EXHIBIT 10.9
U.S. Department of Justice
United States Attorney
District of Massachusetts
Main Reception: (617) 748-3100 United States Courthouse, Suite 9200
1 Courthouse Way
Boston, Massachusetts 02210
January 17, 2000
By Hand
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Jonathan Chiel, Esq. Jeffrey E. Stone, Esq.
Choate, Hall & Stewart McDermott, Will & Emery
Exchange Place 222 West Monroe Street
53 State Street Chicago, IL 60606-5096
Boston, MA 02109-2891
Alan E. Reider, Esq. Harold Damelin, Esq.
Breckinridge L. Willcox, Esq. Powers, Pyles, Sutter &
Arent, Fox, Kintner, Plotkin Verville
& Kahn 12/th/ Floor
1050 Connecticut Avenue, NW 1875 Eye Street, NW
Washington, D.C. 20036 Washington, D.C. 20006-5409
Re: Fresenius Medical Care Holdings, Inc.
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Gentlemen:
This letter sets forth the Agreement between the United States Department
of Justice and the United States Attorney for the District of Massachusetts
(hereinafter collectively "United States") and your client, Fresenius Medical
Care Holdings, Inc., ("FMCH"), a New York corporation, as follows:
1. No Criminal Prosecution of FMCH
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Except as set forth below, the United States hereby declines criminal
prosecution of FMCH, its wholly owned subsidiary, National Medical Care, Inc.
(NMC), and their parent,
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subsidiary and affiliated corporate entities, except NMC Homecare, Inc. ("NMC
Homecare"), LifeChem, Inc. ("LifeChem") and NMC Medical Products, Inc. ("MPD"),
for the following conduct: (1) conduct described in the Information attached
hereto as Exhibit A; (2) conduct within the scope of the grand jury
investigation conducted by the United States Attorney for the District of
Massachusetts; and (3) conduct otherwise known to the United States Attorney for
the District of Massachusetts as of the date of this letter.
Certain allegations regarding Spectra Laboratories, Inc. were recently
brought to the attention of the U.S. Attorney for the Northern District of
California ("USA-NDCA"). Based upon a preliminary review of those allegations,
the USA-NDCA has no present intention to open a criminal investigation into
those allegations. However, facts may come to the attention of the USA-NDCA that
might lead to a criminal investigation. As a result, the USA-NDCA does not
decline prosecution of Spectra Laboratories, Inc., SRC Holding Company, Inc., or
any other entity responsible for their conduct.
This agreement is not intended to and does not affect the criminal
liability of any individual.
This declination of criminal prosecution is contingent on (1) the guilty
pleas of NMC Homecare, LifeChem, and MPD, as set forth in the Plea Agreements
which are being signed contemporaneous with this Agreement, being accepted by
the Court, and not withdrawn, and (2) FMCH, NMC and their related entities
performing all of their obligations as set forth in this Agreement and the four
civil settlement agreements (NMC Homecare, LifeChem, credit balances and Doppler
Flow Test/BIA tests) being signed contemporaneous with this Agreement. If such
guilty pleas are not accepted by the court or are withdrawn for any reason, or
if FMCH, or a related entity, should fail to perform an obligation under one of
the civil settlement agreements, this declination of criminal prosecution shall
be null and void.
2. Corporate Integrity Agreement
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Contemporaneous with the execution of this agreement, FMCH shall enter into
a Corporate Integrity Agreement with the Office of Inspector General ("Inspector
General") for the United States Department of Health and Human Services.
3. FMCH Guarantee
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FMCH hereby acknowledges that, pursuant to the Guarantee Agreement dated
July 31, 1996 among Fresenius Medical Care AG, FMCH, NMC, and the United States
of America, a copy of which is attached as Exhibit B, FMCH has unconditionally
guaranteed to the United States the prompt payment when due of all obligations
of NMC to the United States in respect of the Government Claims, as defined in
the Guarantee Agreement. FMCH expressly and unequivocally agrees that the
obligations of FMCH, NMC, NMC Homecare, LifeChem, and MPD contained in the Plea
Agreements and Civil Settlement Agreements being signed contemporaneous with
this Agreement constitute obligations of NMC to the United States in respect of
the Government Claims within the meaning of the Guarantee Agreement.
4. Waiver of Defenses
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In the event that the guilty pleas of NMC Homecare, LifeChem, or MPD, as
contemplated by the Plea Agreements being signed contemporaneous with this
Agreement, are not accepted by the Court for whatever reason, or are later
withdrawn for whatever reason, FMCH hereby agrees for itself and on behalf of
NMC, and their parent, subsidiary and affiliated corporate entities, to waive,
and not interpose, any defense it or they would have under any statute of
limitations or the Speedy Trial Act, by virtue of the passage of time subsequent
to the execution of this Agreement, as to any criminal charges relating to the
matters within the scope of the grand jury investigation conducted by the U.S.
Attorney, if such charges are filed within 90 days of the date on which such
guilty plea is rejected or withdrawn. In addition, FMCH agrees on behalf of
itself, NMC and their subsidiary and affiliated corporations to extend and
maintain in full force and effect the waivers of the statute of limitations and
Speedy Trial Act contained in the letters of January 7, 2000 from Susan G.
Winkler to Jonathan Chiel, Esq. and January 10, 2000 from Breckinridge L.
Willcox, Esq., et al. to Peter A. Mullin. FMCH agrees to take all steps
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necessary to obtain such waivers from NMC, and its subsidiary and affiliated
corporate entities, including, but not limited to, obtaining corporate
authorization to sign any necessary document.
5. Cooperation of FMCH
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FMCH agrees to cooperate completely and truthfully with the U.S. Attorney
in connection with his on-going investigation and prosecution of others for
alleged violations of federal criminal law arising out of his investigation.
FMCH understands and
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agrees that such cooperation shall include, without limitation, the following,
if requested by the U.S. Attorney:
a. prompt production to the U.S. Attorney of any non-privileged document
or record in the possession, custody or control of FMCH, NMC or their subsidiary
and affiliated corporate entities relating to the subject matter of the
investigation;
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b. taking all reasonable measures available to FMCH to ensure that
present and former officers, directors, agents and employees of FMCH, NMC and
their subsidiary and affiliated corporate entities cooperate truthfully and
completely with the U.S. Attorney in connection with his on-going investigation
and prosecutions; and
c. taking all reasonable measures available to FMCH to make all present
and former officers and employees of FMCH, NMC and their subsidiary and
affiliated corporate entities available for interviews by law enforcement
personnel, upon reasonable notice.
6. Breach of Agreement
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If the United States determines that FMCH has failed to comply with any
provision of this Agreement, the United States may, at its sole option, be
released from its commitments under the Agreement in their entirety, by
notifying FMCH, through counsel or otherwise, in writing. The United States may
also pursue all remedies available to it under the law irrespective of whether
the United States elects to be released from its commitments under this
Agreement. FMCH understands that should it breach any provision of this
Agreement, the United States will have the right to use against FMCH and NMC,
before any grand jury, at any trial, hearing or for sentencing purposes, any
statements, information, materials, documents or objects provided by FMCH to the
United States pursuant to this Agreement, without limitation.
6. Who Is Bound By Agreement
-------------------------
This Agreement is binding upon FMCH and the United States Department of
Justice, including each of its United States Attorney's Offices, but can not and
does not bind the Tax Division of the U.S. Department of Justice, the Internal
Revenue Service of the U.S. Department of the Treasury or any other federal,
state or local prosecutive authority.
6. Corporate Authorization
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FMCH shall provide to the U.S. Attorney a certified copy of a resolution of
its Board of Directors, affirming that the Board of Directors has authority to
enter into this Agreement and has (1) reviewed this Agreement, the attached
Information, the three Plea Agreements and four Civil Settlement Agreements
being signed contemporaneous with this Agreement and the attached
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Guarantee Agreement; (2) consulted with legal counsel in connection with the
matter; (3) voted to enter into this Agreement; and (4) voted to authorize the
corporate officer identified below to execute this Agreement and all other
documents necessary to carry out the provisions of the Agreement.
9. Complete Agreement
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This letter, together with the three Plea Agreements and four Civil
Settlement Agreements being signed contemporaneous with this Agreement, and the
July 31, 1996 Guarantee Agreement, contain the complete agreement between the
parties relating to the criminal disposition of this matter. No promises,
representations, or conditions have been entered into other than those set forth
in this letter and the above-referenced documents. This Agreement supersedes
prior understandings, if any, of the parties, whether written or oral, relating
to the criminal disposition of this matter. This Agreement can be modified or
supplemented only in a written memorandum signed by the parties or on the record
in Court.
If this letter accurately reflects the Agreement between the United States
and your client, Fresenius Medical Care Holdings, Inc., please execute this
Agreement in the spaces indicated below, provide the requisite documentation of
authorization to enter into this Agreement and return the original of this
letter to Assistant U.S. Attorney Peter A. Mullin or Susan G. Winkler.
Sincerely yours,
/s/ Mark W. Pearlstein
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MARK W. PEARLSTEIN
Acting United States Attorney
District of Massachusetts
/s/ John Keeney (wwp)
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JOHN C. KEENEY
Deputy Assistant Attorney General
Criminal Division
U.S. Department of Justice
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The Board of Directors has authorized me to execute this Agreement on
behalf of Fresenius Medical Care Holdings, Inc. The Board has read this letter,
the attached criminal Information, the three Plea Agreements and four Civil
Settlement Agreements being signed contemporaneous herewith, and the Guarantee
Agreement, in their entirety, understands them, and has discussed them fully
with FMCH's legal counsel. I hereby acknowledge, on behalf of FMCH, that this
letter fully sets forth FMCH's agreement with the United States, and that no
additional promises or representations have been made to the corporation by any
official of the United States in connection with the criminal disposition of
this matter. FMCH is entering into this Agreement freely, voluntarily and
knowingly because it believes this Agreement is in its best interest.
Dated: 1/18/00 /s/ Ben J. Lipps
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BEN J. LIPPS
President
Fresenius Medical Care Holdings, Inc.
Dated: January 18, 2000 /s/ Jonathan Chiel
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JONATHAN CHIEL
Choate, Hall & Stewart
Dated: 1/18/00 /s/ Alan E. Reider
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ALAN E. REIDER
Arent, Fox, Kintner, Plotkin & Kahn
Dated: 1/18/00 /s/ Breckinridge L. Willcox
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BRECKINRIDGE L. WILLCOX
Arent, Fox, Kintner, Plotkin & Kahn
Dated: January 18, 2000 /s/ Jeffrey E. Stone
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JEFFREY E. STONE
McDermott, Will & Emery
Dated: 1/18/00 /s/ Harold Damelin
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HAROLD DAMELIN
Powers, Pyles, Sutter & Verville
Attorneys for Fresenius Medical Care
Holdings, Inc.
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EXHIBIT A
(Information)
The Information dated January 19, 2000 is incorporated by reference to Exhibit A
of Exhibit 10.6 to this Current Report on Form 8-K.