Pharsight Corp (PHST)

TERMINATION, AMENDMENT AND WAIVER

Section 7.1 Termination. This Agreement may be terminated at any time prior to the Effective Time, by action taken or authorized by the board of directors of the terminating party or parties, and except as provided below, whether before or after the Requisite Stockholder Approval shall have been obtained:

(a) by mutual written agreement of Parent and the Company;

(b) by either Parent or the Company, if the Merger shall have not been consummated by March 31, 2009 (the “Termination Date”); provided, however, that the right to terminate this Agreement pursuant to this Section 7.1(b) shall not be available to any party hereto whose action or failure to fulfill any obligation under this Agreement has been the principal cause of or resulted in any of the conditions to the Merger set forth in Article VI having failed to be satisfied on or before the Termination Date and such action or failure to act constitutes a material breach of this Agreement;

(c) by either Parent or the Company, if consummation of the Merger would violate any nonappealable final order, decree or judgment (which the parties hereto shall have used their reasonable best efforts to resist, resolve or lift) of any Governmental Entity having competent jurisdiction;

(d) by either Parent or the Company, if: (i) the Company Stockholder Meeting (including any adjournments thereof) shall have been held and completed and the stockholders of the Company shall have taken a final vote on a proposal to adopt this Agreement, and (ii) the Requisite Stockholder Approval shall not have been obtained;

(e) by the Company, in the event that (i) the Company is not then in material breach of its covenants, agreements and other obligations under this Agreement, and (ii) Parent and/or Merger Sub shall have breached or otherwise violated any of their respective material covenants, agreements or other obligations under this Agreement, or any of the representations and warranties of Parent and Merger Sub set forth in this Agreement shall have become inaccurate, in either case that (A) would give rise to the failure of a condition set forth in Section 6.2(a) or Section 6.2(b) and (B) is not cured within thirty days after written notice thereof is received by Parent or is not capable of being cured by the Termination Date;

(f) by the Company, at any time prior to obtaining the Requisite Stockholder Approval, in accordance with, and subject to the terms and conditions of, Section 5.6(a), provided, that prior to or concurrent with such termination, the Company pays to Parent the Termination Fee, and any failure to pay such Termination Fee shall render the purported termination hereunder null and void;

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(g) by Parent, in the event that (i) Parent and Merger Sub are not then in material breach of their respective covenants, agreements and other obligations under this Agreement, and (ii) the Company shall have breached or otherwise violated any of its material covenants, agreements or other obligations under this Agreement, or any of the representations and warranties of the Company set forth in this Agreement shall have become inaccurate, in either case that (A) would give rise to the failure of a condition set forth Section 6.3(a) or Section 6.3(b) and (B) is not cured within thirty days after written notice thereof is received by the Company or is not capable of being cured by the Termination Date;

(h) by Parent, in the event that the Company shall have knowingly and intentionally materially breached any of its obligations under Section 5.1, Section 5.6, Section 5.7 or Section 5.14; or

(i) by Parent, in the event that (i) the Company Board or any committee of the Company Board shall have for any reason effected a Recommendation Change; (ii) the Company shall have entered into, or publicly announced its intention to enter into, a definitive agreement or an agreement in principle with respect to a Superior Proposal; or (iii) a tender or exchange offer for Company Common Stock that constitutes an Acquisition Proposal (whether or not a Superior Proposal) is commenced by a Person unaffiliated with Parent and, within ten (10) Business Days after the public announcement of the commencement of such Acquisition Proposal, the Company shall not have issued a public statement (and filed a Schedule 14D-9 pursuant to Rule 14e-2 and Rule 14d-9 promulgated under the Exchange Act) reaffirming the Company Board Recommendation and recommending that the Company Stockholders reject such Acquisition Proposal and not tender any shares of Company Common Stock into such tender or exchange offer. For purposes of this Agreement, “Business Day” shall mean any day, other than a Saturday, Sunday and any day which is a legal holiday under the laws of the State of California or is a day on which the SEC or banking institutions located in the City of San Francisco are authorized or required by Legal Requirements or other governmental action to close.

Section 7.2 Notice of Termination; Effect of Termination. Any termination of this Agreement under Section 7.1 will be effective immediately upon the delivery of a valid written notice of the terminating party to the other party hereto. In the event of the termination of this Agreement as provided in Section 7.1, this Agreement shall be of no further force or effect, except (a) as set forth in Section 5.2(a), Section 5.3, this Section 7.2, Section 7.3 and Article VIII, each of which shall survive the termination of this Agreement and (b) nothing herein shall relieve any party from liability for any willful breach of this Agreement. No termination of this Agreement shall affect the obligations of the parties contained in the Confidentiality Agreement, all of which obligations shall survive termination of this Agreement in accordance with their terms.

Section 7.3 Fees and Expenses.

(a) Except as otherwise set forth in this Agreement, all fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby, including fees and expenses of financial advisors, financial sponsors, legal counsel and other advisors, shall be paid by the party incurring such expenses whether or not the Merger is consummated.

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(b) If an Expense Reimbursement Event occurs, the Company shall pay Parent (by wire transfer of immediately available funds), within two (2) Business Days after the occurrence of such Expense Reimbursement Event, an amount equal to all of Parent’s, Merger Sub’s or their respective Affiliates’ documented out-of-pocket fees and expenses (including reasonable fees and expenses of their counsel) (“Expenses”) up to $500,000 actually incurred by them in connection with this Agreement and the transactions contemplated hereby including the arrangement of, obtaining the commitment to provide or obtaining any financing for such transactions.

(c) If a Payment Event occurs, the Company shall pay Parent (by wire transfer of immediately available funds), if, pursuant to clause (A) of the definition of Payment Event below, simultaneously with the occurrence of such Payment Event or, if pursuant to clause (B) of the definition of Payment Event below, within five (5) Business Days following such Payment Event, an amount equal to the Termination Fee; provided, that any payment of Expenses pursuant to Section 7.3(b) shall be credited against the fee payable pursuant to this Section 7.3(c).

(d) As used in this Agreement, the following terms have the following meanings:

(i) “Expense Reimbursement Event” means the termination of this Agreement pursuant to Section 7.1(b) or Section 7.1(d) if, prior to any such termination, an Acquisition Proposal shall have been made and not withdrawn.

(ii) “Payment Event” shall mean the termination of this Agreement pursuant to (A) Section 7.1(f), Section 7.1(h), Section 7.1(i)(i) or Section 7.1(i)(ii), or (B) Section 7.1(b), Section 7.1(d) or Section 7.1(i)(iii), if, in the case of this clause (B), (1) prior to any such termination, an Acquisition Proposal shall have been made and not withdrawn, and (2) within twelve (12) months following the date of such termination the Company shall have entered into a definitive agreement with respect to such Acquisition Transaction.

(iii) “Termination Fee” shall mean $1,800,000.

For purposes of this Section 7.3(d), each reference to “fifteen percent (15%)” in the definition of “Acquisition Transaction” shall be deemed to be references to “fifty percent (50%).”

(e) The Company acknowledges that the agreements contained in this Section 7.3 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, Parent would not have entered into this Agreement; accordingly, if the Company fails to pay in a timely manner the amounts due pursuant to this Section 7.3 and, in order to obtain such payment, Parent makes a claim that results in a judgment against the Company for the amounts set forth in this Section 7.3, the Company shall pay to Parent, in addition to the amount of such judgment, Parent’s reasonable costs and expenses (including reasonable attorneys’ fees and expenses) in connection with such suit, together with interest on the amounts set forth in this Section 7.3 at The Wall Street Journal prime rate in effect on the date such payment was required to be made.

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Section 7.4 Amendment. This Agreement may be amended by the parties hereto, by action taken or authorized by their respective boards of directors, at any time before or after approval and adoption of this Agreement by the stockholders of the Company, provided that after approval and adoption of this Agreement by the stockholders of the Company, no amendment shall be made which by requires further approval by the stockholders of the Company under applicable Legal Requirements without such further stockholder approval. This Agreement may not be amended except by execution of an instrument in writing signed on behalf of each of Parent, Merger Sub and the Company.

Section 7.5 Extension; Waiver. At any time prior to the Effective Time, any party hereto, by action taken or authorized by their respective board of directors, may, to the extent legally allowed: (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto; (b) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto; and (c) waive compliance with any of the agreements or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. Delay in exercising any right under this Agreement shall not constitute a waiver of such right.

TERMINATION, AMENDMENT AND WAIVER

Section 7.1 Termination. This Agreement may be terminated at any time prior to the Effective Time, by action taken or authorized by the board of directors of the terminating party or parties, and except as provided below, whether before or after the Requisite Stockholder Approval shall have been obtained:

(a) by mutual written agreement of Parent and the Company;

(b) by either Parent or the Company, if the Merger shall have not been consummated by March 31, 2009 (the “Termination Date”); provided, however, that the right to terminate this Agreement pursuant to this Section 7.1(b) shall not be available to any party hereto whose action or failure to fulfill any obligation under this Agreement has been the principal cause of or resulted in any of the conditions to the Merger set forth in Article VI having failed to be satisfied on or before the Termination Date and such action or failure to act constitutes a material breach of this Agreement;

(c) by either Parent or the Company, if consummation of the Merger would violate any nonappealable final order, decree or judgment (which the parties hereto shall have used their reasonable best efforts to resist, resolve or lift) of any Governmental Entity having competent jurisdiction;

(d) by either Parent or the Company, if: (i) the Company Stockholder Meeting (including any adjournments thereof) shall have been held and completed and the stockholders of the Company shall have taken a final vote on a proposal to adopt this Agreement, and (ii) the Requisite Stockholder Approval shall not have been obtained;

(e) by the Company, in the event that (i) the Company is not then in material breach of its covenants, agreements and other obligations under this Agreement, and (ii) Parent and/or Merger Sub shall have breached or otherwise violated any of their respective material covenants, agreements or other obligations under this Agreement, or any of the representations and warranties of Parent and Merger Sub set forth in this Agreement shall have become inaccurate, in either case that (A) would give rise to the failure of a condition set forth in Section 6.2(a) or Section 6.2(b) and (B) is not cured within thirty days after written notice thereof is received by Parent or is not capable of being cured by the Termination Date;

(f) by the Company, at any time prior to obtaining the Requisite Stockholder Approval, in accordance with, and subject to the terms and conditions of, Section 5.6(a), provided, that prior to or concurrent with such termination, the Company pays to Parent the Termination Fee, and any failure to pay such Termination Fee shall render the purported termination hereunder null and void;

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(g) by Parent, in the event that (i) Parent and Merger Sub are not then in material breach of their respective covenants, agreements and other obligations under this Agreement, and (ii) the Company shall have breached or otherwise violated any of its material covenants, agreements or other obligations under this Agreement, or any of the representations and warranties of the Company set forth in this Agreement shall have become inaccurate, in either case that (A) would give rise to the failure of a condition set forth Section 6.3(a) or Section 6.3(b) and (B) is not cured within thirty days after written notice thereof is received by the Company or is not capable of being cured by the Termination Date;

(h) by Parent, in the event that the Company shall have knowingly and intentionally materially breached any of its obligations under Section 5.1, Section 5.6, Section 5.7 or Section 5.14; or

(i) by Parent, in the event that (i) the Company Board or any committee of the Company Board shall have for any reason effected a Recommendation Change; (ii) the Company shall have entered into, or publicly announced its intention to enter into, a definitive agreement or an agreement in principle with respect to a Superior Proposal; or (iii) a tender or exchange offer for Company Common Stock that constitutes an Acquisition Proposal (whether or not a Superior Proposal) is commenced by a Person unaffiliated with Parent and, within ten (10) Business Days after the public announcement of the commencement of such Acquisition Proposal, the Company shall not have issued a public statement (and filed a Schedule 14D-9 pursuant to Rule 14e-2 and Rule 14d-9 promulgated under the Exchange Act) reaffirming the Company Board Recommendation and recommending that the Company Stockholders reject such Acquisition Proposal and not tender any shares of Company Common Stock into such tender or exchange offer. For purposes of this Agreement, “Business Day” shall mean any day, other than a Saturday, Sunday and any day which is a legal holiday under the laws of the State of California or is a day on which the SEC or banking institutions located in the City of San Francisco are authorized or required by Legal Requirements or other governmental action to close.

Section 7.2 Notice of Termination; Effect of Termination. Any termination of this Agreement under Section 7.1 will be effective immediately upon the delivery of a valid written notice of the terminating party to the other party hereto. In the event of the termination of this Agreement as provided in Section 7.1, this Agreement shall be of no further force or effect, except (a) as set forth in Section 5.2(a), Section 5.3, this Section 7.2, Section 7.3 and Article VIII, each of which shall survive the termination of this Agreement and (b) nothing herein shall relieve any party from liability for any willful breach of this Agreement. No termination of this Agreement shall affect the obligations of the parties contained in the Confidentiality Agreement, all of which obligations shall survive termination of this Agreement in accordance with their terms.

Section 7.3 Fees and Expenses.

(a) Except as otherwise set forth in this Agreement, all fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby, including fees and expenses of financial advisors, financial sponsors, legal counsel and other advisors, shall be paid by the party incurring such expenses whether or not the Merger is consummated.

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(b) If an Expense Reimbursement Event occurs, the Company shall pay Parent (by wire transfer of immediately available funds), within two (2) Business Days after the occurrence of such Expense Reimbursement Event, an amount equal to all of Parent’s, Merger Sub’s or their respective Affiliates’ documented out-of-pocket fees and expenses (including reasonable fees and expenses of their counsel) (“Expenses”) up to $500,000 actually incurred by them in connection with this Agreement and the transactions contemplated hereby including the arrangement of, obtaining the commitment to provide or obtaining any financing for such transactions.

(c) If a Payment Event occurs, the Company shall pay Parent (by wire transfer of immediately available funds), if, pursuant to clause (A) of the definition of Payment Event below, simultaneously with the occurrence of such Payment Event or, if pursuant to clause (B) of the definition of Payment Event below, within five (5) Business Days following such Payment Event, an amount equal to the Termination Fee; provided, that any payment of Expenses pursuant to Section 7.3(b) shall be credited against the fee payable pursuant to this Section 7.3(c).

(d) As used in this Agreement, the following terms have the following meanings:

(i) “Expense Reimbursement Event” means the termination of this Agreement pursuant to Section 7.1(b) or Section 7.1(d) if, prior to any such termination, an Acquisition Proposal shall have been made and not withdrawn.

(ii) “Payment Event” shall mean the termination of this Agreement pursuant to (A) Section 7.1(f), Section 7.1(h), Section 7.1(i)(i) or Section 7.1(i)(ii), or (B) Section 7.1(b), Section 7.1(d) or Section 7.1(i)(iii), if, in the case of this clause (B), (1) prior to any such termination, an Acquisition Proposal shall have been made and not withdrawn, and (2) within twelve (12) months following the date of such termination the Company shall have entered into a definitive agreement with respect to such Acquisition Transaction.

(iii) “Termination Fee” shall mean $1,800,000.

For purposes of this Section 7.3(d), each reference to “fifteen percent (15%)” in the definition of “Acquisition Transaction” shall be deemed to be references to “fifty percent (50%).”

(e) The Company acknowledges that the agreements contained in this Section 7.3 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, Parent would not have entered into this Agreement; accordingly, if the Company fails to pay in a timely manner the amounts due pursuant to this Section 7.3 and, in order to obtain such payment, Parent makes a claim that results in a judgment against the Company for the amounts set forth in this Section 7.3, the Company shall pay to Parent, in addition to the amount of such judgment, Parent’s reasonable costs and expenses (including reasonable attorneys’ fees and expenses) in connection with such suit, together with interest on the amounts set forth in this Section 7.3 at The Wall Street Journal prime rate in effect on the date such payment was required to be made.

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Section 7.4 Amendment. This Agreement may be amended by the parties hereto, by action taken or authorized by their respective boards of directors, at any time before or after approval and adoption of this Agreement by the stockholders of the Company, provided that after approval and adoption of this Agreement by the stockholders of the Company, no amendment shall be made which by requires further approval by the stockholders of the Company under applicable Legal Requirements without such further stockholder approval. This Agreement may not be amended except by execution of an instrument in writing signed on behalf of each of Parent, Merger Sub and the Company.

Section 7.5 Extension; Waiver. At any time prior to the Effective Time, any party hereto, by action taken or authorized by their respective board of directors, may, to the extent legally allowed: (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto; (b) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto; and (c) waive compliance with any of the agreements or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. Delay in exercising any right under this Agreement shall not constitute a waiver of such right.