EXHIBIT 10.23

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT (this “Agreement”), entered into as of the 18th day of
December, 2007, by and between PERKINELMER HOLDINGS, INC., a Massachusetts
corporation having its principal offices at 940 Winter Street, Waltham,
Massachusetts 02451 (“Buyer”), and PEDIATRIX MEDICAL GROUP, INC., a Florida
corporation having its principal offices at 1301 Concord Terrace, Sunrise,
Florida 33323 (“Seller”);

WITNESSETH:

WHEREAS, Seller is the record and beneficial owner of all of the issued and
outstanding shares of the capital stock of Pediatrix Screening, Inc., a
Pennsylvania corporation (“PSI”), which in turn owns all of the outstanding
general partner interests and limited partner interests in Pediatrix Screening,
L.P., a Pennsylvania limited partnership (“PSLP”) (PSI and PSLP are hereinafter
each referred to as a “Company” and collectively as the “Companies”), which
Companies are engaged primarily in the business of genetic screening of
newborns, including but not limited to operation of laboratory facilities (the
“Business”); and

WHEREAS, Seller desires to sell to Buyer all, and not less than all, of the
outstanding shares of capital stock of PSI (the “Stock”), and the Business of
the Companies as a going concern, and to consummate the other transactions
contemplated by this Agreement, all upon the terms and subject to the conditions
set forth in this Agreement; and

WHEREAS, Buyer desires to purchase from Seller all, and not less than all, of
the Stock and to consummate the other transactions contemplated by this
Agreement, all upon the terms and subject to the conditions set forth in this
Agreement;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein set forth, the parties hereby covenant and agree as follows:

 

  1. CERTAIN DEFINITIONS.

In addition to the capitalized terms defined elsewhere in the Agreement, the
following terms shall have the respective meanings indicated wherever used in
this Agreement:

1.1. Affiliate. “Affiliate” shall mean, as to any Person, any other Person
controlling, controlled by or under common control with the first Person.

1.2. Affiliated Group. “Affiliated Group” shall mean a group of corporations
with which either of the Companies has filed (or was required to file)
consolidated, combined, unitary or similar Tax Returns.

1.3. Code. “Code” shall mean the Internal Revenue Code of 1986, as amended.

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1.4. ERISA. “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended.

1.5. FDA. “FDA” shall mean the United States Food and Drug Administration, or
any successor agency thereto.

1.6. Federal Health Care Program. “Federal Health Care Program” has the meaning
given in Section 1128B(f) of the Social Security Act.

1.7. GAAP. “GAAP” shall mean generally accepted accounting principles in the
United States consistently applied for all relevant periods of the Companies,
subject to those exceptions and qualifications set forth in Schedule 1.7 of the
Disclosure Schedule.

1.8. Governmental Body. “Governmental Body” shall mean any federal, state, local
or foreign government or any court, arbitrator, administrative or regulatory
agency or commission or other governmental authority or agency, domestic or
foreign.

1.9. Intellectual Property. “Intellectual Property” shall mean all proprietary
rights of every kind and nature throughout the world owned or used by either
Company in the operation of the Business as it is currently conducted,
including, without limitation, all rights and interests pertaining to or
deriving from:

(a) patents, patent rights, patent applications (including all provisionals,
reissues, reexaminations, revisions, divisions, continuations,
continuations-in-part and extensions of any patent or patent application),
inventions, improvements, and all applications for registration of the
foregoing;

(b) copyrights, registrations and applications for copyrights, works, derivative
works, software (including, without limitation, all executables, libraries,
controls and source code), software documentation, database rights, mask works,
domain names, domain name registrations, web sites, web pages, and all
applications for registration of the foregoing;

(c) trademarks, service marks, trade names, logos, designs, brand names, trade
dress, and slogans (including, without limitation, the name of each Company and
any fictitious names used by either Company) and all goodwill associated with
any of the foregoing, and all applications for registration of the foregoing;
and

(d) trade secrets, know-how, processes and business methods (including, without
limitation, methods, data, formula, and information, ideas, research and
development, formulas, compositions and techniques, data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information,
documentation and manuals) (collectively, “Trade Secrets”).

1.10. Knowledge. “knowledge” or “know” shall mean, when referring to the
knowledge of Seller, the knowledge of Joe Calabro, Karl Wagner, Thomas Hawkins,
John Rizzo and William Slimak after reasonable inquiry of the appropriate
employees of the Companies.

 

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1.11. Material Adverse Effect. “Material Adverse Effect” shall mean any material
adverse effect on the assets, business, results of operations or condition
(financial or otherwise) of the Companies taken as a whole.

1.12. Net Working Capital. “Net Working Capital” shall mean the total current
assets (excluding current income Tax assets) of the Companies less the total
current liabilities (excluding current liabilities for income Taxes) of the
Companies.

1.13. Off-the-Shelf Software. “Off-the-Shelf Software” shall mean readily
available commercial software for which either Company has purchased a
perpetual, paid-up license.

1.14. Open Source Software. “Open Source Software” shall mean Software that is
distributed as “open source software” or “free software” or under a similar
licensing or distribution model (including but not limited to the GNU General
Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public
License (MPL), BSD licenses, MIT licenses, the Artistic License, the Netscape
Public License, the Sun Community Source License (SCSL), the Sun Industry
Standards License (SISL), the Apache License, the Berkeley Open Infrastructure
for Network Computing License (BOINCL), the Berkeley Software Distribution
License (BSDL) and the Redhat License.

1.15. Person. “Person” shall mean an individual or corporation, association,
partnership, limited liability company, joint venture, joint stock or other
company, business trust, trust, organization, Governmental Body or other entity
of any kind.

1.16. Software. “Software” shall mean computer software or firmware in any form,
including but not limited to computer instructions, commands, programs, modules,
routines, procedures, rules, libraries, macros, algorithms, tools, and scripts,
and all documentation of or for any of the foregoing.

1.17. Tax Returns. “Tax Returns” shall mean any and all reports, returns,
declarations, or statements relating to Taxes, including any schedule or
attachment thereto, including any amendment thereof.

1.18. Taxes. “Taxes” shall mean any and all taxes, charges, fees, levies or
other similar assessments or liabilities in the nature of a tax, including,
without limitation, income, gross receipts, ad valorem, premium, value-added,
net worth, capital stock, capital gains, documentary, recapture, alternative or
add-on minimum, disability, estimated, registration, recording, excise, real
property, personal property, sales, use, license, lease, service, service use,
transfer, withholding, employment, unemployment, insurance, social security,
business license, business organization, environmental, workers compensation,
payroll, profits, severance, stamp, occupation, windfall profits, customs,
duties, franchise and other taxes of any kind whatsoever imposed by any
Governmental Body, and any interest, fines, penalties, assessments or additions
to tax imposed with respect to such items or any contest or dispute thereof.

 

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  2. SALE AND PURCHASE OF THE STOCK.

2.1. Sale and Purchase. At the time of the Closing on the Closing Date (as
hereinafter defined) and in accordance with the provisions of this Agreement,
Buyer shall purchase from Seller all, and not less than all, of the outstanding
Stock, and Seller shall sell, assign, transfer and deliver to Buyer all, and not
less than all, of the Stock, against receipt by Seller of the Consideration set
forth in Section 3 below.

2.2. Stock Certificates. On the Closing Date, Seller shall deliver to Buyer,
against receipt of the Consideration described in Section 3 below, the
certificate(s) representing all of the Stock, duly endorsed for transfer or
accompanied by duly executed stock powers.

 

  3. CONSIDERATION FOR THE STOCK; ADJUSTMENTS TO CONSIDERATION.

3.1. Consideration. In consideration for the delivery and transfer to Buyer of
all of the Stock, on the Closing Date, Buyer shall pay to Seller, by wire
transfer of immediately available funds to the account designated by Seller
therefor, the sum of Sixty-Six Million Dollars ($66,000,000) (the
“Consideration”).

3.2. Adjustment to the Consideration Before and After the Closing. The
Consideration shall be subject to adjustment as follows:

(a) Not later than three (3) business days prior to the Closing Date, Seller
shall prepare and deliver to Buyer a statement setting forth the estimated Net
Working Capital as of the Closing Date (the “Preliminary Closing Net Working
Capital Statement”), which statement shall be in substantially the form of the
illustrative calculation of Net Working Capital as of October 31, 2007 set forth
in Schedule 3.2 of the Disclosure Schedule. The Preliminary Closing Net Working
Capital Statement shall be prepared in accordance with the provisions relating
to the preparation of the Closing Net Working Capital Statement set forth in
this Section 3.2. The Preliminary Closing Net Working Capital Statement shall be
accompanied by (i) all relevant backup materials and schedules, in detail
reasonably acceptable to Buyer, and (ii) a statement setting forth the Net
Working Capital amount calculated therein (the “Preliminary Net Working
Capital”). If the Preliminary Net Working Capital shown on the Preliminary
Closing Net Working Capital Statement is (A) greater than $2,520,000 ($2,520,000
being referred to herein as the “Upper Amount”), then the excess shall be added
to the Consideration, or (B) less than $2,280,000 ($2,280,000 being referred to
herein as the “Lower Amount”), then the difference shall be deducted from the
Consideration (the Consideration, as so adjusted, is referred to as the
“Preliminary Consideration”).

(b) Not later than 45 calendar days after the Closing Date, Buyer shall deliver
to Seller a statement setting forth Net Working Capital as of the Closing Date
(the “Closing Net Working Capital Statement”). Notwithstanding any requirement
of GAAP to the contrary, the Closing Net Working Capital Statement shall include
all of the line items included on the illustrative calculation of Net Working
Capital as of October 31, 2007 set forth in Schedule 3.2 of the Disclosure
Schedule, and shall not include any line items that are not included on such
Schedule 3.2. The amounts set forth on each such line item shall be determined
in accordance with GAAP applied consistently with the Financial Statements (to
the extent the Financial Statements are consistent with GAAP).

 

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(c) The Closing Net Working Capital Statement delivered pursuant to
Section 3.2(b) above shall be accompanied by (i) all relevant back-up materials
and schedules, in detail reasonably acceptable to Seller, and (ii) a statement
setting forth the Net Working Capital amount calculated therein and (A) the
amount, if any, by which such Net Working Capital amount is greater than the
Upper Amount or is less than the Lower Amount (the “Closing Net Working Capital
Adjustment”), or (B) that such Net Working Capital amount is neither greater
than the Upper Amount nor less than the Lower Amount.

(d) Buyer shall and shall cause the Companies to make available to Seller and
its representatives such information, books, records, personnel and resources as
may be reasonably necessary to enable Seller to review the Closing Net Working
Capital Statement in accordance with this Section 3.2; provided that the
obligation of Buyer and the Companies to provide such information, books,
records, personnel and resources shall be limited to normal business hours with
reasonable prior notice and in such a manner so as not to interfere unreasonably
with the conduct of the businesses of Buyer or the Companies. In the event that
Seller disputes the Closing Net Working Capital Statement, the Net Working
Capital amount calculated therein, or (if applicable) the calculation of the
Closing Net Working Capital Adjustment, Seller shall notify Buyer in writing
(the “Seller Dispute Notice”) of the amount, nature and basis of such dispute,
within 30 calendar days after delivery of the Closing Net Working Capital
Statement. In the event of such a dispute, Buyer and Seller shall first use
their diligent good faith efforts to resolve such dispute among themselves. If
Buyer and Seller are unable to resolve the dispute within 30 calendar days after
delivery of the Seller Dispute Notice, then any remaining items in dispute shall
be submitted to an independent public accounting firm selected in writing by
Buyer and Seller, or, if Buyer and Seller fail or refuse to select a firm within
ten (10) calendar days after written request therefor by Buyer or Seller, such
an independent public accounting firm shall be selected in accordance with the
rules of the New York, New York office of the American Arbitration Association
(the “Neutral Accountant”). All determinations pursuant to this Section 3.2(d)
shall be in writing and shall be delivered to Buyer and Seller. The
determination of the Neutral Accountant as to the resolution of any dispute
shall be binding and conclusive upon Buyer and Seller. A judgment on the
determination made by the Neutral Accountant pursuant to this Section 3.2 may be
entered in and enforced by any court or arbitrator having jurisdiction
thereover.

(e) The fees and expenses of the Neutral Accountant in connection with the
resolution of disputes pursuant to Section 3.2(d) shall be shared equally by
Buyer and Seller; provided that if the Neutral Accountant determines that one
such party has adopted a position or positions with respect to the Closing Net
Working Capital Statement or the calculation of the Closing Net Working Capital
Adjustment that is frivolous or clearly without merit, the Neutral Accountant
may, in its discretion, assign a greater portion of any such fees and expenses
to such party.

(f) Immediately upon the expiration of the 30-day period for giving the Seller
Dispute Notice, if no such notice is given, or upon notification by Seller to
Buyer that no such Seller Dispute Notice will be given, or immediately upon the
resolution of disputes, if any, pursuant to this Section 3.2, the Preliminary
Consideration shall be adjusted (as so adjusted, the “Adjusted Consideration”)
such that the Adjusted Consideration shall equal, as applicable, (i) the sum of
the Consideration plus the amount (if any) by which the Net Working Capital (as

 

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finally determined in accordance with this Section 3.2) exceeds the Upper
Amount, (ii) the Consideration minus the amount (if any) by which the Net
Working Capital (as finally determined in accordance with this Section 3.2) is
less than the Lower Amount, or (iii) the amount of the Consideration if the Net
Working Capital (as finally determined in accordance with this Section 3.2)
neither exceeds the Upper Amount nor is less than the Lower Amount.

3.3. Payments on Account of Adjustments. Immediately upon the expiration of the
30-day period for giving the Seller Dispute Notice, if no Seller Dispute Notice
is given, or upon notification by Seller to Buyer that no Seller Dispute Notice
will be given, or immediately upon final resolution of any dispute in connection
with the determination of the Adjusted Consideration, (a) Seller shall pay to
Buyer the amount (if any) by which the Adjusted Consideration (as finally
determined in accordance with Section 3.2(f) above) is less than the Preliminary
Consideration, or (b) Buyer shall pay to Seller the amount (if any) by which the
Adjusted Consideration exceeds the Preliminary Consideration. Any payment under
this Section 3.3 shall be made by wire transfer of immediately available funds
to the account designated for such purpose by the recipient of such funds.

3.4. Allocation. If Buyer elects to cause an election pursuant to
Section 338(h)(10) of the Code to be made in accordance with Section 13.5 below,
Buyer and Seller agree to make such allocations of the Adjusted Consideration as
are provided for in or determined in accordance with Section 13.5. In the event
that an election pursuant to Section 338(h)(10) of the Code is not made, Buyer
and Seller agree to work together in good faith to determine the allocation of
the Adjusted Consideration between the Stock and the restrictive covenants set
forth in Section 15.5 for Tax purposes.

 

  4. REPRESENTATIONS AND WARRANTIES OF SELLER.

Seller hereby represents and warrants to Buyer that, except as otherwise
disclosed in the Disclosure Schedule of even date herewith delivered by Seller
to Buyer (the numbered sections of which correspond to the numbered Sections of
this Agreement), the statements contained in this Section 4 are true and
correct. The disclosures in any section or subsection of the Disclosure Schedule
shall qualify other sections and subsections in this Section 4 to the extent
that a fair reading of the disclosure would indicate that such disclosure is
also applicable to such other sections and subsections.

4.1. Ownership of Securities. Seller has good and valid title to all of the
Stock, which consists of 8,400 shares of Series A Common Stock of PSI; and PSI
owns all of the outstanding general partner interests and limited partner
interests in PSLP (the Stock and such partnership interests are collectively
referred to herein as the “Securities”). All of the Securities have been duly
authorized and validly issued and are fully paid and non-assessable, and are
owned beneficially and of record by Seller and PSI (as applicable), free and
clear of all pledges, liens, claims, mortgages, security interests, charges,
options, calls, encumbrances, restrictions and assessments whatsoever (whether
arising by contract or by operation of law) (collectively, “Liens”), except for
(a) the pledge thereof disclosed in Schedule 4.1 of the Disclosure Schedule
(which pledge shall be released at or prior to the Closing), and (b) any
restrictions which may be created by operation of state or federal securities
laws. Except for the pledgee disclosed in Schedule 4.1, no Person other than
Seller or PSI (as applicable) has any claim or interest in or to any of the
Securities.

 

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4.2. Valid and Binding Agreement. Seller has full legal right, power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby by
Seller have been duly and validly authorized by the Board of Directors of
Seller; and Seller has the full legal right, power and authority to execute and
deliver this Agreement, to perform its obligations hereunder, and to consummate
the transactions contemplated hereby. No further corporate authorization is
necessary on the part of Seller to consummate the transactions contemplated
hereby. This Agreement constitutes the legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except to the
extent limited by bankruptcy, insolvency, reorganization and other laws
affecting creditors’ rights generally, and except that the remedy of specific
performance or similar equitable relief is available only at the discretion of
the entity before which enforcement is sought.

4.3. Organization, Good Standing and Qualification. PSI is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, and PSLP is a limited partnership duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania. Each Company has all necessary corporate or limited partnership
power and authority to carry on its business and to own, lease and operate its
properties. The Companies are duly qualified and in good standing as a foreign
corporation or foreign limited partnership (as applicable) in the jurisdictions
indicated in Schedule 4.3 of the Disclosure Schedule, which are the only
jurisdictions in which such qualification is required by law and the failure to
be so qualified has been or would reasonably be expected to be, individually or
in the aggregate, material to the Companies or their businesses. True and
complete copies of the Articles of Incorporation and By-Laws of PSI and the
certificate of limited partnership and limited partnership agreement of PSLP
(including all amendments thereto) have previously been delivered by Seller to
Buyer. Schedule 4.3 sets forth a complete list of the officers and directors of
each Company.

4.4. Options, Warrants, Etc. There are no issued and outstanding shares of
capital stock or other equity securities or partnership interests of either
Company other than the Securities. There are no outstanding subscriptions,
options, rights, warrants, convertible securities or other agreements or calls,
demands or commitments obligating either Company to issue, transfer or purchase
any shares of its capital stock or general or limited partnership interests or
any rights to any shares of capital stock or partnership interests, or
obligating Seller or PSI to transfer any of the Securities. No shares of capital
stock or partnership interests of either Company are reserved for issuance
pursuant to stock options, warrants, agreements or other rights to purchase or
acquire securities. There are no outstanding or authorized stock appreciation,
phantom stock, stock unit or similar rights with respect to either Company.
There are no agreements, voting trusts or proxies with respect to the voting or
registration of the Securities.

4.5. Subsidiaries and Investments. Except for PSI’s ownership of PSLP, neither
of the Companies (a) owns, directly or indirectly, any stock or other equity
securities of any corporation or entity, or (b) has any direct or indirect
equity or ownership interest in any Person other than the business conducted by
such Company.

 

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4.6. Financial Statements and Financial Information.

(a) Schedule 4.6(a) of the Disclosure Schedule contains (i) the unaudited
combined balance sheets of the Companies as of December 31, 2005 and 2006, and
the related unaudited combined statement of income for each of the fiscal years
then ended, and (ii) the unaudited combined balance sheet of the Companies as of
October 31, 2007, and the related unaudited combined statement of income of the
Companies for the ten (10) months then ended (collectively, the “Financial
Statements”).

(b) The Financial Statements: (i) were prepared in accordance with the books and
records of the Companies and in accordance with GAAP, subject to audit
adjustments which would not (individually or in the aggregate) be material, and
subject to the absence of certain footnote disclosures which would otherwise be
required by GAAP; (ii) fairly present the Companies’ combined financial
condition as at the dates thereof, and the results of its operations for the
fiscal periods then ended; (iii) contain and reflect all necessary adjustments
and accruals for a fair presentation of the financial condition and the results
of operations as of the dates of and for the fiscal periods covered by such
Financial Statements in accordance with GAAP; and (iv) make full and adequate
provision, subject to and in accordance with GAAP and Regulation S-X promulgated
under the Securities Act of 1933, as amended (the “1933 Act”), for the various
assets and liabilities of the Companies, fixed or contingent, and the results of
its operations and transactions in its accounts, as of the dates and for the
periods referred to therein.

(c) The books and records of the Companies are sufficient such that, through
normal accounting and audit procedures, audited financial statements of the
Companies can be prepared in conformity with the requirements of Regulation S-X.

(d) Schedule 4.6(d) of the Disclosure Schedule contains true and complete copies
of the accounts receivable aging and accounts payable aging of the Companies as
of October 31, 2007, together with a true and complete list of all obligations
of the Companies guaranteed by Seller and/or any of its Affiliates.

(e) The Companies maintain proper and adequate internal accounting controls
which provide assurance that (i) transactions are executed with management’s
authorization, (ii) transactions are recorded as necessary to permit preparation
of the financial statements of the Companies and to maintain accountability for
the Companies’ assets, and (iii) access to assets of the Companies is permitted
only in accordance with management’s authorization.

(f) Except as set forth in Schedule 4.6(f) and Schedule 1.7 of the Disclosure
Schedule, neither Company has any liability (whether known or unknown, whether
absolute or contingent, whether liquidated or unliquidated and whether due or to
become due), except for (i) liabilities shown on the October 31, 2007 Balance
Sheet referred to in Section 4.6(a), (ii) liabilities which have arisen since
October 31, 2007 in the ordinary course of business, and (iii) contractual and
other liabilities incurred in the ordinary course of business

 

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which are not required by GAAP to be reflected on a balance sheet (none of which
liabilities referred to in clauses (ii) and (iii) arise out of any breach of
contract or violation of law and has been or would reasonably expected to be,
individually or in the aggregate, materially adverse to the Companies or their
businesses).

4.7. No Material Changes.

(a) Since October 31, 2007, except as set forth in Schedule 4.7 of the
Disclosure Schedule, the Business has continued to be operated only in the
ordinary course, and there has not been:

(i) Any material adverse change in the financial condition, operations or
business of the Companies from that shown on the Financial Statements
(including, without limitation, any announced changes in the Companies’
relations with any significant suppliers, clients, customers, referral sources
or others having significant relationships with the Companies), or any material
transaction or commitment effected or entered into by the Companies outside of
the normal course of business;

(ii) Any occurrence, event, incident, action, failure to act or transaction with
respect to either Company which, individually or in the aggregate, has been or
would reasonably be expected to be, individually or in the aggregate, materially
adverse to the Companies or their businesses;

(iii) Any declaration, setting aside or payment of any dividend or other
distribution with respect to the Stock, any other payment of any kind by either
Company to Seller or any of Seller’s Affiliates other than in the ordinary
course of business (which includes the daily sweep and retention by Seller of
all cash balances of the Companies) or in repayment of intercompany obligations,
any forgiveness of any debt or obligation owed to either Company by Seller or
any of Seller’s Affiliates, any direct or indirect redemption, purchase or other
acquisition by either Company of any capital stock or partnership interests in
either of the Companies or any of the actions set forth in Section 6.5(a)
through (q).

4.8. Taxes Returns and Tax Audits.

(a) For all fiscal years since the fiscal year ending December 31, 2003, the
Companies have been included in the consolidated federal income Tax Returns of
Seller.

(b) For U.S. federal and state income Tax purposes, PSLP has been, at all times
since its acquisition by PSI, disregarded as an entity separate from its owner
as described in United States Treasury regulations section 1.7701-3.

(c) All Tax Returns required to be filed by each Company and any Affiliated
Group on or before the date hereof have been timely filed with the appropriate
Governmental Body in all jurisdictions in which such returns and reports are
required to be filed and all such Tax Returns were true, correct and complete;
all Taxes due from or with respect to each Company (including any Taxes
attributable to an Affiliated Group) as of the date hereof have been fully paid,
any such Taxes not yet due and payable do not exceed the accruals and reserves
for Taxes (excluding accruals and reserves for deferred Taxes established to
reflect

 

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timing differences between book and Tax income) set forth on the unaudited
combined balance sheet of the Companies as of October 31, 2007, and any such
Taxes for all Tax periods commencing after October 31, 2007 arose in the
ordinary course of business and are of a type comparable to prior similar
periods; all Taxes and other assessments and levies which each Company is
required by law to withhold or to collect have been duly withheld and collected,
and have been paid over to the proper Governmental Body to the extent due and
payable; neither Company (i) has any actual or potential liability under United
State Treasury regulations section 1.1502-6 (or any comparable or similar
provision of federal, state, local or foreign law), as a transferee or
successor, pursuant to any contractual obligation, or otherwise for any Taxes of
any Person other than the Companies (except for such liability attributable to
the Affiliated Group of which Seller is the common parent), or (ii) is a party
to or bound by any Tax indemnity, Tax sharing, Tax allocation or similar
agreement; and there are no outstanding or pending claims, deficiencies or
assessments for Taxes, interest or penalties with respect to any Taxable period
of either Company.

(d) Seller has made available to Buyer for inspection complete and correct
copies of all Tax Returns of each Company and any Affiliated Group (but, in the
case of any such Affiliated Group, only the portions of such Tax Returns
relating to the Companies) relating to Taxes for all Taxable periods for which
the applicable statute of limitations has not yet expired. Except as disclosed
in Schedule 4.8(d) of the Disclosure Schedule, neither Seller nor either Company
has been notified in writing that any audit of any Tax Return of either Company
by any Governmental Body is currently in progress. Neither Seller nor either of
the Companies has been notified in writing by any jurisdiction that the
jurisdiction believes that either Company, Seller or any other member of the
Affiliated Group was required to file any Tax Return that was not filed. Neither
of the Companies, Seller or any other member of the Affiliated Group of which
Seller is the common parent has (i) waived any statute of limitations with
respect to Taxes or agreed to extend the period for assessment or collection of
any Taxes, (ii) requested any extension of time within which to file any Tax
Return, which Tax Return has not yet been filed, or (iii) executed or filed any
power of attorney with any Governmental Body responsible for the assessment
and/or collection of any Tax.

(e) Neither of the Companies: (i) has made any payments, is obligated to make
any payments, or is a party to any agreement that could obligate it to make any
payments that may be treated as an “excess parachute payment” under Section 280G
of the Code; determined without regard to Section 280G(b)(4)(B) of the Code or
(ii) is or has been required to make a basis reduction pursuant to United States
Treasury regulations section 1.1502-20(b) or United States Treasury regulations
section 1.337(d)-2(b).

(f) PSI has not distributed to its stockholders or security holders stock or
securities of a controlled corporation, nor has stock or securities of PSI been
distributed, in a transaction to which Section 355 of the Code applies (i) in
the two years prior to the date of this Agreement or (ii) in a distribution that
could otherwise constitute part of a “plan” or “series of related transactions”
(within the meaning of Section 355(e) of the Code) that includes the
transactions contemplated by this Agreement.

4.9. Personal Property; Liens; Sufficiency of Assets. Each Company has and owns
good title to all of its personal property, free and clear of all Liens
whatsoever, except for:

 

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(a) those Liens listed in Schedule 4.9 of the Disclosure Schedule (all of which
will be released at or prior to the Closing); (b) liens for current Taxes not
yet due and payable or which are being contested in good faith by appropriate
proceedings and, in the case of Taxes other than income Taxes, for which an
appropriate reserve will be properly accrued for in Net Working Capital as of
the Closing Date; and (c) other Liens arising in the normal course of business
and which are not, individually or in the aggregate, material in character or
amount and do not interfere with the use made of any such property in the
Business (collectively, “Permitted Liens”). Schedule 4.9 includes a list of all
outstanding capital leases of the Companies and the remaining scheduled payments
thereunder as of the date hereof. All fixed assets owned or leased by the
Companies are in good operating condition and repair (reasonable wear and tear
excepted). The assets owned and leased by the Companies are sufficient for the
conduct of the Business as presently conducted and constitute all assets used by
the Companies in the Business. Schedule 4.9 lists individually (a) all material
items of fixed assets (within the meaning of GAAP) of the Companies, indicating
the cost, accumulated book depreciation (if any) and the net book value of each
such fixed asset as of October 31, 2007, and (ii) all other material assets of a
tangible nature (other than inventories) of the Companies.

4.10. Real Property.

(a) Neither of the Companies owns or has any interest of any kind (whether
ownership, lease or otherwise) in any real property, except to the extent of
PSI’s interest as lessee under the lease for the business premises listed in
Schedule 4.10 of the Disclosure Schedule (the “Facility”). A true and complete
copy of the lease agreement in respect of the Facility (including all amendments
thereto) has previously been provided to Buyer (the “Lease”). Neither Company is
a sublessor with respect to any real property. With respect to the Lease:

(i) the Lease is legal, valid, binding, enforceable and in full force and effect
against PSI and, to Seller’s knowledge, against each other party thereto;

(ii) neither PSI, nor, to the knowledge of Seller, any other party, is in
material breach or violation of, or material default under, the Lease, and no
event has occurred, is pending or, to the knowledge of Seller, is threatened,
which, after the giving of notice, with lapse of time, or otherwise, would
constitute a material breach or material default by PSI or, to the knowledge of
Seller, any other party under the Lease;

(iii) there are no disputes, oral agreements or forbearance programs in effect
as to the Lease;

(iv) PSI has not assigned, transferred, conveyed, mortgaged, deeded in trust or
encumbered any interest in the leasehold or subleasehold;

(v) the Facility is connected to utilities and other services which have been
adequate for the normal operation of the Facility;

(vi) no construction, alteration or other leasehold improvement work with
respect to the Lease remains to be paid for or performed by PSI; and

 

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(vii) the Financial Statements contain adequate reserves to provide for the
restoration of the property subject to the Lease at the end of the Lease term,
to the extent required by the Lease and by GAAP.

(b) The Facility is in good condition (reasonable wear and tear excepted), and
is adequate for the operation of the Business as presently conducted. No consent
of the landlord under the Lease will be required in order for the Lease to
remain in effect in accordance with its current terms, after giving effect to
the sale and transfer of the Securities pursuant to this Agreement.

(c) To Seller’s knowledge, (i) each Company’s use of the Facility in the normal
conduct of the Business does not violate any applicable building, zoning or
other law, ordinance or regulation affecting such real property, and (ii) no
covenants, easements, rights of way or other such conditions of record impair
such Company’s use of the Facility in the normal conduct of the Business.

4.11. Accounts Receivable.

(a) To the extent not already collected, all accounts receivable shown on the
October 31, 2007 Financial Statements, and all accounts receivable thereafter
created or acquired by the Companies (the “Accounts”), have arisen in the
ordinary course of the Business, and, to the extent not already collected,
represent amounts owed to the Companies by account debtors in respect of goods,
products or services provided to such account debtors by the Companies, subject
to a reserve for doubtful accounts in the amount set forth in the October 31,
2007 Financial Statements (the “Reserve”). A complete and accurate list of the
Accounts reflected on the October 31, 2007 Financial Statements, showing the
aging thereof, is included in Schedule 4.11(a) of the Disclosure Schedule.

(b) Seller has no knowledge of any asserted counterclaims or set-offs in respect
of any of such Accounts, subject to (i) the Reserve, and (ii) customary
adjustments which may be effected with customers in the ordinary course of
business (which adjustments are not and are not reasonably expected to be, in
the aggregate, material to the Companies); and assuming that commercially
reasonable efforts are made to collect such Accounts, Seller has no reason to
believe that all such Accounts (net of an amount equal to the Reserve) will not
be collected in the normal course of business.

4.12. Inventories. All inventories which are owned by the Companies and
reflected in the Financial Statements have been valued at the lower of cost or
market, based on the FIFO method of accounting, and all items of obsolete or
slow-moving inventory have been written down to net realizable or scrap value.
Except as otherwise disclosed in Schedule 4.12, such inventories, in the
aggregate, consist of items which are of a quality and quantity which are
useable in the ordinary course of the Companies’ business. Seller has no
knowledge of any Governmental Body approvals required to be obtained in respect
of the sale of such inventories.

4.13. Insurance Policies. Schedule 4.13 of the Disclosure Schedule contains a
true and correct schedule of all insurance coverages held by the Companies or
held by Seller or any of its Affiliates for the benefit of the Companies, in
each case concerning the Business or

 

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the Companies’ properties, including the names of insurers, policy limits and
deductibles. Neither Seller nor the Companies has received written notice of
cancellation or intent not to renew any of such policies, and to Seller’s
knowledge, there does not exist any condition (other than general industry-wide
conditions) such as would cause any of such insurers to cancel any of the
insurance coverages, or would be reasonably likely to materially increase the
premiums charged for coverages consistent with the scope and amounts of their
existing coverages. There is no claim pending under any such policy as to which
coverage has been questioned, denied or disputed by the underwriter of such
policy. All premiums due and payable under all such policies have been paid,
neither Company is liable for retroactive premiums or similar payments, and the
Companies are otherwise in compliance in all material respects with the terms of
such policies. Schedule 4.13 identifies all claims asserted by or on behalf of
either Company pursuant to any such insurance policy since January 1, 2005 and
describes the nature and status of each such claim. Except as set forth on
Schedule 4.13, neither Seller nor either Company has any self-insurance or
co-insurance programs. To the extent that such coverages are provided pursuant
to group policies of Seller, no representation or warranty is made as to the
continuation of such coverages from and after the Closing, and Seller reserves
the right to terminate or curtail any of such coverages from and after the
Closing Date.

4.14. Permits and Licenses. Schedule 4.14 of the Disclosure Schedule sets forth
an accurate and complete list of all permits, licenses, authorizations,
approvals and/or franchises from any Governmental Body (collectively, “Permits”)
which the Companies presently hold, other than any Permits the absence of which,
individually or in the aggregate, would not be material to the Companies or
their businesses, and the Companies are in compliance in all material respects
with all terms and conditions thereof. Such Permits are the only Permits from
whatever Governmental Bodies having jurisdiction over such Company, necessary in
order to operate its Business in the manner presently conducted, including those
under Environmental Laws (defined below), except where the failure to hold or
maintain a Permit has not been and would not reasonably be expected to be,
individually or in the aggregate, material to the Companies or their businesses.
The Companies have at all times complied in all material respects with the
requirements of such Permits (or have timely and validly cured any deficiencies
in compliance), and have received no written notice of any pending or threatened
proceedings for the suspension, termination, revocation or limitation thereof,
and to Seller’s knowledge, there is no basis for the suspension, termination,
revocation or limitation thereof. All of the Companies’ Permits are valid,
current and in full force and effect, and to Seller’s knowledge, none of such
Permits will be voided, revoked, suspended or terminated, or voidable,
revocable, suspendable or terminable, upon and by reason of the consummation of
the transactions contemplated by this Agreement.

4.15. Contracts and Commitments.

(a) Schedule 4.15 of the Disclosure Schedule lists all of the following types of
agreements to which either Company is a party (collectively, “Material
Contracts”):

(i) any agreement (or group of related agreements) for the lease of personal
property from or to third parties;

 

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(ii) any agreement (or group of related agreements) for the purchase or sale of
products or for the furnishing or receipt of services (A) which calls for
performance over a period of more than one year, (B) which involves anticipated
payments or receipts of more than $50,000, or (C) in which either Company has
granted manufacturing rights, “most favored nation” pricing provisions or
marketing or distribution rights relating to any services, products or territory
or has agreed to purchase a minimum quantity of goods or services or has agreed
to purchase goods or services exclusively from a certain party;

(iii) any agreement concerning the establishment or operation of a partnership,
joint venture or limited liability company;

(iv) any agreement (or group of related agreements) under which either Company
has created, incurred, assumed or guaranteed (or may create, incur, assume or
guarantee) indebtedness (including capitalized lease obligations) or under which
it has imposed (or may impose) a Lien on any of its assets, tangible or
intangible;

(v) any agreement for the disposition of any significant portion of the assets
or business of either Company (other than sales of products in the ordinary
course of business) or any agreement for the acquisition of the assets or
business of any other entity (other than purchases of inventory or components in
the ordinary course of business);

(vi) any agreement concerning confidentiality, noncompetition or
non-solicitation (other than confidentiality agreements with suppliers or
customers or employees of either Company set forth in such Company’s standard
terms and conditions of purchase or sale or standard form of employment letter
or employment agreement, copies of which have previously been delivered to
Buyer);

(vii) any employment agreement, consulting agreement, severance agreement (or
agreement that includes provisions for the payment of severance) or personnel
retention agreement, or any contractual guaranty of employment;

(viii) any material settlement agreement or settlement-related agreement
(including any agreement in connection with which any employment-related claim
is settled);

(ix) any agency, distributor, sales representative, franchise or similar
agreement to which either Company is a party or by which either Company is
bound;

(x) any agreement which contains any provisions requiring either Company to
indemnify any other party in an amount which would reasonably be expected to
exceed $250,000 (excluding indemnities contained in the Companies’ standard form
agreements, copies of which have been provided to Buyer, for the sale or license
of products or services);

(xi) any agreement that would reasonably be expected to have the effect of
prohibiting or impairing the conduct of the business of either Company as
currently conducted;

 

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(xii) any agreement that purports to create any obligation of any Affiliate of
any Company that would reasonably be expected, subsequent to the Closing, to
have the effect of prohibiting or impairing in any material respect the conduct
of the business of Buyer or any of its Affiliates as currently conducted; and

(xiii) any agreement with any insurance provider which is not listed in Schedule
4.13.

(b) Seller has delivered to Buyer a complete and accurate copy of each Material
Contract (as amended to date). Except as set forth in Schedule 4.15: (i) all
Material Contracts are legal, valid, binding and enforceable and in full force
and effect against the Company that is the party thereto and, to Seller’s
knowledge, against each other party thereto; (ii) neither of the Companies is in
material breach or default or is now subject to any condition or event which has
occurred and which, after notice or lapse of time or both, would constitute a
material default by such Company under any such Material Contract and, to
Seller’s knowledge, no other party to any such Material Contract is in material
breach or default or is now subject to any condition or event which has occurred
and which, after notice or lapse of time or both, would constitute a material
default by such party under any such Material Contract; and (iii) to Seller’s
knowledge, none of the Material Contracts will be voided, revoked or terminated,
or voidable, revocable or terminable, upon and by reason of the consummation of
the transactions contemplated by this Agreement.

(c) Except for powers of attorney granted in the ordinary course of business,
there is no outstanding power of attorney granted by either Company to any
Person.

4.16. Customers and Suppliers. Schedule 4.16 of the Disclosure Schedule sets
forth a list of groupings of all customers of each Company during the fiscal
year ended December 31, 2006 and the interim period through October 31, 2007
which accounted for more than $50,000 in revenues during either such period, and
the amount of revenues accounted for by such customer groupings during each such
period. Except as disclosed on Schedule 4.16 of the Disclosure Schedule, there
is no supplier that is the sole supplier of any significant product or service
to either Company. Neither of the Companies has received any written notice of
any existing, announced or anticipated changes in the policies of any such
customer, supplier or referral source which has not been and would not
reasonably be expected to be, individually or in the aggregate, materially
adverse to the Companies or their businesses. No purchase order or commitment of
either Company is in excess of normal requirements, nor are prices provided
therein, to the Company’s knowledge, in excess of current market prices for the
products or services to be provided thereunder.

4.17. Labor, Benefit and Employment Agreements.

(a) Except as set forth in Schedule 4.17(a) of the Disclosure Schedule, neither
of the Companies is a party to (i) any collective bargaining agreement or other
agreement covering unionized employees, or (ii) any agreement with respect to
the employment or compensation of any non-hourly and/or non-union employee(s)
which is not terminable without penalty by the subject Company on not more than
thirty-one (31) days’ prior written notice.

 

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(b) No union is now certified or has claimed the right to be certified as a
collective bargaining agent to represent any employees of either Company, and
there are no organizational activities or labor disputes existing or, to
Seller’s knowledge, threatened, involving organizational activities, picketing,
strikes, slowdowns, work stoppages, job actions or lockouts of any employees of
either Company.

(c) Neither of the Companies nor Seller has received written notice of any
unfair labor practice charges or petitions for election filed, pending or being
litigated before the National Labor Relations Board or any State labor relations
board.

(d) Except as set forth in Schedule 4.17(d) of the Disclosure Schedule, neither
of the Companies (nor any of its employees by reason of their employment with
the Companies) participates in, is a party to, or otherwise has any liability
associated with (i) any bonus, deferred compensation, stock option, stock
purchase, consulting, retirement, severance, welfare or incentive plan, pension
plan or profit sharing plan, (ii) any other such benefit plan constituting an
“employee benefit plan” within the meaning of Section 3(3) of ERISA or (iii) any
benefit or compensation arrangement covering non-employee consultants or service
providers to either Company (collectively, an “Employee Plan”). Complete and
accurate copies of all Employee Plans which have been reduced to writing and
written summaries of all unwritten Employee Plans have been delivered to Buyer.
All such Employee Plans constitute part of a group benefits program of Seller,
and none of such Employee Plans are maintained by the Companies.

(e) Neither of the Companies (i) is a party to or is obligated to contribute to
any “multiemployer plan” (as defined in Section 3(37) of ERISA or
Section 4001(a)(3) of ERISA), (ii) has, at any time since December 31, 2003,
suffered or caused any “complete withdrawal” or “partial withdrawal” (as those
terms are respectively defined in Sections 4203 and 4205 of ERISA) therefrom on
its part or (iii) has maintained an employee benefit plan subject to Section 412
of the Code or Title IV of ERISA. For purposes of this Section “ERISA Affiliate”
means any entity which is, or at any applicable time was, a member of (i) a
controlled group of corporations (as defined in Section 414(b) of the Code),
(ii) a group of trades or businesses under common control (as defined in
Section 414(c) of the Code), or (iii) an affiliated service group (as defined
under Section 414(m) of the Code or the regulations under Section 414(o) of the
Code), any of which includes or included either of the Companies.

(f) Except as disclosed in Schedule 4.17(f) of the Disclosure Schedule, the
Companies do not have any material liabilities or obligations of any kind with
respect to any Employee Plan, or have any material potential or contingent
liability in respect of any actions or transaction relating to any Employee
Plan, other than to make contributions thereto if, as and when due (prior to
imposition of any interest or penalties) in respect of periods subsequent to the
date hereof.

(g) Except for the pension plans, group medical insurance programs and any other
medical insurance listed in Schedule 4.17(g) of the Disclosure Schedule, neither
of the Companies, nor Seller on behalf of either Company, maintains any medical,
health, life or other employee benefit programs or any welfare plans (within the
meaning of Section 3(1) of ERISA) for the benefit of any current or former
employees, and, except as required by statute or

 

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governmental regulation, neither of the Companies has any liability, fixed or
contingent, for health or medical benefits to any former employee. No Employee
Plan is funded by, associated with or related to a “voluntary employee’s
beneficiary association” within the meaning of Section 501(c)(9) of the Code.

(h) No plan documentation or agreement, summary plan description or other
written communication distributed generally to employees by its terms prohibits
either Company from amending or terminating any Employee Plan, except in
accordance with the subject Employee Plan.

(i) To the extent that any of the plans, programs or policies listed in Schedule
4.17(a) constitutes part of a group benefits program of Seller and any of its
Affiliates (other than PSI), no representation or warranty is made as to the
continued availability of coverage or eligibility thereunder from and after the
Closing, except as otherwise provided in the Transition Services Agreement (as
hereinafter defined).

(j) Schedule 4.17(j) of the Disclosure Schedule contains a list of all employees
of each Company on the date of this Agreement, along with the position, date of
hire, annual rate of compensation (or with respect to employees compensated on
an hourly or per diem basis, the hourly or per diem rate of compensation),
estimated or target annual incentive compensation of each such Person and
employment status of each such Person (including whether the Person is on leave
of absence and the dates of such leave). Except for those individuals who are
parties to the employment agreements, retention agreements, or guarantees of
employment disclosed in Schedule 4.15 of the Disclosure Schedule, each employee
of either Company is retained at-will. Schedule 4.17(j) contains a list of all
employees of either Company who have not provided Seller with appropriate
evidence of their status as citizens of the United States. To Seller’s
knowledge, no key employee or group of employees has given written notice to
either Company terminating his or her employment with either Company. Each
Company is in compliance with all applicable laws relating to the employment of
employees, including, without limitation, the hiring and termination of
employees, except where any non-compliance has not been and would not reasonably
be expected to be, individually or in the aggregate, materially adverse to the
Companies or their businesses.

(k) Schedule 4.17(k) of the Disclosure Schedule contains a list of all
(i) consultants, and (ii) independent contractors currently engaged by either
Company, along with the position, date of engagement and rate of remuneration
for each such Person. Except as set forth in Schedule 4.17(k), none of such
consultants or independent contractors is a party to a written agreement or
contract with either Company.

(l) Schedule 4.17(l) of the Disclosure Schedule sets forth a list of each
employee of either Company who is providing services in the United States and
who holds a temporary work authorization (“Work Permit”), including H-1B, TN,
E-1, E-2, L-1, F-1 or J-1 visa status or Employment Authorization Document
(“EAD”) work authorizations, setting forth the name of such employee, the type
of Work Permit and the length of time remaining on such Work Permit.

 

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(m) Each Company has withheld and paid to the appropriate Governmental Body or
is holding for payment not yet due to such Governmental Body all amounts
required to be withheld from its employees and is not liable for any arrears of
wages, Taxes, penalties or other sums for failure to comply with any of the
foregoing.

(n) Schedule 4.17(n) of the Disclosure Schedule contains a complete and accurate
list of (i) all of the Companies’ written employee handbooks, employment
manuals, employment policies, or affirmative action plans, and (ii) written
summaries of all unwritten employment policies.

(o) Neither Company has caused or will cause any “employment loss” (as that term
is defined or used in the Worker Adjustment Retraining Notification Act) at any
time from the date that is 90 days immediately preceding Seller’s execution of
this Agreement and continuing through the Closing Date.

(p) Neither Company has incurred, and no circumstances exist under which such
Company would incur, any liability arising from the misclassification of
employees as consultants or independent contractors, or from the
misclassification of consultants or independent contractors as employees.

4.18. No Breach of Statute, Decree or Other Instrument. Neither the execution
and delivery of this Agreement by Seller, nor the performance of or compliance
with the terms and provisions of this Agreement on the part of either Company
and/or Seller, will (a) violate or conflict with any term of the Articles of
Incorporation or By-Laws of PSI or the certificate of limited partnership or
limited partnership agreement of PSLP, (b) to Seller’s knowledge, constitute a
material breach or violation of any statute, law, rule or regulation of any
Governmental Body applicable to Seller or either Company, (c) conflict with,
result in a breach of, or constitute a default under, any of the terms,
conditions or provisions of any judgment, order, award, injunction, decree,
contract, lease, agreement, indenture or other instrument to which either
Company or Seller is a party or by which either Company or Seller is bound or
constitute a default thereunder, or (d) result in the creation or imposition of
any Lien on any asset of either Company. Except as disclosed in Schedule 4.18 of
the Disclosure Schedule, no consent, authorization or approval of or filing with
any Governmental Body or agency, or any third party, will be required on the
part of either Company or Seller in connection with the consummation of the
transactions contemplated hereby. To Seller’s knowledge, neither of the
Companies will be required, whether by law, regulation or administrative
practice, to reapply for or refile to obtain any of the Permits presently held
by such Company and required for the operation of its Business as conducted on
the date hereof.

4.19. Compliance with Laws. The representations and warranties contained in this
Section 4.19 relate to matters other than “Environmental Laws,” which are
covered by Section 4.24 below.

(a) Each Company is, and has been at all times during the four (4) year period
prior to the date hereof, in compliance, with all domestic, foreign, federal,
state, local and municipal laws and ordinances and governmental rules and
regulations (including, without limitation, the Pennsylvania Clinical Laboratory
Act) applicable to the Business, except where non-compliance has not been and
would not reasonably be expected to be, individually or in the aggregate,
materially adverse to the Companies or their businesses.

 

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(b) Neither of the Companies nor Seller has received any written notice of
default or violation, nor is either Company in default or violation, with
respect to any judgment, order, writ, injunction, decree, demand or assessment
issued by any Governmental Body relating to any aspect of either Company’s
business, affairs, properties or assets, except where such default or violation
has not been and would not reasonably be expected to be, individually or in the
aggregate, materially adverse to the Companies or their businesses. Neither of
the Companies nor Seller has received any written notice of or been charged
with, and is not, to Seller’s knowledge, under investigation or inquiry with
respect to, any violation of any provision of any federal, state, local,
municipal or other law or administrative rule or regulation, domestic or
foreign, relating to any aspect of either Company’s business, affairs,
properties or assets, which violation has been or would reasonably be expected
to be, individually or in the aggregate, materially adverse to the Companies or
their businesses.

(c) Neither of the Companies nor, to Seller’s knowledge, any of their respective
directors, executives, representatives, agents or employees (i) has used or is
using any corporate funds for any illegal contributions, gifts, entertainment or
other unlawful expenses relating to political activity, (ii) has used or is
using any corporate funds for any direct or indirect unlawful payments to any
foreign or domestic government officials or employees, including any employees
of any government-owned Person, (iii) has violated or is violating any provision
of the Foreign Corrupt Practices Act of 1977, (iv) has established or
maintained, or is maintaining, any unlawful fund of corporate monies or other
properties, or (v) has made any bribe, unlawful rebate, payoff, influence
payment, kickback or other unlawful payment of any nature.

4.20. Litigation. Except as disclosed in Schedule 4.20 of the Disclosure
Schedule, there is no suit, action, arbitration, or legal, administrative or
other proceeding, or governmental investigation or inquiry pending, or to the
knowledge of Seller threatened, by or against (a) either Company or any of its
assets or properties, or (b) with respect to the Business, Seller. Except as
disclosed on Schedule 4.20, there are no outstanding judgments, decisions,
decrees, rulings, injunctions or orders, or arbitration awards against or
affecting (i) either Company or any of its assets or properties, or (ii) with
respect to the Business, Seller.

4.21. Intellectual Property.

(a) Ownership. Except as disclosed in Schedule 4.21(a) of the Disclosure
Schedule, and except for Off-the-Shelf Software and Intellectual Property
licensed by either Company as licensee, each Company owns all rights, title, and
interests in and to the Intellectual Property free and clear of any Liens. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not constitute a breach or violation of
any contract or applicable law relating to the Intellectual Property, or create
on behalf of any third party the right to terminate or modify any license or
other contract relating to any Intellectual Property.

(b) Use. The Intellectual Property includes all proprietary rights necessary for
the operation of the Business as it is currently conducted.

 

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(c) Infringement. The operation of the Business as it is currently conducted and
the use of the Intellectual Property therein does not, to Seller’s knowledge,
infringe the intellectual property or other proprietary or contractual rights of
any Person. Neither Company, in connection with the Business or the use or
ownership of the Intellectual Property, (i) to Seller’s knowledge, has
interfered with, infringed or misappropriated any patent, copyright, trade
secret or other intellectual property, proprietary or contractual right of any
Person, or (ii) has received any written charge, complaint, claim, demand, or
notice alleging any interference, infringement, misappropriation, or violation
(including any claim that either Company must license or refrain from using any
intellectual property of any Person).

(d) Registered Intellectual Property. Schedule 4.21(d) of the Disclosure
Schedule identifies all patents, patent applications, and written invention
disclosures; and all registered and unregistered trademarks, trade names and
service marks, all domain names, registered copyrights works, registered
designs, and any other form of Intellectual Property that is the subject of any
application, registration, filing, certificate, or other document issued by,
filed with, or recorded by any Governmental Body, owned by either Company that
arise from or relate to the Business as it is currently conducted (“Registered
Intellectual Property”).

(e) Without limiting other representations set forth in this Agreement, with
respect to each item of Registered Intellectual Property:

(i) to Seller’s knowledge, except as disclosed in Schedule 4.21(e)(i) of the
Disclosure Schedule and any Outbound Licenses identified in Schedule 4.21(g) of
the Disclosure Schedule, each Company has the exclusive right to use the
Registered Intellectual Property without payment of any royalty or other fee;

(ii) the item is not subject to any outstanding Order. For purposes of this
Section 4.21, “Order” means any order, writ, judgment, decree, consent decree,
injunction, award, settlement agreement, stipulation, ruling or subpoena of any
Governmental Body;

(iii) no claim is pending or, to Seller’s knowledge, threatened which challenges
the legality, validity, enforceability, use, or ownership of the item;

(iv) except as disclosed in Schedule 4.21(e)(iv) of the Disclosure Schedule, all
Registered Intellectual Property is in compliance with formal legal requirements
(including payment of any applicable filing, examination, maintenance and other
fees or Taxes), is valid and enforceable to Seller’s knowledge, and is not
subject to any fees, Taxes or actions coming due within 120 days after the date
of this Agreement; and

(v) all products and services embodying any Registered Intellectual Property
have been marked with appropriate notices, to the extent (if any) required by
law.

(f) Licensed Intellectual Property – Inbound Licenses. Schedule 4.21(f) of the
Disclosure Schedule identifies each Inbound License (as hereinafter defined) to
an

 

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item of Intellectual Property that is exploited in connection with the Business
as it is currently conducted that is owned by a third party (other than
Off-the-Shelf Software) and that provides the Company a valid right to use the
exploited item. Seller has made available to Buyer correct and complete copies
of all such Inbound Licenses (as amended to date). To Seller’s knowledge, each
Company has complied in all material respects with all Inbound Licenses and,
with respect to Licensed Software (as hereinafter defined), has obtained the
appropriate number of licenses for all computers and workstations on which third
party Software is loaded or used. For purposes of this Agreement, “Inbound
License” means any contract that provides either Company the right to use any
item of Intellectual Property owned by a third party that is exploited in
connection with the Business as it is currently conducted. To Seller’s
knowledge, with respect to each Inbound License:

(i) the Inbound License is enforceable and in full force and effect, and such
Inbound License will not be terminable or revocable by reason of the transfer of
the Stock to Buyer hereunder;

(ii) no party to the license, sublicense, agreement or permission has repudiated
or is in default of any provision thereof; and

(iii) neither Company has granted any sublicense or similar right with respect
to the license, sublicense, agreement, or permission.

(g) Licensed Intellectual Property – Outbound Licenses. Schedule 4.21(g) of the
Disclosure Schedule identifies any Owned Software or other Intellectual Property
that is the subject of a license, sublicense, contract, or permission granted by
either Company to any third party or to any Affiliate (“Outbound License”).
Seller has made available to Buyer correct and complete copies of all Outbound
Licenses and filings and communications to or from any Governmental Body
relating to the items listed on Schedule 4.21(g). With respect to each Outbound
License:

(i) to Seller’s knowledge, except as disclosed in Schedule 4.21(g), the Outbound
License is enforceable and in full force and effect and will not be terminable
or revocable by reason of the transfer of the Stock to Buyer hereunder;

(ii) to Seller’s knowledge, except as disclosed in Schedule 4.21(g), no party to
the Outbound License has repudiated or is in default of any provision thereof;

(iii) the underlying item of Intellectual Property is not subject to any
outstanding Order; and

(iv) no claim is pending or, to Seller’s knowledge, threatened with respect to
the Outbound License or that challenges the legality or validity of the
underlying item of Intellectual Property.

(h) Development; Confidentiality. To Seller’s knowledge, except as set forth on
Schedule 4.21(h) of the Disclosure Schedule, no Person other than the Companies
and their past and present employees or consultants (who at the time of the
conception, creation

 

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or development were employees of a Company), have participated in the
conception, creation or development of any Intellectual Property which is owned
by either of the Companies. Seller has made available to Buyer correct and
complete copies of all assignments executed by present or former employees,
contractors, consultants or other agents who, to Seller’s knowledge, developed
or participated in the development of Intellectual Property owned by either of
the Companies. To Seller’s knowledge, all past and present employees and
consultants of the Companies have executed enforceable forms of assignment and
have assigned to the applicable Company all of their rights, title and interests
in and to the Registered Intellectual Property. To Seller’s knowledge, no
employee of either Company has entered into any agreement that restricts or
limits in any way the scope or type of work in which the employee may be engaged
or requires the employee to transfer, assign or disclose information concerning
his or her work to anyone other than a Company.

(i) Software. Schedule 4.21(i) of the Disclosure Schedule lists all Software
that is used in the Companies’ Business as it is currently conducted (other than
Off-the-Shelf Software), and identifies which of such Software is owned by each
Company (“Owned Software”), and which is used pursuant to an Inbound License
(“Licensed Software”). Except as set forth on Schedule 4.21(i), neither Company
has disclosed, delivered, or agreed to disclose or deliver any source code to
any Owned Software to any third party. To Seller’s knowledge, except as set
forth in Schedule 4.21(i), none of the Intellectual Property incorporates or is
dependent on any Open Source Software. For each item of Open Source Software
identified on Schedule 4.21(i) (if any), Schedule 4.21(i) identifies the open
source license agreement pursuant to which the subject Company obtained in the
Open Source Software and describes how the Open Source Software is used. The
eligibility of the Owned Software for protection under copyright law has not
been forfeited to the public domain.

(j) Trade Secrets. With respect to Trade Secrets, Seller has provided Buyer with
all documentation relating to such Trade Secrets that is currently used by
Seller in the operation of the Business. To Seller’s knowledge, such
documentation is current, accurate, and sufficient in detail and content to
allow full and proper use of any such Trade Secrets in the operation of the
Business.

(k) Data Privacy. All personally identifiable information, including but not
limited to health records and personal health information, used by or in the
possession of either Company has been collected, stored, maintained and used in
accordance with all applicable legal requirements including such Company’s and
its customers’ applicable privacy policies.

4.22. Transactions with Affiliates. Except as disclosed in Schedule 4.22 of the
Disclosure Schedule, no asset employed in the Business is owned by, leased from
or leased to Seller, any of Seller’s Affiliates (other than the Companies), or
any officer or director of either Company or any Affiliate of either Company,
other than assets that, individually or in the aggregate, are not material to
the Companies or their businesses.

4.23. Bank Accounts. Schedule 4.23 of the Disclosure Schedule sets forth a
correct and complete list of all bank accounts and safe deposit boxes maintained
by or on behalf of the Companies, with indication of all Persons having
signatory, access or other authority with respect thereto.

 

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4.24. Environmental Matters.

(a) As used in this Agreement: (i) the term “Environmental Laws” means all
federal, state and local laws, statutes, regulations, Permits, orders,
judgments, ordinances, codes, rules and other governmental restrictions,
requirements, including common law, and any applicable foreign analogues
thereto, relating to the protection of health, safety, the environment and
natural resources, including those governing the handling, use, generation,
transportation, processing, formulation, packaging, labeling, treatment,
storage, disposal, Release (defined below) or threatened Release of Hazardous
Substances (defined below), including but not limited to the Clean Air Act, 42
U.S.C. 7401 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. 1251 et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. 1471 et seq.; the
Toxic Substances Control Act, 15 U.S.C. 2601 et seq.; the Resource Conservation
and Recovery Act, 42 U.S.C. 6901 et seq.; the National Environmental Policy Act,
42 U.S.C. 4321 et seq.; the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. 9601 et seq.; (“CERCLA”); the Occupational Safety
and Health Act, 29 U.S.C. 650 et seq.; and similar state and foreign laws, each
as amended and all regulations promulgated thereunder, now or at any time
hereafter in effect; (ii) the term “Hazardous Substances” shall mean and
include, without limitation, all radioactive materials, asbestos and
asbestos-containing materials, polychlorinated biphenyls (“PCBs”), petroleum
products and by-products, all solid, semi-solid, liquid or gaseous substances
which are toxic, ignitable, corrosive, carcinogenic or otherwise dangerous to
human, plant or animal health, and all substances defined or listed as
“hazardous substances”, “toxic substances”, “hazardous waste”, “toxic
pollutants”, “pollutants”, and “contaminants”, in, or otherwise regulated under
any Environmental Law; (iii) the terms “respond,” “response” and all variations
and derivatives thereof shall have the meanings ascribed to them under
Environmental Laws; and (iv) the term “Release” shall have the meaning given to
it in CERCLA. For all purposes of this Section 4.24, when reference is made to a
property or real estate leased, occupied or used by a Company but which is not
owned by the Company, such reference is only to the portion of the subject real
property actually leased or occupied by such Company and only for the period of
such lease or occupancy.

(b) The Companies are in compliance and have complied with all Environmental
Laws applicable to the Business, except where any non-compliance has not been
and would not reasonably be expected to be (individually or in the aggregate)
material to the Companies or their businesses; and Seller has no knowledge of
any events, incidents, practices, conditions or circumstances that would
reasonably be expected to give rise to any material liability to the Companies,
or any Person whose liability either Company has retained or assumed either by
contract or by operation of law (“Related Person”) under any Environmental Laws,
including liabilities relating to the Business and any property which the
Companies formerly or now own, lease, occupy or use. Neither Seller nor either
of the Companies has received any written request for information, demand,
administrative inquiry, notice of claim, notice of intent to bring a “citizens
suit” under any Environmental Law, informal complaint or demand or other notice
which in any instance (i) asserts or alleges any violation of applicable
Environmental Laws on the part of either Company, (ii) asserts or alleges that
either Company or any Related Person is required to clean up, remove or
otherwise take remedial or other response

 

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action due to the Release or threatened Release of any Hazardous Substances, or
(iii) asserts or alleges that either Company or any Related Person is required
to pay all or any portion of the costs of any past, present or future cleanup,
removal or remedial or other response action which arises out of or is related
to a Release or threatened Release of any Hazardous Substances. Neither of the
Companies is subject to any judgment, decree, order or citation related to or
arising out of any Environmental Laws. To Seller’s knowledge, neither of the
Companies or any Related Person has been named or listed as a potentially
responsible party by any Governmental Body in any matter arising under any
Environmental Laws. To Seller’s knowledge, no solid or hazardous waste
transporter or owner of any treatment, storage or disposal facility that, in
either case, has been used by either Company, has any liability involving the
transportation, treatment, storage or disposal of solid or hazardous wastes of
either Company. Neither of the Companies is a participant in, nor does Seller
have knowledge of, any governmental investigation involving the Facility or any
other real estate now or heretofore owned, operated or leased by either Company.

(c) Neither of the Companies nor, to Seller’s knowledge, any other Person, has
caused or permitted or is causing or permitting any Hazardous Substances to be
stored, deposited, treated, recycled or disposed of on, under or at any property
formerly or now owned, leased, occupied or used by either Company except in
material compliance with all Environmental Laws and which would not reasonably
be expected to require cleanup, removal or other remedial action under any
applicable Environmental Laws.

(d) To Seller’s knowledge, there is no hazardous waste treatment, storage or
disposal facility, landfill, surface impoundment, underground storage tank, or
underground injection well (as those terms are defined by Environmental Laws)
located at any of the real property now or formerly owned, leased, occupied or
used by either Company.

(e) Schedule 4.24(e) of the Disclosure Schedule sets forth a correct and
complete list of all reports of environmental audits, investigations or reports
that are in the possession, custody or control of Seller or either Company with
respect to the Business or property now or previously owned, leased, occupied or
used by the Companies. Seller has provided or made available to Buyer the
documents listed in Schedule 4.24(e) and all material documents, records and
information known to Seller, whether prepared by Seller or by others, concerning
any environmental or health and safety matter relevant to either Company or to
any property now or formerly owned, leased, occupied or used by either Company,
including without limitation, environmental risk assessments, site assessments,
documentation regarding off-site disposal of Hazardous Substances, and reports
and correspondence related to environmental or health and safety matters.

(f) Except for the representations and warranties in Sections 4.14 (Permits and
Licenses) and 4.20 (Litigation), the representations and warranties of this
Section 4.24 shall be the exclusive representations and warranties relating to
matters under Environmental Laws.

 

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4.25. Warranties.

(a) No service or product provided, manufactured, sold, leased, licensed or
delivered by either Company is subject to any guaranty, warranty, right of
return, right of credit or other indemnity other than the applicable standard
terms and conditions of sale or lease of such Company, which are set forth in
Schedule 4.25(a) of the Disclosure Schedule.

(b) The reserve for warranty claims set forth on the October 31, 2007 Financial
Statements and any reserves for warranty claims created by the Companies in the
ordinary course of business subsequent to October 31, 2007 were calculated in
accordance with GAAP and Regulation S-X consistently applied.

(c) Except as disclosed in Schedule 4.15, neither Company has any liability to
any customer to provide the customer with any other services or products of
either Company on pre-negotiated terms at prices below the Companies’ published
price (if any) for such services or products. Neither Company has any liability
to any customer in connection with any service provided or product manufactured,
sold, leased or delivered by such Company other than those arising or which may
arise in the ordinary course of business.

4.26. Prepayments, Prebilled Invoices and Deposits.

(a) Schedule 4.26(a) of the Disclosure Schedule sets forth (i) all prepayments,
prebilled invoices and deposits that have been received by the Companies as of
the date of this Agreement from customers for products to be shipped, or
services to be performed, after the Closing Date, and (ii) with respect to each
such prepayment, prebilled invoice or deposit, (A) the party and contract
credited, (B) the date received or invoiced, (C) the products and/or services to
be delivered and (D) the conditions for the return of such prepayment, prebilled
invoice or deposit. All such prepayments, prebilled invoices and deposits are
properly accrued for on the October 31, 2007 Financial Statements, and will be
properly accrued for in Net Working Capital as of the Closing Date, in
accordance with GAAP applied on a consistent basis with the past practice of the
Companies.

(b) Schedule 4.26(b) of the Disclosure Schedule sets forth (i) all prepayments,
prebilled invoices and deposits that have been made or paid by the Companies as
of the date of this Agreement for products to be purchased, services to be
performed or other benefits to be received after the Closing Date, and (ii) with
respect to each such prepayment, prebilled invoice or deposit, (A) the party to
whom such prepayment, prebilled invoice or deposit was made or paid, (B) the
date made or paid, (C) the products and/or services to be delivered and (D) the
conditions for the return of such prepayment, prebilled invoice or deposit. All
such prepayments, prebilled invoices and deposits are properly accrued for on
the October 31, 2007 Financial Statements, and will be properly accrued for in
Net Working Capital as of the Closing Date, in accordance with GAAP applied on a
consistent basis with the past practice of the Companies.

4.27. FDA Regulatory Compliance.

(a) The Companies are, and have been at all times during the four (4) year
period prior to the date hereof, in compliance with all applicable statutes,
rules, regulations, standards, guidelines, policies, and orders administered or
issued by FDA (“FDA Laws”) or any comparable Governmental Body, except where
non-compliance has not been and would not be (individually or in the aggregate)
material to the Companies or their businesses.

 

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(b) To Seller’s knowledge, the Companies’ genetic screening and diagnostic
testing activities are currently subject to the FDA’s exercise of enforcement
discretion with respect to so-called “home brew” tests developed and utilized in
clinical laboratories certified pursuant to the Clinical Laboratory Improvement
Amendments of 1988 (“CLIA”), and, therefore, are not subject to active FDA
regulation as of the date of this Agreement.

(c) The Companies have had no written communications with the FDA regarding
regulatory non-compliance of their businesses, and are not subject to (i) any
written notice or communication from the FDA or from any comparable Governmental
Body alleging non-compliance with any FDA Laws, or (ii) any FDA inspection, FDA
warning letter, FDA notice of violation letter, or response or commitment made
to or with the FDA or with any comparable Governmental Body, and, to Seller’s
knowledge, no such proceedings have been initiated.

4.28. Health Care Regulatory Compliance.

(a) Except as disclosed in Schedule 4.28(a) of the Disclosure Schedule, the
Companies are, and have been at all times during the four (4) year period prior
to the date hereof, in compliance with all applicable provisions of the civil
False Claims Act (31 U.S.C. § 3729 et seq.), criminal false claims statutes
(e.g., 18 U.S.C. §§ 287 and 1001), the Program Fraud Civil Remedies Act (31
U.S.C. § 3801 et seq.), the federal Standards for Privacy of Individually
Identifiable Health Information (45 C.F.R. Parts 160 and 164), CLIA (42 U.S.C. §
263a, as amended, et seq.) and other relevant federal and state health care laws
and the related regulations (collectively, “Government Health Care Laws”),
except where non-compliance has not been and would not reasonably be expected to
be (individually or in the aggregate) material to the Companies or their
businesses.

(b) The Companies are, and have been at all times during the four (4) year
period prior to the date hereof, in compliance with applicable requirements for
laboratory licensure, accreditation, and certification requirements under
applicable federal, state or foreign laws, except where non-compliance has not
been and would not reasonably be expected to be (individually or in the
aggregate) material to the Companies or their businesses.

(c) Neither of the Companies nor, to Seller’s knowledge, any of their respective
officers, directors, employees, agents or consultants, or any other Person
acting on behalf of either of the Companies: (i) is now, to Seller’s knowledge,
under investigation with respect to a violation of any Government Health Care
Laws; (ii) has been debarred, excluded or suspended from federal procurement or
non-procurement programs; or (iii) to the knowledge of Seller, is the target or
subject of any current or potential investigation relating to any Government
Health Care Law-related offense.

(d) Neither the Companies nor, to Seller’s knowledge, any of their respective
officers, directors, employees, agents, consultants or any other Person acting
on behalf of either of the Companies has, on behalf of either Company, engaged
in any activity that

 

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knowingly and willfully violates Government Health Care Laws, including, but not
limited to, violation of federal or state false claims act laws, anti-kickback
laws, or any activity that violates any state or federal law relating to
prohibiting fraudulent, abusive or unlawful practices connected in any way with
the provision of health care items or services or the billing for such items or
services.

(e) Except as disclosed on Schedule 4.28(a), to the knowledge of Seller, no
Person has filed or has threatened to file against either of the Companies an
action under any federal or state whistleblower statute, including without
limitation, the False Claims Act (31 U.S.C. § 3729 et seq.).

(f) The Companies are subject to a Corporate Integrity Agreement (a “CIA”) for a
term of five (5) years from the effective date (September 20, 2006, unless
otherwise specified) between Seller and the Office of the Inspector General of
the United States Department of Health and Human Services to promote compliance
with the statutes, regulations and written directives of Medicare, Medicaid,
TRICARE, and other Federal Health Care Programs. Contemporaneously with the CIA,
Seller entered into settlement agreements with certain states (“State Settlement
Agreements”), and a settlement agreement, effective on or about September 21,
2006, with the United States of America and acting through the United States
Department of Justice (“Federal Settlement Agreement”) pursuant to a qui tam
action in the United States District Court for the District of Maryland
captioned United States ex rel. Daniel M. Hall, MD v. Pediatrix Medical Group,
Inc., Civil No. L-02-1805. To the extent applicable, the Companies and their
respective officers, directors, employees, agents, consultants, and any Person
acting on behalf of any of them, have been in compliance in all material
respects with their respective requirements at all times during the term of the
CIA, the State Settlement Agreements, and the Federal Settlement Agreement.
Seller represents and warrants that the terms of the CIA shall not apply to
Buyer or any of its Affiliates as a result of or in connection with the
consummation of the transactions contemplated by this Agreement.

4.29. Government Contracts.

(a) Neither Company has been suspended or debarred from bidding on contracts or
subcontracts with any Governmental Body, and no such suspension or debarment has
been initiated or, to the knowledge of Seller, threatened. Neither Company has
been or is now being audited or investigated by the United States Government
Accountability Office, the United States Department of Defense or any of its
agencies, the Defense Contract Audit Agency, the contracting or auditing
function of any Governmental Body with which it is contracting or to which it is
otherwise subject, the United States Department of Justice, the Office of the
Inspector General of the United States or any department or agency of the United
States, any state enforcement agency, or any prime contractor with a
Governmental Body; nor, to the knowledge of Seller, has any such audit or
investigation been threatened. Neither of the Companies has received written
notice of (i) the suspension or debarment of either Company from bidding on
contracts or subcontracts with any Governmental Body, or (ii) any claim
(including any claim for return of funds to any Governmental Body) pursuant to
an audit or investigation by any of the entities named in the foregoing
sentence.

 

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(b) Neither of the Companies has received written notice of any of the following
with respect to any of the Companies’ contracts or subcontracts with any
Governmental Body: (i) a Termination for Default (as provided in 48 C.F.R. Ch.1
§52.249-8, 52.249-9 or similar sections), or (ii) a Termination for Convenience
(as provided in 48 C.F.R. Ch.1 §52.241-1, 52.249-2 or similar sections), or a
Stop Work Order (as provided in 48 C.F.R. Ch.1 §52.212-13 or similar sections);
and Seller has no knowledge that funding may not be provided under any contract
or subcontract with any Governmental Body in the upcoming federal fiscal year.

4.30. Disclosure. No representation or warranty by Seller contained in this
Agreement, and no statement contained in the Disclosure Schedule or in the
certificate delivered pursuant to Section 8.3 contains or will contain any
untrue statement of a material fact or omits or will omit to state any material
fact necessary, in light of the circumstances under which it was or will be
made, in order to make the statements herein or therein not misleading.

 

  5. REPRESENTATIONS AND WARRANTIES OF BUYER.

Buyer hereby represents and warrants to Seller that the statements contained in
this Section 5 are true and correct.

5.1. Organization, Good Standing and Qualification. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, and has all necessary corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder, and to consummate the transactions contemplated hereby.

5.2. Authorization of Agreement. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby by Buyer
have been duly and validly authorized by the Board of Directors of Buyer; and
Buyer has the full legal right, power and authority to execute and deliver this
Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby. No further corporate authorization is
necessary on the part of Buyer to consummate the transactions contemplated
hereby.

5.3. Valid and Binding Agreement. This Agreement constitutes the legal, valid
and binding obligation of Buyer, enforceable against Buyer in accordance with
its terms, except to the extent limited by bankruptcy, insolvency,
reorganization and other laws affecting creditors’ rights generally, and except
that the remedy of specific performance or similar equitable relief is available
only at the discretion of the entity before which enforcement is sought.

5.4. No Breach of Statute or Contract. Neither the execution and delivery of
this Agreement by Buyer, nor compliance with the terms and provisions of this
Agreement on the part of Buyer, will, except as would not prevent or materially
delay the Closing and the consummation of the transactions contemplated hereby,
or result in the right of any Person other than Seller or any of its Affiliates
to require post-Closing rescission of the transactions contemplated hereby:
(a) violate the Certificate of Incorporation or By-Laws of Buyer, or any

 

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statute or regulation of any Governmental Body, which affects and is or would
reasonably be expected to be, individually or in the aggregate, material to
Buyer; (b) require the issuance to Buyer of any authorization, license, consent
or approval of any Governmental Body; or (c) conflict with or result in a breach
of any of the terms, conditions or provisions of any judgment, order,
injunction, decree, note, indenture, loan agreement or other agreement or
instrument to which Buyer is a party, or by which Buyer is bound, or constitute
a default thereunder. Except for any required pre-merger notification under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR
Act”), no consent, authorization or approval of or filing with any Governmental
Body, or any third party, will be required on the part of Buyer in connection
with the consummation of the transactions contemplated hereby.

5.5. Purchase of Stock for Investment. Buyer will be acquiring ownership of the
Stock for its own account, for investment purposes only, and not with a view to
the resale or distribution thereof in violation of any applicable securities
laws.

 

  6. SELLER’S OBLIGATIONS BEFORE THE CLOSING DATE.

Seller covenants and agrees that, from the date hereof until the Closing Date:

6.1. Access to Information.

(a) Each Company and Seller shall permit Buyer and its counsel, accountants and
other representatives, upon reasonable advance notice to the subject Company,
during normal business hours and without undue disruption of the business of
such Company, to have reasonable access to all properties, books, accounts,
records, contracts, documents and information relating to such Company (provided
that such access to documents may be provided, as and to the extent appropriate,
through a virtual data room). Buyer and its representatives shall also be
permitted to freely consult with each Company’s counsel and officers concerning
the business of such Company, and to conduct interviews with key employees of
each Company, subject to such procedures as may reasonably be imposed by Seller.
Seller shall, if requested by Buyer, introduce Buyer to customers and suppliers
of the Companies for the purpose of facilitating the post-Closing integration of
the Companies and its business into that of Buyer.

(b) Within fifteen (15) days after the end of each month for each month ending
after the execution and delivery of this Agreement, Seller shall furnish to
Buyer an unaudited combined income statement for such month and an unaudited
combined balance sheet as of the end of such month, prepared on a basis
consistent with the Financial Statements. Such financial statements shall
present fairly the combined financial condition and results of operations of the
Companies as of the dates thereof and for the periods covered thereby, and shall
be consistent with the books and records of the Companies.

6.2. Conduct of Business in Normal Course. Each Company shall carry on its
business activities in the ordinary course of business and in substantially the
same manner as heretofore conducted, shall comply in all material respects with
applicable law, and shall not make or institute any unusual or novel methods of
service, sale, purchase, lease, management, accounting or operation that will
vary materially from those methods used by such Company as of the date hereof,
without in each instance obtaining the prior written consent of Buyer.

 

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6.3. Preservation of Business and Relationships. Each Company shall, without
making or incurring any unusual commitments or expenditures, use its reasonable
efforts to preserve its business organization intact and to preserve its present
relationships with referral sources, clients, customers, suppliers and others
having business relationships with it.

6.4. Maintenance of Insurance. Each Company shall continue to carry its existing
insurance, to the extent obtainable upon reasonable terms.

6.5. Corporate Matters. Neither of the Companies shall, without the prior
written consent of Buyer:

(a) amend its Articles of Incorporation or By-Laws or Certificate of Limited
Partnership or Limited Partnership Agreement (as applicable) (provided that this
Section 6.5(a) shall not limit either Company from taking the actions described
in Section 6.8);

(b) issue any shares of its capital stock, any partnership interests or any
other securities of either Company;

(c) issue or create any warrants, obligations, subscriptions, options,
convertible Stock or other commitments under which any additional shares of its
capital stock or additional partnership interests might be directly or
indirectly issued;

(d) materially amend, cancel, modify, or waive any material rights or take any
action that would constitute a material breach or default under any Material
Contract or, except in the ordinary course of business, enter into or modify any
new agreement that, if existing on the date of this Agreement, would constitute
a Material Contract;

(e) except for salary increases and year-end bonuses disclosed in Schedule
6.5(e) of the Disclosure Schedule, pay, grant or authorize any salary increases
or bonuses to any officer or employee, except in the ordinary course of business
and consistent with past practice (including annual salary increases which took
effect on October 1, 2007), and except for bonuses paid to the employees listed
on Schedule 6.5(e), pay any bonus to any director, materially modify the
employment terms of its directors, officers or employees, generally or
individually, hire any new officers or (except in the ordinary course of
business) any new employees or consultants or enter into any employment
agreement, consulting agreement or management agreement or enter into, adopt or
amend in any material respect any Employee Plan;

(f) except pursuant to commitments in effect on the date hereof which have been
disclosed to Buyer in writing, or as otherwise set forth in Schedule 6.5(f) of
the Disclosure Schedule, make any capital expenditure(s) or commitment(s),
whether by means of purchase, lease or otherwise, or any operating lease
commitment(s), in excess of $50,000 in the aggregate;

(g) sell, assign or dispose of any capital asset(s) with a net book value in
excess of $10,000 as to any one item, or $50,000 in the aggregate as to all
items for both Companies or acquire any assets or property (including any shares
or other equity interests in any other corporation, partnership, association or
other business organization or division thereof), other than purchases in the
ordinary course of business;

 

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(h) materially change its method of collection of accounts or notes receivable,
or prepay any of its obligations or liabilities, other than prepayments to take
advantage of trade discounts not otherwise inconsistent with or in excess of
historical prepayment practices;

(i) split, combine or reclassify any shares of its capital stock or pay any
dividends or distributions to Seller or any of its Affiliates; provided, that
(i) Seller may continue to sweep and retain the Companies’ cash balances on a
daily basis, and (ii) PSI and PSLP may transfer to Seller or any of its
Affiliates (A) all inventory of products listed on Schedule 6.5(i)(A) of the
Disclosure Schedule as of the Closing Date, and (B) the pending research and
development activities, patent applications and license agreements listed in
Schedule 6.5(i)(B) of the Disclosure Schedule;

(j) incur any indebtedness for money borrowed (including obligations in respect
of capital leases) except from Seller (which indebtedness from Seller shall be
discharged in full prior to Closing), or assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other Person, except for endorsements of negotiable
instruments in the ordinary course of business; or make any loans, advances or
capital contributions to, or investments in, any other Person (other than cash
payments to Seller);

(k) subject any of its assets or properties, including Intellectual Property, to
any Liens, other than Permitted Liens;

(l) forgive any liability or indebtedness owed to it by Seller or any of its
Affiliates (except to the extent of any set-off against any liability or
indebtedness owed by either of the Companies to Seller or any of its
Affiliates);

(m) sell, assign, transfer, license or sublicense any Intellectual Property;

(n) change its accounting methods, principles or practices, except insofar as
may be required by a generally applicable change in GAAP;

(o) make or change any Tax election, change an annual accounting period, enter
into any closing agreement, waive or extend any statute of limitation with
respect to Taxes, or take any other similar action relating to the filing of any
Tax Return or the payment of any Tax, or file any amended return, settle or
compromise any Tax liability, claim or assessment with regard to the Companies
that would have a material adverse impact on Buyer and its subsidiaries
(including, following the Closing, the Companies), taken together;

(p) institute or settle any action, suit, proceeding, claim, complaint, hearing,
arbitration, inquiry or investigation before any Governmental Body or before any
arbitrator, except for collection actions in the ordinary course of business
consistent with past practice, and except for settlements that (i) impose only
monetary payment obligations that are

 

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paid in full prior to the Closing or are accrued for as current liabilities
(whether or not same constitute current liabilities in accordance with GAAP) in
both the Preliminary Closing Net Working Capital Statement and in the final
calculation of Net Working Capital as of the Closing Date pursuant to
Section 3.2 above, and (ii) that include a full release of the Companies for all
liabilities arising from, related to or otherwise in connection with the action,
suit, proceeding, claim, complaint, hearing, arbitration, inquiry or
investigation settled and the subject matter thereof (provided that the Buyer
may not unreasonably withhold, condition or delay its consent to any other
settlement covered by this Section 6.5(p));

(q) take any action or fail to take any action permitted by this Agreement with
the knowledge that such action or failure to take action would result in (i) any
of the representations and warranties of Seller set forth in this Agreement
becoming untrue in any material respect, or (ii) any of the conditions to the
Closing set forth in Section 8 not being satisfied; or

(r) agree in writing or otherwise to take any of the foregoing actions.

In addition, prior to the Closing, Seller shall cause each of the Companies to
(A) accept customer orders in the ordinary course of business, and (B) continue
to make regularly scheduled payments pursuant to the terms of any contract with
respect to any indebtedness of the Companies in existence as of the date of this
Agreement.

6.6. Notice of Breaches. Prior to the Closing, Seller shall promptly deliver to
Buyer supplemental information concerning events or circumstances occurring
subsequent to the date hereof which would render any representation, warranty or
statement of Seller in this Agreement or the Disclosure Schedule inaccurate or
incomplete in any material respect at any time after the date of this Agreement
until the Closing if such representation, warranty or statement were made at
such time. No such supplemental information shall be deemed to avoid or cure any
misrepresentation or breach of warranty or constitute an amendment of any
representation, warranty or statement in this Agreement or the Disclosure
Schedule.

6.7 FIRPTA. At or prior to the Closing, Seller shall deliver to Buyer a
certification that Seller is not a foreign person in accordance with the
Treasury Regulations under Section 1445 of the Code. If Buyer does not receive
either the notices or the certifications described above on or before the
Closing Date, Buyer shall be permitted to withhold from the payments to be made
pursuant to this Agreement any required withholding Tax under Section 1445 of
the Code.

6.8 Name Changes. Prior to the Closing, Seller shall take all actions necessary
(including, without limitation, all corporate and limited partnership action,
action of the board of directors or similar governing body, action of equity
holders and execution by officers or other authorized persons) to allow for the
filing by Seller (pursuant to the authorization described in Section 9.7) with
the Secretary of the Commonwealth of Pennsylvania of amendments of the
certificate of incorporation and certificate of limited partnership (as
applicable) of the Companies to make no change other than to change the legal
name of PSI to “PerkinElmer Genetics, Inc.” and the legal name of PSLP to
“PerkinElmer Genetics, L.P.” (such amendments, the “Name Change Amendments”).

 

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  7. ADDITIONAL AGREEMENTS OF THE PARTIES.

7.1. Confidentiality. Notwithstanding anything to the contrary contained in this
Agreement, and subject only to any disclosure requirements which may be imposed
upon either party under applicable stock exchange rules or state or federal
securities or antitrust laws, it is expressly understood and agreed by Buyer and
Seller that prior to Closing (a) this Agreement, the Disclosure Schedule and the
conversations, negotiations and transactions relating hereto and/or contemplated
hereby, and (b) all non-public financial information, business records and other
non-public information concerning Seller, the Companies or Buyer which any of
Buyer, the Companies and Seller or their respective representatives has received
or may hereafter receive, shall be maintained in the strictest confidence by
Buyer, the Companies and Seller and their respective representatives, and shall
not be disclosed to any Person that is not associated or affiliated with any of
Buyer, the Companies and Seller and involved in the transactions contemplated
hereby, without the prior written approval of Seller or Buyer, as applicable.
Prior to Closing, neither party shall issue any press release or other public
announcement regarding the transactions contemplated hereby unless required by
applicable stock exchange rules or state or federal securities laws without the
prior approval of the other party (such approval not to be unreasonably withheld
or delayed). In the event that the transactions contemplated hereby shall not be
consummated for any reason, each of Buyer, the Companies and Seller covenants
and agrees that neither they nor their respective representatives shall retain
any documents, lists or other writings which they may have received or obtained
in connection herewith or any documents incorporating any of the information
contained in any of the same (all of which, and all copies thereof in the
possession or control of themselves or their representatives, shall be returned
to the original source of the material at issue or destroyed, at the election of
the recipient). This Section 7.1 shall be an addition to the agreements of the
parties contained in that certain Confidentiality Agreement between the Parties
dated as of December 28, 2005 and as amended by agreement dated December 15,
2006 (collectively, the “Confidentiality Agreement”).

7.2. Consents and Approvals and HSR Act.

(a) Each party shall use its reasonable best efforts to obtain, at its expense,
all waivers, permits, consents, approvals or other authorizations from
Governmental Bodies, and to effect all registrations, filings and notices with
or to Governmental Bodies, as may be required for such party to consummate the
transactions contemplated by this Agreement and to otherwise comply with all
applicable laws and regulations in connection with the consummation of the
transactions contemplated by this Agreement. In the event that pre-merger
notification under the HSR Act is required in respect of the transactions
contemplated by this Agreement, the parties shall cooperate with one another so
as to effect simultaneous filings by the parties, with each party requesting, in
its filing, early termination of the applicable waiting period. In the event of
any request for additional information by the Department of Justice or the
Federal Trade Commission, the subject party shall promptly notify the other
party of the particulars thereof and shall provide the requested information.
Notwithstanding anything to the contrary in this Agreement, Buyer shall not be
obligated to sell or dispose of or hold separately (through a trust or
otherwise) any assets or businesses of Buyer, any of its Affiliates, or the
Companies. All filing fees payable in respect of such HSR Act filings shall be
divided equally between Buyer and Seller.

 

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(b) Seller shall use its reasonable best efforts to obtain, at its expense, all
such waivers, consents or approvals from third parties, and to give all such
notices to third parties, as are listed or required to be listed in the
Disclosure Schedule.

7.3. Non-Interference. Each party shall use all reasonable efforts to perform
its respective pre-Closing covenants hereunder and to fulfill the conditions
precedent provided in this Agreement (to the extent within such party’s
control). Neither of the parties shall cause to occur any act, event or
condition which would cause any of their respective representations and
warranties made in this Agreement to be or become untrue or incorrect in any
material respect, or would cause the conditions to the obligations of the
parties to consummate the transactions contemplated by this Agreement set forth
in Sections 8 and 9 below not to be satisfied.

7.4. Additional Agreements.

(a) The parties shall work together in good faith to negotiate, execute and
deliver the following agreements: (i) a non-exclusive, non-assignable (except by
operation of law), non-sublicenseable, perpetual, worldwide, royalty-free
license by Seller to the Companies, Buyer and Buyer’s subsidiaries to utilize in
the Business from and after the Closing Date, in a manner generally consistent
with the use thereof in the Business on the date of this Agreement, all
Intellectual Property owned by Seller and/or its subsidiaries relating to the
detection of thyroxine (T4) by mass spectroscopy, including, without limitation,
the Intellectual Property specified on Schedule 7.4(a)(i) of the Disclosure
Schedule, (ii) if determined to be necessary or desirable, a non-exclusive,
non-assignable (except by operation of law), non-sublicenseable, perpetual,
worldwide, royalty-free license by the applicable Companies to the Seller and
its subsidiaries to utilize from and after the Closing Date, in a manner
generally consistent with the use thereof by the Seller and its subsidiaries on
the date of this Agreement, all Intellectual Property owned by the Companies as
of the Closing relating to the preparation and administration of total
parenteral nutrition (TPN) (as defined below), including, without limitation,
the Intellectual Property specified on Schedule 7.4(a)(ii) of the Disclosure
Schedule, and (iii) an agreement by PSI to provide services to Seller and its
subsidiaries from and after the Closing Date for (A) the SoundGene Test (as
defined below), and (B) the services heretofore provided by PSI to Obstetrix
Medical Group, Inc. pursuant to the clinical trial agreements and investigative
site agreements listed in Schedule 4.22 of the Disclosure Schedule, in each case
in a manner generally consistent with such services as performed by PSI on the
date of this Agreement, at a pricing structure to be mutually agreed by Buyer
and Seller.

(b) The parties agree that if the parties have worked together in good faith as
required by Section 7.4(a), the failure to have completed the negotiation or
execution and delivery of any agreements specified in Section 7.4(a) shall not
be a condition to Closing, and that if the Closing occurs prior to the
completion of such negotiation, execution and delivery of any such agreements,
the parties agree to continue following the Closing to work together in good
faith as provided by Section 7.4(a).

(c) As used in this Agreement, “total parenteral nutrition” or “TPN” means the
practice of feeding a person by injection (including, without limitation,
intravenously).

 

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(d) As used in this Agreement, “SoundGene Test” means a screening test that
identifies the genetic and/or viral causes of hearing loss specified on Schedule
7.4(d) of the Disclosure Schedule.

7.5. Certain Payments. Seller shall pay or cause to be paid, on a prompt basis,
through the Closing Date, all amounts described in item (i) and items
(iii) through (vii) of item 6 of Schedule 1.7 of the Disclosure Schedule, in
respect of periods through the Closing Date.

 

  8. CONDITIONS PRECEDENT TO BUYER’S PERFORMANCE.

The obligations of Buyer to consummate the transactions contemplated by this
Agreement are further subject to the satisfaction, at or before the Closing
Date, of all the following conditions, any one or more of which may be waived in
writing by Buyer:

8.1. Accuracy of Representations and Warranties. All representations and
warranties made by Seller in this Agreement that are qualified as to materiality
and the representations made by Seller in Section 4.1 shall be true and correct
in all respects, and all other representations and warranties made by Seller in
this Agreement shall be true and correct in all material respects, on and as of
the Closing Date as though such representations and warranties were made on and
as of that date.

8.2. Performance. Seller shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by Seller on or before the
Closing Date, including, without limitation, all covenants and agreements
described in Sections 6 and 7 of this Agreement.

8.3. Certification. Buyer shall have received a certificate, dated the Closing
Date, signed by a duly authorized officer of Seller, certifying, in such detail
as Buyer and its counsel may reasonably request, that the conditions specified
in Sections 8.1 and 8.2 above have been fulfilled.

8.4. Absence of Litigation. Except as disclosed in Schedule 4.20, no action,
suit or proceeding by or before any court or any Governmental Body, against
Buyer, Seller or either Company or pertaining to the transactions contemplated
by this Agreement or their consummation, shall be pending or threatened in
writing on the Closing Date wherein an unfavorable judgment, order, decree,
stipulation or injunction would (a) prevent consummation of the transactions
contemplated by this Agreement, (b) cause the transactions contemplated by this
Agreement to be rescinded following consummation, or (c) have, individually or
in the aggregate, a Material Adverse Effect or impair the ability of Seller to
transfer and deliver to Buyer all of the Stock free and clear of all Liens
whatsoever (except any restrictions which may be created by operation of state
or federal securities laws).

8.5. Consents; Releases. All necessary waivers, permits, consents, approvals or
other authorizations set forth on Schedule 8.5 of the Disclosure Schedule and
under any applicable U.S. or foreign antitrust laws and all other waivers,
permits, consents, approvals or other authorizations, registrations, filings and
notices, which are necessary for the consummation of the transactions
contemplated by this Agreement or are material to the conduct of the

 

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Companies’ businesses, shall have been obtained and true and complete copies
thereof delivered to Buyer; provided, however, that with respect to filings
under the HSR Act, this condition shall be deemed satisfied upon the expiration
of the applicable waiting period without governmental action or upon official
notification of the early termination of such waiting period. All Liens on the
Securities and all Liens on either Company’s assets securing indebtedness for
money borrowed of Seller or the Companies (as listed on Schedule 4.9) shall have
been terminated and released, and all Tax-sharing and Tax indemnity agreements
between Seller and the Companies shall have been terminated; and evidence
thereof, in form and substance reasonably satisfactory to Buyer, shall have been
delivered to Buyer.

8.6. Settlement of Affiliate Obligations. All debts, liabilities and other
monetary obligations owed (a) to either Company on the Closing Date by Seller
and/or any of Seller’s Affiliates, and (b) by either Company on the Closing Date
to Seller and/or any of Seller’s Affiliates shall have been fully satisfied such
that no such Affiliate obligations of either Company, the Seller or the Seller’s
Affiliates shall be outstanding on and after the Closing Date.

8.7. No Material Adverse Change. There shall not have occurred any change,
event, circumstance, development or condition which, individually or taken
together with all other changes, events, circumstances, developments and
conditions, has had, or could reasonably be expected in the future to have, a
Material Adverse Effect, except for matters resulting from adverse changes in
economic conditions affecting businesses and economic conditions in the United
States generally that do no have a disproportionate impact on the Companies.

8.8. Resolutions. Buyer shall have received certified resolutions of the Board
of Directors of Seller in form reasonably satisfactory to counsel for Buyer,
authorizing Seller’s execution, delivery and performance of this Agreement and
all other actions to be taken by Seller hereunder.

8.9. Transition Services Agreement. Buyer and PSI shall have received a
counterpart of the Transition Services Agreement in the form attached hereto as
Exhibit A (the “Transition Services Agreement”) executed by Seller.

8.10. Proceedings and Instruments Satisfactory. All proceedings, corporate or
other, to be taken in connection with the transactions contemplated by this
Agreement, and all documents incidental thereto, shall be reasonably
satisfactory in form and substance to Buyer and its counsel. Seller shall have
submitted to Buyer or its representatives for examination the originals or true
and correct copies of all records and documents relating to the business and
affairs of the Companies which Buyer may have requested in connection with said
transactions.

 

  9. CONDITIONS PRECEDENT TO SELLER’S PERFORMANCE.

The obligations of Seller to consummate the transactions contemplated by this
Agreement are further subject to the satisfaction, at or before the Closing
Date, of all of the following conditions, any one or more of which may be waived
in writing by Seller:

9.1. Accuracy of Representations and Warranties. All representations and
warranties made by Buyer in this Agreement that are qualified as to materiality
shall be true and

 

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correct in all respects, and all other representations and warranties made by
Buyer in this Agreement shall be true and correct in all material respects on
and as of the Closing Date as though such representations and warranties were
made on and as of that date , in each case, other than any failure of a
representation or warranty to be true and correct that would not (a) prevent or
materially delay the Closing and the consummation of the transactions
contemplated hereby, or (b) result in the right of any Person other than Seller
or any of its Affiliates to require post-Closing rescission of the transactions
contemplated hereby.

9.2. Performance. Buyer shall have performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by Buyer on or before the Closing Date, including
without limitation, satisfaction of all of Buyer’s covenants and agreements
contained in Section 7 of this Agreement.

9.3. Certification. Seller shall have received a certificate, dated the Closing
Date, signed by a duly authorized officer of Buyer certifying, in such detail as
Seller and its counsel may reasonably request, that the conditions specified in
Sections 9.1 and 9.2 above have been fulfilled.

9.4. Absence of Litigation. No action, suit or proceeding by or before any court
or any Governmental Body, pertaining to the transactions contemplated by this
Agreement or their consummation, shall be pending on the Closing Date, which
action, suit or proceeding would, if determined adversely, impair the ability of
Buyer to pay the Consideration.

9.5 Consents. All necessary disclosures (if required to be made by Buyer or any
of its Affiliates) to and agreements and consents of any governmental
authorities or agencies to the extent required in connection with the
transactions contemplated by this Agreement, shall have been obtained and true
and complete copies thereof delivered to Seller; provided, however, that with
respect to filings under the HSR Act, this condition shall be deemed satisfied
upon the expiration of the applicable waiting period without governmental action
or upon official notification of the early termination of such waiting period.

9.6. Resolutions. Seller shall have received certified resolutions of the Board
of Directors of Buyer in form reasonably satisfactory to counsel for Seller,
authorizing Buyer’s execution, delivery and performance of this Agreement and
all other actions to be taken by Buyer hereunder.

9.7. Name Changes. Provided that Seller shall have complied with its obligations
pursuant to Section 6.8 (and if Seller shall not have done so, then the
condition in this Section 9.7 shall be deemed automatically waived by Seller),
Buyer shall have delivered to Seller a letter, signed by an officer of Buyer,
making reference to this Agreement and the defined terms used herein and then
stating that “Seller is hereby authorized to file the Name Change Amendments
with the Secretary of the Commonwealth of Pennsylvania on the Closing Date or up
to ten business days after the Closing Date.”

9.8. Proceedings and Instruments Satisfactory. All proceedings to be taken in
connection with the transactions contemplated by this Agreement, and all
documents incidental thereto, shall be reasonably satisfactory in form and
substance to Seller and its counsel.

 

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  10. CLOSING.

10.1. Place and Date of Closing. Unless this Agreement shall be terminated
pursuant to Section 11 below, the consummation of the transactions contemplated
by this Agreement (the “Closing”) shall take place at the offices of Greenberg
Traurig LLP, or such other location as shall be agreed upon by the parties, at
10:00 A.M. local time, on the date which is five (5) business days after the
satisfaction or waiver of all of the conditions to the obligations of the
parties to consummate the transactions contemplated hereby (excluding the
delivery at the Closing of any of the documents set forth in Sections 8 and 9)
(provided, that if such date is on or after the 15th day of the subject calendar
month, then the Closing shall occur on the last business day of such calendar
month), or such later date as may be mutually agreeable to the parties (the date
of the Closing being referred to in this Agreement as the “Closing Date”).

10.2. Actions at Closing. On the Closing Date, simultaneous with the Closing,
the parties shall make all payments and deliveries stated in this Agreement to
be made at the Closing and/or on or prior to the Closing Date, as set forth
herein.

 

  11. TERMINATION OF AGREEMENT.

11.1. General. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:

(a) by the mutual written consent of Buyer and Seller;

(b) by Buyer, if, by March 31, 2008 (subject to reasonable extension, but not
beyond September 30, 2008, to the extent required in order to complete
compliance with the HSR Act) (as so extended, the “Outside Closing Date”), the
conditions set forth in Section 8 above shall not have been satisfied, complied
with or performed (unless such failure of satisfaction, compliance or
performance is the result, directly or indirectly, of any breach of this
Agreement on the part of Buyer), and Buyer shall not have waived such failure of
satisfaction, compliance or performance;

(c) by Seller if, by the Outside Closing Date, (i) the conditions set forth in
Section 9 above shall not have been satisfied, complied with or performed
(unless such failure of satisfaction, compliance or performance is the result,
directly or indirectly, of any breach of this Agreement on the part of Seller),
and Seller shall not have waived such failure of satisfaction, compliance or
performance, or (ii) Buyer shall have failed to consummate the transactions
contemplated by this Agreement unless (A) such failure is due to the conditions
set forth in Section 8 above not having been satisfied, complied with or
performed (unless such failure of satisfaction, compliance or performance is the
result, directly or indirectly, of any breach of this Agreement on the part of
Buyer), and (B) the failure to satisfy, comply with or perform such conditions,
or the consummation of the Closing and operation of the Business following the
Closing without satisfaction, compliance with or performance of such conditions,
has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect;

 

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(d) by Buyer, if Seller has knowingly and intentionally breached or failed to
comply with its warranties, representations or obligations under this Agreement
for the purpose of avoiding or delaying the consummation of the Closing, such
that any of the conditions set forth in Section 8 would not reasonably be
expected to be satisfied; or

(e) by Buyer, for any reason or for no reason, at any time on or prior to the
Outside Closing Date.

11.2. Effect of Termination. In the event of termination of this Agreement
pursuant to this Section 11, prompt written notice shall be given by the
terminating party to the other party, and, unless the party seeking to terminate
this Agreement shall have no right to do so, neither party to this Agreement
shall have any further liability to the other, except as provided in Section 7.1
above or (if applicable) Section 11.3 below.

11.3. Break-Up Fee. Notwithstanding the provisions of Section 11.2, in the event
that (a) Seller terminates this Agreement pursuant to clause (i) of
Section 11.1(c) under circumstances where (i) the failure to satisfy, comply
with or perform any of the conditions set forth in Section 9 above shall arise
by reason of a default by Buyer of any of its obligations under this Agreement
or the failure by Buyer to use commercially reasonably efforts to satisfy,
comply with or perform such condition if such condition could have been
satisfied, complied with or performed through Buyer’s commercially reasonable
efforts, and (ii) the failure to satisfy, comply with or perform such condition
is or would reasonably be expected to have a material adverse effect on the
assets, business, results of operations or condition (financial or otherwise) of
Seller and its subsidiaries, taken as a whole, upon or after the Closing,
(b) Seller terminates this Agreement pursuant to clause (ii) of Section 11.1(c)
and as of such date Seller is ready, willing and able to effect the Closing
(subject to any required performance by Buyer in order to satisfy any of
conditions set forth in Section 9) but Buyer fails to effect the Closing for any
reason (or for no reason), (c) Buyer terminates this Agreement pursuant to
Section 11.1(b) in circumstances where (i) Buyer has not consummated the
transactions contemplated by this Agreement as a result of the conditions set
forth in Section 8 above not having been satisfied, complied with or performed
(and such failure of satisfaction, compliance or performance is not the result,
directly or indirectly, of any breach of this Agreement on the part of Buyer),
and (ii) the failure to satisfy, comply with or perform such conditions, or the
consummation of the Closing and operation of the Business following the Closing
without satisfaction, compliance with or performance of such conditions, has not
had and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, or (d) Buyer terminates this Agreement
pursuant to Section 11.1(e), then Buyer shall pay to Seller, by wire transfer of
immediately available funds, the sum of $2,000,000 (the “Break Up Fee”) promptly
after the date of the event giving rise to such payment obligation, which
payment shall constitute liquidated damages and shall be Seller’s sole and
exclusive remedy for any such termination. Notwithstanding anything to the
contrary in clauses (b) or (c) of this Section 11.3, no Break Up Fee shall be
required to be paid by Buyer pursuant to this Section 11.3 if, at the time of
termination of this Agreement, either (A) the applicable waiting period under
the HSR Act has not expired without governmental action and same is not the
result of any failure by Buyer to use commercially reasonable efforts to pursue
and obtain HSR Act clearance, or (B) a consent under or amendment to the Credit
Agreement entered into as of July 30, 2004, between Seller and its Material
Subsidiaries and Bank of America, N.A., as amended, has not been effected
releasing the Companies as guarantors thereunder, and releasing the Companies of
all liabilities and obligations thereunder.

 

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  12. INDEMNIFICATION.

12.1. General.

(a) From and after the Closing Date, Seller shall defend, indemnify and hold
harmless Buyer from, against and in respect of any and all claims, losses
(including lost profits), costs, expenses, obligations, debts, liabilities
(whether absolute, accrued, contingent, fixed or otherwise, or whether known or
unknown, or due or to become due or otherwise), damages, recoveries and
deficiencies, including costs of investigation, interest, penalties and
reasonable attorneys’ fees, that Buyer or either Company may incur, sustain or
suffer (collectively “Buyer Losses”) as a result of:

(i) any breach or inaccuracy, as of the Closing Date, of any representation or
warranty of Seller contained in this Agreement or in the certificate delivered
pursuant to Section 8.3;

(ii) any failure to perform any covenant or agreement of Seller contained in
this Agreement;

(iii) the termination by PSI of the Agreement dated November 24, 2004 by and
between PSI and Pharma Strategies, Ltd. (“Pharma”);

(iv) the litigation captioned Pediatrix Screening, Inc. and Pediatrix Screening,
LP v. TeleChem International, Inc., t/d/b/a Arrayit.com, Civil Action
No. 01-2226 in the Civil Division of the United States District Court for the
Western District of Pennsylvania, or any other Buyer Losses resulting from the
subject matter thereof;

(v) any claim(s) brought against either of the Companies subsequent to the date
hereof by any former stockholder of the Companies, claiming in his, her or its
capacity as a former stockholder (other than any claim(s) by Seller under this
Agreement);

(vi) any claims of professional liability relating to any professional service
provided by the Business or either Company subsequent to the consummation of the
transactions pursuant to the 2003 Agreement (as such term is defined in
Section 12.2(a) below) and prior to the Closing Date;

(vii) any workers compensation-type claims against either Company relating to an
occurrence prior to the Closing; or

(viii) any inability of either Company to comply following the Closing with any
obligation of either Company pursuant to any contract (whether written or oral)
to which either Company is a party as of the Closing (including, without
limitation, any contract relating to T4, TPN or SoundGene Test), to the extent
such inability to comply results from the Company’s failure immediately
following the Closing to own or have a valid right to use any physical or
intangible assets (including, without limitation, Intellectual Property) owned
or held by Seller or any of its Affiliates.

 

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(b) From and after the Closing Date, Buyer shall defend, indemnify and hold
harmless Seller from, against and in respect of any and all claims, losses
(including lost profits), costs, expenses, obligations, debts, liabilities
(whether absolute, accrued, contingent, fixed or otherwise, or whether known or
unknown, or due or to become due or otherwise), damages, recoveries and
deficiencies, including costs of investigation, interest, penalties and
reasonable attorneys’ fees, that Seller may incur, sustain or suffer
(collectively, the “Seller Losses”) as a result of:

(i) any breach or inaccuracy, as of the Closing Date, of any representation or
warranty of Buyer contained in this Agreement or in the certificate delivered
pursuant to Section 9.3; or

(ii) any failure to perform any covenant or agreement of Buyer contained in this
Agreement.

(c) Buyer Losses or Seller Losses are hereinafter referred to as “Losses”, as
they relate to the applicable party or parties in Sections 12.3 and 12.4 below.
Any calculation of Losses (whether Buyer Losses or Seller Losses) shall in each
case be calculated net of any net Tax benefits actually realized by the
indemnified party relating to or as a result of the subject Losses (after giving
effect to any required indemnification payment hereunder). To the extent that
the subject matter of any claim for indemnification hereunder is within the
coverage of any insurance maintained by the indemnifying party (including,
without limitation, professional liability coverage), then the indemnified party
shall cooperate in all reasonable respects with the indemnifying party’s
insurers with respect to the underlying subject matter. Upon final payment in
respect of any indemnification claim hereunder, the indemnifying party shall
(subject to any applicable limitations of any applicable insurance policy) be
subrogated to any claims of the indemnified party against any third person(s)
relating to the subject matter of the subject indemnity claim, and the
indemnified party shall promptly execute and deliver any and all agreements and
documents as may reasonably be requested by the indemnifying party to confirm
and give effect to such subrogation. Any indemnification payments in respect of
Buyer Losses shall be treated as an adjustment to the Adjusted Consideration.

(d) It is the intention of the parties that, although “materiality”
qualifications will be considered in determining whether there exists an
indemnifiable claim hereunder, for purposes of determining the amount of the
Losses for which any party is entitled to be indemnified pursuant to this
Section 12 with respect to any breach or inaccuracy of any representation or
warranty, any “materiality” qualification in any representation and warranty
shall be ignored.

12.2. Limitations on Certain Indemnity.

(a) Anything elsewhere contained in this Agreement to the contrary
notwithstanding, Seller makes no representations or warranties with respect to
any matters relating to the Business which occurred or existed prior to the
consummation of the transactions

 

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contemplated by the Purchase Agreement dated as of May 13, 2003 (the “2003
Agreement”) by and among the Companies, the prior owners of the Companies and
Pediatrix Medical Group (NGS), Inc. (which entity has been merged with and into
PSI), and Buyer shall look solely to PSI’s indemnification rights under the 2003
Agreement with respect to any such matters (subject to and in accordance with
the provisions of the 2003 Agreement and any limitations contained therein);
provided, however, that this Section 12.2(a) shall not apply to any matters of
which the Seller has knowledge as of the date hereof or as of the Closing Date.

(b) Seller shall not be liable to Buyer with respect to Buyer Losses unless and
until, and then only to the extent that, the aggregate amount of all Buyer
Losses with respect thereto shall exceed the sum of $1,000,000 (the “Basket”).
Seller shall thereafter be liable for all Buyer Losses in excess of the Basket,
up to a maximum aggregate amount of $35,000,000 (the “Cap”). In no event and
under no circumstances shall Seller be liable for any Buyer Losses in an
aggregate amount in excess of the Cap; provided, however, that the limitations
set forth in this Section 12.2(b) shall not apply to (i) claims based on proven
fraud, (ii) any claim relating to a breach of the representations and warranties
set forth in Sections 4.1, 4.2 or 4.4, (iii) any claims under Sections
12.1(a)(iii), 12.1(a)(iv), 12.1(a)(v), 12.1(a)(vii) or 12.1(a)(viii) above, or
(iv) any claim pursuant to Section 13. In addition, to the extent that any Buyer
Losses are addressed through any adjustments pursuant to Section 3.2 above, such
Buyer Losses shall not be the subject of any claim for indemnification under
this Section 12.

(c) Buyer shall be entitled to indemnification by Seller for Buyer Losses only
in respect of claims for which a Notice of Claim (as hereinafter defined) shall
have been given to Seller on or before that date which is eighteen (18) months
after the Closing Date; provided, that (i) the limitations set forth in this
Section 12.2(c) shall not apply to any claim relating to a breach of the
representations and warranties set forth in Sections 4.1, 4.2 or 4.4 above, or
any claim pursuant to Sections 12.1(a)(iii), 12.1(a)(iv) or 12.1(a)(v) above,
(ii) with respect to Buyer Losses relating to a breach of any warranties
relating to Tax matters covered by Section 4.8 above, the duration of such
indemnity shall be with respect to claims asserted prior to the expiration of
the final statute of limitations for the subject Tax reports and Tax Returns
covered by the warranties under Section 4.8 above, (iii) with respect to Buyer
Losses arising by reason of any breach by Seller of any of its covenants under
Section 15 below, the duration of such indemnity shall be with respect to and
limited to claims asserted within the lesser of (A) one (1) year after the
stated period during which the subject Section 15 covenant is effective, or
(B) the applicable statute of limitations, and (iv) the limitations set forth in
this Section 12.2(c) shall not apply to any claim pursuant to Section 13.

(d) Buyer shall not be liable to Seller with respect to Seller Losses unless and
until, and then only to the extent that, the aggregate amount of all Seller
Losses with respect thereto shall exceed the Basket. Buyer shall thereafter be
liable for all Seller Losses in excess of the Basket, up to a maximum aggregate
amount of the Cap. In no event and under no circumstances shall Buyer be liable
for any Seller Losses in an aggregate amount in excess of the Cap; provided,
however, that the limitations set forth in this Section 12.2(d) shall not apply
to (i) claims based on fraud or knowing misrepresentation, (ii) any claim
relating to a breach of the representations and warranties set forth in Sections
5.1, 5.2 or 5.3, or (iii) any claim pursuant to Section 13.

 

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(e) Seller shall be entitled to indemnification by Buyer for Seller Losses only
in respect of claims for which a Notice of Claim shall have been given to Buyer
on or before that date which is eighteen (18) months after the Closing Date;
provided, that the limitations set forth in this Section 12.2(d) shall not apply
to any claim relating to a breach of the representations and warranties set
forth in Sections 5.1, 5.2 or 5.3.

(f) Except as otherwise specified in this Section 12.2 or elsewhere in this
Agreement, all provisions of this Agreement shall survive the Closing and the
consummation of the transactions contemplated hereby and shall continue in full
force and effect in accordance with their terms. If either party delivers to the
other party, before expiration of the applicable claims period, a claim notice
based upon a breach of such representation, warranty, covenant or agreement,
then the applicable representation, warranty, covenant or agreement shall
survive until, but only for purposes of, the resolution of the matter covered by
such notice. The rights to indemnification set forth in this Section 12 shall
not be affected by (i) any investigation conducted by or on behalf of Buyer or
Seller or any knowledge acquired (or capable of being acquired) by Buyer or
Seller, whether before or after the date of this Agreement or the Closing Date,
with respect to the inaccuracy of or noncompliance with any representation,
warranty, covenant or obligation which is subject to indemnification hereunder,
or (ii) any waiver by Buyer or Seller of any closing condition relating to the
accuracy of representations and warranties or the performance of or compliance
with agreements and covenants.

(g) Except for claims based on fraud and any equitable remedies which may be
obtained in accordance with Section 15.5 below, the indemnification provisions
of this Section 12 and Section 13 shall be the parties’ sole and exclusive
remedy subsequent to the Closing in respect of any breach or alleged breach of
this Agreement.

12.3. Resolution of Disputes.

(a) Whenever a claim shall arise for which either party shall be entitled to
indemnification hereunder, the indemnified party shall notify the indemnifying
party in writing within thirty (30) days of the indemnified party’s first
receipt of notice of, or the indemnified party’s obtaining actual knowledge of,
such claim (a “Notice of Claim”), and in any event within such shorter period as
may be necessary for the indemnifying party to take appropriate action to resist
such claim. No delay or failure on the part of the indemnified party in so
notifying the indemnifying party shall relieve the indemnifying party of any
liability or obligation hereunder except to the extent of any actual prejudice
suffered by the indemnifying party as a result of such failure or delay, or any
damage or liability caused by or arising out of such delay or failure. Such
Notice of Claim shall specify all facts known to the indemnified party giving
rise to such indemnity rights and shall estimate (to the extent reasonably
possible) the amount of potential liability arising therefrom.

(b) In the event of any dispute relating to indemnification hereunder, neither
party shall bring any legal action thereon (unless required in order to avoid
expiration of any applicable statute of limitations) unless such dispute is not
settled or compromised within thirty (30) days after both parties’ receipt of
the subject claim.

 

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12.4. Right to Defend.

(a) Subject to Section 13, if the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or demand by any
third party against the indemnified party or any of its Affiliates, the
indemnifying party shall be entitled (without prejudice to the indemnified
party’s right to participate at its own expense through counsel of its own
choosing), at the indemnifying party’s expense and through counsel of its own
choosing (who shall be reasonably acceptable to the indemnified party), to
defend or prosecute such claim in the name of the indemnifying party or parties,
or any of them, or if necessary, in the name of the indemnified party; provided,
that except with respect to third party actions for which indemnification is
provided in Sections 12.1(a)(iii) and/or 12.1(a)(iv) (as to which Seller shall
have the absolute right to control the defense of such actions), (a) the
indemnifying party may only assume control of such defense if (i) it
acknowledges in writing to the indemnified party that all or any substantial
portion of the subject matter of or, if awarded, relief sought in the particular
claim may appropriately be the subject of an indemnification claim hereunder
(provided that such acknowledgement shall be without prejudice to any fact
thereafter discovered or fact or circumstance thereafter arising which would
cause a determination that the indemnifying party does not have liability to
indemnify for all or a portion of the Losses incurred by the indemnified party
in the subject third party action), and (ii) if the Cap is applicable to such
third party claim, the amount of damages sought in such third party claim (or,
if no specific amount of damages is demanded, or if the amount demanded is
patently arbitrary, then a good faith estimate by the parties of the potential
damages for which the indemnifying party may be liable hereunder), taken
together with the estimated costs of defense thereof and the amount (determined
in accordance with this Section 12.2(a)(ii)) of any other unresolved claims for
indemnification then pending as to which the Cap is applicable, is less than
200% of the then remaining unused portion of the Cap applicable to the
indemnifying party’s liability under this Section 12, and (b) the indemnifying
party may not assume control of the defense of any third party claim involving
criminal liability or in which equitable relief is sought against the
indemnified party.

(b) If the indemnifying party does not, or is not permitted under the terms
hereof to, so assume control of the defense of a third party claim, the
indemnified party shall control such defense. The party that does not control
such defense (the “Non-controlling Party”) may participate in such defense at
its own expense. The party controlling such defense (the “Controlling Party”)
shall keep the Non-controlling Party advised of the status of such third party
claim and the defense thereof and shall consider in good faith recommendations
made by the Non-controlling Party with respect thereto. The Non-controlling
Party shall furnish the Controlling Party with such information as it may have
with respect to such third party claim (including copies of any summons,
complaint or other pleading which may have been served on such party and any
written claim, demand, invoice, billing or other document evidencing or
asserting the same) and shall otherwise cooperate with and assist the
Controlling Party in the defense of such third party claim. The reasonable fees
and expenses of counsel to the Indemnified Party with respect to a third party
claim shall be considered Losses for purposes of this Agreement if (i) the
indemnified party controls the defense of such third party claim pursuant to the
terms of Section 12.4(a), or (ii) the indemnifying party assumes control of such
defense and the indemnified party reasonably concludes that the indemnified
party and the indemnifying party have conflicting interests or different
defenses available with respect to such

 

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third party claim. Seller shall not agree to any settlement of, or the entry of
any judgment arising from, any third party claim without the prior written
consent of Buyer, which shall not be unreasonably withheld, conditioned or
delayed; provided that the consent of Buyer shall not be required if Seller
agrees in writing to pay any amounts payable pursuant to such settlement or
judgment and such settlement or judgment includes a complete release of Buyer
from further liability and has no other adverse effect on Buyer. Except as
provided in Section 12.4(c) below, Buyer shall not agree to any settlement of,
or the entry of any judgment arising from, any such third party claim without
the prior written consent of Seller, which shall not be unreasonably withheld,
conditioned or delayed.

(c) Notwithstanding the other provisions of this Section 12.4, if a third party
asserts (other than by means of a lawsuit) that Buyer, either Company or any
Affiliate thereof is liable to such third party for a monetary or other
obligation which may constitute or result in Losses for which Buyer may be
entitled to indemnification pursuant to this Section 12, and Buyer reasonably
determines that it has a valid business reason to fulfill such obligation, then
(i) Buyer shall be entitled to satisfy such obligation, without prior notice to
or consent from Seller, (ii) Buyer may subsequently make a claim for
indemnification in accordance with the provisions of this Section 12, and
(iii) Buyer shall be reimbursed, in accordance with the provisions of this
Section 12, for any such Losses for which it is entitled to indemnification
pursuant to this Section 12 (subject to the right of Seller to dispute both
Buyer’s entitlement to indemnification and the amount for which it is entitled
to indemnification, under the terms of this Section 12).

12.5. Access to Records. In connection with the investigation and/or defense of
any indemnification claims or any third party claims which may give rise to any
indemnification obligations hereunder, Buyer shall permit Seller and its
representatives to have access to, and to the make copies and extracts of, all
relevant books and records of the Companies, all during normal business hours
and at the Companies’ offices, such access to be in a manner that does not
unreasonably interfere with the operation of the businesses of the Companies.

12.6. No Right of Contribution. Seller shall not have any right of contribution
against either Company with respect to any breach by Seller of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.

 

  13. TAX MATTERS

13.1. Preparation and Filing of Tax Returns; Payment of Taxes.

(a) Seller shall prepare and timely file or shall cause to be prepared and
timely filed or, if necessary, submit to Buyer for filing (i) all Tax Returns
for Seller for all Taxable periods through the close of the Tax year in which
the Closing Date occurs, (ii) all Tax Returns relating to any income Taxes of
each Company for all Taxable periods that end on or before the Closing Date, and
(iii) all other Tax Returns of each Company required to be filed (taking into
account extensions) prior to the Closing Date. Seller shall make or cause to be
made all payments required with respect to any such Tax Returns.

 

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(b) Buyer shall prepare and timely file or shall cause to be prepared and timely
filed all other Tax Returns for each Company and shall make all payments
required with respect to any such Tax Returns; provided, however, that, in the
case of Taxes other than income Taxes, to the extent that the aggregate payments
by Buyer in respect of periods prior to the Closing Date does not match the
reserve for Taxes reflected in the final Closing Net Working Capital Statement,
the parties shall, promptly following the completion of payments under Tax
Returns for periods which include both pre-Closing and post-Closing times,
effect settlement and payment between each other such that the amount actually
paid by or charged to Seller for Taxes paid subsequent to the Closing in respect
of pre-Closing periods equals the amount of such reserve.

(c) Any Tax Return to be prepared and filed for Taxable periods beginning before
the Closing Date and ending after the Closing Date shall be prepared on a basis
consistent with the last previous similar Tax Return. Buyer shall provide Seller
with a copy of each proposed Tax Return (and such additional information
regarding such Tax Return as may reasonably be requested by Seller) at least 20
days prior to the filing of such Tax Return, and Buyer shall consider in good
faith any adjustment or corrections suggested by Seller prior to the due date of
such Tax Return.

13.2. Allocation of Certain Taxes.

(a) Buyer and Seller agree that if either Company is permitted but not required
under applicable foreign, state or local Tax laws to treat the Closing Date as
the last day of a Taxable period, Buyer and Seller shall treat such day as the
last day of a Taxable period. Buyer and Seller agree that they will treat each
Company as if it ceased to be part of the affiliated group of corporations of
which Seller is a member within the meaning of Section 1504 of the Code, and any
comparable or similar provision of state, local or foreign laws or regulations,
as of the close of business on the Closing Date.

(b) The portion of any Taxes for a Taxable period beginning before and ending
after the Closing Date allocable to the portion of such period ending on the
Closing Date shall be determined in accordance with the applicable regulations
promulgated under the Code.

(c) For clarity, Buyer and Seller agree that, subject to Buyer’s payment to
Seller of the Tax Adjustment Amount, all Taxes resulting from a
Section 338(h)(10) election made pursuant to Section 13.5 are the obligation of,
and will be paid by, Seller.

13.3. Cooperation on Tax Matters; Tax Audits.

(a) Buyer and Seller and their respective Affiliates shall cooperate in the
preparation of all Tax Returns and the conduct of all Tax audits or other
administrative or judicial proceedings relating to the determination of any Tax
for any Tax periods for which one party could reasonably require the assistance
of the other party in obtaining any necessary information. Such cooperation
shall include, but not be limited to, furnishing prior years’ Tax Returns or
return preparation packages to the extent related to either Company illustrating
previous reporting practices or containing historical information relevant to
the preparation of

 

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such Tax Returns, and furnishing such other information within such party’s
possession requested by the party filing such Tax Returns as is relevant to
their preparation. Such cooperation and information also shall include, without
limitation, provision of powers of attorney for the purpose of signing Tax
Returns and defending audits and promptly forwarding copies of appropriate
notices and forms or other communications received from or sent to any Taxing
authority which relate to either Company, and providing copies of all relevant
Tax Returns to the extent related to either Company, together with accompanying
schedules and related workpapers, documents relating to rulings or other
determinations by any Taxing authority and records concerning the ownership and
Tax basis of property, which the requested party may possess. Buyer and Seller
and their respective Affiliates shall make their respective employees and
facilities available on a mutually convenient basis to explain any documents or
information provided hereunder.

(b) In the event of any Tax audit, dispute, claim for refund, contest or similar
proceeding, Buyer and Seller shall have the respective rights and obligations
relating to the conduct of such proceeding as set forth in Section 12.4;
provided, however, that (i) in no event shall Seller be entitled to settle or
otherwise resolve any dispute with a Governmental Body regarding Taxes without
the express written consent of Buyer (which shall not be unreasonably withheld)
if Buyer determines in good faith that any proposed resolution of the dispute
would have potentially adverse consequences to Buyer or either of the Companies
(provided, however, that if Buyer withholds its consent, Buyer’s claim for
indemnification shall not exceed the amount for which the dispute could have
been settled), and (ii) in no event shall Buyer settle or resolve any such
dispute regarding Taxes without the express prior written consent of Seller
(which shall not be unreasonably withheld) if Seller determines in good faith
that the proposed resolution of the dispute would have potentially adverse
consequences to Seller.

13.4. Termination of Tax Sharing Agreements. All Tax sharing agreements or
similar arrangements with respect to or involving either Company shall be
terminated prior to the Closing Date and, after the Closing Date, Buyer and its
Affiliates shall not be bound thereby or have any liability thereunder for
amounts due in respect of periods ending on or before the Closing Date.

13.5. Section 338(h)(10) Election. If Buyer elects by delivery of written notice
to the Seller on or before the date that is 150 days prior to the last date on
which an election pursuant to Section 338(h)(10) can be made with respect to the
purchase of Stock contemplated by this Agreement, Seller will, subject to this
Section 13.5, join with Buyer in making a Section 338(h)(10) election with
respect to the purchase and sale of the Stock. Buyer and Seller shall cooperate
fully in the making of such Section 338(h)(10) election. In particular, and not
by way of limitation, in order to effect such Section 338(h)(10) election, Buyer
and Seller shall jointly execute, on or prior to the Closing Date, IRS Form 8023
and all attachments required to be filed therewith pursuant to the applicable
United States Treasury regulations section. Such Form 8023 and attachments shall
be held by Buyer and shall, subject to payment to the Seller in accordance with
the last sentence of this Section 13.5, be filed by Buyer on behalf of itself
and Seller in accordance with, and within the time prescribed by, Section 338 of
the Code and the regulations thereunder. Buyer and Seller agree to report the
transaction for Tax purposes in a manner consistent with the making of such
Section 338(h)(10) election. In the event that Buyer proposes

 

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to cause an election pursuant to Section 338(h)(10) of the Code to be made in
accordance with this Section 13.5, Buyer shall, at least 150 days prior to the
last date on which such election can be made, prepare and deliver to Seller a
schedule (the “Allocation Schedule”) pursuant to which the “aggregate deemed
sales price” (within the meaning of Treasury Regulation Section 1.338-4) is
allocated among the assets of Seller in accordance with Treasury Regulation
Section 1.338-6 and 1.338-7. If Seller objects to any portion of the Allocation
Schedule, it shall notify Buyer in writing within forty-five (45) days of the
original receipt of the Allocation Schedule by Seller, failing which the
Allocation Schedule shall become final. If Seller timely notifies Buyer of its
objection to any portion or portions of the Allocation Schedule originally
delivered to Seller, the dispute resolution procedures set forth in
Section 3.2(d) shall apply (and, in connection therewith, the Neutral Accountant
shall be instructed to complete its analysis and render its decision not less
than sixty (60) days prior to the last date on which the Section 338(h)(10)
election can be made). The parties agree to file all state and federal income
Tax Returns in a manner consistent with the Allocation Schedule as finalized to
reflect the resolution of any timely filed objections by the Seller. As a
condition to the filing of any Section 338(h)(10) election, Buyer shall pay to
Seller, in immediately available funds at or prior to the filing the
Section 338(h)(10) election, as additional Consideration, an amount such that
the net after-Tax amount realized by Seller, after taking into account the
amount received by Seller under this sentence, is equal to the amount Seller
would have realized in the absence of a Section 338(h)(10) election (the “Tax
Adjustment Amount”); and Seller shall provide to Buyer, within forty-five
(45) days after receipt of the proposed Allocation Schedule, a reasonably
detailed calculation of the Tax Adjustment Amount required to be paid by Buyer
hereunder (the “Tax Adjustment Calculation”) (which, if disputed, shall
immediately be submitted for resolution in a manner consistent with the
procedures set forth in Section 3.2(d) above and this Section 13.5). The agreed
Tax Adjustment Calculation shall be final and binding on the parties with regard
to the Tax Adjustment Amount required to be paid by Buyer to Seller. Anything
elsewhere contained in this Section 13.5 to the contrary notwithstanding, Buyer
may withdraw its proposal to file a Section 338(h)(10) election at any time
prior to the filing thereof.

13.6. Scope of Section 13. Any claim by either party relating to a breach by the
other party of its obligations under this Section 13 shall be pursued in
accordance with the procedures for indemnification claims, and shall otherwise
be subject to the terms and conditions, set forth in Section 12 above.
Notwithstanding the foregoing or any other term or condition of this Section 13,
(a) claims for a breach of an obligation under this Section 13 may be made by a
party at any time prior to the 60th day after the expiration of the statute of
limitations applicable to the Tax matter to which the claim relates and (b) to
the extent there is any inconsistency between the terms of Section 12 and this
Section 13 with respect to the allocation of responsibility between Seller and
Buyer for Taxes relating to either Company, the provisions of this Section 13
shall govern.

 

  14. COSTS.

14.1. Finder’s or Broker’s Fees. Each of Buyer (on the one hand) and Seller (on
the other hand) represents and warrants that neither it nor any of its
Affiliates has dealt with any broker or finder in connection with any of the
transactions contemplated by this Agreement, and no broker or other Person is
entitled to any commission or finder’s fee in connection with any of the
transactions contemplated hereby.

 

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14.2. Closing Expenses. Each of Buyer and Seller shall pay all of their own
respective professional fees and other costs and expenses incurred or to be
incurred by them, respectively, in negotiating and preparing this Agreement and
in closing and carrying out the transactions contemplated by this Agreement;
provided, that nothing herein contained shall be deemed to prohibit the payment
by the Companies of professional fees and other costs and expenses incurred or
to be incurred by the Companies in the continuing course of their business which
fees and costs, if outstanding on the Closing Date, shall be accrued for in the
calculation of Net Working Capital.

 

  15. POST-CLOSING COVENANTS.

15.1. Employees. With the exception of Dr. Donald Chace and certain sales
personnel employed by Seller identified in Schedule 15.1 of the Disclosure
Schedule, Buyer shall, upon the Closing, cause the Companies to retain all of
their then-existing employees with positions, titles, compensation and benefits
substantially comparable to the positions, titles, compensation and benefits
currently provided to such employees by the Companies. Nothing herein contained,
however, shall be deemed to abrogate or limit the right of the Companies to
terminate any of such employees subsequent to the Closing, to change such
employees’ job descriptions, titles and compensation or to change from time to
time the nature and level of benefits provided to such employees. For the
avoidance of doubt, Seller shall retain all Employee Plans, and Buyer shall
assume no liability thereunder.

15.2. Carryover Indemnity. From and after the Closing, Buyer shall not take any
affirmative action to cause Seller to forfeit the benefits of the
indemnification provided in Article VI of the 2003 Agreement; and without
limitation of the foregoing, as between Buyer and Seller, Seller shall have the
benefit of any and all monies held in escrow pursuant to the 2003 Agreement,
including (without limitation) to cover any and all Seller Losses arising out of
or incurred in respect of any of the pending litigation disclosed in Schedule
4.20. To the extent that any claim for indemnification under this Agreement
would also properly be the subject of a claim for indemnification under the 2003
Agreement, then Buyer shall (through PSI) first seek recovery thereof under the
2003 Agreement prior to seeking recovery under this Agreement.

15.3 Patents in Development. From and after the Closing, neither Buyer nor the
Companies shall make any claim in respect of any of the research and
development, patent applications and license agreements transferred to Seller as
contemplated by Section 6.5(i)(B) above.

15.4. Books and Records. At any time and from time to time during the three
(3) years from and after the Closing Date, Buyer shall permit, and shall cause
the Companies to permit, Seller and its representatives to have access, during
normal business hours and without undue disruption of the Companies’ business,
to the books and records of the Companies with respect to periods prior to the
Closing, for purposes of preparing any Tax filings or to the extent necessary to
allow Seller to make determinations or computations contemplated by this
Agreement (other than pursuant to Section 3.2 and Article 12, in which relevant
rights of access are expressly set forth). Such books and records may be made
available at any location where same are maintained, and all costs and expenses
relating to such access and inspection shall be the responsibility of Seller.

 

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15.5. Restrictive Covenants. Seller hereby agrees that it shall not, directly,
or indirectly, in its own name or through or on behalf of any Affiliate (but
expressly excluding any bona fide purchaser of Seller or its business (and/or
any of Seller’s subsidiaries or any of their respective businesses, in each case
if such subsidiary or business ceases to be an Affiliate of Seller after giving
effect to the purchase and sale transaction) in an arms-length transaction),
(a) at any time from the Closing through and including the third
(3rd) anniversary of the Closing Date, directly or indirectly, invest, carry on,
engage in or become involved, either as a stockholder, partner, joint venturer,
manager, advisor, consultant, investor or lender, in any business enterprise
which derives any material amount of revenues from the ownership or operation of
laboratory facilities conducting screening of newborns for inborn errors of
metabolism and/or metabolic disorders in the first thirty (30) days of life
(“Newborn Screening”) at any location anywhere in the world (provided that
(i) the passive ownership of not more than 5% of the outstanding stock of a
publicly traded entity shall not constitute a breach of this Section 15.5, and
(ii) the provision of advice or service to customers incidental to the
implementation or use of products or services sold or licensed shall not
constitute a breach of this Section 15.5), or (b) at any time from the Closing
through and including the first (1st) anniversary of the Closing Date, solicit,
hire or seek to hire or retain, whether as an employee, consultant or otherwise,
any individual employed or retained by either of the Companies at the time of or
within six (6) months prior to such solicitation, or otherwise materially and
adversely interfere with the relationship between either of the Companies and
any such individual (provided that it shall not be a breach of this
Section 15.5(b) if the solicitation is pursuant to a general trade advertisement
or if the subject individual was dismissed by either of the Companies subsequent
to the Closing and such solicitation is made not sooner than six (6) months
after such dismissal). In the event of any breach of this Section 15.5, Seller
acknowledges that it will be difficult to ascertain the precise amount of
damages that may be suffered by reason of such breach, and that such breach may
cause irreparable injury for which there is no adequate remedy at law;
accordingly, Seller hereby agrees that, in the event of any such breach, Buyer
shall be entitled, in addition to any all other remedies available, to seek and
obtain injunctive and/or other equitable relief to require specific performance
of or prevent, restrain and/or enjoin such breach. Each of the parties agrees
that the duration and geographic scope of the covenants set forth in this
Section 15.5 are reasonable. In the event that any court of competent
jurisdiction or arbitrator determines that the duration or the geographic scope,
or both, are unreasonable and that such provision is to that extent
unenforceable, each of the parties agrees that the provision shall remain in
full force and effect for the greatest time period and in the greatest area that
would not render it unenforceable. Each of the parties intends that this
Section 15.5 shall be deemed to be a series of separate covenants, one for each
and every county of each and every state of the United States of America where
this provision is intended to be effective.

15.6. Name Changes. Subject to Buyer’s having delivered the authorization
referred to in Section 9.7, within ten business days following the Closing Date,
Seller shall file the Name Change Amendments with the Secretary of the
Commonwealth of Pennsylvania, and shall provide copies of such certified filings
to Buyer promptly upon receipt. From and after the Closing, Buyer shall not
permit either of the Companies to use their prior names, or any name which
includes the word “Pediatrix” or any confusingly similar name, except for
routine ministerial filings which must, of necessity, refer to the Companies’
prior names; provided, however, that this sentence shall not prohibit the
Companies from using, during the ninety (90) day period following the Closing
Date, marketing and promotional materials in existence or on order as of the
Closing Date.

 

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15.7. OIG Notification. Pursuant to Section IV (New Business Units and
Locations) of the CIA, Seller shall, no later than thirty (30) days after the
Closing Date, give written notice to the Office of the Inspector General of the
sale of PSI to Buyer and concurrently provide a copy of such notice to Buyer.

15.8. Further Assurances. From time to time from and after the Closing, the
parties shall execute and deliver, or cause to be executed and delivered, any
and all such further agreements, instruments, certificates, assignments and
other documents, and shall take or cause to be taken any and all such further
action, as any of the parties may reasonably deem necessary or desirable in
order to carry out the intent and purposes of this Agreement.

 

  16. FORM OF AGREEMENT.

16.1. Effect of Headings. The Section headings used in this Agreement and in the
Disclosure Schedule are included for purposes of convenience only, and shall not
affect the construction or interpretation of any of the provisions hereof or of
the information set forth in the Disclosure Schedule.

16.2. Entire Agreement; Waivers; Severability. This Agreement constitutes the
entire agreement between the parties pertaining to the subject matter hereof,
and supersedes all prior agreements or understandings as to such subject matter.
No party hereto has made any representation or warranty or given any covenant to
the other except as set forth in this Agreement. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver. If any provision of this Agreement shall be determined
by a court of competent jurisdiction or by a duly appointed arbitrator to be
unenforceable to any extent or in any respect, then such provision shall be
modified in scope or effect, or shall be excised from this Agreement, only to
such extent as may be required to render such provision valid and enforceable,
and the remainder of this Agreement shall be unaffected.

16.3. Counterparts; Fax Signatures. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. This Agreement may be executed by means of fax signatures, which
shall have the same binding legal effect as original ink signatures.

 

  17. PARTIES.

17.1. Parties in Interest. Nothing in this Agreement, whether expressed or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any Persons other than the parties to it and their respective
successors and permitted assigns, nor is anything in this Agreement intended to
relieve or discharge the obligations or liability of any third Persons to any
party to this Agreement, nor shall any provision give any third Persons any
right of subrogation or action over or against any party to this Agreement.

 

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17.2. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
(a) on the date of service, if served personally on the party to whom notice is
to be given, (b) on the next business day after the date sent by recognized
overnight courier service with all charges prepaid or billed to the account of
the sender, (c) three (3) business days after being deposited in the United
States mail if sent by first class mail, registered or certified, postage
prepaid, or (d) when sent by facsimile transmission, to the party being notified
at its address or facsimile number set forth below or such other address or
facsimile number as such party shall subsequently notify the other party hereto
in writing:

 

 

(i)

  If to Buyer:       

PerkinElmer Holdings, Inc.

      

940 Winter Street

      

Waltham, MA 02451

      

Attention: General Counsel

      

Fax: (781) 663-5969

      

with a copy to:

      

WilmerHale

      

60 State Street

      

Boston, MA 02109

      

Attention: David E. Redlick, Esq.

      

Fax: (617) 526-5000

     (ii)   If to Seller:       

Pediatrix Medical Group, Inc.

      

1301 Concord Terrace

      

Sunrise, FL 33323

      

Attention: General Counsel

      

Fax: (954) 858-0431

      

with a copy to:

      

Greenberg Traurig, LLP

      

200 Park Avenue

      

New York, NY 10166

      

Attention: Shahe Sinanian, Esq.

Fax: (212) 801-6400

  

or to such other address as either party shall have specified by notice in
writing given to the other party.

 

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  18. MISCELLANEOUS.

18.1. Amendments and Modifications. No amendment or modification of this
Agreement or the Disclosure Schedule shall be valid unless made in writing and
signed by both parties hereto.

18.2. Non-Assignability; Binding Effect. Neither this Agreement, nor any of the
rights or obligations of the parties hereunder, shall be assignable by either
party hereto without the prior written consent of the other party. Otherwise,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns.

18.3. Governing Law. This Agreement shall be construed and interpreted and the
rights granted herein governed in accordance with the laws of the State of New
York applicable to contracts made and to be performed wholly within such State.

18.4 Dispute Resolution.

(a) Any disputes, claims or controversies between the Seller and the Buyer in
connection with this Agreement, including any question regarding its formation,
existence, validity, enforceability, performance, interpretation, breach or
termination (any such dispute, claim or controversy, a “Dispute”), shall be
finally resolved by binding arbitration.

(b) Any arbitration hereunder shall be conducted under the rules then pertaining
of the American Arbitration Association (“AAA”) Complex Matters, except where
those rules conflict with these provisions, in which case these provisions
control; and, in connection with any arbitration hereunder, the parties shall be
permitted full and fair discovery (including, without limitation, in respect of
the books and records described in Section 15.4 above) in a manner and to an
extent consistent with the Federal Rules of Civil Procedure. The arbitration
shall be conducted in the English language before three AAA arbitrators chosen
according to the following procedure: within 20 days after commencement of the
arbitration, each of Buyer and Seller shall appoint one arbitrator, and within
20 days after the appointment of both such arbitrators, the two arbitrators so
chosen shall choose the third arbitrator. If the two arbitrators chosen by Buyer
and Seller cannot agree on the choice of the third arbitrator within a period of
20 days after their appointment, then the third arbitrator shall be appointed by
AAA.

(c) Each of Buyer and Seller hereby irrevocably waives all rights to trial by
jury in any Dispute.

(d) The place of the arbitration shall be New York, New York.

(e) The provisions of this Section 18.4 shall not apply to any proceeding to
seek and obtain injunctive and/or other equitable relief to require specific
performance of or prevent, restrain and/or enjoin any breach of this Agreement
(it being understood that other matters relating to any such proceeding shall,
to the extent permitted by law and to the extent it would not delay such
injunctive and/or other equitable relief or specific performance of this
Agreement, be resolved in accordance with clauses (a)-(d) of this Section 18.4).
With respect to any proceeding to seek and obtain injunctive and/or other
equitable relief

 

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to require specific performance of this Agreement, each party (i) submits to the
jurisdiction of any state or federal court sitting in New York, New York,
(ii) agrees that such proceeding may be heard and determined in any such court,
(c) waives any claim of inconvenient forum or other challenge to venue in such
court, (d) agrees not to bring such proceeding in any other court, (e) waives
any right it may have to a trial by jury with respect to such proceeding, and
(f) agrees to accept service of any summons, complaint or other initial pleading
made in the manner provided for the giving of notices in Section 17.2, provided
that nothing in this Section 18.4(e) shall affect the right of any party to
serve such summons, complaint or other initial pleading in any other manner
permitted by law.

[The remainder of this page is intentionally blank]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on and as of the
date first set forth above.

 

Buyer: PERKINELMER HOLDINGS, INC. By:  

/s/ Robert F. Friel

Name:   Robert F. Friel Title:   President Seller: PEDIATRIX MEDICAL GROUP, INC.
By:  

 

/s/ John F. Rizzo

  John F. Rizzo, Senior Vice President

The undersigned, being the ultimate corporate parent of the Buyer, hereby
absolutely and unconditionally guarantees the payment and performance by the
Buyer of all of its obligations under the foregoing Stock Purchase Agreement.
This is a guaranty of payment and performance (and not merely of collection),
and the Seller may proceed directly against the undersigned without any
requirement to first proceed or obtain any judgment against or exhaust any
remedies with respect to the Buyer. This guaranty shall in no manner be affected
or impaired by (a) any amendment, modification, waiver, consent, compromise or
other indulgence granted to the Buyer under or in respect of the foregoing Stock
Purchase Agreement or any related agreement, (b) any failure by the Seller to
insist upon strict performance or observance by the Buyer of any of the terms of
the foregoing Stock Purchase Agreement or any related agreement, (c) any
forbearance by the Seller, (d) any bankruptcy, insolvency, receivership,
reorganization, liquidation or other such proceeding relating to the Buyer, or
(e) any relief of the Buyer from any of its obligations as aforesaid by
operation of law, in equity or otherwise. This guaranty shall be subject in all
cases to any defenses (other than defenses based upon or arising out of any
bankruptcy, insolvency or reorganization of Buyer) available to Buyer had Seller
proceeded directly against Buyer rather than pursuant to this guaranty.

 

PERKINELMER, INC. By:  

/s/ Robert F. Friel

Name:   Robert F. Friel Title:   President and Chief Operating Officer

 

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