EX-10.52 STOCK PURCHASE AGREEMENT



 





EXHIBIT 10.52



EXECUTION COPY




STOCK PURCHASE AGREEMENT




BY AND AMONG




PROXYMED, INC.,




COALITION AMERICA, INC.




AND




CCB ACQUISITION, LLC




DATED NOVEMBER 8, 2007




 









 








TABLE OF CONTENTS




	 	 	 	 	 
	Article I Definitions; Interpretation
	 	 	1	 
	1.1 Definitions
	 	 	1	 
	1.2 Interpretation
	 	 	12	 
	Article II Purchase and Sale of Targeted Subsidiaries Equity Interests, Closing, Purchase Price
	 	 	13	 
	2.1 Securities Purchase
	 	 	13	 
	2.2 Consideration
	 	 	13	 
	2.3 Closing
	 	 	13	 
	2.4 Closing Obligations
	 	 	14	 
	2.5 Adjustments
	 	 	19	 
	2.6 Adjustment Procedure
	 	 	19	 
	Article III Representations and Warranties Regarding Seller
	 	 	20	 
	3.1 Organization and Good Standing
	 	 	20	 
	3.2 Enforceability; Authority; No Conflict
	 	 	21	 
	3.3 Capitalization
	 	 	22	 
	3.4 Financial Statements
	 	 	22	 
	3.5 Books and Records
	 	 	23	 
	3.6 Sufficiency of Assets
	 	 	23	 
	3.7 Description of Owned Real Property
	 	 	23	 
	3.8 Description of Leased Real Property
	 	 	23	 
	3.9 Title to Assets; Encumbrances; Assets of the Business
	 	 	23	 
	3.10 Condition of Facilities
	 	 	23	 
	3.11 Accounts Receivable and Accounts Payable
	 	 	24	 
	3.12 Brokers or Finders
	 	 	24	 
	3.13 No Undisclosed Liabilities
	 	 	25	 
	3.14 Taxes
	 	 	25	 
	3.15 No Material Adverse Change
	 	 	26	 
	3.16 Employee Benefits
	 	 	26	 
	3.17 Compliance with Legal Requirements; Governmental Authorizations
	 	 	30	 
	3.18 Legal Proceedings; Orders
	 	 	31	 
	3.19 Absence of Certain Changes and Events
	 	 	32	 
	3.20 Contracts; No Defaults
	 	 	33	 
	3.21 Insurance
	 	 	36	 
	3.23 Employees
	 	 	38	 
	3.24 Labor Disputes; Compliance
	 	 	39	 
	3.25 Intellectual Property Assets
	 	 	40	 
	3.26 SEC Filings; Financial Statements
	 	 	44	 
	3.27 Shareholder Rights Agreement
	 	 	45	 
	3.28 Relationships with Related Persons
	 	 	45	 
	3.29 Solvency
	 	 	45	 
	3.30 Disclosure
	 	 	46	 
	3.31 Prior Acquisitions
	 	 	46	 
	3.32 Customers and Other Relationships
	 	 	46	 
	3.33 Residual Agreements
	 	 	47	 
	Article IV Representations and Warranties of Buyer
	 	 	48	 
	4.1 Organization and Good Standing
	 	 	48	 
	4.2 Authority; No Conflict
	 	 	48	 
	4.3 Certain Proceedings
	 	 	48	 






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	4.4 Brokers or Finders
	 	 	48	 
	4.5 Proxy Statement
	 	 	48	 
	4.6 Financing
	 	 	49	 
	Article V Covenants of Seller Prior to Closing
	 	 	49	 
	5.1 Access and Investigation
	 	 	49	 
	5.2 Operation of the Business of Seller
	 	 	49	 
	5.3 Negative Covenant
	 	 	51	 
	5.4 Required Approvals
	 	 	51	 
	5.5 Notification
	 	 	51	 
	5.6 No Solicitation
	 	 	51	 
	5.7 Commercially Reasonable Best Effort
	 	 	53	 
	5.8 Interim Financial Statements
	 	 	53	 
	5.9 Payment of Liabilities
	 	 	53	 
	5.10 Proxy Statement; Shareholders Meeting
	 	 	53	 
	5.11 Section 338(h)(10) Election
	 	 	54	 
	5.12 Assignment and Contribution
	 	 	55	 
	5.13 Capitalization Certificate
	 	 	55	 
	Article VI Covenants of Buyer Prior to Closing
	 	 	56	 
	6.1 Required Approvals
	 	 	56	 
	6.2 Commercially Reasonable Best Effort
	 	 	56	 
	6.3 Purchase Price Financing
	 	 	56	 
	Article VII Conditions Precedent to Buyer’s Obligation to Close
	 	 	56	 
	7.1 Accuracy of Representations
	 	 	56	 
	7.2 Seller’s Performance
	 	 	56	 
	7.3 Consents
	 	 	56	 
	7.4 Additional Documents
	 	 	57	 
	7.5 No Proceedings; No Injunctions
	 	 	57	 
	7.6 No Conflict
	 	 	58	 
	7.7 Governmental Authorizations
	 	 	58	 
	7.8 Employees
	 	 	58	 
	7.9 Ancillary Agreements
	 	 	58	 
	7.10 Financing
	 	 	58	 
	Article VIII Conditions Precedent to Seller’s Obligation to Close
	 	 	58	 
	8.1 Accuracy of Representations
	 	 	58	 
	8.2 Buyer’s Performance
	 	 	58	 
	8.3 Consents
	 	 	58	 
	8.4 Additional Documents
	 	 	58	 
	8.5 No Injunctions
	 	 	59	 
	8.6 Shareholder Approval
	 	 	59	 
	Article IX Termination
	 	 	59	 
	9.1 Termination Events
	 	 	59	 
	9.2 Effect of Termination
	 	 	60	 
	Article X Additional Covenants
	 	 	61	 
	10.1 Employees and Employee Benefits
	 	 	61	 
	10.2 Payment of All Taxes Resulting from Sale of Assets by Seller
	 	 	63	 
	10.3 Network Affiliate Audit
	 	 	63	 
	10.4 Restrictions on Seller Dissolution and Distributions
	 	 	63	 
	10.5 Removing Excluded Assets
	 	 	63	 
	10.6 Tax Returns
	 	 	64	 
	10.7 Assistance in Proceedings
	 	 	65	 
	10.8 Noncompetition, Nonsolicitation and Nondisparagement
	 	 	65	 






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	10.9 Customer and Other Business Relationships
	 	 	66	 
	10.10 Retention of and Access to Records
	 	 	66	 
	10.11 Further Assurances
	 	 	67	 
	Article XI Indemnification
	 	 	67	 
	11.1 Survival
	 	 	67	 
	11.2 Indemnification and Reimbursement by Seller
	 	 	67	 
	11.3 Indemnification and Reimbursement by Buyer
	 	 	68	 
	11.4 Limitations on Amount
	 	 	69	 
	11.5 Time Limitations
	 	 	69	 
	11.6 Third-Party Claims
	 	 	69	 
	11.7 Other Claims
	 	 	71	 
	11.8 Indemnification in Case of Strict Liability or Indemnitee Negligence
	 	 	71	 
	Article XII General Provisions
	 	 	71	 
	12.1 Expenses
	 	 	71	 
	12.2 Public Announcements
	 	 	72	 
	12.3 Notices
	 	 	72	 
	12.4 Jurisdiction; Service of Process
	 	 	73	 
	12.5 Enforcement of Agreement
	 	 	73	 
	12.6 Waiver; Remedies Cumulative
	 	 	73	 
	12.7 Entire Agreement and Modification
	 	 	73	 
	12.8 Schedules
	 	 	74	 
	12.9 Assignments, Successors and No Third-Party Rights
	 	 	74	 
	12.10 Severability
	 	 	74	 
	12.11 Construction
	 	 	74	 
	12.12 Time of Essence
	 	 	74	 
	12.13 Governing Law
	 	 	74	 
	12.14 Execution of Agreement
	 	 	74	 






Exhibits




	 	 	 
	Exhibit 1.1

	 	Excluded Assets
	Exhibit 2.4(a)(ii)

	 	Form of Intellectual Property Assignment Agreement
	Exhibit 2.4(a)(viii)

	 	Form of Contribution Agreement
	Exhibit 2.4(a)(xxiv)

	 	Form of Legal Opinion of Counsel to Seller
	Exhibit 5.12

	 	Retained Liabilities
	Exhibit 9.1(l)

	 	Merrill Lynch Letter






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STOCK PURCHASE AGREEMENT




     This STOCK PURCHASE AGREEMENT (“Agreement”) is dated November 8, 2007, by and among
CCB Acquisition, LLC, a Delaware limited liability company (“Buyer”), Coalition America,
Inc., a Georgia corporation (“CAI”) and ProxyMed, Inc., a Florida corporation doing business as
MedAvant (“Seller”).



RECITALS 




     WHEREAS, Buyer desires to purchase, and Seller desires to sell, the Business, which is, or
will be wholly-contained in the Targeted Subsidiaries for the consideration and pursuant to the
terms and conditions set forth in this Agreement;



     WHEREAS, Seller owns, directly or indirectly, all of the Equity Interests in the Targeted
Subsidiaries, and



     WHEREAS, the Buyer desires to purchase, and Seller desires to sell, all of the Equity
Interests in the Targeted Subsidiaries, for the consideration and pursuant to the terms and
conditions set forth in this Agreement;



     NOW, THEREFORE, for and in consideration of the mutual premises and covenants herein
contained, and for other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged conclusively, the parties, intending to be legally bound, agree as follows:



ARTICLE I

DEFINITIONS; INTERPRETATION




     1.1 Definitions. For purposes of this Agreement, the following terms and variations
thereof have the meanings specified or referred to in this Section 1.1:



     “Accounts Payable Report” is defined in Section 2.4(a)(xix).



     “Accounts Receivable” means (a) all trade accounts receivable and other rights to
payment from customers of Seller and the Seller Subsidiaries in the case of Seller as relates to
the Business notwithstanding whether held by Seller or any Seller Subsidiary and the full benefit
of all security for such accounts or rights to payment, including all trade accounts receivable
representing amounts receivable in respect of the Business, (b) all other accounts or notes
receivable of Seller and any Subsidiary, in each case as relates to the Business notwithstanding
whether held by Seller or any Seller Subsidiary and the full benefit of all security for such
accounts or notes, and (c) any claim, remedy or other right related to any of the foregoing, each
as relates to the Assets.



     “Acquisition Proposal” means any proposal or offer from any Person other than CAI or
Buyer relating to any direct or indirect acquisition of (A) the Business or any of the Assets,
including the sale of all or any part of the Targeted Subsidiaries’ Equity Interests, the merger or
consolidation of any of the Targeted Subsidiaries or the sale of the Business or any of the Assets;
(B) the acquisition of more than 15% or more of the outstanding capital stock of Seller, whether
directly or indirectly, through purchase, merger, consolidation, or otherwise; (C) any tender offer
or exchange offer, as defined pursuant to the Exchange Act, that, if consummated, would result in
any Person beneficially owning 15% or more of any class of equity securities of Seller; or (D)
any proposal or offer from any Person other than CAI or Buyer regarding any merger,
consolidation, business combination, recapitalization, liquidation, dissolution or



1









 







similar transaction involving Seller, other than the transactions contemplated by this Agreement.
Notwithstanding the foregoing, a proposal that would otherwise constitute an Acquisition Proposal
under (B), (C) or (D) above shall not be deemed to constitute an Acquisition Proposal if such
proposal specifically authorizes and permits and does not in any way restrict Seller’s sale of the
Business, Targeted Subsidiaries and Assets to the Buyer and, in the case of a proposal described in
(B) or (C), includes an agreement by such Person or Person making the proposal to vote all shares
of Seller’s stock that it beneficially owns (as defined in the Exchange Act) in favor of the
consummation of the Contemplated Transactions and this Agreement.



     “Affiliate” of a specified Person means a Person who directly, or indirectly through
one or more intermediaries, Controls, is controlled by or is under common control with such
specified Person.



     “Appurtenances” means all privileges, rights, easements, hereditaments and
appurtenances belonging to or for the benefit of the Land, including all easements appurtenant to
and for the benefit of any Land (a “Dominant Parcel”) for, and as the primary means of access
between, the Dominant Parcel and a public way, or for any other use upon which lawful use of the
Dominant Parcel for the purposes for which it is presently being used is dependent, and all rights
existing in and to any streets, alleys, passages and other rights-of-way included thereon or
adjacent thereto (before or after vacation thereof) and vaults beneath any such streets.



     “Assets” means all property and assets, real, personal or mixed, tangible and
intangible, of every kind and description, wherever located, related to, used in, or necessary to,
in any way, the Business, including all net operating losses held by Seller, including any Seller
Subsidiary, and the Lawson accounts receivable software system and related hardware, other than the
Excluded Assets.



     “Assignment and Assumption of Lease” is defined in Section
2.4(a)(ix).



     “Associated Accounts Payable” is defined in Section 2.4(a)(xix).



     “Balance Sheet” is defined in Section 3.4.



     “Breach” means any breach of, or any inaccuracy in, any representation or warranty or
any breach of, or failure to perform or comply with, any covenant or obligation, in or of this
Agreement or any other Contract, or any event which with the passing of time or the giving of
notice, or both, would constitute such a breach, inaccuracy or failure.



     “Business” means the business of cost containment, including re-pricing, of medical
claims among healthcare providers and insurance and other payers, including the preferred provider
organization(s) operated or owned by Seller or any Seller Subsidiary, including the Targeted
Subsidiaries, including all Assets.



     “Business Day” means any day other than (a) Saturday or Sunday, or (b) any other day
on which banks in the State of Georgia are permitted or required to be closed.



     “Buyer” is defined in the first paragraph of this
Agreement.



     “Buyer Indemnified Persons” is defined in Section
11.2.



     “CAI Termination Fee” is defined in Section 12.1(b).



     “Closing” is defined in Section 2.3.



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     “Closing Date” means the date on which the Closing actually takes place.



     “COBRA” is defined in Section 3.16(f).



     “Code” means the Internal Revenue Code of 1986, as amended from time to time.



     “Confidential Information” means confidential information of any kind or nature
whatsoever, whether written or oral, including financial information, trade secrets, customer
lists, know-how and other proprietary information, which information is not generally available to
the public.



     “Consent” means any approval, consent, ratification, waiver or other authorization.



     “Contemplated Transactions” means all of the transactions contemplated by this
Agreement.



     “Contract” means any agreement, contract, Lease, consensual obligation, promise or
undertaking, whether written or oral and whether express or implied and whether or not legally
binding.



     “Contribution Agreement” is defined in Section 2.4(a)(viii).



     “Control” (including the terms “controlled by” and “under common control”) means the
possession, directly or indirectly, or as a trustee or executor, of the power to direct or cause
the direction of the management and policies of a Person, whether through the ownership of voting
securities, as trustee, executor, by contract or credit arrangement or otherwise.



     “Copyrights” is defined in Section
3.25(a)(iii).



     “Covert Release” is defined in Section
2.4(a)(xvi).



     “Damages” is defined in Section 11.2.



     “Effective Time” means 5:00 p.m., Eastern time, on the Closing Date.



     “Employment Agreements” means those employment agreements in form and substance
reasonably satisfactory to Buyer and Seller, to be offered to the Key Employees.



     “Employee Leasing Agreement” is defined in Section 2.4(a)(xxii).



     “Employee Plans” is defined in Section 3.16(a).



     “Encumbrance” means any charge, claim, condition, equitable interest, lien, option,
pledge, security interest, mortgage, right of way, easement, encroachment, servitude, right of
first option, right of first refusal or similar restriction, including any restriction on use,
voting (in the case of any security or Equity Interest), transfer, receipt of income or exercise of
any other attribute of ownership.



     “Environment” means soil, land surface or subsurface strata, surface waters (including
navigable waters and ocean waters), groundwaters, drinking water supply, stream sediments, ambient
air (including indoor air), plant and animal life and any other environmental medium or natural
resource.



     “Environmental, Health and Safety Liabilities” means any cost, damages, expense,
liability, obligation or other responsibility arising from or under any Environmental Law or
Occupational Safety and Health Law, including those consisting of or relating to:



3









 





          (a) any environmental, health or safety matter or condition (including on-site or off-site
contamination, occupational safety and health and regulation of any chemical substance or product);




          (b) any fine, penalty, judgment, award, settlement, legal or administrative proceeding,
damages, loss, claim, demand or response, remedial or inspection cost or expense arising under any
Environmental Law or Occupational Safety and Health Law;




          (c) financial responsibility under any Environmental Law or Occupational Safety and Health Law
for cleanup costs or corrective action, including any cleanup, removal, containment or other
remediation or response actions (“Cleanup”) required by any Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or requested by any
Governmental Body or any other Person) and for any natural resource damages; or




          (d) any other compliance, corrective or remedial measure required under any Environmental Law
or Occupational Safety and Health Law.




     The terms “removal,” “remedial” and “response action” include the types of activities covered
by the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980
(“CERCLA”).



     “Environmental Law” means any Legal Requirement that requires or relates to:



          (a) advising appropriate authorities, employees or the public of intended or actual Releases
of pollutants or hazardous substances or materials, violations of discharge limits or other
prohibitions and the commencement of activities, such as resource extraction or construction, that
could have significant impact on the Environment;




          (b) preventing or reducing to acceptable levels the Release of pollutants or hazardous
substances or materials into the Environment;




          (c) reducing the quantities, preventing the Release or minimizing the hazardous
characteristics of wastes that are generated;




          (d) assuring that products are designed, formulated, packaged and used so that they do not
present unreasonable risks to human health or the Environment when used or disposed of;




          (e) protecting resources, species or ecological amenities;




          (f) reducing to acceptable levels the risks inherent in the transportation of hazardous
substances, pollutants, oil or other potentially harmful substances;




          (g) cleaning up pollutants that have been Released, preventing the Threat of Release or paying
the costs of such clean up or prevention; or




          (h) making responsible parties pay private parties, or groups of them, for damages done to
their health or the Environment or permitting self-appointed representatives of the public interest
to recover for injuries done to public assets.




     “Epicor Agreement” is defined in Section 2.4(a)(xxv).



4









 





     “Equity Interest” means all interest in, and rights to, the equity of an entity,
including capital stock, partnership interests, membership interests and all rights to, or rights
to acquire Equity Interests.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.



     “Escrow Agent” means SunTrust Bank.



     “Escrow Agreement” is defined in Section 2.4(a)(vi).



     “Escrow Fund” is defined in Section 2.4.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time.



     “Excluded Assets” shall mean the Assets set listed on Exhibit 1.1 hereto.



     “Facilities” means any real property, leasehold or other interest in real property
currently owned or operated by Seller, including any Seller Subsidiary related to, used in, or
necessary to in any way, the Business, including the Tangible Personal Property used or operated by
Seller at the respective locations of the Real Property specified in Section 3.8. Notwithstanding
the foregoing, for purposes of the definitions of “Hazardous Activity” and “Remedial Action” and
Sections 3.22 and 11.3, “Facilities” shall mean any real property, leasehold or other
interest in real property currently or formerly owned or operated by Seller, including the Tangible
Personal Property used or operated by Seller at the respective locations of the Real Property
specified in Section 3.8.



     “Fairness Opinion” is defined in Section 2.4(a)(xi).



     “Former MR Members” is defined in Section 2.4(a)(xiii).



     “GAAP” means generally accepted accounting principles for financial reporting in the United
States, applied on a consistent basis.



     “Governing Documents” means, with respect to any particular entity, (a) if a
corporation, the articles or certificate of incorporation and the bylaws; (b) if a general
partnership, the partnership agreement and any statement of partnership; (c) if a limited
partnership, the limited partnership agreement and the certificate of limited partnership; (d) if a
limited liability company, the articles of organization and operating agreement or regulations; (e)
if another type of Person, any other charter or similar document adopted or filed in connection
with the creation, formation or organization of the Person; (f) all equity holders’ agreements,
voting agreements, voting trust agreements, joint venture agreements, registration rights
agreements or other agreements or documents relating to the organization, management or operation
of any Person or relating to the rights, duties and obligations of the equity holders of any
Person; and (g) any amendment or supplement to any of the foregoing.



     “Governmental Authorization” means any Consent, license, registration or permit
issued, granted, given or otherwise made available by or under the authority of any Governmental
Body or pursuant to any Legal Requirement.



     “Governmental Body” means any:



          (a) nation, state, county, city, town, borough, village, district or other
jurisdiction;




5









 








          (b) federal, state, local, municipal, foreign or other government;




          (c) governmental or quasi-governmental authority of any nature (including any agency, branch,
department, board, commission, court, tribunal or other entity exercising governmental or
quasi-governmental powers);




          (d) multinational organization or body;




          (e) body exercising, or entitled or purporting to exercise, any administrative, executive,
judicial, legislative, police, regulatory or taxing authority or power; or




          (f) official of any of the foregoing.




     “Ground Lease” means any long-term Lease of land in which most of the rights and
benefits comprising ownership of the land and the improvements thereon or to be constructed
thereon, if any, are transferred to the tenant for the term thereof.



     “Ground Lease Property” means any land, improvements and appurtenances subject to a
Ground Lease in favor of Seller.



     “Hazardous Activity” means the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release, storage, transfer,
transportation, treatment or use (including any withdrawal or other use of groundwater) of
Hazardous Material in, on, under, about or from any of the Facilities or any part thereof into the
Environment and any other act, business, operation or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm, to persons or property on or off the Facilities.



     “Hazardous Material” means any substance, material or waste which is or will
foreseeably be regulated by any Governmental Body, including any material, substance or waste which
is defined as a “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely
hazardous waste,” “restricted hazardous waste,” “contaminant,” “toxic waste” or “toxic substance”
under any provision of Environmental Law, and including petroleum, petroleum products, asbestos,
presumed asbestos-containing material or asbestos-containing material, urea formaldehyde and
polychlorinated biphenyls.



     “HIPAA” is defined in Section 3.17(b)(iv).



     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act, as amended from time
to time.



     “Improvements” means all buildings, structures, fixtures and improvements located on
the Land or included in the Assets, including those under construction.



     “Indemnified Person” is defined in Section 11.6.



     “Indemnifying Person” is defined in Section 11.6.



     “Intellectual Property Assets” is defined in Section 3.25(a).



     “Interim Balance Sheet” is defined in Section 3.4.



     “IRS” means the United States Internal Revenue Service and, to the extent relevant,
the United States Department of the Treasury.



6









 





     “Key Employees” means those individuals to be determined by Buyer as soon as
practicable after the date of this Agreement, but in no event later than December 15, 2007, to whom
Buyer or CAI shall offer an Employment Agreement.



     “Knowledge” means an individual will be deemed to have Knowledge of a particular fact
or other matter if:



          (a) that individual is actually aware of that fact or matter; or




          (b) a prudent individual in a similar position could be expected to know or be aware of such
fact or matter, after reasonable investigation, in the course of conducting the responsibilities
associated with such position.




A Person (other than an individual) will be deemed to have Knowledge of a particular fact or other
matter if any individual who is serving, or who has at any time served, as a director, officer,
partner, executor or trustee of that Person (or in any similar capacity) has, or at any time had,
Knowledge of that fact or other matter (as set forth in (a) and (b) above); provided, however, that
with respect to Seller and each Targeted Subsidiary, Seller or such Targeted Subsidiary will be
deemed to have Knowledge of a particular fact or other matter only if John Lettko, Peter Fleming,
III, Gerry Hayden, Dave Reilly, Lonnie Hardin, Stacy Evans, Matt Lungen, Emily Piertzak, Eric
Arnson, Eric Johnson or Ford Pearson have Knowledge of such fact or other matter (as set forth in
(a) and (b) above).



     “Land” means all parcels and tracts of land in which Seller or any of the Seller
Subsidiaries has an ownership interest.



     “Laurus Consent” is defined in Section 2.4(a)(iv).



     “Lease” means any Real Property Lease or any lease or rental agreement, license, right
to use or installment and conditional sale agreement to which Seller is a party and any other
Seller Contract pertaining to the leasing or use of any Tangible Personal Property.



     “Legal Requirement” means any federal, state, local, municipal, foreign,
international, multinational or other constitution, law, ordinance, principle of common law, code,
regulation, statute or treaty.



     “Liability” means, with respect to any Person, any liability or obligation of such
Person of any kind, character or description, whether known or unknown, absolute or contingent,
accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured,
joint or several, due or to become due, vested or unvested, executory, determined, determinable or
otherwise, and whether or not the same is required to be accrued on the financial statements of
such Person.



     “Marks” is defined in Section 3.25(a)(i).



     “Material Adverse Change” means any event, change, or effect that has occurred which
has a material adverse effect upon the condition (financial or otherwise), business, results of
operations, or prospects of the Targeted Subsidiaries or the Business, taken as a whole, other than
events, changes, effects, conditions or circumstances resulting from or relating to (a) any change
that is generally applicable to the economy or the healthcare industry, (b) changes in GAAP
accounting rules and procedures or (c) compliance with the terms of, or the taking of any
action expressly required by this Agreement; provided, however, that for purposes of clauses (a)
and (b), to the extent that such exception does not disproportionately affect the Targeted
Subsidiaries or the Business, taken as a whole. Without



7









 







limiting the generality of the foregoing, a Material Adverse Change will be deemed to have occurred
if, for any reason, the average monthly cash collections of the Seller (as relates to the Business)
and the Targeted Subsidiaries decline by more than 20% from the average cash collections per month
of the Seller (as relates to the Business) and the Targeted Subsidiaries during the twelve months
ending September 30, 2007 as set forth on Schedule 3.32(d).



     “Material Consents” is defined in Section 7.3.



     “Medical Resource Member Escrow Agent” is defined in Section 2.4(a)(xiii).



     “Medical Resource Member Note” is defined in Section 2.4(a)(xiii).



     “Medical Resource Member Release” is defined in Section 2.4(a)(xiii).



     “Metropolitan
Life Release” is defined in Section 2.4(a)(xx).



     “NYDTF” is defined in Section 2.4(a)(xv).



     “NYDTF Agreement” is defined in Section
2.4(a)(xv).



     “NYDTF Payoff Letter” is defined in Section
2.4(a)(xv).



     “NYDTF Release” is defined in Section 2.4(a)(xv).



     “Occupational Safety and Health Law” means any Legal Requirement designed to provide
safe and healthful working conditions and to reduce occupational safety and health hazards,
including the Occupational Safety and Health Act, and any program, whether governmental or private
(such as those promulgated or sponsored by industry associations and insurance companies), designed
to provide safe and healthful working conditions.



     “Order” means any order, injunction, judgment, decree, ruling, assessment or
arbitration award of any Governmental Body or arbitrator.



     “Ordinary Course of Business” means an action taken by a Person will be deemed to have
been taken in the Ordinary Course of Business only if that action:



     (a) is consistent in nature, scope and magnitude with the past practices of such Person and is
taken in the ordinary course of the normal, day-to-day operations of such Person;



     (b) does not require authorization by the board of directors or shareholders of such Person
(or by any Person or group of Persons exercising similar authority) and does not require any other
separate or special authorization of any nature; and



     (c) is similar in nature, scope and magnitude to actions customarily taken, without any
separate or special authorization, in the ordinary course of the normal, day-to-day operations of
other Persons that are in similar lines of business as such Person.



     “Patents” is defined in Section 3.25(a)(ii).



     “Permitted Encumbrances” is defined in Section 3.9.



8









 





     “Person” means an individual, partnership, corporation, business trust, limited
liability company, limited liability partnership, joint stock company, trust, unincorporated
association, joint venture or other entity or a Governmental Body.



     “PPO” means a preferred provider organization.



     “Proceeding” means any action, arbitration, audit, hearing, inquiry (written or oral),
investigation, litigation or suit (whether civil, criminal, administrative, judicial or
investigative, whether formal or informal, whether public or private) pending, commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental Body, arbitrator or
mediator.



     “Purchase Price” is defined in Section 2.2.



     “RCI ” is defined in Section
2.4(a)(xiv).



     “RCI Note” is defined in Section
2.4(a)(xiv).



     “RCI Note Payoff Letter” is defined in Section 2.4(a)(xiv).



     “RCI Release” is defined in Section 2.4(a)(xiv).



     “Real Property” means the Land and Improvements and all Appurtenances thereto and any
Ground Lease Property.



     “Real Property Lease” means any Ground Lease or Space Lease.



     “Record” means information that is inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable form.



     “Related Person” means



          (a) with respect to a particular individual:





     (i) each other member of such individual’s Family (as defined below);




     (ii) any Person that is directly or indirectly controlled by any one or more members
of such individual’s Family;




     (iii) any Person in which members of such individual’s Family hold (individually or in
the aggregate) a Material Interest; and




     (iv) any Person with respect to which one or more members of such individual’s Family
serves as a director, officer, partner, executor or trustee (or in a similar capacity).



          (b) With respect to a specified Person other than an individual:





     (i) any Person that directly or indirectly controls, is directly or indirectly
controlled by or is directly or indirectly under common control with such specified Person;




     (ii) any Person that holds a Material Interest (as defined below) in such specified
Person;



9









 






     (iii) each Person that serves as a director, officer, partner, executor or trustee of
such specified Person (or in a similar capacity);




     (iv) any Person in which such specified Person holds a Material Interest;
and




     (v) any Person with respect to which such specified Person serves as a general partner
or a trustee (or in a similar capacity).


For
purposes of this definition: (a) “control” (including “controlling,”
“controlled by,” and “under common control with”) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise, and shall be
construed as such term is used in the rules promulgated under the Securities Act; (b) the “Family”
of an individual includes (i) the individual, (ii) the individual’s spouse, (iii) any other natural
person who is related to the individual or the individual’s spouse within the second degree, and
(iv) any other natural person who resides with such individual; and (c) “Material Interest”
means direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of
voting securities or other voting interests representing at least ten percent (10%) of the
outstanding voting power of a Person or equity securities or other Equity Interests representing at
least ten percent (10%) of the outstanding equity securities or Equity Interests in a Person.




     “Release” means any release, spill, emission, leaking, pumping, pouring, dumping,
emptying, injection, deposit, disposal, discharge, dispersal, leaching or migration on or into the
Environment or into or out of any property.



     “Remedial Action” means all actions, including any capital expenditures, required or
voluntarily undertaken: (a) to clean up, remove, treat or in any other way address any Hazardous
Material or other substance; (b) to prevent the Release or Threat of Release or to minimize the
further Release of any Hazardous Material or other substance so it does not migrate or endanger or
threaten to endanger public health or welfare or the Environment; (c) to perform pre-remedial
studies and investigations or post-remedial monitoring and care; or (d) to bring all Facilities and
the operations conducted thereon into compliance with Environmental Laws and environmental
Governmental Authorizations.



     “Representative” means, with respect to a particular Person, any director, officer,
manager, employee, agent, consultant, advisor, accountant, financial advisor, investment banker,
legal counsel or other representative of that Person.



     “Residual Agreements” is defined in Section 3.33.



     “Residual Recipients” is defined in Section 3.33.



     “Restricted Material Contracts” is defined in
Section 2.10.



     “Retained Liabilities” is defined in Section 5.12.



     “Schedule” means a schedule to this Agreement, including, without limitation, the disclosure
schedules delivered by Seller to Buyer pursuant to Article III concurrently with the execution and
delivery of this Agreement.



     “SEC” means the United States Securities and Exchange Commission.



     “Section” means a section of this Agreement.



10









 





     “Securities Act” means the Securities Act of 1933, as amended from time to time.



     “Seller” is defined in the first paragraph of this Agreement.



     “Seller Board Approval” means approval of, and recommendation to the Stockholders of
Seller by, the board of directors of Seller of this Agreement and the Contemplated Transactions.



     “Seller Contract” means any Contract arising from, related to, used in, or necessary
for, the Business (a) under which Seller or any Seller Subsidiary has or may acquire any rights or
benefits, (b) under which Seller or any Seller Subsidiary has or may become subject to any
obligation or liability, or (c) by which Seller or any Targeted Subsidiary or any of the Assets
owned or used by Seller or any Seller Subsidiary is or may become bound.



     “Seller Employment Liabilities” is defined in Section 10.1(e)(iii).



     “Seller SEC Reports” is defined in Section 3.26(a).



     “Seller Subsidiary” means any Subsidiary of Seller, including the Targeted
Subsidiaries.



     “Seller Termination Fee” is defined in Section 12.1(b).



     “Shareholder Approval” is defined in Section 8.6.



     “Software” means all computer software and subsequent versions thereof, including
source code, object, executable or binary code, objects, comments, screens, user interfaces, report
formats, templates, menus, buttons and icons and all files, data, materials, manuals, design notes
and other items and documentation related thereto or associated therewith.



     “Space Lease” means any lease or rental agreement pertaining to the occupancy of any
improved space on any Land.



     “Subsidiary” means, with respect to any Person (the “Owner”), any corporation or other
Person of which securities or other interests having the power to elect a majority of that
corporation’s or other Person’s board of directors or similar governing body, or otherwise having
the power to direct the business and policies of that corporation or other Person (other than
securities or other interests having such power only upon the happening of a contingency that has
not occurred), are held by the Owner or one or more of its Subsidiaries.



     “Superior Proposal” means any Acquisition Proposal not in violation of Section 5.6
that (i) relates to the acquisition of more than 50% of the outstanding shares of Seller’s capital
stock, whether through purchase, merger, consolidation, or otherwise, or all or substantially all
of the Assets or the Business, (ii) is not subject to any financing condition and is made by a
Person who Seller’s Board of Directors has reasonably concluded in good faith will have adequate
sources of financing to consummate such Superior Proposal, and (iii) is on terms that Seller’s
Board of Directors determines in its good faith judgment (after receiving the advice of its
financial advisor) are more favorable, from a financial point of view, to Seller’s shareholders
than this Agreement and the Contemplated Transactions, taken as a whole.



     “Tangible Personal Property” means all machinery, equipment, tools, furniture, office
equipment, computer hardware, supplies, materials, vehicles and other items of tangible personal
property of every kind owned or leased by Seller (wherever located and whether or not carried on
Seller’s books), together with any express or implied warranty by the manufacturers or sellers
or lessors of any item or component




11











 




part thereof and all maintenance records and other documents relating thereto relating to, or
affecting in any way, the Business.




     “Targeted Subsidiaries” means all Seller Subsidiaries, whether direct or indirect,
engaged in the Business, including Plan Vista Solutions, Inc. (f/k/a National Preferred Provider
Network, Inc.), a New York corporation (“PSI”), National Network Services, LLC (f/k/a National
Network Services, Inc.), a Delaware limited liability company (“NNS”), PlanVista Corporation (f/k/a
HealthPlan Services Corporation), a Delaware corporation (“PlanVista”). Medical Resource, LLC, a
Delaware limited liability company (“Medical Resource”) and National Provider Network, Inc., a
Delaware corporation (“National Provider”) each, a “Targeted Subsidiary”.



     “Tax” means any income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, property, environmental, windfall profit, customs, vehicle, airplane,
boat, vessel or other title or registration, capital stock, franchise, employees’ income
withholding, foreign or domestic withholding, social security, unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added, alternative, add-on
minimum, estimated, or other tax, fee, assessment, levy, tariff, charge or duty of any kind
whatsoever and any interest, penalty, addition or additional amount thereon imposed, assessed or
collected, whether disputed or not, by or under the authority of any Governmental Body or payable
under any tax-sharing agreement or any other Contract.



     “Tax Return” means any return (including any information return), report, statement, schedule,
notice, form, declaration, claim for refund or other document or information (including any
amendment thereof) filed with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection or payment of any
Tax or in connection with the administration, implementation or enforcement of or compliance with
any Legal Requirement relating to any Tax.



     “Third Party” means a Person that is not a party to this Agreement.



     “Third-Party Claim” means any claim against any Indemnified Person by a Third Party,
whether or not involving a Proceeding.



     “Threat of Release” means a reasonable likelihood of a Release that may require action
in order to prevent or mitigate damage to the Environment that may result from such Release.



     “Transferred Technology” means the Intellectual Property Assets included in the
Assets.



     “Transition Services Agreement” is defined in Section 2.4(a)(vii).



     “WARN Act” is defined in Section 3.23(d).



     1.2 Interpretation. In this Agreement, unless a clear contrary intention
appears:



               (i) the singular number includes the plural number and vice versa;



               (ii) reference to any Person includes such Person’s successors and assigns but,
if applicable, only if such successors and assigns are not prohibited by this Agreement;



               (iii) reference to any gender includes each other gender;



12









 





               (iv) reference to any agreement, document or instrument means such agreement, document
or instrument as amended or modified and in effect from time to time in accordance with the
terms thereof;



               (v) reference to any Legal Requirement means such Legal Requirement as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect from time to
time, including rules and regulations promulgated thereunder, and reference to any section
or other provision of any Legal Requirement means that provision of such Legal Requirement
from time to time in effect and constituting the substantive amendment, modification,
codification, replacement or reenactment of such section or other provision;



               (vi) “hereunder,” “hereof,” “hereto,” and words of similar import shall be deemed
references to this Agreement as a whole and not to any particular Article, Section or other
provision hereof;



               (vii) “including” (and with correlative meaning “include”) means including without
limiting the generality of any description preceding or relating to such term;



               (viii) “or” is used in the inclusive sense of “and/or”;



               (ix) with respect to the determination of any period of time, “from” means “from and
including” and “to” means “to but excluding”; and



               (x) references to documents, instruments or agreements shall be deemed to refer as
well to all addenda, exhibits, schedules or amendments thereto.



ARTICLE II

PURCHASE AND SALE OF TARGETED SUBSIDIARIES

EQUITY INTERESTS, CLOSING, PURCHASE PRICE




     2.1 Securities Purchase. Pursuant to the terms and subject to the conditions set forth
in this
Agreement, at the Closing, but effective as of the Effective Time, Seller shall sell, convey,
assign, transfer
and deliver to Buyer, and Buyer shall purchase and acquire from Seller, free and clear of any
Encumbrances other than Permitted Encumbrances, all of Seller’s right, title and interest in
and to the
Equity Interests of the Targeted Subsidiaries.



     2.2 Consideration. Subject to adjustment as set forth herein, the consideration for
the Equity
Interests of the Targeted Subsidiaries (the “Purchase Price”) will be Twenty Three Million
Five Hundred
Thousand dollars ($23,500,000). At the Closing, the Purchase Price shall be delivered by Buyer
to Seller
as set forth in Section 2.4(b). The Purchase Price will be increased or decreased pursuant to
the final
determination of the Final Purchase Price pursuant to Section 2.5 and Section 2.6, which shall
be paid in
accordance with Section 2.6.



     2.3 Closing. The consummation of the purchase and sale provided for in this Agreement
(the
“Closing”) will take place at the offices of Morris, Manning & Martin, LLP, at 3343 Peachtree
Road,
Atlanta, Georgia 30326, commencing at 10:00 a.m. (local time) on a date to be specified by
Buyer or
Seller no later than three (3) Business Days after all of the closing conditions set forth in
Article VII and
Article VIII have been satisfied or waived (if waivable), but in no event later than April 15,
2008, unless
Buyer and Seller otherwise agree. Subject to the provisions of
Article IX, failure to
consummate the
purchase and sale provided for in this Agreement on the date and time and at the place
determined
pursuant to this Section 2.3 will not result in the termination of this Agreement and will not
relieve any



13









 







party of any obligation under this Agreement. In such a situation, the Closing will occur as soon
as practicable, subject to Article IX (Termination).



     2.4 Closing Obligations. In addition to any other documents to be delivered
under other provisions of this Agreement, at the Closing:



          (a) Seller shall deliver to Buyer, together with funds sufficient to pay all Taxes
necessary for the transfer, filing or recording thereof:




               (i) the certificates representing all of the Equity Interests of each Targeted
Subsidiary, endorsed in blank or accompanied by a duly executed stock power;



               (ii) assignments of all Intellectual Property Assets owned by Seller that are related
to, used in or necessary for, the Business and separate assignments of all registered
Marks, Patents and Copyrights in the form of Exhibit 2.4(a)(ii) executed by Seller;



               (iii) such other deeds, bills of sale, assignments, certificates of title, documents
and other instruments of transfer and conveyance as may reasonably be requested by Buyer,
each in form and substance satisfactory to Buyer, in each case that relates to the Business
as Equity Interests, and its legal counsel and executed by Seller;



               (iv) a payoff letter and consent (the “Laurus Consent”) executed by Laurus Master
Fund, Ltd., Seller and Buyer in form and substance reasonably satisfactory to Buyer,
releasing Buyer, CAI, the Targeted Subsidiaries and the Assets from any and all debt,
obligation, liability or Encumbrance, under the Security and Purchase Agreement, dated as
of December 6, 2005, as amended, by and among the Laurus Master Fund, Ltd., Seller,
ProxyMed Transaction Services, LLC, PlanVista, PSI, NNS, Medical Resource and National
Provider, and all other notes and transaction documents executed in connection therewith,
in each case, upon the payment to Laurus Master Fund, Ltd. (or its designee) made pursuant
to Section 2.4(b)(i)(L) below;



               (v) [Reserved];



               (vi) an escrow agreement in the form reasonably satisfactory to the parties hereto, in
accordance with the terms of this Agreement, other than any changes that are reasonably
required by the Escrow Agent, executed by Seller and the Escrow Agent (the “Escrow
Agreement”);



               (vii) a transition services agreement in the form reasonably satisfactory to the
parties hereto, executed by Seller and Buyer (the “Transition
Services Agreement”);



               (viii) a contribution and assignment and assumption agreement in the form of
Exhibit 2.4(a)(viii), executed by each Targeted Subsidiary and Seller (the
“Contribution Agreement”);



               (ix) for
each interest in Real Property identified on Schedule 3.8, an
Assignment and Assumption of Lease in the form reasonably satisfactory to the parties
hereto, executed by Seller and/or the appropriate Targeted Subsidiary (the “Assignment
and Assumption of Lease”);



14









 





               (x) a copy of the fairness opinion delivered to the Seller by Cain Brothers & Company, LLC
(the “Fairness Opinion”);



               (xi) a certificate executed by Sellers as to the accuracy of their representations and
warranties, as of the date of this Agreement, and as of the Closing, in accordance with Section
7.1 and as to their compliance with and performance of their covenants and obligations to be
performed or complied with at or before the Closing in accordance with Section 7.2;



               (xii) a certificate of the Secretary of Seller certifying, as complete and accurate as of the
Closing, attached copies of the Governing Documents of Seller, certifying and attaching all
requisite resolutions or actions of Seller’s board of directors and shareholders approving the
execution and delivery of this Agreement and the consummation of the Contemplated Transactions and
certifying to the incumbency and signatures of the officers of Seller executing this Agreement and
any other document relating to the Contemplated Transactions and accompanied by the requisite
documents for amending the relevant Governing Documents of Seller required to effect such change of
name in form sufficient for filing with the appropriate Governmental Body; and



               (xiii) either (A) a release (the “Medical Resource Member Release”) executed by each
former member of Medical Resource listed as a Payee (as defined in the Medical Resource Member
Note) on Exhibit A (the “Former MR Members”) to the Promissory Note dated October 10, 2006 (the
“Medical Resource Member Note”), in the original aggregate principal amount of $1,000,000,
in form and substance satisfactory to Buyer unconditionally and irrevocably releasing Buyer, CAI,
the Targeted Subsidiaries and the Assets (without any condition or payment obligation) from any
and all debt, obligation, liability or Encumbrance, including under the Medical Resource Member
Note or otherwise or (B) a payoff letter (the “Medical Resource Member Note Payoff Letter”) from
the Former MR Members with respect to any outstanding indebtedness of Seller and any Seller
Subsidiary under the Medical Resource Member Note in form and substance satisfactory to Buyer,
releasing Buyer, CAI, the Targeted Subsidiaries and the Assets from any and all debt, obligation,
liability or Encumbrance, under the Medical Resource Member Note or otherwise upon the payment to
the escrow agent named in the Medical Resource Member Note (the “Medical Resource Member Note
Escrow Agent”) made pursuant to Section 2.4(b)(i)(A) below;



               (xiv) either (A) a release (the “RCI Release”) executed by Residential Health Care, Inc.
(“RCI”) in form and substance satisfactory to Buyer unconditionally and irrevocably releasing
Buyer, CAI, the Targeted Subsidiaries and the Assets (without any condition or payment obligation)
from any and all debt, obligation, liability or Encumbrance, including under the Promissory Note
dated October 10,2006 (the “RCI Note”), in the original aggregate principal amount of $ 1,000,000
or (B) a payoff letter (the “RCI Note Payoff Letter”) from RCI with respect to any outstanding
indebtedness of Seller and any Seller Subsidiary under the RCI Note in form and substance
satisfactory to Buyer, releasing Buyer, CAI, the Targeted Subsidiaries and the Assets from any and
all debt, obligation, liability or Encumbrance, under the RCI Note or otherwise upon the payment
to RCI made pursuant to Section 2.4(b)(i)(B) below;



               (xv) either (A) a release (the “NYDTF Release”) executed by the State of New York Department
of Taxation and Finance (the “NYDTF”) in form and substance satisfactory to Buyer unconditionally
and irrevocably releasing Buyer, CAI, the Targeted Subsidiaries and the Assets (without any
condition or payment obligation) from any and all debt, obligation, liability or Encumbrance,
including under the Installment Payment Agreement



15









 




executed
by the NYDTF as of August 30, 2005 and by PlanVista Solutions, Inc., as of September 2,
2005 (the “NYDTF Agreement”) or (B) a payoff letter (the “NYDTF Payoff Letter”) from the NYDTF
with respect to any outstanding obligations or indebtedness of Seller and any Seller Subsidiary
under the NYDTF Agreement in form and substance satisfactory to Buyer, releasing Buyer, CAI, the
Targeted Subsidiaries and the Assets from any and all debt, obligation, liability or Encumbrance,
under the NYDTF Agreement or otherwise upon the payment to NYDTF made pursuant to Section
2.4(b)(i)(C) below;




               (xvi) a release (the “Covert Release”) executed by Robert J. Covert in form and substance
satisfactory to Buyer unconditionally and irrevocably releasing Buyer, CAI, the Targeted
Subsidiaries and the Assets from any and all debt, obligation, Liability or Encumbrance, including
pursuant to the obligations set forth on Schedule 3.23(b) and under the R.E. Harrington,
Inc. Deferred Compensation Agreement dated May 15, 1987, by and between R.E. Harrington, Inc. and
Robert J. Covert and the R.E. Harrington, Inc. Split-Dollar Agreement dated May 15, 1987, by and
between R.E. Harrington, Inc. and Robert J. Covert;



               (xvii) a release (the “Perkins Release”) executed by Robert Perkins, Wallace Perkins and/or
Richard Perkins in form and substance satisfactory to Buyer unconditionally and irrevocably
releasing Buyer, CAI, the Targeted Subsidiaries and the Assets from any and all debt, obligation,
Liability or Encumbrance, including the obligations set forth on
Schedule 3.23(b);



               (xviii) a release (the “Medical Benefits Release”) executed by the Persons set forth
on Schedule 3.23(b) in form and substance satisfactory to Buyer unconditionally and
irrevocably releasing Buyer, CAI, the Targeted Subsidiaries and the Assets from any and all debt,
obligation, Liability or Encumbrance, including pursuant to the obligations set forth on
Schedule 3.23(b);



               (xix) a true and accurate report (the “Accounts Payable Report”) listing the accounts
payable of the Targeted Subsidiaries and the Business as of the Closing Date, including the Persons
to whom such payables are owed and the amount owed to each such Person. The report shall designate
all accounts payable, including accrued expenses, owed as of the Closing Date (whether or not then
payable) to any and all vendors, PPO networks and brokers, as well as all marketing fees and sales
commissions, in each case arising from or applicable to cash collected by Seller or any Seller
Subsidiary (or other settlements of accounts receivable) during periods on and prior to the Closing
Date, including marketing fees, broker fees and PPO fees not reflected as accounts payable
applicable to cash that has not been applied but which would be included in accounts payable had
the cash receipts been applied (such accounts payable are referred to as the “Associated
Accounts Payable”) and a certificate executed by Seller’s Chief Executive Officer and Chief
Financial Officer certifying that the Accounts Payable Report is true and correct and that all cash
collected has been applied to the proper account. Such Accounts Payable Report shall be computed
consistent with the calculation of accounts payable and accrued expenses used in connection with
the calculation of Target Net Working Capital;



               (xx) a release and consent to assignment (the “Metropolitan Life Release”) executed
by Metropolitan Life Insurance Company in form and substance satisfactory to Buyer unconditionally
and irrevocably releasing Buyer, CAI, the Targeted Subsidiaries and the Assets (without any
condition or payment obligation) from any and all debt, obligation, liability or Encumbrance under
the Office Lease dated January 9,2002, between Metropolitan Life Insurance Company and Plan Vista
Corporation (with respect to the office located at 4010 Boy Scout Boulevard, Suite 200, Tampa,
Florida 33607) and consenting to the assignment of such lease to



16









 




Seller, together with such other consents as may be required in connection with such assignment,
including any consents required by any sublease of such Facility;




               (xxi) an estoppel certificate executed on behalf of each landlord of each Lease included in
the Assets or to which any Targeted Subsidiary is a party, dated as of a date not more than 15
days prior to the Closing Date, in form and substance satisfactory to Buyer;



               (xxii) if the Closing Date is on or prior to December 31, 2007, an employee leasing agreement
in the form and substance reasonably satisfactory to the Buyer and Seller, executed by Seller (the
“Employee Leasing Agreement”);



               (xxiii) an opinion of Foley & Lardner, LLP dated the Closing Date, in the form of Exhibit
2.4(a)(xxiii);



               (xxiv) a release executed by the Person set forth on Schedule 2.4(a)(xxiv) in form
and substance satisfactory to Buyer unconditionally and irrevocably releasing Buyer, CAI, the
Targeted Subsidiaries and the Assets from any and all debt, obligation, liability or Encumbrance
with respect to overpayments made by such Person, or refunds or other amounts owed (or otherwise
agreed to be paid or provided) by Seller or any Seller Subsidiary to such Person;



               (xxv) an agreement executed by Epicor Software Corporation in form and substance satisfactory
to Buyer pursuant to which CAI is granted a license to access and use Seller’s software and
database (the “Epicor Agreement”) following the Effective Time for a period of at least two (2)
years;



               (xxvi) a release (the “Parker Release”) executed by Robert Parker in form and substance
satisfactory to Buyer unconditionally and irrevocably releasing Buyer, CAI, the Targeted
Subsidiaries and the Assets from any and all debt, obligation, Liability or Encumbrance, including
the obligations set forth on Schedule 3.23(b);



     (b) Buyer shall deliver to Seller:



          (i) the following payments, which shall not exceed, in the aggregate, the Purchase Price, by
bank wire transfer of immediately available funds as follows:




               (A) in the event Seller does not deliver to Buyer the Medical
Resource Member Release duly executed by each of the Former MR Members, to the Medical
Resource Member Note Escrow Agent the amount set forth in (or calculated pursuant to), and
pursuant to the wire transfer instructions set forth in, the Medical Resource Member Note
Payoff
Letter;



               (B) in the event Seller does not deliver to Buyer the RCI Release
duly executed by RCI, to RCI the amount set forth in (or calculated pursuant to) the RCI Note
Payoff Letter;



               (C) in the event Seller does not deliver to Buyer the NYDTF Release
duly executed by the NYDTF, to the NYDTF the amount set forth in the NYDTF Payoff Letter;



               (D) in the event that prior to Closing Seller has not paid in full to all
states, including the State of New York, all income, franchise, business corporation or other



17









 




comparable tax liability (including with respect to New York pursuant to NYDTF tax Form CT-3) for
periods through the Closing Date, to each state to which such taxes are owed (whether or not then
due and payable) an amount equal to the full amount of such unpaid taxes as determined by mutual
agreement of Buyer and Seller;




               (E) to Robert Perkins, or his designee, the amount required to be
paid, if any, pursuant to the Perkins Release;



               (F) to Robert Parker, or his designee, the amount required to be paid,
if any, pursuant to the Parker Release;



               (G) to each Person listed on Schedule 2.4(a)(xiii), or his or her
respective designee, the amount required to be paid, if any, pursuant to the Medical Benefits
Release;



               (H) to the Persons set forth on the Accounts Payable Report the full amount of the Associated
Accounts Payable;



               (I) to Robert J. Covert, or his designee, the amount required to be paid, if any, pursuant to
the Covert Release;



               (J) to
the Person set forth in Schedule 2.4(a)(xxiv), the amount payable at or after
Closing to such Person pursuant to the release set forth described in Section 2.4(a)(xxiv) (other
than credits or discounts provided to such Person reflected in the adjustment to the Purchase
Price pursuant to the second sentence of Section 2.5);



               (K) to the Escrow Agent Three Million Dollars ($3,000,000.00) (the “Escrow Fund”) to be held
pursuant to the Escrow Agreement;



               (L) to Laurus Master Fund, Ltd., an aggregate amount equal to the
amount that Laurus Master Fund, Ltd. is willing to accept as payment in full for the release and
other obligations and agreements contemplated in and pursuant to the terms of the Laurus Consent;



               (M) the balance of the Purchase Price, if any (such balance being
obtained by subtracting the amounts paid pursuant to Sections 2.4(b)(i)(A) -(L) from the Purchase
Price) to Seller;



          (ii) the Escrow Agreement, executed by Buyer and the Escrow Agent;



          (iii) the Assignment and Assumption Agreement of Lease executed by Buyer;



          (iv) the Transition Services Agreement executed by Buyer;




          (v) the Contribution Agreement executed by Buyer;




          (vi) if the Closing occurs on or before December 31, 2007, the Employee Leasing
Agreement executed by Buyer;




          (vii) a certificate executed by Buyer as to the accuracy of its representations and
warranties as of the date of this Agreement and as of the Closing in accordance with




18









 







Section 8.1 and as to its compliance with and performance of its covenants and obligations
to be performed or complied with at or before the Closing in accordance with Section 8.2;
and




          (vii) a certificate of the Secretary of Buyer certifying, as complete and accurate as
of the Closing, attached copies of the Governing Documents of Buyer and certifying and
attaching all requisite resolutions or actions of Buyer’s board of directors approving the
execution and delivery of this Agreement and the consummation of the Contemplated
Transactions and certifying to the incumbency and signatures of the officers of Buyer
executing this Agreement and any other document relating to the Contemplated Transactions.




     2.5 Adjustments. The Purchase Price will be increased or decreased as set forth in
this
Section 2.5 and Section 2.6. Further, the Purchase Price to be paid at Closing will be reduced
on a dollar
for dollar basis by an amount equal to the aggregate amount of any credit against or discount
to future
invoices of Buyer or the Targeted Subsidiaries for obligations that arose prior to the Closing
in favor of
the Person set forth in Schedule 2.4(a)(xxiv) or any other Person Affiliated with such
Person (including
any such credit or discount to future invoices or charges required by the release described in
Section
2.4(a)(xxiv)). Seller shall deliver to Buyer a customer statement showing all activity on
such Person’s
account, including a detailed listing of all credits and discounts to be provided to such
Person or its
Affiliates. Seller shall deliver to Buyer a balance sheet prior to Closing, including a good
faith estimate
draft at least three (3) Business Days prior to the Closing Date, at and as of the Closing
Date (the
“Closing Date Balance Sheet”), which shall include a specific line item for Accounts
Receivable as of the
Closing Date, to determine the Net Working Capital (as defined below) of the Business as of
immediately
prior to the Effective Time. The term “Net Working Capital” shall mean the
consolidated net working
capital of the Business as of immediately prior to the Effective Time, which shall mean the
sum of
accounts receivable, net, prepaid expenses and other current assets minus the sum of accounts
payable
and accrued expenses and other current liabilities, without giving effect to the
Contemplated
Transactions. Net Working Capital as of the Closing is estimated to be as set forth in
Schedule 2.5. The
individual line items included in Net Working Capital shall be calculated in accordance with
GAAP. The
term “Target Net Working Capital” shall mean $5,837,000.



     2.6 Adjustment Procedure.



          (a) Within 150 days following the Closing Date, Buyer shall recalculate the Net Working
Capital as of the Closing Date (the “Final Net Working Capital”), (x) without giving effect to the
Contemplated Transactions except as set forth on Schedule 2.5. and (y) omitting from
accounts receivable any Accounts Receivable that are not actually collected (after making
commercially reasonable efforts to collect such receivables in accordance with CAI’s normal
collection policies) between the Closing Date and the date that is 145 days following the Closing
Date and omitting from the accrued expenses the related commissions payable for such omitted
Accounts Receivable, and notify in writing the Seller of such Final Net Working Capital. Final Net
Working Capital shall be calculated pursuant to the formula set forth in Schedule 2.5
hereto and such calculations shall be set forth in the notice to Seller in reasonable detail
consistent with Schedule 2.5. Except as set forth on
Schedule 2.5, the individual
line items included in Final Net Working Capital shall be calculated in accordance with GAAP.
Buyer shall provide the Seller with access to such working papers used by Buyer or its
representatives or agents (including, without limitation, all accountants) to determine the Final
Net Working Capital, as the Seller shall reasonably request. Thirty (30) days following the
delivery of the Final Net Working Capital (or if the Seller has an objection to the Final Net
Working Capital amount, within five Business Days after the final resolution of such objection as
set forth in subsection (b) below if later than such date), the Purchase Price shall be
recalculated such that the Purchase Price will be (i) increased by an amount equal to the excess
of the Final Net Working Capital or the Net Working Capital resulting from subsection (b) below,
as the case may be over Target Net Working Capital, if any, or (ii) decreased by an amount equal
to the




19









 







excess of the Target Net Working Capital over the Final Net Working Capital or the Net Working
Capital resulting from subsection (b) below, as the case may be (the Purchase Price, as adjusted
pursuant to the foregoing formula is referred to as the “Final Purchase Price”). At such time as
the Final Purchase Price is calculated pursuant to the immediately preceding sentence, (i) the
Seller shall pay to Buyer the amount, if any, by which the Final Purchase Price is less than the
Purchase Price or (ii) Buyer shall pay to the Seller, by depositing such amount in the Escrow Fund
(as if such payment were additional Purchase Price) an amount, if any, by which the Final Purchase
Price exceeds the Purchase Price.




          (b) The Seller shall notify Buyer, in writing, within thirty (30) days after receipt of
notification of the Final Net Working Capital, of any objections thereto, setting forth in such
notice a statement describing such objections (an “Objection Notice”). If the Seller does not
deliver an Objection Notice within such thirty (30) day period, then the Final Net Working Capital
shall be deemed final and conclusive and binding upon each of the parties hereto for the purposes
of determining the dollar amounts therein. Buyer and the Seller shall use commercially reasonable
best efforts to resolve any such objection and to agree upon the definitive Net Working Capital to
be used to calculate the Final Purchase Price. If within ten (10) days after Buyer’s receipt of an
Objection Notice, the parties have not resolved such objections and agreed upon the definitive
Final Net Working Capital, Buyer and the Seller shall select Ernst & Young, LLP, to resolve any
remaining objections (the “Firm”) (or such other national accounting firm as the Parties shall
mutually agree). Buyer and the Seller shall cause such Firm, within twenty (20) days after its
selection, to resolve such disagreement and to prepare the definitive Net Working Capital to be
used to calculate the Final Purchase Price, which resolution and definitive Net Working Capital
will be conclusive and binding upon the parties hereto. The Firm’s determination will be calculated
in a manner consistent with, and using the same methodology set forth in Schedule 2.5 and
this Section 2.6. If the parties submit any unresolved objections to the Firm for
resolution as provided in this Section 2.6(b), the fees and expenses of the Firm shall be borne by
the party whose assertion of Net Working Capital differs most from the Firm’s determination of Net
Working Capital.




ARTICLE III

REPRESENTATIONS AND WARRANTIES REGARDING SELLER




     Seller represents and warrants, to Buyer as follows:



     3.1 Organization and Good Standing.



          (a) Schedule 3.1 (a) contains a complete and accurate list of each Targeted
Subsidiary’s jurisdiction of incorporation and any other jurisdictions in which it is
qualified to do
business as a foreign corporation. Each Targeted Subsidiary is a corporation or limited
liability company
duly organized, validly existing and in good standing under the laws of its jurisdiction of
incorporation or
organization, with power and authority to conduct its business as it is now being conducted,
to own or use
the properties and assets that it purports to own or use, and to perform all its obligations
under the Seller
Contracts to which it is a party. Each Targeted Subsidiary is duly qualified to do business
as a foreign
corporation and is in good standing under the laws of each state or other jurisdiction in
which either the
ownership or use of the properties owned or used by it, or the nature of the activities
conducted by it,
requires such qualification except where the failure to be so qualified has not resulted, and
would not
reasonably be expected to result, in a material Adverse Change.




          (b) Complete and accurate copies of the Governing Documents of each Targeted
Subsidiary, as currently in effect, are attached to Schedule 3.l(b).




          (c) Except
as set forth in Schedule 3.l(c), no Targeted Subsidiary has any
Subsidiaries and does not own any shares of capital stock or other securities of any other
Person.






20









 








     3.2
Enforceability; Authority; No Conflict.



          (a) This Agreement constitutes the legal, valid and binding obligation of Seller,
enforceable against it in accordance with its terms except to the extent that enforceability
hereof may be
limited by bankruptcy, insolvency, reorganization and other similar laws effecting the
enforcement of
creditors’ rights generally and by general principles of equity. Upon the execution and
delivery by Seller
of the Escrow Agreement and each other agreement to be executed or delivered by the Seller at
the
Closing (collectively, the “Seller’s Closing Documents”), the Seller’s Closing Documents will
constitute
the legal, valid and binding obligation of the Seller, enforceable against it in accordance
with their
respective terms, except to the extent that enforceability thereof may be limited by
bankruptcy,
insolvency, reorganization and other similar laws effecting the enforcement of creditors’
rights generally
and by general principles of equity. The Seller has the absolute and unrestricted right,
power and
authority to execute and deliver this Agreement and the Seller’s Closing Documents to which it
is a party
and to perform its obligations under this Agreement and the Seller’s Closing Documents, and
such action
has been duly authorized by all necessary action by Seller’s board of directors and, prior to
the Closing
Date, Seller’s shareholders.




          (b) Except
as set forth in Schedule 3.2(b), neither the execution and delivery of this
Agreement nor the consummation or performance of any of the Contemplated Transactions will,
directly
or indirectly (with or without notice or lapse of time):




               (i) Breach (A) any provision of any of the Governing Documents of Seller or any
Targeted Subsidiary or (B) any resolution adopted by the board of directors or the
shareholders of Seller or any Targeted Subsidiary;



               (ii) Breach or give any Governmental Body or other Person the right to challenge any of
the Contemplated Transactions or to exercise any remedy or obtain any relief under any Legal
Requirement or any Order to which any Seller, or any of the Assets, may be subject;



               (iii) contravene, conflict with or result in a violation or breach of any of the terms
or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate or modify, any Governmental Authorization that is held by the Seller or
any of the Targeted Subsidiaries or that otherwise relates to the Assets or to the Business;



               (iv) cause Buyer, the Targeted Subsidiaries or the Assets, to become subject to, or to
become liable for the payment of, any Tax;



               (v) Breach any provision of, or give any Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or payment
under, or to cancel, terminate or modify, any Seller Contract; or



               (vi) result in the imposition or creation of any Encumbrance upon or with respect to
any of the Assets.



          (c) Except
as set forth in Schedule 3.2(c), neither the Seller nor any Targeted
Subsidiary is required to give any notice to or obtain any Consent from any Person in
connection with the
execution and delivery of this Agreement or the consummation or performance of any of the

Contemplated Transactions.




21









 








          (d) Seller has taken all action necessary to exempt this Agreement and the transactions
contemplated hereby from the restrictions on “affiliated transactions” and “control-share
acquisitions” contained in Sections 607.0901 and 607.0902 of the Florida Business Corporation Act,
and, accordingly, neither such section nor any other anti-takeover or similar statute or
regulation applies or purports to apply to any such transactions.




     3.3 Capitalization. The information set forth in the Capitalization Certificate
will be true
and correct as of the Effective Time (prior to giving effect to the Contemplated Transactions.
Seller is
and will be on the Closing Date and the Effective Date, the record and beneficial owner and
holder of all
of the Equity Interests of each of the Targeted Subsidiaries, and as of the Closing Date and
the Effective
Date, such Equity Interests will be held free and clear of all Encumbrances. Except as set
forth on
Schedule 3.3, there are no Contracts relating to the issuance, sale or transfer of any
Equity Interests or
other securities of any of the Targeted Subsidiaries, all of which Contracts on Schedule
3.3 shall be
cancelled on or prior to the Closing Date with no further obligations to any Targeted
Subsidiary, the
Buyer or CAI. None of the outstanding equity securities of any Seller was issued in
violation of the
Securities Act or any other Legal Requirement. All Equity Interests of each Targeted
Subsidiary have
been duly authorized and are validly issued and outstanding. And upon delivery to Buyer at the
Closing
of certificates representing the Equity Interests of the Targeted Subsidiaries (the “Targeted
Shares”), duly
endorsed by Seller for transfer to Buyer, and upon Seller’s receipt of payment therefore,
valid title to the
Targeted Shares will pass to Buyer free and clear of any Encumbrances. As of the Closing
and
immediately thereafter, the Targeted Shares shall constitute all of the issued and outstanding
Equity
Interests of each Targeted Subsidiary, will be duly authorized, validly issued and
non-assessable and will
have been issued free and clear of any preemptive or similar rights. Each Targeted
Subsidiary has no
outstanding (1) stock or securities convertible or exchangeable for any of its Equity
Interests or
containing any profit participation features, nor any rights or options to subscribe for or to
purchase its
Equity Interests, or (2) any stock appreciation rights or phantom stock or similar plans or
rights. There
are no (i) outstanding obligations of any Targeted Subsidiary (contingent or otherwise) to
repurchase or
otherwise acquire or retire any of its Equity Interests, or (ii) voting trusts, proxies or
other agreements
among any Targeted Subsidiary’s equity holders with respect to the voting or transfer of such
Targeted
Subsidiary’s Equity Interests.



     3.4 Financial Statements. Seller has delivered to Buyer: a balance sheet of the
Targeted
Subsidiaries reflecting the Business as of December 31, 2006 (the “Balance Sheet”), and the
related
statements of income, changes in shareholders’ equity and cash flows for the fiscal year then
ended and a
balance sheet of the Targeted Subsidiaries reflecting the Business as of September 30,2007,
(the “Interim
Balance Sheet”), and the related statements of income, changes in shareholder’s equity and
cash flows for
the nine month period then ended. Such financial statements fairly present (and the financial
statements
delivered pursuant to Section 2.5 and Section 5.8 will fairly present) the financial condition
and the
results of operations, changes in shareholders’ equity and cash flows of the Business as at,
of and for the
periods referred to in such financial statements, all in accordance with GAAP, subject, solely
for the
Interim Balance Sheet and the related statements of income, changes in shareholders’ equity
and cash
flows for the nine month period ended September 30,2007, to normal recurring year end
adjustments and
the absence of notes, none of which adjustments will be material. The financial statements
referred to in
this Section 3.4 and delivered pursuant to Section 5.8 reflect and will reflect the consistent
application of
such accounting principles throughout the periods involved, except as disclosed in the notes
to such
financial statements. The financial statements have been and will be prepared from and are in
accordance
with the accounting Records of Seller. Seller also has delivered to Buyer copies of all
letters from
Seller’s auditors to Seller’s board of directors or the audit committee thereof during the
thirty-six (36)
months preceding the execution of this Agreement, together with copies of all responses
thereto.



22









 





     3.5 Books and Records. The books of account and other financial Records of Seller
related,
directly and indirectly, to the Business, all of which have been made available to Buyer, are
complete and
correct and represent actual, bona fide transactions and have been maintained in accordance
with sound
business practices and the requirements of Section 13(b)(2) of the Exchange Act, including
the
maintenance of an adequate system of internal controls. The minute books of Seller and each
Targeted
Subsidiary, all of which have been made available to Buyer, contain accurate and complete
Records of all
meetings held of, and corporate action taken by, the shareholders (or members), the board of
directors and
committees of the board of directors of Seller and each Targeted Subsidiary, and no meeting of
any such
shareholders, board of directors or committee has been held for which minutes have not been
prepared or
are not contained in such minute books.



     3.6
Sufficiency of Assets. Except as set forth in Schedule 3.6, the Assets constitute
all of the
assets, tangible and intangible, of any nature whatsoever, necessary to operate the Business
in the manner
presently operated by Seller or any Seller Subsidiaries and all of the Assets related to, used
in or
necessary for, the Business. Except as set forth in
Schedule 3.6, all of the Business
is conducted by the
Targeted Subsidiaries. As of the Effective Time, all of the Business shall be conducted by the
Targeted
Subsidiaries. Set forth on Schedule 3.6 is the identity of each PPO in the Business
and the corporate
owner of such PPO.



     3.7 Description of Owned Real Property. None of the Seller nor any Targeted
Subsidiary
own or has ever owned any Real Property and no Real Property is included in the Assets.



     3.8 Description of Leased Real Property. Schedule 3.8 contains a description,
including
street and mailing address, of the real property (“Real Property”) in which (a) Seller or any
Seller
Subsidiary has a leasehold interest related to the Business or (b) any Targeted Subsidiary has
a leasehold
interest, and an accurate description (by location, name of lessor, date of Lease and term
expiration date)
of all Real Property Leases, including all amounts owed pursuant to such Real Property Leases.



     3.9
Title to Assets; Encumbrances; Assets of the Business. The Targeted Subsidiaries
own,
or prior to the Effective Time, will own, good and transferable title to all of the Assets,
free and clear of
any Encumbrances other than those described in Schedule 3.9 (“Encumbrances”). Seller
warrants to
Buyer that, at the time of Closing, all other Assets shall be free and clear of all
Encumbrances other than
those identified on Schedule 3.9 as acceptable to Buyer (“Permitted Encumbrances”).
All assets of the
Targeted Subsidiaries, including all Assets, are, and when transferred to Buyer pursuant to
this
Agreement and the Contribution Agreement, will be, free and clear of any Encumbrances other
than
Permitted Encumbrances. Set forth on Schedule 3.9 are all of the Assets that will be
transferred to the
Targeted Subsidiaries pursuant to the Contribution Agreement. All Targeted Subsidiaries shall
be debt
free as of the Effective Time and the Closing.



     3.10 Condition of Facilities.



          (a) Use of the Real Property for the various purposes for which it is presently being used is
permitted as of right under all applicable zoning legal requirements and is not subject to
“permitted nonconforming” use or structure classifications. All Improvements are in compliance
with all applicable Legal Requirements, including those pertaining to zoning, building and the
disabled, are in good repair and in good condition, ordinary wear and tear excepted, and are free
from latent and patent defects. No part of any Improvement encroaches on any real property not
included in the Real Property, and there are no buildings, structures, fixtures or other
Improvements primarily situated on adjoining property which encroach on any part of the Land. The
Land for each owned Facility abuts on and has direct vehicular access to a public road or has
access to a public road via a permanent, irrevocable, appurtenant easement benefiting such Land
and comprising a part of the Real Property, is supplied with




23









 




public or quasi-public utilities and other services appropriate for the operation of the
Facilities located thereon and is not located within any flood plain or area subject to wetlands
regulation or any similar restriction. There is no existing or proposed plan to modify or realign
any street or highway or any existing or proposed eminent domain proceeding that would result in
the taking of all or any part of any Facility or that would prevent or hinder the continued use of
any Facility as heretofore used in the conduct of the business of Seller.




          (b) Each item of Tangible Personal Property is in good repair and good operating condition,
ordinary wear and tear excepted, is suitable for immediate use in the Ordinary Course of Business
and is free from latent and patent defects. No item of Tangible Personal Property is in need of
repair or replacement other than as part of routine maintenance in the Ordinary Course of Business.
Except as disclosed in Schedule 3.10(b), all Tangible Personal Property used in the
Business is owned by and in the possession of a Targeted Subsidiary.




     3.11 Accounts Receivable and Accounts Payable.



          (a) All Accounts Receivable relating to the Business, including Accounts Receivable
relating to the Seller Contracts, are reflected on the Balance Sheet, the Closing Date Balance
Sheet or the
Interim Balance Sheet, are included in the Assets and represent or, in the case of the Closing
Date
Balance Sheet, will represent, valid obligations arising from sales actually made or services
actually
performed by Seller or any Targeted Subsidiary in the Ordinary Course of Business. Except to
the extent
paid prior to the Closing Date, such Accounts Receivable are or will be as of the Closing Date
current and
collectible, net of the respective reserves shown on the Balance Sheet or the Interim Balance
Sheet or on
the Closing Date Balance Sheet (which reserves are adequate and calculated consistent with
past practice.
Subject to such reserves, each of such Accounts Receivable either has been or will be
collected in full,
without any setoff, within one hundred forty-five (145) days after the day on which it first
becomes due
and payable. There is no contest, claim, defense or right of setoff, under any Contract with
any account
debtor of an Account Receivable relating to the amount or validity of such Account Receivable.
Schedule
3.11 contains a complete and accurate list of all Accounts Receivable as of the date
of the Interim Balance
Sheet, which list sets forth the claim level detail and aging of each such Account Receivable.
The
supplement to Schedule 3.11, which will be delivered at the Closing, contains a
complete and accurate list
of all Accounts Receivable as of the Closing Date, which list sets forth the claim level
detail and aging of
each such Account Receivable. All cash collections have been posted to the correct detailed
customer
Accounts Receivable.




          (b) The Accounts Payable Report will be a true and accurate report listing the
accounts payable of the Targeted Subsidiaries and the Business as of the Closing Date. The
report will
correctly and accurately designate all Associated Accounts Payable arising from or applicable
to cash
collected by Seller or any Seller Subsidiary (or other settlements of accounts receivable)
during periods
on and prior to the Closing Date, including marketing fees, broker fees and PPO fees not
reflected as
accounts payable applicable to cash that has not been applied but which would be included in
accounts
payable had the cash receipts been applied. All cash collected by Seller or the Targeted
Subsidiaries
relating to the Business has been applied to the proper account in Seller’s or Targeted
Subsidiaries’
ledgers.




     3.12
Brokers or Finders. Except as set forth on Schedule 3.12, neither Seller
nor any Targeted
Subsidiary nor any of their respective Representatives have incurred any obligation or
Liability,
contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other
similar payments
in connection with the sale of the Business or the Assets or the Contemplated Transactions.



24









 





     3.13
No Undisclosed Liabilities. Except as set forth in Schedule 3.13, the
Targeted
Subsidiaries have no Liability, including accrued customer refunds, except for Liabilities
reflected or
reserved against in the Balance Sheet or the Interim Balance Sheet and current Liabilities
incurred in the
Ordinary Course of Business of the Business since the respective dates thereof, which are
fully reflected
in the Closing Date Balance Sheet. Each Targeted Subsidiary is not a party to or bound by any
agreement
of guarantee, support, indemnification, assumption or endorsement of, or any other similar
commitment
with respect to the Liabilities, obligations, indebtedness or commitments (whether accrued,
absolute,
contingent or otherwise) of any other Person. Each Targeted Subsidiary has made no loans to
shareholders or members of the Seller or any Targeted Subsidiary. There are no express
warranties
provided, and no warranty claims, in respect of services or other products sold by each
Targeted
Subsidiary. There are no pending or threatened claims by any Person (whether based on contract
or tort
and whether relating to damages or economic loss) arising from services or products sold by
each
Targeted Subsidiary or otherwise relating to the Business.



     3.14
Taxes.



          (a)
Tax Returns Filed and Taxes Paid. Seller has filed or caused to be filed on a
timely basis all Tax Returns and all reports with respect to Taxes that are or were required
to be filed by
Seller or the Seller Subsidiaries pursuant to applicable Legal Requirements. All Tax Returns
and reports
filed by Seller or the Seller Subsidiaries are true, correct and complete. Seller or the
Seller Subsidiaries
have paid, or made provision for the payment of, all Taxes that have or may have become due
for all
periods covered by the Tax Returns, including Taxes that accrue by reason of the making of the
Section
338(h)(10) election pursuant to Section 5.11 hereof, or otherwise, or pursuant to any
assessment received
by Seller or any Seller Subsidiary, except such Taxes, if any, as are listed in Schedule
3.14(a) and are
being contested in good faith and as to which adequate reserves (determined in accordance with
GAAP)
have been provided in the Balance Sheet and the Interim Balance Sheet. Except as provided in
Schedule
3.14(a), neither Seller nor any Seller Subsidiary currently is the beneficiary of any
extension of time
within which to file any Tax Return. No claim has ever been made or, to the Knowledge of
Seller, is
expected to be made by any Governmental Body in a jurisdiction where neither Seller nor any
Seller
Subsidiary files Tax Returns that it is or may be subject to taxation by that jurisdiction.
There are no
Encumbrances on any of the Assets that arose in connection with any failure (or alleged
failure) to pay
any Tax by Seller or any Seller Subsidiary, and Seller has no Knowledge of any basis for
assertion of any
claims attributable to Taxes which, if adversely determined, would result in any such
Encumbrance.




          (b)
Delivery of Tax Returns and Information Regarding Audits and Potential Audits.
Seller has delivered or made available to Buyer copies of, and Schedule 3.14(b)
contains a complete and
accurate list of, all Tax Returns of Seller and each Seller Subsidiary filed since December
31, 2004. The
federal, state and local income or franchise Tax Returns of Seller and each Seller Subsidiary
have been
audited by the IRS or relevant state or local tax authorities or are closed by the applicable
statute of
limitations for all taxable years through December 31, 2003. Schedule 3.14(b)
contains a complete and
accurate list of all Tax Returns of Seller and each Seller Subsidiary that have been audited
or are currently
under audit and accurately describe any deficiencies or other amounts that were paid or are
currently
being contested. To the Knowledge of Seller, no undisclosed deficiencies are expected to be
asserted
with respect to any such audit. All deficiencies proposed as a result of such audits have
been paid,
reserved against, settled or are being contested in good faith by appropriate proceedings as
described in
Schedule 3.14(b). Seller has delivered, or made available to Buyer, copies of any
examination reports,
statements or deficiencies or similar items with respect to such audits. Except as provided
in Schedule
3.14(b), Seller has no Knowledge that any Governmental Body is likely to assess any
additional Taxes
against Seller or any Seller Subsidiary for any period for which Tax Returns have been filed
by Seller or
any Seller Subsidiary. There is no dispute or claim concerning any Taxes of Seller or any
Seller
Subsidiary either (i) claimed or raised by any Governmental Body in writing or (ii) as to
which Seller has





25









 







Knowledge.
Except as described in Schedule 3.14(b), Seller has not given or been requested
to give waivers or extensions (or is or would be subject to a waiver or extension given by any
other Person) of any statute of limitations relating to the payment of Taxes of Seller or for which
Seller may be liable.




          (c)
Proper Accrual. The charges, accruals and reserves, including in the Interim
Balance Sheet and Closing Date Balance Sheet with respect to Taxes on the Records of Seller
and each
Targeted Subsidiary are adequate (determined in accordance with GAAP) and are at least equal
to Seller’s
liability for Taxes. There exists no proposed tax assessment or deficiency against Seller or
any Seller
Subsidiary except as disclosed in the Interim Balance Sheet or in
Schedule 3.14(c).




          (d)
Specific Potential Tax Liabilities and Tax Situations.




               (i) Withholding. All Taxes that Seller is or was required by Legal
Requirements to withhold, deduct or collect have been duly withheld, deducted and collected
and, to the extent required, have been paid to the proper Governmental Body or other
Person.



               (ii) Tax Sharing or Similar Agreements. Except as set forth on Schedule
3.14(d), there is no Tax sharing agreement, Tax allocation agreement, Tax indemnity
obligation or similar written or unwritten agreement, arrangement, understanding or
practice with respect to Taxes (including any advance pricing agreement, closing agreement
or other arrangement relating to Taxes) that will require any payment by Seller or any
Seller Subsidiary. Any Tax sharing agreement between Seller and any of the Targeted
Subsidiaries will be terminated as of the Closing Date and shall have no further effect for
any taxable year (whether the current year, a future year, or a past year).



               (iii) Consolidated
Group. Neither Seller nor any Targeted Subsidiary (A) has
been a member of an affiliated group within the meaning of Code Section 1504(a) (or any
similar group defined under a similar provision of state, local or foreign law) other than
a group the common parent of which is the Seller or (B) has any liability for Taxes of any
person (other than Seller and its Subsidiaries) under Treas. Reg. § 1.1502-6 (or any
similar provision of state, local or foreign law), as a transferee or successor by contract
or otherwise.



               (iv) S
Corporation. None of Seller or any of the Targeted Subsidiaries is an S
corporation as defined in Code Section 1361.



     3.15
No Material Adverse Change. Since the date of the Balance Sheet, there has not
been any Material Adverse Change and no event has occurred or circumstance exists that will, or
could
reasonably be expected to, result in such a Material Adverse Change.



     3.16
Employee Benefits.



          (a) Set forth in Schedule 3.16(a) is a complete and correct list of all “employee
benefit plans” as defined by Section 3(3) of ERISA, all specified fringe benefit plans as defined
in Section 6039D of the Code, all “nonqualified deferred compensation plans” as defined in
Sections 409A(d)(l) or 3121(v)(2)(C) of the Code, and all other bonus, incentive-compensation,
deferred-compensation, profit-sharing, stock-option, stock-appreciation-right, stock-bonus,
stock-purchase, employee-stock-ownership, savings, severance, change-in-control,
supplemental-unemployment, layoff, salary-continuation, retirement, pension, health,
life-insurance, disability, accident, group-insurance, vacation, holiday, sick-leave,
fringe-benefit or welfare plan, and any other employee compensation or benefit plan, agreement,
policy, practice, commitment, contract or understanding (whether qualified or nonqualified,
currently effective or terminated, written or unwritten) and any trust, escrow or other




26









 




agreement related thereto that (i) is maintained or contributed to by Seller, or any “ERISA
Affiliate” of Seller (i.e., any other corporation or trade or business controlled by, controlling
or under common control with Seller (within the meaning of Section 414 of the Code or Section
4001(a)(14) or 4001(b) of ERISA), including the Targeted Subsidiaries), or with respect to which
Seller or any ERISA Affiliate has or may have any liability, and (ii) provides benefits, or
describes policies or procedures applicable to any current or former director, officer, employee or
service provider of Seller or any ERISA Affiliate, or the dependents of any thereof, regardless of
how (or whether) liabilities for the provision of benefits are accrued or assets are acquired or
dedicated with respect to the funding thereof (collectively the “Employee Plans”). Schedule
3.16(a) identifies as such any Employee Plan that is (u) a multiple employer welfare
arrangement (as defined in Section 3(40)(A) of ERISA, (v) a multiple employer plan (as defined in
Section 413(c) of the Code), (w) a “Defined Benefit Plan” (as defined in Section 414(1) of the
Code), (x) a plan intended to meet the requirements of Section 401 (a) of the Code, (y) a
“Multiemployer Plan” (as defined in Section 3(37) and Section 4001(a)(3) of ERISA), or (z)
a plan subject to Title IV of ERISA, other than a Multiemployer Plan. Also set forth on
Schedule 3.16(a) is a complete and correct list of all ERISA Affiliates of Seller during
the last six (6) years.




          (b) Seller has delivered to Buyer true, accurate and complete copies of (i) the
documents comprising each Employee Plan (or, with respect to any Employee Plan which is
unwritten, a
detailed written description of eligibility, participation, benefits, funding arrangements,
assets and any
other matters which relate to the obligations of Seller or any ERISA Affiliate), (ii) all
trust agreements,
insurance contracts or any other funding instruments related to the Employee Plans, (iii) all
rulings,
determination letters, no-action letters or advisory opinions from the IRS, the U.S.
Department of Labor,
the Pension Benefit Guaranty Corporation (“PBGC”) or any other Governmental Body that pertain
to
each Employee Plan and any open requests therefore, (iv) the most recent actuarial and
financial reports
(audited and/or unaudited) and the annual reports filed with any Government Body with respect
to the
Employee Plans during the current year and each of the three (3) preceding years, (v) all
collective
bargaining agreements pursuant to which contributions to any Employee Plan(s) have been made
or
obligations incurred (including both pension and welfare benefits) by Seller or any ERISA
Affiliate, and
all collective bargaining agreements pursuant to which contributions are being made or
obligations are
owed by such entities, (vi) all securities registration statements filed with respect to any
Employee Plan,
(vii) all contracts with third-party administrators, actuaries, investment managers,
consultants and other
independent contractors that relate to any Employee Plan, (viii) with respect to Employee
Plans that are
subject to Title IV of ERISA, the Form PBGC-1 filed for each of the three (3) most recent plan
years, and
(ix) all summary plan descriptions, summaries of material modifications and memoranda,
employee
handbooks and other written communications regarding the Employee Plans.




          (c) Except
as disclosed in Schedule 3.16(c), full payment has been made of all
amounts that are required under the terms of each Employee Plan to be paid as contributions
with respect
to all periods prior to and including the last day of the most recent fiscal year of such
Employee Plan
ended on or before the date of this Agreement and all periods thereafter prior to the Closing
Date, and no
accumulated funding deficiency or liquidity shortfall (as those terms are defined in Section
302 of ERISA
and Section 412 of the Code) has been incurred with respect to any such Employee Plan, whether
or not
waived. The value of the assets of each Employee Plan that is a funded plan equal or exceed
the amount
of all benefit liabilities (determined on a plan termination basis using the actuarial
assumptions
established by the PBGC as of the Closing Date) of such Employee Plan. Seller is not required
to provide
security to an Employee Plan under Section 401(a)(29) of the Code. Seller has paid in full
all required
insurance premiums, subject only to normal retrospective adjustments in the ordinary course,
with regard
to the Employee Plans for all policy years or other applicable policy periods ending on or
before the
Closing Date.




27









 





          (d) No Employee Plan, if subject to Title IV of ERISA, has been completely or
partially terminated, nor has any event occurred nor does any circumstance exist that could
result in the
partial termination of such Employee Plan. The PBGC has not instituted or threatened a
Proceeding to
terminate or to appoint a trustee to administer any of the Employee Plans pursuant to Subtitle
1 of Title
IV of ERISA, and no condition or set of circumstances exists that presents a material risk of
termination
or partial termination of any of the Employee Plans by the PBGC. None of the Employee Plans
has been
the subject of, and no event has occurred or condition exists that could be deemed, a
reportable event (as
defined in Section 4043 of ERISA) as to which a notice would be required (without regard to
regulatory
monetary thresholds) to be filed with the PBGC. Seller has paid in full all insurance premiums
due to the
PBGC with regard to the Employee Plans for all applicable periods ending on or before the
Closing Date.




          (e) Neither Seller nor any ERISA Affiliate has any liability or has Knowledge of any
facts or circumstances that might give rise to any liability, and the Contemplated
Transactions will not
result in any liability, (i) for the termination of or withdrawal from any Employee Plan under
Sections 4062, 4063 or 4064 of ERISA, (ii) for any lien imposed under Section 302(f) of ERISA
or
Section 412(n) of the Code, (iii) for any interest payments required under Section 302(e) of
ERISA or
Section 412(m) of the Code, (iv) for any excise tax imposed by Section 4971 of the Code, (v)
for any
minimum funding contributions under Section 302(c)(l1) of ERISA or Section 412(c)(l1) of the
Code, or
(vi) for withdrawal from any Multiemployer Plan under Section 4201 of ERISA.




          (f) Seller has, at all times, complied, and currently complies, in all material respects
with the applicable continuation requirements for its welfare benefit plans, including (1)
Section 4980B of
the Code (as well as its predecessor provision, Section 162(k) of the Code) and Sections 601
through 608,
inclusive, of ERISA, which provisions are hereinafter referred to collectively as “COBRA” and
(2) any
applicable state statutes mandating health insurance continuation coverage for employees.




          (g) The form of all Employee Plans is in compliance with the applicable terms of
ERISA, the Code, and any other applicable laws, including the Americans with Disabilities Act
of 1990,
the Family Medical Leave Act of 1993 and the Health Insurance Portability and Accountability
Act of
1996, and such plans have been operated in compliance with such laws and the written Employee
Plan
documents. Neither Seller nor any of its ERISA Affiliates’ employees or directors who are
fiduciaries,
nor the Knowledge of Seller, any other fiduciary of an Employee Plan has violated the
requirements of
Section 404 of ERISA with respect to such Employee Plan. All required reports and descriptions
of the
Employee Plans (including Internal Revenue Service Form 5500 Annual Reports, Summary Annual
Reports and Summary Plan Descriptions and Summaries of Material Modifications) have been (when
required) timely filed with the IRS, the U.S. Department of Labor or other Governmental Body
and
distributed as required, and all notices required by ERISA or the Code or any other Legal
Requirement
with respect to the Employee Plans have been appropriately given.




          (h) Each Employee Plan that is intended to be qualified under Section 401 (a) of the Code has
received a favorable determination letter from the IRS, or if a prototype document, is subject to
an opinion letter that may be relied upon, and Seller has no Knowledge of any circumstances that
will or could result in revocation of any such favorable determination letter or opinion letter.
Each trust created under any Employee Plan has been determined to be exempt from taxation under
Section 501 (a) of the Code, and Seller is not aware of any circumstance that will or could result
in a revocation of such exemption. Each Employee Welfare Benefit Plan (as defined in Section 3(1)
of ERISA) that utilizes a funding vehicle described in Section 501(c)(9) of the Code or is subject
to the provisions of Section 505 of the Code has been the subject of a notification by the IRS that
such funding vehicle qualifies for tax-exempt status under Section 501(c)(9) of the Code or that
the plan complies with Section 505 of the Code, unless the IRS does not, as a matter of policy,
issue such notification with respect to the particular type of




28









 







plan. With respect to each Employee Plan, no event has occurred or condition exists that will or
could give rise to a loss of any intended Tax consequence or to any Tax under Section 511 of the
Code.




          (i) There is no pending or, to the Knowledge of Seller, threatened Proceeding relating to any
Employee Plan, nor is there any basis for any such Proceeding. Neither Seller nor any of its ERISA
Affiliates’ employees or directors who are fiduciaries, or to the Knowledge of Seller, any other
fiduciary of an Employee Plan has engaged in a transaction with respect to any Employee Plan that,
assuming the taxable period of such transaction expired as of the date hereof, could subject Seller
or Buyer to a Tax or penalty imposed by either Section 4975 of the Code or Section 502(1) of ERISA
or a violation of Section 406 of ERISA. The Contemplated Transactions will not result in the
potential assessment of a Tax or penalty under Section 4975 of the Code or Section 502(1) of ERISA
nor result in a violation of Section 406 of ERISA.




          (j) Seller has maintained workers’ compensation coverage as required by applicable state law
through purchase of insurance and not by self-insurance or otherwise except as disclosed to Buyer
on Schedule 3.16(j).




          (k) The consummation of the Contemplated Transactions will not accelerate the time of vesting
or the time of payment, or increase the amount, of compensation due to any director, employee,
officer, former employee or former officer of Seller that will result in liability to CAI, the
Buyer or any Targeted Subsidiary. There are no contracts or arrangements providing for payments
that could subject any person to liability for Tax under Section 4999 of the Code. Buyer shall
have no Liability, and Seller shall exclusively be liable, for any responsibilities, liabilities
or obligations described in Section 10.1(e)(ii) or in Section 10.1(e)(iii) hereof.




          (1) Except for the continuation coverage requirements of COBRA, Seller has no obligations or
potential liability for benefits to employees, former employees or their respective dependents
following termination of employment or retirement under any of the Employee Plans that are
Employee Welfare Benefit Plans that will result in liability to CAI, the Buyer or any Targeted
Subsidiary.




          (m) None of the Contemplated Transactions will result in an amendment, modification or
termination of any of the Employee Plans that will result in Liability to CAI, the Buyer or any
Targeted Subsidiary. No written or oral representations have been made to any employee or former
employee of Seller promising or guaranteeing any employer payment or funding for the continuation
of medical, dental, life or disability coverage for any period of time beyond the end of the
current plan year (except to the extent of coverage required under COBRA) that will result in
Liability to CAI, the Buyer or any Targeted Subsidiary. No written or oral representations have
been made by Seller or the Targeted Subsidiaries, or any of their respective affiliates, to any
employee or former employee of Seller concerning the employee benefits of Buyer.




          (n) With respect to any Multiemployer Plan to which Seller or any ERISA Affiliate of Seller
has at any time had an obligation to contribute:




               (i) all contributions required by the terms of such Multiemployer Plan and any
collective bargaining agreement have been made when due; and



               (ii) neither Seller nor any ERISA Affiliate of Seller would be subject to any
withdrawal liability under Part 1 of Subtitle E of Title IV of ERISA if, as of the date
hereof, Seller or any ERISA Affiliate of Seller were to engage in a “complete withdrawal”
(as defined in ERISA Section 4203) or a “partial withdrawal” (as defined in ERISA Section
4205) from such Multiemployer Plan.



29









 





          (o) With respect to any Employee Plan that is a “multiple employer welfare arrangement”
within the meaning of Section 3(40)(A) of ERISA (a “MEWA”), and any other MEWA to which Seller or
any ERISA Affiliate of Seller has at any time had an obligation to contribute:




               (i) such MEWA has complied at all times with all applicable state laws; and



               (ii) neither Seller nor any ERISA Affiliate of Seller would be subject to any Liability
under any applicable state law if, as of the date hereof, Seller or any ERISA Affiliate of
Seller were to terminate its participation in such MEWA.



          (p) None of CAI, the Buyer or any Targeted Subsidiary shall have any Liability
with respect to any Employee Plan after the Effective Time.




     3.17
Compliance with Legal Requirements; Governmental Authorizations.



          (a) Except as set forth in Schedule 3.17(a):




               (i) Seller, including each Targeted Subsidiary, is, and at all times since December 31,
2004, has been, in full compliance with each Legal Requirement that is or was applicable to
it or to the conduct or operation of the Business or the ownership or use of any of
the Assets;



               (ii) no event has occurred or circumstance exists that (with or without notice or lapse
of time) (A) may constitute or result in a violation by Seller, including each Targeted
Subsidiary, of, or a failure on the part of Seller, including each Targeted Subsidiary, to
comply with, any Legal Requirement applicable, directly or indirectly, to the Business, any
Targeted Subsidiary or the Contemplated Transactions or (B) may give rise to any obligation
on the part of Seller, including each Targeted Subsidiary, to undertake, or to bear all or
any portion of the cost of, any remedial action of any nature applicable, directly or
indirectly, to the Business, any Targeted Subsidiary or the Contemplated Transactions; and



               (iii) Seller has not received, at any time since December 31, 2004, any notice or
other communication (whether oral or written) from any Governmental Body or any other
Person regarding (A) any actual, alleged, possible or potential violation of, or failure to
comply with, any Legal Requirement applicable, directly or indirectly, to the Business, any
Targeted Subsidiary or the Contemplated Transactions or (B) any actual, alleged, possible
or potential obligation on the part of Seller to undertake, or to bear all or any portion
of the cost of, any remedial action of any nature applicable, directly or indirectly, to
the Business, any Targeted Subsidiary or the Contemplated Transactions.



          (b) Schedule 3.17(b) contains a complete and accurate list of each Governmental
Authorization that is held by Seller that relates to the Business or the Assets or that is
held by any
Targeted Subsidiary. Each Governmental Authorization listed or required to be listed in
Schedule 3.17(b)
is valid and in full force and effect. Except as set forth in
Schedule 3.17(b):




               (i) Seller and the Targeted Subsidiaries are, and at all times since December 31,
2004, have been, in full compliance with all of the terms and requirements of each
Governmental Authorization identified or required to be identified in Schedule
3.17(b);



               (ii) no event has occurred or circumstance exists that may (with or without notice or
lapse of time) (A) constitute or result directly or indirectly in a violation of or a
failure




30












 






to comply with any term or requirement of any Governmental Authorization listed or required
to be listed in Schedule 3.17(b) or (B) result directly or indirectly in the revocation,
withdrawal, suspension, cancellation or termination of, or any modification to, any
Governmental Authorization listed or required to be listed in Schedule 3.17(b);




               (iii) Neither Seller nor any Targeted Subsidiary has received, at any time since
December 31, 2004, any notice or other communication (whether oral or written) from any
Governmental Body or any other Person regarding (A) any actual, alleged, possible or
potential violation of or failure to comply with any term or requirement of any
Governmental Authorization or (B) any actual, proposed, possible or potential revocation,
withdrawal, suspension, cancellation, termination of or modification to any Governmental
Authorization; and




               (iv) The Seller, including each Targeted Subsidiary, has not violated any “Business
Associate” agreement presented to Seller or any Targeted Subsidiary, by a “Covered Entity”
as such terms are defined in the Standards for Privacy of Individually Identifiable Health
Information (45 CFR parts 160 and 164) (the “Privacy Standards”) promulgated pursuant to 45
C.F.R. § 160.103 of the Health Information Portability and Accountability Act of 1996
(“HIPAA”), and to the Seller’s Knowledge, the Seller is not under investigation because of
any violation of any business associate agreement presented to Seller or any Targeted
Subsidiary by a covered entity as such terms are defined in 45 C.F.R. § 160.103 of HIPAA.
The Seller and the Targeted Subsidiaries, have not been, and to the Seller’s Knowledge,
none of their respective employees or contractors have been, debarred or excluded or
otherwise became ineligible to participate in any state or federal health care program,
convicted of a criminal offense related to the provision of healthcare items or services,
or under investigation or aware of any circumstance that would give rise to an
investigation related to any healthcare services or healthcare program.




               (v) all applications required to have been filed for the renewal of the Governmental
Authorizations listed or required to be listed in Schedule 3.17(b) have been duly filed on
a timely basis with the appropriate Governmental Bodies, and all other filings required to
have been made with respect to such Governmental Authorizations have been duly made on a
timely basis with the appropriate Governmental Bodies.



          The Governmental Authorizations listed in Schedule 3.17(b) collectively constitute all of the
Governmental Authorizations necessary to permit the Targeted Subsidiaries to lawfully conduct and
operate the Business prior to, and following, the Effective Time, in the manner in which it
currently conducts and operates such business and to permit the Targeted Subsidiaries to own and
use the Assets in the manner in which Seller or the Targeted Subsidiaries currently owns and uses
such Assets.




          3.18 Legal Proceedings; Orders.





               (a) Except as set forth in Schedule 3.18(a), there is no pending or, to Seller’s Knowledge,
threatened Proceeding:




                    (i) by or against Seller or the Targeted Subsidiaries or that otherwise relates to or
may affect the Business of, or any of the Assets; or




                    (ii) that challenges, or that may have the effect of preventing, delaying, making
illegal or otherwise interfering with, the Business or any of the Contemplated
Transactions.



31









 






               No event has occurred or circumstance exists that is reasonably likely to give rise to
or serve as a basis for the commencement of any such Proceeding. Seller has delivered to
Buyer copies of all pleadings, correspondence and other documents relating to each
Proceeding listed in Schedule 3.18(a). There are no Proceedings listed or required to be
listed in Schedule 3.18(a) that could have a Material Adverse Change.




          (b) Except as set forth in Schedule 3.18(b):




               (i) there is no Order to which Seller, the Targeted Subsidiaries, the Business or any
of the Assets is, or within the past three (3) years has been, subject; and




               (ii) No officer, director, agent or employee of Seller or the Targeted Subsidiaries is
subject to any Order that prohibits such officer, director, agent or employee from engaging
in or continuing any conduct, activity or practice relating to the Business.




          (c) Except as set forth in Schedule 3.18(c):




               (i) Seller and each Targeted Subsidiary is, and, at all times since December 31, 2004,
has been in compliance with all of the terms and requirements of each Order to which the
Business or any of the Assets is or has been subject;




               (ii) no event has occurred or circumstance exists that is reasonably likely to
constitute or result in (with or without notice or lapse of time) a violation of or failure
to comply with any term or requirement of any Order to which Seller, the Targeted
Subsidiaries or any of the Assets is subject; and




               (iii) Seller has not received, at any time since December 31, 2004, any notice or
other communication (whether oral or written) from any Governmental Body or any other
Person regarding any actual, alleged, possible or potential violation of, or failure to
comply with, any term or requirement of any Order to which Seller, the Targeted
Subsidiaries or any of the Assets is or has been subject.



          3.19 Absence of Certain Changes and Events. Except as set forth in Schedule 3.19, since the
date of the Balance Sheet, Seller and the Seller Subsidiaries conducted the Business only in the
Ordinary Course of Business of the Business and there has not been any:



               (a) change in the Targeted Subsidiaries’ authorized or issued capital stock, grant of any
stock option or right to purchase shares of capital stock of the Targeted Subsidiaries or issuance
of any security convertible into such capital stock;



               (b) amendment to the Governing Documents of the Targeted Subsidiaries or, as may relate to the
Business or the Contemplated Transactions, Seller;



               (c) payment (except in the Ordinary Course of Business of the Business) or increase, by Seller
or the Targeted Subsidiaries of any bonuses, salaries or other compensation, in excess of $100,000
per annum per person, to any shareholder, director, officer or employee, or entry into any
employment, severance or similar Contract with any director, officer or employee of Seller or any
Seller Subsidiary (each, as perform services for the Business) or of any Targeted Subsidiary
requiring payments by Seller or any Seller Subsidiary in excess of $100,000 per annum per person;



32









 





               (d) adoption of, amendment to or increase in the payments to or benefits under, any Employee
Plan;



               (e) damage to or destruction or loss of any Asset, whether or not covered by insurance;



               (f) entry into, termination of or receipt of notice of termination of (i) any license,
distributorship, dealer, sales representative, joint venture, credit or similar Contract to which
any Targeted Subsidiary is a party or to which Seller is a party and relating to the Business, or
(ii) any Contract or transaction involving a total remaining commitment by Seller or any Targeted
Subsidiary (in the case of Seller relating to the Business) of at least $25,000, individually or in
the aggregate;



               (g) sale, lease or other disposition of any Asset or property of Seller (in the case of any
Targeted Subsidiary or Seller, relating to the Business) (including the Intellectual Property
Assets) or the creation of any Encumbrance on any Asset;



               (h) cancellation or waiver of any claims or rights with a value to any Targeted Subsidiary or
Seller in excess of $25,000, individually or in the aggregate;



               (i) indication by any customer with revenues in excess of $25,000 since December 31, 2006, or
supplier with billings in excess of $25,000 since December 31, 2006, of an intention to discontinue
or change the terms of its relationship with any Targeted Subsidiary or Seller (in the case of
Seller, relating to the Business);



               (j) material change in the accounting or record keeping methods used by Seller;



               (k) Contract by Seller to do any of the foregoing;



               (l) material change in personnel; or



               (m) change in allocation of resources.



     3.20 Contracts; No Defaults.



               (a) All Seller Contracts (other than Excluded Assts) are, or prior to Closing will be, held by
a Targeted Subsidiary and such subsidiary will have all rights of Seller or any Seller Subsidiary
thereunder. Schedule 3.20(a) contains an accurate and complete list, and Seller has delivered to
Buyer accurate and complete copies, of:




                    (i) each Seller Contract that involves performance of services by Seller, relating to
the Business, or the Targeted Subsidiaries, of an amount or value in excess of Twenty-five
Thousand dollars ($25,000);




                    (ii) each Seller Contract that involves performance of services or delivery of goods
or materials to Seller or the Targeted Subsidiaries of an amount or value in excess of
Twenty-five Thousand dollars ($25,000);




                    (iii) each Seller Contract that was not entered into in the Ordinary Course of
Business of the Business and that involves expenditures or receipts of Seller in excess of
Twenty-five Thousand dollars ($25,000);



33









 






                    (iv) each Seller Contract affecting the ownership of, leasing of, title to, use of or
any leasehold or other interest in any real or personal property (except personal property
leases and installment and conditional sales agreements having a value per item or
aggregate payments of less than Twenty-five dollars ($25,000) and with a term of less than
one year);




                    (v) each Seller Contract with any labor union or other employee representative of a
group of employees relating to wages, hours and other conditions of employment;




                    (vi) each Seller Contract (however named) involving a sharing of profits, losses,
costs or liabilities by Seller with any other Person, including any broker or
administrative fee agreement;




                    (vii) each Seller Contract containing covenants that in any way purport to restrict
the Business activity or limit the freedom of Seller or the Targeted Subsidiaries to engage
in any line of business or to compete with any Person or that would limit the freedom of
the Targeted Subsidiaries or Buyer to engage in any line of business or compete with any
Person following the Effective Time.;




                    (viii) each Seller Contract providing for payments to or by any Person based on sales,
purchases or profits, other than direct payments for goods;




                    (ix) each power of attorney of Seller that relates to the Business or the Targeted
Subsidiaries that is currently effective and outstanding;




                    (x) each Seller Contract entered into other than in the Ordinary Course of Business of
the Business that contains or provides for an express undertaking by Seller or the Targeted
Subsidiaries to be responsible for consequential damages;




                    (xi) each Seller Contract for capital expenditures in excess of Twenty-five Thousand
dollars ($25,000);




                    (xii) each Seller Contract not denominated in U.S. dollars;




                    (xiii) each written warranty, guaranty and/or other similar undertaking with respect
to contractual performance extended by the Targeted Subsidiaries or Seller other than in
the Ordinary Course of Business of the Business; and




                    (xiv) each amendment, supplement and modification (whether oral or written) in respect
of any of the foregoing.



          Schedule 3.20(a) sets forth the parties to the Contracts, the amount of the remaining
commitment of the Targeted Subsidiaries or Seller under the Contracts and the location of Seller’s
office where the Contracts are located.



               (b) Except as set forth in Schedule 3.20(b), no Related Person of Seller (other than a
Targeted Subsidiary) has or may acquire any rights under, and no Related Person of Seller (other
than a Targeted Subsidiary) has or may become subject to any obligation or liability under, any
Contract that relates to the Business or any of the Assets.



34









 






               (c) Except as set forth in Schedule 3.20(c):




               (i) each Contract identified or required to be identified in Schedule 3.20(a) is in
full force and effect and is valid and enforceable in accordance with its terms;




               (ii) each Contract identified or required to be identified in Schedule 3.20(a) is
assignable, to the extent necessary to transfer the rights thereto, by Seller to Buyer or
the Targeted Subsidiaries as contemplated by this Agreement or the Contribution Agreement
without the Consent of any other Person; and




               (iii) to the Knowledge of Seller, no Contract identified or required to be identified
in Schedule 3.20(a) will upon completion or performance of the transactions contemplated
herein have a Material Adverse Change.




               (d) Except as set forth in Schedule 3.20(d):




                    (i) Seller and each Targeted Subsidiary is, and at all times since December 31, 2005
has been, in compliance in all material respects with all applicable terms and requirements
of each Seller Contract;




                    (ii) each other Person that has or had any obligation or Liability under any Seller
Contract, and at all times since December 31, 2005, has been, in compliance in all material
respects with all applicable terms and requirements of such Contract;




                    (iii) no event has occurred or circumstance exists that (with or without notice or
lapse of time) has, will, or could reasonably be expected to, contravene, conflict with or
result in a Breach of, or give Seller, the Targeted Subsidiaries or other Person the right
to declare a default or exercise any remedy under, or to accelerate the maturity or
performance of, or payment under, or to cancel, terminate or modify, any Seller Contract;




                    (iv) no event has occurred or circumstance exists under or by virtue of any Contract
that (with or without notice or lapse of time) would cause the creation of any Encumbrance
affecting any of the Assets or the Business; and




                    (v) neither Seller nor the Targeted Subsidiaries have given to or received from any
other Person, at any time since December 31, 2005, any notice or other communication
(whether oral or written) regarding any actual, alleged, possible or potential violation or
Breach of, or default under, any Seller Contract.



               (e) There are no renegotiations of, attempts to renegotiate or outstanding rights to
renegotiate any material amounts paid or payable to Seller or any Targeted Subsidiary under current
or completed Seller Contracts with any Person having the contractual or statutory right to demand
or require such renegotiation and no such Person has made written demand for such renegotiation.



               (f) Each Seller Contract has been entered into in the Ordinary Course of Business of the
Business and has been entered into without the commission of any act alone or in concert with any
other Person, or any consideration having been paid or promised, that is or would be in violation
of any Legal Requirement.



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          3.21 Insurance.





          (a) Seller has delivered to Buyer:




               (i) accurate and complete copies of all policies of insurance (and correspondence
relating to coverage thereunder) to which Seller or any Seller Subsidiary (each, as affects
the Business) or any Targeted Subsidiary is a party or under which Seller or any Targeted
Subsidiary is or has been covered at any time since December 31, 2005 (in the case of
Seller as relates to the Business), a list of which is included in Schedule 3.21(a);




               (ii) accurate and complete copies of all pending applications by Seller (as affects
the Business) or any Targeted Subsidiary for policies of insurance; and




               (iii) any statement by the auditor of Seller’s financial statements or any consultant
or risk management advisor with regard to the adequacy of Seller’s or any Seller
Subsidiary’s (each, as affects the Business) or any Targeted Subsidiary’s coverage or of
the reserves for claims.




          (b) Schedule 3.21(b) describes:




               (i) any self-insurance arrangement by or affecting Seller or any Targeted Subsidiary,
including any reserves established thereunder;




               (ii) any Contract or arrangement, other than a policy of insurance, for the transfer
or sharing of any risk to which Seller or any Targeted Subsidiary is a party or which
involves the Business; and




               (iii) all obligations of Seller or any Seller Subsidiary (each, as affects the
Business) or any Targeted Subsidiary to provide insurance coverage to Third Parties (for
example, under Leases or service agreements) and identifies the policy under which such
coverage is provided.



          (c) Schedule 3.21(c) sets forth, by year, for the current policy year and each of the three
(3) preceding policy years:




               (i) a summary of the loss experience under each policy of insurance;




               (ii) a statement describing each claim under a policy of insurance for an amount in
excess of $10,000 which sets forth:




                    (A) the name of the claimant;




                    (B) a description of the policy by insurer, type of insurance and period of coverage;
and




                    (C) the amount and a brief description of the claim; and




               (iii) a statement describing the loss experience for all claims that were
self-insured, including the number and aggregate cost of such claims.



          (d) Except as set forth in Schedule 3.21(d):



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               (i) all policies of insurance to which Seller or any Seller Subsidiary (each, as
affects the Business) is a party or that provide coverage to Seller (as affects the
Business) or any Targeted Subsidiary:




                    (A) are valid, outstanding and enforceable;




                    (B) are issued by an insurer that is financially sound and
reputable;




                    (C) taken together, provide adequate insurance coverage for the Assets and the
operations of the Business and the Targeted Subsidiaries for all risks normally insured
against by a Person carrying on the Business in the same location; and




                    (D) are sufficient for compliance with all Legal Requirements and Seller Contracts;




               (ii) Neither Seller nor any Targeted Subsidiary has received (A) any refusal of
coverage or any notice that a defense will be afforded with reservation of rights or (B)
any notice of cancellation or any other indication that any policy of insurance is no
longer in full force or effect or that the issuer of any policy of insurance is not willing
or able to perform its obligations thereunder;




               (iii) Seller, and each Targeted Subsidiary, has paid all premiums due, and has
otherwise performed all of its obligations, under each policy of insurance to which it is a
party or that provides coverage to Seller (as affects the Business), the Targeted
Subsidiaries or otherwise affects the Business; and




               (iv) Seller (as affects the Business), and each Targeted Subsidiary, has given notice
to the insurer of all claims that may be insured thereby.



          3.22
Environmental Matters. Except as disclosed in Schedule 3.22:




                    (a) Seller, and each Targeted Subsidiary, is, and at all times has been, in full compliance
with, and has not been and is not in violation of or liable under, any Environmental Law. Seller
has no basis to expect, nor has any other Person for whose conduct they are or may be held to be
responsible received, any actual or threatened order, notice or other communication from (i) any
Governmental Body or private citizen acting in the public interest or (ii) the current or prior
owner or operator of any Facilities, of any actual or potential violation or failure to comply with
any Environmental Law, or of any actual or threatened obligation to undertake or bear the cost of
any Environmental, Health and Safety Liabilities with respect to any Facility or other property or
asset (whether real, personal or mixed) in which Seller or any Targeted Subsidiary has or had an
interest, or with respect to any property or Facility at or to which Hazardous Materials were
generated, manufactured, refined, transferred, imported, used or processed by Seller or any
Targeted Subsidiary or any other Person for whose conduct it is or may be held responsible, or from
which Hazardous Materials have been transported, treated, stored, handled, transferred, disposed,
recycled or received.



                    (b) There are no pending or, to the Knowledge of Seller, threatened claims, Encumbrances, or
other restrictions of any nature resulting from any Environmental, Health and Safety Liabilities or
arising under or pursuant to any Environmental Law with respect to or affecting any Facility or any
other property or asset (whether real, personal or mixed) in which Seller has or had an interest.



37









 





               (c) Seller has no Knowledge of or any basis to expect, nor does it, or any other Person for
whose conduct it is or may be held responsible, received, any citation, directive, inquiry, notice,
Order, summons, warning or other communication that relates to Hazardous Activity, Hazardous
Materials, or any alleged, actual, or potential violation or failure to comply with any
Environmental Law, or of any alleged, actual, or potential obligation to undertake or bear the cost
of any Environmental, Health and Safety Liabilities with respect to any Facility or property or
asset (whether real, personal or mixed) in which Seller or any Targeted Subsidiary has or had an
interest, or with respect to any property or Facility to which Hazardous Materials generated,
manufactured, refined, transferred, imported, used or processed by Seller or any Targeted
Subsidiary or any other Person for whose conduct it is or may be held responsible, have been
transported, treated, stored, handled, transferred, disposed, recycled or received.



               (d) Neither Seller, any Targeted Subsidiary nor any other Person for whose conduct it is or
may be held responsible has any Environmental, Health and Safety Liabilities with respect to any
Facility or, to the Knowledge of Seller, with respect to any other property or asset (whether real,
personal or mixed) in which Seller (or any predecessor) has or had an interest or at any property
geologically or hydrologically adjoining any Facility or any such other property or asset.



               (e) There are no Hazardous Materials present on or in the Environment at any Facility or at
any geologically or hydrologically adjoining property, including any Hazardous Materials contained
in barrels, aboveground or underground storage tanks, landfills, land deposits, dumps, equipment
(whether movable or fixed) or other containers, either temporary or permanent, and deposited or
located in land, water, sumps, or any other part of the Facility or such adjoining property, or
incorporated into any structure therein or thereon. Neither Seller, any Targeted Subsidiary nor any
Person for whose conduct it is or may be held responsible, or to the Knowledge of Seller, or any
other Person, has permitted or conducted, or is aware of, any Hazardous Activity conducted with
respect to any Facility or any other property or assets (whether real, personal or mixed) in which
Seller or any Targeted Subsidiary has or had an interest except in full compliance with all
applicable Environmental Laws.



               (f) There has been no Release or, to the Knowledge of Seller, Threat of Release, of any
Hazardous Materials at or from any Facility or at any other location where any Hazardous Materials
were generated, manufactured, refined, transferred, produced, imported, used, or processed from or
by any Facility, or from any other property or asset (whether real, personal or mixed) in which
Seller or any Targeted Subsidiary has or had an interest, or to the Knowledge of Seller any
geologically or hydrologically adjoining property, whether by Seller, any Targeted Subsidiary or
any other Person.



               (g) Seller has delivered to Buyer true and complete copies and results of any reports,
studies, analyses, tests, or monitoring possessed or initiated by Seller or any Targeted Subsidiary
pertaining to Hazardous Materials or Hazardous Activities in, on, or under the Facilities, or
concerning compliance, by Seller or any Targeted Subsidiary or any other Person for whose conduct
it is or may be held responsible, with Environmental Laws.



          3.23 Employees.




                    (a) Schedule 3.23(a) contains a complete and accurate list of the following information for
each employee, director, independent contractor, consultant and agent of each Seller Subsidiary or
Seller as relates to or performs services for the Business, including each employee on leave of
absence or layoff status: employer; name; job title; date of hiring or engagement; date of
commencement of employment or engagement; current compensation paid or payable and any change in
compensation since June 30, 2006; sick and vacation leave that is accrued but unused; and service
credited for purposes of vesting and eligibility to participate under any Employee Plan, or any
other



38









 




employee or director benefit plan. Each Targeted Subsidiary has no employee, director, independent
contractor, consultant or agent.




               (b) Schedule 3.23(b) contains a complete and accurate list of the following information for
each retired employee or director of Seller or any Seller Subsidiary, or their dependents,
receiving benefits or scheduled to receive benefits in the future: name; pension benefits; pension
option election; retiree medical insurance coverage; retiree life insurance coverage; and other
benefits (collectively, “Retiree Benefits.”) The Targeted Subsidiaries have, and as of and after
the Closing Date, shall have no liabilities related to any Retiree Benefits



               (c) Schedule 3.23(c) states the number of employees who performed services for the Business or
the Targeted Subsidiaries and who were terminated by Seller since December 31, 2005, and contains a
complete and accurate list of the following information for each employee of Seller who has been
terminated or laid off, or whose hours of work have been reduced by more than fifty percent (50%)
by Seller, in the six (6) months prior to the date of this Agreement: (i) the date of such
termination, layoff or reduction in hours; (ii) the reason for such termination, layoff or
reduction in hours; and (iii) the location to which the employee was assigned.



               (d) Neither Seller nor any Targeted Subsidiary has violated the Worker Adjustment and
Retraining Notification Act (the “WARN Act”) or any similar state or local Legal Requirement.
During the ninety (90) day period prior to the date of this Agreement, Seller including all
Subsidiaries, including the Targeted Subsidiaries, has terminated forty-one (41) employees.



               (e) To the Knowledge of Seller, no officer, director, agent, employee, consultant, or
contractor of Seller or the Targeted Subsidiaries is bound by any Contract that purports to limit
the ability of such officer, director, agent, employee, consultant, or contractor (i) to engage in
or continue or perform any conduct, activity, duties or practice relating to the Business or (ii)
to assign to Seller or to any other Person any rights to any invention, improvement, or discovery.
No former or current employee of Seller or the Targeted Subsidiaries is a party to, or is otherwise
bound by, any Contract that in any way adversely affected, affects, or will affect the ability of
Seller, the Targeted Subsidiaries or Buyer to conduct the Business as heretofore carried on by
Seller or the Targeted Subsidiaries.



     3.24 Labor Disputes; Compliance.



               (a) Seller has complied in all respects with all Legal Requirements relating to employment
practices, terms and conditions of employment, equal employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, collective bargaining and other requirements, the payment of
social security and similar Taxes and occupational safety and health. Seller is not liable for the
payment of any Taxes, fines, penalties, or other amounts, however designated, for failure to comply
with any of the foregoing Legal Requirements.



               (b) Except as disclosed in Schedule 3.24(b), (i) Seller has not been, and is not now, a party
to any collective bargaining agreement or other labor contract; (ii) since December 31, 2004, there
has not been, there is not presently pending or existing, and to Seller’s Knowledge, there is not
threatened, any strike, slowdown, picketing, work stoppage or employee grievance process involving
Seller; (iii) to Seller’s Knowledge, no event has occurred or circumstance exists that could
provide the basis for any work stoppage or other labor dispute; (iv) there is not pending or, to
Seller’s Knowledge, threatened against or affecting Seller any Proceeding relating to the alleged
violation of any Legal Requirement pertaining to labor relations or employment matters, including
any charge or complaint filed with the National Labor Relations Board or any comparable
Governmental Body, and there is no organizational activity or other labor dispute against or
affecting Seller or the Facilities; (v) no application



39









 




or petition for an election of or for certification of a collective bargaining agent is pending;
(vi) no grievance or arbitration Proceeding exists that might have an adverse effect upon Seller or
the conduct of the Business; (vii) there is no lockout of any employees by Seller, and no such
action is contemplated by Seller; and (viii) to Seller’s Knowledge there has been no charge of
discrimination filed against or threatened against Seller with the Equal Employment Opportunity
Commission or similar Governmental Body.




     3.25 Intellectual Property Assets.



               (a) The term “Intellectual Property Assets” means all intellectual property owned or licensed
(as licensor or licensee) by Seller or any Targeted Subsidiary, or used in connection with, the
Business in which Seller or such Targeted Subsidiary has a proprietary interest, including:




                    (i) each Targeted Subsidiary’s and Seller’s (in the case of Seller, as relates to, or
is used in connection with, the Business) name, all assumed fictional business names, trade
names, registered and unregistered trademarks, service marks and applications
(collectively, “Marks”);




                    (ii) all patents, patent applications, patent disclosures, all re-issues, divisions,
continuations, renewals, extensions and inventions continuation-in-parts thereof and
discoveries that may be patentable improvements thereto (collectively, “Patents”);




                    (iii) all registered and unregistered copyrights in both published works and
unpublished works and applications for registration thereof (collectively, “Copyrights”);




                    (iv) Trade secrets and confidential business information (including ideas, formulas,
compositions, inventions, whether patentable or unpatentable and whether or not reduced to
practice, know-how (excluding all such trade secrets unrelated to the Transferred
Technology), manufacturing and production processes and techniques, research and
development information, drawings, flow charts, processes ideas, specifications, designs,
plans, proposals, technical data, copyrightable works, financial, marketing, and business
data, pricing and cost information, business and marketing plans, and customer and supplier
lists and information);




                    (v) Trademarks, service marks, trade dress, logos, trade names, and corporate names
and registrations and applications for registration thereof and all goodwill associated
therewith (“Trademarks”);




                    (vi) all rights in mask works, including registrations and applications for
registration thereof;




                    (vii) all right, title and interest in all computer software, data and documentation
(including, without limitation, modifications, enhancements, revisions or versions of or to
any of the foregoing);




                    (viii) all rights in internet web sites and internet domain names presently used by
Seller (collectively, “Net Names”);




                    (ix) Other proprietary rights;




                    (x) all income, royalties, damages and payments due at Closing or thereafter with
respect to the Transferred Technology and all other rights thereunder including, without



40









 






limitation, damages and payments for past, present or future infringements or
misappropriations thereof, the right to sue and recover for past, present or future
infringements or misappropriations thereof;




(xi) all rights to use all of the foregoing forever; and



(xii) all other rights in, to, and under the foregoing in all countries.



          (b) Schedule 3.25(b) contains a complete and accurate list and summary description, including
any royalties paid, owed or received by Seller or any Targeted Subsidiary (in the case of Seller as
relates to the Business), and Seller has delivered to Buyer accurate and complete copies, of all
Seller Contracts relating to the Intellectual Property Assets, except for any license implied by
the sale of a product and perpetual, paid-up licenses for commonly available Software programs
subject to a value of shrinkwrap or clickwrap license agreement commonly available for less than
$1,000 under which Seller or any Targeted Subsidiary (in the case of Seller, as relates to the
Business) is the licensee. There are no outstanding and, to Seller’s Knowledge, no disagreements
with respect to any such Contract. Neither Seller nor any Targeted Subsidiary sublicenses or makes
available for use or access to any Third Party any Intellectual Property Asset. No Intellectual
Property Assets owned or exclusively licensed by Seller or any Targeted Subsidiary is subject to a
source code escrow agreement or source code license agreement.




          (c) (i) Except as set forth in Schedule 3.25(c), the Intellectual Property Assets are all
those necessary for the operation of the Business as it is currently conducted. A Targeted
Subsidiary is, or will be as of the Closing Date, the owner or licensee of all right, title and
interest in and to each of the Intellectual Property Assets, free and clear of all Encumbrances,
and has or will have the right to use without payment to a Third Party all of the Intellectual
Property Assets, other than in respect of licenses listed in Schedule 3.25(c).





               (ii) Except as set forth in Schedule 3.25(c), all former and current employees of
Seller or any Targeted Subsidiary (in the case of Seller, as relates to the Business) have
executed written Contracts with Seller or such Targeted Subsidiary that assign to Seller
all rights to any inventions, improvements, discoveries or information relating to the
Business. In the event any such assignment was made to Seller and relates to the Business,
Seller has the right to, and shall, prior to the Closing Date, further assign such rights
to a Targeted Subsidiary.



          (d) (i) Schedule 3.25(d) contains a complete and accurate list and summary description of all
Patents, including all related pending applications and issued Patents.





               (ii) All of the issued Patents are currently in compliance with formal legal
requirements (including payment of filing, examination and maintenance fees and proofs of
working or use), are valid and enforceable, and are not subject to any maintenance fees or
taxes or actions falling due within ninety (90) days after the Closing Date.




               (iii) No Patent has been or is now involved in any interference, reissue,
reexamination, or opposition Proceeding. To Seller’s Knowledge, there is no potentially
interfering Patent or Patent application of any Third Party.




               (iv) Except as set forth in Schedule 3.25(d), (A) no Patent is infringed or, to
Seller’s Knowledge, has been challenged or threatened in any way, and (B) none of the
products manufactured or sold, nor any process or know-how used, by Seller infringes or is
alleged to infringe any Patent or other proprietary right of any other Person.



41









 






          (v) All products made, used or sold under the Patents have been marked with the proper
patent notice.



          (e) (i) Schedule 3.25(e) contains a complete and accurate list and summary description of all
Marks, including all related pending applications and registered Marks.





               (ii) All Marks have been registered with the United States Patent and Trademark
Office, are currently in compliance with all formal Legal Requirements (including the
timely post-registration filing of affidavits of use and incontestability and renewal
applications), are valid and enforceable and are not subject to any maintenance fees or
taxes or actions falling due within ninety (90) days after the Closing Date.




               (iii) Except as set forth in Schedule 3.25(e), no Mark has been or is now involved in
any opposition, invalidation or cancellation Proceeding and, to Seller’s Knowledge, no such
action is threatened with respect to any of the Marks.




               (iv) Except as set forth in Schedule 3.25(e), to Seller’s Knowledge, there is no
potentially interfering trademark or trademark application of any other Person.




               (v) Except as set forth in Schedule 3.25(e), no Mark is infringed or, to Seller’s
Knowledge, has been challenged or threatened in any way. None of the Marks used by Seller
infringes or is alleged to infringe any trade name, trademark or service mark of any other
Person.




               (vi) All products and materials containing a Mark bear a notice of rights (such as TM
or SM designation) or the proper federal registration notice where permitted by law.



          (f) (i) Schedule 3.25(f) contains a complete and accurate list and summary description of all
Copyrights.





               (ii) All of the registered Copyrights are currently in compliance with formal Legal
Requirements, are valid and enforceable, and are not subject to any maintenance fees or
taxes or actions falling due within ninety (90) days after the date of Closing.




               (iii) No Copyright is infringed or, to Seller’s Knowledge, has been challenged or
threatened in any way. None of the subject matter of any of the Copyrights infringes or is
alleged to infringe any copyright of any Third Party or is a derivative work based upon the
work of any other Person.




               (iv) All works encompassed by the Copyrights have been marked with the proper
copyright notice.



          (g) (i) With respect to each Trade Secret, the documentation relating to such Trade Secret is
current, accurate and sufficient in detail and content to identify and explain it and to allow its
full and proper use without reliance on the Knowledge or memory of any individual.





               (ii) Seller has taken all reasonable precautions to protect the secrecy,
confidentiality and value of all Trade Secrets (including the enforcement by Seller of a
policy requiring each employee or contractor to execute proprietary information and
confidentiality agreements substantially in Seller’s standard form, and all current and
former employees and contractors of Seller have executed such an agreement).



42









 






               (iii) A Targeted Subsidiary has, or, as detailed on Schedule 3.25(g), will have prior
to the Closing Date, good title to and an absolute right to use the Trade Secrets. The
Trade Secrets are not part of the public knowledge or literature and, to Seller’s
Knowledge, have not been used, divulged or appropriated either for the benefit of any
Person (other than Seller) or to the detriment of Seller or any Targeted Subsidiary. No
Trade Secret is subject to any adverse claim or has been challenged or threatened in any
way or infringes any intellectual property right of any other Person.



          (h) (i) Schedule 3.25(h) contains a complete and accurate list and summary description of all
Net Names.





               (ii) All Net Names have been, or, as detailed on Schedule 3.25(h), will be prior to
the Closing Date, registered in the name of a Targeted Subsidiary and are in compliance
with all formal Legal Requirements.




               (iii) No Net Name has been or is now involved in any dispute, opposition, invalidation
or cancellation Proceeding and, to Seller’s Knowledge, no such action is threatened with
respect to any Net Name.




               (iv) To Seller’s Knowledge, there is no domain name application pending of any other
person which would or would potentially interfere with or infringe any Net Name.




               (v) No Net Name is infringed or, to Seller’s Knowledge, has been challenged,
interfered with or threatened in any way. No Net Name infringes, interferes with or is
alleged to interfere with or infringe the trademark, copyright or domain name of any other
Person.



               (i) None of the Intellectual Property Assets, or their respective past or current uses by or
through any Seller has violated or infringed upon, or is violating or infringing upon, any patent,
copyright, trade secret, moral right or other proprietary right owned by any Person, whether such
rights are registered or unregistered. None of the Intellectual Property Assets, or the conduct of
the Business, as operated or conducted in the past or as currently operated or conducted would
result in a valid basis for a claim by any Person related to invasion of privacy, right of
publicity, defamation, infringement of moral rights, violation of HIPAA or any similar state laws,
or any other causes of action arising out of the use, adaptation, modification, reproduction,
distribution, sale, or exhibition of the Intellectual Property Assets.



               (j) To the Knowledge of Seller or any Targeted Subsidiary, no Person is violating or
infringing upon, or has violated or infringed upon at any time, any of Sellers’ proprietary rights
to any of the Intellectual Property Assets.



               (k) None of the Intellectual Property Assets are owned by or registered in the name of any
current or former owner, shareholder, partner, director, executive, officer, employee, salesman,
agent, customer, contractor or representative, nor does any such person have any interest therein
or right thereto, including, but not limited to, the right to royalty payments. Except as listed on
Schedule 3.25(k), the Seller and the Targeted Subsidiaries have not granted any Third Party any
exclusive rights related to any Intellectual Property Assets.



               (l) No former employer of any employee or consultant of the Seller or any Targeted Subsidiary
has made a claim against Seller or any Targeted Subsidiary, or against any other person, that
Seller or any Targeted Subsidiary or such employee or consultant is misappropriating or violating
the proprietary rights of such former employer with respect to the Intellectual Property Assets.




43












 





          (m) Except as set forth on Schedule 3.25(m), neither Seller nor any Targeted Subsidiary is a
party to or bound by, and upon the consummation of the transactions contemplated by this Agreement
Buyer will not be a party to or bound by (as a result of any acts or agreements of any Seller), any
license or other agreement requiring the payment by Buyer of any royalty or license payment.



          (n) Without limiting any of the foregoing, none of Seller’s or any Targeted Subsidiary’s
officers, directors, employees or independent contractors have disclosed to (without proper
obligation of confidentiality) or otherwise used or utilized on behalf of any person other than
Seller or the Targeted Subsidiary, any Trade Secrets or proprietary information with respect to the
Intellectual Property Assets



          (o) Neither Seller nor any Targeted Subsidiary is and none of their respective employees are
debarred or excluded or otherwise ineligible to participate in any state or Federal health care
program, has not been convicted of a criminal offense related to the provision of healthcare items
or services, and is not under investigation or aware of any circumstance that would give rise to an
investigation related to any healthcare services or healthcare program.



     3.26 SEC Filings; Financial Statements.



          (a) Seller has filed all forms, reports and documents required to be filed by it with the SEC
since December 31, 2004, including (i) all Annual Reports on Form 10-K, (ii) all Quarterly Reports
on Form 10-Q, (iii) all proxy statements relating to meetings of shareholders (whether annual or
special), (iv) all Reports on Form 8-K, (v) all other reports or registration statements, and (vi)
all amendments, exhibits and supplements to all such reports and registration statements
(collectively, the “Seller SEC Reports”). The Seller SEC Reports, including all forms,
reports and documents to be filed by Seller with the SEC after the date hereof and prior to the
Effective Time, (i) were and, in the case of Seller SEC Reports filed after the date hereof, will
be prepared in all material respects in accordance with the applicable requirements of the
Securities Act, the Exchange Act, and the published rules and regulations of the SEC thereunder,
and (ii) did not as of the time they were filed, and in the case of such forms, reports and
documents filed by Seller with the SEC after the date of this Agreement, will not as of the time
they are filed, contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were and will be made, not misleading. No Seller Subsidiary is
subject to the periodic reporting requirements of the Exchange Act. There is no unresolved
violation of the Exchange Act or the published rules and regulations of the SEC asserted by the SEC
or any other Governmental Entity with respect to the Seller SEC Reports.



          (b) Each of the consolidated financial statements (including any notes thereto) contained in
the Seller SEC Reports was prepared in accordance with the rules and regulations of the SEC and
GAAP applied on a consistent basis throughout the periods indicated (except as may be indicated in
the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q under the
Exchange Act) and each presented fairly or, in the case of Seller SEC Reports filed after the date
hereof, will present fairly, in all material respects, the consolidated financial position, results
of operations and cash flows of Seller and the consolidated Subsidiaries of Seller as at the
respective dates thereof and for the respective periods indicated therein, except as otherwise
noted therein (subject, in the case of unaudited statements, to normal and recurring year-end
adjustments which have not been and are not expected to be material, individually or in the
aggregate).



          (c) The Chief Executive Officer and Chief Financial Officer of Seller have each executed,
delivered and filed with applicable Seller SEC Reports the certificates required under Section 302
and 906 of the Sarbanes-Oxley Act of 2002.



44









 





          (d) The information supplied by Seller for inclusion in the Proxy Statement shall not, at (i)
the time the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to
the shareholders of Seller, (ii) the time of the Seller Shareholders Meeting and (iii) the
Effective Time, contain any untrue statement of a material fact or fail to state any material fact
required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If, at any time prior to the Effective
Time, any event or circumstance relating to Seller or any Subsidiary of Seller, or their respective
officers or directors, that should be set forth in an amendment or a supplement to the Proxy
Statement should be discovered by Seller, Seller shall promptly inform Buyer thereof. All documents
that Seller is responsible for filing with the SEC in connection with the Contemplated Transactions
by this Agreement will comply as to form and substance in all material respects with the applicable
requirements of the Securities Act and the rules and regulations thereunder and the Exchange Act
and the rules and regulations thereunder.



     3.27 Shareholder Rights Agreement. Neither Seller, including each Targeted Subsidiary,
nor, to Seller’s Knowledge, any of its shareholders, have an effective shareholder rights agreement
or any similar plan or agreement that limits or impairs the ability to purchase, or become the
direct or indirect beneficial owner of, any equity or debt securities of the Targeted Subsidiaries.



     3.28 Relationships with Related Persons. Except as disclosed in Schedule 3.28,
no Related Person of Seller has, or since December 31, 2005, has had, any interest in any property
(whether real, personal or mixed and whether tangible or intangible) used in or pertaining to the
Business or any Targeted Subsidiary. No Related Person of Seller owns, or since December 31, 2005,
has owned, of record or as a beneficial owner, an Equity Interest or any other financial or profit
interest in any Person that has (a) had business dealings or a material financial interest in any
transaction related to or affecting the Business or any Targeted Subsidiary, other than business
dealings or transactions disclosed in Schedule 3.28, each of which has been conducted in
the Ordinary Course of Business with Seller (as relates to the Business or any Targeted
Subsidiary), at substantially prevailing market prices and on substantially prevailing market
terms, or (b) engaged in competition with Seller or any Targeted Subsidiary with respect to the
Business, except for ownership of less than one percent (1%) of the outstanding capital stock of
any entity engaged in a competing business that is publicly traded on any recognized exchange or in
the over-the-counter market. Except as set forth in Schedule 3.28, no Related Person of
Seller is a party to any Seller Contract with, or has any claim or right against, Seller.



     3.29 Solvency.



          (a) Seller is not now insolvent and will not be rendered insolvent by any of the Contemplated
Transactions. As used in this section, “insolvent” means that the sum of the debts and other
probable Liabilities of Seller exceeds the present fair saleable value of Seller’s assets.



          (b) Immediately after giving effect to the consummation of the Contemplated Transactions: (i)
Seller will be able to pay its Liabilities as they become due in the usual course of its business;
(ii) Seller will not have unreasonably small capital with which to conduct its present or proposed
business; (iii) Seller will have assets (calculated at fair market value) that exceed its
Liabilities; and (iv) taking into account all pending and threatened litigation, final judgments
against Seller in actions for money damages are not reasonably anticipated to be rendered at a time
when, or in amounts such that, Seller will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum probable amount of such judgments in
any such actions and the earliest reasonable time at which such judgments might be rendered) as
well as all other obligations of Seller. The cash available to Seller, after taking into account
all other anticipated uses of the cash, will be sufficient to pay all such debts and judgments
promptly in accordance with their terms.



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     3.30 Disclosure.



          (a) No representation or warranty or other statement made by Seller in this Agreement, any
Schedule, any supplement to any Schedule, the certificates delivered pursuant to Section 2.4(a) or
otherwise in connection with the Contemplated Transactions contains any untrue statement or omits
to state a material fact necessary to make any of them, in light of the circumstances in which it
was made, not misleading.



          (b) Seller does not have Knowledge of any fact that has specific direct or indirect
application to the Business (other than general economic or industry conditions) and that may
materially adversely affect the Assets, Business, prospects, financial condition or results of
operations of the Business that has not been set forth in this Agreement or the Schedules delivered
by Seller pursuant to this Agreement.



     3.31 Prior Acquisitions. No earn-out or other contingent payments or other payment
obligations are hereafter payable or outstanding in consideration of any Person’s ownership
interest in the entity sold (other than payments for bona fide services) by the Seller or any
Targeted Subsidiary of any operating business or the capital stock of any other Person (the
acquisition agreements and all related documents relating to such acquisitions, the
“Acquisition Agreements”). None of the Seller or the Targeted Subsidiaries, or to the
Knowledge of the Seller, any other Person, has breached in any material respect any of the
Acquisition Agreements. Except as set forth in Schedule 3.31, no claims for
indemnification under such Acquisition Agreements have been made and are presently outstanding, are
pending or are threatened by the Seller or a Targeted Subsidiary and no claims for indemnification
have been made, are pending, or to the Knowledge of the Seller, are threatened, by any counterparty
thereto. None of the Seller or any Targeted Subsidiary has any Liabilities or ongoing monetary
obligations in respect of the dispositions or discontinuance of business made prior to the Closing
Date.



     3.32 Customers and Other Relationships.



          (a) Schedule 3.32(a) sets forth a true and correct list setting forth the twenty-five
(25) largest customers, the twenty-five (25) largest vendors, the one hundred (100) largest
providers and the twenty-five (25) largest contracted networks of each Targeted Subsidiary and
Seller (in the case of Seller, related to the Business) (excluding employees and independent
contractors disclosed on Schedule 3.32(a)) by dollar amount for the trailing twelve-months
ended September 30, 2007. There have been no significant changes to such list for the trailing
twelve-months ending September 30, 2007. Except as set forth on Schedule 3.32(a), Seller
has no Knowledge that the benefits of any relationship with any of the major customers or
contracted networks of the Targeted Subsidiaries or Seller (in the case of Seller, related to the
Business) will not continue after the Closing Date in substantially the same manner as prior to the
date of this Agreement. None of Seller nor any Targeted Subsidiary has entered into any agreement
or arrangements with any customer, vendor, provider or contracted networks that is outside of the
Ordinary Course of Business of the Business (in the case of Seller, related to the Business) and
all such arrangements entered into by Seller or any Targeted Subsidiary with customers, vendors,
providers and contracted networks within the twelve (12) months prior to the Closing Date have been
on terms and conditions with a view to preserving the value of the Business. No bribes, kickbacks
or other improper payments have been made by or on behalf of Seller or any Targeted Subsidiary to
any customer, vendor, provider, contracted networks or any Person. There have been no complaints
or problems relating to services provided by Seller (related to the Business) or any Targeted
Subsidiary in connection with the Business that have resulted, in the last three (3) years, in (i)
reimbursements, discounts or payments in excess of $25,000 or (ii) a discontinuation of such
services, nor have there been other reimbursements or discounts in excess of $25,000 relating to
services provided in connection with the Business. Except as set forth on Schedule 3.32(a),
no customer has requested a fee reduction, threatened termination of its



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relationship with Seller or the Targeted Subsidiaries, threatened a reduced tier position, claimed
a refund or requested credits above such customers average for the six (6) month period prior to
the date of this Agreement and the Closing Date. Set forth on Schedule 3.32(a) is a list of
all affiliate networks to which Seller or any Seller Subsidiary has or had access (pursuant to
valid rights thereto) since December 31, 2005 (the “Network Affiliates”), indicating the
amount of accounts payable past due to each such network. There have been no material complaints or
problems relating to services provided by Seller or the Targeted Subsidiaries, or any predecessor
entity since December 31, 2006, and no Affiliate Network has terminated access to its network,
provided a notice of termination or threatened to terminate access. There are no audits or other
reviews scheduled or in process, or completed, by any Network Affiliate with respect to Seller’s or
any Seller Subsidiaries’ use or access of the Network Affiliate’s PPO or other network
(“Network Affiliate Audit”). Set forth on Schedule 3.32(a) is a list of adjustments
in excess of $25,000 that have been made or requested since December 31, 2005 pursuant to any
Network Affiliate Audit. Seller and/or the Targeted Subsidiaries have computed network payables in
the Ordinary Course of Business and in accordance with the agreement between Seller (or Targeted
Subsidiaries) and any Network Affiliate. No Network Affiliate has provided notice or a request for
a modification to the fee schedule since December 31, 2006.



          (b) There are no claims currently, or any claims threatened or events that have occurred that
could result in a customer of any Targeted Subsidiary being entitled to or receiving
indemnification, refund, rebate or other Damages arising out of any act or omission of, any Seller
Contract prior to the Closing Date in excess of $25,000.



          (c) A true, correct and complete summary of all of the Seller or Targeted Subsidiary direct or
owned provider contracts that are used in connection with, or related to, the Business, including
the number of contracts, identified by the name of the provider, the type of provider, the location
by state of the provider, and in which legal entity and network they reside shall be delivered to
Buyer no later than five (5) Business Days prior to the Closing Date, is. A true, correct and
complete copy of all of the Seller or Targeted Subsidiary direct or owned provider contracts that
are used in connection with, or related to, the Business is contained on a CD-ROM that shall be
delivered to Buyer no later than five (5) Business Days prior to the Closing Date. Each such
provider contract is in full force and effect.



          (d) Set forth on Schedule 3.32(d) is a true and correct schedule of the revenue of the
Business from the top 50 customers of the Business (based on revenue for the 18-month period ended
September 30, 2007) for each month in the 18-month period ended September 30, 2007, including the
average cash collections per month of the Seller (as it relates to the Business) and the Targeted
Subsidiaries for such period.



          (e) Seller has no Knowledge that the agreement set forth on Schedule 5.3(b) will be terminated
after the Closing.



     3.33 Residual Agreements. Schedule 3.33 includes an accurate and complete
list and description of all plans, agreements or other arrangements, and all obligations or amounts
owed thereunder as of the date hereof and as of the Closing Date, pursuant to which any Person
(including employees, consultants, and advisors of Seller or the Seller Subsidiaries) is entitled
to receive a royalty or residual payment in connection with any Seller Contracts with healthcare
providers (such Persons are referred to as “Residual Recipients” and such Seller Contracts are
referred to as “Residual Agreements”). Seller has provided to Buyer a copy of all
Residual Agreements. All such Residual Agreements are obligations of Seller and no
Targeted Subsidiary has any Liability associated therewith. The obligations to pay amounts pursuant
to the Residual Agreements expires upon the termination of the Active Employee by Seller and Buyer
and its Affiliates will have no ongoing obligation to provide payments pursuant to the Residual
Agreements after the Closing.



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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER




     Buyer represents and warrants to Seller as follows:



     4.1 Organization and Good Standing. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with full corporate power
and authority to conduct its business as it is now conducted.



     4.2 Authority; No Conflict.



          (a) This Agreement constitutes the legal, valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms. Upon the execution and delivery by Buyer of the
Assignment and Assumption Agreement, the Escrow Agreement and the Employment Agreements, and each
other agreement to be executed or delivered by Buyer at Closing (collectively, the “Buyer’s Closing
Documents”), each of the Buyer’s Closing Documents will constitute the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its respective terms. Buyer has
the absolute and unrestricted right, power and authority to execute and deliver this Agreement and
the Buyer’s Closing Documents and to perform its obligations under this Agreement and the
Buyer’s Closing Documents, and such action has been duly authorized by all necessary corporate
action.



          (b) Neither the execution and delivery of this Agreement by Buyer nor the consummation or
performance of any of the Contemplated Transactions by Buyer will give any Person the right to
prevent, delay or otherwise interfere with any of the Contemplated Transactions pursuant to:




          (i) any provision of Buyer’s Governing Documents;




          (ii) any resolution adopted by the board of directors or the shareholders of Buyer;




          (iii) any Legal Requirement or Order to which Buyer may be subject; or




          (iv) any Contract to which Buyer is a party or by which Buyer may be
bound.



     Buyer is not and will not be required to obtain any Consent from any Person in connection with
the execution and delivery of this Agreement or the consummation or performance of any of the
Contemplated Transactions.



     4.3 Certain Proceedings. There is no pending Proceeding that has been commenced
against Buyer and that challenges, or may have the effect of preventing, delaying, making illegal
or otherwise interfering with, any of the Contemplated Transactions. To Buyer’s Knowledge, no such
Proceeding has been threatened.



     4.4 Brokers or Finders. Except as set forth in Schedule 4.4, neither Buyer
nor any of its Representatives have incurred any obligation or Liability, contingent or otherwise,
for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with
the Contemplated Transactions.



     4.5 Proxy Statement. The information about Buyer supplied by Buyer for specific
inclusion in the Proxy Statement shall not, at (i) the time the Proxy Statement (or any amendment
thereof or supplement thereto) is first mailed to the shareholders of Seller, (ii) the time of the
Seller Shareholders



48









 







Meeting and (iii) the Effective Time, contain any untrue statement of a material fact or fail to
state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. If, at any time
prior to the Effective Time, any event or circumstance relating to Buyer or any Subsidiary of
Buyer, or their respective officers or directors, that should be set forth in an amendment or a
supplement to the Proxy Statement should be discovered by Buyer, Buyer shall promptly inform Seller
thereof.



     4.6 Financing. Buyer is in receipt of debt financing letters on terms and conditions
satisfactory to it for all of the financing it needs in order to fund the Purchase Price, to
consummate the Contemplated Transactions and to fund the working capital requirements of the Buyer
after the Closing.



ARTICLE V

COVENANTS OF SELLER PRIOR TO CLOSING




     5.1 Access and Investigation. Between the date of this Agreement and the Closing Date,
and upon reasonable advance notice received from Buyer, Seller shall (and Seller shall cause the
Seller Subsidiaries to) (a) afford Buyer and its Representatives and prospective lenders and their
Representatives (collectively, “Buyer Group”) full and free access, during regular business
hours, to Seller or Seller Subsidiaries (as relates to, is used in or is necessary for, the
Business) or the Targeted Subsidiaries, personnel, properties, Contracts, Governmental
Authorizations, books and Records and other documents and data, such rights of access to be
exercised in a manner that does not unreasonably interfere with the operations of Seller; (b)
furnish Buyer Group with copies of all such Contracts, Governmental Authorizations, books and
Records and other existing documents and data as Buyer may reasonably request, each as affects the
Business or the Targeted Subsidiaries; (c) furnish Buyer Group with such additional financial,
operating and other relevant data and information as Buyer may reasonably request, each as affects
the Business or the Targeted Subsidiaries; and (d) otherwise cooperate and assist, to the extent
reasonably requested by Buyer, with Buyer’s investigation of the properties, Assets and financial
condition related to Seller, as affects the Business or the Targeted Subsidiaries, and transition
planning and implementation. In addition, Buyer shall have the right to have the Real Property and
Tangible Personal Property inspected by Buyer Group, at Buyer’s sole cost and expense, for purposes
of determining the physical condition and legal characteristics of the Real Property and Tangible
Personal Property.



     5.2 Operation of the Business of Seller. Between the date of this Agreement and the
Closing, with regard to the Business (directly or indirectly), Seller shall (and Seller shall cause
the Targeted Subsidiaries to):



          (a) conduct the Business, including collections of Accounts Receivable and, payments of all
Accounts Payable and processing of claims, only in the Ordinary Course of Business of the Business;
provided, however, notwithstanding whether such actions are deemed in the Ordinary Course of
Business of the Business, Seller and the Targeted Subsidiaries shall offer no discounts, rebates,
off-sets or other reductions of Accounts Receivable other than the receipt of cash for such
Accounts Receivable; provided, further, that Seller’s practice of netting claims by reducing
amounts owed to or from a leased PPO network that is both a customer and a vendor by having only
the net amount collected or paid to such leased PPO network shall be a permitted practice so long
as it is consistent with past practice and in the Ordinary Course of Business of the Business;



          (b) except as otherwise directed by Buyer in writing, and without making any commitment on
Buyer’s behalf, use its commercially reasonable best effort to preserve intact its current business
organization, keep available the services of its officers, employees and agents and maintain its
relations and good will with suppliers, customers, landlords, creditors, employees, agents and
others



49









 







having business relationships with it relating, directly or indirectly, to the Business or the
Targeted Subsidiaries;



          (c) confer with Buyer prior to implementing operational decisions of a material nature
relating, directly or indirectly, to the Business or the Targeted Subsidiaries;



          (d) otherwise report periodically to Buyer concerning the status of the Business, operations
and finances;



          (e) make no material changes in management personnel of the Business without prior
consultation with Buyer;



          (f) maintain the Assets in a state of repair and condition that complies with Legal
Requirements and is consistent with the requirements and normal conduct of the Business;



          (g) keep in full force and effect, without amendment, all material rights relating to the
Business;



          (h) comply with all Legal Requirements and contractual obligations applicable to the
operations of the Business;



          (i) continue in full force and effect the insurance coverage under the policies set forth in
Schedule 3.21(a) and (b) or substantially equivalent policies;



          (j) except as required to comply with ERISA or to maintain qualification under Section 401(a)
of the Code, not create, amend, modify or terminate any Employee Plan without the express written
consent of Buyer, and except as required under the provisions of any Employee Plan, not make any
contributions to, or with respect to, any Employee Plan without the express written consent of
Buyer, provided that Seller shall contribute that amount of cash to each Employee Plan necessary to
fully fund all of the benefit Liabilities of such Employee Plan on a plan-termination basis as of
the Closing Date;



          (k) cooperate with Buyer and assist Buyer in identifying the Governmental Authorizations
required by Buyer to operate the Business from and after the Closing Date and either transfer
existing Governmental Authorizations of Seller, including those held by the Seller Subsidiaries, to
Buyer, where permissible, or assist Buyer in obtaining new Governmental Authorizations for Buyer;



          (l) upon request from time to time, execute and deliver all documents, make all truthful
oaths, testify in any Proceedings and do all other acts that may be reasonably necessary or
desirable in the opinion of Buyer to consummate the Contemplated Transactions, all without further
consideration;



          (m) maintain all books and Records of Seller relating to the Business in the Ordinary Course
of Business of the Business;



          (n) modify any compensation paid to any of the Seller’s employees without the express written
consent of Buyer, other than annual salary or wage increases which are in the Ordinary Course of
Business of Seller;



          (o) all rights and obligations of ProxyMed Transactions Services, Inc. pursuant to that
certain De-Identified Data Services Agreement with Enclarity, Inc., dated March 30, 2007, as



50









 







amended, shall be deemed an “Excluded Asset” and the liabilities thereunder a “Retained Liability”
pursuant to this Agreement and the Contribution Agreement;



          (p) extend or amend the lease on the offices located at 407 East Main Street, Middleton, New
York (the “New York Lease”) on such terms as shall be satisfactory to the parties hereto;
and



          (q) terminate any Tax sharing agreement between Seller and any of the Targeted Subsidiaries
and any such Tax sharing agreement shall have no further effect for any taxable year (whether the
current year, a future year, or a past year).



     5.3 Negative Covenant. Except as otherwise expressly permitted herein, between the
date of this Agreement and the Closing Date, Seller shall not, without the prior written Consent of
Buyer, (a) take any affirmative action, or fail to take any reasonable action within its control,
as a result of which any of the changes or events listed in Sections 3.15 or 3.19 would be likely
to occur; (b) make, or agree to make, any modification to, or terminate or agree to terminate, any
material Contract or Governmental Authorization, including the agreement attached hereto as
Schedule 5.3(b); (c) allow the levels of raw materials, supplies or other materials
included in the Inventories to vary materially from the levels customarily maintained; or (d) enter
into any compromise or settlement of any litigation, proceeding or governmental investigation
relating to the Assets or the Business.



     5.4 Required Approvals. As promptly as practicable after the date of this Agreement,
Seller shall make all filings required by Legal Requirements to be made by it in order to
consummate the Contemplated Transactions. Seller also shall cooperate with Buyer and its
Representatives with respect to all filings that Buyer elects to make or, pursuant to Legal
Requirements, shall be required to make in connection with the Contemplated Transactions. Seller
also shall cooperate with Buyer and its Representatives in obtaining all Material Consents. Unless
Seller receives a Superior Proposal and pays the CAI Termination Fee, Seller’s Board of Directors
shall recommend that Seller’s shareholders approve the Agreement and the Contemplated Transactions.



     5.5 Notification. Between the date of this Agreement and the Closing, Seller shall promptly
notify Buyer in writing if any of them becomes aware of (a) any fact or condition that causes or
constitutes a Breach of any of Seller’s representations and warranties made as of the date of this
Agreement, or (b) the occurrence after the date of this Agreement of any fact or condition that
would or be reasonably likely to (except as expressly contemplated by this Agreement) cause or
constitute a Breach of any such representation or warranty had that representation or warranty been
made as of the time of the occurrence of, or Seller’s discovery of, such fact or condition. Should
any such fact or condition require any change to any Schedule delivered by Seller hereunder, Seller
shall promptly deliver to Buyer a supplement to such Schedule specifying such change. Such delivery
shall not affect any rights of Buyer under Section 9.2 and Article XI. During the same period,
Seller also shall promptly notify Buyer of the occurrence of any Breach of any covenant of Seller
in this Article V or of the occurrence of any event that may make the satisfaction of the
conditions in Article VII impossible or unlikely.



     5.6 No Solicitation. 



          (a) Effective as of the date of this Agreement and continuing until the date of termination of
this Agreement pursuant to the provisions of Section 9.1, Seller will not, nor will Seller permit
any of its Representatives (including any Representatives of any Seller Subsidiary) to, (directly
or indirectly): (i) solicit, initiate, encourage or take any action intended to encourage the
submission of any Acquisition Proposal, or (ii) participate in any discussions or negotiations
regarding, or furnish to any Person any information with respect to, an Acquisition Proposal;
provided, however, that prior to the



51









 







receipt of Shareholder Approval, nothing contained in this Agreement shall prevent Seller from
furnishing information to, or engaging in negotiations or discussions with, any Person in
connection with an unsolicited bona fide Acquisition Proposal by such Person, if and to the extent
that (1) Seller’s Board of Directors determines in good faith (after consultation with its outside
legal counsel and financial advisors) that such Acquisition Proposal is a Superior Proposal, and
Seller’s Board of Directors determines in good faith (after consultation with its outside legal
counsel), in the exercise of its fiduciary duties, that to do otherwise would be in violation of
its fiduciary duty to the shareholders of Seller, (2) prior to furnishing such information to, or
engaging in negotiations or discussions with, such Person, Seller’s Board of Directors receives
from such Person an executed confidentiality agreement with terms no more favorable to such party
than those applicable to CAI set forth in the Confidentiality and Non-Disclosure Agreement dated
June 27, 2007, to which CAI and Seller are bound, and (3) Seller gives Buyer three (3) Business
Days’ prior written notice of its intention to take such action. Seller shall notify Buyer of any
such inquiry or proposal with respect to an Acquisition Proposal, and provide a copy of any written
information relating to such inquiry or proposal and specify the material terms thereof and the
identity of the party making such proposal, within twenty-four (24) hours of receipt or awareness
of the same by Seller or its Representatives (including Representatives of any Seller Subsidiary).



          (b) Except as set forth in this Section 5.6, Seller’s Board of Directors shall not (i)
withhold, withdraw, amend, change or modify, in each case in a manner adverse to CAI or Buyer, the
approval or recommendation by Seller’s Board of Directors of this Agreement and the Contemplated
Transactions to the shareholders of Seller, (ii) approve or recommend to Seller’s shareholders any
Acquisition Proposal, or (iii) enter into any agreement with respect to any Acquisition Proposal.
Notwithstanding the foregoing, if, prior to the receipt of Shareholder Approval, Seller’s Board of
Directors determines in good faith (after consultation with its outside legal counsel and its
financial advisors), in the exercise of its fiduciary duties, that (x) the Acquisition Proposal
constitutes a Superior Proposal, and (y) to do otherwise would be in violation of its fiduciary
duty to the shareholders of Seller, after giving three (3) Business Days’ prior written notice to
Buyer, which notice will include any written Acquisition Proposals and specify the material terms
thereof and the identity of the party making such proposal, Seller’s Board of Directors may (A)
withhold, withdraw, amend, change or modify its approval or recommendation of this Agreement and
the Contemplated Transactions to the shareholders of Seller or (B) enter into a definitive
agreement with respect to a Superior Proposal, and shall, in the case of (B), terminate this
Agreement in accordance with Section 9.1(k); provided, however, that Seller shall, and shall have
caused its financial and legal advisors to, negotiate in good faith with CAI during such three (3)
Business Days to make such adjustments to the terms and conditions of this Agreement as would
enable Seller to proceed with the transactions contemplated hereby on such adjusted terms. Seller
shall, and shall cause its Representatives (including the Representatives of Seller Subsidiaries)
to, immediately cease and cause to be terminated any discussions or negotiations with any parties
that may be ongoing with respect to any Acquisition Proposal as of the date hereof. Seller agrees
that its obligation to hold a meeting of its shareholders or to otherwise submit this Agreement to
its shareholders for Shareholder Approval shall not be affected by the withholding, withdrawal,
amendment, change or modification of its approval or recommendation in accordance with clause (A)
above.



     (c) Seller will promptly (but in any event not later than 24 hours after receipt thereof by
Seller, any Representative of Seller or any Representative of any Seller Subsidiary) notify CAI in
writing of the existence of any proposal, discussion or negotiation received by Seller or any of
its Representatives (including any Representatives of the Seller Subsidiaries) regarding any
Acquisition Proposal, and Seller will promptly communicate to Seller the identity of the party
making such proposal or engaging in such discussion or negotiation and the material terms of any
proposal, discussion or negotiation that it may receive regarding any Acquisition
Proposal, including providing a copy of any written proposal. Seller will promptly provide to
CAI any information concerning Seller or the Seller Subsidiaries provided to any other Person in
connection with any Acquisition Proposal. Seller will keep



52









 







CAI fully informed on a prompt basis of any discussions or negotiations relating to any Acquisition
Proposal and of any amendments or proposed amendments to any of the material terms of any
Acquisition Proposal.



          (d) Each of Seller, Buyer and CAI acknowledge that this Section 5.6 was a significant
inducement for each party to enter into this Agreement and the absence of such provision would have
resulted in either (i) a material reduction in the Purchase Price to be paid by Buyer pursuant to
this Agreement; (ii) a failure to induce CAI and Buyer to enter into this Agreement; or (iii) a
failure to induce Seller to enter into this Agreement.



     5.7 Commercially Reasonable Best Effort. Seller shall use its commercially reasonable
best effort to (a) cause the conditions in Article VII and Section 8.3 to be satisfied, (b) obtain
the Employment Agreements and (c) obtain the Laurus Consent.



     5.8 Interim Financial Statements. Until the Closing Date, Seller shall deliver to
Buyer within twenty (20) days after the end of each month a balance sheet, statement of operation
and cash flows at and for the Business for such month prepared in a manner and containing
information consistent with Seller’s current practices and certified by Seller’s chief financial
officer in compliance with Section 3.4 as such section relates to interim financial statements.



     5.9 Payment of Liabilities. Prior to Closing, Seller shall pay or otherwise satisfy
its Liabilities and obligations in the Ordinary Course of Business. Buyer and Seller hereby waive
compliance with the bulk-transfer provisions of the Uniform Commercial Code (or any similar law)
(“Bulk Sales Laws”) in connection with the Contemplated Transactions.



     5.10 Proxy Statement; Shareholders Meeting.



          (a) As promptly as practicable after the execution of this Agreement, but in no event more
than ten (10) Business Days after the date of this Agreement, Seller shall prepare and file with
the SEC a proxy statement in accordance with the rules, regulations and requirements of the
Exchange Act (together with any amendments thereof or supplements thereto, the “Proxy Statement”)
in preliminary form (provided that Buyer and its counsel will be given reasonable opportunity to
review and comment on the Proxy Statement and any amendments thereto prior to each filing with the
SEC) relating to the meeting of Seller’s shareholders (the “Seller Shareholders Meeting”)
to be held to consider approval of the Contemplated Transactions. Both Seller and Buyer shall use
its commercially reasonable best effort to respond as promptly as practicable to any comments of
the SEC with respect thereto. Buyer shall furnish all information concerning Buyer as Seller may
reasonably request in connection with such actions and the preparation of the Proxy Statement. As
promptly as practicable after the definitive Proxy Statement has been filed with the SEC, Seller
shall mail the Proxy Statement to its shareholders.



          (b) Subject to Section 5.6, the Proxy Statement shall include a copy of the Fairness Opinion,
the Seller Board Approval and a recommendation of Seller’s Board of Directors that the shareholders
approve the Agreement and the Contemplated Transactions.



          (c) No amendment or supplement to the Proxy Statement will be made by Seller without first
allowing Buyer and its counsel a reasonable period of time to review and comment on such amendment
or supplement. Both Seller and Buyer will advise the other, promptly after it receives notice
thereof, of any request by the SEC for amendment of the Proxy Statement or comments thereon and
responses thereto or requests by the SEC for additional information.



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          (d) The information supplied by Seller for inclusion in the Proxy Statement shall not, at (i)
the time the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to
the shareholders of Seller, (ii) the time of the Seller Shareholders Meeting and (iii) the
Effective Time, contain any untrue statement of a material fact or fail to state any material fact
required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If, at any time prior to the Effective
Time, any event or circumstance relating to Seller or any Subsidiary of Seller, or their respective
officers or directors, that should be set forth in an amendment or a supplement to the Proxy
Statement should be discovered by Seller, Seller shall promptly inform Buyer thereof. All documents
that Seller is responsible for filing with the SEC in connection with the Contemplated Transactions
by this Agreement will comply as to form and substance in all material respects with the applicable
requirements of the Securities Act and the rules and regulations thereunder and the Exchange Act
and the rules and regulations thereunder.



          (e) The information about Buyer supplied by Buyer specifically for inclusion in the Proxy
Statement shall not, at (i) the time the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to the shareholders of Seller, (ii) the time of the Seller Shareholders
Meeting and (iii) the Effective Time, contain any untrue statement of a material fact or fail to
state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. If, at any time
prior to the Effective Time, any event or circumstance relating to Buyer or any Subsidiary of
Buyer, or their respective officers or directors, that should be set forth in an amendment or a
supplement to the Proxy Statement should be discovered by Buyer, Buyer shall promptly inform
Seller.



          (f) Seller shall call and hold the Seller Shareholder Meeting as promptly as practicable and
in accordance with applicable laws for the purpose of voting upon the approval of the transactions
contemplated hereby. Seller shall use its commercially reasonable best efforts to hold the Seller
Shareholders Meeting as soon as practicable after the date on which the Proxy Statement is no
longer subject to comment by the SEC and to obtain Shareholder Approval. Seller shall (i) use its
commercially reasonable best effort to solicit from its shareholders proxies in favor of the
approval of the transactions contemplated hereby and (ii) shall take all other action necessary or
advisable to secure the vote or consent of shareholders required by the Legal Requirements to
obtain such approvals.



          (g) Seller will not take any action or enter into any agreement that will have the affect of
adding additional proposals to be considered at the Seller Shareholders Meeting other than the
consideration and approval of this Agreement and the Contemplated Transactions.



     5.11 Section 338(h)(10) Election.



          (a) With respect to Seller’s sale of the Equity Interests that are not limited liability
company membership units to the Buyer, Seller and the Buyer shall, where permissible, jointly make
timely, effective and irrevocable elections under Section 338(h)(10) of the Code, and, if
permissible, similar elections under any applicable state or local income Tax Laws (the
“Elections”), and file the Elections in accordance with applicable regulations. The Buyer,
Seller, and the Targeted Subsidiaries shall report the transaction consistent with such Elections
and agree not to take any action that could cause such Elections to be invalid, and shall take no
position contrary thereto unless required to do so pursuant to a determination (as defined in
Section 1313(a) of the Code) or any similar state or local Tax provision. Seller will pay any and
all Taxes attributable to the making of the Elections and will indemnify Buyer and the Targeted
Subsidiaries against any adverse consequences or Damages arising out of any failure to pay such
Taxes.



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          (b) The Buyer, Seller and each applicable Targeted Subsidiary shall execute at the Closing any
and all forms necessary to effectuate the Elections (including, without limitation, IRS Form 8023
and any similar forms under applicable state and local income tax laws (the “Section 338 Forms”)).
In the event, however, any Section 338 Forms are not executed at the Closing, the Buyer, Seller and
the Targeted Subsidiaries shall prepare and complete each such Section 338 Form no later than
fifteen (15) days prior to the date such Section 338 Form is required to be filed. The Buyer,
Seller and the Targeted Subsidiaries shall each cause the Section 338 Forms to be duly executed by
an authorized person for the Buyer, Seller and the Targeted Subsidiaries in each case, and shall
duly and timely file the Section 338 Forms in accordance with applicable Tax laws and the terms of
this Agreement.



          (c) The allocation of the aggregate deemed sales price of the assets of the Company resulting
from the elections under Section 338(h)(10) of the Code shall be in the form set forth on Schedule
5.11(c) hereto (as initially completed based on the Closing Date Balance Sheet, and as further
amended from time to time in accordance with the following sentence of this Section 5.11(c), the
“Section 338 Allocation”). Any post-Closing adjustments to the Purchase Price shall be applied to
adjust the allocation to good will set forth in the Section 338 Allocation. In the event the
Section 338 Allocation is audited or disputed by any Governmental Body, the party receiving notice
thereof shall promptly notify the other party hereto. If such an audit or dispute arises in
connection with a Tax claim or in connection with an audit or Proceeding relating to Seller’s Tax
Return, Seller shall, at its own expense, control all Proceedings taken in connection with such
audit or dispute (including selection of counsel and accountants) and, without limiting the
foregoing, may in their sole discretion pursue or forego any and all administrative appeals,
Proceedings, hearings, audits and conferences with any Governmental Body in connection therewith,
subject to the last sentence of this Section 5.11(c). The Buyer shall, at its own expense, control
all other audits or disputes in connection with any Section 338 Allocation (including selection of
counsel and accountants) and, without limiting the foregoing, may in its sole discretion pursue or
forego any and all administrative appeals, Proceedings, hearings, audits and conferences with any
Governmental Body in connection therewith, subject to the last sentence of this Section 5.11(c).
Notwithstanding the foregoing, (i) the party controlling the audit or dispute shall (A) consult
with the other party prior to taking any action in connection with such audit or dispute that could
reasonably be expected to have an adverse effect on such other party and (B) not take any action in
connection with such audit or dispute that would legally bind the other party without the prior
written Consent of such other party and (ii) each of the Buyer and Seller shall (A) be bound by the
final Section 338 Allocation for purposes of determining any Taxes, (B) prepare and file, and cause
its Related Persons to prepare and file, its Tax Returns on a basis consistent with the final
Section 338 Allocation, and (C) take no position, and cause its Related Persons to take no
position, inconsistent with the final Section 338 Allocation on any Tax Return, in any refund
claim, in any audit, dispute or Proceeding before any Governmental Body or otherwise with respect
to such Tax Returns.



     5.12 Assignment and Contribution. Seller shall assume, and shall cause the Targeted
Subsidiaries to assign to Seller, the Excluded Assets and all Retained Liabilities in accordance
with the terms of the Contribution Agreement. Seller shall, and shall cause its Subsidiaries to,
contribute all Assets related to the Business, to the Targeted Subsidiaries in accordance with the
Contribution Agreement. For purposes of this Agreement and the Contribution Agreement,
“Retained Liabilities” shall mean (a) all Liabilities of the Seller and each Seller
Subsidiary other than the Targeted Subsidiaries and (b) all Liabilities of Targeted Subsidiaries
identified on Exhibit 5.12 and all other Liabilities of Targeted Subsidiaries arising from
or relating to periods prior to the Effective Time to the extent such Liabilities of the Targeted
Subsidiaries are not specifically reflected and fully accounted for in the calculation of Final Net
Working Capital.



     5.13 Capitalization Certificate. Within five Business Days prior to Closing, Seller
will deliver to Buyer a certificate (the “Capitalization Certificate”) executed by the
Chief Executive Officer or Chief



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Financial Officer of Seller setting forth, and certifying to the accuracy of, the authorized equity
securities of each Targeted Subsidiary, including the number of each class or series (or other
type) of equity securities authorized and the number outstanding, the name of the owner of such
equity securities prior to the Closing (which shall be either Seller or another Targeted
Subsidiary), the par value of each such share or unit in each class or series.



ARTICLE VI

COVENANTS OF BUYER PRIOR TO CLOSING




     6.1 Required Approvals. As promptly as practicable after the date of this Agreement,
Buyer shall make, or cause to be made, all filings required by Legal Requirements to be made by it
to consummate the Contemplated Transactions. Buyer also shall cooperate, and cause its Related
Persons to cooperate, with Seller (a) with respect to all filings Seller shall be required by Legal
Requirements to make and (b) in obtaining all Consents identified in Schedule 3.2(c);
provided, however, that Buyer shall not be required to dispose of or make any
change to its business, expend any material funds or incur any other burden in order to comply with
this Section 6.1.



     6.2 Commercially Reasonable Best Effort. Buyer shall, and CAI shall cause Buyer to,
use its commercially reasonable best effort to cause the conditions in Article VIII and Section 7.3
(Consents) to be satisfied.



     6.3 Purchase Price Financing. CAI shall use its commercially reasonable efforts to
cause Buyer to obtain financing, on terms set forth in the Merrill Lynch Letter or other terms no
less favorable to CAI or Buyer, in immediately available funds in an amount sufficient to pay the
Purchase Price at the Closing.



ARTICLE VII

CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE




     Buyer’s obligation to purchase the Equity Interests and to take the other actions required to
be taken by Buyer at the Closing is subject to the satisfaction, at or prior to the Closing, of
each of the following conditions (any of which may be waived by Buyer, in whole or in part):



     7.1 Accuracy of Representations. All of Seller’s representations and warranties in
this Agreement (considered collectively), and each of such representations and warranties
(considered individually), shall have been accurate in all material respects as of the date of this
Agreement, and shall be accurate in all material respects as of the time of the Closing as if then
made, without giving effect to any supplement to any Schedule delivered by Seller hereunder. For
purposes of determining the accuracy of such representations and warranties under this Section 7.1,
all Material Adverse Change qualifications and other qualifications based on the word “material” or
similar phrases contained in such representations and warranties shall be disregarded.



     7.2 Seller’s Performance. All of the covenants and obligations that Seller is
required to perform or to comply with pursuant to this Agreement at or prior to the Closing
(considered collectively), and each of these covenants and obligations (considered individually),
shall have been duly performed and complied with in all material respects.



     7.3 Consents. Each of the Consents identified in Schedule 3.2(c) (the
“Material Consents”) shall have been obtained and shall be in full force and effect.



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     7.4 Additional Documents. Seller shall have caused the documents and instruments
required by Section 2.4(a) and the following documents to be delivered (or tendered subject only to
Closing) to Buyer:



          (a) The certificate of incorporation, articles of incorporation, certificate of organization,
articles of organization, or other formation documents, and all amendments thereto of Seller and
each Targeted Subsidiary, duly certified as of a recent date by the Secretary of State of the
jurisdiction of entity’s incorporation;



          (b) If requested by Buyer, any Consents or other instruments that may be required to permit
Buyer’s qualification in each jurisdiction in which Seller is licensed or qualified to do business
as a foreign corporation under the name of each Targeted Subsidiary or any current or previously
used “doing business as” used in the Business, or any derivative thereof, other than “Medavant
Healthcare Solutions” and other names or “doing business as” that are not used in, or have not been
used in, the Business;



          (c) Releases of all Encumbrances on the Assets, other than Permitted Encumbrances, including
releases of each mortgage of record and reconveyances of each deed of trust with respect to each
parcel of real property included in the Assets;



          (d) Certificates dated as of a date not earlier than the fifth Business Day prior to the
Closing as to the good standing of each Targeted Subsidiary and Seller and payment of all
applicable state and local Taxes by each Targeted Subsidiary and Seller, executed by the
appropriate officials of the applicable state of incorporation, organization or formation and each
jurisdiction in which each Targeted Subsidiary or Seller is licensed or qualified to do business as
a foreign corporation as specified in Schedule 3.1(a);



          (e) Such other documents as Buyer may reasonably request for the purpose of:




          (i) evidencing the accuracy of any of Seller’s representations and warranties;




          (ii) evidencing the performance by Seller of, or the compliance by Seller with, any
covenant or obligation required to be performed or complied with by Seller;




          (iii) evidencing the satisfaction of any condition referred to in this Article VII;




          (iv) otherwise facilitating the consummation or performance of any of the Contemplated
Transactions; and



          (f) The Laurus Consent shall be in full force and effect and the balance of the
Purchase Price payable at Closing, after payment of all payments set forth in Section
2.4(b)(i), other than payments to Laurus Master Fund, Ltd. and Seller, shall be sufficient
to pay to Laurus Master Fund, Ltd. the full amount required by Section 2.4(b)(i)(L).



     7.5 No Proceedings; No Injunctions. Since the date of this Agreement, there shall not
(i) have been commenced or threatened against Buyer, or against any Related Person of Buyer, any
Proceeding (a) involving any challenge to, or seeking Damages or other relief in connection with,
any of the Contemplated Transactions, or (b) that may have the effect of preventing, delaying,
making illegal, imposing limitations or conditions on or otherwise interfering with any of the
Contemplated Transactions,



57









 







or (ii) be in effect any Legal Requirement or any injunction or other Order that (a) prohibits the
consummation of the Contemplated Transactions and (b) has been adopted or issued, or has otherwise
become effective, since the date of this Agreement.



     7.6 No Conflict. Neither the consummation nor the performance of any of the
Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time),
contravene or conflict with or result in a violation of or cause Buyer or any Related Person of
Buyer to suffer any adverse consequence under (a) any applicable Legal Requirement or Order or (b)
any Legal Requirement or Order that has been published, introduced or otherwise proposed by or
before any Governmental Body, excluding Bulk Sales Laws.



     7.7 Governmental Authorizations. Buyer shall have received such Governmental
Authorizations, if any, as are necessary or desirable to allow Buyer to operate the Assets from and
after the Closing.



     7.8
Employees.



          All Active Employees shall be available for hiring by Buyer, in its sole discretion, effective
on and as of the Closing Date.



     7.9 Ancillary Agreements. The relevant Persons shall have entered into ancillary
agreements necessary to effect the Contemplated Transactions in form and substance reasonably
satisfactory to the parties hereto.



     7.10 Financing.  CAI shall have obtained financing in immediately available funds in
an amount sufficient to pay the Purchase Price at the Closing, on terms no less favorable to CAI or
Buyer as set forth in the Merrill Lynch Letter.



ARTICLE VIII

CONDITIONS PRECEDENT TO SELLER’S OBLIGATION TO CLOSE




     Seller’s obligation to sell the Equity Interests and to take the other actions required to be
taken by Seller at the Closing is subject to the satisfaction, at or prior to the Closing, of each
of the following conditions (any of which may be waived by Seller in whole or in part):



     8.1 Accuracy of Representations. All of Buyer’s representations and warranties in
this Agreement (considered collectively), and each of such representations and warranties
(considered individually), shall have been accurate in all material respects as of the date of this
Agreement and shall be accurate in all material respects as of the time of the Closing as if then
made.



     8.2 Buyer’s Performance. All of the covenants and obligations that Buyer is required
to perform or to comply with pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered individually), shall have
been performed and complied with in all material respects.



     8.3 Consents. Each of the Consents identified in Schedule 8.3 shall have been obtained
and shall be in full force and effect.



     8.4 Additional Documents. Buyer shall have caused the documents and instruments
required by Section 2.4(b) and the following documents to be delivered (or tendered subject only to
Closing) to Seller:



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          (a) such documents as Seller may reasonably request for the purpose of:




          (i) evidencing the accuracy of any representation or warranty of Buyer,




          (ii) evidencing the performance by Buyer of, or the compliance by Buyer with, any
covenant or obligation required to be performed or complied with by Buyer, or




          (iii) evidencing the satisfaction of any condition referred to in this Article VIII.



     8.5 No Injunctions. There shall not be in effect any Legal Requirement or any
injunction or other Order that (a) prohibits the consummation of the Contemplated Transactions and
(b) has been adopted or issued, or has otherwise become effective, since the date of this
Agreement.



     8.6 Shareholder Approval. The shareholders of Seller shall have approved the
consummation of the Contemplated Transactions and this agreement by the requisite vote set forth in
Seller’s articles of incorporation and in accordance with Florida law (the “Shareholder
Approval”).



ARTICLE IX

TERMINATION




     9.1 Termination Events. By notice given prior to or at the Closing, subject to Section
9.2 (Effect of Termination), this Agreement may be terminated as follows:



          (a) by Buyer, if a material Breach of any provision of this Agreement has been committed by
Seller and such Breach has not been waived by Buyer;



          (b) by Seller, if a material Breach of any provision of this Agreement has been committed by
Buyer and such Breach has not been waived by Seller;



          (c) by Buyer, if any condition in Article VII has not been satisfied as of the date specified
for Closing in the first sentence of Section 2.3 or if satisfaction of such a condition by such
date is or becomes impossible (other than through the failure of Buyer to comply with its
obligations under this Agreement), and Buyer has not waived such condition on or before such date;



          (d) by Seller, if any condition in Article VIII has not been satisfied as of the date
specified for Closing in the first sentence of Section 2.3 or if satisfaction of such a condition
by such date is or becomes impossible (other than through the failure of Seller to comply with its
obligations under this Agreement), and Seller has not waived such condition on or before such date;



          (e) by mutual consent of Buyer and Seller;



          (f) by Buyer, if the Closing has not occurred on or before April 15, 2008, or such later date
as the parties may agree upon, unless the Buyer is in material Breach of this Agreement;



          (g) by Seller, if the Closing has not occurred on or before April 15, 2008, or such later date
as the parties may agree upon, unless the Seller is in material Breach of this Agreement; or



          (h) by Buyer, if a Material Adverse Change shall have occurred.



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          (i) by Buyer, if the Shareholder Approval shall not have been obtained by Seller (for any
reason) on or before the earlier of (A) the date of the Seller Shareholders Meeting (or any
adjournment or postponement thereof) or (B) March 31, 2008;



          (j) by Buyer if (i) Seller’s Board of Directors shall have withheld, withdrawn, amended,
changed or modified, in a manner adverse to CAI or Buyer, its approval or recommendation of this
Agreement or the Contemplated Transactions, (ii) Seller’s Board of Directors shall have recommended
or approved any Acquisition Proposal or (iii) Seller or any Seller Subsidiary shall have entered
into a letter of intent, indication of interest or definitive agreement with respect to a
Acquisition Proposal, including a Superior Proposal;



          (k) by Seller in order to enter into a definitive agreement with respect to a Superior
Proposal, if, prior to the receipt of Shareholder Approval, Seller’s Board of Directors determines
in good faith (after consultation with its outside legal counsel), in the exercise of its fiduciary
duties, that failure to terminate this Agreement in order to enter into the definitive agreement
with respect to the Superior Proposal is in violation of its fiduciary duty to the shareholders of
Seller, upon three (3) Business Days’ prior written notice to CAI; provided, that prior to any such
termination, Seller shall have paid the CAI Termination Fee payable to CAI pursuant to Section
12.1(b); provided, further, that Seller shall have complied with the provisions of Section 5.6,
including causing its financial and legal advisors to negotiate in good faith with CAI during such
three (3) Business Days to make such adjustments to the terms and conditions of this Agreement as
would enable Seller to proceed with the transactions contemplated hereby on such adjusted terms;



          (l) by Buyer if neither CAI nor Buyer is able to obtain financing, on the terms set forth in
the commitment letter dated November 8, 2007 from Merrill Lynch Capital, a division of Merrill
Lynch Business Services, Inc., to the Company attached as Exhibit 9.1(l) hereto (the
“Merrill Lynch Letter”) or other terms no less favorable to CAI or Buyer, in immediately
available funds in an amount sufficient to pay the Purchase Price at the Closing; provided, that
prior to any such termination, CAI shall have paid the Seller Termination Fee, if any, payable to
Seller pursuant to Section 12.1(b);



          (m) by Buyer, if (i) Buyer reasonably determines that the condition set forth in Section
7.4(f) cannot reasonably be expected to be satisfied by April 15, 2008, (ii) provides notice of
such determination to Seller and Laurus Master Fund, Ltd. and (iii) Laurus Master Fund, Ltd. does
not agree to amend the Laurus Consent to satisfy such condition within the earlier of ten days
after such notice is sent or April 15, 2008; and



          (n) by Buyer if the Laurus Consent is not executed by and Laurus Master Fund, Ltd. and Seller,
and delivered to Buyer and CAI, prior to January 15, 2008.



     9.2 Effect of Termination. Each party’s right of termination under Section 9.1 is in
addition to any other rights it may have under this Agreement or otherwise, and the exercise of
such right of termination will not be an election of remedies. If this Agreement is terminated
pursuant to Section 9.1, all obligations of the parties under this Agreement will terminate, except
that the obligations of the parties in this Section 9.2 and Article XII will survive;
provided, however, that, if this Agreement is terminated because of a Breach of
this Agreement by the nonterminating party or because one or more of the conditions to the
terminating party’s obligations under this Agreement is not satisfied as a result of the party’s
failure to comply with its obligations under this Agreement, the terminating party’s right to
pursue all legal remedies will survive such termination unimpaired.




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ARTICLE X

ADDITIONAL COVENANTS




     10.1 Employees and Employee Benefits. (a) Information on Active Employees. For the
purpose of this Agreement, the term “Active Employees” shall mean all employees employed on
the Closing Date by Seller or any Seller Subsidiary who provides services for the Business, all of
which employees are listed on Schedule 10.1(a);



          (b) Employment of Active Employees by Buyer.





               (i) Buyer is not obligated to hire any Active Employee but, on or prior to the
Closing, may interview all Active Employees and may offer employment to any or all Active
Employees, to be effective as of the later of the (i) Closing Date or (ii) December 31,
2007 (the “Employee Termination Date”. Prior to the Closing, Buyer will provide
Seller with a list of Active Employees to whom Buyer has made an offer of employment that
has been accepted to be effective on the day following the Employee Termination Date (the
“Hired Active Employees”). Subject to Legal Requirements, Buyer will have
reasonable access to the Facilities and personnel Records (including performance
appraisals, disciplinary actions and grievances) of Seller for the purpose of preparing for
and conducting employment interviews with all Active Employees and will conduct the
interviews as expeditiously as possible prior to the Closing Date. Effective as of the
later of (i) the Closing Date and (ii) December 31, 2007, the Hired Active Employees shall
resign from their employment with Seller or Seller will terminate the employment of the
Hired Active Employees who have not resigned as of the Employee Termination Date. If the
Closing Date is prior to December 31, 2007, the Hired Active Employees will provide
services to CAI, Buyer or the Targeted Subsidiaries pursuant to the Employee Leasing
Agreement.




               (ii) Neither Seller nor its Related Persons shall solicit the continued employment of
any Active Employee or the employment of any Hired Active Employee after the Closing.




               (iii) It is understood and agreed that (A) Buyer’s expressed intention to extend
offers of employment as set forth in this section shall not constitute any commitment,
Contract or understanding (expressed or implied) of any obligation on the part of Buyer to
a post-Closing employment relationship of any fixed term or duration or upon any terms or
conditions other than those that Buyer may establish pursuant to individual offers of
employment, and (B) employment offered by Buyer is “at will” and may be terminated by Buyer
or by an employee at any time for any reason (subject to any written commitments to the
contrary made by Buyer or an employee and Legal Requirements). Nothing in this Agreement
shall be deemed to prevent or restrict in any way the right of Buyer to terminate,
reassign, promote or demote any of the Hired Active Employees after the Closing or to
change adversely or favorably the title, powers, duties, responsibilities, functions,
locations, salaries, other compensation or terms or conditions of employment of such
employees after the Closing.



          (c) Salaries and Benefits.





               (i) Seller shall be responsible for and will pay: (A) the payment of all wages and
other remuneration due to Active Employees, including Hired Active Employees, with respect
to their services as employees of Seller, including bonus payments and all vacation pay
earned prior to the Closing Date; (B) the payment of any
termination or severance payments and the provision of health pan continuation
coverage in accordance with the requirements of



61









 






COBRA and Sections 601 through 608 of ERISA; and (C) any and all payments to employees
required under the WARN Act.




               (ii) Seller shall be liable for any claims made or incurred by Active Employees,
including Hired Active Employees, and their beneficiaries at any time either before or
after the Closing Date under the Employee Plans. For purposes of the immediately preceding
sentence, a charge will be deemed incurred, in the case of hospital, medical or dental
benefits, when the services that are the subject of the charge are performed and, in the
case of other benefits (such as disability or life insurance), when an event has occurred
or when a condition has been diagnosed that entitles the employee to the benefit.



          (d) Seller’s Retirement and Savings Plans.





               (i) All Hired Active Employees shall become fully vested in their accrued benefits
under Seller’s retirement plans as of the Closing Date, and Seller will so amend such plans
if necessary to achieve this result. Seller shall take any actions necessary and
appropriate to terminate immediately prior to the Closing Date the participation of any of
the Targeted Subsidiaries in any Employee Plan, if any such Targeted Subsidiary was a
participating sponsor of any such Employee Plan.



          (f) Collective Bargaining Matters. Buyer is not obligated to assume any collective
bargaining agreements under this Agreement. Seller shall be solely liable for any severance payment
required to be made to its employees due to the Contemplated Transactions. Any bargaining
obligations of Buyer with any union with respect to bargaining unit employees subsequent to the
Closing, whether such obligations arise before or after the Closing, shall be the sole
responsibility of Buyer.




          (g) General Employee Provisions.





               (i) Seller and Buyer shall give any notices required by Legal Requirements and take
whatever other actions with respect to the plans, programs and policies described in this
Section 10.1 as may be necessary to carry out the arrangements described in this Section
10.1.




               (ii) Buyer shall not adopt, assume or otherwise become responsible for, or have any
responsibility, Liability or obligation, whether primarily or as a successor employer, and
whether to Active Employees, employees or former employees of the Seller or any ERISA
Affiliate of Seller, their beneficiaries, any Governmental Body, or to any other Person,
with respect to any of the Employee Plans (including the establishment, operation or
termination thereof and the notification and provision of COBRA coverage extension). The
preceding sentence applies to any Liability with respect to such Employee Plans, regardless
of when (before or after the Closing) or how such Liability may arise.




               (iii) Buyer shall not have any responsibility, liability or obligation, whether
primarily or as a successor employer, with respect to any Seller Employment Liabilities.
For purposes of the preceding sentence, the term “Seller Employment
Liabilities” shall mean any claims, liabilities, costs, taxes, expenses or
compensation which exist, which arise by reason of, or which are in any way connected with
or based on (1) any person’s employment relationship with Seller and/or the termination of
such relationship, (2) any fair employment practices act of any Governmental Body and/or
any law, ordinance or regulation promulgated by any such Governmental Body as applied to
employees of Seller in connection with their employment or other relationship with Seller,
(3) interference with and/or breach of contract with employees of Seller in connection with
their employment or other relationship with Seller, (4) retaliatory or



62









 







wrongful discharge of any employee of Seller in connection with their employment or other
relationship with Seller, (5) intentional or negligent infliction of emotional distress or
mental anguish upon employees of Seller in connection with their employment or other
relationship with Seller, (6) outrageous conduct with respect to employees of Seller in
connection with their employment or other relationship with Seller, (7) interference with
business relationships, contractual relationships or employment relationships involving
employees of Seller in connection with their employment or other relationships with Seller
and any third party, (8) breach of duty, fraud, fraudulent inducement to contract, breach
of right of privacy, libel, slander, or tortuous conduct of any kind with respect to
employees of Seller in connection with their employment or other relationship with Seller,
(9) violations of Title VII of the Civil Rights Act of 1964 and/or the Civil Rights Act of
1991 and/or 42 U.S.C. §1981 with respect to employees of Seller in connection with their
employment or other relationship with Seller, (10) violations of Age Discrimination in
Employment Act of 1967, the Age Discrimination Claims Assistance Act of 1988 and/or the
Older Workers’ Benefit Protection Act with respect to employees of Seller in connection
with their employment or other relationship with Seller, (11) violations of the handicap or
disability discrimination laws or acts of any Governmental Body, including, but not limited
to, the Rehabilitation Act of 1973 and the Americans with Disabilities Act with respect to
employees of Seller in connection with their employment or other relationship with Seller,
(12) discriminatory or wrongful acts against employees of Seller in connection with their
employment or other relationship with Seller, (13) violations of ERISA or the Family and
Medical Leave Act or the Fair Labor Standards Act with respect to employees of Seller in
connection with their employment or other relationship with Seller, (14) violations of the
workers’ compensation laws of any Governmental Body by Seller or with respect to employees
of Seller in connection with their employment or other relationship with Seller, (15)
violations of any other law or regulations of any Governmental Body with respect to
employees of Seller in connection with their employment or other relationship with Seller,
(16) incorrect classification by Seller of individuals as either employees or independent
contractors, or (17) a contractor’s service relationship with Seller and/or the termination
of such relationship.



     10.2 Payment of All Taxes Resulting from Sale of Assets by Seller. Seller shall pay
in a timely manner all Taxes (including any applicable withholding Taxes) resulting from or payable
in connection with the Contemplated Transactions and all Elections regardless of the Person on whom
such Taxes are imposed by Legal Requirements.



     10.3 Network Affiliate Audit. For a period of one (1) year from the Closing Date,
Seller shall, and shall cause (at Seller’s expense) its officers, directors, employees,
consultants, contractors, advisors and other Representatives that have Knowledge of the Affiliate
Network, as reasonably requested by Buyer, to assist Buyer in any periodic audits of the Affiliate
Network.



     10.4 Restrictions on Seller Dissolution and Distributions. Without limiting any
applicable Legal Requirements, Seller shall not dissolve or liquidate until the release of all of
the Escrow Fund.



     10.5 Removing Excluded Assets. On or before the Closing Date, Seller shall remove all
Excluded Assets from all Facilities and other Real Property to be occupied by Buyer. Such removal
shall be done in such manner as to avoid any damage to the Facilities and other properties to be
occupied by Buyer and any disruption of the business operations to be conducted by Buyer after the
Closing. Any damage to the Assets or to the Facilities resulting from such removal shall be paid by
Seller at the Closing. Should Seller fail to remove the Excluded Assets as required by this
Section, Buyer shall have the right, but not the obligation, (a) to remove the Excluded Assets at
Seller’s sole cost and expense, (b) to store the Excluded Assets and to charge Seller all storage
costs associated therewith, (c) to treat the Excluded Assets as unclaimed and to proceed to dispose
of the same under the laws governing unclaimed



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property, or (d) to exercise any other right or remedy conferred by this Agreement or otherwise
available at law or in equity. Seller shall promptly reimburse Buyer for all costs and expenses
incurred by Buyer in connection with any Excluded Assets not removed by Seller on or before the
Closing Date.



     10.6 Tax Returns. Seller shall prepare or cause to be prepared and file or cause to
be filed all Tax Returns of the Targeted Subsidiaries that are due on or before the Closing Date,
and Seller shall pay all Taxes due with respect to such periods, including any Taxes attributable
to the Elections as provided in Section 5.12. For all taxable periods ending on or before the
Closing Date, Seller shall cause the Targeted Subsidiaries to join in Seller’s timely filed
consolidated federal income Tax Return and Seller’s timely filed unitary or combined state income
Tax Returns, as applicable, or, in jurisdictions requiring separate reporting from Seller, to file
separate Returns with respect to the Targeted Subsidiaries provided that Seller shall reimburse
Buyer for any and all expenses incurred in connection with Tax Returns and shall indemnify and hold
harmless Buyer and each Targeted Subsidiaries for any Taxes due thereunder. Seller shall include
the income of the Seller Subsidiaries on Seller’s consolidated federal income Tax Returns and
applicable state or local income Tax Returns for all periods through the Closing Date and shall pay
all federal, state and local income Taxes attributable to such income, including any Taxes
attributable to the Elections as provided in Section 5.11. Notwithstanding the foregoing, Buyer
agrees not to, and agrees to cause the Targeted Subsidiaries not to, (a) take any actions on or as
of the Closing Date with respect to the Targeted Subsidiaries which are not in the Ordinary Course
of Business of the Targeted Subsidiaries, or (b) make any Tax elections (except as described in
this Agreement) which are effective on or before the Closing Date.



          (a) Buyer shall prepare or cause to be prepared and file or cause to be filed all Tax Returns
of the Targeted Subsidiaries that are due after the Closing Date (other than Tax Returns described
in Section 10.2(a), above), and Buyer shall cause the Targeted Subsidiaries to pay all Taxes with
respect to such periods provided, however, that Seller shall pay any Taxes attributable to the
Elections as provided in Section 5.11. Buyer shall permit Seller to have a reasonably appropriate
period of time prior to filing in order to review and comment on each Tax Return of a Targeted
Subsidiary for Tax periods which begin before the Closing Date and end after the Closing Date
(“Straddle Tax Returns”). Any portion of any Tax that must be paid in connection with the
filing of a Straddle Tax Return, to the extent attributable to any period or portion of a period
ending on or before the Closing Date, including any Taxes attributable to the Elections as provided
in Section 5.11, shall be referred to herein as “Pre-Closing Taxes.” Where the Pre-Closing Taxes
involve a period which begins before and ends after the Closing Date, such
Pre-Closing Taxes shall be calculated as though the taxable year of the Company terminated as
of the close of business on the Closing Date; provided, however, that in the case of a Tax
not based on income, receipts, proceeds, profits or similar items, Pre-Closing Taxes shall be equal
to the amount of Tax for the taxable period multiplied by a fraction, the numerator of which shall
be the number of days from the beginning of the taxable period through the Closing Date and the
denominator of which shall be the number of days in the taxable period (provided, however, that the
term “Pre-Closing Taxes” shall not include any increase in such Taxes that is caused by the
transactions described in this Agreement). All Straddle Tax Returns shall be prepared, and all
determinations necessary to give effect to the foregoing allocations shall be made, in a manner
consistent with prior practice of the relevant Targeted Subsidiary. Seller shall be responsible for
the amount of any Pre-Closing Taxes due with any Straddle Tax Returns including any Taxes
attributable to the Elections as provided in Section 5.11.




          (b) After the Closing Date, neither Seller, Buyer nor any of the Targeted Subsidiaries shall
amend, modify or otherwise change any Tax Returns of the Targeted Subsidiaries filed prior to the
Closing Date without the prior written consent of the other Party, which consent will not be
unreasonably withheld.




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          (c) All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees
(including any penalties and interest) incurred in connection with this Agreement shall be paid by
Seller when due, and Seller shall, at its own expense, file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use, stamp, registration and
other Taxes and fees; and if required by applicable law, Buyer shall, and shall cause the Targeted
Subsidiaries to, join in the execution of any such Tax Returns and other documents, provided that
such Tax Returns or other documents, as applicable, are satisfactory to Buyer.




          (d) Buyer shall promptly notify Seller in writing upon receipt by Buyer or any affiliate of
Buyer (including the Targeted Subsidiaries) of notice of any pending or threatened federal, state,
local or foreign income or franchise Tax audits or assessments that may affect the Tax Liabilities
of the Targeted Subsidiaries and for which Seller could be liable under this Agreement.




          (e) Any refunds or credits of federal, state, local or foreign income and franchise Taxes
(including any interest thereon) received by or credited to the Targeted Subsidiaries with respect
to or attributable to periods ending on or prior to the Closing Date or to such portions of
Straddle Periods ending at the close of business on the Closing Date (collectively, “Seller’s
Refunds”), shall be for the benefit of Seller, and Buyer shall cause the Targeted Subsidiaries
to pay over to Seller any Seller’s Refunds promptly upon receipt thereof. In addition, if the
Pre-Closing Taxes with respect to a Straddle Period of the Targeted Subsidiaries are less than the
payments previously made by or credited to the Targeted Subsidiaries with respect to such Straddle
Period, Buyer shall cause the Targeted Subsidiaries to pay to Seller the excess of such previous
payments over such Pre-Closing Taxes promptly upon the Targeted Subsidiaries receiving the benefit
of such excess payments through a reduction in any Tax payment that otherwise would be required to
be made by the Targeted Subsidiaries after the Closing.




          (f) After the Closing Date, Buyer and Seller shall make available to the other, as reasonably
requested, and to any taxing authority (which such authority is legally permitted to receive
pursuant to its subpoena power or its equivalent) all information, records or documents relating to
Tax Liabilities of the Targeted Subsidiaries for all periods prior to or including the Closing Date
and shall preserve all such information, records and documents until the expiration of any
applicable statute of limitations for assessment or refund of Taxes or extensions thereof.




     10.7 Assistance in Proceedings. Seller will cooperate with Buyer and its counsel in
the contest or defense of, and make available its personnel and provide any testimony and access to
its books and Records in connection with, any Proceeding involving or relating to (a) any
Contemplated Transaction or (b) any action, activity, circumstance, condition, conduct, event,
fact, failure to act, incident, occurrence, plan, practice, situation, status or transaction on or
before the Closing Date involving Seller or the Business.



     10.8 Noncompetition, Nonsolicitation and Nondisparagement.



          (a) Noncompetition. For a period of three (3) years after the Closing Date, Seller and
each Seller Subsidiary (other than the Targeted Subsidiaries) shall not, anywhere in the United
States, directly or indirectly invest in, own, manage, operate, finance, control, advise, render
services to or guarantee the obligations of any Person engaged in or planning to become engaged in
the business of cost containment, including repricing of medical claims among healthcare providers
and insurance and other payors (“Competing Business”); provided, however, that
Seller may purchase or otherwise acquire up to (but not more than) five percent (5%) of any class
of the securities of any Person (but may not otherwise participate in the activities of such
Person) if such securities are listed on any national or regional securities exchange or have been
registered under Section 12(g) of the Exchange Act.




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          (b) Nonsolicitation. For a period of three (3) years after the Closing Date, Seller
and each Seller Subsidiary (other than the Targeted Subsidiaries) shall not, directly or
indirectly:





               (i) solicit the business of any Person who is a customer of Buyer related to the
Business;




               (ii) cause, induce or attempt to cause or induce any customer, supplier, licensee,
licensor, franchisee, employee, consultant or other business relation of Buyer to cease
doing business with Buyer, to deal with any competitor of Buyer or in any way interfere
with its relationship with Buyer;




               (iii) cause, induce or attempt to cause or induce any customer, supplier, licensee,
licensor, franchisee, employee, consultant or other business relation of Seller on the
Closing Date or within the year preceding the Closing Date to cease doing business with
Buyer, to deal with any competitor of Buyer or in any way interfere with its relationship
with Buyer; or




               (iv) hire, retain or attempt to hire or retain any employee or independent contractor
of Buyer or in any way interfere with the relationship between Buyer and any of its
employees or independent contractors.



     Without limitation of the foregoing, the parties acknowledge and agree that each Associate
Confidentially, Non-Solicitation and Invention Agreement with each employee who is, or should be,
listed on Schedule 3.23(a) on the date of this Agreement are part of the Assets and Buyer
shall have all rights thereunder. Further, at the request of CAI or Buyer, Seller will use its
commercially reasonable best efforts to enforce any such agreements.



          (c) Nondisparagement. After the Closing Date, no party will disparage another party
hereto or any of the shareholders, directors, officers, employees or agents of a party hereto.




          (d) Modification of Covenant. If a final judgment of a court or tribunal of competent
jurisdiction determines that any term or provision contained in Section 10.8(a) through (c) is
invalid or unenforceable, then the parties agree that the court or tribunal will have the power to
reduce the scope, duration or geographic area of the term or provision, to delete specific words or
phrases or to replace any invalid or unenforceable term or provision with a term or provision that
is valid and enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision. This Section 10.8 will be enforceable as so modified after the
expiration of the time within which the judgment may be appealed. This Section 10.8 is reasonable
and necessary to protect and preserve Buyer’s legitimate business interests and the value of the
Assets and to prevent any unfair advantage conferred on Seller.




     10.9 Customer and Other Business Relationships. After the Closing, Seller will
cooperate with Buyer in its efforts to continue and maintain for the benefit of Buyer those
business relationships of Seller existing prior to the Closing and relating to the business to be
operated by Buyer after the Closing, including relationships with lessors, employees, regulatory
authorities, licensors, customers, suppliers and others, and Seller will satisfy the Retained
Liabilities in a manner that is not detrimental to any of such relationships. Seller will refer to
Buyer all inquiries relating to such business. Neither Seller nor any of its officers, employees,
agents or shareholders shall take any action that would tend to diminish the value of the Assets
after the Closing or that would interfere with the business of Buyer to be engaged in after the
Closing, including disparaging the name or business of Buyer.



     10.10 Retention of and Access to Records. After the Closing Date, Buyer and Seller
each shall retain for a period consistent with Buyer’s record-retention policies and practices all
Records relating to



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the Business. Buyer also shall provide Seller and its Representatives reasonable access thereto,
during normal business hours and on at least three (3) days prior written notice, to enable them to
prepare financial statements or Tax returns or deal with Tax audits. After the Closing Date, Seller
shall provide Buyer and its Representatives reasonable access to Records that are Excluded Assets
or otherwise affect the Business, during normal business hours and on at least three (3) days prior
written notice, for any reasonable business purpose specified by Buyer in such notice and shall
assist Buyer in transferring such Records as directed by Buyer.



     10.11 Further Assurances. Subject to the proviso in Section 6.1 (Required Approvals),
the parties shall cooperate reasonably with each other and with their respective Representatives in
connection with any steps required to be taken as part of their respective obligations under this
Agreement, and shall (a) furnish upon request to each other such further information, (b) execute
and deliver to each other such other documents, and (c) do such other acts and things, all as the
other party may reasonably request for the purpose of carrying out the intent of this Agreement and
the Contemplated Transactions.



ARTICLE XI

INDEMNIFICATION




     11.1 Survival. All representations, warranties, covenants and obligations in this
Agreement, the Schedules, any supplements to any Schedule, the certificates, agreements and other
documents delivered pursuant to Section 2.4 and any other certificate or document delivered
pursuant to this Agreement shall survive the Closing and the consummation of the Contemplated
Transactions, subject to Sections 11.4 and 11.5. The right to indemnification, reimbursement or
other remedy based upon such representations, warranties, covenants and obligations shall not be
affected by any investigation (including any environmental investigation or assessment)
conducted with respect to, or any Knowledge acquired (or capable of being acquired) at any time,
whether before or after the execution and delivery of this Agreement or the Closing Date, with
respect to the accuracy or inaccuracy of or compliance with any such representation, warranty,
covenant or obligation. The waiver of any condition based upon the accuracy of any representation
or warranty, or on the performance of or compliance with any covenant or obligation, will not
affect the right to indemnification, reimbursement or other remedy based upon such representations,
warranties, covenants and obligations.



     11.2 Indemnification and Reimbursement by Seller. Seller will indemnify and hold
harmless Buyer, and its Representatives, shareholders, subsidiaries and Related Persons
(collectively, the “Buyer Indemnified Persons”), and will reimburse the Buyer Indemnified Persons
for any loss, liability, claim, damage, expense (including, without limitation, interest,
penalties, costs of investigation and defense and reasonable attorneys’ fees and expenses) or
diminution of value, whether or not involving a Third-Party Claim (collectively, “Damages”),
arising from or in connection with:



          (a) any Breach of any representation or warranty made by Seller in (i) this Agreement (without
giving effect to any supplement to any Schedule delivered by Seller), (ii) any Schedule delivered
by Seller, (iii) any supplement to the Schedules delivered by Seller, (iv) the certificates,
agreements and other documents delivered pursuant to Section 2.4 (for this purpose, each such
certificate, agreement or other document will be deemed to have stated that Seller’s
representations and warranties in this Agreement fulfill the requirements of Section 7.1 as of the
Closing Date as if made on the Closing Date without giving effect to any supplement to the
Schedules delivered by Seller, unless the certificate expressly states that the matters disclosed
in a supplement have caused a condition specified in Section 7.1 not to be satisfied), (v) any
transfer instrument or (vi) any other certificate, document, writing or instrument delivered by
Seller pursuant to this Agreement; provided, however, that to the extent there is a breach of
Section 3.11 due to a failure to collect Accounts Receivable, the Buyer Indemnified Persons shall
be deemed not to have suffered Damages to the extent





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that such uncollected Accounts Receivable were omitted from accounts receivable for purposes of the
calculation of the definitive Final Net Working Capital pursuant to Section 2.6, it being the
intent of the parties that Buyer not be compensated twice for such uncollected Accounts Receivable;




          (b) any Breach of any covenant or obligation of Seller in this Agreement or in any other
certificate, document, writing or instrument delivered by Seller pursuant to this Agreement;




          (c) any Liability arising out of the ownership or operation of the Assets prior to the
Effective Time other than Liabilities specifically included in the determination of Final Net
Working Capital;




          (d) any brokerage or finder’s fees or commissions or similar payments based upon any agreement
or understanding made, or alleged to have been made, by any Person with Seller (or any Person
acting on its behalf) in connection with any of the Contemplated Transactions;




          (e) any Liabilities relating to services provided by Seller or any Seller Subsidiary, in whole
or in part, prior to the Closing Date, other than as specifically included in Final Net Working
Capital;




          (f) any noncompliance with any fraudulent transfer law in respect of the Contemplated
Transactions;




          (g) any Liability under the WARN Act or any similar state or local Legal Requirement that may
result from an “Employment Loss;” as defined by 29 U.S.C. § 2101(a)(6), caused by any action of
Seller prior to the Closing or by Buyer’s decision not to hire previous employees of Seller;




          (h) any Employee Plan established or maintained by Seller;



          (i)
any Retained Liabilities;



          (j) any matter related to Tax;



          (k) any
matter related to a Network Affiliate Audit; and




          (l) any matter related to improper access to networks and provider contracts; and




          (m) Seller’s obligation, if any, pursuant to Section 2.6.




     11.3 Indemnification and Reimbursement by Buyer. Buyer will indemnify and hold
harmless Seller, and will reimburse Seller, for any Damages arising from or in connection with:



          (a) any Breach of any representation or warranty made by Buyer in this Agreement or in any
certificate, document, writing or instrument delivered by Buyer pursuant to this Agreement;




          (b) any Breach of any covenant or obligation of Buyer in this Agreement or in any other
certificate, document, writing or instrument delivered by Buyer pursuant to this Agreement; and




          (c) any claim by any Person for brokerage or finder’s fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by such Person with Buyer (or
any Person acting on Buyer’s behalf) in connection with any of the Contemplated Transactions.




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     11.4 Limitations on Amount.



          (a) Notwithstanding the foregoing, Seller shall not be required to indemnify the Buyer
Indemnified Persons in respect of any Damages suffered by the Buyer Indemnified Persons unless the
aggregate of all Damages suffered by the Buyer Indemnified Persons exceeds an amount equal to
$175,000 (the “Basket”), in which case, all Damages shall be recoverable pursuant to this
Article XI; provided, however, that all Damages suffered by the Buyer Indemnified Persons relating
to Section 11.2(d), (e), (f), (g), (h), (i), (j), (k), (l) and (m) shall be recoverable
notwithstanding the amount of the Basket.




          (b) The aggregate Liability of Seller for Damages for claims under this Article XI shall be
limited to the Escrow Fund, other than for Damages related to (A) fraud by Seller or its Related
Persons or (B) Damages suffered by the Buyer Indemnified Persons relating to Section 11.2(d), (e),
(f), (g), (h), (i), (j), (k), (l) and (m).




          (c) When determining Damages of the Buyer, whether (i) the representations and warranties of
Seller is true and correct in any respect, (ii) Seller has performed any of their covenants or
agreements contained in this Agreement, or (iii) a Breach or other matter causing Damages set forth
in Section 11.2 has occurred, such representations, warranties, covenants, agreements and
obligations shall be deemed not to include any qualification or limitation with respect to
materiality (whether by reference to “Material Adverse Change,” “material adverse effect” or words
of similar import).




     11.5 Time Limitations.



          (a) If the Closing occurs, Seller will have Liability (for indemnification or otherwise) with
respect to any Breach of (i) a covenant or obligation to be performed or complied with prior to the
Closing Date and Articles X and XII, as to which a claim may be made at any time, or (ii) a
representation or warranty (other than those in Sections 3.9, 3.14, 3.16, 3.29, 3.31 and 3.32 as to
which a claim may be made at any time), only if on or before the first anniversary of the Closing
Date, Buyer notifies Seller of a claim specifying the factual basis of the claim in reasonable
detail to the extent then known by Buyer; provided, however, that nothing in this Section 11.5 is
intended to limit Buyer and CAI’s right to make any claim against Seller for fraud or intentional
misrepresentation.




     11.6 Third-Party Claims.



          (a) Promptly after receipt by a Person entitled to indemnity under Section 11.2 and 11.3 (an
“Indemnified Person”) of notice of the assertion of a Third-Party Claim against it, such
Indemnified Person shall give notice to the Person obligated to indemnify under such Section (an
“Indemnifying Person”) of the assertion of such Third-Party Claim, provided that the
failure to notify the Indemnifying Person will not relieve the Indemnifying Person of any Liability
that it may have to any Indemnified Person, except to the extent that the Indemnifying Person
demonstrates that the defense of such Third-Party Claim is prejudiced by the Indemnified Person’s
failure to give such notice.




          (b) If an Indemnified Person gives notice to the Indemnifying Person pursuant to Section
11.6(a) of the assertion of a Third-Party Claim, the Indemnifying Person shall be entitled to
participate in the defense of such Third-Party Claim and, to the extent that it wishes (unless (i)
the Indemnifying Person is also a Person against whom the Third-Party Claim is made and the
Indemnified Person determines in good faith that joint representation would be
inappropriate, or (ii) the Indemnifying Person fails to provide reasonable assurance to the
Indemnified Person of its financial capacity to defend such Third-Party Claim and provide
indemnification with respect to such Third-Party Claim), to assume the defense of such Third-Party
Claim with counsel satisfactory to the Indemnified Person. After notice



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from the Indemnifying Person to the Indemnified Person of its election to assume the defense of
such Third-Party Claim, the Indemnifying Person shall not, so long as it diligently conducts such
defense, be liable to the Indemnified Person under this Article XI for any fees of other counsel or
any other expenses with respect to the defense of such Third-Party Claim, in each case subsequently
incurred by the Indemnified Person in connection with the defense of such Third-Party Claim, other
than reasonable costs of investigation. If the Indemnifying Person assumes the defense of a
Third-Party Claim, (i) such assumption will establish conclusively for purposes of this Agreement
that the claims made in that Third-Party Claim are within the scope of and subject to
indemnification, and (ii) no compromise or settlement of such Third-Party Claims may be effected by
the Indemnifying Person without the Indemnified Person’s Consent unless (A) there is no finding or
admission of any violation of Legal Requirement or any violation of the rights of any Person, (B)
the sole relief provided is monetary damages that are paid in full by the Indemnifying Person, and
(C) the Indemnified Person shall have no Liability with respect to any compromise or settlement of
such Third-Party Claims effected without its Consent. If notice is given to an Indemnifying Person
of the assertion of any Third-Party Claim and the Indemnifying Person does not, within ten (10)
days after the Indemnified Person’s notice is given, give notice to the Indemnified Person of its
election to assume the defense of such Third-Party Claim, the Indemnifying Person will be bound by
any determination made in such Third-Party Claim or any compromise or settlement effected by the
Indemnified Person.




          (c) Notwithstanding the foregoing, if an Indemnified Person determines in good faith that
there is a reasonable probability that a Third-Party Claim may adversely affect it or its Related
Persons other than as a result of monetary damages for which it would be entitled to
indemnification under this Agreement, the Indemnified Person may, by notice to the Indemnifying
Person, assume the exclusive right to defend, compromise or settle such Third-Party Claim, but the
Indemnifying Person will not be bound by any determination of any Third-Party Claim so defended for
the purposes of this Agreement or any compromise or settlement effected without its Consent (which
may not be unreasonably withheld).




          (d) Notwithstanding the provisions of Section 12.4, Seller hereby consents to the nonexclusive
jurisdiction of any court in which a Proceeding in respect of a Third-Party Claim is brought
against any Buyer Indemnified Person for purposes of any claim that a Buyer Indemnified Person may
have under this Agreement with respect to such Proceeding or the matters alleged therein and agree
that process may be served on Seller with respect to such a claim anywhere in the world.




          (e) With respect to any Third-Party Claim subject to indemnification under this Article XI:
(i) both the Indemnified Person and the Indemnifying Person, as the case may be, shall keep the
other Person fully informed of the status of such Third-Party Claim and any related Proceedings at
all stages thereof where such Person is not represented by its own counsel; and (ii) the parties
agree (each at its own expense) to render to each other such assistance as they may
reasonably require of each other and to cooperate in good faith with each other in order to
ensure the proper and adequate defense of any Third-Party Claim.




          (f) With respect to any Third-Party Claim subject to indemnification under this Article XI,
the parties agree to cooperate in such a manner as to preserve in full (to the extent possible) the
confidentiality of all Confidential Information and the attorney-client and work-product
privileges. In connection therewith, each party agrees that: (i) it will use its commercially
reasonable best effort, in respect of any Third-Party Claim in which it has assumed or participated
in the defense, to avoid production of Confidential Information (consistent with applicable law and
rules of procedure); and (ii) all communications between any party hereto and counsel responsible
for or participating in the defense of any Third-Party Claim shall, to the extent possible, be made
so as to preserve any applicable attorney-client or work-product privilege.




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     11.7 Other Claims. A claim for indemnification for any matter not involving a Third-Party
Claim may be asserted by notice to the party from whom indemnification is sought and shall be paid
promptly after such notice.



     11.8 Indemnification in Case of Strict Liability or Indemnitee Negligence. THE
INDEMNIFICATION PROVISIONS IN THIS ARTICLE XI SHALL BE ENFORCEABLE REGARDLESS OF WHETHER THE
LIABILITY IS BASED UPON PAST, PRESENT OR FUTURE ACTS, CLAIMS OR LEGAL REQUIREMENTS (INCLUDING ANY
PAST, PRESENT OR FUTURE BULK SALES LAW, ENVIRONMENTAL LAW, FRAUDULENT TRANSFER ACT, OCCUPATIONAL
SAFETY AND HEALTH LAW OR PRODUCTS LIABILITY, SECURITIES OR OTHER LEGAL REQUIREMENT) AND REGARDLESS
OF WHETHER ANY PERSON (INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT) ALLEGES OR PROVES
THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF THE PERSON SEEKING INDEMNIFICATION
OR THE SOLE OR CONCURRENT STRICT LIABILITY IMPOSED UPON THE PERSON SEEKING INDEMNIFICATION.



ARTICLE XII

GENERAL PROVISIONS




     12.1 Expenses. (a) Except as otherwise provided in this Agreement, each party to this
Agreement will bear its respective fees and expenses incurred in connection with the preparation,
negotiation, execution and performance of this Agreement and the Contemplated Transactions,
including all fees and expense of its Representatives and all other fees and expenses incurred by
the Seller or the Targeted Subsidiaries in connection with its or their efforts to sell the
Business, the Seller or any parts thereof. Without limiting the generality of the foregoing, Seller
shall pay all of the fees and expenses incurred by the Targeted Subsidiaries in connection with the
Agreement and the Contemplated Transactions. Buyer will pay one-half and Seller will pay one-half
of the fees and expenses of the Escrow Agent under the Escrow Agreement. If this Agreement is
terminated, the obligation of each party to pay its own fees and expenses will be subject to any
rights of such party arising from a Breach of this Agreement by another party.



          (b) If this Agreement is terminated (i) by Buyer pursuant to Section 9.1(i), (j), (m) or (n),
or (ii) by Seller pursuant to Section 9.1(k), then upon such termination, Seller will promptly pay
to CAI a non-refundable fee in an aggregate amount equal to $940,000 plus an amount equal to all
fees and expenses incurred by CAI or Buyer in connection with the transactions contemplated hereby
(the “CAI Termination Fee”), it being agreed that that the CAI Termination Fee payable by
Seller if this Agreement is terminated by Buyer pursuant to Section
9.1(m) or 9.1(n) shall not include any fees payable by CAI or Buyer to its investment banker
or other financial advisor relating to the CAI Termination Fee. If (x) all of Buyer’s obligations
to close set forth in Article VII hereof (other than the condition set forth in Section 7.10),
including the receipt of Shareholder Approval, have been satisfied on or before January 31, 2008,
(y) all of Seller’s obligations to close set forth in Article VIII hereof have been satisfied or
waived (if legally permitted to be waived) on or before January 31, 2008, and Seller has certified
in writing on or before such date that all of its conditions to closing set forth in Article VIII
have been satisfied or waived (if legally permitted to be waived), and (z) this Agreement is
terminated by Buyer pursuant to Section 9.1(l), CAI will promptly pay to Seller a non-refundable
fee in an aggregate amount equal to $940,000 plus an amount equal to all fees and expenses incurred
by Seller in connection with the transactions contemplated hereby (the “Seller Termination
Fee”), it being understood that the Seller Termination Fee shall not include any fees and
expenses incurred by Seller in connection with its efforts to sell the Business, Assets or Targeted
Subsidiaries other than directly in connection with this Agreement and shall not include fees and
expenses incurred in connection with any solicitation, negotiation, discussions or the





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like with any Person other than CAI or any fees payable to its investment bank or other financial
advisors relating to the Seller Termination Fee.




     12.2 Public Announcements. Except as may be required by applicable law, regulations or
the rules of the NASDAQ Global Market, any public announcement, press release or similar publicity
with respect to this Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Buyer determines, provided that CAI shall have been previously provided
a reasonable amount of time to review such public announcement, press release or similar publicity.
Except as may be required by applicable law, regulations or the rules of the NASDAQ Global Market,
and which shall have been previously provided to CAI with a reasonable amount of time to review, or
with the prior consent of Buyer or as permitted by this Agreement, neither Seller, nor any of its
Representatives shall disclose to any Person (a) the fact that any Confidential Information of
Seller has been disclosed to Buyer or its Representatives, that Buyer or its Representatives have
inspected any portion of the Confidential Information of Seller, that any Confidential Information
of Buyer has been disclosed to Seller, or its Representatives or that Seller, or its
Representatives have inspected any portion of the Confidential Information of Buyer, or (b) any
information about the Contemplated Transactions, including the status of such discussions or
negotiations, the execution of any documents (including this Agreement) or any of the terms of the
Contemplated Transactions or the related documents (including this Agreement), . Seller and Buyer
will consult with each other concerning the means by which Seller’s employees, customers, suppliers
and others having dealings with Seller will be informed of the Contemplated Transactions, and Buyer
will have the right to be present for any such communication.



     12.3 Notices. All notices, Consents, waivers and other communications required or
permitted by this Agreement shall be in writing and shall be deemed given to a party when (a)
delivered to the appropriate address by hand or by nationally recognized overnight courier service
(costs prepaid), (b) sent by facsimile or e-mail with confirmation of transmission by the
transmitting equipment, or (c) received or rejected by the addressee, if sent by certified mail,
return receipt requested, in each case to the following addresses, facsimile numbers or e-mail
addresses and marked to the attention of the person (by name or title) designated below (or to such
other address, facsimile number, e-mail address or person as a party may designate by notice to the
other parties):



Seller:



ProxyMed,Inc.

1854 Shackleford Court, Suite 200

Norcross, Georgia 30093

Attention: Ford Pearson

Fax no.:

E-mail address:




with a mandatory copy to:



Peter Fleming

1901 East Alton, Suite 100

Santa Ana, California 92075

Attention:

Fax no.:

E-mail address:




Buyer:



Coalition America, Inc.

Two Concourse Parkway, Suite 300

Atlanta, Georgia 30328

Attention: Chief Financial Officer

Fax no.: (404) 250-4933






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E-mail address: anthonylevinson@coalitionamerica.com




with a mandatory copy to:



Morris, Manning & Martin, LLP

1600 Atlanta Financial Center

3343 Peachtree Road, NE

Attention: David M. Calhoun

Fax no.: (404) 365-9532

E-mail address: dcalhoun@mmmlaw.com




     12.4 Jurisdiction; Service of Process. Any Proceeding arising out of or relating to
this Agreement or any Contemplated Transaction may be brought in the courts of the State of
Georgia, County of Fulton, or, if it has or can acquire jurisdiction, in the United States District
Court for the Northern District of Georgia, and each of the parties irrevocably submits to the
exclusive jurisdiction of each such court in any such Proceeding, waives any objection it may now
or hereafter have to venue or to convenience of forum, agrees that all claims in respect of the
Proceeding shall be heard and determined only in any such court and agrees not to bring any
Proceeding arising out of or relating to this Agreement or any Contemplated Transaction in any
other court. The parties agree that either or both of them may file a copy of this paragraph with
any court as written evidence of the knowing, voluntary and bargained agreement between the parties
irrevocably to waive any objections to venue or to convenience of forum. Process in any Proceeding
referred to in the first sentence of this section may be served on any party anywhere in the world.



     12.5 Enforcement of Agreement. Seller acknowledges and agrees that Buyer would be
irreparably damaged if any of the provisions of this Agreement are not performed in accordance with
their specific terms and that any Breach of this Agreement by Seller could not be adequately
compensated in all cases by monetary damages alone. Accordingly, in addition to any other right or
remedy to which Buyer may be entitled, at law or in equity, it shall be entitled to enforce any
provision of this Agreement by a decree of specific performance and to temporary, preliminary and
permanent injunctive relief to prevent Breaches or threatened Breaches of any of the provisions of
this Agreement, without posting any bond or other undertaking.



     12.6 Waiver; Remedies Cumulative. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither any failure nor any delay by any party in
exercising any right, power or privilege under this Agreement or any of the documents referred to
in this Agreement will operate as a waiver of such right, power or privilege, and no single or
partial exercise of any such right, power or privilege will preclude any other or further exercise
of such right, power or privilege or the exercise of any other right, power or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement or
any of the documents referred to in this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed by the other
party, (b) no waiver that may be given by a party will be applicable except in the specific
instance for which it is given, and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of that party or of the right of the party giving such notice or demand to
take further action without notice or demand as provided in this Agreement or the documents
referred to in this Agreement.



     12.7 Entire Agreement and Modification. This Agreement supersedes all prior
agreements, whether written or oral, between the parties with respect to its subject matter
(including any letter of intent and any confidentiality agreement between Buyer and Seller) and
constitutes (along with the Schedules, Exhibits and other documents delivered pursuant to this
Agreement) a complete and exclusive statement of the terms of the agreement between the parties
with respect to its subject matter. This



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Agreement may not be amended, supplemented, or otherwise modified except by a written agreement
executed by the party to be charged with the amendment.




     12.8 Schedules.



          (a) The information in the Schedules delivered by Seller constitutes (i) exceptions to
particular representations, warranties, covenants and obligations of Seller as set forth in this
Agreement or (ii) descriptions or lists of assets and liabilities and other items referred to in
this Agreement. If there is any inconsistency between the statements in this Agreement and those in
the Schedules (other than an exception expressly set forth as such in the Schedules with respect to
a specifically identified representation or warranty), the statements in this Agreement will
control.




          (b) The statements in the Schedules, and those in any supplement thereto, relate only to the
provisions in the Section of this Agreement to which they expressly relate and not to any other
provision in this Agreement.




     12.9 Assignments, Successors and No Third-Party Rights. No party may assign any of
its rights or delegate any of its obligations under this Agreement without the prior written
consent of the other parties, except that Buyer may assign any of its rights and delegate any of
its obligations under this Agreement to any Subsidiary of Buyer and may collaterally assign its
rights hereunder to any financial institution providing financing in connection with the
Contemplated Transactions. Subject to the preceding sentence, this Agreement will apply to, be
binding in all respects upon, and inure to the benefit of, the successors and permitted assigns of
the parties. Nothing expressed or referred to in this Agreement will be construed to give any
Person other than the parties to this Agreement any legal or equitable right, remedy or claim under
or with respect to this Agreement or any provision of this Agreement, except such rights as shall
inure to a successor or permitted assignee pursuant to this Section 12.9.



     12.10 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only
in part or degree will remain in full force and effect to the extent not held invalid or
unenforceable.



     12.11 Construction. The headings of Articles and Sections in this Agreement are
provided for convenience only and will not affect its construction or interpretation. All
references to “Articles” and “Sections” refer to the corresponding Articles and Sections of this
Agreement.



     12.12 Time of Essence. With regard to all dates and time periods set forth or referred
to in this Agreement, time is of the essence.



     12.13 Governing Law. This Agreement will be governed by and construed under the laws
of the State of Georgia without regard to conflicts-of-laws principles that would require the
application of any other law.



     12.14 Execution of Agreement. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same agreement. The exchange
of copies of this Agreement and of signature pages by facsimile transmission shall constitute
effective execution and delivery of this Agreement as to the parties and may be used in lieu of the
original Agreement for all purposes. Signatures of the parties transmitted by facsimile shall be
deemed to be their original signatures for all purposes.



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     IN
WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date first written above.



	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	BUYER:	 	 	 	SELLER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CCB ACQUISITION, LLC	 	 	 	PROXYMED, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Scott S. Smith	 	 	 	By:
	 	/s/ Gerard M. Hayden	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:
	 	Scott S. Smith	 	 	 	 Name:
	 	Gerard M. Hayden	 	 
	Title:

	 	President	 	 	 	Title:
	 	Chief Financial Officer	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CAI:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	COALITION AMERICA, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Scott S. Smith	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Name:
	 	Scott S. Smith	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Title:
	 	President	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 





SIGNATURE
PAGE TO STOCK PURCHASE AGREEMENT