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Exhibit 10.3

INDEMNIFICATION AGREEMENT

INDEMNIFICATION AGREEMENT, dated November __, 2009, by and among Mediware
Information Systems, Inc., a New York corporation (“Mediware”); Advantage
Reimbursement, LLC, a Delaware limited liability company (“Advantage
Reimbursement, LLC” and together with Mediware, the “Buyers”); Healthcare
Automation, Inc., a Delaware corporation (“Healthcare Automation”); Advantage
Reimbursement, Inc., a Massachusetts corporation (“Advantage Reimbursement,
Inc.”); Kenneth J. Pereira (“Pereira”); and David A. Belhumeur (“Belhumeur”).

R E C I T A L S

A.            Pereira and Belhumeur (each, a “Shareholder” and together, the
“Shareholders”) together own beneficially and of record all of the issued and
outstanding shares of Healthcare Automation and Advantage Reimbursement; and

B.            On November [__], 2009, Mediware entered into an Asset Purchase
Agreement with Advantage Reimbursement, LLC, Healthcare Automation, Pereira and
Belhumeur (the “Healthcare Automation APA”) pursuant to which Mediware agreed to
purchase all the assets of Healthcare Automation and Healthcare Automation
agreed to assign certain contracts to Advantage Reimbursement, LLC; and

C.            On November [__], 2009, Advantage Reimbursement, LLC entered into
an Asset Purchase Agreement with Advantage Reimbursement Inc., Pereira and
Belhumeur (the “Advantage Reimbursement APA” and together with the “Healthcare
Automation APA, the “Purchase Agreements”) pursuant to which Advantage
Reimbursement, LLC agreed to purchase all the assets of Advantage Reimbursement
Inc..

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants, warranties, representations and conditions contained in this
Agreement, it is hereby agreed as follows:

1.1.          Definitions.  As used in this Agreement, the following terms shall
have the meanings set forth below:

(a)            “Affiliate” of any specified Person means any other Person
directly or indirectly Controlling or Controlled by or under direct or indirect
common Control with such specified Person.

(b)            “Assumed Liability” means each liability and obligation
comprising the “Assumed Liabilities” as defined in both the Healthcare
Automation APA and the Advantage Reimbursement APA.

(c)            “Claim” means any claim for which any of the Buyer Indemnified
Parties or the Seller Indemnified Parties (each as defined below) may be
entitled to indemnification pursuant to Section 2 or Section 3 hereof.

 

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(d)           “Control,” “Controlling,” and “Controlled,” when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.

(e)           “Governmental Authority” means any court, arbitrator, governmental
agency or public or regulatory unit, agency, body or authority of the United
States, any foreign country or any domestic or foreign state, county, city or
other political subdivision thereof.

(f)            “Losses” means liability, loss, damage or expense (including, but
not limited to, reasonable attorneys’ and accountants’ fees and expenses),
whether or not resulting from third party claims.

(g)           “Person” means any individual, corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization,
Governmental Authority or similar entity.

1.2.     Indemnification by Mediware and Mediware Subsidiary.

(a)           The Buyers agree with the Shareholders, Healthcare Automation and
Advantage Reimbursement, Inc. (collectively, the “Seller Parties”) that the
Buyers jointly and severally shall reimburse, defend, indemnify and hold
harmless the Seller Parties, their respective Affiliates and, as applicable, the
officers, directors, agents, employees and stockholders of any of the Seller
Parties or of the Seller Parties’ respective Affiliates (collectively, the
“Seller Indemnified Parties”) from and against any Losses suffered by any of the
Seller Indemnified Parties, which exists, arises out of or results from:

(i)             (A) any untruth, inaccuracy, breach or omission of, from or in,
the representations and warranties made to any of the Seller Parties in the
Purchase Agreement to which such Seller Party is a party, in each case, in
Section 6.1 (Organization), Section 6.2 (Authority), Section 6.3 (No Violation)
or Section 6.4 (Disclosure) of such Purchase Agreement, or in any agreement or
certificate provided in connection with such sections, (B) any nonfulfillment of
any covenant or agreement of either of the Buyers under either of the Purchase
Agreements or any of the Exhibits thereto, or (C) any fraud or intentional
misrepresentation by either of the Buyers with respect to any representation,
warranty, covenant, agreement contained in either of the Purchase Agreements,
any certificates or agreement provided in connection with either of the Purchase
Agreements or otherwise;

(ii)           any untruth, inaccuracy, breach or omission of, from or in, any
representations and warranties made to any of the Seller Parties in the Purchase
Agreement to which such Buyer is a party, or in any agreement or certificate
provided in connection with such Purchase Agreement, other than those
representations and warranties referenced in Section 2(a)(i);

(iii)           any Assumed Liability;

(iv)          any fees, expenses or other payments incurred or owed by either
Buyer to any attorneys, accountants, brokers or comparable third parties
retained or employed by it in connection with closing the transactions
contemplated by either of the Purchase Agreements;

 
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(v)            any claim made by any third party alleging facts which, if true,
would entitle any of the Seller Indemnified Parties to indemnification pursuant
to this Section 2; or

(vi)          any claim by any third party that the transactions contemplated by
either of the Purchase Agreements interfere with, or otherwise violate any right
of such third party; provided that such right is (or was) owed to the third
party by the Buyers on or before the Effective Date of this Agreement; or

(vii)         any and all actions, suits, claims, proceedings, investigations,
audits, demands, assessments, fines, judgments, costs and other expenses
(including, without limitation, reasonable audit and legal fees) incurred by any
of the Seller Indemnified Parties resulting from the circumstances described in
Section 2(a)(i) through (v) above.

(b)           Notwithstanding anything to the contrary in this Agreement or
either of the Purchase Agreements, the Buyers’ aggregate liabilities to the
Seller Parties arising out of or resulting from the matters set forth in Section
2(a)(ii) shall not exceed the sum of (i) the Healthcare Automation Purchase
Price, plus (ii) the Advantage Reimbursement Purchase Price. The Buyers’
liabilities to any of the Seller Parties arising out of or resulting from the
matters set forth in Section 2(a)(i), (iii), (iv), (v), (vi) and (vii)     
shall be unlimited.  In addition, neither of the Buyers shall be obligated to
indemnify any of the Seller Parties with respect to any Losses resulting from
the matters set forth in Section 2(a)(ii) unless and until the aggregate amount
of Losses for which claims may be made under Section 2(a)(ii) exceeds fifty
thousand dollars ($50,000) (the “Buyer Basket Amount”); provided, that
thereafter the Buyers shall indemnify the Seller Parties for any amounts in
excess of and including the Buyer Basket Amount.

1.3.          Indemnification by Seller Parties.

(a)            The Seller Parties agree with Buyers that the Seller Parties
jointly and severally shall reimburse, defend, indemnify and hold harmless
Buyers, their respective Affiliates and the officers, directors, agents,
employees and stockholders of either Buyer or of either Buyer’s respective
Affiliates (collectively, the “Buyer Indemnified Parties”) from and against any
Losses suffered by any of the Buyer Indemnified Parties, which exists, arises
out of or results from:

(i)            (A) any untruth, inaccuracy, breach or omission of, from or in,
the representations and warranties made to either Buyer in the Purchase
Agreement to which such Buyer is a party, in each case, in Section 5.1
(Organization), Section 5.2 (Authorization, Execution and Enforceability),
Section 5.3 (Absence of Restrictions and Conflicts), Section 5.4 (No Interest in
Other Entities), Section 5.5 (Ownership of Assets and Related Matters), Section
5.11 (Taxes), Section 5.16 (Intellectual Property) or Section 5.17 (Code
Quality) of such Purchase Agreement, or in any agreement or certificate provided
in connection with such sections, (B) any nonfulfillment of any covenant or
agreement of any of the Seller Parties under either of the Purchase Agreements
or any of the Exhibits thereto, or (C) any fraud or intentional
misrepresentation by any of the Seller Parties with respect to any
representation, warranty, covenant, agreement contained in either of the
Purchase Agreements, any certificates or agreement provided in connection with
either of the Purchase Agreements or otherwise;

 
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(ii)           any untruth, inaccuracy, breach or omission of, from or in, any
representations and warranties made to either Buyer in the Purchase Agreement to
which such Buyer is a party or in any agreement or certificate provided in
connection with such Purchase Agreement, other than those representations and
warranties referenced in Section 3(a)(i);

(iii)          any liability or obligation of any of the Seller Parties that is
not an Assumed Liability;

(iv)         any claim by any third party that the transactions contemplated by
either of the Purchase Agreements interfere with, or otherwise violate any right
of such third party any claim by any third party; provided that such right is
(or was) owed to the third party by the Seller Parties on or before the
Effective Date of this Agreement.

(v)           any fees, expenses or other payments incurred or owed by any of
the Seller Parties to any attorneys, accountants, brokers or comparable third
parties retained or employed by it in connection with closing the transactions
contemplated by either of the Purchase Agreements;

(vi)          any failure to comply with any applicable statutory provisions
relating to bulk sales and transfers or tax clearances, if applicable;

(vii)         any claim made by any third party alleging facts which, if true,
would entitle any of the Buyer Indemnified Parties to indemnification pursuant
to this Section 3; or

(viii)        any and all actions, suits, claims, proceedings, investigations,
audits, demands, assessments, fines, judgments, costs and other expenses
(including, without limitation, reasonable audit and legal fees) incurred by any
of the Buyer Indemnified Parties resulting from the circumstances described in
Sections 3(a)(i) through (vii) above.

(b)           Notwithstanding anything to the contrary in this Agreement or
either of the Purchase Agreements, the Seller Parties’ aggregate liabilities to
Buyers arising out of or resulting from the matters set forth in Section
3(a)(ii) shall not exceed 80% of the sum of (i) the Healthcare Automation
Purchase Price (as defined in the Healthcare Automation APA), plus (ii) the
Advantage Reimbursement Purchase Price (as defined in the Advantage
Reimbursement APA),.  The Seller Parties’ liabilities to either Buyer arising
out of or resulting from the matters set forth in Section 3(a)(i), (iii), (iv),
(v), (vi), (vii) or (viii) shall be unlimited.  In addition, none of the Seller
Parties shall be obligated to indemnify either Buyer with respect to any Losses
resulting from the matters set forth in Section 3(a)(ii) unless and until the
aggregate amount of Losses for which claims may be made under Section 3(a)(ii)
exceeds fifty thousand dollars ($50,000) (the “Seller Basket Amount”); provided,
that thereafter the Seller Parties shall indemnify the Buyers for any amounts in
excess of and including the Seller Basket Amount.

1.4.         Method of Asserting Claims.  Subject to the time periods set forth
in Section 11.7 of the Healthcare Automation APA and Section 11.7 of the
Advantage Reimbursement APA, the party seeking indemnity (“Indemnitee”) will
give prompt written notice to the party or parties providing indemnity
(“Indemnitor”) of any Claim which it discovers or of which it receives notice
and which might give rise to a Claim by it against Indemnitor under this
Agreement, stating the nature, basis and (to the extent known) amount
thereof.  Copies of any papers received in connection with a Claim shall be
forwarded to Indemnitor together with the notice of the Claim.  The failure to
give notice as provided in this Section 4 shall not relieve the Indemnitor of
its obligations hereunder except to the extent it shall have been prejudiced by
such failure.  In case of any Claim or suit by a third party or by any
governmental body, or any legal administrative or arbitration proceeding with
respect to which Indemnitor may have liability under this Agreement, Indemnitor
shall be entitled to participate therein, and, to the extent desired by
Indemnitor, to assume the defense thereof, and after notice from Indemnitor to
Indemnitee of the election to so assume the defense thereof, Indemnitor will not
be liable to Indemnitee for any legal or other expenses subsequently incurred by
Indemnitee in connection with the defense thereof, other than reasonable costs
of investigation, unless Indemnitor does not actually assume the defense thereof
following notice of such election.  Indemnitee and Indemnitor will render to
each other such assistance as may reasonably be required of each other in order
to ensure proper and adequate defense of any such suit, claim or
proceeding.  Indemnitee will not make any settlement of any Claim which might
give rise to liability of an Indemnitor under this Agreement without the prior
written consent of Indemnitor, which consent shall not be unreasonably
withheld.  If Indemnitor shall desire and be able to effect a bona fide
compromise or settlement of any such suit, claim or proceeding at its expense
and such settlement includes as an unconditional term thereof the giving by the
claimant or the plaintiff to the Indemnitee of a release from all liability in
respect of such suit, claim or proceeding and does not provide any form of
relief from the Indemnitee other than the payment of money damages or other
money payment, and Indemnitee shall unreasonably refuse to consent to such
compromise or settlement, then the Indemnitor’s liability under this Agreement
with respect to such suit, claim or proceeding shall be limited to the amount so
offered in compromise or settlement together with all legal and other expenses
which may have been incurred prior to the date on which Indemnitee has refused
to consent to such compromise or settlement.

 
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1.5.          General Provisions. The parties further covenant and agree as
follows:

(a)            Waiver of Terms.  Any of the terms or conditions of this
Agreement may be waived at any time by the party or parties entitled to the
benefit thereof but only by a written notice signed by the party or parties
waiving such terms or conditions.

(b)            Amendment of Agreement.  This Agreement may be amended,
supplemented or interpreted at any time only by written instrument duly executed
by each of the parties hereto.

(c)            Contents of Agreement, Parties in Interest, Assignment.  None of
the rights or obligations of any of the parties hereto may be assigned without
the prior written consent of, in the case of assignment by any of the Seller
Parties, each of the Buyers, or, in the case of assignment by either of the
Buyers, each of the Seller Parties, which consent shall not unreasonably be
withheld.  Notwithstanding the foregoing, either Buyer may assign any of its
rights or obligations to a direct or indirect wholly-owned subsidiary of such
Buyer without the consent of any of the Seller Parties.

(d)           Notices.  All notices, requests, demands and other communications
required or permitted to be given hereunder shall be by hand-delivery, certified
or registered mail, return receipt requested, telecopier (if a telecopier number
is provided), or air courier to the parties set forth below.  Such notices shall
be deemed given at the time personally delivered, if delivered by hand or by
courier, at the time received, if sent certified or registered mail, and when
receipt is acknowledged by telecopy equipment, if telecopied.  Communications
sent via email shall not constitute notice under this Agreement.

 
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If to either Buyer:
Mediware Information Systems, Inc.

 
1900 Spring Road, Suite 450

 
Oak Brook, IL 60523

 
Attn: Senior Vice President and General Counsel

 
Telecopier: (630) 684-0462

 
If to Healthcare Automation:
Healthcare Automation, Inc.

 
41 Sharpe Drive

 
Cranston, RI 02920

 
Attn: David A. Belhumeur

 
Telecopier: (401) 572-3350

 
Email: dbelhumeur@mccabe.com

 
If to Advantage
Advantage Reimbursement, Inc.

 
Reimbursement, Inc.:
40 Shattuck Road Suite 306

 
Andover, MA 01810

 
Attn: David A. Belhumeur

 
Telecopier: (978) 327-6505

 
If to Pereira:
Kenneth J. Pereira

 
41 Sharpe Drive

 
Cranston, RI  02920

 
Telecopier: (401) 572-3350

 
Email:  kpereira@oridium.com

 
with a copy to:
Edward D. Feldstein

 
Roberts, Carroll, Feldstein & Peirce

 
10 Weybosset Street, 8th Floor

 
Providence, RI 02903

 
Email: efeldstein@rcfp.com

 
If to Belhumeur:
David A. Belhumeur

 
41 Sharpe Drive

 
Cranston, RI  02920

 
Telecopier: (401) 572-3350

email: dbelhumeur@mccabe.com

 
with a copy to:
Edward D. Feldstein

 
Roberts, Carroll, Feldstein & Peirce

 
10 Weybosset Street, 8th Floor

 
Providence, RI 02903

 
Email: efeldstein@rcfp.com

 
(e)            Severability.  In the event that any one or more of the
provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions of this Agreement shall not be in any way impaired.

 
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(f)            Counterparts.  This Agreement may be executed in one or more
counterparts and by facsimile transmission, each of which shall be considered an
original instrument, but all of which shall be considered one and the same
agreement, and shall become binding when one or more counterparts have been
signed by each of the parties hereto and delivered to each of the parties
hereto.

(g)            Headings.  The headings of the Sections and the subsections of
this Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.

(h)           Governing Law; Jurisdiction.  IN ALL RESPECTS, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF
REGARDING CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.  EACH OF THE BUYERS AND EACH OF THE SELLER PARTIES EACH AGREE TO SUBMIT
TO PERSONAL JURISDICTION AND TO WAIVE ANY OBJECTION AS TO VENUE IN THE COUNTY OF
COOK, STATE OF ILLINOIS. SERVICE OF PROCESS ON EITHER OF THE BUYERS OR ANY OF
THE SELLER PARTIES IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT
SHALL BE EFFECTIVE IF MAILED TO SUCH PARTY AT THE ADDRESS LISTED ABOVE.

(i)            Waiver of Jury Trial.  BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON, AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.  THEREFORE
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT OR PROCEEDING  BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER
THIS AGREEMENT.

[Remainder of page intentionally left blank]

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
the day and year first above written.

 
MEDIWARE INFORMATION SYSTEMS, INC.
                 
By:
     
Name:
   
Title:
                   
ADVANTAGE REIMBURSEMENT, LLC
                 
By:
     
Name:
   
Title:
                   
HEALTHCARE AUTOMATION, INC.
                 
By:
       
Name:
     
Title:
                   
ADVANTAGE REIMBURSEMENT, INC.
                 
By:
       
Name:
     
Title:
                 
KENNETH J. PEREIRA
                       
DAVID A. BELHUMEUR

 

 
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