Exhibit 10.1

 

PRIVILEGED AND CONFIDENTIAL

PROVIDED AS PART OF SETTLEMENT DISCUSSIONS

SUBJECT TO RULE 408 OF THE FEDERAL RULES OF EVIDENCE

AND ALL BANKRUPTCY AND STATE LAW EQUIVALENTS

 

PLAN SUPPORT AGREEMENT REGARDING

CURATIVE HEALTH SERVICES, INC. AND ITS SUBSIDIARIES

 

THIS PLAN SUPPORT AGREEMENT (as the same may be amended, modified, or
supplemented from time to time, this “Agreement”), is entered into as of
December 2, 2005, by and among (a) Curative Health Services, Inc., and its
subsidiaries(1) (collectively, the “Company” or “Curative”); and (b) the holders
(or investment managers or advisers for the beneficial owners) identified on
Schedule 1 (the “Supporting Noteholders”) of the Curative Health Services, Inc.
$185 million 103/4% Senior Notes Due 2011 (the “Senior Notes”) (Curative
together with the Supporting Noteholders, the “Parties” and each individually, a
“Party”).

 

RECITALS

 

WHEREAS, Curative has determined in the exercise of its fiduciary duty that it
is necessary, appropriate and timely to undertake a restructuring of its debt
and equity interests and, to that end, is contemplating a restructuring of its
financial obligations (the “Financial Restructuring”) through the prosecution of
jointly administered chapter 11 cases (collectively, the “Chapter 11 Cases”) 
under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532
(as amended, the “Bankruptcy Code”) which shall be filed in the United States
Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”);

 

WHEREAS, the Supporting Noteholders hold in the aggregate, not less than 78% of
the outstanding principal amount of the Senior Notes;

 

WHEREAS, certain of the Supporting Noteholders are members of an ad hoc group of
certain holders of the Senior Notes (the “Ad Hoc Committee”) that has engaged in
good faith negotiations with Curative with the objective of reaching an
agreement regarding the principal terms of the Financial Restructuring and has
reached agreement in principle on the terms and conditions set forth in the
Chapter 11 Plan Term Sheet (the “Term Sheet”), a copy of which is attached
hereto as Exhibit A;

 

WHEREAS, in order to implement the Financial Restructuring, Curative intends to
(i) prepare a disclosure statement that is consistent in all respects with the
Term Sheet and otherwise in form and substance reasonably satisfactory to the
holders of a majority in amount of

 

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(1) The subsidiaries which are parties to this Agreement are:  Apex Therapeutic
Care, Inc., eBioCare.com, Inc., CHS Services, Inc., Hemophilia Access, Inc.,
Infinity Infusion, LLC, Infinity Infusion II, LLC, Infinity Infusion Care, Ltd.,
Curative Health Services of New York, Inc., Optimal Care Plus, Inc.,
MedCare, Inc., Critical Care Systems, Inc., Curative Health Services Co.,
Curative Health Services III Co., and Curative Pharmacy Services, Inc.

 

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the Senior Notes (the “Disclosure Statement”), (ii) prepare a plan of
reorganization that is consistent in all respects with the Term Sheet and
otherwise in form and substance reasonably satisfactory to the holders of a
majority in amount of the Senior Notes held by the Supporting Noteholders (the
“Plan”), (iii) solicit the requisite votes in favor of the Plan, (iv) commence
the Chapter 11 Cases before the Bankruptcy Court, (v) on the date of
commencement of the Chapter 11 Cases, submit the Plan and Disclosure Statement
for approval of the Bankruptcy Court, and (vi) use reasonable best efforts to
have the Disclosure Statement approved and the Plan confirmed by the Bankruptcy
Court, in each case, as expeditiously as practicable under the Bankruptcy Code
and the Federal Rules of Bankruptcy Procedure;

 

WHEREAS, each Supporting Noteholder holds or is the legal or beneficial holder
of, or the investment manager with discretionary authority with respect to, the
aggregate principal amount of Senior Notes set forth below each such Supporting
Noteholder’s signature attached hereto and, in order to facilitate the
implementation of the Financial Restructuring, each of the Supporting
Noteholders is prepared to support, to the extent legally possible, on the terms
and subject to the conditions of this Agreement and applicable law, if and when
solicited to do so in accordance with applicable law, to vote (or, in the case
of managed or advised accounts, instruct its custodial agents to vote) to accept
the Plan in the Chapter 11 Cases; and

 

WHEREAS, Curative desires to obtain the commitment of the Supporting Noteholders
to support and vote for the Plan, subject to the terms and conditions set forth
herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each of the Parties
hereto hereby agrees as follows:

 

1.             SUPPORT OF FINANCIAL RESTRUCTURING.  SUBJECT TO SECTION 11, AS
LONG AS THIS AGREEMENT HAS NOT BEEN TERMINATED PURSUANT TO SECTION 7 HEREOF,
EACH SUPPORTING NOTEHOLDER SEVERALLY AGREES WITH EACH OTHER SUPPORTING
NOTEHOLDER AND WITH THE COMPANY THAT, IF THE COMPANY PROPOSES THE PLAN, SUCH
SUPPORTING NOTEHOLDER (I) WILL, SUBJECT TO RECEIPT OF A DISCLOSURE STATEMENT
PREPARED PURSUANT TO AND SATISFYING THE REQUIREMENTS OF THE BANKRUPTCY CODE
APPLICABLE TO DISCLOSURE STATEMENTS THAT CONTAINS INFORMATION CONCERNING THE
COMPANY AND SUCH PLAN THAT IS IN ALL MATERIAL RESPECTS CONSISTENT WITH THE
INFORMATION PROVIDED TO THE SUPPORTING NOTEHOLDERS BY THE COMPANY OR FILED WITH
THE SECURITIES EXCHANGE COMMISSION (COLLECTIVELY, “INFORMATION”) AND CONTAINS NO
INFORMATION THAT IS MATERIALLY INCONSISTENT WITH THE INFORMATION, AND FURTHER
SUBJECT TO ITS VOTE ON THE PLAN BEING SOLICITED IN ACCORDANCE WITH THE
BANKRUPTCY CODE (THE “SOLICITATION STANDARDS”), VOTE ALL OF ITS CLAIMS AGAINST
THE COMPANY, WHETHER NOW OWNED OR HEREAFTER ACQUIRED, TO THE EXTENT LAWFULLY
ALLOWED TO VOTE, TO ACCEPT SUCH PLAN AND OTHERWISE SUPPORT AND TAKE ALL
REASONABLE ACTIONS TO FACILITATE, THE PROPOSAL, SOLICITATION, CONFIRMATION, AND
CONSUMMATION OF SUCH PLAN; (II) WILL NOT OBJECT TO CONFIRMATION OF, OR VOTE TO
REJECT, THE PLAN OR OTHERWISE COMMENCE ANY PROCEEDING TO OPPOSE OR ALTER THE
PLAN, THE DISCLOSURE STATEMENT IN RESPECT OF THE PLAN, THE SOLICITATION OF ITS
ACCEPTANCE OF THE PLAN IN ACCORDANCE WITH THE SOLICITATION STANDARDS OR ANY
OTHER REORGANIZATION DOCUMENTS CONTAINING TERMS AND CONDITIONS CONSISTENT IN ALL
RESPECTS WITH THE TERM SHEET AND THIS AGREEMENT; (III) WILL VOTE AGAINST ANY
RESTRUCTURING WORKOUT OR PLAN OF REORGANIZATION RELATING TO CURATIVE OTHER THAN
THE PLAN; AND (IV) WILL NOT DIRECTLY OR INDIRECTLY SEEK, SOLICIT, SUPPORT,
ENCOURAGE, VOTE FOR, CONSENT

 

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to, or participate in the negotiation or formulation of (x) any plan of
reorganization, proposal, offer, dissolution, winding up, liquidation,
reorganization, merger, or restructuring for the Company other than the Plan,
(y) any disposition outside of the Plan of all or any substantial portion of the
assets of the Company, or (z) any other action that is inconsistent with, or
that would delay or obstruct the proposal, solicitation, confirmation, or
consummation of, the Plan.

 

2.             FORBEARANCE.  AS LONG AS THIS AGREEMENT HAS NOT BEEN TERMINATED
PURSUANT TO SECTION 7 HEREOF, EACH OF THE SUPPORTING NOTEHOLDERS AGREES TO
FORBEAR FROM (A) EXERCISING REMEDIES WITH RESPECT TO ANY OF CURATIVE’S DEFAULTS
AND EVENT OF DEFAULTS ARISING, OR WHICH MAY ARISE, UNDER THE INDENTURE FOR THE
SENIOR NOTES (THE “INDENTURE”), AND WILL NOT INSTRUCT THE INDENTURE TRUSTEE TO
TAKE ANY ENFORCEMENT OR OTHER ACTIONS AGAINST CURATIVE WITH RESPECT TO THE
INDENTURE, AND WILL TAKE ALL COMMERCIALLY REASONABLE ACTIONS TO OPPOSE AND
OBJECT TO, AND WILL NOT SUPPORT, ANY PERSON IN TAKING ANY ACTION TO EXERCISE
REMEDIES UNDER OR WITH RESPECT TO THE INDENTURE, AND (B) FILING, OR JOINING,
SEEKING, SOLICITING, SUPPORTING, ENCOURAGING OR ASSISTING A THIRD PARTY TO FILE,
AN INVOLUNTARY BANKRUPTCY PETITION AGAINST CURATIVE.

 

3.             PROPOSAL OF PLAN.  THE COMPANY (A) REPRESENTS TO EACH SUPPORTING
NOTEHOLDER INDIVIDUALLY THAT IT IS THEIR PRESENT INTENTION TO PROMPTLY AND
DILIGENTLY (I) INITIATE THE CHAPTER 11 CASES UPON FULFILLMENT OF THE CONDITIONS
PRECEDENT TO THE COMPANY’S OBLIGATIONS UNDER THIS AGREEMENT; (II) PREPARE AND
DELIVER THE PLAN, THE DISCLOSURE STATEMENT IN RESPECT OF THE PLAN, AND OTHER
NECESSARY OR APPROPRIATE REORGANIZATION DOCUMENTS CONTAINING TERMS AND
CONDITIONS CONSISTENT WITH THE TERM SHEET; (III) SOLICIT ACCEPTANCES OF THE PLAN
BY MEANS OF THE DISCLOSURE STATEMENT IN ACCORDANCE WITH THE SOLICITATION
STANDARDS; AND (IV) ACHIEVE THE CONFIRMATION AND CONSUMMATION OF SUCH PLAN; AND
(B) AGREE, AS LONG AS THIS AGREEMENT HAS NOT BEEN TERMINATED PURSUANT TO
SECTION 7 HEREOF, TO USE THEIR REASONABLE BEST EFFORTS, SUBJECT TO THEIR
FIDUCIARY DUTY TO EQUITYHOLDERS AND CREDITORS, TO PROMPTLY AND DILIGENTLY CARRY
OUT, AND OPPOSE ANY EFFORTS TO PREVENT, THE ACTIONS DESCRIBED IN SECTION (A) OF
THIS SENTENCE.

 

4.             NO SOLICITATION.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT, NOTHING IN THIS AGREEMENT IS INTENDED TO BE OR CONSTITUTE, AND
NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO BE OR CONSTITUTE, A SOLICITATION OF
ANY VOTE OR ANY AGREEMENT TO VOTE FOR ANY PLAN OF REORGANIZATION.

 

5.             RESTRICTIONS ON TRANSFER.  AS LONG AS THIS AGREEMENT HAS NOT BEEN
TERMINATED PURSUANT TO SECTION 7 HEREOF AND THE CONFIRMATION AND EFFECTIVE DATE
OF THE PLAN HAVE NOT OCCURRED, NO SUPPORTING NOTEHOLDER MAY, DIRECTLY OR
INDIRECTLY, SELL, ASSIGN, TRANSFER, HYPOTHECATE, GRANT ANY OPTION OR RIGHT TO
ACQUIRE, OR OTHERWISE DISPOSE OF (EACH, A “TRANSFER”) ALL OR ANY PORTION OF ANY
CLAIM AGAINST OR EQUITY INTEREST IN THE COMPANY OR ANY INTEREST THEREIN, UNLESS
THE PURCHASER, ASSIGNEE, OR TRANSFEREE (THE “TRANSFEREE”) AGREES IN WRITING IN
THE FORM ATTACHED HERETO AS EXHIBIT B (SUCH WRITING A “TRANSFEREE
ACKNOWLEDGEMENT”) AT THE TIME OF SUCH TRANSFER TO BE BOUND BY ALL OF THE TERMS
OF THIS AGREEMENT IN ITS ENTIRETY, WITHOUT REVISIONS, AS A PARTY HERETO,
INCLUDING WITHOUT LIMITATION SECTION 1 HEREOF.  UPON EXECUTION OF THE TRANSFEREE
ACKNOWLEDGEMENT, THE TRANSFEREE SHALL BE DEEMED TO BE A SUPPORTING NOTEHOLDER. 
ANY TRANSFER NOT EFFECTED IN ACCORDANCE WITH THE FOREGOING SHALL BE DEEMED VOID
AB INITIO.  IN THE EVENT OF A TRANSFER, THE TRANSFEROR SHALL, WITHIN THREE
BUSINESS DAYS AFTER SUCH TRANSFER, PROVIDE NOTICE OF SUCH TRANSFER TO CURATIVE
HEALTH SERVICES, INC., TOGETHER WITH A COPY OF THE TRANSFEREE ACKNOWLEDGEMENT
AND, IF THE TRANSFEROR HAS TRANSFERRED ALL OF ITS CLAIMS SUBJECT TO THIS

 

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Agreement, then such transferor shall automatically be released from any further
obligations hereunder.

 

6.             FURTHER ACQUISITION OF SENIOR NOTES AND CLAIMS.  THIS AGREEMENT
SHALL IN NO WAY BE CONSTRUED TO PRECLUDE ANY SUPPORTING NOTEHOLDER FROM
ACQUIRING ADDITIONAL SENIOR NOTES.  HOWEVER, ANY SUCH SENIOR NOTES SO ACQUIRED
SHALL AUTOMATICALLY BE DEEMED TO BE SUBJECT TO ALL OF THE TERMS OF THIS
AGREEMENT.

 

7.             TERMINATION.  UPON THE OCCURRENCE OF ANY OF THE FOLLOWING EVENTS
OR CONDITIONS:

 

(I)            THE FINAL TERMS OF THE PLAN HAVE NOT BEEN AGREED TO BY THE
PARTIES BY DECEMBER 14, 2005;

 

(II)           THE PREPETITION SOLICITATION PURSUANT TO THE DISCLOSURE STATEMENT
AND PLAN HAS NOT COMMENCED ON OR BEFORE DECEMBER 21, 2005 (THE “SOLICITATION
DATE”);

 

(III)          THE COMPANY FAILS TO FILE THE PLAN WITH THE BANKRUPTCY COURT BY
JANUARY 31, 2006;

 

(IV)          AN ORDER CONFIRMING THE PLAN SHALL NOT HAVE BEEN ENTERED BY THE
BANKRUPTCY COURT ON OR BEFORE APRIL 30, 2006;

 

(V)           THE COMPANY SHALL FILE WITH THE BANKRUPTCY COURT A PLAN OF
REORGANIZATION ON TERMS AND CONDITIONS DIFFERENT FROM, OR A DISCLOSURE STATEMENT
NOT CONSISTENT WITH, THE TERM SHEET OR OTHERWISE IN FORM AND SUBSTANCE NOT
REASONABLY SATISFACTORY TO THE SUPPORTING NOTEHOLDERS;

 

(VI)          ONCE FILED, AND PRIOR TO THE CONFIRMATION OF THE PLAN, ANY OR ALL
OF THE CHAPTER 11 CASES SHALL HAVE BEEN CONVERTED TO A CASE OR CASES UNDER
CHAPTER 7, TO ONE OR MORE LIQUIDATING CHAPTER 11 CASES, OR DISMISSED;

 

(VII)         THE BANKRUPTCY COURT TERMINATES THE COMPANY’S EXCLUSIVE PERIOD TO
FILE THE PLAN OR SUCH EXCLUSIVE PERIOD LAPSES;

 

(VIII)        AN EXAMINER IS APPOINTED PURSUANT TO SECTION 1104(C)(1) OF THE
BANKRUPTCY CODE WITH EXPANDED POWERS TO RUN THE BUSINESS OF THE COMPANY, OR AN
EXAMINER OR THE BANKRUPTCY COURT MAKES A FINDING OF FRAUD, DISHONESTY, OR
MISCONDUCT BY ANY OFFICER OR DIRECTOR OF CURATIVE, OR A TRUSTEE UNDER CHAPTER 7
OR CHAPTER 11 OF THE BANKRUPTCY CODE IS APPOINTED FOR THE COMPANY IN ANY OF THE
CHAPTER 11 CASES;

 

(IX)           THERE SHALL HAVE OCCURRED ANY MATERIAL BREACH OF THIS AGREEMENT
BY THE COMPANY OR ANY REPRESENTATION OR WARRANTY MADE BY THE COMPANY IN THIS
AGREEMENT SHALL BE INCORRECT IN ANY MATERIAL RESPECT;

 

(X)            SINCE THE DATE OF THE FILING OF THE COMPANY’S MOST RECENT
FORM 10-Q, THERE HAS BEEN A CHANGE IN THE ASSETS, LIABILITIES, SALES, INCOME,
BUSINESS, OR PROSPECTS OF

 

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CURATIVE OR IN ITS RELATIONSHIPS WITH SUPPLIERS, CUSTOMERS, OR OTHER PERSONS
WITH WHICH IT DOES BUSINESS, THAT HAVE BEEN, EITHER IN ANY CASE OR IN THE
AGGREGATE, IN THE REASONABLE OPINION OF A MAJORITY IN AMOUNT OF THE SUPPORTING
NOTEHOLDERS, MATERIALLY ADVERSE;

 

(XI)           ANY COURT SHALL ENTER A FINAL NONAPPEALABLE JUDGMENT OR ORDER
DECLARING THIS AGREEMENT TO BE UNENFORCEABLE;

 

(XII)          THE COMPANY SHALL WITHDRAW THE PLAN OR PUBLICLY ANNOUNCE ITS
INTENTION NOT TO SUPPORT THE PLAN;

 

then:

 

all obligations of the Parties under this Agreement shall automatically
terminate and be of no further force or effect; provided, however, that no party
shall have the right to so terminate this Agreement upon the occurrence of any
of the events and conditions described above unless such Party has given written
notice thereof to each of the other Parties hereto specifically identifying the
basis upon which such Party is exercising its right to terminate, and the event
or condition giving rise to such right is not cured within five (5) business
days of such written notice; and, provided, further, that such event or
condition shall be deemed cured if the applicable requirement contained in such
clause is satisfied within such five (5) business day period regardless of any
date specified in such claims.  For the avoidance of doubt, (A) only a majority
in amount of the Supporting Noteholders shall have the right to terminate this
Agreement under clauses (i), (ii), (iii), (iv) or (x) referenced above, and
(B) each Supporting Noteholder shall have the right to terminate this Agreement,
but such termination shall apply only to such Supporting Noteholder, under
clauses (v) and (ix) referenced above.  During the period following the
commencement of the Chapter 11 Cases, but prior to the scheduling by the
Bankruptcy Court of the confirmation hearing, enforcement of this Agreement as
to the Company shall be limited by applicable bankruptcy law.  Termination in
accordance with this paragraph shall not affect any Party’s remedies as a result
of any breach by any other Party.  Notwithstanding anything to the contrary set
forth in this Agreement, this Agreement shall terminate on May 31, 2006.

 

8.             CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT.  THIS AGREEMENT
SHALL NOT BECOME EFFECTIVE UNTIL SUCH TIME AS EACH OF THE FOLLOWING CONDITIONS
HAVE BEEN SATISFIED:

 

(A)           THE RECEIPT BY CURATIVE OF THE AUTHORIZED SIGNATURES TO THIS
AGREEMENT BY AT LEAST TWO SUPPORTING NOTEHOLDERS HOLDING, IN THE AGGREGATE, NOT
LESS THAN 78% OF THE OUTSTANDING PRINCIPAL AMOUNT OF THE SENIOR NOTES; AND

 

(B)           EXECUTION OF THIS AGREEMENT BY THE COMPANY.

 

9.             PUBLIC DISCLOSURES.  PRIOR TO THE ISSUANCE OF ANY PUBLIC
DISCLOSURES REGARDING THE FINANCIAL RESTRUCTURING, CURATIVE SHALL CONSULT WITH
THE AD HOC COMMITTEE, OR IF NO SUCH AD HOC COMMITTEE THEN EXISTS, THE SUPPORTING
NOTEHOLDERS (OR SO MANY OF THE SUPPORTING NOTEHOLDERS THAT ARE WILLING TO
RECEIVE RESTRICTED INFORMATION AT SUCH TIME), AS TO THE FORM AND SUBSTANCE OF
SUCH PUBLIC DISCLOSURES, PROVIDED THAT AT ALL TIMES THE COMPANY SHALL BE SOLELY
RESPONSIBLE FOR EACH PUBLIC DISCLOSURE MADE BY IT.  WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, UNLESS REQUIRED BY LAWFUL SUBPOENA ISSUED BY A
COURT OF COMPETENT JURISDICTION,

 

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Curative shall not, and shall cause each of its direct and indirect subsidiaries
not to, disclose (i) any Supporting Noteholder’s identity or (ii) the amount of
such Supporting Noteholder’s holdings of Senior Notes, without the prior written
consent of such Supporting Noteholder in each case; and, if such announcement or
disclosure is so required, Curative shall afford the Supporting Noteholders a
reasonable opportunity to review and comment upon any such announcement or
disclosure prior to the applicable announcement or disclosure.

 

10.           FIDUCIARY DUTIES.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, NOTHING IN THIS AGREEMENT SHALL REQUIRE CURATIVE OR ANY DIRECTORS OR
OFFICERS OF CURATIVE (IN SUCH PERSON’S CAPACITY AS A DIRECTOR OR OFFICER OF
CURATIVE) TO TAKE ANY ACTION, OR TO REFRAIN FROM TAKING ANY ACTION, TO THE
EXTENT REQUIRED TO COMPLY WITH ITS OR THEIR FIDUCIARY OBLIGATIONS UNDER
APPLICABLE LAW.  NOTHING HEREIN WILL LIMIT OR AFFECT, OR GIVE RISE TO ANY
LIABILITY, TO THE EXTENT REQUIRED FOR THE DISCHARGE OF THE FIDUCIARY OBLIGATIONS
DESCRIBED IN THIS SECTION 10.

 

11.           IMPACT OF APPOINTMENT TO CREDITORS’ COMMITTEE.  CURATIVE AGREES TO
USE ITS REASONABLE BEST EFFORTS, IF REQUESTED BY ANY SUPPORTING NOTEHOLDER, TO
SUPPORT SUCH SUPPORTING NOTEHOLDER’S APPOINTMENT TO ANY OFFICIAL UNSECURED
CREDITORS’ COMMITTEE (“CREDITORS’ COMMITTEE”) FORMED PURSUANT TO 11 U.S.C.
§ 1102 IN THE CHAPTER 11 CASES. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY,
IF ANY SUPPORTING NOTEHOLDER IS APPOINTED TO AND SERVES ON THE CREDITORS’
COMMITTEE IN THE CHAPTER 11 CASES, THE TERMS OF THIS AGREEMENT SHALL NOT BE
CONSTRUED SO AS TO LIMIT ANY ACTIONS TAKEN IN FURTHERANCE OF SUCH SUPPORTING
NOTEHOLDER’S FIDUCIARY DUTIES TO ANY PERSON ARISING FROM ITS SERVICE ON SUCH
CREDITORS’ COMMITTEE, AND ANY SUCH EXERCISE (IN THE SOLE DISCRETION OF SUCH
SUPPORTING NOTEHOLDER) OF SUCH FIDUCIARY DUTIES SHALL NOT BE DEEMED TO
CONSTITUTE A BREACH OF THE TERMS OF THIS AGREEMENT.

 

12.           NOTICES.  ALL NOTICES, REQUESTS, ELECTIONS, AND DEMANDS UNDER OR
IN CONNECTION WITH THIS AGREEMENT SHALL BE IN WRITING AND SHALL BE DELIVERED BY
HAND, SENT BY RECOGNIZED OVERNIGHT COURIER, OR SENT BY FACSIMILE OR SIMILAR
ELECTRONIC MEANS TO THE PARTY AS SET FORTH UNDER ITS SIGNATURE HERETO, OR TO
SUCH OTHER ADDRESS OR FACSIMILE NUMBER AS SUCH PARTY SHALL PROVIDE TO ALL OTHER
PARTIES HERETO IN WRITING, AND SHALL BE DEEMED SENT OR GIVEN HEREUNDER, IN THE
CASE OF PERSONAL DELIVERY OR DELIVERY BY RECOGNIZED OVERNIGHT COURIER, ON THE
DATE OF ACTUAL DELIVERY, AND IN THE CASE OF TRANSMISSION BY FACSIMILE OR SIMILAR
ELECTRONIC MEANS, ON THE DATE OF ACTUAL TRANSMISSION.

 

13.           ENTIRE AGREEMENT; MODIFICATION; WAIVER.  THIS AGREEMENT AND THE
PLAN (THE PROVISIONS OF WHICH ARE INCORPORATED HEREIN) CONSTITUTE THE ENTIRE
AGREEMENT AMONG THE PARTIES AS TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ALL
PRIOR AND CONTEMPORANEOUS AGREEMENTS, REPRESENTATIONS, WARRANTIES, AND
UNDERSTANDINGS OF THE PARTIES, WHETHER ORAL, WRITTEN, OR IMPLIED, AS TO THE
SUBJECT MATTER HEREOF.  NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NO
SUPPLEMENT, MODIFICATION, OR AMENDMENT OF THIS AGREEMENT SHALL BE BINDING UNLESS
EXECUTED IN WRITING BY ALL PARTIES.  NO WAIVER OF ANY OF THE PROVISIONS OF THIS
AGREEMENT SHALL BE DEEMED OR CONSTITUTE A WAIVER OF ANY OTHER PROVISION, WHETHER
OR NOT SIMILAR, NOR SHALL ANY WAIVER CONSTITUTE A CONTINUING WAIVER.  NO WAIVER
SHALL BE BINDING UNLESS EXECUTED IN WRITING BY THE PARTY MAKING THE WAIVER.

 

14.           NO THIRD-PARTY BENEFICIARIES.  NOTHING CONTAINED IN THIS AGREEMENT
IS INTENDED TO CONFER ANY RIGHTS OR REMEDIES UNDER OR BY REASON OF THIS
AGREEMENT ON ANY PERSON OR

 

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entity other than the Parties hereto, nor is anything in this Agreement intended
to relieve or discharge the obligation or liability of any third party to any
Party to this Agreement, nor shall any provision give any third party any right
of subrogation or action over or against any Party to this Agreement.

 

15.           SUCCESSORS AND ASSIGNS.  THIS AGREEMENT SHALL BE BINDING UPON, AND
SHALL INURE TO THE BENEFIT OF, EACH PARTY HERETO AND THEIR RESPECTIVE LEGAL
REPRESENTATIVES, SUCCESSORS, AND ASSIGNS.

 

16.           FURTHER DOCUMENTS.  EACH PARTY HERETO AGREES TO EXECUTE ANY AND
ALL DOCUMENTS, AND TO DO AND PERFORM ANY AND ALL ACTS AND THINGS, REASONABLY
NECESSARY OR PROPER TO EFFECTUATE OR FURTHER EVIDENCE THE TERMS AND PROVISIONS
OF THIS AGREEMENT AND AGREES TO NEGOTIATE IN GOOD FAITH THE DEFINITIVE DOCUMENTS
RELATING TO THIS AGREEMENT AND THE PLAN, PROVIDED THAT THIS SHALL NOT REQUIRE
SUPPORTING NOTEHOLDERS TO INCUR ANY COSTS, FEES OR EXPENSES UNLESS PAID (OR
REIMBURSED) BY THE COMPANY.

 

17.           REPRESENTATIONS AND WARRANTIES:

 

(A)           REPRESENTATIONS AND WARRANTIES OF THE SUPPORTING NOTEHOLDERS. 
EACH SUPPORTING NOTEHOLDER HERETO SEVERALLY AND NOT JOINTLY, AS TO ITSELF ONLY,
REPRESENTS AND WARRANTS TO EACH OF THE PARTIES HERETO THAT, AS OF THE DATE OF
THIS AGREEMENT, IT IS THE LEGAL OR BENEFICIAL HOLDER OF, OR THE INVESTMENT
MANAGER WITH DISCRETIONARY AUTHORITY WITH RESPECT TO, THE PRINCIPAL AMOUNT OF
SENIOR NOTES SET FORTH BELOW ITS NAME ON THE SIGNATURE PAGE HERETO.

 

(B)           REPRESENTATIONS AND WARRANTIES OF CURATIVE.  EACH OF THE CURATIVE
ENTITIES REPRESENTS AND WARRANTS TO EACH OF THE SUPPORTING NOTEHOLDERS THAT THE
FOLLOWING STATEMENTS ARE TRUE, CORRECT, AND COMPLETE AS OF THE DATE HEREOF:

 

(I)            CURATIVE HAS DUE AUTHORITY TO ENTER INTO, TO PERFORM ITS
OBLIGATIONS UNDER, AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY, THIS
AGREEMENT; AND

 

(II)           THERE ARE NO ACTIONS, SUITS, CLAIMS, PROCEEDINGS OR, TO ITS
KNOWLEDGE, INVESTIGATIONS PENDING OR, TO ITS KNOWLEDGE, THREATENED AGAINST ANY
OF THE CURATIVE ENTITIES OR ANY OF ITS CURRENT OR FORMER DIRECTORS OR OFFICERS
THAT WOULD GIVE RISE TO A CLAIM FOR INDEMNIFICATION AGAINST ANY OF THE CURATIVE
ENTITIES BY ANY OF SUCH DIRECTORS OR OFFICERS UNDER APPLICABLE LAW OR THE
CERTIFICATE OF INCORPORATION AND/OR BY-LAWS OF ANY OF THE CURATIVE ENTITIES,
EXCEPT AS SET FORTH ON SCHEDULE 17(B)(II); AND

 

(III)          THE INFORMATION PROVIDED BY CURATIVE TO THE SUPPORTING
NOTEHOLDERS IN CONNECTION WITH THE FINANCIAL RESTRUCTURING DID NOT, WHEN
PROVIDED, CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT NOR DID IT FAIL TO
STATE ANY FACT NECESSARY IN ORDER TO MAKE SUCH INFORMATION NOT MATERIALLY
MISLEADING.

 

(C)           REPRESENTATIONS AND WARRANTIES OF CURATIVE AND THE SUPPORTING
NOTEHOLDERS.  EACH OF THE PARTIES HERETO, SEVERALLY AND NOT JOINTLY, AND AS TO
ITSELF ONLY, REPRESENTS AND WARRANTS TO THE OTHER PARTIES THAT THE FOLLOWING
STATEMENTS, AS APPLICABLE TO IT, ARE TRUE, CORRECT AND COMPLETE AS OF THE DATE
HEREOF:

 

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(I)            THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE PERFORMANCE
OF ITS OBLIGATIONS HEREUNDER HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY
CORPORATE OR SIMILAR ACTION ON ITS PART, SUBJECT, IN THE CASE OF PERFORMANCE BY
THE COMPANY, TO REQUIRED BANKRUPTCY COURT APPROVALS RELATED TO THE SOLICITATION,
CONFIRMATION, AND CONSUMMATION OF THE PLAN, AND THAT THE PERSON EXECUTING THIS
AGREEMENT ON BEHALF OF SUCH PARTY HAS BEEN DULY-AUTHORIZED TO EXECUTE THIS
AGREEMENT ON BEHALF OF AND BIND SUCH PARTY;

 

(II)           THIS AGREEMENT IS THE LEGALLY VALID AND BINDING OBLIGATION OF IT,
ENFORCEABLE AGAINST IT IN ACCORDANCE WITH ITS TERMS, SUBJECT IN THE CASE OF THE
COMPANY, TO REQUIRED BANKRUPTCY COURT APPROVALS RELATED TO THE SOLICITATION,
CONFIRMATION, AND CONSUMMATION OF THE PLAN;

 

(III)          SUBJECT IN THE CASE OF THE COMPANY TO REQUIRED BANKRUPTCY COURT
APPROVALS RELATED TO THE SOLICITATION, CONFIRMATION, AND CONSUMMATION OF A PLAN,
THE EXECUTION, DELIVERY AND PERFORMANCE BY IT OF THIS AGREEMENT DO NOT AND SHALL
NOT (A) VIOLATE ANY PROVISION OF LAW, RULE OR REGULATION APPLICABLE TO IT OR ANY
OF ITS AFFILIATES OR ITS CERTIFICATE OF INCORPORATION OR BY-LAWS, (B) CONFLICT
WITH, RESULT IN THE BREACH OF OR CONSTITUTE (WITH DUE NOTICE OR LAPSE OF TIME OR
BOTH) A DEFAULT UNDER ANY MATERIAL CONTRACTUAL OBLIGATIONS TO WHICH IT OR ANY OF
ITS AFFILIATES IS A PARTY OR UNDER ITS CERTIFICATE OF INCORPORATION OR BYLAWS,
OR (C) REQUIRE THE CONSENT OF ANY THIRD PARTY WHICH HAS NOT BEEN OBTAINED; AND

 

(IV)          IT HAS ENTERED INTO THIS AGREEMENT AFTER RECEIVING THE ADVICE OF
COUNSEL REGARDING THE MATTERS CONTEMPLATED HEREBY.

 

(D)           EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NONE OF THE
PARTIES HERETO MAKES ANY REPRESENTATION OR WARRANTY, WRITTEN OR ORAL, EXPRESS OR
IMPLIED.

 

18.           SEVERABILITY.  IF ANY PORTION OF THIS AGREEMENT SHALL BE HELD TO
BE INVALID OR UNENFORCEABLE, THEN THAT PORTION SHALL BE DEEMED MODIFIED (ONLY TO
THE EXTENT NECESSARY AND IN A MANNER CONSISTENT WITH THE REMAINDER OF THIS
AGREEMENT) SO AS TO BE VALID AND ENFORCEABLE, OR IF SUCH MODIFICATION IS NOT
REASONABLY FEASIBLE, SHALL BE DEEMED TO HAVE BEEN SEVERED OUT OF THIS AGREEMENT,
AND THE PARTIES ACKNOWLEDGE THAT THE BALANCE OF THIS AGREEMENT SHALL IN ANY
EVENT BE VALID AND ENFORCEABLE UNLESS THE EFFECT SHALL BE TO MATERIALLY ALTER
THE TERMS AND CONDITIONS OF THIS AGREEMENT.

 

19.           HEADINGS.  THE DESCRIPTIVE HEADINGS OF THE SEVERAL SECTIONS OF
THIS AGREEMENT ARE INSERTED FOR CONVENIENCE OF REFERENCE ONLY AND DO NOT
CONSTITUTE A PART OF THIS AGREEMENT.

 

20.           SPECIFIC PERFORMANCE.  THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION THE PARTIES’ AGREEMENT HEREIN TO SUPPORT THE PLAN AND TO FACILITATE
ITS CONFIRMATION, IS INTENDED AS A BINDING COMMITMENT ENFORCEABLE IN ACCORDANCE
WITH ITS TERMS.  IT IS UNDERSTOOD AND AGREED BY EACH OF THE PARTIES HERETO THAT
MONEY DAMAGES WOULD NOT BE A SUFFICIENT REMEDY FOR ANY BREACH OF THIS AGREEMENT
BY ANY PARTY AND EACH NON-BREACHING PARTY SHALL BE ENTITLED TO SPECIFIC
PERFORMANCE AND INJUNCTIVE OR OTHER EQUITABLE RELIEF AS A REMEDY OF ANY SUCH
BREACH.

 

21.           INTERPRETATION.  THIS AGREEMENT IS THE PRODUCT OF NEGOTIATIONS
AMONG THE PARTIES, AND IN THE ENFORCEMENT OR INTERPRETATION HEREOF, IS TO BE
INTERPRETED IN A NEUTRAL MANNER,

 

8

--------------------------------------------------------------------------------

 

and any presumption with regard to interpretation for or against any Party by
reason of that Party having drafted or caused to be drafted this Agreement, or
any portion hereof, shall not be effective in regard to the interpretation
hereof.

 

22.           CONSIDERATION.  IT IS HEREBY ACKNOWLEDGED BY THE PARTIES THAT NO
PAYMENT OR ADDITIONAL CONSIDERATION SHALL BE DUE OR PAID TO THE SUPPORTING
NOTEHOLDERS FOR THEIR AGREEMENT TO VOTE IN ACCORDANCE WITH AND OTHERWISE COMPLY
WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT OTHER THAN THE OBLIGATIONS OF
THE OTHER PARTIES HEREUNDER.

 

23.           RULE OF INTERPRETATION.  NOTWITHSTANDING ANYTHING CONTAINED HEREIN
TO THE CONTRARY, IT IS THE INTENT OF THE PARTIES THAT ALL REFERENCES TO VOTES OR
VOTING IN THIS AGREEMENT BE INTERPRETED TO INCLUDE (I) VOTES OR VOTING ON A PLAN
OF REORGANIZATION UNDER THE BANKRUPTCY CODE AND (II) ALL MEANS OF EXPRESSING
AGREEMENT WITH, OR REJECTION OF, AS THE CASE MAY BE, A RESTRUCTURING OR
REORGANIZATION TRANSACTION THAT IS NOT IMPLEMENTED UNDER THE BANKRUPTCY CODE.

 

24.           COUNTERPARTS; FAX SIGNATURES.  THIS AGREEMENT MAY BE EXECUTED IN
TWO OR MORE COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF
WHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.  DELIVERY OF AN
EXECUTED COUNTERPART OF A SIGNATURE PAGE BY FACSIMILE TRANSMISSION SHALL BE
EFFECTIVE AS DELIVERY OF A MANUALLY EXECUTED COUNTERPART.

 

25.           GOVERNING LAW.  EXCEPT TO THE EXTENT THAT THE BANKRUPTCY CODE OR
BANKRUPTCY RULES ARE APPLICABLE, THE RIGHTS AND OBLIGATIONS ARISING UNDER THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED
ENTIRELY WITHIN SUCH STATE.

 

26.           JURISDICTION.  BY ITS EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ANY LEGAL
ACTION, SUIT, OR PROCEEDING AGAINST IT WITH RESPECT TO ANY MATTER UNDER OR
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR FOR RECOGNITION OR
ENFORCEMENT (INCLUDING SPECIFIC PERFORMANCE) OF ANY JUDGMENT RENDERED IN ANY
SUCH ACTION, SUIT OR PROCEEDING, SHALL BE BROUGHT IN THE BANKRUPTCY COURT OR
PRIOR TO THE COMMENCEMENT OF THE CHAPTER 11 CASES, IN THE FEDERAL DISTRICT COURT
OR APPROPRIATE STATE COURT LOCATED WITHIN THE STATE OF NEW YORK.  BY ITS
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO IRREVOCABLY
ACCEPTS AND SUBMITS ITSELF TO THE JURISDICTION OF THE BANKRUPTCY COURT AND THE
FEDERAL AND STATE COURTS LOCATED WITHIN THE STATE OF NEW YORK FOR SUCH PURPOSES
AND AGREES THAT ANY SUCH LEGAL ACTION, SUIT, OR PROCEEDING SHALL CONSTITUTE A
CORE PROCEEDING WITHIN THE MEANING OF 28 U.S.C. § 157(B)(2).

 

27.           EXPENSES.

 

(a)           In any action or proceeding brought by a Party hereto against any
other Party hereto to enforce any provision of this Agreement, or to seek
damages for a breach of any provision hereof, or where any provision hereof is
validly asserted as a defense, each party shall bear its own attorneys’ fees and
costs.

 

(b)           The Company shall pay or procure the payment of, before the
commencement of the Chapter 11 Cases, all prepetition fees and expenses of the
Ad Hoc Committee and the Indenture Trustee for the Senior Notes (the “Indenture
Trustee”) and of their respective legal and

 

9

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financial advisors relating to the Financial Restructuring, outstanding at the
time of such commencement and to undertake in the Plan to pay, or procure the
payment of, upon the consummation of the Plan all postpetition fees and expenses
of the Ad Hoc Committee and the Indenture Trustee and of their respective legal
and financial advisors relating to the Chapter 11 Cases.  For the avoidance of
doubt, nothing in this Section 27(b) shall require the Company to pay the fees
and expenses of more than one financial advisor and one legal advisor to the Ad
Hoc Committee.

 

28.           EFFECTIVENESS OF THE AGREEMENT.  THIS AGREEMENT SHALL BE EFFECTIVE
ON THE DATE IT HAS BEEN SIGNED BY EACH OF THE SUPPORTING NOTEHOLDERS AND EACH OF
THE CURATIVE ENTITIES.  WITH RESPECT TO ANY PARTY WHO BECOMES A PARTY HERETO
AFTER THE DATE HEREOF, INCLUDING TRANSFEREES PURSUANT TO SECTION 5 HEREOF, THIS
AGREEMENT SHALL BE EFFECTIVE AS OF THE DATE SUCH SIGNATORY EXECUTES AND DELIVERS
THIS AGREEMENT.

 

IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be
executed and delivered by its duly authorized officers as of the date first
written above.

 

[Remainder of page intentionally blank; signature pages follow]

 

10

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CURATIVE HEALTH SERVICES, INC.,

 

a Minnesota corporation formerly known as
Curative Holding Co.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

 

--------------------------------------------------------------------------------

 

 

EBIOCARE.COM, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

HEMOPHILIA ACCESS, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

APEX THERAPEUTIC CARE, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

CHS SERVICES, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

CURATIVE HEALTH SERVICES OF NEW
YORK, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

OPTIMAL CARE PLUS, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

INFINITY INFUSION, LLC

 

 

 

By: Curative Health Services Co., its Sole
Member

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

INFINITY INFUSION II, LLC

 

 

 

By: Curative Health Services Co., its Sole
Member

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

INFINITY INFUSION CARE, LTD.

 

 

 

By: Infinity Infusion II, LLC, its Sole General
Partner

 

 

 

By: Curative Health Services Co., the Sole
Member of Infinity Infusion II, LLC

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

MEDCARE, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

CURATIVE PHARMACY SERVICES, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

CURATIVE HEALTH SERVICES CO.,

 

a Minnesota corporation formerly known as
Curative Health Services, Inc.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

CRITICAL CARE SYSTEMS, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

CURATIVE HEALTH SERVICES III CO.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

--------------------------------------------------------------------------------

 

 

EXHIBIT A

Term Sheet

 

--------------------------------------------------------------------------------

 

December 2, 2005

 

CURATIVE HEALTH SERVICES, INC.

TERMS OF RESTRUCTURING

 

This term sheet sets forth a brief summary of the principal terms of a proposed
restructuring (the “Restructuring”) of the $185 million of 103/4 % Senior Notes
due 2011 (the “Senior Notes”) issued by Curative Health Services, Inc. (“CURE”).
Capitalized terms used but not defined herein have the respective meanings
ascribed thereto in the Indenture dated as of April 23, 2004, among CURE, the
Guarantors (as defined therein), and Wells Fargo Bank, N.A. as Trustee.  As used
herein, CURE, the Guarantors, and any remaining subsidiaries of CURE are
referred to as “Curative.”  This term sheet does not represent a commitment,
obligation or understanding on the part of Curative, the holders of the Senior
Notes (the “Senior Noteholders”), or the Trustee to, as applicable, (a) amend,
waive or otherwise modify (including without limitation by way of restructuring,
refinancing, termination, cancellation or exchange) any agreement, including
without limitation the Senior Notes, or any term or provision thereof or of any
agreement, instrument or document related thereto, (b) forbear from exercising
remedies with respect thereto, (c) agree with, admit or concede the validity or
enforceability of any claim by the Senior Noteholders or (d) take action, or
refrain from taking action, with respect to the foregoing.  No party shall be so
obligated unless and until all internal credit, board and other necessary
approvals, as applicable, are sought and obtained, all definitive documentation
is negotiated and executed and all conditions precedent are satisfied or waived.

 

The terms discussed herein are an integrated offer, are not divisible except as
described herein, and are subject to the terms and conditions hereof.  This term
sheet is provided in confidence and may be distributed only with the express
written consent of CURE and counsel to the Ad Hoc Committee of Senior
Noteholders (the “Ad Hoc Committee”).  This term sheet does not include a
description of all of the terms, conditions and other provisions that are to be
contained in the definitive documentation governing such matters, which remain
subject to discussion and negotiation to the extent not inconsistent with the
specific matters set forth herein.  This term sheet is proffered in the nature
of a settlement proposal in furtherance of settlement discussions, and is
intended to be entitled to the protections of Rule 408 of the Federal Rules of
Evidence and any other applicable statutes or doctrines protecting the use or
disclosure of confidential information and information exchanged in the context
of settlement discussions.

 

THIS TERM SHEET IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OF CURATIVE OR A
SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN OF REORGANIZATION.  SUCH OFFER
OR SOLICITATION SHALL ONLY BE MADE IN COMPLIANCE WITH ALL APPLICABLE SECURITIES
LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE.

 

--------------------------------------------------------------------------------

 

I.

 

Companies Affected:

 

The Restructuring shall, at a minimum, impact CURE and the Guarantors.

 

 

 

 

 

II.

 

GECC Credit Facility:

 

Except as otherwise provided herein, all of the respective obligations of
Curative pursuant to the GECC Credit Facility shall be refinanced, unimpaired
and/or reinstated in full. Depending on the form of the Restructuring, certain
consents, waivers, amendments or modifications may be required from a requisite
number of lenders under the GECC Credit Facility.

 

 

 

 

 

III.

 

Department of Justice Obligations:

 

The approximately $375,000 which remains outstanding to the Department of
Justice in connection with Curative’s settlement of all federal investigations
and legal proceedings related to certain whistleblower lawsuits shall be
unimpaired/unaffected by the Restructuring.

 

 

 

 

 

IV.

 

Apex Convertible Note:

 

CURE and the Ad Hoc Committee shall evaluate whether the $1.54 million
convertible Note (the “Apex Convertible Note”) issued in connection with
Curative’s purchase of Apex Therapeutic Care, Inc. (“Apex”) may be subordinated
under the Bankruptcy Code and shall treat such claim as subordinated if such
treatment is consistent with applicable bankruptcy law. If CURE and the Ad Hoc
Committee mutually determine that such treatment is not consistent with
applicable bankruptcy law, or mutually agree otherwise, then the Apex
Convertible Note shall be treated as a disputed general unsecured claim and
shall receive the same form of consideration as received by the Senior
Noteholders in the full amount of the claim related to the Apex Convertible Note
allowed by the bankruptcy court; provided, however, that the ultimate resolution
of the claim related to the Apex Convertible Note by the bankruptcy court shall
not be a condition to the occurrence of the effective date of any relevant plan
of reorganization (the “Effective Date”) and such consideration shall be
reserved pending the resolution of such claim.

 

2

--------------------------------------------------------------------------------

 

V.

 

Retail Pharmacies’ Indemnification Claims Related to the DHS Audit:

 

Any allowed indemnification claims of the retail pharmacies against Apex and/or
eBioCare.com (“eBioCare”) resulting from the final DHS audit and allowed by the
bankruptcy court (each a “DHS Claim” and collectively the “DHS Claims”) shall be
treated as general unsecured claims solely against Apex and eBioCare, as
applicable, and shall receive: (a) if the pharmacies vote as a class to accept
the plan, either (i) a note (each a “DHS Note” and collectively the “DHS Notes”)
payable over time with a principal amount equal to each respective allowed claim
as a percentage of the amount of all allowed unsecured claims against Apex
and/or eBioCare, as applicable, multiplied by the value of Apex and/or eBioCare,
as applicable (the “DHS Percentage Recovery”). The DHS Notes shall each have a
term of 7 years and shall accrue (but not pay) interest at the rate of interest
such that the present value of the DHS Note equals the face amount of the DHS
Note, or such other terms as the Ad Hoc Committee and Curative mutually agree or
otherwise established by the bankruptcy court; provided, however, that the DHS
Notes shall not be issued to each retail pharmacy until their respective claims
are allowed by the bankruptcy court, and interest shall not begin to accrue
until each respective DHS Note is issued; or (ii) if specifically designated by
a holder, a cash payment payable on the later of (A) 30 days after the DHS
Claims are allowed by the bankruptcy court, or (B) the Effective Date, equal to
50% of the face amount of the DHS Note; (b) if the pharmacies vote to reject the
plan, the same form of consideration as the Senior Noteholders described in
Section XI (the “Senior Noteholder Recovery”) in an amount equal to the
respective DHS Note; or (c) such other consideration agreed to by CURE and the
Ad Hoc Committee or as otherwise approved by the bankruptcy court. The ultimate
resolution of the DHS Claims and the final terms of any DHS Note provided to
each of the retail pharmacies as consideration for their claims shall not be a
condition to the Effective Date and such consideration (whether DHS Notes, cash
or New CURE Stock (as defined below)) shall be reserved pending the resolution
of such claims.

 

3

--------------------------------------------------------------------------------

 

VI.

 

Litigation Claims:

 

All litigation claims (excluding the DHS Claims) allowed by the bankruptcy court
(the “Apex  Litigation Claims”) against Apex and eBioCare shall receive the same
treatment as the DHS Claims as described in Section V above.

Litigation claims against Curative (excluding Apex and eBioCare) allowed by the
bankruptcy court (the “Curative Litigation Claims”) shall receive (a) if the
Curative Litigation Claims vote as a class to accept the plan: (i) a note
payable over time with a principal amount equal to the respective allowed claim
as a percentage of the amount of all allowed unsecured claims against Curative
on a consolidated basis (excluding Apex and eBioCare) multiplied by the value of
Curative on a consolidated basis (excluding Apex and eBioCare) (each a “Curative
Litigation Note” and collectively the “Curative Litigation Notes”). The Curative
Litigation Notes shall each have a term of 7 years and shall accrue (but not
pay) interest at the rate of interest such that the present value of the
Curative Litigation Note equals the face amount of the Curative Litigation Note,
or such other terms as the Ad Hoc Committee or Curative mutually agree or
otherwise established by the bankruptcy court; provided, however, that the
Curative Litigation Notes shall not be issued until the respective claims are
allowed by the bankruptcy court, and interest shall not begin to accrue until
each respective Curative Litigation Note is issued; or (ii) if specifically
designated by a holder, a cash payment payable on the later of (A) 30 days after
the Curative Litigation Claims are allowed by the Bankruptcy Court, or (B) on
the Effective Date, equal to 50% of the face amount of the Curative Litigation
Note; (b) if the Curative Litigation Claims vote as a class to reject the plan,
the Senior Noteholder Recovery; or (c) such other consideration agreed to by
CURE and the Ad Hoc Committee or as otherwise approved by the bankruptcy court.

 

4

--------------------------------------------------------------------------------

 

VII.

 

New Second-Lien Notes or
Increased Credit Facility:

 

Curative shall incur an additional $27.75mm of indebtedness (the “New Debt”),
structured at the Ad Hoc Committee’s option, in the form of second-lien notes or
as part of a larger senior credit facility; provided, however, that the total
Funded Debt Obligations of Curative upon the Effective Date shall not exceed
$77.75mm.

The closing of the New Debt, and the payment of the Cash Consideration (as
defined below) to the Senior Noteholders, shall occur on or before the Effective
Date.

“Funded Debt Obligations” shall include the total amount of the exit facility
funded and outstanding as of the Effective Date, the New Debt, any allocated
debt on account of the DHS Notes, Apex Litigation Claims, Curative Litigation
Claims, Apex Unsecured Claims and Curative Unsecured Claims, if applicable, and
any other funded debt mutually agreed to by the Ad Hoc Committee and Curative;
provided, further, that the available and funded amount of the exit facility
shall be mutually agreed to by the Ad Hoc Committee and Curative.

 

5

--------------------------------------------------------------------------------

 

VIII.

 

Trade Credit and Other General Unsecured Claims:(1)

 

All general unsecured claims allowed by the bankruptcy court against Curative
(other than the claims of contract counter-parties, and excluding general
unsecured claims against Apex and eBioCare and excluding the Curative Litigation
Claims and Apex Litigation Claims) (the “Curative Unsecured Claims”) shall
receive: (a) if the Curative Unsecured Claims vote as a class to accept the
plan: (i) a note payable over time with a principal amount equal to the
respective allowed claim as a percentage of the amount of all allowed unsecured
claims against Curative on a consolidated basis (excluding Apex and eBioCare)
multiplied by the value of Curative on a consolidated basis (excluding Apex and
eBioCare) (each a “Curative Unsecured Note” and collectively the “Curative
Unsecured Notes”). The Curative Unsecured Notes shall each have a term of 7
years and shall accrue (but not pay) interest at the rate of interest such that
the present value of the Curative Unsecured Note equals the face amount of the
Curative Unsecured Note, or such other terms as the Ad Hoc Committee or Curative
mutually agree or otherwise established by the bankruptcy court; provided,
however, that the Curative Unsecured Notes shall not be issued until the
respective claims are allowed by the bankruptcy court, and interest shall not
begin to accrue until each respective Curative Unsecured Note is issued; or
(ii) if specifically designated by a holder, a cash payment payable on the later
of (A) 30 days after the general unsecured claims are allowed by the Bankruptcy
Court, or (B) the Effective Date, equal to 50% of the face amount of the
Curative Unsecured Note; (b) if the Curative Unsecured Claims vote as a class to
reject the plan, the Senior Noteholder Recovery; or (c) such other consideration
agreed to by CURE and the Ad Hoc Committee or as otherwise approved by the
bankruptcy court.

All general unsecured claims of contract counter-parties against Curative
(including Apex and eBioCare), other than non-residential real property leases
which may be rejected by Curative, shall be unimpaired, assumed and paid in cash
in the ordinary course of business; provided, however, to the extent the
contracts between Apex and/or eBioCare and the retail pharmacies are executory
such contracts shall be rejected.

 

--------------------------------------------------------------------------------

(1)           It is anticipated that there will be no general unsecured claims
against Curative as of the petition date other than claims of (a) contract
counter-parties, (b) the holders of the Apex Note, DHS Claims, Apex Litigation
Claims and Curative Litigation Claims, (c) the Senior Noteholders and (d) claims
entitled to administrative expense status under section 503(b)(9) of the
Bankruptcy Code.

 

6

--------------------------------------------------------------------------------

 

 

 

 

 

If there are any allowed general unsecured claims against Apex and eBioCare (the
“Apex Unsecured Claims”), such Apex Unsecured Claims shall receive the same
treatment as the DHS Claims as described in Section V above.

 

 

 

 

 

IX.

 

Federal, State and Local Tax Claims:

 

The claims of Federal, State and Local taxing authorities against Curative and
its subsidiaries shall be paid in full in cash when due or as permitted by
section 1129(a)(9) of the Bankruptcy Code.

 

 

 

 

 

X.

 

Other Priority Claims:

 

Other priority claims against Curative and its subsidiaries shall be paid in
full in cash upon consummation of the Restructuring, or upon such other terms as
CURE and the beneficiary of such payment may agree; provided, however, that
claims entitled to administrative expense status in accordance with
section 503(b)(9) of the Bankruptcy Code shall be paid in full in cash when due
and in the ordinary course of business.

 

 

 

 

 

XI.

 

Senior Note Claims:

 

The Senior Noteholders shall not receive the interest payment due on November 1,
2005 under the Senior Notes.

On the Effective Date, all of the Senior Notes shall be cancelled and in
exchange therefor, each Senior Noteholder (together with, if applicable, the
holders of the Apex Convertible Note, the DHS Claims (at the DHS Percentage
Recovery or as otherwise agreed), the Apex Litigation Claims (at the DHS
Percentage Recovery), the Curative Litigation Claims, the Curative Unsecured
Claims and the Apex Unsecured Claims (at the DHS Percentage Recovery)) shall
receive (a) a pro-rata portion of newly authorized and issued CURE common stock
(the “New CURE Stock”) representing 100% of the common stock ownership of CURE
as of the Effective Date and (b) a pro-rata portion of the net proceeds of the
New Debt (the “Cash Consideration”).

The allowance by the bankruptcy court of any claim

 

7

--------------------------------------------------------------------------------

 

 

 

 

 

listed above prior to the Effective Date shall not be a condition to the
Effective Date, and any consideration due such claim shall be reserved pending
such final resolution by the bankruptcy court.

All such New CURE Stock allocations are subject to dilution from the exercise of
options on the re-capitalized equity to be reserved for distribution pursuant to
the CURE LTIP (as defined below). CURE shall take all reasonably necessary
actions to de-register the New CURE Stock under the Securities Exchange Act of
1934. On the Effective Date, CURE shall enter into a Registration Rights
Agreement in form, scope and substance reasonably satisfactory to the Ad Hoc
Committee providing the Senior Noteholders with customary demand, piggy-back
registration rights, and tag along and drag along rights with respect to the New
CURE Stock.

Curative and the Ad Hoc Committee agree to make reasonable accommodations with
respect to the Senior Noteholders if it would be reasonably likely that Curative
would be required to register the New CURE Stock under the Securities and
Exchange Act of 1934, as amended.

CURE shall provide certain information (via website posting), including but not
limited to, audited annual financial statements, unaudited quarterly financial
statements and disclosures regarding material events.

 

 

 

 

 

XII.

 

Section 510(b) Claims:

 

All securities litigation claims and other claims that come within the scope of
section 510(b) of the Bankruptcy Code shall be treated in accordance therewith.

 

 

 

 

 

XIII.

 

Management Incentive:

 

On the Effective Date, a new long-term stock incentive program (the “CURE LTIP”)
shall be approved and implemented. The terms of the CURE LTIP are attached
hereto as Exhibit A.

 

8

--------------------------------------------------------------------------------

 

XIV.

 

Corporate Governance:

 

As of the Effective Date, CURE shall have a five person Board of Directors
consisting of CURE’s current chief executive officer, and four nominees of the
Senior Noteholders selected by a majority in amount of the Senior Noteholders
who are members of the Ad Hoc Committee; provided, however, that the four
nominees shall be selected by such Senior Noteholders no later than the earlier
of (a) ten days prior to the confirmation hearing on the Plan and
(b) February 28, 2006.

On the Effective Date, CURE shall reincorporate as a Delaware corporation and
adopt revised Bylaws and Certificate of Incorporation which shall be in form,
scope and substance satisfactory to the Ad Hoc Committee.

 

 

 

 

 

XV.

 

Releases:

 

The plan of reorganization shall include a full discharge and release of
liability in favor of (a) CURE and each of its subsidiaries, (b) the Senior
Noteholders, and (c) each of their respective principals, employees, agents,
officers, directors, and professionals from: (i) any and all claims and causes
of action arising prior to the Effective Date and (ii) any and all claims
arising from the actions taken or not taken in good faith in connection with the
Restructuring.

 

 

 

 

 

XVI.

 

Conditions:

 

The Restructuring proposal set forth herein shall be subject to, among other
things:

 

i.      the receipt of all required legal and regulatory approvals;

 

ii.     the approval of the Board of Directors of CURE and the Guarantors;

 

iii.    the negotiation and execution of definitive documentation reasonably
acceptable to the signatories of the supporting agreements for the
Restructuring.

 

 

 

 

 

XVII.

 

Plan Support Agreement:

 

Upon agreement between Curative and the Senior Noteholders regarding the terms
of the Restructuring, Curative and the holders of at least 78% of the Senior
Notes shall enter into one or more formal agreements (the “Plan Support
Agreements”). The signatories to the Plan Support Agreements would, among other

 

9

--------------------------------------------------------------------------------

 

 

 

 

 

things, support the Restructuring, and (a) extend the time for the Company to
disclose Company Confidential Information until the date of the execution of the
Plan Support Agreements; (b) subject to receipt of an approved disclosure
statement satisfying the requirements of the Bankruptcy Code applicable to
disclosure statements and United States securities laws, as applicable, that
contains information concerning Curative and a plan that conforms with the terms
of the Restructuring (the “Plan”), vote all of its claims against CURE and the
Guarantors to accept such Plan and otherwise support, and take all reasonable
actions to facilitate, the proposal, solicitation, confirmation, and
consummation of such Plan; (c) not object to confirmation of, or vote to reject,
the Plan or otherwise commence any proceeding to oppose or alter the Plan, the
disclosure statement in respect of the Plan, the solicitation of its acceptance
of the Plan or any other reorganization documents containing terms and
conditions consistent in all material respects with the term sheet; (d) vote
against any restructuring, workout or plan of reorganization relating to
Curative other than the Plan; and (e) not directly or indirectly seek, solicit,
support, encourage, vote for, consent to, or participate in the negotiation or
formulation of (x) any plan of reorganization, proposal, offer, dissolution,
winding up, liquidation, reorganization, merger, or restructuring for any part
of Curative other than the Plan, (y) any disposition outside of the Plan of all
or any substantial portion of the assets of Curative or any of its subsidiaries,
or (z) any other action that is inconsistent with, or that would delay or
obstruct the proposal solicitation, confirmation, or consummation of, the Plan.
The signatories to the Plan Support Agreement would, among other things, support
the Plan and the Restructuring and in the event that any signatory sells,
assigns or otherwise conveys its claims (a “Sale Transaction”), it would
condition said Sale Transaction upon the transferee’s assumption of the Plan
Support Agreement.

 

 

 

 

 

XVIII.

 

Plan Support Agreement:

 

It shall be a condition precedent to Curative taking action to implement the
Restructuring that the holders of at least 78% of the Senior Notes have each
executed and delivered to Curative Plan Support Agreements.

 

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XIX.

 

Implementation:

 

The Restructuring shall be effectuated through a mutually acceptable
pre-packaged or pre-arranged Chapter 11 plan of reorganization of Curative, the
Guarantors and, only to the extent necessary, any of Curative’s remaining
domestic subsidiaries. The definitive documentation shall be in form and
substance reasonably satisfactory to Curative and the Ad Hoc Committee and may
not contain terms which vary materially from the terms described herein.

 

 

 

 

 

XX.

 

Fees and Expenses:

 

In addition to paying the expenses of its own legal and financial advisors,
Curative shall continue to pay the fees and expenses of Bingham McCutchen LLP
and Houlihan Lokey Howard & Zukin through the Effective Date, in accordance with
the terms of the existing fee agreements. CURE also agrees to pay the fees and
expenses of local counsel (if required) to the Ad Hoc Committee through the
Effective Date.

 

 

 

 

 

XXI.

 

Warrants:

 

Subject to applicable state and federal laws and regulations, the holders of
existing CURE common stock shall be entitled to receive a pro rata share of
warrants in an aggregate amount of 2.5% of New CURE Stock with a strike price
set at a price where the recovery to the Senior Noteholders is equal to $185 mm
plus accrued interest through the petition date. Notwithstanding the foregoing,
warrants shall only be issued if such issuance would not reasonably be likely to
require Curative to register such warrants or New CURE Stock under the
Securities Exchange Act of 1934, as amended.

 

 

 

 

 

XXII.

 

Indemnification/D&O Insurance:

 

All indemnification obligations, D&O insurance policies and other protections in
favor of Curative’s officers and directors shall be assumed and remain in full
force and effect both during and after any chapter 11 cases.

 

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EXHIBIT A

 

CURE LTIP

 

•                  There shall be no cash key employee retention program
payments made to any employees of Curative during the chapter 11 cases.

 

•                  All employment agreements shall be assumed in connection with
a plan of reorganization provided, however, all employment agreements shall be
amended: (i) to ensure compliance with section 409A of the Internal Revenue Code
of 1986, (ii) to ensure they are consistent with the CURE LTIP, (iii) to provide
that no employee shall be entitled to any severance solely for a change of
control resulting from the Restructuring, and (iv) to provide other customary
provisions, including non-compete, termination and severance provisions;
provided, further, that the employment agreement of the CEO shall be assumed as
amended to provide for his agreement to accept one half ($750,000) of his cash
Stay Bonus upon the Effective Date and reinvest $375,000 of the after tax
payment in New CURE Stock with a market value of $375,000, with the amount of
New CURE Stock issued determined at plan value. Further, for the avoidance of
doubt, the remaining portion of CEO’s Stay Bonus ($750,000) shall be paid in
cash no later than April 23, 2007, unless payable earlier under the terms of the
Employment Agreement, including the following: (i) a termination by CEO for Good
Reason following a Change of Control (the restructuring shall not constitute a
Change of Control); or (ii) a termination by the Company of CEO without Cause;
provided, further, that the employment agreement of the CFO shall be assumed as
amended to provide (x) that the CFO shall continue with Curative through
April 30, 2006, (y) for the payment of severance of one year’s Base Salary and
(z) the elimination of the stay bonus.

 

•                  Curative’s existing employee bonus programs shall remain in
full force and effect and the existing board of directors may establish bonus
awards under such bonus programs until the Effective Date.  After the Effective
Date, Curative’s new board of directors may establish bonus awards under such
bonus programs.

 

•                  The following allocation of New CURE Stock shall be
distributed at the discretion of Curative’s new board of directors to 25
employees to be identified consistent with Exhibit B attached hereto.(2)

 

•                  2.5% Restricted Stock – time vesting only.

 

•                  9.5% Options — Strike price equal to FMV (plan value) —
Curative’s new board of directors shall approve a vesting schedule in
consultation with the CEO who will work with a nationally recognized healthcare
employee compensation expert to develop a recommendation based on an analysis of
management incentive programs for healthy or restructured healthcare companies
and other restructured

 

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(2)                                  The New CURE Stock allocated to management
shall be structured in a manner that minimizes any adverse tax treatment to
Curative and to management which may include a vesting buyback provision.

 

12

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companies, if deemed comparable and appropriate by the healthcare employee
compensation expert.(3)

 

•                  In the event of a change in control (the Restructuring shall
not constitute such change of control), all Restricted Stock and Options issued
under the LTIP shall automatically vest if not already vested.

 

•                  In the event of a sale of any business unit, the Restricted
Stock issued under the LTIP shall automatically vest, if not already vested, for
the purposes of any distribution of proceeds from the sale.

 

•                  In the event of a sale of any business unit which results in
the sale proceeds being distributed to shareholders, the strike price of the
Options issued under the LTIP shall be automatically adjusted to reflect the
impact of the sale.  The mechanism for such adjustment shall be determined in
consultation with the nationally recognized healthcare employee consultation
expert.

 

•                  In the event of a sale of any business unit, the proceeds
from such sale shall first be used to pay down the Funded Debt Obligations.

 

•                  In the event that Curative’s Chief Executive Officer and new
board of directors cannot agree to a vesting schedule for the 9.5% Options
within 30 from the Effective Date, the employment contracts for those employees
entitled to the 9.5% Options shall be amended to permit any such employee to
resign from Curative and receive severance, but not Options, and only to the
extent of severance, if any, due to any such employee with respect to a
termination without cause.  For the avoidance of doubt, no employee shall be
entitled to any severance for a change of control solely resulting from the
Restructuring.

 

•                  The new board of directors of Curative shall develop and
implement an incentive compensation program appropriate for all other employees
of Curative.

 

 

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(3)                                  The nationally recognized healthcare
employee compensation expert shall be retained by Curative, in consultation with
the Ad Hoc Committee, within 30 days from the date hereof.

 

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EXHIBIT B

 

Executive Management Team (7)

 

President and Chief Executive Officer

Chief Operating Officer

Chief Financial Officer

Sr. Vice President Operations

Sr. Vice President Sales & Marketing

Sr. Vice President Finance

Sr. Vice President Operations WC

 

Senior Management Team (18)

 

Vice President Human Resources

Vice President Sr. Corporate Counsel

Vice President Corporate Compliance

Vice President Information Technology

Vice President Billing & Reimbursement

Vice President Clinical Services

Vice President Operations

 

Area Vice President — the purpose of this position is to direct sales and
operations of multiple Critical Care Systems branches within an assigned region
in order to maximize revenues and profitability in accordance with corporate
goals and philosophies.

 

Vice President, NE

Vice President, West

Vice President, Atlantic

Vice President, South

Vice President, Midwest

 

Regional Director, Wound Care  — is responsible for the direct operations
management of both existing Wound Care Centers/Wound Management Programs in the
area assigned and those in implementation.  This position is responsible for the
achievement of the financial objectives (full P&L responsibility), quality
healing outcome results of their respective area, and ensures that departmental
efficiency goals are achieved.

 

Regional Director, Wound Care

Regional Director, Wound Care

Regional Director, Wound Care

Regional Vice President, Wound Care

 

Director of Business Development, Wound Care  — is responsible for the
development of assigned new Curative service models and achievement of assigned
development revenue as defined by the goals of the territory and the region. 
Works in a team approach towards achievement of territory and region goals
adhering to the Curative mission statement and the Company’s strategic and
operating principles.

 

Director of Business Development

Director of Business Development

 

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EXHIBIT B

Transferee Acknowledgment

 

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EXHIBIT B

 

 

[TO BE INSERTED INTO LETTERHEAD OF TRANSFEROR]

 

 

                                          , 2005

 

                                           (the “Transferee”)

 

Re: Transferee Acknowledgment

 

Ladies and Gentlemen:

 

This letter (this “Letter”) is in reference to paragraph 5 of that certain Plan
Support Agreement (the “PSA”) entered into as of December     , 2005, among
Curative Health Services, Inc. and its subsidiaries (collectively, the “Company”
or “Curative”) and the Supporting Noteholders.  All capitalized terms used but
not defined herein have the meanings given to them in the PSA.

 

Paragraph 5 of the PSA provides, in relevant part, as follows:

 

As long as this Agreement has not been terminated pursuant to Section 7 hereof
and the confirmation and effective date of the Plan have not occurred, no
Supporting Noteholder may,  directly or indirectly sell, assign, transfer,
hypothecate, grant any option or right to acquire, or otherwise dispose of
(each, a “Transfer”) all or any portion of any claim against or equity interest
in the Company or any interest therein, unless the purchaser, assignee, or
transferee (the “Transferee”) agrees in writing in the form attached hereto as
Exhibit B (such writing a “Transferee Acknowledgment”) at the time of such
Transfer to be bound by all of the terms of this Agreement in its entirety,
without revisions, as a Party hereto, including without limitation Section 1
hereof.  Upon execution of the Transferee Acknowledgment, the Transferee shall
be deemed to be a Supporting Noteholder.  Any Transfer not effected in
accordance with the foregoing shall be deemed void ab initio.  In the event of a
Transfer, the transferor shall, within three business days after such Transfer,
provide notice of such transfer to Curative Health Services, Inc., together with
a copy of the Transferee Acknowledgment and, if the transferor has transferred
all of its claims subject to this Agreement, then such transferor shall
automatically be released from any further obligations hereunder.

 

--------------------------------------------------------------------------------

 

As of                                       , 2005, we, the undersigned have
agreed to Transfer the following principal amount of Senior Notes to the
countersigning party, as Transferee:

 

Issuance

 

Issue Amount

 

Maturity

 

Principal Amount
Transferred

 

10.75% Senior Notes

 

$

185 million

 

2011

 

$

 

 

 

By your countersignature in the space provided below, you, as Transferee,
represent and warrant that you have received the PSA (attached as Exhibit A) and
the Term Sheet (attached hereto as Exhibit B).

 

Please indicate your agreement to be bound by (a) the PSA as a Supporting
Noteholder and (b) the terms and conditions of this Letter, in each case in
their entirety without revisions (including with respect to any and all claims
or interests you already may hold against or in Curative prior to the Transfer
of the interests described above), by countersigning below and returning a copy
of this Letter to the Transferor.  This Letter may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Letter. Delivery of an executed signature page of
this Letter by facsimile shall be effective as delivery of a manually executed
signature page of this Letter.  Upon receipt of your countersignature to this
Letter, which is a precondition to any Transfer of the interests described
above, this Letter shall be provided to Curative Health Services, Inc. pursuant
to paragraph 5 of the PSA.

 

Very truly yours,

 

[INSERT NAME OF TRANSFEROR]

 

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ACCEPTED AND AGREED

 

[INSERT NAME OF TRANSFEREE]

 

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Exhibit A

 

Plan Support Agreement

 

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Exhibit B

 

Term Sheet

 

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