AGREEMENT, dated as of March 28, 2001 (the "Agreement"), by and between
DCAP GROUP, INC., a Delaware corporation (the "Company"), and XXXXXXX XXXXXXXXX
(the "Shareholder").
RECITALS:
The parties, directly or through the Company subsidiaries noted, have
entered into the following agreements and executed the following instruments:
1. Stock Purchase Agreement of even date between the Company and the
Shareholder.
2. Letter agreement of even date between the Company and the Shareholder
with respect to, among other matters, the termination of his employment.
3. Promissory Note dated December 31, 1997 from the Shareholder to Dealers
Choice Automotive Planning, Inc. (renamed DCAP Insurance Agencies, Inc.) in the
principal amount of $154,953 (the "1997 Note");
4. Promissory Note dated February 25, 1999 from the Shareholder to the
Company in the principal amount of $114,000 (the "$114,000 Note");
5. Promissory Note dated February 25, 1999 from the Shareholder to the
Company in the principal amount of $112,500 (the "$112,500 Note" and together
with the 1997 Note and the $114,000 Note, the "Notes");
6. Pledge Agreement dated as of February 25, 1999 between the Shareholder
and the Company with respect to the $114,000 Note (the "$114,000 Note Pledge
Agreement"); and
7. Pledge Agreement dated as of February 25, 1999 between the Shareholder
and the Company with respect to the $112,500 Note (the "$112,500 Note Pledge
Agreement" and together with the $114,000 Note Pledge Agreement, the "Pledge
Agreements").
The Shareholder owns 2,575,000 shares of common stock of the Company.
Subject to the terms and conditions hereof, at the Closing (as hereinafter
defined), the Shareholder shall transfer and assign to the Company, and the
Company shall purchase from the Shareholder, an aggregate of 1,791,076 shares of
common stock of the Company (the "Shares") in consideration of the cancellation
of the Notes as provided for herein.
NOW, THEREFORE, in consideration of the recitals and the respective
covenants, representations, warranties and Agreements herein contained and
intending to be legally bound hereby, the parties hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 Agreement to Sell. At the Closing, upon and subject to the terms and
conditions of this Agreement, the Shareholder shall sell, assign and transfer to
the Company all of his right, title and interest in and to all of the Shares,
free and clear of all liens, pledges, options, charges, restrictions, security
interests and encumbrances of any kind ("Liens").
1.2 Agreement to Purchase. At the Closing, upon and subject to the terms and
conditions of this Agreement, the Company shall purchase the Shares from the
Shareholder in consideration of the Purchase Price (as hereinafter defined).
1.3 Purchase Price.
1.3.1 Purchase Price. The aggregate purchase price for the Shares (the
"Purchase Price") shall be $447,769, which amount represents the aggregate
principal amounts of the Notes together with accrued interest thereon through
February 28, 2001.
1.3.2 Delivery of Purchase Price. At the Closing, subject to the terms and
conditions hereof, in payment of the Purchase Price, the Company shall deliver
to the Shareholder the Notes for cancellation whereupon no further amounts shall
be due or payable pursuant to the Notes.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDER
The Shareholder makes the following representations and warranties to the
Company, each of which shall be deemed material, and the Company, in executing,
delivering and consummating this Agreement, has relied upon the correctness and
completeness of each of such representations and warranties:
2.1 Title to Shares. The Shareholder owns all of the Shares free and clear of
all Liens (other then Liens in favor of the Company). There are no outstanding
options, warrants or other rights or commitments relating to any of the Shares.
At the Closing, the Company will acquire good and marketable title to the
Shares, free and clear of all Liens.
2.2 Consents. No consent of any governmental body or other person is required to
be received by or on the part of the Shareholder to enable him to enter into and
carry out this Agreement and the transactions contemplated hereby, including,
without limitation, the transfer to the Company of all of the right, title and
interest of the Shareholder in and to the Shares.
2.3 Authority; Binding Nature of Agreement. The Shareholder has the power to
enter into this Agreement and to carry out his obligations hereunder. This
Agreement constitutes the valid and
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binding obligation of the Shareholder and is enforceable in accordance with its
terms.
2.4 Litigation. Except as listed and briefly described on Schedule 2.4 attached
hereto, there are no actions, claims, suits, demands, litigation, or
governmental or other proceeding relating to the Company or any direct or
indirect subsidiary thereof (whether wholly or partially-owned) (collectively,
the "DCAP Companies") or any of their respective assets or business pending or
threatened, or any judgment, order, injunction, decree or award outstanding
against any DCAP Company or against or relating to any of their respective
assets or business.
2.5 Obligations. Except as listed and described on Schedule 2.5 attached hereto,
the Shareholder has not, on behalf of any DCAP Company, whether in writing or
otherwise, entered into any agreement, arrangement or understanding, or
otherwise committed any DCAP Company to any obligation, that is currently in
effect, and the Shareholder has not otherwise has incurred any liability,
absolute or contingent, on the part of any DCAP Company that will be due or
payable on or after the date hereof.
2.6 No Breach. Neither the execution and delivery of this Agreement nor
compliance by the Shareholder with any of the provisions hereof nor the
consummation of the transactions contemplated hereby, will:
(a) violate or, alone or with notice or the passage of time, or both,
result in a breach of the terms of any agreement to which the Shareholder is a
party or is otherwise bound;
(b) result in the creation of any Lien upon the Shares;
(c) violate any judgment, order, injunction, decree or award against, or
binding upon, the Shareholder; or
(d) violate any law or regulation of any jurisdiction relating to the
Shareholder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
3.1 Consents. No consent of any governmental body or other person is required to
be received by or on the part of the Company to enable it to enter into and
carry out this Agreement and the transactions contemplated hereby.
3.2 Corporate Authority; Binding Nature of Agreement. The Company has the
corporate power to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of the Company and, except for Stockholder Approval (as hereinafter
defined), no other corporate proceedings on the part of the Company are
necessary to authorize the execution and delivery of this Agreement and the
consummation of the transactions
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contemplated hereby. This Agreement constitutes the valid and binding obligation
of the Company and is enforceable in accordance with its terms.
3.3 No Breach. Neither the execution and delivery of this Agreement nor
compliance by the Company with any of the provisions hereof nor the consummation
of the transactions contemplated hereby, will:
(a) violate or conflict with any provision of the Certificate of
Incorporation or By- Laws of the Company;
(b) violate or, alone or with notice or the passage of time, or both,
result in the breach of the terms of any agreement to which the Company is a
party or is otherwise bound;
(c) violate any judgment, order, injunction, decree or award against, or
binding upon, the Company; or
(d) violate any law or regulation of any jurisdiction relating to the
Company.
ARTICLE IV
PRE-CLOSING COVENANTS
4.1 Covenants. The Shareholder hereby covenants that, from and after the date
hereof and until the Closing, the Shareholder will (A) use his best efforts to
assure that all of his representations and warranties contained herein are true
and correct as of the Closing as if repeated at and as of such time, that no
default shall occur with respect to any of his covenants, representations or
warranties contained herein that has not been cured by the Closing and that all
conditions to the Company's obligation to enter into and complete the Closing
are satisfied in a timely manner; (B) not voluntarily take any action or do
anything which will cause a default respecting such covenants, representations
or warranties or would impede the satisfaction of such conditions; and (C)
promptly notify the Company of any event or fact which represents or is likely
to cause such a default or result in such an impediment. Without limiting the
generality of the foregoing, prior to the Closing or earlier termination of this
Agreement, the Shareholder shall not sell, transfer or assign any of the Shares
(it being acknowledged that any such attempted sale, transfer or assignment
shall be null and void) and the Shareholder agrees to use his best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things reasonably necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO THE
OBLIGATION OF THE COMPANY TO CLOSE
The obligation of the Company to consummate the transactions contemplated
hereby is subject to the fulfillment, prior to or at the Closing, of each of the
following conditions, any one or
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more of which may be waived by the Company (except when the fulfillment of such
condition is a requirement of law):
5.1 Representations and Warranties. All representations and warranties of the
Shareholder contained in this Agreement and in any schedule delivered pursuant
hereto shall be true and correct in all material respects as at the Closing
Date, as if made at the Closing and as of the Closing Date.
5.2 Covenants. The Shareholder shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by him prior to or at the Closing.
5.3 Certificate. The Company shall have received a certificate, dated the
Closing Date, signed by the Shareholder, as to the satisfaction of the
conditions contained in Sections 5.1 and 5.2 hereof.
5.4 Shares. The Shareholder shall have tendered to the Company the Shares in
accordance with the provisions hereof.
5.5 No Actions. No action shall have been instituted and be continuing before a
court or before or by governmental body, or shall have been threatened and be
unresolved, to restrain or prevent, or obtain any material amount of damages in
respect of, the carrying out of the transactions contemplated hereby, or which
might materially affect the right of the Company to own the Shares after the
Closing Date, or which might have a materially adverse effect thereon.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATION OF
THE SHAREHOLDER TO CLOSE
The obligation of the Shareholder to consummate the transactions
contemplated hereby is subject to the fulfillment, prior to or at the Closing,
of each of the following conditions, any one or more of which may be waived by
the Shareholder (except when the fulfillment of such condition is a requirement
of law):
6.1 Representations and Warranties. All representations and warranties of the
Company contained in this Agreement and in any schedule delivered pursuant
hereto shall be true and correct in all material respects as at the Closing
Date, as if made at the Closing and as of the Closing Date.
6.2 Certificate. The Shareholder shall have received a certificate, dated the
Closing Date, signed by the Chief Executive Officer of the Company, as to the
satisfaction of the conditions contained in Section 6.1 hereof.
6.3 Notes. The Company shall have tendered to the Shareholder the Notes for
cancellation.
6.4 No Actions. No action shall have been instituted and be continuing before a
court or before or by a governmental body, or shall have been threatened and be
unresolved, to restrain or prevent,
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or obtain any material amount of damages in respect of, the carrying out of the
transactions contemplated hereby.
ARTICLE VII
CLOSING
7.1 Time and Location. The closing (the "Closing") provided for herein shall
take place at the offices of Certilman Balin Xxxxx & Xxxxx, LLP, 00 Xxxxxxx
Xxxxxx, Xxxx Xxxxxx, Xxx Xxxx 00000 simultaneously with the execution hereof.
7.2 Items to be Delivered by the Shareholder. At the Closing, the Shareholder
will deliver or cause to be delivered to the Company:
(a) the certificate required by Section 5.3 hereof;
(b) certificates representing 771,076 of the Shares, duly endorsed or
accompanied by stock powers duly executed, together with evidence satisfactory
to the Company of the Shareholder's payment of all transfer taxes with respect
thereto; and
(c) an acknowledgment and agreement that the remaining portion of the
Shares, i.e., 1,020,000 shares, that are held by the Company pursuant to the
provisions of the Pledge Agreements shall be retained by the Company and
considered transferred by the Shareholder to the Company (such document to be
accompanied by evidence satisfactory to the Company of the Shareholder's payment
of all transfer taxes with respect thereto).
7.3 Items to be Delivered by the Company. At the Closing, the Company will
deliver or cause to be delivered to the Shareholder:
(a) the certificate required by Section 6.2 hereof; and
(b) the Notes for cancellation.
ARTICLE VIII
POST-CLOSING MATTERS
8.1 Further Assurances. On and after the Closing Date, the parties shall take
all such further actions and execute and deliver all such further instruments
and documents as may be necessary or appropriate to carry out the transactions
contemplated by this Agreement.
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ARTICLE IX
WAIVER
9.1 Waiver. Any condition to the performance of the parties which legally may be
waived on or prior to the Closing may be waived at any time by the party
entitled to the benefit thereof by action taken or authorized by an instrument
in writing executed by the relevant party or parties. The failure of any party
at any time or times to require performance of any provision hereof shall in no
manner affect the right of such party at a later time to enforce the same. No
waiver by either party of the breach of any term, covenant, representation or
warranty contained in this Agreement as a condition to such party's obligations
hereunder shall release or affect any liability resulting from such breach, and
no waiver of any nature in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such condition or of any
breach of any other term, covenant, representation or warranty of this
Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Expenses. Each of the parties shall bear its or his own expenses in
connection herewith.
10.2 Equitable Relief. The Shareholder acknowledges and agrees that, in the
event he shall violate or threaten to violate any of the provisions hereof, the
Company will be without an adequate remedy at law and will therefore be entitled
to enforce such restrictions by temporary or permanent injunctive or mandatory
relief in any court of competent jurisdiction without the necessity of proving
damages and without prejudice to any and all other rights and remedies it may
have.
10.3 Entire Agreement. This Agreement, including the schedules attached hereto,
which are a part hereof, constitutes the entire agreement of the parties with
respect to the subject matter hereof. No change, modification, amendment,
addition or termination of this Agreement or any part thereof shall be valid
unless in writing and signed by or on behalf of the party to be charged
therewith.
10.4 Notices. Any and all notices or other communications or deliveries required
or permitted to be given or made pursuant to any of the provisions of this
Agreement shall be deemed to have been duly given or made for all purposes when
in writing and hand delivered or sent by certified or registered mail, return
receipt requested and postage prepaid, overnight mail, nationally recognized
overnight courier or telecopier as follows:
If to the Company:
0000 Xxxxxxxxx Xxxxxxxx
Xxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx, Chief Executive Officer
Telecopier Number: (000) 000-0000
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With a copy to:
Certilman Balin Xxxxx & Xxxxx, LLP
00 Xxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx, Esq.
Telecopier Number: (000) 000-0000
If to the Shareholder:
0 Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxx Xxxx 00000
With a copy to:
Xxxxxxxxxxx & Xxxxxxx
000 Xxx Xxxxxxx Xxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxxx, Esq.
Telecopier Number: (000) 000-0000
or at such other address as any party may specify by notice given to the other
party in accordance with this Section 10.4.
10.5 Choice of Law; Severability. This Agreement shall be governed by, and
interpreted and construed in accordance with, the laws of the State of New York,
excluding choice of law principles thereof. In the event any clause, section or
part of this Agreement shall be held or declared to be void, illegal or invalid
for any reason, all other clauses, sections or parts of this Agreement which can
be effected without such void, illegal or invalid clause, section or part shall
nevertheless continue in full force and effect.
10.6 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.
10.7 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, and all of which taken together shall constitute
one and the same instrument.
10.8 Facsimile Signatures. Signatures hereon which are transmitted via facsimile
shall be deemed original signatures.
10.9 Representation by Counsel; Interpretation. Each party acknowledges that he
or it has been represented by counsel in connection with this Agreement and the
transactions contemplated hereby. Accordingly, any rule or law or any legal
decision that would require the interpretation of any claimed ambiguities in
this Agreement against the party that drafted it has no application and is
expressly waived by the parties. The provisions of this Agreement shall be
interpreted in a
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reasonable manner to give effect to the intent of the parties hereto.
10.11 Headings; Gender. The headings, captions and/or use of a particular gender
under sections of this Agreement are for convenience of reference only and do
not in any way modify, interpret or construe the intent of the parties or affect
any of the provisions of this Agreement.
[Remainder of page intentionally left blank]
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WITNESS the execution of this Agreement as of the date first above written.
DCAP GROUP, INC.
By:/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx, Chief Executive Officer
/s/ Xxxxxxx Xxxxxxxxx
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Xxxxxxx Xxxxxxxxx
