AGREEMENT
THIS AGREEMENT (the "Agreement") is effective as of October 23rd, 2003,
by and between xXXXXXXXXXX.XXX, INC., a Nevada corporation ("eAutoclaims"),
GOVERNORS ROAD, LLC, ("Governors Road", (the "Purchaser"). EAutoclaims, the
Purchaser and the Shareholders (as defined below)are herein collectively called
the "Parties".
R E C I T A L S:
WHEREAS, eAutoclaims and Governors Road entered into that certain
Securities Purchase Agreement dated as of June 27, 2000 (the "Purchase
Agreement"); and
WHEREAS, eAutoclaims entered into that certain Security Agreement dated
as of August 25, 2000 (the "Security Agreement"); and
WHEREAS, in accordance with the terms set forth in the Purchase
Agreement, eAutoclaims has issued shares of its Series A Convertible Preferred
Stock ("Preferred Stock") and Purchasers' Warrants ("Purchaser Warrants") and
Agent Warrants ("Agent Warrants") upon each funding under the Purchase
Agreement; and
WHEREAS, as further required under the Purchase Agreement, eAutoclaims
entered into a Registration Rights Agreement dated as of August 25, 2000
pursuant to which eAutoclaims is obligated to register shares of its common
stock underlying the Preferred Stock, the Purchaser Warrants, and Agent's
Warrants ("Registration Agreement"); and
WHEREAS, Governors Road is currently the only holder of the outstanding
Preferred Stock and Dominion Capital Fund Limited, Southshore Capital Fund Ltd,
Southridge Capital Management LLC, Sovereign Partners LP, and Greenfield
Investment Consultants, LLC (the "Shareholders") may have been or currently may
be shareholders of eAutoclaims equity securities; and
WHEREAS, the Parties desire to amend certain terms of the Purchase
Agreement, the Security Agreement, the Registration Agreement, the Purchaser
Warrants, and the Agent Warrants (such agreements are collectively referred to
as the "Preferred Stock Agreements"); and
WHEREAS, the Parties previously entered into that certain Master
Modification Agreement effective January 12, 2001, and a Letter Agreement
effective April 27, 2001 and a Restated Master Modification Agreement and
Addendum thereto effective May, 2001, which modified in certain respects the
Preferred Stock Agreements and certain other matters relating to eAutoclaims
equity securities; and
WHEREAS, the purpose of this Agreement is to set forth and restate in
one document the current arrangements and understandings by and among
eAutoclaims, the Purchaser and the Shareholders as it relates to the Preferred
Stock and certain other matters relating to eAutoclaims; and
WHEREAS, the Parties desire to set forth their agreements with respect
to the modification of certain provisions included in the Preferred Stock
Agreements.
A G R E E M E N T S:
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereby agree as follows:
1. Amendment to Certificate of Designation. The Purchaser, as sole
shareholder of the Preferred Stock, and eAutoclaims agree to restate the
Certificate of Designation, Rights, Preferences and Limitations for the Series A
Preferred Stock in accordance with the terms and provisions of the Amendment to
Certification of Designations, Rights, Preferences and Limitations set forth on
Exhibit "A", the terms of which are incorporated herein by reference ("Restated
Certificate of Designation"). Promptly upon execution of this Agreement by all
Parties, eAutoclaims shall cause same to be authorized by all necessary
corporate action, and the Restated Certificate of Designation to be filed in the
public records for the State of Nevada.
2. Confirmation of Holdings of eAutoclaims Equity Securities. Exhibit
"B" attached hereto, the terms of which are incorporated herein by reference,
sets forth a true and accurate listing of all eAutoclaims equity securities
currently owned directly or held beneficially for the Purchaser and Shareholders
in street name or other third-party accounts.
3. Amendment to Securities Purchase Agreement. The following provisions
of the Securities Purchase Agreement originally entered into as of June 27,
2000,
(i) are deleted and of no further force and effect:
o Section 3.5 Redemption.
o Section 3.6 Collateral.
o Section 7 Negative Covenants.
o Section 9.1(j).
(ii) are amended as follows:
o Section 10.11. It is agreed among the Parties that in
the event a dispute arises among eAutoclaims and the
Purchaser to this Agreement that the form, choice and
law and exclusive venue for any such dispute shall be
a court of competent jurisdiction in the State of New
York, located in New York County Each party hereby
waives all right to a trial by jury in the
adjudication of any such dispute.
4. Termination of Security Agreement. To the extent relevant to the
rights, obligations or interests of the Purchaser the terms and conditions of
the Security Agreement are terminated and are of no further force and effect.
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5. Modification of Registration Rights Agreement. So long as
eAutoclaims is not in default under this Agreement and otherwise complies with
its obligations pursuant to the attached Certificate of Designation, then the
mandatory registration rights provisions of Section 2.1 of the Registration
Rights Agreement are waived. Notwithstanding the foregoing, eAutoclaims agrees
that the piggyback registration rights granted in the Registration Rights
Agreement shall remain in full force and effect. In the event that the Purchaser
or Shareholders may resell all of their eAutoclaims equity securities pursuant
to the provisions of Rule 144(k) and provided further that eAutoclaims causes
its counsel, or counsel acceptable to eAutoclaims, to provide the legal opinions
for removal of restrictive legends pursuant to the provisions of Rule 144(k)
within seven (7) days of the receipt of required documentation from the
Purchaser or Shareholders, then eAutoclaims shall have no further obligations to
register any of its equity securities on behalf of the Purchaser.
6. Changes to Warrants. eAutoclaims agrees that the exercise price for
all Purchaser Warrants and Agents Warrants, issued to the Purchaser or
Shareholders, shall be set at the lower of the currently existing exercise price
or $.70 per share. eAutoclaims acknowledges that the cashless exercise
provisions set forth in the Purchaser Warrants and Agents Warrants shall remain
in full force and effect. The Purchaser and Shareholders agree that Section 6 of
each Purchaser Warrant and Agent Warrant captioned "Reclassification,
Reorganization, Consolidation or Merger" is deleted in its entirety. In lieu
thereof, the holder of Purchaser Warrants or Agent Warrants shall be given at
least 30 days prior written notice of any consolidation or merger of eAutoclaims
with or into another corporation or in the event of any sale, lease, transfer or
conveyance to another corporation of all or substantially all of the property
and assets of eAutoclaims. The holders of the Purchaser Warrants and Agent
Warrants shall have the right to exercise such warrants (including a cashless
exercise) prior to consummation of any such transaction, and to participate as a
common shareholder in such transaction.
7. Purchaser's Exclusive Right to Future Equity Line Financing
Arrangements. eAutoclaims agrees that the Purchaser shall have the exclusive
right as the financing source of any future equity line of credit or similar
arrangements, however denominated, through June 30, 2005.
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8. Understandings Regarding Resales of eAutoclaims Securities. In the
event that eAutoclaims elects not to make an Ordinary Optional Redemption, as
defined in the Restated Certificate of Designation for the Preferred Stock
("Certificate"), then the Purchaser shall be able to convert a certain portion
of the outstanding Preferred Stock on a monthly basis, as further outlined in
the Certificate. If the Purchaser elects to convert such portion of Preferred
Stock, Purchaser will cooperate in the event that eAutoclaims attempts to
arrange Block Trades, as defined below, for the purchase of such eAutoclaims
common stock held by Purchaser pursuant to such conversion. The Purchaser and
eAutoclaims recognize that such cooperation is currently warranted due to the
fact that eAutoclaims common stock remains thinly traded as of the date of this
Agreement, and that such cooperation should facilitate the orderly liquidation
of the converted common stock in the market. A block trade shall be defined as a
sale of greater than 5,000 shares of eAutoclaims Common Stock in a single trade
(a "Block Trade"). The Purchaser agrees to provide eAutoclaims with at least
four (4) prior business days notice of any intent to resell eAutoclaims equity
securities in any Block Trade. Purchaser agrees to discount the selling price of
any proposed sale of eAutoclaims shares by up to ten percent (10%) for the last
closing asked price on the prior trading day to assist eAutoclaims in securing
and locating a buyer for such securities in a Block Trade. The Purchaser agrees
to make available to eAutoclaims information on all trading activities of
eAutoclaims common stock in a prompt and timely fashion (i.e. within 48-hours
after any trading activity that is not previously disclosed pursuant to the
terms of this Agreement). Notwithstanding the above, Purchaser shall not be
restricted from selling eAutoclaims common stock received pursuant to monthly
conversions in the open market, from time to time as Purchaser sees fit, in one
or more trades representing a quantity of less than 5,000 shares per individual
trade.
9. Purchaser Lock-Up Arrangement. So long as eAutoclaims complies with
the terms and conditions of this Agreement and the attached Certificate, then
the Purchaser agrees that it shall only resell eAutoclaims common shares in
accordance with the conversion provisions set forth in the attached Certificate.
Only those shares, which are converted in accordance with the terms of the
Certificate shall be available for resale without the prior consent of
eAutoclaims.
10. Conversion Limit. Notwithstanding any other provision hereof or of
any of the other Transaction Agreements, in no event (except as specifically
provided herein as an exception to this provision, , shall the Holder be
entitled to convert any portion of the Preferred Stock, or shall the Company
have the obligation to convert such Preferred Stock (and the Company shall not
have the right to pay dividends thereon in shares of Common Stock) to the extent
that, after such conversion or issuance of stock in payment of dividends, the
sum of (1) the number of shares of Common Stock beneficially owned by the Holder
and its affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unconverted portion of the
Preferred Stock or other convertible securities or of the unexercised portion of
warrants or other rights to purchase Common Stock), and (2) the number of shares
of Common Stock issuable upon the conversion of the Preferred Stock with respect
to which the determination of this proviso is being made, would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock (after taking into account the shares to be
issued to the Holder upon such conversion). For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, except as otherwise provided in clause (1) of such sentence. The
Holder, by its acceptance of this Preferred Stock, further agrees that if the
Holder transfers or assigns any of the Preferred Stock to a party who or which
would not be considered such an affiliate, such assignment shall be made subject
to the transferee's or assignee's specific agreement to be bound by the
provisions of this Section as if such transferee or assignee were the original
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Holder hereof. Nothing herein shall preclude the Holder from disposing of a
sufficient number of other shares of Common Stock beneficially owned by the
Holder so as to thereafter permit the continued conversion of the Preferred
Stock. Notwithstanding the foregoing, (i) in the event of a Reorganization of
eAutoclaims, as defined in the Certificate, , or (ii) while there is outstanding
a tender offer for any or all of the shares of the eAutoclaim's Common Stock,
the Purchaser (or any assignee thereof) shall have the right to convert such
number of Preferred Shares plus accrued interest as may be necessary to receive
an additional 325,000 shares of common stock upon conversion, in excess of the
number of common shares that Purchaser may then currently hold without regards
to the limitations of this Section 11
11. Conforming Amendments. Upon amendment of the Preferred Stock
Agreements according to the preceding provisions of this Agreement, any other
provision of any Preferred Stock Agreement that conflicts with the terms of this
Agreement shall be deemed to be modified or amended to be consistent with the
terms hereof. All other provisions of the Preferred Stock Agreements shall
remain in full force and effect and are unmodified hereby.
12. Successors, Assigns and Affiliates. The terms and conditions of
this Agreement shall apply to successors and assigns of the Purchaser.
13. Releases by the Parties. Effective upon the mutual execution
hereof, each party hereto, for itself and on behalf of its officers, directors,
employees, affiliates, representatives, agents, trustees, beneficiaries,
predecessors in interest, successors in interest and assigns (collectively, the
"Releasing Parties"), hereby releases and forever discharges the other party,
and such party's officers, directors, employees, affiliates, representatives,
agents, trustees, beneficiaries, predecessors in interest, successors in
interest and assigns (collectively, the "Released Parties"), of and from any and
all claims, demands, actions and causes of action, whether known or unknown,
fixed or contingent, arising prior to the date hereof, that the Releasing
Parties may have had, may now have or may hereafter acquire with respect to any
matters whatsoever under, relating to or arising from any prior Purchase
Agreement, Registration Agreement, and the agreements entered into in connection
therewith (sometimes collectively referred to as the "Prior Agreements").
IN WITNESS WHEREOF, the parties below have executed this Agreement,
effective as of the date first set forth above.
Witness eAUTOCLAIMS, INC.
By:
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Xxxx Xxxxxx, President
Witness GOVERNORS ROAD LLC
By:
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As:
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Witness DOMINION CAPITAL FUND LIMITED
By:
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As:
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Witness SOUTHSHORE CAPITAL FUND LTD.
By:
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As:
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Witness SOUTHRIDGE CAPITAL MANAGEMENT LLC
By:
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As:
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Witness SOVEREIGN PARTNERS LP
By:
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As:
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Witness GREENFIELD INVESTMENT CONSULTANTS LLC
By:
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As:
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