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EXHIBIT 4.2(a)
PRACTICEWORKS, INC.
WARRANT AGREEMENT
FOR
FINOVA CAPITAL CORPORATION
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE
SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY THE REGISTERED HOLDER HEREOF FOR
PURPOSES OF INVESTMENT AND IN RELIANCE ON STATUTORY EXEMPTIONS UNDER THE
SECURITIES ACT, AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES
AND THE SECURITIES ISSUED UPON EXERCISE HEREOF MAY NOT BE SOLD, PLEDGED,
TRANSFERRED OR ASSIGNED, NOR MAY THIS WARRANT BE EXERCISED, EXCEPT IN A
TRANSACTION WHICH IS EXEMPT UNDER PROVISIONS OF THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT; AND IN THE CASE OF AN EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION
DOES NOT REQUIRE REGISTRATION OF ANY SUCH SECURITIES.
VOID AFTER 5:00 P.M. ATLANTA TIME, ON OCTOBER 23, 2008.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
Original Issue Date: March 5, 2001
FOR VALUE RECEIVED, PracticeWorks, Inc. (the "Company"), a Delaware
corporation, hereby certifies that FINOVA Capital Corporation (the "Initial
Holder" and, together with its successors and assigns, the "Holders") is
entitled, subject to the provisions of this Warrant, to purchase from the
Company, at any time, or, from time to time, during the period commencing on
March 5, 2001, and expiring at 5:00 p.m. Atlanta time, on October 23, 2008 (the
"Expiration Date"), up to eight-seven thousand five hundred (87,500) fully paid
and non-assessable shares of Common Stock (as defined herein) at a price of
$4.80 per share (the "Exercise Price").
The term "Common Stock" means the Common Stock, par value $0.01 per
share, of the Company as constituted on the date hereof (the "Base Date"),
together with any other equity securities that may be issued by the Company in
addition thereto or in substitution therefor. The number of shares of Common
Stock to be received upon the exercise of this Warrant may be adjusted, from
time to time, as hereinafter set forth. The shares of Common Stock deliverable
upon such exercise, and as adjusted, from time to time, are hereinafter referred
to as "Warrant Shares" or "Warrant Stock."
The term "Company" means and includes the corporation named above as
well as (i) any immediate or more remote successor corporation resulting from
the merger or consolidation of
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such corporation (or any immediate or more remote successor corporation of such
corporation) with another corporation or (ii) any corporation to which such
corporation (or any immediate or more remote successor corporation of such
corporation) has transferred its property or assets as an entirety or
substantially as an entirety.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a Warrant of like tenor and date. Any such Warrant executed
and delivered shall constitute an additional contractual obligation on the part
of the Company, whether or not this Warrant so lost, stolen, destroyed or
mutilated shall be at any time enforceable by anyone.
The Holder agrees with the Company that this Warrant is issued, and all
the rights hereunder shall be held subject to, all of the conditions,
limitations and provisions set forth herein.
1. EXERCISE OF WARRANT.
A. Subject to the limitations set forth in Sections 9,
10 and 11 hereof, this Warrant may be exercised in whole or in part at any time,
or, from time to time, during the period commencing on March 6, 2001, and
expiring 5:00 p.m. Atlanta time on the Expiration Date or, if such day is a day
on which banking institutions in Atlanta, Georgia are authorized by law to
close, then on the next succeeding day that shall not be such a day, by
presentation and surrender of this Warrant to the Company at its principal
office, with the Warrant Exercise Form attached hereto duly executed and
accompanied by payment (either in cash or by certified or official bank check,
payable to the order of the Company) of the Exercise Price for the number of
shares specified in such form and instruments of transfer, if appropriate, duly
executed by the Holder or his or her duly authorized attorney.
B. In addition to the method of payment set forth in
paragraph A. above and in lieu of a cash payment required thereunder, the Holder
shall have the right to exercise the Warrants in full or in part by surrendering
this Warrant in the manner specified in paragraph A. above in exchange for the
number of shares of Warrant Stock equal to the product of (x) the number of
shares as to which the Warrant is being exercised multiplied by (y) a fraction,
the numerator of which is the fair market value (as defined in Section 3 below)
of the Common Stock less the Exercise Price, and the denominator of which is
such fair market value.
C. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation, execute and
deliver a Warrant evidencing the rights of the Holder thereof to purchase the
balance of the shares purchasable hereunder.
Upon receipt by the Company of this Warrant, together with the
Exercise Price, at its office, or by the stock transfer agent of the Company at
its office, in proper form for exercise in accordance with the terms of Sections
8 and 9 hereof, the Holder shall be deemed to be
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the holder of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be actually delivered to the Holder.
The Company shall pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
Common Stock on exercise of this Warrant.
2. RESERVATION OF SHARES.
The Company will at all times reserve and keep available for issuance
and delivery, out of its authorized, but unissued Common Stock (or other shares
of capital stock of the Company and other securities), upon exercise of this
Warrant all shares of Common Stock or other shares of capital stock of the
Company (and other securities), from time to time, receivable upon exercise of
this Warrant. All such shares (and other securities) shall be duly authorized
and, when issued upon such exercise, shall be validly issued, fully paid,
non-assessable and free of all preemptive rights.
3. FRACTIONAL SHARES.
No fractional shares or script representing fractional shares shall be
issued upon the exercise of this Warrant, but the Company shall pay the Holder
an amount equal to the fair market value of such fractional share of Common
Stock in lieu of each fraction of a share otherwise called for upon any exercise
of this Warrant.
For purposes of this Section 3 the fair market value of a share of
Common Stock shall be determined as follows:
A. If the Common Stock is listed on a national
securities exchange or admitted to unlisted trading privileges on such exchange
or listed for trading on the NASDAQ system, the current market value shall be
the last reported sale price of the Common Stock on such exchange or system on
the last business day prior to the date of exercise of this Warrant, or if no
such sale is made on such day or if no such sale is reported, the average
closing bid and asked prices for such day on such exchange system; or
B. If the Common Stock is not so listed or admitted to
unlisted trading privileges, the current market value shall be the mean of the
last reported bid and asked prices reported by the National Quotation Bureau,
Inc. on the last business day prior to the date of the exercise of this Warrant;
or
C. If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported, the
current market value shall be an amount, not less than book value thereof as of
the date of exercise, determined in good faith by the Board of Directors of the
Company. The Company shall provide the Holder prompt notice of any such
determination, which shall specify the basis for such valuation in detail
reasonably
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acceptable to the Holder. If the Holder objects to any such valuation by the
Board of Directors of the Company, the Holder shall notify the Company of such
objection within twenty (20) days of notice thereof. Thereafter, the Holder and
the Company shall use their commercially reasonable efforts to determine the
current market value. If such parties are unable to reach agreement within
twenty (20) business days of the notice of objection by the Holder, then either
the Company or the Holder may give notice to the other party that it is
retaining a separate independent investment banking firm to determine the
current market value. Within ten (10) business days of such notice, the other
party also may retain a separate investment banking firm. If each of the parties
retains an investment banking firm pursuant to this Section, the two firms
selected by the parties shall jointly act to determine the current market value
and shall deliver their opinion in writing to the Company and the Holder. If
such firms cannot jointly make such determination within thirty (30) calendar
days, then, unless otherwise directed by agreement of the Company and the
Holder, such firms shall choose another independent investment banking firm,
which firm shall make such determination and render such opinion. Each party
shall bear the fees and expenses of any investment banking firms retained by
such party pursuant to this Warrant, with the parties splitting the fees and
expenses of a third investment banking firm, if necessary.
4. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
Subject to the provisions of Section 7 hereof, this Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company, for other warrants of different
denominations, entitling the Holder or Holders thereof to purchase in the
aggregate the same number of shares of Common Stock purchasable hereunder.
Upon surrender of this Warrant to the Company or at the office of its
stock transfer agent, if any, with the Assignment Form annexed hereto duly
executed and funds sufficient to pay any transfer tax, the Company shall,
without charge, execute and deliver a Warrant in the name of the assignee named
in such instrument of assignment and this Warrant shall promptly be canceled.
This Warrant may be divided or combined with other Warrants that carry
the same rights upon presentation hereof at the office of the Company or at the
office of its stock transfer agent, if any, together with a written notice
specifying the names and denominations in which Warrants are to be issued and
signed by the Holder hereof.
5. RIGHTS OF THE HOLDER.
The Holder shall not, by virtue hereof, be entitled to any rights of a
stockholder in the Company, either at law or in equity, and the rights of the
Holder are limited to those expressed in this Warrant.
6. ANTI-DILUTION PROVISIONS.
A. If the Company shall at any time:
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(i) subdivide its outstanding shares of Common
Stock (or other securities at the time receivable upon the exercise of the
Warrant) by recapitalization, reclassification or split up thereof; or
(ii) declare a stock dividend or distribute
shares of Common Stock or any other capital stock of the Company or any
wholly-owned subsidiary of the Company to its stockholders;
(iii) engage in any other transaction in which the
holders of Common Stock are entitled to receive securities or assets with
respect to or in exchange for Common Stock;
then the numbers of shares of Common Stock subject to this Warrant immediately
prior to any such event (each, an "Organic Change") shall be proportionately
increased or decreased, as appropriate, to ensure that the holder of this
Warrant thereafter will have the right to acquire and receive in lieu of or in
addition to the shares of Common Stock immediately theretofore acquirable and
receivable upon the exercise of this Warrant, such securities or assets that
would have been issued or payable in such Organic Change with respect to or in
exchange for the number of shares of Common Stock which would have been
acquirable or receivable upon the exercise of this Warrant as of the date of
such Organic Change. To the extent that an Organic Change involves the issuance
of securities or assets of any entity other than the Company, then prior to the
consummation of such Organic Change, the Company will secure from such other
entity issuing the securities or providing the assets in such Organic Change, a
written agreement, in form and substance reasonably satisfactory to the holder
of this Warrant, to deliver to the holder of this Warrant such additional
warrants or other securities of such entity in the manner contemplated by this
provision.
Any such adjustment and adjustment to the Exercise Price
pursuant to this Section 6.A. shall be effective at the close of business on the
effective date of such subdivision or combination or if any adjustment is the
result of a stock dividend or distribution then the effective date for such
adjustment based thereon shall be the record date therefor.
Whenever the number of shares of Common Stock purchasable upon
the exercise of this Warrant is adjusted, as provided in this Section 6.A., the
Exercise Price (and the exercise price of any warrants or other instruments
issued by any other entity) shall be adjusted to the nearest cent such that the
total exercise price for all such instruments including this Warrant shall equal
the product of the Exercise Price immediately prior to such adjustment,
multiplied by the number of shares of Common Stock purchasable upon the exercise
of this Warrant immediately prior to such adjustment.
B. The adjustments described in this Section 6., and the
manner of their application, shall be determined solely by the Company, and any
such adjustment may provide for the elimination or redemption of fractional
share interest. The adjustments required under
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this Section 6. shall apply to only successors of the Company and shall be made
regardless of the number or type of successive events requiring such
adjustments.
7. NOTICES OF RECORD DATE, ETC.
In case:
A. The Company shall take a record of the holders of its
Common Stock (or other securities at the time receivable upon the exercise of
the Warrant) for any purpose; or
B. Of any recapitalization of the Company's Common
Stock; or
C. Of any voluntary or involuntary dissolution,
liquidation or winding up of the Company, then, and in each such case, the
Company shall mail or cause to be mailed to each holder of the Warrant at the
time outstanding a notice specifying, as the case may be:
(i) The date on which a record is to be taken,
the purpose for which the record date is being taken, the amount and character
of the dividend, distribution or right, if any; or
(ii) The date on which such recapitalization,
dissolution, liquidation or winding up is to take place, and the time, if any,
is to be fixed, as to which the holders of record of Common Stock (or such other
securities at the time receivable upon the exercise of the Warrant) shall be
entitled to exchange their shares of Common Stock (or such other securities) for
securities or other property deliverable upon such recapitalization.
Such notice shall be mailed at least twenty (20) days prior to the date
therein specified and the Warrant may be exercised prior to said date during the
term of the Warrant.
8. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933.
This Warrant and any Common Stock may not be sold, transferred,
pledged, hypothecated or otherwise disposed of except as follows:
A. To a person who is a person to whom this Warrant or
the Common Stock may legally be transferred without registration and without the
delivery of a current prospectus under the Securities Act with respect thereto
and then only against receipt of an agreement of such person to comply with the
provisions of this Section 8 with respect to any resale or other disposition of
such securities; or
B. To any person upon delivery of a prospectus then
meeting the requirements of the Securities Act relating to such securities and
the offering thereof for such sale or disposition, and thereafter to all
successive assignees.
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In the case of either of the foregoing, the Company shall be under no
obligation to transfer this Warrant or any of the Common Stock unless and until
the Company shall have received an opinion of counsel reasonably satisfactory to
the Company that such transaction does not require registration of any such
securities. Holder shall bear the cost of the preparation and review of such
opinion.
9. RESTRICTIONS ON EXERCISE IMPOSED BY FEDERAL AND STATE SECURITIES LAWS.
Holder hereby acknowledges that neither this Warrant nor any of the
securities that may be acquired upon exercise of this Warrant have been
registered under the Securities Act or under the securities laws of any state.
Holder hereby represents to the Company that this Warrant is being acquired for
investment purposes and not with a view to distribution thereof or of any of the
Common Stock.
The Holder acknowledges that, upon exercise of this Warrant, the
securities to be issued upon such exercise may come under applicable Federal and
state securities (or other) laws requiring registration, qualification or
approval of governmental authorities before such securities may be validly
issued or delivered upon notice of such exercise.
The Company's sole obligation to any Holder upon exercise hereof shall
be to use its best efforts to obtain exemptions from registration or
qualification for the issuance of such securities under applicable state and
federal securities laws, and the Holder further agrees that the issuance of such
securities shall be deferred until such exemptions shall have been obtained; and
it is further agreed that the Company shall have no other obligation or
liability to the Holder for non-issuance of such securities except to return the
Warrant surrendered and to refund to the Holder any consideration tendered in
respect of the exercise price. With respect to any such securities, this Warrant
may not be exercised by, and securities shall not be issued to, any Holder in
any state in which such exercise would be unlawful.
The restrictions imposed by this Section 9 upon the exercise of this
Warrant shall cease and terminate as to any particular shares of Warrant Stock:
A. When such securities shall have been effectively
registered under the Securities Act and all applicable state securities laws and
disposed of in accordance with the registration statement covering such
securities; or
B. When, in the opinion of counsel reasonably
satisfactory to the Company such restrictions are no longer required in order to
ensure compliance with the Securities Act or under any applicable state
securities laws.
10. REGISTRATION RIGHTS.
A. Certain Definitions. As used in this Warrant, the
following terms shall have the following respective meanings:
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1. "EXCHANGE ACT" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the SEC promulgated
thereunder, all as the same shall be in effect at the time.
2. "PERSON" shall mean any individual, partnership,
corporation, trust or other entity.
3. "PUBLIC OFFERING" means the sale of Common Stock of
the Company pursuant to a registration statement under the Securities Act.
4. The terms "REGISTER", "REGISTERED" and "REGISTRATION"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration or ordering
of the effectiveness of such registration statement.
5. "REGISTRABLE SECURITIES" means:
(a) The shares of Common Stock of the Company
issuable or issued upon conversion of the Warrants (the "Shares"); and
(b) Any other shares of the Company's Common
Stock issued as (or issuable upon conversion or exercise of any warrant, right
or other security which is issued as) a dividend or other distribution with
respect to or exchange for or replacement of the Shares, excluding in all cases,
however, any Registrable Securities sold by a person in a transaction in which a
Holder's rights under this Warrant are not assigned;
provided, however, that Registrable Securities shall only be treated as
Registrable Securities if and so long as, they have not been: (i) sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction; or (ii) sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(i) thereof so that all transfer restrictions and restrictive legends
with respect thereto are removed upon the consummation of such sale.
6. "SECURITIES ACT" shall mean the Securities Act of
1933, as amended, and the rules and regulations of the SEC promulgated
thereunder, all as the same shall be in effect at the time.
7. "SEC" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
B. Demand Rights. At any time on or after March 31,
2002, the Initial Holder may notify the Company in writing (a "Demand Notice")
that the Company file with the SEC a registration statement on Form S-3
registering all of the Registrable Securities for resale. Within thirty (30)
days following a Demand Notice, the Company shall file with the SEC a
registration statement on Form S-3 registering all of the Registrable Securities
for resale. The Company shall promptly respond to any SEC comments on such
registration statement and shall
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otherwise use its best efforts to cause such registration statement to be
declared effective as soon as practicable.
C. Piggyback Rights
1. Notice of Registration. If at any time or, from time
to time, the Company shall determine to register for its own account or the
account of any stockholder of the Company any of the Company's common stock in a
Public Offering (other than registrations on Forms S-4 or S-8 or any successor
form), the Company will:
(a) Promptly but in no event later than thirty
(30) days prior to the filing of the registration statement give to the Holders
written notice thereof; and
(b) Include in such registration (and any
related qualification under blue sky laws or other compliance), and
underwriting, all the Registrable Securities (subject to the second paragraph
under Section 10.C.2 below) specified in a written request or requests made
within thirty (30) days after receipt of such written notice from the Company by
any Holder.
2. Underwriting. The right of any Holder to registration
pursuant to this Section 10 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein. If any Holder proposes to
distribute his securities through such underwriting, such Holder shall (together
with the Company and any other Holders and any other security holders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the managing underwriter selected
for such underwriting by the Company.
Notwithstanding any other provision of this Section
10, if the managing underwriter in connection with such registration advises the
Company (or the other shareholders participating therein) in writing that, in
its good faith opinion, such offering would be adversely affected in a material
manner by the inclusion therein of the total number of Registrable Securities,
the Company shall so advise the Holders and the other holders distributing their
securities through such underwriting pursuant to piggyback registration rights
similar to this Section 10, and the Company shall reduce the number of
securities to be included in the registration and underwriting by reducing the
number of Registrable Securities and other securities to be registered for
resale by the Holders and all other holders other than Crescent International
Ltd., an entity organized and existing under laws of Bermuda, and Ceramco, Inc.,
a Delaware corporation, in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders and any other
security holders at the time of filing the registration statement.
If a Holder disapproves of the terms of any such
underwriting, such Holder's sole remedy shall be to withdraw therefrom by
written notice to the Company and the managing underwriter. Such Holder shall be
deemed to have withdrawn if such Holder fails to
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execute underwriting documents requested by the managing underwriter within the
time period requested for execution of such documents.
3. Lock-up of Unregistered Shares. If a Holder elects to
participate (a) in a registration statement filed by the Company with respect to
an underwritten public offering or (b) in a registration statement filed by the
Company on, or within 10 days after, the date on which the Company files a
registration statement for an underwritten public offering and fifty percent
(50%) or more of the Registrable Shares that it has requested to be included in
such registration statements (in the aggregate) are included in such
registration statements, taken as a whole, then such Holder will not, directly
or indirectly, sell, make a short sale of, grant an option for the purchase of,
or otherwise dispose of any Registrable Securities not included in the
registration without the prior written consent of the Company or the
underwriters for such period of time (the "Lock-up Period") following the
effectiveness of the registration (not to exceed the Maximum Lock-up Period) as
may be requested by the Company and the managing underwriter. As used herein,
the term "Maximum Lock-up Period" means (i) with respect to an underwritten
public offering described in clause (a) of the prior sentence, 180 days, or (ii)
with respect to a registration statement described in clause (b) of the prior
sentence, a period beginning on the effective date of such registration
statement and ending on the earlier of 90 days after such effective date or June
30, 1999. The foregoing restriction is conditioned upon the Company and each of
the selling shareholders included in the registration statement being subject to
the same Lock-up Period.
4. Right to Terminate Registration. The Company shall
have the right to terminate or withdraw any registration initiated by it under
this Section 10 prior to the effectiveness of such registration, whether or not
any Holder has elected to include Registrable Securities in such registration.
5. Termination of Piggyback Rights. The rights of any
Holder to receive notice and to participate in a registration pursuant to the
terms of Section 10 shall terminate at the earliest to occur of:
(a) The date of sale by such Holder of all
remaining such securities held by such Holder; or
(b) The termination of this Warrant.
D. Obligations of Company. Whenever the Company is
required by the provisions of this Warrant to effect the registration of the
Registrable Securities, the Company shall:
1. Use its best efforts to cause such registration
statement to become effective and to remain effective until the earlier of (a)
the sale of the Registrable Securities so registered or (b) (i) with respect to
the registration statement contemplated by Section 10.B. or clause (b) in the
first sentence of Section 10.C.3., the second anniversary of the date hereof, or
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(ii) with respect to any other registration statement, ninety (90) days
subsequent to the effective date of such registration;
2. Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to make and to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect
to the sale or other disposition of all securities proposed to be registered in
such registration statement until the earlier of the sale of the Registrable
Securities so registered or ninety (90) days subsequent to the effective date of
such registration statement;
3. Furnish to any Holder participating in the
registration such number of copies of any prospectus (including any preliminary
prospectus and any amended or supplemented prospectus), in conformity with the
requirement of the Securities Act, as such Holder may reasonably request in
order to effect the offering and sale of the Registrable Securities to be
offered and sold, but only while the Company shall be required under the
provisions hereof to cause the registration statement to remain current;
4. If necessary, register or qualify the Registrable
Securities covered by such registration statement under the securities or blue
sky laws of such states as the Holders participating in the registration shall
reasonably request, maintain any such registration or qualification current
until the earlier of the sale of the Registrable Securities so registered or
ninety (90) days subsequent to the effective date of the registration statement,
and take any and all other actions either necessary or advisable to enable such
Holders to consummate the public sale or other disposition of the Registrable
Securities in jurisdictions where such Holders desire to effect such sales or
other disposition;
5. Take all such other actions either necessary or
desirable to permit the Registrable Securities held by such Holder to be
registered and disposed of in accordance with the method of disposition
described herein;
6. Promptly notify Holders, at any time when a
prospectus relating to the Shares being distributed is required to be delivered
under the Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing and promptly prepare, file with
the SEC and furnish to Holders a reasonable number of copies of a supplement to,
or an amendment of, such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
7. Use its best efforts to furnish, at the request of
Holders or any underwriter of any distribution of the Shares, an opinion of
legal counsel to the Company, covering such
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matters as are typically covered by opinions of issuer's counsel in similar
offerings under the Securities Act; and
8. Use its best efforts to cause all of the Shares as to
which Holders shall have requested registration to be listed on any recognized
securities exchange, on which the Company's Common Stock is then listed and to
maintain the currency and effectiveness of any such listings.
E. Expenses of Registration. The Company shall pay all
of the reasonable out-of-pocket expenses incurred in connection with any
registration statements that are initiated pursuant to this Warrant, including,
without limitation, all SEC and blue sky registration and filing fees, printing
expenses, transfer agent and registrar fees, the fees and disbursements of the
Company's outside counsel and independent accountants including expenses
incurred in connection with any special audits incidental to or required by such
registration.
Any underwriting discounts, fees and disbursements of counsel to a
Holder, selling commissions, and stock transfer taxes applicable to the
Registrable Securities registered on behalf of a Holder shall be borne by the
Holder of the Registrable Securities included in such registration.
F. Indemnification.
1. The Company. The Company will indemnify Holders, each
officer or director thereof, and each person controlling one or more Holders
within the meaning of Section 15 of the Securities Act, and each underwriter, if
any, of the Company's securities, with respect to any registration,
qualification or compliance which has been effected pursuant to this Warrant,
against all expenses, claims, losses, damages or liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company in connection
with any such registration, qualification or compliance.
The Company will reimburse Holders and each person
controlling one (1) or more Holders, and each underwriter, if any, for any legal
and any other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission or alleged untrue statement or omission, made
in reliance upon and in conformity with written information furnished to the
Company by one or more Holders or controlling persons or underwriters seeking
indemnification.
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2. Holders. Each Holder will, if Registrable Securities
held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected (the "Indemnifying
Holder"), indemnify the Company, each of its directors and officers and each
underwriter, if any, of the Company's securities covered by such registration
statement and each person who controls the Company within the meaning of Section
15 of the Securities Act, against all claims, losses, damages and liabilities
(or actions in respect thereof), including without limitation, any legal or
other expenses reasonably incurred in connection with the investigations or
defense thereof, arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written
information furnished to the Company by such Indemnifying Holder, provided that
the liability of each Holder shall be limited to the dollar amount of the net
proceeds of the Registrable Securities actually sold by such Holder pursuant to
the registration statement.
3. Defense of Claims. Each party entitled to
indemnification under this Section 10 (the "Indemnified Party") shall give
notice to the party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom,
provided that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or litigation, shall be approved by the Indemnified Party (whose
approval shall not unreasonably be withheld), and the Indemnified Party may
participate in such defense at such party's expense: provided, however, that the
Indemnifying Party shall pay such expense if representation of the Indemnified
Party by counsel retained by the Indemnifying Party would be inappropriate due
to actual or potential differing interests between the Indemnified Party and any
other party represented by such counsel in such proceeding; and
provided, further, that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 10 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action.
No Indemnifying Party, in the defense of any such claim or litigation
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. No Indemnifying Party shall be required to indemnify any Indemnified
Party with respect to any settlement entered into without such Indemnifying
Party's prior consent.
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G. Rule 144 and Rule 144A Reporting. With a view to
making available the benefits of certain rules and regulations of the SEC which
may at any time permit the sale of the Registrable Securities to the public
without registration, the Company agrees to use its best efforts to:
1. Make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act;
2. File with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act;
3. So long as a Holder owns any Registrable Securities,
furnish to such Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144, and of
the Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company, and such other reports and documents so filed as a Holder may
reasonably request in availing itself of any rule or regulation of the SEC
allowing such Holder to sell any such securities without registration; and
4. If the Company is no longer subject to Section 13 or
15(d) of the Exchange Act, to provide to each Holder or any prospective
purchaser of such Holder's Warrant or Warrant Shares, to the extent available,
the information required to be delivered under Paragraph (d)(4) of Rule 144A
("Rule 144A") (or any similar rule then in effect) promulgated by the SEC under
the Securities Act in respect of a transaction qualifying for an exemption under
Rule 144A and it will take such further action as a Holder may reasonably
request, all to the extent required from time to time, to enable such Holder to
sell its Warrants or Warrant Shares without registration under the Securities
Act pursuant to Rule 144A.
5. This Warrant has been acquired by the Holder as a
result of the pro rata distribution by the Company of all the issued and
outstanding shares of the Common Stock to the Company's stockholders (the
"Distribution"), all as described in the Company's registration statement filed
with the SEC (Registration No. 333-53792). In connection with the Distribution,
InfoCure caused the Company to issue this Warrant to the Holders pursuant to
Section 6 of the Warrant Agreement dated October 23, 1998 among InfoCure and the
Holders (the "Original Warrant"). The Company and the Holders acknowledge that,
for purposes of Rule 144 promulgated under the Securities Act, this Warrant
shall be deemed to have been acquired at the same time as the Original Warrant.
The Company and the Holders acknowledge that this position is based upon
interpretations of Rule 144(d)(3)(i) issued by the Staff of the SEC, which are
subject to change.
H. Termination of Rights. Upon termination of this
Warrant, no party shall have any further obligation or liability hereunder
except that the provisions of Section 10 shall survive the termination of this
Warrant.
11. SUBSTITUTION OF FORM OF WARRANT.
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In order to facilitate the administration and orderly transfer of this
and other Warrants issued by the Company, the Company shall have the right, but
not the obligation, upon notice to Holder, to require Holder to surrender this
Warrant to the Company in exchange for a substituted form of Warrant containing
substantially similar terms and conditions, but providing for, among other
things, administration by an independent Warrant Agent.
12. LEGEND.
Unless the shares of Warrant Stock have been registered under the
Securities Act, upon exercise of any of the Warrants and the issuance of any of
the shares of Warrant Stock, all certificates representing shares shall bear on
the face thereof substantially the following legend, as well as any other
legends necessary to comply with applicable state and federal laws for the
issuance of such shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER THE PROVISIONS OF ANY APPLICABLE
STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY THE
REGISTERED HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN
RELIANCE ON STATUTORY EXEMPTIONS UNDER THE SECURITIES ACT,
AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE
SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED,
EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER PROVISIONS OF
THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT; AND IN
THE CASE OF AN EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION OF ANY
SUCH SECURITIES.
13. NOTICES.
All notices required hereunder shall be in writing and shall be deemed
given when delivered personally, one day after being sent to the recipient by
reputable overnight courier service, or the day of transmission if sent by
telecopy with a copy by reputable overnight courier service for delivery the
next day, in each case, to (i) the Holder at its last known address and telecopy
number as set forth on the records of the Company, or (ii) the Company at its
principal office at 0000 Xxx Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000,
attention: Xxxxxxx X. Xxxxxxx, telecopy number: (000) 000-0000, or at such other
address of which the Company or Holder has been advised by notice hereunder.
14. SHAREHOLDER INFORMATION.
For so long as any portion of this Warrant remains unexercised, the
Company shall deliver to the Holder such reports, financial statements and other
materials that the Company delivers to its shareholders generally. Such reports,
financial statements and other materials shall be sent for delivery at the same
time such materials are sent to the Company's stockholders.
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15. APPLICABLE LAW.
The Warrant is issued under and shall for all purposes be governed by
and construed in accordance with the laws of the State of Delaware.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on
its behalf, in its corporate name, by its duly authorized officer, all as of the
day and year first above written.
PRACTICEWORKS, INC.:
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Its duly authorized officer
Address: 0000 Xxx Xxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within Warrant
to the extent of purchasing ________ (___) shares of Common Stock of
PracticeWorks, Inc., a Delaware corporation (the "Company"), and hereby makes
payment of $__________ in payment therefor. By delivery of this Warrant Exercise
Form, the Warrant holder agrees to provide such additional information,
warranties, representations, documentation, certificates, and legal opinions as
may reasonably be requested by the Company or its counsel to assure compliance
with applicable laws and the terms of the Warrant and any other agreement
between the Company and the undersigned.
-----------------------------------
Signature of Warrant Holder
-----------------------------------
Signature, if jointly held
-----------------------------------
Date
Tax ID #:
--------------------------
INSTRUCTIONS FOR ISSUANCE OF STOCK
(if other than to the registered holder of the within Warrant)
Name:
(Please typewrite or print in block letters)
Address:
------------------------------------------------------------------------
------------------------------------------------------------------------
Social Security or Taxpayer Identification Number:
------------------------------
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ASSIGNMENT FORM
FOR VALUE RECEIVED, __________ HEREBY SELLS, ASSIGNS AND TRANSFERS
UNTO:
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NAME (PLEASE TYPEWRITE OR PRINT IN BLOCK LETTERS)
ADDRESS:
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THE RIGHT TO PURCHASE COMMON STOCK OF PRACTICEWORKS, INC., A DELAWARE
CORPORATION, REPRESENTED BY THIS WARRANT TO THE EXTENT OF SHARES AS TO WHICH
SUCH RIGHT IS EXERCISABLE AND DOES HEREBY IRREVOCABLY CONSTITUTE AND APPOINT
__________ ATTORNEY, TO TRANSFER THE SAME ON THE BOOKS OF THE COMPANY WITH FULL
POWER OF SUBSTITUTION IN THE PREMISES.
DATED:
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-----------------------------------
SIGNATURE
-----------------------------------
SIGNATURE, IF JOINTLY HELD
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