Exhibit 10.1


 


AGREEMENT
SETTLING DISPUTES AND RELEASING CLAIMS


 


THIS AGREEMENT
SETTLING DISPUTES AND RELEASING CLAIMS (this “Agreement”) is made by and
between the following parties:  (1) (a) SOURCECORP, Incorporated (“Sourcecorp”);
(b) Image Entry Acquisition Corp. (“IEAC”); and (c) Image Entry, Inc., Image
Entry of Owsley County Inc., Image Entry of Indianapolis Inc., Image Entry
Federal Systems Inc., Image Entry of Arkansas Inc., Image Entry of Alabama Inc.
(collectively the “IE Entities” and together with Sourcecorp and IEAC, the
“Sourcecorp Parties”), and (2) Bill D. Deaton, Judy A. Deaton, Christopher D.
Deaton, Lori Deaton-Orr, Jeremy M. Deaton, Christopher D. Deaton, as guardian
for Tara Deaton, a minor child, and Lucille Deaton Irrevocable Family GSTT
Trust, and Cynthia A. Deaton (collectively, the “Deatons”).  Also joining this Agreement are London
Rentals, LLC, East Properties, LLC, West Properties, LLC, South U.S. 25, LLC, Pear
Tree Farms, LLC, Cognitive Solutions, LLC, and Trinity Group, LLC (collectively,
the “Deaton Related Entities”), for the purposes of making certain
representations, covenants and conveyances, as are more particularly set forth
herein.  The Sourcecorp Parties, Deatons
and Deaton Related Entities are collectively referred to as the “Settling
Parties.”  This Agreement is entered as
of this 23rd day of September, 2005, with reference to the following facts:


 


RECITALS


 


A.  The Sourcecorp Parties have certain claims
against the Deatons relating to the Dispute (as defined herein).


 


B.  The Settling Parties recognize and
acknowledge the expense and length of time that would be involved in
prosecuting and defending the Dispute.


 


C.  The Settling Parties desire to avoid the
uncertainty, risk and expense attendant upon further pursuing the Dispute and
wish to fully and finally settle the Dispute in the manner and upon the terms
and conditions set forth in this Agreement.


 


D.  The Deaton Related Entities have each
determined that it is in the best interest of their respective entities to join
this Agreement and make the representations, covenants and conveyances
contemplated herein.


 


NOW, THEREFORE, the Settling Parties agree
as follows:


 


1.                                       Payment by the Deatons. 
As soon as practicable, but in any event no later than the respective
dates set forth below, the Deatons shall cause to be paid to Sourcecorp via
wire transfer into the Sourcecorp Account (as defined below), or in the case of
the Shares (as defined below) by assignment, the sum of $30 million (the
“Payment”):


 


(a)                                  $20 million cash paid on or before two (2) business days following
the execution of this Agreement or September 23, 2005, whichever is earlier;


 


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(b)                                 89,888 shares as reflected on Annex A to this Agreement (the
“Shares”) of the common stock, par value $0.01 per share, of Sourcecorp, which
Shares are hereby being transferred, assigned and conveyed to Sourcecorp
effective as of the date of this Agreement. 
For the purposes of this Agreement, the value of such Shares shall be
deemed to be the simple average closing price per share of such common stock as
reported on the NASDAQ Stock Market for the five (5) consecutive trading days
preceding (and not including) the date of the public disclosure of this
Agreement and the five (5) consecutive trading days after (and not including)
the date of the public disclosure of this Agreement.  The Deatons hereby authorize Sourcecorp to
cancel such shares as of the date of this Agreement and will deliver the
original stock certificates for such shares to Sourcecorp within two weeks (14
calendar days) of the date of this Agreement. 
In the event that one or more of the Deatons’ original stock
certificates cannot be found, the respective Deaton(s) will, before the two
weeks expires, submit to the appropriate entity complete and effective
request(s) for expedited replacement of the stock certificate(s) at the
Deatons’ sole expense, and within two (2) business days of the Deatons’ receipt
of the replacement stock certificates, will deliver the replacement stock
certificates via Fed Ex Priority Overnight (signature required) to Sourcecorp
c/o Sourcecorp’s General Counsel at the address contemplated by Section 20.


 


(c)                                  An amount in cash, representing the balance of such $30 million
(i.e. $30 million less the $20 million being paid pursuant to Section 1(a)
above, and the deemed value of the Shares being assigned pursuant to Section
1(b) above), shall be paid on or before 90 days following the date of this
Agreement.


 


Each
of the Deatons and the Deaton Related Entities jointly and severally represent
and warrant to the Sourcecorp Parties that (i) none of them is insolvent as of
the date of this Agreement nor will they be rendered insolvent as a result of
the Payment or the Pledges; (ii) the Shares are in the amounts and held in the
names set forth on Annex A; (iii) collectively, the Deatons have good and
marketable title to the Shares transferred thereby free and clear of any lien,
security interest, encumbrance, or adverse claim, and (iv) upon the transfer of
such Shares to Sourcecorp, Sourcecorp will obtain good and marketable title to
such Shares free and clear of any such lien, security interest, encumbrance, or
adverse claim.


 


2.                                       Security.  As security for the payments contemplated by
Section 1(c) above, the Deatons and Deaton Related Entities shall grant to
Sourcecorp a first priority lien, security interest, and mortgage (the
“Pledges”) in and to each of the properties (the “Properties”) listed on Annex
B.  Deatons and the Deaton Related
Entities hereby represent and warrant that (i) to the best of their knowledge,
the respective fair market value of each of the Properties are as specified on
such Annex (with the aggregate fair market value of the Properties being at
least $15 million), (ii) each of the Properties is owned in its entirety by one
or more of the Deatons or Deaton Related Entities, and (iii) the Properties are
not encumbered by any lien, mortgage, other security interest, encumbrance, or
adverse claim of any kind.  The Deatons
and Deaton Related Entities each hereby covenant that he, she, or it, as
applicable, shall neither create, nor allow the creation of any lien, mortgage,
encumbrance, security interest or adverse claim without the prior written
consent of Sourcecorp (which consent will, subject to the terms of the last
sentence of this Section 2, be given in connection with the securing of
financing for the payments contemplated by Section 1(c) of this Agreement, and
provided that the proceeds from any such financing be wired directly from the
financing escrow to the Sourcecorp Account). 
Concurrently with the


 


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execution of this Agreement, the Deatons and Deaton
Related Entities will deliver the fully executed Pledge documents, including
without limitation any necessary security agreement, UCC financing statements,
mortgages or deeds of trust, to Sourcecorp or its agent for filing or recording
in the appropriate public records, as applicable. The Deatons and the Deaton
Related Entities, recognizing that time is of the essence, hereby covenant to
take any and all further action as may be necessary or appropriate to grant,
effectuate and perfect the lien, security interest, and mortgages contemplated
by this Section without delay.  To the extent
that the Deatons or the Deaton Related Entities do not have good and marketable
title or if there are any liens, mortgages, encumbrances, security interests or
adverse claims as to any of the Properties, or other exceptions to title that
are unacceptable to Sourcecorp as determined by Sourcecorp in its sole
discretion, the Deatons or Deaton Related Entities, as applicable, will take
such action as necessary to cure the title defect(s) and remove the liens, mortgages,
encumbrances, security interests, adverse claims or other title exceptions, or
to substitute the unacceptable Propert(ies) with additional propert(ies) and
provide any corresponding representations and condition of title report(s) as
contemplated by this Section. The parties agree that at such time as payments
are made pursuant to Section 1(c), a proportional amount of such security shall
be released; provided, that Sourcecorp shall not be required to release any
Properties (or subsequently Pledged properties) to the extent that following such
release the then fair market value of the remaining unreleased Properties (and
subsequently Pledged properties) would fall below twice the amount of any
remaining amounts owed under Section 1(c); and further provided that to the
extent that the aggregate fair market value of the then unreleased Properties
(and subsequently Pledged properties) is reasonably determined by Sourcecorp in
its sole discretion to be less than twice the amount of any remaining amount
owed under Section 1(c), the Deatons and the Deaton Related Entities hereby
covenant to Pledge additional propert(ies) and provide corresponding
representations and condition of title report(s) as contemplated by this
Section to meet the fair market value requirement such that the aggregate
security provided is more than twice the amount of any remaining amount owed
under Section 1(c).


 


3.                                       Future Payments; Offset.  Until such time as the amounts set forth in
Section 1(c) are paid in full, the Sourcecorp Parties may offset against such
amounts any amounts otherwise that may in the future become directly or
indirectly owed to the Deatons by the Sourcecorp Parties.  The Deatons and Deaton Related Entities
hereby acknowledge and confirm that (i) the only go-forward payment obligations
owed by the Sourcecorp Parties to the Deatons or the Deaton Related Entities
are Future Tax Payments and Lease payments, described more fully below; and
(ii)  they have no claims for any past,
current or future payments under any Employment Agreement.


 


4.                                       Leases. 
Image Entry, Inc. is currently the tenant under 11 leases (each a
“Lease” and collectively the “Leases”) for which the Deatons are directly (or
indirectly through one or more of the Deaton Related Entities) the
landlords.  The parties hereby agree to
modify, and agree to cause the modification of, the Leases by (i) changing the
expiration date of such Leases to the applicable end date for each respective
Lease as set forth on Annex C of this Agreement;  (ii) providing that no maintenance or
improvements will be charged to tenant without the prior written consent of
tenant as to scope and cost, and, upon expiration of the term of each lease,
tenant’s sole obligation will be to deliver the premises to the landlord in
substantially the same state of condition and repair as existed on the date
Bill Deaton vacated the premises (being October 1, 2004), reasonable wear and
tear excepted; and (iii) providing that any


 


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provision in such Leases requiring the landlord’s
consent shall be amended to provide that the landlord may not unreasonably
withhold, condition or delay such consent (including without limitation such
that with such consent tenant may make additions or modifications to any of the
buildings that are the subject to the Leases at its own expense). The Deatons
and the Deaton Related Entities represent and warrant that the only known
monetary obligations of the IE Entities to the Deatons and the Deaton Related
Entities under the Leases as of the date of this Agreement are for lease
payments, which are current and paid in full through September 30, 2005, with
the understanding that the IE Entities have a continuing obligation to pay
utilities, pay real estate taxes, obtain insurance, etc. under, but subject to,
the terms of the Leases.


 


5.                                       D&O Insurance.  Deaton agrees not to directly or indirectly
seek advancement, reimbursement, indemnification or other coverage of any
expenses or legal fees under Sourcecorp’s D&O Insurance or in any manner
from any of the Sourcecorp Parties (including without limitation with respect
to advancement, reimbursement, indemnification, or other coverage, from any of
the Sourcecorp Parties, for any loss related to the subject of the Released
Claims).  Deaton further agrees to take,
if required, any actions necessary or appropriate to effectuate this Agreement
with the D&O Insurance carrier(s). 
Notwithstanding the foregoing, to the extent all claims that exist or
may arise and that might be covered by the D&O insurance against
Sourcecorp, the named defendants, and all other covered persons (other than
Deaton) are resolved, and their related expenses, legal fees, and losses, if
any, have been reimbursed or otherwise covered under such D&O Insurance
without exhausting such coverage, Deaton reserves the right to seek reimbursement
solely out of the remaining D&O Insurance, and not from any of the
Sourcecorp Parties, of any such expenses, legal fees, or loss.


 


6.                                       Insurance Carrier Agreement.  This Agreement is expressly contingent on the
parties receiving written consent to the terms of this Agreement from the
D&O Insurance carriers.


 


7.                                       Double Recovery.  It is the intent of the Settling Parties
that, through this Agreement, the Releasing Parties are fully and finally
releasing the Released Parties from the Released Claims such that, after
receiving all of the payments contemplated by Section 1 of this Agreement, the
Releasing Parties shall not have any further claim and agree that they will not
assert any further claim to additional monies, directly or indirectly, from the
Released Parties as a result of the Released Claims. If (1) a non-party to this Agreement brings
an action against a Released Party to secure contribution or indemnification
for a judgment against the non-party that is based in whole or in part on a
Released Claim, (2) a Released Party is held liable in that action for
contribution or indemnification, and (3) a portion of the recovery in that
action would be made to a Releasing Party for Released Claims, the Releasing
Party will take whatever steps are necessary to reflect that the portion of
such recovery that reflects Released Claims has been satisfied by this
Agreement.


 


8.                                       Noncompetition Agreement.  The Deatons acknowledge that the
Noncompetition Agreements remain in full force and effect through February 28,
2009 (or such later date, if any, pursuant to the terms of the applicable
Noncompetition Agreement) and that the releases covered by this Agreement do
not include a release from or waiver of their obligations thereunder.  The Deatons hereby represent and warrant that
the Deatons have not violated the terms of the Noncompetition Agreements in any
respect (with the Settling Parties acknowledging that Deaton


 


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has employed, with Sourcecorp’s consent, and may
continue to employ, Greg Chaffins, Bruce Chaffins, Bill Chaffins and Mike Dixon
to perform research and development relating to an optical character
recognition engine, as well as other projects which the Deatons hereby represent
are unrelated and are not substantially similar to the Sourcecorp Parties’
business).  Each of the Deatons
specifically represents and warrants that they have had no direct or indirect
involvement whether through providing information, leases, financial support,
customer opportunities, investment opportunities, contacts or otherwise, with
the business known as Information Capture Solutions LLC or any other current
data entry or imaging business.


 


9.                                       Quitclaim.  Upon receipt of all the funds contemplated by
Section 1 of this Agreement, Sourcecorp agrees to take such action as may be
necessary to convey its interest, if any, without representation or warranty of
any kind, in the property described in the Warranty Deed in Annex E.


 


10.                                 Forbearance by Sourcecorp. 
So long as all of the Payments are made by the dates contemplated by
Section 1 of this Agreement, the Sourcecorp Parties agree to forebear on filing
a demand for Arbitration or any other litigation against the Deatons arising
out of or related to the Dispute.


 


11.                                 Default. 
In the event that any amounts contemplated by Section 1 of this
Agreement are not paid by the dates so indicated, interest shall accrue on such
outstanding amounts at the rate of 18% per annum or the Maximum Lawful Rate,
whichever is less.  In the event of such
default, all promises, covenants, and releases herein granted by Sourcecorp
shall be null and void.  Sourcecorp
reserves all of its rights and remedies, both legal and equitable, to pursue
the Deatons’ failure to comply with the requirements of this Agreement, and may
sue for breach of this Agreement, pursue the Properties subject to the Pledges,
sue on the Released Claims, or seek any other remedies. However, if and only if
Sourcecorp receives the full amount of the Payments contemplated by Section 1
(a) and (b) by the dates contemplated therein and a perfected first lien
security interest in the Properties (assuming that Sourcecorp has accepted the
condition of title reports and fair market values) as contemplated by Section 2,
then any recovery Sourcecorp receives from the Deatons under any prosecution of
the Dispute shall be capped at the unpaid amount contemplated by Section 1 of
this Agreement, the interest contemplated by this Section, and reasonable
attorneys fees and costs.  If not, the Deatons’ liability will not be capped, but they will be
entitled to an offset for any funds or property transferred pursuant to this
Agreement.  There shall be no such limit on any claims
Sourcecorp pursues against third parties other than the Deatons.


 


12.                                 Defined Terms.


 


(a)                                  The term “Dispute” shall refer to
any and all disputes relating to earnout, holdback and other payments made in
connection with the Stock Purchase Agreement and related documents.


 


(b)         The term
“D&O Insurance” shall refer to the following policies along with any
predecessor or replacement policies:


 


i.                                          Fireman’s Fund policy CDO-000-7627-3721 (01/23/04 - 01/23/05); XL
policy ELU085338-04 (01/23/04 - 01/23/05); and


 


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ii.                                       Fireman’s Fund policy CDO-000-7667-7905 (01/23/05 - 01/23/06); XL
excess policy ELU087972-05 (01/23/05 - 01/23/06); XL Side A policy ELU087971-05
(01/23/05 - 01/23/06).


 


(c)                                  The term “Employment Agreements” shall refer to:


 


i.                                          Employment Agreement, dated as of March 31, 2001, by and among Image
Entry Acquisition Corp., Sourcecorp, Incorporated, and Bill Deaton (the
“Original Bill Deaton Employment Agreement”);


 


ii.                                       Employment Agreement, dated as of March 31, 2001, by and among Image
Entry Acquisition Corp., Sourcecorp, Incorporated, and Christopher D. Deaton
(the “Chris Deaton Employment Agreement”); and


 


iii.                                    Employment Agreement, dated as of March 1, 2004, by and among Image
Entry Acquisition Corp., Sourcecorp, Incorporated, and Bill Deaton (the
“Subsequent Bill Deaton Employment Agreement”).


 


(d)                                 The term “Future Tax Payments” shall mean the payments for tax
credits contemplated by Section (d) of Schedule 1.1 of the Stock Purchase
Agreement for periods commencing with the year ending December 31, 2005 and ending
no later than March 2011.


 


(e)                                  The term “Maximum Lawful Rate” shall mean the maximum legal
rate permitted under Texas law (or if another state or federal law is
deemed controlling on the issue, such other maximum legal rate, if lower) with
respect to commercial transactions.  It is the intention of the
Sourcecorp Parties, the Deatons and the Deaton Related Entities to conform
strictly to all applicable usury laws now or hereafter in force, and any
interest payable under this Agreement will be subject to reduction to the
amount not in excess of the maximum legal amount allowed under the
applicable laws as now or hereafter construed by the courts having
jurisdiction over such matters. The aggregate of all interest (whether
designated as interest, service charges, points or otherwise) contracted for,
chargeable or receivable under this Agreement will under no circumstances
exceed such maximum lawful rate. If such interest does exceed the maximum
lawful rate, it will be deemed a mistake and such excess will be canceled
automatically and, if theretofore paid, rebated by the payee to the payor.


 


(f)                                    The term “Noncompetition Agreements” shall refer to:


 


i.                                          Noncompetition Agreement entered into on March 31, 2001 by and among
Image Entry Acquisition Corp. and Bill D. Deaton;


 


ii.                                       Noncompetition Agreement entered into on March 31, 2001 by and among
Image Entry Acquisition Corp. and Christopher D. Deaton;


 


iii.                                    Noncompetition Agreement entered into on March 31, 2001 by and among
Image Entry Acquisition Corp. and Judy A. Deaton;


 


iv.                                   Noncompetition Agreement entered into on March 31, 2001 by and among
Image Entry Acquisition Corp. and Jeremy M. Deaton; and


 


v.                                      Noncompetition Agreement entered into on March 31, 2001 by and among
Image Entry Acquisition Corp. and Lori Deaton-Orr.


 


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(g)                                 The “Pledges” shall have the meaning set forth in Section 2 of this
Agreement.


 


(h)                                 The term “Released Parties” shall
refer to the Deatons and the Deaton Related Entities, and all of their respective
heirs and their current and former spouses, marital communities, executors,
administrators, estates, successors and assigns, provided however, that
the Released Parties shall not include Third Parties G. Edward Henry II, Henry Watz Gardner Sellars & Gardner, PLLC, Michael Sulfridge, Cheryl Hubbard,
Susan Cassidy, Jack Cloyd, or Cloyd & Associates.


 


(i)                                     The term “Third Parties” shall refer to G. Edward Henry II, Henry
Watz Gardner Sellars & Gardner, PLLC, Michael Sulfridge, Cheryl Hubbard, Susan
Cassidy, Jack Cloyd, and Cloyd & Associates.


 


(j)                                     The term “Releasing Parties” shall
refer to the Sourcecorp Parties and all of their past and present parent
companies, subsidiaries, related entities, divisions, predecessors, successors,
and assigns.


 


(k)                                  The term “Released Claims” shall
refer to any and all claims, actions, causes of action, demands, damages,
attorneys’ fees, costs, contracts, rights, debts, accounts, or liabilities,
known or unknown, direct or indirect, that the Releasing Parties and the Released Parties may have against each other,
individually or collectively, arising out of or based upon:  the relationship between the Sourcecorp
Parties and the Deatons; the Dispute; the transactions, events, occurrences,
acts, omissions or failures to act set forth in, arising out of, or pertaining
in any way to the Stock Purchase Agreement or Employment Agreements, including
all Earnout, Share Release and Holdback payments specified in Schedule 1.1 of
the Stock Purchase Agreement, or financial disclosures related to these
matters, or any actions, inactions, statements, omissions or conduct in
connection with an internal investigation and subsequent financial statement
Restatement and ensuing governmental investigations relating to the Earnout,
Share Release and Holdback payments specified in Schedule 1.1 of the Stock
Purchase Agreement, but specifically excluding any obligations under the
Noncompetition Agreements, the Leases (amended as contemplated by this
Agreement), the Future Tax Payments, or this Agreement.


 


(l)                                     The term “Sourcecorp Account” shall mean the account identified by
the following wiring instructions:


 


	
  Bank Name:

  	
   

  	
  Bank of
  America

  
	
   

  	
   

  	
   

  
	
  Account
  Name:

  	
   

  	
  SOURCECORP,
  Incorporated

  
	
   

  	
   

  	
   

  
	
  Account
  Number:

  	
   

  	
  004770650126

  
	
   

  	
   

  	
   

  
	
  ABA#:

  	
   

  	
  111000025

  



 


(m)                               The term “Stock Purchase Agreement” shall refer to that Stock
Purchase Agreement dated effective March 1, 2001, by and between the Sourcecorp
Parties and the Deatons, pursuant to which IEAC acquired the stock of each of
the IE Entities.


 


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13.                                 Releases. 
In consideration of the foregoing Payment and other considerations set
forth in this Agreement, in accordance with the terms hereof, the Released Parties and the Releasing
Parties hereby agree to release each
other, individually and collectively, of all the Released Claims, and
further agree that his, her, or its release shall operate forever and finally
to extinguish the Released Claims; provided that these releases shall be
effective, without any further action by the Sourcecorp Parties, immediately
upon, but not prior to, Sourcecorp’s receipt of the full Payment, including the
payment contemplated by Section 1(c).  In
addition, each of the Released Parties
agrees to release the Releasing Parties’ respective officers, directors,
employees, attorneys, accountants, advisors, representatives, parent companies,
subsidiaries, affiliates, predecessors and successors, of all of the Released
Claims.


 


14.                                 Resolution of All Claims. 
This Agreement is intended to resolve to the fullest extent possible all
Released Claims to the extent and at such times as contemplated by this
Agreement.  To that end, each of the
Releasing Parties and Released Parties represents and warrants that all of his,
her, or its Released Claims belong to him, her, or it, and to no other person,
that no right, title, or interest to or in any of said claims or causes of
action has been assigned, sold, pledged, or otherwise transferred to any third
party (other than any Releasing Party), whether by written or oral agreement or
by operation of law or otherwise, and that there are no liens relating to any
Released Claim, including any lien for attorneys’ fees, that will not be fully
satisfied and discharged as a result of this Agreement.  The Sourcecorp Parties and the Deatons
mutually confirm and agree that they have no remaining claims for commissions
or payments of any kind under the Employment Agreements, that the terms of Bill
Deaton’s and Christopher Deaton’s Employment Agreements dated March 31, 2001 have
expired, and that Bill Deaton’s March 1, 2004 Employment Agreement has been
terminated pursuant to Section 4 thereunder. 
The Deatons and Deaton Related Entities further agree that they have no
direct or indirect claims against the Sourcecorp Parties due to Trinity Group
LLC’s (or any of the Deatons, the Deaton Related Entities or any other entity
directly or indirectly owned or controlled by one or more of the Deatons)
payment of any expenses of any of the Sourcecorp Parties, and will not
recommend or take any action that would permit or encourage any vendor to
pursue any of the Sourcecorp Parties for any such claims.  Each of the Releasing Parties and Released
Parties further represents and warrants that the individual executing this
Agreement on his, her or its behalf has legal authority to do so, to release
their respective Released Claims, and to bind their respective Releasing
Parties and Released Parties.  Each of
the Released Parties and the Releasing Parties further agrees he, she or it has
no claim(s) and in the future will not assert any claim(s) of any kind related
to: (1) the Order Resources sign purchased by Sourcecorp; (2) microfilm lab
rental; and (3) for a tractor purchased by Bill Deaton from Sourcecorp.


 


15.                                 General Releases. 
Each of the Releasing Parties and the Released Parties also hereby
waives and relinquishes all rights and benefits that it, he, or she had or may
have under any statutory or common law that limits the effect of a general
release to claims known or suspected by the releasing party, including any
claim that this Agreement or any document incorporated by reference or any of
the releases herein was induced by any misrepresentation or nondisclosure and
any right to rescind or avoid this Agreement or the releases contained herein
based upon presently existing facts, known or unknown.  Each of the Releasing Parties and the
Released Parties acknowledges that it, he, or she may hereafter discover facts
different from or in addition to those it, he, or she now knows or believes to
be true in respect to the Released Claims, and hereby agrees that the releases
described above shall be and remain in effect in all


 


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respects as a complete, general release as to the
matters released, notwithstanding any such different or additional facts.


 


16.                                 Limited Release of Third Parties.
Concurrently with the Receipt of final Payment as set forth above (together
with any amounts contemplated by Section 11), the Releasing Parties agree to
execute a Limited Mutual Release with respect to Third Parties G. Edward Henry
II, Henry Watz Gardner Sellars & Gardner, PLLC, Michael Sulfridge, Cheryl
Hubbard, Susan Cassidy, Jack Cloyd, and Cloyd & Associates in the form set forth as Annex D.


 


17.                                 Agreement May Be Pleaded As
Defense.  This Agreement may be pleaded as a full and
complete defense by any of the Settling Parties to any action, suit, or other
proceeding that may be instituted, prosecuted or attempted for, upon or in
respect of any of the Released Claims released hereby.  The Settling Parties agree that any such
proceeding would cause irreparable injury to the party against whom it is
brought and that any court of competent jurisdiction may enter an injunction
restraining prosecution thereof.


 


18.                                 No Admission of Wrongdoing. 
Nothing in this Agreement or any term or provision herein is or may be
deemed, construed or used, in any civil, criminal or administrative proceeding
in any court, administrative agency, or other tribunal, as an admission of
wrongdoing of any of the Settling Parties or Released Parties hereto.


 


19.                                 Non-Disparagement. Each of the Settling
Parties hereto agrees not to make disparaging remarks about the other Settling
Parties or their
respective officers, directors, employees, insurers, attorneys, accountants,
advisors, representatives, parent companies, subsidiaries, affiliates,
predecessors and successors, or their actions, inactions, statements, omissions
or conduct related to the subject of the Released Claims or this Agreement. This Section shall not apply to any legally required public
disclosures by Sourcecorp, any remarks, disclosures or testimony by any person
or the Sourcecorp Parties or the Sourcecorp Parties’ officers, directors,
employees, agents, attorneys or accountants to any governmental agencies
investigating these matters, to any governmental regulatory agencies, in any
civil or criminal proceedings regarding these matters, or by the Sourcecorp Parties or their
officers, directors, employees, agents, attorneys or accountants in remediation discussions with customers whose contracts were
involved in Sourcecorp’s financial statement restatement.


 


20.                                 Notices. 
All notices required or permitted to be given hereunder shall be in
writing and may be delivered by hand, by facsimile, by nationally recognized
private courier, or by United States mail. 
Notices delivered by mail shall be deemed given three (3) business days
after being deposited in the United States mail, postage prepaid, registered or
certified mail.  Notices delivered by
hand, by facsimile, or by nationally recognized private carrier shall be deemed
given on the first business day following receipt; provided, however, that a
notice delivered by facsimile shall only be effective if such notice is also
delivered by hand, or deposited in the United States mail, postage prepaid,
registered or certified mail, on or before two (2) business days following its
delivery by facsimile.  All notices shall
be addressed as follows: (1) if to the Sourcecorp Parties, addressed to Sourcecorp,
Attn:  General Counsel, 3232 McKinney
Avenue, Suite 1000, Dallas, TX 75204, Facsimile (214) 740-6589, with a copy to
Francis J. Burke, Jr., Steptoe & Johnson LLP, 201 E. Washington Street,
Suite 1600, Phoenix, Arizona 85004, Facsimile (602) 257-5299; and (2) if
to the Deatons or any Deaton Related


 


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Entity, addressed to Charles E. Davidow, Wilmer,
Cutler, Pickering, Hale & Dorr LLP, 2445 M Street NW, Washington DC, 20037,
Facsimile (202) 663-6363; and/or (3) to such other respective addresses and/or
addressees as may be designated by notice given in accordance with the
provisions of this Paragraph.


 


21.                                 Entire Agreement; Authorship;
Amendments.  This Agreement, together with any exhibits,
sets forth the entire understanding of the Settling Parties in connection with
the subject matter hereof, and is intended to supercede all previous oral
agreements concerning settlement.  None
of the Settling Parties has made any statement, representation, or warranty in
connection herewith, except as expressly set forth herein, which has been
relied upon by any of the other Settling Parties hereto or which acted as an
inducement for the other Settling Parties to enter into this Agreement; and
each of the Settling Parties agrees it is not in fact relying upon any such
statements, representations, or warranties, or any other expectations,
understandings or agreements other than those expressly set forth or
incorporated by reference in this Agreement. 
This Agreement shall be deemed to have been mutually prepared by the
Settling Parties, and shall not be construed against any of them by reason of
authorship.  This Agreement and the
releases contained herein may be amended or modified only by a written
agreement executed by or on behalf of all the Settling Parties hereto that
unequivocally indicates the Settling Parties’ intention to modify this
Agreement.  No waiver of any breach of
this Agreement or the releases contained herein shall be construed as an
implied amendment or agreement to amend or modify any provision of this
Agreement.


 


22.                                 Assignments, Predecessors,
Successors and Assigns.  The terms of this Agreement
shall inure to the benefit of, and be binding upon, the Deatons, the Deaton
Related Entities, Settling Parties and their respective successors or assigns,
except it shall not inure to the benefit of or be binding upon Third Parties G.
Edward Henry II, Henry Watz Gardner Sellars &
Gardner, PLLC Michael
Sulfridge, Cheryl Hubbard, Susan Cassidy, Jack Cloyd, or Cloyd &
Associates, .


 


23.                                 Severability. 
Should any clause, sentence, provision, paragraph or part of this
Agreement or its Annexes for any reason whatsoever be declared or determined
finally by any court of competent jurisdiction, or by any other competent
governmental authority having jurisdiction, to be illegal or invalid or
unenforceable, the validity of the remaining parts, terms, or provisions shall
not be affected, impaired or invalidated thereby, and such determination of
illegality, invalidity or unenforceability shall be confined in its operation
to the specific clause, sentence, provision, paragraph or part of this
Agreement directly involved.  Such
illegal or invalid part, term, or provision shall be deemed not to be a part of
this Agreement and its Annexes, and the remainder of the Agreement and Annexes,
wherever practicable, shall remain in full force and effect.


 


24.                                 Construction. 
The Sourcecorp Parties, the Deatons, and the Deaton Related Entities
each acknowledges to the other that each understands the final and permanent
effect of this instrument.  Each Settling
Party hereto has made its own investigation of the facts and has consulted with
whatever consultants, attorneys or other advisors each deems is appropriate in
connection with the effect of this Agreement, is relying solely upon such
advice and its own knowledge, and assumes the risk arising from not seeking
further additional consultation with such advisors.  The Settling Parties hereto further
acknowledge that they have had input into the


 


10





















 


drafting of this Agreement and that, accordingly, in
any construction to be made of this Agreement, it shall not be construed for or
against any party, but rather shall be given a fair and reasonable
interpretation, based on the plain language of the Agreement and the expressed
intent of the parties.


 


25.                                 Jurisdiction. 
This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas. 
The Settling
Parties hereby consent to the jurisdiction of the 116th
District Court for Dallas County, for the resolution of any and all claims and disputes arising out of
the subject matter of this Agreement.


 


26.                                 Survival
of Representations and Warranties. Each of
the Settling Parties agrees and stipulates that it is relying upon the
representations and warranties and covenants set forth herein in entering into
this Agreement, and that these representations and warranties and covenants
shall survive the execution of this Agreement.


 


27.                                 Authority. 
Each of the Settling Parties represents and warrants that it, she, or he
has full authority and power to enter into, execute, deliver and perform this
Agreement and to bind its, her, or his respective Settling Parties, and that
the person signing below on behalf of each such Settling Party is authorized to
do so.  The Deaton Related Entities will
deliver appropriate authorizing documents contemporaneously with their
execution of this Agreement. The Settling Parties further agree that, upon the
occurrence of the conditions to effectiveness contained herein, this Agreement
will constitute a legal, valid and binding obligation, enforceable in
accordance with its terms.


 


28.                                 Execution.  This Agreement may be executed in one or more
counterparts, and as so executed shall constitute an Agreement binding on all
the Settling Parties, notwithstanding that all parties are not signatories to
the original or the same counterpart. 
The Settling Parties agree that a signature sent by facsimile to counsel
for the Settling Parties shall have the same force and effect as an original
signature.


 


29.                                 Inadmissibility.  If this Agreement does not become effective
for any reason, it shall be deemed negotiation for settlement purposes only and
will not be admissible in evidence or usable for any purpose whatsoever.


 


30.                                 Breach of This Agreement.  The parties hereto agree that the damages
suffered by any persons, firms, corporations or other entities protected by
this Agreement by reason of any breach of any provision of this Agreement shall
include not only the amount of any judgment that may be rendered against such
said persons, firms, corporations or other entities, or any of them, by reason
of a breach of this Agreement, (including without limitation under the provisions
of Section 11) but shall also include all damages suffered by them, including
the costs, attorneys’ fees and other costs and expenses of instituting,
preparing, prosecuting or defending any action or suit resulting from a breach
of this Agreement, whether taxable or otherwise, and the cost to them of
attorneys’ fees, and all other costs and expenses of instituting, preparing, or
prosecuting any counterclaim, suit, motion or action to recover damages
resulting from the breach of this Agreement, whether taxable or otherwise.


 


11





















 


31.                                 Mistake. 
Each party to this Agreement assumes the risk of any mistake of fact or
law with regard to any aspect of this Agreement, the Dispute described herein,
or any asserted rights released by this Agreement.


 


32.                                 Further Cooperation. 
The parties agree to use their best efforts in facilitating the process
of drafting and executing such further documentation necessary or appropriate
to ensure the timely and complete performance of this Agreement.


 


	
  DATED: September 23, 2005.

  	
  SOURCECORP INCORPORATED

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ed H. Bowman, Jr.

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  President & CEO

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005.

  	
  IMAGE ENTRY ACQUISITION
  CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry L. Edwards

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005.

  	
  IMAGE ENTRY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry L. Edwards

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005.

  	
  IMAGE ENTRY OF OWSLEY COUNTY INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry L. Edwards

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005.

  	
  IMAGE ENTRY OF INDIANAPOLIS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry L. Edwards

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005.

  	
  IMAGE ENTRY FEDERAL SYSTEMS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry L. Edwards

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice President

  	
   

  
						



 


12





















 


	
  DATED: September 23, 2005.

  	
  IMAGE ENTRY OF ARKANSAS
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry L. Edwards

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005.

  	
  IMAGE ENTRY OF ALABAMA
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry L. Edwards

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  By:

  	
  /s/ Bill D. Deaton

  	
   

  
	
   

  	
   

  	
  Bill D. Deaton

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  By:

  	
  /s/ Judy A. Deaton

  	
   

  
	
   

  	
   

  	
  Judy A. Deaton

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  By:

  	
  /s/ Christopher D. Deaton

  	
   

  
	
   

  	
   

  	
  Christopher D. Deaton

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  By:

  	
  /s/ Lori Deaton-Orr

  	
   

  
	
   

  	
   

  	
  Lori Deaton-Orr

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  By:

  	
  /s/ Jeremy M. Deaton

  	
   

  
	
   

  	
   

  	
  Jeremy M. Deaton

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  By:

  	
  /s/ Cynthia A. Deaton

  	
   

  
	
   

  	
   

  	
  Cynthia A. Deaton

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  By:

  	
  /s/ Christopher Deaton for Tara Deaton

  	
   

  
	
   

  	
   

  	
  Christopher D. Deaton, as guardian for Tara

  Deaton, a minor child

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  Lucille Deaton Irrevocable Family GSTT Trust

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill D. Deaton

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Member

  	
   

  
						



 


13





















 


	
  DATED: September 23, 2005

  	
  London Rentals, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill D. Deaton

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Member

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  East Properties, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill D. Deaton

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Member

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  West Properties, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill D. Deaton

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Member

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  Trinity Group, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill D. Deaton

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Member

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  South US 25, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill D. Deaton

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Member

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  Pear Tree Farms, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill D. Deaton

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Member

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  Cognitive Solutions, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill D. Deaton

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  Member

  	
   

  



 


14





















 


	
  APPROVED AS TO FORM:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  STEPTOE & JOHNSON LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stacey F. Gottlieb for

  	
   

  
	
   

  	
   

  	
  Francis J. Burke, Jr.

  	
   

  
	
   

  	
   

  	
  Attorneys for the Sourcecorp Parties

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED: September 23, 2005

  	
  WILMER, CUTLER, PICKERING,
  HALE &

  DORR LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles E. Davidow

  	
   

  
	
   

  	
   

  	
  Charles E. Davidow

  	
   

  
	
   

  	
   

  	
  Attorneys for the Deatons

  	
   

  



 


15





















 


Annex A


 





















 


Deaton Stock


 


	
  Holder

  	
   

  	
  Certificate No.

  	
   

  	
  No. of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bill D. Deaton

  	
   

  	
  C1832

  	
   

  	
  15,334

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Christopher D. Deaton

  	
   

  	
  C1834

  	
   

  	
  5,505

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Christopher
  D. Deaton as Custodian for Tara Deaton, Minor Child Under the Uniform
  Transfers to Minors Act of Kentucky

  	
   

  	
  C1873

  	
   

  	
  607

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jeremy M. Deaton

  	
   

  	
  C1835

  	
   

  	
  5,505

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Judy A. Deaton

  	
   

  	
  C1833

  	
   

  	
  14,092

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lori Deaton

  	
   

  	
  C1836

  	
   

  	
  5,505

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lucille Deaton Irrevocable Family GSTT Trust

  	
   

  	
  C1837

  	
   

  	
  43,340

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Shares Held

  	
   

  	
   

  	
   

  	
  89,888

  	
   

  



 





















 


Annex B – Pledged
Properties


 


	
  Property

  Type

  	
   

  	
  Address

  	
   

  	
  City

  	
   

  	
  County

  	
   

  	
  State

  	
   

  	
  Owner

  	
   

  	
  Deaton

  Represented

  Value*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial

  	
   

  	
  465 Industrial Boulevard

  	
   

  	
  London

  	
   

  	
  Laurel

  	
   

  	
  KY

  	
   

  	
  London Rentals, LLC

  	
   

  	
  $

  	
  3,200,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Residential

  	
   

  	
  484 Woods Edge

  	
   

  	
  London

  	
   

  	
  Laurel

  	
   

  	
  KY

  	
   

  	
  Bill D. Deaton and Judy A.
  Deaton

  	
   

  	
  $

  	
  1,200,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Residential

  	
   

  	
  203 Chinook Drive

  	
   

  	
  London

  	
   

  	
  Laurel

  	
   

  	
  KY

  	
   

  	
  Christopher D. Deaton and
  Cynthia A. Deaton

  	
   

  	
  $

  	
  249,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Residential

  	
   

  	
  Roots Branch (470 Acres)

  	
   

  	
  Manchester

  	
   

  	
  Clay

  	
   

  	
  KY

  	
   

  	
  Bill D. Deaton and Judy A.
  Deaton

  	
   

  	
  $

  	
  940,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Residential

  	
   

  	
  Feltner Farm, 265 Bert
  Feltner Road

  	
   

  	
  London

  	
   

  	
  Laurel

  	
   

  	
  KY

  	
   

  	
  Bill D. Deaton

  	
   

  	
  $

  	
  750,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Residential

  	
   

  	
  Highway 192 (54 Acres)

  	
   

  	
  London

  	
   

  	
  Laurel

  	
   

  	
  KY

  	
   

  	
  Bill D. Deaton and Judy
  Deaton

  	
   

  	
  $

  	
  540,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Residential

  	
   

  	
  Highway 192 (51 Acres)
  (Maple Grove Road)

  	
   

  	
  London

  	
   

  	
  Laurel

  	
   

  	
  KY

  	
   

  	
  Billy D. Deaton and Judy A.
  Deaton

  	
   

  	
  $

  	
  510,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial

  	
   

  	
  U.S. Highway 25 South

  	
   

  	
  London

  	
   

  	
  Laurel

  	
   

  	
  KY

  	
   

  	
  South US 25, LLC

  	
   

  	
  $

  	
  3,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial

  	
   

  	
  U.S. Highway 25 South

  	
   

  	
  London

  	
   

  	
  Laurel

  	
   

  	
  KY

  	
   

  	
  Billy D. Deaton and Judy A.
  Deaton

  	
   

  	
  $

  	
  370,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial

  	
   

  	
  Route 1, Box 1000

  Muddy Gap Road

  	
   

  	
  Manchester

  	
   

  	
  Clay

  	
   

  	
  KY

  	
   

  	
  Bill D. Deaton

  	
   

  	
  $

  	
  570,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial

  	
   

  	
  Industrial Park

  555 Roark Road

  	
   

  	
  Annville

  	
   

  	
  Jackson

  	
   

  	
  KY

  	
   

  	
  Bill D. Deaton and Judy A.
  Deaton

  	
   

  	
  $

  	
  434,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial

  	
   

  	
  Lone Oak Industrial Park
  Route 2 Box 710

  	
   

  	
  Booneville

  	
   

  	
  Owsley

  	
   

  	
  KY

  	
   

  	
  Billy D. Deaton and Judy A.
  Deaton

  	
   

  	
  $

  	
  784,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial

  	
   

  	
  24770 Highway 421

  	
   

  	
  Hyden

  	
   

  	
  Leslie

  	
   

  	
  KY

  	
   

  	
  East Properties, LLC

  	
   

  	
  $

  	
  510,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial

  	
   

  	
  715 N. Main Street

  	
   

  	
  London

  	
   

  	
  Laurel

  	
   

  	
  KY

  	
   

  	
  London Rentals, LLC

  	
   

  	
  $

  	
  2,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  15,057,000.00

  	
   

  



 










*Values
have not been adopted or verified by Sourcecorp


 





















 


Annex C - Leased Properties


 


	
  Lessor

  	
   

  	
  Location

  	
   

  	
  Apx.
  Sq. Ft.

  	
   

  	
  Beg

  	
   

  	
  Amended

  End

  	
   

  	
  Mo.
  Rent

  as of 9/23/2005

  	
   

  	
  Per Ft. (per Annum)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  London Rentals, LLC

  	
   

  	
  Laurel I, 715 N. Main St., London, KY

  	
   

  	
  14,572

  	
   

  	
  3/1/2001

  	
   

  	
  2/28/2009

  	
   

  	
  11,427

  	
   

  	
  9.41

  	
   

  
	
  London Rentals, LLC

  	
   

  	
  Laurel II, 715 N. Main St., London, KY

  	
   

  	
  4,928

  	
   

  	
  3/1/2001

  	
   

  	
  2/28/2009

  	
   

  	
  3,057

  	
   

  	
  7.44

  	
   

  
	
  London Rentals, LLC

  	
   

  	
  Laurel IV, 465 Industrial Blvd., London, KY - whse

  	
   

  	
  29,000

  	
   

  	
  3/1/2001

  	
   

  	
  12/31/2005

  	
   

  	
  16,378

  	
   

  	
  6.78

  	
   

  
	
  London Rentals, LLC

  	
   

  	
  Laurel III, 465 Industrial Blvd., London, KY - office

  	
   

  	
  18,000

  	
   

  	
  3/1/2001

  	
   

  	
  12/31/2005

  	
   

  	
  12,823

  	
   

  	
  8.55

  	
   

  
	
  East Properties, LLC

  	
   

  	
  Route 1, Muddy Gap Rd, Manchester, KY

  	
   

  	
  8,150

  	
   

  	
  3/1/2001

  	
   

  	
  2/28/2009

  	
   

  	
  7,233

  	
   

  	
  10.65

  	
   

  
	
  West Properties, LLC

  	
   

  	
  Rockcastle Industrial Park, Mt Vernon, KY

  	
   

  	
  8,200

  	
   

  	
  3/1/2001

  	
   

  	
  2/28/2009

  	
   

  	
  6,506

  	
   

  	
  9.52

  	
   

  
	
  East Properties, LLC

  	
   

  	
  McKee Industrial Park, 555 Roark Rd, Annville, KY

  	
   

  	
  6,200

  	
   

  	
  3/1/2001

  	
   

  	
  2/28/2009

  	
   

  	
  2,704

  	
   

  	
  5.23

  	
   

  
	
  West Properties, LLC

  	
   

  	
  RR 4 Box 3545, Monticello, KY

  	
   

  	
  9,300

  	
   

  	
  3/1/2001

  	
   

  	
  2/28/2009

  	
   

  	
  8,299

  	
   

  	
  10.71

  	
   

  
	
  East Properties, LLC

  	
   

  	
  Lone Oak Industrial Park, Booneville, KY

  	
   

  	
  9,880

  	
   

  	
  3/1/2001

  	
   

  	
  2/28/2009

  	
   

  	
  8,415

  	
   

  	
  10.22

  	
   

  
	
  East Properties, LLC

  	
   

  	
  24770 Highway 421, Hyden, KY

  	
   

  	
  7,240

  	
   

  	
  9/1/2003

  	
   

  	
  12/31/2005

  	
   

  	
  6,033

  	
   

  	
  10.00

  	
   

  
	
  East Properties, LLC

  	
   

  	
  1094 Childs Branch, Jenkins, KY

  	
   

  	
  7,240

  	
   

  	
  8/1/2002

  	
   

  	
  12/31/2005

  	
   

  	
  7,542

  	
   

  	
  12.50

  	
   

  



 





















 


ANNEX D


 


LIMITED MUTUAL RELEASE


 


THIS MUTUAL RELEASE is made by and between
the following parties:  (1) (a) SOURCECORP, Incorporated (“Sourcecorp”);
(b) Image Entry Acquisition Corp. (“IEAC”); and (c) Image Entry, Inc., Image
Entry of Owsley County Inc., Image Entry of Indianapolis Inc., Image Entry
Federal Systems Inc., Image Entry of Arkansas Inc., Image Entry of Alabama Inc.
(collectively the “IE Entities” and together with Sourcecorp and IEAC, the “Sourcecorp
Parties”), and (2) G. Edward Henry II, Henry Watz Gardner Sellars &
Gardner, PLLC.,
Cheryl Hubbard, Michael Sulfridge, Susan Cassidy, Jack
Cloyd, and Cloyd
& Associates (the “Third Parties”).  This Mutual Release shall become effective
only when signed and dated by each of the parties hereto.


 


1.     The term the “Releasing Parties” shall mean (i) the Sourcecorp
Parties, and all of their past and present parent companies, subsidiaries,
related entities, divisions, predecessors, successors, and assigns and (ii) the
Third Parties along with their heirs, spouses, executors, administrators,
estates, successors and assigns of any such persons.


 


2.     The term “Person” means an individual, corporation, partnership,
limited partnership, association, joint stock company, estate, legal
representative, trust, unincorporated association, government, political
subdivision or agency thereof, and any business or legal entity and their
spouses, heirs, predecessors, successors, representative, or assignees.


 


3.     The term “Released Claims” shall refer to any and all claims,
actions, causes of action, demands, damages, attorneys’ fees, costs, contracts,
rights, debts, accounts, or liabilities, known or unknown, direct or indirect,
that the Releasing Parties may have against each other, arising out of or based
upon:  the relationship between the
Sourcecorp Parties and the Third Parties; the transactions, events, occurrences,
acts, omissions or failures to act set forth in, arising out of, or pertaining
in any way to the Stock Purchase Agreement, including all Earnout, Share
Release and Holdback payments specified in Schedule 1.1 of the Stock Purchase
Agreement, as well as any actions, inactions, statements, omissions or conduct
in connection with the Sourcecorp Parties’ internal investigation and
subsequent financial statement restatement and any ensuing governmental
investigations relating to the Earnout, Share Release and Holdback payments
specified in Schedule 1.1 of the Stock Purchase Agreement.


 


4.     The term “Stock
Purchase Agreement” shall refer to that Stock Purchase Agreement dated
effective March 31, 2001, by and between the Sourcecorp Parties and Bill D. Deaton, Judy A. Deaton,
Christopher D. Deaton, Lori Deaton-Orr, Jeremy M. Deaton, Christopher D.
Deaton, as guardian for Tara Deaton, a minor child, and Lucille Deaton
Irrevocable Family GSTT Trust (collectively, the “Deatons”).


 


5.     The Sourcecorp Parties hereby release the Third Parties, along
with their heirs, spouses, executors, administrators, estates, successors and
assigns of any such persons, of all the Released Claims, and agree that such
release shall operate forever and finally to extinguish the Released Claims;
provided, that this release will not become effective in favor of a Third Party
unless and until that Third Party has also entered this Mutual Release.


 





















 


6.     Each of the Third Parties hereby releases the Sourcecorp
Parties, their respective officers, directors, employees, insurers, attorneys,
accountants, advisors, representatives, parent companies, subsidiaries,
affiliates, divisions, predecessors, successors, and assigns of any and all
Released Claims, and each Third Party agrees that such release shall operate
forever and finally to extinguish the Released Claims; provided, that this
release will not become effective in favor of a Sourcecorp Party unless and
until that Sourcecorp Party has also entered this Mutual Release.


 


7.     Each Releasing Party hereby mutually represents and warrants to
each other that they have not previously directly or indirectly assigned,
transferred, encumbered or purported to assign, transfer or encumber, whether
voluntarily, involuntarily, by operation of law or otherwise, to any Person any
interest in the Released Claims.


 


8.     Each Person signing this Mutual Release represents and warrants
that he or she has the requisite authority to bind the Releasing Party on whose
behalf he or she is signing and has been duly authorized and empowered to
execute this Mutual Release on behalf of that Releasing Party.


 


9.     This Mutual Release shall be binding upon and shall inure to the
benefit of the Releasing Parties and their respective successors, assigns and
legal representatives.


 


10.   This Mutual Release shall be governed by and construed and
enforced in accordance with the laws of the State of Texas.


 


11.   Execution.  This Mutual Release may be executed in one or
more counterparts, and as so executed shall be binding on all the Releasing
Parties, notwithstanding that all parties are not signatories to the original
or the same counterpart.  The Releasing
Parties agree that a signature sent by facsimile to counsel for the Releasing
Parties shall have the same force and effect as an original signature.


 


 


	
  DATED:  September
            , 2005.

  	
  SOURCECORP INCORPORATED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
  DATED:  September
            , 2005.

  	
  IMAGE ENTRY ACQUISITION
  CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
					



 


2





















 


	
  DATED:  September
            , 2005.

  	
  IMAGE ENTRY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   DATED:  September
            , 2005.

  	
  IMAGE ENTRY OF OWSLEY COUNTY INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
  DATED:  September
            , 2005.

  	
  IMAGE ENTRY OF INDIANAPOLIS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
  DATED:  September
            , 2005.

  	
  IMAGE ENTRY FEDERAL SYSTEMS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
  DATED:  September           ,
  2005.

  	
  IMAGE ENTRY OF ARKANSAS
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
  DATED:  September           ,
  2005.

  	
  IMAGE ENTRY OF ALABAMA
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
  DATED:  September           ,
  2005

  	
  By:

  	
   

  	
   

  
	
   

  	
  G. Edward Henry II

  
	
   

  	
   

  
	
  DATED:  September           ,
  2005

  	
  Henry Watz
  Gardner Sellars & Gardner, PLLC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
						



 


3





















 


	
  DATED:  September           ,
  2005

  	
  By:

  	
   

  	
   

  
	
   

  	
  Jack Cloyd

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED:  September           ,
  2005

  	
  Cloyd &
  Associates

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED:  September           ,
  2005

  	
  By:

  	
   

  	
   

  
	
   

  	
  Cheryl Hubbard

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED:  September           ,
  2005

  	
  By:

  	
   

  	
   

  
	
   

  	
  Michael Sulfridge

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED:  September           ,
  2005

  	
  By:

  	
   

  	
   

  
	
   

  	
  Susan Cassidy

  
						



 


4





















 


Annex E - Deed


 


WARRANTY DEED


 


THIS DEED, made and entered into this the 9th day of
September, 1998, by and between LONDON-LAUREL COUNTY INDUSTRIAL DEVELOPMENT
AUTHORITY, of 200 S. Main Street, Suite C, 1st National Bank Building, London,
Laurel County, Kentucky, Party of the First Part (Grantor), and IMAGE ENTRY,
INC., a Kentucky Corporation, of P. O. Box 1228, London, KY 40743-1228, Party
of the Second Part (Grantee).


 


WITNESSETH: That for and in consideration of the sum of NINETY-TWO
THOUSAND FIFTY-SIX DOLLARS ($92,056.00), all fully paid, the receipt and
sufficiency of which is hereby acknowledged, the said Party of the First Part
has bargained and sold and does hereby grant, sell and convey unto the Party of
the Second Part, its successors and assigns, forever, the following described
real estate situated in Laurel County, Kentucky, and more particularly
described as follows:


 


Being a certain tract or parcel of land in the London-Laurel County
Industrial Park lying approximately 3.8 miles west along Kentucky 80 from the
intersection of 80 and Interstate 75, more particularly described as follows:


 


(Unless otherwise stated, any monument referred to as an iron pin set
(IPS) is a 5/8” steel re-bar pin, 18” in length, with a yellow plastic cap
stamped “R.L.S. 1804”.)


 


Being all of lot 3 of the London-Laurel County Industrial Park:


 


Commencing at an iron pin set in the west right of way line of a
proposed Industrial access road, corner of lots 2, 3 thence leaving said west
line of road with the line of lots 2, 3 South 76 deg. 05’ 06” West, a distance
of 873.17 feet to a disk found in a rock, corner no. 1 of tract 1546 of the
Daniel Boone National Forest; thence South 32 deg. 24' 25" West, a
distance of 183.42 feet to a aluminum disk found corner no. 2 of tract 1546 of
the Daniel Boone National Forest; thence South 01 deg. 24’ 56” West, a distance
of 416.94 feet to an iron pin found (WLB 1804) corner no. 3, REFERENCE by a 14”
bearing tree (S 61 E, 19.00’) and a reference monument found


 


CUNNAGIN AND CUNNAGIN

Attorneys at Law

201 South Main Street

London, Kentucky

40741


 


5





















 


(S 1-51 W, 47.46’); thence with lots 3, 4 North 76 deg. 05’ 06” East, a
distance of 1156.49 feet to an iron pin set in the west line of said Industrial
road; thence with said road right of way for three calls: North 13 deg., 57’ 31”
West, a distance of 132.99 feet to an iron pin set at the BEGINNING of a curve
tangent to said line; thence northernly and northwesterly a distance of 374.80
feet along the curve concave to the west, having a radius of 1970.00 feet and a
central angle of 10 deg. 54’ 03” and a chord bearing and distance of N 19 24’
32” W, 374.24 feet to an iron pin set; thence North 24 deg. 51’ 33” West
tangent to said curve, a distance of 23.70 feet to the point of BEGINNING.
Containing 12.893 acres, more or less, by a survey conducted under the
direction of Walter L. Bowman R.L.S. 1804, with Mayes, Sudderth &
Etheredge, Inc., on August 21, 1998.


 


Being subject to all easements, right of ways of record and in
existence and first restatement and modification of protective covenants
adopted by the London-Laurel County Industrial Development Authority as shown
in Misc Book 27, Pg. 83, dated 9/24/1997.


 


BEING A PART of the same land acquired by
London-Laurel County Industrial Development Authority from Edith Broughton, a
widow, by deed dated the 25th day of July, 1995, and of record in Deed Book No.
447, at Page 582, records of the Laurel County Court Clerk’s Office, London,
Kentucky.


 


TO HAVE AND TO HOLD the same, together with all the appurtenances
thereunto belonging unto the Party of the Second Part, its successors and
assigns, forever, with covenants of General Warranty.


 


IN TESTIMONY WHEREOF, the Party of the First Part has hereunto
subscribed its name as of the date first above written.


 


	
   

  	
  London-Laurel
  County Industrial

  
	
   

  	
  Development
  Authority, Grantee

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/
  Don Rogers

  	
   

  
	
   

  	
   

  	
  CHAIRMAN

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/
  Charles Pennington

  	
   

  
	
   

  	
   

  	
  SECRETARY

  	
   

  
					



 


6





















 


	
  COMMONWEALTH OF KENTUCKY

  	
  )

  
	
  COUNTY OF LAUREL

  	
  )

  



 


The foregoing Deed was subscribed, sworn to
and acknowledged before me this 9th day of September, 1998, by
London-Laurel County Industrial Development Authority, Grantor, by Don Rogers,
its Chairman, and by Charles Pennington, its Secretary to be its free act and
deed.


 


	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
  NOTARY PUBLIC, STATE AT LARGE, KY

  
	
   

  	
  MY COMMISSION EXPIRES:

  	
  2/5/2002

  	
   

  
					



 


CONSIDERATION
CERTIFICATE


 


We, the undersigned, hereby certify that
the consideration reflected in this deed is the full consideration paid for the
property.


 


	
   

  	
  London-Laurel
  County Industrial

  
	
   

  	
  Development
  Authority, Grantor

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/
  Don Rogers

  	
   

  
	
   

  	
   

  	
  CHAIRMAN

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/
  Charles Pennington

  	
   

  
	
   

  	
   

  	
  SECRETARY

  	
   

  
	
   

  	
   

  
	
   

  	
  IMAGE ENTRY, INC.,

  
	
   

  	
  a Kentucky Corporation,

  
	
   

  	
  Grantee

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/ Bill
  D. Deaton

  	
   

  
	
   

  	
   

  	
  AUTHORIZED AGENT

  	
   

  
					



 


	
  COMMONWEALTH OF KENTUCKY

  	
  )

  
	
  COUNTY OF LAUREL

  	
  )

  



 


The foregoing Consideration Certificate was
subscribed, sworn to and acknowledged before me this 9th day of
September, 1998, by London-Laurel County Industrial Development Authority,
Grantor, by Don Rogers, its Chairman and Charles Pennington, its Secretary, to
be its free act and deed.


 


	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
  NOTARY PUBLIC, STATE AT LARGE, KY

  
	
   

  	
  MY COMMISSION EXPIRES:

  	
  2/5/2002

  	
   

  
					



 


7





















 


	
  STATE OF KENTUCKY

  	
  )

  
	
  COUNTY OF LAUREL

  	
  )

  



 


The foregoing Consideration Certificate was
subscribed, sworn to and acknowledged before me this 11th day of
September, 1998, by IMAGE ENTRY, INC., a Kentucky Corporation, Grantee by Bill
D. Deaton, its authorized agent, to be the free act and deed of said
corporation.


 


	
   

  	
  /s/ Cheryl A. Hubbard

  	
   

  
	
   

  	
  NOTARY PUBLIC, STATE AT LARGE, KY

  
	
   

  	
  MY COMMISSION EXPIRES:

  	
  8/31/99

  	
   

  
					



 


THE FOREGOING INSTRUMENT WAS PREPARED IN
THE LAW OFFICES OF CUNNAGIN AND CUNNAGIN, 201 SOUTH MAIN STREET, P.O. BOX 1070,
LONDON, KENTUCKY,


 


	
   

  	
  BY:

  	
  /s/ WILLIS
  C. CUNNAGIN

  	
   

  
	
   

  	
   

  	
  WILLIS C. CUNNAGIN

  	
   

  



 


State of
Kentucky, County of Laurel, Sct, I, DEAN JOHNSON, Clerk of the Laurel County
Court, do certify that the foregoing deed was, on the 14 day of Sept 1998, at
3:04 PM., lodged in my office for record, and that it has been duly recorded in
my said office, together with this and the certificate thereon endorsed.


 


Given under my hand this 14 day of Sept.
1998. Deed Book 486 Page 602 Clerk Dean Johnson [ILLEGIBLE] D.C.


 


8