Exhibit II
EXECUTION COPY
ACQUISITION AGREEMENT AND PLAN OF MERGER
BY AND AMONG
QUADRAMED CORPORATION,
RH ACQUISITION CO.
AND
FA ACQUISITION CO.,
ON THE ONE HAND
AND
RESOURCE HEALTH PARTNERS, L.P.,
RESOURCE HOLDINGS, LTD.
AND
FRA ACQUISITION INC.,
ON THE OTHER HAND
DATED
DECEMBER 29, 1997
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS 1
1.1. "AAA" 1
1.2. "Advisory Committee" 1
1.3. "Affiliate" 1
1.4. "Agreement" 2
1.5. "Arbitrator" 2
1.6. "Articles of Merger" 2
1.7. "Certificates of Merger" 2
1.8. "Closing" 2
1.9. "Closing Consideration A" 2
1.10. "Closing Consideration X" 0
1.11. "Closing Considerations" 2
1.12. "Code" 2
1.13. "Company" 2
1.14. "Company Advisors" 2
1.15. "Company Disclosure Schedule" 2
1.16. "Company Financial Statements" 2
1.17. "Confidentiality Agreement" 3
1.18. "Contract" 3
1.19. "Daily Price" 3
1.20. "DGCL" 3
1.21. "Effective Time" 3
1.22. "Employee Benefit Plan(s)" 3
1.23. "Encumbrances" 3
1.24. "Environmental Law" 3
1.25. "ERISA" 3
1.26. "Exchange Act" 3
1.27. "Escrow Agent" 3
1.28. "Escrow Agreement" 4
1.29. "Escrow Shares" 4
1.30. "Fair Market Value" 4
1.31. "FRA" 4
1.32. "FRA Common Stock" 4
1.33. "General Partner" 4
1.34. "Government Communications" 4
1.35. "Hazardous Substance(s)" 4
1.36. "Indemnified Person" 4
1.37. "Indemnifying Person" 4
1.38. "Intellectual Property" 4
1.39. "IRS" 4
1.40. "Investment Representation Letter" 4
1.41. "Licenses" 5
1.42. "Loss(es)" 5
1.43. "Material Adverse Effect" 5
1.44. "Merger Subs" 5
1.45. "Mergers" 5
1.46. "Notice of Superior Proposal" 5
1.47. "Partner(s)" 5
1.48. "Partnership Interests" 5
1.49. "Permitted Encumbrance" 5
1.50. "Person" 5
1.51. "QuadraMed" 5
1.52. "QuadraMed Balance Sheet" 5
1.53. "QuadraMed Balance Sheet Date" 5
1.54. "QuadraMed Common Stock" 5
1.55. "QuadraMed Disclosure Schedule" 5
1.56. "QuadraMed Indemnified Person(s)" 6
1.57. "QuadraMed SEC Filings" 6
1.58. "QuadraMed Shares" 6
1.59. "QuadraMed Stock Value" 6
1.60. "QuadraMed Survival Period" 6
1.61. "Real Property" 6
1.62. "Real Property Leases" 6
1.63. "Registration Rights Agreement" 6
1.64. "Resource Holdings" 6
1.65. "Resource Holdings Common Stock" 6
1.66. "RHP" 6
1.67. "RHP General Partnership Interest" 6
1.68. "RHP Limited Partnership Agreement" 6
1.69. "RHP Limited Partnership Interests" 6
1.70. "RHP Survival Period" 6
1.71. "Rule 144" 7
1.72. "SEC" 7
1.73. "Securities Act" 7
1.74. "Software" 7
1.75. "Sub A" 7
1.76. "Sub A Certificate of Merger" 7
1.77. "Sub A Common Stock" 7
1.78. "Sub X" 0
1.79. "Sub B Certificate of Merger" 7
1.80. "Sub B Common Stock" 7
1.81. "Sub B Merger Agreement" 7
1.82. "Subsidiary" and "Subsidiaries" 7
1.83. "Superior Proposal" 7
1.84. "Surviving Corporation A" 7
1.85. "Surviving Corporation X" 0
1.86. "Tax(es)" 8
1.87. "Tax Return(s)" 8
1.88. "Third Party" 8
1.89. "Third Party Acquisition" 8
1.90. "Threshold Amount" 8
ARTICLE II. THE MERGERS 8
2.1. The Mergers 8
2.2. Execution and Filing of Articles and
Certificates of Merger 9
2.3. Effect of the Mergers 9
2.4. Articles or Certificate of Incorporation;
Bylaws 10
2.5. Directors 10
2.6. Officers 10
2.7. Effect on Capital Stock 10
2.8. Closing 11
2.9. Delivery of Certificates 12
2.10. Escrow. 12
2.11. Tax Consequences 12
2.12. Pooling of Interests 12
2.13. Private Placement 12
2.14. Payment of Certain Fees and Expenses 12
2.15. Assignment of RHP Assets and Assumption of RHP
Liabilities 12
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY 13
3.1. Organization and Good Standing of RHP
and Subsidiaries 13
3.2. Limited Partnership Agreement, Charter and
Bylaws 13
3.3. Corporate Minutes 13
3.4. Qualifications to Do Business 13
3.5. Capitalization of Subsidiaries 13
3.6. Ownership of RHP Partnership Interests 14
3.7. RHP Assets and Liabilities; Subsidiaries
and Other Affiliates 14
3.8. Equity Ownership of Subsidiaries 14
3.9. Authority 14
3.10. Company Financial Statements 15
3.11. Undisclosed Liabilities 15
3.12. Absence of Certain Changes 16
3.13. Assets 17
3.14. Real Property Matters 18
3.15. Intellectual Property 18
3.16. Proprietary Information of Third Parties 19
3.17. Software 19
3.18. Tax Matters 20
3.19. Legal and Regulatory Matters 22
3.20. Employees 22
3.21. Xxxxxxxx 22
3.22. Insurance 22
3.23. Personnel 23
3.24. Employee Benefit Plan(s) 23
3.25. Compliance with Environmental Laws 23
3.26. Bank and Brokerage Accounts 24
3.27. Contracts 24
3.28. Material Misstatements or Omissions 25
3.29. Broker's, Finders or Other Transaction Fees 25
3.30. Customers and Suppliers 25
3.31. Investment Representations of XXX 00
ARTICLE IV. COVENANTS OF XXX 00
4.1. Conduct of Company's Business 26
4.2. Access and Information 28
4.3. Further Efforts 29
4.4. Confidentiality 29
4.5. Subsequent Events 29
4.6. Public Announcement 29
4.7. Exclusive Dealing 29
4.8. Restrictions on Transferability of QuadraMed
Shares, Compliance with Securities Act 30
4.9. Third Party Acquisitions 31
4.10. Pooling of Interests 32
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF QUADRAMED,
SUB A AND SUB B 32
5.1. Organization and Good Standing 33
5.2. Capitalization of QuadraMed, Sub A
and Sub B 33
5.3. Authority 34
5.4. QuadraMed Shares 35
5.5. QuadraMed SEC Filings 35
5.6. Absence of Certain Changes 35
5.7. Absence of Undisclosed Liabilities 35
5.8. Restrictions on Business Activities 36
5.9. Legal and Regulatory Matters 36
5.10. Broker's Fees 36
5.11. Material Misstatements or Omissions 36
5.12. Eligibility to Use Form S-3 37
ARTICLE VI. COVENANTS OF QUADRAMED, SUB A AND SUB B 37
6.1. Conduct of QuadraMed's Business 37
6.2. Further Efforts 38
6.3. Confidentiality 38
6.4. Public Announcement 38
6.5. Benefits for Retained Employees 38
6.6. Subsequent Events 39
6.7. Treatment of Mergers as Reorganization 39
ARTICLE VII. GENERAL CONDITIONS PRECEDENT 39
7.1. No Injunctions 39
7.2. No Governmental Proceedings 39
7.3. Governmental Approvals 39
7.4. Escrow Agreement 40
7.5. Simultaneous Mergers 40
ARTICLE VIII. CONDITIONS PRECEDENT TO QUADRAMED'S,
SUB A'S AND SUB B'S OBLIGATIONS TO CLOSE 40
8.1. Certificates of XXX 00
8.2. No Material Adverse Effect 40
8.3. Legal Opinion of RHP's Counsel 40
8.4. Certified Resolutions 40
8.5. Employment Agreements 41
8.6. Proceedings Satisfactory to Counsel 41
ARTICLE IX CONDITIONS PRECEDENT TO RHP'S OBLIGATIONS
TO CLOSE 41
9.1. Certificates of QuadraMed, Sub A and Sub B 41
9.2. Certified Resolutions 41
9.3. Legal Opinion 42
9.4. Registration Rights Agreement 42
9.5. Employment Agreements 42
9.6. Closing Considerations and Expenses 42
9.7. Proceedings Satisfactory to Counsel 42
ARTICLE X. SURVIVAL OF REPRESENTATIONS AND
INDEMNIFICATIONS 42
10.1. Survival of Representations, Etc. 42
10.2. Indemnification by XXX 00
10.3. Indemnification by QuadraMed, Sub A
and Sub B 44
10.4. Procedure for Indemnification of Claims 44
10.5. Settlement or Compromise 45
10.6. Third Party Claims 45
10.7. Certificate of Incorporation and Bylaws 46
10.8. Exclusivity 46
ARTICLE XI. TERMINATION 46
11.1. Termination 46
11.2. Effect of Termination 47
11.3. Certain Payments 48
11.4. Waiver of Conditions 48
11.5. Payment of Expenses 48
ARTICLE XII. GENERAL 48
12.1. Arbitration 48
12.2. Amendments 49
12.3. Assignment 49
12.4. Notices 50
12.5. Further Assurances/Access 51
12.6. Entire Agreement 51
12.7. Counterparts; Facsimile 51
12.8. Governing Law 51
EXHIBITS
Exhibit "A" Escrow Agreement
Exhibit "B" Registration Rights Agreement
Exhibit "C" Sub A Certificate of Merger
Exhibit "D" Sub B Certificate of Merger
Exhibit "E" Sub A Merger Agreement
Exhibit "F" Assignment and Assumption Agreement
Exhibit "G" Investment Representation Letter
Exhibit "H" Opinion of Proskauer Rose LLP
Exhibit "I" Opinion of Pennsylvania counsel
Exhibit "J" Employment Agreements
Exhibit "K" Opinion of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
SCHEDULES
RHP Schedules
Schedule 3.3 Corporate Minutes
Schedule 3.4 Qualifications to Do Business
Schedule 3.5 Capitalization of Subsidiaries
Schedule 3.6 Ownership of RHP Partnership Interests
Schedule 3.7 RHP Assets and Liabilities; Subsidiaries
and Other Affiliates
Schedule 3.8 Equity Ownership of Subsidiaries
Schedule 3.9(a) Authority
Schedule 3.10 Company Financial Statements
Schedule 3.11 Undisclosed Liabilities
Schedule 3.12 Absence of Certain Changes
Schedule 3.13(a) Assets
Schedule 3.13(a)(i) Permitted Encumbrances
Schedule 3.14 Real Property
Schedule 3.15 Intellectual Property
Schedule 3.17 Software
Schedule 3.18(a) Tax Matters
Schedule 3.18(b) Threatened or Pending Tax Claims
Schedule 3.18(c) Tax Returns
Schedule 3.18(e) States for Tax Returns
Schedule 3.18(g) Waivers or Consents
Schedule 3.18(h) Tax Rulings or Agreements
Schedule 3.18(i) Consolidated Tax Returns
Schedule 3.18(k) Joint Venture/Partnership Agreements
Schedule 3.18(l) Accounting Method Adjustments
Schedule 3.19 Litigation
Schedule 3.22 Insurance
Schedule 3.24 Employee Benefit Plan(s)
Schedule 3.25 Compliance with Environmental Laws
Schedule 3.26 Bank and Brokerage Accounts
Schedule 3.27(a) Contracts
Schedule 3.27(b) Validity of Contracts
Schedule 3.29 Broker's, Finder's or Other Transaction
Fees
QuadraMed Schedules
Schedule 5.2 Capitalization
Schedule 5.6 Absence of Certain Changes
Schedule 5.7 Absence of Undisclosed Liabilities
ACQUISITION AGREEMENT AND PLAN OF MERGER
This Acquisition Agreement and Plan of Merger is entered
into as of December 29, 1997, by and among QuadraMed Corporation,
a Delaware corporation ("QuadraMed"), RH Acquisition Co. ("Sub
A") and FA Acquisition Co. ("Sub B" and together with Sub A, the
"Merger Subs") on the one hand, and Resource Health Partners,
L.P., a Delaware limited partnership ("RHP"), Resource Holdings,
Ltd., a Pennsylvania corporation ("Resource Holdings") and FRA
Acquisition Inc., a Delaware corporation ("FRA") on the other
hand.
WHEREAS, the Boards of Directors of QuadraMed and Merger
Subs, the Advisory Committee of RHP (the "Advisory Committee"),
the General Partner of RHP and the Boards of Directors of
Resource Holdings and FRA believe that it is in their respective
best interests for QuadraMed to acquire the business of RHP on
the terms set forth herein, and have each approved such
acquisition by means of (i) a merger of Sub A with and into
Resource Holdings pursuant to the terms of this Agreement (the
"Sub A Merger") and (ii) a merger of Sub B with and into FRA
pursuant to the terms of this Agreement (the "Sub B Merger,"
together with the Sub A Merger, the "Mergers"), with the Mergers
to be accomplished on a tax-deferred basis pursuant to Sections
368(a)(1)(A) and 368(a)(2)(E) of the Code (as defined below) and
on a pooling-of-interests basis.
WHEREAS, the parties hereto desire to make certain
representations, warranties and agreements in connection with the
Mergers and also to prescribe certain conditions to the Mergers.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are acknowledged by each
signatory hereto, it is agreed as follows:
ARTICLE I.
DEFINITIONS
As used in this Agreement, the following terms shall have
the following meanings:
1.1. "AAA" shall have the meaning specified in Section
12.1(a).
1.2. "Advisory Committee" shall have the meaning specified
in the preamble hereto.
1.3. "Affiliate" shall mean any Person directly or
indirectly controlled by, controlling or under common control of
any other Person.
1.4. "Agreement" shall mean this Acquisition Agreement and
Plan of Merger, including the exhibits and schedules referred to
herein.
1.5. "Arbitrator" shall have the meaning specified in
Section 12.1(a).
1.6. "Articles of Merger" shall mean the Articles of Merger
to be filed in connection with Sub A Merger.
1.7. "Certificates of Merger" shall refer to the Articles of
Merger, the Sub A Certificate of Merger and the Sub B Certificate
of Merger.
1.8. "Closing" shall mean the closing of the transactions
contemplated in this Agreement.
1.9. "Closing Consideration A" shall have the meaning
specified in Section 2.7(a)(i).
1.10. "Closing Consideration B" shall have the meaning
specified in Section 2.(b)(i).
1.11. "Closing Considerations" shall mean the sum of
Closing Consideration A and Closing Consideration B.
1.12. "Code" shall mean the Internal Revenue Code of
1986, as amended.
1.13. "Company" shall refer collectively to RHP and all
of RHP's Subsidiaries.
1.14. "Company Advisors" shall refer collectively to
RHP's financial advisor or any other investment banker and any
attorney or accountant retained by RHP.
1.15. "Company Disclosure Schedule" shall have the
meaning specified in Article III.
1.16. "Company Financial Statements" shall mean (i) the
audited consolidated balance sheet of FRA and its consolidated
subsidiaries as of December 31, 1996 and the related consolidated
statements of operations, shareholder's equity and cash flows for
the year then ended, as reported upon by Deloitte & Touche LLP,
independent certified public accountants to FRA, including notes
thereto, and the unaudited consolidated balance sheet of FRA and
its consolidated subsidiaries as of October 31, 1997, and the
related consolidated statements of operations, shareholder's
equity and cash flows for the ten (10) month period then ended
(without footnotes); and (ii) the unaudited consolidated balance
sheets of Resource Holdings and its consolidated subsidiaries as
of October 31, 1996 and the related consolidated statements of
operations, stockholder's equity and cash flows for the year then
ended as reviewed by Xxxxxxx, Xxxxx & Xxxxx Ltd., independent
certified public accountants to Resource Holdings, and the
unaudited unconsolidated balance sheets of each of Resource
Holdings and Healthcare Research Affiliates, Inc. as of October
31, 1997 and the related statements of operations for the year
then ended (without footnotes).
1.17. "Confidentiality Agreement" shall mean that
agreement by and among QuadraMed and RHP, dated as of July 16,
1997.
1.18. "Contract" shall mean any existing written or oral
contract, lease, indenture, mortgage, note, bond, instrument,
license or other agreement.
1.19. "Daily Price" of the QuadraMed Shares shall mean
the last reported sales price on such day reported by the
National Association of Securities Dealers, Inc. Automated
Quotation System.
1.20. "DGCL" shall mean the Delaware General Corporation
Law.
1.21. "Effective Time" shall mean the date and time the
Certificates of Merger are filed with the Delaware Secretary of
State (in the case of Sub B Merger) and the Pennsylvania
Secretary of State (in the case of Sub A Merger).
1.22. "Employee Benefit Plan(s)" shall mean any
"employee benefit plan" as defined in Section 3(3) of ERISA and
any other plan, policy, program, practice or arrangement
providing compensation or other benefits to any current or former
officer or employee of the Company or any beneficiary or
dependent thereof that is or was maintained by the Company within
the past five (5) years.
1.23. "Encumbrances" shall mean any mortgage, chattel
mortgage, conditional sales contract, pledge, lien, security
interest, encumbrance, easement or similar interest.
1.24. "Environmental Law" shall mean all applicable
federal, state and local laws, statutes, common law duties,
rules, regulations, ordinances and codes, together with all
administrative orders, directives, licenses, authorizations,
permits and agreements with RHP issued or signed by any federal,
state or local government authority that are currently in effect
and relate to the environment, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Clean Water Act of 1977, the Clean Air Act, the
Resource Conservation and Recovery Act of 1976, the Federal
Insecticide, Fungicide and Rodenticide Act, the Toxic Substances
Control Act, the Emergency Planning and Community Right-to-Know
Act of 1986 and the Safe Drinking Water Act, all as amended, and
any state and local counterparts to such acts as exist at the
time of Closing.
1.25. "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.26. "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
1.27. "Escrow Agent" shall mean State Street Bank &
Trust Company.
1.28. "Escrow Agreement" shall mean the Escrow
Agreement, in substantially in the form attached hereto as
Exhibit A and incorporated herein by this reference (the "Escrow
Agreement").
1.29. "Escrow Shares" shall have the meaning specified
in Section 2.9.
1.30. "Fair Market Value" with respect to each of the
QuadraMed Shares shall mean the average of the Daily Price per
share of the QuadraMed Shares (adjusted for any stock splits or
other reclassifications during the applicable time period) for
the twenty (20) consecutive trading days immediately preceding
the second business day prior to the Closing.
1.31. "FRA" shall have the meaning specified in the
preamble hereto.
1.32. "FRA Common Stock" shall have the meaning
specified in Section 2.7(b).
1.33. "General Partner" shall mean RHP GP, L.P.
1.34. "Government Communications" shall mean all written
inspection reports, complaints and other notices received by the
Company from government and regulatory agencies and authorities.
1.35. "Hazardous Substance(s)" shall mean: (i) any
substance, the presence of which requires investigation or
remediation under any Environmental Law or under common law; (ii)
any toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous
substance which is regulated by any Environmental Law; and (iii)
radon, ureaformaldehyde, polychlorinated biphenyls, friable
asbestos or friable asbestos-containing materials, petroleum and
petroleum products in concentrations or quantities which are
regulated under the Environmental Laws.
1.36. "Indemnified Person" shall have the meaning
specified in Section 10.4.
1.37. "Indemnifying Person" shall have the meaning
specified in Section 10.4.
1.38. "Intellectual Property" shall have the meaning
specified in Section 3.15 of this Agreement.
1.39. "IRS" shall mean the United States Internal
Revenue Service or any successor entity.
1.40. "Investment Representation Letter" shall have the
meaning specified in Section 4.8(d).
1.41. "Licenses" shall mean all material governmental
licenses, permits, approvals and registrations necessary for the
ownership of the Company properties and the conduct of its
business as currently conducted.
1.42. "Loss(es)" shall have the meaning specified in
Section 10.2(a).
1.43. "Material Adverse Effect" shall mean a material
adverse effect on the business, assets, properties, operations or
financial condition of RHP and the Subsidiaries, taken as a
whole, or QuadraMed and its subsidiaries, taken as a whole, as
the case may be, but shall not include the effect of economic,
political or other conditions affecting the Company's industry or
the economy generally.
1.44. "Merger Subs" shall have the meaning specified in
the preamble hereto.
1.45. "Mergers" shall have the meaning specified in the
preamble hereto.
1.46. "Notice of Superior Proposal" shall have the
meaning specified in Section 4.9(b).
1.47. "Partner(s)" shall mean the holder(s) of RHP
Limited Partnership Interests and the General Partner.
1.48. "Partnership Interests" shall mean RHP Limited
Partnership Interests and RHP General Partnership Interests.
1.49. "Permitted Encumbrance" shall have the meaning
specified in Section 3.13(a) of this Agreement.
1.50. "Person" shall mean an individual, a partnership,
a corporation, a business trust, a joint stock company, a trust,
an unincorporated association, a joint venture or any other
entity of whatever nature.
1.51. "QuadraMed" shall have the meaning specified in
the preamble hereto.
1.52. "QuadraMed Balance Sheet" shall mean the Balance
Sheet included in QuadraMed's Quarterly Report on Form 10-Q for
the period ended September 30, 1997.
1.53. "QuadraMed Balance Sheet Date" shall mean
September 30, 1997.
1.54. "QuadraMed Common Stock" shall mean the shares of
common stock of QuadraMed, $0.01 par value.
1.55. "QuadraMed Disclosure Schedule" shall have the
meaning specified in Article V.
1.56. "QuadraMed Indemnified Person(s)" shall have the
meaning specified in Section 10.2(a).
1.57. "QuadraMed SEC Filings" shall mean any and all
documents, reports and other filings, including those required as
exhibits, made by QuadraMed with the SEC.
1.58. "QuadraMed Shares" shall mean the shares of
QuadraMed Common Stock issuable as the Closing Considerations.
1.59. "QuadraMed Stock Value" shall mean the Fair Market
Value of each of the QuadraMed shares used to calculate the
Closing Considerations.
1.60. "QuadraMed Survival Period" shall have the meaning
specified in Section 10.1(b).
1.61. "Real Property" shall mean all of the land,
buildings, plants, facilities, installations, fixtures and other
structures and improvements leased to the Company pursuant to the
Real Property Leases.
1.62. "Real Property Leases" shall mean, collectively,
any written real property leases to which the Company is a party.
1.63. "Registration Rights Agreement" shall mean the
Registration Rights Agreement, substantially in the form of
Exhibit B attached hereto.
1.64. "Resource Holdings" shall have the meaning
specified in the preamble hereto.
1.65. "Resource Holdings Common Stock" shall have the
meaning specified in Section 2.7(a).
1.66. "RHP" shall have the meaning specified in the
preamble hereto.
1.67. "RHP General Partnership Interest" shall mean the
general partnership interest in RHP.
1.68. "RHP Limited Partnership Agreement" shall mean
that certain First Amended and Restated Agreement of Limited
Partnership of Resource Health Partners, L.P., dated as of
January 13, 1995, as amended.
1.69. "RHP Limited Partnership Interests" shall mean the
limited partnership interests in RHP.
1.70. "RHP Survival Period" shall have the meaning
specified in Section 10.1(a).
1.71. "Rule 144" shall have the meaning specified in
Section 3.31(b).
1.72. "SEC" shall mean the Securities and Exchange
Commission.
1.73. "Securities Act" shall mean the Securities Act of
1933, as amended.
1.74. "Software" shall have the meaning specified in
Section 3.17.
1.75. "Sub A" shall have the meaning specified in the
preamble hereto.
1.76. "Sub A Certificate of Merger" shall mean the
Certificate of Merger in substantially the form attached hereto
as Exhibit C, to be executed and filed in connection with the Sub
A Merger.
1.77. "Sub A Common Stock" shall mean the common stock
of Sub A, $0.001 par value.
1.78. "Sub B" shall have the meaning specified in the
preamble hereto.
1.79. "Sub B Certificate of Merger" shall mean the
Certificate of Merger in substantially the form attached hereto
as Exhibit D, to be executed and filed in connection with the Sub
A Merger.
1.80. "Sub B Common Stock" shall mean the common stock
of Sub B, $0.001 par value.
1.81. "Sub B Merger Agreement" shall mean the Agreement
and Plan of Merger, in the form attached as Exhibit E.
1.82. "Subsidiary" and "Subsidiaries" shall mean the
subsidiaries of RHP as listed on Schedule 3.5 hereto.
1.83. "Superior Proposal" shall mean any bona fide
proposal to acquire directly or indirectly for consideration
consisting of cash and/or securities RHP Limited Partnership
Interests entitled to 50% or more of the distributions of RHP
then outstanding or all or substantially all the assets of the
Company and otherwise on terms which the Advisory Committee of
RHP by a majority vote determines in its good faith judgment
(based on consultation with the financial advisor of RHP) to be
reasonably capable of being completed (taking into account all
legal, financial, regulatory and other aspects of the proposal
and the person or entity making the proposal, including the
availability of financing therefor) and more favorable to RHP's
Limited Partners than the Mergers.
1.84. "Surviving Corporation A" shall have the meaning
specified in Section 2.1(a).
1.85. "Surviving Corporation B" shall have the meaning
specified in Section 2.1(b).
1.86. "Tax(es)" shall mean all taxes, charges, fees,
levies or other assessments of any nature whatsoever (including,
without limitation, all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, estimated, severance,
stamp, occupation, property or other taxes, customs, duties,
fees, assessments or charges of any kind whatsoever) together
with any interest and any penalties, additions to tax or
additional amounts imposed by any taxing authority (domestic or
foreign) upon the Company to which reference is being made or any
Affiliate thereof for upon any consolidated, combined or unitary
group of which any such entity is or was a member.
1.87. "Tax Return(s)" shall mean all federal, state,
foreign, local and other tax returns, reports and statements
heretofore required to be filed by the Company to which reference
is being made or by any consolidated, combined or unitary group
of which the Company is or was a member.
1.88. "Third Party" shall mean any person or entity
(which includes a "person" as such term is defined in Section
13(d)(3) of the Exchange Act) other than QuadraMed, Sub A, Sub B
or any affiliate thereof.
1.89. "Third Party Acquisition" shall mean the
occurrence of any of the following events: (i) the acquisition of
RHP by merger or otherwise by any person or entity (which
includes a "person" as such term is defined in Section 13(d)(3)
of the Exchange Act) other than QuadraMed, Sub A, Sub B or any
affiliate thereof; (ii) the acquisition by a Third Party of 50%
or more of the total assets of the Company (other than the
purchase of the Company's products in the ordinary course of
business); (iii) the acquisition by a Third Party of RHP Limited
Partnership Interests entitled to 50% or more of distributions of
RHP; (iv) the adoption by RHP of a plan of partial or complete
liquidation or the declaration or payment of an extraordinary
dividend other than in connection with the transactions
contemplated by this Agreement; or (v) the repurchase by RHP of
the RHP Limited Partnership Interests entitled to 50% or more of
distributions of RHP.
1.90. "Threshold Amount" shall have the meaning
specified in Section 10.2(b).
ARTICLE II.
THE MERGERS
2.1. The Mergers.
(a) Sub A Merger. Subject to the terms and conditions
of this Agreement and the Sub A Merger Agreement, simultaneously
with the Sub B Merger, the Sub A Merger shall be consummated in
accordance with the PBCL, as promptly as practicable following
the satisfaction or waiver of the conditions set forth in
Articles VII, VIII and IX. At the Effective Time, subject to the
terms and conditions of this Agreement and the Sub A Merger
Agreement and in accordance with the laws of the State of
Pennsylvania, Sub A shall be merged with and into Resource
Holdings, the separate corporate existence of Sub A shall cease
and Resource Holdings shall continue as the surviving corporation
(the "Surviving Corporation A").
(b) Sub B Merger. Subject to the terms and conditions
hereof, simultaneously with the Sub A Merger, the Sub B Merger
shall be consummated in accordance with the DGCL as promptly as
practicable following the satisfaction or waiver of the
conditions set forth in Articles VII, VIII and IX. At the
Effective Time, subject to the terms and conditions of this
Agreement and in accordance with the laws of the State of
Delaware, Sub B shall be merged with and into FRA, the separate
corporate existence of Sub B shall cease and FRA shall continue
as the surviving corporation (the "Surviving Corporation B").
2.2. Execution and Filing of Articles and Certificates of
Merger.
(a) Sub A Merger. Prior to the Closing, Sub A and
Resource Holdings shall (i) complete and execute the Sub A Merger
Agreement, the Articles of Merger, as required by the PBCL, and
the Sub A Certificate of Merger, as required by the DGCL, (ii)
shall cause the Articles of Merger and Sub A Merger Agreement to
be delivered to the Pennsylvania Secretary of State for filing as
part of the Closing as provided by the PBCL, and (iii) shall
cause the Sub A Certificate of Merger to be delivered to the
Delaware Secretary of State for filing as part of the Closing as
provided by the DGCL. The parties hereto will also execute and
deliver such other documents or certificates as may be required
to effect the Sub A Merger.
(b) Sub B Merger. Prior to the Closing, Sub B and FRA
shall complete and execute the Certificate of Merger and cause
the Certificate of Merger to be delivered to the Delaware
Secretary of State for filing as part of the Closing as provided
in Section 251 of the DGCL. The parties hereto will also execute
and deliver such other documents or certificates as may be
required to effect the Merger.
2.3. Effect of the Mergers.
(a) The Sub A Merger shall have the effect set forth
in Section 1921 of the PBCL.
(b) The Sub B Merger shall have the effect set forth
in Section 251 of the DGCL.
2.4. Articles or Certificate of Incorporation; Bylaws.
(a) Sub A Merger. As of the Effective Time, the
Articles of Incorporation of Resource Holdings shall be the
Articles of Incorporation of Surviving Corporation A, and the
Bylaws of Resource Holdings shall be the Bylaws of Surviving
Corporation A.
(b) Sub B Merger. As of the Effective Time, the
Certificate of Incorporation of FRA shall be the Certificate of
Incorporation of Surviving Corporation B, and the Bylaws of Sub B
shall be the Bylaws of Surviving Corporation B.
2.5. Directors.
(a) Sub A Merger. At the Effective Time, the
directors of Sub A shall become the directors of Surviving
Corporation A. Such directors shall hold office from the
Effective Time until their respective successors are duly elected
or appointed and qualify in the manner provided in the Articles
of Incorporation and Bylaws of Resource Holdings, or as otherwise
provided by law.
(b) Sub B Merger. At the Effective Time, the
directors of Sub B shall become the directors of Surviving
Corporation B. Such directors shall hold office from the
Effective Time until their respective successors are duly elected
or appointed and qualify in the manner provided in the
Certificate of Incorporation and Bylaws of Sub B, or as otherwise
provided by law.
2.6. Officers.
(a) Sub A Merger. At the Effective Time, the officers
of Sub A shall become the officers of Surviving Corporation A.
Such officers shall hold office from the Effective Time until
their respective successors are duly elected or appointed and
qualify in the manner provided in the Articles of Incorporation
and Bylaws of Resource Holdings, or as otherwise provided by law.
(b) Sub B Merger. At the Effective Time, the officers
of Sub B shall become the officers of Surviving Corporation B.
Such officers shall hold office from the Effective Time until
their respective successors are duly elected or appointed and
qualify in the manner provided in the Certificate of
Incorporation and Bylaws of Sub B, or as otherwise provided by
law.
2.7. Effect on Capital Stock.
(a) Conversion of Resource Holdings Common Stock; Sub
A Merger.
(i) At the Effective Time of the Sub A Merger,
each share of common stock, no par value, of Resource Holdings
("Resource Holdings Common Stock") issued and outstanding
immediately prior to the Effective Time will be canceled and
extinguished and be converted automatically into the right to
receive a number of shares of QuadraMed Common Stock equal to the
quotient obtained by dividing (A) the amount obtained by dividing
$3,792,039.90 by the Fair Market Value (such quotient referred to
as "Closing Consideration A"), by (B) the number of shares of
Resource Holdings Common Stock outstanding at the Effective Time.
At the Effective Time, all rights in respect of such shares of
Resource Holdings Common Stock shall cease to exist, other than
the right to receive Closing Consideration A. Until surrendered,
each outstanding certificate, if any, which prior to the
Effective Time represented issued and outstanding shares of
Resource Holdings Common Stock shall be deemed for all corporate
purposes to evidence the right to receive such amount.
(ii) At the Effective Time, all shares of Resource
Holdings Common Stock that are owned by Resource Holdings as
treasury stock immediately prior to the Effective Time shall be
canceled and retired and cease to exist, without any conversion
thereof.
(b) Conversion of FRA Common Stock; Sub B Merger.
(i) At the Effective Time of the Sub B Merger,
each share of common stock, $.01 par value, of FRA ("FRA Common
Stock") issued and outstanding immediately prior to the Effective
Time will be canceled and extinguished and be converted
automatically into the right to receive a number of shares of
QuadraMed Common Stock equal to the quotient obtained by dividing
(A) the amount obtained by dividing $34,128,359.10 by the Fair
Market Value (such quotient referred to as "Closing Consideration
B"), by (B) the number of shares of FRA Common Stock outstanding
at the Effective Time. At the Effective Time, all rights in
respect of such shares of FRA Common Stock shall cease to exist,
other than the right to receive Closing Consideration B. Until
surrendered, each outstanding certificate, if any, which prior to
the Effective Time represented issued and outstanding shares of
FRA Common Stock shall be deemed for all corporate purposes to
evidence the right to receive such amount.
(ii) At the Effective Time, all shares of FRA
Common Stock that are owned by FRA as treasury stock immediately
prior to the Effective Time shall be canceled and retired and
cease to exist, without any conversion thereof.
2.8. Closing. Unless this Agreement shall have been
terminated pursuant to the provisions of Article XI, the Closing
of the transactions contemplated by this Agreement shall take
place at the offices of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, Xxx
Xxxxxx, Xxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 as soon as
practicable following the satisfaction or waiver of the
conditions set forth in Articles VII, VIII and IX.
2.9. Delivery of Certificates.
(a) RHP shall deliver to QuadraMed, at the Closing,
the certificates for all outstanding shares of Resource Holdings
Common Stock and FRA Common Stock in exchange for the shares of
QuadraMed Common Stock to be issued in the Mergers.
(b) QuadraMed shall deliver to RHP, at the Closing,
(i) a certificate in the name of RHP for a number of QuadraMed
Shares equal to the quotient obtained by dividing $3,700,000 by
the QuadraMed Stock Value (the "Escrow Shares"), to be deposited
with and held by the Escrow Agent by RHP pursuant to the terms of
the Escrow Agreement, and (ii) a certificate in the name of RHP
for the aggregate number shares of QuadraMed Common Stock to be
issued to RHP in the Mergers, other than the Escrow Shares. Each
of the certificates shall bear the legends set forth in Section
4.8.
2.10. Escrow. At the Closing, RHP shall cause the
Escrow Shares to be deposited with the Escrow Agent, to be held
in an escrow account established by the Escrow Agent for the
purposes hereof in accordance with the terms of the Escrow
Agreement.
2.11. Tax Consequences. It is intended that the Mergers
shall constitute a reorganization, within the meaning of Section
368(a)(1)(A) and Section 368(a)(2)(E) of the Code with respect to
the acquisition of Resource Holdings and FRA, and that this
Agreement shall constitute a "plan of reorganization" for
purposes of Section 368 of the Code.
2.12. Pooling of Interests. The parties intend that the
Mergers be treated as a "pooling of interests" for accounting
purposes.
2.13. Private Placement. The shares of QuadraMed Common
Stock to be issued in the Mergers will be exempt from
registration requirements of the Securities Act pursuant to the
private placement exemption provided by Section 4(2) thereof.
2.14. Payment of Certain Fees and Expenses. QuadraMed
shall assume and pay all fees and expenses of the Company
Advisors as contemplated by Section 11.5.
2.15. Assignment of RHP Assets and Assumption of RHP
Liabilities. At the Closing, QuadraMed and RHP shall execute and
deliver the Assignment and Assumption Agreement attached hereto
as Exhibit F, pursuant to which RHP shall assign to QuadraMed the
assets and properties of RHP as of the Closing Date (other than
the equity interests in the Subsidiaries) and QuadraMed shall
assume all liabilities of RHP (other than those liabilities
arising under the RHP Limited Partnership Agreement) as of the
Closing Date on the terms and conditions of said Assignment and
Assumption Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in a document of even date herewith and
delivered by RHP to QuadraMed concurrently with the execution and
delivery of this Agreement and referring to the representations
and warranties in this Agreement (the "Company Disclosure
Schedule"), RHP, Resource Holdings and FRA jointly and severally
represent and warrant to QuadraMed and the Merger Subs as
follows:
3.1. Organization and Good Standing of RHP and Subsidiaries.
RHP is a limited partnership duly organized, validly existing and
in good standing under the laws of the State of Delaware, has all
requisite partnership power and authority to carry on its
business as now being conducted and to own, lease and operate its
properties. Each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of its
respective jurisdiction of incorporation, has all requisite
corporate power and authority to carry on its business as now
being conducted and to own, lease and operate its properties.
3.2. Limited Partnership Agreement, Charter and Bylaws. RHP
has delivered to QuadraMed and the Merger Subs true, correct and
complete copies of the RHP Limited Partnership Agreement and the
charters (certified by the applicable Secretary of State) and
bylaws (certified by its Secretary) of each Subsidiary, together
with all amendments to each through the date hereof. The RHP
Limited Partnership Agreement and each such charter and bylaws
are in full force and effect.
3.3. Corporate Minutes. Except as set forth on Schedule
3.3, RHP has delivered to QuadraMed and the Merger Subs copies of
all minute books and stock certificate books of each Subsidiary,
and the stock certificate books reflect all issuances of equity
securities of each Subsidiary.
3.4. Qualifications to Do Business. Each Subsidiary is
qualified to do business and are in good standing in each
jurisdiction (listed on Schedule 3.4 to this Agreement) where the
character or location of the employment of personnel or the
nature of the business and activities conducted by such
Subsidiary requires such qualification, except in such
jurisdictions where the failure to be so qualified and to be in
good standing, individually or in the aggregate, would not have a
Material Adverse Effect.
3.5. Capitalization of Subsidiaries. The capitalization of
each Subsidiary is as set forth on Schedule 3.5 hereto. Except
as set forth on Schedule 3.5, there are not and, as of the
Closing, there will not be, any outstanding securities of any
Subsidiary or options, warrants, subscriptions, convertible
debentures or other rights, commitments or any other similar
agreements for the purchase of any securities of any Subsidiary.
Other than the RHP Limited Partnership Agreement, the Company is
not a party to any voting trust agreements or other contracts,
agreements or arrangements restricting voting rights or
transferability with respect to the issued and outstanding
capital stock of any Subsidiary.
3.6. Ownership of RHP Partnership Interests. As of the date
of this Agreement and as of the Closing, the Partners do and will
own all of the issued and outstanding Partnership Interests of
RHP as set forth on Schedule 3.6 hereto. Except as set forth on
Schedule 3.6, there have been no changes in the record ownership
of any Partnership Interests or other equity interests of RHP
within the one (1) year period ending on the Effective Time of
this Agreement.
3.7. RHP Assets and Liabilities; Subsidiaries and Other
Affiliates.
(a) Except as set forth on Schedule 3.7, (i) RHP has
no ownership interests or other rights in any assets or property
and (ii) RHP has no liabilities or obligations of any kind or
nature.
(b) Except as set forth on Schedule 3.7, RHP does not
have any subsidiaries and does not own, either directly or
indirectly, any interest or investment, whether debt or equity
(other than an interest as a creditor holding a trade account
receivable), or any obligation, option or right to acquire any
such interest, direct or indirect, in any other corporation or
other entity other than the Subsidiaries.
3.8. Equity Ownership of Subsidiaries. Except as set forth
on Schedule 3.8, all the issued and outstanding shares of capital
stock of each Subsidiary are validly issued, fully paid and
nonassessable and are owned by RHP or by a wholly-owned
Subsidiary, free and clear of any Encumbrances, and there are no
proxies issued and outstanding or restrictions on voting with
respect to any such shares.
3.9. Authority.
(a) RHP has the necessary limited partnership power
and authority to enter into and deliver this Agreement, to
perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby by RHP have been duly authorized by the
Advisory Committee and the General Partner of RHP in accordance
with applicable law and the RHP Limited Partnership Agreement.
No further action will be necessary on the part of RHP to make
this Agreement valid and binding upon RHP in accordance with its
terms. This Agreement has been duly and validly executed and
delivered by RHP and this Agreement (assuming due authorization,
execution and delivery by the other parties hereto) constitutes
the legal, valid and binding obligation of RHP, enforceable in
accordance with its terms (except as such enforcement may be
limited by applicable bankruptcy, insolvency, moratorium or
similar laws affecting the rights of creditors generally or by
general principles of equity). Neither the execution, delivery
nor performance of this Agreement by RHP, nor the consummation of
the transactions contemplated hereby, nor compliance by RHP with
the terms and provisions of this Agreement nor the Certificates
of Merger will result in a violation or breach of any term or
provision of the RHP Limited Partnership Agreement, or of any
statute, rule or regulation applicable to RHP or its businesses,
properties, assets or personnel, or except as described on
Schedule 3.9(a), conflict with or constitute a violation or
breach of, or a default under (or an event which, with the
passage of time or the giving of notice, or both, would
constitute a default under), nor give any party a right to
accelerate the due date of any indebtedness or obligation under,
any indenture, mortgage, deed of trust, contract or agreement to
which RHP is a party or to which its properties or assets are
subject, or any judgment, decree, writ or other court order to
which RHP is a party or by which RHP or its businesses,
properties, assets or personnel are bound; except, in each case,
where it would not have a Material Adverse Effect, either
individually or in the aggregate.
(b) Except for filing the Certificates of Merger with
the Delaware and Pennsylvania Secretaries of State (as
appropriate), filing any necessary qualification or withdrawal
documents with state authorities, obtaining any necessary
third-party consents and compliance with any federal or state
securities laws requirements, RHP is not required to submit any
notice, report or other filing with any federal, state or local
governmental authority in connection with the execution or
delivery or performance by RHP of this Agreement or the
consummation of the transactions contemplated herein.
3.10. Company Financial Statements. RHP has delivered
to QuadraMed and the Merger Subs true, complete and correct
copies of the Company Financial Statements. Except as set forth
on Schedule 3.10, the Company Financial Statements (i) present
fairly, in all material respects, the financial position of the
Subsidiaries covered thereby at said dates and the results of
their respective operations and cash flows for the periods
therein specified in accordance with generally accepted
accounting principles, consistently applied and maintained
throughout the periods indicated, except as set forth therein,
subject, in the case of interim and unaudited financial
statements, to audit and year-end adjustments and accruals and
the absence of footnotes and, in the case of the interim
financial statements of Resource Holdings and Healthcare Research
Affiliates, Inc., the absence of statements of shareholders'
equity and cash flows, and (ii) have been prepared from the books
and records of the Subsidiaries.
3.11. Undisclosed Liabilities.
(a) Except for (i) liabilities disclosed or provided
for on the Company Financial Statements, or in the footnotes
thereto (ii) liabilities incurred in the ordinary course of
business and not required to be set forth in the Company
Financial Statements under generally accepted accounting
principles, which could not reasonably be foreseen to have a
Material Adverse Effect, either individually or in the aggregate,
(iii) liabilities incurred in the ordinary course of business
consistent with past practice since December 31, 1996, (iv)
liabilities incurred in connection with the execution of this
Agreement, (v) Contracts or commitments disclosed on any Schedule
to this Agreement or not required to be so disclosed pursuant to
the terms of this Agreement, and (vi) any liability disclosed on
any other Schedule to this Agreement, the Company does not have
any material direct or indirect indebtedness, liability or
obligation, accrued, absolute or contingent (whether or not of a
kind required by generally accepted accounting principles to be
set forth on a balance sheet) (the "Liabilities"), other than the
Liabilities set forth on Schedule 3.11.
(b) Neither RHP nor any of the Subsidiaries have paid
any of the fees or expenses of the Company Advisors in connection
with this Agreement or the transactions contemplated hereby.
3.12. Absence of Certain Changes. Except as set forth
on Schedule 3.12 or as provided for in this Agreement, since
October 31, 1997, the Subsidiaries have conducted their business
only in the ordinary course and consistent with prior practice,
and the Subsidiaries have not:
(a) Discharged or satisfied any material Encumbrance
or paid any material obligation or liability, absolute, accrued,
contingent or otherwise, whether due or to become due, other than
liabilities shown on the Company Financial Statements and
liabilities incurred since the date of the Company Financial
Statements in the ordinary course of business and consistent with
prior practice;
(b) Subjected (or permitted to be subjected) any of
its property, business or assets, tangible or intangible to any
material Encumbrance other than Permitted Encumbrances;
(c) Sold, transferred, leased to others or otherwise
disposed of any of its assets or canceled or compromised any
material debt or claim, or knowingly waived or released any claim
or right of substantial value except in the ordinary course of
business consistent with prior practice;
(d) Terminated or received any notice of termination
of any Contract or suffered any damage, destruction or loss
(whether or not covered by insurance) which, individually or in
the aggregate, has had or could reasonably be expected to have a
Material Adverse Effect;
(e) To the Company's knowledge, encountered any labor
union organizing activity, had any actual or threatened employee
strikes, workdowns or lockouts;
(f) Transferred or granted any rights under, or
entered into any settlement regarding the breach or infringement
of, or entered into any Contract relating to, any Intellectual
Property or modified any existing rights with respect thereto
except as disclosed on other Schedules hereto;
(g) Except as required in accordance with applicable
laws, adopted, entered into or amended any Employee Benefit Plan
or made any change in the actuarial methods or assumptions used
in funding or determining benefit equivalences thereunder, and
except for year-end bonuses in accordance with past practice,
made any change in the rate of compensation, commission, bonus or
other direct or indirect remuneration payable to any director,
officer or employee of the Company earning over $75,000 during
the 1997 calendar year;
(h) Made any capital expenditures or capital additions
or betterments or commitments therefor in excess of $50,000
individually or $250,000 in the aggregate;
(i) Instituted, settled or agreed to settle, or had a
judgment rendered against the Company in, any material
litigation, action or proceeding before any court or governmental
body (domestic or foreign) relating to the Company or its
businesses, assets or properties;
(j) Accepted any Contract for performance of services
or orders in a material amount from any hospital, health care
provider or other customer with terms not within the ordinary
course of business which will require performance subsequent to
the Closing;
(k) Revalued any of its assets or written off as
uncollectible any notes or accounts receivable which,
individually or in the aggregate, is material to the Company or
its businesses, except writedowns and write-offs in the ordinary
course of business.
(l) Entered into any agreement or made any commitment
to take any of the actions described in paragraphs (a) through
(l) above; or
(m) Experienced any Material Adverse Effect.
3.13. Assets.
(a) Except as set forth on Schedule 3.13(a), each
Subsidiary has marketable title to, or a valid leasehold interest
in, or other legal right to use, all of the material properties
and assets it owns or uses in its business, except inventory (if
any) sold or other assets disposed of or used since October 31,
1997 in the ordinary course of business. None of such assets or
properties owned by a Subsidiary are subject to any Encumbrances,
except (i) imperfections of title and Encumbrances incurred or
made in the ordinary course of business which are not material in
amount and do not materially impair the usefulness of such
properties and assets in the conduct of the business of the
Company, (ii) liens for taxes, assessments or other governmental
charges or levies which are either not yet delinquent or are
being contested in good faith and by appropriate proceedings, can
be paid without material penalty and which do not materially
impair the usefulness of such properties and assets in the
conduct of the business of the Company, (iii) Encumbrances which
are either reflected, or securing liabilities reflected, on the
Company Financial Statements or securing liabilities incurred
since the date thereof in the ordinary course of business or (iv)
Encumbrances reflected on Schedule 3.13(a)(i) (collectively,
"Permitted Encumbrances"). Except as set forth on Schedule
3.13(a), all of such properties and assets owned, leased or used
by the Company are adequate for all current operations of the
business of the Company.
(b) RHP has delivered to QuadraMed a complete list,
which is true and correct in all material respects, of all
equipment, machinery, tools, equipment, motor vehicles and other
tangible personal property (other than inventory (if any) and
supplies acquired in the ordinary course of business) owned,
leased or used by the Company, except for any items having a
current book value less than $15,000.
3.14. Real Property Matters.
(a) Schedule 3.14 includes a complete and accurate
description of all of the Real Property. The Real Property
includes all land used for the conduct of the business and
operations of the Company. To the knowledge of the Company, the
activities carried on in such Real Property are not in violation
of or in conflict with any applicable zoning, environmental or
health regulation or ordinance or any other law, statute,
regulation or ordinance which such violation or conflict would
have a Material Adverse Effect. RHP has delivered to QuadraMed
and the Merger Subs true, correct and complete copies of the Real
Property Leases and copies of all material reports of any
engineers, environmental consultants or other consultants in its
possession relating to any of the Real Property that were
prepared within the past five (5) years.
(b) Except as disclosed on Schedule 3.14, there are no
tenants (other than the Company) occupying space on any Real
Property leased by the Company.
(c) Each of the Real Property Leases is valid and
enforceable in accordance with its terms, the Company has not
received any notice of any, and there exists no event of default
by the Company or event which constitutes or would constitute
(with notice or lapse of time or both) a default by the Company
in any material respect under any Real Property Lease, except as
otherwise provided in Schedule 3.14.
3.15. Intellectual Property. Schedule 3.15 sets forth
all patents, trademarks, service marks, trade names, copyrights,
all applications for any of the foregoing and all permits, grants
and licenses running to or from the Subsidiaries relating to any
of the foregoing that are material to the business of the
Subsidiaries (collectively, the "Intellectual Property"). To the
extent that it would have a Material Adverse Effect and except as
set forth on Schedule 3.15, to the Company's knowledge, the
Subsidiaries are not in violation of, or infringing upon, any
patent, trademark, service xxxx, trade name or copyright of any
third party, and no written claims have been asserted, nor is
there any litigation pending or threatened claiming such
infringement. Except as set forth on Schedule 3.15, the
Subsidiaries have not licensed or encumbered any Intellectual
Property owned by them to any third party, nor have any other
distribution rights been granted by the Subsidiaries to a third
party. Except as set forth on Schedule 3.15, the Subsidiaries
have not entered into any other agreements whereby the
Subsidiaries have been appointed as a distributor or licensee of
any products, patents or trademarks owned by a third party.
Except as set forth on Schedule 3.15, the Subsidiaries have not
entered into any agreement which restricts the use of any of the
Intellectual Property. To the Company's knowledge, the
Subsidiaries are not in breach of any agreement set forth in
Schedule 3.15, nor have any claims with respect to any agreement
been asserted nor is there any litigation pending or threatened
claiming any such breach, nor have any claims been asserted that
any of the terms and conditions of such agreements violate the
laws of any jurisdiction or treaty to the extent that, in each
case, it would have a Material Adverse Effect. To the Company's
knowledge, and except as provided in Schedule 3.15, the
Subsidiaries own or have licensed from third parties, and have
the right to use, all necessary Intellectual Property in order to
conduct their business in all material respects as currently
conducted.
3.16. Proprietary Information of Third Parties. To the
Company's knowledge, no Third Party has claimed in writing that
any Person currently employed by the Company has (i) violated or
may be violating any terms or conditions of his or her
employment, non-competition or non-disclosure agreement with such
Third Party, (ii) disclosed or may be disclosing or utilized or
may be utilizing any trade secret or proprietary information or
documentation of such Third Party or (iii) interfered or may be
interfering in the employment relationship between such Third
Party and any of its present or former employees.
3.17. Software. Except as set forth on Schedule 3.17:
(a) The computer software of the Subsidiaries included
in the Intellectual Property (the "Software") performs in all
material respects in accordance with the documentation and other
written material used in connection with the Software and to the
Company's knowledge is free of material defects in programming
and operation, is in machine-readable form, contains all current
revisions of the Software and includes all computer programs,
materials and processes related to the Software. RHP has made
available to QuadraMed and the Merger Subs complete and correct
copies of all existing user manuals related to the Software.
(b) To the Company's knowledge, no employee of the
Company is in default under any term of any employment contract
or noncompetition agreement with the Company relating to the
Software, or any other contract or any restrictive covenant with
the Company relating to the Software or its development or
exploitation. To the Company's knowledge, the Software was
developed entirely by employees and consultants of the Company.
Each such employee was, during the time of such employee's
participation in such development, exclusively an employee of the
Company. The Software does not include, to the Company's
knowledge, any inventions of any employees or consultants made
prior to the time such employees or consultants became employees
or consultants of the Company nor, to the Company's knowledge,
any intellectual property of any previous employer of such
employee or consultant.
(c) All right, title and interest in and to the
Software is owned by the Company, free and clear of all
Encumbrances except for Permitted Encumbrances or other
Encumbrances which would not materially impair the value or use
of such Software, and, except for non-exclusive licenses granted
to customers in the ordinary course of business, no party other
than the Company has any interest in the Software, including,
without limitation, any security interest, license, contingent
interest or otherwise. To the Company's knowledge, the Company's
development, use, sale or exploitation of the Software does not
violate in any material respect any rights of any other person or
entity and the Company has not received any communication
alleging such a violation. Other than employees, consultants and
sales agents, the Company does not have any obligation to
compensate any person for the development, use, sale or
exploitation of the Software nor has the Company granted to any
other person or entity other than customers and sales agents any
license, option or other rights to develop, use, sell or exploit
in any manner the Software, whether requiring the payment of
royalties or not.
(d) The Company has used commercially reasonable
efforts to prohibit the public disclosure of the source code for
the Software to any person or entity other than certain employees
and consultants of the Company. The Company used commercially
reasonable efforts to protect the confidential and proprietary
nature of the Software. There have been no patents applied for
and no copyrights registered for any part of the Software.
3.18. Tax Matters.
(a) All Tax Returns and reports of the Company
required by law to be filed as of the date hereof have been
filed, and all Taxes imposed upon the Company or any of its
properties, assets or income which are due and payable, or
claimed in writing by any taxing authority to be due and payable,
as of the date hereof have been paid or reserved for, other than
taxes, assessments, fees and charges being contested in good
faith by the Company concerning an amount which in the aggregate
is not material to the business of the Company and except for
extensions set forth on Schedule 3.18(a). The Company has paid
or made provision in the Company Financial Statements for the
payment of all unpaid Taxes of the Company through the date of
the Company Financials accrued for or applicable to the period
then ended. FRA and its Subsidiary utilize the accrual method of
accounting for tax purposes.
(b) Except as set forth on Schedule 3.18(b), there are
no claims for Taxes pending against the Company and the Company
does not know of any threatened claim for Tax deficiencies, and
there are not now in force any waivers or agreements by the
Company for the extension of time for the assessment of any tax,
nor has any such waiver or agreement been requested by the IRS or
any other taxing authority.
(c) Except as set forth on Schedule 3.18(c), within
the past three years, the federal income Tax Returns of the
Company have not been examined by the IRS. The Company has no
liability for any federal, state or other Taxes of any other
corporation or entity, including, without limitation, by reason
of the application of Treas. Reg. Section 1.1502-6. Except as
set forth on Schedule 3.18(c), the Company is not required to
file any tax returns or to pay any Taxes in foreign countries.
(d) The Company has paid or is withholding and will
pay when due to the proper taxing authorities all withholding
amounts required to be withheld with respect to all Taxes on
income, unemployment, social security or other similar programs
or benefits with respect to salary and other compensation of
directors, officers and employees of the Company.
(e) Schedule 3.18(e) lists those states where the
Company is required to file a Tax Return.
(f) The Tax Returns filed by the Company have reported
accurately, in all material respects, all information required to
be included on such Tax Returns.
(g) Except as set forth on Schedule 3.18(g), the
Company has not executed a waiver or consent extending any
statute of limitation for the assessment or collection of any
tax, which waiver or consent remains in effect.
(h) Except as set forth on Schedule 3.18(h), the
Company has not received a tax ruling or entered into any
agreement with any taxing authority, which ruling or agreement
has or could have a material adverse effect on the Taxes of the
Company payable on or after the Closing.
(i) Except as set forth on Schedule 3.18(i), the
Subsidiaries have not been included in a federal consolidated
income tax return and/or state consolidated, combined or unitary
income tax return.
(j) The Company has not at any time consented to have
the provisions of Section 341(f) of the Code apply to it.
(k) Except as set forth on Schedule 3.18(k), the
Company is not subject to any joint venture, partnership or other
arrangement or Contract which is treated as a partnership for
federal income tax purposes, other than the limited partnership
of RHP. The Company is not a party to any tax sharing agreement.
(l) The Company is not and will not be required to
recognize after the date hereof any taxable income in respect of
accounting method adjustments required to be made under Section
481 of the Code or an equivalent state or local laws provision,
other than as set forth on Schedule 3.18(l) (which describes such
adjustment, the reason therefor and the amount or estimated
amount (which estimate has been made in good faith, and is
considered reasonable)) of such adjustment. No representation is
made as to the effect of any accounting method changes or
adjustments made by QuadraMed, Surviving Corporation A or
Surviving Corporation B after the Closing or as a result of the
transactions contemplated by this Agreement.
(m) The Company has not made or become obligated to
make, and will not as a result of any event connected with the
transactions contemplated by this Agreement become obligated to
make, any "excess parachute payment" as defined in Section 280G
of the Code.
3.19. Legal and Regulatory Matters. Except as set forth
on Schedule 3.19: (i) there is no suit, action, arbitration,
known governmental investigation or other proceeding, nor any
order, decree or judgment pending or, to the Company's knowledge,
threatened by or against the Company, or the transactions
contemplated hereby that has, or could reasonably be expected to
have, a Material Adverse Effect; (ii) there are no judgments,
decrees or orders enjoining the Company in respect of, or the
effect of which is to prohibit any business practice or the
acquisition of any property or the conduct of any aspect of the
business of the Company that has, or could reasonably be expected
to have, a Material Adverse Effect; (iii) the Company has
complied and is complying with all laws, ordinances, treaties and
government rules, orders and regulations applicable to it or its
properties, assets, personnel or business, non-compliance with
which could have a Material Adverse Effect; (iv) the Company has
obtained all material Licenses necessary for the ownership of its
properties and the conduct of its business as currently
conducted, and all such Licenses are currently in full force and
effect; and (v) RHP has provided QuadraMed and the Merger Subs
with access to all Government Communications as to which any
unresolved issue remains.
3.20. Employees. The Company has not been nor is it a
party to any collective bargaining agreements with respect to any
of its employees or with respect to any contract or agreement
with a labor union or any local or subdivision thereof, nor has
it been charged with any unresolved unfair labor practices, nor,
to the Company's knowledge, is there any present union organizing
activity among any of its employees. To the Company's knowledge,
there are no controversies, claims, suits, actions or proceedings
pending or threatened between the Company and its employees which
have or could reasonably be expected to have a Material Adverse
Effect.
3.21. Xxxxxxxx. All xxxxxxxx to customers which are
party to Contracts of the Company have been accurate in all
material respects. To the Company's knowledge, there are no
existing or threatened disputes regarding any services rendered
or xxxxxxxx to such customers that would have a Material Adverse
Effect.
3.22. Insurance. Schedule 3.22 to this Agreement lists
all insurance policies of the Company, indicating the type of
insurance, carrier, policy number, amount of coverage (including
deductible), premiums and expiration dates. Except as set forth
on Schedule 3.22, such policies are in full force and effect and
all premiums now due and owing with respect to such policies have
been paid in full, and the Company has not made any borrowings or
incurred any indebtedness, the collateral for which was any of
such policies. To the Company's knowledge, the Company is not in
default with respect to any provision contained in any such
policy and the Company has not received any notice of
cancellation or nonrenewal of any such policy. No representation
is made as to the transferability of any policy or the effect of
the transactions contemplated by this Agreement.
3.23. Personnel.
(a) RHP has delivered to QuadraMed, Sub A and Sub B
the names of all directors, officers and employees of the Company
earning over $75,000 in 1997, indicating (i) the positions within
the Company held by each such person and (ii) the current annual
salary rates for each such person and the amounts payable in 1997
as bonus or other compensation for each such person.
(b) RHP has delivered to QuadraMed, Sub A and Sub B a
description of the Company's policies regarding severance or
other benefits that may be payable to any Company employee if his
or her employment were terminated.
3.24. Employee Benefit Plan(s). Except as set forth on
Schedule 3.24, neither the Company nor any Affiliate of the
Company which would be deemed a "single employer" with the
Company under Sections 414(b) or (c) of the Code presently
maintains any Employee Benefit Plan. Each Employee Benefit Plan
has been administered in compliance with applicable law and with
its terms, except where such non-compliance has not resulted in a
Material Adverse Effect. The Company does not presently
maintain, and has not maintained within the past five (5) years,
any Employee Benefit Plan which is subject to Section 412 of the
Code or Section 302 of ERISA, including any "multi-employer plan"
(as defined in Section 4001(a)(3) of ERISA). To the knowledge of
the Company, neither the Company, nor any other "disqualified
person" or "party-in-interest" (as defined in Section 4975(e)(2)
of the Code and Section 3(14) of ERISA, respectively) has engaged
in any prohibited transactions in connection with any Employee
Benefit Plan that could reasonably be expected to result in the
imposition of a penalty pursuant to Section 502(i) of ERISA,
damages pursuant to Section 409 of ERISA, or a tax pursuant to
Section 4975(a) of the Code which is reasonably expected to have
a Material Adverse Effect. To the Company's knowledge, there are
no actions, suits or claims (other than routine claims for
benefits) pending or threatened against any Employee Benefit Plan
of the Company or their assets, or arising out of such Employee
Benefit Plan, and, to the knowledge of the Company, no facts
exist which could give rise to any such actions, suits or claims
which might have a Material Adverse Effect.
3.25. Compliance with Environmental Laws. Except as set
forth in Schedule 3.25: (i) the Company and all its operations
are and have been in compliance with all Environmental Laws
except where any such noncompliance would not result in a
Material Adverse Effect; (ii) neither the Company nor any of its
predecessors used, released or disposed of any Hazardous
Substance in any manner that would reasonably be expected to
result in a Material Adverse Effect and (iii) to the Company's
knowledge, there is and has been no condition, activity or event
respecting the Company that would reasonably be expected to
subject QuadraMed or the Surviving Corporations to any liability
under any Environmental Law that would result in a Material
Adverse Effect.
3.26. Bank and Brokerage Accounts. Schedule 3.26 lists
(i) the names and addresses of all banks and brokerage firms in
which the Subsidiaries have accounts or safe deposit boxes, lock
boxes, vaults and the account numbers relating thereto and (ii)
the name of each person authorized to draw on any such account or
have access to any such boxes or vaults.
3.27. Contracts.
(a) Except as set forth on Schedule 3.27(a), no
Subsidiary is a party to any:
(i) Contract for the employment, severance or
termination with any of its directors or officers, or any
collective bargaining agreement;
(ii) Contract for the sale of any of its assets,
property or rights outside the ordinary course of business
consistent with prior practice (other than this Agreement) which
has not yet been fully performed in all material respects;
(iii) Contract that requires the Company to
indemnify or act as an indemnitor, guarantor or surety, for any
other person or entity other than a Subsidiary;
(iv) Contract restricting the Company from
conducting business anywhere in the world;
(v) Agreement, note, debenture, loan, mortgage,
indenture or other obligation for or relating to borrowed money
or commitments for obtaining borrowed money, in each case in
excess of $50,000;
(vi) Contract, lease or commitment which involves
the future payment by or to it of more than $50,000, except (i)
licensing agreements and software leases entered into in the
ordinary course, (ii) other Contracts or commitments for the sale
of goods or purchase or lease of equipment, tooling, supplies,
services or raw materials in each case entered into in the
ordinary course of business consistent with prior practice and
(iii) Contracts which may be canceled by it upon sixty (60) or
fewer days notice without payment of any penalty or fee in
connection therewith;
(vii) Letter of credit or power of attorney;
(viii) Joint venture contract or similar
arrangement or agreement which is likely to involve future
payments by it in excess of $50,000; or
(ix) Contract to which any Partner, stockholder,
officer or director of the Company or any "affiliate" or
"associate" of such persons (as such terms are defined in the
rules and regulations promulgated under the Securities Act), is
presently a party, including, without limitation, any agreement
or other arrangement providing for the furnishing of services by,
rental of real or personal property from, or otherwise requiring
payments to, any such person or entity.
(b) Except as specified on Schedule 3.27(b), all
Contracts required to be listed on Schedule 3.27(a) are valid and
binding, enforceable in accordance with their respective terms
and in full force and effect. Neither the Company nor, to the
Company's knowledge, any other party thereto, is in material
breach of any provision of or in material default under any term
of any such agreement, and to the Company's knowledge there
exists no condition or event which after lapse of time or notice
(or both) would constitute any such breach or default or result
in any right to accelerate or loss of rights. True and complete
copies of all such Contracts have been delivered to QuadraMed,
Sub A and Sub B.
3.28. Material Misstatements or Omissions. The
statements, representations and warranties of RHP contained in
this Agreement (including the schedules hereto), taken together,
do not contain and will not contain any untrue statement of a
material fact and do not or will not omit to state a material
fact necessary to make the statements or facts contained herein
or therein, in light of the circumstances made, not misleading.
3.29. Broker's, Finders or Other Transaction Fees.
There are no broker's or finder's fees or obligations due to
persons engaged by RHP or any of the Partners or any of the
Company's employees, officers or directors in connection with the
transactions contemplated by this Agreement, except for the fees
and expenses of its investment bankers, counsel and accountants
as set forth on Schedule 3.29.
3.30. Customers and Suppliers. As of the date hereof,
no customer which individually accounted for more than 5% of the
Company's gross revenues during the twelve (12) month period
preceding the date hereof has notified the Company that it will
stop, or decrease materially the rate of, buying services or
products of the Company, other than expirations of Contracts in
the ordinary course or any such actions which would not
reasonably be expected to have a Material Adverse Effect. As of
the date hereof, no material supplier of the Company has
indicated to the Company that it will stop, or decrease the rate
of, supplying materials, products or services to the Company,
other than expirations of Contracts in the ordinary course or any
such actions which would not reasonably be expected to have a
Material Adverse Effect.
3.31. Investment Representations of RHP. RHP represents
and warrants to QuadraMed and the Merger Subs as follows:
(a) RHP is an "accredited investor" within the meaning
of Rule 501(a) of the Securities Act.
(b) RHP is aware that the QuadraMed Shares have not
been registered under the Securities Act or any applicable state
securities laws, and agrees that the QuadraMed Shares will not be
offered or sold in the absence of registration under the
Securities Act and any applicable state securities laws or an
exemption from the registration requirements of the Securities
Act and any applicable state securities laws, subject to Section
4.8 hereof. RHP will not transfer the Shares in violation of the
provisions of any applicable federal or state securities laws,
subject to Section 4.8 hereof. In this connection, RHP
represents that it is familiar with SEC Rule 144 promulgated
pursuant to the Securities Act ("Rule 144"), as presently in
effect, and understands the resale limitations imposed thereby
and by the Securities Act.
(c) RHP understands that the offering and sale of the
QuadraMed Shares is exempt from registration under the Securities
Act, by virtue of Section 4(2) of the Securities Act, based, in
part, upon representations, warranties and agreements contained
in this Agreement, and that QuadraMed may rely on such
representations, warranties and agreements in connection
therewith.
(d) RHP is acquiring the QuadraMed Shares for its own
account and for investment, and not with a view to the
distribution thereof or with any present intention of
distributing or selling any of the Shares except in compliance
with the Securities Act, subject to Section 4.8 hereof.
ARTICLE IV.
COVENANTS OF RHP
RHP hereby covenants and agrees as follows:
4.1. Conduct of Company's Business. During the period from
the date of this Agreement and continuing until the earlier of
the termination of this Agreement or the Effective Time, except
as expressly contemplated by this Agreement or disclosed on any
Schedule hereto, RHP shall not do, cause or permit any of the
following, or allow, cause or permit any of its Subsidiaries to
do, cause or permit any of the following, without the prior
written consent of QuadraMed, which consent shall not be
unreasonably withheld:
(a) Material Contracts. Enter into any contract or
commitment, or violate, amend or otherwise modify or waive any of
the terms of any of its contracts, other than in the ordinary
course of business consistent with past practice and in no event
shall such contract, commitment, amendment, modification or
waiver be in excess of $250,000;
(b) Issuance of Securities. Issue, deliver or sell or
authorize or propose the issuance, delivery or sale of, or
purchase or propose the purchase of, shares of a Subsidiary's
capital stock or securities convertible into, or subscriptions,
rights, warrants or options to acquire, or other agreements or
commitments of any character obligating it to issue any such
shares or other convertible securities, other than the issuance
of shares of its Subsidiaries' common stock pursuant to the
exercise of stock options, warrants or other rights therefor
outstanding as of the date of this Agreement;
(c) Intellectual Property. Transfer to any person or
entity any rights to its Intellectual Property other than in the
ordinary course of business consistent with past practice;
(d) Exclusive Rights. Enter into or amend any
agreements pursuant to which any other party is granted exclusive
marketing or other exclusive rights of any type or scope with
respect to any of its products or technology;
(e) Dispositions. Sell, lease, license or otherwise
dispose of or encumber any of its properties or assets which are
material, individually or in the aggregate, to its and its
subsidiaries' business, taken as a whole, except in the ordinary
course of business consistent with past practice;
(f) Indebtedness. Incur any indebtedness for borrowed
money or guarantee any such indebtedness or issue or sell any
debt securities or guarantee any debt securities of others;
(g) Leases. Enter into any operating lease in excess
of $25,000 each;
(h) Payment of Obligations. Pay, discharge or satisfy
in an amount in excess of $25,000 in any one case or $100,000 in
the aggregate, any claim, liability or obligation (absolute,
accrued, asserted or unasserted, contingent or otherwise) arising
other than in the ordinary course of business, other than the
payment, discharge or satisfaction of liabilities reflected or
reserved against in the Company Financial Statements;
(i) Capital Expenditures. Make any capital
expenditures, capital additions or capital improvements except in
the ordinary course of business and consistent with past
practice;
(j) Insurance. Materially reduce the amount of any
material insurance coverage provided by existing insurance
policies;
(k) Employee Benefit Plans; New Hires; Pay Increases.
Adopt or amend any employee benefit or stock purchase or option
plan, or hire any new director level or officer level employee
(except that it may hire a replacement for any current director
level or officer level employee if it first provides QuadraMed
advance notice regarding such hiring decision), pay any special
bonus or special remuneration to any employee or director, or
increase the salaries or wage rates of its employees other than
in the ordinary course of business;
(l) Severance Arrangements. Grant any severance or
termination pay (i) to any partner, director or officer or (ii)
to any other employee except (A) payments made pursuant to
written agreements existing on the date hereof or (B) grants
which are made in the ordinary course of business in accordance
with its past practice;
(m) Lawsuits. Commence a lawsuit other than (i) for
the routine collection of bills, (ii) in such cases where it in
good faith determines that failure to commence suit would result
in the material impairment of a valuable aspect of its business,
provided that it consults with QuadraMed prior to the filing of
such a suit, or (iii) for a breach of this Agreement;
(n) Acquisitions. Acquire or agree to acquire by
merging or consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any business or
any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree
to acquire any assets which are material, individually or in the
aggregate, to its and its Subsidiaries' business, taken as a
whole, or acquire or agree to acquire any equity securities of
any corporation, partnership, association or business
organization;
(o) Taxes. Other than in the ordinary course of
business, make or change any material election in respect of
Taxes, adopt or change any accounting method in respect of Taxes,
file any material Tax Return or any amendment to a material Tax
Return, enter into any closing agreement, settle any claim or
assessment in respect of Taxes, or consent to any extension or
waiver of the limitation period applicable to any claim or
assessment in respect of Taxes, provided that this covenant shall
not apply to the tax position of RHP;
(p) Revaluation. Revalue any of its assets, including
without limitation writing down the value of inventory or writing
off notes or accounts receivable other than in the ordinary
course of business; or
(q) Other. Take or agree in writing or otherwise to
take, any of the actions described in Sections 4.1 (a) through
(p) above.
4.2. Access and Information. The Company will grant
reasonable access to QuadraMed and its counsel, accountants and
other representatives, during reasonable working hours throughout
the period from the date hereof to the Closing and upon
reasonable prior notice, to all of the Company and the Company's
properties, books, contracts, commitments and records, and will
furnish QuadraMed during such period with reasonable access to
key Company employees and to all such information concerning the
affairs of the Company as QuadraMed reasonably requests,
including copies and/or extracts of pertinent records, documents
and contracts.
4.3. Further Efforts.
(a) RHP shall use reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the Mergers and the
other transactions contemplated hereby in accordance with the
terms of this Agreement. In case further action is required to
carry out the purposes of this Agreement, RHP will use reasonable
efforts to effectuate all such action.
(b) As soon as reasonably practicable after the date
hereof, and in any event on or prior to the Closing, RHP will use
reasonable efforts to obtain the consents of all necessary
governmental entities to the Mergers. No consents of any party
to the Contracts of the Company shall be required as a condition
to the Closing.
4.4. Confidentiality. In the event of the termination of
this Agreement, the Company and its representatives shall keep
all information with respect to QuadraMed which has been
disclosed to the Company pursuant to this Agreement confidential
in accordance with the terms of the Confidentiality Agreement by
and between the Company and QuadraMed and shall promptly return
to QuadraMed all written information provided to the Company by
QuadraMed.
4.5. Subsequent Events. RHP shall promptly, and in any
event prior to the Closing, advise QuadraMed in writing of the
occurrence of any event or the existence of any state of facts of
which the Company obtains knowledge which in any material respect
would render any representation or warranty of RHP hereunder
inaccurate or which would preclude satisfaction of any condition
contained in Article VII or Article VIII of this Agreement;
provided, that no such notification shall affect any such
representation, warranty or condition. RHP shall have the right,
without being deemed to be in breach of its representations and
warranties set forth in Article III, to supplement or amend the
Schedules to this Agreement with respect to any matter arising
after the date hereof; provided, however that RHP obtains the
prior written consent of QuadraMed, which consent shall not be
unreasonably withheld.
4.6. Public Announcement. So long as this Agreement is in
effect, RHP nor any of its Affiliates shall issue or cause the
issuance or the publication of any press release or any other
public announcement (including, without limitation, disclosure to
employees) with respect to the Mergers or any other transaction
contemplated by this Agreement without the prior review and
written consent of QuadraMed, unless required by law.
4.7. Exclusive Dealing. From the execution of this
Agreement until the Closing or the earlier termination of this
Agreement, RHP (i) will not directly or indirectly, through any
representative or otherwise, solicit or entertain offers with or
in any manner encourage, discuss, accept or consider any proposal
of any other Person relating to the acquisition of RHP or RHP
Partnership Interests, its assets or business, in whole or in
part, whether directly or indirectly, through purchase, merger,
consolidation or otherwise (other than sales of inventory or
other dispositions in the ordinary course), and (ii) will
immediately notify QuadraMed regarding any contact between RHP
and any other Person or their respective representatives
regarding any such offer or proposal or any related inquiry,
except as contemplated by Section 4.9.
4.8. Restrictions on Transferability of QuadraMed Shares,
Compliance with Securities Act.
(a) Subject to Sections 4.8(c) and (d) below, the
QuadraMed Shares shall not be transferable in the absence of an
effective registration statement under the Securities Act or an
exemption therefrom. In the absence of an effective registration
statement under the Securities Act, neither the QuadraMed Shares
nor any interest therein shall be sold, transferred, assigned or
otherwise disposed of, unless QuadraMed shall have previously
received an opinion of counsel knowledgeable in federal
securities law, in form and substance reasonably satisfactory to
QuadraMed and accompanied by such supporting documents as
QuadraMed may reasonably request, to the effect that registration
under the Securities Act is not required in connection with such
disposition or as otherwise provided below. QuadraMed shall be
entitled to give stop transfer instructions to its transfer agent
with respect to the QuadraMed Shares in order to enforce the
foregoing restrictions.
(b) The certificate or certificates representing the
QuadraMed Shares issued to RHP at the Closing shall bear the
following legend restricting transfer:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. NOTWITHSTANDING
THE FOREGOING, THESE SECURITIES MAY BE TRANSFERRED TO THE
PARTNERS OF RESOURCE HEALTH PARTNERS, L.P. ("RHP") OR THE
PARTNERS OF THE GENERAL PARTNER OF RHP WITHOUT AN OPINION OF
COUNSEL, PROVIDED THAT SUCH TRANSFER IS ACCORDANCE WITH THE TERMS
AND CONDITIONS SET FORTH IN THE ACQUISITION AGREEMENT AND PLAN OF
MERGER DATED DECEMBER 29, 1997 AMONG QUADRAMED CORPORATION, RHP
AND THE OTHER PARTIES THERETO."
(c) Notwithstanding anything to the contrary herein
contained, the parties acknowledge that RHP intends to transfer
the QuadraMed Shares (including any such shares released from
escrow and any shares received in payment of indemnification
claims under Section 10.3) to the Partners and the General
Partner intends to further transfer QuadraMed Shares it receives
to its partners, from time to time after the Closing, and that
one or more of such transferees may not be "accredited investors"
within the meaning of Rule 501(a) of the Securities Act.
(d) RHP agrees that, as a condition to transferring
any QuadraMed Shares to a transferee, (i) RHP will require such
transferee to provide an investment representation letter in
substantially the form of Exhibit G to this Agreement (the
"Investment Representation Letter") and (ii) RHP will provide to
QuadraMed and, to the extent required, to QuadraMed's transfer
agent, a written notice from RHP requesting such transfer, and
representing that (A) the transferee is a partner of RHP or RHP
GP, L.P., (B) the transfer does not require registration under
the Securities Act, and (C) the transferee has executed and
delivered to RHP a copy of the Investment Representation Letter,
a copy of which shall be attached to such notice. RHP may also,
at its option, obtain a signed Registration Rights Agreement (or
counterpart signature page) from each transferee, and QuadraMed
agrees each such transferee shall thereupon become a party to
such agreement, all on the terms of the Registration Rights
Agreement. QuadraMed agrees that such transfers may be made,
that it shall not issue any stop transfers, and that it will not
require any opinion in respect of such transfers. QuadraMed
shall, and will instruct the transfer agent to, cause such
transfer of QuadraMed Shares to be effected and record such
transfer in the names of each transferee and will provide RHP
with such copies of QuadraMed's public filings as RHP may
reasonably request.
4.9. Third Party Acquisitions.
(a) RHP agrees that neither it nor any of its
employees or partners shall, and it shall direct and use its
reasonable best efforts to cause its agents and representatives
(including the Company Advisors), not to directly or indirectly,
initiate, solicit, encourage or otherwise facilitate any
inquiries in respect of, or the making of any proposal for, a
Third Party Acquisition. RHP further agrees that neither it nor
any of its employees shall, and it shall direct and use its
reasonable best efforts to cause all Company Advisors not to,
directly or indirectly, engage in any negotiations concerning, or
provide any confidential information or data to, or have any
discussions with, any Third Party relating to the proposal of a
Third Party Acquisition or other wise facilitate any effort or
attempt to make or implement a Third Party Acquisition; provided,
however, that if at any time prior to the Effective Time, the
Advisory Committee of RHP determines in good faith, after
consultation with outside counsel, that it is necessary to do so
in order to comply with its fiduciary duties to RHP's Limited
Partners under applicable law, RHP may, in response to an
inquiry, a proposal or offer for a Third Party Acquisition which
was not solicited subsequent to the date hereof, (x) furnish only
such information with respect to RHP to any such person pursuant
to a customary confidentiality agreement as was delivered to
QuadraMed prior to the execution of this Agreement and (y)
participate in the discussions and negotiations regarding such
inquiry, proposal or offer. RHP shall immediately cease and cause
to be terminated any existing activities, discussions or
negotiations with any Third Parties conducted heretofore with
respect to any of the foregoing. RHP shall take the necessary
steps to promptly inform all Company Advisors of the obligations
undertaken in this Section 4.9. RHP agrees to notify QuadraMed
promptly if (i) any inquires relating to or proposals for a Third
Party Acquisition are received by RHP or any of the Company
Advisors, (ii) any confidential or other non-public information
about RHP is requested from RHP or any of the Company Advisors,
or (iii) any negotiations or discussions in connection with a
possible Third Party Acquisition are sought to be initiated or
continued with RHP or any of the Company Advisors indicating, in
connection with such notice, subject to the fiduciary duties of
the Advisory Committee of RHP under applicable law, the principal
terms and conditions of any proposals or offers, including the
identity of the offering party, and thereafter shall keep
QuadraMed informed in writing, on a reasonably current basis, on
the status and terms of any such proposals or offers and the
status of any such negotiations or discussions.
(b) Except as permitted by this Section 4.9(b), the
Advisory Committee of RHP shall not withdraw its recommendation
of the Mergers and other transactions contemplated hereby or
approve or recommend, or cause RHP to enter into any agreement
with respect to, any Third Party Acquisition. Notwithstanding
the preceding sentence, if the Advisory Committee of RHP
determines in its good faith judgment, after consultation with
outside counsel, that it is necessary to do so in order to comply
with its fiduciary duties to RHP's Limited Partners under
applicable law, the Advisory Committee may withdraw or alter its
recommendation of the Mergers and the other transactions
contemplated hereby, or approve or recommend or cause RHP to
enter into an agreement with respect to a Superior Proposal, but
in each case only (i) after providing written notice to QuadraMed
(a "Notice of Superior Proposal") advising QuadraMed that the
Advisory Committee has received a Superior Proposal, specifying
the material terms and conditions of such Superior Proposal and
(ii) if QuadraMed does not, within four (4) business days (or
within two (2) business days with respect to any amendment to any
Superior Proposal which was noticed at least four (4) days prior
to such amendment) after QuadraMed's receipt of the Notice of
Superior Proposal, make an offer which the Advisory Committee of
RHP determines in its good faith judgment (based on the advice of
the financial advisor of RHP) to be as favorable to RHP's Limited
Partners as such Superior Proposal; provided, however, that RHP
shall not be entitled to enter into any agreement with respect to
a Superior Proposal unless this Agreement is concurrently
terminated by its terms pursuant to Section 11.1(g)(i).
4.10. Pooling of Interests. RHP acknowledges that the
Mergers are intended to be pooling of interests transactions.
RHP agrees that it shall not transfer any of the QuadraMed Shares
issued in the Mergers, other than a transfer to the partners of
RHP or RHP GP, L.P. in accordance with Section 4.8, until the
publication by QuadraMed of financial results that include at
least thirty (30) days of combined operations of QuadraMed and
the Subsidiaries. QuadraMed shall notify RHP promptly upon the
publication of such financial results.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
OF QUADRAMED, SUB A AND SUB B
Except as disclosed in a document of even date herewith and
delivered by QuadraMed, Sub A and Sub B to the Company prior to
the execution and delivery of this Agreement and referring to the
representations and warranties in this Agreement (the "QuadraMed
Disclosure Schedule"), QuadraMed, Sub A and Sub B represent and
warrant, jointly and severally, to the Company as follows:
5.1. Organization and Good Standing. QuadraMed, Sub A and
Sub B are corporations duly organized, validly existing and in
good standing under the laws of the State of Delaware and have
full corporate power and authority to own, lease and operate
their respective properties and carry on their respective
businesses and to enter into, deliver and perform their
respective obligations under and to consummate the transactions
contemplated by this Agreement. QuadraMed, Sub A and Sub B are
qualified to do business and are in good standing in each
jurisdiction where the character or location of the employment of
personnel or the nature of the business and activities conducted
by them, as the case may be, require such qualification, except
in such jurisdiction where the failure to be so qualified and in
good standing would not be material to the business of QuadraMed
and its subsidiaries, taken as a whole. QuadraMed, Sub A and Sub
B have delivered to RHP true and complete copies to their
respective charters and bylaws.
5.2. Capitalization of QuadraMed, Sub A and Sub B
(a) Except as described in this Section 5.2 or
Schedule 5.2, the authorized and outstanding capital stock of
QuadraMed is as set forth in the section entitled "Description of
Capital Stock" in QuadraMed's Prospectus dated October 21, 1997
as filed with the Securities and Exchange Commission and as
previously delivered to RHP. There are no other outstanding
shares of capital stock or voting securities of QuadraMed other
than shares of QuadraMed Common Stock issued after October 21,
1997 upon the exercise of options or warrants. All outstanding
shares of QuadraMed 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. Except for options or warrants
that were outstanding as of October 21, 1997, there are no other
options, warrants, calls, rights, commitments or agreements of
any character to which QuadraMed is a party or by which it is
bound obligating QuadraMed to issue, deliver, sell, repurchase or
redeem, or cause to be issued, delivered, sold, repurchased or
redeemed, any shares of the capital stock of QuadraMed or
obligating QuadraMed to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement. The
shares of QuadraMed Common Stock to be issued pursuant to the
Mergers will be duly authorized, validly issued, fully paid, and
non-assessable.
(b) As of the date of the Closing, the authorized
capital stock of Sub A consists of 1,000 shares of Sub A Common
Stock, par value $0.001 and the authorized capital stock of Sub B
consists of 1,000 shares of Sub B Common Stock, par value $0.001,
all of which shares are issued and outstanding and owned
beneficially and of record by QuadraMed. All of the Sub A Common
Stock and Sub B Common Stock outstanding on the date hereof has
been duly authorized and validly issued and is fully paid and
nonassessable. All of the outstanding Sub A Common Stock and Sub
B Common Stock is, and immediately prior to the Effective Time
will be, owned by QuadraMed.
5.3. Authority.
(a) QuadraMed, Sub A and Sub B have the necessary
corporate power and authority to enter into and deliver this
Agreement, to perform their obligations hereunder and to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby by QuadraMed, Sub A and Sub B
have been duly authorized by the Board of Directors of QuadraMed,
Sub A and Sub B in accordance with applicable law. No further
corporate action is necessary on the part of QuadraMed, Sub A or
Sub B to make this Agreement valid and binding upon QuadraMed,
Sub A and Sub B in accordance with its terms. This Agreement has
been duly and validly authorized, executed and delivered by
QuadraMed, Sub A and Sub B and this Agreement (assuming due
authorization, execution and delivery by the other parties
hereto) constitutes the legal, valid and binding obligation of
QuadraMed, Sub A and Sub B, enforceable in accordance with its
terms (except as such enforcement may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting the
rights of creditors generally or by general principles of
equity). Neither the execution, delivery nor performance of this
Agreement by QuadraMed, Sub A or Sub B, nor the consummation of
the transactions contemplated hereby, nor compliance by
QuadraMed, Sub A or Sub B with the terms and provisions of this
Agreement nor the Certificates of Merger will result in a
violation or breach of any term or provision of QuadraMed's, Sub
A's or Sub B's Certificates of Incorporation or Bylaws, or of any
statute, rule or regulation applicable to QuadraMed, Sub A or Sub
B or the business, properties, assets or personnel of QuadraMed
and its subsidiaries, taken as a whole, or conflict with or
constitute a violation or breach of, or a default under (or an
event which, with the passage of time or the giving of notice, or
both, would constitute a default under), nor give any party a
right to accelerate the due date of any indebtedness or
obligation under, any indenture, mortgage, deed of trust,
contract or agreement to which QuadraMed, Sub A or Sub B is a
party or to which the properties or assets of QuadraMed and its
subsidiaries, taken as a whole are subject, or any instrument,
judgment, decree, writ or other restriction to which either
QuadraMed, Sub A or Sub B is a party or by which the business,
properties, assets or personnel of QuadraMed and its
subsidiaries, taken as a whole are bound, except where such
conflict, violation, breach or default, either individually or in
the aggregate, would not result in a Material Adverse Effect.
(b) Except for filing the Certificates of Merger with
the Delaware and Pennsylvania Secretaries of State (as
appropriate), filing any necessary qualification or withdrawal
documents with state authorities, complying with any federal or
state securities law requirements and filing a Notification Form
for Listing of Additional Shares with Nasdaq National Market,
neither QuadraMed nor the Merger Subs are required to submit any
notice, report or other filing with any federal, state or local
governmental authority in connection with the execution or
delivery or performance by QuadraMed, Sub A and Sub B of this
Agreement or the consummation of the transactions contemplated
herein. QuadraMed does not have Annual Net Sales or Total Assets
of $100,000,000 or more. Capitalized terms used in the preceding
sentence shall have the meanings given to them under the Xxxx-
Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and
the rules promulgated thereunder.
5.4. QuadraMed Shares. As of the Closing, the QuadraMed
Shares have been duly reserved for delivery pursuant to the terms
of this Agreement and will, when so delivered, be duly
authorized, validly issued, fully paid and nonassessable shares
and will be free and clear of all liens, charges, restrictions,
claims, preemptive rights and Encumbrances.
5.5. QuadraMed SEC Filings. QuadraMed has furnished to RHP
a true and complete copy of the QuadraMed SEC Filings made since
September 30, 1997, and, prior to the Effective Time, QuadraMed
shall promptly furnish to RHP a true and complete copy of any
additional QuadraMed SEC Filings. The QuadraMed SEC Filings,
true, correct and complete copies of which have been furnished to
RHP, have been duly filed, were in substantial compliance with
the requirements of their respective report forms, were complete
and correct in all material respects as of the dates at which the
information under the respective forms were furnished and
contained, as of such date, do not contain an untrue statement of
a material fact nor omit to state a material fact necessary in
order to make the statements made therein not misleading, and
since September 30, 1997, there has not been any Material Adverse
Effect. The consolidated financial statements of QuadraMed and
the related notes and schedules included in the QuadraMed SEC
Filings comply fully with the requirements of the Exchange Act
and present fairly the consolidated financial position of
QuadraMed in accordance with generally accepted accounting
principles consistently applied, as of the dates indicated, and
the results of its operations and changes in financial position
for the periods therein specified (subject, in the case of
unaudited interim financial statements, to year-end adjustments).
The QuadraMed SEC Filings constitute all of the documents
required by applicable securities laws to be filed by it and all
such reports have been true, complete and correct in all material
respects.
5.6. Absence of Certain Changes. Except as disclosed on
Schedule 5.6 or in the QuadraMed SEC Filings and since September
30, 1997 (the "QuadraMed Balance Sheet Date"), QuadraMed 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, or might reasonably be expected to result in, a
material adverse effect to QuadraMed; (ii) any acquisition, sale
or transfer of any material asset of QuadraMed 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 QuadraMed or
any revaluation by QuadraMed of any of its assets; (iv) any
declaration, setting aside, or payment of a dividend or other
distribution with respect to the shares of QuadraMed, or any
direct or indirect redemption, purchase or other acquisition by
QuadraMed of any of its shares of capital stock; or (v) any
negotiation or agreement by QuadraMed or any of its subsidiaries
to do any of the things described in the preceding clauses (i)
through (iv) (other than negotiations with RHP and its
representatives regarding the transactions contemplated by this
Agreement).
5.7. Absence of Undisclosed Liabilities. Except as
disclosed on Schedule 5.7 QuadraMed has no 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 QuadraMed's Quarterly Report
on Form 10-Q for the period ended September 30, 1997 (the
"QuadraMed Balance Sheet"), (ii) those incurred in the ordinary
course of business and not required to be set forth in the
QuadraMed Balance Sheet under generally accepted accounting
principles and which are not material, and (iii) those incurred
in the ordinary course of business since the QuadraMed Balance
Sheet Date and consistent with past practice and would not have a
material adverse effect.
5.8. Restrictions on Business Activities. There is no
material agreement, judgment, injunction, order or decree binding
upon QuadraMed or any of its subsidiaries which has or reasonably
could be expected to have the effect of prohibiting or materially
impairing any current or future business practice of QuadraMed or
any of its subsidiaries, any acquisition of property by QuadraMed
or any of its subsidiaries or the conduct of business by
QuadraMed or any of its subsidiaries as currently conducted or as
proposed to be conducted by QuadraMed or any of its subsidiaries.
5.9. Legal and Regulatory Matters. Except as disclosed in
QuadraMed's SEC Filings, (i) there is no suit, action,
arbitration, known governmental investigation or other
proceeding, nor any order, decree or judgment pending or, to the
knowledge of QuadraMed, threatened by or against QuadraMed or any
of its properties, assets or business, or the transactions
contemplated hereby, which if determined adversely could
reasonably be expected to have a Material Adverse Effect; (ii)
there are no judgments, decrees or orders enjoining QuadraMed in
respect of, or the effect of which is to prohibit any business
practice or the acquisition of any property or the conduct of
business in any area that is material to the business of
QuadraMed; (iii) QuadraMed has complied and is complying with all
laws, ordinances, treaties and governmental rules, orders and
regulations applicable to it or its properties, assets, personnel
or business, non-compliance with which could reasonably be
expected to have a Material Adverse Effect; and (iv) QuadraMed
has obtained all material Licenses necessary for the ownership of
its properties and the conduct of its business as currently
conducted, and all such Licenses are currently in full force and
effect.
5.10. Broker's Fees. There are no broker's or finder's
fees or obligations due to persons engaged by QuadraMed, Sub A or
Sub B or any of their employees, officers or directors in
connection with the transactions contemplated by this Agreement,
except for fees and expenses of its counsel, accountants and
investment bankers.
5.11. Material Misstatements or Omissions. The
statements, representations and warranties of QuadraMed, Sub A
and Sub B contained in this Agreement (including the schedules
hereto) taken together, do not contain any untrue statement of a
material fact and do not state a material fact necessary to make
the statements or facts contained herein or therein, in light of
the circumstances made, not misleading.
5.12. Eligibility to Use Form S-3. QuadraMed currently
meets the "registrant requirements" set forth in the general
instructions to Form S-3 under the Securities Act of 1933, as
amended.
ARTICLE VI.
COVENANTS OF QUADRAMED, SUB A AND SUB B
QuadraMed and the Merger Subs hereby covenant and agree as
follows:
6.1. Conduct of QuadraMed's Business. During the period
from the date of this Agreement and continuing until the earlier
of the termination of this Agreement or the Effective Time,
QuadraMed agrees (except to the extent expressly contemplated by
this Agreement, disclosed on any schedule hereto, or as consented
to in writing by RHP), to carry on its business and its
subsidiaries' business in the usual, regular and ordinary course
in substantially the same manner as heretofore conducted, to pay
and to cause its subsidiaries to pay debts and Taxes when due
subject to good faith disputes over such debts or taxes, to pay
or perform other obligations when due, and to use all reasonable
efforts consistent with past practice and policies to preserve
intact its and its subsidiaries' present business organizations,
use its best efforts consistent with past practice to keep
available the services of its and its subsidiaries' present
officers and key employees and use its best efforts consistent
with past practice to preserve its and its subsidiaries'
relationships with customers, suppliers, distributors, licensors,
licensees, and others having business dealings with it or its
subsidiaries, to the end that its and its subsidiaries' goodwill
and ongoing businesses shall be unimpaired at the Effective Time.
QuadraMed agrees to promptly notify RHP of any event or
occurrence not in the ordinary course of its or its subsidiaries'
business, and of any event which could have a material adverse
effect on QuadraMed's business, taken as a whole.
Notwithstanding anything in this Section 6.1 to the contrary,
QuadraMed may negotiate and consummate acquisitions of businesses
or assets without providing notice to or obtaining the consent of
RHP. Without limiting the foregoing, except as expressly
contemplated by this Agreement, QuadraMed shall not do, cause or
permit any of the following, or allow, cause or permit any of its
subsidiaries to do, cause or permit any of the following, without
the prior written consent RHP:
(a) Charter Documents. Cause or permit any amendments
to its Certificate of Incorporation or Bylaws;
(b) Dividends; Changes in Capital Stock. Declare or
pay any dividends on or make any other distributions (whether in
cash, stock or property) in respect of any of its capital stock,
or split, combine or reclassify any of its capital stock or issue
or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for shares of its capital stock, or
repurchase or otherwise acquire, directly or indirectly, any
shares of its capital stock except from former employees,
directors and consultants in accordance with agreements providing
for the repurchase of shares in connection with any termination
of service to it or its subsidiaries; or
(c) Other. Take, or agree in writing or otherwise to
take, any of the actions described in Sections 6.1(a) and (b)
above, or any action which would make any of its representations
or warranties contained in this Agreement untrue or incorrect or
prevent it from performing or cause it not to perform its
covenants hereunder.
6.2. Further Efforts.
(a) QuadraMed agrees to use reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the Mergers
and the other transactions contemplated hereby in accordance with
the terms of this Agreement. In case at any time any further
action is necessary or desirable to carry out the purposes of
this Agreement, QuadraMed will use reasonable efforts to
effectuate all such action.
(b) As soon as reasonably practicable after the date
hereof, and in any event on or prior to the Closing, QuadraMed
will use reasonable efforts to obtain the consents of all
necessary governmental entities to the Mergers and the continued
operation by the Company of its business, properties, assets,
leaseholds, licenses, contracts and agreements.
6.3. Confidentiality. In the event of the termination of
this Agreement, QuadraMed and its representatives shall keep all
information with respect to the Company which has been disclosed
to QuadraMed pursuant to this Agreement confidential in
accordance with the terms of the Confidentiality Agreement
previously entered into by and between RHP and QuadraMed and
shall promptly return to RHP all written information provided to
QuadraMed by RHP.
6.4. Public Announcement. So long as this Agreement is in
effect, QuadraMed shall not, and shall cause its Affiliates not
to, issue or cause the publication of any press release or any
other public announcement (including, without limitation,
disclosure to employees) with respect to the Mergers or any other
transaction contemplated by this Agreement without the prior
review, and consultation with, RHP with respect to such press
release or other public announcement, unless required by law.
Notwithstanding the foregoing, RHP acknowledges and agrees that,
after consulting with RHP, QuadraMed may issue a press release
announcing the execution of this Agreement and may make any
filings required pursuant to the Exchange Act, which document
shall be presented to RHP for review and comment and which shall
be reasonably satisfactory to RHP prior to issuance or filing.
6.5. Benefits for Retained Employees. QuadraMed agrees to
cover (or cause to be covered) each employee (or their
dependents) of the Company who accepts or continues employment
with the Surviving Corporation effective as of and from the
Closing under QuadraMed's Employee Benefit Plans that are in
existence for comparably situated employees as of such date.
Such employees shall be granted service credit for their period
of employment with the Company and its Affiliates for eligibility
to participate and vesting purposes in the applicable Employee
Benefit Plans maintained by QuadraMed where such vesting is
allowed by law, including, without limitation, disability
programs and vacation. Without limiting the foregoing, such
employees and their dependents shall become eligible to
participate in QuadraMed's group medical plan as of the Closing
and shall be granted service credit for their period of
employment with the Company and its Affiliates, if they are
employed in a position or status that is eligible to participate
in such group medical plan.
6.6. Subsequent Events. QuadraMed shall promptly, and in
any event prior to the Closing, advise RHP in writing of the
occurrence of any event or the existence of any state of facts of
which QuadraMed obtains knowledge which in any material respect
would render any representation or warranty of QuadraMed
hereunder inaccurate or which would preclude satisfaction of any
condition contained in Article VII or Article IX of this
Agreement; provided, that no such notification shall affect any
such representation, warranty or condition.
6.7. Treatment of Mergers as Reorganization. QuadraMed, Sub
A and Sub B shall not take, and shall cause their Affiliates not
to take, such action that would cause the acquisition of Resource
Holdings and FRA to fail to qualify as a Reorganization within
the meaning of Section 368 of the Code.
ARTICLE VII.
GENERAL CONDITIONS PRECEDENT
The obligations of each party hereto to consummate the
Mergers and the other transactions contemplated by this Agreement
shall be subject to fulfillment and satisfaction on or prior to
the Closing of each of the following conditions:
7.1. No Injunctions. No injunction or restraining or other
order issued by a court of competent jurisdiction which prohibits
the consummation of the transactions contemplated, including,
without limitation, the issuance of the QuadraMed Shares by this
Agreement shall be in effect (each party agreeing to use
reasonably diligent efforts to have any such injunction or order
lifted), and no governmental action or proceeding shall have been
commenced or threatened in writing seeking any injunction or
restraining or other order that seeks to prohibit, restrain,
invalidate or set aside consummation of the transactions
contemplated by this Agreement.
7.2. No Governmental Proceedings. No action will have been
taken, and no statute, rule or regulation will have been enacted,
by any state or federal government agency that would render the
consummation of the Mergers illegal.
7.3. Governmental Approvals. All governmental filings or
approvals required in connection with the consummation of the
transactions contemplated by this Agreement, including, without
limitation, compliance with federal and state securities laws,
shall have been made or received.
7.4. Escrow Agreement. The parties thereto shall have
executed and delivered the Escrow Agreement.
7.5. Simultaneous Mergers. The Mergers shall have occurred
simultaneously at the Closing.
ARTICLE VIII.
CONDITIONS PRECEDENT TO QUADRAMED'S, SUB A'S AND SUB B'S
OBLIGATIONS TO CLOSE
The obligations of QuadraMed, Sub A and Sub B to consummate
the transactions contemplated by this Agreement are subject to
the fulfillment at or prior to the Closing of each of the
following conditions (unless waived pursuant to Section 11.4
hereof):
8.1. Certificates of RHP. The representations and
warranties of RHP under Article III shall have been true in all
material respects when made and shall be true in all material
respects as of the Closing with the same effect as though made at
such time, except for changes occurring or arising after the date
of this Agreement in carrying out the transactions contemplated
herein or which have been approved in writing by QuadraMed or in
the ordinary course of business. At the Closing, RHP shall have
delivered a certificate, signed by an executive officer of RHP,
dated as of the Closing Date, certifying that RHP has materially
performed all obligations and complied with all covenants and
conditions required by this Agreement to be performed or complied
with by it at or prior to the Closing.
8.2. No Material Adverse Effect. Since October 31, 1997,
the Company shall not have experienced any Material Adverse
Effect.
8.3. Legal Opinion of RHP's Counsel. QuadraMed, Sub A and
Sub B shall have received opinions, dated as of the Closing, of
Proskauer Rose LLP, counsel for RHP, and Crawford, Wilson, Xxxx &
Agulnick, special Pennsylvania counsel for Resource Holdings,
substantially in form and substance set forth as Exhibits H and I
hereto, respectively.
8.4. Certified Resolutions. RHP shall have delivered to
QuadraMed, Sub A and Sub B true and complete copies of the
resolutions of its Advisory Committee and the Boards of Directors
of Resource Holdings and FRA, pursuant to which the execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby were duly and validly
authorized, adopted and approved, certified by the a proper
officer and to be in full force and effect as of the Closing.
8.5. Employment Agreements. Employment agreements attached
in the form of Exhibit J shall be executed and delivered at the
Closing by Xxxxx Xxxx, Xxxxxx Xxxxxxxxxx, Xxxx Xxxxxx, Xxxx
Xxxxxxxx and Xxxxxx Xxxxx.
8.6. Proceedings Satisfactory to Counsel. All proceedings
taken by the Company and the Partners and all instruments
executed and delivered by the Company and the Partners on or
prior to the Closing in connection with the transactions
contemplated herein shall be reasonably satisfactory in form and
substance to the counsel for QuadraMed, Sub A and Sub B.
ARTICLE IX.
CONDITIONS PRECEDENT TO RHP'S
OBLIGATIONS TO CLOSE
The obligations of RHP and the Partners to consummate the
Mergers and the other transactions contemplated by this Agreement
are subject to the fulfillment and satisfaction at or prior to
the Closing of each of the following conditions (unless waived
pursuant to Section 11.4 hereof):
9.1. Certificates of QuadraMed, Sub A and Sub B. The
representations and warranties of QuadraMed, Sub A and Sub B
under Article V shall have been true in all material respects
when made and shall be true in all material respects as of the
Closing with the same effect as though made at such time, except
for changes occurring or arising after the date of this Agreement
in carrying out the transactions contemplated herein. QuadraMed,
Sub A and Sub B shall have performed all obligations and complied
with all covenants and conditions required by this Agreement to
be performed or complied with by them at or prior to the Closing,
and QuadraMed, Sub A and Sub B shall have delivered to the
Company certificates of QuadraMed, Sub A and Sub B, dated as of
the Closing and signed by an executive officer of QuadraMed, Sub
A and Sub B, certifying that QuadraMed, Sub A and Sub B have
materially performed all obligations and complied with all
covenants and conditions required by this Agreement to be
performed or complied with by them at or prior to Closing.
9.2. Certified Resolutions. QuadraMed, Sub A and Sub B
shall have delivered to the Company true and complete copies of
the resolutions of their respective Boards of Directors pursuant
to which the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby were duly
and validly authorized, adopted and approved, certified by the
Secretary of each and to be in full force and effect as of the
Closing.
9.3. Legal Opinion. RHP shall have received an opinion,
dated as of the Closing, of Xxxxxxx, Phleger & Xxxxxxxx, LLP,
counsel for QuadraMed, Sub A and Sub B substantially in form and
substance set forth on Exhibit K hereto.
9.4. Registration Rights Agreement. The parties shall have
executed and delivered the Registration Rights Agreement.
9.5. Employment Agreements. Employment agreements attached
in the form of Exhibit J shall be executed at the Closing by
Xxxxx Xxxx, Xxxxxx Xxxxxxxxxx, Xxxx Xxxxxx, Xxxx Xxxxxxxx and
Xxxxxx Xxxxx.
9.6. Closing Considerations and Expenses. QuadraMed shall
have (a) delivered Closing Consideration A and Closing
Consideration B to RHP in accordance with Article II, including
amounts to be placed into escrow pursuant to Section 10.2(c), and
(b) paid all expenses and liabilities referred to in Sections
2.14 and 2.15 to be paid at the Closing.
9.7. Proceedings Satisfactory to Counsel. All proceedings
taken by QuadraMed, Sub A and Sub B and all instruments executed
and delivered by QuadraMed, Sub A and Sub B on or prior to the
Closing in connection with the transactions contemplated herein
shall be reasonably satisfactory in form and substance to the
counsel for RHP and the Partners.
ARTICLE X.
SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATIONS
10.1. Survival of Representations, Etc.
(a) RHP Survival. All representations and warranties
and all covenants of RHP contained in this Agreement will survive
the Closing and remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the
parties to this Agreement, until one (1) year from the date of
Closing (the "RHP Survival Period"), at which time they shall
expire; provided, however, that, to the extent a claim is made in
writing by QuadraMed pursuant to Section 10.2 prior to the
expiration with respect to any breach of any such representation,
warranty or covenant, the RHP Survival Period with respect to
such claim shall be extended until such claim is finally
determined or settled, whereupon such representation, warranty or
covenant will expire.
(b) QuadraMed Survival. QuadraMed's, Sub A's and Sub
B's representations, warranties and covenants contained in this
Agreement will survive the Closing and remain in full force and
effect, regardless of any investigation made by or on behalf of
the parties to this Agreement, in the case of representations and
warranties, until one (1) year from the date of Closing, and, in
the case of covenants, for the duration of the covenants in
accordance with their terms (the "QuadraMed Survival Period"), at
which time they shall expire; provided, however, that to the
extent a claim is made in writing by RHP pursuant to Section 10.3
prior to the expiration with respect to any breach of any such
representation, warranty or covenant, the QuadraMed Survival
Period with respect to such claim shall be extended until such
claim is finally determined or settled whereupon such
representation, warranty or covenant will expire.
10.2. Indemnification by RHP.
(a) RHP, to the extent of the Escrow Shares, will
indemnify and hold harmless QuadraMed, Sub A and Sub B, and their
respective officers, directors, agents and Affiliates (each a
"QuadraMed Indemnified Person" and, collectively, the "QuadraMed
Indemnified Persons"), from and against any and all actions,
causes of actions, losses, costs, damages, liabilities and
expenses including, without limitation, reasonable out-of-pocket
legal fees and expenses ("Losses"), arising out of or relating to
any misrepresentation or breach of or default in connection with
any of the representations, warranties and covenants given or
made by RHP, Resource Holdings or FRA in this Agreement, in any
exhibit or schedule hereto or any certificate, document or
instrument delivered by or on behalf of RHP pursuant hereto. Any
claim for indemnification hereunder must be made in writing on or
prior to the expiration of the RHP Survival Period; provided,
however, that any claim made prior to such expiration shall
continue until such claim is finally determined or settled.
(b) Notwithstanding the foregoing, RHP shall have no
liability with respect to the matters described in paragraph (a)
above unless and until the aggregate amount of Losses for which
the QuadraMed Indemnified Persons are entitled to indemnification
exceeds $200,000 (the "Threshold Amount"). At such time as the
aggregate Losses exceed the Threshold Amount, the QuadraMed
Indemnified Persons shall be indemnified to the full extent of
all such Losses in excess of the Threshold Amount, to the extent
of the Escrow Shares. Notwithstanding the foregoing, any Losses
for which the QuadraMed Indemnified Persons are entitled to
indemnification relating to a breach of Section 3.11(b) hereof
shall not be subject to the Threshold Amount for any purpose
hereof.
(c) As security for the obligation to indemnify the
QuadraMed Indemnified Persons hereunder, concurrently with the
payment of the Closing Considerations by QuadraMed, RHP shall
deposit the Escrow Shares with the Escrow Agent pursuant to the
terms of the Escrow Agreement, as provided in Section 2.10.
(d) Anything herein to the contrary notwithstanding,
(i) neither RHP nor any Partner or other Person shall be liable
to any QuadraMed Indemnified Person for any Losses for which a
claim is made pursuant to this Section 10.2 or otherwise other
than to the extent of the Escrow Shares, and (ii) any and all
Losses to be indemnified pursuant to this Section 10.2 shall be
limited to and paid solely from the Escrow Shares. Any Losses to
be indemnified pursuant to this Section 10.2 shall be reimbursed
by the payment of the appropriate number of Escrow Shares,
calculated as provided herein, subject to the limitation in the
preceding sentence. To the extent any Loss is to be reimbursed
by the payment of Escrow Shares, the number of Escrow Shares to
be paid shall be calculated by dividing the amount of such claim
by the QuadraMed Stock Value. For the purposes of this Section
10.2(d), in the event QuadraMed is acquired by merger or
otherwise, the term "Escrow Shares" shall include all amounts
received in exchange for or in respect of the Escrow Shares.
(e) QuadraMed Indemnified Persons shall not be
entitled to recover under Section 10.2 to the extent the subject
matter of the claim is reimbursed by insurance proceeds
(including title insurance) received by QuadraMed, Surviving
Corporation A, Surviving Corporation B or any other Subsidiary.
(f) The amount of any recovery by any QuadraMed
Indemnified Person pursuant to Section 10.2 shall be net of any
actual Tax benefits inuring to such QuadraMed Indemnified Person
to the extent such Tax benefits result from such claim.
10.3. Indemnification by QuadraMed, Sub A and Sub B.
QuadraMed, Sub A and Sub B will indemnify and hold harmless RHP,
each of its Partners and their respective officers, directors,
agents and Affiliates ("RHP Indemnified Persons") from and
against any and all Losses arising out of or relating to any
misrepresentation or breach of or default in connection with any
of the representations, warranties and covenants given or made by
QuadraMed, Sub A and Sub B in this Agreement, in any exhibit or
schedule hereto or any certificate, document or instrument
delivered by or on behalf of QuadraMed, Sub A or Sub B pursuant
hereto.
10.4. Procedure for Indemnification of Claims. If a
QuadraMed Indemnified Person or a RHP Indemnified Person
(referred to herein as the "Indemnified Person") shall have a
claim for which such Indemnified Person seeks indemnification
pursuant to this Article X, the Indemnified Person shall give
prompt written notice of such claim to RHP (in the case of a
claim by a QuadraMed Indemnified Person), or to QuadraMed (in the
case of a claim by a RHP Indemnified Person) (referred to herein
as the "Indemnifying Person"), including in such notice a brief
description of the facts upon which such claim is based and, to
the extent known, the amount thereof. The giving of such notice
shall not be condition precedent to indemnification hereunder;
however, failure to give prompt notice shall reduce the
Indemnified Person's recovery from the Indemnifying Person by an
amount equal to the damages, costs and expenses (including
attorneys fees) or other Losses caused by such delay. If, after
the amount of the claim is specified in writing by the
Indemnified Person, the Indemnifying Person objects to any such
claim, it may give written notice to the Indemnified Person
within thirty (30) days of the later of receipt of the
Indemnified Person's notice of claim or the specification by the
Indemnified Person of the amount of the claim, advising the
Indemnified Person of its objection. If no such notice is timely
received from the Indemnifying Person by the Indemnified Person,
the Indemnified Person will be entitled to indemnification
hereunder in the amount of the Loss arising out of the claim
specified in the notice of claim. If the Indemnifying Person
advises the Indemnified Person within such thirty (30) day period
that it objects to the claim, the Indemnified Person and the
Indemnifying Person shall promptly meet and use their good faith
efforts to settle the dispute. If the Indemnified Person and the
Indemnifying Person are unable to reach agreement within thirty
(30) days after the Indemnifying Person objects to the claim,
then the disputed portion of the claim shall be submitted to
arbitration in accordance with Section 12.1. If the Arbitrators
shall determine that the Indemnified Person is entitled to
indemnification with respect to the dispute submitted, the
Indemnified Person will be entitled to indemnification hereunder
in the amount determined by such Arbitrators.
10.5. Settlement or Compromise. Any settlement or
compromise made or caused to be made by the Indemnified Person
or, the Indemnifying Person, as the case may be, of any third
party claim, suit, action or proceeding of the kind referred to
in Section 10.4 shall also be binding upon the Indemnifying
Person or the Indemnified Person, as the case may be, in the same
manner as if a final judgment or decree had been entered by a
court of competent jurisdiction in the amount of such settlement
or compromise, but no such settlement or compromise may be agreed
to without the consent of both the Indemnified Person and the
Indemnifying Person, such consent not to be unreasonably withheld
or delayed. The Indemnified Person will give the Indemnifying
Person at least thirty (30) days notice of any proposed
settlement or compromise of any claim, suit, action or proceeding
it is defending, during which time an Indemnifying Person may
assume the defense of such claim, suit, action or proceeding and
if it does so the proposed settlement or compromise may not be
made.
10.6. Third Party Claims. If a claim by a third party
is made against an Indemnified Person for which the Indemnified
Person is entitled to indemnification under this Article X, the
Indemnified Person shall promptly notify the Indemnifying Person
in writing of such claim. Such notice shall set forth such
information with respect to such claim as is then available to
the Indemnified Person. In the event the Indemnifying Person
elects to undertake to conduct and control, through counsel of
its own choosing, and at its sole risk and expense, the good
faith settlement and/or defense of such claim, the Indemnified
Person shall cooperate fully with the Indemnifying Person in
connection therewith; provided: (a) the Indemnified Person shall
be entitled to participate in such settlement or defense through
counsel of its own choosing, provided that the fees and expense
of such counsel shall be fully borne by the Indemnified Person,
and (b) the Indemnifying Person shall have, on a timely basis,
notified the Indemnified Person in writing of its election to
undertake the settlement or defense and confirmed in writing the
obligation of the Indemnifying Person to indemnify the
Indemnified Person for the liability asserted in such claim. The
Indemnifying Person shall obtain the written consent of the
Indemnified Person, which consent shall not be unreasonably
withheld, prior to ceasing to defend, settle or otherwise dispose
of such claim if as a result thereof the Indemnified Person would
become subject to injunctive or other equitable relief or the
business of the Indemnified Person would be materially adversely
affected in any manner. So long as the Indemnifying Person is
reasonably contesting any such claim in good faith, the
Indemnified Person shall fully cooperate with the Indemnifying
Person in the defense or settlement of such claim as is
reasonably required by the Indemnifying Person, and the
Indemnified Person shall not pay or settle such claim without the
consent of the Indemnifying Person; provided, however, that
notwithstanding the foregoing, the Indemnified Person shall have
the right to pay or settle any such claim at any time without the
consent of the Indemnifying Person if, and only if, in such
event, the Indemnified Person shall have waived in writing any
right to indemnification therefor. If the Indemnifying Person
does not give the Indemnified Person the timely written notice of
the undertaking referred to in clause (b) of this Section 10.6,
the Indemnified Person shall thereafter have the right to
contest, defend, settle or compromise the claim as a reasonably
prudent person would (as if no indemnification were available),
but shall not settle or compromise such claim except as provided
in Section 10.5, and shall keep the Indemnifying Person informed
of the progress of such matter.
10.7. Certificate of Incorporation and Bylaws.
Notwithstanding anything to the contrary herein contained, all
present and former officers, directors, officers, employees,
agents and representatives of the Subsidiaries who were entitled
to indemnification under the charter or by-laws of any such
Subsidiary or otherwise shall continue to be entitled to
indemnification by Surviving Corporation A, Surviving Corporation
B or such Subsidiary as applicable, or their respective
successors, from and against any claims, actions or other
liabilities arising after the Closing for which such Person would
have been entitled to indemnification by the Company if such
matter had arisen prior to the Closing. This provision is
intended to be for the benefit of such directors, officers,
employees, agents and representatives each of whom shall be a
third party beneficiary hereunder.
10.8. Exclusivity. The indemnification provisions
contained in this Article X shall be the sole and exclusive
remedy for the breach of this Agreement or any action taken in
connection with this Agreement, to the extent permitted by
applicable law, except for claims of fraud by any party.
ARTICLE XI.
TERMINATION
11.1. Termination. This Agreement and the Mergers
contemplated hereby may be terminated at any time prior to the
Closing, whether before or after approval of this Agreement and
the Mergers, as follows, and in no other manner:
(a) By mutual written consent of QuadraMed and RHP;
(b) By QuadraMed or RHP if any of the conditions set
forth in Article VII shall not have been satisfied as of the date
of the Closing;
(c) By QuadraMed if any of the conditions set forth in
Article X shall have not been satisfied as of the date of the
Closing;
(d) By RHP if any of the conditions set forth in
Article IX shall have not been satisfied as of the date of the
Closing;
(e) By either QuadraMed or RHP if the Closing shall
have not been consummated on or before December 31, 1997;
provided, however, with respect to (b)-(e) that the terminating
party has complied with or performed or tendered performance of
all covenants and agreements, and satisfied all conditions
contained herein which are to be complied with, performed or
satisfied by such party immediately prior to or at the Closing;
provided, further, that a party shall promptly notify the other
parties hereto in writing if it becomes aware of circumstances
which would cause such other party to breach or be unable to
comply with or perform the conditions set forth in Article VII,
VIII or IX as is appropriate;
(f) By QuadraMed if (i) the Advisory Committee of RHP
or any committee thereof shall have withdrawn or modified in a
manner adverse to QuadraMed, Sub A or Sub B its approval or
recommendation of this Agreement, the Mergers or any other
transaction contemplated by this Agreement; and either (A) the
Advisory Committee of RHP or any committee thereof shall have
recommended to the partners of RHP acceptance of a Third Party
Acquisition or (B) RHP shall have entered into any definitive
agreement with respect to a Third Party Acquisition; or (ii) RHP
shall have breached in any material respect any of its
representations, warranties, covenants or other agreements
contained in this Agreement which breach cannot be or has not
been cured 20 days after the giving of written notice to RHP;
(g) By RHP if (i) the Advisory Committee of RHP shall
have withdrawn or modified in a manner adverse to QuadraMed, Sub
A or Sub B its approval or recommendation of this Agreement or
the Mergers in order to approve the execution by RHP of a
definitive agreement providing for a Third Party Acquisition
contemplated by a Superior Proposal, provided that RHP shall have
compiled with the provisions of Section 4.9 and thereafter shall
comply with Section 11.3 below; or (ii) QuadraMed, Sub A or Sub B
shall have breached in any material respect any of their
respective representations, warranties, covenants or other
agreements contained in this Agreement which beach cannot be or
has not been cured 20 days after the giving of written notice to
RHP, Sub A or Sub B, as applicable;
(h) By QuadraMed, if the Fair Market Value shall be
less than $18.50 per share unless RHP agrees that, in such event,
the Fair Market Value shall be $18.50 per share for purposes of
the Mergers; or
(i) By RHP, if the Fair Market Value exceeds $32.00
per share at the Effective Time of the Mergers.
11.2. Effect of Termination. In the event that this
Agreement is terminated pursuant to Section 11.1 hereof, all
further obligations of the parties hereto under this Agreement
shall terminate without further liability of any party to
another, and each party hereto will pay all costs and expenses
incident to its negotiation and preparation of this Agreement and
to its performance of and compliance with all agreements and
conditions contained herein or therein on its part to be
performed or complied with, including the fees, expenses and
disbursements of its counsel; provided, that the obligations of
RHP contained in Section 4.4 hereof and the obligations of
QuadraMed, Sub A and Sub B contained in Section 6.3 hereof shall
survive any such termination; and provided, further, that nothing
herein shall relieve any party of any liability with respect to
or arising out of any breach of its obligations, covenants or
agreements hereunder and such termination shall not constitute an
election of remedies nor limit the non-breaching parties from
pursuing whatever rights and remedies they may have at law, in
equity or otherwise.
11.3. Certain Payments. In the event that this Agreement
is terminated pursuant to Section 11.1(f)(i) or Section
11.1(g)(i) and the Third Party Acquisition referred to in Section
11.1(g)(i) is consummated within one year after termination, then
RHP shall pay QuadraMed promptly upon consummation of the Third
Party Acquisition (but in no event later than two business days
after the consummation of the Third Party Acquisition shall have
occurred) a fee of One Million Dollars ($1,000,000), which amount
shall be payable in immediately available funds.
11.4. Waiver of Conditions. If any of the conditions
specified in Article VII hereof has not been satisfied, QuadraMed
and RHP may nevertheless mutually agree to proceed with the
transactions contemplated hereby. If any of the conditions
specified in Article VIII hereof has not been satisfied,
QuadraMed, Sub A and Sub B may nevertheless at the election of
QuadraMed proceed with the transactions contemplated hereby. If
any of the conditions specified in Article IX hereof has not been
satisfied, RHP may nevertheless at the election of RHP proceed
with the transactions contemplated hereby.
11.5. Payment of Expenses. QuadraMed shall pay directly
at the Closing (except as otherwise indicated on Schedule 3.29)
all fees and expenses of the Company Advisors in connection with
this Agreement and the transactions contemplated hereby. All
such fees and expenses are listed on Schedule 3.29 hereto. RHP
hereby represents and warrants that the Company has not
previously paid any portion of such fees or expenses. QuadraMed
shall pay directly all fees and expenses incurred in connection
with registration and listing on Nasdaq of the QuadraMed Shares.
ARTICLE XII.
GENERAL
12.1. Arbitration.
(a) For purposes of arbitration pursuant to Section
6.1(c), Indemnified Person and the Indemnifying Person shall each
select an arbitrator to serve on a three party arbitration panel
and the arbitrators so selected shall select the third arbitrator
to serve on such panel. The arbitration panel so selected shall
be referred to herein as the "Arbitrators." If any of the
selected Arbitrators decline or are unable to serve for any
reason, the appointed Arbitrators shall select another
arbitrator. Upon their failure to agree on another arbitrator,
the jurisdiction of any court of the State of California shall be
invoked to make such selection. The Arbitrators selected to
serve hereunder shall be qualified by training and experience for
the matters for which such Arbitrators are designated to serve.
(b) Any arbitration pursuant to Section 10.4, shall be
conducted as follows:
(i) The Arbitrators shall follow the Commercial
Arbitration Rules of the American Arbitration Association, except
as otherwise provided herein. The Arbitrators shall
substantially comply with the rules of evidence; shall grant
essential but limited discovery; shall provide for the exchange
of witness lists and exhibit copies; and shall conduct a pretrial
and consider dispositive motions. Each party shall have the
right to request the Arbitrators to make findings of specific
factual issues.
(ii) The Arbitrators shall complete their
proceedings and render their decision within thirty (30) days
after submission of the dispute to them, unless the parties agree
to an extension. Each party shall cooperate with the Arbitrators
to comply with procedural time requirements and the failure of
either to do so shall entitle the Arbitrators to extend the
arbitration proceedings accordingly and to impose sanctions on
the party responsible for the delay, payable to the other party.
In the event any arbitrator does not fulfill their
responsibilities on a timely basis, either party shall have the
right to require a replacement and the appointment of a new
arbitrator.
(iii) The decision of the Arbitrators shall be
final and binding upon the parties and accordingly a judgment by
any court of the State of California or any other court of
competent jurisdiction may be entered in accordance therewith.
(iv) Any arbitration shall be conducted in the
State of California.
(c) The costs of the arbitration conducted pursuant
hereto shall be borne equally by the parties to such arbitration,
except that each party shall bear its own legal and accounting
expenses and other expenses relating to its participation in such
arbitration.
12.2. Amendments. Subject to applicable law, this
Agreement, the Certificates of Merger and any exhibit attached
hereto or thereto may be amended by the parties hereto at any
time prior to the Effective Time; provided, however, that any
such amendment must be in writing and executed by all parties
hereto.
12.3. Assignment. The rights under this Agreement shall
not be assignable nor the duties delegable by any party without
the written consent of the other parties and nothing contained in
this Agreement, express or implied, is intended to confer upon
any person or entity, other than the parties hereto and their
successors in interest and permitted assignees, any rights or
remedies under or by reason of this Agreement unless so stated to
the contrary. Officers, directors and others entitled to
indemnification under Section 10.7 are third party beneficiaries
hereunder for purposes of enforcing such indemnification rights.
12.4. Notices. All notices, consents, waivers and other
communications under this Agreement must be in writing and will
be deemed to have been duly given when (i) delivered by hand
(with written confirmation of receipt), (ii) sent by facsimile
(with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or (iii)
when received by the addressee, if sent by a nationally
recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and facsimile numbers set
forth below (or to such other addresses and facsimile numbers as
a party may designate by notice to the other parties):
To QuadraMed: QuadraMed Corporation
00 X. Xxx Xxxxxxx Xxxxx Xxxx., Xxxxx 0X
Xxxxxxxx, Xx 00000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx
With a copy to: Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
Spear Street Tower
Xxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxx
To RHP: Resource Health Partners, L.P.
c/o X.X. Xxxxxx Investment Corporation
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx Xxx Xxxxxx
With copies to: X.X. Xxxxxx Investment Corporation
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx Xxx Xxxxxx
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxxxx
12.5. Further Assurances/Access.
(a) QuadraMed, Sub A and Sub B on the one hand, and
RHP, on the other hand, agree that from time to time after the
Closing, at the other's request and without further consideration
or consent, each will execute and deliver such additional
instruments as the other may reasonably request to confirm more
effectively the status of FRA and Resource Holdings as
subsidiaries of QuadraMed, and, from and after the date hereof if
there are any rights of the Company vis-a-vis third parties which
would not continue beyond the time of the Mergers without the
consent of any such third party, to try with the cooperation and
assistance of each other to obtain such consent promptly.
(b) QuadraMed, Surviving Corporation A and Surviving
Corporation Sub B shall grant reasonable access to RHP and its
counsel, accountants and other representatives, during reasonable
working hours from and after the Closing and upon reasonable
prior notice, to all of properties, books, contracts, commitments
and records related to the business and operations of the
Subsidiaries, and will furnish RHP during such period with
reasonable access to key employees and to all such information
concerning the affairs of the Subsidiaries as RHP reasonably
requests, including copies and/or extracts of pertinent records,
documents and contracts.
12.6. Entire Agreement. This Agreement (including all
exhibits and schedules attached hereto and thereto and all
documents delivered as provided for herein and therein) contain
the entire agreement among the parties hereto with respect to the
subject matter hereof and the transactions contemplated hereby
and supersedes all prior negotiations, discussions and
undertakings, both written and oral, among the parties hereto,
with respect to the subject matter hereof; provided, however,
that the Confidentiality Agreement between the parties hereto
shall continue in full force and effect.
12.7. Counterparts; Facsimile. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute
one and the same instrument. This Agreement may be executed by
facsimile (with originals to follow by United States mail), and
such facsimile shall be conclusive evidence of the consent and
ratification of the signatories hereto.
12.8. Governing Law. This Agreement shall be construed
by and enforced in accordance with the laws of the State of New
York without giving effect to the principles of the conflicts of
laws, except insofar as the laws of Delaware or Pennsylvania
apply to the Mergers.
(Remainder of Page Intentionally Left Blank)
IN WITNESS WHEREOF, the parties have duly executed this
Acquisition Agreement and Plan of Merger as of the date first
written above.
QUADRAMED CORPORATION
By: /s/ Xxxx X. Xxxxxxxxxx
Name:
Title:
RH ACQUISITION CO.
By: /s/ Xxxx X. Xxxxxxxxxx
Name:
Title:
FA ACQUISITION CO.
By: /s/ Xxxx X. Xxxxxxxxxx
Name:
Title:
RESOURCE HEALTH PARTNERS, L.P.
By: RHP GP, L.P., its general partner
By: RHP Health, Inc., its general
partner
By: /s/ Xxx X. Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: President
[SIGNATURE PAGE NO. 1 TO ACQUISITION AGREEMENT AND
PLAN OF MERGER]
RESOURCE HOLDINGS, LTD.
By: /s/ Xxx X. Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: President
FRA ACQUISITION INC.
By: /s/ Xxx X. Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: President
[SIGNATURE PAGE NO. 2 TO ACQUISITION AGREEMENT AND
PLAN OF MERGER]
EXHIBIT "A"
ESCROW AGREEMENT
EXHIBIT "B"
REGISTRATION RIGHTS AGREEMENT
EXHIBIT "C"
SUB A CERTIFICATE OF MERGER
EXHIBIT "D"
SUB B CERTIFICATE OF MERGER
EXHIBIT "E"
SUB A MERGER AGREEMENT
EXHIBIT "F"
ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT "G"
INVESTMENT REPRESENTATION LETTER
EXHIBIT "H"
OPINION OF PROSKAUER ROSE LLP
EXHIBIT "I"
OPINION OF PENNSYLVANIA COUNSEL
EXHIBIT "J"
EMPLOYMENT AGREEMENTS
EXHIBIT "K"
OPINION OF XXXXXXX, XXXXXXX & XXXXXXXX LLP
