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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q/A
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Amendment No. 1 to
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER: 0-21031
QUADRAMED CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 52-1992861
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
80 E. SIR FRANCIS DRAKE BLVD., SUITE 2A, 94939
LARKSPUR, CA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (415) 461-7725
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
As of August 1, 1997, there were 6,212,703 shares of the Registrant's Common
Stock outstanding, par value $0.01.
This quarterly report on Form 10-Q consists of 21 pages of which this is
page 1. The Exhibit Index is located at page 22.
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FORM 10-Q/A
AMENDMENT NO. 1
The undersigned Registrant hereby:
1. amends Part II, Item 2 of its Quarterly Report on Form
10-Q for the quarter ended June 30, 1997 (the "Form 10-Q") and files such
amended Part II, Item 2 herewith;
2. amends Part II, Item 4 of the Form 10-Q and files such
amended Part II, Item 4 herewith;
3. amends Part II, Item 6 of the Form 10-Q and files such
amended Part II, Item 6 herewith; and
4. amends the Exhibit Index and files Exhibits 4.12 and
21.1 herewith.
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PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES.
Between April 1, 1997 and June 30, 1997, the Registrant issued the
following securities which were not registered under the Securities Act of 1933
(the "Securities Act"):
a. the Registrant granted stock options to its employees and non-
employee directors under its 1996 Stock Incentive Plan, covering an aggregate
of 56,300 shares of the Registrant's Common Stock, at exercise prices ranging
from $7.50 to $7.75 per share.
b. In April 1997, in connection with the acquisition and merger of
Healthcare Recovery Incorporated, doing business as Synergy HMC, the Company
issued and sold an aggregate of 181,855 shares of Common Stock to three
individuals.
The sales and issuances of securities in the transactions described
above were deemed to be exempt from registration under the Securities Act in
reliance upon Section 4(2) of the Securities Act, or Regulation D promulgated
thereunder, or Rule 701 promulgated under Section 3(b) of the Securities Act,
as transactions by an issuer not involving any public offering or transactions
pursuant to compensatory benefit plans and contracts relating to
compensation as provided under Rule 701.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.
The Company's 1997 Annual Meeting of Stockholders (the "Annual
Meeting") was held on May 21, 1997. The following matter was voted on by the
stockholders:
Election of three Class I Directors. John H. Austin, M.D., Albert L.
Greene and Kenneth E. Jones were elected to the Company's Board of Directors as
Class I Directors to serve for terms extending until the Annual Meeting of
Stockholders to be held in the year 2000 and until their successors are elected
and qualified, or until their earlier resignation or removal. The result of the
voting was as follows: 4,362,337 votes in favor of each of Dr. Austin, Mr.
Greene and Mr. Jones, and 550 votes withheld with respect to each of Dr.
Austin, Mr. Greene and Mr. Jones. The terms of office of the Company's other
directors, James D. Durham, Thomas F. McNulty, John P. Neuscheler and Cornelius
T. Ryan, continued after the Annual Meeting.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits
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2.1 Form of Agreement and Plan of Merger by and between
QuadraMed Corporation, a Delaware corporation and QuadraMed
Corporation, a California corporation.(1)
2.2 Assets Purchase Agreement dated December 31, 1995, by
and among QuadraMed Acquisition Corporation, Kaden Arnone,
Inc. and its stockholders.(1)
2.3 Exchange Agreement dated June 25, 1996, by and among
QuadraMed Holdings, Inc., QuadraMed Corporation, and certain
stockholders listed on Schedule A thereto.(1)
2.4 Acquisition Agreement and Plan of Merger dated December 2,
1996, between the Company and InterMed Acquisition
Corporation, a wholly owned subsidiary of the Company, and
InterMed Healthcare Systems Inc. and its Stockholders.(2)
2.5 Acquisition Agreement and Plan of Merger, dated as of
March 1, 1997, by and among QuadraMed Corporation,
Healthcare Recovery Acquisition Corporation, Healthcare
Recovery Incorporated and its Shareholders (the "HRI
Acquisition Agreement and Plan of Merger"). (3)
2.6 First Amendment to HRI Acquisition Agreement and Plan of
Merger, dated as of April 22, 1997. (3)
2.7 Second Amendment to HRI Acquisition Agreement and Plan of
Merger, dated as of April 24, 1997. (3)
3.1 Reserved.
3.2 Second Amended and Restated Certificate of Incorporation
of the Company.(1)
3.3 Reserved.
3.4 Amended and Restated Bylaws of the Company.(1)
4.1 Reference is made to Exhibits 3.2 and 3.4.(1)
4.2 Form of Common Stock certificate.(1)
4.3 Form of Exchange Agreement dated March 16, 1994, by and
among the Company, THCS Holding, Inc. and certain
stockholders listed on Schedule A thereto.(1)
4.4 Reserved.
4.5 Reserved.
4.6 Reserved.
4.7 Amended and Restated Agreement Regarding Adjustment Shares
dated June 25, 1996, by and among the Company, QuadNet
Corporation and the individuals listed on Schedule A
thereto.(1)
4.8 Amended and Restated Shareholder Rights Agreement dated June
25, 1996, by and between the Company and the investors
listed on Schedule A thereto.(1)
4.9 Stock Purchase Warrant dated September 27, 1995 issued to
James D. Durham and amendment #1 thereto dated July 10,
1997.(6)
4.10 Reserved.
4.11 Form of Warrant to Purchase Common Stock.(1)
4.12 Registration Rights Agrement dated as of December 5, 1996, by
and among QuadraMed Corporation and the investors listed on Schedule
"A" thereto.
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10.1 1996 Stock Incentive Plan of the Company.(1)
10.2 1996 Employee Stock Purchase Plan of the Company.(1)
10.3 Summary Plan Description, QuadraMed Corporation 401(k)
Plan.(1)
10.4 Form of Indemnification Agreement between the Company and
its directors and executive officers.(1)
10.5 Reserved.
10.6 Lease dated February 26, 1996 for facilities located at 1345
Campus Parkway, Building M, Block #930, Lot #51.02, Neptune,
New Jersey.(1)
10.7 Lease dated May 23, 1994 for facilities located at 80 East
Sir Francis Drake Boulevard, Suite 2A, Larkspur,
California.(1)
10.8 Lease Agreement dated December 14, 1989 for facilities
located at 1130 East Shaw Avenue, Suites 108 and 209,
Fresno, California.(1)
10.9 Employment Agreement dated March 1, 1994 by and between
James D. Durham and the Company.(1)
10.10 Stock Purchase Agreement dated March 3, 1994, by and between
the Company and James D. Durham.(1)
10.11 Letter dated April 17, 1995 from James D. Durham, as
President and Chief Executive of QuadraMed Corporation, to
John V. Cracchiolo regarding terms of employment.(1)
10.12 Letter dated March 14, 1996 from James D. Durham, as
President and Chief Executive Officer of QuadraMed
Corporation, to Robert Burrows regarding terms of
employment.(1)
10.13 Letter from Walter Channing to Thomas McNulty effective
December 1995, regarding service as Chairman of the Board of
Directors.(1)
10.14 Agreement dated May 11, 1994, by and between Colson
Investments and the Company.(1)
10.15 Credit Terms and Conditions dated July 2, 1997, by and
between Imperial Bank and the Company, with addendum
thereto.(6)
10.16 Reserved.
10.16.1 Reserved.
10.17 Reserved.
10.18 ERA/Secondary Billing and Claimstar Licenses Agreement dated
April 10, 1995, by and between the Company and Blue Cross of
California, as amended by the Second Amendment dated April
19, 1995.(1)
10.19 Cooperative Agreement dated June 30, 1995, by and between
The Compucare Company and the Company, with Amendment
thereto.(1)
10.20 Agreement dated April 1, 1995, by and between the Company
and National Electronic Information Corporation (now Envoy
Corporation).(1)
10.21 QuadraMed Corporation Cooperative Marketing Agreement dated
August 15, 1995, by and between the Company and Health
Systems Design Corporation.(1)
10.22 Agreement to Market QuadraMed Software dated June 1, 1996
between the Company and Health Communication Services,
Inc.(1)
10.23 Joint Marketing and Services Agreement dated November 1,
1995, by and between QuadraMed Acquisition Corporation, the
Company and Kaden Arnone, Inc.(1)
10.24 License Agreement dated November 1, 1994, by and between the
Company and Learned-Mahn, Inc.(1)
10.25 Master Agreement dated June 1, 1995, by and between Premier
Health Alliance, Inc. and the Company.(1)
10.26 Agreement dated October 3, 1995, by and between Shared
Services Healthcare, Inc. and the Company.(1)
10.27 Letter Agreement dated March 3, 1994 by and between NJUP
Plus and the Company.(1)
10.28 Endorsement Agreement dated November 1, 1994, by and between
ServiShare of Iowa and the Company, relating to ContraQ.(1)
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10.29 Endorsement Agreement dated November 1, 1994, by and between
ServiShare of Iowa and the Company, relating to
ClaimStar.(1)
10.30 Memorandum of Understanding dated October 24, 1995, by and
between the Company and St. Anthony Publishing, Inc. (now
NexUS Capital Healthcare Information Corp.).(1)
10.31 Software Development Agreement dated August 3, 1995, by and
between St. Joseph's Hospital of Atlanta, Inc. and the
Company.(1)
10.32 Letter Agreement dated December 27, 1995, by and between the
Company and UniHealth, with related Joint Development
Proposal for a Capitation Management System dated October
20, 1995.(1)
10.33 Employment Agreement with Kevin H. Arner, President of EDI
Services Division.(4)
10.34 Letter dated March 6, 1997 from James D. Durham, as
President and Chief Executive Officer of QuadraMed
Corporation, to Keith M. Roberts regarding terms of
employment.(5)
10.35 Employment Agreement dated December 19, 1996 by and between
Frederick Stodolak and the Company.(5)
10.36 Letter dated January 1, 1997 from the Company to James
Durham regarding terms of employment.(5)
10.37 Letter dated April 22, 1997 from the Company to Eugene M.
Arnone regarding terms of employment.(3)
10.38 Non-Competition and Non-Circumvention Agreement, dated
March 1, 1997, by and among the Company, Healthcare Recovery
Acquisition Corporation and Eugene M. Arnone.(3)
21.1 Subsidiaries of the Company.
27.1 Financial Data Schedule.(6)
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(1) Incorporated by reference from the exhibit with the same number to the
Company's Registration Statement on Form SB-2, No. 333-5180-LA, as filed
with the Commission on June 28, 1996, as amended by Amendment No. 1,
Amendment No. 2 and Amendment No. 3 thereto, as filed with the Commission
on July 26, 1996, September 9, 1996, and October 2, 1996, respectively.
(2) Incorporated by reference from the exhibit with the same number to the
Company's Current Report on Form 8-K, as filed with the Commission on
January 9, 1997.
(3) Incorporated by reference from the exhibit with the same number to the
Company's Current Report on Form 8-K, as filed with the Commission on May
9, 1997, as amended on July 8, 1997.
(4) Incorporated by reference from Exhibit 10.32 to the Company's Current
Report on Form 8-K, as filed with the Commission on January 9, 1997.
(5) Incorporated by reference from the exhibit with the same number to the
Company's Annual Report on Form 10-KSB for the year ended December 31,
1996, as filed with the Commission on March 28, 1997, as amended by
Amendment No. 1 thereto, as filed with the Commission on April 18, 1997.
(6) Incorporated by reference from the exhibit with the same number to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1997, as filed with the Commission on August 14, 1997.
b. Reports on Form 8-K.
The Company filed a report on Form 8-K on May 9, 1997 in which it
reported the acquisition and merger of Healthcare Recovery, Inc., a New Jersey
corporation and successor in interest to the Synergy Companies doing business
as "Synergy". The Company filed an amended report on Form 8-K/A on July 8, 1997
for this same acquisition.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
QUADRAMED CORPORATION
(Company)
Date: September 4, 1997 By: /s/ JOHN V. CRACCHIOLO
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John V. Cracchiolo
Executive Vice President and
Chief Financial Officer (Principal Financial
and Accounting Officer)
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EXHIBIT INDEX
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EXHIBIT
NO.
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4.9* Stock Purchase Warrant dated September 27,
1995 issued to James D. Durham and amendment
#1 thereto dated July 10, 1997.
4.12 Registration Rights Agreement dated as of
December 5, 1996, by and among QuadraMed
Corporation and investors listed on
Schedule "A" thereto.
10.15* Credit Terms and Conditions dated July 2,
1997, by and between Imperial Bank and the
Company, with addendum thereto.
21.1 Subsidiaries of the Company.
27.1* Financial Data Schedule
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* Previously filed with the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997, on August 14, 1997.
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EXHIBIT 4.12
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is entered into as
of December 5, 1996, by and among QuadraMed Corporation, a Delaware corporation
(the "Company"), and certain holders of the Common Stock of the Company listed
on Schedule "A" attached hereto and incorporated herein by this reference
(each, a "Stockholder" and collectively, the "Stockholders").
WHEREAS, pursuant to that certain Acquisition Agreement and Plan of
Merger by and between the Company and InterMed Acquisition Corporation, a
Delaware corporation ("Acquisition Co."), on the one hand, and InterMed
Healthcare Systems Inc., a Delaware corporation ("InterMed"), and the
Stockholders, on the other hand, dated as of December 2, 1996 (the "Merger
Agreement"), (i) InterMed shall be merged with and into Acquisition Co. (the
"Merger") and (ii) by virtue of the Merger, the Stockholders, who are all of
the stockholders of InterMed, shall be entitled to receive shares of the
Company's Common Stock and/or options to purchase shares of the Company's
Common Stock (collectively, the "Shares") as consideration for the Merger and
in exchange for cancellation of each share of issued and outstanding InterMed
Common Stock and each option to purchase InterMed Common Stock held by the
Stockholders as of the date hereof.
WHEREAS, pursuant to the Merger Agreement, the Stockholders have each
made customary representations and warranties in order for the issuance of the
Shares by the Company to be exempt from the registration requirements of the
Securities Act pursuant to the private placement exemption provided by
Regulation D promulgated under the Securities Act and applicable state
securities laws.
WHEREAS, the Company desires to grant to the Stockholders "piggyback"
registration rights for the Shares, and the Company and the Stockholders
desire that this Agreement shall govern the rights of the Stockholders to cause
the Company to register the Shares, as well as certain other matters as set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by each signatory hereto, it is agreed as
follows:
1. Definitions.
(a) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(b) "Registrable Securities" means (i) the Shares issued to the
Stockholders pursuant to the Merger Agreement and (ii) any Common Stock issued
or issuable with respect to the securities referred to in clause (i) by way of
a stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular Registrable Securities, such securities will cease to be
Registrable Securities when they have been distributed to the public pursuant
to an offering
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registered under the Securities Act or sold to the public through a broker,
dealer or market maker in compliance with any exemption under the Securities
Act, including, without limitation, Rule 144 promulgated by the SEC under the
Securities Act (or any similar rule then in force). For purposes of this
Agreement, a person will be deemed to be a holder of Registrable Securities
whenever such person has the right to acquire directly or indirectly such
Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected.
(c) "Securities Act" means the Securities Act of 1933, as
amended.
(d) "SEC" means the Securities and Exchange Commission.
2. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to
register (but without the obligation to do so or to consummate any such
registration once filed) any of its securities under the Securities Act and the
registration form to be used may be used for the registration of Registrable
Securities (a "Piggyback Registration"), the Company will give prompt written
notice to all holders of Registrable Securities of its intention to effect such
a registration and will include in such registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein within twenty (20) days after the receipt of the Company's notice. The
Registration Expenses of the holders of Registrable Securities will be paid by
the Company in all Piggyback Registrations as set forth in Section 5 hereof.
(b) Underwritten Registrations. For any Piggyback
Registration executed by means of an underwriting, the Company shall include
such information in the written notice referred to in Section 2(a) above. The
underwriter will be selected by the Company. No holder of Registrable
Securities may participate in any registration hereunder which is underwritten
unless such holder (i) agrees to sell such holder's securities on the basis
provided in customary underwriting arrangements, and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
(c) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner in such offering
within a price range reasonably acceptable to the Company, the Company will
include in such registration (i) first, the securities the Company proposes to
sell, and (ii) second, the Registrable Securities requested to be included in
such registration and such other securities of the Company with the right to
participate in such registration, pro rata among the
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holders of such Registrable Securities and such other securities on the basis
of the number of shares owned by each such holder.
(d) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in an orderly manner
in such offering within a price range acceptable to the holders initially
requesting such registration, the Company will include in such registration (i)
first, the securities requested to be included therein by the holders requesting
such registration, and (ii) second, the Registrable Securities requested to be
included in such registration and any other securities requested to be included
in such registration, pro rata among the holders of all such securities on the
basis of the number of securities owned by each such holder.
3. Registration Procedures. Whenever the Company is required by
the provisions hereof to effect the registration of Registrable Securities
under the Securities Act, the Company will use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company will,
as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to ninety (90) days.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the holders of the Registrable Securities
such numbers of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate the disposition
of the Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities
or blue sky laws of such jurisdictions as shall be reasonably requested by the
holders of the Registrable Securities, provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions.
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(e) In the event of any underwritten public offering, enter
into and perform obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each holder of
the Registrable Securities participating in such underwriting shall also enter
into and perform its obligations under such an agreement provided that such
underwriting agreement shall not provide for indemnification or contribution
obligations on the part of the holders of the Registrable Securities greater
than the obligations set forth in Section 7.
(f) Notify each holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
4. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
respect to the Registrable Securities of any selling holder that such holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of such securities
as shall be required to effect the registration of such holder's Registrable
Securities.
5. Registration Expenses.
(a) Except as set forth in Section 5(b) below, all expenses
incident to the Company's performance of or compliance with the Agreement,
including, without limitation, all registration and filing fees, fees and
expenses of compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses and fees and disbursements of counsel for the
Company and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other persons retained by the Company
(collectively, the "Registration Expenses"), will be borne by the Company.
(b) Notwithstanding the foregoing, the holders of the
Registrable Securities shall be obligated to pay, pro rata among the holders of
the Registrable Securities on the basis of the number of securities owned by
each such holder, (i) the underwriting discounts and commissions relating to
the Registrable Securities included in any registration hereunder and (ii) all
fees and expenses for separate counsel (if any) retained by the holders of the
Registrable Securities in connection with such registration.
6. Delay of Registration. No holder of Registrable Securities
shall have any right to obtain or seek an injunction restraining or otherwise
delaying any such registration under this Agreement as a result of any
controversy that might arise with respect to the interpretation or
implementation of this Agreement.
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7. Indemnification. In the event any Registrable Securities are
included in a registration statement pursuant to this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each holder of Registrable Securities and the officers,
directors and partners of such holder, any underwriter (as defined in the
Securities Act) for such holder and each person, if any, who controls such
holder or underwriter within the meaning of the Securities Act or the 1934 Act,
against any losses, claims, damages or liabilities (joint or several) to which
they may become subject under the Securities Act, the 1934 Act or other federal
or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively, a "Violation"): (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto; (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading; or
(iii) any violation or alleged violation by the Company of the Securities Act,
the 1934 Act or any state securities law or any rule, or of any regulation
promulgated under the Securities Act, the 1934 Act or any state securities law;
and the Company will pay to each such holder, underwriter or controlling
person, as incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 7(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company, which consent shall not be unreasonably withheld,
nor shall the Company be liable in any such case for any loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling holder of
Registrable Securities will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement,
each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter, any other holder selling securities in such
registration statement and any controlling person of any such underwriter or
other holder, against any losses, claims, damages or liabilities to which any
of the foregoing persons may become subject under the Securities Act, the 1934
Act or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs solely in reasonable reliance upon and in conformity with
written information furnished by such holder of Registrable Securities expressly
for use in connection with such registration; and each such holder of
Registrable Securities will pay, as incurred, any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
Section 7(b), in connection with the investigating or defending any such loss,
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claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 7(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the holder of Registrable
Securities, which consent shall not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 7,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by
such counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 7, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 7.
(d) If the indemnification provided for in this Section 7 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the
other hand in connection with the statements, omissions or other actions or
violations that resulted in such loss, liability, claim, damage or expense, as
well as any other relevant equitable considerations. The relative fault of the
indemnifying party and the indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with an underwritten public offering are
in conflict with the foregoing provisions, the provisions of the underwriting
agreement shall control.
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<PAGE> 7
(f) The obligations of the Company and holders under this
Section 7 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Agreement, and otherwise.
8. Reports Under the 1934 Act. With a view to making available to
the holders of the Registrable Securities the benefits of Rule 144 promulgated
under the Securities Act and any other rule or regulation of the SEC that may
at any time permit such holders to sell the Registrable Securities to the
public without registration, the Company agrees to:
(a) Make and keep public information available, as those
terms are understood and defined in SEC Rule 144, at all times after the
Merger.
(b) File with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the 1934
Act.
(c) Furnish to any holder of the Registrable Securities, so
long as such holder owns any Registrable Securities, forthwith upon request (i)
a written statement by the Company that it has complied with the reporting
requirements of SEC Rule 144, the Securities Act and the 1934 Act, (ii) a copy
of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company with the SEC and (iii) such other
reports and documents of the Company and information in the possession of or
reasonably obtained by the Company as may be reasonably requested in availing
any holder of the Registrable Securities of any rule or regulation of the SEC
which permits the selling of any such securities without registration.
9. Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Agreement may be
assigned (but only with all related obligations) by a holder of Registrable
Securities to a transferee or assignee of such securities who, after such
assignment or transfer, holds at least five thousand (5,000) shares of
Registrable Securities (subject to appropriate adjustment for stock splits,
stock dividends, combinations and other recapitalizations), provided: (i) the
Company is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
(ii) such transferee or assignee agrees in writing to be bound by the terms and
conditions of this Agreement; (iii) such assignment complies with the
Securities Act; and (iv) such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act.
10. Termination of Registration Rights. The Company shall have no
further obligations pursuant to this Agreement three (3) years after the
closing date of the Merger.
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<PAGE> 8
11. Miscellaneous.
(a) Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto will bind and inure
to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express
assignment has been made, the provisions of this Agreement which are for the
benefit of purchasers or holders of Registrable Securities are also for the
benefit of, and enforceable by, any subsequent holder of Registrable Securities.
(b) Governing Law. The corporate law of Delaware shall govern
all issues concerning the relative rights of the Company and its stockholders.
All other questions concerning the construction, validity and interpretation of
this Agreement (and Schedule "A" hereto) shall be governed by the internal
law, and not the law of conflicts, of Delaware.
(c) Counterparts; Facsimile. This Agreement may be executed
simultaneously in one or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement. This Agreement may be effectively
executed via facsimile transmission, with a hard copy to follow via overnight
courier.
(d) Descriptive Headings; Interpretation. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a section of this Agreement. The use of the word "including" in
this Agreement shall be by way of example rather than by limitation.
(e) Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be delivered personally to the recipient, sent by
reputable express courier service (charges prepaid) or sent by certified or
registered mail, return receipt requested and postage prepaid and shall be
deemed to have been given when so delivered, sent or deposited in the United
States mail. Such notices, demands and other communications shall be sent to
the Company and each of the Stockholders at the addresses indicated in the
records of the Company for such Stockholder, or to such other address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party.
(f) Amendments and Waivers. Except as otherwise provided
herein, amendment or waiver to the provisions of this Agreement, or grants of
registration rights prior or superior to the rights of the holders of
Registrable Securities may be made only upon the prior written consent of the
Company and the holders of at least a majority of the Registrable Securities.
(g) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any
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<PAGE> 9
provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this
Agreement.
(h) Entire Agreement. This Agreement (including Schedule "A"
hereto) constitutes the full and entire understanding and agreement between the
parties with regard to the subjects contained herein.
[Remainder of Page Intentionally Left Blank]
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<PAGE> 10
IN WITNESS WHEREOF, the parties have duly executed this Registration
Rights Agreement as of the date first written above.
Company QUADRAMED CORPORATION
By: /s/ JAMES D. DURHAM
--------------------------------
Name: James D. Durham
------------------------------
Title: Chief Executive Officer
------------------------------
[Signature Page No. 1 to Registration Rights Agreement]
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<PAGE> 11
Stockholders
/s/ R. Kirby Godsey /s/ Dan Byrne
- --------------------------------- ----------------------------------
R. Kirby Godsey Dan Byrne
/s/ Emily P. Meyers /S/ G. LaMar Horton
- --------------------------------- ----------------------------------
Emily P. Meyers G. LaMar Horton
/s/ Kevin H. Arner
- --------------------------------- SIRROM INVESTMENTS, INC.
Kevin H. Arner
/s/ Obi Okehi, By: /s/ CARL W. STRABB
by /s/ R. Kirby Godsey, ----------------------------------
by power of attorney Name: Carl W. Strabb
- --------------------------------- ---------------------------
Obi Okehi Title: C.F.O.
---------------------------
/s/ Clinton N. Parker,
by /s/ R. Kirby Godsey,
by power of attorney
- ---------------------------------
Clinton N. Parker
/s/ Michael A. Mills and
Watson E. Mills,
by /s/ R. Kirby Godsey,
by power of attorney
- ---------------------------------
Michael A. Mills and Watson E. Mills,
as joint tenants with rights of
survivorship
/s/ Bobby Pope,
by /s/ R. Kirby Godsey,
by power of attorney
- ---------------------------------
Bobby Pope
/s/ Donald Midkiff,
by /s/ R. Kirby Godsey,
by power of attorney
- ---------------------------------
Donald Midkiff
[Signature Page No. 2 to Registration Rights Agreement]
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<PAGE> 12
SCHEDULE "A"
STOCKHOLDERS
R. Kirby Godsey
Emily P. Myers
Kevin H. Arner
Obi Okehi
Clinton N. Parker
Michael A. Mills and Watson E. Mills, as joint tenants with rights of
survivorship
Michael A. Mills and Joyce H. Mills, as joint tenants with rights of
survivorship
Bobby Pope
Donald Midkiff
Dan Byrne
G. LaMar Horton
Sirrom Investments, Inc.
A-1
<PAGE> 1
EXHIBIT 21.1
QUADRAMED CORPORATION
LIST OF SUBSIDIARIES
Name of Corporation State of Incorporation
- ------------------- ----------------------
QuadraMed Acquisition Corporation, California
dba QuadraMed Corporation
QuadNet Corporation, California
dba QuadraMed Corporation
THCS Holding, Inc. California
InterMed Acquisition Corporation Delaware
Healthcare Recovery Acquisition Corporation Delaware
Queen City Acquisition Corporation Delaware
HRM Acquisition Corporation Delaware
