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


 










(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.


 





















 


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


 


3





















 


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


 


4





















 


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,


 


5





















 


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


 


6





















 


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:


 


7





















 


(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





















 


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]


 


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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.

  



 


10





















 


	
  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.

  



 


11





















 


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


 










(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





















 


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.


 


 










(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.


 


13





















 


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


 


14





















 


EXHIBIT B


Transferee
Acknowledgment


 





















 


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]

  



 





















 


	
  ACCEPTED AND AGREED

  
	
   

  
	
  [INSERT NAME OF
  TRANSFEREE]

  



 





















 


Exhibit A


 


Plan Support Agreement


 





















 


Exhibit B


 


Term Sheet