material adverse change in the
business, financial condition, operations, results of operations, or future
prospects of Member-Link and its Subsidiaries taken as a whole.
7
<PAGE>
(h) Undisclosed Liabilities. None of Member-Link and its Subsidiaries
has 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, except for liabilities that would not have a material adverse effect on
Member-Link and its Subsidiaries taken as a whole, or except for: (i)
liabilities set forth on the face of the balance sheet dated as of the Most
Recent Fiscal Year End (rather than in any notes thereto); and (ii) liabilities
which have arisen after the Most Recent Fiscal Year 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).
(i) Brokers' Fees. None of Member-Link 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.
(j) Continuity of Business Enterprise. Member-Link operates at least
one significant historic business line, or owns at least a significant portion
of its historic business assets, in each case within the meaning of Section
1.368-1(d) of the Treasury Regulations.
(k) Disclosure. The Definitive Member-Link Proxy Materials will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they will be made, not misleading; provided, however,
that Member-Link makes no representation or warranty with respect to any
information that I-Trax will supply specifically for use in the Definitive
Member-Link Proxy Materials. None of the information that Member-Link will
supply specifically for in the Definitive I-Trax Proxy Materials will contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they will be made, not misleading.
(l) Interested Stockholder. All issuances by Member-Link of Member-Link
Shares, options, warrants and convertible securities to The Nantucket Group LLC
or its Affiliates were approved in advance by the board of directors of
Member-Link.
(m) Nature of Liabilities. The liabilities of Member-Link assumed by
I-Trax and the liabilities to which the transferred assets of Member-Link are
subject were incurred by Member-Link in its Ordinary Course of Business. The
fair market value of the assets of Member-Link transferred to I-Trax will equal
or exceed the sum of the liabilities assumed by I-Trax, plus the amount of
liabilities, if any, to which the transferred assets are subject. The total
adjusted basis of the assets of Member-Link transferred to I-Trax will equal or
exceed the sum of the liabilities assumed by I-Trax, plus the amount of
liabilities, if any, to which the transferred assets are subject. The
liabilities of Member-Link will not exceed the tax basis of the assets of
Member-Link transferred to I-Trax by more than the net operating loss
carryforward of the tax year of Member-Link ending at the Effective Time.
8
<PAGE>
SECTION 4.
Representations and Warranties of I-Trax
I-Trax represents and warrants to Member-Link that the statements
contained in this Section 4 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 4), except as set forth in the Disclosure
Schedule. The Disclosure Schedule will be arranged in paragraphs corresponding
to the numbered and lettered paragraphs contained in this Section 4.
(a) Organization. I-Trax is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation.
(b) Capitalization. The entire authorized capital stock of I-Trax
consists of 50,000,000 I-Trax Shares, of which 10,698,334 I-Trax Shares are
issued and outstanding and no I-Trax Shares are held in treasury. All of I-Trax
Shares to be issued in the Merger have been duly authorized and, upon
consummation of the Merger, will be validly issued, fully paid, and
nonassessable.
(c) Authorization of Transaction. I-Trax has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder; provided, however, that
I-Trax cannot consummate the Merger unless and until it receives the Requisite
I-Trax Stockholder Approval. This Agreement constitutes the valid and legally
binding obligation of I-Trax, enforceable in accordance with its terms and
conditions.
(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which I-Trax is subject or any provision of the
charter or bylaws of I-Trax 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 I-Trax is a party or by which it is bound or to which any of its assets
is subject. Other than in connection with the provisions of the Delaware General
Corporation Law, the Securities Act, and the state securities laws, I-Trax 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.
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<PAGE>
(e) Brokers' Fees. I-Trax 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 for which any of Member-Link and its
Subsidiaries could become liable or obligated.
(f) Continuity of Business Enterprise. It is the present intention of
I-Trax to continue at least one significant historic business line of
Member-Link, or to use at least a significant portion of Member-Link's historic
business assets in a business, in each case within the meaning of Section
1.368-1(d) of the Treasury Regulations.
(g) Disclosure. The Definitive I-Trax Proxy Materials will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they will be made, not misleading; provided, however,
that I-Trax makes no representation or warranty with respect to any information
that Member-Link will supply specifically for use in the Definitive I-Trax Proxy
Materials. None of the information that I-Trax will supply specifically for use
in the Definitive Member-Link Proxy Materials will contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
will be made, not misleading.
(h) Undisclosed Liabilities. None of I-Trax and its Subsidiaries has
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, except for liabilities that would not have a material adverse effect on
I-Trax and its Subsidiaries taken as a whole.
(i) Absence of Plans of Acquisition or Disposition. Neither I-Trax nor
any corporation that is related to I-Trax (within the meaning of Section
1.368-1(e)(3) of the Treasury Regulations) has any plan or intention to redeem
or acquire any of the I-Trax Shares issued in the Merger. I-Trax has no plan or
intention to sell or otherwise dispose of any of the assets of Member-Link
acquired in the Merger, except for dispositions made in its Ordinary Course of
Business or transfers described in Section 368(a)(2)(C) of the Code.
SECTION 5.
Covenants
The Parties agree as follows with respect to the period from and after
the execution of this Agreement and until the Closing.
(a) General. Each of the Parties will use its reasonable best efforts
to take all action and to do all things necessary, proper, or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Section 6 below).
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(b) Notices and Consents. Member-Link will give any notices (and will
cause each of its Subsidiaries to give any notices) to third parties, and will
use its reasonable best efforts to obtain (and will cause each of its
Subsidiaries to use its reasonable best efforts to obtain) any third party
consents, that I-Trax reasonably may request in connection with the matters
referred to in Section 3(d) above.
(c) Regulatory Matters and Approvals. Each of the Parties will (and
Member-Link will cause each of its Subsidiaries to) give any notices to, make
any filings with, and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in Section 3(d) and Section 4(d)
above. Without limiting the generality of the foregoing:
(i) Securities Act and State Securities Laws. Member-Link and
I-Trax will prepare and distribute to Member-Link stockholders certain
information to permit the Member-Link stockholders to consider and vote upon
the Merger and required for the offering and issuance of I-Trax Shares to
Member-Link stockholders pursuant to this Merger to comply with certain
exemptions from registration under Section 4(2) of the Securities Act and the
regulations promulgated thereunder relating to the Special Member-Link Meeting
and the Special I-Trax Meeting. I-Trax will provide Member-Link, and Member-Link
will provide I-Trax, with whatever information and assistance in connection with
the foregoing matters as the other Party reasonably may request. I-Trax will
take all actions that may be necessary, proper, or advisable under state
securities laws in connection with the offering and issuance of I-Trax Shares.
(ii) Delaware General Corporation Law. Member-Link will call a
special meeting of its stockholders (the "Special Member-Link Meeting") as soon
as reasonably practicable in order that the stockholders may consider and vote
upon the adoption of this Agreement and the approval of the Merger in accordance
with the Delaware General Corporation Law; provided, however, that Member-Link
may, in lieu of calling a Special Member-Link Meeting, obtain approval of the
Merger by its stockholders in such other manner as shall be consistent with the
provisions of the Delaware General Corporate Law. I-Trax will call a special
meeting of its stockholders (the "Special I-Trax Meeting") as soon as reasonably
practicable in order that the stockholders may consider and vote upon the
adoption of this Agreement and the approval of the Merger in accordance with the
Delaware General Corporation Law; provided, however, that I-Trax may, in lieu of
calling a Special I-Trax Meeting, obtain approval of the Merger by its
stockholders in such other manner as shall be consistent with the provisions of
the Delaware General Corporate Law. If required, the Parties will mail the Joint
Disclosure Document to their respective stockholders simultaneously and as soon
as reasonably practicable. The Joint Disclosure Document will contain the
affirmative recommendations of the respective boards of directors of the Parties
in favor of the adoption of this Agreement and the approval of the Merger;
provided, however, that no director or officer of either Party shall be required
to violate any fiduciary duty or other requirement imposed by law in connection
therewith.
(d) Joint Disclosure Document. The Parties will cooperate in good faith
in the preparation of the Joint Disclosure Document.
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(e) Listing of I-Trax Shares. The I-Trax Shares that will be issued in
the Merger shall not be registered under the Securities Act or approved for
listing on any stock market. I-Trax will use its reasonable commercial efforts
to register the shares on a "piggy back" basis when and if I-Trax shall register
any I-Trax Shares under the Securities Act, other than of Forms 4 or S-8.
(f) Operation of Business. Member-Link will not (and will not cause or
permit any of its Subsidiaries to) engage in any practice, take any action, or
enter into any transaction outside the Ordinary Course of Business. Without
limiting the generality of the foregoing:
(i) none of Member-Link and its Subsidiaries will authorize or
effect any change in its charter or bylaws;
(ii) none of Member-Link and its Subsidiaries will grant any
options, warrants, or other rights to purchase or obtain any of its capital
stock or issue, sell, or otherwise dispose of any of its capital stock (except
upon the conversion or exercise of options, warrants, and other rights currently
outstanding);
(iii) none of Member-Link and its Subsidiaries will declare,
set aside, or pay any dividend or distribution with respect to its capital stock
(whether in cash or in kind), or redeem, repurchase, or otherwise acquire any of
its capital stock, in either case outside the Ordinary Course of Business;
(iv) none of Member-Link and its Subsidiaries will issue any
note, bond, or other debt security or create, incur, assume, or guarantee any
indebtedness for borrowed money or capitalized lease obligation outside the
Ordinary Course of Business;
(v) none of Member-Link and its Subsidiaries will impose any
Security Interest upon any of its assets outside the Ordinary Course of
Business;
(vi) none of Member-Link and its Subsidiaries will make any
capital investment in, make any loan to, or acquire the securities or assets of
any other Person outside the Ordinary Course of Business;
(vii) none of Member-Link and its Subsidiaries will make any
change in employment terms for any of its directors, officers, and employees
outside the Ordinary Course of Business; and
(viii) none of Member-Link and its Subsidiaries will commit to
any of the foregoing.
(g) Full Access. Member-Link will (and will cause each of its
Subsidiaries to) permit representatives of I-Trax to have full access at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of Member-Link and its Subsidiaries, to all
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premises, properties, personnel, books, records (including tax records),
contracts, and documents of or pertaining to each of Member-Link and its
Subsidiaries. I-Trax will treat and hold as such any Confidential Information it
receives from any of Member-Link and its Subsidiaries in the course of the
reviews contemplated by this Section 5(g), will not use any of the Confidential
Information except in connection with this Agreement, and, if this Agreement is
terminated for any reason whatsoever, agrees to return to Member-Link all
tangible embodiments (and all copies) thereof which are in its possession.
(h) Notice of Developments. Each Party will give prompt written notice
to the other of any material adverse development causing a breach of any of its
own representations and warranties in Section 3 and Section 4 above and its
inability to comply with any of the covenants in Section 5. No disclosure by any
Party pursuant to this Section 5(h), however, shall be deemed to amend or
supplement the Disclosure Schedule or to prevent or cure any misrepresentation,
breach of warranty, or breach of any covenant in this Section 5.
(i) Exclusivity. Member-Link will not (and will not cause or permit any
of its Subsidiaries to) solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to the acquisition of all or
substantially all of the capital stock or assets of any of Member-Link and its
Subsidiaries (including any acquisition structured as a merger, consolidation,
or share exchange); provided, however, that Member-Link, its Subsidiaries, and
their directors and officers will remain free to participate in any discussions
or negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing to the extent their fiduciary duties
may require. Member-Link shall notify I-Trax immediately if any Person makes any
proposal, offer, inquiry, or contact with respect to any of the foregoing.
(j) Insurance and Indemnification.
(i) I-Trax will provide each individual who served as a
director or officer of Member-Link at any time prior to the Effective Time with
liability insurance for a period of 3 years after the Effective Time no less
favorable in coverage and amount than any applicable insurance in effect
immediately prior to the Effective Time.
(ii) I-Trax, as the Surviving Corporation in the Merger, will
observe any indemnification provisions now existing in the certificate of
incorporation or bylaws of Member-Link for the benefit of any individual who
served as a director or officer of Member-Link at any time prior to the
Effective Time.
(k) Continuity of Business Enterprise. I-Trax will continue at least
one significant historic business line of Member-Link, or use at least a
significant portion of Member-Link's historic business assets in a business, in
each case within the meaning of Section 1.368-1(d) of the Treasury Regulations,
except that I-Trax may transfer Member-Link's historic business assets (i) to a
corporation that is a member of I-Trax's "qualified group," within the meaning
of Section 1.368-1(d)(4)(ii) of the Treasury Regulations, or (ii) to a
partnership if (A) one or more members
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of I-Trax's "qualified group" have active and substantial management functions
as a partner with respect to Member-Link's historic business or (B) members of
I-Trax's "qualified group" in the aggregate own an interest in the partnership
representing a significant interest in Member-Link's historic business, in each
case within the meaning of Section 1.368-1(d)(4)(iii) of the Treasury
Regulations.
SECTION 6.
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) this Agreement and the Merger shall have received the
Requisite Member-Link Stockholder Approval and the number of Dissenting Shares
shall not exceed 10% of the number of outstanding Member-Link Shares;
(ii) Member-Link and its Subsidiaries shall have procured all
of the third party consents specified in Section 5(b) above;
(iii) 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;
(iv) Member-Link shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing;
(v) 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 wherein
an unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement,
(B) cause any of the transactions contemplated by this Agreement to be rescinded
following consummation, (C) affect adversely the right of the Surviving
Corporation to own the former assets, to operate the former businesses, and to
control the former Subsidiaries of Member-Link, or (D) affect adversely the
right of any of the former Subsidiaries of Member-Link to own its assets and to
operate its businesses (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);
(vi) Member-Link shall have delivered to I-Trax a certificate
to the effect that each of the conditions specified above in Section 6(a)(i)-(v)
is satisfied in all respects;
(vii) this Agreement and the Merger shall have received the
Requisite I-Trax Stockholder Approval;
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(viii) the Parties shall have received all other
authorizations, consents, and approvals of governments and governmental agencies
referred to in Section 3(d) and Section 4(d) above;
(ix) I-Trax shall have received from counsel to Member-Link an
opinion in form and substance as set forth in Exhibit C attached hereto,
addressed to I-Trax, and dated as of the Closing Date;
(x) I-Trax shall have received the resignations, effective as
of the Closing, of each director and officer of Member-Link and its Subsidiaries
other than those whom I-Trax shall have specified in writing at least five (5)
business days prior to the Closing; and
(xi) all actions to be taken by Member-Link in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
I-Trax.
I-Trax may waive any condition specified in this Section 6(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of Member-Link. The obligation of
Member-Link to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(i) this Agreement and the Merger shall have received the
Requisite I-Trax Stockholder Approval;
(ii) the representations and warranties set forth in Section 4
above shall be true and correct in all material respects at and as of the
Closing Date;
(iii) I-Trax shall have performed and complied with all of its
covenants hereunder in all material respects through the 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 wherein
an unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement,
(B) cause any of the transactions contemplated by this Agreement to be rescinded
following consummation, (C) affect adversely the right of the Surviving
Corporation to own the former assets, to operate the former businesses, and to
control the former Subsidiaries of Member-Link, or (D) affect adversely the
right of any of the former Subsidiaries of Member-Link to own its assets and to
operate its businesses (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);
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(v) I-Trax shall have delivered to Member-Link a certificate
to the effect that each of the conditions specified above in Section
6(b)(i)-(iv) is satisfied in all respects;
(vi) this Agreement and the Merger shall have received the
Requisite Member-Link Stockholder Approval;
(vii) the Parties shall have received all other
authorizations, consents, and approvals of governments and governmental agencies
referred to in Section 3(d) and Section 4(d) above;
(viii) Member-Link shall have received from counsel to I-Trax
an opinion in form and substance as set forth in Exhibit D attached hereto,
addressed to Member-Link, and dated as of the Closing Date;
(ix) 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
Member-Link.
Member-Link may waive any condition specified in this Section 6(b) if
it executes a writing so stating at or prior to the Closing.
SECTION 7.
Termination
(a) Termination of Agreement. Either of the Parties may terminate this
Agreement with the prior authorization of its board of directors (whether before
or after stockholder approval) as provided below:
(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Effective Time;
(ii) I-Trax may terminate this Agreement by giving written
notice to Member-Link at any time prior to the Effective Time (A) in the event
Member-Link has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, I-Trax has notified
Member-Link 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 30, 1999, by reason of the failure of any
condition precedent under Section 6(a) hereof (unless the failure results
primarily from I-Trax breaching any representation, warranty, or covenant
contained in this Agreement);
(iii) Member-Link may terminate this Agreement by giving
written notice to I-Trax at any time prior to the Effective Time (A) in the
event I-Trax has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect,
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Member-Link 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 30, 1999, by reason of the
failure of any condition precedent under Section 6(b) hereof (unless the failure
results primarily from Member-Link breaching any representation, warranty, or
covenant contained in this Agreement); or
(iv) any Party may terminate this Agreement by giving written
notice to the other Party at any time after the Special I-Trax Meeting or the
Special Member-Link Meeting in the event this Agreement and the Merger fail to
receive the Requisite I-Trax Stockholder Approval or the Requisite Member-Link
Stockholder Approval, respectively.
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 7(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach); provided, however, that
the confidentiality provisions contained in Section 5(g) above shall survive any
such termination.
SECTION 8.
Miscellaneous
(a) Survival. None of the representations, warranties, and covenants of
the Parties (other than the provisions in Section 2 above concerning issuance of
I-Trax Shares, the provisions in Section 5(j) above concerning insurance and
indemnification) will survive the Effective Time.
(b) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other Party; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use its
[reasonable] best efforts to advise the other Party prior to making the
disclosure).
(c) 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; provided, however, that (i) the provisions in
Section 2 above concerning issuance of I-Trax Shares and are intended for the
benefit of Member-Link Stockholders and (ii) the provisions in Section 5(j)
above concerning insurance are intended for the benefit of the individuals
specified therein and their respective legal representatives.
(d) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they related in any way to the subject
matter hereof.
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(e) 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 its
rights, interests, or obligations hereunder without the prior written approval
of the other Party.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) 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.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to Member-Link:
Member-Link Systems, Inc.
12020 Sunrise Valley Drive, Suite 350
Reston, VA 20191
Attention: James Kevin Wholey, General Counsel
Facsimile: (703) 860-1855
If to I-Trax:
I-Trax.com, Inc.
12020 Sunrise Valley Drive, Suite 350
Reston, VA 20191
Attention: Frank A. Martin
Facsimile: (703) 860-1855
Copy to:
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103
Attention: Justin P. Klein, Esq.
Facsimile: (215) 864-8538
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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 Party
notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.
(j) Amendments and Waivers. The Parties may mutually amend any
provision of this Agreement at any time prior to the Effective Time with the
prior authorization of their respective boards of directors; provided, however,
that any amendment effected subsequent to stockholder approval will be subject
to the restrictions contained in the Delaware General Corporation Law. No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by both of the Parties. 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.
(k) 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.
(l) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
(m) 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 otherwise requires. The
word "including" shall mean including without limitation.
(n) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
as of the date first above written.
I-TRAX.COM, INC.
By: /s/ Frank A. Martin
-----------------------------------
Name: Frank A. Martin
Title:
MEMBER-LINK SYSTEMS, INC.
By: /s/ Hans C. Kastensmith
-----------------------------------
Name: Hans C. Kastensmith
Title:
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Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
I-TRAX.COM, INC.
FIRST: The name of the Corporation is I-TRAX.COM, INC. (the
"Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, Delaware 19801, in the County of New Castle. The name of its
registered agent at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is 52,000,000 shares, of which (i) 50,000,000 shares are
designated as Common Stock, $0.001 par value per share, and (ii) 2,000,000
shares are designated as Preferred Stock, $0.001 par value per share. The Board
of Directors of the Corporation is authorized, by resolution or resolutions and
subject to limitations prescribed by law and the provisions of this Article, to
provide for the issuance of shares of Preferred Stock, in one or more series or
class, and, by filing a statement pursuant to the General Corporation Law of
Delaware, to establish from time to time the number of shares to be included in
each such series or class and to fix the designations, powers, preferences and
rights of the shares of each such series or class and the qualifications,
limitations or restrictions thereof.
FIFTH: The Board of Directors is authorized to amend, alter, change or
repeal the Bylaws of the Corporation.
SIXTH: A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit. If the Delaware General Corporation Law is hereafter amended
to authorize the further elimination or limitation of the liability of
directors, then the liability of the directors of the Corporation, in addition
to the limitation on personal liability provided herein, shall be limited to the
fullest
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extent permitted by the amended Delaware General Corporation Law. Any repeal or
modification of this paragraph by the stockholders of the Corporation shall be
prospective only, and shall not adversely affect any limitation on the personal
liability of a director of the Corporation at the time of such repeal or
modification.
SEVENTH: A. Each person who was or is a party or is threatened to be
made a party to or is involved in any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgements, fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement) actually and reasonably incurred or suffered by such person
in connection therewith, and such indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of his or her heirs, executors and administrators; provided,
however, that, except as provided in Paragraph B hereof, the Corporation shall
indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the Board of Directors of the Corporation.
The right to indemnification conferred in this Article SEVENTH shall be a
contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the Delaware General Corporation Law
requires, the payment of such expenses incurred by a director or officer in his
or her capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Article SEVENTH
or otherwise. The Corporation may, by action of its Board of Directors, provide
indemnification to employees and agents of the Corporation with the same scope
and effect as the foregoing indemnification of directors and officers.
B. If a claim under Paragraph A of this Article SEVENTH is not paid in
full by the Corporation within thirty days after a written claim has been
received by the Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid
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also the expense of prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it permissible under
the Delaware General Corporation Law for the Corporation to indemnify the
claimant for the amount claimed, but the burden of providing such defense shall
be on the Corporation. Neither the failure of the Corporation (including its
Board of Directors, independent legal counsel, or its stockholders) to have made
a determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
C. The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Article SEVENTH shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
D. The Corporation may maintain insurance, at its expense, to protect
itself and any person who is or was a director, officer, employee or agent of
the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any such expense, liability or loss,
whether or not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the Delaware General Corporation
Law.
EIGHTH: Meetings of the stockholders may be held within or without the
State of Delaware, as the Bylaws may provide. The books of the Corporation may
be kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the Board of Directors or in the Bylaws of the Corporation. Elections of
directors need not be by written ballot unless the Bylaws of the Corporation
shall so provide.
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Exhibit 3.2
AMENDED AND RESTATED BYLAWS
OF
I-TRAX.COM, INC.
ARTICLE I
OFFICES
Section 1. The registered office of the Corporation in the
State of Delaware shall be as stated in the Certificate of Incorporation or at
such other location in the State of Delaware to which the registered office
shall be changed by action of the Board of Directors.
Section 2. The Corporation may also have offices at such other
places both within and without the State of Delaware as the Board of Directors
may from time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election
of directors shall be held at such place either within or without the State of
Delaware as shall be designated from time to time by the Board of Directors and
stated in the notice of the meeting. Meetings of stockholders for any other
purpose may be held at such time and place, within or without the State of
Delaware, as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof.
Section 2. Annual meetings of stockholders shall be held at
such date and time as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting, at which they shall elect by
a plurality vote a Board of Directors and transact such other business as may
properly be brought before the meeting.
Section 3. Written notice of the annual meeting stating the
place, date and hour of the meeting shall be given to each stockholder entitled
to vote at such meeting not less than ten (10) nor more than sixty (60) days
before the date of the meeting.
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Section 4. The officer who has charge of the stock ledger of
the Corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 5. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the Chairman or the President and
shall be called by the President or Secretary at the request in writing of a
majority of the Board of Directors, or at the request in writing of stockholders
owning a majority of the stock of the Corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
Section 6. Written notice of a special meeting stating the
place, date and hour of the meeting and the purpose or purposes for which the
meeting is called, shall be given not less than ten nor more than sixty days
before the date of the meeting, to each stockholder entitled to vote at such
meeting.
Section 7. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 8. Meetings of the stockholders shall be presided over
by one of the following officers in the order of seniority and if present and
acting -- the Chairman of the Board of Directors, the Vice-Chairman of the Board
of Directors, the President, a Vice-President, or, if none of the foregoing is
in office and present and acting, by a chairman of the meeting to be chosen by
the stockholders. The order of business and all other matters of procedure at
every meeting of the stockholders shall be determined by such presiding
individual. The Secretary of the Corporation, or in his absence, an Assistant
Secretary, shall act as secretary of every meeting, but if neither the Secretary
nor an Assistant Secretary is present, the chairman of the meeting shall appoint
a secretary of the meeting. Business transacted at any special meeting shall be
limited to the purposes stated in the notice of such meeting.
Section 9. The Board of Directors, in advance of any meeting,
shall appoint one or more inspectors of election or judges of the vote, as the
case may be, to act at the meeting or any adjournment thereof and to make a
written report thereof. The Board of Directors may designate one or more persons
as alternate inspectors or judges to replace any inspector or judge who fails to
act. If an inspector or judge is not appointed, the person presiding at the
meeting shall appoint one or more inspectors or judges to act at the meeting.
Each inspector or judge, before entering upon the discharge of his duties, shall
take and sign an oath faithfully to execute
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the duties of inspector or judge at such meeting with strict impartiality and
according to the best of his ability. The inspectors or judges shall (i)
determine the number of shares of stock outstanding and the voting power of
each, (ii) determine the shares of stock represented at the meeting, (iii)
determine the existence of a quorum, (iv) determine the validity and effect of
proxies, (v) receive votes, ballots or consents, (vi) hear, determine and retain
for a reasonable period of record of the disposition of any challenges made to
any determination by the inspectors, (vii) certify their determination of the
number of shares represented at the meeting, and their count of all votes and
ballots, and (viii) do such acts as are proper to conduct the election or vote
with fairness to all stockholders. The inspectors or judges may appoint or
retain other persons or entities to assist the inspectors or judges in the
performance of their duties.
Section 10. The holders of a majority of the stock issued and
outstanding and entitled to vote, present in person or represented by proxy,
shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
Certificate of Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote, present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 11. When a quorum is present at any meeting, the vote
of the holders of a majority of the stock having voting power present in person
or represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the Certificate of Incorporation a different vote is required, in which case
such express provision shall govern and control the decision of such question.
Section 12. Unless otherwise provided in the Certificate of
Incorporation, each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted or
acted upon after three years from its date, unless the proxy provides for a
longer period. A duly executed proxy shall be irrevocable if it states that it
is irrevocable and, if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A proxy may be made
irrevocable regardless of whether the interest with which it is coupled is an
interest in the stock itself or an interest in the Corporation generally.
Section 13. Unless otherwise provided in the Certificate of
Incorporation, any action required to be taken at any annual or special meeting
of stockholders of the Corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent or consents in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock
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having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted; provided, however, that the election of
directors of the Corporation by less than unanimous consent or consents in
writing shall comply with the applicable provisions of the General Corporation
Law of Delaware. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
Section 14.
(a) To be properly brought before an annual meeting
of stockholders, business must be (i) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (ii)
otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (iii) otherwise properly brought before the meeting by a
stockholder. In addition to any other applicable requirements for business to be
properly brought before an annual meeting by a stockholder pursuant to clause
(iii) of the preceding sentence, the stockholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice must be given, either by personal delivery or by U.S. mail,
postage prepaid, or by a nationally recognized overnight courier service to the
Secretary of the Corporation not later than 120 days in advance of the
anniversary date of the Corporation's proxy statement for the Corporation's
annual meeting of stockholders in the previous calendar year. A stockholder's
notice to the Secretary shall set forth as to each matter the stockholder
proposes to bring before the annual meeting (1) a brief description of the
business desired to be brought before the annual meeting (including the specific
proposal to be presented) and the reasons for conducting such business at the
annual meeting, (2) the name and record address of the stockholder proposing
such business, (3) the class and number of shares of the Corporation that are
beneficially owned by the stockholder and (4) any material interest of the
stockholder in such business.
(b) In the event that a stockholder attempts to bring
business before an annual meeting without complying with the provisions of this
section, the chairman of the meeting shall declare to the meeting that the
business was not properly brought before the meeting in accordance with the
foregoing procedures, and such business shall not be transacted. The chairman of
any annual meeting, for good cause shown and with proper regard for the orderly
conduct of business at the meeting, may waive in whole or in part the operation
of this section.
(c) No business shall be conducted at the annual
meeting except in accordance with the procedures set forth in this section;
provided, however, that nothing in this section shall be deemed to preclude
discussion by any stockholder of any business properly brought before the annual
meeting.
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ARTICLE III
DIRECTORS
Section 1. The business and affairs of the Corporation shall
be managed by or under the direction of its Board of Directors which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by these
Bylaws directed or required to be exercised or done by the stockholders.
Section 2. The number of directors which shall constitute the
Board of Directors shall be set by resolution of the Board. The directors shall
be elected at the annual meeting of the stockholders, except as provided in
Section 3 of this Article, and each director elected shall hold office until his
or her successor is elected and qualified or until his or her earlier
resignation or removal. Directors need not be stockholders.
Section 3. Vacancies and newly created directorships resulting
from any increases in the authorized number of directors may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director, and the directors so chosen shall hold office until the
next annual election and until their successors are duly elected and shall
qualify, unless sooner displaced. If there are no directors in office, then an
election of directors may be held in the manner provided by the General
Corporation Law of Delaware. If, at the time of filling any vacancy or any newly
created directorship, the directors then in office shall constitute less than a
majority of the whole Board (as constituted immediately prior to any such
increase), the Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten percent (10%) of the total number of the
shares at the time outstanding having the right to vote for such directors,
summarily order an election to be held to fill any such vacancies or newly
created directorships, or to replace the directors chosen by the directors then
in office.
Section 4. Nominations for the election of directors shall be
made by the Board of Directors or a committee appointed by the Board of
Directors or by any stockholder entitled to vote in the election of directors
generally. However, any stockholder entitled to vote in the election of
directors generally may nominate one or more persons for election as directors
at a meeting only if written notice of such stockholder's intent to make such
nomination or nominations has been given, either by personal delivery or by U.S.
mail, postage prepaid, to the Secretary of the Corporation not later than (a)
with respect to an election to be held at an annual meeting of stockholders, 120
days in advance of the anniversary date of the Corporation's proxy statement for
the Corporation's annual meeting of stockholders in the previous calendar year,
and (b) with respect to an election to be held at a special meeting of
stockholders for the election of directors, the close of business on the tenth
(10th) day following the date on which notice of such meeting is first given to
stockholders. Each notice shall set forth: (i) the name and address under which
the stockholder who intends to make the nomination appears on the Corporation's
books
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and the name and address of the person or persons to be nominated; (ii) the
class and number of shares of the Corporation's capital stock that are
beneficially owned by the stockholder and a representation that the stockholder
intends to appear in person or by proxy at the meeting to nominate the person or
persons specified in the notice; (iii) a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (iv) such other information
regarding each nominee proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission, had the nominee been nominated, or intended
to be nominated, by the Board of Directors; and (v) the consent of each nominee
to serve as a director of the Corporation if so elected. The chairman of the
meeting may refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure. The chairman of any such meeting, for
good cause shown and with proper regard for the orderly conduct of business at
the meeting, may waive in whole or in part the operation of this section.
MEETINGS OF THE BOARD OF DIRECTORS
Section 5. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 6. The first meeting of each newly elected Board of
Directors shall be held at such time and place as shall be fixed by the vote of
the stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
Board of Directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 7. Regular meetings of the Board of Directors may be
held without notice at such time and at such place as shall from time to time be
determined by the Board.
Section 8. Special meetings of the Board may be called by the
President on one day's notice to each director, either personally or by mail,
telephone, telex, telecopier or telegram; special meetings shall be called by
the President or Secretary in like manner and on like notice on the written
request of two directors unless the Board consists of only one director, in
which case special meetings shall be called by the President or Secretary in
like manner and on like notice on the written request of the sole director.
Section 9. At all meetings of the Board a majority of the
directors shall constitute a quorum for the transaction of business and the act
of a majority of the directors present at any
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meeting at which there is a quorum shall be the act of the Board of Directors,
except as may be otherwise specifically provided by the General Corporation law
of Delaware or by the Certificate of Incorporation. If a quorum shall not be
present at any meeting of the Board of Directors the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 10. Unless otherwise restricted by the Certificate of
Incorporation or these Bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the Board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or committee.
Section 11. Unless otherwise restricted by the Certificate of
Incorporation or these Bylaws, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 12.
(a) The Board of Directors may, by resolution passed
by a majority of the whole Board, designate one or more committees, including an
Audit Committee, a Nominating Committee and a Compensations Committee, each such
committee to consist of one or more of the directors of the Corporation. The
Board of Directors may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting
of such committee.
(b) In the absence or disqualification of a member of
a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he, she or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
(c) Any committee, to the extent provided in the
resolution of the Board of Directors, shall have and may exercise all the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it; provided, however, that no committee
shall have the power or authority in reference to (i) approving or adopting, or
recommending to the stockholders, any action or matter expressly required by law
to be submitted to the stockholders for approval, or (ii) adopting, amending or
repealing any bylaw.
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Such committee or committees shall have such name or names as may be determined
from time to time by resolution adopted by the Board of Directors.
Section 13. Each committee shall keep regular minutes of its
meetings and report the same to the Board of Directors when required.
COMPENSATION OF DIRECTORS
Section 14. Unless otherwise restricted by the Certificate of
Incorporation or these Bylaws, the Board of Directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
REMOVAL OF DIRECTORS
Section 15. Unless otherwise restricted by the Certificate of
Incorporation or by law, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of shares then
entitled to vote at an election of directors.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the General
Corporation Law of Delaware or of the Certificate of Incorporation or of these
Bylaws, notice is required to be given to any director or stockholder, it shall
not be construed to mean personal notice, but such notice may be given in
writing, by mail, addressed to such director or stockholder, at his address as
it appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to directors may also be given by
telephone, telex, telecopier or telegram.
Section 2. Whenever any notice is required to be given under
the provisions of the General Corporation Law of Delaware or of the Certificate
of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
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ARTICLE V
OFFICERS
Section 1. The officers of the Corporation shall be a
Chairman, a President, a Secretary and a Treasurer or persons who shall act as
such, regardless of the name or title by which they may be designated, elected
or appointed. The Corporation may also have one or more Vice Presidents and such
other officers and assistant officers as the Board of Directors may choose. Any
number of offices may be held by the same person, unless the Certificate of
Incorporation or these Bylaws otherwise provide.
Section 2. The officers and assistant officers shall be chosen
by the Board of Directors at its first meeting after each annual meeting of
stockholders and shall hold office until their successors are elected and
qualified or until their earlier resignation or removal.
Section 3. The Board of Directors may appoint such other
officers and agents as it shall deem necessary who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board.
Section 4. Any officer elected or appointed by the Board of
Directors may be removed at any time by the affirmative vote of a majority of
the Board of Directors. Any vacancy occurring in any office of the Corporation
shall be filled by the Board of Directors.
Section 5. The salaries of all officers and agents of the
Corporation shall be fixed by the Board of Directors.
THE CHAIRMAN
Section 6. The Chairman shall be the Chief Executive Officer
of the Corporation, shall have active executive management of its operations and
shall preside at all meetings of the Board of Directors and stockholders.
THE PRESIDENT
Section 7. The President shall have and active management of
the business of the Corporation, subject, however to the control of the Board of
Directors. The President shall, in general, perform all duties incident to the
office of President and such other duties as may be assigned by the Board of
Directors.
Section 8. The President shall execute bonds, mortgages and
other contracts requiring a seal, under the seal of the Corporation, except
where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly delegated by
the Board of Directors to some other officer or agent of the Corporation.
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THE VICE PRESIDENTS
Section 9. In the absence of the President or in the event of
his inability or refusal to act, and if a Vice President has been appointed by
the Board of Directors, the Vice President (or in the event there be more than
one Vice President, the Vice Presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. The Vice Presidents shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 10. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the stockholders and record all the
proceedings of the meetings of the Corporation and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. He or she shall give, or cause to be given,
notice of all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors or President. The Secretary shall have custody of the corporate
seal of the Corporation and the Secretary, or an Assistant Secretary, shall have
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his signature or by the signature of such assistant
Secretary. The Board of Directors may give general authority to any other
officer to affix the seal of the Corporation and to attest the affixing by his
signature.
Section 11. The Assistant Secretary, or if there be more than
one, the Assistant Secretaries in the order determined by the Board of Directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the Secretary or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the Secretary
and shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 12. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors.
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Section 13. The Treasurer shall disburse the funds of the
Corporation as may be ordered by the Board of Directors, taking proper vouchers
for such disbursements, and shall render to the Chairman, the President and the
Board of Directors, at its regular meetings or when the Board of Directors so
requires, an account of all of that transaction of the Treasurer in his or her
capacity as such and of the financial condition of the Corporation.
Section 14. If required by the Board of Directors, the
Treasurer shall give the Corporation a bond (which shall be renewed every six
years) in such sum and with such surety or sureties as shall be satisfactory to
the Board of Directors for the faithful performance of the duties of this office
and for the restoration to the Corporation, in case of the Treasurer's death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his possession or under his control
belonging to the Corporation.
Section 15. The Assistant Treasurer, or if there shall be more
than one, the Assistant Treasurers in the order determined by the Board of
Directors (or if there be no such determination, then in the order of their
election) shall, in the absence of the Treasurer or in the event of the
Treasurer's inability or refusal to act, perform the duties and exercise the
powers of the Treasurer and shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
ARTICLE VI
CERTIFICATES FOR SHARES
Section 1.
(a) The shares of the Corporation shall be
represented by a certificate, provided that the Board of Directors may provide,
by resolution or resolutions, that some or all of any or all classes or series
of its stock shall be uncertificated shares. Certificates shall be signed by, or
in the name of the Corporation by, the Chairman or Vice-Chairman of the Board of
Directors, or the President or any Vice President, and the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
Corporation.
(b) Within a reasonable time after the issuance or
transfer of uncertificated stock, the Corporation shall send to the registered
owner thereof a written notice containing the information required to be set
forth or stated on certificates pursuant to Sections 151, 156, 202(a) or 218(a)
of the General Corporation Law of Delaware or a statement that the Corporation
will furnish without charge to each stockholder who so requests the powers,
designations, preferences and relative participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
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Section 2. Any of or all the signatures on a certificate may
be facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue.
Section 3. The Corporation may, but shall not be required to,
issue fractions of a share as provided by the General Corporation Law of
Delaware.
LOST CERTIFICATES
Section 4. The Board of Directors may direct a new certificate
or certificates or uncertificated shares to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates or
uncertificated shares, the Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate alleged
to have been lost, stolen or destroyed.
TRANSFER OF STOCK
Section 5. Upon surrender to the Corporation or the transfer
agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books. Upon receipt of proper transfer instructions from
the registered owner of uncertificated shares, such uncertificated shares shall
be canceled and issuance of new equivalent uncertificated shares or certificated
shares shall be made to the person entitled thereto and the transaction shall be
recorded upon the books of the Corporation.
FIXING RECORD DATE
Section 6. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than
12
<PAGE>
sixty (60) nor less than ten (10) days before the date of such meeting, nor more
than sixty (60) days prior to any other action. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
REGISTERED STOCKHOLDERS
Section 7. The Corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the Certificate of
Incorporation.
Section 2. Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the directors shall think conducive to the interest of
the Corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
ANNUAL STATEMENT
Section 3. The Board of Directors shall present at each annual
meeting, and at any special meeting of the stockholders when called for by vote
of the stockholders, a full and clear statement of the business and condition of
the Corporation.
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<PAGE>
CHECKS
Section 4. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the Corporation shall be fixed
by resolution of the Board of Directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the
name of the Corporation, the year of its organization and the words "Corporate
Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
INDEMNIFICATION
Section 7. The Corporation shall indemnify its officers and
directors to the fullest extent permitted by the General Corporation Law of
Delaware.
ARTICLE VIII
AMENDMENTS
Section 1. These Bylaws may be altered, amended or repealed or
new bylaws may be adopted by the stockholders or by the Board of Directors, when
such power is conferred upon the Board of Directors by the Certificate of
Incorporation, at any regular meeting of the stockholders or of the Board of
Directors or at any special meeting of the stockholders or of the Board of
Directors if notice of such alteration, amendment, repeal or adoption of new
bylaws be contained in the notice of such special meeting. If the power to
adopt, amend or repeal bylaws is conferred upon the Board of Directors by the
Certificate of Incorporation it shall not divest or limit the power of the
stockholders to adopt, amend or repeal bylaws.
14
<PAGE>
Exhibit 4.1
Number Shares
IT
See reverse for
certain definitions
I-TRAX.COM INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
COMMON STOCK CUSIP 45069D 10 4
THIS CERTIFIED THAT:
is owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK
OF $.001 PAR VALUE EACH OF
I-TRAX.COM INC.
transferable on the books of the Corporation in person or by attorney upon
surrender of this certificate duly endorsed or assigned. This certificate and
the shares represented hereby are subject to the laws of the State of Delaware,
and to the Certificate of Incorporation and Bylaws of the Corporation, as now or
hereafter amended. This certificate is not valid until countersigned by the
Transfer Agent.
WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
DATED: [SEAL] COUNTERSIGNED:
STOCK TRANS, INC.
7 EAST LANCASTER AVE.
ARDMORE, PA 19003
TRANSFER AGENT
BY:
AUTHORIZED SIGNATURE
SECRETARY PRESIDENT
1
<PAGE>
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT -.........Custodian.........
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with rights of under Uniforms Gifts to Minors
survivorship and not as tenants
in common
</TABLE>
Additional abbreviations may also be used though not in the above list.
For Value Received, __________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_________________________________
_________________________________
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
________________________________________________________________________________
_________________________________________________________________________ Shares
of the stock represented by the within Certificate, and do hereby irrevocably
constitute and appoint
_______________________________________________________________ Attorney to
transfer the said stock on the books of the within named Corporation with full
power of substitution in the premises.
Dated ____________________
________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER.
THE CORPORATION WILL FURNISH TO ANY STOCKHOLDER, UPON REQUEST AND WITHOUT
CHARGE, A FULL STATEMENT OF THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES AND
LIMITATIONS OF THE SHARES OF EACH CLASS AND SERIES AUTHORIZED TO BE ISSUED, SO
FAR AS THE SAME HAVE BEEN DETERMINED, AND OF THE AUTHORITY, IF ANY, OF THE BOARD
TO DIVIDE THE SHARES INTO CLASSES OR SERIES AND TO DETERMINE AND CHANGE THE
RELATIVE RIGHTS, PREFERENCES AND LIMITATIONS OF ANY CLASS OR SERIES. SUCH
REQUEST MAY BE
2
<PAGE>
MADE TO THE SECRETARY OF THE CORPORATION OR TO THE TRANSFER AGENT NAMED ON THIS
CERTIFICATE.
________________________________________________________________________________
THE SIGNATURE TO THE ASSIGNMENT MUST CORRESPOND TO THE NAME AS WRITTEN UPON THE
FACE OF THIS CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST
COMPANY OR A MEMBER FIRM OF NATIONAL OR REGIONAL OR OTHER RECOGNIZED STOCK
EXCHANGE IN CONFORMANCE WITH A SIGNATURE GUARANTEE MEDALLION PROGRAM.
3
<PAGE>
Exhibit 10.1
AGREEMENT
This Agreement for the Purchase of Software and Provision of Services
("Agreement") is made as of the date indicated below by and between Member-Link
Systems, Inc., a Delaware corporation ("MLS") with its principal offices at
Reston Plaza 350, 12020 Sunrise Valley Drive, Reston, VA 20191, and The Office
of the Attending Physician of The Capitol ("OAP"), located in the United States
Capitol, Washington DC 20510.
OAP desires to purchase from MLS, and obtain MLS' services in
installing in the configuration set forth in MLS' Proposal to OAP (incorporated
herein by reference). MLS' I-Trax(R) and AsthmaWatch(R) disease management and
monitoring software and data interfaces using MLS' Medicive(R) database system
and software (collectively, "Software") and specified hardware. For its part,
MLS desires to license the Software to OAP, and provide the specified hardware
and installation services. MLS and OAP therefore AGREE as follows:
A. Incorporation of License Agreements. The Software is being licensed by MLS to
OAP in accordance with the terms of the License Agreements ("Licenses")
separately executed between the parties. The parties hereby agree that the
Licenses, incorporated herein by reference, are part, and shall constitute
essential terms of, this Agreement. As specified therein, nothing in this or any
other Agreement between the parties shall be construed as creating any ownership
interest in the Software in any party other than MLS.
B. Tasks and Scope of Performance, Limitations. In order to ensure the proper,
orderly and efficient installation of its products MLS will perform the
installation of the Software and related tasks in seven phases as set out in its
Proposal to OAP, as modified by the Purchase Order provided to MLS. They are:
1. Creation of the OAP User Interface
2. Integration of Legacy Data
3. Development of Reports and Unique Reports Formats
4. Installation and Integration of the Software, and Hardware
(i) It is understood and agreed that MLS' ability properly to perform
the above tasks is necessarily dependent upon the active and timely cooperation
of PCH and its agents, and their accomplishment of predicate tasks. MLS will
neither be liable for, nor subject to any actual or consequential damages
alleged to result from, delays in implementation caused by the mis- or
non-performance of any party under the control of OAP.
1
<PAGE>
(ii) Pursuant to this Agreement, MLS personnel will remain available to
project site personnel for a period of one year to provide ongoing system
support and address residual issues, either on-site or through an established
dial-in connection to the system. Such service beyond that period, or additional
services, may be obtained from MLS at a contracted hourly rate. Further, as set
forth in the License Agreements, MLS' own licensed software is warranted to be
free from defects for one year, during which period MLS will provide OAP with
any upgraded versions of such software at no additional cost to OAP. Nothing in
this provision may be construed as creating any warranties in excess of those
specified in the provisions of the Licenses referenced in C, below.
(iii) It is anticipated that all installation work and initial testing
to be performed under this Agreement will be completed on or before March 1,
2000.
C. Disclaimer of Warranty. The Software and all services are subject to the
Limitations on Warranty contained in Section 7 of the Medicive(R)License
Agreements and Sections 10 and 11 of the application software (AsthmaWatch(R)and
I-Trax.(R)) License Agreements.
D. Consideration; Payment. OAP agrees that, in consideration of the goods,
services and licenses provided by MLS under this Agreement, it shall pay MLS
$263,913.10. This price is not inclusive of additional contract services
provided by MLS at OAP's discretion. It is further agreed that one-half (1/2) of
that sum, or $131,956.55, is due upon execution of this Agreement and/or
execution of the Licenses, with the remainder to be tendered upon completion of
the installation.
E. No Agency Relationship. Nothing in this or any of the component Agreements
shall be interpreted as creating any relationship other than that of vendor or
independent contractor.
F. Disputes. Any disputes arising under this Agreement that the parties are
unable to resolve between them may be submitted to nonbinding arbitration
without jeopardizing their respective remedies in law or equity.
G. Jurisdiction; Assignment; Integration; Severability. This Agreement shall be
construed and enforced in accordance with the laws of the State of Virginia.
Neither this Agreement nor any interest in this Agreement may be assigned by
either party without the express written consent of the other. This Agreement,
and the agreements and Licenses incorporated herein, supersedes all prior
documents or understandings on this subject matter, and may be modified only by
a writing executed by both parties. If any term of this Agreement is held
invalid or unenforceable, this Agreement and all remaining terms will remain in
full force and effect as if such invalid or unenforceable term had never been
included. Failure to enforce any particular provision of this Agreement at any
time shall not constitute a waiver of that or any other term or provision of
this Agreement, or future enforcement thereof
2
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
written below.
Member-Link Systems, Inc. Office of The Attending Physician
of The Capitol
By: /s/ Hans C. Kastensmith By:_________________________________
-----------------------------
Hans C. Kastensmith,
President
Date:____________________________ Date:_______________________________
3
<PAGE>
Exhibit 10.2
HeartWatch(R)
Software License Agreement
This License Agreement ("Agreement") between Member-Link Systems Inc., a New
York Corporation, ("Developer") and Walter Reed Army Medical Center
("Licensee").
The Developer has developed and licenses to users its electronic medical records
management system marketed under the name Medicive ( the "System"), which
consists of independent networked software packages, namely HeartWatch and
Medicive Server.
The Licensee desires to utilize a copy of the HeartWatch software ("Software").
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
Developer and licensee agree as follows:
1. License. Developer hereby grants to Licensee a perpetual, non-exclusive,
limited license to use the Software in its Cardiology facilities as set
forth in this Agreement.
2. The Software. The Software shall consist of the modules or components, shall
perform the functions and shall comply with the proposals and
specifications, identified or set forth on Schedule A, annexed hereto. Each
Software module or component, specification and proposal included or
referred to in Schedule A is expressly incorporated by reference herein.
3. Restriction. Licensees shall not modify, copy, duplicate, reproduce, license
or sublicense the Software, or transfer or convey the Software or any right
in the Software to anyone else without the prior written consent of
Developer; provided that Licensee may make one copy of the software for
backup or archival purposes. Licensee shall not install the software on any
network, file server, virtual disk, time sharing, multiple CPU, other
multi-user, bulletin board, or remotely accessible arrangement other than on
a local area network within Licensee's organization, provided Licensee has
paid the license fee for each user of the Software on such network.
The SOFTWARE and documentation are provided with RESTRICTED RIGHTS. The Use,
Duplication, or Disclosure by the Government is subject to restrictions as set
forth in subdivision (c)(1)(ii) of the Rights in Technical Data and Computer
Software clause at DFAR 252.227-7013 or restricted rights clauses at 48 CFR
52.227-19 or 52.227-14, as applicable. Contractor/ Manufacturer is Member-Link
Systems Inc., 1615 L Street, N.W., Suite 1150, Washington, D.C. 20036.
4. Warranty of Title. Developer hereby represents and warrants to Licensee that
Developer is the owner of the Software or otherwise has the right to grant
to Licensee the rights set
1
<PAGE>
forth in this Agreement. In the event of any breach of the foregoing
representation and warranty, Licensee's sole remedy shall be to require
Developer or to either: i) procure, at Developer's expense, the right to use
the Software, ii) replace the Software or any part thereof that is in breach
and replace it with Software of comparable functionality that does not cause
any breach, or iii) refund to Licensee the full amount of the license fee
upon the return of the Software and all copies thereof to Developer.
5. Payment. Payments under this Agreement shall be tendered by Licensee in
accordance with the Statement of Work tendered to Licensee by Developer and
in the amounts set forth on the Purchase Order to Philips Medical Systems
N.A. assigned to Licensee's contract with that party, both of which
documents are incorporated herein by reference.
6. Ownership. Developer shall retain title to the Software and to all the
documentation, data and information relating to the Software given by or
disclosed to Licensee. Developer shall own and possess all rights, title and
interest in the Software. Developer expressly has the right to reproduce,
publish, sell, license, and distribute the Software to anyone in accordance
with the terms of this Agreement.
7. Copyright. The Software is owned by the Developer and its suppliers and
contains confidential and proprietary information. The Software is
copyrighted and protected by United States copyright laws and International
treaty provisions. You are allowed to make one backup copy of the software
provided that this copyright and proprietary notice is included.
8. AMA License and CPT & ICD 9 Updates. The Software includes versions of CPT
and ICD 9 codes copyrighted by the American Medical Association. The AMA
license requires an annual fee of $32 and after the first year will be the
responsibility of the end user. In return, the AMA will provide updates as
they become available.
9. Optional Customization. Developer shall use its best efforts, consistent
with Developer's staffing, scheduling and business constraints, to provide
additional services and customization of the Software in accordance with
Licensee's requests from time to time. Such services as to customization
shall be contracted for separately at Developer's customary time and
materials charges then in effect. If Developer determines, in its sole
discretion, that any customizations requested by Licensee are of sufficient
general value to the Software's general use to include in the Software or in
future updates of the Software, Developer shall perform such customization
at no charge to Licensee.
10. Warranty Disclaimer. DEVELOPER'S WARRANTIES SET FORTH IN THIS AGREEMENT ARE
EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
2
<PAGE>
11. Limitation of Liability. Developer shall not be responsible for, and shall
not pay, any amount of incidental, consequential or other indirect damages,
whether based on lost revenue or otherwise, regardless of whether Developer
was advised of the possibility of such losses in advance. In no event shall
Developer's liability hereunder exceed the amount of license fees paid by
Licensee, regardless of whether Licensee's claim is based on contract, tort,
strict liability, product liability or otherwise.
12. Notice. Any notice required by this Agreement or given in connection with
it, shall be in writing and shall be given to the appropriate party by
personal delivery or by certified mail, postage prepaid, or recognized
overnight delivery services.
If to Developer:
Member-Link Systems, Inc.
1615 L Street, N.W., Suite 1150
Washington, DC 20036
If to Licensee:
Col. Marina Vernalis, USA MC
Walter Reed Army Medical Center
Washington, DC
13. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the District of Columbia.
14. No Assignment. Neither this Agreement nor any interest in this Agreement may
be assigned by Licensee without the prior express written approval of
Developer.
15. Final Agreement. This Agreement terminates and supersedes all prior
understandings or agreements on the subject matter hereof. This Agreement
may be modified only by a further writing that is duly executed by both
parties.
16. Severability. If any term of this Agreement is held by a court of competent
jurisdiction to be invalid or unenforceable, then this Agreement, including
all of the remaining terms, will remain in full force and effect as if such
invalid or unenforceable term had never been included.
17. Headings. Headings used in this Agreement are provided for convenience only
and shall not be used to construe meaning or intent.
3
<PAGE>
IN WITNESS WHEREOF, Developer and Licensee have executed this Software License
Agreement on the day and year first above written.
Member-Link Systems, Inc. For Walter Reed Army Medical Center
By: /s/ Hans C. Kastensmith By:_________________________________
-------------------------------
Hans Kastensmith
President
Date______________________________ Date________________________________
4
<PAGE>
Exhibit 10.3
OFFICE LEASE
by and between
RESTON PLAZA I & II, LLC,
("Landlord")
and
MEMBER-LINK SYSTEMS, INC.
("Tenant")
i
<PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
1. DEMISE....................................................................1
2. LEASE TERM................................................................1
3. RENT......................................................................2
4. PERMITTED USE.............................................................3
5. EXPENSES..................................................................4
6. ADDITIONAL RENT...........................................................5
7. SORTING AND SEPARATION OF REFUSE AND TRASH................................6
8. HAZARDOUS SUBSTANCES......................................................7
9. INSURANCE.................................................................8
10. DAMAGE OR DESTRUCTION....................................................10
11. INDEMNIFICATION..........................................................10
12. ASSIGNMENT AND SUBLETTING................................................11
13. CARE OF PREMISES.........................................................13
14. ALTERATION BY TENANT.....................................................13
15. CONDEMNATION.............................................................13
16. SUBORDINATION............................................................14
17. ACCESS TO PREMISES.......................................................14
18. RULES AND REGULATIONS....................................................15
19. COVENANTS OF RIGHT TO LEASE..............................................15
20. MECHANICS LIENS..........................................................15
21. EXPIRATION OF LEASE AND SURRENDER OF POSSESSION..........................15
22. DEFAULT-REMEDIES.........................................................16
- i -
<PAGE>
Section Page
- ------- ----
23. RE-ENTRY BY LANDLORD.....................................................19
24. ADDITIONAL RIGHTS TO LANDLORD............................................20
25. SUCCESSORS, ASSIGNS AND LIABILITY........................................20
26. NOTICES..................................................................20
27. MORTGAGEE'S APPROVAL.....................................................21
28. ESTOPPEL CERTIFICATES....................................................21
29. DEFAULT RATE OF INTEREST.................................................21
30. EXCULPATORY PROVISIONS...................................................21
31. MORTGAGE PROTECTION......................................................22
32. RECIPROCAL COVENANT ON NOTIFICATION OF ADA VIOLATIONS....................22
33. LAWS THAT GOVERN.........................................................22
34. FINANCIAL STATEMENTS.....................................................22
35. PARKING..................................................................23
36. SIGNAGE..................................................................23
37. RECORDATION..............................................................23
38. FORCE MAJEURE............................................................23
39. LANDLORD'S LIEN..........................................................23
40. BROKERS..................................................................24
41. CONFIDENTIALITY..........................................................24
42. LEASE/DEED OF LEASE......................................................24
43. MISCELLANEOUS............................................................24
EXHIBIT A - Premises
EXHIBIT B - Improvements
- ii -
<PAGE>
Section Page
- ------- ----
EXHIBIT C - Declaration of Lease Commencement
EXHIBIT D - Rules and Regulations
- iii -
<PAGE>
OFFICE LEASE AGREEMENT
THIS OFFICE LEASE AGREEMENT ("Lease") is made by and between RESTON
PLAZA I & II, LLC, whose address for the purpose of this Lease shall be 801
Grand Avenue, Des Moines, Iowa 50392-1360, hereinafter referred to as
"Landlord," and MEMBER-LINK SYSTEMS, INC. whose address for the purpose of this
Lease shall be 12020 Sunrise Valley Drive, Reston, Virginia 20191, hereinafter
referred to as "Tenant."
IT IS AGREED AS FOLLOWS:
1. DEMISE.
Landlord does hereby lease to Tenant and Tenant does hereby lease from
Landlord the premises consisting of approximately 6,455 square feet of
net rentable area (the "Premises") located in the property known as
Reston Plaza II at 12020 Sunrise Valley Drive, Reston, Virginia (the
"Property"). The Premises is located within the Property specifically
identified on the plan attached hereto and marked Exhibit "A" as
incorporated herein by reference. The Premises does not include the
roof or exterior surfaces of the walls of the Premises or the Property,
or any improvements or areas outside of such walls, all of which are
reserved for Landlord's exclusive use.
Improvements. Tenant to accept premises in as-is condition. Landlord
will clean carpet and re-key suite at Landlord's sole cost and expense.
2. LEASE TERM.
The term of this Lease shall be for a period of sixty (60) months,
commencing on the 15th day of October, 1999 ("Commencement Date") and
ending at midnight on the 31st day of October, 2004 ("Lease Term"). If
for any reason Landlord cannot deliver possession of the Premises to
the Tenant on or before the Commencement Date, Tenant shall not be
obligated to pay Rent until possession of the Premises is tendered to
Tenant. In such event, the Lease Term shall be extended so that the
term remains sixty (60) months. If the Commencement Date occurs, or the
Premises are delivered, on a date other than the first day of the
month, Rent for that month shall be prorated and the Lease Term shall
be extended so that the term shall be sixty (60) months from the first
day of the following month. In the event that delivery of possession
results from Tenant's failure to perform work for which Tenant is
responsible, or Tenant fails to finish or approve the plans and
specifications as provided above, or fails to make timely selections of
materials, color choices or other matters for which Tenant is
responsible, Rent and Additional Rent shall, nonetheless, commence on
the Commencement Date. If Tenant occupies the Premises prior to the
Commencement Date, such occupancy shall be subject to all provisions
hereof and shall not advance the last day of the Lease Term, and Tenant
shall pay Rent for such period at the initial monthly rate set forth
below.
At the request of Landlord, Tenant hereby agrees to execute a
declaration in the form attached hereto as Exhibit C ("Declaration") as
incorporated herein by reference. Tenant's failure to
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<PAGE>
execute the Declaration shall not affect the Commencement Date or the
Lease Term, as same are determined by the terms of this Lease.
3. RENT.
a. Rent. Tenant shall pay for the use and occupancy of the
Premises a base rental ("Rent") as set forth in the following
schedule:
Annual Base Rent
Months Monthly Rent Per Square Foot
------ ------------ ---------------
10/15-10/31/99 $6,723.96 $25.00
1-12 $13,447.92 $25.00
13-24 $13,851.35 $25.75
25-36 $14,265.55 $26.52
37-48 $14,695.88 $27.32
49-60 $15,146.98 $28.14
Rent shall be paid on the first day of each month in advance without
demand, notice, deduction, offset, or counterclaim during the Lease
Term. Rent for any period during the Lease Term which is less than one
month shall be a pro rata portion of the monthly installment. Rent
shall be payable in lawful money of the United States to Landlord at
the address stated herein or to such other persons or at such other
places as Landlord may designate in writing.
b. Cost-of-Living Adjustment. INTENTIONALLY DELETED.
c. Place of Payment. Rent, Additional Rent and other sums owed by
Tenant shall be paid to Landlord at Reston Plaza I & II, LLC,
c/o First Tennessee Bank, PO Box 1000, Department 149,
Memphis, TN 38148-0149 or at such place as Landlord may
designate from time to time in writing.
d. Late Charge. Tenant hereby acknowledges that late payment by
Tenant of Rent, Additional Rent or other sums due hereunder
will cause Landlord to incur costs not contemplated by this
Lease. Therefore, if any installment of Rent, Additional Rent
or any other sum due from Tenant shall not be received by
Landlord within five (5) days of when such amount is due,
Tenant shall pay to Landlord a late charge of six percent (6%)
of such overdue amount for each and every month that said
amounts due hereunder are not paid or are late beyond five (5)
days after the due date for such amounts. Additionally, Tenant
shall pay to Landlord the Default Rate (as set forth in
Section 29) on all sums in default. Acceptance of such late
charge and/or the Default Rate by Landlord shall in no event
constitute a waiver of Tenant's default with respect to such
overdue amount, or prevent Landlord from exercising any other
right or remedy available to Landlord.
e. Receipt. Receipt is hereby acknowledged of the sum of Thirteen
Thousand Four Hundred Forty Seven and 92/100 Dollars
($13,447.92) in payment of the Rent for the first month of the
Lease Term.
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<PAGE>
f. Security Deposit. Tenant shall deposit with Landlord upon
execution hereof Forty Thousand Three Hundred Forty Three and
76/100 Dollars ($40,343.76) in immediately available funds as
security for Tenant's faithful performance of Tenant's
obligations hereunder ("Security Deposit"). If Tenant fails to
pay Rent, Additional Rent or other charges due hereunder or
otherwise defaults with respect to any provision of the Lease,
Landlord may use, apply or retain all or any portion of the
Security Deposit for the payment of any Rent, Additional Rent
or other charge in default or for the payment of any other sum
to which Landlord may become obligated, or which Landlord may
incur, by reason of Tenant's default, or to compensate
Landlord for any loss or damage which Landlord may suffer
thereby. If Landlord so uses or applies all or any portion of
the Security Deposit, Tenant shall within ten (10) days after
written demand therefor deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to the full
amount herein above stated and Tenant's failure to do so shall
be a material breach of this Lease. Landlord shall not be
required to keep the Security Deposit separate from its
general accounts. If Tenant performs all of Tenant's
obligations hereunder, the Security Deposit, or so much
thereof as has not theretofore been applied by Landlord, shall
be returned, without payment of interest or other increment
for its use, to Tenant (or at Landlord's option, to the last
assignee, if any, of Tenant's interest hereunder) within
ninety (90) days of the later of (i) the last day of the Lease
Term, (ii) the date Tenant vacated the Premises, or (iii) the
date Tenant has fulfilled all its obligations hereunder. No
trust relationship is created herein between Landlord and
Tenant regarding the Security Deposit.
Notwithstanding the foregoing, so long as the Tenant is not in
default of the Lease, Tenant shall have a right to reduce the
amount of the Security Deposit by Thirteen Thousand Four
Hundred Forty Seven and 92/100 Dollars ($13,447.92) at the end
of the twelfth (12th) month of the Lease Term, so that the
amount of Twenty Six Thousand Eighty Hundred Ninety Five and
84/100 Dollars ($26,895.84) shall remain as the Security
Deposit for the remainder of the Lease Term.
Tenant hereby agrees not to look to any mortgagee as
mortgagee, mortgagee-in-possession or successor in title to
the Premises for accountability for the Security Deposit
unless the Security Deposit has actually been received by said
mortgagee as security for Tenant's performance of this Lease.
Landlord may deliver the Security Deposit to any purchaser of
Landlord's interest in the Premises, and thereupon Landlord
shall be discharged from any further liability with respect to
the Security Deposit.
g. Pro Rata Share. Tenant's pro rata share is 13.20% ("Pro Rata
Share").
4. PERMITTED USE.
Tenant covenants that the Premises will be used solely for general
office purposes ("Permitted Use"). Tenant further covenants that the
Premises will not be used or occupied for any unlawful purposes. Tenant
agrees to and shall use the Premises solely for the purpose of
conducting the Permitted Use and for no other business or purpose.
Tenant also agrees not to conduct any catalogue, mail or telephone
order sales in or from the Premises, except of merchandise which Tenant
is permitted to sell "over the counter" in the Premises. Tenant agrees
to conduct Tenant's business in the Premises under Tenant's Trade Name,
which Tenant represents that it has the
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right to use. Tenant acknowledges that the Permitted Use is not a use
granted exclusively to Tenant and that Landlord reserves the right to
lease premises in the Property to others for the same or a similar
permitted use. Tenant further acknowledges that it has received no
written or oral inducements from Landlord or any of Landlord's
representatives concerning this Lease (other than as specifically set
forth herein) or that Tenant will be granted any such exclusive rights.
Tenant shall not commit or allow to be committed any waste upon the
Premises, or any public or private nuisance or any other act or thing
which disturbs the quiet enjoyment of any other tenant in the Property.
5. EXPENSES.
a. Taxes
i. Landlord shall pay all taxes applicable to the
Property which are payable during the Lease Term.
ii. As used herein, the term "taxes" shall mean real
estate taxes, assessments (whether general or
special), sewer rents, rates and charges, transit and
transit district taxes, taxes based upon the receipt
of Rent or other payments hereunder, and any other
federal, state or local governmental charge, general,
special, ordinary or extraordinary (but not including
income or franchise taxes or any other taxes imposed
upon or measured by Landlord's income or profits,
except as provided herein), which may now or
hereafter be levied, assessed or imposed against the
Property or Premises ("Taxes"). Additionally,
Landlord shall have no obligation to protest Taxes,
but if Landlord does protest Taxes, the cost of such
protest shall also be deemed Taxes.
b. Landlord shall provide insurance for the Property as set forth
in Subsection 9(A) ("Insurance"). Should Landlord choose to
self-insure, the cost of maintaining such self insurance shall
be considered a part of Insurance. In no event will the cost
exceed the cost of maintaining first dollar coverage.
c. Landlord shall provide for the following as they relate to the
Property and the Premises: (1) trash removal; (2) landscaping;
(3) property management; (4) all other labor costs, supply
costs and other costs or services of any kind or nature deemed
necessary or prudent by Landlord; and (5) the maintenance,
repair and/or replacement of the Property and improvements as
follows: (a) the roof; (b) all interior and exterior
components of the Property and improvements both structural or
otherwise; (c) parking lot, (d) sidewalks, alleys and any and
all access drives, including the removal of snow and ice
therefrom; (e) heating and air conditioning equipment, lines
and fixtures; (f) plumbing equipment, lines and fixtures,
including but not limited to fire sprinkler and fire control
systems (if any); (g) electrical equipment, lines and
fixtures; (h) all other utility equipment, lines and fixtures;
(i) all ingress-egress doors to the Property; (j) exterior
plate glass; (k) elevator equipment, lines and fixtures (if
any); and (l) any and all other maintenance, repairs and/or
replacements to the Property and improvements deemed necessary
or prudent by Landlord during the Lease Term. Landlord shall
also permit Tenant access to the Property and Premises
twenty-four (24) hours per day, three hundred sixty-five (365)
days per year.
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d. Landlord shall pay all utility bills incurred including but
not limited to water, gas, electricity, fuel, light, heat and
power bills. In the event Tenant requests and Landlord
provides any of the foregoing services or any other services
to Tenant at times outside normal working hours (any time
other than 8:00 a.m. to 6:00 p.m. Monday through Friday and
9:00 a.m. to 1:00 p.m. Saturday, specifically excluding
Sundays and Holidays), then Landlord shall have the right to
bill Tenant and Tenant agrees to pay for such additional
services. For purposes of this provision, "Holidays" shall
include New Year's Day, Memorial Day, July 4th, Labor Day,
Thanksgiving, Christmas and other federal and state holidays.
Landlord shall also have the right to require a separate meter
be installed at Landlord's sole cost and expense to meter
Tenant's utility usage within the Premises. Following
installation of said meter, Tenant shall pay for such utility
usage in a timely manner to either Landlord or directly to the
utility as determined by the Landlord. Landlord shall not be
liable for any failure to furnish, or for any loss, injury or
damage caused by or resulting from any variation, interruption
or failure of utility services.
e. Tenant, at Tenant's sole expense, shall comply with all laws,
rules, orders, ordinances, directions, regulations and
requirements of federal, state, county, and municipal
authorities now in force or which may hereafter be in force,
which shall impose any duty upon the Landlord or Tenant with
respect to the use, occupancy or alteration of the Premises.
f. Notwithstanding anything to the contrary contained herein, the
Tenant will keep, maintain and preserve the Premises in a
first class condition. The Landlord will provide window
washing for the interior of the Premises. At the Tenant's sole
cost and expense, the Landlord will make all interior repairs
and replacements including but not limited to interior walls,
doors and windows, floors, floor coverings, light bulbs (other
than building standard light bulbs which will be provided by
Landlord), plumbing fixtures, and electrical fixtures. Tenant
will also reimburse to Landlord, at Tenant's sole cost and
expense, costs to repair or replace any broken windows and/or
damage to the Property or Premises caused by the negligence or
willful misconduct of the Tenant or its employees, agents,
guests or invitees during the Lease Term. Tenant shall comply
with all laws, ordinances, rules or regulations of any
governmental authority required of either the Landlord or the
Tenant relative to the repair, maintenance and replacement in
the Premises.
g. All items in Subsections 5(B), 5(C) and 5(D) shall be referred
to as "Operating Expenses".
6. ADDITIONAL RENT.
a. It is understood that Rent was negotiated in anticipation that
Tenant would not be required to pay increased Rent as a result
of Taxes imposed with respect to Calendar Year 2000 ("Tax
Base") or Operating Expenses applicable to Calendar Year 2000
(the "Opex Base"). Therefore, in order that Rent payable
throughout the Lease Term and any extension thereof shall
reflect this understanding, Tenant shall pay its Pro Rata
Share of Taxes in excess of the Tax Base and Operating
Expenses in excess of the Opex Base ("Tenant's Share"). As
soon as practicable each year during the Lease Term, Landlord
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shall furnish to Tenant an estimate of Tenant's Share for the
timeframe in question. Tenant shall pay to Landlord the
estimate for Tenant's Share in equal monthly installments at
the same time and place as Rent is to be paid. Landlord will
furnish a statement of the actual Tenant's Share no later than
April 1 of each year during the Lease Term, including year
following the year in which the Lease expires or is otherwise
terminated. In the event that Landlord is, for any reason,
unable to furnish the statement of the actual Tenant's Share
within the time specified above, Landlord will furnish such
statement as soon thereafter as practicable with the same
force and effect as the statement would have had if delivered
within the time specified above. Tenant will pay to Landlord
any deficiency as shown by such statement within thirty (30)
days of receipt of such statement. Provided Tenant is not in
default of this Lease, Landlord will refund to Tenant any
excess as shown by such statement within thirty (30) days of
the date of the statement. Landlord will keep books and
records showing the Operating Expenses in accordance with
generally accepted accounting principles.
b. In the event Landlord furnishes any utility or service which
is included in Operating Expenses to less than ninety-five
percent (95%) of the rentable area of the Property because (i)
the average occupancy of the Property for the year in question
was not equal to or greater than ninety-five percent (95%),
(ii) such utility or service is not required by or provided to
one or more of the tenants of the Property, or (iii) any
tenant occupant is itself obtaining or providing any such
utility or services, then Operating Expenses for such year
(including the 2000 base year) shall be adjusted to include
all additional costs, expenses and disbursements that Landlord
reasonably determines would have been incurred if Landlord had
provided such utilities and services to all tenants of the
Property, and shall be allocated among the tenants by the
Landlord to reflect those costs which would have occurred had
the Property been ninety-five percent (95%) occupied during
the year in question and such utilities and services provided
to all tenants. The intent of this section is to ensure that
the reimbursement of Operating Expenses is fairly and
equitably allocated among the tenants receiving the utilities
and services in question.
c. To the extent the Property is part of a larger project or
development, Landlord shall have the right (but not the
obligation) to allocate to the Property an appropriate portion
of those Operating Expenses which are incurred with respect to
the project as a whole. By way of example, landscaping costs
for a multi-building project shall be allocated on an
appropriate basis between all buildings in the project.
d. Any and all payments (other than Rent) required to be made by
Tenant pursuant to this Lease shall be deemed additional Rent
("Additional Rent"). Landlord shall have the same rights and
remedies for said payments as for Rent.
7. SORTING AND SEPARATION OF REFUSE AND TRASH.
a. Tenant covenants and agrees, as its sole cost and expense, to
comply with all present and future laws, orders and
regulations of all state, federal, municipal and local
governments, departments, commissions and boards regarding the
collection, sorting, separation and recycling of waste
products, garbage, refuse and trash. Tenant shall sort and
separate waste products, garbage, refuge and trash into such
categories as provided by law. Each separately sorted category
of waste products, garbage, refuse and trash shall be placed
in
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separate receptacles reasonably approved by the Landlord. Such
separate receptacles may, at Landlord's option, be removed
from the Premises in accordance with a collection schedule
prescribed by law or by Landlord.
b. Landlord reserves the right to refuse to collect or accept
from Tenant any waste products, garbage, refuse or trash that
is not separated and sorted as required by law, and to require
Tenant to arrange for such collection at Tenant's sole cost
and expense, utilizing a contractor satisfactory to Landlord.
Tenant shall pay all costs, expenses, fines, penalties or
damages that may be imposed on "Landlord or Tenant by reason
of Tenant's failure to comply with the provisions of this
Section 7, and, at Tenant's sole cost and expense, shall
indemnify, defend and hold Landlord harmless (including legal
fees and expenses) from and against any actions, claims and
suits arising from such noncompliance, utilizing counsel
reasonably satisfactory to Landlord.
8. HAZARDOUS SUBSTANCES.
The term "Hazardous Substances" shall mean pollutants, contaminants,
toxic or hazardous wastes, or any other substances, the use and/or the
removal of which is required or the use of which is restricted,
prohibited or penalized by any "Environmental Law", which term shall
mean any federal, state or local law, regulation, order, ordinance or
other statute of a governmental or quasi-governmental authority
relating to pollution or protection of the environment. Tenant hereby
agrees that (A) no activity will be conducted on the Property or
Premises that will produce any Hazardous Substances, except for such
activities that are part of the ordinary course of Tenant's business
activities (the "Permitted Activities") provided said Permitted
Activities are conducted in accordance with all Environmental Laws and
have been acknowledged and consented to in advance in writing by
Landlord; Tenant shall be responsible for obtaining any required
permits and paying any fees and providing any testing required by any
governmental agency; (B) Neither the Property, nor the Premises will be
used in any manner for the storage of any Hazardous Substances except
for the temporary storage of such materials that are used in the
ordinary course of Tenant's business (the "Permitted Materials"),
provided such Permitted Materials are properly stored in a manner and
location meeting all Environmental Laws and acknowledged and consented
to in advance in writing by Landlord; Tenant shall be responsible for
obtaining any required permits and paying any fees and providing any
testing required by any governmental agency; (C) no portion of the
Property or the Premises will be used as a landfill or a dump; (D)
Tenant will not install any underground tanks of any type; (E) Tenant
will not allow any surface or subsurface conditions to exist or come
into existence that constitute, or with the passage of time may
constitute a public or private nuisance; (F) Tenant will not permit any
Hazardous Substances to be brought onto the Property or Premises,
except for the Permitted Materials described above, and if so brought
or found located thereon, the same shall be immediately removed, with
proper disposal, and all required cleanup procedures shall be
diligently undertaken pursuant to all Environmental Laws. Landlord or
Landlord's representative shall have the right but not the obligation
to enter the Premises for the purpose of inspecting the storage, use
and disposal of Permitted Materials to ensure compliance with all
Environmental Laws. Should it be determined, in Landlord's sole
opinion, that said Permitted Materials are being improperly stored,
used, or disposed of, then Tenant shall immediately take such
corrective action as requested by Landlord. Should Tenant fail to take
such corrective action within 24 hours, Landlord shall have the right
to perform such work and Tenant shall promptly reimburse Landlord for
any and all costs associated with said work. If at any time during or
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after the Lease Term, the Property or the Premises are found to be so
contaminated or subject to said conditions, Tenant shall diligently
institute proper and thorough cleanup procedures at Tenant's sole cost,
and Tenant agrees to indemnify, defend and hold harmless Landlord, its
lenders, any managing agents and leasing agents of the Property, and
their respective agents, partners, officers, directors and employees,
from all claims, demands, actions, liabilities, costs, expenses,
penalties (whether civil or criminal), damages (actual or punitive) and
obligations of any nature arising from or as a result of the use of the
Property or the Premises by Tenant. The foregoing indemnification and
the responsibilities of Tenant shall survive the termination or
expiration of this Lease.
During and after the Lease Term, Tenant shall promptly provide Landlord
with copies of all summons, citations, directives, information
inquiries or requests, notices of potential responsibility, notices of
violation or deficiency, orders or decrees, claims, complaints,
investigations, judgments, letters, notice of environmental liens, and
other communications, written or oral, actual or threatened, from the
United States Environmental Protection Agency, Occupational Safety and
Health Administration, the Commonwealth of Virginia Environmental
Protection Agency, or other federal, state or local agency or
authority, or any other entity or individual, concerning (i) any
Hazardous Substance regarding the Property or the Premises; (ii) the
imposition of any lien on the Property or the Premises; or (iii) any
alleged violation of or responsibility under any Environmental Law.
9. INSURANCE.
a. INSURANCE BY LANDLORD.
Landlord shall, during the Lease Term, procure and keep in
force the following insurance, the cost of which (including,
but not limited to premiums, deductibles, and co-payments)
will be deemed part of Operating Expenses pursuant to Section
5 and Section 6.
i. Property insurance insuring the Property and
improvements and rental income insurance (i.e.: loss
of rents insurance) for perils covered by the causes
of loss - special form (all risk) and in addition
coverage for flood, earthquake and boiler and
machinery (if applicable). Such coverage (except for
flood and earthquake) shall be written on a
replacement cost basis equal to ninety percent (90%)
of the full insurable replacement value of the
foregoing and shall not cover Tenant's equipment,
trade fixtures, inventory, fixtures or personal
property located on or in the Premises.
ii. Commercial general liability insurance against any
and all claims for bodily injury and property damage
occurring in or about the Property or the land. Such
insurance shall have the combined single limit of not
less than One Million Dollars ($1,000,000) per
occurrence per location with a Two Million Dollars
($2,000,000) aggregate limit.
iii. Such other insurance as Landlord deems necessary and
prudent, or as required by Landlord's beneficiaries
or mortgagees of any deed of trust or mortgage
encumbering the Property.
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b. INSURANCE BY TENANT.
Tenant shall, during the Lease Term, procure and keep in force
the following insurance:
i. Commercial general liability insurance naming
Landlord and Landlord's managing agent for the
Property as additional insureds against any and all
claims for bodily injury and property damage
occurring in, or about the Premises arising out of
Tenant's use and occupancy of the Premises. Such
insurance shall have a combined single limit of not
less than One Million Dollars ($1,000,000) per
occurrence with Two Million Dollars ($2,000,000)
aggregate limit and excess umbrella liability
insurance in the amount of Two Million Dollars
($2,000,000). If Tenant has other locations that it
owns or leases the policy shall include an aggregate
limit per location endorsement. Such liability
insurance shall be primary and not contributing to
any insurance available to Landlord and Landlord's
insurance shall be in excess thereto. In no event
shall the limits of such insurance be considered as
limiting the liability of Tenant under this lease.
ii. Personal property insurance insuring all equipment,
trade fixtures, inventory, fixtures and personal
property located on or in the Premises for perils
covered by the cause of loss - special form (all
risk) and in addition, coverage for flood, earthquake
and boiler and machinery (if applicable). Such
insurance shall be written on a replacement cost
basis in an amount equal to one hundred percent
(100%) of the full replacement value of the aggregate
of the foregoing.
iii. Workers' compensation insurance in accordance with
statutory law and employers' liability insurance with
a limit of not less than $100,000 per accident,
$500,000 for a disease policy limit, and $100,000 for
disease limit for each employee.
iv. Business income (and extra expense) coverage (i.e.:
business interruption insurance) insuring perils
covered by the causes of loss-special form (all risk)
and in addition, flood, earthquake and boiler and
machinery (if applicable) for one hundred percent
(100%) of the total of the budgeted net income of
Tenant for twelve (12) months plus all extra expenses
projected to be incurred by Tenant during the period
of restoration of the Property or Premises.
v. Such other insurance as Landlord deems necessary and
prudent, or as required by Landlord's beneficiaries
or mortgagees of any deed of trust or mortgage
encumbering the Property.
The policies required to be maintained by Tenant shall be
issued by companies rated AX or better in the most current
issue of Best's Insurance Reports. Insurers shall be licensed
to do business in the state in which the Property is located
and domiciled in the USA. Any deductible amounts under any
insurance policies required hereunder shall not exceed $1,000.
Certificates of insurance (certified copies of the policies
may be required by Landlord upon the occurrence of any event
which may result in a claim) shall be delivered to Landlord
prior to the Commencement Date and annually thereafter at
least thirty (30) days prior to the expiration date of the old
policy. Tenant shall have the right
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to provide insurance coverage which it is obligated to carry
pursuant to the terms hereof in a blanket policy, provided
such blanket policy expressly affords coverage to the
Property, the Premises, and to Landlord as required by this
Lease. Each policy of insurance shall provide notification to
Landlord at least thirty (30) days prior to any cancellation
or modification to reduce the insurance coverage.
In the event Tenant does not purchase the insurance required
by this Lease or keep the same in full force and effect,
Landlord may, but shall not be obligated to purchase the
required insurance and pay the premium. The Tenant shall repay
to Landlord, as Additional Rent the amount so paid promptly
upon demand. In addition, Landlord may recover from Tenant and
Tenant agrees to pay, as Additional Rent, any and all
reasonable expenses (including attorneys' fee) and damages
which Landlord may sustain by reason of the failure of Tenant
to obtain and maintain such insurance.
c. SUBROGATION.
Landlord and Tenant mutually waive their respective rights of
recovery against each other for any loss of, or damage to,
either parties' property, to the extent that such loss or
damage is insured by an insurance policy required to be in
effect at the time of such loss or damage. Each party shall
obtain any special endorsements, if required by its insurer
whereby the insurer waives its rights of subrogation against
the other party. This clause shall not apply in those cases
where waiver of subrogation would cause either parties'
insurance to be voided or otherwise made uncollectible.
10. DAMAGE OR DESTRUCTION.
If, prior to or during the Lease Term, or any extension thereof, the
Property or the Premises shall be so damaged or destroyed by fire or
other casualty so as to render them untenantable, or if the Property or
Premises is materially destroyed or damaged to the extent that the
restoration of such, in Landlord's sole opinion, is not economical or
feasible, then Landlord, at its sole option, shall have the right to
cancel and terminate this Lease. If not terminated, then Landlord shall
repair and restore the Premises with all reasonable speed to
substantially the same condition as immediately prior to such damage or
destruction, and the Rent or a just and proportionate part thereof,
according to Tenant's ability to utilize the Premises in its damaged
condition, shall be abated until the Premises shall have been repaired
and restored by Landlord. "Untenantable" Premises shall be such as to
not allow Tenant to transact and effectuate its operations in the
ordinary course of business.
11. INDEMNIFICATION.
Tenant shall indemnify, hold harmless, and defend Landlord (except for
Landlord's gross negligence or willful misconduct) against all claims,
losses or liabilities for injury or death to any person or for damage
to or loss of use of any property arising out of any occurrence in, on
or about the Property, if caused or contributed to by Tenant or
Tenant's agents or invitees, or arising out of any occurrence in, upon
or at the Property or Premises, or on account of the use, condition,
occupational safety or occupancy of the Property or Premises. It is the
intent of the parties hereto that the indemnity contained in this
section shall not be limited or barred by reason of any negligence on
the part of Landlord or Landlord's agents, except as expressly provided
herein.
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Such indemnification shall include and apply to attorneys' fees,
investigation costs, and other costs actually incurred by Landlord.
Tenant shall further indemnify, defend and hold harmless Landlord from
and against any and all claims arising from any breach or default in
the performance of any obligation on Tenant's part to be performed
under the terms of this Lease. The provisions of this section shall
survive the expiration or termination of this Lease with respect to any
damage, injury, death, breach or default occurring prior to such
expiration or termination. This Lease is made on the express conditions
that Landlord shall not be liable for, or suffer loss by reason of,
injury to person or property, from whatever cause, in any way connected
with the condition, use, occupational safety or occupancy of the
Property or Premises specifically including, without limitation, any
liability for injury to the person or property of Tenant or Tenant's
agents.
12. ASSIGNMENT AND SUBLETTING.
a. Tenant shall not assign, encumber, mortgage, pledge, license,
hypothecate or otherwise transfer the Premises or this Lease,
or sublease all or any part of the Premises, or permit the use
or occupancy of the Premises by any party other than Tenant,
without the prior written consent of Landlord, which shall not
be unreasonably withheld, provided that it shall be considered
reasonable for Landlord to consider all factors it deems
appropriate concerning the proposed assignee or subtenant,
including without limitation, the creditworthiness and
business experience of the proposed assignee or subtenant, the
nature and character of the business of the proposed assignee
or subtenant, and any exclusivity provision in leases between
Landlord and its other tenants.
b. Tenant must request Landlord's consent to an assignment or
sublease in writing at least sixty (60) days prior to the
commencement date of the proposed sublease or assignment,
which request must include (a) the name and address of the
proposed assignee or subtenant, (b) the nature and character
of the business of the proposed assignee or subtenant, (c)
financial information (including financial statements) of the
proposed assignee or subtenant, and (d) a copy of the proposed
sublet or assignment agreement, which must be in substance and
form acceptable to Landlord. Tenant shall also provide any
additional information Landlord reasonably requests regarding
such proposed assignment or subletting. Within thirty (30)
days after Landlord receives Tenant's request (with all
required information included), Landlord shall have the
option, at its sole discretion: (i) to grant its consent to
such proposed assignment or subletting, or (ii) to deny its
consent to such proposed assignment or subletting.
c. Any subleases and/or assignments are also subject to all of
the following terms and conditions:
i. If Landlord approves an assignment or sublease as
herein provided, Tenant shall pay to Landlord as
Additional Rent fifty percent (50%) of the amount, if
any, by which the rent, any additional rent and any
other sums payable by the assignee or subtenant to
Tenant under such assignment or sublease exceeds the
total of the Rent plus any Additional Rent payable by
Tenant hereunder which is allocable to the portion of
the Premises which is the subject of such assignment
or sublease less reasonable expenses of Tenant
associated with such transfer. The foregoing payments
shall be made on not less than a monthly basis by
Tenant.
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ii. No consent to any assignment or sublease shall
constitute a further waiver of the provisions of this
section, and all subsequent assignments or subleases
may be made only with the prior written consent of
Landlord. In no event shall any consent by Landlord
be construed to permit reassignment or resubletting
by a permitted assignee or sublessee.
iii. Tenant shall remain liable for all Lease obligations,
and, without limitation, the Guaranty to Lease (if
any) shall be unaffected by such sublease and
assignment, and shall remain in full force and effect
for all purposes. An assignee of Tenant, at the
option of Landlord, shall become directly liable to
Landlord for all obligations of Tenant hereunder, but
no sublease or assignment by Tenant shall relieve
Tenant of any liability hereunder.
iv. Any assignment or sublease without Landlord's prior
written consent shall be void, and shall, at the
option of the Landlord, constitute a default under
this Lease.
v. The term of any such assignment or sublease shall not
extend beyond the Lease Term.
vi. Tenant shall pay to Landlord a Five Hundred and
no/100 Dollars ($500.00) processing fee, which shall
accompany any proposed assignment or sublease
delivered by Tenant to Landlord, and which processing
fee shall be in addition to Landlord's reasonable
attorneys fees and out-of-pocket expenses incurred in
connection with Landlord's review of such sublease or
assignment (if any), which shall also be reimbursed
by Tenant.
d. The following events shall constitute an "Assignment" which is
subject to the terms of this section and for which Landlord's
prior written consent is required: (i) if Tenant is a
corporation and any part or all of Tenant's shares of stock,
or the shares of stock or other ownership interests of any
corporation or other entity owning shares of Tenant's stock,
shall in any one or more instances be issued, or transferred
by sale, assignment, conveyance, operation of law (including,
but not limited to, transfer as a result of or in conjunction
with any merger, reorganization or recapitalization) or other
disposition, or otherwise changed, so as to result in less
than fifty one percent (51%) of such shares, or other
ownership interests, or less than fifty one percent (51%) of
any class of such shares or other ownership interests, being
owned by the present (i.e., as of the date hereof) owners
thereof; (ii) if Tenant is a partnership and any general
partnership interest(s), or the stock or other ownership
interests of any corporation or other entity owning any such
general partnership interests(s), in the partnership shall in
any one or more instances be issued, or transferred by sale,
assignment, conveyance, operation of law (including, but not
limited to, transfer as a result of or in conjunction with any
merger, reorganization or recapitalization) or other
disposition, or otherwise changed, so as to result in less
than fifty one percent (51%) of such general partnership
interests(s), stock (or any class of such stock) or other
ownership interests being owned by the present (i.e., as of
the date hereof) owners thereof; and (iii) if Tenant is a
limited liability company or any other type of entity, and any
interest(s) of any member or other equity owner, or the
ownership interests of any entity owning any membership
interest(s) or other equity interest in the
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Tenant, shall in any one or more instances be issued, or
transferred by sale, assignment, conveyance, operation of law
(including, but not limited to, transfer as a result of or in
conjunction with any merger, reorganization or
recapitalization) or other disposition, or otherwise changed,
so as to result in less than fifty one percent (51%) of such
membership interests or other such equity and/or ownership
interests being owned by the present (i.e., as of the date
hereof) owners thereof.
13. CARE OF PREMISES.
Tenant covenants and agrees that during the Lease Term it will keep the
Property and the Premises and every part thereof in good order,
condition and repair and that it will in all respects and at all times
duly comply with all applicable laws, and all covenants, conditions and
restrictions applicable to the Property.
14. ALTERATION BY TENANT.
a. Tenant is hereby given the right, at its sole cost and
expense, at any time during the Lease Term, to make
non-structural alterations or improvements to the interior of
the Premises which Tenant deems necessary or desirable for its
purposes; provided, however, that no alterations or
improvements shall be made without the prior written approval
of Landlord, which written approval shall not be unreasonably
withheld. Landlord's approval of any plans, specifications or
work drawings shall create no responsibility or liability on
the part of the Landlord for their completeness, design
sufficiency or compliance with any laws, rules and regulations
of governmental agencies or authorities.
b. All work herein permitted shall be done and completed by the
Tenant in a good and workmanlike manner and in compliance with
all requirements of law and of governmental rules and
regulations. Tenant agrees to indemnify the Landlord against
all mechanics' or other liens arising out of any of such work,
and also against any and all claims for damages or injury
which may occur during the course of any such work. The
Landlord agrees to join with the Tenant in applying for all
permits necessary to be secured from governmental authorities
and to promptly execute such consents as such authorities may
require in connection with any of the foregoing work.
c. Upon written notice to Tenant within ninety (90) days after
expiration of the Lease Term, Landlord may require that Tenant
remove, at Tenant's sole cost and expense, any or all
alterations, improvements or additions to the Premises, and
restore the Premises to their prior condition. Unless Landlord
requires their removal, all alterations, additions and
improvements which may be made on the Premises shall become
the property of Landlord and remain upon and be surrendered
with the Premises. Tenant shall also repair any damage to the
Premises caused by the installation or removal of Tenant's
trade fixtures, furnishings and equipment, or any alterations
or other improvements made to the Premises by Tenant.
15. CONDEMNATION.
a. If the Premises shall be wholly taken by exercise of right of
eminent domain, then this Lease shall terminate from the day
the possession of the whole of the Premises shall be
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required under the exercise of such power of eminent domain.
Any award for the taking of all or part of the Premises under
the power of eminent domain or any payment made under threat
of the exercise of such power shall be the property of the
Landlord. Tenant reserves such separate rights as it may have
against the condemning authority to claim damages for loss of
its trade fixtures and the cost of removal and relocation
expense, provided such Tenant rights do not, in any way,
diminish the award to which Landlord would otherwise be
entitled or reduce the amounts payable to Landlord pursuant to
this subsection.
b. If such part of the Property in which the Premises is located
shall be condemned so as to substantially and materially
hamper the operation of Tenant's business in Landlord's
reasonable discretion, then the Rent payable hereunder shall
be reduced in the proportion that the remaining area of the
Premises bears to the original area of the Premises. If more
than fifty percent (50%) of the Premises shall be permanently
condemned, Tenant shall have the right to terminate this Lease
upon thirty (30) days written notice to Landlord, which notice
must be given within sixty (60) days of such condemnation.
16. SUBORDINATION.
This Lease is and shall at all times be and remain subject and
subordinate to the lien of any present or future mortgage (and to any
and all advances made thereunder) upon the Property or Premises, unless
Landlord requires this Lease to be superior to any such mortgage.
Tenant shall execute and return to Landlord any and all documentation
required by Landlord to evidence the subordination (or superiority) of
this Lease to any such mortgage. If Tenant does not provide Landlord
with such documentation within five (5) days after Landlord's written
request, Tenant hereby grants unto Landlord its power-of-attorney to
execute such subordination documents as Tenant's duly authorized and
empowered attorney-in-fact. In the event of subordination of this
Lease, Landlord will attempt to obtain from the holder of any such
mortgage, a written nondisturbance agreement to the effect that (A) in
the event of a foreclosure or other action taken under the mortgage by
the holder thereof, this Lease and the rights of Tenant hereunder shall
not be disturbed but shall continue in full force and effect so long as
Tenant shall not be in default hereunder, and (B) such holder will
agree that in the event it shall be in possession of the Premises, that
so long as Tenant shall observe and perform all of the obligations of
Tenant to be performed pursuant to this Lease, such Mortgagee will
perform all obligations of Landlord required to be performed under this
Lease. In the event any proceedings are brought for foreclosure, or in
the event of the exercise of the power of sale under any mortgage made
by the Landlord covering the Premises, Tenant shall attorn to the
purchaser at any such foreclosure, or to the grantee of a deed in lieu
of foreclosure, and recognize such purchaser or grantee as the Landlord
under this Lease. Tenant hereby agrees that no mortgagee or its
successor shall be (i) bound by any payment of Rent or Additional Rent
for more than one (1) month in advance, (ii) bound by any amendment or
modification of this Lease made without the consent of Landlord's
mortgagee or its successor, (iii) liable for damages for any breach,
act or omission of any prior landlord, (iv) bound to effect or pay for
any construction for Tenant's occupancy, or (v) subject to any claim of
offset or defenses that Tenant may have against any prior landlord. ne
word "mortgage" as used herein includes mortgages, deeds of trust and
any sale-leaseback transactions, or other similar instruments, and
modifications, extensions, renewals, and replacements thereof, and any
and all advances thereunder.
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17. ACCESS TO PREMISES.
Landlord and its authorized agents shall have free access to the
Premises at any and all reasonable times to inspect the same, to make
any repair or alteration to the Premises, to place and maintain a "For
Rent" sign thereon at any time within six (6) months prior to
expiration of the Lease Term and/or termination of this Lease and to
exhibit and show the Premises to prospective tenants during such time
period, and for other purposes pertaining to the rights of the
Landlord.
18. RULES AND REGULATIONS.
Tenant agrees to comply with all current and future rules and
regulations promulgated by Landlord concerning the Property and the
Premises. The existing rules and regulations, which may be amended or
changed by Landlord in its sole discretion, are set forth in Exhibit D
attached hereto and made a part hereof by reference.
19. COVENANTS OF RIGHT TO LEASE.
Landlord covenants that it has good and sufficient right to enter into
this Lease and that Landlord alone has the right to lease the Premises
for the Lease Term. Landlord further covenants that upon Tenant
performing the terms and obligations of Tenant under this Lease, Tenant
will have quiet enjoyment of the Premises throughout the Lease Term and
any renewal or extension thereof, subject to the terms of this lease.
20. MECHANICS LIENS.
Neither Tenant nor anyone claiming by, through, or under Tenant or this
Lease, shall have the right to file or place any mechanics lien or
other lien of any kind or character whatsoever upon the Property or
Premises or upon any improvement thereon, or upon the leasehold
interest of Tenant therein. Notice is hereby given that no contractor,
subcontractor, or anyone else who may furnish any material, service or
labor for any Property improvements, alteration, repairs or any part
thereof, shall at any time be or become entitled to any lien thereon.
For the further security of Landlord, Tenant covenants and agrees to
give actual notice thereof in advance to any and all contractors and
subcontractors who may furnish or agree to furnish any such material,
service or labor. Tenant shall cause any such lien imposed to be
released of record by payment or posting of the proper bond acceptable
to Landlord within thirty (30) days after earlier of imposition of the
lien or written request by Landlord. If Tenant fails to remove any lien
within the thirty (30) day period, then Landlord may do so at Tenant's
expense and Tenant's reimbursement to Landlord for such amount,
including attorneys fees and costs, shall be deemed Additional Rent.
21. EXPIRATION OF LEASE AND SURRENDER OF POSSESSION.
a. Holding Over. Tenant will, at the expiration or termination of
this Lease by lapse of time or otherwise, yield up immediate
possession of the Premises to Landlord in the condition
required under this Lease. If Tenant retains possession of the
Premises or any part thereof after such expiration or
termination, then Landlord may, at its option, serve written
notice upon Tenant that such holding over constitutes any one
of (i) renewal of this Lease for one year, and from year to
year thereafter, or (ii) creation of a month-to-month
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tenancy, upon the terms and conditions set forth in this
Lease, or (iii) creation of a tenancy at sufferance, in any
case upon the terms and conditions set forth in this Lease;
provided, however, that the monthly Rent (or daily Rent under
(iii)) shall, in addition to all other sums which are to be
paid by Tenant hereunder, whether or not as Additional Rent,
be equal to one hundred fifty percent (150%) of the sum of
Rent plus Additional Rent owed monthly to Landlord under this
Lease immediately prior to such expiration or termination
(prorated in the case of (iii) on the basis of a 365 day year
for each day Tenant remains in possession). If no such notice
is served, then a tenancy at sufferance shall be deemed to be
created at the Rent in the preceding sentence. Tenant shall
also pay to Landlord as Additional Rent all damages sustained
by Landlord resulting from retention of possession by Tenant,
including the loss of any proposed subsequent tenant for any
portion of the Premises. The provisions of this section shall
not constitute a waiver by Landlord of any right of re-entry
as herein set forth; nor shall receipt of any Rent or any
other act in apparent affirmance of the tenancy operate as a
waiver of Landlord's right to terminate this Lease for a
breach of any of the terms, covenants, or obligations herein
on Tenant's part to be performed.
b. Subject to Section 14, upon the expiration of this Lease, by
lapse of time or otherwise, any and all buildings,
improvements or additions erected on the Property or Premises
by Tenant shall, at the option of Landlord, be and become the
property of the Landlord without any payment therefor and
Tenant shall, at the option of Landlord, surrender said
Premises, together with all buildings, improvements or
additions thereon, whether erected by Tenant or Landlord,
ordinary wear and tear excepted.
c. Tenant may install adequate equipment, fixtures and machinery
for the operation of its business and upon the expiration or
termination of this Lease by lapse of time or otherwise,
provided all Rents and other amounts that may be due and owing
to Landlord have been paid and the provisions of this Lease
complied with, Tenant shall remove such equipment, fixtures
and machinery installed by it at Tenant's sole cost. Upon
removal of such equipment, fixtures and machinery, Tenant
shall repair any damage to the Property or Premises caused by
such removal or installation at Tenant's sole cost.
22. DEFAULT-REMEDIES.
a. The occurrence of one or more of the following events shall
constitute a material default and breach of this Lease by
Tenant ("Event of Default"):
i. Failure by Tenant to make payment of any Rent,
Additional Rent, or any other payment required to be
made by Tenant hereunder, as and when due, and such a
failure shall continue for a period of seven (7)
days;
ii. The making by Tenant (or any guarantor) of any
assignment or arrangement for the benefit of
creditors;
iii. The filing by Tenant (or any guarantor) of a petition
in bankruptcy or for any other relief under Title II
of the United States Code ("Bankruptcy Code"), or the
insolvency laws of any state, or any other applicable
statute ("Insolvency Laws");
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iv. The levying of an attachment, execution of other
judicial seizure upon the Tenant's property in or
interest under this Lease, which is not satisfied or
released or the enforcement thereof superseded by an
appropriate proceeding within thirty (30) days
thereafter;
v. The filing of an involuntary petition in bankruptcy
or for reorganization or arrangement under the
Bankruptcy Code or Insolvency Laws against Tenant (or
any guarantor) and such involuntary petition is not
withdrawn, dismissed, or discharged within sixty (60)
days from the filing thereof,
vi. The appointment of a receiver or trustee to take
possession of the property of Tenant (or any
guarantor) or of Tenant's (or any guarantor's)
business or assets and the order or decree appointing
such receiver or trustee shall have remained in force
undischarged for thirty (30) days after the entry of
such order or decree;
vii. The vacating or abandonment of the Premises;
viii. The failure by Tenant to furnish to Landlord any
statement required herein within ten (10) business
days after its due date;
ix. The failure by Tenant to maintain any insurance
required herein;
x. An assignment, subletting, pledge, mortgage, or other
transfer of this Lease or the Premises by Tenant, or
any transfer of any interest in the Tenant in
violation of Section 12 of this Lease;
xi. The failure by Tenant to perform or observe any other
term, covenant, agreement or condition to be
performed or kept by the Tenant under the terms,
conditions, or provisions of this Lease and such
failure shall continue for a period of thirty (30)
days after written notice to Tenant; and
xii. An occurrence of any of the foregoing Events of
Default with respect to any guarantor of this Lease,
or if any guarantor fails to perform or observe any
term, covenant or condition of its guaranty of this
Lease.
b. If an Event of Default shall have occurred, Landlord shall
have (in addition to all other rights and remedies provided by
law or otherwise provided by this Lease) the right, at the
option of the Landlord, then or at any time thereafter while
such Event of Default shall continue, to elect any one or more
of the following:
i. To continue this Lease in full force and effect (so
long as Landlord does not terminate this Lease), and
Landlord shall have the right to collect Rent,
Additional Rent and other charges when due for the
remainder of the Lease Term; and/or
ii. To cure such default or defaults at its own expense
and without prejudice to any other remedies which it
might otherwise have; and any payment made or
expenses incurred by Landlord in curing such default
with interest thereon at the
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Default Rate (as hereafter defined) to be and become
Additional Rent to be paid by Tenant with the next
installment of Rent falling due thereafter; and/or
iii. To re-enter the Premises, without notice, and
dispossess Tenant and anyone claiming through or
under Tenant by summary proceedings or otherwise, and
remove their effects, and take complete possession of
the Premises and either (a) declare this Lease
terminated and the Lease Term ended, or (b) elect to
continue this Lease in full force and effect, but
with the right at any time thereafter to declare this
Lease terminated and the Lease Term ended. In such
re-entry, Landlord may, with or without process of
law, remove all persons from the Premises, and Tenant
hereby covenants in such event, for itself and all
others occupying the Premises under Tenant, to
peacefully yield up and surrender the Premises to
Landlord. If Landlord elects to terminate this Lease
and/or elects to terminate Tenant's right of
possession, every obligation of Landlord contained in
this Lease shall cease without prejudice to Tenant's
liability for all Rent, Additional Rent, and other
sums owed by Tenant herein.
Should Landlord declare this Lease terminated and the Lease
Term ended (pursuant to Section 22(B)(3)(a) above), the
Landlord shall be entitled to recover from Tenant the Rent,
Additional Rent, and all other sums due and owing by Tenant to
the date of termination, plus the costs of curing all Tenant's
defaults existing at or prior to the date of termination, plus
the costs of recovering possession of the Premises, plus the
costs of reletting the Premises including, but not limited to
repairs to the Premises, costs to prepare and refinish the
Premises for reletting, leasing commissions, rental
concessions, and legal fees and costs, plus other actual or
consequential damages suffered or incurred by Landlord due to
all Events of Default (including without limitation, late fees
or other charges incurred by Landlord under any mortgage),
plus the deficiency, if any, between Tenant's Rent and
Additional Rent for the balance of the Lease Term and the rent
obtained by Landlord under another lease for the Premises for
the balance of the Lease Term remaining under this Lease on
the date of termination.
Should Landlord elect to continue this Lease (pursuant to
Section 22(B)(3)(b) above), Landlord shall be entitled to
recover from Tenant the Rent, Additional Rent and all other
sums due and owing by Tenant up to the date of dispossession,
plus the costs of curing all Events of Default existing at or
prior to the date of dispossession, plus the Rent, Additional
Rent and all other sums owed by Tenant on a continuing basis
as said amounts accrue to the end of the Lease Term, less the
rental which Landlord receives during such period, if any,
from others to whom the Premises may be relet, plus the cost
of recovering possession of the Premises, plus the costs of
reletting including, but not limited to repairs to the
Premises, costs to prepare and refinish the Premises for
reletting, leasing commissions, rental concessions, and legal
fees and costs. Any suit brought by Landlord to enforce
collection of such deficiency for any one month shall not
prejudice Landlord's right to enforce the collection of any
deficiency for any subsequent month in subsequent separate
actions, or Landlord may defer initiating any such suit until
after the expiration of the Lease Term (in which event such
deferral shall not be construed as a waiver of Landlord's
rights as set forth herein and Landlord's cause of action
shall be deemed not to have accrued until the expiration of
the Lease Term), and it being further understood that if
Landlord elects to bring suits from time to time prior to
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reletting the Premises, Landlord shall be entitled to its full
damages through the date of the award of damages without
regard to any rent, additional rent or other sums that are or
may be projected to be received by Landlord upon a subsequent
reletting of the Premises. In the event that Landlord relets
the Premises together with other premises or for a term
extending beyond the scheduled expiration of the Lease Term,
it is understood that Tenant will not be entitled to apply
against Landlord's damages any rent, additional rent or other
sums generated or projected to be generated by either such
other premises or the period extending beyond the scheduled
expiration of the Lease Term. Landlord shall use commercially
reasonable efforts to relet and rent the Premises with or
without advertising for the remainder of the Lease Term, or
for such longer or shorter period as Landlord shall deem
advisable.
In lieu of the amounts recoverable by Landlord pursuant to the
two immediately preceding paragraphs, but in addition to other
remedies and amounts otherwise recoverable by Landlord in this
Lease, Landlord may, at its sole election, (i) terminate this
Lease, (ii) collect all Rent, Additional Rent, and other sums
due and owing by Tenant up to the date of termination, and
(iii) accelerate and collect Rent, Additional Rent and all
other sums required to be paid by Tenant through the remainder
of the Lease Term ("Accelerated Rent"), which Accelerated Rent
shall be discounted to present value using an interest rate
equal to five percent (5.0%) per annum ("Present Value
Accelerated Rent"). Landlord shall use commercially reasonable
efforts to relet and rent the Premises with or without
advertising for the remainder of the Lease Term, or for such
longer or shorter period as Landlord shall deem advisable. In
the event Landlord is successful in reletting the Premises for
any part of the remainder of the Lease Term, and provided
Tenant has paid to Landlord all sums required to be paid by
Tenant pursuant to this paragraph, Landlord shall forward to
Tenant the rent associated with such reletting ("Reletting
Rent") as and when the Reletting Rent is collected by
Landlord. Notwithstanding the previous sentence, Landlord
shall forward to Tenant any Reletting Rent only (i) after
Landlord has first been reimbursed from the Reletting Rent for
any and all costs associated with such reletting including,
but not limited to repairs to the Premises, costs to prepare
and refinish the Premises for reletting, leasing commissions,
rental concessions, and legal fees; and (ii) until the earlier
of (a) the last day of the Lease Tenn, or (b) the point in
time Tenant has been reimbursed, in the aggregate, an amount
equivalent to the Present Value Accelerated Rent actually paid
to Landlord pursuant to this paragraph. In no event shall
Landlord be liable for, nor shall Tenant's obligations
hereunder be diminished by reason of, any failure by Landlord
to relet all or any portion of the Premises or to collect any
rent due upon such reletting.
c. Tenant, on its own behalf and on behalf of all persons
claiming through or under Tenant, including all creditors,
does hereby specifically waive and surrender any and all
rights and privileges, so far as is permitted by law, which
Tenant and all such persons might otherwise have under any
present or future law (1) to the service of any notice to quit
or of Landlord's intention to re-enter or to institute legal
proceedings, which notice may otherwise be required to be
given, (2) to redeem the Premises, (3) to re-enter or
repossess the Premises, (4) to restore the operation of this
Lease, with respect to any dispossession of Tenant by judgment
or warrant of any court or judge, or any re-entry by Landlord,
or any expiration or termination of this Lease, whether such
dispossession, re-entry, expiration or termination shall be by
operation of law or pursuant to the provisions of this
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Lease, or (5) which exempts property from liability for debt
or for distress for rent. Tenant hereby consents to the
exercise of personal jurisdiction over it by any federal or
local court in the jurisdiction in which the Premises is
located.
23. RE-ENTRY BY LANDLORD.
No re-entry by Landlord or any action brought by Landlord to remove
Tenant from the Premises shall operate to terminate this Lease unless
Landlord shall have given written notice of termination to Tenant, in
which event Tenant's liability shall be as above provided. No right or
remedy granted to Landlord herein is intended to be exclusive of any
other right or remedy, and each and every right and remedy herein
provided shall be cumulative and in addition to any other right or
remedy hereunder or now or hereafter existing in law or equity or by
statute. In the event of termination of this Lease, Tenant waives any
and all rights to redeem the Premises either given by any statute now
or herein enacted.
24. ADDITIONAL RIGHTS TO LANDLORD.
a. In addition to any and all other remedies, Landlord may
restrain any threatened breach of any covenant, condition or
agreement herein contained, but the mention herein of any
particular remedy or right shall not preclude the Landlord
from any other remedy or right it may have either at law or
equity, or by virtue of some other provision of this Lease;
nor shall the consent to one act, which would otherwise be a
violation or waiver of or redress for one violation either of
covenant, promise agreement undertaking or condition, prevent
a subsequent act which would originally have constituted a
violation from having all the force and effect of any original
violation.
b. Receipt by Landlord of Rent or other payments from the Tenant
shall not be deemed to operate as a waiver of any rights of
the Landlord to enforce payment of any Rent, Additional Rent,
or other payments previously due or which may thereafter
become due, or of any rights of the Landlord to terminate this
Lease or to exercise any remedy or right which otherwise might
be available to the Landlord, the right of Landlord to declare
a forfeiture for each and every breach of this Lease is a
continuing one for the life of this Lease.
25. SUCCESSORS, ASSIGNS AND LIABILITY.
The terms, covenants, conditions and agreements herein contained and as
the same may from time to time hereafter be supplemented, modified or
amended, shall apply to, bind, and inure to the benefit of the parties
hereto and their legal representatives, successors and assigns,
respectively, subject to Section 12 hereof. In the event either party
now or hereafter shall consist of more than one person, firm or
corporation, then and in such event all such person, firms and/or
corporations shall be jointly and severally liable as parties
hereunder.
26. NOTICES.
All notices and demands required to be given to either party hereunder
shall be in writing and shall be deemed to have been given when sent by
certified United States mail, postage prepaid, return receipt
requested, or by personal delivery, or by a nationally recognized
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overnight delivery service, delivery prepaid, addressed to the party to
whom directed at the address set forth below or at such other address
as may be from time to time designated in writing by the party changing
such address.
Landlord Tenant
-------- ------
Reston Plaza I & II, LLC Member-Link Systems, Inc.
801 Grand Avenue 12020 Sunrise Valley Drive
Des Moines, Iowa 50392-1360 Reston, Virginia 20191
Attn: Commercial Real Estate Equities Attn: ____________________
With a copy to:
Reston Plaza I & II, LLC
c/o Trammell Crow Company
14595 Avion Parkway
Suite 100
Chantilly, Virginia 20151
Attn: Property Manager
27. MORTGAGEE'S APPROVAL.
If Landlord's mortgagee shall require modifications of the terms and
provisions of this Lease, Tenant agrees to execute and deliver to
Landlord the agreements required to effect such Lease modification
within thirty (30) days after Landlord's request therefor. In no event,
however, shall Tenant be required to agree to materially modify any
provision of this Lease relating to the amount of Rent, Additional Rent
or other charges reserved herein, the size and/or general location of
the Premises, or the Lease Term or modify any other term that would
materially and adversely affect Tenant's rights under this Lease.
28. ESTOPPEL CERTIFICATES.
At any time following ten (10) business days written notice from
Landlord, Tenant agrees to execute, acknowledge and deliver to Landlord
or any proposed mortgagee or purchaser a statement in writing, in form
satisfactory to Landlord, certifying whether this Lease is in full
force and effect and, if it is in full force and effect, what
modifications have been made to this Lease to the date of the
certification and whether or not any defaults or offsets exist with
respect to this Lease and, if there are, what they are claimed to be
and setting forth dates to which Rent or other charges have been paid
in advance, if any, and stating whether or not Landlord is in default
and, if so, specifying what the default may be. The failure of Tenant
to execute, acknowledge, and deliver to Landlord a statement as above
shall constitute an acknowledgment by Tenant that this Lease is
unmodified and in full force and effect and that the Rent and other
charges have been duly and fully paid to and including the respective
due dates immediately preceding the date of Landlord's notice to Tenant
and shall constitute as to any person, a waiver of any defaults which
may exist prior to such notice.
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29. DEFAULT RATE OF INTEREST.
All amounts owed by Tenant to Landlord pursuant to any provision of
this Lease shall bear interest from the date due until paid at eighteen
percent (18%) per annum, unless a lesser rate shall then be the maximum
rate permissible by law, in which event said lesser rate shall be
charged ("Default Rate").
30. EXCULPATORY PROVISIONS.
It is expressly understood and agreed by and between the parties
hereto, anything herein to the contrary notwithstanding, that each and
all of the representations, warranties, covenants, undertakings,
indemnities and agreements herein made on the part of Landlord while in
form purporting to be the representations, warranties, covenants,
undertakings, indemnities and agreements of Landlord are nevertheless
each and every one of them made and intended, not as personal
representations, warranties, covenants, undertakings, indemnities and
agreements by Landlord or for the purpose or with the intention of
binding Landlord personally, but are made and intended for the purpose
only of subjecting Landlord's interest in the Premises to the terms of
this Lease and for no other purpose whatsoever, and in case of default
hereunder by Landlord, Tenant shall look solely to the interests of
Landlord in the Premises. Landlord shall not have any personal
liability to pay any indebtedness accruing hereunder or to perform any
covenant, either express or implied, herein contained. All such
personal liability of Landlord, if any, is expressly waived and
released by Tenant and by all persons claiming by, through or under
Tenant.
31. MORTGAGE PROTECTION.
Tenant agrees to give any holder of any first mortgage or first trust
deed in the nature of a mortgage (both hereinafter referred to as a
"First Mortgage") against the Property, or any interest therein, by
registered or certified mail, a copy of any notice or claim of default
served upon Landlord by Tenant, provided that prior to such notice,
Tenant has been notified in writing of the address of such First
Mortgage holder. Tenant further agrees that if Landlord shall have
failed to cure any such default within twenty (20) days after such
notice to Landlord (or if such default cannot be cured or corrected
within that time, then such additional time as may be necessary if
Landlord has commenced within such twenty (20) days and is diligently
pursuing the remedies or steps necessary to cure or correct such
default), then the holder of the First Mortgage shall have an
additional thirty (30) days within which to cure or correct such
default (or if such default cannot be cured or corrected within that
time, then such additional time as may be necessary if such holder of
the First Mortgage has commenced with such thirty (30) days and is
diligently pursuing the remedies or steps necessary to cure or correct
such default, including the time necessary to obtain possession if
possession is necessary to cure or correct such default.
32. RECIPROCAL COVENANT ON NOTIFICATION OF ADA VIOLATIONS.
Within ten (10) days after receipt, Landlord and Tenant shall advise
the other party in writing, and provide the other with copies of (as
applicable), any notices alleging violation of the Americans with
Disabilities Act of 1990 ("ADA") relating to any portion of the
Property or the Premises; any claims made or threatened in writing
regarding noncompliance with the ADA and relating to any portion of the
Property or the Premises; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with
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the ADA and relating to any portion of the Property or the Premises.
Landlord shall be responsible for ADA compliance of the common areas of
the Property and Tenant shall be responsible for ADA compliance of the
Premises.
33. LAWS THAT GOVERN.
The terms and conditions of this Lease shall be governed by the laws of
the jurisdiction in which the Property is located.
34. FINANCIAL STATEMENTS.
Within ten (10) business days of Landlord's request, Tenant shall
deliver to Landlord the current financial statements of Tenant, and
financial statements for the two (2) years prior to the current year.
The financial statements shall include a balance sheet, profit and loss
statement, and statement of cash flows for each year, accompanied by an
opinion from a certified public accountant certifying that the
financial statements are prepared in accordance with generally accepted
accounting principles consistently applied. An amount equal to five
percent (5%) of the monthly Rent shall be charged as Additional Rent
for each month in which Tenant fails to deliver to Landlord the
financial statements required herein.
35. PARKING.
During the initial term of this Lease, Tenant shall have the right to
park free of charge in a maximum of 3.6 parking spaces per 1,000
rentable square feet of the Premises which includes two (2) covered
unreserved parking spaces and the remainder in unreserved surface
parking spaces located on the Property, upon such terms and conditions
as established by Landlord. Tenant agrees to cooperate with Landlord
and other tenants in use of the parking facilities. Landlord reserves
the right in its absolute and sole discretion to determine whether the
parking facilities are properly used or are becoming overburdened and
to allocate and assign parking spaces among Tenant and other tenants,
and to reconfigure the parking area and modify the existing ingress and
egress from the parking area as Landlord shall deem appropriate.
36. SIGNAGE.
Tenant shall not place any sign on the Property or the Premises without
Landlord's prior written consent. Landlord shall provide at Landlord's
expense a lobby directory in the main lobby of the Property identifying
tenants and suite numbers, including Tenant.
37. RECORDATION.
Except to the extent required by law, Tenant shall not record this
Lease among or in any public records.
38. FORCE MAJEURE.
This Lease and the obligations of the Tenant hereunder shall not be
affected or impaired because the Landlord is unable to fulfill any of
its obligations hereunder or is delayed in doing so, to the extent such
inability or delay is caused by reason of war, civil unrest, strike,
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labor troubles, unusually inclement weather, governmental delays,
inability to procure services or materials despite reasonable efforts,
third party delays, acts of God, or any other cause(s) beyond the
reasonable control of the Landlord (which causes are referred to
collectively herein as "Force Majeure"). Any time specified obligation
of Landlord in this Lease shall be extended one day for each day of
delay suffered by Landlord as a result of the occurrence of any Force
Majeure.
39. LANDLORD'S LIEN.
As security for the performance of Tenant's obligations, Tenant grants
to Landlord a lien upon and a security interest in Tenant's existing or
hereafter acquired personal property, inventory, furniture,
furnishings, fixtures, equipment, licenses, permits, and all other
tangible and intangible property, assets and accounts, and all
additions, modifications, products and proceeds thereof, including,
without limitation, such tangible property which has been used at the
Premises, purchased for use at the Premises, located at any time in the
Premises or used or to be used in connection with the business
conducted or to be conducted in the Premises, whether or not the same
may thereafter be removed from the Premises, including, without
limitation, all stock and partnership interests now or hereafter owned
by Tenant, legally or beneficially, in any entity which manages, owns
or operates the business to be conducted in or upon the Premises. Such
lien shall be in addition to all rights of distraint available under
applicable law. Within five (5) days after request from time to time,
Tenant shall execute, acknowledge and deliver to Landlord a financing
statement and any other document evidencing or establishing such lien
and security interest which may be requested by Landlord. During the
Lease Term, Tenant shall not sell, transfer or remove from the Premises
any of the aforementioned tangible property without Landlord's prior
written consent, unless the same shall be promptly replaced with
similar items of comparable value. In order to further assure Tenant's
performance of its obligations under this Lease, Tenant covenants that
during the Lease Term, it will not convey or otherwise transfer its
assets or permit its assets to be encumbered to the extent that any
such conveyance, transfer or encumbrance is not done in the ordinary
course of Tenant's business or would materially and adversely affect
the net worth of Tenant. Provided that Tenant has first obtained
Landlord's prior written consent, said lien may be subordinated to the
rights of any lessor of, or the mortgagee of, any equipment or personal
property under any equipment lease or mortgage, or the rights of the
seller under any conditional sales contract. Landlord also shall, to
the extent permitted by law, have (in addition to all other rights) a
right of distress for rent as security for all Rent, Additional Rent
and any other sums payable under this Lease.
40. BROKERS.
Tenant represents and warrants to Landlord that neither it nor its
officers or agents nor anyone acting on its behalf has dealt with any
real estate broker other than Cambridge Property Group, L.P. and
Trammell Crow Real Estate Services, Inc. in the negotiating or making
of this Lease, and Tenant agrees to indemnify and hold Landlord, its
agents, employees, partners, directors, shareholders and independent
contractors harmless from all liabilities, costs, demands, judgments,
settlements, claims and losses, including reasonable attorneys fees and
costs, incurred by Landlord in conjunction with any such claim or
claims of any other broker or brokers claiming to have interested
Tenant in the Property or Premises or claiming to have caused Tenant to
enter into this Lease.
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41. CONFIDENTIALITY.
Tenant agrees that this Lease is confidential and Tenant shall not,
without Landlord's prior written consent, disclose the contents of this
Lease to any third party, except Tenant's brokers, lawyers, architects,
engineers, and other consultants engaged in connection with this Lease
transaction, or to representatives of financing parties of Tenant where
the information is required in the course of legitimate due diligence.
42. LEASE/DEED OF LEASE.
To the extent required under applicable law to make this Lease legally
effective, this Lease shall constitute a deed of lease executed under
seal.
43. MISCELLANEOUS.
a. In the event that Tenant desires to store or maintain the type
or character of goods or materials in the Premises which cause
an increase in insurance premiums, Tenant shall first obtain
the written consent of Landlord and Tenant shall reimburse
Landlord for any increase in premiums caused thereby.
b. Unless the context clearly denotes the contrary, the words
"Rent" and "Additional Rent" as used in this Lease not only
includes cash rental for the Premises, but also all other
payments and obligations to pay assumed by the Tenant, whether
such obligations to pay run to the Landlord or to other
parties.
c. In any litigation between the parties arising out of this
Lease, or in connection with any consultations with counsel
and other actions taken or notices delivered in relation to a
default by any party to this Lease, the non-prevailing party
shall pay to the prevailing party all reasonable expenses and
costs including attorneys' fees incurred by the prevailing
party in connection with the default and/or litigation, as the
case may be (including fees and costs in preparation for and
at trial, and on appeal, if applicable) ("Legal Costs"). The
Legal Costs shall be payable on demand, and, if the prevailing
party is Landlord, the Legal Costs shall be deemed Additional
Rent, subject to all of Landlord's rights and remedies
provided herein.
d. It is mutually agreed by and between Landlord and Tenant that
the respective parties hereto shall, and they hereby do, waive
trial by jury in any action, proceeding or counterclaim
brought by either of the parties hereto against the other on
any matter whatsoever arising out of or in any way connected
with this Lease, the relationship of Landlord and Tenant,
Tenant's use of or occupancy of the Premises or any claim of
injury or damage and any emergency statutory or any other
statutory remedy. If Landlord commences any summary proceeding
for nonpayment of Rent or Additional Rent, Tenant will not
interpose any counterclaim of whatever nature or description
in any such proceeding.
e. If any term or provision of this Lease is declared invalid or
unenforceable, the remainder of this Lease shall not be
affected by such determination and shall continue to be valid
and enforceable.
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f. The parties executing this Lease warrant that this agreement
is being executed with full corporate authority and that the
officers whose signatures appear hereon are duly authorized
and empowered to make and execute this Lease in the name of
the corporation by appropriate and legal resolution of its
Board of Directors.
g. This Lease contains the entire agreement between the parties
hereto. No representations, inducements, promises or
agreements, oral or otherwise, between the parties not
embodied herein shall be of any force or effect, and all
reliance by Tenant with respect to any representations,
inducements, promises or agreements is based solely on those
contained in this Lease. Any modification to this Lease must
be in writing and duly executed by the parties hereto.
h. Landlord shall take commercially reasonable steps to ensure
the Property's computer based systems are able to operate and
effectively process data including dates on and after January
1, 2000.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under seal on
this ______ day of __________________, 1999.
LANDLORD:
RESTON PLAZA I & II, LLC, a Delaware
limited liability company
By: Principal Office Investors, LLC, a Delaware
limited liability company, its authorized member
By: Principal Life Insurance Company, an
Iowa corporation, its administrative
member
By: /s/ Michael D. Ripson (Seal)
-------------------------------
Its:
By:_______________________________ (Seal)
Its:
TENANT:
MEMBER-LINE SYSTEMS, INC.
By: /s/ Hans C. Kastensmith (Seal)
-------------------------------------------------
Title:President
----------------------------------------
By:_________________________________________________ (Seal)
Title:________________________________________
27
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Exhibit 10.4
MEMBER-LINK SYSTEMS, INC.
CONSULTING AGREEMENT
FOR
ENTERPRISE INTEGRATION CORPORATION
Consulting Agreement Number: MLS-EIC-CA01
THIS CONSULTING AGREEMENT (hereinafter "AGREEMENT") is made and entered into as
of the 27th day of August, 1998, by and between Member-Link Systems, Inc.
(hereinafter "MLS"); a New York corporation with business address of 1615 L
Street, NW; Suite 1150; Washington, DC 20036; and Enterprise Integration
Corporation and (hereinafter "CONSULTANT"), a Louisiana corporation with
business address of One Montrose Metro; 11921 Rockville Pike; Suite 503;
Rockville, Maryland 20852.
WHEREAS, MLS proposes to perform work for itself and for various customers, and
such work may require that it obtain specialized consulting services and;
WHEREAS, CONSULTANT warrants and represents that it has the knowledge,
education, experience, qualifications, capabilities, and resources to render
computer/communications systems integration-related technical, management, and
business development services, and does desire to render such types of services;
NOW THEREFORE, in consideration of the premises and the promises stated herein,
MLS and CONSULTANT (hereinafter "BOTH PARTIES") hereto do mutually agree to the
following articles:
ARTICLE 1. TYPE OF AGREEMENT
This is an indefinite-delivery/indefinite-quantity (ID/IQ) AGREEMENT for
consulting services that will be obtained by individual purchase orders that may
be issued hereunder. Each purchase order will, at a minimum, set forth the
period of performance, invoice and payment terms, contract type and price, scope
of work, milestones and deliverables, and any amendments to the terms and
conditions of this general AGREEMENT. CONSULTANT may not incur costs until a
purchase order has been issued and signed by authorized MLS personnel. Each
specific purchase order executed under this AGREEMENT, together with this
general executed AGREEMENT, constitutes a binding contract between BOTH PARTIES.
The following MLS representatives are authorized to issue purchase orders to
CONSULTANT: Mr. Hans Kastensmith (Chief Executive Officer), who may be reached
at DIRECT TEL: (202) 467-3906; MAIN TEL: (202) 530-5545, and MAIN FAX: (202)
530-5546.
ARTICLE 2. TERM
The term of this AGREEMENT is from August 27, 1998 to August 26, 1999, and will
automatically renew on a yearly basis, unless modified in writing and signed by
BOTH PARTIES or sooner terminated in accordance with Article 8 (TERMINATION)
hereof; provided, however, that Article 7
<PAGE>
(PROPRIETARY AND CONFIDENTIAL INFORMATION) shall survive the termination of this
AGREEMENT.
ARTICLE 3. NATURE OF RELATIONSHIP
CONSULTANT shall at times be, and shall act as, an independent contractor and
shall not have any right, power, or authority to create an obligation, expressed
or implied, on behalf of MLS, except to the extent provided herein. Nothing in
this AGREEMENT shall be deemed, held, or construed as creating a partnership,
pooling arrangement, or joint enterprise for any purpose.
CONSULTANT is not an employee of MLS, and thus shall not be subject to the
provisions of MLS's employee relations policies or entitled to benefits
thereunder. This AGREEMENT and all purchase orders issued under this AGREEMENT,
unless mutually-agreed upon in a signed amendment by BOTH PARTIES, shall be
independent of any or all other MLS contracts and the terms and conditions of
those contracts. CONSULTANT shall be solely liable for filing all applicable
returns and paying all applicable taxes and insurance. MLS will not take
deductions from fees for this purpose.
CONSULTANT is not required to perform exclusively for MLS. This AGREEMENT shall
in no way limit or restrict CONSULTANT from entering into similar or different
agreements with other parties, so long as the PROPRIETARY AND CONFIDENTIAL
INFORMATION clauses are maintained with MLS. CONSULTANT hereby agrees that it
will not, during the term of this AGREEMENT, knowingly participate in any effort
that is competitive with the work set forth in any issued purchase order.
CONSULTANT may perform the work specified in a purchase order issued under this
AGREEMENT at its own facilities and on its own time schedule, unless specified
otherwise in an issued purchase order and contingent upon meeting the milestone
and deliverable requirements specified in the purchase order. No classified work
is expected to be performed under this AGREEMENT. If, however, such work is
required, the security requirements will be expressed in an issued purchase
order.
CONSULTANT warrants that no person or selling agency has been employed or
retained to solicit or secure this AGREEMENT upon any understanding for a
commission, percentage, contingency, or brokerage fee. No member or delegate to
Congress, nor public official, shall be admitted to any share or part of this
AGREEMENT or to any benefit that may arise therefrom. CONSULTANT agrees to
comply with all applicable laws and regulations in performing under this
AGREEMENT.
ARTICLE 4. TYPES OF SERVICES
CONSULTANT shall render to MLS professional computer/communications systems
integration-related consulting services and advice of such nature for such
purposes and at such times as are mutually agreed upon by BOTH PARTIES hereto.
The types of services that shall be made available to MLS by CONSULTANT may
include, but are not limited to, technical services, management services, and
business development services, as follows:
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Technical Services
o Analysis Technical Services (e.g., As-Is & To-Be Business Modeling,
Functional & Technical Requirements Analysis)
o Engineering Technical Services (e.g., Architecture & Product Evaluation,
Network & System Design)
o Implementation Technical Services (e.g., Acquisition &
Installation/Configuration, Application Customization & Testing)
o Support Technical Services (e.g., Operations & Maintenance, Training & Help
Desk)
Management Services
o Work Management Services (e.g., Work Breakdown, Milestone/Deliverable
Definition)
o Schedule Management Services (e.g., Project Scheduling, Schedule Viewing)
o Resource Management Services (e.g., Team Staffing, Staff Augmentation)
o Cost Management Services (e.g., Budgeting, Tracking)
Business Development Services
o Proposal Assistance
o Presentation Assistance
o Marketing Materials Assistance
Documentation (e.g., plans, reports) corresponding to the above services will be
provided to MLS by CONSULTANT in both draft and final format. All draft and
final documentation will be submitted to MLS in both hard copy and in a
mutually-agreeable, on-line computer file format.
Subject to the terms and conditions of this AGREEMENT, MLS agrees to purchase
exclusively from EIC, from time to time, as required, integration services, or
any component thereof, as described above. In accordance with this right of
first refusal, EIC agrees to respond promptly within seven (7) working days to
any written request for proposal by MLS to purchase services from EIC. In the
event EIC chooses not to respond, nothing will prohibit MLS from selecting
services similar to services defined from other vendors.
ARTICLE 5. STANDARD RATES
For time & material (T&M) purchase order contracts, the standard CONSULTANT
rates are as follows:
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Consultant Commercial Government
Labor Category Hourly Rate Hourly Rate
- -------------- ----------- -----------
Principal Operations Staff II $145 $125
Principal Operations Staff I $135 $115
Senior Operations Staff II $125 $105
Senior Operations Staff I $115 $95
Operations Staff II $105 $85
Operations Staff I $95 $75
Associate Operations Staff II $85 $65
Associate Operations Staff I $75 $55
Junior Operations Staff II $65 $45
Junior Operations Staff I $55 $35
Discounted hourly rates may be negotiated under special conditions, such as for
a monthly retainer agreement. Each cost-plus-fixed-fee (CPFF) and
firm-fixed-price (FFP) contract must be negotiated on a case-by-case basis. No
other direct costs (ODCs) may be incurred or will be paid without expressed
written permission granted by MLS on a case-by-case basis.
ARTICLE 6. STANDARD INVOICE/PAYMENT TERMS
CONSULTANT will prepare and submit invoices to MLS a maximum of twice a month.
Payment from MLS to CONSULTANT for each invoice is due a maximum of 10 calendar
days from the date MLS receives payment from its paying direct
customers/contractors, and no later than 90 days after submission of the
invoice. All MLS checks to the CONSULTANT will be made to Enterprise Integration
Corporation (EIC) at One Montrose Metro; 11921 Rockville Pike; Suite 503;
Rockville, Maryland 20852. If there are any questions, Mr. Neil Kleinberg will
be the CONSULTANT point-of-contact and may be reached at (301) 998-3245.
Each CONSULTANT invoice to MLS must reference the MLS purchase order number, MLS
CONSULTING AGREEMENT number, CONSULTANT'S name, mailing address, type of
contract, amount currently invoiced, total contract value, amount invoiced to
date, and amount outstanding.
Each invoice must be accompanied by a Status Update that will include the work
accomplished during the current period, the work planned for the next period,
and any alerts encountered with responsive actions.
ARTICLE 7. PROPRIETARY AND CONFIDENTIAL INFORMATION
CONSULTANT shall not use, duplicate, or divulge, in any way, any proprietary or
confidential information belonging to or supplied by or otherwise made available
by MLS, with the exception of such disclosure needed for the performance of work
specified in a purchase order issued hereunder or at the direction of MLS. All
customer-specific information prepared or originated by CONSULTANT in the
performance of work specified under a purchase order issued hereunder shall
become and remain the property of MLS.
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CONSULTANT, however, maintains all rights to the ideas, concepts, contents, and
enhancements of the "Services and Products for Enterprise-Wide Customer
Solutions (SPECS)" methodology and other information previously conceived by
CONSULTANT before entering into this AGREEMENT. MLS may only use such
proprietary and confidential information of CONSULTANT with expressed written
permission granted by CONSULTANT on a case-by-case basis.
ARTICLE 8. TERMINATION
Except as otherwise provided under Article 7 (PROPRIETARY AND CONFIDENTIAL
INFORMATION), MLS or CONSULTANT may terminate this AGREEMENT, in whole or In
part, for convenience or any other reason with 30 calendar days written notice.
Termination of this AGREEMENT shall not affect those obligations already
initiated by either party; thus, if a purchase order has already been signed,
the AGREEMENT, as well as the terms and conditions of the purchase order, will
remain active and in effect through completion of the work specified within the
purchase order and for all due payments to CONSULTANT.
ARTICLE 9. MODIFICATIONS
This AGREEMENT (with each related purchase order) constitutes the entire
AGREEMENT of BOTH PARTIES hereto, and all previous interactions between the
parties, whether written or oral, with reference to the subject matter of this
AGREEMENT are hereby canceled and superseded. This AGREEMENT may not be
modified, except in writing and signed by authorized representatives of BOTH
PARTIES.
ARTICLE 10. HEADINGS
The article headings included herein are inserted only for convenience and
reference, and in no way define, limit, or describe the scope of the AGREEMENT
or the intent of any provisions hereof.
5
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ARTICLE 11. AUTHORIZED SIGNATURES
IN WITNESS WHEREOF, MLS has caused this AGREEMENT to be signed in its name and
on its behalf by its representative thereunto duly authorized, and CONSULTANT
has caused this AGREEMENT to be signed in its name and on its behalf by its
representatives thereunto duly authorized as of the day and year.
AUTHORIZED MLS EXECUTIVE
NAME: James Wholey
------------------------------------
SIGNATURE: /s/ James Wholey
------------------------------------
TITLE: General Counsel
------------------------------------
DATE: 10/19/98
------------------------------------
AUTHORIZED CONSULTANT REPRESENTATIVE
NAME: Neil A. Kleinberg
------------------------------------
SIGNATURE: /s/ Neil A. Kleinberg
------------------------------------
TITLE: Executive Vice President, Operations
------------------------------------
DATE: 10/2/98
------------------------------------
6
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Exhibit 10.5
AGREEMENT
TO
HOLD HARMLESS AND INDEMNIFY
Agreement made this 2nd day of September, 1999, by and between
U.S. Medical Alliance, a Delaware Corporation, and its successor in interest
I-Trax.com, also a Delaware Corporation (collectively, "UMAI"); and Member-Link
Systems, Inc., a Delaware corporation ("MLS").
UMAI and MLS have agreed to enter into various arrangements
and joint business activities, as evidenced by other agreements being made
between them contemporaneously with this one. Except for the discussions leading
up to these arrangements, which have proceeded for approximately 30 days prior
to this Agreement, MLS and UMAI have had no previous dealings, business
arrangements, investment in each other, or joint activities of any kind
whatsoever.
Therefore, as part of its consideration for the contribution
by MLS of its licenses and other things of value, UMAI hereby agrees to hold
harmless, indemnify and defend MLS, its officers, directors, employees and
shareholders, from and against any losses, claims, lawsuits, damages,
liabilities, fines and expenses (including attorneys' fees and costs) arising
out of or relating to any activities, transactions, litigation, contracts, or
securities matters involving UMAI that may have or are alleged to have occurred
prior to the closing date of the transfer of equity consideration to MLS. This
provision includes in its scope but is not limited to, any activities,
transactions, litigation, contracts or securities matters conducted under either
of the names attributed above to UMAI, or otherwise involving them.
UMAI, and the undersigned on its behalf, represents and
warrants that it has full legal rights, power and authority to make the
foregoing Agreement, and that this Agreement is legal, valid and binding, and
enforceable against it in accordance with its terms.
Signed: /s/ Frank A. Martin Date: September 2, 1999
------------------------------------------ -----------------
Frank A. Martin, President & Chairman
U.S. Medical Alliance and I-Trax.com
Signed: /s/ Hans C. Kastensmith Date: September 2, 1999
----------------------------------------- -----------------
Hans C. Kastensmith, President & Chairman
Member-Link Systems, Inc.
1
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Exhibit 10.6
SOFTWARE AND PROPRIETARY PRODUCT
CORPORATE LICENSE AGREEMENT
THIS SOFTWARE AND PROPRIETARY PRODUCT CORPORATE LICENSE
AGREEMENT ("Agreement") is made effective and entered into as of this __________
day of September, 1999 by and between I-TRAX.COM, INC., a Delaware Corporation
with its principal place of business at (hereinafter referred to as "I-TRAX")
and MEMBER-LINK SYSTEMS, INC., a Delaware Corporation having its principal place
of business at 11 Dupont Circle NW, Suite 325, Washington DC, 20036 (hereinafter
referred to as "Licensor").
IN CONSIDERATION of the mutual covenants and conditions herein
contained, the Parties hereto agree as follows:
1. DEFINITIONS:
1.1. "SOFTWARE" means the computer software programs proprietary
product described in Schedule A, attached hereto and made a part hereof, and, as
herein defined, all Documentation.
1.2. "LICENSE FEE(s)" are the only fees or royalties to be paid by
I-TRAX to Licensor for the license(s) granted under this Agreement. LICENSE
FEE(s) are described in Schedule A, attached hereto and made a part hereof.
1.3. "Affiliate" means any person, partnership, joint venture,
corporation or other form of enterprise, domestic or foreign, including, but not
limited to, subsidiaries, which directly or indirectly Control, are Controlled
by, or are under common Control with I-TRAX.
1.4. "Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and operating policies
of the entity in respect of which the determination is being made, through the
ownership of voting securities [at least fifty percent (50%) of its voting or
equity securities or the maximum as allowed by law], contract, voting trust or
otherwise.
1.5. "Documentation" shall mean, all materials, documentation,
Specifications, technical manuals, user manual, flow diagrams, file descriptions
and other written information either, from time to time, received by I-TRAX from
Licensor or published by Licensor that describes the function and use of the
SOFTWARE.
1.6. "Specifications" means the functional and operational
characteristics of the SOFTWARE as described in the Licensor's Documentation or
as otherwise described in Schedule A.
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1.7. "Other Confidential Information" means technical or business
information, other than SOFTWARE, which is:
a. Disclosed by a party ("Disclosing Party") in writing and is
marked as confidential at the time of disclosure; or
b. Disclosed by a party in any other manner and is identified as
confidential at the time of disclosure and is also summarized and designated as
confidential in a written memorandum delivered to the other party ("Receiving
Party") within thirty (30) days after the disclosure.
2. GRANT:
a. In consideration of the undertakings and contributions by
I-TRAX.COM agreed to elsewhere in this Agreement, Licensor grants to I-TRAX an
exclusive 10 year license to develop, market, sell distribute and operate its
copyrighted and trade-protected I-TRAX immunology data monitoring and
information system, database access software, and product interfaces in an
Internet and web-enabled application. The license, however, shall be
automatically renewed for additional 10 year periods, unless revoked in writing
and signed by both parties to this Agreement. For purposes of this Agreement,
"Internet and web-based application" means any application whereby the
information is gathered, input and accessed by the user via a site or portal
(whether or not encryption-protected) using Internet-protocol means of
transmission and accessible from outside any area - or system-limited network.
The first 10-year license period shall commence with the execution of final
closing documents in connection with this Agreement.
b. In addition, Licensor grants I-TRAX an exclusive 10-year
license, with 10 year automatic renewals, for the use of the trademarked I-TRAX
product name in connection with such Internet and web-enabled applications.
However, the I-TRAX trademark and trade names shall remain the sole and
exclusive property of Licensor.
c. Licensor also hereby grants to I-TRAX an exclusive 10-year
license, with 10 year renewals to use the copyrighted I-TRAX customer/user
interface screens for such applications, as well as for any that might
subsequently be developed for such purposes during the terms of this Agreement;
which nonetheless would remain the sole and exclusive property of Licensor.
d. In consideration of the undertakings and contributions agreed
to elsewhere in this Agreement, Licensor hereby grants to I-TRAX an exclusive
10-year license, with 10 year renewals to develop, market, sell, distribute and
operate its copyrighted and trade-protected I-TRAX immunology data monitoring
and information system, database access software and product interfaces in
enterprise applications. For purpose of the Agreement, "enterprise applications"
means applications using an internal system or client-server network within a
particular market or customer organization, whether or not Internet-accessible.
This license for
2
<PAGE>
such enterprise applications is conditioned upon and subject to the payment by
I-TRAX to Licensor of a 10% net proceeds royalty from each sale and installation
of such applications.
e. Licensor grants to I-TRAX an exclusive 10-year license, with 10
year renewals for the use of the trademarked I-TRAX product name in connection
with such enterprise applications, subject to the conditions listed above.
However, the I-TRAX trademark and trade name shall remain the sole and exclusive
property of the Licensor.
f. I-TRAX, for its part upon receipt of such exclusive license,
hereby agrees to grant to Licensor an exclusive cross-license to develop,
market, sell, distribute and operate its exclusively licenses I-TRAX system,
trade name, trademark and user interfaces, in an enterprise application as
described above, or in any other design-build operation, in connection with a
sale or installation of the system and software at any agency or service branch
of the United States Department of Defense. The term of such grant shall be
co-extensive with the term remaining on I-TRAX's exclusive license.
g. I-TRAX and Licensor agree that all development, marketing,
sales, distribution, installation and operation of the I-TRAX software, system
and product, in whatever application, shall be undertaken only subject to
appropriate non-disclosure, non-circumvention, and sub-licensing agreements
binding upon all relevant parties. The terms of such sub-licenses shall be in a
form approved by counsel to Licensor. I-TRAX agrees that it will seek vigorously
to protect its and Licensor's interest in the intellectual property rights which
are the subject of this Agreement, and that its failure to do so may void this
Agreement. Licensor reserves the right to intervene, upon 15 days written notice
to I-TRAX, to enforce this provision and protect its rights against
sub-licensees if it believes in good faith upon documentable evidence that
I-TRAX is failing to do so, and to seek damages and costs (including reasonable
attorneys' fees) from all parties, including I-TRAX. Licensor agrees it shall
not so proceed if I-TRAX, upon receipt of such notice, acts in timely fashion
adequately to protect these rights.
h. Should I-TRAX fail within a reasonable period of time (for
purposes of this Agreement, not less than 10 but not more than 18 months) to
demonstrate significant good faith efforts to commercially exploit the licenses
granted under this Agreement, Licensor shall have the right to reopen this
Agreement and either renegotiate its terms or revoke the licenses so that its
interests may be recovered. Demonstrable good faith efforts may be shown by 1)
adequate investment in development of the product, 2) published and distributed
marketing materials and 3) documented customer sales contracts or negotiations.
i. License: Licensor hereby grants to I-TRAX and I-TRAX hereby
accepts from Licensor license to use software and documentation and any hardware
now or hereafter used by I-TRAX as set forth in this Agreement. This License
includes, without limitation, a grant to I-TRAX of the right to utilize the
SOFTWARE for the benefit of any or all of (i) I-TRAX and (ii) any Affiliate(s).
I-TRAX and Affiliates shall have the right to make an unlimited number of copies
of SOFTWARE. I-TRAX agrees not to remove or destroy any
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proprietary markings or Proprietary legends placed upon or contained within the
SOFTWARE or Documentation.
j. Title: This License does not include a grant to I-TRAX of any
ownership right, title, or interest, or any security or other interest, in any
intellectual property rights relating to the SOFTWARE or in any copy of any part
of the SOFTWARE.
3. TERM: The license rights granted hereunder are described above.
4. DEFAULT: The following acts or omission by I-TRAX shall be deemed
to be an event of default by I-TRAX and a breach under this Agreement:
a. If I-TRAX:
i. Does not pay Licensor their cost to develop the Internet
application for I-TRAX.COM, INC. pursuant to attached
Schedule B, which Schedule sets forth the billing rates to
be charged and the maximum amount, which amount shall not
be exceeded, without written consent of both parties.
ii. Should I-TRAX fail to pay any charge, expense or cost due,
and said failure shall continue for a period of ten (10)
days after written notice from Licensor and received by
I-TRAX, said event shall constitute a default.
iii. Should I-TRAX discontinue the use of the software or is
financially unable to continue the promotion of the same;
becomes embarrassed or insolvent; or makes an assignment
for the benefit of creditors; or if a Petition in
Bankruptcy is filed by or against I-TRAX; or a Complaint
in Equity or other proceedings for the appointment of a
receiver for I-TRAX is filed; or proceedings for
reorganization for composition with creditors under any
state or federal law be instituted by or against I-TRAX;
or if the real or personal property of I-TRAX shall be
levied upon or sold.
b. In the event of an occurrence of an event of default hereunder:
i. The whole balance, if any, for charges, payment or costs
for the development of the software and expenses for the
same as herein agreed shall be paid by I-TRAX.
ii. At the option of Licensor, this Agreement and the terms
hereby created shall determine to become absolutely void
without any right on the part of I-TRAX to reinstate this
Agreement by
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payment of any sum due or by performance of any other
condition, term or covenant broken; thereupon
iii. I-TRAX shall immediately quit and surrender to Licensor
the software and any improvements thereon, and Licensor
may repossess the same by summary proceedings, detainer or
otherwise, at Licensor's option, without being liable for
prosecution or damages therefore.
c. In the event of any default as above set forth, Licensor or
anyone acting on Licensor's behalf at Licensor's option:
i. May repossess the software and any copies and improvements
thereof.
ii. I-TRAX shall be liable for such damages arising out of the
breach of any of the terms, covenants and conditions of
this Agreement.
d. In the event of a breach or a threatened breach by I-TRAX of
any of the agreements, conditions, covenants or terms hereof,
Licensor shall have the right of injunction to restrain the
same and the right to invoke any remedy allowed by law or in
equity, whether or not other remedies, indemnity or
reimbursements are herein provided. The rights and remedies
given to the Licensor in this Agreement are distinct, separate
and cumulative remedies, and no one of them, whether or not
exercised by Licensor, shall be deemed to be in exclusion of
any of the others.
e. I-TRAX, in the event its default in the performance of any of
the terms, conditions or covenants of this Agreement requires
that the Licensor, in the exercise of its sole reasonable
discretion, to use the services of any attorney, to attempt to
or successfully remedy such default, that I-TRAX will reimburse
Licensor for any and all reasonable expenses incurred in its
use of such attorney, and in any action which said attorney may
take. Such expenses shall include, but are not limited to:
reasonable legal fees, court costs, costs of filing and
service, serving summonses and/or complaints.
4.1. If I-TRAX defaults in the performance of any of its obligations
hereunder, and such default continues for sixty (60) days after receipt of
written notice from Licensor, Licensor shall have the right to terminate the
license rights granted hereunder with respect to the use or location of the
SOFTWARE for which I-TRAX has defaulted.
4.2. If Licensor defaults in the performance of any of its obligations
hereunder, and such default continues for sixty (60) days after receipt of
written notice from I-TRAX, I-TRAX
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shall have the option: (1) to terminate this Agreement; or (2) to so declare a
breach of this Agreement but not to terminate this Agreement and exercise any
rights at law or in equity available to I-TRAX. I-TRAX's decision to declare a
breach of this Agreement but not to terminate it shall mean that I-TRAX shall
retain its perpetual license of SOFTWARE hereunder.
4.3. Upon termination of license rights hereunder, I-TRAX shall, at
Licensor's request, either return to Licensor or destroy all copies of the
applicable SOFTWARE.
5. DOCUMENTATION: Licensor shall supply Documentation necessary to use
SOFTWARE effectively. Licensor shall provide I-TRAX with a minimum of two copies
per SOFTWARE copy installation of the Documentation. Licensor grants to I-TRAX
and Affiliates permission to duplicate all printed Documentation for I-TRAX's or
Affiliate's uses permitted herein, subject to appropriate binding non-disclosure
and confidentiality agreements.
6. PAYMENT: Payment shall be in the form of Three Million (3,000,000)
shares of Common Stock of I-TRAX.COM, INC. In addition thereto, disbursement of
shares of common stock by I-TRAX.COM, INC. shall be made in accordance with the
letter of intent between Mr. Hans Kastensmith, President, Member-Link Systems,
Inc. and Frank A. Martin, President, U.S. Medical Alliance dated August 2, 1999,
a copy of which is attached hereto.
7. DELIVERY INSTALLATION AND ACCEPTANCE: Licensor is currently the
owner of intellectual property for an immunization tracking system called
"I-TRAX". Pursuant to this Agreement, the parties are entering into an exclusive
agreement between Licensor and I-TRAX for the intellectual rights to the
Internet version of I-TRAX. I-TRAX is also entering into an exclusive
Development Agreement with Licensor to develop I-TRAX into a web-enabled program
and to create an e-commerce version of I-TRAX for Internet deployment.
7.1. At I-TRAX's option:
7.1.1. SOFTWARE on suitable media and accompanied by Documentation
shall be delivered to I-TRAX at the addresses and on the agreed upon date(s)
specified in the applicable Purchase Order(s), or
7.1.2. Licensor shall make available to I-TRAX in electronic form,
accessible via the Internet or otherwise as the parties may agree, SOFTWARE and
Documentation on the agreed upon date(s) specified in the applicable Purchase
Order(s). In the event Licensor fails to deliver in accordance with the terms of
the applicable Purchase Order(s), I-TRAX shall have the right to cancel such
Purchase Order(s), in whole or in part, without any penalty of whatever nature.
7.2. I-TRAX, at its option, may elect to have Licensor provide the
installation services listed on the attached Schedule(s). If I-TRAX desires such
services, it will so indicate via its written Purchase Order(s).
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7.3. Within a reasonable time after receipt of the SOFTWARE, I-TRAX
will install the SOFTWARE and may provide a notice for acceptance of same in
writing to Licensor. In the absence of said notification of acceptance or
written notice to Licensor stating that the SOFTWARE is not accepted and
indicating the reasons therefor, the SOFTWARE will be deemed accepted, as
defined herein, on the date of delivery of the SOFTWARE to I-TRAX.
8. WARRANTY:
8.1. Licensor warrants that the SOFTWARE will conform to the
Specifications and Documentation. Licensor further warrants that the SOFTWARE
shall be free of program errors for a period of one (1) year ("Warranty Period")
after acceptance by I-TRAX. Licensor's responsibility under the Warranty shall
be to provide Licensor's most comprehensive SOFTWARE maintenance service to
I-TRAX, including correction of program errors, all of which shall be in
accordance with the Management and Technical Service Agreements between the
parties.
8.2. If, within the Warranty Period, I-TRAX shall give Licensor oral or
written notice or an error contained in the SOFTWARE, Licensor will, upon
receipt of such notice, investigate such error as soon as possible but not later
than five (5) working days after receipt of such notice, and will correct such
(and deliver to I-TRAX object code, source code if appropriate, Documentation
and user's manuals for such correction) within thirty (30) days after receipt of
such notice.
8.3. If correction is not possible, Licensor shall replace defective
SOFTWARE with software of equivalent functionality as determined by I-TRAX, or,
at I-TRAX's option, refund the LICENSE FEES paid for such SOFTWARE.
8.4. Further, Licensor warrants that it has good title to SOFTWARE free
and clear of any and all liens or encumbrances and has the right to enter into
this Agreement.
9. SUPPORT: I-TRAX and the Licensor have executed a Technical Services
Agreement for the SOFTWARE in accordance with the terms and conditions of said
Technical Agreement. Maintenance support services shall include, but not be
limited to, correction of errors, updates and enhancements. If I-TRAX desires
technical services, it will so notify Licensor within sixty (60) days after the
expiration of the Warranty Period.
10. PATENTS, COPYRIGHTS AND OTHER PROPRIETARY RIGHTS: Licensor, agrees,
at its sole expense, to defend, indemnify, and hold I-TRAX harmless from and
against all costs and liabilities in connection with any claim, suit or action
for infringement of patents, copyrights, or other proprietary rights associated
with any portion of the SOFTWARE and Documentation or its intended use. I-TRAX
shall have the right to be represented in any suit or action by advisory counsel
of I-TRAX's selection at I-TRAX's expense. Should any portion of the SOFTWARE or
Documentation or its intended use become, or in Licensor's opinion be likely to
become, the subject of a claim of infringement of a patent, copyright, or other
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proprietary right, Licensor shall procure for I-TRAX the right to continue using
the SOFTWARE or shall replace or modify it without degradation to functionality
to make it non infringing. If neither of the foregoing solutions is reasonably
available, Licensor shall refund the LICENSE FEE to I-TRAX.
11. LIMITATION OF LIABILITY:
11.1. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT OR A PURCHASE
ORDER, LICENSOR DISCLAIMS ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A SPECIFIC PURPOSE. EXCEPT
IN THE EVENT OF FRAUD OR WILLFUL MISCONDUCT, NEITHER PARTY SHALL BE LIABLE FOR
SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES. PROVIDED, HOWEVER, THAT LICENSOR
SHALL BE LIABLE FOR CONSEQUENTIAL DAMAGES ARISING FROM A BREACH OF THE WARRANTY
OF TITLE OR A BREACH OF WARRANTY THAT LICENSOR HAS A RIGHT TO ENTER INTO THIS
AGREEMENT PROVIDED FOR IN THE WARRANTY ARTICLE OF THIS AGREEMENT.
11.2. No action, regardless of form, arising out of this Agreement may
be brought by either party more than two (2) years after the cause of such
action has arisen.
12. CONFIDENTIAL INFORMATION:
12.1. OBLIGATIONS REGARDING SOFTWARE: During the term of this
Agreement, I-TRAX shall keep confidential the SOFTWARE code provided to I-TRAX
as described in Schedule A and provide the same degree of care as exercised
toward its own proprietary information. Subject to the right of I-TRAX to extend
licenses granted hereunder to Affiliates pursuant to this Agreement and as
provided in the Articles entitled "CONTRACTORS" and "DIVESTITURES", SOFTWARE
shall be disclosed only with I-TRAX as reasonably necessary.
12.2. OBLIGATIONS REGARDING OTHER CONFIDENTIAL INFORMATION: For a
period of five (5) years following the date of each disclosure of Other
Confidential Information, the Receiving Party will maintain such Other
Confidential Information as confidential.
12.3. EXCEPTIONS: The foregoing obligations shall not apply to any
portion of the SOFTWARE or Other Confidential Information which:
a. Is or becomes known publicly through no fault of the Receiving
Party; or
b. Is learned by the Receiving Party from a third party entitled
to disclose it; or
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c. Is already known to the Receiving Party before receipt from
the Disclosing Party as shown by the Receiving Party's written
records; or
d. Is independently developed by the Receiving Party as shown by
the Receiving Party's written records; or
e. Must be disclosed under operation of law.
12.4. Licensor agrees to keep and cause its employees to keep the
existence of this Agreement and the nature of Licensor's obligations hereunder
strictly confidential and not to disclose any information with respect thereto
to any third party or entity. Licensor shall not use, and shall keep its
employees from using, I-TRAX as a reference in marketing any software or
services to any third party or entity without I-TRAX's prior written consent.
13. ASSIGNMENT:
13.1. Neither party may assign this Agreement in whole or in part
without the prior written approval of the other party hereto. Such approval will
not be unreasonably withheld. Any such attempted assignment without prior
written consent shall be null and void. Notwithstanding the foregoing, either
party may assign its right, title and interest in this Agreement to any company
with which it may merge or consolidate or which acquires substantially all of
the business and assets of such party.
14. DISPUTE RESOLUTION:
14.1. Both parties understand and appreciate that their long term
mutual interests will be best served by affecting a rapid and fair resolution of
any claims or disputes which may arise out of services performed under this
contract or from any dispute concerning contract terms. Therefore, both parties
agree to use their best efforts to resolve all such disputes as rapidly as
possible on a fair and equitable basis. Toward this end both parties agree to
develop and follow a process for presenting, rapidly assessing, and settling
claims on a fair and equitable basis.
14.2. If any dispute or claim arising under this contract cannot be
readily resolved by the parties pursuant to the process referenced in the
preceding paragraph, the parties agree to refer the matter to a panel consisting
of one (1) senior executive from each party not directly involved in the claim
or dispute for review and resolution. A copy of the contract terms, agreed upon
facts (and areas of disagreement), and concise summary of the basis for each
side's contentions will be provided to both executives who shall review the
same, confer, and attempt to reach a mutual resolution of the issue.
14.3. If the dispute cannot be resolved under the process set forth
above, the parties may elect to resolve the dispute through non-binding
mediation, if mediation is to be utilized, the parties shall select a single
unrelated but qualified Mediator who shall hold a hearing (not to exceed one
day) during which each party shall present its version of the facts (supported,
if
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desired by sworn, written testimony, and other relevant documents), its
assessment of damages, and its argument. The parties shall provide the Mediator
with copies of all documents provided to their senior executives under the
preceding paragraph at least ten (10) days prior to the scheduled date of the
mediation hearing. The parties may also provide the Mediator with copies of any
laws or regulations which they feel are relevant to the dispute. A copy of the
contract will be provided to the Mediator. Formal written arguments, legal
memorandum, and live testimony are discouraged but may be permitted at the
discretion of the Mediator. Both parties agree to make any involved employees or
documents available to the other party for its review and use in preparing its
position under this clause without the need for subpoena or other court order.
14.4. The Mediator, within ten (10) days of the completion of the
hearing, will meet with both parties and provide each of them, on a confidential
basis, with his written views of the strengths and weaknesses of their
respective positions. The parties will then reconvene and, with the assistance
of the Mediator, attempt to resolve the matter. If the resolution cannot be
achieved by the parties within forty-eight (48) hours of this second meeting,
the Mediator will, within ten (10) additional days, issue a written, non-binding
decision on the issue.
14.5. If the matter has not been resolved utilizing the processes set
forth in this clause and the parties are unwilling to accept the non-binding
decision of the Mediator, either or both parties may elect to pursue resolution
through litigation.
14.6. The costs of the Mediator shall be borne by the losing party
(determined at mediation or through subsequent litigation). Each party will bear
its own costs of mediation.
15. THIRD PARTY SERVICES:
15.1. For the purpose of this Third Party Services Article, the
following definitions shall apply:
"Third Party Service Provider" means a third party which, upon I-TRAX's
consent: (1) operates computers and/or facilities where SOFTWARE is installed on
such computers or within such facilities and is used by I-TRAX as otherwise
provided for under this Agreement; or (2) Uses or Accesses the SOFTWARE to
provide services to I-TRAX including, but not limited to: facility management,
SOFTWARE and/or hardware installation and maintenance, operation of computer
systems, creation of new applications or uses of SOFTWARE in I-TRAX's
businesses, business process re-engineering or reorganization, or disaster
recovery services.
"Use" means to load, execute, employ, utilize, store, upgrade, transfer
or display the SOFTWARE.
"Access" means to receive commands, data or information from; or send
commands, data or information to the SOFTWARE by any means, including but not
limited to, from any location(s) through use of any computers or other hardware
devices, and via any communications
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networks, including but not limited to, I-TRAX's own communications networks,
public or private telephone lines or the Internet.
15.2. The purpose of this Article is to: (1) grant Third Party Service
Provider(s) the same rights of Use and Access as accorded I-TRAX under this
Agreement, provided that such Use and Access is solely to provide services to
I-TRAX and is made subject to the provisions of this article; and (2) grant
I-TRAX the right to Use and Access SOFTWARE, and as otherwise provided for under
this Agreement, where a Third Party Service Provider(s) is employed by I-TRAX.
15.3. I-TRAX may permit a Third Party Service Provider(s) to Use or
Access the SOFTWARE provided: (a) Licensor, I-TRAX, and each such Third Party
Service Provider(s) execute a confidentiality agreement mutually acceptable to
Licensor and I-TRAX prior to such use or access; and (b) such Third Party
Service Provider(s) shall be permitted Access or Use, in whole or in part, the
SOFTWARE to operate all or part of the business of I-TRAX, and such Access or
use may be carried out in facilities, domestic or foreign, owned or leased by
I-TRAX or such Third Party Service Provider(s).
15.4. Contractors, as defined and provided for in the CONTRACTORS
article of this Agreement, shall have the right to Access and Use the SOFTWARE
via a Third Party Service Provider(s).
15.5. A Third Party Service Provider(s) may not Access or Use SOFTWARE
for any purpose other than as specified herein without Licensor's written
consent.
15.6. With respect to the SOFTWARE and Licensor's Other Confidential
Information, each such Third Party Service Provider shall be bound by an
obligation of non-disclosure no less restrictive than that which binds I-TRAX
under this Agreement.
15.7. I-TRAX shall be responsible for any additional SOFTWARE,
migration tools, or third party software needed to employ a Third Party Service
Provider(s).
15.8. In the event that a Third Party Service Provider has licensed
SOFTWARE from Licensor and such license permits such Third Party Service
Provider to use the licensed SOFTWARE to provide services to I-TRAX, then I-TRAX
may elect whether its Use or Access shall be governed by this Agreement or the
license granted to such Third Party Service Provider.
16. LOCKOUTS: Licensor represents and warrants that no "lockout",
restraint, or disabling code or devices are incorporated or present within the
SOFTWARE at the time the SOFTWARE is licensed by Licensor to I-TRAX. In no event
will Licensor remove, alter, change or interfere with the SOFTWARE for purposes
of preventing I-TRAX, Affiliates, or other parties so permitted under this
Agreement from using the SOFTWARE, as the result of any dispute under this
Agreement. Licensor will not, prior to such licensing or thereafter during the
term of this license or any license for an upgraded or modified version of
SOFTWARE, modify
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SOFTWARE to restrict its use by I-TRAX, Affiliates, or other parties so
permitted under this Agreement to, without limitation, particular CPUs, required
passwords, periods of time, or other restrictions, without the prior written
agreement of I-TRAX.
17. YEAR 2000:
17.1. In addition to any other express or implied warranties or
covenants made in this Agreement, Licensor hereby warrants and covenants that
SOFTWARE will correctly perform, process and handle (without causing an abnormal
abend or abort or resulting in invalid outputs) all multi-century, leap years or
other date-related processes prior to and after the century change, including by
way of illustration and without limitation, functions, conversions,
calculations, comparisons, sort ordering, operations and interfaces (including
system to application, application to application and application to data-base
management systems). The SOFTWARE date data must be specified explicitly or by
unambiguous algorithms or by inferencing rules, as specified in this Agreement,
in order to correctly interface with other equipment, software and/or systems
and for data storage.
17.2. Licensor agrees that it will not permit a Year 2000 Problem of
computer systems, software or equipment under its control to prevent, delay or
otherwise interfere with its performance under this Agreement. A "Year 2000
Problem" means a date handling problem relating to the Year 2000 date change
that would cause a computer system, software or equipment to fail to correctly
perform, process and handle date-related data for the dates within and between
the twentieth and twenty-first centuries and all other centuries.
18. MISCELLANEOUS PROVISIONS:
18.1. TAXES: I-TRAX agrees either to pay directly all property taxes,
licenses, charges and assessments properly levied by any properly constituted
governmental authority upon SOFTWARE or to reimburse Licensor therefor if paid
by Licensor at I-TRAX's written direction. Licensor assumes full responsibility
for the payment of all taxes applicable to Licensor's actions, employees,
facilities and materials for performing services hereunder or applicable to
Licensor's income or gross receipts hereunder, or franchise taxes.
18.2. ENHANCEMENTS: In the event that I-TRAX has received source code,
I-TRAX may modify, correct or enhance the SOFTWARE in any manner, and any such
modifications, enhancements, or corrections and any related materials and
documentation (and all proprietary rights therein, including copyrights) shall
be mutually cross-licensed on equal terms between the parties hereto.
18.3. COMPLIANCE WITH LAWS: Each party will comply with all United
States and foreign laws, ordinances, and regulations properly applicable to this
Agreement.
18.4. AUTHORITY: The parties hereby represent that they have full power
and authority to enter into and perform this Agreement and the parties do not
know of any contract,
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agreements, promises or undertakings which would prevent the full execution and
performance of this Agreement.
18.5. SEVERABILITY: In the event that any provisions of this Agreement
shall be found to be void or unenforceable, such findings shall not be construed
to render any other provision of this Agreement either void or unenforceable,
and all other provisions shall remain in full force and effect unless the
provisions which are invalid or unenforceable shall substantially affect the
rights or obligations granted to or undertaken by a party.
18.6. NOTICES: Notices provided for under this Agreement shall be sent
in writing and shall be addressed to the addresses first above written and may
be served in person or sent by Certified Mail, return receipt requested. A party
may change the address for notification by thirty (30) days prior written notice
thereof to the other party.
18.7. INDEPENDENT CONTRACTOR: As between Licensor and I-TRAX, the
employees, methods, equipment, and facilities used by Licensor shall at all
times be under its exclusive direction and control. Licensor's relationship to
I-TRAX under this Agreement shall be that of an independent contractor, and
nothing in this Agreement shall be construed to constitute Licensor, or any of
its employees or officers, as an agent, employee, associate, joint venturer, or
partner of I-TRAX.
18.8. RESERVATION OF RIGHTS: A party's waiver of any of its remedies
afforded hereunder or by law is without prejudice and shall not operate to waive
any other remedies which such party shall have available to it.
18.9. HEADINGS: The headings of the provisions of this Agreement are
inserted for convenience only and shall not constitute a part hereof.
18.10. APPLICABLE LAW: This Agreement will be governed by and construed
in accordance with the laws of the State of Delaware without giving effect to
principles of conflict of law.
19. ENTIRETY: This Agreement together with the attachments, Exhibits,
and Schedules specifically referenced and attached hereto embodies the entire
understanding between I-TRAX and Licensor and there are no contracts,
understandings, conditions, or representations, oral or written, with reference
to the subject matter hereof which are not merged herein. Except as otherwise
specifically stated, no modification hereto shall be of any force or effect
unless (1) reduced to writing and signed by both parties hereto, and (2)
expressly referred to as being a modification of this Agreement. This Agreement
shall be binding upon and inure to the benefit of the successors and permitted
assigns of the parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
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Attest: I-TRAX.COM, INC.
BY: /s/ Frank A. Martin
- ---------------------------------- ---------------------
Attest: MEMBER-LINK SYSTEMS, INC.
BY: /s/ Hans Kastensmith
- ---------------------------------- ---------------------
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Exhibit 10.7
MANAGEMENT SERVICES AGREEMENT
THIS AGREEMENT ("Agreement") is made effective and entered into as of
this 3rd day of September, 1999 by and between I-TRAX.COM, INC., a Delaware
Corporation with its principal place of business at _______________ (hereinafter
referred to as "I-TRAX") and MEMBER-LINK SYSTEMS, INC., a New York corporation
having its principal place of business at 11 Dupont Circle NW, Suite 325,
Washington DC, 20036 (hereinafter referred to as "Licensor").
WHEREAS, I-TRAX and Licensor have entered into a Software and
Proprietary Corporate Licensing Agreement ("Licensing Agreement") dated the 3rd
day of September, 1999; and
WHEREAS, said Licensing Agreement sets forth the terms and conditions
upon which I-TRAX may use the product; and
WHEREAS, the parties hereto recognize that the I-TRAX software will
require technical support by the Licensor in management of the asset.
NOW, THEREFORE, for and as consideration for the parties entering into
the Licensing Agreement, it is hereby agreed that the Licensor shall manage and
service the software referred to as "I-TRAX Immunization" as follows:
BUSINESS MANAGEMENT:
1. Term. The term of the Management Agreement shall be for two (2)
years unless sooner terminated by mutual consent. Thereafter, the Agreement may
be terminated by either party upon sixty (60) days written notice to the other
party.
2. Payment. Payments for the Management of the Technical aspects of the
system and software under this Agreement shall be tendered by I-TRAX during the
term hereof at the rate of Ten Thousand Dollars ($10,000.00) per month.
3. Duties. The duties of the Licensor include but are not limited to
the following:
a. Technical sales support.
b. Sponsorship Development - Licensor shall coordinate with I-TRAX
personnel to develop Web-site sponsors and to manage the business
relationship with existing sponsors.
c. Coordinate and develop a public relations program designed to
promote the business purpose of I-TRAX.
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d. Pricing Support. Licensor will provide limited support to I-TRAX
concerning the pricing of services provided by I-TRAX. Pricing
decisions will ultimately be determined by I-TRAX.
e. Assistance in interviewing and hiring a management team for
I-TRAX.
MISCELLANEOUS PROVISIONS
1. TAXES. I-TRAX agrees either to pay directly all property taxes,
licenses, charges and assessments properly levied by any properly constituted
governmental authority upon SOFTWARE or to reimburse Licensor therefor if paid
by Licensor at I-TRAX's written direction. Licensor assumes full responsibility
for the payment of all taxes applicable to Licensor's actions, employees,
facilities and materials for performing services hereunder or applicable to
Licensor's income or gross receipts hereunder, or franchise taxes.
2. ENHANCEMENTS. In the event that I-TRAX has received source code,
I-TRAX may modify, correct or enhance the software in any manner, and any such
modifications, enhancements, or corrections and any related materials and
documentation (and all proprietary rights therein, including copyrights) shall
be mutually cross-licensed on equal terms between I-TRAX and Licensor.
3. COMPLIANCE WITH LAWS. Each party will comply with all United States
and foreign laws, ordinances and regulations properly applicable to this
Agreement.
4. AUTHORITY. The parties hereby represent that they have full power
and authority to enter into and perform this Agreement and the parties do not
know of any contract, agreements, promises or undertakings which should prevent
the full execution and performance of this Agreement.
5. SEVERABILITY. In the event that any provisions of this Agreement
shall be found to be void or unenforceable, such findings shall not be construed
to render any other provision of this Agreement either void or unenforceable,
and all other provisions shall remain in full force and effect unless the
provisions which are invalid or unenforceable shall substantially affect the
rights or obligations granted to or undertaken by a party.
6. NOTICES. Notices provided for under this Agreement shall be sent in
writing and shall be addressed to the addresses first above written and may be
served in person or sent overnight/express mail or by Certified Mail, return
receipt requested. A party may change the address for notification by thirty
(30) days prior written notice thereof to the other party.
7. INDEPENDENT CONTRACTOR. As between Licensor and I-TRAX, the
employees, methods and equipment, and facilities used by Licensor shall at all
times be under its exclusive direction and control. Licensor's relationship to
I-TRAX under this Agreement shall be that of an independent contractor, and
nothing in this Agreement shall be construed to
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constitute Licensor, or any of its employees or officers, as an agent, employee,
associate, joint venturer, or partner of I-TRAX.
8. RESERVATION OF RIGHTS. A party's waiver of any of its remedies
afforded hereunder or by law is without prejudice and shall not operate to waive
any other remedies which such party shall have available to it.
9. HEADINGS. The headings of the provisions of this Agreement are
inserted for convenience only and shall not constitute a part hereof.
10. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware without giving affect to
principles of conflict of law.
11. ENTIRETY. This Agreement together with the attachments, Exhibits,
and Schedules specifically referenced and attached hereto embodies the entire
understanding between I-TRAX and Licensor and there are no contracts,
understanding, conditions, or representations, oral or written, with reference
to the subject matter hereof which are not merged herein. Except as otherwise
specifically stated, no modification hereto, shall be of any force or effect
unless (1) reduced to writing and signed by both parties hereto, and (2)
expressly referred to as being a modification of this Agreement. This Agreement
shall be binding upon and inure to the benefit of the successors and permitted
assigns of the parties hereto.
Attest: I-TRAX.COM, INC.
______________________________ By: /s/ Frank A. Martin
-------------------------
Attest: MEMBER-LINK SYSTEMS, INC.
______________________________ By /s/ Hans Kastensmith
-------------------------
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Exhibit 10.8
TECHNICAL SERVICES AGREEMENT
THIS AGREEMENT ("Agreement") is made effective and entered into as of this 3rd
day of September, 1999 by and between I-TRAX.COM, INC., a Delaware Corporation
with its principal place of business at ___________________________ (hereinafter
referred to as "I-TRAX") and MEMBER-LINK SYSTEMS, INC., a Delaware corporation
having its principal place of business at 11 Dupont Circle NW, Suite 325,
Washington DC 20036 (hereinafter referred to as "Licensor").
WHEREAS, I-TRAX and Licensor have entered into a Software and
Proprietary Product Corporate Licensing Agreement ("Licensing Agreement") dated
the __ day of September, 1999; and
WHEREAS, said Licensing Agreement sets forth the terms and conditions
upon which I-TRAX may use the product; and
WHEREAS, the parties hereto recognize that the I-TRAX software will
require technical support by the Licensor in management of the asset.
NOW, THEREFORE, for and as consideration for the parties entering into
the Licensing Agreement, it is hereby agreed that the Licensor shall provide the
following support for the systems and software referred to as "I-TRAX
Immunization" as follows:
TECHNICAL SERVICES:
1. Term. the term of the Technical Services Agreement shall be for five
(5) years terminable by mutual consent at any time prior to the expiration of
three (3) years and terminable by either party after three (3) years upon sixty
(60) days written notice. The Technical Service Agreement shall not be
self-extending.
2. Payment. I-TRAX shall pay Licensor for technical services on a
priced-basis.
3. Duties. Technical services provided shall include but are not
limited to:
a. Implementation of web-enabled applications of I-TRAX including
supervision of web site and Internet service design, construction
and maintenance.
b. Data Migration.
c. Data Mining.
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d. Product Design and Support.
e. Customer Service.
4. Technical Services shall be made available to I-TRAX in electronic
form, accessible via the Internet or otherwise as the parties may agree,
software and documentation, and technical services, if not accepted, shall be
rejected with written indication as to the reasons therefore, otherwise, it will
be deemed accepted.
5. Technical and maintenance support services shall include but not be
limited to; correction of errors, updates and enhancements, telecommunications
solutions support, which includes web-related and communications-related
management services for the purchasing of said services and management of
vendors.
MISCELLANEOUS PROVISIONS
1. TAXES. I-TRAX agrees either to pay directly all property taxes,
licenses, charges and assessments properly levied by any properly constituted
governmental authority upon SOFTWARE or to reimburse Licensor therefor if paid
by Licensor at I-TRAX's written direction. Licensor assumes full responsibility
for the payment of all taxes applicable to Licensor's actions, employees,
facilities and materials for performing services hereunder or applicable to
Licensor's income or gross receipts hereunder, or franchise taxes.
2. ENHANCEMENTS. In the event that I-TRAX has received source code,
I-TRAX may modify, correct or enhance the SOFTWARE in any manner, and any such
modifications, enhancements, or corrections and any related materials and
documentation (and all proprietary rights therein, including copyrights) shall
be mutually crossed licensed on equal terms between I-TRAX and licensor.
3. COMPLIANCE WITH LAWS. Each party will comply with all United States
and foreign laws, ordinances, and regulations properly applicable to this
Agreement.
4. AUTHORITY. The parties hereby represent that they have full power
and authority to enter into and perform this Agreement and the parties do not
know of any contract, agreements, promises or undertakings which would prevent
the full execution and performance of this Agreement.
5. SEVERABILITY. In the event that any provisions of this Agreement
shall be found to be void or unenforceable, such findings shall not be construed
to render any other provision of this Agreement either void or unenforceable,
and all other provisions shall remain in full force and effect unless the
provisions which are invalid or unenforceable shall substantially affect the
rights or obligations granted to or undertaken by a party.
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6. NOTICES. Notices provided for under this Agreement shall be sent in
writing and shall be addressed to the addresses first above written and may be
served in person or by overnight/express delivery or sent by Certified Mail,
return receipt requested. A party may change the address for notification by
thirty (30) days prior written notice thereof to the other party.
7. INDEPENDENT CONTRACTOR. As between Licensor and I-TRAX, the
employees, methods, equipment, and facilities used by Licensor shall at all
times be under its exclusive direction and control. Licensor's relationship to
I-TRAX under this Agreement shall be that of an independent contractor, and
nothing in this Agreement shall be construed to constitute Licensor, or any of
its employees or officers, as an agent, employee, associate, joint venture, or
partner of I-TRAX.
8. RESERVATION OF RIGHTS. A party's waiver of any of its remedies
afforded hereunder or by law is without prejudice and shall not operate to waive
any other remedies which such party shall have available to it.
9. HEADINGS. The headings of the provisions of this Agreement are
inserted for convenience only and shall not constitute a part hereof.
10. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to
principles of conflict of law.
11. ENTIRETY. This Agreement together with the attachments, Exhibits,
and Schedules specifically referenced and attached hereto embodies the entire
understanding between I-TRAX and Licensor and there are no contracts,
understandings, conditions, or representations, oral or written, with reference
to the subject matter hereof which are not merged herein. Except as otherwise
specifically stated, no modification hereto shall be of any force or effect
unless (1) reduced to writing and signed by both parties hereto, and (2)
expressly referred to as being a modification of this Agreement.
This Agreement shall be binding upon and inure to the benefit of the successors
and permitted assigns of the parties hereto.
Attest: I-TRAX.COM, INC.
_______________________________ By: /s/ Frank A. Martin
---------------------
Attest: MEMBER-LINK SYSTEMS, INC.
_______________________________ By: /s/ Hans Kastensmith
---------------------
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Exhibit 10.9
Medicive(R)
Medical Enterprise Data Management System
LICENSE AGREEMENT
THIS SOFTWARE LICENSE AGREEMENT (Agreement) is made as of the date set
forth on the signature page below by and between Member-Link Systems, Inc., a
Delaware corporation with its principal offices at 11 Dupont Circle, N.W., Suite
325, Washington. DC ("Developer") and Mobile Care Foundation, located at 355
Ridge Ave., C413 Evanston, Illinois 60202.
RECITALS
Developer has developed, owns and desires to license to Licensee the software
and database system used in connection with Licensor's medical enterprise data
management system (System), which software is described in Exhibit A hereto
(Software). Licensee desires to obtain from Developer a license to use said
Software pursuant to the terms and conditions of this Agreement. In
consideration of the premises and of the mutual covenants contained herein,
Developer and Licensee (Parties) agree as follows:
1. LICENSE/PAYMENT. In Consideration of payment(s) made in accordance with, and
in the amounts established by, the Statement of Work/Invoice tendered by
Developer, which document is incorporated herein by reference, Developer
grants to Licensee a non-exclusive, non-transferable license to use the
Software and database system pursuant to the terms and conditions of this
Agreement. Licensee is granted no title or ownership rights in or to the
Software, in whole or in part, which rights.as.between the Parties, shall
remain with Developer or its suppliers. The right to use the Software is
restricted by a measure of usage of application based upon the number of
devices or users as set forth on Schedule B. Expansion beyond a specific
usage level will require payment of an additional fee.
2. TRADE SECRETS. Developer considers the Software and database system "trade
secrets" of Developer and/or its suppliers. Such "trade secrets" include,
without limitation thereto, the specific design structure and logic of
individual Software programs, their interactions with other portions of
Software, both internal and external, and the programming techniques
employed therein. In order to maintain the "trade secret" status of the
information contained within the Software, certain portions of said Software
are being delivered to Licensee in object code form only.
3. BENEFICIARIES. Developer or its suppliers holding any intellectual property
rights in the Software and database system and/or any third party owning any
intellectual property right in software from which the Software was derived,
are intended third party beneficiaries of this License. All grants of rights
to use intellectual property intended by this License are explicitly stated
and no additional grants of such rights shall be inferred or created by
implication.
4. AFFIRMATIVE COVENANTS. Subject to the provisions of Section 6 below,
Licensee shall:
4.1. Hold the Software in confidence for the benefit of Developer and/or
Developer's contractors, agents and suppliers;
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4.2. Keep a current record of the location of each copy of Software made by
it;
4.3. Use each copy of the respective Software only on a single CPU at a time
(for this purpose, single CPU shall include systems with redundant
processing units) at Licensee's facilities and only within the U.S.A.;
4.4. Affix to each copy of Software made by it for archival or back-up
purposes, in the same form and location, a reproduction of the
copyright notices, trademarks and all other proprietary legends and/or
logos of Licensor and/or its suppliers, appearing on the original copy
of such Software delivered to Licensee and retain the same without
alteration on all original copies; and
4.5. Destroy the Software and all copies at such time as Licensee chooses to
permanently cease using it and give prompt notice thereof to Licensor.
5. NEGATIVE COVENANTS. Subject to the provisions of Section 6 below, Licensee
shall not:
5.1. Use the Software for any purpose other than as provided by this
License; or
5.2. Allow anyone other than Licensee's employees and agents to have
physical access to the Software and database system; or
5.3. Make copies of, reproduce or duplicate the Software, provided that
Licensee may make one copy of the Software for backup or archival
purposes only; or
5.4. Make any modifications, enhancements, adaptations, or translations to
or of the Software and database system, except for those permitted in
this Agreement or resulting from those Licensee interactions with the
Software associated with normal use and explained in the associated
documentation; or
5.5. Attempt to reverse engineer, disassemble, reverse translate, decompile,
or in any other manner decode the Software, in order to derive the
source code for any other reason; or
5.6. Make full or partial copies of any documentation or other similar
printed or machine-readable matter provided with Software unless the
same has been supplied in a form by Licensor intended for periodic
reproduction for Licensee's employees and agents or for internal use
only; or
5.7. Export or re-export the Software and/or associated documentation from
the fifty states of the United States and the District of Columbia; or
5.8. Sublicense, transfer or convey the Software or any right therein to any
third party; or
5.9. Install the Software on any network, file server, virtual disk,
time-sharing, multiple CPC, other multi-user bulletin board or remotely
accessible arrangement, or any Internet or publicly accessible system,
electronic, bulletin board other than on a secure local area network
within Licensee's organization at or in Licensee's facilities, provided
that Licensee has paid the requisite license fees for each user of the
Software on such network; or
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5.10. Use the Software to perform medical diagnostic functions, set
treatment procedures or substitute for the medical judgement of a
physician or qualified healthcare provider; or
5.11. Publish, translate or transfer possession of the Software or a copy or
portion thereof to any third party.
6. RESTRICTED RIGHTS. If at any time the user of the Software is employed by or
affiliated with a federal government department, agency or other government
entity, the following restricted rights legend regarding limited government
rights in the use of the data and software herewith, must be applied to the
Software before licensing the Software in human-readable form that can be
readily and visually perceived, and to the accompanying documentation before
distribution of the Software to any end-user:
The Software and documentation is provided with RESTRICTED RIGHTS. The
Use, Duplication, or Disclosure by the Government is subject to
restrictions as set forth in subdivision (c)(1)(ii) of the Rights in
Technical Data and Computer Software clause at DFAR 252.227-7013 or
restricted rights clauses at 48 CFR 52.227-19 or 52.227-14, as
applicable. Contractor/Manufacturer is Member-Link Systems, Inc., 1615
L Street, N.W., Suite 1150, Washington, D.C. 20036.
7. LIMITED WARRANTY.
7.1. Subject to the provisions set forth in this Section 8, Developer
warrants that for a period of ninety (90) days (Warranty Period)
subsequent to the acceptance of the Software by Licensee, the Software
shall conform with and perform the functions set forth in Developer's
specifications therefor and shall be free from defects in material and
workmanship. If, during the Warranty Period, Developer is notified
that the Software is defective or fails to so perform, within a
reasonable period of time, Developer shall use reasonable efforts to
correct such defects or failure and ensure that the Software conforms
with and performs the functions set forth in said specifications.
Developer's obligation under this warranty is limited to using
reasonable efforts to correct any Software failures and Developer's
performance thereof or the return of the license fees paid for such is
breached. Notwithstanding the foregoing, Developer gives no warranty
with respect to data or components supplied by third Software shall be
Licensee's sole remedy in the event this warranty parties.
7.2. Developer's limited warranty under this Article 8 shall not apply to:
7.2.1. Damage or defects caused by Licensee's negligence,
including, but not limited to:
7.2.1.i. Use of Software and database system Licensee other
than in accordance with written instructions
furnished by Developer;
7.2.1.ii. Modification by Licensee of Software without
Developer's Consent;
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7.2.1.iii. Use of the Software on a non-dedicated platform
(i.e. a computer running other programs in addition
to the Software) except as otherwise set forth in
Exhibit B hereto; or
7.2.1.iv. Use of the Software on a computer which is not
equipped with 28.8 KBP/S fax/modem with access to
dial-in phone service; or
7.2.1.v. Any part of the Software or data system provided by
third parties, including but not limited to
Licensee's current operating systems and equipment.
7.2.2. Any Software damaged by accident or disaster, including,
without limitation, fire, flood, wind, water, extreme
temperature, lightning or power failure.
7.3. Licensee shall reimburse Developer for Developer's out-of-pocket and
labor charges and expenses incurred at Licensee's request in
responding to and/or remedying Software deficiencies not covered by
the aforesaid limited warranty or by a Software Maintenance Agreement
between Developer and Licensee.
7.4. THE LIMITED WARRANTIES IN THIS ARTICLE 8 CONSTITUTE THE ONLY
WARRANTIES OF DEVELOPER WITH RESPECT TO THE SOFTWARE, AND ARE IN LIEU
OF ALL OTHER WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTIES ARE
MADE BY DEVELOPER ON BEHALF OF ANY OTHER PARTY WHICH MAY HAVE
INDEPENDENTLY SUPPLIED ANY PART OF THE SYSTEM TO DEVELOPER.
7.5. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT,
IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, TORT
(INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE, OR INFRINGEMENT), STRICT
LIABILITY, PRODUCT LIABILITY OR OTHERWISE, SHALL DEVELOPER OR ANY
THIRD PARTY SUPPLIER OF ANY PART OF THE SOFTWARE, OR LICENSEE BE
LIABLE UNDER THIS AGREEMENT FOR ANY CONSEQUENTIAL, SPECIAL OR
INCIDENTAL DAMAGES OF ANY NATURE WHATSOEVER, INCLUDING LOST PROFITS OF
THE OTHER PARTY, WHETHER OR NOT SUCH DAMAGES ARE FORESEEABLE OR
WHETHER A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
IN NO EVENT SHALL DEVELOPER'S LIABILITY HEREUNDER, REGARDLESS OF THE
BASIS OF THE CLAIM AS AFORESAID, EXCEED THE AMOUNT OF LICENSE FEES
PAID BY LICENSEE TO DEVELOPER HEREUNDER.
8. INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT.
8.1. Developer agrees that it will defend, at its own expense, all suits
and claims against Licensee for infringement or violation of any
patent, trademark, copyright, trade secret, or other intellectual
property rights of any third party (collectively, "Intellectual
Property
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Rights"), covering , or alleged to cover, the Software in the form
furnished or as subsequently modified by Developer, and Developer
agrees that it will pay all sums, including, without limitation,
attorneys' fees and other costs, which, by final judgement or decree,
or in settlement of any suit or claim, may be assessed against
Licensee on account of such infringement or violation, provided
8.1.1. Developer shall be given Notice of all claims of any such
infringement or violation and of any suits or claims brought or
threatened against Licensee or Developer of which Licensee has
express knowledge, and Developer shall be given full authority
to assume control of the defense thereof through its own
counsel at its expense and to compromise or settle any suits or
claims so far as this may be done without prejudice to the
right of Licensee to continue the use, as contemplated, of the
Software so furnished; and
8.1.2. Licensee shall cooperate fully with Developer in the defense of
such suit or claims and provide Developer such assistance as
Developer may reasonably require in connection therewith.
Notwithstanding the foregoing, Licensee shall have the right,
at its expense, to participate in such defense or settlement
negotiations.
8.2. If in any such suit so defended, all or any part of the Software is
held to constitute an infringement or violation of any third party's
Intellectual Property Rights and its use is enjoined, or if in respect
of any claim of infringement or violation Developer deems it advisable
to do so, Developer shall act at its sole option take one or more of
the following actions at no additional cost to Licensee:
8.2.1. procure the right to continue the use of the Software without
interruption for Licensee; or
8.2.2. replace the Software with non-infringing Software that meets
Licensor's specifications; or
8.2.3. modify said Software so as to be non-infringing, provided that
the Software as modified meets all of said specifications; or
8.2.4. take back the infringing Software and credit Licensee with an
amount equal to its price less an allowance for use.
8.3 Developer's obligations under this Section 9 shall not apply to any
infringement or violation of Intellectual Property Rights caused by
modification of the Software other than in an manner permitted in this
Agreement or in Developer's specifications or any infringement cause
solely by Developer's usage of equipment other than in accordance with
the specifications, e:kcept with the prior written consent of
Developer. Licensee shall indemnify Developer against all liability
and costs, including reasonable attorney's fees, for defense and
settlement of any and all claims against Developer for infringements
or violations based upon the foregoing.
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9. SOFTWARE MAINTENANCE.
9.1. During the Warranty Period, Developer agrees to provide to Licensee
any new, corrected or enhanced version of the Software then available
to Developer.
9.2. Subsequent to the Warranty Period, Developer shall make Software
maintenance support available to Licensee pursuant to a separate
Software Maintenance Agreement. The costs for maintenance services and
support will be those established by Developer from time to time.
9.3. Licensee agrees that Licensor shall retain all rights, interest and
title in any and all modifications and customizations to Developer's
software, database system and applicable interfaces developed in the
course of its work, installation, maintenance and service for
Licensee, whether with or without the participation of Licensee. Such
modifications and customizations shall be treated as subject to the
terms of this License, absent written agreement to the contrary
between the parties.
10. ASSIGNMENT. Neither this License nor any rights acquired by Licensee through
this License are assignable. Any attempted assignment of rights and/or
transfer of Software shall be void and conclusively presumed a material
breach of this License.
11. TERMINATION. In the event that Licensee is in default under any material
term or condition of this Agreement and has not corrected such default
within thirty (30) days subsequent to the receipt from Developer of a Notice
describing the default, then Developer may terminate this Agreement upon
Notice to Licensee.
12. GENERAL PROVISIONS.
12.1. This Agreement shall be governed by and construed in accordance with
the laws of the District of Columbia.
12.2. This Agreement represents the entire agreement between the parties
respecting this subject matter and supersedes all prior discussions,
agreements and understandings between them.
12.3. This Agreement may only be amended in a writing signed by both
Parties.
12.4. Notices shall be sent to the respective Parties at the addresses set
forth below their respective signatures. If either Party changes its
address while this Agreement is in force, it shall so advise the other
Party in a Notice and any Notice thereafter required to be given shall
be sent to such new address. For purposes of this Agreement, "Notice"
means a writing containing the information required by this Agreement
to be communicated to any Person, sent by registered or certified
mail, postage prepaid, or given by personal delivery, or sent by
confirmed air or surface courier or confirmed telefax to such Person
at the last known address or last known telefax number of such Person,
as the case may be, the third business day after date of registry
thereof or the date of the certification of the receipt therefor as
evidenced by postal or courier records or the date of personal
delivery (or refusal thereof during normal business hours) or the date
of
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telefax answer-back confirmation being deemed the date of receipt of
Notice; provided, however, that any communication sent to such Person
and actually received by such Person shall constitute Notice for all
purposes of this Agreement.
12.5. If any provision or any part of any provision of this Agreement shall
be invalid or unenforceable, such invalidity or unenforceability shall
not invalidate or render unenforceable any other portion of this
Agreement.
12.6. The failure of either Party to insist, in any one or more instances,
upon the performance of any of the terms, covenants or conditions of
this Agreement, or to exercise any right hereunder, shall not be
construed as a waiver or relinquishment of the future performance of
any such terms, covenants or conditions or the future exercise of such
right.
12.7. This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original and all of which taken together shall
constitute one and the same instrument.
12.8. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of
this Agreement or be construed as a limitation on the scope of the
section to which the heading refers.
(Signatures on following page)
IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement as of
this date.
MEMBER-LINK SYSTEMS, INC.
(Developer)
/s/ Hans Kastensmith Date: October 1, 1999
----------------------------------
By: Hans Kastensmith
Title: President
Address: 11 Dupont Circle, NW, Suite 325
Washington, D.C. 20036
MOBILE CARE FOUNDATION
(Licensee)
/s/ Laura J. Baker
----------------------------------
By: Laura J. Baker Date: November 9, 1999
Title: Director
Address: 355 Ridge Avenue, C413
Evanston, IL 60202
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Exhibit 10.10
Asthma Watch(TM)
Software License Agreement
This License Agreement ("Agreement") between Member-Link Systems Inc., a
Delaware Corporation ("Developer") with its principal offices at 11 Dupont
Circle, N.W., Suite 325, Washington, D.C., and Mobile Care Foundation
("Licensee"), located at 355 Ridge Ave., C413, Evanston, IL 60202.
The Developer has developed and licenses to users its electronic medical records
management system marketed under the name Medicive(R) (the "System"), which
consists of independent networked software packages, namely AsthmaWatch(TM) and
Medicive(R) Server.
The Licensee desires to utilize a copy of the AsthmaWatch(TM) software
("Software").
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
Developer and licensee agree as follows:
1. License. Developer hereby grants to Licensee a perpetual, non-exclusive,
limited license to use the Software in its mobile care facilities as set
forth in this Agreement. These licenses are specified in Schedule B, annexed
hereto and incorporated by reference herein.
2. The Software. The Software shall consist of the modules or components, shall
perform the functions and shall comply with the proposals and
specifications, identified herein or set forth on Schedule A, annexed
hereto. Each Software module or component, specification and proposal
included or referred to herein or in Schedule A is expressly incorporated by
reference herein.
3. Restriction. Licensees shall not modify, copy, duplicate, reproduce, license
or sublicense the Software, or transfer or convey the Software or any right
in the Software to anyone else without the prior written consent of
Developer; provided that Licensee may make one copy of the Software for
backup or archival purposes. Licensee shall not install the Software on any
network, file server, virtual disk, time sharing, multiple CPU, other
multi-user, bulletin board, or remotely accessible arrangement other than on
a local area network within Licensee's organization, provided Licensee has
paid the license fee for each user of the Software on such network.
The SOFTWARE and documentation are provided with RESTRICTED RIGHTS. The Use,
Duplication, or Disclosure by the Government is subject to restrictions as
set forth in subdivision (c)(1)(ii) of the Rights in Technical Data and
Computer Software clause at DFAR 252.227-7013 or restricted rights clauses
at 48 CFR 52.227-19 or 52.227-14, as applicable. Contractor/Manufacturer is
Member-Link Systems Inc., I I Dupont Circle, Suite 325, Washington, D.C.
20036.
<PAGE>
4. Warranty of Title. Developer hereby represents and warrants to Licensee that
Developer is the owner of the Software or otherwise has the right to grant
to Licensee the rights set forth in this Agreement. In the event of any
breach of the foregoing representation and warranty, Licensee's sole remedy
shall be to require Developer or to either: i) procure, at Developer's
expense, the right to use the Software, ii) replace the Software or any part
thereof that is in breach and replace it with Software of comparable
functionality that does not cause any breach, or iii) refund to Licensee the
full amount of the license fee upon the return of the Software and all
copies thereof to Developer.
5. Payment. Payments under this Agreement shall be tendered by Licensee in
accordance with the Statement of Work tendered to Licensee by Developer and
in the amounts set forth therein, which document is incorporated herein by
reference.
6. Ownership. Developer shall retain title to the Software and to all the
documentation, data and information relating to the Software given by or
disclosed to Licensee. Developer shall own and possess all rights, title and
interest in the Software. Developer expressly has the right to reproduce,
publish, sell, license, and distribute the Software to anyone in accordance
with the terms of this Agreement.
7. Copyright. The Software is owned by the Developer and its suppliers and
contains confidential and proprietary information. The Software is
copyrighted and protected by United States copyright laws and International
treaty provisions. You are allowed to make one backup copy of the software
provided that this copyright and proprietary notice is included.
8. AMA License and CPT & ICD 9 Updates. Where applicable, the Software includes
versions of CPT and ICD 9 codes copyrighted by the American Medical
Association. The AMA license requires an annual fee of $32 and after the
first year will be the responsibility of the end user. In return, the AMA
will provide updates as they become available.
9. Optional Customization. Developer shall use its best efforts, consistent
with Developer's staffing, scheduling and business constraints, to provide
additional services and customization of the Software in accordance with
Licensee's requests from time to time. Such services as to customization
shall be contracted for separately at Developer's customary time and
materials charges then in effect. If Developer determines, in its sole
discretion, that any customization requested by Licensee are of sufficient
general value to the Software's general use to include in the Software or in
future updates of the Software, Developer shall perform such customization
at no charge to Licensee.
10. Warranty Disclaimer. DEVELOPER'S WARRANTIES SET FORTH IN THIS AGREEMENT ARE
EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
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11. Limitation of Liability. Developer shall not be responsible for, and shall
not pay, any amount of incidental, consequential or other indirect damages,
whether based on lost revenue or otherwise, regardless of whether Developer
was advised of the possibility of such losses in advance. In no event shall
Developer's liability hereunder exceed the amount of license fees paid by
Licensee, regardless of whether Licensee's claim is based on contract, tort,
strict liability, product liability or otherwise.
12. Notice. Any notice required by this Agreement or given in connection with
it, shall be in writing and shall be given to the appropriate party by
personal delivery or by certified mail, postage prepaid, or recognized
overnight delivery services.
If to Developer:
Member-Link Systems, Inc.
11 Dupont Circle, NW, Suite 325
Washington, DC 20036
If to Licensee:
13. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the District of Columbia.
14. No Assignment. Neither this Agreement nor any interest in this Agreement may
be assigned by Licensee without the prior express written approval of
Developer.
15. Final Agreement. This Agreement terminates and supersedes all prior
understandings or agreements on the subject matter hereof. This Agreement
may be modified only by a further writing that is duly executed by both
parties.
16. Severability. If any term of this Agreement is held by a court of competent
jurisdiction to be invalid or unenforceable, then this Agreement, including
all of the remaining terms, will remain in full force and effect as if such
invalid or unenforceable term had never been included.
17. Headings. Headings used in this Agreement are provided for convenience only
and shall not be used to construe meaning or intent.
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IN WITNESS WHEREOF, Developer and Licensee have executed this Software License
Agreement on the day and year first above written.
Member-Link Systems, Inc. Mobile Care Foundation
By: /s/ Hans C. Kastensmith By: /s/ Laura Baker
-------------------------- --------------------
Hans Kastensmith
President
Date: 10/1/99 Date: 11/9/99
-------------------------- --------------------
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Medicive(R) Asthma Watch(TM)
Licensing Documentation
SCHEDULE A
Medicive(R) AsthmaWatch(TM)
Medicive(R) AsthmaWatch(TM) is the Electronic Charting Graphic User interface
software module to the Medicive(R) Medical Enterprise Database. Designed to
operate on a multiuser client server platform all Code, Containers, Methods
developed and/or integrated by Member-Link Systems and designated third parties
as needed.
The Medicive(R) AsthmaWatch(TM) system consists of a container(s), software
code, widgets, software platforms, software coding tool sets, work process
models, all of which are developed and owned by Member-Link Systems
Software Platform:
Visual C++
Windows NT 4.0
Windows 95 or greater
Hardware Platform
IBM PC
Functions:
o Collect and Enter Medical Information to the Medical Enterprise Database
o Display Medical Information from the Medical Enterprise Database
o Management of Patient Information
o Management of Asthma and Asthma-Related Diseases
o Management of Outcomes Measures
o Management of reports
o Archival and view of Medical Images
o Display of third party data
Medicive Medical Enterprise Database
The Medicive(R) Medical Enterprise Database ("MED") is a relational,
ODBC-compliant database for the housing of all types of information concerning a
Medical Enterprise. It consists of more than 2000 Data Entities, over 1 Million
data elements and for the purposes of this installation resides on Microsoft SQL
Server v7.0.
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The MED is the core component of the Medicive(R) System from which
AsthmaWatch(TM) deposits and receives data. All portions of the MED were
developed and are owned by Member-Link Systems Inc.
MEDICIVE(R) MEDICAL ENTERPRISE DATABASE
SOFTWARE LICENSE AGREEMENT
Single User Access License
This software license agreement is a legal agreement licensing a single
PC and its user running a Licensed copy of the Asthma Watch(TM) Electronic Chart
Software, a nontransferable, nonexclusive license to access The Medicive(R)
Medical Enterprise Database as one of __ concurrent users. Mobile CARE
Foundation Center has agreed to be bound by the terms and conditions of this
agreement. The signature of the administrating party, below, signifies and
authorizes acceptance.
Use. This license agreement allows you to install and use one copy of
the software on a single computer. Installation on a network server for the
purpose of internal distribution shall not be allowed, unless a separate license
is acquired for each computer to which the software is distributed.
Copyright. The software is owned by Member-Link Systems, Inc. and its
suppliers and contains confidential and proprietary information. The software is
protected by United States copyright laws and international treaty provisions.
Your System Administrator is authorized to create one (1) backup copy of the
software provided that this copyright and proprietary notice is included.
Term. The license is perpetual and is in effect until terminated.
Termination will occur with the failure to comply with any of the provisions
contained in this agreement.
Authorized By
/s/ Hans C. Kastensmith
- ----------------------------------
Hans C. Kastensmith
President
For: Member-Link Systems, Inc.
Accepted By:
/s/ Laura Baker
- ----------------------------------
For: Mobile Care Foundation
<PAGE>
Exhibit 10.11
AGREEMENT
This Agreement for the Installation of Software and Provision of
Services ("Agreement") is made as of the date indicated below by and between
Member-Link Systems, Inc., a Delaware corporation ("MLS") with its principal
offices at Reston Plaza 350, 12020 Sunrise Valley Drive, Reston, VA 20191, and
Phoenix Children's Hospital ("PCH") located at 909 E. Brill Street, Phoenix, AZ
85006.
PCH desires to purchase from MLS, and obtain MLS' services in
installing in the configuration set forth on the attached spreadsheet Exhibit A
(incorporated herein by reference) MLS' AsthmaWatch(R) disease management and
monitoring software and data interfaces using MLS' Medicive(R) database system
and software (collectively, "Software") and specified hardware. For its part,
MLS desires to license the Software to PCH, and provide the specified hardware
and installation services. MLS and PCH therefore AGREE as follows:
A. Incorporation of License Agreements. The Software is being licensed by MLS to
PCH in accordance with the terms of the License Agreements ("Licenses")
separately executed between the parties. The parties hereby agree that those
Licenses, incorporated herein by reference, are part, and shall constitute
essential terms of, this Agreement. As specified therein, nothing in this or any
other Agreement between the parties shall be construed as creating any ownership
interest in the Software in any party other than MLS.
B. Tasks and Scope of Performance; Limitations. In order to ensure the proper,
orderly and efficient installation of its product, MLS will perform the
installation of the Software and related tasks in seven phases as set out in its
Proposal to PCH. They are:
1. Final Assessment and Business Process Evaluation
2. System Upgrades
3. Hardware & Networking
4. Systems Installation
5. Integration
6. Training
7. Support Services
(i) It is understood and agreed that MLS' ability properly to perform the
above tasks, particularly (but not limited to) 3 and 5, is necessarily dependent
upon the active and timely cooperation of PCH and its agents, and their
accomplishment of predicate tasks. MLS will neither be liable for, nor subject
to any actual or consequential damages alleged to result from, delays in
implementation caused by the mis- or non-performance of any party under the
control of PCH.
(ii) It is specifically understood and agreed that, absent written
modification of this Agreement to the contrary, network integration and support
will be supplied by PCH's Information
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Systems Department, including all connectivity issues, LAN drops, domain, IP
addresses, operating and network platforms and licensing. MLS will supply
additional assistance for any of these services, but such assistance is beyond
the scope of this provision and will be billed at an additional contracted
hourly rate.
(iii) MLS personnel will remain available to project site personnel for a
period of two weeks to address residual issues. MLS will also provide support
through dial-in connections to the system, at a contract rate to be specified.
Additional services may be obtained from MLS at a contracted hourly rate.
C. Disclaimer of Warranty. The Software and all services are subject to the
Limitations on Warranty contained in Section 7 of the Medicive(R), and Sections
10 and 11 of the AsthmaWatch(R), License Agreements.
D. Consideration; Payment. PCH agrees that, in consideration of the goods,
services and licenses provided by MLS under this Agreement, it shall pay MLS
$68,560.00. This price is not inclusive of additional contract services provided
by MLS at PCH's discretion. It is further agreed that one-half (1/2) of that
sum, or $34,280.00, is due upon execution of this Agreement, with the remainder
to be tendered upon completion of the installation.
E. No Agency Relationship. Nothing in this or any of the component Agreements
shall be interpreted as creating any relationship other than that of vendor or
independent contractor.
F. Disputes. Any disputes arising under this Agreement that the parties are
unable to resolve between them may be submitted to nonbinding arbitration
without jeopardizing their respective remedies in law or equity.
G. Jurisdiction; Assignment; Integration; Severability. This Agreement shall be
construed and enforced in accordance with the laws of the State of Virginia.
Neither this Agreement nor any interest in this Agreement may be assigned by
either party without the express written consent of the other. This Agreement,
and the agreements and Licenses incorporated herein, supersedes all prior
documents or understandings on this subject matter, and may be modified only by
a writing executed by both parties. If any term of this Agreement is held
invalid or unenforceable, this Agreement and all remaining terms will remain in
full force and effect as if such invalid or unenforceable term had never been
included. Failure to enforce any particular provision of this Agreement at any
time shall not constitute a waiver of that or any other term or provision of
this Agreement, or future enforcement thereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
written below.
Member-Link Systems, Inc. Phoenix Children's Hospital
By: /s/ Hans C. Kastensmith By: /s/ Burl E. Stamp
----------------------------- ----------------------
Hans C. Kastensmith, Burl E. Stamp
President President and CEO
Date: 12/1/99 Date: 11/29/99
----------------------------- ----------------------
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Exhibit 10.12
I-TRAX.COM, INC.
Health Information Solutions
12020 Sunrise Valley Drive, Suite 350
Reston, VA 20191
(703) 860-0600
Kenneth Jennings, Ph.D.
VIA ELECTRONIC MAIL
Dear Ken:
This letter agreement ("Agreement") will serve to memorialize our understanding
regarding your role on behalf of I-Trax.com, Inc. ("Company").
We have agreed to retain you as a consultant to the Company for an initial term
of six (6) months for the purpose of assisting the Company to achieve its
development, marketing and financing objectives in that period. You in turn have
agreed to devote appropriate time and dedicate your best efforts to this end,
specifically including but not limited to the following areas:
o initiation and successful development of a strategic
relationship with a large-scale and satisfactorily credible
systems integrator;
o development of relationships with health care-oriented web
portals;
o assistance in executive recruitment;
o prospective investor, and investment development, relations.
In consideration of your commitment and services during the term of this
Agreement, the Company agrees to pay you $10,000 each month for the six-month
term, commencing January 1, 2000. As additional compensation and in further
consideration of your commitment to the Company's success, the Company agrees to
grant to you and immediately escrow on your behalf 250,000 shares of the
Company's common stock, to be held by the Company in its Incentive Stock Option
Plan fund until redeemed by you, and in which you will be fully vested at the
satisfactory conclusion of the initial six month term. Should this Agreement be
terminated for any reason prior to the expiration of that term, rights to these
shares shall be prorated and vest accordingly. Note that any shares you elect to
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redeem are presently unregistered, and are subject to certain restrictions on
transfer, sale or other disposition to unqualified investors prior to such
registration of this class of securities.
Please note that this Agreement may be terminated, renewed, or modified by
mutual written consent of the parties, or terminated by either party upon
thirt7y (30) days written notice. The Agreement is one at will with you as an
independent contractor, and creates no obligations of the Company beyond those
expressly stated herein, nor any employment relationship under the laws of the
State of Virginia. The Company shall not be liable for any administrative,
payroll, withholding, social security, taxes, benefits or workman's compensation
in connection with any services you provide.
It is understood that you will devote nest efforts during the term of this
Agreement, and any subsequent agreements, to your work for the Company, and will
avoid engaging in any endeavor that conflicts with its interests. In addition,
you shall be bound to keep confidential all proprietary business information of
the Company and its customers and partners, and prospective customers and
partners, made available to or discovered by you in the course of your work for
the Company, including but not limited to financial information, trade secrets,
technology, sales plans and customer data. Any unauthorized disclosure of such
proprietary information to any party shall be regarded as a breach of this
Agreement and may render you liable for any damages therefrom and subject to any
legal remedies available to the Company.
Finally, nothing in this Agreement shall be construed to create in you any
rights or claim upon any assets, licenses, trademarks, products, intellectual or
other property of the Company beyond the contingent equity interest described
above.
If the foregoing accurately reflects your understanding of our agreement, please
indicate by signing below and returning one original counterpart copy to the
Company, keeping one for your own records. Should you have any questions
regarding this Agreement or its terms, please do not hesitate to contact the
undersigned at the telephone number above, or to contact Jim Wholey (Company
general counsel) at the same number, extension 111.
Sincerely,
Frank A. Martin, Chairman
Hans C. Kastensmith, President
For MLS/1-Trax.com, Inc.
UNDERSTOOD AND AGREED: /s/ Kenneth Jennings, Ph.D. DATE: __________
-------------------------------
Kenneth Jennings, Ph.D.
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Exhibit 10.13
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (Agreement) entered into as of the 29th day of
November, 1999 by and between I-Trax.com, Inc., a corporation organized and
existing under the laws of the State of Delaware (Company), and Michael
O'Connell, M.D., an individual residing in the State of Colorado (Employee).
Recitals
The Company wishes to employ the Employee, and the Employee wishes to
be employed by the Company, on the terms and conditions set forth herein.
The parties therefore agree as follows:
1. Services.
1.1 Duties. The Company hereby employs the Employee as its Chief
Medical Officer. Subject to the direction and authorization of the Company's
board of directors, the Employee shall perform such functions and undertake all
responsibilities associated with such position.
1.2 Extent of Services. The Employee shall devote his full time and
best efforts to the business and affairs of the Company and to the promotion of
its interests.
1.3 No Conflict. The Employee represents that his or her employment
hereunder and compliance with the terms and conditions of this Agreement will
not conflict with or result in the breach of any agreement to which he or she is
a party or may be bound.
2. Term.
The term of this Agreement shall commence on the date hereof and end on
29 November, 2002, unless sooner terminated as provide in this Agreement.
3. Compensation.
3.1 Base Compensation; Bonus. As compensation for the services to be
rendered by the Employee hereunder, the Company shall pay the Employee a salary
at the rate of $85,000 per calendar year in accordance with the Company's
payroll practices. The Company will review the Employee's compensation from time
to time during the term of this Agreement and, at the discretion of the
president of the Company, in consultation with its board of directors, may
increase [or decrease] the Employee's base compensation based upon his or her
performance, the financial condition of the Company, and other relevant factors.
In addition, the Company may pay to the
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Employee such cash bonus(es), if any, as may be determined by the board of
directors of the Company from time to time.
3.2 Other Compensation. It is agreed that, in addition to the
compensation set forth above, as consideration for future contributions to the
Company Employee shall be the immediate recipient and beneficial owner of 100,
000 shares of the common stock of the Company, on the same basis and at the same
valuation as certain other founding management officers who received stock for
similar consideration in September and October of 1999. Further, it is agreed
that the Company shall reserve an additional 100, 000 shares of the Company's
common stock for Employee in its Incentive Stock Ownership Plan ("ISOP"), in
which shares Employee shall become vested, in increments to be determined, such
that at the conclusion of three years from execution of this Agreement Employee
may be fully vested in such shares. Such shares shall be in addition to shares
obtained by Employee through performance bonus or other process established in
connection with the ISOP.
3.3 Bonus on Sales. In addition to the foregoing, it is agreed that
Employee shall be entitled to a sales bonus for sales of the Company's
enterprise application systems for which Employee is determined to be primarily
responsible. Such bonus shall be equivalent to a commission of six percent (6%)
on the revenue realized from such sales net of sales costs and expenses, gross
receipts taxes, and capital cost recovery. Employee shall notify the Company, in
writing or by confirmed e-mail, in advance of closing, of prospective sales for
which Employee expects to claim responsibility for purposes of such bonus.
Employee's compensation under this section shall be due as and when the net
revenues on which it shall be based are realized by the Company. Employee may be
paid such bonuses in cash or in the form of appropriately valued options in the
common stock of the Company, or both, from time to time as Employee and the
Company shall agree. Absent agreement, such bonuses shall be in cash.
4. Expenses.
The Employee is authorized to incur reasonable expenses for promoting
the business of the Company, including expenses for meals, travel,
entertainment, and similar items. The Company shall reimburse the Employee for
reasonable out-of-pocket expenses incurred by the Employee in performing
services pursuant to this Agreement promptly after receipt of a written
statement from the Employee which itemizes such expenses in reasonable detail,
together with a receipt for any individual expense in excess of $50. In no event
shall the Employee incur any individual expense in excess of $500, or any group
of related expenses in excess of $5,000, without the prior approval of the
president or chief financial officer of the Company. Use by the Employee of his
or her personal vehicle for the business of the Company shall be reimbursed at
the maximum rate per mile allowed by the Internal Revenue Service from time to
time.
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5. Benefits.
5.1 Benefit Plans. The Employee shall be entitled to participate in,
and receive benefits from, any insurance, medical, disability, or other employee
benefit plan of the Company, if any, which may be in effect at any time during
the term of this Agreement and which shall be generally available to the
Employee on terms no less favorable than to other management employees of the
Company.
5.2 Vacation. The Employee shall be entitled during each calendar year
during the term of this Agreement to a vacation of three weeks, with pay, at
times reasonably agreeable to both the Company and the Employee. Unused vacation
time, if any, shall not cumulate from year to year.
6. Employee's Nondisclosure.
(a) The Employee expressly agrees that, without the prior approval of
the board of directors of the Company, he or she shall not, at any time during
the term of this Agreement or after its termination, on his or her own behalf or
as a partner, officer, director, trustee, employee, agent, or member of any
person, firm, corporation, or other entity, use or disclose to any person, firm,
corporation, or other entity, or otherwise employ his or her knowledge of the
products and business of, or any trade secrets or other confidential information
as to the operations, products, or customers of, the Company, unless (i)
necessary to the performance of this Agreement and in furtherance of the
Company's best interest or (ii) already in the public domain or generally known
in the industry.
(b) All documents, records, or similar items, whether in writing or in
electronic or digitized form, relating to the business of the Company shall
remain the exclusive property of the Company and shall not be removed from the
premises of the Company without its prior written approval.
(c) The provisions of this Section 6 shall survive the termination of
this Agreement.
7. Inventions.
(a) If at any time or times during the term of this Agreement,
(i) the Employee shall (either alone or with others) make,
conceive, discover, reduce to practice or become possessed of any
invention, modification, discovery, design, development, improvement,
process, formula, data, technique, know-how, secret, or intellectual
property right whatsoever or any interest therein (whether or not
patentable or registrable under copyright or similar statutes or
subject to analogous protection) that relates directly to medical
information systems, software or databases, or results from tasks
assigned to the Employee by the Company (herein called "Inventions"),
and
(ii) (A) in connection therewith, the Employee used equipment,
supplies, facilities or trade secret information of the Company, or (B)
in connection therewith, used hours for
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which he was to be or was compensated by the Company hereunder, or (C)
which relate at the time of conception or reduction to practice thereof
the business of the Company or to its actual or demonstrably
anticipated research and development, or (D) which result from any work
performed by him for the Company,
such Inventions and the benefits thereof shall immediately become the sole and
absolute property of the Company and its assigns, and the Employee shall
promptly disclose assign to the Company (or any persons designated by it) each
such Invention and benefits or rights resulting therefrom to the Company and its
assigns without compensation and shall communicate, without cost or delay, and
without publishing the same, all available information relating thereto (with
all necessary plans, models, software code or interface designs) to the Company.
(b) The Employee will also promptly disclose to the Company, and the
Company hereby agrees to receive all such disclosures in confidence, any other
invention, modification, discovery, design, development, improvement, process,
formula, data, technique, know-how, secret or intellectual property right
whatsoever or any interest therein directly in and limited to the fields of
medical information systems, software or databases (whether or not patentable or
registrable under copyright or similar statutes or subject to analogous
protection) made, conceived, discovered, reduced to practice or possessed by the
Employee (either alone or with others) at any time or times during the term of
this Agreement for the purpose of determining whether they constitute
"Inventions" as defined herein.
(c) Upon disclosure of each Invention to the Company, during the term
of this Agreement and at any time thereafter, the Employee will, at the request
and cost of the Company, sign, execute, make and do all such deeds, documents,
acts and things as the Company and its duly authorized agents may reasonably
require:
(i) to apply for, obtain and vest in the name of the Company alone
(unless the Company otherwise directs) patents, copyrights or other
similar protection in any country throughout the world and when so
obtained or vested to renew and restore the same; and
(ii) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or
applications for revocation of such letters patent, copyright or other
analogous protection.
In the event the Company is unable, after reasonable effort, to secure
the Employee's signature on any patents, copyright, or other protection relating
to an Invention, whether because of the Employee's physical or mental incapacity
or for any other reason whatsoever, the Employee hereby irrevocably designates
and appoints the Company and its duly authorized officers and agents as the
Employee's agent and attorney-in-fact, to act for and in the Employee's behalf
and stead to execute and file any such application or applications and to do all
other lawfully permitted acts to further the prosecution and issuance of
patents, copyright or other protection thereon with the same legal force and
effect as if executed by the Employee.
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(d) The Employee will keep and maintain adequate and current records of
all such Inventions and all items that fall within the scope of paragraph (b)
above, in the form of memoranda, notes, sketches, drawings, reports, computer
code, or computer software relating thereto, which records shall be and remain
the property of and available to the Company at all times. Upon termination of
this Agreement, all records of Inventions and such other items in the form of
memoranda, notes, sketches, drawings, reports, computer programs, computer
software, technology and applications thereof, or the like, including all copies
thereof, then in the Employee's possession, whether prepared by the Employee or
others, will be left with the Company.
(e) The Employee represents that the inventions identified in the
pages, if any, attached hereto comprise all the unpatented inventions or
developments which the Employee has made or conceived prior to the date of this
Agreement, which inventions are excluded from this Agreement. The Employee
understands that it is necessary to list only the title of such invention
itself. IF THERE ARE NO SUCH UNPATENTED INVENTIONS TO BE EXCLUDED, THE EMPLOYEE
SHOULD INITIAL HERE.
8. Covenant Not to Compete.
During the term of this Agreement and for a period of 24 months
following its termination (unless this Agreement is terminated by the Employee
pursuant to Section 10.5), the Employee shall not, without the prior written
approval of the Company, directly or indirectly
(a) carry on or participate in as owner, employee, agent, or otherwise
any business in competition with that conducted or engaged in by the Company;
(b) solicit, for the Employee's own account or for the account of
others, orders for products or services of a kind similar to those provided by
the Company during the term of this Agreement from any party which was a client
or customer of the Company or which the Company was actively soliciting to be a
customer or client during the 120-day period preceding the date of termination
of this Agreement; or
(c) urge any customer or client or potential customer or client of the
Company to discontinue business, in whole or in part, or not to do business,
with the Company.
9. Remedies.
9.1 Injunctive Relief. A violation by the Employee of the provisions of
Sections 6, 7, or 8 could cause irreparable injury to the Company, for which
there may be no adequate remedy at law. In the event of a breach or threatened
breach by the Employee of any such provision(s), the Company shall have the
right, in addition to any other remedies available to it at law or in equity, to
enjoin the Employee in a court of equity from violating any such provision(s).
9.2 No Mitigation. If this Agreement is terminated by the Employee
pursuant to Section 10.5, the Employee shall not be required to mitigate damages
otherwise obtainable from the
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Company as a result thereof, and any income received by the Employee after such
termination shall not reduce the amount of damages otherwise obtainable from the
Company hereunder.
10. Termination.
This Agreement shall terminate prior to the expiration of the term set
forth in Section 2 upon the occurrence of any one of the following events.
10.1 Disability. If the Employee is unable substantially to perform his
or her duties under this Agreement by reason of physical or mental illness,
injury, or incapacity for 120 consecutive days, the Company may terminate this
Agreement and thereupon shall have no further liability or obligation to the
Employee for compensation hereunder except as may be prescribed under the terms
of any benefit plans or arrangements referred to in Section 5. 1. In the event
of a dispute under this Section 10. 1, the Employee agrees to submit to a
physical or mental examination by a licensed physician selected by the Company,
whose decision as to the Employee's disability shall be conclusive and binding
upon the Company and the Employee. The Company shall bear the cost of such
examination.
10.2 Death. This Agreement shall terminate upon the death of the
Employee and thereafter the Company shall have no further liability or
obligation to the Employee for compensation hereunder except as may be
prescribed under the terms of any benefit plans or arrangements referred to in
Section 5. 1.
10.3 Cause. The Company may terminate this Agreement without further
liability or obligation to the Employee if the Employee (i) has refused, failed,
or neglected to perform duties or render services hereunder or has performed or
rendered them incompetently; (ii) has engaged in illegal or other wrongful
conduct substantially detrimental to the business or reputation of the Company;
(iii) has developed or pursued interests substantially adverse to the Company;
(iv) is convicted of a crime which constitutes a felony; or (v) has otherwise
materially breached this Agreement.
10.4 Cessation of Business. The Company may terminate this Agreement
upon at least 60 days notice to the Employee of any of the following events and
thereafter the Company shall have no further liability or obligation to the
Employee for compensation hereunder except as may be prescribed under the terms
of any benefit plans or arrangements referred to in Section 5.1: (i) the sale by
the Company of all or substantially all of its assets to a single purchaser or
to a group of associated purchasers; (ii) the sale, exchange, or other
disposition, in one transaction, of at least two-thirds of the outstanding
shares of common stock of the Company; (iii) the good faith decision by the
Company to terminate its business and liquidate its assets; or (iv) the merger
or consolidation of the Company in a transaction in which the shareholders of
the Company receive less than 50 percent of the outstanding voting shares of the
successor corporation.
10.5 Breach by Company. The Employee may terminate this Agreement upon
at least 30 days notice to the Company of a material breach by the Company of
Sections 3, 4, or 5 of this
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Agreement. The Employee's exercise of this right to terminate shall not abrogate
the Employee's rights or remedies in respect of the breach giving rise to such
termination.
10.6 Voluntary Termination by Employee. The Employee may terminate this
Agreement at any time upon at least 60 days notice to the Company, after which
termination the Company shall have no further liability or obligation to the
Employee for compensation hereunder except as may be prescribed under the terms
of any benefit plans or arrangements referred to in Section 5.1.
11. Notice.
Any notice required or permitted to be given to a party pursuant to the
provisions of this Agreement shall be in writing and shall be deemed to have
been given on the date of receipt if delivered by messenger to, or if mailed to
such party by registered or certified mail, postage prepaid, at, the address for
such party set forth below (or to such other address or party as such party
shall designate in writing to the other party from time to time):
If to the Company:
I-Trax.com, Inc.
Attention: General Counsel
Reston Plaza II, 12020 Sunrise Valley Drive, Suite 350
Reston, VA 20191
If to the Employee:
5595 S. Emporia Circle
Englewood, CO 80111
12. Modification and Waiver.
(a) No waiver or modification of this Agreement or of any covenant,
condition, or limitation herein contained shall be valid or effective unless in
writing and duly executed by the party to be charged therewith and no evidence
of any waiver or modification shall be offered or received in evidence of any
proceeding or litigation between the parties arising out of or affecting this
Agreement, or the rights or obligations of the parties hereunder, unless such
waiver or modification is in writing, duly executed as aforesaid.
(b) The parties further agree that the provisions of paragraph (a)
above may not be waived except as herein set forth. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver of any breach of condition of this Agreement shall
be deemed to be a waiver of any other subsequent breach of condition, whether of
like or different nature.
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13. Severability.
If any clause, paragraph, or section of this Agreement be held invalid
or unenforceable, the remaining provisions of this Agreement shall not be
affected thereby and shall be valid and remain enforceable to the extent
permitted by law. Moreover, if any one or more of the provisions in this
Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity, or subject, it shall be construed by limiting and
reducing it, so as to be enforceable to the extent compatible with then
applicable law.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without giving effect to principles of
conflicts of law.
15. Entire Agreement.
This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations, and understandings, whether oral or
in writing, of the parties. No supplement, modification, or amendment of this
Agreement shall be binding upon the parties hereto unless executed in writing in
accordance with Section 12.
16. Headings.
The headings in this Agreement are inserted for convenience of
reference only and shall not be deemed to constitute a part or affect the
meaning of any provision hereof.
17. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to constitute an original but all of which together will
constitute one and the same instrument.
18. Assignments.
(a) The Employee may not assign any rights or obligations under this
Agreement without the prior written consent of the Company. This Agreement shall
be binding upon and inure to the benefit of the Employee and his or her heirs,
guardians, executors, administrators, and permitted successors and assigns.
(b) The Company may not assign any rights or obligations under this
Agreement without the prior written consent of the Employee except to the
surviving corporation in connection with a merger or consolidation involving the
Company or to the purchaser of assets in connection with a sale of all or
substantially all of its assets, so long as the assignee expressly assumes the
Company's
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rights or obligations. This Agreement shall be binding upon and inure to the
benefit of the Company and its permitted successors and assigns.
(c) This Agreement does not create, and shall not be construed as
creating, any rights enforceable by any person not a party to this Agreement,
except as provided in this Section 18.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
COMPANY
I-TRAX.COM, INC.
By: /s/ Hans C. Kastensmith
------------------------------
Hans C. Kastensmith, President
EMPLOYEE
/s/ Michael O'Connell, M.D.
------------------------------
Michael O'Connell, M.D.
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Exhibit 10.14
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (Agreement) entered into as of the 1st day of
June, 1999 by and between Member-Link Systems, Inc., a corporation organized and
existing under the laws of the State of New York (Company), and Hans C.
Kastensmith, an individual residing in the Commonwealth of Virginia (Employee).
Recitals
The Company wishes to employ the Employee, and the Employee wishes to
be employed by the Company, on the terms and conditions set forth herein.
The parties therefore agree as follows:
1. Services.
1.1 Duties. The Company hereby employs the Employee as its
President and Executive Officer, with overall responsibility for the business
and operations of the Company. Subject to the direction and authorization of the
Company's board of directors, the Employee shall perform such functions and
undertake all responsibilities associated with such position(s).
1.2 Extent of Services. The Employee shall devote his full time and
best efforts to the business and affairs of the Company and to the promotion of
its interests.
1.3 No Conflict. The Employee represents that his or her employment
hereunder and compliance with the terms and conditions of this Agreement will
not conflict with or result in the breach of any agreement to which he or she is
a party or may be bound.
2. Term.
The term of this Agreement shall commence on the date hereof and end on
May 31, 2002, unless sooner terminated as provide in this Agreement.
3. Compensation.
3.1 Base Compensation; Bonus. As compensation for the services to
be rendered by the Employee hereunder, the Company shall pay the Employee a
salary at the rate of $175,000 per calendar year in accordance with the
Company's normal payroll practices; provided, however, that at the discretion of
the Company's board of directors, payment of all or any portion of such salary
may from time to time be deferred if the Company does not have sufficient
cash/capital to pay it when due in the normal course. Any amount(s) so deferred
will cumulate and be payable at such time(s) when the Company has sufficient
cash/capital, in the discretion of the Company's board of directors. The Company
will review the Employee's compensation from time to time during the term of
this Agreement and, at the discretion of the Company's board of directors, may
increase [or decrease] the
<PAGE>
Employee's base compensation based upon his or her performance, the financial
condition of the Company, and other relevant factors. In addition, the Company
may pay to the Employee such cash bonus(es), if any, as may be determined by the
board of directors of the Company from time to time.
3.2 Equity Compensation. The Employee will be eligible to
participate in any stock option plan covering management employees of the
Company that may be adopted and effective during the term of this Agreement.
4. Expenses.
The Employee is authorized to incur reasonable expenses for promoting
the business of the Company, including expenses for meals, travel,
entertainment, and similar items. The Company shall reimburse the Employee for
reasonable out-of-pocket expenses incurred by the Employee in performing
services pursuant to this Agreement promptly after receipt of a written
statement from the Employee which itemizes such expenses in reasonable detail,
together with a receipt for any individual expense in excess of $50. In no event
shall the Employee incur any individual expense in excess of $200, or any group
of related expenses in excess of $500, without the prior approval of the
president or chief financial officer of the Company. Use by the Employee of his
or her personal vehicle for the business of the Company shall be reimbursed at
the maximum rate per mile allowed by the Internal Revenue Service from time to
time.
5. Benefits.
5.1. Benefit Plans. The Employee shall be entitled to participate
in, and receive benefits from, any insurance, medical, disability, or other
employee benefit plan of the Company, if any, which may be in effect at any time
during the term of this Agreement and which shall be generally available to the
Employee on terms no less favorable than to other management employees of the
Company.
5.2. Vacation. The Employee shall be entitled during each calendar
year during the term of this Agreement to a vacation of two weeks, with pay, at
times reasonably agreeable to both the Company and the Employee. Unused vacation
time, if any, shall not cumulate from year to year.
6. Employee's Nondisclosure.
(a) The Employee expressly agrees that, without the prior approval of
the board of directors of the Company, he or she shall not, at any time during
the term of this Agreement or after its termination, on his or her own behalf or
as a partner, officer, director, trustee, employee, agent, or member of any
person, firm, corporation, or other entity, use or disclose to any person, firm,
corporation, or other entity, or otherwise employ his or her knowledge of the
products and business of, or any trade secrets or other confidential information
as to the operations, products, or customers of, the Company, unless (i)
necessary to the performance of this Agreement and in furtherance of the
Company's best interest or (ii) already in the public domain or generally known
in the industry.
(b) All documents, records, or similar items, whether in writing or in
electronic or digitized form, relating to the business of the Company shall
remain the exclusive property of the
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Company and shall not be removed from the premises of the Company without its
prior written approval.
(c) The provisions of this Section 6 shall survive the termination of
this Agreement.
7. Inventions.
(a) If at any time or times during the term of this Agreement,
(i) the Employee shall (either alone or with others) make,
conceive, discover, reduce to practice or become possessed of any
invention, modification, discovery, design, development, improvement,
process, formula, data, technique, know-how, secret, or intellectual
property right whatsoever or any interest therein (whether or not
patentable or registrable under copyright or similar statutes or
subject to analogous protection) that relates directly to medical
information systems, software or databases, or results from tasks
assigned to the Employee by the Company (herein called "Inventions"),
and
(ii) (A) in connection therewith, the Employee used equipment,
supplies, facilities or trade secret information of the Company, or (B)
in connection therewith, used hours for which he was to be or was
compensated by the Company hereunder, or (C) which relate at the time
of conception or reduction to practice thereof the business of the
Company or to its actual or demonstrably anticipated research and
development, or (D) which result from any work performed by him for the
Company,
such Inventions and the benefits thereof shall immediately become the sole and
absolute property of the Company and its assigns, and the Employee shall
promptly disclose assign to the Company (or any persons designated by it) each
such Invention and benefits or rights resulting therefrom to the Company and its
assigns without compensation and shall communicate, without cost or delay, and
without publishing the same, all available information relating thereto (with
all necessary plans, models, software code or interface designs) to the Company.
(b) The Employee will also promptly disclose to the Company, and the
Company hereby agrees to receive all such disclosures in confidence, any other
invention, modification, discovery, design, development, improvement, process,
formula, data, technique, know-how, secret or intellectual property right
whatsoever or any interest therein directly in and limited to the fields of
medical information systems, software or databases (whether or not patentable or
registrable under copyright or similar statutes or subject to analogous
protection) made, conceived, discovered, reduced to practice or possessed by the
Employee (either alone or with others) at any time or times during the term of
this Agreement for the purpose of determining whether they constitute
"Inventions" as defined herein.
(c) Upon disclosure of each Invention to the Company, during the term
of this Agreement and at any time thereafter, the Employee will, at the request
and cost of the Company, sign, execute, make and do all such deeds, documents,
acts and things as the Company and its duly authorized agents may reasonably
require:
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(i) to apply for, obtain and vest in the name of the Company alone
(unless the Company otherwise directs) patents, copyrights or other
similar protection in any country throughout the world and when so
obtained or vested to renew and restore the same; and
(ii) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or
applications for revocation of such letters patent, copyright or other
analogous protection.
In the event the Company is unable, after reasonable effort, to secure
the Employee's signature on any patents, copyright, or other protection relating
to an Invention, whether because of the Employee's physical or mental incapacity
or for any other reason whatsoever, the Employee hereby irrevocably designates
and appoints the Company and its duly authorized officers and agents as the
Employee's agent and attorney-in-fact, to act for and in the Employee's behalf
and stead to execute and file any such application or applications and to do all
other lawfully permitted acts to further the prosecution and issuance of
patents, copyright or other protection thereon with the same legal force and
effect as if executed by the Employee.
(d) The Employee will keep and maintain adequate and current records of
all such Inventions and all items that fall within the scope of paragraph (b)
above, in the form of memoranda, notes, sketches, drawings, reports, computer
code, or computer software relating thereto, which records shall be and remain
the property of and available to the Company at all times. Upon termination of
this Agreement, all records of Inventions and such other items in the form of
memoranda, notes, sketches, drawings, reports, computer programs, computer
software, technology and applications thereof, or the like, including all copies
thereof, then in the Employee's possession, whether prepared by the Employee or
others, will be left with the Company.
(e) The Employee represents that the inventions identified in the
pages, if any, attached hereto comprise all the unpatented inventions or
developments which the Employee has made or conceived prior to the date of this
Agreement, which inventions are excluded from this Agreement. The Employee
understands that it is necessary to list only the title of such invention
itself. IF THERE ARE NO SUCH UNPATENTED INVENTIONS TO BE EXCLUDED, THE EMPLOYEE
SHOULD INITIAL HERE.
8. Covenant Not to Compete.
During the term of this Agreement and for a period of 12 months
following its termination (unless this Agreement is terminated by the Employee
pursuant to Section 10.6), the Employee shall not, without the prior written
approval of the Company, directly or indirectly
(a) carry on or participate in as owner, employee, agent, or otherwise
any business in competition with that conducted or engaged in by the Company;
(b) solicit, for the Employee's own account or for the account of
others, orders for products or services of a kind similar to those provided by
the Company during the term of this Agreement from any party which was a client
or customer of the Company or which the Company
4
<PAGE>
was actively soliciting to be a customer or client during the 90-day period
preceding the date of termination of this Agreement; or
(c) urge any customer or client or potential customer or client of the
Company to discontinue business, in whole or in part, or not to do business,
with the Company.
9. Remedies.
9.1. Injunctive Relief. A violation by the Employee of the
provisions of Sections 6, 7, or 8 could cause irreparable injury to the Company,
for which there may be no adequate remedy at law. In the event of a breach or
threatened breach by the Employee of any such provision(s), the Company shall
have the right, in addition to any other remedies available to it at law or in
equity, to enjoin the Employee in a court of equity from violating any such
provision(s).
9.2. No Mitigation. If this Agreement is terminated by the Employee
pursuant to Section 10.6, the Employee shall not be required to mitigate damages
otherwise obtainable from the Company as a result thereof, and any income
received by the Employee after such termination shall not reduce the amount of
damages otherwise obtainable from the Company hereunder.
10. Termination.
This Agreement shall terminate prior to the expiration of the term set
forth in Section 2 upon the occurrence of any one of the following events.
10.1. Disability. If the Employee is unable substantially to
perform his or her duties under this Agreement by reason of physical or mental
illness, injury, or incapacity for 120 consecutive days, the Company may
terminate this Agreement and thereupon shall have no further liability or
obligation to the Employee for compensation hereunder except as may be
prescribed under the terms of any benefit plans or arrangements referred to in
Section 5. 1. In the event of a dispute under this Section 10. 1, the Employee
agrees to submit to a physical or mental examination by a licensed physician
selected by the Company, whose decision as to the Employee's disability shall be
conclusive and binding upon the Company and the Employee. The Company shall bear
the cost of such examination.
10.2. Death. This Agreement shall terminate upon the death of the
Employee and thereafter the Company shall have no further liability or
obligation to the Employee for compensation hereunder except as may be
prescribed under the terms of any benefit plans or arrangements referred to in
Section 5. 1.
10.3. Cause. The Company may terminate this Agreement without
further liability or obligation to the Employee if the Employee (i) has refused,
failed, or neglected to perform duties or render services hereunder or has
performed or rendered them incompetently; (ii) has engaged in illegal or other
wrongful conduct substantially detrimental to the business or reputation of the
Company; (iii) has developed or pursued interests substantially adverse to the
Company; (iv) is convicted of a crime which constitutes a felony; or (v) has
otherwise materially breached this Agreement.
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<PAGE>
10.4. Cessation of Business. The Company may terminate this
Agreement upon at least 60 days notice to the Employee if the Company in good
faith decides to terminate its business and liquidate its assets, and thereafter
the Company shall have no further liability or obligation to the Employee for
compensation hereunder except as may be prescribed under the terms of any
benefit plans or arrangements referred to in Section 5.1.
10.5. Change in Control. The Company may terminate this Agreement
upon at least 60 days notice to the Employee of any of the following events, and
thereafter the Company shall have no further liability or obligation to the
Employee for compensation hereunder:
(i) the merger or consolidation of the Company in a
transaction in which the shareholders of the Company
receive less than 50 percent of the outstanding voting
shares of the successor corporation, and the surviving
corporation agrees in a writing satisfactory to
Employee to pay Employee, for a period of 12 months
after the transaction, Employee's full base salary at
the annual rate in effect immediately before the
effective date of the transaction, such payments to be
made not less often than monthly, and to continue to
make available to Employee during such 12-month period
the benefits to which Employee was entitled pursuant to
Section 5.1, as of the effective date;
(ii) the sale, exchange, or other disposition, in one
transaction, of at least two- thirds of the outstanding
shares of the voting stock of the Company, and the
acquiror agrees in a writing satisfactory to Employee
to pay Employee, for a period of 12 months after the
transaction, Employee's full base salary at the annual
rate in effect immediately before the effective date of
the transaction, such payments to be made not less
often than monthly, and to continue to make available
to Employee during such 12-month period the benefits to
which Employee was entitled pursuant to Section 5.1 as
of the effective date; or
(iii) the sale of all or substantially all of the assets of
the Company to a single purchaser or a group of
associated purchasers, and the purchaser(s) agree(s) in
a writing satisfactory to Employee to pay Employee, for
a period of 12 months after the transaction, Employee's
full base salary at the annual rate in effect
immediately before the effective date of the
transaction, such payments to be made not less often
than monthly, and to continue to make available to
Employee during such 12-month period the benefits to
which Employee was entitled pursuant to Section 5.1 as
of the effective date.
The Employee will be entitled to exercise any outstanding stock options in
accordance with the terms of any applicable stock option plan.
10.6. Breach by Company. The Employee may terminate this Agreement
upon at least 30 days notice to the Company of a material breach by the Company
of Sections 3, 4, or 5 of this Agreement. The Employee's exercise of this right
to terminate shall not abrogate the Employee's rights or remedies in respect of
the breach giving rise to such termination.
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<PAGE>
10.7. Voluntary Termination by Employee. The Employee may terminate
this Agreement at any time upon at least 60 days notice to the Company, after
which termination the Company shall have no further liability or obligation to
the Employee for compensation hereunder except as may be prescribed under the
terms of any benefit plans or arrangements referred to in Section 5.1.
11. Notice.
Any notice required or permitted to be given to a party pursuant to the
provisions of this Agreement shall be in writing and shall be deemed to have
been given on the date of receipt if delivered by messenger to, or if mailed to
such party by registered or certified mail, postage prepaid, at, the address for
such party set forth below (or to such other address or party as such party
shall designate in writing to the other party from time to time):
If to the Company:
Member-Link Systems, Inc.
Attention: General Counsel
11 Dupont Circle, Suite 325
Washington, DC 20036
If to the Employee:
Hans C. Kastensmith
7435 Timberrock Road
Falls Church, VA 22043
12. Modification and Waiver.
(a) No waiver or modification of this Agreement or of any covenant,
condition, or limitation herein contained shall be valid or effective unless in
writing and duly executed by the party to be charged therewith and no evidence
of any waiver or modification shall be offered or received in evidence of any
proceeding or litigation between the parties arising out of or affecting this
Agreement, or the rights or obligations of the parties hereunder, unless such
waiver or modification is in writing, duly executed as aforesaid.
(b) The parties further agree that the provisions of paragraph (a)
above may not be waived except as herein set forth. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver of any breach of condition of this Agreement shall
be deemed to be a waiver of any other subsequent breach of condition, whether of
like or different nature.
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<PAGE>
13. Severability.
If any clause, paragraph, or section of this Agreement be held invalid
or unenforceable, the remaining provisions of this Agreement shall not be
affected thereby and shall be valid and remain enforceable to the extent
permitted by law. Moreover, if any one or more of the provisions in this
Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity, or subject, it shall be construed by limiting and
reducing it, so as to be enforceable to the extent compatible with then
applicable law.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without giving effect to principles of
conflicts of law.
15. Entire Agreement.
This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations, and understandings, whether oral or
in writing, of the parties. No supplement, modification, or amendment of this
Agreement shall be binding upon the parties hereto unless executed in writing in
accordance with Section 12.
16. Headings.
The headings in this Agreement are inserted for convenience of
reference only and shall not be deemed to constitute a part or affect the
meaning of any provision hereof.
17. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to constitute an original but all of which together will
constitute one and the same instrument.
18. Successors and Assigns.
(a) The Employee may not assign any rights or obligations under this
Agreement without the prior written consent of the Company. This Agreement shall
be binding upon and inure to the benefit of the Employee and his or her heirs,
guardians, executors, administrators, and permitted successors and assigns.
(b) Except as otherwise provided in Section 10.5, the Company will
require any successor or assigns (by merger, consolidation, purchase or
otherwise) to all or substantially all of its business and/or assets, prior to
consummation of any transaction therewith and by agreement in form and substance
satisfactory to Employee, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such
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<PAGE>
succession or assignment had taken place. This Agreement shall be binding upon
and inure to the benefit of the Company and its successors and assigns.
(c) This Agreement does not create, and shall not be construed as
creating, any rights enforceable by any person not a party to this Agreement,
except as provided in this Section 18.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
COMPANY
MEMBER-LINK SYSTEMS, INC.
By: /s/ William F. Burke
----------------------------------
William F. Burke, Vice President -
Marketing, Sales and Operations
EMPLOYEE
/s/ Hans C. Kastensmith
----------------------------------
Hans C. Kastensmith
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Exhibit 10.15
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (Agreement) entered into as of the 1st day of
June, 1999 by and between Member-Link Systems, Inc., a corporation organized and
existing under the laws of the State of New York (Company), and David C.
McCormack, an individual residing in the Commonwealth of Virginia (Employee).
Recitals
The Company wishes to employ the Employee, and the Employee wishes to
be employed by the Company, on the terms and conditions set forth herein.
The parties therefore agree as follows:
1. Services.
1.1 Duties. The Company hereby employs the Employee as its
Vice President-Engineering. Subject to the direction and authorization of the
Company's board of directors, the Employee shall perform such functions and
undertake all responsibilities associated with such position(s).
1.2 Extent of Services. The Employee shall devote his full
time and best efforts to the business and affairs of the Company and to the
promotion of its interests.
1.3 No Conflict. The Employee represents that his or her
employment hereunder and compliance with the terms and conditions of this
Agreement will not conflict with or result in the breach of any agreement to
which he or she is a party or may be bound.
2. Term.
The term of this Agreement shall commence on the date hereof and end on
May 31, 2002, unless sooner terminated as provide in this Agreement.
3. Compensation.
3.1 Base Compensation; Bonus. As compensation for the services to be
rendered by the Employee hereunder, the Company shall pay the Employee a salary
at the rate of $175,000 per calendar year in accordance with the Company's
normal payroll practices; provided, however, that at the discretion of the
Company's board of directors, payment of all or any portion of such salary may
from time to time be deferred if the Company does not have sufficient
cash/capital to pay it when due in the normal course. Any amount(s) so deferred
will cumulate and be payable at such time(s) when the Company has sufficient
cash/capital, in the discretion of the Company's board of directors. The Company
will review the Employee's compensation from time to time during the term of
this Agreement and, at the discretion of the Company's board of directors, may
increase [or decrease] the
<PAGE>
Employee's base compensation based upon his or her performance, the financial
condition of the Company, and other relevant factors. In addition, the Company
may pay to the Employee such cash bonus(es), if any, as may be determined by the
board of directors of the Company from time to time.
3.2 Equity Compensation. The Employee will be eligible to participate
in any stock option plan covering management employees of the Company that may
be adopted and effective during the term of this Agreement.
4. Expenses.
The Employee is authorized to incur reasonable expenses for promoting
the business of the Company, including expenses for meals, travel,
entertainment, and similar items. The Company shall reimburse the Employee for
reasonable out-of-pocket expenses incurred by the Employee in performing
services pursuant to this Agreement promptly after receipt of a written
statement from the Employee which itemizes such expenses in reasonable detail,
together with a receipt for any individual expense in excess of $50. In no event
shall the Employee incur any individual expense in excess of $200, or any group
of related expenses in excess of $500, without the prior approval of the
president or chief financial officer of the Company. Use by the Employee of his
or her personal vehicle for the business of the Company shall be reimbursed at
the maximum rate per mile allowed by the Internal Revenue Service from time to
time.
5. Benefits.
5.1. Benefit Plans. The Employee shall be entitled to participate in,
and receive benefits from, any insurance, medical, disability, or other employee
benefit plan of the Company, if any, which may be in effect at any time during
the term of this Agreement and which shall be generally available to the
Employee on terms no less favorable than to other management employees of the
Company.
5.2. Vacation. The Employee shall be entitled during each calendar year
during the term of this Agreement to a vacation of two weeks, with pay, at times
reasonably agreeable to both the Company and the Employee. Unused vacation time,
if any, shall not cumulate from year to year.
6. Employee's Nondisclosure.
(a) The Employee expressly agrees that, without the prior approval of
the board of directors of the Company, he or she shall not, at any time during
the term of this Agreement or after its termination, on his or her own behalf or
as a partner, officer, director, trustee, employee, agent, or member of any
person, firm, corporation, or other entity, use or disclose to any person, firm,
corporation, or other entity, or otherwise employ his or her knowledge of the
products and business of, or any trade secrets or other confidential information
as to the operations, products, or customers of, the Company, unless (i)
necessary to the performance of this Agreement and in furtherance of the
Company's best interest or (ii) already in the public domain or generally known
in the industry.
(b) All documents, records, or similar items, whether in writing or in
electronic or digitized form, relating to the business of the Company shall
remain the exclusive property of the
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Company and shall not be removed from the premises of the Company without its
prior written approval.
(c) The provisions of this Section 6 shall survive the termination of
this Agreement.
7. Inventions.
(a) If at any time or times during the term of this Agreement,
(i) the Employee shall (either alone or with others) make,
conceive, discover, reduce to practice or become possessed of any
invention, modification, discovery, design, development, improvement,
process, formula, data, technique, know-how, secret, or intellectual
property right whatsoever or any interest therein (whether or not
patentable or registrable under copyright or similar statutes or
subject to analogous protection) that relates directly to medical
information systems, software or databases, or results from tasks
assigned to the Employee by the Company (herein called "Inventions"),
and
(ii) (A) in connection therewith, the Employee used equipment,
supplies, facilities or trade secret information of the Company, or (B)
in connection therewith, used hours for which he was to be or was
compensated by the Company hereunder, or (C) which relate at the time
of conception or reduction to practice thereof the business of the
Company or to its actual or demonstrably anticipated research and
development, or (D) which result from any work performed by him for the
Company,
such Inventions and the benefits thereof shall immediately become the sole and
absolute property of the Company and its assigns, and the Employee shall
promptly disclose assign to the Company (or any persons designated by it) each
such Invention and benefits or rights resulting therefrom to the Company and its
assigns without compensation and shall communicate, without cost or delay, and
without publishing the same, all available information relating thereto (with
all necessary plans, models, software code or interface designs) to the Company.
(b) The Employee will also promptly disclose to the Company, and the
Company hereby agrees to receive all such disclosures in confidence, any other
invention, modification, discovery, design, development, improvement, process,
formula, data, technique, know-how, secret or intellectual property right
whatsoever or any interest therein directly in and limited to the fields of
medical information systems, software or databases (whether or not patentable or
registrable under copyright or similar statutes or subject to analogous
protection) made, conceived, discovered, reduced to practice or possessed by the
Employee (either alone or with others) at any time or times during the term of
this Agreement for the purpose of determining whether they constitute
"Inventions" as defined herein.
(c) Upon disclosure of each Invention to the Company, during the term
of this Agreement and at any time thereafter, the Employee will, at the request
and cost of the Company, sign, execute, make and do all such deeds, documents,
acts and things as the Company and its duly authorized agents may reasonably
require:
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(i) to apply for, obtain and vest in the name of the Company
alone (unless the Company otherwise directs) patents, copyrights or
other similar protection in any country throughout the world and when
so obtained or vested to renew and restore the same; and
(ii) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or
applications for revocation of such letters patent, copyright or other
analogous protection.
In the event the Company is unable, after reasonable effort, to secure
the Employee's signature on any patents, copyright, or other protection relating
to an Invention, whether because of the Employee's physical or mental incapacity
or for any other reason whatsoever, the Employee hereby irrevocably designates
and appoints the Company and its duly authorized officers and agents as the
Employee's agent and attorney-in-fact, to act for and in the Employee's behalf
and stead to execute and file any such application or applications and to do all
other lawfully permitted acts to further the prosecution and issuance of
patents, copyright or other protection thereon with the same legal force and
effect as if executed by the Employee.
(d) The Employee will keep and maintain adequate and current records of
all such Inventions and all items that fall within the scope of paragraph (b)
above, in the form of memoranda, notes, sketches, drawings, reports, computer
code, or computer software relating thereto, which records shall be and remain
the property of and available to the Company at all times. Upon termination of
this Agreement, all records of Inventions and such other items in the form of
memoranda, notes, sketches, drawings, reports, computer programs, computer
software, technology and applications thereof, or the like, including all copies
thereof, then in the Employee's possession, whether prepared by the Employee or
others, will be left with the Company.
(e) The Employee represents that the inventions identified in the
pages, if any, attached hereto comprise all the unpatented inventions or
developments which the Employee has made or conceived prior to the date of this
Agreement, which inventions are excluded from this Agreement. The Employee
understands that it is necessary to list only the title of such invention
itself. IF THERE ARE NO SUCH UNPATENTED INVENTIONS TO BE EXCLUDED, THE EMPLOYEE
SHOULD INITIAL HERE.
8. Covenant Not to Compete.
During the term of this Agreement and for a period of 12 months
following its termination (unless this Agreement is terminated by the Employee
pursuant to Section 10.6), the Employee shall not, without the prior written
approval of the Company, directly or indirectly
(a) carry on or participate in as owner, employee, agent, or otherwise
any business in competition with that conducted or engaged in by the Company;
(b) solicit, for the Employee's own account or for the account of
others, orders for products or services of a kind similar to those provided by
the Company during the term of this Agreement from any party which was a client
or customer of the Company or which the Company
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was actively soliciting to be a customer or client during the 90-day period
preceding the date of termination of this Agreement; or
(c) urge any customer or client or potential customer or client of the
Company to discontinue business, in whole or in part, or not to do business,
with the Company.
9. Remedies.
9.1. Injunctive Relief. A violation by the Employee of the provisions
of Sections 6, 7, or 8 could cause irreparable injury to the Company, for which
there may be no adequate remedy at law. In the event of a breach or threatened
breach by the Employee of any such provision(s), the Company shall have the
right, in addition to any other remedies available to it at law or in equity, to
enjoin the Employee in a court of equity from violating any such provision(s).
9.2. No Mitigation. If this Agreement is terminated by the Employee
pursuant to Section 10.6, the Employee shall not be required to mitigate damages
otherwise obtainable from the Company as a result thereof, and any income
received by the Employee after such termination shall not reduce the amount of
damages otherwise obtainable from the Company hereunder.
10. Termination.
This Agreement shall terminate prior to the expiration of the term set
forth in Section 2 upon the occurrence of any one of the following events.
10.1. Disability. If the Employee is unable substantially to perform
his or her duties under this Agreement by reason of physical or mental illness,
injury, or incapacity for 120 consecutive days, the Company may terminate this
Agreement and thereupon shall have no further liability or obligation to the
Employee for compensation hereunder except as may be prescribed under the terms
of any benefit plans or arrangements referred to in Section 5. 1. In the event
of a dispute under this Section 10. 1, the Employee agrees to submit to a
physical or mental examination by a licensed physician selected by the Company,
whose decision as to the Employee's disability shall be conclusive and binding
upon the Company and the Employee. The Company shall bear the cost of such
examination.
10.2. Death. This Agreement shall terminate upon the death of the
Employee and thereafter the Company shall have no further liability or
obligation to the Employee for compensation hereunder except as may be
prescribed under the terms of any benefit plans or arrangements referred to in
Section 5. 1.
10.3. Cause. The Company may terminate this Agreement without further
liability or obligation to the Employee if the Employee (i) has refused, failed,
or neglected to perform duties or render services hereunder or has performed or
rendered them incompetently; (ii) has engaged in illegal or other wrongful
conduct substantially detrimental to the business or reputation of the Company;
(iii) has developed or pursued interests substantially adverse to the Company;
(iv) is convicted of a crime which constitutes a felony; or (v) has otherwise
materially breached this Agreement.
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10.4. Cessation of Business. The Company may terminate this Agreement
upon at least 60 days notice to the Employee if the Company in good faith
decides to terminate its business and liquidate its assets, and thereafter the
Company shall have no further liability or obligation to the Employee for
compensation hereunder except as may be prescribed under the terms of any
benefit plans or arrangements referred to in Section 5.1.
10.5. Change in Control. The Company may terminate this Agreement upon
at least 60 days notice to the Employee of any of the following events, and
thereafter the Company shall have no further liability or obligation to the
Employee for compensation hereunder:
(i) the merger or consolidation of the Company in a
transaction in which the shareholders of the Company
receive less than 50 percent of the outstanding
voting shares of the successor corporation, and the
surviving corporation agrees in a writing
satisfactory to Employee to pay Employee, for a
period of 12 months after the transaction, Employee's
full base salary at the annual rate in effect
immediately before the effective date of the
transaction, such payments to be made not less often
than monthly, and to continue to make available to
Employee during such 12-month period the benefits to
which Employee was entitled pursuant to Section 5.1,
as of the effective date;
(ii) the sale, exchange, or other disposition, in one
transaction, of at least two-thirds of the
outstanding shares of the voting stock of the
Company, and the acquiror agrees in a writing
satisfactory to Employee to pay Employee, for a
period of 12 months after the transaction, Employee's
full base salary at the annual rate in effect
immediately before the effective date of the
transaction, such payments to be made not less often
than monthly, and to continue to make available to
Employee during such 12-month period the benefits to
which Employee was entitled pursuant to Section 5.1
as of the effective date; or
(iii) the sale of all or substantially all of the assets of
the Company to a single purchaser or a group of
associated purchasers, and the purchaser(s) agree(s)
in a writing satisfactory to Employee to pay
Employee, for a period of 12 months after the
transaction, Employee's full base salary at the
annual rate in effect immediately before the
effective date of the transaction, such payments to
be made not less often than monthly, and to continue
to make available to Employee during such 12-month
period the benefits to which Employee was entitled
pursuant to Section 5.1 as of the effective date.
The Employee will be entitled to exercise any outstanding stock options in
accordance with the terms of any applicable stock option plan.
10.6. Breach by Company. The Employee may terminate this Agreement upon
at least 30 days notice to the Company of a material breach by the Company of
Sections 3, 4, or 5 of this Agreement. The Employee's exercise of this right to
terminate shall not abrogate the Employee's rights or remedies in respect of the
breach giving rise to such termination.
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10.7. Voluntary Termination by Employee. The Employee may terminate
this Agreement at any time upon at least 60 days notice to the Company, after
which termination the Company shall have no further liability or obligation to
the Employee for compensation hereunder except as may be prescribed under the
terms of any benefit plans or arrangements referred to in Section 5.1.
11. Notice.
Any notice required or permitted to be given to a party pursuant to the
provisions of this Agreement shall be in writing and shall be deemed to have
been given on the date of receipt if delivered by messenger to, or if mailed to
such party by registered or certified mail, postage prepaid, at, the address for
such party set forth below (or to such other address or party as such party
shall designate in writing to the other party from time to time):
If to the Company:
Member-Link Systems, Inc.
Attention: General Counsel
11 Dupont Circle, Suite 325
Washington, DC 20036
If to the Employee:
David C. McCormack
9572 Nittany Drive, Apt. 403
Manassas, VA 20110
12. Modification and Waiver.
(a) No waiver or modification of this Agreement or of any covenant,
condition, or limitation herein contained shall be valid or effective unless in
writing and duly executed by the party to be charged therewith and no evidence
of any waiver or modification shall be offered or received in evidence of any
proceeding or litigation between the parties arising out of or affecting this
Agreement, or the rights or obligations of the parties hereunder, unless such
waiver or modification is in writing, duly executed as aforesaid.
(b) The parties further agree that the provisions of paragraph (a)
above may not be waived except as herein set forth. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver of any breach of condition of this Agreement shall
be deemed to be a waiver of any other subsequent breach of condition, whether of
like or different nature.
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13. Severability.
If any clause, paragraph, or section of this Agreement be held invalid
or unenforceable, the remaining provisions of this Agreement shall not be
affected thereby and shall be valid and remain enforceable to the extent
permitted by law. Moreover, if any one or more of the provisions in this
Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity, or subject, it shall be construed by limiting and
reducing it, so as to be enforceable to the extent compatible with then
applicable law.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without giving effect to principles of
conflicts of law.
15. Entire Agreement.
This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations, and understandings, whether oral or
in writing, of the parties. No supplement, modification, or amendment of this
Agreement shall be binding upon the parties hereto unless executed in writing in
accordance with Section 12.
16. Headings.
The headings in this Agreement are inserted for convenience of
reference only and shall not be deemed to constitute a part or affect the
meaning of any provision hereof.
17. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to constitute an original but all of which together will
constitute one and the same instrument.
18. Successors and Assigns.
(a) The Employee may not assign any rights or obligations under this
Agreement without the prior written consent of the Company. This Agreement shall
be binding upon and inure to the benefit of the Employee and his or her heirs,
guardians, executors, administrators, and permitted successors and assigns.
(b) Except as otherwise provided in Section 10.5, the Company will
require any successor or assigns (by merger, consolidation, purchase or
otherwise) to all or substantially all of its business and/or assets, prior to
consummation of any transaction therewith and by agreement in form and substance
satisfactory to Employee, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such
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succession or assignment had taken place. This Agreement shall be binding upon
and inure to the benefit of the Company and its successors and assigns.
(c) This Agreement does not create, and shall not be construed as
creating, any rights enforceable by any person not a party to this Agreement,
except as provided in this Section 18.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
COMPANY
MEMBER-LINK SYSTEMS, INC.
By: /s/ Hans C. Kastensmith
--------------------------
Hans C. Kastensmith, President
EMPLOYEE
/s/ David C. McCormack
-----------------------
David C. McCormack
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Exhibit 10.16
I-TRAX.COM, INC.
2000 EQUITY COMPENSATION PLAN
The purpose of the I-Trax.com, Inc. 2000 Equity Compensation Plan (the
"Plan") is to provide (i) designated employees of I-Trax.com, Inc. (the
"Company") and its subsidiaries, (ii) certain consultants and advisors who
perform services for the Company or its subsidiaries and (iii) non-employee
members of the Board of Directors of the Company (the "Board") with the
opportunity to receive grants of incentive stock options, nonqualified stock
options and restricted stock. The Company believes that the Plan will encourage
the participants to contribute materially to the growth of the Company, thereby
benefitting the Company's stockholders, and will align the economic interests of
the individuals to whom grants are made with those of the stockholders.
1. Administration
1.1. Committee. The Plan shall be administered and interpreted by a
committee appointed by the Board (the "Committee"). The Committee, which shall
consist of two or more "outside directors" as defined under section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code"), and related Treasury
regulations and "nonemployee directors" as defined under Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
1.2. Committee Authority. The Committee shall have the sole authority
to (i) determine the individuals to whom grants shall be made under the Plan,
(ii) determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv) amend
the terms of any previously issued grant, and (v) deal with any other matters
arising under the Plan. The Committee shall from time to time review the
implementation and results of the Plan to determine the extent to which the
Plan's purpose is being accomplished. In addition, the Committee shall
periodically meet with senior management of the Company to review management's
suggestions regarding grants under the Plan, including the individuals who are
proposed to receive grants and the amount and time of such grants; provided,
that all such grants shall be determined solely by the Committee in its
discretion.
1.3. Committee Determinations. The Committee shall have full power and
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan.
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2. Grants
Awards under the Plan may consist of grants of incentive stock options
as described in Section 5 ("Incentive Stock Options"), nonqualified stock
options as described in Section 5 ("Nonqualified Stock Options") (Incentive
Stock Options and Nonqualified Stock Options are collectively referred to as
"Options") and restricted stock as described in Section 6 ("Restricted Stock")
(hereinafter collectively referred to as "Grants"). All Grants shall be subject
to the terms and conditions set forth herein and to such other terms and
conditions consistent with this Plan as the Committee deems appropriate and as
are specified in writing by the Committee to the individual in a grant
instrument or an amendment to the grant instrument (the "Grant Instrument"). The
Committee shall approve the form and provisions of each Grant Instrument. Grants
under a particular Section of the Plan need not be uniform as among the
grantees.
3. Shares Subject to the Plan
3.1. Shares Authorized. Subject to adjustment as described below, the
aggregate number of shares of common stock of the Company ("Company Stock") that
may be issued or transferred under the Plan is 3,000,000 shares. The maximum
aggregate number of shares of Company Stock that shall be subject to Grants made
under the Plan to any individual during any calendar year shall be 350,000
shares, subject to adjustment as described below. The shares may be authorized
but unissued shares of Company Stock or reacquired shares of Company Stock,
including shares purchased by the Company on the open market for purposes of the
Plan. If and to the extent Options granted under the Plan terminate, expire, or
are canceled, forfeited, exchanged or surrendered without having been exercised
or if any shares of Restricted Stock are forfeited, the shares subject to such
Grants shall again be available for purposes of the Plan. If shares of Company
Stock are used to pay the exercise price of an Option, only the net number of
shares received by the grantee pursuant to such exercise shall be considered to
have been issued or transferred under the Plan with respect to such Option, and
the remaining number of shares subject to the Option shall again be available
for purposes of the Plan.
3.2. Adjustments. If there is any change in the number or kind of
shares of Company Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation in which the Company is the
surviving corporation, (iii) by reason of a reclassification or change in par
value, or (iv) by reason of any other extraordinary or unusual event affecting
the outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Grants, the maximum number of shares of Company Stock that
any individual participating in the Plan may be granted in any year, the number
of shares covered by outstanding Grants, the kind of shares issued under the
Plan, and the purchase price per share of such Grants may be appropriately
adjusted by the Committee to reflect any increase or decrease in the number of,
or change in the kind or value of, issued shares of Company Stock to preclude,
to the extent practicable, the enlargement or dilution of rights and benefits
under such Grants; provided, however, that any fractional shares resulting from
such adjustment shall be eliminated. Any adjustments determined by the Committee
shall be final, binding and conclusive.
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4. Eligibility for Participation
4.1. Eligible Persons. All employees of the Company and its
subsidiaries ("Employees"), including Employees who are officers or members of
the Board, and members of the Board who are not Employees ("Non-Employee
Directors") shall be eligible to participate in the Plan. Consultants and
advisors who perform services for the Company or any of its subsidiaries ("Key
Advisors") shall be eligible to participate in the Plan if the Key Advisors
render bona fide services to the Company or its subsidiaries, the services are
not in connection with the offer and sale of securities in a capital- raising
transaction, and the Key Advisors do not directly or indirectly promote or
maintain a market for the Company's securities.
4.2. Selection of Grantees. The Committee shall select the Employees,
Non-Employee Directors and Key Advisors to receive Grants and shall determine
the number of shares of Company Stock subject to a particular Grant in such
manner as the Committee determines. Employees, Key Advisors and Non-Employee
Directors who receive Grants under this Plan shall hereinafter be referred to as
"Grantees".
5. Granting of Options
5.1. Number of Shares. Subject to the limitations set forth in Section
3(a) above, the Committee shall determine the number of shares of Company Stock
that will be subject to each Grant of Options to Employees, Non-Employee
Directors and Key Advisors.
5.2. Type of Option and Price.
5.2.1. The Committee may grant Incentive Stock Options that are
intended to qualify as "incentive stock options" within the meaning of section
422 of the Code or Nonqualified Stock Options that are not intended to so
qualify or any combination of Incentive Stock Options and Nonqualified Stock
Options, all in accordance with the terms and conditions set forth herein.
Incentive Stock Options may be granted only to Employees. Nonqualified Stock
Options may be granted to Employees, Non-Employee Directors and Key Advisors.
5.2.2. The purchase price (the "Exercise Price") of Company
Stock subject to an Option shall be determined by the Committee and may be equal
to, greater than, or less than the Fair Market Value (as defined below) of a
share of Company Stock on the date the Option is granted; provided, however,
that (x) the Exercise Price of an Incentive Stock Option shall be equal to, or
greater than, the Fair Market Value of a share of Company Stock on the date the
Incentive Stock Option is granted and (y) an Incentive Stock Option may not be
granted to an Employee who, at the time of grant, owns stock possessing more
than ten percent of the total combined voting power of all classes of stock of
the Company or any parent or subsidiary of the Company, unless the Exercise
Price per share is not less than 110% of the Fair Market Value of Company Stock
on the date of grant.
5.2.3. If the Company Stock is publicly traded, then the Fair
Market Value per share shall be determined as follows: (x) if the principal
trading market for the Company Stock is a national securities exchange or the
NYSE, AMEX, the Nasdaq National Market and the Nasdaq
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SmallCap Market, the last reported sale price thereof on the relevant date or
(if there were no trades on that date) the latest preceding date upon which a
sale was reported, or (y) if the Company Stock is not principally traded on such
exchange or market, the mean between the last reported "bid" and "asked" prices
of Company Stock on the relevant date, as reported by the OTC Bulletin Board,
the National Daily Quotation Bureau, Inc. or as reported in a customary
financial reporting service, as applicable and as the Committee determines. If
the Company Stock is not publicly traded or, if publicly traded, the Committee
determines that the number of shares of the Company Stock traded on a given day,
the last reported sale price thereof, or, if applicable, the "bid" or "asked"
quotations as set forth above are not indicative of the fair market value of the
Company Stock, the Fair Market Value per share shall be as determined by the
Committee.
5.3. Option Term. The Committee shall determine the term of each
Option. The term of any Option shall not exceed ten years from the date of
grant. However, an Incentive Stock Option that is granted to an Employee who, at
the time of grant, owns stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company, or any parent or
subsidiary of the Company, may not have a term that exceeds five years from the
date of grant.
5.4. Exercisability of Options. Options shall become exercisable in
accordance with such terms and conditions, consistent with the Plan, as may be
determined by the Committee and specified in the Grant Instrument. The Committee
may accelerate the exercisability of any or all outstanding Options at any time
for any reason.
5.5. Termination of Employment, Disability or Death.
5.5.1. Except as provided below, an Option may only be exercised
while the Grantee is employed by, or providing service to, the Company as an
Employee, Key Advisor or member of the Board. In the event that a Grantee ceases
to be employed by, or provide service to, the Company for any reason other than
Disability, death, or termination for Cause, any Option which is otherwise
exercisable by the Grantee shall terminate unless exercised within 90 days after
the date on which the Grantee ceases to be employed by, or provide service to,
the Company (or within such other period of time as may be specified by the
Committee), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the Grantee's
Options that are not otherwise exercisable as of the date on which the Grantee
ceases to be employed by, or provide service to, the Company shall terminate as
of such date.
5.5.2. In the event the Grantee ceases to be employed by, or
provide service to the Company on account of a termination for Cause by the
Company, any Option held by the Grantee shall terminate as of the date the
Grantee ceases to be employed by, or provide service to, the Company. In
addition, notwithstanding any other provisions of this Section 5, if the
Committee determines that the Grantee has engaged in conduct that constitutes
Cause at any time while the Grantee is employed by, or providing service to, the
Company or after the Grantee's termination of employment or service, any Option
held by the Grantee shall immediately terminate, and the Grantee shall
automatically forfeit all shares underlying any exercised portion of an Option
for which the Company has not yet delivered the share certificates, upon refund
by the Company of the Exercise Price paid by the Grantee for such shares. Upon
any exercise of an Option, the Company
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may withhold delivery of share certificates pending resolution of an inquiry
that could lead to a finding resulting in a forfeiture.
5.5.3. In the event the Grantee ceases to be employed by, or
provide service to, the Company because the Grantee is Disabled, any Option
which is otherwise exercisable by the Grantee shall terminate unless exercised
within one year after the date on which the Grantee ceases to be employed by, or
provide service to, the Company (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of
expiration of the Option term. Except as otherwise provided by the Committee,
any of the Grantee's Options which are not otherwise exercisable as of the date
on which the Grantee ceases to be employed by, or provide service to, the
Company shall terminate as of such date.
5.5.4. If the Grantee dies while employed by, or providing service
to, the Company or within 90 days after the date on which the Grantee ceases to
be employed or provide service on account of a termination specified in Section
5(e)(1) above (or within such other period of time as may be specified by the
Committee), any Option that is otherwise exercisable by the Grantee shall
terminate unless exercised within one year after the date on which the Grantee
ceases to be employed by, or provide service to, the Company (or within such
other period of time as may be specified by the Committee), but in any event no
later than the date of expiration of the Option term. Except as otherwise
provided by the Committee, any of the Grantee's Options that are not otherwise
exercisable as of the date on which the Grantee ceases to be employed by, or
provide service to, the Company shall terminate as of such date.
5.5.5. Any of the provisions of this Section 5(e) to the contrary
notwithstanding, no Option shall be exercisable beyond the term specified in the
Grant Instrument.
5.5.6. For purposes of this Section 5(e) and Section 6:
(A) The term "Company" shall mean the Company and its parent and
subsidiary corporations, within the meaning of section 424(f) of the
Code.
(B) "Employed by, or provide service to, the Company" shall mean
employment or service as an Employee, Key Advisor or member of the
Board (so that, for purposes of exercising Options and satisfying
conditions with respect to Restricted Stock, a Grantee shall not be
considered to have terminated employment or service until the Grantee
ceases to be an Employee, Key Advisor and member of the Board), unless
the Committee determines otherwise.
(C) "Disability" shall mean a Grantee's becoming disabled within
the meaning of section 22(e)(3) of the Code.
(D) "Cause" shall mean, except to the extent specified otherwise
by the Committee, a finding by the Committee that the Grantee (i) has
breached his or her employment or service contract with the Company,
(ii) has engaged in disloyalty to the Company, including, without
limitation, fraud, embezzlement, theft, commission of a felony or
proven dishonesty in the course of his or her employment or service,
(iii) has disclosed
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trade secrets or confidential information of the Company to persons not
entitled to receive such information or (iv) has engaged in such other
behavior detrimental to the interests of the Company as the Committee
determines.
5.6. Exercise of Options. A Grantee may exercise an Option that has
become exercisable, in whole or in part, by delivering a notice of exercise to
the Company with payment of the Exercise Price. The Grantee shall pay the
Exercise Price for an Option as specified by the Committee (x) in cash, (y) with
the approval of the Committee, by delivering shares of Company Stock owned by
the Grantee (including Company Stock acquired in connection with the exercise of
an Option, subject to such restrictions as the Committee deems appropriate) and
having a Fair Market Value on the date of exercise equal to the Exercise Price
or by attestation (on a form prescribed by the Committee) to ownership of shares
of Company Stock having a Fair Market Value on the date of exercise equal to the
Exercise Price, or (z) by such other method as the Committee may approve,
including payment through a broker in accordance with procedures permitted by
Regulation T of the Federal Reserve Board. The Committee may authorize loans by
the Company to Grantees in connection with the exercise of an Option, upon the
terms and conditions set forth in Section 5(g) below. Shares of Company Stock
used to exercise an Option shall have been held by the Grantee for the requisite
period of time to avoid adverse accounting consequences to the Company with
respect to the Option. The Grantee shall pay the Exercise Price and the amount
of any withholding tax due (pursuant to Section 7) at the time of exercise.
5.7. Loans and Guarantees. The Committee may, in its discretion,
5.7.1. allow a Grantee to defer (at no less than reasonable
commercial rates) payment to the Company of all or any portion of (a) the
Exercise Price of an option, or (b) any taxes associated with a benefit
hereunder which is not a cash benefit at the time such benefit is so taxable, or
5.7.2. cause the Company to guarantee a loan from a third party to
the Grantee, in an amount equal to all or any portion of such Exercise Price or
any related taxes.
Any such payment deferral or guarantee by the Company pursuant to this Section
5(g) shall be, on a secured or unsecured basis, for such periods, at commercial
interest rates, and on such other terms and conditions as the Committee may
determine. Notwithstanding the foregoing, a Grantee shall not be entitled to
defer the payment of such Exercise Price or any related taxes unless the Grantee
(a) enters into a binding obligation to pay the portion of the Exercise Price or
any related taxes which are deferred and (b) pays upon exercise of an option a
minimum amount, with respect to all shares of Company Stock to be then issued,
equal to the amount determined by resolution of the Committee to be capital
within the meaning of Section 154 of the Delaware General Corporation Law. If
the Committee has permitted a payment deferral or caused the Company to
guarantee a loan pursuant to this Section 5(g), then the Committee may, in its
discretion, require the immediate payment of such deferred amount or the
immediate release of such guarantee in the event the Grantee sells or otherwise
transfers the Grantee's shares of Company Stock purchased pursuant to such
deferral or guarantee.
6
<PAGE>
5.8. Limits on Incentive Stock Options. Each Incentive Stock Option
shall provide that, if the aggregate Fair Market Value of the Company Stock on
the date of the grant with respect to which Incentive Stock Options are
exercisable for the first time by a Grantee during any calendar year, under the
Plan or any other stock option plan of the Company or of a parent or subsidiary
(within the meaning of section 424(f) of the Code), exceeds $100,000, then the
Option, as to the excess, shall be treated as a Nonqualified Stock Option. An
Incentive Stock Option shall not be granted to any person who is not an Employee
of the Company or a parent or subsidiary (within the meaning of section 424(f)
of the Code).
6. Restricted Stock Grants
The Committee may issue or transfer shares of Company Stock to an
Employee, Non-Employee Director or Key Advisor under a Grant of Restricted
Stock, upon such terms as the Committee deems appropriate. The following
provisions are applicable to Restricted Stock:
6.1. General Requirements. Shares of Company Stock issued or
transferred pursuant to Restricted Stock Grants may be issued or transferred for
consideration or for no consideration, and subject to restrictions or no
restrictions, as determined by the Committee. The Committee may establish
conditions under which restrictions on shares of Restricted Stock shall lapse
over a period of time or according to such other criteria as the Committee deems
appropriate. The period of time during which the Restricted Stock will remain
subject to restrictions will be designated in the Grant Instrument as the
"Restriction Period."
6.2. Number of Shares. The Committee shall determine the number of
shares of Company Stock to be issued or transferred pursuant to a Restricted
Stock Grant and the restrictions applicable to such shares.
6.3. Requirement of Employment or Service. If the Grantee ceases to be
employed by, or provide service to, the Company (as defined in Section 5(e))
during a period designated in the Grant Instrument as the Restriction Period, or
if other specified conditions are not met, the Restricted Stock Grant shall
terminate as to all shares covered by the Grant as to which the restrictions
have not lapsed, and those shares of Company Stock must be immediately returned
to the Company. The Committee may, however, provide for complete or partial
exceptions to this requirement as it deems appropriate.
6.4. Restrictions on Transfer and Legend on Stock Certificate. During
the Restriction Period, a Grantee may not sell, assign, transfer, pledge or
otherwise dispose of the shares of Restricted Stock except to a Successor
Grantee under Section 8(a). Each certificate for a share of Restricted Stock
shall contain a legend giving appropriate notice of the restrictions in the
Grant. The Grantee shall be entitled to have the legend removed from the stock
certificate covering the shares subject to restrictions when all restrictions on
such shares have lapsed. The Committee may determine that the Company will not
issue certificates for shares of Restricted Stock until all restrictions on such
shares have lapsed, or that the Company will retain possession of certificates
for shares of Restricted Stock until all restrictions on such shares have
lapsed.
7
<PAGE>
6.5. Right to Vote and to Receive Dividends. During the Restriction
Period, the Grantee shall have the right to vote shares of Restricted Stock and
to receive any dividends or other distributions paid on such shares, subject to
any restrictions deemed appropriate by the Committee.
6.6. Lapse of Restrictions. All restrictions imposed on Restricted
Stock shall lapse upon the expiration of the applicable Restriction Period and
the satisfaction of all conditions imposed by the Committee. The Committee may
determine, as to any or all Restricted Stock Grants, that the restrictions shall
lapse without regard to any Restriction Period.
6.7. Section 83(b) Election. Provided that the Committee has not
prohibited such Grantee from making the following election, if a Grantee shall,
in connection with any grant of Restricted Stock make the election permitted
under section 83(b) of the Code (i.e., an election to include in such Grantee's
gross income in the year of transfer the amounts specified in section 83(b) of
the Code), such Grantee shall notify the Committee of such election within ten
(10) days of filing notice of the election with the Internal Revenue Service, in
addition to any filing and notification required pursuant to regulations issued
under the authority of section 83(b) of the Code.
7. Withholding of Taxes
7.1. Required Withholding. All Grants under the Plan shall be subject
to applicable federal (including FICA), state and local tax withholding
requirements. As a condition to the delivery of shares of Company Stock obtained
pursuant to the exercise of receipt of a Grant, the Company shall require that
the Grantee or other person receiving or exercising Grants pay to the Company
the amount of any federal, state or local taxes that the Company is required to
withhold with respect to such Grants, or the Company may deduct from other wages
paid by the Company the amount of any withholding taxes due with respect to such
Grants.
7.2. Election to Withhold Shares. If the Committee so permits, a
Grantee may irrevocably elect prior to the date on which the payment of
withholding tax amounts is due to satisfy the Company's income tax withholding
obligation with respect to a Grant by having shares withheld up to an amount
that does not exceed the Grantee's minimum applicable withholding tax rate for
federal (including FICA), state and local tax liabilities. The election must be
in a form and manner prescribed by the Committee and may be subject to the prior
approval of the Committee. Moreover, such election may not be made to the extent
that it would result in adverse accounting consequences to the Company with
respect to the withheld shares.
8. Transferability of Grants
8.1. Nontransferability of Grants. Except as provided below, only the
Grantee may exercise rights under a Grant during the Grantee's lifetime. A
Grantee may not transfer those rights except by will or by the laws of descent
and distribution or, with respect to Grants other than Incentive Stock Options,
if permitted in any specific case by the Committee, pursuant to a domestic
relations order (as defined under the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the regulations thereunder). When a
Grantee dies, the personal representative or other person entitled to succeed to
the rights of the Grantee ("Successor Grantee") may exercise such rights. A
Successor Grantee must furnish proof satisfactory to the Company of
8
<PAGE>
his or her right to receive the Grant under the Grantee's will or under the
applicable laws of descent and distribution.
8.2. Transfer of Nonqualified Stock Options. Notwithstanding the
foregoing, the Committee may provide, in a Grant Instrument, that a Grantee may
transfer Nonqualified Stock Options to family members, or one or more trusts or
other entities for the benefit of or owned by family members, consistent with
applicable securities laws, according to such terms as the Committee may
determine; provided that the Grantee receives no consideration for the transfer
of an Option and the transferee agrees that the transferred Option shall
continue to be subject to the same terms and conditions as were applicable to
the Option immediately before the transfer.
9. Change of Control of the Company
As used herein, a "Change of Control" shall be deemed to have occurred
if:
9.1. Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) (other than persons who are stockholders on the effective date
of the Plan) becomes a "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than 50% of the voting power of the then outstanding securities of the
Company; provided that a Change of Control shall not be deemed to occur as a
result of a change of ownership resulting from the death of a stockholder, and a
Change of Control shall not be deemed to occur as a result of a transaction in
which the Company becomes a subsidiary of another corporation and in which the
stockholders of the Company, immediately prior to the transaction, will
beneficially own, immediately after the transaction, shares entitling such
stockholders to more than 50% of all votes to which all stockholders of the
parent corporation would be entitled in the election of directors (without
consideration of the rights of any class of stock to elect directors by a
separate class vote); or
9.2. The stockholders of the Company approve (or, if stockholder
approval is not required, the Board approves) an agreement providing for (i) the
merger or consolidation of the Company with another corporation where the
stockholders of the Company, immediately prior to the merger or consolidation,
will not beneficially own, immediately after the merger or consolidation, shares
entitling such stockholders to more than 50% of all votes to which all
stockholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), (ii) the sale or other disposition of all
or substantially all of the assets of the Company, or (iii) a liquidation or
dissolution of the Company.
10. Consequences of a Change of Control
10.1. Notice and Acceleration. Upon a Change of Control, unless the
Board determines otherwise, (i) the Company shall provide each Grantee with
outstanding Grants written notice of such Change of Control, (ii) outstanding
Options shall automatically accelerate and become fully exercisable and (iii)
the restrictions and conditions on outstanding Restricted Stock shall
immediately lapse.
9
<PAGE>
10.2. Assumption of Grants. Upon a Change of Control where the Company
is not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, all outstanding Options
that are not exercised shall be assumed by, or replaced with comparable options
granted by, the surviving corporation.
10.3. Other Alternatives. Notwithstanding the foregoing, subject to
subsection (d) below, in the event of a Change of Control, the Committee may
take any of the following actions: the Committee may (i) require that Grantees
surrender their outstanding Options in exchange for a payment by the Company, in
cash or Company Stock as determined by the Committee, in an amount equal to the
amount by which the then Fair Market Value of the shares of Company Stock
subject to the Grantee's unexercised Options exceeds the Exercise Price of the
Options, (ii) after giving Grantees an opportunity to exercise their outstanding
Options, terminate any or all unexercised Options at such time as the Committee
deems appropriate, or (iii) determine that all outstanding Options shall
automatically accelerate and become fully exercisable and that the restrictions
and conditions on outstanding Restricted Stock shall immediately lapse. Such
surrender or termination shall take place as of the date of the Change of
Control or such other date as the Committee may specify.
10.4. Limitations. Notwithstanding anything in the Plan to the
contrary, in the event of a Change of Control, the Committee shall not have the
right to take any actions described in the Plan (including without limitation
actions described in Subsection (c) above) that would make the Change of Control
ineligible for pooling of interests accounting treatment or that would make the
Change of Control ineligible for desired tax treatment if, in the absence of
such right, the Change of Control would qualify for such treatment and the
Company intends to use such treatment with respect to the Change of Control.
11. Requirements for Issuance or Transfer of Shares
11.1. Limitations on Issuance or Transfer of Shares.
11.1.1. No Company Stock shall be issued or transferred in
connection with any Grant hereunder unless and until all legal requirements
applicable to the issuance or transfer of such Company Stock have been complied
with to the satisfaction of the Committee. The Committee shall have the right to
condition any Grant made to any Grantee hereunder on such Grantee's undertaking
in writing to comply with such restrictions on his or her subsequent disposition
of such shares of Company Stock as the Committee shall deem necessary or
advisable, and certificates representing such shares may be legended to reflect
any such restrictions. Certificates representing shares of Company Stock issued
or transferred under the Plan will be subject to such stop-transfer orders and
other restrictions as may be required by applicable laws, regulations and
interpretations, including any requirement that a legend be placed thereon.
11.1.2. If based upon the opinion of counsel to the Company, the
Committee determines that the exercise of any Options would violate any
applicable provision of (a) state or federal securities law or (b) the listing
requirements of any securities exchange registered under the Securities Exchange
Act of 1934 (the "Exchange Act") on which are listed any of the Company's equity
securities, then the Committee may postpone any such exercise; provided,
however, that the
10
<PAGE>
Company shall use its best efforts to cause such exercise to comply with all
such provisions at the earliest practicable date; and provided further, that the
Committee's authority under this Section 11(a)(ii) shall expire from and after
the date of any Change of Control.
11.1.3. With respect to officers, directors and 10% stockholders
of the Company subject to Section 16 of the Exchange Act, transactions under the
Plan are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision of the Plan or
action by the Board or the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Board and
the Committee.
11.2. Lock-Up Period. If so requested by the Company or any
representative of the underwriters (the "Managing Underwriter") in connection
with any registration of the offering of any securities of the Company under the
Securities Act of 1933, as amended (the "Securities Act"), a Grantee (including
any successor or assigns) shall not sell or otherwise transfer any shares or
other securities of the Company during the 180-day period following the
effective date of a registration statement of the Company filed under the
Securities Act (or such other period as may be requested in writing by the
Managing Underwriter and agreed to in writing by the Company) (the "Market
Standoff Period"). Such restriction shall apply only to the first registration
statement of the Company to become effective under the Securities Act that
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Securities Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.
12. Substituted Options. If the Committee cancels, with the consent of
a Grantee, any Option granted under the Plan, and a new Option is substituted
therefor, then the Committee may, in its discretion, provide that the grant date
of the canceled Option shall be the date used to determine the earliest date or
dates for exercising or disposing of the new substituted Option under Section
5(d) hereof so that the Grantee may exercise or dispose of the substituted
Option at the same time as if the Grantee had held the substituted Option since
the grant date of the canceled Option; provided, however, that no Grantee who
for purposes of Section 16 of the Act is treated as an officer, director or 10%
stockholder of the Company may dispose of a substituted Exchange Option, within
less than six months after the grant date (calculated without reference to this
Section 12).
13. Amendment and Termination of the Plan
13.1. Amendment. The Board may amend or terminate the Plan at any time;
provided, however, that the Board shall not amend the Plan without stockholder
approval if such approval is required in order for Incentive Stock Options
granted or to be granted under the Plan to meet the requirements of section 422
of the Code or such approval is required in order to exempt compensation under
the Plan from the deduction limit under section 162(m) of the Code.
13.2. Termination of Plan. The Plan shall terminate on the day
immediately preceding the tenth anniversary of its effective date, unless the
Plan is terminated earlier by the Board or is extended by the Board with the
approval of the stockholders.
11
<PAGE>
13.3. Termination and Amendment of Outstanding Grants. A termination or
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents or unless the Board
acts under Section 19(b). The termination of the Plan shall not impair the power
and authority of the Board with respect to an outstanding Grant. Whether or not
the Plan has terminated, an outstanding Grant may be terminated or amended under
Section 19(b) or may be amended by agreement of the Company and the Grantee
consistent with the Plan.
13.4. Governing Document. The Plan shall be the controlling document.
No other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
14. Funding of the Plan
This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Grants under this Plan. In no event shall
interest be paid or accrued on any Grant, including unpaid installments of
Grants.
15. Rights of Participants
Nothing in this Plan shall entitle any Employee, Key Advisor,
Non-Employee Director or other person to any claim or right to be granted a
Grant under this Plan. Neither this Plan nor any action taken hereunder shall be
construed as giving any individual any rights to be retained by or in the employ
of the Company or any other employment rights or to limit the Company's right or
the right of any of its subsidiaries to modify, amend or terminate any of its
employee benefit plans.
16. No Fractional Shares
No fractional shares of Company Stock shall be issued or delivered
pursuant to the Plan or any Grant. The Committee shall determine whether cash,
other awards or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.
17. Headings
Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.
18. Effective Date of the Plan
Subject to approval by the Company's stockholders, the Plan shall be
effective on and as of February 1, 2000.
12
<PAGE>
19. Miscellaneous
19.1. Grants in Connection with Corporate Transactions and Otherwise.
Nothing contained in this Plan shall be construed to (i) limit the
right of the Committee to make Grants under this Plan in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business or assets of any corporation, firm or association, including Grants to
employees thereof who become Employees of the Company, or for other proper
corporate purposes, or (ii) limit the right of the Company to grant stock
options or make other awards outside of this Plan. Without limiting the
foregoing, the Committee may make a Grant to an employee of another corporation
who becomes an Employee by reason of a corporate merger, consolidation,
acquisition of stock or property, reorganization or liquidation involving the
Company or any of its subsidiaries in substitution for a stock option or
restricted stock grant made by such corporation. The terms and conditions of the
substitute grants may vary from the terms and conditions required by the Plan
and from those of the substituted stock incentives. The Committee shall
prescribe the provisions of the substitute grants.
19.2. Compliance with Law. The Plan, the exercise of Options and the
obligations of the Company to issue or transfer shares of Company Stock under
Grants shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. In addition,
it is the intent of the Company that the Plan and applicable Grants under the
Plan comply with the applicable provisions of section 162(m) of the Code and
section 422 of the Code. To the extent that any legal requirement of section 16
of the Exchange Act or section 162(m) or 422 of the Code as set forth in the
Plan ceases to be required under section 16 of the Exchange Act or section
162(m) or 422 of the Code, that Plan provision shall cease to apply. The
Committee may revoke any Grant if it is contrary to law or modify a Grant to
bring it into compliance with any valid and mandatory government regulation. The
Committee may also adopt rules regarding the withholding of taxes on payments to
Grantees. The Committee may, in its sole discretion, agree to limit its
authority under this Section.
19.3. Governing Law. The validity, construction, interpretation and
effect of the Plan and Grant Instruments issued under the Plan shall be governed
and construed by and determined in accordance with the laws of the State of
Delaware, without giving effect to the conflict of laws provisions thereof.
19.4. Stockholder Rights. A Grantee shall not, by reason of any Option
granted hereunder, have any right as a stockholder of the Company with respect
to the shares of Company Stock which may be deliverable upon exercise of such
Option until such shares have been delivered to him or her.
19.5. Nature of Payments. Any and all grants of Options, payments of
cash, or deliveries of shares of Company Stock hereunder shall constitute
special incentive payments to the Grantee and shall not b taken into account in
computing the amount of salary or compensation of the Grantee for the purposes
of determining any pension, retirement, death or other benefits under any
pension, retirement, profit-sharing, bonus, life insurance or other employee
benefit plan of the Company or
13
<PAGE>
any of its subsidiaries or any agreement between the Company or any subsidiary,
on the one hand, and the Grantee, on the other hand, except as such plan or
agreement shall otherwise expressly provide.
19.6. Non-Uniform Determinations. The Committee's determination under
the Plan need not be uniform and may be made by the Committee selectively among
persons who receive, or are eligible to receive, Grants under the Plan (whether
or not such persons are similarly situated).
14
<PAGE>
Exhibit 21.1
Subsidiaries of I-Trax.com, Inc.
NONE.
<PAGE>
Exhibit 23.1
I-Trax.com, Inc.
12020 Sunrise Valley Drive
Suite 350
Reston, VA 20191
We hereby consent to the use in the Form 10-SB Registration Statement of
I-Trax.com, Inc., our report dated March 13, 2000, except for note 10-c as to
which the date is April 4, 2000 relating to the financial statements of
I-Trax.com, Inc. incorporated in such Form 10-SB Registration Statement.
Massella, Tomaro & Co., LLP
Jericho, New York
April 10, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Balance
Sheet, Statement of Operations, Statement of Cash Flows and Notes thereto
incorporated in Part 2, of this Form 10-SB and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 195,728
<SECURITIES> 0
<RECEIVABLES> 412,038
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 632,536
<PP&E> 36,120
<DEPRECIATION> 0
<TOTAL-ASSETS> 708,818
<CURRENT-LIABILITIES> 296,126
<BONDS> 0
0
0
<COMMON> 16,028
<OTHER-SE> 396,664
<TOTAL-LIABILITY-AND-EQUITY> 708,818
<SALES> 987,533
<TOTAL-REVENUES> 996,704
<CGS> 374,132
<TOTAL-COSTS> 374,132
<OTHER-EXPENSES> 1,183,955
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 258
<INCOME-PRETAX> (561,641)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (561,641)
<EPS-BASIC> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
