-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Fbm9tktY4SdrWfSUDBrXWuKjlhsn9Cr9ClwEmfnAwfdQkVNZADdmC56WPO89+TQn xHhRuRhpaHKYHzha21siaQ== 0000910680-96-000148.txt : 19960603 0000910680-96-000148.hdr.sgml : 19960603 ACCESSION NUMBER: 0000910680-96-000148 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19960531 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: COIN BILL VALIDATOR INC CENTRAL INDEX KEY: 0000933020 STANDARD INDUSTRIAL CLASSIFICATION: CALCULATING & ACCOUNTING MACHINES (NO ELECTRONIC COMPUTERS) [3578] IRS NUMBER: 112974651 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-46009 FILM NUMBER: 96575389 BUSINESS ADDRESS: STREET 1: 425B OSER AVE CITY: HAUPPAUGE STATE: NY ZIP: 11788 BUSINESS PHONE: 5162311177 MAIL ADDRESS: STREET 1: 425 B OSER AVENUE CITY: HAUPPAUGE STATE: NY ZIP: 11788 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ODYSSEY FINANCIAL CO CENTRAL INDEX KEY: 0001015390 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NY FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 20 EAST SUNRISE HIGHWAY CITY: VALLEY STREAM STATE: NY ZIP: 11581 BUSINESS PHONE: 5168870491 MAIL ADDRESS: STREET 1: 20 EAST SUNRISE HIGHWAY CITY: VALLEY STREAM STATE: NY ZIP: 11581 SC 13D 1 STEPHEN KATZ - ODYSSEY FINANCIAL COMAPNY SC13D OMB APPROVAL ---------------------------- OMB Number: 3235-0145 Expires: October 31, 1997 Estimated average burden hours per response.....14.90 ---------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO.___ )* COIN BILL VALIDATOR, INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 192583102 --------------------------------------------------- (CUSIP Number) Mr. Stephen Katz Odyssey Financial Company 20 East Sunrise Highway, Suite 200, Valley Stream, New York 11581 (516) 887-0491 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 23, 1996 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. CHECK THE FOLLOWING BOX IF A FEE IS BEING PAID WITH THE STATEMENT [X]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class. See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SEC 1746 (12-91) SCHEDULE 13D ================================================================================ CUSIP NO. 192583102 PAGE __ OF __ PAGES ================================================================================ 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Odyssey Financial Company - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York State - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 0 OWNED BY EACH --------------------------------------------------------------- REPORTING PERSON 8 SHARED VOTING POWER WITH 0 --------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 200,000 --------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 200,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- SCHEDULE 13D ================================================================================ CUSIP NO. 192583102 PAGE __ OF __ PAGES ================================================================================ 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Stephen Katz - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* Not applicable. - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 835,220 OWNED BY EACH --------------------------------------------------------------- REPORTING PERSON 8 SHARED VOTING POWER WITH 0 --------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 --------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 835,220 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 30.4% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- CUSIP No. 192583102 ITEM 1. SECURITY AND ISSUER. The class of equity securities to which this statement relates consists of the common shares, par value $.01 per share (the "Common Shares"), of Coin Bill Validator, Inc., a New York corporation (the "Company"). The address of the Company's principal executive offices is 425B Oser Avenue, Hauppauge, New York 11788. ITEM 2. IDENTITY AND BACKGROUND. The name of the persons filing this statement are Odyssey Financial Company ("Odyssey") and Stephen Katz ("Katz"). Odyssey is a general partnership formed under the laws of the State of New York. Odyssey's principal business is investing in securities. The address of Odyssey's principal business and principal office is 20 East Sunrise Highway, Suite 200, Valley Stream, New York 11581. Odyssey has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). Odyssey has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which it was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Katz is a partner of Odyssey and the voting trustee with respect to the Common Shares owned by Odyssey and certain other persons. See Items 4, 5 and 6 below. The following information is provided with respect to Katz and each other partner of Odyssey (each, a "Partner" and together, the "Partners"): (i) (a) Name of Partner: Stephen Katz (b) Katz's business address is 20 East Sunrise Highway, Suite 200, Valley Stream, New York 11581. (c) Katz's principal occupation is Chairman of the Board and Chief Executive Officer of Cellular Technical Services Company, Inc. ("CTS"), 2401 Fourth Avenue, Seattle, Washington 98121. CTS develops, markets, installs and supports integrated real-time information systems, including authentication and service metering technology, for the global wireless communications industry. (d) Katz has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). CUSIP No. 192583102 (e) Katz has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which he was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Katz is a United States citizen. (ii) (a) Name of Partner: Eileen Katz ("Eileen") (b) Eileen's business address is 20 East Sunrise Highway, Suite 200, Valley Stream, New York 11581. (c) Eileen's principal occupation is housewife. (d) Eileen has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) Eileen has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which she was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Eileen is a United States citizen. (iii) (a) Name of Partner: Ian David Katz ("Ian") (b) Ian's address is 1835 Corcoran Street, N.W., Apt. C, Washington, D.C. 20009. (c) Ian is an attorney whose present principal employment is as law clerk to Honorable Eric G. Bruggink, United States Court of Claims, The National Courts Building, 717 Madison Place, Washington, D.C. 20005. (d) Ian, has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) Ian has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which he was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. CUSIP No. 192583102 (f) Ian is a United States citizen. (iv) (a) Name of Partner: Ross Howard Katz ("Ross") (b) Ross's business address is 20 East Sunrise Highway, Suite 200, Valley Stream, New York 11581. (c) Ross is a full-time student. (d) Ross has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) Ross has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which he was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Ross is a United States citizen. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The entire amount of the purchase price for the 200,000 Common Shares purchased by Odyssey from the Joseph Vogel Revocable Trust (the "Trust") was $1,020,000, which amount was provided from Odyssey's working capital. No other funds or other consideration was provided by any Partner (other than through capital contributions to Odyssey in respect of such Partner's partnership interest in Odyssey) for use in such purchase. ITEM 4. PURPOSE OF TRANSACTION. The purpose of the transaction was for (a) Odyssey to acquire a substantial equity stake in the Company through the purchase of 200,000 Common Shares from the Trust; (b) Katz to obtain, subject to certain conditions, sole voting control over 200,000 Common Shares owned by Odyssey (which were acquired from the Trust in the subject transaction), 340,020 Common Shares which were retained by the Trust and 295,200 Common Shares owned by Joan Vogel ("Vogel"), the Chairman of the Board of the Company; (c) Katz to be elected to the Company's board of directors and to serve as Vice Chairman of the Board and Chief Executive Officer of the Company; and (d) three (3) additional directors, such persons to be designated by Katz, to be elected to the Company's board of directors. In addition, Katz may, subject to certain conditions, purchase up to 200,000 Common Shares upon the exercise of options (which become exercisable in installments beginning March 19, 1997) granted to him under the Company's stock option plans. The Company's management, the Trust, Vogel and Odyssey intend that Katz will assume CUSIP No. 192583102 an active role in the management and affairs of the Company, including strategic planning, executive policy-making and the formulation and implementation of business growth and operations. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) The number of Common Shares beneficially owned by Odyssey is 200,000, comprising 7.3% of the outstanding Common Shares. The number of Common Shares beneficially owned by Katz is 835,220, comprising 30.4% of the outstanding Common Shares. No other Partner beneficially owns (other than by reason of such Partner's partnership interest in Odyssey) any Common Shares. (b) The number of Common Shares as to which Katz has sole voting power is 835,220, of which Odyssey has sole dispositive power as to 200,000 Common Shares. Neither Odyssey nor Katz (other than by reason of Katz's partnership interest in Odyssey) has sole or shared voting power or sole or shared dispositive power with respect to any other Common Shares. No Partner, other than Katz, has (other than by reason of such Partner's partnership interest in Odyssey) sole or shared voting power or sole or shared dispositive power with respect to any Common Shares. (c) Effective as of March 19, 1996, the Company granted to Katz: (i) an incentive stock option under the Company's 1994 Stock Option Plan to purchase on or before March 18, 2001 at an exercise price of $6.00 per share up to 50,000 Common Shares (subject to certain anti-dilution adjustments), vesting as to 16,666 shares, 16,666 shares and 16,668 shares on March 19, 1997, 1998 and 1999, respectively; (ii) a non-qualified stock option under the Company's 1994 Stock Option Plan to purchase on or before March 18, 2001 at a excise price of $6.00 per shares up to 50,000 Common Shares (subject to certain anti-dilution adjustments), vesting as to 16,666 shares, 16,666 shares and 16,668 shares on March 19, 1997, 1998 and 1999, respectively; and (iii) a non-qualified stock option under the Company's 1996 Stock Option Plan to purchase on or before March 18, 2001 at a purchase price of $6.60 per share up to 100,000 Common Shares (subject to certain anti-dilution adjustments), vesting as to 33,333 shares, 33,333 shares and 33,334 shares on March 19, 1997, 1998 and 1999, respectively. The foregoing description of these options is a summary only and is qualified in its entirety by reference to the respective option agreements between the Company and Katz which are included as exhibits hereto (see Item 7. Exhibits (e), (f) and (g)). No other transactions in the Common Shares were effected during the past 60 days by Odyssey or any Partner (except for the transactions described in the first sentence of Item 4). CUSIP No. 192583102 (d) Odyssey has the right to receive and the power to direct the receipt of dividends from, and the proceeds from the sale of, 200,000 Common Shares as to which Katz exercises sole voting power. The Trust has the right to receive and the power to direct the receipt of dividends from, and the proceeds from the sale of, 340,020 Common Shares as to which Katz exercises sole voting power. Vogel has the right to receive and the power to direct the receipt of dividends from, and the proceeds from the sale of, 295,200 Common Shares as to which Katz exercises sole voting power. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Katz entered into an agreement with the Company (see Exhibit 7(a)) providing for Katz (a) to be elected as a director of the Company, to be appointed as Vice Chairman of the Board and to be employed as Chief Executive Officer of the Company, and (b) three (3) additional persons (to be designated by Katz) to be elected as directors of the Company by the Company's board of directors. Odyssey entered into an agreement with the Trust (see Exhibit 7(b)) pursuant to which it purchased 200,000 Common Shares from the Trust at a price of $5.10 per share, or an aggregate purchase price of $1,020,000. At the same time, Odyssey, Vogel, the Trust and Katz entered into a Voting Trust Agreement (see Exhibit 7(c)) pursuant to which Odyssey, Vogel and the Trust appointed Katz as their voting trustee and transferred to the voting trust of which he is acting as trustee, all of the Common Shares severally owned by Odyssey, Vogel and the Trust, so that Katz, as voting trustee, has the sole power to vote the Common Shares held by them until May 22, 1998, or, if earlier, such date as Vogel ceases to be a director of the Company. In addition, the Company entered into an agreement with Vogel (see Exhibit 7(d)) pursuant to which Vogel agreed to resign as a director and that her employment agreement with the Company shall terminate if (a) the closing sale price of the Common Shares on the Nasdaq National Market equals or exceeds $10 on any 20 trading days and (b) Katz shall have served as Chief Executive Officer of the Company throughout the period ending on such 20th day. The foregoing description of these agreements is a summary only and is qualified in its entirety by reference to the respective agreements, each of which is included as an exhibit hereto. Except as described above, there are no contracts, arrangements, understandings or relationships with respect to the Common Shares to which any Partner (other than by reason of such Partner's partnership interest in Odyssey) is a party or is subject. CUSIP No. 192583102 ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. (a) Letter agreement dated May 23, 1996 between the Company and Katz relating to the election of Katz to the Company's Board of Directors and to the election of certain additional directors to be designated by him. (b) Letter agreement dated May 23, 1996 between Odyssey and the Trust relating to the purchase of 200,000 Common Shares. (c) Voting Trust Agreement dated May 23, 1996 among Odyssey, Vogel, the Trust and Katz, as voting trustee, relating to the voting of the Common Shares owned by them. (d) Letter agreement dated May 23, 1996 between the Company and Vogel relating to Vogel's resignation as a director and termination of her employment agreement. (e) Incentive Stock Option Agreement under the Company's 1994 Stock Option Plan dated as of March 19, 1996 between the Company and Katz. (f) Non-Qualified Stock Option Agreement under the Company's 1994 Stock Option Plan dated as of March 19, 1996 between the Company and Katz. (g) Non-Qualified Stock Option Agreement under the Company's 1996 Stock Option Plan dated as of March 19, 1996 between the Company and Katz. (h) Letter agreement dated May 23, 1996 between Odyssey and Katz as to the joint filing of this statement. After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: May 23, 1996 ODYSSEY FINANCIAL COMPANY By: /s/ Stephen Katz --------------------------------- Stephen Katz, General Partner By: /s/ Stephen Katz --------------------------------- Stephen Katz EX-7 2 EX.7(A) Exhibit 7(a) COIN BILL VALIDATOR, INC [Letterhead] May 24, 1996 Mr. Stephen Katz 20 East Sunrise Highway Valley Stream, NY 11581 Dear Mr. Katz: Coin Bill Validator, Inc., a New York corporation (the "Company") is hereby offering you employment as Chief Executive Officer and you are also becoming Vice Chairman of the Board of Directors of the Company. Resolutions duly adopted by the Company electing you to the Board of Directors and appointing you Vice Chairman of the Board and Chief Executive Officer are annexed hereto. The Company shall hereafter use its best efforts to promptly cause such action to be taken as is required to increase the size of the entire board of directors from six to nine and to elect to each new directorship a person designated by you, provided that such person is reasonably acceptable to the Company. You shall furnish to the board of directors reasonably detailed biographical information (including the information that would be required to be disclosed pursuant to Regulation S-K under the Securities Act of 1933) about each person designate so to be elected to the board. The Company shall use its best efforts to promptly cause the board of directors to elect each person so designated by you as a director of the Company, unless the board determines in good faith that such person is ineligible or unsuitable for such office, in which case, the board shall within two business days of the date of such determination provide you written notice of such determination setting forth in reasonable detail the basis for the ineligibility or unsuitability of such person to serve as a director. If any person so designated by you is not elected to be a director of the Company based on such a determination, you shall have the right to designate another person in lieu of the first person so designated until three persons designated until three persons designated by you are elected as directors of the Company. Page 1 of 3 Stephen Katz (Cont'd) As an executive employee of the Company you shall be paid a salary at the rate of $150,000 per year (less all required withholdings and other deductions), payable in accordance with the Company's normal payroll practices. You will herefore be eligible for all other associated fringe benefits. You agree that you will devote such time (which need not be your full time) as is necessary to carry out your duties as CEO in the establishment of Strategic Planning as it related to business growth and operations. Traditional terms of employment agreements will apply to such things as expenses; basis of termination; nondisclosure; non-competition; successors; amendment; New York State Law being applicable; serviceability of covenants; and remedies will apply. Specific copy regarding those issues will be provided to you by the Company's President for approval in the near future. Until such time as otherwise agreed to the period of employment is year-to-year or as the board deems appropriate and nothing herein should limit in any way the Company's right to terminate employment at any time. In connection with your employment services as of March 19, 1996 and future continuing services of employment an option for a period of five years, to purchase (a) under our 1994 Stock Option Plan 100,000 shares of the Common Stock of the Company at $6.00 (which is equal to the fair market value of the Common Stock as of March 19, 1996) and (b) subject to the approval of Shareholders of the Company of the 1996 Stock Option Plan, 100,000 shares of the Common Stock of the Company at $6.60 (which is equal to 110% of the fair market value of the Common Stock, as of March 19, 1996. Such options shall vest at the rate of 33 1/3% per year beginning one year after the date of employment (i.e., beginning one year after the date of your employment you may exercise up to 33 1/3% of your options, beginning two years after the date of your employment you may exercise up to 66 2/3% of your options, etc.) All options will be incentive stock options to the maximum extent permissible by law and to the extent not so permissible shall be non-qualified stock options and shall have such other terms as will be set forth in the option agreements between yourself and the Company, which will be executed on an immediate basis. Page 2 of 3 Stephen Katz (Cont'd) As part of this agreement, I as President/CEO agree to relinquish my office of CEO to you, effective upon your acceptance of same. My office of President will then also encompass full control of the day-to-day operations of the companies business as the Chief Operating Officer. Resolutions attached hereto duly reflect same. Sincerely and Respectfully, /s/ William H. Wood ------------------------------ William H. (Bill) Wood President/CEO Agreed to and Accepted by: /s/ Stephen Katz - ------------------------------ Stephen Katz May 24, 1996 - ------------------------------ Date of Approval Page 3 of 3 EX-7 3 EX. &(B) Exhibit 7(b) ODYSSEY FINANCIAL COMPANY 20 East Sunrise Highway Valley Stream, NY 11581 May 23, 1996 Joseph Vogel Revocable Trust c/o Joan Vogel 425-B Oser Avenue Hauppauge, New York 11788 Attention: Joan Vogel, Trustee Re: COIN BILL VALIDATOR, INC. (THE "COMPANY') ----------------------------------------- Gentlemen: 1. The undersigned is hereby purchasing from the Joseph Vogel Revocable Trust (the "Trust") 200,000 shares of Common Stock of the Company, par value $.01 per share (the "Shares"), at a purchase price of $5.10 per share. Concurrently herewith, the undersigned is delivering to the Trust a check in the amount of $1,020,000 as payment in full for the Shares. 2. The Trust is hereby selling, assigning and transferring the Shares to the undersigned and is delivering stock certificates representing the Shares, duly endorsed for transfer. 3. The Trust represents and warrants that it owns the shares of record solely for the benefit of the Trust beneficiaries, free and clear of any liens, encumbrances, claims or adverse interests and that upon payment therefor, the undersigned will be the owner of the Shares, free and clear of all liens, claims, encumbrances and adverse interests. 4. The undersigned represents and warrants to the Trust that the undersigned is acquiring the Shares for the undersigned's own account for investment and not with a view toward the resale or redistribution thereof, and the undersigned does not now have any reason to anticipate any change in the undersigned's circumstances or any other particular occasion or event that would cause the undersigned to be required to sell any of the undersigned's Shares. Joseph Vogel Revocable Trust May 31, 1996 Page 2 5. The undersigned understands the meaning and legal consequences of the representations and warranties contained herein and shall indemnify and hold harmless the Company and the Trust from and against any and all loss, damage or liability due to or arising out of a breach of any representation or warranty of the undersigned contained in this Agreement. 6. The undersigned understands that (a) none of the Shares have been registered under the Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of certain states in reliance on specific exemptions from registration thereunder, (b) no securities administrator or any state or federal government has made any finding or determination relating to the fairness for investment in the Shares, and (c) no securities administrator of any state or the federal government has nor will recommend or endorse any offering of the Shares. 7. The undersigned understands that (a) because neither the offer nor sale of the Shares has been registered under the Securities Act or the securities laws of certain states, the Shares may not be sold, assigned, pledged or otherwise disposed of unless they are so registered or an exemption from such registration is available, and (b) it may not be possible for the undersigned to liquidate any investment in the Shares in an emergency or otherwise. 8. Each party shall promptly execute, deliver, file or record such agreements, instruments, certificates and other documents and perform such other and further acts as the other party hereto may reasonably request or necessary to consummate and perfect the transactions contemplated hereby. 9. All representations and warranties set forth above or in any other written statement or document delivered by the undersigned in connection with the transactions contemplated hereby shall be true and correct in all respects on and as of the date hereof and shall survive the date hereof. Joseph Vogel Revocable Trust May 31, 1996 Page 3 Kindly confirm our agreements below. Very truly yours, ODYSSEY FINANCIAL COMPANY By: /S/ STEPHEN KATZ ------------------------ Stephen Katz, General Partner AGREED: JOSEPH VOGEL REVOCABLE TRUST By: /S/ JOAN VOGEL -------------------------- Joan Vogel, Trustee By: /S/ MURRAY SILVER -------------------------- Murray Silver, Trustee EX-7 4 EX. 7(C) VOTING TRUST AGREEMENT This Voting Trust Agreement dated as of May 23, 1996 by and among Odyssey Financial Company ("Odyssey"), Joan Vogel ("Vogel"), the Joseph Vogel Revocable Trust (the "Trust", and together with Odyssey and Vogel, the "Shareholders"), and Stephen Katz, as voting trustee (the "Trustee"). W I T N E S S E T H : WHEREAS, each Shareholder owns the number of common shares, par value $.01 per share (the "Common Shares"), of Coin Bill Validator, Inc., a New York corporation (the "Company"), set forth opposite such Shareholder's name on the signature page hereof; and WHEREAS, the Shareholders desire to provide for the voting of the Common Shares owned by them (the "Shares") jointly and in a consistent manner so as to promote and expedite the management of the Company; NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows: 1. The Shareholders hereby declare and establish a Voting Trust for the benefit of the Shareholders, and appoint the Trustee as the trustee of the Voting Trust. The Trustee hereby accepts such appointment; provided, however, that the Trustee may resign such appointment at any time hereafter upon five (5) days prior written notice given to each Shareholder. 2. Concurrently herewith, each Shareholder is assigning the Shares owned by such Shareholder to the Trustee to hold IN TRUST for the benefit of such Shareholder, subject to the terms and conditions hereof; and such Shareholder is delivering to the Trustee a certificate or certificates, duly endorsed for transfer to, or accompanied by duly executed stock powers in favor of, the Trustee. The Shareholders and the Trustee shall give appropriate notice and take such other actions as may be necessary or appropriate to cause such assignment to be recorded on the stock records of the Company or its registrar and transfer agent. The Trustee shall surrender the certificates so delivered to him to the Company or its transfer agent and shall obtain in lieu thereof certificates representing the Shares owned by the respective Shareholders, each registered in the name of the Trustee. 3. The Trustee shall issue and deliver to each Shareholder a voting trust certificate, substantially in the form of Exhibit A hereto (each, a "Trust Certificate") in respect of the Shares delivered to the Trustee by such Shareholder. The Trustee shall maintain a written record of the issuance of each Trust Certificate, and any transfer thereof (except as provided in Section 4 below), which record shall set forth the name and address of each holder of a Trust Certificate, the number of Shares represented thereby and the date such Trust Certificate is issued. Each Trust Certificate shall be transferable only on the records of the Trustee by the holder thereof in person or by such holder's attorney upon the surrender thereof, duly endorsed for transfer or accompanied by an appropriate instrument of transfer, in form and substance reasonably acceptable to the Trustee. Upon such transfer and surrender, a new Trust Certificate shall be issued to the transferee, who shall be, by such transferee's acceptance thereof, bound by the provisions of this Agreement, as fully to all intents and purposes as if such transferee executed the same. 4. Anything herein to the contrary notwithstanding, at any time or from time to time any Shares may be withdrawn from the Voting Trust, and sold, assigned or otherwise transferred by any Shareholder (or subsequent holder of a Trust Certificate) to any other person, provided that as a result of such sale, assignment or other transfer, the Shareholder (or subsequent holder of a Trust Certificate) shall not retain any direct or indirect interest in or control over such Shares. In any such case, the Trustee shall, on behalf and for the benefit of such Shareholder (or subsequent holder of a Trust Certificate), cause the Shares so sold, assigned or transferred to be transferred on the records of the Company or its registrar and transfer agent and shall deliver the certificate representing such Shares, duly endorsed for transfer to, or accompanied by a duly executed stock power or in favor of, the transferee of such Shareholder (or subsequent holder of a Trust Certificate). If fewer than all the Shares initially delivered to the Trustee are so sold, assigned or transferred, the Trustee shall issue and deliver a new Trust Certificate to such Shareholder (or subsequent holder of a Trust Certificate) representing the remaining Shares held by the Trustee for the benefit of such Shareholder (or subsequent holder of a Trust Certificate). 5. The Voting Trust shall continue in effect until the earliest of (a) May 22, 1998 or (b) the date upon which Vogel ceases to be a director of the Company or (c) such time, if any, as all of the Shares delivered to the Trustee are transferred out of the Voting Trust pursuant to Section 4 above or (d) the date that the Trustee ceases to be employed by the Company or (e) the death of Vogel, or (f) upon the entering of an order from a court of competent jurisdiction directing Vogel to terminate this Voting Trust, or (f) upon the resignation of the Trustee, if the Shareholders do not (acting in their sole and absolute discretion), within five (5) days of such resignation, agree upon and appoint a successor voting trustee. 6. The Trustee is hereby fully authorized and empowered to, and the Trustee shall, vote the Shares in such manner as in the Trustee's sole judgment shall be in the best common interest of the Shareholders (or any subsequent holders of Trust Certificates) at any meeting of shareholders of the Company or in connection with any written consent thereof. In all matters other than matters arising in the ordinary course of the business of the Company, the Trustee shall consult with Vogel before taking any action with respect thereto. 7. The Trustee shall receive and hold IN TRUST for the benefit of the Shareholders (or any subsequent holders of Trust Certificates) any dividends or other distributions upon or in respect of the Shares and shall allocate and distribute the same to the Shareholders (or -2- any subsequent holders of Trust Certificates) in proportion to the respective number of Shares represented by the Trust Certificates held thereby. 8. The Trustee shall be fully indemnified against any loss, liability, expense or other costs suffered or incurred by the Trustee in his capacity as such hereunder. The Shareholders (and any subsequent holders of Trust Certificates) shall promptly reimburse the Trustee for any funds expended or costs incurred by the Trustee hereunder. 9. Miscellaneous. a. Limitation of Authority. No provision hereof shall be deemed to create any partnership, joint venture or joint enterprise or association among the parties hereto, or, except as hereinabove provided, to authorize or to empower any party hereto to act on behalf of or obligate any other party hereto. b. Notices. Any notice hereunder to or upon any party hereto required or permitted to be given hereunder shall be deemed to have been duly given for all purposes if (a) in writing and sent by (i) messenger or an overnight courier service against receipt, or (ii) certified or registered mail, postage paid, return receipt requested, or (b) sent by telegram, telecopy, telex or similar electronic means, provided that a written copy thereof is sent on the same day by postage paid first-class mail, to such party at the following address: To Odyssey: c/o Stephen Katz 20 East Sunrise Highway Valley Stream, New York 11581 Fax: (516) 887-0498 To Vogel: 400 East 56th Street New York, New York 10022 Fax: (516) 434-1771 To the Trust: Joan Vogel, Trustee 400 East 56th Street New York, New York 10022 Fax: (516) 434-1771 and Murray Silver, Trustee 175 Lefferts Boulevard Woodmere, New York ll598 -3- To the Trustee: 20 East Sunrise Highway Valley Stream, New York 11581 Fax: (516) 887-0498 or such other address as any party hereto may at any time, or from time to time, direct by notice given to the other parties in accordance with this Section. The date of giving of any such notice shall be, in the case of clause (a)(i), the date of the receipt; in the case of clause (a)(ii), five business days after such notice is sent; and, in the case of clause (b), the business day next following the date such notice is sent. c. Amendment. Except as otherwise provided herein, no amendment of this Agreement shall be valid or effective, unless in writing and signing by or on behalf of the parties hereto. d. Governing Law. This Agreement shall be governed by, and interpreted and enforced in accordance with, the laws of the State of New York without regard to principles of choice of law or conflict of laws. e. Jurisdiction. Each of the parties hereto hereby irrevocably consents and submits to the jurisdiction of the Supreme Court of the State of New and the United States District Court for the Southern District of New York in connection with any suit, action or other proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, waives any objection to venue in New York County, State of New York, or such District and agrees that service of any summons, complaint, notice or other process relating to such proceeding may be effected in the manner provided by clause (a)(ii) of Section 9(b). f. Remedies. In the event of any actual or prospective breach or default by any party hereto, the other parties shall be entitled to equitable relief, including remedies in the nature of rescission, injunction and specific performance. All remedies hereunder are cumulative and not exclusive, and nothing herein shall be deemed to prohibit or limit any party from pursuing any other remedy or relief available at law or in equity for such actual or prospective breach or default, including the recovery of damages. g. Severability. The provisions hereof are severable and in the event that any provision of this Agreement shall be determined to be invalid or unenforceable in any respect by a court of competent jurisdiction, the remaining provisions hereof shall not be affected, but shall, subject to the discretion of such court, remain in full force and effect, and any invalid or unenforceable provision shall be deemed, without further action on the part of the parties hereto, amended and limited to the extent necessary to render the same valid and enforceable. h. Further Assurances. Each party hereto shall execute, deliver, file or record such agreements, instruments, certificates and other documents and perform such other and -4- further acts as any other party hereto may reasonably request or as may otherwise be necessary or proper to consummate and perfect the transactions contemplated hereby. i. Assignment. This Agreement, and each right, interest and obligation hereunder, may not be assigned by any party hereto without the prior written consent of the other parties hereto, and any purported assignment without such consent shall be void and without effect. j. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement is not intended, and shall not be deemed, to create or confer any right or interest for the benefit of any person not a party hereto. IN WITNESS WHEREOF, the Shareholders and the Trustee have duly executed this Agreement as of the date set forth in the Preamble hereto. SHAREHOLDERS: NUMBER OF SHARES: ODYSSEY FINANCIAL COMPANY 200,000 By: /s/ Stephen Katz --------------------- Stephen Katz, General Partner Joan Vogel 295,200 - -------------------------- ------- Joan Vogel JOSEPH VOGEL REVOCABLE TRUST 340,020 ------- By: /s/ Joan Vogel --------------------- Joan Vogel, Trustee By: /s/ Murray Silver --------------------- Murray Silver, Trustee TRUSTEE: /s/ Stephen Katz --------------------- Stephen Katz -5- EXHIBIT A FORM OF VOTING TRUST CERTIFICATE COIN BILL VALIDATOR, INC. Voting Trust Certificate VT No. ______ No. of Shares _______ THIS CERTIFIES THAT [name of holder of Trust Certificate] is the beneficial owner of ____ common shares, par value $.01 per share (the "Common Shares"), of Coin Bill Validator, Inc., a New York corporation (the "Company"), that have been deposited with the undersigned voting trustee who holds the same IN TRUST for the benefit of such holder pursuant to the Voting Trust Agreement dated May 23, 1996 among certain shareholders of the Company and the voting trustee, a copy of which agreement is on file at the principal offices of the Company, 425B Oser Avenue, Hauppauge, New York 11788. This certificate and the interest represented hereby is transferable on the records of the voting trustee upon its surrender properly endorsed or accompanied by an appropriate instrument of transfer, subject to and in accordance with the provisions of said Voting Trust Agreement. The holder of this certificate holds the same subject to, and such holder's interest in the aforesaid Common Shares is in accordance with, the terms and conditions of said Voting Trust Agreement, to which such holder, by such holder's acceptance hereof, agrees to be bound. IN WITNESS WHEREOF, the undersigned voting trustee has duly executed this certificate on this ____ day of ________________, 199_. ----------------------------------- Stephen Katz, Voting Trustee EX-7 5 EX. 7(D) Exhibit 7(d) COIN BILL VALIDATOR, INC. 425-B Oser Avenue Hauppauge, New York 11788 May 23, 1996 Mrs. Joan Vogel Coin Bill Validator, Inc. 425-B Oser Avenue Hauppauge, New York 11788 Dear Ms. Vogel: Reference is made to that certain Employment Agreement, dated January 23, 1996, by and between you and Coin Bill Validator, Inc. (the "Company"). You and the Company hereby agree and acknowledge that such Employment Agreement shall terminate and no longer be of any force and effect in the event that and immediately upon both (i) the closing sale price of the common shares of the Company on the Nasdaq National Market equals or exceeds $10 for any 20 trading days commencing the date hereof, and (ii) Stephen Katz shall have acted as Chief Executive Officer throughout the period of time from the date hereof and ending on such 20th day (the "Termination"); PROVIDED, HOWEVER, that in no event shall the Termination occur prior to July 1, 1996. You shall resign as director of the Company not later than five business days following receipt of notice of the Termination. As of the date of such Termination neither you nor the Company shall have any obligation or liability to each other except for amounts accrued but not yet paid; PROVIDED, HOWEVER, the Company shall provide you with health insurance for the one year period commencing on the Termination. Kindly confirm our agreements below. Very truly yours, COIN BILL VALIDATOR, INC. By: /S/ WILLIAM H. WOOD ----------------------- Name: William H. Wood Title: AGREED: /S/ JOAN VOGEL - ---------------------------- Joan Vogel EX-7 6 EX. 7(E) Exhibit 7(e) COIN BILL VALIDATOR, INC. INCENTIVE STOCK OPTION AGREEMENT AS OF MARCH 19, 1996 COIN BILL VALIDATOR, INC., a New York corporation (the "Company"), pursuant to Section 5(a) of the Company's 1994 Stock Option Plan (the "Plan"), hereby grants to Stephen Katz (the "Optionee") an incentive stock option to purchase a total of 50,000 shares of the Company's Common Stock, par value $.01 per share ("Common Stock"), at the price of $6.00 per share on the terms and conditions set forth herein and in the Plan. This option is intended to be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). 1. DURATION. (a) This option was granted as of the date first above written. (b) This option shall expire at the close of business on March 18, 2001 (the "Termination Date"). 2. PRICE. The purchase price of 6.00 for each share of Common Stock upon exercise of this option is not less than the fair market value on the date hereof. 3. QUALIFICATION AS INCENTIVE STOCK OPTION. Those options that do not meet the criteria of incentive stock options, as defined in Section 422 of the Code, are non-qualified stock options, subject to Section 83 of the Code. 4. WRITTEN NOTICE OF EXERCISE. This option, to the extent it is exercisable as provided in Section 10 herein, may be exercised only be delivering to the Secretary of the Company, at its principal office within the time specified in Paragraph 1 or such shorter time as is otherwise provided for herein, a written notice of exercise substantially in the form described in Section 10. 5. ANTI-DILUTION PROVISIONS. (a) If there is any stock dividend or recapitalization resulting in a stock split, or combination or exchange of shares of Common Stock of the Company, the number of shares of Common Stock then subject to this option shall be proportionately and appropriately adjusted; no change shall be made in the aggregate purchase price to be paid for all shares subject to this option, but the aggregate purchase price shall be allocated among all shares subject to this option after giving effect to the adjustment; provided, however, that any fractional shares resulting from any such adjustment shall be eliminated. (b) If there is any other change in the Common Stock of the Company, including recapitalization, reorganization, sale or exchange of assets, exchange of shares, offering of subscription rights, or a merger or consolidation in which the Company is the surviving corporation, an adjustment, if any, shall be made in the shares then subject to this option as the Company's Board of Directors the ("Board") or the Compensation Committee of the Board (the "Committee") may deem equitable. Failure of the Board or the Committee to provide for an adjustment pursuant to this subparagraph prior to the effective date of any Company action referred to herein shall be conclusive evidence that no adjustment is required in consequence of such action. (c) If the Company is merged into or consolidated with any other corporation, or if it sells all or substantially all of its assets to any other corporation, then either (i) the Company shall cause provisions to be made for the continuance of this option after such event, or for the substitution for this option of an option covering the number and class of securities and/or cash or other property which the Optionee would have been entitled to receive in such merger or consolidation by virtue of such sale if the Optionee had been the holder of record of a number of shares of Common Stock of the Company equal to the number of shares covered by the unexercised portion of this option; provided, only that the excess of the aggregate fair market value of the shares 2 subject to the options immediately after such substitution over the purchase price thereof is not more than the excess of the aggregate fair market value of the shares subject to such options immediately before such substitution over the purchase price thereof, or (ii) the Company shall give to the Optionee written notice of its election not to cause such provision to be made and this option shall become exercisable in full (or, at the election of the Optionee, in part) at any time during a period of ten (10) days, to be designated by the Company, ending not more than ten (10) days prior to the effective date of the merger, consolidation or sale, in which case this option shall not be exercisable to any extent after the expiration of such ten (10) day period. In no event, however, shall this option be exercisable after the Termination Date. 6. INVESTMENT REPRESENTATION AND LEGEND OF CERTIFICATES. The Optionee agrees that until such time as a registration statement under the Securities Act of 1933, as amended, becomes effective with respect to the option and/or the stock, the Optionee is taking this option and will take the stock underlying this option, for investment and not for resale or distribution. The Company shall have the right to place upon the face of any stock certificate or certificates evidencing shares issuable upon the exercise of this option such legend as the Board on the Committee may prescribe for the purpose of preventing disposition of such shares in violation of the Securities Act of 1933, as amended. 7. NON-TRANSFERABILITY. This option shall not be transferable by the Optionee other than by will or by the laws of descent and distribution, and is exercisable during the lifetime of the Optionee only by the Optionee. 8. CERTAIN RIGHTS NOT CONFERRED BY OPTION. The Optionee shall not, by virtue of holding this option, be entitled to any rights of a stockholder in the Company. 9. EXPENSES. The Company shall pay all original issue and transfer taxes with respect to the issuance and transfer of shares of Common Stock of the Company pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith. 3 10. EXERCISE OF OPTIONS. (a) The amount of shares pursuant to this option that shall become exercisable are as follows: 16,666 shares commencing March 19, 1997; 16,666 shares commencing March 19, 1998; and 16,668 shares commencing March 19, 1999. (b) An option shall be exercisable by written notice of such exercise, in the form prescribed by the Board or the Committee, to the Secretary of the Company, at its principal office. The notice shall specify the number of shares for which the option is being exercised (which number, if less than all of the shares then subject to exercise, shall be 100 or a multiple thereof) and shall be accompanied by payment (i) in cash or by check of the amount of the full purchase price of such shares or (ii) in such other manner as the Board or the Committee shall deem acceptable. (c) No shares shall be delivered upon exercise of any option until all laws, rules and regulations which the Board or the Committee may deem applicable have been complied with. If a registration statement under the Securities Act of 1933, as amended, is not then in effect with respect to the shares issuable upon such exercise, the Company may require as a condition precedent that the person exercising the option give to the Company a written representation and undertaking, satisfactory in form and substance to the Board or the Committee, that such person is acquiring the shares for their own account for investment and not with a view to the distribution thereof. (d) The person exercising an option shall not be considered a record holder of the stock so purchased for any purpose until the date on which such person is actually recorded as the holder of such stock in the records of the Company. (e) This option shall be exercisable only so long as the Optionee shall continue to be an employee of the Company and within the three month period after the date of 4 termination of his employment to the extent it was exercisable on the date prior to the date of termination. Notwithstanding the foregoing, in no event shall this option be exercisable after the Termination Date. (f) Notwithstanding the provisions of Section 10(e) above, in the event the Optionee is unable to continue his employment with the Company as a result of his total and permanent disability (as defined in Section 105(d)(4) of the Internal Revenue Code of 1986, as amended), he may, but only within twelve (12) months from the date of disability, exercise this option to the extent he was entitled to exercise it at the date of such disability. Notwithstanding the foregoing, in no event shall this option be exercisable after the Termination Date. (g) Notwithstanding the provisions of Section 10(e) above, in the event of death of the Optionee: (i) during the term of this option who is at the time of his death an employee of the Company and who shall have been in Continuous Status (as defined in the Plan) as an employee since the date of grant of this option, this option may be exercised, at any time within twelve (12) months following the date of death, by the Optionee's estate or by a person who acquired the right to exercise this option by bequest or inheritance, but only to the extent of the right that would have accrued had the Optionee continued living one (1) month after the date of death; or (ii) within three (3) months after the termination of Continuous Status as an employee, this option may be exercised, at any time within three (3) months following the date of death, by the Optionee's estate or by a person who acquired the right to exercise the option by bequest or inheritance, but only to the extent of the right to exercise that had accrued at the date of termination. Notwithstanding the provisions of this Section (g), in no event shall this option be exercisable after the Termination Date. 5 11. CONTINUED EMPLOYMENT. Nothing herein shall be deemed to create any employment agreement or guaranty of continued employment or limit in any way the Company's right to terminate Optionee's employment at any time. COIN BILL VALIDATOR, INC. By: /S/ WILLIAM H. WOOD ----------------------- WILLIAM H. WOOD Accepted as of the date first set forth above. /S/ STEPHEN KATZ ---------------- STEPHEN KATZ 6 EX-7 7 EX. 7(F) Exhibit 7(f) COIN BILL VALIDATOR, INC. NON-QUALIFIED STOCK OPTION AGREEMENT AS OF MARCH 19, 1996 COIN BILL VALIDATOR, INC., a New York corporation (the "Company"), pursuant to Section 5(a) of the Company's 1994 Stock Option Plan (the "Plan"), hereby grants to Stephen Katz (the "Optionee") a non-qualified stock option to purchase a total of 50,000 shares of the Company's Common Stock, par value $.01 per share ("Common Stock"), at the price of $6.00 per share on the terms and conditions set forth herein and in the Plan. This option is intended to be a non-qualified stock option. This option is not intended to be, nor is it, an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). 1. DURATION. (a) This option was granted as of the date first above written. (b) This option shall expire at the close of business on March 18, 2001 (the "Termination Date"). 2. PRICE. The purchase price of 6.00 for each share of Common Stock upon exercise of this option is not less than the fair market value on the date hereof. 3. QUALIFICATION AS INCENTIVE STOCK OPTION. These options are non-qualified stock options, subject to Section 83 of the Code. 4. WRITTEN NOTICE OF EXERCISE. This option, to the extent it is exercisable as provided in Section 10 herein, may be exercised only by delivering to the Secretary of the Company, at its principal office within the time specified in Paragraph 1 or such shorter time as is otherwise provided for herein, a written notice of exercise substantially in the form described in Section 10. 5. ANTI-DILUTION PROVISIONS. (a) If there is any stock dividend or recapitalization resulting in a stock split, or combination or exchange of shares of Common Stock of the Company, the number of shares of Common Stock then subject to this option shall be proportionately and appropriately adjusted; no change shall be made in the aggregate purchase price to be paid for all shares subject to this option, but the aggregate purchase price shall be allocated among all shares subject to this option after giving effect to the adjustment; provided, however, that any fractional shares resulting from any such adjustment shall be eliminated. (b) If there is any other change in the Common Stock of the Company, including recapitalization, reorganization, sale or exchange of assets, exchange of shares, offering of subscription rights, or a merger or consolidation in which the Company is the surviving corporation, an adjustment, if any, shall be made in the shares then subject to this option as the Company's Board of Directors the ("Board") or the Compensation Committee of the Board (the "Committee") may deem equitable. Failure of the Board or the Committee to provide for an adjustment pursuant to this subparagraph prior to the effective date of any Company action referred to herein shall be conclusive evidence that no adjustment is required in consequence of such action. (c) If the Company is merged into or consolidated with any other corporation, or if it sells all or substantially all of its assets to any other corporation, then either (i) the Company shall cause provisions to be made for the continuance of this option after such event, or for the substitution for this option of an option covering the number and class of securities and/or cash of securities and/or cash or other property which the Optionee would have been entitled to receive in such merger or consolidation by virtue of such sale if the Optionee had been the holder of record of a number of shares of Common Stock of the Company equal to the number of shares covered by the unexercised portion of this option; provided, only that the excess of the aggregate fair market value of the shares 2 subject to the options immediately after such substitution over the purchase price thereof is not more than the excess of the aggregate fair market value of the shares subject to such options immediately before such substitution over the purchase price thereof, or (ii) the Company shall give to the Optionee written notice of its election not to cause such provision to be made and this option shall become exercisable in full (or, at the election of the Optionee, in part) at any time during a period of ten (10) days, to be designated by the Company, ending not more than ten (10) days prior to the effective date of the merger, consolidation or sale, in which case this option shall not be exercisable to any extent after the expiration of such ten (10) day period. In no event, however, shall this option be exercisable after the Termination Date. 6. INVESTMENT REPRESENTATION AND LEGEND OF CERTIFICATES. The Optionee agrees that until such time as a registration statement under the Securities Act of 1933, as amended, becomes effective with respect to the option and/or the stock, the Optionee is taking this option and will take the stock underlying this option, for investment and not for resale or distribution. The Company shall have the right to place upon the face of any stock certificate or certificates evidencing shares issuable upon the exercise of this option such legend as the Board on the Committee may prescribe for the purpose of preventing disposition of such shares in violation of the Securities Act of 1933, as amended. 7. NON-TRANSFERABILITY. This option shall not be transferable by the Optionee other than by will or by the laws of descent and distribution, and is exercisable during the lifetime of the Optionee only by the Optionee. 3 8. CERTAIN RIGHTS NOT CONFERRED BY OPTION. The Optionee shall not, by virtue of holding this option, be entitled to any rights of a stockholder in the Company. 9. EXPENSE. The Company shall pay all original issue and transfer taxes with respect to the issuance and transfer of shares of Common Stock of the Company pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith. 10. EXERCISE OF OPTIONS. (a) The amount of shares pursuant to this option that shall become exercisable are as follows: 16,666 shares commencing March 19, 1997; 16,666 shares commencing March 19, 1998; and 16,668 shares commencing March 19, 1999. (b) An option shall be exercisable by written notice of such exercise, in the form prescribed by the Board or the Committee, to the Secretary of the Company, at its principal office. The notice shall specify the number of shares for which the option is being exercised (which number, if less than all of the shares then subject to exercise, shall be 100 or a multiple thereof) and shall be accompanied by payment (i) in cash or by check of the amount of the full purchase price of such shares or (ii) in such other manner as the Board or the Committee shall deem acceptable. (c) No shares shall be delivered upon exercise of any option until all laws, rules and regulations which the Board or the Committee may deem applicable have been complied with. If a registration statement under the Securities Act of 1933, as amended, is not then in effect with respect to the shares issuable upon such exercise, the Company may require as a condition precedent that the person exercising the option give to the Company a written representation and undertaking, satisfactory in form and substance to the Board or the Committee, that such person is acquiring the shares for their own account for investment and not with a view to the distribution thereof. 4 (d) The person exercising an option shall not be considered a record holder of the stock so purchased for any purpose until the date on which such person is actually recorded as the holder of such stock in the records of the Company. (e) This option shall be exercisable only so long as the Optionee shall continue to be an employee of the Company and within the three month period after the date of termination of his employment to the extent it was exercisable on the day prior to the date of termination. Notwithstanding the foregoing, in no event shall this option be exercisable after the Termination Date. (f) Notwithstanding the provisions of Section 10(e) above, in the event the Optionee is unable to continue his employment with the Company as a result of this total and permanent disability (as defined in Section 105(d)(4) of the Internal Revenue Code of 1986, as amended), he may, but only within twelve (12) months from the date of disability, exercise this option to the extent he was entitled to exercise it at the date of such disability. Notwithstanding the foregoing, in no event shall this option be exercisable after the Termination Date. (g) Notwithstanding the provisions of Section 10(e) above, in the event of death of the Optionee: (i) during the term of this option who is at the time of his death an employee of the Company and who shall have been in Continuous Status (as defined in the Plan) as an employee since the date of grant of this option, this option may be exercised, at any time within twelve (12) months following the date of death, by the Optionee's estate or by a person who acquired the right to exercise this option by bequest or inheritance, but only to the extent of the right that would have accrued had the Optionee continued living one (1) month after the date of death; or (ii) within three (3) months after the termination of Continuous Status as an employee, this option may be exercised, at any time within three (3) months following the date 5 (iii) within three (3) months after the termination of Continuous Status as an employee, this option may be exercised, at any time within three (3) months following the date of death, by the Optionee's estate or by a person who acquired the right to exercise the option by bequest or inheritance, but only to the extent of the right to exercise that had accrued at the date of termination. Notwithstanding the provisions of this Section (g), in no event shall this option be exercisable after the Termination Date. 11. APPROVAL OF STOCKHOLDERS. This option is subject to the approval of the Company's 1996 Stock Option Plan by the Company's Stockholders, and if not so approved on or before March 18, 1997, this option shall terminate and be of no further force or effect. 12. CONTINUED EMPLOYMENT. Nothing herein shall be deemed to create any employment agreement or guaranty of continued employment or limit in any way the Company's right to terminate Optionee's employment at any time. COIN BILL VALIDATOR, INC. By: /S/ WILLIAM H. WOOD ---------------------- WILLIAM H. WOOD Accepted as of the date first set forth above. /S/ STEPHEN KATZ --------------------- STEPHEN KATZ 6 EX-7 8 EX. 7(G) Exhibit 7(g) COIN BILL VALIDATOR, INC. NON-QUALIFIED STOCK OPTION AGREEMENT AS OF MARCH 19, 1996 COIN BILL VALIDATOR, INC., a New York corporation (the "Company"), pursuant to Section 5(a) of the Company's 1996 Stock Option Plan (the "Plan"), hereby grants to Stephen Katz (the "Optionee") a non-qualified stock option to purchase a total of 100,000 shares of the Company's Common Stock, par value $.01 per share ("Common Stock"), at the price of $6.60 per share on the terms and conditions set forth herein and in the Plan. This option is intended to be a non-qualified stock option. This option is not intended to be, nor is it, an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). 1. DURATION. (a) This option was granted as of the date first above written. (b) This option shall expire at the close of business on March 18, 2001 (the "Termination Date"). 2. PRICE. The purchase price of $6.60 for each share of Common Stock upon exercise of this option is 110% of the fair market value on the date hereof. 3. QUALIFICATION AS INCENTIVE STOCK OPTION. These options are non-qualified stock options, subject to Section 83 of the Code. 4. WRITTEN NOTICE OF EXERCISE. This option, to the extent it is exercisable as provided in Section 10 herein, may be exercised only by delivering to the Secretary of the Company, at its principal office within the time specified in Paragraph 1 or such shorter time as is otherwise provided for herein, a written notice of exercise substantially in the form described in Section 10. 5. ANTI-DILUTION PROVISIONS. (a) If there is any stock dividend or recapitalization resulting in a stock split, or combination or exchange of shares of Common Stock of the Company, the number of shares of Common Stock then subject to this option shall be proportionately and appropriately adjusted; no change shall be made in the aggregate purchase price to be paid for all shares subject to this option, but the aggregate purchase price shall be allocated among all shares subject to this option after giving effect to the adjustment; provided, however, that any fractional shares resulting from any such adjustment shall be eliminated. (b) If there is any other change in the Common Stock of the Company, including recapitalization, reorganization, sale or exchange of assets, exchange of shares, offering of subscription rights, or a merger or consolidation in which the Company is the surviving corporation, an adjustment, if any, shall be made in the shares then subject to this option as the Company's Board of Directors (the "Board") or the Compensation Committee of the Board (the "Committee") may deem equitable. Failure of the Board or the Committee to provide for an adjustment pursuant to this subparagraph prior to the effective date of any Company action referred to herein shall be conclusive evidence that no adjustment is required in consequence of such action. (c) If the Company is merged into or consolidated with any other corporation, or if it sells all or substantially all of its assets to any other corporation, then either (i) the Company shall cause provisions to be made for the continuance of this option after such event, or for the substitution for this option of an option covering the number and class of securities and/or cash or other property which the Optionee would have been entitled to receive in such merger or 2 consolidation by virtue of such sale if the Optionee had been the holder of record of a number of shares of Common Stock of the Company equal to the number of shares covered by the unexercised portion of this option; provided, only that the excess of the aggregate fair market value of the shares subject to the options immediately after such substitution over the purchase price thereof is not more than the excess of the aggregate fair market value of the shares subject to such options immediately before such substitution over the purchase price thereof, or (ii) the Company shall give to the Optionee written notice of its election not to cause such provision to be made and this option shall become exercisable in full (or, at the election of the Optionee, in part) at any time during a period of ten (10) days, to be designated by the Company, ending not more than ten (10) days prior to the effective date of the merger, consolidation or sale, in which case this option shall not be exercisable to any extent after the expiration of such ten (10) day period. In no event, however, shall this option be exercisable after the Termination Date. 6. INVESTMENT REPRESENTATION AND LEGEND OF CERTIFICATES. The Optionee agrees that until such time as a registration statement under the Securities Act of 1933, as amended, becomes effective with respect to the option and/or the stock, the Optionee is taking this option and will take the stock underlying this option, for investment and not for resale or distribution. The Company shall have the right to place upon the face of any stock certificate r certificates evidencing shares issuable upon the exercise of this option such legend as the Board on the Committee may prescribe for the purpose of preventing disposition of such shares in violation of the Securities Act of 1933, as amended. 7. NON-TRANSFERABILITY. This option shall not be transferable by the Optionee other than by will or by the laws of descent and distribution, and is exercisable during the lifetime of the Optionee only by the Optionee. 3 8. CERTAIN RIGHTS NOT CONFERRED BY OPTION. The Optionee shall not, by virtue of holding this option, be entitled to any rights of a stockholder in the Company. 9. EXPENSES. The Company shall pay all original issue and transfer taxes with respect to the issuance and transfer of shares of Common Stock of the Company pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith. 10. EXERCISE OF OPTIONS. (a) The amount of shares pursuant to this option that shall become exercisable are as follows: 33,333 shares commencing March 19, 1997; 33,333 shares commencing March 19, 1998; and 33,334 shares commencing March 19, 1999. (b) An option shall be exercisable by written notice of such exercise, in the form prescribed by the Board or the Committee, to the Secretary of the Company, at its principal office. The notice shall specify the number of shares for which the option is being exercised (which number, if less than all of the shares then subject to exercise, shall be 100 or a multiple thereof) and shall be accompanied by payment (i) in cash or by check of the amount of the full purchase price of such shares or (ii) in such other manner as the Board or the Committee shall deem acceptable. (c) No shares shall be delivered upon exercise of any option until all laws, rules and regulations which the Board or the Committee may deem applicable have been complied with. If a registration statement under the Securities Act of 1993, as amended, is not then in effect with respect to the shares issuable upon such exercise, the Company may require as a condition precedent that the person exercising the option give to the Company a written 4 representation and undertaking, satisfactory in form and substance to the Board or the Committee, that such person is acquiring the shares for their own account for investment and not with a view to the distribution thereof. (d) The person exercising an option shall not be considered a record holder of the stock so purchased for any purpose until the date on which such person is actually recorded as the holder of such stock in the records of the Company. (e) This option shall be exercisable only so long as the Optionee shall continue to be an employee of the Company and within the three month period after the date of termination of his employment to the extent it was exercisable on the day prior to the date of termination. Notwithstanding the foregoing, in no event shall this option be exercisable after the Termination Date. (f) Notwithstanding the provisions of Section 10(e) above, in the event the Optionee is unable to continue his employment with the Company as a result of his total and permanent disability (as defined in Section 105(d)(4) of the Internal Revenue Code of 1986, as amended), he may, but only within twelve (12) months from the date of disability, exercise this option to the extent he was entitled to exercise it at the date of such disability. Notwithstanding the foregoing, in no event shall this option be exercisable after the Termination Date. (g) Notwithstanding the provisions of Section 10(e) above, in the event of death of the Optionee: (i) during the term of this option who is at the time of his death an employee of the Company and who shall have been in Continuous Status (as defined in the Plan) as an employee since the ate of grant of this option, this option may be exercised, at any time within twelve 912) months following the date of death, by the Optionee's estate or by a person who acquired the right to exercise this option by bequest or inheritance, but only to the extent of the right that would have accrued had the Optionee continued living one (1) month after the date of death; or 5 of death, by the Optionee's estate or by a person who acquired the right to exercise the option by bequest or inheritance, but only to the extent of the right to exercise that had accrued at the date of termination. Notwithstanding the provisions of this Section (g), in no event shall this option be exercisable after the Termination Date. 11. CONTINUED EMPLOYMENT. Nothing herein shall be deemed to create any employment agreement or guaranty of continued employment or limit in any way the Company's right to terminate Optionee's employment at any time. COIN BILL VALIDATOR, INC. By: /S/ WILLIAM H. WOOD ---------------------- WILLIAM H. WOOD Accepted as of the date first set forth above. /S/ STEPHEN KATZ --------------------- STEPHEN KATZ 6 EX-7 9 EX.7(H) Exhibit 7(h) ODYSSEY FINANCIAL COMPANY 20 East Sunrise Highway, Suite 200 Valley Stream, New York 11581 May 23, 1996 Mr. Stephen Katz 20 East Sunrise Highway Suite 200 Valley Stream, New York 11581 Re: COIN BILL VALIDATOR, INC. Dear Mr. Katz: This letter will confirm the agreement between Odyssey Financial Company, a New York general partnership ("Odyssey"), and Stephen Katz ("Katz") to file jointly a statement on Schedule 13D pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, with respect to the purchase by Odyssey of certain common shares of Coin Bill Validator, Inc., a New York corporation (the "Company"), the creation of a voting trust, of which Katz will serve as voting trustee, with respect to these and certain other common shares of the Company, and certain related transactions. Very truly yours, ODYSSEY FINANCIAL COMPANY By: /S/ STEPHEN KATZ ---------------------- STEPHEN KATZ AGREED: /S/ STEPHEN KATZ - --------------------- STEPHEN KATZ -----END PRIVACY-ENHANCED MESSAGE-----