ex10_3.htm


    
      

    

    
      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.


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

       

      (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;


      
        
           


        

        
          2

          
            

          

        

        
           


        

      

       

      (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;


      
        
           


        

        
          3

          
            

          

        

        
           


        

      

       

      (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.


      
        
           


        

        
          4

          
            

          

        

        
           


        

      


      


       

      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.


      
        
           


        

        
          5

          
            

          

        

        
           


        

      

       

      
        	
                 
      

              	
                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.


      
        
           


        

        
          6

          
            

          

        

        
           


        

      

       

      (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]


      
        
           


        

        
          7

          
            

          

        

        
           


        

      

       

      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

              


      

       

      
 

    

    8