AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

by and among

QUOVADX, INC.

QUARTZITE HOLDINGS, INC.

and

QUARTZITE ACQUISITION SUB, INC.

Dated as of April 1, 2007

AGREEMENT AND PLAN OF MERGER

     This AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated as of April 1, 2007, is entered into by and among Quovadx, Inc., a Delaware corporation (the “ Company ”), Quartzite Holdings, Inc., a Delaware corporation (the “ Acquiror ”), and Quartzite Acquisition Sub, Inc., a Delaware corporation (the “ Acquiror Sub ”) (the Company, Acquiror and Acquiror Sub are individually hereinafter referred to as “ Party ” and collectively as the “ Parties ”).

W I T N E S S E T H:

      WHEREAS , Acquiror Sub, upon the terms and subject to the conditions of this Agreement and in accordance with the Delaware General Corporation Law (“ Delaware Law ”), will merge with and into Company (the “ Merger ”);

      WHEREAS , the Boards of Directors of the Company, Acquiror and Acquiror Sub have determined that the Merger is advisable and fair to their respective companies and shareholders and approved and adopted this Agreement and the transactions contemplated hereby;

      WHEREAS, the Parties desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe certain conditions to the Merger;

      WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to Acquiror’s and Acquiror Sub’s willingness to enter into this Agreement, certain directors and officers of the Company, who hold outstanding capital stock of the Company shall enter into a Voting Agreement in the form attached hereto as Exhibit A (the “ Voting Agreement ”);

      WHEREAS , certain terms used in this Agreement are defined in Article XI ;

      NOW, THEREFORE , in consideration of the premises and the mutual covenants and agreements hereinafter contained, the Parties hereby agree as follows:

ARTICLE I

THE MERGER

     1.1 The Merger .

     On the terms and subject to the conditions set forth in this Agreement, and in accordance with Delaware Law, at the Effective Time, Acquiror Sub shall be merged with and into the Company, with the Company being the surviving corporation (the “ Surviving Corporation ”) in the Merger. Upon consummation of the Merger, the separate corporate existence of Acquiror Sub shall cease, and the Surviving Corporation shall continue to exist as a Delaware corporation.

     1.2 Closing .

     Subject to the terms and conditions of this Agreement, the closing of the Merger (the “ Closing ”) shall take place at the offices of Hogan & Hartson L.L.P., located at One Tabor Center, 1200 Seventeenth Street, Suite 1500, Denver, Colorado 80202 (or at such other place as the Parties may designate in writing) at 10:00 a.m. (Mountain time) on a date to be specified by the Parties (the “ Closing Date ”), which date shall be no later than the third Business Day after satisfaction or waiver of the conditions set forth in Article IX (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at such time), unless another time, date or place is agreed to in writing by the Parties hereto.

     1.3 Effective Time; Closing Date .

     Subject to the provisions of Section 1.2 , as promptly as practicable after the satisfaction or, if permissible, waiver of the conditions set forth in Article IX , the Surviving Corporation shall cause the Merger to be consummated by filing the Certificate of Merger, attached hereto as Exhibit B (the “ Certificate of Merger ”), and any other appropriate documents with the Secretary of State of the State of Delaware, in such form as required by, and executed in accordance with the relevant provisions of, Delaware Law (the date and time of such filing being the “ Effective Time ”).

     1.4 Effect of the Merger .

     At the Effective Time, the effect of the Merger shall be as set forth under Delaware Law. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, powers and franchises of the Company and Acquiror Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Acquiror Sub shall become the debts, liabilities and duties of the Surviving Corporation.

     1.5 Certificate of Incorporation; Bylaws .

          (a) The certificate of incorporation of Acquiror Sub as in effect immediately prior to the Effective Time shall be the certificate of incorporation of the Surviving Corporation, except that the corporate name of the Company shall become the corporate name of the Surviving Corporation, until thereafter changed or amended as provided therein or by applicable Law.

          (b) The bylaws of Acquiror Sub as in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation, until thereafter changed or amended as provided therein or by applicable Law.

     1.6 Directors and Officers .

     At the Effective Time, the officers and directors of Acquiror Sub immediately prior to the Effective Time shall be the officers and directors of the Surviving Corporation, in each case until their respective successors are duly elected or appointed and qualified or until the earlier of their death, resignation or removal.

     1.7 Taking of Necessary Action; Further Action .

     If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Company and Acquiror Sub, the officers and directors of the Company, Acquiror and Acquiror Sub are fully authorized in the name of their respective corporations or otherwise to take, and will take, all such lawful and necessary action.

ARTICLE II

MERGER CONSIDERATION; CONVERSION OF SECURITIES

     2.1 Total Merger Consideration .

     The aggregate consideration shall be an amount equal to One Hundred Thirty-Six Million Seven Hundred Thousand and No/100 Dollars ($136,700,000) consisting solely of cash (the “ Total Merger Consideration ”), as adjusted pursuant to Section 2.2 .

     2.2 Adjustment to the Total Merger Consideration . The Total Merger Consideration shall be subject to adjustment as follows:

          (a) Not later than five (5) Business Days prior to the Closing, the Company shall prepare and deliver to Acquiror a statement signed by the Chief Executive Officer of the Company (the “ Closing Statement ”) calculating the Company’s good faith estimate of the Closing Working Capital (the “ Estimated Closing Working Capital ”) and the amount, if any, by which the Estimated Closing Working Capital is less than the Low Threshold or greater than the High Threshold (together with supporting documentation used by the Company in calculating and preparing the Closing Statement and such other documentation as Acquiror shall reasonably request), which statement shall be prepared in accordance with GAAP consistently applied.

          (b) During the five (5) Business Days prior to the Closing (the “ Confirmation Period ”), in addition to the access rights provided by Section 7.1 hereof, the Company shall (i) afford Acquiror through its officers, employees and representatives (including its legal advisors and accountants) full and free access to the Company’s books and records including, but not limited to, the Company’s accounts payable and accounts receivable, (ii) make available to Acquiror all employees involved in the preparation of the Closing Statement, and (iii) provide Acquiror with any other documentation or information reasonably requested to confirm the Closing Statement.

          (c) During the Confirmation Period, the Company and Acquiror shall use commercially reasonable efforts to agree on a Closing Statement, which shall be deemed the “ Final Closing Statement ” and shall be conclusive and binding upon all parties and shall not be subject to dispute or review. The Closing Working Capital set forth on the Final Closing Statement shall hereinafter be referred to as the “ Final Working Capital .”

          (d) If the Final Working Capital is in the range of negative Nine Million Two Hundred Forty Thousand and No/100 Dollars (− $9,240,000) (the “ Low Threshold ”) and negative Seven Million Two Hundred Forty Thousand and No/100 Dollars (− $7,240,000) (the “ High Threshold ”) then there shall be no adjustment to the Total Merger Consideration. In the event that the Final Working Capital exceeds the High Threshold, the Total Merger Consideration shall be increased, at the Closing, by the amount of such excess, and in the event that Final Working Capital is less than the Low Threshold, the Total Merger Consideration shall be decreased, at the Closing, by the amount of such shortfall (in either case, the “ Closing Merger Consideration ”).

     2.3 Effect on Capital Stock .

          (a) As of the Effective Time, by virtue of the Merger and without any action on the part of the Company, Acquiror or Acquiror Sub or the shareholders thereof, all shares of common stock, par value $0.01 per share, of the Company (the “ Common Stock ”) issued and outstanding prior to the Effective Time (excluding shares held by shareholders who perfect their dissenters’ rights as provided in Section 2.3(e) and shares to be cancelled pursuant to Section 2.3(d) hereof) shall be converted into the right to receive an amount of cash equal to the Per Share Merger Consideration, without interest.

          (b) At the Effective Time, each option granted by the Company under the Company’s 2006 Equity Incentive Plan, 1999 Director Option Plan or any other stock option plan or similar employee benefit plan or arrangement maintained or sponsored by the Company providing for equity compensation to any Person (collectively, the “ Company Equity Incentive Plans ”), other than the Company ESPP, or otherwise pursuant to certain inducement grants to purchase Common Stock (each a “ Company Option ” and collectively, the “ Company Options ”) that is outstanding and unexercised, as accelerated in accordance with Section 5.5(b) , immediately prior the Effective Time, by virtue of the Merger and without any action on the part of the Company, Acquiror, Acquiror Sub or any of the holders thereof, shall be cancelled and, if the Per Share Merger Consideration exceeds the per share exercise price of such Company Option (an "In-the-Money Option") such Company Option shall be converted into the right to receive, as soon as practicable thereafter but in any event within three (3) Business Days after the Effective Time, an amount of cash equal to the excess, if any, of the Per Share Merger Consideration over the exercise price of such In-the-Money Option (the “ Option Merger Consideration ”) minus any applicable withholding taxes. Prior to the Effective Time, the Company and its Board shall take any and all actions necessary to effectuate this Section 2.3(b) , including the approval of any amendments to the Company Equity Incentive Plans and, including, but not limited to, satisfaction of the requirements of Rule 16b-3(e) under the Exchange Act. Further, the Company shall ensure that following the Effective Time no participant in the Company Equity Incentive Plans or other plans, programs or arrangements shall have any right thereunder to acquire any equity securities of the Company, the Surviving Corporation or any Subsidiary. Prior to the Effective Time, the Company shall take all actions necessary pursuant to the terms of the Company’s Employee Stock Purchase Plan (the “ Company ESPP ”) to (i) shorten each currently ongoing purchase and/or offering period under the Company ESPP that extends beyond the Effective Time (the “ Current Offering(s) ”) such that a new purchase date for each such Current Offering shall occur prior to the Effective Time and shares of Common Stock shall be purchased by the Company ESPP participants prior to the Effective Time, and (ii) preclude the commencement of any new purchase or offering period. The Company shall take all actions necessary so that the Company ESPP shall terminate immediately prior to the earlier of (A) the day preceding the Effective Time and (B) the date upon which the Company ESPP terminates by its terms.

          (c) Upon the Effective Time, by virtue of the Merger and without any action on the part of the Company, Acquiror, Acquiror Sub or the holders thereof, all Common Stock and the Company Options shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each certificate (a “ Certificate ”) previously representing any such Common Stock and each agreement (an “ Option Agreement ”) previously representing any such Company Options shall thereafter represent only the right to receive the Per Share Merger Consideration or the Option Merger Consideration, as applicable. Payments made in respect of the Company Options shall be in full satisfaction of all obligations under the Company Equity Incentive Plans and the Option Agreements. If prior to the Effective Time, the Company should split or combine its common shares, or pay a dividend in common shares or other distribution in such common shares, then the Per Share Merger Consideration and Option Merger Consideration shall be appropriately adjusted to reflect such split, combination, dividend or distribution.

          (d) At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Acquiror, Acquiror Sub or any holder thereof, and notwithstanding any other provision hereof that may be to the contrary, all Common Stock that is owned directly by Acquiror, Acquiror Sub or the Company (or held in the Company’s treasury) shall be canceled and shall cease to exist and no cash or other consideration shall be delivered in exchange therefor.

          (e) Notwithstanding any other provision hereof that may be to the contrary, any Shareholder who has not voted such shares in favor of the Merger and who has demanded or may properly demand appraisal rights in the manner provided by Section 262 of Delaware Law (“ Dissenting Shares ”) shall not be converted into a right to receive a portion of the Merger Consideration unless and until the Effective Time has occurred and the holder of such Dissenting Shares becomes ineligible for such appraisal rights. The holders of Dissenting Shares shall be entitled only to such rights as are granted by Section 262 of Delaware Law. Each holder of Dissenting Shares who becomes entitled to payment for such shares pursuant to Section 262 of Delaware Law shall receive payment therefor from Acquiror in accordance with Delaware Law; provided , however , that (i) if any such holder of Dissenting Shares shall have failed to establish entitlement to appraisal rights as provided in Section 262 of Delaware Law, (ii) if any such holder of Dissenting Shares shall have effectively withdrawn demand for appraisal of such shares or lost the right to appraisal and payment for shares under Section 262 of Delaware Law or (iii) if neither any holder of Dissenting Shares nor Surviving Corporation shall have filed a petition demanding a determination of the value of all Dissenting Shares within the time provided in Section 262 of Delaware Law, such holder of Dissenting Shares shall forfeit the right to appraisal of such shares and each such Dissenting Share shall be treated as if it had been, as of the Effective Time, converted into a right to receive the Per Share Merger Consideration, without interest thereon, as provided in this Section 2.3 of this Agreement. The Company shall give Acquiror prompt notice of any demands received by the Company for appraisal of any shares of Common Stock, and Acquiror shall have the right to participate in all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior written consent of Acquiror, make any payment with respect to, or settle or offer to settle, any such demands, with respect to any holder of Dissenting Shares before the Effective Time.

          (f) At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Acquiror, Acquiror Sub or any holder thereof, each common share, par

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value $0.001 per share, of Acquiror Sub issued and outstanding immediately prior to the Effective Time shall be converted into one fully paid and nonassessable common share, par value $0.001 per share, of the Surviving Corporation.

          (g) All cash paid in respect of the surrender for exchange of shares of Common Stock in accordance with the terms hereof shall be deemed to be in full satisfaction of all rights pertaining to such shares of Common Stock. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Article.

ARTICLE III

EXCHANGE PROCEDURES

     3.1 Acquiror to Make Funds Available .

     At or prior to the Effective Time, Acquiror shall deposit, or shall cause to be deposited, with a bank or trust company reasonably acceptable to the Company (the “ Exchange Agent ”), on a timely basis, if and when needed for the benefit of the holders of Certificates, the aggregate Closing Merger Consideration in cash sufficient for the Exchange Agent to make full payment of the Per Share Merger Consideration pursuant to Section 2.3 (the “ Exchange Fund ”). There shall be a written agreement between Acquiror and the Exchange Agent in which the Exchange Agent expressly undertakes, on reasonably customary terms, the obligation to pay the aggregate Per Share Merger Consideration as provided herein. The Company shall have a reasonable opportunity, but in any event at least five (5) Business Days, to review and comment on the agreement with the Exchange Agent prior to it being finalized.

     3.2 Exchange .

          (a) As soon as practicable, but no more than three (3) Business Days, after the Effective Time, provided that Company has cooperated to make the necessary information available thereto a sufficient time in advance, the Exchange Agent shall mail to each holder of record of a Certificate or Certificates a form letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent) and instructions for use in effecting the surrender of the Certificates in exchange for payment of the Per Share Merger Consideration pursuant to this Agreement. Additionally, the Exchange Agent shall provide a form of the letter of transmittal to the Company prior to the Closing Date. Upon surrender of a Certificate for exchange and cancellation to the Exchange Agent, together with such letter of transmittal, duly executed, the holder (or any agent thereof) of such Certificate shall be entitled to receive promptly in exchange therefor a check or wire transfer (provided such holder shall be responsible for any wire transfer fees) payable to such holder (or any agent thereof) representing the amount of cash to which such holder shall have become entitled pursuant to the provisions of Article II hereof, and the Certificate so surrendered shall forthwith be canceled.

          (b) As of the Effective Time, there shall be no transfers on the stock transfer books of the Company of the Common Stock that were issued and outstanding immediately prior

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to the Effective Time. If, after the Effective Time, Certificates representing such shares are presented for transfer to the Exchange Agent, they shall be canceled and exchanged for the Per Share Merger Consideration as provided in this Article III .

          (c) Any portion of the Exchange Fund that remains unclaimed by the former Shareholders of the Company twelve (12) months after the Effective Time shall be returned to Acquiror. After such funds have been returned to Acquiror, any former Shareholders of the Company who have not theretofore complied with this Article III shall thereafter look only to Acquiror for payment of the Per Share Merger Consideration deliverable in respect of each share of Common Stock such Shareholders hold as determined pursuant to this Agreement, in each case, without any interest thereon. Notwithstanding the foregoing, none of Acquiror, the Company, the Exchange Agent or any other Person shall be liable to any former holder of Common Stock for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar laws. Acquiror, any Affiliate of Acquiror, any Affiliated Person or the Exchange Agent will be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement or the transactions contemplated hereby to any holder of Common Stock or the Company Options such amounts as Acquiror (or any Affiliate of Acquiror or Affiliated Person) or the Exchange Agent are required to deduct and withhold with respect to the making of such payment under Delaware Law, or any applicable provision of U.S. federal, state, local or non-U.S. tax law. To the extent that such amounts are properly withheld by Acquiror (or any Affiliate of Acquiror or Affiliated Person) or the Exchange Agent and paid over to the appropriate taxing authority, such withheld amounts will be treated for all purposes of this Agreement as having been paid to the holder of the Common Stock or the Company Options in respect of whom such deduction and withholding were made by such Person.

          (d) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate (whether the record holder or any agent thereof) to be lost, stolen or destroyed, and, if required by Acquiror, the posting by such Person of a bond in such amount as Acquiror or may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate a check representing the Per Share Merger Consideration deliverable to such holder (or any agent thereof) in respect thereof pursuant to this Agreement. If payment of the Per Share Merger Consideration is to be made to any Person other than the registered holder of the Certificate surrendered in exchange therefor, it shall be a condition of the payment or issuance thereof that the Certificate so surrendered shall be properly endorsed (or accompanied by an appropriate instrument of transfer) and otherwise in proper form for transfer, and that the Person requesting such exchange shall pay to the Exchange Agent in advance any transfer or other similar taxes required by reason of the payment of the Per Share Merger Consideration to any Person other than the registered holder of the Certificate surrendered, or required for any other reason relating to such holder or requesting Person, or shall establish to the reasonable satisfaction of Acquiror and the Exchange Agent that such tax has been paid or is not payable.

ARTICLE IV

TERMINATION

     4.1 Termination .

     This Agreement may be terminated at any time (except where otherwise indicated) prior to the Closing, whether before or after approval of this Agreement (unless otherwise set forth below), as follows:

          (a) by mutual written consent of Acquiror and the Company;

          (b) by Acquiror, (i) if there has been a breach of any covenant or agreement on the part of the Company that causes the condition provided in Section 9.2(b) not to be met and such breach has not been cured (if curable) within ten (10) Business Days following receipt by the Company of written notice of such breach describing the extent and nature thereof in reasonable detail or (ii) if there has been any event, change, occurrence or circumstance that renders the conditions set forth in Section 9.2(a) incapable of being satisfied by October 31, 2007 (the “ Outside Date ”);

          (c) by the Company, (i) if there has been a breach of any covenant or agreement on the part of Acquiror or Acquiror Sub that causes the condition provided in Section 9.3(b) not to be met and such breach has not been cured (if curable) within ten (10) Business Days following receipt by Acquiror of written notice of such breach describing the extent and nature thereof in reasonable detail or (ii) or there has been any event, change, occurrence or circumstance that renders the conditions set forth in Section 9.3(a) incapable of being satisfied by the Outside Date;

          (d) by either Acquiror or the Company if there shall be in effect a final, unappealable Order restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby; provided , however , that the party seeking to terminate this Agreement pursuant to this clause (d) shall not have initiated such proceeding or taken any action in support of such proceeding (it being agreed that the Parties shall use their commercially reasonable efforts to promptly appeal any such Order that is not unappealable and diligently pursue such appeal);

          (e) by either Acquiror or the Company if the approval of the shareholders of the Company hereto required for the consummation of the Merger shall not have been obtained by reason of the failure to obtain the Requisite Shareholder Vote at a duly held Special Meeting of Shareholders or at any adjournment or postponement thereof (provided that the right to terminate this Agreement under this Section 4.1(e) shall not be available to any Party seeking termination who at the time is in breach or has failed to fulfill its obligations under Section 7.4 of this Agreement);

          (f) by either Acquiror or the Company on or after the Outside Date if the Closing shall not have occurred by the close of business on such date (unless the failure to consummate the Closing is attributable to a breach of this Agreement on the part of the Party

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seeking to terminate this Agreement); provided , however , that the terminating party is not in material default of any of its obligations hereunder;

          (g) by Acquiror if, the Board shall have (i) endorsed, approved or recommended any Acquisition Proposal in accordance with Section 7.8 , other than that contemplated by this Agreement; (ii) effected a Change in Recommendation, (iii) resolved to do any of the foregoing or (iv) failed to reconfirm the Company Board Recommendation within ten (10) Business Days after Acquiror requests in writing that the Board do so;

          (h) by Acquiror if (i) the Company shall have entered into a definitive agreement with respect to an Acquisition Proposal; or (ii) a tender offer or exchange offer for outstanding shares of the Common Stock is commenced (other than by Acquiror or an Affiliate of Acquiror) and the Board recommends that the Shareholders tender their shares in such tender or exchange offer or, within ten (10) Business Days after such tender or exchange offer, fails to recommend against acceptance of such offer or takes no position with respect to the acceptance thereof or (iii) for any reason the Company fails to hold the Special Meeting by the Outside Date; or

          (i) by the Company if, at any time prior to receiving the Requisite Shareholder Approval, the Board authorizes the Company, subject to complying with the terms of this Agreement in all material respects, to terminate this Agreement in order to enter into a binding, definitive agreement with respect to a Superior Proposal; provided that the Company shall have first paid to Acquiror the Company Termination Fee; and provided , further , that (A) the Company shall have provided Acquiror with written notice of its intent to terminate this Agreement pursuant to this Section 4.1(i) at least three (3) Business Days in advance of such termination, which written notice shall include the most current version of the definitive agreement and a reasonably detailed summary of any other material terms and conditions relating thereto, and (B) Acquiror does not make, within three (3) Business Days of receipt of such written notice, an offer that the Board determines, in good faith after consultation with the Company’s legal and financial advisors and taking into account all the terms and conditions of such offer (including any break-up fees, expense reimbursement provisions and conditions to consummation), would, if consummated, result in a transaction at least as favorable to the Shareholders as the transaction set forth in the Company’s written notice delivered pursuant to clause (A) above, it being understood that the Company shall not enter into any such binding, definitive agreement during such three (3) Business Day period (the Company agrees to notify Acquiror promptly if its intention to enter into any such agreement referred to in Section 4.1(i)(A) shall change at any time after giving such notification).

     4.2 Procedure Upon Termination .

     In the event of termination and abandonment by Acquiror or the Company, or both, pursuant to Section 4.1 hereof, written notice thereof shall forthwith be given to the other Party or Parties and this Agreement shall terminate, and the Merger shall be abandoned, without further action by Acquiror or the Company.

     4.3 Effect of Termination .

     Upon the termination of this Agreement in accordance with Sections 4.1 and 4.2 hereof, Acquiror and the Company shall be relieved of any further duties and obligations under this Agreement after the date of such termination; provided , that no such termination shall relieve any Party hereto from Liability for any willful breach or fraud by a Party of this Agreement; provided , further , that the obligations of the Parties set forth in Section 4.5 , Articles X and XII hereof shall survive any such termination and shall be enforceable after such termination.

     4.4 Frustration of Conditions .

     Neither Acquiror or Acquiror Sub, on the one hand, nor the Company, on the other, may rely on the failure of any condition set forth in Section 9.1 , 9.2 , or 9.3 to be satisfied if such failure was caused by such Party’s failure to comply with or perform any of its covenants or obligations set forth in this Agreement.

     4.5 Fees and Expenses .

          (a) Except as otherwise set forth in this Section 4.5 or in Section 12.7 , all expenses incurred in connection with this Agreement shall be paid by the Party incurring such expenses, whether or not the transactions contemplated hereunder are consummated.

          (b) The Company agrees that, in order to compensate Acquiror for the direct and substantial damages suffered by Acquiror in the event of termination of this Agreement under certain circumstances, which damages cannot be determined with reasonable certainty, the Company shall pay to Acquiror the Company Termination Fee upon the earliest to occur of the following events:

          (i) The termination of this Agreement by Acquiror pursuant to Sections 4.1(b)(i) , (g) or (h) ;

          (ii) The termination of this Agreement by Acquiror or the Company pursuant to Sections 4.1(e) and (f) if within twelve (12) months of the termination of this Agreement, the Company has consummated a transaction with respect to an Acquisition Proposal that was publicly announced or communicated to the Board or senior management and not withdrawn prior to the date of the termination; or

          (iii) The termination of this Agreement by the Company pursuant to Section 4.1(i) .

     For purposes of this Agreement, “ Company Termination Fee ” means an amount equal to three and one half percent (3.5%) of the Total Merger Consideration less any Expenses actually reimbursed and paid by the Company to Acquiror under Section 4.5(c) .

          (c) Upon any termination of this Agreement for which a Company Termination Fee is due and payable under Section 4.5(b) (provided that neither Acquiror’s nor Acquiror Sub’s noncompliance with its obligations under this Agreement has materially contributed to the breach, failure to perform or other event or condition giving rise to such

termination), the Company shall reimburse Acquiror and its Affiliates for one hundred percent (100%) of their Expenses (as defined below) in an amount not to exceed three and one half percent (3.5%) of the Total Merger Consideration. In the event this Agreement is terminated pursuant to Section 4.1(e) , but a Company Termination Fee is not payable under Section 4.5(b) , the Company shall reimburse Acquiror and its Affiliates for one hundred percent (100%) of their Expenses (as defined below) in an amount not to exceed Six Hundred Fifty Thousand and No/100 Dollars ($650,000). The term “ Expenses ” means all actual and documented out-of-pocket expenses of Acquiror and its Affiliates in connection with this Agreement and the transactions contemplated hereby, including, without limitation, fees and expenses of accountants, attorneys and financial advisors, and all costs of Acquiror and its Affiliates relating to the financing of the Merger (including, without limitation, advisory and commitment fees and reasonable fees and expenses of counsel to potential lenders).

          (d) The Company Termination Fee, and/or Expenses, shall be paid by the Company as directed by Acquiror in writing in immediately available funds on the date(s) specified above, or, if no such date is specified, not later than three (3) Business Days after the date of the event giving rise to the obligation to make such payment.

          (e) The Company acknowledges that the agreements contained in this Section 4.4 are an integral part of the transactions contemplated by this Agreement. In the event that the Company shall fail to pay the Company Termination Fee when due, the Company shall reimburse Acquiror for all reasonable costs and expenses actually incurred or accrued by Acquiror (including reasonable fees and expenses of counsel) in connection with the collection under and enforcement of this Section 4.4 , together with interest on such amounts (or any unpaid portion thereof) from the date such payment was required to be made until the date such payment is received by Acquiror and its Affiliates at the prime rate of Citibank, N.A. as in effect from time to time during such period.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except as specifically set forth in the Schedules (with specific references to the Section or subsection of this Article V to which the information stated in such disclosure relates, notwithstanding the fact that any such Section or subsection does not specifically permit or require disclosure of information on a schedule), the Company hereby represents, warrants to and agrees with Acquiror as follows, in each case as of the date of this Agreement and as of the Closing Date:

     5.1 Organization and Qualification .

     The Company is a corporation duly incorporated, validly existing and in good standing under Delaware Law, and has all requisite corporate power and authority to own, operate and lease its assets, to carry on the Business, to execute and deliver this Agreement and to carry out the transactions contemplated hereby. The Company is duly qualified or authorized to conduct business as a foreign corporation and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or authorization necessary other than where the failure to be so qualified, authorized or in good standing would not have a Material Adverse Effect.

     5.2 Authority; Binding Obligation .

     The Company has all requisite power, authority and legal capacity to execute and deliver this Agreement and each of the other agreements, documents, certificates or other instruments contemplated hereby and thereby (the “ Company Documents ”), to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by the Company of this Agreement, the execution, delivery and performance by the Company of the Company Documents, and the consummation by the Company of the transactions contemplated hereby and thereby, have been duly authorized and approved by all necessary corporate action, and no other corporate proceeding on the part of the Company is necessary to authorize this Agreement and the Company Documents, or to consummate the transactions contemplated hereby and thereby, other than the approval and adoption of this Agreement by the Requisite Shareholder Vote. The Requisite Shareholder Vote is the only vote of the holders of any of the Company’s capital stock necessary in connection with the consummation of the Merger under Delaware Law, the Company’s certificate of incorporation and bylaws or otherwise. This Agreement has been, and the Company Documents will be at or prior to the Closing, duly executed and delivered by the Company. This Agreement constitutes, and the Company Documents when so executed and delivered, will constitute a legal, valid and binding obligation of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws, affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity); provided , however , that the Merger will not become effective until the Certificate of Merger is filed with the office of the Secretary of State of the State of Delaware.

     At a meeting duly called and held, the Board has determined that this Agreement and the transactions contemplated hereby are fair to and in the best interests of the Shareholders, approved and adopted this Agreement and the transactions contemplated hereby and resolved (subject to Section 7.4 ) to recommend approval and adoption of this Agreement by the Shareholders (the “ Company Board Recommendation ”).

     5.3 Corporate Records .

          (a) The Company has furnished to Acquiror a true and complete copy of the certificate of incorporation of the Company and a true and complete copy of the Company’s bylaws, as in effect on the date of this Agreement.

          (b) The books of account, stock records, minute book and other corporate and financial records of the Company are complete and correct in all material respects and have been maintained in accordance with reasonable business practices for companies similar to the Company, and the Company will have prior to Closing prepared and made available to Acquiror the minutes for all meetings of the Board and/or shareholders of the Company held as of the date hereof (or written consents in lieu of such meetings).

     5.4 No Conflict; Required Filings and Consents .

          (a) None of the execution, delivery and performance by the Company of this Agreement or the Company Documents, the fulfillment of and compliance with the respective terms and provisions hereof or thereof, or the consummation by the Company of the transactions contemplated hereby and thereby, will conflict with, or violate any provision of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination or cancellation under, any provision of (i) the certificate of incorporation or bylaws of the Company, (ii) any material Contract or material Permit to which the Company is a party or bound, (iii) any material Order of any Governmental Body applicable to the Company or by which the Company is bound or (iv) any applicable Law in any material respect.

          (b) No consent, waiver, approval, Order, Permit or authorization of, or filing with, or notification to, any Person or Governmental Body is required on the part of the Company in connection with the execution and delivery of this Agreement, the compliance by the Company with any of the provisions hereto, or the consummation of the transactions contemplated hereby and thereby, except for (i) compliance with the applicable requirements of the HSR Act and (ii) the filing with the SEC of a proxy statement in definitive form relating to the meeting of Shareholders to be held in connection with this Agreement and the transactions contemplated by this Agreement (as amended or supplemented, the “ Proxy Statement ”).

     5.5 Capitalization; Owners of Shares .

          (a) The authorized capital stock of the Company consists of one hundred million (100,000,000) shares of Common Stock of which forty-two million two hundred thirteen thousand six hundred ninety-one (42,213,691) shares of Common Stock are issued and outstanding, all of which are duly authorized, validly issued, fully paid and nonassessable, and five million (5,000,000) shares of Preferred Stock of which two hundred thousand (200,000) shares have been designated as Series A Participating Preferred Stock and the remaining four million eight hundred thousand (4,800,000) shares are undesignated. Zero (0) shares of Series A Participating Preferred Stock are issued and outstanding, all of which are duly authorized, validly issued, fully paid and nonassessable. Except as set forth in Section 5.5(b) , no other shares of Common Stock have been reserved for any purpose.

          (b) Except for the Company Equity Incentive Plans neither the Company nor any of its Subsidiaries has ever adopted, sponsored or maintained any stock option plan or any other plan or agreement providing for equity compensation to any Person. Each Company Equity Incentive Plan has been duly authorized, approved and adopted by the Company’s Board of Directors and the Shareholders and is in full force and effect. The Company has reserved a total of 11,639,674 shares of the Company Common Stock for issuance under all of the Company Equity Incentive Plans, of which as of the date hereof (i) 5,358,959 shares are issuable upon the exercise of outstanding, unexercised Company Options, (ii) 4,429,237 shares are available for grant but have not yet been granted pursuant to the Company Equity Incentive Plans, and (iii) 5,358,959 shares have been issued and are outstanding pursuant to the prior exercise of stock options or other stock rights granted pursuant to the Company Equity Incentive Plans. No

          (b) Each of the Chief Executive Officer and Chief Financial Officer of the Company has made all certifications required by Rules 13a-14 and 15d-14 under the Exchange Act and Sections 302 and 906 of the Sarbanes-Oxley Act with respect to the applicable Company Reports filed prior to the date hereof (collectively, the “ Certifications ”), and the statements contained in such Certifications are accurate in all material respects as of the filing thereof.

          (c) The Company has made available to Acquiror all of the Company Financial Statements. All of the Company Financial Statements comply with applicable requirements of the Exchange Act and have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto) and fairly present the consolidated financial position of the Company at the respective dates thereof and the consolidated results of its operations and changes in cash flows for the periods indicated (subject, in the case of unaudited statements, to normal year-end audit adjustments consistent with GAAP).

          (d) The Company has implemented and maintains a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. The Company has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) designed to ensure that information relating to the Company, including its consolidated Subsidiaries, required to be disclosed in the reports the Company files or submits under the Exchange Act is made known to the Chief Executive Officer and the Chief Financial Officer of the Company by others within those entities.

          (e) The Company is, and since December 31, 2004 has been, in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act.

          (f) The Company has adopted a code of ethics, as defined by Item 406(b) of Regulation S-K promulgated under the Exchange Act, for senior financial officers, applicable to its principal financial officer, comptroller or principal accounting officer, or Persons performing similar functions. The Company has promptly disclosed, by filing a Form 8-K, any change in or waiver of the Company’s code of ethics, as required by Section 406(b) of Sarbanes-Oxley Act. To the Company’s Knowledge, there have been no violations of provisions of the Company’s code of ethics.

          (g) There are no outstanding loans or other extensions of credit made by the Company or any of its Subsidiaries to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of the Company. The Company has not, since the enactment of the Sarbanes-Oxley Act, taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.

          (h) There are no Liabilities of the Company or any of its Subsidiaries of any kind whatsoever, whether or not accrued and whether or not contingent or absolute, that are material to the Company, other than (i) Liabilities disclosed and provided for in the Company Balance Sheet or in the notes thereto; or (ii) Liabilities incurred in the Ordinary Course of Business consistent with past practice since the date of the Company Balance Sheet, none of which are material to the Company in amount or significance; or (iii) Liabilities incurred on behalf of the Company under this Agreement.

     5.7 Absence of Certain Developments .

     Except for the transactions contemplated hereby, since December 31, 2006 the Company has not:

          (a) suffered a Material Adverse Effect;

          (b) incurred any material Liability or entered into any other transaction except in the Ordinary Course of Business;

          (c) suffered any material adverse change in its relationship with any of the suppliers, customers, distributors, lessors, licensors, licensees or other third parties that are material to the Company;

          (d) increased the rate or terms of compensation or benefits payable to or to become payable by it to its key employees or increased the rate or terms of any bonus, pension or other employee benefit plan covering any of its key employees, except in each case increases consistent with past business practice occurring in the Ordinary Course of Business (including normal periodic performance reviews and related compensation and benefits increases);

          (e) waived any claim or rights of material value other than in the Ordinary Course of Business;

          (f) sold, leased, licensed or otherwise disposed of any of its material assets, other than in the Ordinary Course of Business;

          (g) entered into any transaction or Material Contract other than in the Ordinary Course of Business;

          (h) made any capital expenditure in excess of One Hundred Thousand and No/100 Dollars ($100,000.00);

          (i) adopted or amended any Employee Plan;

          (j) made any adjustment or change in the price or other change in the terms of any options, warrants or convertible securities of the Company (including the Company Options, but excluding any adjustments required by contractual terms and reflected in Schedule 5.5(b) );

          (k) made any material payments for purposes of settling any disputes;

          (l) split, combined, or reclassified any of its outstanding shares, or repurchased, redeemed or otherwise acquired any of shares of capital stock, or declared or paid any dividend on its capital stock;

          (m) entered into any Contract pursuant to which any other Person is granted exclusive marketing or other exclusive rights in, or to, Intellectual Property of the Company;

          (n) other than related to the implementation of FIN No. 48, changed the accounting or Tax reporting principles, methods or policies; or

          (o) committed pursuant to a legally binding agreement to do any of the things set forth in clauses (a) through (n) above.

     5.8 Litigation .

     There are no Legal Proceedings pending or, to the Company’s Knowledge, material Legal Proceedings threatened against Company, or which question the validity or enforceability of this Agreement or any action contemplated herein. The Company is not operating under or subject to, or in default with respect to any Order of any Governmental Body. Schedule 5.8 , sets forth all agreements entered into by the Company since January 1, 2005 settling or otherwise terminating actions, suits, claims, governmental investigations or arbitration proceedings against the Company, or which question the validity or enforceability of this Agreement or any action contemplated herein.

     5.9 Compliance with Laws; Permits .

          (a) The Company has complied and is in compliance in all material respects with all Laws applicable to the Company. Since January 1, 2004, the Company has not been cited, fined or otherwise notified of any asserted past or present failure to comply, in any material respect, with any Laws and, to the Company’s Knowledge, no investigation or proceeding with respect to any such violation is pending or threatened.

          (b) The Company currently has all governmental approvals, authorizations, consents, licenses, permits and certificates required for the operation of the Company (the “ Permits ”) as presently conducted in the Ordinary Course of Business, other than those the failure of which to possess is immaterial. All Permits are valid and in full force and effect, the Company is in compliance with their requirements, and the Company is not in default or violation (and no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation), in any material respect of any term, condition or provision of any Permit, and no proceeding is pending or, to the Company’s Knowledge, threatened to revoke or amend any of the Permits.

     5.10 Real Property Leases .

          (a) The Company does not own real property, nor has the Company ever owned any real property. Schedule 5.10(a) sets forth a list of all real property and interests in real property currently leased by the Company which referred to herein as the “ Real Property Leases .” The Company has a valid and enforceable leasehold interest under each of the Real Property Leases, free and clear of all Encumbrances other than the Permitted Encumbrances. Each of the Real Property Leases is in full force and effect, and the Company has not received or given any written notice of any default or event that with notice or lapse of time, or both, would constitute a material default by the Company under any of the Real Property Leases and, to the Company’s Knowledge, no other party is in material default thereof. The Company has delivered or otherwise made available to Acquiror true, correct and complete copies of all Real Property Leases, together with all amendments, modifications or supplements, if any, thereto.

          (b) All of the leased real property, buildings, fixtures and improvements owned or leased by the Company which are material to the Company are in reasonable good operating condition and repair (subject to normal wear and tear) and have been maintained in reasonably good operating condition in the Ordinary Course of Business in a manner consistent with past maintenance practices of the Company.

     5.11 Personal Property .

          (a) Schedule 5.11(a) sets forth all leases of personal property to which the Company is a party as of the date hereof involving annual payments in excess of $10,000 (the “ Leased Personal Property ”). The Company has not received or given any written notice of any default or event that with notice or lapse of time or both would constitute a material default by the Company under any lease entered into in connection with the Leased Personal Property and, to the Company’s Knowledge, no other party is in material default or default thereunder.

          (b) All tangible personal property which is material in the operation of the Company has been maintained in reasonable operating condition in the Ordinary Course of Business in a manner consistent with past maintenance practices of the Company. The Company has good and valid title to, or a valid leasehold interest in, all of the tangible properties and assets which it purports to own or lease. All properties and assets reflected in the Company Balance Sheet are free and clear of all Encumbrances, other than Permitted Encumbrances.

     5.12 Material Contracts .

          (a) Schedule 5.12(a) lists each Contract to which the Company is a party or by which the Company, or any of its assets, is bound, except for non-customer Contracts pursuant to which the obligations, of either party thereto are, or are contemplated to be, One Hundred Thousand and No/100 Dollars ($100,000) or less (each, a “ Material Contract ”), including without limitation the following Material Contracts:

               (i) Contracts with any Affiliate or current or former officer or director of the Company (other than Contracts made in the Ordinary Course of Business on terms generally available to similarly situated non-affiliated parties);

               (ii) Contracts with any labor union or association representing any Employees;

               (iii) Contracts relating to incurrence of Indebtedness, or the making of any loans, in each case involving amounts in excess of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00);

               (iv) Dealer, distributor, reseller, OEM, VAR, joint marketing or joint development Contract that cannot be canceled without penalty upon notice of ninety (90) days or less;

               (v) Contract that limits the freedom of the Company to compete in any line of business or with any Person in any area;

               (vi) Contracts (other than Contracts made in the Ordinary Course of Business) which involve the expenditure of more than One Million and No/100 Dollars ($1,000,000.00) in the aggregate or require performance by any party more than one (1) year from the date hereof that, in either case, are not terminable by the Company without penalty on notice of one hundred eighty (180) days or less;

               (vii) Other Contract not made in the Ordinary Course of Business that is material to the Company’s Business as conducted and as proposed to be conducted on the date hereof;

               (viii) Contracts with customers which involve the annual receipt of more than One Hundred Thousand and No/100 Dollars ($100,000); and

               (ix) The CareScience SPA.

          (b) Each Material Contract is legal, valid, binding on the Company, enforceable and in full force and effect (except as such enforceability may be subject to Laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of Law governing specific performance, injunctive relief or other equitable remedies) and to the Company’s Knowledge, each Material Contract will continue to be legal, valid, binding on the other parties thereto, enforceable and in full force and effect on identical terms following the consummation of the transactions contemplated by this Agreement and following delivery of any consents or approval contemplated hereby.

          (c) The Company has not received any written notice of any default or event that with notice or lapse of time or both would constitute a material default by the Company under any Material Contract.

     5.13 Labor and Employment .

          (a) Collective Bargaining . There are no collective bargaining or other labor union agreements to which the Company is a party and there are no labor or collective bargaining agreements which pertain to the Employees. There is no union organization activity involving any of the Employees pending or, to the Company’s Knowledge, threatened, nor has there ever been union representation involving any of the Employees. There are no strikes, slowdowns, lockdowns, arbitrations, work stoppages or material grievances or other labor disputes pending or, to the Company’s Knowledge, threatened or reasonably anticipated between the Company and (i) any current or former employees of the Company or (ii) any union or other collective bargaining unit representing such employees. There has been no “mass layoff” or “plant closing” (as defined by WARN) with respect to the Company since January 1, 2005.

          (b) Employment Terms . Schedule 5.13(b) is a true and complete list containing the names and positions of all Employees as of the date hereof, together with (i) each Employee’s current annual salary or wage, (ii) the amount and date of any scheduled salary increase for each Employee, (iii) commissions due and draws outstanding for each Employee and (iv) other advances or receivables owing to the Company from each Employee.

          (c) The Company has the right to terminate the employment of each of its Employees at will and to terminate the engagement of any of its independent contractors without payment to such Employee or independent contractor other than for services rendered through termination and without incurring any penalty or Liability.

          (d) The Company is in compliance, in all material respects, with all Laws relating to employment practices.

          (e) Since January 1, 2002, the Company has not experienced any labor problem that was or is material to it. To the Company’s Knowledge, the Company’s relations with its employees are currently on a good and normal basis.

          (f) No severance or other payment (including any retention bonus) to an Employee will become due or Employee benefits or compensation increase or accelerate as a result of the transactions contemplated by this Agreement, solely or together with any other event, including a subsequent termination of employment and Schedule 5.13(f) sets forth the name of each related agreement or plan, the Employee or Employees covered thereby and the amounts to be payable thereunder, with any of the foregoing relating to employees of CareScience or the CareScience SPA being separately identified as such. Each Employee entitled to any payment under the Executive Transaction Bonus Plan, effective as of August 31, 2006 in connection with the transactions contemplated by this Agreement and the CareScience SPA has executed a letter agreement in the form of Exhibit C , and such letter agreement is the valid, binding and enforceable obligation of such Employee.

     5.14 Pension and Benefit Plans .

     The Company hereby represents and warrants to Acquiror that:

          (a) Schedule 5.14(a) contains a correct and complete list identifying each material “employee benefit plan,” as defined in Section 3(3) of ERISA, each employment, severance, change in control or similar contract, plan, arrangement or policy and each other plan or arrangement providing for compensation, profit-sharing, stock option or other stock-related rights or other forms of incentive or deferred compensation, insurance (including any self-insured arrangements), health or medical benefits, disability or sick leave benefits, post-employment or retirement benefits and fringe benefits (each, an “ Employee Plan ”) which is maintained, administered or contributed to by the Company or any ERISA Affiliate and covers any Employee or Former Employee of the Company or any ERISA Affiliate. Copies of such plans and arrangements (and, if applicable, related trust or funding agreements or insurance policies) and all amendments thereto and written interpretations thereof have been furnished to Acquiror. Such plans are referred to collectively herein as the “ Employee Plans .”

          (b) None of the Company, any of its ERISA Affiliates and any predecessor thereof sponsors, maintains or contributes to, or has in the past sponsored, maintained or contributed to, any Employee Plan subject to Title IV of ERISA or any defined benefit plan.

          (c) None of the Company, any ERISA Affiliate of the Company and any predecessor thereof contributes to, or has in the past contributed to, any Multiemployer Plan, as defined in Section 3(37) of ERISA (a “ Multiemployer Plan ”).

          (d) There is no current or projected Liability in respect of post-employment or post-retirement health or medical or life insurance benefits for retired, former or current Employees, except as required to avoid excise tax under Section 4980B of the Code.

          (e) As to all Employees Plans:

          (i) all such Plans comply and have been administered in all material respects in form and in operation with all applicable Laws, all required returns (including without limitation information returns) have been prepared in accordance with all applicable Laws and have been timely filed in accordance with applicable Laws, and neither the Company nor any ERISA Affiliate has received any outstanding written notice from any Governmental or quasi-Governmental Body questioning or challenging such compliance;

          (ii) all Employee Plans intended to comply with Section 401 of the Code are maintained by the Company in form and in operation with all applicable requirements of the Code and ERISA, a favorable determination letter has been received from the Internal Revenue Service with respect to each such Plan (or the sponsor of the Plan is entitled to rely on a favorable opinion letter issued to the Plan’s prototype sponsor by the Internal Revenue Service) and no event, to the Company’s Knowledge, has occurred that will or could reasonably be expected to give rise to disqualification of any such Plan or to a tax under Section 511 of the Code;

          (iii) to the Company’s Knowledge, there are no non-exempt “prohibited transactions” (as described in Section 406 of ERISA or Section 4975 of the Code) with respect to any Employee Plan and neither the Company nor any of its ERISA Affiliates has otherwise engaged in any prohibited transaction; and

          (iv) there have been no acts or omissions by the Company or any ERISA Affiliate that have given rise to or could reasonably be expected to give rise to material fines, penalties, taxes or related charges under Sections 502(c) or 502(i) of ERISA or Chapter 43 of the Code for which the Company or any ERISA Affiliate may be liable and neither the Company nor any ERISA Affiliate nor, to the Company’s Knowledge, any of their respective directors, officers, employees or any other fiduciary has committed any breach of fiduciary responsibility imposed by ERISA that would subject the Company or any ERISA Affiliate or any of their respective directors, officers or employees to liability under ERISA.

     (f) All individuals considered by the Company or any ERISA Affiliate to be independent contractors are, and could only be reasonably considered to be, in fact “independent contractors” and are not “employees” or “common law employees” for tax, benefits, wage, labor or any other legal purpose.

     (g) No Employee is entitled to, nor shall any Employee accrue or receive, additional benefits, services, accelerated rights to payment of benefits or accelerated vesting, whether pursuant to any Employee Plan or otherwise, including the right to receive any parachute payment as defined in Section 280G of the Code, or become entitled to severance,

termination allowance or other similar payments as a result of this Agreement and the transactions contemplated hereunder.

     (h) All options that have been granted by the Company to Employees that purport to be “incentive stock options” under the Code comply with all applicable requirements necessary to qualify for such tax status, and no option is subject to the provisions of Section 409A of the Code.

     5.15 Taxes and Tax Matters .

          (a) The Company and each Subsidiary has:

               (i) paid or caused to be paid all Taxes required to be paid by it (including but not limited to any Taxes shown due on any Tax Return); and

               (ii) filed or caused to be filed all Tax Returns required to be filed by it with the appropriate taxing authority in all jurisdictions in which such Tax Returns are required to be filed (and all Tax Returns filed on behalf of the Company were true, complete and correct).

          (b) Neither the Company nor any Subsidiary has been notified by the IRS or any other taxing authority that any issues have been raised by the IRS or any other taxing authority in connection with (A) any Taxes owed by the Company or any Subsidiary or (B) any Tax Return filed by or on behalf of the Company or any Subsidiary.

          (c) There are no pending Tax audits and no waivers of statutes of limitations have been given or requested with respect to the Company or any Subsidiary.

          (d) There are no Encumbrances on the assets of the Company or any Subsidiary with respect to Taxes, except for Encumbrances for current Taxes not yet due and payable for which adequate reserves have been provided for in the latest balance sheet of the Company.

          (e) No unresolved deficiencies or additions to Taxes have been proposed, asserted, or assessed against the Company or any Subsidiary and no claim has been made during the past five (5) years by any Governmental Body in a jurisdiction where neither the Company nor any of its Subsidiaries filed Tax Returns or paid Taxes that it is or may be subject to any taxation by that jurisdiction.

          (f) The charges, accruals and reserves for Taxes (rather than any reserve for deferred Taxes established to reflect timing difference between book and Tax income), reflected in the most recent balance sheet of the Company (rather than any notes thereto) are adequate in all material respects to cover all unpaid Taxes of the Company and the Subsidiaries. All reserves for Taxes as adjusted for operations and transactions and the passage of time through the Effective Time in accordance with past custom and practice of the Company and the Subsidiaries are adequate to cover all unpaid Taxes of the Company and the Subsidiaries accruing through the Effective Time.

          (g) The Company and each Subsidiary has complied in all material respects with all applicable requirements relating to the collection or withholding of Taxes (such as sales Taxes or withholding of Taxes from the wages of employees).

          (h) Neither the Company nor any Subsidiary has any Liability in respect of any tax sharing agreement with any Person.

          (i) Neither the Company nor any Subsidiary has agreed to (nor has any other Person agreed to on its behalf), and neither the Company nor any Subsidiary is required to, make any adjustments or changes, to its accounting methods pursuant to Section 481 of the Code, and the IRS has not proposed any such adjustments or changes in the accounting methods of such Persons.

          (j) Neither the Company nor any Subsidiary will be required to include in income, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (A) “closing agreement” as described in Code Section 7121 (or any corresponding or similar provision of state, local or foreign income Tax Law), (B) open transaction or installment disposition made on or prior to the Closing Date, or (C) prepaid amount received on or prior to the Closing Date.

          (k) Neither the Company nor any of its Subsidiaries has participated or engaged in any transaction that constitutes a “reportable transaction” as such term is defined in Treasury Regulation Section 1.6011-4(b)(1) or any transaction that constitutes a “listed transaction” as such term is defined in Treasury Regulation Section 1.6011-4(b)(2).

          (l) Neither the Company nor any of its Subsidiaries have (A) ever been a member of a consolidated group of corporations (other than a group the common parent of which is the Company) and (B) any Liability for Taxes of any Person (other than the Company or any of its Subsidiaries) under Treasury regulation Section 1.1502-6 (or any similar state, local or foreign tax Law) as a transferee or successor, by contract or otherwise.

          (m) Neither the Company nor any Subsidiary is or has been a United States real property holding corporation (as defined in Section 897(c) (2) of the Code).

          (n) Other than as a result of the Merger, neither the Company nor any Subsidiary is subject to any limitation on the use of its Tax attributes under Section 382, 383, and 384 of the Code or Treasury Regulation Section 1.1502-15 or-21 (regarding separate return limitation years) or any comparable provisions of state or foreign law.

          (o) Neither the Company nor any Subsidiary has constituted a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock intended to qualify for tax-free treatment under Sections 355, 356, or 361 of the Code (A) in the two (2) years prior to the date of this Agreement (or will constitute such a corporation in the two (2) years prior to the Closing date) or (B) in a distribution that otherwise constitutes part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the Merger.

          (p) No claim has been made within the last three (3) years by any taxing authority in a jurisdiction in which the Company or any Subsidiary does not file Tax Returns that such Person is or may be subject to taxation by that jurisdiction.

          (q) The net operating losses as of December 31, 2006 of (i) the Company on a consolidated basis and (ii) CareScience separately, are as set forth on Schedule 5.15(q) .

     5.16 Environmental Matters .

     With respect to the properties required to be set forth in Schedule 5.10(a) , the Company is in material compliance with all Environmental Laws. Except as would not reasonably be expected to result in material Liability under Environmental Laws, to the Company’s Knowledge, there has been no Release of Hazardous Materials at, on, under or from the properties set forth in Schedule 5.10(a) . The Company has delivered to Acquiror copies of any non-privileged environmental reports, studies, analyses, tests, or monitoring in the Company’s possession pertaining to the environmental condition of the properties listed in Schedule 5.10(a) or concerning the Company’s compliance with Environmental Law.

     5.17 Intellectual Property .

          (a) Schedule 5.17(a) contains a correct and