EXHIBIT 10(i)
Mediation Resolution Agreement
August 10, 1999
Among:
AFP Imaging Corporation ("AFP")
DentX International Inc. ("Dent-X")
XxxXxx Systems, Inc. ("XxxXxx")
Xxxx Xxxxx ("Xxxxx")
Pursuant to a written mediation agreement dated as of June 24, 1999 the parties,
represented in the case of AFP and DentX by Xxxx X. Xxxxxxx of Snow Xxxxxx
Xxxxxx, PC, and in the case of XxxXxx and Xxxxx by Xxxxxx X. Xxxxxxx of Xxxxx
Xxxxxx Xxxxxxxx, LLP, met, in the offices of Xxxxx Xxxxxx Xxxxxxxx LLP in New
York City, New York to discuss, mediate and attempt to resolve the business
dispute between the parties arising out of an Asset Purchase Agreement ("Asset
Purchase Agreement") among the parties dated December 23, 1997, an Employment
Agreement (Employment Agreement") between AFP and Xxxxx dated December 23, 1997
and an Unsecured Non-Negotiable Promissory Note (Promissory Note") from DentX,
guaranteed by AFP, payable to XxxXxx (and later assigned to Xxxxx) in the form
shown in Exhibit 3.1 to the Asset Purchase Agreement.
The parties having reached, through mediation, agreement on all of the issues
between them pertaining to the foregoing transactions and documents, each does
thereby, in consideration of the mutual promises set forth herein, and for good
and other consideration, the receipt and sufficiency of which is hereby,
acknowledged, do thereby agree as follows:
1. Scope of Settlement
The parties intend the settlement to be in full and complete
satisfaction and compromise of any and all claims any of the parties
may have or assert against the other, contingent or liquidated known,
or unknown, arising out of the Asset Purchase Agreement, the Promissory
Note and The Employment Agreement.
To that end each of the parties shall separately execute the attached
mutual release identified as Exhibit A.
2. Settlement Terms
The parties agree to reduce the purchase price set forth in the Asset
Purchase Agreement by substituting for the Promissory Note (which now
bears a balance of approximately $2.4 million) the following payments,
transfers and obligations to Xxxxx:
a. AFP will pay to Xxxxx, on the "Closing Date" (as thereinafter
defined), $150,000.
b. On the Closing Date AFP will tender to Xxxxx a new promissory note
(in substitution for the Promissory Note) in the amount of $850,000
(the "New Promissory Note"). The New Promissory Note shall bear no
interest through December 31, 1999. Thereafter interest shall
accrue at the rate of 7.75% per annum and shall be payable monthly
(interest only) through December 31, 2001. Beginning on January 1,
2002, The New Promissory Note will be payable in 36 equal monthly
installments of principal and interest at 7.75% per annum. The New
Promissory Note will be In the form set forth in Exhibit B
(attached), which contains a 20 day notice and cure provision.
c. AFP shall pay, provide or tender all pay and benefits (including
options) due to Xxxxx under the Employment Agreement, when and as
due through its initial term. Xxxxx will have no further
obligations
under the Employment Agreement except to be available to consult
with AFP, from time to time, upon reasonable notice and request at
times and frequencies convenient to Xxxxx.
d. The Non-Competition Agreement dated as of December 23, 1997 between
AFP and Xxxxx (the Non-Competition Agreement) shall remain in force
and effect.
e. All furniture, fixtures and equipment including inventory,
currently owned by AFP or DentX and located in or about Vancouver,
Washington shall become and remain the sole properly of Xxxxx. All
other assets transferred pursuant to the Asset Purchase Agreement
shall remain the property of the purchaser thereunder.
f. Simultaneous with the execution and delivery to Xxxxxx X. Xxxx in
escrow of this Agreement, the parties shall deliver to Xxxxxx X.
Xxxx in escrow the executed releases identified as Exhibit A, which
are included among the term "documents" described in Paragraph 3
hereof.
3. Escrow and Closing
Final documents shall be prepared, executed and delivered to the
mediator, Xxxxxx X. Xxxx, not later then the close of business on
Wednesday, July 21, 1999. AFP shall transfer $150,000 in collected
funds payable to Xxxxx and shall further transfer the New Promissory
Note to the mediator at the same time. The transaction shall close and
documents and funds shall be delivered to the respective parties on
Tuesday, August 10, 1999. There shall be no contingency to the closing
other than the passage of time from July 21, 1999 to August 10, 1999
(the "Closing Date").
4. Attorneys Fees and Costs
In any litigation instituted by either party to enforce payment or the
fulfillment of other obligations pursuant to this mediation Resolution
Agreement, the prevailing party shall recover from the other party, in
addition to costs and disbursements allowed by law, such sums as the
court may allow as attorneys fees in the litigation, including any
appeals therefrom.
Signed and dated this _______day of ____________, 1999.
AFP Imaging Corporation
By:_____________________________________________________________________
Xxxxx Xxxxxx
Xxxx-X International, Inc.
By:_____________________________________________________________________
XxxXxx Systems, Inc.
By:_____________________________________________________________________
Xxxx Xxxxx, President
Xxxx Xxxxx
By:_____________________________________________________________________
Xxxx Xxxxx
