CONSENT AND AMENDMENT AGREEMENT
CONSENT AND AMENDMENT AGREEMENT (this "Agreement") dated as of April
9, 1997 among:
I. XXXXXX X. XXXXXXX ("Xxxxxxx"), XXXXXX X. XXXXXXXX ("Xxxxxxxx"),
XXXX X. XXXXXX ("Xxxxxx"), XXXXXXX X. XXXXXXXXX ("Xxxxxxxxx") and XXXXXX X.
XXXXXX ("Lively"; and each, an "Existing Shareholder" and, collectively,
the "Existing Shareholders");
II. AMERICAN INTERNATIONAL INSURANCE COMPANY, a New York corporation
(the "Investor");
III. ALCOHOL SENSORS INTERNATIONAL, LTD., a New York corporation
(the "Company");
IV. XXXXXX XXXX ("PACE"), XXX XXXXX ("XXXXX"), XXXXXX FAMILY PARTNERS
LTD. ("LFP"), XXXXXX X. XXXXXXXXXX, XXXXX X. XXXXXX, XXXX X. XXXXXX, XXXXXX
X. XXXXXX, XXXXX X. XXXXXXX, XXXXX X. MADOFF, XXXXXX XXXXXXX, XXXXXX X.
XXXXXX, XXXXX XXXXXXXX, XXXXXX X. XXXXXXX, XXXX X. XXXXX and J. XXXXXXXX
XXXXXX (each, a "Releasor" and, collectively, the "Releasors");
X. XXXXXXXXX & XXXXXX ("F&L") and XXXXXXXXXX & GUBITS ("J&G"); and
VI. ARIEL ENTERPRISES, a trust ("Ariel").
RECITALS:
A. The Existing Shareholders, the Investor and the Company are parties
to a Shareholders Agreement dated as of December 20, 1996 (the "Shareholders
Agreement"; capitalized terms used herein and not otherwise defined shall have
the meaning given to such terms in the Shareholders Agreement), a copy of which
is attached hereto as Exhibit A.
B. Pursuant to (i) a Stipulation of Settlement, Settlement Agreement
and Mutual General Release dated as of February 27, 1997 among Pace, Polek, the
Company, Xxxxxx, Xxxxxxxxx, Xxxxxxx, Xxxxxxxx and Xxxx Xxxxxx ("Xxxxxx"), a copy
of which is attached hereto as Exhibit B (the "Release"), and (ii) an Escrow
Agreement dated as of February 27, 1997 among the Company, Whitney, Xxxxxx,
Xxxxxxxxx, Martello, Pasqua, Xxxx Xxxx ("Xxxx"), Xxxxxxx Xxxxxxx ("Xxxxxxx"),
Xxxx Xxxxxx, Esq., J&G, F&L and the Releasors, a copy of which is attached
hereto as Exhibit C (the "Escrow Agreement"), certain of the Existing
Shareholders, Xxxxxx, Xxxx and Xxxxxxx have agreed to Transfer to J&G as Escrow
Agent (in such capacity, the "Escrow Agent") for the account of the Releasors,
F&L and J&G an aggregate of 315,000 shares of Common Stock (the "Subject
Shares"), as more particularly described in the Release and the Escrow
Agreement.
C. Of the Subject Shares 278,578 shares (the "Existing Shareholder
Subject Shares") are to be delivered by Whitney, Xxxxxx, Xxxxxxxxx and Xxxxxxxx,
as more particularly described in Section 1 hereof, and the balance of such
Subject Shares are to be delivered by Xxxxxx, Xxxx and Xxxxxxx.
D. An aggregate of 265,000 shares of the Subject Shares (the
"Releasors' Shares"), are to be released from escrow and Transferred to the
appropriate Releasors upon consummation of the Release, as more particularly
described in the Release, the Escrow Agreement and Section 1 of this Agreement.
E. An aggregate of 50,000 shares of the Subject Shares (the "Escrow
Shares") are to be released from escrow and Transferred to Pace, Polek, F&L and
J&G over a period commencing April 1, 1997 and ending July 31, 1997, as more
particularly described in the Release, Section 5(b) of the Escrow Agreement and
Section 3 of this Agreement.
F. The parties hereto desire to set forth their agreement that,
subject to the terms and conditions hereof (i) the Transfer of the Existing
Shareholder Subject Shares by certain of the Existing Shareholders pursuant to
the Release and the Escrow Agreement, and the Transfer of the Subject Shares by
the Escrow Agent to the Releasors, F&L and J&G, shall be permitted
notwithstanding the provisions of the Shareholders Agreement to the contrary,
(ii) the Releasors shall become parties to and shall be bound by the
Shareholders Agreement with respect to the Releasors' Shares, (iii) Ariel shall
become a party to and shall be bound by the Shareholders Agreement for all
purposes as an Existing Shareholder thereunder and (iv) in connection with the
Transfers of the Subject Shares described herein, certain provisions of the
Shareholders Agreement shall be amended.
NOW, THEREFORE, the parties hereto, intending legally to be bound,
hereby agree as follows:
1. Pursuant to the Release and the Escrow Agreement, the Existing
Shareholders identified below shall be entitled to Transfer the number of
Existing Shareholder Subject Shares specified with respect to such Existing
Shareholder to the Escrow Agent:
Number of
Existing Shareholder
Existing Shareholder Subject Shares
Xxxxxx 79,822
Xxxxxxxxx 79,822
Whitney 79,822
Xxxxxxxx 39,112
Pursuant to the Release and the Escrow Agreement, the Escrow Agent
shall be entitled upon consummation of the Release to release from escrow and to
Transfer the number of Releasors' Shares specified below to the Releasor
specified:
Number of
Releasor Releasors' Shares
Pace 127,000
Xxxxx 31,800
LFP 53,100
Xxxxxx X. Xxxxxxxxxx 5,734
Xxxxx X. Xxxxxx 4,567
Xxxx X. Xxxxxx 4,567
Xxxxxx X. Xxxxxx 4,567
Xxxxx X. Xxxxxxx 4,567
Xxxxx X. Madoff 4,567
Xxxxxx Xxxxxxx 4,567
Xxxxxx X. Xxxxxx 4,567
Xxxxx Xxxxxxxx 4,567
Xxxxxx X. Xxxxxxx 3,610
Xxxx X. Xxxxx 3,610
J. Xxxxxxxx Xxxxxx 3,610
2. Effective as of the date of this Agreement, each Releasor (i)
hereby severally agrees to become a party to the Shareholders Agreement and to
be bound by the terms thereof with respect to the Releasors' Shares acquired by
such Releasor pursuant to the Release and the Escrow Agreement (as more
particularly described in Section 1 hereof), (ii) shall be a Shareholder under
the Shareholders Agreement (provided that, notwithstanding any provision of the
Shareholders Agreement to the contrary, no Releasor shall be entitled to any of
the rights of a Shareholder specified in Section 5.1.2, 5.1.3 or 5.1.4 thereof)
and (iii) hereby severally makes the representations and warranties set forth in
Sections 4.2 and 4.3 of the Shareholders Agreement to each other party hereto as
if such representations and warranties were set forth herein in their entirety.
3. The Escrow Agent shall be entitled to release from escrow and to
Transfer the Escrow Shares to Pace, Polek, F&L and J&G at the times and in the
manner provided in the Release and in Section 5(b) of the Escrow Agreement. In
connection with such Transfer of the Escrow
Shares, each of Pace, Polek, F&L and J&G hereby severally agrees that any
Transfer by such Person of any of the Escrow Shares from April 1 , 1997
through July 31, 1997 shall be made only through the brokerage facilities of
Xxxxxxx Xxxxx & Company, LLC (the "Broker"), provided that the Broker shall have
agreed, in writing, to afford such Person the same prices and terms in relation
to such Transfers as are generally made available to the general public.
Subject to the foregoing, the Escrow Shares shall not be subject to the
Shareholders Agreement.
4. Effective as of the date of this Agreement, Ariel agrees to be
bound by the terms of the Shareholders Agreement and to be deemed for all
purposes an Existing Shareholder thereunder.
5. (a) In connection with the Transfers of the Subject Shares
described herein, the definition of Related Transferee in the Shareholders
Agreement is hereby deleted in its entirety and replaced with the following:
""Related Transferee": as to any Existing Shareholder or any
Releasor, a Transferee that (i) has purchased or otherwise acquired shares of
Capital Stock of the Company from such Existing Shareholder or Releasor, as the
case may be, and (ii) is a spouse, parent, sibling, child, stepchild or
grandchild of such Existing Shareholder or Releasor, as the case may be, or a
trust which is for the benefit of such a Person or Persons, or is an Affiliate
of such Existing Shareholder or Releasor, as the case may be."
(b) In connection with the Transfers of the Subject Shares
described herein, Sections 3.1(a) and (b) of the Shareholders Agreement are
hereby deleted in their entirety and replaced with the following paragraphs:
"(a) For the period from (and including) April 9, 1997 through
(and including) December 20, 1998 (the "Restricted Period"), the Existing
Shareholders and the Releasors severally agree with the Company, the
Investor and with each other Shareholder that they will not, directly or
indirectly, Transfer any Capital Stock of the Company (or any interest
therein), now or hereafter at any time owned by them (excluding in the case
of Pace and Xxxxx the Escrow Shares acquired by such Persons, respectively,
pursuant to the Release and the Escrow Agreement (the "Excluded Shares")),
except that, upon written notice to the Company, the Investor and each
other Shareholder, in accordance with applicable law: (i) each Existing
Shareholder (other than Ariel) and each Releasor (other than LFP) may
Transfer any Common Stock pursuant to an Involuntary Transfer (for such
purpose, the reference to "Existing Shareholder" in the definition of
Involuntary Transfer in the Shareholders Agreement shall be deemed a
reference to "Existing Shareholder or a Releasor"); (ii) each Existing
Shareholder (other than Ariel) and each Releasor (other than LFP) may
Transfer any Common Stock for estate planning purposes to such Existing
Shareholder's or Releasor's spouse, parents, siblings, children,
stepchildren or grandchildren or to a trust which is for the benefit of
such Existing Shareholder or Releasor or such Existing Shareholder's or
Releasor's spouse, parents, siblings, children, stepchildren or
grandchildren; (iii) during the period from (and including) April 9, 1997
through (but excluding) April 9, 1998 (the "Initial Period"), Lively and
Ariel, respectively, may Transfer any Common Stock which, when combined
with all other Transfers of Common Stock by
such Person during the Initial Period, does not exceed 7,000 shares of
Common Stock for Lively and 14,000 shares of Common Stock for Ariel; and
(iv) during the period from (and including) the last day of the initial
Period through (and including) the last day of the Restricted Period (the
"Second Period"), Xxxxxx, Xxxxxxxxx, Xxxxxxx, Lively and Ariel,
respectively, may Transfer any Common Stock which, when combined with
all other Transfers of Common Stock by such Person during the Second
Period, does not exceed the number of shares of Common Stock specified with
respect to such Person below:
Number of Shares
of Common Stock
Which May Be
Transferred in the
Shareholder Second Period
Xxxxxx 49,394
Xxxxxxxxx 49,394
Whitney 49,394
Lively 21,000
Ariel 42,000
; provided, however, that, in connection with any Transfer permitted
under this Section 3.1(a), prior to such Transfer, such Existing
Shareholder or such Releasor, as the case may be, shall comply with Section
3.1(b) hereof.
(b) Any Transfer of Capital Stock of the Company (excluding in
the case of Pace and Xxxxx, the Excluded Shares) by any Existing
Shareholder or any Releasor during the Restricted Period, or at any time
thereafter to a Related Transferee, shall not relieve the transferor of its
obligations hereunder and shall only be valid if the Person to whom such
Capital Stock is Transferred (a "Transferee"), prior to the Transfer,
agrees in writing to be bound by the terms of this Agreement as and to the
same extent that the transferor was bound by this Agreement immediately
prior to such Transfer. Any such Transferee that agrees to be bound by the
terms of this Agreement as provided in this paragraph (b) shall be deemed,
upon execution and delivery of such agreement, to be a Shareholder
hereunder. For purposes of Sections 3.1(a)(iii) and (iv) hereof, references
to a Person shall be deemed to be references to that Person and each
Transferee of that Person on a collective basis. Each such Transferee shall
be entitled to all of the rights under this Agreement to which the
transferor was entitled immediately prior to such Transfer. Any purported
Transfer without obtaining this agreement by the Transferee shall be deemed
void and of no further effect and shall be governed by the provisions of
paragraph (c) below. The provisions of this paragraph (b) shall not apply
in connection with a Public Transfer by an Existing Shareholder or a
Releasor."
6. Each of the Existing Shareholders, each Releasor, F&L and J&G
hereby severally represents and warrants to, and covenants with, each of the
other parties hereto that the Transfers contemplated hereby and by the Release
and the Escrow Agreement will be made in compliance with all applicable laws,
including securities laws. In addition, each of the Existing Shareholders and
Ariel hereby severally represents and warrants to each of the other parties
hereto with respect to himself or itself only that he or it has not Transferred
and Capital Stock of the Company (or any interest therein) from December 20,
1996 through the date hereof.
7. Schedule I to the Shareholders Agreement is hereby deleted in its
entirety and replaced with Schedule I attached hereto. Each Existing Shareholder
(with respect to himself or itself only) and the Company severally makes the
representations and warranties set forth in Section 4.1(f) of the Shareholders
Agreement as if such representations and warranties were set forth herein in
their entirety (except that references therein to (i) the Effective Date shall
be deemed to be references to the date of this Agreement (after accounting for
the Transfers described herein, including the Transfers permitted pursuant to
Section hereof), and (ii) in the case of the representation and warranty by the
Company, (x) Existing Shareholders shall be deemed to be references to
Shareholders (other than the Investor) and (y) an individual shall be deemed to
be references to a Person). Each Shareholder (other than the Existing
Shareholders and the Investor) severally represents and warrants to the other
parties hereto that, as of the date hereof (after accounting for the Transfers
described herein, including the Transfers permitted pursuant to Section 3
hereof), such Person owns all right, title and interest in and to the number of
shares of Common Stock specified with respect to such Person on Schedule I
attached hereto, free and clear of all liens, claims, charges, security
interests and other encumbrances. The parties to the Shareholders Agreement
hereby acknowledge and agree that the 39,850 shares of Common Stock presently
owned by Lively shall not be subject to the Shareholders Agreement, provided
that, within sixty (60) days from the date hereof, Lively shall Transfer such
shares of Common Stock as follows: (i) 2,500 shares of Common Stock shall be
Transferred to a retirement account in Lively's name and (ii) 37,350 shares of
Common Stock shall be Transferred to Lively's wife, Xxxxxxxx Xxxxxx.
8. Notwithstanding anything to the contrary contained in the Release
or the Escrow Agreement, the Company and each of the Shareholders (other than
the Investor) severally agree that they will not enter into any amendment of or
agree to waive any of the provisions of the Release relating to the Subject
Shares or of the Escrow Agreement without the prior written consent of the
Investor, and any such amendment or waiver entered into or agreed to without
such consent shall be deemed void for all purposes hereof and the Shareholders
Agreement.
9. All notices, demands and other communications under the
Shareholders Agreement with respect to the following Persons shall be addressed
as specified below:
Releasors: c/o Jacobowitz & Gubits
000 Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
with a copy to:
Fabricant & Xxxxxx
Xxx Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Ariel: c/o Xxxxxx X. Xxxxxx
Alcohol Sensors International Ltd.
00 Xxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
or to such other address as any such Person shall designate in writing to the
other parties to the Shareholders Agreement.
10. This Agreement may be executed in any number of counterparts and
by different parties hereto on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original
and all of which counterparts, taken together, shall constitute but one and the
same Agreement.
11. The rights and obligations of the parties under this Agreement may
not be assigned or otherwise transferred to any other Person, except with the
prior written consent of the other parties hereto. Except as expressly provided
in this Agreement, this Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors, permitted assigns, heirs and personal
representatives. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors, permitted
assigns, heirs and personal representatives. Except as otherwise expressly
amended hereby, the Shareholders Agreement shall remain in full force and
effect.
12. This Agreement shall be deemed to be a contract made under and
shall be governed by and construed in accordance with the internal laws of the
State of New York without reference to the principles of conflict of laws. In
the event of any conflict between this Agreement, on the one hand, and the
Release or the Escrow Agreement, on the other hand, the provisions of this
Agreement shall prevail as between the parties hereto.
13. Each of the parties hereto shall execute and deliver such
documents, instruments and agreements and take such further actions as may be
reasonably required or desirable to carry out the provisions of this Agreement
and the transactions contemplated hereby, and each of the parties hereto shall
cooperate with each other in connection with the foregoing.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement or caused this Agreement to be duly executed by their respective
officers or representatives thereunto duly authorized as of the day and year
first written above.
/s/ Xxxxxx X. Xxxxxxx
XXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxxxxx
XXXXXX X. XXXXXXXX
/s/ Xxxx X. Xxxxxx
XXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxxxxx
XXXXXXX X. XXXXXXXXX
/s/ Xxxxxx X. Xxxxxx
XXXXXX X. XXXXXX
AMERICAN INTERNATIONAL INSURANCE
COMPANY
By: /s/ J. Xxxxxx Xxxxxx
Name: J. Xxxxxx Xxxxxx
Title: President
ALCOHOL SENSORS INTERNATIONAL, LTD.
By: /s/ Xxxxxx X. Xxxxxxx
Name:
Title:
/s/ Xxxxxx Xxxx
XXXXXX XXXX
/s/ Xxx Xxxxx
XXX XXXXX
FABRICANT & XXXXXX
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Owner
XXXXXXXXXX & GUBITS
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Partner
XXXXXX FAMILY PARTNERS LTD.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: General Partner
/s/ Xxxxxx X. Xxxxxxxxxx
XXXXXX X. XXXXXXXXXX
/s/ Xxxxx X. Xxxxxx
XXXXX X. XXXXXX
/s/ Xxxx X. Xxxxxx
XXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx
XXXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxxx
XXXXX X. XXXXXXX
/s/ Xxxxx X. Madoff
XXXXX X. MADOFF
/s/ Xxxxxx Xxxxxxx
XXXXXX XXXXXXX
/s/ Xxxxxx X. Xxxxxx
XXXXXX X. XXXXXX
/s/ Xxxxx Xxxxxxxx
XXXXX XXXXXXXX
/s/ Xxxxxx X. Xxxxxxx
XXXXXX X. XXXXXXX
/s/ Xxxx X. Xxxxx
XXXX X. XXXXX
/s/ J. Xxxxxxxx Xxxxxx
X. XXXXXXXX XXXXXX
XXXXX ENTERPRISES
By: /s/ Xxxxxx X. Xxxxxx
Name: XXXXXX X. XXXXXX
Title: Trustee
SCHEDULE I
SHAREHOLDERS' OWNERSHIP
OF COMMON STOCK
Percentage
No. of Shares of Ownership of All
Options of the Company's
No. of Shares Exercisable for Capital Stock
of Common Common Stock (on a Fully
Name of Shareholder Stock Owned Owned Diluted Basis)
Xxxxxx X. Xxxxxxx 566,260 3.83%
Xxxxxx X. Xxxxxxxx 110,888 0.75%
Xxxx X. Xxxxxx 566,260 3.83%
Xxxxxxx X. Xxxxxxxxx 566,260 3.83%
Xxxxxx X. Xxxxxx 0 140,000 0.95%
Ariel Enterprises 180,000 100,000 1.89%
Xxxxxx Xxxx 150,600 1.02%
Xxx Xxxxx 37,700 0.26%
Fabricant & Xxxxxx 10,000 0.07%
Xxxxxxxxxx & Gubits 10,500 0.07%
Xxxxxx Family Partners Ltd. 53,100 0.36%
Xxxxxx X. Xxxxxxxxxx 5,734 0.04%
Xxxxx X. Xxxxxx 4,567 0.03%
Xxxx X. Xxxxxx 4,567 0.03%
Xxxxxx X. Xxxxxx 4,567 0.03%
Xxxxx X. Xxxxxxx 4,567 0.03%
Xxxxx X. Madoff 4,567 0.03%
Xxxxxx Xxxxxxx 4,567 0.03%
Xxxxxx X. Xxxxxx 4,567 0.03%
Xxxxx Xxxxxxxx 4,567 0.03%
Xxxxxx X. Xxxxxxx 3,610 0.02%
Xxxx X. Xxxxx 3,610 0.02%
J. Xxxxxxxx Xxxxx 3,610 0.02%
EXHIBIT A: SHAREHOLDERS AGREEMENT
EXHIBIT B: RELEASE
EXHIBIT C: ESCROW AGREEMENT
