Common use of Establishment of Settlement Fund Clause in Contracts

Establishment of Settlement Fund. (a) A pool of funds (the "Provider Pool") shall be established solely to pay Settled Claims of the Hospital and all other providers which have entered into settlement agreements containing terms similar to those contained in this Agreement. The Provider Pool shall be established in a segregated cash collateral account prior to the Effective Date at a bank mutually acceptable to WellCare and Garfunkel Wild & Xxxxxx, P.C., as counsel to HANYS and NORMET, which bank shall have had no prior dealings with WellCare). The Provider Pool shall not be disbursed except in accordance with this Agreement (or other similar settlement agreement). The Provider Pool account shall contain irrevocable instructions concerning deposits and withdrawals from the Provider Pool, which shall be agreed to by Garfunkel, Wild & Xxxxxx, P.C., as counsel to HANYS and NORMET, and WellCare prior to the Effective Date, and which may be modified only with the prior written approval of both WellCare and Garfunkel, Wild & Xxxxxx, P.C., as counsel to HANYS and NORMET, or at the direction of SID. The Parties recognize and agree that deposits into and payments from the Provider Pool may be subject to audit or review by SID and other regulatory agencies having jurisdiction over WellCare. In addition, HANYS and/or NORMET or their agents or representatives, shall have the right to audit or review the Provider Pool, the cost of the first of which audit or review shall be borne by WellCare and the cost of any and all subsequent audits or reviews shall be borne by HANYS and/or NORMET. The results of such audit or review shall be distributed to all Parties. The Parties agree to cooperate with each other to the extent reasonably necessary to carry out the provisions of this Section 5(a). (b) The Provider Pool shall have an initial balance of not less than Ten Million Dollars ($10,000,000) by the Effective Date and shall be comprised of proceeds from the Xxxxx Transaction and/or GHI Transaction. In addition, the Provider Pool shall be supplemented by an amount equal to 80% of all proceeds from accounts receivables of WCNY which were or should have been recorded in accordance with generally accepted accounting principles (GAAP) as of April 30, 1999 (the "Accounts Receivable") to the extent such proceeds are collected by WellCare during the period commencing on May 1, 1999 and ending on the date that the Provider Pool is no longer in effect. HANYS and/or NORMET, or their agents or representatives, shall have the right, subject to compliance with applicable law, to examine and make copies of and abstracts from all books, records, computer media and documents in the possession of WellCare relating to the Accounts Receivable, subject to the confidentiality provisions contained in section 4(d). If the amounts deposited in the Provider Pool shall in the aggregate exceed Ten Million Dollars ($10,000,000) (the amount so exceeding Ten Million Dollars ($10,000,000) being the "Excess"), the Excess may be withdrawn from the Provider Pool and retained by WellCare for purposes of maintaining its statutory reserves in accordance with applicable law, but in no event shall WellCare be entitled to withdraw from the Provider Pool and retain more than Two Million Five Hundred Thousand Dollars ($2,500,000) for such purpose. Any Excess beyond that amount required for statutory reserves shall be retained in the Provider Pool. (c) In the event that the amount equal to thirty percent (30%) of the aggregate Settled Claims for all providers (excluding the five percent (5%) payments to providers described in Section 6(b)), is greater than Ten Million Dollars ($10,000,000), but does not exceed Twelve Million Dollars ($12,000,000), subject to Section 5(b), WellCare shall deposit additional funds into the Provider Pool to make up the shortfall, to the extent WellCare has sufficient funds and requisite regulatory authority to so act. In the event WellCare lacks sufficient funds and/or requisite regulatory authority to deposit such additional funds in the Provider Pool, Xx. Xxxxx will provide funds in such amount necessary to pay the thirty percent (30%) of the aggregate Settled Claims for all providers, not to exceed a total Provider Pool balance of Twelve Million Dollars ($12,000,000). (d) In the event the amount equal to thirty percent (30%) of the aggregate Settled Claims for all providers (excluding the five percent (5%) payments to providers described in Section 6(b)) is greater than Twelve Million Dollars ($12,000,000), then the amount required to be deposited into the Provider Pool in excess of Twelve Million Dollars ($12,000,000) shall be paid by WellCare; provided, however, that WellCare will be permitted to reduce pro rata the amount of the Hospital's remaining three (3) payments of five percent (5%) as set forth in Section 6(b) below (and all other providers with Settled Claims who may receive a similar payment) to the extent that WellCare's payments exceed Twelve Million Dollars ($12,000,000), and provided, however, in no case shall Hospital receive less than thirty percent (30%) of its Settled Claims under this Agreement. (e) In the event a balance remains in the Provider Pool as of six (6) months after the Effective Date, then such balance will be distributed pro rata to the Hospital and other providers which have entered into agreements to settle their Settled Claims, based upon the amounts of their respective Settled Claims. (f) Each health care provider that has Settled Claims shall have a security interest for the benefit of all health care providers with Settled Claims, which shall be a first priority lien with respect to the proceeds due to WellCare from the Xxxxx Transaction and/or GHI Transaction and all amounts in the Provider Pool, and a second priority lien on and security interest in the Accounts Receivable, except to the extent there is no other lien on the Accounts Receivable as of the date of this Agreement, the security interest shall be a first priority lien. It shall be the responsibility of such providers to timely and properly prepare and deliver the necessary documents for signature by all necessary parties, and thereafter cause the appropriate filings to be made to perfect such security interests, including, without limitation, a financing statement in the form approved by Garfunkel, Wild & Xxxxxx, P.

Establishment of Settlement Fund. (a) A pool of funds (the "Provider Pool") shall be established solely to pay Settled Claims of the Hospital Providers and all other providers which have entered into settlement agreements containing terms similar to those contained in this Agreement. The Provider Pool shall be established in a segregated cash collateral account prior to the Effective Date at a bank mutually acceptable to WellCare and WellCare, Garfunkel Wild & Xxxxxx, P.C., as counsel to HANYS and NORMET, and MSSNY, which approval shall not be unreasonably withheld, which bank shall have had no prior dealings with WellCare). The Provider Pool shall not be disbursed except in accordance with this Agreement (or other similar settlement agreement). The Provider Pool account shall contain irrevocable instructions concerning deposits and withdrawals from the Provider Pool, which shall be agreed to by Garfunkel, Wild & Xxxxxx, P.C., as counsel to HANYS and NORMET, and WellCare WellCare, subject to notification of MSSNY, prior to the Effective Date, and which may be modified only with the prior written approval of both WellCare and Garfunkel, Wild & Xxxxxx, P.C., as counsel to HANYS and NORMET, subject to notification of MSSNY, or at the direction of SID. The Parties recognize and agree that deposits into and payments from the Provider Pool may be subject to audit or review by SID and other regulatory agencies having jurisdiction over WellCare. In addition, The Parties understand that HANYS and/or NORMET or their agents or representatives, shall have the right to audit or review the Provider Pool, the cost of the first of which audit or review shall be borne by WellCare and the cost results of any and all subsequent audits or reviews shall be borne by HANYS and/or NORMET. The results of such audit or review shall be distributed to all Parties. The Parties agree to cooperate with each other to the extent reasonably necessary to carry out the provisions of this Section 5(a). (b) The Provider Pool shall have an initial balance of not less than Ten Million Dollars ($10,000,000) by the Effective Date and shall be comprised of proceeds from the Xxxxx Transaction and/or GHI Transaction. In addition, the Provider Pool shall be supplemented by an amount equal to 80% of all proceeds from accounts receivables of WCNY which were or should have been recorded in accordance with generally accepted accounting principles (GAAP) as of April 30, 1999 (the "Accounts Receivable") to the extent such proceeds are collected by WellCare during the period commencing on May 1, 1999 and ending on the date that the Provider Pool is no longer in effect. HANYS and/or NORMET, or their agents or representatives, shall have the right, subject to compliance with applicable law, to examine and make copies of and abstracts from all books, records, computer media and documents in the possession of WellCare relating to the Accounts Receivable, subject to the confidentiality provisions contained in section 4(d). If the amounts deposited in the Provider Pool shall in the aggregate exceed Ten Million Dollars ($10,000,000) (the amount so exceeding Ten Million Dollars ($10,000,000) being the "Excess"), the Excess may be withdrawn from the Provider Pool and retained by WellCare for purposes of maintaining its statutory reserves in accordance with applicable law, but in no event shall WellCare be entitled to withdraw from the Provider Pool and retain more than Two Million Five Hundred Thousand Dollars ($2,500,000) for such purpose. Any Excess beyond that amount required for statutory reserves shall be retained in the Provider Pool. (c) In the event that the amount equal to thirty percent (30%) of the aggregate Settled Claims for all providers (excluding the five percent (5%) payments to providers described in Section 6(b)), is greater than Ten Million Dollars ($10,000,000), but does not exceed Twelve Million Dollars ($12,000,000), subject to Section 5(b), WellCare shall deposit additional funds into the Provider Pool to make up the shortfall, to the extent WellCare has sufficient funds and requisite regulatory authority to so act. In the event WellCare lacks sufficient funds and/or requisite regulatory authority to deposit such additional funds in the Provider Pool, Xx. Xxxxx will provide funds in such amount necessary to pay the thirty percent (30%) of the aggregate Settled Claims for all providers, not to exceed a total Provider Pool balance of Twelve Million Dollars ($12,000,000). (d) In the event the amount equal to thirty percent (30%) of the aggregate Settled Claims for all providers (excluding the five percent (5%) payments to providers described in Section 6(b)) is greater than Twelve Million Dollars ($12,000,000), then the amount required to be deposited into the Provider Pool in excess of Twelve Million Dollars ($12,000,000) shall be paid by WellCare; provided, however, that WellCare will be permitted to reduce pro rata the amount of the HospitalProvider's remaining three (3) payments of five percent (5%) as set forth in Section 6(b) below (and all other providers with Settled Claims who may receive a similar payment) to the extent that WellCare's payments exceed Twelve Million Dollars ($12,000,000), and provided, however, in no case shall Hospital Provider receive less than thirty percent (30%) of its Settled Claims under this Agreement. (e) In the event a balance remains in the Provider Pool as of six (6) months after the Effective Date, then such balance will be distributed pro rata to the Hospital Provider and other providers which have entered into agreements to settle their Settled Claims, based upon the amounts of their respective Settled Claims. (f) Each health care provider that has Settled Claims shall have a security interest for the benefit of all health care providers with Settled Claims, which shall be a first priority lien with respect to the proceeds due to WellCare from the Xxxxx Transaction and/or GHI Transaction and all amounts in the Provider Pool, and a second priority lien on and security interest in the Accounts Receivable, except to the extent there is no other lien on the Accounts Receivable as of the date of this Agreement, the security interest shall be a first priority lien. It shall be the responsibility of such providers to timely and properly prepare and deliver the necessary documents for signature by all necessary parties, and thereafter cause the appropriate filings to be made to perfect such security interests, including, without limitation, a financing statement in the form approved by Garfunkel, Wild & Xxxxxx, P.the Parties. The Parties shall cooperate with each other in the preparation of any and all documents necessary to give effect to such security interest and such other terms and obligations hereunder. (g) Nothing contained herein shall prohibit or restrict WellCare from settling or paying claims of any nature from sources of funds exclusive of those deposited (or required to be deposited) in the Provider Pool.