Employee attacked by another EE & then fired.

I have a strange one here.....the scenario is that 2 HVA Technicians were working in the company shop/warehouse. One is the direct supervisor to the other, but both are working in the same area. The subordinate brought his own switchblade into work to use & at the beginning of the day got frustrated with the knife and threw it in the trash. The supervisor pulled it out of the trash, placed it in his pocket & jokingly said, "Cool! Now I got a new knife." Later that day he gave it back to the EE & said something to the effect of, "Now be careful with that." Then the EE grabbed the knife & said, "I know how to use a knife!" and swiped at his supervisor cutting his leg severely. The supervisor wasn't sure exactly what had happened since it happened so fast & was unexpected but felt the pain in his leg. He was taken to the ER & was given 20-21 stiches (internal & external). The supervisor doesn't believe it was on purpose or that there was any malicious intent, but the company "grilled" both of them for days & decided to suspend the employee who did the cutting & fire the supervisor saying he was bullying him and provoked the incident. My question is....should the victim of this accident/cutting have been fired? He cannot even collect unemployment since his termination is labeled as "misconduct". The employee's are in Illinois. PLEASE HELP!!!! Also, the company gave the fired employee a release agreement stating they will pay him 2 weeks severence pay & extend his medical insurance thru 6/30/09 and offer him COBRA only if he signs it by this Friday. The fired employee does not agree with some of the things in the agreement. What should he do? Without unemployment his family could lose their home so the 2 weeks severence WILL help a bit, but the terms they have in the agreement are not good. HELP!

Corrections: The employee's are HVAC Tech's (typo - I had HVA) & the employee had a razor knife....not a switchblabe!