EXHIBIT 10(an)
AGREEMENT AND RELEASE
This is an Agreement and Release ("Agreement and Release") among
American Industries, Inc. ("AI"), Xxxxxxx Xxxx Xxxxxx ("Xxxxxx"), the Xxxxxxx
Xxxx Xxxxxx Revocable Trust ("Xxxxxx Trust"), the 2030 Investors 401K and the
2030 Investors LLC (collectively "Plaintiffs"), Imaging and Technologies,
("ITEC") and Xxxxx Xxxxx ("Xxxxx ") (collectively "Defendants").
RECITALS:
A. On February 2, 1999, Plaintiffs filed a complaint against
Defendants, among others, in Multnomah County Circuit Court in Oregon. The case
is titled, American Industries. Inc., et. al. v. Imaging Technologies. Inc., et.
al., 00-00-00000. The complaint alleged claims for violations of the Oregon
Securities Law, Breach of Contract and Warranties, Fraud, Negligent
Misrepresentation and Negligence.
B. Prior to trial, Al reached partial settlement agreements with ITEC
on certain claims arising out of AI's purchase of a $950,000 Non-Convertible
Subordinated Promissory Note from ITEC and AI's decision to provide ITEC with
irrevocable letters of credit totaling $1.5 million, of which ITEC's suppliers
and creditors drew $1,202,328.
C. On September 1, 1999, the Multnomah County Circuit Court entered a
Partial Judgment in favor of AI and against ITEC for $1,203,967, less payments
already made; in settlement of AI's claims arising out of the irrevocable letter
of credit. The outstanding amount of the judgment against ITEC and Xxxxx in the
above-named case as of January 25, 2001, is $812,791.74, including interest.
Interest is accruing on the judgment at nine percent (9%) per annum.
D. Following a trial in Multnomah County on the remaining claims that
had not been settled, the jury returned a verdict for defendants ITEC and Xxxxx.
On May 16, 2000, the court issued a Final Judgment in favor of ITEC and Xxxxx.
E. Following entry of Final Judgment, Defendants petitioned the court
for an award of attorney fees as the prevailing party under ORS 59.115(10).
Plaintiffs opposed the motion. The trial court has not issued an order with
respect to the outstanding petition.
F. On June 13, 2000, Plaintiffs filed a Notice of Appeal of the Final
Judgment entered in favor of Defendants. The parties have not filed briefs on
appeal and there remain disputed issues on appeal.
G. Plaintiffs and Defendants desire to finally and forever settle and
terminate the litigation. including all appeals, between them as well as all
disputes and any outstanding grievances or complaints of any kind and to resolve
and terminate in a manner satisfactory to the parties as shown by the provisions
of this Agreement and Release, all claims of every kind that each party has or
had against the other arising to date.
REPRESENTATIONS, WARRANTIES, COVENANTS AND CONDITIONS
1. The Recitals above are incorporated herein by reference.
2. AI shall credit ITEC $140,000 for attorney fees and any costs in the
above-named case against the judgment in favor of Plaintiffs. Such credit shall
be the sole source of payment of the attorney fees and costs.
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3. Within forth-five (45) days following the effective date after this
Agreement and Release, ITEC will cause to be filed with the Securities and
Exchange Commission (SEC) a registration statement for shares of its common
stock to include for AI a number of shares equal to, the quotient of One Hundred
Thousand Dollars ($100,000.) divided by the average of the closing prices for
ITEC's common stock over the ten (10) trading days ending five (5) trading days
preceding the date of such filing. Within ten (10) business days following the
effectiveness of the registration statement so filed, ITEM will deliver to AI
registered and freely-tradable shares of common stock (fully paid and
non-assessable) in the amount included in said registration statement for AI.
Within ninety (90) days following the effective date of this Agreement
and Release, ITEC will complete the necessary corporate actions to either reduce
the number of Shares of its common stock outstanding or increase the number of
authorized common shares in a number at least equal to the Remaining Settlement
Shares, as that term is defined below.
Within forty-five (45) days following the effective date of such
corporate actions, ITEC will cause to be filed with the SEC a registration
statement for shares of its common stock to include for AI a number of shares
equal to one hundred twenty-five percent (125%) of the Remaining Settlement
Shares, defined for purposes of this Agreement and Release as the quotient of
the total amount due AI pursuant to this Agreement and Release (such amount
having been reduced by the $100,000 for which common shares were issued as
provided above and by the $140,000 credit in paragraph 2 above) divided by the
average of the closing prices for ITEC's common stock over the ten (10) trading
days ending five (5) trading days preceding the date of such filing (the Second
Registration Statement).
At its option, AI may elect from time to time after the effectiveness
of the Second Registration Statement, to receive a number of shares of ITEC
common stock to satisfy a portion, rather than the entire amount, remaining to
be owed by ITEC under this Agreement and Release (a Partial Settlement Request);
or AI may request delivery of a sufficient number of shares of ITEC common stock
to satisfy the full balance due under this Settlement and Release, provided
that, in each such election, AI shall elect to satisfy an amount of the
obligation equal to at least the lesser of One Hundred Thousand Dollars
($100,000) or the entire remaining unpaid balance of the indebtedness. ___ Each
such request must be made in a writing delivered to the President of ITEC, with
a copy to the General Counsel of ITEC. Within ten (10) business days following
the receipt of a request for such delivery of shares, ITEC will deliver to AI
registered and freely-tradable shares of its common stock (fully paid and
non-assessable) in an; amount equal to the lesser of (a) the quotient of the
dollar value requested divided by the average of the closing prices for ITEC's
common stock over the ten (10) trading days ending five (5) trading days
preceding the date of the receipt of such request; or (b) the number of
remaining shares registered for AI in the Second Registration Statement. If an
insufficient number of shares to satisfy the request remains available for
delivery to AI from those registered in the Second Registration Statement, then
ITEC will (i) promptly file with the SEC another registration statement
including the number of shares for AI equal to (a) minus (b) above; (ii) verify
and/or promptly undertake any necessary corporate action to assure that such
number of shares to be so registered will not cause ITEC to exceed its
authorized number of common shares; and (iii) deliver that number of registered
and freely-tradable shares of its common stock (fully paid and non-assessable)
within ten (10) business days following the effectiveness of that registration
statement.
4. Notwithstanding any other provisions of this Agreement and Release
to the contrary, the debt owed by ITEC to AI (and the judgment related thereto)
shall not be deemed discharged, satisfied or reduced in any respect (other than
the $140,000) credit provided for in paragraph 2 of this Agreement) unless and
until AI shall have received delivery of the fully paid, non-assessable,
registered and freely tradable shares of ITEC common stock required to be
delivered hereunder, and then only to the extent of such delivery. Interest
shall continue to accrue on any unsatisfied portion of the judgment until fully
satisfied.
5. Plaintiffs and defendants hereby release each of the parties to this
Release from any and all claims for attorney fees and costs in the above-named
case and hereby covenant to dismiss all claims now in existence, with prejudice
and without attorney fees or costs to any party.
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6. Plaintiffs and defendants hereby waive their rights to appeal the
judgment in the above- named case and hereby covenant to dismiss all claims now
in existence, with prejudice and without attorney fees or costs to any party.
7. In consideration of, and subject to, the conditions set forth in
this Agreement and Release, Plaintiffs and Defendants hereby mutually and
generally release, acquit, and forever discharge each other, each party's
officers, directors, employees, partners, agents, attorneys, accountants,
representatives, insurers, affiliates and assigns (collectively, the "Released
Persons") from any and all debts, claims, liabilities, causes of action, losses,
damages, attorney fees, claims for contribution, claims for indemnity and claims
of any other kind or nature whatsoever, whether known or unknown, arising from
or in any way related to the following any and all liabilities, demands, claims,
suits, actions, charges, damages, judgment or levies or executions, whether
known or unknown, liquidated or unliquidated, arising from the beginning of time
to and including the Effective Date of this Agreement and Release.
8. This Agreement and Release is not to be construed as an admission of
liability by any party, and each party expressly acknowledges that liability is
and has been expressly denied by the other party.
9. This Agreement and Release shall be interpreted, and the rights and
liabilities of the parties determined, in accordance with the laws of the State
of Oregon. The venue of any dispute arising out of or related to this Agreement
and Release shall be in Multnomah County, Oregon.
10. Without limiting the provision herein that Oregon law applies to
this agreement, Defendants acknowledge and agree that they have been informed by
their attorneys that they are familiar with and hereby expressly waive the
provisions of and any and all rights under section 1542 of the Civil Code of the
State of California, and any similar statute, code, law or regulation of any
state of the United States, or of the United Slates, to the fullest extent that
they may waive such rights and benefits. Section 1542 provides as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
11. This Agreement and Release is the product of negotiations and
mediation among the parties and any enforcement will be interpreted in a neutral
manner and not more strongly for or against any party based upon the source of
the draftsmanship.
12. This Agreement and Release may be executed in several counterparts,
each of which will be an original, but all of which shall constitute one and the
same Agreement and Release.
13. This Agreement and Release contains the entire Agreement and
Release among the parties and fully supersedes any and all prior negotiations,
agreements, or representations, written or oral, between the parties with
respect to the subject matter thereof and hereof.
14. This Agreement and Release shall not be altered, amended or
modified in any respect except by a writing duly executed by all parties hereto.
15. Each of the parties to this Agreement and Release represents and
warrants that:
a. This Agreement and Release is freely and voluntarily executed;
such party has not executed this Agreement and Release under
any duress or undue influence by any person or entity.
b. This Agreement and Release is duly authorized, validly
executed, and delivered. Such party has the full right, power,
legal capacity and authority to enter into and perform its
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obligations hereunder and no approval or consent of any other
person is necessary in connection herewith.
c. Such party relies solely on its own judgment and the judgment
of its counsel in making this Agreement and Release and has
not been influenced to any extent in making this Agreement and
Release by any representation or statements made by any other
person.
d. Such party expressly assumes the risk of any mistake of fact
and of any facts proven to be other than or different from the
facts now known to the parties to this Agreement and Release
or believed by them to exist.
e. It is the expressed intent of the parties to this Agreement
and Release to settle and adjust all controversies relating to
the Released Claims finally and forever, without regard to
which party may or may not be correct with respect to any
issue of fact or law.
16. The Effective Date of this Agreement and Release shall be the date
on which the last signature is received by ITEC.
17. If any party files a lawsuit, arbitration demand or other
proceeding to enforce any term of this Agreement and Release, through
declaration, injunction, specific enforcement or otherwise, or for damages
arising our of a violation of any term of this Agreement and Release, the
prevailing party in such lawsuit shall be entitled to its attorneys' fees and
costs incurred, including fees and costs in trial and on appeal.
Date: March 1, 2001
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PLAINTIFFS:
AMERICAN INDUSTRIES, INC. 2030 INVESTORS 401K
By By
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Its Its
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2030 INVESTORS, LLC XXXXXXX XXXX XXXXXX REVOCABLE TRUST
By By
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Its Its
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XXXXXXX XXXX XXXXXX
By By
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Its Its
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DEFENDANTS:
IMAGING TECHNOLOGIES, INC. XXXXX XXXXX
By
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Its
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