Document:

Exhibit 10.3

 

ELECTION AND SUBSCRIPTION AGREEMENT

 

This Election and
Subscription Agreement (this “Agreement”),
dated as of February 3, 2006, is entered into by and among Curative Health
Services, Inc., (“Curative”)
and
[              ]
(the “Purchaser,” and together
with Curative, the “Parties”).

 

PRELIMINARY STATEMENTS

 

A.                          Curative and its subsidiaries 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., Curative
Pharmacy Services, Inc., eBioCare.com, Inc. and Apex Therapeutic Care, Inc.,
(together, the “Companies”)
propose to consummate a plan of reorganization attached to and described in a
disclosure statement dated on or about February 6, 2006 (such plan of
reorganization as it may be amended in accordance with the terms thereof being
hereinafter referred to as the “Plan”
and such disclosure statement being hereinafter referred to as the “Disclosure Statement”) in bankruptcy cases
(the “Chapter 11 Cases”) to be
filed under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”).

 

B.                          In order to facilitate confirmation of the Plan,
the Companies, the Purchaser and certain significant holders of claims against
the Companies have entered into that certain Plan Support Agreement, dated as
of December 2, 2005 (as amended on December 14, 2005 and February 3,
2006) (the “Plan Support Agreement”),
pursuant to which the parties thereto have agreed to support the Plan on the
terms and conditions set forth in the Term Sheet attached as Exhibit A
thereto (as such may be amended or modified by or in accordance with the Plan,
the “Restructuring Terms”) and to
implement the transactions contemplated thereby, subject to certain conditions
and requirements set forth in the Plan Support Agreement.

 

C.                          Under the terms of the Plan, and upon its
effective date, existing equity in Curative and interests therein will be
cancelled and Reorganized Curative (Curative as it exists subsequent to the
effectiveness of the Plan) will issue shares of common stock (the “New CURE Stock”), having the rights set
forth in the Restructuring Terms in accordance with the Plan.

 

D.                         Under the terms of the Plan, Curative will pay
cash (the “Cash Consideration”) in
the amount of $[•] per dollar of Allowed Senior Note Claims (as defined
in the Plan) held by holders of the Senior Notes (as defined in the Plan); provided however that affiliated holders
of Senior Notes having a face amount equal to or greater than $1,000,000 may
elect to receive New CURE Stock in lieu of receiving a portion of the Cash
Consideration under the Plan (such holders, the “Eligible Holders”). 
Certain Eligible Holders (including the Purchaser) (the “Subscription Holders”), pursuant to
Election and Subscription Agreements (the “Subscription
Agreements”), have agreed (i) to exercise to the fullest extent
possible their option to elect New CURE Stock under the Plan, and (ii) to
purchase such additional shares of New CURE Stock as necessary or required,
pursuant to the terms of the Subscription Agreements.  The cash proceeds to Curative from the sales
of New CURE Stock made pursuant to the Subscription Agreements shall be used,
together with the other financing sources identified in the Disclosure
Statement, to fund the cash distributions to be made pursuant to the Plan to
Non-Electing Senior Noteholders (as defined in the Plan).

 

1

 

E.                           Following
delivery of the Purchaser’s Ballot and Election Form (as defined herein) the
Purchaser will agree to be bound by the restrictions on the transfer of its
Senior Notes Claims contained herein.

 

F.                            The Purchaser holds, in the aggregate, $[•]
in principal amount of Senior Notes (representing [•]% of the aggregate
amount of Senior Notes outstanding).

 

G.                          The Purchaser desires to (i) elect to receive
its pro rata share of New CURE Stock (the “Election
Shares”) in respect of its aggregate Allowed Senior Note Claims, (ii) purchase
[•] shares of New CURE Stock (the “Subscribed
Shares”) at a purchase price of $[•] per share, which price
will not be greater than the price paid by all other Subscription Holders for
shares of New CURE Stock (the “Purchase Price”)
and (iii) purchase at the Purchase Price, upon written notice from
Curative, up to [•] shares of New CURE
Stock (the “Oversubscribed Shares,”
and together with the Subscribed Shares, the “Purchaser
Shares”) all as more particularly set forth herein.

 

STATEMENT OF AGREEMENT

 

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, the parties hereto, intending to be legally bound, agree as
follows:

 

1                               Election; Stockholders Agreement

 

1.1                            The Purchaser hereby agrees and commits, subject
to the conditions set forth in the Plan Support Agreement, to (i) exercise
its rights to elect to receive the Election Shares and the Cash Consideration
(as defined in the Plan) as contemplated by the Plan in satisfaction of its
Allowed Senior Note Claim to the fullest extent possible under the Plan and (ii) deliver and not revoke
its ballot regarding its Allowed Senior Note Claim (the “Ballot and Election Form”) within the time
and in manner required in the Plan.

 

1.2                            Following the Purchaser’s
delivery of its Ballot and Election Form, the Purchaser agrees that it shall
not sell, transfer, assign, pledge, hypothecate or otherwise dispose of any
Senior Note Claims or any beneficial interest therein (including any Senior
Note Claims acquired after the date hereof) directly or indirectly, to any
person (a “Transfer”), provided that, the Purchaser may Transfer
its Senior Note Claim to a person (a “Permitted Transferee”)
who (i) is party to an Election and Subscription Agreement with the
Company, (ii) has otherwise elected to receive New CURE Stock pursuant to
a validly executed and delivered Ballot and Election Form or (iii) is an
“accredited investor” (as defined in Rule 501(a) promulgated under the
Securities Act of 1933), purchases at least $1,000,000 in principal amount of
Senior Note Claims from the Purchaser, executes a Transferee Acknowledgement in
the form attached as Exhibit B to the Plan Support Agreement and a Transfer
Notice in the form attached hereto in Exhibit A, including the acknowledgment
of the Permitted Transferee that  (A)
such transferred Senior Note Claims represent only the right to receive New
CURE Stock and cash pursuant to the Plan (as if the Permitted Transferee had
elected such treatment in respect of such Senior Note Claims to the fullest
extent possible pursuant to the Plan), (B) it waives any and all rights, and
agrees not to claim any right, to receive any other treatment in respect of such
Senior Note Claims than that described in (A) above,  and (C) that the Permitted Transferee agrees
to be bound by the restrictions on Transfer included in this subsection 1.2; provided that, in the case of (iii) above, if such Permitted
Transferee ceases to be bound by the Plan Support Agreement (in accordance with
its terms), the Permitted Transferee will no longer be bound by clauses (A),
(B) and (C) above.  Any attempted
Transfer in violation of this subsection 1.2 shall be null and void ab initio.

 

1.3                            The Purchaser hereby agrees and commits to execute
a joinder to the Stockholders Agreement (as defined in the Plan) as a condition
to its receipt of New CURE Stock pursuant to the Plan.

 

2                               Basic Subscription

 

The Purchaser agrees to purchase
the number of Subscribed Shares set forth opposite its name on the signature pages hereto
on the terms and conditions set forth herein for a purchase price per share
equal to the Purchase Price.

 

2

 

3                               Oversubscription

 

3.1                            The Purchaser acknowledges that this
Election and Commitment Agreement is one of several Agreements the proceeds
from which will be used by Curative to make certain cash payments pursuant to
the Plan. The Purchaser agrees that, if Curative provides Purchaser written
notice within 5 business days following the Voting Deadline (as defined in the
Plan), the Purchaser shall purchase, at the Purchase price, up to [•] shares of New CURE Stock (the “Oversubscribed Shares”). For the avoidance of doubt, the
Purchaser shall not be obligated to purchase any shares of New CURE Stock that
any other Subscription Holder agreed to purchase under another Election and
Subscription Agreement but failed to purchase in breach of such other
Subscription Holder’s obligations under such Election and Subscription
Agreement.

 

3.2                            Curative
agrees that the number of Oversubscribed Shares, if any, included in a notice
given to the Purchaser pursuant to Section 3.1 above, will be pro rata with the number of oversubscribed shares of New
CURE Stock, if any, purchased by other Subscription Holders pursuant to other
Subscription Agreements.

 

4                               Closing of the Purchaser Share Purchase

 

4.1                            The delivery of and payment for the Purchaser
Shares (the “Closing”) shall take
place at the offices of Linklaters, 1345 Avenue of the Americas, New York, New York,
10105, on the date and at the time established for the consummation of the Plan
(the “Closing Date”).

 

4.2                            Upon the Closing:

 

4.2.1                          Curative shall deliver stock certificates to the
Purchaser representing the Purchaser Shares, in the denominations and
registered in the names of the Purchaser or such other affiliates of the
Purchaser as are designated in writing by the Purchaser not later than five
business days prior to the Closing Date; and

 

4.2.2                          the Purchaser shall deliver the purchase price
payable in respect of the Purchaser Shares to Curative by wire transfer of
immediately available funds to an account designated by Curative not later than
five business days prior to the Closing Date.

 

5                               Satisfaction of the Subscription

 

The Purchaser may, in its sole
discretion, satisfy the Subscription directly and/or indirectly through one or
more of its respective affiliates, separate accounts within its control, or
investment funds under its or its respective affiliates’ management; provided, however, any such non-Purchaser
entities shall be required to make the representations and warranties set forth
in Section 6.2 hereof (solely with respect

 

3

 

to their satisfaction of the
Subscription) to Curative in writing and in form and substance reasonably
satisfactory to Curative.

 

6                               Representations and Warranties

 

6.1                            Curative represents and warrants to the Purchaser
as follows:

 

6.1.1                          Each of the Companies is duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
organization. Each of the Companies is duly licensed or qualified to do
business as a foreign corporation and is in good standing under the laws of any
other jurisdiction in which the character of the properties owned or leased by
it or in which the transaction of its business makes such qualification
necessary, except where the failure to be so qualified or to be in good
standing would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the Companies. The Companies have all
requisite corporate power and authority to own, operate, and lease their
properties and carry on their respective businesses as currently conducted.

 

6.1.2                          All of the outstanding shares of capital stock or
equity interests of each of Curative’s subsidiaries are duly authorized,
validly issued, fully paid and non-assessable and all such shares and equity
interests are owned by Curative or another wholly owned subsidiary of Curative.

 

6.1.3                          The Companies have the requisite corporate power
and authority to execute and deliver, and to perform their respective
obligations under, this Agreement. This Agreement, the Plan, and the
consummation and performance by the Companies of the transactions contemplated
by this Agreement and the Plan have been duly authorized by all requisite
corporate action. Curative has duly executed and delivered this Agreement. This
Agreement constitutes the valid and binding obligation of Curative, enforceable
against it in accordance with its terms, subject to the effectiveness of the
Plan and except to the extent that the enforceability of this Agreement may
otherwise be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors’ rights generally, public policy and general equitable principles.

 

6.1.4                          Upon the effective date of the Plan (the “Effective Date”), the authorized capital
stock of Curative will conform to the authorized capital stock set forth in the
Disclosure Statement. Upon delivery of the Purchaser Shares and payment
therefor as contemplated hereunder, such Purchaser Shares will be duly
authorized, validly issued, fully paid and nonassessable, and free and clear of
all liens, preemptive rights, rights of first refusal, subscription and similar
rights (other than those arising under the definitive documents relating to the
Plan Support Agreement and the Plan (the “Definitive
Documents”)).

 

6.1.5                          Except for the capital stock of Curative or options
to purchase Common Stock to be issued under the Plan and set forth in the
Restructuring Terms, after giving effect to the transactions contemplated by
the Plan there will be no

 

4

 

outstanding or authorized options, warrants,
rights, calls, convertible instruments, phantom stock, stock appreciation or
similar rights or other agreements or subscriptions or preemptive rights to
which any of the Companies is a party or which is binding upon any of the Companies
providing for the issuance, disposition or acquisition of any of its capital
stock or any other debt or equity security, or voting rights, rights of first
refusal, subscription, stock restriction or similar rights (other than those
arising under the Definitive Documents).

 

6.1.6                          The execution, delivery and performance of this
Agreement and the Definitive Documents by Curative, and the consummation by
Curative of the transactions contemplated hereby and thereby have been or will
be as of the Effective Date, duly and validly authorized by all necessary
corporate action on the part of each of the Companies and all required
approvals of the bankruptcy court having jurisdiction over the Chapter 11 Cases
(the “Bankruptcy Court”).

 

6.1.7                          Except as set forth in the disclosure schedule attached
hereto (the “Disclosure Schedule”),
the execution and delivery of this Agreement by Curative does not, and upon the
effectiveness of the Plan, the consummation by the Companies of the
transactions contemplated hereby will not: (A) conflict with or violate
the Certificate of Incorporation, bylaws or other organizational documents of
any of the Companies; (B) conflict with or violate any law, order or
agreement applicable to the Companies or by which any property or asset of the
Companies is bound or affected; or (C) result in any breach of any
contract, agreement, or instrument to which any of the Companies is a party or
by which any of the Companies or any property or asset of the Companies is
bound or affected, except, in the case of clauses (B) and (C), for any
such conflicts or, breaches that are not, individually or in the aggregate,
material to the Companies taken as a whole.

 

6.1.8                          Except as set forth in the Disclosure Schedule,
the Companies are not in conflict with, or in default or violation of, any law,
order, judgment or agreement applicable to the Companies or by which any
property or asset of the Companies is bound or affected, except for such other
conflicts, defaults, or violations that are not, individually or in the
aggregate, material to the Companies taken as a whole.

 

6.1.9                          No representation or warranty of Curative
contained in this Agreement, and no statement relating to the Companies
contained in any other document, certificate or other instrument delivered or
to be delivered by or on behalf of any of the Companies pursuant to this
Agreement, the Plan Support Agreement, the Restructuring Terms or the Plan
contains any untrue statement of a material fact or omits to state any material
fact necessary, in light of the circumstances under which it was made, in order
to make the statements herein or therein not misleading.

 

6.1.10                   Except as set forth in the Disclosure Schedule, as
of their respective dates, all Company Reports (as defined below) did not, and
any Company Reports filed

 

5

 

with the Securities and Exchange Commission
(the “SEC”) subsequent to the date
hereof will not, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which it was made,
not misleading.  “Company Reports” shall mean (A) Curative’s
annual report on Form 10-K for the year ended December 31, 2004, (B) Curative’s
quarterly report on Form 10-Q for the quarterly period ended March 31,
2005, (C) Curative’s quarterly report on Form 10-Q for the quarterly
period ended June 30, 2005, (D) Curative’s quarterly report on Form 10-Q
for the quarterly period ended September 30, 2005 and (E) any current
report on Form 8-K, quarterly report on Form 10-Q or annual report on
Form 10-K filed by Curative with the SEC subsequent to the filing date of
the report described in clause (D) above.

 

6.1.11                   Except as set forth in the Disclosure Schedule,
there is no litigation, proceeding or governmental investigation (collectively,
“Litigation”) to which any of the
Companies is a party pending, or to the knowledge of any of such Companies,
threatened against any Company or any properties or rights of any such Company,
which could, individually or in the aggregate (or when aggregated with
Litigation of all the Companies), reasonably be expected to have a materially
adverse effect on such Company’s ability to consummate the transactions
contemplated by this Agreement or the Plan.

 

6.1.12                   Except as disclosed, reflected or reserved against
in the Company Reports filed as at the date hereof or disclosed with reasonable
specificity in any section of the Plan or Disclosure Schedule, there are
no liabilities of any of the Companies, other than liabilities incurred in the
ordinary course of business consistent with past practice since September 30,
2005 or which in the aggregate are not material to the business or condition of
the Companies.

 

6.1.13                   Except as set forth in the Disclosure Schedule and
the Company Reports filed as at the date hereof, since September 30, 2005,
there has been no material adverse change in the business, assets, financial
condition or results of operation of the Companies, taken as a whole.

 

6.2                            The Purchaser represents and warrants to Curative
as follows:

 

6.2.1                          the Purchaser is duly organized, validly existing,
and in good standing under the laws of its jurisdiction or state of
organization.

 

6.2.2                          the Purchaser has all requisite power and
authority to execute and deliver this Agreement, and all requisite power,
authority and financial ability to perform its obligations hereunder, and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Purchaser, and the consummation by the Purchaser of the
transactions contemplated hereby, have been duly authorized by all requisite
corporate action of the Purchaser. The Purchaser has duly executed and
delivered this Agreement. This Agreement is valid and legally binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, except that the

 

6

 

enforceability of this Agreement may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting the enforcement of creditors’
rights generally, public policy and general equitable principles.

 

6.2.3                          The execution and delivery of this Agreement by
the Purchaser does not, and the consummation by the Purchaser of the
transactions contemplated hereby will not, (A) conflict with or violate
the applicable organizational documents of the Purchaser; (B) conflict
with or violate any law, order or agreement applicable to the Purchaser; or (C) result
in a breach of any contract, agreement or instrument by which the Purchaser is
bound, except in the case of clauses (B) and (C) for any such
conflicts, violations or breaches that are not, individually or in the
aggregate, material to the Purchaser.

 

6.2.4                          The Purchaser is an “accredited investor” within the meaning of Regulation D
promulgated by the SEC under the Securities Act of 1933, as amended.

 

6.2.5                          The Purchaser is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in shares representing an investment decision like that involved in
the purchase of the New CURE Stock, including investments in securities issued
by Curative and comparable entities, and has had the opportunity to request,
receive, review and consider all information it deems relevant in making an
informed decision to purchase the New CURE Stock.

 

6.2.6                          The Purchaser is acquiring the New CURE Stock in
the ordinary course of its business and for its own account for investment only
and with no present intention of distributing any of such New CURE Stock or any
arrangement or understanding with any other persons regarding the distribution
of such New CURE Stock.

 

6.2.7                          The Purchaser will not, directly or indirectly,
offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to
buy, purchase or otherwise acquire or take a pledge of) any of the New CURE
Stock except in compliance with the Securities Act and the rules and
regulations promulgated thereunder and any applicable state securities laws.

 

6.2.8                          The Purchaser understands that the New CURE Stock
are being offered and sold to it in reliance upon specific exemptions from the
registration requirements of the Securities Act and state securities laws and
that Curative is relying, in part, upon the truth and accuracy of, and such
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the New CURE Stock.

 

6.2.9                          The Purchaser understands that, until such time as
a registration statement has been declared effective or the New CURE Stock may
be sold pursuant to Rule 144 under the Securities Act without any
restriction as to the number of

 

7

 

securities as of a particular date that can
then be immediately sold, the New CURE Stock will bear a restrictive legend in
substantially the following form:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE
SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE
BENEFIT OF THE ISSUER THAT THIS SECURITY MAY NOT BE OFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A REGISTRATION STATEMENT
DECLARED EFFECTIVE UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION.

 

6.2.10                   The Purchaser hereby acknowledges that the sale by
Curative to the Purchaser of the Purchaser Shares pursuant to this Agreement is
not registered under the Securities Act and agrees that, except as set forth in
the Registration Rights Agreement (as defined in the Plan), Curative is under
no obligation to register a resale of the Purchaser Shares by the Purchaser.

 

6.2.11                   As at the date hereof, the Purchaser does not own
more than five percent (5%) of the outstanding common stock of Curative.

 

7                               Pre-Closing Covenant; Exculpation; Fiduciary Duty

 

7.1                            Prior to the
Closing, Curative shall not make any material change in its business or capital
structure other than as described in the Plan or as incidental to the Chapter
11 Cases (including as may be approved under section 363 or 365 of the
Bankruptcy Code).

 

7.2                            Curative agrees
that it will use its reasonable best efforts to include the Purchaser in the
relevant release, and exculpation of liability provisions set forth in the
Plan.

 

7.3                            The Parties
acknowledge that nothing in this Agreement (including this Section 7)
shall require the Companies or any directors or officers of the Companies (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 subsection 7.3.

 

8                               Certain Notices; Certain Information

 

8.1                            Curative hereby covenants that it will promptly
deliver to the Purchaser, and the Purchaser hereby covenants that it will
promptly deliver to it, written notice of any matter, event or development that
would (A) render any representation or warranty made by them herein
inaccurate or incomplete in any respect or (B) constitute or result in a
breach by them of, or a failure by them to comply with, any covenant herein.

 

8

 

8.2                            Curative shall furnish the Purchaser with such
information regarding themselves and their subsidiaries as the Purchaser may
reasonably request.

 

9                               Conditions to Closing

 

9.1                            The obligation of the Purchaser to purchase the
Purchaser Shares shall be subject to the following conditions:

 

9.1.1                          the Purchaser’s obligations under the Plan Support
Agreement shall not have been terminated in accordance with its terms and shall
remain in full force and effect as of the Closing Date;

 

9.1.2                          the Plan, in a form consistent in all material
respects with the Restructuring Terms or in such other form as may be
reasonably satisfactory to the Purchaser, shall have been confirmed by the
Bankruptcy Court;

 

9.1.3                          the order of the Bankruptcy Court confirming the
Plan (the “Confirmation Order”)
shall have been entered by the Bankruptcy Court, shall be in form and substance
reasonably satisfactory to the Purchaser and shall be a final order and there
shall be no stay or injunction pending with respect thereto;

 

9.1.4                          the Plan shall be consummated on terms consistent
in all material respects with the Plan Support Agreement and the Restructuring
Terms or in such other form as may be reasonably satisfactory to the Purchaser;

 

9.1.5                          the representations and warranties of the
Companies contained herein that are qualified as to materiality shall be true
and correct in all respects on and as of the date hereof and the Closing Date,
with the same force and effect as though made on and as of such date, except to
the extent that any representation or warranty is made as of a specified date,
in which case such representation or warranty shall be true and correct as of
such specified date, and the representations and warranties that are not so
qualified shall be true and correct in all material respects on and as of the
date hereof and the Closing Date, with the same force and effect as though made
on and as of such date, except to the extent that any representation or
warranty is made as of a specified date, in which case such representation or
warranty shall be true and correct in all material respects as of such
specified date, and the Companies shall have performed or complied with, in all
material respects, their covenants required to be performed or complied with
under this Agreement and the Plan Support Agreement; and

 

9.1.6                          if applicable, any applicable waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall
have expired or been terminated early.

 

9.2                            The obligation of Curative to issue and sell the
Purchaser Shares shall be subject to the following conditions:

 

9.2.1                          the Plan shall have been confirmed by the
Bankruptcy Court;

 

9

 

9.2.2                          the Confirmation Order shall have been entered by
the Bankruptcy Court, and shall be a final order and there shall be no stay or
injunction pending with respect thereto;

 

9.2.3                          the representations and warranties of the
Purchaser contained herein that are qualified as to materiality shall be true
and correct in all respects on and as of the date hereof and the Closing Date,
with the same force and effect as though made on and as of such date, except to
the extent that any representation or warranty is made as of a specified date,
in which case such representation or warranty shall be true and correct as of
such specified date, and the representations and warranties that are not so
qualified shall be true and correct in all material respects on and as of the
date hereof and the Closing Date, with the same force and effect as though made
on and as of such date, except to the extent that any representation or
warranty is made as of a specified date, in which case such representation or
warranty shall be true and correct in all material respects as of such
specified date, and the Purchaser shall have performed or complied with, in all
material respects, its covenants required to be performed or complied with
under this Agreement and the Plan Support Agreement;

 

9.2.4                          at Closing, each Purchaser shall be a holder of
Senior Notes and shall exchange such notes for the consideration provided in
accordance with the Plan; and

 

9.2.5                          if applicable, any applicable waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall
have expired or been terminated early.

 

10                        Termination by Purchaser

 

10.1                     The Purchaser shall be entitled to terminate its
obligations under this Agreement by giving written notice thereof to Curative
and its legal counsel in the event that (i) Curative materially
breaches this Agreement or the Plan Support Agreement, (ii) satisfaction
of the conditions set forth in Section 9.1 becomes impossible, or (iii) the
Plan shall not have become effective prior to the last date provided therefor
in the Plan Support Agreement, and such date shall not have been extended in
accordance with the Plan Support Agreement or otherwise in a writing signed by
the Purchaser.

 

10.2                     Each of the events set forth in subsection 10.1
above may be waived by the written agreement of the Purchaser, in its sole and
absolute discretion.

 

10.3                     If any event specified in subsection 10.1 above
occurs and written notice is provided as specified therein, this Agreement
shall terminate and, except for the rights of the Parties under Section 22
hereof which shall survive such termination, no Party shall have any continuing
liability or obligation under this Agreement to pay any other Party; provided, however, the Parties shall have
the rights and remedies specified under Section 17 hereof, and no such
termination shall relieve any Party from liability for breach or
non-performance of their respective obligations hereunder prior to the date of
such termination.

 

10

 

11                        Inclusion in Disclosure Statement; Disclaimer

 

The Parties acknowledge and
Curative agrees that a form of this Agreement, including the Disclosure Schedule (with
the name and holdings information of the Purchasers redacted), will be included
in the Disclosure Statement or as part of the Plan Supplement that will be
distributed to creditors of and interest holders in the Companies in the manner
required by the Bankruptcy Code and will be filed by Curative as an exhibit to
a Form 8-K on the date on which the Disclosure Statement is made available
to creditors of the Companies.

 

NOTHING CONTAINED IN THIS
AGREEMENT SHALL BE DEEMED TO BE A TENDER OFFER FOR ANY SECURITIES, A
SOLICITATION OF PROXIES OR A SOLICITATION OF OFFER TO SELL OR EXCHANGE
SECURITIES TO ANY PERSON OTHER THAN THE PURCHASER.

 

12                        Amendments

 

This Agreement may not be
modified, amended or supplemented except in a writing signed by each of the
Parties.

 

13                        GOVERNING LAW; JURISDICTION

 

THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISIONS WHICH WOULD REQUIRE THE
APPLICATION OF THE LAW OF ANY OTHER JURISDICTION. BY ITS EXECUTION AND DELIVERY
OF THIS AGREEMENT EACH OF THE PARTIES HEREBY 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 OF ANY JUDGMENT RENDERED IN ANY SUCH ACTION, SUIT OR
PROCEEDING, MAY BE BROUGHT IN ANY FEDERAL OR STATE COURT IN THE BOROUGH OF
MANHATTAN, THE CITY OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE PARTIES HEREBY IRREVOCABLY ACCEPTS AND SUBMITS ITSELF TO
THE NONEXCLUSIVE JURISDICTION OF EACH SUCH COURT, GENERALLY AND
UNCONDITIONALLY, WITH RESPECT TO ANY SUCH ACTION, SUIT OR PROCEEDING.
NOTWITHSTANDING THE FOREGOING CONSENT TO JURISDICTION, UPON THE COMMENCEMENT OF
THE CHAPTER 11 CASES, EACH OF THE PARTIES AGREES THAT THE BANKRUPTCY COURT
SHALL HAVE EXCLUSIVE JURISDICTION WITH RESPECT TO ANY MATTER UNDER OR ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

 

14                        Specific Performance

 

It is understood and agreed by
Curative and the Purchaser 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, including, without limitation, an order
of the Bankruptcy Court requiring any Party to comply promptly with any of its
obligations hereunder.

 

11

 

15                        Headings

 

The headings of the Sections,
paragraphs and subsections of this Agreement are inserted for convenience only
and shall not affect the interpretation hereof.

 

16                        Successors and Assigns

 

This Agreement is intended to bind
and inure to the benefit of the Parties and their respective successors,
assigns, heirs, executors, administrators and representatives. The invalidity
or unenforceability at any time of any provision hereof shall not affect or
diminish in any way the continuing validity and enforceability of the remaining
provisions hereof.

 

17                        Indemnification; Limitation on Liability

 

17.1                     Subject to Section 17.3 hereof, Curative
agrees to indemnify and hold harmless the Purchaser against all damages,
losses, liabilities, claims, costs and expenses (including reasonable attorneys’
fees and disbursements and including in respect of any claim brought by a third
party or governmental agency) arising out of or based upon a breach by Curative
of any of its representations or warranties contained herein or a failure by
Curative to fulfill any of its covenants or other obligations contained herein
(other than, in all cases, as may be caused by or attributable to the gross
negligence or willful misconduct of the Purchaser).

 

17.2                     Subject to Section 17.3 hereof and in
addition to (but not duplication of) the indemnification provided in Section 17.1,
Curative agrees to reimburse the Purchaser for its reasonable out of pocket
expenses (including the Purchaser’s allocable portion of the reasonable fees and
disbursements of the Subscription Holders’ Counsel) which it may incur by
reason of or arising out of the defense of any claim brought by a third party
or governmental agency arising out of the Purchaser’s execution, delivery or
performance of this Agreement (other than, in all cases, as may be caused by or
attributable to the gross negligence or willful misconduct of the
Purchaser).  As used in this Section 17.2,
“Subscription Holders’ Counsel”
shall mean one firm of attorneys selected to represent all Subscription Holders
in connection with any claim that is subject to reimbursement pursuant to this Section 17.2
or other Election and Subscription Agreements.

 

17.3                     THE PURCHASER ACKNOWLEDGES AND AGREES THAT
CURATIVE’S AGGREGATE LIABILITY TO THE PURCHASER RELATING TO OR ARISING OUT OF
THIS AGREEMENT, PURSUANT TO THIS SECTION 17 OR OTHERWISE, SHALL IN NO
EVENT EXCEED THE AGGREGATE PURCHASE PRICE AGREED TO BE PAID BY PURCHASER FOR
THE PURCHASER SHARES HEREUNDER PROVIDED THAT
THIS LIMITATION SHALL NOT APPLY TO ANY LIABILITY THAT MAY BE CAUSED BY OR
ATTRIBUTABLE TO THE GROSS NEGLIGENCE WILLFUL MISCONDUCT OF CURATIVE.

 

12

 

18                        No Third-Party Beneficiaries

 

Unless expressly stated herein,
this Agreement shall be solely for the benefit of the Parties and no other
person or entity shall be a third party beneficiary hereof.

 

19                        Prior Negotiations; Entire Agreement

 

This Agreement constitutes the
entire agreement of the Parties and supersedes all prior negotiations with respect
to the subject matter hereof, except that the Parties acknowledge that any
confidentiality agreements heretofore executed among the Parties and the Plan
Support Agreement shall continue in full force and effect in accordance with
their respective terms.

 

20                        Counterparts; Facsimile Signatures

 

This Agreement 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 agreement.  In the event that any signature is delivered
by facsimile or other electronic transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or
electronically transmitted signature page were an original thereof.

 

21                        Notices

 

All notices and other
communications under this Agreement shall be in writing, sent contemporaneously
to all of the Parties, and deemed given when delivered by hand or by facsimile
or by other electronic transmission during standard business hours (from 8:00 a.m.
to 6:00 p.m.) at the place of receipt at the addresses and facsimile
numbers set forth below, with a copy to each person identified thereon.

 

If to Curative:

 

Curative Health Services, Inc.                              

Executive Tower

61 Spit Brook
Road            

Nashua, New Hampshire 03060 

Attn:                        Paul F. McConnell

                                                    Kimberlee Seah, Esq.

	
  Telephone:

  	
   

  	
  (603) 821-8001

  
	
  Fax:

  	
   

  	
  (603) 888-3653

  

 

With a copy to:

 

Linklaters

1345 Avenue of the Americas 

New York, New York 10105 

Attn:                        Martin N. Flics
                                                    Brian E. Greer

	
  Telephone:

  	
   

  	
  (212) 903-9000

  
	
  Fax:

  	
   

  	
  (212) 903-9100

  

 

13

 

If to the Purchaser:

 

[                               ]

Phone:  

Fax:  

Attention:

 

With a copy to:

 

[                               ]

Phone:  

Fax:  

Attention:

 

22                        Survival

 

Notwithstanding the termination of
this Agreement pursuant to Section 10, the agreements and obligations of
the Parties in Sections 13, 16, 17, 18, 19 and 22 shall survive such
termination and shall continue in full force and effect for the benefit of the
Parties in accordance with the terms hereof.

 

*****

 

[THE REMAINDER OF THIS PAGE IS
INTENTIONALLY LEFT BLANK]

 

14

 

IN WITNESS
WHEREOF, the Parties have caused this Election and Subscription Agreement to be
executed as of the date first written above.

 

 

	
  CURATIVE HEALTH SERVICES, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Paul F. McConnell

  	
   

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [PURCHASER]

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Face Amount of Senior Notes held: $

  
	
   

  
	
  Basic Subscription:

  
					

 

15

 

EXHIBIT A

 

[TO BE INSERTED INTO LETTERHEAD OF TRANSFEROR]

 

                                          
      , 2006

 

                                                  
(the “Transferee”)

 

Re: Transfer Notice

 

Ladies and Gentlemen:

 

This notice (this “Notice”) is in reference to Section 1.2
of that certain Election and Subscription Agreement (the “Subscription
Agreement”) entered into as of February 3, 2005, among Curative Health
Services, Inc. (the “Company” or “Curative”) and [                        ]
(the “Transferee”).  All
capitalized terms used but not defined herein have the meanings given to them
in the Subscription Agreement.

 

As of                         
      , 2006, 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 Subscription Agreement (attached as Annex A).

 

The Transferee represents
and warrants that it is an “accredited investor” within the meaning of
Regulation D promulgated by the SEC under the Securities Act of 1933, as
amended.

 

The Transferee further
represents and warrants that:

 

1.              The Transferee is
knowledgeable, sophisticated and experienced in making, and is qualified to
make, decisions with respect to investments in shares representing an
investment decision like that involved in the purchase of New CURE Stock,
including investments in securities issued by Curative and comparable entities,
and the undersigned has received, reviewed and considered all information it
deems relevant in making an informed decision to purchase New CURE Stock;

 

2.              The Transferee’s
receipt of New CURE Stock in respect of such Senior Note Claims will be in the
ordinary course of its business and for its own account

 

16

 

for investment
only and with no present intention of distributing any of such New CURE Stock
or any arrangement or understanding with any other persons regarding the
distribution of such New CURE Stock;

 

3.              The Transferee will
not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire or take a
pledge of) any of the New CURE Stock except in compliance with the Securities
Act and the rules and regulations promulgated thereunder and any
applicable state securities laws;

 

4.              The Transferee
understands that the New CURE Stock will be distributed to it in reliance upon
specific exemptions from the registration requirements of the Securities Act
and state securities laws and that Curative is relying, in part, upon the truth
and accuracy of, and the undersigned’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the undersigned
set forth herein to determine the availability of such exemptions and the
eligibility of such holder to receive New CURE Stock;

 

5.              The Transferee
hereby acknowledges that the transfer of the New CURE Stock in satisfaction of
its Senior Note Claim to the undersigned will not be registered under the
Securities Act and agrees that, except as may be set forth in the Registration
Rights Agreement (as described more fully in Section 10.7(c) of the
Plan), Curative is under no obligation to register any resale of the New CURE
Stock by the undersigned.

 

The Transferee
acknowledges that (A) such transferred Senior Note Claims represent only
the right to receive New CURE Stock and cash pursuant to the Plan (as if the
Transferee had elected such treatment in respect of such Senior Note Claims to
the fullest extent possible pursuant to the Plan), (B) it waives any and
all rights, and agrees not to claim any right, to receive any other treatment
in respect of such Senior Note Claims other than that described in (A) above,
and (C) that the Transferee agrees to be bound by the restrictions on
Transfer included in subsection 1.2 of the Subscription Agreement; provided that, if the Transferee ceases to be bound by the
Plan Support Agreement (in accordance with its terms), the Transferee will no
longer be bound by clauses (A), (B) and (C) above.

 

This Notice 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 Notice.

 

Delivery of an executed signature page of
this Notice by facsimile shall be effective as delivery of a manually executed
signature page of this Notice.  Upon
receipt of your countersignature to this Notice, which is a precondition to any
Transfer of the Senior Note Claims described above, this Notice shall be
provided to Curative Health Services, Inc.

 

Upon execution of the Notice, the Transferee will provide notice to The
Altman Group, Inc., the Senior Notes Balloting Agent (“Altman”) by
fax at (212) 681-1383 Attn: Herb Slatin and to provide notice to Curative by
fax at [           ].

 

The Transferee agrees to provide any information related to the Senior
Notes as may be requested by Altman, Curative or the bankruptcy court.

 

17

 

The Transferee acknowledges and agrees that Curative shall be entitled
to rely on the representations and warranties contained herein as if Curative
were party hereto.

 

 

	
  Very truly yours,

  
	
   

  
	
   

  
	
  [INSERT NAME OF
  TRANSFEROR]

  

 

 

	
  Account Number

  	
   

  	
  Name of
  Holder

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

	
   

  
	
  [INSERT NAME OF
  TRANSFEREE]

  

 

18

 

ANNEX
A

 

FORM OF SUBSCRIPTION
AGREEMENT

 

19EXHIBIT  10.1

     On  October  18,  2005 the Compensation Committee of the Board of Directors
revised  the  employment  agreements ("Agreements") for Gregory S. Wilson, Chief
Financial  Officer,  and  Kirk  L.  Somers,  Vice President, Investor Relations,
General  Counsel  and  Secretary,  which  have  previously  been  filed with the
Securities and Exchange Commission.  Under the Agreements, if Mr. Wilson and Mr.
Somers  were  entitled  to  severance compensation, they would have received six
months  of  severance compensation.  Under the revised Agreements, if Mr. Wilson
and Mr. Somers are eligible for severance compensation, they will receive twelve
months  of  severance  compensation.  The  Compensation  Committee  amended  the
Agreements  to  provide  for  consistent severance rights of executive officers.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]