SETTLEMENT AND SEPARATION AGREEMENT
BY AND AMONG
RTIN HOLDINGS, INC.,
MEDEX SYSTEMS, INC.,
PEGASUS PHARMACY, INC.,
IT/IS, INC.,
STANLEY SWANSON,
CURTIS SWANSON,
LAURENCE SOLOW,
ANN RAU,
AND
HUNTER CARR
THIS SETTLEMENT AND SEPARATION AGREEMENT (this "Agreement") is entered
into by and among RTIN Holdings, Inc., a Texas corporation ("RTIN"); MedEx
Systems, Inc., a Louisiana corporation ("MedEx"); Pegasus Pharmacy, Inc., a
Louisiana corporation ("Pegasus"); IT/IS, Inc., a Texas corporation ("IT/IS");
Stanley Swanson, a Texas resident; Curtis Swanson, a Texas resident; Laurence
Solow, a Louisiana resident; Ann Rau, a Louisiana resident; and Hunter Carr, a
Texas resident, (each individually, a "Party" or collectively, the "Parties"),
as of this 8th day of March 2002 ("Effective Date").
R E C I T A L S
WHEREAS, the Parties desire to effect the separation of certain
business relationships between and among them, including, without limitation,
(1) any and all relationships arising out of that certain Stock Purchase
Agreement, by and among RTIN, MedEx, Pegasus, Mr. Solow and Ms. Rau, dated
December 5, 2001 (the "Stock Purchase Agreement," which term shall include the
Registration Rights Agreement, dated as of February 4, 2002, by and between
RTIN, Mr. Solow and Ms. Rau and any other agreements relating to the acquisition
of all of the outstanding shares of MedEx and Pegasus by RTIN) and (2) any and
all relationships arising out of (a) certain monies IT/IS wired to Pegasus in
the amount of $140,000 and (b) $10,000 wired by IT/IS to RTIN pursuant to that
certain Letter Agreement, entered into by and between RTIN and IT/IS, dated as
of October 24, 2001 and executed as of October 29, 2001 (the "RTIN/Carr
Agreement"); and
WHEREAS, the Parties desire to settle certain disputes between and
among them;
NOW, THEREFORE, the Parties, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, agree as follows:
A G R E E M E N T
A. RETURN OF STOCK
(1) Upon the execution of this Agreement, Mr. Solow and Ms. Rau shall
return to RTIN 3,771,127 shares of RTIN common stock, representing any
and all shares of RTIN stock issued to Mr. Solow, Ms. Rau or their
designees pursuant to the Stock Purchase Agreement and any actual or
purported extensions thereto.
(2) Upon the execution of this Agreement, RTIN shall return to Mr. Solow
and Ms. Rau the stock certificates, representing one hundred percent of
the issued and outstanding shares of MedEx and Pegasus. Further, RTIN
hereby releases any security interest and/or pledges that may have been
granted to it in the MedEx and Pegasus stock and, upon request, shall
execute any additional documents that may be desirable or necessary to
confirm such release.
(3) Within five days of the execution of this Agreement, IT/IS shall return
to RTIN 300,000 shares of RTIN common stock, representing any and all
shares of RTIN stock issued to IT/IS pursuant to the RTIN/Carr
Agreement.
B. RETAINED AND RETURNED FUNDS; RELEASES FROM CERTAIN OBLIGATIONS
(1) Within two business days of the execution of this Agreement, MedEx and
Pegasus shall return to RTIN the amount of $160,457.83, representing
funds tendered to MedEx and Pegasus during the week of February 25,
2002.
(2) MedEx and Pegasus shall be entitled to retain, without any obligation
to repay, all other funds tendered to them by RTIN arising out of the
Stock Purchase Agreement, which other funds total, in the aggregate,
approximately $940,000. RTIN recognizes that any promissory notes
executed by MedEx, Pegasus, Mr. Solow or Ms. Rau in connection with, or
in consideration of, such tendered funds were converted into a capital
contribution of RTIN under the Stock Purchase Agreement and, as such,
have no further force or effect. Further, RTIN hereby releases any and
all other security interests that may have been granted to it by MedEx,
Pegasus, Mr. Solow or Ms. Rau in connection with, or in consideration
of, such tendered funds, including, without limitation, any and all
security agreements, UCC-1 Financing Statements or USPTO filings. Upon
request, RTIN shall execute any additional documents that may be
desirable or necessary to confirm that all such promissory notes and
all such previously granted security interests have no further force or
effect.
(3) MedEx and Pegasus agree to use their best efforts to effect an
expedient termination of the guarantee executed by RTIN in favor of
McKesson for the debts of Pegasus Pharmacy (the "McKesson Guarantee").
Pending the termination of the McKesson Guarantee, MedEx and Pegasus
agree to hold harmless and indemnify RTIN for any amounts that RTIN may
be required to pay on or after the Effective Date of this Agreement
pursuant to the McKesson Guarantee.
(4) MedEx, Pegasus, Mr. Solow and Ms. Rau hereby release RTIN from any
obligations arising out of any employment and/or consulting agreements
for employees or consultants of MedEx or Pegasus. Further, MedEx and
Pegasus acknowledge and agree that neither has the right to enforce any
terms or conditions of such agreements against any of the parties
thereto.
(5) RTIN, Mr. Curtis Swanson and Mr. Stanley Swanson hereby release MedEx
and Pegasus from any obligations arising out of any employment and/or
consulting agreements for employees or consultants of RTIN. Further,
RTIN acknowledges and agrees that it has no rights to enforce any terms
or conditions of such agreements against any of the parties thereto.
(6) With regard to the two existing Houston leases ("Houston Leases") for
planned pharmacy sites, RTIN hereby assigns such leases to IT/IS, and
IT/IS agrees to assume such leases, unless the indemnity below fails,
in which event, it can terminate the same. With respect to the Houston
Leases, Mr. Solow agrees to indemnify and hold harmless IT/IS in all
respects from any expenses, liability or causes of action pertaining to
the Houston Leases (other than rent), until IT/IS executes new leases
at which time the indemnity and the hold harmless shall expire. IT/IS
shall use its best efforts to expeditiously execute such new leases to
replace the Houston Leases. Further, (a) Curtis Swanson & Co. joins
herein for the sole purpose of consenting to this provision and (b)
MedEx and Pegasus hereby assign all rights in and to the Houston Leases
to IT/IS.
(7) Within ten (10) days following the execution of this Agreement, RTIN
agrees to return all equipment owned or leased by MedEx or Pegasus,
including, without limitation, any iPaq units, telecommunications
equipment and computer equipment.
C. GRANT OF EXCLUSIVE PERPETUAL LICENSES
(1) MedEx and Pegasus shall grant RTIN a perpetual, paid-up, exclusive
license (and the exclusive right and license to use, offer for sale and
sell sublicenses) ("Perpetual RTIN License") to the applications for
the use of MedEx's proprietary ZipScript software, as it currently
exists, ("ZipScript") and the MedEx/Pegasus business process, as it
currently exists, that is currently the subject of a pending patent
application (the "MedEx System"); provided, however, that such
Perpetual RTIN License shall be limited to the use of ZipScript, or any
derivation thereof, and the MedEx System, or any derivation thereof, in
the RTIN Territory, as such term is defined hereinbelow. The Perpetual
RTIN License shall include the right to use the tradename "ZipScript."
(2) MedEx and Pegasus shall grant IT/IS a perpetual, paid-up license (and
the exclusive right and license to use, offer for sale and sell
sublicenses) ("Perpetual IT/IS License") to the applications for the
use of MedEx's proprietary ZipScript software, as it currently exists,
("ZipScript") and the MedEx/Pegasus business process, as it currently
exists, that is currently the subject of a pending patent application
(the "MedEx System"); provided, however, that such Perpetual IT/IS
License shall be limited to the use of ZipScript, or any derivation
thereof, and the MedEx System, or any derivation thereof, in the IT/IS
Territory, as such term is defined hereinbelow. The Perpetual IT/IS
License shall include the right to use the tradename "ZipScript."
(3) As it relates to above grants by MedEx and Pegasus of the Perpetual
RTIN License and the Perpetual IT/IS License, MedEx and Pegasus
represent and warrant that (a) they have ownership of ZipScript and the
MedEx System and (b) they have not granted any rights whatsoever to
anyone that would interfere with or otherwise diminish such grants.
(4) For 180 days following the execution of this Agreement ("RTIN/IT/IS
Access Period"), RTIN and IT/IS shall be granted full access to any and
all information, including reasonable access to MedEx and Pegasus
employees, related to ZipScript and the MedEx System; provided,
however, that on-site access shall be restricted to a thirty-day period
within the first sixty days following the Effective Date of this
Agreement. Thereafter, RTIN and IT/IS shall each have the right to
modify, upgrade, enhance or improve ZipScript and/or the MedEx System,
as they may desire, for use of the same in the RTIN Territory or the
IT/IS Territory, as the case may be. Neither RTIN nor IT/IS shall have
any obligation to disclose to or share with MedEx or Pegasus or with
each other any such modifications, upgrades, enhancements or
improvements. RTIN and IT/IS each understand and agree that following
the Effective Date of this Agreement, neither MedEx nor Pegasus shall
have any obligation to disclose to or share with RTIN or IT/IS any
modifications, upgrades, enhancements or improvements of ZipScript or
the MedEx System.
(5) RTIN and IT/IS each acknowledge and agree that the Perpetual RTIN
License and the Perpetual IT/IS License, respectively, shall not
include the right, nor is such right granted hereunder, to use the
tradenames, trademarks or logos of MedEx or Pegasus. With regard to the
pharmacy site in Longview, Texas, RTIN agrees to file all necessary
documents with the Texas Board of Pharmacy within three (3) days of the
execution of this Agreement to change the name of the pharmacy from
"Pegasus Pharmacy" to any such other name desired by RTIN.
(6) RTIN and IT/IS each acknowledge and agree that they shall be solely
responsible for the purchase and maintenance of any and all equipment
necessary to use ZipScript or the MedEx System in their respective
territories.
(7) MedEx and Pegasus agree to permit RTIN and IT/IS to contract with
Kendall Elliott, the independent consultant hired by MedEx to assist in
the development of ZipScript, for the sole purpose of gaining
information regarding ZipScript, as it currently exists; provided,
however, that (a) Eric Mutter or another MedEx designee shall be
present during all contact between RTIN and/or IT IS and Mr. Elliott,
(b) all contact is limited to the RTIN/IT/IS Access Period, (c) RTIN
and IT/IS agree not to interfere with MedEx and/or Pegasus's current
and/or future contracting relationship with Mr. Elliott and (d) neither
RTIN nor IT/IS attempt to acquire information or access to any
modifications, enhancements or improvements made to ZipScript, by Mr.
Elliott, at the request of MedEx and/or Pegasus after the Effective
Date of this Agreement.
(8) IT/IS agrees that it has no claim to, shall not assert any claim
against, any interest in any of the Metropolitan Service Areas granted
to MedEx and Pegasus or to RTIN under this Agreement.
(9) The Parties will, as expeditiously as possible, formalize the Perpetual
RTIN License and the Perpetual IT/IS License, by entering into, on or
before March 13, 2002, formal perpetual license agreements,
respectively, in a mutually agreeable form that is to be consistent
with the terms set forth in this Agreement.
D. DIVISION OF TERRITORIES
(1) MedEx/Pegasus Territory. MedEx and Pegasus shall have the exclusive
right to use ZipScript, including any derivation thereof produced by
MedEx and Pegasus, and the MedEx System, including any derivation
thereof produced by MedEx and Pegasus, in the following Metropolitan
Service Areas ("MedEx/Pegasus Territory"), as each is designated by
rank number, immediately preceded by the MSA area name, on Schedule D,
attached hereto:
***1,3,4,6,7,8,11,12(except for city of Ft. Lauderdale),14,16,
18,20, 21,22, 24,25,26,29,31,32,34,35,36,37,40,41,42,43,44,45,
46,47,50,53,55,56,61,70,77,79,100,106,121***
(2) IT/IS Territory. Pursuant to the Perpetual IT/IS License, IT/IS shall
have the exclusive right to use ZipScript, including any derivation
thereof produced by IT/IS, and the MedEx System, including any
derivation thereof produced by IT/IS, in the following Metropolitan
Service Areas ("IT/IS Territory"), as each is designated by rank
number, immediately preceded by the MSA area name, on Schedule D,
attached hereto:
***9,10,30,38,39,49,52,57,60,62,63,66,67,68,72,80,82,86,89,94,
95,96,104,108,110,114,115,119,120,131,132,134,136,137,142,143,
144,150,153,154,155,157,161, 169,174,178,185, 194,196,200,202,
203,204, 205,207,209,210, 212,213,217,220,222,226,229,230,233,
234,240,241,247,250,253,255,259,261,266,267,268,271,273,280***
(3) RTIN Territory. Pursuant to the Perpetual RTIN License, RTIN shall have
the exclusive right to use ZipScript, including any derivation thereof
produced by RTIN, and the MedEx System, including any derivation
thereof produced by RTIN, in all of the remaining Metropolitan Service
Areas ("RTIN Territory"), as each is designated by number on Schedule
D, attached hereto, that have not been granted to MedEx/Pegasus or
IT/IS hereinabove. In addition, RTIN shall have the exclusive right to
use ZipScript, including any derivation thereof, and the MedEx System,
including any derivation thereof, in any country other than the United
States, with the exception of Metropolitan Service Area number 20 (San
Juan-Caguas-Arecibo, PR), as such area is designated by number on
Schedule D, attached hereto.
E. RELEASES
(1) Definitions. The terms "Claim" or "Claims" shall mean any and all
claims, liabilities, demands, obligations, losses or causes of action
that any person or organization ever had, now has or hereafter can,
shall or may have, whether liquidated or unliquidated, fixed or
contingent, mature or unmatured, known or unknown, foreseen or
unforeseen, choate or inchoate (including, without limitation, claims
for indemnity, contribution or otherwise), direct or indirect then
existing or thereafter arising, in law, equity or bankruptcy, civil or
criminal, seeking damages, attorney's fees, litigation costs,
injunctions, contractual or extra-contractual relief, whether brought
by way of demand, complaint, cross-claim, counterclaim or third party
claim, and whether arising out of contract, tort or otherwise (except
of r any breach of this Agreement or anything related thereot that is
hereby preserved and not released).
(2) Release by the MedEx/Pegasus Parties. Each of MedEx, Pegasus, Mr. Solow
and Ms. Rau (the "MedEx/Pegasus Parties") for themselves and, to the
maximum extent permitted by law, on behalf of their present and former
partners, managers, principals, insurers, agents, affiliates, parents,
subsidiaries, partnerships, trusts, shareholders, officers, directors,
employees, servants, independent contractors, attorneys and other
representatives, executors, administrators, trustees, beneficiaries,
predecessors, and the successors and assigns of each of them, in their
individual and representative capacities, does hereby irrevocably and
forever release, acquit and discharge each of the RTIN Parties (as
hereinafter defined) and each of the IT/IS Parties (as hereinafter
defined), and their respective affiliated or related partnerships and
corporations and their respective past, present and future partners,
managers, principals, directors, officers, employees, insurers, agents,
attorneys and other representatives, administrators, trustees,
successors, heirs, beneficiaries, servants, independent contractors and
assigns of each of the RTIN Parties and the IT/IS Parties (collectively
with respect to the RTIN Parties, the "RTIN Released Parties" and
collectively with respect to the IT/IS Parties, the "IT/IS Released
Parties"), of and from any and all Claims that arise out of, concern,
relate to, or are in any way connected to the subject matter of this
Agreement.
(3) Release by the RTIN Parties. RTIN, Mr. Curtis Swanson and Mr. Stanley
Swanson (the "RTIN Parties"), for themselves and, to the maximum extent
permitted by law, on behalf of their present and former partners,
employees, insurers, agents, affiliates, partnerships, corporations,
trusts, heirs, servants, independent contractors, attorneys and other
representatives, executors, administrators, trustees, beneficiaries,
predecessors, and the successors and assigns of each of them, in their
individual and representative capacities, does hereby irrevocably and
forever release, acquit and discharge each of the IT/IS Released
Parties and each of the MedEx/Pegasus Parties and their respective
affiliated or related partnerships and corporations and their
respective past, present and future partners, managers, principals,
directors, officers, employees, insurers, agents, attorneys and other
representatives, administrators, trustees, successors, heirs,
beneficiaries, servants, independent contractors and assigns of each of
the MedEx/Pegasus Parties (collectively with respect to the
MedEx/Pegasus Parties, the "MedEx/Pegasus Released Parties"), of and
from any and all Claims that arise out of, concern, relate to, or are
in any way connected to the subject matter of this Agreement.
(4) Release by IT/IS PARTIES. IT/IS and Mr. Carr (the "IT/IS Parties"), for
themselves and, to the maximum extent permitted by law, on behalf of
their present and former partners, managers, principals, insurers,
agents, affiliates, parents, subsidiaries, partnerships, trusts,
shareholders, officers, directors, servants, independent contractors,
attorneys and other representatives, executors, administrators,
trustees, beneficiaries, predecessors, and the successors and assigns
of each of them, in their individual and representative capacities,
does hereby irrevocably and forever release, acquit and discharge each
of the MedEx/Pegasus Released Parties and each of the RTIN Released
Parties of and from any and all Claims that arise out of, concern,
relate to, or are in any way connected to the subject matter of this
Agreement.
(5) The MedEx/Pegasus Released Parties, RTIN Released Parties and IT/IS
Released Parties are hereinafter referred to collectively as the
"Released Parties."
(6) Release of Unknown Claims.
(a) Each of the Parties hereby agrees, represents and warrants
that the Claims released herein are not limited to Claims that are
known or disclosed as of this Agreement, and, in connection with the
subject matter of the releases contained in this Agreement, each of the
Parties hereby waives any and all rights and benefits that he, she or
it now has or in the future may have conferred upon him, her or it by
virtue of the provisions of law of any jurisdiction that may now exist
or hereafter be enacted and that may be applicable to the Claims so
released in this Agreement. In this connection, each of the Parties
hereby agrees, represents and warrants that he, she or it realizes,
acknowledges and agrees to assume the risk, that actual matters now
unknown, unanticipated or misunderstood by him, her or it in connection
with the subject matter of the Claims in this Agreement may have given
or hereafter give rise to Claims or defenses, liabilities, obligations,
demands, debts, controversies, damages, costs, losses and expenses that
are presently unknown, unanticipated, unsuspected or misunderstood,
which are Claims, and further agrees, represents and warrants that the
releases in this Agreement have been negotiated and agreed upon in
light of that realization and that he, she or it nevertheless intends
to release, discharge and acquit all Released Parties from any such
Claims whether unknown causes of action, claims, demands, debts,
controversies, damages, costs, losses and expenses, which are Claims,
that in any way are related to the subject matter of this Agreement.
(b) Each of the Parties further acknowledges that after the date
of this Agreement, the only Claims that he, she or it could possibly
have against any Released Party with respect to the subject matter of
this Agreement would be those arising under this Agreement, or conduct
arising by virtue of a breach of this Agreement or any matter arising
after the date of this Agreement.
(c) To the extent (if any) to which such laws may be applicable,
each of the Parties hereby waives and releases (to the maximum extent
permitted by law) any claims, rights or defenses which he, she or it
might otherwise have under any other law of any applicable jurisdiction
that might limit or restrict the effectiveness or scope of the releases
granted herein, or the rights of the Released Parties hereunder.
(7) No Lawsuits. None of the Parties shall institute or prosecute any
action or suit, whether of a civil or criminal nature, against any
Released Party in order to collect, enforce, declare, assert, establish
or otherwise raise any Claim which is within the scope of those
released hereunder. The releases contained in this Agreement shall
constitute a complete defense to any Claim released hereunder.
(8) No Admission of Liability. This Agreement is not, and should not be
construed as, an admission of liability by any Party to any other
Party. Neither this Agreement, nor the fact that a settlement has been
reached with respect to any Claim, nor the consideration exchanged
herein, shall be admissible into evidence against any Party as an
admission of any liability or fault. Notwithstanding the immediately
preceding sentence, this Agreement, if otherwise admissible, may be
introduced into evidence at any proceeding between or among the Parties
to enforce its terms.
F. MISCELLANEOUS
(1) Amendments; Waivers. This Agreement may be modified or amended only by
an instrument in writing signed by all of the Parties hereto. The
waiver by any Party hereto of a breach by any other Party of any term
or provision in this Agreement shall not operate as, or be construed as
a waiver of, a subsequent or continuing breach by that Party of the
same or any similar provision of this Agreement. The delay or failure
of a Party to transmit any written notice hereunder shall not
constitute a waiver by that Party of any default hereunder or any other
or further default under this Agreement.
(2) Headings. Headings have been inserted for convenience of reference only
and do not constitute a part of this Agreement.
(3) Interpretation. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed or resolved against any of the Parties
hereto, whether under any rule of construction or otherwise. On the
contrary, this Agreement has been reviewed by all Parties and shall be
construed and interpreted according to the ordinary meaning of the
words used so as to fairly accomplish the purposes and intentions of
all Parties hereto.
(4) Entire Agreement. This Agreement and the schedules and exhibits thereto
constitute the entire agreement of the Parties and shall supercede any
and all prior agreements with respect to the subject matter hereto,
including, without limitation, the Stock Purchase Agreement, and all
such predecessor and successor agreements ancillary or related thereto,
and the RTIN/Carr Agreement.
(5) No Third Party Beneficiaries. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person,
other than the Parties hereto and their respective successors and
permitted assigns, any rights or remedies under or by reason of this
Agreement.
(6) No Disparagement. The Parties hereto agree to refrain from making any
written or verbal disparaging statements to third parties, concerning
any of the other Parties to this Agreement.
(7) Severability. If any provision of this Agreement is prohibited by law
or is otherwise determined to be invalid or unenforceable by a court of
competent jurisdiction, such provision shall not affect the validity of
the remaining provisions of this Agreement.
(8) All Parties hereto represent that they (a) are authorized to sign this
Agreement, (b) if a corporation, are in good standing and (c) have full
authority to perform all terms herein.
[Signature page follows.]
WHEREFORE, THE UNDERSIGNED have each executed this Agreement as of the
day and year first written above.
RTIN HOLDINGS, INC. /s/ Stanley Swanson
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Stanley Swanson, individually
/s/ Curtis Swanson
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By: Curtis Swanson /s/ Curtis Swanson
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Its: President/COO Curtis Swanson, individually
MEDEX SYSTEMS, INC. /s/ Laurence Solow
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Laurence Solow, individually
/s/ Laurence Solow
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By:Laurence Solow /s/ Ann E. Rau
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Its: CEO Ann E. Rau, individually
PEGASUS PHARMACY, INC. /s/ Hunter Carr
---------------
Hunter Carr, individually
/s/ Ann E. Rau
- --------------
By: Ann E. Rau
Its: CEO
IT/IS, INC.
/s/ Hunter Carr
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By: Hunter Carr
Its: CEO
CURTIS SWANSON & CO.,
for the limited purpose of Section B(6) hereof
/s/ Curtis Swanson
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By: Curtis Swanson
Its: