STOCK PURCHASE AGREEMENT dated as of July 28, 2012 among ROPER INDUSTRIES, INC., VISTA EQUITY PARTNERS FUND III, L.P., VISTA EQUITY PARTNERS FUND III (PARALLEL), L.P., VEPF III FAF, L.P., VISTA EQUITY PARTNERS ASSOCIATES III, LLC, SUNQUEST SPONSOR HOLDINGS, LLC, SUNQUEST HOLDINGS, INC. and EACH OF THE PERSONS SET FORTH ON EXHIBITS A AND B HERETO, relating to the purchase and sale of 100% of the Common Stock of Sunquest Holdings, Inc. TABLE OF CONTENTS

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(b)            Each of the following terms is defined in the Section set forth opposite such term:

Section 1.02

Other Definitional and Interpretative Provisions

Section 2.01

Purchase and Sale

(b)            The "Closing Payment" shall be (i) $1,415,000,000, minus (ii) the Escrow Amount, minus (iii) the amount of the Closing Indebtedness, minus (iv) the amount of the Estimated Transaction Expenses, minus (v) the amount, if any, of any Working Capital Underage, plus (vi) the amount, if any, of any Working Capital Overage (the items in (iv) and (v), the "Working Capital Adjustment Amount") plus (vii) the amount of the Estimated Cash, minus (viii) the Sellers' Representative Expense Fund plus (ix) the amount of the HSR filing fee paid by the Company pursuant to Section 8.01 minus (x) the Elekta Payment minus (xi) the Pre-Closing Tax Accrual.

(c)            The "Per Share Price" shall be an amount equal to the quotient obtained by dividing (a) the excess of (i) the Closing Payment over (ii) the Aggregate Option Consideration by (b) the number of Shares outstanding as of the Closing.

 

Section 2.02

Closing

(a)            Buyer shall:

(i)

deliver to each Seller an amount equal to (A) the number of Shares held by such Seller at the Closing multiplied by (B) the Per Share Price by wire transfer in immediately available funds to an account of such Seller designated by such Seller, by notice to Buyer, which notice shall be delivered not later than three Business Days prior to the Closing Date (or if not so designated, then by certified or official bank check payable in immediately available funds to the order of such Seller in such amount) less, (C) solely in the case of Sponsor Holdings, the sum of the Credit Suisse Supplemental Escrow Amount and the Neuberger Supplemental Escrow Amount.

(ii)

deliver to the Company an amount equal to the Aggregate Option Consideration by wire transfer of immediately available funds to an account of the Company designated by the Company, by notice to Buyer, which notice shall be delivered not later than three Business Days prior to the Closing Date (or if not so designated, then by certified or official bank check payable in immediately available funds to the order of the Company in such amount);

(iii)

deliver $35,000,000 (the "Escrow Amount") by wire transfer in immediately available funds to Suntrust Bank (the "Escrow Agent") on behalf of the Sellers and Optionholders for deposit into a separate account (the "Escrow Account") in accordance with the terms of the Escrow Agreement;

(iv)

deliver $2,836,263 (the "Credit Suisse Supplemental Escrow Amount") by wire transfer in immediately available funds to the Escrow Agent on behalf of the Credit Suisse Entities for deposit into a separate account (the "Credit Suisse Supplemental Escrow Account") in accordance with the terms of the Escrow Agreement;

(v)

deliver $634,951 (the "Neuberger Supplemental Escrow Amount") by wire transfer in immediately available funds to the Escrow Agent on behalf of the Neuberger Entities for deposit into a separate account (the "Neuberger Supplemental Escrow Account") in accordance with the terms of the Escrow Agreement;

(vi)	repay, or cause to be repaid, on behalf of the Company and the Subsidiaries, the Closing Repaid Indebtedness by wire transfer in immediately available funds;

(vii)

deliver the amount of the Sellers' Representative Expense Fund to Sellers' Representative pursuant to Section 14.13(b); and

(viii)

pay, or cause to be paid, on behalf of the Company, the Estimated Transaction Expenses by wire transfer in immediately available funds.

(b)            Following delivery to the Company of the payment described in Section 2.02(a)(ii) above, the Company shall:

(i)	pay or cause to be paid to each Optionholder (at the Company's option, by wire transfer of immediately available funds, check or direct deposit) an amount equal to such Optionholder's allocable portion of each of the Aggregate Option Closing Amount and the Aggregate Option Escrow Amount; and

(ii)	cause each Optionholder to deliver such Optionholder's allocable portion of the Aggregate Option Escrow Amount by wire transfer in immediately available funds to Suntrust Bank (the "Option Escrow Agent") in accordance with the terms of the Option Escrow Agreement.

(c)            Sellers shall deliver to Buyer certificates for the Shares duly endorsed or accompanied by stock powers duly endorsed in blank with any required transfer stamps affixed thereto.

(d)            The Company shall deliver to Buyer payoff and termination letters, including Lien releases (in each case, in a form reasonably satisfactory to Buyer) from all holders of Closing Repaid Indebtedness and the payment of all associated fees and penalties.

 

Section 2.03

Treatment of Options

Section 2.04

Withholding

(b)            The Company shall be entitled to deduct and withhold from the amounts otherwise payable pursuant to Section 2.03 to any Optionholder such amounts (the "Optionholder Withholding Amounts") as the Company is required to deduct and withhold (or such greater amount requested in writing by the applicable Optionholder) in connection with the exercise of the underlying Option or with respect to the making of such payment under the Code, or any provision of state, local or foreign tax law and to properly remit such amount to the appropriate tax authority.

 

Section 2.05

Pre-closing Estimates

Section 2.06

Closing Statement

(b)            If Sellers' Representative disagrees with Buyer's calculation of Closing Working Capital or Closing Cash set forth in the Closing Statement, Sellers' Representative may, within 30 days after receipt of the Closing Statement (including reasonably detailed supporting calculations), deliver a written notice to Buyer disagreeing with such calculation(s) and setting forth Sellers' Representative's calculation(s) of such amount(s) (the "Closing Statement Objection").  The Closing Statement Objection shall specify those items or amounts as to which Sellers' Representative disagrees, and Sellers' Representative shall be deemed to have agreed with all other items and amounts contained in the Closing Statement.  If Sellers' Representative fails to deliver such a written notice within such 30 day period, Buyer's calculation of Closing Working Capital and/or Closing Cash, as applicable, set forth in the Closing Statement shall be binding upon the parties.

(c)            If the Closing Statement Objection shall be duly delivered pursuant to Section 2.06(b), Sellers' Representative and Buyer shall, during the 30 days following such delivery, use reasonable efforts to reach agreement on the disputed items or amounts in order to determine the amount of Closing Working Capital and/or Closing Cash, as applicable.  If, during such period or any mutually agreed extension thereof, Sellers' Representative and Buyer are unable to reach such agreement, they shall promptly thereafter cause independent accountants of nationally recognized standing mutually agreed upon by Buyer and the Stockholders' Representative (the "Accounting Referee") to review this Section 2.06, the definition of Closing Working Capital and/or Closing Cash, as applicable, the disputed items or amounts and any supporting materials related thereto for the purpose of calculating Closing Working Capital and/or Closing Cash, as applicable.  In making such calculation, the Accounting Referee shall consider only those items or amounts in Buyer's calculation of Closing Working Capital and/or Closing Cash, as applicable, as to which Sellers' Representative has disagreed.  In no event shall the Accounting Referee assign a value to any disputed item or amount that is less than the minimum value for any item claimed by either party or greater than the maximum value for any item or amount claimed by either party.  The Accounting Referee shall deliver to Sellers' Representative and Buyer, as promptly as practicable, a report setting forth such calculation.  Such report shall be final and binding upon Sellers' Representative and Buyer.

(d)            Buyer shall pay the proportion (expressed as a percentage) of the fees and expenses of the Accounting Referee determined by dividing (i) the difference between (A) Buyer's calculation of the contested portion of Working Capital and/or Closing Cash, as applicable, set forth on the Closing Statement and (B) the calculation of the contested portion of Working Capital and/or Closing Cash, as applicable determined by the Accounting Referee by (ii) the difference between (A) Buyer's calculation of the contested portion of Working Capital and/or Closing Cash, as applicable, set forth on the Closing Statement and (B) Sellers' Representative's calculation of the contested portion of Working Capital and/or Closing Cash, as applicable, set forth on the Closing Statement Objection.  Sellers' Representative shall pay the remaining proportion of the fees and expenses of the Accounting Referee from the Sellers' Representative Expense Fund.  For example, if Buyer claims in the Closing Statement that the total contested portion of Closing Working Capital is $1,000, Sellers' Representative claims in a Closing Working Capital Objection that the total contested portion is $2,000 and the Accounting Referee ultimately determines that such total contested portion is $1,300, then Buyer shall pay 30% of the fees and expenses of the Accounting Referee (($1,000 - $1,300) ÷ ($1,000 - $2,000) = 0.3 = 30%) and Sellers' Representative shall pay the remaining 70% from the Sellers' Representative Expense Fund.

(e)            Buyer shall cooperate with Sellers' Representative's preparation of a Closing Statement Objection, including by providing Sellers' Representative and its representatives with reasonable access during normal business hours to the books, records (including work papers, schedules, memoranda and other documents ), facilities and employees of Buyer pertaining to the calculation of Closing Working Capital and/or Closing Cash, as applicable.

 

Section 2.07

Adjustment Of Purchase Price

(i)

Buyer shall pay Sellers' Representative (for the benefit of Sellers and Optionholders in accordance with their Pro Rata Shares), as an adjustment to the purchase price, the amount (with interest as provided in Section 2.07(d)), if any, by which the Closing Payment calculated pursuant to pursuant to Section 2.01(b) would have increased had the Revised Working Capital Adjustment Amount been used in lieu of the Working Capital Adjustment Amount for the calculation of the Closing Payment; and

(ii)

Sellers' Representative and Buyer shall issue joint instructions to the Escrow Agent to distribute to Buyer from the Escrow Account the amount (with interest as provided in Section 2.07(d)), if any, by which the Closing Payment calculated pursuant to Section 2.01(b) would have decreased had the Revised Working Capital Adjustment Amount been used in lieu of the Working Capital Adjustment Amount for the calculation of the Closing Payment.

(b)            Within ten days after Final Cash has been determined:

(i)	if Estimated Cash exceeds Final Cash, Sellers' Representative and Buyer shall issue joint instructions to the Escrow Agent to distribute to Buyer from the Escrow Account, as an adjustment to the purchase price, with interest as provided in Section 2.07(d), the amount of such excess; and

(ii)	if Final Cash exceeds Estimated Cash, within ten days after Final Cash has been determined Buyer shall pay Sellers' Representative (for the benefit of Sellers and Optionholders in accordance with their Pro Rata Shares), with interest as provided in Section 2.07(d), the amount of such excess.

(c)            If payments pursuant to Section 2.07(a) and Section 2.07(b) are payable simultaneously, Buyer may elect to make a single net payment to the Sellers' Representative.  All payments to the Sellers' Representative pursuant to Section 2.07(a) and Section 2.07(b) shall be by wire transfer in immediately available funds to such account as may be designated by Sellers' Representative.

(d)            The amount of any payment or distribution pursuant to Section 2.07(a) shall bear interest from and including the Closing Date to but excluding the date of payment at a rate per annum equal to the prime rate as published in the Wall Street Journal, Eastern Edition in effect from time to time during the period from the Closing Date to the date of payment.  Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.

 

Section 2.08

Additional Post-Closing Adjustment.

(b)            If Company Pre-Closing Taxes Payable exceeds the Pre-Closing Tax Accrual, within ten (10) days after Company Pre-Closing Taxes Payable has been determined, the Sellers' Representative and Buyer shall issue joint instructions to the Escrow Agent to distribute to Buyer from the Escrow Account, as an adjustment to the purchase price, with interest calculated in the manner provided in Section 2.07(d), the amount of such excess.  If the Pre-Closing Tax Accrual exceeds Company Pre-Closing Taxes Payable, within ten (10) days after Company Pre-Closing Taxes Payable has been determined, the Buyer shall pay the Sellers' Representative (for the benefit of the Sellers and the Optionholders in accordance with their Pro Rata Shares) the amount of such excess, as an adjustment to the purchase price, with interest calculated in the manner provided in Section 2.07(d), by wire transfer in immediately available funds to such account as may be designated by the Sellers' Representative.

 

 

Section 3.01

Corporate Existence and Power

Section 3.02

Corporate Authorization

Section 3.03

Governmental Authorization

Section 3.04

Noncontravention

Section 3.05

Capitalization

(b)            All outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable.  Except as set forth in this Section 3.05, there are no outstanding (i) shares of capital stock or voting securities of the Company, (ii) securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company, (iii) options or other rights to acquire from the Company, or other obligation of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company or (iv) restricted shares, restricted share units, stock appreciation rights, performance shares, contingent value rights, "phantom" stock or similar securities or rights that are derivative of or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock or other voting securities or ownership interests in the Company (the items in Sections 3.05(b)(i), 3.05(b)(ii), 3.05(b)(iii) and 3.05(b)(iv) being referred to collectively as the "Company Securities").  There are no outstanding obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any Company Securities.  Other than the Subsidiaries of the Company, neither the Company nor any of the Subsidiaries owns or holds the right to acquire or is bound by any commitment or obligation to acquire, directly or indirectly, any shares of capital stock of, partnership interest or joint venture interest of, other securities or equity ownership interest of, or investments in, any other Person.

 

Section 3.06

Subsidiaries

(b)            All of the outstanding capital stock or other voting securities of each Subsidiary is owned by the Company, directly or indirectly, free and clear of any Lien (other than Liens listed on Section 1.01 "Permitted Liens," of the Company Disclosure Schedule) and free of any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other voting securities).  There are no outstanding (i) securities of the Company or any Subsidiary convertible into or exchangeable for shares of capital stock or voting securities of any Subsidiary, (ii) options or other rights to acquire from the Company or any Subsidiary, or other obligation of the Company or any Subsidiary to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of any Subsidiary or (iii) restricted shares, restricted share units, stock appreciation rights, performance shares, contingent value rights, "phantom" stock or similar securities or rights that are derivative of or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock or other voting securities or ownership interests in the Subsidiaries (the items in Sections 3.06(b)(i), 3.06(b)(ii) and 3.06(b)(iii) being referred to collectively as the "Subsidiary Securities").  There are no outstanding obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any outstanding Subsidiary Securities.

 

Section 3.07

Financial Statements

(b)            To the Company's knowledge, the Company and the Subsidiaries have in place systems and processes to (i) provide reasonable assurances regarding the reliability of the Financial Statements, and (ii) in a timely manner accumulate and communicate to the Company's principal executive officer and principal financial officer the type of information that would be required to be disclosed in the Financial Statements. To the Company's knowledge, there have been no instances of fraud by the Company or the Subsidiaries that occurred during the periods covered by the Financial Statements.

(c)            To the Company's knowledge, during the periods covered by the Financial Statements none of its or the Subsidiaries' directors, officers, employees, financial advisors, attorneys, accountants, consultants, agents and other authorized representatives has self-reported to any Governmental Authority the commission of any crime or the violation of any Law by the Company or any of its Subsidiaries.

(d)            During the periods covered by the Financial Statements, the Company's external auditor was independent of the Company and its management.  Section 3.07(d) of the Company Disclosure Schedule sets forth each written report by the Company's external auditors to the Company's Board of Directors, or any committee thereof, or the Company's management concerning any period covered by the Financial Statements.  The Company's revenue recognition policy is consistent with GAAP.

(e)            The minutes of the Company previously provided to Buyer contain materially accurate records of all MATERIAL actions taken, and summaries of all meetings held, by the Company's stockholders and by the Company's Board of Directors (and any committees thereof) since January 1, 2008 until the date hereof.

 

Section 3.08

Absence of Certain Changes

(b)            From the Balance Sheet Date until the date hereof, there has not been any action taken by the Company or any of the Subsidiaries that, if taken during the period from the date of this Agreement through the Closing Date without Buyer's consent, would constitute a breach of Section 6.01.

 

Section 3.09

No Undisclosed Material Liabilities

(b)            Neither the Company nor any Subsidiaries have any "off-balance sheet arrangements" (as such term is defined in Item 303(a)(4) of Regulation S-K promulgated under the 1934 Act).

 

Section 3.10

Intercompany Accounts; Affiliate Transactions

(b)            No Seller, Sponsor Holdings Owner or Affiliate thereof, nor any director or officer of the Company or any Subsidiary or any "associate" or any member of the "immediate family" (as such terms are respectively defined in Rules 12b-2 and 16a-1 of the 1934 Act) of any such director or officer directly or indirectly owns, or otherwise has any right, title or interest in, to or under, any material property or right, tangible or intangible, that is used by the Company or any of its Subsidiaries.

 

Section 3.11

Material Contracts.

(i)	any lease for personal property providing for annual rentals of $100,000 or more;

(ii)

any agreement for the future purchase or license of technology, materials, supplies, goods, services, equipment or other assets providing for either (A)  annual payments per fiscal year by the Company and the Subsidiaries of $250,000 or more or (B) aggregate payments by the Company and the Subsidiaries of $1,000,000 or more;

(iii)

with respect to the Company's 20 most significant customers and maintenance customers listed in Section 3.11(d) of the Company Disclosure Schedule, the underlying master agreements, maintenance agreements, license subscription agreements, license agreements, professional services agreements, joint development agreements, or substantially similar agreements between such customers and the Company or its Subsidiaries;

(iv)

with respect to the Company's 20 most significant vendors listed in Section 3.11(d) of the Company Disclosure Schedule, the underlying vendor agreements, purchase agreements, license agreements, sales agreements, or substantially similar agreements between such vendors and the Company or its Subsidiaries;

(v)

any commission, sales, agency, dealer, marketing, value-added re-seller, remarketer, distribution or other similar agreement (A) with any current employee that would require the payment to any employee under any such contract of an amount in excess of $200,000 during any fiscal year, (B) with any individual consultant, contractor or salesperson that is not an employee that would require the payment to any Person under any such contract of an amount in excess of $100,000 during any fiscal year, (C) with any partner of the Company or any Subsidiaries or providing for the payment of any commissions or other sales compensation to any employees or agents of such partner that would require the payment to any Person under any such contract of an amount in excess of $100,000 during any fiscal year, or (D) relating to the distribution of the Company Products and Services, or the products or services of any other Person that would require the payment to any Person under any such contract of an amount in excess of $250,000 during any fiscal year;

(vi)	any partnership, joint venture or other similar agreement or arrangement;

(vii)

the transaction agreements (it being understood that ministerial closing documents, agreements, certificates and statements need not be disclosed) relating to the acquisition or disposition of any business (whether by merger, sale of stock, sale of assets or otherwise, but excluding acquisitions solely of inventory) and any agreement containing an earn-out or similar provision, in any case either (x) entered into on or after October 10, 2007 or (y) pursuant to which the Company or any of the Subsidiaries has any outstanding obligations;

(viii)

any guaranty of any obligation for Indebtedness or other material guaranty;

(ix)	and agreement relating to Indebtedness, whether incurred, assumed, guaranteed or secured by any asset;

(x)	any option or franchise agreement;

(xi)

any agreement that (A) expressly restricts the freedom of the Company or any Subsidiary or any of their Affiliates after the Closing Date to compete in any line of business or with any Person or in any geographic area, (B) contains a "most favored nation" or similar provision or (C) other than customer and supplier agreements entered into in the ordinary course of business consistent with past practice, limits the freedom of the Company or any Subsidiary or any of their Affiliates after Closing to solicit, hire or employ any Person;

(xii)

any agreement with (A) any Seller or any of its Affiliates, (B) any Person directly or indirectly owning, controlling or holding with power to vote any outstanding voting securities of any Seller or any of its Affiliates, (C) any Person whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote by any Seller or any of its Affiliates or (D) any director or officer of any Seller or any of its Affiliates or any "associates" or members of the "immediate family" (as such terms are respectively defined in Rule 12b-2 and Rule 16a-1 of the 1934 Act) of any such director or officer (collectively, (A) through (D), the "Related Party Agreements");

(xiii)

any agreement pursuant to which the Company or any Subsidiary (A) receives or is granted any license, sublicense or other right to, or covenant not to be sued under, any Intellectual Property Right (other than any license to commercially-available Software with a total replacement cost of $100,000 or less) or (B) grants any license, sublicense or other right to, or covenant not to be sued under, any Intellectual Property Right (other than non-exclusive licenses granted in the ordinary course of business);

(xiv)

any shareholders agreement or similar agreement with or among the Company's stockholders, including any agreement that provides for preemptive rights or imposes any limitation or restriction on Common Stock, including any restriction on the right of a stockholder to vote, sell or otherwise dispose of such Common Stock;

(xv)	any contract relating to capital expenditures and involving aggregate future payments in excess of $200,000;

(xvi)

any contract providing for indemnification by the Company or any of its Subsidiaries, or in favor of the Company or any of the Subsidiaries, other than indemnification provisions arising in the ordinary course of business and consistent with past practices; and

(xvii)

any other agreement with the Company or the Subsidiaries that involves expected aggregate annual payments by any party of $500,000 or more which is not otherwise required to be set forth on Section 3.11 of the Company Disclosure Schedule.

(b)            Each MATERIAL Contract set forth on (or required to be set forth on) Section 3.11 of the Company Disclosure Schedule is a valid and binding agreement of the Company or a Subsidiary, as the case may be, and is in full force and effect, is enforceable against the Company and/or a Subsidiary that are party thereto, as the case may be, and to the knowledge of the Company is enforceable against each other party thereto, and none of the Company, any Subsidiary or, to the knowledge of the Company, any other party thereto is in default or breach in any material respect under the terms of any such agreement, contract, plan, lease, sublease, license, arrangement or commitment, and, to the knowledge of the Company, no event or circumstance has occurred that, with notice or lapse of time or both, would constitute any event of default thereunder.  True and complete copies of each such MATERIAL Contract has been delivered to Buyer.

(c)            To the knowledge of the Company, no Person who is a party to a MATERIAL Contract is actively renegotiating, any MATERIAL amount paid or payable to the Company or the Subsidiaries under any such MATERIAL Contract or any other MATERIAL term or provision of any such MATERIAL Contract.  None of the Company or the Subsidiaries has received any written notice within one year prior to the date hereof to terminate any MATERIAL Contract by any of the parties to any such MATERIAL Contract.

(d)            Section 3.11(d) of the Company Disclosure Schedule sets forth (i) the names of the 20 most significant customers (by dollar amount of total revenue) of the Company and the Subsidiaries for the years ended May 31, 2011 and May 31, 2012 and the dollar amount of total revenue for each such customer during such periods, (ii) the names of the 20 most significant maintenance customers (by dollar amount of total revenue from software maintenance services) of the Company and the Subsidiaries for the years ended May 31, 2011 and May 31, 2012 and (iii) the names of the ten most significant vendors (by total dollar amount of purchases) of the Company and the Subsidiaries for the years ended May 31, 2011 and May 31, 2012, specifying the total dollar amount of the purchases by the Company and the Subsidiaries from each such vendor for such periods.

 

Section 3.12

Litigation

Section 3.13

Compliance with Laws and Court Orders

Section 3.14

Properties

(b)            Section 3.14(b) of the Company Disclosure Schedule sets forth all of the leases, subleases, real estate license agreements and occupancy agreements (the "Leases") for all of the real property leased, subleased, licensed or occupied by the Company or the Subsidiaries (the "Leased Real Property").  Each Lease and lease for personal property is a valid and binding agreement of the Company or a Subsidiary, as the case may be, and is in full force and effect, is enforceable against the Company and/or a Subsidiary that are party thereto, as the case may be, and to the knowledge of the Company is enforceable against each other party thereto, and none of the Company, any Subsidiary or, to the knowledge of the Company, any other party thereto is in default or breach in any material respect under the terms of any such lease, and, to the knowledge of the Company, no event or circumstance has occurred that, with notice or lapse of time or both, would constitute a default thereunder.  True and complete copies of all Leases have been provided to Buyer.

(c)            Neither the Company nor any of the Subsidiaries has received since January 1, 2009 any written notice from any Governmental Authority asserting any material violation or alleged material violation of Applicable Laws with respect to any Leased Real Property that remains uncured as of the date of this Agreement, and the Company and the Subsidiaries are in compliance with any registration requirements and have paid any applicable stamp duties with respect to any leases that are imposed by a Governmental Authority as of the date of this Agreement.

(d)            The Company does not own any real property.

(e)            The tangible property and assets owned or leased by the Company or any Subsidiary, or which they otherwise have the right to use, constitute all of the property and assets used or held for use in connection with the businesses of the Company or any Subsidiary as currently conducted.

(f)            The Company or its Subsidiary that is either the tenant, subtenant or licensee under the leases, sublease or licenses for leased real property is in possession of the properties purported to be leased, subleased or licensed thereunder, except as set forth on Section 3.14(f) of the Company Disclosure Schedule.

 

Section 3.15

FDA and International Regulatory Matters

(a)            With only such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the Company and the Subsidiaries are in compliance with all Applicable Laws, statutes (including, but not limited to, the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §321 et. seq.), rules, regulations, standards, and orders administered or issued by the U.S. Food and Drug Administration (the "FDA") or any applicable, comparable foreign regulatory Governmental Authority, including requirements related to premarket clearance, exemption from premarket clearance, premarket approval, establishment registration and product listing, medical device reporting, corrections and removals, recalls, import and export requirements, product labeling, promotional materials and advertising, supplier qualification, purchasing controls, product testing, quality system regulation, and good manufacturing practices.

(b)            Neither the Company, the Subsidiaries, nor any of their directors, officers, or, to the Company's knowledge, employees has been charged with, nor received any written notice or other written communication from the FDA or any other Governmental Authority  since October 10, 2007 alleging, any material violation of any Laws by the Company or the Subsidiaries relating to its business.  To the Company's knowledge, the Company, the Subsidiaries and their directors, officers, or employees are not the subject of any investigation that is pending, proposed, or threatened by the FDA or any comparable Governmental Authority.  The Company and the Subsidiaries are not subject to any obligation arising under any civil or criminal judicial, administrative, or regulatory action, FDA inspection, FDA warning letter, FDA untitled letter, FDA notice of violation letter, or any other written communication from FDA or a comparable Governmental Authority or other written notice, response, or commitment made to or with FDA or a comparable Governmental Authority.  To the knowledge of the Company, no facts or circumstances exist that would reasonably be expected to result in civil or criminal judicial, administrative, or regulatory action, Form FDA-483 inspectional observations, untitled letter, notice of violation letter, warning letter, or similar communication from the FDA, or any comparable Governmental Authority.  No director, officer, or to the knowledge of the Company, employee, consultant or agent of the Company or the Subsidiaries, has been convicted of any crime or, to the knowledge of the Company, engaged in any conduct for which debarment is mandated or permitted by 21 U.S.C. § 335a.

(c)            As of the date hereof neither the Company nor the Subsidiaries is currently commencing or pursuing any, seizure, denial, withdrawal, recall, detention, field notification, field correction, termination or suspension of manufacturing or marketing, import alert, or safety alert relating to any of the Company Products and Services.

(d)            Section 3.15(c) of the Company Disclosure Schedule sets forth all inspections of the Company or any Subsidiary since January 1, 2009 by the FDA or any comparable Government Authority.

(e)            To the Company's knowledge, each filing, submission, or other communication to the FDA or any comparable Governmental Authority in any other jurisdiction made by the Company or any Subsidiary, was true, accurate and complete in all material respects as of the date made.  To the knowledge of the Company, there is no false or misleading information or significant omission in any product application or other submission to the FDA or other comparable Governmental Authority.  The Company and the Subsidiaries have notified the FDA and all such Governmental Authorities of any changes to such filings or submissions as required by Applicable Law.

(f)            The Company and the Subsidiaries possess all applicable certificates, authorizations, permits, registrations, clearances, approvals, and licenses issued, and exemptions (including 510(k) premarket notification and investigational device exemptions) authorized by the FDA and comparable foreign Governmental Authorities necessary to conduct its business and to research, develop, manufacture, process, produce, sell, market, distribute, transport, import and export its products ("FDA Permits").  The Company and the Subsidiaries has fulfilled all material obligations under each FDA Permit, and, to the Company's knowledge, no event has occurred that would reasonably be expected to constitute a violation or to cause revocation or termination of any such FDA Permit.  The Company or a Subsidiary, as applicable, is the sole and exclusive owner of the pending, cleared, and approved 510(k) premarket notifications, premarket approval applications, and investigational device exemption applications set forth on Section 3.15(f) of the Company Disclosure Schedule, each of which is valid and existing in full force and effect, and may be assigned to, transferred to, or assumed by Buyer in accordance with this Agreement.  To the Company's knowledge, neither the FDA nor any other comparable Governmental Authority has delivered written notice to the Company or the Subsidiaries that it is considering limiting, suspending or revoking any such FDA Permit or changing the regulatory classification or labeling of any of the Company Products and Services.

 

Section 3.16

Company Products and Services.

Section 3.17

Intellectual Property.

(b)            The Licensed Intellectual Property Rights and the Owned Intellectual Property Rights together constitute all the Intellectual Property Rights necessary for the conduct of the business of the Company and the Subsidiaries as currently conducted, and there exist no restrictions on the disclosure, use, license or transfer of the Owned Intellectual Property Rights except as set forth in any MATERIAL Contract.  The consummation of the transactions contemplated by this Agreement will not, after the Closing Date, encumber any Intellectual Property Right of the Company or any Subsidiary or any of their Affiliates after the Closing Date except as set forth in any MATERIAL Contract.

(c)            None of the Company, the Subsidiaries and the conduct of their respective businesses has infringed, misappropriated or otherwise violated any Intellectual Property Right of any third party.  There is no claim, action, suit, investigation or proceeding pending against, or, to the knowledge of the Company, threatened against or affecting, the Company or any of the Subsidiaries (i) challenging the ownership or validity of, or the rights of the Company or any Subsidiary in, any of the Owned Intellectual Property Rights, or the rights of the Company or any Subsidiary to use any Licensed Intellectual Property Rights, or (ii) alleging that the Company, any of the Subsidiaries or the conduct of their respective businesses has infringed, misappropriated or otherwise violated any Intellectual Property Right of any third party, and neither the Company nor any Subsidiary has received any written claim or notice of the forgoing in the three (3) year period prior to the date hereof.

(d)            None of the Owned Intellectual Property Rights material to the operation of the business of the Company and the Subsidiaries has been adjudged invalid or unenforceable in whole or part, and, to the knowledge of the Company, all such Owned Intellectual Property Rights are valid and enforceable.

(e)            The Company and the Subsidiaries are the sole and exclusive owners of all Owned Intellectual Property Rights and hold all their right, title and interest in and to the Owned Intellectual Property Rights free and clear of any Lien other than Permitted Liens.  The Company and the Subsidiaries have taken commercially reasonable actions to maintain and protect the Owned Intellectual Property Rights and their rights in the Licensed Intellectual Property Rights, including, where commercially reasonable, payment of applicable maintenance fees and filing of applicable statements of use.

(f)            To the knowledge of the Company, no Person has infringed, misappropriated or otherwise violated any Owned Intellectual Property Right.  The Company and the Subsidiaries have taken commercially reasonable steps to maintain the confidentiality of all Owned Intellectual Property Rights and Licensed Intellectual Property Rights, in each case to the extent the value of which is contingent upon maintaining the confidentiality thereof, and since January 1, 2009 no such Intellectual Property Rights that are material to the business or operation of the Company or any Subsidiary have been disclosed other than to employees, representatives and agents of the Company or any Subsidiary bound by written confidentiality agreements.

(g)            All Owned Software was (i) developed by employees of the Company or the Subsidiaries working within the scope of their employment, (ii) developed by Persons who have executed effective instruments of assignment in favor of the Company or the Subsidiaries with respect to all of such Persons' right, title and interest in and to such Software, or (iii) acquired pursuant to acquisitions in which the Company or the Subsidiaries obtained all right, title and interest in and to such Software.

(h)            Section 3.17(h) of the Company Disclosure Schedule accurately identifies and describes (i) each item of Open Source Software that is contained within, distributed with, or embedded in any Owned Software, and (ii) the Owned Software to which each such item of Open Source Software relates (including whether such Open Source Software has been modified by or for the Company or any of the Subsidiaries with respect to such applicable Owned Software).  No Owned Software contains, is derived from or is distributed with, any Open Source Software that is licensed under any terms that impose or could impose (A) a requirement or condition that such Owned Software or any part thereof (x) be disclosed or distributed in source code form, (y) be licensed for the purpose of making modifications or derivative works, or (z) be redistributable at no charge, or (B) any other significant limitation, restriction or condition on the right or ability of the Company and the Subsidiaries to use or distribute any Owned Software of similar effect (which shall not, for the avoidance of doubt, include any attribution requirements or pass-through license requirement).  Neither the Company nor any of the Subsidiaries is in material violation of the terms and conditions of any license pertaining to any Open Source Software.

(i)            Section 3.17(i) of the Company Disclosure schedule lists as of the date hereof each current or contingent right of any third party to obtain access to any source code included in the Owned Software.  No source code included in the Owned Software or, to the knowledge of the Company, the Licensed Intellectual Property Rights, has been released from escrow or otherwise been made available to any third party (other than directly by the Company or any of the Subsidiaries, subject to appropriate obligations of confidentiality, solely to the extent necessary for such third party to conduct, or provide materials or services for, development work or support for or on behalf of the Company or any of the Subsidiaries).

(j)            The IT Assets operate and perform in a manner that permits the Company and the Subsidiaries to conduct their respective businesses as currently conducted in all material respects.  To the knowledge of the Company, since January 1, 2009 no Person has gained unauthorized access to any of the IT Assets.  The Company and the Subsidiaries have implemented reasonable backup and disaster recovery technology consistent with industry practices.

 

Section 3.18

Insurance Coverage

Section 3.19

Licenses and Permits

Section 3.20

Receivables

Section 3.21

Finders' Fees

Section 3.22

Employees

Section 3.23

Labor Matters

Section 3.24

Employee Benefit Plans.

(b)            Each Employee Plan that is a U.S. Plan has been maintained in compliance in all material respects with its terms and all Applicable Laws, including ERISA and the Code. No action, suit, investigation, audit, proceeding or claim (other than routine claims for benefits) is pending against or involves or, to the Company's knowledge, is threatened against or threatened to involve, any Employee Plan before any court or arbitrator or any Governmental Authority, including the IRS and the Department of Labor which, individually or in the aggregate, if determined or resolved adversely in accordance with the plaintiff's demands, could reasonably be expected to be, individually or in the aggregate, material to the Company and the Subsidiaries, taken as a whole, or which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement.

(c)            Each Employee Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination or opinion letter from the IRS or has applied to the IRS for such a letter within the applicable remedial amendment period or such period has not expired, and no circumstances exist that would reasonably be expected to result in any such letter being revoked or not being reissued or a material penalty under the IRS Closing Agreement Program if discovered during an IRS audit or investigation. Each trust created under any such Employee Plan is exempt from tax under Section 501(a) of the Code and has been so exempt since its creation.

(d)            Neither the Company nor any of its Subsidiaries nor any of their respective ERISA Affiliates (nor any predecessor of any such entity) sponsors, maintains, administers or contributes to (or has any obligation to contribute to) or has in the past six years sponsored, maintained, administered or contributed to (or had any obligation to contribute to), or has any liability with respect to, any plan subject to Title IV of ERISA, including any "multiemployer plan" (as defined in Section 3(37) of ERISA). Neither the Company nor any of the Subsidiaries has any current or projected liability for, and no Employee Plan provides or promises, any post-employment or post-retirement medical, dental, disability, hospitalization, life or similar benefits (whether insured or self-insured) to any current or former Service Provider (other than coverage mandated by Applicable Law).  Each administrative or other service agreement between the Company or any of its Subsidiaries and any third-party service provider that relates to any Employee Plan may be cancelled without penalty on not more than 60 days' prior notice.

(e)            Each Option was granted with an exercise price that is not less than the fair market value of the Class 2 Share as of the grant date.  Neither the Company nor any of the Subsidiaries has any obligation to gross-up, indemnify or otherwise reimburse any current or former Service Provider for any tax incurred by such Service Provider, including under Section 409A or 4999 of the Code.  No Employee Plan, individually or collectively, would reasonably be expected to result in the payment of any amount that would not be deductible under Section 280G of the Code.  A portion of the payments and benefits that were provided to certain "disqualified persons" within the meaning of Section 280G of the Code in connection with the transactions contemplated by the Recapitalization Agreement, dated as of November 19, 2010, by and among the Company, Sponsor Holdings and the stockholders and optionholders of the Company, were approved pursuant to a shareholder vote in accordance with the requirements of Section 280G(b)(5)(B) of the Code (including without limitation the entity shareholder rules under Treasury Regulation Section 1.280G-1, Q&A-7(b)(3)) such that no "excess parachute payments" within the meaning of Section 280G of the Code were made to any current or former Service Providers in connection with the transactions contemplated by such agreement.

(f)            Except as otherwise expressly provided for under this Agreement, neither the execution of this Agreement nor the consummation of the transactions contemplated hereby (either alone or together with any other event) will (i) entitle any current or former Service Provider to any payment or benefit, including any bonus, retention, severance, retirement or job security payment or benefit, (ii) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, or increase the amount payable or trigger any other obligation under, any Employee Plan or (iii) limit or restrict the right of the Company or any of the Subsidiaries or, after the Closing, Buyer or any of its Affiliates, to merge, amend or terminate any Employee Plan.

(g)            Each International Plan (i) has been maintained in compliance in all material respects with its terms and Applicable Law, (ii) if intended to qualify for special tax treatment, meets all the requirements for such treatment, and (iii) if required, to any extent, to be funded, book-reserved or secured by an insurance policy, is so funded, book-reserved or secured by an insurance policy, as applicable, based on reasonable actuarial assumptions in accordance with applicable accounting principles or applicable legal requirements. From and after the Closing Date, the Company and its Subsidiaries will receive the full benefit of any funds, accruals and reserves under the International Plans.

 

Section 3.25

Environmental Matters

(a)            The Company and the Subsidiaries have obtained and possess all material Environmental Permits.

(b)            The Company and the Subsidiaries are in compliance in all material respects with all terms and conditions of such Environmental Permits and are also in compliance in all material respects with all other Environmental Laws and any written notice or demand letter issued, entered, promulgated or approved thereunder.

(c)            Neither the Company nor any of the Subsidiaries has received, within the three years prior to the date hereof, any written notice of violations or liabilities arising under Environmental Laws, including any investigatory, remedial or corrective obligation, relating to the Company, the Subsidiaries or their respective properties or facilities and arising under Environmental Laws, the subject of which is unresolved.

(d)            The Company has made available to Buyer all material environmental site assessments, environmental audit reports and written notices of environmental violations or environmental liabilities relating to the Company or any of the Subsidiaries, or any of their respective facilities, to the extent such documents are in the possession of the Company.

(e)            To the Company's knowledge, since January 1, 2009 there has been no discharge, disposal, dumping, injection, pumping, deposit, spill, leak, emission or release or threatened release ("Release") of any Hazardous Substances from, to, at, on or under any property or facility currently or formerly owned, leased or operated by the Company or any of the Subsidiaries which Release would reasonably be expected to result in a material liability to the Company or any of the Subsidiaries.

(f)            Neither the Company nor any of the Subsidiaries owns, leases or operates any real property or facility in New Jersey or Connecticut.

 

Section 3.26

Health Information

(b)            The Company is in compliance in all material respects with all contractual commitments of the Company relating to privacy and security of Protected Health Information (the "Privacy Commitments").

(c)            Neither the Company nor any Subsidiary has had any unauthorized use or disclosure of Protected Health Information since January 1, 2009 that would constitute (i) a successful "security incident" (as defined in 45 C.F.R. § 164.304), (ii) a "breach" (as defined in 45 C.F.R. § 164.402) that would require the Company or a Subsidiary, as the case may be, to provide notice under 16 C.F.R. § 164.404 or (iii) a breach under state data breach notification laws that require notification under those state data breach notification laws.

(d)            The Company and the Subsidiaries do not outsource any operation or give access to customer data to a third-party that is based outside of the United States.

(e)            Since January 1, 2009, the Company and the Subsidiaries have not received any written inquiry from the U.S. Department of Health and Human Services or any other Governmental Authority regarding the Company or any of the Subsidiaries alleging that the Company or a Subsidiary is not in compliance with Health Information Laws.  To the knowledge of the Company, no complaint has been filed with the U.S. Department of Health and Human Services or any other Governmental Authority regarding the Company's or the Subsidiaries' compliance with Health Information Laws.

 

Section 3.27

Foreign Corrupt Practices Act

Section 3.28

United States Healthcare Fraud and Abuse Law Compliance

(b)            Neither the Company nor the Subsidiaries, nor any of the Company's or Subsidiaries' officers, directors or managing employees or agents (as those terms are defined in 42 C.F.R. § 1001.1001) has engaged in any activity that is in violation of the federal Medicare or federal or state Medicaid statutes; Sections 1128, 1128A, 1128B, 1128C or 1877 of the Social Security Act (42 U.S.C. §§ 1320a-7, 1320a-7a, 1320a-7b, 1320a-7c and 1395nn); the federal TRICARE statute (10 U.S.C. § 1071 et seq.); the False Claims Act (31 U.S.C. § 3729 et seq.), the False Statements Accountability Act (18 U.S.C. § 1001); the Program Fraud Civil Remedies Act (31 U.S.C. § 3801 et seq.); 18 U.S.C. § 287; the anti-fraud and related provisions of the Health Insurance Portability and Accountability Act of 1996 (e.g., 18 U.S.C. §§ 1035 and 1347); or related regulations; or substantially similar state laws or regulations; including:

(i)	making or causing to be made a false statement or representation of a material fact in any application for any benefit or payment;

(ii)	making or causing to be made a false statement or representation of a material fact for use in determining rights to any benefit or payment;

(iii)

soliciting or receiving any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or kind (A) in return for referring an individual to a Person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part by any Federal Health Care Program, or (B) in return for purchasing, leasing, or ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service or item for which payment may be made in whole or in part by any Federal Health Care Program; or

(iv)

offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to any Person to induce such Person (A) to refer an individual to a Person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal Health Care Program, or (B) to purchase, lease, order or arrange for or recommend purchasing, leasing or ordering any good, facility, service or item for which payment may be made in whole or in part under a Federal Health Care Program.

(c)            To the Company's knowledge, no Person has filed or has threatened to file against the Company or any of the Subsidiaries a claim or action under any federal or state whistleblower statute, including the False Claims Act (31 U.S.C. § 3729 et seq.).

Section 3.29

Certain Third Party Rights

Section 3.30

Disclaimer

Section 4.01

Existence and Power

Section 4.02

Authorization

Section 4.03

Governmental Authorization

Section 4.04

Noncontravention

Section 4.05

Ownership of Shares

Section 4.06

Litigation

Section 4.07

Finders' Fees

Section 5.01

Corporate Existence and Power

Section 5.02

Corporate Authorization

Section 5.03

Governmental Authorization

Section 5.04

Noncontravention

Section 5.05

Financing

Section 5.06

Purchase for Investment

Section 5.07

Litigation

Section 5.08

Finders' Fees

Section 5.09

Due Diligence Review

Section 6.01

Conduct of the Company

(a)            amend its articles of incorporation, bylaws or other similar organizational documents (whether by merger, consolidation or otherwise);

(b)            split, combine or reclassify any shares of capital stock of the Company or any Subsidiary or declare, set aside or pay any non-cash dividend or other distribution in respect of the capital stock of the Company or any Subsidiary, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any Company Securities or any Subsidiary Securities;

(c)            (i) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any Company Securities or Subsidiary Securities, other than the issuance of any Subsidiary Securities to the Company or any other Subsidiary or upon the exercise of Options or (ii) amend any term of any Company Security or any Subsidiary Security (in each case, whether by merger, consolidation or otherwise);

(d)            incur any capital expenditures or any obligations or liabilities in respect thereof, except pursuant to the Company's and its Subsidiaries' budget for capital expenditures and not to exceed $100,000 individually or $250,000 in the aggregate;

(e)            acquire by merging or consolidating with, or by purchasing a substantial portion of the equity or assets of, any business or Person or division thereof (other than inventory) or otherwise acquire or license any assets or properties outside of the ordinary course of business;

(f)            sell, lease, sublease or otherwise transfer, or create or incur any Lien (other than Permitted Liens) on, any of the Company's or any Subsidiary's assets, securities, properties, interests or businesses, other than (i) pursuant to existing agreements set forth on Schedule 6.01(e) or (ii) any sale of Company Products and Services in the ordinary course of business consistent with past practice;

(g)            other than in connection with actions permitted by Section 6.01(d) or Section 6.01(e), make any loans, advances or capital contributions to, or investments in, any other Person, other than in accordance with contracts, entered into by the Company or the Subsidiaries in the ordinary course of business consistent with past practice;

(h)            create, incur, assume or guarantee any Indebtedness, except for (i) borrowing in an amount not to exceed $500,000, or (ii) under the Company's revolving credit facility existing on the date hereof solely to the extent necessary to fund capital expenditures in a manner consistent with the Company's and its Subsidiaries' budget for capital expenditures and ordinary working capital requirements;

(i)            (i) enter into any agreement that expressly restricts the freedom of the Company or any Subsidiary after the Closing Date to compete in any line of business or with any Person or in any geographic area or (ii) enter into, renew, extend, amend or modify in any material respect or terminate any agreement or Lease required to be disclosed by Section 3.11 or Section 3.14(b) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any of the Subsidiaries, in the case of this clause (ii), other than agreements for the provision of Company Products and Services in the ordinary course of business consistent with past practice;

(j)            except as required by Applicable Law or the terms of an Employee Plan as in effect on the date hereof, (i) other than pursuant to the Company's and its Subsidiaries' existing severance policies and practices as set forth in Section 3.23(a) of the Company Disclosure Schedule and in an amount not to exceed $100,000 in the aggregate for all terminated employees, grant any severance, retention or termination pay to, or enter into or amend any severance, retention, termination, employment, consulting, bonus, change in control or severance agreement with, any current or former Service Provider, (ii) increase the compensation or benefits provided to any current or former Service Provider, (iii) grant any equity or equity-based awards to, or discretionarily accelerate the vesting or payment of any such awards held by, any current or former Service Provider, (iv) establish, adopt, enter into or amend any Employee Plan or Collective Bargaining Agreement or (v) hire any employees other than new or replacement employees hired in the ordinary course of business and to the extent the compensation expense of the Company and its Subsidiaries would remain within the budgets of the Company and its Subsidiaries following the hiring of such employees;

(k)            (i) change the Company's methods of accounting, except as required by concurrent changes in GAAP, as agreed to by its independent public accountants or (ii) revalue any assets, including the writing off of notes or accounts receivable, except in the ordinary course of business consistent with prior practice;

(l)            settle, or offer or propose to settle, (i) any material litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any Subsidiary, (ii) any stockholder litigation or dispute against the Company or any of its officers or directors or (iii) any litigation, arbitration, proceeding or dispute that relates to the transactions contemplated hereby;

(m)            (i) make or change any material Tax election, (ii) change any annual Tax accounting period, (iii) adopt or change any method of Tax accounting, (iv) file any amended Tax Return, (v) enter into any closing agreement, (vi) settle any Tax claim or assessment, other than with respect to any state or local Tax audits where the net amount payable by the Company or any Subsidiary is less than $100,000 in the aggregate, (vii) surrender any right to claim a Tax refund, offset or other reduction in Tax liability or (viii) consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment;

(n)            sell, assign, license, sublicense, abandon, allow to lapse, transfer or otherwise dispose of, or create or incur any Lien on, any Owned Intellectual Property Rights or Licensed Intellectual Property Rights other than in the ordinary course of business consistent with past practice (i) pursuant to non-exclusive licenses or (ii) for the purpose of disposing of obsolete or worthless assets;

(o)            enter into any Related Party Agreements or make any payments to any Seller, Sponsor Holdings Owner or any of their Affiliates except as set forth in Section 6.01(o) of the Company Disclosure Schedule; or

(p)            agree, resolve or commit to do any of the foregoing.

 

Section 6.02

Access to Information; Confidentiality

(b)            As of the Closing and for a period of two years following the Closing, each Seller and each Sponsor Holdings Owner agrees that it will not, directly or indirectly, and shall use its commercially reasonable efforts to cause its partners, directors, members, officers, employees, agents or other representatives not to, (i) disclose any Confidential Information to any third party without the prior written consent of Buyer or (ii) use any Confidential Information for its own purposes or for any purposes other than those of the Buyer or the Company;  provided, that all obligations of Seller and Sponsor Holdings Owners under this Section 6.02(b) with respect to Confidential Information that constitutes a trade secret (as such term is defined under the Uniform Trade Secrets Act) shall survive until such information is no longer a trade secret.  Notwithstanding the previous sentence, the provisions of this paragraph will not apply to Confidential Information that (A) is or otherwise becomes generally known or publicly available through no act or omission of any Seller, Sponsor Holdings Owner or any Person or entity acting by or on behalf of such Seller or Sponsor Holdings Owner, (B) becomes available to such Seller or Sponsor Holdings Owner from a source other than Buyer, the Company or the Subsidiaries on a non-confidential basis; provided that the source of such Confidential Information was not known by such Seller or such Sponsor Holdings Owner to be bound by a confidentiality obligation with respect to such Confidential Information or (C) has been independently acquired or developed by such Seller or Sponsor Holdings Owner without using any Confidential Information or violating any of its obligations under this Agreement.   Notwithstanding the foregoing, each Seller and each Sponsor Holdings Owner shall be permitted to make disclosures concerning the Company and its Subsidiaries (1) of financial information customarily disclosed to its limited partners, investors or regulators, solely to the extent disclosed in confidence pursuant to customary confidentiality agreements and in no greater detail than historically provided by such Seller or Sponsor Holdings Owner to limited partners, investors or regulators, (2) in connection with any Tax Returns filed by such Seller, Sponsor Holdings Owner and its Affiliates, solely to the extent required to adequately complete such Tax Returns and (3) for the limited purpose of pursuing or defending indemnification claims (or the matters underlying such indemnification claims) or in connection with any dispute between Buyer, on the one hand, any Seller or Sponsor Holdings Owner, on the other hand.  The obligation of each Seller and each Sponsor Holdings Owner to hold any such information in confidence shall be satisfied if they exercise the same care with respect to such information as they would take to preserve the confidentiality of their own similar confidential information.  In the event that any Seller of Sponsor Holdings Owner is requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoenas, civil investigative demand or similar process, or by law, regulation or judicial or other governmental order) to disclose any Confidential Information during the two years following the Closing, such Person will (unless prohibited by law, regulation or judicial or other governmental order) give Buyer prompt written notice of such request or requirement so that Buyer may, at Buyer's expense, seek an appropriate protective order or other remedy and/or waive compliance with the provisions of this Agreement, and each such Person will, at Buyer's expense, take such actions as Buyer may reasonably request to cooperate with Buyer to obtain such protective order.  In the event that such protective order or other remedy is not obtained or Buyer waives compliance with the relevant provisions of this Agreement, such Person will furnish only that portion of the Confidential Information which is legally required to be disclosed.  "Confidential Information" means (i) proprietary or confidential information belonging to the Company or the Subsidiaries, (ii) any data or information belonging to the Company or the Subsidiaries with respect to the conduct of the business of the Company or the Subsidiaries that is commercially valuable to the Company or the Subsidiaries or (iii) any of the Company's or the Subsidiaries' trade secrets.

(c)            The parties hereto agree to keep the terms of the Transaction Documents confidential except (i) to the extent that Buyer determines that disclosure of the Transaction Documents or the terms thereof are required by Applicable Law, the rules, regulations or guidance of any securities exchange, or for financial, securities exchange or other public reporting purposes (it being understood that Buyer intends to publicly disclose this Agreement), (ii) pursuant to inquiries or requests from Governmental Authorities, and (iii) for disclosure of such terms to each party's respective employees, accountants, advisors and other representatives as necessary in connection with the ordinary conduct of their respective businesses; provided that with respect to disclosure to accountants, advisors and other representatives, so long as such Persons agree to keep the terms of this Agreement confidential.

 

Section 6.03

Notices of Certain Events

(a)            any notice or other communication from any Person alleging that the consent of such Person is required in connection with the transactions contemplated by this Agreement;

(b)            any written notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement;

(c)            any actions, suits, claims, investigations or proceedings commenced or, to its knowledge threatened against such Seller or the Company or any Subsidiary that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to Section 3.12 or that relate to the consummation of the transactions contemplated by this Agreement; and

(d)            any inaccuracy of any representation or warranty, or any failure of any Seller to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it, contained in this Agreement at any time during the term hereof, in each case, that would reasonably be expected to cause the conditions set forth in Section 11.02(b) or Section 11.02(c) not to be satisfied; provided, however, that the delivery of any notice pursuant to this Section 6.03 shall not limit or otherwise affect the remedies available hereunder to the party receiving that notice.

 

Section 6.04

Resignations

Section 6.05

Deposit Account Control Agreements; Physical Collateral

Section 6.06

Trademarks/Tradenames

Section 7.01

Confidentiality

Section 7.02

Access

Section 7.03

Directors and Officers Indemnification

(b)            At or prior to the Closing, the Company shall obtain, maintain and fully pay for irrevocable "tail" insurance policies naming the current and former officers and directors of the Company and the Subsidiaries (collectively, the "D&O Indemnitees") as direct beneficiaries with a claims period of at least six years from the Closing Date from an insurance carrier with the same or better credit rating as the Company's current insurance carrier with respect to directors' liability insurance in an amount and scope at least as favorable as the Company's existing policies with respect to matters existing or occurring at or prior to the Closing Date.  Buyer shall not, and shall cause the Company to not, cancel or change such insurance policies in any respect.

 

Section 7.04

Notices of Certain Events

(a)            any notice or other communication from any Person alleging that the consent of such Person is required in connection with the transactions contemplated by this Agreement;

(b)            any written notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement;

(c)            any actions, suits, claims, investigations or proceedings commenced or, to its knowledge threatened against Buyer that, if pending on the date of this Agreement would have been required to have been disclosed pursuant to Section 5.07 or that relate to the consummation of the transactions contemplated by this Agreement; and

(d)            any inaccuracy of any representation or warranty, or any failure of Buyer to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it, contained in this Agreement at any time during the term hereof, in each case would that reasonably be expected to cause the conditions set forth in Section 11.01(b) or Section 11.01(c) not to be satisfied; provided, however, that the delivery of any notice pursuant to this Section 7.04 shall not limit or otherwise affect the remedies available hereunder to the party receiving that notice.

Section 8.01

Reasonable Best Efforts; Further Assurances

Section 8.02

Regulatory Approval

(a)            In furtherance and not in limitation of the foregoing, each of Buyer and each Seller (and, to the extent necessary, each Sponsor Holdings Owner) shall make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated hereby as promptly as practicable and in any event within five Business Days of the date hereof and to supply as promptly as practicable any additional information and documentary material that may be requested pursuant to the HSR Act  and (ii) subject to the proviso in Section 8.01 to take all other actions necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as practicable, including by requesting early termination of the initial waiting period under the HSR Act.  Each of Buyer and the Company shall pay one half of the HSR filing fee.

(b)            In connection with the efforts referenced in Section 8.01 and this Section 8.02 to obtain all requisite approvals and authorizations for the transactions contemplated by this Agreement under the HSR Act, the Company and Buyer shall use reasonable best efforts to (i) cooperate with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party; (ii) keep the other party informed in all material respects of any material communication received by such party from, or given by such party to, any Governmental Authority and of any material communication received or given in connection with any proceeding by a private party, in each case, regarding any of the transactions contemplated hereby; and (iii) to the extent permitted by law, permit the other party to review any material communication given to it by, and consult with each other in advance of any meeting or conference with, any Governmental Authority, including in connection with any proceeding by a private party.  The foregoing obligations in this Section 8.02(b) shall be subject to the Confidentiality Agreement and any attorney-client, work product or other privilege.

 

Section 8.03

Certain Filings

Section 8.04

Public Announcements

Section 8.05

Intercompany Accounts

Section 8.06

Related Party Agreements

Section 8.07

Actions by Sponsor Holdings Owners

Section 9.01

Tax Representations

(a)            Filing and Payment.  (i) All Company Returns have been filed when due in accordance with all applicable laws; (ii) all Company Returns that have been filed were true and complete in all material respects; and (iii) all Taxes shown as due and payable on any Company Return have been timely paid, or withheld and remitted, to the appropriate Taxing Authority.

(b)            Procedure and Compliance.  (i)  All Company Returns filed through the Tax year ended May 31, 2007 have been examined and closed or are Company Returns with respect to which the applicable period for assessment under applicable law, after giving effect to extensions or waivers, has expired; (ii) neither the Company nor any of the Subsidiaries (or any member of any affiliated, consolidated, combined or unitary group of which the Company or any of the Subsidiaries is or has been a member) has granted any extension or waiver of the statute of limitations period applicable to any Company Return, which period (after giving effect to such extension or waiver) has not yet expired; (iii) there is no claim, audit, action, suit, proceeding or investigation now pending or threatened in writing against or with respect to the Company or any of the Subsidiaries in respect of any Tax or Tax Asset; and (iv) there are no requests for rulings or determinations in respect of any Tax or Tax Asset pending between the Company or any of the Subsidiaries and any Taxing Authority.

(c)            Taxing Jurisdictions.  No claim has ever been made in writing to the Company or any of its Subsidiaries by a Taxing Authority in a jurisdiction in which neither the Company nor any Subsidiary files Tax Returns that the Company or any Subsidiary is required to file a Tax Return in such jurisdiction.

(d)            Tax Sharing, Consolidation and Similar Arrangements.  (i) Neither the Company nor any of the Subsidiaries has been a member of an affiliated, consolidated, combined or unitary group other than one of which the Company was the common parent; (ii) neither the Company nor any of the Subsidiaries is party to any Tax Sharing Agreement; (iii) no amount of the type described in clause (ii) or (iii) of the definition of "Tax" is currently payable by the Company or any of the Subsidiaries, regardless of whether such Tax is imposed on the Company or any of the Subsidiaries; and (iv) neither the Company nor any of the Subsidiaries has entered into any agreement or arrangement with any Taxing Authority with regard to the Tax liability of the Company or any of the Subsidiaries affecting any Tax period for which the applicable statute of limitations, after giving effect to extensions or waivers, has not expired.

(e)            Certain Agreements and Arrangements.  (i) Neither the Company nor any of the Subsidiaries is a party to any understanding or arrangement described in Section 6662(d)(2)(C)(ii) of the Code, or has participated in a "reportable transaction" within the meaning of Treasury Regulations Section 1.6011-4; and (ii) during the two-year period ending on the date hereof, neither the Company nor any of the Subsidiaries was a distributing corporation or a controlled corporation in a transaction intended to be governed by Section 355 of the Code.

(f)            Post-Closing Items.  Neither the Company nor any of the Subsidiaries will be required to include any adjustment in taxable income for any Post‑Closing Tax Period under Section 481(c) of the Code (or any similar provision of the Tax laws of any jurisdiction) as a result of a change in method of accounting for a Pre‑Closing Tax Period; and neither the Company nor any of the Subsidiaries will be required to include for a Post-Closing Tax Period taxable income attributable to any (i) "long-term contract" as described in Code Section 460; (ii) installment sale made prior to the Closing Date; (iii) prepaid amount received on or prior to the Closing Date; or (iv) election under Code Section 108(i).

(g)            Entity Classification.  Section 9.01(g) of the Company Disclosure Schedule sets forth the entity classification of any Subsidiary for which entity classification filings have been made under Treasury Regulations section ###-###-####-3, as of the date hereof and as of the Closing Date.

(h)            International Boycott Compliance.  Neither the Company nor any Subsidiary (i) has participated in or cooperated with an "international boycott" within the meaning of Section 999 of the Code or has been requested to do so in connection with any transaction or proposed transaction, (ii) has operations in, or related to, a country described in Section 999(a)(1) of the Code or (iii) has taken any other action for which IRS Form 5713 would be required to be filed with the U.S. Internal Revenue Service.

(i)            The fair market value of the Shares is not substantially derived from assets located, or treated as located, in India (as determined for Indian tax purposes) (including shares in Sunquest Information Systems (India) Private Limited) and the assets of the Company and the Subsidiaries located, or treated as located, in India (including shares in Sunquest Information Systems (India) Private Limited) contribute less than 20% to the overall fair market value of the Shares.

 

Section 9.02

Tax Returns

Section 9.03

Transfer Taxes

Section 9.04

Tax Benefits and Refunds

Section 9.05

Tax Indemnification.

(b)            For purposes of the determination amount of any Covered Tax in respect of a Straddle Tax Period, (x) in the case of any Taxes other than gross receipts, sales or use Taxes and Taxes based upon or related to income, gain or gross proceeds, the definition of Covered Tax shall be deemed to include the amount of such Tax for the entire Tax period multiplied by a fraction the numerator of which is the number of days in the Tax period ending on and including the Closing Date and the denominator of which is the number of days in the entire Tax period, and (y) in the case of any Tax based upon or related to income and any gross receipts, sales or use Tax, the definition of Covered Tax shall be deemed to include the amount that would be payable if the relevant Tax period ended on and included the Closing Date.  All determinations necessary to give effect to the allocation set forth in the foregoing clause (y) shall be made in a manner consistent with prior practice of the Company and the Subsidiaries.

(c)            Buyer agrees to give prompt notice to Sellers' Representative of any Tax Loss or the assertion of any claim, or the commencement of any suit, action or proceeding in respect of which indemnity may be sought hereunder that Buyer deems to be within the ambit of this Section 9.05 (specifying with reasonable particularity the basis therefor) and will give Sellers' Representative such information with respect thereto as Sellers' Representative may reasonably request.  Sellers' Representative may, at its own expense, (i) participate in and (ii) with respect to any suits, actions or proceedings (including Tax audits) that relate solely to Pre-Closing Tax Periods or relate to any Tax described in clause (C) of the definition of "Covered Tax", assume the defense of any such suit, action or proceeding (including any Tax audit); provided that (x) Sellers' Representative shall thereafter consult with Buyer upon Buyer's reasonable request for such consultation from time to time with respect to such suit, action or proceeding (including any Tax audit) and (y) Sellers' Representative shall not, without Buyer's consent, which consent shall not be unreasonably withheld or delayed, agree to any settlement with respect to any Tax if such settlement could adversely affect the Tax liability of Buyer or any of its Affiliates (other than the Company and the Subsidiaries with respect to Pre-Closing Tax Periods).  Buyer shall have the right (but not the duty) to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by Sellers' Representative.  Buyer shall not settle any suit, action or proceeding in respect of which indemnity may be sought hereunder without the consent of Sellers' Representative, which consent shall not be unreasonably withheld or delayed.  Whether or not Sellers' Representative chooses to defend or prosecute any claim, all of the parties hereto shall cooperate in the defense or prosecution thereof.  Subject to the limitations set forth in Section 9.05(a), any Tax Loss that results from the resolution of any such suit, action or proceeding for which the Seller Indemnifying Parties are liable pursuant to Section 9.05(a) shall be paid to Buyer in the manner set forth in Section 12.02(c).

(d)            Notwithstanding anything in Section 9.05(c), Sellers Representative shall not be entitled to assume control of the defense of any suit, action or proceeding (including any Tax audit) pursuant to Section 9.05(c) unless (i) prior to assuming control of the defense of such suit, action, proceeding, the Sellers' Representative acknowledges that the Sellers would have an indemnity obligation for Tax Losses resulting from such suit, action or proceeding pursuant to Section 9.05(a) (pursuant to the terms and limitations of this Article 9 and Article 12) and (ii) if such suit, action or proceeding were resolved against the Buyer Indemnified Party, the Cap (if applicable) would not limit the indemnification obligation for Tax Losses resulting from such suit, action or proceeding to 50% or less of such Tax Losses.

(e)            The Seller Indemnifying Parties shall not be liable under this Section 9.05 with respect to any Tax resulting from a claim or demand the defense of which Sellers' Representative was not offered the opportunity to assume as provided under Section 9.05(c) (subject to the limitations in Section 9.05(d)) to the extent the Seller Indemnifying Parties' liability under this Section is adversely affected as a result thereof.  No investigation by Buyer or any of its Affiliates at or prior to the Closing Date shall relieve Sellers of any liability hereunder.

(f)            Any claim of any Buyer Indemnified Party under this Section may be made and enforced by Buyer on behalf of such Buyer Indemnified Party.

 

Section 9.06

Certain Disputes

Section 9.07

Purchase Price Adjustment

Section 9.08

Other Tax Matters

(a)            No party hereto nor any Affiliate thereof shall make an election under Section 338 of the Code or any similar provision of foreign, state or local law in respect of the transactions contemplated by this Agreement.

(b)            Buyer shall not take any action or cause any action to be taken with respect to the Company or any of its Subsidiaries subsequent to the Closing that would cause the transactions contemplated hereby to constitute part of a transaction that is the same as, or substantially similar to, the "Intermediary Transaction Tax Shelter" described in IRS Notice 2001-16, 2001-1 C.B. 730, and IRS Notice 2008-20 I.R.B. 2008-6 (January 17, 2008), and IRS Notice 2008-111 I.R.B. 1299 (December 1, 2008).

(c)            To the extent any such action could reasonably be expected to result in a claim against any Seller Indemnifying Party for indemnity pursuant to this Article 9, or otherwise adversely affect any Seller, Seller Indemnifying Party or their respective Affiliates, Buyer and its Affiliates (including on or after the Closing Date, the Company and its Subsidiaries) shall not file, or cause to be filed, any restatement or amendment of, modification to, or claim for refund relating to, any Company Return for any taxable period that begins prior to the Closing Date (regardless of whether such taxable period ends prior to the Closing Date) without the prior written consent of Sellers' Representative, which consent shall not be unreasonably withheld, delayed or conditioned.

 

Section 10.01

Shareholder Approval of Excess Parachute Payments

(a)            obtain a binding written waiver by such Service Provider of any such portion of such parachute payment as exceeds 2.99 times such Service Provider's "base amount" within the meaning of Section 280G(b)(3) of the Code (collectively, the "Excess Parachute Payments") to the extent that such excess is not subsequently approved pursuant to a vote of the holders of the Shares (the "Shareholders") in accordance with the requirements of Section 280G(b)(5)(B) of the Code (the "280G Shareholder Approval Requirements");

(b)            provide Buyer a reasonable opportunity to review and comment on any disclosure provided to Shareholders in connection with the 280G Shareholder Approval Requirements before it is distributed to the Shareholders; and

(c)            hold a Shareholder vote in a manner that satisfies the 280G Shareholder Approval Requirements.

 

Section 10.02

Termination of 401(k) Plan

Section 10.03

Notifications of Intent to Resign

Section 11.01

Conditions to Obligations of Buyer and Sellers

(a)            Any applicable waiting period under the HSR Act relating to the transactions contemplated hereby shall have expired or been terminated.

(b)            No provision of any Applicable Law shall prohibit the consummation of the Closing.

(c)            Each of Buyer, Sellers' Representative and the Escrow Agent shall have executed the Escrow Agreement, and such agreement shall be in full force and effect.

 

Section 11.02

Conditions to Obligation of Buyer

(a)            Sellers and the Company shall have performed in all material respects all of their covenants and agreements hereunder required to be performed by them on or prior to the Closing Date.

(b)            The representations and warranties of Sellers and the Company contained in Sections 3.01 (Corporate Existence and Power), 3.02 (Corporate Authorization), 3.05 (Capitalization), 3.20 (Finders' Fees) 4.01 (Corporate Existence and Power), 4.02 (Authorization) 4.04 (Ownership of Shares) and 4.07 (Finders' Fees) (collectively, the "Seller/Company Fundamental Representations") shall be true at and as of the Closing Date as if made at and as of such date except for inaccuracies in the Seller/Company Fundamental Representations (other than the representations and warranties set forth in Sections 3.05 (Capitalization) 4.04 (Ownership of Shares)) that have a de minimis effect.

(c)            The representations and warranties of Sellers and the Company set forth in Article 3, Article 4 and Article 9 that are not Seller/Company Fundamental Representations shall be true at and as of the Closing Date as if made at and as of such date (disregarding all materiality and Material Adverse Effect qualifications therein) (except that such representations and warranties that are made as of a specific date need only be true and correct as of such date) with only such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(d)            Buyer shall have received a certificate signed by the chief executive officer of the Company certifying as to the Company's satisfaction of the conditions set forth in Section 11.02(a), 11.02(b) and 11.02(c).

(e)            The Key Employee Arrangements with the Select Key Employees shall be in full force and effect and, subject to the exceptions set forth on Exhibit C, the Select Key Employees that are party thereto shall not have revoked their acceptance of employment with Buyer or its Affiliates following the Closing or otherwise communicated to Buyer or its Affiliates their intention not to commence and continue employment with Buyer or its Affiliates as of and following the Closing.

(f)            The Non-Solicitation Agreements shall be in full force and effect.

(g)            The Non-Compete Agreements shall be in full force and effect.

(h)            To the extent that any Service Provider would be entitled to any payment or benefit in connection with the transactions contemplated by this Agreement that could constitute a "parachute payment" under Section 280G of the Code, the Company shall have (i) obtained from each such Service Provider the waiver described in Section 10.01(a) and (ii) performed the covenants set forth in Section 10.01(a) and Section 10.01(b).

(i)            The Company shall have obtained payoff and termination letters, and Lien releases (in each case, in a form reasonably satisfactory to Buyer) from all holders of Closing Repaid Indebtedness.

(j)            Sellers' Representative shall have delivered to Buyer (i) a certification for the Company, signed under penalties of perjury by the Company and dated not more than 30 days prior to the Closing Date, that satisfies the requirements of Treasury Regulation Sections 1.897-2(h) and 1.1445-2(c)(3) and confirms that the Company is not, nor has it been within 5 years of the date of the certification, a "United States real property holding corporation" as defined in Section 897 of the Code and (ii) a notice to the Internal Revenue Service, signed by the Company, that satisfies the requirements of Treasury Regulation Section 1.897-2(h)(2).

 

Section 11.03

Conditions to Obligation of Sellers

(a)            Buyer shall have performed in all material respects all of its covenants and agreements hereunder required to be performed by it on or prior to the Closing Date.

(b)            The representations and warranties of Buyer contained in Section 5.01 (Corporate Existence and Power), Section 5.02 (Corporate Authorization) and Section 5.08 (Finders' Fees) (collectively, the "Buyer Fundamental Representations") shall be true at and as of the Closing Date as if made at and as of such date except for inaccuracies in the Buyer Fundamental Representations that have a de minimis effect.

(c)            The representations and warranties of Buyer set forth in Article 5 that are not Buyer Fundamental Representations shall be true at and as of the Closing Date as if made at and as of such date (disregarding all materiality and Material Adverse Effect qualifications therein) (except that such representations and warranties that are made as of a specific date need only be true and correct as of such date) with only such exceptions as would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of Buyer to consummate the transactions contemplated hereby.

(d)            Sellers' Representative shall have received a certificate signed by an executive officer of Buyer certifying as to Buyer's satisfaction of the conditions set forth in Section 11.03(a), Section 11.03(b) and Section 11.03(c).

 

Section 12.01

Survival

Section 12.02

Indemnification

(i)

any misrepresentation or breach of warranty by the Company set forth in Article 3 (determined without regard to any qualification or exception contained therein relating to materiality or Material Adverse Effect or any similar qualification other than such qualifications that are in ALL CAPS) (each such misrepresentation and breach of warranty, a "Company Warranty Breach");

(ii)

any breach of covenant or agreement made or to be performed by the Company pursuant to this Agreement (other than, in the case of (i) and (ii), a representation, warranty, covenant or agreement made or to be performed pursuant to Article 9 with respect to which Buyer and its Affiliates are entitled to indemnification under Article 9);

(iii)

any Transaction Expenses not included in the Estimated Transaction Expenses;

(iv)	any Indebtedness to the extent not repaid prior to Closing or at Closing pursuant to Section 2.02(a)(iv); and

(v)	the matters described in Section 12.01 of the Company Disclosure Schedule.

(b)            In addition, from and after the Closing, each of the Seller Indemnifying Parties, severally and not jointly, shall indemnify the Buyer Indemnified Parties in respect of any Damages which the Buyer Indemnified Parties actually suffer or incur arising out of: (i) the breach of any representation or warranty of such Seller Indemnifying Party in its capacity as Seller (and only such Seller Indemnifying Party) contained in Article 4 hereof (determined without regard to any qualification or exception contained therein relating to materiality or Material Adverse Effect or any similar qualification other than such qualifications that are in ALL CAPS) (a "Seller Warranty Breach"); (ii) the breach by such Seller Indemnifying Party in its capacity as Seller (and only such Seller Indemnifying Party) of any covenant or agreement of such Seller contained in this Agreement; provided that for purposes of this Article 12, any breach of any representation, warranty, covenant or agreement of or by Sponsor Holdings shall be the responsibility of the Sponsor Holdings Owners, who shall indemnify Buyer Indemnified Parties for any Damages subject to indemnification hereunder arising out of such breach proportionally in accordance with their respective shareholdings in Sponsor Holdings as of the Closing (and, for the avoidance of doubt, the Huntsman Gay Entities shall be jointly and severally liable among themselves for the indemnification obligations each Huntsman Gay Entity in its capacity as a Sponsor Holdings Owner).

(c)            Subject to the limitations and other provisions contained in this Article 12 and Article 9, with respect to any Damages or Tax Losses the Buyer Indemnified Parties are indemnified against, and held harmless from, pursuant to this Agreement, including pursuant to Section 12.02(a), Section 12.02(b) and Section 9.05:

(i)

the Buyer Indemnified Parties shall, subject to the terms set of this Article 12 and Article 9, recover all Damages or Tax Losses for which the Buyer Indemnified Parties are entitled to indemnification and reimbursement under this Agreement from, and shall be entitled to receive disbursement from, the Escrow Account regardless of whom as between the Company, the various Sellers or the Sponsor Holdings Owners are responsible for such underlying Damages and Tax Losses and regardless of any Seller's or any Sponsor Holdings Owner's actual share of or pecuniary interest in the Escrow Account, and regardless of whether such Damages or Tax Losses arise out of a Company Warranty Breach, a Seller Warranty Breach by or of any Seller, a breach of covenant or agreement of the Company or any Seller or Seller Indemnified Party under this Agreement or otherwise, until all amounts in the Escrow Account have been exhausted; and

(ii)

to the extent the funds (less any amounts that are the subject of then-existing and unsatisfied claims for Damages or Tax Losses) then available in the Escrow Account are insufficient to fully indemnify and hold harmless the Buyer Indemnified Parties (A) for Damages and Tax Losses indemnified against pursuant to Section 12.02(a) or Section 9.05, then with respect to such Damages and Tax Losses all the Seller Indemnifying Parties shall, severally and not jointly, and in accordance with each Seller Indemnifying Party's Pro Rata Share, directly indemnify and hold harmless the Buyer Indemnified Parties for such Damages and Tax Losses and (B) for Damages indemnified against pursuant to Section 12.02(b), then with respect to such Damages and Tax Losses the Seller Indemnifying Party that breached the applicable representations and warranties or covenants (and not any non-breaching Seller Indemnified Party) shall severally and not jointly directly indemnify and hold harmless the Buyer Indemnified Parties for such Damages and Tax Losses; provided that for purposes of this Section 12.02(c)(ii), any breach of any representation, warranty, covenant or agreement of or by Sponsor Holdings shall be the responsibility of the Sponsor Holdings Owners, who shall indemnify Buyer Indemnified Parties for any Damages subject to indemnification hereunder arising out of such breach proportionally in accordance with their respective shareholdings in Sponsor Holdings as of the Closing (and, for the avoidance of doubt, the Huntsman Gay Entities shall be jointly and severally liable among themselves for the indemnification obligations of each Huntsman Gay Entity in its capacity as a Sponsor Holdings Owner); provided, further, that the indemnity obligations of any of the Credit Suisse Entities pursuant to this Section 12.02(c)(ii) shall, regardless of any Credit Suisse Entity's actual share of or pecuniary interest in the Credit Suisse Escrow Account or which of the Credit Suisse Entities was responsible for the breach of any representation, warranty, covenant or agreement underlying such indemnity obligations, first be satisfied by disbursements from the Credit Suisse Supplemental Escrow Account in accordance with the Escrow Agreement, which account shall only be available to satisfy indemnity and reimbursement obligations of the Credit Suisse Entities under this Agreement as described in this proviso and shall not be available or used to satisfy any indemnity or reimbursement obligations of any other Seller Indemnifying Party; provided, further, that the indemnity obligations of any of the Neuberger Entities pursuant to this Section 12.02(c)(ii) shall, regardless of any Neuberger Entity's actual share of or pecuniary interest in the Neuberger Escrow Account or which of the Neuberger Entities was responsible for the breach of any representation, warranty, covenant or agreement underlying such indemnity obligations, first be satisfied by disbursements from the Neuberger Supplemental Escrow Account in accordance with the Escrow Agreement, which account shall only be available to satisfy indemnity and reimbursement obligations of the Neuberger Entities under this Agreement as described in this proviso and shall not be available or used to satisfy any indemnity or reimbursement obligations of any other Seller Indemnifying Party.

(d)            Notwithstanding the foregoing, with respect to Damages arising out of Seller Warranty Breaches and Company Warranty Breaches (other than Damages arising out of Seller/Company Fundamental Representations or the 280G Representations, which shall not be subject to the limitations set forth in this Section 12.02(d)), (i) the Buyer Indemnified Partners shall not be entitled to recover such Damages unless the aggregate amount of such Damages exceeds $7,000,000 and then only to the extent of such excess (the "Deductible") and (ii) the Seller Indemnifying Parties' aggregate liability (calculated after the Deductible) for Damages and Tax Losses shall not exceed, in the aggregate, $50,000,000 (including, for the purpose of calculating the $50,000,000, the Escrow Amount) (the "Cap").  Notwithstanding anything to the contrary set forth herein, the aggregate liability in excess of the Escrow Amount of each Seller Indemnifying Party in satisfaction of claims for indemnification pursuant to this Agreement which are not subject to the Cap shall not exceed the proceeds actually received by such Person or Persons pursuant to Section 2.02 (it being acknowledged that such proceeds received by all members of the Huntsman Gay Entities or the Vista Entities, respectively, shall be aggregated for the purposes of determining the proceeds actually received by any member of such Huntsman Gay Entities or the Vista Entities, respectively).  Nothing contained in this Section 12.02(d) shall limit or restrict any right to maintain or recover any amounts in connection with any action or claim based upon fraud.

(e)            Subject to the other limitations in this Article 12, effective at and after the Closing, Buyer shall indemnify Sellers, Optionholders, any of their Affiliates and their respective successors and assigns (the "Seller Indemnitees") against and agrees to hold each of them harmless from any and all Damages incurred or suffered by Seller Indemnitees arising out of:

(i)

any misrepresentation or breach of warranty by Buyer set forth in Article 5 (determined without regard to any qualification or exception contained therein relating to materiality or Material Adverse Effect or any similar qualification) (each such misrepresentation and breach of warranty, a "Buyer Warranty Breach"); and

(ii)	any breach of covenant or agreement made or to be performed by Buyer pursuant to this Agreement.

(f)            Notwithstanding the foregoing, with respect to Damages arising out of Buyer Warranty Breaches (other than Damages arising out of Buyer Fundamental Representations, which shall not be subject to the limitations set forth in this Section 12.02(f)), (i) Buyer shall not be liable unless the aggregate amount of such Damages exceeds the Deductible and then shall be liable only to the extent of such excess and (ii) Buyer's aggregate liability (calculated after the Deductible) for such Damages shall not exceed $50,000,000; provided that nothing contained in this Section 12.02(f) shall limit or restrict any right to maintain or recover any amounts in connection with any action or claim based upon fraud.

 

Section 12.03

Third Party Claim Procedures

(b)            The Indemnifying Party shall be entitled to participate in the defense of any Third Party Claim and, subject to the limitations set forth in this Section, shall be entitled to control and appoint lead counsel for such defense, in each case at its own expense; provided that prior to assuming control of such defense, the Indemnifying Party must acknowledge that it would have an indemnity obligation for the Damages resulting from such Third Party Claim pursuant to the terms and limitations set forth in this Article 12 and if such Third Party Claim were successful, the Cap (if applicable) would not limit indemnification for the Damages resulting therefrom to 50% or less of such claimed Damages.

(c)            The Indemnifying Party shall not be entitled to assume or maintain control of the defense of any Third Party Claim if (i) the Indemnifying Party does not deliver the acknowledgment referred to in Section 12.03(b) within 30 days of receipt of notice of the Third Party Claim pursuant to Section 12.03(a), (ii)  the Third Party Claim relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation, (iii) the Third Party Claim seeks an injunction or equitable relief against the Indemnified Party or any of its Affiliates or (iv) the Indemnifying Party has failed or is failing to prosecute or defend vigorously the Third Party Claim.

(d)            If the Indemnifying Party shall assume the control of the defense of any Third Party Claim in accordance with the provisions of this Section 12.03, the Indemnifying Party shall obtain the prior written consent of the Indemnified Party (which shall not be unreasonably withheld) before entering into any settlement of such Third Party Claim, if the settlement does not expressly and unconditionally release the Indemnified Party and its Affiliates from all liabilities and obligations with respect to such Third Party Claim or if the settlement imposes injunctive or other equitable relief against the Indemnified Party or any of its Affiliates.

(e)            In circumstances where the Indemnifying Party is controlling the defense of a Third Party Claim in accordance with paragraphs (b) and (c) above, the Indemnified Party shall be entitled to participate in the defense of any Third Party Claim and to employ separate counsel of its choice for such purpose.

(f)            Each party shall reasonably cooperate, and cause their respective Affiliates to reasonably cooperate, in the defense or prosecution of any Third Party Claim.  The Indemnified Party shall not be entitled to settle or compromise any Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed).

(g)            For all purposes under this Section 12.03, Sellers' Representative shall act on behalf of any Indemnifying Party that is a Seller or its respective successors and assigns and Buyer shall be entitled to provide notices to Sellers' Representative in lieu of such Indemnifying Party.

 

Section 12.04

Direct Claim Procedures

(b)            For all purposes under this Section 12.04, Sellers' Representative shall act on behalf of any Indemnifying Party that is a Seller, an Affiliate of Seller or their respective successors and assigns and Buyer shall be entitled to provide notices to Sellers' Representative in lieu of such Indemnifying Party.

 

Section 12.05

Determination of Damages Amount

(a)            The amount of any Damages subject to indemnification under Section 12.02 or Section 9.05 shall be calculated net of any Tax Benefit actually realized in the taxable period in which the applicable Damages were incurred by any Indemnified Party arising from the creditability or deductibility of any such Damages and, with respect to any Buyer Indemnified Party, or any amounts actually recovered by the Company or any of the Subsidiaries or any such Buyer Indemnified Party under or pursuant to any insurance policy, indemnity, reimbursement arrangement or contract (including with respect to any breaches thereof), pursuant to which or under which such Person is a party or has rights, in each case less any reasonable costs and expenses incurred by the Company or any of the Subsidiaries in recovering such amounts,  (collectively, "Alternative Arrangements").  In the event of any breach or event giving rise to an indemnification obligation under Section 12.02 or Section 9.05, the Indemnified Party shall take, and shall cause its respective Affiliates to take, all reasonable measures to mitigate the consequences of the related breach (including taking reasonable steps to prevent any contingent Damage from becoming an actual Damage).  The Indemnified Parties shall use commercially reasonable efforts to seek recovery under all Alternative Arrangements.  If an Indemnified Party receives any payment from an Indemnifying Party in respect of Damages and the Indemnified Party has actually recovered all or a part of such Damages from a third party based on the underlying claim or demand asserted against such Indemnifying Party, then a refund equal to the aggregate amount of such recovery shall be made promptly to such Indemnifying Party.  For purposes of this Section 12.05, "Tax Benefit" shall mean, with respect to the taxable period in which the applicable Damages were incurred, (i) any refund of Taxes paid, net of any Tax effect on Buyer, the Company, any Subsidiary of the Company (including any reduction of Tax assets) attributable to the receipt of such refund or (ii) the amount by which the Indemnified Party's liability for Taxes for the taxable period, calculated by excluding the relevant amount of credit or deduction, exceeds the Indemnified Party's actual liability for Taxes for such period, calculated by taking into account the relevant amount of credit or deduction (in each case, treating such credit or deduction as the last item claimed for such taxable period).  In the event that a recovery is made under an Alternative Arrangement by any Indemnified Party with respect to any Damages for which any such Person has received payment from an Indemnifying Party, then a refund equal to the aggregate amount of the recovery shall be made promptly to such Indemnifying Party.  In the event that an Indemnifying Party makes any payment to any Indemnified Party for indemnification for which such Indemnified Party could have collected on a claim against a third party (including under any contract and any insurance claim), (i) the Indemnifying Party shall be subrogated to such claims and entitled to pursue such claims and conduct litigation on behalf of such Indemnified Party and any of its successors, to pursue and collect on any indemnification or other remedy available to such Indemnified Party and (ii) the Indemnified Party shall, and shall cause its Affiliates (including the Company if the Company is an Affiliate) to, cooperate with the Indemnifying Party, at the Indemnified Party's expense, with respect to any such effort to pursue and collect.

(b)            For the avoidance of doubt, in no event will Damages include, and in no event shall any party be entitled to recover or make a claim for any amounts in respect of, punitive damages (except to the extent asserted against an Indemnified Party by, and paid by an Indemnified Party to, a third party), consequential damages, incidental damages, indirect damages or exemplary damages, and no multiples or similar valuation methodology (whether based on "multiple of profits," "multiple of earnings," "multiple of cash flows," etc.) shall be used in calculating the amount of any Damages.

(c)            Notwithstanding anything to the contrary set forth herein, the right to indemnification by Buyer based on any representation, or warranty of the Company or the Sellers contained in or made pursuant to this Agreement shall not be affected by any investigation conducted by Buyer or any of its representatives or any knowledge acquired by Buyer or any such representative at any time with respect to the accuracy or inaccuracy of any such representation or warranty.

(d)            Buyer shall not be entitled to any indemnification under Section 12.02 or Section 9.05 to the extent the amount of any Damages relating to such matter was taken into account in the determination of the Closing Payment, Closing Working Capital and/or Closing Cash, as applicable.

 

Section 12.06

Exclusive Remedy

Section 12.07

Seller Indemnifying Parties

Section 13.01

Grounds for Termination

(a)            by mutual written agreement of Sellers' Representative and Buyer;

(b)            by either Sellers' Representative or Buyer if the Closing shall not have been consummated on or before October 28, 2012; provided, however, that neither Buyer nor Sellers' Representative shall be entitled to terminate this Agreement pursuant to this Section 13.01(b) if such Person (and in the case of Sellers' Representative, if the Company or any Seller) is in material breach of this Agreement and such breach has prevented or frustrated the consummation of the transactions contemplated hereby;

(c)            by either Sellers' Representative or Buyer if there shall be any Applicable Law that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any Governmental Authority having competent jurisdiction;

(d)            by Sellers' Representative by providing written notice to Buyer if there has been a Buyer Warranty Breach or breach of covenant set forth in this Agreement on the part of Buyer such that such breaches or misrepresentations, in the aggregate, would cause the applicable closing condition set forth in Section 11.03(a), Section 11.03(b) or Section 11.03(c) to not be satisfied (so long as the Sellers' Representative has provided Buyer with written notice of such breach or misrepresentations and such breach or misrepresentations has continued without cure for a period of 20 days after notice thereof was provided);

(e)            by Buyer by providing written notice to Sellers' Representative if there has been a Seller Warranty Breach or a Company Warranty Breach or Seller covenant breach or a Company covenant breach such that such breaches or misrepresentations in the aggregate, would cause the applicable closing condition set forth in Section 11.02(a), Section 11.02(b) or Section 11.02(c) to not be satisfied (so long as Buyer has provided Sellers' Representative with written notice of such breach or misrepresentation and such breach or misrepresentation has continued without cure for a period of 20 days after notice thereof was provided);

(f)            by either Sellers' Representative or Buyer if any Government Authority (i) issues or notifies the parties that it intends to issue a request for additional information or documentary material pursuant to the HSR Act, or (ii) institutes, or specifically threatens to institute, any suit or action challenging the validity or legality of, or seeking to restrain the consummation of, the transactions contemplated by this Agreement; or

(g)            by Sellers' Representative if Buyer shall withhold from, or shall notify Sellers' Representative that it intends to withhold from, payments to be made to Sellers as provided in Section 2.02(a) (which payments, for the avoidance of doubt, are determined after taking into account the Pre-Closing Tax Accrual) Taxes (other than any Optionholder Withholding Amounts) in an amount in excess of $20,000,000.

Section 13.02

Effect of Termination

Section 14.01

Notices

Section 14.02

Amendments and Waivers

(b)            No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

 

Section 14.03

Disclosure Schedule References

Section 14.04

Expenses

Section 14.05

Successors and Assigns

Section 14.06

Governing Law

Section 14.07

Jurisdiction

Section 14.08

WAIVER OF JURY TRIAL

Section 14.09

Counterparts; Effectiveness; Third Party Beneficiaries

Section 14.10

Entire Agreement

Section 14.11

Severability

Section 14.12

Specific Performance

Section 14.13

Sellers' Representative

(b)            At the Closing, Buyer shall deliver to Sellers' Representative an amount equal to $2,000,000 (the "Sellers' Representative Expense Fund") to be held in trust to cover and reimburse the fees and expenses incurred by Sellers' Representative for its obligations in connection with this Agreement and the transactions contemplated herein.  Any balance of the Sellers' Representative Expense Fund not incurred for such purposes shall be returned to the Sellers and Optionholders in accordance with their respective Pro Rata Shares.

 

Section 14.14

Attorney-Client Privilege and Conflict Waiver