STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of
the 10th day of November, 1997, by and between QuadraMed Corporation, a Delaware
corporation (the "Purchaser"), and the seller indicated on the signature page
hereto (the "Seller"), which Seller is a stockholder of Medicus Systems
Corporation ("Medicus").
WHEREAS, the Purchaser and Medicus expect to enter into a
Merger Agreement simultaneously with the execution of this Agreement (the
"Merger Agreement") pursuant to which Medicus would be acquired by Purchaser
through a merger (the "Merger") of a wholly owned subsidiary of the Purchaser
into Medicus, and Medicus would become a wholly owned subsidiary of the
Purchaser; and
WHEREAS, Purchaser has offered to Seller and certain other
stockholders of Medicus to purchase their shares of Medicus common stock, par
value $.01 per share (the "Medicus Common Stock"), prior to the Merger on the
terms and conditions set forth herein; and
WHEREAS, Seller has agreed to sell shares of Medicus Common
Stock to Purchaser on the terms and conditions hereof.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Medicus Common Stock.
1.1 Sale of Medicus Common Stock.
(a) Subject to the terms and conditions of this Agreement, the Purchaser agrees
to purchase at the Closing and the Seller agrees to sell to the Purchaser at the
Closing an amount of shares (as indicated on the signature page hereto) of
Medicus Common Stock (the "Shares") for the aggregate Purchase Price set forth
in Section 1.1(b) below.
(b) The purchase price to be paid for each Share to be sold hereunder (the
"Purchase Price") shall be $7.50, in cash, without interest (the "Cash
Consideration"), together with a warrant (the "Warrant"), in the form attached
hereto as Appendix A, entitling Seller to acquire .3125 shares of QuadraMed
Common Stock for each share of Medicus Common Stock sold hereunder, on the terms
and conditions set forth therein.
(c) At the Closing (as defined below), the Seller shall deliver or cause to be
delivered to the Purchaser a certificate or certificates representing the Shares
(duly endorsed for transfer or accompanied by an executed stock power, medallion
guaranteed) which the Purchaser is purchasing against delivery to the Seller of
the aggregate Purchase Price for the Shares.
1.2 Closing. The purchase and sale of the Shares under Article 1.1 (the
"Closing") shall take place at 12:00 p.m. Chicago time on November 10, 1997 at
the offices of Xxxx, Xxxx & Xxxxx, Three First National Plaza, 00 Xxxx Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000, or as soon as possible as the
Seller, using Seller's best efforts, is able to deliver or cause to be delivered
to Purchaser a certificate or certificates representing the Shares as required
by Section 1.1(c) hereof.
2. Representations and Warranties of the Purchaser. The Purchaser represents and
warrants to the Seller as follows:
2.1 Organization, Standing and Power. Each of the Purchaser and its subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization. Each of Purchaser and its subsidiaries
has the corporate power to own its properties and to carry on its business as
now being conducted and is duly qualified to do business and is in good standing
in each jurisdiction in which the failure to be so qualified and in good
standing would have a Material Adverse Effect on Purchaser. Neither Purchaser
nor any of its subsidiaries is in violation of any of the provisions of its
Certificate of Incorporation or Bylaws or equivalent organizational documents.
Purchaser is the owner of all outstanding shares of capital stock of each of its
subsidiaries and all such shares are duly authorized, validly issued, fully paid
and nonassessable. All of the outstanding shares of capital stock of each such
subsidiary are owned by Purchaser free and clear of all liens, charges, claims
or encumbrances or rights of others. In this Agreement, any reference to any
event, change, condition or effect being "material" with respect to any entity
or group of entities means any material event, change, condition or effect
related to the condition (financial or otherwise), properties, assets (including
intangible assets), liabilities, business, operations or results of operations
of such entity or group of entities. In this Agreement, any reference to a
"Material Adverse Effect" with respect to any entity or group of entities means
any event, change or effect that is materially adverse to the condition
(financial or otherwise), properties, assets, liabilities, business, operations
or results of operations of such entity and its subsidiaries, taken as a whole.
2.2 Capital Structure. Except as described in this Section 2.2, the authorized
and outstanding capital stock of Purchaser is as set forth in the section
entitled "Description of Capital Stock" in the Purchaser's Prospectus dated
October 21, 1997 delivered to the Seller as a part of the Purchaser SEC
Documents (as defined in Section 2.4 hereof). There are no other outstanding
shares of capital stock or voting securities of Purchaser other than shares of
Purchaser Common Stock issued after October 21, 1997 upon the exercise of
options or warrants that were outstanding as of October 21, 1997. All
outstanding shares of Purchaser have been duly authorized, validly issued, fully
paid and are nonassessable and free of any liens or encumbrances other than any
liens or encumbrances created by or imposed upon the holders thereof.
2.3 Authority. Purchaser has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Purchaser. This Agreement has been duly executed
and delivered by Purchaser and constitutes the valid and binding obligations of
Purchaser. The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby will not, conflict with, or
result in any violation of, or default under (with or without notice or lapse of
time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under (i) any provision of
the Certificate of Incorporation or Bylaws of Purchaser or any of its
subsidiaries, as amended, or (ii) any material contract or other agreement or
instrument, or any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Purchaser or any of its subsidiaries or their
properties or assets, except where such conflict, violation, default,
termination, cancellation or acceleration with respect to the foregoing
provisions would not result in a Material Adverse Effect on Purchaser. No
consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Entity, is required by or with respect to
Purchaser or any of its subsidiaries in connection with the execution and
delivery of this Agreement by Purchaser or the consummation by Purchaser of the
transactions contemplated hereby, except for (i) any filings as may be required
under applicable federal and state securities laws and the securities laws of
any foreign country, (ii) the filing with the Nasdaq National Market of a
Notification Form for Listing of Additional Shares with respect to the shares of
Common Stock of the Purchaser issuable upon exercise of the Warrant, and (iii)
such other consents, authorizations, filings, approvals and registrations which,
if not obtained or made, would not have a Material Adverse Effect on Purchaser
and would not prevent or materially alter or delay any of the transactions
contemplated by this Agreement.
2.4 SEC Documents; Financial Statements. Purchaser has delivered to Seller a
copy of the following documents of the Purchaser: (1) the Purchaser's Prospectus
dated October 21, 1997, (2) a draft of Purchaser's Form 10-Q for the quarter
ended September 30, 1997, (3) the Purchaser's Annual Report on Form 10-K for the
year ended December 31, 1996, (4) the Purchaser's 1996 Annual Report to
Stockholders and (5) the Purchaser's Proxy Statement for the 1997 Annual Meeting
of Stockholders (collectively, the "Purchaser SEC Documents"). As of their
respective filing dates, the Purchaser SEC Documents, with the exception of the
draft Form 10-Q for the quarter ended September 30, 1997, which has yet to be
filed with the Securities and Exchange Commission ("SEC"), complied in all
material respects with the requirements of the Securities Act of 1933 (the
"Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act"),
and none of the Purchaser SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
in which they were made, not misleading. The financial statements of Purchaser,
including the notes thereto, included in the Purchaser SEC Documents (the
"Purchaser Financial Statements") were complete and correct in all material
respects as of their respective dates, complied as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto as of their respective dates,
and have been prepared in accordance with generally accepted accounting
principles applied on a basis consistent throughout the periods indicated and
consistent with each other (except as may be indicated in the notes thereto or,
in the case of unaudited statements included in Quarterly Reports on Form 10-Q,
as permitted by Form 10-Q of the SEC). The Purchaser Financial Statements fairly
present the consolidated financial condition and operating results of Purchaser
and its subsidiaries at the dates and during the periods indicated therein
(subject, in the case of unaudited statements, to normal, recurring year-end
adjustments). There has been no material change in Purchaser's accounting
policies except as described in the notes to the Purchaser Financial Statements.
2.5 Absence of Certain Changes. Since June 30, 1997 (the "Purchaser Balance
Sheet Date"), Purchaser has conducted its business in the ordinary course
consistent with past practice and there has not occurred: (i) any change, event
or condition (whether or not covered by insurance) that has resulted in a
Material Adverse Effect to Purchaser; (ii) any acquisition, sale or transfer of
any material asset of Purchaser or any of its subsidiaries other than in the
ordinary course of business and consistent with past practice; (iii) any
material change in accounting methods or practices (including any change in
depreciation or amortization policies or rates) by Purchaser or any revaluation
by Purchaser of any of its assets; (iv) any declaration, setting aside, or
payment of a dividend or other distribution with respect to the shares of
Purchaser, or any direct or indirect redemption, purchase or other acquisition
by Purchaser of any of its shares of capital stock; or (v) any negotiation or
agreement by Purchaser or any of its subsidiaries to do any of the things
described in the preceding clauses (i) through (iv) (other than negotiations
regarding the transactions contemplated by this Agreement).
2.6 Absence of Undisclosed Liabilities. Purchaser has no material obligations or
liabilities of any nature (matured or unmatured, fixed or contingent) other than
(i) those set forth or adequately provided for in the Balance Sheet included in
Purchaser's Quarterly Report on Form 10-Q for the period ended June 30, 1997
included in the Purchaser SEC Documents (the "Purchaser Balance Sheet"), (ii)
those incurred in the ordinary course of business and not required to be set
forth in the Purchaser Balance Sheet under generally accepted accounting
principles, and (iii) those incurred in the ordinary course of business since
the Purchaser Balance Sheet Date and consistent with past practice.
2.7 Litigation. There is no private or governmental action, suit, proceeding,
claim, arbitration or investigation pending before any agency, court or
tribunal, foreign or domestic, or, to the knowledge of Purchaser or any of its
subsidiaries, threatened against Purchaser or any of its subsidiaries or any of
their respective properties or any of their respective officers or directors (in
their capacities as such) that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on Purchaser. There is
no judgment, decree or order against Purchaser or any of its subsidiaries or, to
the knowledge of Purchaser or any of its subsidiaries, any of their respective
directors or officers (in their capacities as such) that could prevent, enjoin,
alter or materially delay any of the transactions contemplated by this
Agreement, or that could reasonably be expected to have a Material Adverse
Effect on Purchaser.
2.8 Compliance With Laws. Each of Purchaser and its subsidiaries has complied
with, is not in violation of, and has not received any notices of violation with
respect to, any federal, state, local or foreign statute, law or regulation with
respect to the conduct of its business, or the ownership or operation of its
business, except for such violations or failures to comply as could not be
reasonably expected to have a Material Adverse Effect on Purchaser.
2.9 Complete Copies of Materials. Purchaser has delivered or made available true
and complete copies of each document which has been requested by Seller in
connection with Seller's legal and financial review of Purchaser and its
subsidiaries.
2.10 Execution of Merger Agreement. Purchaser and Medicus have executed the
Merger Agreement simultaneous with the execution of this Agreement.
3. Representations and Warranties of the Seller. The Seller hereby represents
and warrants that:
3.1 Valid Title. Seller now has and at the Closing Date will have good and
marketable title to the Shares to be sold by the Seller, free and clear of any
liens, encumbrances, equities and claims, and full right, power and authority to
effect the sale and delivery of such Shares; and upon the delivery of, against
payment for, the Shares pursuant to this Agreement, the Purchaser will acquire
good and marketable title thereto, free and clear of any liens, encumbrances
equities and claims.
3.2 Authorization. Seller has full right, power and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement. The
execution and delivery of this Agreement and the consummation by Seller of the
transactions herein contemplated and the fulfillment by Seller of the terms
hereof will not require any consent, approval, authorization, or other order of
any court, regulatory body, administrative agency or other governmental body and
will not result in a breach of any of the terms and provisions of, or constitute
a default under, organizational documents of such Seller, if not an individual,
or any indenture, mortgage, deed of trust or other agreement or instrument to
which such Seller is a party, or of any order, rule or regulation applicable to
Seller of any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction.
3.3 Purchase Entirely for Own Account. This Agreement is made with Seller in
reliance upon Seller's representation to the Purchaser, which by Seller's
execution of this Agreement Seller hereby confirms, that the Warrant to be
acquired by Seller will be acquired for investment for Seller's own account, not
as a nominee or agent, and not with a view to the resale or distribution of any
part thereof, and that Seller has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, Seller further represents that Seller does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to the
Warrant.
3.4 Reliance upon Seller Representations. Seller understands that the Warrant is
not registered under the Securities Act on the ground that the sale provided for
in this Agreement and the issuance of securities hereunder is exempt from
registration under the Securities Act pursuant to section 4(2) thereof, and that
the Purchaser's reliance on such exemption is predicated on the Seller's
representations set forth herein.
3.5 Receipt of Information. Seller believes it has received all the information
it considers necessary or appropriate for deciding whether to purchase the
Warrant. Seller further represents that it has had an opportunity to ask
questions and receive answers from the Purchaser regarding the terms and
conditions of the offering of the Warrant and the business, properties,
prospects and financial condition of the Purchaser and to obtain additional
information (to the extent the Purchaser possessed such information or could
acquire it without unreasonable effort or expense) necessary to verify the
accuracy of any information furnished to it or to which it had access. The
foregoing, however, does not limit or modify the representations and warranties
of the Purchaser in Section 2 of this Agreement or the right of the Seller to
rely thereon.
3.6 Investment Experience. Seller represents that it is experienced in
evaluating and investing in securities of companies similar to the Purchaser and
acknowledges that it is able to fend for itself, can bear the economic risk of
its investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Warrant. If other than an individual, Seller also represents it has not
been organized for the purpose of acquiring the Warrant.
3.7 Accredited Investor. Seller represents to the Purchaser that the Seller is
an "Accredited Investor" within the meaning of SEC Rule 501 of Regulation D, as
presently in effect.
3.8 Restricted Securities. Seller understands that the Warrant may not be sold,
transferred, or otherwise disposed of without registration under the Securities
Act or an exemption therefrom, and that in the absence of an effective
registration statement covering the Warrant or an available exemption from
registration under the Securities Act, the Warrant must be held indefinitely.
3.9 Legends. To the extent applicable, each certificate or other document
evidencing the Warrant shall be endorsed with the legend set forth below, and
Seller covenants that, except to the extent such restrictions are waived by the
Purchaser, Seller shall not transfer the shares represented by any such
certificate without complying with the restrictions on transfer described in the
legend endorsed on such certificate:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, OR HYPOTHECATED OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR UNLESS THE COMPANY HAS RECEIVED
AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS
NOT REQUIRED."
3.10 Proxy. Seller has executed and delivered to Purchaser a Proxy in the form
attached hereto as Appendix B for the Shares granting Purchaser a proxy to vote
the Shares purchased by the Purchaser hereunder.
4. Conditions of Seller's Obligations at Closing. The obligations of Seller
under subparagraph 1.1 of this Agreement are subject to the fulfillment on or
before the Closing of each of the following conditions:
4.1 Representations and Warranties. The representations and warranties of the
Purchaser contained in Section 2 shall be true on and as of the Closing Date
with the same effect as though such representations and warranties had been made
on and as of the Closing Date.
4.2 Performance. The Purchaser shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing Date.
4.3 Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated at the Closing and all documents incident
thereto shall be reasonably satisfactory in form and substance to the Seller.
4.4 Payment of Purchase Price. Purchaser shall have delivered the Purchase Price
specified in Section 1.1.
5. Conditions of the Purchaser's Obligations at Closing. The obligations of the
Purchaser to Seller under this Agreement are subject to the fulfillment on or
before the Closing of each of the following conditions by Seller:
5.1 Representations and Warranties. The representations and warranties of the
Seller contained in Section 3 shall be true on and as of the Closing Date with
the same effect as though such representations and warranties had been made on
and as of the Closing Date.
5.2 Delivery of Medicus Common Stock. Seller shall have delivered all documents
and instruments required to be delivered under Section 1.1 hereof.
6. Miscellaneous.
6.1 Entire Agreement. This Agreement and the documents referred to herein
constitute the entire agreement among the parties concerning the subject matter
hereof and no party shall be liable or bound to any other party in any manner by
any warranties, representations, or covenants except as specifically set forth
herein or therein.
6.2 Survival of Warranties. The representations and warranties of the Purchaser
and Seller contained in or made pursuant to this Agreement shall survive until
the Effective Time of the Merger (as defined in the Merger Agreement).
6.3 Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective heirs, legal representatives, successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective heirs, legal
representatives, successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
6.4 Governing Law. This Agreement shall be governed by and construed under the
laws of the State of Delaware.
6.5 Counterparts; Facsimile Signatures. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile signatures of
the parties to this Agreement shall be sufficient to evidence their execution
hereof.
6.6 Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
6.7 Notices. Unless otherwise provided, any notice required or permitted under
this Agreement shall be given in writing and shall be deemed effectively given
upon personal delivery to the party to be notified by hand or professional
courier service or on the day of delivery by Federal Express, by registered or
certified mail, postage prepaid and addressed to the party to be notified at the
address indicated for such party on the signature page hereof, or at such other
address as such party may designate by ten (10) days' advance written notice to
the other parties.
6.8 Expenses. Irrespective of whether the Closing is effected, each party shall
pay its own costs and expenses that it incurs with respect to the negotiation,
execution, delivery and performance of this Agreement.
6.9 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the parties hereto. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
securities purchased under this Agreement at the time outstanding (including
securities into which such securities have been converted), each future holder
of all such securities, and the Purchaser.
6.10 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
QUADRAMED CORPORATION
By: ____________________________________
Name:
Title:
SELLER SELLER
(if an individual) (if a corporation, partnership, trust or
ther entity)
___________________________________ By: ______________________________
Name:______________________________ Name of Entity:___________________
Address: __________________________ Name of Signatory:________________
____________________________ Title of Signatory: _____________
Address:__________________________
Total Number of Shares of
Medicus Common Stock owned by Seller: ____________________________
Number of Shares of
Medicus Common Stock to be sold hereunder: _______________________
