STIPULATION OF SETTLEMENT,
SETTLEMENT AGREEMENT
AND MUTUAL GENERAL RELEASE
This Stipulation of Settlement, Settlement Agreement and Mutual General
Release ("Agreement") executed as of the 27th day of February, 1997 by and
between
Albert Pace and Jan Polek (sometimes hereinafter referred to as
"Releasors"), and
Alcohol Sensors International Ltd. ("ASI"), John T. Ruocco ("Ruocco"),
Michael A. Sylvester ("Sylvester"), Robert B. Whitney ("Whitney")
Steven A. Martello ("Martello"), Leon Pasqua, ("Pasqua"), and
(sometimes hereinafter collectively referred to as "Releasees"),
both Releasors and Releasees collectively referred to as the "Parties" and
individually as a "Party".
W I T N E S S E T H:
WHEREAS, Releasors filed a complaint for damages against Alcohol Sensors
International, Ltd., Whitney, Ruocco, Sylvester, Martello and Pasqua currently
pending in the Federal District Court for the Southern District of New York
under Index No. 96 Civ. 5867 (hereinafter the "Action"); and
WHEREAS, all Parties desire that the Action be settled, discontinued and
dismissed, that all matters at issue be settled, and that the Parties release
and fully discharge each other of and from any and all claims, suits, or causes
of action arising from, and all acts, actions, and transactions between the
Parties, or in any way connected with, the facts and circumstances surrounding
the Action on the terms and conditions set forth herein;
NOW, THEREFORE, for and in consideration of the premises, and the mutual
releases set forth herein, and the payment of shares of stock in Alcohol Sensors
International, Ltd. in accordance with the provisions of paragraph "1" hereof,
to be paid by Releasees to Releasors (or their designees) in accordance with the
terms and subject to the conditions hereinafter set forth, the receipt and
sufficiency of which is hereby expressly acknowledged, the Parties hereby agree
as follows:
1.a. Releasees will take all necessary action to issue transfer and deliver
to the Releasors, or their designees, 315,000 fully-paid, non-assessable shares
of the common stock of Alcohol Sensors International, Ltd., a New York
corporation within thirty (30) days of the date this Agreement is fully
executed. Releasors acknowledge that the shares to be issued, transferred and
delivered pursuant to this paragraph "1.a." are subject to contractual "lock-up"
provisions and a shareholder agreement between the Releasees and American
International Insurance Company ("AIIC") respectively. Notwithstanding the terms
of such lock-up provisions, Releasees warrant, represent and agree that with
respect to 50,000 of the shares to be issued transferred and delivered pursuant
to this Stipulation and Settlement Agreement, that the Releasors will take all
necessary and appropriate action to have these shares issued transferred and
delivered to Jacobowitz & Gubitz as attorneys, free of such contractual lock-up
restrictions provided, however, that Jacobowitz and Gubitz shall have signed an
escrow agreement which will restrict the sale of these 50,000 shares to no more
than 12,500 shares in each of the four (4) calendar months commencing April 1,
1997. Releasors and their attorneys agree further that any such sales of these
securities shall be made only through the brokerage facilities of William Scott
& Company, LLC provided, however, that William Scott will have agreed, in
writing, to afford Jacobowitz & Gubitz in respect of any such sales, the same
prices and terms available to the general public.
b. With respect to the remainder of the shares issuable hereunder
(265,000), Releasors agree, for themselves, their heirs, attorneys, assignees,
and designees to be bound by the terms of a certain agreement between AIIC and
the Releasees (the "AIIC Agreement) including, without limitation, provisions
relating to restrictions on sale of the securities to be issued hereunder.
Releasors acknowledge that they have received a copy of the AIIC Agreement and
that no representation has been made as to the content, meaning, or significance
of the terms thereof other than has been stated therein. Releasors further agree
to execute, if required by AIIC, a separate agreement, in form and substance
agreeable to AIIC or its counsel, memorializing the substantive terms of this
paragraph "1.b."
c. The Releasees warrant and represent that ASI's Employee Stock Option
Plan provides for the issuance of no more than 600,000 shares of ASI's common
stock on exercise of such options, and that 300,000 of these options are
issuable only to outside consultants and outside advisors to the Company.
d. The Releasees warrant and represent that neither ASI nor its Board of
Directors has taken any action prior to the execution of this Agreement, and
further warrant and represent that they will take no action subsequent to the
execution of this Agreement and prior to the issuance and delivery of 315,000
shares pursuant to paragraph "1.a." hereof, and/or any judgment authorized
herein has been satisfied, to effect any stock split or stock dividend of or on
any of the outstanding capital stock of the Company.
e. In order to effectuate the issuance, transfer and delivery of shares
contemplated by paragraph "1.a." hereof, the Releasees warrant and represent
that they will in good faith and without delay take the following actions:
i. Deliver share certificates, stock powers, and letters of
authorization to its Transfer Agent, Continental Stock Transfer, within three
(3) business days of receipt of written instructions from Releasors as to the
identity, social security number, and address of the individuals/entities to
whom shares are to be issued, transferred and delivered;
ii. Secure and deliver to the Transfer Agent such other documentation
as may be required by the Transfer Agent to effect the transfers and deliveries
contemplated hereby including, without limitation, waivers and consents of AIIC,
consents of William Scott & Co., LLC, opinion(s) of counsel, and the consents of
any others whose consents may be necessary to cause the transfers and deliveries
contemplated hereby. Any additional documentation requested or required by the
Transfer Agent will be delivered to the Transfer Agent by overnight courier no
later than the next business day after receipt of same by the Releasees or any
of them.
f. In order to effectuate the issuance of shares contemplated by paragraph
"1.a.", the Releasors agree to execute any and all documentation required by the
Transfer Agent, AIIC, or William Scott & Company, LLC, including, without
limitation, agreements necessary to enforce the terms of paragraph "1.b." and
the AIIC lock-up provisions; agreements necessary to enforce the provisions
restricting sales through William Scott & Company, LLC as set forth in paragraph
"1.a."; any additional documentation reasonably requested and necessary to
effect the transfers contemplated, all of which shall be subject to approval of
counsel to the Releasors.
2. Assuming successful completion of the delivery of shares pursuant to
paragraphs "1.a." and "b.", Albert Pace and Jan Polek hereby FULLY RELEASES,
ACQUITS and FOREVER DISCHARGE ASI, Whitney, Ruocco, Sylvester, Martello, and
Pasqua, their executors, administrators, predecessors and successors in
interest, shareholders, directors, former directors, officers, former officers,
partners, assigns, attorneys, agents, employees, and former employees, parents,
subsidiaries, affiliates, any company affiliated with, controlled by, or having
a contractual relationship with the Releasees, personal representatives, of and
from any and all actions, suits, liens, claims, counterclaims, losses, rights,
demands, debts, costs, accounts, contracts, agreements, promises, options,
liabilities, obligations, damages, controversies, causes of action, loss of
services, expenses and compensation, of any kind or nature whatsoever, known or
unknown, suspected or unsuspected, fixed or contingent, whether in contract or
in tort, at law or in equity, including without limitation, attorneys' fees and
costs (and appellate fees and costs), which Releasors, their executors,
administrators, predecessors and successors in interest, assigns, attorneys,
agents, employees, parent subsidiaries, affiliates, and/or personal
representatives, may have had or claim to have had, or now have or claim to have
or hereafter may have or assert to have on account of, or by reason of, or in
any way growing out of or resulting from the Action, or relating to any of the
facts, theories, causes or action or circumstances forming the basis of the
Action, or in any way connected with the transactions giving rise to the Action,
or otherwise.
3. Assuming successful completion of the delivery of shares pursuant to
paragraphs "1.a." and "b.", ASI, Whitney, Ruocco, Sylvester, Martello, and
Pasqua hereby FULLY RELEASE, ACQUIT and FOREVER DISCHARGE, Releasors and their
executors, administrators, predecessors and successors in interest, assigns,
attorneys, agents, employees, affiliates, any company affiliated with,
controlled by, or having a contractual relationship with the Releasors and/or
personal representatives, of and from any and all actions, suits, liens, claims,
counterclaims, losses, rights, demands, debts, costs, accounts, contracts,
agreements, promises, options, liabilities, obligations, damages, controversies,
causes of action, loss of services, expenses and compensation, of any kind or
nature whatsoever, known or unknown, suspected or unsuspected, fixed or
contingent, whether in contract or in tort, at law or in equity, including
without limitation, attorneys fees and costs (and appellate fees and costs),
which its executors, administrators, predecessors and successors, in interest,
shareholders, directors, former directors, officers, former officers, partners,
assigns, attorneys, agents, employees, parents, subsidiaries, affiliates, and/or
personal representatives, may have had or claim to have had, on account of, or
by reason of, or in any way growing out of or resulting from the Action, or
relating to any of the facts, theories, causes of action or circumstances
forming the basis of the Action, or in any way connected with the transactions
giving rise to the Action, or otherwise.
4. Each party expressly understands and acknowledges that it is possible
that unknown losses or claims exist, whether or not said claims or causes, or
the predicate acts of such claims or causes have been enumerated in the Action,
or that present losses may have been underestimated in amount or severity, and
each Party represents and warrants that this uncertainty was taken into account
in determining the consideration to be paid for the making of this Agreement,
and that a portion of the consideration has been bargained for between the
Parties with the knowledge of the possibility of such unknown claims and that
said consideration was given in exchange for full accord, satisfaction and
discharge of all such claims including claims and counterclaims that could have
been made in the Action.
5. It is agreed and understood that the consideration for this Agreement is
contractual and not a mere recital. This Agreement is a compromise settlement
agreement and is entered into by the Releasees in order to settle disputed
claims, to avoid the expense of litigation, and to achieve peace. The Releasees
deny that they or any of their agents, representatives, corporate parents,
affiliates, subsidiaries, divisions, officers, directors, shareholders,
employees, attorneys, heirs, survivors, executors, administrators, and/or
assigns have ever had any liability to the Releasors. Nothing in this Agreement
shall be interpreted as an admission of liability by the Releasees.
6. Each Party acknowledges that it is fully and completely informed of the
facts relating to the subject matter of this Agreement and of the rights and
liabilities of each of the Parties; that each Party enters into this Agreement
voluntarily after having given careful and mature consideration to the making of
this Agreement; that each Party has carefully read this instrument; that each
Party has discussed the provisions of this Agreement with an attorney of its
choice and has executed it in reliance upon its own judgment and the advice of
its attorneys; that this Agreement represents the entire agreement between the
Parties; that each Party is legally competent to execute this Agreement; that
each Party fully understands and intends that this Agreement will be a full,
final and complete release of all matters described herein between the Parties.
7. The Releasors and their agents, representatives, survivors, heirs,
successors, assigns, executors, and administrators further covenant that they
will refrain from commencing any action, suit, arbitration, or administrative
proceeding, or prosecuting any pending action, suit, arbitration, or
administrative proceeding, in law or in equity, against the Releasees or their
agents, representatives, corporate parents, affiliates, subsidiaries, divisions,
officers, directors, shareholders, employees, attorneys, heirs, survivors,
executors, administrators, successors, or assigns, concerning any causes of
action, claims, or demands released in this Agreement. The Releasors further
represent and warrant that they will not in the future, aid, assist, or
instigate any person, firm, business entity or corporation to bring any claim,
action, arbitration, or other proceeding against any of the other parties
hereto.
8. This Agreement and its terms are CONFIDENTIAL and neither the Releasors
nor their attorneys, agents, representatives, survivors, heirs, successors,
assigns, executors, or administrators shall disclose this Agreement or any of
its terms to any other person or entity except as otherwise required by law. If
the Releasors or their attorneys, agents, representatives, survivors, heirs,
successors, assigns, executors, or administrators disclose this Agreement or any
of its terms to any other person except as otherwise required by law, then the
Releasors (a) shall be liable for all damages arising from that breach, (b)
shall indemnify the Releasees and their agents and affiliates for and from any
and all liability, loss, cost or expense (including but not limited to
reasonable attorneys' fees) resulting from the breach, and (c) shall forfeit any
moneys and shares that have been, or will be, received pursuant to this
Agreement. The parties hereby stipulate that the above provisions of this
paragraph do not constitute a penalty and waive any right to make such a claim.
If any of the persons or entities bound by this paragraph discloses this
Agreement or any of its terms to any other person as required by law, then the
person or entity making the disclosure shall inform the other person to whom the
information was disclosed that the Agreement and its terms are confidential and
must not be disclosed by the other person.
9. The Releasors make the following warranties and covenants concerning
their right to settle and release their claims: the Releasors warrant that they
have not voluntarily or involuntarily transferred, conveyed, pledged, assigned,
or made any other disposition of the rights, claims, interests, actions, causes
of action, obligations, or any other matter being released by this Agreement,
and that they have the full power and right to accept the consideration for this
Agreement and to give the releases and agreements set forth herein. The
Releasors represent and warrant that there are no other persons or entities,
including but not limited to former or existing spouses of the Releasors, who
possess any potential claim for damages against the Releasees or their agents,
representatives, corporate parents, affiliates, subsidiaries, divisions,
officers, directors, shareholders, employees, attorneys, heirs, survivors,
executors, administrators, successors, and assigns, arising out of or relating
to the causes of action, claims, or demands released in this Agreement, or who
must sign, approve, or consent to this Agreement in order for the Releasees to
obtain complete releases from the claims as stated above.
10. In connection with this Settlement and Release, the Parties each
acknowledge that additional facts may be discovered later, but that it is the
intention of each Party to fully, finally and forever settle and release all
matters and any related claims, known or unknown, suspected or unsuspected,
which now exist, may exist, or formerly have existed between Parties. The
Parties acknowledge that this Agreement shall and will remain in effect as a
full and complete general release of all matters, notwithstanding the discovery
or existence of any additional or different facts. The Releasors acknowledge
that they assume the risk of any mistake of fact or law with regard to all
aspects of this Agreement and any asserted rights released by this Agreement.
RELEASORS AND RELEASEES ACKNOWLEDGE THAT THEY HAVE READ THIS AGREEMENT, AND
THAT THEY FULLY KNOW, UNDERSTAND AND APPRECIATE ITS CONTENTS AND THAT THEY
EXECUTE THE SAME AND MAKE THE SETTLEMENT PROVIDED FOR HEREIN VOLUNTARILY AND OF
THEIR OWN FREE WILL.
11. This Settlement Agreement shall be governed by, subject to, and
construed in accordance with the internal laws of the State of New York without
regard to its choice of law or conflicts rules or provisions.
12. The Parties acknowledge that this Agreement is the entire agreement
between and among them and that there are no terms, agreements, representations,
warranties, promises, inducements, or understandings, oral or otherwise, except
as expressly stated herein; that this Agreement contains the entire agreement
between the Releasors and the Releasees and that the terms of the Release are
contractual and not mere recitals; and that this Agreement may not be amended or
modified in any respect except by a written instrument duly executed by all the
parties to this Agreement.
13. If any portion or term of this Agreement is held unenforceable by a
court of competent jurisdiction, the remainder of this Agreement shall not be
effected and shall remain fully in force and enforceable.
14. This Agreement may be pleaded as a full and complete defense to any
action, suit, arbitration, or other proceeding that may be instituted,
prosecuted, or attempted with respect to any of the claims released hereby. The
Releasors agree that any such proceeding would cause irreparable injury to the
Releasees and that any court of competent jurisdiction may enter an injunction
restraining prosecution thereof. The Releasors further agree that this Agreement
may be pleaded as necessary for the purpose of enforcing this Agreement in
court.
15. The Parties consent to have any dispute concerning this Agreement heard
in the Federal District Court for the Southern District of New York located in
the County of Westchester, State of New York.
16. This Agreement may be executed in one or more counterparts and by
telecopier and shall be effective as between the parties when so executed
provided that the party executing this stipulation by telecopier agrees to
provide the others with signed counterpart by overnight courier. A set of
counterpart copies which collectively contains the signature and acknowledgment
of all parties shall constitute an original.
17. The parties through counsel agree to execute stipulations of
discontinuance with prejudice and without costs necessary to effect a dismissal
of the Action.
18. This Stipulation may be, but shall not be required to be submitted to
the court to be "so ordered", but whether or not "so ordered" by the court shall
be deemed to constitute and have the effect of an order in this proceeding as
between the parties, and shall be enforceable as such.
19. The shares to be delivered to the Releasees are to be issued out of the
shares of stock currently held by John T. Ruocco, Michael T. Sylvester, Robert
B. Whitney, Steven A. Martello and Leon Pasqua and others.
20. This Agreement shall be held in escrow and not be delivered and
effective until Releasors have delivered share certificates, stock powers,
letter of authorization, the consents of AIC and the underwriter, opinions of
counsel and such other documentation necessary to deliver to the Escrow Agent
share certificates in good deliverable form necessary to effectuate the
transfer, issuance and delivery contemplated under paragraph "1.a" and "1.b".
IN WITNESS WHEREOF, this Agreement is executed as follows:
/s/ Albert Pace
ALBERT PACE
State of New York )
)ss.:
County of Orange )
Before me personally appeared Albert Pace known to me to be the person
whose name is subscribed to the foregoing instrument and he acknowledged to me
that he executed the same.
Sworn and subscribed before me this 27th day of February, 1997.
/s/ Howard Protter
Notary Public
/s/ Jan Polek
JAN POLEK
State of New Jersey )
)ss.:
County of Morris )
Before me personally appeared Jan Polek known to me to be the person whose
name is subscribed to the foregoing instrument and he acknowledged to me that he
executed the same.
Sworn and subscribed before me this 27th day of February, 1997.
/s/ Mariann G. Werp
Notary Public
ALCOHOL SENSORS
INTERNATIONAL, LTD.
By /s/ Robert B. Whitney
Robert B. Whitney, its President
State of New York )
)ss.:
County of Nassau )
Before me personally appeared Robert B. Whitney known to me to be the
person whose name is subscribed and acknowledged to me that the same was an act
of Alcohol Sensors International, Ltd., a New York corporation, and that he
executed the same for the purposes and consideration therein expressed as the
act and deed of said corporation, and that he is authorized to execute same by
order of the Board of Directors of said corporation.
Sworn and subscribed before me this 27th day of February, 1997.
/s/ Joseph M. Lively
Notary Public
/s/ John T.Ruocco
JOHN T. RUOCCO
State of New York )
)ss.:
County of Nassau )
Before me personally appeared John T. Ruocco known to me to be the person
whose name is subscribed to the foregoing instrument and he acknowledged to me
that he executed the same.
Sworn and subscribed before me this 27th day of February, 1997.
/s/ Joseph M. Lively
Notary Public
/s/ Michael A. Sylvester
MICHAEL A. SYLVESTER
State of New York )
)ss.:
County of Nassau )
Before me personally appeared Michael A. Sylvester known to me to be the
person whose name is subscribed to the foregoing instrument and he acknowledged
to me that he executed the same.
Sworn and subscribed before me this 27th day of February, 1997.
/s/ Joseph M. Lively
Notary Public
/s/ Robert B. Whitney
ROBERT B. WHITNEY
State of New York )
)ss.:
County of Nassau )
Before me personally appeared Robert B. Whitney known to me to be the
person whose name is subscribed to the foregoing instrument and he acknowledged
to me that he executed the same.
Sworn and subscribed before me this 27th day of February, 1997.
/s/ Joseph M. Lively
Notary Public
/s/ Steven A. Martello
STEVEN A. MARTELLO
State of New York )
)ss.:
County of Nassau )
Before me personally appeared Steven A. Martello known to me to be the
person whose name is subscribed to the foregoing instrument and he acknowledged
to me that he executed the same.
Sworn and subscribed before me this 27th day of February, 1997.
/s/ Joseph M. Lively
Notary Public
/s/ Leon Pasqua
LEON PASQUA
State of New York )
)ss.:
County of Suffolk )
Before me personally appeared Leon Pasqua known to me to be the person
whose name is subscribed to the foregoing instrument and he acknowledged to me
that he executed the same.
Sworn and subscribed before me this 27th day of February, 1997.
/s/ Joseph M. Lively
Notary Public