AMENDMENT
TO
SUBSCRIPTION AGREEMENT AND RELATED DOCUMENTS
THIS AMENDMENT to Subscription Agreement, Warrant Agreement and
Registration Rights Agreement (collectively the "Amendment") is entered into as
of ___________________ by and between eAUTOCLAIMS, INC., a Nevada corporation
("eAuto"), and __________________________ (the "Investor").
W I T N E S S E T H:
WHEREAS, the Investor and eAuto are parties to a Subscription Agreement,
Registration Rights Agreement and Warrant Agreement (collectively the
"Agreements") entered into in connection with a previous offering of units dated
April, May 2005 by eAuto consisting of one share of common stock and one common
stock purchase warrant at an offering price of $.28 per Unit ("Prior Offering");
and
WHEREAS, eAuto is in the process of conducting a new offering (the "Current
Offering") and in order to facilitate this Current Offering desires to modify
and clarify certain of the previous terms and conditions of the Prior Offering;
and
WHEREAS, in connection with the Prior Offering as set forth in the Prior
Offering's Confidential Offering Term Sheet, the Investor was granted the right
to an adjustment of the number of Units issued to the Investor in the Prior
Offering based upon the number of targeted cumulative ADP claims processed by
eAuto before March 1, 2005 and August 1, 2005 ("ADP Claims True-Up"); and
WHEREAS, the Investor and eAuto are agreeable to modifying the terms and
conditions of the ADP Claims True-Up as provided herein; and
WHEREAS, the Current Offering will be at a Unit price less than the
existing warrant exercise price of $.35 per share and accordingly, the parties
desire to set forth their understandings regarding the adjustment to the
Investor's warrant exercise price; and
WHEREAS, the parties desire to clarify certain of the prior provisions of
the Registration Rights Agreement; and
WHEREAS, in respect of all provisions and terms of the existing
Subscription Agreement, Warrant Agreement and Registration Rights Agreement
which are in conflict with or inconsistent with this Amendment, this Amendment
shall be controlling in all matters of conflict or inconsistency.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Amendment, the parties agree as
follows:
1. Recitals. The above recitals are true and correct and are
incorporated herein by reference.
2. Adjustment to ADP Claims Tru-Up. By execution hereof eAuto and the
Investor agree that the terms and conditions set forth in the Confidential
Private Offering Term Sheet in connection with the prior Unit offering under the
caption "ADP Claims True-Up" are hereby terminated and of no further force and
effect. In lieu thereof, eAuto covenants and agrees that the Investor shall be
entitled to a fifty percent (50%) increase in the number of Units purchased in
the Prior Offering for no additional consideration in exchange for eliminating
the terms and provisions of the prior ADP Claims True-Up. eAuto will issue to
each Investor the additional shares of its common stock and common stock
purchase warrants as soon as reasonably practical after execution of this
Amendment.
Example: Investor purchased 100,000 units in the Prior
Offering. eAuto will issue Investor 50,000 additional shares
of common stock and 50,000 additional warrants with an
exercise price reflecting the anti-dilution protection
afforded the Investor which shall be equal to the offering
price per Unit in the Current Offering.
eAuto covenants and agrees to include in a new registration statement,
which shall be filed within thirty (30) days of the final closing of the Current
Offering, the shares of eAuto Common Stock underlying the issuance of additional
Units to reflect elimination of the ADP Claims True-Up described in this
paragraph.
3. Amendment to Anti-Dilution Provisions of Existing Warrants. In order
to fulfill eAuto's obligations pursuant to Section 2.5(a) of the Warrant
Agreement in the Prior Offering, eAuto agrees that the warrant exercise price of
$.35 per share is hereby adjusted to $.16 per share, which reflects the offering
price per Unit in the Current Offering. In addition, the parties further agree
to clarify the terms of Section 2.5(a) of the Warrant Agreement to reflect the
following:
o If eAuto issues equity securities or common stock equivalents (i.e.,
stock options, stock appreciation rights or restricted stock) pursuant
to employee equity incentive compensation arrangements, such as stock
option plans, below the current market price of the common stock at the
time of issuance, anti-dilution protection under Section 2.5(a) of the
Warrant Agreement shall apply; provided, that the issuance of such
equity securities or common stock equivalents are not approved by the
Placement Agent, which approval shall not be unreasonably withheld. This
paragraph shall apply as long as the warrants pursuant to the Prior
Offering remain outstanding.
4. Piggyback Registration Rights. If at any time prior to the removal
of restrictive legends pursuant to Rule 144(k) (i.e. two (2) years holding
period), (i) the Company proposes to register shares of Common Stock under the
Securities Act, other than on Forms S-8 , S-4 or any successor forms, in
connection with a public offering of such shares for cash (a "Proposed
Registration") and (ii) a Registration Statement covering the resale of all of
the shares ("Registrable Securities") is not then effective and available for
sales thereof by the Investors, the Company shall, at such time, promptly give
each Investor written notice of such Proposed Registration. Each Investor shall
have ten (10) Business Days from its receipt of such notice to deliver to the
Company a written request specifying the amount of Registrable Securities that
such Investor intends to sell and such Investor's intended method of
distribution. Upon receipt of such request, the Company shall use its best
efforts to cause all Registrable Securities which the Company has been requested
to register to be registered under the Securities Act to the extent necessary
permit their sale or other disposition in accordance with the intended methods
of distribution specified in the request of such Investor.
5. Counterparts/Survival. This Amendment may be executed in one or more
counterparts and each shall constitute an original. Unless modified herein, the
terms and conditions of the existing Subscription Agreement, Warrant Agreement
and Registration Rights Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have agreed to this Amendment and this
Amendment is effective as of the day and year first written above.
eAUTOCLAIMS, INC.,
a Nevada corporation
By:
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XXXX XXXXXX
Chief Executive Officer
INVESTOR:
By:
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As:
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12/28/2004 8:53 AM
#333201 v1 - eAUTOCLAIMS - Amendment Subscription Agt.
