EXHIBIT 10.84
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (the "Settlement Agreement"), is made and
entered into as of the 17th day of October 2002, by and among CORAM HEALTHCARE
CORPORATION, a Delaware corporation ("CHC"), CURAFLEX HEALTH SERVICES, INC., a
Delaware corporation ("CURAFLEX") (CHC and Curaflex shall be referred to
collectively as "CORAM") and CURASCRIPT PHARMACY, INC., a Delaware corporation
("CPI") and CURASCRIPT PBM SERVICES, INC., a Delaware corporation ("PBM") (CPI
and PBM shall be referred to collectively as "CURASCRIPT").
RECITALS
X. XXXXX and CURASCRIPT entered into an Asset Purchase Agreement By and
Between CuraFlex Health Services, Inc., Coram Healthcare Corporation, As Seller
Guarantor, solely for the purposes of Sections 7.9 and 11.9(a), CuraScript
Pharmacy, Inc. CuraScript PBM Services, Inc. and GTCR Fund VI, L.P. as Buyer's
Guarantor, solely for the purposes of Section 14.3 (the "Asset Purchase
Agreement"), dated June 9, 2000, whereby CURASCRIPT purchased certain assets
from CORAM.
X. XXXXX and CURASCRIPT also entered into a Subcontracting Agreement by
and among Coram Healthcare Corporation, Coram, Inc., Curaflex Health Services,
Inc. on the one hand, and CuraScript Pharmacy, Inc. and CuraScript PBM Services,
Inc. on the other hand, dated July 31, 2000 (the, "Subcontracting Agreement").
The Subcontracting Agreement contained provisions that required CORAM to
promptly forward to CURASCRIPT any payments made to CURASCRIPT by third parties
that are received by CORAM. As of the date hereof, CORAM'S obligations to remit
such third party payments to CURASCRIPT remain in effect.
C. Following the closing of that transaction described in the Asset
Purchase Agreement on July 31, 2001, CURASCRIPT provided a mail order
prescription drug benefit program to CORAM employees (the "Prescription Benefit
Services") pursuant to the Pharmacy Services Agreement by and between CuraFlex
Health Services, Inc. d/b/a Coram Prescription Services and Coram Healthcare
Corporation, effective as of February 1, 2000, and subsequently assigned to
CuraScript PBM Services, Inc. on June 30, 2000 (the "Pharmacy Services
Agreement"). The Pharmacy Services Agreement has since been rejected by CORAM
through the Bankruptcy Case (as defined in Section 10 below).
D. A dispute has arisen between CORAM and CURASCRIPT relating to the
amounts owed to CURASCRIPT by CORAM in connection with CURASCRIPT'S provision of
the Prescription Benefit Services to Coram pursuant to the Pharmacy Services
Agreement.
E. An additional dispute has arisen between CORAM and CURASCRIPT
relating to the amounts owed to CURASCRIPT by CORAM for third party payments
received by CORAM on behalf of CURASCRIPT pursuant to the Subcontracting
Agreement.
F. The parties have agreed that it is in their mutual best interest to
settle such disputes on the terms and subject to the conditions set forth
herein, without resort to litigation.
NOW, THEREFORE, in consideration of the recitals, the mutual covenants,
sums of money and benefits set forth herein, the parties agree as follows:
1. Settlement Payment. As consideration for the release of the
CURASCRIPT claims described above, CORAM shall pay CURASCRIPT the total amount
of two hundred fifty thousand dollars ($250,000.00) (the "Settlement Amount").
The Settlement Amount shall be paid in two (2) equal payments each in the amount
of $125,000 (the "Settlement Payments"). The first Settlement Payment shall be
paid within ten (10) calendar days following the approval of this Settlement
Agreement by the Bankruptcy Court (as defined in Section 10 below) and the
second Settlement Payment shall be paid sixty (60) days thereafter. The
Settlement Payments shall be paid by check, sent via overnight courier to:
CuraScript Pharmacy, Inc.
0000 XXX Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxx
2. Agreements of the Parties. CORAM and CURASCRIPT acknowledge and
agree to the following terms and conditions:
(a) Upon CURASCRIPT'S receipt of the Settlement Amount, CORAM shall
not be liable for any additional amounts due to CURASCRIPT, for any activities
prior to September 1, 2002, pursuant to the Pharmacy Services Agreement. In
addition, with the exception of the payments received by CORAM associated with
the claims described on EXHIBIT "A", which is attached hereto, upon CURASCRIPT'S
receipt of the Settlement Amount, CORAM shall not be liable for any amounts due
to CURASCRIPT for any activities prior to June 1, 2002 pursuant to the
Subcontracting Agreement. CORAM shall remain obligated to promptly remit to
CURASCRIPT any amounts it receives from any third party for the claims described
on EXHIBIT "A" as well as any related explanation of benefits or remittance
advice documents. CURASCRIPT acknowledges that (1) the amounts listed on Exhibit
A are for reference only and that the third party payors may reimburse a smaller
amount for each claim listed and declare the claim paid in full; and (2) CORAM
makes no guarantees with respect to payment of the amounts listed on Exhibit A,
or any portions thereof, nor is CORAM under any obligation to undertake any
collection efforts (including, without limitation, claims resubmission or
appeals) with respect to the Exhibit A claims.
(b) CORAM shall continue to make timely payments of CURASCRIPT'S
invoices for supplies provided in connection with CTI Network, Inc.
("CTI")-Amgen Study Protocol #990757. Such payments will be made in accordance
with the terms of the invoices and any related agreements by and between CTI and
CURASCRIPT.
(c) Beginning as of September 1, 2002, any third party payment
amounts, other than the amounts described on EXHIBIT "A", received by CORAM that
are deemed by CORAM to have been paid to CORAM in error, including, without
limitation, those payments that may have been intended for CURASCRIPT, will be
refunded to the respective third party payors in keeping with CORAM'S normal
business policies and practices. CORAM and CURASCRIPT agree to use reasonable
business efforts to attempt to resolve these types of payment issues.
Notwithstanding the foregoing, CORAM will have no liability to reimburse
CURASCRIPT for any third party payments received by CORAM on or after September
1, 2002, which were intended for CURASCRIPT.
(d) CORAM and CURASCRIPT hereby agree there exists no formal or
informal agreement between CORAM and CURASCRIPT for CORAM to provide
subcontracted "STAT" dosing, back-up pharmacy, nursing or other clinical
services to CURASCRIPT patients. If CURASCRIPT makes referrals to CORAM for the
provision of such services, it is with the intent that CORAM makes an
independent decision to provide such services on a case-by-case basis, pursuant
to CORAM'S arrangement with the applicable third party payor.
3. Mutual Release. Contingent upon CURASCRIPT'S receipt of the
Settlement Amount as described herein, CURASCRIPT and CORAM as well as their
respective subsidiaries, affiliates, divisions, guarantors, successors and
assigns and their current and former officers, directors, shareholders,
employees, attorneys and agents, hereby release and forever discharge each other
and their respective subsidiaries, affiliates, divisions, successors and assigns
and their current and former officers, directors, shareholders, employees,
attorneys and agents from any and all actions, causes of action, suits, sums of
money, damages, claims, expenses and demands whatsoever in law and equity,
whether known or unknown, which CORAM or CURASCRIPT ever had or now have, by
reason of or in any way connected with Pharmacy Services Agreement and the
Subcontracting Agreement.
2
4. Representations and Warranties.
(a) Each party represents and warrants that it has carefully read
this Settlement Agreement, the contents thereof are known to it, and that this
Agreement is executed voluntarily and without duress or undue influence on their
part.
(b) Each of the parties hereto represents and warrants that the
persons and entities executing this Settlement Agreement have the legal
authority to do so.
5. Acknowledgments by the Parties.
(a) Contingent upon receipt of the Settlement Amount, CURASCRIPT
acknowledges and agrees that it has knowingly relinquished, waived, and released
any and all remedies that might otherwise be available to it for the matters or
transactions that are the subject of this Settlement Agreement.
(b) It is further understood and agreed that this Settlement
Agreement is a compromise of disputed claims, and that the exchange of
consideration contemplated hereby is not to be construed as an admission of
liability on the part of the parties hereby released.
6. Counterparts. This Settlement Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
when taken together shall constitute one and the same instrument.
7. Entire Agreement. This Settlement Agreement contains the entire
agreement among the parties with respect to the subject matter of this
Settlement Agreement and supersedes any and all prior agreements, arrangements,
representations, or understandings between the parties relating to the subject
matter herein or the transactions described in this Settlement Agreement. This
Settlement Agreement may only be amended in writing by an instrument executed by
both parties.
8. No Assignment. The parties mutually represent and warrant that there
has been no assignment or transfer of their respective interest(s) in any of the
claims released pursuant to this Settlement Agreement.
9. Applicable Law. This Settlement Agreement shall be construed in
accordance with and all disputes hereunder shall be governed by the laws of the
State of Colorado, disregarding such State's conflicts of law principles.
10. Binding on Parties. This Settlement Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns; provided, however, this Settlement Agreement shall be null and void in
the event that it is not approved by the United States Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court"), in the pending CORAM case,
Bankruptcy Petition #00-03299-MFW (the "Bankruptcy Case") or the CORAM Chapter
11 Trustee appointed in the Bankruptcy Case. Coram agrees that it shall use
reasonable business efforts to obtain approval of this Settlement Agreement by
the Bankruptcy Court, the Coram Chapter 11 Trustee's and an other court or
organization that must approve this Settlement Agreement. In the event this
Settlement Agreement is not approved by the Bankruptcy Court, the CORAM Chapter
11 Trustee or any other court or organization that must approve this Settlement
Agreement, each party shall be entitled to pursue any available claims, remedies
or causes of action, at law or in equity, against the other party as if this
Settlement Agreement did not exist.
11. Arbitration; Attorneys' Fees. Unless prohibited by the U.S.
Bankruptcy Court with jurisdiction over the pending Coram Bankruptcy case
described above, any dispute or controversy arising under or in connection with
this Settlement Agreement shall be resolved by binding arbitration conducted
under the rules of the American Arbitration Association applicable to contract
disputes, the outcome of
3
which shall be enforceable in a court of competent jurisdiction. Such
arbitration shall take place in Denver, Colorado. In the event any dispute or
controversy arises between the parties under or in connection with this
Settlement Agreement, the prevailing party shall be entitled to an award of
reasonable attorney fees and costs incurred as a consequence of such dispute.
12. Construction of Agreement. This Settlement Agreement shall not be
construed against the party preparing the same and shall be construed without
regard to the identity of the person who drafted such and shall be construed as
if all parties had jointly prepared this Settlement Agreement.
14. Representation by Counsel. The parties acknowledge that they have
been represented by counsel of their own choice in the negotiations leading up
to and in the execution of this Settlement Agreement and that they have read
this Settlement Agreement.
IN WITNESS WHEREOF, the undersigned have made and executed this
Settlement Agreement, effective as of the date first written above, through a
duly authorized officer or representative.
CORAM CURASCRIPT
By: /s/ XXXXX XXXXXXXX By: /s/ XXXXXX XXXXXX
-------------------------------- -------------------------------
Name: Xxxxx Xxxxxxxx Name: Xxxxxx Xxxxxx
------------------------------ -----------------------------
Title: Executive V.P. and General Title: Chief Operating Officer
Counsel ----------------------------
-----------------------------
Date: October 17, 2002 Date: October 23, 2002
------------------------------ -----------------------------
4
EXHIBIT A
HCFA HANDLING
DOS PATIENT RN LAST NAME FIRST NAME SYSADM_PLAN NAME RESP_USER REMIT_RN CODE TOTAL AR
-------------------------------------------------------------------------------------------------------------------------------
3/2/01 18013165 EMPIRE BCBS OF NY (PLNVW) 4 1 89.38
11/6/00 16478278 BCBS OF S CAROLINA 8 1 658.73
2/8/01 16478278 BCBS OF S CAROLINA 8 1 2,719.35
11/15/00 16478278 BCBS OF S CAROLINA 8 1 2,592.36
11/15/00 16478278 BCBS OF S CAROLINA 8 1 329.36
12/12/00 16478278 BCBS OF S CAROLINA 8 1 2,719.35
1/11/01 16478278 BCBS OF S CAROLINA 8 1 2,719.35
12/18/00 17609563 BCBS-HMO BLUE OF TEXAS 2 1 700.25
1/23/01 17609563 BCBS-HMO BLUE OF TEXAS 2 1 700.25
5/15/01 17835863 BCBS-HMO BLUE OF TEXAS 2 1 1,443.98
7/16/01 17835863 BCBS-HMO BLUE OF TEXAS 2 1 1,501.72
5/18/01 17997663 EMPIRE BCBS OF NY (PLNVW) 4 1 58.19
6/15/01 17997663 EMPIRE BCBS OF NY (PLNVW) 4 1 58.19
7/16/01 17997663 EMPIRE BCBS OF NY (PLNVW) 4 1 1,662.50
8/12/02 17997663 EMPIRE BCBS OF NY (PLNVW) 4 1 3,368.20
10/14/02 17997663 EMPIRE BCBS OF NY (PLNVW) 4 1 2,199.11
5/11/00 16053300 BC BS OF SOUTH CAROLINA 8 1 88.16
1/11/01 17740763 EMPIRE BCBS OF NY (PLNVW) 4 1 980.72
4/25/01 17740763 EMPIRE BCBS OF NY (PLNVW) 4 1 980.72
8/25/00 15981600 HEALTHSOURCE SC 8 1 712.30
3/27/01 18521363 BCBS-HMO BLUE OF TEXAS 2 1 360.38
5/14/01 18521363 BCBS-HMO BLUE OF TEXAS 2 1 318.39
6/13/01 18521363 BCBS-HMO BLUE OF TEXAS 2 1 1,061.28
7/9/01 18521363 BCBS-HMO BLUE OF TEXAS 2 1 1,061.28
8/7/01 18521363 BCBS-HMO BLUE OF TEXAS 2 1 1,061.28
4/12/01 14720401 EMPIRE BC OF NY (PLNVW) 4 1 7,541.10
