Exhibit 10.1
FORM OF SUBSCRIPTION AGREEMENT
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[Placement Agent]
[address]
[address]
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 _________ placement agent for the Offering is
_________________ (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.
(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)
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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 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
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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 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.
(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).
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(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.
(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
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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 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 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").
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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 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
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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 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
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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 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.
(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
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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 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.
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(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 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
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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 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 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.
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(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.
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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: $_________________________
________________________________________
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:
________________________________________
Street Address
________________________________________
City State Zip Code
Telephone: ( ) Fax: ( )
Email:_____________________________________________
Address for Delivery of Shares of Preferred Stock (if different from above):
________________________________________
________________________________________
City State Zip Code
If other than individual check one and indicate
capacity of signatory under the signature:
[ ] Trust
[ ] Estate
[ ] Uniform Gifts to Minors Act, State of __________
[ ] Attorney-in-fact
[ ] Corporation
[ ] Other
If Joint Ownership, Check one:
[ ] Joint Tenants with Right of Survivorship
[ ] Tenants in Common
[ ] Tenants by the Entirety
[ ] Community by Property
Backup Withholding Statement:
[ ] Please check this box only if the investor is subject to
backup withholding
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.
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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
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