-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RniSsHAxqJQHbqIDaEVgM0OS/rHRk55Mfchh14HHcb2cxZp+n2tW5TtodivY6TCU 8rFLDgV6aPtZs+rCykYmwA== 0000950144-02-003066.txt : 20020415 0000950144-02-003066.hdr.sgml : 20020415 ACCESSION NUMBER: 0000950144-02-003066 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20020326 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020329 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROXYMED INC /FT LAUDERDALE/ CENTRAL INDEX KEY: 0000906337 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 650202059 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22052 FILM NUMBER: 02593436 BUSINESS ADDRESS: STREET 1: 2555 DAVIE ROAD STREET 2: SUITE 110 CITY: FORT LAUDERDALE STATE: FL ZIP: 33317-7424 BUSINESS PHONE: 9544731001 MAIL ADDRESS: STREET 1: 2555 DAVIE ROAD STREET 2: SUITE 110 CITY: FT LAUDERDALE STATE: FL ZIP: 33317 FORMER COMPANY: FORMER CONFORMED NAME: HMO PHARMACY INC DATE OF NAME CHANGE: 19930601 8-K 1 g75168e8-k.txt PROXYMED, INC. FORM 8-K 03/26/02 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 26, 2002 PROXYMED, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Florida 000-22052 65-0202059 ------- ----------- ------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 2555 Davie Road, Suite 110, Ft. Lauderdale, Florida 33317-7424 --------------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (954) 473-1001 ITEM 5. OTHER EVENTS. On March 26, 2002, ProxyMed, Inc. (the "Company") agreed to sell 1,569,366 shares of unregistered common stock at $15.93 per share in a private placement to General Atlantic Partners 74, L.P., GAP Coinvestment Partners II, L.P., Gapstar, LLC, GAPCO GmbH & Co. KG. (the "General Atlantic Purchasers"), four companies affiliated with General Atlantic Partners, LLC ("GAP"), a private equity investment fund. The transaction, which is expected to close on April 5, 2002, will result in net proceeds to the Company of $25 million. No placement agent was used in this transaction. In addition, the Company also agreed to issue a two-year warrant for the purchase of 549,279 shares of common stock also at $15.93 per share. All shares sold are subject to a one year lock-up agreement from the date of closing. The Company has agreed to grant the General Atlantic Purchasers certain demand and "piggy back" registration rights starting one year from closing. Additionally, in connection with the transaction, the Company's board of directors appointed a general partner of GAP to fill a vacancy on the Company's board. ITEM 7. FINANCIAL STATEMENTS, PROFORMA FINANCIAL INFORMATION AND EXHIBITS. (c) The following exhibits are included herein: Exhibit 10.1 - Stock and Warrant Purchase Agreement dated March 26, 2002 between ProxyMed, Inc. and the General Atlantic Purchasers. Exhibit 10.2 - Form of Common Stock Purchase Warrants issued to the General Atlantic Purchasers. Exhibit 10.3 - Form of Registration Rights Agreement between ProxyMed, Inc. and the General Atlantic Purchasers. Exhibit 99.1 - Press Release dated March 27, 2002. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PROXYMED, INC. Date March 28, 2002 /s/ Judson E. Schmid ----------------------------------------- Judson E. Schmid, Executive Vice President and Chief Financial Officer 3 INDEX TO EXHIBITS Exhibit Number Description -------------- ----------- 10.1 Stock and Warrant Purchase Agreement dated March 26, 2002 between ProxyMed, Inc. and General Atlantic Purchasers. 10.2 Form of Common Stock Purchase Warrants issued to the General Atlantic Purchasers. 10.3 Form of Registration Rights Agreement between ProxyMed, Inc. and the General Atlantic Purchasers. 99.1 Press Release dated March 28, 2002. 4 EX-10.1 3 g75168ex10-1.txt STOCK & WARRANT PURCHASE AGREEMENT EXHIBIT 10.1 ================================================================================ STOCK AND WARRANT PURCHASE AGREEMENT by and among PROXYMED, INC., GENERAL ATLANTIC PARTNERS 74, L.P., GAP COINVESTMENT PARTNERS II, L.P. GAPSTAR, LLC and GAPCO GMBH & CO. KG ---------------------------------------------- Dated: March 26, 2002 ---------------------------------------------- ================================================================================ TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS............................................................................1 1.1 Definitions............................................................................1 ARTICLE II PURCHASE AND SALE OF COMMON STOCK......................................................7 2.1 Purchase and Sale of Common Stock......................................................7 2.2 Purchase and Sale of Warrants..........................................................7 2.3 Use of Proceeds........................................................................7 2.4 Closing................................................................................7 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................8 3.1 Corporate Existence and Power..........................................................8 3.2 Authorization; No Contravention; FBCA Sections 607.0901 and 607.0902...................8 3.3 Governmental Authorization; Third Party Consents.......................................8 3.4 Binding Effect.........................................................................9 3.5 Litigation.............................................................................9 3.6 Compliance with Laws...................................................................9 3.7 Capitalization.........................................................................9 3.8 No Default or Breach; Contractual Obligations.........................................11 3.9 Title to Properties and Assets........................................................11 3.10 Reports; Financial Statements.........................................................11 3.11 Taxes.................................................................................12 3.12 No Material Adverse Change; Ordinary Course of Business...............................12 3.13 Private Offering......................................................................12 3.14 Labor Relations.......................................................................13 3.15 Employee Benefit Plans................................................................13 3.16 Liabilities...........................................................................13 3.17 Intellectual Property.................................................................14 3.18 Network Redundancy and Computer Back-up...............................................15 3.19 Privacy of Customer Information.......................................................15 3.20 Potential Conflicts of Interest.......................................................15 3.21 Trade Relations.......................................................................16 3.22 Broker's, Finder's or Similar Fees....................................................16 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS......................................16 4.1 Existence and Power...................................................................16 4.2 Authorization; No Contravention.......................................................16 4.3 Governmental Authorization; Third Party Consents......................................16 4.4 Binding Effect........................................................................17 4.5 Purchase for Own Account..............................................................17 4.6 Restricted Securities.................................................................17 4.7 Broker's, Finder's or Similar Fees....................................................17 4.8 Accredited Investor...................................................................18
- i -
Page ---- ARTICLE V CONDITIONS TO THE OBLIGATION OF THE PURCHASERS TO CLOSE...............................18 5.1 Representations and Warranties........................................................18 5.2 Compliance with this Agreement........................................................18 5.3 Officer's Certificate.................................................................18 5.4 Secretary's Certificate...............................................................18 5.5 Purchased Securities..................................................................19 5.6 Registration Rights Agreement.........................................................19 5.7 Opinion of Counsel....................................................................19 5.8 Board of Directors....................................................................19 ARTICLE VI CONDITIONS TO THE OBLIGATION OF THE COMPANY AND THE SELLING STOCKHOLDERS TO CLOSE.....19 6.1 Payment of Purchase Price.............................................................19 6.2 Registration Rights Agreement.........................................................19 ARTICLE VII INDEMNIFICATION.......................................................................20 7.1 Indemnification.......................................................................20 7.2 Notification..........................................................................20 7.3 Contribution..........................................................................21 ARTICLE VIII AFFIRMATIVE COVENANTS OF THE COMPANY..................................................22 8.1 Financial Statements and Other Information............................................22 8.2 Books and Records.....................................................................22 8.3 Inspection. .........................................................................23 8.4 Board Representation..................................................................23 8.5 Offering Notice; Preemptive Rights; Exercise; Closing.................................24 ARTICLE IX TERMINATION OF AGREEMENT..............................................................26 9.1 Termination...........................................................................26 9.2 Survival..............................................................................26 ARTICLE X MISCELLANEOUS.........................................................................27 10.1 Survival of Representations and Warranties............................................27 10.2 Notices...............................................................................27 10.3 Successors and Assigns; Third Party Beneficiaries.....................................29 10.4 Amendment and Waiver..................................................................29 10.5 Counterparts..........................................................................30 10.6 Headings..............................................................................30 10.7 GOVERNING LAW ........................................................................30 10.8 Severability..........................................................................30 10.9 Rules of Construction.................................................................30 10.10 Entire Agreement......................................................................30 10.11 Fees..................................................................................30 10.12 Public Announcements. ...............................................................31 10.13 Further Assurances....................................................................31
- ii - EXHIBITS A Form of Registration Rights Agreement B Form of Warrant C Form of Holland & Knight LLP Opinion SCHEDULES 2.1 Purchased Shares and Purchase Price 2.2 Warrants and Purchase Price 3.5 Litigation 3.7(b) List of Subsidiaries and their Equity Holders 3.8 No Default or Breach; Contractual Obligations 3.9 Title to Properties and Assets 3.11 Taxes 3.17 Intellectual Property 3.21 Trade Relations - iii - 1 STOCK AND WARRANT PURCHASE AGREEMENT STOCK AND WARRANT PURCHASE AGREEMENT, dated March 26, 2002 (this "AGREEMENT"), by and among ProxyMed, Inc., a Florida corporation (the "COMPANY"), General Atlantic Partners 74, L.P., a Delaware limited partnership ("GAP LP"), GAP Coinvestment Partners II, L.P., a Delaware limited partnership ("GAP COINVESTMENT"), GAPCO GmbH & Co. KG, a German limited partnership ("GMBH COINVESTMENT"), and GapStar, LLC, a Delaware limited liability company ("GAPSTAR" and, collectively with GAP LP, GAP Coinvestment and GmbH Coinvestment, the "PURCHASERS"). WHEREAS, upon the terms and conditions set forth in this Agreement, the Company proposes to issue and sell to each of the Purchasers for the aggregate purchase price set forth opposite such Purchaser's name on Schedule 2.1 or SCHEDULE 2.2 hereto, as applicable (a) the aggregate number of shares, par value $0.001 per share, of common stock of the Company (the "COMMON STOCK"), determined by dividing the aggregate purchase price set forth opposite such Purchaser's name on SCHEDULE 2.1 hereto by the Price Per Share (as defined below) and (b) a warrant in the form attached hereto as EXHIBIT B (the "WARRANTS") to purchase the aggregate number of shares of Common Stock equal to 35% of the shares of Common Stock purchased by such Purchaser pursuant to Section 2.1. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS 1.1 DEFINITIONS. As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated: "AFFILIATE" shall mean any Person who is an "affiliate" as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. "AGREEMENT" means this Agreement as the same may be amended, supplemented or modified in accordance with the terms hereof. "ARTICLES OF INCORPORATION" means the Restated Articles of Incorporation, as amended, of the Company, as in effect on the date hereof. "ASSETS" has the meaning set forth in Section 3.9 of this Agreement. "AUDITED FINANCIAL STATEMENTS" has the meaning set forth in Section 3.10 of this Agreement. 2 "BOARD OF DIRECTORS" means the Board of Directors of the Company. "BUSINESS DAY" means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close. "BY-LAWS" means the By-laws of the Company as in effect on the date hereof. "CLAIMS" has the meaning set forth in Section 3.5 of this Agreement. "CLOSING" has the meaning set forth in Section 2.4 of this Agreement. "CLOSING DATE" has the meaning set forth in Section 2.4 of this Agreement. "CODE" means the Internal Revenue Code of 1986, as amended, or any successor statute thereto. "COMMISSION" means the United States Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act. "COMMON STOCK" has the meaning set forth in the recitals to this Agreement. "COMMONLY CONTROLLED ENTITY" means any entity which is under common control with the Company within the meaning of Code Section 414(b), (c), (m), (o) or (t). "COMPANY" has the meaning set forth in the preamble to this Agreement. "COMPANY PLANS" means each Plan that the Company and each of its Subsidiaries maintains or to which the Company and each of its Subsidiaries contributes. "CONDITION OF THE COMPANY" means the assets, business, properties, prospects, operations or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole. "CONTRACTUAL OBLIGATIONS" means, as to any Person, any provision of any security issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument to which such Person is a party or by which it or any of its property is bound. "COPYRIGHTS" means any foreign or United States copyright registrations and applications for registration thereof, and any non-registered copyrights. "ENVIRONMENTAL LAWS" means federal, state, local and foreign laws, principles of common laws, civil laws, regulations, and codes, as well as orders, decrees, judgments or injunctions, issued, promulgated, approved or entered thereunder relating to pollution, protection of the environment or public health and safety. 3 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "EXCESS NEW SECURITIES" has the meaning set forth in Section 8.5 of this Agreement. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. "EXEMPT ISSUANCES" has the meaning set forth in Section 8.5 of this Agreement. "FINANCIAL STATEMENTS" has the meaning set forth in Section 3.10 of this Agreement. "GAAP" means United States generally accepted accounting principles in effect from time to time. "GAP COINVESTMENT" has the meaning set forth in the preamble to this Agreement. "GAP LLC" means General Atlantic Partners, LLC, a Delaware limited liability company and the general partner of GAP LP and the managing member of GapStar, and any successor to such entity. "GAP LP" has the meaning set forth in the preamble to this Agreement. "GENERAL ATLANTIC DESIGNEE" has the meaning set forth in Section 8.4 of this Agreement. "GMBH COINVESTMENT" has the meaning set forth in the preamble to this Agreement. "GAPSTAR" has the meaning set forth in the preamble to this Agreement. "GOVERNMENTAL AUTHORITY" means the government of any nation, state, city, locality or other political subdivision thereof, any entity, including, without limitation, the Nasdaq Stock Market, Inc., exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing. "INDEMNIFIED PARTY" has the meaning set forth in Section 7.1 of this Agreement. "INDEMNIFYING PARTY" has the meaning set forth in Section 7.1 of this Agreement. 4 "INTELLECTUAL PROPERTY" has the meaning set forth in Section 3.17 of this Agreement. "INTERNET ASSETS" means any Internet domain names and other computer user identifiers and any rights in and to sites on the worldwide web, including rights in and to any text, graphics, audio and video files and html or other code incorporated in such sites. "LIABILITIES" has the meaning set forth in Section 3.16 of this Agreement. "LIEN" means any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or other) or preference, preemptive right, priority, right or other security interest or preferential arrangement of any kind or nature whatsoever (excluding preferred stock and equity related preferences). "LOSSES" has the meaning set forth in Section 7.1 of this Agreement. "MATERIAL CONTRACTUAL OBLIGATIONS" has the meaning set forth in Section 3.8 of this Agreement. "MINIMUM OWNERSHIP PERCENTAGE" has the meaning set forth in Section 8.1 of this Agreement. "NEW ISSUANCE NOTICE" has the meaning set forth in Section 8.5 of this Agreement. "NEW SECURITIES" has the meaning set forth in Section 8.5 of this Agreement. "ORDERS" has the meaning set forth in Section 3.2 of this Agreement. "PATENTS" means any foreign or United States patents and patent applications, including any divisions, continuations, continuations-in-part, substitutions or reissues thereof, whether or not patents are issued on such applications and whether or not such applications are modified, withdrawn or resubmitted. "PERMITS" has the meaning set forth in Section 3.6 of this Agreement. "PERSON" means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity. "PLAN" means any employee benefit plan, arrangement, policy, program, agreement or commitment (whether or not an employee plan within the meaning of section 3(3) of ERISA), including, without limitation, any employment, consulting or deferred compensation agreement, executive compensation, bonus, incentive, pension, profit-sharing, savings, retirement, stock option, stock purchase or severance pay plan, 5 any life, health, disability or accident insurance plan, whether oral or written, whether or not subject to ERISA, as to which the Company or any Commonly Controlled Entity has or in the future could have any direct or indirect, actual or contingent liability. "PRICE PER SHARE" means $15.93. "PROPORTIONATE PERCENTAGE" has the meaning set forth in Section 8.5 of this Agreement. "PROPOSED PRICE" has the meaning set forth in Section 8.5 of this Agreement. "PURCHASED SECURITIES" has the meaning set forth in Section 2.2 of this Agreement. "PURCHASED SHARES" has the meaning set forth in Section 2.1 of this Agreement. "PURCHASED WARRANTS" has the meaning set forth in Section 2.2 of this Agreement. "PURCHASERS" has the meaning set forth in the preamble to this Agreement. "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement substantially in the form attached hereto as EXHIBIT A. "REQUIREMENT OF LAW" means, as to any Person, any law, Environmental Law, statute, treaty, rule, regulation, right, privilege, qualification, license or franchise or determination of an arbitrator or a court or other Governmental Authority or stock exchange, in each case applicable or binding upon such Person or any of its property or to which such Person or any of its property is subject or pertaining to any or all of the transactions contemplated or referred to herein. "SEC REPORTS" has the meaning set forth in Section 3.10 of this Agreement. "SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder. "SECRETARY" has the meaning set forth in the Company's By-laws. "SOFTWARE" means any computer software programs, source code, object code, data and documentation, including, without limitation, any computer software programs that incorporate and run the Company's pricing models, formulae and algorithms. "STOCK EQUIVALENTS" means any security or obligation which is by its terms convertible into or exchangeable or exercisable for shares of Common Stock or other 6 capital stock of the Company, and any option, warrant or other subscription or purchase right with respect to common stock or such other capital stock. "STOCK OPTION PLANS" means collectively, the Company's 2001 Stock Option Plan, 2001 Stock Option Plan, Amended 2000 1/2 Stock Option Plan, 2000 Stock Option Plan, 1999 Stock Option Plan, 1997 Stock Option Plan, 1995 Stock Option Plan, 1995 Outside Directors Stock Option Plan, 1993 Stock Option Plan and ProxyMed Employee Non-Qualified Stock Option Agreement. "SUBJECT PURCHASER" has the meaning set forth in Section 8.5 of this Agreement. "SUBSIDIARIES" means, as of the relevant date of determination, with respect to any Person, a corporation or other Person of which 50% or more of the voting power of the outstanding voting equity securities or 50% or more of the outstanding economic equity interest is held, directly or indirectly, by such Person. Unless otherwise qualified, or the context otherwise requires, all references to a "SUBSIDIARY" or to "SUBSIDIARIES" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company. "TAXES" means any federal, state, provincial, county, local, foreign and other taxes (including, without limitation, income, profits, windfall profits, alternative, minimum, accumulated earnings, personal holding company, capital stock, premium, estimated, excise, sales, use, occupancy, gross receipts, franchise, ad valorem, severance, capital levy, production, transfer, withholding, employment, unemployment compensation, payroll and property taxes, import duties and other governmental charges and assessments), whether or not measured in whole or in part by net income, and including deficiencies, interest, additions to tax or interest, and penalties with respect thereto, and including expenses associated with contesting any proposed adjustments related to any of the foregoing. "TRADE SECRETS" means any trade secrets, research records, processes, procedures, manufacturing formulae, technical know-how, technology, blue prints, designs, plans, inventions (whether patentable and whether reduced to practice), invention disclosures and improvements thereto. "TRADEMARKS" means any foreign or United States trademarks, service marks, trade dress, trade names, brand names, designs and logos, corporate names, product or service identifiers, whether registered or unregistered, and all registrations and applications for registration thereof. "TRANSACTION DOCUMENTS" means, collectively, this Agreement, the Warrants and the Registration Rights Agreement. "UNAUDITED FINANCIAL STATEMENTS" has the meaning set forth in Section 3.11 of this Agreement. 7 "WARRANTS" has the meaning set forth in the recitals to this Agreement. ARTICLE II PURCHASE AND SALE OF COMMON STOCK 2.1 PURCHASE AND SALE OF COMMON STOCK. Subject to the terms and conditions herein set forth, the Company agrees to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, agrees to purchase from the Company, on the Closing Date the aggregate number of shares of Common Stock determined by dividing (x) the aggregate purchase price set forth opposite such Purchaser's name on SCHEDULE 2.1 hereto by (y) the Price Per Share (rounded up to the nearest share), for the aggregate purchase price set forth opposite such Purchaser's name on SCHEDULE 2.1 hereto (all of the shares of Common Stock being purchased pursuant to this Section 2.1 being referred to herein as the "PURCHASED SHARES"). 2.2 PURCHASE AND SALE OF WARRANTS. Subject to the terms and conditions herein set forth, the Company agrees to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, agrees to purchase from the Company, on the Closing Date a Warrant exercisable for the aggregate number of shares of Common Stock determined by multiplying (x) the number of Purchased Shares being purchased by such Purchaser pursuant to Section 2.1 by (y) .35 (rounded up to the nearest share), for the aggregate purchase price set forth opposite such Purchaser's name on SCHEDULE 2.2 hereto (all of the Warrants being purchased pursuant to Section 2.2 being referred to herein as the "PURCHASED WARRANTS"; and together with the Purchased Shares, the "PURCHASED SECURITIES"). 2.3 USE OF PROCEEDS. The Company shall use the proceeds from the sale of the Purchased Securities to fund the Company's working capital. 2.4 CLOSING. Unless this Agreement shall have been terminated pursuant to Article IX, and subject to the satisfaction or waiver of the conditions set forth in Articles V and VI, the closing of the sale and purchase of the Purchased Securities (the "Closing") shall take place at the offices of Paul, Weiss, Rifkind, Wharton & Garrison, at 10:00 a.m., local time, on April 5, 2002, or at such other time, place and date that the Company and the Purchasers may agree in writing (the "Closing Date"). On the Closing Date, the Company shall deliver to each of the Purchasers (a) a certificate or certificates in definitive form and registered in the name of each such Purchaser, representing its Purchased Shares and (b) its Warrant against delivery by each of the Purchasers to the Company of the aggregate purchase price therefor by wire transfer of immediately available funds. 8 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to each of the Purchasers on and as of the date hereof as follows: 3.1 CORPORATE EXISTENCE AND POWER. The Company and each of its Subsidiaries (a) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation; (b) has all requisite power and authority to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently, or is proposed to be, engaged; and (c) is duly qualified as a foreign corporation, licensed and in good standing under the laws of each jurisdiction in which its ownership, lease or operation of property or the conduct of its business requires such qualification, except where the failure to be so qualified could not reasonably be expected to have a material adverse effect on the Condition of the Company. The Company has the corporate power and authority to execute, deliver and perform its obligations under this Agreement and each of the other Transaction Documents. 3.2 AUTHORIZATION; NO CONTRAVENTION; FBCA SECTIONS 607.0901 AND 607.0902. The execution, delivery and performance by the Company of this Agreement and each of the other Transaction Documents and the transactions contemplated hereby and thereby (a) have been duly authorized by all necessary corporate action of the Company, including all actions, consents and approvals, if any, required by the Company's Board of Directors and/or stockholders; (b) do not contravene the terms of the Certificate of Incorporation or the By-laws or the organizational documents of any of the Subsidiaries; (c) do not violate, conflict with or result in any breach, default or contravention of (or with due notice or lapse of time or both would result in any breach, default or contravention of), or the creation of any Lien under, any Contractual Obligation of the Company or any of its Subsidiaries or any Requirement of Law applicable to the Company or any of its Subsidiaries; and (d) do not violate any judgment, injunction, writ, award, decree or order of any nature (collectively, "ORDERS") of any Governmental Authority against, or binding upon, the Company or any of its Subsidiaries. Section 607.0901 and Section 607.0902 of the Florida Business Corporation Act are not applicable to the Company or to any of the transactions contemplated by the Transaction Documents. The Board of Directors of the Company approved the Transaction Documents and the transactions contemplated hereby and thereby at a meeting of the Board of Directors duly convened on March 25, 2002. 3.3 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. No approval, consent, compliance, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or any other Person, and no lapse of a waiting period under a Requirement of Law, is necessary or required in connection with the execution, delivery or performance (including, without limitation, the sale, issuance and delivery of the Purchased Securities) by, or enforcement against, the Company of this Agreement 9 and the other Transaction Documents or the transactions contemplated hereby and thereby. 3.4 BINDING EFFECT. This Agreement and each of the other Transaction Documents have been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity relating to enforceability (regardless of whether considered in a proceeding at law or in equity). 3.5 LITIGATION. Except as set forth on SCHEDULE 3.5, there are no actions, suits, proceedings, claims (including, without limitation, claims involving the prior employment of any of the Company's or any of its Subsidiaries' employees, their use in connection with the Company's or any of its Subsidiaries' business of any information or techniques allegedly proprietary to any of their former employers or their obligations under any agreements with prior employers), complaints, disputes, arbitrations or investigations (collectively, "CLAIMS") pending or, to the knowledge of the Company, threatened, at law, in equity, in arbitration or before any Governmental Authority against the Company or any of its Subsidiaries nor is the Company or any of its Subsidiaries aware that there is any basis for any of the foregoing that could reasonably be expected to have a material adverse effect on the Condition of the Company. No Order has been issued by any court or other Governmental Authority against the Company or any of its Subsidiaries purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any of the other Transaction Documents. 3.6 COMPLIANCE WITH LAWS. (a) The Company and each of its Subsidiaries is in compliance in all material respects with all Requirements of Law and all Orders issued by any court or Governmental Authority against the Company and each of its Subsidiaries. To the knowledge of the Company, there is no Requirement of Law which could reasonably be expected to prohibit or restrict the Company or any of its Subsidiaries from, or otherwise materially adversely effect the Company or any of its Subsidiaries in, conducting its business in any jurisdiction in which it now conducts its business. (b) The Company and each of its Subsidiaries has all material licenses, permits and approvals of any Governmental Authority (collectively, "PERMITS") that are necessary for the conduct of the business of the Company and each of its Subsidiaries; (ii) such Permits are in full force and effect; and (iii) no violations are or have been recorded in respect of any Permit. 3.7 CAPITALIZATION. (a) As of the date hereof, after giving effect to the transactions contemplated by this Agreement, the authorized capital stock of the Company shall 10 consist of (i) 13,333,333 shares of Common Stock, of which 5,141,181 shares are issued and outstanding and (ii) 2,000,000 shares of preferred stock, par value $0.01 per share, 268,265 of which are designated as Series C Preferred Stock of which 3,000 are issued and outstanding and convertible into 20,000 shares of Common Stock and (iv) 1,731,735 shares of which are undesignated "blank check" preferred stock. As of the date of this Agreement, the aggregate number of options to purchase shares of Common Stock which may be issued under the Stock Option Plans is 1,062,260 of which 776,550 are outstanding. The Company has reserved a sufficient number of shares of Common Stock for issuance upon exercise of the Warrants. Except for the Warrants, the Series B Warrants exercisable for 98,493 shares of Common Stock, the Series C Warrants exercisable for 46,167 shares of Common Stock and 39,282 shares of Common Stock, there are no options (other than options granted under the Stock Option Plans), warrants, conversion privileges, subscription or purchase rights or other rights currently outstanding to purchase or otherwise acquire (i) any authorized but unissued, unauthorized or treasury shares of the Company's capital stock, (ii) any Stock Equivalents or (iii) any other securities of the Company and there are no commitments, contracts, agreements, arrangements or understandings by the Company to issue any shares of the Company's capital stock or any Stock Equivalents or other securities of the Company. No anti-dilution rights of any capital stock or other securities issued by the Company shall be triggered as a result of the transactions contemplated hereby. The Purchased Securities are duly authorized, and when issued and sold to the Purchasers after payment therefor, will be validly issued, fully paid and non-assessable, will be issued in compliance with the registration and qualification requirements of all applicable federal, state and foreign securities laws and will be free and clear of all other Liens. The shares of Common Stock issuable upon exercise of the Warrants have been duly reserved for issuance upon exercise of the Warrants and, when issued in compliance with the provisions of the Warrants, will be validly issued, fully paid and non-assessable and not subject to any preemptive rights or similar rights and will be free and clear of all other Liens. All of the issued and outstanding shares of Common Stock are duly authorized, validly issued, fully paid and non-assessable, and were issued in compliance with the registration and qualification requirements of all applicable federal, state and foreign securities laws. (b) SCHEDULE 3.7(B) sets forth, as of the Closing Date, a true and complete list of (x) each of the Subsidiaries of the Company and (y) the aggregate number of authorized and issued shares of capital stock of such Subsidiary. The Company owns all of the issued and outstanding capital stock of the Subsidiaries, free and clear of all Liens. All of such shares of capital stock are duly authorized, validly issued, fully paid and non-assessable, and were issued in compliance with the registration and qualification requirements of all applicable federal, state and foreign securities laws. There are no options, warrants, conversion privileges, subscription or purchase rights or other rights currently outstanding to purchase or otherwise acquire any authorized but unissued, unauthorized or treasury shares of capital stock or other securities of, or any proprietary interest in, any of the Subsidiaries, and there is no outstanding security of any kind convertible into or exchangeable for such shares or proprietary interest. 11 3.8 NO DEFAULT OR BREACH; CONTRACTUAL OBLIGATIONS. Except as set forth on SCHEDULE 3.8, all of the Contractual Obligations filed as exhibits or described in the SEC Reports or which are otherwise material to the Condition of the Company (collectively, the "MATERIAL CONTRACTUAL OBLIGATIONS") are valid, subsisting, in full force and effect and binding upon the Company or its Subsidiaries, as the case may be, and, to the knowledge of the Company, the other parties thereto, and the Company and each of its Subsidiaries has paid in full or accrued all amounts due thereunder and has satisfied in full or provided for all of its liabilities and obligations thereunder. Neither the Company nor any of its Subsidiaries has received notice of a default or is in default under, or with respect to, any Material Contractual Obligation nor does any condition exist that with notice or lapse of time or both would constitute a default thereunder. No other party to any such Material Contractual Obligation is in default thereunder, nor does any condition exist that with notice or lapse of time or both would constitute a default by such other party thereunder. 3.9 TITLE TO PROPERTIES AND ASSETS. Except as set forth in Schedule 3.9, the Company and each of its Subsidiaries holds interests as lessee under leases in full force and effect in, all real property used in connection with its business or otherwise owned or leased by it. The Company and each of its Subsidiaries owns and has good, valid, and marketable title to all of the material properties and assets used in its business and reflected as owned on the Financial Statements or so described in any Schedule hereto (collectively, the "ASSETS"), in each case free and clear of all Liens, except for Liens specifically described on the notes to the Financial Statements. 3.10 REPORTS; FINANCIAL STATEMENTS. (A) (a) As of the respective dates of their filing with the Commission, all reports, registration statements and other filings, together with any amendments thereto, filed by the Company with the Commission since January 1, 1999 (the "SEC REPORTS"), complied in all material respects with the applicable requirements of the Securities Act, the Exchange Act, and the rules and regulations of the Commission promulgated thereunder. The SEC Reports did not at the time they were filed with the Commission contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (b) The audited consolidated financial statements of the Company and its Subsidiaries (balance sheet and statements of operations, cash flow and stockholders' equity, together with the notes thereto) for the fiscal year ended December 31, 2000 which contains the unqualified report of PricewaterhouseCoopers LLP (the "AUDITED FINANCIAL STATEMENTS") and the unaudited consolidated financial statements of the Company and its Subsidiaries (balance sheet and statements of operations) for the fiscal quarter ended September 30, 2001 (the "UNAUDITED FINANCIAL STATEMENTS" and, together with the Audited Financial Statements, the "FINANCIAL STATEMENTS") set forth in the SEC Reports are complete and correct in all material respects and have been prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated and with each other, except that the Unaudited Financial Statements do not contain footnotes or normal year-end adjustments. The Financial Statements fairly present in all 12 material respects the financial condition, operating results and cash flows of the Company and its Subsidiaries as of the respective dates and for the respective periods indicated in accordance with GAAP, except that the Unaudited Financial Statements do not contain footnotes or normal year-end adjustments. 3.11 TAXES. Except as set forth in Schedule 3.11, (a) The Company and each of its Subsidiaries has paid all material Taxes which have come due and are required to be paid by it through the date hereof, and all deficiencies or other additions to Tax, interest and penalties owed by it in connection with any such Taxes, other than Taxes being disputed by the Company and each of its Subsidiaries in good faith for which adequate reserves have been made in accordance with GAAP; (b) the Company and each of its Subsidiaries has timely filed or caused to be filed all returns for Taxes that it is required to file on and through the date hereof (including all applicable extensions), and all such Tax returns are accurate and complete in all material respects; (c) with respect to all Tax returns of the Company and each of its Subsidiaries, (i) to the knowledge of the Company, there is no unassessed Tax deficiency proposed or, to the knowledge of the Company or any of its Subsidiaries, threatened against the Company or any of its Subsidiaries and (ii) no audit is in progress with respect to any return for Taxes, no extension of time is in force with respect to any date on which any return for Taxes was or is to be filed and no waiver or agreement is in force for the extension of time for the assessment or payment of any Tax; (d) all provisions for Tax liabilities of the Company and each of its Subsidiaries with respect to the Financial Statements have been made in accordance with GAAP consistently applied; and (e) there are no Liens for Taxes on the assets of either the Company or any of its Subsidiaries. 3.12 NO MATERIAL ADVERSE CHANGE; ORDINARY COURSE OF BUSINESS. Except as set forth in the SEC Reports filed prior to the date hereof, since December 31, 2000, (a) there has not been any material adverse change in the Condition of the Company, (b) the Company and each of its Subsidiaries has not participated in any transaction material to the Condition of the Company which is outside the ordinary course of business, (c) the Company and each of its Subsidiaries has not increased the compensation of any of its officers or the rate of pay of any of its employees, except as part of regular compensation increases in the ordinary course of business, (d) the Company and each of its Subsidiaries has not created or assumed any Lien on a material asset of the Company or any of its Subsidiaries, and (e) there has not occurred a material change in the Company's or any of its Subsidiaries' accounting principles or practice except as required by reason of a change in GAAP. 3.13 PRIVATE OFFERING. No form of general solicitation or general advertising was used by the Company or its representatives in connection with the offer or sale of the Purchased Securities. Assuming the accuracy of the representations and warranties of the Purchasers set forth in Article IV, no registration of the Purchased Securities, pursuant to the provisions of the Securities Act or any state securities or "blue sky" laws, will be required by the offer, sale or issuance of the Purchased Securities. The Company agrees that neither it, nor anyone acting on its behalf, shall offer to sell the Purchased Securities or any other securities of the Company so as to require the registration of the Purchased Securities pursuant to the provisions of the Securities Act or 13 any state securities or "blue sky" laws, unless such Purchased Securities or other securities are so registered. 3.14 LABOR RELATIONS. Except as could not reasonably be expected to have a material adverse effect on the Condition of the Company, (a) neither the Company nor any of its Subsidiaries is engaged in any unfair labor practice; (b) there is no strike, labor dispute, slowdown or stoppage pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries; and (c) neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or contract. 3.15 EMPLOYEE BENEFIT PLANS. (a) The SEC Reports disclose or describe each Company Plan that is required to be disclosed or described in such SEC Reports pursuant to the Exchange Act and the Securities Act. The Company and each of its Subsidiaries has no liability under any Plans other than the Company Plans. Except as disclosed in the SEC Reports, neither the Company, its Subsidiaries nor any Commonly Controlled Entity maintains or contributes to, or has within the preceding six years maintained or contributed to, or may have any liability with respect to any Plan subject to Title IV of ERISA or Section 412 of the Code or any "multiple employer plan" within the meaning of the Code or ERISA. Each Company Plan (and related trust, insurance contract or fund) has been established and administered in all material respects in accordance with its terms, and complies in form and in operation in all material respects with the applicable requirements of ERISA and the Code and other applicable Requirements of Law. (b) No Claim with respect to the administration or the investment of the assets of any Company Plan (other than routine claims for benefits) is pending. (c) Each Company Plan that is intended to be qualified under Section 401(a) of the Code is so qualified and has been so qualified during the period since its adoption; and each trust created under any such Plan is exempt from tax under Section 501(a) of the Code and has been so exempt since its creation. (d) The consummation of the transactions contemplated by this Agreement will not accelerate the time of the payment or vesting of, or increase the amount of, compensation due to any employee or former employee whether or not such payment would constitute an "excess parachute payment" under section 280G of the Code. (e) All material unfunded obligations under any Company Plan which are required to be reflected on the Financial Statements in accordance with GAAP have been reflected on the Financial Statements. 3.16 LIABILITIES. The Company and each of its Subsidiaries do not have any direct or indirect obligation or liability (the "LIABILITIES") other than (a) Liabilities fully and adequately reflected or reserved against on the Financial Statements and (b) Liabilities incurred since December 31, 2000 in the ordinary course of business. 14 3.17 INTELLECTUAL PROPERTY. (a) (i) Except as set forth in Schedule 3.17(a), the Company and each of its Subsidiaries is the owner of all, or has a license under all of, the material Copyrights, Patents, Trade Secrets, Trademarks, Internet Assets, Software and other proprietary rights (collectively, "INTELLECTUAL PROPERTY") that are used in connection with its business as presently conducted, free and clear of all Liens. (ii) None of the Intellectual Property owned by the Company or any of its Subsidiaries is subject to any outstanding Order, and no action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand is pending or, to the knowledge of the Company, threatened, which challenges the validity, enforceability, use or ownership of the item. (iii) The Company and each of its Subsidiaries has substantially performed all material obligations imposed upon it under any material license, material sublicenses, material distribution agreement or other material agreement relating to any Intellectual Property not owned by the Company or any of its Subsidiaries, and is not, nor to the knowledge of the Company, is any other party thereto, in material breach of any material terms or default of any material terms thereunder in any respect, nor is there any event which with notice or lapse of time or both would constitute a default thereunder. All such Intellectual Property licenses are valid, enforceable and in full force and effect, and will continue to be so on identical terms immediately following the Closing except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity relating to enforceability (regardless of whether considered in a proceeding at law or in equity). (iv) Except as set forth in Schedule 3.17(a) and except as disclosed in the SEC Reports, none of the Intellectual Property currently sold or licensed by the Company or any of its Subsidiaries to any Person, or, to the knowledge of the Company, used by or licensed to the Company or any of its Subsidiaries by any Person, infringes in any material respect upon or otherwise violates in any material respect any Intellectual Property rights of others. (v) Except as disclosed in the SEC Reports, no litigation is pending and no Claim has been made against the Company or any of its Subsidiaries or, to the knowledge of the Company, is threatened, contesting the right of the Company or any of its Subsidiaries to sell or license to any Person or use the Intellectual Property presently sold or licensed to such Person or used by the Company or any of its Subsidiaries. (b) Except as disclosed in the SEC Reports, to the knowledge of the Company, no Person is infringing upon or otherwise violating the Intellectual Property rights of the Company or any of its Subsidiaries. 15 (c) No former employer of any employee of the Company or any of its Subsidiaries, and no client of any consultant of the Company or any of its Subsidiaries, has made a claim against the Company or any of its Subsidiaries or, to the knowledge of the Company, against any other Person, that such employee or such consultant is utilizing Intellectual Property of such former employer or client. (d) To the knowledge of the Company, no employee of the Company or any of its Subsidiaries is in violation of any employment agreement, patent or invention disclosure agreement or other contract or agreement setting forth the terms of employment of such employee with the Company or any of its Subsidiaries or any prior employer. (e) To the knowledge of the Company, none of the material Trade Secrets of the Company, wherever located, the value of which is contingent upon maintenance of confidentiality thereof, has been disclosed to any Person other than employees, representatives and agents of the Company or any of its Subsidiaries or to other Persons who have executed appropriate nondisclosure agreements, except as required pursuant to the filing of a patent application by the Company or any of its Subsidiaries. (f) All present key employees of the Company and each of its Subsidiaries have executed and delivered invention agreements with the Company and each of its Subsidiaries, and are obligated under the terms thereof to assign all inventions made by them during the course of employment to the Company and each of its Subsidiaries. No such employee or present consultant of the Company or any of its Subsidiaries has excluded works or inventions used by the Company but made prior to his employment with, or work for, the Company or any of its Subsidiaries from his assignment of inventions pursuant to such proprietary invention agreements. 3.18 NETWORK REDUNDANCY AND COMPUTER BACK-UP. Except as could not reasonably be expected to have a material adverse effect on the Condition of the Company, the Company and each of its Subsidiaries has made back-ups of all material computer Software and databases utilized by it and maintain such Software and databases at a secure off-site location. 3.19 PRIVACY OF CUSTOMER INFORMATION. Neither the Company nor any of its Subsidiaries uses any of the customer information it receives through its website or otherwise in a manner violative in any material respect of the Company's or any of its Subsidiaries' privacy policy or the privacy rights of its customers under applicable law. 3.20 POTENTIAL CONFLICTS OF INTEREST. Except as disclosed in the SEC Reports, to the knowledge of the Company, no officer or director of the Company, no stockholder beneficially owning in excess of five percent of the outstanding Common Stock, and no spouse of any such officer or director (a) owns, directly or indirectly, any interest in (excepting less than one percent (1%) stock holdings for investment purposes in securities of publicly held and traded companies), or is an officer, director, employee or consultant of, any Person which is, or is engaged in business as, a competitor, lessor, 16 lessee, supplier, distributor, sales agent or customer of, or lender to or borrower from, the Company or any of its Subsidiaries; or (b) owns, directly or indirectly, in whole or in part, any tangible or intangible property material to the conduct of the business of the Company or its Subsidiaries. 3.21 TRADE RELATIONS. Except as set forth in Schedule 3.21, there exists no actual or, to the knowledge of the Company or any of its Subsidiaries, threatened termination, cancellation or limitation of, or any adverse change in, the business relationship of the Company or any of its Subsidiaries with any customer or supplier or any group of customers or suppliers whose purchases or inventories provided to the Company's and each of its Subsidiaries' business are individually or in the aggregate material to the Condition of the Company. 3.22 BROKER'S, FINDER'S OR SIMILAR FEES. There are no brokerage commissions, finder's fees or similar fees or commissions payable by the Company or any of its Subsidiaries in connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with the Company or any of its Subsidiaries or any action taken by any such Person. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS Each of the Purchasers hereby represents and warrants, severally and not jointly, to the Company as follows: 4.1 EXISTENCE AND POWER. Such Purchaser (a) is a limited partnership or limited liability company, as the case may be, duly organized and validly existing under the laws of the jurisdiction of its formation and (b) has the requisite partnership or limited liability company, as the case may be, power and authority to execute, deliver and perform its obligations under this Agreement and each of the other Transaction Documents. 4.2 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and performance by such Purchaser of this Agreement and each of the other Transaction Documents and the transactions contemplated hereby and thereby, (a) have been duly authorized by all necessary partnership or limited liability company, as the case may be, action, (b) do not contravene the terms of such Purchaser's organizational documents, or any amendment thereof, and (c) do not violate, conflict with or result in any breach or contravention of, or the creation of any Lien under, any Contractual Obligation of such Purchaser or any Requirement of Law applicable to such Purchaser (except for the Lien created on the Purchased Shares purchased by GapStar to secure its obligations under a bona fide loan made to acquire such Purchased Shares), and (d) do not violate any Orders of any Governmental Authority against, or binding upon, such Purchaser. 4.3 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. No approval, consent, compliance, exemption, authorization or other action by, or notice to, or filing 17 with, any Governmental Authority or any other Person, and no lapse of a waiting period under any Requirement of Law, is necessary or required in connection with the execution, delivery or performance (including, without limitation, the purchase of the Purchased Shares) by, or enforcement against, such Purchaser of this Agreement and each of the other Transaction Documents to which it is a party or the transactions contemplated hereby and thereby. 4.4 BINDING EFFECT. This Agreement and each of the other Transaction Documents have been duly executed and delivered by such Purchaser and constitutes the legal, valid and binding obligations of such Purchaser, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability (regardless of whether considered in a proceeding at law or in equity). 4.5 PURCHASE FOR OWN ACCOUNT. The Purchased Securities to be acquired by such Purchaser pursuant to this Agreement are being acquired for its own account for investment only, and not with a view to, or for sale in connection with, any distribution of such Purchased Shares or any part thereof in any transaction that would be in violation of the securities laws of the United States of America, any state of the United States or any foreign jurisdiction. Such Purchaser understands and agrees that such Purchased Securities have not been registered under the Securities Act and are "restricted securities" within the meaning of Rule 144 under the Securities Act; and that the Purchased Securities cannot be sold, transferred or otherwise disposed of except in compliance with the Securities Act and applicable state and foreign securities laws, as then in effect. Such Purchaser agrees to the imprinting of a legend on certificates representing all of its Purchased Securities to the following effect: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY FOREIGN JURISDICTION. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED. 4.6 RESTRICTED SECURITIES. Such Purchaser understands that the Purchased Securities will not be registered at the time of their issuance under the Securities Act for the reason that the sale provided for in this Agreement is exempt pursuant to Section 4(2) of the Securities Act and that the reliance of the Company on such exemption is predicated in part on such Purchaser's representations set forth herein. 4.7 BROKER'S, FINDER'S OR SIMILAR FEES. There are no brokerage commissions, finder's fees or similar fees or commissions payable by such Purchaser in 18 connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with such Purchaser or any action taken by such Purchaser. 4.8 ACCREDITED INVESTOR. Such Purchaser is an "Accredited Investor" within the meaning of Rule 501 of Regulation D under the Securities Act, as presently in effect. ARTICLE V CONDITIONS TO THE OBLIGATION OF THE PURCHASERS TO CLOSE The obligation of the Purchasers to purchase the Purchased Securities, to pay the purchase price therefor at the Closing and to perform any obligations hereunder shall be subject to the satisfaction as determined by, or waiver by, the Purchasers of the following conditions on or before the Closing Date. 5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company contained in Article III hereof shall be true and correct in all material respects (except for any such representations and warranties which are qualified by their terms by a reference to materiality or material adverse effect, which representation as so qualified shall be true and correct in all respects) at and on the Closing Date as if made at and on such date. 5.2 COMPLIANCE WITH THIS AGREEMENT. The Company shall have performed and complied in all material respects with all of its agreements set forth herein that are required to be performed by the Company on or before the Closing Date. 5.3 OFFICER'S CERTIFICATE. The Purchasers shall have received a certificate from the Company, in form and substance satisfactory to the Purchaser, dated the Closing Date, and signed by the Chief Executive Officer and Chief Financial Officer of the Company, certifying as to the matters set forth in Section 5.1 and 5.2. 5.4 SECRETARY'S CERTIFICATE. The Purchasers shall have received a certificate from the Company, in form and substance satisfactory to the Purchasers, dated the Closing Date and signed by the Secretary of the Company, certifying (a) that the Company is in good standing with the Secretary of State of the State of Florida, (b) that the attached copies of the Articles of Incorporation, the By-laws, resolutions of the Board of Directors approving this Agreement and each of the other Transaction Documents and the transactions contemplated hereby and thereby, are all true, complete and correct and remain unamended and in full force and effect and (c) as to the incumbency and specimen signature of each officer of the Company executing this Agreement, each other Transaction Document and any other document delivered in connection herewith on behalf of the Company. 19 5.5 PURCHASED SECURITIES. The Company shall have delivered to each of the Purchasers (i) certificates in definitive form representing the number of Purchased Shares set forth opposite such Purchaser's name on SCHEDULE 2.1 hereto, registered in the name of such Purchaser and (ii) a Warrant, duly executed by the Company, exercisable for the aggregate number of shares of Common Stock set forth opposite such Purchaser's name on SCHEDULE 2.2 hereto. 5.6 REGISTRATION RIGHTS AGREEMENT. The Company shall have duly executed and delivered the Registration Rights Agreement. 5.7 OPINION OF COUNSEL. The Purchasers shall have received an opinion of Holland & Knight LLP, dated the Closing Date, relating to the transactions contemplated by or referred to herein, substantially in the form attached hereto as EXHIBIT C. 5.8 BOARD OF DIRECTORS. The Board of Directors shall have filled the existing vacancy on the Board of Directors with an individual designated by the Purchasers and shall have used its best efforts to cause another vacancy to be created on the Board of Directors, which shall be filled with the second GAP Designee, as contemplated by Section 8.4. 5.9 NASD. The Purchased Shares and shares of Common Stock issuable upon exercise of the Warrants shall have been approved for quotation on the Nasdaq Stock Market, Inc. ARTICLE VI CONDITIONS TO THE OBLIGATION OF THE COMPANY AND THE SELLING STOCKHOLDERS TO CLOSE The obligation of the Company to issue and sell the Purchased Securities and the obligations of the Company to perform its other obligations hereunder shall be subject to the satisfaction as determined by, or waiver by, the Company of the following conditions on or before the Closing Date: 6.1 PAYMENT OF PURCHASE PRICE. Each Purchaser shall be prepared to pay, by wire transfer, the aggregate purchase price for the Purchased Securities to be purchased by such Purchaser. 6.2 REGISTRATION RIGHTS AGREEMENT. Each Purchaser shall have duly executed and delivered the Registration Rights Agreement. 6.3 REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Purchasers contained in Article IV hereof shall be true and correct in all material respects (except for any such representations and warranties which are qualified by their terms by a reference to materiality or material adverse effect, which 20 representation as so qualified shall be true and correct in all respects) at and on the Closing Date as if made at and on such date. ARTICLE VII INDEMNIFICATION 7.1 INDEMNIFICATION. Subject to the limitations set forth in Section 7.4, the Company (the "INDEMNIFYING PARTY") agrees to indemnify, defend and hold harmless each of the Purchasers and its Affiliates and their respective officers, managers, directors, agents, employees, subsidiaries, partners, members and controlling persons (each, an "INDEMNIFIED PARTY") to the fullest extent permitted by law from and against any and all losses, Claims, or written threats thereof (including, without limitation, any Claim by a third party), damages, expenses (including reasonable fees, disbursements and other charges of counsel incurred by the Indemnified Party in any action between the Company Indemnifying Party and the Indemnified Party or between the Indemnified Party and any third party (other than a third party who is an Affiliate of such Indemnified Party) or otherwise in the manner described in Section 7.2 below) or other liabilities (collectively, "Losses") resulting from or arising out of any breach of any representation or warranty, covenant or agreement by the Company in this Agreement. In connection with the obligation of the Indemnifying Party to indemnify for expenses as set forth above, the Indemnifying Party shall, upon presentation of appropriate invoices containing reasonable detail, reimburse each Indemnified Party for all such expenses (including reasonable fees, disbursements and other charges of counsel incurred by the Indemnified Party in any action between the Indemnifying Party and the Indemnified Party or between the Indemnified Party and any third party (other than a third party who is an Affiliate of such Indemnified Party) as they are incurred by such Indemnified Party; PROVIDED, HOWEVER, that if an Indemnified Party is reimbursed under this Article VII for any expenses, such reimbursement of expenses shall be refunded to the extent it is finally judicially determined that such expenses resulted solely from the gross negligence or willful misconduct of such Indemnified Party. 7.2 NOTIFICATION. Each Indemnified Party under this Article VII shall, promptly after the receipt of notice of the commencement of any Claim against such Indemnified Party in respect of which indemnity may be sought from the Indemnifying Party under this Article VII, notify the Indemnifying Party in writing of the commencement thereof. The omission of any Indemnified Party to so notify the Indemnifying Party of any such action shall not relieve the Indemnifying Parties from any liability which it may have to such Indemnified Party (a) other than pursuant to this Article VII or (b) under this Article VII unless, and only to the extent that, such omission results in such Indemnifying Party's forfeiture of substantive rights or defenses. In case any such Claim shall be brought against any Indemnified Party, and it shall notify the Indemnifying Party of the commencement thereof, the Indemnifying Party shall be entitled to assume the defense thereof at their own expense, with counsel satisfactory to such Indemnified Party in its reasonable judgment; provided that any Indemnified Party may, at its own expense, retain separate counsel to participate in such defense at its own expense. Notwithstanding the foregoing, in any Claim in which both the Indemnifying 21 Party, on the one hand, and an Indemnified Party, on the other hand, are, or are reasonably likely to become, a party, such Indemnified Party shall have the right to employ separate counsel and to control its own defense of such Claim if, in the reasonable opinion of counsel to such Indemnified Party, either (x) one or more defenses are available to the Indemnified Party that are not available to the Indemnifying Parties or (y) a conflict or potential conflict exists between the Indemnifying Party, on the one hand, and such Indemnified Party, on the other hand, that would make such separate representation advisable; PROVIDED, HOWEVER, that the Indemnifying Party (i) shall not be liable for the fees and expenses of more than one counsel to all Indemnified Parties and (ii) shall reimburse the Indemnified Parties for all of such fees and expenses of such counsel, as such fees and expenses are incurred. The Indemnifying Party agrees that it will not, without the prior written consent of the Purchasers, settle, compromise or consent to the entry of any judgment in any pending or threatened Claim relating to the matters contemplated hereby (if any Indemnified Party is a party thereto or has been actually threatened to be made a party thereto) unless such settlement, compromise or consent includes an unconditional release of each Indemnified Party from all liability arising or that may arise out of such Claim. The Indemnifying Party shall not be liable for any settlement of any Claim effected against an Indemnified Party without its written consent, which consent shall not be unreasonably withheld. The rights accorded to an Indemnified Party hereunder shall be in addition to any rights that any Indemnified Party may have at common law, by separate agreement or otherwise; PROVIDED, HOWEVER, that notwithstanding the foregoing or anything to the contrary contained in this Agreement, nothing in this Article VII shall restrict or limit any rights that any Indemnified Party may have to seek equitable relief. 7.3 CONTRIBUTION. If the indemnification provided for in this Article VII from an Indemnifying Party is unavailable to an Indemnified Party hereunder in respect of any Losses for which such Indemnified Party would otherwise be required to indemnify the Indemnified Party under this Article VII, then such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of such Indemnifying Party and Indemnified Party in connection with the actions which resulted in such Losses, as well as any other relevant equitable considerations. The relative faults of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Losses referred to above shall be deemed to include any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. 7.4 CAP ON INDEMNIFICATION. The amount of any payment by the Indemnifying Party to the Indemnified Parties under this Article VII in respect of Losses resulting from or arising out of any indemnification claim made pursuant to Section 7.1 22 shall in no event exceed the aggregate purchase price paid to the Company in consideration of the Purchased Securities. ARTICLE VIII AFFIRMATIVE COVENANTS OF THE COMPANY The Company hereby covenants and agrees with the Purchasers as follows: 8.1 FINANCIAL STATEMENTS AND OTHER INFORMATION. If at any time, the Company is not subject to Section 13 or 15(d) of the Exchange Act, and for so long as the Purchasers or Affiliates thereof beneficially own in the aggregate not less than 5% of the shares of Common Stock outstanding as of any date (assuming the exercise of all of the Warrants) (such lesser amount, the "MINIMUM OWNERSHIP PERCENTAGE"), the Company shall deliver to such Purchaser, in form and substance satisfactory to such Purchaser: (a) as soon as available, but not later than ninety (90) days after the end of each fiscal year of the Company, a copy of the audited consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year and the related statements of operations and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous year, all in reasonable detail and accompanied by a management summary and analysis of the operations of the Company for such fiscal year and by the opinion of a nationally recognized independent certified public accounting firm which report shall state without qualification that such financial statements present fairly the financial condition as of such date and results of operations and cash flows for the periods indicated in conformity with GAAP applied on a consistent basis; (b) as soon as available, but in any event not later than forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year, the unaudited consolidated balance sheet of the Company and its Subsidiaries, and the related statements of operations and cash flows for such quarter and for the period commencing on the first day of the fiscal year and ending on the last day of such quarter, all certified by an appropriate officer of the Company as presenting fairly the consolidated financial condition as of such date and results of operations and cash flows for the periods indicated in conformity with GAAP applied on a consistent basis, subject to normal year-end adjustments and the absence of footnotes required by GAAP; and (c) such other information of the type that would satisfy Rule 144A(d)(4)(i). 8.2 BOOKS AND RECORDS. The Company shall keep proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Company and its Subsidiaries in accordance with GAAP consistently applied. 23 8.3 INSPECTION. As long as the Purchasers or Affiliates thereof hold in the aggregate not less than the Minimum Ownership Percentage, the Company shall permit representatives of such Purchasers to visit and inspect any of its properties and make copies of the Company's corporate and financial records, and to discuss its affairs, finances and accounts with its directors and officers, all at such reasonable times during normal business hours and as often as may be reasonably requested upon reasonable advance notice to the Company. 8.4 BOARD REPRESENTATION. (a) The Board of Directors of the Company shall be comprised of seven members. The Company shall fill the existing vacancy on its Board of Directors with one person designated by GAP LP, which designee shall initially be Braden R. Kelly, and shall cause another director to resign and cause the resulting vacancy on the Board of Directors to be filled by one person designated by GAP LP (collectively, the "GAP DESIGNEES"). The General Atlantic Designees shall serve in accordance with the Articles of Incorporation and the Bylaws until the next succeeding annual meeting of stockholders of the Company to be held after such election for the purpose of electing directors of the class of which the General Atlantic Designees are members. (b) As long as the Purchasers or Affiliates thereof continue to beneficially own in the aggregate not less than the Minimum Ownership Percentage, commencing with the next succeeding annual meeting of the stockholders of the Company at which directors of the class of which the General Atlantic Designees are members are elected, and at each annual meeting of the stockholders of the Company thereafter held for the purpose of electing directors of such class, GAP LP shall be entitled to designate to the Board of Directors the General Atlantic Designees to serve as two of the directors of the Company. The Company shall cause such General Atlantic Designees to be included in the slate of nominees recommended by the Board of Directors to the Company's stockholders for election as directors, and the Company shall use its reasonable best efforts to cause the election of such General Atlantic Designees, including using its reasonably best efforts to cause officers of the Company who hold proxies (unless otherwise directed by the stockholder submitting such proxy) to vote such proxies in favor of the election of such General Atlantic Designees, unless the Board of Directors determines in good faith, with the written advice of outside counsel, that it would be inconsistent with their fiduciary duties to take such actions. As long as the Purchasers or Affiliates thereof continue to beneficially own in the aggregate not less than the Minimum Ownership Percentage, in the event that the General Atlantic Designees shall cease to serve as directors for any reason, the Company shall use its reasonable best efforts to cause any vacancy resulting thereby to be filled by another designee of GAP LP. (c) Notwithstanding anything to the contrary contained in this Agreement, the Company shall provide such reimbursement and compensation to the General Atlantic Designees as is consistent with the reimbursement and compensation provided to other members of the Board of Directors. 24 (d) Subject to applicable securities laws and Nasdaq regulations, each committee of the Board of Directors shall include the General Atlantic Designees. (e) As long as the Purchasers or Affiliates thereof continue to beneficially own in the aggregate not less than the Minimum Ownership Percentage, GAP LP shall have the right to designate one observer who shall have the right to attend all regular, special and telephonic meetings of the Board of Directors, except to the extent that such attendance would negate any attorney-client privilege. 8.5 OFFERING NOTICE; PREEMPTIVE RIGHTS; EXERCISE; CLOSING. (a) Except for (i) Common Stock or options to acquire Common Stock issued pursuant to the Stock Option Plans or issued to employees, directors or officers of, or consultants to, the Company or any of its Subsidiaries pursuant to any compensatory plan, agreement or arrangement approved by the Board of Directors and by a majority of the members of the Board of Directors who are not employees of the Company or a Subsidiary of the Company, (ii) a subdivision of the outstanding shares of Common Stock into a larger or smaller number of shares of Common Stock, (iii) capital stock issued upon exercise, conversion or exchange of any Stock Equivalent (including the Warrants) previously issued, and (iv) capital stock or securities convertible into capital stock of the Company issued in consideration of an acquisition of any Person, approved by the Board of Directors, by the Company of another Person ((i)-(iv) being referred to collectively as "EXEMPT ISSUANCES"), if the Company wishes to issue any capital stock or any other securities convertible into or exchangeable for capital stock of the Company pursuant to a private placement exempt from registration under the Securities Act (collectively, "NEW SECURITIES") to any Person (the "SUBJECT PURCHASER"), then the Company shall offer such New Securities first to the Purchasers by sending written notice (the "NEW ISSUANCE NOTICE") to the Purchasers, which New Issuance Notice shall state (x) the number of New Securities proposed to be issued and (y) the proposed purchase price, or mechanism for determining the proposed purchase price, per security of the New Securities (as calculated, the "PROPOSED PRICE"). Upon delivery of the New Issuance Notice, such offer shall be irrevocable unless and until the rights provided for in Section 8.5(b) shall have been waived or shall have expired. (b) For a period of five (5) Business Days after the giving of a New Issuance Notice, each of the Purchasers shall have the right to purchase up to its Proportionate Percentage (as hereinafter defined) of the New Securities at a purchase price equal to the Proposed Price and upon the same terms and conditions set forth in the New Issuance Notice. Each Purchaser shall have the right to purchase up to that percentage of the New Securities determined by dividing (x) the total number of shares of Common Stock (assuming the exercise of all of the Purchased Warrants) beneficially owned by such Purchaser exercising its rights under this Section 8.5 by (y) the total number of shares of Common Stock then outstanding (assuming the exercise of all of the Purchased Warrants) (the "Proportionate Percentage"). If any Purchaser does not fully subscribe for the number or amount of New Securities that it or he is entitled to purchase pursuant to the preceding sentence, then each Purchaser which elected to purchase New 25 Securities shall have the right to purchase that percentage of the remaining New Securities not so subscribed for (for the purposes of this Section 8.5, the "Excess New Securities") determined by dividing (x) the total number of shares of Common Stock (assuming the exercise of all of the Purchased Warrants) then beneficially owned by such participating Purchaser by (y) the total number of shares of Common Stock (assuming the exercise of all of the Purchased Warrants) then beneficially owned by all participating Purchasers who elected to purchase Excess New Securities. The Purchasers may transfer all or any portion of their rights pursuant to this Section 8.5 to any Affiliate thereof. (c) The right of the Purchasers to purchase the New Securities under subsection (b) above shall be exercisable by delivering written notice of the exercise thereof, prior to the expiration of the 5 Business Day period referred to in subsection (b) above, to the Company, which notice shall state the amount of New Securities that such Purchaser elects to purchase pursuant to Section 8.5(b). The failure of the Purchasers to respond within such 5 Business Day period shall be deemed to be a waiver of the Purchasers' rights under Section 8.5(b), provided that the Purchasers may waive their rights under Section 8.5(b) prior to the expiration of such 5 Business Day period by giving written notice to the Company. In the event that the aggregate number of New Securities elected to be purchased by the Purchasers exceeds the total number of New Securities, each Purchaser who has elected to purchase New Securities shall be entitled to purchase only that portion of the New Securities as the number of New Securities elected to be purchased by such Purchaser bears to the total number of New Securities elected to be purchased by all Purchasers, subject to rounding by the Board of Directors to the extent it deems reasonably necessary. (d) The closing of the purchase of New Securities subscribed for by the Purchasers under this Section 8.5 shall be held at the executive office of the Company at 11:00 a.m., local time, on (a) the 15th day after the giving of the New Issuance Notice pursuant to Section 8.5(a), if the Purchasers elect to purchase all of the New Securities under this Section 8.5, (b) the date of the closing of the sale to the Subject Purchaser or Subject Purchasers if the Purchasers elect to purchase some, but not all, of the New Securities under this Section 8.5 or (c) at such other time and place as the parties to the transaction may agree. At such closing, such New Securities shall be issued free and clear of all Liens (other than those arising hereunder and those attributable to actions by the purchasers thereof) and the Company shall so represent and warrant, and further represent and warrant that such New Securities shall be, upon issuance thereof to the Purchasers and after payment therefor, duly authorized, validly issued, fully paid and non-assessable. The Company shall deliver certificates representing the New Securities no later than five (5) Business Days after such closing. The Purchasers shall deliver at the closing payment in full in immediately available funds for the New Securities purchased by them. At such closing, all of the parties to the transaction shall execute such additional documents as are otherwise necessary or appropriate. Nothing in this Section 8.5 shall prevent or delay the Company from consummating the closing of the issuance and sale of the New Securities to any Subject Purchaser; provided that the Company complies with its obligations under this Section 8.5. 26 ARTICLE IX TERMINATION OF AGREEMENT 9.1 TERMINATION. This Agreement may be terminated by written notice prior to the Closing as follows: (a) at any time on or prior to the Closing Date, by mutual written consent of the Company and the Purchasers; (b) at the election of the Company or the Purchasers by written notice to the other parties hereto after 5:00 p.m., New York time, on April 25, 2002, if the Closing shall not have occurred, unless such date is extended by the mutual written consent of the Company and the Purchasers; PROVIDED, HOWEVER, that the right to terminate this Agreement under this Section 9.1(b) shall not be available to any party whose breach of any representation, warranty, covenant or agreement under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before such date; (c) at the election of the Purchasers, if there has been a material breach of any representation, warranty, covenant or agreement on the part of the Company contained in this Agreement, which breach has not been cured within fifteen (15) days of written notice to the Company of such breach. (d) at the election of the Company, if there has been a material breach of any representation, warranty, covenant or agreement on the part of any of the Purchasers contained in this Agreement, which breach has not been cured within fifteen (15) days of written notice to the Purchasers of such breach. If this Agreement so terminates, it shall become null and void and have no further force or effect, except as provided in Section 9.2. 9.2 SURVIVAL. If this Agreement is terminated and the transactions contemplated hereby are not consummated as described above, this Agreement shall become void and of no further force and effect, except for the provisions of Article 1 and this Section 9.2; PROVIDED, HOWEVER, that (a) none of the parties hereto shall have any liability in respect of a termination of this Agreement pursuant to Section 9.1(a) or Section 9.1(b) and (b) nothing shall relieve the Company from liability for actual damages resulting from a termination of this Agreement pursuant to Section 9.1(c) and nothing shall relieve the Purchasers from liability for actual damages resulting from a termination of this Agreement pursuant to Section 9.1(d); and PROVIDED, FURTHER, that none of the parties hereto shall have any liability for speculative, indirect, unforeseeable or consequential damages or lost profits resulting from any legal action relating to any termination of this Agreement. 27 ARTICLE X MISCELLANEOUS 10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the representations and warranties made herein shall survive the execution and delivery of this Agreement until the date that is ninety (90) days after the receipt by the Purchasers of audited consolidated financial statements of the Company and its Subsidiaries for the fiscal year ending December 31, 2002 (or, if such fiscal year changes and no such audited consolidated financial statements are available, then the successor fiscal year), except for (a) Sections 3.1, 3.2, 3.4, 3.7, 3.13 and 3.22, which representations and warranties shall survive indefinitely and (b) Section 3.11, which shall survive until the later to occur of (i) the lapse of the statute of limitations with respect to the assessment of any Tax to which such representation and warranty relates (including any extensions or waivers thereof) and (ii) sixty (60) days after the final administrative or judicial determination of the Taxes to which such representation and warranty relates, and no claim with respect to Section 3.11 may be asserted thereafter with the exception of claims arising out of any fact, circumstance, action or proceeding to which the party asserting such claim shall have given notice to the other parties to this Agreement prior to the termination of such period of reasonable belief that a tax liability will subsequently arise therefrom. 10.2 NOTICES. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier, courier service or personal delivery: 28 if to the Company: ProxyMed, Inc. 2555 Davie Rd., Suite 110 Fort Lauderdale, FL 33317 Telecopy: (954) 473-2341 Attention: Michael K. Hoover, Chief Executive Officer Rafael G. Rodriguez, In-House Counsel with a copy to: Holland & Knight LLP 701 Brickell Avenue, Suite 3000 Miami, FL 33131 Telecopy: (305) 789-7799 Attention: Steven Sonberg, Esq. if to GAP LP, GAP Coinvestment or GapStar: c/o General Atlantic Service Corporation 3 Pickwick Plaza Greenwich, CT 06830 Telecopy: (203) 622-8818 Attention: Matthew Nimetz Thomas J. Murphy with a copy to: Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, NY 10019-6064 Telecopy: (212) 757-3990 Attention: Douglas A. Cifu, Esq. if to GmbH Coinvestment: c/o General Atlantic Partners GmbH Koenigsalle 88 40212 Duesseldorf Germany Telecopy: 011-49-211-602-888-89 Attention: Matthew Nimetz Thomas J. Murphy 29 with a copy to: General Atlantic Service Corporation 3 Pickwick Plaza Greenwich, CT 06830 Telecopy: (203) 622-8818 Attention: Matthew Nimetz Thomas J. Murphy and Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, NY 10019-6064 Telecopy: (212) 757-3990 Attention: Douglas A. Cifu, Esq. All such notices, demands and other communications shall be deemed to have been duly given (i) when delivered by hand, if personally delivered; (ii) one Business Day after being sent, if sent via a reputable nationwide overnight courier service guaranteeing next business day delivery; (iii) five (5) Business Days after being sent, if sent by registered or certified mail, return receipt requested, postage prepaid; and (iv) when receipt is mechanically acknowledged, if telecopied. Any party may by notice given in accordance with this Section 10.2 designate another address or Person for receipt of notices hereunder. Any party may give any notice, request, consent or other communication under this Agreement using any other means (including, without limitation, personal delivery, messenger service, first class mail or electronic mail), but no such notice, request, consent or other communication shall be deemed to have been duly given unless and until it is actually received by the party to whom it is given. 10.3 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto. Subject to applicable securities laws and the terms and conditions thereof, the Purchasers may assign any of their rights under this Agreement or the other Transaction Documents to any of their respective Affiliates. The Company may not assign any of its rights under this Agreement without the written consent of the Purchasers. Except as provided in Article VII, no Person other than the parties hereto and their successors and permitted assigns is intended to be a beneficiary of this Agreement. 10.4 AMENDMENT AND WAIVER. (a) No failure or delay on the part of the Company or the Purchasers in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. 30 (b) Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to any departure by the Company or the Purchasers from the terms of any provision of this Agreement, shall be effective (i) only if it is made or given in writing and signed by the Company and the Purchasers purchasing a majority of the Purchased Shares, and (ii) only in the specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar or other circumstances. 10.5 COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 10.6 HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 10.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. 10.8 SEVERABILITY. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof. 10.9 RULES OF CONSTRUCTION. Unless the context otherwise requires, references to sections or subsections refer to sections or subsections of this Agreement. 10.10 ENTIRE AGREEMENT. This Agreement, together with the exhibits and schedules hereto, and the other Transaction Documents are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, representations, warranties or undertakings, other than those set forth or referred to herein or therein. This Agreement, together with the exhibits and schedules hereto, and the other Transaction Documents supersede all prior agreements and understandings between the parties with respect to such subject matter. 10.11 FEES. Upon the Closing, the Company shall reimburse each of the Purchasers for their fees, disbursements and other charges of counsel incurred in connection with the transactions contemplated by this Agreement, provided that the amount of such reimbursement shall not exceed in the aggregate $75,000. 31 10.12 PUBLIC ANNOUNCEMENTS. Following the date hereof, the Company shall be permitted to issue a press release relating to the Transaction Documents and the transactions contemplated thereby. The Purchasers shall have the opportunity to review and comment on such press release prior to its issuance, which review and comment shall be provided as expeditiously as possible and in any event within 48 hours of delivery of such press release by the Company to the Purchasers, and such press release shall be in form and substance reasonably satisfactory to the Purchasers. Except as set forth in the previous sentence, neither the Company nor the Purchasers will issue any press release or make any public statements with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the other parties hereto, except to the extent such party reasonably believes such press release or public statement is required by applicable law or stock market regulations; PROVIDED, HOWEVER, that the Company and the Purchasers may make reasonable public statements consistent with prior public statements otherwise permitted under this Section 10.12; and PROVIDED FURTHER, that GAP LLC may disclose on its worldwide web page, WWW.GAPARTNERS.COM, the name of the Company, the name of the Chief Executive Officer of the Company, a brief description of the business of the Company, the Company's logo and the aggregate amount of the Purchasers' investment in the Company. Notwithstanding the foregoing, the Company will not use or refer to the name of any Purchaser in any public statement or disclosure without the consent of such Purchaser except to the extent that such party reasonably believes such statement or disclosure is required by applicable law or stock market regulations. 10.13 FURTHER ASSURANCES. Each of the parties shall execute such documents and perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations or other actions by, or giving any notices to, or making any filings with, any Governmental Authority or any other Person) as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement. [Remainder of page intentionally left blank] 32 IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this Stock Purchase Agreement on the date first written above. PROXYMED, INC. By: /s/ Michael K. Hoover ------------------------------------- Name: Michael K. Hoover Title: Chief Executive Officer GENERAL ATLANTIC PARTNERS 74, L.P. By: GENERAL ATLANTIC PARTNERS, LLC, its General Partner By: /s/ Matthew Nimetz ------------------------------------- Name: Matthew Nimetz Title: A Managing Member GAP COINVESTMENT PARTNERS II, L.P. By: /s/ Matthew Nimetz ------------------------------------- Name: Matthew Nimetz Title: A General Partner GAPSTAR, LLC By: GENERAL ATLANTIC PARTNERS, LLC, its Managing Member By: /s/ Matthew Nimetz ------------------------------------- Name: Matthew Nimetz Title: A Managing Member GAPCO GMBH & CO. KG By: GAPCO Management GMBH, its General Partner By: /s/ Matthew Nimetz ------------------------------------- Name: Matthew Nimetz Title: A Managing Director EX-10.2 4 g75168ex10-2.txt FORM OF COMMON STOCK PURCHASE WARRANTS EXHIBIT 10.2 THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR FOREIGN JURISDICTION. NEITHER THIS WARRANT, SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE AND FOREIGN SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. --------------------------------------------- PROXYMED, INC. COMMON STOCK PURCHASE WARRANT --------------------------------------------- This certifies that, for good and valuable consideration, ProxyMed, Inc., a Florida corporation (the "Company"), grants to [____________] (the "Warrantholder"), the right to subscribe for and purchase from the Company, during the Exercise Period (as hereinafter defined), [______] validly issued, fully paid and nonassessable shares, par value $0.001, of Common Stock of the Company (the "Warrant Shares"), at the exercise price per share of $[_____]1, subject to adjustment pursuant to Section 5 hereof (the "Exercise Price"), all subject to the terms, conditions and adjustments herein set forth. Capitalized terms used herein shall have the meanings ascribed to such terms in Section 9 below. 1. WARRANT. This Warrant is issued pursuant to, and in accordance with, Section 2.2 of the Stock and Warrant Purchase Agreement, dated as of March 26, 2002 and is subject to the terms thereof. 2. EXERCISE OF WARRANT; PAYMENT OF TAXES. 2.1 EXERCISE OF WARRANT. Subject to the terms and conditions set forth herein, this Warrant may be exercised at any time, in whole or in part, by the Warrantholder during the Exercise Period by: (a) the surrender of this Warrant to the Company, with a duly executed Exercise Form, and (b) the delivery of payment to the Company, for the account of the Company, by wire transfer or any other means approved by the Company, of the aggregate Exercise Price in lawful money of the United States of America. - -------- 1 To be equal to "Price Per Share" paid in the Stock Purchase Agreement 2 The Company agrees that the Warrant Shares shall be deemed to be issued to the Warrantholder as the record holder of such Warrant Shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for the Warrant Shares as aforesaid. For the avoidance of doubt, cashless exercises of the Warrant shall not be permitted. 2.2 WARRANT SHARES CERTIFICATE. A stock certificate or certificates for the Warrant Shares specified in the Exercise Form shall be delivered to the Warrantholder within five (5) Business Days after receipt of both the Exercise Form by the Company and the payment by the Warrantholder of the aggregate Exercise Price. If this Warrant shall have been exercised only in part, the Company shall, at the time of delivery of the stock certificate or certificates, deliver to the Warrantholder a new Warrant evidencing the right to purchase the remaining Warrant Shares, which new Warrant shall in all other respects be identical with this Warrant. 2.3 PAYMENT OF TAXES. The Company will pay all documentary stamp or other issuance taxes, if any, attributable to the issuance of Warrant Shares upon the exercise of this Warrant; PROVIDED, HOWEVER, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issue or delivery of any Warrants or Warrant certificates or Warrant Shares in a name other than that of the then Warrantholder as reflected upon the books of the Company. 3. RESTRICTIVE LEGEND. Except as otherwise permitted by this Section 3, each Warrant (and each Warrant issued in substitution for any Warrant pursuant to Section 6) shall be stamped or otherwise imprinted with a legend in substantially the form as set forth on the cover of this Warrant. Notwithstanding the foregoing, the Warrantholder may require the Company to issue a Warrant or a certificate for Warrant Shares, in each case without a legend, if either (i) such Warrant or such Warrant Shares, as the case may be, have been registered for resale under the Securities Act, (ii) the Warrantholder has delivered to the Company an opinion of legal counsel (from a firm reasonably satisfactory to the Company) which opinion shall be addressed to the Company and be reasonably satisfactory in form and substance to the Company's counsel, to the effect that such registration is not required with respect to such Warrant or such Warrant Shares, as the case may be or (iii) such Warrant or Warrant Shares may be sold without any limitation as to volume pursuant to Rule 144 (or any successor provision then in effect) under the Securities Act. 4. RESERVATION AND REGISTRATION OF SHARES. The Company covenants and agrees as follows: (a) All Warrant Shares that are issued upon the exercise of this Warrant shall, upon issuance, be validly issued, not subject to any preemptive rights, and be free from all taxes, liens, security interests, charges, and other encumbrances with respect to the issuance thereof, other than taxes in respect of any transfer occurring contemporaneously with such issue. (b) The Company shall at all times have authorized and reserved, and shall keep available and free from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant. 3 (c) The Company shall not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, spin-off, consolidation, merger, dissolution, issue or sale of securities or any other action or inaction, seek to avoid the observance or performance of any of the terms of this Warrant, and shall at all times in good faith assist in performing and giving effect to the terms hereof. 5. ANTI-DILUTION ADJUSTMENTS. The Exercise Price and the number of Warrant Shares to be received upon exercise of this Warrant shall be subject to adjustment as follows: 5.1 DIVIDEND, SUBDIVISION, COMBINATION OR RECLASSIFICATION OF COMMON STOCK. In the event that the Company shall at any time or from time to time, after the issuance of this Warrant but prior to the exercise hereof, (w) make a dividend or distribution on the outstanding shares of Common Stock payable in Capital Stock, (x) subdivide the outstanding shares of Common Stock into a larger number of shares, (y) combine the outstanding shares of Common Stock into a smaller number of shares or (z) issue any shares of its Capital Stock in a reclassification of the Common Stock (other than any such event for which an adjustment is made pursuant to another clause of this Section 5), then, and in each such case, (A) the aggregate number of Warrant Shares for which this Warrant is exercisable (the "Warrant Share Number") immediately prior to such event shall be adjusted (and any other appropriate actions shall be taken by the Company) so that the Warrantholder shall be entitled to receive upon exercise of this Warrant the number of shares of Common Stock or other securities of the Company that it would have owned or would have been entitled to receive upon or by reason of any of the events described above, had this Warrant been exercised immediately prior to the occurrence of such event and (B) the Exercise Price payable upon the exercise of this Warrant shall be adjusted by multiplying such Exercise Price immediately prior to such adjustment by a fraction, the numerator of which shall be the number of Warrant Shares issuable upon the exercise of this Warrant immediately prior to such adjustment, and the denominator of which shall be the number of Warrant Shares issuable immediately thereafter. An adjustment made pursuant to this Section 5.1 shall become effective retroactively (x) in the case of any such dividend or distribution, to a date immediately following the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution or (y) in the case of any such subdivision, combination or reclassification, to the close of business on the day upon which such corporate action becomes effective. 5.2 CERTAIN DISTRIBUTIONS. In case the Company shall at any time or from time to time, after the issuance of this Warrant but prior to the exercise hereof, distribute to all holders of shares of Common Stock (including any such distribution made in connection with a merger or consolidation in which the Company is the resulting or surviving Person and shares of Common Stock are not changed or exchanged) cash, evidences of indebtedness of the Company or another issuer, securities of the Company or another issuer or other assets (excluding dividends or distributions payable in shares of Common Stock for which adjustment is made under Section 5.1) or rights or warrants to subscribe for or purchase any of the foregoing, THEN, and in each such case, (A) the Exercise Price then in effect shall be adjusted (and any other appropriate actions shall be taken by the Company) by being multiplied by the Exercise Price in effect prior to the date of distribution by a fraction (i) the numerator of which shall be such Current Market Price of Common Stock immediately prior to the date of 4 distribution less the then fair market value (as determined by the Board of Directors in the exercise of their fiduciary duties) of the portion of the cash, evidences of indebtedness, securities or other assets so distributed or of such rights or warrants applicable to one share of Common Stock and (ii) the denominator of which shall be the Current Market Price of the Common Stock immediately prior to the date of distribution (but such fraction shall not be greater than one) and (B) the Warrant Share Number shall be increased by being multiplied by a fraction (i) the numerator of which shall be the Current Market Price of one share of Common Stock immediately prior to the record date for the distribution of such cash, evidences of indebtedness, securities, other assets or rights or warrants and (ii) the denominator of which shall be the Current Market Price of one share of Common Stock immediately prior to such record date less the fair market value (as determined by the Board of Directors in the exercise of their fiduciary duties) of the portion of such cash, evidences of indebtedness, securities, other assets or rights or warrants so distributed. Such adjustment shall be made whenever any such distribution is made and shall become effective retroactively to a date immediately following the close of business on the record date for the determination of stockholders entitled to receive such distribution. 5.3 OTHER CHANGES. In case the Company at any time or from time to time, after the issuance of this Warrant but prior to the exercise hereof, shall take any action affecting its Common Stock similar to or having an effect similar to any of the actions described in any of Sections 5.1, 5.2 or 5.7 (but not including any action described in any such Section) and the Board of Directors in good faith determines that it would be equitable in the circumstances to adjust the Exercise Price and Warrant Share Number as a result of such action, then, and in each such case, the Exercise Price and Warrant Share Number shall be adjusted in such manner and at such time as the Board of Directors in good faith determines would be equitable in the circumstances (such determination to be evidenced in a resolution, a certified copy of which shall be mailed to the Warrantholder). 5.4 NO ADJUSTMENT; PAR VALUE MINIMUM. Notwithstanding anything herein to the contrary, no adjustment under this Section 5 need be made to the Exercise Price or Warrant Share Number if the company receives written notice from the Warrantholder that no such adjustment is required. Notwithstanding any other provision of this Warrant, the Exercise Price shall not be adjusted below the par value of a share of Common Stock. 5.5 ABANDONMENT. If the Company shall take a record of the holders of shares of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, and shall thereafter and before the distribution to stockholders thereof legally abandon its plan to pay or deliver such dividend or distribution, then no adjustment in the Exercise Price or Warrant Share Number shall be required by reason of the taking of such record. 5.6 CERTIFICATE AS TO ADJUSTMENTS. Upon any adjustment in the Exercise Price or Warrant Share Number, the Company shall within a reasonable period (not to exceed ten (10) days) following any of the foregoing transactions deliver to the Warrantholder a certificate, signed by (i) the Chief Executive Officer of the Company and (ii) the Chief Financial Officer of the Company, setting forth in reasonable detail the event requiring the adjustment and the method by which such adjustment was calculated and specifying the adjusted Exercise Price and Warrant Share Number then in effect following such adjustment. 5 5.7 SPIN-OFF; REORGANIZATION, RECLASSIFICATION, MERGER OR SALE TRANSACTION. (a) In case of any spin-off by the Company of another Person (the "Spin-off Entity") at any time after the issuance of this Warrant but prior to the exercise hereof, the Company shall issue to the Warrantholder a new warrant, in form and substance satisfactory to the Company and the Majority Warrantholders, entitling the Warrantholder to purchase, at the exercise price equal to the excess of the Exercise Price in effect immediately prior to such spin-off over the adjusted Exercise Price pursuant to Section 5.2, the number of shares of common stock or other proprietary interest in the Spin-off Entity that the Warrantholder would have owned had the Warrantholder, immediately prior to such spin-off, exercised this Warrant. (b) In case of any capital reorganization, reclassification, Sale Transaction, merger or consolidation (other than a Sale Transaction or a merger or consolidation of the Company in which the Company is the surviving corporation) of the Company or other change of outstanding shares of Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value) (each, a "Transaction") at any time after the issuance of this Warrant but prior to the exercise hereof, the Company shall execute and deliver to the Warrantholder at least twenty (20) Business Days prior to effecting such Transaction a certificate stating that the Warrantholder shall have the right thereafter to exercise this Warrant for the kind and amount of shares of stock or other securities, property or cash receivable upon such Transaction by a holder of the number of shares of Common Stock into which this Warrant could have been exercised immediately prior to such Transaction, and provision shall be made therefor in the agreement, if any, relating to such Transaction. Such certificate shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this Section 5.7 and any equivalent thereof in any such certificate similarly shall apply to successive transactions. 5.8 NOTICES. In case at any time or from time to time: (a) the Company shall declare a dividend (or any other distribution) on its shares of Common Stock; (b) the Company shall authorize the granting to the holders of shares of its Common Stock rights or warrants to subscribe for or purchase any shares of Capital Stock or any other rights or warrants; (c) there shall occur a spin-off or Transaction; or (d) the Company shall take any other action that would require a vote of the Company's stockholders; then the Company shall mail to the Warrantholder, as promptly as possible but in any event at least ten (10) days prior to the applicable date hereinafter specified, a notice stating (A) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights or warrants or, if a record is not to be taken, the date as of which the holders of Common 6 Stock of record to be entitled to such dividend, distribution or granting of rights or warrants are to be determined, or (B) the date on which such spin-off or Transaction is expected to become effective and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for shares of stock or other securities or property or cash deliverable upon such spin-off or Transaction. Notwithstanding the foregoing, in the case of any event to which Section 5.7 is applicable, the Company shall also deliver the certificate described in such Section 5.7 to the Warrantholder at least ten (10) Business Days prior to effecting such reorganization or reclassification as aforesaid. 6. LOSS OR DESTRUCTION OF WARRANT. Subject to the terms and conditions hereof, 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 such bond or indemnification as the Company may reasonably require, and, in the case of such mutilation, upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor. 7. OWNERSHIP OF WARRANT. The Company may deem and treat the person in whose name this Warrant is registered as the holder and owner hereof (notwithstanding any notations of ownership or writing hereon made by anyone other than the Company) for all purposes and shall not be affected by any notice to the contrary, until presentation of this Warrant for registration of transfer. 8. AMENDMENTS. Any provision of this Warrant may be amended and the observance thereof waived only with the written consent of the Company and the Warrantholder. 9. DEFINITIONS. As used herein, unless the context otherwise requires, the following terms have the following respective meanings: "AFFILIATE" has the meaning set forth in the Purchase Agreement. "BOARD OF DIRECTORS" means the Board of Directors of the Company. "BUSINESS DAY" means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close. "CAPITAL STOCK" means, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting or non-voting) of such Person's capital stock and any and all rights, warrants or options exchangeable for or convertible into such capital stock (but excluding any debt security whether or not it is exchangeable for or convertible into such capital stock). "COMMON STOCK" means the Common Stock, par value $0.001 per share, of the Company. "COMMON STOCK EQUIVALENT" means any security or obligation which is by its terms convertible into or exercisable into shares of Common Stock, including, without limitation, any option, warrant or other subscription or purchase right with respect to Common Stock. 7 "COMPANY" has the meaning set forth in the first paragraph of this Warrant. "CURRENT MARKET PRICE" means, as of the date of determination, (a) the average of the daily Market Price under clause (a), (b) or (c) of the definition thereof of the Common Stock during the immediately preceding five (5) trading days ending on such date, and (b) if the Common Stock is not then listed or admitted to trading on any national securities exchange or quoted in the over-the-counter market, then the Market Price under clause (d) of the definition thereof on such date. "EXERCISE FORM" means an Exercise Form in the form annexed hereto as EXHIBIT A. "EXERCISE PERIOD" means the period from the date hereof to the second anniversary of the date hereof. "EXERCISE PRICE" has the meaning set forth in the first paragraph of this Warrant. "MARKET PRICE" means, as of the date of determination, (a) if the Common Stock is listed on a national securities exchange, the closing price per share of Common Stock on such date published in THE WALL STREET JOURNAL (NATIONAL EDITION) or, if no such closing price on such date is published in THE WALL STREET JOURNAL (NATIONAL EDITION), the average of the closing bid and asked prices on such date, as officially reported on the principal national securities exchange on which the Common Stock is then listed or admitted to trading; or (b) if the Common Stock is not then listed or admitted to trading on any national securities exchange but is designated as a national market system security by the National Association of Securities Dealers, Inc., the last trading price of the Common Stock on such date; or (c) if there shall have been no trading on such date or if the Common Stock is not designated as a national market system security by the National Association or Securities Dealers, Inc., the average of the reported closing bid and asked prices of the Common Stock on such date as shown by the National Market System of the National Association of Securities Dealers, Inc. Automated Quotations System and reported by any member firm of the New York Stock Exchange selected by the Company; or (d) if none of (a), (b) or (c) is applicable, a market price per share determined mutually by the Board of Directors and the Majority Warrantholders or, if the Board of Directors and the Majority Warrantholders shall fail to agree, at the Company's expense by an appraiser chosen by the Board of Directors and reasonably acceptable to the Majority Warrantholders. Any determination of the Market Price by an appraiser shall be based on a valuation of the Company as an entirety without regard to any discount for minority interests or disparate voting rights among classes of capital stock. "MAJORITY WARRANTHOLDERS" means the holders of a majority of Warrant Shares issuable upon exercise of all of the warrants issued pursuant the Purchase Agreement assuming the exercise of all such warrants. "PERSON" means any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind. 8 "PURCHASE AGREEMENT" means the Stock and Warrant Purchase Agreement, dated March 26, 2002 between the Company, the Warrantholder and the other parties listed therein. "SALE TRANSACTION" shall mean (a) (i) the merger or consolidation of the Company into or with one or more Persons, (ii) the merger or consolidation of one or more Persons into or with the Company or (iii) a tender offer or other business combination if, in the case of (i), (ii) or (iii), the stockholders of the Company prior to such merger or consolidation do not retain at least a majority of the voting power of the surviving Person or (b) the voluntary sale, conveyance, exchange or transfer to another Person of (i) the voting Capital Stock of the Company if, after such sale, conveyance, exchange or transfer, the stockholders of the Company prior to such sale, conveyance, exchange or transfer do not retain at least a majority of the voting power of the Company or (ii) all or substantially all of the assets of the Company. "SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder. "SPIN-OFF ENTITY" has the meaning set forth in Section 5.7 of this Warrant. "TRANSACTION" has the meaning set forth in Section 5.7 of this Warrant. "TRANSFER" has the meaning set forth on the cover of this Warrant. "WARRANT SHARE NUMBER" has the meaning set forth in Section 5.1 of this Warrant. "WARRANT SHARES" has the meaning set forth in the first paragraph of this Warrant. "WARRANTHOLDER" has the meaning set forth in the first paragraph of this Warrant. 10. MISCELLANEOUS. 10.1 ENTIRE AGREEMENT. This Warrant (together with the Purchase Agreement) constitutes the entire agreement between the Company and the Warrantholder with respect to the Warrant and supersedes all prior agreements and understanding with respects to the subject matter of this Warrant. 10.2 BINDING EFFECT; BENEFITS. This Warrant shall inure to the benefit of and shall be binding upon the Company and the Warrantholder and their respective permitted successors and assigns. Nothing in this Warrant, expressed or implied, is intended to or shall confer on any person other than the Company and the Warrantholder, or their respective permitted successors or assigns, any rights, remedies, obligations or liabilities under or by reason of this Warrant. 10.3 HEADINGS. The headings in this Warrant are for convenience of reference only and shall not limit or otherwise affect the meaning of this Warrant. 10.4 NOTICES. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier, courier service or personal delivery: 9 (a) if to the Company: ProxyMed, Inc. 2555 Davie Rd., Suite 110 Fort Lauderdale, FL 33317 Telecopy: (954) 473-2341 Attention: Michael K. Hoover, Chief Executive Officer Rafael G. Rodriguez, In-House Counsel with a copy to: Holland & Knight LLP 701 Brickell Avenue, Suite 3000 Miami, FL 33131 Telecopy: (305) 789-7799 Attention: Steven Sonberg, Esq. (b) if to the Warrantholder: c/o General Atlantic Service Corporation 3 Pickwick Plaza Greenwich, CT 06830 Telecopy: (203) 622-8818 Attention: Matthew Nimetz Thomas Murphy with a copy to: Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, NY 10019-6064 Telecopy: (212) 757-3990 Attention: Douglas A. Cifu, Esq. All such notices, demands and other communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial courier service; five (5) Business Days after being deposited in the mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged, if telecopied. Any party may by notice given in accordance with this Section 10.4 designate another address or Person for receipt of notices hereunder. 10.5 SEVERABILITY. Any term or provision of this Warrant which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the terms and provisions of this Warrant or affecting the validity or enforceability of any of the terms or provisions of this Warrant in any other jurisdiction. 10 10.6 GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF. 10.7 NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. Nothing contained in this Warrant shall be determined as conferring upon the Warrantholder any rights as a stockholder of the Company or as imposing any liabilities on the Warrantholder to purchase any securities whether such liabilities are asserted by the Company or by creditors or stockholders of the Company or otherwise. [Remainder of this page intentionally left blank] 11 IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer. PROXYMED, INC. By: -------------------------------------- Name: Title: Dated: April [ ], 2002 EXHIBIT A EXERCISE FORM (To be executed upon exercise of this Warrant) The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant, to purchase [________] shares of Common Stock and herewith tenders payment for such shares to the order of the Company in the amount of $[______] in accordance with the terms of this Warrant. The undersigned requests that a certificate for such Warrant Shares be registered in the name of the undersigned and that such certificates be delivered to the undersigned's address below. The undersigned represents that it is acquiring such shares for its own account for investment and not with a view to or for sale in connection with any distribution thereof (subject, however, to any requirement of law that the disposition thereof shall at all times be within its control). Dated: Signature --------------------------------------- --------------------------------------- (Print Name) --------------------------------------- (Street Address) --------------------------------------- (City) (State) (Zip Code) EX-10.3 5 g75168ex10-3.txt FORM OF REGISTRATION RIGHTS AGREEMENT EXHIBIT 10.3 REGISTRATION RIGHTS AGREEMENT among PROXYMED, INC. GENERAL ATLANTIC PARTNERS 74 L.P., GAP COINVESTMENT PARTNERS II, L.P., GAPSTAR, LLC, GAPCO GMBH & CO. KG ------------------------------------------------- Dated: April __, 2002 ------------------------------------------------ i TABLE OF CONTENTS
Page ---- 1. Definitions.....................................................................................1 2. General; Securities Subject to this Agreement...................................................5 (a) Grant of Rights........................................................................5 (b) Registrable Securities.................................................................5 (c) Holders of Registrable Securities......................................................5 3. Demand Registration.............................................................................5 (a) Request for Demand Registration........................................................5 (b) Incidental or "Piggy-back" Rights With Respect to a Demand Registration................6 (c) Effective Demand Registration..........................................................7 (d) Expenses...............................................................................7 (e) Underwriting Procedures................................................................7 (f) Selection of Underwriters..............................................................8 4. Incidental or "Piggy-Back" Registration.........................................................8 (a) Request for Incidental Registration....................................................8 (b) Expenses...............................................................................9 5. Shelf Registration..............................................................................9 (a) Request for a Shelf Registration.......................................................9 (d) Shelf Underwriting Procedures..........................................................9 (c) Expenses..............................................................................10 (d) No Demand Registration................................................................10 6. Holdback Agreements............................................................................10 (a) Restrictions On Public Sale by Designated Holders.....................................10 (b) Restrictions On Public Sale by the Company............................................11 7. Registration Procedures........................................................................11 (a) Obligations of the Company............................................................11 (b) Seller Information....................................................................14 (c) Notice to Discontinue.................................................................14 (d) Registration Expenses.................................................................14 8. Indemnification; Contribution..................................................................15 (a) Indemnification by the Company........................................................15 (b) Indemnification by Designated Holders.................................................15 (c) Conduct of Indemnification Proceedings................................................16 (d) Contribution..........................................................................17 9. Rule 144.......................................................................................17
ii
10. Miscellaneous..................................................................................18 (a) Recapitalizations, Exchanges, Etc.....................................................18 (b) No Inconsistent Agreements............................................................18 (c) Remedies..............................................................................18 (d) Amendments and Waivers................................................................18 (e) Notices...............................................................................19 (f) Successors and Assigns; Third Party Beneficiaries.....................................20 (g) Counterparts..........................................................................21 (h) Headings..............................................................................21 (i) Governing Law.........................................................................21 (j) Severability..........................................................................21 (k) Rules of Construction.................................................................21 (l) Entire Agreement......................................................................21 (m) Further Assurances....................................................................21 (n) Other Agreements......................................................................21
REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT, dated April __, 2002 (this "Agreement"), among ProxyMed, Inc., a Florida corporation (the "Company"), General Atlantic Partners 74, L.P., a Delaware limited partnership ("GAP LP"), GAP Coinvestment Partners II, L.P., a Delaware limited partnership ("GAP Coinvestment"), GapStar, LLC, a Delaware limited liability company ("GapStar"), and GAPCO GmbH & Co. KG, a German limited partnership ("GmbH Coinvestment"). WHEREAS, pursuant to the Stock and Warrant Purchase Agreement, dated March 26, 2002 (the "Stock Purchase Agreement"), among the Company, GAP LP, GAP Coinvestment, GapStar and GmbH Coinvestment, the Company has agreed to issue and sell to each GAP LP, GAP Coinvestment, GapStar and GmbH Coinvestment (a) shares of Common Stock, par value $0.001 per share, of the Company and (b) a Warrant (as hereinafter defined); and WHEREAS, in order to induce each of GAP LP, GAP Coinvestment, GapStar, and GmbH Coinvestment to purchase its shares of Common Stock and its Warrants, the Company has agreed to grant registration rights with respect to the Registrable Securities (as hereinafter defined) as set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. DEFINITIONS. As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated: "AFFILIATE" shall mean any Person who is an "affiliate" as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. In addition, the following shall be deemed to be Affiliates of GAP Coinvestment, GAP LP, GapStar and GmbH Coinvestment: (a) GAP LLC, the members of GAP LLC, GmbH Management, the shareholders of GmbH Management, the limited partners of each of GAP Coinvestment, GAP LP and GmbH Coinvestment, and the members of GapStar; (b) any Affiliate of GAP LLC, the members of GAP LLC, the limited partners of GAP Coinvestment or GmbH Coinvestment, or the members of GapStar; and (c) any limited liability company or partnership a majority of whose members or partners, as the case may be, are members or former members of GAP LLC or consultants or key employees of General Atlantic Service Corporation, a Delaware corporation and an Affiliate of GAP LLC. In addition, GAP LP, GAP Coinvestment, GapStar and GmbH Coinvestment shall be deemed to be Affiliates of one another. "AGREEMENT" mean this Agreement as the same may be amended, supplemented or modified in accordance with the terms hereof. "APPROVED UNDERWRITER" has the meaning set forth in Section 3(f) of this Agreement. 2 "BOARD OF DIRECTORS" means the Board of Directors of the Company. "BUSINESS DAY" means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close. "CLOSING PRICE" means, with respect to the Registrable Securities, as of the date of determination, (a) if the Registrable Securities are listed on a national securities exchange, the closing price per share of a Registrable Security on such date published in THE WALL STREET JOURNAL (NATIONAL EDITION) or, if no such closing price on such date is published in THE WALL STREET JOURNAL (NATIONAL EDITION), the average of the closing bid and asked prices on such date, as officially reported on the principal national securities exchange on which the Registrable Securities are then listed or admitted to trading; or (b) if the Registrable Securities are not then listed or admitted to trading on any national securities exchange but are designated as national market system securities by the NASD, the last trading price per share of a Registrable Security on such date; or (c) if there shall have been no trading on such date or if the Registrable Securities are not designated as national market system securities by the NASD, the average of the reported closing bid and asked prices of the Registrable Securities on such date as shown by The Nasdaq Stock Market, Inc. (or its successor) and reported by any member firm of The New York Stock Exchange, Inc. selected by the Company; or (d) if none of (a), (b) or (c) is applicable, a market price per share determined in good faith by the Board of Directors or, if such determination is not satisfactory to the Designated Holder for whom such determination is being made, by a nationally recognized investment banking firm selected by the Company and such Designated Holder, the expenses for which shall be borne equally by the Company and such Designated Holder. If trading is conducted on a continuous basis on any exchange, then the closing price shall be at 4:00 P.M. New York City time. "COMMISSION" means the Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act. "COMMON STOCK" means the Common Stock, par value $0.001 per share, of the Company or any other capital stock of the Company into which such stock is reclassified or reconstituted and any other common stock of the Company. "COMPANY" has the meaning set forth in the preamble to this Agreement. "COMPANY UNDERWRITER" has the meaning set forth in Section 4(a) of this Agreement. "DEMAND REGISTRATION" has the meaning set forth in Section 3(a) of this Agreement. "DESIGNATED HOLDER" means each of the General Atlantic Stockholders and any transferee of any of them to whom Registrable Securities have been transferred in accordance with Section 10(f) of this Agreement, other than a transferee to whom Registrable Securities have been transferred pursuant to a Registration Statement under the Securities Act or Rule 144 or Regulation S under the Securities Act (or any successor rule thereto). 3 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. "GAP COINVESTMENT" has the meaning set forth in the preamble to this Agreement. "GAP LLC" means General Atlantic Partners, LLC, a Delaware limited liability company and the general partner of GAP LP and the managing member of GapStar, and any successor to such entity. "GAP LP" has the meaning set forth in the preamble to this Agreement. "GAPSTAR" has the meaning set forth in the preamble to this Agreement. "GENERAL ATLANTIC STOCKHOLDERS" means GAP LP, GAP Coinvestment, GapStar, GmbH Coinvestment, any Subsequent General Atlantic Purchaser and any Transferee thereof to whom Registrable Securities are transferred in accordance with Section 10(f) of this Agreement. "GMBH COINVESTMENT" has the meaning set forth in the preamble to this Agreement. "GMBH MANAGEMENT" means GAPCO Management GmbH, a German company with limited liability and the general partner of GmbH Coinvestment, and any successor to such entity. "HOLDERS' COUNSEL" has the meaning set forth in Section 7(a)(i) of this Agreement. "INCIDENTAL REGISTRATION" has the meaning set forth in Section 4(a) of this Agreement. "INDEMNIFIED PARTY" has the meaning set forth in Section 8(c) of this Agreement. "INDEMNIFYING PARTY" has the meaning set forth in Section 8(c) of this Agreement. "INITIATING HOLDERS" has the meaning set forth in Section 3(a) of this Agreement. "INSPECTOR" has the meaning set forth in Section 7(a)(vii) of this Agreement. 4 "LIABILITY" has the meaning set forth in Section 8(a) of this Agreement. "MARKET PRICE" means, on any date of determination, the average of the daily Closing Price of the Registrable Securities for the immediately preceding thirty (30) days on which the national securities exchanges are open for trading. "NASD" means the National Association of Securities Dealers, Inc. "PERSON" means any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, government (or an agency or political subdivision thereof) or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity. "RECORDS" has the meaning set forth in Section 7(a)(vii) of this Agreement. "REGISTRABLE SECURITIES" means each of the following: (a) any and all shares of Common Stock owned by the Designated Holders on the date hereof or issued or issuable upon exercise of the Warrants, (b) any other shares of Common Stock hereafter acquired or owned by any of the Designated Holders if such Designated Holder is an Affiliate of the Company and (c) any shares of Common Stock issued or issuable to any of the Designated Holders with respect to the Registrable Securities by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise and any shares of Common Stock or voting common stock issuable upon conversion, exercise or exchange thereof. "REGISTRATION EXPENSES" has the meaning set forth in Section 7(d) of this Agreement. "REGISTRATION STATEMENT" means a Registration Statement filed pursuant to the Securities Act. "SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. "SHELF INITIATING HOLDERS" has the meaning set forth in Section 5(a) of this Agreement. "SHELF REGISTRATION" has the meaning set forth in Section 5(a) of this Agreement. "STOCK PURCHASE AGREEMENT" has the meaning set forth in the recitals to this Agreement. "SUBSEQUENT GENERAL ATLANTIC PURCHASER" means any Affiliate of GAP LLC that, after the date hereof, acquires shares of Common Stock, Preferred Stock, other shares of capital stock of the Company, or any other security convertible, exchangeable 5 or exercisable into or for shares of Common Stock, Preferred Stock or other shares of capital stock of the Company, and any option, warrant or other subscription or purchase right with respect to any of the foregoing. "VALID BUSINESS REASON" has the meaning set forth in Section 3(a) of this Agreement. "WARRANTS" has the meaning set forth in the Stock Purchase Agreement. 2. GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT. (a) GRANT OF RIGHTS. The Company hereby grants registration rights to the Designated Holders upon the terms and conditions set forth in this Agreement. (b) REGISTRABLE SECURITIES. For the purposes of this Agreement, Registrable Securities will cease to be Registrable Securities, when (i) a Registration Statement covering such Registrable Securities has been declared effective under the Securities Act by the Commission and such Registrable Securities have been disposed of pursuant to such effective Registration Statement, (ii) (x) the entire amount of the Registrable Securities owned by a Designated Holder may be sold in a single sale, in the opinion of counsel satisfactory to the Company and such Designated Holder, each in their reasonable judgment, without any limitation as to volume pursuant to Rule 144 (or any successor provision then in effect) under the Securities Act and (y) such Designated Holder owning such Registrable Securities owns less than one percent (1%) of the outstanding shares of Common Stock on a fully diluted basis, or (iii) the Registrable Securities are proposed to be sold or distributed by a Person not entitled to the registration rights granted by this Agreement. (c) HOLDERS OF REGISTRABLE SECURITIES. A Person is deemed to be a holder of Registrable Securities whenever such Person owns of record Registrable Securities, or holds an option to purchase, or a security convertible into or exercisable or exchangeable for, Registrable Securities whether or not such acquisition or conversion has actually been effected. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company may act upon the basis of the instructions, notice or election received from the registered owner of such Registrable Securities. Registrable Securities issuable upon exercise of an option or upon conversion of another security shall be deemed outstanding for the purposes of this Agreement. 3. DEMAND REGISTRATION. (a) REQUEST FOR DEMAND REGISTRATION. At any time commencing April __,2003, one or more of the General Atlantic Stockholders, acting solely through GAP LLC or its written designee (the "Initiating Holders"), may make a written request to the Company to register, and the Company shall register, under the Securities Act (other than pursuant to a Registration Statement on Form S-4 or S-8 or any 6 successor thereto) (a "Demand Registration"), the number of Registrable Securities stated in such request; PROVIDED, HOWEVER, that subject to Section 3(c), the Company shall not be obligated to effect more than one such Demand Registration for the General Atlantic Stockholders. For purposes of the preceding sentence, two or more Registration Statements filed in response to one demand shall be counted as one Demand Registration. If the Board of Directors, in its good faith judgment, determines that any registration of Registrable Securities should not be made or continued because it would materially interfere with any material financing, acquisition, corporate reorganization or merger or other material transaction involving the Company (a "Valid Business Reason"), the Company may (x) postpone filing a Registration Statement relating to a Demand Registration until such Valid Business Reason no longer exists, but in no event for more than one hundred and twenty (120) days, and (y) in case a Registration Statement has been filed relating to a Demand Registration, if the Valid Business Reason has not resulted from actions taken by the Company, the Company, upon the approval of a majority of the Board of Directors, may cause such Registration Statement to be withdrawn and its effectiveness terminated or may postpone amending or supplementing such Registration Statement. The Company shall give written notice of its determination to postpone or withdraw a Registration Statement and of the fact that the Valid Business Reason for such postponement or withdrawal no longer exists, in each case, promptly after the occurrence thereof. Notwithstanding anything to the contrary contained herein, the Company may not postpone or withdraw a filing under this Section 3(a) more than once. The request for a Demand Registration by the Initiating Holders shall state the amount of the Registrable Securities proposed to be sold and the intended method of disposition thereof. (b) INCIDENTAL OR "PIGGY-BACK" RIGHTS WITH RESPECT TO A DEMAND REGISTRATION. Each of the Designated Holders (other than Initiating Holders which have requested a registration under Section 3(a)) may offer its or his Registrable Securities under any Demand Registration pursuant to this Section 3(b). Within five (5) Business Days after the receipt of a request for a Demand Registration from an Initiating Holder, the Company shall (i) give written notice thereof to all of the Designated Holders (other than Initiating Holders which have requested a registration under Section 3(a)) and (ii) subject to Section 3(e), include in such registration all of the Registrable Securities held by such Designated Holders from whom the Company has received a written request for inclusion therein within ten (10) days of the receipt by such Designated Holders of such written notice referred to in clause (i) above. Each such request by such Designated Holders shall specify the number of Registrable Securities proposed to be registered. The failure of any Designated Holder to respond within such 10-day period referred to in clause (ii) above shall be deemed to be a waiver of such Designated Holder's rights under this Section 3 with respect to such Demand Registration. Any Designated Holder may waive its rights under this Section 3 prior to the expiration of such 10-day period by giving written notice to the Company, with a copy to the Initiating Holders. If a Designated Holder sends the Company a written request for inclusion of part or all of such Designated Holder's Registrable Securities in a registration, such Designated Holder shall not be entitled to withdraw or revoke such request without the prior written consent of the Company in its sole discretion unless, as a result of facts or circumstances arising after the date on which such request was made relating to the Company or to market 7 conditions, such Designated Holder reasonably determines that participation in such registration would have a material adverse effect on such Designated Holder. (c) EFFECTIVE DEMAND REGISTRATION. The Company shall use its reasonable best efforts to cause any such Demand Registration to become and remain effective not later than sixty (60) days after it receives a request under Section 3(a) hereof. A registration shall not constitute a Demand Registration until it has become effective and remains continuously effective for the lesser of (i) the period during which all Registrable Securities registered in the Demand Registration are sold and (ii) 120 days; PROVIDED, HOWEVER, that a registration shall not constitute a Demand Registration if (x) after such Demand Registration has become effective, such registration or the related offer, sale or distribution of Registrable Securities thereunder is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason not attributable to the Initiating Holders and such interference is not thereafter eliminated or (y) the conditions specified in the underwriting agreement, if any, entered into in connection with such Demand Registration are not satisfied or waived, other than by reason of a failure by the Initiating Holder or (z) less than 75% of the Registrable Securities requested to be included in any such Demand Registration are not so included or are not sold pursuant to such Demand Registration. (d) EXPENSES. The Company shall pay all Registration Expenses in connection with a Demand Registration, whether or not such Demand Registration becomes effective. (e) UNDERWRITING PROCEDURES. If the Company or the Initiating Holders holding a majority of the Registrable Securities held by all of the Initiating Holders so elect, the Company shall use its reasonable best efforts to cause such Demand Registration to be in the form of a firm commitment underwritten offering and the managing underwriter or underwriters selected for such offering shall be the Approved Underwriter selected in accordance with Section 3(f). In connection with any Demand Registration under this Section 3 involving an underwritten offering, none of the Registrable Securities held by any Designated Holder making a request for inclusion of such Registrable Securities pursuant to Section 3(b) hereof shall be included in such underwritten offering unless such Designated Holder accepts the terms of the offering as agreed upon by the Company, the Initiating Holders and the Approved Underwriter, and then only in such quantity as will not, in the opinion of the Approved Underwriter, jeopardize the success of such offering by the Initiating Holders. If the Approved Underwriter advises the Company that the aggregate amount of such Registrable Securities requested to be included in such offering is sufficiently large to have a material adverse effect on the success of such offering, then the Company shall include in such registration only the aggregate amount of Registrable Securities that the Approved Underwriter believes may be sold without any such material adverse effect and shall reduce the amount of Registrable Securities to be included in such registration, FIRST by eliminating any shares included by the Company, SECOND as to the Designated Holders (who are not Initiating Holders and who requested to participate in such registration pursuant to Section 3(b) hereof) as a group, if any, and THIRD as to the Initiating Holders 8 as a group, pro rata within each group based on the number of Registrable Securities owned by each such Designated Holder or Initiating Holder, as the case may be. (f) SELECTION OF UNDERWRITERS. If any Demand Registration or Shelf Registration, as the case may be, of Registrable Securities is in the form of an underwritten offering, the Company shall select and obtain an investment banking firm of national reputation to act as the managing underwriter of the offering (the "Approved Underwriter"); PROVIDED, HOWEVER, that the Approved Underwriter shall, in any case, also be approved by the Initiating Holders or Shelf Initiating Holders, as the case may be, such approval not to be unreasonably withheld. 4. INCIDENTAL OR "PIGGY-BACK" REGISTRATION. (a) REQUEST FOR INCIDENTAL REGISTRATION. At any time commencing April [ ], 2003, if the Company proposes to file a Registration Statement under the Securities Act with respect to an offering by the Company for its own account (other than a Registration Statement on Form S-4 or S-8 or any successor thereto) or for the account of any stockholder of the Company other than the Designated Holders, then the Company shall give written notice of such proposed filing to each of the Designated Holders at least twenty (20) days before the anticipated filing date, and such notice shall describe the proposed registration and distribution and offer such Designated Holders the opportunity to register the number of Registrable Securities as each such Designated Holder may request (an "Incidental Registration"). The Company shall use its reasonable best efforts (within twenty (20) days of the notice provided for in the preceding sentence) to cause the managing underwriter or underwriters in the case of a proposed underwritten offering (the "Company Underwriter") to permit each of the Designated Holders who have requested in writing to participate in the Incidental Registration to include its or his Registrable Securities in such offering on the same terms and conditions as the securities of the Company or the account of such other stockholder, as the case may be, included therein. In connection with any Incidental Registration under this Section 4(a) involving an underwritten offering, the Company shall not be required to include any Registrable Securities in such underwritten offering unless the Designated Holders thereof accept the terms of the underwritten offering as agreed upon between the Company, such other stockholders, if any, and the Company Underwriter, and then only in such quantity as the Company Underwriter believes will not jeopardize the success of the offering by the Company. If the Company Underwriter determines that the registration of all or part of the Registrable Securities which the Designated Holders have requested to be included would materially adversely affect the success of such offering, then the Company shall be required to include in such Incidental Registration, to the extent of the amount that the Company Underwriter believes may be sold without causing such adverse effect, FIRST, all of the securities to be offered for the account of the Company; SECOND, the Registrable Securities to be offered for the account of the Designated Holders pursuant to this Section 4, pro rata based on the number of Registrable Securities owned by each such Designated Holder; THIRD, the securities held by any other stockholder of the Company that the Company is contractually obligated to include in such Registration Statement pursuant to a contract entered into prior to March 26, 2002 and set forth in SCHEDULE 1; and FOURTH, any other securities requested to be included in such offering. 9 (b) EXPENSES. The Company shall bear all Registration Expenses in connection with any Incidental Registration pursuant to this Section 4, whether or not such Incidental Registration becomes effective. 5. SHELF REGISTRATION. (a) REQUEST FOR A SHELF REGISTRATION. At any time commencing after April __, 2003, in the event that the Company shall receive from one or more of the General Atlantic Stockholders as a group, acting solely through GAP LLC or its written designee (the "Shelf Initiating Holders"), a written request that the Company register, under the Securities Act on Form S-3 (or any successor form then in effect) (a "Shelf Registration"), all or a portion of the Registrable Securities owned by such Shelf Initiating Holders on a shelf registration to be offered on a continuous basis, the Company shall give written notice of such request to all of the Designated Holders (other than Shelf Initiating Holders which have requested an Shelf Registration under this Section 5(a)) at least ten (10) days before the anticipated filing date of such Shelf Registration, and such notice shall describe the proposed registration and offer such Designated Holders the opportunity to register the number of Registrable Securities as each such Designated Holder may request in writing to the Company, given within ten (10) days after their receipt from the Company of the written notice of such registration. The Shelf Registration pursuant to this Section 5(a)shall be for an offering on a continuous basis pursuant to rule 415 under the Securities Act and the Company shall, subject to the Securities Act, maintain the effectiveness of the Shelf Registration until all of the Registrable Securities included on such Shelf Registration have been disposed of or otherwise no longer constitute Registrable Securities. With respect to each Shelf Registration, the Company shall, subject to Section 5(b), (i) include in such offering the Registrable Securities of the Shelf Initiating Holders and (ii) use its reasonable best efforts to (x) cause such registration pursuant to this Section 5(a) to become and remain effective as soon as practicable, but in any event not later than forty-five (45) days after it receives a request therefor and (y) include in such offering the Registrable Securities of the Designated Holders (other than Shelf Initiating Holders which have requested an Shelf Registration under this Section 5(a)) who have requested in writing to participate in such registration on the same terms and conditions as the Registrable Securities of the Shelf Initiating Holders included therein. (b) SHELF UNDERWRITING PROCEDURES. If the Shelf Initiating Holders holding a majority of the Registrable Securities held by all of the Shelf Initiating Holders so elect, the Company shall use its reasonable best efforts to cause either (i) such Shelf Registration pursuant to this Section 5 to be in the form of a firm commitment underwritten offering or (ii) a supplement to an effective Shelf Registration to be filed with the Commission in accordance with the Securities Act in order to effect a firm commitment underwritten offering and in either case the managing underwriter or underwriters selected for such offering shall be the Approved Underwriter selected in accordance with Section 3(f). In connection with any Shelf Registration under Section 5(a) involving an underwritten offering, the Company shall not be required to include any Registrable Securities in such underwritten offering unless the Designated Holders thereof accept the terms of the underwritten offering as agreed upon between the 10 Company, the Approved Underwriter and the Shelf Initiating Holders (which in any case shall not require the Designated Holders to make any representations or warranties about the Company), and then only in such quantity as such underwriter believes will not jeopardize the success of such offering by the Shelf Initiating Holders. If the Approved Underwriter believes that the registration of all or part of the Registrable Securities which the Shelf Initiating Holders and the other Designated Holders have requested to be included would materially adversely affect the success of such public offering, then the Company shall be required to include in the underwritten offering, to the extent of the amount that the Approved Underwriter believes may be sold without causing such adverse effect, FIRST, all of the Registrable Securities to be offered for the account of the Shelf Initiating Holders, pro rata based on the number of Registrable Securities owned by such Shelf Initiating Holders; SECOND, the Registrable Securities to be offered for the account of the other Designated Holders who requested inclusion of their Registrable Securities pursuant to Section 5(a), pro rata based on the number of Registrable Securities owned by such Designated Holders; and THIRD, any other securities requested to be included in such offering. (c) EXPENSES. The Company shall bear all Registration Expenses in connection with any Shelf Registration pursuant to this Section 5, whether or not such Shelf Registration become effective. (d) NO DEMAND REGISTRATION. No registration requested by any Shelf Initiating Holder pursuant to this Section 5 shall be deemed a Demand Registration pursuant to Section 3. 6. HOLDBACK AGREEMENTS. (a) RESTRICTIONS ON PUBLIC SALE BY DESIGNATED HOLDERS. To the extent (i) requested by the Approved Underwriter or the Company Underwriter, as the case may be, in the case of an underwritten public offering and (ii) all of the Company's officers, directors and holders in excess of one percent (1%) of its outstanding capital stock execute agreements identical to those referred to in this Section 6(a), each Designated Holder agrees (x) not to effect any public sale or distribution of any Registrable Securities or of any securities convertible into or exchangeable or exercisable for such Registrable Securities, including a sale pursuant to Rule 144 under the Securities Act, or offer to sell, contract to sell (including without limitation any short sale), grant any option to purchase or enter into any hedging or similar transaction with the same economic effect as a sale any Registrable Securities and (y) not to make any request for a Demand Registration or Shelf Registration during the ninety (90) day period or such shorter period, if any, mutually agreed upon by such Designated Holder and the requesting party beginning on the effective date of the Registration Statement (except as part of such registration) for such public offering. No Designated Holder of Registrable Securities subject to this Section 6(a) shall be released from any obligation under any agreement, arrangement or understanding entered into pursuant to this Section 6(a) unless all other Designated Holders of Registrable Securities subject to the same obligation are also released. 11 (b) RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The Company agrees not to effect any public sale or distribution of any of its securities, or any securities convertible into or exchangeable or exercisable for such securities (except pursuant to registrations on Form S-4 or S-8 or any successor thereto), during the period beginning on the effective date of any Registration Statement in which the Designated Holders of Registrable Securities are participating and ending on the earlier of (i) the date on which all Registrable Securities registered on such Registration Statement are sold and (ii) 120 days after the effective date of such Registration Statement (except as part of such registration). 7. REGISTRATION PROCEDURES. (a) OBLIGATIONS OF THE COMPANY. Whenever registration of Registrable Securities has been requested pursuant to Section 3, Section 4 or Section 5 of this Agreement, the Company shall use its reasonable best efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method of distribution thereof as quickly as practicable, and in connection with any such request, the Company shall, as expeditiously as possible: (i) prepare and file with the Commission a Registration Statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of such Registrable Securities in accordance with the intended method of distribution thereof, and cause such Registration Statement to become effective; PROVIDED, HOWEVER, that (x) before filing a Registration Statement or prospectus or any amendments or supplements thereto, the Company shall provide counsel selected by the Designated Holders holding a majority of the Registrable Securities being registered in such registration ("Holders' Counsel") and any other Inspector with an adequate and appropriate opportunity to review and comment on such Registration Statement and each prospectus included therein (and each amendment or supplement thereto) to be filed with the Commission, subject to such documents being under the Company's control, and (y) the Company shall notify the Holders' Counsel and each seller of Registrable Securities of any stop order issued or threatened by the Commission and take all action required to prevent the entry of such stop order or to remove it if entered; (ii) prepare and file with the Commission such amendments and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for the lesser of (x) 120 days and (y) such shorter period which will terminate when all Registrable Securities covered by such Registration Statement have been sold; PROVIDED, that with respect to a Shelf Registration, the Company shall keep such Registration Statement effective until all Registrable Securities covered by such Registration Statement have been sold; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement; 12 (iii) furnish to each seller of Registrable Securities, prior to filing a Registration Statement, at least one copy of such Registration Statement as is proposed to be filed, and thereafter such number of copies of such Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto), and the prospectus included in such Registration Statement (including each preliminary prospectus) and any prospectus filed under Rule 424 under the Securities Act as each such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller; (iv) register or qualify such Registrable Securities under such other securities or "blue sky" laws of such jurisdictions as any seller of Registrable Securities may request, and to continue such qualification in effect in such jurisdiction for as long as permissible pursuant to the laws of such jurisdiction, or for as long as any such seller requests or until all of such Registrable Securities are sold, whichever is shortest, and do any and all other acts and things which may be reasonably necessary or advisable to enable any such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller; PROVIDED, HOWEVER, that the Company shall not be required to (x) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 7(a)(iv), (y) subject itself to taxation in any such jurisdiction or (z) consent to general service of process in any such jurisdiction; (v) notify each seller of Registrable Securities at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such Registration Statement contains an untrue statement of a material fact or omits to state any 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 and the Company shall promptly prepare a supplement or amendment to such prospectus and furnish to each seller of Registrable Securities a reasonable number of copies of such supplement to or an amendment of such prospectus as may be necessary so that, after delivery to the purchasers of such Registrable Securities, such prospectus shall not contain an 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 light of the circumstances under which they were made, not misleading; (vi) enter into and perform customary agreements (including an underwriting agreement in customary form with the Approved Underwriter or Company Underwriter, if any, selected as provided in Section 3, Section 4 or Section 5, as the case may be) and take such other actions as are prudent and reasonably required in order to expedite or facilitate the disposition of such Registrable Securities, including causing its officers to participate in "road shows" and other information meetings organized by the Approved Underwriter or Company Underwriter; (vii) make available at reasonable times for inspection by any seller of Registrable Securities, any managing underwriter participating in any disposition of such Registrable Securities pursuant to a Registration Statement, Holders' 13 Counsel and any attorney, accountant or other agent retained by any such seller or any managing underwriter (each, an "Inspector" and collectively, the "Inspectors"), all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries (collectively, the "Records") as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company's and its subsidiaries' officers, directors and employees, and the independent public accountants of the Company, to supply all information reasonably requested by any such Inspector in connection with such Registration Statement. Records that the Company determines, in good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors (and the Inspectors shall confirm their agreement in writing in advance to the Company if the Company shall so request) unless (x) the disclosure of such Records is necessary, in the Company's judgment, to avoid or correct a misstatement or omission in the Registration Statement, (y) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction after exhaustion of all appeals therefrom or (z) the information in such Records was known to the Inspectors on a non-confidential basis prior to its disclosure by the Company or has been made generally available to the public. Each seller of Registrable Securities agrees that it shall, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at the Company's expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential; (viii) if such sale is pursuant to an underwritten offering, obtain a "cold comfort" letters dated the effective date of the Registration Statement and the date of the closing under the underwriting agreement from the Company's independent public accountants in customary form and covering such matters of the type customarily covered by "cold comfort" letters as Holders' Counsel or the managing underwriter reasonably requests; (ix) furnish, at the request of any seller of Registrable Securities on the date such securities are delivered to the underwriters for sale pursuant to such registration or, if such securities are not being sold through underwriters, on the date the Registration Statement with respect to such securities becomes effective, an opinion, dated such date, of counsel representing the Company for the purposes of such registration, addressed to the underwriters, if any, and to the seller making such request, covering such legal matters with respect to the registration in respect of which such opinion is being given as the underwriters, if any, and such seller may reasonably request and are customarily included in such opinions; (x) comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable but no later than fifteen (15) months after the effective date of the Registration Statement, an earnings statement covering a period of twelve (12) months beginning after the effective date of the Registration Statement, in a manner which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; 14 (xi) cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed, PROVIDED that the applicable listing requirements are satisfied; (xii) keep Holders' Counsel advised in writing as to the initiation and progress of any registration under Section 3, Section 4 or Section 5 hereunder; (xiii) cooperate with each seller of Registrable Securities and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the NASD; and (xiv) take all other steps reasonably necessary to effect the registration of the Registrable Securities contemplated hereby. (b) SELLER INFORMATION. The Company may require each seller of Registrable Securities as to which any registration is being effected to furnish, and such seller shall furnish, to the Company such information regarding the distribution of such securities as the Company may from time to time reasonably request in writing. (c) NOTICE TO DISCONTINUE. Each Designated Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 7(a)(v), such Designated Holder shall forthwith discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Designated Holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 7(a)(v) and, if so directed by the Company, such Designated Holder shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Designated Holder's possession, of the prospectus covering such Registrable Securities which is current at the time of receipt of such notice. If the Company shall give any such notice, the Company shall extend the period during which such Registration Statement shall be maintained effective pursuant to this Agreement (including, without limitation, the period referred to in Section 7(a)(ii)) by the number of days during the period from and including the date of the giving of such notice pursuant to Section 7(a)(v) to and including the date when sellers of such Registrable Securities under such Registration Statement shall have received the copies of the supplemented or amended prospectus contemplated by and meeting the requirements of Section 7(a)(v). (d) REGISTRATION EXPENSES. The Company shall pay all expenses arising from or incident to its performance of, or compliance with, this Agreement, including, without limitation, (i) Commission, stock exchange and NASD registration and filing fees, (ii) all fees and expenses incurred in complying with securities or "blue sky" laws (including reasonable fees, charges and disbursements of counsel to any underwriter incurred in connection with "blue sky" qualifications of the Registrable Securities as may be set forth in any underwriting agreement), (iii) all printing, messenger and delivery expenses, (iv) the fees, charges and expenses of counsel 15 to the Company and of its independent public accountants and any other accounting fees, charges and expenses incurred by the Company (including, without limitation, any expenses arising from any "cold comfort" letters or any special audits incident to or required by any registration or qualification) and any reasonable legal fees, charges and expenses incurred by one counsel to the Designated Holder, and (v) any liability insurance or other premiums for insurance obtained by the Company in connection with any Demand Registration or piggy-back registration thereon, Incidental Registration or Shelf Registration pursuant to the terms of this Agreement, regardless of whether such Registration Statement is declared effective. All of the expenses described in the preceding sentence of this Section 7(d) are referred to herein as "Registration Expenses." The Designated Holders of Registrable Securities sold pursuant to a Registration Statement shall bear the expense of any broker's commission or underwriter's discount or commission relating to registration and sale of such Designated Holders' Registrable Securities and, subject to clause (iv) above, shall bear the fees and expenses of their own counsel. 8. INDEMNIFICATION; CONTRIBUTION. (a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and hold harmless each Designated Holder, its partners, directors, officers, affiliates and each Person who controls (within the meaning of Section 15 of the Securities Act) such Designated Holder from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) (each, a "Liability" and collectively, "Liabilities"), arising out of or based upon any untrue, or allegedly untrue, statement of a material fact contained in any Registration Statement, prospectus or preliminary prospectus or notification or offering circular (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or arising out of or based upon 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 under the circumstances such statements were made, except insofar as such Liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission contained in such Registration Statement, preliminary prospectus or final prospectus in reliance and in conformity with information concerning such Designated Holder furnished in writing to the Company by such Designated Holder expressly for use therein, including, without limitation, the information furnished to the Company pursuant to Section 8(b). The Company shall also provide customary indemnities to any underwriters of the Registrable Securities, their officers, directors and employees and each Person who controls such underwriters (within the meaning of Section 15 of the Securities Act) to the same extent as provided above with respect to the indemnification of the Designated Holders of Registrable Securities. (b) INDEMNIFICATION BY DESIGNATED HOLDERS. In connection with any Registration Statement in which a Designated Holder is participating pursuant to Section 3, Section 4 or Section 5 hereof, each such Designated Holder shall promptly furnish to the Company in writing such information with respect to such Designated Holder as the Company may reasonably request or as may be required by law for use in connection with any such Registration Statement or prospectus and all information 16 required to be disclosed in order to make the information previously furnished to the Company by such Designated Holder not materially misleading or necessary to cause such Registration Statement not to omit a material fact with respect to such Designated Holder necessary in order to make the statements therein not misleading. Each Designated Holder agrees to indemnify and hold harmless the Company, any underwriter retained by the Company and each Person who controls the Company or such underwriter (within the meaning of Section 15 of the Securities Act) to the same extent as the foregoing indemnity from the Company to the Designated Holders, but only if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with information with respect to such Designated Holder furnished in writing to the Company by such Designated Holder expressly for use in such Registration Statement or prospectus, including, without limitation, the information furnished to the Company pursuant to this Section 8(b); PROVIDED, HOWEVER, that the total amount to be indemnified by such Designated Holder pursuant to this Section 8(b) shall be limited to the net proceeds (after deducting the underwriters' discounts and commissions) received by such Designated Holder in the offering to which the Registration Statement or prospectus relates. (c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to indemnification hereunder (the "Indemnified Party") agrees to give prompt written notice to the indemnifying party (the "Indemnifying Party") after the receipt by the Indemnified Party of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which the Indemnified Party intends to claim indemnification or contribution pursuant to this Agreement; PROVIDED, HOWEVER, that the failure so to notify the Indemnifying Party shall not relieve the Indemnifying Party of any Liability that it may have to the Indemnified Party hereunder (except to the extent that the Indemnifying Party is materially prejudiced or otherwise forfeits substantive rights or defenses by reason of such failure). If notice of commencement of any such action is given to the Indemnifying Party as above provided, the Indemnifying Party shall be entitled to participate in and, to the extent it may wish, jointly with any other Indemnifying Party similarly notified, to assume the defense of such action at its own expense, with counsel chosen by it and reasonably satisfactory to such Indemnified Party. The Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense of such action with counsel reasonably satisfactory to the Indemnified Party or (iii) the named parties to any such action (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and such parties have been advised by such counsel that either (x) representation of such Indemnified Party and the Indemnifying Party by the same counsel would be inappropriate under applicable standards of professional conduct or (y) there may be one or more legal defenses available to the Indemnified Party which are different from or additional to those available to the Indemnifying Party. In any of such cases, the Indemnifying Party shall not have the right to assume the defense of such action on behalf of such Indemnified Party, it being understood, however, that the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local 17 counsel) for all Indemnified Parties. No Indemnifying Party shall be liable for any settlement entered into without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the consent of such Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which such Indemnified Party is a party and indemnity has been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability for claims that are the subject matter of such proceeding. (d) CONTRIBUTION. If the indemnification provided for in this Section 8 from the Indemnifying Party is unavailable to an Indemnified Party hereunder in respect of any Liabilities referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Liabilities in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions which resulted in such Liabilities, as well as any other relevant equitable considerations. The relative faults of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 8(a), 8(b) and 8(c), any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding; PROVIDED that the total amount to be contributed by such Designated Holder shall be limited to the net proceeds (after deducting the underwriters' discounts and commissions) received by such Designated Holder in the offering. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 9. RULE 144. The Company covenants that it shall (a) file any reports required to be filed by it under the Exchange Act and (b) take such further action as each Designated Holder may reasonably request (including providing any information necessary to comply with Rule 144 under the Securities Act), all to the extent required from time to time to enable such Designated Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such rule may be amended from time to time, or Regulation S under the Securities Act or (ii) any similar rules or regulations hereafter adopted by the Commission. The Company shall, upon the request of any Designated 18 Holder, deliver to such Designated Holder a written statement as to whether it has complied with such requirements. 10. MISCELLANEOUS. (a) RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this Agreement shall apply to the full extent set forth herein with respect to (i) the shares of Common Stock, (ii) any and all shares of voting common stock of the Company into which the shares of Common Stock are converted, exchanged or substituted in any recapitalization or other capital reorganization by the Company and (iii) any and all equity securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in conversion of, in exchange for or in substitution of, the shares of Common Stock and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof. The Company shall cause any successor or assign (whether by merger, consolidation, sale of assets or otherwise) to enter into a new registration rights agreement with the Designated Holders on terms substantially the same as this Agreement as a condition of any such transaction. (b) NO INCONSISTENT AGREEMENTS. Except for the rights granted pursuant to the agreements set forth on SCHEDULE 1, the Company represents and warrants that it has not granted to any Person the right to request or require the Company to register any securities issued by the Company, other than the rights granted to the Designated Holders herein. The Company shall not enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Designated Holders in this Agreement or grant any additional registration rights to any Person or with respect to any securities which are not Registrable Securities which are prior in right to or inconsistent with the rights granted in this Agreement, except that the Company may grant the registration rights held by the General Atlantic Stockholders to any Subsequent General Atlantic Purchaser. (c) REMEDIES. The Designated Holders, in addition to being entitled to exercise all rights granted by law, including recovery of damages, shall be entitled to specific performance of their rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive in any action for specific performance the defense that a remedy at law would be adequate. (d) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless consented to in writing by (i) the Company, and (ii) the General Atlantic Stockholders holding Registrable Securities representing (after giving effect to any adjustments) at least a majority of the aggregate number of Registrable Securities owned by all of the General Atlantic Stockholders. Any such written consent shall be binding upon the 19 Company and all of the Designated Holders. Notwithstanding the first sentence of this Section 10(d), the Company, without the consent of any other party, may amend this Agreement to add any Subsequent General Atlantic Purchaser as a party to this Agreement as a General Atlantic Stockholder. (e) NOTICES. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be made by registered or certified first-class mail, return receipt requested, telecopier, courier service or personal delivery: (i) if to the Company: ProxyMed, Inc. 2555 Davie Rd., Suite 110 Fort Lauderdale, FL 33317 Telecopy: (954) 473-2341 Attention: Michael K. Hoover, Chief Executive Officer Rafael G. Rodriguez, In-House Counsel with a copy to: Holland & Knight LLP 701 Brickell Avenue, Suite 3000 Miami, FL 33131 Telecopy: (305) 789-7799 Attention: Steven Sonberg, Esq. (ii) if to GAP LP, GapStar or GAP Coinvestment: c/o General Atlantic Service Corporation 3 Pickwick Plaza Greenwich, CT 06830 Telecopy: (203) 622-8818 Attention: Matthew Nimetz with a copy to: Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, NY 10019-6064 Telecopy: (212) 757-3990 Attention: Douglas A. Cifu, Esq. 20 (iii) if to GmbH Coinvestment: c/o General Atlantic Partners GmbH Koenigsalle 88 40212 Duesseldorf Germany Telecopy: 011-49-211-602-888-89 Attention: with a copy to: General Atlantic Service Corporation 3 Pickwick Plaza Greenwich, CT 06830 Telecopy: (203) 622-8818 Attention: Matthew Nimetz Thomas J. Murphy and Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, NY 10019-6064 Telecopy: (212) 757-3990 Attention: Douglas A. Cifu, Esq. All such notices, demands and other communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial courier service; five (5) Business Days after being deposited in the mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged, if telecopied. Any party may by notice given in accordance with this Section 10(e) designate another address or Person for receipt of notices hereunder. (f) SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto as hereinafter provided. The Demand Registration rights and the Shelf Registration rights and related rights of the General Atlantic Stockholders contained in Sections 3 and 5 hereof, shall be (i) with respect to any Registrable Security that is transferred to an Affiliate of a General Atlantic Stockholder, automatically transferred to such Affiliate and (ii) with respect to any Registrable Security that is transferred in all cases to a non-Affiliate, transferred only with the consent of the Company which consent shall not be unreasonably withheld. The incidental or "piggy-back" registration rights of the Designated Holders contained in Sections 3(b), 4 and 5 hereof and the other rights of each of the Designated Holders with respect thereto shall be, with respect to any Registrable Security, automatically transferred to any Person who is the transferee of such Registrable Security. All of the obligations of the Company hereunder shall survive any such transfer. Except as provided in Section 8, no Person 21 other than the parties hereto and their successors and permitted assigns is intended to be a beneficiary of this Agreement. (g) COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (h) HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. (j) SEVERABILITY. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof. (k) RULES OF CONSTRUCTION. Unless the context otherwise requires, references to sections or subsections refer to sections or subsections of this Agreement. (l) ENTIRE AGREEMENT. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto with respect to the subject matter contained herein. There are no restrictions, promises, representations, warranties or undertakings with respect to the subject matter contained herein, other than those set forth or referred to herein. This Agreement supersedes all prior agreements and understandings among the parties with respect to such subject matter. (m) FURTHER ASSURANCES. Each of the parties shall execute such documents and perform such further acts as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement. (n) OTHER AGREEMENTS. Nothing contained in this Agreement shall be deemed to be a waiver of, or release from, any obligations any party hereto may have under, or any restrictions on the transfer of Registrable Securities or other securities of the Company imposed by, any other agreement including, but not limited to, the Stock Purchase Agreement or the Warrants. [Remainder of page intentionally left blank] 22 IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this Registration Rights Agreement on the date first written above. PROXYMED, INC. By: ---------------------------------------- Name: Title: GENERAL ATLANTIC PARTNERS 74, L.P. By: GENERAL ATLANTIC PARTNERS, LLC, its General Partner By: -------------------------------- Name: Title: GAP COINVESTMENT PARTNERS II, L.P. By: ---------------------------------------- Name: Title: GAPSTAR, LLC By: GENERAL ATLANTIC PARTNERS, LLC, its Managing Member By: -------------------------------- Name: Title: GAPCO GMBH & CO. KG By: GAPCO MANAGEMENT GMBH, its General Partner By: -------------------------------- Name: Title: A Managing Director Schedule 1 Investors who participated in the following transactions were given registration rights. Although all of the shares that are subject to registration have been registered under the appropriate SEC filing, in the unlikely event that any respective Form S-3 or Form S-8 is withdrawn or made ineffective, while such investors have securities registered thereunder, such investors have the right to have their affected securities re-registered under the applicable SEC form. 1. (Series B) Registration Rights Agreement dated December 23, 1999. 2. (Series B Warrant Exchange) Registration Rights Agreement dated April 24, 2001. 3. (Series C) Subscription Agreement dated June 6, 2000. 4. (Series C Warrant) Exchange Agreement dated August 15, 2001. 5. (Series C) Conversion Agreement dated December 13, 2001. 6. (Private Placement) Subscription Agreement dated December 21, 2001. 7. Registration Agreement dated December 31, 1998 (in connection with the acquisition of Key Communications Service, Inc. EX-99.1 6 g75168ex99-1.txt PRESS RELEASE EXHIBIT 99.1 (ProxyMed LOGO) COMPANY NEWS RELEASE FOR IMMEDIATE RELEASE CONTACTS: PROXYMED, INC. GENERAL ATLANTIC PARTNERS JUDSON E. SCHMID PAT HEDLEY CHIEF FINANCIAL OFFICER DIRECTOR MARKETING/COMMUNICATIONS 954-473-1001, EXT. 300 203-629-8658 INVESTORRELATIONS@PROXYMED.COM PHEDLEY@GAPARTNERS.COM PROXYMED ANNOUNCES $25 MILLION COMMON STOCK FINANCING - - FUNDING FROM GENERAL ATLANTIC PARTNERS STRENGTHENS BALANCE SHEET AND POSITIONS COMPANY FOR FUTURE GROWTH AND CONTINUED MARKET LEADERSHIP - FT. LAUDERDALE, FL. (BusinessWire) March 27, 2002 - ProxyMed, Inc. (Nasdaq: PILL), a leading provider of physician healthcare transaction processing services, announced today it has entered into a $25 million equity financing transaction with General Atlantic Partners, a leading global private equity investment firm focused exclusively on information technology businesses. The cash proceeds will substantially strengthen the Company's cash balance and facilitate an accelerated growth strategy, both internally and through acquisitions. In the financing, ProxyMed agreed to issue 1,569,366 shares of unregistered common stock at $15.93 per share, subject to customary closing conditions, with all proceeds being retained by the Company. The shares, along with 549,279 underlying common stock warrants exercisable at the same offering price, are subject to a one-year lock-up agreement. In connection with the transaction, Braden R. Kelly, Partner with General Atlantic Partners, will join the Company's Board of Directors, filling a current vacancy. "We are extremely pleased to have General Atlantic as a financial and strategic partner," said Michael K. Hoover, Chairman and Chief Executive Officer of ProxyMed. "This capital will help accelerate our growth strategy, both internally and externally, and enable us to more aggressively extend our products and services to our target market of small physician practices. Even more importantly, General Atlantic's involvement is an endorsement of our leadership position in the healthcare electronic connectivity market." "ProxyMed is uniquely positioned to capitalize on the compelling opportunity in physician office connectivity," said Braden R. Kelly, with General Atlantic. "ProxyMed is already a leader in each of their three target markets - connecting physician offices with payers, laboratories and pharmacies. We think the Company's experienced management team, industry leading service and proven ability to automate the small physician office provide a strong platform for accelerating future growth. We are very excited about ProxyMed's prospects and look forward to working with the Company." ABOUT GENERAL ATLANTIC General Atlantic Partners, LLC, is the world's leading private equity investment firm focused exclusively on investing in information technology businesses globally. The firm was founded in 1980 and has $4 billion in committed capital. General Atlantic has invested in over 120 companies and has current holdings in over 60 companies, of which almost one-third are based outside the United States and which include Critical Path, E*TRADE Group, Inc., Eclipsys, Exact, Exult, HEALTHvision, iFormation Group, Manugistics, Predictive Systems, ProBusiness, Rebus, Screaming Media, SESA, Tickets.com, Upromise, and Xchanging. The firm is distinguished within the investment community by its deep experience and expertise in information technology, its global perspective and worldwide presence, its long-term approach to investments, and its commitment to provide sustained strategic assistance for its portfolio companies. General Atlantic has about 70 professionals among its 130 employees worldwide with offices in Greenwich, New York, Palo Alto, Reston, London, Dusseldorf, Singapore, Tokyo, Hong Kong, and Sao Paulo. See WWW.GAPARTNERS.COM for additional information. ABOUT PROXYMED - WHERE HEALTHCARE CONNECTS(TM) ProxyMed solves the business problems of physician offices every day by automating their financial, administrative and clinical transactions with healthcare institutions. To facilitate these services, ProxyMed operates ProxyNet(R), its secure, proprietary national electronic information network, which provides physicians and other healthcare providers with direct connectivity to one of the industry's largest list of payers, the largest list of chain and independent pharmacies and the largest list of clinical laboratories. ProxyMed exceeds customer expectations through our expertise, proven methodologies and dedication to service excellence. More information on ProxyMed is available on its home page at HTTP://WWW.PROXYMED.COM. Note: THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS THAT REFLECT OUR CURRENT ASSUMPTIONS AND EXPECTATIONS REGARDING FUTURE EVENTS. WHILE THESE STATEMENTS REFLECT OUR CURRENT JUDGMENT, THEY ARE SUBJECT TO RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM PROJECTED RESULTS DUE TO A NUMBER OF FACTORS, INCLUDING, BUT NOT LIMITED TO THE SOUNDNESS OF OUR BUSINESS STRATEGIES RELATIVE TO THE PERCEIVED MARKET OPPORTUNITIES; OUR ABILITY TO SUCCESSFULLY DEVELOP, MARKET, SELL, CROSS-SELL, INSTALL AND UPGRADE OUR CLINICAL AND FINANCIAL TRANSACTION SERVICES AND APPLICATIONS TO CURRENT AND NEW PHYSICIANS, PAYERS, MEDICAL LABORATORIES AND PHARMACIES; OUR ABILITY TO COMPETE EFFECTIVELY ON PRICE AND SUPPORT SERVICES; OUR ASSESSMENT OF THE HEALTHCARE INDUSTRY'S NEED, DESIRE AND ABILITY TO BECOME TECHNOLOGY EFFICIENT; OUR ABILITY TO IDENTIFY SUITABLE ACQUISITION CANDIDATES; AND OUR ABILITY AND THAT OF OUR BUSINESS ASSOCIATES TO COMPLY WITH VARIOUS GOVERNMENT RULES REGARDING HEALTHCARE AND PATIENT PRIVACY. THESE AND OTHER RISK FACTORS ARE MORE FULLY DISCUSSED IN OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, WHICH WE STRONGLY URGE YOU TO READ. WE EXPRESSLY DISCLAIM ANY INTENT OR OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS. WHEN USED, THE WORDS "BELIEVES," "ESTIMATED," "EXPECTS," "ANTICIPATES," "MAY" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. 2 -----END PRIVACY-ENHANCED MESSAGE-----