Exhibit 10.1
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release (the "Agreement") is made and
entered into as of the 16th day of May, 2001, by and between CARECENTRIC, INC.,
a Delaware corporation formerly known as ▇▇▇▇▇▇▇ Central Holdings, Inc.
("CareCentric"), and the former shareholders and noteholders of CareCentric
Solutions, Inc. identified in Exhibit 1 hereto, by and through ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, as their representative and agent (the "CSI Parties").
W I T N E S S E T H:
WHEREAS, CareCentric, ▇▇▇▇▇▇▇ Acquisition Corporation and CareCentric
Solutions, Inc. ("CSI") entered into an Agreement and Plan of Merger dated July
12, 1999 (the "Merger Agreement") pursuant to which CareCentric acquired the
issued and outstanding capital stock of CSI on August 12, 1999;
WHEREAS, pursuant to the Merger Agreement and an Indemnity Escrow and Stock
Pledge Agreement dated August 12, 1999 (the "Escrow Agreement") by and among
CareCentric, the CSI Parties and ▇▇▇▇▇▇▇▇, as representative of the CSI Parties,
CareCentric deposited into escrow shares of its Series A Preferred Stock which
were converted into 150,740 shares of its common stock ("Escrow Shares") as sole
recourse for indemnification claims and expenses overages claims it may have
under the Merger Agreement against the CSI Parties;
WHEREAS, the Merger Agreement also required CareCentric to issue additional
shares of its common stock if its per share closing price for the fourth quarter
of 2000 was less than a target stock price specified in the Merger Agreement,
and because the target stock price was not reached during that period,
CareCentric caused 593,688 additional shares of its common stock to be issued to
the CSI Parties on March 20, 2001;
WHEREAS, CareCentric has asserted various indemnification claims and
expenses overages claims against the CSI Parties, covering all the Escrow Shares
and 13,216 additional shares of common stock that otherwise would be issuable
under the Merger Agreement;
WHEREAS, the CSI Parties have disputed and contested all the claims
asserted by CareCentric;
WHEREAS, representatives of the CSI Parties and representatives of
CareCentric have negotiated a settlement of the disputes arising under the
Merger Agreement on the terms and conditions set forth below;
WHEREAS, this Agreement is entered into solely for the purpose of avoiding
time-consuming and expensive arbitration or litigation between the parties and
does not and shall not constitute an admission that any conduct of either of the
parties was wrongful, negligent or violative of any contractual obligation,
common law or of any corporate law or fiduciary obligations, and the existence
of any liability on any such ground is expressly denied by the parties;
WHEREAS, the parties hereto desire to settle all past and present
differences, disputes, claims, debts, assertions or obligations among and
between them, known or unknown, suspected or unsuspected under the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of the mutual obligations set forth herein
and the recitals set forth above, the parties hereto hereby agree as follows:
1. Release of CareCentric and Covenant Not to ▇▇▇
The CSI Parties for themselves and their respective heirs and assigns,
hereby release, acquit, covenant not to ▇▇▇, and forever discharge CareCentric,
its subsidiaries, their respective successors and assigns, and their
representatives, servants, agents, attorneys, employees, officers and directors
(collectively, the "CareCentric Released Parties"), from any and all claims,
demands, indebtedness, agreements, promises, causes of action, obligations,
damages and liabilities of any nature whatsoever, in law or in equity, in
contract, tort, by statute or otherwise, whether or not known, suspected, or
claimed, that they ever had, have claimed to have, now have, or claims to have
whether known or unknown from the beginning of time to the date of this
Agreement, against any of the CareCentric Released Parties by reason of any
matter, cause, thing, act or omission of any such released party whatsoever,
including but not limited to claims arising out of or relating to the Merger
Agreement; provided, however, that nothing contained herein is intended to nor
shall be deemed to release the CareCentric Released Parties from performing
their obligations under Section 4.1 of the Merger Agreement or as otherwise
provided under this Agreement.
2. Release of ▇▇▇▇▇▇▇▇ and Covenant Not to ▇▇▇
CareCentric hereby releases, acquits, covenants not to ▇▇▇, and forever
discharges the CSI Parties, their subsidiaries, their respective successors and
assigns, and their representatives, servants, agents, attorneys, employees,
officers and directors (collectively, the "CSI Released Parties") from any and
all claims, demands, indebtedness, agreements, promises, causes of action,
obligations, damages and liabilities of any nature whatsoever, in law or in
equity, in contract, tort, by statute or otherwise, whether or not known,
suspected, or claimed, that it ever had, has claimed to have, now has, or claims
to have whether known or unknown from the beginning of time to the date of this
Agreement, against the CSI Released Parties by reason of any matter, cause,
thing, act or omission of such released party whatsoever, including but not
limited to claims arising out of or relating to the Merger Agreement; provided,
however, that nothing contained herein is intended to nor shall be deemed to
release the CSI Released Parties from performing their obligations under this
Agreement.
3. Other Consideration; Cancellation of Remaining Escrow Shares
(a) As soon as practicable after the execution of this Agreement,
CareCentric shall cause 88,586 shares (the "Shares") of common stock of
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CareCentric to be released from escrow under the Escrow Agreement and
distributed to the CSI Parties provided in Schedule A attached hereto. The
remaining 62,154 shares of CareCentric common stock being held in escrow will be
cancelled. The parties agree that no further Additional Shares (as defined in
the Merger Agreement) are required to be issued by CareCentric.
(b) CareCentric will take all necessary actions, including the issuance of
opinion letters, as necessary, to ensure that the Shares will be freely
transferable by the CSI Parties pursuant to Rule 144(k) promulgated under the
Securities Act of 1933, as amended.
(c) CareCentric will (i) use its best efforts to ensure that it shall
remain eligible to register shares of CareCentric stock held by the CSI Parties
on Form S-3 under the Securities Act of 1933, as amended, or any sucessor form
thereof, (ii) use its best efforts to list such shares on the NASDAQ SmallCap
Market to the extent not already listed, and (iii) use its commercially
reasonable efforts to ensure that it shall remain eligible to maintain approval
for trading of such shares on the NASDAQ SmallCap Market.
4. Complete Release; Survival Provisions
Except for the continuing obligations of the CareCentric Released Parties
under Section 4.1 of the Merger Agreement and any continuing obligations of the
CareCentric Released Parties as provided under this Agreement, it is the
specific intent and purpose of this Agreement to be a full, final and complete,
remise, release, discharge, compromise, settlement, accord and satisfaction of
all claims released hereunder, including legal fees incurred in connection
therewith, and CareCentric and the CSI Parties do hereby specifically waive any
claim or right to assert that any cause of action or alleged cause of action or
claim or demand relating to any such dispute has, through oversight or error, or
intentionally or unintentionally, been omitted from this Settlement Agreement
and Mutual Release.
5. Governing Law
The terms of this Agreement shall be governed and construed according to
the laws of the State of Georgia.
6. Arbitration
The parties hereby agree that all disputes relating to the subject matter
of this Agreement, including but not limited to the interpretation or
application of any of the terms hereof, shall be resolved by arbitration to be
conducted in Atlanta, Georgia under the auspices, and pursuant to the rules, of
the American Arbitration Association.
7. Modification
No provisions of this Agreement may be changed, altered, modified or waived
except in a writing signed by all parties to this Agreement.
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8. No Parol Representations or Agreements
This Agreement constitutes the entire agreement between the parties
relating to settlement of all claims and controversies between the parties. This
Agreement supersedes any and all prior or contemporaneous agreements,
representations, promises or inducements of any kind relating to settlement of
the claims and controversies between the parties. Each party hereto individually
acknowledges that no agreement, representation, promise or inducement relating
to settlement of the claims and controversies between the parties has been made
or given other than as specifically set forth in this Agreement, and that none
of them has entered into this Agreement in reliance upon any agreement,
representation, promise or inducement not set forth herein.
9. Understanding and Authority
Each of the parties to this Agreement acknowledges and represents that said
party has read this Agreement in full and understands and voluntarily consents
and agrees to each and every provision contained herein. Each party acknowledges
that such party has had a full and unlimited opportunity to consult with his or
its own counsel prior to executing this Agreement. Each party acknowledges that
▇▇▇▇▇▇▇▇ has authority to execute this Agreement on behalf of the CSI Parties
pursuant to the terms of the Merger Agreement. CareCentric has duly authorized
the execution and delivery of this Agreement and the performance by it
hereunder.
10. Multiple Counterparts
This Agreement may be executed in multiple counterparts and shall be
effective when all parties have executed identical copies thereof, provided,
however, that each party shall cooperate in providing the other with fully
executed originals.
11. Scope of Applicability
This Agreement and the covenants, representations, warranties and releases
contained herein shall inure to the benefit of and shall be binding upon the
parties, and their respective successors, assigns, heirs, executors and
administrators.
12. Severability
In the event that any paragraph or provision of this Agreement shall be
determined by any court to be unenforceable for any reason, then only such
paragraph or provision shall be affected, and the remaining terms and conditions
hereof shall remain binding and enforceable.
13. Preparation of Agreement
This Agreement was prepared by all signatories hereto and in case of
ambiguity shall not be construed more strongly against one than against the
other.
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14. Headings
The section and other headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning and
interpretation of this Agreement.
15. Time of Essence
Time is of the essence of this Settlement Agreement and Mutual Release.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement (or have
caused this Agreement to be duly executed) as of the date first set forth above.
Signed, sealed and delivered
in the presence of:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- CARECENTRIC, INC.
Unofficial Witness
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ---------------------------------------
---------------------------- R. ▇▇▇▇▇ ▇▇▇▇▇,
Notary Public President and Chief Executive Officer
My Commission Expires:
August 13, 2001
-----------------------------
(Affix Notarial Seal)
Signed, sealed and delivered
in the presence of:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Unofficial Witness
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. Wuchenick ---------------------------------------
---------------------------- ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Notary Public (as representative of the CSI Parties)
My Commission Expires:
July 3, 2001
-----------------------------
(Affix Notarial Seal)
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EXHIBIT 1
American Healthcare Fund II, L.P.
Domain Partners III, L.P.
DP III Associates, L.P.
3i Bioscience Investment Trust plc
Alliance Technology Ventures, L.P.
ATV/GP Parallel Fund, L.P.
ATV/MFJ Parallel Fund, L.P.
Landmark Equity Partners V, L.P.
Landmark Secondary Partners, L.P.
Technology Funding Medical Partners I, L.P.
Technology Funding Partners III, L.P.
Technology Funding Venture Partners V, an aggressive Growth Fund, L.P.
Alpha Capital Fund II, L.P.
Axiom Venture Partners, Limited Partnership
SCHEDULE A
A B C
Name and taxpayer identification number Address # of Shares for Certificate*
======================================================= ===================================== ================================
1. American Healthcare Fund II, L.P. c/o ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 10,978
▇▇-▇▇▇▇▇▇▇ Sequel Venture Partners
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Domain Partners III, L.P. c/o ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 22,116
▇▇-▇▇▇▇▇▇▇ Domain Associates, L.O.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3. DP III Associates, L.P. c/o ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 713
▇▇-▇▇▇▇▇▇▇ Domain Associates, L.O.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇
4. 3i Bioscience Investment Trust plc (Foreign c/o ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ 7,943
entity) 3i Asset Management Ltd.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
5. Alliance Technology Ventures, L.P. c/o Alliance Technology 7,659
▇▇-▇▇▇▇▇▇▇ Ventures
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Connor Seabrook
6. ATV/GP Parallel Fund, L.P. c/o Alliance Technology 2,152
▇▇-▇▇▇▇▇▇▇ Ventures
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Connor Seabrook
7. ATV/MFJ Parallel Fund, L.P. c/o Alliance Technology 602
▇▇-▇▇▇▇▇▇▇ Ventures
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Connor Seabrook
A-1
A B C
Name and taxpayer identification number Address # of Shares for Certificate*
======================================================= ===================================== ================================
8. Landmark Equity Partners V, L.P. c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 3,311
▇▇-▇▇▇▇▇▇▇ Landmark Partners, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
9. Landmark Secondary Partners, L.P. c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 8,294
▇▇-▇▇▇▇▇▇▇ Landmark Partners, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
10. Technology Funding Medical Partners, I, L.P. c/o ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 929
▇▇-▇▇▇▇▇▇▇ Technology Funding, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
11. Technology Funding Partners III, L.P. c/o ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 3,747
▇▇-▇▇▇▇▇▇▇ Technology Funding, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12. Technology Funding Venture Partners V, An c/o ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 2,023
Aggressive Growth Fund, L.P. Technology Funding, Inc.
▇▇-▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
13. Alpha Capital Fund II, L.P. Alpha Capital Partners 5,885
▇▇-▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, Controller
14. Axiom Venture Partners, Limited Partnership c/o ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ 12,234
▇▇-▇▇▇▇▇▇▇ Axiom Venture Partners
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
A-2
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