SETTLEMENT AGREEMENT WITH A JOINT AND MUTUAL RELEASE AND
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INDEMNITY AGREEMENT
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THE STATE OF TEXAS ss.
ss. KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF XXXXXX xx.
DEFINITIONS
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"Agreement" means this Settlement Agreement with a Joint and Mutual Release
and Indemnity Agreement.
"Claimants" means: American International Industries, Inc. and the agents,
employees, officers, directors, shareholders and attorneys of American
International Industries, Inc.; all companies or firms affiliated with American
International Industries, Inc., including all parent and subsidiary
corporations; and the predecessors, successors, heirs and assigns of American
International Industries, Inc.; Xxxxxx Xxxx, individually and as agent,
employee, officer, director, trustee, beneficiary, or shareholder of any entity
owning stock in any of the Defendants; Xxxxxx Xxxx XX, individually, as Trustee
and Beneficiary of the Xxxxxx Xxxx XX 1976 Trust, Xxxxxx Xxxx XX 1996 Trust,
Xxxxxx Xxxx XX Trust of 1998, and as agent, employee, officer, director,
trustee, beneficiary, or shareholder of any entity owning stock in any of the
Defendants; International Diversified Corporation, Ltd., previously known as Elk
International Corporation, Ltd.; and the agents, employees, officers, directors,
shareholders and attorneys of International Diversified Corporation, Ltd.; all
companies or firms affiliated with International Diversified Corporation, Ltd.,
including all parent and subsidiary corporations; and the predecessors,
successors, heirs and assigns of International Diversified Corporation, Ltd.;
Elkana Faiwuszewicz individually and as agent, employee, officer, director,
trustee, beneficiary, or shareholder of any entity owning stock in any of the
Defendants; MidCity Houston Properties, Inc., and the agents, employees,
officers, directors, shareholders and attorneys of MidCity Houston Properties,
Inc.; all companies or firms affiliated with MidCity Houston Properties, Inc.,
including all parent and subsidiary corporations; and the predecessors,
successors, heirs and assigns of MidCity Houston Properties, Inc.
"Orion" means: Orion Healthcorp, Inc.; the agents, employees, officers,
directors, shareholders, and attorneys of Orion Healthcorp, Inc.; all companies
or firms affiliated with Orion Healthcorp, Inc., including all subsidiary and
parent corporations; the predecessors, successors and assigns of Orion
Healthcorp, Inc., including specifically, and without limitiation, Surgicare,
Inc.; and, all other persons, firms, and corporations for whose conduct the
persons or entities named in this definition of "Orion" may be liable.
"XxXxxxx" means: Xxxxx X. XxXxxxx and his attorneys, heirs and assigns.
"Xxxxxx" means: Xxxx Xxxxxx and his attorneys, heirs and assigns.
"Xxxxxxxx III" means: Xxxxxxxx Venture Partners III, L.P.; the agents,
employees, officers, and attorneys of Xxxxxxxx Venture Partners III, L.P.; all
companies or firms affiliated with Xxxxxxxx Venture Partners III, L.P.; the
predecessors, successors and assigns of Xxxxxxxx Venture Partners III, L.P.; and
all other persons, firms, and corporations for whose conduct the persons or
entities named in this definition of "Xxxxxxxx III" may be liable.
"Xxxxxxxx XX" means: Xxxxxxxx Venture Partners IV, L.P.; the agents,
employees, officers, and attorneys of Xxxxxxxx Venture Partners IV, L.P. ; all
companies or firms affiliated with Xxxxxxxx Venture Partners IV, L.P.; the
predecessors, successors and assigns of Xxxxxxxx Venture Partners IV, L.P.; and
all other persons, firms, and corporations for whose conduct the persons or
entities named in this definition of "Xxxxxxxx XX" may be liable.
"Xxxxxxxx Capital" means: Xxxxxxxx Capital Corporation; the agents,
employees, officers, directors, shareholders and attorneys of Xxxxxxxx Capital
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Corporation; all companies or firms affiliated with, subsidiary to, or the
parent company of Xxxxxxxx Capital Corporation; the predecessors, successors and
assigns of Xxxxxxxx Capital Corporation; and all other persons, firms, and
corporations for whose conduct the persons or entities named in this definition
of "Xxxxxxxx Capital" may be liable.
The "Settling Defendants" means: Orion, LeBlanc, Cascio, Xxxxxxxx III,
Xxxxxxxx XX, and Xxxxxxxx Capital. UHY Xxxx Frankfort Xxxxx & Xxxx CPAs, LLP
("Xxxx Frankfort") IS NOT one of the Settling Defendants; after the execution of
this Agreement, and the dismissal of the Settling Defendants, Xxxx Frankfort
will remain as the sole defendant in the Lawsuit.
The "Incident" means: all transactions and all representations regarding
transactions involving any of the Claimants and any of the Settling Defendants;
all transactions and all representations regarding transactions in which any of
the Settling Defendants made any representation to any of the Claimants; any
representation made by any of the Settling Defendants to any of the Claimants
regarding the value of Orion stock; all transactions and all representations
regarding the merger that created Orion Healthcorp, Inc.; and any other
transaction or representation involving Claimants and Settling Defendants that
is, has been, or could have been made the basis for the Lawsuit as defined
below.
The "Lawsuit" means Cause No. 2005-44326, in the 80th Judicial District
Court of Xxxxxx County, Texas, styled American International Industries, Inc.
vs. Orion HealthCorp, Inc., previously known as Surgicare, Inc., Xxxxx X.
XxXxxxx, Xxxx Xxxxxx, Xxxxxxxx Capital Corporation, Xxxxxxxx Venture Partners
III, L.P., and Xxxxxxxx Venture Partners IV, L.P.
"All Claims" means all existing, known, and unknown claims, demands, and
causes of action, known or unknown, pending or threatened, for all existing,
known, and unknown damages and remedies (1) that arise out of the Incident or
(2) that have been brought or that could have been brought by or on behalf of
Claimants in the Lawsuit, or in any court, tribunal or forum, in this or any
other jurisdiction, in these United States or anywhere else. Under this
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definition, "All Claims" includes, but is not limited to, all claims, demands,
lawsuits, debts, accounts, covenants, agreements, actions, cross-actions,
liabilities, obligations, losses, costs, expenses, remedies, and causes of
action of any nature, whether in contract or in tort, or based upon fraud or
misrepresentation, breach of duty or common law, or arising under or by virtue
of any judicial decision, statute or regulation, for past, present, known, and
unknown injuries, property or economic damage, and all other losses and damages
of any kind, including BUT NOT LIMITED TO the following: all actual damages; all
exemplary and punitive damages; all penalties of any kind, including WITHOUT
LIMITATION any tax liabilities or penalties; damage to business reputation; lost
profits or good will; consequential damages; damages ensuing from loss of
credit; and, prejudgment and postjudgment interest, costs and attorneys' fees.
This definition further includes, BUT IS NOT LIMITED TO, all elements of
damages, all remedies, and all claims, demands, and causes of action that are
now recognized by law or that may be created or recognized in the future by any
manner, including WITHOUT LIMITATION by statute, regulation, or judicial
decision. All Claims does not include any of Claimants' claims against Xxxx
Frankfort.
The "Consideration" means the payment to American International Industries,
Inc., by the Settling Defendants of SEVEN HUNDRED FIFTY THOUSAND DOLLARS
($750,000).
In this Agreement, the singular includes the plural, and vice versa;
likewise, the disjunctive includes the conjunctive, and vice versa.
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THE AGREEMENT
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1. For the Consideration, Claimants RELEASE, ACQUIT, and FOREVER
DISCHARGE Settling Defendants, and all insurers and insurers' agents of Settling
Defendants, from All Claims that have accrued or may ever accrue to Claimants.
Settling Defendants RELEASE, ACQUIT, and FOREVER DISCHARGE Claimants from All
Claims that have accrued or may ever accrue to Settling Defendants.
2. Claimants acknowledge the sufficiency of the Consideration by signing
this Agreement. The payment of the Consideration is not an admission of
liability and may not be so construed. Settling Defendants vigorously deny any
liability and Claimants acknowledge the highly disputed nature of American
International Industries, Inc.'s claims against Settling Defendants in the
Lawsuit. Claimants and Settling Defendants acknowledge that this Agreement is
made as a compromise to avoid further expense and to terminate for all time the
controversy underlying the Lawsuit.
3. Claimants will make best efforts to obtain the signatures of Elkana
Faiwuszewicz and Xxxxxx Xxxx XX to this Agreement.
4. American International Industries, Inc. will file a Motion for
Non-Suit with Prejudice to the Court for entry, within ten days after the
Settling Defendants pay the Consideration.
5. Settling Defendants agree that payment of the Consideration shall be
made within 45 days of the execution of this Agreement, to Xxxxx X. Bro, trustee
for American International Industries, Inc., said funds not to be disbursed to
American International Industries, Inc. or to Xxxxx X. Bro with regard to his
contingent fee interest in this case, until the Court signs the Order of
Non-Suit (the "Order") nonsuiting Claimants' claims against Settling Defendants.
Claimants agree that they shall not negotiate, or cause to have negotiated, the
instrument(s) that constitute the Consideration, other than to deposit to Xxxxx
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E. Bro's IOLTA trust account at Washington Mutual Bank, until after the Court
signs the Order.
6. Claimants agree to INDEMNIFY and to DEFEND and to HOLD Settling
Defendants and their insurers HARMLESS from All Third-Party Claims, together
with all costs, expenses, and legal fees in defending All Third-Party Claims.
"All Third-Party Claims" means (1) All Claims, arising out of or related to the
Lawsuit, that have been or that may later be asserted against Settling
Defendants by any person, entity, firm, or corporation claiming by, through, or
under Claimants and (2) All third-party actions or cross-actions seeking
contribution or indemnity asserted against Settling Defendants by UHY Xxxx
Frankfort Xxxxx and Xxxx CPAs, LLP, or any other party against whom American
International Industries, Inc. brings claims relating to the Incident, in which
Settling Defendants are alleged to be liable in any claim, demand, or cause of
action asserted by Claimants in the past, present, or future that arises out of
the Incident or the Lawsuit, or that falls within the definition of All Claims.
Claimants shall have the right and discretion to assume the defense of any such
Third--Party Claims. This indemnity is specifically intended to operate and be
applicable even if it is alleged or proved that all or some of the damages being
sought were caused as a whole or in part by any act, omission, negligence, gross
negligence, misrepresentation, breach of contract, intentional conduct,
violation of statute or common law, breach of warranty, product defect, strict
liability, or any other conduct whatsoever of the Settling Defendants.
7. In return for the Consideration Claimants represent and warrant the
following to Settling Defendants:
* Claimants are correctly described in this Agreement;
* Before executing this Agreement, Claimants became fully informed
of the terms, contents, conditions, and effect of this Agreement;
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* Before executing this Agreement, the signatory for Claimants
fully informed Claimants' officers and directors of the terms,
contents, conditions and effect of the Agreement;
* The signatories to this Agreement, for or on behalf of Claimants,
is fully authorized and legally competent to execute this
Agreement and is a duly authorized representative of Claimants;
* This Agreement is fully and forever binding on Claimants, their
successors, assigns and shareholders;
* No promise or representation of any kind has been made to
Claimants or by anyone acting for Claimants, except as is
expressly stated in this Agreement;
* Claimants have not assigned, pledged, or in any other manner sold
or transferred any right, title, interest, or claim that arises
out of the Agreement, the Incident or the Lawsuit, except to
Counsel for Claimants, who is executing this Agreement;
* In entering this Agreement, Claimants have had the benefit of the
advice of lawyers of its own choosing; and, Claimants enter this
Agreement freely, by Claimants' own choice, and judgment, and
without duress or other influence;
* Claimants understand that this Agreement is a full, final and
complete release, and that the cash Consideration is the only
money and benefits Claimants shall ever receive from Settling
Defendants as a result of the Incident or the Lawsuit.
8. Settling Defendants represent and warrant the following to Claimants:
* Settling Defendants are correctly described in this Agreement;
* Before executing this Agreement, Settling Defendants became fully
informed of the terms, contents, conditions, and effect of this
Agreement;
* Before executing this Agreement, the signatory for Settling
Defendants fully informed Settling Defendants' officers and
directors of the terms, contents, conditions and effect of the
Agreement;
* The signatories to this Agreement, for or on behalf of Settling
Defendants, is fully authorized and legally competent to execute
this Agreement and is a duly authorized representative of
Settling Defendants;
* This Agreement is fully and forever binding on Settling
Defendants, their successors, assigns and shareholders;
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* No promise or representation of any kind has been made to
Settling Defendants or by anyone acting for Settling Defendants,
except as is expressly stated in this Agreement;
* In entering this Agreement, Settling Defendants have had the
benefit of the advice of lawyers of their own choosing; and
Settling Defendants enter this Agreement freely, by Settling
Defendants' own choice, and judgment, and without duress or other
influence;
* Settling Defendants have not entered into any indemnity
agreements with Xxxx Frankfort.
* Settling Defendants are not currently aware of any third-party
actions or cross-actions seeking contribution or indemnity
asserted against Settling Defendants by UHY Xxxx Frankfort Xxxxx
and Xxxx CPAs, LLP.
9. As attested by the signature of Counsel for Claimants, this Agreement
was fully explained to Claimants by their counsel before Claimants signed the
Agreement, and all legal fees and expenses are to be received by Counsel for
Claimants out of the Consideration.
10. This Agreement shall be effective and binding on all parties that sign
and execute it, even if fewer than all of the parties sign and execute it. Any
party that does not sign this Agreement shall not be bound by the provisions of
this Agreement, nor shall any party that does not sign this Agreement have a
right to any benefits under this Agreement.
11. Regardless of whether or not this Agreement is signed and executed by
Xxxxxxxx Capital, the Agreement shall be effective as to officers and directors
of Xxxxxxxx Capital. Any provision of this release affecting Xxxxxxxx Capital,
as a corporate entity separate and apart from its directors and officers, is
contingent on the approval and execution of this Agreement by Xxxxxxxx Capital.
12. Except as otherwise required by law, the terms of this Agreement and
all references to monetary consideration shall be kept CONFIDENTIAL and shall be
disclosed only to the parties to this Agreement, their counsel, and their
accountants and auditors. Except as legally required, Claimants, Settling
Defendants, and their respective attorneys agree not to initiate any contact
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with the media concerning, or otherwise seeking publicity for, the terms of this
settlement, provided that American International Industries, Inc. and Orion
HealthCorp., Inc. shall be entitled to make a press release or file a mandatory
disclosure with the SEC. The amount of the settlement shall not be disclosed
unless the attorneys for American International Industries, Inc. or Orion
HealthCorp, Inc. say that it is necessary.
13. Claimants and Settling Defendants each acknowledge that this
instrument constitutes the entire Agreement between them related to All Claims
in this Lawsuit.
EXECUTED in multiple originals, each of equal dignity, on the date(s) as
noted below.
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American International Industries, Inc. Counsel for Claimants
By /s/ Xxxxxx Xxxx By /s/ Xxxxx Bro
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Xxxxxx Xxxx Xxxxx Bro
September 8, 2006 September 8, 2006
By /s/ Xxxxxx Xxxx XX
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International Diversified Corporation, Ltd. Xxxxxx Xxxx XX
September 8, 2006
By /s/ Elkana Faiwuszewicz
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Elkana Faiwuszewicz
September 11, 2006
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Xxxxxxxx Capital Corporation Xxxxxxxx Venture Partners III,
L.P.
By /s/ Xxxxxxx Xxxxxxxxx By /s/ Xxxx X. Xxxxxx
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Xxxxxxx Xxxxxxxxx Xxxx X. Xxxxxx
September 13, 2006 September 8, 2006
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Xxxxxxxx Venture Partners IV, L.P. Xxxxx X. XxXxxxx
By /s/ Xxxx X. Xxxxxx By /s/ Xxxxx X. XxXxxxx
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Xxxx X. Xxxxxx Xxxxx X. XxXxxxx
September 8, 2006 September 12, 2006
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Orion HealthCorp, Inc.
By /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
September 9, 2006
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