ALCOHOL SENSORS INTERNATIONAL, LTD.
00 Xxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
August 14, 1998
X. Xxxxxx Xxxxxx, President
American International Insurance Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Series A Cumulative Non-Redeemable Convertible Preferred Stock
Dear Xx. Xxxxxx:
This letter will serve to confirm and memorialize the agreement
between American International Insurance Company ("AIIC") and Alcohol Sensors
International, Ltd. (ASI") that, notwithstanding the terms and provisions of the
Certificate of Incorporation of ASI, as amended to date (the "Charter"), that
certain Convertible Preferred Stock and Warrant Purchase Agreement, dated as of
December 20, 1996 (the "Purchase Agreement"), between ASI and AIIC, and that
certain Registration Rights Agreement, dated as of December 20, 1996 (the
"Registration Rights Agreement"), between ASI and AIIC, AIIC, as the registered
and beneficial owner of all of the 833,333 shares (the "Preferred Shares") of
the Series A Cumulative Non-redeemable Convertible Preferred Stock, par value
$.001 per share, of ASI currently authorized and outstanding, has agreed to
accept the following number of shares (the "Shares") of the common stock, par
value $.001 per share (the "Common Stock"), of ASI, in full and complete
satisfaction of all dividend payments due AIIC with respect to the Preferred
Shares for the Dividend Payment Dates (the singular of term as defined in the
Charter) of June 30, 1997, December 31, 1997, June 30, 1998, December 31, 1998,
June 30, 1999 and December 31, 1999:
(a) 79,583 shares of Common Stock with respect to the Dividend
Payment Date of June 30, 1997, determined by multiplying the amount of
dividends due on said Dividend Payment Date (i.e., $119,375), by a
fraction, the numerator of which is $3.00 and the denominator of which is
$4.50;
(b) 75,639 shares of Common Stock with respect to the Dividend
Payment Date of December 31, 1997, determined by multiplying the amount of
dividends due on said Dividend Payment Date (i.e., $112,500), by a
fraction, the numerator of which is $3.00 and the denominator of which is
$4.462;
(c) 75,639 shares of Common Stock with respect to the Dividend
Payment Date of June 30, 1998, determined by multiplying the amount of
dividends due on said Dividend Payment Date (i.e., $112,500), by a
fraction, the numerator of which is $3.00 and the denominator of which is
$4.462;
(d) such number of shares of Common Stock as shall equal the
amount of dividends due on December 31, 1998, multiplied by a fraction, the
numerator of which shall be $3.00 and the denominator of which shall be the
Conversion Price (as such term is defined in the Charter) as then in
effect, with respect to such Dividend Payment Date;
(e) such number of shares of Common Stock as shall equal the
amount of dividends due on June 30, 1999, multiplied by a fraction, the
numerator of which shall be $3.00 and the denominator of which shall be the
Conversion Price as then in effect, with respect to such Dividend Payment
Date; and
(f) such number of shares of Common Stock as shall equal the
amount of dividends due on December 31, 1999, multiplied by a fraction, the
numerator of which shall be $3.00 and the denominator of which shall be the
Conversion Price as then in effect, with respect to such Dividend Payment
date.
In addition, each and all of the Shares shall be deemed "Registrable
Securities" under, and shall be subject to, the Registration Rights Agreement
for all purposes contained therein.
Except as modified by the matters set forth herein, the terms and
condition of the Charter, Purchase Agreement and Registration Rights Agreement
shall remain in full force and effect.
If the foregoing accurately reflects your understanding of our
agreement with respect to the foregoing matters, kindly acknowledge and agree to
such by executing the duplicate copy of this letter in the space indicated for
such below.
Very truly yours,
Alcohol Sensors International, Ltd.
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, President
Accepted and Agreed to:
American International Insurance Company
By: /s/ J. Xxxxxx Xxxxxx
J. Xxxxxx Xxxxxx, President
