Exhibit 10.15

SETTLEMENT AGREEMENT AND RELEASE

     KNOW ALL PERSONS BY THESE PRESENT, that, HEALTH MANAGEMENT SYSTEMS, a New
York Corporation with principal offices located at 401 Park Avenue South, New
York, New York, 10016, Tax Identification No. 13-2770433 (hereinafter HMS) and
the DISTRICT OF COLUMBIA, a municipal corporation, hereby agree and stipulate as
follows, in settlement of the contract actions pending before the D.C. Contract
Appeals Board (CAB), Nos. D-1162 and D-1189, captioned Appeal of Health
Management Systems, Inc.

     HMS, for and in consideration of the sum of Two Million Three Hundred Fifty
One Thousand Forty Two Dollars and No Cents ($2,351,042.00 ), lawful money of
the United States, which sum the DISTRICT OF COLUMBIA agrees to pay to the said
HMS by check made payable to the order of HEALTH MANAGEMENT SYSTEMS,
INCORPORATED, the said HMS, for itself, its predecessors, successors, assigns,
parents, subsidiaries, affiliates, officers, directors, shareholders,
subcontractors, suppliers, and/or any other person or entity claiming by,
through, or under it or them, shall release and forever discharge the DISTRICT
OF COLUMBIA, its agencies, instrumentalities, officers, agents, servants, and
employees, from any and all losses and any and all actions, damages, claims and
demands whatsoever, including, without limitation, (a) claims for contract
balances and/or contract retainage, (b) claims for equitable adjustments,
(c) claims for interest, including interest under the D.C. Quick Payment Act,
D.C. Official Code § 2-221.01 (2001 ed.) et seq., (d) claims for attorneys’
fees, costs, and/or expenses, which the said HMS now has or will have against
the DISTRICT OF COLUMBIA, its respective agencies, instrumentalities, officers,
agents, servants, and employees, or which HMS or any person or persons claiming
by, through or under it now or hereafter can. or may have, by reason of,
relating to, and/or in any way arising out of: District of Columbia Contract
No. JA 91934, and any and all claims or matters of any nature raised or that
could have been raised in the following matters: Appeal of Health Management
Systems, Inc. D.C. Contract Appeals Board (CAB) Nos. D-1162 and D-l 189 or in
any proceeding or matter involving or pertaining to the same subject-matter
before other administrative or judicial tribunals without limitation.

     As further consideration for payment of said sum, it is hereby agreed that
HMS will provide full cooperation and all reasonable assistance to the DISTRICT
OF COLUMBIA, its respective agencies, instrumentalities, officers, agents,
servants, and employees, including but not necessarily limited to provision of
relevant documents and testimony, in defense against any and all further claims
arising out of and/or relating to the above-described matters, to the extent and
in the event that they might be brought by third parties. In addition, HMS
hereby represents and warrants that it does not owe any subcontractors, third
parties or vendors any amounts relating to District of Columbia Contract No. JA
91934 and agrees to indemnify the District of Columbia for any damages awarded
in the event any subcontractor, third party or vendor establishes in any action
in which a court of competent jurisdiction fully adjudicates any claim brought
by such subcontractor, third party to vendor to the contrary. For this provision
to have any force and effect, the District must notify HMS within 45 days of
service of process on the District of Columbia of any such claim against the
District pertaining to District of

 

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Columbia Contract No. JA 91934.

     And it is expressly agreed, as a further consideration for said sum, that
this release includes all damages to HMS or for which HMS might seek
contribution from, or might seek to impose any responsibility or liability on,
the DISTRICT OF COLUMBIA, resulting from the above-described matter, whether now
manifest or not, together with all direct and indirect consequences thereof,
which are now known or which may hereafter become known, the intention hereof
being to release the DISTRICT OF COLUMBIA, its agencies, instrumentalities,
officers, agents, and employees, completely, finally and absolutely from any and
all liabilities arising wholly or partially out of and/or in any way relating to
the above-described matter, and over which HMS has or has had any significant
influence or control.

     And it is expressly agreed, as a further consideration for said sum, that
this release includes all damages to HMS or for which HMS might seek
contribution from, or might seek to impose any responsibility or liability on,
the DISTRICT OF COLUMBIA, resulting from the above-described matter, whether now
manifest or not, together with all direct and indirect consequences thereof,
which are now known or which may hereafter become known, the intention hereof
being to release the DISTRICT OF COLUMBIA, its agencies, instrumentalities,
officers, agents, and employees, completely, finally and absolutely from any and
all liabilities arising wholly or partially out of and/or in any way relating to
the above-described matter, and over which HMS has any significant influence or
control.

     And it is further expressly agreed that the right to the payments to be
made hereunder shall not be assigned. Any assignment of the right to such
payments shall be null and void and may be disregarded by the DISTRICT OF
COLUMBIA.

     And it is further expressly agreed that this Agreement represents the
entire agreement of the parties and shall be interpreted in accordance with the
laws of the District of Columbia.

     And as further consideration for said sum, the undersigned, Robert M.
Holster, expressly warrants: (1) that he is the Chief Operating Officer of HMS
and that he is legally competent and fully authorized to execute this release
for and on behalf of HMS, (2) that HMS has been represented at all stages by
counsel of its choosing, (3) that the undersigned has had full opportunity to
review and consult with counsel regarding this matter and this release, (4) that
the undersigned has fully informed her/himself of the contents and meaning of
this release, and (5) that, on behalf of HMS the undersigned agrees to this
release without any reservation whatsoever.

     And, the undersigned counsel for the District of Columbia hereby expressly
warrants that they are authorized to execute this agreement for and on behalf of
the District of Columbia.

     IN WITNESS WHEREOF, this 3rd day of February, 2005, the Chief

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Operating Officer, HMS, having complete and proper authority so to do, has
executed this document in the name of HMS.

                              Health Management Systems, Incorporated
 
               

          By:   /s/ Robert M. Holster

               

              Chief Operating Officer

              Health Management Systems, Incorporated
State of
    )          
County/ City of
    )          

     I, Laura Jo Cruz, a Notary Public in and for the State of New York, do
hereby certify that Robert M. Holster, whose name is signed to the foregoing
release, personally appeared before me, the said          being personally known
to me as the person who executed the said release, and subscribed and swore to
the above release and acknowledged the same to be his act and deed in my
presence. And the said          , did further make oath that s/he had carefully
read and fully understands the same, and that her/his execution thereof was
voluntary and without reservation of any kind.

     Given under my hand and official seal this 3rd day of February, 2005.

              /s/ Laura Jo Cruz           NOTARY PUBLIC
 
       
My Commission Expires: 09/22/07
       
 
            LAURA JO CRUZ
    Notary Public — State of New York
    No.01CR6098730
    Qualified in Kings County
    Commission Expires Sep. 22, 2007

 
            THE DISTRICT OF COLUMBIA     a municipal corporation     ROBERT J.
SPAGNOLETTI     Attorney General for the District of Columbia
 
            George C. Valentine, Deputy Attorney General     Civil Litigation
Division
 
       
Date: 02/01/05
  By:   /s/ Thomas J. Foltz

       

      Thomas J. Foltz, Assistant Attorney General

      General Litigation I

      Civil Division

      Office of the Attorney General

      441 Fourth Street, N.W., 6th Floor South

      Washington, D.C, 20001

      ATTORNEYS FOR THE DISTRICT OF COLUMBIA

HMS I & II FINAL SETTLEMENT AGREEMENT 013105

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