OMNICELL, Inc (Form: 10-K, Received: 03/11/2011 17:22:18)

Use these links to rapidly review the document
Table of Contents
PART IV

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K


(Mark One)
ý		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2010
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File No. 000-33043

OMNICELL, INC.
(Exact name of Registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		94-3166458 (IRS Employer Identification No.)

1201 Charleston Road
Mountain View, CA 94043
(650) 251-6100
(Address of registrant's principal executive offices, including zip code)

(650) 251-6100
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered

Common Stock, $0.001 par value		The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o		Accelerated filer ý		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

The aggregate market value of the registrant's common stock, $0.001 par value, held by non-affiliates of the registrant as of June 30, 2010 was $372.4 million (based upon the closing sales price of such stock as reported on The NASDAQ Global Select Market on such date) which excludes an aggregate of 782,320 shares of the registrant's common stock held by officers, directors and affiliated stockholders. For purposes of determining whether a stockholder was an affiliate of the registrant at June 30, 2010, the registrant has assumed that a stockholder was an affiliate of the registrant at June 30, 2010 if such stockholder (i) beneficially owned 10% or more of the registrant's common stock and/or (ii) was affiliated with an executive officer or director of the registrant at June 30, 2010. Exclusion of such shares should not be construed to indicate that any such person possesses the power, direct or indirect, to direct or cause the direction of the management or policies of the registrant or that such person is controlled by or under common control with the registrant.

As of March 3, 2011, there were 33,369,590 shares of the registrant's common stock, $0.001 par value, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive Proxy Statement for the 2011 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Form 10-K are incorporated by reference in Part III, Items 10-14 of this Form 10-K.

Table of Contents

OMNICELL, INC.

2010 Form 10-K Annual Report

Table of Contents



PART I
Item 1.	Business	3
Item 1A.	Risk Factors	16
Item 1B.	Unresolved Staff Comments	29
Item 2.	Properties	29
Item 3.	Legal Proceedings	30
Item 4.	[Removed and Reserved]	31
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	32
Item 6.	Selected Financial Data	34
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	36
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 8.	Financial Statements and Supplementary Data	50
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	51
Item 9A.	Controls and Procedures	51
Item 9B.	Other Information	54
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	55
Item 11.	Executive Compensation	55
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	56
Item 13.	Certain Relationships, Related Transactions and Director Independence	56
Item 14.	Principal Accountant Fees and Services	56
PART IV
Item 15.	Exhibits and Financial Statement Schedules	57
	Reports of Independent Registered Public Accounting Firm	F-1
OTHER
Signatures		S-1

Table of Contents

PART I

ITEM 1. BUSINESS

This Annual Report on Form 10-K contains forward-looking statements. The forward-looking statements are contained principally in the sections entitled "Business," "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations." These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

•: the extent and timing of future revenues, including the amounts of our current backlog, which represents firm orders that have not completed installation and therefore have not been recognized as revenue;
•: the size or growth of our market or market share;
•: the opportunity presented by new products or emerging markets;
•: our expectations regarding our future backlog levels;
•: our ability to align our cost structure and headcount with our current business expectations;
•: the operating margins or earnings per share goals we may set;
•: our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others;
•: our ability to generate cash from operations and our estimates regarding the sufficiency of our cash resources; and
•: our ability to acquire companies, businesses, products or technologies on commercially reasonable terms and integrate such acquisitions effectively.

In some cases, you can identify forward-looking statements by terms such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will," "would" and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and uncertainties. We discuss many of these risks in this Annual Report on Form 10-K in greater detail in the section entitled "Risk Factors" under Part I, Item 1A below. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this Annual Report on Form 10-K. You should read this Annual Report on Form 10-K and the documents that we reference in this Annual Report on Form 10-K and have filed as exhibits, completely and with the understanding that our actual future results may be materially different from what we expect. All references in this report to "Omnicell, Inc.," "Omnicell," "our," "us," "we," or the "Company" collectively refer to Omnicell, Inc., a Delaware corporation, and its subsidiaries.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

We own various trademarks, copyrights and trade names used in our business, including the following: Omnicell®, the Omnicell logo, OmniRx®, OmniCenter®, OmniSupplier®, OmniBuyer®, SafetyStock®, WorkflowRx™, OmniLinkRx™, SecureVault™, SafetyMed®, Optiflex™, vSuite™, SinglePointe™, AnywhereRN™, Anesthesia Workstation™ ,Savvy™, Pandora®, Pandora Via™, and Executive Advisor™. This report also includes other trademarks, service marks and trade names of other companies. All other trade names used in this report are trademarks of their respective holders.

Table of Contents

Overview

We are a leading provider of automated solutions for hospital medication and supply management. Our healthcare automation solutions are designed to enable healthcare facilities to acquire, manage, dispense and administer medications and medical-surgical supplies, and are intended to enhance patient safety, reduce medication errors, improve workflow and increase operational efficiency. When used in combination, our products and services provide healthcare facilities with a comprehensive solution designed to enhance patient safety and improve operational efficiency. Approximately 2,300 hospitals utilize one or more of our products, of which more than 1,600 hospitals in the United States have installed our automated hardware/software solutions for controlling, dispensing, acquiring, verifying and tracking medications and medical and surgical supplies.

The medical industry has become increasingly aware that the human element of patient care inevitably creates the risk of medication administration errors. The Institute of Medicine, a non-profit, non-governmental arm of the National Academies, published a landmark report in 2006 that estimated 1.5 million medication errors are made each year in the United States. Acute care facilities are facing increasing medication regulatory controls that we believe cannot be adequately supported by manual tracking systems or partially automated systems. Nursing shortages add an additional challenge to acute care facilities to meet regulatory controls and improve patient safety while still providing adequate patient care. Healthcare reform in the United States is driving the need for further process efficiency to control costs. We provide solutions to help hospitals address these problems. Our systems provide a comprehensive medication control and dispensing solution starting from the point of entry into the hospital, through the central pharmacy, to the nursing station and, ultimately, to the patient's bedside. Our solutions utilize advanced, software-based medication control and tracking algorithms that interact with hardware security features, resulting in a system that provides both the pharmacist and the nurse real-time safety controls. Our solutions also go a step further by providing medication barcode verification at every step of the medication administration process, from entry to the hospital through to administration to a patient. Our systems enable our customers to reduce or eliminate inefficiencies such as manual tracking and reconciliations, nursing time spent in obtaining medications and inventory control and extraneous process steps.

Similar to our medication solutions, our medical and surgical supply systems provide acute care hospitals control over consumable supplies critical to providing quality healthcare. This solution provides inventory control software that is designed to ensure critical supplies are always stocked in the right locations. At the same time, usage tracking helps hospital administrators to ensure that money is not wasted on excessive stores of supplies and helps optimize reimbursement by improving charge capture. Our systems automate the tracking of activities in perioperative areas such as the operating room and catheter lab, including tracking implantable tissue grafts for additional patient safety and regulatory compliance.

Business Strategy

Our strategy is to provide comprehensive patient safety solutions for the medication and medical and surgical supply needs of our customers. We have developed innovative solutions that are designed to meet the needs of the clinicians who use them on a day-to-day basis. We are continually working to enhance our product and service offerings, and we maintain flexibility in system design and the installation process to meet our customers' evolving needs. To meet these needs, we strive to provide proprietary, innovative solutions that help our customers stay focused on their goal of providing quality healthcare. Our solutions are designed to provide everything the customer requires to install and maintain medication and medical and surgical supply control. We believe superior solutions include proactively anticipating and meeting customer needs, listening carefully to our customers' prospective issues and meeting and exceeding their installation and maintenance support expectations.

Table of Contents

Our goal of improving healthcare for everyone has led us to take certain steps in the development of our business and our long term approach to our market, such as:

•: Innovating products to address patient safety and cost-containment pressures facing healthcare facilities while improving clinician workflow and overall operating efficiency;
•: Incorporating a broad range of clinical input into our product solution development to accommodate needs ranging from those of stand-alone community hospitals to multi-hospital entities and Integrated Delivery Networks, or IDNs;
•: Developing new solutions to enhance our customers' existing systems and protect our customers' investments by preserving, leveraging and upgrading their existing information systems, as well as striving to provide integration of our products with the other healthcare information systems our customers use; and
•: Providing a full service, positive experience for our hospital customers in the solution sales process, the timing and implementation of our product installations and the responsiveness of our support services.

We have developed or acquired numerous technologies that provide long-term solutions for our customers. Our own product development activities have brought a number of innovative and proprietary products to the market. Our most recently announced solutions include Savvy, a mobile medication control solution that allows both tracking and physical control of medications to be extended to the patient bedside. Savvy is designed to save nursing time, improve workflow efficiency for both pharmacy and nursing departments, and can significantly improve the safety of the medication administration process. Additionally, we have introduced new solutions to track controlled substances in the central pharmacy and to provide advanced reporting and data analytics, including the identification of possible drug diverters. These solutions are integrated with our overall medical and surgical supply chain inventory management and charge capture systems.

In addition to our own development, we have acquired products that extend patient safety controls to a wider range of applications and departments in the hospital. These include products for the central pharmacy, the operating room, the catheterization lab, the nursing areas and the patient point of care. We believe the breadth of our portfolio of automation products makes our solutions more valuable to our customers, allowing hospital clinicians to automate and control more of the medication and medical and surgical supply distribution processes. Looking forward, we expect to offer products with an even greater ability to improve patient safety for our customers, both through internal development and through acquisitions.

Industry Background

The acute care market in the United States, where most of our sales occur, is comprised of approximately 6,400 hospitals and facilities with a total capacity of approximately 940,000 acute care beds. Our customers include single location community hospitals, government hospitals and regional and national entities.

The delivery of healthcare in the United States still relies on a significant number of manual and paper-based processes. Most hospitals have deployed at least some automation solutions, but few have deployed them throughout the institution. The use of manual and paper-based systems in many hospital departments today results in highly complex and inefficient processes for tracking and delivering medications and supplies. Over the past two decades, healthcare facilities have made relatively small proportional investments in information technology. In addition, many existing healthcare information systems are unable to support the modernization of healthcare delivery processes and address mandated patient safety initiatives. These factors have contributed to medical errors and unnecessary process costs across the healthcare sector.

Table of Contents

Healthcare providers and facilities are also affected by significant economic pressures. Demand for healthcare services continues to increase, driving shortages in the United States labor market for healthcare professionals, particularly nurses and pharmacists. Rising costs of labor, prescription drugs and new medical technology all contribute to increased spending. Governmental pressures surrounding healthcare reform have led to increased scrutiny of the cost and efficiency with which healthcare providers deliver their services. These factors, combined with the continuing consolidation in the healthcare industry, have significantly increased the need to improve the efficiency of healthcare professionals and to control costs.

Outside the United States, certain healthcare providers also are becoming increasingly aware of the benefits of automation. Many governmental and private entities look to the progress made over the last several years in the United States and are starting to invest significantly in information technology and automation. International growth in our industry is therefore expected to become significant over the next several years.

Key Industry Events and Reports

Reports by the Institute of Medicine, or IOM, the Food and Drug Administration, or FDA, and the Joint Commission for the Accreditation of Healthcare Organizations, also known as The Joint Commission, have increased public and healthcare industry awareness of the dangers caused by medication errors. Regulatory standards and industry guidelines, such as those published by the Institute for Safe Medication Practices, or ISMP, as well as the desire of healthcare organizations to provide premium quality service and avoid liability, have driven acute care facilities to prioritize investment in capital equipment to improve patient safety. Such reports and regulatory standards include:

•: In November 1999, the IOM issued a report that highlighted the prevalence of medical errors based on the results of more than 30 independent studies. The report indicated that medical errors are among the top ten causes of death in the United States and that medication errors specifically were responsible for more than an estimated 7,000 deaths in 1993.
•: In February 2001, the IOM issued a follow-up report that recommended increased investment in information technology as a means of reducing medical errors and improving the overall quality of patient care.
•: In January 2003, the IOM released a report urging private and public organizations to focus on quality-improvement efforts in 20 priority areas, including medication management.
•: On February 25, 2004, the FDA published a rule that requires linear barcodes on most prescription drugs. Drug manufacturers, re-packagers, re-labelers and private label distributors are subject to the rule. The FDA estimated that the barcode rule, once implemented, would result in a 50% reduction in medication errors, 500,000 fewer adverse drug events over the subsequent 20 years, $93 billion in cost savings and other economic benefits.
•: In 2004, The Joint Commission set medication management standard 2.20, which requires that "medications are properly and safely stored throughout the hospital." The Joint Commission audits all healthcare facilities seeking accreditation for proper medication handling control and reviews all exceptions to control procedures.
•: In June 2006, the IOM issued a report which augmented a series of reports issued between 1999 and 2005 and indicated that an estimated 1.5 million medication errors occur annually in the United States.
•: In 2008, and updated in 2009, the ISMP published guidelines for the Interdisciplinary Safe Use of Automated Dispensing Cabinets.

Table of Contents

These reports, and the general awareness of patient safety in the medical field, have created a heightened desire to implement solutions that mitigate risks and improve the quality of healthcare. Automated medication distribution systems have become the standard of care and hospitals throughout the country are seeking to implement the most robust medication safety solutions available. Top teaching hospitals are among the early adopters of our new technologies and our customers include 11 of the 14 Honor Roll Hospitals, as rated by US News and World Reports .

Healthcare Reform

In 2009, the U.S. government passed the American Reinvestment and Recovery Act, or ARRA, which provides for, among other things, the funding of incentives for healthcare organizations to implement Electronic Healthcare Records. ARRA establishes minimal requirements for electronic healthcare usage and provides incentives for electronic healthcare adoption through 2015 and penalties for non-adoption after 2015. In 2010, the U.S. Congress passed the Patient Protection and Affordable Care Act, which prescribes broad-based measures designed to provide healthcare to a greater percentage of the population as well as limiting the cost of providing healthcare. We believe that both ARRA and the Patient Protection and Affordable Care Act will drive the need for increased efficiency in providing healthcare without providing reductions in healthcare standards. We believe Omnicell products are well-positioned to obtain certification of some meaningful use criteria, as defined by the Office of National Coordinator, and to assist hospital organizations in achieving the goals of the new laws by allowing them to reduce process steps, to eliminate manual tracking, to reduce waste from expired medications and supplies, to track quality levels and to reduce errors that result in re-admissions.

Our Products and Services

We provide solutions that are designed to enable healthcare professionals to reduce medication errors and improve administrative controls, while simultaneously improving workflow and increasing a healthcare facility's operational efficiency. Our products are designed to enable our customers to enhance and improve the effectiveness of the medication-use process, the efficiency of the medical-surgical supply chain, overall patient care and clinical and financial outcomes of healthcare facilities. From the point at which a medication arrives at the receiving dock to the time it is administered, our systems are capable of storing, packaging, barcoding, ordering and issuing the medication, as well as providing information and controls on its use and reorder. Our medication-use product line includes systems for medication dispensing in acute care nursing departments, central pharmacy automation, physician order management and nursing workflow automation at the bedside. Our supply product lines provide healthcare facilities with cost data which enables detailed quantification of charges for payer reimbursement, inventory management, implant monitoring and timely reorder of supplies. These products range from industrial-grade software-driven carousels for managing large amounts of inventory in the central pharmacy to high-security closed-cabinet systems and software to open-shelf and combination solutions in the nursing unit, catheterization lab and operating room. Our combination medication-use and supply products allow the operating departments to store, track and dispense medications and supplies through a single system while optimizing the workflows for each type of medication or supply managed. We also provide services including customer education and training to help customers to optimize their use of our technology.

Medication Use Products

Our medication-use product line includes our OmniRx, SinglePointe, AnywhereRN, Anesthesia Workstation, WorkflowRx, SecureVault, OmniLinkRx, Savvy Mobile Carts and Pandora products. To provide our customers with end-to-end medication control, our product line incorporates barcode technology throughout. Our solutions incorporate third generation technology, which we believe is the most advanced on the market today. Medication control technology has evolved over the past 30 years.

Table of Contents

First generation technology provided secure electronic storage and dispensing of medications in distributed locations in the hospital but was only economically viable to deploy with the most frequently used drugs and controlled substances. Second generation technology added specific patient data, electronically transmitted from other hospital information systems that, when combined with information stored in Omnicell systems, guides clinicians to the medications needed to care for specific patients at specific times in the day. Second generation technology was still limited with respect to the number and type of medications that could be tracked. Third generation technology, which we provide in our SinglePointe solution, is able to track medication dispensing and dynamically manage up to 100% of medications specific to individual patients. Used in combination with the rest of our suite of medication use solutions, we believe that SinglePointe provides the highest level of medication management automation available in the market today. Each of the products in our medication-use solution suite is summarized in the table below.

Product	Use in Hospital	Description

OmniRx	Any nursing area in a hospital department that administers medications	Secure dispensing system that automates the management and dispensing of medications at the point of use.
SinglePointe	Any nursing area in a hospital department that administers medications	Software product for use in conjunction with the OmniRx product that controls medications on a patient-specific basis, allowing automated control of up to 100% of the medications used in a hospital.
AnywhereRN	Any nursing area in a hospital department that administers medications	Software that allows nurses to remotely operate automated dispensing cabinets from virtually any workstation in the hospital.
Pandora	Hospital central pharmacy and general hospital management	Advanced reporting and data analytics tools.
Savvy Mobile Carts	Any nursing area in a hospital department that administers medications	A mobile wireless computer and dispensing system that provides a mobile platform for hospital information systems and a convenient and secure method for nurses to move medication and supplies.
OmniLinkRx	Hospital central pharmacy	Prescription routing system that allows nurses and doctors to scan handwritten prescription orders for electronic delivery to pharmacists for approval and filling.
WorkflowRx	Hospital central pharmacy	Automated pharmacy storage, retrieval and packaging systems.
SecureVault	Hospital central pharmacy	Controlled substance barcode inventory management system.
Anesthesia Workstation	Operating room	Secure dispensing system for the management of anesthesia supplies and medications.

Nursing Floor Solutions

The OmniRx solution is the core of our medication control solutions. The OmniRx solution is a dispensing cabinet that automates the management and dispensing of medications at the point of use, featuring biometric fingerprint identification, advanced single-dose dispensing, barcode confirmation and a wide range of drawer modules enabling the establishment of various security levels. Software features of the OmniRx include patient profiling, notification of medications due, a variety of security features, waste management, clinical pharmacology and integration with an Internet browser for clinical reference information.

Table of Contents

The SinglePointe solution is a software extension to the OmniRx solution that allows pharmacists to automate the distribution of specially handled medications, enabling control of up to 100% of all medications through the automated dispensing system. The SinglePointe solution allows for patient-specific medication control which extends the benefits of automated medication distribution, including increased patient safety, consistency in tracking and inventory control, simplification of procedures and improved monitoring of controlled substances, to a broader range of the medication distribution process in the hospital.

The AnywhereRN solution is a software solution that allows nurses to operate the automated dispensing cabinets from virtually any remote workstation within the hospital. This software enables enhanced workflow for nurses such that they are no longer limited to being directly in front of the cabinet to perform certain medication administration functions. AnywhereRN is intended to reduce nurse distractions in the medication administration process as cabinet operations can be done in private or quieter areas. It is also intended to eliminate congestion at the cabinet by minimizing nurse queuing to withdraw medications.

The Pandora solution is comprised of reports and analytical software for medication diversion detection, customizable user options, hospital inventory management controls and point-of-care data analytics among other features designed to assist hospitals in their efforts to improve patient safety and regulatory compliance.

The Savvy Mobile Cart solution provides a mobile workstation for nurses, equipped with locking drawers for secure transportation of medications and patient supply items. This is a mobile medication control solution that allows both tracking and physical control of medications extended to the patient bedside. Savvy Mobile Cart is designed to provide efficient workflow support, allowing nurses to remotely access the automated dispensing cabinet utilizing AnywhereRN, saving nursing time and minimizing the risk of interruptions to enhance patient safety. This same mobile solution can be used to access hospital applications including electronic medical records and electronic medication administration records.

Central Pharmacy Solutions

The OmniLinkRx solution is a physician order software product that automates communication between nurses and the pharmacy. Used in the central pharmacy, the OmniLinkRx solution simplifies the communication of handwritten physician orders from remote nursing stations to the pharmacy.

The WorkflowRx solution is an automated storage, retrieval, inventory management and repackaging solution for the central pharmacy. It is designed to help pharmacists ensure that the right medications are stored in and retrieved from proper locations, both in the central pharmacy and in automated dispensing cabinets. The WorkflowRx solution is deployed on a storage and retrieval carousel, on a repackaging system or on both. Barcode administration through the WorkflowRx solution is designed to help ensure that medications are stocked correctly from their point of entry into the healthcare facility. Labeling medications with barcodes, using a repackaging system enables bedside medication administration solutions, such as the Savvy solution, to perform barcode checking at the patient bedside.

The SecureVault solution is a controlled substance barcode inventory management system. The SecureVault software, coupled with our automated dispensing technology, enables healthcare facilities to track, monitor and control the movement of controlled substances from the point of initial receipt from the wholesaler throughout internal distribution. The SecureVault solution maintains a perpetual item inventory and complete audit using integrated barcode technology with both fixed and portable scanners. Barcoded forms and labels may also be generated directly from the SecureVault system.

Table of Contents

Operating Room Solutions

The Anesthesia Workstation solution is a system for the management of anesthesia supplies and medications. The system is tailored for the workflow of the clinician working in the operating room. The Anesthesia TT solution is a fixed-position tabletop unit designed as a medication-only system.

Medical and Surgical Supply Products

Our medical and surgical supply products provide acute care hospitals control over consumable supplies critical to providing quality healthcare. These solutions provide inventory control software that is designed to ensure that critical supplies are always stocked in the right locations. At the same time, usage tracking helps hospital administrators to ensure that money is not wasted on excessive stores of supplies and helps optimize reimbursement by improving charge capture.

Implantable tissue and bone grafts can also be monitored and tracked for additional patient safety and regulatory compliance. The bone and tissue features are integrated with our overall medical and surgical supply chain inventory management and charge capture systems. These solutions are designed for use in the materials management department, the nursing unit and specialty areas such as the catheterization lab and the operating room. They integrate with other information management systems and utilize barcode technology extensively.

Our supply product line includes the Omnicell Supply Cabinet, Supply/Rx Combination Cabinet, Omnicell Tissue Center, OptiFlex SS, OptiFlex CL and OptiFlex MS. Each of the supply-line products is summarized in the table below.

Product	Use in Hospital	Description

Omnicell Supply Solution	Any nursing area in a hospital department that uses patient care supplies	Secure dispensing systems that automate the management and dispensing of medical and surgical supplies at the point of use.
Supply/Rx Combination Solution	Any nursing area in a hospital department that uses patient care supplies and administers medications	Secure dispensing systems that manage both supplies and medications from the same cabinets, using the same user interface screens, in medical and surgical units and specialty areas.
Omnicell Tissue Center	Perioperative areas of the hospital	Manages the chain of custody for bone and tissue specimens from the donor to the patient in the operating room.
OptiFlex SS	Perioperative areas of the hospital	Specialty modules for the perioperative areas.
OptiFlex CL	Procedure areas in the hospital including the Cardiac Catheterization Lab	Specialty modules for the cardiac catheterization lab and other procedure areas.
OptiFlex MS	Any nursing area in a hospital department that administers supplies	System for the management of medical and surgical supplies that provides the flexibility of utilizing barcode control in an open shelf environment.

Table of Contents

The Omnicell Supply Solution is a secure dispensing system that dispenses and tracks medical and surgical supplies at the point of use. Specialty modules are available for a variety of solutions to manage implants and medications used across the hospital as described below.

•: Supply/Rx Combination Solution is designed to manage medications and supplies in one versatile cabinet or group of cabinets. This solution allows each department to manage supplies and medications independently, while tracking transaction data, inventory, expenses and treatment costs through a single system.
•: Omnicell Tissue Center allows the operating room staff to manage the chain of custody for bone and tissue specimens from the donor to the patient in the operating room. This solution enables compliance with The Joint Commission, requirements and Association of Operating Room Nurses guidelines regarding the handling of tissue specimens.
•: OptiFlex SS manages supplies and preference cards in the perioperative areas whether the supplies are stored on open shelves or in automated dispensing cabinets. The preference-list system creates a unique barcode for each surgical case, based on physician, procedure, and patient and provides information on the case for data analysis, reporting and charge capture. The Suture Module is designed to be integrated into the Omnicell Supply Solution to secure, dispense and automatically track suture usage.
•: OptiFlex CL manages supplies and creates cases in the cardiac catheterization lab, interventional radiology, and other procedure areas. This solution allows real-time point of use data collection and accurate supply tracking regardless of whether supplies are stored on open shelves or in automated dispensing cabinets. It also improves cost management through automated charge capture and case profiling by physician. The Catheter Module is designed to be integrated into the Omnicell supply cabinet and allows hospitals to secure, dispense and electronically track accurate catheter usage. The Implant Tracking Module records expiration date, lot and serial number information to enable compliance with Joint Commission and FDA requirements regarding surgical implants in the event of a recall.
•: OptiFlex MS solution provides control over general medical and surgical supplies stored in open shelves or in automated dispensing cabinets.

Other Products and Services

Services. We provide services that include customer education and training and maintenance and support services, all provided on a time-and-material basis. We also provide fixed period service contracts to our customers for post-installation technical support with phone support, on-site service, parts and access to software upgrades. On-site service is provided by our field service team.

Omnicell Interface Software. Our interface software provides interface and integration between our medication-use products or our supply products and a healthcare facility's in-house information management systems. Interface software is designed to provide integration and communication of patient data, logistical data, inventory information, charge capture and billing information and other healthcare database information.

Sales and Distribution

We sell our medication dispensing and supply automation systems primarily in the United States and Canada. Approximately 97% of our product revenue for 2010 was generated in those markets. Our sales force is organized by geographic region in the United States and Canada. As of December 31, 2010, our combined direct, corporate and international distribution sales teams consisted of approximately 102 staff members. Nearly all of our direct sales team members have hospital capital equipment or clinical systems experience. All of our sales representatives sell the full breadth of the

Table of Contents

Omnicell product line. Our corporate sales team focuses on large Integrated Delivery Networks, or IDNs, Group Purchasing Organizations, or GPOs, and the U.S. government.

The sales cycle for our automation systems is long and can take in excess of twelve months. This is due in part to the cost of our systems and the number of people within each healthcare facility involved in the purchasing decision. To initiate the selling process, the sales representative generally targets the director of pharmacy, the director of materials management or other decision makers and is responsible for educating each group within the healthcare facility about the benefits of automation. We have contracts with several GPOs that enable us to sell our automation systems to GPO-member healthcare facilities. The primary advantage to customers who buy our products pursuant to a GPO agreement is that they benefit from pre-negotiated contract terms and pricing. The benefit to the GPO is the fee earned as a percentage of sales, which is paid by us. These GPO contracts are typically for multiple years with options to renew or extend for up to two years and some of which can be terminated by either party at any time. Our current GPO contracts include AmeriNet, Inc., Broadlane Inc., HealthTrust Purchasing Group, L.P., MedAssets Supply Chain Systems, Novation, LLC, Premier, Inc. and Resources Optimization & Innovation. We have also contracted with the U.S. General Services Administration, allowing the Department of Veteran Affairs, the Department of Defense and other Federal Government customers to purchase or lease our products.

We offer multi-year, non-cancelable lease payment terms to assist hospitals in purchasing our systems by reducing their cash flow requirements. We sell the majority of our multi-year lease receivables to third-party leasing finance companies, but we also maintain a certain portion of our leases in-house.

Our field operations representatives support our sales force by providing operational and clinical expertise prior to the close of a sale and during installation of our automation systems. This group assists the customer with the technical implementation of our automation systems, including configuring our systems to address the specific needs of each individual customer. After the systems are installed, on-site support is provided by our field service team and technical support group.

We offer telephone technical support through our technical support center in Illinois. The support center is staffed 24 hours a day, 365 days a year. We have found that approximately 60% of our customers' service issues can be addressed either over the phone or by our support center personnel utilizing their on-hand remote diagnostics tools. In addition, we utilize remote dial-in software that monitors customer conditions on a daily basis. We offer a suite of remote monitoring features, our vSuite service programs, which proactively monitor system status and alert service personnel to potential problems before they lead to system failure.

In addition, our international sales team handles sales, installation and service through distribution partners in Asia, Australia, Europe, the Middle East and South America. We have been involved in a growing number of new installations in international markets and expect to continue growing its business in light of the expected increase in global demand for hospital automation solutions.

We have not sold and have no future plans to sell our products either directly or indirectly to customers located in countries that are identified as state sponsors of terrorism by the U.S. Department of State, or those subject to economic sanctions and export controls.

Manufacturing and Inventory

Our manufacturing process allows us to configure hardware and software in unique combinations to meet a wide variety of individual customer requirements. Our manufacturing process consists primarily of the final assembly of components and of subassemblies which are assembled by third-party single source manufacturers. We and our partners test subassemblies and perform a comprehensive inspection to assure the quality and reliability of our products. While many components of our systems

Table of Contents

are standardized and available from multiple sources, certain components or subsystems are fabricated by a sole supplier according to our specifications and timing requirements.

Our arrangements with our contract manufacturers generally set forth quality, cost and delivery requirements, as well as manufacturing process terms, such as continuity of supply, inventory management, capacity flexibility, quality and cost management, oversight of manufacturing and conditions for the use of our intellectual property.

Our manufacturing organization procures components and schedules production based on the backlog of customer orders. Installation typically occurs between two weeks and nine months after the initial order is received, depending upon the customer's particular needs. We deploy a key operational strategy of operating with backlog levels that approximate the average installation cycle of our customers, which allows us to more efficiently manage our installation teams, improve production efficiencies, reduce inventory scrap and lower shipping costs.

Competition

The medication management and supply chain solutions market is intensely competitive. We compete directly with a number of companies and are affected by evolving and new technologies, changes in industry standards and dynamic customer requirements.

Our current direct competitors in the medication management and supply chain solutions market include CareFusion Corporation (which includes Pyxis Corporation), McKesson Automation Inc. (a business unit of McKesson Corporation), AmerisourceBergen Corporation (through its acquisition of MedSelect, Inc. and Automed), Talyst, Inc., Cerner Corporation, Emerson Electronic Co. (through its acquisitions of Flo Healthcare LLC, Lionville Systems, Inc. and medDispense), Stinger Medical, InfoLogix, Inc. Ergotron, Inc., Capso Solutions (through its acquisition of Artromick International, Inc.), Rubbermaid Medical Solutions (a business unit of Newell Rubbermaid Inc), WaveMark Inc., ParExcellence Systems, Inc., PhACTs LLC and Lawson Software, Inc.

We believe our products and services compare favorably with the offerings of our competitors, particularly with respect to proprietary technological advancements, system performance, system reliability, installation, applications training, service response time and service repair quality.

Intellectual Property and Proprietary Technology

We rely on a combination of patents, trademarks, copyright and trade secret laws, confidentiality procedures and licensing arrangements to protect our intellectual property rights.

We pursue patent protection in the United States and foreign jurisdictions for technology that we believe to be proprietary and that offers a potential competitive advantage for our products. Our issued patents relate to our "See & Touch" methodology used in our medication dispensing and supply automation systems, the use of locking and sensing lids with pharmacy drawers and the methods of restocking these drawers, and the use of guiding lights in the open matrix, locking lid and sensing lid pharmacy drawers. These patents also apply to our unit-dose mechanism and methods, the single-dose dispensing mechanism, the methods for restocking the single-dose drawers using exchange liners, certain methods for loading and unloading mobile carts, the method of use of scanners with a mobile cart, and certain methods for using radio frequency tags with storage items. Our patents expire at various times between 2013 and 2027.

All of our product system software is copyrighted and subject to the protection of applicable copyright laws. We intend to seek additional international and U.S. patents on our technology and to seek registration of our trademarks. We have obtained registration of Omnicell, the Omnicell logo, OmniRx, OmniCenter, OmniSupplier, OmniBuyer, SafetyStock, WorkflowRx, OmniLinkRx, SecureVault, SafetyMed, Optiflex, vSuite, SinglePointe, AnywhereRN, AnethesiaWorkstation, Savvy,

Table of Contents

Pandora, Pandora Via, Executive Advisor and trademarks through the U.S. Patent and Trademark Office. Trade secrets and other confidential information are also important to our business. We protect our trade secrets through a combination of contractual restrictions and confidentiality and licensing agreements.

Research and Development

We utilize industry standard operating systems and databases, but generally develop our own application and interface software in our research and development facilities. New product development projects are prioritized based on customer input. During 2010, we announced a new version of our central pharmacy solution software, WorkflowRx 7, the new Savvy Mobile Cart product, a new version of our Pandora reporting software, VIA 2.0, a new version of SecureVault, a partnership with Cardinal Health to interface with the CardinalASSIST automatic replenishment program, a partnership with Helmer to provide a new medical grade refrigerator product, and a partnership with RxScan to provide additional barcode verification.

Employees

As of December 31, 2010, we had a total of 753 employees, including 80 in manufacturing, 114 in research and development, 139 in sales, of which 102 comprise our combined direct, corporate and inside sales teams, 18 in sales administration and 19 in field operations who perform pre-sales activity, 149 in customer service, 139 in field operations, 37 in marketing and 95 in general and administration positions. During 2010 we gained efficiency through office consolidations and other organizational changes that allowed the expansion of our sales teams without any overall addition to headcount from 2009. We have rebalanced our staff as needed, at times eliminating some functional positions and at other times adding new functional-specific positions to meet the evolving needs of our marketplace. None of our employees is represented by a collective bargaining agreement, nor have we experienced any work stoppage. We believe that our employee relations are good.

Business Under Government Contracts

A number of our U.S. government-owned or government-run hospital customers sign five-year leases, with payment terms that are subject to one-year government budget funding cycles. Failure of any of our U.S. government customers to receive their annual funding could impair our ability to sell to these customers, or to collect payments on our existing unsold leases. For additional information regarding these leases, see Item 1A, "Risk Factors."

Financing Practices Relating to Working Capital

We assist healthcare facilities in financing their cash outlay requirements for the purchase of our systems by offering multi-year, non-cancelable sales contracts. For additional information regarding these financing activities, see Note 1 of "Notes to Consolidated Financial Statements" included in this Annual Report on Form 10-K.

Product Backlog

Product backlog is the dollar amount of medication and supply dispensing systems for which we have purchase orders from our customers and for which we believe we will install, bill and gain customer acceptance within one year. Due to industry practice that allows customers to change order configurations with limited advance notice prior to shipment and occasional customer changes in installation schedules, we do not believe that backlog as of any particular date is necessarily indicative of future sales. However, we do believe that backlog is an indication of a customer's willingness to

Table of Contents

install our solutions. As of December 31, 2010 and 2009, our backlog was $126.8 million and $113.6 million, respectively.

Company Information

We were incorporated in California in 1992 under the name of Omnicell Technologies, Inc. and reincorporated in Delaware in 2001 as Omnicell, Inc.

Available Information

We file reports and other information with the Securities and Exchange Commission, or SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy or information statements. Those reports and statements as well as all amendments to those documents filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act (1) are available at the SEC's Public Reference Room at 100 F Street, N.E., Room 1580, Washington, DC 20549, (2) are available at the SEC's internet site ( www.sec.gov ), which contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC and (3) are available free of charge through our website as soon as reasonably practicable after electronic filing with, or furnishing to, the SEC. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our website address is www.omnicell.com . Information on our website is not incorporated by reference nor otherwise included in this report.

Executive Officers of the Registrant

The following table sets forth certain information as of March 11, 2011 about our executive officers:

Name		Position

Randall A. Lipps	53	President, Chief Executive Officer, and Chairman of the Board of Directors
J. Christopher Drew	45	Senior Vice President, Field Operations
Robin G. Seim	51	Chief Financial Officer and Vice President Finance, Administration and Manufacturing
Dan S. Johnston	47	Vice President and General Counsel
Nhat H. Ngo	38	Vice President, Strategy and Business Development
Marga Ortigas-Wedekind	49	Vice President, Global Marketing and Product Development

Randall A. Lipps was named Chief Executive Officer and President of Omnicell in October 2002. Mr. Lipps has served as Chairman of the Board and a Director of Omnicell since founding Omnicell in September 1992. Mr. Lipps received both a B.S. in economics and a B.B.A. from Southern Methodist University.

J. Christopher Drew joined Omnicell in April 1994 and was named Senior Vice President, Operations in January 2005. In January 2009, Mr. Drew was named Senior Vice President, Field Operations. From April 1994 to January 2005, Mr. Drew served in various management positions with Omnicell, including Vice President of Branded Solutions and Director of Corporate Development. Mr. Drew received a B.A. in economics from Amherst College and an M.B.A. from the Stanford Graduate School of Business.

Robin G. Seim joined Omnicell in February 2006 as Vice President and was named Chief Financial Officer in March 2006. In January 2009, Mr. Seim was named Chief Financial Officer and Vice President Finance, Administration and Manufacturing. From March 2005 to December 2005, Mr. Seim served as Chief Financial Officer of Mirra, Inc., a developer of digital content protection products.

Table of Contents

From July 2001 to December 2004, Mr. Seim served as Chief Financial Officer of Candera, Inc., a maker of network-based storage controllers. From September 1999 to April 2001, Mr. Seim served as Chief Financial Officer of Villa Montage Systems, Inc., a provider of residential broadband access management systems. Prior to 1999, Mr. Seim held a number of management positions with Nortel Networks, Bay Networks, and IBM. Mr. Seim received a B.S. in accounting from California State University, Sacramento.

Dan S. Johnston joined Omnicell in November 2003 as Vice President and General Counsel. From April 1999 to November 2003, Mr. Johnston was Vice President and General Counsel at Be, Inc., a software company. From September 1994 to March 1999, Mr. Johnston was an attorney with the law firm Cooley LLP. Mr. Johnston received a B.S. in computer information systems from Humboldt State University and a J.D. from the Santa Clara University School of Law.

Nhat H. Ngo joined Omnicell in November 2008 as Vice President of Strategy and Business Development. From January 2007 to October 2008, Mr. Ngo served as Vice President of Business Development and Licensing for a business unit of Covidien, a global healthcare products company. From June 1999 to April 2006, Mr. Ngo worked at BriteSmile, Inc., a direct-to-consumer aesthetic technology company and served in a variety of senior leadership positions in marketing, sales, operations, strategic planning and corporate development. From May 2006 to December 2006 after the sale of BrightSmile, Inc., Mr. Ngo pursued personal interests, before resuming his career. From September 1997 to June 1999, Mr. Ngo practiced corporate law at Shaw Pittman. Mr. Ngo received a B.S. in commerce, with a concentration in finance, from the University of Virginia McIntire School of Commerce and a J.D. from the University of Virginia School of Law.

Marga Ortigas-Wedekind joined Omnicell in January of 2009 as Vice President, Marketing. In May 2009, she was named Vice President, Global Marketing and Product Development. From February 2002 to October 2008, Ms. Ortigas-Wedekind was the Senior Vice President Marketing, Development, and Clinical Affairs of Xoft, Inc., a medical device company. She continued to consult with Xoft, Inc. between her departure and the time she joined Omnicell. From February 2000 to December 2001, she served as Vice President of Sales and Marketing for ProDuct Health, (purchased by Cytyc Corporation) a company involved in early breast cancer diagnosis and risk stratification. From January 1990 to February 2000, she worked at Guidant Corporation's Vascular Intervention division, in various functions covering international and worldwide sales and marketing, culminating in the role of Director, Market Development. She received a B.A. in political economics from Wellesley College and an M.B.A. from the Stanford Graduate School of Business.

ITEM 1A. RISK FACTORS

We have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition or results of operations. Our business faces significant risks and the risks described below may not be the only risks we face. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations. If any of these risks occur, our business, results of operations or financial condition could suffer and the market price of our common stock could decline.

Unfavorable economic and market conditions, a decreased demand in the capital equipment market and uncertainty regarding the rollout of government legislation in the healthcare industry could adversely affect our operating results.

Our operating results have been and may continue to be adversely affected by unfavorable global economic and market conditions as well as a lessening demand in the capital equipment market. Customer demand for our products is significantly linked to the strength of the economy. If demand for capital equipment caused by weak economic conditions and decreased corporate and government spending, deferrals or delays of capital equipment projects, longer time frames for capital equipment purchasing decisions and generally reduced expenditures for capital solutions continues, we will experience decreased revenues and lower revenue growth rates and our operating results could be materially and adversely affected.

Table of Contents

Additionally, as the U.S. Federal government rolls out and implements recently enacted healthcare reform legislation, there may be an impact on our business. Healthcare facilities may decide to postpone or scale back spending until the implications of such healthcare reform legislation are more clearly understood, which may affect the demand for our products and harm our business.

The medication management and supply chain solutions market is highly competitive and we may be unable to compete successfully against new entrants and established companies with greater resources.

The medication management and supply chain solutions market is intensely competitive. We expect continued and increased competition from current and future competitors, many of which have significantly greater financial, technical, marketing and other resources than we do. Our current direct competitors in the medication management and supply chain solutions market include CareFusion Corporation (a spinoff from Cardinal Health, Inc., which includes Pyxis Corporation), McKesson Automation Inc. (a business unit of McKesson Corporation), AmerisourceBergen Corporation (through its acquisition of MedSelect, Inc. and Automed), Cerner Corporation, Emerson Electronic Co. (through its acquisitions of Flo Healthcare LLC, Lionville Systems, Inc. and medDispense), MDG Medical, PhACTs LLC, Talyst, Inc., Stinger Medical, Stanley Black and Decker (through their acquisition of InfoLogix, Inc),. Ergotron, Inc., Capso Solutions, (through their acquisition of Artromick International, Inc.), Rubbermaid Medical Solutions (a business unit of Newell Rubbermaid Inc), WaveMark Inc., ParExcellence Systems, Inc. and Lawson Software, Inc.

The competitive challenges we face in the medication management and supply chain solutions market include, but are not limited to, the following:

•: our competitors may develop, license or incorporate new or emerging technologies or devote greater resources to the development, promotion and sale of their products and services;
•: certain competitors have greater brand name recognition and a more extensive installed base of medication and supply dispensing systems or other products and services than we do, and such advantages could be used to increase their market share;
•: other established or emerging companies may enter the medication management and supply chain solutions market;
•: certain competitors may develop new features or capabilities for their products not previously offered that could compete directly with our products;
•: current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties, including larger, more established healthcare supply companies, thereby increasing their ability to develop and offer products and services to address the needs of our prospective customers; and
•: our competitors may secure products and services from suppliers on more favorable terms or secure exclusive arrangements with suppliers or buyers that may impede the sales of our products and services.

Competitive pressures could result in increased price competition for our products and services, fewer customer orders and reduced gross margins, any of which could harm our business.

Any reduction in the demand for or adoption of our medication and supply dispensing systems and related services would reduce our revenues.

Our medication and supply dispensing systems represent only one approach to managing the distribution of pharmaceuticals and supplies at healthcare facilities. A significant portion of domestic and international healthcare facilities still use traditional approaches in some form that do not include fully automated methods of medication and supply dispensing management. As a result, we must

Table of Contents

continuously educate existing and prospective customers about the advantages of our products, which requires significant sales efforts and can cause longer sales cycles. Despite our significant efforts and extensive time commitments in sales to healthcare facilities, we cannot be assured that our efforts will result in sales to these customers.

In addition, our medication and supply dispensing systems typically represent a sizeable initial capital expenditure for healthcare organizations. Changes in the budgets of these organizations and the timing of spending under these budgets can have a significant effect on the demand for our medication and supply dispensing systems and related services. These budgets are often supported by cash flows that can be negatively affected by declining investment income, and influenced by limited resources, increased operational and financing costs, macroeconomic conditions such as unemployment rates and conflicting spending priorities among different departments. Any decrease in expenditures by healthcare facilities could decrease demand for our medication and supply dispensing systems and related services and reduce our revenues.

Changing customer requirements could decrease the demand for our products and services and our new product solutions may not achieve market acceptance.

The medication management and supply chain solutions market is characterized by evolving technologies and industry standards, frequent new product introductions and dynamic customer requirements that may render existing products obsolete or less competitive. The medication management and supply chain solutions market could erode rapidly due to unforeseen changes in the features and functions of competing products, as well as the pricing models for such products. Our future success will depend in part upon our ability to enhance our existing products and services and to develop and introduce new products and services to meet changing customer requirements. The process of developing products and services such as those we offer is extremely complex and is expected to become increasingly more complex and expensive in the future as new technologies are introduced. If we are unable to enhance our existing products or develop new products to meet changing customer requirements, demand for our products could decrease.

In addition, we cannot assure you that we will be successful in marketing any new products or services, that new products or services will compete effectively with similar products or services sold by our competitors or that the level of market acceptance of such products or services will be sufficient to generate expected revenues and synergies with our other products or services. Deployment of new products or services often requires interoperability with other Omnicell products or services as well as with healthcare facilities' existing information management systems. If these products or services fail to satisfy these demanding technological objectives, our customers may be dissatisfied and we may be unable to generate future sales.

Our current and potential customers may have other business relationships with our competitors and consider those relationships when deciding between our products and services and those of our competitors.

Many of our competitors are large companies that sell a variety of products and services into the healthcare market to our current and potential customers and may be better positioned to sell products with similar functionality. As a result, if a potential customer is a customer of one of these competitors, the customer may be motivated to purchase medication and supply dispensing systems or other automation solutions from our competitor in order to maintain or enhance their business relationship with that competitor, regardless of the products' performance or capabilities.

Table of Contents

If we experience delays in installations of our medication and supply dispensing systems, or delays in the recognition of revenue associated with our medication and supply dispensing systems, our competitive position, results of operations and financial condition could be harmed.

The purchase of our medication and supply dispensing systems is often part of a customer's larger initiative to re-engineer its pharmacy, distribution and materials management systems and as a result, our sales cycles are often lengthy. The purchase of our medication and supply dispensing systems often entail larger strategic purchases by customers that frequently require more complex and stringent contractual requirements and generally involves a significant commitment of management attention and resources by prospective customers. These larger and more complex transactions often require the input and approval of many decision-makers, including pharmacy directors, materials managers, nurse managers, financial managers, information systems managers, administrators, lawyers and boards of directors. For these and other reasons, the sales cycle associated with the sale of our medication and supply dispensing systems is often lengthy and subject to a number of delays over which we have little or no control. A delay in, or loss of, sales of our medication and supply dispensing systems could have an adverse affect upon our operating results and could harm our business.

In addition, and in part as a result of the complexities inherent in larger transactions, the average time between the purchase and installation of our systems has increased over the past few years for reasons that are often outside of our control. Since we recognize revenue only upon installation of our systems at a customer's site, any delay in installation by our customers or delays in the determination that the earnings process is complete also causes a delay in the recognition of revenue for that system.

We may not be able to successfully integrate acquired businesses or technologies into our existing business, which could negatively impact our operating results.

As a part of our business strategy we may seek to acquire businesses, technologies or products in the future. On September 29, 2010, we acquired all of the outstanding capital stock of Pandora Data Systems, Inc. We cannot assure you that any acquisition or any future transaction we complete will result in long-term benefits to us or our stockholders, or that our management will be able to integrate or manage the acquired business effectively. Acquisitions entail numerous risks, including difficulties associated with the integration of operations, technologies, products and personnel that, if realized, could harm our operating results. Risks related to potential acquisitions include, but are not limited to:

•: difficulties in combining previously separate businesses into a single unit;
•: the substantial costs that may be incurred and the substantial diversion of management's attention from day-to-day business when evaluating and negotiating such transactions and then integrating an acquired business;
•: discovery, after completion of the acquisition, of liabilities assumed from the acquired business or of assets acquired that are broader in scope and magnitude or are more difficult to manage than originally assumed;
•: failure to achieve anticipated benefits such as cost savings and revenue enhancements;
•: difficulties related to assimilating the products of an acquired business; and
•: failure to understand and compete effectively in markets in which we have limited previous experience.

If we are unable to recruit and retain skilled and motivated personnel, our competitive position, results of operations and financial condition could be harmed.

Our success is highly dependent upon the continuing contributions of our key management, sales, technical and engineering staff. We believe that our future success will depend upon our ability to

Table of Contents

attract, train and retain highly skilled and motivated personnel. As more of our products are installed in increasingly complex environments, greater technical expertise will be required. As our installed base of customers increases, we will also face additional demands on our customer service and support personnel, requiring additional resources to meet these demands. We may experience difficulty in recruiting qualified personnel. Competition for qualified technical, engineering, managerial, sales, marketing, financial reporting and other personnel can be intense and we cannot assure you that we will be successful in attracting and retaining qualified personnel. Competitors have in the past attempted, and may in the future attempt, to recruit our employees.

In addition, we have historically used stock options and other forms of equity compensation as key components of our employee compensation program in order to align employees' interests with the interests of our stockholders, encourage employee retention and provide competitive compensation packages. The effect of managing share-based compensation expense may make it less favorable for us to grant stock options, or other forms of equity compensation, to employees in the future. In order to continue granting equity compensation at competitive levels, we must seek stockholder approval for any increases to the number of shares reserved for issuance under our equity incentive plans and we cannot assure you that we will receive such approvals. Any failure to receive approval for proposed increases could prevent us from granting equity compensation at market competitive levels and make it more difficult to attract, retain and motivate employees. Further, to the extent that we expand our business or product lines through the acquisition of other businesses, any failure to receive any such approvals could prevent us from securing employment commitments from such newly acquired employees. Failure to attract and retain key personnel could harm our competitive position, results of operations and financial condition.

If we are unable to make effective use of our increased sales staff, we will have higher expenses without the benefits of increased market penetration and profitable sales growth.

During the fourth quarter of 2010, we increased direct territory sales staff by 30%. We expect an increase in the sales productivity of these new hires as they are trained and begin to develop sales leads in their assigned territories, however, there is no guarantee that this increased sales staff will result in a proportional increase in new business. If we encounter obstacles to the effectiveness of our sales staff, we will adjust our efforts to support their success, and this may result in higher expenses without corresponding increases in market penetration or sales growth.

We have experienced substantial changes in our revenue levels and we cannot be sure that we will be able to respond proactively to future changes in customer demand.

Our revenue increased by $8.9 million or 4.2% to $222.4 million for the year ended December 31, 2010 compared to $213.5 million for 2009. However, revenues for the year ended December 31, 2009 declined by $38.4 million or 15.2% from $251.9 million in 2008.

Current macroeconomic and general market conditions have contributed to revenue volatility and an overall decline in our revenues from 2008 levels. Our ability to adjust to rapid reductions in our revenue while still achieving or sustaining profitability is dependent upon our ability to manage costs and control expenses. If macroeconomic and general market conditions improve and return to historical levels, our ability to grow revenue and profitably will also be dependent on our ability to continue to manage costs and control expenses. If our revenue increases rapidly, we may not be able to manage this growth effectively. Future growth is dependent on our ability to continue to receive orders from customers, the volume of installations we are able to complete, our ability to continue to meet our customers' needs and provide a quality installation experience and our flexibility in manpower allocations among customers to complete installations on a timely basis.

Table of Contents

Our expense control is dependent on our ability to continue to develop and leverage effective and efficient human and information technology systems, our ability to gain efficiencies in our workforce through the local and worldwide labor markets and our ability to grow our outsourced vendor supply model. Our expense growth rate may equal or exceed our revenue growth rate if we are unable to streamline our operations, or fail to reduce the costs or increase the margins of our products. In addition, we may not be able to reduce our expenses to keep pace with a reduction in our revenue, which could harm our results of operations and financial position.

Due to the lack of available credit opportunities, some of our customers may experience more difficulty in securing funds from third-parties to purchase our products, which could adversely affect the demand for our products or require us to extend credit terms to our customers.

Many of the products we sell and lease to our customers are capital equipment, and many of those customers finance their large capital equipment purchases or leases with funds secured from third-party lenders. Any deterioration in the general economic climate and in the credit market could make it more difficult for our customers to secure financing on large capital equipment transactions such as ours. To the extent that a tightening in the credit market results in difficulty for our customers in financing purchases or leases of our products from third-parties, demand for our products could decline and in order to sell our products, we may be required to extend credit to certain customers, which would negatively impact our cash balances, affect the classification of our short and long-term receivables and increase the risk of collections from such customers.

Our quarterly operating results may fluctuate and may cause our stock price to decline.

Our quarterly operating results may vary in the future depending on many factors that include, but are not limited to, the following:

•: our ability to successfully install our products on a timely basis and meet other contractual obligations necessary to recognize revenue;
•: the size, product mix and timing of orders for our medication and supply dispensing systems, and their installation and integration;
•: the overall demand for healthcare medication management and supply chain solutions;
•: changes in pricing policies by us or our competitors;
•: the number, timing and significance of product enhancements and new product announcements by us or our competitors;
•: the timing and significance of any acquisition or business development transactions that we may consider or negotiate and the revenues, costs and earnings that may be associated with these transactions;
•: the relative proportions of revenues we derive from products and services;
•: fluctuations in the percentage of sales attributable to our international business;
•: our customers' budget cycles;
•: changes in our operating expenses and our ability to stabilize expenses;
•: our ability to generate cash from our accounts receivable on a timely basis;
•: the performance of our products;
•: changes in our business strategy;

Table of Contents

•: macroeconomic and political conditions, including fluctuations in interest rates and tax increases; and
•: volatility in our stock price and its effect on share-based compensation expense.

Due to all of these factors, our quarterly revenues and operating results are difficult to predict and may fluctuate, which in turn may cause the market price of our stock to decline.

If we are unable to maintain our relationships with group purchasing organizations or other similar organizations, we may have difficulty selling our products and services.

Our current Group Purchasing Organization contracts include AmeriNet, Inc., Broadlane Inc., HealthTrust Purchasing Group, L.P., MedAssets Supply Chain Systems, Novation, LLC, Premier, Inc., and Resources Optimization & Innovation. We have also contracted with the U.S. General Services Administration, allowing the Department of Veteran Affairs, the Department of Defense and other Federal Government customers to purchase our products. These contracts enable us to more readily sell our products and services to customers represented by these organizations. Some of our contracts with these organizations are terminable at the convenience of either party. The loss of any of these relationships could impact the breadth of our customer base and could impair our ability to increase our revenues. We cannot assure you that these organizations will renew our contracts on similar terms, if at all, and they may choose to terminate our contracts before they expire.

The healthcare industry faces financial constraints and consolidation that could adversely affect the demand for our products and services.

The healthcare industry has faced, and will likely continue to face, significant financial constraints. For example, the shift to managed care in the 1990s put pressure on healthcare organizations to reduce costs, and the Balanced Budget Act of 1997 significantly reduced Medicare reimbursement to healthcare organizations. Recently enacted legislation such as the American Recovery and Reinvestment Act in 2009, the Patient Protection and Affordable Care Act in 2010 and other health reform legislation may cause customers to postpone purchases of our products while the impact of the legislation on their operations is determined. Our automation solutions often involve a significant financial commitment by our customers and, as a result, our ability to grow our business is largely dependent on our customers' capital and operating budgets. To the extent healthcare spending declines or increases more slowly than we anticipate, demand for our products and services could decline.

Many healthcare providers have consolidated to create larger healthcare delivery organizations to achieve greater market power. If this consolidation continues, it could reduce the number of our target customers. In addition, the resulting organizations could have greater bargaining power, which may lead to price erosion.

Our disclosure controls and procedures for internal control over financial reporting were not effective as of December 31, 2010. Our failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could cause our stock price to decline.

If we fail to maintain effective internal control over financial reporting, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting. Section 404 of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC require annual management assessments of the effectiveness of our internal control over financial reporting and a report by our independent registered public accounting firm attesting to and reporting on these assessments

Table of Contents

As of December 31, 2010 our management determined that our internal control over financial reporting was not effective under the Section 404 criteria, as a result of a material weakness in our income tax accounting. Specifically, our processes, procedures and controls related to the preparation and review of the annual tax provision were not effective to ensure that amounts recorded for the tax provision and the related current and deferred income tax asset and liability accounts were accurate and determined in accordance with U.S. generally accepted accounting principles.

Notwithstanding the above-mentioned material weakness, we believe that the consolidated financial statements are fairly stated in all material respects as of the year ended December 31, 2010. Our management has committed to corrective actions for the current fiscal year to remediate this material weakness, as described in Item 7 "Material Weakness in Internal Control over Financial Reporting".

We will be required to report on the status of our remediation efforts with regard to this material weakness in every future periodic filing, until such material weakness is fully-remediated and attested to by our independent registered public accounting firm. If we cannot in the future favorably assess, or our independent registered public accounting firm is unable to provide an unqualified attestation report on our assessment of, the effectiveness of our internal control over financial reporting, investors may lose confidence in the reliability of our financial reports, which could cause our stock price to decline.

If the market price of our common stock continues to be highly volatile, the value of your investment in our common stock may decline.

During the year ended December 31, 2010, our common stock traded between $10.93 and $15.38 per share. The market price for shares of our common stock has been and may continue to be highly volatile. In addition, our announcements or external events may have a significant impact on the market price of our common stock. These announcements or external events may include:

•: changes in our operating results;
•: developments in our relationships with corporate customers;
•: changes in the ratings of our common stock by securities analysts;
•: announcements by us or our competitors of technological innovations or new products;
•: announcements by us or our competitors of acquisitions of businesses, products, or technologies; or
•: general economic and market conditions.

Furthermore, the stock market as a whole from time to time has experienced extreme price and volume fluctuations, which have particularly affected the market prices for technology companies. These broad market fluctuations may cause the market price of our common stock to decline irrespective of our performance. In addition, sales of substantial amounts of our common stock in the public market could lower the market price of our common stock.

We depend on a limited number of suppliers for our medication and supply dispensing systems and our business may suffer if we were required to change suppliers to obtain an adequate supply of components and equipment on a timely basis.

Although we generally use parts and components for our products with a high degree of modularity, certain components are presently available only from a single source or limited sources. We have generally been able to obtain adequate supplies of all components in a timely manner from existing sources, or where necessary, from alternative sources of supply. We engaged multiple single source third-party manufacturers to build several of our sub-assemblies. The risk associated with changing to alternative vendors, if necessary, for any of the numerous components used to manufacture

Table of Contents

our products could limit our ability to manufacture our products and harm our business. Our reliance on a few single source partners to build our hardware sub-assemblies, a reduction or interruption in supply from our partners or suppliers, or a significant increase in the price of one or more components could have an adverse impact on our business, operating results and financial condition. In addition, this impact could damage customer relationships and any failure of a contractor to perform adequately could harm our business.

Complications in connection with our ongoing business information system upgrades as well as the adoption of recently issued accounting standards may impact our results of operations, financial condition and cash flows.

We continue to upgrade our enterprise-level business information system with new capabilities. Based upon the complexity of some of the upgrades, there is risk that we will not see the expected benefit from the implementation of these upgrades in accordance with its anticipated timeline and will incur additional costs. In addition, effective for fiscal 2011, we are required to adopt ASU 2009-13 and 2009-14, which we anticipate will require us to modify our revenue recognition policy. We further anticipate that integration of these ASUs will require a substantial amount of management's time and attention and require integration with the recently implemented enterprise resource planning system. The implementation of the system and the adoption of the recently issued ASUs, in isolation as well as together, could result in operating inefficiencies and financial reporting delays, and could impact our ability to record necessary business transactions timely. All of these risks could adversely impact our results of operations, financial condition and cash flows.

Outstanding employee stock options have the potential to dilute stockholder value and cause our stock price to decline.

We frequently grant stock options to our employees. At December 31, 2010, we had options outstanding to purchase approximately 4.7 million shares of our common stock at exercise prices ranging from $2.70 to $29.16 per share, at a weighted-average exercise price of $12.86 per share. If some or all of these shares are sold into the public market over a short time period, the price of our common stock may decline, as the market may not be able to absorb those shares at the prevailing market prices. Such sales may also make it more difficult for us to sell equity securities in the future on terms that we deem acceptable.

If our U.S. government customers that lease our equipment do not receive their annual funding, or if the government contracting mandates require unilateral changes to our contract with government customers that lease, our ability to enter into lease arrangements or to recognize revenues on such future leases to U.S. government customers, to sell our U.S. government receivables to third-party leasing companies or to collect payments on unsold receivables from U.S. government customers could be impaired.

U.S. government customers that lease our equipment typically sign contracts with five-year payment terms that are subject to one-year government budget funding cycles. Further, the government has in certain circumstances mandated unilateral changes in its Federal Supply Services contract that could render our lease terms with the government less attractive. In our judgment and based on our history with these accounts, we believe these receivables are collectable. However, in the future, the failure of any of our U.S. government customers to receive their annual funding, or the government mandating changes to the Federal Supply Services contract could impair our ability to sell lease equipment to these customers or to sell our U.S. government receivables to third-party leasing companies. In addition, the ability to collect payments on unsold receivables could be impaired and may result in a write-down of our unsold receivables from U.S. government customers. As of December 31, 2010, the balance of our unsold leases to U.S. government customers was $13.1 million.

If we fail to manage our inventory properly, our revenue, gross margin and profitability could suffer.

Managing our inventory of components and finished products is a complex task. A number of factors, including, but not limited to, the need to maintain a significant inventory of certain components that are in short supply or that must be purchased in bulk to obtain favorable pricing, the general unpredictability of demand for specific products and customer requests for quick delivery schedules, may result in us maintaining large amounts of inventory. Other factors, including changes in market demand, customer requirements and technology, may cause inventory to become obsolete. Any excess or obsolete inventory could result in inventory write-downs, which in turn could harm our business and results of operations.

Table of Contents

If we are unable to successfully interface our automation solutions with the existing information systems of our customers, they may choose not to use our products and services.

For healthcare facilities to fully benefit from our automation solutions, our systems must interface with their existing information systems. This may require substantial cooperation, incremental investment and coordination on the part of our customers and may require coordination with third party suppliers of the existing information systems. There is little uniformity in the systems currently used by our customers, which complicates the interfacing process. If these systems are not successfully interfaced, our customers could choose not to use or to reduce their use of our automation solutions, which would harm our business.

Our failure to protect our intellectual property rights could negatively affect our ability to compete.

Our success depends in part on our ability to obtain patent protection for technology and processes and our ability to preserve our trademarks, copyrights and trade secrets. We have pursued patent protection in the United States and foreign jurisdictions for technology that we believe to be proprietary and for technology that offers us a potential competitive advantage for our products. We intend to continue to pursue such protection in the future. Our issued patents relate to various features of our medication and supply dispensing systems. We cannot assure you that we will file any patent applications in the future, and that any of our patent applications will result in issued patents or that, if issued, such patents will provide significant protection for our technology and processes. Furthermore, we cannot assure you that others will not develop technologies that are similar or superior to our technology or that others will not design around the patents we own. All of our system software is copyrighted and subject to the protection of applicable copyright laws. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or obtain and use information that we regard as proprietary, which could harm our competitive position.

Intellectual property claims against us could harm our competitive position, results of operations and financial condition.

We expect that developers of medication and supply dispensing systems will be increasingly subject to infringement claims as the number of products and competitors in our industry grows and the functionality of products in different industry segments overlaps. In the future, third parties may claim that we have infringed upon their intellectual property rights with respect to current or future products. In July 2009, Medacist Solutions Group LLC filed a lawsuit against us alleging among other things, that certain of our ProServ 1 offerings infringe a patent owned by Medacist. We do not carry special insurance that covers intellectual property infringement claims; however, such claims may be covered under our traditional insurance policies. These policies contain terms, conditions and exclusions that make recovery for intellectual property infringement claims difficult to guarantee. Any infringement claims, with or without merit, could be time-consuming to defend, result in costly litigation, divert management's attention and resources, cause product shipment delays or require us to enter into royalty or licensing agreements. These royalty or licensing agreements, if required, may not be available on terms acceptable to us, or at all, which could harm our competitive position, results of operations and financial condition.

Our software products are complex and may contain defects, which could harm our reputation, results of operations and financial condition.

We market products that contain software and software only products. Although we perform extensive testing prior to releasing software products, these products may contain undetected errors or bugs when first released. These may not be discovered until the product has been used by customers in different application environments. Failure to discover product deficiencies or bugs could require design

Table of Contents

modifications to previously shipped products or cause unfavorable publicity or negatively impact system shipments, any of which could harm our business, financial condition and results of operations.

Product liability claims against us could harm our competitive position, results of operations and financial condition.

Our products provide medication management and supply chain solutions for the healthcare industry. Despite the presence of healthcare professionals as intermediaries between our products and patients, if our products fail to provide accurate and timely information or operate as designed, customers, patients or their family members could assert claims against us for product liability. Moreover, failure of health care facility employees to use our products for their intended purposes could result in product liability claims against us. Litigation with respect to liability claims, regardless of any outcome, could result in substantial cost to us, divert management's attention from operations and decrease market acceptance of our products. We possess a variety of insurance policies that include coverage for general commercial liability, technology errors and omissions liability, and we attempt to mitigate these risks through contractual terms negotiated with our customers. However, these policies and protective contractual terms may not be adequate against product liability claims. A successful claim brought against us, or any claim or product recall that results in negative publicity about us, could harm our competitive position, results of operations and financial condition. Also, in the event that any of our products is defective, we may be required to recall or redesign those products.

We are dependent on technologies provided by third-party vendors.

Some of our products incorporate technologies owned by third parties that are licensed to us for use, modification, and distribution. If we lose access to third-party technologies, or we lose the ongoing rights to modify and distribute these technologies with our products we will either have to devote resources to independently develop, maintain and support the technologies ourselves, pay increased license costs, or transition to another vendor. Any independent development, maintenance or support of these technologies by us or the transition to alternative technologies could be costly, time consuming and could delay our product releases and upgrade schedules. These factors could negatively and materially affect our ability to market, sell or distribute our products and in turn our business and prospects.

Our international operations may subject us to additional risks that can adversely affect our operating results.

We currently have operations outside of the United States, consisting of customer support activity through a contractor in India, international sales efforts centered in Canada, Europe and Asia and supply chain sourcing in Asia, supported by an office in Hong Kong. Our international operations subject us to a variety of risks, including:

•: the difficulty of managing an organization operating in various countries;
•: growing political sentiment against international outsourcing of support services;
•: reduced protection for intellectual property rights in some countries;
•: changes in foreign regulatory requirements;
•: the requirement to comply with a variety of international laws and regulations, including local labor ordinances and changes in tariff rates;
•: fluctuations in currency exchange rates and difficulties in transferring funds from certain countries; and
•: political unrest, terrorism and the potential for other hostilities in areas in which we have facilities.

Table of Contents

Our success depends, in part, on our ability to anticipate and address these risks. We cannot assure you that these or other factors will not adversely affect our business or operating results.

Government regulation of the healthcare industry could reduce demand for our products, or substantially increase the cost to produce our products.

While the manufacture and sale of our current products are not regulated by the United States Food and Drug Administration, or FDA, or the Drug Enforcement Administration, or DEA, these products, or our future products, if any, may be regulated in the future by these or other federal agencies due to future legislative and regulatory initiatives or reforms. Direct regulation of our business and products by FDA, DEA or other federal agencies could substantially increase the cost to produce our products and increase the time required to bring those products to market, reduce the demand for our products and reduce our revenues. In addition, healthcare providers and facilities that use our equipment and dispense controlled substances are subject to regulation by the DEA. The failure of these providers and facilities to comply with DEA requirements, including the Controlled Substances Act and its implementing regulations, could reduce demand for our products and harm our competitive position, results of operations and financial condition. Pharmacies are regulated by individual state boards of pharmacy that issue rules for pharmacy licensure in their respective jurisdictions. State boards of pharmacy do not license or approve our medication and supply dispensing systems; however, pharmacies using our equipment are subject to state board approval. The failure of such pharmacies to meet differing requirements from a significant number of state boards of pharmacy could decrease demand for our products and harm our competitive position, results of operations and financial condition. Similarly, hospitals must be accredited by The Joint Commission in order to be eligible for Medicaid and Medicare funds. The Joint Commission does not approve or accredit medication and supply dispensing systems; however, disapproval of our customers' medication and supply dispensing management methods and their failure to meet The Joint Commission requirements could decrease demand for our products and harm our competitive position, results of operations and financial condition.

While we have implemented a Privacy and Use of Information Policy and adhere to established privacy principles, use of customer information guidelines and related federal and state statutes, we cannot assure you that we will be in compliance with all federal and state healthcare information privacy and security laws that we are directly or indirectly subject to, including, without limitation, the Health Insurance Portability and Accountability Act of 1996, or HIPAA. Among other things, this legislation required the Secretary of Health and Human Services, or HHS, to adopt national standards governing the conduct of certain electronic health information transactions and protecting the privacy and security of personally identifiable health information maintained or transmitted by "covered entities," which include pharmacies and other healthcare providers with which we do business.

The standards adopted to date include, among others, the "Standards for Privacy of Individually Identifiable Health Information," which restrict the use and disclosure of personally identifiable health information by covered entities, and the "Security Standards," which require covered entities to implement administrative, physical and technical safeguards to protect the integrity and security of certain electronic health information. Under HIPAA, we are considered a "business associate" in relation to many of our customers that are covered entities, and as such, most of these customers have required that we enter into written agreements governing the way we handle and safeguard certain patient health information we may encounter in providing our products and services and may impose liability on us for failure to meet our contractual obligations. Further, pursuant to recent changes in HIPAA under the American Recovery and Reinvestment Act of 2009, or ARRA, we are now also covered under HIPAA similar to other covered entities and in some cases, subject to the same civil and criminal penalties as a covered entity. A number of states have also enacted privacy and security statutes and regulations that, in some cases, are more stringent than HIPAA and may also apply

Table of Contents

directly to us. If our past or present operations are found to violate any of these laws, we may be subject to fines, penalties and other sanctions. In addition, we cannot predict the potential impact of future HIPAA standards and other federal and state privacy and security laws that may be enacted at any time on our customers or on Omnicell. These laws could restrict the ability of our customers to obtain, use or disseminate patient information, which could reduce the demand for our products or force us to redesign our products in order to meet regulatory requirements.

We may need additional financing in the future to meet our capital needs and such financing may not be available on favorable terms, if at all, and may be dilutive to existing stockholders.

We intend to continue to expend substantial funds for research and development activities, product development, sales and marketing activities and the potential acquisition and integration of complementary products and businesses. As a consequence, in the future we may need to seek additional financing to meet our working capital needs and to finance capital expenditures, as well as to fund operations or potential acquisitions. We may be unable to obtain any desired additional financing on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be unable to fund our expansion, successfully develop or enhance products, respond to competitive pressures or take advantage of acquisition opportunities, any of which could negatively affect our business. If we raise additional funds through the issuance of equity securities, our stockholders will experience dilution of their ownership interest. If we raise additional funds by issuing debt, we may be subject to certain contractual restrictions on our operations.

Changes in our tax rates, the adoption of new tax legislation or exposure to additional tax liabilities could affect our future results.

We are subject to taxes in the United States and other foreign jurisdictions. Our future effective tax rates could be affected by several factors, many of which are outside of our control, including: changes in the mix of earnings with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation. We regularly assess the likelihood of adverse outcomes to determine the adequacy of our provision for taxes. We are also subject to examination of our income tax returns by the Internal Revenue Service and other tax authorities. There can be no assurance that the outcomes from these examinations will not materially adversely affect our financial condition and operating results.

Catastrophic events may disrupt our business and harm our operating results.

We rely on our network infrastructure, data centers, enterprise applications, and technology systems for the development, marketing, support and sales of our products, and for the internal operation of our business. These systems are susceptible to disruption or failure in the event of a major earthquake, fire, flood, cyber-attack, terrorist attack, telecommunications failure, or other catastrophic event. Further, many of these systems are housed or supported in or around our corporate headquarters located in California, near major earthquake faults, and where a significant portion of our research and development activities and other critical business operations take place. Disruptions to or the failure of any of these systems, and the resulting loss of critical data, which is not quickly recoverable by the effective execution of disaster recovery plans designed to reduce such disruption, could cause delays in our product development, prevent us from fulfilling our customers' orders, and could severely affect our ability to conduct normal business operations, the result of which would adversely affect our operating results.

Table of Contents

Anti-takeover provisions in our charter documents, our stockholders' rights plan and under Delaware law may make an acquisition of us, which may be beneficial to our stockholders, more difficult.

We are incorporated in Delaware. Certain anti-takeover provisions of Delaware law and our charter documents as currently in effect may make a change in control of our company more difficult, even if a change in control would be beneficial to the stockholders. Our anti-takeover provisions include provisions in our certificate of incorporation providing that stockholders' meetings may only be called by the board of directors and provisions in our bylaws providing that the stockholders may not take action by written consent and requiring that stockholders that desire to nominate any person for election to the board of directors or to make any proposal with respect to business to be conducted at a meeting of our stockholders be submitted in appropriate form to our Secretary within a specified period of time in advance of any such meeting. Delaware law also prohibits corporations from engaging in a business combination with any holders of 15% or more of their capital stock until the holder has held the stock for three years unless, among other possibilities, the board of directors approves the transaction. Our board of directors may use these provisions to prevent changes in the management and control of our company. Also, under applicable Delaware law, our board of directors may adopt additional anti-takeover measures in the future.

In February 2003, our board of directors adopted a stockholder rights plan that may have the effect of discouraging, delaying or preventing a change in control of our company that is beneficial to our stockholders. Pursuant to the terms of the plan, when a person or group, except under certain circumstances, acquires 15% or more of our outstanding common stock (other than two then current stockholders and their affiliated entities, which will not trigger the rights plan unless they acquire beneficial ownership of 17.5% and 22.5% or more, respectively, of our outstanding common stock) or ten business days after commencement or announcement of a tender or exchange offer for 15% or more of our outstanding common stock, the rights (except those rights held by the person or group who has acquired or announced an offer to acquire 15% or more of our outstanding common stock) would generally become exercisable for shares of our common stock at a discount. Because the potential acquirer's rights would not become exercisable for our shares of common stock at a discount, the potential acquirer would suffer substantial dilution and may lose its ability to acquire us. In addition, the existence of the plan itself may deter a potential acquirer from acquiring us. As a result, either by operation of the plan or by its potential deterrent effect, a change in control of our company that our stockholders may consider in their best interests may not occur.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our headquarters is located in leased facilities in Mountain View, California, and we believe that these facilities are sufficient for our current operational needs and that suitable additional space will be available on commercially reasonable terms to accommodate expansion of our operations, if necessary. In addition, we maintain leased office space in California, Illinois, Tennessee and China and we believe

Table of Contents

these facilities are adequate for our current operational requirements. The following is a list of our facilities and their primary functions.

Site		Major Activity

Mountain View, California		Administration, marketing, research and development and manufacturing
Waukegan, Illinois		Technical support and training facility
Nashville, Tennessee		Research and development and marketing
Scotts Valley, California		Administration, marketing and research and development
Hong Kong, China		Manufacturing support

For additional information regarding our obligations pursuant to operating leases, see Note 12, "Commitments" to the "Notes to Consolidated Financial Statements" included in this Annual Report on Form 10-K.

ITEM 3. LEGAL PROCEEDINGS

Flo Healthcare Solutions, LLC. On December 11, 2007, we acquired Rioux Vision, Inc., which had an existing lawsuit in progress at the time of that acquisition. Omnicell was defending that lawsuit, as Rioux Vision is a wholly-owned subsidiary of Omnicell. On October 26, 2006, Rioux Vision was served with a complaint in a lawsuit entitled Flo Healthcare Solutions, LLC v. Rioux Vision, Inc., Case Number 1:06-cv-02600, in the United States District Court for the Northern District of Georgia, alleging claims of patent infringement regarding certain features of the mobile carts sold by Rioux Vision. On December 11, 2008, we were served with a complaint in a lawsuit entitled Flo Healthcare Solutions, LLC v. Omnicell, Inc., Case Number 1:06-cv-02600, in the same Court alleging similar claims of patent infringement regarding Omnicell's sale of the mobile carts acquired in the Rioux acquisition. In accordance with Accounting Standards Codification, or ASC, 805, "Business Combinations," we recorded a pre-acquisition contingency based on our assessment of its fair value in our preliminary purchase price allocation. The fair value for this pre-acquisition contingency represents the amount we and Rioux agreed to adjust the purchase price as a result of our acceptance of any and all costs and risks relating to this contingency. The pre-acquisition contingency was recorded as an accrued liability as of the acquisition date.

On March 4, 2009, we filed, but did not serve, a complaint against Flo Healthcare Solutions, or Flo, entitled Omnicell, Inc. v. Flo Healthcare Solutions LLC, Case Number C09 00923, in the United States District Court for the Northern District of California, with respect to the infringement of Omnicell's U.S. Patent Number 6,604,019. Flo received a courtesy copy of the complaint. On March 10, 2009, we consented to a motion that Flo filed requesting a stay of the Flo Healthcare Solutions LLC v. Rioux Vision, Inc. lawsuit pending the final outcome, including all appeals, of the inter parties reexamination of U.S. Patent No. 6,721,178, currently before the United States Patent and Trademark Office or the Reexamination, which was granted. We consented to a similar motion filed by Flo with respect to the stay of the Flo Healthcare Solutions LLC v. Omnicell, Inc. lawsuit, which was also granted. Under a tolling agreement between the parties, we agreed to dismiss without prejudice the Omnicell, Inc. v. Flo Healthcare Solutions LLC lawsuit, and Omnicell and Flo agreed to toll further actions under all three lawsuits pending the final outcome, including all appeals, of the Reexamination.

On September 30, 2010, Omnicell settled all pending litigation in the Northern District of Georgia with Flo Healthcare LLC, which is now part of the entity InterMetro Industries Corporation. Additionally, Omnicell paid InterMetro $2.7 million, and entered into a patent cross-license agreement with InterMetro, wherein Omnicell received an ongoing license to the patent at issue in the suits, and InterMetro received licenses to two Omnicell patents. The parties jointly filed a motion of dismissal for each of the cases with the Georgia court on October 25, 2010, and the court dismissed both cases, with prejudice, on January 26, 2011. In connection with this settlement, $2.4 million of previously accrued

Table of Contents

liabilities were released and this gain was recorded as a reduction to selling, general and administrative expense in the three months ended September, 30, 2010.

Medacist Solutions Group, LLC. On July 8, 2009, Medacist Solutions Group LLC filed a complaint against Omnicell in U.S. District Court in the Southern District of New York, entitled Medacist Solutions Group LLC v. Omnicell, Inc., case number 09 CV 6128, alleging infringement of Medacist's U.S. Patent Number 6,842,736. The complaint also, among other claims, alleges that Omnicell breached the terms of a nondisclosure agreement (NDA) it had entered into with Medacist, and that Omnicell misappropriated Medacist's trade secrets and confidential information in violation of the NDA. Medacist is seeking unspecified monetary damages and an injunction against the Company's infringement of the specified patent and/or misuse of any of Medacist's trade secrets pursuant to the NDA or in violation of California code. Omnicell has responded to the complaint, denies the claims, and intends to defend the matter vigorously. In June 2010, the Court issued its Civil Case Management Plan and Scheduling Order indicating that discovery in the case will be conducted through March 11, 2011.

On October 20, 2010, the Company filed a declaratory judgment complaint against Medacist Solutions Group, LLC in the U.S. District Court in the Northern District of California, entitled Omnicell, Inc. and Pandora Data Systems, Inc. v. Medacist Solutions Group, LLC, Case Number 10-cv-4746 (the "California Action"). Pandora Data Systems, Inc. had entered into a Settlement and License Agreement with Medacist in October 2008 (the "Settlement Agreement") pursuant to which, among other things, Medacist granted to Pandora a non-exclusive license to Medacist's U.S. Patent Number 6,842,736. The Company seeks an order declaring that Omnicell, as now-owner of Pandora Data Systems, Inc., is entitled to certain rights and benefits under the license. On November 12, 2010, Medacist filed a motion to dismiss the California Action, or in the alternative, to transfer venue to the U.S. District Court for the District of Connecticut. On February 10, 2011, the Court granted Medacist's motion and dismissed the California Action without prejudice. On February 14, 2011, Omnicell and Pandora filed a notice of appeal regarding dismissal of the California Action with the U.S. Court of Appeals for the Ninth Circuit (the "California Appeal"). The California Appeal is now pending. Also on November 12, 2010, Medacist filed a motion in the U.S. District Court in the District of Connecticut to reopen a litigation entitled Medacist Solutions Group, LLC v. Pandora Data Systems, Inc., Case Number 3:07-CV-00692(JCH) (the "Connecticut Litigation"), which had been dismissed and administratively closed since October 29, 2008. Medacist seeks, among other things, relief from the Stipulation of Dismissal entered on October 29, 2008 dismissing the Connecticut Litigation for the limited purpose of interpreting and enforcing the Settlement Agreement, the entry of a temporary restraining order and preliminary and permanent injunctions prohibiting breaches of the Settlement Agreement, a finding that Pandora breached the Settlement Agreement and an award of monetary damages resulting from Pandora's alleged breaches. On December 3, 2010, the Company and Pandora filed a response to this motion. At this time, the Connecticut Litigation remains closed, and no hearings have been scheduled on Medacist's motion. While it is reasonably possible the Company could, at some point in the future, incur a loss in connection with this matter, management at this time cannot determine the range of any such potential loss.

As required under ASC 450, "Contingencies," we accrue for contingencies when we believe that a loss is probable and that we can reasonably estimate the amount of any such loss. We have made an assessment of the probability of incurring any such losses and such amounts are reflected in accrued liabilities in our consolidated financial statements. Except as otherwise indicated above, we believe that the outcomes in these matters are not probable and/or reasonably estimable. We believe that we have valid defenses with respect to legal matters pending against us. However, litigation is inherently unpredictable, and it is possible that cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies or because of the diversion of management's attention and the creation of significant expenses.

ITEM 4. [REMOVED AND RESERVED]

Table of Contents

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market for Our Common Stock

Our common stock is traded on The NASDAQ Global Select Market under the symbol "OMCL." The following table sets forth for the periods indicated the high and low sales prices per share of our common stock.

Fiscal Year Ended December 31, 2010	High		Low

Fourth Quarter	$	14.97	$	12.64
Third Quarter	$	13.24	$	10.93
Second Quarter	$	14.93	$	11.32
First Quarter	$	15.38	$	11.15

Fiscal Year Ended December 31, 2009	High		Low

Fourth Quarter	$	12.19	$	9.62
Third Quarter	$	13.50	$	9.85
Second Quarter	$	11.39	$	7.19
First Quarter	$	12.97	$	6.25

As of March 3, 2011, we had approximately 33,369,590 shares of common stock outstanding held by approximately 165 stockholders of record.

Dividend Policy

We have never declared or paid any cash dividends on our common stock. We currently expect to retain any future earnings for use in the operation and expansion of our business and do not anticipate paying any cash dividends on our common stock in the foreseeable future.

Purchases of Equity Securities By the Issuer and Affiliated Purchasers

The following table sets forth the number of shares of common stock repurchased by the Company during the three months ended December 31, 2010:

Period			Average price paid per share (or unit)			Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs

October 1 - 31, 2010		—	$	—	—		—
November 1 - 30, 2010		—		—	—		—
December 1 - 31, 2010		5,533		14.25	—		—

	Total	5,533	$	14.25	—	$	25.0 million

(1): Represents shares of common stock withheld in satisfaction of tax withholding obligations upon vesting of restricted stock units.

Performance Graph

The following graph compares total stockholder returns for Omnicell's common stock for the past five years to three indices: The NASDAQ Composite Index, the NASDAQ Health Services index and

Table of Contents

the Standard & Poor's (S&P) Composite 1500 Health Care Sector Index (as calculated using a market cap weighting methodology). The total return for Omnicell's common stock and for each index assumes the reinvestment of all dividends, although cash dividends have never been declared on Omnicell's common stock, and is based on the returns of the component companies weighted according to their capitalizations as of the end of each annual period.

The NASDAQ Composite Index tracks the aggregate price performance of equity securities traded on The NASDAQ Stock Market. The NASDAQ Health Services Index tracks the aggregate price performance of health services equity securities. The S&P Composite 1500 Health Care Sector Index tracks the aggregate price performance of health care equity securities. Omnicell's common stock is traded on The NASDAQ Global Select Market and is a component of all three indices. The stock price performance shown on the graph is not necessarily indicative of future price performance.

Historically, we have used the S&P Composite 1500 Health Care Sector in the Total Return graph as our specific industry benchmark. For this transition year we are reporting both that index as well as the NASDAQ Health Services index, which is replacing it for future years. The NASDAQ Health Services Index is a more appropriate industry-specific benchmark for us, as certain aspects of our executive compensation plans are based on this index.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Omnicell, Inc., The NASDAQ Composite Index, The NASDAQ Health Services Index
and The S&P Composite 1500 Health Care Sector Index(1)



Omnicell, Inc.	100.00	155.90	225.36	102.18	97.82	120.92
NASDAQ Composite	100.00	111.74	124.67	73.77	107.12	125.93
S&P Composite 1500 Health Care Sector	100.00	107.17	116.02	88.63	103.62	106.54
NASDAQ Health Services	100.00	109.80	117.78	87.97	99.96	100.19

*: $100 invested on 12/31/05 in the NASDAQ Composite Index, NASDAQ Health Services Index, S&P Composite 1500 Health Care Sector Index and in Omnicell, Inc. including reinvestment of dividends.
(1): This section is not deemed "filed" with the SEC and is not to be incorporated by reference into any filing of Omnicell, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

Table of Contents

ITEM 6. SELECTED FINANCIAL DATA

OMNICELL, INC.
SELECTED FINANCIAL DATA

		Years Ended December 31,

		2010		2009		2008		2007		2006
		(in thousands, except per share amounts)
Total revenues		$	222,407	$	213,457	$	251,865	$	213,081	$	154,710

Income from operations(1)		$	9,526	$	669	$	17,340	$	18,224	$	9,256

Net income		$	4,892	$	444	$	12,724	$	43,295	$	10,365

Net income per share:
	Basic	$	0.15	$	0.01	$	0.40	$	1.35	$	0.38

	Diluted	$	0.15	$	0.01	$	0.38	$	1.28	$	0.36

Shares used in per shares calculations:
	Basic		32,651		31,691		32,076		32,080		27,345

	Diluted		33,513		32,063		33,108		33,820		28,902

Cash dividends declared per share		$	—	$	—	$	—	$	—	$	—

	At December 31,

	2010		2009		2008		2007		2006
	(in thousands)
Total assets	$	343,224	$	322,260	$	308,542	$	328,423	$	154,630
Long-term obligations, net of current portion	$	19,846	$	21,405	$	17,630	$	15,963	$	11,078
Total stockholders' equity	$	265,214	$	242,304	$	233,557	$	254,639	$	89,996

The amounts shown above include the operating results from the following acquisitions: Rioux Vision, Inc. from December 11, 2007 and of Pandora Data Systems, Inc. from September 29, 2010.

(1): Income from operations includes the following items:

	Years Ended December 31,

	2010		2009		2008		2007		2006
	(in thousands)
Share-based compensation expense	$	9,015	$	9,725	$	11,165	$	11,162	$	8,129

You should read the selected consolidated financial data above in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the audited financial statements, notes thereto and other financial information included elsewhere in this Annual Report on Form 10-K. The consolidated statements of operations data for the years ended December 31, 2010, 2009, and 2008 and the consolidated balance sheet data at December 31, 2010 and 2009 are derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The consolidated statement of operations data for the years ended December 31, 2007 and 2006, and the consolidated balance sheet data at December 31, 2008, 2007 and 2006 are derived from our consolidated audited financial statements, which are not included in this Annual Report on Form 10-K. Historical results are not necessarily indicative of the results to be expected in the future.

Table of Contents

OMNICELL, INC.
SUPPLEMENTARY FINANCIAL DATA

		Quarters Ended

		March 31, 2010		June 30, 2010		September 30, 2010		December 31, 2010
		(in thousands, except per share data) (unaudited)
2010
Total revenues		$	54,160	$	54,693	$	56,286	$	57,268
Gross profit		$	27,586	$	28,868	$	30,100	$	31,363
Income from operations		$	1,509	$	3,492	$	3,003	$	1,522
Net income		$	979	$	1,965	$	1,276	$	672
Net income per share:
	Basic(1)	$	0.03	$	0.06	$	0.04	$	0.02
	Diluted(1)	$	0.03	$	0.06	$	0.04	$	0.02

		March 31, 2009			June 30, 2009		September 30, 2009		December 31, 2009

		(in thousands, except per share data) (unaudited)
2009
Total revenues		$	52,204		$	52,643	$	53,957	$	54,653
Gross profit		$	23,820		$	26,929	$	27,249	$	27,223
Income (loss) from operations		$	(2,971	)	$	1,317	$	944	$	1,379
Net income (loss)		$	(1,871	)	$	904	$	854	$	557
Net income (loss) per share:
	Basic(1)	$	(0.06	)	$	0.03	$	0.03	$	0.02
	Diluted(1)	$	(0.06	)	$	0.03	$	0.03	$	0.02

(1): Quarterly earnings per share figures may not total to yearly earnings per share, due to rounding and fluctuations in the number of options included or omitted from diluted calculations based on the stock price or option exercise prices and/or net losses recorded in quarterly periods.

Table of Contents

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Item 1A "Risk Factors" and elsewhere in this Annual Report on Form 10-K. Unless otherwise stated, references in this report to particular years or quarters refer to our fiscal year and the associated quarters of those fiscal years.

Overview

We were incorporated in California in 1992 under the name Omnicell Technologies, Inc. and reincorporated in Delaware in 2001 as Omnicell, Inc. Our healthcare automation solutions are designed to enable healthcare facilities to acquire, manage, dispense and administer medications and medical and surgical supplies, and are intended to enhance patient safety, reduce medication errors, improve workflow and increase operational efficiency. We sell our medication dispensing and supply automation systems primarily in the United States. Approximately 3% of our product revenue is from outside the United States and Canada, although we believe adoption of our products internationally will increase in future years. Our sales force is organized by geographic region in the United States and Canada. We also sell through distributors in Asia, Australia, Europe, the Middle East and South America. We have not sold and have no future plans to sell our products either directly or indirectly to customers located in countries that are identified as state sponsors of terrorism by the U.S. Department of State, or those subject to economic sanctions and export controls. In 2010, we manufactured the majority of our systems in our California facility and refurbishment and spare parts activities were conducted in our Illinois facility.

In general, we recognize revenue when our systems are installed. For all of our products except Mobile Carts, installation generally takes place two weeks to nine months after our systems are ordered. Installation of Mobile Carts generally takes place one to three months after the order is received. The installation process at our customers' sites includes internal procedures associated with integrating large capital expenditures and time associated with adopting new technologies. Given the length of time necessary for our customers to plan for and complete the installation of our systems, our focus is on shipping products based on the installation dates requested by our customers and working at the customer's pace. The amount of revenue recognized in future periods may depend on, among other things, the terms and timing of lease contract renewals, timing of customer installations, additional product sales and the size of such transactions. We believe that future revenue will be affected by the competitiveness of our products and services.

Our revenue increased by 4.2% from $213.5 million in 2009 to $222.4 million in 2010. Of the $8.9 million increase in revenues from 2009 to 2010, $7.9 million was attributable to an increase in service revenues due to growth in the installed customer base over time and the later than expected timing of customer purchase orders for service contracts covering service periods commencing in 2009. The modest $1.0 million increase in product revenues for 2010 as compared with 2009 reflects the continued unstable economic environment during both periods as healthcare facilities continued to reduce or postpone their capital spending. We believe that economic conditions are improving and that spending in the healthcare industry and demand for our products will increase in the future. We believe

Table of Contents

that the following four factors will be responsible for generating demand for our products in future periods:

•: We believe that the overall market demand for healthcare services will increase as the population grows, life expectancies continue to increase, the quality of healthcare services increases and the availability of healthcare services increases;
•: We believe that the environment of increased patient safety awareness, increased regulatory control and increased need for workflow efficiency through the adoption of technology in the healthcare industry will make our solutions a priority in the capital budgets of healthcare facilities;
•: We have continued to differentiate ourselves through a strategy intended to provide the best customer experience in the healthcare industry; and
•: We have delivered industry-leading products with differentiated product features that are designed to appeal to nurses, pharmacists, supply chain managers, chief information officers and hospital management.

Our product backlog, consisting of orders accepted but not yet installed, increased from $113.6 million as of December 31, 2009 to $126.8 million at December 31, 2010. While our customers experienced a challenging financial environment caused by macroeconomic conditions, which contributed to decreasing investment returns, decreasing hospital foundation donations and decreasing reimbursement for procedures and services performed, we believe the macroeconomic environment that caused our customers to postpone their acquisition decisions began to improve in the latter half of 2009. Even with this apparent improvement, however, we are likely to continue experiencing delays in closing contracts until economic conditions appreciably improve.

In addition, beginning in 2009 we saw our order mix shift towards larger institutions and replacement of systems sold by our competitors, which caused increased variability in our order rates and size of orders and may cause increased variability in the timing of future revenues. We expect to operate through 2011 with backlog within our objective of six to nine months of forward revenue but we believe there will be variation from time to time in the total dollar value of orders in backlog.

Our key business strategies include:

•

Delivering solutions that are designed to provide our customers with the best experience in the healthcare industry by:

•: Proactively anticipating and meeting customer product and service requirements;
•: Listening carefully to our customers' prospective issues; and
•: Meeting and exceeding our customers' installation and support needs.

•

Sustaining technological leadership in our products by:

•: Consistently innovating our product and service offerings;
•: Bringing new products and technologies to market through acquisitions and partnerships; and
•: Maintaining our flexibility in customer product design and in the installation process.

In order to implement these strategies during 2010, we:

•: Increased our sales organization to expand coverage of our growing installed base and to expand our reach to new customers;
•: Expanded our proprietary product offerings through the acquisition of Pandora Data Systems;

Table of Contents

•: Continued to announce and deliver new proprietary product offerings such as the Savvy mobile medication system, the Pandora VIA2.0 analytical software, and the WorkflowRx 7.0 unit-dose packager; and
•: Expanded our market presence with new business partnerships with Cardinal Health and RxScan.

Our healthcare customers expect a high degree of partnership from their technology suppliers. Omnicell provides extensive installation planning and consulting as part of every product sale. Our customers medication control systems are mission critical to their success and our customers require the systems to be functional at all times. To help assure the maximum availability of our systems, our customers purchase maintenance and support contracts in one, two or five year increments. Our long-term liabilities, which were $19.8 million as of December 31, 2010 and $21.4 million as of December 31, 2009, are principally composed of long-term deferred service revenue, which was $19.2 million as of December 31, 2010, and $20.8 million as of December 31, 2009. Our deferred service revenue will be amortized to service revenue as the service contracts are executed.

In 2010, we generated positive overall cash flow of $6.4 million primarily due to improved net income, adjusted for non-cash expenses associated with depreciation, amortization and share-based compensation, and proceeds from the issuance of common stock under our employee stock purchase and stock option plans. The increases to cash were offset by $23.0 million in investing cash outflows for purchases of short-term investments, the acquisition of Pandora Data Systems, and the acquisition and development of productive long-lived assets. In 2009, we generated positive overall cash flow of $48.8 million, primarily due to lower accounts receivable, increased deferred service contracts and net income, adjusted for non-cash expenses associated with depreciation, amortization and share-based compensation. Net cash provided by operations continued to be positive for the fifth consecutive year at $20.6 million for the year ended December 31, 2010 and our cash and cash equivalents balance plus short-term investments as of December 31, 2010 was $183.7 million. We expect cash provided by operations to remain positive in 2011.

Our full-time headcount of 753 on December 31, 2010 was the same as our full-time headcount on December 31, 2009, but the functional mix changed including a 30% increase in direct territory sales staff during the fourth quarter of 2010 and offsetting reductions in other functional areas from consolidations and organizational changes earlier in the year. In the first quarter of 2009, we reduced our headcount significantly to align our business with overall demand for our products. Our full-time headcount declined from 844 on December 31, 2008 to 753 on December 31, 2009.

We record compensation costs of share-based awards, options and purchases of our common stock pursuant to our employee stock purchase plan in accordance with ASC 718, "Stock Compensation" (formerly referred to as SFAS No. 123(R)). Total share-based compensation expense for the year ended December 31, 2010 was $9.0 million, down from $9.7 million in 2009. We anticipate that the growth rate of our expenses from share-based compensation, may, at times, exceed the future growth rate of our revenues.

Our gross profit increased 12.1% for the year ended December 31, 2010 as compared to the year ended December 31, 2009 with gross margins increasing by 3.7% to 53.0%. The increases in gross profits and related margins were driven primarily by higher service revenues on an expanded installed base without proportional increases in service costs, favorable product mix to higher margin products and overall operational efficiencies in our production and customer service operations. We expect revenues to increase modestly in 2011 and we do not anticipate any major fluctuations in our gross margin beyond normal fluctuations caused by changes in product mix although revenues and gross margins may be adversely affected as a result of market price reductions and additional costs to expand our business.

Table of Contents

Net income increased to $4.9 million in 2010 compared to $0.4 million in 2009 due to higher gross profit of $12.7 million as compared with 2009, which included a $7.0 million increase in gross profit from service revenues and $5.7 million from product revenues. This increase was partially offset by a $3.8 million increase in operating expenses primarily due to increased research and development activities, and a $4.3 million increase in income taxes. We also recorded pretax restructuring charges of $1.2 million in 2010 for facilities consolidation and $2.5 million in 2009 for a workforce reduction to align our business with overall demand for our products.

We operate in one business segment, the design, manufacturing, selling and servicing of medication and supply dispensing systems. Our chief operating decision maker, who is our chief executive officer, along with our management team evaluates our profit performance based on company-wide, consolidated results. The September 2010 acquisition of Pandora Data Systems resulted in neither the creation of a new reporting unit nor a new operating segment.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles, or GAAP. The preparation of these financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We regularly review our estimates and assumptions, which are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of certain assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions. We believe the following critical accounting policies are affected by significant judgments and estimates used in the preparation of our consolidated financial statements:

Revenue recognition. Our hardware products are integrated with software that is essential to their functionality. Additionally, we provide unspecified upgrades and enhancements related to our integrated software through our maintenance contracts for most of our products. Accordingly, we account for revenue in accordance with ASC 985, "Software" (formerly referred to as Statement of Position No. 97-2). For arrangements with multiple elements, we allocate revenue to each element using the residual method based on vendor specific objective evidence, or VSOE, of the undelivered elements. VSOE of fair value of the undelivered elements is based on the price charged when the element is sold separately.

Post-installation technical support, such as phone support, on-site service, parts and access to software upgrades, when and if available, is provided by us under separate support services terms. We recognize revenue for support services ratably over the related support services contract period.

We recognize revenue when the earnings process is complete, based upon our evaluation of whether the following four criteria have been met:

•: Persuasive evidence of an arrangement. We use signed customer contracts and signed customer purchase orders as evidence of an arrangement for leases and sales. For service engagements, we use a signed services agreement and a statement of work to evidence an arrangement.
•: Product delivery. Software and hardware product delivery is deemed to occur upon successful installation and receipt of a signed and dated customer confirmation of installation letter providing evidence that we have delivered what the customer ordered. In instances of a customer self-installed installation, product delivery is deemed to have occurred upon receipt of a signed and dated customer confirmation letter.

Table of Contents

•: Fee is fixed or determinable. We assess whether a fee is fixed or determinable at the outset of the arrangement based on the payment terms associated with the transaction. We have established a history of collecting under the original contract without providing concessions on payments, products or services.
•: Collection is probable. We assess the probability of collecting from each customer at the outset of the arrangement based on a number of factors, including the customer's payment history and its current creditworthiness. If, in our judgment, collection of a fee is not probable, we defer the revenue until the uncertainty is removed, which generally means revenue is recognized upon our receipt of cash payment. Our historical experience has been that collection from our customers is generally probable.

In general, for sales not requiring our installation, we recognize sales on delivery of products to our customers. We recognize sales on shipment to distributors since we do not have further installation obligations and we do not allow for rights of return. We separately sell training and professional services which are not part of multiple element arrangements and not integral to the performance of our systems. We recognize revenue on training and professional services as they are performed. VSOE of training and of professional services is based on the price paid when sold separately.

A portion of our sales are made through multi-year lease agreements. We recognize product related revenue under sales-type leases at the net present value of the lease payment stream under ASC 840, "Leases" (formally referred to as SFAS No. 13), once our installation obligations are met. In order to optimize cash flows, we generally sell our non-U.S. government leases to third-party leasing finance companies on a non-recourse basis. We exclude from revenue any payments we receive for a new sale that relate to the termination of an existing lease. Generally, we have no obligation to the leasing company once the lease is sold. Some of our lease sales, mostly those relating to U.S. government hospitals, are retained in-house as sales-type leases which we account for in accordance with ASC 840. Interest income in sales-type leases is recognized in product revenue using the interest method.

Provision for allowances. We continually monitor and evaluate the collectability of our trade receivables and our net investment in sales-type leases based on a combination of factors. We record specific allowances for doubtful accounts when we become aware of a specific customer's inability to meet its financial obligation to us such as in the case of bankruptcy filings or deterioration of financial position. Estimates are used in determining our allowances for all other customers based on factors such as current trends, the length of time the receivables are past due and historical collection experience.

Valuation and impairment of goodwill, other intangible assets and other long lived assets. We account for goodwill and other intangible assets in accordance with ASC 350, "Intangibles—Goodwill and Other" (formerly referred to as SFAS No. 142). For the initial recognition and measurement of Goodwill and Intangibles resulting from Business Combinations, we use the guidance in ASC 805.

Goodwill and intangible assets with indefinite lives are not amortized; rather, they are tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that they may be impaired. We perform our goodwill impairment tests during the fourth quarter of each year and between annual tests in certain circumstances.

To perform the goodwill impairment test, we determine the fair value of the reporting unit and compare the fair value to the reporting unit's carrying value. We believe we are one reporting unit, and therefore, we compare our fair value to the total net asset value on our balance sheet. If our total net asset value were to exceed our fair value, we would perform the second step of the impairment test. In the second step, we would compare the implied fair value of our goodwill to our carrying amount, taking a write-down to the extent the carrying amount exceeds the implied fair value. If our fair value

Table of Contents

exceeds the carrying value of our net assets under step one, then no impairment is indicated and the test is complete.

We passed the first step of our annual impairment test for 2010. In addition, there were no indicators of impairment as of December 31, 2010.

We continually monitor events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. We review long-lived assets and certain purchased intangibles for impairment whenever events or changes in circumstances indicate that we will not be able to recover the asset's carrying amount. Recoverability of an asset is measured by comparing its carrying amount to the expected future undiscounted cash flows expected to result from the use and eventual disposition of that asset, excluding future interest costs that would be recognized as an expense when incurred. Any impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair market value. Significant management judgment is required in:

•: identifying a triggering event that arises from a change in circumstances;
•: forecasting future operating results; and
•: estimating the proceeds from the disposition of long-lived or intangible assets.

In future periods, material impairment charges could be necessary should different conditions prevail or different judgments be made.

Significant management judgment is also required for initial recognition and measurement of goodwill and other intangibles assets resulting from Business Combinations per ASC 805. Management must assess the extent to which identified other intangibles assets are properly includable (and with the appropriate fair value) or properly excludable, by applying the recognition criteria. This judgment affects not only the other intangible assets but the remainder calculation of goodwill. The assessment of useful life for each acquired intangible impacts future financial position and operating performance through amortization expense.

Inventory. Inventories are stated at the lower of cost (utilizing standard costs, using the first-in, first-out method) or market. We routinely assess our on-hand inventory for timely identification and measurement of obsolete, slow-moving or otherwise impaired inventory. We write-down inventory for estimated obsolescence, excess or unmarketable quantities equal to the difference between the cost of the inventory and its estimated market value based on assumptions about future demand and market conditions. If actual future demand or market conditions are less favorable than we projected, additional inventory write-downs may be required.

Valuation of share-based awards. We account for share-based compensation in accordance with ASC 718, "Stock Compensation". We estimate the fair value of our employee stock awards at the date of grant using certain subjective assumptions, such as expected volatility which is based on a combination of historical and market-based implied volatility, and the expected term of the awards, which is based on our historical experience of employee stock option exercises including forfeitures. The valuation assumptions we use in estimating the fair value of employee share-based awards may change in future periods. We recognize the fair value of awards over their vesting period or requisite service period. In addition, we calculate our pool of excess tax benefits available within additional paid-in capital in accordance with the provisions of ASC 718.

Table of Contents

reporting and tax bases of assets and liabilities, and for operating losses and tax credit carry forwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the periods in which those tax assets and liabilities are expected to be realized or settled. In the event that these tax rates change, we will incur a benefit or detriment on our income tax expense in the period of change. We can also determine that all or part of the net deferred tax assets are not realizable in the future, we will record a valuation allowance that would be charged to earnings in the period such determination is made.

In accordance with ASC 740, "Income Taxes" (formerly referred to as SFAS No. 109), we recognize the tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of GAAP and complex tax laws. Resolution of these uncertainties in a manner inconsistent with management's expectations could have a material impact on our financial condition and operating results.

Material Weakness in Internal Control Over Financial Reporting.

Our management concluded that, as of December 31, 2010, our internal control over financial reporting was not effective in providing reasonable assurance that a material misstatement of our financial statements would be prevented or detected on a timely basis, Our evaluation concluded that we have a material weakness related to accounting for income taxes. Specifically, our processes, procedures and controls related to the preparation and review of the annual tax provision were not effective to ensure that amounts recorded for the tax provision and the related current and deferred income tax asset and liability accounts were accurate and determined in accordance with U.S. generally accepted accounting principles.

Notwithstanding the above-mentioned material weakness, we believe that the consolidated financial statements are fairly stated in all material respects as of the year ended December 31, 2010.

Our management has committed to the following corrective actions for the current fiscal year:

•: Re-assessing the relationship with our third party consultant to ensure that there is an adequate level of review of the tax provision performed by the consultant and an appropriate level of oversight and validation by our management;
•: Ensuring the internal review processes are carefully executed and monitored to properly account for changes to the underlying supporting documentation; and
•: Implementing and utilizing income tax software to ensure a comprehensive reconciliation of all balance sheet tax accounts to our financial reporting system.

Recently Issued and Adopted Accounting Standards

In October 2009, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Updates, or ASU 2009-13 and 2009-14, or ASU 2009-13 and ASU 2009-14, which amended ASC 605, "Revenue Recognition," and ASC 985-605, "Software-Revenue Recognition," respectively. ASU 2009-13 requires companies to allocate arrangement consideration in multiple-element arrangements based on an element's estimated selling price if vendor-specific or other third-party evidence of selling price is not available. ASU 2009-14 revises the guidance regarding the types of arrangements that fall under the scope of the software recognition guidance, providing a scope exception for many transactions that were previously within the scope of Subtopic ASC 985-605, including tangible products containing software components and non-software components that function

Table of Contents

together to deliver the product's essential functionality and places them under Subtopic ASC 605-25, thus requiring the new multiple-element revenue allocation under ASU 2009-13. Both ASU 2009-13 and ASU 2009-14 are effective for fiscal years beginning on or after June 15, 2010 and we intend to adopt these ASUs at the beginning of our fiscal year 2011. We are currently evaluating how the adoption of these ASUs will impact our operating results, financial position and cash flows.

In July 2010, the FASB issued "Disclosure about the Credit Quality of Financing Receivables and the Allowance for Credit Losses" as ASU 2010-20, amending ASC 310, "Receivables." ASU 2010-20 requires certain disclosures about the credit quality of financing receivables and the related allowance for credit losses. In addition, disclosures are required related to the nature of credit risk inherent in the portfolio of financing receivables, how the credit risk is analyzed and assessed in arriving at the allowance for credit losses, and the changes and reasons for those changes in the allowance for credit losses. For public entities, the new disclosures for the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010, with new disclosures about period activity effective for interim and annual reporting periods beginning on or after December 15, 2010. The period end disclosures are effective for us for December 31, 2010, and the period-activity disclosures are effective beginning with the first quarter of 2011. As ASU 2010-20 is a disclosure standard, we do not anticipate the adoption of this standard to have any impact on our operating results, financial position or cash flows.

Results of Operations

			For the Years Ended December 31,

			2010		% of Revenue			2009		% of Revenue			2008		% of Revenue
			(in thousands, except percentages)
Revenues:
	Product revenues		$	171,100		76.9	%	$	170,068		79.7	%	$	211,461		84.0	%
	Service and other revenues			51,307		23.1	%		43,389		20.3	%		40,404		16.0	%

		Total revenues		222,407		100.0	%		213,457		100.0	%		251,865		100.0	%

Cost of revenues:
	Cost of product revenues			76,372		34.3	%		80,016		37.5	%		97,461		38.7	%
	Cost of service and other revenues			28,079		12.7	%		27,011		12.7	%		25,770		10.2	%
	Restructuring charges			39		0.0	%		1,209		0.6	%		—		0.0	%

		Total cost of revenues		104,490		47.0	%		108,236		50.7	%		123,231		48.9	%

Gross profit				117,917		53.0	%		105,221		49.3	%		128,634		51.1	%
Operating expenses:
	Research and development			21,007		9.4	%		17,569		8.2	%		18,196		7.2	%
	Selling, general and administrative			86,227		38.8	%		85,668		40.2	%		93,098		37.0	%
	Restructuring charges			1,157		0.5	%		1,315		0.6	%		—		0.0	%

		Total operating expenses		108,391		48.7	%		104,552		49.0	%		111,294		44.2	%

Income from operations				9,526		4.3	%		669		0.3	%		17,340		6.9	%
Interest income, net				431		0.2	%		523		0.3	%		3,382		1.3	%

Income before provision for income taxes				9,957		4.5	%		1,192		0.6	%		20,722		8.2	%
Provision for income taxes				5,065		2.3	%		748		0.4	%		7,998		3.1	%

Net income			$	4,892		2.2	%	$	444		0.2	%	$	12,724		5.1	%

Table of Contents

Product Revenues, Cost of Product Revenues and Gross Profit

The table below shows our product revenues, cost of product revenues and gross profit for the years ended December 31, 2010, 2009 and 2008 and the percentage change between those years:

	For the Years Ended December 31,						Percentage Change

	For the Years Ended December 31,						2010 to 2009			2009 to 2008
	2010		2009		2008		2010 to 2009			2009 to 2008
	(in thousands)
Product revenues	$	171,100	$	170,068	$	211,461		0.6	%		(19.6	)%
Cost of product revenues		76,372		80,016		97,461		(4.6	)%		(17.9	)%
Restructuring charges		—		1,008		—		(100.0	)%		—

Gross profit	$	94,728	$	89,044	$	114,000		6.4	%		(21.9	)%

2010 compared to 2009

Product revenues remained nearly flat in 2010 as compared to 2009.

Cost of product revenues decreased by $3.6 million, or 4.6%, in 2010 as compared to 2009. The decrease was primarily due to a $1.0 million charge to record an inventory reserve in the first quarter of 2009 which did not recur in 2010, a $0.4 million favorable timing effect on expenses due to a reduction in accrued vacation in the second quarter of 2010, the overall favorable shift in product mix to revenues with lower associated costs along with the favorable results of outsourcing initiatives, ongoing cost reduction programs, and general operational efficiencies.

Gross profit on product revenue increased by $5.7 million, or 6.4%, in 2010 as compared to 2009, primarily as a result of lower product costs. Gross margin as a percent of revenues was 55.4%, compared to 52.4% in 2009. Product gross margin increased 3.0% due to the aforementioned $1.0 million inventory reserve recorded in the first quarter of 2009 which did not recur in 2010, a $1.0 million restructuring charge in the first quarter of 2009, a $0.4 million favorable timing effect on expenses due to a reduction in accrued vacation in the second quarter of 2010, and the overall favorable shift in product mix to revenues with lower associated costs along with the favorable results of outsourcing initiatives, ongoing cost reduction programs, and general operational efficiencies.

We expect product revenues to increase modestly in 2011 and we do not anticipate any significant fluctuations in our gross margin beyond normal fluctuations caused by changes in product mix.

2009 compared to 2008

Product revenues decreased $41.4 million, or 19.6%, in 2009 as compared to 2008. The decrease in product revenue was primarily due to a decrease in the number of installations of medication and supply automation systems and central pharmacy products, from both existing and new customers in our U.S. domestic markets which was due to general economic conditions affecting hospital capital purchasing.

Cost of product revenues decreased by $17.4 million, or 17.9%, in 2009 as compared to 2008. The decrease was primarily due to the reduction in product revenue resulting in a $17.9 million decrease in direct standard cost, and a decrease in spending of $1.9 million which was driven by lower headcount as a result of restructuring relating to our workforce reduction in the first quarter of 2009 and associated headcount related expenses such as travel. This was partially offset by an increase of $2.4 million in other costs, including $1.0 million related to reserves for excess and obsolete inventory.

Gross profit on product revenue decreased by $25.0 million, or 21.9%, in 2009 as compared to 2008, primarily as a result of lower product revenues. Gross margin as a percent of revenues was 52.4% compared to 53.9% in 2009. Direct product margins increased 2.1% due to both product mix and

Table of Contents

better supply management. This increase was offset by increases in other costs primarily due to reserves for excess and obsolete inventory and increased depreciation expenses related to the implementation of our new accounting and materials system. In addition, we incurred a $1.0 million restructuring charge in the first quarter of 2009.

Service and Other Revenues, Cost of Service and Other Revenues and Gross Profit

Service and other revenues include revenues from service and maintenance contracts and rentals of automation systems. The table below shows our service and other revenues, cost of service and other revenues and gross profit for the years ended December 31, 2010, 2009 and 2008 and the percentage change between those years:

	For the Years Ended December 31,						Percentage Change

	For the Years Ended December 31,						2010 to 2009			2009 to 2008
	2010		2009		2008		2010 to 2009			2009 to 2008
	(in thousands)
Service and other revenues	$	51,307	$	43,389	$	40,404		18.2	%		7.4	%
Cost of service and other revenues		28,079		27,011		25,770		4.0	%		4.8	%
Restructuring charges		39		201		—		(80.6	)%		—

Gross profit	$	23,189	$	16,177	$	14,634		43.3	%		10.5	%

2010 compared to 2009

Service and other revenues increased by $7.9 million, or 18.2%, in 2010 as compared to 2009. The increase was primarily due to normal growth on an expanded installed base, as well as later than expected receipts of customer purchase orders for service contracts covering service periods starting in 2009, for which service revenues were recognized retrospectively from their commencement dates.

Cost of service and other revenues increased by $1.1 million, or 4.0%, in 2010 as compared to 2009. The increase was primarily due to an increase in spending of $1.0 million primarily related to salaries and related benefits costs and replacement part costs in support of the expanded service base.

Gross profit on service and other revenues increased by $7.0 million, or 43.3%, in 2010 as compared to 2009. The increase in gross margin on service and other revenues was due to the aforementioned revenue growth from service contracts initiated in 2009 with purchase orders received in 2010 and from normal growth on an expanded installed base without a proportional growth in service costs as these were incurred in prior periods.

We expect our service and other revenues and the associated gross profit to increase for 2011, in line with the continued expansion of our installed base of automation systems and service and maintenance contracts, the addition of service revenues associated with our recent acquisition of Pandora Data Systems. and continued cost controls.

2009 compared to 2008

Service and other revenues increased by $3.0 million, or 7.4%, in 2009 as compared to 2008. The increases in service and other revenues was primarily due to the result of an expansion in our installed base of automation systems and a resulting increase in number of support service contracts.

Cost of service and other revenues increased by $1.2 million, or 4.8%, in 2009 as compared to 2008. The increase was primarily due to increases in spare parts usage to support the larger installed base.

Gross profit on service and other revenues increased by $1.5 million, or 10.5%, in 2009 as compared to 2008. The increase in gross margin on service and other revenues was due primarily to

Table of Contents

faster revenue growth from an expanded installed base without a proportionate increase in labor costs to support the expanded install base.

Operating Expenses

The table below shows our operating expenses for the years ended December 31, 2010, 2009 and 2008 and the percentage change between those years:

							Percentage Change

	For the Years Ended December 31,						Percentage Change
	For the Years Ended December 31,						2010 to 2009			2009 to 2008
	2010		2009		2008		2010 to 2009			2009 to 2008
	(in thousands)
Research and development	$	21,007	$	17,569	$	18,196		19.6	%		(3.4	)%
Selling, general and administrative		86,227		85,668		93,098		0.7	%		(8.0	)%
Restructuring charges		1,157		1,315		—		(12.0	)%		—

Total operating expenses	$	108,391	$	104,552	$	111,294		3.7	%		(6.1	)%

2010 compared to 2009

Research and development. Research and development expenses increased by $3.4 million, or 19.6%, in 2010 as compared to 2009. Research and development expenses represented 9.4% and 8.2% of total revenues in 2010 and 2009, respectively.

The increase in research and development expenses in 2010 was due to an increase of $1.9 million in consulting expenses, an increase of $0.7 million of labor and related costs, both of which are related to new hardware and software product development, and a decrease of $0.8 million of software capitalization in 2010 compared to 2009 primarily due the release in 2010 of two major software releases used in our products.

We expect research and development expenses to increase slightly as we continue to invest in new products. The amount of research and development expense can fluctuate based on the amount of proto type expenses for hardware and or the amount of capitalized software development costs.

Selling, general and administrative. Selling, general and administrative expenses increased by $0.6 million, or 0.7%, in 2010 as compared to 2009. Selling, general and administrative expenses represented 38.8% and 40.2% of total revenues in 2010 and 2009, respectively.

Three areas of spending increased the selling, general and administrative expenses. These were $1.9 million of fees related to potential acquisition assessment activities, $1.3 million related to marketing programs to increase brand awareness, and $2.4 million associated with rising costs of operations, including $1.0 million increase in employee health and dental benefits, $0.5 million increase in Group Purchasing Organization fees associated with higher sales volume to Group Purchasing Organization affiliated customers, and $0.4 million increase in travel. These increases were offset by a decrease of $2.9 million in legal fees which included a $2.4 million benefit from the settlement of a litigation claim for less than the amount previously accrued and a decrease of bad debt expense of $1.7 million primarily due to the recovery of a fully reserved accounts receivable balance and lower non-specific bad debt reserve requirements based on improved historical experience.

We expect selling, general and administrative costs to increase in 2011, in both dollars and as a percentage of revenues due to an increase of direct territory sales representatives.

Restructuring charges. Restructuring charges of $1.2 million incurred in 2010 related to the closure of facilities in The Woodlands, Texas and Bangalore, India. Costs recorded related primarily to severance and relocation pay, lease terminations, asset impairment charges, consulting, and travel.

Table of Contents

Restructuring charges of $1.3 million incurred in 2009 related primarily to severance pay, continuation of benefits and outplacement services associated with reduction in force activities.

2009 compared to 2008

Research and development. Research and development expenses decreased by $0.6 million, or 3.4%, in 2009 as compared to 2008. Research and development expenses represented 8.2% and 7.2% of total revenues in 2009 and 2008, respectively. The decrease in research and development expenses was due primarily to a $1.8 million increase in capitalized software, primarily due to the development of two major releases of our software used in our products, which moved expenditures from expenses to capital projects, offset by an increase of $1.1 million in outside services.

Selling, general and administrative. Selling, general and administrative expenses decreased by $7.4 million, or 8.0%, in 2009 as compared to 2008. Selling, general and administrative expenses represented 40.2% and 37.0% of total revenues in 2009 and 2008, respectively. The decrease in selling, general and administrative expenses was primarily due to $6.3 million of decreases associated with lower sales volume and headcount, a decrease of $1.0 million in bad debt expense associated with the decrease in accounts receivable balances, and a decrease of $1.3 million in expenses related to share based compensation charges associated with ASC 718. These decreases were partially offset by increased investment in the marketing of our products.

Restructuring charges. The decrease in research and development and selling, general and administrative expenses in 2009 was partially the result of our work force reduction during the first quarter of 2009, which lowered headcount by 43 employees, but resulted in a restructuring charge of $1.3 million. These restructuring costs were primarily severance pay, continuation of benefits and outplacement services.

Interest Income and Other Expense

The table below shows our interest income and other expense for the years ended December 31, 2010, 2009 and 2008 and the percentage change between those years:

	For the Years Ended December 31,								Percentage Change

	For the Years Ended December 31,								2010 to 2009			2009 to 2008
	2010		2009			2008			2010 to 2009			2009 to 2008
	(in thousands)
Interest income	$	424	$	619		$	3,420			(31.5	)%		(81.9	)%
Other income (expense)		7		(96	)		(38	)		(107.3	)%		152.6	%

The decrease in interest income for 2010 as compared to 2009 was primarily due to lower interest rates. Although average cash, cash equivalents, and short-term investment balances averaged approximately $45.0 million higher in 2010, average interest rates decreased by 25 basis points compared to 2009 rates, resulting in $0.2 million lower interest income. We expect interest income to remain at approximately 2010 levels during 2011.

The decrease in interest income for 2009 as compared to 2008 was primarily due to lower interest rates. The average cash, cash equivalent balances were approximately $134.0 million for 2009 and 2008, but the effective interest rate in 2009 was approximately 50 basis points compared to approximately 250 basis points in 2008.

Table of Contents

Income taxes

	Years Ended December 31,

	2010		2009		2008
	(in thousands)
Provision for income taxes	$	5,065	$	748	$	7,998

We recorded a provision for income taxes of approximately $5.1 million and an effective tax rate of 50.8% for the year ended December 31, 2010 compared to $0.7 million and 62.8% effective tax rate for the year ended December 31, 2009. The 2010 annual tax rate differs from the statutory tax rate of 35% primarily due to the impact of state income taxes and a one-time tax adjustment of approximately $0.8 million for the tax effect of undistributed foreign earnings, triggered by the closure of our India subsidiary as part of our third quarter restructuring program.

We recorded a provision for income taxes of approximately $0.7 million and an effective tax rate of 62.8% for the year ended December 31, 2009 compared to $8.0 million and 38.6% effective tax rate for the year ended December 31, 2008. The increase in the effective tax rate was primarily due to prior year true-up of approximately $0.7 million and the re-measurement of our California deferred tax assets to reflect the enactment of California tax legislation, effective January 1, 2011.

Refer to Note 14 "Income Taxes" for discussion of factors affecting realizability of deferred tax assets.

Liquidity and Capital Resources

Cash Flows

The table below shows our cash flows for the years ended December 31, 2010, 2009 and 2008:

	For the Years Ended December 31,

	2010			2009			2008
	(in thousands)
Net cash provided by operating activities	$	20,599		$	46,169		$	14,298
Net cash used in investing activities		(23,057	)		(6,795	)		(13,037	)
Net cash provided by (used in) financing activities		8,863			9,417			(50,634	)

Net increase (decrease) in cash and cash equivalents	$	6,405		$	48,791		$	(49,373	)

2010 compared to 2009

Net cash provided by operating activities decreased by $25.6 million in 2010 to $20.6 million from the 2009 amount of $46.2 million. The major driver of this decrease was accounts receivable collections returning to normal trends compared to 2009, resulting in a net change between the years of $18.5 million. Other uses of cash were balance sheet changes in prepaids, accrued liabilities and deferred service revenue, reducing $3.7 million, $3.8 million and $5.6 million, respectively, of operating cash flows in 2010 compared to 2009. Offsetting these decreases in sources of operating cash flows were higher net income of $4.4 million and a combination of tax related operating cash flows that increased cash provided by operating activities between 2010 and 2009 by $7.5 million. The largest tax related item was a benefit from employee stock plans which changed from a use of operating cash in 2009 to a source of operating cash in 2010 for a net increase of cash provided of $7.5 million.

Net cash used in investing activities increased by $16.3 million in 2010 to $23.1 million from the 2009 amount of $6.8 million. This was primarily due to purchases of $8.1 million of California revenue anticipation notes and the acquisition of Pandora Data Systems for $5.7 million, net of cash acquired.

Table of Contents

Purchases of capital assets increased $2.5 million primarily due to continued efforts in 2010 to increase information technology capabilities, including a customer relationship management systems installation project.

Net cash provided by financing activities decreased by $0.5 million in 2010 compared to net cash provided by financing activities of $9.4 million in 2009. This was due to an increase in proceeds of $3.0 million from shares issued under stock option and employee stock purchase plans offset by a decrease of $3.5 million in excess tax benefits from employee stock plans.

2009 compared to 2008

Net cash provided by operating activities increased by $31.9 million in 2009 from $14.3 million in 2008 to $46.2 in 2009. The major driver of this increase was lower accounts receivable due to increased collections, resulting in a net change between the years of $39.1 million. Other sources of cash were balance sheet changes in accrued liabilities and other current assets, adding $5.8 million and $3.6 million, respectively, of additional operating cash flows in 2009 compared to 2008. Offsetting these increases in sources of operating cash flows were lower net income of $12.3 million and a combination of tax related operating cash flows that reduced cash provided by operating activities between 2009 and 2008 by $4.7 million. The largest tax related item was from employee stock plans which changed from a source of operating cash in 2008 to a use of operating cash in 2009 for a net reduction of cash provided of $17.7 million. This was offset by increases in cash provided by deferred income taxes, which changed from a use of operating cash in 2008 to a source of operating cash in 2009, of $11.9 million and a reduction of use of operating cash by excess tax benefits from employee stock plans of $1.1 million.

Net cash used in investing activities decreased by $6.2 million in 2009 to $6.8 million from the 2008 amount of $13.0 million. This was primarily due to lower purchases of capital assets.

Net cash provided by financing activities increased by $60.1 million in 2009 to $9.4 million from the 2008 amount of net cash used in financing activities of $50.6 million. This was primarily due to the absence of stock repurchases in 2009 as compared to stock repurchases in 2008 totaling $65.1 million. Refer to Treasury Stock under Note 15 for discussion of the share repurchase program.

Liquidity

Our future uses of cash are expected to be primarily for working capital, capital expenditures and other contractual obligations. We alsoexpect a continued use of cash for potential acquisition assessment activities. Additionally, as described in Note 15, on December 31, 2010, we had $25.0 million of remaining authorized funds to repurchase additional shares under stock repurchase programs, which may, in the future, result in additional use of cash. We had cash and cash equivalents of $175.6 million at December 31, 2010 as compared to $169.2 million at December 31, 2009. Additionally, we owned $8.1 million of short-term investments at December 31, 2010. Based on our current business plan and revenue backlog, we believe that our existing cash, cash equivalents and our anticipated cash flows from operations as well as cash generated from the exercise of employee stock options and purchases under our employee stock purchase plan will be sufficient to meet our working capital, capital expenditures and other contractual obligations for at least the next twelve months. For periods beyond the next twelve months, we also anticipate that our net operating cash flows plus existing balances of cash, cash equivalents, and short-term investments will suffice to fund the continued growth of our business.

Table of Contents

Off-Balance Sheet Arrangements

As of December 31, 2010, we had no off-balance sheet arrangements as defined under Regulation S-K 303(a)(4) of the Securities Exchange Act of 1934, as amended, and the instructions thereto.

Contractual Obligations

As of December 31, 2010 we had $11.5 million in contractual commitments to third parties for non-cancelable operating leases, commitments to contract manufacturers and suppliers and other purchase commitments. See Note 12, "Commitments," to our consolidated financial statements included in this Annual Report on Form 10-K for further information with respect to these commitments.

The following table summarizes our contractual obligations at December 31, 2010 (in thousands):

	Total		Less than one year		One to three years		Three to five years		More than five years

Operating leases(1)	$	6,570	$	3,875	$	2,166	$	529	$	—
Commitments to contract manufacturers and suppliers(2)		4,925		4,925		—		—		—

Total	$	11,495	$	8,800	$	2,166	$	529	$	—

(1): Commitments under operating leases relate primarily to leasehold property and office equipment. In April 2010, we entered into a lease agreement to replace certain expiring leases with approximately 25,000 square feet of office space in Nashville, Tennessee. The new lease is for a term of 60 months, and commenced July 2010, with two five-year renewal options. The base rental commitment for the initial five-year term totals $1.7 million. Rent expense was $3.6 million, $3.5 million and $3.4 million for the years ended December 31, 2010, 2009 and 2008, respectively.
(2): We purchase components from a variety of suppliers and use contract manufacturers to provide manufacturing services for our products. During the normal course of business, we issue purchase orders with estimates of our requirements several months ahead of the delivery dates.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are only exposed to market risk from changes in interest rates to the extent our interest income might decrease.

As of December 31, 2010, we had $175.6 million of cash and cash equivalents. We invest our cash in cash investments with original or remaining maturities of three months or less and whose principal is not subject to market rate fluctuations. Accordingly, interest rate declines would adversely affect our interest income but would not affect the carrying value of our cash investments. Our fourth quarter 2010 weighted interest rate was 0.18%. If interest rates were to decline to zero, we would generate $0.1 million less interest income per quarter. Management considers this interest rate exposure immaterial.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is set forth beginning at page F-1.

Table of Contents

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act) as of the end of the period covered by this Annual Report. These disclosure controls and procedures are designed to ensure that the information required to be disclosed by us in this Annual Report on Form 10-K was (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and regulations and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of December 31, 2010, our disclosure controls and procedures were not effective at the reasonable assurance level, due to a material weakness in internal control over financial reporting related to accounting for income taxes. Notwithstanding the above-mentioned material weakness, we believe that the consolidated financial statements included in this report fairly represent our consolidated financial position as of December 31, 2010, and consolidated results of operations for the year ended December 31, 2010.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control system is designed to provide reasonable assurance regarding the preparation and fair presentation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent limitations and can provide only reasonable assurance that the objectives of the internal control system are met.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2010 using the criteria for effective internal control over financial reporting as described in "Internal Control—Integrated Framework," issued by the Committee of Sponsoring Organization of the Treadway Commission. Our management has concluded that, as of December 31, 2010, our internal control over financial reporting was not effective based on these criteria, due to a material weakness related to our accounting for income taxes.

A material weakness is a deficiency, or combination of control deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's interim or annual financial statements will not be prevented or detected on a timely basis.

Our evaluation concluded that we did not maintain effective internal control over accounting for income taxes. Specifically, our processes, procedures and controls related to the preparation and review of the annual tax provision were not effective to ensure that amounts recorded for the tax provision and the related current and deferred income tax asset and liability accounts were accurate and determined in accordance with U.S. generally accepted accounting principles. Additionally, we did not

Table of Contents

maintain effective controls over the review and analysis of supporting work papers for such tax balances.

This material weakness was primarily caused by:

•: Inadequate management review of the income tax provision calculation, supporting assumptions and workpapers; and
•: An inadequate system of document management or version control over the multiple files used for calculation and review of the income tax provision.

Our independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on our internal control over financial reporting. Their audit report is included elsewhere in this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

Other than the material weakness noted above, there have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Attestation Report of the Registered Public Accounting Firm

The report required by this item is set forth below:

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Omnicell, Inc.

We have audited Omnicell, Inc.'s internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Omnicell, Inc.'s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management's assessment. Management has identified a material weakness in the controls over the preparation and review of the provision for income tax expense. We have also audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2010 consolidated financial statements. This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2010 financial statements and this report does not affect our report dated March 11, 2011, which expressed an unqualified opinion on those financial statements.

In our opinion, because of the effect of the material weakness described above on the achievement of the objectives of the control criteria, Omnicell, Inc. has not maintained effective internal control over financial reporting as of December 31. 2010, based on the COSO criteria.


		/s/ Ernst & Young LLP

San Jose, California
March 11, 2011

Table of Contents

ITEM 9B. OTHER INFORMATION

None.

Table of Contents

PART III

Certain information required by Part III is omitted from this Annual Report on Form 10-K because the registrant will file with the U.S. Securities and Exchange Commission a definitive proxy statement pursuant to Regulation 14A in connection with the solicitation of proxies for the Company's Annual Meeting of Stockholders expected to be held in May 2011 (the "Proxy Statement") not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and certain information included therein is incorporated herein by reference.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item with respect to directors and executive officers may be found under the heading "Executive Officers of the Registrant" in Part I, Item 1 of this Annual Report on Form 10-K, and in the section entitled "Election of Directors" appearing in the Proxy Statement. Such information is incorporated herein by reference.

The information required by this Item with respect to our audit committee and audit committee financial expert may be found in the section entitled "Information Regarding the Board of Directors and Corporation Governance—Audit Committee" appearing in the Proxy Statement. Such information is incorporated herein by reference.

The information required by this Item with respect to compliance with Section 16(a) of the Securities Exchange Act of 1934 may be found in the sections entitled "Section 16(a) Beneficial Ownership Reporting Compliance" appearing in the Proxy Statement. Such information is incorporated herein by reference.

Our written Code of Ethics applies to all our directors and employees, including executive officers, including without limitation our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Code of Ethics is available on our website at www.omnicell.com under the hyperlink titled "Corporate Governance." Changes to or waivers of the Code of Ethics will be disclosed on the same website. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendment to, or waiver of, any provision of the Code of Ethics by disclosing such information on the same website.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item with respect to director and executive officer compensation is incorporated by reference to the section of our Proxy Statement under the section entitled "Executive Compensation—Compensation Discussion and Analysis".

The information required by this Item with respect to Compensation Committee interlocks and insider participation is incorporated herein by reference to the information from the Proxy Statement under the section entitled "Information Regarding the Board of Directors and Corporate Governance—Compensation Committee Interlocks and Insider Participation."

The information required by this Item with respect to our Compensation Committee's review and discussion of the Compensation Discussion and Analysis included in the Proxy Statement is incorporated herein by reference to the information from the Proxy Statement under the section entitled "Executive Compensation—Compensation Discussion and Analysis—Compensation Committee Report."

Table of Contents

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS

The information required by this Item with respect to security ownership of certain beneficial owners and management is incorporated herein by reference to the information from the Proxy Statement under the section entitled "Security Ownership of Certain Beneficial Owners and Management."

The information required by this Item with respect to securities authorized for issuance under our equity compensation plans is incorporated herein by reference to the information from the Proxy Statement under the section entitled "Equity Compensation Plan Information."

ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this Item with respect to related party transactions is incorporated herein by reference to the information from the Proxy Statement under the section entitled "Certain Relationships and Related Transactions."

The information required by this Item with respect to director independence is incorporated herein by reference to the information from the Proxy Statement under the section entitled "Information Regarding the Board of Directors and Corporate Governance—Independence of the Board of Directors."

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is incorporated herein by reference to the section from the Proxy Statement under the section entitled "Ratification of Selection of Independent Registered Public Accounting Firm—Principal Accountant Fees and Services."

Table of Contents

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a): The following documents are included as part of this Annual Report on Form 10-K.
(1): All financial statements.

Index to Financial Statements:		Page

Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets as of December 31, 2010 and 2009		F-2
Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008		F-3
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2010, 2009 and 2008		F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008		F-5
Notes to Consolidated Financial Statements		F-6
The foregoing additional financial statement schedule should be considered in conjunction with our consolidated financial statements. All other schedules have been omitted because the required information is either not applicable or not sufficiently material to require submission of the schedule.
Financial Statement Schedule II		F-38
(2) Exhibits required by Item 601 of Regulation S-K.
The information required by this item is set forth on the exhibit index which follows the signature page of this report.

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Omnicell, Inc.

We have audited the accompanying consolidated balance sheets of Omnicell, Inc. as of December 31, 2010 and 2009, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2010. Our audits also included the financial statement schedule listed in the index at Item 15(a)(1). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Omnicell, Inc. at December 31, 2010 and 2009, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2010, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Omnicell, Inc.'s internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 11, 2011 expressed an adverse opinion thereon.


		/s/ Ernst & Young LLP

San Jose, California
March 11, 2011

F-1

Table of Contents

OMNICELL, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value and share amounts)

			December 31,

			2010			2009
ASSETS
Current assets:
	Cash and cash equivalents		$	175,635		$	169,230
	Short-term investments			8,074			—
	Accounts receivable, net of allowances of $497 and $868 at December 31, 2010 and 2009, respectively			42,732			40,826
	Inventories			9,785			10,502
	Prepaid expenses			11,959			8,780
	Deferred tax assets			13,052			15,247
	Other current assets			7,266			6,159

		Total current assets		268,503			250,744
Property and equipment, net				14,351			13,209
Non-current net investment in sales-type leases				9,224			10,104
Goodwill				28,543			24,982
Other intangible assets				4,672			4,233
Non-current deferred tax assets				9,566			9,666
Other assets				8,365			9,322

		Total assets	$	343,224		$	322,260

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	13,242		$	10,313
	Accrued compensation			7,731			8,095
	Accrued liabilities			8,684			11,997
	Deferred service revenue			16,788			14,457
	Deferred gross profit			11,719			13,689

		Total current liabilities		58,164			58,551
Long-term deferred service revenue				19,171			20,810
Other long-term liabilities				675			595

		Total liabilities		78,010			79,956
Commitments and contingencies
Stockholders' equity:
	Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued			—			—
	Common stock, $0.001 par value; 100,000,000 shares authorized; 37,148,706 and 33,027,583 shares issued and outstanding, respectively, at December 31 2010 and 36,072,776 and 31,977,470 shares issued and outstanding, respectively, at December 31, 2009			37			36
	Treasury stock, at cost, outstanding: 4,121,123 share and 4,095,306 shares at December 31, 2010 and 2009, respectively			(65,064	)		(65,064	)
	Additional paid-in capital			342,272			324,255
	Accumulated deficit			(12,031	)		(16,923	)

		Total stockholders' equity		265,214			242,304

		Total liabilities and stockholders' equity	$	343,224		$	322,260

See Notes to Consolidated Financial Statements

F-2

Table of Contents

OMNICELL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

			Years Ended December 31,

			2010			2009			2008
Revenues:
	Product revenues		$	171,100		$	170,068		$	211,461
	Service and other revenues			51,307			43,389			40,404

		Total revenues		222,407			213,457			251,865
Cost of revenues:
	Cost of product revenues			76,372			80,016			97,461
	Cost of service and other revenues			28,079			27,011			25,770
	Restructuring charges			39			1,209			—

		Total cost of revenues		104,490			108,236			123,231

	Gross profit			117,917			105,221			128,634
Operating expenses:
	Research and development			21,007			17,569			18,196
	Selling, general and administrative			86,227			85,668			93,098
	Restructuring charges			1,157			1,315			—

		Total operating expenses		108,391			104,552			111,294

Income from operations				9,526			669			17,340
Interest income				424			619			3,420
Interest expense				(4	)		(15	)		(15	)
Other income (expense)				11			(81	)		(23	)

Income before provision for income taxes				9,957			1,192			20,722
Provision for income taxes				5,065			748			7,998

Net income			$	4,892		$	444		$	12,724

Net income per share—basic			$	0.15		$	0.01		$	0.40
Net income per share—diluted			$	0.15		$	0.01		$	0.38
Weighted average shares outstanding:
	Basic			32,651			31,691			32,076
	Diluted			33,513			32,063			33,108

See Notes to Consolidated Financial Statements

F-3

Table of Contents

OMNICELL, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, except share amounts)

		Common				Treasury

		Common				Treasury												Accumulated Other Comprehensive Income (Loss)
		Shares		Stock Amount		Shares			Stock Amount			Additional Paid In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
Balance at December 31, 2007			34,625,489	$	35		(1,759	)	$	—		$	284,695		$	(30,091	)	$	—	$	254.639
	Net income and comprehensive income		—		—		—			—			—			12,724			—		12,724
	Share-based compensation		—		—		—			—			11,062			—			—		11,062
	Common stock issued under stock option and stock award plans		558,300		—		(10,396	)		—			4,563			—			—		4,563
	Issuance of stock under employee stock purchase plan		238,889		—		—			—			3,387			—			—		3,387
	Purchase of treasury stock, net of commissions		—		—		(4,066,296	)		(65,064	)		—			—			—		(65,064	)
	Income tax benefits realized from employee stock plans		—		—		—			—			12,246			—			—		12,246

Balance at December 31, 2008			35,422,678		35		(4,078,451	)		(65,064	)		315,953			(17,367	)		—		233,557
	Net income and comprehensive income		—		—		—			—			—			444			—		444
	Share-based compensation		—		—		—			—			9,725			—			—		9,725
	Common stock issued under stock option and stock award plans		257,939		—		(16,855	)		—			1,113			—			—		1,113
	Issuance of stock under employee stock purchase plan		392,159		1		—			—			2,928			—			—		2,929
	Income tax charges realized from employee stock plans		—		—		—			—			(5,464	)		—			—		(5,464	)

Balance at December 31, 2009			36,072,776		36		(4,095,306	)		(65,064	)		324,255			(16,923	)		—		242,304
	Net income and comprehensive income		—		—		—			—			—			4,892			—		4,892
	Share-based compensation		—		—		—			—			9,015			—			—		9,015
	Common stock issued under stock option and stock award plans		624,916		1		(25,817	)		—			3,637			—			—		3,638
	Issuance of stock under employee stock purchase plan		451,014		—		—			—			3,364			—			—		3,364
	Income tax benefits realized from employee stock plans		—		—		—			—			2,001			—			—		2,001

Balance at December 31, 2010			37,148,706	$	37		(4,121,123	)	$	(65,064	)	$	342,272		$	(12,031	)	$	—	$	265,214

See Notes to Consolidated Financial Statements

F-4

Table of Contents

OMNICELL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

				Years Ended December 31,

				2010			2009			2008
Cash flows from operating activities
	Net income			$	4,892		$	444		$	12,724
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			8,619			9,428			8,954
		(Recovery of) provision for receivable allowance			(1,259	)		428			1,384
		Asset impairment charge			—			267			182
		Loss(gain) on sale of property and equipment			191			—			(119	)
		(Gain) on legal settlement			(2,439	)		—			—
		Share-based compensation expense			9,015			9,725			11,165
		Provision for excess and obsolete inventories			640			3,119			384
		Deferred tax assets and liabilities			2,403			5,847			(6,049	)
		Income tax benefits(charges) from employee stock plans			2,001			(5,464	)		12,246
		Excess tax benefits from employee stock plans			(1,861	)		(5,375	)		(6,480	)
		Changes in operating assets and liabilities, net of effect of acquired company
			Accounts receivable		(1,317	)		17,190			(21,866	)
			Inventories		77			(693	)		174
			Prepaid expenses		(3,179	)		531			172
			Other current assets		209			3,772			190
			Net investment in sales-type leases		1,412			(446	)		1,249
			Other assets		519			243			139
			Accounts payable		2,859			936			(853	)
			Accrued compensation		(529	)		(794	)		583
			Accrued liabilities		(2,131	)		1,640			(4,195	)
			Deferred service revenue		2,367			7,945			1,621
			Deferred gross profit		(1,970	)		(2,320	)		2,082
			Other long-term liabilities		80			(254	)		611

		Net cash provided by operating activities			20,599			46,169			14,298
Cash flows from investing activities
	Purchases of short-term investments				(8,059	)		—			—
	Acquisition of intangible assets and intellectual property				(198	)		(111	)		(200	)
	Acquisition of privately held company, net of cash acquired				(5,703	)		—			—
	Software development for external use				(2,207	)		(3,039	)		(1,243	)
	Purchases of property and equipment				(6,890	)		(3,645	)		(12,130	)
	Proceeds from the sale of property and equipment				—			—			536

		Net cash used in investing activities			(23,057	)		(6,795	)		(13,037	)
Cash flows from financing activities
	Proceeds from issuance of common stock under employee stock purchase plan and option exercises				7,002			4,042			7,950
	Excess tax benefits from employee stock plans				1,861			5,375			6,480
	Repurchases of treasury stock, net				—			—			(65,064	)

		Net cash provided by (used in) financing activities			8,863			9,417			(50,634	)

Net increase(decrease) in cash and cash equivalents					6,405			48,791			(49,373	)
Cash and cash equivalents at beginning of year					169,230			120,439			169,812

Cash and cash equivalents at end of year				$	175,635		$	169,230		$	120,439

Supplemental disclosures of cash flow informational
Cash paid for interest				$	4		$	11		$	15
Cash paid for taxes				$	1,513		$	320		$	1,240
Supplemental disclosures of non-cash operating activity
Indemnification asset / acquired legal contingency (Note 18)				$	200		$	—		$	—

See Notes to Consolidated Financial Statements

F-5

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization & Summary of Significant Accounting Policies

Description of the Company. Omnicell, Inc. ("Omnicell," "our," "us," "we," or the "Company") was incorporated in California in 1992 under the name Omnicell Technologies, Inc. and reincorporated in Delaware in 2001 as Omnicell, Inc. Our major products are medication and supply dispensing systems which are sold in our principal market, which is the healthcare industry. Our market is primarily located in the United States.

Principles of consolidation. The consolidated financial statements include the accounts of our wholly-owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation.

In 2010, we completed an acquisition of Pandora Data Systems. The consolidated financial statements include the results of operations from this business combination from September 29, 2010, the date of acquisition. Additional disclosure related to the acquisition is provided in Note 2, "Acquisition."

Reclassifications. Certain reclassifications have been made to the prior year consolidated statement of cash flows to conform to the current period presentation, including software development for external use as investing cash flows instead of operating cash flows. None of these reclassifications are material to the consolidated financial statements.

Use of estimates. The preparation of financial statements in accordance with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management's best knowledge of current events and actions that may impact the company in the future, actual results may be different from the estimates. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are revenue recognition, share- based compensation, inventory valuation, valuation of goodwill and purchased intangibles, valuation of long-lived assets and accounting for income taxes.

Cash and cash equivalents. We classify investments as cash equivalents if their original or remaining contractual maturity is three months or less at the date of purchase. Cash equivalents are stated at cost, which approximates fair value. Our cash and cash equivalents are maintained in demand deposit accounts with financial institutions of high credit quality and are invested in institutional money market funds, short-term bank time deposits and similar short duration instruments with fixed maturities from overnight to three months. We continuously monitor the creditworthiness of the financial institutions and institutional money market funds in which we invest our surplus funds. We have not experienced any credit losses from our cash investments.

We classify investments as short-term investments if their original or remaining maturities at purchase are greater than three months and their remaining maturities are one year or less.

Fair value of financial instruments. We value our financial assets and liabilities on a recurring basis using the fair value hierarchy established in Accounting Standards Codification ("ASC") 820, "Fair Value Measurements and Disclosures" (formerly referred to as SFAS No. 157).

F-6

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Organization & Summary of Significant Accounting Policies (Continued)

ASC 820 describes three levels of inputs that may be used to measure fair value, as follows:

Level 1 inputs, which include quoted prices in active markets for identical assets or liabilities;

Level 2 inputs, which include observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and

Level 3 inputs, which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation.

At December 31, 2010 and December 31, 2009, our financial assets utilizing Level 1 inputs included cash equivalents. For these items, quoted market prices are readily available and fair value approximates carrying value. At December 31, 2010 we had a short term investment in California revenue anticipation notes the valuation inputs of which are classified as Level 2. We do not currently have any material financial instruments utilizing Level 3 inputs.

Classification of marketable securities. Marketable securities for which we have the intent and ability to hold to maturity are classified as Held-to-maturity, with carrying value at amortized cost, including accrued interest. At December, 31, 2010 we held $8.1 million of non-U.S. Government securities as a Held-to-maturity short-term investment. We do not hold securities for purposes of trading. However, securities held as investment for the indefinite future, pending future spending requirements are classified as Available-for-sale, with carrying value at Fair Value and any unrealized gain or loss recorded to Other comprehensive income until realized. As of December 31, 2010 and 2009 we held $150.4 million and $153.7 million, respectively of money market mutual funds as Available-for-sale cash equivalents.

Derivatives. We have no instruments that, in whole or in part, are accounted for derivative instruments under ASC 815 "Derivatives and Hedging" (formally referred to as SFAS No. 133).

Revenue recognition. Our products include hardware equipment integrated with software that is essential to the functionality of the equipment. Additionally, we provide unspecified upgrades and enhancements related to our integrated software through our maintenance contracts for most of our products. Accordingly, we account for revenue in accordance with ASC 985, "Software" (formerly referred to as SOP No. 97-2), and all related interpretations. For arrangements with multiple elements, we allocate revenue to each element using the residual method based on vendor specific objective evidence, or VSOE, of the undelivered elements. VSOE of fair value of the undelivered elements is based on the price charged when the element is sold separately.

F-7

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Organization & Summary of Significant Accounting Policies (Continued)

We recognize revenue when the earnings process is complete, based upon our evaluation of whether the following four criteria have been met:

•: Persuasive evidence of an arrangement. We use signed customer contracts and signed customer purchase orders as evidence of an arrangement for leases and sales. For service engagements, we use a signed services agreement and a statement of work to evidence an arrangement.
•: Product delivery. Software and hardware product delivery is deemed to occur upon successful installation and receipt of a signed and dated customer confirmation of installation letter providing evidence that we have delivered what the customer ordered. In instances of a customer self-installed installation, product delivery is deemed to have occurred upon receipt of a signed and dated customer confirmation letter.
•: Fee is fixed or determinable. We assess whether a fee is fixed or determinable at the outset of the arrangement based on the payment terms associated with the transaction. We have established a history of collecting under the original contract without providing concessions on payments, products or services.
•: Collection is probable. We assess the probability of collecting from each customer at the outset of the arrangement based on a number of factors, including the customer's payment history and its current creditworthiness. If, in our judgment, collection of a fee is not probable, we defer the revenue until the uncertainty is removed, which generally means revenue is recognized upon our receipt of cash payment. Our historical experience has been that collection from our customers is generally probable.

In general, for sales not requiring our installation or modification, we recognize sales on delivery of products to our customers. We recognize sales on shipment to distributors since we do not allow for rights of return. We separately sell training and professional services which are not part of multiple element arrangements and not integral to the performance of our systems. We recognize revenue on training and professional services as they are performed.

A portion of our sales are made through multi-year lease agreements. We recognize product related revenue under sales-type leases at the net present value of the lease payment stream under ASC 840, "Leases" (formerly SFAS No. 13) once our installation obligations are met. We optimize cash flows by generally selling our non-U.S. government leases to third-party leasing finance companies on a non-recourse basis. We exclude from revenues any amounts paid to us related to the termination of an existing lease. Generally, we have no obligation to the leasing company once the lease is sold. Some of our lease sales, mostly those relating to U.S. government hospitals, are retained in-house as sales-type leases which we account for in accordance with ASC 840. Interest income in sales-type leases is recognized in product revenue using the interest method.

Accounts receivable, net and net investment in sales type leases. We actively manage our accounts receivable to minimize credit risk. We typically sell to customers for which there is a history of successful collection. New customers are subject to a credit review process, which evaluates the customers' financial position and ability to pay. We continually monitor and evaluate the collectability of our trade receivables based on a combination of factors. We record specific allowances for doubtful accounts when we become aware of a specific customer's impaired ability to meet its financial obligation to us, such as in the case of bankruptcy filings or deterioration of financial position.

F-8

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Organization & Summary of Significant Accounting Policies (Continued)

Uncollectible amounts are charged off against trade receivables and the allowance for doubtful accounts when we make a final determination there is no reasonable expectation of recovery. Estimates are used in determining our allowances for all other customers based on factors such as current trends, the length of time the receivables are past due and historical collection experience. While we believe that our allowance for doubtful accounts receivable is adequate and that the judgment applied is appropriate, such amounts estimated could differ materially from what will actually be uncollectible in the future.

The retained in-house leases discussed above are considered financing receivables. Our credit policies and evaluation of credit risk and write-off policies are applied alike to trade receivables and the net-investment in sales-type leases. For both, an account is generally past due after thirty days. The financing receivables also have customer-specific reserves for accounts identified for specific impairment, and a non-specific reserve applied to the remaining population, based on factors such as current trends, the length of time the receivables are past due and historical collection experience. The retained in-house leases are not stratified by portfolio or class. Financing receivables which are reserved are generally transferred to cash-basis accounting, so that revenue is recognized only as cash is received. However, the cash basis accounts continue to accrue interest.

Sales of accounts receivable. We offer our customers multi-year, non-cancelable payment terms. Generally we sell non-U.S. government receivables to third-party leasing companies on a non-recourse basis. We reflect the financing costs on the sale of these receivables as a component of our revenue. We record the sale of our accounts receivables as "true sales" in accordance with ASC 860, "Transfers and Servicing" (formerly referred to as SFAS No. 140). During the years ended 2010, 2009 and 2008, we transferred non-recourse accounts receivable totaling $51.4 million, $53.7 million and $61.4 million, respectively, which approximated fair value, to leasing companies on a non-recourse basis. At December 31, 2010 and 2009, accounts receivable included approximately $0.3 million and $1.6 million, respectively, due from third party leasing companies for transferred non-recourse accounts receivable.

Concentration of credit risk. At December 31, 2010 and 2009, no single customer accounted for more than 10% of our combined accounts receivable balance.

Commissions. Sales commissions generally are earned upon order receipt, but are recognized in income at the time of revenue recognition. Before they are recognized as expense they are recorded as prepaid commissions, which are a component of prepaid expenses.

Geographic risk. Approximately 3% of our product revenue for the year ended December 31, 2010 and 6% of our product revenue for the year ended December 31, 2009 was from foreign countries. Less than 1% of our net assets were located in foreign countries at both December 31, 2010 and December 31, 2009.

Dependence on suppliers. We have supply agreements for construction and supply of several sub-assemblies and inventory management of sub-assemblies used in our hardware products. Our contracts with our suppliers may generally be terminated by either the supplier or by us without cause and at any time upon delivery of notice that typically ranges from two months to six months. While many components of our systems are standardized and available from multiple sources, certain components or subsystems are fabricated by a sole supplier according to our specifications and timing requirements. A critical supplier may have modest annual deliveries to us, and yet be significant in

F-9

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Organization & Summary of Significant Accounting Policies (Continued)

terms of potential for disrupting production schedules for particular products. In terms of overall concentration, in 2010 and 2009 there was one high-volume supplier and in 2008 two high-volume suppliers. Purchases from these suppliers for the years ended December 31, 2010, 2009 and 2008 were approximately $19.1 million, $19.7 million and $25.2 million, respectively.

Inventory. Inventories are stated at the lower of cost (utilizing standard costs, using the first-in, first-out method) or market. Cost elements included in inventory are direct labor and materials plus applied overhead. We routinely assess on-hand inventory for timely identification and measurement of obsolete, slow-moving or otherwise impaired inventory. We write down our inventory for estimated obsolescence, excess or unmarketable quantities equal to the difference between the cost of the inventory and its estimated market value based on assumptions about future demand and market conditions. If actual future demand or market conditions are less favorable than we projected, additional inventory write-downs may be required.

Property and equipment. Property and equipment less accumulated depreciation are stated at historical cost. We develop molds and dies for long-term supply arrangements and capitalize those development costs as equipment. There were $1.4 million and $0.5 million of these pre-production costs related to long-term supply arrangements capitalized at December 31, 2010 and 2009, respectively. There were no pre-production costs in 2008. Depreciation and amortization of property and equipment are provided over their estimated useful lives, using the straight-line method, as follows:


Computer equipment and related software		3 - 5 years
Leasehold and building improvements		Shorter of the lease term or the estimated useful life
Furniture and fixtures		5 years
Equipment and vehicles		2 - 5 years

Internal use software. We capitalize costs related to computer software developed or obtained for internal use in accordance with ASC 350-40, "Internal-Use Software" (formerly referred to as SOP 98-1). Software obtained for internal use has generally been enterprise-level business and finance software that we customize to meet our specific operational needs. Costs incurred in the application development phase are capitalized and amortized over their useful lives, which is generally five years. Costs recognized in the preliminary project phase and the post-implementation phase are expensed as incurred. At December 31, 2010 and December 31, 2009, we had $7.0 million and $7.6 million of costs related to application development of enterprise-level software included in property and equipment, respectively.

Software development costs. We capitalize software development costs in accordance with ASC 985-20, "Costs of Software to Be Sold, Leased, or Marketed" (formerly referred to as SFAS No. 86), under which certain software development costs incurred subsequent to the establishment of technological feasibility may be capitalized and amortized over the estimated lives of the related products. We establish feasibility when we complete a working model and amortize development costs over the estimated lives of the related products ranging from three to five years. During 2010 and 2009, we capitalized software development costs of $2.2 million and $3.0 million, respectively, which are

F-10

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Organization & Summary of Significant Accounting Policies (Continued)

presented in other assets. For the years ended December 31, 2010, 2009 and 2008, we charged to cost of revenues $0.9 million, $0.5 million and $0.5 million, respectively, for amortization of capitalized software development costs. All development costs prior to the completion of a working model are recognized as research and development expense.

Valuation and impairment of goodwill, other intangible assets and other long lived assets. We account for goodwill and other intangible assets in accordance with ASC 350, "Intangibles—Goodwill and Other" (formerly referred to as SFAS No. 142). For the initial recognition and measurement of Goodwill and Intangibles resulting from acquisitions, we use the guidance in ASC 805, "Business Combinations" (formerly referred to as SFAS No. 141-(R)).

Goodwill and intangible assets with indefinite lives are not amortized; rather, they are tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that they may be impaired. We perform our goodwill impairment test during the fourth quarter of each year and between the annual test in certain circumstances.

We passed the first step of our annual impairment test for 2010. In addition, there were no indicators of impairment as of December 31, 2010.

•: identifying a triggering event that arises from a change in circumstances;
•: forecasting future operating results; and
•: estimating the proceeds from the disposition of long-lived or intangible assets.

F-11

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Organization & Summary of Significant Accounting Policies (Continued)

useful life for each acquired intangible impacts future financial position and operating performance through amortization expense.

Deferred revenue and deferred gross profits. Deferred revenue arises when customers are billed for products and/or services in advance of revenue recognition. Our deferred revenue consists primarily of unearned revenue on sale of equipment for which installation has not been completed, and software licenses for which revenue is recognized over the duration of the license and the unearned portion of support service contracts.

Valuation of share-based awards. We account for share-based compensation plans in accordance to the provisions of ASC 718, "Stock Compensation" (formerly referred to as SFAS No. 123(R)). We estimate the fair value of our employee stock awards at the date of grant using certain subjective assumptions, such as expected volatility, which is based on a combination of historical and market- based implied volatility, and the expected term of the awards which is based on our historical experience of employee stock option exercises including forfeitures. Our valuation assumptions used in estimating the fair value of share-based awards may change in future periods. We recognize the fair value of awards over their vesting period or requisite service period. In addition, we calculate our pool of excess tax benefits available within additional paid-in capital in accordance with the provisions of ASC 718.

Accounting for income taxes. We record a tax provision for the anticipated tax consequences of the reported results of operations. In accordance with GAAP, the provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carry forwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the periods in which those tax assets and liabilities are expected to be realized or settled. In the event that these tax rates change, we will incur a benefit or detriment to our income tax expense in the period of change. We can also determine that all or part of the net deferred tax assets are not realizable in the future, we will record a valuation allowance that would be charged to earnings in the period such determination is made.

Please refer to Note 14, "Income Taxes" for further information.

Shipping and handling costs. Our shipping and handling costs charged to customers are included in net revenue and the associated expense is recorded in selling, general and administrative expenses

F-12

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Organization & Summary of Significant Accounting Policies (Continued)

for all periods presented. Shipping and handling costs amounted to $2.1 million, $1.9 million and $2.6 million for the years ended December 31, 2010, 2009 and 2008, respectively.

Advertising. Advertising costs are expensed as incurred and amounted to $1.1 million, $0.7 million and $0.6 million for the years ended December 31, 2010, 2009 and 2008, respectively.

Operating leases. We lease our buildings under operating leases accounted for in accordance with ASC 840, "Leases" (formerly referred to as SFAS No. 13).

Sales taxes. Sales taxes collected from customers and remitted to governmental authorities are not included in our revenue.

Net income per share. Basic net income per share is computed by dividing net income—the numerator—by the weighted average number of shares outstanding—the denominator—during the period excluding the dilutive effect of stock options and other employee stock plans. Diluted net income per share gives effect to all potentially dilutive common stock equivalents outstanding during the period. In computing diluted net income per share under the treasury stock method, the average stock price for the period is used in determining the number of shares assumed to be purchased from the proceeds of stock option exercises.

Foreign currency translation. The functional currency of our foreign subsidiary is the U.S. dollar. Non-functional currency monetary balances are re-measured into the functional currency of the subsidiary with any related gain or loss recorded in other income, in the accompanying Consolidated Statements of Operations.

Segment information. We manage our business on the basis of a single operating segment, and a single reporting unit within that segment per ASC 280, "Segment reporting" (formerly referred to as SFAS No. 131). Our products and technologies share similar distribution channels and customers and are sold primarily to hospitals and healthcare facilities to improve patient safety and care and enhance operational efficiency. Our sole operating segment is medication and supply dispensing systems. The September 2010 acquisition of Pandora Data Systems resulted in neither the creation of a new reporting unit nor a new operating segment. Substantially all of our long-lived assets are located in the United States. For the years ended December 31, 2010, 2009 and 2008, all of our total revenues and gross profits were generated by the medication and supply dispensing systems operating segment from customers in the United States and no one customer accounted for greater than 10% of our revenues.

Recently Issued and Adopted Accounting Standards

In October 2009, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") 2009-13 and 2009-14, or ASU 2009-13 and ASU 2009-14, which amended ASC 605, "Revenue Recognition," and ASC 985-605, "Software-Revenue Recognition," respectively. ASU 2009-13 requires companies to allocate arrangement consideration in multiple-element arrangements based on an element's estimated selling price if vendor-specific or other third-party evidence of selling price is not available. ASU 2009-14 revises the guidance regarding the types of arrangements that fall under the scope of the software recognition guidance, providing a scope exception for many transactions that were previously within the scope of Subtopic ASC 985-605, including tangible products containing software components and non-software components that function together to deliver the product's essential functionality and places them under Subtopic ASC 605-25,

F-13

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Organization & Summary of Significant Accounting Policies (Continued)

thus requiring the new multiple-element revenue allocation under ASU 2009-13. Both ASU 2009-13 and ASU 2009-14 are effective for fiscal years beginning on or after June 15, 2010 and we intend to adopt these ASUs at the beginning of our fiscal year 2011. We are currently evaluating the how the adoption of these ASUs will impact our operating results, financial position and cash flows.

In July 2010, the FASB issued "Disclosure about the Credit Quality of Financing Receivables and the Allowance for Credit Losses" as ASU 2010-20, amending ASC 310, "Receivables." ASU 2010-20 requires certain disclosures about the credit quality of financing receivables and the related allowance for credit losses. In addition, disclosures are required related to the nature of credit risk inherent in the portfolio of financing receivables, how the credit risk is analyzed and assessed in arriving at the allowance for credit losses, and the changes and reasons for those changes in the allowance for credit losses. For public entities, the new disclosures for the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010, with new disclosures about period activity effective for interim and annual reporting periods beginning on or after December 15, 2010. The period end disclosures are effective for us for December 31, 2010, with the period-activity disclosures are effective beginning with the first quarter of 2011. As ASU 2010-20 is a disclosure standard, we do not anticipate the adoption of this standard to have any impact on our operating results, financial position or cash flows.

Note 2. Acquisition

On September 29, 2010, we completed the acquisition of all of the outstanding capital stock of Pandora Data Systems, Inc. ("Pandora"), a provider of analytical software for medication diversion detection and regulatory compliance, for $6.0 million in cash. Pandora solutions are installed in over 700 acute care hospitals in the United States and interface with all major medication management systems in the market.

In connection with the acquisition, we recorded $3.6 million of goodwill, equal to the excess of the purchase price over the fair values of the net tangible and intangible assets acquired, which is tax-

F-14

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 2. Acquisition (Continued)

deductible over a fifteen-year period. The following table summarizes the Fair Value acquisition accounting for Pandora on the September 29, 2010 purchase date (amounts in thousands of dollars):

		Fair Values Acquired

Cash		$	297
Accounts receivable			416
Indemnification asset (see Note 18)			1,000
Intangibles			2,420
Goodwill			3,561
Deferred tax asset			108

	Total assets		7,802
Accrued compensation/other			292
Deferred service revenue			510
Litigation contingency (see Note 18)			1,000

	Total liabilities		1,802
Net assets acquired		$	6,000

Cash consideration		$	6,000

The $0.4 million fair value of accounts receivable consists of gross contractual commitments from customers less the amount not expected to be collected. The $0.5 million of deferred service revenue represents the fair value, using estimated discounted cash flows, of acquired remaining performance obligations under service contracts.

Additionally, an acquired legal contingency related to a contractual dispute between Pandora and a third party resulted in a liability accrual of $1.0 million, measured under ASC 450 Contingencies guidance. An indemnification asset of $1.0 million was also recorded, since the former shareholders of Pandora had agreed to indemnify Omnicell against losses related to the litigation and a portion of the purchase price was placed in escrow to secure the indemnification obligations of the former Pandora shareholders. As discussed in Note 18, this lawsuit was settled February 17, 2011 for $1.2 million, to be paid entirely from the selling shareholders' escrow account. As this is considered a new development since there was no evidence of conditions existing at the September 29, 2010 acquisition date, the disclosure of these amounts in the original purchase price allocation has not been adjusted. However, our balance sheet as of December 31, 2010 reflects the updated $1.2 million values for the acquired legal contingency and the indemnification asset, as required for recognized subsequent events. There was no impact on net income.

F-15

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 2. Acquisition (Continued)

The fair values and useful lives for the identified intangible assets in the table below were determined by management, with assistance of valuation specialists. No residual values were assumed for the acquired intangible assets.

	Thousands of Dollars

Trade name	$	90	3
Customer relationships		1,290	16
Non-compete agreements		60	3
Acquired technology		980	7

Finite-lived intangibles acquired	$	2,420

Weighted avg. life of intangibles			11.5

Operating results of Pandora have been combined with our operating results from the date of acquisition. Pro forma combined operating results for Omnicell and Pandora for the years ended December 31, 2010 and 2009 have been omitted since the results of operations of Pandora were not material.

Note 3. Net Income Per Share

Basic net income per share is computed by dividing net income for the period by the weighted average number of shares outstanding during the period, less shares subject to repurchase. Diluted net income per share is computed by dividing net income for the period by the weighted average number of shares less shares subject to repurchase plus, if dilutive, potential common stock outstanding during the period. Potential common stock includes the effect of outstanding dilutive stock options, restricted stock awards and restricted stock units computed using the treasury stock method. Potential common stock which is anti-dilutive is excluded. Since their impact is anti-dilutive, the total number of shares excluded from the calculations of diluted net income per share for the years ended December 31, 2010, December 31, 2009 and December 31, 2008 were 2,005,642 shares, 4,061,857 shares and 1,713,276 shares, respectively.

F-16

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 3. Net Income Per Share (Continued)

The calculation of basic and diluted net income per share is as follows (in thousands, except per share amounts):

		Years Ended December 31,

		2010		2009		2008
Basic:
	Net income	$	4,892	$	444	$	12,724
	Weighted average shares outstanding—basic		32,651		31,691		32,076

	Net income per share—basic	$	0.15	$	0.01	$	0.40

Diluted:
	Net income	$	4,892	$	444	$	12,724
	Weighted average shares outstanding—basic		32,651		31,691		32,076
	Dilutive effect of employee stock plans		862		372		1,032

	Weighted average shares outstanding—diluted		33,513		32,063		33,108

	Net income per share—diluted	$	0.15	$	0.01	$	0.38

Note 4. Cash and Cash Equivalents, Short-term Investments and Fair Value of Financial Instruments

Cash and cash equivalents and short-term investments consist of the following significant investment asset classes, with disclosure of carrying cost, gross unrealized gains and losses, and fair value as of December 31, 2010 and 2009, respectively (in thousands):

	December 31, 2010

	Carrying Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cash / cash equivalents		Short-term investments		Security classification
Cash	$	25,593		—		—	$	25,593	$	25,593		—	N/A
Money market funds		150,042		—		—		150,042		150,042		—	Available for sale
Non-U.S. government securities		8,074	$	12		—		8,086		—	$	8,074	Held-to-maturity

Total cash, cash equivalents and short-term investments	$	183,709	$	12		—	$	183,721	$	175,635	$	8,074

	December 31, 2009

	Carrying Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cash / cash equivalents		Short-term investments		Security classification
Cash	$	15,530		—		—	$	15,530	$	15,530		—	N/A
Money market funds		153,700		—		—		153,700		153,700		—	Available for sale

Total cash, cash equivalents and short-term investments	$	169,230		—		—	$	169,230	$	169,230		—

F-17

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 4. Cash and Cash Equivalents, Short-term Investments and Fair Value of Financial Instruments (Continued)

The money market fund is a daily-traded cash equivalent with price of $1.00, making it a Level 1 asset class; its carrying cost closely approximates fair value. As the demand deposit (cash) balances vary with the timing of collections and payments, the money market fund can cover any surplus or deficit, and thus is considered available-for-sale.

The short term investments purchased in November 2010 are comprised of California revenue anticipation notes, which mature in June 2011. They are recorded at their carrying cost as held-to-maturity as we have both the ability and intent to keep these investments until they mature. The notes are a Level 2 asset class, because their pricing is drawn from multiple market-related inputs, but in general not from same-day, same-security trades.

The following table displays the financial assets measured at fair value, on a recurring basis (in thousands):

		Quoted Prices in Active Markets for Identical Instruments (Level 1)				Total Fair Value

At December 31, 2010
Money market funds		$	150,042	—	—	$	150,042

	Total	$	150,042	—	—	$	150,042

At December 31, 2009
Money market funds		$	153,700	—	—	$	153,700

	Total	$	153,700	—	—	$	153,700

Current assets and current liabilities are recorded at amortized cost, which approximates fair value due to the short maturities implied.

The following table displays the financial assets measured at carrying cost, but for which disclosure of fair value is required on a recurring basis (in thousands):

			Significant Other Observable Inputs (Level 2)			Total Fair Value

At December 31, 2010
Non-U.S. Government securities		—	$	8,086	—	$	8,086

	Total	—	$	8,086	—	$	8,086

At December 31, 2009
Non-U.S. Government securities		—		—	—		—

	Total	—		—	—		—

F-18

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 5. Inventories

Inventories consist of the following (in thousands):

		December 31,

		2010		2009
Raw materials		$	4,252	$	3,589
Work in process			153		171
Finished goods			5,380		6,742

	Total	$	9,785	$	10,502

Note 6. Property and Equipment

Property and equipment consist of the following (in thousands):

	December 31,

	2010			2009
Equipment and vehicles	$	20,045		$	17,942
Furniture and fixtures		1,681			1,236
Leasehold improvements		3,182			3,248
Purchased software		18,095			15,042
Capital in process		1,689			2,746

		44,692			40,214
Accumulated depreciation and amortization		(30,341	)		(27,005	)

Property and equipment, net	$	14,351		$	13,209

Depreciation and amortization of property and equipment was approximately $5.6 million, $6.6 million and $5.7 million for the years ended December 31, 2010, 2009 and 2008, respectively.

Note 7. Net Investment in Sales-Type Leases

Our sales-type leases are for terms generally ranging up to five years. Sales-type lease receivables are collateralized by the underlying equipment. The components of our net investment in sales-type leases are as follows (in thousands):

	December 31,

	2010		2009
Net minimum lease payments to be received	$	16,284	$	17,164
Less unearned interest income portion		1,843		2,001

Net investment in sales-type leases		14,441		15,163
Less current portion(1)		5,217		5,059

Non-current net investment in sales-type leases(2)	$	9,224	$	10,104

(1): A component of other current assets. This amount is net of allowance for doubtful accounts of $0.1 million at December 31, 2010 and $0 at December 31, 2009.

F-19

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 7. Net Investment in Sales-Type Leases (Continued)

(2): Net of allowance for doubtful accounts of $0.3 million and $0.6 million as of December 31, 2010 and December 31, 2009, respectively.

The minimum lease payments for each of the five succeeding fiscal years are as follows (in thousands):


2011		$	6,425
2012			4,704
2013			2,781
2014			1,660
2015			690
Thereafter			24

	Total	$	16,284

The following table summarizes the credit losses and recorded investment in sales-type leases, excluding unearned interest, as of December 31, 2010 (in thousands):

	Allowance for credit losses		Recorded investment in sales- type leases-Gross		Recorded investment in sales- type leases-Net

Accounts individually evaluated for impairment	$	283	$	283	$	—
Accounts collectively evaluated for impairment		128		14,569		14,441

Ending balances: December 31, 2010	$	411	$	14,852	$	14,441

Note 8. Goodwill and Other Intangible Assets

Under ASC 350, "Intangibles—Goodwill and Other," goodwill is not subject to amortization. We evaluate goodwill for impairment at least annually or more frequently if events and changes in circumstances suggest that the carrying amount may not be recoverable. In 2010, the increase in goodwill of $3.6 million was due to the acquisition of Pandora Data Systems. In 2008, the increase in goodwill of $1.9 million was due to finalizing the working capital valuation, the discovery of pre-existing liabilities and revised estimates of liabilities assumed relating to the acquisition of Rioux Vision. No goodwill impairment was recognized in 2010, 2009 or 2008.

F-20

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 8. Goodwill and Other Intangible Assets (Continued)

Goodwill and other intangible assets consist of the following (in thousands):

		December 31, 2010						December 31, 2009

		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Amortization Life
Finite-lived intangibles:
	Customer relationships	$	4,230	$	1,142	$	3,088	$	3,184	$	999	$	2,185	5 - 16 years
	Acquired technology		5,660		4,715		945		9,364		7,888		1,476	3 - 7 years
	Patents		654		152		502		455		110		345	20 years
	Non-compete agreements		780		725		55		720		493		227	3 years
	Trade name		90		8		82		—		—		—	3 year

Total finite-lived intangibles			11,414		6,742		4,672		13,723		9,490		4,233

Goodwill			28,543		—		28,543		24,982		—		24,982	Indefinite

	Net other intangible assets & goodwill	$	39,957	$	6,742	$	33,215	$	38,705	$	9,490	$	29,215

During 2010, 2009 and 2008, we capitalized third-party costs associated with internally developed patent costs of $0.2 million, $0.1 million and $0.2 million, respectively. Additionally, in 2008, we recorded an impairment charge of approximately $0.2 million to write-off capitalized patents costs due to certain technologies either being abandoned or product lines being discontinued. The impairment charge is recorded as a selling, general and administrative expense in our Consolidated Statements of Operations.

Amortization expense of other intangible assets totaled $2.2 million, $2.4 million and $2.8 million for the years ended December 31, 2010, 2009 and 2008, respectively. Amortization expenses are recorded in cost of product revenues and also in selling, general and administrative expenses, based on the nature of the underlying intangible asset. Estimated future amortization expense of the finite-lived intangible assets at December 31, 2010 is as follows (in thousands):


2011		$	653
2012			653
2013			641
2014			601
2015			579
Thereafter			1,545

	Total	$	4,672

F-21

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 8. Goodwill and Other Intangible Assets (Continued)

The following goodwill roll-forward table consists of a single segment / single reporting unit (in thousands):

		Gross Carrying Amount		Accumulated Impairment Losses		Net Carrying Amount

Beginning balance, January 1, 2010 and 2009		$	24,982	$	—	$	24,982
	Goodwill acquired during year		3,561		—		3,561
	Impairment losses		—		—		—

Ending balance, December 31, 2010		$	28,543	$	—	$	28,543

Note 9. Other Assets

Other assets consist of the following (in thousands):

	December 31,

	2010		2009
Long-term deposits	$	383	$	473
Capitalized software development costs, net of accumulated amortization of $3,441 and $2,569 in 2010 and 2009, respectively		5,462		4,127
Non-current deferred service billings receivable		2,162		4,347
Other assets		358		375

Total	$	8,365	$	9,322

Note 10. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

		December 31,

		2010		2009
Accrued GPO (Group Purchasing Organization) fees		$	2,272	$	2,932
Advance payments from customers			1,978		662
Rebates and lease buyouts			1,923		1,140
Pre-acquisition contingency			1,200		5,269
Other			1,311		1,994

	Total	$	8,684	$	11,997

F-22

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 11. Deferred Gross Profit

Deferred gross profit consists of the following (in thousands):

	December 31,

	2010			2009
Sales of medication and supply dispensing systems, which have been delivered and invoiced but not yet installed	$	18,739		$	20,876
Cost of sales, excluding installation costs		(7,020	)		(7,187	)

Deferred gross profit	$	11,719		$	13,689

Note 12. Commitments

The minimum payments under our operating leases for each of the five succeeding fiscal years are as follows (in thousands):


2011		$	3,875
2012			1,667
2013			500
2014			350
2015			178

	Total		6,570

Commitments under operating leases relate primarily to leasehold property and office equipment. For 2011, we have $0.5 million of non-cancellable sublease income. In April 2010, we entered into a lease agreement to replace certain expiring leases with approximately 25,000 square feet of office space in Nashville, Tennessee. The new lease is for a term of 60 months, and commenced July 2010, with two five-year renewal options. The base rental commitment for the initial five-year term totals $1.7 million. Rent expense totaled $3.6 million, $3.5 million and $3.4 million for the years ended December 31, 2010, 2009 and 2008, respectively.

We purchase components from a variety of suppliers and use contract manufacturers to provide manufacturing services for our products. During the normal course of business, we issue purchase orders with estimates of our requirements several months ahead of the delivery dates. Our near-term commitments to our contract manufacturers and suppliers totaled $4.9 million as of December 31, 2010.

Note 13. Contingencies

Legal Proceedings

F-23

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 13. Contingencies (Continued)

Solutions, LLC v. Omnicell, Inc., Case Number 1:06-cv-02600, in the same Court alleging similar claims of patent infringement regarding Omnicell's sale of the mobile carts acquired in the Rioux acquisition. In accordance with Accounting Standards Codification, or ASC, 805, "Business Combinations," we recorded a pre-acquisition contingency based on our assessment of its fair value in our preliminary purchase price allocation. The fair value for this pre-acquisition contingency represents the amount we and Rioux agreed to adjust the purchase price as a result of our acceptance of any and all costs and risks relating to this contingency. The pre-acquisition contingency was recorded as an accrued liability as of the acquisition date.

Medacist Solutions Group, LLC. On July 8, 2009, Medacist Solutions Group LLC filed a complaint against Omnicell in U.S. District Court in the Southern District of New York, entitled Medacist Solutions Group LLC v. Omnicell, Inc., case number 09 CV 6128, alleging infringement of Medacist's U.S. Patent Number 6,842,736. The complaint also, among other claims, alleges that Omnicell breached the terms of a nondisclosure agreement it had entered into with Medacist, and that Omnicell misappropriated Medacist's trade secrets and confidential information in violation of the NDA. Medacist is seeking unspecified monetary damages and an injunction against the Company's infringement of the specified patent and/or misuse of any of Medacist's trade secrets pursuant to the NDA or in violation of California code. Omnicell has responded to the complaint, denies the claims, and intends to defend the matter vigorously. In June 2010, the Court issued its Civil Case Management Plan and Scheduling Order indicating that discovery in the case will be conducted through March 11, 2011.

On October 20, 2010, the Company filed a declaratory judgment complaint against Medacist Solutions Group, LLC in the U.S. District Court in the Northern District of California, entitled

F-24

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 13. Contingencies (Continued)

Omnicell, Inc. and Pandora Data Systems, Inc. v. Medacist Solutions Group, LLC, Case Number 10-cv-4746 (the "California Action"). Pandora Data Systems, Inc. had entered into a Settlement and License Agreement with Medacist in October 2008 (the "Settlement Agreement") pursuant to which, among other things, Medacist granted to Pandora a non-exclusive license to Medacist's U.S. Patent Number 6,842,736. The Company seeks an order declaring that Omnicell, as now-owner of Pandora Data Systems, Inc., is entitled to certain rights and benefits under the license. On November 12, 2010, Medacist filed a motion to dismiss the California Action, or in the alternative, to transfer venue to the U.S. District Court for the District of Connecticut. On February 10, 2011, the Court granted Medacist's motion and dismissed the California Action without prejudice. On February 14, 2011, Omnicell and Pandora filed a notice of appeal regarding dismissal of the California Action with the U.S. Court of Appeals for the Ninth Circuit (the "California Appeal"). The California Appeal is now pending. Also on November 12, 2010, Medacist filed a motion in the U.S. District Court in the District of Connecticut to reopen a litigation entitled Medacist Solutions Group, LLC v. Pandora Data Systems, Inc., Case Number 3:07-CV-00692(JCH) (the "Connecticut Litigation"), which had been dismissed and administratively closed since October 29, 2008. Medacist seeks, among other things, relief from the Stipulation of Dismissal entered on October 29, 2008 dismissing the Connecticut Litigation for the limited purpose of interpreting and enforcing the Settlement Agreement, the entry of a temporary restraining order and preliminary and permanent injunctions prohibiting breaches of the Settlement Agreement, a finding that Pandora breached the Settlement Agreement and an award of monetary damages resulting from Pandora's alleged breaches. On December 3, 2010, the Company and Pandora filed a response to this motion. At this time, the Connecticut Litigation remains closed, and no hearings have been scheduled on Medacist's motion. While it is reasonably possible the Company could, at some point in the future, incur a loss in connection with this matter, management at this time cannot determine the range of any such potential loss.

As required under ASC 450, "Contingencies," we accrue for contingencies when we believe that a loss is probable and that we can reasonably estimate the amount of any such loss. We have made an assessment of the probability of incurring any such losses and such amounts are reflected in accrued liabilities in our consolidated financial statements. Except as otherwise indicated above, we believe that the outcomes in these matters are not probable or reasonably estimable. We believe that we have valid defenses with respect to legal matters pending against us. However, litigation is inherently unpredictable, and it is possible that cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies or because of the diversion of management's attention and the creation of significant expenses.

Guarantees

As permitted under Delaware law and our certificate of incorporation and bylaws, we have agreed to indemnify our directors and officers against certain losses that they may suffer by reason of the fact that such persons are, were or become our directors or officers. The term of the indemnification period is for the director's or officer's lifetime and there is no limit on the potential amount of future payments that we could be required to make under these indemnification agreements. We have purchased directors' and officers' liability insurance policy that may enable us to recover a portion of any future payments that we may be required to make under these indemnification agreements. Assuming the applicability of coverage and the willingness of the insurer to assume coverage and subject to certain retention, loss limits and other policy provisions, we believe it is unlikely that we will

F-25

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 13. Contingencies (Continued)

be required to pay any material amounts pursuant to these indemnification obligations. However, no assurances can be given that the insurers will not attempt to dispute the validity, applicability or amount of coverage without expensive and time-consuming litigation against the insurers.

Additionally, we undertake indemnification obligations in our ordinary course of business in connection with, among other things, the licensing of our products and the provision of our support services. In the ordinary course of our business, we have in the past and may in the future agree to indemnify another party, generally our business affiliates or customers, against certain losses suffered or incurred by the indemnified party in connection with various types of claims, which may include, without limitation, claims of intellectual property infringement, certain tax liabilities, our gross negligence or intentional acts in the performance of support services and violations of laws. The term of these indemnification obligations is generally perpetual. In general, we attempt to limit the maximum potential amount of future payments that we may be required to make under these indemnification obligations to the amounts paid to us by a customer, but in some cases the obligation may not be so limited. In addition, we have in the past and may in the future warrant to our customers that our products will conform to functional specifications for a limited period of time following the date of installation (generally not exceeding 30 days) or that our software media is free from material defects. From time to time, we may also warrant that our professional services will be performed in a good and workmanlike manner or in a professional manner consistent with industry standards. We generally seek to disclaim most warranties, including any implied or statutory warranties such as warranties of merchantability, fitness for a particular purpose, title, quality and non-infringement, as well as any liability with respect to incidental, consequential, special, exemplary, punitive or similar damages. In some states, such disclaimers may not be enforceable. If necessary, we would provide for the estimated cost of product and service warranties based on specific warranty claims and claim history. We have not been subject to any significant claims for such losses and have not incurred any material costs in defending or settling claims related to these indemnification obligations. Accordingly, we believe it is unlikely that we will be required to pay any material amounts pursuant to these indemnification obligations or potential warranty claims and, therefore, no liabilities have been recorded for such indemnification obligations as of December 31, 2010 or 2009.

Note 14. Income Taxes

The following is a geographical breakdown of income before the provision for income taxes (in thousands):

		Year Ended December 31,

		2010		2009		2008
Domestic		$	9,551	$	844	$	20,205
Foreign			406		348		517

	Total income before provision for income taxes	$	9,957	$	1,192	$	20,722

F-26

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Income Taxes (Continued)

The provision for income taxes consists of the following (in thousands):

			Year Ended December 31,

			2010		2009			2008
Current:
	Federal		$	196	$	504		$	4,437
	State			207		360			1,394
	Foreign			369		27			54

		Total current		771		891			5,885

Deferred:
	Federal			3,757		20			2,510
	State			473		(163	)		(351	)
	Foreign			64		—			(46	)

		Total deferred		4,294		(143	)		2,113

		Total provision for income taxes	$	5,065	$	748		$	7,998

The provision for income taxes differs from the amount computed by applying the statutory federal tax rate as follows (in thousands):

	Year Ended December 31,

	2010			2009			2008
U.S. federal tax provision at statutory rate	$	3,485		$	417		$	7,253
State taxes		543			198			678
Non-deductible expenses		350			97			356
Share-based compensation expense		244			281			1,276
Research tax credits		(137	)		10			(1,223	)
Repatriation of foreign earnings		560			—			—
Other		20			(255	)		(342	)

Total	$	5,065		$	748		$	7,998

F-27

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Income Taxes (Continued)

Significant components of our deferred tax assets (liabilities) are as follows (in thousands):

		December 31,

		2010			2009
Deferred tax assets (liabilities):
	Tax credit carry forwards	$	3,135		$	2,845
	Inventory related items		2,998			3,085
	Reserves and accruals		(963	)		92
	Deferred revenue		11,010			11,912
	Depreciation and amortization		(1,863	)		251
	Stock compensation		8,177			6,567
	Other, net		124			161

	Total deferred tax assets (liabilities)		22,618			24,913
	Valuation allowance		—			—

Net deferred tax assets (liabilities)		$	22,618		$	24,913

Deferred income tax assets (liabilities) are provided for temporary differences that will result in future tax deductions or future taxable income, as well as the future benefit of tax credit carry forwards. In 2010, our deferred tax assets, before valuation allowance, decreased by approximately $2.3 million.

Management believes that deferred tax assets are more likely than not to be realized in accordance with ASC 740-10-30. In the event that the Company determines all or part of the net deferred tax assets are not realizable in the future, the Company will make an adjustment to the valuation allowance that would be charged to earnings in the period such determination is made.

Pursuant to the requirements of ASC 718, we do not include unrealized stock option attributes as components of our gross deferred tax assets. The tax effected amounts of gross unrealized net operating loss and business tax credit carry forwards excluded under ASC 718 for the year ended December 31, 2010 are approximately $7.7 million, which will result in increases to additional paid in capital if and when realized as a reduction in income taxes otherwise paid.

As of December 31, 2010, the federal and state net operating loss carry forwards available for income tax purposes are approximately $6.6 million and $7.5 million, respectively. These net operating losses begin to expire in the years 2025 and 2017 for federal and state, respectively. For income tax purposes, we have federal and California research tax credits of approximately $6.3 million and $5.1 million, respectively. Federal research tax credits carry forwards will expire in years 2017 through 2030. California credits are available indefinitely to reduce cash taxes otherwise payable. The benefits of all net operating loss and tax credit carryovers, if realized will be recognized as additional paid in capital.

We file income tax returns in the U.S. Federal jurisdiction, various states and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities, including major jurisdiction as the United States, California and India. Our tax years beginning in 2007 and 2006 remain effectively open to audit by the Internal Revenue Service and various states and local tax authorities, respectively. However, since we have tax attribute carryforwards from these years that could

F-28

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Income Taxes (Continued)

be subject to adjustment, if and when utilized, federal and California remain open through 1995 and 1992, respectively. The India statute of limitations remains open for years 2006 through 2010.

Effective January 1, 2007, we adopted FIN 48, codified as ASC 740-10, which prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that we have taken or expect to take on a tax return.

The aggregate changes in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for the two years ended December 31, 2010 is as follows (in thousands):


Balance as of December 31, 2007		$	35

	Increases related to tax positions taken during a prior period		3,051
	Increases related to tax positions taken during the current period		573

Balance as of December 31, 2008			3,659

	Increases related to tax positions taken during a prior period		448
	Increases related to tax positions taken during the current period		346
	Decreases related to expiration of statute of limitations		(158	)

Balance as of December 31, 2009			4,295

	Increases related to tax positions taken during a prior period		795
	Decreases related to tax positions taken during the prior period		(80	)
	Increases related to tax positions taken during the current period		421

Balance as of December 31, 2010		$	5,431

During 2010, we recorded total gross unrecognized tax expense of approximately $0.1 million. As of December 31, 2010, the total amount of gross unrecognized tax benefits, if realized, would affect our tax expense by approximately $4.3 million. We recognize interest and/or penalties related to uncertain tax positions in operating expenses, which for 2010 and 2009 were immaterial. We do not believe there will be any material changes in our unrecognized tax positions over the next twelve months.

Note 15. Stockholders' Equity

Treasury Stock

During 2008, our board of directors authorized stock repurchase programs for the repurchase of up to $90.0 million of our common stock. For the year ended December 31, 2008, shares with an aggregate value of $65.0 million, excluding broker commissions of $0.1 million, were repurchased. All repurchased shares were recorded as treasury stock and were accounted for under the cost method. No repurchased shares have been retired. The timing, price and volume of the repurchases will be based on market conditions, relevant securities laws and other factors. The stock repurchase program does not obligate us to repurchase any specific number of shares, and we may terminate or suspend the repurchase program at any time. Through December 31, 2010, a total of 4,066,296 shares at an average cost of $16.00 per share were repurchased through a combination of open market purchases and pursuant to a 10b5-1 trading plan. No shares have been repurchased during the years ended December 31, 2010 and 2009. As of December 31, 2010, we had $25.0 million of remaining authorized funds to repurchase additional shares under the stock repurchase programs. Additionally, for the years

F-29

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 15. Stockholders' Equity (Continued)

ended December 31, 2010, 2009 and 2008, we withheld 25,817 shares, 16,855 shares and 10,396 shares, respectively from employees to satisfy tax withholding obligations on the vesting of restricted stock.

Share Purchase Rights Plan

On February 6, 2003, our board of directors approved the adoption of a Share Purchase Rights Plan, or the Rights Plan. Terms of the Rights Plan provide for a dividend distribution of one preferred share purchase right, or a Right, for each outstanding share of our common stock, par value $0.001 per share. The dividend was payable on February 27, 2003 to the stockholders of record on that date.

The Rights are not exercisable until the distribution date, which is the earlier of the date of a public announcement that a person, entity or group of affiliated or associated persons have acquired beneficial ownership of 15% or more of the outstanding share of our common stock (an "Acquiring Person") or (ii) 10 business days (or such later date as may be determined by action of the board of directors prior to such time as any person or entity becomes an Acquiring Person) following the commencement of, or announcement of an intention to commence, a tender offer or exchange offer the consummation of which would result in any person or entity becoming an Acquiring Person. In the event that any person or group of affiliated or associated persons becomes an Acquiring Person or a tender offer is commenced or announced to commence, each stockholder holding a Right will thereafter have the right to receive upon exercise of the Right that number of shares of Common Stock having a market value of two times the exercise price of the Right. The description and terms of the Rights are set forth in a Rights Agreement, dated as of February 6, 2003 entered into between us and EquiServe Trust Company, N.A., as rights agent. Sutter Hill Ventures and ABS Capital Partners and their respective affiliated entities will be exempt from the Rights Plan, unless they acquire beneficial ownership of 17.5% or 22.5% or more, respectively, of our common stock. At no time will the Rights have any voting power. The Rights will expire on February 27, 2013, unless the Rights are earlier redeemed or exchanged by Omnicell.

Note 16. Stock Option Plans, Share-based Compensation and 401(k) Plan

Description of Share-Based Plans

Equity Incentive Plan. On May 19, 2009, at the Company's 2009 Annual Meeting of Stockholders, or the 2009 Annual Meeting, our stockholders approved the Omnicell, Inc. 2009 Equity Incentive Plan, or the 2009 Plan, which authorized 2,100,000 shares to be issued. The 2009 Plan succeeded the 1999 Equity Incentive Plan, as amended, the 2003 Equity Incentive Plan, as amended, and the 2004 Equity Incentive Plan, together the Prior Plans. No additional awards will be granted under any of the Prior Plans; however, all outstanding stock awards granted under the Prior Plans continue to be subject to the terms and conditions as set forth in the agreements evidencing such stock awards. For purposes of determining future common shares available for grant, for each share granted as a full-value award, including restricted stock and restricted stock units, or RSUs, performance stock awards, the shares available for grant were reduced by 1.4 shares. Equity awards granted as stock options and stock appreciation rights reduce the shares available for grant by one share.

F-30

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 16. Stock Option Plans, Share-based Compensation and 401(k) Plan (Continued)

On December 16, 2010, at a Special Meeting of Stockholders, our stockholders approved an amendment to increase the number of shares of common stock authorized for issuance under the 2009 Plan by 2,600,000 shares and to provide that the number of common stock shares available for issuance under the 2009 Plan be reduced by 1.8 shares for each share granted as a full-value award granted on and after October 1, 2010. For each share granted as a full-value award granted prior to October 1, 2010, future shares available for grants under the 2009 Plan were reduced by 1.4 shares. Awards granted as stock options and stock appreciation rights continue to reduce the number of shares available for issuance under the 2009 Plan on a one-for-one basis. At December 31, 2010, 3,457,443 shares of common stock were reserved for future issuance under the 2009 Plan.

Options granted under the 2009 Plan generally become exercisable over periods of up to four years, generally with one-fourth of the shares vesting one year from the vesting commencement date with respect to initial grants, and the remaining shares vesting in 36 equal monthly installments thereafter; however our board of directors may impose different vesting terms at its discretion on any award. Options under the 2009 Plan generally expire ten years from the date of grant. We also grant both restricted stock and restricted stock units to participants under the 2009 Plan. The board of directors determines the award amount, the vesting provisions and the expiration period (not to exceed ten years) for each grant. Grants of restricted stock to non-employee directors are granted on the date of our annual meeting of stockholders and vest in full on the date of our next annual meeting of stockholders, provided such non-employee director remains a director on such date. The fair value of the stock on the date of issuance is amortized to expense from the date of grant to the date of vesting. RSUs granted to employees generally vest over a period of four years and are expensed ratably on a straight-line basis over the vesting period. We consider the dilutive impact of options, restricted stock and restricted stock units in our diluted net income per share calculation.

The board of directors shall administer the 2009 Plan unless and until the board of directors delegates administration to a committee. The Board has delegated administration of the 2009 Plan to the Compensation Committee of the Board and the 2009 Plan is generally administered by such committee. The board of directors may suspend or terminate the 2009 Plan at any time. The board of directors may also amend the 2009 Plan at any time or from time to time. However, no amendment will be effective unless approved by our stockholders after its adoption by the board of directors to the extent stockholder approval is necessary to satisfy the applicable listing requirements of NASDAQ.

If we sell, lease or dispose of all or substantially all of our assets, or we are acquired pursuant to a merger or consolidation, then the surviving entity may assume or substitute all outstanding awards under the 2009 Plan. If the surviving entity does not assume or substitute these awards, then generally the stock awards will immediately and fully vest.

1997 Employee Stock Purchase Plan. We have an Employee Stock Purchase Plan, or ESPP, under which employees can purchase shares of our common stock based on a percentage of their compensation, but not greater than 15% of their earnings, up to a maximum of $25,000 of fair value per year. The purchase price per share must be equal to the lower of 85% of the fair value of the common stock at the beginning of a 24-month offering period or the end of each six-month purchasing period. As of December 31, 2010, 2,959,030 shares had been issued under the ESPP. At our 2009 Annual Meeting, the stockholders approved an amendment to the ESPP, which added 2,622,426 shares to the reserve for future issuance. As of December 31, 2010, there were a total of 2,372,525 shares

F-31

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 16. Stock Option Plans, Share-based Compensation and 401(k) Plan (Continued)

reserved for future issuance under the ESPP. During the year ended December 31, 2010, 451,014 shares of common stock were purchased under the ESPP.

401(k) Plan

We have established a 401(k) tax-deferred savings plan, whereby eligible employees may contribute a percentage of their eligible compensation, but not greater than 75% of their earnings, up to the maximum as required by law. On January 1, 2009, the company began matching 401(k) contributions, up to 3% maximum of employee contributions or $1000, whichever is lower. The total company 401(k) contributions for the years ended December 31, 2010 and 2009 were $0.5 million and $0.5 million, respectively.

Share-Based Compensation-Measurement and Disclosure

We adopted ASC 718, "Stock Compensation" using the modified prospective transition method beginning January 1, 2006. For awards granted prior to but not yet vested as of January 1, 2006, share-based compensation expense was based on the grant-date fair value previously estimated in accordance with the original provisions of SFAS 123 and adjusted for estimated forfeitures. We have recognized compensation expense based on the estimated grant date fair value method required under ASC 718 using straight-line amortization method. As ASC 718 requires that share-based compensation expense be based on awards that are ultimately expected to vest, estimated share-based compensation in 2010, 2009 and 2008 has been reduced for estimated forfeitures.

Total share-based compensation resulting from stock option grants, restricted stock awards, restricted stock units and shares purchased under our ESPP were included in our consolidated statements of operations as follows (in thousands, except per share data):

		Year Ended December 31,

		2010		2009		2008
Cost of revenues		$	1,350	$	1,478	$	1,610
Research and development			755		1,184		1,204
Selling, general and administrative			6,910		7,063		8,351

	Total share-based compensation expense	$	9,015	$	9,725	$	11,165

We did not capitalize any share-based compensation into inventory during 2010, 2009 and 2008 as it was not material. Income tax (charges) benefits realized from share-based compensation and resulting increases (decreases) to additional paid in capital during 2010, 2009 and 2008 were $2.0 million, $(5.5) million and $12.2 million, respectively.

Valuation Assumptions

The fair value of each option grant is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. The fair value of shares issued under the employee stock purchase plans

F-32

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 16. Stock Option Plans, Share-based Compensation and 401(k) Plan (Continued)

is estimated on the date of issuance using the Black-Scholes-Merton model. The weighted average assumptions used for options granted and ESPP in 2010, 2009 and 2008 were as follows:

	Year Ended December 31,

Stock Option Plans	2010			2009			2008
Risk-free interest rate(1)		2.3	%		2.3	%		2.9	%
Dividend yield		0	%		0	%		0	%
Volatility(2)		50.3	%		60.2	%		53.6	%
Expected life(3)		5.2 yrs			5.0 yrs			4.7 yrs

	Year Ended December 31,

Employee Stock Purchase Plan	2010			2009			2008
Risk-free interest rate(1)		0.4	%		0.7	%		2.1	%
Dividend yield		0	%		0	%		0	%
Volatility(2)		48.5	%		67.6	%		55.1	%
Expected life(3)		0.5 - 2 yrs			0.5 - 2 yrs			0.5 - 2 yrs

(1): The risk-free interest rate for both stock options and the ESPP is based on the zero-coupon U.S. Treasury rate curve in effect at the time of the option grant or at the beginning of the ESPP offering period.
(2): Expected volatility for both stock options and the ESPP reflects a combination of historical and market-based implied volatility consistent with ASC 718 and Securities and Exchange Commission Staff Accounting Bulletin 107. In 2007, we determined that the combination of historical and market-based implied volatility provides a more accurate reflection of our market conditions and is more representative of future stock price trends than employing solely historical volatility.
(3): Represents the period of time that options granted are expected to be outstanding, which is derived from historical data on employee exercise and post-vesting employment termination behavior.

F-33

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 16. Stock Option Plans, Share-based Compensation and 401(k) Plan (Continued)

Share-Based Payment Award Activity

A summary of option activity under the 2009 Plan for the years ended December 31, 2010, 2009 and 2008 is presented below:

Options:		Number of Shares			Weighted Average Exercise Price

		(in thousands)
Outstanding at December 31, 2007			4,633		$	12.87
	Granted		751		$	16.05
	Exercised		(478	)	$	9.55
	Expired		(31	)	$	16.60
	Forfeited		(164	)	$	19.99

Outstanding at December 31, 2008			4,711		$	13.45
	Granted		788		$	8.72
	Exercised		(126	)	$	8.81
	Expired		(183	)	$	17.23
	Forfeited		(442	)	$	13.81

Outstanding at December 31, 2009			4,748		$	12.61
	Granted		666		$	12.99
	Exercised		(431	)	$	8.46
	Expired		(164	)	$	16.50
	Forfeited		(79	)	$	14.80

Outstanding at December 31, 2010			4,740		$	12.86
Vested and expected to vest at December 31, 2010			4,740		$	12.86
Exercisable at December 31, 2010			3,501		$	12.93

Outstanding options at December 31, 2010 had a weighted-average remaining contractual life of 6.1 years and an aggregate intrinsic value of $15.5 million. Vested and expected to vest options had a weighted-average remaining contractual life of 6.1 years and an aggregate intrinsic value of $15.5 million. Exercisable options at December 31, 2010 had a weighted-average remaining contractual life of 5.1 years and an aggregate intrinsic value of $12.3 million.

F-34

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 16. Stock Option Plans, Share-based Compensation and 401(k) Plan (Continued)

The ranges of outstanding and exercisable options for equity share-based payment awards as of December 31, 2010 were as follows:

Range of Exercise Prices	Number Outstanding		Weighted Average Exercise Price of Outstanding Options			Weighted Average Exercise Price of Exercisable Options

	(in thousands)		(Years)			(in thousands)
$2.70 - $7.40		565	$	5.22	565	$	5.22
$7.89 - $9.25		570	$	8.24	328	$	8.46
$9.34 - $10.58		732	$	10.28	657	$	10.32
$10.60 - $11.58		594	$	10.99	523	$	11.04
$11.63 - $12.48		498	$	12.25	171	$	12.02
$12.53 - $13.92		474	$	13.31	194	$	13.14
$13.97 - $20.00		487	$	16.66	318	$	17.25
$20.23 - $21.07		477	$	20.92	450	$	20.93
$22.63 - $26.99		253	$	24.26	222	$	24.10
$29.16 - $29.16		90	$	29.16	73	$	29.16

$2.70 - $29.16		4,740	$	12.86	3,501	$	12.93

As of December 31, 2010, $8.1 million of total unrecognized compensation costs related to unvested options is expected to be recognized over a weighted average period of 2.7 years. The weighted average fair value of options granted was $6.13, $4.57 and $7.69 during 2010, 2009 and 2008, respectively. The intrinsic value of options exercised during 2010, 2009 and 2008 was $2.1 million and $0.3 million and $4.5 million, respectively. The total fair value of shares vested during 2010, 2009 and 2008 was $4.9 million, $5.6 million and $7.6 million, respectively.

Restricted Stock and Restricted Stock Units

A summary of activity of restricted stock granted under the 2009 Plan as of December 31, 2010 is presented below:

	Shares of Restricted Stock

	(in thousands)
Nonvested at December 31, 2007		14		22.63
Granted		41		11.91
Vested		(14	)	22.63

Nonvested at December 31, 2008		41		11.91
Granted		52		9.25
Vested		(41	)	11.91

Nonvested at December 31, 2009		52		9.25
Granted		79		12.91
Vested		(54	)	9.40

Nonvested at December 31, 2010		77		12.91

F-35

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 16. Stock Option Plans, Share-based Compensation and 401(k) Plan (Continued)

The fair value of restricted stock is the product of the number of shares granted and the closing market price of our common stock on the grant date. The total fair value of restricted stock grants vested in 2010, 2009 and 2008 was $0.7 million, $0.5 million and $0.2 million, respectively. Our unrecognized compensation cost related to nonvested restricted stock is approximately $0.4 million and is expected to be recognized over a weighted average period of 0.4 years.

A summary of activity of restricted stock units, or RSUs, granted under the 2009 Plan as of December 31, 2010 is presented below:

	Restricted Stock Units

	(in thousands)
Nonvested at December 31, 2007		180		24.35
Granted		159		17.24
Vested		(66	)	21.94
Forfeited		(37	)	25.11

Nonvested at December 31, 2008		236		20.11
Granted		150		9.09
Vested		(91	)	18.72
Forfeited		(31	)	20.36

Nonvested at December 31, 2009		264		14.32
Granted		195		12.83
Vested		(140	)	15.10
Forfeited		(11	)	15.34

Nonvested at December 31, 2010		308		12.98

The fair value of RSUs is the product of the number of shares granted and the closing market price of our common stock on the grant date. The total fair value of RSUs vested in 2010, 2009 and 2008 was $1.9 million, $1.6 million and $1.5 million, respectively. Expected future compensation expense relating to RSUs outstanding on December 31, 2010 is $4.4 million over a weighted-average period of 2.8 years.

Employee Stock Purchase Plan

As of December 31, 2010, our unrecognized compensation cost related to the shares to be purchased under our ESPP was approximately $0.5 million and is expected to be recognized over a weighted average period of 0.6 years.

Note 17. Facilities Closures & Restructuring

During the third quarter of 2010, we implemented a restructuring plan to close our offices in Bangalore, India and in The Woodlands, Texas, and consolidate the activities of these two locations with our Mountain View, California and Nashville, Tennessee operations in an effort to increase the efficiency of operations and promote collaboration among our engineering teams. We substantially completed this consolidation by September 30, 2010.

F-36

Table of Contents

OMNICELL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 17. Facilities Closures & Restructuring (Continued)

The roll-forward of restructuring liabilities for the year ending December 31, 2010 appears below:

		Severance / relocation			Facility closure / move			Impairment (noncash)			Total

Beginning balance, December 31, 2009		$	—		$	—		$	—		$	—
	Accruals		790			183			223			1,196
	Non-cash charges								(223	)		(223	)
	Payments		(698	)		(97	)		—			(795	)

Ending balance, December 31, 2010		$	92		$	86		$	—		$	178

The third quarter 2010 restructuring charges consisted of $0.3 million in severance for departing employees and $0.5 million relocation benefits for transferring employees, $0.2 million of exit and disposal costs related to the closed facilities, and $0.2 million for impairment of leasehold improvements and certain service tax reimbursement claims. Most of the $1.0 million of cash accruals were paid by December 31, 2010, the largest exception being cease-use liabilities for the Texas office extending through the third quarter of 2011.

Note 18. Subsequent Events

On February 17, 2011, parties to the Pandora contractual dispute reached a settlement of $1.2 million, to be paid from the selling shareholders' escrow account, recording the settlement in court and filing for dismissing the lawsuit. As required for a recognized subsequent event, we adjusted our original acquisition accounting of a $1.0 million acquired legal contingency and a $1.0 million indemnification asset to $1.2 million each at December 31, 2010, with no impact to net income. This settlement is considered a new development, not evidence of conditions existing at the September 29, 2010 acquisition date. Accordingly, the acquired assets and liabilities disclosures (see Note 2) have not been adjusted.

F-37

Table of Contents

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

Allowances Deducted from Assets:	Balance at beginning of year		Additions charged to costs and expenses(2)		Charged (credited) to other accounts			Describe charged to other accounts	Deductions			Describe deductions	Balance at end of year

For the Year Ended December 31, 2008
Accounts receivable(1)	$	1,367	$	495					$	(513	)	(4)	$	1,349
Investment in sales-type leases(1)		362				(27	)	(3)						335

Total allowances deducted from assets	$	1,729	$	495	$	(27	)		$	(513	)		$	1,684

For the Year Ended December 31, 2009
Accounts receivable(1)	$	1,349	$	191	$	(251	)	(3)	$	(421	)	(4)	$	868
Investment in sales-type leases(1)		335		673		(438	)	(5)						570

Total allowances deducted from assets	$	1,684	$	864	$	(689	)		$	(421	)		$	1,438

For the Year Ended December 31, 2010
Accounts receivable(1)	$	868	$	297	$	(484	)	(3)	$	(184	)	(4)	$	497
Investment in sales-type leases(1)		570		3		(40	)	(5)		(122	)	(4)		411

Total allowances deducted from assets	$	1,438	$	300	$	(524	)		$	(306	)		$	908

(1): Allowance for doubtful accounts.
(2): Represents amounts charged to bad debt expense.
(3): Represents amounts credited to bad debt expense.
(4): Represents amounts written-off, net of recoveries.
(5): Represents amounts credited to bad debt expense and lease receivable adjustment.

F-38

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: March 11, 2011	OMNICELL, INC.
	By:	/s/ ROBIN G. SEIM Robin G. Seim Chief Financial Officer and Vice President Finance, Administration and Manufacturing

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each of the persons whose signature appears below hereby constitutes and appoints Randall A. Lipps and Robin G. Seim, each of them acting individually, as his or her attorney-in-fact, each with the full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming our signatures as they may be signed by our said attorney-in-fact and any and all amendments to this Annual Report on Form 10-K.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date


/s/ RANDALL A. LIPPS Randall A. Lipps	Chief Executive Officer, President and Chairman of the Board (Principal Executive Officer)	March 11, 2011
/s/ ROBIN G. SEIM Robin G. Seim	Chief Financial Officer and Vice President Finance, Administration and Manufacturing (Principal Accounting and Financial Officer)	March 11, 2011
/s/ MARY E. FOLEY Mary E. Foley	Director	March 11, 2011
/s/ JAMES T. JUDSON James T. Judson	Director	March 11, 2011

S-1

Table of Contents

Signature	Title	Date


/s/ WILLIAM H. YOUNGER, JR. William H. Younger, Jr.	Director	March 11, 2011
/s/ RANDY D. LINDHOLM Randy D. Lindholm	Director	March 11, 2011
/s/ GARY S. PETERSMEYER Gary S. Petersmeyer	Director	March 11, 2011
/s/ DONALD C. WEGMILLER Donald C. Wegmiller	Director	March 11, 2011
/s/ SARA J. WHITE Sara J. White	Director	March 11, 2011
/s/ JOSEPH E. WHITTERS Joseph E. Whitters	Director	March 11, 2011

S-2

Table of Contents

INDEX TO EXHIBITS

Exhibit No.			Description

	3.1		Amended and Restated Certificate of Incorporation of Omnicell, Inc. Incorporated by reference to Exhibit 3.1 to our Registration Statement on Form S-1, as amended, filed on March 14, 2001.
	3.2		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Omnicell, Inc. Incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q filed on August 9, 2010.
	3.3		Certificate of Designation of Series A Junior Participating Preferred Stock. Incorporated by reference to Exhibit 3.2 to our Annual Report on Form 10-K filed on March 28, 2003 (File No. 000-33043).
	3.4		Bylaws of Omnicell, Inc., as amended. Incorporated by reference to Exhibit 3.3 to our Quarterly Report on Form 10-Q filed on August 9, 2007.
	4.1		Form of Common Stock Certificate. Incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-1, as amended, filed on March 14, 2001.
	4.2		Rights Agreement, dated February 6, 2003, between Omnicell and EquiServe Trust Company, N.A. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on February 14, 2003 (File No. 000-33043).
	10.1		Lease, effective July 1, 1999, between Omnicell and Amli Commercial Properties Limited Partnership. Incorporated by reference to Exhibit 10.2 to our Registration Statement on Form S-1, as amended, filed on March 14, 2001.
	10.2		Second Amendment to Lease, dated as of June 30, 2006, by and between The Prudential Insurance Company of America and Omnicell Technologies, Inc.
	10.3		Federal Supply Schedule Contract No. V797P3406k, effective August 7, 1997, between the Department of Veterans Affairs and Omnicell. Incorporated by reference to Exhibit 10.8 to our Registration Statement on Form S-1, as amended, filed on March 14, 2001.
	10.4		Form of Director and Officer Indemnity Agreement. Incorporated by reference to Exhibit 10.12 to our Registration Statement on Form S-1, as amended, filed on March 14, 2001.
	*10.5		1997 Employee Stock Purchase Plan, as amended. Incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on August 5, 2009.
	*10.6		1999 Equity Incentive Plan, as amended.. Incorporated by reference to Exhibit 10.11 to our Annual Report on Form 10-K filed on March 23, 2007.
	*10.7		Form of Stock Unit Grant Notice and Form of Stock Unit Award Agreement for 1999 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.11A to our Annual Report on Form 10-K filed on March 17, 2008.
	*10.8		Form of Restricted Stock Award Grant Notice and Form of Restricted Stock Award Agreement for 1999 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.11B to our Annual Report on Form 10-K filed on March 17, 2008.
	10.9		Real Property Lease, dated June 30, 2003, between Shoreline Park, LLC and Omnicell, Inc. Incorporated by reference to Exhibit 10.24 to our Quarterly Report on Form 10-Q filed on August 7, 2003 (File No. 000-33043).
	10.10		Lease, dated April 14, 2010, by and between Point Place II, LLC and Omnicell, Inc.
	*10.11		2003 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.14 to our Annual Report on Form 10-K filed on March 23, 2007.

Table of Contents

Exhibit No.			Description

	*10.12		2004 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.17 to our Annual Report on Form 10-K filed on March 23, 2007.
	*10.13		Employment Agreement, dated October 31, 2003, between Omnicell and Dan S. Johnston. Incorporated by reference to Exhibit 10.26 to our Annual Report on Form 10-K filed on March 8, 2004 (File No. 000-33043).
	*10.14		Addendum to Offer Letter between Omnicell and Dan S. Johnston dated December 30, 2010.
	*10.15		2009 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on December 22, 2010.
	10.16		Form of Option Grant Notice and Form of Option Agreement for 2009 Equity Incentive Plan, as amended.
	*10.17		Form of Stock Unit Grant Notice and Form of Stock Unit Award Agreement for 2009 Equity Incentive Plan, as amended.
	*10.18		Form of Restricted Stock Award Grant Notice and Form of Restricted Stock Award Agreement for 2009 Equity Incentive Plan, as amended.
	*10.19		2010 Omnicell Quarterly Executive Bonus Plan. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on March 17, 2010.
	*10.20		Employment Agreement, dated November 28, 2005, between Omnicell and Robin G. Seim. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on January 24, 2006 (File No. 000-33043).
	*10.21		Addendum to Offer Letter between Omnicell and Robin G. Seim dated December 30, 2010.
	*10.22		Addendum to Change in Control Severance Letter between Omnicell and Robin G. Seim dated December 30, 2010.
	*10.23		Form of Change of Control Agreement. Incorporated by reference to Exhibit 10.26 to our Annual Report on Form 10-K filed on March 16, 2006.
	*10.24		Addendum to Form of Change of Control Agreement dated December 30, 2010.
	*10.25		Amended and Restated Severance Benefit Plan. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on May 7, 2007.
	10.26		Real Property Lease, effective June 29, 2007, between Omnicell and Britannia Hacienda VIII LLC. Incorporated by reference to Exhibit 10.28 to our Quarterly Report on Form 10-Q filed on August 9, 2007.
	*10.27		Employment Agreement dated October 17, 2008, between Omnicell and Nhat H. Ngo. Incorporated by reference to Exhibit 10.29 to our Annual Report on Form 10-K filed on February 24, 2009.
	*10.28		Addendum to Change in Control Severance Letter between Omnicell and Nhat H. Ngo dated December 30, 2010.
	*10.29		Employment Agreement dated December 5, 2008, between Omnicell and Marga Ortigas-Wedekind. Incorporated by reference to Exhibit 10.31 to our Annual Report on Form 10-K filed on February 24, 2009.
	*10.30		Addendum to Change in Control Severance Letter between Omnicell and Marga Ortigas-Wedekind dated December 30, 2010.

Table of Contents

Exhibit No.			Description

	*10.31		2009 Executive Officer Annual Base Salaries (effective through April 1, 2010). Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February 9, 2009.
	*10.32		2010 Executive Officer Annual Base Salaries (effective April 1, 2010). Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February 8, 2010.
	21.1		Subsidiaries of the Registrant.
	23.1		Consent of Independent Registered Public Accounting Firm.
	24.1		Powers of Attorney. Reference is made to the signature page to this report.
	31.1		Certification of Chief Executive Officer required by Rule 13a-15 or Rule 15d-15(e) (e).
	31.2		Certification of Chief Financial Officer required by Rule 13a-15 or Rule 15d-15(e) (e).
	32.1**		Certifications required by Rule 13a-14 (b) or Rule 15d-14 (b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350).

*: Management contract or compensatory plan or arrangement.
**: This certification attached hereto as Exhibit 32.1 accompanying this Annual Report on Form 10-K is not deemed filed with the Securities and Exchange Commission and is not incorporated by reference into any filing of Omnicell, Inc. under the Securities Act of 1933, as amended, or the Securities Act of 1934, as amended (whether made before or after the date of this Annual Report on Form 10-K), irrespective of any general incorporation language contained in such filing.

Exhibit 10.2

SECOND AMENDMENT TO LEASE

THIS SECOND AMENDMENT TO LEASE (the “ Second Amendment ”) is made as of the 30 th day of June, 2006, by and between THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation (“ Landlord ”), and OMNICELL, INC. , a Delaware corporation, f/k/a OMNICELL TECHNOLOGIES, INC., a California corporation (“ Tenant ”).

WITNESSETH :

WHEREAS, Amli Commercial Properties Limited Partnership, a Delaware limited partnership, the predecessor in interest to Landlord, and Tenant have heretofore entered into that certain lease dated as of April 28, 1999, as amended by that First Amendment to Lease dated as of September 30, 1999 (collectively, the “ Lease ”), pursuant to which Tenant is leasing approximately 38,459 square feet of rentable area (the “ Existing Premises ”) in the building located at 3661 Burwood Drive, Waukegan, Illinois (the “ Building ”). Capitalized terms that are not otherwise defined in this Second Amendment shall have the meanings ascribed to them in the Lease;

WHEREAS, each of Tenant and Landlord desires to extend the Term in accordance with the terms and conditions of this Amendment;

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Term and Option Term . As of the date hereof, Landlord and Tenant hereby agree to extend the Term of the Lease with respect to the Premises from the date of expiration of the initial Term (“Effective Date”) through July 31, 2013, and the Lease is hereby amended so that all references to the “Term” in the Lease shall refer to the Term as extended hereunder. Upon the termination of this Lease as described in the previous sentence, Tenant shall have the right, upon providing Landlord with at least one hundred twenty (120) days written notice prior to the expiration of the Term, to renew the Lease for an additional one (1) year term (“Option Term”) for the period and with an Annual Base Rent as set forth in Section 2 below. The parties agree to evidence the agreement to enter into the Option Term by executing a written confirmation of such extension.

2. Base Rent . As of the date hereof, Section 1.9 to the Lease shall be amended to add the following provisions relating to the amount of Base Rent due and payable from and after the Effective Date:

Period	Annual Base Rent		Monthly Base Rent

8/1/06-7/31/07	$	228,831.05	$	19,069.25

8/1/07-7/31/08	$	234,551.83	$	19,545.99

8/1/08-7/31/09	$	240,415.62	$	20,034.64

8/1/09-7/31/10	$	246,426.01	$	20,535.50

8/1/10-7/31/11	$	252,586.66	$	21,048.89

8/1/11-7/31/12	$	258,901.33	$	21,575.11

8/1/12-7/31/13	$	265,373.86	$	22,114.49

Option Term	Annual Base Rent		Monthly Base Rent

8/1/13-7/31/14	$	272,008.21	$	22,667.35

3. Condition of Premises . As of the date hereof, pursuant to Section 16.1 (Condition of Premises) of the Lease, the parties acknowledge and agree that at the termination of the Lease by lapse of time or otherwise, or upon a termination of Tenant’s right of possession without terminating the Lease, Tenant shall surrender possession of the Premises and all Tenant Improvements to Landlord and deliver all keys to the Premises to Landlord, and shall return the Premises and all equipment and fixtures of Landlord to Landlord in as good a condition as when Tenant originally took possession, ordinary wear and tear, loss or damage by fire or other insured casualty, and damage resulting from the acts of Landlord or any of its employees and agents excepted.

4. Possession and Condition of the Premises . Tenant hereby acknowledges and agrees that it is currently in possession of the Premises and such Premises is in good order and satisfactory condition. No promise of Landlord to alter, remodel or improve the Premises or the Property and no representation respecting the condition of the Premises or the Property has been made by Landlord to Tenant, except with respect to Landlord’s obligations set forth in Work Letter Agreement attached hereto in Exhibit A . Other than as set forth in Exhibit A, no promise of Landlord to alter, remodel or improve the Premises, and no representation respecting the condition of the Premises has been made by Landlord to Tenant provided however, to Landlord’s actual knowledge, Landlord’s warranty under the second paragraph of Section 8 in the original Lease is hereby reaffirmed with respect to alterations performed by Landlord.

5. Americans with Disabilities Act . The parties acknowledge that with respect to Title III of the Americans With Disabilities Act of 1990 (42 U.S.C. §12101 et seq.) and regulations and guidelines promulgated thereunder, as all of the same may be amended and supplemented from time to time (collectively referred to here as the “ADA”), Landlord shall be responsible for compliance for the base building structure of the Building, the common areas of the Property, the Building common areas, the common area lobby restrooms (if any), and the Premises with respect to alterations and any Landlord’s Work performed by Landlord. Tenant shall be responsible for ADA Title III compliance in the Premises with respect to Alterations and any work performed by Tenant.

5. Environmental Condition . The obligations of Tenant under Section 21(p) of the original Lease shall not be modified or diminished in any way, provided however, Landlord’s

warranty under the second paragraph of Section 8 in the original Lease, to Landlord’s actual knowledge, is hereby reaffirmed with respect to contamination at the Property by any Hazardous Materials in quantities exceeding purposes which are reasonably and customarily used in general office uses.

6. Real Estate Broker . Tenant acknowledges that it has dealt with no broker in connection with this Amendment other than Grubb & Ellis and that insofar as Tenant knows, no other broker or finder negotiated this Amendment or is entitled to any fee or commission in connection herewith. With respect to this issue only, Tenant agrees to indemnify, defend and hold Landlord free and harmless from and against all claims for broker’s commissions or finder’s fees by any person claiming to have represented or procured, or to have been engaged by, Tenant in connection with this transaction. Landlord represents that Landlord has dealt with no broker in connection with this Amendment other Paine/Wetzel Associates, Inc., and that insofar as Landlord knows, no other broker or finder negotiated this Amendment or is entitled to any fee or commission in connection herewith. Landlord agrees to indemnify, defend and hold Tenant free and harmless from and against all claims for broker’s commissions or finder’s fees by any person claiming to have represented or to have been engaged by Landlord in connection with this transaction.

6. Full Force and Effect, Inconsistency . Except as set forth in this Amendment, the terms, covenants, conditions and agreements of the Lease shall remain unmodified and otherwise in full force and effect. In the event of any inconsistency between the terms of the Lease and the terms of this Amendment, the terms of this Amendment shall control.

7. Miscellaneous .

(a) The preambles to this Amendment are incorporated into the body of this Amendment as if restated herein.

(b) Interpretation of this Amendment shall be governed by the laws of the State of Illinois.

(c) The mutual obligations of the parties as provided herein are the sole consideration for this Amendment and no representations, promises or inducements have been made by the parties other than as appear in this Amendment. This Amendment may not be amended except in writing signed by both parties.

(d) This Amendment shall not be binding until executed and delivered by both parties.

[ The remainder of this page has been left blank intentionally. ]

IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment as of the day and year first above written.

	LANDLORD :

	THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
	a New Jersey corporation

	By:	PDC Properties, Inc., its agent


	By:
	Name:
	Title:


	TENANT :

	OMNICELL, INC. , a
	Delaware corporation


	By:
	Name:
	Title:

Exhibit A

Work Letter Agreement

All of the terms and conditions of the Lease are incorporated herein by reference and, except as may be expressly set forth to the contrary in this Work Letter or the Lease, shall apply as fully to this Work Letter as to the Lease. The capitalized terms used but not defined in this Work Letter shall have the meanings ascribed to them in the Lease.

1. Construction of Tenant Improvements . Except as provided below to the contrary, Landlord shall pay for and provide the construction material, hardware and equipment and the labor to construct the Tenant Improvements, which construction shall occur in two (2) phases to allow Tenant’s continued occupancy of such portion of the Premises not being constructed during each respective phase. “Tenant Improvements” means (i) the materials, hardware and equipment to be affixed to or incorporated into the Premises pursuant to the Plans (as defined below and as the same may be modified pursuant to Section 4 of this Work Letter), and the labor to construct and install such items, and (ii) the other building standard items described in the Plans, as the same may be modified pursuant to Section 4 of this Work Letter. Landlord shall proceed diligently to cause the Tenant Improvements to be substantially completed substantially in accordance with the Plans and the terms and conditions of the Lease. Tenant Improvements will be comprised of building standard materials and performed in a first class, workmanlike manner.

2. Contractors . If Tenant elects to engage an interior designer for the Premises (the “Interior Designer”), Tenant shall have the right to do so, subject to Landlord’s reasonable approval, with such approval not to be unreasonably withheld, and Tenant shall contract directly with the Interior Designer for the provision of services. All other architects, engineers, contractors, subcontractors, suppliers, manufacturers or materialmen performing services or supplying materials in connection with the design and/or construction of the Tenant Improvements (the “Contractors”) shall be selected by Landlord, and shall enter into contracts directly with Landlord for the provision of services and materials.

3. The Plans . Landlord has caused to be prepared, and Landlord and Tenant have approved, the plans, drawings and specifications described on Schedule 1 attached to this Work Letter and made a part hereof (the “Plans”).

4. Changes to the Plans .

A. Tenant Changes to the Plans .

1. Tenant may propose one or more changes to the Plans to Landlord at any time before the Substantial Completion Date (as defined below), and, as promptly as reasonably practicable after the receipt and approval thereof by Landlord (which approval may be withheld in Landlord’s reasonable discretion),

Landlord shall provide Tenant with a written estimate of the delay (if any) in the Substantial Completion Date (which delay shall be a Tenant Delay as defined below) and the additional cost (if any) to complete the Tenant Improvements which will result from such change (whether hard costs or soft costs), which costs shall include, without limitation: (i) the actual cost of all materials, supplies, equipment and labor used or supplied in making the proposed change, including general conditions and any contractor’s fees; (ii) any architect and engineer fees; (iii) a construction management fee payable to Landlord equal to five percent (5%) of such additional costs; and (iv) any actual out of pocket costs and expenses resulting from a Tenant Delay and the extended construction period (if any) as such cost arises from impacts to the Building systems or adjacent tenants of the Building (collectively, “Change Order Costs”). If Tenant fails to approve the estimate of Change Order Costs within three (3) business days after delivery of same, Tenant shall be deemed to have abandoned its request for such change, and the Tenant Improvements shall be constructed substantially in accordance with the then existing Plans. If Tenant approves the estimate of Change Order Costs within said 3-day period by signing and returning a copy of Landlord’s estimate, Landlord shall cause the Tenant Improvements to be constructed substantially in accordance with the Plans as so revised. Unless requested in writing by Tenant to the contrary, Landlord shall continue with construction of the Tenant Improvements according to the then existing Plans during the pendency of any proposed change in the Plans until such change is approved by Landlord and Tenant as provided above. Any delay resulting from a halt in construction requested in writing by Tenant shall constitute a Tenant Delay.

2. If Tenant approves Landlord’s estimate of the time and the Change Order Costs of a proposed change to the Plans within three (3) business days after delivery of same as set forth in Section 4A1 above, Tenant shall not be liable for the actual Change Order Costs, whether or not such actual cost exceeds Landlord’s estimate. In the event that such timely approval is not submitted by Tenant, Tenant shall be liable for the amount the actual Change Order Cost exceeds the estimate of a proposed change to the Plans and in such event, upon Tenant’s request, Landlord shall provide Tenant with reasonable evidence of the actual Change Order Costs and the basis for any delay in the Substantial Completion Date resulting from such change.

3. If Tenant requests a change to the Plans pursuant to this Section 4.1 , and Tenant does not approve or disapprove the estimate of Change Order Costs within three (3) business days after delivery of same as set forth in Section 4A1 above, Tenant shall promptly reimburse Landlord, as Rent, for any reasonable costs and expenses actually incurred from third parties, if any, resulting from the delayed or lacking response by Tenant.

B. Landlord Changes to the Plans . Landlord may make changes to the Plans without Tenant’s consent, provided that such changes (a) are reasonably necessary to address field conditions, (b) will not create any additional monetary

obligation for Tenant under the Lease, (c) are in material conformity with the Plans (as they may have been previously revised by permissible Tenant and/or Landlord changes thereto), and (d) will not result in the use of materials or equipment which are of a materially lesser quality than those specified in the Plans.

5. Payment of Costs . Tenant shall pay Landlord the amount of any Change Order Costs if such Change Order Costs were approved after the three (3) business day period as set forth in Section 4A1 above, within ten (10) business days after Tenant’s receipt of reasonable evidence of the actual Change Order Costs in accordance with Section 4.1 of this Work Letter. Landlord shall be responsible for the amount of any Change Order Cost overruns if same were approved by Tenant within the three (3) business day period as set forth in Section 4A1 above.

6. Punchlist Items . Before Tenant takes occupancy of the Premises, but no later than five (5) business days after the Substantial Completion Date, Landlord, Landlord’s architect, Tenant and at Tenant’s election, Tenant’s consulting architect or other construction consultants shall conduct an inspection of the Premises and shall work in good faith to jointly prepare a punchlist for the Tenant Improvements. Any items not on such punchlist shall be deemed accepted by Tenant. Landlord shall complete all punchlist items as soon as reasonably practicable after such punchlist items are finally determined.

7. Representatives of Landlord and Tenant . Landlord designates Sue Lehman as its representative for all purposes of this Work Letter. Tenant designates Michael Cline as its representative for all purposes of this Work Letter. Wherever this Work Letter requires any notice to be given to or by a party, or any determination or action to be made or taken by a party, such notice shall be in writing and the representative(s) of each party shall act for and on behalf of such party, and the other party shall be entitled to rely thereon. Either party may designate one or more additional or substitute representatives for all or a specified portion of the provisions of this Work Letter, subject to written notice to the other party of the identity of such additional or substitute representative(s).

8. Delay in the Substantial Completion Date .

A. The Substantial Completion Date . The “Substantial Completion Date” shall mean the earliest to occur of: (i) the date on which Landlord’s architect issues a certificate to Landlord and Tenant stating that the Tenant Improvements have been substantially completed substantially in accordance with the Plans, or (ii) if the substantial completion of the Tenant Improvements has been delayed as a result of one or more Tenant Delays (as defined below), the date on which Landlord would have substantially completed the Tenant Improvements but for such Tenant Delays, as so certified by the Landlord’s architect.

B. Tenant Delays . “Tenant Delay” shall mean any interruption or delay at any time in the progress of the Tenant Improvements which is the result

of: (a) Tenant changes to the Plans, including, in addition to delays resulting from the actual execution of such changes to the Plans, any delay occurring because the change to the Plans requested by Tenant expressly requires the design or construction of the Premises to be halted or delayed pending resolution of any request by Tenant for a change to the Plans, whether or not the requested change is ultimately approved by Landlord and/or Tenant; (b) the performance or non-performance of any work at the Premises by Tenant or any person, firm or corporation employed by Tenant; or (c) any other act or omission of Tenant (for example, but not by way of limitation, failure to timely respond to requests for information or approval of construction related matters submitted by Landlord and failure to act in good faith and to cooperate with Landlord in finalizing and approving the Plans pursuant to Section 3 of this Work Letter).

C. Force Majeure Delays . “Force Majeure Delay” shall mean any interruption or delay at any time in the progress of the Tenant Improvements which is not a Tenant Delay and is the result of any Events of Force Majeure. Any delay shall be deemed to be a Force Majeure Delay notwithstanding that Landlord or its agent or Contractor with respect to which the time period for the Force Majeure Delay is being claimed is concurrently delayed by events within its control.

D. Notice of Tenant Delays and Force Majeure Delays . Each of Landlord and Tenant agrees that it shall exercise reasonable efforts to provide the other party with written notice of any Tenant Delay or Force Majeure Delay (and the expected length of the applicable delay) as soon as reasonably practicable following the date such party has been notified of any such delay; provided, however, that Landlord’s or Tenant’s failure to furnish such notice shall in no event be deemed to a waiver by Landlord or Tenant of the Tenant Delay or Force Majeure Delay or otherwise affect the operation of this Section 8 . Landlord and Tenant shall be deemed to have notified the other party of a Tenant Delay or a Force Majeure Delay if the applicable delay is brought to the attention of the Tenant representative or Landlord representative, respectively, noted in Section 7 hereof within three (3) business days after the notifying party learns of such Tenant Delay or Force Majeure Delay.

9. Governmental Approvals . Landlord shall use reasonable efforts to obtain all governmental licenses, permits and approvals necessary for the construction of the Tenant Improvements. If Landlord is unable to obtain any permit, license or approval from any governmental authority necessary for the construction of the Tenant Improvements, either Landlord or Tenant may elect to terminate the Lease upon written notice to the other party delivered within thirty (30) days after agreement upon the final Plans, upon which termination Landlord shall return to Tenant any Security Deposit and Base Rent in Landlord’s possession, and thereafter Landlord shall have no further liability to Tenant hereunder or under the Lease.

10. Access by Tenant Prior to Substantial Completion Date . Landlord will permit Tenant and Tenant’s agents, suppliers, contractors and workmen to enter the Premises prior to the completion of the Tenant Improvements to enable Tenant to do such other things as may be required by Tenant to make the Premises ready for Tenant’s occupancy, provided that Tenant shall fully perform and comply with each of the following covenants, conditions and requirements:

1. With respect to that portion of the Premises which is under construction during a particular phase of the Tenant Improvement work, Tenant and Tenant’s agents, contractors, workmen, mechanics, suppliers and invitees, shall work in harmony and not intentionally or unduly interfere with Landlord and Landlord’s agents in performing the Tenant Improvements or work for other tenants and occupants of the Building, and if at any time such entry shall in the reasonable judgment of Landlord cause or threaten to cause disharmony or interference, Landlord shall have the right to withdraw such permission for entry into such current phase of the Premises under construction upon twelve (12) hours written notice to the Tenant representative provided in Section 7 hereof.

2. Tenant agrees that any such entry into the Premises shall be deemed to be under all of the terms, covenants, conditions, and provisions of the Lease except the covenant to pay Rent, and further agrees that in connection therewith Landlord shall not be liable in any way for any injury, loss or damage which may occur to any of Tenant’s work or installations made in the Premises or to property placed therein prior to the Substantial Completion Date, the same being at Tenant’s sole risk. In addition, Tenant shall require all entities performing work on behalf of Tenant to provide protection for existing improvements to an extent that is reasonably satisfactory to Landlord and shall allow Landlord reasonable access to the Premises, for inspection purposes, at all times during the period when Tenant is undertaking construction activities therein. In the event any entity performing work on behalf of Tenant causes any damage to the Tenant Improvements or the property of Landlord or others, Tenant shall cause such damage to be repaired at Tenant’s expense, and if Tenant fails to cause such damage to be repaired immediately upon Landlord’s demand therefor, Landlord may in addition to any other rights or remedies available to Landlord under the Lease or at law or equity cause such damage to be repaired, in which event Tenant shall immediately upon Landlord’s demand pay to Landlord the cost of such repairs as Rent.

3. All contractors and subcontractors shall use only those entrances reasonably designated by Landlord for ingress and egress of personnel, and the delivery and removal of equipment and material through or across any common areas of the Building or parking areas on the Property shall only be permitted with the written approval of Landlord and during hours reasonably determined by Landlord. Landlord shall have the right to order Tenant or any contractor or subcontractor that violates the above requirements to cease work and remove it, its equipment, and its employees from the current phase of the Premises under

construction or those portions of the Building or the Property adversely affected by such presence.

4. A. During the performance of Landlord’s Work and Landlord’s fixturing, Landlord shall provide trash removal service from a location designated by Landlord. In connection with such work, Landlord shall be responsible for breaking down boxes and placing trash in Landlord’s containers at such designated location. Landlord shall accumulate its trash in containers supplied by Landlord and Landlord shall not permit trash to accumulate within the Premises or in the corridors or public areas adjacent to the Premises. Landlord shall cause each entity employed by it to perform work on the Premises to abide by the provisions of this Work Letter as to the storage of trash and shall require each such entity to perform its work in a way that dust and dirt is contained entirely within the Premises and not within any other portion of the Building or the Property and shall cause Landlord’s contractors to leave the Premises broom clean at the end of each day. Should Tenant deem it necessary to remove Landlord’s trash because of accumulation, Tenant may remove such trash and request reimbursement from Landlord for its out of pocket costs incurred for such removal on a time and material basis.

B. During the performance, if any, of Tenant’s work and/or Tenant’s fixturing, Landlord shall provide trash removal service from a location designated by Landlord. Tenant shall be responsible for breaking down boxes and placing trash in Landlord’s containers at such designated location. Tenant shall accumulate its trash in containers supplied by Landlord and Tenant shall not permit trash to accumulate within the Premises or in the corridors or public areas adjacent to the Premises. Tenant shall cause each entity employed by it to perform work on the Premises to abide by the provisions of this Work Letter as to the storage of trash and shall require each such entity to perform its work in a way that dust and dirt is contained entirely within the Premises and not within any other portion of the Building or the Property and shall cause Tenant’s contractors to leave the Premises broom clean at the end of each day. Should Landlord deem it necessary to remove Tenant’s trash because of accumulation, an additional charge to Tenant will be on a time and material basis.

5. Tenant agrees that all services and work performed on the Premises by, on behalf of, or for the account of Tenant, including installation of materials and personal property delivered to the Premises shall be done in a first-class workmanlike manner using only good grades of material, shall be performed in accordance with Laws, and shall be performed only by persons covered by a collective bargaining agreement with the appropriate trade union.

6. Tenant agrees to protect, indemnify, defend and hold harmless the Landlord Parties from and against any and all losses, damages, liabilities, claims, liens, costs and expenses, including reasonable attorneys’ fees, of whatever nature, including those to the person and property of Tenant, its employees,

agents, invitees, licensees and others arising out of or in connection with the gross negligence or intentional misconduct of Tenant or Tenant’s contractors or subcontractors in or about the Premises and the Property, and the cost of any repairs to the Premises and the Property necessitated by activities of Tenant or Tenant’s contractors or subcontractors.

7. Landlord agrees to protect, indemnify, defend and hold harmless the Tenant from and against any and all losses, damages, liabilities, claims, liens, costs and expenses, including reasonable attorneys’ fees, of whatever nature, including those to the person and property of Landlord, its employees, agents, invitees, licensees and others arising out of or in connection with the gross negligence or intentional misconduct of Landlord or Landlord’s contractors or subcontractors in or about the Premises and the Property, and the cost of any repairs to the Premises and the Property necessitated by activities of Landlord or Landlord’s contractors or subcontractors.

8. Tenant shall secure, pay for, and maintain during the continuance of its work within the Premises, policies of insurance with such coverages and such amounts as Landlord may reasonably require in accordance with the terms of the Lease, which policies shall be endorsed to include Landlord and its contractors and their respective employees and agents and any Mortgagee as additional insured parties, and which shall provide thirty (30) days prior written notice of any alteration or termination of coverage. Tenant shall not permit Tenant’s contractors to commence any work until all required insurance has been obtained by Tenant and certificates evidencing such coverage have been delivered to and approved by Landlord in writing.

11. Termination of Work Letter; Survival of Terms . Landlord and Tenant acknowledge and agree that the provisions of this Work Letter are intended and designed to govern certain rights and obligations of the parties relating to the construction of the Tenant Improvements and other matters prior to the Substantial Completion Date. Accordingly, except as hereinafter set forth in this Section 11 , from and after the Substantial Completion Date, the terms and provisions of this Work Letter shall become null and void and of no further force or effect. Notwithstanding anything to the contrary in this Section 11 , however, the following provisions shall not terminate and shall continue in full force and effect after the Substantial Completion Date, and shall survive the Substantial Completion Date: Sections 1 and 5 (both of which shall terminate at such time as all punchlist items have been completed and all claims in connection therewith have been satisfied in full); Sections 10(2), 10(5), 10(6), 10(7), 11 and 12 (which shall remain in effect for the duration of the Term); and Section 13 (which shall terminate at such time as the parties have executed the Confirmatory Memorandum attached as Schedule 2 below).

12. Application of Work Letter . This Work Letter shall not be applicable to any space added to the Premises or in the event of a renewal or extension of the Term of the Lease or the exercise of any expansion option granted to Tenant pursuant to the Lease.

13. Confirmatory Memorandum . At the request of either party, at such time as the Substantial Completion Date has been finally determined, the parties shall jointly execute the Confirmatory Memorandum attached as Schedule 2 below, and such Confirmatory Memorandum shall be attached to and become a part of the Lease.

SCHEDULE 1

Plans

See Attached.

SCHEDULE 2

Form of Confirmatory Memorandum

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA (“Landlord”) and OMNICELL, INC., (“Tenant”) hereby execute and deliver this Confirmatory Memorandum pursuant to Section 13 of the Work Letter attached as Exhibit A to that certain Second Amendment to Lease between Landlord and Tenant dated , 2006.

1. This Confirmatory Memorandum is for the convenience and reference of the parties. The provisions of the Lease and the Work Letter shall be valid and given their full force and effect with respect to the terms contained in this Confirmatory Memorandum, notwithstanding the failure or refusal of either party to execute this document.

2. Landlord and Tenant further agree and acknowledge as follows: the Substantial Completion Date occurred on , 200 .

Executed and delivered as of , 200 .

	TENANT

	OMNICELL, INC. , a Delaware corporation


	By:
	Its:


	LANDLORD

	THE PRUDENTIAL INSURANCE COMPANY OF AMERICA , a New Jersey corporation

	By:	PDC Properties, Inc., its Agent


		By:
		Its:

Exhibit 10.10

POINT PLACE II, LLC

OFFICE LEASE

TABLE OF CONTENTS

Section 1: Basic Definitions and Provisions

a. Premises

b. Term

c. Permitted Use

d. Occupancy Limitation

e. Base Rent

f. Rent Payment Address

g. Security Deposit

h. Business Hours

i. Electrical Service

j. After Hours HVAC Rate

k. Parking

l. Notice Addresses

m. Broker

Section 2. Leased Premises

a. Premises

b. Rentable Square Foot Determination

c. Common Areas

Section 3: Term

a. Commencement and Expiration Dates

b. Adjustments to Commencement Date

c. Termination by Tenant for Failure to Deliver Possession

d. Delivery of Possession

e. Adjustment of Expiration Date

f. Right to Occupy

g. Commencement Agreement

Section 4: Use

a. Permitted Use

b. Prohibited Uses

c. Prohibited Equipment in Premises

Section 5: Rent

a. Payment Obligations

b. Base Rent

c. Additional Rent

Section 6: Security Deposit

a. Amount of Deposit

b. Application of Deposit

c. Refund of Deposit

Section 7: Services by Landlord

a. Base Services

b. Landlord’s Maintenance

c. No Abatement

d. Tenant’s Obligation to Report Defects

e. Limitation on Landlord’s Liability

Section 8: Tenant’s Acceptance and Maintenance of Premises

a. Acceptance of Premises

b. Move-in Obligations

c. Tenant’s Maintenance

d. Alterations to Premises

e. Restoration of Premises

f. Landlord’s Performance of Tenant’s Obligations

g. Construction Liens

h. Communications Compliance

i. Mold

Section 9: Property of Tenant

a. Property Taxes

b. Removal

Section 10: Signs

Section 11: Access to Premises

a. Tenant’s Access

b. Landlord’s Access

c. Emergency Access

Section 12: Tenant’s Compliance

a. Laws

b. Rules and Regulations

Section 13: ADA Compliance

a. Tenant’s Compliance

b. Landlord’s Compliance

c. ADA Notices

Section 14: Insurance Requirements

a. Tenant’s Liability Insurance

b. Tenant’s Property Insurance

c. Certificates of Insurance

d. Insurance Policy Requirements

e . Landlord’s Property Insurance

f. Mutual Waiver of Subrogation

Section 15: Indemnity

a. Indemnity

b. Defense Obligation

Section 16: Quiet Enjoyment

Section 17: Subordination; Attornment; Non-Disturbance; and Estoppel Certificate

a. Subordination and Attornment

b. Non-Disturbance

c. Estoppel Certificates

Section 18: Assignment — Sublease

a. Landlord Consent

b. Definition of Assignment

c. Permitted Assignments/Subleases

d. Notice to Landlord

e. Prohibited Assignments/Sublease

f. Limitation on Rights of Assignee/Sublessee

g. Tenant Not Released

h. Landlord’s Right to Collect Sublease Rents Upon Tenant Default

i. Excess Rents

j. Landlord’s Fees

k. Unauthorized Assignment or Sublease

Section 19: Damages to Premises

a. Landlord’s Restoration Obligations

b. Termination of Lease by Landlord

c. Termination of Lease by Tenant

d. Tenant’s Restoration Obligations

e. Rent Abatement

f. Waiver of Claims

Section 20: Eminent Domain

a. Effect on Lease

b. Right to Condemnation Award

Section 21: Environmental Compliance

a. Environmental Laws

b. Tenant’s Responsibility

c. Tenant’s Liability

d. Limitation on Tenant’s Liability

e. Inspections by Landlord

f. Landlord’s Liability

g. Property

h. Tenant’s Liability after Termination of Lease

Section 22: Default

a. Tenant’s Default

b. Landlord’s Remedies

c. Attorneys Fees

d. No Accord and Satisfaction

e. No Reinstatement

f. Summary Ejectment

iii

Section 23: Multiple Defaults

a. Loss of Option Rights

b. Increased Security Deposit

c. Effect on Notice Rights and Cure Periods

Section 24: Bankruptcy

a. Trustee’s Rights

b. Adequate Assurance

c. Assumption of Lease Obligations

Section 25: Notices

a. Addresses

b. Form; Delivery; Receipt

c. Address Changes

d. Notice by Legal Counsel

Section 26: Holding Over

Section 27: Intentionally Omitted.

Section 28: Broker’s Commissions

a. Broker

b. Landlord’s Obligation

c. Indemnity

Section 29: Miscellaneous

a. No Agency

b. Force Majeure

c. Building Standard Improvements

d. Limitation on Damages

e. Satisfaction of Judgments Against Landlord

f. Interest

g. Legal Costs

h. Sale of Premises or Building

i. Time of the Essence

j. Transfer of Security Deposit

k. Tender of Premises

l. Tenant’s Financial Statements

m. Recordation

n. Severability

o. Binding Effect

p. Entire Agreement

q. Good Standing

r. Terminology

s. Headings

t. Choice of Law

u. Effective Date

v. Landlord’s Lien

w. Joint and Several

x. No Construction Against Preparer

Section 30: Special Conditions

Section 31: Addenda and Exhibits

a. Lease Addendum Number One — Operating Expense Pass Throughs

b. Lease Addendum Number Two — Workletter

c. Exhibit A — Premises

d. Exhibit B — Rules and Regulations

e. Exhibit C — Commencement Agreement

f. Exhibit D — Insurance Certificate

g. Exhibit E - Guaranty

State of Tennessee:

County of Davidson:

OFFICE LEASE

THIS LEASE (“Lease”), made this 14th day of April, 2010, by and between POINT PLACE II, LLC , a Tennessee limited liability company, (“Landlord”) and OMNICELL, INC ., a Delaware corporation, (“Tenant”), provides as follows:

1. BASIC DEFINITIONS AND PROVISIONS. The following basic definitions and provisions apply to this Lease:

a. Premises.	Rentable Square Feet:	24,801
	Usable Square Feet:	24,801

	Building:	Point Place II
	Street Address:	Tax Assessor’s address:

		443 Allen Road

		Mailing Address:

		443 Donelson Pike

	City/County:	Nashville
	State/Zip Code:	Tennessee, 37214

b. Term.	Number of Months:	sixty (60) months
	Commencement Date:	The later of (i) July 1, 2010, or (ii) the date when the work to be performed by Landlord pursuant to the Workletter (as defined herein) has been substantially completed in accordance with the Plans (as defined herein) and either a temporary or permanent certificate of occupancy permitting Tenant’s occupancy and use of Premises has been issued.
	Expiration Date:	The fifth (5 th ) anniversary of the Commencement Date

c. Permitted Use.		General office use and associated activities.

d. Reserved.

e. Base Rent. The minimum base rent for the Term is $1,678,531.60, payable in monthly installments on the 1 st day of each month in accordance with the following Base Rent Schedule:

Months	Monthly Rent		Annual Rent		Annual Rent/SF
1-12	$	26,351.06	$	316,212.75	$	12.75
13-24	$	27,140.56	$	325,686.73	$	13.132
25-36	$	27,954.86	$	335,458.32	$	13.526
37-48	$	28,793.96	$	345,527.53	$	13.932
49-60	$	29,637.20	$	355,646.34	$	14.340
	Total Base Rent		$	1,678,531.60

f. Rent Payment Address.		Point Place II, LLC
		1996 Continental Drive
		Atlanta, GA 30345

g. Security Deposit.		None

h. Business Hours.		7:00 A.M. to 6:00 P.M. Monday through Friday (excluding National and State Holidays) and 8:00 A.M. to 1:00 P.M. on Saturday.

i. Electrical Service.		Building has four (4) 480 volt, three (3) 400 and one (1) 200 amp main services with four (4) separate meters, plus additional subpanels on each floor. Tenant may install redundant power facilities in locations and per specifications approved in writing by Landlord. Tenant shall pay for electricity use in the Premises and the Premises shall be constructed so that electrical use for the Premises is separately metered.

j. After Hours HVAC Rate.		None, as long as electrical charges are separately metered to the Premises and paid by Tenant, and if not then $35.00 per hour, per zone, with a minimum of two (2) hours per occurrence.

k. Parking.		Not to exceed four spaces per 1000 rentable square feet. Landlord to reserve four (4) spaces within a reasonable distance to Tenant’s entrance for visitors and executives.

l. Notice Addresses.

LANDLORD:

	Point Place II, LLC
	Attention: Mark Parker
	1996 Continental Drive
	Atlanta, GA 30345
	Facsimile: 928-244-6230

With a copy to:

	J. Marshall Martin III, Esq.
	Foltz Martin, LLC
	Five Piedmont Center
	Suite 750
	3525 Piedmont Road, NE
	Atlanta, Georgia 30305
	Facsimile: 404-237-1659

TENANT:	Omnicell, Inc.
	1201 Charleston Road
	Mountain View, CA 94043
	Attention: Omnicell Legal Dept. — Dan Johnston;
	Omnicell Facilities Dept. — Kirk Thompson;
	Randy Lipps, CEO; and Rob Seim, CFO

m. Broker

Colliers Turley Martin Tucker

Nashville Commercial Real Estate Services

2. LEASED PREMISES .

a. Premises. Landlord leases to Tenant and Tenant leases from Landlord the Premises identified in Section 1a and as more particularly shown on Exhibit A , attached hereto.

b. Rentable Square Foot Determination. The parties acknowledge that all square foot measurements are approximate and agree that the square footage figures in Section 1a shall be conclusive for all purposes with respect to this Lease.

c. Common Areas. Tenant shall have non-exclusive access to and right to use the common areas of the Building. The common areas generally include space that is not included in portions of the Building set aside for leasing to tenants or reserved for Landlord’s exclusive

use, including entrances, hallways, lobbies, parking areas, walkways and plazas (“Common Areas”). Landlord has the exclusive right to (i) designate the Common Areas, (ii) change the designation of any Common Area and otherwise modify the Common Areas, and (iii) permit special use of the Common Areas, including temporary exclusive use for special occasions. Tenant shall not interfere with the rights of others to use the Common Areas. All use of the Common Areas shall be subject to any rules and regulations promulgated by Landlord, provided such rules are uniformly applied and enforced against all tenants in the Building.

3. TERM .

a.(1) Commencement and Expiration Dates. The Lease Term commences on the Commencement Date and expires on the Expiration Date, as set forth in Section 1b.

a. (2) Adjustments to Commencement Date. The Commencement Date shall be adjusted as follows:

i. If Tenant occupies the Premises for the purpose of operating its business therein prior to the Commencement Date with Landlord’s prior consent, the Commencement Date shall be the date of Tenant’s occupancy. All rent and other obligations under this Lease shall begin on the Commencement Date, and the Expiration Date shall be the fifth anniversary of the Commencement Date.

ii. If Landlord, for any reason, cannot deliver possession of the Premises to Tenant on the Commencement Date, then the Commencement Date, Expiration Date, and all other dates that may be affected by their change, shall be revised to conform to the date of Landlord’s delivery of possession of the Premises to Tenant. Any such delay shall not relieve Tenant of its obligations under this Lease, and neither Landlord nor Landlord’s agents shall be liable to Tenant for any loss or damage resulting from the delay in delivery of possession.

b. Termination by Tenant for Failure to Deliver Possession. In the event Landlord is unable to deliver possession of the Premises on or before October 1, 2010 (excluding any delays resulting from force majeure or caused by Tenant — “Excused Delays” (the “Delivery Deadline”)), then Tenant may terminate this Lease by giving notice to Landlord within 15 days after the Delivery Deadline. Tenant may not terminate the Lease, however, if it has taken possession of any part of the Premises.

c. Delivery of Possession. Unless otherwise specified in the Workletter attached as Lease Addendum Number One, “delivery of possession” of the Premises shall mean the earlier of: (i) the date Landlord has the Premises ready for occupancy by Tenant as evidenced by a permanent or temporary Certificate of Occupancy issued by proper governmental authority, or (ii) the date Landlord could have had the Premises ready had there been no Delays attributable to Tenant. Notwithstanding the foregoing, the “delivery of possession” of the Premises shall not under any circumstances occur prior to July 1, 2010.

d. Adjustment of Expiration Date. If the Expiration Date does not occur on the last day of a calendar month, then the Term shall be extended by the number of days necessary to cause the Expiration Date to occur on the last day of the last calendar month of the Term. Tenant shall pay Base Rent and Additional Rent for such additional days at the same rate payable for the portion of the last calendar month immediately preceding such extension.

e. Right to Occupy. Tenant shall not occupy the Premises for the purpose of operating its business therein until Tenant has complied with all of the following requirements to the extent applicable under the terms of this Lease: (i) delivery of all certificates of insurance, and (ii) if Tenant is an entity, receipt of a good standing certificate from the State where it was organized and a certificate of authority to do business in the State in which the Premises are located (if different). Tenant’s failure to comply with these (or any other conditions precedent to occupancy under the terms of this Lease) shall not delay the Commencement Date. Tenant shall be permitted to enter the Premises for the purpose of delivering and installing Tenant’s furniture, fixtures and equipment to the Premises prior to occupying the Premises and/or the Commencement Date, so long as Tenant does not interfere with Landlord’s work.

f. Commencement Agreement. The Commencement Date, Term, and Expiration Date may be set forth in a Commencement Agreement similar to Exhibit C, attached hereto, to be prepared by Landlord and executed by the parties.

g. Renewal Options . Tenant shall have and is hereby granted Two (2) options to extend the Term for an additional five (5) years each (the “Renewal Terms”), upon the same terms, covenants, conditions and Rent as set forth herein, subject to adjustments to Base Rent described below; provided that Tenant is not in default of this Lease at the time of exercise of each renewal option, nor in default on the date of commencement of each Renewal Term. Tenant may exercise each renewal option only by giving irrevocable and unconditional notice thereof to Landlord not less than six (6) months prior to the expiration of the initial Term or the current Renewal Term. Should Tenant fail to give Landlord such timely written notice, all remaining rights of renewal shall automatically expire.

The Base Rent for any Renewal Term shall be ninety-five percent (95%) of the then prevailing rental rate, as of the date of Tenant’s notice, for comparable leases in the Nashville, Tennessee Airport-North office sub-market (the “Sub-Market”), during any Renewal Term on a per rentable square foot basis (the “Market Rental Rate”), taking into account all relevant factors, including, without limitation, the applicable terms and conditions then being negotiated by comparable credit tenants for space of comparable size and condition in comparable office buildings in the Sub-Market, taking into consideration the location, quality and age of the Building, floor level, extent of leasehold improvements (e.g., existing or to be provided), rental abatements, lease takeover/assumptions, moving expense and other concessions (note: such concessions shall be deemed only to reduce the effective rate and therefore will result in a lower Market Rental Rate, but Landlord shall not be obligated to provide any free rent, lease assumptions, moving allowances or other concessions whatsoever), term of lease, extent of services to be provided, distinction between “gross” and “net” lease, base year or other amounts allowed for escalation purposes (e.g., expense stop), the time the particular rental rate under consideration became or is to become effective, brokerage commissions, parking charges (if any) and creditworthiness of tenant. It is agreed that bona fide written offers to lease comparable space located elsewhere in the Building, from third parties (at arm’s length), may be

used as an indication of the Market Rental Rate. Notwithstanding anything herein to the contrary, it is acknowledged and agreed that the Market Rental Rate shall in no event be less than the annual rate of Base Rent that Tenant is then paying under the terms of the Lease as of the expiration of the Term (or a Renewal Term) subject to the same timing and rate of increase as applicable during the Term (the “Floor”).

If Tenant exercises its option for any Renewal Term by written notice to Landlord as provided above (the “Notice Date”), Landlord and Tenant shall meet promptly and shall negotiate, in good faith, to reach agreement on the market Rental Rate within sixty (60) days following the Notice Date. If Landlord and Tenant are unable to reach agreement within such sixty (60) day period, then the Market Rental Rate shall be determined as follows:

Landlord and Tenant shall mutually agree upon a commercial real estate broker who has at least ten (10) years experience, immediately prior to the date in question, evaluating Market Rental Rates for similar Class A commercial office space in the Sub-Market. If the parties are unable to agree on a broker the parties shall ask the commercial division of the Nashville Board of Realtors to designate a broker. The broker agreed upon or so designated is hereinafter referred to as the “Lease Broker”. Within ten (10) business days after the Lease Broker has been agreed upon or appointed, Landlord and Tenant shall each deliver to Lease Broker in writing their respective written determinations of the Market Rental Rate. Within thirty (30) days after receipt of the final written determinations, the Lease Broker shall select Landlord’s determination or Tenant’s determination, but no other amount and no compromise between the two, as the Market Rental Rate. The fees and expenses of the Lease Broker shall be borne equally by Landlord and Tenant.

Subject to the Floor, the determination of the Market Rental Rate as provided above shall be final, binding and conclusive on both Landlord and Tenant, shall be considered a final award pursuant to the rules of the American Arbitration Association and any applicable state or federal law and judgment may be had on the award in any court of competent jurisdiction.

During any Renewal Term, Base Rent shall increase by three percent (3%) per annum on each twelve (12) month anniversary of the commencement date of the Renewal Term (that is, for example, if the renewal rate is the Floor, then the Floor shall apply for the first year of the Renewal Term and then the escalation shall apply; it is not the intent of the parties that if the renewal rate is the Floor that the Floor be subject to an escalation of 3% at the commencement of the Renewal Term).

4. USE.

a. Permitted Use. The Premises may be used only for Tenant’s Permitted Use as defined in Section 1c.

b. Prohibited Uses. Tenant shall not use the Premises:

i. In violation of any restrictive covenants which apply to the Premises (provided, however, Landlord represents and warrants there are no restrictive covenants that apply to the Premises that would prohibit the Permitted Use);

ii. In any manner that constitutes a nuisance or trespass;

iii. In any manner which increases any insurance premiums, or makes such insurance unavailable to Landlord on the Building; provided that, in the event of an increase in Landlord’s insurance premiums which results from Tenant’s use of the Premises, Landlord may elect to permit the use and charge Tenant for the increase in premiums, and Tenant’s failure to pay Landlord within 30 days after receipt of an invoice and supporting documentation relating to the amount of such increase shall be an event of default;

iv. If the Premises is not separately metered for electricity or if Tenant has failed to pay the applicable electric costs, then in any manner that creates unusual demands for electricity, heating or air conditioning; or

v. For any purpose except the Permitted Use, unless consented to by Landlord in writing.

c. Prohibited Equipment in Premises. Tenant shall not install any equipment in the Premises that places unusual demands on the electrical, heating or air conditioning systems (“High Demand Equipment”) without Landlord’s prior written consent. No such consent will be given if Landlord determines, in its opinion, that such equipment may not be safely used in the Premises or that electrical service is not adequate to support the equipment. Landlord’s consent may be conditioned, without limitation, upon separate metering of the High Demand Equipment and Tenant’s payment of all engineering, equipment, installation, maintenance, removal and restoration costs and utility charges associated with the High Demand Equipment and the separate meter. If High Demand Equipment used in the Premises by Tenant affects the temperature otherwise maintained by the heating and air conditioning system, Landlord shall have the right to install supplemental air conditioning units in the Premises with the cost of engineering, installation, operation and maintenance of the units to be paid by Tenant. All costs and expenses relating to High Demand Equipment and Landlord’s administrative costs not to exceed 5% of such costs and expenses (such as reading meters and calculating invoices) shall be Additional Rent, payable by Tenant within thirty (30) days after receipt of an invoice therefore. Landlord agrees and acknowledges that (a) the server room and the supplemental HVAC unit to serve the server room are a part of the Tenant Improvements (as defined herein), (b) the server room and the supplemental HVAC unit to serve the server room will be operated 24 hours per day, 365 days per year during the Term, (c) electrical service to such server room and the supplemental HVAC unit will not be separately metered or sub-metered, and (c) such server room and the supplemental HVAC unit shall not be deemed High Demand Equipment under any circumstances. Notwithstanding the foregoing, in the event the Premises is separately metered for electricity and Tenant pays the electrical charges, the foregoing shall not apply.

5. RENT.

a. Payment Obligations. Tenant shall pay Base Rent and Additional Rent (collectively, “Rent”) on or before the first day of each calendar month during the Term, as follows:

i. Rent payments shall be sent to the Rent Payment Address set forth in Section 1f.

ii. Rent shall be paid without previous demand or notice and without set off or deduction. Tenant’s obligation to pay Rent under this Lease is completely separate and independent from any of Landlord’s obligations under this Lease.

iii. If the Term commences on a day other than the first day of a calendar month, then Rent for such month shall be (i) prorated for the period between the Commencement Date and the last day of the month in which the Commencement Date falls, and (ii) due and payable on the Commencement Date.

iv. If Rent is not received within five (5) days after the due date, Landlord shall be entitled to an overdue payment charge in the amount of five percent (5%) of the Rent due. In addition, if Rent is not received within fifteen (15) days after the due date, Landlord shall be entitled to an overdue payment charge in the amount of fifteen percent (15%) of the Rent due. Notwithstanding the foregoing, Landlord shall not apply such charge if there has been no past due payment within the twelve (12) prior calendar months before the past due payment.

v. If Landlord presents Tenant’s check to any bank and Tenant has insufficient funds to pay for such check, then Landlord shall be entitled to the maximum lawful bad check fee or five percent (5%) of the amount of such check, whichever amount is less.

b. Base Rent . Tenant shall pay Base Rent as set forth in Section 1e.

c. Additional Rent . In addition to Base Rent, Tenant shall pay as rent all sums and charges due and payable by Tenant under this Lease (“Additional Rent”), including, but not limited to, the following:

i. Tenant’s Proportionate Share of the increase in Landlord’s Operating Expenses as set forth in Lease Addendum Number Two;

ii. Any sales or use tax imposed on rents collected by Landlord or any tax on rents in lieu of ad valorem taxes on the Building, even though laws imposing such taxes attempt to require Landlord to pay the same; and

iii. Any construction supervision fees in connection with the construction of Tenant Improvements beyond those which Landlord has agreed to perform pursuant to the Workletter attached as Lease Addendum Number One.

6. SECURITY DEPOSIT. Intentionally deleted.

7. SERVICES BY LANDLORD .

a. Base Services. Landlord shall cause to be furnished to the Building, or as applicable, the Premises, in common with other tenants the following services:

i. Water (if available from city mains) for drinking, lavatory and toilet purposes.

ii. Electricity (if available from the utility supplier) shall be available to the Building but Tenant shall, pursuant to a separate meter, pay for all electricity for the Premises and HVAC services in the Premises.

iii. Reserved.

iv. Lighting as set forth in the Workletter attached hereto as Lease Addendum Number One; Tenant shall service, replace and maintain at its own expense any incandescent fixtures, table lamps, or lighting in the Premises other than the building standard fluorescent light, and any dimmers or lighting controls in the Premises other than controls for the building standard fluorescent lighting.

v. Heating and air conditioning for the reasonably comfortable use and occupancy of the Premises during Business Hours as set forth in Section 1h; provided that the electrical cost thereof shall be paid by Tenant by way of separate metering of the Premises. Heating and cooling conforming to any governmental regulation prescribing limitations thereon shall be deemed to comply with this service and, to the extent Tenant controls heating and cooling levels and violates governmental regulations, then Tenant shall indemnify and hold Landlord harmless from all fines, penalties, loss, cost, liability and attorneys’ fees in connection with any violation or alleged purported violation.

vi. After Business Hours, weekend and holiday heating and air conditioning at the After Hours HVAC rate set forth in Section 1j, with such charges subject to commercially reasonable annual increases as determined by Landlord; provided, however, that Landlord, in its sole discretion, may install sub-meters for HVAC services, in which event Tenant shall pay the actual amounts shown on said sub-meters for HVAC services consumed by Tenant.

vii. Janitorial services five (5) days a week (excluding National and State holidays) after Business Hours.

viii. A reasonable pro-rata share of the unreserved parking spaces of the Building, not to exceed the Parking ratio (4 spaces per 1,000 rentable square feet) specified in Section 1k, for use by Tenant’s employees and visitors in common with the other tenants and their employees and visitors.

b. Landlord’s Maintenance. Landlord shall make all repairs and replacements to the Building (including Building fixtures and equipment), Common Areas and Building Standard Improvements in the Premises, except for repairs and replacements that Tenant must make under Section 8. Landlord’s maintenance shall include the roof, foundation, exterior walls,

interior structural walls, all structural components, and all Building systems, such as mechanical, electrical, HVAC, and plumbing. Repairs or replacements shall be made within fifteen (15) days following Landlord’s receipt of notice of the need for such repairs or Landlord having actual knowledge of the need for a repair or replacement; provided, however, if such repairs cannot reasonably be completed within such 15 day period, then as long as Landlord has commenced and is diligently pursuing repairs, then Landlord shall be afforded a reasonable period to complete such repairs.

c. No Abatement. There shall be no abatement or reduction of Rent by reason of any of the foregoing services not being continuously provided to Tenant unless such services are interrupted for any period of 72 consecutive hours for reasons in Landlord’s reasonable control. After Business Hours, Landlord shall have the right to shut down the Building systems (including electricity and HVAC systems) for required maintenance and safety inspections, and in cases of emergency.

d. Tenant’s Obligation to Report Defects. Tenant shall report to Landlord as quickly as reasonably possible any defective condition in or about the Premises discovered by Tenant.

e. Limitation on Landlord’s Liability. Landlord shall not be liable to Tenant for any damage caused to Tenant and its property due to the Building or any part or appurtenance thereof being improperly constructed or being or becoming out of repair, or arising from the leaking of gas, water, sewer or steam pipes, or from problems with electrical service.

8. TENANT’S ACCEPTANCE AND MAINTENANCE OF PREMISES .

a. Acceptance of Premises. Subject to the terms of the attached Workletter, if any, Tenant’s occupancy of the Premises for the purpose of opening the Premises for business is Tenant’s representation to Landlord that (i) Tenant has examined and inspected the Premises, (ii) finds the Premises to be as represented by Landlord and satisfactory for Tenant’s intended use, and (iii) constitutes Tenant’s acceptance of the Premises “as is” upon completion and acceptance of the items on the punchlist to be delivered pursuant to Lease Addendum Number One - Workletter. Landlord makes no representation or warranty as to the condition of the Premises except as may be specifically set forth in the Workletter. Tenant shall have the right of use and benefit of all warranties and guaranties issued by equipment manufacturers and contractors for construction of the Tenant Improvements (as defined herein) as part of the scope of work completed by Workletter.

b. Move-In Obligations. Tenant shall schedule its move-in with the Landlord’s Property Manager. Unless otherwise approved by Landlord’s Property Manager, move-in shall not take place during Business Hours. During Tenant’s move-in, a representative of Tenant must be on-site with Tenant’s moving company to insure proper treatment of the Building and the Premises. Entrances, hallways and other Common Areas must remain in use for the general public during Business Hours. Any specialized use of Common Areas must be coordinated with Landlord’s Property Manager. Tenant must properly dispose of all packing material and refuse in accordance with the Rules and Regulations. Any damage or destruction to the Building or the Premises due to moving will be the sole responsibility of Tenant.

c. Tenant’s Maintenance. Tenant shall: (i) keep the Premises and fixtures in good order; (ii) make repairs and replacements to the Premises or Building needed because of Tenant’s or any officer, agent, employee, contractor, servant, invitee or guest of Tenant’s misuse or negligence; (iii) repair and replace any Non-Standard Improvements (as defined herein), special equipment or decorative treatments, installed by or at Tenant’s request that serve the Premises (unless the Lease is ended because of casualty loss or condemnation); and (iv) not commit waste. Tenant shall also be solely responsible for maintaining the following items, if installed in the Premises: (i) ice machines; (ii) sump pumps; (iii) refrigerators; (iv) dishwashers; (v) garbage disposals; (vi) coffee machines and microwaves; (v) sinks and faucets; (vi) water filter and purification systems; (vii) all kitchen drain lines; (viii) executive restrooms; (ix) Simplex (or key pad) locks; (x) security access systems or alarm systems; (xi) Tenant specific hot water heaters; and (xii) showers and spas. Tenant shall maintain these items in good working order. Tenant shall have the right of use and benefit of all warranties and guaranties issued by equipment manufacturers and contractors for construction of the Tenant Improvements as part of the scope of work contemplated by Workletter.

d. Alterations to Premises. Tenant shall make no structural alterations to the Premises without Landlord’s written consent (not to be unreasonably withheld). Tenant shall be permitted to make interior, non-structural alterations to the Premises which cost less than $10,000 (the”Minor Alterations”). If Tenant requests alterations that are not Minor Alterations, then Tenant shall provide Landlord’s Property Manager with a complete set of construction drawings. If Landlord consents to the alterations, Tenant will contract for and manage such work. All alterations that are not Minor Alterations are subject to the prior written approval of Landlord. Tenant shall not allow any liens to be filed against the Premises or the Building by reason of any such work and Tenant shall remove and bond off any such liens within twenty (20) days after filing thereof.

e. Restoration of Premises. At the expiration or earlier termination of this Lease, Tenant shall deliver each and every part of the Premises in good repair and condition, ordinary wear and tear and damage by insured casualty excepted. If Tenant has required or installed Non-Standard Improvements (as defined herein) such improvements shall be removed as part of Tenant’s restoration obligation. Landlord, however, may elect to require Tenant to leave any Non-Standard Improvements in the Premises unless at the time of such Non-Standard Improvements were installed, Landlord agreed in writing that Tenant could remove such improvements. Tenant shall repair any damage caused by the removal of any Non-Standard Improvements. “Non-Standard Improvements” means such items as (i) High Demand Equipment and separate meters, (ii) all wiring and cabling from the point of origin to the termination point, (iii) raised floors for computer or communications systems, (iv) telephone equipment, security systems, and UPS systems, (iv) equipment racks, and (v) alterations installed by or at the request of Tenant after the Commencement Date. Landlord and Tenant acknowledge that (i) upon the Effective Date the Premises are unfinished in a “shell” condition and that all Tenant Improvements will be defined and agreed upon in the Workletter; and (ii) Tenant shall not be required to return the Premises to its “shell” condition upon the expiration or earlier termination of the Lease.

f. Landlord’s Performance of Tenant’s Obligations. If Tenant does not perform its maintenance or restoration obligations in a timely manner, commencing the same within ten (10) days (provided that if Landlord reasonably deems it as an emergency, then work must

commence within one (1) day or Landlord may take necessary action to address the emergency) after receipt of notice from Landlord specifying the work needed, and thereafter diligently and continuously pursuing the work until completion, then Landlord shall have the right, but not the obligation, to perform such work. Any amounts expended by Landlord on such maintenance or restoration shall be Additional Rent to be paid by Tenant to Landlord within thirty (30) days after demand.

g. Construction Liens. Tenant shall have no power to do any act or make any contract that may create or be the foundation of any lien, mortgage or other encumbrance upon the reversionary or other estate of Landlord, or any interest of Landlord in the Premises. NO CONSTRUCTION LIENS OR OTHER LIENS FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED TO THE PREMISES SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO THE PREMISES OR THE BUILDING. Tenant shall keep the Premises and the Building free from any liens arising out of any work performed, materials furnished, or obligations incurred by or on behalf of Tenant. Should any lien or claim of lien be filed against the Premises or the Building by reason of any act or omission of Tenant or any of Tenant’s agents, employees, contractors or representatives, then Tenant shall cause the same to be canceled and discharged of record by bond or otherwise within 20 days after the filing thereof. Should Tenant fail to discharge the lien within 20 days, then Landlord may discharge the lien. The amount paid by Landlord to discharge the lien (whether directly or by bond), plus all administrative and legal costs incurred by Landlord, shall be Additional Rent payable on demand. The remedies provided herein shall be in addition to all other remedies available to Landlord under this Lease or otherwise.

h. Communications Compliance. Tenant acknowledges and agrees that any and all telephone and telecommunication services desired by Tenant shall be ordered and utilized at the sole expense of Tenant. Unless Landlord requests otherwise or consents in writing, all of Tenant’s telecommunications equipment shall be located and remain solely in the Premises. Landlord shall not have any responsibility for the maintenance of Tenant’s telecommunications equipment, including wiring; nor for any wiring or other infrastructure to which Tenant’s telecommunications equipment may be connected (provided, however, if the Building’s telecommunications room/closet is located outside of the Premises, Landlord shall be responsible to maintain the room in good condition but shall not responsible for maintaining any telecommunications equipment installed therein that is the personal property of Tenant). Tenant agrees that, to the extent any telecommunications service is interrupted, curtailed or discontinued, Landlord shall have no obligation or liability with respect thereto. Landlord shall have the right, upon 48 hours prior oral or written notice to Tenant, to interrupt or turn off telecommunications facilities in the event of emergency or as necessary in connection with repairs to the Building or installation of telecommunications equipment for other tenants of the Building. In the event that Tenant wishes at any time to utilize the services of a telephone or telecommunications provider whose equipment is not then servicing the Building, the provider shall not be permitted to install its lines or other equipment within the Building without first securing the prior written approval of Landlord. Landlord’s approval may be conditioned in such a manner to as to protect Landlord’s financial interests, the interest of the Building, and the other tenants therein. The refusal of Landlord to grant its approval to any prospective telecommunications provider shall not be deemed a default or breach by Landlord of its obligation under this Lease. The provision of this paragraph may be enforced solely by Tenant and Landlord, are not for the benefit of any other party, and specifically but without limitation, no

telephone or telecommunications provider shall be deemed a third party beneficiary of this Lease. At Landlord’s option, Tenant may be required to remove any and all telecommunications equipment (including wireless equipment) installed in the Premises or elsewhere in or on the Building by or on behalf of Tenant, including wiring, or other facilities for telecommunications transmittal upon the expiration or termination of the Lease and at Tenant’s sole cost. Notwithstanding anything to the contrary herein, Tenant shall be permitted to install and use a wireless LAN in the Premises and a “dish” for cable television. Any dish shall be installed in a location approved by Landlord and without damage to the Building or the roof of the Building and Tenant shall take any steps necessary to avoiding violating any roof warranty, including using approved roofing contractor.

i. Mold . Tenant shall be responsible for taking appropriate and timely measures to prevent the growth of mold and mildew within the Premises, including but not limited to (1) preventing moisture accumulation in the Premises by Tenant’s personal equipment, including on windows, walls and other surfaces; (2) promptly reporting any malfunction of the heating or air conditioning system in the Premises; (3) Tenant will not obstruct the heating and air conditioning system from performing as designed; (4) promptly reporting any water intrusion or accumulation or other moisture accumulation in or about the Premises; and (5) promptly reporting any visible mold in the Premises. Except for matters arising from the negligence or willful acts of Landlord, and its employees, agents, contractor, other tenants, invitees or licensees, Tenant shall indemnify Landlord and hold Landlord harmless from and against any and all losses, liabilities, including strict liability, obligations, damages, injuries, costs, expenses, including reasonable attorneys’ fees, costs of settlement or judgments and claims of any kind whatsoever paid, incurred or suffered by, or asserted against Landlord by any person, entity, or governmental agency for, with respect to, or as a direct or indirect result of the presence of mold or mildew in the Premises or any adjacent portions of the Building caused by the negligence or willful acts of Tenant. Notwithstanding anything to the contrary herein, in the event Tenant complies with its prompt reporting requirements under clauses (2), (4) and (5) above, Tenant shall not be liable in any way for Landlord’s failure to promptly address such matters reported to Landlord.

9. PROPERTY OF TENANT.

a. Property Taxes. Tenant shall pay when due all taxes levied or assessed upon Tenant’s equipment, fixtures, furniture, leasehold improvements and personal property located in the Premises.

b. Removal. Provided Tenant is not in default and subject to the terms and provisions of Section 8(e), Tenant may remove all fixtures and equipment which it has placed in the Premises; provided, however, Tenant must repair all damages caused by such removal. If Tenant does not remove its property from the Premises upon the expiration or earlier termination (for whatever cause) of this Lease, such property shall be deemed abandoned by Tenant, and Landlord may dispose of the same in whatever manner Landlord may elect without any liability to Tenant.

10. SIGNS. Except as otherwise permitted herein, Tenant may not erect, install or display any sign or advertising material upon the exterior of the Building or Premises (including any exterior doors, walls or windows) without the prior written consent of Landlord, which

consent may be withheld in Landlord’s sole discretion. Door and directory signage shall be provided and installed by the Landlord in accordance with building standards at Landlord’s expense, unless otherwise provided in the Workletter attached as Lease Addendum Number One. Notwithstanding anything to the contrary herein, Tenant may install exterior signage on the Building subject to Landlord’s prior written approval of the signage (not to be unreasonably delayed, denied or withheld) and subject to compliance with all applicable city codes. Landlord hereby consents to Tenant’s installation of the signage described in Schedule 10 attached hereto in accordance with the design specifications described in Schedule 10 . Tenant acknowledges and agrees that the design specifications set forth on Schedule 10 allow and allocate to Tenant one-half (1/2) of the total exterior sign space permitted to the Building under current sign ordinances, it being the intent that the remaining space is reserved to Landlord and/or future Tenants in the rest of the Building.

11. ACCESS TO PREMISES .

a. Tenant’s Access. Tenant, its agents, employees, invitees, and guests, shall have access to the Premises and reasonable ingress and egress to common and public areas of the Building twenty-four hours a day, seven days a week; provided, however, Landlord by reasonable regulation may control such access for the comfort, convenience, safety and protection of all tenants in the Building, or as needed for making repairs and alterations. Tenant shall be responsible for providing access to the Premises to its agents, employees, invitees and guests after business hours and on weekends and holidays, but in no event shall Tenant’s use of and access to the Premises during non-Business Hours compromise the security of the Building.

b. Landlord’s Access. Landlord shall have the right, at all reasonable times and upon reasonable oral notice, either itself or through its authorized agents, to enter the Premises (i) to make repairs, alterations or changes as Landlord deems necessary, (ii) to inspect the Premises, mechanical systems and electrical devices, and (iii) to show the Premises to prospective mortgagees and purchasers. Within one hundred eighty (180) days prior to the Expiration Date, Landlord shall have the right, either itself or through its authorized agents, to enter the Premises at all reasonable times to show prospective tenants. Landlord shall exercise such access rights so as not to unreasonably disturb the operation of Tenant’s business.

c. Emergency Access. Landlord shall have the right to enter the Premises at any time without notice in the event of an emergency.

d. Electronic Code . Tenant shall provide Landlord with the security code in the event an electronic lock or other coded security apparatus is installed at the Premises.

12. TENANT’S COMPLIANCE.

a. Laws. Tenant shall comply with all applicable laws, ordinances and regulations affecting the Premises, whether now existing or hereafter enacted.

b. Rules and Regulations. Tenant shall comply with the Rules and Regulations attached as Exhibit B. The Rules and Regulations may be modified from time to time by

Landlord, effective as of the date delivered to Tenant or posted on the Premises, provided such rules are uniformly applicable to all tenants in the Building. Any conflict between this Lease and the Rules and Regulations shall be governed by the terms of this Lease.

13. ADA COMPLIANCE .

a. Tenant’s Compliance. Tenant, at Tenant’s sole expense, shall comply with all laws, rules, orders, ordinances, directions, regulations and requirements of federal, state, county and municipal authorities now in force, which shall impose any duty upon Landlord or Tenant with respect to the use or occupation of the Premises or alteration of the Premises to accommodate persons with special needs, including using all reasonable efforts to comply with The Americans With Disabilities Act (the “ADA”).

b. Landlord’s Compliance. Landlord, at Landlord’s sole expense, shall comply with the requirements of the ADA as it applies to the Common Areas and restrooms of the Building; but Landlord shall have no responsibility for ADA compliance with respect to the Premises. Landlord shall not be required to make changes to the Common Areas or restrooms of the Building to comply with ADA standards adopted after construction of the Building unless specifically required to do so by law.

c. ADA Notices. If Tenant receives any notices alleging a violation of ADA relating to any portion of the Building or Premises (including any governmental or regulatory actions or investigations regarding non-compliance with ADA), then Tenant shall notify Landlord in writing within ten (10) days of such notice and provide Landlord with copies of any such notice.

14. INSURANCE REQUIREMENTS .

a. Tenant’s Liability Insurance. Throughout the Term, Tenant, at its sole cost and expense, shall keep or cause to be kept for the mutual benefit of Landlord, Landlord’s Property Manager, and Tenant, Commercial General Liability Insurance (1986 ISO Form or its equivalent) with a combined single limit, each Occurrence and General Aggregate-per location of at least TWO MILLION DOLLARS ($2,000,000), which policy shall insure against liability of Tenant, arising out of and in connection with Tenant’s use of the Premises, and which shall insure the indemnity provisions contained in this Lease. Not more frequently than once every two (2) years, Landlord may require the limits to be increased if in its reasonable judgment (or that of its mortgagee) the coverage is insufficient provided that Tenant shall not be required to maintain insurance in amounts materially in excess of that typically maintained in similar buildings in the Nashville, Tennessee metropolitan area.

b. Tenant’s Property Insurance. Tenant shall also carry the equivalent of ISO Special Form Property Insurance on Tenant’s Property for full replacement value and with coinsurance waived. For purposes of this provision, “Tenant’s Property” shall mean Tenant’s personal property and fixtures, and any Non-Standard Improvements to the Premises. Except as otherwise permitted under this Lease, Tenant shall neither have, nor make, any claim against Landlord for any loss or damage to the Tenant’s Property, regardless of the cause of the loss or damage.

c. Certificates of Insurance. Prior to occupying the Premises, and annually thereafter, Tenant shall deliver to Landlord certificates similar to that provided in Exhibit D attached to this Lease and incorporated here for reference or other evidence of insurance satisfactory to Landlord. All such policies shall be non-assessable and shall contain language to the extent obtainable that: (i) any loss shall be payable notwithstanding any act or negligence of Landlord or Tenant that might otherwise result in forfeiture of the insurance, (ii) that the policies are primary and non-contributing with any insurance that Landlord may carry, and (iii) that the policies cannot be canceled, non-renewed, or coverage reduced except after thirty (30) days’ prior notice to Landlord. If Tenant fails to provide Landlord with such certificates or other evidence of insurance coverage, Landlord may obtain such coverage and the cost of such coverage shall be Additional Rent payable by Tenant upon demand.

d. Insurance Policy Requirements. Tenant’s insurance policies required by this Lease shall: (i) be issued by insurance companies licensed to do business in the state in which the Premises are located with a general policyholder’s ratings of at least A- and a financial rating of at least VI in the most current Best’s Insurance Reports available on the Commencement Date, or if the Best’s ratings are changed or discontinued, the parties shall agree to a comparable method of rating insurance companies; (ii) name Landlord as an additional insured as its interest may appear [other landlords or tenants may be added as additional insureds in a blanket policy]; (iii) provide that the insurance not be canceled, non-renewed or coverage materially reduced unless thirty (30) days advance notice is given to Landlord; (iv) be primary policies; (v) provide that any loss shall be payable notwithstanding any gross negligence of Landlord or Tenant which might result in a forfeiture thereunder of such insurance or the amount of proceeds payable; (vi) have no deductible exceeding ONE HUNDRED THOUSAND DOLLARS ($100,000), unless approved in writing by Landlord; and (vii) be maintained during the entire Term and any extension terms.

e. Landlord’s Property Insurance. Landlord shall keep the Building, including the improvements (but excluding Tenant’s Property), insured against damage and destruction by perils insured by the equivalent of ISO Special Form Property Insurance in the amount of the full replacement value of the Building.

f. Mutual Waiver of Subrogation. Anything in this Lease to the contrary notwithstanding, Landlord hereby releases and waives unto Tenant (including all partners, stockholders, officers, directors, employees and agents thereof), its successors and assigns, and Tenant hereby releases and waives unto Landlord (including all partners, stockholders, officers, directors, employees and agents thereof), its successors and assigns, all rights to claim damages for any injury, loss, cost or damage to persons or to the Premises or any other casualty, as long as the amount of such injury, loss, cost or damage has been paid either to Landlord, Tenant, or any other person, firm or corporation, under the terms of any Property, General Liability, or other policy of insurance, to the extent such releases or waivers are permitted under applicable law (or would have been paid had such insurance as required by this Lease been in place).

All policies of Property Insurance carried or maintained pursuant to this Lease shall contain or be endorsed to contain a provision whereby the insurer waives all rights of subrogation against either Tenant or Landlord, as the case may be, provided such a provision shall be obtainable. If insurance policies which such waiver of subrogation provision shall not be obtainable, then the

provisions relating to waiver of subrogation as contained in this Section 14(f) shall have no effect during such time as insurance policies with a waiver of subrogation shall not be obtainable. If any provision relating to a waiver of subrogation as set forth in this Section 14(f) shall contravene any present or future law with respect to exculpatory agreements, the liability of the party affected shall be deemed not released, but shall be secondary to the other’s insurer.

15. INDEMNITY. Subject to the insurance requirements, releases and mutual waivers of subrogation set forth in this Lease, Tenant agrees as follows:

a. Indemnity. Tenant shall indemnify and hold Landlord harmless from and against any and all claims, damages, losses, liabilities, lawsuits, costs and expenses (including attorneys’ fees at all tribunal levels) arising out of or related to (i) any activity, work, or other thing done, permitted or suffered by Tenant in or about the Premises or the Building, (ii) any breach or default by Tenant in the performance of any of its obligations under this Lease, or (iii) any act or neglect of Tenant, or any officer, agent, employee or contractor of Tenant. Tenant shall not under any circumstances be obligated to indemnify and hold Landlord harmless from and against any such claims caused by the negligence or willful misconduct of Landlord, its employees, agents, contractors or invitees.

b. Defense Obligation. If any such action is brought against Landlord, then Tenant, upon notice from Landlord, shall defend the same through counsel selected by Landlord’s insurer, or other counsel acceptable to Landlord. The provisions of this Section shall survive the termination of this Lease for a period equal to the Tennessee statute of limitations on tort claims, plus six (6) months.

16. QUIET ENJOYMENT. Tenant shall have quiet enjoyment and possession of the Premises provided Tenant promptly and fully complies with all of its obligations under this Lease. No action of Landlord or other tenants working in other space in the Building, or in repairing or restoring the Premises, shall be deemed a breach of this covenant, nor shall such action give to Tenant any right to modify this Lease either as to term, rent payables or other obligations to be performed.

17. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE; AND ESTOPPEL CERTIFICATE.

a. Subordination and Attornment. Landlord represents and warrants to Tenant that the Building and the land on which the Building is located is free and clear of all monetary liens except for that certain lien in favor of: American Security Bank & Trust. Tenant’s obligations under this Lease are conditioned upon Landlord’s lender executing with Tenant a non-disturbance agreement as contemplated by Section 17(b). Tenant agrees that this Lease and all rights of Tenant hereunder are and shall be subject and subordinate to any deed of trust or mortgage hereafter encumbering the Premises or the Building and the real property on which it is situate or any component thereof, to all advances made or hereafter to be made upon the security of such ground or underlying lease or deed of trust or mortgage, to all amendments, modifications, renewals, consolidations, extensions, and restatements of such ground or underlying lease or deed of trust or mortgage, and to any replacements and substitutions for such deed of trust or mortgage. In the event of the exercise of the private power of sale or a judicial foreclosure under any such financing instrument, at the option of the purchaser at such

sale, this Lease shall not terminate and Tenant shall attorn to such purchaser. Tenant agrees that neither such lender nor any such successor-in-interest shall be bound by: (a) any payment of rent or additional rent for more than one (1) month in advance, except prepayments in the nature of security deposits and only if such prepayments have been deposited with and are under the control of said lender; or (b) any amendment or modification of this Lease which would reduce Tenant payments, reduce the term or impose any material additional obligation upon Landlord without the express written consent of said Lender or said successor-in-interest, and if requested to do so, shall enter into a new Lease agreement for the balance of the term hereunder upon the same terms and conditions. Tenant agrees to give to both Landlord and any lender holding a security interest in the Property written notice of any default by Landlord hereunder and a reasonable period (but in any event not less than thirty (30) days) in which to cure such default. Tenant agrees that no amendment or cancellation of this Lease shall be binding upon any such lender without the written approval of such lender. Tenant agrees that no such lender shall be responsible for any liability of Landlord to Tenant for any actions arising prior to such lender’s acquisition of title to the Property. The provisions of the previous sentences of this paragraph shall be self-operative and no further instrument shall be required, However, Tenant agrees to execute within ten (10) days after request to do so from Landlord or its mortgagee an agreement:

i. Making this Lease superior or subordinate to the interests of the mortgagee;

ii. Agreeing to attorn to the mortgagee;

iii. Giving the mortgagee notice of, and a reasonable opportunity (which shall in no event be less than thirty (30) days after notice thereof is delivered to mortgagee) to cure any Landlord default and agreeing to accept such cure if effected by the mortgagee;

iv. Permitting the mortgagee (or other purchaser at any foreclosure sale), and its successors and assigns, on acquiring Landlord’s interest in the Premises and the Lease, to become substitute Landlord hereunder, with liability only for such Landlord obligations as accrue after Landlord’s interest is so acquired;

v. Agreeing to attorn to any successor Landlord; and

vi. Containing such other agreements and covenants on Tenant’s part as Landlord’s mortgagee may reasonably request.

b. Non-Disturbance. Tenant’s obligation to execute a subordination and attornment agreement as set forth above is conditioned upon the mortgagee’s agreement (1) not to disturb Tenant’s possession and quiet enjoyment of the Premises under this Lease so long as Tenant is in compliance with the terms of the Lease; and (ii) that the terms of this Lease shall not be altered or amended as a result of a conveyance of the Building in connection with a foreclosure of the lien held by such mortgagee.

c. Estoppel Certificates. Tenant agrees to execute within 10 business days after request, and as often as requested, estoppel certificates confirming any factual matter requested by Landlord which is true and is within Tenant’s knowledge regarding this Lease, and

the Premises, including but not limited to: (i) the date of occupancy, (ii) Expiration Date, (iii) the amount of Rent due and date to which Rent is paid, (iii) whether Tenant has any defense or offsets to the enforcement of this Lease or the Rent payable, (iv) any default or breach by Landlord, and (v) whether this Lease, together with any modifications or amendments, is in full force and effect. Tenant shall attach to such estoppel certificate copies of any modifications or amendments to the Lease.

18. ASSIGNMENT — SUBLEASE.

a. Landlord Consent. Tenant may not assign or encumber this Lease or its leasehold interest in the Premises arising under this Lease, and may not sublet all or any part of the Premises without first obtaining the written consent of Landlord, which consent Landlord may provide in its sole and absolute discretion.

b. Definition of Assignment. For the purpose of this Section 18, the word “assignment” shall be defined and deemed to include the following: (i) if Tenant is a partnership, the withdrawal or change, whether voluntary, involuntary or by operation of law, of partners owning thirty percent (30%) or more of the partnership, or the dissolution of the partnership; (ii) if Tenant consists of more than one person, an assignment, whether voluntary, involuntary, or by operation of law, by one person to one of the other persons that is a Tenant; (iii) if Tenant is a corporation, any dissolution or reorganization of Tenant, or the sale or other transfer of a controlling percentage (hereafter defined) of capital stock of Tenant other than to an affiliate or subsidiary or the sale of fifty-one percent (51%) in value of the assets of Tenant; (iv) if Tenant is a limited liability company, the change of members whose interest in the company is fifty percent (50%) or more. The phrase “controlling percentage” means the ownership of, and the right to vote, stock possessing at least fifty-one percent (51%) of the total combined voting power of all classes of Tenant’s capital stock issued, outstanding and entitled to vote for the election of directors, or such lesser percentage as is required to provide actual control over the affairs of the corporation; except that, if the Tenant is a publicly traded company, public trades or sales of the Tenant’s stock on a national stock exchange shall not be considered an assignment hereunder even if the aggregate of the trades of sales exceeds fifty percent (50%) of the capital stock of the company.

c. Permitted Assignments/Subleases. Notwithstanding the foregoing, Tenant may assign this Lease or sublease part or all of the Premises without Landlord’s consent to: (i) any corporation, limited liability company, or partnership that controls, is controlled by, or is under common control with, Tenant; or (ii) any corporation or limited liability company resulting from the merger or consolidation with Tenant or to any entity that acquires all of Tenant’s assets as a going concern of the business that is being conducted on the Premises; provided however, the assignor remains liable under the Lease and the assignee or sublessee is a bona fide entity and assumes the obligations of Tenant, is as creditworthy as the Tenant, and continues the same Permitted Use as provided under Section 4.

d. Notice to Landlord. Landlord must be given prior written notice of every assignment, or subletting, and failure to do so shall be a default hereunder.

e. Prohibited Assignments/Subleases. In no event shall this Lease be assignable by operation of any law, and Tenant’s rights hereunder may not become, and shall not be listed by

Tenant as an asset under any bankruptcy, insolvency or reorganization proceedings. Acceptance of Rent by Landlord after any non-permitted assignment or sublease shall not constitute approval thereof by Landlord.

f. Limitation on Rights of Assignee/Sublessee. Any assignment or sublease for which Landlord’s consent is required shall not include the right to exercise any options to renew the Lease Term, expand the Premises, or similar options, unless specifically provided for in the consent.

g. Tenant Not Released. No assignment or sublease shall release Tenant of any of its obligations under this Lease.

h. Landlord’s Right to Collect Sublease Rents upon Tenant Default. If the Premises (or any portion) is sublet and Tenant defaults under its obligations to Landlord, then Landlord is authorized, at its option, to collect all sublease rents directly from the Sublessee. Tenant hereby assigns the right to collect the sublease rents to Landlord in the event of Tenant default. The collection of sublease rents by Landlord shall not relieve Tenant of its obligations under this Lease, nor shall it create a contractual relationship between Sublessee and Landlord or give Sublessee any greater estate or right to the Premises than contained in its Sublease.

i. Excess Rents. If Tenant assigns this Lease or subleases all or part of the Premises at a rental rate that exceeds the rentals paid to Landlord, then any such excess shall be the divided equally between Landlord and Tenant.

j. Landlord’s Fees. Tenant shall pay Landlord an administration fee of $1,000.00 per assignment or sublease transaction for which consent is required and granted by Landlord. An administration fee of $500.00 shall be payable with respect to denied requests, but only after the first denied request. If Landlord assists Tenant in finding an assignee or subtenant, Landlord shall be paid a reasonable fee for such assistance.

k. Unauthorized Assignment or Sublease. Any unauthorized assignment or sublease shall constitute a default under the terms of this Lease.

19. DAMAGES TO PREMISES.

a. Landlord’s Restoration Obligations. If the Building or Premises are damaged by fire or other casualty (“Casualty”), then Landlord shall repair and restore the Premises to substantially the same condition of the Premises immediately prior to such Casualty, subject to the following terms and conditions:

i. The casualty must be insured under Landlord’s insurance policies, and Landlord’s obligation is limited to the extent of the insurance proceeds received by Landlord. Landlord’s duty to repair and restore the Premises shall not begin until receipt of the insurance proceeds.

ii. Landlord’s lender(s) must permit the insurance proceeds to be used for such repair and restoration.

iii. Landlord shall have no obligation to repair and restore Tenant’s trade fixtures, decorations, signs, contents, or any Non-Standard Improvements to the Premises.

b. Termination of Lease by Landlord. Landlord shall have the option of terminating the Lease if: (i) the Premises is rendered wholly untenantable; (ii) the Premises is damaged in whole or in part as a result of a risk which is not covered by Landlord’s insurance policies; (iii) Landlord’s lender does not permit a sufficient amount of the insurance proceeds to be used for restoration purposes; (iv) the Premises is damaged in whole or in part during the last two years of the Term; or (v) the Building containing the Premises is damaged (whether or not the Premises is damaged) to an extent of fifty percent (50%) or more of the fair market value thereof. If Landlord elects to terminate this Lease, then it shall give notice of the cancellation to Tenant within sixty (60) days after the date of the Casualty. Tenant shall vacate and surrender the Premises to Landlord within forty-five (45) days after receipt of the notice of termination.

c. Termination of Lease by Tenant. Not later than thirty (30) days after the date on which a casualty affecting the Premises or the Building occurs, Landlord shall advise Tenant in writing (i) whether Landlord intends to repair such damage or reconstruct such damaged areas and (ii) if Landlord intends to make such repairs, give an estimated completion date for such repairs. In the event Landlord notifies Tenant that (i) Landlord does not intend to repair such damage, or (ii) Landlord estimates the completion date of such repairs to be later than nine (9) months after the date on which such casualty occurs, Tenant shall have the right to terminate this Lease by giving Landlord written notice of such termination not later than thirty (30) days after Tenant’s receipt of Landlord’s written notice. In the event Landlord undertakes to repair the casualty damage but fails to complete such repairs within nine (9) months after the date of the casualty, Tenant shall have the right to terminate this Lease by giving Landlord written notice of such termination not later than thirty (30) days after the expiration of such nine (9) month period. In the event a casualty affecting the Building or the Premises occurs in the last year of the initial Term or the last year of any applicable Renewal Term and such casualty will materially affect Tenant’s occupancy and business and will take more than sixty (60) days from the date of casualty to repair, Tenant shall have the right to terminate this Lease by giving Landlord written notice of such termination not later than thirty (30) days after the date such casualty occurred.

d. Tenant’s Restoration Obligations. Unless this Lease has been terminated, the Lease shall remain in full force and effect, and Tenant shall promptly repair, restore, or replace Tenant’s trade fixtures, decorations, signs, contents, and any Non-Standard Improvements to the Premises. All repair, restoration or replacement shall be at least to the same condition as existed prior to the Casualty. The proceeds of all insurance carried by Tenant on its property shall be held in trust by Tenant for the purposes of such repair, restoration, or replacement.

e. Rent Abatement. If Premises is rendered wholly untenantable by the Casualty, then the Rent payable by Tenant shall be fully abated. If the Premises is only partially damaged, then Tenant shall continue the operation of Tenant’s business in any part not damaged to the extent reasonably practicable from the standpoint of prudent business management, and Rent and other charges shall be abated proportionately to the portion of the Premises rendered untenantable. The abatement shall be from the date of the Casualty until the Premises have

been substantially repaired and restored, or until Tenant’s business operations are restored in the entire Premises, whichever shall first occur.

f. Waiver of Claims. The abatement of the Rent and Tenant’s termination rights set forth above are Tenant’s exclusive remedies against Landlord in the event of a Casualty. Tenant hereby waives all claims against Landlord for any compensation or damage for loss of use of the whole or any part of the Premises and/or for any inconvenience or annoyance occasioned by any Casualty and any resulting damage, destruction, repair, or restoration.

20. EMINENT DOMAIN.

a. Effect on Lease. If all of the Premises are taken under the power of eminent domain (or by conveyance in lieu thereof), then this Lease shall terminate as of the date possession is taken by the condemnor, and Rent shall be adjusted between Landlord and Tenant as of such date. If only a portion of the Premises is taken and Tenant can continue use of the remainder, then this Lease will not terminate, but Rent shall abate in a just and proportionate amount to the loss of use occasioned by the taking.

b. Right to Condemnation Award. Landlord shall be entitled to receive and retain the entire condemnation award for the taking of the Building and Premises. Tenant shall have no right or claim against Landlord for any part of any award received by Landlord for the taking. Tenant shall have no right or claim for any alleged value of the unexpired portion of this Lease, or its leasehold estate, or for costs of removal, relocation, business interruption expense or any other damages arising out of such taking. Tenant, however, shall not be prevented from making a claim against the condemning party (but not against Landlord) for any moving expenses, loss of profits, or taking of Tenant’s personal property (other than its leasehold estate) to which Tenant may be entitled; provided that any such award shall not reduce the amount of the award otherwise payable to Landlord for the taking of the Building and Premises.

21. ENVIRONMENTAL COMPLIANCE .

a. Environmental Laws. The term “ Environmental Laws” shall mean all now existing or hereafter enacted or issued statutes, laws, rules, ordinances, orders, permits and regulations of all state, federal, local and other governmental and regulatory authorities, agencies and bodies applicable to the Premises, pertaining to environmental matters or regulating, prohibiting or otherwise having to do with asbestos and all other toxic, radioactive, or hazardous wastes or materials including, but not limited to, the Federal Clean Air Act, the Federal Water Pollution Control Act, and the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as from time to time amended.

b. Tenant’s Responsibility . Tenant covenants and agrees that it will keep and maintain the Premises at all times in compliance with Environmental Laws. Tenant shall not (either with or without negligence) cause or permit the escape, disposal or release of any biologically active or other hazardous substances, or materials on the Property. Tenant shall not allow the storage or use of such substances or materials in any manner not sanctioned by law or in compliance with the highest standards prevailing in the industry for the storage and use of such substances or materials, nor allow to be brought onto the Property any such materials or substances except to use in the ordinary course of Tenant’s business, and then only after notice is given to

Landlord of the identity of such substances or materials. No such notice shall be required, however, for commercially reasonable amounts of ordinary office supplies and janitorial supplies. Tenant shall execute affidavits, representations and the like, from time to time, at Landlord’s request, concerning Tenant’s best knowledge and belief regarding the presence of hazardous substances or materials on the Premises.

c. Tenant’s Liability . Tenant shall hold Landlord free, harmless, and indemnified from any penalty, fine, claim, demand, liability, cost, or charge whatsoever which Landlord shall incur, or which Landlord would otherwise incur, by reason of Tenant’s failure to comply with this Section 21 including, but not limited to: (i) the cost of full remediation of any contamination to bring the Property into the same condition as prior to the Commencement Date and into full compliance with all Environmental Laws; (ii) the reasonable cost of all appropriate tests and examinations of the Premises to confirm that the Premises and any other contaminated areas have been remediated and brought into compliance with all Environmental Laws; and (iii) the reasonable fees and expenses of Landlord’s attorneys, engineers, and consultants incurred by Landlord in enforcing and confirming compliance with this Section 21.

d. Limitation on Tenant’s Liability. Tenant’s obligations under this Section 21 shall not apply to any condition or matter constituting a violation of any Environmental Laws: (i) which existed prior to the Commencement Date; (ii) which was not caused, in whole or in part, by Tenant or Tenant’s agents, employees, officers, partners, contractors or invitees; or (iii) to the extent such violation is caused by, or results from the acts or neglects of Landlord or Landlord’s agents, employees, officers, partners, contractors, guests, or invitees.

e. Inspections by Landlord . Landlord and its engineers, technicians, and consultants (collectively the “Auditors”) may, from time to time as Landlord deems appropriate, conduct periodic tests and examinations (“Audits”) of the Premises to confirm and monitor Tenant’s compliance with this Section 21. Such Audits shall be conducted in such a manner as to minimize the interference with Tenant’s Permitted Use; however in all cases, the Audits shall be of such nature and scope as shall be reasonably required by then existing technology to confirm Tenant’s compliance with this Section 21. Tenant shall fully cooperate with Landlord and its Auditors in the conduct of such Audits. The cost of such Audits shall be paid by Landlord unless an Audit shall disclose a material failure of Tenant to comply with this Section 21, in which case, the cost of such Audit, and the cost of all subsequent Audits made during the Term and within thirty (30) days thereafter (not to exceed two (2) such Audits per calendar year), shall be paid for on demand by Tenant.

f. Landlord’s Liability . Landlord represents and warrants that, to Landlord’s actual knowledge, there are no hazardous materials on the Property as of the Commencement Date in violation of any Environmental Laws. Landlord shall indemnify and hold Tenant harmless from any liability resulting from Landlord’s violation of this representation and warranty.

g. Property. For the purposes of this Section 21, the term “Property” shall include the Premises, Building, all Common Areas, the real estate upon which the Building is located; all personal property (including that owned by Tenant); and the soil, ground water, and surface water of the real estate upon which the Building is located.

h. Tenant’s Liability After Termination of Lease . The covenants contained in this Section 21 shall survive the expiration or termination of this Lease, and shall continue for so long as Landlord and its successors and assigns may be subject to any expense, liability, charge, penalty, or obligation against which Tenant has agreed to indemnify Landlord under this Section 21.

22. DEFAULT.

a. Tenant’s Default. Tenant shall be in default under this Lease if:

i. Tenant fails to pay when due any Base Rent, Additional Rent, or any other sum of money which Tenant is obligated to pay, as provided in this Lease and such failure shall continue 10 days after written notice of non-payment from Landlord provided that Landlord shall not be obligated to give such notice more than twice in any twelve (12) month period;

ii. Tenant breaches any other agreement, covenant or obligation in this Lease and such breach is not remedied within 15 days after Landlord gives Tenant notice specifying the breach, or if such breach cannot, with due diligence, be cured within 15 days, Tenant does not commence curing within 15 days and with reasonable diligence completely cure the breach within a reasonable period of time after the notice;

iii. Tenant or any guarantor of this Lease files any petition or action for relief under any creditor’s law (including bankruptcy, reorganization, or similar action), either in state or federal court, or has such a petition or action filed against it which is not stayed or vacated within sixty (60) days after filing;

iv. Tenant or any guarantor of this Lease makes any transfer in fraud of creditors as defined in Section 548 of the United States Bankruptcy Code (11 U.S.C. 548, as amended or replaced), has a receiver appointed for its assets (and the appointment is not stayed or vacated within thirty (30) days), or makes an assignment for benefit of creditors;

v. Tenant shall fail to cease any conduct prohibited by this Lease within three (3) days after receipt of written notice from Landlord requesting cessation thereof, or Tenant shall fail to cease any conduct or eliminate any condition which poses a danger to person or property within twenty-four (24) hours of receipt of written notice from Landlord requesting cessation of such conduct or elimination of such conditions;

vi. Tenant shall do or permit to be done anything which creates a lien upon the Premises or the Building and the real property on which it is situate or any component thereof and such lien is not removed or discharged within twenty (20) days after the filing thereof; or

vii. Tenant shall fail to return a properly executed subordination, non-disturbance and attornment agreement or an estoppel certificate in accordance with the

terms and provisions of this Lease and within the time period provided for such return following Landlord’s request for same as provided in this Lease, and Tenant fails to provide such instrument within ten (10) days after Tenant has notice that Tenant has failed to provide such instrument within the time periods set forth herein (such notice by Landlord not to be delivered prior to the time such instrument was due from Tenant).

b. Landlord’s Remedies. In the event of a Tenant default, Landlord at its option may do one or more of the following:

(i) terminate this Lease, in which event Tenant shall immediately surrender the Premises to Landlord and if Tenant fails to do so, Landlord may, without further notice and without prejudice to any other remedy Landlord may have for possession or arrearages in Base Rent and/or Additional Rent, enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying said Premises or any part thereof, and its and their effects, without being liable for prosecution or any claim of damages therefor; Tenant hereby agreeing to pay to Landlord within ten (10) days after demand the amount of all loss and damage which Landlord may suffer by reason of such termination, whether through inability to relet the Premises on satisfactory terms or otherwise;

(ii) terminate Tenant’s right of possession, without terminating this Lease, and enter upon and take possession of the Premises as Tenant’s agent and expel or remove Tenant and any other person who may be occupying said Premises or any part thereof, and its and their effects, by entry, dispossessory suit or otherwise, without thereby releasing Tenant from any liability hereunder, without terminating this Lease, and without being liable for prosecution or any claim of damages therefor and, if Landlord so elects, make such alterations, redecorations and repairs as, in Landlord’s judgment, may be necessary to relet the Premises, and Landlord may, but shall be under no obligation to do so, relet the Premises or any portion thereof in Landlord’s or Tenant’s name, but for the account of Tenant, for such term or terms (which may be for a term extending beyond the Lease Term) and at such rental or rentals and upon such other terms as Landlord may deem advisable, with or without advertisement, and by private negotiations, and receive the rent therefor, Tenant hereby agreeing to pay to Landlord the deficiency, if any, between all Base Rent and Additional Rent reserved hereunder and the total rental applicable to the Lease Term hereof obtained by Landlord upon re-letting, and Tenant shall be liable for Landlord’s damages and expenses in redecorating and restoring the Premises and all costs incident to such re-letting, including broker’s commissions, tenant improvements, attorneys’ fees and lease assumptions. In no event shall Tenant be entitled to any rentals received by Landlord in excess of the amounts due by Tenant hereunder. Any such demand, reentry and taking of possession of the Premises by Landlord shall not of itself constitute an acceptance by Landlord of a surrender of the Lease or of the Premises by Tenant and shall not of itself constitute a termination of this Lease by Landlord. Landlord’s failure to relet the Premises or to make such alterations, redecorations and repairs as set forth in this paragraph shall not release or affect Tenant’s liability for Base Rent and Additional Rent or for damages; or

(iii) enter upon the Premises, and do whatever Tenant is obligated to do under the terms of this Lease; and Tenant agrees to reimburse Landlord on demand for any expenses including, without limitation, reasonable attorneys’ fees which Landlord may incur in thus effecting compliance with Tenant’s obligations under this Lease and Tenant further agrees that Landlord shall not be liable for any damages resulting to Tenant from such action.

If this Lease is terminated by Landlord as a result of the occurrence of a Tenant default, Landlord may declare to be due and payable immediately, the present value (calculated with a discount factor of eight percent [8%] per annum) of the difference between (x) the entire amount of Base Rent and Additional Rent and other charges and assessments which in Landlord’s reasonable determination would become due and payable during the remainder of the Lease Term determined as though this Lease had not been terminated (including, but not limited to, increases in Base Rent pursuant to the terms of this Lease), and (y) the then fair market rental value of the Premises for the remainder of the Lease Term. Upon the acceleration of such amounts, Tenant agrees to pay the same at once, together with all Base Rent and Additional Rent and other charges and assessments then due, it being agreed that such payment shall not constitute a penalty or forfeiture but shall constitute liquidated damages for Tenant’s failure to comply with the terms of this Lease (Landlord and Tenant agreeing that Landlord’s actual damages in such event are impossible to ascertain and that the amount set forth above is a reasonable estimate thereof).

Pursuit of any of the foregoing remedies shall not preclude pursuit of any other remedy herein provided or any other remedy provided by law or at equity, nor shall pursuit of any remedy herein provided constitute an election of remedies thereby excluding the later election of an alternate remedy, or a forfeiture or waiver of any Base Rent and/or Additional Rent or other charges and assessments payable by Tenant and due to Landlord hereunder or of any damages accruing to Landlord by reason of violation of any of the terms, covenants, warranties and provisions herein contained. No reentry or taking possession of the Premises by Landlord or any other action taken by or on behalf of Landlord shall be construed to be an acceptance of a surrender of this Lease or an election by Landlord to terminate this Lease unless written notice of such intention is given to Tenant. Forbearance by Landlord to enforce one or more of the remedies herein provided upon an event of default shall not be deemed or construed to constitute a waiver of such default. In determining the amount of loss or damage Landlord may suffer by reason of termination of this Lease or the deficiency arising by reason of any reletting of the Premises by Landlord, allowance shall be made for the expense of repossession. Tenant agrees to pay to Landlord all costs and expenses incurred by Landlord in the enforcement of this Lease.

Upon the occurrence of a Tenant default, Tenant shall pay to Landlord all costs incurred by Landlord (including court costs and reasonable attorneys’ fees and expenses) in (i) obtaining possession of the Premises, (ii) removing and storing Tenant’s or any other occupant’s property, (iii) repairing, restoring, renovating, altering, remodeling, or otherwise putting the Premises into condition acceptable to a new tenant, (iv) if Tenant is dispossessed of, or vacates or abandons, the Premises and this Lease is not terminated, reletting all or any part of the Demised Premises (including, but not limited

to, brokerage commissions, cost of tenant finish work, advertising and promotional expenses, and other costs incidental to such reletting), (v) performing Tenant’s obligations which Tenant failed to perform, and (vi) enforcing its rights and remedies arising out of a Tenant default. Landlord’s rights and remedies under this paragraph shall be in addition to the rights and remedies of Landlord set forth in this Section 22(b) or elsewhere in this Lease, and/or which may otherwise be available to Landlord at law or in equity.

Unless mitigation of a lease default is required under Tennessee law, Landlord shall not have a duty to mitigate damages in the event of a Tenant default. Notwithstanding the foregoing, Landlord will in good faith, but in its sole discretion, evaluate replacement tenants produced by Tenant after Tenant’s default hereunder.

c. Attorneys Fees. Landlord’s reasonable attorneys’ fees in pursuing any of the foregoing remedies, or in collecting any Rent or Additional Rent due by Tenant hereunder, shall be paid by Tenant.

d. No Accord and Satisfaction. No acceptance by Landlord of a lesser sum than the Rent, Additional Rent and other sums then due shall be deemed to be other than on account of the earliest installment of such payments due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment be deemed as accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such installment or pursue any other remedy provided in this Lease.

e. No Reinstatement. No payment of money by Tenant to Landlord after the expiration or termination of this Lease shall reinstate or extend the Term, or make ineffective any notice of termination given to Tenant prior to the payment of such money. After the service of notice or the commencement of a suit, or after final judgment granting Landlord possession of the Premises, Landlord may receive and collect any sums due under this Lease, and the payment thereof shall not make ineffective any notice or in any manner affect any pending suit or any judgment previously obtained.

f. Summary Ejectment. Tenant agrees that in addition to all other rights and remedies Landlord may obtain an order for summary ejectment from any court of competent jurisdiction without prejudice to Landlord’s rights to otherwise collect rents or breach of contract damages from Tenant.

g. Landlord Default . In the event of a default by Landlord under this Lease, Tenant shall be entitled to pursue any and all remedies available under applicable laws provided that in no event shall Tenant be entitled to terminate this Lease except for matters constituting a constructive eviction.

23. MULTIPLE DEFAULTS.

a. Effect on Notice Rights and Cure Periods. Should Tenant default under this Lease on two (2) or more occasions during any twelve (12) month period, in addition to all other remedies

available to Landlord, any notice requirements or cure periods otherwise set forth in this Lease with respect to a default by Tenant shall not apply.

24. BANKRUPTCY .

a. Trustee’s Rights. Landlord and Tenant understand that, notwithstanding contrary terms in this Lease, a trustee or debtor in possession under the United States Bankruptcy Code, as amended, (the “Code”) may have certain rights to assume or assign this Lease. This Lease shall not be construed to give the trustee or debtor in possession any rights greater than the minimum rights granted under the Code.

b. Adequate Assurance. Landlord and Tenant acknowledge that, pursuant to the Code, Landlord is entitled to adequate assurances of future performance of the provisions of this Lease. The parties agree that the term “adequate assurance” shall include at least the following:

i. In order to assure Landlord that any proposed assignee will have the resources with which to pay all Rent payable pursuant to the provisions of this Lease, any proposed assignee must have, as demonstrated to Landlord’s satisfaction, a net worth (as defined in accordance with generally accepted accounting principles consistently applied) of not less than the net worth of Tenant on the Effective Date (as hereinafter defined), increased by seven percent (7%), compounded annually, for each year from the Effective Date through the date of the proposed assignment. It is understood and agreed that the financial condition and resources of Tenant were a material inducement to Landlord in entering into this Lease.

ii. Any proposed assignee must have been engaged in the conduct of business for the five (5) years prior to any such proposed assignment, which business does not violate the Use provisions under Section 4 above, and such proposed assignee shall continue to engage in the Permitted Use under Section 4. It is understood that Landlord’s asset will be substantially impaired if the trustee in bankruptcy or any assignee of this Lease makes any use of the Premises other than the Permitted Use.

c. Assumption of Lease Obligations. Any proposed assignee of this Lease must assume and agree to be personally bound by the provisions of this Lease.

25. NOTICES .

a. Addresses. All notices, demands and requests by Landlord or Tenant shall be sent to the Notice Addresses set forth in Section 1l, or to such other address as a party may specify by duly given notice.

b. Form; Delivery; Receipt. ALL NOTICES, DEMANDS AND REQUESTS WHICH MAY BE GIVEN OR WHICH ARE REQUIRED TO BE GIVEN BY EITHER PARTY TO THE OTHER MUST BE IN WRITING UNLESS OTHERWISE SPECIFIED. Notices, demands or requests shall be deemed to have been properly given for all purposes if (i) delivered against a

written receipt of delivery, (ii) mailed by express, registered or certified mail of the United States Postal Service, return receipt requested, postage prepaid, or (iii) delivered to a nationally recognized overnight courier service for next business day delivery to the receiving party’s address as set forth above or (iv) delivered via telecopier or facsimile transmission to the facsimile number listed above, with an original counterpart of such communication sent concurrently as specified in subsection (ii) or (iii) above and with written confirmation of receipt of transmission provided. Each such notice, demand or request shall be deemed to have been received upon the earlier of the actual receipt or refusal by the addressee or three (3) business days after deposit thereof at any main or branch United States post office if sent in accordance with subsection (ii) above, and the next business day after deposit thereof with the courier if sent pursuant to subsection (iii) above.

c. Address Changes. The parties shall notify the other of any change in address, which notification must be at least fifteen (15) days in advance of it being effective.

26. HOLDING OVER . If Tenant holds over after the Expiration Date or other termination of this Lease, such holding over shall not be a renewal of this Lease but shall create a tenancy-at-sufferance. Tenant shall continue to be bound by all of the terms and conditions of this Lease, except that during such tenancy-at-sufferance Tenant shall pay to Landlord (i) Base Rent at the rate equal to one hundred fifty percent (150%) of that provided for as of the expiration or termination date, and (ii) any and all Operating Expenses and other forms of Additional Rent payable under this Lease. The increased Rent during such holding over is intended to compensate Landlord partially for losses, damages and expenses, including frustrating and delaying Landlord’s ability to secure a replacement tenant. If Landlord loses a tenant under an executed lease because Tenant fails to vacate the Premises on the Expiration Date or any termination of the Lease after notice to do so, then Tenant will be liable for such damages as Landlord can prove because of Tenant’s wrongful failure to vacate.

27. Reserved .

28. BROKER’S COMMISSIONS .

a. Broker. Each party represents and warrants to the other that it has not dealt with any real estate broker, finder or other person with respect to this Lease in any manner, except the Broker identified in Section 1m.

b. Landlord’s Obligation. Landlord shall pay any commissions or fees that are payable to the Broker with respect to this Lease pursuant to Landlord’s separate agreement with the Broker.

c. Indemnity. Each party shall indemnify and hold the other party harmless from any and all damages resulting from claims that may be asserted against the other party by any other broker, finder or other person (including, without limitation, any substitute or replacement broker claiming to have been engaged by indemnifying party in the future), claiming to have dealt with the indemnifying party in connection with this Lease or any amendment or extension hereto, or

which may result in Tenant leasing other or enlarged space from Landlord. The provisions of this Section shall survive the termination of this Lease.

29. MISCELLANEOUS .

a. No Agency. Tenant is not, may not become, and shall never represent itself to be an agent of Landlord, and Tenant acknowledges that Landlord’s title to the Building is paramount, and that it can do nothing to affect or impair Landlord’s title.

b. Force Majeure. The term “ force majeure ” means: fire, flood, extreme weather, labor disputes, strike, lock-out, riot, government interference (including regulation, appropriation or rationing), unusual delay in governmental permitting, unusual delay in deliveries or unavailability of materials, unavoidable casualties, Act of God, or other causes beyond the Landlord’s reasonable control.

c. Building Standard Improvements. The term “Building Standard Improvements” shall mean the standards for normal construction of general office space within the Building as specified by Landlord, including design and construction standards, electrical load factors, materials, fixtures and finishes.

d. Limitation on Damages. Notwithstanding any other provisions in this Lease, Landlord shall not be liable to Tenant for any special, consequential, incidental or punitive damages.

e. Satisfaction of Judgments Against Landlord. If Landlord, or its employees, officers, directors, stockholders or partners are ordered to pay Tenant a money judgment because of Landlord’s default under this Lease, said money judgment may only be enforced against and satisfied out of: (i) Landlord’s interest in the Building in which the Premises are located including the rental income and proceeds from sale; and (ii) any insurance or condemnation proceeds received because of damage or condemnation to, or of, said Building that are available for use by Landlord. No other assets of Landlord or said other parties exculpated by the preceding sentence shall be liable for, or subject to, any such money judgment.

f. Interest. Should Tenant fail to pay any amount due to Landlord by the date such amount is due (whether Base Rent, Additional Rent, or any other payment obligation), then the amount due shall begin accruing interest at the rate of 18% per annum, compounded monthly, or the highest permissible rate under applicable usury law, whichever is less, until paid.

g. Legal Costs. In the event legal proceedings are instituted by either party to enforce the terms of this Lease, the prevailing party in such litigation shall be entitled to reimbursement of all its costs and expenses of such party, including its reasonable attorneys’ fees (at all tribunal levels) in prosecuting such litigation.

h. Sale of Premises or Building. Landlord may sell the Premises or the Building without affecting the obligations of Tenant hereunder; upon the sale of the Premises or the Building, Landlord shall be relieved of all responsibility for the Premises and shall be released from any liability thereafter accruing under this Lease.

i. Time of the Essence. Time is of the essence in the performance of all obligations under the terms of this Lease.

j. Transfer of Security Deposit. Intentionally deleted.

k. Tender of Premises. The delivery of a key or other such tender of possession of the Premises to Landlord or to an employee of Landlord shall not operate as a termination of this Lease or a surrender of the Premises unless requested in writing by Landlord.

l. Tenant’s Financial Statements. Upon request of Landlord, Tenant agrees to furnish to Landlord copies of Tenant’s most recent annual, quarterly and monthly financial statements, audited if available. The financial statements shall be prepared in accordance with generally accepted accounting principles, consistently applied. The financial statements shall include a balance sheet and a statement of profit and loss, and the annual financial statement shall also include a statement of changes in financial position and appropriate explanatory notes. Landlord may deliver the financial statements to any prospective or existing mortgagee or purchaser of the Building. Notwithstanding the foregoing, for so long as Tenant is a reporting company under the Securities Exchange Act of 1934, as amended, Landlord agrees to accept Tenant’s filed reports and in the event Tenant is no longer reporting, Landlord agrees to accept internally prepared management reports if the reports set forth above are not available.

m. Recordation. This Lease may not be recorded without Landlord’s prior written consent; provided, however, Landlord agrees to allow Tenant to record a memorandum of the Lease.

n. Severability. If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future laws, the remainder of this Lease shall not be affected thereby, and in lieu of each clause or provision of this Lease which is illegal, invalid or unenforceable, there shall be added as a part of this Lease a clause or provision as nearly identical to the said clause or provision as may be legal, valid and enforceable.

o. Binding Effect. This Lease shall be binding upon the respective parties hereto, and upon their heirs, executors, successors and assigns.

p. Entire Agreement. This Lease supersedes and cancels all prior negotiations between the parties, and no changes shall be effective unless in writing signed by both parties. Tenant acknowledges and agrees that it has not relied upon any statements, representations, agreements or warranties except those expressed in this Lease, and that this Lease contains the entire agreement of the parties hereto with respect to the subject matter hereof.

q. Good Standing. If requested by Landlord, Tenant shall furnish appropriate legal documentation evidencing the valid existence in good standing of Tenant, and the authority of any person signing this Lease to act for the Tenant. If Tenant signs as a corporation, each of the persons executing this Lease on behalf of Tenant does hereby covenant and warrant that Tenant is a duly authorized and existing corporation, that Tenant has and is qualified to do business in the State in which the Premises are located, that the corporation has a full right and authority to enter into this Lease and that each of the persons signing on behalf of the corporation is authorized to do so.

r. Terminology. The singular shall include the plural, and the masculine, feminine or neuter includes the other.

s. Headings. Headings of sections are for convenience only and shall not be considered in construing the meaning of the contents of such section.

t. Choice of Law. This Lease shall be interpreted and enforced in accordance with the laws of the State in which the Premises are located.

u. Effective Date. The submission of this Lease to Tenant for review does not constitute a reservation of or option for the Premises, and this Lease shall become effective as a contract only upon the execution and delivery by both Landlord and Tenant. The date of execution shall be entered on the top of the first page of this Lease by Landlord, and shall be the date on which the last party signed the Lease, or as otherwise may be specifically agreed by both parties. Such date, once inserted, shall be established as the final day of ratification by all parties to this Lease, and shall be the date for use throughout this Lease as the “Effective Date”.

v. Landlord’s Lien . In addition to any statutory lien for rent in Landlord’s favor, Landlord shall have and Tenant hereby grants to Landlord a continuing security interest for all rentals and other sums of money becoming due hereunder from Tenant, upon all goods, wares, equipment, fixtures, furniture, inventory, client files, accounts, contract rights, chattel paper and other personal property of Tenant situated on the Premises, and such property shall not be removed therefrom without the consent of Landlord until all arrearages in Base Rent and Additional Rent as well as any and all other sums of money then due to Landlord hereunder all first have been paid and discharged. In the event of a default under this Lease, Landlord shall have, in addition to any other remedies provided herein or by law, all rights and remedies under Uniform Commercial Code, including, private sale upon five (5) days notice to Tenant. Tenant hereby agrees that Landlord shall be entitled to prepare and file such financial statements and other instruments necessary or desirable in Landlord’s discretion to perfect the security interest hereby created. Any statutory lien for rent is not hereby waived, the express contractual lien herein granted being in addition and supplementary thereto. Notwithstanding the foregoing, Landlord’s lien hereunder shall be automatically subordinate to any third party institutional financing which requires a security interest in such personalty.

w. Joint and Several . If Tenant comprises more than one person, corporation, partnership or other entity, the liability hereunder of all such persons, corporations, partnerships or other entities shall be joint and several.

x. No Construction Against Preparer . No provision of this Lease shall be construed against or interpreted to the disadvantage of any party by any court or other governmental or judicial authority by reason of such party’s having or being deemed to have prepared or imposed such provision.

y. Right of First Refusal . If at anytime during the Lease Term, Landlord receives a bona fide offer from any third party for the lease of any space in the Building (hereinafter referred to as the “Refusal Space”) which Landlord desires to accept, then in such event Landlord shall promptly deliver to Tenant, a written notice setting forth the material terms and

conditions of the proposed lease (for example as set forth in a letter of intent) and if available (but not required), a copy of the proposed lease agreement. Tenant agrees that all information contained in the offer or the proposed lease (including the identity of the proposed lessee) shall be maintained in the strictest confidence and shall not be disclosed to any person or entity other than Tenant’s affiliates, employees, attorneys and accountants (each of whom shall be obligated to maintain the confidentiality of such information); provided however, Tenant may disclose such confidential information to other parties or entities if required by subpoena, court order or applicable law. Tenant may, within fifteen (15) days after receipt of such notice, elect to lease such portion of the Refusal Space which is subject to any offer as described above (which portion is hereinafter called the “Offer Space”), on the same terms and conditions as those set forth in such notice or proposed lease. The failure of Tenant to exercise this right of first refusal with respect to any proposed lease shall result in a waiver of Tenant’s right of first refusal as to only the Offer Space and as to a lease of the Offer Space to the proposed lessee identified in Landlord’s written notice or any other lessee on the same terms and conditions within the next 180 days. Tenant’s right of first refusal shall continue to apply to the remainder of the Refusal Space and shall again apply to any subsequent lease of the Offer Space after the expiration or earlier termination of the lease of the Offer Space. In the event that any proposed lease as to which Tenant did not exercise its right of first refusal, is not executed by Landlord within one hundred eighty (180) days after notice thereof was given to Tenant then the Offer Space must be re-offered to Tenant in the same manner provided above and Tenant shall have fifteen (15) days from receipt of Landlord’s notification within which to exercise the right of first refusal. In the event Tenant fails to exercise its first right of refusal as to the Offer Space, at Landlord’s request, Tenant shall execute a written acknowledgment prepared by Landlord certifying that Tenant has elected not to exercise its right of first refusal. Tenant shall not have the right to assign its right of first refusal to any permitted sublessee of the Premises. Notwithstanding anything to the contrary herein, the right of first refusal to lease granted to Tenant shall automatically terminate upon the expiration or earlier termination of this Lease.

30. SPECIAL CONDITIONS. The following special conditions, if any, shall apply, and where in conflict with earlier provisions in this Lease shall control:

a. Landlord agrees that (i) Tenant shall be permitted to install an emergency power generator serving the Premises at Tenant’s sole cost; and (ii) Landlord shall cooperate with Tenant in agreeing on a location outside the Building for placement of such generator. Notwithstanding anything to the contrary in this Lease, upon the expiration or earlier termination of this Lease, Tenant shall have the right and obligation to remove, at its sole cost, the emergency generator and any panels and switchgear fuel supply and other materials associated with the emergency generator. The generator shall only be gas powered and Tenant shall indemnify and hold Landlord harmless from any loss cost, damage, claim or liability, including attorneys’ fees, arising out of the generator or appurtenances thereto.

31. ADDENDA AND EXHIBITS. If any addenda are noted below, such addenda are incorporated herein and made a part of this Lease.

a. Lease Addendum Number One — Workletter

b. Lease Addendum Number Two — Operating Expense Pass Throughs

c. Exhibit A — Premises

d. Exhibit B — Rules and Regulations

e. Exhibit C — Commencement Agreement

f. Exhibit D — Insurance Certificate

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY

SIGNATURE BLOCKS ON NEXT PAGE]

IN WITNESS WHEREOF, Landlord and Tenant have executed this lease in four originals, all as of the day and year first above written.

TENANT:

OMNICELL, INC., a Delaware corporation


By:

Randall Lipps — CEO Omnicell, Inc.

By:

Rob Seim — CFO Omnicell, Inc.

By:

Pat Clements — Corporate Controller Omnicell, Inc.

Affix Corporate Seal:

ACKNOWLEDGMENT

STATE OF			(Corporation)
COUNTY OF

I, the undersigned Notary Public, certify that personally came before me this day and acknowledged that he is of ., a , and that by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by , as its , and sealed with its common corporate seal.

WITNESS my hand and notarial seal, this day of , 2010.

Notary Public:
Name:
My Commission Expires:

(SIGNATURES CONTINUE ON FOLLOWING PAGE)

LANDLORD:

POINT PLACE II, LLC

a limited liability company

By:
Name:
Title:

[Company Seal]

ACKNOWLEDGMENT

STATE OF			(Corporation)
COUNTY OF

I, the undersigned Notary Public, certify that personally came before me this day and acknowledged that he is of Point Place, LLC , a limited liability company, and that by authority duly given and as the act of the company, the foregoing instrument was signed in its name by , as its , and sealed with its common seal.

WITNESS my hand and notarial seal, this day of , 2010.

Notary Public:
Name:
My Commission Expires:

LEASE ADDENDUM NUMBER ONE

WORKLETTER. This Lease Addendum Number One (the “First Addendum”) sets forth the rights and obligations of Landlord and Tenant with respect to space planning, engineering, final workshop drawings, and the construction and installation of any improvements to the Premises to be completed before the Commencement Date (“Tenant Improvements”).

In consideration of the mutual covenants hereinafter contained, Landlord and Tenant do mutually agree to the following:

1. Space Planning, Design and Working Drawings. Landlord and Tenant have agreed on (a) the space plan, (b) complete construction drawings for Tenant’s partition layout, reflected ceiling grid, telephone and electrical outlets, keying, and finish schedule, and (c) complete building standard mechanical plans where necessary (for installation of air conditioning system and duct work, and heating and electrical facilities) for the work to be done in the Premises (hereinafter the “Plans”; and the work described in the Plans being hereinafter referred to as the “Tenant Improvements). The Plans are more particularly described in Schedule 1 to this First Addendum. Should Tenant request changes to the approved Plans described in Schedule 1 to this First Addendum, Tenant shall be responsible to pay for the cost of the revised plans relating to such changes. If such changes result in an increase in the costs of completing the Tenant Improvements, Tenant shall pay for the amount of such increase.

2. Tenant Improvements. Landlord agrees, at its sole cost and expense, to design, engineer, permit, install, supply and otherwise to construct the Tenant Improvements in the Premises in accordance with the Plans. Landlord shall contract with a general contractor or contractors of Landlord’s choice for the installation of the Tenant Improvements (the “Contractor”). Tenant agrees that the Contractor may be an affiliate of Landlord.

3. Signage and Keying. Door and/or directory signage and suite keying in accordance with building standards shall be provided and installed by the Landlord.

4. Commencement Date.

a. The Commencement Date shall be as defined in Section 1(b).

b. Notwithstanding the foregoing, if Landlord shall be delayed in delivering possession of the Premises as a result of:

i. Tenant’s changes to approved Plans (notwithstanding Landlord’s approval of any such changes); or

ii. Any other act or omission by Tenant or its agents, representatives, and/or employees;

then, in any such event, for purposes of determining the Commencement Date, the Premises shall be deemed to have been delivered to Tenant on the date that Landlord and architect determine that the Premises would have been substantially completed and

ready for delivery if such delay or delays had not occurred; provided, however, that the Commencement Date shall not occur prior to July 1, 2010.

5. Materials and Workmanship. Landlord covenants and agrees that all work performed in connection with the construction of the Premises shall be performed in a good and workmanlike manner and in accordance with all applicable laws and regulations and with the final approved Plans. Landlord agrees to exercise due diligence in completing the construction of the Premises.

6. Repairs and Corrections. Landlord shall select a Contractor who will provide a one-year warranty from the date of delivery of the Premises, transferable to Tenant, for defective workmanship and materials. If with Tenant’s agreement, used equipment is installed as part of the Work, the used equipment shall be installed “as is” and without any warranties. Landlord shall transfer to Tenant all manufacturers’ and builders’ warranties with respect to the Work, without recourse to the Landlord. Tenant shall repair or correct any defective work or materials installed by Tenant or any contractor other than Landlord’s Contractor, or any work or materials that prove defective as a result of any act or omission of Tenant or any of its employees, agents, invitees, licensees, subtenants, customers, clients, or guests.

7. Inspection of Premises; Possession by Tenant. Within the first 30 days of the Term, Tenant and Landlord shall inspect the Premises and Tenant shall give Landlord notice of any defects or incomplete work (“Punchlist”). Tenant’s possession of the Premises constitutes acknowledgment by Tenant that the Premises are in good condition and that all work and materials provided by Landlord are satisfactory as of such date of occupancy, except as to (i) any defects or incomplete work set forth in the Punchlist, (ii) latent defects, and (iii) any equipment that is used seasonally if Tenant takes possession of the Premises during a season when such equipment is not in use.

8. Access During Construction. During construction of the Tenant Improvements and with prior approval of Landlord, Tenant shall be permitted reasonable access to the Premises for the purposes of taking measurements, making plans, installing trade fixtures, and doing such other work as may be appropriate or desirable to enable Tenant to assume possession of and operate in the Premises; provided, however, that such access does not interfere with or delay construction work on the Premises and does not include moving furniture or similar items into the Premises. Prior to any such entry, Tenant shall comply with all insurance provisions of the Lease. All waiver and indemnity provisions of the Lease shall apply upon Tenant’s entry of the Premises.

9. Building Standard Improvements. In addition to the Tenant Improvements, Landlord agrees to make the following Building-standard Improvements at its own cost and expense: (a) install connection apparatus to allow the Premises to connect to fiber-optic conduits in the right-of-way adjacent to the Premises (Landlord to makes no representation or warranty with regard to bandwidth or capacity, and Tenant to have no right to terminate Lease in the event capacity is inadequate); (b) install an electronic access control security system for the Premises (Landlord to have all codes necessary to gain entry), and (c) Landlord shall install a fire suppression sprinkler system pursuant to the specifications approved by Landlord and Tenant.

SCHEDULE 1

LEASE ADDENDUM NUMBER ONE

Description of Plans for Tenant Improvements

[to be provided by Landlord]

LEASE ADDENDUM NUMBER TWO [BASE YEAR]

ADDITIONAL RENT - OPERATING EXPENSE PASS THROUGHS. For the calendar year commencing on January 1, 2011 and for each calendar year thereafter, Tenant shall pay to Landlord, as Additional Rent, Tenant’s Proportionate Share of any increase in Operating Expenses (as hereinafter defined) incurred by Landlord’s operation or maintenance of the Building above the Base Year Expense Stop (as hereinafter defined).

Tenant’s Proportionate Share shall be calculated by dividing the approximately 24,801 rentable square feet of the Premises by the approximately 46,622 net rentable square feet of the Building, which equals 49.6%. If during any calendar year the occupancy of the rentable area of the Building is less than 95% full, then Operating Expenses (as hereinafter defined) will be adjusted upward for such calendar year at a rate of 95% occupancy.

For the calendar year commencing on January 1, 2011 and for each calendar year thereafter during the Term, Landlord shall estimate the amount the Operating Expenses shall increase for such calendar year above the Base Year Expense Stop. Landlord shall send to Tenant a written statement of the amount of Tenant’s Proportionate Share of any estimated increase in Operating Expenses and Tenant shall pay to Landlord, monthly, Tenant’s Proportionate Share of such increase in Operating Expenses. Within 90 days after the end of each calendar year or as soon as possible thereafter, Landlord shall send a copy of the Annual Statement to Tenant. Pursuant to the Annual Statement, Tenant shall pay to Landlord Additional Rent as owed or Landlord shall adjust Tenant’s Rent payments if Landlord owes Tenant a credit. After the Expiration Date, Landlord shall send Tenant the final Annual Statement for the Term, and Tenant shall pay to Landlord Additional Rent as owed or if Landlord owes Tenant a credit, then Landlord shall pay Tenant a refund. If there is a decrease in Operating Expenses in any subsequent year below the Base Year Expense Stop, then no additional rent shall be due on account of Operating Expenses, but Tenant shall not be entitled to any credit, refund or other payment that would reduce the amount of other additional rent or Base Rent owed. If this Lease expires or terminates on a day other than December 31, then Additional Rent shall be prorated on a 365-day calendar year (or 366 if a leap year). All payments or adjustments for Additional Rent shall be made within thirty (30) days after the applicable Statement is sent to Tenant.

The term “Base Year Expense Stop” shall mean $3.73 per rentable square foot of space in the Building.

The term “Operating Expenses” shall mean all direct costs incurred by Landlord in the provision of services to tenants and in the operation, repair and maintenance of the Building and Common Areas as determined by generally accepted accounting principles, including, but not limited to ad valorem real and personal property taxes (excluding any excise and franchise taxes applicable to the Premises), amortization of capital improvements that reduce Operating Expenses, hazard and liability insurance premiums, utilities, heat, air conditioning, janitorial service, labor, materials, supplies, equipment and tools, permits, licenses, inspection fees, management fees, and common area expenses; provided, however, the term “Operating Expenses” shall not include depreciation on the Building or equipment therein, interest, executive salaries, real estate brokers’ commissions, or other expenses that do not relate to the

operation of the Building. The annual statement of Operating Expenses shall be accounted for and reported in accordance with generally accepted accounting principles (the “Annual Statement”).

Notwithstanding anything to the contrary set forth in the Lease, Operating Expenses shall not include (A) the cost of alterations to space in the Building leased or to be leased to others; (B) any base rent payments or similar payments under any ground lease of the land or any prime lease of the land and/or Building; (C) depreciation, interest and principal payments of mortgages and other debt costs, if any; (D) federal, state and city income, excess profit, gift, estate, succession, inheritance, franchise and transfer taxes, and any other taxes relating to the operation of Landlord’s business but not the Building or underlying land; (E) expenses for capital improvements made to the Building or Common Areas except any capital improvement which results in savings of labor or other costs to the extent of the lesser of the cost of such capital improvement amortized over its useful life or the annual cost savings resulting from such capital improvement; (F) those expenses incurred in leasing space in the Building; (G) leasing commissions; (H) (reserved); (I) rent concessions and lease inducements provided to tenants of the Building; (J) roof and structural replacement costs (but not maintenance costs and repairs such as roof leaks); (K) the cost of repairing or restoring any portion of the Building damaged by fire or other casualty; provided that any deductible (not to exceed $100,000) paid by Landlord shall be a permitted Operating Expense; (L) the cost of repairs, alterations or replacements required as the result of any taking or condemnation of the underlying land or Building for public or quasi-public use or purpose by any governmental or quasi-governmental authority, or as the result of any conveyance in lieu of being taken or condemned; (M) any cost or expenditure or any portion thereof for which Landlord has been reimbursed, whether by insurance proceeds or otherwise, except reimbursements or other payments from other tenants of the Building in respect to costs and expenses which are Operating Expenses; (N) management fees in excess of 4% of Landlord’s annual rental income from the Building; (O) any payments for services made to entities affiliated with or related to Landlord to the extent that such payments exceed fair market value for such services; (P) any costs or fees incurred in connection with the acquisition and development of the underlying land and Building, including but not limited to, any exactions or assessments by governmental authorities (i.e., impact fees); (Q) employee costs and expenses of Landlord, except those incurred for the direct operation and maintenance of the Common Areas and Building; and (R) overhead and administrative costs of Landlord.

Landlord shall keep and make available to Tenant, for a period of six months after any Annual Statement is delivered to Tenant, or if Tenant questions any item to be determined thereunder, then until such question is settled, records in reasonable detail of the Operating Expenses for the period covered by such statement, and Landlord shall permit Tenant to examine and copy and, at Tenant’s expense, to audit such records at reasonable times following reasonable notice. In the event Tenant’s audit reveals that Landlord’s Annual Statement was in error by an amount in excess of 5%, in such event Landlord shall reimburse Tenant for the cost of such audit and refund any overpayment made by Tenant, if any. Audits shall be limited to a one year period and shall not be performed by firms operating on a contingency basis.

When computing Tenant’s Proportionate Share of Operating Expenses in excess of the Base Year Expense Stop, the “Controllable Expenses” (as hereinafter defined) shall not increase by more than five percent (5%) per calendar year, and Tenant shall not be liable to

Landlord for any portion in excess of such amount. For the purposes of this Lease, Controllable Expenses shall be defined as all Operating Expenses other than taxes , insurance expenses, and utilities expenses.

EXHIBIT A

PREMISES

EXHIBIT B

RULES AND REGULATIONS

1. Access to Building . On Saturdays, Sundays, legal holidays and weekdays between the hours of 6:00 P.M. and 7:00 A.M., access to the Building and/or to the halls, corridors or stairways in the Building may be restricted and access shall be gained by use of a key or electronic card to the outside doors of the Buildings. Landlord may from time to time establish security controls for the purpose of regulating access to the Building. Tenant shall be responsible for providing access to the Premises for its agents, employees, invitees and guests at times access is restricted, and shall comply with all such security regulations so established.

2. Protecting Premises . The last member of Tenant to leave the Premises shall close and securely lock all doors or other means of entry to the Premises and shut off all lights and equipment in the Premises.

3. Building Directories . The directories for the Building in the form selected by Landlord shall be used exclusively for the display of the name and location of tenants. Any additional names and/or name change requested by Tenant to be displayed in the directories must be approved by Landlord and, if approved, will be provided at the sole expense of Tenant.

4. Large Articles . Furniture, freight and other large or heavy articles may be brought into the Building only at times and in the manner designated by Landlord and always at Tenant’s sole responsibility. All damage done to the Building, its furnishings, fixtures or equipment by moving or maintaining such furniture, freight or articles shall be repaired at Tenant’s expense.

5. Signs . Tenant shall not paint, display, inscribe, maintain or affix any sign, placard, picture, advertisement, name, notice, lettering or direction on any part of the outside or inside of the Building, or on any part of the inside of the Premises which can be seen from the outside of the Premises, including windows and doors, without the written consent of Landlord, and then only such name or names or matter and in such color, size, style, character and material as shall be first approved by Landlord in writing. Landlord, without notice to Tenant, reserves the right to remove, at Tenant’s expense, all matters other than that provided for above.

6. Compliance with Laws . Tenant shall comply with all applicable laws, ordinances, governmental orders or regulations and applicable orders or directions from any public office or body having jurisdiction, whether now existing or hereinafter enacted with respect to the Premises and the use or occupancy thereof. Tenant shall not make or permit any use of the Premises which directly or indirectly is forbidden by law, ordinance, governmental regulations or order or direction of applicable public authority, which may be dangerous to persons or property or which may constitute a nuisance to other tenants.

7. Hazardous Materials . [Intentionally deleted; duplicative.]

8. Defacing Premises and Overloading . Tenant shall not place anything or allow anything to be placed in the Premises near the glass of any door, partition, wall or window that may be

9. unsightly from outside the Premises. Tenant shall not place or permit to be placed any article of any kind on any window ledge or on the exterior walls; blinds, shades, awnings or other forms of inside or outside window ventilators or similar devices shall not be placed in or about the outside windows in the Premises except to the extent that the character, shape, color, material and make thereof is approved by Landlord. Tenant shall not overload any floor or part thereof in the Premises, or any facility in the Building or any public corridors therein by bringing in or removing any large or heavy articles and Landlord may direct and control the location of safes, files, and all other heavy articles and, if considered necessary by Landlord may require Tenant at its expense to supply whatever supplementary supports necessary to properly distribute the weight.

10. Obstruction of Public Areas . Tenant shall not, whether temporarily, accidentally or otherwise, allow anything to remain in, place or store anything in, or obstruct in any way, any sidewalk, court, hall, passageway, entrance, or shipping area. Tenant shall lend its full cooperation to keep such areas free from all obstruction and in a clean and sightly condition, and move all supplies, furniture and equipment as soon as received directly to the Premises, and shall move all such items and waste (other than waste customarily removed by Building employees) that are at any time being taken from the Premises directly to the areas designated for disposal. All courts, passageways, entrances, exits, stairways, corridors, halls and roofs are not for the use of the general public and Landlord shall in all cases retain the right to control and prevent access thereto by all persons whose presence, in the judgment of Landlord, shall be prejudicial to the safety, character, reputation and interest of the Building and its tenants; provided, however, that nothing herein contained shall be construed to prevent such access to persons with whom Tenant deals within the normal course of Tenant’s business so long as such persons are not engaged in illegal activities.

11. Additional Locks . Tenant shall not attach, or permit to be attached, additional locks or similar devices to any door or window, change existing locks or the mechanism thereof, or make or permit to be made any keys for any door other than those provided by Landlord. Upon termination of this Lease or of Tenant’s possession, Tenant shall immediately surrender all keys to the Premises.

12. Communications or Utility Connections . [Intentionally deleted; duplicative.]

13. Office of the Building . Employees of Landlord shall not perform, and Tenant shall not engage them to do any work outside of their duties unless specifically authorized by Landlord.

14. Restrooms . The restrooms, toilets, urinals, vanities and the other apparatus shall not be used for any purpose other than that for which they were constructed, and no foreign substance of any kind whatsoever shall be thrown therein. The expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the Tenant whom, or whose employees or invitees, shall have caused it.

15. Intoxication . Landlord reserves the right to exclude or expel from the Building any person who, in the judgment of Landlord, is intoxicated, or under the influence of liquor or drugs, or who in any way violates any of the Rules and Regulations of the Building.

16. Nuisances and Certain Other Prohibited Uses . Tenant shall not (a) install or operate any internal combustion engine, boiler, machinery, refrigerating, heating or air conditioning apparatus in or about the Premises; (b) engage in any mechanical business, or in any service in or about the Premises or Building, except those ordinarily embraced within the Permitted Use as specified in Section 3 of the Lease; (c) use the Premises for housing, lodging, or sleeping purposes; (d) prepare or warm food in the Premises or permit food to be brought into the Premises for consumption therein (heating coffee and individual meals or snacks of employees excepted) except by express permission of Landlord; (e) place any radio or television antennae on the roof or on or in any part of the inside or outside of the Building other than the inside of the Premises, or place a musical or sound producing instrument or device inside or outside the Premises which may be heard outside the Premises; (f) use any power source for the operation of any equipment or device other than dry cell batteries or electricity or any emergency power generator installed by Tenant; (g) operate any electrical device from which may emanate waves that could interfere with or impair radio or television broadcasting or reception from or in the Building or elsewhere; (h) bring or permit to be in the Building any bicycle, other vehicle, dog (except in the company of a blind person), other animal or bird; (i) make or permit any objectionable noise or odor to emanate from the Premises; (j) disturb, harass, solicit or canvass any occupant of the Building; (k) do anything in or about the Premises which could be a nuisance or tend to injure the reputation of the Building; (i) allow any firearms in the Building or the Premises except as approved by Landlord in writing.

17. Solicitation . Tenant shall not canvass other tenants in the Building to solicit business or

18.

19.

20.

21.

22.

23.

24. contributions and shall not exhibit, sell or offer to sell, use, rent or exchange any products or services in or from the Premises unless ordinarily embraced within the Tenant’s Permitted Use as specified in Section 3 of the Lease.

25. Energy Conservation . Tenant shall not waste electricity, water, heat or air conditioning and agrees to cooperate fully with Landlord to insure the most effective operation of the Building’s heating and air conditioning, and shall not allow the adjustment (except by Landlord’s authorized Building personnel) of any controls.

26. Building Security . At all times other than normal business hours the exterior Building doors and suite entry door(s) must be kept locked to assist in security. Problems in Building and suite security should be directed to Landlord at .

27. Parking . Parking is in designated parking areas only. There shall be no vehicles in “no parking” zones or at curbs. Handicapped spaces are for handicapped persons only and the Police Department will ticket unauthorized (unidentified) cars in handicapped spaces.

Landlord reserves the right to remove vehicles that do not comply with the Lease or these Rules and Regulations and Tenant shall indemnify and hold harmless Landlord from its reasonable exercise of these rights with respect to the vehicles of Tenant and its employees.

28. Janitorial Service . The janitorial staff will remove all trash from trashcans. Any container or boxes left in hallways or apparently discarded unless clearly and conspicuously labeled DO NOT REMOVE may be removed without liability to Landlord. Any large volume of trash resulting from delivery of furniture, equipment, etc., should be removed by the delivery company, Tenant, or Landlord at Tenant’s expense. Janitorial service will be provided after hours five (5) days a week. All requests for trash removal other than normal janitorial services should be directed to Landlord at .

29. Construction . [Intentionally deleted; duplicative.]

EXHIBIT C

COMMENCEMENT AGREEMENT AND LEASE AMENDMENT NUMBER ONE

This COMMENCEMENT AGREEMENT AND LEASE AMENDMENT NUMBER ONE (the “First Amendment”), made and entered into as of this day of , 200 , by and between , a (“Landlord”) and , a corporation (“Tenant”);

W I T N E S S E T H :

WHEREAS, Tenant and Landlord entered into that certain Lease Agreement dated (the “Lease”), for space designated as Suite , comprising approximately rentable square feet, in the Building, located at , City of , County of , State of ; and

WHEREAS, the parties desire to amend the Rent Schedule and further alter and modify said Lease in the manner set forth below,

NOW, THEREFORE, in consideration of the mutual and reciprocal promises herein contained, Tenant and Landlord hereby agree that said Lease hereinafter described be, and the same is hereby modified in the following particulars, effective as of :

1. Lease Term. The definition for “Term”, provided in Section One of the Lease, entitled “Basic Definitions and Provisions” shall be amended to provide that the Commencement Date is: and the Expiration Date is: .

2. Base Rent . The definition for “Rent”, provided in Section One of the Lease, entitled “Basic Definitions and Provisions”, shall be amended as follows:

A. Base Rent. Subsection 1(e) entitled “Base Rent”, is amended to provide that the Base Rent for the Term shall be $ , instead of $ .

B. Rent Schedule. The rent schedule provided in Subsection 1(e) shall be replaced with the following rent schedule:

3. Miscellaneous. Unless otherwise defined herein, all capitalized terms used in this First Amendment shall have the same definitions ascribed to them in the Lease.

4. Lease Effectiveness. Except as modified and amended by this First Amendment, the Lease shall remain in full force and effect.

IN WITNESS WHEREOF, Landlord and Tenant have caused this Agreement to be duly executed, as of the day and year first above written.

Tenant:

	By:
	Name:
	Title:

	Date:

	Attest:
			Secretary

Corporate Seal:

Landlord:

By:

Date:

	Attest:
		Secretary

EXHIBIT D

EXAMPLE OF INSURANCE CERTIFICATE

EXHIBIT E

GUARANTY

[Intentionally Deleted.]

Exhibit 10.14

ADDENDUM TO OFFER LETTER

This Addendum modifies the severance pay provisions contained in the Offer Letter between Dan Johnston (the “Executive”) and Omnicell, Inc. (the “Company”). Executive and the Company hereby agree as follows:

Application of Internal Revenue Code Section 409A . Notwithstanding anything to the contrary herein, the following provisions apply to the extent severance benefits provided in Executive’s Offer Letter are subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ” ) and the regulations and other guidance thereunder and any state law of similar effect (collectively “ Section 409A ” ). Severance benefits shall not commence until Executive has a “separation from service” for purposes of Section 409A. The severance benefits are intended to satisfy the exemptions from application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if such exemptions are not available and Executive is, upon separation from service, a “specified employee” for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (i) six (6) months and one day after Executive’s separation from service, or (ii) Executive’s death. Executive shall receive severance benefits only if Executive executes and returns to the Company, within the applicable time period set forth therein but in no event more than forty-five (45) days following the date of separation from service, a separation agreement containing the Company’s standard form of release of claims in favor of the Company, and permits such release to become effective in accordance with its terms (such latest permitted date, the “ Separation Agreement Deadline ” ). If the severance benefits are not covered by one or more exemptions from the application of Section 409A and the separation agreement could become effective in the calendar year following the calendar year in which Executive separates from service, the separation agreement will not be deemed effective any earlier than the Separation Agreement Deadline. None of the severance benefits will be paid or otherwise delivered prior to the effective date of the separation agreement. Except to the minimum extent that payments must be delayed because Executive is a “specified employee” or until the effectiveness of the separation agreement, all severance benefits will be paid in a lump sum as soon as practicable in accordance with the Company’s normal payroll practices. The severance benefits are intended to qualify for an exemption from application of Section 409A or comply with its requirements to the extent necessary to avoid adverse personal tax consequences under Section 409A, and any ambiguities herein shall be interpreted accordingly.

OMNICELL, INC.

/s/ Mary Lee Sharp		12/30/10
By:		Date

/s/ Dan Johnston		12/29/10
Dan Johnston		Date

Exhibit 10.16

*Option*	Omnicell, Inc.
*Grant Notice*	1201 Charleston Road
	Mountain View, CA 94043

Name	Employee ID:

You have been granted an option to purchase Omnicell, Inc. Common Stock as follows:

Type of Option:
Grant No.:
Stock Option Plan:	2009 Equity Incentive Plan
Date of Grant:
Total Number of Option Shares:
Option Price per Share:
Total Exercise Price of Option Shares:
Early Exercise Allowed	NO

Vesting Date	Number of Shares Vesting on Vesting Date	Vesting Schedule

By your acceptance of this Option Grant, you agree that this option is granted under and governed by the terms and conditions of this Grant Notice, Omnicell, Inc.’s 2009 Equity Incentive Plan (as amended from time to time) (the “Plan”) and by the terms and conditions of the 2009 Equity Incentive Plan, Option Agreement (“Option Agreement”) which is attached hereto.

You understand and agree that as of the Date of Grant, this Option Grant Notice, the Option Agreement and the Plan set forth the entire understanding between you and Omnicell, Inc. regarding the Options set forth herein, and the underlying Common Stock, and supersede all prior oral and written agreements on that subject.

Chief Financial Officer

Attachment: Option Agreement

OMNICELL, INC.
2009 EQUITY INCENTIVE PLAN

OPTION AGREEMENT

(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

Pursuant to your Stock Option Grant Notice (“ Grant Notice ”) and this Option Agreement, Omnicell, Inc. (the “ Company ”) has granted you an option under its 2009 Equity Incentive Plan (the “ Plan ”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly defined in this Option Agreement but defined in the Plan shall have the same definitions as in the Plan.

The details of your option are as follows:

1. VESTING. Subject to the limitations contained herein, your option will vest as provided in your Grant Notice, provided that vesting will cease upon the termination of your Continuous Service.

2. NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common Stock subject to your option and your exercise price per share referenced in your Grant Notice may be adjusted from time to time for Capitalization Adjustments.

3. EXERCISE RESTRICTION FOR NON-EXEMPT EMPLOYEES. In the event that you are an Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended ( i.e., a “ Non-Exempt Employee ”), and except as otherwise provided in the Plan, you may not exercise your option until you have completed at least six (6) months of Continuous Service measured from the Date of Grant specified in your Grant Notice, notwithstanding any other provision of your option.

4. EXERCISE PRIOR TO VESTING (“EARLY EXERCISE”). If permitted in your Grant Notice ( i.e., the exercise schedule indicates that early exercise is permitted) and subject to the provisions of your option, you may elect at any time that is both (i) during the period of your Continuous Service and (ii) during the term of your option, to exercise all or part of your option, including the unvested portion of your option; provided, however, that:

(a) a partial exercise of your option shall be deemed to cover first vested shares of Common Stock and then the earliest vesting installment of unvested shares of Common Stock;

(b) any shares of Common Stock so purchased from installments that have not vested as of the date of exercise shall be subject to the purchase option in favor of the Company as described in the Company’s form of Early Exercise Stock Purchase Agreement;

(c) you shall enter into the Company’s form of Early Exercise Stock Purchase Agreement with a vesting schedule that will result in the same vesting as if no early exercise had occurred; and

(d) if your option is an Incentive Stock Option, then, to the extent that the aggregate Fair Market Value (determined at the time of grant) of the shares of Common Stock with respect to which your option plus all other Incentive Stock Options you hold are exercisable for the first time by you during any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), your option(s) or portions thereof that exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options.

5. METHOD OF PAYMENT. Payment of the exercise price is due in full upon exercise of all or any part of your option. You may elect to make payment of the exercise price in cash or by check or in any one or more of the following manners unless otherwise provided in your Grant Notice :

(a) Provided that at the time of exercise the Common Stock is publicly traded, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds.

(b) Provided that at the time of exercise the Common Stock is publicly traded, by delivery to the Company (either by actual delivery or attestation) of already-owned shares of Common Stock that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise. “Delivery” for these purposes, in the sole discretion of the Company at the time you exercise your option, shall include delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company of Common Stock to the extent such tender would violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock.

(c) If the Option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise , by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise of your option by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the Company shall accept a cash or other payment from you to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued; provided further, however, that shares of Common Stock will no longer be outstanding under your option and will not be exercisable thereafter to the extent that (1) shares are used to pay the exercise price pursuant to the “net exercise,” (2) shares are delivered to you as a result of such exercise, and (3) shares are withheld to satisfy tax withholding obligations.

6. WHOLE SHARES. You may exercise your option only for whole shares of Common Stock.

7. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, you may not exercise your option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act or, if such shares of Common Stock are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of your option also must comply with other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations.

8. TERM. You may not exercise your option before the commencement or after the expiration of its term. The term of your option commences on the Date of Grant and expires, subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following:

(a) immediately upon the termination of your Continuous Service for Cause;

(b) three (3) months after the termination of your Continuous Service for any reason other than Cause, Disability, or death; provided, however, that if during any part of such three (3) month period your option is not exercisable solely because of the condition set forth in the section above relating to “Securities Law Compliance,” your option shall not expire until the earlier of the Expiration Date or until it shall have been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service; and if (i) you are a Non-Exempt Employee, (ii) your Continuous Service terminates within six (6) months after the Date of Grant specified in your Grant Notice, and (iii) you have vested in a portion of your option at the time of your termination of Continuous Service, your option shall not expire until the earlier of (x) the later of (A) the date that is seven (7) months after the Date of Grant specified in your Grant Notice or (B) the date that is three (3) months after the termination of your Continuous Service, or (y) the Expiration Date;

(c) twelve (12) months after the termination of your Continuous Service due to your Disability;

(d) eighteen (18) months after your death if you die either during your Continuous Service or within three (3) months after your Continuous Service terminates;

(e) the Expiration Date indicated in your Grant Notice;

(f) the day before the tenth (10 th ) anniversary of the Date of Grant.

If your option is an Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, the Code requires that at all times beginning on the date of grant of your option and ending on the day three (3) months before the date of your option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability. The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option will necessarily be treated as an Incentive Stock Option if you continue to provide services to the

Company or an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three (3) months after the date your employment with the Company or an Affiliate terminates.

9. EXERCISE.

(a) You may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require.

(b) By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock acquired upon such exercise.

(c) If your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs within two (2) years after the date of your option grant or within one (1) year after such shares of Common Stock are transferred upon exercise of your option.

(d) TRANSFERABILITY.

(i) If your option is an Incentive Stock Option, your option is generally not transferable, except (1) by will or by the laws of descent and distribution or (2) pursuant to a domestic relations order (provided that such Incentive Stock Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer), and is exercisable during your life only by you. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise your option. In addition, you may transfer your option to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the option is held in the trust, provided that you and the trustee enter into transfer and other agreements required by the Company.

(ii) If your option is a Nonstatutory Stock Option, your option is not transferable, except (1) by will or by the laws of descent and distribution, (2) pursuant to a domestic relations order, (3) with the prior written approval of the Company, by instrument to an inter vivos or testamentary trust, in a form accepted by the Company, in which the option is to be passed to beneficiaries upon the death of the trustor (settlor) and (4) with the prior written approval of the Company, by gift, in a form accepted by the Company, to a permitted transferee under Rule 701 of the Securities Act.

10. OPTION NOT A SERVICE CONTRACT. Your option is not an employment or service contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment. In addition, nothing in your option shall obligate the Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate.

11. WITHHOLDING OBLIGATIONS.

(a) At the time you exercise your option, in whole or in part, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with your option.

(b) Upon your request and subject to approval by the Company, in its sole discretion, and compliance with any applicable conditions or restrictions of law, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid classification of your option as a liability for financial accounting purposes). If the date of determination of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant to the preceding sentence shall not be permitted unless you make a proper and timely election under Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of your option. Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such exercise. Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility.

(c) You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company shall have no obligation to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein unless such obligations are satisfied.

12. TAX CONSEQUENCES. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes your tax liabilities. You shall not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from your option or your other compensation. In particular, you acknowledge that this option is exempt from Section 409A of

the Code only if the exercise price per share specified in the Grant Notice is at least equal to the “fair market value” per share of the Common Stock on the Date of Grant and there is no other impermissible deferral of compensation associated with the option.

13. NOTICES. Any notices provided for in your option or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company.

14. GOVERNING PLAN DOCUMENT. Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of your option and those of the Plan, the provisions of the Plan shall control.

Exhibit 10.17

*Restricted Stock Unit*	Omnicell, Inc.
*Grant Notice*	1201 Charleston Road
	Mountain View, CA 94043

Name	Employee ID:

You have been granted a Restricted Stock Unit Award in Omnicell, Inc. Common Stock as follows:

	Type of Award:	Restricted Stock Unit (RSU)
	Grant No.:
	Equity Incentive Plan:	2009 Equity Incentive Plan
	Date of Grant:
	Total Number of Shares Subject to Award:

		Number of Shares
Vesting Date		Vesting on Vesting Date

Remaining Shares will vest quarterly pro-rata on the same day of the last month of each quarter over the remainder of the four year vesting term.

By your acceptance of this Stock Award Grant, you agree that this award is granted under and governed by the terms and conditions of this Grant Notice, Omnicell, Inc.’s 2009 Equity Incentive Plan (as amended from time to time) (the “Plan”) and by the terms and conditions of the 2009 Equity Incentive Plan, Restricted Stock Unit Award Agreement (“Award Agreement”) which is attached hereto.

You understand and agree that as of the Date of Grant, this Grant Notice, the Award Agreement and the Plan set forth the entire understanding between you and Omnicell, Inc. regarding the Stock Award set forth herein, and the underlying Common Stock, and supersede all prior oral and written agreements on that subject.

Chief Financial Officer

Attachment: Restricted Stock Unit Award Agreement

OMNICELL, INC.
2009 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

Pursuant to the Restricted Stock Unit Grant Notice (“ Grant Notice ”) and this Restricted Stock Unit Award Agreement and in consideration of your services, Omnicell, Inc. (the “ Company ”) has awarded you a Restricted Stock Unit Award (the “ Award ”) under its 2009 Equity Incentive Plan (the “ Plan ”) . Your Award is granted to you effective as of the Date of Grant set forth in the Grant Notice for this Award. This Restricted Stock Unit Award Agreement shall be deemed to be agreed to by the Company and you upon the signing by you of the Restricted Stock Unit Award Grant Notice to which it is attached. Defined terms not explicitly defined in this Restricted Stock Unit Award Agreement shall have the same meanings given to them in the Plan. In the event of any conflict between the terms in this Restricted Stock Unit Award Agreement and the Plan, the terms of the Plan shall control. The details of your Award, in addition to those set forth in the Grant Notice and the Plan, are as follows.

1. GRANT OF THE AWARD. This Award represents the right to be issued on a future date the number of shares of the Company’s Common Stock as indicated in the Grant Notice. As of the Date of Grant, the Company will credit to a bookkeeping account maintained by the Company for your benefit (the “ Account ”) the number of shares of Common Stock subject to the Award. This Award was granted in consideration of your services to the Company. Except as otherwise provided herein, you will not be required to make any payment to the Company (other than past and future services to the Company) with respect to your receipt of the Award, the vesting of the shares or the delivery of the underlying Common Stock..

2. VESTING. Subject to the limitations contained herein, your Award will vest, if at all, in accordance with the vesting schedule provided in the Grant Notice, provided that vesting will cease upon the termination of your Continuous Service. Upon such termination of your Continuous Service, the shares credited to the Account that were not vested on the date of such termination will be forfeited at no cost to the Company and you will have no further right, title or interest in or to such underlying shares of Common Stock.

3. NUMBER OF SHARES.

(a) The number of shares subject to your Award may be adjusted from time to time for Capitalization Adjustments, as provided in the Plan.

(b) Any shares, cash or other property that becomes subject to the Award pursuant to this Section 3, if any, shall be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other shares covered by your Award.

(c) Notwithstanding the provisions of this Section 3, no fractional shares or rights for fractional shares of Common Stock shall be created pursuant to this Section 3. The

Board shall, in its discretion, determine an equivalent benefit for any fractional shares or fractional shares that might be created by the adjustments referred to in this Section 3.

4. SECURITIES LAW COMPLIANCE. You may not be issued any shares under your Award unless either (i) the shares are registered under the Securities Act; or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award also must comply with other applicable laws and regulations governing the Award, and you will not receive such shares if the Company determines that such receipt would not be in material compliance with such laws and regulations.

5. LIMITATIONS ON TRANSFER. Your Award is not transferable, except by will or by the laws of descent and distribution. In addition to any other limitation on transfer created by applicable securities laws, you agree not to assign, hypothecate, donate, encumber or otherwise dispose of any interest in any of the shares of Common Stock subject to the Award until the shares are issued to you in accordance with Section 6 of this Agreement. After the shares have been issued to you, you are free to assign, hypothecate, donate, encumber or otherwise dispose of any interest in such shares provided that any such actions are in compliance with the provisions herein and applicable securities laws. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to receive any distribution of Common Stock to which you were entitled at the time of your death pursuant to this Agreement.

6. DATE OF ISSUANCE. The Company will deliver to you a number of shares of the Company’s Common Stock equal to the number of vested shares subject to your Award, including any additional shares received pursuant to Section 3 above that relate to those vested shares on the applicable vesting date(s). However, if a scheduled delivery date falls on a date that is not a business day, such delivery date shall instead fall on the next following business day. The form of such delivery (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.

7. DIVIDENDS. You shall receive no benefit or adjustment to your Award with respect to any cash dividend, stock dividend or other distribution that does not result from a Capitalization Adjustment as provided in Section 9(a) of the Plan; provided, however, that this sentence shall not apply with respect to any shares of Common Stock that are delivered to you in connection with your Award after such shares have been delivered to you.

8. RESTRICTIVE LEGENDS. The shares issued under your Award shall be endorsed with appropriate legends determined by the Company.

9. AWARD NOT A SERVICE CONTRACT.

(a) Your Continuous Service with the Company or an Affiliate is not for any specified term and may be terminated by you or by the Company or an Affiliate at any time, for any reason, with or without cause and with or without notice. Nothing in this Restricted Stock Unit Award Agreement (including, but not limited to, the vesting of your Award pursuant to the schedule set forth in Section 2 herein or the issuance of the shares subject to your Award), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Restricted

Stock Unit Award Agreement or the Plan shall: (i) confer upon you any right to continue in the employ of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Restricted Stock Unit Award Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company of the right to terminate you at will and without regard to any future vesting opportunity that you may have.

(b) By accepting this Award, you acknowledge and agree that the right to continue vesting in the Award pursuant to the schedule set forth in Section 2 is earned only by continuing as an employee, director or consultant at the will of the Company (not through the act of being hired, being granted this Award or any other award or benefit) and that the Company has the right to reorganize, sell, spin-out or otherwise restructure one or more of its businesses or Affiliates at any time or from time to time, as it deems appropriate (a “reorganization”). You further acknowledge and agree that such a reorganization could result in the termination of your Continuous Service, or the termination of Affiliate status of your employer and the loss of benefits available to you under this Restricted Stock Unit Award Agreement, including but not limited to, the termination of the right to continue vesting in the Award. You further acknowledge and agree that this Restricted Stock Unit Award Agreement, the Plan, the transactions contemplated hereunder and the vesting schedule set forth herein or any covenant of good faith and fair dealing that may be found implicit in any of them do not constitute an express or implied promise of continued engagement as an employee or consultant for the term of this Agreement, for any period, or at all, and shall not interfere in any way with your right or the Company’s right to terminate your Continuous Service at any time, with or without cause and with or without notice.

10. WITHHOLDING OBLIGATIONS.

(a) On or before the time you receive a distribution of the shares in respect of your Award, or at any time thereafter as requested by the Company and/or any Affiliate, you hereby authorize any required withholding from the Common Stock issuable to you and/or otherwise agree to make adequate provision in cash for any sums required to satisfy the federal, state or local tax withholding obligations of the Company or any Affiliate which arise in connection with your Award (the “ Withholding Taxes ”). As provided in Section 8(g) of the Plan, the Company may withhold from any compensation paid to you by the Company in partial or full satisfaction of the withholdings contemplated by this Section 10. In no way limiting the foregoing, the Company is hereby authorized to withhold shares of Common Stock that are otherwise to be issued and delivered to you under this Award in partial or full satisfaction of the withholdings contemplated by this Section 10; provided, however, that no shares of Common Stock shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law.

(b) Unless the tax withholding obligations of the Company and/or any Affiliate are satisfied, the Company shall have no obligation to deliver to you any Common Stock.

(c) In the event the obligation of the Company and/or any Affiliate to withhold arises prior to the delivery to you of Common Stock or it is determined after the delivery of Common Stock to you that the amount of the withholding obligation was greater than the amount withheld by the Company and/or any Affiliate, you agree to indemnify and hold the Company and its Affiliates harmless from any failure by the Company and/or any Affiliate to withhold the proper amount.

11. UNSECURED OBLIGATION. Your Award is unfunded, and as a holder of a vested Award, you shall be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue shares pursuant to this Agreement. You shall not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuant to this Agreement until such shares are issued to you pursuant to Section 6 of this Agreement. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

12. NOTICES. Any notices provided for in your Award or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. Notwithstanding the foregoing, the Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this Award by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

13. MISCELLANEOUS.

(a) The rights and obligations of the Company under your Award shall be transferable to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. Your rights and obligations under your Award may only be assigned with the prior written consent of the Company.

(b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award.

(c) You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award, and fully understand all provisions of your Award.

(d) This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(e) All obligations of the Company under the Plan and this Agreement shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

14. GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Except as expressly provided herein, in the event of any conflict between the provisions of your Award and those of the Plan, the provisions of the Plan shall control.

15. SEVERABILITY. If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

16. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. The value of the Award subject to this Agreement shall not be included as compensation, earnings, salaries, or other similar terms used when calculating the Employee’s benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.

17. CHOICE OF LAW. The interpretation, performance and enforcement of this Agreement will be governed by the law of the state of California without regard to such state’s conflicts of laws rules.

18. AMENDMENT. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by you and by a duly authorized representative of the Company. Notwithstanding the foregoing, this Agreement may be amended solely by the Board by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you, and provided that no such amendment adversely affecting your rights hereunder may be made without your written consent. Without limiting the foregoing, the Board reserves the right to change, by written notice to you, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such change shall be applicable only to rights relating to that portion of the Award which is then subject to restrictions as provided herein.

Exhibit 10.18

*Restricted Stock Bonus*	Omnicell, Inc.
*Grant Notice*	1201 Charleston Road
	Mountain View, CA 94043

Name	Employee ID:

You have been granted a Restricted Stock Bonus Award in Omnicell, Inc. Common Stock as follows:

	Type of Award:	Restricted Stock Bonus Award
	Grant No.:
	Equity Incentive Plan:	2009 Equity Incentive Plan
	Date of Grant:
	Total Number of Shares Subject to Award:
	Consideration:	Your past services

		Number of Shares
Vesting Date		Vesting on Vesting Date

By your acceptance of this Restricted Stock Bonus Award Grant, you agree that this award is granted under and governed by the terms and conditions of this Grant Notice, Omnicell, Inc.’s 2009 Equity Incentive Plan (as amended from time to time) (the “Plan”) and by the terms and conditions of the 2009 Equity Incentive Plan, Restricted Stock Bonus Agreement (“Award Agreement”) which is attached hereto.

You understand and agree that as of the Date of Grant, this Grant Notice, the Award Agreement and the Plan set forth the entire understanding between you and Omnicell, Inc. regarding the Restricted Stock Bonus Award set forth herein, and the underlying Common Stock, and supersede all prior oral and written agreements on that subject.

Chief Financial Officer

Attachment: Restricted Stock Bonus Agreement

OMNICELL, INC.
2009 EQUITY INCENTIVE PLAN

RESTRICTED STOCK BONUS AGREEMENT

Pursuant to the Restricted Stock Bonus Grant Notice (“ Grant Notice ”) and this Restricted Stock Bonus Agreement (collectively, the “Award ”) and in consideration of your past services, Omnicell, Inc. (the “ Company ”) has awarded you a stock bonus under its 2009 Equity Incentive Plan (the “ Plan ”) for the number of shares of the Company’s Common Stock subject to the Award as indicated in the Grant Notice. Defined terms not explicitly defined in this Restricted Stock Bonus Agreement but defined in the Plan shall have the same definitions as in the Plan.

The details of your Award are as follows:

1. VESTING. Subject to the limitations contained herein, your Award will vest as provided in the Grant Notice, provided that vesting will cease upon the termination of your Continuous Service.

2. NUMBER OF SHARES. The number of shares subject to your Award may be adjusted from time to time for Capitalization Adjustments, as provided in the Plan.

3. SECURITIES LAW COMPLIANCE. You may not be issued any shares under your Award unless the shares are either (i) then registered under the Securities Act or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award must also comply with other applicable laws and regulations governing the Award, and you will not receive such shares if the Company determines that such receipt would not be in material compliance with such laws and regulations.

4. TRANSFERABILITY. Your Award is not transferable except by will or by the laws of descent and distribution and shall be exercisable during your lifetime only by you.

5. RIGHT OF FIRST REFUSAL. Shares that are received under your Award are subject to any right of first refusal that may be described in the Company’s bylaws in effect at such time the Company elects to exercise its right.

6. RIGHT OF REPURCHASE.

(a) To the extent provided in the Company’s bylaws, as amended from time to time, the Company shall have the right to repurchase all or any part of the shares received pursuant to your Award (a “ Repurchase Right ”).

(b) To the extent a Repurchase Right is not provided in the Company’s bylaws, as amended from time to time, the Company shall have a Repurchase Right as to the shares you received pursuant to your Award that have not as yet vested in accordance with the Vesting Schedule on the Grant Notice (“ Unvested Shares ”) on the following terms and conditions:

(i) The Company, shall simultaneously with termination of your Continuous Service automatically reacquire for no consideration all of the Unvested Shares, unless the Company agrees to waive its Repurchase Right as to some or all of the Unvested Shares. Any such waiver shall be exercised by the Company by written notice to you or your representative (with a copy to the Escrow Holder as defined below) within ninety (90) days after the termination of your Continuous Service, and the Escrow Holder may then release to you the number of Unvested Shares not being reacquired by the Company. If the Company does not waive its Repurchase Right as to all of the Unvested Shares, then upon such termination of your Continuous Service, the Escrow Holder shall transfer to the Company the number of shares the Company is reacquiring.

(ii) The Company shall not exercise its Repurchase Right until at least six (6) months (or such longer or shorter period of time necessary to avoid classification of the Award as a liability for financial accounting purposes) have elapsed following delivery of shares of Common Stock subject to the Award, unless otherwise specifically provided by the Board. If the Company does exercise its Repurchase Right as to any of the shares subject to your Award, then upon such termination of your Continuous Service, the Escrow Holder shall transfer to the Company the number of shares the Company is repurchasing.

(iii) The shares issued under your Award shall be held in escrow pursuant to the terms of the Joint Escrow Instructions attached to the Grant Notice as Attachment IV. You agree to execute two (2) Assignment Separate From Certificate forms (with date and number of shares blank) substantially in the form attached to the Grant Notice as Attachment III and deliver the same, along with the certificate or certificates evidencing the shares, for use by the escrow agent pursuant to the terms of the Joint Escrow Instructions.

(iv) Subject to the provisions of your Award, you shall, during the term of your Award, exercise all rights and privileges of a shareholder of the Company with respect to the shares deposited in escrow. You shall be deemed to be the holder of the shares for purposes of receiving any dividends which may be paid with respect to such shares and for purposes of exercising any voting rights relating to such shares, even if some or all of such shares have not yet vested and been released from the Company’s Repurchase Right.

(v) If, from time to time, there is any stock dividend, stock split or other change in the character or amount of any of the outstanding stock of the corporation the stock of which is subject to the provisions of your Award, then in such event any and all new, substituted or additional securities to which you are entitled by reason of your ownership of the shares acquired under your Award shall be immediately subject to the Repurchase Right with the same force and effect as the shares subject to this Repurchase Right immediately before such event.

(vi) In the event of a Corporate Transaction as defined in the Plan, the Repurchase Right may be assigned by the Company to the successor of the Company (or such successor’s parent company), if any, in connection with such transaction. To the extent the Repurchase Right remains in effect following such transaction, it shall apply to the new capital stock, cash or other property received in exchange for the Common Stock in consummation of the transaction, but only to the extent the Common Stock was at the time covered by such right.

If any Repurchase Right is not assumed or substituted in connection with such transaction, the Repurchase Right shall lapse prior to the effective time of the Corporate Transaction.

(vii) In addition to any other limitation on transfer created by applicable securities laws, you shall not sell, assign, hypothecate, donate, encumber, or otherwise dispose of any interest in the Common Stock while such shares of Common Stock are subject to the Repurchase Right or continue to be held in the Joint Escrow; provided, however, that an interest in such shares may be transferred pursuant to a qualified domestic relations order as defined in the Code or Title I of the Employee Retirement Income Security Act. After any Common Stock has been released from the Joint Escrow, you shall not sell, assign, hypothecate, donate, encumber, or otherwise dispose of any interest in the Common Stock except in compliance with the provisions herein and applicable securities laws.

7. RESTRICTIVE LEGENDS. The shares issued under your Award shall be endorsed with appropriate legends determined by the Company.

8. AWARD NOT A SERVICE CONTRACT. Your Award is not an employment or service contract, and nothing in your Award shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or on the part of the Company or an Affiliate to continue your employment. In addition, nothing in your Award shall obligate the Company or an Affiliate, their respective shareholders, boards of directors, Officers or Employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate.

9. WITHHOLDING OBLIGATIONS. At the time your Award is granted, or at any time thereafter as requested by the Company, you hereby authorize withholding from any amounts payable to you, or otherwise agree to make adequate provision in cash for, any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any Affiliate, if any, which arise in connection with your Award. In the Company’s sole discretion, the Company may elect, and you hereby authorize the Company, to withhold vested shares in such amounts as the Company determines are necessary to satisfy your obligation pursuant to the preceding sentence. Unless the tax withholding obligations of the Company and/or any Affiliate are satisfied, the Company shall have no obligation to deliver to you any Common Stock.

10. TAX CONSEQUENCES. The acquisition and vesting of the shares may have adverse tax consequences to you that may avoided or mitigated by filing an election under Section 83(b) of the Code. Such election must be filed within thirty (30) days after the date of your Award. YOU ACKNOWLEDGE THAT IT IS YOUR OWN RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(B), EVEN IF YOU REQUEST THE COMPANY TO MAKE THE FILING ON YOUR BEHALF.

11. NOTICES. Any notices provided for in your Award or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company.

12. MISCELLANEOUS.

(b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award.

(c) You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award and fully understand all provisions of your Award.

13. GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of your Award and those of the Plan, the provisions of the Plan shall control.

14. APPLICATION OF SECTION 409A. This Award is intended to be exempt from the application of Section 409A of the Code (“Section 409A”) pursuant to Treasury Regulation 1.409A-1(b)(6). Notwithstanding the foregoing, if it is determined that the Award fails to satisfy the requirements of Treasury Regulation 1.409A-1(b)(6) or the short-term deferral rule and is otherwise deferred compensation subject to Section 409A, and if you are a “Specified Employee” (within the meaning set forth Section 409A(a)(2)(B)(i) of the Code) as of the date of your separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)), then the vesting and/or issuance of any shares that would otherwise be made upon the date of your separation from service or within the first six (6) months thereafter will not be made on the originally scheduled date(s) and will instead occur in a lump sum on the date that is six (6) months and one day after the date of the separation from service, with the balance of the shares becoming vested or issued thereafter in accordance with the original vesting and issuance schedule set forth above, but if and only if such delay is necessary to avoid the imposition of taxation on you in respect of the shares under Section 409A of the Code. Each installment of shares that vests is intended to constitute a “separate payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2).

JOINT ESCROW INSTRUCTIONS

[Date]

Corporate Secretary

Omnicell, Inc.

1201 Charleston Road

Mountain View, CA 94043-1337

Dear Sir/Madam:

As Escrow Agent for both Omnicell, Inc., a Delaware corporation (the “ Company ”) , and the undersigned recipient of stock of the Company (“ Recipient ”) , you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that certain Restricted Stock Bonus Grant Notice (the “ Grant Notice ”) , dated to which a copy of these Joint Escrow Instructions is attached as Attachment IV, and pursuant to the terms of that certain Restricted Stock Bonus Agreement (“ Agreement ”), which is Attachment I to the Grant Notice, in accordance with the following instructions:

1. In the event Recipient ceases to render services to the Company or an affiliate of the Company during the vesting period set forth in the Grant Notice, the Company or its assignee will give to Recipient and you a written notice specifying that the shares of Common Stock shall be transferred to the Company. Recipient and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.

2. At the closing you are directed (a) to date any stock assignments necessary for the transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver same, together with the certificate evidencing the shares of Common Stock to be transferred, to the Company.

3. Recipient irrevocably authorizes the Company to deposit with you any certificates evidencing shares of Common Stock to be held by you hereunder and any additions and substitutions to said shares as specified in the Grant Notice. Recipient does hereby irrevocably constitute and appoint you as Recipient’s attorney-in-fact and agent for the term of this escrow to execute with respect to such securities and other property all documents of assignment and/or transfer and all stock certificates necessary or appropriate to make all securities negotiable and complete any transaction herein contemplated.

4. This escrow shall terminate upon vesting of the shares or upon the earlier return of the shares to the Company pursuant to the Company’s Repurchase Right or other forfeiture condition under the Plan.

5. If at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Recipient, you shall deliver all of same

to any pledgee entitled thereto or, if none, to Recipient and shall be discharged of all further obligations hereunder.

6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.

7. You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties or their assignees. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Recipient while acting in good faith and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith.

8. You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree of any court, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

9. You shall not be liable in any respect on account of the identity, authority or rights of the parties executing or delivering or purporting to execute or deliver the Grant Notice or any documents or papers deposited or called for hereunder.

10. You shall not be liable for the outlawing of any rights under any statute of limitations with respect to these Joint Escrow Instructions or any documents deposited with you.

11. You shall be entitled to employ such legal counsel, including but not limited to Cooley Godward Kronish LLP, and other experts as you may deem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor.

12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be Secretary of the Company or if you shall resign by written notice to each party. In the event of any such termination, the Company may appoint any officer or assistant officer of the Company as successor Escrow Agent and Recipient hereby confirms the appointment of such successor or successors as his attorney-in-fact and agent to the full extent of your appointment.

13. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.

14. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities, you may (but are not obligated to) retain in your possession without liability to anyone all or any part of said securities until

such dispute shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings.

15. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in any United States Post Box, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties hereunto entitled at the following addresses, or at such other addresses as a party may designate by ten (10) days’ written notice to each of the other parties hereto:

COMPANY:	Omnicell, Inc. 1201 Charleston Road Mountain View, CA 94043-1337 Attn: [Chief Financial Officer]

RECIPIENT:



ESCROW AGENT:	[Company Name] [address] [address] Attn: Corporate Secretary

16. By signing these Joint Escrow Instructions you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Grant Notice.

17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. It is understood and agreed that references to “you” or “your” herein refer to the original Escrow Agent and to any and all successor Escrow Agents. It is understood and agreed that the Company may at any time or from time to time assign its rights under the Grant Notice and these Joint Escrow Instructions in whole or in part.

18. This Agreement shall be governed by and interpreted and determined in accordance with the laws of the State of California, as such laws are applied by California courts to contracts made and to be performed entirely in California by residents of that state.

		Very truly yours,

		OMNICELL, INC.


		By:

		RECIPIENT




		Name:


ESCROW AGENT:

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Bonus Grant Notice and Restricted Stock Bonus Agreement (the “ Award ”), [Participant’s Name] hereby sells, assigns and transfers unto Omnicell, Inc., a Delaware corporation (“ Assignee ”) ( ) shares of the common stock of the Assignee, standing in the undersigned’s name on the books of said corporation represented by Certificate No. herewith and do hereby irrevocably constitute and appoint as attorney-in-fact to transfer the said stock on the books of the within named Company with full power of substitution in the premises. This Assignment may be used only in accordance with and subject to the terms and conditions of the Award, in connection with the repurchase of shares of Common Stock of the Corporation issued to the undersigned pursuant to the Award, and only to the extent that such shares remain subject to the Corporation’s Repurchase Right under the Award.

Dated:


			Signature:
			[Participant’s Name], Recipient

[INSTRUCTION: Please do not fill in any blanks other than the signature line. The purpose of this Assignment is to enable the Company to exercise its Repurchase Right set forth in the Award without requiring additional signatures on your part. ]

Exhibit 10.21

ADDENDUM TO OFFER LETTER

This Addendum modifies the severance pay provisions contained in the Offer Letter between Rob Seim (the “Executive”) and Omnicell, Inc. (the “Company”). Executive and the Company hereby agree as follows:

OMNICELL, INC.

/s/ Mary Lee Sharp		12/30/10
By:		Date

/s/Rob Seim		12/29/10
Rob Seim		Date

Exhibit 10.22

ADDENDUM TO CHANGE IN CONTROL SEVERANCE LETTER

This Addendum modifies the severance pay provisions contained in a letter (the “ CiC Severance Letter ”) from Omnicell, Inc. (the “ Company ”) to Rob Seim (the “ Executive ”) as it relates to payment of severance benefits in connection with the Acquisition of the Company (the “ CiC Severance Benefits ”). Terms not defined herein shall have the meanings ascribed to them in the CiC Severance Letter. Executive and the Company hereby agree as follows:

Entitlement to Severance Benefits. The CiC Severance Benefits are payable to Executive only if within twelve (12) months following an Acquisition of the Company either (i) Executive suffers a separation from service from the Company due to an involuntary termination without Cause, (ii) the principal place of performance of Executive’s responsibilities and duties is changed to a location outside of the San Mateo, Santa Clara or San Francisco counties, or (iii) there is a material reduction in Executive’s responsibilities and duties without Cause; provided however that, Executive shall be entitled to the CiC Severance Benefits due to an event described in (ii) or (iii) above only if (x) the Company is given written notice from the Executive within sixty (60) days following the first of such event describing the condition, (y) the Company fails to satisfactorily remedy such condition within thirty (30) days following such written notice, and (z) the Executive terminates employment within thirty (30) days following the end of the period within which the Company was entitled to remedy the condition but failed to do so.

Application of Internal Revenue Code Section 409A . Notwithstanding anything to the contrary herein, the following provisions apply to the extent severance benefits provided in Executive’s CiC Severance Letter are subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ” ) and the regulations and other guidance thereunder and any state law of similar effect (collectively “ Section 409A ” ). Severance benefits shall not commence until Executive has a “separation from service” for purposes of Section 409A. Severance benefits are intended to comply with the provisions of Section 409A. As such, if Executive is, upon separation from service, a “specified employee” for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (i) six (6) months and one day after Executive’s separation from service, or (ii) Executive’s death. Executive shall receive severance benefits only if Executive executes and returns to the Company, within the applicable time period set forth therein but in no event more than forty-five (45) days following the date of separation from service, a separation agreement containing the Company’s standard form of release of claims in favor of the Company, and permits such release to become effective in accordance with its terms (such latest permitted date, the “ Separation Agreement Deadline ” ). If the severance benefits are not covered by one or more exemptions from the application of Section 409A and the separation agreement could become effective in the calendar year following the calendar year in which Executive separates from service, the separation agreement will not be deemed effective any earlier than the Separation Agreement Deadline. None of the severance benefits will be paid or otherwise delivered prior to the effective date of the separation agreement. Except to the minimum extent that payments must be delayed because Executive is a “specified employee” or until the effectiveness of the separation agreement, all severance benefits will be paid in a lump sum on the 60 th day following Executive’s separation from service. The severance benefits are intended to qualify for an exemption from application of Section 409A or comply with its requirements to the extent necessary to avoid adverse personal tax consequences under Section 409A, and any ambiguities herein shall be interpreted accordingly.

OMNICELL, INC.

/s/ Mary Lee Sharp		12/30/10
By:		Date

/s/ Rob Seim		12/29/10
Rob Seim		Date

Exhibit 10.24

ADDENDUM TO CHANGE IN CONTROL SEVERANCE LETTER

This Addendum modifies the severance pay provisions contained in the letter (the “ CiC Severance Letter ”) from Omnicell, Inc. (the “ Company ”) to [Executive Name] (the “ Executive ”) as it relates to payment of severance benefits in connection with the Acquisition of the Company (the “ CiC Severance Benefits ”). Terms not defined herein shall have the meanings ascribed to them in the CiC Severance Letter. Executive and the Company hereby agree as follows:

Application of Internal Revenue Code Section 409A . Notwithstanding anything to the contrary herein, the following provisions apply to the extent severance benefits provided in Executive’s CiC Severance Letter are subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ” ) and the regulations and other guidance thereunder and any state law of similar effect (collectively “ Section 409A ” ). Severance benefits shall not commence until Executive has a “separation from service” for purposes of Section 409A. Severance benefits are intended to comply with the provisions of Section 409A. As such, if Executive is, upon separation from service, a “specified employee” for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (i) six (6) months and one day after Executive’s separation from service, or (ii) Executive’s death. Executive shall receive severance benefits only if Executive executes and returns to the Company, within the applicable time period set forth therein but in no event more than forty-five (45) days following the date of separation from service, a separation agreement containing the Company’s standard form of release of claims in favor of the Company, and permits such release to become effective in accordance with its terms (such latest permitted date, the “ Separation Agreement Deadline ” ). If the severance benefits are not covered by one or more exemptions from the application of Section 409A and the separation agreement could become effective in the calendar year following the calendar year in which Executive separates from service, the separation agreement will not be deemed effective any earlier than the Separation Agreement Deadline. None of the severance benefits will be paid or otherwise delivered prior to the effective date of the separation agreement. Except to the minimum extent that payments must be delayed because Executive is a “specified employee” or until the effectiveness of the separation agreement, all severance benefits will be paid in a lump sum on the 60 th day following Executive’s separation from service. The severance benefits are intended to qualify for an exemption from application of Section 409A or comply with its requirements to the extent necessary to avoid adverse personal tax consequences under Section 409A, and any ambiguities herein shall be interpreted accordingly.

OMNICELL, INC.


By:		Date


[Executive]		Date

Exhibit 10.28

ADDENDUM TO CHANGE IN CONTROL SEVERANCE LETTER

This Addendum modifies the severance pay provisions contained in a letter (the “ CiC Severance Letter ”) from Omnicell, Inc. (the “ Company ”) to Nhat Ngo (the “ Executive ”) as it relates to payment of severance benefits in connection with the Acquisition of the Company (the “ CiC Severance Benefits ”). Terms not defined herein shall have the meanings ascribed to them in the CiC Severance Letter. Executive and the Company hereby agree as follows:

Application of Internal Revenue Code Section 409A . Notwithstanding anything to the contrary herein, the following provisions apply to the extent severance benefits provided in Executive’s CiC Severance Letter are subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ” ) and the regulations and other guidance thereunder and any state law of similar effect (collectively “ Section 409A ” ). Severance benefits shall not commence until Executive has a “separation from service” for purposes of Section 409A. Severance benefits are intended to comply with the provisions of Section 409A. As such, if Executive is, upon separation from service, a “specified employee” for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (i) six (6) months and one day after Executive’s separation from service, or (ii) Executive’s death. Executive shall receive severance benefits only if Executive executes and returns to the Company, within the applicable time period set forth therein but in no event more than forty-five (45) days following the date of separation from service, a separation agreement containing the Company’s standard form of release of claims in favor of the Company, and permits such release to become effective in accordance with its terms (such latest permitted date, the “ Separation Agreement Deadline ” ). If the severance benefits are not covered by one or more exemptions from the application of Section 409A and the separation agreement could become effective in the calendar year following the calendar year in which Executive separates from service, the separation agreement will not be deemed effective any earlier than the Separation Agreement Deadline. None of the severance benefits will be paid or otherwise delivered prior to the effective date of the separation agreement. Except to the minimum extent that payments must be delayed because Executive is a “specified employee” or until the effectiveness of the separation agreement, all severance benefits will be paid in a lump sum on the 60 th day following Executive’s separation from service. The severance benefits are intended to qualify for an exemption from application of Section 409A or comply with its requirements to the extent necessary to avoid adverse personal tax consequences under Section 409A, and any ambiguities herein shall be interpreted accordingly.

OMNICELL, INC.

/s/ Mary Lee Sharp		12/31/10
By:		Date

/s/ Nhat Ngo		12/31/10
Nhat Ngo		Date

Exhibit 10.30

ADDENDUM TO CHANGE IN CONTROL SEVERANCE LETTER

This Addendum modifies the severance pay provisions contained in a letter (the “ CiC Severance Letter ”) from Omnicell, Inc. (the “ Company ”) to Marga Ortigas-Wedekind (the “ Executive ”) as it relates to payment of severance benefits in connection with the Acquisition of the Company (the “ CiC Severance Benefits ”). Terms not defined herein shall have the meanings ascribed to them in the CiC Severance Letter. Executive and the Company hereby agree as follows:

Application of Internal Revenue Code Section 409A . Notwithstanding anything to the contrary herein, the following provisions apply to the extent severance benefits provided in Executive’s CiC Severance Letter are subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ” ) and the regulations and other guidance thereunder and any state law of similar effect (collectively “ Section 409A ” ). Severance benefits shall not commence until Executive has a “separation from service” for purposes of Section 409A. Severance benefits are intended to comply with the provisions of Section 409A. As such, if Executive is, upon separation from service, a “specified employee” for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (i) six (6) months and one day after Executive’s separation from service, or (ii) Executive’s death. Executive shall receive severance benefits only if Executive executes and returns to the Company, within the applicable time period set forth therein but in no event more than forty-five (45) days following the date of separation from service, a separation agreement containing the Company’s standard form of release of claims in favor of the Company, and permits such release to become effective in accordance with its terms (such latest permitted date, the “ Separation Agreement Deadline ” ). If the severance benefits are not covered by one or more exemptions from the application of Section 409A and the separation agreement could become effective in the calendar year following the calendar year in which Executive separates from service, the separation agreement will not be deemed effective any earlier than the Separation Agreement Deadline. None of the severance benefits will be paid or otherwise delivered prior to the effective date of the separation agreement. Except to the minimum extent that payments must be delayed because Executive is a “specified employee” or until the effectiveness of the separation agreement, all severance benefits will be paid in a lump sum on the 60 th day following Executive’s separation from service. The severance benefits are intended to qualify for an exemption from application of Section 409A or comply with its requirements to the extent necessary to avoid adverse personal tax consequences under Section 409A, and any ambiguities herein shall be interpreted accordingly.

OMNICELL, INC.

/s/ Mary Lee Sharp		12/30/10
By:		Date

/s/ Marga Ortigas-Wedekind		12/30/10
Marga Ortigas-Wedekind		Date

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 21.1

List of Subsidiaries

Omnicell Corporation (India) Private Limited

Omnicell International, Inc.

Omnicell Spain SL

Pandora Data Systems, Inc.

Rioux Vision, Inc.

QuickLinks

Exhibit 21.1

List of Subsidiaries

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 333-67828, 333-82818, 333-104427, 333-107356, 333-116103, 333-125080, 333-132556, 333-142857, 333-149758 and 333-159562) pertaining to the 1992 Incentive Plan, 1995 Management Stock Option Plan, 1997 Employee Stock Purchase Plan (as amended), 1999 Equity Incentive Plan, 2003 Equity Incentive Plan, 2004 Equity Incentive Plan and 2009 Equity Incentive Plan and Amendment No. 1 to the Registration Statement (Form S-3/A No. 333-117592) of our reports dated March 11, 2011, with respect to the consolidated financial statements and schedule of Omnicell, Inc., and the effectiveness of internal control over financial reporting of Omnicell, Inc., included in this Annual Report (Form 10-K) for the year ended December 31, 2010.


		/s/ Ernst & Young LLP

San Jose, California
March 11, 2011

QuickLinks

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.1

CERTIFICATION

I, Randall A. Lipps, certify that:

1. I have reviewed this annual report on Form 10-K of Omnicell, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) and 15d-15(f) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 11, 2011


		/s/ RANDALL A. LIPPS Randall A. Lipps President and Chief Executive Officer

QuickLinks

Exhibit 31.1

CERTIFICATION

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.2

CERTIFICATION

I, Robin G. Seim, certify that:

1. I have reviewed this annual report on Form 10-K of Omnicell, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 11, 2011


		/s/ ROBIN G. SEIM Robin G. Seim Chief Financial Officer and Vice President Finance, Administration and Manufacturing

QuickLinks

Exhibit 31.2

CERTIFICATION

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 32.1

CERTIFICATION

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Randall A. Lipps, the President and Chief Executive Officer of Omnicell, Inc. (the "Company") and Robin G. Seim, the Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:

1. The Company's Annual Report on Form 10-K for the period ended December 31, 2010, to which this Certification is attached as Exhibit 32.1 (the "Annual Report") fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

2. The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

In Witness Whereof, the undersigned have set their hands hereto as of the 11th day of March, 2011.


/s/ RANDALL A. LIPPS Randall A. Lipps President and Chief Executive Officer		/s/ ROBIN G. SEIM Robin G. Seim Chief Financial Officer and Vice President Finance, Administration and Manufacturing

"This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Omnicell, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing."

QuickLinks

Exhibit 32.1

CERTIFICATION