EXHIBIT 2.8
ASSET PURCHASE AGREEMENT
dated as of
May 31, 2002
by and among
QUADRAMED OPERATING CORPORATION,
as Buyer,
and
TRANSCEND SERVICES, INC.
And
CASCADE HEALTH INFORMATION SOFTWARE, INC.
as Sellers
ARTICLE 1 DEFINITIONS.........................................................5
Section 1.01 Definitions...................................................5
ARTICLE 2 PURCHASE AND SALE...................................................8
Section 2.01 Sale and Transfer of Assets...................................8
Section 2.02 Retained Assets..............................................11
Section 2.03 Assumed Liabilities..........................................11
Section 2.04 Retained Liabilities.........................................12
Section 2.05 Purchase Price...............................................12
Section 2.06 Net Cash Reconciliation......................................12
Section 2.07 Closing .....................................................13
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLERS..........................13
Section 3.01 Organization, Standing and Corporate Power...................14
Section 3.02 Authority; Noncontravention..................................14
Section 3.03 Consents and Approvals.......................................14
Section 3.04 Financial Statements.........................................14
Section 3.05 Absence of Certain Changes or Events; No Undisclosed
Material Liabilities.........................................15
Section 3.06 Material Contracts...........................................15
Section 3.07 Real Property; Other Assets..................................16
Section 3.08 Software ....................................................16
Section 3.09 Intellectual Property........................................17
Section 3.10 No Infringement..............................................18
Section 3.11 Litigation, etc..............................................19
Section 3.12 Compliance with Applicable Laws..............................19
Section 3.13 Environmental Laws...........................................19
Section 3.14 Taxes........................................................19
Section 3.15 Benefit Plans................................................20
Section 3.16 Labor Matters................................................20
Section 3.17 Absence of Certain Practices.................................21
Section 3.18 Title to Acquired Assets.....................................21
Section 3.19 Product Liability............................................21
Section 3.20 Brokers......................................................21
Section 3.21 Completeness of Disclosure...................................21
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER............................21
Section 4.01 Organization, Standing and Corporate Power...................22
Section 4.02 Authority; Noncontravention..................................22
Section 4.03 Consents and Approvals.......................................22
Section 4.04 Broker.......................................................22
ARTICLE 5 COVENANTS OF SELLERS...............................................23
Section 5.01 Conduct of the Business......................................23
Section 5.02 Access to Information........................................24
Section 5.03 Exclusivity..................................................25
Section 5.04 Non-Solicitation of Employees. Non-Competition...............25
Section 5.05 Remittance of Accounts Receivable............................26
Section 5.06 Mail And Communications......................................27
Section 5.07 Notification of Certain Tax Matters..........................27
ARTICLE 6 COVENANT OF BUYER..................................................27
ARTICLE 7 COVENANTS OF BUYER AND SELLERS.....................................28
Section 7.01 Commercially Reasonable Efforts; Further Assurances..........28
Section 7.02 Public Announcements.........................................28
Section 7.03 Notices of Certain Events....................................28
Section 7.04 Transfer and Other Taxes.....................................29
Section 7.05 Further Assurances...........................................29
Section 7.06 Transfers Not Effected as of Closing.........................29
Section 7.07 Allocation of Purchase Price.................................30
ARTICLE 8 EMPLOYEE MATTERS...................................................30
Section 8.01 Transferred Employees.......................................30
Section 8.02 Cooperation.................................................30
ARTICLE 9 CONDITIONS TO CLOSING..............................................30
Section 9.01 Conditions to Obligations of Buyer and Sellers...............30
Section 9.02 Conditions to Obligation of Buyer............................31
Section 9.03 Conditions to Obligation of Sellers..........................32
ARTICLE 10 SURVIVAL; INDEMNIFICATION.........................................33
Section 10.01 Survival....................................................33
Section 10.02 Indemnification.............................................33
Section 10.03 Procedures..................................................34
Section 10.04 Additional Procedures.......................................35
Section 10.05 Calculation of Damages......................................35
Section 10.06 Dispute Resolutions.........................................35
Section 10.07 Effect of Investigation.....................................36
Section 10.08 Tax Treatment of Indemnification Payments...................36
Section 10.09 Right of Offset.............................................36
ARTICLE 11 TERMINATION.......................................................36
Section 11.01 Grounds for Termination.....................................36
Section 11.02 Effect of Termination.......................................37
ARTICLE 12 MISCELLANEOUS.....................................................38
Section 12.01 Notices.....................................................38
Section 12.02 Amendments and Waivers......................................39
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Section 12.03 Expenses....................................................39
Section 12.04 Successors and Assigns......................................39
Section 12.05 Governing Law...............................................39
Section 12.06 Jurisdiction................................................39
Section 12.07 Waiver of Jury Trial........................................40
Section 12.08 Counterparts; Third Party Beneficiaries.....................40
Section 12.09 Entire Agreement............................................40
Section 12.10 Captions....................................................40
Section 12.11 Severability................................................40
Section 12.12 Specific Performance........................................40
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List of Exhibits
Exhibit Document
------- --------------------
A ▇▇▇▇ of Sale
B Assumption Agreement
C Sublease Agreement
D Guaranty
List of Schedules
Schedule Description
-------- -----------
1.01 List of individuals with Knowledge
2.01(b) Assumed Contracts
2.01(c) Tangible Personal Property
2.01(d) Owned Software
2.01(e) Licensed Software
3.05(a) Absence of Certain Changes
3.05(b) No Undisclosed Material Liabilities
3.06 Material Contracts
3.08(a) Owned Software and Licensed Software
3.08(b) Persons with interest other than Cascade in Owned Software
3.08(c) Persons in possession or access to Source Code included in
Owned Software
3.08(d) Royalty Fees
3.08(f) Termination of any Agreement, License or Arrangement as a result
of Agreement.
3.09(a) List of all Intellectual Property
3.09(b) Restrictions on title to Intellectual Property
3.10(a) Infringement of Software or Intellectual Property
3.10(b) Infringement or lawsuits relating to Software or Intellectual
Property
3.11 Litigation
3.12 Compliance with Applicable Laws
3.13 Environmental Laws
5.01 Conduct of Business
8.01(a) Transferred Employees
9.02(i) Consents from Third Parties
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ASSET PURCHASE AGREEMENT
AGREEMENT, dated as of the close of business May 31, 2002, by
and among QuadraMed Operating Corporation, a Delaware corporation ("Buyer"),
Transcend Services, Inc., a Delaware corporation ("Transcend"), and Cascade
Health Information Software, Inc., an Oregon corporation and a wholly-owned
subsidiary of Transcend ("Cascade" and, together with Transcend,"Sellers" and
each, a"Seller").
W I T N E S S E T H :
WHEREAS, Sellers are the owners of the Acquired Assets
(defined in Section 2.01) used to conduct Cascade's coding and abstracting
health information management software business (the "Business"). The Business
is conducted at and the Acquired Assets are located at Seller's facility located
at ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the
"Facility"). The Business designs and markets software to automate the
abstracting, encoding, and reporting functions of the health management
departments of hospitals and clinics throughout the United States of America
under the product names of Cascade Master System, Cascade Encoder, and CMX;
WHEREAS, Buyer and Sellers have approved, and deem it
advisable to consummate, the purchase of the Acquired Assets by Buyer, which
purchase is to be effected by the sale by Sellers of all the Acquired Assets to
Buyer; and
WHEREAS, Buyer shall expressly assume from Cascade only the
Assumed Liabilities (defined in Section 2.03), in the manner provided for in
this Agreement, and Sellers shall retain any and all liabilities excluding only
the Assumed Liabilities.
NOW THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions. (a) The following terms, as used
herein, have the following meanings:
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with such Person.
"Agreement" means this Asset Purchase Agreement.
"Ancillary Agreements" means the ▇▇▇▇ of Sale, the
Assumption Agreement, the Intellectual Property Instruments, and the Sublease
Agreement.
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"Business Day" means any day other than a Saturday, Sunday or
a day on which banks in New York City are authorized or obligated by applicable
law or executive order to close or are otherwise generally closed.
"Claim" means any lawsuit, claim, action, arbitration,
proceeding (at law or in equity) or investigation.
"Closing Date" means the date of the Closing.
"Code" means the United States Internal Revenue Code of
1986, as amended.
"Employees" means the active employees of Cascade engaged
in the Business.
"Environmental Laws" means any federal, state or local law
relating to: (i) releases or threatened releases of Hazardous Substances or
materials containing Hazardous Substances; (ii) the manufacture, handling,
transport, use, treatment, storage or disposal of Hazardous Substances or
materials containing Hazardous Substances; or (iii) otherwise relating to
pollution of the environment or the protection of human health.
"Facility" means Cascade's Facility at ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, from which the Business is
conducted.
"Governmental Authority" means any national, federal,
regional, state, provincial, municipal, foreign or multinational court or other
governmental or regulatory authority, administrative body or government,
department, board, body, tribunal, instrumentality or commission of competent
jurisdiction.
"Hazardous Substances" means: (i) those substances defined
in or regulated under the following federal statutes and their state
counterparts, as each may be amended from time to time, and all regulations
thereunder: the Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water
Act, the Atomic Energy Act, the Federal Insecticide, Fungicide and Rodenticide
Act and the Clean Air Act; (ii) petroleum and petroleum products including crude
oil and any fractions thereof; (iii) natural gas, synthetic gas and any mixtures
thereof; (iv) radon; (v) any other contaminant; and (vi) any substance with
respect to which any Governmental Authority requires environmental
investigation, monitoring, reporting or remediation.
"Indebtedness" of any Person means, without duplication, (a)
all liabilities and obligations, contingent or otherwise, of any such Person:
(i) in respect of borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof), or (ii)
evidenced by bonds, notes, debentures or similar instruments, (iii) for the
payment of money relating to a capitalized lease obligation, or (iv) evidenced
by a letter of credit or a reimbursement obligation of such Person with respect
to any letter of credit; and (b) all liabilities and obligations of others of
the kind described in the preceding clause (a) and otherwise that such Person
has guaranteed or which are secured by a Lien on any assets or property of such
Person.
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"Knowledge" or words of similar import means actual knowledge
of the individuals set forth in Schedule 1.01 attached hereto and any
information which each of such representatives should have known upon execution
of this Agreement at the Closing Date if they exercised prudent business
judgment in the discharge of their duties in connection with the management and
operation of the Business, generally as if the transaction contemplated herein
had not occurred.
"Law" means any federal, state or local statute, law, rule,
regulation, ordinance, order, code, policy or rule of common law, now or
hereafter in effect, and in each case as amended, and any judicial or
administrative interpretation thereof by a Governmental Authority or otherwise,
including, without limitation, any judicial or administrative order, consent,
decree or judgment.
"Liabilities" means all debts, liabilities, claims, demands,
expenses, commitments and obligations (whether accrued or not, known or unknown,
disclosed or undisclosed, fixed or contingent, asserted or unasserted,
liquidated or unliquidated) whether arising prior to, at or after the Closing.
"Material Adverse Change" means any one or more changes,
events or occurrences which have had or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the applicable
Person.
"Material Adverse Effect" with respect to any Person means a
material adverse effect on (i) the ability of such Person to perform its
obligations under this Agreement and the Ancillary Agreements or to consummate
the transactions contemplated hereby or thereby or (ii) the condition (financial
or otherwise), assets, liabilities (actual or contingent), results of
operations, business or prospects of such Person taken as a whole.
"Permits" means licenses, permits, approvals, registrations,
waivers, exemptions, consents, authorizations, qualifications under or from any
federal, state, local or foreign laws or Governmental Authorities.
"Permitted Liens" means, collectively (i) Liens for Taxes or
assessments which are not delinquent or are being contested in good faith by
appropriate proceedings; (ii) mechanics', warehousemens', materialmens',
contractors', workmens', repairmens' and carriers' liens, and other similar
Liens arising in the ordinary course for obligations which are not delinquent;
(iii) the ordinary course rights, if any, of third-party suppliers or other
vendors having possession of equipment of Cascade; and (iv) Liens which do not
materially impair the current use or the value of the assets subject to such
Liens.
"Person" means an individual, corporation, partnership,
limited liability company, association, trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Taxes" means all taxes, charges, fees, levies or other
assessments, including, without limitation, all income, gross receipts, excise,
property, sales, use, occupation, transfer, license, ad valorem, gains, profits,
gift, estimated, social security, unemployment, disability,
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premium, recapture, credit, payroll, withholding, severance, stamp, capital
stock, franchise and other taxes or similar charges of any kind, imposed by any
Governmental Authority, including any interest and penalties on or additions
thereto.
"Tax Return" means any report, return or other information
or document required to be supplied to a taxing authority or jurisdiction in
connection with Taxes, including any amendments thereof and any schedules
thereto.
(b) Each of the following terms is defined in the Page set
forth opposite such term:
Term Page
-------------------------------------------------------------------------------
Accounts Receivable ....................................................... 11
Acquired Assets ........................................................... 9
Assumed Contracts ......................................................... 10
Assumed Liabilities ....................................................... 11
Assumption Agreement ...................................................... 32
Balance Sheets ............................................................ 15
▇▇▇▇ of Sale .............................................................. 32
Business .................................................................. 5
Business Information ...................................................... 26
Buyer ..................................................................... 5
Buyer Indemnitees ......................................................... 33
Cascade ................................................................... 5
Claim ..................................................................... 34
Closing ................................................................... 13
Copyrights ................................................................ 10
Damages ................................................................... 34
Deferred Revenues ......................................................... 12
Domain Names .............................................................. 10
Environmental Permits ..................................................... 20
Final Net Cash Reconciliation Statement ................................... 12
Financial Statements ...................................................... 15
GAAP ...................................................................... 15
Indemnified Party ......................................................... 34
Indemnifying Party ........................................................ 34
Independent Auditor ....................................................... 13
Infringe .................................................................. 18
Intellectual Property ..................................................... 10
Intellectual Property Instruments ......................................... 32
Interim Financial Statements .............................................. 15
Inventory ................................................................. 11
IRS ....................................................................... 20
Licensed Software ......................................................... 10
Liens ..................................................................... 16
Objection Period .......................................................... 12
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Term Page
-------------------------------------------------------------------------------
Owned Software ............................................................ 10
Patents ................................................................... 10
Permits ................................................................... 19
Preliminary Net Cash Reconciliation Statement ............................. 12
Purchase Price ............................................................ 12
Retained Assets ........................................................... 11
Seller .................................................................... 5
Seller Indemnitees ........................................................ 34
Seller Marks .............................................................. 28
Sellers ................................................................... 5
Software .................................................................. 10
Sublease Agreement ........................................................ 32
Tangible Personal Property ................................................ 10
Termination Date .......................................................... 37
Third Party Claim ......................................................... 35
Trade Secrets ............................................................. 10
Trademarks ................................................................ 9
Transcend ................................................................. 5
Transferred Employees ..................................................... 30
Warranty Breach ........................................................... 34
Year End Financial Statements ............................................. 15
ARTICLE 2
PURCHASE AND SALE
Section 2.01 Sale and Transfer of Assets. Upon the terms and
subject to the conditions of this Agreement, at the Closing, Sellers will sell,
convey, assign, transfer and deliver to Buyer, and Buyer will purchase, acquire
and accept from Sellers, all of their and their Affiliates' right, title and
interest in and to certain and specific assets, properties and rights used in or
related to the Business, as set forth below, including those items directly
related thereto (collectively, the "Acquired Assets"):
(a) Intellectual Property. Any and all (i) U.S. and foreign
trademarks, service marks, trade dress, logos, trade names, brand names,
corporate names, assumed names, business names, and general intangibles of like
nature, together with all goodwill, registrations and applications related to
the foregoing (collectively, the "Trademarks"); (ii) Internet domain names
(collectively, the "Domain Names"); (iii) U.S. and foreign patents, industrial
designs, invention disclosures, and any and all divisions, continuations,
continuations-in-part, reissues, continuing patent applications, reexaminations,
and extensions thereof, any counterparts claiming priority therefrom, utility
models, patents of importation/confirmation, certificates of invention,
certificates of registration and like statutory rights related to the foregoing
(collectively, the "Patents"); (iv) U.S. and foreign copyrights, and all
registrations and applications to register the foregoing (collectively, the
"Copyrights"); (v) all categories of trade
9
secrets as defined in the Uniform Trade Secrets Act and under corresponding
foreign statutory and common law, including, but not limited to, business,
technical and know-how information (collectively, the "Trade Secrets"); (vi)
Software (as defined below); (vii) rights of publicity and privacy relating to
the use of names, likenesses, voices, signatures and biographical information of
real persons; and (viii) all licenses and agreements pursuant to which Sellers
have acquired rights in or to any Trademarks, Domain Names, Patents, Trade
Secrets, technology, know-how, rights of publicity or Copyrights, or agreements
pursuant to which Sellers have licensed or transferred the right to use any of
the foregoing, each as owned or used by Sellers in connection with the conduct
of the Business (collectively, the "Intellectual Property"), but only as to the
Intellectual Property specifically set forth on Schedule 3.09(a);
(b) Contract Rights. Sellers' rights in the contracts and
agreements exclusively related to the Business, but only as to those contracts
and agreements specifically set forth on Schedule 2.01(b) hereof (the "Assumed
Contracts");
(c) Tangible Personal Property. The computer hardware,
machinery and similar items owned by Cascade or used in the Business, but only
as shown on Schedule 2.01(c);
(d) Owned Software. All of the computer programs (including
all source code and object code) owned by Cascade or used in the Business,
including without limitation computer programs in the development or testing
phase, all related engineering specifications, program flow charts, installation
and user manuals, and all know-how relating thereto (collectively, the "Owned
Software"), but only as to the Owned Software specifically set forth on
Schedule 2.01(d) hereof;
(e) Licensed Software. All of Sellers' rights in the computer
programs (including all source code and object code) licensed or otherwise made
available to Cascade or the Business by another person (collectively, the
"Licensed Software" and, together with the Owned Software, the "Software"),
but only as to the Licensed Software specifically listed on Schedule 2.01(e)
hereof;
(f) Books and Records. All existing books, records and files
maintained by or on behalf of Sellers in any form or medium (electronic, paper
or otherwise) relating to past, current or prospective customers or otherwise
principally related to the Business or the Acquired Assets, but not those
relating to Taxes, Tax Returns or other minute books, capital records and other
documents of Sellers to the extent that they do not relate to the Business or
the Acquired Assets (subject to Sellers' right to keep copies of the foregoing
for archival purposes);
(g) Leasehold. Buyer and Sellers shall enter into a sublease
for the Facility for a lease term of approximately eighteen (18) months,
commencing on the Closing Date, on the same terms and conditions as the lease
Cascade presently has for the Facility. After expiration of the approximately
eighteen (18) month term, the sublease may be renewed on a month-to-month basis
with the consent of both Buyer and Sellers. Upon expiration of the sublease,
Buyer shall deliver possession of the Facility to Sellers with the office
furniture and fixed assets;
(h) Inventory. All inventory relating to the Business,
including raw materials, work-in-process and finished goods (i) that was
procured to fulfill an open customer order and
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(ii) for which the vendor or supplier has been paid by Sellers but for which
Sellers have not invoiced their customers (the "Inventory");
(i) Goodwill. All goodwill of the Business;
(j) Accounts Receivable. All accounts, notes and loans
receivable, advances, letters of credit and other rights to receive payments
relating to the Business billed or unbilled as shown on the Final Net Cash
Reconciliation Statement ("Accounts Receivable");
(k) Any other asset that relates to any pre-paid expense of
the Business and shown on the Final Net Cash Reconciliation Statement.
Section 2.02 Retained Assets. Notwithstanding Section 2.01,
all of Sellers' and their Affiliates' right, title and interest in the following
properties, assets and rights shall be excluded from the Acquired Assets and not
sold or assigned to Buyer (collectively, the "Retained Assets"):
(a) All cash and cash equivalents of Cascade;
(b) Transcend's T2K software;
(c) Office furniture and fixtures located at the Facility;
and
(d) The security deposit for the Facility.
Section 2.03 Assumed Liabilities (a) Subject to the terms and
conditions set forth in this Agreement and excluding any and all other
liabilities of the Business or Sellers, at the Closing, Buyer shall assume and
thereafter pay, perform and discharge when due only the following liabilities
and obligations of the Business that have not been paid, performed or discharged
as of the Closing, (the "Assumed Liabilities"):
(i) The ordinary course liabilities and obligations
under the Assumed Contracts, to the extent such Assumed Contracts are actually
assigned to Buyer;
(ii) The ordinary course liabilities and obligations
related to accrued vacation pay, accrued sick leave, any other accrued employee
fringe benefits, and any other accrued incentive compensation, if any, for the
Transferred Employees or, subject to Section 5.01, incurred in the ordinary
course of business consistent with past practice and of the same type and
magnitude as those set forth in the Balance Sheet since the date of the Balance
Sheet and shown on the Final Net Cash Reconciliation Statement;
(iii) Liabilities for accounts payable, accrued expenses
and any other ordinary course liability of the Business occurring on or prior to
Closing, but only to the extent shown on the Final Net Cash Reconciliation
Statement; and
(iv) The liabilities and obligations arising as a result
of Buyer's ownership, use or operation of the Business or the Acquired Assets
subsequent to the Closing Date.
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(b) Nothing contained in this Section 2.03 or in any
instrument of assumption executed by Buyer at the Closing shall release or
relieve Sellers from their representations, warranties, covenants and agreements
contained in this Agreement or any certificate, schedule, instrument, agreement
or document executed pursuant hereto or in connection herewith, including,
without limitation, the obligations of Sellers to indemnify Buyer in accordance
with the provisions of Article 10 hereof.
Section 2.04 Retained Liabilities. Notwithstanding
anything in this Agreement to the contrary, Buyer shall not assume, and shall be
deemed not to have assumed, and Sellers shall retain, any and all Liabilities
relating to the Acquired Assets or to the Business or of Sellers or any of their
Affiliates, except as expressly provided in Section 2.03, and Sellers and their
Affiliates shall be solely and exclusively liable with respect to, and shall
pay, perform or discharge, indemnify, defend and hold harmless Buyer and its
Affiliates from and against, any loss, liability, damage, expense or Damages
arising from or relating to all Liabilities of Sellers and their Affiliates,
except as expressly provided in Section 2.03.
Section 2.05 Purchase Price. In consideration of the sale of
the Acquired Assets, in addition to the assumption by Buyer of the Assumed
Liabilities, Buyer shall pay to Transcend at the Closing $1,250,000 in cash by
wire transfer of immediately available funds to the bank account designated by
Transcend or in accordance with such other instructions as may be provided by
Transcend to Buyer (the "Purchase Price"), subject to adjustment by adding or
subtracting the amount shown in the Preliminary Net Cash Reconciliation
Statement as described below in Section 2.06;
Section 2.06 Net Cash Reconciliation. On the Closing Date,
the Sellers will deliver to the Buyer a "Preliminary Net Cash Reconciliation
Statement" of the Business as of the Closing Date that shall set forth the
difference between (a) the sum of (1) Accounts Receivable (net of allowance for
doubtful accounts), and (2) pre-paid expenses, minus (b) the sum of (1) accounts
payable, (2) accrued compensation, benefits, vacation pay, commissions, and
bonus, (3) other accrued expenses, and (4) the revenues paid or payable to
Sellers for products, installations, product enhancements, other obligations or
ongoing services billed by Sellers on or prior to the Closing Date to be
performed by the Business after the Closing Date ("Deferred Revenues").
Within ten (10) days after Closing, Buyer will deliver to
Sellers a "Final Net Cash Reconciliation Statement." The Sellers will have five
(5) days after the Sellers' receipt of the Final Net Cash Reconciliation
Statement to object to any item or items shown thereon (the "Objection Period").
The Sellers will notify the Buyer of any objections to the Final Net Cash
Reconciliation Statement, setting forth a description of such objection and the
dollar amount of such objection. If the Sellers do not object during the
Objection Period, the Final Net Cash Reconciliation Statement will be conclusive
and binding on the parties hereto. If the Sellers object during the Objection
Period and the Buyer and the Sellers are unable to resolve such objections
within fifteen (15) days after delivery by the Sellers of the Sellers'
objections, then all disagreements will be submitted for resolution to an
impartial certified public accounting firm of national standing reasonably
acceptable to the Buyer and the Sellers (the "Independent Auditor"), which will
be selected as promptly as practicable, but in no event later than ten (10) days
following the expiration of such 15-day period. If the Buyer and the Sellers
cannot agree on the
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Independent Auditor within the 10-day period, the selection of the Independent
Auditor will be made in the following manner: the Buyer will, within ten (10)
business days after the expiration on the 10 day period set forth above, deliver
to the Sellers a list of three (3) nationally recognized certified public
accounting firms together with the name of the partner at each firm who will be
responsible for handling the firm's engagement (such firm or partners must not
have performed services for the Buyer, the Sellers, or any Affiliate of the
Buyer or the Sellers), from which list the Sellers will select one (1) firm
within ten (10) days after receipt of the Buyer's list. The Independent Auditor
will have up to thirty (30) days after its appointment to resolve the disputes
submitted to it. The Final Net Cash Reconciliation Statement, either as agreed
to by the Buyer and the Sellers or as adjusted by the Independent Auditor
pursuant to the preceding sentence, will be final and binding. The fees and
expenses of the Independent Auditor will be shared equally by the Sellers and
the Buyer.
Upon establishment of the Final Net Cash Reconciliation
Statement, Sellers or Buyer, as the case may be, will promptly pay the
difference between the Final Net Cash Reconciliation Statement and the
Preliminary Net Cash Reconciliation Statement in cash in immediately available
funds to the other.
Section 2.07 Closing. The closing (the "Closing") of the
purchase and sale of the Acquired Assets hereunder shall take place at the
corporate office of QuadraMed Corporation, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ as soon as reasonably practicable, but in no event later than two (2)
Business Days after satisfaction or waiver of the conditions set forth in
Article 9. At the Closing, the parties shall deliver all funds, documents and
instruments required to be delivered pursuant to Article 9. By agreement of the
parties, closing may take place electronically, with original documents to be
exchanged as soon as practicable thereafter.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
Except as specifically set forth in the Schedules prepared and
signed by Sellers and delivered to Buyer simultaneously with the execution
hereof, each Seller jointly and severally represents and warrants to Buyer that
all of the statements contained in this Article 3 are true and complete as of
the date of this Agreement, and will be true and complete as of the Closing Date
as though made on the Closing Date. Each exception set forth in the Schedules
and each other response to this Agreement set forth in the Schedules is
identified by reference to, or has been grouped under a heading referring to, a
specific individual section of this Agreement and, except as otherwise
specifically stated with respect to such exception, relates only to such
section. In the event of any inconsistency between statements in the body of
this Agreement and statements in the Schedules (excluding exceptions expressly
set forth in the Schedules with respect to a specifically identified
representation or warranty), the statements in the body of this Agreement shall
control. Notwithstanding anything contained in this Agreement to the contrary,
Sellers' statements and obligations pursuant to this Article 3 shall only apply
as relevant to (i) the Acquired Assets, (ii) the Assumed Liabilities, (iii) the
Business, and (iv) the transactions contemplated by this Agreement.
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Section 3.01 Organization, Standing and Corporate Power. Each
of Transcend and Cascade is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and Oregon,
respectively, and has the requisite corporate power and authority to carry on
its business as now being conducted. The failure by either Seller to be duly
qualified or licensed to do business and to be in good standing in any other
jurisdiction will not have a Material Adverse Effect on the Business or the
Acquired Assets.
Section 3.02 Authority; Noncontravention. Sellers have the
requisite corporate power and authority to enter into this Agreement and the
Ancillary Agreements (as defined in Section 1.01) and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Ancillary Agreements by Sellers and the consummation by
Sellers of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of Sellers, and no
other corporate proceedings on the part of Sellers is necessary to authorize
this Agreement and the Ancillary Agreements or to consummate the transactions
contemplated hereby and thereby. This Agreement and the Ancillary Agreements
have been duly executed and delivered by Sellers, and assuming this Agreement
and the Ancillary Agreements constitute valid and binding obligations of Buyer,
constitute valid and binding obligations of Sellers, enforceable against Sellers
in accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of equity.
The execution and delivery of this Agreement and each of the Ancillary
Agreements does not, and the consummation of the transactions contemplated
hereby and thereby and compliance with the provisions hereof will not, (i)
conflict with any of the provisions of the certificate of incorporation or
bylaws of Sellers, in each case as amended to the date of this Agreement, (ii)
result in a violation or breach of, or constitute a default under, any contract,
agreement or instrument to which either Seller is a party or by which the
Acquired Assets are bound, or (iii) contravene any Law applicable to either
Seller, which, in the case of clauses (ii) and (iii) above would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Business or the Acquired Assets.
Section 3.03 Consents and Approvals. No consent, approval or
authorization of, or declaration or filing with, or notice to, any Governmental
Authority is required by or with respect to Sellers in connection with the
execution and delivery of this Agreement and the Ancillary Agreements by Sellers
or the consummation by Sellers of the transactions contemplated hereby and
thereby, except for any consents, approvals, authorizations, filings or notices,
the failure to make or obtain which could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Business or
the Acquired Assets.
Section 3.04 Financial Statements. (a) Sellers have delivered
to Buyer the unaudited income statements, balance sheets and statements of cash
flows of Cascade, representing the financial statements of the Business, as of
and for the years ended December 31, 2000 and 2001 (together with the notes
thereto), (the "Year End Financial Statements"), unaudited income statements,
balance sheets (the "Balance Sheets") and statements of cash flows as of and for
the first quarter ended March 31, 2002 (the "Interim Financial Statements" and,
collectively with the Year End Financial Statements, the "Financial
Statements"). The Financial Statements have been prepared in accordance with the
books and records of Cascade in
14
accordance with generally accepted accounting principles ("GAAP"). The
Financial Statements fairly present, in all material respects, (i) the assets,
liabilities and financial condition of Cascade, as at the respective dates
thereof, and (ii) the results of operations and cash flows of Cascade for the
respective periods then ended. The statements of income and retained earnings
and cash flows included in the Financial Statements do not contain any material
items of special or nonrecurring income not earned in the ordinary course of
business (other than the income tax benefit in 2001) and consistent with
applicable industry standards and practice.
(b) The Inventory used in the Business consists of a quality
and quantity usable, saleable and marketable in the ordinary course of business
within a reasonable period of time.
(c) All of the current Accounts Receivable of Cascade, have
arisen only from bona fide transactions with independent third parties in the
ordinary course of business consistent with past practice, are current and, to
the Knowledge of Sellers, are collectible net of the reserves calculated in
accordance with GAAP, consistent with past practice and agreed to by the Buyer
and Sellers.
Section 3.05 Absence of Certain Changes or Events; No
Undisclosed Material Liabilities. (a) Except as set forth on Schedule 3.05(a),
since March 31, 2002, Sellers have conducted the Business only in the ordinary
course consistent with past practice, and there has not been any (i) any
Material Adverse Change; or (ii) any action taken which would violate the
provisions of Section 5.01 of this Agreement, assuming such restrictions had
been applicable from March 31, 2002 through the date hereof.
(b) Except as disclosed in the Balance Sheet, as specified on
Schedule 3.05(b), the liabilities incurred since March 31, 2002 in the ordinary
course of business consistent with past practice and of the same type and
magnitude as those set forth in the Balance Sheet, there are no liabilities of
Cascade or the Business of any kind whatsoever, whether accrued, contingent,
absolute, due, to become due, determined, determinable or otherwise that would
impose transferee liability upon Buyer other than as included within the Assumed
Liabilities.
Section 3.06 Material Contracts. Sellers have delivered to
Buyer true and correct copies of the Assumed Contracts. To Sellers' Knowledge,
there are no material oral contracts relating to the Assumed Contracts or the
Business. The Assumed Contracts are the only material agreements or contracts of
Sellers (other than this Agreement, the Sublease, the ▇▇▇▇ of Sale and other
instruments of assumption, if any) which relate to the Business and the Acquired
Assets. Except as set forth on Schedule 3.06, (i) all of such Assumed Contracts
are currently in full force and effect, (ii) Sellers have performed all the
obligations required to be performed by it in connection with the Assumed
Contracts and is not in default under or in breach of any Assumed Contract, and
no event has occurred which with the passage of time or the giving of notice or
both would result in a default or breach thereunder, and (iii) to Sellers'
Knowledge there is no anticipated breach by the Sellers or the other parties
thereto. Except as set forth on Schedule 3.06, the Assumed Contracts (x) are
assignable by Sellers to Buyer; and (y) were entered into at arm's length in the
ordinary course of business.
(b) Except as disclosed on Schedule 3.06, no Assumed Contract
requires the consent of a third party to assign such Assumed Contract to Buyer.
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(c) Except as disclosed in Schedule 3.06, (i) to the
Knowledge of Sellers, no contract or commitment required to be disclosed on
Schedule 3.06 has been breached or canceled by the other party; (ii) Sellers are
not a party to any contract that will be an Assumed Contract requiring it to
purchase goods or services or lease property above or below (as the case may be)
prevailing market rates and prices or to sell goods or services below prevailing
market rates or below the cost of such goods or services to Sellers, and (iii)
no other party to any such Assumed Contract has asserted the right to
renegotiate, cancel or terminate prior to the full term of any such Assumed
Contract.
(d) Except as specifically contemplated by this Agreement and
except as set forth in Schedule 3.06, with respect to the Business, Sellers are
not a party to or bound by, and the Acquired Assets are not bound by, whether
written or oral, any:
(i) contract relating to mortgaging, pledging or otherwise
placing a Lien on any of the Acquired Assets;
(ii) contract pursuant to which Sellers subcontract work on
the Software to third parties; or
(iii) contract relating to the acquisition or sale of the
Business (or any material portion thereof), other than this Agreement.
Section 3.07 Real Property; Other Assets. (a) Cascade does
not own any real property related to the Business. Cascade has made available to
Buyer true, correct and complete copies of the Leasehold, including all
modifications, amendments and supplements thereto.
(b) Cascade has a valid and subsisting Leasehold in the
Facility, free and clear of all pledges, claims, liens, charges, mortgages,
conditional sale or title retention agreements, hypothecations, collateral
assignments, security interests, easements and other encumbrances of any kind or
nature whatsoever ("Liens"), except for Permitted Liens, and the Leasehold is
in full force and effect. No zoning, health, building, land use or similar law,
code, ordinance, order or regulation has been, or to the knowledge of Cascade,
will be violated by the continued use and operation of the Leasehold in the
conduct of the Business.
(c) The Tangible Personal Property used by Sellers in the
conduct of the Business and to be transferred to Buyer, consists of property in
good working condition and of a quality and quantity usable, saleable and
marketable in the ordinary course of business.
Section 3.08 Software. (a) Schedule 3.08(a) sets forth under
the caption "Owned Software" a true, correct and complete list of all the Owned
Software and under the caption "Licensed Software" a true, correct and complete
list of all of the Licensed Software.
(b) Except as specified in Schedule 3.08(b), Cascade has
good, marketable and exclusive title to, and the valid and enforceable power and
unqualified right to sell, license, lease, transfer, use or otherwise exploit,
all versions and releases of the Owned Software and all intellectual property
therein, free and clear of all Liens. Cascade is in actual possession of (i) the
source code and object code for each computer program included in the Owned
Software, and
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(ii) the object code and, to the extent required for the effective use of the
Software as currently used in the Business or as offered or represented to the
Business' customers or potential customers, the source code, for each computer
program included in the Licensed Software. Cascade is in possession of all other
documentation (including without limitation all related installation and user
manuals) and know-how required for the effective use of the Software as
currently used in the Business or as offered or represented to the Business'
customers or potential customers. Cascade has, and Buyer will have at the
Closing, such ownership of the Owned Software and such rights by license or
otherwise to use the Licensed Software as are used and necessary to conduct the
Business as now conducted, and as are used in the development, marketing,
licensing, sale or support of the products and the services presently offered by
the Business. Except as specified in Schedule 3.08(b), no person other than
Cascade has any right or interest of any kind or nature in or with respect to
the Owned Software or any portion thereof or any rights to sell, license, lease,
transfer, use or otherwise exploit the Owned Software or any portion thereof.
(c) Schedule 3.08(c) sets forth a true, correct and complete
list, by computer program, of (i) all persons other than Cascade that have been
provided with the source code or have a right to be provided with the source
code (including any such right that may arise after the occurrence of any
specified event or circumstance, either with or without the giving of notice or
passage of time or both) for any of the Owned Software, and (ii) all source code
escrow agreements relating to any of the Owned Software (setting forth as to any
such escrow agreement the source code subject thereto and the names of the
escrow agent and all other persons who are actual or potential beneficiaries of
such escrow agreement), and identifies with specificity all agreements and
arrangements pursuant to which the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby would
entitle any third party or parties to receive possession of the source code for
any of the Owned Software or any related technical documentation. Except as
specified in Schedule 3.08(c), no person (other than Cascade) is in possession
of, or has or has had access to, any source code for any computer program
included in the Owned Software.
(d) Except as specified in Schedule 3.08(d), none of the
sale, license, lease, transfer, use, reproduction, distribution, modification or
other exploitation by Sellers, or any of its successors or assigns of any
version or release of any computer program included in the Software obligates or
will obligate Cascade or any of its successors or assigns to pay any royalty,
fee or other compensation to any other person.
(e) Intentionally omitted
(f) Except as specified in Schedule 3.08(f), no agreement,
license or other arrangement pertaining to any of the Software (including
without limitation any development, distribution, marketing, user or maintenance
agreement, license or arrangement) to which Cascade is a party will terminate or
become terminable by any party thereto as a result of the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby.
Section 3.09 Intellectual Property. (a) Schedule 3.09(a) sets
forth a true, correct and complete list (including, to the extent applicable,
registration, application or file
17
numbers, and registration and filing dates) of all Intellectual Property other
than Software. Cascade does not have any U.S. or foreign copyright, patent, or
trademark registrations, and has not made any application for U.S. or foreign
registration, covering any of the Intellectual Property with any U.S.
Governmental Authority or foreign government equivalent entity.
(b) Cascade has, and Buyer will have at the Closing, such
ownership or rights by license or otherwise to use the Intellectual Property as
are used and are necessary to conduct the Business as it is now conducted, and
as are used in the development, marketing, licensing or support of the Software.
Except as specified in Schedule 3.09(b), (i) Cascade has good, marketable and
exclusive title to, and the valid and enforceable power and unqualified right to
use, the Intellectual Property free and clear of all Liens and (ii) no person or
entity other than Cascade has any right or interest of any kind or nature in or
with respect to the Intellectual Property or any portion thereof or any rights
to use, market or exploit the Intellectual Property or any portion thereof.
(c) No current or former director, officer, or employees of
Cascade (or any predecessor in interest of Cascade) will, after giving effect to
the transactions contemplated herein, own or retain any rights to use any of the
Intellectual Property owned by Cascade.
(d) Cascade takes reasonable measures to protect the
confidentiality of its material trade secrets, know-how or other confidential
information. Cascade has delivered to Buyer all written non-disclosure
agreements between Cascade and its employees, independent contractors and
licensees having access to confidential information.
Section 3.10 No Infringement. (a) For purposes of this
Section 3.10(a), as well as Section 3.10(b) below, the definition of
Intellectual Property excludes Licensed Software. To Sellers' Knowledge, except
as specified in Schedule 3.10(a), neither the existence nor the sale, license,
lease, transfer, use, reproduction, distribution, modification or other
exploitation by Cascade, or any of its successors or assigns of any Owned
Software or Intellectual Property, as such Owned Software or Intellectual
Property, as the case may be, is or was, or is currently contemplated to be,
sold, licensed, leased, transferred, used or otherwise exploited by such
persons, does, did or will (i) infringe, whether directly, by inducement,
contributory, vicariously or otherwise ("Infringe"), any patent, trademark,
copyright or other intellectual property right of any other person, (ii)
constitute a misuse or misappropriation of any trade secret, know-how, process,
proprietary information or other right of any other person, or (iii) entitle any
other person to any interest therein, or right to compensation from Cascade, or
any of its successors or assigns, by reason thereof. Except as specified in
Schedule 3.10(a), Cascade has not received any complaint, assertion, threat or
allegation or otherwise has notice of any Claim involving either matters of the
type contemplated by the immediately preceding sentence or otherwise challenging
the ownership, use, validity or enforceability of any Intellectual Property, nor
is Cascade aware of any facts or circumstances that could reasonably be expected
to give rise to any such Claim. Except as specified in Schedule 3.10(a), there
are no restrictions on the ability of Cascade, or any of its successors or
assigns to sell, license, lease, transfer, use, reproduce, distribute, modify or
otherwise exploit any Owned Software or Intellectual Property.
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(b) Except as specified in Schedule 3.10(b), to Sellers'
Knowledge there has been no Infringement, misappropriation or other violation of
any Software or Intellectual Property, and no Claim has been brought by Sellers
against any third party.
Section 3.11 Litigation, etc. Except as specified on Schedule
3.11, (i) Sellers have not been served with process or notice that there is any
Claim pending and, to Sellers' Knowledge, no such Claim is threatened against or
affecting the Business, the Acquired Assets, or Sellers with respect to the
Business or the Acquired Assets by or before any court or other Governmental
Authority, and (ii) Sellers have not been served with process or notice, and
have no Knowledge that they are subject to any outstanding order, writ,
judgment, injunction, decree or arbitration order or award that, in any such
case described in clauses (i) and (ii), has had or could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Business or the Acquired Assets. Sellers have not been served with process or
notice that there are any Claims pending and to Sellers' Knowledge, there is no
such Claim threatened, seeking to prevent, hinder, modify or challenge the
transactions contemplated by this Agreement or the Ancillary Agreements.
Section 3.12 Compliance with Applicable Laws. All federal,
state, local and foreign governmental approvals, authorizations, certificates,
filings, franchises, licenses, notices, permits and rights ("Permits")
necessary for Sellers to own, lease or operate their properties and assets,
including, without limitation, the Acquired Assets, and to carry on the Business
as now conducted have been obtained or made, and there has occurred no breach or
default under any such Permit, except for the failure to have any Permits or any
breaches or defaults under Permits which would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Business or the Acquired Assets. Except as disclosed on Schedule 3.12, Sellers
have complied, and will continue to comply, with respect to the Business, in a
timely manner and in all material respects, with all applicable statutes, laws,
ordinances, rules, regulations, judgments, decrees, orders, writs and
injunctions of any Governmental Authority.
Section 3.13 Environmental Laws. Except as specified on
Schedule 3.13 and as could not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on the Business or the Acquired
Assets: (i) Sellers have not violated and are not in violation of any
Environmental Law; (ii) to Sellers' Knowledge the Leasehold (including without
limitation soils and surface and ground waters) is not contaminated with any
Hazardous Substance in quantities which require investigation or remediation
under Environmental Laws; (iii) Sellers are not liable for any off-site
contamination; (iv) Sellers have no liability or remediation obligation under
any Environmental Law; (v) no assets of or used by the Business are subject to
pending or threatened Liens under any Environmental Law; (vi) Sellers have all
Permits required under any Environmental Law ("Environmental Permits"); and
(vii) Sellers are in compliance with its Environmental Permits.
Section 3.14 Taxes. (a) Sellers have (i) timely filed (or
there have been timely filed on Sellers' behalf) all material Tax Returns,
required to be filed by or for it in respect of any Taxes relating to the
Business or the Acquired Assets and all such Tax Returns are true, correct and
complete in all material respects and have paid all Taxes shown to be due on
such Tax Returns, (ii) established reserves that are reflected in the Balance
Sheet and that as so reflected are adequate for the payment of all Taxes
relating to the Business or the Acquired
19
Assets not yet due and payable, and (iii) timely withheld and paid over to the
proper taxing authorities all Taxes relating to the Business or the Acquired
Assets and other amounts required to be so withheld and paid over.
(b) Neither Seller has (i) executed or entered into with the
Internal Revenue Service (the "IRS") or any other taxing authority any
agreement or other document that continues in force and effect beyond the
Closing Date and that extends or has the effect of extending the period for
assessments or collection of any Taxes relating to the Business or the Acquired
Assets, (ii) executed or entered into with the IRS or any other taxing authority
any closing agreement or other similar agreement (nor have Sellers received any
ruling, technical advice memorandum or similar determination) affecting the
determination of Taxes relating to the Business or the Acquired Assets and
required to be shown on any Tax Return not yet filed, (iii) requested any
extension of time to be granted to file after the Closing Date any Tax Return
relating to the Business or the Acquired Assets required by applicable law to be
filed by it, or (iv) executed or filed any power of attorney with respect to
Taxes relating to the Business or the Acquired Assets, which power of attorney
will remain in effect beyond the Closing Date.
(c) There is no Tax audit, examination, Claim or deficiency
proposed, pending or threatened in writing against Sellers which, if adversely
determined, would result in a Tax Lien on any Acquired Asset or such other
assets of or used by the Business or would require Buyer to be liable for any
Taxes.
(d) The Business maintains in its files the appropriate valid
exemption certificates related to all sales to customers on which sales Tax was
not collected. All purchases on which sales or use Tax were not paid were
properly exempt from such Taxes.
(e) No Seller is a foreign person within the meaning of
Section 1445 of the Code.
Section 3.15 Benefit Plans. Intentionally Omitted.
Section 3.16 Labor Matters. (a) Sellers are not a party to
any employment, labor or collective bargaining agreement, and there are no
employment, labor or collective bargaining agreements which pertain to employees
of Sellers or the Business.
(b) No employees of the Business are represented by any labor
organization and, to Sellers' Knowledge, no labor organization or group of
employees of Sellers or relating to the Business has made a pending demand for
recognition or certification. There are no representation or certification
proceedings or petitions seeking a representation proceeding presently pending
or threatened in writing to be brought or filed with the National Labor
Relations Board or any other labor relations tribunal or authority and, to
Sellers' Knowledge, there are no organizing activities involving Sellers or the
Business pending with any labor organization or group of employees of Sellers or
the Business.
(c) There are no (i) unfair labor practice charges,
grievances or complaints pending or threatened in writing by or on behalf of any
employee or group of employees of the Business, or (ii) complaints, charges or
Claims against Sellers pending, or threatened in writing
20
to be brought or filed, with any Governmental Authority or arbitrator based on,
arising out of, in connection with, or otherwise relating to the employment or
termination of employment of any individual of the Business.
Section 3.17 Absence of Certain Practices. To Sellers'
Knowledge, neither Seller nor any Affiliate has (i) paid, offered or promised to
pay, or authorized the payment, directly or indirectly, through any other
person, any monies or anything of value to any person employed by or acting for
or on behalf of any person, whether private or governmental, or any government
official or employee of any political party or candidate for political office,
in each case for the purpose of illegally inducing or rewarding any action by
any official favorable to the Business, or (ii) taken any other act that, if
taken by a person subject to United States law, would violate Section 30A of the
Securities and Exchange Act of 1934. To Sellers' Knowledge, neither Seller nor
Affiliate, has accepted or received any unlawful contributions, payments, gifts
or expenditures related to the Business or the Acquired Assets.
Section 3.18 Title to Acquired Assets. Upon consummation of
the transactions contemplated by this Agreement, Buyer will acquire good, valid
and marketable title to the Acquired Assets, free and clear of all Liens,
Retained Liabilities and other interests, except for Permitted Liens
Section 3.19 Product Liability. Intentionally Omitted.
Section 3.20 Brokers. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of Sellers.
Section 3.21 Completeness of Disclosure. Neither Seller has
failed to disclose to Buyer any facts material to the business, results of
operations, assets, liabilities, financial condition or prospects of the
Business. No representation or warranty by Sellers contained in this Agreement
and no statement contained in any document (including, without limitation, the
Financial Statements and the Schedules), certificate, or other writing furnished
or to be furnished by Sellers to Buyer or any of its representatives pursuant to
the provisions hereof or in connection with the transactions contemplated
herein, contains or will contain any untrue statement of material fact or omits
or will omit to state any material fact necessary, in light of the circumstances
under which it was made, in order to make the statements herein or therein not
misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers that all of the
statements contained in this Article 4 are true and complete as of the date of
this Agreement, and will be true and complete as of the Closing Date as though
made on the Closing Date.
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Section 4.01 Organization, Standing and Corporate Power.
Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the requisite corporate power
and authority to carry on its business as now being conducted. Buyer is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the leasing of its
properties makes such qualification or licensing necessary, except where the
failure to be so qualified or licensed and to be in good standing would not have
a Material Adverse Effect on the ability of Buyer to perform its obligations
under this Agreement and the Ancillary Agreements or consummate the transactions
contemplated hereby or thereby.
Section 4.02 Authority; Noncontravention. Buyer has the
requisite corporate power and authority to enter into this Agreement and the
Ancillary Agreements and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Ancillary
Agreements by Buyer and the consummation by Buyer of the transactions
contemplated hereby and thereby have been duly authorized by the Board of
Directors of Buyer, and no other corporate proceedings on the part of Buyer are
necessary to authorize this Agreement or the Ancillary Agreements or to
consummate the transactions contemplated hereby and thereby. This Agreement and
the Ancillary Agreements have been duly executed and delivered by Buyer and,
assuming this Agreement constitutes a valid and binding obligation of Sellers,
constitute valid and binding obligations of Buyer, enforceable against Buyer in
accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of equity.
The execution and delivery of this Agreement and the Ancillary Agreements does
not, and the consummation of the transactions contemplated hereby and compliance
with the provisions hereof and thereof will not (i) conflict with any of the
provisions of the certificate of incorporation or bylaws of Buyer, in each case
as amended to the date of this Agreement, (ii) result in a violation or breach
of, or constitute a default under, any contract, agreement or instrument to
which Buyer is a party, or (iii) contravene any Law applicable to Buyer which,
in the case of clauses (ii) and (iii) above, could reasonably be expected to
have, individually or in the aggregate, a material adverse effect on the ability
of Buyer to perform its obligations under this Agreement and the Ancillary
Agreements or consummate the transactions contemplated hereby and thereby.
Section 4.03 Consents and Approvals. No consent, approval or
authorization of, or declaration or filing with, or notice to, any Governmental
Authority is required by or with respect to Buyer in connection with the
execution and delivery of this Agreement and the Ancillary Agreements by Buyer
or the consummation by Buyer, as the case may be, of any of the transactions
contemplated hereby, except for any consents, approvals, authorizations, filings
or notices the failure to make or obtain which could not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
ability of Buyer to perform its obligations under this Agreement and the
Ancillary Agreements or consummate the transactions contemplated hereby and
thereby.
Section 4.04 Broker. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's financial
advisor's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of Buyer.
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ARTICLE 5
COVENANTS OF SELLERS
Sellers agree that:
Section 5.01 Conduct of the Business. From the date hereof
until the Closing Date, except as contemplated by this Agreement, Sellers will
operate the Business only in the ordinary course of business consistent with
past practice. Without limiting the generality of the foregoing, from the date
hereof until the Closing Date, except as disclosed on Schedule 5.01, Sellers
will not, and will cause their Affiliates not to:
(a) make any material change in the conduct of the Business
or enter into any transaction or commitment involving in excess of $10,000
individually, or $25,000 in the aggregate, binding on the Business or relating
to any of the Acquired Assets;
(b) mortgage, lease, sublease, license, pledge or subject to
any Lien (except for Permitted Liens) any of the Acquired Assets;
(c) sell, transfer or otherwise dispose of any of the
Acquired Assets, except for Inventory sold in the ordinary course of business,
or acquire any assets or rights that would be included in the Acquired Assets or
the Business, except in the ordinary course of business consistent with past
practice;
(d) permit the Business to: incur or assume any long-term
Liabilities or, except for current Liabilities for trade or business obligations
incurred in connection with the purchase of goods or services in the ordinary
course of business consistent with past practice, incur or assume any short-term
Liabilities; assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations
(absolute, accrued, contingent or otherwise) of any Person; or make any loans,
advances or capital contributions to, or investments in, any Person;
(e) amend in any material respect or terminate any Assumed
Contract or the Leasehold, or make or enter into any new contract or lease, in
each case with respect to the Business or the Acquired Assets, except in the
ordinary course of business consistent with past practice;
(f) permit the Business to engage in any transaction with any
employee, officer or director of either Seller or any Affiliate of either Seller
outside the ordinary course of business consistent with past practice;
(g) fail to keep in full force and effect present insurance
policies or other comparable insurance coverages with respect to the Business or
the Acquired Assets;
(h) change any of the accounting principles used by the
Business unless required by GAAP or applicable Law;
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(i) transfer or grant any rights or licenses under, or enter
into any settlement regarding the breach or infringement of, any Intellectual
Property, or modify any existing rights with respect thereto or enter into any
licensing or similar agreements or arrangements, except in the ordinary course
of business consistent with past practice;
(j) make any increase in the rate of compensation,
commission, bonus or other direct or indirect remuneration payable, or pay or
agree or orally promise to pay, conditionally or otherwise, any bonus,
incentive, retention or other compensation, retirement, welfare, fringe or
severance benefit or vacation pay, to or in respect of any employee of the
Business, except as required under any Sellers' Plans in effect as of the date
hereof;
(k) adopt, enter into, or amend (except as required to comply
with applicable laws) any employment, collective bargaining, bonus,
profit-sharing, compensation, stock option, pension, retirement, vacation,
severance, deferred compensation or other plan, agreement, trust, fund or
arrangement for the benefit of any employee of the Business (whether or not
legally binding) or enter into or amend any existing consulting agreement or
arrangement;
(l) settle or agree to settle any litigation, action or
proceeding relating to the Business other than settlements of any case involving
amounts not in excess of $10,000;
(m) make any material change in the selling, distribution,
advertising, terms of sale or collection practices (including any practices,
programs or allowances involving rebates or discounts) for the Business from
those planned or budgeted, or enter into any practices, programs or long-term
allowances (including any practices, programs or allowances including rebates or
discounts) not previously used during the past twelve months;
(n) amend their certificate of incorporation, by-laws or
other organizational documents in a manner that adversely affects any of the
transactions contemplated hereby;
(o) knowingly take any action which would cause a breach of
any representation set forth in Article 3 hereof; and
(p) take, or agree in writing or otherwise to take, any of
the foregoing actions.
Section 5.02 Access to Information. (a) From the date hereof
until the Closing Date, Sellers will (i) give, and will cause each of its
Affiliates to give, Buyer, their counsel, financial advisors, auditors and other
authorized representatives reasonable access to the offices, employees, agents,
representatives, properties, facilities, books and records of the Business, (ii)
furnish, and will cause each of their Affiliates to furnish, to Buyer, its
counsel, financial advisors, auditors and other authorized representatives such
financial and operating data and other information relating to the Business as
such Persons may reasonably request, and (iii) instruct the employees, counsel
and financial advisors of Sellers and their Affiliates to cooperate with Buyer
in its reasonable investigation of the Business, and (iv) permit Buyer and its
authorized representatives to contact major customers of the Business. Any
investigation pursuant to this Section 5.02 shall be conducted in such manner as
not to interfere unreasonably with the conduct of the Business. Sellers shall
keep Buyer generally informed as to the affairs of the Business. Notwithstanding
the foregoing, Buyer shall not have access to personnel records of Sellers and
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their Affiliates relating to individual performance or evaluation records,
medical histories or other information which in Sellers' good faith opinion is
sensitive or the disclosure of which could subject any Seller or any Affiliate
of any Seller to risk of Liability.
(b) In addition to the foregoing, from and after the Closing
Date, Sellers will give, and will cause each of their Affiliates to give, Buyer,
its counsel, financial advisors, auditors and other authorized representatives
reasonable access and copies of all the documents relating to the Business not
delivered to Buyer at the Closing.
Section 5.03 Exclusivity. Recognizing that Buyer `s
investigations of the Business, and the negotiation and drafting of this
Agreement and related documents and instruments to be executed by Buyer in
connection herewith, have to date required and will continue to require Buyer to
expend significant time, effort and money, and to induce Buyer to execute and
deliver this Agreement and proceed with the transactions contemplated hereby,
neither Seller, any Affiliate of either Seller or any director, officer,
partner, employee, representative, advisor, or agent of any such Person will
encourage any offers from, solicit, encourage, initiate, respond to (other than
by a bare statement, without further detail or explanation, that such Person is
not permitted to respond) or continue any discussions with, engage in
discussions or negotiations with or provide any information to, or enter into
any agreements or understandings with, any Person, other than Buyer, its
Affiliates and their respective representatives and agents, concerning any
merger, consolidation, issuance or sale or exchange of shares of capital stock
of either Seller, transfer or disposition of any Acquired Assets (other than
Inventory in the ordinary course of business consistent with past practice) or
similar transaction involving or affecting the ownership of either Seller, the
Business or any of the Acquired Assets.
Section 5.04 Non-Solicitation of Employees. Non-Competition.
(a) From and after the date hereof until the second anniversary of the Closing
Date, Sellers shall not, and shall not permit their respective Affiliates to,
without the prior written approval of Buyer, directly or indirectly solicit,
encourage, entice, induce hire or employ any person who is an Employee at the
date hereof or who becomes an Employee after the date hereof but prior to the
Closing Date, to terminate his or her employment with Cascade, or hire or employ
any person who is an Employee at the date hereof or who becomes an Employee
after the date hereof but prior to the Closing Date; provided, however, that the
foregoing does not apply to persons who are hired as a result of the use of a
general solicitation (such as an advertisement) not specifically directed to any
of the Employees.
(b) Sellers agree that they shall not, and Sellers shall
cause each of their Affiliates not to, at any time within the two-year period
immediately following the Closing, directly or indirectly engage, or have any
ownership interest in, any firm, corporation, partnership, proprietorship or
other business entity that engages in a business that develops or installs
coding and abstracting software or any other product that is currently
manufactured or sold by the Business or under development with respect to the
Business or that competes with the Business; provided, however, that it shall
not be a violation of this Section 5.04 to (i) own, directly or indirectly,
solely for investment purposes, securities of any Person that are traded on a
national securities exchange or the NASDAQ Stock Market (or a recognized
securities exchange outside the U.S.), if Sellers and their Affiliates do not,
directly or indirectly, collectively own
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more than 1% or more of any class of securities of such Person, or (ii) directly
or indirectly be acquired by or merged into any Person that compete with any
products sold by the Business or under development with respect to the Business.
(c) For a period of three (3) years from and after the
Closing Date, Sellers will, and will cause their Affiliates to, keep secret and
retain in confidence, and will not use for the benefit of themselves or others,
(i) all Intellectual Property, (ii) any and all information concerning the
operations and affairs of the Business, including, without limitation,
historical financial statements, financial projections and budgets, historical
and projected sales, customer lists, current and anticipated customer
requirements, price lists, market studies, business plans, capital spending
budgets and plans, the names and backgrounds of key personnel, personnel
training and techniques and materials, however documented (collectively, the
"Business Information"), and (ii) any and all notes, analysis, compilations,
studies, summaries, and other material prepared by or for the Business
containing or based, in whole or in part, on any information included in the
foregoing, and shall not record, disclose or disseminate such Intellectual
Property or Business Information to anyone outside of Buyer and its Affiliates
except with Buyer's express written consent and except as otherwise required by
law; provided, however, for purposes of this Section 5.04(c), Intellectual
Property shall not include any information, technology or know-how or other
matter, and Business Information shall not include any information or other
matter, that is readily ascertainable from public or published information
(without the violation of any confidentiality agreement related thereto).
(d) Each Seller acknowledges that the covenants contained in
this Section 5.04 were a material and necessary inducement for Buyer to agree to
the transactions contemplated hereby, and that violation of any covenants
contained in this Section 5.04 will cause Buyer to be irreparably and
immediately harmed and Buyer could not be made whole by monetary damages.
Therefore, Seller agrees to the granting of specific performance of this
Agreement and injunctive or other equitable relief in favor of Buyer as a remedy
for any such breach without proof of actual damages. Sellers and Buyer (a)
hereby waive, in any action for specific performance, the defense of adequacy of
a remedy at law and any requirement to establish actual damages or secure or
post any bond in connection with any such remedy and (b) shall be entitled, in
addition to any other remedy to which they may be entitled at law or in equity,
to compel specific performance of this Agreement in any action instituted in
accordance with Section 5.04 hereof. The remedy provided for in this Section
5.04 shall not be deemed to be the exclusive remedy for a party's breach of this
Agreement, but shall be in addition to all other remedies available at law or
equity to the other party.
(e) If it is ever held by any court of competent jurisdiction
that the restrictions placed on any party to this Agreement by this Section 5.04
s too onerous and is not necessary for the protection of the other party or
parties hereto, each party to this Agreement agrees that any court of competent
jurisdiction may impose lesser restrictions which such court may consider to be
necessary or appropriate to properly protect the other party or parties hereto.
Section 5.05 Remittance of Accounts Receivable. Buyer shall
send a written notice, dated as of the Closing Date, in form and substance
approved by Sellers, to each account debtor owing amounts under the Accounts
Receivable of the Business, and such notice shall (i) notify such account debtor
that such account debtor's Accounts Receivable have been transferred
26
to Buyer as of the Closing Date and (ii) instruct such account debtor that any
and all payments in respect of such account debtor's Accounts Receivable shall
be made to such accounts as Buyer (or any assignee of Buyer's right to receive
such payments) shall designate. Each Seller further agrees that to the extent
such Seller or any of its Affiliates receives any payment with respect to any
Accounts Receivable of the Business on or after the Closing Date, such Seller
shall (w) immediately notify Buyer of such receipt, (x) cause such payment to be
held in trust for sole the benefit of Buyer or its assignee, (y) refrain from
commingling such payment with any funds of any Seller or any Affiliate of any
Seller and (z) within three Business Days of the date of the receipt of such
payment by such Seller or any Affiliate of any Seller, remit such payment to
such accounts as Buyer or its assignee may designate, by wire transfer of
immediately available same day funds. Each Seller also grants Buyer a power of
attorney to endorse in the name of such Seller and any of its Affiliates all
checks that Buyer may receive in respect of the Accounts Receivable and that
name such Seller or any of its Affiliates as the payee therein.
Section 5.06 Mail And Communications. Sellers shall promptly
remit to Buyer any mail or other communications, including, without limitation,
any written or e-mail inquiries and payments received by Sellers relating to the
Business or the Acquired Assets and any invoices received by Sellers relating to
Assumed Liabilities which are received by Sellers from and after the Closing
Date. Buyer shall promptly remit to Sellers any mail or other communications,
including, without limitation, any written or e-mail inquiries and payments
received by Buyer relating to any business or activity of Sellers other than the
Business, and any invoices received by Buyer relating to liabilities other than
the Assumed Liabilities which are received by Buyer from and after the Closing
Date. With respect to any mail addressed to Sellers received by Buyer from and
after the Closing Date which relates to the Business, the Acquired Assets, or
the Assumed Liabilities, Sellers hereby authorize Buyer to receive and open such
mail and deal with the contents thereof in any reasonable manner, provided that
any such action in no way damages or prejudices Sellers.
Section 5.07 Notification of Certain Tax Matters. Sellers
shall deliver to Buyer copies of (i) all audit reports, letter rulings,
technical advice memoranda and similar documents issued by a Governmental
Authority relating to the United States federal, state, local or foreign Taxes
due from or with respect to Sellers or their Affiliates relating to the Business
or the Acquired Assets and (ii) any closing agreement with any taxing authority
entered into by or on behalf of Sellers or their Affiliates relating to the
Business or the Acquired Assets.
ARTICLE 6
COVENANT OF BUYER
After the Closing Date, Buyer shall not, and shall not permit
its Affiliates to, use the ▇▇▇▇ "Transcend" (the "Seller Marks"). In this
connection, after the Closing Date, Buyer will take reasonable steps to see that
all, signs, displays and other promotional materials in the possession of Buyer
after the Closing Date that contain the Seller Marks are destroyed.
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ARTICLE 7
COVENANTS OF BUYER AND SELLERS
Buyer and Sellers agree that:
Section 7.01 Commercially Reasonable Efforts; Further
Assurances. (a) Subject to the terms and conditions of this Agreement, Buyer and
Sellers will use commercially reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, and cooperate with each other to do,
all things necessary or desirable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement as promptly as
practicable.
(b) Sellers and Buyer shall cooperate with one another in
determining whether any action by or in respect of, or filing with, any
Governmental Authority is required, or any actions, consents, approvals or
waivers are required to be obtained from any third parties, in connection with
the consummation of the transactions contemplated by this Agreement. Sellers and
Buyer agree to take all commercially reasonable actions necessary to obtain any
requisite actions, approvals, authorizations, consents, orders, licenses,
permits, qualifications, exemptions or waivers by any third party or
Governmental Authority. If required, each party shall as promptly as possible,
in cooperation with the other, but at its own expense, file any reports or
notifications or furnish information and pay any fees that may be required to be
paid by it under applicable law.
(c) Prior to Closing, each party shall promptly consult with
other parties hereto with respect to, provide any necessary information with
respect to, and provide other parties (or their respective counsel) with copies
of, all filings made by such party with any Governmental Authority or any
information supplied by such party to a Governmental Authority in connection
with this Agreement and the transactions contemplated hereby. Each party hereto
shall promptly provide the other parties with copies of any written
communication received by such party from any Governmental Authority regarding
this Agreement or any of the transactions contemplated hereby.
Section 7.02 Public Announcements. Neither Seller nor Buyer
will issue, or permit any of their Affiliates to issue, any press release or
otherwise make any public statement with respect to this Agreement or the
transactions contemplated hereby without the prior written consent of the other
(which consent shall not be unreasonably withheld), except as may be required by
applicable law or stock exchange or NASDAQ regulation. Notwithstanding anything
in this Section 7.02 to the contrary, Sellers and Buyer will, to the extent
practicable, consult with each other before issuing, and provide each other the
opportunity to review and comment upon, any such press release or other public
statement with respect to this Agreement and the transactions contemplated
hereby if required by applicable law or stock exchange regulation.
Section 7.03 Notices of Certain Events. From the date hereof
until the Closing Date, Sellers and Buyer shall, promptly after becoming aware
of the following, notify the other of:
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(a) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in connection
with any of the transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental
Authority in connection with any of the transactions contemplated by this
Agreement; and
(c) any Claims commenced relating to Sellers or any of their
Affiliates, the Business, the Acquired Assets or Buyer that, if pending on the
date of this Agreement, would have been required to have been disclosed pursuant
to Section 3.10 and 3.11.
Section 7.04 Transfer and Other Taxes. All transfer,
documentary, sales, use, registration and other such Taxes (including all
applicable real estate transfer Taxes) and related fees incurred in connection
with any of the transactions contemplated by this Agreement will be paid by
Sellers. Each Seller and Buyer will prepare and file any Tax Return required to
be filed by it in connection with any of the transactions contemplated by this
Agreement (regardless of whether any Tax is required to be paid in connection
with such filing), and all of the parties will cooperate with each other in the
preparation, execution and filing of such Tax Returns.
Section 7.05 Further Assurances. At any time after the
Closing Date, Sellers and Buyer shall promptly execute, acknowledge and deliver
any other assurances, documents, instruments or conveyances reasonably requested
by Sellers or Buyer, as the case may be, or necessary for Sellers or Buyer, as
the case may be, to satisfy their respective obligations hereunder or obtain the
benefits contemplated hereby.
Section 7.06 Transfers Not Effected as of Closing. Nothing
herein shall be deemed to require the conveyance, assignment or transfer of any
Acquired Asset that by its terms or by operation of applicable law cannot be
freely conveyed, assigned, transferred or assumed. To the extent the parties
hereto have been unable to obtain any governmental or any third party consents
or approvals required under applicable law for the transfer of any Acquired
Asset and to the extent not otherwise prohibited by the terms of any Acquired
Asset, Sellers shall continue to be bound by the terms of such applicable
Acquired Asset and Buyer shall pay, perform and discharge fully all of the
obligations (to the extent such obligations are Assumed Liabilities) of Sellers
thereunder from and after the Closing to the extent that the corresponding
benefit is received. Sellers shall, without consideration therefor, pay, assign
and remit to Buyer promptly all monies, rights and other consideration received
in respect of such performance. Sellers shall exercise or exploit their rights
in respect of such Acquired Assets only as reasonably directed by Buyer and at
Buyer's expense. Subject to and in accordance with Section 7.01, for not more
than one hundred eighty (180) days following the Closing Date, each of the
parties hereto shall continue to use commercially reasonable efforts to obtain
all such unobtained consents or approvals required to be obtained by it at the
earliest practicable date. If and when any such consents or approvals shall be
obtained, then Sellers shall promptly assign their rights and obligations
thereunder to Buyer without payment of consideration and Buyer shall, without
the payment of any consideration therefor, assume such rights and obligations
(to the extent such obligations are Assumed Liabilities). The parties shall
execute such good and sufficient instruments as may be necessary to evidence
such assignment and assumption.
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Section 7.07 Allocation of Purchase Price. Within sixty (60)
days following the Closing Date, Buyer shall deliver to Sellers a written
statement allocating the Purchase Price (including the Assumed Liabilities and
the covenant not to compete) among the Acquired Assets, which allocation shall
be made in good faith. Buyer and Sellers shall file all Tax Returns in a manner
consistent with such allocation and shall not voluntarily take any action
inconsistent with such allocation upon examination of any Tax Return, in any
refund claim, in any litigation or otherwise with respect to Taxes or any Tax
Returns.
ARTICLE 8
EMPLOYEE MATTERS
Section 8.01 Transferred Employees. (a) Employment Offers.
Prior to the Closing Date, Buyer shall make an offer of employment to each
Employee selected by Buyer in its sole discretion, such employment to be
effective as of the Closing Date. Subject to Section 8.01(b) below, such offers
of employment shall be on such terms and conditions as determined by Buyer in
its sole discretion. Those Employees who have been offered employment by Buyer
and who accept such offers of employment shall be referred to herein as the
"Transferred Employees," and the parties hereto intend that there shall be
continuity of employment following the Closing with respect to all Transferred
Employees. In the event that the employment of an Employee who is not offered
employment by Buyer pursuant to this Section 8.01(a) is terminated by Cascade on
the Closing Date, Buyer shall reimburse Sellers for all severance payments made
to such terminated Employees in accordance with the historical practice of
Cascade as set forth on Schedule 8.01(a) hereto.
(b) Post-Closing Employee Benefits. As of the Closing Date,
Buyer shall provide the Transferred Employees with the standard employee benefit
package that is generally provided by Buyer to employees of Buyer; it being
understood, that in no event shall Buyer be obligated to provide any stock
option plan or other equity participation for the Transferred Employees, but
Buyer agrees to make a reasonable attempt to consider the inclusion of the
Transferred Employees in its stock option program. Without limiting the
generality of the foregoing, Buyer shall honor and assume the vacation or other
paid time off for each Transferred Employee which has been accrued but remains
unused as of the Closing Date, to the extent the accrual for such vacation or
other paid time off was reflected on the Balance Sheet.
Section 8.02 Cooperation. Sellers shall cooperate with Buyer
as necessary to implement the covenants set forth is this Article 8, including,
without limitation, providing reasonable access to the Employees and supervisory
personnel prior to the Closing Date and providing information regarding the
salary and incentive opportunity applicable to each Employee at Buyer's request.
ARTICLE 9
CONDITIONS TO CLOSING
Section 9.01 Conditions to Obligations of Buyer and Sellers.
The obligations of Buyer and Sellers to consummate the Closing are subject to
the satisfaction (or waiver by Buyer and Sellers (subject to applicable law)) of
the following conditions:
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(a) No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of the
Closing; and
(b) There shall not be pending any material Claim by a
Governmental Authority of competent jurisdiction seeking to prohibit the
consummation of the Closing.
Section 9.02 Conditions to Obligation of Buyer. The
obligation of Buyer to consummate the Closing is subject to the satisfaction (or
waiver by Buyer (subject to applicable law)) of the following further
conditions:
(a) The representations and warranties of Sellers contained
in this Agreement which are not qualified by "materiality", "Material Adverse
Effect" or "Material Adverse Change" shall be true and accurate in all material
respects, and the representations and warranties that are qualified by
"materiality", "Material Adverse Effect" or "Material Adverse Change" shall be
true and accurate in all respects, in each case when made and as of the Closing
Date and Sellers shall have performed and complied in all material respects with
all obligations, agreements or covenants required by the Agreement to be
performed and complied with by them prior to the Closing.
(b) There shall not have occurred any Material Adverse Change
(or any development that, insofar as reasonably can be foreseen, is reasonably
likely to result in any Material Adverse Change).
(c) There shall not be pending or threatened any Claim
seeking to restrain or prohibit the execution of this Agreement or seeking to
obtain from Buyer or Sellers or any of their respective Affiliates in connection
with this Agreement any material damages, or seeking any other relief that,
following the execution hereof, would materially limit or restrict the ability
of Buyer to own the Acquired Assets.
(d) Intentionally omitted.
(e) Sellers shall have duly executed and delivered to Buyer a
▇▇▇▇ of sale and assignment substantially in the form of Exhibit A attached
hereto (the "▇▇▇▇ of Sale"), which shall provide for the sale, transfer,
assignment, conveyance and delivery of the Acquired Assets (other than the
Leasehold and the trademarks, copyrights, patents and Internet domain names that
are Acquired Assets) to Buyer.
(f) Sellers shall have duly executed and delivered to Buyer
the assignment and assumption agreement substantially in the form of Exhibit B
attached hereto (the "Assumption Agreement"), which shall provide for the
assumption of the Assumed Liabilities (other than Assumed Liabilities relating
to the Leases) by Buyer.
(g) Cascade shall have duly executed and delivered to Buyer
all customary instruments of assignment or transfer, in form suitable for
recording in the appropriate office or bureau (collectively, the "Intellectual
Property Instruments"), requested by Buyer in order to effect the transfer of
Intellectual Property that are Acquired Assets.
31
(h) Cascade shall have duly executed and delivered to Buyer a
sublease of the Leasehold in the form attached hereto as Exhibit C (the
"Sublease Agreement"), together with any reasonably necessary transfer
declarations or other filings, with respect to the Leasehold.
(i) Notwithstanding Section 7.06 or anything else to the
contrary in this Agreement, Sellers shall have obtained and delivered to Buyer,
in form and substance satisfactory to Buyer, all consents, authorizations,
orders and approvals of (or filings or registrations with) any Governmental
Entity or any other person, as listed on Schedule 9.02(i) attached hereto,
required to be obtained or made prior to the Closing in connection with the
execution, delivery and performance of this Agreement.
(j) Intentionally omitted.
(k) No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall restrict Buyer's control of the
Acquired Assets.
(l) There shall not be pending any material litigation
brought by a Governmental Authority of competent jurisdiction seeking to (i)
require Buyer to hold the Acquired Assets separate, (ii) restrict Buyer's
control of the Acquired Assets or (iii) require Buyer to divest any asset or
business in connection with the acquisition of the Acquired Assets.
Section 9.03 Conditions to Obligation of Sellers. The
obligation of Sellers to consummate the Closing is subject to the satisfaction
(or waiver by Seller (subject to applicable law)) of the following further
conditions:
(a) The representations and warranties of Buyer contained in
this Agreement which are not qualified by "materiality", "Material Adverse
Effect" or "Material Adverse Change" shall be true and accurate in all material
respects, and the representations and warranties that are qualified by
"materiality", "Material Adverse Effect" or "Material Adverse Change" shall be
true and accurate in all respects, in each case when made and as of the Closing
Date and Buyer shall have performed or complied in all material respects with
any obligation, agreement or covenant required by the Agreement to be performed
or complied with by Buyer prior to the Closing.
(b) Intentionally omitted.
(c) Buyer shall have duly executed and delivered to Sellers
the ▇▇▇▇ of Sale
(d) Buyer shall have duly executed and delivered to Sellers
the Assumption Agreement.
(e) Buyer shall have duly executed and delivered to Sellers
the Sublease Agreement.
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ARTICLE 10
SURVIVAL; INDEMNIFICATION
Section 10.01 Survival. The representations and warranties of
the parties hereto contained in this Agreement or in any certificate or other
writing delivered pursuant hereto or in connection herewith shall survive until
the final determination of the Final Net Cash Reconciliation Statement: provided
that (i) the representations and warranties contained in Section 3.06 (Material
Contracts), Section 3.08 (Software), Section 3.09 (Intellectual Property),
Section 3.10 (Infringement), Section 3.11 (Litigation), Section 3.16 (Labor
Matters) Section 3.20 (Broker), and 3.21 (Completeness of Disclosure) shall
survive for eighteen (18) months from the Closing Date; (ii) the representations
and warranties contained in Section 3.13 (Environmental Laws) and Section 3.18
(Title) shall survive indefinitely; and (iii) the representations and warranties
contained in Section 3.14 (Taxes) shall survive until their applicable statutes
of limitations have expired. The covenants and agreements of the parties
contained in this Agreement shall survive the Closing until such time as such
covenants or agreements shall terminate or expire in accordance with their
respective terms. Notwithstanding the preceding sentence, any covenant,
agreement, representation or warranty in respect of which indemnity may be
sought under this Agreement shall survive the time at which it would otherwise
terminate pursuant to the preceding sentence with respect to the specific claim,
if notice of the inaccuracy or breach thereof giving rise to such right of
indemnity shall have been given to the party against whom such indemnity may be
sought prior to such time.
Section 10.02 Indemnification. (a) Subject to the other
provisions of this Article 10, Sellers jointly and severally hereby agree to
indemnify Buyer and its Affiliates and their respective officers, directors,
managers, employees, affiliates, agents, advisors and representatives (Buyer and
such other entities and persons are hereinafter collectively referred to as
"Buyer Indemnitees"), against and agree to hold each of them harmless from any
and all judgments, fines, Claims, costs, damages, losses, penalties, lost
profits, consequential damages, punitive damages, Liabilities and expenses
(including, without limitation, expenses of investigation or remediation,
consulting or engineering fees and expenses and attorneys' fees and expenses) of
any nature or kind, known or unknown, fixed, accrued, absolute or contingent,
liquidated or unliquidated ("Damages") incurred or suffered by any Buyer
Indemnitees resulting from or arising out of (i) any misrepresentation or breach
of representation or warranty (each such misrepresentation and breach, a
"Warranty Breach") by Sellers, (ii) any breach of covenant or agreement made or
to be performed by Sellers pursuant to this Agreement, or (iii) any Retained
Liability; provided that with respect to indemnification by Sellers for any
Warranty Breach pursuant to this Section 10.02 other than those contained in
Sections 3.13, 3.14, and 3.18, (A) Sellers shall not be liable unless the
aggregate amount of Damages with respect to such Warranty Breaches exceeds
$50,000 and then Sellers shall be liable from the first dollar of such Damage in
excess of $50,000 and (B), in the absence of fraud on the part of any of
Sellers, Sellers' maximum liability for all such Warranty Breaches shall not
exceed the Purchase Price less any adjustments shown on the Final Net Cash
Reconciliation Statement. For the purpose of determining whether any Warranty
Breach has occurred with respect to a claim for indemnification or for the
purposes of measuring Damages with respect to any Warranty Breach, such
representations and warranties shall be deemed to have been made without any
materiality, Material Adverse Effect or Material Adverse Change qualifications
contained therein.
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(b) Subject to the other provisions of this Article 10, Buyer
hereby agrees to indemnify Sellers and their Affiliates and their respective
officers, directors, managers, employees, affiliates, agents, advisors and
representatives (Sellers and such other entities and persons are hereinafter
collectively referred to as "Seller Indemnitees"), against and agrees to hold
each of them harmless from any and all Damages incurred or suffered by Seller
Indemnitees resulting from or arising out of (i) any Warranty Breach by Buyer,
(ii) any breach of covenant or agreement made or to be performed by Buyer
pursuant to this Agreement, or (iii) any Assumed Liability; provided that with
respect to indemnification by Buyer for any Warranty Breach pursuant to this
Section 10.02, (A) Buyer shall not be liable unless the aggregate amount of
Damages with respect to such Warranty Breaches exceeds $50,000 and then Buyer
shall be liable from the first dollar of such Damage in excess of $50,000 and
(B) Buyer's aggregate maximum liability for all such Warranty Breaches shall not
exceed the Purchase Price. For the purpose of determining whether any Warranty
Breach has occurred with respect to a claim for indemnification or for the
purposes of measuring Damages with respect to any Warranty Breach, such
representations and warranties shall be deemed to have been made without any
materiality, Material Adverse Effect or Material Adverse Change qualifications
contained therein.
Section 10.03 Procedures. (a) The party seeking
indemnification under Section 10.02 (the "Indemnified Party") agrees to give
reasonably prompt written notice to the party against whom indemnity is sought
(the "Indemnifying Party") of the assertion or commencement of any Claim in
respect of which indemnity may be sought under Section 10.02 and will provide
the Indemnifying Party such information with respect thereto that the
Indemnifying Party may reasonably request. The parties hereby acknowledge and
agree that the failure by any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its indemnification
obligation under this Agreement except to the extent that (i) such failure
results in a failure of actual notice to the Indemnifying Party and (ii) such
Indemnifying Party is materially prejudiced as a result of such failure to give
notice.
(b) The Indemnifying Party shall be entitled to participate
in the defense of, investigation of, or corrective action required to be
undertaken in response to, any Claim asserted by a third party, including any
Governmental Authority ("Third Party Claim") and, subject to the limitations
set forth in this Section or Section 10.04, shall be entitled to control and
appoint lead counsel for such defense, in each case at its expense.
(c) If the Indemnifying Party shall assume the control and
cost of the defense of any Third Party Claim in accordance with the provisions
of this Section or Section 10.04, (i) the Indemnifying Party shall obtain the
prior written consent of the Indemnified Party (which shall not be unreasonably
withheld) before entering into any settlement of such Third Party Claim if the
settlement does not provide for the unconditional written release of the
Indemnified Party from any and all liabilities and obligations with respect to
such Third Party Claim or if the settlement imposes any form of relief other
than monetary against the Indemnified Party for which the Indemnified Party
receives indemnification hereunder and (ii) the Indemnified Party shall be
entitled to participate in the defense of such Third Party Claim and to employ
separate counsel of its choice for such purpose. The fees and expenses of such
separate counsel shall be paid by the Indemnified Party. In the event that the
Indemnified Party shall in good faith determine that the conduct of the defense
of any claim subject to indemnification hereunder or any proposed settlement of
any such claim by the Indemnifying Party might be expected to affect
34
adversely the ability of Buyer to conduct its business, or that the Indemnified
Party may have available to it one or more defenses or counterclaims that are
inconsistent with one or more of those that may be available to the Indemnifying
Party in respect of such claim or any litigation relating thereto, the
Indemnified Party shall have the right at all times to take over and assume
control over the defense, settlement, negotiations or litigation relating to any
such claim at the sole cost of the Indemnifying Party, provided that if the
Indemnified Party does so take over and assume control, the Indemnified Party
shall not settle such claim or litigation without the written consent of the
Indemnifying Party, such consent not to be unreasonably withheld.
(d) Each party shall cooperate, and cause their respective
Affiliates to cooperate, in the defense or prosecution of any Third Party Claim
(including any counterclaims filed by Sellers or Buyer) and shall provide access
to properties and individuals as reasonably requested and furnish or cause to be
furnished records, information and testimony, and attend such conferences,
discovery proceedings, hearings, trials or appeals, as may be reasonably
requested in connection therewith. This cooperation shall be provided without
cost or expense of the other party other than reimbursement of out-of-pocket
travel or similar expenses subject to the provisions of Section 10.02.
(e) Each Indemnified Party shall use reasonable efforts to
collect any amounts available under insurance coverage, or from any other Person
alleged to be responsible, for any Damages payable under Section 10.02.
Section 10.04 Additional Procedures. With respect to any
Pre-Closing Environmental Liability for which Buyer or any of its Affiliates
seeks any indemnification pursuant to Section 10.02(b), Buyer shall be entitled
to control and appoint lead counsel or consultants for such defense,
investigation or remedial action, and Sellers shall be entitled to participate
in the defense thereof at its own expense.
Section 10.05 Calculation of Damages. The amount of any
Damages payable under Section 10.02 by the Indemnifying Party shall be net of
any amounts actually recovered by the Indemnified Party under applicable
insurance policies (but any such offset for amounts so recovered shall be
reduced by the present value of any insurance policy increases to Indemnified
Party relating thereto), from any other third party with indemnification
obligations or from any other Person alleged to be responsible therefor. If the
Indemnified Party receives any amounts under applicable insurance policies, from
any other third party with indemnification obligations or from any other Person
alleged to be responsible for any Damages, subsequent to an indemnification
payment by the Indemnifying Party, then such Indemnified Party shall promptly
reimburse the Indemnifying Party for any payment made or expense incurred by
such Indemnifying Party in connection with providing such indemnification
payment up to the amount actually received by the Indemnified Party (but any
such offset for amounts so recovered shall be reduced by the present value
(calculated at a 10% interest rate) of any insurance policy increases to
Indemnified Party relating thereto) and net of any expenses incurred by such
Indemnified Party in collecting such amount.
Section 10.06 Dispute Resolutions. If the parties cannot
resolve any claim for indemnification within 30 days after the notification of
such claim pursuant to Section 10.03, excluding any Third Party Claim, the
parties agree to settle such claim by arbitration in
35
accordance with the then-prevailing Commercial Arbitration Rules of the American
Arbitration Association, as modified herein. The place of arbitration shall be
New York, New York. There shall be one neutral and impartial arbitrator, who
shall be a duly admitted and practicing attorney with at least 10 years
experience as an attorney in the field of commercial law and mutually agreed
upon by Sellers and Buyer. The arbitrator shall permit and facilitate such
pre-hearing discovery and exchange of documents and information to which the
parties in writing agree or that the arbitrator determines is relevant to the
dispute between the parties and is appropriate taking into account the needs of
the parties and desirability of making discovery expeditious and cost-effective.
Any discovery permitted hereunder shall be completed within 45 days from the
date on which the respondent(s) communicates its or their answer(s) to the
claimant(s). The arbitration shall be governed by the United States Arbitration
Act, 9 U.S.C. ▇▇.▇▇. 1-16. Judgment upon the award of the arbitrators may be
entered in any court of competent jurisdiction. The decision of the arbitrators
shall be binding and nonappealable.
Section 10.07 Effect of Investigation. The conditions to the
obligation of Buyer to consummate the Closing, and the right to indemnification,
payment of Damages or for other remedies based on any representation, warranty,
covenant or obligation of Sellers contained in or made pursuant to this
Agreement shall not be affected by any investigation conducted with respect to,
or any knowledge acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement or the date the
Closing occurs, with respect to the accuracy or inaccuracy of or compliance
with, any such representation, warranty, covenant or obligation. The waiver of
any condition to the obligation of Buyer to consummate the Closing, where such
condition is based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, shall not affect
the right to indemnification, payment of Damages or other remedy based on such
representation, warranty, covenant or obligation.
Section 10.08 Tax Treatment of Indemnification Payments. Any
indemnification payment made pursuant to this Article 10 shall be treated as an
adjustment to the Purchase Price for Tax purposes.
Section 10.09 Right of Offset. The parties hereto agree that
in the event a claim for indemnification by an Indemnified Party is not paid
within ten days of reaching an agreement thereof or a court or arbitral
determination that the party seeking indemnification has an indemnifiable
obligation, the Indemnified Party shall have the unconditional right to
offset, on a dollar for dollar basis, against any amounts that are due or may
become due in the future from the Indemnified Party to the other party, the
amount of any such claim for indemnification made by such Indemnified Party
pursuant to this Article 10.
ARTICLE 11
TERMINATION
Section 11.01 Grounds for Termination. This Agreement may be
terminated at any time prior to the Closing:
(a) by mutual written agreement of Sellers and Buyer;
36
(b) by either Sellers or Buyer if the Closing shall not have
been consummated on or before May 31, 2002 (the "Termination Date"); provided,
however, that the terminating party may not exercise this right if it or any of
its Affiliates is in breach of its obligations under this Agreement;
(c) by either Sellers or Buyer if consummation of the
transactions contemplated hereby would violate any nonappealable final order,
decree or judgment of any court or Governmental Authority having competent
jurisdiction, or any Governmental Authority shall have adopted any applicable
state, federal or foreign law permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated hereby.
(d) by Sellers, so long as neither Seller is then in breach
of its obligations under this Agreement, upon a breach of any covenant or
agreement on the part of Buyer set forth in this Agreement, or if any
representation or warranty of Buyer shall have been or become untrue, in each
case such that the conditions set forth in Section 9.03(a) would not be
satisfied; provided, however, that if any such breach is curable prior to the
Termination Date by Buyer through the use of its reasonable best efforts, for so
long as Buyer, following written notice with respect to such breach from
Sellers, shall be using its reasonable best efforts to cure such breach, Sellers
may not terminate this Agreement pursuant to this Section 11.01(d); or
(e) by Buyer, so long as Buyer is not then in breach of its
obligations under this Agreement, upon a breach of any covenant or agreement on
the part of either Seller set forth in this Agreement, or if any representation
or warranty of either Seller shall have been or become untrue, in each case such
that the conditions set forth in Section 9.02(a) would not be satisfied;
provided, however, that if any such breach is curable prior to the Termination
Date by Sellers through the use of their reasonable best efforts, for so long as
Sellers, following written notice with respect to such breach from Buyer, shall
be using their reasonable best efforts to cure such breach, Buyer may not
terminate this Agreement pursuant to this Section 11.01(e).
The party desiring to terminate this Agreement pursuant to
clauses 11.01(b), 11.01(c), 11.01(d) or 11.01(e) shall give notice of such
termination to the other party. If this Agreement is terminated as provided
herein: (i) upon written request therefor, Buyer will redeliver to Sellers all
documents, work papers and other material of Sellers relating to the
transactions contemplated hereby, whether obtained before or after the execution
hereof; and (ii) all filings, applications and other submissions made shall, to
the extent practicable, be withdrawn from the agency or other person to which
made.
Section 11.02 Effect of Termination. If this Agreement is
terminated as permitted by Section 11.01, such termination shall be without
liability of either party (or any stockholder, director, officer, employee,
affiliate, agent, consultant or representative of such party) to the other party
to this Agreement; provided that if such termination shall result from the (i)
failure of either Buyer or Sellers to fulfill a condition to the performance of
the obligations of the other party, (ii) failure to perform a covenant of this
Agreement or (iii) breach by either Buyer or Sellers hereto of any
representation or warranty contained herein, such party shall be fully liable
for any and all Damages incurred or suffered by the other party as a result of
such failure or breach. In the event of the termination of this Agreement in
accordance with Section
37
11.01, this Agreement shall thereafter become void and have no effect, except
for the obligations of the parties hereto contained in Section 7.02, this
Section 11.02 and Section 12.
ARTICLE 12
MISCELLANEOUS
Section 12.01 Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission) and shall be given (i) by personal delivery to the appropriate
address as set forth below (or at such other address for the party as shall have
been previously specified in writing to the other party), (ii) by reliable
overnight courier service (with confirmation) to the appropriate address as set
forth below (or at such other address for the party as shall have been
previously specified in writing to the other party), or (iii) by facsimile
transmission (with confirmation) to the appropriate facsimile number set forth
below (or at such other facsimile number for the party as shall have been
previously specified in writing to the other party) with follow-up copy by
reliable overnight courier service the next Business Day:
if to Buyer, to:
QuadraMed Corporation
▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Financial Officer
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to Sellers, to:
Transcend Services, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
President/CEO
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇
▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
All such notices, requests and other communications shall be
deemed received on the date of receipt by the recipient thereof if received
prior to 5 p.m. in the place of receipt and such day is a Business Day in the
place of receipt. Otherwise, any such notice, request or communication shall be
deemed not to have been received until the next succeeding Business Day in the
place of receipt.
Section 12.02 Amendments and Waivers. (a) Any provision of
this Agreement may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by Sellers and
Buyer, or in the case of a waiver, by the party against whom the waiver is to be
effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 12.03 Expenses. Except as otherwise provided in
Section 11.02 hereof, all costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such cost or expense.
Section 12.04 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns; provided that Sellers and
Buyer, respectively, may not assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the consent of the other
party, except that Buyer may assign its right and delegate its duties under this
Agreement in whole or in part to one or more of its Affiliates but no such
assignment shall relieve Buyer of its obligations hereunder.
Section 12.05 Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of Delaware without
regard to principles of conflicts or choice of laws or any other law that would
make the laws of any other jurisdiction other than the State of Delaware
applicable hereto.
Section 12.06 Jurisdiction. Subject to Section 10.06 herein,
each of the parties hereto hereby irrevocably and unconditionally consents to
submit to the exclusive jurisdiction of the courts of the State of Delaware and
of the United States of America located in Wilmington, Delaware for any
litigation arising out of or relating to this Agreement and the transactions
contemplated hereby (and agrees not to commence any litigation relating thereto
except in such courts), and further agrees that service of any process, summons,
notice or document by U.S. registered mail to its respective address shall be
effective service of process for any litigation
39
brought against it in any such court. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any litigation arising out of this Agreement or the transactions contemplated
hereby in the Delaware and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such litigation
brought in any such court has been brought in an inconvenient forum. Any
judgment upon any final award under this Agreement may be entered in any court
of competent jurisdiction.
Section 12.07 Waiver of Jury Trial. Each of the parties
hereto hereby irrevocably waives any and all right to trial by jury in any legal
proceeding arising out of or related to this agreement or the transactions
contemplated hereby.
Section 12.08 Counterparts; Third Party Beneficiaries. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
Section 12.09 Entire Agreement. This Agreement (including the
Schedules and Exhibits hereto), and the documents, agreements, certificates, and
instruments referred to herein and therein constitute the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersede all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter of this Agreement.
Section 12.10 Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 12.11 Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be illegal, invalid, void, unenforceable or against its
regulatory policy, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
Section 12.12 Specific Performance. Sellers and Buyer
acknowledge and agree that in the event of any breach of this Agreement, each
non-breaching party would be irreparably and immediately harmed and could not be
made whole by monetary damages. Therefore, each party hereto agrees to the
granting of specific performance of this Agreement and injunctive or other
equitable relief in favor of the other party as a remedy for any such breach
without proof of actual damages. Sellers and Buyer (a) hereby waive, in any
action for specific performance, the defense of adequacy of a remedy at law and
any requirement to establish actual damages or secure or post any bond in
connection with any such remedy and (b) shall be entitled, in addition to any
other remedy to which they may be entitled at law or in equity, to compel
specific performance of this Agreement in any action instituted in accordance
with Section 12.12 hereof. The remedy provided for in this Section 12.12 shall
not be deemed to be the exclusive remedy for a party's breach of this Agreement,
but shall be in addition to all other remedies available at law or equity to the
other party.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
QUADRAMED OPERATING CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
its Chief Financial Officer
TRANSCEND SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
CASCADE HEALTH INFORMATION SOFTWARE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
41