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ASSET PURCHASE AGREEMENT
BY AND AMONG
QUADRAMED CORPORATION,
ECLIPSYS CORPORATION AND MED DATA SYSTEMS, INC.
DATED
JULY 1, 1999
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into this
1st day of July, 1999 by and among QuadraMed Corporation, a Delaware corporation
("QuadraMed"), on the one hand, and Eclipsys Corporation, a Delaware corporation
("Eclipsys"), and its wholly-owned subsidiary, Med Data Systems, Inc. a
California corporation ("Med Data"), with respect to the following facts:
WHEREAS, QuadraMed is engaged in the healthcare information technology
business.
WHEREAS, Med Data is engaged in the medical records management
business.
WHEREAS, Eclipsys acquired Med Data pursuant to the terms of that
certain Stock Purchase and Sale Agreement dated as of March 6, 1999 by and among
SunGard Data Systems, Inc., SunGard Investment Ventures, Inc. (collectively
"SunGard"), Med Data Systems, Inc., Intelus Corporation, Eclipsys Corporation
and Eclipsys Solutions Corp. (the "SunGard Agreement"), which transaction closed
on March 31, 1999.
WHEREAS, Eclipsys desires to sell, transfer and assign to QuadraMed and
QuadraMed desires to acquire from Eclipsys, all of the right, title and interest
in and to substantially all of the assets of Med Data, all for the consideration
and on the terms and conditions set forth in this Agreement.
WHEREAS, the parties hereto desire to make certain representations,
warranties and agreements in connection with the acquisition of such assets and
also to prescribe certain conditions with respect thereto.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties
and covenants herein contained, 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
For purposes of this Agreement, the following terms shall have the
following meanings:
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1.1. "Affiliate" shall mean a Person (as defined below) that directly,
or indirectly through one or more intermediaries, controls, is controlled by or
is under common control with, any other Person.
1.2. "Basis" shall mean any past or present fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction that forms or could form the
basis for any specified consequence.
1.3. "Business" shall mean Med Data's medical records management
business.
1.4. "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.5. "Confidential Information" shall mean all information that is
either confidential, proprietary or otherwise not available to the general
public and relating to Med Data's medical records management business,
including, without limitation, computer programs, software, names and expertise
of employees and consultants, know-how, trade secrets, formulae, processes,
ideas, inventions and other sales, business, financial, customer, product
developments, plans, lists, forecasts, strategies and other information.
Confidential Information shall not include information which is (i) generally or
readily obtainable by the public or trade, (ii) publicly known or becomes known
through no fault or activity of Eclipsys or its affiliates or (iii) required to
be disclosed by Eclipsys or any Affiliate pursuant to deposition, interrogatory,
request for documents, order, subpoena, civil investigative matter or similar
legal compulsion; provided, however, that prompt written notice of such
requirement shall be provided to QuadraMed so that it may seek a protective
order or other appropriate remedy.
1.6. "Contract" shall mean any written or oral contract, lease, policy,
commitment, sales order, purchase order, indenture, mortgage, note, bond,
instrument, license or other agreement.
1.7. "Employee Benefit Plan" shall mean any "employee benefit plan" as
defined in Section 3(3) of ERISA (as defined below) and any other plan, policy,
program, practice or arrangement providing compensation or other benefits to any
current or former officer or employee of Med Data or any beneficiary or
dependent thereof that is or was maintained by Eclipsys or Med Data.
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1.8. "Encumbrances" shall mean any mortgage, chattel mortgage,
conditional sales contract, pledge, lien, charge, security interest,
encumbrance, option, lease, license, easement or similar interest.
1.9. "Environmental, Health and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety and pollution or
protection of the environment, including, without limitation, all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.
1.10."ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.11."Financial Statements" shall mean the unaudited balance sheets
and statements of income for Med Data as of December 31, 1998 and December 31,
1997 for the twelve (12) month periods then ended, the unaudited balance sheet
as of January 31, 1999 and the statement of income as of January 31, 1999 for
the one (1) month period then ended, and the unaudited balance sheets and
statements of income for Med Data as of May 31, 1999 and for the two (2) month
period then ended.
1.12. "GAAP" shall mean United States generally accepted accounting
principles as in effect from time to time.
1.13. "Intellectual Property" shall mean all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof,
trademarks, service marks, trade dress, logos, trade names and corporate names,
together with all translations, adaptations, derivations and combinations
thereof and including all goodwill associated therewith, and all
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applications, registrations and renewals in connection therewith, copyrightable
works, all copyrights and all applications, registrations and renewals in
connection therewith, mask works and all applications, registrations and
renewals in connection therewith, trade secrets and confidential business
information (including ideas, research and development, know-how, formulas,
compositions, manufacturing and production processes and techniques, technical
data, designs, drawings, specifications, customer and supplier lists, pricing
and cost information and business and marketing plans and proposals), other
proprietary rights and copies and tangible embodiments thereof (in whatever form
or medium).
1.14."IRS" shall mean the United States Internal Revenue Service or any
successor entity.
1.15. "Knowledge" shall mean that an individual will be deemed to have
"Knowledge" of a particular fact or other matter if such individual is actually
aware of such fact or other matter or a prudent individual would have a
reasonable likelihood of discovering or becoming aware of such fact or other
matter in the course of conducting a reasonable investigation concerning the
existence of such fact or other matter. Eclipsys and Med Data will be deemed to
have "Knowledge" of a particular fact or other matter if either Alan Belkin,
Robert Colletti and/or Jack Risenhoover has, or at any time had, Knowledge of
such fact or matter. The "Knowledge" of SunGard shall be as defined in Article I
of the SunGard Agreement.
1.16. "Liability" shall mean any liability (whether fixed or unfixed,
known or unknown, secured or unsecured, asserted or unasserted, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated or due or to become
due), including, without limitation, any direct or indirect Tax (as defined
below) liability, indebtedness, guaranty, endorsement, claim, loss, damage,
deficiency, cost, expense, obligation or responsibility.
1.17. "Material Adverse Effect" shall mean any material adverse effect
on the business, assets, properties, operations, prospects, value or financial
condition of a Person.
1.18. "Ordinary Course of Business" shall mean the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency).
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1.19."PBGC" shall mean the Pension Benefit Guaranty Corporation.
1.20."Person" shall mean an individual, a partnership, a corporation,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a governmental entity (or any department, agency
or political subdivision thereof).
1.21."SEC" shall mean the Securities and Exchange Commission.
1.22."Software" shall mean any computer software and databases,
programs, object and source code, routines, subroutines and algorithms and
related documentation owned, developed, under development or exclusively used by
Med Data or under development principally for Med Data by third parties.
Software does not include interfaces, networks, communications, hardware, or
other applications or devices that may be acquired from third parties
independently of the Med Data application software and are not uniformly
provided by Med Data to its customers.
1.23."Tax" shall mean any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including any interest,
penalty or addition thereto, whether disputed or not.
1.24. "Tax Return" shall mean any return, declaration, report, claim
for refund or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
ARTICLE 2.
ASSET ACQUISITION
2.1. Transfer of Assets. Subject to the terms and conditions of this
Agreement, Med Data shall sell, transfer, convey, assign and deliver to
QuadraMed or, in QuadraMed's discretion, a wholly-owned subsidiary designated by
QuadraMed,
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and QuadraMed or its designee shall purchase and accept, all rights, properties
and assets (of every kind, nature, character and description, whether real,
personal or mixed, whether tangible or intangible, whether accrued, contingent
or otherwise, and wherever situated) of Med Data, together with all rights and
privileges associated with such assets, other than the Excluded Assets (as
defined below) (collectively, the "Purchased Assets"). The Purchased Assets are
sold subject to the specific representations and warranties contained in this
Agreement and the schedules attached hereto, and the Purchased Assets shall be
sold and conveyed to QuadraMed and title shall pass to QuadraMed free and clear
of all Liabilities and Encumbrances as of the Closing Date (other than the
Assumed Liabilities). The Purchased Assets shall include, without limitation,
the following:
(a) all tangible personal property, inventory, equipment,
supplies, tools, computer equipment, work in process, spare parts, furniture and
office furnishings, wherever situated, whether or not carried on the books of
the Med Data, including, without limitation, all items listed on Schedule
2.1(a);
(b) all Intellectual Property of Med Data;
(c) all rights of Med Data under all Contracts, agreements,
licenses, leases, sales orders, purchase orders and other commitments relating
to the Purchased Assets including, without limitation, those listed on Schedule
2.1(c) (the "Assumed Contracts");
(d) all technical materials and guidelines, brochures, sales
literature, promotional material and other selling material, wherever situated;
(e) all papers, documents, instruments, books and records,
files, agreements, books of account and other records by which any of the
Purchased Assets might be identified or enforced, or otherwise pertaining to the
Purchased Assets that are located at the offices or other locations used in
connection with the Purchased Assets (including, without limitation, customer
invoices, customer lists, vendor and supplier lists, drafts and other documents
and materials relating to customer transactions, blueprints, specifications,
designs, drawings, operating and marketing plans and all other documents, tapes,
discs, programs or other embodiments of information related thereto);
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(f) all right, title and interest of Med Data in and to all
Software programs, and the source and object codes for such Software together
with all versions thereof and all modules encompassed thereby and, to the extent
in possession of Med Data as of the Closing Date, all technical materials,
guidelines and other written material pertaining thereto including, without
limitation, those listed on Schedule 2.1(f);
(g) all accounts receivable, unbilled receivables,
work-in-process or notes of Med Data that have arisen prior to the Closing Date
with respect to ongoing obligations of Med Data to provide products or services
either before or after the Closing Date (including, without limitation, accounts
receivable with respect to all customer advance payments and maintenance fees)
including, without limitation, those set forth on Schedule 2.1(g); and
(h) all prepaid expenses and other current assets of Med Data
and all other assets set forth on the May 31 balance sheet contained in the
Financial Statements (the "Balance Sheet").
2.2. Excluded Assets. The provisions of Section 2.1 above
notwithstanding, Med Data shall not sell, transfer, assign, convey or deliver
to QuadraMed, and QuadraMed will not purchase or accept, the following assets
used in, associated with or related to the business of Med Data (collectively,
the "Excluded Assets"): (i) all cash of Med Data; (ii) the Closing
Consideration (as defined below) to be delivered to Eclypsis pursuant to
Section 2.8 below; (iii) Med Data's franchise to be a corporation, its Articles
of Incorporation, as may be amended, corporate seal, stock books, minute books
and other corporate records having exclusively to do with the corporate
organization and capitalization of Med Data (as to which Eclipsys will furnish
to QuadraMed, at QuadraMed's cost, at any time or from time to time after the
Closing Date, copies or transcripts); and (iv) all rights under Contracts not
specifically assumed by QuadraMed and listed on Schedule 2.2.
2.3. Assumption of Certain Liabilities. On and subject to the terms and
conditions of this Agreement, QuadraMed agrees to assume and discharge only the
Assumed Liabilities (as defined below) from and after the Closing Date.
QuadraMed will not assume or have any responsibility with respect to any other
Liability of Med Data not included within the definition of Assumed Liabilities.
"Assumed Liabilities" shall mean (i) all of
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the Assumed Contracts listed on Schedule 2.1(c), including the warranty and
maintenance obligations thereunder, (ii) all of the trade payables of Med Data
listed on Schedule 2.3, (iii) all items to be prorated pursuant to Section 2.6
below, and (iv) such other Liabilities of Med Data as set forth on the Balance
Sheet or Schedule 2.3.
2.4. Non-Assumed Liabilities. Except as specifically provided for in
Section 2.3 above, QuadraMed will not assume or be obligated to pay or discharge
any Liabilities of any kind, whether known or unknown, contingent or otherwise,
accrued by Med Data and relating to the time period prior to the Closing Date in
connection with the Purchased Assets, the business and operation of Med Data and
the transactions contemplated by this Agreement, and all such Liabilities shall
be and remain the sole and absolute responsibility of Med Data through, from and
after the Closing Date. The Liabilities of Med Data which are not expressly
assumed pursuant to this Agreement are hereinafter collectively referred to as
the "Non-Assumed Liabilities." Without limiting the generality of the foregoing,
and notwithstanding any other provision hereof, each of the following is
included, without limitation, within the Non-Assumed Liabilities of Med Data
which QuadraMed will not assume:
(a) any Liability of Med Data arising out of or in any way
relating to or resulting from any Software or Software system installed or sold
or product manufactured, assembled or sold prior to the Closing Date provided
either (i) Eclipsys or Med Data had Knowledge of such Liability or (ii) the
claim related to the Liability was made on or prior to the Closing Date;
(b) any Liability of Med Data arising out of or related to any
past, present, future or threatened action, suit, proceeding, arbitration,
investigation or inquiry, whether civil, criminal or administrative pending
involving Med Data to the extent the facts on which the relevant action is based
occurred in whole or in part before the Closing, including, without limitation,
those items listed on Schedule 3.21;
(c) any Liabilities of Med Data to its present or former
Affiliates including, without limitation, any intercompany loans or balances to
Eclipsys from Med Data;
(d) any Liabilities of Med Data for any violation of or
failure to comply with any statute, law, ordinance, rule or regulation or any
order, writ, injunction, judgment, plan or decree of any court, arbitrator,
department, commission, board,
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bureau, agency, authority, instrumentality or other governmental body, whether
federal, state, municipal, foreign or other;
(e) any Liabilities of Med Data to indemnify any Person by
reason of the fact that such Person was a director, officer, employee or agent
of Med Data or was serving at the request of any such entity as a partner,
trustee, director, officer, employee or agent of another entity (whether such
indemnification is for judgments, damages, penalties, fines, costs, amounts paid
in settlement, losses, expenses or otherwise and whether such indemnification is
pursuant to any statute, charter document, bylaw, agreement or otherwise);
(f) any Liabilities in respect of any Contract or agreement to
which Med Data is a party or beneficiary which is not an Assumed Contract;
(g) any Liabilities of Med Data in connection with
Environmental, Health and Safety Requirements;
(h) any Liabilities of Med Data for any Tax of any kind,
accrued or accruing, with respect to the business conducted by Med Data,
including, without limitation, any income, franchise, transfer, sales, use,
gross receipts or documentary stamp taxes, and any Liabilities of Med Data for
the unpaid Taxes of any Person other than Med Data under Treas. Reg. Section
1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by Contract or otherwise;
(i) any Liabilities of Med Data arising at any time as a
result of any claim pertaining to an event or omission by Med Data, or any of
its respective agents or employees, at any time prior to the Closing Date;
(j) any Liabilities of Med Data arising out of any Employee
Benefit Plans or any Liabilities arising out of any termination thereof;
(k) except as set forth in Section 7.3 below, any Liabilities
of Med Data for payments of any kind to any employee with respect to claims or
causes of action arising on or before the Closing Date or for any accrued
regular pay, vacation pay, sick pay, severance, bonus or similar arrangement
with respect to any employee of Med Data other than any severance liability to
Alan Belkin; and
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(l) any Liability of Med Data for costs, expenses or other
obligations incurred in connection with this Agreement and the transactions
contemplated hereby, or for any breach or failure, arising prior to the Closing
Date, to perform any of Med Data's covenants and agreements contained in, or
made pursuant to, this Agreement.
2.5. Post-Closing Working Capital Adjustment.
(a) QuadraMed shall cause to be internally prepared and
delivered to Eclipsys as soon as practicable, and in any event on the Closing
Date, a balance sheet (the "Closing Date Balance Sheet"). The Closing Date
Balance Sheet shall be prepared in accordance with GAAP and shall be accompanied
by a computation of the working capital of Med Data. Eclipsys shall have until
thirty (30) days after the Closing Date to review such computation and in the
event Eclipsys disagrees, Eclipsys shall identify and notify QuadraMed as to any
amount to which it disagrees (the "Disputed Working Capital Amount") along with
the basis for its objections in reasonable detail. If the amount of working
capital set forth in the Closing Date Balance Sheet is less than $138,324, the
Closing Consideration shall be adjusted downward by such amount (the
"Post-Closing Working Capital Adjustment"). Any amount of the Post-Closing
Working Capital Adjustment that is not in dispute shall be paid by Eclipsys to
QuadraMed within five (5) business days by wire transfer to an account
designated by QuadraMed. To the extent there is any Disputed Working Capital
Amount, the parties agree to resolve such dispute by utilizing the procedures
set forth in Section 2.5(b).
(b) If the parties do not obtain a final resolution within
twenty (20) days after QuadraMed's receipt of a statement of objections,
QuadraMed and Eclipsys will select an accounting firm mutually acceptable to
them to resolve any remaining objections. If QuadraMed and Eclipsys are unable
to agree on a choice of an accounting firm, such accounting firm will be
selected by lot from a list of nationally recognized accounting firms, after
excluding the regular outside accounting firms of QuadraMed and Eclipsys. The
determination of any accounting firm so selected will be set forth in writing
and will be conclusive and binding on the parties. If the accounting firm
determines that QuadraMed is entitled under this Section 2.5(b) to payment of
all of any portion of the Disputed Working Capital Amount from Eclipsys,
Eclipsys shall pay such amount with interest from the Closing Date to the date
such amount was actually paid at the
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prime rate specified in The Wall Street Journal from time to time. In the event
the parties submit any unresolved objections to an accounting firm for
resolution as provided in this Section 2.5(b), fees and expenses of the
accounting firm shall be borne equally by QuadraMed and Eclipsys.
2.6. Prorations. Proration of the items set forth on Schedule 2.6
relating to the Purchased Assets will be made as of the Closing Date, with Med
Data liable to the extent such items relate to any time period up to and
including the Closing Date and QuadraMed liable to the extent such items relate
to periods subsequent to the Closing Date, which schedule shall include (i)
personal property taxes and real estate taxes and assessments, if any, on or
with respect to the Purchased Assets and (ii) rents and other items payable by
Med Data under any lease, license, permit, Contract or other agreement or
arrangement to be assigned to or assumed by QuadraMed. The net amount of all
such prorations will be settled and paid within thirty (30) days after the
Closing Date. If the actual expense is not payable within thirty (30) days after
the date hereof, the proration shall be made as soon as possible after the
amounts become known.
2.7. Non-Assignable Agreements. This Agreement shall not constitute an
agreement to assign any Contract or other Purchased Assets if an assignment or
attempted assignment of the same without the consent of the other party thereto
would constitute a breach thereof or in any way impair the rights of QuadraMed
thereunder. If such consent is not obtained, or if an attempted assignment would
be ineffective or would materially impair QuadraMed's rights thereunder so that
QuadraMed would not, in fact, receive all such rights, Med Data shall act as the
agent of QuadraMed in order to attempt to obtain for QuadraMed the benefits
thereunder. All costs or expenses of performance of Med Data's obligations
following the Closing Date under the terms of such an assigned agreement shall
be borne by QuadraMed as provided in this Agreement. In the event the third
party will not permit QuadraMed to so act as the agent of Med Data, or QuadraMed
is prohibited by law from doing so, Med Data shall, at QuadraMed's option,
assume all of the remaining burdens and obligations under the relevant
instrument, and QuadraMed shall make available to Med Data the Intellectual
Property and services necessary to fulfill the obligations under the agreement
on the same terms and conditions as the agreement imposes upon Med Data. The
purpose of this provision is to allow Med Data to pass through the benefits and
costs of any non-assignable agreements. QuadraMed agrees to cooperate in the
negotiations related to any
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attempt to obtain a consent to assign a Contract or other Purchased Asset.
2.8. Closing Consideration. The initial purchase price payment shall be
$5,000,000 in cash (the "Closing Consideration") payable by wire transfer
pursuant to instructions to be provided to QuadraMed by Eclipsys prior to the
Closing.
2.9. Allocation. The parties agree to allocate the Closing
Consideration among the Purchased Assets for all purposes (including financial
accounting and tax purposes) in accordance with an allocation schedule to be
provided by QuadraMed within thirty (30) days from the Closing Date. The parties
hereto covenant and agree with each other that this allocation has been arrived
at by arms-length negotiation and that none of them will take a position on any
income tax return, before any governmental agency charged with the collection of
income tax or in any judicial proceeding that is in any manner inconsistent with
the terms of this Section 2.9 without the written consent of the other parties
to this Agreement.
2.10. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place either by facsimile or at the offices
of Zevnik Horton Guibord McGovern Palmer & Fognani, L.L.P., 101 West Broadway,
17th Floor, San Diego, California 92101, commencing at 9:00 a.m. local time as
soon as practicable following the satisfaction or waiver of all conditions to
the obligations of the parties to consummate the transactions contemplated
hereby (other than conditions with respect to actions the respective parties
will take at the Closing itself) or such other date as the parties may mutually
determine, not later than July 3, 1999 (the "Closing Date").
2.11. Deliveries at Closing. At the Closing, (i) each of Eclipsys and
Med Data will deliver to QuadraMed the various certificates, instruments and
documents referred to in Section 6.2 below, (ii) QuadraMed will deliver to each
of Eclipsys and Med Data the various certificates, instruments and documents
referred to in Section 6.3 below, (iii) QuadraMed and Med Data will each
execute, acknowledge (if appropriate) and deliver the documentation perfecting
the general assignment and assumption of the Purchased Assets, substantially in
the form attached hereto as Exhibit "A" and incorporated herein by this
reference, and such other specific instruments of sale, transfer, conveyance and
assignment as QuadraMed or Med Data (or their counsel) reasonably
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may request and (iv) QuadraMed will deliver to Eclipsys the Closing
Consideration.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
OF ECLIPSYS AND MED DATA
Eclipsys and Med Data, jointly and severally, hereby represent and
warrant to QuadraMed as follows:
3.1. Organization and Good Standing. Both Eclipsys and Med Data are
corporations duly organized, validly existing and in good standing under the
laws of the states of their respective incorporation with full corporate power
and authority to conduct their respective businesses as they are now being
conducted, to own or use the properties and assets that each purports to own or
use and to perform all of Med Data's obligations under all Contracts. Med Data
is duly organized and in good standing as a foreign corporation authorized to do
business in each jurisdiction where the failure to be so authorized would,
individually or in the aggregate, have a Material Adverse Effect on Med Data.
Med Data does not have any subsidiaries.
3.2. Capitalization; Stock Ownership. Eclipsys owns all of the
outstanding shares of capital stock of Med Data free and clear of any and all
Encumbrances.
3.3. Authority; No Conflict. Each of Eclipsys and Med Data has full
power and authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of each of
Eclipsys and Med Data, enforceable in accordance with its terms and conditions.
Except as set forth on Schedule 3.3, neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge or other restriction of any government,
governmental agency or court to which Med Data is subject or any provision of
the Articles of Incorporation or Bylaws of Eclipsys or Med Data, each as may be
amended, or (ii) to the Knowledge of Eclipsys or Med Data, conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify or cancel, or
require any notice or consent under any Contract or other arrangement to which
either Eclipsys
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or Med Data is a party or by which either is bound or to which any of the
Purchased Assets is subject (or result in the imposition of any Encumbrance upon
any of the Purchased Assets). To the Knowledge of Eclipsys or Med Data, neither
Eclipsys nor Med Data needs to give any notice to, make any filing with or
obtain any authorization, consent or approval of any government or governmental
agency in order for the parties to consummate the transactions contemplated by
this Agreement.
3.4. Brokers' Fees. Neither Eclipsys nor Med Data has any Liability to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which QuadraMed could become
liable or obligated.
3.5. Assets. Med Data has good and marketable title to, or a valid
leasehold interest in the Purchased Assets, free and clear of all Encumbrances,
except for properties and assets disposed of in the Ordinary Course of Business
since the date of the Financial Statements. The Purchased Assets are adequate
for the uses to which they are being put, and none of such properties and assets
is in need of maintenance or repairs except for ordinary, routine maintenance
and repairs.
3.6. Financial Statements. Med Data has delivered or made available to
QuadraMed true and complete copies of the Financial Statements. The Financial
Statements (i) have been prepared from the books and records of Med Data in
accordance with GAAP, consistently applied and maintained throughout the periods
indicated, and (ii) fairly present the financial position, assets and
liabilities (whether accrued, absolute, contingent or otherwise) of Med Data at
the dates indicated and fairly present the results of operations of Med Data for
the periods indicated. The Financial Statements for all such periods contain all
adjustments, which are solely of a normal recurring nature, necessary to present
fairly the financial position for the periods then ended. No financial
statements of any Person other than Med Data are required by GAAP to be included
in the consolidated financial statements of Med Data.
3.7. Billings. All billings to customers which are party to oral or
written Contracts of Med Data have been accurate in all material respects. To
the Knowledge of Eclipsys or Med Data, there are no oral agreements or side
deals with such customers or individuals associated therewith. To the Knowledge
of Eclipsys or Med Data, there are no existing, threatened or suspected
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disputes, offsets or counterclaims regarding any services rendered or billings
to such customers.
3.8. Absence of Changes. Except as set forth on Schedule 3.8, since May
31, 1999, there has not been any material adverse change in the business,
financial condition, operations, results of operations or future prospects of
Med Data. Without limiting the generality of the foregoing, since that date and
to the Knowledge of Eclipsys or Med Data:
(a) Med Data has not sold, leased, transferred or assigned any
of its assets, tangible or intangible, other than for a fair consideration in
the Ordinary Course of Business;
(b) Med Data has not entered into any agreement, Contract,
lease or license (or series of related agreements, Contracts, leases and
licenses) either involving more than $50,000 outside the Ordinary Course of
Business;
(c) no party (including Med Data) has accelerated, terminated,
modified or cancelled any agreement, Contract, lease or license (or series of
related agreements, Contracts, leases and licenses) involving more than $50,000
to which Med Data is a party or by which Med Data is bound;
(d) Med Data has not imposed any Encumbrance upon any of its
assets, tangible or intangible;
(e) Med Data has not made any capital expenditure (or series
of related capital expenditures) either involving more than $50,000 outside the
Ordinary Course of Business;
(f) Med Data has not made any capital investment in, any loan
to or any acquisition of the securities or assets of, any other Person (or
series of related capital investments, loans and acquisitions) either involving
more than $50,000 outside the Ordinary Course of Business;
(g) Med Data has not issued any note, bond or other debt
security or created, incurred, assumed or guaranteed any indebtedness for
borrowed money or capitalized lease obligation either involving more than
$50,000 singly or $250,000 in the aggregate;
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(h) Med Data has not delayed or postponed the payment of
accounts payable and other Liabilities outside the Ordinary Course of Business;
(i) Med Data has not cancelled, compromised, waived or
released any right or claim (or series of related rights and claims) either
involving more than $50,000 or outside the Ordinary Course of Business;
(j) Med Data has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
(k) there has been no change made or authorized in the
Articles of Incorporation or Bylaws of Med Data, each as may be amended;
(l) Med Data has not issued, sold or otherwise disposed of any
of its capital stock or granted any options, warrants or other rights to
purchase or obtain (including upon conversion, exchange or exercise) any of its
capital stock;
(m) Med Data has not declared, set aside or paid any dividend
or made any distribution with respect to its capital stock (whether in cash or
in kind) or redeemed, purchased or otherwise acquired any of its capital stock;
(n) Med Data has not experienced any damage, destruction or
loss (whether or not covered by insurance) to its property;
(o) Med Data has not made any loan to, or entered into any
other transaction with, any of its directors, officers and employees outside the
Ordinary Course of Business;
(p) Med Data has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the terms of any
existing such contract or agreement;
(q) Med Data has not granted any increase in the base
compensation of any of its directors, officers and employees outside the
Ordinary Course of Business;
(r) Med Data has not adopted, amended, modified or terminated
any bonus, profit-sharing, incentive, severance or other plan, contract or
commitment for the benefit of any of its directors, officers and employees (or
taken any such action with respect to any other Employee Benefit Plan);
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(s) Med Data has not made any other change in employment terms
for any of its directors, officers and employees outside the Ordinary Course of
Business;
(t) Med Data has not made or pledged to make any charitable or
other capital contribution outside the Ordinary Course of Business;
(u) Med Data has not paid any amount to any third party with
respect to any Liability or obligation (including any costs and expenses Med
Data has incurred or may incur in connection with this Agreement and the
transactions contemplated hereby) which would not constitute an Assumed
Liability if in existence as of the Closing;
(v) there has not been any other material occurrence, event,
incident, action, failure to act or transaction outside the Ordinary Course of
Business involving Med Data; and
(w) Med Data has not committed to any of the foregoing.
3.9. Undisclosed Liabilities. To the Knowledge of Eclipsys and Med Data
or to the Knowledge of SunGard to the extent provided in the SunGard Agreement,
Med Data has no Liabilities (and there is no Basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim or
demand against any of them giving rise to any Liabilities), except for
Liabilities (i) set forth on Schedule 3.9, (ii) set forth on the face of the
Financial Statements (rather than in any notes thereto) and (ii) which have
arisen after the date of the Financial Statements in the Ordinary Course of
Business (none of which results from, arises out of, relates to, is in the
nature of or was caused by any breach of Contract, breach of warranty, tort,
infringement or violation of law).
3.10.Legal Compliance. To the Knowledge of Eclipsys or Med Data, or to
the Knowledge of SunGard to the extent provided in the SunGard Agreement, Med
Data and its predecessors and Affiliates have complied with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings and charges thereunder) of federal, state, local and foreign
governments (and all agencies thereof), and no action, suit, proceeding,
hearing, investigation, charge,
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complaint, claim, demand or notice has been filed or commenced against any of
them alleging any failure so to comply.
3.11. Minutes Books. To the Knowledge of Eclipsys or Med Data, the
minute book of Med Data contains reasonably complete and accurate records of all
meetings and other corporate actions of its shareholders and board of directors
and committees thereof.
3.12. Tax Matters. Med Data has timely paid (and after the Closing Date
will timely pay) all Taxes for periods prior to and including the Closing Date
that are due and payable, nonpayment of which would (i) result in an Encumbrance
on any of the Purchased Assets, (ii) have a Material Adverse Effect on Med Data
or (iii) result in QuadraMed becoming liable therefor. Med Data has complied
with (and will comply with through and including the Closing Date) all
applicable legal requirements relating to the filing of Tax Returns or the
payment and withholding of Taxes relating to employee wages, salaries and other
compensation and has timely withheld and paid over (and will timely withhold and
pay over through and including the Closing Date) to the proper governmental
authorities all amounts required to be withheld and paid over for all periods
under all applicable laws with respect to the employees of Med Data.
3.13. Real Property. Med Data does not own any real property. Schedule
3.13 lists and describes briefly all real property leased to Med Data. Med Data
has delivered or made available to QuadraMed correct and complete copies of the
leases listed on Schedule 3.13, and with respect thereto to the Knowledge of
Eclipsys or Med Data and to the Knowledge of SunGard to the extent provided in
the SunGard Agreement: (i) the lease is legal, valid, binding, enforceable and
in full force and effect; (ii) the lease will continue to be legal, valid,
binding, enforceable and in full force and effect on identical terms following
the consummation of the transactions contemplated hereby; (iii) Med Data is not
in breach or default, and no event has occurred which, with notice or lapse of
time, would constitute a breach or default by Med Data or permit by the landlord
termination, modification or acceleration thereunder; (iv) no party to the lease
has repudiated any provision thereof; (v) there are no disputes, oral agreements
or forbearance programs in effect as to the lease; (vi) Med Data has not
assigned, transferred, conveyed, mortgaged, deeded in trust, or encumbered any
interest in the leasehold; (vii) all facilities leased thereunder have received
all approvals of governmental
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authorities (including licenses and permits) required in connection with the
operation thereof and have been operated and maintained in accordance with
applicable laws, rules and regulations; and (viii) all facilities leased
thereunder are supplied with utilities and other services necessary for the
operation of said facilities.
3.14. Intellectual Property. Except as set forth on Schedule 3.14 and
included in the Purchased Assets, Med Data neither owns nor has the right to use
any Intellectual Property, and no Intellectual Property is necessary for the
operation of the business of Med Data as presently conducted. To the Knowledge
of Eclipsys or Med Data, Med Data has not interfered with, infringed upon,
misappropriated or otherwise come into conflict with any Intellectual Property
rights of third parties, and none of the directors and officers (and employees
with responsibility for Intellectual Property matters) of Med Data has ever
received any charge, complaint, claim, demand or notice alleging any such
interference, infringement, misappropriation or violation (including any claim
that Med Data must license or refrain from using any Intellectual Property
rights of any third party). To the Knowledge of Eclipsys or Med Data, Med Data
will not interfere with, infringe upon, misappropriate or otherwise come into
conflict with, any Intellectual Property rights of third parties as a result of
the continued operation of its business as presently conducted. Schedule 3.14
identifies each item of Intellectual Property that any third party owns and that
Med Data uses pursuant to license, sublicense, agreement or permission. Med Data
has delivered or made available to QuadraMed correct and complete copies of all
such licenses, sublicenses, agreements and permissions (as amended to date).
With respect to each such item, to the Knowledge of Eclipsys or Med Data or to
the Knowledge of SunGard to the extent provided in the SunGard Agreement: (i)
the license, sublicense, agreement or permission covering the item is legal,
valid, binding, enforceable and in full force and effect; (ii) the license,
sublicense, agreement or permission will continue to be legal, valid, binding,
enforceable and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby; (iii) no party to the
license, sublicense, agreement or permission is in breach or default, and no
event has occurred which with notice or lapse of time would constitute a breach
or default or permit termination, modification or acceleration thereunder; (iv)
no party to the license, sublicense, agreement or permission has repudiated any
provision thereof; (v) with respect to each sublicense, the representations
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and warranties set forth in subsections (i) through (iv) above are true and
correct with respect to the underlying license; (vi) the underlying item of
Intellectual Property is not subject to any outstanding injunction, judgment,
order, decree, ruling or charge; (vii) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand is pending or, is threatened
which challenges the legality, validity or enforceability of the underlying item
of Intellectual Property; and (viii) Med Data has not granted any sublicense or
similar right with respect to the license, sublicense, agreement or permission.
3.15. Software. Except as set forth on Schedule 3.15, the Software
performs in all material respects in accordance with the related documentation,
is in machine-readable form, contains all current revisions of such Software and
includes all computer programs, materials, know-how and processes related to the
Software. Med Data has delivered or made available to QuadraMed complete and
correct copies of all user and technical documentation related to the Software.
All right, title and interest in and to the Software is owned by Med Data, free
and clear of all Encumbrances except for those which would not materially impair
the value on use of such Software, are fully transferable to QuadraMed, and no
party other than Med Data has any interest in the Software, including, without
limitation, any Encumbrance, license, contingent interest or otherwise. To the
Knowledge of Eclipsys or Med Data, or to the Knowledge of SunGard to the extent
provided in the SunGard Agreement, Med Data's development, use, sale or
exploitation of the Software does not violate any rights of any other person or
entity and Med Data has received no communication alleging such a violation. Med
Data has used commercially reasonable efforts to protect the confidential and
proprietary nature of the Software. Except as set forth on Schedule 3.15, there
have been no patents applied for and no copyrights registered for any part of
the Software.
3.16. Contracts. Schedule 3.16 lists the following contracts and other
agreements to which Med Data is a party, to the Knowledge of Eclipsys or Med
Data:
(a) any agreement (or group of related agreements) for the
lease of personal property to or from any Person providing for lease payments in
excess of $50,000 per annum;
(b) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies,
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products or other personal property, or for the furnishing or receipt of
services, the performance of which will extend over a period of more than one
(1) year, result in a material loss to Med Data, or involve consideration in
excess of $50,000;
(c) any agreement concerning a partnership or joint venture;
(d) any agreement (or group of related agreements) under which
it has created, incurred, assumed or guaranteed any indebtedness for borrowed
money, or any capitalized lease obligation, in excess of $50,000 or under which
it has imposed an Encumbrance on any of its assets, tangible or intangible;
(e) any agreement concerning confidentiality or noncompetition;
(f) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance or other material plan or
arrangement for the benefit of its current or former directors, officers and
employees;
(g) any collective bargaining agreement;
(h) any agreement for the employment of any individual on a
full-time, part-time, consulting or other basis providing annual compensation in
excess of $100,000 or providing severance benefits;
(i) any agreement under which it has advanced or loaned any
amount to any of its directors, officers and employees outside the Ordinary
Course of Business;
(j) any agreement under which the consequences of a default or
termination could have a material adverse effect on the business, financial
condition, operations, results of operations or future prospects of Med Data; or
(k) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $50,000.
Med Data has delivered or made available to QuadraMed a correct and complete
copy of each written agreement listed on Schedule 3.16 (as amended to date) and
a written summary setting forth the terms and conditions of each oral agreement
referred to on Schedule 3.16. With respect to each such agreement, to the
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Knowledge of Eclipsys or to the Knowledge of SunGard to the extent provided in
the SunGard Agreement: (i) the agreement is legal, valid, binding, enforceable
and in full force and effect; (ii) the agreement will continue to be legal,
valid, binding, enforceable and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby; (iii) no
party is in material breach or default, and no event has occurred which with
notice or lapse of time would constitute a material breach or default, or permit
termination, modification or acceleration, under the agreement; and (iv) no
party has repudiated any provision of the agreement.
3.17. Notes and Accounts Receivable. To the Knowledge of Eclipsys or
Med Data, all notes and accounts receivable of Med Data are reflected properly
on their books and records, are valid receivables subject to no pending or
threatened set-offs or counterclaims, subject only to the reserve for bad debts
set forth on the face of the Financial Statements as adjusted for the passage of
time through the Closing Date in accordance with the past custom and practice of
Med Data. Med Data has no inventory on its balance sheet.
3.18. Insurance. Since its acquisition by Eclipsys, Med Data has been
covered by insurance in scope and amount customary and reasonable for the
business in which it is engaged.
3.19. Litigation. Schedule 3.19 sets forth each instance in which Med
Data (i) is subject to any outstanding injunction, judgment, order, decree,
ruling or charge or (ii) is a party or, to the Knowledge of Eclipsys or Med Data
or to the Knowledge of SunGard to the extent provided in the SunGard Agreement,
is threatened to be made a party to any action, suit, proceeding, hearing or
investigation of, in or before any court or quasi-judicial or administrative
agency of any federal, state, local or foreign jurisdiction or before any
arbitrator. None of the actions, suits, proceedings, hearings and investigations
set forth on Schedule 3.19 is substantially likely to result in any Material
Adverse Effect on Med Data. To the Knowledge of Eclipsys or Med Data or to the
Knowledge of SunGard to the extent provided in the SunGard Agreement, there is
no reason to believe that any such action, suit, proceeding, hearing or
investigation may be brought or threatened against Med Data for acts prior to
the Closing Date.
3.20. Employees. To the Knowledge of Eclipsys or Med Data, no
executive, key employee or group of employees has any plans to terminate
employment with Med Data. Med Data is not a
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party to or bound by any collective bargaining agreement, nor has it experienced
any strikes, grievances, claims of unfair labor practices or other collective
bargaining disputes. Med Data has not committed any unfair labor practice. To
the Knowledge of Eclipsys or Med Data, no organizational effort is presently
being made or threatened by or on behalf of any labor union with respect to
employees of Med Data.
3.21. Employee Benefits. Schedule 3.21 lists each Employee Benefit Plan
to which Med Data contributes or is a party or is bound and under which it may
have liability and under which employees or former employees of Med Data (or
their beneficiaries) are eligible to participate or derive a benefit. Med Data
has delivered or made available to QuadraMed true, correct and complete copies
of all Employee Benefit Plans. The Purchased Assets are not subject to any
Encumbrance in favor of, or enforceable by, the PBGC. No Liability has been or
is expected to be incurred by Med Data under or pursuant to Title I or IV of
ERISA where the penalty, excise tax or joint and several liability provisions of
the Code or ERISA relating to employee benefit plans and, to the Knowledge of
Med Data, no event, transaction or condition has occurred or exists that could
result in any such Liability to Med Data or, following the Closing, QuadraMed,
or any such Employee Benefit Plan. No Employee Benefit Plan is a "Multiemployer
Plan" within the meaning of Section 4001(a)(3) of ERISA, a "multi-employer plan"
within the meaning of Section 413(c) of the Code or a defined benefit plan
within the meaning of Section B(35) of ERISA.
3.22. Environmental, Health and Safety Requirements. To the Knowledge
of Eclipsys or Med Data, Med Data and its predecessors and Affiliates have
complied and are in compliance with all Environmental, Health and Safety
Requirements. Without limiting the generality of the foregoing, to the Knowledge
of Eclipsys or Med Data, Med Data and its respective Affiliates has obtained and
complied with, and is in compliance with, all permits, licenses and other
authorizations that are required pursuant to Environmental, Health and Safety
Requirements for the occupation of its facilities and the operation of its
business. To the Knowledge of Eclipsys or Med Data, neither Med Data nor its
predecessors or Affiliates has received any written or oral notice, report or
other information regarding any actual or alleged violation of Environmental,
Health and Safety Requirements, or any Liabilities or potential Liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise), including
any investigatory, remedial or corrective
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obligations, relating to any of them or their facilities arising under
Environmental, Health and Safety Requirements. To the Knowledge of Eclipsys or
Med Data, none of the following exists at any property or facility operated by
Med Data: (i) underground storage tanks; (ii) asbestos-containing material in
any form or condition; (iii) materials or equipment containing polychlorinated
biphenyls; or (iv) landfills, surface impoundments or disposal areas. To the
Knowledge of Eclipsys or Med Data, neither Med Data nor its predecessors or
Affiliates has treated, stored, disposed of, arranged for or permitted the
disposal of, transported, handled or released any substance, including, without
limitation, any hazardous substance, or owned or operated any property or
facility (and no such property or facility is contaminated by any such
substance) in a manner that has given or would give rise to Liabilities,
including any Liability for response costs, corrective action costs, personal
injury, property damage, natural resources damages or attorney fees, pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, the Solid Waste Disposal Act, as amended, or any other
Environmental, Health and Safety Requirements. To the Knowledge of Eclipsys or
Med Data, neither this Agreement nor the consummation of the transactions that
are the subject of this Agreement will result in any obligations for site
investigation or cleanup, or notification to or consent of government agencies
or third parties, pursuant to any of the so-called "transaction-triggered" or
"responsible property transfer" Environmental, Health and Safety Requirements.
To the Knowledge of Eclipsys or Med Data, neither Med Data nor any of its
predecessors or Affiliates has, either expressly or by operation of law, assumed
or undertaken any liability, including, without limitation, any obligation for
corrective or remedial action, of any other Person relating to Environmental,
Health and Safety Requirements.
3.23. Disclosure. The representations and warranties contained in this
Article 3 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Article 3 not misleading, except to the extent
such misstatement or omission would not result in a Material Adverse Effect.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
OF QUADRAMED
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QuadraMed hereby represents and warrants to Med Data as follows:
4.1. Organization and Good Standing. QuadraMed is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
4.2. Authority; No Conflict. QuadraMed has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of QuadraMed, enforceable in accordance
with its terms and conditions. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government,
governmental agency or court to which QuadraMed is subject or any provision of
its Certificate of Incorporation or Bylaws, each as may be amended, or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
cancel or require any notice or consent under any agreement, Contract, lease,
license, instrument or other arrangement to which QuadraMed is a party or by
which it is bound or to which any of its assets is subject. QuadraMed does not
need to give any notice to, make any filing with or obtain any authorization,
consent or approval of any government or governmental agency in order for the
parties to consummate the transactions contemplated by this Agreement.
4.3. Brokers' Fees. QuadraMed has no Liability to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement for which Med Data could become liable or
obligated.
ARTICLE 5.
PRE-CLOSING COVENANTS
The parties hereby agree as follows with respect to the period between
the execution of this Agreement and the Closing:
5.1. Further Assurances. Each of the parties will use its reasonable
best efforts to take all action and to do all things necessary, proper or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement
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(including satisfaction, but not waiver, of the closing conditions set forth in
Article 6 below).
5.2. Notices and Consents. Med Data will give notices to third parties,
and will use its reasonable efforts to obtain any third party consents, that
QuadraMed reasonably may request in connection with the matters referred to in
this Agreement. Each of the parties will give any notices to, make any filings
with and use its reasonable best efforts to obtain any authorizations, consents
and approvals of governments and governmental agencies in connection with the
matters referred to in this Agreement.
5.3. Operation of Business. Med Data will not engage in any practice,
take any action or enter into any transaction outside the Ordinary Course of
Business. Without limiting the generality of the foregoing, Med Data will not
(i) declare, set aside or pay any dividend or make any distribution with respect
to its capital stock or redeem, purchase or otherwise acquire any of its capital
stock, (ii) pay any amount to any third party with respect to any Liability
(including any costs and expenses Med Data has incurred or may incur in
connection with this Agreement and the transactions contemplated hereby) which
would not constitute an Assumed Liability if in existence as of the Closing or
(iii) otherwise engage in any practice, take any action or enter into any
transaction of the sort described in Section 3.8 above.
5.4. Preservation of Business. Med Data will keep its business and
properties substantially intact, including its present operations, physical
facilities, working conditions and relationships with lessors, licensors,
licensees, suppliers, customers and employees.
5.5. Full Access. Med Data will permit representatives of QuadraMed to
have full access at all reasonable times, and in a manner so as not to interfere
with the normal business operations of the Company, to all premises, properties,
personnel, books, records (including Tax records), Contracts and documents of or
pertaining to Med Data.
5.6. Notice of Developments. Each party will give prompt written notice
to the other parties of any material adverse development causing a breach of any
of its own representations and warranties in Article 3 or Article 4 above. No
disclosure by any party pursuant to this Section 5.6, however, shall be deemed
to amend or supplement the schedules hereto or to prevent or cure
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any misrepresentation or breach of any representation, warranty or covenant
contained herein.
5.7. Public Announcement. Neither party shall issue any press release
or make any public announcement relating to the subject matter of this Agreement
prior to the Closing without the prior written approval of the other party;
provided, however that either party may make any public disclosure it believes
in good faith is required by applicable law or any listing or trading agreement
concerning its publicly traded securities (in which case the disclosing party
will use best efforts to advise the other party prior to making the disclosure).
5.8. Exclusivity. Neither Eclipsys nor Med Data will (i) solicit,
initiate or encourage the submission of any proposal or offer from any Person
relating to the acquisition of any capital stock or other voting securities, or
any substantial portion of the assets of Med Data (including any acquisition
structured as a merger, consolidation or share exchange) or (ii) participate in
any discussions or negotiations regarding, furnish any information with respect
to, assist or participate in or facilitate in any other manner any effort or
attempt by any Person to do or seek any of the foregoing. Med Data will notify
QuadraMed immediately if any Person makes any proposal, offer, inquiry or
contact with respect to any of the foregoing.
ARTICLE 6.
CONDITIONS TO OBLIGATION TO CLOSE
6.1. Conditions to Obligation of Each Party. The obligation of each
party hereto to consummate the transactions to be performed by such party in
connection with the Closing is subject to satisfaction of the following
conditions:
(a) no injunction or restraining or other order issued by a
court of competent jurisdiction which prohibits the consummation of the
transactions contemplated by this Agreement shall be in effect (each party
agreeing to use diligent efforts to have any such injunction or order lifted),
and no governmental action or proceeding shall have been commenced or threatened
in writing seeking any injunction or restraining or other order that seeks to
prohibit, restrain, invalidate or set aside consummation of the transactions
contemplated by this Agreement;
(b) no action will have been taken, and no statute, rule or
regulation will have been enacted, by any state or
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federal government agency that would render the consummation of the transactions
contemplated hereby illegal; and
(c) all governmental filings or approvals required in
connection with the consummation of the transactions contemplated by this
Agreement.
6.2. Conditions to Obligation of QuadraMed. The obligation of QuadraMed
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions, any of which
conditions may be waived by QuadraMed executing a writing so stating at or prior
to the Closing:
(a) the representations and warranties set forth in Article 3
above shall be true and correct at and as of the Closing Date, except to the
extent an inaccuracy would not result in a Material Adverse Effect;
(b) Med Data shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(c) Med Data shall have used best efforts to procure all of
the third party consents specified in Section 3.3 above;
(d) no action, suit or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction or before any arbitrator wherein
an unfavorable injunction, judgment, order, decree, ruling or charge would (i)
prevent consummation of any of the transactions contemplated by this Agreement,
(ii) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation or (iii) affect adversely the right of
QuadraMed to own the Purchased Assets and to operate the former business of Med
Data (and no such injunction, judgment, order, decree, ruling or charge shall be
in effect);
(e) Med Data shall have delivered to QuadraMed a certificate
to the effect that each of the conditions specified above in Sections 6.2(b)-(e)
are satisfied in all respects;
(f) Eclipsys and Med Data shall have delivered to QuadraMed a
certificate of the Secretary of Med Data attesting to (i) the incumbency of its
officers executing the Agreement and
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the other agreements and certificates delivered by Med Data at the Closing and
(ii) the authenticity of the Articles of Incorporation and Bylaws of Med Data,
each as may be amended, and the resolutions required by Section 6.2(h) below;
(g) Eclipsys and Med Data shall have delivered to QuadraMed
resolutions of the shareholder and Board of Directors of Med Data authorizing
the execution, delivery and performance of this Agreement, certified by the
Secretary of Med Data and Eclipsys;
(h) Med Data shall have delivered to QuadraMed a certificate
of existence and a certificate of good standing for Med Data issued by the state
of incorporation not more than ten (10) days prior to the Closing Date;
(i) all actions to be taken by Med Data in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
QuadraMed.
6.3. Conditions to Obligation of Med Data. The obligation of Med Data
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions, any of which
conditions may be waived if Med Data executes a writing so stating at or prior
to the Closing:
(a) the representations and warranties set forth in Article 4
above shall be true and correct at and as of the Closing Date, except to the
extent an inaccuracy would not result in a Material Adverse Effect;;
(b) QuadraMed shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing;
(c) no action, suit or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction or before any arbitrator wherein
an unfavorable injunction, judgment, order, decree, ruling or charge would (i)
prevent consummation of any of the transactions contemplated by this Agreement
or (ii) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no
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such injunction, judgment, order, decree, ruling or charge shall be in effect);
(d) QuadraMed shall have delivered to Med Data a certificate
to the effect that each of the conditions specified above in Sections 6.3(a)-(c)
is satisfied in all respects;
(e) all actions to be taken by QuadraMed in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to Med
Data.
ARTICLE 7.
POST-CLOSING COVENANTS
The parties hereby agree as follows with respect to the period
following the Closing:
7.1. Further Assurances. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as the other
party reasonably may request, all the sole cost and expense of the requesting
party (unless the requesting party is entitled to indemnification therefor under
Article 8 below).
7.2. Transition. Neither Eclipsys nor Med Data will take any action
that is designed or intended to have the effect of discouraging any lessor,
licensor, customer, supplier or other business associate of Med Data from
maintaining the same business relationships with QuadraMed after the Closing as
it maintained with Med Data prior to the Closing.
7.3. Employment of Med Data's Employees. Eclipsys and Med Data will use
all reasonable efforts to cause the employees employed in the operation of Med
Data's business to make available their employment services to QuadraMed. For a
period of two years from the Closing Date, neither Eclipsys nor any affiliate
thereof will solicit, offer to employ or retain the services of or otherwise
interfere with the relationship of QuadraMed with any person employed or
otherwise engaged to perform services for QuadraMed in connection with the
operation of Med Data's business. Effective as of the Closing Date, QuadraMed
shall offer employment to all employees of Med Data other than Alan Belkin who
are employed by Med Data principally
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in the operation of its business at their existing wage or salary levels and
with QuadraMed's standard employee benefits. All employees of Med Data shall
receive credit for length of service with Med Data in computing vacation time
and other employee benefits of QuadraMed computed or determined by reference to
length of service. QuadraMed shall assume the liability of Med Data in respect
of the Transferred Employees for accrued vacation, which shall be utilizable by
such employees in accordance with QuadraMed's standard policies and procedures,
but only to the extent such liability is reflected in the Financial Statements
or arose in the Ordinary Course of Business between May 31, 1999 and the Closing
Date. Med Data shall remain responsible for the payment of all accrued but
unpaid salaries and wages and other compensation payable through the Closing
Date for any severance benefits payable as a result of the transactions
contemplated by this Agreement, except severance benefits (if any) with respect
to the termination of Alan Belkin's employment, which shall be assumed by
QuadraMed. QuadraMed shall assume no liability with respect to any Employee
Benefit Plan of Eclipsys or Med Data, any workmen's compensation liability
relating to or arising in connection with any and all claims for workmen's
compensation benefits arising in connection with any occupational injury or
disease occurring or existing on or prior to the Closing Date or any other
liability to the Transferred Employees except as expressly provided for in this
Section 7.3.
7.4. Confidential Information. Eclipsys and Med Data acknowledge that
they have Knowledge of Confidential Information which is of substantial value
regarding Med Data's ongoing business, which is not generally known and which
will give QuadraMed an advantage over competitors who do not know it.
Accordingly, at all times after the Closing Date, neither Eclipsys nor any of
its Affiliates shall disseminate, publish or disclose all or any portion of the
Confidential Information and each further agrees to refrain in all instances
from directly or indirectly attempting to realize unauthorized economic or
commercial benefits from the Confidential Information or attempting to utilize
all or any portion of the Confidential Information to circumvent, frustrate or
hinder any business plan or opportunity of QuadraMed relating to the Purchased
Assets, including, without limitation, interfering with QuadraMed's relationship
with any customer or potential customer of Med Data's business. Eclipsys further
covenants and agrees that neither Eclipsys nor any Affiliate thereof will retain
any code or documentation with respect to Software included in the
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Purchased Assets. Eclipsys and each of its Affiliates will immediately notify
QuadraMed in writing of any disclosure, misuse or misappropriation of the
Confidential Information. Eclipsys and its Affiliates shall require each of
their respective agents and representatives to be bound by the terms of this
Section 7.4 and shall be responsible for the breach of this Section 7.4 by any
such agent or representative. Eclipsys acknowledges that money damages would not
be a sufficient remedy for breach of this Section 7.4 by Eclipsys or any of its
Affiliates, and that QuadraMed shall be entitled to specific performance and
injunctive relief as remedies for any such breach. Such remedies shall not be
deemed to be the exclusive remedies for a breach of this Section 7.4, but shall
be in addition to all other remedies available at law or in equity. Nothing in
this Section 7.4 shall be construed as preventing Eclipsys or its Affiliates
from directly competing with QuadraMed for customers or clients after the
Closing.
7.5. Non-Disparagement. Eclipsys and Med Data and their respective
Affiliates hereby agree to refrain from making disparaging or derogatory
statements regarding the business or operations of Med Data as continued through
QuadraMed's ownership of the Purchased Assets or any of the former directors,
officers, employee or agents of Med Data at any time after the Closing Date.
ARTICLE 8.
SURVIVAL; INDEMNIFICATION
8.1. Survival of Representations and Warranties. All representations,
warranties and covenants of the parties hereto contained in this Agreement will
survive the Closing and remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the parties to this
Agreement until March 29, 2000 (the "Survival Period") and, thereafter, to the
extent a claim is made prior to the expiration of the Survival Period with
respect to any breach of such representation, warranty or covenant, until such
claim is finally determined or settled, whereupon such representation,
warranties and covenants will expire; provided, however, that the
representations, warranties and covenants contained in Sections 3.5, 3.14, 3.24,
and 3.25 shall survive the expiration of the applicable statute of limitations.
8.2. Indemnification of Eclipsys and Med Data. Eclipsys and Med Data,
jointly and severally, will defend, indemnify and hold
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harmless QuadraMed and its officers, directors, agents, employees and Affiliates
(each, an "Indemnified Person" and collectively, the "Indemnified Persons"),
from and against any and all claims, demands, actions, causes of actions,
losses, costs, damages, liabilities and expenses including, without limitation,
legal fees and expenses (collectively, the "Damages"), arising out of or
relating to (i) any misrepresentation or breach of or default in connection with
any of the representations, warranties and covenants given or made by Eclipsys
or Med Data in this Agreement, in any exhibit or schedule hereto or any
certificate, document or instrument delivered by or on behalf of Eclipsys or Med
Data pursuant hereto, (ii) any and all of the Non-Assumed Liabilities as set
forth in Section 2.4 above and (iii) any and all actions, suits, claims or
legal, administrative, arbitration, governmental or other proceedings or
investigations against any Indemnified Person that relate to Med Data which
result from or arise out of the operation of the Business prior to the Closing
or in which the principal event giving rise thereto occurred prior to the
Closing or any action or inaction prior to the Closing of Eclipsys or Med Data
or any director, officer, employee, agent, representative or subcontractor of
Eclipsys or Med Data.
8.3. Indemnification of QuadraMed. QuadraMed will defend, indemnify and
hold harmless Eclipsys and Med Data and their respective Indemnified Persons
from and against any and all Damages arising out of or relating to (i) any
misrepresentation or breach of or default in connection with any of the
representations, warranties and covenants given or made by QuadraMed in this
Agreement, and any exhibit or schedule hereto or any certificate, document or
instrument delivered by or on behalf of QuadraMed pursuant hereto and (ii) any
and all actions, suits, claims or legal, administrative, arbitration,
governmental or other proceedings or investigations against any Indemnified
Person that relate to Med Data which result from or arise out of the operation
of the Business after the Closing or in which the principal event giving rise
thereto occurred after the Closing or any action or inaction after the Closing
of QuadraMed or any director, officer, employee, agent, representative or
subcontractor of QuadraMed.
8.4. Threshold. The parties shall have no liability with respect to the
matters described in Sections 8.2 and 8.3 above unless and until the aggregate
amount of Damages equal or exceed $250,000 (the "Threshold Amount"). At such
time as the aggregate Damages equal or exceed the Threshold Amount, the
indemnified
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party shall be indemnified, subject to the limitations in this Agreement, to the
full extent of all such Damages (including Damages counted in determining
whether the aggregate Damages equal or exceed the Threshold Amount); liability
for either party for indemnification pursuant to the terms of this Article 8
shall in no event exceed $3,000,000. The limitations of liability contained in
this section shall not apply to any intentional or fraudulent breach of any
representation, warranty, covenant or obligation under this Agreement or failure
by QuadraMed to pay the Closing Consideration.
8.5. Notice of Third Party Claims; Assumption of Defense. Each
indemnified party shall give reasonably prompt notice of a claim (a "Claims
Notice") to each indemnifying party, in accordance with the terms of Section
10.6 below, of the assertion of any claim, or the commencement of any suit,
action or proceeding by any third party in respect of which indemnity may be
sought hereunder, and shall give the indemnifying party such information with
respect thereto as the indemnifying party may reasonably request. The giving of
such Claims Notice shall not be condition precedent to indemnification
hereunder; provided, however, that failure to give reasonably prompt notice
shall reduce the indemnified party's recovery from the indemnifying party only
by an amount equal to the damages, costs and expenses (including attorney's
fees), if any, caused by such delay. Upon receipt of such notice, each
indemnifying party may, at its own expense, participate in and, solely upon
giving notice to each indemnified party of such indemnifying party's written
agreement that the indemnified party is entitled to indemnification pursuant to
this Article 8 for Losses arising out of such third party claim, suit, action or
proceeding, at any time during the course of any such claim, suit, action or
proceeding, assume the defense thereof; provided, however, that (i) the
indemnifying party's counsel is reasonably satisfactory to the indemnified
party, (ii) the indemnifying party shall thereafter consult with the indemnified
party upon the indemnified party's reasonable request for such consultation from
time to time with respect to such claim, suit, action or proceeding and (iii)
the indemnified party shall not be required to permit the indemnifying party to
assume the defense of any third party claim which if not first paid, discharged
or otherwise complied with would result in an imminent, material interruption or
cessation of the conduct of the business of the indemnified party or any
material part thereof. If the indemnifying party assumes such defense, the
indemnified party shall have the right (but not the duty) to participate in the
defense thereof and to employ counsel, at its
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own expense, separate from the counsel employed by the indemnifying party.
Whether or not the indemnifying party chooses to defend or prosecute any such
claim, suit, action or proceeding, all of the parties hereto shall cooperate in
the defense or prosecution thereof.
8.6. Settlement or Compromise. Any settlement or compromise made or
caused to be made by the indemnified party or, the indemnifying party, as the
case may be, of any third party claim, suit, action or proceeding of the kind
referred to in Section 8.5 above shall also be binding upon the indemnifying
party or the indemnified party, as the case may be, in the same manner as if a
final judgment or decree had been entered by a court of competent jurisdiction
in the amount of such settlement or compromise. The indemnified party will give
the indemnifying party at least thirty (30) days notice of any proposed
settlement or compromise of any claim, suit, action or proceeding it is
defending, during which time an indemnifying party may assume the defense of
such claim, suit, action or proceeding and if it does so the proposed settlement
or compromise may not be made.
8.7. Failure of Indemnifying Party to Act. In the event that an
indemnifying party does not elect to assume the defense of any claim, suit,
action or proceeding, then any failure of the indemnified party to defend or to
participate in the defense of any such claim, suit, action or proceeding or to
cause the same to be done, shall not relieve the indemnifying party of its
obligations hereunder.
8.8. Procedure for Indemnification. Upon becoming aware of a claim for
indemnification hereunder (whether as a result of any third party claim, suit,
action or proceeding of the kind referred to in Section 8.5 above, or in
connection with any other Losses which the indemnified party deems to be within
the ambit of this Article 8), the indemnified party shall give, in accordance
with the terms of Section 10.6 below, a Claims Notice to the indemnifying party.
If the indemnifying party does not object to such claim within thirty (30) days
of receiving such Claims Notice, the indemnified party shall be conclusively
entitled to recover the amount of such claim. If the indemnifying party gives
written notice objecting to such claim within a thirty (30) day period, then any
dispute shall be settled by arbitration in accordance with Section 8.10 below.
8.9. Resolutions of Indemnification Disputes. Any controversy arising
out of the indemnification provisions of this
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Article 8 or breach thereof shall be settled by arbitration in Chicago,
Illinois, in accordance with the rules of the American Arbitration Association,
and judgment entered upon the award rendered by arbitrator may be enforced by
appropriate judicial action. The arbitration panel shall consist of one (1)
member, which shall be a person agreed to by each party to the dispute within
thirty (30) days following notice by one party that desires the matter to be
arbitrated. If the parties are unable within such thirty (30) day period to
agree upon an arbitrator, than the panel shall be one (1) arbitrator selected by
the American Arbitration Association, which arbitrator shall be experienced in
commercial law and acquisition transactions and knowledgeable with respect to
the subject matter of the dispute. The losing party shall bear any fees and
expenses of the arbitrator, other tribunal fees and expense and reasonable
attorney's fees of both parties, and the cost of such witness and other
reasonable costs or expenses incurred by him or the prevailing party. The
arbitrator shall render a decision within thirty (30) days following the close
of presentation by the parties to their cases and any rebuttal. The parties
shall agree within thirty (30) days following the selection of the arbitrator to
any pre-hearing procedures or further procedures necessary for the arbitration
to proceed, including, interrogatories or other discovery, provided, in any
event, each party shall be entitled to discovery in accordance with applicable
rules.
8.10. Exclusivity. The parties hereby acknowledge and agree that the
indemnity obligations set forth above shall be the exclusive remedy of any party
with respect to the transactions contemplated hereby, except for claims or
causes of action arising out of fraud or willful misconduct.
ARTICLE 9.
TERMINATION
9.1. Termination of Agreement. Certain of the parties may terminate
this Agreement as provided below:
(a) QuadraMed, Eclipsys and Med Data may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(b) QuadraMed may terminate this Agreement by giving written
notice to Eclipsys and Med Data at any time prior to the Closing (i) solely in
the event Eclipsys or Med Data has breached a material representation, warranty
or covenant contained in this
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Agreement in any material respect or (ii) if the Closing shall not have occurred
on or before July 3, 1999 by reason of the failure of any condition precedent
under Article 6 above (unless the failure results primarily from QuadraMed
itself breaching any material representation, warranty or covenant contained in
this Agreement); and
(c) Eclipsys and Med Data may terminate this Agreement by
giving written notice to QuadraMed at any time prior to the Closing (i) in the
event QuadraMed has breached any material representation, warranty or covenant
contained in this Agreement in any material respect or (ii) if the Closing shall
not have occurred on or before July 3, 1999 by reason of the failure of any
condition precedent under Article 6 above (unless the failure results primarily
from Med Data breaching any material representation, warranty or covenant
contained in this Agreement).
9.2. Effect of Termination. If any party terminates this Agreement
pursuant to Section 9.1 above, all rights and obligations of the parties
hereunder shall terminate without any Liability of either party to the other
party (except for any Liability of either party as a result of such breach).
9.3. Waiver of Conditions. If any of the conditions specified in
Section 6.1 above has not been satisfied, the parties may nevertheless mutually
agree to proceed with the transactions contemplated hereby. If any of the
conditions specified in Section 6.2 above has not been satisfied, QuadraMed may
nevertheless elect to proceed with the transactions contemplated hereby. If any
of the conditions specified in Section 6.3 above has not been satisfied, Med
Data may nevertheless elect to proceed with the transactions contemplated
hereby.
ARTICLE 10.
GENERAL PROVISIONS
10.1. No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the parties and their respective
successors and permitted assigns.
10.2. Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the parties and
supersedes any prior understandings,
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agreements or representations by or between the parties, written or oral, to the
extent they related in any way to the subject matter hereof.
10.3. Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties named herein and their respective
successors and permitted assigns. No party may assign either this Agreement or
any of its rights, interests or obligations hereunder without the prior written
approval of the other parties; provided, however, that QuadraMed may assign its
rights, interests and obligations hereunder to a wholly-owned subsidiary of
QuadraMed without prior written consent of either Eclipsys or Med Data.
10.4. Counterparts; Facsimile. This Agreement may be executed in one or
more counterparts, all of which when fully-executed and delivered by the 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.
10.5. Section Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
10.6. Notices. All notices, requests, demands, claims and other
communications hereunder will be in writing, and shall be deemed duly given if
(and then two (2) business days after) sent by registered or certified mail,
return receipt requested, postage prepaid and addressed to the intended
recipient as set forth below:
If to QuadraMed: QuadraMed Corporation
Attention: Keith M. Roberts, Esq.
1003 West Cutting Boulevard, 2nd Floor
Richmond, California 94804
Facsimile: (510) 620-2364
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with a required copy to: Zevnik Horton Guibord McGovern
Palmer & Fognani, L.L.P.
Attention: Steven G. Rowles, Esq.
101 West Broadway Street, 17th Floor
San Diego, California 92101
Facsimile: (619) 515-9629
If to Eclipsys or Med Data: Eclipsys Corporation
Attention: Jack Risenhoover, Esq.
777 East Atlantic Avenue, Suite 200
Delray Beach, Florida 33483
Facsimile: (561) 243-3503
Any party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
facsimile, ordinary mail or electronic mail), but no such notice, request,
demand, claim or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended recipient. Any party
may change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
10.7. Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Delaware without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.
10.8. Attorney's Fees. The prevailing party in any litigation,
arbitration, mediation, bankruptcy, insolvency or other proceeding relating to
the enforcement or interpretation of this Agreement may recover from the
unsuccessful parties all reasonable costs, expenses and actual attorney's fees
(including expert witness and other consultants fees and costs) relating to or
arising out of such proceeding (whether or not it results in a judgment) and any
post-judgment or post-award proceeding including, without limitation, one to
enforce or collect any judgment or award resulting from the proceeding. All such
judgments and awards shall contain a specific provision for the recovery of all
such subsequently incurred costs, expenses and actual attorney's fees.
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10.9. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by each
of the parties hereto. No waiver by any party of any default, misrepresentation
or breach of any representation, warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of any representation, warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
10.10. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
10.11. Expenses. Each party shall bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
10.12. Sales, Transfer and Documentary Taxes, Etc. Eclipsys shall pay
all sales, use, transfer, conveyance, net worth, bulk transfer, business and
occupation, value added, gross taxes or other taxes, duties, excises, assessment
or governmental charges imposed by any taxing jurisdiction or governmental
entity or on any party hereto with respect to the sale, transfer or assignment
of the Purchased Assets or otherwise on account of this Agreement or the
transactions contemplated herein. Eclipsys shall be liable for all income and
franchise taxes imposed upon Med Data with respect to the sale, transfer or
assignment of the Purchased Assets or the consummation of the transactions
contemplated by this Agreement.
10.13. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated
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thereunder, unless the context requires otherwise. The word "including" shall
mean including, without limitation.
10.14. Incorporation of Exhibits and Schedules. The exhibits and
schedules identified in this Agreement and attached hereto are incorporated
herein by reference and made a part hereof.
10.15. Specific Performance. Each of the parties acknowledges and
agrees that the other parties would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the parties
agrees that the other parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the parties and the matter (subject to the provisions set
forth in Section 10.9 above), in addition to any other remedy to which it may be
entitled, at law or in equity.
10.16. Compliance with Bulk Sale Laws. QuadraMed hereby waives
compliance with the applicable provisions of the Uniform Commercial Code
relating to bulk transfers and the bulk sales laws or other similar laws in any
applicable jurisdiction in respect of the transactions contemplated by this
Agreement. Eclipsys shall indemnify QuadraMed from, and hold it harmless against
any liability, damages, costs and expenses resulting from or arising out of the
failure of the parties to comply with any of such laws in respect of the
transactions contemplated by this Agreement or any action brought or levy made
as a result thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first above written.
QUADRAMED QUADRAMED CORPORATION
By:
---------------------------------
Name:
------------------------------
Title:
------------------------------
ECLIPSYS ECLIPSYS CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
MED DATA MED DATA SYSTEMS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
44
EXHIBIT "A"
ASSIGNMENT AND ASSUMPTION
---------------------------
45
FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT
This First Amendment to Asset Purchase Agreement (the "Amendment") is
entered into as of July 8, 1999 by and among QuadraMed Corporation, a Delaware
corporation ("QuadraMed"), on one hand, and Eclipsys Corporation, a Delaware
corporation ("Eclipsys"), and its wholly-owned subsidiary, Med Data Systems,
Inc., a California corporation ("Med Data"), with respect to the following
facts:
WHEREAS, the parties entered into that certain Asset Purchase Agreement
dated July 1, 1999 (the "Original Agreement").
WHEREAS, the Closing (as defined in the Original Agreement) of the
transactions contemplated by the Original Agreement occurred on July 2, 1999.
WHEREAS, the parties hereby wish to cooperate to insure the orderly and
effective transition of employee benefits from Eclipsys and Med Data to
QuadraMed on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by the parties hereto, it is agreed as
follows:
1. Former employees of Med Data have been employed by QuadraMed
effective as of July 1, 1999 (the "Med Data Employees"). Notwithstanding the
foregoing, QuadraMed requires certain assistance from Eclipsys and Med Data to
effect the orderly transition of employee benefits for the Med Data Employees.
Accordingly, Eclipsys and Med Data hereby agree to continue administering and
executing the payroll function with respect to the Med Data Employees through
and including July 31, 1999. The parties agree that Eclipsys and Med Data shall
make normal and customary withholdings and deductions from the July payroll for
the Med Data Employees consistent with past practice prior to the acquisition of
the assets of Med Data by QuadraMed. As compensation for providing payroll
during the month of July, Eclipsys and Med Data shall invoice QuadraMed for
their direct out-of-pocket costs incurred in connection therewith, which will be
paid by QuadraMed to Eclipsys within ten (10) business days of receipt of such
invoice. Eclipsys and Med Data further agree to continue participation of the
Med Data Employees in the Eclipsys and/or Med Data 401(k) Plan in accordance
with the terms thereof through and including July 31, 1999. Accordingly, the Med
Data Employees shall have the option to contribute to such 401(k) Plan in
accordance with past practice. The parties further agree to cooperate in all
reasonable respects in effectuating a partial plan termination with respect to
the Med Data Employees effective as of August 1, 1999. The parties further agree
to cooperate in all reasonable respects to effect the transition of group health
coverage, dental coverage, disability coverage, life and accidental death
coverage, workmen's compensation coverage and all other employee benefits
available to the Med Data Employees from QuadraMed to be retroactively effective
on July 1, 1999. Each party agrees to take all actions and execute all documents
reasonably necessary to effectuate such transition.
46
2. This Amendment may be executed in one or more counterparts, all of
which when fully executed and delivered by the parties hereto and taken together
shall constitute a single agreement, binding against each of the parties. This
document may be signed and transmitted by facsimile with the same validity as if
it were an ink-signed document.
3. Except as expressly amended hereby, the terms and conditions of the
Original Agreement shall continue in full force and effect.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
47
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first above written.
QUADRAMED QUADRAMED CORPORATION
By:
---------------------------------
Name:
------------------------------
Title:
------------------------------
ECLIPSYS ECLIPSYS CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
MED DATA MED DATA SYSTEMS, INC.
By:
---------------------------------
Name:
------------------------------
Title:
------------------------------
[SIGNATURE PAGE TO FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT]
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