QUADRAMED CORP, 8-K, 1998-01-13

QUADRAMED CORP
8-K, 1998-01-13
COMPUTER PROGRAMMING SERVICES

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) December 29, 1997

QUADRAMED CORPORATION
---------------------------------------------------------------------------
(Exact name of registrant as specified in charter)

DELAWARE 0-21031 52-1992861
- ------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)

80 E. SIR FRANCIS DRAKE BLVD., SUITE 2A, LARKSPUR, CA 94939
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (415) 461-7725

NONE
---------------------------------------------------------------------------
(Former name or former address, if changed since last report.)

<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS

On December 29, 1997, QuadraMed Corporation, a Delaware
corporation (the "Company"), acquired the business of Resource Health Partners,
L.P., a Delaware limited partnership ("RHP"), by means of (i) a merger of RH
Acquisition Co., a Delaware corporation and wholly owned subsidiary of the
Company, with and into Resource Holdings, Ltd., a Pennsylvania corporation and
wholly owned subsidiary of RHP (the "Sub A Merger"), and (ii) a merger of FA
Acquisition Co., a Delaware corporation and wholly owned subsidiary of the
Company, with and into FRA Acquisition Inc., a Delaware corporation and wholly
owned subsidiary of RHP (the "Sub B Merger," and together with the Sub A Merger,
"the Mergers"). The Mergers were completed pursuant to an Acquisition Agreement
and Plan of Merger, dated as of December 29, 1997 (the "Acquisition Agreement").
The transaction is intended to qualify as a tax-free reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986 and will be
accounted for as a pooling of interests.

Pursuant to the Acquisition Agreement, the Company issued
1,588,701 shares of its Common Stock (the "Shares"), the aggregate fair market
value of which was deemed to be approximately $37,000,000 (the
"Consideration"), in exchange for all of the outstanding capital stock of
Resource Holdings, Ltd. and FRA Acquisition Inc. One hundred fifty-five
thousand fourteen (155,014) of the Shares have been placed into escrow as
security for the indemnity obligations of RHP under the terms and conditions of
the Acquisition Agreement. The amount of consideration paid by the Company was
determined by arms length negotiations between the parties. Pursuant to a
Registration Rights Agreement, dated as of December 29, 1997, the Company has
agreed to register the Shares for resale under the Securities Act of 1933,
as amended.

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS

(a) Financial Statements of Business Acquired

1. The Financial Statements of Resource Holdings, Ltd.
and FRA Acquisition Inc. are not required to be filed
herewith pursuant to Article 3, Rule 3-05(b)(2)(i) of
Regulation S-X
<PAGE> 3
(b) Pro Forma Financial Information

1. The Pro Forma Financial Information of the Company
Resource Holdings, Ltd. and FRA Acquisition Inc. is
not required to be filed herewith pursuant to
Article 11 of Regulation S-X.

2.11 Acquisition Agreement and Plan of Merger dated as of
December 29, 1997, by and among QuadraMed Corporation
and Resource Health Partners, L.P.

4.13 Registration Rights Agreement, dated as of December
29, 1997, by and among Quadramed Corporation,
Resource Health Partners, L.P. and certain
stockholders attached as Exhibit B to the Acquisition
Agreement and Plan of Merger.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.

Dated: January 13, 1998 By: /s/ KEITH M. ROBERTS
----------------------------
Name: Keith M. Roberts
Title: Vice President and
General Counsel

<PAGE> 4
INDEX OF EXHIBITS

2.11 Acquisition Agreement and Plan of Merger, dated as of
December 29, 1997, by and among QuadraMed Corporation and
Resource Health Partners, L.P.

4.13 Registration Rights Agreement, dated as of December 29, 1997,
by and among Quadramed Corporation, Resource Health Partners,
L.P. and certain stockholders, attached as Exhibit B to the
Acquisition Agreement and Plan of Merger.

<PAGE> 1
EXECUTION COPY

ACQUISITION AGREEMENT AND PLAN OF MERGER

BY AND AMONG

QUADRAMED CORPORATION,

RH ACQUISITION CO.

AND

FA ACQUISITION CO.,

ON THE ONE HAND

AND

RESOURCE HEALTH PARTNERS, L.P.,

RESOURCE HOLDINGS, LTD.

AND

FRA ACQUISITION INC.,

ON THE OTHER HAND

DATED

DECEMBER 29, 1997

<PAGE> 2

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I. DEFINITIONS............................................................. 1

1.1. "AAA"................................................................... 1
1.2. "Advisory Committee".................................................... 1
1.3. "Affiliate"............................................................. 1
1.4. "Agreement"............................................................. 2
1.5. "Arbitrator"............................................................ 2
1.6. "Articles of Merger".................................................... 2
1.7. "Certificates of Merger"................................................ 2
1.8. "Closing"............................................................... 2
1.9. "Closing Consideration A"............................................... 2
1.10. "Closing Consideration B"............................................... 2
1.11. "Closing Considerations"................................................ 2
1.12. "Code".................................................................. 2
1.13. "Company"............................................................... 2
1.14. "Company Advisors"...................................................... 2
1.15. "Company Disclosure Schedule"........................................... 2
1.16. "Company Financial Statements".......................................... 2
1.17. "Confidentiality Agreement"............................................. 3
1.18. "Contract".............................................................. 3
1.19. "Daily Price"........................................................... 3
1.20. "DGCL".................................................................. 3
1.21. "Effective Time"........................................................ 3
1.22. "Employee Benefit Plan(s)".............................................. 3
1.23. "Encumbrances".......................................................... 3
1.24. "Environmental Law"..................................................... 3
1.25. "ERISA"................................................................. 3
1.26. "Exchange Act".......................................................... 3
1.27. "Escrow Agent".......................................................... 3
1.28. "Escrow Agreement"...................................................... 4
1.29. "Escrow Shares"......................................................... 4
1.30. "Fair Market Value"..................................................... 4
1.31. "FRA"................................................................... 4
1.32. "FRA Common Stock"...................................................... 4
1.33. "General Partner"....................................................... 4
1.34. "Government Communications"............................................. 4
1.35. "Hazardous Substance(s)"................................................ 4
1.36. "Indemnified Person".................................................... 4
1.37. "Indemnifying Person"................................................... 4
1.38. "Intellectual Property"................................................. 4
1.39. "IRS"................................................................... 4
</TABLE>

<PAGE> 3

<TABLE>
<S> <C> <C>
1.40. "Investment Representation Letter"...................................... 4
1.41. "Licenses".............................................................. 5
1.42. "Loss(es)".............................................................. 5
1.43. "Material Adverse Effect"............................................... 5
1.44. "Merger Subs"........................................................... 5
1.45. "Mergers"............................................................... 5
1.46. "Notice of Superior Proposal"........................................... 5
1.47. "Partner(s)"............................................................ 5
1.48. "Partnership Interests"................................................. 5
1.49. "Permitted Encumbrance"................................................. 5
1.50. "Person"................................................................ 5
1.51. "QuadraMed"............................................................. 5
1.52. "QuadraMed Balance Sheet"............................................... 5
1.53. "QuadraMed Balance Sheet Date".......................................... 5
1.54. "QuadraMed Common Stock"................................................ 5
1.55. "QuadraMed Disclosure Schedule"......................................... 5
1.56. "QuadraMed Indemnified Person(s)"....................................... 6
1.57. "QuadraMed SEC Filings"................................................. 6
1.58. "QuadraMed Shares"...................................................... 6
1.59. "QuadraMed Stock Value"................................................. 6
1.60. "QuadraMed Survival Period"............................................. 6
1.61. "Real Property"......................................................... 6
1.62. "Real Property Leases".................................................. 6
1.63. "Registration Rights Agreement" ........................................ 6
1.64. "Resource Holdings"..................................................... 6
1.65. "Resource Holdings Common Stock"........................................ 6
1.66. "RHP"................................................................... 6
1.67. "RHP General Partnership Interest"...................................... 6
1.68. "RHP Limited Partnership Agreement"..................................... 6
1.69. "RHP Limited Partnership Interests"..................................... 6
1.70. "RHP Survival Period"................................................... 6
1.71. "Rule 144".............................................................. 7
1.72. "SEC"................................................................... 7
1.73. "Securities Act"........................................................ 7
1.74. "Software".............................................................. 7
1.75. "Sub A"................................................................. 7
1.76. "Sub A Certificate of Merger"........................................... 7
1.77. "Sub A Common Stock".................................................... 7
1.78. "Sub B"................................................................. 7
1.79. "Sub B Certificate of Merger"........................................... 7
1.80. "Sub B Common Stock".................................................... 7
1.81. "Sub B Merger Agreement"................................................ 7
1.82. "Subsidiary" and "Subsidiaries"......................................... 7
1.83. "Superior Proposal" .................................................... 7
</TABLE>

<PAGE> 4

1.84. "Surviving Corporation A"............................................... 7
1.85. "Surviving Corporation B"............................................... 8
1.86. "Tax(es)"............................................................... 8
1.87. "Tax Return(s)"......................................................... 8
1.88. "Third Party"........................................................... 8
1.89. "Third Party Acquisition"............................................... 8
1.90. "Threshold Amount"...................................................... 8

ARTICLE II. THE MERGERS............................................................. 8

2.1. The Mergers............................................................. 8
2.2. Execution and Filing of Articles and Certificates of Merger............. 9
2.3. Effect of the Mergers................................................... 9
2.4. Articles or Certificate of Incorporation; Bylaws........................ 10
2.5. Directors............................................................... 10
2.6. Officers................................................................ 10
2.7. Effect on Capital Stock................................................. 10
2.8. Closing................................................................. 11
2.9. Delivery of Certificates................................................ 12
2.10. Escrow.................................................................. 12
2.11. Tax Consequences........................................................ 12
2.12. Pooling of Interests.................................................... 12
2.13. Private Placement....................................................... 12
2.14. Payment of Certain Fees and Expenses.................................... 12
2.15. Assignment of RHP Assets and Assumption of RHP Liabilities.............. 12

ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................... 13

3.1. Organization and Good Standing of RHP and Subsidiaries.................. 13
3.2. Limited Partnership Agreement, Charter and Bylaws....................... 13
3.3. Corporate Minutes....................................................... 13
3.4. Qualifications to Do Business........................................... 13
3.5. Capitalization of Subsidiaries.......................................... 13
3.6. Ownership of RHP Partnership Interests.................................. 14
3.7. RHP Assets and Liabilities; Subsidiaries and Other Affiliates........... 14
3.8. Equity Ownership of Subsidiaries........................................ 14
3.9. Authority............................................................... 14
3.10. Company Financial Statements............................................ 15
3.11. Undisclosed Liabilities................................................. 15
3.12. Absence of Certain Changes.............................................. 16
3.13. Assets.................................................................. 17
3.14. Real Property Matters................................................... 18
</TABLE>

iii

<PAGE> 5

<TABLE>
<S> <C> <C>
3.15. Intellectual Property................................................... 18
3.16. Proprietary Information of Third Parties................................ 19
3.17. Software................................................................ 19
3.18. Tax Matters............................................................. 20
3.19. Legal and Regulatory Matters............................................ 22
3.20. Employees............................................................... 22
3.21. Billings................................................................ 22
3.22. Insurance............................................................... 22
3.23. Personnel............................................................... 23
3.24. Employee Benefit Plan(s)................................................ 23
3.25. Compliance with Environmental Laws...................................... 23
3.26. Bank and Brokerage Accounts............................................. 24
3.27. Contracts............................................................... 24
3.28. Material Misstatements or Omissions..................................... 25
3.29. Broker's, Finders or Other Transaction Fees............................. 25
3.30. Customers and Suppliers................................................. 25
3.31. Investment Representations of RHP....................................... 25

ARTICLE IV. COVENANTS OF RHP........................................................ 26

4.1. Conduct of Company's Business........................................... 26
4.2. Access and Information.................................................. 28
4.3. Further Efforts......................................................... 29
4.4. Confidentiality......................................................... 29
4.5. Subsequent Events....................................................... 29
4.6. Public Announcement..................................................... 29
4.7. Exclusive Dealing....................................................... 29
4.8. Restrictions on Transferability of QuadraMed Shares, Compliance
with Securities Act..................................................... 30
4.9. Third Party Acquisitions................................................ 31
4.10. Pooling of Interests.................................................... 32

ARTICLE V. REPRESENTATIONS AND WARRANTIES OF QUADRAMED,
SUB A AND SUB B......................................................... 32

5.1. Organization and Good Standing.......................................... 33
5.2. Capitalization of QuadraMed, Sub A and Sub B............................ 33
5.3. Authority............................................................... 34
5.4. QuadraMed Shares........................................................ 35
5.5. QuadraMed SEC Filings................................................... 35
5.6. Absence of Certain Changes.............................................. 35
5.7. Absence of Undisclosed Liabilities...................................... 35
5.8. Restrictions on Business Activities..................................... 36
</TABLE>

<PAGE> 6

<TABLE>
<S> <C> <C>
5.9. Legal and Regulatory Matters............................................ 36
5.10. Broker's Fees........................................................... 36
5.11. Material Misstatements or Omissions..................................... 36
5.12. Eligibility to Use Form S-3............................................. 37

ARTICLE VI. COVENANTS OF QUADRAMED, SUB A AND SUB B................................. 37

6.1. Conduct of QuadraMed's Business......................................... 37
6.2. Further Efforts......................................................... 38
6.3. Confidentiality......................................................... 38
6.4. Public Announcement..................................................... 38
6.5. Benefits for Retained Employees......................................... 38
6.6. Subsequent Events....................................................... 39
6.7. Treatment of Mergers as Reorganization.................................. 39

ARTICLE VII. GENERAL CONDITIONS PRECEDENT............................................ 39

7.1. No Injunctions.......................................................... 39
7.2. No Governmental Proceedings............................................. 39
7.3. Governmental Approvals.................................................. 39
7.4. Escrow Agreement........................................................ 40
7.5. Simultaneous Mergers.................................................... 40

ARTICLE VIII. CONDITIONS PRECEDENT TO QUADRAMED'S, SUB A'S
AND SUB B'S OBLIGATIONS TO CLOSE..................................... 40

8.1. Certificates of RHP..................................................... 40
8.2. No Material Adverse Effect.............................................. 40
8.3. Legal Opinion of RHP's Counsel.......................................... 40
8.4. Certified Resolutions................................................... 40
8.5. Employment Agreements................................................... 41
8.6. Proceedings Satisfactory to Counsel..................................... 41

ARTICLE IX. CONDITIONS PRECEDENT TO RHP'S OBLIGATIONS TO CLOSE...................... 41

9.1. Certificates of QuadraMed, Sub A and Sub B.............................. 41
9.2. Certified Resolutions................................................... 41
9.3. Legal Opinion........................................................... 42
9.4. Registration Rights Agreement........................................... 42
9.5. Employment Agreements................................................... 42
</TABLE>

<PAGE> 7

<TABLE>
<S> <C> <C>
9.6. Closing Considerations and Expenses..................................... 42
9.7. Proceedings Satisfactory to Counsel..................................... 42

ARTICLE X. SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATIONS........................ 42

10.1. Survival of Representations, Etc........................................ 42
10.2. Indemnification by RHP.................................................. 43
10.3. Indemnification by QuadraMed, Sub A and Sub B........................... 44
10.4. Procedure for Indemnification of Claims................................. 44
10.5. Settlement or Compromise................................................ 45
10.6. Third Party Claims...................................................... 45
10.7. Certificate of Incorporation and Bylaws................................. 46
10.8. Exclusivity............................................................. 46

ARTICLE XI. TERMINATION............................................................. 46

11.1. Termination............................................................. 46
11.2. Effect of Termination................................................... 47
11.3. Certain Payments........................................................ 48
11.4. Waiver of Conditions.................................................... 48
11.5. Payment of Expenses..................................................... 48

ARTICLE XII. GENERAL................................................................. 48

12.2. Amendments.............................................................. 49
12.3. Assignment.............................................................. 49
12.4. Notices................................................................. 50
12.5. Further Assurances/Access............................................... 51
12.6. Entire Agreement........................................................ 51
12.7. Counterparts; Facsimile................................................. 51
12.8. Governing Law........................................................... 51
</TABLE>

<PAGE> 8

<TABLE>
<CAPTION>
EXHIBITS
<S> <C> <C>
Exhibit "A" Escrow Agreement
Exhibit "B" Registration Rights Agreement
Exhibit "C" Sub A Certificate of Merger
Exhibit "D" Sub B Certificate of Merger
Exhibit "E" Sub A Merger Agreement
Exhibit "F" Assignment and Assumption Agreement
Exhibit "G" Investment Representation Letter
Exhibit "H" Opinion of Proskauer Rose LLP
Exhibit "I" Opinion of Pennsylvania counsel
Exhibit "J" Employment Agreements
Exhibit "K" Opinion of Brobeck, Phleger & Harrison LLP
</TABLE>

<TABLE>
<CAPTION>
SCHEDULES

RHP Schedules
-------------
<S> <C>
Schedule 3.3 Corporate Minutes
Schedule 3.4 Qualifications to Do Business
Schedule 3.5 Capitalization of Subsidiaries
Schedule 3.6 Ownership of RHP Partnership Interests
Schedule 3.7 RHP Assets and Liabilities; Subsidiaries and Other Affiliates
Schedule 3.8 Equity Ownership of Subsidiaries
Schedule 3.9(a) Authority
Schedule 3.10 Company Financial Statements
Schedule 3.11 Undisclosed Liabilities
Schedule 3.12 Absence of Certain Changes
Schedule 3.13(a) Assets
Schedule 3.13(a)(i) Permitted Encumbrances
Schedule 3.14 Real Property
Schedule 3.15 Intellectual Property
Schedule 3.17 Software
Schedule 3.18(a) Tax Matters
Schedule 3.18(b) Threatened or Pending Tax Claims
Schedule 3.18(c) Tax Returns
Schedule 3.18(e) States for Tax Returns
Schedule 3.18(g) Waivers or Consents
Schedule 3.18(h) Tax Rulings or Agreements
Schedule 3.18(i) Consolidated Tax Returns
Schedule 3.18(k) Joint Venture/Partnership Agreements
Schedule 3.18(l) Accounting Method Adjustments
Schedule 3.19 Litigation
</TABLE>

vii

<PAGE> 9

Schedule 3.22 Insurance
Schedule 3.24 Employee Benefit Plan(s)
Schedule 3.25 Compliance with Environmental Laws
Schedule 3.26 Bank and Brokerage Accounts
Schedule 3.27(a) Contracts
Schedule 3.27(b) Validity of Contracts
Schedule 3.29 Broker's, Finder's or Other Transaction Fees
</TABLE>

<TABLE>
<CAPTION>
QuadraMed Schedules
-------------------
<S> <C>
Schedule 5.2 Capitalization
Schedule 5.6 Absence of Certain Changes
Schedule 5.7 Absence of Undisclosed Liabilities
</TABLE>

viii

<PAGE> 10

ACQUISITION AGREEMENT AND PLAN OF MERGER

This Acquisition Agreement and Plan of Merger is entered into as of
December 29, 1997, by and among QuadraMed Corporation, a Delaware corporation
("QuadraMed"), RH Acquisition Co. ("Sub A") and FA Acquisition Co. ("Sub B" and
together with Sub A, the "Merger Subs") on the one hand, and Resource Health
Partners, L.P., a Delaware limited partnership ("RHP"), Resource Holdings, Ltd.,
a Pennsylvania corporation ("Resource Holdings") and FRA Acquisition Inc., a
Delaware corporation ("FRA") on the other hand.

WHEREAS, the Boards of Directors of QuadraMed and Merger Subs, the
Advisory Committee of RHP (the "Advisory Committee"), the General Partner of RHP
and the Boards of Directors of Resource Holdings and FRA believe that it is in
their respective best interests for QuadraMed to acquire the business of RHP on
the terms set forth herein, and have each approved such acquisition by means of
(i) a merger of Sub A with and into Resource Holdings pursuant to the terms of
this Agreement (the "Sub A Merger") and (ii) a merger of Sub B with and into FRA
pursuant to the terms of this Agreement (the "Sub B Merger," together with the
Sub A Merger, the "Mergers"), with the Mergers to be accomplished on a
tax-deferred basis pursuant to Sections 368(a)(1)(A) and 368(a)(2)(E) of the
Code (as defined below) and on a pooling-of-interests basis.

WHEREAS, the parties hereto desire to make certain representations,
warranties and agreements in connection with the Mergers and also to prescribe
certain conditions to the Mergers.

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:

ARTICLE I.

DEFINITIONS

As used in this Agreement, the following terms shall have the following
meanings:

1.1. "AAA" shall have the meaning specified in Section 12.1(a).

1.2. "Advisory Committee" shall have the meaning specified in the
preamble hereto.

1.3. "Affiliate" shall mean any Person directly or indirectly controlled
by, controlling or under common control of any other Person.

<PAGE> 11

1.4. "Agreement" shall mean this Acquisition Agreement and Plan of
Merger, including the exhibits and schedules referred to herein.

1.5. "Arbitrator" shall have the meaning specified in Section 12.1(a).

1.6. "Articles of Merger" shall mean the Articles of Merger to be filed
in connection with Sub A Merger.

1.7. "Certificates of Merger" shall refer to the Articles of Merger, the
Sub A Certificate of Merger and the Sub B Certificate of Merger.

1.8. "Closing" shall mean the closing of the transactions contemplated
in this Agreement.

1.9. "Closing Consideration A" shall have the meaning specified in
Section 2.7(a)(i).

1.10. "Closing Consideration B" shall have the meaning specified in
Section 2.(b)(i).

1.11. "Closing Considerations" shall mean the sum of Closing
Consideration A and Closing Consideration B.

1.12. "Code" shall mean the Internal Revenue Code of 1986, as amended.

1.13. "Company" shall refer collectively to RHP and all of RHP's
Subsidiaries.

1.14. "Company Advisors" shall refer collectively to RHP's financial
advisor or any other investment banker and any attorney or accountant retained
by RHP.

1.15. "Company Disclosure Schedule" shall have the meaning specified in
Article III.

1.16. "Company Financial Statements" shall mean (i) the audited
consolidated balance sheet of FRA and its consolidated subsidiaries as of
December 31, 1996 and the related consolidated statements of operations,
shareholder's equity and cash flows for the year then ended, as reported upon by
Deloitte & Touche LLP, independent certified public accountants to FRA,
including notes thereto, and the unaudited consolidated balance sheet of FRA and
its consolidated subsidiaries as of October 31, 1997, and the related
consolidated statements of operations, shareholder's equity and cash flows for
the ten (10) month period then ended (without footnotes); and (ii) the unaudited
consolidated balance sheets of Resource Holdings and its consolidated
subsidiaries as of October 31, 1996 and the related consolidated statements of
operations, stockholder's equity and cash flows for the year then ended as
reviewed by Beucler, Kelly & Irwin Ltd., independent certified public
accountants to Resource Holdings, and the unaudited unconsolidated balance
sheets of each of Resource Holdings and Healthcare Research Affiliates, Inc. as
of October 31, 1997 and the related statements of operations for the year then
ended (without footnotes).

<PAGE> 12

1.17. "Confidentiality Agreement" shall mean that agreement by and among
QuadraMed and RHP, dated as of July 16, 1997.

1.18. "Contract" shall mean any existing written or oral contract,
lease, indenture, mortgage, note, bond, instrument, license or other agreement.

1.19. "Daily Price" of the QuadraMed Shares shall mean the last reported
sales price on such day reported by the National Association of Securities
Dealers, Inc. Automated Quotation System.

1.20. "DGCL" shall mean the Delaware General Corporation Law.

1.21. "Effective Time" shall mean the date and time the Certificates of
Merger are filed with the Delaware Secretary of State (in the case of Sub B
Merger) and the Pennsylvania Secretary of State (in the case of Sub A Merger).

1.22. "Employee Benefit Plan(s)" shall mean any "employee benefit plan"
as defined in Section 3(3) of ERISA and any other plan, policy, program,
practice or arrangement providing compensation or other benefits to any current
or former officer or employee of the Company or any beneficiary or dependent
thereof that is or was maintained by the Company within the past five (5) years.

1.23. "Encumbrances" shall mean any mortgage, chattel mortgage,
conditional sales contract, pledge, lien, security interest, encumbrance,
easement or similar interest.

1.24. "Environmental Law" shall mean all applicable federal, state and
local laws, statutes, common law duties, rules, regulations, ordinances and
codes, together with all administrative orders, directives, licenses,
authorizations, permits and agreements with RHP issued or signed by any federal,
state or local government authority that are currently in effect and relate to
the environment, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Clean Water Act of 1977,
the Clean Air Act, the Resource Conservation and Recovery Act of 1976, the
Federal Insecticide, Fungicide and Rodenticide Act, the Toxic Substances Control
Act, the Emergency Planning and Community Right-to-Know Act of 1986 and the Safe
Drinking Water Act, all as amended, and any state and local counterparts to such
acts as exist at the time of Closing.

1.25. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.

1.26. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

1.27. "Escrow Agent" shall mean State Street Bank & Trust Company.

<PAGE> 13

1.28. "Escrow Agreement" shall mean the Escrow Agreement, in
substantially in the form attached hereto as Exhibit A and incorporated herein
by this reference (the "Escrow Agreement").

1.29. "Escrow Shares" shall have the meaning specified in Section 2.9.

1.30. "Fair Market Value" with respect to each of the QuadraMed Shares
shall mean the average of the Daily Price per share of the QuadraMed Shares
(adjusted for any stock splits or other reclassifications during the applicable
time period) for the twenty (20) consecutive trading days immediately preceding
the second business day prior to the Closing.

1.31. "FRA" shall have the meaning specified in the preamble hereto.

1.32. "FRA Common Stock" shall have the meaning specified in Section
2.7(b).

1.33. "General Partner" shall mean RHP GP, L.P.

1.34. "Government Communications" shall mean all written inspection
reports, complaints and other notices received by the Company from government
and regulatory agencies and authorities.

1.35. "Hazardous Substance(s)" shall mean: (i) any substance, the
presence of which requires investigation or remediation under any Environmental
Law or under common law; (ii) any toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous
substance which is regulated by any Environmental Law; and (iii) radon,
ureaformaldehyde, polychlorinated biphenyls, friable asbestos or friable
asbestos-containing materials, petroleum and petroleum products in
concentrations or quantities which are regulated under the Environmental Laws.

1.36. "Indemnified Person" shall have the meaning specified in Section
10.4.

1.37. "Indemnifying Person" shall have the meaning specified in Section
10.4.

1.38. "Intellectual Property" shall have the meaning specified in
Section 3.15 of this Agreement.

1.39. "IRS" shall mean the United States Internal Revenue Service or any
successor entity.

1.40. "Investment Representation Letter" shall have the meaning
specified in Section 4.8(d).

<PAGE> 14

1.41. "Licenses" shall mean all material governmental licenses, permits,
approvals and registrations necessary for the ownership of the Company
properties and the conduct of its business as currently conducted.

1.42. "Loss(es)" shall have the meaning specified in Section 10.2(a).

1.43. "Material Adverse Effect" shall mean a material adverse effect on
the business, assets, properties, operations or financial condition of RHP and
the Subsidiaries, taken as a whole, or QuadraMed and its subsidiaries, taken as
a whole, as the case may be, but shall not include the effect of economic,
political or other conditions affecting the Company's industry or the economy
generally.

1.44. "Merger Subs" shall have the meaning specified in the preamble
hereto.

1.45. "Mergers" shall have the meaning specified in the preamble hereto.

1.46. "Notice of Superior Proposal" shall have the meaning specified in
Section 4.9(b).

1.47. "Partner(s)" shall mean the holder(s) of RHP Limited Partnership
Interests and the General Partner.

1.48. "Partnership Interests" shall mean RHP Limited Partnership
Interests and RHP General Partnership Interests.

1.49. "Permitted Encumbrance" shall have the meaning specified in
Section 3.13(a) of this Agreement.

1.50. "Person" shall mean an individual, a partnership, a corporation, a
business trust, a joint stock company, a trust, an unincorporated association, a
joint venture or any other entity of whatever nature.

1.51. "QuadraMed" shall have the meaning specified in the preamble
hereto.

1.52. "QuadraMed Balance Sheet" shall mean the Balance Sheet included in
QuadraMed's Quarterly Report on Form 10-Q for the period ended September 30,
1997.

1.53. "QuadraMed Balance Sheet Date" shall mean September 30, 1997.

1.54. "QuadraMed Common Stock" shall mean the shares of common stock of
QuadraMed, $0.01 par value.

1.55. "QuadraMed Disclosure Schedule" shall have the meaning specified
in Article V.

<PAGE> 15

1.56. "QuadraMed Indemnified Person(s)" shall have the meaning specified
in Section 10.2(a).

1.57. "QuadraMed SEC Filings" shall mean any and all documents, reports
and other filings, including those required as exhibits, made by QuadraMed with
the SEC.

1.58. "QuadraMed Shares" shall mean the shares of QuadraMed Common Stock
issuable as the Closing Considerations.

1.59. "QuadraMed Stock Value" shall mean the Fair Market Value of each
of the QuadraMed shares used to calculate the Closing Considerations.

1.60. "QuadraMed Survival Period" shall have the meaning specified in
Section 10.1(b).

1.61. "Real Property" shall mean all of the land, buildings, plants,
facilities, installations, fixtures and other structures and improvements leased
to the Company pursuant to the Real Property Leases.

1.62. "Real Property Leases" shall mean, collectively, any written real
property leases to which the Company is a party.

1.63. "Registration Rights Agreement" shall mean the Registration Rights
Agreement, substantially in the form of Exhibit B attached hereto.

1.64. "Resource Holdings" shall have the meaning specified in the
preamble hereto.

1.65. "Resource Holdings Common Stock" shall have the meaning specified
in Section 2.7(a).

1.66. "RHP" shall have the meaning specified in the preamble hereto.

1.67. "RHP General Partnership Interest" shall mean the general
partnership interest in RHP.

1.68. "RHP Limited Partnership Agreement" shall mean that certain First
Amended and Restated Agreement of Limited Partnership of Resource Health
Partners, L.P., dated as of January 13, 1995, as amended.

1.69. "RHP Limited Partnership Interests" shall mean the limited
partnership interests in RHP.

1.70. "RHP Survival Period" shall have the meaning specified in Section
10.1(a).

<PAGE> 16

1.71. "Rule 144" shall have the meaning specified in Section 3.31(b).

1.72. "SEC" shall mean the Securities and Exchange Commission.

1.73. "Securities Act" shall mean the Securities Act of 1933, as
amended.

1.74. "Software" shall have the meaning specified in Section 3.17.

1.75. "Sub A" shall have the meaning specified in the preamble hereto.

1.76. "Sub A Certificate of Merger" shall mean the Certificate of Merger
in substantially the form attached hereto as Exhibit C, to be executed and filed
in connection with the Sub A Merger.

1.77. "Sub A Common Stock" shall mean the common stock of Sub A, $0.001
par value.

1.78. "Sub B" shall have the meaning specified in the preamble hereto.

1.79. "Sub B Certificate of Merger" shall mean the Certificate of Merger
in substantially the form attached hereto as Exhibit D, to be executed and filed
in connection with the Sub A Merger.

1.80. "Sub B Common Stock" shall mean the common stock of Sub B, $0.001
par value.

1.81. "Sub B Merger Agreement" shall mean the Agreement and Plan of
Merger, in the form attached as Exhibit E.

1.82. "Subsidiary" and "Subsidiaries" shall mean the subsidiaries of RHP
as listed on Schedule 3.5 hereto.

1.83. "Superior Proposal" shall mean any bona fide proposal to acquire
directly or indirectly for consideration consisting of cash and/or securities
RHP Limited Partnership Interests entitled to 50% or more of the distributions
of RHP then outstanding or all or substantially all the assets of the Company
and otherwise on terms which the Advisory Committee of RHP by a majority vote
determines in its good faith judgment (based on consultation with the financial
advisor of RHP) to be reasonably capable of being completed (taking into account
all legal, financial, regulatory and other aspects of the proposal and the
person or entity making the proposal, including the availability of financing
therefor) and more favorable to RHP's Limited Partners than the Mergers.

1.84. "Surviving Corporation A" shall have the meaning specified in
Section 2.1(a).

<PAGE> 17

1.85. "Surviving Corporation B" shall have the meaning specified in
Section 2.1(b).

1.86. "Tax(es)" shall mean all taxes, charges, fees, levies or other
assessments of any nature whatsoever (including, without limitation, all net
income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, withholding, payroll, employment, excise,
estimated, severance, stamp, occupation, property or other taxes, customs,
duties, fees, assessments or charges of any kind whatsoever) together with any
interest and any penalties, additions to tax or additional amounts imposed by
any taxing authority (domestic or foreign) upon the Company to which reference
is being made or any Affiliate thereof for upon any consolidated, combined or
unitary group of which any such entity is or was a member.

1.87. "Tax Return(s)" shall mean all federal, state, foreign, local and
other tax returns, reports and statements heretofore required to be filed by the
Company to which reference is being made or by any consolidated, combined or
unitary group of which the Company is or was a member.

1.88. "Third Party" shall mean any person or entity (which includes a
"person" as such term is defined in Section 13(d)(3) of the Exchange Act) other
than QuadraMed, Sub A, Sub B or any affiliate thereof.

1.89. "Third Party Acquisition" shall mean the occurrence of any of the
following events: (i) the acquisition of RHP by merger or otherwise by any
person or entity (which includes a "person" as such term is defined in Section
13(d)(3) of the Exchange Act) other than QuadraMed, Sub A, Sub B or any
affiliate thereof; (ii) the acquisition by a Third Party of 50% or more of the
total assets of the Company (other than the purchase of the Company's products
in the ordinary course of business); (iii) the acquisition by a Third Party of
RHP Limited Partnership Interests entitled to 50% or more of distributions of
RHP; (iv) the adoption by RHP of a plan of partial or complete liquidation or
the declaration or payment of an extraordinary dividend other than in connection
with the transactions contemplated by this Agreement; or (v) the repurchase by
RHP of the RHP Limited Partnership Interests entitled to 50% or more of
distributions of RHP.

1.90. "Threshold Amount" shall have the meaning specified in Section
10.2(b).

ARTICLE II.

THE MERGERS

2.1. The Mergers.

(a) Sub A Merger. Subject to the terms and conditions of this
Agreement and the Sub A Merger Agreement, simultaneously with the Sub B Merger,
the Sub A Merger shall be consummated in accordance with the PBCL, as promptly
as practicable following the

<PAGE> 18

satisfaction or waiver of the conditions set forth in Articles VII, VIII and IX.
At the Effective Time, subject to the terms and conditions of this Agreement and
the Sub A Merger Agreement and in accordance with the laws of the State of
Pennsylvania, Sub A shall be merged with and into Resource Holdings, the
separate corporate existence of Sub A shall cease and Resource Holdings shall
continue as the surviving corporation (the "Surviving Corporation A").

(b) Sub B Merger. Subject to the terms and conditions hereof,
simultaneously with the Sub A Merger, the Sub B Merger shall be consummated in
accordance with the DGCL as promptly as practicable following the satisfaction
or waiver of the conditions set forth in Articles VII, VIII and IX. At the
Effective Time, subject to the terms and conditions of this Agreement and in
accordance with the laws of the State of Delaware, Sub B shall be merged with
and into FRA, the separate corporate existence of Sub B shall cease and FRA
shall continue as the surviving corporation (the "Surviving Corporation B").

2.2. Execution and Filing of Articles and Certificates of Merger.

(a) Sub A Merger. Prior to the Closing, Sub A and Resource
Holdings shall (i) complete and execute the Sub A Merger Agreement, the Articles
of Merger, as required by the PBCL, and the Sub A Certificate of Merger, as
required by the DGCL, (ii) shall cause the Articles of Merger and Sub A Merger
Agreement to be delivered to the Pennsylvania Secretary of State for filing as
part of the Closing as provided by the PBCL, and (iii) shall cause the Sub A
Certificate of Merger to be delivered to the Delaware Secretary of State for
filing as part of the Closing as provided by the DGCL. The parties hereto will
also execute and deliver such other documents or certificates as may be required
to effect the Sub A Merger.

(b) Sub B Merger. Prior to the Closing, Sub B and FRA shall
complete and execute the Certificate of Merger and cause the Certificate of
Merger to be delivered to the Delaware Secretary of State for filing as part of
the Closing as provided in Section 251 of the DGCL. The parties hereto will also
execute and deliver such other documents or certificates as may be required to
effect the Merger.

2.3. Effect of the Mergers.

(a) The Sub A Merger shall have the effect set forth in Section
1921 of the PBCL.

(b) The Sub B Merger shall have the effect set forth in Section
251 of the DGCL.

<PAGE> 19

2.4. Articles or Certificate of Incorporation; Bylaws.

(a) Sub A Merger. As of the Effective Time, the Articles of
Incorporation of Resource Holdings shall be the Articles of Incorporation of
Surviving Corporation A, and the Bylaws of Resource Holdings shall be the Bylaws
of Surviving Corporation A.

(b) Sub B Merger. As of the Effective Time, the Certificate of
Incorporation of FRA shall be the Certificate of Incorporation of Surviving
Corporation B, and the Bylaws of Sub B shall be the Bylaws of Surviving
Corporation B.

2.5. Directors.

(a) Sub A Merger. At the Effective Time, the directors of Sub A
shall become the directors of Surviving Corporation A. Such directors shall hold
office from the Effective Time until their respective successors are duly
elected or appointed and qualify in the manner provided in the Articles of
Incorporation and Bylaws of Resource Holdings, or as otherwise provided by law.

(b) Sub B Merger. At the Effective Time, the directors of Sub B
shall become the directors of Surviving Corporation B. Such directors shall hold
office from the Effective Time until their respective successors are duly
elected or appointed and qualify in the manner provided in the Certificate of
Incorporation and Bylaws of Sub B, or as otherwise provided by law.

2.6. Officers.

(a) Sub A Merger. At the Effective Time, the officers of Sub A
shall become the officers of Surviving Corporation A. Such officers shall hold
office from the Effective Time until their respective successors are duly
elected or appointed and qualify in the manner provided in the Articles of
Incorporation and Bylaws of Resource Holdings, or as otherwise provided by law.

(b) Sub B Merger. At the Effective Time, the officers of Sub B
shall become the officers of Surviving Corporation B. Such officers shall hold
office from the Effective Time until their respective successors are duly
elected or appointed and qualify in the manner provided in the Certificate of
Incorporation and Bylaws of Sub B, or as otherwise provided by law.

2.7. Effect on Capital Stock.

(a) Conversion of Resource Holdings Common Stock; Sub A Merger.

(i) At the Effective Time of the Sub A Merger, each share of
common stock, no par value, of Resource Holdings ("Resource Holdings Common
Stock")

<PAGE> 20

issued and outstanding immediately prior to the Effective Time will be canceled
and extinguished and be converted automatically into the right to receive a
number of shares of QuadraMed Common Stock equal to the quotient obtained by
dividing (A) the amount obtained by dividing $3,792,039.90 by the Fair Market
Value (such quotient referred to as "Closing Consideration A"), by (B) the
number of shares of Resource Holdings Common Stock outstanding at the Effective
Time. At the Effective Time, all rights in respect of such shares of Resource
Holdings Common Stock shall cease to exist, other than the right to receive
Closing Consideration A. Until surrendered, each outstanding certificate, if
any, which prior to the Effective Time represented issued and outstanding shares
of Resource Holdings Common Stock shall be deemed for all corporate purposes to
evidence the right to receive such amount.

(ii) At the Effective Time, all shares of Resource Holdings
Common Stock that are owned by Resource Holdings as treasury stock immediately
prior to the Effective Time shall be canceled and retired and cease to exist,
without any conversion thereof.

(b) Conversion of FRA Common Stock; Sub B Merger.

(i) At the Effective Time of the Sub B Merger, each share of
common stock, $.01 par value, of FRA ("FRA Common Stock") issued and outstanding
immediately prior to the Effective Time will be canceled and extinguished and be
converted automatically into the right to receive a number of shares of
QuadraMed Common Stock equal to the quotient obtained by dividing (A) the amount
obtained by dividing $34,128,359.10 by the Fair Market Value (such quotient
referred to as "Closing Consideration B"), by (B) the number of shares of FRA
Common Stock outstanding at the Effective Time. At the Effective Time, all
rights in respect of such shares of FRA Common Stock shall cease to exist, other
than the right to receive Closing Consideration B. Until surrendered, each
outstanding certificate, if any, which prior to the Effective Time represented
issued and outstanding shares of FRA Common Stock shall be deemed for all
corporate purposes to evidence the right to receive such amount.

(ii) At the Effective Time, all shares of FRA Common Stock
that are owned by FRA as treasury stock immediately prior to the Effective Time
shall be canceled and retired and cease to exist, without any conversion
thereof.

2.8. Closing. Unless this Agreement shall have been terminated pursuant
to the provisions of Article XI, the Closing of the transactions contemplated by
this Agreement shall take place at the offices of Brobeck, Phleger & Harrison
LLP, One Market, Spear Tower, San Francisco, California 94105 as soon as
practicable following the satisfaction or waiver of the conditions set forth in
Articles VII, VIII and IX.

<PAGE> 21

2.9. Delivery of Certificates.

(a) RHP shall deliver to QuadraMed, at the Closing, the
certificates for all outstanding shares of Resource Holdings Common Stock and
FRA Common Stock in exchange for the shares of QuadraMed Common Stock to be
issued in the Mergers.

(b) QuadraMed shall deliver to RHP, at the Closing, (i) a
certificate in the name of RHP for a number of QuadraMed Shares equal to the
quotient obtained by dividing $3,700,000 by the QuadraMed Stock Value (the
"Escrow Shares"), to be deposited with and held by the Escrow Agent by RHP
pursuant to the terms of the Escrow Agreement, and (ii) a certificate in the
name of RHP for the aggregate number shares of QuadraMed Common Stock to be
issued to RHP in the Mergers, other than the Escrow Shares. Each of the
certificates shall bear the legends set forth in Section 4.8.

2.10. Escrow. At the Closing, RHP shall cause the Escrow Shares to be
deposited with the Escrow Agent, to be held in an escrow account established by
the Escrow Agent for the purposes hereof in accordance with the terms of the
Escrow Agreement.

2.11. Tax Consequences. It is intended that the Mergers shall constitute
a reorganization, within the meaning of Section 368(a)(1)(A) and Section
368(a)(2)(E) of the Code with respect to the acquisition of Resource Holdings
and FRA, and that this Agreement shall constitute a "plan of reorganization" for
purposes of Section 368 of the Code.

2.12. Pooling of Interests. The parties intend that the Mergers be
treated as a "pooling of interests" for accounting purposes.

2.13. Private Placement. The shares of QuadraMed Common Stock to be
issued in the Mergers will be exempt from registration requirements of the
Securities Act pursuant to the private placement exemption provided by Section
4(2) thereof.

2.14. Payment of Certain Fees and Expenses. QuadraMed shall assume and
pay all fees and expenses of the Company Advisors as contemplated by Section
11.5.

2.15. Assignment of RHP Assets and Assumption of RHP Liabilities. At the
Closing, QuadraMed and RHP shall execute and deliver the Assignment and
Assumption Agreement attached hereto as Exhibit F, pursuant to which RHP shall
assign to QuadraMed the assets and properties of RHP as of the Closing Date
(other than the equity interests in the Subsidiaries) and QuadraMed shall assume
all liabilities of RHP (other than those liabilities arising under the RHP
Limited Partnership Agreement) as of the Closing Date on the terms and
conditions of said Assignment and Assumption Agreement.

<PAGE> 22

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as disclosed in a document of even date herewith and
delivered by RHP to QuadraMed concurrently with the execution and delivery of
this Agreement and referring to the representations and warranties in this
Agreement (the "Company Disclosure Schedule"), RHP, Resource Holdings and FRA
jointly and severally represent and warrant to QuadraMed and the Merger Subs as
follows:

3.1. Organization and Good Standing of RHP and Subsidiaries. RHP is a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware, has all requisite partnership power and
authority to carry on its business as now being conducted and to own, lease and
operate its properties. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation, has all requisite corporate power and authority to carry on its
business as now being conducted and to own, lease and operate its properties.

3.2. Limited Partnership Agreement, Charter and Bylaws. RHP has
delivered to QuadraMed and the Merger Subs true, correct and complete copies of
the RHP Limited Partnership Agreement and the charters (certified by the
applicable Secretary of State) and bylaws (certified by its Secretary) of each
Subsidiary, together with all amendments to each through the date hereof. The
RHP Limited Partnership Agreement and each such charter and bylaws are in full
force and effect.

3.3. Corporate Minutes. Except as set forth on Schedule 3.3, RHP has
delivered to QuadraMed and the Merger Subs copies of all minute books and stock
certificate books of each Subsidiary, and the stock certificate books reflect
all issuances of equity securities of each Subsidiary.

3.4. Qualifications to Do Business. Each Subsidiary is qualified to do
business and are in good standing in each jurisdiction (listed on Schedule 3.4
to this Agreement) where the character or location of the employment of
personnel or the nature of the business and activities conducted by such
Subsidiary requires such qualification, except in such jurisdictions where the
failure to be so qualified and to be in good standing, individually or in the
aggregate, would not have a Material Adverse Effect.

3.5. Capitalization of Subsidiaries. The capitalization of each
Subsidiary is as set forth on Schedule 3.5 hereto. Except as set forth on
Schedule 3.5, there are not and, as of the Closing, there will not be, any
outstanding securities of any Subsidiary or options, warrants, subscriptions,
convertible debentures or other rights, commitments or any other similar
agreements for the purchase of any securities of any Subsidiary. Other than the
RHP Limited Partnership Agreement, the Company is not a party to any voting
trust agreements or other

<PAGE> 23

contracts, agreements or arrangements restricting voting rights or
transferability with respect to the issued and outstanding capital stock of any
Subsidiary.

3.6. Ownership of RHP Partnership Interests. As of the date of this
Agreement and as of the Closing, the Partners do and will own all of the issued
and outstanding Partnership Interests of RHP as set forth on Schedule 3.6
hereto. Except as set forth on Schedule 3.6, there have been no changes in the
record ownership of any Partnership Interests or other equity interests of RHP
within the one (1) year period ending on the Effective Time of this Agreement.

3.7. RHP Assets and Liabilities; Subsidiaries and Other Affiliates.

(a) Except as set forth on Schedule 3.7, (i) RHP has no ownership
interests or other rights in any assets or property and (ii) RHP has no
liabilities or obligations of any kind or nature.

(b) Except as set forth on Schedule 3.7, RHP does not have any
subsidiaries and does not own, either directly or indirectly, any interest or
investment, whether debt or equity (other than an interest as a creditor holding
a trade account receivable), or any obligation, option or right to acquire any
such interest, direct or indirect, in any other corporation or other entity
other than the Subsidiaries.

3.8. Equity Ownership of Subsidiaries. Except as set forth on Schedule
3.8, all the issued and outstanding shares of capital stock of each Subsidiary
are validly issued, fully paid and nonassessable and are owned by RHP or by a
wholly-owned Subsidiary, free and clear of any Encumbrances, and there are no
proxies issued and outstanding or restrictions on voting with respect to any
such shares.

3.9. Authority.

(a) RHP has the necessary limited partnership power and authority
to enter into and deliver this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby by RHP have been duly authorized by the Advisory Committee and the
General Partner of RHP in accordance with applicable law and the RHP Limited
Partnership Agreement. No further action will be necessary on the part of RHP to
make this Agreement valid and binding upon RHP in accordance with its terms.
This Agreement has been duly and validly executed and delivered by RHP and this
Agreement (assuming due authorization, execution and delivery by the other
parties hereto) constitutes the legal, valid and binding obligation of RHP,
enforceable in accordance with its terms (except as such enforcement may be
limited by applicable bankruptcy, insolvency, moratorium or similar laws
affecting the rights of creditors generally or by general principles of equity).
Neither the execution, delivery nor performance of this Agreement by RHP, nor
the consummation of the transactions contemplated hereby, nor compliance by RHP
with the

<PAGE> 24

terms and provisions of this Agreement nor the Certificates of Merger will
result in a violation or breach of any term or provision of the RHP Limited
Partnership Agreement, or of any statute, rule or regulation applicable to RHP
or its businesses, properties, assets or personnel, or except as described on
Schedule 3.9(a), conflict with or constitute a violation or breach of, or a
default under (or an event which, with the passage of time or the giving of
notice, or both, would constitute a default under), nor give any party a right
to accelerate the due date of any indebtedness or obligation under, any
indenture, mortgage, deed of trust, contract or agreement to which RHP is a
party or to which its properties or assets are subject, or any judgment, decree,
writ or other court order to which RHP is a party or by which RHP or its
businesses, properties, assets or personnel are bound; except, in each case,
where it would not have a Material Adverse Effect, either individually or in the
aggregate.

(b) Except for filing the Certificates of Merger with the
Delaware and Pennsylvania Secretaries of State (as appropriate), filing any
necessary qualification or withdrawal documents with state authorities,
obtaining any necessary third-party consents and compliance with any federal or
state securities laws requirements, RHP is not required to submit any notice,
report or other filing with any federal, state or local governmental authority
in connection with the execution or delivery or performance by RHP of this
Agreement or the consummation of the transactions contemplated herein.

3.10. Company Financial Statements. RHP has delivered to QuadraMed and
the Merger Subs true, complete and correct copies of the Company Financial
Statements. Except as set forth on Schedule 3.10, the Company Financial
Statements (i) present fairly, in all material respects, the financial position
of the Subsidiaries covered thereby at said dates and the results of their
respective operations and cash flows for the periods therein specified in
accordance with generally accepted accounting principles, consistently applied
and maintained throughout the periods indicated, except as set forth therein,
subject, in the case of interim and unaudited financial statements, to audit and
year-end adjustments and accruals and the absence of footnotes and, in the case
of the interim financial statements of Resource Holdings and Healthcare Research
Affiliates, Inc., the absence of statements of shareholders' equity and cash
flows, and (ii) have been prepared from the books and records of the
Subsidiaries.

3.11. Undisclosed Liabilities.

(a) Except for (i) liabilities disclosed or provided for on the
Company Financial Statements, or in the footnotes thereto (ii) liabilities
incurred in the ordinary course of business and not required to be set forth in
the Company Financial Statements under generally accepted accounting principles,
which could not reasonably be foreseen to have a Material Adverse Effect, either
individually or in the aggregate, (iii) liabilities incurred in the ordinary
course of business consistent with past practice since December 31, 1996, (iv)
liabilities incurred in connection with the execution of this Agreement, (v)
Contracts or commitments disclosed on any Schedule to this Agreement or not
required to be so disclosed pursuant to the terms of this Agreement, and (vi)
any liability disclosed on any other Schedule to this Agreement, the Company
does not have any material direct or indirect indebtedness,

<PAGE> 25

liability or obligation, accrued, absolute or contingent (whether or not of a
kind required by generally accepted accounting principles to be set forth on a
balance sheet) (the "Liabilities"), other than the Liabilities set forth on
Schedule 3.11.

(b) Neither RHP nor any of the Subsidiaries have paid any of the
fees or expenses of the Company Advisors in connection with this Agreement or
the transactions contemplated hereby.

3.12. Absence of Certain Changes. Except as set forth on Schedule 3.12
or as provided for in this Agreement, since October 31, 1997, the Subsidiaries
have conducted their business only in the ordinary course and consistent with
prior practice, and the Subsidiaries have not:

(a) Discharged or satisfied any material Encumbrance or paid any
material obligation or liability, absolute, accrued, contingent or otherwise,
whether due or to become due, other than liabilities shown on the Company
Financial Statements and liabilities incurred since the date of the Company
Financial Statements in the ordinary course of business and consistent with
prior practice;

(b) Subjected (or permitted to be subjected) any of its property,
business or assets, tangible or intangible to any material Encumbrance other
than Permitted Encumbrances;

(c) Sold, transferred, leased to others or otherwise disposed of
any of its assets or canceled or compromised any material debt or claim, or
knowingly waived or released any claim or right of substantial value except in
the ordinary course of business consistent with prior practice;

(d) Terminated or received any notice of termination of any
Contract or suffered any damage, destruction or loss (whether or not covered by
insurance) which, individually or in the aggregate, has had or could reasonably
be expected to have a Material Adverse Effect;

(e) To the Company's knowledge, encountered any labor union
organizing activity, had any actual or threatened employee strikes, workdowns or
lockouts;

(f) Transferred or granted any rights under, or entered into any
settlement regarding the breach or infringement of, or entered into any Contract
relating to, any Intellectual Property or modified any existing rights with
respect thereto except as disclosed on other Schedules hereto;

(g) Except as required in accordance with applicable laws,
adopted, entered into or amended any Employee Benefit Plan or made any change in
the actuarial methods or assumptions used in funding or determining benefit
equivalences thereunder, and except for

<PAGE> 26

year-end bonuses in accordance with past practice, made any change in the rate
of compensation, commission, bonus or other direct or indirect remuneration
payable to any director, officer or employee of the Company earning over $75,000
during the 1997 calendar year;

(h) Made any capital expenditures or capital additions or
betterments or commitments therefor in excess of $50,000 individually or
$250,000 in the aggregate;

(i) Instituted, settled or agreed to settle, or had a judgment
rendered against the Company in, any material litigation, action or proceeding
before any court or governmental body (domestic or foreign) relating to the
Company or its businesses, assets or properties;

(j) Accepted any Contract for performance of services or orders
in a material amount from any hospital, health care provider or other customer
with terms not within the ordinary course of business which will require
performance subsequent to the Closing;

(k) Revalued any of its assets or written off as uncollectible
any notes or accounts receivable which, individually or in the aggregate, is
material to the Company or its businesses, except writedowns and write-offs in
the ordinary course of business.

(l) Entered into any agreement or made any commitment to take any
of the actions described in paragraphs (a) through (l) above; or

(m) Experienced any Material Adverse Effect.

3.13. Assets.

(a) Except as set forth on Schedule 3.13(a), each Subsidiary has
marketable title to, or a valid leasehold interest in, or other legal right to
use, all of the material properties and assets it owns or uses in its business,
except inventory (if any) sold or other assets disposed of or used since October
31, 1997 in the ordinary course of business. None of such assets or properties
owned by a Subsidiary are subject to any Encumbrances, except (i) imperfections
of title and Encumbrances incurred or made in the ordinary course of business
which are not material in amount and do not materially impair the usefulness of
such properties and assets in the conduct of the business of the Company, (ii)
liens for taxes, assessments or other governmental charges or levies which are
either not yet delinquent or are being contested in good faith and by
appropriate proceedings, can be paid without material penalty and which do not
materially impair the usefulness of such properties and assets in the conduct of
the business of the Company, (iii) Encumbrances which are either reflected, or
securing liabilities reflected, on the Company Financial Statements or securing
liabilities incurred since the date thereof in the ordinary course of business
or (iv) Encumbrances reflected on Schedule 3.13(a)(i) (collectively, "Permitted
Encumbrances"). Except as set forth

<PAGE> 27

on Schedule 3.13(a), all of such properties and assets owned, leased or used by
the Company are adequate for all current operations of the business of the
Company.

(b) RHP has delivered to QuadraMed a complete list, which is true
and correct in all material respects, of all equipment, machinery, tools,
equipment, motor vehicles and other tangible personal property (other than
inventory (if any) and supplies acquired in the ordinary course of business)
owned, leased or used by the Company, except for any items having a current book
value less than $15,000.

3.14. Real Property Matters.

(a) Schedule 3.14 includes a complete and accurate description of
all of the Real Property. The Real Property includes all land used for the
conduct of the business and operations of the Company. To the knowledge of the
Company, the activities carried on in such Real Property are not in violation of
or in conflict with any applicable zoning, environmental or health regulation or
ordinance or any other law, statute, regulation or ordinance which such
violation or conflict would have a Material Adverse Effect. RHP has delivered to
QuadraMed and the Merger Subs true, correct and complete copies of the Real
Property Leases and copies of all material reports of any engineers,
environmental consultants or other consultants in its possession relating to any
of the Real Property that were prepared within the past five (5) years.

(b) Except as disclosed on Schedule 3.14, there are no tenants
(other than the Company) occupying space on any Real Property leased by the
Company.

(c) Each of the Real Property Leases is valid and enforceable in
accordance with its terms, the Company has not received any notice of any, and
there exists no event of default by the Company or event which constitutes or
would constitute (with notice or lapse of time or both) a default by the Company
in any material respect under any Real Property Lease, except as otherwise
provided in Schedule 3.14.

3.15. Intellectual Property. Schedule 3.15 sets forth all patents,
trademarks, service marks, trade names, copyrights, all applications for any of
the foregoing and all permits, grants and licenses running to or from the
Subsidiaries relating to any of the foregoing that are material to the business
of the Subsidiaries (collectively, the "Intellectual Property"). To the extent
that it would have a Material Adverse Effect and except as set forth on Schedule
3.15, to the Company's knowledge, the Subsidiaries are not in violation of, or
infringing upon, any patent, trademark, service mark, trade name or copyright of
any third party, and no written claims have been asserted, nor is there any
litigation pending or threatened claiming such infringement. Except as set forth
on Schedule 3.15, the Subsidiaries have not licensed or encumbered any
Intellectual Property owned by them to any third party, nor have any other
distribution rights been granted by the Subsidiaries to a third party. Except as
set forth on Schedule 3.15, the Subsidiaries have not entered into any other
agreements whereby the Subsidiaries have been appointed as a distributor or
licensee of any products, patents or

<PAGE> 28

trademarks owned by a third party. Except as set forth on Schedule 3.15, the
Subsidiaries have not entered into any agreement which restricts the use of any
of the Intellectual Property. To the Company's knowledge, the Subsidiaries are
not in breach of any agreement set forth in Schedule 3.15, nor have any claims
with respect to any agreement been asserted nor is there any litigation pending
or threatened claiming any such breach, nor have any claims been asserted that
any of the terms and conditions of such agreements violate the laws of any
jurisdiction or treaty to the extent that, in each case, it would have a
Material Adverse Effect. To the Company's knowledge, and except as provided in
Schedule 3.15, the Subsidiaries own or have licensed from third parties, and
have the right to use, all necessary Intellectual Property in order to conduct
their business in all material respects as currently conducted.

3.16. Proprietary Information of Third Parties. To the Company's
knowledge, no Third Party has claimed in writing that any Person currently
employed by the Company has (i) violated or may be violating any terms or
conditions of his or her employment, non-competition or non-disclosure agreement
with such Third Party, (ii) disclosed or may be disclosing or utilized or may be
utilizing any trade secret or proprietary information or documentation of such
Third Party or (iii) interfered or may be interfering in the employment
relationship between such Third Party and any of its present or former
employees.

3.17. Software. Except as set forth on Schedule 3.17:

(a) The computer software of the Subsidiaries included in the
Intellectual Property (the "Software") performs in all material respects in
accordance with the documentation and other written material used in connection
with the Software and to the Company's knowledge is free of material defects in
programming and operation, is in machine-readable form, contains all current
revisions of the Software and includes all computer programs, materials and
processes related to the Software. RHP has made available to QuadraMed and the
Merger Subs complete and correct copies of all existing user manuals related to
the Software.

(b) To the Company's knowledge, no employee of the Company is in
default under any term of any employment contract or noncompetition agreement
with the Company relating to the Software, or any other contract or any
restrictive covenant with the Company relating to the Software or its
development or exploitation. To the Company's knowledge, the Software was
developed entirely by employees and consultants of the Company. Each such
employee was, during the time of such employee's participation in such
development, exclusively an employee of the Company. The Software does not
include, to the Company's knowledge, any inventions of any employees or
consultants made prior to the time such employees or consultants became
employees or consultants of the Company nor, to the Company's knowledge, any
intellectual property of any previous employer of such employee or consultant.

(c) All right, title and interest in and to the Software is owned
by the Company, free and clear of all Encumbrances except for Permitted
Encumbrances or other

<PAGE> 29

Encumbrances which would not materially impair the value or use of such
Software, and, except for non-exclusive licenses granted to customers in the
ordinary course of business, no party other than the Company has any interest in
the Software, including, without limitation, any security interest, license,
contingent interest or otherwise. To the Company's knowledge, the Company's
development, use, sale or exploitation of the Software does not violate in any
material respect any rights of any other person or entity and the Company has
not received any communication alleging such a violation. Other than employees,
consultants and sales agents, the Company does not have any obligation to
compensate any person for the development, use, sale or exploitation of the
Software nor has the Company granted to any other person or entity other than
customers and sales agents any license, option or other rights to develop, use,
sell or exploit in any manner the Software, whether requiring the payment of
royalties or not.

(d) The Company has used commercially reasonable efforts to
prohibit the public disclosure of the source code for the Software to any person
or entity other than certain employees and consultants of the Company. The
Company used commercially reasonable efforts to protect the confidential and
proprietary nature of the Software. There have been no patents applied for and
no copyrights registered for any part of the Software.

3.18. Tax Matters.

(a) All Tax Returns and reports of the Company required by law to
be filed as of the date hereof have been filed, and all Taxes imposed upon the
Company or any of its properties, assets or income which are due and payable, or
claimed in writing by any taxing authority to be due and payable, as of the date
hereof have been paid or reserved for, other than taxes, assessments, fees and
charges being contested in good faith by the Company concerning an amount which
in the aggregate is not material to the business of the Company and except for
extensions set forth on Schedule 3.18(a). The Company has paid or made provision
in the Company Financial Statements for the payment of all unpaid Taxes of the
Company through the date of the Company Financials accrued for or applicable to
the period then ended. FRA and its Subsidiary utilize the accrual method of
accounting for tax purposes.

(b) Except as set forth on Schedule 3.18(b), there are no claims
for Taxes pending against the Company and the Company does not know of any
threatened claim for Tax deficiencies, and there are not now in force any
waivers or agreements by the Company for the extension of time for the
assessment of any tax, nor has any such waiver or agreement been requested by
the IRS or any other taxing authority.

(c) Except as set forth on Schedule 3.18(c), within the past
three years, the federal income Tax Returns of the Company have not been
examined by the IRS. The Company has no liability for any federal, state or
other Taxes of any other corporation or entity, including, without limitation,
by reason of the application of Treas. Reg. Section

<PAGE> 30

1.1502-6. Except as set forth on Schedule 3.18(c), the Company is not required
to file any tax returns or to pay any Taxes in foreign countries.

(d) The Company has paid or is withholding and will pay when due
to the proper taxing authorities all withholding amounts required to be withheld
with respect to all Taxes on income, unemployment, social security or other
similar programs or benefits with respect to salary and other compensation of
directors, officers and employees of the Company.

(e) Schedule 3.18(e) lists those states where the Company is
required to file a Tax Return.

(f) The Tax Returns filed by the Company have reported
accurately, in all material respects, all information required to be included on
such Tax Returns.

(g) Except as set forth on Schedule 3.18(g), the Company has not
executed a waiver or consent extending any statute of limitation for the
assessment or collection of any tax, which waiver or consent remains in effect.

(h) Except as set forth on Schedule 3.18(h), the Company has not
received a tax ruling or entered into any agreement with any taxing authority,
which ruling or agreement has or could have a material adverse effect on the
Taxes of the Company payable on or after the Closing.

(i) Except as set forth on Schedule 3.18(i), the Subsidiaries
have not been included in a federal consolidated income tax return and/or state
consolidated, combined or unitary income tax return.

(j) The Company has not at any time consented to have the
provisions of Section 341(f) of the Code apply to it.

(k) Except as set forth on Schedule 3.18(k), the Company is not
subject to any joint venture, partnership or other arrangement or Contract which
is treated as a partnership for federal income tax purposes, other than the
limited partnership of RHP. The Company is not a party to any tax sharing
agreement.

(l) The Company is not and will not be required to recognize
after the date hereof any taxable income in respect of accounting method
adjustments required to be made under Section 481 of the Code or an equivalent
state or local laws provision, other than as set forth on Schedule 3.18(l)
(which describes such adjustment, the reason therefor and the amount or
estimated amount (which estimate has been made in good faith, and is considered
reasonable)) of such adjustment. No representation is made as to the effect of
any accounting method changes or adjustments made by QuadraMed, Surviving
Corporation A or Surviving Corporation B after the Closing or as a result of the
transactions contemplated by this Agreement.

<PAGE> 31

(m) The Company has not made or become obligated to make, and
will not as a result of any event connected with the transactions contemplated
by this Agreement become obligated to make, any "excess parachute payment" as
defined in Section 280G of the Code.

3.19. Legal and Regulatory Matters. Except as set forth on Schedule
3.19: (i) there is no suit, action, arbitration, known governmental
investigation or other proceeding, nor any order, decree or judgment pending or,
to the Company's knowledge, threatened by or against the Company, or the
transactions contemplated hereby that has, or could reasonably be expected to
have, a Material Adverse Effect; (ii) there are no judgments, decrees or orders
enjoining the Company in respect of, or the effect of which is to prohibit any
business practice or the acquisition of any property or the conduct of any
aspect of the business of the Company that has, or could reasonably be expected
to have, a Material Adverse Effect; (iii) the Company has complied and is
complying with all laws, ordinances, treaties and government rules, orders and
regulations applicable to it or its properties, assets, personnel or business,
non-compliance with which could have a Material Adverse Effect; (iv) the Company
has obtained all material Licenses necessary for the ownership of its properties
and the conduct of its business as currently conducted, and all such Licenses
are currently in full force and effect; and (v) RHP has provided QuadraMed and
the Merger Subs with access to all Government Communications as to which any
unresolved issue remains.

3.20. Employees. The Company has not been nor is it a party to any
collective bargaining agreements with respect to any of its employees or with
respect to any contract or agreement with a labor union or any local or
subdivision thereof, nor has it been charged with any unresolved unfair labor
practices, nor, to the Company's knowledge, is there any present union
organizing activity among any of its employees. To the Company's knowledge,
there are no controversies, claims, suits, actions or proceedings pending or
threatened between the Company and its employees which have or could reasonably
be expected to have a Material Adverse Effect.

3.21. Billings. All billings to customers which are party to Contracts
of the Company have been accurate in all material respects. To the Company's
knowledge, there are no existing or threatened disputes regarding any services
rendered or billings to such customers that would have a Material Adverse
Effect.

3.22. Insurance. Schedule 3.22 to this Agreement lists all insurance
policies of the Company, indicating the type of insurance, carrier, policy
number, amount of coverage (including deductible), premiums and expiration
dates. Except as set forth on Schedule 3.22, such policies are in full force and
effect and all premiums now due and owing with respect to such policies have
been paid in full, and the Company has not made any borrowings or incurred any
indebtedness, the collateral for which was any of such policies. To the
Company's knowledge, the Company is not in default with respect to any provision
contained in any such policy and the Company has not received any notice of
cancellation or

<PAGE> 32

nonrenewal of any such policy. No representation is made as to the
transferability of any policy or the effect of the transactions contemplated by
this Agreement.

3.23. Personnel.

(a) RHP has delivered to QuadraMed, Sub A and Sub B the names of
all directors, officers and employees of the Company earning over $75,000 in
1997, indicating (i) the positions within the Company held by each such person
and (ii) the current annual salary rates for each such person and the amounts
payable in 1997 as bonus or other compensation for each such person.

(b) RHP has delivered to QuadraMed, Sub A and Sub B a description
of the Company's policies regarding severance or other benefits that may be
payable to any Company employee if his or her employment were terminated.

3.24. Employee Benefit Plan(s). Except as set forth on Schedule 3.24,
neither the Company nor any Affiliate of the Company which would be deemed a
"single employer" with the Company under Sections 414(b) or (c) of the Code
presently maintains any Employee Benefit Plan. Each Employee Benefit Plan has
been administered in compliance with applicable law and with its terms, except
where such non-compliance has not resulted in a Material Adverse Effect. The
Company does not presently maintain, and has not maintained within the past five
(5) years, any Employee Benefit Plan which is subject to Section 412 of the Code
or Section 302 of ERISA, including any "multi-employer plan" (as defined in
Section 4001(a)(3) of ERISA). To the knowledge of the Company, neither the
Company, nor any other "disqualified person" or "party-in-interest" (as defined
in Section 4975(e)(2) of the Code and Section 3(14) of ERISA, respectively) has
engaged in any prohibited transactions in connection with any Employee Benefit
Plan that could reasonably be expected to result in the imposition of a penalty
pursuant to Section 502(i) of ERISA, damages pursuant to Section 409 of ERISA,
or a tax pursuant to Section 4975(a) of the Code which is reasonably expected to
have a Material Adverse Effect. To the Company's knowledge, there are no
actions, suits or claims (other than routine claims for benefits) pending or
threatened against any Employee Benefit Plan of the Company or their assets, or
arising out of such Employee Benefit Plan, and, to the knowledge of the Company,
no facts exist which could give rise to any such actions, suits or claims which
might have a Material Adverse Effect.

3.25. Compliance with Environmental Laws. Except as set forth in
Schedule 3.25: (i) the Company and all its operations are and have been in
compliance with all Environmental Laws except where any such noncompliance would
not result in a Material Adverse Effect; (ii) neither the Company nor any of its
predecessors used, released or disposed of any Hazardous Substance in any manner
that would reasonably be expected to result in a Material Adverse Effect and
(iii) to the Company's knowledge, there is and has been no condition, activity
or event respecting the Company that would reasonably be expected to subject
QuadraMed or the Surviving Corporations to any liability under any Environmental
Law that would result in a Material Adverse Effect.

<PAGE> 33

3.26. Bank and Brokerage Accounts. Schedule 3.26 lists (i) the names and
addresses of all banks and brokerage firms in which the Subsidiaries have
accounts or safe deposit boxes, lock boxes, vaults and the account numbers
relating thereto and (ii) the name of each person authorized to draw on any such
account or have access to any such boxes or vaults.

3.27. Contracts.

(a) Except as set forth on Schedule 3.27(a), no Subsidiary is a
party to any:

(i) Contract for the employment, severance or termination
with any of its directors or officers, or any collective bargaining agreement;

(ii) Contract for the sale of any of its assets, property or
rights outside the ordinary course of business consistent with prior practice
(other than this Agreement) which has not yet been fully performed in all
material respects;

(iii) Contract that requires the Company to indemnify or act
as an indemnitor, guarantor or surety, for any other person or entity other than
a Subsidiary;

(iv) Contract restricting the Company from conducting
business anywhere in the world;

(v) Agreement, note, debenture, loan, mortgage, indenture or
other obligation for or relating to borrowed money or commitments for obtaining
borrowed money, in each case in excess of $50,000;

(vi) Contract, lease or commitment which involves the future
payment by or to it of more than $50,000, except (i) licensing agreements and
software leases entered into in the ordinary course, (ii) other Contracts or
commitments for the sale of goods or purchase or lease of equipment, tooling,
supplies, services or raw materials in each case entered into in the ordinary
course of business consistent with prior practice and (iii) Contracts which may
be canceled by it upon sixty (60) or fewer days notice without payment of any
penalty or fee in connection therewith;

(vii) Letter of credit or power of attorney;

(viii) Joint venture contract or similar arrangement or
agreement which is likely to involve future payments by it in excess of $50,000;
or

(ix) Contract to which any Partner, stockholder, officer or
director of the Company or any "affiliate" or "associate" of such persons (as
such terms are defined in the rules and regulations promulgated under the
Securities Act), is presently a party, including, without limitation, any
agreement or other arrangement providing for the furnishing of

<PAGE> 34

services by, rental of real or personal property from, or otherwise requiring
payments to, any such person or entity.

(b) Except as specified on Schedule 3.27(b), all Contracts
required to be listed on Schedule 3.27(a) are valid and binding, enforceable in
accordance with their respective terms and in full force and effect. Neither the
Company nor, to the Company's knowledge, any other party thereto, is in material
breach of any provision of or in material default under any term of any such
agreement, and to the Company's knowledge there exists no condition or event
which after lapse of time or notice (or both) would constitute any such breach
or default or result in any right to accelerate or loss of rights. True and
complete copies of all such Contracts have been delivered to QuadraMed, Sub A
and Sub B.

3.28. Material Misstatements or Omissions. The statements,
representations and warranties of RHP contained in this Agreement (including the
schedules hereto), taken together, do not contain and will not contain any
untrue statement of a material fact and do not or will not omit to state a
material fact necessary to make the statements or facts contained herein or
therein, in light of the circumstances made, not misleading.

3.29. Broker's, Finders or Other Transaction Fees. There are no broker's
or finder's fees or obligations due to persons engaged by RHP or any of the
Partners or any of the Company's employees, officers or directors in connection
with the transactions contemplated by this Agreement, except for the fees and
expenses of its investment bankers, counsel and accountants as set forth on
Schedule 3.29.

3.30. Customers and Suppliers. As of the date hereof, no customer which
individually accounted for more than 5% of the Company's gross revenues during
the twelve (12) month period preceding the date hereof has notified the Company
that it will stop, or decrease materially the rate of, buying services or
products of the Company, other than expirations of Contracts in the ordinary
course or any such actions which would not reasonably be expected to have a
Material Adverse Effect. As of the date hereof, no material supplier of the
Company has indicated to the Company that it will stop, or decrease the rate of,
supplying materials, products or services to the Company, other than expirations
of Contracts in the ordinary course or any such actions which would not
reasonably be expected to have a Material Adverse Effect.

3.31. Investment Representations of RHP. RHP represents and warrants to
QuadraMed and the Merger Subs as follows:

(a) RHP is an "accredited investor" within the meaning of Rule
501(a) of the Securities Act.

(b) RHP is aware that the QuadraMed Shares have not been
registered under the Securities Act or any applicable state securities laws, and
agrees that the QuadraMed Shares will not be offered or sold in the absence of
registration under the

<PAGE> 35

Securities Act and any applicable state securities laws or an exemption from the
registration requirements of the Securities Act and any applicable state
securities laws, subject to Section 4.8 hereof. RHP will not transfer the Shares
in violation of the provisions of any applicable federal or state securities
laws, subject to Section 4.8 hereof. In this connection, RHP represents that it
is familiar with SEC Rule 144 promulgated pursuant to the Securities Act ("Rule
144"), as presently in effect, and understands the resale limitations imposed
thereby and by the Securities Act.

(c) RHP understands that the offering and sale of the QuadraMed
Shares is exempt from registration under the Securities Act, by virtue of
Section 4(2) of the Securities Act, based, in part, upon representations,
warranties and agreements contained in this Agreement, and that QuadraMed may
rely on such representations, warranties and agreements in connection therewith.

(d) RHP is acquiring the QuadraMed Shares for its own account and
for investment, and not with a view to the distribution thereof or with any
present intention of distributing or selling any of the Shares except in
compliance with the Securities Act, subject to Section 4.8 hereof.

ARTICLE IV.

COVENANTS OF RHP

RHP hereby covenants and agrees as follows:

4.1. Conduct of Company's Business. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, except as expressly contemplated by this
Agreement or disclosed on any Schedule hereto, RHP shall not do, cause or permit
any of the following, or allow, cause or permit any of its Subsidiaries to do,
cause or permit any of the following, without the prior written consent of
QuadraMed, which consent shall not be unreasonably withheld:

(a) Material Contracts. Enter into any contract or
commitment, or violate, amend or otherwise modify or waive any of the terms of
any of its contracts, other than in the ordinary course of business consistent
with past practice and in no event shall such contract, commitment, amendment,
modification or waiver be in excess of $250,000;

(b) Issuance of Securities. Issue, deliver or sell or
authorize or propose the issuance, delivery or sale of, or purchase or propose
the purchase of, shares of a Subsidiary's capital stock or securities
convertible into, or subscriptions, rights, warrants or options to acquire, or
other agreements or commitments of any character obligating it to issue any such
shares or other convertible securities, other than the issuance of shares of its
Subsidiaries' common stock pursuant to the exercise of stock options, warrants
or other rights therefor outstanding as of the date of this Agreement;

<PAGE> 36

(c) Intellectual Property. Transfer to any person or
entity any rights to its Intellectual Property other than in the ordinary course
of business consistent with past practice;

(d) Exclusive Rights. Enter into or amend any agreements
pursuant to which any other party is granted exclusive marketing or other
exclusive rights of any type or scope with respect to any of its products or
technology;

(e) Dispositions. Sell, lease, license or otherwise
dispose of or encumber any of its properties or assets which are material,
individually or in the aggregate, to its and its subsidiaries' business, taken
as a whole, except in the ordinary course of business consistent with past
practice;

(f) Indebtedness. Incur any indebtedness for borrowed
money or guarantee any such indebtedness or issue or sell any debt securities or
guarantee any debt securities of others;

(g) Leases. Enter into any operating lease in excess of
$25,000 each;

(h) Payment of Obligations. Pay, discharge or satisfy in
an amount in excess of $25,000 in any one case or $100,000 in the aggregate, any
claim, liability or obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise) arising other than in the ordinary course of business,
other than the payment, discharge or satisfaction of liabilities reflected or
reserved against in the Company Financial Statements;

(i) Capital Expenditures. Make any capital expenditures,
capital additions or capital improvements except in the ordinary course of
business and consistent with past practice;

(j) Insurance. Materially reduce the amount of any
material insurance coverage provided by existing insurance policies;

(k) Employee Benefit Plans; New Hires; Pay Increases.
Adopt or amend any employee benefit or stock purchase or option plan, or hire
any new director level or officer level employee (except that it may hire a
replacement for any current director level or officer level employee if it first
provides QuadraMed advance notice regarding such hiring decision), pay any
special bonus or special remuneration to any employee or director, or increase
the salaries or wage rates of its employees other than in the ordinary course of
business;

(l) Severance Arrangements. Grant any severance or
termination pay (i) to any partner, director or officer or (ii) to any other
employee except (A) payments

<PAGE> 37

made pursuant to written agreements existing on the date hereof or (B) grants
which are made in the ordinary course of business in accordance with its past
practice;

(m) Lawsuits. Commence a lawsuit other than (i) for the
routine collection of bills, (ii) in such cases where it in good faith
determines that failure to commence suit would result in the material impairment
of a valuable aspect of its business, provided that it consults with QuadraMed
prior to the filing of such a suit, or (iii) for a breach of this Agreement;

(n) Acquisitions. Acquire or agree to acquire by merging
or consolidating with, or by purchasing a substantial portion of the assets of,
or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof, or otherwise
acquire or agree to acquire any assets which are material, individually or in
the aggregate, to its and its Subsidiaries' business, taken as a whole, or
acquire or agree to acquire any equity securities of any corporation,
partnership, association or business organization;

(o) Taxes. Other than in the ordinary course of business,
make or change any material election in respect of Taxes, adopt or change any
accounting method in respect of Taxes, file any material Tax Return or any
amendment to a material Tax Return, enter into any closing agreement, settle any
claim or assessment in respect of Taxes, or consent to any extension or waiver
of the limitation period applicable to any claim or assessment in respect of
Taxes, provided that this covenant shall not apply to the tax position of RHP;

(p) Revaluation. Revalue any of its assets, including
without limitation writing down the value of inventory or writing off notes or
accounts receivable other than in the ordinary course of business; or

(q) Other. Take or agree in writing or otherwise to take,
any of the actions described in Sections 4.1 (a) through (p) above.

4.2. Access and Information. The Company will grant reasonable access to
QuadraMed and its counsel, accountants and other representatives, during
reasonable working hours throughout the period from the date hereof to the
Closing and upon reasonable prior notice, to all of the Company and the
Company's properties, books, contracts, commitments and records, and will
furnish QuadraMed during such period with reasonable access to key Company
employees and to all such information concerning the affairs of the Company as
QuadraMed reasonably requests, including copies and/or extracts of pertinent
records, documents and contracts.

<PAGE> 38

4.3. Further Efforts.

(a) RHP shall use reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the Mergers and the other transactions contemplated hereby in
accordance with the terms of this Agreement. In case further action is required
to carry out the purposes of this Agreement, RHP will use reasonable efforts to
effectuate all such action.

(b) As soon as reasonably practicable after the date hereof, and
in any event on or prior to the Closing, RHP will use reasonable efforts to
obtain the consents of all necessary governmental entities to the Mergers. No
consents of any party to the Contracts of the Company shall be required as a
condition to the Closing.

4.4. Confidentiality. In the event of the termination of this Agreement,
the Company and its representatives shall keep all information with respect to
QuadraMed which has been disclosed to the Company pursuant to this Agreement
confidential in accordance with the terms of the Confidentiality Agreement by
and between the Company and QuadraMed and shall promptly return to QuadraMed all
written information provided to the Company by QuadraMed.

4.5. Subsequent Events. RHP shall promptly, and in any event prior to
the Closing, advise QuadraMed in writing of the occurrence of any event or the
existence of any state of facts of which the Company obtains knowledge which in
any material respect would render any representation or warranty of RHP
hereunder inaccurate or which would preclude satisfaction of any condition
contained in Article VII or Article VIII of this Agreement; provided, that no
such notification shall affect any such representation, warranty or condition.
RHP shall have the right, without being deemed to be in breach of its
representations and warranties set forth in Article III, to supplement or amend
the Schedules to this Agreement with respect to any matter arising after the
date hereof; provided, however that RHP obtains the prior written consent of
QuadraMed, which consent shall not be unreasonably withheld.

4.6. Public Announcement. So long as this Agreement is in effect, RHP
nor any of its Affiliates shall issue or cause the issuance or the publication
of any press release or any other public announcement (including, without
limitation, disclosure to employees) with respect to the Mergers or any other
transaction contemplated by this Agreement without the prior review and written
consent of QuadraMed, unless required by law.

4.7. Exclusive Dealing. From the execution of this Agreement until the
Closing or the earlier termination of this Agreement, RHP (i) will not directly
or indirectly, through any representative or otherwise, solicit or entertain
offers with or in any manner encourage, discuss, accept or consider any proposal
of any other Person relating to the acquisition of RHP or RHP Partnership
Interests, its assets or business, in whole or in part, whether directly or
indirectly, through purchase, merger, consolidation or otherwise (other than
sales of

<PAGE> 39

inventory or other dispositions in the ordinary course), and (ii) will
immediately notify QuadraMed regarding any contact between RHP and any other
Person or their respective representatives regarding any such offer or proposal
or any related inquiry, except as contemplated by Section 4.9.

4.8. Restrictions on Transferability of QuadraMed Shares, Compliance
with Securities Act.

(a) Subject to Sections 4.8(c) and (d) below, the QuadraMed
Shares shall not be transferable in the absence of an effective registration
statement under the Securities Act or an exemption therefrom. In the absence of
an effective registration statement under the Securities Act, neither the
QuadraMed Shares nor any interest therein shall be sold, transferred, assigned
or otherwise disposed of, unless QuadraMed shall have previously received an
opinion of counsel knowledgeable in federal securities law, in form and
substance reasonably satisfactory to QuadraMed and accompanied by such
supporting documents as QuadraMed may reasonably request, to the effect that
registration under the Securities Act is not required in connection with such
disposition or as otherwise provided below. QuadraMed shall be entitled to give
stop transfer instructions to its transfer agent with respect to the QuadraMed
Shares in order to enforce the foregoing restrictions.

(b) The certificate or certificates representing the QuadraMed
Shares issued to RHP at the Closing shall bear the following legend restricting
transfer:

"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. NOTWITHSTANDING THE FOREGOING,
THESE SECURITIES MAY BE TRANSFERRED TO THE PARTNERS OF RESOURCE HEALTH PARTNERS,
L.P. ("RHP") OR THE PARTNERS OF THE GENERAL PARTNER OF RHP WITHOUT AN OPINION OF
COUNSEL, PROVIDED THAT SUCH TRANSFER IS ACCORDANCE WITH THE TERMS AND CONDITIONS
SET FORTH IN THE ACQUISITION AGREEMENT AND PLAN OF MERGER DATED DECEMBER 29,
1997 AMONG QUADRAMED CORPORATION, RHP AND THE OTHER PARTIES THERETO."

(c) Notwithstanding anything to the contrary herein contained,
the parties acknowledge that RHP intends to transfer the QuadraMed Shares
(including any such shares released from escrow and any shares received in
payment of indemnification claims under Section 10.3) to the Partners and the
General Partner intends to further transfer QuadraMed Shares it receives to its
partners, from time to time after the Closing, and that one or more of such
transferees may not be "accredited investors" within the meaning of Rule 501(a)
of the Securities Act.

<PAGE> 40

(d) RHP agrees that, as a condition to transferring any QuadraMed
Shares to a transferee, (i) RHP will require such transferee to provide an
investment representation letter in substantially the form of Exhibit G to this
Agreement (the "Investment Representation Letter") and (ii) RHP will provide to
QuadraMed and, to the extent required, to QuadraMed's transfer agent, a written
notice from RHP requesting such transfer, and representing that (A) the
transferee is a partner of RHP or RHP GP, L.P., (B) the transfer does not
require registration under the Securities Act, and (C) the transferee has
executed and delivered to RHP a copy of the Investment Representation Letter, a
copy of which shall be attached to such notice. RHP may also, at its option,
obtain a signed Registration Rights Agreement (or counterpart signature page)
from each transferee, and QuadraMed agrees each such transferee shall thereupon
become a party to such agreement, all on the terms of the Registration Rights
Agreement. QuadraMed agrees that such transfers may be made, that it shall not
issue any stop transfers, and that it will not require any opinion in respect of
such transfers. QuadraMed shall, and will instruct the transfer agent to, cause
such transfer of QuadraMed Shares to be effected and record such transfer in the
names of each transferee and will provide RHP with such copies of QuadraMed's
public filings as RHP may reasonably request.

4.9. Third Party Acquisitions.

(a) RHP agrees that neither it nor any of its employees or
partners shall, and it shall direct and use its reasonable best efforts to cause
its agents and representatives (including the Company Advisors), not to directly
or indirectly, initiate, solicit, encourage or otherwise facilitate any
inquiries in respect of, or the making of any proposal for, a Third Party
Acquisition. RHP further agrees that neither it nor any of its employees shall,
and it shall direct and use its reasonable best efforts to cause all Company
Advisors not to, directly or indirectly, engage in any negotiations concerning,
or provide any confidential information or data to, or have any discussions
with, any Third Party relating to the proposal of a Third Party Acquisition or
other wise facilitate any effort or attempt to make or implement a Third Party
Acquisition; provided, however, that if at any time prior to the Effective Time,
the Advisory Committee of RHP determines in good faith, after consultation with
outside counsel, that it is necessary to do so in order to comply with its
fiduciary duties to RHP's Limited Partners under applicable law, RHP may, in
response to an inquiry, a proposal or offer for a Third Party Acquisition which
was not solicited subsequent to the date hereof, (x) furnish only such
information with respect to RHP to any such person pursuant to a customary
confidentiality agreement as was delivered to QuadraMed prior to the execution
of this Agreement and (y) participate in the discussions and negotiations
regarding such inquiry, proposal or offer. RHP shall immediately cease and cause
to be terminated any existing activities, discussions or negotiations with any
Third Parties conducted heretofore with respect to any of the foregoing. RHP
shall take the necessary steps to promptly inform all Company Advisors of the
obligations undertaken in this Section 4.9. RHP agrees to notify QuadraMed
promptly if (i) any inquires relating to or proposals for a Third Party
Acquisition are received by RHP or any of the Company Advisors, (ii) any
confidential or other non-public information about RHP is requested from RHP or
any of the Company Advisors, or (iii) any negotiations or discussions in
connection with a possible Third Party Acquisition are sought to

<PAGE> 41

be initiated or continued with RHP or any of the Company Advisors indicating, in
connection with such notice, subject to the fiduciary duties of the Advisory
Committee of RHP under applicable law, the principal terms and conditions of any
proposals or offers, including the identity of the offering party, and
thereafter shall keep QuadraMed informed in writing, on a reasonably current
basis, on the status and terms of any such proposals or offers and the status of
any such negotiations or discussions.

(b) Except as permitted by this Section 4.9(b), the Advisory
Committee of RHP shall not withdraw its recommendation of the Mergers and other
transactions contemplated hereby or approve or recommend, or cause RHP to enter
into any agreement with respect to, any Third Party Acquisition. Notwithstanding
the preceding sentence, if the Advisory Committee of RHP determines in its good
faith judgment, after consultation with outside counsel, that it is necessary to
do so in order to comply with its fiduciary duties to RHP's Limited Partners
under applicable law, the Advisory Committee may withdraw or alter its
recommendation of the Mergers and the other transactions contemplated hereby, or
approve or recommend or cause RHP to enter into an agreement with respect to a
Superior Proposal, but in each case only (i) after providing written notice to
QuadraMed (a "Notice of Superior Proposal") advising QuadraMed that the Advisory
Committee has received a Superior Proposal, specifying the material terms and
conditions of such Superior Proposal and (ii) if QuadraMed does not, within four
(4) business days (or within two (2) business days with respect to any amendment
to any Superior Proposal which was noticed at least four (4) days prior to such
amendment) after QuadraMed's receipt of the Notice of Superior Proposal, make an
offer which the Advisory Committee of RHP determines in its good faith judgment
(based on the advice of the financial advisor of RHP) to be as favorable to
RHP's Limited Partners as such Superior Proposal; provided, however, that RHP
shall not be entitled to enter into any agreement with respect to a Superior
Proposal unless this Agreement is concurrently terminated by its terms pursuant
to Section 11.1(g)(i).

4.10. Pooling of Interests. RHP acknowledges that the Mergers are
intended to be pooling of interests transactions. RHP agrees that it shall not
transfer any of the QuadraMed Shares issued in the Mergers, other than a
transfer to the partners of RHP or RHP GP, L.P. in accordance with Section 4.8,
until the publication by QuadraMed of financial results that include at least
thirty (30) days of combined operations of QuadraMed and the Subsidiaries.
QuadraMed shall notify RHP promptly upon the publication of such financial
results.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES
OF QUADRAMED, SUB A AND SUB B

Except as disclosed in a document of even date herewith and
delivered by QuadraMed, Sub A and Sub B to the Company prior to the execution
and delivery of this Agreement and referring to the representations and
warranties in this Agreement (the

<PAGE> 42

"QuadraMed Disclosure Schedule"), QuadraMed, Sub A and Sub B represent and
warrant, jointly and severally, to the Company as follows:

5.1. Organization and Good Standing. QuadraMed, Sub A and Sub B are
corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware and have full corporate power and authority to
own, lease and operate their respective properties and carry on their respective
businesses and to enter into, deliver and perform their respective obligations
under and to consummate the transactions contemplated by this Agreement.
QuadraMed, Sub A and Sub B are qualified to do business and are in good standing
in each jurisdiction where the character or location of the employment of
personnel or the nature of the business and activities conducted by them, as the
case may be, require such qualification, except in such jurisdiction where the
failure to be so qualified and in good standing would not be material to the
business of QuadraMed and its subsidiaries, taken as a whole. QuadraMed, Sub A
and Sub B have delivered to RHP true and complete copies to their respective
charters and bylaws.

5.2. Capitalization of QuadraMed, Sub A and Sub B

(a) Except as described in this Section 5.2 or Schedule 5.2, the
authorized and outstanding capital stock of QuadraMed is as set forth in the
section entitled "Description of Capital Stock" in QuadraMed's Prospectus dated
October 21, 1997 as filed with the Securities and Exchange Commission and as
previously delivered to RHP. There are no other outstanding shares of capital
stock or voting securities of QuadraMed other than shares of QuadraMed Common
Stock issued after October 21, 1997 upon the exercise of options or warrants.
All outstanding shares of QuadraMed have been duly authorized, validly issued,
fully paid and are nonassessable and free of any liens or Encumbrances other
than any liens or Encumbrances created by or imposed upon the holders thereof.
Except for options or warrants that were outstanding as of October 21, 1997,
there are no other options, warrants, calls, rights, commitments or agreements
of any character to which QuadraMed is a party or by which it is bound
obligating QuadraMed to issue, deliver, sell, repurchase or redeem, or cause to
be issued, delivered, sold, repurchased or redeemed, any shares of the capital
stock of QuadraMed or obligating QuadraMed to grant, extend or enter into any
such option, warrant, call, right, commitment or agreement. The shares of
QuadraMed Common Stock to be issued pursuant to the Mergers will be duly
authorized, validly issued, fully paid, and non-assessable.

(b) As of the date of the Closing, the authorized capital stock
of Sub A consists of 1,000 shares of Sub A Common Stock, par value $0.001 and
the authorized capital stock of Sub B consists of 1,000 shares of Sub B Common
Stock, par value $0.001, all of which shares are issued and outstanding and
owned beneficially and of record by QuadraMed. All of the Sub A Common Stock and
Sub B Common Stock outstanding on the date hereof has been duly authorized and
validly issued and is fully paid and nonassessable. All of the outstanding Sub A
Common Stock and Sub B Common Stock is, and immediately prior to the Effective
Time will be, owned by QuadraMed.

<PAGE> 43

5.3. Authority.

(a) QuadraMed, Sub A and Sub B have the necessary corporate power
and authority to enter into and deliver this Agreement, to perform their
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by QuadraMed, Sub A and Sub B have been duly
authorized by the Board of Directors of QuadraMed, Sub A and Sub B in accordance
with applicable law. No further corporate action is necessary on the part of
QuadraMed, Sub A or Sub B to make this Agreement valid and binding upon
QuadraMed, Sub A and Sub B in accordance with its terms. This Agreement has been
duly and validly authorized, executed and delivered by QuadraMed, Sub A and Sub
B and this Agreement (assuming due authorization, execution and delivery by the
other parties hereto) constitutes the legal, valid and binding obligation of
QuadraMed, Sub A and Sub B, enforceable in accordance with its terms (except as
such enforcement may be limited by applicable bankruptcy, insolvency, moratorium
or similar laws affecting the rights of creditors generally or by general
principles of equity). Neither the execution, delivery nor performance of this
Agreement by QuadraMed, Sub A or Sub B, nor the consummation of the transactions
contemplated hereby, nor compliance by QuadraMed, Sub A or Sub B with the terms
and provisions of this Agreement nor the Certificates of Merger will result in a
violation or breach of any term or provision of QuadraMed's, Sub A's or Sub B's
Certificates of Incorporation or Bylaws, or of any statute, rule or regulation
applicable to QuadraMed, Sub A or Sub B or the business, properties, assets or
personnel of QuadraMed and its subsidiaries, taken as a whole, or conflict with
or constitute a violation or breach of, or a default under (or an event which,
with the passage of time or the giving of notice, or both, would constitute a
default under), nor give any party a right to accelerate the due date of any
indebtedness or obligation under, any indenture, mortgage, deed of trust,
contract or agreement to which QuadraMed, Sub A or Sub B is a party or to which
the properties or assets of QuadraMed and its subsidiaries, taken as a whole are
subject, or any instrument, judgment, decree, writ or other restriction to which
either QuadraMed, Sub A or Sub B is a party or by which the business,
properties, assets or personnel of QuadraMed and its subsidiaries, taken as a
whole are bound, except where such conflict, violation, breach or default,
either individually or in the aggregate, would not result in a Material Adverse
Effect.

(b) Except for filing the Certificates of Merger with the
Delaware and Pennsylvania Secretaries of State (as appropriate), filing any
necessary qualification or withdrawal documents with state authorities,
complying with any federal or state securities law requirements and filing a
Notification Form for Listing of Additional Shares with Nasdaq National Market,
neither QuadraMed nor the Merger Subs are required to submit any notice, report
or other filing with any federal, state or local governmental authority in
connection with the execution or delivery or performance by QuadraMed, Sub A and
Sub B of this Agreement or the consummation of the transactions contemplated
herein. QuadraMed does not have Annual Net Sales or Total Assets of $100,000,000
or more. Capitalized terms used in the preceding sentence shall have the
meanings given to them under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules promulgated thereunder.

<PAGE> 44

5.4. QuadraMed Shares. As of the Closing, the QuadraMed Shares have been
duly reserved for delivery pursuant to the terms of this Agreement and will,
when so delivered, be duly authorized, validly issued, fully paid and
nonassessable shares and will be free and clear of all liens, charges,
restrictions, claims, preemptive rights and Encumbrances.

5.5. QuadraMed SEC Filings. QuadraMed has furnished to RHP a true and
complete copy of the QuadraMed SEC Filings made since September 30, 1997, and,
prior to the Effective Time, QuadraMed shall promptly furnish to RHP a true and
complete copy of any additional QuadraMed SEC Filings. The QuadraMed SEC
Filings, true, correct and complete copies of which have been furnished to RHP,
have been duly filed, were in substantial compliance with the requirements of
their respective report forms, were complete and correct in all material
respects as of the dates at which the information under the respective forms
were furnished and contained, as of such date, do not contain an untrue
statement of a material fact nor omit to state a material fact necessary in
order to make the statements made therein not misleading, and since September
30, 1997, there has not been any Material Adverse Effect. The consolidated
financial statements of QuadraMed and the related notes and schedules included
in the QuadraMed SEC Filings comply fully with the requirements of the Exchange
Act and present fairly the consolidated financial position of Quadramed in
accordance with generally accepted accounting principles consistently applied,
as of the dates indicated, and the results of its operations and changes in
financial position for the periods therein specified (subject, in the case of
unaudited interim financial statements, to year-end adjustments). The QuadraMed
SEC Filings constitute all of the documents required by applicable securities
laws to be filed by it and all such reports have been true, complete and correct
in all material respects.

5.6. Absence of Certain Changes. Except as disclosed on Schedule 5.6 or
in the QuadraMed SEC Filings and since September 30, 1997 (the "QuadraMed
Balance Sheet Date"), QuadraMed has conducted its business in the ordinary
course consistent with past practice and there has not occurred: (i) any change,
event or condition (whether or not covered by insurance) that has resulted in,
or might reasonably be expected to result in, a material adverse effect to
QuadraMed; (ii) any acquisition, sale or transfer of any material asset of
QuadraMed or any of its subsidiaries other than in the ordinary course of
business and consistent with past practice; (iii) any material change in
accounting methods or practices (including any change in depreciation or
amortization policies or rates) by QuadraMed or any revaluation by QuadraMed of
any of its assets; (iv) any declaration, setting aside, or payment of a dividend
or other distribution with respect to the shares of QuadraMed, or any direct or
indirect redemption, purchase or other acquisition by QuadraMed of any of its
shares of capital stock; or (v) any negotiation or agreement by QuadraMed or any
of its subsidiaries to do any of the things described in the preceding clauses
(i) through (iv) (other than negotiations with RHP and its representatives
regarding the transactions contemplated by this Agreement).

5.7. Absence of Undisclosed Liabilities. Except as disclosed on Schedule
5.7 QuadraMed has no obligations or liabilities of any nature (matured or
unmatured, fixed or

<PAGE> 45

contingent) other than (i) those set forth or adequately provided for in the
Balance Sheet included in QuadraMed's Quarterly Report on Form 10-Q for the
period ended September 30, 1997 (the "QuadraMed Balance Sheet"), (ii) those
incurred in the ordinary course of business and not required to be set forth in
the QuadraMed Balance Sheet under generally accepted accounting principles and
which are not material, and (iii) those incurred in the ordinary course of
business since the QuadraMed Balance Sheet Date and consistent with past
practice and would not have a material adverse effect.

5.8. Restrictions on Business Activities. There is no material
agreement, judgment, injunction, order or decree binding upon QuadraMed or any
of its subsidiaries which has or reasonably could be expected to have the effect
of prohibiting or materially impairing any current or future business practice
of QuadraMed or any of its subsidiaries, any acquisition of property by
QuadraMed or any of its subsidiaries or the conduct of business by QuadraMed or
any of its subsidiaries as currently conducted or as proposed to be conducted by
QuadraMed or any of its subsidiaries.

5.9. Legal and Regulatory Matters. Except as disclosed in QuadraMed's
SEC Filings, (i) there is no suit, action, arbitration, known governmental
investigation or other proceeding, nor any order, decree or judgment pending or,
to the knowledge of QuadraMed, threatened by or against QuadraMed or any of its
properties, assets or business, or the transactions contemplated hereby, which
if determined adversely could reasonably be expected to have a Material Adverse
Effect; (ii) there are no judgments, decrees or orders enjoining QuadraMed in
respect of, or the effect of which is to prohibit any business practice or the
acquisition of any property or the conduct of business in any area that is
material to the business of QuadraMed; (iii) QuadraMed has complied and is
complying with all laws, ordinances, treaties and governmental rules, orders and
regulations applicable to it or its properties, assets, personnel or business,
non-compliance with which could reasonably be expected to have a Material
Adverse Effect; and (iv) QuadraMed has obtained all material Licenses necessary
for the ownership of its properties and the conduct of its business as currently
conducted, and all such Licenses are currently in full force and effect.

5.10. Broker's Fees. There are no broker's or finder's fees or
obligations due to persons engaged by QuadraMed, Sub A or Sub B or any of their
employees, officers or directors in connection with the transactions
contemplated by this Agreement, except for fees and expenses of its counsel,
accountants and investment bankers.

5.11. Material Misstatements or Omissions. The statements,
representations and warranties of QuadraMed, Sub A and Sub B contained in this
Agreement (including the schedules hereto) taken together, do not contain any
untrue statement of a material fact and do not state a material fact necessary
to make the statements or facts contained herein or therein, in light of the
circumstances made, not misleading.

<PAGE> 46

5.12. Eligibility to Use Form S-3. QuadraMed currently meets the
"registrant requirements" set forth in the general instructions to Form S-3
under the Securities Act of 1933, as amended.

ARTICLE VI.

COVENANTS OF QUADRAMED, SUB A AND SUB B

QuadraMed and the Merger Subs hereby covenant and agree as follows:

6.1. Conduct of QuadraMed's Business. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, QuadraMed agrees (except to the extent
expressly contemplated by this Agreement, disclosed on any schedule hereto, or
as consented to in writing by RHP), to carry on its business and its
subsidiaries' business in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted, to pay and to cause its
subsidiaries to pay debts and Taxes when due subject to good faith disputes over
such debts or taxes, to pay or perform other obligations when due, and to use
all reasonable efforts consistent with past practice and policies to preserve
intact its and its subsidiaries' present business organizations, use its best
efforts consistent with past practice to keep available the services of its and
its subsidiaries' present officers and key employees and use its best efforts
consistent with past practice to preserve its and its subsidiaries'
relationships with customers, suppliers, distributors, licensors, licensees, and
others having business dealings with it or its subsidiaries, to the end that its
and its subsidiaries' goodwill and ongoing businesses shall be unimpaired at the
Effective Time. QuadraMed agrees to promptly notify RHP of any event or
occurrence not in the ordinary course of its or its subsidiaries' business, and
of any event which could have a material adverse effect on QuadraMed's business,
taken as a whole. Notwithstanding anything in this Section 6.1 to the contrary,
QuadraMed may negotiate and consummate acquisitions of businesses or assets
without providing notice to or obtaining the consent of RHP. Without limiting
the foregoing, except as expressly contemplated by this Agreement, QuadraMed
shall not do, cause or permit any of the following, or allow, cause or permit
any of its subsidiaries to do, cause or permit any of the following, without the
prior written consent RHP:

(a) Charter Documents. Cause or permit any amendments to
its Certificate of Incorporation or Bylaws;

(b) Dividends; Changes in Capital Stock. Declare or pay
any dividends on or make any other distributions (whether in cash, stock or
property) in respect of any of its capital stock, or split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or repurchase or otherwise acquire, directly or indirectly, any
shares of its capital stock except from former employees, directors and
consultants in accordance

<PAGE> 47

with agreements providing for the repurchase of shares in connection with any
termination of service to it or its subsidiaries; or

(c) Other. Take, or agree in writing or otherwise to take,
any of the actions described in Sections 6.1(a) and (b) above, or any action
which would make any of its representations or warranties contained in this
Agreement untrue or incorrect or prevent it from performing or cause it not to
perform its covenants hereunder.

6.2. Further Efforts.

(a) QuadraMed agrees to use reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the Mergers and the other transactions contemplated hereby in
accordance with the terms of this Agreement. In case at any time any further
action is necessary or desirable to carry out the purposes of this Agreement,
QuadraMed will use reasonable efforts to effectuate all such action.

(b) As soon as reasonably practicable after the date hereof, and
in any event on or prior to the Closing, QuadraMed will use reasonable efforts
to obtain the consents of all necessary governmental entities to the Mergers and
the continued operation by the Company of its business, properties, assets,
leaseholds, licenses, contracts and agreements.

6.3. Confidentiality. In the event of the termination of this Agreement,
QuadraMed and its representatives shall keep all information with respect to the
Company which has been disclosed to QuadraMed pursuant to this Agreement
confidential in accordance with the terms of the Confidentiality Agreement
previously entered into by and between RHP and QuadraMed and shall promptly
return to RHP all written information provided to QuadraMed by RHP.

6.4. Public Announcement. So long as this Agreement is in effect,
QuadraMed shall not, and shall cause its Affiliates not to, issue or cause the
publication of any press release or any other public announcement (including,
without limitation, disclosure to employees) with respect to the Mergers or any
other transaction contemplated by this Agreement without the prior review, and
consultation with, RHP with respect to such press release or other public
announcement, unless required by law. Notwithstanding the foregoing, RHP
acknowledges and agrees that, after consulting with RHP, QuadraMed may issue a
press release announcing the execution of this Agreement and may make any
filings required pursuant to the Exchange Act, which document shall be presented
to RHP for review and comment and which shall be reasonably satisfactory to RHP
prior to issuance or filing.

6.5. Benefits for Retained Employees. QuadraMed agrees to cover (or
cause to be covered) each employee (or their dependents) of the Company who
accepts or continues employment with the Surviving Corporation effective as of
and from the Closing under QuadraMed's Employee Benefit Plans that are in
existence for comparably situated employees

<PAGE> 48

as of such date. Such employees shall be granted service credit for their period
of employment with the Company and its Affiliates for eligibility to participate
and vesting purposes in the applicable Employee Benefit Plans maintained by
QuadraMed where such vesting is allowed by law, including, without limitation,
disability programs and vacation. Without limiting the foregoing, such employees
and their dependents shall become eligible to participate in QuadraMed's group
medical plan as of the Closing and shall be granted service credit for their
period of employment with the Company and its Affiliates, if they are employed
in a position or status that is eligible to participate in such group medical
plan.

6.6. Subsequent Events. QuadraMed shall promptly, and in any event prior
to the Closing, advise RHP in writing of the occurrence of any event or the
existence of any state of facts of which QuadraMed obtains knowledge which in
any material respect would render any representation or warranty of QuadraMed
hereunder inaccurate or which would preclude satisfaction of any condition
contained in Article VII or Article IX of this Agreement; provided, that no such
notification shall affect any such representation, warranty or condition.

6.7. Treatment of Mergers as Reorganization. QuadraMed, Sub A and Sub B
shall not take, and shall cause their Affiliates not to take, such action that
would cause the acquisition of Resource Holdings and FRA to fail to qualify as a
Reorganization within the meaning of Section 368 of the Code.

ARTICLE VII.

GENERAL CONDITIONS PRECEDENT

The obligations of each party hereto to consummate the Mergers and the
other transactions contemplated by this Agreement shall be subject to
fulfillment and satisfaction on or prior to the Closing of each of the following
conditions:

7.1. No Injunctions. No injunction or restraining or other order issued
by a court of competent jurisdiction which prohibits the consummation of the
transactions contemplated, including, without limitation, the issuance of the
QuadraMed Shares by this Agreement shall be in effect (each party agreeing to
use reasonably 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.

7.2. No Governmental Proceedings. No action will have been taken, and no
statute, rule or regulation will have been enacted, by any state or federal
government agency that would render the consummation of the Mergers illegal.

7.3. Governmental Approvals. All governmental filings or approvals
required in connection with the consummation of the transactions contemplated by
this Agreement,

<PAGE> 49

including, without limitation, compliance with federal and state securities
laws, shall have been made or received.

7.4. Escrow Agreement. The parties thereto shall have executed and
delivered the Escrow Agreement.

7.5. Simultaneous Mergers. The Mergers shall have occurred
simultaneously at the Closing.

ARTICLE VIII.

CONDITIONS PRECEDENT TO QUADRAMED'S, SUB A'S AND SUB B'S
OBLIGATIONS TO CLOSE

The obligations of QuadraMed, Sub A and Sub B to consummate the
transactions contemplated by this Agreement are subject to the fulfillment at or
prior to the Closing of each of the following conditions (unless waived pursuant
to Section 11.4 hereof):

8.1. Certificates of RHP. The representations and warranties of RHP
under Article III shall have been true in all material respects when made and
shall be true in all material respects as of the Closing with the same effect as
though made at such time, except for changes occurring or arising after the date
of this Agreement in carrying out the transactions contemplated herein or which
have been approved in writing by QuadraMed or in the ordinary course of
business. At the Closing, RHP shall have delivered a certificate, signed by an
executive officer of RHP, dated as of the Closing Date, certifying that RHP has
materially performed all obligations and complied with all covenants and
conditions required by this Agreement to be performed or complied with by it at
or prior to the Closing.

8.2. No Material Adverse Effect. Since October 31, 1997, the Company
shall not have experienced any Material Adverse Effect.

8.3. Legal Opinion of RHP's Counsel. QuadraMed, Sub A and Sub B shall
have received opinions, dated as of the Closing, of Proskauer Rose LLP, counsel
for RHP, and Crawford, Wilson, Ryan & Agulnick, special Pennsylvania counsel for
Resource Holdings, substantially in form and substance set forth as Exhibits H
and I hereto, respectively.

8.4. Certified Resolutions. RHP shall have delivered to QuadraMed, Sub A
and Sub B true and complete copies of the resolutions of its Advisory Committee
and the Boards of Directors of Resource Holdings and FRA, pursuant to which the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby were duly and validly authorized, adopted and
approved, certified by the a proper officer and to be in full force and effect
as of the Closing.

<PAGE> 50

8.5. Employment Agreements. Employment agreements attached in the form
of Exhibit J shall be executed and delivered at the Closing by Craig Camp,
Eugene Hoekendorf, Mark Wallis, Joel Weinberg and Joseph Riley.

8.6. Proceedings Satisfactory to Counsel. All proceedings taken by the
Company and the Partners and all instruments executed and delivered by the
Company and the Partners on or prior to the Closing in connection with the
transactions contemplated herein shall be reasonably satisfactory in form and
substance to the counsel for QuadraMed, Sub A and Sub B.

ARTICLE IX.

CONDITIONS PRECEDENT TO RHP'S
OBLIGATIONS TO CLOSE

The obligations of RHP and the Partners to consummate the Mergers and
the other transactions contemplated by this Agreement are subject to the
fulfillment and satisfaction at or prior to the Closing of each of the following
conditions (unless waived pursuant to Section 11.4 hereof):

9.1. Certificates of QuadraMed, Sub A and Sub B. The representations and
warranties of QuadraMed, Sub A and Sub B under Article V shall have been true in
all material respects when made and shall be true in all material respects as of
the Closing with the same effect as though made at such time, except for changes
occurring or arising after the date of this Agreement in carrying out the
transactions contemplated herein. QuadraMed, Sub A and Sub B shall have
performed all obligations and complied with all covenants and conditions
required by this Agreement to be performed or complied with by them at or prior
to the Closing, and QuadraMed, Sub A and Sub B shall have delivered to the
Company certificates of QuadraMed, Sub A and Sub B, dated as of the Closing and
signed by an executive officer of QuadraMed, Sub A and Sub B, certifying that
QuadraMed, Sub A and Sub B have materially performed all obligations and
complied with all covenants and conditions required by this Agreement to be
performed or complied with by them at or prior to Closing.

9.2. Certified Resolutions. QuadraMed, Sub A and Sub B shall have
delivered to the Company true and complete copies of the resolutions of their
respective Boards of Directors pursuant to which the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby were
duly and validly authorized, adopted and approved, certified by the Secretary of
each and to be in full force and effect as of the Closing.

<PAGE> 51

9.3. Legal Opinion. RHP shall have received an opinion, dated as of the
Closing, of Brobeck, Phleger & Harrison, LLP, counsel for QuadraMed, Sub A and
Sub B substantially in form and substance set forth on Exhibit K hereto.

9.4. Registration Rights Agreement. The parties shall have executed and
delivered the Registration Rights Agreement.

9.5. Employment Agreements. Employment agreements attached in the form
of Exhibit J shall be executed at the Closing by Craig Camp, Eugene Hoekendorf,
Mark Wallis, Joel Weinberg and Joseph Riley.

9.6. Closing Considerations and Expenses. QuadraMed shall have (a)
delivered Closing Consideration A and Closing Consideration B to RHP in
accordance with Article II, including amounts to be placed into escrow pursuant
to Section 10.2(c), and (b) paid all expenses and liabilities referred to in
Sections 2.14 and 2.15 to be paid at the Closing.

9.7. Proceedings Satisfactory to Counsel. All proceedings taken by
QuadraMed, Sub A and Sub B and all instruments executed and delivered by
QuadraMed, Sub A and Sub B on or prior to the Closing in connection with the
transactions contemplated herein shall be reasonably satisfactory in form and
substance to the counsel for RHP and the Partners.

ARTICLE X.

SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATIONS

10.1. Survival of Representations, Etc.

(a) RHP Survival. All representations and warranties and all
covenants of RHP 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 one (1) year from the date
of Closing (the "RHP Survival Period"), at which time they shall expire;
provided, however, that, to the extent a claim is made in writing by QuadraMed
pursuant to Section 10.2 prior to the expiration with respect to any breach of
any such representation, warranty or covenant, the RHP Survival Period with
respect to such claim shall be extended until such claim is finally determined
or settled, whereupon such representation, warranty or covenant will expire.

(b) QuadraMed Survival. QuadraMed's, Sub A's and Sub B's
representations, warranties and covenants contained in this Agreement will
survive the Closing and remain in full force and effect, regardless of any
investigation made by or on behalf of the parties to this Agreement, in the case
of representations and warranties, until one (1) year from the date of Closing,
and, in the case of covenants, for the duration of the covenants in accordance
with their terms (the "QuadraMed Survival Period"), at which time they shall
expire; provided, however, that to the extent a claim is made in writing by RHP
pursuant to

<PAGE> 52

Section 10.3 prior to the expiration with respect to any breach of any such
representation, warranty or covenant, the QuadraMed Survival Period with respect
to such claim shall be extended until such claim is finally determined or
settled whereupon such representation, warranty or covenant will expire.

10.2. Indemnification by RHP.

(a) RHP, to the extent of the Escrow Shares, will indemnify and
hold harmless QuadraMed, Sub A and Sub B, and their respective officers,
directors, agents and Affiliates (each a "QuadraMed Indemnified Person" and,
collectively, the "QuadraMed Indemnified Persons"), from and against any and all
actions, causes of actions, losses, costs, damages, liabilities and expenses
including, without limitation, reasonable out-of-pocket legal fees and expenses
("Losses"), arising out of or relating to any misrepresentation or breach of or
default in connection with any of the representations, warranties and covenants
given or made by RHP, Resource Holdings or FRA in this Agreement, in any exhibit
or schedule hereto or any certificate, document or instrument delivered by or on
behalf of RHP pursuant hereto. Any claim for indemnification hereunder must be
made in writing on or prior to the expiration of the RHP Survival Period;
provided, however, that any claim made prior to such expiration shall continue
until such claim is finally determined or settled.

(b) Notwithstanding the foregoing, RHP shall have no liability
with respect to the matters described in paragraph (a) above unless and until
the aggregate amount of Losses for which the QuadraMed Indemnified Persons are
entitled to indemnification exceeds $200,000 (the "Threshold Amount"). At such
time as the aggregate Losses exceed the Threshold Amount, the QuadraMed
Indemnified Persons shall be indemnified to the full extent of all such Losses
in excess of the Threshold Amount, to the extent of the Escrow Shares.
Notwithstanding the foregoing, any Losses for which the QuadraMed Indemnified
Persons are entitled to indemnification relating to a breach of Section 3.11(b)
hereof shall not be subject to the Threshold Amount for any purpose hereof.

(c) As security for the obligation to indemnify the QuadraMed
Indemnified Persons hereunder, concurrently with the payment of the Closing
Considerations by QuadraMed, RHP shall deposit the Escrow Shares with the Escrow
Agent pursuant to the terms of the Escrow Agreement, as provided in Section
2.10.

(d) Anything herein to the contrary notwithstanding, (i) neither
RHP nor any Partner or other Person shall be liable to any QuadraMed Indemnified
Person for any Losses for which a claim is made pursuant to this Section 10.2 or
otherwise other than to the extent of the Escrow Shares, and (ii) any and all
Losses to be indemnified pursuant to this Section 10.2 shall be limited to and
paid solely from the Escrow Shares. Any Losses to be indemnified pursuant to
this Section 10.2 shall be reimbursed by the payment of the appropriate number
of Escrow Shares, calculated as provided herein, subject to the limitation in
the preceding sentence. To the extent any Loss is to be reimbursed by the
payment of Escrow Shares, the number of Escrow Shares to be paid shall be
calculated by dividing the

<PAGE> 53

amount of such claim by the QuadraMed Stock Value. For the purposes of this
Section 10.2(d), in the event QuadraMed is acquired by merger or otherwise, the
term "Escrow Shares" shall include all amounts received in exchange for or in
respect of the Escrow Shares.

(e) QuadraMed Indemnified Persons shall not be entitled to
recover under Section 10.2 to the extent the subject matter of the claim is
reimbursed by insurance proceeds (including title insurance) received by
QuadraMed, Surviving Corporation A, Surviving Corporation B or any other
Subsidiary.

(f) The amount of any recovery by any QuadraMed Indemnified
Person pursuant to Section 10.2 shall be net of any actual Tax benefits inuring
to such QuadraMed Indemnified Person to the extent such Tax benefits result from
such claim.

10.3. Indemnification by QuadraMed, Sub A and Sub B. QuadraMed, Sub A
and Sub B will indemnify and hold harmless RHP, each of its Partners and their
respective officers, directors, agents and Affiliates ("RHP Indemnified
Persons") from and against any and all Losses arising out of or relating to any
misrepresentation or breach of or default in connection with any of the
representations, warranties and covenants given or made by QuadraMed, Sub A and
Sub B in this Agreement, in any exhibit or schedule hereto or any certificate,
document or instrument delivered by or on behalf of QuadraMed, Sub A or Sub B
pursuant hereto.

10.4. Procedure for Indemnification of Claims. If a QuadraMed
Indemnified Person or a RHP Indemnified Person (referred to herein as the
"Indemnified Person") shall have a claim for which such Indemnified Person seeks
indemnification pursuant to this Article X, the Indemnified Person shall give
prompt written notice of such claim to RHP (in the case of a claim by a
QuadraMed Indemnified Person), or to QuadraMed (in the case of a claim by a RHP
Indemnified Person) (referred to herein as the "Indemnifying Person"), including
in such notice a brief description of the facts upon which such claim is based
and, to the extent known, the amount thereof. The giving of such notice shall
not be condition precedent to indemnification hereunder; however, failure to
give prompt notice shall reduce the Indemnified Person's recovery from the
Indemnifying Person by an amount equal to the damages, costs and expenses
(including attorneys fees) or other Losses caused by such delay. If, after the
amount of the claim is specified in writing by the Indemnified Person, the
Indemnifying Person objects to any such claim, it may give written notice to the
Indemnified Person within thirty (30) days of the later of receipt of the
Indemnified Person's notice of claim or the specification by the Indemnified
Person of the amount of the claim, advising the Indemnified Person of its
objection. If no such notice is timely received from the Indemnifying Person by
the Indemnified Person, the Indemnified Person will be entitled to
indemnification hereunder in the amount of the Loss arising out of the claim
specified in the notice of claim. If the Indemnifying Person advises the
Indemnified Person within such thirty (30) day period that it objects to the
claim, the Indemnified Person and the Indemnifying Person shall promptly meet
and use their good faith efforts to settle the dispute. If the Indemnified
Person and the Indemnifying Person are unable to reach agreement within thirty

<PAGE> 54

(30) days after the Indemnifying Person objects to the claim, then the disputed
portion of the claim shall be submitted to arbitration in accordance with
Section 12.1. If the Arbitrators shall determine that the Indemnified Person is
entitled to indemnification with respect to the dispute submitted, the
Indemnified Person will be entitled to indemnification hereunder in the amount
determined by such Arbitrators.

10.5. Settlement or Compromise. Any settlement or compromise made or
caused to be made by the Indemnified Person or, the Indemnifying Person, as the
case may be, of any third party claim, suit, action or proceeding of the kind
referred to in Section 10.4 shall also be binding upon the Indemnifying Person
or the Indemnified Person, 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, but no such settlement or compromise
may be agreed to without the consent of both the Indemnified Person and the
Indemnifying Person, such consent not to be unreasonably withheld or delayed.
The Indemnified Person will give the Indemnifying Person 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 Person 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.

10.6. Third Party Claims. If a claim by a third party is made against an
Indemnified Person for which the Indemnified Person is entitled to
indemnification under this Article X, the Indemnified Person shall promptly
notify the Indemnifying Person in writing of such claim. Such notice shall set
forth such information with respect to such claim as is then available to the
Indemnified Person. In the event the Indemnifying Person elects to undertake to
conduct and control, through counsel of its own choosing, and at its sole risk
and expense, the good faith settlement and/or defense of such claim, the
Indemnified Person shall cooperate fully with the Indemnifying Person in
connection therewith; provided: (a) the Indemnified Person shall be entitled to
participate in such settlement or defense through counsel of its own choosing,
provided that the fees and expense of such counsel shall be fully borne by the
Indemnified Person, and (b) the Indemnifying Person shall have, on a timely
basis, notified the Indemnified Person in writing of its election to undertake
the settlement or defense and confirmed in writing the obligation of the
Indemnifying Person to indemnify the Indemnified Person for the liability
asserted in such claim. The Indemnifying Person shall obtain the written consent
of the Indemnified Person, which consent shall not be unreasonably withheld,
prior to ceasing to defend, settle or otherwise dispose of such claim if as a
result thereof the Indemnified Person would become subject to injunctive or
other equitable relief or the business of the Indemnified Person would be
materially adversely affected in any manner. So long as the Indemnifying Person
is reasonably contesting any such claim in good faith, the Indemnified Person
shall fully cooperate with the Indemnifying Person in the defense or settlement
of such claim as is reasonably required by the Indemnifying Person, and the
Indemnified Person shall not pay or settle such claim without the consent of the
Indemnifying Person; provided, however, that notwithstanding the foregoing, the
Indemnified Person shall have the right to pay or settle any such claim at any
time without the consent of the Indemnifying Person if, and only if, in such
event, the Indemnified Person shall have waived

<PAGE> 55

in writing any right to indemnification therefor. If the Indemnifying Person
does not give the Indemnified Person the timely written notice of the
undertaking referred to in clause (b) of this Section 10.6, the Indemnified
Person shall thereafter have the right to contest, defend, settle or compromise
the claim as a reasonably prudent person would (as if no indemnification were
available), but shall not settle or compromise such claim except as provided in
Section 10.5, and shall keep the Indemnifying Person informed of the progress of
such matter.

10.7. Certificate of Incorporation and Bylaws. Notwithstanding anything
to the contrary herein contained, all present and former officers, directors,
officers, employees, agents and representatives of the Subsidiaries who were
entitled to indemnification under the charter or by-laws of any such Subsidiary
or otherwise shall continue to be entitled to indemnification by Surviving
Corporation A, Surviving Corporation B or such Subsidiary as applicable, or
their respective successors, from and against any claims, actions or other
liabilities arising after the Closing for which such Person would have been
entitled to indemnification by the Company if such matter had arisen prior to
the Closing. This provision is intended to be for the benefit of such directors,
officers, employees, agents and representatives each of whom shall be a third
party beneficiary hereunder.

10.8. Exclusivity. The indemnification provisions contained in this
Article X shall be the sole and exclusive remedy for the breach of this
Agreement or any action taken in connection with this Agreement, to the extent
permitted by applicable law, except for claims of fraud by any party.

ARTICLE XI.

TERMINATION

11.1. Termination. This Agreement and the Mergers contemplated hereby
may be terminated at any time prior to the Closing, whether before or after
approval of this Agreement and the Mergers, as follows, and in no other manner:

(a) By mutual written consent of QuadraMed and RHP;

(b) By QuadraMed or RHP if any of the conditions set forth in
Article VII shall not have been satisfied as of the date of the Closing;

(c) By QuadraMed if any of the conditions set forth in Article X
shall have not been satisfied as of the date of the Closing;

(d) By RHP if any of the conditions set forth in Article IX shall
have not been satisfied as of the date of the Closing;

<PAGE> 56

(e) By either QuadraMed or RHP if the Closing shall have not been
consummated on or before December 31, 1997; provided, however, with respect to
(b)-(e) that the terminating party has complied with or performed or tendered
performance of all covenants and agreements, and satisfied all conditions
contained herein which are to be complied with, performed or satisfied by such
party immediately prior to or at the Closing; provided, further, that a party
shall promptly notify the other parties hereto in writing if it becomes aware of
circumstances which would cause such other party to breach or be unable to
comply with or perform the conditions set forth in Article VII, VIII or IX as is
appropriate;

(f) By QuadraMed if (i) the Advisory Committee of RHP or any
committee thereof shall have withdrawn or modified in a manner adverse to
QuadraMed, Sub A or Sub B its approval or recommendation of this Agreement, the
Mergers or any other transaction contemplated by this Agreement; and either (A)
the Advisory Committee of RHP or any committee thereof shall have recommended to
the partners of RHP acceptance of a Third Party Acquisition or (B) RHP shall
have entered into any definitive agreement with respect to a Third Party
Acquisition; or (ii) RHP shall have breached in any material respect any of its
representations, warranties, covenants or other agreements contained in this
Agreement which breach cannot be or has not been cured 20 days after the giving
of written notice to RHP;

(g) By RHP if (i) the Advisory Committee of RHP shall have
withdrawn or modified in a manner adverse to QuadraMed, Sub A or Sub B its
approval or recommendation of this Agreement or the Mergers in order to approve
the execution by RHP of a definitive agreement providing for a Third Party
Acquisition contemplated by a Superior Proposal, provided that RHP shall have
compiled with the provisions of Section 4.9 and thereafter shall comply with
Section 11.3 below; or (ii) QuadraMed, Sub A or Sub B shall have breached in any
material respect any of their respective representations, warranties, covenants
or other agreements contained in this Agreement which beach cannot be or has not
been cured 20 days after the giving of written notice to RHP, Sub A or Sub B, as
applicable;

(h) By QuadraMed, if the Fair Market Value shall be less than
$18.50 per share unless RHP agrees that, in such event, the Fair Market Value
shall be $18.50 per share for purposes of the Mergers; or

(i) By RHP, if the Fair Market Value exceeds $32.00 per share at
the Effective Time of the Mergers.

11.2. Effect of Termination. In the event that this Agreement is
terminated pursuant to Section 11.1 hereof, all further obligations of the
parties hereto under this Agreement shall terminate without further liability of
any party to another, and each party hereto will pay all costs and expenses
incident to its negotiation and preparation of this Agreement and to its
performance of and compliance with all agreements and conditions contained
herein or therein on its part to be performed or complied with, including the
fees, expenses and disbursements of its counsel; provided, that the obligations
of RHP contained in Section 4.4 hereof and the

<PAGE> 57

obligations of QuadraMed, Sub A and Sub B contained in Section 6.3 hereof shall
survive any such termination; and provided, further, that nothing herein shall
relieve any party of any liability with respect to or arising out of any breach
of its obligations, covenants or agreements hereunder and such termination shall
not constitute an election of remedies nor limit the non-breaching parties from
pursuing whatever rights and remedies they may have at law, in equity or
otherwise.

11.3. Certain Payments. In the event that this Agreement is terminated
pursuant to Section 11.1(f)(i) or Section 11.1(g)(i) and the Third Party
Acquisition referred to in Section 11.1(g)(i) is consummated within one year
after termination, then RHP shall pay QuadraMed promptly upon consummation of
the Third Party Acquisition (but in no event later than two business days after
the consummation of the Third Party Acquisition shall have occurred) a fee of
One Million Dollars ($1,000,000), which amount shall be payable in immediately
available funds.

11.4. Waiver of Conditions. If any of the conditions specified in
Article VII hereof has not been satisfied, QuadraMed and RHP may nevertheless
mutually agree to proceed with the transactions contemplated hereby. If any of
the conditions specified in Article VIII hereof has not been satisfied,
QuadraMed, Sub A and Sub B may nevertheless at the election of QuadraMed proceed
with the transactions contemplated hereby. If any of the conditions specified in
Article IX hereof has not been satisfied, RHP may nevertheless at the election
of RHP proceed with the transactions contemplated hereby.

11.5. Payment of Expenses. QuadraMed shall pay directly at the Closing
(except as otherwise indicated on Schedule 3.29) all fees and expenses of the
Company Advisors in connection with this Agreement and the transactions
contemplated hereby. All such fees and expenses are listed on Schedule 3.29
hereto. RHP hereby represents and warrants that the Company has not previously
paid any portion of such fees or expenses. QuadraMed shall pay directly all fees
and expenses incurred in connection with registration and listing on Nasdaq of
the QuadraMed Shares.

ARTICLE XII.

GENERAL

12.1. Arbitration.

(a) For purposes of arbitration pursuant to Section 6.1(c),
Indemnified Person and the Indemnifying Person shall each select an arbitrator
to serve on a three party arbitration panel and the arbitrators so selected
shall select the third arbitrator to serve on such panel. The arbitration panel
so selected shall be referred to herein as the "Arbitrators." If any of the
selected Arbitrators decline or are unable to serve for any reason, the
appointed Arbitrators shall select another arbitrator. Upon their failure to
agree on another arbitrator,

<PAGE> 58

the jurisdiction of any court of the State of California shall be invoked to
make such selection. The Arbitrators selected to serve hereunder shall be
qualified by training and experience for the matters for which such Arbitrators
are designated to serve.

(b) Any arbitration pursuant to Section 10.4, shall be conducted
as follows:

(i) The Arbitrators shall follow the Commercial Arbitration
Rules of the American Arbitration Association, except as otherwise provided
herein. The Arbitrators shall substantially comply with the rules of evidence;
shall grant essential but limited discovery; shall provide for the exchange of
witness lists and exhibit copies; and shall conduct a pretrial and consider
dispositive motions. Each party shall have the right to request the Arbitrators
to make findings of specific factual issues.

(ii) The Arbitrators shall complete their proceedings and
render their decision within thirty (30) days after submission of the dispute to
them, unless the parties agree to an extension. Each party shall cooperate with
the Arbitrators to comply with procedural time requirements and the failure of
either to do so shall entitle the Arbitrators to extend the arbitration
proceedings accordingly and to impose sanctions on the party responsible for the
delay, payable to the other party. In the event any arbitrator does not fulfill
their responsibilities on a timely basis, either party shall have the right to
require a replacement and the appointment of a new arbitrator.

(iii) The decision of the Arbitrators shall be final and
binding upon the parties and accordingly a judgment by any court of the State of
California or any other court of competent jurisdiction may be entered in
accordance therewith.

(iv) Any arbitration shall be conducted in the State of
California.

(c) The costs of the arbitration conducted pursuant hereto shall
be borne equally by the parties to such arbitration, except that each party
shall bear its own legal and accounting expenses and other expenses relating to
its participation in such arbitration.

12.2. Amendments. Subject to applicable law, this Agreement, the
Certificates of Merger and any exhibit attached hereto or thereto may be amended
by the parties hereto at any time prior to the Effective Time; provided,
however, that any such amendment must be in writing and executed by all parties
hereto.

12.3. Assignment. The rights under this Agreement shall not be
assignable nor the duties delegable by any party without the written consent of
the other parties and nothing contained in this Agreement, express or implied,
is intended to confer upon any person or entity, other than the parties hereto
and their successors in interest and permitted assignees, any rights or remedies
under or by reason of this Agreement unless so stated to the contrary. Officers,
directors and others entitled to indemnification under Section 10.7 are third
party beneficiaries hereunder for purposes of enforcing such indemnification
rights.

<PAGE> 59

12.4. Notices. All notices, consents, waivers and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (i) delivered by hand (with written confirmation of receipt), (ii)
sent by facsimile (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (iii) when received
by the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):

To QuadraMed: QuadraMed Corporation
80 E. Sir Francis Drake Blvd., Suite 2A
Larkspur, Ca 94939
Fax: (415) 464-3953
Attn: Keith M. Roberts

With a copy to: Brobeck, Phleger & Harrison LLP
Spear Street Tower
One Market
Spear Tower
San Francisco, CA 94105
Fax: (415) 442-1010
Attn: Scott D. Lester

To RHP: Resource Health Partners, L.P.
c/o J.P. Morgan Investment Corporation
101 California Street
San Francisco, CA 94111
Fax: (415) 954-4737
Attn: John Van Hooser

With copies to: J.P. Morgan Investment Corporation
101 California Street
San Francisco, CA 94111
Fax: (415) 954-4737
Attn: John Van Hooser

Proskauer Rose LLP
1585 Broadway
New York, New York 10036-8299
Fax: (212) 969-2900
Attn: Steven L. Kirshenbaum

<PAGE> 60

12.5. Further Assurances/Access.

(a) QuadraMed, Sub A and Sub B on the one hand, and RHP, on the
other hand, agree that from time to time after the Closing, at the other's
request and without further consideration or consent, each will execute and
deliver such additional instruments as the other may reasonably request to
confirm more effectively the status of FRA and Resource Holdings as subsidiaries
of QuadraMed, and, from and after the date hereof if there are any rights of the
Company vis-a-vis third parties which would not continue beyond the time of the
Mergers without the consent of any such third party, to try with the cooperation
and assistance of each other to obtain such consent promptly.

(b) QuadraMed, Surviving Corporation A and Surviving Corporation
Sub B shall grant reasonable access to RHP and its counsel, accountants and
other representatives, during reasonable working hours from and after the
Closing and upon reasonable prior notice, to all of properties, books,
contracts, commitments and records related to the business and operations of the
Subsidiaries, and will furnish RHP during such period with reasonable access to
key employees and to all such information concerning the affairs of the
Subsidiaries as RHP reasonably requests, including copies and/or extracts of
pertinent records, documents and contracts.

12.6. Entire Agreement. This Agreement (including all exhibits and
schedules attached hereto and thereto and all documents delivered as provided
for herein and therein) contain the entire agreement among the parties hereto
with respect to the subject matter hereof and the transactions contemplated
hereby and supersedes all prior negotiations, discussions and undertakings, both
written and oral, among the parties hereto, with respect to the subject matter
hereof; provided, however, that the Confidentiality Agreement between the
parties hereto shall continue in full force and effect.

12.7. Counterparts; Facsimile. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may be
executed by facsimile (with originals to follow by United States mail), and such
facsimile shall be conclusive evidence of the consent and ratification of the
signatories hereto.

12.8. Governing Law. This Agreement shall be construed by and enforced
in accordance with the laws of the State of New York without giving effect to
the principles of the conflicts of laws, except insofar as the laws of Delaware
or Pennsylvania apply to the Mergers.

(Remainder of Page Intentionally Left Blank)

<PAGE> 61

IN WITNESS WHEREOF, the parties have duly executed this Acquisition
Agreement and Plan of Merger as of the date first written above.

QUADRAMED CORPORATION

By: [/s/] JOHN V. CRACCHIOLO
---------------------------------------
Name: John V. Cracchiolo
Title: Executive Vice President,
Chief Financial Officer and
Secretary

RH ACQUISITION CO.

By: [/s/] JOHN V. CRACCHIOLO
---------------------------------------
Name: John V. Cracchiolo
Title: Vice President and Chief
Financial Officer

FA ACQUISITION CO.

By: [/s/] JOHN V. CRACCHIOLO
---------------------------------------
Name: John V. Cracchiolo
Title: Vice President and Chief
Financial Officer

RESOURCE HEALTH PARTNERS, L.P.
By: RHP GP, L.P., its general partner
By: RHP Health, Inc., its general partner

By: TED J. ACKROYD
---------------------------------------
Name: Ted J. Ackroyd
Title: President

[SIGNATURE PAGE NO. 1 TO ACQUISITION AGREEMENT AND PLAN OF MERGER]

<PAGE> 62

RESOURCE HOLDINGS, LTD.

By: [/s/] TED J. ACKROYD
---------------------------------------
Name: Ted J. Ackroyd
Title: President

FRA ACQUISITION INC.

By: [/s/] TED J. ACKROYD
---------------------------------------
Name: Ted J. Ackroyd
Title: President

[SIGNATURE PAGE NO. 2 TO ACQUISITION AGREEMENT AND PLAN OF MERGER]

<PAGE> 63

EXHIBIT "A"

ESCROW AGREEMENT

<PAGE> 64

ESCROW AGREEMENT

This Escrow Agreement (the "Agreement") dated as of December 29, 1997 by
and among QuadraMed Corporation, a Delaware corporation ("QuadraMed"), RH
Acquisition Co., a Delaware corporation ("Sub A") and FA Acquisition Co., a
Delaware corporation ("Sub B"), Resource Health Partners, L.P., a Delaware
limited partnership ("RHP"), Resource Holdings, Ltd., a Pennsylvania corporation
("Resource Holdings") and FRA Acquisition Inc., a Delaware corporation ("FRA")
and State Street Bank and Trust Company (the "Escrow Agent").

RECITALS

A. This Agreement is being entered into by the parties pursuant
to Section 2.9(b) of that certain Acquisition Agreement and Plan of Merger dated
as of December 29, 1997 (the "Merger Agreement") by and among QuadraMed, Sub A
and Sub B and RHP, Resource Holdings and FRA, pursuant to which Sub A will be
merged with and into Resource Holdings (the "Sub A Merger") and Sub B will be
merged with and into FRA (the "Sub B Merger" and, together with the Sub A
Merger, the "Mergers") and QuadraMed will issue to RHP shares of Common Stock of
QuadraMed ("QuadraMed Shares") in exchange for all outstanding capital stock of
Resource Holdings and FRA, all on the terms and conditions set forth in the
Merger Agreement.

B. Pursuant to the Merger Agreement, RHP has agreed to deposit in
escrow a portion of the QuadraMed Shares received by RHP in the Mergers as
security for its obligation to indemnify QuadraMed, Sub A and Sub B pursuant to
the Merger Agreement, all on the terms set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:

1. Establishment of Escrow.

(a) After the issuance and delivery of the QuadraMed Shares to
RHP pursuant to the Merger Agreement, RHP shall cause to be deposited with the
Escrow Agent, to be held in an escrow account established by the Escrow Agent
for the purposes hereof (the "Escrow Account") and designated QuadraMed Escrow
Account, or any account having a similar designation, certificates for an
aggregate of 155,014 QuadraMed Shares, duly endorsed in blank or with
appropriate executed stock powers, to be held in accordance with the terms and
conditions of this Agreement. For the purposes of this Agreement, in the event
QuadraMed is acquired by merger or otherwise, the term "Escrow Shares" shall
include all amounts received in exchange for or in respect of the Escrow Shares.

<PAGE> 65

(b) The Escrow Agent hereby agrees to act as escrow agent, to
accept delivery of the Escrow Shares, and to hold, safeguard and disburse the
Escrow Shares pursuant to the terms and conditions hereof.

2. Release of Escrow Shares. The Escrow Shares shall be held by the
Escrow Agent until the Escrow Agent is required to release the Escrow Shares
pursuant to the terms hereof. Promptly following December 29, 1998 (the "Initial
Escrow Release Date"), the Escrow Agent shall cause all Escrow Shares to be
released and transferred to RHP; provided, however, that in the event that the
Escrow Agent has received a Claim Notice (as defined below) of any Claim or
Claims (as defined below) prior to the Initial Escrow Release Date and either
(i) the Escrow Agent receives joint written instructions from or on behalf of
QuadraMed and RHP ("Joint Instructions") instructing the Escrow Agent to release
all or a portion of the Escrow Shares as specified in the Joint Instructions or
(ii) the Escrow Agent receives notice from either QuadraMed or RHP of the entry
of a final non-appealable order of a court of competent jurisdiction (together
with a legal opinion by counsel for the presenting party, providing an
unqualified opinion that the court order is final and non-appealable, which the
Escrow Agent shall act on without further question) (a "Final Order") with
respect to such Claim or Claims and the disposition of such portion of the
Escrow Shares, and instructing the Escrow Agent to release all or a portion of
the Escrow Shares in accordance with such Final Order, then, in such event, the
Escrow Agent shall release all or a portion of the Escrow Shares specified in
such Joint Instructions or Final Order, as the case may be.

3. Claims.

(a) Notice. From time to time on or before December 29, 1998,
QuadraMed may provide written notice to RHP and the Escrow Agent (a "Claim
Notice") specifying in reasonable detail the nature and dollar amount of one or
more claims (a "Claim" or "Claims") being made under Article X of the Merger
Agreement, certifying that such Claim is being made in accordance with the
requirements of Section 10.2 of the Merger Agreement, and setting forth (with
reasonably detailed calculations) the portion of the Threshold Amount under the
Merger Agreement that has not yet been utilized as an offset to prior Claims
("Remaining Threshold Amount"). Thereafter, if RHP gives notice to QuadraMed and
the Escrow Agent disputing any Claim or other information contained in the Claim
Notice (a "Counter Notice") within thirty (30) days following receipt by the
Escrow Agent and by RHP of a Claim Notice regarding such Claim, such Claim shall
be resolved as provided in Section 3(b). If no Counter Notice is received by the
Escrow Agent within such thirty (30) day period, then the amount of damages
claimed by QuadraMed as set forth in the related Claim Notice shall be deemed
established for purposes of this Agreement, and, at the end of such thirty (30)
day period, the Escrow Agent shall release and transfer promptly, and in any
event within five (5) days, the number of Escrow Shares equal to the dollar
amount of the Claim (after giving effect to the application of the Remaining
Threshold Amount), divided by $23.8688, which released Escrow Shares shall be in
full satisfaction of such Claim. The Escrow Agent shall have no duty to inquire
into or consider whether a Claim complies with the requirements of the Merger
Agreement.

<PAGE> 66

(b) If a Counter Notice is given with respect to a Claim, the
Escrow Agent shall release and transfer all or a portion of the Escrow Shares
from the Escrow Account only (i) in accordance with the Claim Notice to the
extent a Claim is not disputed by a Counter Notice, (ii) in accordance with
Joint Instructions or (iii) in accordance with a Final Order. The number of
QuadraMed Shares to be released from the Escrow Account pursuant to clauses (i)
and (iii) of the immediately preceding sentence shall (after giving effect to
the application of the Remaining Threshold Amount), be equal to the dollar
amount of the Claim divided by $23.8688.

(c) QuadraMed and RHP agree to deliver promptly appropriate Joint
Instructions to the Escrow Agent upon reaching a mutually agreed resolution of
any Claim or upon issuance of a Final Order.

4. Provisions Regarding the Escrow Agent.

(a) Liability of the Escrow Agent.

(i) This Agreement expressly sets forth all the duties of the
Escrow Agent with respect to any and all matters pertinent hereto. No implied
duties or obligations shall be read into this Agreement against the Escrow
Agent. The Escrow Agent shall not be bound by the provisions of any agreement
among the other parties hereto, including the Merger Agreement, except for those
contained in this Agreement.

(ii) The Escrow Agent shall not be liable for any losses,
costs or expenses, except for its own gross negligence or willful misconduct. In
no event shall the Escrow Agent and its officers, directors and employees be
liable to any party for indirect, special, punitive or consequential damages
(including, without limitation, lost profits). The Escrow Agent shall not incur
any liability for (i) any act or failure to act made or omitted in good faith,
or (ii) any action taken or omitted in reliance upon any instrument, including
any written statement or affidavit provided for in this Agreement, that the
Escrow Agent shall in good faith believe to be genuine, nor will the Escrow
Agent be liable or responsible for forgeries, fraud, impersonations, or
determining the scope of any representative authority. In addition, the Escrow
Agent may consult with legal counsel, including in-house counsel, in connection
with the Escrow Agent's duties under this Agreement and shall be fully protected
in any act taken, suffered, or permitted by it in good faith in accordance with
the advice of counsel. The Escrow Agent is not responsible for determining and
verifying the authority of any person acting or purporting to act on behalf of
any party to this Agreement.

(b) Duties of Escrow Agent.

(i) The Escrow Agent shall not be under any duty to give the
Escrow Shares held by it hereunder any greater degree of care than it gives its
own similar property and shall not be required to invest any funds held
hereunder.

<PAGE> 67

(ii) The Escrow Agent does not have any interest in the
Escrow Shares deposited hereunder but is serving as escrow holder only and
having only possession thereof. Any payments of income from this Escrow Shares
shall be subject to withholding regulations then in force with respect to United
States taxes. The parties hereto will, if necessary, provide the Escrow Agent
with appropriate Internal Revenue Service Forms W-8 or W-9 for tax
identification number certification, or non-resident alien certifications. The
parties hereto understand that if their tax identification numbers are not
certified to the Escrow Agent, the Internal Revenue Code, as amended from time
to time, may require withholding of a portion of any interest or other income
earned on the Escrow Account.

(iii) The Escrow Agent makes no representation as to the
validity, value, genuineness or collectability of any security or other document
held by or delivered to it.

(iv) The Escrow Agent shall not be called upon to advise any
party as to the wisdom in selling or retaining or taking or refraining from any
action with respect to any securities or other assets or property deposited in
the Escrow Shares established hereunder.

(c) Resignation of The Escrow Agent. The Escrow Agent may resign
at any time upon giving at least thirty (30) days' written notice to the
parties; provided, however, that no such resignation shall become effective
until the appointment of a successor escrow agent which shall be accomplished in
accordance with this section. The parties shall use their best efforts to
mutually agree on a successor escrow agent within thirty (30) days after
receiving such notice. If the parties fail to agree on a successor escrow agent
within such time, the Escrow Agent shall have the right to appoint a successor
escrow agent authorized to do business in the State of California. The successor
escrow agent shall execute and deliver an instrument accepting such appointment
and it shall, without further acts, be vested with all the estates, properties,
rights, powers, and duties of the predecessor escrow agent as if originally
named as escrow agent. Upon the effective appointment of a successor escrow
agent, the Escrow Agent shall be discharged from any further duties and
liability under this Agreement.

(d) Controversies. In the event of any disagreement among the
parties hereto other than the Escrow Agent resulting in adverse Claims or
demands being made in connection with the Escrow Shares, or in the event that
the Escrow Agent is in doubt as to what action it should take hereunder, the
Escrow Agent will not be required to determine the controversy or to take any
action regarding it. The Escrow Agent shall be entitled to retain all or any
portion of the Escrow Shares subject to such dispute, without liability to any
party, until the Escrow Agent shall have received (i) Joint Instructions or (ii)
a Final Order, in which event the Escrow Agent shall disburse the Escrow Shares
in accordance with such Joint Instructions or Final Order. The Escrow Agent may,
but shall be under no duty whatsoever to, institute or defend any legal
proceedings.

(e) Fees and Expenses. QuadraMed shall pay the Escrow Agent
compensation (as payment in full) for the services to be rendered by the Escrow
Agent hereunder in the amount of Two Thousand Five Hundred Dollars ($2,500) at
the time of execution of this Agreement and

<PAGE> 68

agree to reimburse the Escrow Agent for all reasonable expenses, disbursements
and advances incurred or made by the Escrow Agent in performance of its duties
hereunder (including reasonable fees, expenses and disbursements of its
counsel). Any such compensation and reimbursement to which the Escrow Agent is
entitled shall be borne by QuadraMed. The Escrow Agent shall be entitled to
reimbursement on demand to QuadraMed for all reasonable legal fees and expenses
incurred in connection with the preparation and administration of this Agreement
or the escrow created hereby which are in excess of its compensation for normal
services hereunder, including without limitation, payment of any reasonable
legal fees and expenses incurred by the Escrow Agent in connection with the
resolution of any Claim by any party hereunder.

(f) Indemnification of the Escrow Agent.

(i) QuadraMed agrees to indemnify and hold the Escrow Agent
and its officers, directors and employees harmless against any and all losses,
claims, damages, liabilities, and expenses, including reasonable costs of
investigation, counsel fees, including allocated costs of in-house counsel, and
disbursements that may be imposed on the Escrow Agent or incurred by the Escrow
Agent in connection with the performance of its duties under this Agreement,
including but not limited to any litigation arising from this Agreement or
involving its subject matter.

(ii) QuadraMed and RHP, jointly and severally, agree to
assume any and all obligations imposed now or hereafter by any applicable tax
law with respect to the payment under the Escrow Account under this Agreement,
and to indemnify and hold the Escrow Agent harmless from and against any taxes,
additions for late payment, interest, penalties and other expenses, that may be
assessed against the Escrow Agent in any such payment or other activities under
this Agreement. QuadraMed and RHP undertake to instruct the Escrow Agent in
writing with respect to the Escrow Agent's responsibility for withholding and
other taxes, assessments or other governmental charges, certifications and
governmental reporting in connection with its acting as Escrow Agent under this
Agreement. QuadraMed and RHP, jointly and severally, agree to indemnify and hold
the Escrow Agent harmless from any liability on account of taxes, assessments or
other governmental charges, including without limitation the withholding or
deduction or the failure to withhold or deduct the same, and any liability for
failure to obtain proper certifications or to properly report to governmental
authorities, to which the Escrow Agent may be or become subject in connection
with or which arises out of this Agreement, including costs and expenses
(including reasonable legal fees and expenses), interest and penalties. This
Section 4(f) shall survive notwithstanding any termination of this Agreement.

(iii) The Escrow Agent shall have no more or less
responsibility or liability on account of any action or omission of any
book-entry depository or subescrow agent employed by the Escrow Agent than any
such book-entry depository or subescrow agent has to the Escrow Agent, except to
the extent that such action or omission of any book-entry depository or
subescrow agent was caused by the Escrow Agent's own gross negligence, bad faith
or willful misconduct.

<PAGE> 69

5. Ownership. QuadraMed acknowledges and agrees that RHP is, and shall
be treated as, the owner, and shall retain all rights of ownership, of any and
all portions of the Escrow Shares not distributed to QuadraMed hereunder, and,
accordingly, RHP shall retain all voting rights and rights to dividends with
respect to any Escrow Shares so held. RHP agrees that, for purposes of federal
and other taxes based on income, RHP will be treated as the owner of the Escrow
Shares for so long as such Escrow Shares are held in the Escrow Account, and
that RHP will report all income, if any, that is earned on, or derived from, the
Escrow Shares as its income in the taxable year or years in which such income is
properly included and pay any taxes attributable thereto. The Escrow Agent shall
not be entitled to any offset against the Escrow Shares.

6. Partner Representative. The parties acknowledge that, following the
date hereof, RHP may transfer the QuadraMed Shares to the partners of RHP, and
the general partner of RHP may further transfer QuadraMed Shares to its partners
in accordance with the Merger Agreement, RHP or such Partners may designate a
representative ("Partner Representative") to receive notices and make all
determinations with regard to any Claim Notices or other actions required of RHP
under this Agreement. In such event, RHP shall notify QuadraMed and the Escrow
Agent of such election, including the identity and address of the Partner
Representative, and the Partner Representative shall thereafter have all of the
rights of RHP under this Agreement, but will have no liability hereunder. Such
appointment shall not relieve RHP of its obligations hereunder. The Escrow Agent
shall be entitled to rely on all instructions, notices and actions of the
Partner Representative as if the Escrow Agent had received such instructions or
notices or such actions had been taken by RHP.

7. Notices. All notices, consents, waivers and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (i) delivered by hand (with written confirmation of receipt), (ii)
sent by facsimile (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (iii) when received
by the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):

To QuadraMed: QuadraMed Corporation
80 East Sir Francis Drake Blvd., Suite 2A
Larkspur, California 94939
Attention: Keith M. Roberts, Esq.
Telephone: (415) 461-7725
Facsimile: (415) 464-3953

<PAGE> 70

With a copy to: Brobeck, Phleger & Harrison LLP
One Market, Spear Street Tower
San Francisco, California 94105
Attention: Scott D. Lester, Esq.
Telephone: (415) 442-1635
Facsimile: (415) 442-1010

To RHP: Resource Health Partners, L.P.
c/o J.P. Morgan Investment Corporation
101 California Street
San Francisco, California 94111
Telephone: (415) 954-4782
Facsimile: (415) 954-4737
Attn: John Van Hooser

With a copy to: Proskauer Rose LLP
1585 Broadway
New York, NY 10036-8299
Attention: Steven Kirshenbaum, Esq.
Telephone: (212) 969-2000
Facsimile: (212) 969-2900

To the Escrow Agent: State Street Bank & Trust Company
Two International Place
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Fifth Floor, QuadraMed Escrow Account
Facsimile: (617) 664-5365

8. Counterparts; Facsimile. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original and all of
which, when taken together, will be deemed to constitute one and the same
Agreement. This Agreement may be executed by facsimile, with such facsimile copy
to serve as conclusive evidence of the consent and ratification of the matters
contained herein by the parties hereto.

9. Section Headings. The headings of sections in this Agreement are
provided for convenience only and will not affect its construction or
interpretation.

10. Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power or privilege under the documents referred to in
this Agreement will operate as a waiver of such right, power or privilege, and
no single or partial exercise of any such right, power or privilege will
preclude any other or further exercise of such right, power or privilege or the
exercise of any

<PAGE> 71

other right, power or privilege. To the maximum extent permitted by applicable
law, (i) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed
by the other party, (ii) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given and (iii) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.

11. Exclusive Agreement; Modification. This Agreement and the Merger
Agreement supersedes all prior agreements among the parties with respect to its
subject matter and constitute a complete and exclusive statement of the terms of
the agreement among the parties with respect to the subject matter hereof. This
Agreement may not be amended except by a written agreement executed by or on
behalf of QuadraMed, RHP and the Escrow Agent.

12. Governing Law. This Agreement shall be governed by the laws of the
State of New York, without regard to conflicts of law principles.

13. Consent to Jurisdiction and Service. Each of the parties hereto,
other than the Escrow Agent, hereby absolutely and irrevocably consent and
submit to the jurisdiction of the courts in the Commonwealth of Massachusetts
and of any Federal court located in said Commonwealth in connection with any
actions or proceedings brought against QuadraMed and RHP by the Escrow Agent
arising out of or relating to this Escrow Agreement. In any such action or
proceeding, QuadraMed and RHP hereby absolutely and irrevocably waive personal
service of any summons, complaint, declaration or other process and hereby
absolutely and irrevocably agree that the service thereof may be made by
certified or registered first-class mail directed to QuadraMed and RHP, as the
case may be, at their respective addresses in accordance with Section 7 hereof.

14. Force Majeure. The Escrow Agent shall not be responsible for delays
or failures in performance resulting from acts beyond its control. Such acts
shall include but not be limited to acts of God, strikes, lockouts, riots, acts
of war, epidemics, governmental regulations superimposed after the fact, fire
communication line failures, computer viruses, power failures, earthquakes or
other disasters.

15. Reproduction of Documents. This Agreement and all documents relating
thereto, including, without limitation, (a) consents, waivers and modifications
which may hereafter be executed, and (b) certificates and other information
previously or hereafter furnished, may be reproduced by any photographic,
photostatic, microfilm, optical disk, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.

<PAGE> 72

IN WITNESS WHEREOF, the parties have delivered this Escrow Agreement as
of the date first written above.

QUADRAMED CORPORATION RESOURCE HEALTH PARTNERS, L.P.
By:RHP GP, L.P., its general partner
By:RHP Health, Inc., its general partner

By: By:
------------------------------ ------------------------------
Name: Name:
Title: Title:

RH ACQUISITION CO. RESOURCE HOLDINGS, LTD.

By: By:
------------------------------ ------------------------------
Name: Name:
Title: Title:

FR ACQUISITION CO. FRA ACQUISITION INC.

By: By:
------------------------------ ------------------------------
Name: Name:
Title: Title:

STATE STREET BANK AND TRUST COMPANY

By:
------------------------------
Name:
Title:

[SIGNATURE PAGE TO THE ESCROW AGREEMENT]

<PAGE> 73

EXHIBIT "B"

REGISTRATION RIGHTS AGREEMENT

<PAGE> 74

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (the "Agreement") is entered into as
of December 29, 1997, by and among QuadraMed Corporation, a Delaware corporation
("QuadraMed"), Resource Health Partners, L.P., a Delaware limited partnership
("RHP") and each of the partners of RHP and each of the partners of RHP's
general partner at the time each such partner becomes a holder of the Common
Stock of QuadraMed (each a "Stockholder" and collectively, the "Stockholders"),
and when each such party executes a counterpart signature page hereto.

WHEREAS, pursuant to that certain Acquisition Agreement and Plan of
Merger by and among QuadraMed, RH Acquisition Co., a Delaware corporation ("Sub
A") and FA Acquisition Co., a Delaware corporation ("Sub B"), on the one hand,
and RHP, Resource Holdings Ltd., a Pennsylvania corporation ("Resource
Holdings") and FRA Acquisition Inc., a Delaware corporation ("FRA") on the other
hand, dated as of December 29, 1997 (the "Merger Agreement"), (i) Sub A shall be
merged with and into Resource Holdings and Sub B shall be merged with and into
FRA (each a "Merger," and together, the "Mergers"), and (ii) by virtue of the
Mergers, RHP shall receive an amount of shares of QuadraMed's Common Stock (the
"Shares") in exchange for each issued and outstanding share of Resource Holdings
Common Stock and each issued and outstanding share of FRA Common Stock.

WHEREAS, following the Mergers, it is anticipated that RHP may transfer
the Shares to its partners and the general partner of RHP may transfer the
Shares it receives to its partners, all in accordance with the terms and
conditions of the Merger Agreement.

WHEREAS, QuadraMed desires to grant certain registration rights for the
Shares, and QuadraMed and the Stockholders desire that this Agreement shall
govern the rights of the Stockholders to cause QuadraMed to register the Shares,
as well as certain other matters as set forth herein.

1. Definitions.

(a) The term "register", "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document;

<PAGE> 75

(b) The term "Registrable Securities" means (1) the Shares issued
to RHP pursuant to the Merger Agreement and transferred by RHP to the
Stockholders 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 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);

(c) A person will be deemed to be a "Holder" of Registrable
Securities whenever such person owns or 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 limitation upon the exercise of such right,) whether or not such
acquisition has actually been effected;

(d) The term "Form S-3" means such form under the Securities Act
as in effect on the date hereof or any comparable or successor form under the
Securities Act subsequently adopted by the Securities and Exchange Commission
("SEC") which permits inclusion or incorporation of substantial information by
reference to other documents filed by QuadraMed with the SEC;

(e) The term "Securities Act" means the Securities Act of 1933,
as amended.

(f) The term "1934 Act" means the Securities Exchange Act of
1934, as amended.

(g) The term "SEC" means the Securities and Exchange Commission.

2. Registration.

(a) QuadraMed shall prepare, and, on or prior to the date which
is thirty (30) days after the effective date of the Merger (the "Merger
Effective Date"), file with the SEC a Registration Statement on Form S-3 (or, if
Form S-3 is not then available, on such form of Registration Statement as is
then available to effect a registration of the Registrable Securities, subject
to the consent of the Holders, which consent will not be unreasonably withheld)
covering the resale of the Registrable Securities. QuadraMed shall use its best
efforts to obtain effectiveness of the registration statement as soon as
practicable but in any event within three (3) months of the date of this
Agreement.

<PAGE> 76

(b) Eligibility for Form S-3. QuadraMed represents and warrants
that it meets the registrant eligibility and transaction requirements for the
use of Form S-3 for registration of the sale by the Holders of the Registrable
Securities and QuadraMed shall file all reports required to be filed by
QuadraMed with the SEC in a timely manner so as to maintain such eligibility for
the use of Form S-3.

3. Obligations of QuadraMed. In connection with the registration of the
Registrable Securities, QuadraMed shall have the following obligations:

(a) QuadraMed shall prepare and file with the SEC not later than
thirty (30) days after the date of this Agreement a registration statement with
respect to the Registrable Securities and thereafter shall use its best efforts
to cause such registration statement to become effective as soon as possible
after filing and shall keep such registration statement effective at all times
until two (2) years following the later of (i) the effective date of such
registration statement and (ii) the publication by QuadraMed of financial
results that include at least thirty (30) days of combined operations of
QuadraMed, Resource Holdings, FRA and their respective subsidiaries.

(b) QuadraMed shall 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 keep the
registration statement effective at all times and to comply with the provisions
of the Securities Act with respect to the disposition of all securities covered
by such registration statement.

(c) QuadraMed shall furnish to RHP and its legal counsel promptly
after the same is prepared and publicly distributed, filed with the SEC, or
received by QuadraMed, one copy of the registration statement and any amendment
thereto, each preliminary prospectus and prospectus and each amendment or
supplement thereto. QuadraMed shall furnish to the Holders 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 Registrable
Securities owned by them. QuadraMed will immediately notify each Holder by
facsimile of the effectiveness of the registration statement or any
post-effective amendment. QuadraMed will promptly respond to any and all
comments received from the SEC, with a view towards causing any registration
statement or any amendment thereto to be declared effective by the SEC as soon
as practicable and shall promptly file an acceleration request as soon as
practicable following the resolution or clearance of all SEC comments, or, if
applicable, following notification by the SEC that the registration statement or
any amendment thereto will not be subject to review. QuadraMed hereby agrees to
keep RHP apprised of the status of the registration statement.

(d) QuadraMed shall use its best efforts to (i) 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, (ii) prepare and file in

<PAGE> 77

those jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof, and (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all
times, provided that QuadraMed 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.

(e) As promptly as practicable, QuadraMed shall 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 and QuadraMed shall use its best
efforts promptly to prepare a supplement or amendment to the registration
statement to correct such untrue statement or omission, and deliver such number
of copies of such supplement or amendment to each Holder as such Holder may
reasonably request.

(f) In the event Stockholders that hold a majority-in-interest of
the Registrable Securities being offered in the offering select underwriters for
the offering, such determination to be binding on all Holders, QuadraMed shall
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, including, without limitation, customary indemnification and
contribution obligations, with the underwriters of such offering.

(g) QuadraMed shall use its best efforts to prevent the issuance
of any stop order or other suspension of effectiveness of a registration
statement, and, if such an order is issued, to obtain the withdrawal of such
order as soon as practicable and to notify each Holder who holds Registrable
Securities being sold (or, in the event of an underwritten offering, the
managing underwriters) of the issuance of such order and the resolution thereof.

(h) QuadraMed shall permit counsel designated by RHP to review
the registration statement and all amendments and supplements thereto (as well
as all requests for acceleration or effectiveness thereof) a reasonable period
of time prior to their filing with the SEC, and not file any document in a form
to which such counsel reasonably objects and will not request acceleration of
the registration statement without prior notice to such counsel. The sections of
the registration statement covering information with respect to the Holders, the
Holders' beneficial ownership of securities of QuadraMed or the Holders intended
method of disposition of Registrable Securities shall conform to the information
provided to QuadraMed by each of the Holders.

(i) At the request of any Holder, QuadraMed shall (i) furnish, on
the date that Registrable Securities are delivered to an underwriter, if any,
for sale in connection with the registration statement or, if such securities
are not being sold by an underwriter, on the

<PAGE> 78

date of effectiveness thereof an opinion, dated as of such date, from counsel
representing QuadraMed for purposes of such registration statement, in form,
scope and substance as is customarily given in an underwritten public offering,
addressed to the underwriters, if any, and the Holders and (ii) use its best
efforts to furnish, on the date that Registrable Securities are delivered to an
underwriter, if any, for sale in connection with the registration statement or,
if such securities are not being sold by an underwriter, on the date of the
effectiveness thereof, a letter, dated such date, from QuadraMed's independent
certified public accountants in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and the Holders.

(j) QuadraMed shall make available for inspection by (i) any
Holder, (ii) any underwriter participating in any disposition pursuant to the
registration statement, (iii) one firm of attorneys and one firm of accountants
or other agents retained by the Holders, and (iv) one firm of attorneys retained
by all such underwriters (collectively, the "Inspectors") all pertinent
financial and other records, and pertinent corporate documents and properties of
QuadraMed (collectively, the "Records"), as shall be reasonably deemed necessary
by each Inspector to enable each Inspector to exercise its due diligence
responsibility, and cause QuadraMed's officers, directors and employees to
supply all information which any Inspector may reasonably request for purposes
of such due diligence; provided, however, that each Inspector shall hold in
confidence and shall not make any disclosure (except to a Holder) of any Record
or other information which QuadraMed determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless
(a) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (b) the release of such
Records is ordered pursuant to a subpoena or other order from a court or
government body of competent jurisdiction, or (c) the information in such
Records has been made generally available to the public other than by disclosure
in violation of this or any other agreement. QuadraMed shall not be required to
disclose any confidential information in such Records to any Inspector until and
unless such Inspector shall have entered into confidentiality agreements (in
form and substance satisfactory to QuadraMed) with QuadraMed with respect
thereto, substantially in the form of this Section 3(j). Each Holder agrees that
it shall, upon learning that disclosure of such Records is sought in or by a
court or governmental body of competent jurisdiction or through other means,
give prompt notice to QuadraMed and allow QuadraMed, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, the records deemed confidential. Nothing herein (or in any other
confidentiality agreement between QuadraMed and any Holder) shall be deemed to
limit the Holder's ability to sell Registrable Securities in a manner which is
otherwise consistent with applicable laws and regulations.

(k) QuadraMed shall hold in confidence and not make any
disclosure of information concerning any Holder provided to QuadraMed unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any registration statement, (iii) the
release of such information is ordered pursuant to a subpoena

<PAGE> 79

or other order from a court of governmental body of competent jurisdiction, or
(iv) such information has been made generally available to the public other than
by disclosure in violation of this or any other agreement. QuadraMed agrees that
it shall, upon learning that disclosure of such information concerning a Holder
is sought in or by a court of governmental body of competent jurisdiction or
through other means, give prompt notice to such Holder prior to making such
disclosure, and allow the Holder, at its expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, such
information.

(l) QuadraMed shall (i) cause all the Registrable Securities
covered by the registration statement to be listed on each national securities
exchange on which securities of the same class or series issued by QuadraMed are
then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) secure the designation and
quotation, of all the Registrable Securities covered by the registration
statement on the Nasdaq National Market and, without limiting the generality of
the foregoing, to arrange for at least two market makers to register with the
National Association of Securities Dealers, Inc. ("NASD") as such with respect
to such Registrable Securities.

(m) QuadraMed shall provide a transfer agent and registrar, which
may be a single entity, for the Registrable Securities not later than the
effective date of the registration statement.

(n) QuadraMed shall cooperate with the Holders who hold
Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to the registration statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or the Holders may reasonably
request and registered in such names as the managing underwriter or
underwriters, if any, or the Holders may request, and, within three (3) business
days after a registration statement which includes Registrable Securities is
ordered effective by the SEC, QuadraMed shall deliver, and shall cause legal
counsel selected by QuadraMed to deliver, to the transfer agent for the
Registrable Securities (with copies to the Holders whose Registrable Securities
are included in such registration statement) a letter of instruction and an
opinion of such counsel in the usual and customary form and satisfactory to such
transfer agent.

4. Furnish Information.

It shall be a condition precedent to the obligations of QuadraMed
to complete the registration pursuant to this Agreement with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
QuadraMed such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of such securities as shall be
reasonably required to effect the registration of such Holder's Registrable
Securities.

<PAGE> 80

5. Expenses of Registration.

(a) All expenses incident to QuadraMed's performance or
compliance with the Agreement, including, without limitation, all registration,
filing, listing and qualification fees, printer's fees and fees and
disbursements of counsel, independent certified public accountants and all other
persons retained by QuadraMed and all fees and expenses for separate counsel, if
any, retained by the holders of the Registrable Securities in connection with
such registration (collectively, the "Registration Expenses"), will be borne by
QuadraMed.

(b) Notwithstanding the foregoing, the Holders of the Registrable
Securities shall be obligated to pay, pro rata among the Holder of the
Registrable Securities on the basis of the number of securities owned by each
such Holder the underwriting discounts and commission relating to the
Registrable Securities included in any registration hereunder.

6. Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of the Agreement.

7. Indemnification. In the event any Registrable Securities are included
in a registration statement under this Agreement:

(a) To the extent permitted by law, QuadraMed will indemnify,
hold harmless and defend (i) each Holder and RHP, (ii) the directors, officers,
partners, employees, agents and each other person who controls any Holder or RHP
within the meaning of the Securities Act or the 1934 Act, (iii) any underwriter
(as defined in the 1933 Act) for the Holders, and (iv) the directors, officers,
partners, employees and each person who controls any such underwriter within the
meaning of the Securities Act or the 1934 Act, if any (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities or expenses (joint or
several) (collectively, together with actions, proceedings or inquiries by any
regulatory or self-regulatory organization, whether commenced or threatened, in
respect thereof, "Claims") to which any of them may become subject, insofar as
such Claims 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 QuadraMed of the Securities Act, the 1934 Act, any state
securities law or other law or any rule or regulation promulgated under the
Securities Act or the 1934 Act or any state securities law or other law; and
QuadraMed will pay to each such Indemnified Person, as incurred, any legal or
other expenses reasonably incurred such Indemnified Person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained

<PAGE> 81

in this subsection 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 QuadraMed (which consent shall not be unreasonably
withheld), nor shall QuadraMed be liable in any such case for any such 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.

(b) In connection with any registration statement in which a
Holder is participating, to the extent permitted by law, each such selling
Holder severally and not jointly will indemnify and hold harmless QuadraMed,
each of its directors, each of its officers who has signed the registration
statement, any underwriter, any other Holder selling securities in such
registration statement and any controlling person of any such underwriter or
other Holder and each person, if any, who controls QuadraMed within the meaning
of the Securities Act, against any losses, claims, damages or liabilities (joint
or several) to which any of the foregoing persons may become subject, under the
Securities Act or 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 by such Holder, in each case to the extent
(and only to the extent) that such Violation occurs by reason of reliance upon
and in conformity with written information furnished to QuadraMed by such Holder
expressly for use in connection with such registration; and each such Holder
will pay, as incurred, any legal or other expenses reasonably incurred by any
person intended to be indemnified pursuant to this subsection 7(b), in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this subsection 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, which consent shall not be unreasonably
withheld, provided, further, however, that the Holder shall be liable under this
Agreement (including this Section 7(b) and Section 8) only for that amount as
does not exceed the net proceeds to such Holder as a result of the sale of
Registrable Securities pursuant to such registration statement.

(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 (to
be selected by Holders holding a majority of the Registrable Securities included
in the Registration Statement), 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

<PAGE> 82

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
prejudicial to its ability to defend such action, shall relieve such
indemnifying party to the extent of such prejudice 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) No indemnifying party, in the defense of any claim arising
out of a Violation shall, except with the consent of each indemnified party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation and, in the event the terms of such judgment or settlement
include any term other than the payment by the indemnifying party of money
damages, the indemnifying party shall not so consent or enter into such a
settlement without the consent of each indemnified party (which will not be
unreasonably withheld) whether or not the terms thereof include such a release.

(e) The obligations of QuadraMed 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. Contribution.

To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 7 to the fullest extent permitted by law; provided, however, that
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 7, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of such fraudulent misrepresentation, and (iii) contribution (together
with any indemnification or other obligations under this Agreement) by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.

9. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders 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 a Holder to sell securities of QuadraMed to the public without
registration or pursuant to a registration on Form S-3, QuadraMed agrees to:

(a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144;

<PAGE> 83

(b) File with the SEC in a timely manner all reports and other
documents required of QuadraMed under the Securities Act and the 1934 Act; and

(c) Furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by
QuadraMed that it has complied with the reporting requirements of SEC Rule 144,
Securities Act and the 1934 Act or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3, (ii) a copy of the most recent
annual or quarterly report of QuadraMed and such other reports and documents so
filed by QuadraMed, and (iii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC which
permits the selling of any such securities without registration or pursuant to
such form.

10. Assignment of Registration Rights. A Holder may assign its rights
under this Agreement (but only with all related obligations) to a transferee or
assignee of such securities, provided that, within a reasonable time after such
transfer, QuadraMed is 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; and provided, further, that 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.

11. Amendment of Registration Rights. Any provision of the Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of QuadraMed and the Holders of a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each Holder of any Registrable Securities
then outstanding, each future holder of all such Registrable Securities and
QuadraMed.

12. Miscellaneous.

(a) Successors and Assigns. All covenants and agreements in the
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 the 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) Counterparts; Facsimile. This Agreement may be executed in
any number of counterparts and any party hereto may execute any such
counterpart, each of which when executed and delivered shall be deemed to be an
original and all of which counterparts taken together shall constitute but one
and the same instrument. This Agreement shall become effective, and binding upon
QuadraMed on the date hereof and upon each Holder

<PAGE> 84

when such Holder signs and returns the acknowledgment in the form of Exhibit A
attached hereto.

(c) Descriptive Headings; Interpretation. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a section of this Agreement.

(d) Severability. Whenever possible each provision and term of
this Agreement will be interpreted in a manner to be effective and valid but if
any provision or term of this Agreement is held to be prohibited by law or
invalid, then such provision or term will be ineffective only to the extent of
such prohibition or invalidity, without invalidating or affecting in any manner
whatsoever the remainder of such provision or term or the remaining provisions
or terms of this Agreement. If any of the covenants set forth in this Agreement
are held to be unreasonable, arbitrary or against public policy, such covenants
will be considered divisible with respect to scope, time and geographic area,
and in such lesser scope, time and geographic area, will be effective, binding
and enforceable against the parties hereto.

(e) Governing Law. The Agreement shall be governed by the laws of
the State of New York, without regard to the conflicts of law principles.

(f) Entire Agreement. This Agreement and the Merger Agreement
constitute the entire agreement between the parties with respect to the subject
matter of this Agreement and supersede all prior written and oral agreements and
understandings between QuadraMed, on the one hand, and the Holders and RHP, on
the other hand, with respect to the subject matter of this Agreement. This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.

(g) Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon receipt by the party to be notified at such party's
address set forth at the end of this Agreement or at such other address as such
party shall have furnished QuadraMed in writing, or, until any such party so
furnishes an address to QuadraMed, then to and at the address of the last holder
of the shares covered by this Agreement who has so furnished an address to
QuadraMed.

(h) Delays or Omissions; Remedies Cumulative. It is agreed that
no delay or omission to exercise any right, power or remedy accruing to the
parties, upon any breach or default of QuadraMed under this Agreement, shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach of default, or any acquiescence therein, or of any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. It is further agreed that any waiver, permit, consent
or approval of any kind or character by a party of any breach or default under
this Agreement, or any waiver by a party of any provisions or conditions of this
Agreement must be in writing and shall be

<PAGE> 85

effective only to the extent specifically set forth in writing and that all
remedies, either under this Agreement, or by law or otherwise afforded to a
party, shall be cumulative and not alternative.

(i) Further Assurances. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

(j) Actions by Holders. Whenever any action, consent or other
determination is required on the part of the Holders to be made pursuant to this
Agreement, such determination shall be made by the Holders of the majority of
Registrable Securities then outstanding.

(Remainder of Page Intentionally Left Blank)

<PAGE> 86

IN WITNESS WHEREOF, the parties have duly executed this Registration
Rights Agreement as of the date first written above.

QUADRAMED CORPORATION

By:
-------------------------------------
Name:
Title:

RESOURCE HEALTH PARTNERS, L.P.
By: RHP GP, L.P., its general partner
By: RHP Health, Inc., its general partner

By:
-------------------------------------
Name:
Title:

SIGNATURE PAGE
TO THE REGISTRATION RIGHTS AGREEMENT

<PAGE> 87

STOCKHOLDER SIGNATURE PAGE
TO THE REGISTRATION RIGHTS AGREEMENT

By:
-------------------------------------
Print Name:
-----------------------------
Address:
--------------------------------

--------------------------------

<PAGE> 88

EXHIBIT "C"

SUB A CERTIFICATE OF MERGER

<PAGE> 89
CERTIFICATE OF MERGER
MERGING
RH ACQUISITION CO.
WITH AND INTO
RESOURCE HOLDINGS, LTD.
-------------------------------

Pursuant to Section 252 of the General Corporation Law of
the State of Delaware
-----------------------------

RH Acquisition Co., a Delaware corporation ("Merger Sub"), and Resource
Holdings, Ltd., a Pennsylvania corporation ("Resource Holdings"), DO HEREBY
CERTIFY AS FOLLOWS:

FIRST: That Merger Sub was incorporated on December 18, 1997, pursuant
to the Delaware General Corporation Law (the "Delaware Law"), and that Resource
Holdings was incorporated on June 29, 1992, pursuant to Pennsylvania Law.

SECOND: That an Acquisition Agreement and Plan of Merger (the
"Agreement"), dated as of December 29, 1997, by and among QuadraMed Corporation,
FA Acquisition Co. and Merger Sub, on the one hand, and Resource Health
Partners, L.P., Resource Holdings and FRA Acquisition Inc., on the other hand,
setting forth the terms and conditions of the merger of Merger Sub with and into
Resource Holdings (the "Merger"), has been approved, adopted, certified,
executed and acknowledged by each of the constituent corporations in accordance
with Section 252 of the Delaware Law.

THIRD: That the name of the surviving corporation (the "Surviving
Corporation") shall be Resource Holdings, Ltd.

FOURTH: That pursuant to the Agreement, the Certificate of Incorporation
of the Surviving Corporation shall be the Certificate of Incorporation of
Resource Holdings.

FIFTH: That an executed copy of the Agreement is on file at the
principal place of business of the Surviving Corporation at the following
address:

Resource Holdings, Ltd.
80 E. Sir Francis Drake Blvd., Suite 2A
Larkspur, CA 94939

SIXTH: That a copy of the Agreement will be furnished by the Surviving
Corporation, on request and without cost, to any stockholder of any constituent
corporation.

<PAGE> 90

SEVENTH: That the Merger shall become effective upon the filing of this
Certificate of Merger with the Secretary of State of the State of Delaware.

EIGHTH: That the Surviving Corporation hereby agrees that it may be
served with process in the State of Delaware as provided in Section 252, and
hereby appoints the Secretary of State of the State of Delaware as its agent to
accept service of process, and a copy of such service of process shall be mailed
to the Surviving Coorporation at the following address:

Resource Holdings, Ltd.
80 E. Sir Francis Drake Blvd., Suite 2A
Larkspur, CA 94939

IN WITNESS WHEREOF, each of Merger Sub and Resource Holdings has caused
this Certificate of Merger to be executed in its corporate name this __ day of
December, 1997.

RH Acquisition Co.

By:
------------------------------------------
John V. Cracchiolo, Vice President and Chief
Financial Officer

ATTEST:

- ----------------------------
Keith Roberts, Secretary

Resource Holdings, Ltd.

By:
------------------------------------------
Ted Ackroyd, President and Chief Executive
Officer

ATTEST:

- -----------------------------
, Secretary

<PAGE> 91

EXHIBIT "D"

SUB B CERTIFICATE OF MERGER

<PAGE> 92

CERTIFICATE OF MERGER

MERGING

FA ACQUISITION CO.

WITH AND INTO

FRA ACQUISITION INC.

----------------------

Pursuant to Section 251 of the General Corporation Law of
the State of Delaware

----------------------

FA Acquisition Co., a Delaware corporation ("Merger Sub"), and FRA
Acquisition Inc., a Delaware corporation ("FRA"), DO HEREBY CERTIFY AS FOLLOWS:

FIRST: That Merger Sub was incorporated on December 18, 1997, pursuant to
the Delaware General Corporation Law (the "Delaware Law"), and that FRA was
incorporated on October 30, 1995, pursuant to the Delaware Law.

SECOND: That an Acquisition Agreement and Plan of Merger (the
"Agreement"), dated as of December 29, 1997, by and among QuadraMed
Corporation, RH Acquisition Co. and Merger Sub, on the one hand, and Resource
Health Partners, L.P., Resource Holdings, Ltd. and FRA, on the other hand,
setting forth the terms and conditions of the merger of Merger Sub with and
into FRA (the "Merger"), has been approved, adopted, certified, executed and
acknowledged by each of the constituent corporations in accordance with Section
251 of the Delaware Law.

THIRD: That the name of the surviving corporation (the "Surviving
Corporation") shall be FRA Acquisition Inc.

FOURTH: That pursuant to the Agreement, the Certificate of Incorporation of
the Surviving Corporation shall be the Certificate of Incorporation of FRA
Acquisition Inc.

<PAGE> 93

FIFTH: That an executed copy of the Agreement is on file at the principal
place of business of the Surviving Corporation at the following address:

FRA Acquisition, Inc.
80 E. Sir Francis Drake Blvd., Suite 2A
Larkspur, CA 94939

SIXTH: That a copy of the Agreement will be furnished by the Surviving
Corporation, on request and without cost, to any stockholder of any constituent
corporation.

SEVENTH: That the Merger shall become effective upon the filing of this
Certificate of Merger with the Secretary of State of the State of Delaware.

IN WITNESS WHEREOF, each of Merger Sub and FRA has caused this Certificate
of Merger to be executed in its corporate name this ___ day of December, 1997.

FA Acquisition

By: ____________________________________
John V. Cracchiolo, Vice President
and Chief Financial Officer

ATTEST:

________________________________
Keith Roberts, Secretary

FA Acquisition Inc.

By: ____________________________________
Ted Ackroyd, President and Chief
Executive Officer

ATTEST:

________________________________
, Secretary

<PAGE> 94

EXHIBIT "E"

SUB A MERGER AGREEMENT

<PAGE> 95

AGREEMENT AND PLAN OF MERGER
OF
RH ACQUISITION CO.,
A DELAWARE CORPORATION,
AND
RESOURCE HOLDINGS, LTD.
A PENNSYLVANIA CORPORATION

THIS AGREEMENT AND PLAN OF MERGER dated as of December 29, 1997
(the "Merger Agreement") is between RH Acquisition Co., a Delaware corporation
("Acquisition"), and Resource Holdings, Ltd., a Pennsylvania corporation ("RH").
Acquisition and RH are sometimes referred to herein as the "Constituent
Corporations."

R E C I T A L S

A. Acquisition is a corporation duly organized and existing under
the laws of the State of Delaware and has an authorized and issued capital of
1,000 shares of Common Stock, $.001 par value per share ("Acquisition Common
Stock"). All shares of Acquisition Common Stock issued and outstanding are held
by QuadraMed Corporation, a Delaware corporation ("QuadraMed").

B. RH is a corporation duly organized and existing under the laws
of the State of Pennsylvania and has an authorized capital of 10,000,000 shares
of Common Stock, no par value ("RH Common Stock"). As of the date of this Merger
Agreement, 3,005,296.33 shares of RH Common Stock were issued and outstanding.
No other shares were outstanding as of the date of this Merger Agreement. All
shares of RH Common Stock issued and outstanding are held by Resource Health
Partners, L.P., a Delaware limited partnership ("RHP").

C. This Merger Agreement is being entered into pursuant to that
certain Acquisition Agreement and Plan of Merger dated as of December 29, 1997
(the "Acquisition Agreement") by and among QuadraMed, RHP, Acquisition, RH and
the other parties thereto, pursuant to which Acquisition will be merged with and
into RH (the "Merger") and QuadraMed will issue to RHP shares of Common Stock of
QuadraMed ("QuadraMed Shares") in exchange for all outstanding capital stock of
RH, all on the terms and conditions set forth in the Acquisition Agreement and
this Merger Agreement.

D. The respective Boards of Directors of Acquisition and RH have
approved this Merger Agreement and have directed that this Merger Agreement be
submitted to a vote of their respective stockholders and executed by the
undersigned officers.

NOW, THEREFORE, in consideration of the mutual agreements and
covenants set forth herein, the parties hereto agree, subject to the terms and
conditions hereinafter set forth, as follows:

<PAGE> 96

I. MERGER

1.1 Merger. In accordance with the provisions of this Merger
Agreement, the Pennsylvania Business Corporation Law and the Delaware General
Corporation Law, Acquisition shall be merged with and into RH (the "Merger"),
the separate existence of Acquisition shall cease and RH shall be, and is herein
sometimes referred to as, the "Surviving Corporation," and the name of the
Surviving Corporation shall be "Resource Holdings, Ltd."

1.2 Filing and Effectiveness. The Merger shall not become
effective until the following actions shall be completed:

(a) This Merger Agreement and Merger shall have been
adopted and approved by the directors and stockholders of each
Constituent Corporation in accordance with the requirements of
the Pennsylvania Business Corporation Law and the Delaware
General Corporation Law;

(b) All of the conditions precedent to the consummation of
the Merger specified in this Merger Agreement shall have been
satisfied or duly waived by the party entitled to satisfaction
thereof;

(c) An executed Articles of Merger and an executed Merger
Agreement meeting the requirements of the Pennsylvania Business
Corporation Law shall have been filed with the Secretary of State
of Pennsylvania; and

(d) An executed Certificate of Merger meeting the
requirements of the Delaware General Corporation Law shall have
been filed with the Secretary of State of the State of Delaware.

The Merger shall become effective as of the date and time when
the executed Articles of Merger meeting the requirements of the Pennsylvania
Business Corporation Law shall have been filed with the Pennsylvania Secretary
of State. The date and time when the Merger shall become effective, as
aforesaid, is herein called the "Effective Time of the Merger."

1.3 Effect of the Merger. Upon the Effective Time of the Merger,
the separate existence of Acquisition shall cease and RH, as the Surviving
Corporation, (i) shall continue to possess all of its assets, property, rights,
privileges, immunities, powers, interests, franchises and authority as
constituted immediately prior to the Effective Time of the Merger, (ii) shall be
subject to all actions previously taken by its and Acquisition's Board of
Directors, (iii) shall succeed, without other transfer, to all of the assets,
property, rights, privileges, immunities, powers, interests, franchises and
authority of Acquisition in the manner more fully set forth in the Pennsylvania
Business Corporation Law and the Delaware General Corporation Law, (iv) shall
continue to be subject to all of its debts, liabilities and obligations as
constituted immediately prior to the Effective Time of the Merger, and (v) shall
succeed, without other transfer, to all of the debts, liabilities and
obligations of Acquisition in the same manner as if RH had itself incurred them,
all as more fully provided under the applicable provisions of the Pennsylvania
Business Corporation Law and the Delaware General Corporation Law.

<PAGE> 97

II. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS

2.1 Articles of Incorporation. The Articles of Incorporation of
RH, attached hereto as Exhibit A, as in effect immediately prior to the
Effective Time of the Merger shall continue in full force and effect as the
Articles of Incorporation of the Surviving Corporation until duly amended in
accordance with the provisions thereof and applicable law.

2.2 Bylaws. The Bylaws of RH as in effect immediately prior to
the Effective Time of the Merger shall continue in full force and effect as the
Bylaws of the Surviving Corporation until duly amended in accordance with the
provisions thereof and applicable law.

2.3 Directors and Officers. The directors and officers of
Acquisition immediately prior to the Effective Time of the Merger shall be the
directors and officers of the Surviving Corporation until their successors shall
have been duly elected and qualified or until as otherwise provided by law, the
Articles of Incorporation of the Surviving Corporation or the Bylaws of the
Surviving Corporation.

III. MANNER AND BASIS OF CONVERSION OF STOCK

3.1 RH Shares. At the Effective Time of the Merger, each share of
RH Common Stock issued and outstanding immediately prior to the Effective Time
of the Merger will be canceled and extinguished and be converted automatically
into the right to receive a number of shares of common stock, par value $0.01
per share, of QuadraMed ("QuadraMed Common Stock") equal to the quotient
obtained by dividing (A) the amount obtained by dividing [$ ] by the Fair Market
Value (as defined below)(such quotient referred to as the "Closing
Consideration") by (B) the number of shares of RH Common Stock outstanding at
the Effective Time of the Merger. At the Effective Time of the Merger, all
rights in respect of such shares of RH Common Stock shall cease to exist, other
than the right to receive the Closing Consideration. Until surrendered, each
outstanding certificate, if any, which prior to the Effective Time of the Merger
represented issued and outstanding shares of RH Common Stock shall be deemed for
all corporate purposes to evidence the right to receive such amount. "Fair
Market Value" with respect to each of the shares of QuadraMed Common Stock shall
mean the average of the Daily Price per share of the shares of QuadraMed Common
Stock (adjusted for any stock splits or other reclassifications during the
applicable time period) for the twenty (20) consecutive trading days immediately
preceding the second business day prior to the Effective Time of the Merger.
"Daily Price" of the shares of QuadraMed Common Stock shall mean the last
reported sales price on such day reported by the National Association of
Securities Dealers, Inc.
Automated Quotation System.

3.2 Acquisition Common Stock. Upon the Effective Time of the
Merger, each share of Acquisition Common Stock issued and outstanding
immediately prior thereto shall, by virtue of the Merger and without any action
by Acquisition, the holder of such shares or any other person, be cancelled.

<PAGE> 98

3.3 Exchange of Certificates. After the Effective Time of the
Merger, the holder of RH Common Stock shall be entitled to receive in exchange
therefor a certificate representing the number of shares of QuadraMed Common
Stock into which the surrendered shares were converted as herein provided. Until
so surrendered, each outstanding certificate theretofore representing shares of
RH Common Stock shall be deemed for all purposes to represent the number of
whole shares of QuadraMed Common Stock into which such shares of RH Common Stock
were converted in the Merger.

The registered owner on the books and records of the Surviving
Corporation of any such outstanding certificate shall, until such certificate
shall have been surrendered for transfer or conversion or otherwise accounted
for to the Surviving Corporation, have and be entitled to exercise any voting
and other rights with respect to and to receive dividends and other
distributions upon the shares of QuadraMed Common Stock represented by such
outstanding certificate as provided above.

IV. GENERAL

4.1 Further Assurances. From time to time, the parties shall
execute and deliver such deeds, acknowledgements and other instruments, and
shall take or cause to be taken such further and other actions as shall be
appropriate or necessary in order to vest or perfect in or conform of record or
otherwise the title to and possession of all the assets, property, rights,
privileges, immunities, powers, interests, franchises and authority of
Acquisition and RH in the Surviving Corporation and otherwise to carry out the
purposes of this Merger Agreement, and the officers and directors of RH are
fully authorized in the name and on behalf of Acquisition or otherwise to take
any and all such action and to execute and deliver any and all such deeds and
other instruments.

4.2 Amendment. The Boards of Directors of the Constituent
Corporations may amend this Merger Agreement at any time prior to the Effective
Time of the Merger, provided that an amendment made subsequent to the adoption
of this Merger Agreement by the stockholders of either Constituent Corporation
shall not: (1) alter or change the amount or kind of shares, securities, cash,
property and/or rights to be received in exchange for or on conversion of all or
any of the shares of any class or series thereof of such Constituent
Corporation, (2) alter or change any term of the Articles of Incorporation of
the Surviving Corporation to be effected by the Merger, or (3) alter or change
any of the terms and conditions of this Merger Agreement if such alteration or
change would adversely affect the holders of any class or series of capital
stock of either Constituent Corporation.

4.3 Registered Office. The registered office of the Surviving
Corporation in the State of Pennsylvania shall be the registered office of RH,
and the registered agent of the Surviving Corporation shall be the registered
agent of RH.

4.4 Agreement. Executed copies of this Merger Agreement will be
on file at the principal place of business of the Surviving Corporation at 80
East Sir Francis Drake Blvd., Suite 2A, Larkspur, California, 94939, and copies
thereof will be furnished to any stockholder of either Constituent Corporation,
upon request and without cost.

<PAGE> 99

4.5 Governing Law. This Merger Agreement shall in all respects be
construed, interpreted and enforced in accordance with and governed by the laws
of the State of Pennsylvania and, so far as applicable, the merger provisions of
the Pennsylvania Business Corporation Law.

4.6 Counterparts. In order to facilitate the filing and recording
of this Merger Agreement, the same may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.

(Remainder of Page Intentionally Left Blank)

<PAGE> 100

IN WITNESS WHEREOF, this Merger Agreement is hereby executed on
behalf of the parties hereto and attested by their respective officers thereunto
duly authorized.

RH ACQUISITION CO.,
a Delaware corporation

By:
------------------------------------
John V. Cracchiolo, Vice President and
Chief Financial Officer

ATTEST:

- -----------------------------------
Keith M. Roberts, Secretary

RESOURCE HOLDINGS, LTD.,
a Pennsylvania corporation

By:
------------------------------------

ATTEST:

- -------------------------

[Signature Page to the Agreement and Plan of Merger]

<PAGE> 101

EXHIBIT "F"

ASSIGNMENT AND ASSUMPTION AGREEMENT

<PAGE> 102

ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT dated December 29, 1997
by and between QuadraMed Corporation, a Delaware corporation ("QuadraMed"), and
Resource Health Partners, L.P., a Delaware limited partnership ("RHP"), is
delivered pursuant to the terms of the Acquistion Agreement and Plan of Merger
(the "Merger Agreement"), dated as of December 29, 1997, by and among QuadraMed,
RH Acquisition Co., a Delaware corporation, and FA Acquisition Co., a Delaware
corporation, on the one hand, and RHP, Resource Holdings, Ltd., a Pennsylvania
corporation, and FRA Acquisition, Inc., a Delaware corporation, on the other
hand.

WHEREAS, pursuant to Section 2.15 of the Merger Agreement, RHP
and QuadraMed have agreed to enter into this Agreement pursuant to which RHP
shall transfer to QuadraMed the Assets (as defined below) and QuadraMed shall
assume the Liabilities (as defined below).

NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged:

Section 1. RHP does hereby convey, transfer, sell, assign,
deliver, and grant over unto QuadraMed, and QuadraMed does hereby accept and
take, effective upon the Closing, all right, title, and interest of RHP in and
to all of the assets and properties listed on Schedule A hereto (the "Assets").

Section 2. RHP hereby represents and warrants that RHP is the
lawful owner of the Assets; that RHP has the right to sell the Assets; and that
title to the Assets is hereby vested in RHP free and clear of all liens,
mortgages, pledges, encumbrances, security interests, equities, charges, and
restrictions of any nature whatsoever.

Section 3. QuadraMed does hereby assume and agree to perform and
discharge in accordance with the terms thereof and as required by the Merger
Agreement, and to hold RHP harmless from, the liabilities and obligations listed
on Schedule A hereto (the "Assumed Liabilities").

Section 4. RHP and QuadraMed each covenant to the other, and
their respective successors and assigns, that such party will at any time and
from time to time at the request of the other party duly execute and deliver, or
will cause to be executed and delivered, all such further acts, transfers,
assignments, novations, and conveyances, powers of attorney, and assurances, as
the other party may reasonably request to effect the sale, transfer, conveyance,
assignment, novation, and delivery of the Assets and the assumption of the
Assumed Liabilities.

<PAGE> 103

IN WITNESS WHEREOF, RHP and QuadraMed have caused this Assignment and
Assumption Agreement to be executed and delivered as of the day and year first
above written.

RESOURCE HEALTH PARTNERS, L.P.
BY: RHP GP, L.P., ITS GENERAL PARTNER
BY: RHP HEALTH, INC., ITS GENERAL PARTNER

By:
------------------------------------------
Name:
Title:

QUADRAMED CORPORATION

By:
------------------------------------------
Name:
Title:

SIGNATURE PAGE TO
ASSIGNMENT AND ASSUMPTION AGREEMENT

<PAGE> 104
EXHIBIT "G"

INVESTMENT REPRESENTATION LETTER
<PAGE> 105
QuadraMed Corporation
80 East Sir Francis Drake Blvd.
Suite 2A
Larkspur, California 94939
Attn: Keith Roberts

Resource Health Partners, L.P.
c/o J.P. Morgan Investment Corporation
101 California Street
San Francisco, CA 94111
Attn: John Van Hooser

Re: Transfer of QuadraMed Common Stock

Dear Sirs:

QuadraMed Corporation, a Delaware corporation ("QuadraMed"), and Resource
Health Partners, L.P., a Delaware limited partnership ("RHP"), have entered
into an Acquisition Agreement and Plan of Merger, dated as of December 29, 1997
(the "Merger Agreement"), pursuant to which QuadraMed acquired Resource
Holdings, Ltd., a Pennsylvania corporation and a wholly owned subsidiary of RHP
("Resource Holdings"), and FRA Acquisition, Inc., a Delaware corporation and a
wholly owned subsidiary of RHP ("FRA"). Pursuant to the Merger Agreement, RHP
received shares of QuadraMed's Common Stock (the "QuadraMed Shares") which
shares RHP or RHP GP, L.P., the general partner of RHP ("RHP GP"), now intend
to transfer to the undersigned, as a [general/limited] partner of RHP or of RHP
GP. In accordance with the terms and conditions of the Merger Agreement, RHP is
required to obtain this representation letter from the undersigned as a
condition to the transfer of such shares. Accordingly, the undersigned hereby
represents, warrants and covenants to RHP and QuadraMed as follows:

1. The undersigned is a general or limited partner of RHP or of RHP GP,
L.P.

2. The undersigned is aware that the QuadraMed Shares have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any applicable state securities laws, and understands and agrees that the
QuadraMed Shares may not be offered or sold in the absence of registration
under the Securities Act and any applicable state securities laws or an
exemption from the registration requirements of the Securities Act and any
applicable state securities laws. The undersigned will not transfer the
QuadraMed Shares in violation of the provisions of any applicable federal or
state securities laws.
<PAGE> 106
3. The undersigned is acquiring the QuadraMed Shares for the
undersigned's own account and for investment, and not with a view to the
distribution thereof or with any present intention of distributing or selling
any of the QuadraMed Shares except in compliance with the Securities Act.

4. If the undersigned is listed on Appendix A hereto, the
undersigned hereby agrees that it will not transfer any of the QuadraMed Shares
that are transferred to the undersigned by RHP until the publication by
QuadraMed of financial results that include at least thirty (30) days of
combined operations of QuadraMed, Resource Holdings, FRA and their respective
subsidiaries. The undersigned understands that QuadraMed or RHP will notify it
promptly upon the publication of such financial results.

5. The undersigned also understands that stop transfer instructions
will be given to QuadraMed's transfer agent with respect to the QuadraMed
Shares transferred to the undersigned and that there will be placed on the
certificates for such QuadraMed Shares, or any substitutions therefor, a Legend
stating in substance:

The foregoing representations are true and accurate as of the date
hereof.

Dated:
--------------------------------

Print Name of [General/Limited Partner:
-----------------------------

Authorized Signature:
-----------------------------

Print Title (if applicable):
-----------------------------

Print name of any other person whose
signature is required:
-----------------------------

Signature:
-----------------------------

Title (if applicable):
-----------------------------

<PAGE> 107

APPENDIX A

LIST OF "AFFILIATES"

J.P. Morgan Investment Corporation
Mutual Group, Ltd.
Coventry Corporation
Fred Rothenberg
Ted Ackroyd
Craig Camp
Rothenberg Trust
Rothenberg Family Partnership
<PAGE> 108

EXHIBIT "H"

OPINION OF PROSKAUER ROSE LLP
<PAGE> 109
[PROSKAUER ROSE LLP LETTERHEAD]

December 29, 1997

QuadraMed Corporation
RH Acquisition Co.
FA Acquisition Co.
80 E. Sir Francis Drake Blvd., Ste. 2A
Larkspur, California 94939

Ladies and Gentlemen:

We have acted as counsel for Resource Health Partners, L.P., a Delaware
limited partnership ("RHP") and FRA Acquisition, Inc., a Delaware corporation
("FRA"), in connection with the acquisition of the business of RHP by QuadraMed
Corporation, a Delaware corporation ("QuadraMed"), by means of a (i) merger of
RH Acquisition Co., a Delaware corporation and wholly owned subsidiary of
QuadraMed ("Sub A"), with and into Resource Holdings, Ltd., a Pennsylvania
corporation ("Resource Holdings") and (ii) a merger of FR Acquisition Co., a
Delaware corporation and wholly owned subsidiary of QuadraMed ("Sub B"), with
and into FRA, pursuant to the terms and conditions of the Acquisition Agreement
and Plan of Merger, dated as of December 29, 1997, between RHP, FRA and
Resource Holdings, on the one hand, and QuadraMed, Sub A and Sub B, on the
other hand (the "Merger Agreement"). QuadraMed, Sub A and Sub B are
collectively referred to herein as the "Transferee." This opinion is being
rendered to you pursuant to Section 8.3 of the Merger Agreement. Capitalized
terms used herein and not otherwise defined shall have the same meaning given
to such terms in the Merger Agreement.

In connection with the opinions expressed herein, we have reviewed
execution copies of (i) the Merger Agreement, (ii) the Escrow Agreement
referred to therein, and (iii) the Registration Rights Agreement referred to
therein. We have also reviewed originals or copies of such corporate documents
or records of the RHP and FRA and such other agreements and documents as we
have deemed necessary or appropriate as a basis for the opinions hereinafter
expressed.

QuadraMed Corporation
RH Acquisition Co.
FA Acquisition Co. Page 2
December 29, 1997

government officials and of officers of RHP, FRA and Resource Holdings. We have
assumed for the purposes of this opinion letter the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of the
documents submitted to us as originals, the conformity to the original
documents of all documents submitted to us as certified, facsimile or
photostatic copies, and the authenticity of the originals of such copies.

In rendering these opinions, we have also assumed that the Merger
Agreement, the Escrow Agreement, the Registration Rights Agreement and all
other agreements executed in connection therewith have been duly and validly
executed and delivered by or on behalf of each party thereto other than RHP and
FRA, that each party thereto other than RHP and FRA has the power to enter into
and perform its obligations thereunder and that such agreements constitute
legal, valid, binding and enforceable obligations of each such party.

Whenever a statement herein is qualified by the expressions "known to
us," "to our knowledge," "we are not aware" or a similar phrase or expression
with respect to our knowledge of matters of fact, it is intended to mean that
our knowledge is based upon the records, documents, instruments and
certificates described above and the current actual knowledge of the attorneys
in this firm who have devoted substantive attention to the transactions
contemplated by the Merger Agreement (but not including any constructive or
imputed notice of any information) and that we have not otherwise undertaken
any independent investigations for the purpose of rendering this opinion.

This opinion letter relates solely to the laws of the State of New
York, the General Corporation Law of the State of Delaware (the "DGCL"), the
Delaware Revised Uniform Limited Partnership Act (the "DRULPA") and applicable
federal laws of the United States, and we express no opinion with respect to
the effect or applicability of the laws of other jurisdictions.

The opinions expressed in paragraph number 2 are solely based upon our
review of the schedule of limited partners as certified to us by the general
partner of RHP and the stock certificate and minute books of FRA.

Based upon and subject to the foregoing, and subject to the further
assumptions, limitations, qualifications and exceptions set forth herein, we
are of the opinion that:

1. RHP is a validly existing limited partnership and is in good
standing under the laws of Delaware and FRA is duly incorporated and validly
existing and in good standing as a corporation under the laws of Delaware. Each
of RHP and FRA has the requisite partnership or
<PAGE> 111

PROSKAUER ROSE LLP

QuadraMed Corporation
RH Acquisition Co.
FA Acquisition Co.
December 29, 1997 Page 3

corporate power, as the case may be, and authority to own its respective
properties and to conduct its respective businesses as, to our knowledge, they
are presently conducted.

2. To our knowledge, the limited partners of RHP are as set forth
on Schedule 3.6 to the Merger Agreement. The authorized capital stock of FRA
consists of 10,000 shares of Common Stock, par value $0.01 per share, of which,
to our knowledge, 9,000 shares are outstanding as of the date hereof. The
outstanding shares of capital stock of FRA are duly authorized, validly issued,
fully paid and non-assessable and are held of record by RHP.

3. Each of RHP and FRA has the requisite partnership or corporate
power, as the case may be, and authority to execute, deliver and perform the
Merger Agreement. The Merger Agreement has been duly authorized by each of RHP
and FRA, has been duly executed and delivered by an authorized officer of each
of RHP and FRA and constitutes a legal, valid and binding obligation of each of
RHP and FRA, enforceable by the Transferee against RHP and FRA in accordance
with its terms, subject to (i) bankruptcy, insolvency, reorganization,
arrangement, moratorium, fraudulent conveyance, fraudulent transfer and other
similar laws affecting the rights of creditors generally, and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). RHP has the requisite partnership power and
authority to execute, deliver and perform the Escrow Agreement and the
Registration Rights Agreement. Each of the Escrow Agreement and the
Registration Rights Agreement has been duly and validly authorized by RHP, has
been duly executed and delivered by an authorized officer of RHP and
constitutes a legal, valid and binding obligation of RHP, enforceable by the
Transferee against RHP In accordance with its terms, subject to (i) bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent conveyance,
fraudulent transfer and other similar laws affecting the rights of creditors
generally; and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

4. Neither the execution or delivery by RHP or FRA of the Merger
Agreement, and in the case of RHP, the execution and delivery of the Escrow
Agreement and the Registration Rights Agreement, nor the consummation by RHP or
FRA of the transactions contemplated thereby will (i) violate any provision of
the First Amended and Restated Agreement of Limited Partnership, as amended, or
RHP or the Certificate of Incorporation or Bylaws of FRA, (ii) violate or be in
conflict with any federal or New York laws or the DGCL or the DRULPA which to
our knowledge are applicable to RHP or FRA, or (iii) to our knowledge, violate
or contravene any judgment, decree, injunction or order of any federal or New
York court or any arbitrator or governmental agency or authority, having
jurisdiction over RHP or FRA.
<PAGE> 112
PROSKAUER ROSE LLP

QuadraMed Corporation
RH Acquisition Co.
FA Acquisition Co. Page 4
December 29, 1997

5. No consents, approvals or authorizations of or filings with any
governmental authority are required on the part of RHP or FRA in connection
with the execution, delivery and performance at the Closing by RHP and FRA of
the Merger Agreement, and the delivery and performance of the Escrow Agreement
and Registration Rights Agreement by RHP, except for such consents, approvals,
authorizations or filings (i) which have been obtained, waived or made prior to
the date hereof, (ii) referred to in Section 3.9 of the Merger Agreement, or
(iii) are required to comply with federal or state securities laws. We express
no opinion with respect to any consents, approvals, authorizations and filings
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
the rules promulgated thereunder.

6. We are not aware of any action, proceeding or governmental
investigation pending, or threatened in writing, against RHP or FRA which
questions the validity or enforceability of the Merger Agreement, the Escrow
Agreement and the Registration Rights Agreement (collectively, the "Transaction
Documents"), the right of RHP or FRA to enter into the Merger Agreement, or the
right of RHP to enter into the Escrow Agreement and the Registration Rights
Agreement.

The foregoing opinions are subject to the following additional
limitations, qualifications, assumptions and exceptions:

a. We express no opinion as to provisions of the Transaction Documents
purporting to establish an evidentiary standard or to authorize conclusive
determinations by the Transferee or any other Person or allowing the Transferee
or any other Person to make determinations in its sole discretion.

b. We also express no opinion as to provisions of the Transaction
Documents:

(1) pursuant to which RHP or FRA agree to make payments without
set-off, defense or counterclaim;

(2) relating to indemnification, contribution or exculpation, to the
extent any such provision is contrary to public policy or prohibited by law
(including, without limitation, federal and state securities laws);

(3) providing for the exclusive jurisdiction of a particular court
or purporting to waive rights to trial by jury, service of process or
objections to the laying of venue or to forum on the basis of forum non
conveniens, in connection with any litigation arising out of or pertaining to
the Transaction Documents;

<PAGE> 113
PROSKAUER ROSE LLP

QuadraMed Corporation
RH Acquisition Co.
FA Acquisition Co. Page 5
December 29, 1997

(4) purporting to waive either illegality as a defense to the
performance of contract obligations or any other defense to such performance
which cannot, as a matter of law, be effectively waived;

(5) permitting modification of the Transaction Documents only by
means of an agreement in writing signed by the parties thereto;

(6) requiring payment of attorneys' fees, except to the extent a
court determines such fees to be reasonable;

c. Our opinions in clause (ii) of paragraph 4 above and in paragraph 5
above are limited to laws and regulations normally applicable to transactions
of the type contemplated in the Transaction Documents and do not extend to
licenses, permits and approvals necessary for the conduct of RHP's business and
FRA's business. In addition and without limiting the previous sentence, we
express no opinion herein with respect to the effect of any land use,
environmental or similar law, any state or federal antitrust law or any local
law. Further, we express no opinion as to the effect of or compliance with any
state or federal laws or regulations applicable to the transactions
contemplated by the Transaction Documents because of the nature of the business
of any party thereto other than RHP OR FRA.

D. We also express no opinion as to Section 12.8 of the Merger Agreement
and similar provisions of the other Transaction Documents to the extent that
they purport to exclude conflict of law principles under New York law.

This opinion is rendered as of the date first written above solely for
your benefit in connection with the Merger Agreement and may not be delivered
to, quoted or relied upon by any person other than you, or for any other
purpose, without our prior written consent. Our opinion is expressly limited to
the matters set forth above and we render no opinion, whether by implication or
otherwise, as to any other matters relating to RHP and FRA. We assume no
obligation to advise you of facts, circumstances, events or developments which
hereafter may be brought to our attention and which may alter, affect or modify
the opinions expressed herein.

Very truly yours,

/s/PROSKAUER ROSE LLP
-----------------------
Proskauer Rose LLP
<PAGE> 114

EXHIBIT "I"

OPINION OF PENNSYLVANIA COUNSEL

<PAGE> 115
[CRAWFORD WILSON RYAN & AGULNICK LETTERHEAD]

December 29, 1997

QuadraMed Corporation
RH Acquisition Company
FA Acquisition Company
80 East Sir Francis Drake Boulevard
Suite 2A
Larkspur, California 94939

Gentlemen:

We have acted as counsel for Resource Holdings, Ltd., a Pennsylvania
Corporation ("RHL"), in connection with a merger agreement involving
RH Acquisition, Co.

In connection with the foregoing transaction we have reviewed the following
documents:

1. Certificate of Incorporation, By-Laws, Written Consent of Sole
Shareholder and certified Resolutions of the Board of Directors of RHL.

2. Merger Agreement (including the agreement referred to therein to which
RHL is a party.)

3. Articles of Merger, Agreement and Plan of Merger.

The documents listed in Paragraphs 1 through 3 above are hereinafter referred
to collectively as the Documents."

We have reviewed the Documents and the Articles of Incorporation, Bylaws and
resolutions of RHL's Board of Directors and shareholder, and a Certificate of
Good Standing of RHL ("RHL's Organizational Documents"). In addition, we have
made inquiries of the President and the Chief Financial Officer of RHL as to
each warranty and representation with respect to RHL and its capital stock,
stockholder, business and affairs contained in the Documents. The veracity of
the responses to these inquiries we have no reason to doubt, but we have made
no independent investigation thereof. The review of the Documents and RHL's
Organizational Documents and the inquiries made of the President and the Chief
Financial Officer of RHL collectively constitute, and are referred to as, "Our
Investigation." We have also made such examination of law as we have deemed
necessary or appropriate in connection with this opinion.

<PAGE> 116
December 29, 1997
Page 2

Except for Documents signed by RHL, we have assumed the genuineness of all items
submitted to us as copies, the legal capacity of all natural persons, and the
authenticity of all signatures appearing on any documents relied upon by us.

As a result of Our Investigation, and limited thereby, it is our opinion that:

1. RHL is validly existing and in good standing in the Commonwealth of
Pennsylvania.

2. RHL has all legal powers, authorizations and approvals necessary to carry
out its business as now conducted.

3. Resource Holdings, Ltd., has the requisite power and authority to execute,
deliver, and perform the Merger Agreement. The Merger Agreement (including the
agreements referred to therein to which RHL is a party), has been duly
authorized by Resource Holdings, Ltd., has been duly executed and delivered by
an authorized officer of Resource Holdings, Ltd., and constitutes a legal,
valid, and binding obligation of Resource Holdings, Ltd., enforceable by the RH
Acquisition Co., of Delaware against Resource Holdings, Ltd., in accordance
with its terms, subject to (i) bankruptcy, insolvency, reorganization,
arrangement, moratorium, fraudulent conveyance, and other similar laws
affecting the rights of creditors generally; and (ii) general principles of
equity [regardless of whether such enforceability is considered in a proceeding
in equity or at law].

4. To the best of our knowledge and belief, there is no suit, action or
proceeding pending or threatened against RHL or any of RHL's property (or the
shares of capital stock of RHL) or rights which, if adversely determined could;
(i) materially impair RHL's right to carry on its business substantially as now
conducted; (ii) materially and adversely affect RHL's financial condition;
(iii) materially and adversely affect the validity of the Documents; or (iv)
materially and adversely affect the consummation of the documents contemplated
by the Merger Agreement.

5. The underlying transaction constituting the merger does not require the
authorization, consent, or approval of any governmental body or agency.

6. RHL's authorized capital stock consists of 10,000,000 shares of common
stock, no par value (the "Common Stock"), of which 3,005,296.33 shares are
issued and outstanding on the date hereof, and all such shares of Common Stock
are owned by Resource Health Partners, L.P. All such outstanding shares of
Common Stock have been duly authorized, are validly issued, and are fully paid
and non-assessable. The relative rights, restrictions, privileges, and
preferences of the Common Stock are stated in the Articles of Incorporation of
RHL. To the best of our knowledge, RHL has no options, warrants, or rights to
purchase or acquire shares of its capital stock authorized, issued, or
outstanding. To the best of our

<PAGE> 117
December 29, 1997
Page 3

knowledge, there are no preemptive rights with respect to the issuance or sale
of RHL's capital stock, and no restrictions on the transfer of the shares of
Common Stock.

7. Neither the execution or delivery by Resource Holdings, Ltd., of the
Merger Agreement nor the consummation by them of the transactions contemplated
thereby will (i) violate any provision of the Limited Partnership agreement of
RHP or the Certificate of Incorporation or Bylaws of Resource Holdings, Ltd.;
(ii) violate or be in conflict with any federal or Pennsylvania laws; or (iii)
to our knowledge violate or contravene any judgment, decree, injunction, or
order of any federal or Pennsylvania court or any arbitrator or governmental
agency or authority having jurisdiction over Resource Holdings, Ltd..

The opinions expressed above are subject to the following qualifications:

1. Our opinion is subject to the effect of bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws relating to, or
affecting, or adjusting the rights of creditors generally.

2. Our opinion is subject to limitations imposed by general principles
of equity upon the specific enforceability of any of the remedies, covenants or
other provisions contained in the Documents, and upon the availability of
injunctive relief or other equitable remedies, and the application of
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity).

3. Certain rights and remedies contained in the Documents may be
rendered ineffective, or limited, by applicable laws or judicial decisions
governing such provisions, but such laws or judicial decisions do not, for any
legal or factual reasons of which we are presently aware, make the Documents
inadequate for the practical realization of the benefits intended to be
provided by the Documents.

4. Our opinion is based upon, and relies upon, the current status of the
laws of the Commonwealth of Pennsylvania and the United States of America only,
and in all respect is subject to future legislation and judicial decisions, and
we assume no obligation to advise you of changes in matters of fact or law
which may hereafter come to our attention.

5. The terms "to our knowledge" or "to the best of our knowledge" mean
that we have no actual knowledge to the contrary and that, as to opinions
rendered herein which are prefaced by either of such terms, we have relied, as
to matters of fact solely on Our Investigation.

The foregoing opinions are rendered solely for your benefit and the benefit of
any assignee of your rights in the Documents in connection with the referenced
transaction and may not

<PAGE> 118
December 29, 1997
Page 4

be relied on by any other person, or used for any other purpose, without our
prior, written consent.

This opinion is provided to you as a legal opinion and not as a guarantee of
the matters discussed herein. Our opinion is limited to the matters expressly
stated herein, and no other opinions may be implied or inferred. Moreover,
regardless of the states in which members of this firm are licensed to
practice, we express no opinion as to the laws of any jurisdiction other than
the Commonwealth of Pennsylvania.

This opinion is rendered as of the date set forth above. We expressly disclaim
any obligation to advise you of any changes in the circumstances, laws, or
events that may occur after this date or otherwise to update this opinion.

Sincerely,

CRAWFORD WILSON RYAN & AGULNICK

/s/ KEVIN J. RYAN
- -----------------
Kevin J. Ryan

KJR pma

<PAGE> 119

EXHIBIT "J"

EMPLOYMENT AGREEMENT

<PAGE> 120
FORM OF
EMPLOYMENT AGREEMENT

QuadraMed Corporation, a Delaware corporation (the "Employer"), and
[ ] (the "Executive"), agree as follows:

1. Employment and Duties. The Employer shall employ the Executive,
and the Executive shall serve the Employer, during the term set forth in Section
2 below. The Executive shall use his best efforts to promote the interests of
the Employer, and he shall perform his duties faithfully and diligently,
consistent with sound business practices. Subject to the following sentence, the
Executive shall devote all his business time to the performance of his duties
for the Employer and shall not engage in any other business activities (whether
or not competitive with business of the Employer) that interfere with the
performance of his duties under this Employment Agreement (the "Agreement").
Nothing in this Agreement shall be deemed to require the Executive to serve the
Employer outside the Los Angeles metropolitan area (except for business trips in
the ordinary course of business), or to limit the Executive's ability to manage
his personal business affairs (it being understood that the management of such
personal business affairs shall not interfere with the performance of the
Executive's duties under this Agreement).

2. Term of Employment. The Employer shall employ Executive under
this Agreement for a period commencing on the date of this Agreement and
expiring at the close of business on December _____, 1998 (the "Initial
Termination Date"), except that the Executive's employment shall be subject to
earlier termination under Section 4 below. The Employer shall continue to employ
the Executive under this Agreement after the Initial Termination Date for
successive one (1) year periods ending on succeeding anniversary dates of the
Initial Termination Date, unless the Employer or the Executive shall have given
written notice to the other at least ninety (90) days before the Initial
Termination Date or the applicable anniversary date of the Initial Termination
Date that it or he wishes to terminate this Agreement on the Initial Termination
Date or that anniversary date, as the case may be.

3. Compensation; Benefits.

(a) As compensation for all services the Executive renders
during his employment under this Agreement, the Employer shall pay the Executive
a salary at the rate of $[ ] a year (payable in equal installments
according to the Employer's customary payroll practices). The Employer will
deduct and withhold from the salary payable to the Executive under this Section
3(a), any and all applicable federal, state and local income and employment
withholding taxes and any other amounts required to be deducted or withheld by
the Employer under applicable statute or regulation.

(b) The Executive shall be eligible for commissions
reasonably similar to the Executive's commission schedule under his employment
with Rothenberg Health Systems Inc. immediately prior to this Agreement.

<PAGE> 121
(c) The Executive will, during his employment under this
Agreement, be permitted to participate in such pension, profit sharing, bonus,
life insurance, hospitalization, major medical and other employee benefit plans
of the Employer that may be in effect from time to time, to the extent the
Executive is eligible under the terms of those plans.

4. Termination.

(a) The Executive's employment shall terminate upon his
death, and may be terminated at any earlier time at the option of the Employer
in its sole and absolute discretion. The Executive may not at any time during
his employment under this Agreement and for the six (6) month period thereafter,
engage or become interested (as owner, lender, stockholder, partner, director,
officer, employee, consultant or otherwise) in any business that is in
competition with the healthcare software business of the Employer conducted by
the Employer as of the date hereof, taking into account the transactions
contemplated by that certain Acquisition Agreement and Plan of Merger by and
among the Employer, RH Acquisition Co. and FR Acquisition Co, on the one hand,
and Resource Health Partners, L.P. and FRA Acquisition, Inc., on the other hand
(the "Employer's Business"), except that the Executive may hold not more than
one percent (1%) of the outstanding securities of any class of any publicly-held
company engaged in that business; provided, however, that if this Agreement
terminates by its terms at the expiration of the Initial Termination Date (or
any succeeding anniversary date upon renewal) and either party elects not to
renew this Agreement, the Executive may compete with the Employer's Business, in
which case the Executive shall only be entitled to the amount of his salary and
other benefits accrued to the date of termination. On the termination of the
Executive's employment as a result of his death, or at the Employer's option as
a result of the Executive's disability or for cause, the Employer shall pay the
Executive (or his named beneficiary or estate) the amount of his salary and
other benefits accrued to the date of termination (with no reduction for any
period of disability prior to termination). On the termination of the
Executive's employment at the Employer's option for any other reason, the
Employer shall continue to pay the Executive (or his named beneficiary or
estate) the amount of his salary, the amount of his commissions earned in the
previous six (6) months prior to such termination and other benefits in
accordance with this Agreement for a period of six (6) months or, if sooner,
until the Executive shall first engage or become interested (as owner, lender,
stockholder, partner, director, officer, employee, consultant or otherwise) in
any business that is in competition with the Employer's Business (it being
understood that he shall not be deemed so to be engaged or interested in a
business if he holds one percent (1%) or less of the outstanding securities of
any class of any publicly-held company). The right of the Employer to terminate
the payments referred to in the preceding sentence should the Executive engage
in any of the activities referred to in the preceding sentence shall be
non-exclusive and in addition to any legal or equitable remedies available to
the Employer. Except as specifically provided in this Agreement, the Employer
shall have no other obligation to the Executive (or his named beneficiary or
estate).

(b) As used in this Agreement, (i) the term "disability"
means the failure of the Executive substantially to perform his duties and
obligations under this Agreement for ninety (90) consecutive days because of any
mental or physical incapacity, as determined by a physician

-2-
<PAGE> 122
mutually agreed upon by the Employer and the Executive, or, if after thirty (30)
days they are unable to agree, by a physician selected by the American
Arbitration Association, and (ii) the term "cause" means (a) any action by the
Executive that constitutes dishonesty, a violation of law or a fraud against the
Employer, (b) the indictment of the Executive for a felony, (c) willful
misconduct, drunkenness or abuse of any controlled substance by the Executive,
(d) any violation by the Executive of his fiduciary obligations, if any, to the
Employer or (e) any material breach by the Executive of this Agreement or any
other agreement between him, on the one hand, and the Employer, on the other
hand.

5. Expenses. During the Executive's employment under this
Agreement, the Employer shall reimburse the Executive for reasonable business
expenses incurred by him in the performance of his duties on behalf of the
Employer upon presentation of vouchers or other evidence of such expenses in
accordance with the policies of the Employer.

6. Vacations and Holidays. The Executive will be (i) credited with
two (2) weeks accrued vacation as of the date of this Agreement and (ii)
entitled to four (4) weeks paid vacation each fiscal year in accordance with the
vacation policies of the Employer in effect for its employees from time to time.
Vacation must be taken by the Executive at such time or times as approved by the
Chairman of the Board, Chief Executive Officer, President or Chief Operating
Officer of the Employer. The Executive will also be entitled to the paid
holidays set forth in the Employer's policies.

7. Restriction on Hiring; Confidentiality.

(a) The Executive may not at any time during his employment
under this Agreement, or within six (6) months after the termination of
employment for any reason, hire on his own behalf, or on behalf of any other
enterprise, any individual who was an employee of the Employer during the six
(6) month period to the termination of employment.

(b) The Executive shall at all times during his employment
and thereafter hold in confidence all Confidential Information (as defined
below) that may have come or may come into his possession or within his
knowledge concerning the products, services, processes, businesses, suppliers,
customers and clients of the Employer. The Executive agrees that neither he nor
any person or enterprise controlled by him will for any reason directly or
indirectly, for himself or any other person, use or disclose any trade secrets,
proprietary or confidential information, inventions, processes or procedures,
patents, trademarks, trade names, customer lists, service marks, service names,
copyrights, applications for any of the foregoing or licenses or other rights in
respect thereof (collectively, "Confidential Information"), owned or used by, or
licensed to, the Employer, provided that the Executive may disclose Confidential
Information that has become generally available to the public or other than as a
result of a breach of this Agreement by the Executive or pursuant to an order of
a court of competent jurisdiction or of a governmental agency, department or
commission. Upon termination of his employment under this Agreement, the
Executive shall promptly surrender to the Employer all documents that contain
Confidential Information and that are within his possession or control.

-3-
<PAGE> 123
8. Remedy. The Executive acknowledges that the remedy at law for
breach of any provision of this Agreement would be inadequate and that, in
addition to any other remedy the Employer may have for such a breach, the
Employer shall be entitled to an injunction restraining any such breach or
threatened breach.

9. Management of Employer. Except as specifically provided in this
Agreement, nothing in this Agreement shall (i) give the Executive the right to
be employed by or to continue in the employ of the Employer or prevent the
termination of his employment by the Employer at any time or (ii) limit the
right of the Board of Directors (or other governing body) of the Employer to
manage the business and affairs of the Employer.

10. Miscellaneous.

(a) This Agreement shall be binding upon, and inure to the
benefit of, the parties' respective successors, assigns, heirs and legal
representatives.

(b) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed wholly in Delaware.

(c) If any provision of this Agreement, or the application
of any provision to any person or circumstance, shall for any reason or to any
extent be invalid or unenforceable, the remainder of this Agreement and the
application of that provision to other persons or circumstances shall not be
affected, but shall be enforced to the full extent permitted by law.

(d) The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.

(e) Except as otherwise expressly provided in this
Agreement, any dispute arising under or in connection with this Agreement shall
be resolved by binding arbitration in accordance with the rules and procedures
of the American Arbitration Association by a single neutral arbitrator appointed
by the American Arbitration Association or its president. Each such arbitration
shall be held in San Francisco, California. Judgment upon the arbitrator's award
may be entered in any court having jurisdiction. Each party shall bear its or
his own costs of any arbitration or litigation, including, without limitation,
attorney's fees and expenses, and the costs of the arbitration itself and of the
arbitrator shall be borne equally by each party, in each case unless determined
otherwise by the arbitrator.

(f) Any notice or other communication under this Agreement
shall be in writing and shall be considered given when mailed by registered
mail, return receipt requested, to the parties at the following addresses (or at
such other address as a party may specify by notice to the other):

-4-
<PAGE> 124
If to the Employer: QuadraMed Corporation
Attention: Keith M. Roberts
80 East Sir Francis Drake Boulevard, Suite 2A
Larkspur, California 94939

If to the Executive:
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________

(g) This Agreement may be executed in counterparts, each of
which shall be considered an original, but both of which together shall
constitute the same instrument.

(h) This Agreement shall be assigned to and shall inure to
the benefit of any successor to substantially all the assets and business of the
Employer as a going concern, whether by merger, consolidation, liquidation or
sale of substantially all the assets of the Employer or otherwise, and the
Employer shall cause its successors to assume its obligations under this
Agreement (but no such assignment shall relieve it of its obligations under this
Agreement).

(i) This Agreement constitutes the entire understanding of
the parties with respect to its subject matter, supersedes all existing
agreements between them with respect to that subject matter and cannot be
changed or terminated orally.

QUADRAMED CORPORATION

By:_________________________________________
Name:_______________________________________
Title:______________________________________

____________________________________________

-5-
<PAGE> 125

EXHIBIT "K"

OPINION OF BROBECK, PHLEGER & HARRISON LLP

<PAGE> 126

[BROBECK PHLEGER & HARRISON LLP LETTERHEAD]

December 29, 1997

Resource Health Partners, L.P.
Resource Holdings, Ltd.
FRA Acquisition Inc.
c/o J.P. Morgan Investment Corporation
101 California Street
San Francisco, CA 94111

Ladies and Gentlemen:

We have acted as counsel for QuadraMed Corporation, a Delaware
corporation ("QuadraMed"), RH Acquisition Co., a Delaware corporation ("Sub A")
and FA Acquisition Co., a Delaware corporation ("Sub B" and, together with
QuadraMed and Sub A, the "Companies"), in connection with the acquisition by
QuadraMed of the business of Resource Health Partners, L.P., a Delaware limited
partnership ("RHP") by means of a (i) merger of Sub A with and into Resource
Holdings, Ltd., a Delaware corporation and wholly owned subsidiary of RHP
("Resource Holdings"), and (ii) a merger of Sub B with and into FRA Acquisition
Inc., a Delaware corporation and wholly owned subsidiary of RHP ("FRA"),
pursuant to the terms and conditions set forth in the Acquisition Agreement and
Plan of Merger dated as of December 29, 1997 between the Companies, on the one
hand, and Seller, Resource Holdings and FRA, on the other hand (the "Merger
Agreement"). RHP, Resource Holdings and FRA are collectively referred to herein
as the "Seller." This opinion is being rendered to you pursuant to Section 9.4
of the Merger Agreement. Capitalized terms used herein and not otherwise defined
shall have the same meaning given to such terms in the Merger Agreement.

In connection with the opinions expressed herein, we have
reviewed the following:

(i) the Merger Agreement;

(ii) the Escrow Agreement, dated as of December 29,
1997 by and among the Companies and RHP;

<PAGE> 127

[BROBECK PHLEGER & HARRISON LLP LETTERHEAD]

Resource Health Partners, L.P. Page 2
December 29, 1997

(iii) the Registration Rights agreement, dated as of
December 29, 1997, by and among QuadraMed and
certain stockholders of QuadraMed;

(iv) the officer's certificate, dated December 29,
1997 (the "Officer's Certificate"); and

(v) originals or copies of such corporate documents
or records of the Companies and such other
documents as we have deemed necessary or
appropriate as a basis for the opinions
hereinafter expressed.

In connection with the opinions expressed herein we have made
such examination of matters of law and of fact as we considered appropriate or
advisable for purposes hereof. As to matters of fact material to the opinions
expressed herein, we have relied upon the representations and warranties as to
factual matters contained in and made by the Companies pursuant to the Merger
Agreement and upon certificates and statements of government officials and of
officers of the Companies, including the Officer's Certificate. We have assumed
for the purposes of this opinion letter the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of the documents submitted
to us as originals, the conformity to the original documents of all documents
submitted to us as certified, facsimile or photostatic copies, and the
authenticity of the originals of such copies.

In rendering these opinions, we have also assumed that the Merger
Agreement, the Escrow Agreement and all other agreements executed in connection
therewith (the "Transaction Documents") have been duly and validly executed and
delivered by or on behalf of each party thereto other than the Companies, that
each party thereto other than the Companies has the power to enter into and
perform its obligations thereunder and that the Transaction Documents constitute
legal, valid, binding and enforceable obligations of each such party.

Whenever a statement herein is qualified by the expressions
"known to us," "to our knowledge," "we are not aware" or a similar phrase or
expression with respect to our knowledge of matters of fact, it is intended to
mean that our knowledge is based upon the records, documents, instruments and
certificates described above and the current actual knowledge of the attorneys
in this Firm who have devoted substantive attention to the transactions
contemplated by the Transaction Documents (but not including any constructive or
imputed notice of any information) and that we have not otherwise undertaken any
independent investigations for the purpose of rendering this opinion.

<PAGE> 128

[BROBECK PHLEGER & HARRISON LLP LETTERHEAD]

Resource Health Partners, L.P. Page 3
December 29, 1997

This opinion letter relates solely to the laws of the State of
New York, the General Corporation Law of the State of Delaware and applicable
federal laws of the United States, and we express no opinion with respect to the
effect or applicability of the laws of other jurisdictions.

Based upon and subject to the foregoing, and subject to the
further assumptions, limitations, qualifications and exceptions set forth
herein, we are of the opinion that:

1. The Companies are each corporations duly organized, validly
existing and in good standing under the laws of the State of Delaware, and the
Companies have the requisite corporate power and authority to own their
properties and to conduct their businesses as, to our knowledge, they are
presently conducted.

2. The authorized capital stock of QuadraMed consists of
20,000,000 shares of Common Stock, $0.01 par value, 10,216,539 shares of which
are outstanding as of the date hereof, and 5,000,000 shares of Preferred Stock,
$0.01 par value, no shares of which are outstanding as of the date hereof. The
outstanding shares of capital stock of QuadraMed Corporation are duly
authorized, validly issued, fully paid and non-assessable.

3. The Companies each have the requisite corporate power and
authority to execute, deliver and perform the Merger Agreement and the other
Transaction Documents and the transactions contemplated thereby, including,
without limitation, issuance of the QuadraMed Shares in the Mergers. Each of the
Merger Agreement and the other Transaction Documents have been duly and validly
authorized by the Companies, have been duly executed and delivered by an
authorized officer of the Companies and constitute a legal, valid and binding
obligation of the Companies, enforceable by the Seller against the Companies in
accordance with their terms, subject to or limited by (i) bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent transfer and
other similar laws affecting the rights of creditors generally and (ii) general
equitable principles.

4. Neither the execution or delivery by the Companies of the
Transaction Documents nor the consummation by the Companies at the Closing of
the transactions contemplated thereby will (i) violate any provision of the
Companies' Certificates of Incorporation or Bylaws, (ii) violate or be in
conflict with any law which to our knowledge is applicable to the Companies, or
(iii) to our knowledge, violate or contravene any judgment, decree, injunction
or order of any court, or any arbitrator or governmental agency or authority,
having jurisdiction over the Companies or their properties or by which the
Companies may be bound.

<PAGE> 129

[BROBECK PHLEGER & HARRISON LLP LETTERHEAD]

Resource Health Partners, L.P. Page 4
December 29, 1997

5. No consents, approvals or authorizations of or filings with
any governmental authority are required or necessary on the part of the
Companies in connection with the execution, delivery and performance at the
Closing by the Companies of the Transaction Documents.

6. Upon issuance of the QuadraMed Shares in the Mergers in
accordance with the Merger Agreement, the QuadraMed Shares will be duly
authorized, validly issued, fully paid and non-assessable.

7. We are not aware that there is any action, proceeding or
governmental investigation pending, or threatened in writing, against the
Companies which questions the validity or enforceability of the Transaction
Documents or the right of the Companies to enter into the Transaction Documents.

The foregoing opinions are subject to the following additional
limitations, qualifications, assumptions and exceptions:

(a) The enforceability of the Companies' obligations under the
Transaction Documents may be subject to or limited by (i) bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent transfer and
other similar laws affecting the rights of creditors generally; and (ii) general
equitable principles (whether relief is sought in a proceeding at law or in
equity), including, without limitation, concepts of materiality, reasonableness,
good faith, and fair dealing.

(b) We express no opinion as to provisions of the Transaction
Documents purporting to establish an evidentiary standard or to authorize
conclusive determinations by the Seller or any other Person or allowing the
Seller or any other Person to make determinations in its sole discretion.

(i) provisions of the Transaction Documents pursuant to which
the Companies' agree to make payments without set-off, defense or counterclaim;

(ii) provisions relating to indemnification, contribution or
exculpation, to the extent any such provision is contrary to public policy or
prohibited by law (including, without limitation, federal and state securities
laws);

<PAGE> 130

[BROBECK PHLEGER & HARRISON LLP LETTERHEAD]

Resource Health Partners, L.P. Page 5
December 29, 1997

(iii) any provision providing for the exclusive jurisdiction
of a particular court or purporting to waive rights to trial by jury, service of
process or objections to the laying of venue or to forum on the basis of forum
non conveniens, in connection with any litigation arising out of or pertaining
to the Transaction Documents;

(iv) provisions purporting to waive either illegality as a
defense to the performance of contract obligations or any other defense to such
performance which cannot, as a matter of law, be effectively waived;

(v) any provision permitting modification of the Transaction
Documents only by means of an agreement in writing signed by the parties
thereto;

(vi) any provision requiring payment of attorneys' fees,
except to the extent a court determines such fees to be reasonable;

(d) Our opinions in clause (ii) of paragraph 4 above and in
paragraph 5 above are limited to laws and regulations normally applicable to
transactions of the type contemplated in the Transaction Documents and do not
extend to licenses, permits and approvals necessary for the conduct of the
Companies' business. In addition and without limiting the previous sentence, we
express no opinion herein with respect to the effect of any land use,
environmental or similar law, any state or federal antitrust law or any local
law. Further, we express no opinion as to the effect of or compliance with any
state or federal laws or regulations applicable to the transactions contemplated
by the Transaction Documents because of the nature of the business of any party
thereto other than the Companies.

(f) We also express no opinion as to Section 12.8 of the Merger
Agreement and similar provisions of the other Transaction Documents to the
extent that they purport to exclude conflict of law principles under New York
law.

<PAGE> 131

[BROBECK PHLEGER & HARRISON LLP LETTERHEAD]

Resource Health Partners, L.P. Page 6
December 29, 1997

implication or otherwise, as to any other matters relating to the Companies. We
assume no obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinions expressed herein.

Very truly yours,

BROBECK, PHLEGER & HARRISON LLP