S3 Reliablesettle

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SETTLEMENT AGREEMENT

AND

MUTUAL RELEASE

This Settlement Agreement and Mutual Release (the "Agreement")

is

made as

of

December 5, 2007 (the "Effective Date"), by and between RELIABLE HEALTH CARE

SERVICES, INC. ("Reliable") and the COUNTY OF LOS ANGELES (the "County"). Reliable

and the County may, hereafter be referred to individually as a "Party" to the Agreement, or

collectively as the "Parties" to the Agreement.

RECITALS

WHEREAS, Reliable was awarded three separate County contracts, Contract Nos. H-

211863, H-701360, and H-701773, with Reliable to provide temporary healthcare staff to the

County (the Contracts").

WHEREAS, on

or

about January 23, 2007, ,the Department

of

Health Services

recommended to the County Board

of

Supervisors that the contracts be terminated for

convenience. The Board subsequently approved such termination, and the contracts were

terminated effective midnight February 22, 2007.

WHEREAS, on

or

about March 5, 2007, the County initiated Debarment Proceedings

against Reliable pursuant to Chapter 2.202, et seq.,

of

the Los Angeles County Code (the

"Debarment Proceeding").

WHEREAS, on

or

about July 9, 2007, Reliable filed a claim for damages against the

County pursuant to Cal. Government Code section 910, et seq., alleging, among others, breach

of

contract, breach

of

the covenant

of

good faith and fair dealing, and trade libel (the "Reliable

Claims") (together, with the Debarment Proceedings, the "Dispute").

WHEREAS, notwithstanding the Parties' respective positions, and in an effort to avoid

any future litigation, on September 19, 2007, the parties agreed to the terms

of

a resolution

of

the

Dispute, which terms are reflected in Exhibit "A", consisting

of

two pages, attached hereto and

incorporated herein

by

reference.

WHEREAS, the Parties now wish to formally memorialize their compromise and

settlement by entering into this Agreement, doing so freely and voluntarily, after having received

the benefit

of

independent counsel and with full knowledge

of

the binding and conclusive nature

thereof.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency

of

which are hereby acknowledged, including the mutual promises contained in this Agreement,

and subject to approval

by

the Los Angeles County board

of

supervisors, it

is

agreed between

Reliable and the County that:

LA

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211368-10001

1

TERMS

OF

THE

AGREEMENT

1.

Settlement Obligations.

1.1

On or before December

28,

2007,

the County shall pay to Reliable the

balance

of

all outstanding invoices representing services rendered by Reliable, which balance the

Parties agree

is

$709,134.57, less the sum

of

$250,000.

1.2

In

accordance with the terms set forth in Exhibit "A", Reliable shall cease

doing business with the County for a period

of

ten (10) years, commencing on the Effective Date

of

this Agreement.

2.

Dismissal of Actions and Proceedings.

2.1

Within (5) business days from the Effective Date

of

this Agreement, the

County shall confmn in writing that the Debarment Proceedings have been withdrawn and fully

dismissed with prejudice.

2.2

Within (5) business days from the receipt

of

payment by the County

pursuant to Paragraph

1.1

of

this Agreement, Reliabl,e shall withdraw and fully dismiss, with

prejudice, the Reliable Claims.

3. Mutual General Release.

3.1 The Parties hereby release and forever discharge each other, and each

of

their past and present predecessors, successors, affiliates, subsidiaries, parents, insurers, officers,

directors, employees, heirs, assigns, agents, and attorneys from any and all known and unknown

claims, disputes, demands, debts, liabilities, obligations, contracts, agreements, causes

of

action,

suits, attorneys' fees andlor costs,

of

whatever nature, character or description, which the Parties

had, now have, or may have related to the Dispute and/or any

of

the matters which arise out of,

from, asserted in, or which could have been asserted in connection with the dispute.

4.

Waiver of Claims. Except

as

otherwise provided

in

this Agreement, the Parties

agree that this Agreement shall act as a release

of

any and all claims that may arise from conduct

prior to the date

of

this Agreement in connection with the Dispute whether such claims are

known, unknown, foreseen, or unforeseen, liquidated or unliquidated, choate or inchoate,

notwithstanding Section 1542

of

the California Civil Code which provides:

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1690036J

211368-10001

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT

TO EXIST IN HIS OR HER FAVOR AT THE TIME OF

EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM

OR HER MUST HAVE MATERIALLY AFFECTED HIS OR

HER

SEITLEMENT

WITH THE DEBTOR.

2

The Parties understand and acknowledge the significance and consequence

of

such specific waiver

of

Section 1542 and hereby assume full responsibility for any injuries, damages, losses, or

liability that they may hereafter incur from the Dispute.

5.

No

Admission. The Parties' execution

of

this Agreement

is

not an admission

of

any liability, fault or responsibility. on the part

of

any released party. Any settlement made

pursuant to this Agreement is regarded by the Parties hereto

as

payment to avoid the expense,

inconvenience and uncertainty

of

litigation.

6. Consultation with Counsel. The Parties acknowledge that they have been

represented by counsel

of

their own choice in the negotiations leading to their execution

of

this

Agreement, and that they have read this Agreement and have had it fully explained to them by

their counsel.

7.

No

Reliance. The Parties represent and warrant that, in executing and entering

into this Agreement, they are not relying and have not relied upon any representation, promise or

statement made by anyone which is not recited, contained or embodied in this Agreement.

Furthermore, each

of

the parties to this Agreement has received independent legal advice, or has

had the opportunity to receive independent legal advice, from such Party's respective attorneys

with respect to the advisability

of

executing this Agreement. The Parties are entering into this

Agreement wholly

of

their own free will and volition.

8.

Entire Agreement. This Agreement comprises and contains the entire agreement

between the Parties respecting the matters set forth in this Agreement, and supersedes and

replaces all prior negotiations, understandings, proposed agreements and agreements between the

Parties, written or oral. Neither Party has made any statement, representation or promise, other

than as expressly set forth herein, to any other party in entering into this Agreement, which has

been relied upon

by

any other party entering into this Agreement.

9.

Construction of this Agreement. The language

of

this Agreement shall be

construed

as

a whole according to its fair meaning and not strictly for or against any Party hereto.

Both Parties have participated in drafting this Agreement. The Parties understand and expressly

assume the risk that any fact not recited, contained or embodied herein may tum out hereafter to

be other than, different from,

or

contrary to the facts now known to them or believed

by

them to

be true. Nevertheless, the Parties intend by this Agreement, and with the advice

of

their own,

independently selected counsel, to release fmally, fully and forever, all matters released

hereunder and agree that this Agreement shall be effective in all respects notwithstanding any

such difference in facts, and shall not be subject to termination, modification or rescission by

reason

of

any such difference in facts.

10.

Severability. The provisions

of

this Agreement are severable, and

if

any part

of

it

is found to be unenforceable, the other paragraphs shall remain in full force and effect. . This

Agreement shall survive the termination

of

any arrangements contained herein.

11.

No

Waiver

of

Terms

or

Conditions. Failure to insist on compliance with any

term

or

condition

contained

in

this

Agreement

shall

not

be

deemed

a

waiver

of

that

term

or

condition, nor shall any waiver or relinquishment

of

any right or power contained in this

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211368-10001

3

Agreement at

anyone

or more times be deemed a waiver or relinquishment

of

any right or power

at any other time or times.

12.

Authority

of

Signatories. Each

of

the persons executing this Agreement

is

empowered and authorized to do so on his, her, or its own

or

principal's behalf, and no further

consents or approvals are required

13.

Further Assurances. Each Party agrees to take such further actions and

to

execute such further documents, instruments and agreements as may be reasonably requested by

the other Party to further confinn and effect the consummation

of

the transactions contemplated

by this Agreement.

14.

Choice

of

LawNenue. This Agreement

is

executed and delivered within the

State

of

California, and the rights and obligations

of

the Parties hereunder shall be construed and

enforced in accordance with and governed by the laws

of

the State

of

California.

In

the event

of

any dispute in connection with this Agreement, the Parties hereto agree that the State Courts

of

Los Angeles County shall constitute the most appropriate venue for any such lawsuit or dispute

due to the convenience

of

likely witnesses.

15.

Costs.

In

entering into this Agreement, the Parties

acknowl~dge

that each side

is

to bear their own attorneys' fees and costs connected with andlor arising from the Dispute and

that no claim for such may be made at any subsequent time.

16.

Modification

and

Amendment. This Agreement may not be modified or

amended in any way, except by a writing signed by the party to be charged therewith.

17.

Counterparts. This Agreement may be signed in counterparts, and each

counterpart so signed shall constitute a part

of

one valid original document.

18.

Facsimile

or

PDF Transmission. This document may be signed by facsimile or

as a PDF document. A photocopy

of

this Agreement may be used

as

the original.

19.

Section Descriptions. The use

of

headings in this Agreement

is

only for ease

of

reference and the headings have no effect and are not to be considered part or terms

of

this

Agreement.

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211368-10001

4

PLEASE

READ CAREFULLY.

TIDS

SETTLEMENT

AGREEMENT

AND GENERAL

RELEASE INCLUDES A

RELEASE

OF

ALL

KNOWN AND UNKNOWN CLAIMS.

EXECUTED

TIlE

DAY AND

YEAR

FIRST

ABOVE

WRITTEN

•.

RELIABLE HEALTH CARE SERVICES, COUNTY

OF

LOS ANGELES,

INC. DEPARTMENT

OF

HEALTH SERVICES

By: William Benbassat By:

APPROVED

AS

TO

FORM

AND

CONTENT:

Dated: December

_,

2007

,.,-

Dated:

December.L,

2007

LA

I

690036.3

211368-10001

OFFICE OF

THE

COUNTY COUNSEL

By:

_____________

_

Andrea E.

Ross

Attorney for County of Los Angeles

LOEB & LOEB LLP

5

Reliable Health Care Services, Inc., including its owners, officers, principals, partners

and major shareholders,

in

any form whatsoever, including but not limited to any

successor companies, change

of

ownership

of

Reliable, assignment

of

Reliable, Reliable

doing business under any fictitious names, and any company in which any Reliable

owner, principal, partner and/or shareholder has an interest

of

ten percent

or

more or is

employed in an executive capacity whereby that person has administrative or managerial

authority in that company, with respect to the day to day operations

of

such company

(collectively and individually referred to hereafter as "Reliable"), shall voluntarily cease

from doing business with the County

of

Los Angeles, including all

of

its departments,

Commissions, Special Districts, or any other components for a period

of

10 years,

commencing

on

the date

of

execution

of

this Agreement and ending

on

the date ten years

thereafter. For purposes

of

this provision, "doing business with the County

of

Los

Angeles" shall mean that "Reliable" shall not respond to any solicitations for any and all

contracts

of

any kind with the County

of

Los Angeles, including all

of

its departments,

including the County's Purchasing Agent, Special Districts, Commissions,

or

any other

component

of

the County, and shall not enter into sole source (i.e., unsolicited) contracts,

or any Purchase Order contracts, whether those Purchase Order contracts are

competitively solicited

or

issued as sole source contracts.

Reliable is a corporation and William Benbassat is its sole shareholder.

A change

of

ownership

of

Reliable within the ten year period does not serve to terminate

this Agreement.

It

is the intent

of

this agreement to effectuate the complete termination

of

all contractual

relationships between Reliable and Los Angeles County in their entirety effective as

of

January 11,2007, and this agreement shall be liberally and broadly construed to

effectuate said purposes.

The County shall have the absolute discretion to communicate, as reasonably necessary

in the ordinary course

of

the County's operations, Reliable's voluntary exclusion from

County business to any and all

of

its departments, Commissions, Special Districts, and

any other components, through whatever means and how often

it

deems necessary. The

parties expressly agree that Reliable has not been debarred, and in no event, however,

shall the County communicate, state or otherwise suggest, directly

or

indirectly, that

Reliable has been debarred, nor shall the County include Reliable's name

on

any list

of

debarred County contractors.

During the pendency

of

Reliable's voluntary ceasing

of

business with the County, should

Reliable bid

on

any contract, RFP, Purchase Order, or any other matter or project, the

parties agree that the County may reject said bid, without any right

of

appeal by Reliable,

administratively or judicially.

Reliable understands and agrees that this Provision is a material part

of

the overall

Agreement to resolve its dispute with the County and that the County relies upon such in

agreeing to this resolution.

HOA.657228.lLAI681767.2

211368-10001

This Agreement is the compromise

of

disputed claims, and nothing contained herein is to

be construed as an admission

of

any factual conclusion, status,

or

liability on the part

of

any party hereto regarding the subject matter

of

this Agreement.

HOA.657228.lLA 1681767.2

211368-10001