Exhibit 4.3
SUBSCRIPTION AGREEMENT
Emerging Growth Equities, Ltd.
Parkview Tower
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
I-trax, Inc.
One Xxxxx Square
000 X. 00xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Ladies and Gentlemen:
1. Private Placement.
(A) The undersigned investor (the "Investor") is writing to advise you
of the terms and conditions under which the Investor is willing to
subscribe (the "Offer") for the securities ("Offering"), which are being
offered by I-trax, Inc., a Delaware corporation (the "Company") and which
are described below. We understand that the Company's exclusive placement
agent for the Offering is Emerging Growth Equities, Ltd. (the "Placement
Agent"). The Company is offering shares of its Series A Convertible
Preferred Stock, par value $.001 per share (the "Preferred Stock"), at a
purchase price of Twenty-Five Dollars ($25.00) per share. The Offering is
for up to $25,000,000 of Preferred Stock (or 1,000,000 shares). The
Certificate of Designations, Preferences and Rights of the Series A
Convertible Preferred Stock of I-trax, Inc. is attached to this
Subscription Agreement as Exhibit A (the "Designations").
(B) Investor understands that the Offering is being made pursuant to
the exemption from registration requirements of the Securities Act of 1933,
as amended (the "Securities Act") provided by Section 4(2) of the
Securities Act. As such, the Investor understands that the Preferred Stock
and the shares of the Company's common stock, par value $.001 per share
(the "Common Stock"), issuable upon conversion of the Preferred Stock (the
"Underlying Shares") are "restricted securities" within the meaning of Rule
144 promulgated under the Securities Act.
(C) We understand that the Preferred Stock is being offered on a "best
efforts" basis by the Company through the Placement Agent, during an
offering period commencing on December 1, 2003 and continuing until the
earlier to occur of (i) the completion of the Offering, (ii) May 19, 2004
(unless extended by agreement of the Company and Placement Agent) or (iii)
the termination of the Offering by mutual agreement of the Placement Agent
and the Company.
(D) The Company will use the proceeds from the Offering to fund a
portion of the purchase price the Company expects to deliver to consummate
the acquisition contemplated by a Merger Agreement by and among the
Company, Meridian Occupational Healthcare Associates, Inc. (d/b/a CHD
Meridian) ("CHDM") and such other parties as are named therein (the Merger
Agreement"), the form of which is attached as Exhibit B to this
Subscription Agreement.
2. Subscription.
(A) Subject to the terms and conditions hereinafter set forth in this
Subscription Agreement, the Investor offers to purchase the number of
shares of Preferred Stock as set forth in the Investor Signature Page
attached hereto. The Investor understands that the Company has the right to
accept or reject this Offer, in whole or in part, for any reason
whatsoever. Acceptance of this Offer, subject to the condition set forth in
Section 3, shall be deemed given by the countersigning of this Subscription
Agreement on behalf of the Company.
(B) If the Company accepts the Offer, the closing of the sale of the
Preferred Stock (the "Closing") will be held contemporaneously with the
closing of the merger contemplated by the Merger Agreement and the shares
of capital stock to be issued pursuant thereto.
(C) If the Company accepts the Offer, the Investor will pay for the
Preferred Stock subscribed for hereunder by wire transfer, to be deposited
in a special non-interest bearing escrow account established by the
Placement Agent and the Company (the "Escrow Account") with Wachovia Bank,
N.A. (the "Escrow Agent"), within 24 hours of written notice from the
Company to the Investor stating that the conditions to Closing set forth in
Section 3 have been satisfied and the Company is prepared to proceed to
Closing. Contemporaneously with Investor's delivery of the payment for the
Preferred Stock subscribed to hereunder to the Escrow Account, the Company
will deliver to the Escrow Agent certificate(s) representing the Preferred
Stock subscribed for by the Investor. At Closing, the funds deposited into
the Escrow Account will be released to the Company and the certificate(s)
representing the Preferred Stock subscribed for by the Investor will be
released to the Investor.
(D) The Investor agrees to comply with the terms of this Subscription
Agreement.
3. Closing.
(A) The Investor's obligation to purchase the Preferred Stock pursuant
to the terms hereof is subject to the following conditions:
(a) The merger contemplated by the Merger Agreement shall close
substantially in accordance with the terms set forth in the Merger
Agreement.
(b) The stockholders of the Company shall approve the Offering and
the merger contemplated by the Merger Agreement.
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(c) The representations and warranties set forth in Sections 4 and 5
below shall be true and correct at and as of the date of the Closing.
(d) No action, suit, or proceeding shall be pending or threatened
against the Company, CHDM or any other party to the Merger Agreement
before any court or quasi-judicial or administrative agency of any
Federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (1) prevent consummation of any of the transactions
contemplated by the Merger Agreement, (2) cause any of the transactions
contemplated by the Merger Agreement to be rescinded following
consummation, (3) affect adversely the right of the Company to own the
capital stock of CHDM following the merger contemplated by the Merger
Agreement, or (4) affect adversely the right of each of the Company and
CHDM to own its assets and to operate its businesses (and no such
injunction, judgment, order, decree, ruling, or charge shall be in
effect) as currently conducted.
(e) The expected pro forma net income of the Company and CHDM and
their respective subsidiaries for calendar year 2003, measured in
accordance with the United States generally accepted accounting
principles ("GAAP"), before any expenses for, interest, taxes,
depreciation and amortization (and excluding non-recurring, non-cash
adjustments of approximately $800,000) shall equal approximately
$5,500,000.
(f) No event has occurred subsequent to December 18, 2003, which has
led the Company to believe (or which should have led the Company to
believe in the exercise of reasonable business judgment) that any
material assumption underlying the financial forecast dated December
2003 delivered to Investor is untrue or is more likely that not to
become untrue.
(g) The Company shall have obtained all regulatory approvals and
made any filings with The American Stock Exchange ("AMEX") required for
the issuance of the Preferred Stock and the Underlying Shares to
Investor.
(h) Each executive officer and director of the Company will execute
a Lock-up agreement in the form of Exhibit C to this Agreement.
(i) The Company shall have obtained stockholder approval for the
issuance of the Preferred Stock to Investor.
(B) I-trax will deliver to the Investor at Closing:
(a) An opinion of outside counsel for the Company that (i) the
Company has the requisite corporate power to issue the Preferred Stock
and the Common Stock issuable upon conversion of the Preferred Stock;
(ii) both the Preferred Stock and the Common Stock issuable upon
conversion of the Preferred Stock will be, when issued, duly
authorized, legally issued, fully paid and nonassessable; (iii) does
not conflict with (a) the Certificate of Incorporation or Bylaws of the
Company, or (b) any present statute, rule or regulation promulgated by
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the United States or the General Corporation Law of the State of
Delaware or (c) any documents filed as exhibits to the Company's
filings under the Exchange Act; (iv) the Preferred Stock may be issued
without registration under the Securities Act.
(b) Proof that the Designations have been filed with the Secretary
of State of Delaware.
4. Representations and Warranties of the Investor. The Investor hereby
warrants and represents to the Company as follows:
(A) The Investor has sufficient liquid assets to sustain a loss of the
Investor's entire investment in Preferred Stock.
(B) The Investor is an "accredited investor" as that term is defined in
Regulation D promulgated under the Securities Act.
(C) The Company has not made any other representations or warranties to
the Investor with respect to the Company except as contained herein or as
may have been made pursuant to the investigations referred to in Section
4(F). The Company has not rendered any investment advice to the Investor
with respect to the Company.
(D) The Investor has not authorized any person or institution to act as
his (her or its) Purchaser Representative (as that term is defined in
Regulation D promulgated under the Securities Act) in connection with this
transaction. The Investor has such knowledge and experience in financial,
investment and business matters that he (she or it) is capable of
evaluating the merits and risks of the prospective investment in the
Preferred Stock. The Investor has consulted with such independent legal
counsel or other advisers as he (she or it) has deemed appropriate to
assist the Investor in evaluating the proposed investment in the Preferred
Stock.
(E) The Investor (i) has adequate means of providing for his (her or
its) current financial needs and possible personal contingencies, and has
no need for liquidity of investment in the Preferred Stock; (ii) can afford
(a) to hold the Preferred Stock for an indefinite period of time and (b)
sustain a complete loss of the entire amount of the subscription; and (iii)
has not made an overall commitment to investments which are not readily
marketable which is disproportionate so as to cause such overall commitment
to become excessive.
(F) The Investor had an opportunity to review the public filings made
by the Company with the Securities and Exchange Commission (the
"Commission") (Web Site: xxx.xxx.xxx; Central Index Key No. 0001110189),
including without limitation, the Company's 2002 Annual Report on Form
10-KSB; the Company's 2003 Proxy Statement; the Company's Quarterly Reports
on Form 10-QSB for the quarters ended March 31, 2003, June 30, 2003 and
September 30, 2003; and the Company's Current Reports on Form 8-K filed or
furnished on April 22, 2003, May 19, 2003, August 15, 2003 (two reports
filed), October 17, 2003, and November 17, 2003. The Investor has read and
carefully considered the Risk Factors and other material contained in such
public filings. In the event the Investor did not have access to the
Internet, the Investor acknowledges that he (she or it) has had an
opportunity to ask the Company to provide paper copies of such public
filings and, if the Investor made such a request, the Company delivered
such paper copies to the Investor. The Investor has also been afforded the
opportunity to ask questions of, and receive answers from, the officers
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and/or directors of the Company concerning the terms and conditions of the
Offering and to obtain any additional information, to the extent that the
Company possesses such information or can acquire it without unreasonable
effort or expense, necessary to verify the accuracy of the information
furnished; and has availed himself (herself or itself) of such opportunity
to the extent the Investor considers it appropriate in order to permit the
Investor to evaluate the merits and risks of an investment in the Preferred
Stock. Neither such inquiries nor any other investigations conducted by or
on behalf of Investor or its counsel shall modify, amend or otherwise
affect Investor's right to rely on the truthfulness and completeness of the
disclosure contained in the Company's public filings listed in this Section
4(F) or the representations and warranties of the Company contained in this
Subscription Agreement. It is understood that all documents, records and
books pertaining to this investment have been made available for
inspection, and that the books and records of the Company will be available
upon reasonable notice for inspection by the Investor during reasonable
business hours at the Company's principal place of business. The Investor
further acknowledges that, in making the Investor's investment decision in
the Preferred Stock, the Investor is relying upon his (her or its) own
investment judgment.
(G) The Investor acknowledges that the Preferred Stock and the
Underlying Shares have not been registered under the Securities Act in
reliance on an exemption from registration for transactions by an issuer
not involving a public offering, and the Investor is purchasing the
Preferred Stock without being furnished any prospectus setting forth all of
the information that would be required to be furnished under the Securities
Act.
(H) The Investor further acknowledges that the Offering has not been
passed upon or the merits thereof endorsed or approved by any state or
Federal authority.
(I) The Preferred Stock being subscribed for is being acquired by the
Investor solely for the account of the Investor for personal investment and
not with a view to, or for resale in connection with, any distribution. The
Investor does not intend to dispose of all or any part of the Preferred
Stock or the Underlying Shares except in compliance with the provisions of
the Securities Act and applicable state securities laws.
(J) The Investor will not sell, transfer, pledge or otherwise dispose
of or encumber the Preferred Stock (including the Underlying Shares) except
pursuant to a registration statement or unless prior to any such sale,
transfer, pledge, disposition or encumbrance, the Investor furnishes the
Company and its transfer agent with an opinion of counsel satisfactory to
the Company in form and substance that registration under the Securities
Act or applicable state securities laws is not required. Notwithstanding
the above limitation on sales, transfers, pledges, dispositions or
encumbrances, the Preferred Stock may be pledged as collateral in
connection with a bona fide margin account or other lending arrangement
without any legal opinion or prior notice.
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(K) The Investor acknowledges that the Company will insert the
following or similar legend on the certificates evidencing the Preferred
Stock and the Underlying Shares, if required to comply with Federal and
state securities laws:
"These securities have not been registered under the
Securities Act of 1933, as amended (the "Act") or under the
securities laws of any state. They may not be sold, offered
for sale, pledged or hypothecated in the absence of a
registration statement in effect with respect to the
securities under such act or an opinion of counsel reasonably
satisfactory to the company that such registration is not
required pursuant to a valid exemption therefrom under the
Act."
(L) Investor is not a registered broker-dealer under Section 15 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
5. Representations and Warranties of the Company. The Company hereby
makes the following representations and warranties to the Investor:
(A) Organization. The Company is a corporation validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and
to carry on its business as it is now being conducted. The Company is duly
authorized to conduct business and is in good standing under the laws of
each jurisdiction where such qualification is required except where failure
to do so could reasonably be expected to have a material adverse effect on
the business, operations, results of operations, properties (including
intangible properties), conditions (financial or otherwise), assets or
liabilities (including contingent liabilities) of the Company or result in
the inability of the Company to timely perform its obligations under this
Subscription Agreement (a "Material Adverse Effect"). The Company has full
corporate power and authority and all licenses, permits, and authorizations
necessary to carry on the businesses in which it is engaged and to own and
use the properties owned and used by it except where failure to do so could
reasonably be expected to have a Material Adverse Effect. The Company is
not in default under or in violation of any provision of its organizational
documents, charter or bylaws.
(B) Authorization. The Company has the full power and authority
(including full corporate power and authority) to execute, deliver and
perform this Subscription Agreement and to enter into and consummate the
Offering. This Subscription Agreement, when accepted by the Company, will
constitute the valid and legally binding obligation of the Company,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally and general
principles of equity. Other than filings required by Regulation D under the
Securities Act and state securities law filings and other filings referred
to in the Merger Agreement, the Company need not give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency to consummate the transactions
contemplated by this Subscription Agreement.
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(C) Capitalization. The entire authorized capital stock of the Company
consists of 102,000,000 shares, of which 100,000,000 shares are designated
as Common Stock of which 13,766,817 shares are issued and outstanding, and
of which 2,000,000 shares are designated as preferred stock, par value
$0.001 per share, none of which is issued or outstanding. At Closing,
1,350,000 shares of preferred stock, par value $0.001 per share, shall be
designated as Series A Convertible Preferred Stock and have the rights,
preferences and limitations set forth in the Designations. All of the
outstanding shares of Common Stock are duly authorized, validly issued,
fully paid and nonassessable and are not subject to any preemptive rights.
Except as set forth in SEC Reports (defined below), there are no
outstanding options, warrants or rights to purchase or acquire from the
Company any capital stock of the Company, and there are no convertible
securities or other contracts, commitments, agreements, understandings,
arrangements or restrictions by which the Company is bound to issue any
additional shares of its capital stock or other securities (other than this
Subscription Agreement and the issuances contemplated by the Offering).
(D) Issuance of the Preferred Stock. At Closing, the Preferred Stock
will be duly, authorized and, when issued and paid for in accordance with
this Subscription Agreement, will be validly issued, fully paid and
nonassessable, and is not subject to any preemptive rights. Prior to
Closing, the Company will reserve from its duly authorized capital stock a
number of shares of Preferred Stock required for issuance upon purchase of
the Preferred Stock and a number of shares of Common Stock required for
issuance of the Underlying Shares upon conversion of the Preferred Stock.
Following Closing, the Underlying Shares, when issued in accordance with
the Designations, will be validly issued, fully paid and nonassessable, and
not subject to any preemptive rights. Assuming the accuracy of the
Investor's representations and warranties set forth in Section 4, no
registration under the Securities Act is required for the offer and sale of
the Preferred Stock by the Company to the Investors as contemplated hereby
or the issuance of the Underlying Shares upon conversion thereof. The
issuance and sale of the Preferred Stock does not contravene the rules and
regulations of the AMEX.
(E) Filings with the SEC. The Company has made all filings with the
Commission that it has been required to make since January l, 2001 under
the Securities Act and the Exchange Act (collectively the "SEC Reports") in
accordance within the time requirements of the Securities Act and the
Exchange Act and the rules and regulations promulgated thereunder. Each of
the SEC Reports has complied with the Securities Act and the Exchange Act
and the rules and regulations of the Commission promulgated thereunder
applicable to such SEC Reports in all material respects. None of the SEC
Reports, as of its applicable date, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements made therein, in light of the circumstances under which
they were made, not misleading. The Company has advised Investor that a
correct and complete copy of each SEC Report (together with all exhibits
and schedules thereto and as amended to date) is available at
xxxx://xxx.xxx.xxx, a website maintained by the Commission where Investors
may view such SEC Reports.
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(F) Financial Statements. The consolidated financial statements of the
Company and its Subsidiaries (defined below) included in the SEC Reports
have been prepared in accordance with GAAP, applied on a consistent basis
throughout the periods covered thereby (except as may be indicated in the
notes thereto or, in the case of unaudited financial statements, as
permitted by Form 10-QSB of the Commission), comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the Commission with respect thereto, present
fairly the results of operations of the Company and its Subsidiaries for
such periods (subject to normal year-end adjustments, which will not be
material individually or in the aggregate) and the financial condition of
the Company and its Subsidiaries at the end of such periods, and are
consistent with the books and records of the Company and its Subsidiaries.
(G) Material Changes. Except as disclosed in the SEC Reports, and
except for the transactions contemplated by the Merger Agreement and the
proposed Offering, since the date of the latest SEC Report, there has not
been any: (i) change, event, condition (financial or otherwise) or state of
circumstances or facts in the business, financial condition or results of
operations of the Company and its Subsidiaries taken as a whole, which
could reasonably be expected to result in a Material Adverse Effect; or
(ii) other transactions material to the Company and its Subsidiaries taken
as a whole.
(H) Noncontravention. Neither the execution and the delivery of this
Subscription Agreement, nor the consummation of the Offering, will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which any of the Company or any of its
Subsidiaries is subject or any provision of their respective certificates
of incorporation or bylaws or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which any of the Company or any of its Subsidiaries is a
party or by which it is bound or to which any of its assets is subject (or
result in the imposition of any security interest on any of its assets),
excluding from the foregoing clauses (i) and (ii) violations or conflicts
that, individually or in the aggregate, would not have a Material Adverse
Effect.
(I) Subsidiaries. The Company has no direct or indirect subsidiaries
(each a "Subsidiary," and collectively, "Subsidiaries") except as described
in the SEC Reports and except for DCG Acquisition, Inc. and CHDM
Healthcare, LLC, both of which were formed in connection with the
transactions contemplated by the Merger Agreement. All the issued and
outstanding shares of capital stock or other equity interests of each
Subsidiary are validly issued, fully paid and non-assessable, and free of
preemptive or similar rights. The Company owns all of the issued and
outstanding shares of capital stock other equity interests of each
Subsidiary.
(J) Litigation. Except as set forth in the SEC Reports, there is no
action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective properties
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before or by any court, arbitrator, governmental or administrative agency
or regulatory authority (Federal, state, county, local or foreign)
(collectively, an "Action") which: (i) adversely affects or challenges the
legality, validity or enforceability of this Subscription Agreement or the
Preferred Stock or (ii) would, if there were an unfavorable decision,
individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect. Neither the Company nor any Subsidiary is or
has been the subject of any Action involving a claim of violation of or
liability under Federal or state securities laws. The Company does not have
pending before the Commission any request for confidential treatment of
information. There has not been, and to the knowledge of the Company, there
is not pending or contemplated, any investigation by the Commission
involving the Company. The Commission has not issued any stop order or
other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Securities Act.
(K) Legal Compliance. Each of the Company, its Subsidiaries and their
respective predecessors and Affiliates (as defined in Rule 12b-2 of the
regulations promulgated under the Exchange Act) has complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of Federal,
state, local, and foreign governments (and all agencies thereof) except
where failure to comply with such laws would not, individually or in the
aggregate, have a Material Adverse Effect, and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has
been filed or commenced against any of them alleging any failure so to
comply.
(L) Listing and Maintenance Requirements. The Company has not, in the
12 months preceding the date hereof, received notice from AMEX to the
effect that the Company is not in compliance with the listing or
maintenance requirements of AMEX. The Company is, and has no reason to
believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.
(M) Internal Accounting Controls. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv)
the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and
designed such disclosures controls and procedures to ensure that material
information relating to the Company, including its Subsidiaries, is made
known to the certifying officers by others within those entities. The
Company's certifying officers have evaluated the effectiveness of the
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Company's controls and procedures as of a date within 90 days prior to the
filing date of the Form 10-QSB for the quarter ended September 30, 2003
(such date, the "Evaluation Date"). The Company presented in the Form
10-QSB) for the quarter ended September 30, 2003 the conclusions of the
certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no significant changes in the Company's
internal controls (as such term is defined in Item 307(b) of Regulation S-B
under the Exchange Act).
(N) Solvency. Based on the financial condition of the Company and CHD
Meridian and their respective subsidiaries (the "Combined Entities") as of
the date of the Closing (and assuming that the Closing shall have
occurred), (i) the Combined Entities' fair saleable value of their assets
exceeds the amount that will be required to be paid on or in respect of the
Combined Entities existing debts and other liabilities (including known
contingent liabilities) as they mature, (ii) the Combined Entities' assets
do not constitute unreasonably small capital to carry on their businesses
or the current fiscal year as now conducted and as proposed to be conducted
including their capital needs taking into account the particular capital
requirements of the business conducted by the Combined Entities and
projected capital requirements and capital availability thereof; and (iii)
the current cash flow of the Combined Entities, together with the proceeds
the Combined Entities would receive, were they to liquidate all of their
assets, after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of their debts when such
amounts are required to be paid. The Combined Entities do not intend to
incur debts beyond their ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be payable on or in respect
of its debt).
(O) Investment Company. The Company is not, and is not an Affiliate of,
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
(P) No Additional Agreements. Other than in connection with the Merger,
the Company does not have any additional agreement or understanding with
any Investor with respect to issuance of Preferred Stock other than as set
forth in this Subscription Agreement.
(Q) Disclosure. All disclosure provided to the Investor regarding the
Company, its business and the transactions contemplated hereby, furnished
by or on behalf of the Company (including the Company's representations and
warranties set forth in this Agreement) are true and correct and do not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
(R) S-3 Eligibility. The Company is eligible to utilize the
Registration Statement on Form S-3 to register the resale of securities
under the Securities Act.
6. Registration Rights. The Company grants registration rights to the
Investor under the following terms and conditions:
(A) The Company will prepare and file with the Commission, within
thirty (30) days of the Closing a registration statement (on Form S-3, or
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other appropriate registration statement form) under the Securities Act
(the "Registration Statement"), at the sole expense of the Company (except
as provided in Section 6(E) below), in respect of the Investor, so as to
permit a non-underwritten public offering and resale of the Underlying
Shares under the Securities Act ("Registrable Securities") by the Investor
as a selling stockholder.
(B) The Company will use its reasonable best efforts to cause such
Registration Statement to become effective as soon as possible after the
Closing, but in any event within one hundred twenty (120) days from the
Closing, including using its best efforts to respond to any comments on the
Registration Statement that the Company receives from the Commission within
ten (10) days following receipt thereof, or, if earlier, effective within
five (5) days of Commission clearance to request acceleration of
effectiveness. The number of shares designated in the Registration
Statement to be registered shall include all of the Registrable Securities
and shall include appropriate language regarding reliance upon Rule 416 to
the extent permitted by the Commission. The Company will notify the
Investor of the effectiveness of the Registration Statement within one
business day of such event. In the event that the number of shares so
registered shall prove to be insufficient to register the resale of all of
the Underlying Shares, then the Company shall be obligated to file, within
thirty (30) days of notice from any Investor, a further Registration
Statement registering such remaining shares and shall use its reasonable
best efforts to prosecute such additional Registration Statement to
effectiveness as soon as possible after the filing thereof, but in any
event within one hundred twenty (120) days of the date of such notice.
(C) No fewer than five (5) business days prior to the initial filing of
a Registration Statement and no fewer than two (2) business days prior to
the filing of any amendment or supplement thereto, Company will furnish to
Investor, a copy of the proposed selling stockholder section, as it
pertains to the Investor, of the document to be filed and a copy of the
section of the document to be filed regarding the manner of sale of the
Investor's Registrable Securities (excluding those incorporated or deemed
to be incorporated by reference and any other disclosure therein which
could reasonably be deemed material nonpublic information concerning the
Company). The Company shall not file any such Registration Statement or any
amendments or supplements thereto if the Investor shall reasonably object
on a timely basis to the proposed selling stockholder section, as it
pertains to the Investor, or the proposed manner of sale of the Investor's
Registrable Securities included in such Registration Statement.
(D) The Company will maintain the Registration Statement effective
under the Securities Act until the earlier of (i) the date that none of the
Registrable Securities covered by such Registration Statement are or may
become issued and outstanding, (ii) the date that all of the Registrable
Securities have been sold pursuant to such Registration Statement, (iii)
all Registrable Securities have been otherwise transferred to persons who
may trade such shares without restriction under the Securities Act, and the
Company has delivered a new certificate or other evidence of ownership for
such securities not bearing a restrictive legend, or (iv) all Registrable
Securities may be sold at any time, without volume or manner of sale
limitations pursuant to Rule 144(k) or any similar provision then in effect
under the Securities Act in the opinion of counsel to the Company, which
-11-
counsel and opinion shall be reasonably acceptable to the Investor and the
Company's transfer agent (the "Effectiveness Period").
(E) All fees, disbursements and out-of-pocket expenses and costs
incurred by the Company in connection with the preparation and filing of
the Registration Statement and in complying with applicable Federal and
state securities laws (including, without limitation, all attorneys' fees
of the Company) shall be borne by the Company. The Investors shall bear the
cost of brokerage discounts, fees and commissions, if any, applicable to
the Registrable Securities being registered and the fees and expenses of
their counsel. The Company shall qualify any of the Registerable Securities
for sale in such states as any Investor reasonably designates. However, the
Company shall not be required to qualify in any state which will require an
escrow or other restriction relating to the Company and/or the sellers, or
which will require the Company to qualify to do business in such state. The
Company at its expense will supply the Investors with copies of the
applicable Registration Statement and any prospectus included therein and
other related documents in such quantities as may be reasonably requested
by the Investors.
(F) In the event that the Registration Statement to be filed by the
Company pursuant to Section 6(A) above is not filed with the Commission
within thirty (30) days of the Closing, then the Company will issue to
Investor, at no additional cost, as compensation for such failure and not
as a penalty, additional shares of Preferred Stock in an amount equal to
one percent (1%) of the Preferred Stock purchased from the Company and held
by the Investor and, until such Registration Statement has been filed, for
every subsequent thirty (30) days the Company does not file such
Registration Statement, the Company will issue to Investor, at no
additional cost, as compensation for such failure and not as a penalty,
additional shares of Preferred Stock in an amount equal to one percent (1%)
of the Preferred Stock purchased from the Company and held by the Investor.
Any additional issuances of Preferred Stock pursuant to this Section 6(F)
shall not relieve the Company from its obligations to register the
Registerable Securities pursuant to this Section. The Registration
Statement required to be filed pursuant to Section 6(A) shall register the
non-underwritten public offering and resale of the Underlying Shares issued
or issuable upon conversion of any Preferred Stock issued pursuant to this
Section 6(F). The liquidated damages set forth in this Section 6(F) are not
the sole remedy of Investor hereunder or under applicable law.
(G) In the case of each registration effected by the Company pursuant
to any section herein, the Company will keep each Investor advised in
writing as to the initiation of each registration and as to the completion
thereof. At its expense, the Company will:
(i) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to a
disposition of all securities covered by such registration statement;
(ii) Notify the Investor at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the
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happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or incomplete in light of the circumstances then existing,
and at the request of the stockholders, prepare and furnish to them a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
Investors, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
incomplete in light of the circumstances then existing; provided that,
for not more than fifteen (15) consecutive business days, and not more
than twice in any twelve (12) month period, the Company may delay the
disclosure of material non-public information concerning the Company
the public disclosure of which at the time is not, in the good faith
opinion of the Board of Directors of Company in the best interests of
the Company and which may, based on the written advice of outside
counsel, be delayed under applicable law or regulation (an "Allowed
Delay"); provided, further, that the Company shall promptly (i) notify
each Investor in writing of the existence of (but in no event, without
the prior written consent of such Investors, shall the Company disclose
to such Investor any of the facts or circumstances regarding) material
non-public information giving rise to an Allowed Delay and (ii) advise
each Investors in writing to cease all sales under such registration
statement until the termination of the Allowed Delay;
(iii) Use its commercially reasonable efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
registration statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify
Investor (and, in the event of an underwritten offering, the managing
underwriter) of the issuance of such order and the resolution thereof;
(iv) Cause all Underlying Shares which are registered in accordance
with the provisions herein, to be listed or included for quotation on
each exchange on which shares of the Common Stock are then listed or
included for quotation;
(v) Provide a transfer agent and registrar for all such Underlying
Shares and CUSIP number for all such Underlying Shares in each case not
later than the effective date of such registration statement; and
(vi) Otherwise comply with all applicable rules and regulations of
the Commission.
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(vii) In the event of a transfer of the Underlying Shares utilizing
the prospectus included within any of the registration statements
covered by this Section 6, cause its counsel to issue a legal opinion
permitting such transfer and cause its transfer agent to reissue a new
certificate representing such Underlying Shares without a restrictive
legend, in each case without charge to the Investor.
(H) In the event the Investor receives notice from the Company of
material non-public information giving rise to an Allowed Delay pursuant to
Section 6(G)(ii) of this Subscription Agreement, the Investor will cease
all sales of Underlying Shares under the relevant registration statement
until the termination of such Allowed Delay.
(I) To the extent the Investor includes any Underlying Shares in a
registration statement pursuant to the terms hereof, the Company agrees to
indemnify and hold harmless Investor, its directors and officers,
shareholders, members and investment managers, and each person, if any, who
controls the Investor within the meaning of the Securities Act, against any
and all loss, liability, claim, damage and expense whatsoever and shall
further promptly reimburse such persons for any legal or other expenses
reasonably incurred by each or any of them in investigations, preparing to
defend or defending against any such action, proceeding or claim (whether
commenced or threatened) or in connection with any investigation or inquiry
arising out of or based upon any untrue or alleged untrue statement of a
material fact or the omission or alleged omission of a material fact
required to be stated or necessary to make not misleading any statements,
unless such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company with respect
to Investor by or on behalf of Investor expressly for use in such
registration statement, any prospectus contained therein or any amendment
or supplement thereto, contained in such registration statement, any
prospectus contained therein or any amendment or supplement thereto. This
indemnity shall be in addition to any liability the Company may have to
Investor otherwise. If any action is brought against the Investor or any
other person the Company is obligated hereby to indemnify, then such person
promptly shall notify the Company in writing of such action.
(J) To the extent Investor includes any Underlying Shares in a
registration statement pursuant to the terms hereof, Investor will
indemnify and hold harmless the Company, its directors and officers and any
controlling person from and against, and will reimburse the Company, its
directors and officers and any controlling person with respect to, any and
all loss, damage, liability, cost or expense to which the Company, its
directors and officers or such controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or
alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any amendment
or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in reliance
upon and in conformity with written information furnished by or on behalf
-14-
of the Investor specifically for use in such registration statement, any
prospectus contained therein or any amendment or supplement thereto, and
provided further, that the maximum amount that may be recovered from
Investor shall be limited to the amount of proceeds received by Investor
from the sale of such Underlying Shares.
(K) To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would
otherwise be liable hereunder to the extent permitted by law, provided that
(i) no contribution shall be made under circumstances where the
indemnifying party would not have been liable for indemnification pursuant
to the provisions hereof, (ii) no seller of securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any seller of securities who
was not guilty of such fraudulent misrepresentation, and (iii) the amount
of the contribution together with any other payments made in respect of
such loss, damage, liability or expense, by any seller of securities shall
be limited to the net amount of proceeds received by such seller from the
sale of such securities.
(L) The Investor will cooperate with the Company in connection with
this Subscription Agreement, including (i) completing the questionnaire
attached as Exhibit D to this Subscription Agreement, which includes all
information regarding the Investor and proposed manner of sale of
securities required to be disclosed in any registration statement filed in
accordance with this Section 6, and delivering such questionnaire by the
later of five (5) days after the Closing or three (3) days after receipt,
pursuant to Section 6(C) of the draft disclosure to be included in the
initial Registration Statement; and (ii) executing and returning all other
documents, and providing any information, reasonably requested by the Staff
of the SEC. Nothing in this Subscription Agreement shall obligate Investor
to consent to be named as an underwriter in any registration statement. The
obligation of the Company to register the Investor's Underlying Shares
shall be absolute and unconditional as to those securities which the
Commission permits to be registered without naming the Investor as an
underwriter.
7. Additional Covenants of the Company. The Company covenants and agrees
as follows:
(A) Furnishing of Information. As long as investor owns the Preferred
Stock of Underlying Shares the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period)
all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. As long as Investor owns such securities, if
the Company is not required to file reports pursuant to such laws, it will
prepare and furnish to the investor and make publicly available in
accordance with Rule 144(c) such information as is required for the
Investor to sell Underlying Shares under Rule 144.
(B) Integration. The Company shall not, and shall use its best efforts
to ensure that no Affiliate of the Company shall, sell, offer for sale or
-15-
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with
the offer or sale of the Securities in a manner that would require the
registration under the Securities Act of the sale of the Securities to the
Investors.
(C) Non-Public Information. The Company covenants and agrees that,
following the Closing, neither it nor any other Person acting on its behalf
will provide investor or its agents or counsel with any information that
the Company believes constitutes material non-public information, unless
prior thereto investor shall have executed a written agreement regarding
the confidentiality and use of such information.
(D) Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, Investor
and the Company will be entitled to specific performance of this Agreement.
The parties agree that monetary damages may not be adequate compensation
for any loss incurred by reason of any breach of obligations described in
the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at
law would be adequate.
(E) Limitation of Liability. Notwithstanding anything herein to the
contrary, the Company acknowledges and agrees that the liability of
Investor arising directly or indirectly, hereunder or any document executed
and delivered by Investor pursuant to this Agreement of any and every
nature whatsoever shall be satisfied solely out of the assets of Investor,
and that no trustee, officer, other investment vehicle or any other
Affiliate of such Investor or any investor, shareholder or holder of shares
of beneficial interest of Investor shall be personally liable for any
liabilities of Investor.
8. Legends.
FOR RESIDENTS OF ALL STATES: THE PREFERRED STOCK AND UNDERLYING SHARES
OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE
SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS.
THE PREFERRED STOCK AND UNDERLYING SHARES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED
TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME.
THE PREFERRED STOCK AND UNDERLYING SHARES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON
OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY
-16-
IS UNLAWFUL.
9. No Waiver. Notwithstanding any of the representations, warranties,
acknowledgments or agreements made herein by the Investor, the
Investor does not thereby or in any manner waive any rights granted to
the Investor under Federal or state securities laws.
10. Independent Nature of Investor's Obligations and Rights. The
obligations of the Investor under this Agreement and any other
documents delivered in connection herewith (collectively, the
"Transaction Documents") are several and not joint with the
obligations of any other purchaser of Preferred Stock, and the
Investor shall not be responsible in any way for the performance of
the obligations of any other purchaser of Preferred Stock under any
Transaction Document. The decision of the Investor to purchase
Preferred Stock pursuant to the Transaction Documents has been made by
the Investor independently of any other purchaser of Preferred Stock.
Nothing contained herein or in any Transaction Document, and no action
taken by any purchaser of Preferred Stock pursuant thereto, shall be
deemed to constitute such purchasers as a partnership, an association,
a joint venture, or any other kind of entity, or create a presumption
that the purchasers of Preferred Stock are in any way acting in
concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Document. The Investor
acknowledges that no other purchaser of Preferred Stock has acted as
agent for the Investor in connection with making its investment
hereunder and that no other purchaser of Preferred Stock will be
acting as agent of the Investor in connection with monitoring its
investment in the Shares or enforcing its rights under the Transaction
Documents. The Investor shall be entitled to independently protect and
enforce its rights, including without limitation the rights arising
out of this Agreement or out of the other Transaction Documents, and
it shall not be necessary for any other purchaser of Preferred Stock
to be joined as an additional party in any proceeding for such
purpose.
11. Revocation. The Investor shall not cancel, terminate or revoke this
Subscription Agreement or any agreement of the Investor made
hereunder, except as set forth herein, and that this Subscription
Agreement shall survive the death or disability of the Investor.
12. Termination of Subscription Agreement. If the Company elects to cancel
this Subscription Agreement, provided that it returns to the Investor,
without interest and without deduction, all sums paid by the Investor,
this Offer shall be null and void and of no further force and effect,
and no party shall have any rights against any other party hereunder.
This Subscription Agreement shall terminate on June 30, 2004 if
Closing hereunder shall not have occurred by such date.
13. Miscellaneous.
(A) All notices or other communications given or made hereunder shall
be in writing and shall be mailed by registered or certified mail, return
-17-
receipt requested, postage prepaid, or by overnight courier service to the
Investor at his address set forth below, to the Company and the Placement
Agent at the addresses set forth herein.
(B) This Subscription Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by all parties.
(C) The representations and warranties set forth in this Subscription
Agreement shall survive the execution thereof for a period of two years
following the date of the Closing. The covenants set forth in this
Subscription Agreement shall survive the execution thereof in accordance
with their terms.
(D) This Subscription Agreement shall be governed by the laws of the
State of Delaware as a contract entered into between residents of such
state.
-18-
INVESTOR SIGNATURE PAGE FOR I-TRAX, INC. SUBSCRIPTION AGREEMENT
Please print or type, Use ink only. (All Parties Must Sign)
The Investor hereby certifies that he (she or it) (i) has received and relied
upon this Subscription Agreement and its respective exhibits, (ii) agrees to all
the terms and conditions of this Subscription Agreement, (iii) meets the
suitability standards set forth herein and (iv) is a resident of the state or
foreign jurisdiction indicated below.
Dollar Amount of Preferred Stock Subscribed for: $_________________________
-------------------------------------------- If other than individual check one and indicate
Name of Investor (Print) capacity of signatory under the signature:
[ ] Trust
[ ] Estate
-------------------------------------------- [ ] Uniform Gifts to Minors Act, State of __________
Name of Joint Investor (if any) (Print) [ ] Attorney-in-fact
[ ] Corporation
[ ] Other
--------------------------------------------
Signature of Investor
If Joint Ownership, Check one:
[ ] Joint Tenants with Right of Survivorship
[ ] Tenants in Common
-------------------------------------------- [ ] Tenants by the Entirety
Signature of Joint Investor (if any) [ ] Community by Property
--------------------------------------------
Capacity of Signatory (if applicable) Backup Withholding Statement:
Please check this box only if the investor is
subject to backup withholding
Social Security or Taxpayer Identification Number
-------------------------------------------------
Investor Mail Address:
--------------------------------------------------
Xxxxxx Xxxxxxx
--------------------------------------------------
Xxxx Xxxxx Zip Code
Telephone: ( ) Fax: ( )
-----------------------------------------------------------------------
Email:_____________________________________________
Address for Delivery of Shares of Preferred Stock (if different from above):
--------------------------------------------------
--------------------------------------------------
City State Zip Code
The investor agrees to the terms of this Agreement and, as required by the
Regulations pursuant to the Internal Revenue Code, certifies under penalty of
perjury that (1) the Social Security Number or Taxpayer Identification Number
and address provided above is correct, (2) the investor is not subject to backup
withholding (unless the Backup Withholding Statement box is checked) either
because he has not been notified that he is subject to backup withholding as a
result of a failure to report all interest or dividends or because the Internal
Revenue Service has notified him that he is no longer subject to backup
withholding and (3) the investor is not a nonresident alien, foreign
partnership, foreign trust or foreign estate.
THE SUBSCRIPTION FOR PREFERRED STOCK OF I-TRAX, INC. BY THE ABOVE NAMED
INVESTOR(S) IS ACCEPTED THIS ________ DAY OF ______________________, 2003.
I-TRAX, INC.
By:_____________________________________
Name: Xxxxx X. Xxxxxx
Title: CEO
AMENDMENT TO SUBSCRIPTION AGREEMENT
-----------------------------------
I-trax, Inc.
One Xxxxx Square
000 X. 00xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Re: Subscription Agreement Between I-trax, Inc. And the Undersigned
Accepted as of December 26, 2003 (the "Subscription Agreement")
Ladies and Gentlemen:
Reference is made to the Subscription Agreement. Capitalized
terms used herein and not otherwise defined herein have the meaning given to
such terms in the Subscription Agreement.
Investor and the Company desire to amend the Subscription
Agreement in the manner provided below. Accordingly, Investor and the Company,
intending to be legally bound, hereby acknowledge and agree as follows:
1. Section 3(A)(e) of the Subscription Agreement be and it
hereby is amended and restated in its entirety as follows:
(e) [Intentionally Deleted]
2. Section 3(A)(f) of the Subscription Agreement be and it
hereby is amended and restated in its entirety as follows:
(f) [Intentionally Deleted]
3. The form of Designations attached as Exhibit A to the
Subscription Agreement be and it is hereby amended and restated in its entirely
in the form of Designations attached as Exhibit A to this Amendment.
4. This Amendment shall be governed by the laws of the State
of Delaware as a contract entered into between residents of such state.
5. Except as expressly modified by this Amendment, the terms
and provisions of the Subscription Agreement shall remain in full force and
effect and effect and references in the Subscription Agreement to "this
Agreement", "the Agreement", "hereunder", "herein", "hereof" and words of like
effect shall mean the Subscription Agreement as amended by this Amendment. If
there is any conflict between the provisions of the Subscription Agreement and
the provisions of this Amendment, the provisions of this Amendment shall
control.
6. This Amendment may be changed, modified or amended only by
an agreement in writing signed by the Company and the Investor.
7. This Amendment may be executed in one or more counterparts
and/or by facsimile, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
[Signatures appear on following page.]
INVESTOR SIGNATURE PAGE FOR I-TRAX, INC. AMENDMENT TO SUBSCRIPTION AGREEMENT
Please print or type, Use ink only. (All Parties Must Sign)
INVESTOR
--------------------------------------------------
Name of Investor (Print)
--------------------------------------------------
Name of Joint Investor (if any) (Print)
--------------------------------------------------
Signature of Investor
--------------------------------------------------
Signature of Joint Investor (if any)
--------------------------------------------------
Capacity of Signatory (if applicable)
--------------------------------------------------
Social Security or Taxpayer Identification Number
Investor Mail Address:
--------------------------------------------------
Xxxxxx Xxxxxxx
--------------------------------------------------
Xxxx Xxxxx Zip Code
Telephone: ( ) Fax: ( )
--------------------------------------------------
Email:_____________________________________________
Address for Delivery of Shares of Preferred Stock (if different from above):
--------------------------------------------------
--------------------------------------------------
City State Zip Code
I-TRAX, INC.
By:_____________________________________
Name: Xxxxx X. Xxxxxx
Title: CEO
Date:
