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EXHIBIT 10.18(A)
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
CRESCENT INTERNATIONAL LTD.
AND
PRACTICEWORKS, INC.
DATED AS OF JANUARY __, 2001
This STOCK PURCHASE AGREEMENT is entered into as of the ___ day of
January, 2001 (this "Agreement"), by and between Crescent International Ltd.
(the "Investor"), an entity organized and existing under the laws of Bermuda,
and PracticeWorks, Inc., a corporation organized and existing under the laws of
the State of Delaware (the "Company").
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Investor,
from time to time as provided herein, and the Investor shall purchase, up to
$35,000,000 of the Common Stock (as defined below); and
WHEREAS, such investments will be made in reliance upon the provisions
of Section 4(2) ("Section 4(2)"), Section 3(a)(9) ("Section 3(a)(9)") and
Regulation D ("Regulation D") of the U.S. Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder (the "Securities Act"),
and/or upon such other exemption from the registration requirements of the
Securities Act as may be available with respect to any or all of the investments
in Common Stock to be made hereunder.
NOW, THEREFORE, in consideration of the premises, representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. "Affiliate" shall mean any Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by, or
is under direct or indirect common control with any other Person. For the
purposes of this definition, "control," when used with respect to any Person,
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise, and the term "controls" and "controlled" have meanings correlative
to the foregoing.
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Section 1.2. "Bid Price" shall mean the closing bid price as
reported under Section 10.2 of this Agreement.
Section 1.3. "Capital Shares" shall mean the Common Stock and any
shares of any other class of common stock whether now or hereafter authorized,
having the right to participate in the distribution of dividends (as and when
declared) or assets (upon liquidation of the Company).
Section 1.4. "Closing" shall mean one of the closings of a
purchase and sale of the Common Stock and the issuance of the Warrants pursuant
to Section 2.1 of this Agreement.
Section 1.5. "Closing Date" shall mean, with respect to a Closing,
the second Trading Day following the Sale Date related to such Closing, provided
all conditions to such Closing have been satisfied on or before such Trading
Day.
Section 1.6. "Closing Statement" shall mean the closing statement
executed by the Company and the Investor on the Subscription Date and on each
Closing Date, setting forth the actions taken by the Company and the Investor on
the Subscription Date and on such Closing Date, as applicable, and the amounts
due to the Company and the Investor on the Subscription Date and such Closing
Date, as applicable, in the form of Exhibit A attached hereto.
Section 1.7. "Commitment Period" shall mean the period commencing
on the Subscription Date and expiring on the earlier to occur of (i) the date on
which the Investor shall have purchased Commitment Shares pursuant to this
Agreement for an aggregate Purchase Price of the Maximum Commitment Amount, (ii)
the date this Agreement is terminated pursuant to Section 2.5 hereof, or (iii)
the date occurring 24 months from the Subscription Date.
Section 1.8. "Commitment Shares" shall mean the First Sale Shares
and the Subsequent Sale Shares, collectively.
Section 1.9. "Common Stock" shall mean the Company's common stock,
$0.01 par value per share.
Section 1.10. "Condition Satisfaction Date" shall have the meaning
set forth in Section 7.2 of this Agreement.
Section 1.11. "Daily Trading Value" shall mean, on any Trading Day,
the Bid Price multiplied by the trading volume of the Common Stock.
Section 1.12. "Damages" shall mean any and all losses, claims,
damages, liabilities, costs and expenses (including, without limitation, any and
all investigative, legal and other expenses reasonably incurred in connection
with, and any and all reasonable amounts paid in defense or settlement of, any
action, suit or proceeding between any indemnified party and any indemnifying
party or between any indemnified party and any third party, or otherwise, or any
claim asserted).
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Section 1.13. "Distribution" shall mean the pro rata distribution
to holders of common stock, par value $0.001 per share, of InfoCure Corporation,
a Delaware corporation and the indirect parent of the Company, of all of the
Common Stock of the Company.
Section 1.14. "Effective Date" with respect to each Sale of
Registrable Securities shall mean the earlier to occur of: (i) the applicable
date on which the SEC has declared effective a Registration Statement
registering resale of Registrable Securities as set forth in the Registration
Rights Agreement and (ii) the date on which such Registrable Securities first
become eligible for resale pursuant to Rule 144 of the Securities Act.
Section 1.15. "Exchange Act" shall mean the U.S. Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
Section 1.16. "First Sale" shall have the meaning set forth in
Section 2.1(a) of this Agreement.
Section 1.17. "First Sale Shares" shall have the meaning set forth
in Section 2.1(a) of this Agreement.
Section 1.18. "Incentive Warrant" shall mean the Incentive Warrant
in the form of Exhibit B hereto issued pursuant to Section 2.1(c) of this
Agreement.
Section 1.19. "Incentive Warrant Shares" shall mean all shares of
Common Stock issued or issuable pursuant to exercise of the Incentive Warrant.
Section 1.20. "Investment Amount" shall mean the dollar amount to
be invested by the Investor to purchase Commitment Shares with respect to any
Sale Date as notified by the Company to the Investor in accordance with Section
2.3 hereof.
Section 1.21. "Legend" shall have the meaning specified in Section
8.1 of this Agreement.
Section 1.22. "Material Adverse Effect" shall mean any effect on
the business, operations, properties or financial condition of the Company that
is material and adverse to the Company or to the Company and such other entities
controlling or controlled by the Company, taken as a whole, and/or any
condition, circumstance, or situation that would prohibit or otherwise interfere
with the ability of the Company to enter into and perform its obligations under
any of (i) this Agreement, (ii) the Registration Rights Agreement and (iii) the
Warrants.
Section 1.23. "Maximum Commitment Amount" shall mean $35,000,000.
Section 1.24. "Maximum Sale Amount" shall mean (i) with respect to
the First Sale, up to 2.75 times the average of the Daily Trading Values and
(ii) with respect to each Subsequent Sale, up to 2.00 times the average of the
Daily Trading Values, during the 22 Trading Day period immediately preceding the
applicable Sale Notice Date, and in each case subject to a maximum amount of
$2,500,000 unless a higher amount is agreed to in writing by the Company and the
Investor. If (A) the Threshold Bid Price Condition is not met or (B) the average
of the Daily
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Trading Values during the 22 Trading Day period immediately preceding the
applicable Sale Notice Date is less than $150,000, then the Maximum Sale Amount
shall be $50,000.
Section 1.25. "Minimum Time Interval" shall mean the later of 22
Trading Days from the Effective Date relating to the previous Closing or 22
Trading Days from the previous Sale Date.
Section 1.26. "NASD" shall mean the National Association of
Securities Dealers, Inc.
Section 1.27. "Outstanding" when used with reference to Common
Stock or Capital Shares (collectively the "Shares"), shall mean, at any date as
of which the number of such Shares is to be determined, all issued and
outstanding Shares, and shall include all such Shares issuable in respect of
outstanding scrip or any certificates representing fractional interests in such
Shares; provided, however, that "Outstanding" shall not refer to any such Shares
then directly or indirectly owned or held by or for the account of the Company.
Section 1.28. "Person" shall mean an individual, a corporation, a
partnership, an association, a trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
Section 1.29. "Preferred Stock" shall mean shares of Series C
Convertible Preferred Stock, par value $0.01 per shares, of the Company.
Section 1.30. "Principal Market" shall mean the Nasdaq National
Market, the Nasdaq SmallCap Market, the American Stock Exchange, the Electronic
Bulletin Board or the New York Stock Exchange, whichever is at the time the
principal trading exchange or market for the Common Stock.
Section 1.31. "Protective Warrant" or "Protective Warrants" shall
mean any and all Protective Warrant(s) in the form of Exhibit C hereto issued
pursuant to Section 2.1(b) of this Agreement.
Section 1.32. "Protective Warrant Shares" shall mean all shares of
Common Stock issued or issuable pursuant to exercise of the Protective Warrants.
Section 1.33. "Purchase Price" shall mean, (i) with respect to a
Sale, 94% of the lowest three consecutive Bid Prices during the 22 Trading Day
period immediately preceding and ending on the applicable Sale Date and (ii)
with respect to an Effective Date, the 22 Trading Day period immediately
preceding such Effective Date.
Section 1.34. "Registrable Securities" shall mean (i) the
Commitment Shares, (ii) the Warrant Shares and (iii) any securities issued or
issuable with respect to any of the foregoing by way of exchange, stock dividend
or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (w) the applicable Registration Statement has been
declared effective by the SEC and all such Registrable Securities have been
disposed of pursuant to the applicable Registration Statement, (x) all such
Registrable Securities have been sold under circumstances under which all of the
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applicable conditions of Rule 144 (or any similar provision then in force) under
the Securities Act ("Rule 144") are met, (y) all such Registrable Securities
have been otherwise transferred to holders 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 (z) in the opinion of counsel to the Company, which
counsel shall be reasonably acceptable to the Investor, all such Registrable
Securities may be sold by the Investor without registration and without any
time, volume or manner limitations pursuant to Rule 144(k) (or any similar
provision then in effect) under the Securities Act.
Section 1.35. "Registration Rights Agreement" shall mean the
registration rights agreement by and between the Company and the Investor, in
the form of Exhibit D hereto.
Section 1.36. "Registration Statement" or "Registration Statements"
shall have the meaning set forth in the Registration Rights Agreement.
Section 1.37. "Regulation D" shall have the meaning set forth in
the recitals of this Agreement.
Section 1.38. "Representative" of a party shall mean any officer,
director, employee, agent, counsel, accountant, financial advisor, consultant or
other representative of such party.
Section 1.39. "Sale" shall mean the First Sale together with any
and all Subsequent Sales.
Section 1.40. "Sale Date" shall mean the Trading Day on which a
Sale Notice Period expires.
Section 1.41. "Sale Fees" shall have the meaning specified in
Section 10.1(b) hereof.
Section 1.42. "Sale Notice" shall mean a written notice to the
Investor setting forth the intended Closing Date, the Investment Amount and the
number of shares of Common Stock that the Company intends to require the
Investor to purchase pursuant to the terms of this Agreement.
Section 1.43. "Sale Notice Date" shall mean the Trading Day during
the Commitment Period upon which a Sale Notice to sell Common Stock to the
Investor is deemed delivered pursuant to Section 2.3(b) hereof.
Section 1.44. "Sale Notice Period" shall mean a period ending 7
Trading Days after a Sale Notice Date.
Section 1.45. "SEC" shall mean the U.S. Securities and Exchange
Commission.
Section 1.46. "SEC Documents" shall mean all filings made by the
Company with the SEC pursuant to the Securities Act or the Exchange Act, as of
the time in question until such time the Company no longer has an obligation to
maintain the effectiveness of a Registration Statement as set forth in the
Registration Rights Agreement.
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Section 1.47. "Section 3(a)(9)" shall have the meaning set forth in
the recitals of this Agreement.
Section 1.48. "Section 4(2)" shall have the meaning set forth in
the recitals of this Agreement.
Section 1.49. "Securities Act" shall have the meaning set forth in
the recitals of this Agreement.
Section 1.50. "Short Sale" shall have the meaning specified in Rule
3b-3 of the Exchange Act.
Section 1.51. "Strategic Investor" shall mean any Person (i) that
intends to participate in the corporate governance of the Company or in the
conduct of its business or (ii) as to whom the Company's Board of Directors has
made a determination in good faith that such Person will develop a material
strategic relationship with the Company, including without limitation an
acquisition of another entity or assets, in connection with and related to the
Company's present or future business.
Section 1.52. "Subscription Date" shall mean the date on which this
Agreement is executed and delivered by the parties hereto.
Section 1.53. "Subscription Fee" shall have the meaning set forth
in Section 10.1(a) hereof.
Section 1.54. "Subsequent Sale" shall have the
meaning set forth in Section 2.1(d) of this Agreement.
Section 1.55. "Subsequent Sale Shares" shall have the meaning set
forth in the Section 2.1(d) of this Agreement.
Section 1.56. "Subsidiary" shall mean any Person in which the
Company, directly or indirectly through Subsidiaries or otherwise, beneficially
owns more than 50% of either the equity interests in, or the voting control of,
such Person.
Section 1.57. "Threshold Bid Price Condition" shall mean that on
each Trading Day during any Sale Notice Period the Bid Price must not be less
than 75% of the Reference Price of the Company's Series C Convertible Preferred
Stock, par value $0.01 per share, as such terms are defined in the Certificate
of Designations, Powers, Preferences and Rights of the Series C Convertible
Preferred Stock of the Company, as filed by the Company with the Secretary of
State of the State of Delaware.
Section 1.58. "Trading Day" shall mean any day during which the
Principal Market shall be open for business.
Section 1.59. "Transfer Agent Instructions" shall have the meaning
set forth in Section 2.4(a) of this Agreement.
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Section 1.60. "Underwriter" shall mean any underwriter
participating in any disposition of the Registrable Securities on behalf of the
Investor pursuant to a Registration Statement.
Section 1.61. "Warrants" shall mean the Protective Warrants and the
Incentive Warrant.
Section 1.62. "Warrant Shares" shall mean the Protective Warrant
Shares and the Incentive Warrant Shares.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK AND WARRANTS;
TERMINATION OF OBLIGATIONS
Section 2.1. Investments.
(a) First Sale. Upon the terms and conditions set forth herein
(including, without limitation, the provisions of Section 2.3 and
Article VII hereof), the Company may exercise the First Sale by the
delivery of a Sale Notice. On the Closing Date relating to the First
Sale, the Company shall issue and sell and the Investor shall purchase
such number of shares of Common Stock for the Investment Amount stated
in the applicable Sale Notice, which amount shall not exceed the
Maximum Sale Amount, and at the applicable Purchase Price as determined
in accordance with the terms and conditions set forth herein (such
transaction is referred to herein as the "First Sale," and all such
shares are referred to herein as the "First Sale Shares").
(b) Protective Warrants. In partial consideration for the Investor
entering into this Agreement if the Company elects to exercise its
right with respect to any Sale to require the Investor to purchase
shares of Common Stock that have not been previously registered and not
covered by an effective Registration Statement filed with the SEC, on
each Closing Date relating to each such Sale, the Company shall issue
and deliver to the Investor a Protective Warrant with an exercise price
of $0.01 for each share of Common Stock.
(c) Incentive Warrant. In partial consideration for the Investor
entering into this Agreement, on the applicable Closing Date of the
First Sale the Company shall issue and deliver to the Investor the
Incentive Warrant, with an exercise price equal to 150% of the Purchase
Price of the First Sale.
(d) Subsequent Sales. Upon the terms and conditions set forth herein
(including, without limitation, the provisions of Article VII hereof),
on any Sale Notice Date the Company may exercise a Subsequent Sale by
the delivery of a Sale Notice. On the Closing Date relating to each
Subsequent Sale, the Company shall issue and sell and the Investor
shall purchase such number of shares of Common Stock for the Investment
Amount stated in the applicable Sale Notice, which amount shall not
exceed the Maximum Sale Amount and at the applicable Purchase Price
determined in accordance with the terms and conditions set forth
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herein (each such transaction is referred to herein as a "Subsequent
Sale," and all such shares are referred to herein as the "Subsequent
Sale Shares").
Section 2.2. Twenty Percent Limitations. Unless the Company
obtains the requisite approval of its shareholders in accordance with the
corporate laws of Delaware and the applicable rules of the Principal Market, no
more than 19.9% of the Outstanding shares of Common Stock may be issued and sold
pursuant to Sales and the Warrants, provided, that with respect to the issuance
of more than 19.9% of the Outstanding shares of Common Stock pursuant to the
Warrants, the Investor has the right to require the Company to seek such
shareholder approval, and upon the written request of the Investor the Company
shall as soon as practicable after such request prepare and file with the SEC a
proxy statement to be distributed to shareholders of the Company for the purpose
of soliciting proxies for use at an annual or special meeting of shareholders of
the Company at which such shareholder approval is sought, and in which proxy
statement the Company will recommend to its shareholders the foregoing approval.
Section 2.3. Mechanics.
(a) Sale Notice. At any time during the Commitment
Period, the Company may deliver a Sale Notice to the Investor, subject to the
conditions set forth in Section 7.2. Notwithstanding the foregoing, the Company
may not deliver a Sale Notice to the Investor less than 51 Trading Days after
the effective date of the Distribution.
(b) Date of Delivery of Sale Notice. A Sale Notice shall
be deemed delivered on (i) the Trading Day it is received by facsimile or
otherwise by the Investor if such notice is received prior to 12:00 noon New
York time, or (ii) the immediately succeeding Trading Day if it is received by
facsimile or otherwise after 12:00 noon New York time on a Trading Day or at any
time on a day which is not a Trading Day. No Sale Notice will be deemed
delivered on a day that is not a Trading Day.
Section 2.4. Closings.
(a) Subscription Date. On the Subscription Date (i) the
Company and the Investor shall execute the Registration Rights Agreement, (ii)
the Company shall execute and deliver irrevocable instructions to the transfer
agent, in the form of Exhibit E attached hereto (the "Transfer Agent
Instructions"), to prepare and deliver to the Investor a share certificate in
the name of the Investor and in the amount of the applicable Commitment Shares,
the transfer agent shall confirm and accept such instructions, and a copy of
such instructions shall be delivered to the Investor's legal counsel, (iii) the
Investor shall deliver to the Company and the Company shall execute a Closing
Statement, and (iv) the Company shall pay to the Investor the applicable fees
and costs determined in accordance with Section 10.1, by wire transfer of
immediately available funds to the account designated in writing by the
Investor. In addition, on or prior to the Subscription Date, each of the Company
and the Investor shall deliver to the other all documents, instruments and
writings required to be delivered or reasonably requested by either of them
pursuant to this Agreement in order to implement and effect the transactions
contemplated herein.
(b) Closing Date. On each Closing Date (i) the Company
shall issue and
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deliver to the Investor a Protective Warrant, if required by Section 2.1(b)
hereof, (ii) the Company shall instruct the transfer agent to prepare and
deliver to the Investor a share certificate in the name of the Investor and in
the amount of the applicable Commitment Shares, in accordance with the Transfer
Agent Instructions, (iii) the Investor shall deliver to the Company and the
Company shall execute a Closing Statement, and (iv) the Investor shall deliver
to the Company the Investment Amount specified in the Closing Statement, less
applicable fees and costs determined in accordance with Section 10.1 and
Schedule 10.1, by wire transfer of immediately available funds to the account
designated in writing in the Sale Notice. On the Closing Date relating to the
First Sale, the Company shall deliver the Incentive Warrant to the Investor. In
addition, on or prior to each Closing Date, each of the Company and the Investor
shall deliver to the other all documents, instruments and writings required to
be delivered or reasonably requested by either of them pursuant to this
Agreement in order to implement and effect the transactions contemplated herein.
Section 2.5. Termination of Agreement and Investment Obligation.
The Company shall have the right to terminate this Agreement at any time upon 30
days' written notice to the Investor. The Investor shall have the right to
immediately terminate this Agreement (including with respect to any Sale, notice
of which has been given but the applicable Closing Date has not yet occurred) in
accordance with Section 6.12 or in the event that: (i) any Registration
Statement has not been declared effective by the SEC within the applicable time
periods set forth in Section 1.1 of the Registration Rights Agreement, (ii)
there shall occur any stop order or suspension of the effectiveness of the
Registration Statement for an aggregate of 30 Trading Days during the Commitment
Period, or (iii) the Company shall at any time fail to comply with the
requirements of Section 6.2, 6.3, 6.4, 6.5, 6.6, 6.8 or 6.9.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor represents and warrants to the Company that:
Section 3.1. Intent. The Investor is entering into this Agreement
for its own account, and the Investor has no view to the distribution of the
Registrable Securities or Warrants and has no present arrangement (whether or
not legally binding) at any time to sell, assign, transfer, pledge, encumber,
hypothecate or otherwise dispose of the Registrable Securities or Warrants to or
through any person or entity; provided, however, that by making the
representations herein, the Investor does not agree to hold the Registrable
Securities or Warrants for any minimum or other specific term and reserves the
right to dispose of the Registrable Securities or Warrants at any time pursuant
to the Registration Statement and in accordance with federal and state
securities laws applicable to such disposition.
Section 3.2. Sophisticated Investor. The Investor is a
sophisticated investor (as described in Rule 506(b)(2)(ii) of Regulation D) and
an accredited investor (as defined in Rule 501 of Regulation D), and the
Investor has such experience in business and financial matters that it is
capable of evaluating the merits and risks of an investment in the Common Stock.
The Investor acknowledges that an investment in the Common Stock is speculative
and involves a high degree of risk.
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Section 3.3. Authority. Each of this Agreement and the
Registration Rights Agreement has been duly authorized by all necessary
corporate action and no further consent or authorization of the Investor, or its
Board of Directors or stockholders is required. Each of this Agreement and the
Registration Rights Agreement was validly executed and delivered by the Investor
and each is a valid and binding agreement of the Investor enforceable against it
in accordance with its terms, subject to applicable bankruptcy, insolvency, or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.
Section 3.4. Not an Affiliate. The Investor is not an officer,
director or "affiliate" (as that term is defined in Rule 405 of the Securities
Act) of the Company.
Section 3.5. Organization and Standing. The Investor is duly
organized, validly existing, and in good standing under the laws of Bermuda.
Section 3.6. Absence of Conflicts. The execution and delivery of
this Agreement and any other document or instrument contemplated hereby, and the
consummation of the transactions contemplated thereby, and compliance with the
requirements thereof, will not to the Investor's knowledge (a) violate any law,
rule, regulation, order, writ, judgment, injunction, decree or award binding on
the Investor, (b) violate any provision of any indenture, instrument or
agreement to which Investor is a party or is subject, or by which the Investor
or any of its assets is bound, (c) conflict with or constitute a material
default thereunder, (d) result in the creation or imposition of any lien
pursuant to the terms of any such indenture, instrument or agreement, or
constitute a breach of any fiduciary duty owed by the Investor to any third
party, or (e) require the approval of any third-party (that has not been
obtained) pursuant to any material contract to which the Investor is subject or
to which any of its assets, operations or management may be subject.
Section 3.7. Disclosure; Access to Information. The Investor has
received or had access to all documents, records, books and other information
pertaining to Investor's investment in the Company that have been requested by
Investor. The Investor has received and reviewed copies of the SEC Documents.
Section 3.8. Manner of Sale. At no time was Investor presented
with or solicited by or through any leaflet, public promotional meeting,
television advertisement or any other form of general solicitation or
advertising. The Investor has had an existing business relationship with the
Company or its Affiliates since September 1998 and the Investor did not become
aware of the Company as a result of the Company filing a Form S-1 or Form 10
with the SEC, pursuant to which the Company plans to effect the Distribution.
Section 3.9. Resale Restrictions. Investor acknowledges that any
Registrable Securities and Warrants to be acquired by Investor have not been
registered under the federal securities laws or any applicable state securities
laws in reliance upon exemptions available for non-public or limited offerings.
Investor understands that it must bear the economic risk of the investment in
the Registrable Securities and Warrants because the Registrable Securities and
Warrants have not been so registered and therefore are subject to restrictions
upon transfer such that they may not be sold or otherwise transferred unless
registered under the applicable
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securities laws or an exemption from such registration is available. The
Investor will not reoffer, sell, assign, transfer, pledge, encumber, hypothecate
or otherwise dispose of any Registrable Securities or the Warrants in the
absence of an effective registration statement, qualification or authorization
relating thereto under federal and applicable state securities laws or an
opinion of qualified counsel satisfactory to the Company to the effect that the
proposed transaction in the Registrable Securities or the Warrants will neither
constitute or result in any violation of the federal or state securities laws.
Subject to Section 8.1 of this Agreement, any certificate or other document that
may be issued representing any shares of Registrable Securities or the Warrants
may be endorsed with a legend to this effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor that except as set forth in
the schedules included in the Company Disclosure Schedule attached hereto:
Section 4.1. Organization of the Company. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.
Except as set forth in the SEC Documents, the Company does not own more than 50%
of the outstanding capital stock of or control any other Person. The Company is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, other than those in which the
failure so to qualify would not have a Material Adverse Effect.
Section 4.2. Authority. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Registration Rights Agreement and the Warrants and to issue
the Commitment Shares, the Warrants and the Warrant Shares; (ii) the execution
and delivery of this Agreement and the Registration Rights Agreement, and the
execution, issuance and delivery of the Warrants, by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action, and no further consent or
authorization of the Company or its Board of Directors or stockholders is
required; and (iii) each of this Agreement and the Registration Rights Agreement
has been duly executed and delivered, and the Warrants at the time of their
delivery will be duly executed, issued and delivered, by the Company and at the
time of their delivery will constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application.
Section 4.3. Corporate Documents. The Company has furnished or
made available to the Investor true and correct copies of the Company's
Certificate of Incorporation, as amended and in effect on the date hereof (the
"Certificate"), and the Company's By-Laws, as amended and in effect on the date
hereof (the "By-Laws").
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Section 4.4. Books and Records. The minute books and other similar
records of the Company and its subsidiaries as made available to Investor prior
to the execution of this Agreement contain a true and complete record, in all
material respects, of all action taken at all meetings and by all written
consents in lieu of meetings of the stockholders, the boards of directors and
committees of the boards of directors of the Company and the subsidiaries. The
stock transfer ledgers and other similar records of the Company and the
subsidiaries as made available to Investor prior to the execution of this
Agreement accurately reflect all record transfers prior to the execution of this
Agreement in the capital stock of the Company and the subsidiaries. Neither the
Company nor any subsidiary has any of such minute books, stock transfer ledgers
and other similar records recorded, stored, maintained, operated or otherwise
wholly or partly dependent upon or held by any means (including any electronic,
mechanical or photographic process, whether computerized or not) which
(including all means of access thereto and therefrom) are not under the
exclusive ownership and direct control of the Company or a subsidiary.
Section 4.5. Capitalization. As of the date of this Agreement, the
authorized capital stock of the Company consists of 100,000,000 shares of Common
Stock, of which 100 shares are issued and outstanding. There are no options,
warrants, or rights to subscribe to, securities, rights or obligations
convertible into or exchangeable for or giving any right to subscribe for any
shares of capital stock of the Company. All of the outstanding shares of Common
Stock of the Company have been duly and validly authorized and issued and are
fully paid and nonassessable. Following the Distribution, the outstanding
capital stock of the Company and options, warrants, or rights to subscribe to,
securities, rights or obligations convertible into or exchangeable for or giving
any right to subscribe for any shares of capital stock of the Company will be as
set forth on Schedule 4.5, which shall be delivered to the Investor two Trading
Days after the Distribution.
Section 4.6. Registration and Listing of Common Stock. The Company
has registered its Common Stock pursuant to Section 12(b) or 12(g) of the
Exchange Act and is in full compliance with all reporting requirements of the
Exchange Act, and the Company has applied for the listing or quotation of its
Common Stock, and upon official notice to the Principal Market of the
consummation of the Distribution, such Common Stock will be listed or quoted on
the Principal Market.
Section 4.7. Financial Statements. Prior to the execution of this
Agreement, the Company has delivered to the Investor true and complete copies of
the following financial statements, which reflect the Company's operations as a
division of InfoCure Corporation, a Delaware corporation and the indirect parent
of the Company:
(a) the audited balance sheets of the Company and its
consolidated subsidiaries as of December 31, 1999 and 1998, and the related
audited consolidated statements of operations, stockholders' equity and cash
flows for each of the fiscal years then ended and the eleven months ended
December 31, 1997, together with a true and correct copy of the report on such
audited information by BDO ▇▇▇▇▇▇▇ LLP, and all letters from such accountants
with respect to the results of such audits; and
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(b) the unaudited balance sheets of the Company and its
consolidated subsidiaries as of September 30, 2000, and the related unaudited
consolidated statements of operations and stockholders' equity for the portion
of the fiscal year then ended.
The financial statements of the Company delivered to the Investor have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto or (ii) in
the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
Section 4.8. SEC Documents. The Company has delivered or made
available to the Investor true and complete copies of the SEC Documents
(including, without limitation, proxy information and solicitation materials).
The Company has not provided to the Investor any information that, according to
applicable law, rule or regulation, should have been disclosed publicly prior to
the date hereof by the Company, but which has not been so disclosed. As of their
respective dates, the SEC Documents complied as to form and substance in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and other federal, state and local laws, rules and
regulations applicable to such SEC Documents, and none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC
Documents comply as to form and substance in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC or other applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the extent
they may include summary notes and may be condensed or summary statements) and
fairly present in all material respects the financial position of the Company as
of the dates thereof and the results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
Section 4.9. Exemption from Registration; Valid Issuances; New
Issuances. The sale and issuance of the Warrants, the Warrant Shares, and the
Commitment Shares in accordance with the terms and on the basis of the
representations and warranties set forth in this Agreement, may and will be
properly issued pursuant to Section 4(2), Section 3(a)(9), Regulation D and/or
any applicable state law. When issued and paid for as provided herein and in the
Warrants, the Commitment Shares and the Warrant Shares will be duly and validly
issued, fully paid, and nonassessable. Neither the sales of the Commitment
Shares, the Warrants, or the Warrant Shares pursuant to, nor the Company's
performance of its obligations under, this Agreement, the Registration Rights
Agreement or the Warrants will (i) result in the creation or imposition of any
liens, charges, claims or other encumbrances upon the Commitment Shares, the
Warrant Shares, or any of the assets of the Company, or (ii) entitle the holders
of Outstanding Capital Shares to
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preemptive or other rights to subscribe to or acquire the Capital Shares or
other securities of the Company. The Commitment Shares and the Warrant Shares
will not subject the Investor to personal liability by reason of the ownership
thereof. The Commitment Shares and Warrant Shares have been duly authorized by
the Company, but have not been issued (whether or not subsequently repurchased
by the Company) to any Person, and when issued to the Investor in accordance
with this Agreement and the Warrants will not have been issued (whether or not
subsequently repurchased by the Company) to any Person other than the Investor.
Section 4.10. No General Solicitation or Advertising. In regard to
the transactions contemplated hereby, neither the Company nor any of its
Affiliates nor any distributor or any person acting on its or their behalf (i)
has conducted or will conduct any general solicitation (as that term is used in
Rule 502(c) of Regulation D) or general advertising with respect to any of the
Commitment Shares, the Warrants, or the Warrant Shares, or (ii) made any offers
or sales of any security or solicited any offers to buy any security under any
circumstances that would require registration of the Common Stock under the
Securities Act.
Section 4.11. No Conflicts. The execution, delivery and performance
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby, including without limitation the issuance of
the Commitment Shares, the Warrants and the Warrant Shares do not and will not
(i) result in a violation of the Certificate or By-Laws or (ii) conflict with,
or constitute a material default (or an event that with notice or lapse of time
or both would become a material default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any material agreement,
indenture, instrument or any "lock-up" or similar provision of any underwriting
or similar agreement to which the Company is a party, or (iii) result in a
violation of any federal, state, local or foreign law, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations)
applicable to the Company or by which any property or asset of the Company is
bound or affected, nor is the Company otherwise in violation of, conflict with
or in default under any of the foregoing (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect);
provided, however, that for purposes of the Company's representations and
warranties as to violations of foreign law, rule or regulation referenced in
clause (iii), such representations and warranties are made only to the best of
the Company's knowledge insofar as the execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby are or may be affected by the status of the
Investor under or pursuant to any such foreign law, rule or regulation. The
business of the Company is not being conducted in violation of any law,
ordinance or regulation of any governmental entity, except for possible
violations that either singly or in the aggregate do not and will not have a
Material Adverse Effect. The Company is not required under federal, state or
local law, rule or regulation to obtain any consent, authorization or order of,
or make any filing or registration with, any court or governmental agency in
order for it to execute, deliver or perform any of its obligations under this
Agreement or issue and sell the Common Stock, the Commitment Shares, the
Warrants, or the Warrant Shares in accordance with the terms hereof (other than
any SEC, NASD or state securities filings that may be required to be made by the
Company subsequent to any Closing, any registration statement that may be filed
pursuant hereto, and any shareholder approval required by the rules applicable
to companies whose common stock trades on the Principal Market); provided that,
for purposes of the representation
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made in this sentence, the Company is assuming and relying upon the accuracy of
the relevant representations and agreements of the Investor herein.
Section 4.12. No Material Adverse Change. Except as set forth
in the SEC Documents, since December 31, 1999, no event has occurred that would
have a Material Adverse Effect on the Company.
Section 4.13. No Undisclosed Liabilities. Except as set forth in
the SEC Documents, the Company has no liabilities or obligations that are
material, individually or in the aggregate, other than those incurred in the
ordinary course of the Company's businesses since December 31, 1999 and which,
individually or in the aggregate, do not or would not have a Material Adverse
Effect on the Company.
Section 4.14. No Undisclosed Events or Circumstances. Since
December 31, 1999, no event or circumstance has occurred or exists with respect
to the Company or its businesses, properties, prospects, operations or financial
condition, that, under applicable law, rule or regulation, requires public
disclosure or announcement prior to the date hereof by the Company but which has
not been so publicly disclosed or announced.
Section 4.15. No Integrated Offering. Neither the Company, nor any
of its Affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would require registration of the
Common Stock, the Commitment Shares, the Warrants or the Warrant Shares under
the Securities Act.
Section 4.16. Litigation and Other Proceedings. Except as set forth
in the SEC Documents, there are no lawsuits or proceedings pending or to the
best knowledge of the Company threatened, against the Company, nor has the
Company received any written or oral notice of any such action, suit, proceeding
or investigation, which have had or might have a Material Adverse Effect. Except
as set forth in the SEC Documents, no judgment, order, writ, injunction or
decree or award has been issued by or, so far as is known by the Company,
requested of any court, arbitrator or governmental agency which has resulted in
or might result in a Material Adverse Effect.
Section 4.17. No Misleading or Untrue Communication. The Company,
any Person representing the Company, and, to the knowledge of the Company, any
other Person selling or offering to sell the Commitment Shares, the Warrants or
the Warrant Shares in connection with the transactions contemplated by this
Agreement, have not made, at any time, any communication in connection with the
offer or sale of the same which contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statements, in the light of the circumstances under which they were made, not
misleading.
Section 4.18. Material Non-Public Information. The Company is not
in possession of, nor has the Company or its agents disclosed to the Investor,
any material non-public information that (i) if disclosed, would, or could
reasonably be expected to have, an effect on the price of the Common Stock and
(ii) according to applicable law, rule or regulation, should have been disclosed
publicly by the Company prior to the date hereof but which has not been so
disclosed.
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ARTICLE V
COVENANTS OF THE INVESTOR
Section 5.1. Compliance. The Investor's trading activities with
respect to the Commitment Shares, the Warrant Shares and the Warrants will be in
compliance with all applicable state and federal securities laws, rules and
regulations and the rules and regulations of the Principal Market on which the
Company's Common Stock is listed.
Section 5.2. Short Sale. Neither the Investor nor any of its
Affiliates will directly or indirectly engage in any Short Sale of the
Commitment Shares, the Warrant Shares or the Warrants.
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1. Registration Rights. The Company shall cause the
Registration Rights Agreement to remain in full force and effect, and the
Company shall comply in all respects with the terms thereof.
Section 6.2. Reservation of Common Stock. As of the date hereof,
the Company has available and the Company shall reserve and keep available at
all times, free of preemptive rights, shares of Common Stock for the purpose of
enabling the Company to satisfy any obligation to issue the Commitment Shares
and the Warrant Shares, such amount of shares of Common Stock to be reserved
shall be calculated based upon the Threshold Bid Price Condition and the
Exercise Price of the Incentive Warrant and the maximum number of Protective
Warrant Shares issuable pursuant to the Protective Warrants. The number of
shares so reserved from time to time, as theretofore increased or reduced as
hereinafter provided, may be reduced by the number of shares actually delivered.
Section 6.3. Listing of Common Stock. The Company shall use its
best efforts to maintain the listing or quotation of the Common Stock on a
Principal Market, and as soon as practicable (but in any event prior to the
Closing Date for any Sale) will cause the Commitment Shares and the Warrant
Shares with respect to each Sale to be listed on the Principal Market. The
Company further shall, if the Company applies to have the Common Stock traded on
any other Principal Market, include in such application the Commitment Shares
and the Warrant Shares, and shall take such other action as is necessary or
desirable in the opinion of the Investor to cause the Common Stock to be listed
on such other Principal Market as promptly as possible. The Company shall use
its best efforts to continue the listing and trading of its Common Stock on the
Principal Market (including, without limitation, maintaining sufficient net
tangible assets) and will comply in all respects with the Company's reporting,
filing and other obligations under the bylaws or rules of the NASD and the
Principal Market.
Section 6.4. Exchange Act Registration. The Company shall comply
with all applicable requirements set forth in the Registration Rights Agreement,
including without limitation its obligation to file each Registration Statement
with the SEC within the applicable
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time periods set forth in the Registration Rights Agreement. After each
Registration Statement becomes effective, the Company shall use its best efforts
to cause the Common Stock covered by such Registration Statement to continue to
be registered under Section 12(g) or 12(b) of the Exchange Act, will comply in
all respects with its reporting and filing obligations under the Exchange Act,
and will use its best efforts not to take any action or file any document
(whether or not permitted by the Exchange Act or the rules thereunder) to
terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under the Exchange Act.
Section 6.5. Legends. The certificates evidencing the
Warrants, the Commitment Shares and the Warrant Shares shall be free of legends,
except as provided for in Article VIII.
Section 6.6. Corporate Existence. The Company shall take all
steps necessary to preserve and continue the corporate existence of the Company.
Section 6.7. Additional SEC Documents. Until all Registrable
Securities issued or issuable to the Investor pursuant to this Agreement may be
sold by the Investor without registration and without any time, volume or manner
limitations pursuant to Rule 144(k) (or any similar provision then in effect)
under the Securities Act, the Company shall, as and when the originals thereof
are submitted to the SEC for filing, notify the Investor in writing of any SEC
Documents furnished or submitted to the SEC, and upon the request of the
Investor the Company shall deliver to the Investor copies of all SEC Documents
so furnished or submitted to the SEC.
Section 6.8. Notice of Certain Events Affecting Registration;
Suspension of Right to Make a Subsequent Sale. The Company shall immediately
notify the Investor, but in no event later than two business days by facsimile
and by overnight courier, upon the occurrence of any of the following events in
respect of a Registration Statement or related prospectus in respect of an
offering of Registrable Securities: (i) receipt of any request for additional
information by the SEC or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments
or supplements to the Registration Statement or related prospectus; (ii) the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the happening of any event that makes any statement made in such
Registration Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration Statement, related
prospectus or documents so that, in the case of a Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the related prospectus, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; (v) the declaration by the SEC of the effectiveness of a
Registration Statement; and (vi) the Company's reasonable determination that a
post-effective amendment to the Registration Statement would be appropriate, and
the Company shall promptly make available to the Investor any such
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supplement or amendment to the related prospectus. The Company shall not deliver
to the Investor any Sale Notice during the continuation of any of the foregoing
events.
Section 6.9. Consolidation; Merger. The Company shall not, at
any time after the date hereof, effect any merger or consolidation of the
Company with or into, or a transfer of all or substantially all of the assets of
the Company to, another entity unless the resulting successor or acquiring
entity (if not the Company) executes a written instrument acknowledging and
assuming the obligation to issue to the Investor, upon any Sale or the exercise
of any Warrant, in lieu of each share of Common Stock theretofore issuable upon
such Sale or exercise of any such Warrant, other securities, money or property
receivable upon such merger, consolidation or transfer had the Sale or exercise
of such Warrant occurred immediately prior to such merger, consolidation or
transfer.
Section 6.10. Issuance of Commitment Shares, Warrant Shares
and Additional Shares. The sale of the Commitment Shares, and the issuance of
the Warrant Shares pursuant to exercise of the Warrants shall be made in
accordance with the provisions and requirements of Section 4(2), Section
3(a)(9), Regulation D and any applicable state law. Issuance of the Warrant
Shares pursuant to exercise of the Warrants through a cashless exercise shall be
made in accordance with the provisions and requirements of Section 3(a)(9) under
the Securities Act and any applicable state law.
Section 6.11. Legal Opinion on Subscription Date. The
Company's independent counsel shall deliver to the Investor on the Subscription
Date an opinion in the form of Exhibit F, except for paragraph 7 thereof.
Section 6.12. No Similar Arrangement; Right of First Refusal.
The Company shall refrain from entering into any other agreements, arrangements
or understandings granting to the Company the right to sell shares of its
securities to one or more investors, other than a Strategic Investor, in
placements exempt from registration under the Securities Act until 60 calendar
days after this agreement is terminated pursuant to Section 2.5 hereof (the
"Exclusivity Period"). If the Company, for the purpose of obtaining any
additional financing, wishes to sell shares of its securities in placements
exempt from registration under the Securities Act during the Exclusivity Period
(a "Third Party Sale") to a party other than a Strategic Investor and other than
the Investor (the "Third Party"), the Company shall first offer (the "Offer") to
the Investor, in writing, the right to purchase such shares (the "Offered
Shares") at the bona fide price offered by the Third Party (the "Offer Price").
The Offer shall grant the Investor the right during the 5 Trading Days
immediately following the date of the Offer to elect to purchase any or all of
the Offered Shares. The Company, in connection with such a Third Party Sale,
shall refrain from circumventing or attempting to circumvent the Investor's
right of first refusal by way of making such a Third Party Sale to any of its
Affiliates without first making an Offer to the Investor. If the Investor so
exercises its right to purchase any or all of the Offered Shares, the purchase
will be treated as a Subsequent Sale except that the purchase price for the
Offered Shares shall be the Offer Price. The closing and method of payment shall
be as provided for in Sections 2.3 and 2.4 hereof and the Closing Date shall be
7 Trading Days after the Investor exercises such right. If the Investor fails to
exercise its right to purchase any or all of the Offered Shares, then during the
60 calendar days immediately following the expiration of such right, the Company
shall be free to sell any or all of the Offered Shares to a purchaser for a
purchase price not lower than the Offer Price
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payable on terms and conditions that are not more favorable to such purchaser
than those contained in the Offer. In the event that the Company effects a Third
Party Sale other than in accordance with this Section 6.12, the Investor may
immediately terminate this Agreement.
Section 6.13. Public Announcements. The Company, its
Representatives and legal advisors, and the Investor will not issue or make any
reports, statements or releases to the public or to any third party with respect
to this Agreement or the transactions contemplated hereby without the consent of
both the Company and the Investor, which consent shall not be unreasonably
withheld. The Company, its Representatives and legal advisers, and the Investor
also will obtain the other party's prior approval of any press release to be
issued announcing the consummation of the transactions contemplated by this
Agreement or in any way referring to the other party or affiliates of the other
party. If either party is unable to obtain the approval of its public report,
statement, or press or other release from the other party and such report,
statement, or press or other release is, in the advice of legal counsel to such
party, required by applicable law or by any rule or regulation of the Principal
Market in order to discharge such party's disclosure obligations, then such
party may make or issue the legally required report, statement, or press or
other release and promptly furnish the other party with a copy thereof.
ARTICLE VII
CONDITIONS TO DELIVERY OF
SALE NOTICES AND CONDITIONS TO CLOSING
Section 7.1. Conditions Precedent to the Obligation of the
Company to Issue and Sell Common Stock. The obligation hereunder of the Company
to issue and sell the Commitment Shares to the Investor incident to each Closing
is subject to the satisfaction, at or before each such Closing, of each of the
conditions set forth below.
(a) Accuracy of the Investor's Representation and
Warranties. The representations and warranties of the Investor
shall be true and correct in all material respects as of the
date of this Agreement and as of the date of each such Closing
as though made at each such time.
(b) Performance by the Investor. The Investor shall have
performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the
Investor at or prior to such Closing.
Section 7.2. Conditions Precedent to the Right of the Company
to Deliver a Sale Notice and the Obligation of the Investor to Purchase
Commitment Shares. The right of the Company to deliver a Sale Notice and the
obligation of the Investor hereunder to acquire and pay for the Commitment
Shares incident to a Closing is subject to the satisfaction, on (i) the
Subscription Date, (ii) the applicable Sale Notice Date and (iii) the applicable
Closing Date (each a "Condition Satisfaction Date"), of each of the following
conditions; provided, however, that with respect to the Closing relating to the
First Sale only, the Investor waives the conditions set forth in paragraphs (a),
(b) and (k) of this Section 7.2:
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(a) Filing of Registration Statements with the SEC. In
accordance with the provisions set forth in the Registration
Rights Agreement, the Company shall have filed with the SEC
Registration Statements covering the resale of Registrable
Securities relating to all prior Sales, if any.
(b) Effective Registration Statements. (1) The Company
shall have notified the Investor in accordance with Section
6.8 hereof that all Registration Statements covering
Registrable Securities relating to the First Sale and any
prior Subsequent Sales have been declared effective by the
SEC. (2) In accordance with the Registration Rights Agreement
all such Registration Statements shall remain effective on
each Condition Satisfaction Date. (3) Neither the Company nor
the Investor shall have received notice that the SEC has
issued or intends to issue a stop order with respect to a
Registration Statement or that the SEC otherwise has suspended
or withdrawn the effectiveness of a Registration Statement,
either temporarily or permanently, or intends or has
threatened to do so (unless the SEC's concerns have been
addressed and the Investor is reasonably satisfied that the
SEC no longer is considering or intends to take such action).
(4) No other suspension of the use or withdrawal of the
effectiveness of such Registration Statement or related
prospectus shall exist. (5) At least 30 days shall have
elapsed since the last previously filed Registration Statement
(as defined in the Registration Rights Agreement) has been
declared effective by the SEC.
(c) Accuracy of the Company's Representations and
Warranties. The representations and warranties of the Company
shall be true and correct as of each Condition Satisfaction
Date as though made at each such time (except for
representations and warranties specifically made as of a
particular date).
(d) Performance by the Company. The Company shall have
performed, satisfied and complied in all respects with all
covenants, agreements and conditions required by this
Agreement, the Registration Rights Agreement and the Warrants
to be performed, satisfied or complied with by the Company at
or prior to each Condition Satisfaction Date.
(e) No Injunction. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or adopted by any court or
governmental authority of competent jurisdiction that
prohibits the transactions contemplated by this Agreement or
otherwise has a Material Adverse Effect, and no actions, suits
or proceedings shall be in progress, pending or threatened by
any Person, that seek to enjoin or prohibit the transactions
contemplated by this Agreement or otherwise could reasonably
be expected to have a Material Adverse Effect. For purposes of
this paragraph (e), no proceeding shall be deemed pending or
threatened unless one of the parties has received written or
oral notification thereof prior to the applicable Closing
Date.
(f) No Suspension of Trading in or Delisting of Common
Stock. The trading of the Common Stock shall not have been
suspended by the SEC, the Principal Market or the NASD, and
the Common Stock shall have been approved for listing
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or quotation on and shall not have been delisted from the
Principal Market. The issuance of shares of Common Stock with
respect to the applicable Closing shall not violate the
shareholder approval requirements of the Principal Market.
(g) Legal Opinion. The Company shall have caused to be
delivered to the Investor, within 5 Trading Days of the
effective date of a Registration Statement, an opinion of the
Company's independent counsel in the form of Exhibit F hereto,
addressed to the Investor.
(h) Due Diligence. No dispute between the Company and the
Investor shall exist pursuant to Section 7.3 as to the
adequacy of the disclosure contained in the Registration
Statement.
(i) Ten Percent Limitation. On each Closing Date, the
number of Commitment Shares then to be purchased by the
Investor shall not exceed the number of such shares that, when
aggregated with all other shares of Common Stock and
Registrable Securities then owned by the Investor beneficially
or deemed beneficially owned by the Investor, as determined in
accordance with the definition of beneficial ownership in Rule
13d-3 promulgated under the Exchange Act, would result in the
Investor owning no more than 9.9% of all of such Common Stock
as would be outstanding on such Closing Date, as determined in
accordance with Section 13(d) of the Exchange Act and the
regulations promulgated thereunder. For purposes of this
Section, in the event that the amount of Common Stock
outstanding as determined in accordance with Section 13(d) of
the Exchange Act and the regulations promulgated thereunder is
greater on a Closing Date than on the Sale Notice Date
associated with such Closing Date, the amount of Common Stock
outstanding on such Closing Date shall govern for purposes of
determining whether the Investor, when aggregating all
purchases of Common Stock made pursuant to this Agreement and,
if any, Warrant Shares would own more than 9.9% of the Common
Stock following such Closing Date.
(j) No Knowledge. The Company shall have no knowledge of
any event more likely than not to have the effect of causing
any Registration Statement to be suspended or otherwise
ineffective (which event is more likely than not to occur
within the fifteen Trading Days following the Trading Day on
which such notice is deemed delivered).
(k) Minimum Time Interval. The Minimum Time Interval
shall have elapsed.
(l) Shareholder Vote. The issuance of shares of Common
Stock with respect to the applicable Closing, if any, shall
not violate the shareholder approval requirements of the
Principal Market. Following each Sale Notice, the Company
shall promptly provide the Investor with a written schedule
stating as of such applicable Sale Notice Date (i) the total
number of shares of Outstanding Common Stock, (ii) the number
of Subsequent Sale Shares issuable with respect to the
applicable Closing, (iii) the number of First Sale Shares
issued, (iv) the
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number of Protective Warrant Shares issued or issuable, if
any, and (v) the number of Incentive Warrant Shares issued or
issuable, if any. If the issuance by the Company of a number
of shares of Common Stock equal to the sum of the amounts
stated in clauses (ii) through (v), inclusive, hereof would
result in a violation by the Company of the shareholder
approval requirements of the Principal Market, the applicable
Sale Notice shall be deemed null and void.
(m) Other. On each Condition Satisfaction Date, the
Investor shall have received and been reasonably satisfied
with such other certificates and documents as shall have been
reasonably requested by the Investor in order for the Investor
to confirm the Company's satisfaction of the conditions set
forth in this Section 7.2., including, without limitation, a
certificate in substantially the form and substance of Exhibit
G hereto, executed in either case by an executive officer of
the Company and to the effect that all the conditions to such
Closing shall have been satisfied as at the date of each such
certificate.
Section 7.3. Due Diligence Review; Non-Disclosure of Non-Public
Information.
(a) The Company shall make available for inspection and
review by the Investor, advisors to and representatives of the
Investor (who may or may not be affiliated with the Investor
and who are reasonably acceptable to the Company), and any
Underwriter, any Registration Statement or amendment or
supplement thereto or any blue sky, NASD or other filing, all
financial and other records, all SEC Documents and other
filings with the SEC, and all other corporate documents and
properties of the Company as may be reasonably necessary for
the purpose of such review, and cause the Company's officers,
directors and employees to supply all such information
reasonably requested by the Investor or any such
representative, advisor or Underwriter in connection with such
Registration Statement (including, without limitation, in
response to all questions and other inquiries reasonably made
or submitted by any of them), prior to and from time to time
after the filing and effectiveness of such Registration
Statement for the sole purpose of enabling the Investor and
such representatives, advisors and Underwriters and their
respective accountants and attorneys to conduct initial and
ongoing due diligence with respect to the Company and the
accuracy of such Registration Statement.
(b) None of the Company, its officers, directors,
employees and agents shall in any event disclose non-public
information to the Investor, advisors to or representatives of
the Investor unless prior to disclosure of such information
the Company identifies such information as being non-public
information and provides the Investor, such advisors and
representatives with the opportunity to accept or refuse to
accept such non-public information for review. As a condition
to disclosing any non-public information hereunder, the
Company may require the Investor's advisors and
representatives to enter into a confidentiality agreement in
form reasonably satisfactory to the Company and the Investor.
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(c) Nothing herein shall require the Company to disclose
non-public information to the Investor or its advisors or
representatives, and the Company represents that it does not
disseminate non-public information to any investors who
purchase stock in the Company in a public offering, to money
managers or to securities analysts, absent a confidentiality
agreement between the Company and such parties; provided,
however, that notwithstanding anything herein to the contrary,
the Company shall, as hereinabove provided, immediately notify
the advisors and representatives of the Investor and any
Underwriters of any event or the existence of any circumstance
(without any obligation to disclose the specific event or
circumstance) of which it becomes aware, constituting
non-public information (whether or not requested of the
Company specifically or generally during the course of due
diligence by such persons or entities), which, if not
disclosed in the prospectus included in the applicable
Registration Statement would cause such prospectus to include
a material misstatement or to omit a material fact required to
be stated therein in order to make the statements, therein, in
light of the circumstances in which they were made, not
misleading. Nothing contained in this Section 7.3 shall be
construed to mean that such persons or entities other than the
Investor (without the written consent of the Investor prior to
disclosure of such information) may not obtain non-public
information in the course of conducting due diligence in
accordance with the terms and conditions of this Agreement and
nothing herein shall prevent any such persons or entities from
notifying the Company of their opinion that based on such due
diligence by such persons or entities, that such Registration
Statement contains an untrue statement of a material fact or
omits a material fact required to be stated in such
Registration Statement or necessary to make the statements
contained therein, in light of the circumstances in which they
were made, not misleading.
ARTICLE VIII
LEGENDS
Section 8.1. Legends. Each of the Warrants and, unless
otherwise provided below, each certificate representing Registrable Securities
will bear the following legend (the "Legend"):
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO A TRANSACTION
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THAT IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER
OF THIS CERTIFICATE IS THE BENEFICIARY OF CERTAIN OBLIGATIONS OF THE
COMPANY SET FORTH IN A STOCK PURCHASE AGREEMENT, DATED AS OF JANUARY
__, 2001, BETWEEN PRACTICEWORKS, INC. AND CRESCENT INTERNATIONAL LTD. A
COPY OF THE PORTION OF THE AFORESAID AGREEMENT EVIDENCING SUCH
OBLIGATIONS MAY BE OBTAINED FROM PRACTICEWORKS, INC.'S EXECUTIVE
OFFICES."
On the Subscription Date the Company shall issue to the transfer agent
for its Common Stock (and to any substitute or replacement transfer agent for
its Common Stock upon the Company's appointment of any such substitute or
replacement transfer agent) Transfer Agent Instructions, with a copy to the
Investor. Other than as required as a result of change in law, such instructions
shall be irrevocable by the Company from and after the date hereof or from and
after the issuance thereof to any such substitute or replacement transfer agent,
as the case may be, except as otherwise expressly provided in the Registration
Rights Agreement. It is the intent and purpose of such instructions, as provided
therein, to require the transfer agent for the Common Stock from time to time
upon transfer of Registrable Securities by the Investor to issue certificates
evidencing such Registrable Securities free of the Legend during the following
periods and under the following circumstances and without consultation by the
transfer agent with the Company or its counsel and without the need for any
further advice or instruction or documentation to the transfer agent by or from
the Company or its counsel or the Investor:
(a) At any time after the applicable Effective Date, upon
surrender of one or more certificates evidencing Registrable
Securities that bear the Legend, to the extent accompanied by
a notice requesting the issuance of new certificates free of
the Legend to replace those surrendered; provided that (i) the
applicable Registration Statement shall then be effective and
(ii) if reasonably requested by the transfer agent the
Investor confirms to the transfer agent that the Investor has
transferred the Registrable Securities pursuant to such
Registration Statement and has complied with the prospectus
delivery requirement; or
(b) At any time upon any surrender of one or more
certificates evidencing Registrable Securities that bear the
Legend, to the extent accompanied by a notice requesting the
issuance of new certificates free of the Legend to replace
those surrendered and containing representations that the
Investor is permitted to dispose of such Registrable
Securities without limitation as to amount or manner of sale
pursuant to Rule 144(k) under the Securities Act.
Section 8.2. No Other Legend or Stock Transfer Restrictions. No
legend other than the one specified in Section 8.1 has been or shall be placed
on the share certificates representing the Registrable Securities, and no
instructions or "stop transfer orders," so called, "stock transfer
restrictions," or other restrictions have been or shall be given to the
Company's transfer agent with respect thereto other than as expressly set forth
in this Article VIII.
Section 8.3. Investor's Compliance. Nothing in this Article
VIII shall affect in any way the Investor's obligations to comply with all
applicable securities laws.
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ARTICLE IX
INDEMNIFICATION; ARBITRATION
Section 9.1. Indemnification.
(a) The Company agrees to indemnify and hold harmless the
Investor, its partners, Affiliates, officers, directors,
employees, and duly authorized agents, and each Person or
entity, if any, who controls the Investor within the meaning
of Section 15 of the Securities Act or Section 20 of the
Exchange Act, together with its controlling persons from and
against any Damages, joint or several, and any action in
respect thereof to which the Investor, its partners,
Affiliates, officers, directors, employees, and duly
authorized agents, and any such controlling person becomes
subject to, resulting from, arising out of or relating to any
misrepresentation, breach of warranty or nonfulfillment of or
failure to perform any covenant or agreement on the part of
the Company contained in this Agreement, as such Damages are
incurred, unless such Damages result primarily from the
Investor's gross negligence, recklessness or bad faith in
performing its obligations under this Agreement; provided,
however, that the maximum aggregate liability of the Company
shall be limited to the amount actually invested by the
Investor under this Agreement, and provided, further, that in
no event shall this provision be deemed to limit any rights to
indemnification arising under the Registration Rights
Agreement.
(b) The Investor agrees to indemnify and hold harmless the
Company, its Affiliates, officers, directors, employees, and
duly authorized agents, and each Person or entity, if any, who
controls the Investor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, together
with its controlling persons from and against any Damages,
joint or several, and any action in respect thereof to which
the Company, its Affiliates, officers, directors, employees,
and duly authorized agents, and any such controlling person
becomes subject to, resulting from, arising out of or relating
to any misrepresentation, breach of warranty or nonfulfillment
of or failure to perform any covenant or agreement on the part
of the Investor contained in this Agreement, as such Damages
are incurred, unless such Damages result primarily from the
Company's gross negligence, recklessness or bad faith in
performing its obligations under this Agreement; provided,
however, that the maximum aggregate liability of the Investor
shall be limited to the amount by which the total price at
which the Registrable Securities of the Investor were sold to
the public exceeds the amount actually paid by the Investor
under this Agreement for such Registrable Securities sold to
the public, and provided, further, that in no event shall this
provision be deemed to limit any rights to indemnification
arising under the Registration Rights Agreement.
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Section 9.2. Method of Asserting Indemnification Claims. All
claims for indemnification by any Indemnified Party (as defined below) under
Section 9.1 shall be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which any
person claiming indemnification under any provision of Section
9.1 (an "Indemnified Party") might seek indemnity under
Section 9.1 is asserted against or sought to be collected from
such Indemnified Party by a person other than the Company, the
Investor or any Affiliate of the Company (a "Third Party
Claim"), the Indemnified Party shall deliver a written
notification, enclosing a copy of all papers served, if any,
and specifying the nature of and basis for such Third Party
Claim and for the Indemnified Party's claim for
indemnification that is being asserted under any provision of
Section 9.1 against any person (the "Indemnifying Party"),
together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith,
of such Third Party Claim (a "Claim Notice") with reasonable
promptness to the Indemnifying Party. If the Indemnified Party
fails to provide the Claim Notice with reasonable promptness
after the Indemnified Party receives notice of such Third
Party Claim, the Indemnifying Party shall not be obligated to
indemnify the Indemnified Party with respect to such Third
Party Claim to the extent that the Indemnifying Party's
ability to defend has been irreparably prejudiced by such
failure of the Indemnified Party. The Indemnifying Party shall
notify the Indemnified Party as soon as practicable within the
period ending 30 calendar days following receipt by the
Indemnifying Party of either a Claim Notice or an Indemnity
Notice (as defined below) (the "Dispute Period") whether the
Indemnifying Party disputes its liability or the amount of its
liability to the Indemnified Party under Section 9.1 and
whether the Indemnifying Party desires, at its sole cost and
expense, to defend the Indemnified Party against such Third
Party Claim.
(i) If the Indemnifying Party notifies the
Indemnified Party within the Dispute Period that the
Indemnifying Party desires to defend the Indemnified
Party with respect to the Third Party Claim pursuant
to this Section 9.2(a), then the Indemnifying Party
shall have the right to defend, with counsel
reasonably satisfactory to the Indemnified Party, at
the sole cost and expense of the Indemnifying Party,
such Third Party Claim by all appropriate
proceedings, which proceedings shall be vigorously
prosecuted by the Indemnifying Party to a final
conclusion or will be settled at the discretion of
the Indemnifying Party (but only with the consent of
the Indemnified Party, in the case of any settlement
that provides for any relief other than the payment
of monetary damages or that provides for the payment
of monetary damages as to which the Indemnified Party
shall not be indemnified in full pursuant to Section
9.1). The Indemnifying Party shall have full control
of such defense and proceedings, including any
compromise or settlement thereof; provided, however,
that the Indemnified Party may, at the sole cost and
expense of the Indemnified Party, at any time prior
to the Indemnifying Party's delivery of the notice
referred to in the first sentence of this clause (i),
file
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any motion, answer or other pleadings or take any
other action that the Indemnified Party reasonably
believes to be necessary or appropriate to protect
its interests; and provided further, that if
requested by the Indemnifying Party, the Indemnified
Party will, at the sole cost and expense of the
Indemnifying Party, provide reasonable cooperation to
the Indemnifying Party in contesting any Third Party
Claim that the Indemnifying Party elects to contest.
The Indemnified Party may participate in, but not
control, any defense or settlement of any Third Party
Claim controlled by the Indemnifying Party pursuant
to this clause (i), and except as provided in the
preceding sentence, the Indemnified Party shall bear
its own costs and expenses with respect to such
participation. Notwithstanding the foregoing, the
Indemnified Party may take over the control of the
defense or settlement of a Third Party Claim at any
time if it irrevocably waives its right to indemnity
under Section 9.1 with respect to such Third Party
Claim.
(ii) If the Indemnifying Party fails to notify
the Indemnified Party within the Dispute Period that
the Indemnifying Party desires to defend the Third
Party Claim pursuant to Section 9.2(a), or if the
Indemnifying Party gives such notice but fails to
prosecute vigorously and diligently or settle the
Third Party Claim, or if the Indemnifying Party fails
to give any other notice required to be given within
the Dispute Period, then the Indemnified Party shall
have the right to defend, at the sole cost and
expense of the Indemnifying Party, the Third Party
Claim by all appropriate proceedings, which
proceedings shall be prosecuted by the Indemnified
Party in a reasonable manner and in good faith or
will be settled at the discretion of the Indemnified
Party (with the consent of the Indemnifying Party,
which consent will not be unreasonably withheld). The
Indemnified Party will have full control of such
defense and proceedings, including any compromise or
settlement thereof; provided, however, that if
requested by the Indemnified Party, the Indemnifying
Party will, at the sole cost and expense of the
Indemnifying Party, provide reasonable cooperation to
the Indemnified Party and its counsel in contesting
any Third Party Claim which the Indemnified Party is
contesting. Notwithstanding the foregoing provisions
of this clause (ii), if the Indemnifying Party has
notified the Indemnified Party within the Dispute
Period that the Indemnifying Party disputes its
liability or the amount of its liability hereunder to
the Indemnified Party with respect to such Third
Party Claim, and if such dispute is resolved in favor
of the Indemnifying Party in the manner provided in
clause (iii) below, the Indemnifying Party will not
be required to bear the costs and expenses of the
Indemnified Party's defense pursuant to this clause
(ii) or of the Indemnifying Party's participation
therein at the Indemnified Party's request, and the
Indemnified Party shall reimburse the Indemnifying
Party in full for all reasonable costs and expenses
incurred by the Indemnifying Party in connection with
such litigation. The Indemnifying Party may
participate in, but not control, any defense or
settlement controlled by the
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Indemnified Party pursuant to this clause (ii), and
the Indemnifying Party shall bear its own costs and
expenses with respect to such participation.
(iii) If the Indemnifying Party notifies the
Indemnified Party that it does not dispute its
liability or the amount of its liability to the
Indemnified Party with respect to the Third Party
Claim under Section 9.1 or fails to notify the
Indemnified Party within the Dispute Period whether
the Indemnifying Party disputes its liability or the
amount of its liability to the Indemnified Party with
respect to such Third Party Claim, the Damages in the
amount specified in the Claim Notice shall be
conclusively deemed a liability of the Indemnifying
Party under Section 9.1 and the Indemnifying Party
shall pay the amount of such Damages to the
Indemnified Party on demand. If the Indemnifying
Party has timely disputed its liability or the amount
of its liability with respect to such claim, the
Indemnifying Party and the Indemnified Party shall
proceed in good faith to negotiate a resolution of
such dispute, and if not resolved through
negotiations within the period of 30 calendar days
immediately following the Dispute Period, such
dispute shall be resolved by arbitration in
accordance with Section 9.3.
(b) In the event any Indemnified Party should have a claim
under Section 9.1 against the Indemnifying Party that does not
involve a Third Party Claim, the Indemnified Party shall
deliver a written notification of a claim for indemnity under
Section 9.1 specifying the nature of and basis for such claim,
together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith,
of such claim (an "Indemnity Notice") with reasonable
promptness to the Indemnifying Party. The failure by any
Indemnified Party to give the Indemnity Notice shall not
impair such party's rights hereunder except to the extent that
the Indemnifying Party demonstrates that it has been
irreparably prejudiced thereby. If the Indemnifying Party
notifies the Indemnified Party that it does not dispute the
claim or the amount of the claim described in such Indemnity
Notice or fails to notify the Indemnified Party within the
Dispute Period whether the Indemnifying Party disputes the
claim or the amount of the claim described in such Indemnity
Notice, the Damages in the amount specified in the Indemnity
Notice will be conclusively deemed a liability of the
Indemnifying Party under Section 9.1 and the Indemnifying
Party shall pay the amount of such Damages to the Indemnified
Party on demand. If the Indemnifying Party has timely disputed
its liability or the amount of its liability with respect to
such claim, the Indemnifying Party and the Indemnified Party
shall proceed in good faith to negotiate a resolution of such
dispute, and if not resolved through negotiations within the
period of 30 calendar days immediately following the Dispute
Period, such dispute shall be resolved by arbitration in
accordance with Section 9.3.
Section 9.3. Arbitration. Any controversy, claim or dispute
arising out of or in connection with this Agreement, the Registration Rights
Agreement or the Warrants, including any question regarding its existence,
validity, interpretation, breach, or termination, shall be
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referred to and finally resolved in accordance with the International
Arbitration Rules of the American Arbitration Association, and judgment upon the
award rendered by the arbitral tribunal may be entered by any court having
jurisdiction thereof or having jurisdiction over any party or any party's
assets.
(a) The tribunal shall consist of three arbitrators, two of
whom shall be appointed by the respective parties and the
third, who shall be the chairperson of the tribunal, by the
two party-appointed arbitrators within 30 days of the last of
their appointments. Save that, if either party should fail to
appoint an arbitrator within 30 days of receiving written
notice of the appointment of an arbitrator by the other party,
the second arbitrator shall, at the written request of the
party which has already made an appointment, be appointed
forthwith by the American Arbitration Association. Likewise,
if the party-appointed arbitrators fail to make an agreed
appointment for the chairperson within 30 days of the last of
their appointments, the chairperson shall, at the written
request of either party, be appointed forthwith by the
American Arbitration Association.
(b) The place of arbitration shall be New York, New York.
(c) This arbitration clause and the conduct of the arbitral
proceedings shall be governed by the Federal Arbitration Act,
9 U.S.C.A. sec. 1 et seq.
(d) The language of the arbitration shall be English.
(e) Nothing in these dispute resolution provisions shall be
construed as preventing either party from seeking conservatory
or similar interim relief in any court of competent
jurisdiction.
(f) To the extent practicable, the arbitral tribunal shall
render its award no more than 60 calendar days from the date
that the three member tribunal is constituted. The arbitral
tribunal shall not lose jurisdiction over the matter based on
a failure to render an award within this time period.
ARTICLE X
MISCELLANEOUS
Section 10.1. Fees and Transaction Costs. In connection with the
execution of this agreement the following Sale Fees and Transaction Costs (as
defined below) are payable by the Company. The Investor is authorized by the
Company to retain and to pay, on behalf of the Company, the Subscription Fee,
Sale Fees and Transaction Costs to the payee entities in accordance with
Schedule 10.1, and may deduct such amounts from any sums due to the Company on
the Closing Date.
(a) Subscription Fee. On the Subscription Date, the
Company shall pay to the Investor the subscription fee amount
set forth on Schedule 10.1 (the "Subscription Fee").
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(b) Sale Fees. On each Closing Date, the Company shall
pay certain fees (the "Sale Fees") to the payee entities in
accordance with Schedule 10.1.
(c) Transaction Costs. The fees, expenses and
disbursements of the Investor's counsel (the "Investor Legal
Fees") shall be paid as follows: (i) the Investor shall pay
the initial $10,000 of Investor Legal Fees and (ii) the
Company shall pay all Investor Legal Fees in excess of
$10,000, provided that the Company's share of Investor Legal
Fees shall not exceed $50,000. The Company shall pay the
Investor due diligence costs in connection with the
consummation of this Agreement and the transactions
contemplated hereby (the "Due Diligence Costs," and together
with the Investor Legal Fees, the "Transaction Costs"), up to
a maximum amount of $10,000. The Company shall pay to the
Investor the Company's share of the Transaction Costs on the
Subscription Date, to the extent such share of the Transaction
Costs can be determined on the Subscription Date. The Company
shall pay its share of the remaining Transaction Costs to the
Investor not later than 10 days after receipt of notice from
the Investor that such amount is due. The Company agrees to
pay its own expenses incident to the performance of its
obligations hereunder.
Section 10.2. Reporting Entity for the Common Stock. The reporting
entity relied upon for the determination of the Bid Price or trading volume of
the Common Stock on the Principal Market on any given Trading Day for the
purposes of this Agreement shall be the Bloomberg L.P. The written mutual
consent of the Investor and the Company shall be required to employ any other
reporting entity.
Section 10.3. Brokerage. Except as disclosed in Section 10.1, each
of the parties hereto represents that it has had no dealings in connection with
this transaction with any finder or broker which would impose a legal obligation
to pay any fee or commission. The Company on the one hand, and the Investor, on
the other hand, agree to indemnify the other against and hold the other harmless
from any and all liabilities to any persons claiming brokerage commissions or
finder's fees on account of services purported to have been rendered on behalf
of the indemnifying party in connection with this Agreement or the transactions
contemplated hereby.
Section 10.4. Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice given in accordance herewith. Any notice or
other communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the third business day
following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall be:
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If to the Company:
PracticeWorks, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
King & Spalding
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Investor:
Crescent International Ltd.
c/o GreenLight (Switzerland) SA
▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇/Maxi Brezzi
Telephone: ▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇
Facsimile: ▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇ Chance ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq./▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Either party hereto from time to time may change its address or facsimile
number for notices under this Section by giving at least ten (10) days'
prior written notice of such changed address or facsimile number to the
other party hereto.
Section 10.5. Assignment. Neither this Agreement nor any rights of
the Investor or the Company hereunder may be assigned by either party to any
other Person. Notwithstanding the foregoing, the Investor's interest in this
Agreement may be assigned at any time, in whole or in part, to any Affiliate of
the Investor upon the prior written consent of the Company, which consent shall
not to be unreasonably withheld provided, however, that any such assignment or
transfer shall relieve the Investor of its duties under this Agreement only upon
performance thereof by any such assignee or transferee.
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Section 10.6. Amendment; No Waiver. No party shall be liable or
bound to any other party in any manner by any warranties, representations or
covenants except as specifically set forth in this Agreement. Except as
expressly provided in this Agreement, neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by both parties hereto. The failure of the either party to
insist on strict compliance with this Agreement, or to exercise any right or
remedy under this Agreement, shall not constitute a waiver of any rights
provided under this Agreement, nor estop the parties from thereafter demanding
full and complete compliance nor prevent the parties from exercising such a
right or remedy in the future.
Section 10.7. Annexes and Exhibits; Entire Agreement. All annexes
and exhibits to this Agreement are incorporated herein by reference and shall
constitute part of this Agreement. This Agreement, the Warrants and the
Registration Rights Agreement set forth the entire agreement and understanding
of the parties relating to the subject matter hereof and thereof and supersede
all prior and contemporaneous agreements, negotiations and understandings
between the parties, both oral and written, relating to the subject matter
hereof.
Section 10.8. Survival. The provisions of Articles VI, VIII, IX and
X, and of Section 7.3, shall survive the termination of this Agreement.
Section 10.9. Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that such severability shall be
ineffective if it materially changes the economic benefit of this Agreement to
any party.
Section 10.10. Title and Subtitles. The titles and subtitles used in
this Agreement are used for the convenience of reference and are not to be
considered in construing or interpreting this Agreement.
Section 10.11. Counterparts. This Agreement may be executed in
multiple counterparts, each of which may be executed by less than all of the
parties and shall be deemed to be an original instrument which shall be
enforceable against the parties actually executing such counterparts and all of
which together shall constitute one and the same instrument.
Section 10.12. Choice of Law. This Agreement shall be construed
under the laws of the State of New York.
Section 10.13. Other Expenses. In the event that a dispute between
the parties is not determined by a Board of Arbitration, the non-prevailing
party in any action, suit or proceeding shall bear all investigative, legal and
other expenses reasonably incurred in connection with, and any and all amounts
paid in defense or settlement of such action, suit or proceeding.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.
CRESCENT INTERNATIONAL LTD.
By:
------------------------------------------------
Name:
Title:
PRACTICEWORKS, INC.
By:
------------------------------------------------
Name:
Title:
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SCHEDULE 10.1
FEES AND TRANSACTION COSTS
The Company shall pay to the payee entities the following Subscription Fee, Sale
Fees and Transaction Costs under Section 10.1, which Crescent shall then
allocate as follows:
EVENTS TRIGGERING THE FEES/TRANSACTION AMOUNT ON WHICH THE FEE IS PAYEE ENTITY AMOUNT
PAYMENT COSTS CALCULATED
-------------------------- -------------------- ------------------------------ -------------------------------- ----------------
Subscription Date Subscription Fee Maximum Commitment Amount GreenLight (Switzerland) S.A. $100,000
-------------------------- -------------------- ------------------------------ -------------------------------- ----------------
Investor Legal Fees with a Crescent International Ltd. Investor Legal
maximum amount of $50,000 Fees less
$10,000 (with
Subscription Date Legal Fees a maximum
or Closing Date amount so
payable of
$50,000)
-------------------------- -------------------- ------------------------------ -------------------------------- ----------------
Due Diligence Costs with a GreenLight (Switzerland) S.A. 100% (with a
Subscription Date maximum amount of $10,000 maximum amount
or Closing Date Due Diligence Costs so payable of
$10,000)
-------------------------- -------------------- ------------------------------ -------------------------------- ----------------
Closing Date for a Sale Sale Fee The Investment Amount of the GreenLight (Switzerland) S.A. 2.0%
Sale
-------------------------- -------------------- ------------------------------ -------------------------------- ----------------
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EXHIBIT A
FORM OF CLOSING STATEMENT
CLOSING STATEMENT
Closing Date........................................ [DATE] ("Closing Date")
Investor............................................ Crescent International Ltd. ("Investor")
Company............................................. PracticeWorks, Inc. ("Company")
Transaction......................................... This closing represented the closing of the purchased
sale by the Company to Investor of shares of the
Company's Common Stock pursuant to Stock Purchase
Agreement dated January __, 2001 (the "Stock Purchase
Agreement"). Capitalized terms not otherwise defined
herein shall have the meaning assigned by the Stock
Purchase Agreement.
Maximum Commitment Amount........................... $35,000,000
Purchase Price...................................... $[determined at applicable Closing]
Shares of Common Stock Sold......................... [determined at applicable Closing]
Closing Disbursements:
1. Investment Amount............................... $[__________]
2. Less: Subscription Fee (Schedule 10.1).......... $ 100,000
3. Less: Sale Fee (___%) (Schedule 10.1)........... $[__________]
4. Less: Legal Fees................................ $[__________]
5. Less: Due Diligence Costs....................... $[__________]
6. Net Amount...................................... $[__________]
$
=============
Actions at Closing:
[1. Stock Purchase Agreement....................... The Investor and the Company executed the Stock
Purchase Agreement.]
[2. Registration Rights Agreement.................. The Investor and the Company executed the
Registration Rights Agreement.]
[3. Incentive Warrant.............................. The Company executed and delivered the Incentive
Warrant to the Investor.]
[4. Protective Warrant............................. The Company executed and delivered a Protective
Warrant to the Investor.]
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[5. Instructions to Transfer Agent.................. The Company executed and delivered irrevocable
Issuance Instructions to the Transfer Agent and the
Transfer Agent confirmed and accepted such
instructions. A copy of such instructions and
acceptance has been received by the Investor's legal
counsel.]
[6. Legal Opinion................................... [Counsel] delivered its legal opinion.]
[7. Wire Transfer................................... Upon confirmation of above actions by Investor's
legal counsel, Investor will wire to the Company the
Net Amount indicated on the front page hereof, and
thereafter deliver to the Transfer Agent a Wire
Transfer Notice indicating completion of delivery by
wire transfer to the Company the Net Amount.]
ACKNOWLEDGED AND AGREED:
Crescent International Ltd. PracticeWorks, Inc.
By: By:
---------------------------------------------- -----------------------------------------
TOTAL PURSUANT TO THE STOCK PURCHASE AGREEMENT $.00
Sale ($.00)
REMAINING BALANCE $.00
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EXHIBIT B
FORM OF INCENTIVE WARRANT
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EXHIBIT C
FORM OF PROTECTIVE WARRANT
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EXHIBIT D
FORM OF REGISTRATION RIGHTS AGREEMENT
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EXHIBIT E
TRANSFER AGENT INSTRUCTIONS
PRACTICEWORKS, INC.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[DATE]
StockTrans, Inc.
▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇:
Reference is made to the Stock Purchase Agreement (the "Agreement"),
dated as of [DATE] between Crescent International Limited (the "Investor") and
PracticeWorks, Inc. (the "Company"). Pursuant to the Agreement, the Investor has
agreed to purchase from the Company and the Company has agreed to sell to the
Investor from time to time shares of Common Stock of the Company (the "Common
Stock"). As a condition to the effectiveness of the Agreement, the Company has
agreed to issue to you, as the transfer agent for the Common Stock (the
"Transfer Agent"), these instructions (the "Irrevocable Instructions") relating
to the Common Stock to be issued to the Investor (or a permitted assignee)
pursuant to the Agreement. Any term used herein and not otherwise defined shall
have the meaning set forth in the Agreement.
1. MECHANICS OF DELIVERY OF CERTIFICATES REPRESENTING COMMON
STOCK
a. First Sale. Upon confirmation by the Investor of transfer of funds
due to the Company pursuant to the First Sale, the Transfer Agent shall deliver
to the Investor by overnight courier certificates representing Common Stock as
promptly as practicable, but in no event later than three business days after
the Closing Date relating to the First Sale.
b. Subsequent Sales. The Transfer Agent shall deliver to the Investor
by overnight courier certificates representing Common Stock as promptly as
practicable, but in no event later than three business days after any Closing
pursuant to which the Investor acquires Common Stock under the Agreement, or
after any request that a Legend be removed.
c. Address. Unless otherwise notified in writing by the Investor, the
certificates delivered to the Investor pursuant to the Agreement and the
preceding two paragraphs shall be delivered at the following address:
[ADDRESS]
With notice to:
[ADDRESS]
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2. ISSUANCE OF COMMON STOCK WITHOUT THE LEGEND
a. Pursuant to the Agreement, the Company is required to prepare and
file with the Commission, and maintain the effectiveness of, a registration
statement or registration statements registering the resale of the Common Stock
acquired or to be acquired by the Investor. The Company will advise the Transfer
Agent in writing of the effectiveness of any such registration statement
promptly upon its being declared effective. The Transfer Agent shall be entitled
to rely on such advice and shall assume that such registration statement remains
effective unless the Transfer Agent is otherwise advised in writing by the
Company and shall not be required to independently confirm the continued
effectiveness of such registration statement. In the circumstances set forth in
paragraph (b) below, the Transfer Agent shall deliver to the Investor
certificates representing Common Stock not bearing the Legend without requiring
further advice or instruction or additional documentation from the Company or
its counsel or the Investor or its counsel or any other party (other than as
described in such paragraphs).
b. At any time after the effective date of the applicable registration
statement (provided that the Company has not informed the Transfer Agent in
writing that such registration statement is not effective) upon any surrender of
one or more certificates evidencing Common Stock which bear the Legend,
accompanied by a notice from the Investor, its broker, custodian or permitted
assignee requesting the issuance of new certificates free of the Legend to
replace those surrendered and setting forth whether a transfer is pursuant to a
registration statement, Rule 144 or Rule 144(k), the Transfer Agent shall
promptly deliver to the Investor certificates representing the Common Stock not
bearing the Legend, in such names and denominations as requested, provided that:
i. if pursuant to a registration statement, the Investor (or its
broker, custodian or permitted assignee) shall confirm in writing to
the Transfer Agent that the Investor has complied with the prospectus
delivery requirements under the Securities Act;
ii. if pursuant to Rule 144(k) the Investor (or its broker,
custodian or permitted assignee) shall deliver to the Transfer Agent an
opinion of counsel satisfactory to the Company, to the effect that the
Investor is permitted to dispose of such Common Stock without
limitation as to amount or manner of sale pursuant to Rule 144(k) under
the Securities Act; or
iii. if pursuant to Rule 144, the Investor (or its broker,
custodian or permitted assignee) shall deliver to the Transfer Agent an
opinion of counsel satisfactory to the Company, to the effect that the
Investor has complied with the manner of sale and notice requirements
of Rule 144 under the Securities Act, as amended.
Any advice, notice or instructions to the Transfer Agent required or
permitted to be given hereunder may be transmitted via facsimile to the Transfer
Agent's facsimile number of (▇▇▇) ▇▇▇-▇▇▇▇.
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The certificates bearing the Legend shall be surrendered and delivered
to the Transfer Agent at the following address:
StockTrans, Inc.
▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
3. FEES OF TRANSFER AGENT; INDEMNIFICATION
The Company agrees to pay the Transfer Agent for all fees and expenses
incurred in connection with these Irrevocable Instructions. The Company agrees
to indemnify the Transfer Agent and its officers, employees and agents, against
any losses, claims, damages or liabilities, joint or several, to which it or
they become subject based upon the performance by the Transfer Agent of its
duties in accordance with the Irrevocable Instructions.
4. THIRD PARTY BENEFICIARY
The Company and the Transfer Agent acknowledge and agree that the
Investor is an express third party beneficiary of these Irrevocable Instructions
and shall be entitled to rely upon, and enforce, the provisions hereof.
PRACTICEWORKS, INC.
By:
--------------------------------------
Name:
Title:
AGREED:
STOCKTRANS, INC.
By:
-------------------------------
Name:
Title:
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EXHIBIT F
FORM OF OPINION OF THE COMPANY'S INDEPENDENT COUNSEL
[Date]
Crescent International Ltd.
c/o GreenLight (Switzerland) SA
84, av Louis-Casai, ▇.▇. ▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Re: Stock Purchase Agreement Between Crescent International Ltd. and
PracticeWorks, Inc.
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section [6.11] [7.2(g)] of
the Stock Purchase Agreement by and between Crescent International Ltd., a
Bermuda entity (the "Investor") and PracticeWorks, Inc., a Delaware corporation
(the "Company"), dated [DATE] (the "Stock Purchase Agreement"), which provides
for the issuance and sale by the Company of shares of Common Stock of the
Company (the "Commitment Shares"), a warrant to purchase a number of shares of
Common Stock of the Company to be determined in accordance with the terms of
such warrant (the "Incentive Warrant") and warrants to purchase a number of
shares of Common Stock of the Company to be determined in accordance with the
terms of such warrants (the "Protective Warrants", and together with the
Incentive Warrant, the "Warrants") (the shares of Common Stock issued or
issuable pursuant to exercise of the Warrants are referred to herein as the
"Warrant Shares"). All terms used herein have the meanings defined for them in
the Stock Purchase Agreement unless otherwise defined herein.
We have acted as counsel for the Company in connection with the
negotiation of the Stock Purchase Agreement, the Warrants, and the Registration
Rights Agreement between the Investor and the Company, dated [DATE] (the
"Registration Rights Agreement" and together with the Stock Purchase Agreement,
the "Agreements"). As counsel, we have made such legal and factual examinations
and inquires as we have deemed advisable or necessary for the purpose of
rendering this opinion. In addition, we have examined, among other things,
originals or copies of such corporate records of the Company, certificates of
public officials and such other documents and questions of law that we consider
necessary or advisable for the purpose of rendering this opinion. In such
examination we have assumed the genuineness of all signatures on original
documents, the authenticity and completeness of all documents submitted to us as
originals, the conformity to original documents of all copies submitted to us as
copies thereof, the legal capacity of natural persons, and the due execution and
delivery of all documents (except as to due execution and delivery by the
Company) where due execution and delivery are a prerequisite to the
effectiveness thereof.
As used in this opinion, the expression "to our knowledge" refers to
the current actual knowledge of the attorneys of this firm who have worked on
matters for the Company solely in connection with the Agreements and the
Warrants and the transactions contemplated thereby.
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For purposes of this opinion, we have assumed that you have all
requisite power and authority, and have taken any and all necessary corporate
action, to execute and deliver the Agreements, and we are assuming that the
representations and warranties made by the Investor in the Agreements and
pursuant thereto are true and correct.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite power and authority (corporate and other) to carry on its business and
to own, lease and operate its properties and assets as described in the
Company's SEC Documents. To our knowledge, the Company does not own more than
fifty percent (50%) of the outstanding capital stock of or control any other
business entity. The Company is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which the Company owns
or leases property, other than those in which the failure so to qualify would
not have a Material Adverse Effect.
2. The Company has the requisite corporate power and authority to
enter into and perform its obligations under the Agreements and the Warrants and
to issue the Commitment Shares, the Warrants and the Warrant Shares. The
execution and delivery of the Agreements, and the execution, issuance and
delivery of the Warrants, by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action and no further consent or authorization of the Company or its
Board of Directors or stockholders is required. Each of the Agreements has been
duly executed and delivered, and the Warrants have been, and upon issuance will
be, duly executed, issued and delivered, by the Company and each of the
Agreements and the Warrants constitutes, and upon issuance will constitute,
valid and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.
3. The execution, delivery and performance of the Agreements and
the Warrants by the Company and the consummation by the Company of the
transactions contemplated thereby, including without limitation the issuance of
the Commitment Shares, the Warrant and the Warrant Shares, do not and will not
(i) result in a violation of the Company's Certificate or Bylaws; (ii) to our
knowledge, conflict with, or constitute a material default (or an event that
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any material agreement, indenture, instrument or any "lock-up" or similar
provision of any underwriting or similar agreement to which the Company is a
party, except for such conflicts, defaults, terminations, amendments,
accelerations and cancellations as would not, individually or in the aggregate,
have a Material Adverse Effect; or (iii) result in a violation of any federal or
state law, rule or regulation applicable to the Company or by which any property
or asset of the Company is bound or affected, except for such violations as
would not, individually or in the aggregate, have a Material Adverse Effect. To
our knowledge, the Company is not in violation of any terms of its Certificate
or Bylaws.
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4. The issuance of the Commitment Shares and the Warrants in
accordance with the Stock Purchase Agreement, and the issuance of the Warrant
Shares in accordance with the Warrants, will be exempt from registration under
the Securities Act of 1933 and will be in compliance with Delaware state
securities laws. When so issued, the Commitment Shares and the Warrant Shares
will be duly and validly issued, fully paid and nonassessable, and free of any
liens, encumbrances and preemptive or similar rights contained in the
Certificate or Bylaws or, to our knowledge, in any agreement to which the
Company is party.
5. To our knowledge, except as disclosed in the SEC Documents,
there are no claims, actions, suits, proceedings or investigations that are
pending against the Company or its properties, or against any officer or
director of the Company in his or her capacity as such, nor has the Company
received any written threat of any such claims, actions, suits, proceedings, or
investigations which are required to be and have not been disclosed in the SEC
Documents.
6. To our knowledge, there are no outstanding options, warrants,
calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or giving any right
to subscribe for or acquire any shares of Common Stock or contracts,
commitments, understanding, or arrangements by which the Company is or may
become bound to issue additional shares of Common Stock, or securities or rights
convertible or exchangeable into shares of Common Stock, except as described in
the SEC Documents.
[7. Nothing has come to our attention that has caused us to
believe that the Registration Statement and the Prospectus at the time the
Registration Statement became effective and as of the date of the filing with
the Commission of the Company's most recent Annual Report on Form 10-K or
Quarterly Report on Form 10-Q incorporated by reference into such Registration
Statement contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; however, we express no opinion with respect to the financial
statements and the notes thereto and the schedules and other financial and
statistical data derived therefrom included in the Registration Statement or the
Prospectus.] [For Opinion pursuant to Section 7.2(g).]
This opinion is furnished to the Investor solely for its benefit in
connection with the transactions described above and may not be relied upon by
any other person or for any other purpose without our prior written consent.
Very truly yours,
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EXHIBIT G
COMPLIANCE CERTIFICATE
The undersigned, __________, hereby certifies, with respect to shares
of common stock of PracticeWorks, Inc. (the "Company") issuable in connection
with the Sale Notice, dated _____________ (the "Notice"), delivered pursuant to
Article II of the Stock Purchase Agreement, dated [DATE], by and between the
Company and Crescent International Ltd. (the "Agreement"), as follows:
1. The undersigned is the duly elected [Office] of the Company.
2. The representations and warranties of the Company set forth in
Article IV of the Agreement are true and correct as though made on and as of the
date hereof.
3. The Company has performed all covenants and agreements to be
performed by the Company on or prior to the Closing Date related to the Notice
and has complied in all material respects with all obligations and conditions
contained in Article VII of the Agreement.
The undersigned has executed this Certificate this ____ day of
__________, ____.
By:
------------------------------------
Name:
Title:
46