Exhibit 3
September 30, 1996
Blue Cross Blue Shield of Texas, Inc.
000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxx, Xxxxx 00000
Gentlemen:
The undersigned understands that Blue Cross Blue Shield of Texas, Inc.
("BCBSTX") proposes to enter into Secured Convertible Term Loan Agreement with
Managed Care Solutions, Inc. ("MCS") pursuant to which BCBSTX proposes to loan
MCS $3,000,000 (the "Loan").
As an inducement to BCBSTX and in consideration of BCBSTX's agreement to
make the Loan and for other good and valuable consideration, receipt of which is
hereby acknowledged, the undersigned agrees that without your prior written
consent, he will not, directly or indirectly, prior to September 30, 1997,
offer, sell, contract to sell, pledge (except as provided below), grant any
option to purchase or otherwise dispose of any Common Stock, $.01 par value per
share (the "Common Stock"), including, without limitation, shares of Common
Stock which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and Exchange
Commission and shares of Common Stock which may be issued upon exercise of a
stock option or warrant, or any securities convertible into or exercisable or
exchangeable for such Common Stock or, in any manner, transfer all or a portion
of the economic consequences associated with or measured by the ownership of the
Common Stock, without the prior written consent of BCBSTX; provided, however,
that the undersigned may (i) at any time, transfer the Common Stock pursuant to
a bona fide gift made to a family member or to a charitable organization or to a
trust solely for the benefit therefor (provided that such transferee shall prior
thereto agree in writing to all of the restrictions on transfer referred to in
this letter and deliver a copy of such agreement to BCBSTX in form and substance
satisfactory to BCBSTX), or (ii) pledge the Common Stock to a lender as part of
a bona fide loan to the undersigned in an amount which at the time of such
pledge does not exceed more than 50% of the fair market value of such pledged
Common Stock and, such lender may, upon prior written notice to BCBSTX, sell or
otherwise dispose of such Common Stock as an exercise of its remedies under the
terms of the loan after a default on such loan by the undersigned, it being
understood that the undersigned will not enter into a pledge agreement unless
the lender agrees to be bound, and cause any transferee of such Common Stock as
a result of the lender's exercise of
Blue Cross Blue Shield of Texas, Inc.
September 30, 1996
Page 2
its rights under such pledge to be bound, by the provisions of this clause (ii)
with respect to the shares of Common Stock so pledged.
On and after October 1, 1997, the undersigned agrees that without your
prior written consent, he will not offer, sell, contract to sell or pledge
(except as provided above), grant any option to purchase or otherwise dispose of
any Common Stock (including, without limitation, shares of Common Stock which
may be deemed to be beneficially owned by the undersigned in accordance with the
rules and regulations of the Securities and Exchange Commission and shares of
Common Stock which may be issued upon the exercise of a stock option or warrant)
or any securities convertible into or exercisable or exchangeable for Common
Stock, or in any manner, transfer all or a portion of the economic consequences
associated with or measured by the ownership of the Common Stock, in an amount
which constitutes more than 1% of the outstanding Common Stock of the Company
during any six-month period ending on September 30. Notwithstanding the
foregoing, no such transaction shall occur until the undersigned shall have
given BCBSTX the first right to purchase any and all of such Common Stock on the
same terms and conditions of such proposed transaction. Such right of first
refusal shall be given to BCBSTX by means of a written notice from the
undersigned to BCBSTX that sets forth the name of the proposed transferee, the
number of shares proposed to be disposed of, the price per share, and all other
terms and conditions of the proposed disposition. If such terms and conditions
include the payment of noncash consideration, the fair value of such noncash
consideration shall, at BCBSTX's option be determined by the Board of Directors
of the Company in its reasonable judgment and BCBSTX shall be entitled to pay
the fair value of such consideration in cash. If BCBSTX shall not have exercised
such first right of refusal within 10 days of receiving written notice of the
undersigned's intent to enter into such a transaction, the undersigned shall be
entitled to proceed with such transaction, so long as such transaction is
consummated upon terms and conditions no less favorable to the undersigned than
those stated in the written notice of such proposed disposition and such
transaction is consummated 10 days after the expiration of BCBSTX's right of
first refusal or notice from BCBSTX in writing that it does not intend to
exercise its first right of refusal. Notwithstanding the foregoing, if the
undersigned proposed to sell stock within the above described 1% limit in a Rule
144 transaction, he will submit his completed Form 144 to BCBSTX. BCBSTX shall
have the right to purchase the shares which he proposes to sell for a period of
10 days following receipt of such form at the aggregate market value of such
shares set forth on the completed form. If BCBSTX does not elect to exercise its
right within ten days, the undersigned shall have the right to sell the shares
covered by his notice within 90 days following delivery of such notice in a bona
fide Rule 144 sale.
In addition, the undersigned agrees that the Company may (1) with respect
to any shares of Common Stock for which the undersigned is the record holder,
cause the transfer agent for the Company to note stop transfer instructions with
respect to such shares of Common Stock on the transfer books and records of the
Company and (ii) with respect to any shares of Common Stock for which the
undersigned is the beneficial holder but not the record holder, cause the record
Blue Cross Blue Shield of Texas, Inc.
September 30, 1996
Page 3
holder of such shares of Common Stock to cause the transfer agent for the
Company to note stop transfer instructions with respect to such shares of Common
Stock on the transfer books and records of the Company.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this letter agreement, and that, upon
request, the undersigned will execute any additional documents necessary or
desirable in connection with the enforcement hereof. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of the
undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, successors, and assigns of the undersigned.
This letter agreement shall be in effect and enforceable by BCBSTX until the
earlier of (i) one year after the conversion of the Loan into Common Stock or
(ii) payment of the Loan in full in cash. The provisions of this letter shall
inure to the benefit of BCBSTX and its successors and assigns and their
respective successors and assigns.
Very truly yours,
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
Accepted:
BLUE CROSS AND BLUE SHIELD
OF TEXAS, INC.
By: /s/ Xxxxxxx X. Xxxxx
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