EXHIBIT 10.1
SETTLEMENT AGREEMENT
This Settlement Agreement is entered into this 12th day of August, 1997
among ADVANCED MACHINE VISION CORPORATION ("AMV"), CREDIT SUISSE, a corporation
existing under the laws of Switzerland, SWISS AMERICAN SECURITIES, INC. ("SWISS
AMERICAN"), ILVERTON INTERNATIONAL, INC., a corporation existing under the laws
of the British Virgin Islands ("ILVERTON"), XXXXXX XXXXX ("XXXXX") and XXX XXXX
("KHAN").
R E C I T A L S
WHEREAS AMV fka ARC Capital is the plaintiff in an action against
CREDIT SUISSE, ILVERTON, KHAN and XXXXX now pending in the United States
District Court for the District of Oregon as Case No. 97-3307-CO related to a
Subscription Agreement dated May 14, 1996 ("Subscription Agreement Litigation");
WHEREAS AMV is the plaintiff in an action against SWISS AMERICAN and
ILVERTON now pending in the United States District Court for the District of
Oregon as Case No. CV 97-3039-CO related to a Pledge and Security Agreement
dated April 13, 1995, and in which SWISS AMERICAN has filed an interpleader,
("Security Agreement Litigation"); and
WHEREAS the parties or participant to this Settlement Agreement desire
to resolve all disputes among them that relate to the Subscription Agreement
Litigation and/or the Security Agreement Litigation.
IT IS HEREBY AGREED AS FOLLOWS:
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1. Dismissal of Litigation.
1.1 By AMV. Upon delivery of the securities as set forth in
Sections 4 and 5 of this Settlement Agreement, AMV will dismiss
with prejudice its complaints in the Subscription Agreement
Litigation and the Security Agreement Litigation against the
PARTIES SIGNING THIS SETTLEMENT AGREEMENT.
1.2 By CREDIT SUISSE. Upon delivery of the securities as set
forth in Sections 4 and 5 of this Settlement Agreement, CREDIT
SUISSE will dismiss with prejudice its counterclaim filed in the
Subscription Agreement Litigation.
1.3 By SWISS AMERICAN. Upon delivery of the securities as
set forth in Sections 4 and 5 of this Settlement Agreement, SWISS
AMERICAN will dismiss with prejudice its claim for interpleader
filed in the Security Agreement Litigation.
2. Release of Claims.
2.1 By AMV. Conditioned on and effective upon the delivery
of the securities as set forth in Sections 4 and 5 of this
Settlement Agreement, AMV releases and absolutely and forever
discharges CREDIT SUISSE, SWISS AMERICAN, ILVERTON, XXXXX and
KHAN, but only if such PARTY HAS SIGNED THIS SETTLEMENT
AGREEMENT, and each of their respective current officers,
directors and agents of and from any and all claims, demands,
damages, debts, liens, actions and causes of action of every kind
and nature whatsoever, whether now known or unknown, suspected or
unsuspected, which it might have had, shall or may hereafter
have, upon or arising out of
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any matter, cause, fact, thing, act or omission whatsoever
occurring or existing at any time through and including the date
of this Settlement Agreement and including without limitation any
theory recited in the Subscription Agreement Litigation and/or
the Security Agreement Litigation.
2.2 By Remaining Parties. Conditioned on and effective upon
the delivery of the securities as set forth in Sections 4 and 5
of this Settlement Agreement, CREDIT SUISSE, SWISS AMERICAN,
ILVERTON, XXXXX and KHAN hereby release and absolutely and
forever discharge AMV and its subsidiaries and each of their
current officers, directors and agents of and from any and all
claims, demands, damages, debts, liens, actions and causes of
action of every kind and nature whatsoever, whether now known or
unknown, suspected or unsuspected, which any of them had, shall
or may hereafter have, upon or arising out of any matter, cause,
fact, thing, act or omission whatsoever occurring or existing at
any time through and including the date of this Settlement
Agreement and including without limitation any theory recited in
the Subscription Agreement Litigation and/or the Security
Agreement Litigation.
2.3 Nonsigners: Notwithstanding the release of claims
provided in Sections 2.1 and 2.2 of this Settlement Agreement,
the provisions of Sections 2.1 and 2.2 shall not apply to any
party not signing the Settlement Agreement.
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3. Convertible Subordinated Bonds.
3.1 Description of Bonds. AMV is the issuer of $3.4 million
of convertible subordinated bonds sold on April 17, 1996, and
remains the obligor under such bonds until paid by AMV according
to the terms of the bonds.
3.2 Repurchase of Convertible Subordinated Bonds. ILVERTON,
XXXXX, KHAN and CREDIT SUISSE shall have the right to "put" to
AMV up to a maximum of $3.4 million face value of bonds issued
pursuant to AMV's $3.4 million Convertible Secured Note dated
April 17, 1996. The bonds shall be purchased by AMV at face value
without prepayment penalty, but with interest accrued as of the
date of the repurchase. This "put" shall terminate thirty days
following execution of this Settlement Agreement. AMV shall have
no obligation to repurchase bonds in the event this Settlement
Agreement is not executed, the delivery of the securities
required by Sections 4 and 5 of this Settlement Agreement is not
timely completed, or in the event such redemption would require
filings by AMV with the Securities and Exchange Commission or
would otherwise violate the laws of the United States or any
state thereof or of the country in which a bondholder requesting
redemption may reside.
3.3 Bondholder Rights. Pursuant to this section of the
agreement, the $3.4 million of bonds may either (i) "put" to AMV
in accordance with Section 3.2 of this Settlement Agreement, (ii)
converted into AMV Class A Common Stock as permitted in the bond
instrument, or (iii) held until maturity or otherwise sold.
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3.4 Obligation of AMV: The $3.4 million Convertible Secured
Note dated April 17, 1996 is a primary obligation of AMV and is
due on April 17, 2001. The note is backed by the full faith and
credit of AMV.
4. Delivery of SRC Vision, Inc. Common Stock.
Upon execution of this Settlement Agreement, ILVERTON and/or
SWISS AMERICAN shall deliver to AMV all of the common stock of
SRC Vision, Inc., AMV's wholly owned subsidiary, pledged to
secure the $2,160,000 Convertible Subordinated Secured Note dated
April 13, 1995 between AMV and ILVERTON. ILVERTON and XXXXX
represent and warrant that they have no further interest in, or
claim to, the SRV Vision, Inc. common stock pledged to secure
that note.
5. Repurchase of AMV Common Stock and Return of Warrants.
5.1 Delivery of Stock. Upon execution of this Settlement
Agreement ILVERTON and SWISS AMERICAN will deliver to AMV
1,001,640 shares of AMV common stock held in the name of SWISS
AMERICAN.
5.2 Return of Warrants. Within fifteen days of the execution
of this Settlement Agreement, ILVERTON will deliver to AMV for
cancellation ILVERTON's warrants to purchase 300,000 and 340,000
shares, respectively, of AMV's common stock (the Class F Warrants
and Class H Warrants).
5.3 Purchase Price. Concurrent with the delivery of the
stock and warrants pursuant to Sections 4, 5.2 and 5.3 above, AMV
will pay to ILVERTON a total of $1,903,116.
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6. Participation of XXXXX in AMV's Affairs.
For a period of five years from the date of this Agreement,
XXXXX nor any of his agents or affiliates shall, without prior
consent of the then Chair of AMV's Board of Directors,
communicate on matters related to AMV with AMV's shareholders,
bondholders, current and former officers and directors, or,
except to the extent compelled by applicable law, participate
directly or indirectly in any lawsuit asserted against AMV, its
officers or directors, or make any untruthful or defamatory
statements about AMV, its officers or directors. Additionally,
XXXXX and his agents or affiliates will not engage in any proxy
contest, tender offer, merger or any other similar activity
related to AMV for five years. Recognizing that damages to AMV
cannot be readily ascertained in the event of a violation of this
Agreement, XXXXX agrees to a payment of $100,000 as liquidated
damages for each breach of this provision. Notwithstanding this
Section 6, XXXXX shall be able to discuss or communicate
regarding publicly disclosed AMV information.
7. Participation of KHAN in AMV's Affairs.
For a period of five years from the date of this Agreement,
KHAN, nor any of his agents or affiliates shall, without prior
consent of the then Chair of AMV's Board of Directors,
communicate on matters related to AMV with AMV's shareholders,
bondholders, current and former officers and directors, or,
except to the extent compelled by applicable law, participate
directly or indirectly in any lawsuit asserted against AMV, its
officers or directors, or make any untruthful or defamatory
statements about AMV, its officers or directors. Additionally,
KHAN and his agents or affiliates will not engage in any proxy
contest,
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tender offer, merger or any other similar activity related
to AMV for five years. Recognizing that damages to AMV cannot be
readily ascertained in the event of a violation of this
Agreement, KHAN agrees to a payment of $100,000 as liquidated
damages for each breach of this provision. Notwithstanding this
Section 7, KHAN shall be able to discuss or communicate regarding
publicly disclosed AMV information.
8. Participation of AMV in KHAN's Affairs.
For a period of five years from the date of this Agreement,
AMV, nor any of its agents or affiliates shall without prior
consent of KHAN communicate on matters related to KHAN with
KHAN's associates and affiliated businesses, or, except to the
extent compelled by applicable law, participate directly or
indirectly in any lawsuit asserted against KHAN, his associates
or affiliated businesses, or make any untruthful or defamatory
statements about KHAN, its associates or affiliated businesses.
Recogniging that damages to KHAN cannot be readily ascertained in
the event of a violation of this Agreement, AMV agrees to a
payment of $100,000 as liquidated damages for each breach of this
provision. Notwithstanding this Section 8, AMV shall be able to
discuss or communicate regarding publicly disclosed KHAN
information. 9. Participation of AMV in XXXXX'x Affairs. For a
period of five years from the date of this Agreement, AMV, nor
any of its agents or affiliates shall, without prior consent of
XXXXX communicate on matters related to XXXXX with XXXXX'x
associates and affiliated businesses, or, except to the extent
compelled by applicable law, participate directly or indirectly
in any lawsuit asserted against XXXXX, its
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associates or affiliated businesses, or make any untruthful
or defamatory statements about XXXXX, his associates or
affiliated businesses. Recognizing that damages to XXXXX cannot
be readily ascertained in the event of a violation of this
Agreement, AMV agrees to a payment of $100,000 as liquidated
damages for each breach of this provision. Notwithstanding this
Section 8, AMV shall be able to discuss or communicate regarding
publicly disclosed XXXXX information.
10. Severability.
If one or more of the provisions of this Settlement
Agreement shall be for any reason held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the validity, legality and
enforceability of any other provision hereof, and this Settlement
Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein, provided
that the Agreement, as so modified, preserves the basic intent of
the parties.
11. Miscellaneous.
11.1 Governing Law. This Settlement Agreement is made, and
intended to be performed, in the state of Oregon, and shall be
enforced and interpreted by the laws of that state. Any action to
enforce or otherwise related to or arising out of this Settlement
Agreement shall be pursued only through arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration
Association. All such arbitrations shall take place within the
state of Oregon.
11.2 Entire Agreement. This Settlement Agreement is the
final and complete agreement of the parties hereto with respect
to its subject matter, and supersedes any prior discussions,
negotiations or agreements, whether written
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or oral, between the parties with respect to the subject
matter hereof. It may be amended only by an agreement in writing
executed by the parties hereto.
11.3 Attorneys' Fees. Each party shall bear its own costs
and attorneys' fees associated with the Subscription Agreement
Litigation and/or the Security Agreement Litigation and/or the
review and execution of this Settlement Agreement.
11.4 Advice of Counsel. Each of the parties hereto
acknowledges, represents and warrants that he, she or it has had
the opportunity to obtain the advice of counsel of such party's
own choosing in the negotiations for and in the preparation of
this Settlement Agreement, that the party has read the Settlement
Agreement, that each has had this Settlement Agreement fully
explained by such counsel and that each is fully aware of its
contents and legal effect.
11.5 Binding Obligations. Each party signing this agreement
expressly warrants and represents to each other party signing
this agreement that such party is duly authorized and empowered
to enter into this Settlement Agreement and to perform and
observe its agreements and obligations herein, and that such
party has been advised by its legal counsel that this Settlement
Agreement creates and constitutes a binding obligation on such
party and his or its successors and assigns, and that this
Settlement Agreement is enforceable in accordance with its terms.
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11.6 Further Assistance. Each party agrees to execute and
deliver to the other parties all such other and additional
instruments and other documents, and to do all such other acts
and things as any party may reasonably deem necessary to more
fully carry out this Agreement and the obligations contained
herein.
11.7 Condition Precedent to Obligations. The parties to this
Settlement Agreement understand that AMV will pay its obligation
pursuant to Section 5.3 above by delivery upon execution of this
Settlement Agreement of a standard AMV bank check(s). Should the
check(s) fail to clear AMV's bank within five business days of
deposit, AMV will return to the appropriate party the securities
returned to AMV in accordance with this Settlement Agreement and
this Settlement Agreement will be deemed to be null and void as
if it never existed.
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IN WITNESS WHEREOF, the parties have executed this Settlement Agreement, or
caused it to be executed by its officers, being thereunto duly authorized by all
necessary corporate action, as of the date first above written.
Advanced Machine Vision Corporation Credit Suisse
By /s/ Xxxxxxx X. Xxxxx By
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President and CEO
Swiss American Securities, Inc. Ilverton International, Inc.
By By /s/ Ilverton International, Inc.
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Xxxxxx Xxxxx Xxx Xxxx
/s/ Xxxxxx Xxxxx
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