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EXHIBIT 8.1
FORM OF KING & SPALDING TAX OPINION
[__________], 2000
InfoCure Corporation PracticeWorks, Inc.
1765 The Exchange 1765 The Exchange
Suite 200 Suite 500
Atlanta, Georgia 30339 Atlanta, Georgia 30339
Ladies and Gentlemen:
We have acted as counsel to InfoCure Corporation, a Delaware
corporation ("InfoCure"), in connection with (i) the proposed distribution (the
"Distribution") by InfoCure of all of the issued and outstanding stock of
PracticeWorks, Inc., a Delaware corporation ("PracticeWorks"), to the
stockholders of InfoCure and (ii) certain corporate restructuring transactions
to be undertaken by InfoCure and its subsidiaries in order to effect the
Distribution (the "Corporate Restructuring Transactions"). The Distribution and
the Corporate Restructuring Transactions will occur pursuant to the Agreement
and Plan of Distribution expected to be entered into by and between InfoCure
and PracticeWorks (the "Distribution Agreement"), which is attached hereto as
Exhibit A. InfoCure and PracticeWorks have requested our opinion as to the
proper treatment of the Distribution and certain of the Corporate Restructuring
Transactions for United States federal income tax purposes.
Unless the context requires otherwise, capitalized terms used in this
opinion letter and not otherwise defined herein shall have the meanings
ascribed to such terms in the Information Statement, which is contained in the
Registration Statement on Form 10 filed by PracticeWorks with the Securities
and Exchange Commission, as amended (the "Form 10").
FACTS AND ASSUMPTIONS RELIED UPON
In rendering the opinion expressed herein, we have examined such
documents as we have deemed appropriate, including (but not limited to) the
Form 10 and the reports incorporated by reference therein, the Distribution
Agreement, and the Tax Disaffiliation Agreement, the Transition Services
Agreement, the Employee Benefits Compensation and Allocation Agreement, the
Stock Incentive Plan, and the Indemnification Agreement, each of which is
expected to be entered into by and between InfoCure and PracticeWorks and
attached hereto as Exhibits B, C, D, E, and F hereto. In our examination of
documents, we have assumed, with your consent, that all documents submitted to
us are authentic originals, or if submitted as photocopies or telecopies, that
they faithfully reproduce the originals thereof, that all such
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InfoCure Corporation
PracticeWorks, Inc.
[__________], 2000
Page 2
documents have been or will be duly executed to the extent required, that all
representations and statements set forth in such documents are true and
correct, that any such representation or statement "to the best of the
knowledge and belief" of any person (or with similar qualification) is true and
correct without such qualification, and that all obligations imposed by any
such documents on the parties thereto have been or will be performed or
satisfied in accordance with their terms.
We also have obtained such additional information and representations
as we have deemed relevant and necessary through consultation with officers and
outside advisors of InfoCure and PracticeWorks, including representations made
by InfoCure in a letter to us dated [________] 2000 and by PracticeWorks in a
letter to us dated [_______], 2000 (collectively, the "Representation
Letters"). With your consent, we have reviewed and relied upon the statements
made and the conclusions reached in a letter to InfoCure from William Blair &
Company, L.L.C., dated [_______] (the "William Blair Letter"), regarding the
corporate business purposes for the Distribution. We have assumed, with your
consent, that the statements contained in the Representation Letters and the
William Blair Letter are true and correct in all respects on the date hereof
and will continue to be true and correct at the time of the Distribution.
Finally, we have assumed, again with your consent, that (1) during the
two-year period following the Distribution, no person or persons will acquire,
directly or indirectly, stock representing a 50-percent or greater interest in
InfoCure or PracticeWorks within the meaning of Section 355(e) of the Internal
Revenue Code of 1986, as amended (the "Code"), and (2) none of the corporate
acquisitions that were made by InfoCure at any time prior to the Distribution
were made as part of a plan or series of related transactions that include the
Distribution within the meaning of Section 355(e).
OPINION
Based upon and subject to the foregoing, we are of the opinion that,
although the matter is not free from doubt, (i) the contribution by InfoCure
Systems, Inc., a Georgia corporation ("ISI"), of certain assets and liabilities
to PracticeWorks in exchange for shares of common stock of PracticeWorks,
followed by the distribution of such shares to InfoCure, should be treated as a
reorganization within the meaning of Section 368(a)(1)(D) of the Code; (ii) the
contribution by InfoCure of the stock of Medical Dynamics, Inc. to
PracticeWorks in exchange for additional shares of PracticeWorks common stock
and all of the issued and outstanding shares of PracticeWorks Series A
Convertible Redeemable Preferred Stock ("PracticeWorks preferred stock"),
followed by InfoCure's distribution of such shares of PracticeWorks common and
preferred stock in the Distribution, should be treated as a reorganization
within the meaning of Section 368(a)(1)(D) of the Code; (iii) the Distribution
should be treated as a transaction to which Section 355 of the Code applies;
and (iv) the PracticeWorks common and preferred stock should be treated as
"qualified property" within the meaning of Sections 355(c)(2) and 361(c)(2) of
the Code. If the Distribution and the related Corporate Restructuring
Transactions are treated
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InfoCure Corporation
PracticeWorks, Inc.
[__________], 2000
Page 3
in accordance with the preceding sentence, the following U.S. federal income
tax consequences generally will apply:
- Except for any cash received in lieu of a fractional share of
PracticeWorks common stock, an InfoCure stockholder will not
recognize any income, gain or loss as a result of the receipt
of PracticeWorks common or preferred stock in the
Distribution.
- An InfoCure stockholder's holding period for shares of
PracticeWorks common stock received in the Distribution will
include the period for which that stockholder's shares of
InfoCure common stock were held. An InfoCure stockholder's
holding period for shares of PracticeWorks preferred stock
received in the Distribution will include the period for
which that stockholder's shares of InfoCure Series A
Convertible Redeemable Preferred Stock (the "InfoCure
preferred stock") were held.
- An InfoCure stockholder's tax basis for shares of
PracticeWorks common stock received in the Distribution will
be determined by allocating to shares of PracticeWorks common
stock, on the basis of the relative fair market values of
InfoCure common stock and PracticeWorks common stock at the
time of the Distribution, a portion of the stockholder's
basis in his or her shares of InfoCure common stock. The
InfoCure stockholder's basis in his or her shares of InfoCure
common stock will be decreased by the portion allocated to
the shares of PracticeWorks common stock. An InfoCure
stockholder's tax basis for shares of PracticeWorks preferred
stock received in the Distribution will be the same as that
stockholder's basis in the shares of InfoCure preferred stock
exchanged.
- The receipt of cash in lieu of a fractional share of
PracticeWorks common stock will be treated as a sale of the
fractional share, and a stockholder will recognize gain or
loss equal to the difference between the amount of cash
received and the stockholder's basis in the fractional share,
as determined above. The gain or loss will be long-term
capital gain or loss if the stockholder's holding period for
the fractional share, as determined above, is more than one
year.
- None of InfoCure, ISI, or PracticeWorks will recognize any
gain or loss in connection with the Distribution and the
Corporate Restructuring Transactions undertaken in connection
with the Distribution, other than deferred intercompany gains
and excess loss accounts, if any, that may be triggered as a
result of the Distribution or transactions undertaken in
connection with the Distribution.
Notwithstanding any other statement in this letter, no opinion is
expressed herein as to the tax consequences of the Distribution to special
classes of InfoCure stockholders, such as stockholders who acquired InfoCure
common or preferred stock by exercising employee stock
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InfoCure Corporation
PracticeWorks, Inc.
[__________], 2000
Page 4
options or otherwise as compensation or who do not hold their shares of
InfoCure common or preferred stock as a "capital asset" within the meaning of
Section 1221 of the Code.
The opinion expressed herein is based upon our analysis of the Code,
the U.S. Treasury regulations promulgated thereunder, administrative positions
of the Internal Revenue Service, and judicial decisions as of the date hereof
and represents our best legal judgment as to the matters addressed herein. Our
opinion, however, is not binding on the Internal Revenue Service or the courts.
Accordingly, no complete assurance can be given that the opinion expressed
herein, if contested, would be sustained by a court. Moreover, the authorities
upon which our opinion is based are subject to change, possibly on a
retroactive basis, and any such changes could adversely affect the opinion
rendered herein and the tax consequences of the Distribution and the related
Corporate Restructuring Transactions.
As noted above, our opinion is based solely on the documents that we
have examined, the additional information that we have obtained, the
assumptions that we have made, and the representations that have been made to
us. Our opinion cannot be relied upon if any of the facts contained in such
documents or in any such additional information is, or later becomes,
inaccurate or if any of the assumptions we have made is, or later becomes,
inaccurate.
We hereby consent to the filing of this opinion letter as an Exhibit
to the Form 10 and to the references to our firm in the Information Statement.
In giving such consent, we do not thereby admit that we are in the category of
persons whose consent is required under the federal securities laws. Except as
stated in this paragraph, this opinion letter may not be furnished to, quoted
in whole or in part, or relied upon by any person other than InfoCure or
PracticeWorks for any purpose without our prior written consent.
Finally, our opinion is limited to the United States federal income
tax matters specifically covered thereby, and we have not been asked to
address, nor have we addressed, any other federal, state, local, or foreign
income, estate, gift, transfer, sales, use, or other tax consequences that may
result from the Distribution or any other transaction, including any
transaction undertaken in connection with the Distribution.
Very truly yours,
