Document:

Exhibit
10.5

 

EMPLOYMENT AGREEMENT

 

This Agreement, dated as of August 22, 2003, is
between Interactive Health, Inc., a Delaware corporation, (together with its
subsidiaries whether currently existing or hereafter acquired or formed, “IH”),
and Thomas Dragotto (“Executive”).  IH and Executive agree to the following terms
and conditions of employment.

 

1.                                       PERIOD OF EMPLOYMENT.  IH shall continue to employ Executive to
render services to IH in the position and with the duties and responsibilities
described in Section 2 for the period commencing on the date of this
Agreement and ending on the date three (3) years after the date hereof (such
period, the “Period of Employment”); provided that the Period of
Employment shall automatically be renewed on the same terms and conditions set
forth herein as modified from time to time by the parties hereto for additional
one (1) year periods beginning on the date three years after the date hereof,
unless either party shall have given the other party written notice of the election
not to renew the Period of Employment at least ninety (90) days prior to any
such renewal date (the “Non-Renewal Notice”), such procedure to be
followed in each successive period; provided further that the Period of
Employment is subject to early termination as provided in Section 4
hereof.

 

2.                                       POSITION AND
RESPONSIBILITIES.

 

(a)                                  Position.  During the Period of Employment, Executive
shall serve as Chief Financial Officer of IH, and in
such other executive capacities as may be requested from time to time by the
Board of Directors of IH (the “Board”) or a duly authorized committee
thereof.  Executive shall perform such
duties as are customarily associated with his position, consistent with the
Bylaws of IH and as reasonably required by the Board.  Executive shall render such other services
for IH and its Affiliates as IH may from time to time reasonably request and as
shall be consistent with the duties Executive is to perform for IH and with
Executive’s experience.  An “Affiliate”
shall include any person or entity that directly or indirectly controls, is
controlled by, or is under common control with IH, any successor entity, and
any assignees of IH (but, for the avoidance of doubt, the term “Affiliate” as
used herein shall specifically exclude any so-called “portfolio companies” of
Whitney & Co., LLC other than IH and its subsidiaries).

 

(b)                                 Full Time and Best Efforts.  During the Period of Employment, Executive
shall devote his best efforts and full-time attention to the performance of his
duties.  Executive shall be subject to
the direction of IH, which shall retain full control of the means and methods
by which he performs the above services and of the place(s) at which all
services are rendered.  Executive shall
be expected to travel if necessary or advisable in order to meet the
obligations of his position.

 

(c)                                  Other Activity.  Except with the prior written consent of IH,
during the Period of Employment Executive shall not (i) accept any other
employment; or (ii) engage, directly or indirectly, in any other business,
commercial, or professional activity (whether or not pursued for pecuniary
advantage) that is or may be competitive with IH, that might create a conflict
of interest with IH, or that otherwise might interfere with the business of IH,
or any Affiliate or that might interfere with the performance of Executive’s duties hereunder.

 

 

(d)                                 Company Policies.  The employment relationship between the
parties shall be governed by the general employment policies and practices of
IH, including but not limited to those relating to protection of confidential
information and assignment of inventions, except that when the terms of this
Agreement differ from or are in conflict with IH’s
general employment policies or practices, this Agreement shall control.

 

3.                                       COMPENSATION AND
BENEFITS.

 

(a)                                  Base Salary.  In consideration of the services to be
rendered under this Agreement, IH shall pay Executive One Hundred Sixty
Thousand Dollars ($160,000) per year (“Base Salary”), payable bi-weekly
(i.e., once every two weeks), pursuant to the procedures regularly established,
and as they may be amended, by IH in its sole discretion, during the Period of
Employment.  All compensation and
comparable payments to be paid to Executive under this Agreement shall be less
withholdings required by law.  The Base
Salary will be reviewed by and shall be subject to upward adjustment at the
sole discretion of the Board each year during the term of this Agreement.

 

(b)                                 Bonus.  Executive will be eligible to receive an
annual bonus (the “Bonus”) for each calendar year during the Period of
Employment at the discretion of the Compensation Committee of the Board and the
Chief Executive Officer of IH.  The Bonus
payable in respect of any given year during the Period of Employment shall be
paid within 30 days following the delivery of IH’s
annual audited financial statements for such year (and in any event no later
than March 31 in any such following year). 
Except as specifically provided in Section 4 hereof, if Executive’s
employment with IH shall terminate for any reason whatsoever prior to the end
of any calendar year, Executive shall not be entitled to a Bonus for such
calendar year.

 

(c)                                  Benefits.  Executive shall be entitled to vacation leave
in accordance with IH’s standard policies.  As Executive becomes eligible, he shall have
the right to participate in and to receive benefits from all present and future
benefit plans specified in IH’s policies and
generally made available to similarly situated employees of IH.  Executive’s eligibility to receive benefits
under any such benefit plan, and the amount and extent of benefits to which
Executive is entitled under such benefit plan, shall be governed by the
specific benefit plan, as amended by the IH from time to time.  Executive also shall be entitled to any
benefits or compensation tied to termination of employment as described in
Section 4.  IH reserves the right,
in its sole discretion, to adjust Executive’s benefits provided under this
Agreement.  No statement concerning
benefits or compensation to which Executive is entitled shall alter in any way
the term of this Agreement, any renewal thereof, or its termination.

 

(d)                                 Expenses.  IH shall reimburse Executive for reasonable
travel and other business expenses incurred by Executive in the performance of
his duties, in accordance with IH’s policies, as they
may be amended in IH’s sole discretion and subject to
IH’s requirements with respect to reporting and
documentation of such expenses.

 

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(e)                                  Nonqualified Stock
Options.

 

(1)                                  As additional compensation
for his services hereunder, promptly after the date of Closing but no later
than November 1, 2003, IH shall grant to Executive pursuant to a Stock
Option Plan to be adopted by IH (the “Plan”) the following stock options
(each, an “Option”) to purchase shares (“Option
Shares”) of Common Stock, $.01 par value per share, of IH (the “Common
Stock”) at the exercise price per share set forth
herein (the “Exercise Price”), subject to the terms, definitions
and provisions of this Agreement and the Plan:

 

(A)                              an Option to purchase 16,895 shares of Common Stock at an
Exercise Price equal to $10.00 per share;

 

(B)                                an Option to purchase 8,448 shares of Common Stock at  an Exercise Price equal to $20.00 per share;

 

(C)                                an Option to purchase 8,448 shares of Common Stock at  an Exercise Price equal to $30.00 per share.

 

(2)                                  The
Options are not intended to qualify as Incentive Stock Options as defined in
Section 422 of the Code (as defined in the Plan).  So long as the Period of Employment has not
terminated, each Option shall vest in accordance with the following
schedule:  20% of the number of Option
Shares issuable upon the exercise thereof shall vest
on the one-year anniversary of the date of grant of such Option (the “Vesting Commencement Date”) and the remaining Option Shares issuable
upon the exercise of such Option shall vest in 16 equal quarterly installments
commencing on the date that is fifteen months after the Vesting Commencement
Date and continuing and the end of each three month period thereafter.  Vesting of all Options shall cease at such
time as the Period of Employment terminates or expires for any reason
whatsoever.  One half of each unvested
installment of each Option shall automatically vest on the date that an
Organic Transaction shall occur (provided that Executive remains employed by IH
on such date of occurrence of the Organic Transaction), and the balance of each
such installment shall remain subject to the vesting schedule set forth
above.  For purposes of this Agreement, “Organic
Transaction” means (x) the sale, lease, exchange, transfer or other
disposition (including, without limitation, by merger, consolidation or
otherwise) of assets constituting all or substantially all of the assets of IH,
taken as a whole, (y) any merger, consolidation or other business combination
or refinancing or recapitalization (other than by
reason of a sale by the Company of its Common Stock pursuant to a registration
statement on Form S-l or otherwise under the Securities Act of 1933, as
amended) that results in the holders of the issued and outstanding voting
securities of IH immediately prior to such transaction beneficially owning or
controlling less than a majority of the outstanding voting securities of the
continuing or surviving entity immediately following such transaction, and/or
(z) any person or persons acting together or which would constitute a “group”
for the purposes of Section 13(d) of the Exchange Act, together or with
any Affiliates thereof, other than any of the holders of the Common Stock and
the holders of the Convertible Preferred Stock, as of the date on which the
first share of Convertible Preferred Stock is issued, and their respective
Affiliates, “beneficially owning” (as defined in Rule 13d-3 of the Exchange
Act) or controlling, directly or indirectly, at least 50% of the total voting
power of all classes of capital stock entitled to vote generally in the
election of the members of the Board of IH.

 

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(3)                                  Upon termination or
expiration of the Period of Employment pursuant to Section 4, all vesting
of the Options shall cease and Executive (or, in the case of termination
pursuant to Section 4(d), his estate or a person who acquired the right to
exercise the Options by bequest or inheritance) may, but only within ninety
(90) days after such date of termination or expiration (and in no event later
than the expiration date of an Option), exercise any or all of Executive’s
Options to the extent Executive was entitled to exercise any or all such
Options at such date of termination or expiration, but only as to the number of
Option Shares of any such Option that have become vested on such date in excess
of the number of Option Shares for which any such Option has theretofore been
exercised.  To the extent that Executive
was not entitled to exercise any Option on the date of termination, or does not
exercise such an Option to the extent so entitled within the time specified in
this Section 3(f)(3), the Option shall terminate.  All Options not exercised prior to the tenth
(10th) anniversary of the date of grant thereof shall then expire.

 

(4)                                  Executive may exercise an
Option to the extent that it has vested by delivering written notice to IH approved
for such purpose by IH, which shall state the election to exercise the Option,
the number of Option Shares in respect of which the Option is being exercised,
and such other representations and agreements as to Executive’s investment
intent with respect to the Option Shares as may be required by IH pursuant to
the provisions of the Plan or otherwise. 
Such written notice shall be signed by Executive (and, if Executive is
married, Executive’s spouse) and shall be delivered in person or by certified
mail to the Secretary of IH.  The written
notice shall be accompanied by payment of the Exercise Price and any applicable
withholding tax obligation.  No Option
Shares will be issued pursuant to the exercise of an Option unless such
issuance and exercise shall comply with all relevant provisions of applicable
law, including the requirements of any stock exchange upon which the Options
Shares may then be listed.

 

(5)                                  The Options to be granted
pursuant hereto will be subject to, and Executive agrees to be bound by, all of
the terms and provisions of the Plan as the same may be  adopted by the Company or may be
amended from time to time in accordance with the terms thereof, and shall in
all respects be interpreted in accordance therewith.  In the event of any conflict between the
terms of this Agreement and the terms of the Plan, the terms of the Plan shall
be controlling.  The Committee (as
defined in the Plan) shall interpret and construe the Plan and this Agreement
with respect to Options granted hereunder, and any action, decision,
interpretation or determination made in good faith by the Committee shall be
final and binding on IH and Executive. 
In addition, such Options will be subject to terms as determined by the
Committee.

 

(6)                                  Except as set forth above in
paragraph 3(e)(5), unless required to comply with applicable law or exchange
requirements, no amendment of the Plan adopted after the date of grant of the
Options shall be effective as to the Options without Executive’s consent
insofar as it may adversely affect his rights hereunder.  The Committee in its discretion may amend
this Section 3(f) only with Executive’s consent, except that no consent
shall be required to the extent any such amendment is not materially adverse to
Executive.

 

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4.                                       TERMINATION OF
EMPLOYMENT.

 

(a)                                  By Employer Not For Cause.

 

(1)                                  At any time, IH may
terminate Executive without Cause (as defined below), effective as of the date
specified in a written notice from IH to Executive.  IH may discipline Executive with or without
Cause and with or without prior notice. 
IH may discipline or dismiss Executive as provided in this
Section 4 notwithstanding anything to the contrary contained in or arising
from any statements, policies or practices of IH relating to the employment,
discipline or termination of its employees. 
If Executive’s employment with IH is terminated by IH without Cause,
Executive shall be entitled to receive all Base Salary through the date of
termination and any accrued and unpaid Bonus for any fiscal year of IH which
ended prior to the date of termination, subject to withholding deductions and
any other amounts IH is required to withhold or deduct by applicable law.  In addition, Executive shall be entitled to
the following severance payments (the “Severance Package”):

 

(A)                              a portion of the Bonus that
would accrue at the end of the calendar year of IH in which such termination
occurs, determined pro rata by the percentage of the year worked (the
percentage represented by the number of full months employed in the current
year divided by twelve) multiplied by the amount of Bonus determined as
provided in Section 3(b) at the end of the calendar year in which such
termination occurs;

 

(B)                                equal monthly installments of
his Base Salary, payable in accordance with normal payroll practices,
commencing on the date of termination for a period of six (6) months
thereafter, or until Executive obtains other employment (but with it being
understood that Executive shall be under no duty to seek alternative employment
during the Severance Period), whichever first occurs (the “Severance Period”);

 

(C)                                the continuation of health
benefits, to the extent that the same are available under policies held by the
Company, during the Severance Period; and

 

(D)                               reimbursement of outstanding
business related expenses through date of termination.

 

(2)                                  Provided that if IH shall
pay to Executive the Severance Package at the times and to the extent as herein
provided, Executive agrees that he will provide, from such location or
locations and times as Executive may select, up to 10 hours of consulting
services per month to IH for a period of twelve (12) months after the date of
termination (the “Consulting Period”).  Executive agrees that, during the
Consulting Period, he will not, without the prior consent of IH, directly or
indirectly, have an interest in, be employed by, or be connected with, as an
employee, consultant, officer, director, partner, stockholder or joint venturer, in any person or entity owning, managing,
controlling, operating or otherwise participating or assisting in any business
which is in competition with the business of IH in any jurisdiction identified
in Exhibit B attached hereto; provided, however, that
the foregoing shall not prevent Executive from being a stockholder of less than
1% of the issued and outstanding securities of any class of a corporation
listed on a national securities exchange or designated as national market
system securities on an interdealer quotation system
by the National Association of Securities Dealers,

 

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Inc.  Notwithstanding anything herein to the
contrary, this Section 4(a)(2) shall be governed by the law of the
jurisdiction in which the alleged prohibited activity occurred.  For the avoidance of doubt, the parties
acknowledge that the applicability of the immediately preceding sentence may
result in the application of a different law for each jurisdiction in which the
alleged violations of this Section 4(a)(2) occurred.

 

(3)                                  IH shall not be obligated to
pay any termination payments under Section 4(a) above if Executive
breaches the provisions of this Section 4 or Sections 5, 6 or 7 below.

 

(b)                                 By Employer For Cause.  At any time, and without prior notice (except
as otherwise provided in the definition of Cause set forth below), IH may
terminate Executive for Cause and the Period of Employment shall be deemed to
have ended as of the date Executive ceases to be employed by IH.  IH shall pay Executive all compensation then
due and owing; thereafter, all of IH’s obligations
under this Agreement shall cease.  IH
shall have no further obligation to pay severance of any kind whether under
this Agreement or otherwise nor to make any payment in lieu of notice.  For purposes of this Agreement, “Cause”
shall mean the occurrence or existence of any of the following with respect to
Executive, as determined by a majority of the disinterested directors of the
Board:  (i) unsatisfactory
performance of Executive’s duties or responsibilities as determined by the
Board, provided that IH has given Executive written notice specifying the
unsatisfactory performance of his duties and responsibilities; (ii) a
material breach by Executive of any of his material obligations hereunder which
remains uncured after the lapse of thirty (30) days following the date that IH
has given Executive written notice thereof; (iii) a material breach by
Executive of his duty not to engage in any transaction that represents,
directly or indirectly, self-dealing with IH or any of its Affiliates which has
not been approved by a majority of the disinterested directors of the Board or
of the terms of his employment; (iv) any act of misappropriation,
embezzlement, intentional fraud or similar conduct involving IH or any of its
Affiliates; (v) the conviction or the plea of nolo  contendere or the equivalent in
respect of a felony involving moral turpitude; (vi) intentional infliction
of any damage of a material nature to any property of IH or any of its
Affiliates; or (vii) the repeated non-prescription abuse of any controlled
substance or the repeated abuse of alcohol or any other non-controlled
substance which, in any case described in this clause, the Board reasonably
determines renders Executive unfit to serve in his capacity as an officer or
employee of IH or its Affiliates.

 

(c)                                  By Employee.  At any time, Executive may terminate his
employment for any reason, with or without cause, by providing IH fourteen (14)
days’ advance written notice.  IH shall
have the option, in its complete discretion, to make Executive’s termination
effective at any time prior to the end of such notice period.  IH shall pay Executive all compensation then
due and owing; thereafter, all of IH’s obligations
under this Agreement shall cease.  IH
shall have no further obligation to pay severance of any kind whether under
this Agreement or otherwise.

 

(d)                                 Termination Upon Death or
Permanent Disability.  Executive’s
employment with IH shall also terminate upon Executive’s death or permanent
mental or physical disability or other incapacity (as determined by the Board
in its good faith judgment).  The Period
of Employment shall be deemed to have ended as of the date Executive ceases to
be employed by IH.  Upon any such
termination, IH shall pay Executive (or Executive’s estate or legal

 

6

 

representative or
guardian) all compensation then due and owing; thereafter, all of IH’s obligations under this Agreement shall cease.  IH shall have no further obligation to pay
severance of any kind whether under this Agreement or otherwise nor to make any
payment in lieu of notice.

 

(e)                                  Non-Renewal Notice.  If pursuant to Section 1 hereof IH
provides Executive with a Non-Renewal Notice (i) the Period of Employment shall
expire pursuant to the terms of Section 1 hereof, and (ii) all of IH’s obligations under this Agreement shall cease and IH
shall have no further obligation to pay severance of any kind whether under
this Agreement or otherwise.

 

(f)                                    Termination of Compensation.  Except as otherwise expressly provided herein
or under any specific written policy or benefit plan of IH or as expressly
required under applicable law (such as COBRA), upon termination or expiration
of the Period of Employment (i) all of Executive’s rights to salary, bonuses,
employee and other benefits and other compensation hereunder which would have
accrued or become payable shall cease and (ii) no other severance compensation
or retirement benefits shall be payable by IH to Executive.

 

(g)                                 General Release and
Absence of Breach.  Executive shall
not be entitled to receive any payments, benefits or other compensation under
this Section 4 unless and until Executive has executed and delivered to IH
the General Release substantially in form and substance as set forth in Exhibit
A attached hereto, and then only for so long as Executive has not revoked
or breached the provisions of the General Release or breached the provisions of
Sections 5, 6 and 7 hereof or breached the provisions of any other agreement
between Executive and IH or any of its Affiliates and does not apply for
unemployment compensation chargeable to IH during the Severance Period.

 

(h)                                 No Mitigation.  Except as specifically set forth herein, the
payments required to be paid to Executive by IH pursuant to this Section 4
shall not be reduced by or mitigated by amounts which Executive earns or is
capable of earning during any period following termination of Executive’s
employment.

 

(i)                                     Termination
Obligations.

 

(1)                                  Executive
agrees that all property, including, without limitation, all equipment,
tangible Proprietary Information (as defined below), documents, books, records,
reports, notes, contracts, lists, computer disks (and other computer-generated
files and data), and copies thereof, created on any medium and furnished to,
obtained by, or prepared by Executive in the course of or incident to his
employment, belongs to IH and shall be returned promptly to IH upon termination
of the Period of Employment.

 

(2)                                  Upon
termination of the Period of Employment, Executive shall be deemed to have
resigned from all offices and directorships then held with IH or any Affiliate.

 

(3)                                  The
representations and warranties contained in this Agreement and Executive’s
obligations under this Section 4(i) shall survive the termination of the
Period of Employment and the expiration of this Agreement.

 

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(j)                                     For sixty (60) days
following any termination of the Period of Employment, Executive shall
cooperate in a reasonable manner with IH in all matters relating to the winding
up of pending work on behalf of IH and the orderly transfer of work to other
employees of IH.  Executive shall also
cooperate from time to time during and after the expiration of such 60-day period
in the defense of any action brought by any third party against IH that relates
in any way to Executive’s acts or omissions while employed by IH.  This specifically excludes claims for
indemnification for all necessary expenditures and losses arising out of or
resulting from third party actions relating to Executive’s performance or
discharge of employment duties by Executive. 
The above required time by Executive will be a reasonable amount of
time, at reasonable times, subject to Executive’s other commitments.

 

5.                                       PROPRIETARY
INFORMATION OBLIGATIONS.  During the
term of employment under this Agreement, Executive will have access to and
become acquainted with IH’s and its Affiliates’
confidential and proprietary information, including, but not limited to,
information or plans regarding IH’s and its
Affiliates’ customer relationships, personnel, or sales, marketing, and
financial operations and methods; trade secrets; formulas; devices; secret
inventions; processes; and other compilations of information, records, and
specifications (collectively “Proprietary Information”).  Executive shall not disclose any of IH’s or its Affiliates’ Proprietary Information directly or
indirectly, or use it in any way, either during the term of this Agreement or
at any time thereafter, except as required in the course of his employment for
IH or as authorized in writing by IH. 
All memoranda, notes, plans, files, records, reports, documents,
computer-recorded information, printouts, software, drawings, specifications,
equipment and similar items relating to the Proprietary Information, Work
Product (as defined below) or the business of IH or its Affiliates, whether
prepared by Executive or otherwise coming into his possession or under his
control, shall remain the exclusive property of IH or its Affiliates, as the
case may be, and shall not be removed from the premises of IH under any
circumstances whatsoever without the prior written consent of IH, except when
(and only for the period) necessary to carry out Executive’s duties hereunder,
and if removed shall be immediately returned to IH upon any termination of his
employment; provided, however, that Executive may retain copies
of documents reasonably related to his interest as a stockholder and any
documents that were personally owned, which copies and the information
contained therein Executive agrees not to use for any business purpose.  Notwithstanding the foregoing, Proprietary
Information shall not include (i) information which is or becomes
generally public knowledge or public other than as a result of Executive’s acts
or omissions in violation of this Agreement and (ii) information that may
be required to be disclosed by applicable law.

 

6.                                       INVENTIONS AND
PATENTS.  Executive acknowledges that
all inventions, innovations, improvements, developments, methods, designs,
analyses, drawings, reports and all similar or related information (whether or
not patentable) which relate to any of IH’s actual or anticipated business, research and
development or existing or future products or services and which are conceived,
developed or made by Executive while employed by IH (“Work Product”)
belong to IH.  Executive will promptly
disclose such Work Product to IH and perform all actions requested by IH
(whether during or after employment) to establish and confirm such ownership
(including without limitation, assignments, consents, powers of attorney and
other instruments).

 

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7.                                       NONINTERFERENCE;
NONCOMPETITION.

 

(a)                                  In further consideration of
the compensation to be paid to Executive hereunder and IH’s
repurchase of Executive’s Shares upon termination or expiration of the Period
of Employment (if applicable), Executive acknowledges that in the course of his
employment with IH he has and will continue to become familiar with IH’s trade secrets and with other Proprietary Information
concerning IH and that his services shall be of special, unique and
extraordinary value to IH.  Therefore,
Executive agrees that, during the Period of Employment and thereafter for the
greater of (i) twelve (12) months or (ii) the Severance Period:

 

(1)                                  Executive
will not directly or indirectly solicit any business involving or similar to
any existing or planned products marketed by IH from any person or organization
which is, or has been, a customer of IH;

 

(2)                                  Executive
will not request or advise any customer, bona fide prospective customer,
supplier, licensee, licensor, landlord or other business relation of IH or any
Affiliate to withdraw, curtail or cancel its business dealings with IH or any
Affiliate (including making any negative statements or communications about IH
or any of its Affiliates); and

 

(3)                                  Executive
will not directly or indirectly recruit, hire, solicit or attempt to solicit
(other than through advertisements or general solicitations) any person who was
an employee of IH or any of its Affiliates at any time during the six-month
period immediately prior to the date on which such hiring would take place, or
encourage or otherwise cause any employee of IH or any Affiliate to terminate
his or her employment in order to become an employee, consultant or independent
contractor to or for any other employer.

 

(b)                                 In further consideration of
the compensation to be paid to Executive hereunder and IH’s
repurchase of Executive’s Shares upon termination or expiration of the Period
of Employment (if applicable), Executive agrees that, during the Period of
Employment and for a period of twelve (12) months after the termination of such
Period of Employment, he will not, without the prior consent of IH, directly or
indirectly, have an interest in, be employed by, or be connected with, as an
employee, consultant, officer, director, partner, stockholder or joint venturer, in any person or entity owning, managing, controlling,
operating or otherwise participating or assisting in any business which is in
competition with the business of IH (i) during the Period of Employment,
in any location, and (ii) for the twelve (12) month period following the
termination of the Period of Employment, in any jurisdiction identified in Exhibit B
attached hereto; provided, however, that the foregoing shall not
prevent Executive from being a stockholder of less than 1% of the issued and
outstanding securities of any class of a corporation listed on a national
securities exchange or designated as national market system securities on an interdealer quotation system by the National Association of
Securities Dealers, Inc.  Notwithstanding
anything herein to the contrary, this Section 7 shall be governed by the
law of the jurisdiction in which the alleged prohibited activity occurred.  For the avoidance of doubt, the parties
acknowledge that the applicability of the immediately preceding sentence may
result in the application of a different law for each jurisdiction in which the
alleged violations of this Section 7 occurred.

 

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(c)                                  If Executive breaches, or
threatens to commit a breach of, any of the provisions of this Section 7,
IH shall be entitled, in addition to all other available rights and remedies,
to withhold any of the amounts agreed to be paid to Executive hereunder and IH
shall also be entitled to terminate his employment status hereunder and the
provision of any benefits and compensation conditioned upon such status.  If, at the time of enforcement of this
Section 7, a court shall hold that the duration or scope restrictions
stated herein are unenforceable under circumstances then existing, the parties
agree that the maximum duration or scope that is enforceable under such
circumstances shall be substituted for the stated duration or scope and that
the court shall be allowed to revise the restrictions contained herein to cover
the maximum period and scope permitted by law.

 

8.                                       ARBITRATION.

 

(a)                                  Arbitrable
Claims.  To the fullest extent
permitted by law, all disputes between Executive (and his attorneys,
successors, and assigns) and IH (and its Affiliates, stockholders, directors,
officers, employees, agents, successors, attorneys, and assigns) of any kind
whatsoever, including, without limitation, all disputes relating in any manner
to the employment or termination of Executive, and all disputes arising under
this Agreement (“Arbitrable Claims”)
shall be resolved by arbitration.  All
persons and entities specified in the preceding sentence (other than IH and
Executive) shall be considered third-party beneficiaries of the rights and
obligations created by this Section on Arbitration.  Arbitrable Claims
shall include, but are not limited to, contract (express or implied) and tort
claims of all kinds, as well as all claims based on any federal, state, or
local law, statute, or regulation, excepting only claims under applicable
workers’ compensation law and unemployment insurance claims.  By way of example and not in limitation of
the foregoing, Arbitrable Claims shall include (to
the fullest extent permitted by law) any claims arising under Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, and the California Fair Employment and Housing
Act, as well as any claims asserting wrongful termination, harassment, breach
of contract, breach of the covenant of good faith and fair dealing, negligent
or intentional infliction of emotional distress, negligent or intentional
misrepresentation, negligent or intentional interference with contract or
prospective economic advantage, defamation, invasion of privacy, and claims
related to disability.

 

(b)                                 Procedure.  Arbitration of Arbitrable
Claims shall be in accordance with the then-current National Rules for the
Resolution of Employment Disputes of the American Arbitration Association, as
amended (“AAA Employment Rules”), as augmented in this Agreement.  Arbitration shall be initiated as provided by
the AAA Employment Rules, although the written notice to the other party
initiating arbitration shall also include a statement of the claim(s) asserted
and the facts upon which the claim(s) are based.  Arbitration shall be final and binding upon
the parties and shall be the exclusive remedy for all Arbitrable
Claims.  Judgment on the award may be
entered in any court having jurisdiction. 
Either party may bring an action in court to compel arbitration under
this Agreement and to enforce an arbitration award.  Otherwise, neither party shall initiate or
prosecute any lawsuit or administrative action in any way related to any Arbitrable Claim. 
Notwithstanding the foregoing, either party may, at its option, seek
injunctive relief pursuant to section 1281.8 of the California Code of
Civil Procedure.  All arbitration
hearings under this Agreement shall be conducted in Los Angeles County.  The decision of the arbitrator shall be in writing
and shall include a statement of the essential

 

10

 

conclusions and
findings upon which the decision is based. 
THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN
REGARD TO ARBITRABLE CLAIMS, INCLUDING WITHOUT LIMITATION ANY RIGHT TO TRIAL BY
JURY AS TO THE MAKING, EXISTENCE, VALIDITY, OR ENFORCEABILITY OF THE AGREEMENT
TO ARBITRATE.

 

(c)                                  Arbitrator Selection and
Authority.  All disputes involving Arbitrable Claims shall be decided by a single
arbitrator.  The arbitrator shall be
selected by mutual agreement of the parties within thirty (30) days of the
effective date of the notice initiating the arbitration.  If the parties cannot agree on an arbitrator,
then the complaining party shall notify the AAA and request selection of an
arbitrator in accordance with the AAA Employment Rules.  The arbitrator shall have only such authority
to award equitable relief, damages, costs, and fees as a court would have for
the particular claim(s) asserted.  The
fees of the arbitrator and AAA shall be paid by the non-prevailing party.  If the allocation of responsibility for
payment of the arbitrator’s fees would render the obligation to arbitrate
unenforceable, the parties authorize and agree to instruct the arbitrator to
modify the allocation as necessary to preserve enforceability.  The arbitrator shall have exclusive authority
to resolve all Arbitrable Claims, including, but not
limited to, arbitrability and whether all or any part
of this Agreement is void or unenforceable.

 

(d)                                 Fees and Expenses.  Each party shall pay its own attorney fees
and costs including, without limitation, fees and costs of any experts.  However, attorney fees and costs incurred by
the party that prevails in any such arbitration commenced pursuant to this
Section 8 or any judicial action or proceeding seeking to enforce the
agreement to arbitrate disputes as set forth in this Section 8 or seeking
to enforce any order or award of any arbitration commenced pursuant to this
Section 8 may be assessed against the party or parties that do not prevail
in such arbitration in such manner as the arbitrator or the court in such
judicial action, as the case may be, may determine to be appropriate and lawful
under the circumstances.  If any party
prevails on a statutory claim that entitles the prevailing party to a reasonable
attorney fees (with or without expert fees) as part of the costs, the
arbitrator shall award reasonable attorney fees (with or without expert fees)
to the prevailing party in accord with such statute.  Any controversy over whether a dispute is an arbitrable dispute or as to the interpretation or
enforceability of this paragraph with respect to such arbitration shall be
determined by the arbitrator.

 

(e)                                  Modification of This
Agreement.  In a contractual claim
under this Agreement, the arbitrator shall have no authority to add, delete or
modify any term of this Agreement.

 

(f)                                    Confidentiality.  All proceedings and all documents prepared in
connection with any Arbitrable Claim shall be
confidential and, unless otherwise required by law, the subject matter thereof
shall not be disclosed to any person other than the parties to the proceedings,
their counsel, witnesses and experts, the arbitrator, and, if involved, the
court and court staff.  All documents
filed with the arbitrator or with a court shall be filed under seal.  The parties shall stipulate to all
arbitration and court orders necessary to effectuate fully the provisions of
this subsection concerning confidentiality.

 

(g)                                 Continuing Obligations.  The rights and obligations of Executive and
IH set forth in this Section on Arbitration shall survive the termination
of Executive’s employment and the expiration of this Agreement.

 

11

 

9.                                       EXECUTIVE’S
REPRESENTATIONS.  Executive hereby
represents and warrants to IH that (i) the execution, delivery and performance
of this Agreement by Executive does not and shall not conflict with, breach,
violate or cause a default under any contract, agreement, instrument, order,
judgment or decree to which Executive is a party or by which he is bound, (ii)
Executive is not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any
other person or entity and (iii) upon the execution and delivery of this
Agreement by IH, this Agreement shall be the valid and binding obligation of
Executive, enforceable in accordance with its terms.

 

10.                                 NOTICES.  Any notice or other communication under this
Agreement must be in writing and shall be effective upon delivery by hand, or
three (3) business days after deposit in the United States mail, postage
prepaid, certified or registered, and addressed to IH or to Executive at the
corresponding address below.  Executive
shall be obligated to notify IH in writing of any change in his address.  Notice of change of address shall be
effective only when done in accordance with this Section.

 

	
  If
  To IH:

  
	
   

  
	
  Interactive
  Health, Inc.

  
	
  3030
  Walnut Avenue

  
	
  Long
  Beach, CA 90807

  
	
  Attn:
  Chairman

  
	
   

  
	
  With
  a copy to:

  
	
   

  
	
  Whitney
  & Co., LLC

  
	
  177
  Broad Street

  
	
  Stamford,
  CT 06901

  
	
  Attn:

  	
  Daniel
  J. O’Brien

  
	
   

  	
  Michael
  C. Salvator

  
	
   

  
	
   

  
	
  And:

  
	
   

  
	
  Gibson,
  Dunn & Crutcher LLP

  
	
  2029
  Century Park East

  
	
  Los
  Angeles, CA 90067-3026

  
	
  Attn:

  	
  Jonathan
  K. Layne

  
	
   

  
	
   

  
	
  If
  To Executive:

  
	
   

  
	
   

  
	
  Thomas Dragotto

  
	
  976 Bright Star Street

  
	
  Thousand Oaks, Ca 91360

  
	
  (805) 492-7473

  

 

12

 

or
to such other address or to the attention of such other person as the recipient
party will have specified by prior written notice to the sending party.

 

11.                                 ACTION BY IH.  All actions required or permitted to be taken
under this Agreement by IH, including, without limitation, exercise of
discretion, consents, waivers, and amendments to this Agreement, shall be made
and authorized only by a designee of Whitney & Co., LLC or by his or her
representative specifically authorized in writing to fulfill these obligations
under this Agreement.

 

12.                                 ENTIRE AGREEMENT.  This Agreement is intended to be the final,
complete, and exclusive statement of the terms of Executive’s employment by
IH.  This Agreement supersedes all other
prior and contemporaneous agreements and statements, whether written or oral,
express or implied, pertaining in any manner to the employment of Executive
(including, without limitation, the employment agreement between Executive and
Interactive Health LLC, dated January 1, 2002, as amended, which shall be
terminated and of no further force or effect as of the date of the execution
and delivery of this Agreement except as expressly provided in Section 3(b)
hereof), and it may not be contradicted by evidence of any prior or
contemporaneous statements or agreements. 
To the extent that the practices, policies, or procedures of IH, now or
in the future, apply to Executive and are inconsistent with the terms of this
Agreement, the provisions of this Agreement shall control.

 

13.                                 AMENDMENTS; WAIVERS.  This Agreement may not be amended except by
an instrument in writing, signed by each of the parties.  No amendment or waiver of this Agreement
requires the consent of any individual, partnership, corporation or other
entity not a party to this Agreement. 
Nothing in this Agreement, express or implied, is intended to confer
upon any third person any rights or remedies under or by reason of this
Agreement.  No failure to exercise and no
delay in exercising any right, remedy, or power under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, or power under this Agreement preclude any other or further
exercise thereof, or the exercise of any other right, remedy, or power provided
herein or by law or in equity.

 

14.                                 ASSIGNMENT; SUCCESSORS AND
ASSIGNS.  Executive agrees that he
will not assign, sell, transfer, delegate, or otherwise dispose of, whether
voluntarily or involuntarily, or by operation of law, any rights or obligations
under this Agreement.  Any such purported
assignment, transfer, or delegation shall be null and void.  Nothing in this Agreement shall prevent the
consolidation of IH with, or its merger into, any other entity, or the sale by
IH of all or substantially all of its assets, or the assignment by IH of any
rights or obligations under this Agreement. 
Subject to the foregoing, this Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective heirs, legal
representatives, successors, and permitted assigns, and shall not benefit any
person or entity other than those specifically enumerated in this Agreement

 

15.                                 SEVERABILITY.  If any provision of this Agreement, or its
application to any person, place, or circumstance, is held by an arbitrator or
a court of competent jurisdiction to be invalid, illegal, unenforceable, or
void, such provision shall be enforced to the greatest extent permitted by law,
and the remainder of this Agreement and such provision as applied to other
persons, places, and circumstances shall remain in full force and effect.  If any covenant should

 

13

 

be deemed invalid,
illegal or unenforceable because its scope is considered excessive, such
covenant shall be modified so that the scope of the covenant is reduced only to
the minimum extent necessary to render the modified covenant valid, legal and
enforceable.

 

16.                                 COUNTERPARTS.  This Agreement may be executed on separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
agreement.

 

17.                                 REMEDIES.  In addition and supplementary to other rights
and remedies existing in its favor, Executive may apply to the court of law or
equity of competent jurisdiction for specific performance and/or injunctive or
other relief in order to enforce or prevent any violations of the provisions
hereof, including Sections 5, 6 and 7 hereof.

 

18.                                 ATTORNEYS’ FEES.  In any legal action, arbitration, or other
proceeding brought to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys’ fees and
costs.

 

19.                                 CHOICE OF LAW.  Except as expressly provided in Sections
4(a)(2) and 7(b), all issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement will be governed by,
and construed in accordance with, the laws of the State of California, without
giving effect to principles of conflicts of law.

 

20.                                 INTERPRETATION.  This Agreement shall be construed as a whole,
according to its fair meaning, and not in favor of or against any party.  By way of example and not in limitation, this
Agreement shall not be construed in favor of the party receiving a benefit nor
against the party responsible for any particular language in this
Agreement.  Captions are used for
reference purposes only and should be ignored in the interpretation of the Agreement.

 

21.                                 EMPLOYEE ACKNOWLEDGMENT.  Executive acknowledges that he has had the
opportunity to consult legal counsel in regard to this Agreement, that he has
read and understands this Agreement, that he is fully aware of its legal
effect, and that he has entered into it freely and voluntarily and based on his
own judgment and not on any representations or promises other than those
contained in this Agreement.

 

14

 

IN WITNESS WHEREOF, the parties have executed this
Agreement effective as of the date it is last executed below by either party.

 

 

	
  INTERACTIVE HEALTH, INC.

  
	
   

  
	
   

  
	
  /s/
  Kevin A. Smith

  	
   

  
	
   

  
	
  By:
  Kevin Smith

  
	
  Its:  Vice President

  
	
   

  
	
   

  
	
  EXECUTIVE

  
	
   

  
	
   

  
	
  /s/
  Thomas Dragotto

  	
   

  
	
   

  
	
  Thomas
  Dragotto

  

 

15

 

Exhibit
A

 

GENERAL RELEASE

 

I,
Thomas Dragotto, in consideration of and subject to
the performance by Interactive Health, Inc., a Delaware corporation (together
with its parent and subsidiaries, the “Company”), of its obligations
under the Employment Agreement, dated as of
[                      ]
(the “Employment Agreement”), do hereby release and forever discharge as
of the date hereof the Company and its affiliates and all present and former
directors, officers, agents, representatives, employees, successors and assigns
of the Company and its affiliates and the Company’s direct or indirect owners
(collectively, the “Released Parties”) to the extent provided below.

 

1.               I
understand that any payments or benefits paid or granted to me under
Section 4(a) of the Employment Agreement represent, in part, consideration
for signing this General Release and are not salary, wages or benefits to which
I was already entitled.  I understand and
agree that I will not receive the payments and benefits specified in
Section 4(a) of the Employment Agreement unless I execute this General
Release and do not revoke this General Release within the time period permitted
hereafter or breach this General Release. 
Such payments and benefits will not be considered compensation for
purposes of any employee benefit plan, program, policy or arrangement
maintained or hereafter established by the Company or its affiliates.  I also acknowledge and represent that I have
received all payments and benefits that I am entitled to receive (as of the
date hereof) by virtue of any employment by the Company.

 

2.               Except
as provided in paragraphs 4 and 13 below and except for the provisions of the
Employment Agreement which expressly survive the termination of my employment
with the Company, I knowingly and voluntarily (for myself, my heirs, executors,
administrators and assigns) release and forever discharge the Company and the
other Released Parties from any and all claims, suits, controversies, actions,
causes of action, cross-claims, counter-claims, demands, debts, compensatory
damages, liquidated damages, punitive or exemplary damages, other damages,
claims for costs and attorneys’ fees, or liabilities of any nature whatsoever
in law and in equity, both past and present (through the date this General
Release becomes effective and enforceable) and whether known or unknown,
suspected or unsuspected, or claimed against the Company or any of the Released
Parties which I, my spouse, or any of my heirs, executors, administrators or
assigns, may have, including, without limitation, those which arise out of or
are connected with my employment with, or my separation or termination from,
the Company (including, but not limited to, any allegation, claim or violation,
arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as
amended (including the Older Workers Benefit Protection Act); the Equal Pay Act
of 1963, as amended; the Americans with Disabilities Act of 1990; the Family
and Medical Leave Act of 1993; the Worker Adjustment Retraining and
Notification Act; the Employee Retirement Income Security Act of 1974; any
applicable Executive Order Programs; the Fair Labor Standards Act; or their
state or local counterparts; or under any other federal, state or local civil
or human rights law, or under any other local, state, or federal law,
regulation or ordinance; or under any public policy, contract or tort, or under
common law; or arising under any policies, practices or procedures of the
Company; or any claim for wrongful

 

16

 

discharge, breach of contract, infliction of emotional
distress, defamation; or any claim for costs, fees, or other expenses,
including attorneys’ fees incurred in these matters) (all of the foregoing
collectively referred to herein as the “Claims”).  The terms and provisions of the foregoing
paragraph mutually bind the Company.

 

3.               I
represent that I have made no assignment or transfer of any right, claim,
demand, cause of action, or other matter covered by paragraph 2 above.

 

4.               I
agree that this General Release does not waive or release any rights or claims
that I may have under the Age Discrimination in Employment Act of 1967 which
arise after the date I execute this General Release.  I acknowledge and agree that my separation
from employment with the Company in compliance with the terms of the Employment
Agreement shall not serve as the basis for any claim or action (including,
without limitation, any claim under the Age Discrimination in Employment Act of
1967).

 

5.               In
signing this General Release, I acknowledge and intend that it shall be
effective as a bar to each and every one of the Claims hereinabove mentioned or
implied.  I expressly consent that this
General Release shall be given full force and effect according to each and all
of its express terms and provisions, including those relating to unknown and
unsuspected Claims (notwithstanding any state statute that expressly limits the
effectiveness of a general release of unknown, unsuspected and unanticipated
Claims), if any, as well as those relating to any other Claims hereinabove
mentioned or implied.  I acknowledge and
agree that this waiver is an essential and material term of this General
Release and that without such waiver the Company would not have agreed to the
terms of the Employment Agreement.  I
further agree that in the event I should bring a Claim seeking damages against
the Company, or in the event I should seek to recover against the Company in
any Claim brought by a governmental agency on my behalf, this General Release
shall serve as a complete defense to such Claims.  I further agree that I am not aware of any
pending charge or complaint of the type described in paragraph 2 as of the
execution of this General Release.

 

6.               I
represent that I am not aware of any claim by me other than the claims that are
released by this Agreement.  I
acknowledge that I am familiar with the provisions of California Civil Code
Section 1542, which provides as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.”

 

Being aware of such provisions of law, I agree to expressly waive any
rights I may have thereunder, as well as under any
other statute or common law principles of similar effect.

 

7.               I
agree that neither this General Release, nor the furnishing of the
consideration for this General Release, shall be deemed or construed at any
time to be an admission by the Company, any Released Party or myself of any
improper or unlawful conduct.

 

8.               I
agree that I will forfeit all amounts payable by the Company pursuant to the
Employment Agreement if I challenge the validity of this General Release.  I also agree that if I violate

 

A-2

 

this General Release by suing the Company or the other
Released Parties, I will pay all costs and expenses of defending against the
suit incurred by the Released Parties, including reasonable attorneys’ fees,
and return all payments received by me pursuant to the Employment Agreement.

 

9.               I
agree that this General Release is confidential and agree not to disclose any
information regarding the terms of this General Release, except to my immediate
family and any tax, legal or other counsel I have consulted regarding the
meaning or effect hereof or as required by law, and I will instruct each of the
foregoing not to disclose the same to anyone.

 

10.         Any
non-disclosure provision in this General Release does not prohibit or restrict
me (or my attorney) from responding to any inquiry about this General Release or
its underlying facts and circumstances by the Securities and Exchange
Commission (SEC), the National Association of Securities Dealers, Inc. (NASD),
any other self-regulatory organization or governmental entity.

 

11.         I
agree to reasonably cooperate with the Company in any internal investigation or
administrative, regulatory, or judicial proceeding.  I understand and agree that my cooperation
may include, but not be limited to, making myself available to the Company upon
reasonable notice for interviews and factual investigations; appearing at the
Company’s request to give testimony without requiring service of a subpoena or
other legal process; volunteering to the Company pertinent information; and
turning over to the Company all relevant documents which are or may come into
my possession all at times and on schedules that are reasonably consistent with
my other permitted activities and commitments. 
I understand that in the event the Company asks for my cooperation in
accordance with this provision, the Company will reimburse me solely for
reasonable travel expenses, including lodging and meals, upon my submission of
receipts.

 

12.         I
agree not to disparage the Company, its past and present investors, officers,
directors or employees or its affiliates and to keep all confidential and
proprietary information about the past or present business affairs of the
Company and its affiliates confidential unless a prior written release from the
Company is obtained.  I further agree
that as of the date hereof, I have returned to the Company any and all
property, tangible or intangible, relating to its business, which I possessed
or had control over at any time (including, but not limited to,
company-provided credit cards, building or office access cards, keys, computer equipment,
manuals, files, documents, records, software, customer data base and other
data) and that I shall not retain any copies, compilations, extracts, excerpts,
summaries or other notes of any such manuals, files, documents, records,
software, customer data base or other data.  
The terms and provisions of the foregoing paragraph mutually bind the
Company.

 

13.         Notwithstanding anything in this General
Release to the contrary, this General Release shall not relinquish, diminish,
or in any way affect any rights or claims (i) arising out of any breach by the
Company or by any Released Party of the Employment Agreement after the date
hereof, (ii) to which I would otherwise be entitled pursuant to any employee
benefit plan, including any 401(k) plan, of the Company or (iii) to
indemnification for which I may be entitled as a former officer or director of
the Company under its charter and/or bylaws

 

A-3

 

and/or other
constituent documents so long as I am otherwise entitled to be indemnified as
authorized thereunder.

 

14.         Whenever
possible, each provision of this General Release shall be interpreted in, such
manner as to be effective and valid under applicable law, but if any provision
of this General Release is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other provision or any
other jurisdiction, but this General Release shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.

 

BY
SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

 

(i)                                     I
HAVE READ IT CAREFULLY;

 

(ii)                                  I
UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS,
INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED;
THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

 

(iii)                               I
VOLUNTARILY CONSENT TO EVERYTHING IN IT;

 

(iv)                              I
HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE
DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO
OF MY OWN VOLITION;

 

(v)                                 I
HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE
SUBSTANTIALLY IN ITS FINAL FORM ON
                               
    ,
             TO CONSIDER
IT AND THE CHANGES MADE SINCE THE
                               
    ,          
VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED
21-DAY PERIOD;

 

(vi)                              THE
CHANGES TO THE AGREEMENT SINCE
                               
     ,        
EITHER ARE NOT MATERIAL OR WERE MADE AT MY REQUEST.

 

(vii)                           I
UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE
IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
REVOCATION PERIOD HAS EXPIRED;

 

(viii)                        I
HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE
OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

 

A-4

 

(ix)                                I
AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED,
CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF THE COMPANY AND BY ME.

 

	
  DATE:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Thomas
  Dragotto

  

 

A-5

 

Exhibit B

 

 

Anywhere
in the world.Exhibit
10.6

 

FORM
OF INDEMNIFICATION AGREEMENT

 

dated
as of April [     ], 2004 between

 

INTERACTIVE
HEALTH, INC.  (the “Company”), and

                                     
(“Indemnitee”)

 

WHEREAS, the
Board of Directors has determined that the inability to attract and retain
qualified persons as directors and officers is detrimental to the best
interests of the Company’s stockholders and that the Company should act to
assure such persons that there will be adequate certainty of protection through
insurance and indemnification against risks of claims and actions against them
arising out of their service to and activities on behalf of the Company; and

 

WHEREAS, the
Company has adopted provisions in its By-laws providing for indemnification of
its officers and directors to the fullest extent permitted by applicable law,
and the Company wishes to clarify and enhance the rights and obligations of the
Company and Indemnitee with respect to indemnification; and

 

WHEREAS, in
order to induce and encourage highly experienced and capable persons such as
Indemnitee to serve and continue to serve as directors and officers of the
Company and in any other capacity with respect to the Company, and to otherwise
promote the desirable end that such persons will resist what they consider
unjustified lawsuits and claims made against them in connection with the good
faith performance of their duties to the Company, with the knowledge that
certain costs, judgments, penalties, fines, liabilities and expenses incurred
by them in their defense of such litigation are to be borne by the Company and
they will receive the maximum protection against such risks and liabilities as
may be afforded by law, the Board of Directors of the Company has determined
that the following Agreement is reasonable and prudent to promote and ensure
the best interests of the Company and its stockholders; and

 

WHEREAS, the
Company desires to have Indemnitee continue to serve as a director or officer
of the Company and in such other capacity with respect to the Company as the
Company may request, as the case may be, free from undue concern for
unpredictable, inappropriate or unreasonable legal risks and personal
liabilities by reason of Indemnitee acting in good faith in the performance of
Indemnitee’s duty to the Company; and Indemnitee desires to continue so to
serve the Company, provided, and on the express condition, that he or she is
furnished with the indemnity set forth hereinafter;

 

Now, therefore,
in consideration of Indemnitee’s continued service as a director or officer of
the Company, the parties hereto agree as follows:

 

1.                                       Service by
Indemnitee.  Indemnitee will serve
and/or continue to serve as a director or officer of the Company faithfully and
to the best of Indemnitee’s ability so long as Indemnitee is duly elected or
appointed and until such time as Indemnitee is removed as permitted by law or
tenders a resignation in writing.

 

 

2.                                       Indemnification.  The Company shall indemnify Indemnitee to the
fullest extent permitted by the Delaware General Corporation law in effect on
the date hereof or as such law may from time to time be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Company to provide broader indemnification rights than said law permitted the
Company to provide prior to such amendment). 
Without diminishing the scope of the indemnification provided by this
Section, the rights of indemnification of Indemnitee provided hereunder shall
include but shall not be limited to those rights hereinafter set forth, except
that no indemnification shall be paid to Indemnitee:

 

(a)                                  to the extent expressly
prohibited by Delaware law or the By-laws of the Company;

 

(b)                                 for which payment is actually
made to Indemnitee under a valid and collectible insurance policy or under a
valid and enforceable indemnity clause, by-law or agreement of the Company or any other company or
organization on whose board Indemnitee serves at the request of the Company,
except in respect of any indemnity exceeding the payment under such insurance,
clause, by-law or agreement;

 

(c)                                  in connection with an
action, suit or proceeding, or part thereof (including claims and
counterclaims) initiated by Indemnitee, except a judicial proceeding or
arbitration pursuant to Section 10 to enforce rights under this Agreement,
unless the action, suit or proceeding (or part thereof) was authorized by the
Board of Directors of the Company;

 

(d)                                 with respect to any action,
suit or proceeding brought by or on behalf of the Company against Indemnitee that
is authorized by the Board of Directors of the Company, except as provided in
Sections 4, 5 and 6 below.

 

3.                                       Action or
Proceedings Other than an Action by or in the Right of the Company.  Except as limited by Section 2 above,
Indemnitee shall be entitled to the indemnification rights provided in this
Section if Indemnitee is a party or is threatened to be made a party to
any Proceeding (other than an action by or in the name of the Company) by
reason of the fact that Indemnitee is or was a director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent or fiduciary of any other entity
(including, but not limited to, another corporation, partnership, joint venture
or trust); or by reason of anything done or not done by Indemnitee in any such
capacity.  Pursuant to this Section,
Indemnitee shall be indemnified against all costs, judgments, penalties, fines,
liabilities, amounts paid in settlement by or on behalf of Indemnitee, and
Expenses (defined below) actually and reasonably incurred by Indemnitee in
connection with such Proceeding, if Indemnitee acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, and with respect to any criminal Proceeding, had no reasonable
cause to believe his or her conduct was unlawful.

 

4.                                       Indemnity in
Proceedings by or in the Name of the Company.  Except as limited by Section 2 above,
Indemnitee shall be entitled to the indemnification rights provided in this
Section if Indemnitee was or is a party or is threatened to be made a
party to any Proceeding brought by or in the name of the Company to procure a
judgment in its favor by reason of the fact that Indemnitee is or was a director,
officer, employee or agent or fiduciary of the Company,

 

2

 

or by reason of anything done or
not done by Indemnitee in any such capacity. 
Pursuant to this Section, Indemnitee shall be indemnified against all
costs, judgments, penalties, fines, liabilities, amounts paid in settlement by
or on behalf of Indemnitee, and Expenses actually and reasonably incurred by
Indemnitee in connection with such Proceeding if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company; provided, however, that no such indemnification
shall be made in respect of any claim, issue, or matter as to which Delaware
law expressly prohibits such indemnification by reason of any adjudication of
liability of Indemnitee to the Company, unless and only to the extent that the
Court of Chancery of the State of Delaware or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is entitled to indemnification for such costs, judgments, penalties,
fines, liabilities and Expenses as such court shall deem proper.

 

5.                                       Indemnification for
Costs, Charges and Expenses of Successful Party.  Notwithstanding the limitations of
Section 2(d), 3 and 4 above, to the extent that Indemnitee has been
successful, on the merits or otherwise, in whole or in part, in defense of any
action, suit or proceeding (including an action, suit or proceeding brought by
or on behalf of the Company) or in defense of any claim, issue or matter
therein, including, without limitation, the dismissal of any action without
prejudice, or if it is ultimately determined that Indemnitee is otherwise
entitled to be indemnified against Expenses, Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred in connection therewith.

 

6.                                       Partial
Indemnification.  If Indemnitee is
entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of the costs, judgments, penalties, fines,
liabilities or Expenses actually and reasonably incurred in connection with any
action, suit or proceeding (including an action, suit or proceeding brought by
or on behalf of the Company), but not, however, for all of the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such costs, judgments, penalties, fines, liabilities and Expenses actually and reasonably
incurred to which Indemnitee is entitled.

 

7.                                       Indemnification for
Expenses of a Witness. 
Notwithstanding any other provision of this Agreement, to the maximum
extent permitted by applicable law, Indemnitee shall be entitled to
indemnification against all Expenses actually and reasonably incurred or
suffered by Indemnitee or on Indemnitee’s behalf if Indemnitee appears as a
witness or otherwise incurs legal expenses as a result of or related to
Indemnitee’s service as a director or officer of the Company, in any
threatened, pending or completed legal, administrative, investigative or other
proceeding or matter to which Indemnitee neither is, nor is threatened to be
made, a party.

 

8.                                       Determination of
Entitlement to Indemnification.  Upon
written request by Indemnitee for indemnification pursuant to
Sections 3, 4, 5, 6 or 7 the entitlement of Indemnitee to
indemnification, to the extent not provided pursuant to the terms of this
Agreement, shall be determined by the following person or persons who shall be
empowered to make such determination: 
(a) the Board of Directors of the Company by a majority vote of
Disinterested Directors (defined below), whether or not such majority
constitutes a quorum; (b) a committee of Disinterested Directors designated by
a majority vote of such directors, whether or not such majority constitutes a
quorum; (c) if there are no Disinterested Directors, or if the Disinterested
Directors so direct, by Independent Counsel (defined below) in a written
opinion to the Board of

 

3

 

Directors, a copy of which shall
be delivered to Indemnitee; or (d) the stockholders of the Company.  Such Independent Counsel shall be selected by
the Board of Directors and approved by Indemnitee.  Upon failure of the Board so to select such
Independent Counsel or upon failure of Indemnitee so to approve, such
Independent Counsel shall be selected upon application to a court of competent
jurisdiction.  Such determination of
entitlement to indemnification shall be made not later than 30 calendar days
after receipt by the Company of a written request for indemnification.  Such request shall include documentation or
information which is necessary for such determination and which is reasonably
available to Indemnitee.  Any Expenses
incurred by Indemnitee in connection with a request for indemnification or
payment of Expenses hereunder, under any other agreement, any provision of the
Company’s By-laws or any directors’ and officers’ liability insurance, shall be
borne by the Company.  The Company hereby
indemnifies Indemnitee for any such Expense and agrees to hold Indemnitee
harmless therefrom irrespective of the outcome of the determination of
Indemnitee’s entitlement to indemnification. 
If the person making such determination shall determine that Indemnitee
is entitled to indemnification as to part (but not all) of the application for
indemnification, such person shall reasonably prorate such partial
indemnification among the claims, issues or matters at issue at the time of the
determination.

 

9.                                       Presumptions and
Effect of Certain Proceedings.  The
Secretary of the Company shall, promptly upon receipt of Indemnitee’s request
for indemnification, advise in writing the Board of Directors or such other
person or persons empowered to make the determination as provided in
Section 8 that Indemnitee has made such request for indemnification.  Upon making such request for indemnification,
Indemnitee shall be presumed to be entitled to indemnification hereunder and
the Company shall have the burden of proof in making any determination contrary
to such presumption.  If the person or
persons so empowered to make such determination shall have failed to make the
requested determination with respect to indemnification within 30 calendar days
after receipt by the Company of such request, a requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be absolutely entitled to such indemnification, absent actual and
material fraud in the request for indemnification.  The termination of any Proceeding described
in Sections 3 or 4 by judgment, order, settlement or conviction, or
upon a plea of nolo contendere or its
equivalent, shall not, of itself: 
(a) create a presumption that Indemnitee did not act in good faith
and in a manner which Indemnitee reasonably believed to be in or not opposed to
the best interests of the Company, or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful; or (b) otherwise adversely affect the rights of Indemnitee to
indemnification except as may be provided herein.

 

10.                                 Remedies of Indemnitee in
Cases of Determination not to Indemnify or to Pay Expenses.  In the event that a determination is made
that Indemnitee is not entitled to indemnification hereunder or if payment has
not been timely made following a determination of entitlement to
indemnification pursuant to Sections 8 and 9, or if Expenses are not
paid pursuant to Section 15, Indemnitee shall be entitled to final
adjudication in a court of competent jurisdiction of entitlement to such
indemnification or payment. 
Alternatively, Indemnitee at Indemnitee’s option may seek an award in an
arbitration to be conducted by a single arbitrator pursuant to the rules of the
American Arbitration Association, such award to be made within sixty days
following the filing of the demand for arbitration.  The Company shall not oppose Indemnitee’s
right to seek any such adjudication or award in arbitration or any other
claim.  The

 

4

 

determination in any such
judicial proceeding or arbitration shall be made de novo and Indemnitee shall not be prejudiced by reason of a
determination (if so made) pursuant to Sections 8 or 9 that
Indemnitee is not entitled to indemnification. 
If a determination is made or deemed to have been made pursuant to the
terms of Section 8 or 9 that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination and is
precluded from asserting that such determination has not been made or that the
procedure by which such determination was made is not valid, binding and
enforceable.  The Company further agrees
to stipulate in any such court or before any such arbitrator that the Company
is bound by all the provisions of this Agreement and is precluded from making
any assertions to the contrary.  If the
court or arbitrator shall determine that Indemnitee is entitled to any
indemnification or payment of Expenses hereunder, the Company shall pay all
Expenses actually and reasonably incurred by Indemnitee in connection with such
adjudication or award in arbitration (including, but not limited to, any
appellate Proceedings).

 

11.                                 Other Rights to Indemnification.  Indemnification and payment of Expenses
provided by this Agreement shall not be deemed exclusive of any other rights to
which Indemnitee may now or in the future be entitled under any provision of
the By-laws or other organizational documents of the Company, vote of
stockholders or Disinterested Directors, provision of law, agreement or
otherwise.

 

12.                                 Expenses to Enforce
Agreement.  In the event that
Indemnitee is subject to or intervenes in any Proceeding in which the validity
or enforceability of this Agreement is at issue or seeks an adjudication or
award in arbitration to enforce Indemnitee’s rights under, or to recover
damages for breach of, this Agreement, Indemnitee, if Indemnitee prevails in
whole or in part in such action, shall be entitled to recover from the Company
and shall be indemnified by the Company against any actual Expenses incurred by
Indemnitee.

 

13.                                 Continuation of Indemnity.  All agreements and obligations of the Company
contained herein shall continue during the period Indemnitee is a director,
officer, employee or agent of the Company or is serving at the request of the
Company as a director, officer, employee or agent or fiduciary of any other
entity (including, but not limited to, another corporation, partnership, joint
venture or trust) of the Company and shall continue thereafter with respect to
any possible claims based on the fact that Indemnitee was a director, officer
employee or agent of the Company or was serving at the request of the Company
as a director, officer, employee or agent or fiduciary of any other entity
(including, but not limited to, another corporation, partnership, joint venture
or trust).  This Agreement shall be
binding upon all successors and assigns of the Company (including any
transferee of all or substantially all of its assets and any successor by
merger or operation of law) and shall inure to the benefit of the heirs,
personal representatives and estate of Indemnitee.

 

14.                                 Notification and Defense
of Claim.  Promptly after receipt by
Indemnitee of notice of any Proceeding, Indemnitee will, if a claim in respect
thereof is to be made against the Company under this Agreement, notify the
Company in writing of the commencement thereof; but the omission so to notify
the Company will not relieve it from any liability that it may have to
Indemnitee.  Notwithstanding any other
provision of this Agreement, with respect to any such Proceeding of which
Indemnitee notifies the Company:

 

5

 

(a)                                  The Company shall be
entitled to participate therein at its own expense; and

 

(b)                                 Except as otherwise provided
in this Section 14(b), to the extent that it may wish, the Company,
jointly with any other indemnifying party similarly notified, shall be entitled
to assume the defense thereof, with counsel satisfactory to Indemnitee.  After notice from the Company to Indemnitee
of its election so to assume the defense thereof, the Company shall not be
liable to Indemnitee under this Agreement for any expenses of counsel subsequently
incurred by Indemnitee in connection with the defense thereof except as
otherwise provided below.  Indemnitee
shall have the right to employ Indemnitee’s own counsel in such Proceeding, but
the fees and expenses of such counsel incurred after notice from the Company of
its assumption of the defense thereof shall be at the expense of Indemnitee
unless (i) the employment of counsel by Indemnitee has been authorized by
the Company, (ii) Indemnitee shall have reasonably concluded that there may
be a conflict of interest between the Company and Indemnitee in the conduct of
the defense of such action or (iii) the Company shall not within 60
calendar days of receipt of notice from Indemnitee in fact have employed
counsel to assume the defense of the action, in each of which cases the fees
and expenses of Indemnitee’s counsel shall be at the expense of the
Company.  The Company shall not be
entitled to assume the defense of any Proceeding brought by or on behalf of the
Company or as to which Indemnitee shall have made the conclusion provided for
in (ii) above; and

 

(c)                                  If the Company has assumed
the defense of a Proceeding, the Company shall not be liable to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of any
Proceeding effected without the Company’s written consent.  The Company shall not settle any Proceeding
in any manner that would impose any penalty or limitation on or disclosure
obligation with respect to Indemnitee without Indemnitee’s written
consent.  Neither the Company nor
Indemnitee will unreasonably withhold its consent to any proposed settlement.

 

15.                                 Payment of Expenses.  All Expenses incurred by Indemnitee in
advance of the final disposition of any Proceeding shall be paid by the Company
at the request of Indemnitee, each such payment to be made within twenty
calendar days after the receipt by the Company of a statement or statements
from Indemnitee requesting such payment or payments from time to time.  Indemnitee’s entitlement to such Expenses
shall include those incurred in connection with any Proceeding by Indemnitee
seeking a judgment in court or an adjudication or award in arbitration pursuant
to this Agreement (including the enforcement of this provision).  Such statement or statements shall reasonably
evidence the expenses and costs incurred by Indemnitee in connection therewith
and shall include or be accompanied by an undertaking, in substantially the
form attached as Exhibit 1, by or on behalf of Indemnitee to reimburse such
amount if it is finally determined, after all appeals by a court of competent
jurisdiction that Indemnitee is not entitled to be indemnified against such
Expenses by the Company as provided by this Agreement or otherwise.  Indemnitee’s undertaking to reimburse any
such amounts is not required to be secured.

 

16.                                 Separability; Prior
Indemnification Agreements.  If any
provision or provisions of this Agreement shall be held to be invalid, illegal
or unenforceable for any reason whatsoever (a) the validity, legality and
enforceability of the remaining provisions of this

 

6

 

Agreement (including without
limitation, all portions of any paragraphs of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that are not by
themselves invalid, illegal or unenforceable) shall not in any way be affected
or impaired thereby, and (b) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, all portions of any paragraph of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
be construed so as to give effect to the intent of the parties that the Company
provide protection to Indemnitee to the fullest enforceable extent.  This Agreement shall supersede and replace
any prior indemnification agreements entered into by and between the Company
and Indemnitee and any such prior agreements shall be terminated upon execution
of this Agreement.

 

17.                                 Headings; References;
Pronouns.  The headings of the
sections of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
thereof.  References herein to
section numbers are to sections of this Agreement.  All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, neuter, singular or plural as
appropriate.

 

18.                                 Definitions.  For purposes of this Agreement:

 

(a)                                  “Disinterested Director” means
a director of the Company who is not or was not a party to the Proceeding in
respect of which indemnification is being sought by Indemnitee.

 

(b)                                 “Expenses” includes, without
limitation, expenses incurred in connection with the defense or settlement of
any and all investigations, judicial or administrative proceedings or appeals,
attorneys’ fees, witness fees and expenses, fees and expenses of accountants
and other advisors, retainers and disbursements and advances thereon, the
premium, security for, and other costs relating to any bond (including cost
bonds, appraisal bonds or their equivalents), and any expenses of establishing
a right to indemnification under Sections 8, 10 and 12 above but
shall not include the amount of judgments, fines or penalties actually levied
against Indemnitee.

 

(c)                                  “Independent Counsel” means
a law firm or a member of a law firm that neither is presently nor in the past
five years has been retained to represent: 
(i) the Company or Indemnitee in any matter material to either such
party, or (ii) any other party to the Proceeding giving rise to a claim
for indemnification hereunder. 
Notwithstanding the foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee’s right to
indemnification under this Agreement.

 

(d)                                 “Proceeding” includes any
threatened, pending or completed investigation, action, suit or other
proceeding, whether brought in the name of the Company or otherwise, against
Indemnitee, for which indemnification is not prohibited under Sections 2(a)-(c)
above and whether of a civil, criminal, administrative or investigative nature,
including, but not limited to, actions, suits or proceedings in which
Indemnitee may be or may have

 

7

 

been involved as
a party or otherwise, by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or is or was serving, at
the request of the Company, as a director, officer, employee or agent or
fiduciary of any other entity, including, but not limited to, another
corporation, partnership, joint venture or trust, or by reason of anything done
or not done by Indemnitee in any such capacity, whether or not Indemnitee is
serving in such capacity at the time any liability or expense is incurred for
which indemnification or reimbursement can be provided under this Agreement.

 

19.                                 Other Provisions.

 

(a)                                  This Agreement shall be
interpreted and enforced in accordance with the laws of Delaware.

 

(b)                                 This Agreement may be
executed in one or more counterparts, each of which shall for all purposes be
deemed to be an original but all of which together shall constitute one and the
same Agreement.  Only one such
counterpart signed by the party against whom enforceability is sought needs to
be produced as evidence of the existence of this Agreement.

 

(c)                                  This agreement shall not be
deemed an employment contract between the Company and any Indemnitee who is an
officer of the Company, and, if Indemnitee is an officer of the Company,
Indemnitee specifically acknowledges that Indemnitee may be discharged at any
time for any reason, with or without cause, and with or without severance
compensation, except as may be otherwise provided in a separate written
contract between Indemnitee and the Company.

 

(d)                                 Upon a payment to Indemnitee
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of Indemnitee to recover against any person for
such liability, and Indemnitee shall execute all documents and instruments
required and shall take such other actions as may be necessary to secure such
rights, including the execution of such documents as may be necessary for the
Company to bring suit to enforce such rights.

 

(e)                                  No supplement, modification
or amendment of this Agreement shall be binding unless executed in writing by
both parties hereto.  No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

 

8

 

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement on and as of the day
and year first above written.

 

 

	
   

  	
  Interactive Health, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Indemnitee

  	
   

  	
   

  
					

 

9

 

EXHIBIT
1

 

UNDERTAKING
TO REPAY INDEMNIFICATION EXPENSES

 

I
                                                                 ,
agree to reimburse the Company for all expenses paid to me by the Company for
my defense in any civil or criminal action, suit, or proceeding, in the event,
and to the extent that it shall ultimately be determined that I am not entitled
to be indemnified by the Company for such expenses.

 

 

	
   

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Typed Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Office

  	
   

  	
   

  
						

 

 

                               )
ss:

 

Before me
                                                 ,
on this day personally appeared
                                 ,
known to me to be the person whose name is subscribed to the foregoing
instrument, and who, after being duly sworn, stated that the contents of said
instrument is to the best of his/her knowledge and belief true and correct and
who acknowledged that he/she executed the same for the purpose and
consideration therein expressed.

 

GIVEN under my hand and official
seal at           , this
              
day of
             ,
200   .

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  My commission expires:

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