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FIRST AMENDMENT TO
ACQUISITION AGREEMENT AND PLAN OF MERGER
This First Amendment to Acquisition Agreement and Plan of Merger (the
"Amendment") is entered into this 29th day of September, 1997 by and among
QuadraMed Corporation, a Delaware corporation ("QuadraMed"), and HRM Acquisition
Corporation, a Delaware corporation ("Acquisition Co."), on the one hand, and
Healthcare Revenue Management, Inc., a Nevada corporation (the "Company"), and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, U.S. Clearing Corp. Custodian FBO ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇, U.S.
Clearing Corp. Custodian FBO ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
Custodian FBO ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ Custodian FBO ▇▇▇▇▇▇▇ ▇▇▇▇▇ III ▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. Nitto individually, a "Management Stockholder"
and collectively, the "Management Stockholders"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ Custodian FBO ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
FBO ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Trust, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, U.S. Clearing Corp. Custodian
FBO ▇▇▇▇▇▇ ▇. Angle and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, who, together with the Management
Stockholders, constitute a majority of the stockholders of the Company (each, a
"Majority Stockholder" and collectively, the "Majority Stockholders").
WHEREAS, the parties hereto have previously entered into that certain
Acquisition Agreement and Plan of Merger dated September 24, 1997 (the "Original
Agreement"), pursuant to which (i) first, the Majority Stockholders shall convey
to Acquisition Co. that number of shares of Company Common Stock held by such
Majority Stockholders in exchange for shares of QuadraMed Common Stock with a
Fair Market Value equal to each such Majority Stockholder's proportionate share
of the Exchange Consideration and (ii) second, the Company shall be merged with
and into Acquisition Co., with the remaining stockholders of the Company
(collectively, together with the Majority Stockholders, the "Stockholders") to
receive such Stockholder's proportionate share of the Merger Consideration.
WHEREAS, Section 2.1 of the Original Agreement requires each Majority
Stockholder to transfer all of such Majority Stockholder's right, title and
interest in, to and under his, her or its share of Company Common Stock free and
clear of all Encumbrances.
WHEREAS, Section 12.14 of the Original Agreement provides that all
proceedings taken by the Company and the Majority Stockholders and all
instruments executed and delivered by the Company and the Majority Stockholders
on or prior to the Exchange Closing be reasonably satisfactory in form and
substance to counsel for QuadraMed and Acquisition Co., which proceedings have
included specific instructions to deliver the original share certificates
representing all of the Company Common Stock, duly endorsed.
WHEREAS, certain of the Majority Stockholders have not delivered such
original stock certificates as of the Exchange Closing (the "Non-Delivering
Stockholders").
WHEREAS, Section 14.3 of the Original Agreement requires QuadraMed to
have endorsed and delivered to the Majority Stockholders the QuadraMed Shares
making up the Exchange Consideration.
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WHEREAS, Section 14.7 of the Original Agreement requires QuadraMed to
have paid the indebtedness of the Company to HRM in the principal amount of
$405,064.99 concurrently with the Exchange Closing.
WHEREAS, Section 14.8 of the Original Agreement requires QuadraMed to
have paid the indebtedness of the Company to The Pacific Bank, N.A. in the
principal amount of $700,594.47 concurrently with the Exchange Closing.
WHEREAS, Section 16.3 of the Original Agreement provides QuadraMed and
the Company with the ability to waive the conditions to the Exchange Closing set
forth above and to proceed with the Exchange Closing and other transactions
contemplated by the Original Agreement.
WHEREAS, the parties hereto desire to amend the Original Agreement as
set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by each signatory hereto, it is agreed as
follows:
1. QuadraMed hereby waives as a condition to the Exchange Closing
satisfaction of Section 12.14 of the Original Agreement with respect to the
delivery of certain original share certificates representing the Company Common
Stock held by the Non-Delivery Stockholders. The Company hereby waives as a
condition to the Exchange Closing the satisfaction of the terms set forth in
Sections 14.7 and 14.8 of the Original Agreement with respect to the repayment
of the indebtedness to HRM and The Pacific Bank, N.A. All other conditions to
the Exchange Closing set forth in the Original Agreement have been satisfied,
and QuadraMed and the Company hereby jointly elect to proceed with the Exchange
Closing effective as of September 29, 1997.
2. QuadraMed shall not be obligated to repay the indebtedness to HRM
unless and until it has received from each Non-Delivering Stockholder not
delivering an original share certificate with respect to his, her or its Company
Common Stock duly endorsed on September 29, 1997, a certificate containing the
following items: (i) an assignment separate from certificate of the shares of
Company Common Stock sold by each such Non-Delivering Stockholder pursuant to
the terms of the Original Agreement, (ii) an undertaking to use best efforts to
deliver such share certificate duly endorsed as soon as possible, and (iii) an
indemnification of QuadraMed and Acquisition Co. from and against and all
liabilities arising out of failure to deliver such stock certificate
concurrently with the Exchange Closing (the "Non-Delivering Stockholder
Certificate"). Upon delivery of such Non-Delivering Stockholder Certificates
from each Non-Delivering Stockholder, QuadraMed shall pay-off the Company's
indebtedness to HRM via wire transfer in accordance with wire transfer
instructions delivered to QuadraMed concurrently with the Exchange Closing. In
the period
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between the Exchange Closing and the pay-off of the Company's indebtedness to
HRM, no further interest shall accrue thereon. QuadraMed shall not be obligated
to repay the indebtedness to The Pacific Bank, N.A. unless and until it has
received a Non-Delivering Stockholder Certificate from each Non-Delivering
Stockholder. On delivery of the Non- Delivering Stockholder Certificates from
each Non-Delivering Stockholder, QuadraMed shall pay-off the Company's
indebtedness to The Pacific Bank, N.A. on October 14, 1997 via wire transfer in
accordance with wire transfer instructions delivered to QuadraMed concurrently
with the Exchange Closing. QuadraMed shall not be obligated to deliver the
QuadraMed Shares to any Majority Stockholder until it has received the original
share certificates representing all of the Company Common Stock, duly endorsed.
Concurrently with the delivery of such original share certificates, QuadraMed
shall deliver the QuadraMed Shares to the Majority Stockholders.
3. The Company and the Majority Stockholders executing this Amendment
hereby agree to use best efforts to cause satisfaction of the conditions set
forth in Section 2 above as soon as practicable.
4. All capitalized terms used in this Amendment and not otherwise
defined shall have the meaning assigned such term in the Original Agreement.
Except as expressly amended hereby, all other terms and conditions of the
Original Agreement shall remain in full force and effect.
5. This Amendment may be executed in one or more counterparts, all of
which when fully-executed and delivered by all parties hereto and taken together
shall constitute a single agreement, binding against each of the parties. To the
maximum extent permitted by law or by any applicable governmental authority, any
document may be signed and transmitted by facsimile with the same validity as if
it were an ink-signed document. Each signatory below represents and warrants by
his or her signature that he or she is duly authorized (on behalf of the
respective entity for which such signatory has acted) to execute and deliver
this instrument and any other document related to this transaction, thereby
fully binding each such respective entity.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have duly executed this First Amendment
to Acquisition Agreement and Plan of Merger as of the date first written above.
QUADRAMED QUADRAMED CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President and General Counsel
ACQUISITION CO. HRM ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
COMPANY HEALTHCARE REVENUE MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
MAJORITY STOCKHOLDERS
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Company Common Stock: 4,481,559 shares
QuadraMed Common Stock: 44,593 shares
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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U.S. Clearing Corp. Custodian FBO ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ ▇▇▇
Company Common Stock: 1,698,000 shares
QuadraMed Common Stock: 16,896 shares
[Signature Page No. 1 to First Amendment to Acquisition
Agreement and Plan of Merger]
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U.S. Clearing Corp. Custodian FBO ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ ▇▇▇
Company Common Stock: 1,666,000 shares
QuadraMed Common Stock: 16,577 shares
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇
Company Common Stock: 250,000 shares
QuadraMed Common Stock: 2,488 shares
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇ Custodian FBO ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
Company Common Stock: 141,000 shares
QuadraMed Common Stock: 1,403 shares
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇ Custodian FBO ▇▇▇▇▇▇▇ ▇▇▇▇▇
III ▇▇▇
Company Common Stock: 234,000 shares
QuadraMed Common Stock: 2,328 shares
[Signature Page No. 2 to First Amendment to Acquisition
Agreement and Plan of Merger]
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Company Common Stock: 625,000 shares
QuadraMed Common Stock: 6,219 shares
/s/ ▇▇▇▇▇▇ ▇. NITTO
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▇▇▇▇▇▇ ▇. Nitto
Company Common Stock: 425,000 shares
QuadraMed Common Stock: 4,229 shares
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Company Common Stock: 566,315 shares
QuadraMed Common Stock: 5,635 shares
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Company Common Stock: 265,500 shares
QuadraMed Common Stock: 2,642 shares
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▇▇▇▇ ▇▇▇▇▇▇ Custodian FBO ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ▇▇▇
Company Common Stock: 500,000 shares
QuadraMed Common Stock: 4,975 shares
[Signature Page No. 3 to First Amendment to
Acquisition Agreement and Plan of Merger]
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/s/ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ FBO ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Trust
Company Common Stock: 275,400 shares
QuadraMed Common Stock: 2,740 shares
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Company Common Stock: 175,000 shares
QuadraMed Common Stock: 1,741 shares
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U.S. Clearing Corp. Custodian FBO ▇▇▇▇▇▇ ▇.
Angle
Company Common Stock: 100,000 shares
QuadraMed Common Stock: 995 shares
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▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Company Common Stock: 100,000 shares
QuadraMed Common Stock: 995 shares
ACKNOWLEDGED AND AGREED TO:
HRM, INC., a California corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
[Signature Page No. 4 to First Amendment to
Acquisition Agreement and Plan of Merger]
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