Exhibit 10.2

 

SETTLEMENT AGREEMENT

 

This Settlement Agreement is entered into as of June 27, 2018, by and between
Dennis Demetre (“Demetre”), Lori Lynn Lewis Demetre (“Lewis”), John Alfred
Lewis, Christopher Brandon Lewis, and HMS Holdings Corp. (“HMS”).

 

WITNESSETH

 

WHEREAS, Demetre, Lewis, John Alfred Lewis, Christopher Brandon Lewis, and HMS
entered into a Stock Purchase Agreement for Allied Management Group – Special
Investigation Unit, Inc. (“Agreement”), dated June 30, 2010, pursuant to which
Demetre, Lewis, John Alfred Lewis, and Christopher Brandon Lewis sold their
company, Allied Management Group – Special Investigation Unit, Inc. (“AMG”), to
HMS for an up-front payment of $13 million plus potential contingent earn-out
payments;

 

WHEREAS, Demetre and Lewis commenced an action against HMS on July 9, 2012,
entitled Demetre v. HMS Holdings Corp., No. 652381/2012, in New York State
Supreme Court, County of New York concerning the earn-out payments, and on
December 13, 2013, HMS asserted counterclaims against Demetre and Lewis (the
“Litigation”);

 

WHEREAS, the Litigation was tried in a jury trial from October 24, 2017, to
November 3, 2017;

 

WHEREAS, the jury returned a verdict for Demetre and Lewis in the amount of $60
million in connection with the Litigation;

 

 

 

WHEREAS, HMS filed a Post-Trial Motion for Judgment as a Matter of Law, dated
November 20, 2017, identifying issues with the verdict and asking that the
verdict be vacated or reduced, which is currently pending;

 

WHEREAS, Demetre, Lewis, John Alfred Lewis, Christopher Brandon Lewis, and HMS
wish to settle the disputes between and among them;

 

NOW, THEREFORE, Demetre, Lewis, John Alfred Lewis, Christopher Brandon Lewis,
and HMS, intending to be legally bound, hereby agree that in consideration of
the settlement of the disputes between the parties, as described below, and for
such other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged:

 

1.                  Upon execution of this Settlement Agreement, counsel for
Demetre and Lewis will execute and deliver to counsel for HMS a Stipulation of
Discontinuance with prejudice and without costs to either party in the form
attached hereto as Exhibit A. The Stipulation of Discontinuance will be held in
escrow by HMS’s counsel to be filed with the Court upon payment of the
Settlement Amount as set forth in paragraph 2 of this Settlement Agreement.

 

2.                  Within ten (10) business days of the execution of this
Settlement Agreement, HMS will pay Demetre, Lewis, John Alfred Lewis, and
Christopher Brandon Lewis twenty million dollars ($20,000,000.00) (the
“Settlement Amount”), to be divided amongst themselves as they may separately
agree, by wire transfer to the following account:

 

Humphrey, Farrington & McClain, P.C. IOLTA Account

Account No. XXXXXXX

ABA No. XXXXXXXXX

Citizens Bank & Trust

7553 NW Barry Road, Kansas City, MO 64153

 

 2 

 

For avoidance of doubt, the parties agree and understand that the Settlement
Amount includes a sum representing the balance of the remaining escrow funds
(approximately $668,820) (“Escrow Funds”) currently being held in escrow with JP
Morgan Chase Bank, N.A. in Account Number XXXXXXXXXXXXXXX pursuant to the Escrow
Agreement dated June 30, 2010 by and between Demetre, Lewis, John Alfred Lewis,
Christopher Brandon Lewis and HMS, which shall be released to HMS. Upon
execution of this Settlement Agreement, counsel for Demetre and Lewis will
deliver to counsel for HMS written authorization in the form attached hereto as
Exhibit B, executed by Demetre, Lewis, John Alfred Lewis, and Christopher
Brandon Lewis, for the release of the Escrow Funds to HMS.

 

3.                  Demetre, Lewis, John Alfred Lewis, and Christopher Brandon
Lewis on behalf of themselves and their respective past, present, and future
companies, subsidiaries, and their present and former agents, advisors,
accountants, attorneys, assignees, and representatives hereby release and
absolutely and forever discharge HMS, as well as its past, present, and future
companies, subsidiaries, and affiliates, and their respective present and former
officers, directors, shareholders, employees, agents, advisors, accountants,
attorneys, assignees, and representatives (referred to collectively as the “HMS
Released Parties”), of and from any and all claims, demands, damages, debts,
liabilities, judgments, accounts, loss of profits, loss of goodwill, loss of
reputation, obligations, costs, expenses, actions, and causes of action of every
kind and nature whatsoever, whether now known or unknown, suspected or
unsuspected, choate or inchoate, which Demetre, Lewis, John Alfred Lewis, or
Christopher Brandon Lewis now has, owns, or holds, or at any time heretofore
ever had, owned, or held against any of them (referred to collectively as
“Demetre-Lewis Claims”) from the beginning of the world to the date hereof,
including without limitation any Demetre-Lewis Claims which arise out of, relate
to, or are based upon: (i) the performance or non-performance of the Agreement;
and/or (ii) any of the events, acts, or conduct that are the subject of (or
could have been the subject of) the Litigation; provided, however, that there
shall be expressly excluded from this General Release any and all Demetre-Lewis
Claims arising out of, relating to, or based upon this Settlement Agreement.

 

 3 

 

4.                  HMS, on behalf of itself and its respective past, present,
and future parent companies, subsidiaries, and their present and former agents,
advisors, accountants, attorneys, assignees, and representatives hereby releases
and absolutely and forever discharges Demetre, Lewis, John Alfred Lewis, and
Christopher Brandon Lewis, as well as their past, present, and future companies,
subsidiaries, and affiliates, and their respective present and former officers,
directors, shareholders, employees, agents, advisors, accountants, attorneys,
assignees, and representatives (referred to collectively as the “Demetre-Lewis
Released Parties”), of and from any and all claims, demands, damages, debts,
liabilities, judgments, accounts, loss of profits, loss of goodwill, loss of
reputation, obligations, costs, expenses, actions, and causes of action of every
kind and nature whatsoever, whether now known or unknown, suspected or
unsuspected, choate or inchoate, which HMS now has, owns, or holds, or at any
time heretofore ever had, owned, or held against any of them (referred to
collectively as “HMS Claims”) from the beginning of the world to the date
hereof, including without limitation any HMS Claims which arise out of, relate
to, or are based upon: (i) the performance or non-performance of the Agreement;
and/or (ii) any of the events, acts, or conduct that are the subject of (or
could have been the subject of) the Litigation; provided, however, that there
shall be expressly excluded from this General Release any and all HMS Claims
arising out of, relating to, or based upon this Settlement Agreement.

 

 4 

 

5.                  It is the intention of the Parties that in executing this
Settlement Agreement and receiving the consideration called for herein, the
releases above shall be effective as a full and final accord and satisfaction
and release of all claims, demands, or causes of action released herein. In
furtherance of this intention, each Party acknowledges that it is familiar with
and understands California Civil Code section 1542 and that it hereby waives the
protection of California Civil Code section 1542, to the extent applicable,
which provides as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

Each Party hereby waives and relinquishes all rights and benefits that it has or
may have under California Civil Code section 1542, or the law of any other state
or jurisdiction to the same or similar effect, to the full extent that it may
lawfully waive all such rights and benefits pertaining to any of the claims,
demands, or causes of action released herein.

 

6.                  Nothing in this Settlement Agreement shall be deemed or
asserted to be an admission by Demetre, Lewis, John Alfred Lewis, Christopher
Brandon Lewis, or HMS of any liability that is the subject of this Settlement
Agreement or the Litigation, which liability is expressly denied.

 

7.                  This Settlement Agreement contains, and is intended to
contain, a complete statement of the entire agreement and understanding of
Demetre, Lewis, John Alfred Lewis, Christopher Brandon Lewis, and HMS with
respect to the subject matter hereof, and supersedes all prior statements,
representations, discussions, agreements, draft agreement, and undertakings,
whether written or oral, express or implied, of any and every nature with
respect thereto.

 

 5 

 

8.                  This Settlement Agreement cannot be amended, supplemented,
or modified, nor may any provision hereof be waived, except by a written
instrument executed by Demetre, Lewis, John Alfred Lewis, Christopher Brandon
Lewis, and HMS.

 

9.                  Demetre, Lewis, John Alfred Lewis, and Christopher Brandon
Lewis represent that they have kept and will keep every term of this Settlement
Agreement strictly confidential and that they will not at any time hereafter
disclose the existence of this Settlement Agreement, the underlying facts
relating to the Litigation and their claims or causes of action, the fact that a
settlement agreement was being discussed or considered, the substance or
contents of this Settlement Agreement or the amount or fact of payment of money
(collectively, the “Settlement Issues”) to any person or persons, including,
without limitation, current and former employees of the Demetre-Lewis Released
Parties or HMS Released Parties, other than Demetre, Lewis, John Alfred Lewis,
and Christopher Brandon Lewis’s attorney(s), accountants, investment and
financial advisors, and members of Demetre, Lewis, John Alfred Lewis, and
Christopher Brandon Lewis’s immediate family (collectively, “Confidants”),
provided that such Confidants agree to and do maintain such Settlement Issues as
confidential. If asked about the Litigation or Settlement Issues, Demetre,
Lewis, John Alfred Lewis, and Christopher Brandon Lewis will state only that “We
are pleased to have resolved this matter.”

 

Notwithstanding the foregoing, subject to compliance with the provisions of
paragraph 9 of this Settlement Agreement, Demetre, Lewis, John Alfred Lewis, and
Christopher Brandon Lewis and their Confidants may disclose the Settlement
Issues pursuant to court order, judicial or regulatory process, or subpoena,
provided that Demetre, Lewis, John Alfred Lewis, and Christopher Brandon Lewis
shall, to the extent permissible by law, notify HMS immediately upon learning of
the order, process, or subpoena so that HMS may seek a protective order or other
appropriate remedy, and Demetre, Lewis, John Alfred Lewis, and Christopher
Brandon Lewis will cooperate fully with HMS to obtain such protective order or
other appropriate remedy and otherwise lawfully resist disclosure of the
information. If no such protective order or other remedy is obtained, Demetre,
Lewis, John Alfred Lewis, and Christopher Brandon Lewis and their Confidants
will disclose only that portion of the Settlement Issues which they are advised
in writing by their legal counsel is legally required to be disclosed, and will
use best efforts to ensure any such information so disclosed will be accorded
confidential treatment.

 6 

 

Demetre, Lewis, John Alfred Lewis, and Christopher Brandon Lewis understand and
acknowledge that the representations and commitments made by them in paragraph 9
of this Settlement Agreement are essential, material, and indispensable
conditions of this Settlement Agreement, and that the settlement benefits
provided for herein by HMS would not have been provided in the absence of these
representations and commitments.

 

HMS represents that it has kept every term of this Settlement Agreement strictly
confidential through the date it executes this Settlement Agreement. HMS may,
however, disclose the Settlement Amount and related financial impact, accounting
treatment and tax consequences of this Settlement Agreement as deemed advisable
or as otherwise required by financial and public company reporting requirements
such as U.S. Generally Accepted Accounting Standards (“GAAP”), the U.S.
Securities & Exchange Commission rules and regulations, Public Company
Accounting Oversight Board auditing standards, the Nasdaq Stock Market listing
rules or similar rules, regulations and standards. If asked about the underlying
facts relating to the Settlement Issues, HMS will state only that “We are
pleased to have resolved this matter.”

 7 

 

HMS may also disclose the Settlement Issues pursuant to court order, judicial or
regulatory process, or subpoena, provided that HMS shall, to the extent
permissible by law, notify Demetre, Lewis, John Alfred Lewis, and Christopher
Brandon Lewis immediately upon learning of the order, process, or subpoena so
that Demetre, Lewis, John Alfred Lewis, and Christopher Brandon Lewis may seek a
protective order or other appropriate remedy, and HMS will cooperate fully with
Demetre, Lewis, John Alfred Lewis, and Christopher Brandon Lewis to obtain such
protective order or other appropriate remedy and otherwise lawfully resist
disclosure of the information. Except as otherwise provided in this Settlement
Agreement, HMS will disclose only that portion of the Settlement Issues which it
is advised in writing by its legal counsel is legally required to be disclosed,
and will use best efforts to ensure any such information so disclosed will be
accorded confidential treatment.

 

10.              Each Party represents and warrants to the other that neither
it, nor any of its agents, representatives, attorneys, or any other person or
entity, in order to induce any other Party to enter into this Settlement
Agreement, has made any promise, assurance, representation, inducement, or
warranty whatsoever, whether express, implied, or statutory, that is not
specifically set forth in writing in this Settlement Agreement, and further
acknowledges that this Settlement Agreement has not been entered into in
reliance upon any promise, assurance, representation, inducement, or warranty
not expressly set forth in writing in this Settlement Agreement.

 

 8 

 

11.              Each Party represents and warrants to the other that it has
read and understands this Settlement Agreement, and that this Settlement
Agreement is executed voluntarily and without duress or undue influence on the
part of or on behalf of the other Parties hereto. The Parties hereby acknowledge
that they have been represented or have had the opportunity to be represented in
the negotiations and preparation of this Settlement Agreement by counsel of
their own choice and that they are fully aware of the contents of this
Settlement Agreement and of the legal effect of each and every provision herein.
Each Party shall bear its own costs and attorneys’ fees with respect to this
Settlement Agreement.

 

12.              The Parties expressly agree that there are no third-party
beneficiaries to this Settlement Agreement other than the Parties and the
releasees mentioned in paragraphs 3 and 4 of this Settlement Agreement and that
nothing herein, express or implied, is intended to or shall confer upon any
other person any legal or equitable right, benefit, or remedy of any nature
whatsoever under or by reason of this Settlement Agreement.

 

13.              This Settlement Agreement shall be interpreted and construed in
accordance with the laws of the State of New York.

 

14.              All disputes, controversies, or differences between the Parties
arising out of, relating to, or based upon this Settlement Agreement, or the
breach thereof, shall be filed in New York State Supreme Court, New York County.

 

15.              The rules of construction that an agreement be construed
against the drafting party shall not be applied in interpreting this Settlement
Agreement.

 

 9 

 

16.              Should any part, term, or provision of this Settlement
Agreement be declared or determined by any court or other tribunal of
appropriate jurisdiction to be invalid or unenforceable, any such invalid or
unenforceable part, term, or provision shall be deemed stricken and severed from
this Settlement Agreement only to the extent necessary to make such part, term,
or provision lawful and enforceable, and any and all of the other terms of the
Settlement Agreement shall remain in full force and effect to the fullest extent
permitted by law.

 

17.              This Settlement Agreement may be executed in identical
counterparts with the same force and effect as if all signatures were set forth
in a single instrument.

 

IN WITNESS WHEREOF, Demetre, Lewis, John Alfred Lewis, Christopher Brandon
Lewis, and HMS have caused this Settlement Agreement to be executed on their
behalf by their duly authorized representatives, on the day and year set forth
opposite each of their signatures hereto.

 

   DENNIS DEMETRE      Dated: 6/27/18  /s/ Dennis Demetre         LORI LEWIS   
  Dated: 6/27/18  /s/ Lori Lewis         JOHN ALFRED LEWIS      Dated: 6/27/18 
/s/ John Alfred Lewis

 

 

 

 10 

 

   CHRISTOPHER BRANDON LEWIS      Dated: 6/27/18  /s/ Christopher Brandon Lewis
              

 

 

 

 

 

 11 

 

 

   HMS HOLDINGS CORP.      Dated: 6/27/18  /s/ William C. Lucia    BY: WILLIAM
C. LUCIA    PRESIDENT AND CHIEF EXECUTIVE OFFICER

 

 

 

 

 

 

 12 

Exhibit A

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK      
-------------------------------------------------------------------------x      
DENNIS DEMETRE and LORI LEWIS,          :    Plaintiffs,  :  Index No.
652381/2012    :  Hon. Saliann Scarpulla - against -  :       :       :    HMS
HOLDINGS CORP.,  :    Defendant.  :       :   
-------------------------------------------------------------------------x      

 

 

STIPULATION OF DISCONTINUANCE WITH PREJUDICE

 

Pursuant to Rule 3217(b) of the Civil Practice Law and Rules of the State of New
York, Plaintiffs Dennis Demetre and Lori Lewis and Defendant HMS Holdings Corp.
(collectively, the “Parties”), by and through their undersigned counsel, hereby
stipulate and agree that the Parties have amicably resolved their differences
and that the above-referenced proceeding shall be discontinued, with prejudice,
and without costs to any of the Parties as against another. None of the Parties
is an infant, incompetent person for whom a committee has been appointed, or
conservatee and no person, not a Party, has an interest in the subject matter of
the action.

 

It is further stipulated and agreed that the verdict entered by the jury in this
proceeding on November 3, 2017, will be vacated and dissolved and will have no
force or effect.

 

Dated:  June _____, 2018    New York, NY

 

 

 

 

 

  By:         Joshua B. Katz   Jack A. Gordan   KENT, BEATTY & GORDON, LLP  
Eleven Times Square   New York, New York 10036   Telephone: (212) 421-4300      
  Kenneth B. McClain   Humphrey, Farrington & McClain, P.C.   221 W. Lexington
Ave., #400   Independence, Missouri 64050   Telephone: (816) 836-5050  
(Admitted pro hac vice)         William Carr   Steven White   White, Graham,
Buckley & Carr, LLC   19049 E. Valley View Parkway   Independence, Missouri
64055   Telephone: (816) 373-9080   (Admitted pro hac vice)         John M.
Klamann   Andrew Schermerhorn   The Klamann Law Firm   4435 Main St., Suite 150
  Kansas City, Missouri 64111   Telephone: (816) 421-2626         Attorneys for
Plaintiffs Dennis Demetre & Lori Lewis.

 

 

 

 

 

  By:           David J. Lender   Gregory Silbert   WEIL, GOTSHAL & MANGES LLP  
767 Fifth Avenue   New York, NY 10153   Telephone: (212) 310-8000   Facsimile:
(212) 310-8007         Attorneys for Defendant   HMS Holdings Corp.

 

 

 

SO ORDERED:

 

 

 

    Hon. Saliann Scarpulla, J.S.C.  

 

 

 

 

Exhibit B

 

June ____, 2018

 

 

JP Morgan Chase Bank, N.A.

Treasury Services

4 New York Plaza, 21st Floor

New York, NY 10004

Attention: Li Hom / Joan King-Francois

 

RE:Escrow Agreement dated June 30, 2010, by and between HMS Holdings Corp. and
Dennis Demetre, Lori Lewis, John Alfred Lewis and Christopher Brandon Lewis

 

Dear Ms. Hom and Ms. King-Francois:

 

Pursuant to the Escrow Agreement referenced above, JP Morgan Chase Bank is
currently holding funds in Account Number XXXXXXXXXXXXXXX (the “Escrow
Account”). The parties to the Escrow Agreement hereby direct JP Morgan Chase
Bank to release the remaining balance of the funds, including all accrued and
unpaid interest, in the Escrow Account to HMS Holdings Corp. in accordance with
the standing settlement instructions stated in Sections 11(a) and (b) of the
Escrow Agreement. Please direct any questions or concerns to the following
attorneys for the parties:

 

David J. Lender  William L. Carr Weil, Gotshal & Manges LLP  White, Graham,
Buckley & Carr 767 Fifth Avenue  19049 E. Valley View Parkway, Suite C New York,
NY 10153  Independence, MO 64055 Telephone: (212) 310-8000  Telephone: (816)
373-9080 Attorney for HMS Holdings Corp.  Attorney for Demetre/Lewis

 

Thank you for your prompt attention to this matter.

 

 

/s/ Jeffrey S. Sherman    HMS Holdings Corp.  Dennis Demetre By: Jeffrey S.
Sherman    Executive Vice President,    Chief Financial Officer, and Treasurer 
     Lori Lewis              Christopher Brandon Lewis              John Alfred
Lewis

 

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