Exhibit 10.1
SETTLEMENT AGREEMENT AND GENERAL RELEASE
This settlement agreement and release (the "Agreement') is entered into
this 29th day of September, 2004 among the following:
"Horizon" Horizon Blue Cross Blue Shield of New Jersey ("HBCBS")
and its affiliates, parents, subsidiaries, successors
and predecessors, and all of its past and current
employees, agents, attorneys, officers and directors
(collectively, "HBCBS-Related Entities"), except in
each case to the extent that any such person's status
as a HBCBS-Related Entity arises directly or
indirectly from any affiliation between HBCBS and
CareAdvantage, Inc.;
"CareAdvantage" CareAdvantage, Inc. ("CAI"), its affiliates,
parents, subsidiaries, successors, and predecessors,
and all of its past and current employees, agents,
attorneys, officers and directors, (collectively
"CAI-Related Entities"), except in each case to the
extent that any such person's status as a CAI-Related
Entity arises directly or indirectly from any
affiliation between HBCBS and CAI, together with the
following persons in their individual capacities and
as officers, directors and holders of equity or other
interests in CAI or any CAI-Related entity: Xxxxxx
Xxxxxx, Xxxxx Xxxxx and Xxxxx XxXxxxxxx.
Horizon and CareAdvantage may be referred to herein singly as "a Party" or
jointly as "the Parties."
WHEREAS, CAI instituted an action in the New Jersey Superior Court,
Middlesex County, captioned CareAdvantage, Inc. v. Horizon Blue Cross Blue
Shield of New Jersey, Docket No. MID-L-1690-03 (the "Action");
WHEREAS, the Parties have agreed to settle and resolve the claims described
herein pursuant to the terms of the Agreement;
WHEREAS, the Parties having weighed the risks, burdens and costs of
continued litigation, and without making or implying any admissions or
concessions as to their relative positions in the Action or any alleged
liability or wrongdoing or breach of contract, have determined that full, final
and amicable settlement and resolution of their differences on the
terms and conditions set forth herein is in the best interests of all parties;
WHEREAS, CareAdvantage agrees that it will not seek anything further
including but not limited to any other payment from Horizon;
NOW, THEREFORE, in consideration of the mutual promises set forth below,
the parties agree and intend to be legally bound as follows:
1. Cash Payment. HBSBC agrees to pay to CAI the sum of Five Hundred
Thousand Dollars ($500,000.00) within five (5) days of receiving fully executed
copies of this Agreement and the Waiver and Consent executed by CW Ventures II,
L.P.
2. Stock Transfer. Horizon agrees to assign and transfer to CAI all right,
title and interest in and to all 53,394,820 shares of common stock, par value
$0.001 per share, of CAI (the "Stock"), such shares representing all of the
outstanding shares of common stock of CAI owned by Horizon or any affiliated
entity, by delivering fully-endorsed certificates for all of the Stock to CAI
within five (5) days of receiving fully executed copies of this Agreement and
the Waiver and Consent executed by CW Ventures II, L.P.
3. Resignation of HBCBS-Nominated CAI Board Members. HBCBS shall procure
and deliver to CAI the resignations of the HBCBS-nominated members of the CAI
Board of Directors, Xxxxxxx X. Xxxxxxxx and Xxxxxxxxx X. Xxxxxx, within five (5)
days of receiving fully executed copies of this Agreement and the Waiver and
Consent executed by CW Ventures II, L.P.
4. Mutual Release and Waiver of Claims. For and in consideration of the
obligations assumed by the Parties in this Agreement, the Parties hereby
release, relinquish and forever discharge the Parties, their affiliates,
parents, subsidiaries, successors, and predecessors, and all of their past and
current employees, agents, attorneys, officers and directors, as well as any
other persons, from any and all claims, liens, demands, obligations, actions,
causes of actions, counts, damages, liabilities, losses, fees, costs or
expenses, of any nature whatsoever, known or unknown, ascertained or
unascertained, suspected or unsuspected, existing or claimed to exist, from the
beginning of time to the date of the signing of this Agreement, including, but
not limited to, all claims and/or potential causes of action arising out of,
asserted in, or in any way related to the Action. This includes any claims or
potential causes of action from the beginning of time to the date of the signing
of this Agreement that may or may not be deemed to be encompassed by the entire
controversy doctrine. Notwithstanding anything herein to the contrary, this
Release shall not apply to any claims or potential causes of action related to
health insurance coverage or other employee benefits provided by Horizon to
CareAdvantage employees. CAI acknowledges and agrees that the payment made to it
represents settlement of and extinguishes all of CAI's claims against Horizon,
including, but not limited to, compensatory and punitive damages, and any claim
for costs or attorney's fees. Nothing herein shall be deemed to limit any
party's right to seek enforcement of the terms of this Agreement.
5. Contingent Reimbursement of HBCBS-Nominated CAI Board Members'
Attorneys' Fees. To the extent that an HBCBS-nominated CAI Board Member is not
covered by CAI's Directors and Officers liability insurance coverage for his or
her acts and omissions as a member of the CAI Board, and only in the event that
(i) a claim, or suit or proceeding is brought as a shareholder derivative action
or otherwise, against CAI or any HBCBS-nominated CAI Board Member based on,
related to or arising out of any claim, alleging that any HBCBS-nominated CAI
Board Member in any manner whatsoever breached his or her fiduciary
responsibilities as a director of the CAI Board and (ii) the HBCBS-nominated CAI
Board Member is a prevailing party in such a claim, suit or proceeding by
obtaining a judgment, order or ruling that his/her actions as a director of the
CAI Board were proper, then CAI agrees to reimburse such HBCBS-nominated CAI
Board Member for the reasonable attorneys' fees incurred by the HBCBS-nominated
CAI Board Member in defending against such claim, suit or proceeding.
6. Binding Effect. This Agreement and the releases contained herein are
binding upon and shall inure to the benefit of anyone who succeeds to the
rights, interests or responsibilities of the Parties.
7. Confidentiality of Agreement. To the extent provided by law, the Parties
shall not directly or indirectly disseminate the terms of this Agreement to any
person or entity not a Party to this Agreement, except (a) by written agreement
of the Parties, (b) pursuant to a valid court order or subpoena, and (c) as
required by law as determined in the reasonable judgment of a Party's counsel.
8. Enforceability. If a court rules that any provision of this Agreement is
not enforceable in the manner set forth in this Agreement, that provision should
be enforceable to the maximum extent possible under applicable law and should be
reformed accordingly. If a court rules that any provision of this Agreement is
invalid or unenforceable, that ruling shall not affect the validity or
enforceability of the other portions of this Agreement.
9. Non-waiver. In the event either Party violates any provision of this
Agreement, the failure of the other Party to enforce any of its rights at that
time shall not constitute a waiver by the other Party of the right to enforce
any provision of this Agreement at any time.
10. Entire Agreement. This Agreement constitutes the complete agreement and
understanding of the Parties, supersedes any prior agreements or understandings
of the Parties (whether oral or written) and may be amended only in a writing
signed by the Parties.
11. Amendment. This Agreement cannot be amended, except by a written
document signed by the Party against whom enforcement of any such amendment is
sought.
12. Full Understanding. The Parties acknowledge that they have thoroughly
reviewed and discussed all aspects of this Agreement with their attorneys, that
they have carefully read and fully understand all of the provisions of this
Settlement Agreement, and that they are voluntarily entering into this
agreement.
13. Governing Law. This Agreement shall be interpreted in accordance with
the laws of the State of New Jersey, without regard to its principles of
conflicts of law. This Agreement has been jointly drafted and no provision shall
be construed against a Party because that Party or its attorneys drafted that
provision. Any action relating to this Agreement shall be filed in New Jersey.
14. Counterparts. This Agreement may be executed in more than one
counterpart, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
15. Construction of Agreement. Should any provision of this Agreement
require interpretation or construction, it is agreed by the Parties that the
entity interpreting or construing this Agreement shall not apply a presumption
that the provisions hereof shall be more strictly construed against one Party by
reason of the rule of construction that a document is to be construed more
strictly against the Party who prepared the Agreement, it being agreed that the
Parties have participated in the preparation of all provisions of this
Agreement.
16. Representations. Each individual signing this Agreement in a
representative capacity represents and warrants that (a) he or she is an
authorized representative of the entity for which he or she has signed and (b)
has the power and authority to bind the entity they represent and (c) is duly
authorized to enter into and execute this Agreement.
17. Dismissal of Claims. The Parties shall dismiss with prejudice any and
all claims, cases, or charges related to the Action within five (5) days after
the execution of this Agreement. Each Party will bear its own costs and legal
fees for the Action.
18. No Admission of Liability. Nothing in this Agreement shall be construed
as an admission of liability on behalf of any Party as it was entered for the
sole purpose of avoiding further costs of litigation.
The Parties signify their entry into this Agreement by signing below.
CareAdvantage, Inc.
Dated: Sept. 29, 2004 By: /s/ Xxxxxx X. Xxxxxx
-------------- --------------------------------
Xxxxxx Xxxxxx
President and CEO
STATE OF NEW JERSEY )
:SS.:
COUNTY OF MIDDLESEX )
On September 29, 2004, before me personally came Xxxxxx Xxxxxx, who, by me
duly sworn, did depose and say that deponent is the President and CEO of
CareAdvantage, Inc., the company described herein, and which executed the
foregoing Agreement, and that he is duly authorized to execute the foregoing
Agreement on behalf of CareAdvantage, Inc.
/s/ Xxxxxx Xxxxxx
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Notary Public
Dated: Sept. 29, 2004 By: /s/ Xxxxxx X. Xxxxxx
-------------- --------------------------------
Xxxxxx Xxxxxx
STATE OF NEW JERSEY )
:SS.:
COUNTY OF MIDDLESEX )
On September 29, 2004, before me personally came Xxxxxx Xxxxxx who, by me
duly sworn, did depose and say and acknowledge to my satisfaction that that
deponent is named in and personally signed this document and signed, sealed and
delivered this document as his act and deed.
/s/ Xxxxxx Xxxxxx
------------------
Notary Public
Dated: 9/28/2004 By: /s/ Xxxxx Xxxxx
--------- --------------------------------
Xxxxx Xxxxx
STATE OF CONNECTICUT )
:SS.:Bethel
COUNTY OF FAIRFIELD )
On September 28, 2004, before me personally came Xxxxx Xxxxx who, by me
duly sworn, did depose and say and acknowledge to my satisfaction that that
deponent is named in and personally signed this document and signed, sealed and
delivered this document as his act and deed.
/s/
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Notary Public
Dated: 9-28-2004 By: /s/ Xxxxx XxXxxxxxx
--------- --------------------------------
Xxxxx XxXxxxxxx
STATE OF PENNSYLVANIA )
:SS.:
COUNTY OF XXXXXXXXXX )
On September 28, 2004, before me personally came Xxxxx XxXxxxxxx who, by me
duly sworn, did depose and say and acknowledge to my satisfaction that that
deponent is named in and personally signed this document and signed, sealed and
delivered this document as his act and deed.
/s/ Xxxxx Xxxx Xxxx
--------------------------------
Notary Public
Horizon Blue Cross Blue Shield
of New Jersey
Dated: 9/29/2004 By: /s/ Xxxx X. Xxxxxxxx
--------- --------------------------------
Xxxx X. Xxxxxxxx,
Senior Vice President,
General Counsel and Secretary
STATE OF NEW JERSEY )
:SS.:
COUNTY OF ESSEX )
On September 29, 2004, before me personally came Xxxx X. Xxxxxxxx, who, by
me duly sworn, did depose and say that deponent is the Senior Vice President,
General Counsel and Secretary of Horizon Blue Cross Blue Shield of New Jersey,
the company described herein, and which executed the foregoing Agreement, and
that he is duly authorized to execute the foregoing Agreement on behalf of
Horizon Blue Cross Blue Shield of New Jersey
/s/ Xxxxxx X. Xxxxxxx 2/29/04
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Notary Public
