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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): May 29, 1996
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CRA MANAGED CARE, INC.
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(Exact name of registrant as specified in its charter)
Massachusetts 02-25856 04-2658593
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(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
312 Union Wharf
Boston, Massachusetts 02109 (617) 367-2163
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(Address of principal executive (Zip Code) (Registrant's telephone
offices) number, including area code)
Index to Exhibits Appears at Page 5
Page 1 of 41 Pages.
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Item 5. Other Events.
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On May 29, 1996, pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of May 6, 1996, by and among CRA Managed Care,
Inc. ("the Company"), a Massachusetts corporation, QMC/3/, Inc. ("QMC/3/"), a
Colorado corporation, QMC3 Acquisition Corp. ("Merger Sub"), a Massachusetts
corporation and wholly-owned subsidiary of the Company, and the shareholders of
QMC/3/ named therein, QMC/3/ merged with and into Merger Sub, with QMC/3/
surviving the Merger (the "Acquisition"). The Merger became effective upon
filing of Certificates of Merger with the Secretary of State of the Commonwealth
of Massachusetts and the Secretary of State of the State of Colorado (the
"Effective Time"). Pursuant to the Merger Agreement, at the Effective Time, all
of the issued and outstanding shares of capital stock of QMC/3/ were converted
into 230,442 shares of the Company's common stock. The consideration paid had
an aggregate stated value equal to approximately $8,500,000.00. The aggregate
stated value for each share of CRA Common Stock issued to the shareholders of
QMC/3/ was based upon a value of $34.025, the average of the last quoted sale
prices for the shares of CRA Common Stock on the Nasdaq National Market System
for each of the thirty (30) trading days immediately preceding April 18, 1996.
QMC/3/, the Company and Kimberly Sutphin entered into an Employment
Agreement, dated as of May 29, 1996 pursuant to which Ms. Sutphin will serve as
President of QMC/3/ for an initial term of two years.
The Company granted to the former shareholders of QMC/3/ the right to
request registration of the shares of CRA Common Stock held by them on one
occasion and to include (with certain limitations) any of such shares in the
Company's registration statements filed on behalf of the Company or other
stockholders of the Company.
Following the Acquisition, the Company intends to continue QMC/3/'s
business of providing managed care services to the automobile insurance market
as a wholly owned subsidiary of the Company. On the date of the execution of
the Merger Agreement, there was no material relationship between the Company and
QMC/3/ or the Company and any affiliates of QMC/3/, any director or officer of
the Company and QMC/3/, or between any associate of any director or officer of
the Company and QMC/3/.
A copy of the Merger Agreement is attached hereto as an exhibit and is
incorporated herein by reference. The foregoing description of the Acquisition
does not purport to be complete and is qualified in its entirety by reference to
such exhibit.
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Item 7. Financial Statements and Exhibits.
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(a) and (b) Financial Statements of Business Acquired and
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Pro Forma Financial Information
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Not Applicable
(c) Exhibits
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2.1. Agreement and Plan of Merger, dated as of May 6, 1996,
by and between QMC/3/, Inc., CRA Managed Care, Inc.,
QMC3 Acquisition Corp. and the shareholders of QMC/3/,
Inc named therein.
In accordance with Item 601(b)(2) of Regulation S-K, the Schedules and Exhibits
referenced in the Merger Agreement have not been filed as part of the exhibits
to this Current Report on Form 8-K. The registrant agrees to furnish
supplementally a copy of the omitted Schedules and Exhibits to the Commission
upon request.
3
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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 duly authorized.
CRA MANAGED CARE, INC.
By: /s/ Donald J. Larson
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Name: Donald J. Larson
Title: President and Chief
Executive Officer
Dated: June 24, 1996
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INDEX TO EXHIBITS
Exhibit No. Exhibit
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2.1 Agreement and Plan of Merger, dated as of May 6,
1996, by and between QMC/3/, Inc., CRA Managed Care,
Inc., QMC/3/ Acquisition Corp. and the Shareholders
of QMC/3/, Inc.
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EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
among
CRA MANAGED CARE, INC.
QMC3 ACQUISITION CORP.
QMC3, INC.
and
THE SHAREHOLDERS OF QMC3, INC.
May 6, 1996
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of May 6,
1996, among CRA Managed Care, Inc., a Massachusetts corporation ("CRA"), QMC3
Acquisition Corp., a Massachusetts corporation and a wholly owned subsidiary of
CRA ("Merger Sub"), QMC3, Inc., a Colorado corporation ("QMC3"), and the
shareholders of QMC3 listed on the signature page hereof (collectively, the
"QMC3 Shareholders").
RECITALS
WHEREAS, the respective Boards of Directors of CRA, Merger Sub and
QMC3 have determined that it is in the best interests of their respective
shareholders for QMC3 to merge with Merger Sub upon the terms and subject to the
conditions of this Agreement;
WHEREAS, each of the QMC3 Shareholders has approved and is a party to
this Agreement;
WHEREAS, for federal income tax purposes, it is intended that the
Merger (as hereinafter defined) shall qualify as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code");
WHEREAS, it is intended that the Merger shall be recorded for
accounting purposes as a pooling of interests; and
WHEREAS, CRA, Merger Sub, QMC3 and the QMC3 Shareholders desire to
make certain representations, warranties, covenants and agreements in connection
with the Merger.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements set forth herein, CRA, Merger Sub, QMC3 and
the QMC3 Shareholders hereby agree as follows:
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING
1.1 The Merger. Subject to the terms and conditions of this
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Agreement, at the Effective Time (as hereinafter defined), QMC3 and Merger Sub
shall consummate a merger (the "Merger") in which (i) Merger Sub shall be merged
with and into QMC3 and the separate corporate existence of Merger Sub shall
thereupon cease, (ii) QMC3 shall be the successor or surviving corporation in
the Merger and shall continue to be governed by the laws of the State of
Colorado, and (iii) the separate corporate existence of QMC3 with all its
rights, privileges,
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immunities, powers and franchises shall continue unaffected by the Merger. The
corporation surviving the Merger is sometimes hereinafter referred to as the
"Surviving Corporation". The Merger shall have the effects specified in the
Business Corporation Law of the Commonwealth of Massachusetts (the "MBCL") and
in the Colorado Business Corporation Act (the "CBCA").
1.2 Effective Time. CRA, Merger Sub and QMC3 will cause Articles or
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Certificates of Merger (the "Certificates of Merger") to be executed and filed
on the date of the Closing (or on such other date as CRA and QMC3 may agree)
with the Secretary of State of the Commonwealth of Massachusetts and with the
Secretary of State of the State of Colorado. The Merger shall become effective
at the later of the time at which the Certificates of Merger shall have been
filed with the Secretary of State of the Commonwealth of Massachusetts or filed
with the Secretary of State of Colorado or such later time as CRA and QMC3 may
agree and specify in the Certificates of Merger in accordance with Chapter 156B,
Section 79 of the MBCL and with Colorado Revised Statutes Section 7-111-105, and
such time of effectiveness is hereinafter referred to as the "Effective Time".
1.3 Closing. The closing of the Merger (the "Closing") shall take
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place (i) at the offices of Hutchins, Wheeler & Dittmar, A Professional
Corporation, 101 Federal Street, Boston, Massachusetts, at 10:00 a.m. on May 10,
1996, or as soon thereafter as practicable following the satisfaction or waiver
of all of the conditions set forth in Article VII hereof or (ii) at such other
place, time and date as CRA and QMC3 may agree.
ARTICLE II
ARTICLES OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION
2.1 Articles of Incorporation. The Articles of Incorporation of QMC3
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as in effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation, until duly amended in accordance
with the terms thereof and of the CBCA.
2.2 The Bylaws. The Bylaws of QMC3 in effect immediately prior to
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the Effective Time shall be the Bylaws of the Surviving Corporation, until duly
amended in accordance with the terms thereof, of the Articles of Incorporation
of the Surviving Corporation and of the CBCA.
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ARTICLE III
DIRECTORS AND OFFICERS
OF THE SURVIVING CORPORATION
3.1 Directors. The directors of the Surviving Corporation shall,
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from and after the Effective Time, be the persons listed on Schedule 3.1, until
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their respective successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the
Surviving Corporation's Articles of Incorporation and Bylaws.
3.2 Officers. The officers listed on Schedule 3.2 shall, from and
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after the Effective Time, be the officers of the Surviving Corporation, until
their successors have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's Articles of Incorporation and Bylaws.
ARTICLE IV
MERGER CONSIDERATION AND CONVERSION OR CANCELLATION
OF QMC3 SHARES IN THE MERGER
4.1 Consideration for Merger; Conversion or Cancellation of QMC3
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Shares in Merger. The manner of converting or canceling shares and options to
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acquire shares of QMC3 and Merger Sub in the Merger shall be as follows:
(a) At the Effective Time, each of the shares of common stock, par value
$.01 per share, of QMC3 ("QMC3 Shares") issued and outstanding immediately prior
to the Effective Time shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into the right to receive shares of
common stock, par value $.01 per share, of CRA ("CRA Common Shares"). At the
Effective Time, each option or other right to acquire shares of common stock,
par value $.01 per share, of QMC3 ("QMC3 Options") outstanding immediately prior
to the Effective Time shall, by virtue of the Merger and without any action on
the part of the holder thereof, be deemed to constitute options to acquire CRA
Common Shares ("CRA Carry-Over Options") pursuant to Section 4.1(d) below. At
the Effective Time, each of the shares of the Series I 7% Preferred Stock of
QMC3 ("QMC3 Preferred Shares") issued and outstanding immediately prior to the
Effective Time shall by virtue of the Merger and without any action on the part
of the holder thereof, be converted into the right to receive CRA Common Shares.
The CRA Common Shares into which the QMC3 Shares shall be converted plus the
number of CRA Common Shares subject to the CRA Carry-Over Options plus the
number of CRA Common Shares to be issued in exchange for QMC3 Preferred Shares
shall have an aggregate stated value (as determined below) equal to
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$8,500,000, rounded to the nearest whole CRA Common Share (the "Aggregate
Shares"). The aggregate stated value of the CRA Common Shares shall be based
upon a value of $34.025 per CRA Common Share (the "Closing Market Price"), the
average of the last quoted sale prices for the CRA Common Shares on the NASDAQ
National Market System for each of the thirty (30) trading days immediately
preceding April 18, 1996.
(b) All QMC3 Shares to be converted into CRA Common Shares pursuant to this
Section 4.1 shall, by virtue of the Merger and without any action on the part of
the holders thereof, cease to be outstanding, be canceled and retired and cease
to exist, and each holder of a certificate representing any such QMC3 Shares
shall thereafter cease to have any rights with respect to such QMC3 Shares,
except the right to receive for each of the QMC3 Shares, upon the surrender of
such certificate in accordance with Section 4.2, the number of CRA Common Shares
specified below (the "Share Consideration") and cash in lieu of fractional CRA
Common Shares as contemplated by Section 4.3. For purposes hereof, the Share
Consideration to be received by each holder of QMC3 Shares shall be the number
of CRA Common Shares equal to the number of QMC3 Shares owned by such holder
multiplied by the Conversion Ratio. The "Conversion Ratio" shall be
0.147295706401.
(c) All QMC3 Preferred Shares to be converted into CRA Common Shares
pursuant to this Section 4.1 shall, by virtue of the Merger and without any
action on the part of the holders thereof, cease to be outstanding, be canceled
and retired and cease to exist, and each holder of a certificate representing
any such QMC3 Preferred Shares shall thereafter cease to have any rights with
respect to such QMC3 Preferred Shares, except the right to receive for each of
the QMC3 Preferred Shares, upon surrender of such certificate in accordance with
Section 4.2, the number of CRA Common Shares specified below (the "Preferred
Share Consideration") and cash in lieu of fractional CRA Common Shares as
contemplated by Section 4.3. For purposes hereof, the Preferred Share
Consideration to be received by each holder of QMC3 Preferred Shares shall be
the number of CRA Common Shares equal to the number of QMC3 Preferred Shares
owned by such holder multiplied by the Preferred Conversion Ratio. The
Preferred Conversion Ratio shall be 0.0293901542983.
(d) Each QMC3 Option shall, at the Effective Time, be deemed to constitute
an option to acquire, on the same terms and conditions as were applicable under
such QMC3 Option, such number of shares of CRA Common Stock as is equal to the
number of QMC3 Shares subject to such QMC3 Option multiplied by the Conversion
Ratio (with any fraction resulting from such multiplication to be rounded down
to the nearest whole number). The exercise price per share of each such CRA
Roll-Over Option shall be equal to the exercise price per share of such QMC3
Option immediately prior to the Effective Time, divided by the Conversion Ratio.
The term, exercisability, vesting schedule, status as an "incentive stock
option" under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), if applicable, and all of the other terms of the QMC3 Options
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shall otherwise remain unchanged. As soon as practicable after the Effective
Time, CRA shall deliver to the holders of QMC3 Options appropriate notices
setting forth such holders' rights pursuant to such QMC3 Options, as amended by
this Section 4.1, and the agreements evidencing such QMC3 Options shall continue
in effect on the same terms and conditions (subject to the amendments provided
for in this Section and such notice).
(e) Each share of common stock, par value $.01 per share, of Merger Sub
issued and outstanding immediately prior to the Effective Time shall by virtue
of the Merger and without any action on the part of the holder thereof,
automatically be converted into one fully paid and nonassessable share of common
stock of the Surviving Corporation, as such shares of common stock are
constituted immediately following the Effective Time.
4.2 Payment for Shares in the Merger. At the Effective Time, all
--------------------------------
certificates which immediately prior to the Effective Time represented
outstanding QMC3 Shares and outstanding QMC3 Preferred Shares (the
"Certificates") shall be delivered to CRA for cancellation, and the holders of
such Certificates shall, subject to the following sentence, forthwith receive
the Share Consideration and the Preferred Share Consideration, respectively, for
each of the QMC3 Shares and QMC3 Preferred Shares represented by such
Certificates. The QMC3 Shareholders shall be entitled to receive immediately
90% of the CRA Common Shares into which their QMC3 Shares and QMC3 Preferred
Shares are converted pursuant to Section 4.1; the remaining 10% of the CRA
Common Shares into which QMC3 Shares and QMC3 Preferred Shares are converted
pursuant to Section 4.1 shall be deposited in escrow pursuant to Section 8.4 and
shall be held and disposed of in accordance with the terms of the Escrow
Agreement.
4.3 Fractional Shares. No fractional CRA Common Shares shall be
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issued in the Merger. In lieu of any such fractional securities, each holder of
QMC3 Shares or QMC3 Preferred Shares who would otherwise have been entitled to a
fraction of a CRA Common Share will be paid an amount in cash (without interest)
equal to the product of such fraction (which shall not be greater than one)
times the Closing Market Price determined pursuant to Section 4.1(a).
4.4 No Transfer of Shares. No transfer of QMC3 Shares or QMC3
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Preferred Shares shall be made on the stock transfer books of QMC3 after the
date hereof; provided, however, that certificates for QMC3 Shares may be issued
to reflect options exercised after the date hereof.
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ARTICLE V
REPRESENTATIONS, WARRANTIES AND CERTAIN COVENANTS
5.1 Representations, Warranties and Certain Covenants of QMC3.
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Except as otherwise set forth on the QMC3 Disclosure Schedule attached hereto
and made a part hereof (the "QMC3 Disclosure Schedule"), QMC3 hereby represents,
warrants and covenants to CRA and Merger Sub that, as of the date of this
Agreement:
(a) Corporate Organization. QMC3 is a corporation duly organized, validly
----------------------
existing and in good standing under the laws of the State of Colorado. QMC3 has
one wholly-owned subsidiary, Colorado Chiropractic Health Care, Inc. (the
"Subsidiary"), which is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado. True and correct copies
of the Articles of Incorporation and Bylaws of QMC3 and the Subsidiary in effect
as of the date of this Agreement have been provided to CRA. Apart from the
Subsidiary, QMC3 does not have any direct or indirect equity interest in any
other firm, corporation, partnership, joint venture association or other
business organization.
(b) Qualification to do Business. Except as set forth in Section 5.1(b) of
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the QMC3 Disclosure Schedule, each of QMC3 and the Subsidiary is duly qualified
or licensed to do business as a foreign corporation in each jurisdiction wherein
the nature of its activities or of its properties owned or leased makes such
qualification necessary and failure to be so qualified or licensed would have a
material adverse effect on the condition (financial or otherwise), assets,
liabilities, business, operations or prospects of QMC3.
(c) Power. QMC3 has all requisite corporate power and authority to own
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and operate its properties, to carry on its business as now being conducted, to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
(d) Authority. The execution and delivery of this Agreement by QMC3, and
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the consummation of the transactions contemplated hereby, have been, or prior to
the Effective Time will be, duly authorized by all necessary corporate action on
the part of QMC3, including without limitation the unanimous approval of the
QMC3 Shareholders. The right of each QMC3 Shareholder to seek appraisal of his
QMC3 Shares under the CBCA as a result of the Merger has been, or prior to the
Effective Time will be, validly waived. This Agreement and all other
instruments required hereby to be executed and delivered by QMC3 have been, or
will be, duly executed and delivered by authorized officers of QMC3, and are, or
when delivered will be, legal, valid and binding obligations of QMC3,
enforceable against QMC3, in accordance with their terms, subject, as to
enforceability, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
principles of equity.
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(e) Capitalization. Section 5.1(e) of the QMC3 Disclosure Schedule
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attached hereto contains the name and address of each shareholder of QMC3 and
the number of QMC3 Shares and/or QMC3 Preferred Shares owned by each shareholder
and the name and address of each optionholder of QMC3 and the number of options
to purchase Common Stock of QMC3 held by such optionholder. The authorized
capital stock of QMC3 is set forth on Schedule 5.1(e). All of the outstanding
QMC3 Shares have been duly authorized and validly issued and are fully paid and
nonassessable and free of preemptive rights. Except as set forth on Section
5.1(e) of the QMC3 Disclosure Schedule, no QMC3 Shares are held in the treasury
of QMC3 or reserved for issuance. Except as set forth in Section 5.1(e) of the
QMC3 Disclosure Schedule, there are not as of the date hereof and there will
not be at the Effective Time any outstanding or authorized options, warrants,
calls, rights, commitments or any other agreements of any character to which
QMC3 is a party, or by which it is bound, requiring it to issue, transfer, sell,
purchase, redeem or acquire any shares of capital stock or any securities or
rights convertible into, exchangeable for, or evidencing the right to subscribe
for, any shares of capital stock or other securities of QMC3. Except as set
forth on Section 5.1(e) of the QMC3 Disclosure Schedule, there will not be at
the Effective Time any shareholder agreement, voting trust or other agreements
or understandings to which QMC3 or, to the Knowledge of QMC3, any of the QMC3
Shareholders is a party or by which QMC3 or, to the Knowledge of QMC3, any of
the QMC3 Shareholders is bound relating to the QMC3 Shares. All of the
outstanding shares of capital stock of the Subsidiary are owned by QMC3, and,
except as set forth on Section 5.1(e) of the QMC3 Disclosure Schedule, there are
not outstanding any options, warrants, calls, rights, commitments or other
agreements to which the Subsidiary is a party, or by which it is bound,
requiring it to issue, transfer, or sell any shares of its capital stock or
securities exchangeable into or convertible for such shares.
(f) Consents and Approvals; No Violation. Neither the execution and
------------------------------------
delivery of this Agreement nor the consummation by QMC3 and the QMC3
Shareholders of the transactions contemplated hereby will (i) conflict with or
result in any breach of any provision of the Articles of Incorporation or the
Bylaws of QMC3 or the Subsidiary; (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
authority, except (A) filings by CRA, pursuant to the applicable requirements of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Securities Exchange Act") and the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the
"Securities Act") and under applicable state securities laws, and (B) filings of
Certificates of Merger pursuant to the MBCL and the CBCA; (iii) except as set
forth in Section 5.1(f) of the QMC3 Disclosure Schedule, result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation or
acceleration or lien or other charge or encumbrance) under any of the terms,
conditions or provisions of any note, license agreement, Material Contract (as
hereinafter defined) or other material instrument or obligation to which
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QMC3, the Subsidiary or, to the Knowledge of QMC3, any of the QMC3 Shareholders
or any of their assets may be bound, except for such violations, breaches and
defaults (or rights of termination, cancellation or acceleration or lien or
other charge or encumbrance) as to which waivers or consents will have been
obtained prior to the Effective Time; or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to QMC3, the
Subsidiary or any of the QMC3 Shareholders or to any of their respective
assets.
(g) Actions, Suits, Proceedings. Except as set forth on Section 5.1(g) of
---------------------------
the QMC3 Disclosure Schedule, there are no actions, suits or proceedings pending
or, to the Knowledge of QMC3, threatened against QMC3 or the Subsidiary or any
of their respective properties or businesses in any court or before any
governmental authority. Neither QMC3 nor the Subsidiary is subject to any
order, writ, injunction or decree of any court or governmental authority. There
are no actions, suits or proceedings pending or, to the Knowledge of QMC3,
threatened against any of the QMC3 Shareholders in any court or before any
governmental authority in regard to their QMC3 Shares or relating to QMC3 or the
Subsidiary or their respective businesses. To the Knowledge of QMC3, none of
the QMC3 Shareholders is subject to any order, writ, injunction or decree of any
court or governmental authority in regard to his or her QMC3 Shares.
(h) Compliance with Applicable Laws and Other Instruments. The businesses
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and operations of QMC3 and the Subsidiary have been and are being conducted in
all material respects in accordance with all applicable laws, rules or
regulations of all governmental and regulatory authorities, including without
limitation all laws, rules and regulations relating to the environment or
occupational health and safety (hereinafter collectively referred to as
"Environmental Laws"). Neither QMC3 nor the Subsidiary is in material violation
of any building code, special use permit, zoning ordinance or any other
applicable law, rule or regulation, and there are no administrative or other
governmental claims pending against QMC3 or the Subsidiary alleging or inquiring
as to the existence of any such violation.
(i) Employees. QMC3 has provided CRA with a true and correct list of all
---------
hourly employees and salaried employees of QMC3 and the Subsidiary as of May 1,
1996, which list in the case of each such employee sets forth the position,
level of compensation, earned and accrued vacation and date of employment.
There have been no material changes in the employees of QMC3 or the Subsidiary
since such date, nor have there been any material modification to the levels of
compensation set forth on such list.
(j) Employee Plans. Section 5.1(j) of the QMC3 Disclosure Schedule lists
--------------
and generally describes all employee benefit plans covering employees of QMC3
and the Subsidiary. True and correct copies of each of the plans described in
such Section 5.1(j) and of the related agreements have been furnished by QMC3 to
CRA. QMC3 has never
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maintained any defined benefit pension plan subject to Title IV of ERISA and has
never maintained any defined contribution retirement plan intended to be
qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended.
Additionally, QMC3 has never maintained a written or unwritten severance plan or
policy providing employees who terminate employment with QMC3 with any post-
employment benefit, except for a policy allowing terminated employees to
continue to participate in QMC3's benefit plans disclosed in Section 5.1(j) of
the QMC3 Disclosure Schedule to the extent required by applicable law. There
are no pending, or to the Knowledge of QMC3, threatened, claims, lawsuits or
arbitrations which have been asserted or instituted against such plans or any
fiduciaries thereof respecting their duties to the plans or the assets or any of
the trusts under any of the plans. No such plan is a Multiemployer Plan, as
defined in Section 4001(a)(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). To the Knowledge of QMC3, each of the plans
described in such Section 5.1(j) that is subject to ERISA is in compliance with
ERISA in all material respects. To the Knowledge of QMC3, neither QMC3, nor its
directors, officers and employees nor any fiduciary of any such plan is in
breach of any obligations imposed on fiduciaries under Title I of ERISA. No
"reportable event" as such term is defined in Section 4043(b) of ERISA or
prohibited transactions within the meaning of Section 406 of ERISA has occurred
with respect to any such plan. QMC3 is in substantial compliance with all
applicable requirements of Section 4980B of the Code.
(k) Labor Matters. Neither QMC3 nor the Subsidiary has existing labor
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disputes or disturbances, and except as otherwise set forth on Section 5.1(k) of
the QMC3 Disclosure Schedule, there are no existing employment, consulting, non-
competition, severance, indemnification or non-disclosure agreements or
collective bargaining agreements between QMC3 or the Subsidiary and any of its
past or present employees, officers and directors. There is no collective
bargaining unit representing any of QMC3's or the Subsidiary's employees. No
petition has been filed and is pending with the National Labor Relations Board
by any labor organization or any group of employees for an election or
certification regarding the representation of any group of employees by a labor
organization, nor to the Knowledge of QMC3 is there at present any solicitation
or campaign by any labor organization or employee for the representation of
QMC3's or the Subsidiary's employees by a labor organization.
(l) Financial Information. QMC3 has previously delivered to CRA
---------------------
(i) the unaudited combined balance sheet of QMC3, the Subsidiary and QMC3's
former subsidiaries as of December 31, 1995 and the related statements of
earnings and changes in financial condition for the year then ended
(collectively, the "Year-End Financial Statements"), and (ii) the unaudited
combined balance sheet of QMC3, and the Subsidiary at March 31, 1996 (the
"Balance Sheet Date"), and the related statements of earnings and changes in
financial condition for the three (3) months then ended (the "Interim Financial
Statements"). The Year-End Financial Statements and the Interim Financial
Statements are complete and correct, are in accordance with the books and
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records of QMC3 and the Subsidiary and present fairly in accordance with an
accrual method of accounting applied on a basis consistent with prior periods
the financial condition and results of operations of QMC3 and the Subsidiary as
of the dates and for the periods shown. Except for those liabilities that have
arisen in the ordinary course of business after the Balance Sheet Date, QMC3 and
the Subsidiary do not have any liability, contingent or otherwise, which is not
adequately reflected in or reserved against in the Year-End Financial Statements
or the Interim Financial Statements that could materially and adversely affect
QMC3's financial condition. Since the Balance Sheet Date, (i) there has been no
change in the business, assets, liabilities, condition (financial or otherwise)
or operations of QMC3 and the Subsidiary except for changes in the ordinary
course of business which, individually or in the aggregate, have not been
materially adverse, and (ii) none of the business, prospects, condition
(financial or otherwise), operations, property or affairs of QMC3 and the
Subsidiary has been materially adversely affected by any occurrence or
development, individually or in the aggregate, whether or not insured against.
(m) Tax Returns and Audits. All required federal, state, local and foreign
----------------------
tax returns or appropriate extension requests of QMC3 and the Subsidiary have
been filed, and all federal, state, local and foreign taxes required to be paid
have been paid or due provision for the payment thereof has been made. Neither
QMC3 nor the Subsidiary is delinquent in the payment of any such tax or in the
payment of any assessment or governmental charge. Neither QMC3 nor the
Subsidiary has received notice of any tax deficiency proposed or assessed
against it, and has not executed any waiver of any statute of limitations on the
assessment or collection of any tax. None of QMC3's nor the Subsidiary's tax
returns has been audited by governmental authorities. Neither QMC3 nor the
Subsidiary has any tax liabilities except those reflected on Section 5.1(m) of
the QMC3 Disclosure Schedule and those incurred in the ordinary course of
business since the Balance Sheet Date.
(n) Changes, Dividends, etc.. Except for the transactions contemplated by
------------------------
this Agreement or as disclosed in Section 5.1(n) of the QMC3 Disclosure
Schedule, since the Balance Sheet Date, neither QMC3 nor the Subsidiary has: (a)
incurred or guaranteed any debts, obligations or liabilities, absolute, accrued
or contingent, and whether due or to become due, or suffered any bad debt,
contingency, or other reserve increase, except current liabilities incurred in
the ordinary course of business and consistent with past practice, which
(individually or in the aggregate) are not material; (b) paid any obligation or
liability other than, or discharged or satisfied any liens or encumbrances other
than those securing, current liabilities, in each case in the ordinary course of
business and consistent with past practice; (c) declared or made any direct or
indirect payment, set aside, or distribution to shareholders, or directly or
indirectly purchased, acquired or redeemed any of its shares of its capital
stock or other securities, or obligated itself to do so; (d) mortgaged, pledged
or subjected to lien, charge, security interest or other encumbrance any of its
property or assets (tangible or intangible, real, personal or mixed),
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<PAGE>
except in the ordinary course of business; (e) sold, leased, transferred, or
otherwise disposed of any of its properties or assets (real, personal or mixed,
tangible or intangible), except in transactions in the ordinary course of
business and consistent with past practice and which in any event do not exceed
$20,000 in the aggregate; (f) canceled or compromised any debt or claim, or
waived or released any right of material value; (g) accelerated payments of its
receivables or delayed its payables, except in the ordinary course of business
and consistent with past practice; (h) suffered any physical damage, destruction
or loss (whether or not covered by insurance) which has had or may have a
material adverse effect; (i) entered into any transaction other than in the
ordinary course of business; (j) encountered any labor difficulties or labor
union organizing activities; (k) issued or sold any shares of capital stock or
other securities or granted any options, warrants or other purchase rights with
respect thereto; (l) made any acquisition or disposition of any material assets
or made any single capital expenditure or commitment in excess of $20,000 for
additions to property or equipment or made aggregate capital expenditures and
commitments in excess of $20,000 for additions to property or equipment; (m)
made any change in any "employee benefit plan" of the type required to be
disclosed on Section 5.1(j) of the QMC3 Disclosure Schedule; (n) increased the
compensation payable, or to become payable, to any of its employees or
directors, or made any bonus payment or similar arrangement with any employees
or directors or increased the scope or nature of any fringe benefits provided
for its employees or directors, other than the declaration and payment of a one-
time bonus not in excess of $25,000 in the aggregate to employees of the
Company; (o) agreed, whether in writing or otherwise, to do any of the foregoing
other than pursuant hereto. Since the Balance Sheet Date, the businesses of
QMC3 and the Subsidiary have been carried on only in the ordinary and usual
course, consistent with past practice in all material respects, and maintenance
of all of QMC3's facilities has been conducted on a basis consistent with past
practice; and there has been no material adverse change in the financial
condition, operations, results of operations, working capital position,
earnings, management, business or prospects of QMC3 since the Balance Sheet
Date.
(o) Title to the Assets. QMC3 and the Subsidiary have good and marketable
-------------------
title to all of their respective properties and assets (real, personal or
mixed, tangible and intangible), free and clear of all liens, pledges, security
interests, conditional sale agreements, license agreements, charges and
encumbrances that will continue after the Effective Time except encumbrances
listed in Section 5.1(o) of the QMC3 Disclosure Schedule (the "Permitted
Encumbrances").
(p) Payment Obligations. The accounts receivable of QMC3 and the
-------------------
Subsidiary (i) have arisen, and through the Effective Time will arise, in the
normal course of the operation of the business of QMC3 and the Subsidiary, and
(ii) constitute, and with respect to accounts receivable arising following the
date hereof and prior to the Effective Time will constitute bona fide accounts
in the amount recorded therefor in the books and records of QMC3 and the
Subsidiary and, to the knowledge of QMC3, the
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<PAGE>
account debtors and obligors have no offsets or counterclaims to reduce the
amount of such accounts, and all such accounts are fully collectible (giving
effect only to any allowance for doubtful accounts set forth on the Interim
Financial Statements) and are not, and through the Effective Time will not be,
subject to any discounts, whether for prompt payment or otherwise, except as set
forth in Section 5.1(p) of the QMC3 Disclosure Schedule.
(q) Condition of Assets. The plant, offices and equipment owned or leased
-------------------
by QMC3 and the Subsidiary have been kept in good condition and repair in the
ordinary course of business, ordinary wear and tear excepted.
(r) Intellectual Property Rights. Section 5.1(r) of the QMC3 Disclosure
----------------------------
Schedule lists all patents, trademarks, trade names, service marks and
copyrights (and all applications therefor) owned by or used in the operation of
QMC3's and the Subsidiary's businesses. Except as set forth on Section 5.1(r)
of the QMC3 Disclosure Schedule, QMC3 and the Subsidiary (i) to QMC3's
knowledge, own or have the exclusive right, in the United States of America to
use all such patents, trademarks, trade names, service marks and copyrights (and
all applications therefor) and all trade secrets, inventions, know-how, designs,
processes, computer programs, specifications and formulas otherwise embodied in
or related to their respective businesses and (ii) are not using any
confidential information or trade secrets of others. Except as set forth on
Section 5.1(r) of the QMC3 Disclosure Schedule, neither QMC3 nor the Subsidiary
is obligated to pay royalties, fees or other payments to any owner of, licensor
of, or other claimant to, any patent, trademark, service mark, trade name,
copyright or other intellectual property. QMC3 has not transferred or conveyed
any rights to others in the intellectual property of QMC3. Except as set forth
on Section 5.1(r) of the QMC3 Disclosure Schedule, neither QMC3 nor the
Subsidiary is, nor has either received notice with respect to, infringing upon
or otherwise acting adversely to any known right of, or right known to be
claimed by, any person under or with respect to any patents, trademarks, service
marks, trade names, copyrights, licenses or other intellectual property rights.
(s) Contracts, Leases, Commitments and Agreements. Section 5.1(s) of the
---------------------------------------------
QMC3 Disclosure Schedule lists all contracts, leases, commitments and agreements
(other than purchase orders from customers) to which QMC3 or the Subsidiary is a
party or by which it is bound that (i) provide for aggregate payments of at
least $5,000, unless the aggregate payments are reducible to a lesser amount by
exercise by QMC3 of a contractual right of termination without cause, (ii)
contain an escalation, renegotiation or redetermination clause, or (iii) provide
for the assignment, license or other transfer of any intellectual property by or
to QMC3 or the Subsidiary (the "Material Contracts"). QMC3 and the Subsidiary
have and, to the Knowledge of QMC3, each other party to the Material Contracts,
have, in all respects substantially performed all obligations required to be
performed by them to date, and are not in default under any of the Material
Contracts. Except as set forth on Section 5.1(s) of the QMC3 Disclosure
Schedule, each
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<PAGE>
of the Material Contracts is in full force and effect and, except as set forth
in such Section 5.1(s), does not require the consent of any party to the
transactions contemplated hereby, and neither QMC3 nor the Subsidiary has waived
or assigned to any other person any of its rights thereunder.
(t) Consents of Third Parties and Significant Customers. Except as set
---------------------------------------------------
forth on Section 5.1(t) on the QMC3 Disclosure Schedule, no consents or
approvals of any third party are required for the consummation by QMC3 and the
QMC3 Shareholders of the transactions contemplated hereby. All the consents and
approvals set forth in such Section 5.1(t) will have been obtained prior to the
Effective Time, other than those which CRA may, in its sole discretion, choose
to waive.
(u) Composition of Assets. The assets of QMC3 and its Subsidiary,
---------------------
including leased assets and intangible assets, comprise all material property
and assets employed by QMC3 and its Subsidiary in their businesses and
necessary to conduct QMC3's and the Subsidiary's businesses as conducted on the
date hereof.
(v) Insurance. QMC3 and the Subsidiary have in force the property,
---------
casualty, errors and omissions and other insurance set forth on Section 5.1(v)
of the QMC3 Disclosure Schedule attached hereto. All policies providing such
insurance are in full force and effect and QMC3 and the Subsidiary have received
no notice of impending cancellation or nonrenewal thereof.
(w) Licenses and Permits. Section 5.1(w) of the QMC3 Disclosure Schedule
--------------------
accurately lists and describes all governmental licenses and permits granted to
QMC3 and the Subsidiary. QMC3 and the Subsidiary possess from the appropriate
agency, commission, board and governmental body and authority all material
licenses, certifications, permits and regulatory approvals required by law or
otherwise necessary for the operation of their respective businesses. All such
licenses, certifications, permits and approvals granted to QMC3 and the
Subsidiary are in full force and effect, and no action to terminate any such
license, certification, permit or approval is pending or, to the Knowledge of
QMC3, has been threatened by any governmental agency or other party.
(x) Full Disclosure. No representation or warranty by QMC3 contained in
---------------
this Agreement contains any untrue statement of a material fact, or omits to
state any material fact necessary to make the representations and warranties
herein contained not misleading.
5.2 Representations and Warranties of the QMC3 Shareholders. Each of
-------------------------------------------------------
the QMC3 Shareholders severally represents and warrants to CRA and Merger Sub as
to himself or herself that:
(a) Such QMC3 Shareholder is acquiring the CRA Common Shares being
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<PAGE>
issued to him or her hereunder for his or her own account for investment
purposes and not with the view to, or for resale in connection with, any
distribution or public offering thereof within the meaning of the Securities
Act. Such QMC3 Shareholder understands that the CRA Common Shares have not been
registered under the Securities Act or any applicable state laws by reason of
their issuance or contemplated issuance in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act and such
laws, and that the reliance of CRA and others upon this exemption is predicated
in part upon this representation and warranty. Such QMC3 Shareholder further
understands that the CRA Common Shares may not be transferred or resold without
(A) registration under the Securities Act and any applicable state securities
laws, or (B) an exemption from the requirements of the Securities Act and
applicable state securities laws.
(b) Such QMC3 Shareholder understands that an exemption from such
registration is not presently available pursuant to Rule 144 promulgated under
the Securities Act and that in any event such QMC3 Shareholder may not sell any
securities pursuant to Rule 144 prior to the expiration of a two-year period
after such QMC3 Shareholder has acquired the securities. Such QMC3 Shareholder
understands that any sales pursuant to Rule 144 may only be made in full
compliance with the provisions of Rule 144.
(c) The state in which such QMC3 Shareholder's domicile is located is set
forth in such QMC3 Shareholder's address in Schedule 5.1(e) hereto. Such QMC3
Shareholder has such knowledge and experience in financial and business matters
that, with the assistance of his or her advisors, he or she is capable of
evaluating the merits and risks of the investment in CRA Common Shares to be
made by it hereunder. Such QMC3 Shareholder has had access to CRA's executive
officers and has been provided with all information regarding CRA requested by
such QMC3 Shareholder.
(d) Such QMC3 Shareholder has carefully reviewed this Agreement, CRA's
prospectus dated May 3, 1995 and all documents delivered by CRA hereunder
pursuant to the request of such QMC3 Shareholder, including without limitation
the CRA SEC Reports (as hereinafter defined).
(e) Such QMC3 Shareholder agrees to the placing on the certificates
representing CRA Common Shares to be issued to him or her hereunder of a legend,
in substantially the following form, referring to the restriction set forth in
the preceding paragraph:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or applicable
state securities laws and may not be sold, transferred, assigned,
offered, pledged or otherwise
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<PAGE>
distributed unless there is an effective registration statement under
such Act and such laws covering such securities or CRA Managed Care,
Inc. receives an opinion of counsel satisfactory to CRA Managed Care,
Inc. stating that such sale, transfer, assignment, offer, pledge or
other distribution is exempt from the registration and prospectus
delivery requirements of such Act and such laws. The securities
represented by this certificate are subject to restrictions contained
in a certain Agreement and Plan of Merger, dated as of May __, 1996,
among CRA Managed Care, Inc., QMC3 Acquisition Corp., QMC3, Inc., and
the shareholders of QMC3, Inc. party thereto (the "Agreement") and may
not be sold, transferred, assigned, offered, pledged or otherwise
distributed except in accordance with the terms thereof."
(f) Such QMC3 Shareholder agrees that a stop transfer order shall be placed
with the Transfer Agent preventing transfer of any of the CRA Common Shares to
be issued hereunder pending compliance with the conditions set forth in the
above legend.
(g) Such QMC3 Shareholder has the legal capacity to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. This
Agreement and all other instruments and agreements required hereby to be
executed and delivered by such QMC3 Shareholder have been, or will be, duly
executed and delivered by or on behalf of such QMC3 Shareholder and are, or when
delivered will be, legal, valid and binding obligations of such QMC3 Shareholder
enforceable against such QMC3 Shareholder in accordance with their terms,
subject, as to enforceability, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or effecting creditors' rights
and to general principles of equity.
5.3 Representations, Warranties and Certain Covenants of CRA and
------------------------------------------------------------
Merger Sub. CRA and Merger Sub jointly and severally represent, warrant and
- ----------
covenant to QMC3 and the QMC3 Shareholders that:
(a) Corporate Organization. Each of CRA and Merger Sub is a corporation
----------------------
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. True and correct copies of the Charter and By-
Laws of CRA and Merger Sub in effect as of the date of this Agreement have been
provided to QMC3.
(b) Power. Each of CRA and Merger Sub has all requisite corporate power
-----
and authority to own and operate its properties, to carry on its business as
now being conducted, to execute and deliver this Agreement and to consummate the
transactions
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<PAGE>
contemplated hereby.
(c) Corporate Authority. The execution and delivery of this Agreement by
-------------------
CRA and Merger Sub, and the consummation of the transactions contemplated
hereby, have been, or prior to the Effective Time will be, duly authorized by
all necessary corporate action on the part of CRA and Merger Sub. This
Agreement and all other instruments required hereby to be executed and delivered
by CRA or Merger Sub have been, or will be, duly executed and delivered by
authorized officers of CRA or Merger Sub, as the case may be, and are, or when
delivered will be, legal, valid and binding obligations of CRA and Merger Sub,
enforceable against CRA and Merger Sub in accordance with their terms, subject,
as to enforceability, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and to
general principles of equity.
(d) Authorization for CRA Common Shares. CRA has taken all necessary
-----------------------------------
action to permit it to issue the number of CRA Common Shares required to be
issued pursuant to Article IV. The CRA Common Shares issued pursuant to Article
IV will, when issued, be duly authorized, validly issued, fully paid and
nonassessable and no shareholder of CRA will have any preemptive right of
subscription or purchase in respect thereof.
(e) Consents and Approvals; No Violation. Neither the execution and
------------------------------------
delivery of this Agreement nor the consummation by CRA and Merger Sub of the
transactions contemplated hereby will (i) conflict with or result in any breach
of any provision of the Charter or By-Laws of CRA and Merger Sub; (ii) require
any consent, approval, authorization or permit of, or filing with or
notification to, any governmental authority, except (A) filings by CRA, pursuant
to the applicable requirements of the Securities Exchange Act and under the
Securities Act and applicable state securities laws, and (B) the filings of
Certificates of Merger pursuant to the MBCL and the CBCA; (iii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration of lien or other charge or encumbrance) under any of the terms,
conditions or provisions of any note, license agreement or other instrument or
obligation to which CRA or Merger Sub or any of their assets may be bound,
except for such violations, breaches and defaults (or rights of termination,
cancellation or acceleration or lien or other charge or encumbrance) as to which
requisite waivers or consents will have been obtained prior to the Effective
Time; or (iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to CRA or Merger Sub or to any of their respective assets.
(f) SEC Reports. CRA's prospectus dated May 3, 1995 complied in all
-----------
material respects with the Securities Act of 1933, as amended. Since May 3,
1995, CRA has filed all forms, reports and documents with the Securities and
Exchange Commission (the "SEC") required to be filed by it pursuant to the
federal securities laws and the SEC
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<PAGE>
rules and regulations thereunder, all of which complied in all material respects
with all applicable requirements of the Securities Exchange Act (collectively,
the "CRA SEC Reports"). CRA has provided to QMC3 copies of all CRA SEC Reports.
At the time filed, none of the CRA SEC Reports, including without limitation any
financial statements or schedules included therein, nor CRA's prospectus dated
May 3, 1995, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(g) Absence of Certain Changes or Events. Except as disclosed in the CRA
------------------------------------
SEC Reports and except for the transactions contemplated hereby, since December
31, 1995, the business of CRA has been carried on only in the ordinary and usual
course, and there has been no material adverse change in the financial
condition, operations, results of operations, management or business of CRA
since December 31, 1995.
(h) Full Disclosure. No representation or warranty by CRA contained in
---------------
this Agreement contains any untrue statement of a material fact, or omits to
state any material fact necessary to make the representations and warranties
herein contained not misleading.
(i) Continuity of Business Enterprise. CRA shall cause QMC3 to continue at
---------------------------------
least one significant, historic business line of QMC3, or use at least a
significant portion of the historic business assets of QMC3 in a business, in
each case within the meaning of Treasury Regulation (S)1.358-1(d) and, in each
case, unless otherwise determined by CRA, only to the extent required by such
regulation.
(j) Control. CRA shall maintain control of QMC3 immediately after the
-------
Effective Time within the meaning of Treasury Regulation (S)1.368-2(j)(3)(ii).
ARTICLE VI
CERTAIN COVENANTS
6.1 Conduct of QMC3's Business Pending the Merger. QMC3 and the QMC3
---------------------------------------------
Shareholders agree that, from the date hereof to the Effective Time, except to
the extent that CRA shall otherwise consent in writing:
(a) QMC3 shall, and shall cause the Subsidiary to, operate its business
substantially as presently planned or operated and only in the ordinary, usual
and customary manner, and, consistent with such operation, will use its best
efforts to preserve intact its present business organization and its
relationships with persons having business relationships with it.
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<PAGE>
(b) No amendment shall be made to the Articles of Incorporation or the
Bylaws of QMC3.
(c) There shall be no changes in the number of shares, par value or class
of authorized or issued capital stock of QMC3 or the Subsidiary; provided,
however, QMC3 may issue QMC3 Shares upon exercise of stock options in accordance
with the terms thereof as in effect on the date hereof. In addition, neither
QMC3 nor the Subsidiary shall grant, modify or amend any option, warrant,
convertible security, or other right to acquire any shares of its capital stock.
(d) There shall not be any declaration or payment of any dividend in cash,
stock, or property or other distribution in respect to the capital stock of
QMC3.
(e) Each of QMC3 and the Subsidiary shall maintain its current outstanding
indebtedness for borrowed money at zero dollars and shall not borrow or agree to
borrow any funds or incur, or assume or become subject to, whether directly or
by way of guaranty or otherwise, any obligation or liability (contingent or
absolute), except all taxes and any obligations and liabilities incurred in the
ordinary course of business and consistent with past practice, provided that
--------
there shall be no capital expenditures or commitments for capital expenditures
in excess of $20,000 in the aggregate.
(f) Neither QMC3 nor the Subsidiary shall (i) enter into any employment
contract or consulting agreement or make any offer of employment to any persons
or offer to engage any person as a consultant, or (ii) increase the wages,
salary, fees or other compensation of any person(s) presently employed or
rendering any service(s) to QMC3 or the Subsidiary, other than declaring or
paying the one-time bonus contemplated by Section 5.1(n)(n) of this Agreement.
(g) Neither QMC3 nor the Subsidiary shall accelerate payments of its
accounts receivable or delay payment of its accounts payable except in the
ordinary course of business and consistent with past practice or acquire control
or ownership of any other corporation, association, joint venture, partnership,
business trust, or other business entity, or to acquire control or ownership of
all or a substantial portion of the assets of any of the foregoing, or to merge,
consolidate, or otherwise combine with any other corporation or to enter into
any agreement providing for any of the foregoing.
(h) Except in the ordinary course of business, neither QMC3 nor the
Subsidiary shall enter into, materially amend or renew, or waive or release any
rights of material value under, any Material Contract.
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<PAGE>
(i) Neither QMC3 nor any of the QMC3 Shareholders shall take any
action, directly or indirectly, to negotiate or discuss with any person or
entity, or solicit from any person or entity, any offer or indication of
interest regarding (i) any merger or consolidation of QMC3 with any person other
than CRA or Merger Sub, (ii) any sale of a material portion of the assets of
QMC3 or any license of any intellectual property or technology of QMC3, (iii)
any equity or debt investment in QMC3 by any person other than CRA or Merger
Sub, or (iv) any sale or transfer by the QMC3 Shareholders of any QMC3 Shares
other than to CRA or Merger Sub.
(j) QMC3 shall not make any loans, advances, commitments of any kind, or
other distribution, directly or indirectly, to any of the QMC3 Shareholders or
their affiliates, except for payments of salary, fees, and benefits prior to the
Effective Time to the QMC3 Shareholders solely for services rendered in their
respective capacities as employees of, or consultants or contractual service
providers to, QMC3 in accordance with past practice, in the ordinary course.
(k) Neither QMC3 nor the Subsidiary shall agree, in writing or otherwise,
to do any of the foregoing.
6.2 Books and Records; Access and Information. From the date of this
-----------------------------------------
Agreement until the Effective Time, QMC3 shall give to CRA, its officers and
representatives reasonable access to the premises, books and records of QMC3 and
the Subsidiary, and provide CRA with such financial and operating data and other
information with respect to its business and properties as it shall from time to
time reasonably request, including, without limitation, all interim financial
data as soon as it becomes available; provided, however, that any such
investigation shall be conducted in such manner as not to interfere unreasonably
with the operation of the businesses of QMC3 and the Subsidiary.
6.3 Notification of Certain Matters. Subsequent to the date of this
-------------------------------
Agreement and on or prior to the Effective Time, (a) QMC3 shall promptly notify
CRA of any of the following of which QMC3, to the Knowledge of QMC3, becomes
aware, and (b) CRA shall promptly notify QMC3 of any of the following of which
CRA becomes aware:
(i) the receipt of any notice of, or other communication relating to,
a default or event which, with notice or lapse of time or both, would become a
default, under any material agreement to which it is a party or to which it or
any of its respective material properties or assets may be subject or bound;
(ii) the receipt of any notice or other communication from any third
party whose consent or approval is or may be required in connection with the
transactions contemplated by this Agreement, denying such consent or approval;
(iii) the receipt of any notice or other communication from any
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<PAGE>
governmental regulatory agency or authority in connection with the transactions
contemplated hereby;
(iv) any material adverse change in its consolidated business,
consolidated financial condition, operating results, assets, management,
employee relations or customer relations; or
(v) any condition or fact which would not permit it to satisfy a
condition to the other's obligation to effect the transactions contemplated
hereby, including the Merger.
6.4 Confidentiality. Each of the parties hereto agrees that it shall,
---------------
and shall cause its subsidiaries and the officers, employees and authorized
representatives of each of them to hold in strict confidence all data and
information obtained by them from the other parties hereto (unless such
information is or becomes readily ascertainable from public or published
information) and shall not, and shall ensure that such subsidiaries, directors,
officers, employees and authorized representatives do not, voluntarily disclose
such information to others without the prior written consent of the party from
which such data or information was obtained. In the event of the termination of
this Agreement without consummation of the transactions contemplated hereby,
each of the parties will return or destroy all documents, work papers and other
materials (including all copies made thereof) obtained pursuant hereto.
6.5 Pooling. Each of CRA, QMC3, and the QMC3 Shareholders hereby
-------
covenant and agree to take all steps reasonably necessary in order to permit CRA
to determine, based on the advice of Arthur Anderson LLP and such other advice
as CRA may deem relevant, that consummation of the Merger would be accounted for
as a pooling of interests in accordance with generally accepted accounting
principles. Without limiting the generality of the foregoing, each of the QMC3
Shareholders agrees that he will not sell or in any other way reduce such QMC3
Shareholder's risk relative to any CRA Common Shares received in the Merger
(within the meaning of the SEC's Financial Reporting Release No. 1,
"Codification of Financing Reporting Policies," (S) 201.01 [47 F.R. 21030]
(April 15, 1982)), until the earlier of (i) such time as financial results
(including combined sales and net income) covering at least 30 days of post-
merger operations have been published, except as permitted by Staff Accounting
Bulletin No. 76 issued by the SEC or (ii) September 1, 1996.
6.6 Employee Matters. Following the Effective Time CRA will cause
----------------
QMC3, as the surviving corporation, to continue to employ as at will employees
those persons who were employees of QMC3 immediately prior to the Effective
Time, subject to QMC3's right to terminate such employment at any time (except
for those employees party to written employment agreements disclosed at Section
5.1(k) of the QMC3 Disclosure Schedule, who shall be employed on the terms set
forth therein, and except for Kimberly Sutphin, who shall be employed pursuant
to an agreement in the form of Exhibit B). CRA will offer to include each of
the QMC3 employees in its employee benefit plans, and will give credit for years
of service to
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<PAGE>
CRA in determining eligibility and vesting under such plans.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions to Obligation of CRA and Merger Sub to Close. The
-------------------------------------------------------
obligation of CRA and Merger Sub to effect the closing of the transactions
contemplated by this Agreement is subject to the satisfaction prior to or at the
Closing of the following conditions:
(a) Representations and Warranties. The representations and warranties of
------------------------------
QMC3 and the QMC3 Shareholders under this Agreement shall be true and correct in
all material respects as of the Closing Date with the same effect as though made
on and as of the Closing Date.
(b) Observance and Performance. QMC3 and the QMC3 Shareholders shall have
--------------------------
performed and complied with all covenants and agreements required by this
Agreement to be performed and complied with by them prior to or as of the
Closing Date.
(c) No Adverse Change. There shall have occurred no material adverse change
-----------------
in the business, condition (financial or otherwise), management, prospects or
results of operations of QMC3 since December 31, 1995.
(d) Officers' Certificate. QMC3 shall have delivered to CRA a certificate,
---------------------
dated the Closing Date, executed by the President of QMC3 and certifying to the
satisfaction of the conditions specified in Sections 7.1(a), (b) and (c) hereof,
insofar as they relate to QMC3.
(e) Certificate of QMC3 Shareholders. The QMC3 Shareholders shall have
--------------------------------
delivered to CRA a certificate or certificates, dated the Closing Date, executed
by each of the QMC3 Shareholders, and certifying to the satisfaction of the
conditions specified in Sections 7.1(a) and (b) hereof, insofar as they relate
to the QMC3 Shareholders.
(f) Consents of Third Parties. CRA shall have received duly executed copies
-------------------------
of all consents and agreements necessary for QMC3 and the QMC3 Shareholders to
effect the transactions contemplated hereby, except for any consents from
parties to the contracts listed in Section 5.1(f) of the QMC3 Disclosure
Schedule. CRA hereby agrees to use its reasonable efforts to assist QMC3 in
obtaining such consents and agreements.
(g) Legal Opinion. CRA shall have received an opinion, dated the Closing
-------------
Date from Sherman & Howard LLC., counsel to QMC3 and the QMC3 Shareholders,
substantially in the form attached hereto as Exhibit A.
---------
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<PAGE>
(h) Pooling Opinion. Arthur Andersen LLP shall have issued to CRA an
---------------
opinion to the effect that the Merger will qualify as a "pooling of interests"
for accounting purposes.
(i) Surrender of Certificates. The QMC3 Shareholders shall have surrendered
-------------------------
all Certificates to CRA for cancellation after the Effective Time.
(j) Closing Documents. CRA shall have received such further instruments and
-----------------
documents as may be reasonably required for QMC3 and the QMC3 Shareholders to
consummate the transactions contemplated hereby.
(k) Employment Agreement. Kimberly Sutphin shall have entered into an
--------------------
employment and non-competition agreement with QMC3 substantially in the form
attached hereto as Exhibit B.
---------
(l) Escrow Agreement. The QMC3 Shareholders, Escrow Agent and Shareholder
----------------
Representative shall have entered into an escrow agreement (the "Escrow
Agreement"), in substantially the form attached hereto as Exhibit C.
---------
(m) No Legal Actions. No court or governmental authority of competent
----------------
jurisdiction shall have issued an order not subsequently vacated, restraining,
enjoining or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement, and no person, firm, corporation or governmental
agency shall have instituted an action or proceeding which shall not have been
previously dismissed seeking to restrain, enjoin or prohibit the consummation of
the transactions contemplated by this Agreement or seeking damages with respect
thereto.
(n) Proceedings and Documents. All corporate and other proceedings and
-------------------------
actions taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments and documents mentioned herein
or incident to any such transaction shall be reasonably satisfactory in form and
substance to CRA and its counsel.
(o) Resignations. QMC3's directors and officers shall have resigned in
------------
writing from all such positions to the extent requested by CRA, as well as from
any employee plan described in Section 5.1(j) of the QMC3 Disclosure Schedule,
effective immediately prior to the Effective Time.
(p) Continuity of Interest Certificates. Each of the QMC3 Shareholders
-----------------------------------
shall have executed and delivered a Continuity of Interest Certificate,
substantially in the form attached hereto as Exhibit D, regarding the QMC3
Shareholders' ownership of CRA Common Shares.
(q) Managed Care Organization Certification. QMC3, either directly or
---------------------------------------
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<PAGE>
through Preferred Choice Management System, Inc. d/b/a MagnaCare, subject to
contracts with QMC3 previously delivered to CRA, shall have obtained and shall
have continued to maintain Managed Care Organization Certification from the
State of New York for providing managed care services in the automobile industry
in such State.
(r) Termination of Shareholders' Agreement. Each of the parties to any and
--------------------------------------
all agreements related to the ownership, disposition and transfer of QMC3 Shares
shall have caused such agreements (other than this Agreement) to have been
terminated prior to the Effective Time.
7.2 Conditions to Obligations of QMC3 and the QMC3 Shareholders to
--------------------------------------------------------------
Close. The obligation of QMC3 and the QMC3 Shareholders to effect closing of the
- -----
transactions contemplated by this Agreement is subject to the satisfaction prior
to or at the Closing of the following conditions:
(a) Representations and Warranties. The representations and warranties of
------------------------------
CRA and Merger Sub under this Agreement shall be true and correct in all
material respects as of the Closing Date with the same effect as though made on
and as of the Closing Date.
(b) Observance and Performance. CRA and Merger Sub shall have performed and
--------------------------
complied with all covenants and agreements required by this Agreement to be
performed and complied with by them prior to or as of the Closing Date.
(c) No Adverse Change. There shall have occurred no material adverse change
-----------------
in the business, condition (financial or otherwise), management, prospects and
results of operations of CRA since December 31, 1995.
(d) Officers' Certificate. CRA shall have delivered to QMC3 and the
---------------------
QMC3 Shareholders a certificate, dated the Closing Date, executed by an
executive officer of CRA and certifying to the satisfaction of the conditions
specified in Sections 7.2 (a), (b) and (c) hereof.
(e) Legal Opinion. QMC3 and the QMC3 Shareholders shall have received an
-------------
opinion, dated the Closing Date, from Hutchins, Wheeler & Dittmar, A
Professional Corporation, counsel to CRA and Merger Sub, substantially in the
form attached hereto as Exhibit E.
---------
(f) Registration Rights Agreement. The Registration Rights Agreement, in
-----------------------------
the form attached hereto as Exhibit F, shall have been executed and delivered by
---------
all parties hereto.
(g) Employment Agreement. QMC3 shall have entered into, or CRA shall have
--------------------
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<PAGE>
agreed in writing to cause QMC3 to enter into as of the Closing Date, an
employment and non-competition agreement with Kimberly Sutphin substantially in
the form attached hereto as Exhibit B.
---------
(h) No Legal Actions. No court or governmental authority of competent
----------------
jurisdiction shall have issued an order, not subsequently vacated, restraining,
enjoining or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement, and no person, firm, corporation or governmental
agency shall have instituted an action or proceeding which shall not have been
previously dismissed seeking to restrain, enjoin or prohibit the consummation of
the transactions contemplated by this Agreement or seeking damages with respect
thereto.
(i) Closing Documents. QMC3 and the QMC3 Shareholders shall have received
-----------------
such further instruments and documents as may be reasonably required for CRA and
QMC3 to consummate the transactions contemplated hereby.
(j) Proceedings and Documents. All corporate and other proceedings and
-------------------------
actions taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments and documents mentioned herein
or incident to any such transaction shall be reasonably satisfactory in form and
substance to QMC3 and its counsel.
(k) Escrow Agreement. CRA and the Escrow Agent shall have entered into
----------------
the Escrow Agreement.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by QMC3 Shareholders. Subject to the limitations
------------------------------------
set forth in this Article VIII and in the Escrow Agreement, each of the QMC3
Shareholders hereby agrees to indemnify and hold harmless CRA from and after the
Effective Time against and with respect to the following (together referred to
as "CRA Losses"):
(a) Any and all loss, injury, damage or deficiency resulting from any
misrepresentation or breach of warranty on the part of QMC3 or the QMC3
Shareholders under this Agreement;
(b) Any and all loss, injury, damage or deficiency resulting from any non-
fulfillment of any covenant or agreement on the part of QMC3 or the QMC3
Shareholders under this Agreement; and
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<PAGE>
(c) Any and all demands, claims, actions, suits or proceedings, assessments,
judgments, costs and legal and other expenses incident to any of the foregoing.
8.2 Indemnification by CRA. Subject to the limitations set forth in
----------------------
this Article VIII, CRA hereby agrees to indemnify and hold harmless each of the
QMC3 Shareholders at all times from and after the Effective Time against and
with respect to the following (together referred to as "QMC3 Losses"):
(a) Any and all loss, injury, damage or deficiency resulting from any
misrepresentation or breach of warranty on the part of CRA or Merger Sub under
this Agreement;
(b) Any and all loss, injury, damage or deficiency resulting from any non-
fulfillment of any covenant or agreement on the part of CRA or Merger Sub under
this Agreement; and
(c) Any and all demands, claims, actions, suits or proceedings, assessments,
judgments, costs and legal and other expenses incident to any of the foregoing.
8.3 Procedures for Indemnification. Promptly after receipt by an
------------------------------
indemnified party pursuant to the provisions of Section 8.1 or Section 8.2 of
notice of the commencement of any action involving the subject matter of the
foregoing indemnity provisions, such indemnified party shall, if a claim thereof
is to be made against an indemnifying party pursuant to the provisions of
Section 8.1 or Section 8.2, promptly notify such indemnifying party of the
commencement thereof; but the omission to so notify such indemnifying party will
not relieve it from any liability which it may have to the indemnified party to
the extent the indemnifying party was not prejudiced by such omission. In case
such action is brought against an indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall
have the right to participate in, and, to the extent that it may wish, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, if the defendants in any action include both the
-------- -------
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it which
are different from or additional to those available to the indemnifying party,
or if there is a conflict of interest which would prevent counsel for the
indemnifying party from also representing the indemnified party, the indemnified
party shall have the right to select separate counsel to participate in the
defense of such action on behalf of such indemnified party. After notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to the
indemnified party pursuant to the provisions of such Section 8.1 or Section 8.2
for any legal or other expense subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation, unless (a) the indemnified party shall have employed counsel in
accordance with the proviso of the preceding sentence, (b) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified
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<PAGE>
party within a reasonable time after the notice of the commencement of the
action, or (c) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party. No
indemnifying party, in the defense of any such claim or litigation, 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 release from all liability in respect to such claim or
litigation.
8.4 Limitations on Indemnification by QMC3 Shareholders.
---------------------------------------------------
Notwithstanding Section 8.1 or any other provision of this Agreement or
applicable law, the QMC3 Shareholders' aggregate liability for CRA Losses is
subject to the following limitations:
(a) The QMC3 Shareholders shall have no liability for any CRA Loss unless
notice of a claim for such CRA Loss, specifying in reasonable detail the basis
for such claim, is made upon the QMC3 Shareholders on or before the earlier of
(i) the one year anniversary of this Agreement and (ii) the date audited
financial statements of CRA for the year ended December 31, 1996 are released to
CRA (the earlier of such dates being referred to herein as the "Representation
Termination Date").
(b) The QMC3 Shareholders' maximum aggregate liability for CRA Losses shall
be 10% of the CRA Common Shares issuable to the QMC3 Shareholders hereunder.
(c) The QMC3 Shareholders shall be liable for CRA Losses only if the
aggregate CRA Losses sustained by CRA and Merger Sub exceed $50,000.
(d) At the Closing, the QMC3 Shareholders shall, for the purpose of
indemnifying CRA for Losses hereunder, deposit with the Escrow Agent, pursuant
to the terms and conditions of the Escrow Agreement, shares of CRA Common Stock
as described in this Section 8.4(d) (the "Escrowed Shares"). The deposit of
Escrowed Shares by the QMC3 Shareholders shall be pro rata based upon the number
of CRA Common Shares each QMC3 Shareholder is entitled to received pursuant to
the terms of this Agreement and shall consist of 10% of such shares as
contemplated by Section 4.1. The Escrowed Shares shall be held and distributed
by the Escrow Agent pursuant to the terms of the Escrow Agreement. CRA agrees
that the sole and exclusive remedy against the QMC3 Shareholders for recovery of
any liability, Loss, damage, injury or claim under this Agreement shall be
limited to the Escrowed Shares pursuant to the terms of the Escrow Agreement.
8.5 Limitations on Indemnification by CRA. Notwithstanding Section
-------------------------------------
8.2 or any other provision of this Agreement or applicable law, CRA's aggregate
liability for QMC3 Losses is subject to the following limitations:
(a) CRA shall have no liability for any QMC3 Loss unless notice of a claim
for such QMC3 Loss, specifying in reasonable detail the basis for such claim, is
made upon
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<PAGE>
CRA on or before the last Representation Termination Date.
(b) CRA's maximum aggregate liability for QMC3 Losses shall be 10% of the
aggregate Closing Market Price of the CRA Common Shares issuable to the QMC3
Shareholders hereunder.
(c) CRA shall be liable for QMC3 Losses only if the aggregate QMC3 Losses
sustained by QMC3 and the QMC3 Shareholders exceed $50,000.
8.6 Mitigation of Losses. CRA Losses and QMC3 Losses shall be
--------------------
referred to herein collectively sometimes as "Losses." Losses for which any
party is liable under this Article VIII shall be subject to appropriate
mitigation for any actual recovery from third parties (less attorneys' fees,
expenses and other costs of recovery), net savings realized from tax reductions
and the actual collection of insurance proceeds (less attorneys' fees, expenses
and other costs of recovery), with respect to the event or condition giving rise
to such Losses. The parties hereto agree that payment for Losses under this
Article VIII shall be treated as an adjustment to purchase price.
8.7 Exclusivity. The remedies, subject to limitations, set forth in
-----------
this Article VIII shall be the sole remedy for claims of the parties to this
Agreement for liability arising under this Agreement.
8.8 Cooperation in Defense. In case of any claim, arbitration or
----------------------
legal proceeding, the defense of which is assumed by any of the QMC3
Shareholders in accordance with this Article VIII, the Surviving Corporation,
upon request of such QMC3 Shareholder(s), shall provide reasonable cooperation
(at the expense of the QMC3 Shareholders in accordance with this Article VIII)
in the defense thereof, including affording to such QMC3 Shareholder(s) the
right of access, during normal business hours, upon reasonable notice and
without disturbing the business of the Surviving Corporation or CRA, to
pertinent books and records for purposes of inspection and making copies.
8.9 No Solicitation of Claims.
-------------------------
(a) Notwithstanding anything to the contrary contained in this Agreement,
the QMC3 Shareholders shall not be obligated to indemnify CRA or Merger Sub with
respect to any CRA Loss to the extent an officer of CRA intentionally provides
to the third party making the claim which gave rise to such CRA Loss, on an
unsolicited basis, written information which clearly indicates on the face of
such information that such third party has or may have a claim covered under
this Article VIII which is the same as the claim that gave rise to the CRA Loss,
or to the extent CRA intentionally solicits such third party to make such a
claim, which solicitation was a proximate cause of such third party's decision
to pursue the claim giving rise to such CRA Loss, except in either case to the
extent required by law or to the extent provided in the context of a dispute
resolution with respect
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<PAGE>
to such a claim.
(b) Notwithstanding anything to the contrary contained in this Agreement,
CRA shall not be obligated to indemnify the QMC3 Shareholders with respect to
any QMC3 Loss to the extent either QMC3 Shareholder intentionally provides to
the third party making the claim which gave rise to such QMC3 Loss, on an
unsolicited basis, written information which clearly indicates on the face of
such information that such third party has or may have a claim covered under
this Article VIII which is the same as the claim that gave rise to the QMC3
Loss, or to the extent either of the QMC3 Shareholders intentionally solicits
such third party to make such a claim, which solicitation was a proximate cause
of such third party's decision to pursue the claim giving rise to such QMC3
Loss, except in either case to the extent required by law or to the extent
provided in the context of a dispute resolution with respect to such a claim.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated and the Merger
-----------
abandoned at any time prior to the Effective Time, whether before or after
approval of the Merger by the QMC3 Shareholders:
(a) by mutual consent of the Boards of Directors of CRA and QMC3; or
(b) by either CRA or QMC3 if (i) any of the conditions to their respective
obligations specified in Article VII hereof have not been satisfied or waived
prior to June 30, 1996, or (ii) the Merger shall not have been
consummated on or before June 30, 1996; provided, however, that the right to
-------- -------
terminate this Agreement pursuant to this Section 9.1 shall not be available to
any party whose failure to fulfill any obligation under this Agreement shall
have been the cause of, or resulted in, the failure of any of the conditions
specified in Article VII that are required to have been satisfied prior to the
Merger.
9.2 Effect of Termination. In the event of the termination of this
---------------------
Agreement by either CRA or QMC3, as provided above, this Agreement shall
thereafter become void and there shall be no liability on the part of any party
hereto or their respective directors, officers, shareholders or agents, except
as provided in Sections 6.4 and 10.2 hereof and except that any such termination
shall be without prejudice to the rights of any party hereto arising out of the
willful breach by any other party of any covenant or agreement contained in this
Agreement.
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<PAGE>
ARTICLE X
MISCELLANEOUS
10.1 Survival of Representations, Warranties, Covenants and Agreements.
-----------------------------------------------------------------
The representations, warranties, covenants and agreements of CRA and the QMC3
Shareholders in this Agreement shall survive the Effective Time.
10.2 Expenses. Whether or not the Merger is consummated, all costs and
--------
expenses (including without limitation the fees and expenses of investment
bankers, attorneys and accountants) incurred in connection with this Agreement
and the transactions contemplated hereby shall be borne (i) by CRA, in the case
of costs and expenses incurred by CRA or Merger Sub, and (ii) by the QMC3
Shareholders, in the case of costs and expenses incurred by QMC3 and the QMC3
Shareholders, except that the first $25,000 of such costs and expenses incurred
by QMC3 shall be borne by QMC3.
10.3 Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given, if given) by hand delivery, transmitted by
telegram, telex or telecopy or mailed by registered or certified mail, postage
prepaid, return receipt requested, as follows:
(a) If to CRA or Merger Sub to:
CRA Managed Care, Inc.
312 Union Wharf
Boston, Massachusetts 02109
Attention: John McCarthy
Telephone: (617) 367-2163
Telecopy: (617) 367-8519
with a copy to:
Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, Massachusetts 02110
Attention: James Westra
Telephone: (617) 951-6600
Telecopy: (617) 951-1295
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<PAGE>
(b) If to QMC3 or the QMC3 Shareholders to:
QMC3, Inc.
10 Lakeside Lane
Denver, CO 80212
Attention: Kimberly Sutphin
Telephone: (303) 433-6898
Telecopy: (303) 433-7696
with a copy to:
Sherman & Howard LLC
633 Seventh Street
Suite 3000
Denver, CO 80202
Attention: Paul C. Daw, Esq.
Telephone: (303) 297-2900
Telecopy: (303) 298-0940
or to such other address as the person to whom notice is given has previously
furnished to the other parties in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt. Notice shall
be deemed to have been received when given by hand delivery or transmitted by
telegram, telex or telecopy and three days after deposited in the mail.
10.4 Amendments. This Agreement may not be amended, modified or
----------
supplemented except by written agreement of the parties hereto.
10.5 Waiver. At any time prior to the Effective Time, CRA or QMC3 may
------
(i) extend the time for the performance of any of the obligations or other acts
of the other party , (ii) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the obligations of the
other party or any of the conditions to its own obligations contained herein to
the extent permitted by law. Any agreement on the part of CRA and QMC3 to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of CRA and QMC3. For purposes of this Section 10.5,
the "other party" in relation to CRA means QMC3 and the QMC3 Shareholders. Any
such agreement on the part of QMC3 shall also be binding upon the QMC3
Shareholders.
10.6 Brokers. Each of CRA and Merger Sub hereby represents and
-------
warrants to QMC3 and QMC3 Shareholders that no broker, finder or investment
banker engaged by them is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated hereby. Each of
QMC3 and the QMC3 Shareholders hereby represents and
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<PAGE>
warrants to CRA and Merger Sub that no broker, finder or investment banker
engaged by QMC3 or the QMC3 Shareholders is entitled to any brokerage finder's
or other fee or commission in connection with the transactions contemplated
hereby.
10.7 Publicity. Unless otherwise consented to by CRA in advance, no
---------
party other than CRA shall make any public announcement or issue any press
release concerning the transactions contemplated by this Agreement, and any
public announcement or press release by CRA shall require the prior approval of
QMC3 both as to the making of such announcement or release and as to the form
and content thereof, except to the extent that CRA is advised by counsel, in
good faith, that such announcement or release is required as a matter of law and
full opportunity for prior consultation is afforded to QMC3 to the extent
practicable.
10.8 Headings. The headings contained in this Agreement are for
--------
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.9 Nonassignability. This Agreement shall not be assigned by any
----------------
party without the prior written consent of all other parties. Any purported
assignment in contravention of the preceding sentence shall be void.
10.10 Parties in Interest. This Agreement shall be binding upon and
-------------------
inure solely to the benefit of the parties hereto and their successors and
permitted assigns, and nothing in this Agreement, expressed or implied, is
intended to confer upon any other person any rights or remedies of any nature
under or by reason of this Agreement.
10.11 Counterparts. This Agreement may be executed in one or more
------------
counterparts each of which shall be deemed to constitute an original and shall
become effective when one or more counterparts have been signed by each of the
parties hereto.
10.12 Governing Law; Submission to Jurisdiction; Venue.
------------------------------------------------
(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of The Commonwealth of Massachusetts, without regard to
its conflicts of law rules.
(b) Any legal action or proceeding with respect to this Agreement may be
brought in, and adjudicated by, state or federal courts, as the case may be,
located in the City of Boston in the Commonwealth of Massachusetts and, by
execution and delivery of this Agreement, each of QMC3 and CRA hereto hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each of the parties
hereto hereby further irrevocably waives any claim that any such courts lack
jurisdiction over such party, and agrees not to plead or claim, in any legal
action or proceeding with respect to this Agreement brought in any of the
aforesaid courts, that any such court lacks jurisdiction over such party.
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<PAGE>
(c) Each of QMC3 and CRA hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement brought in
the courts referred to in clause (b) above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
10.13 Severability. If any term, provision, covenant or restriction
------------
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
10.14 Remedies. Except as otherwise expressly set forth herein,
--------
nothing contained herein is intended to or shall be construed so as to limit the
remedies which any party may have against the others in the event of a breach by
any party of any representation, warranty, covenant or agreement made under or
pursuant to this Agreement, it being intended that any remedies shall be
cumulative and not exclusive.
10.15 Entire Agreement. This Agreement, including the QMC3 Disclosure
----------------
Schedules and all exhibits referred to herein, the terms of which are
incorporated as additional terms of this Agreement, constitutes the entire
agreement among the parties hereto and supersedes all prior agreements and
understandings oral or written, among the parties hereto with respect to the
subject matter hereof and thereof, including any letters of intent.
10.16 Knowledge of QMC3. As used herein, the term "Knowledge of QMC3"
-----------------
shall be deemed to mean solely the knowledge, after due inquiry and
investigation, of Kimberly A. Sutphin, in her individual capacity and in her
capacity as stockholder, director, officer and/or employee of QMC3.
* * * * * * * * * * * * * * * * * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement, or have caused their duly authorized officers to execute this
Agreement of CRA, Merger Sub and QMC3 and by the QMC3 Shareholders on the date
first above written.
CRA MANAGED CARE, INC.
By:/s/ Donald J. Larson
-----------------------------------------
Donald J. Larson, President
QMC3 ACQUISITION CORP.
By:/s/ Donald J. Larson
-----------------------------------------
Donald J. Larson, President
QMC3, INC.
By:/s/ Kimberly A. Sutphin
-----------------------------------------
Name: Kimberly A. Sutphin
Title: President
QMC3 SHAREHOLDERS:
-----------------
/s/ Kimberly A. Sutphin
--------------------------------------------
Kimberly A. Sutphin
/s/ Henry J. Roth
--------------------------------------------
Henry J. Roth, M.D.
/s/ Howard J. Entin
--------------------------------------------
Howard J. Entin, M.D.
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<PAGE>
/s/ Ryan J. Conlon
--------------------------------------------
Ryan J. Conlon
/s/ John Eric Griffiths
--------------------------------------------
John Eric Griffiths, D.C.
/s/ Paul M. Baker
--------------------------------------------
Paul M. Baker
/s/ John Sbarbaro
--------------------------------------------
John Sbarbaro, M.D.
/s/ Nick Hilger
--------------------------------------------
Nick Hilger
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