Item
1.01 Entry
into a Material Definitive Agreement.
On March 14, 2008, I-trax, Inc., a
Delaware corporation (
“I-trax”
), entered into an
Agreement and Plan of Merger (the
“Merger Agreement”
) with
Walgreen Co., an Illinois corporation (
“Walgreens”
), and Putter
Acquisition Sub, Inc., a Delaware corporation (the
“Acquisition
Sub”
).
Pursuant to the Merger Agreement, and
subject to its terms and conditions, Walgreens will commence tender offers (the
“Offers”
) to acquire all
of the outstanding shares of I-trax common stock, par value $0.001 per share
(the “
Common Stock
Offer
”) and all of the outstanding shares of I-trax Series A Convertible
Preferred Stock, par value $0.001 (the “
Preferred Stock
Offer
”). By validly tendering and not withdrawing shares of
I-trax common stock in the Common Stock Offer, each I-trax stockholder will
receive $5.40 in cash for each share, without interest. By validly
tendering and not withdrawing shares of I-trax Series A Convertible Preferred
Stock in the Preferred Stock Offer, each I-trax stockholder will receive $54.00
plus the Dividend Amount (described below) payable for each share in cash,
without interest thereon.
As soon as practicable after the
consummation of the Offers and subject to the satisfaction or waiver of certain
conditions, the Acquisition Sub will merge with and into I-trax (the
“Merger”
), with I-trax
continuing as the surviving corporation and a wholly-owned subsidiary of
Walgreens. In the Merger, all shares of I-trax common stock not
validly tendered in the Common Stock Offer will convert into a right to receive
$5.40 for each share and all shares of I-trax preferred stock not validly
tendered in the Preferred Stock Offer will convert into the right to receive
$54.00 plus the Dividend Amount payable for each share. The Dividend
Amount will be calculated by dividing the value of accrued and unpaid dividends
on tendered preferred shares at the time of acceptance of the Preferred Stock
Offer, or effectiveness of the Merger, as applicable, by $3.84 (which equals the
average market price of I-trax’s common stock during the ten trading days prior
to, and including, March 14, 2008, calculated in accordance with the terms of
the preferred shares) and multiplying the result by $5.40. Shares
held by Walgreens, I-trax or any of their respective subsidiaries will be
cancelled in the Merger.
The obligation of Walgreens to accept
and pay for the shares tendered in the Offers is subject to the satisfaction or
waiver of a number of closing conditions set forth in the Merger Agreement,
including among others, the expiration or termination of applicable waiting
periods under the Hart-Scott-Rodino Antitrust Improvements
Act. Walgreen’s obligation to accept and pay for the shares tendered
in the Offers is also conditioned upon I-trax stockholders validly tendering and
not withdrawing more than 50% of the outstanding shares of I-trax common stock,
on a fully diluted basis. Walgreens may not waive this condition
without I-trax’s consent.
I-trax and Walgreens make certain
representations and warranties in the Merger Agreement. The
representations and warranties allocate risk between the parties and do not
establish matters as facts. If the representations and warranties of
a party prove to be untrue because of changed circumstances or otherwise, the
other party may have the right not to close the Merger. The
representations and warranties may also be subject to a contractual standard of
materiality different from the standard generally applicable under the
securities laws.
The Merger Agreement also includes
customary covenants of I-trax, Walgreens and Acquisition Sub. I-trax
has agreed to operate its business in the ordinary course until the Merger is
consummated. I-trax has also agreed not to solicit or initiate
discussions with third parties about acquiring I-trax and I-trax is restricted
in how it can respond to any unsolicited proposal. Walgreens
has agreed not to complete its acquisition of Whole Health Management, Inc.
until the expiration or termination of the waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act applicable to the
Merger.
The Merger Agreement includes customary
termination provisions, and, under certain circumstances, I-trax may be required
to pay Walgreens a termination fee of $8,200,000 or Walgreens may be required to
pay I-trax a reverse termination fee of $10,000,000.
A copy of the Merger Agreement is
attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated
herein by reference. The foregoing description of the Merger
Agreement does not purport to be complete and is qualified in its entirety by
reference to the Merger Agreement.
Additional
Information About the Offers and Where to Find It.
The
Offers referred to in this Current Report on Form 8-K have not yet
commenced. This report is neither an offer to purchase nor a
solicitation of an offer to sell any securities.
In
connection with the Offers, Walgreens intends to file a tender offer statement
on Schedule TO and related materials with the Securities and Exchange Commission
(the “SEC”), and I-trax will file a solicitation/recommendation statement on
Schedule 14D-9 with the SEC. Investors and security holders are strongly advised
to read these documents when they become available because they will contain
important information about the Offers and the proposed Merger. Free copies of
materials, which will be filed by Walgreens and I-trax, will be available at the
SEC’s Web site at www.sec.gov, or with respect to Walgreens materials, at
www.walgreens.com, and also will be available, without charge, by directing
requests to Walgreens, and with respect to I-trax materials, at www.i-trax.com,
and will also be available, without charge, by directing requests to
I-trax.
Forward-Looking
Statements.
This
Current Report on Form 8-K contains “forward-looking
statements.” These forward-looking statements, which may include, but
are not limited to, statements concerning the financial condition, results of
operations and businesses of I-trax and Walgreens and the benefits expected to
result from the contemplated transaction are based on management’s current
expectations and estimates and involve risks and uncertainties that could cause
actual results or outcomes to differ materially from those contemplated by the
forward-looking statements.
Factors
that could cause or contribute to such differences may include, but are not
limited to, the risk that the conditions relating to the required minimum tender
of I-trax shares or regulatory clearance might not be satisfied in a timely
manner or at all, the occurrence of any event, change or other circumstance that
could give rise to the termination of the Merger Agreement, the failure to
satisfy other conditions to completion of the Merger, unanticipated
expenditures, changing relationships with customers, suppliers and strategic
partners, conditions of the economy and other factors described in the most
recent periodic reports filed with the SEC by I-trax.