Exhibit 2.1
Agreement and Plan of Merger by and between xXxxxxxxxxx.xxx, Inc and Premier
Express Claims, Inc. dated June 8th 2000.
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger ("Agreement") is made as of the
8th day of June, 2000, by and among XXXXXXXXXXX.XXX, INC., a Nevada corporation
("EAUTOCLAIMS"), XXXXXXXXXXX.XXX ACQUISITION CORPORATION, a South Carolina
corporation ("Merger Sub"), PREMIER EXPRESS CLAIMS, INC., a South Carolina
corporation ("PEC"), and XXXXX XXXXXX and XXXX XXXXXXXXX, collectively referred
to as ?Stockholders? and individually as "Stockholder" or "Xx. Xxxxxx" and "Xx.
Xxxxxxxxx".
RECITAL:
The respective directors and/or executive officers of EAUTOCLAIMS and
PEC and the Stockholders have determined that a business combination between
EAUTOCLAIMS and PEC is in the best interests of their respective companies and
the shareholders thereof and presents an opportunity for their respective
companies to enhance the services provided to their customers and achieve
long-term strategic and financial benefits and, accordingly, have agreed to
effect the merger provided for herein upon the terms and subject to the
conditions set forth herein.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"Balance Sheet" - as defined in Section 3.4.
"Closing" - as defined in Section 2.3.
"Closing Date" - the date and time as of which the Closing actually
takes place.
"Consent" - any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contemplated Transactions" - all of the transactions contemplated by
this Agreement, including, without limitation to:
(a) the merger of PEC with and into EAUTOCLAIMS;
(b) the execution, delivery, and performance of the Employment
Agreements and the Non-competition Agreements; and
(c) the performance by the parties of their respective covenants and
obligations under this Agreement.
"Contract" - any contract (a) under which PEC has or may acquire any
rights, (b) under which PEC has or may become subject to any obligation or
liability, or (c) by which PEC or any of the assets owned or used by it is or
may become bound.
"Disclosure Schedule" - the disclosure schedule delivered by PEC to
EAUTOCLAIMS concurrently with the execution and delivery of this Agreement.
"Employment Agreements" - as defined in Section 2.4.
"Encumbrance" - any charge, claim, condition, equitable interest, lien,
option, pledge, security interest, right of first refusal, or restriction of any
kind, including any restriction on use, voting, transfer, receipt of income, or
exercise of any other attribute of ownership.
"ERISA" - the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"Facilities" - any real property, leaseholds, or other interests
currently or formerly owned or operated by PEC and any equipment (including
motor vehicles) currently or formerly owned or operated by PEC.
"GAAP" - generally accepted United States accounting principles,
applied on a basis consistent with the basis on which the Balance Sheet and the
other financial statements referred to in Section 3.4(b) were prepared.
"Governmental Authorization" - any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"Governmental Body" - any -
nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
federal, state, local, municipal, foreign, or other
government;
governmental authority of any nature (including any
governmental agency, branch, department, official, or entity
and any court or other tribunal); or
body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or
taxing authority or power of any nature.
"Intellectual Property Assets" - as defined in Section 3.22.
"IRC" - the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"IRS" - the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"Knowledge" - an individual will be deemed to have "Knowledge" of a
particular fact or other matter if such individual is actually aware of such
fact or other matter; and a Person (other than an individual) will be deemed to
have "Knowledge" of a particular fact or other matter if any individual who is
serving, or who has at any time served, as a director, officer, partner,
executor, or trustee of such Person (or in any similar capacity) has, or at any
time had, Knowledge of such fact or other matter.
"Legal Requirement" - any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty to which the
parties are subject.
"Non-competition Agreements" - as defined in Section 2.4.
"Order" - any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Organizational Documents" - the articles or certificate of
incorporation and the bylaws of PEC and any amendment to any of the foregoing.
"Person" - any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
"Related Person" - with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such individual's
Family hold (individually or in the aggregate) a Material Interest; and
(d) any Person with respect to which such individual or one or more
members of such individual's Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control with
such specified Person;
(b) any Person that holds a Material Interest in such specified
Person;
(c) each Person that serves as a director, officer, partner, executor,
or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest; and
(e) any Person with respect to which such specified Person serves as a
general partner or a trustee (or in a similar capacity).
For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of voting securities or other voting interests representing at least 51% of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 51% of the outstanding equity securities or
equity interests in a Person.
"Securities Act" - the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.
2. MERGER; CLOSING; PURCHASE PRICE
2.1 MERGER; SURVIVING CORPORATION
Subject to the terms and conditions of this Agreement, at the
Effective Time (as defined in Section 2.5 below), Merger Sub shall be merged
with and into PEC in accordance with this Agreement and the separate corporate
existence of Merger Sub shall thereupon cease (the "Merger"). PEC shall be the
surviving corporation in the Merger (sometimes hereinafter referred to as the
"Surviving Corporation") and shall be a wholly-owned subsidiary of EAUTOCLAIMS.
The Merger shall have the effects specified in Section __________ of the Nevada
Revised Statutes and Section 00-00-000 of the South Carolina Code of Laws of
1976, as amended .
2.2 ARTICLES OF INCORPORATION
At the Effective Time, the Articles of Incorporation of PEC in
effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation until altered, amended or repealed as
provided therein or by law.
2.3 BYLAWS
At the Effective Time, the Bylaws of PEC in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation
until altered, amended or repealed as provided therein or by law.
2.4 DIRECTORS AND OFFICERS
The directors of Merger Sub immediately prior to the Effective
Time shall be the directors of the Surviving Corporation as of the Effective
Time. The officers of Merger Sub immediately prior to the Effective Time shall
be the officers of the Surviving Corporation as of the Effective Time.
2.5 EFFECTIVE TIME
If all of the conditions to the Merger set forth in Section 8
shall have been fulfilled or waived in accordance therewith and this Agreement
shall not have been terminated as provided in Section 9, the parties hereto
shall cause Articles of Merger meeting the respective requirements of the Nevada
Revised Statutes and the South Carolina Revised Statutes to be filed with the
respective Secretary of State of Nevada and South Carolina on, or immediately
following, the Closing Date (as defined in Section 1). The Merger shall become
effective at the time of filing of the Articles of Merger with, and as accepted
by, the Nevada Secretary of State or at such later time which the parties hereto
shall have agreed upon and designated in such filing as the effective time of
the Merger ("Effective Time").
2.6 CONVERSION OF STOCK
At the Effective Time, each share of issued and outstanding stock of
Merger Sub shall, without any action being required by Merger Sub or any other
party to this Agreement, be converted into one (1) share of common stock of PEC.
2.7 MERGER CONSIDERATION
EAUTOCLAIMS shall tender the following at Closing (as defined
in Section 2.8) in exchange for 100% of the issued and outstanding shares of PEC
capital stock ("Shares"):
(a) To be received by Xx. Xxxxxx -
$264,000 by wire transfer; plus -
a certificate for the number of shares of EAUTOCLAIM's
common stock having a value of $1,056,000 based on the share
market closing price of EAUTOCLAIM's common stock for the
trading day occurring on May 17, 2000, but in no event shall
the price for such stock be greater than $4.125 per share
for the purpose of calculating the number of shares of
EAUTOCLAIM's common stock issued to Xx. Xxxxxx hereunder.
(b) To be received by Xx. Xxxxxxxxx -
$66,000 by wire transfer; plus -
a certificate for the number of shares of EAUTOCLAIM's
common stock having a value of $264,000 based on the per
share market closing price of EAUTOCLAIM's common stock for
the trading day occurring on May 17th, 2000, but in no event
shall the price for such stock be greater than $4.125 per
share for the purpose of calculating the number of shares of
EAUTOCLAIM's common stock issued to Xx. Xxxxxxxxx hereunder.
(c) EAUTOCLAIMS shall assume the payment of the principal
balance, as of Closing, of the Promissory Note dated June 16th, 2000 with PEC as
Borrower and Xx. Xxxxxx and Xx. Xxxxxxxxx as Holders ("PEC Promissory Note").
The principal balance assumed by EAUTOCLAIMS shall not exceed $150,000. A new
promissory note will be executed by EAUTOCLAIMS for the assumed principal
balance, with interest of 12% per annum, payable in twelve (12) monthly
installments with interest only payable for the first six (6) months. The PEC
Promissory Note will be cancelled upon execution of the new promissory note by
EAUTOCLAIMS.
2.8 CLOSING
The closing of the Contemplated Transactions provided for in
this Agreement ("Closing") will take place at the offices of EAUTOCLAIMS's
counsel on June 16th, 2000 or at such other time and place as the parties may
agree, but shall be effective on June 16th, 2000 (the ?Effective Date?). Subject
to the provisions of Section 9, failure to consummate the Contemplated
Transactions on the date and time and at the place determined pursuant to this
Section 2.8 will not result in the termination of this Agreement and will not
relieve any party of any obligation under this Agreement.
2.9 CLOSING OBLIGATIONS
At the Closing:
(a) Stockholders will deliver to EAUTOCLAIMS:
(i) certificates representing the Shares for cancellation
thereof;
(ii) employment agreements in the form of Exhibit A executed
by Stockholders (collectively, "Employment
Agreements"); and
(iii)non-competition agreements in the form of Exhibit B
executed by Stockholders (collectively, the
"Non-competition Agreements").
(b) EAUTOCLAIMS will deliver to PEC:
(i) the consideration set forth in Section 2.8; and
(ii) the Employment Agreements executed by EAUTOCLAIMS.
3. REPRESENTATIONS AND WARRANTIES OF PEC
Stockholders and PEC, jointly and severally, represent and warrant to
EAUTOCLAIMS as follows:
3.1 ORGANIZATION AND GOOD STANDING
(a) Part 3.1 of the Disclosure Schedule sets forth PEC's name,
its jurisdiction of incorporation, other jurisdictions in which it is authorized
to do business, and its capitalization (including the identity of each
stockholder and the number of shares held by each). PEC is a corporation duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority to
conduct its business as it is now being conducted, to own or use the properties
and assets that it purports to own or use, and to perform all its obligations
under the Contracts. PEC is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each state or other
jurisdiction in which either the ownership or use of the properties owned or
used by it, or the nature of the activities conducted by it, requires such
qualification.
(b) PEC has delivered to EAUTOCLAIMS copies of the
Organizational Documents of PEC as currently in effect.
3.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding
obligation of PEC enforceable against PEC in accordance with its terms. Upon the
execution and delivery by Stockholders of the Employment Agreements and the
Non-competition Agreements (collectively, the "Stockholders' Closing
Documents"), the Stockholders' Closing Documents will constitute the legal,
valid, and binding obligations of Stockholders, enforceable against Stockholders
in accordance with their respective terms. Stockholders have the absolute and
unrestricted right, power, authority, and capacity to execute and deliver this
Agreement and the Stockholders' Closing Documents and to perform their
obligations under this Agreement and the Stockholders' Closing Documents.
(b) Except as set forth in Part 3.2 of the Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Organizational Documents, or (B) any
resolution adopted by the board of directors or the stockholders of PEC;
(ii) contravene, conflict with, or result in
a violation of, or give any Governmental Body the right to challenge any of the
Contemplated Transactions or to exercise any remedy or obtain any relief under,
any Legal Requirement or any Order to which PEC or either Stockholder, or any of
the assets owned or used PEC, may be subject;
(iii) contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any Governmental Body
the right to revoke, withdraw, suspend, cancel, terminate, or modify, any
Governmental Authorization that is held by PEC or that otherwise relates to the
business of, or any of the assets owned or used by, PEC;
(iv) contravene, conflict with, or result in a
violation or breach of any provision of, or give any Person the right to declare
a default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any Applicable Contract; or
(v) result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets owned or used by PEC.
Except as set forth in Part 3.2 of the Disclosure Schedule,
the Stockholders and/or PEC will not be required to give any notice to or obtain
any Consent from any Person in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the Contemplated
Transactions.
(c) Stockholders are acquiring the EAUTOCLAIMS Shares for
their own respective accounts and not with a view to their distribution within
the meaning of Section 2(11) of the Securities Act. Each Seller is an
"accredited investor" as such term is defined in Rule 501(a) under the
Securities Act.
3.3 CAPITALIZATION
The authorized equity securities of PEC consist of 1,000,000
shares of common stock, par value $1.00 per share, of which 1,000 shares are
issued and outstanding and constitute the Shares. Stockholders are, and will be
on the Closing Date, the record and beneficial owners and holders of the Shares,
free and clear of all Encumbrances. Xx. Xxxxxx owns 800 of the Shares and Xx.
Xxxxxxxxx owns 200 of the Shares. No legend or other reference to any purported
Encumbrance appears upon any certificate representing the Shares. The Shares
have been duly authorized and validly issued and are fully paid and
nonassessable. There are no Contracts relating to the issuance, sale, or
transfer of the Shares. None of the Shares was issued in violation of the
Securities Act or any other Legal Requirement. PEC does not own, and has no
contract to acquire, any equity securities or other securities of any company or
any direct or indirect equity or ownership interest in any other business.
3.4 FINANCIAL STATEMENTS
PEC has delivered to EAUTOCLAIMS: (a) audited balance sheets
of PEC as of June 30, 1999 and the related audited statements of income, changes
in stockholders' equity, and cash flow for the fiscal year then ended, together
with the report thereon of PEC's independent certified public accountants; and
(b) an unaudited balance sheet of PEC as of April 30, 2000, and the related
unaudited statements of income, changes in stockholders' equity, and cash flow
for the ten (10) months then ended, including in each case any notes thereto
("Financial Statements"). The Financial Statements and notes fairly present the
financial condition and the results of operations, changes in stockholders'
equity, and cash flow of PEC as of the respective dates of and for the periods
referred to in the Financial Statements, all in accordance with GAAP, subject,
in the case of interim Financial Statements, to normal recurring year-end
adjustments (the effect of which will not, individually or in the aggregate, be
materially adverse) The Financial Statements reflect the consistent application
of such accounting principles throughout the periods involved, except as
disclosed in any notes to the Financial Statements.
3.5 BOOKS AND RECORDS
The books of account, minute books, stock record books, and
other records of PEC, all of which have been made available to EAUTOCLAIMS, are
complete and correct and have been maintained in accordance with sound business
practices, including the maintenance of an adequate system of internal controls.
The minute books of PEC contain accurate and complete records of all meetings
held of, and corporate action taken by the stockholders, the boards of directors
and committees of the boards of directors of PEC, and no meeting of any such
stockholders, board of directors or committee has been held for which minutes
have not been prepared and are not contained in such minute books. At the
Closing, all of those books and records will be in the possession of PEC.
3.6 TITLE TO PROPERTIES; ENCUMBRANCES
Part 3.6 of the Disclosure Schedule contains a complete and
accurate list of all real property, or interests therein, owned by PEC. PEC owns
(with good and marketable title in the case of any real property) all the
properties and assets (whether real, personal, or mixed and whether tangible or
intangible) that are located in the facilities owned or operated by PEC or
reflected as owned in the books and records of PEC. All material properties and
assets reflected in the Balance Sheet and the Interim Balance Sheet are free and
clear of all Encumbrances, except any mortgages or security interests incurred
in connection with the purchase of such property or assets.
3.7 LEASED PROPERTY
Part 3.7 of the Disclosure Schedule sets forth a true and
complete list of, and PEC has delivered or made available to EAUTOCLAIMS true
and complete copies of, each lease under which PEC is a lessee or lessor. There
is not, with respect to any such lease, any existing event of default, or event
which (with notice or lapse of time or both) would constitute an event of
default, on the part of PEC, and PEC has not received any written notice of any
such event. PEC enjoys peaceful and undisturbed possession under each such
lease. None of the rights of PEC under any lease set forth in Part 3.7 will be
subject to termination or modification and no consent or approval of any third
party is required under such leases as a result of the consummation of the
Contemplated Transactions.
3.8 ACCOUNTS RECEIVABLE
All accounts receivable of PEC that are reflected on the
Balance Sheet or on the accounting records of PEC as of the Closing Date
(collectively, the "Accounts Receivable") represent or will represent valid
obligations arising from sales actually made or services actually performed in
the Ordinary Course of Business. Unless paid prior to the Closing Date, the
Accounts Receivable are or will be as of the Closing Date current and
collectible, net of the respective reserves shown on the Balance Sheet or on the
accounting records of PEC as of the Closing Date (which reserves are adequate
and calculated consistent with past practice). Subject to such reserves, each of
the Accounts Receivable either has been or will be collected in full, without
any set-off, within ninety (90) days after the day on which it first becomes due
and payable. There is no contest, claim, or right of set-off, other than returns
in the Ordinary Course of Business, under any contract with any obligor of an
Accounts Receivable relating to the amount or validity of such Accounts
Receivable. Part 3.8 of the Disclosure Schedule contains a complete and accurate
list of all Accounts Receivable as of April 30, 2000, which list sets forth the
aging of such Accounts Receivable.
3.9 INVENTORY
Any inventory of PEC, whether or not reflected in the
Financial Statements, consists of a quality and quantity usable and salable in
the Ordinary Course of Business, except for obsolete items and items of
below-standard quality, all of which have been written off or written down to
net realizable value in the Financial Statements or on the accounting records of
PEC as of the Closing Date, as the case may be.
3.10 NO UNDISCLOSED LIABILITIES
Except as set forth in Part 3.10 of the Disclosure Schedule,
PEC has no liabilities or obligations of any nature (whether known or unknown
and whether absolute, accrued, contingent, or otherwise), except for liabilities
or obligations reflected or reserved against in the Financial Statements and
current liabilities incurred in the Ordinary Course of Business since the
respective dates thereof.
3.11 TAXES
(a) PEC has filed or caused to be filed (on a timely basis)
all tax returns that are or were required to be filed by PEC since October 1,
1998. PEC has delivered or made available to EAUTOCLAIMS copies of all such tax
returns. PEC has paid, or made provision for the payment of, all taxes that have
or may have become due pursuant to those tax returns or otherwise, or pursuant
to any assessment received by PEC, except such taxes, if any, as are listed in
Part 3.11 of the Disclosure Schedule and are being contested in good faith and
as to which adequate reserves (determined in accordance with GAAP) have been
provided in the Financial Statements.
(b) There exists no proposed tax assessment against PEC except
as disclosed in the Financial Statements or in Part 3.11 of the Disclosure
Schedule. All taxes that PEC is or was required by Legal Requirements to
withhold or collect have been duly withheld or collected and, to the extent
required, have been paid to the proper Governmental Body.
3.12 NO MATERIAL ADVERSE CHANGE
Since the date of the most recent balance sheet contained in
the Financial Statements, there has not been any material adverse change in the
business, operations, properties, prospects, assets, or condition of PEC, and no
event has occurred or circumstance exists that may result in such a material
adverse change.
3.13 EMPLOYEE BENEFITS
(a) As used in this Section 3.13, the following terms have the
meanings set forth below.
"Company Plan" means all Plans of which PEC is or was a
Plan Sponsor, or to which PEC otherwise contributes or has
contributed, or in which PEC otherwise participates or has
participated.
"Other Benefit Obligations" means all obligations,
arrangements, or customary practices, whether or not legally
enforceable, to provide benefits, other than salary, as
compensation for services rendered, to present or former
directors, employees, or agents, other than obligations,
arrangements, and practices that are Plans.
"Pension Plan" has the meaning given in ERISA ?
3(2)(A).
"Plan" has the meaning given in ERISA ? 3(3).
"Plan Sponsor" has the meaning given in ERISA ?
3(16)(B).
"Qualified Plan" means any Plan that meets or purports
to meet the requirements of IRC ? 401(a).
(b) (i) Part 3.13 of the Disclosure Schedule contains a
complete and accurate list of all Company Plans and Company Other Benefit
Obligations.
(ii) Part 3.13 of the Disclosure Schedule sets forth
the financial cost of all obligations owed under any Company Plan or Company
Other Benefit Obligation that is not subject to the disclosure and reporting
requirements of ERISA.
(c) PEC has delivered to EAUTOCLAIMS, or will deliver to
EAUTOCLAIMS within ten days of the date of this Agreement:
(i) all documents that set forth the terms of each PEC Plan
or PEC Other Benefit Obligation, including (A) all plan
descriptions and summary plan descriptions of PEC Plans for which
PEC is required to prepare, file, and distribute plan
descriptions and summary plan descriptions, and (B) all summaries
and descriptions furnished to participants and beneficiaries
regarding PEC Plans or PEC Other Benefit Obligations for which a
plan description or summary plan description is not required;
(ii) all personnel, payroll, and employment manuals and
policies;
(iii) a written description of any PEC Plan or PEC Other
Benefit Obligation that is not otherwise in writing;
(iv) all registration statements filed with respect to any
PEC Plan;
(v) all insurance policies purchased by or to provide
benefits under any Company Plan;
(vi) all contracts with third party administrators,
actuaries, investment managers, consultants, and other
independent contractors that relate to any PEC Plan or PEC Other
Benefit Obligation;
(vii) any notices or reports submitted within the four years
preceding the date of this Agreement by a government agency,
third party administrators, actuaries, investment managers,
consultants, or other independent contractors with respect to any
PEC Plan or PEC Other Benefit Obligation.
(d) Except as set forth in Part 3.13 of the Disclosure
Schedule, PEC has performed all of its respective obligations under all PEC
Plans and PEC Other Benefit Obligations. PEC has made appropriate entries in its
financial records and statements for all obligations and liabilities under such
Plans.
(e) The consummation of the Contemplated Transactions will not
result in the payment, vesting, or acceleration of any benefit.
3.14 COMPLIANCE WITH LEGAL REQUIREMENTS;
GOVERNMENTAL AUTHORIZATIONS
(a) Except as set forth in Part 3.14 of the Disclosure
Schedule:
(i) PEC is, and has at all times since the date of its
organization been, in full compliance with each Legal Requirement
that is or was applicable to it or to the conduct or operation of
its business or the ownership or use of any of its assets;
(ii) no event has occurred or circumstance exists that (with
or without notice or lapse of time) (A) may constitute or result
in a violation by PEC of, or a failure on the part of PEC to
comply with, any Legal Requirement, or (B) may give rise to any
obligation on the part of PEC to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature; and
(iii) PEC has not received, at any time since the date of
its organization, any notice or other communication (whether oral
or written) from any Governmental Body or any other Person
regarding (A) any actual, alleged, possible, or potential
violation of, or failure to comply with, any Legal Requirement,
or (B) any actual, alleged, possible, or potential obligation on
the part of PEC to undertake, or to bear all or any portion of
the cost of, any remedial action of any nature.
(b) Part 3.14 of the Disclosure Schedule contains a complete
and accurate list of each Governmental Authorization that is held by PEC or that
otherwise relates to the business of, or to any of the assets owned or used by,
PEC. Each Governmental Authorization listed or required to be listed in Part
3.14 of the Disclosure Schedule is valid and in full force and effect. Except as
set forth in Part 3.14 of the Disclosure Schedule:
(i) PEC is, and has at all times since the date of its
organization been, in full compliance with all of the terms and
requirements of each Governmental Authorization identified or
required to be identified in Part 3.14 of the Disclosure
Schedule;
(ii) no event has occurred or circumstance exists that may
(with or without notice or lapse of time) (A) constitute or
result directly or indirectly in a violation of or a failure to
comply with any term or requirement of any Governmental
Authorization listed or required to be listed in Part 3.14 of the
Disclosure Schedule, or (B) result directly or indirectly in the
revocation, withdrawal, suspension, cancellation, or termination
of, or any modification to, any Governmental Authorization listed
or required to be listed in Part 3.14 of the Disclosure Schedule;
(iii) PEC has not received, at any time since the date of
its organization, any notice or other communication (whether oral
or written) from any Governmental Body or any other Person
regarding (A) any actual, alleged, possible, or potential
violation of or failure to comply with any term or requirement of
any Governmental Authorization, or (B) any actual, proposed,
possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any Governmental
Authorization; and
(iv) all applications required to have been filed for the
renewal of the Governmental Authorizations listed or required to
be listed in Part 3.14 of the Disclosure Schedule have been duly
filed on a timely basis with the appropriate Governmental Bodies,
and all other filings required to have been made with respect to
such Governmental Authorizations have been duly made on a timely
basis with the appropriate Governmental Bodies.
The Governmental Authorizations listed in Part 3.14 of the
Disclosure Schedule collectively constitute all of the Governmental
Authorizations necessary to permit PEC to lawfully conduct and operate their
businesses in the manner they currently conduct and operate such businesses and
to permit PEC to own and use their assets in the manner in which they currently
own and use such assets.
3.15 LEGAL PROCEEDINGS; ORDERS
(a) Except as set forth in Part 3.15 of the Disclosure
Schedule, there is no pending proceeding:
(i) that has been commenced by or against PEC or that
otherwise relates to or may affect the business of, or any of the
assets owned or used by, PEC; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making
illegal, or otherwise interfering with, any of the Contemplated Transactions.
To the Knowledge of Stockholders and PEC, (1) no such
proceeding has been threatened, and (2) no event has occurred or circumstance
exists that may give rise to or serve as a basis for the commencement of any
such proceeding. Stockholders have delivered to EAUTOCLAIMS copies of all
pleadings, correspondence, and other documents relating to each proceeding
listed in Part 3.15 of the Disclosure Schedule. The proceedings listed in Part
3.15 of the Disclosure Schedule will not have a material adverse effect on the
business, operations, assets, condition, or prospects of PEC.
(b) Except as set forth in Part 3.15 of the Disclosure
Schedule:
(i) there is no Order to which PEC, or any of the assets
owned or used by PEC, is
subject;
(ii) neither Seller is subject to any Order that relates to
the business of, or any of the assets owned or used by, PEC; and
(iii) to the Knowledge of Stockholders and PEC, no officer,
director, agent, or employee of PEC is subject to any Order that
prohibits such officer, director, agent, or employee from
engaging in or continuing any conduct, activity, or practice
relating to the business of PEC.
(c) Except as set forth in Part 3.15 of the Disclosure
Schedule:
(i) PEC is, and has at all times since the date of its
organization been, in full compliance with all of the terms and
requirements of each Order to which it, or any of the assets
owned or used by it, is or has been subject;
(ii) no event has occurred or circumstance exists that may
constitute or result in (with or without notice or lapse of time)
a violation of or failure to comply with any term or requirement
of any Order to which PEC, or any of the assets owned or used by
PEC, is subject; and
(iii) PEC has not received, at any time since the date of
its organization, any notice or other communication (whether oral
or written) from any Governmental Body or any other Person
regarding any actual, alleged, possible, or potential violation
of, or failure to comply with, any term or requirement of any
Order to which PEC, or any of the assets owned or used by PEC, is
or has been subject.
3.16 ABSENCE OF CERTAIN CHANGES AND EVENTS
Except as set forth in Part 3.16 of the Disclosure Schedule,
since the date of the last balance sheet that is part of the Financial
Statements, PEC has conducted its businesses only in the Ordinary Course of
Business and there has not been any:
(a) change in PEC's authorized or issued capital stock; grant
of any stock option or right to purchase shares of capital stock of PEC;
issuance of any security convertible into such capital stock; grant of any
registration rights; purchase, redemption, retirement, or other acquisition by
PEC of any shares of any such capital stock; or declaration or payment of any
dividend or other distribution or payment in respect of shares of capital stock;
(b) amendment to the Organizational Documents of PEC;
(c) payment or increase by PEC of any bonuses, salaries, or
other compensation to any stockholder, director, officer, or (except in the
Ordinary Course of Business) employee or entry into any employment, severance,
or similar contract with any director, officer, or employee;
(d) adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement, or other employee benefit plan for or with any employees of
PEC;
(e) damage to or destruction or loss of any asset or property
of PEC, whether or not covered by insurance, materially and adversely affecting
the properties, assets, business, financial condition, or prospects of PEC,
taken as a whole;
(f) entry into, termination of, or receipt of notice of
termination of any license, distributorship, dealer, sales representative, joint
venture, credit, or similar agreement;
(g) sale (other than sales of inventory in the Ordinary Course
of Business), lease, or other disposition of any asset or property of PEC or
mortgage, pledge, or imposition of any lien or other encumbrance on any material
asset or property of PEC, including the sale, lease, or other disposition of any
of the Intellectual Property Assets;
(h) cancellation or waiver of any claims or rights
with a value to PEC in excess of $25,000.00; or
(i) material change in the accounting methods used by PEC.
3.17 CONTRACTS; NO DEFAULTS
(a) Part 3.17(a) of the Disclosure Schedule
contains a complete and accurate list, and PEC has delivered to EAUTOCLAIMS true
and complete copies, of:
(i) each written Contract that involves performance of
services or delivery of goods or materials by PEC of an amount or
value in excess of $25,000.00;
(ii) each lease, rental or occupancy agreement or other
agreement affecting the ownership of, leasing of, title to, use
of, or any leasehold or other interest in, any real or personal
property;
(iii) each licensing agreement or other Contract with
respect to patents, trademarks, copyrights, software, or other
intellectual property, including agreements with current or
former employees, consultants, or contractors regarding the
appropriation or the non-disclosure of any of the Intellectual
Property Assets;
(iv) each joint venture, strategic alliance, partnership,
and other Contract (however named) involving a sharing of product
design and development, profits, losses, costs, or liabilities by
PEC with any other Person;
(v) each Contract containing covenants that in any way
purport to restrict the business activity of PEC or limit the
freedom of PEC to engage in any line of business or to compete
with any Person;
(vi) each Contract providing for payments to or by any
Person based on production, sales, purchases, or profits, other
than direct payments for goods including any manufacturing
license, product distribution, and sales representation
agreements;
(vii) each Contract entered into other than in the Ordinary
Course of Business that contains or provides for an express
undertaking by PEC to be responsible for consequential damages;
(viii) each Contract for capital expenditures in excess of
$25,000.00; and (ix) each written warranty, guaranty, and or
other similar undertaking with respect to contractual performance
extended by PEC other than in the Ordinary Course of Business.
(b) Except as set forth in Part 3.17(b) of the
Disclosure Schedule:
(i) neither of the Stockholders nor a Related Person of
either Stockholder has or may acquire any rights under, and
neither Stockholder has or may become subject to any obligation
or liability under, any Contract that relates to the business of,
or any of the assets owned or used by, PEC; and
(ii) to the Knowledge of Stockholders and PEC, no officer,
director, agent, employee, consultant, or contractor of PEC is
bound by any Contract that purports to limit the ability of such
officer, director, agent, employee, consultant, or contractor to
(A) engage in or continue any conduct, activity, or practice
relating to the business of PEC, or (B) assign to PEC or to any
other Person any rights to any invention, improvement, or
discovery.
(c) Except as set forth in Part 3.17(c) of the
Disclosure Schedule, each Contract identified or required to be identified in
Part 3.17(a) of the Disclosure Schedule is in full force and effect and is valid
and enforceable in accordance with its terms.
(d) Except as set forth in Part 3.17(d) of the
Disclosure Schedule:
(i) PEC is in full compliance with all applicable terms and
requirements of each Contract under which PEC has or had any
obligation or liability or by which PEC or any of the assets
owned or used by PEC is or was bound;
(ii) no event has occurred or circumstance exists that (with
or without notice or lapse of time) may contravene, conflict
with, or result in a violation or breach of, or give PEC the
right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Contract; and
(iii) PEC has not given to, or received from, any other
Person any notice or other communication (whether oral or
written) regarding any actual, alleged, possible, or potential
violation or breach of, or default under, any Contract.
(e) The Contracts relating to the sale,design,
manufacture, or provision of products or services by PEC have been entered into
in the Ordinary Course of Business and have been entered into without the
commission of any act alone or in concert with any other Person, or any
consideration having been paid or promised, that is or would be in violation of
any Legal Requirement.
3.18 INSURANCE
(i) PEC has delivered to EAUTOCLAIMS (a) true and
complete copies of all policies of insurance to which PEC is a party or under
which PEC, or any director of PEC, is or has been covered at any time within the
twenty (20) months preceding the date of this Agreement; and (b) any statement
by the auditor of PEC's financial statements with regard to the adequacy of
PEC's insurance coverage or of the reserves for claims.
(ii) PEC has paid all premiums due, and has
otherwise performed all of its obligations, under each policy to which PEC is a
party or that provides coverage to PEC or any director thereof.
3.19 ENVIRONMENTAL MATTERS
Except as set forth in part 3.19 of the Disclosure
Schedule, PEC is, and at all times has been, in full compliance with, and has
not been and is not in violation of or liable under, any environmental law or
regulation.
3.20 EMPLOYEES
(a) Part 3.20 of the Disclosure Schedule
contains a complete and accurate list of the following information for each
employee or director of PEC, including each employee on leave of absence or
layoff status: employer; name; job title; current compensation paid or payable
and any change in compensation since March 1, 2000; vacation accrued; and
service credited for purposes of vesting and eligibility to participate under
any Company pension, retirement, profit-sharing, thrift-savings, deferred
compensation, stock bonus, stock option, cash bonus, employee stock ownership
(including investment credit or payroll stock ownership), severance pay,
insurance, medical, welfare, or vacation plan, other employee pension benefit
plan or employee benefit plan.
(b) No employee or director of PEC is a party
to, or is otherwise bound by, any agreement or arrangement, including any
confidentiality, non-competition, or proprietary rights agreement, between such
employee or director and any other person or entity ("Proprietary Rights
Agreement") that in any way adversely affects or will affect (i) the performance
of his duties as an employee or director of PEC, or (ii) the ability of PEC to
conduct its business, including any Proprietary Rights Agreement with
Stockholders or PEC by any such employee or director. To Stockholders'
Knowledge, no director, officer, or other key employee of PEC intends to
terminate his employment with PEC.
3.21 INTELLECTUAL PROPERTY
(a) The term "Intellectual Property Assets" includes:
(i) all fictional business names, trading names, registered
and unregistered trademarks, service marks, and applications
therefor (collectively, "Marks");
(ii) all patents, patent applications, and inventions and
discoveries that may be patentable (collectively, "Patents");
(iii) all registered and unregistered copyrights in both
published works and unpublished works (collectively,
"Copyrights"); and
(v) all know-how, trade secrets, confidential information,
customer lists, software, technical information, formulas, data,
process technology, specifications, plans, drawings, product
design information and blue prints (collectively, "Trade
Secrets").
(b) Part 3.21(b) of the Disclosure Schedule contains a
complete and accurate list and summary description, including any royalties paid
or received by PEC, of all Contracts relating to the Intellectual Property
Assets to which PEC is a party or by which PEC is bound, except for any license
implied by the sale of a product and perpetual, paid-up licenses for commonly
available software programs with a value of less than $1,000 under which PEC is
the licensee. There are no outstanding and, to Stockholders' Knowledge, no
threatened disputes or disagreements with respect to any such agreement.
(c) Know-How Necessary for the Business
(i) The Intellectual Property Assets
identified in Part 3.22 of the Disclosure Schedule, and the Trade Secrets that
are owned by, or for which an absolute right to use is held by, PEC, are all of
the intellectual property and know-how that are necessary and required for the
operation of all aspects of PEC's business as it is currently conducted. With
respect to all such Intellectual Property Assets, PEC is the owner of all right,
title, and interest therein, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims, or has the absolute
right to the use thereof pursuant to the terms of a valid and enforceable
written agreement.
(ii) Except as set forth in Part 3.22(c) of the
Disclosure Schedule, all former and current employees of PEC have executed
written contracts with PEC that assign to PEC all rights to any inventions,
improvements, discoveries, or information relating to the business of PEC. No
employee of PEC has entered into any contract that restricts or limits in any
way the scope or type of work in which the employee may be engaged or requires
the employee to transfer, assign, or disclose information concerning his work to
anyone other than PEC.
(d) Patents
(i) Part 3.22(d) of the Disclosure Schedule contains a
complete and accurate list and summary description of all
Patents.
(ii) All of the issued Patents are currently in compliance
with formal legal requirements (including payment of filing,
examination, and maintenance fees and proofs of working or use),
are valid and enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within ninety days after the
Closing Date.
(iii) No Patent has been or is now involved in any
interference, reissue, reexamination, or opposition proceeding.
To Stockholders' Knowledge, there is no potentially interfering
patent or patent application of any third party.
(iv) No Patent is infringed and, to Stockholders' Knowledge,
no Patent, or the use thereof, has been challenged or threatened
in any way. None of the products manufactured and sold, nor any
process or know-how used, by PEC infringes or is alleged to
infringe any patent or other proprietary right of any other
Person.
(v) All products made, used, or sold under the Patents have
been marked with the proper patent notice.
(e) Trademarks
(i) Part 3.22(e) of the Disclosure Schedule contains a
complete and accurate list and summary description of all Marks,
including the registration date and number of all Marks that have
been registered.
(ii) All Marks that have been registered with the United
States Patent and Trademark Office or with any state are
currently in compliance with all formal legal requirements
(including the timely post-registration filing of affidavits of
use and incontestability and renewal applications), are valid and
enforceable, and are not subject to any maintenance fees or taxes
or actions falling due within ninety days after the Closing Date.
(iii) No Xxxx has been or is now involved in any opposition,
invalidation, or cancellation and, to Stockholders' Knowledge, no
such action is threatened with the respect to any of the Marks.
(iv) To Stockholders' Knowledge, there is no potentially
interfering trademark or trademark application of any third
party.
(v) No Xxxx is infringed and, to Stockholders' Knowledge, no
Xxxx, or the use thereof, has been challenged or threatened in
any way. None of the Marks used by PEC infringes or is alleged to
infringe any trade name, trademark, or service xxxx of any third
party.
(vi) All products and materials containing a Xxxx xxxx the
proper common law or federal registration notice where permitted
by law.
(f) Copyrights
(i) Part 3.22(f) of the Disclosure Schedule contains a
complete and accurate list and summary description of all
Copyrights, including the registration date and number of all
Copyrights that have been registered.
(ii) All Copyrights that have been registered are currently
in compliance with formal legal requirements, are valid and
enforceable, and are not subject to any maintenance fees or taxes
or actions falling due within ninety days after the date of
Closing.
(iii) No Copyright is infringed or, to Stockholders'
Knowledge, has been challenged or threatened in any way. None of
the subject matter of any of the Copyrights infringes or is
alleged to infringe any copyright of any third party or is a
derivative work based on the work of a third party.
(iv) All works encompassed by the Copyrights have been
marked with the proper copyright notice.
(g) Trade Secrets
(i) With respect to each Trade Secret, the documentation
relating to such Trade Secret is current, accurate, and
sufficient in detail and content to identify and explain it and
to allow its full and proper use without reliance on the
knowledge or memory of any individual.
(ii) Stockholders and PEC have taken all reasonable
precautions to protect the secrecy, confidentiality, and value of
their Trade Secrets.
(iii) PEC has good title or an absolute (but not necessarily
exclusive) right to use the Trade Secrets. The Trade Secrets are
not part of the public knowledge or literature, and, to
Stockholders' Knowledge, have not been used, divulged, or
appropriated either for the benefit of any Person (other than
PEC) or to the detriment of the Company. No Trade Secret, or the
use thereof, is subject to any adverse claim or has been
challenged or threatened in any way.
(iv) Part 3.22(g) of the Disclosure Schedule contains a
complete list of all Trade Secrets that are licensed by PEC as
licensee or licensor.
3.23 CERTAIN PAYMENTS
Since the date of PEC's organization, neither PEC nor any
director, officer, agent, or employee of PEC, has directly or indirectly (a)
made any payment in violation of any Legal Requirement, or (b) established or
maintained any fund or asset that has not been recorded in the books and records
of PEC.
3.24 DISCLOSURE
(a) No representation or warranty of Stockholders in this
Agreement and no statement in the Disclosure Schedule omits to state a material
fact that is necessary to make such statements complete and accurate.
(b) There is no fact known to either Stockholder that has
specific application to either Stockholder or PEC (other than general economic
or industry conditions) that materially adversely affects the assets, business,
prospects, financial condition, or results of operations of the Company that has
not been set forth in this Agreement or the Disclosure Schedule.
3.25 RELATIONSHIPS WITH RELATED PERSONS
Neither Stockholder has any interest in any property (whether
real, personal, or mixed and whether tangible or intangible), used in or
pertaining to PEC's business. Neither Stockholder has or is engaged in
competition with PEC with respect to any of the products or services of PEC.
3.26 BROKERS OR FINDERS
Stockholders and their agents have incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement.
3.27 YEAR 2000 COMPLIANCE
PEC's Information Technology (as defined below) is designed to
be used during and after the calendar year 2000, and such Information Technology
used during each such time period will accurately receive, provide and process
date/time data (including calculating, comparing and sequencing) from, into and
between the 20th and 21st centuries, including the year 2000, and leap year
calculations, and will not malfunction, cease to function, or provide invalid or
incorrect results as a result of date/time data, to the extent that other
Information Technology, used in combination with PEC's Information Technology,
properly exchanges date/time data with it. For purposes of this Section,
"Information Technology" shall mean computer system and application software,
computer firmware, computer hardware (whether general or specific purpose), and
other similar or related items of automated, computerized, and/or software
systems.
4. REPRESENTATIONS AND WARRANTIES OF EAUTOCLAIMS
EAUTOCLAIMS represents and warrants to Stockholders as follows:
4.1 ORGANIZATION AND GOOD STANDING
EAUTOCLAIMS is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Nevada.
4.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding
obligation of EAUTOCLAIMS, enforceable against EAUTOCLAIMS in accordance with
its terms. Upon the execution and delivery by EAUTOCLAIMS of the Employment
Agreements, (collectively, the "EAUTOCLAIMS's Closing Documents"), the
EAUTOCLAIMS's Closing Documents will constitute the legal, valid, and binding
obligations of EAUTOCLAIMS, enforceable against EAUTOCLAIMS in accordance with
their respective terms. EAUTOCLAIMS has the absolute and unrestricted right,
power, and authority to execute and deliver this Agreement and the EAUTOCLAIMS's
Closing Documents and to perform its obligations under this Agreement and the
EAUTOCLAIMS's Closing Documents.
(b) Neither the execution and delivery of this Agreement by
EAUTOCLAIMS nor the consummation or performance of any of the Contemplated
Transactions by EAUTOCLAIMS will give any Person the right to prevent, delay, or
otherwise interfere with any of the Contemplated Transactions pursuant to:
(i) any provision of EAUTOCLAIMS's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
stockholders of EAUTOCLAIMS;
(iii) any Legal Requirement or Order to which EAUTOCLAIMS
may be subject; or
(iv) any Contract to which EAUTOCLAIMS is a party or by
which EAUTOCLAIMS may be bound.
Except for its shareholders and directors, EAUTOCLAIMS is not
and will not be required to obtain any Consent from any Person in connection
with the execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
4.3 CERTAIN PROCEEDINGS
There is no pending proceeding that has been commenced against
EAUTOCLAIMS and that challenges, or may have the effect of preventing, delaying,
making illegal, or otherwise interfering with, any of the Contemplated
Transactions. To EAUTOCLAIMS's Knowledge, no such proceeding has been
Threatened.
4.4 BROKERS OR FINDERS
EAUTOCLAIMS and its officers and agents have incurred no
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Agreement.
4.6 SHARES GIVEN IN CONSIDERATION
The shares of EAUTOCLAIMS's common stock to be received by
Stockholders constitute 2.8 % of the authorized issued and outstanding common
stock, based on 11,400,000 fully diluted shares, of EAUTOCLAIMS as of the date
hereof. The total capitalization of EAUTOCLAIMS, including all authorized,
issued and outstanding shares of capital stock, is as set forth in Exhibit E.
Prior to the Closing, EAUTOCLAIMS will not issue any additional shares,
warrants, rights, or options, or enter into any other transactions for the
acquisition or issuance of additional shares of EAUTOCLAIMS?s capital stock,
except as described in Exhibit E. Stockholders shall have the same antidilution
rights as are in effect for any shareholder of EAUTOCLAIMS as of the execution
of this Agreement or which come into effect after the execution of this
Agreement.
5. COVENANTS OF STOCKHOLDERS PRIOR TO CLOSING DATE
5.1 ACCESS AND INVESTIGATION
Between the date of this Agreement and the Closing Date,
Stockholders will, and will cause PEC and its representatives to, (a) afford
EAUTOCLAIMS and its representatives and prospective lenders and their
representatives (collectively, "EAUTOCLAIMS's Advisors") full and free access to
PEC's personnel, properties, contracts, books and records, and other documents
and data, (b) furnish EAUTOCLAIMS and EAUTOCLAIMS's Advisors with copies of all
such contracts, books and records, and other existing documents and data as
EAUTOCLAIMS may reasonably request, and (c) furnish EAUTOCLAIMS and
EAUTOCLAIMS's Advisors with such additional financial, operating, and other data
and information as EAUTOCLAIMS may reasonably request.
5.2 OPERATION OF THE BUSINESSES OF PEC
Between the date of this Agreement and the Closing Date, Stockholders will,
and will cause PEC to:
(a) conduct the business of PEC only in the Ordinary
Course of Business;
(b) use their best efforts to preserve intact the current
business organization of PEC, keep available the services of the current
officers, employees, and agents of PEC, and maintain the relations and good will
with suppliers, customers, landlords, creditors, employees, agents, and others
having business relationships with PEC;
(c) confer with EAUTOCLAIMS concerning operational
matters of a material nature; and
(d) otherwise report periodically to EAUTOCLAIMS concerning
the status of the business, operations, and finances of PEC.
5.3 REQUIRED APPROVALS
As promptly as practicable after the date of this Agreement,
Stockholders will, and will cause PEC to, make all filings required by Legal
Requirements to be made by them in order to consummate the Contemplated
Transactions.
5.4 NOTIFICATION
Between the date of this Agreement and the Closing Date, each
Stockholder will promptly notify EAUTOCLAIMS in writing if such Stockholder or
PEC becomes aware of any fact or condition that causes or constitutes a breach
of any of PEC's representations and warranties as of the date of this Agreement,
or if such Stockholder or PEC becomes aware of the occurrence after the date of
this Agreement of any fact or condition that would cause or constitute a breach
of any such representation or warranty had such representation or warranty been
made as of the time of occurrence or discovery of such fact or condition. Should
any such fact or condition require any change in the Disclosure Schedule, PEC
will promptly deliver to EAUTOCLAIMS a supplement to the Disclosure Schedule
specifying such change.
5.5 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS
Except as expressly provided in this Agreement, Stockholders
will cause all indebtedness owed to PEC by either Stockholder or any Related
Person of either Stockholder to be paid in full prior to Closing.
5.6 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated
pursuant to Section 9, Stockholders will not, directly or indirectly, solicit,
initiate, or encourage any inquiries or proposals from, discuss or negotiate
with, provide any non-public information to, or consider the merits of any
unsolicited inquiries or proposals from, any Person (other than EAUTOCLAIMS)
relating to any transaction involving the sale of the business or assets (other
than in the Ordinary Course of Business) of PEC, or any of the capital stock of
PEC, or any merger, consolidation, business combination, or similar transaction
involving PEC.
6. COVENANTS OF EAUTOCLAIMS PRIOR TO CLOSING DATE
6.1 APPROVALS OF GOVERNMENTAL BODIES
As promptly as practicable after the date of this Agreement,
EAUTOCLAIMS will make any filings required by Legal Requirements to be made by
them to consummate the Contemplated Transactions. Between the date of this
Agreement and the Closing Date, EAUTOCLAIMS will cooperate with Stockholders
with respect to all filings that Stockholders are required by Legal Requirements
to make in connection with the Contemplated Transactions, and cooperate with
Stockholders in obtaining all consents identified in Part 3.2 of the Disclosure
Schedule; provided that this Agreement will not require EAUTOCLAIMS to dispose
of or make any change in any portion of its business or to incur any other
burden to obtain a Governmental Authorization.
7. CONDITIONS PRECEDENT TO EAUTOCLAIMS'S OBLIGATION TO CLOSE
EAUTOCLAIMS's obligation to take the actions required to be taken by
EAUTOCLAIMS at the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be waived by
EAUTOCLAIMS, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS
All of PEC's and Stockholders' representations and warranties
in this Agreement must have been accurate in all material respects as of the
date of this Agreement, and must be accurate in all material respects as of the
Closing Date as if made on the Closing Date, without giving effect to any
supplement to the Disclosure Schedule.
7.2 PERFORMANCE
(a) All of the covenants and obligations that PEC and
Stockholders are required to perform or to comply with pursuant to this
Agreement at or prior to the Closing must have been duly performed and complied
with in all material respects.
(b) Each document required to be delivered pursuant to
Section 2.4 must have been delivered.
7.3 CONSENTS
This Agreement and the Contemplated Transactions must be
approved by the majority affirmative vote of EAUTOCLAIMS's directors and
stockholders. Each of the Consents identified in Part 3.2 of the Disclosure
Schedule must have been obtained and must be in full force and effect.
7.4 ADDITIONAL DOCUMENTS
Each of the following documents must have been delivered to
EAUTOCLAIMS:
(a) an opinion of Xxxxxx, Xxxxxxxx & Xxxxxx, PC, dated the
Closing Date, in the form of Exhibit C; and
(b) such other documents as EAUTOCLAIMS may reasonably request
for the purpose of (i) enabling its counsel to provide the opinion referred to
in Section 8.4(a), (ii) evidencing the accuracy of any of Stockholders'
representations and warranties, (iii) evidencing the performance by either
Stockholder of, or the compliance by either Stockholder with, any covenant or
obligation required to be performed or complied with by such Stockholder, (iv)
evidencing the satisfaction of any condition referred to in this Section 7, or
(v) otherwise facilitating the consummation or performance of any of the
Contemplated Transactions.
7.5 NO PROCEEDINGS
Since the date of this Agreement, there must not have been
commenced or threatened against EAUTOCLAIMS, or against any Person affiliated
with EAUTOCLAIMS, any Proceeding (a) involving any challenge to, or seeking
damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the Contemplated Transactions.
7.6 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS
There must not have been made or threatened by any Person any
claim asserting that such Person (a) is the holder or the beneficial owner of,
or has the right to acquire or to obtain beneficial ownership of, any stock of,
or any other voting, equity, or ownership interest in, PEC, or (b) is entitled
to all or any portion of the consideration payable hereunder..
7.7 NO PROHIBITION
Neither the consummation nor the performance of any of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time), materially contravene, or conflict with, or result in a
material violation of, or cause EAUTOCLAIMS or any Person affiliated with
EAUTOCLAIMS to suffer any material adverse consequence under, any applicable
Legal Requirement or Order.
7.8 DUE DILIGENCE
EAUTOCLAIMS must complete its due diligence review of PEC and
be satisfied with all elements of the various Company matters that have been
reviewed; or, if EAUTOCLAIMS is not satisfied with any matter, Stockholders or
PEC must have corrected any unsatisfactory item(s) after receipt of a notice
thereof from EAUTOCLAIMS.
8. CONDITIONS PRECEDENT TO STOCKHOLDERS' OBLIGATION TO CLOSE
Stockholders' obligation to take the actions required to be taken by
Stockholders at the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be waived by
Stockholders, in whole or in part):
8.1 ACCURACY OF REPRESENTATIONS
All of EAUTOCLAIMS's representations and warranties in this
Agreement must have been accurate in all material respects as of the date of
this Agreement and must be accurate in all material respects as of the Closing
Date as if made on the Closing Date.
8.2 EAUTOCLAIMS'S PERFORMANCE
(a) All of the covenants and obligations that EAUTOCLAIMS is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing must have been performed and complied with in all material respects.
(b) EAUTOCLAIMS must have delivered each of the documents
required to be delivered by EAUTOCLAIMS pursuant to Section 2.7 and must have
made the cash payments required to be made by EAUTOCLAIMS pursuant to Sections
2.7.
(c) EAUTOCLAIMS shall deliver such documentation as
Stockholders may reasonably request to the effect that Stockholders shall have
the antidilution rights specified in Section 4.6.
8.3 CONSENTS
Each of the Consents identified in Part 3.2 of the Disclosure Schedule must
have been obtained and must be in full force and effect.
8.4 ADDITIONAL DOCUMENTS
EAUTOCLAIMS must have caused the following documents to be
delivered to Stockholders:
(a) an opinion of Johnson, Blakely, Pope, Bokor, Xxxxxx &
Xxxxx, P.A., dated the Closing Date, in the form of Exhibit D; and
(b) such other documents as Stockholders may reasonably
request for the purpose of (i) enabling their counsel to provide the opinion
referred to in Section 7.4(a), (ii) evidencing the accuracy of any
representation or warranty of EAUTOCLAIMS, (iii) evidencing the performance by
EAUTOCLAIMS of, or the compliance by EAUTOCLAIMS with, any covenant or
obligation required to be performed or complied with by EAUTOCLAIMS, (ii)
evidencing the satisfaction of any condition referred to in this Section 8, or
(v) otherwise facilitating the consummation of any of the Contemplated
Transactions.
8.5 NO INJUNCTION
There must not be in effect any Legal Requirement or any
injunction or other Order that prohibits the Contemplated Transactions and that
has been adopted or issued, or has otherwise become effective, since the date of
this Agreement.
8.6 X-XXXXXXXXXX.XXX, INC. MERGER
A merger of Xxxxxxxxxxx.xxx Inc., a Delaware Corporation, with
Transformation Processing, Inc., a Nevada corporation, shall have occurred on
terms substantially in accordance with that certain Agreement and Plan of
Merger, a copy of which is attached hereto as Exhibit F.
9. TERMINATION
9.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the
Closing, be terminated:
(a) by either EAUTOCLAIMS, PEC or Stockholders if a material
breach of any provision of this Agreement has been committed by a party and such
breach has not been waived;
(b) (i) by EAUTOCLAIMS if any of the conditions in Section 7
has not been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
EAUTOCLAIMS to comply with its obligations under this Agreement) and EAUTOCLAIMS
has not waived such condition on or before the Closing Date; or (ii) by PEC or
Stockholders if any of the conditions in Section 8 has not been satisfied of the
Closing Date or if satisfaction of such a condition is or becomes impossible
(other than through the failure of PEC or Stockholders to comply with their
obligations under this Agreement) and PEC or Stockholdrs have not waived such
condition on or before the Closing Date;
(c) by mutual consent of EAUTOCLAIMS, PEC and Stockholders; or
(d) by either EAUTOCLAIMS, PEC or Stockholders if the Closing
has not occurred (other than through the failure of any party seeking to
terminate this Agreement to comply fully with its obligations under this
Agreement) on or before May 31, 2000, or such later date as the parties may
agree upon.
9.2 EFFECT OF TERMINATION
Each party's right of termination under Section 9.1 is in
addition to any other rights it may have under this Agreement or otherwise, and
the exercise of a right of termination will not be an election of remedies. If
this Agreement is terminated pursuant to Section 9.1, all further obligations of
the parties under this Agreement will terminate, except that the obligations in
Sections 11.1 and 11.3 will survive; provided, however, that if this Agreement
is terminated by a party because of the breach of the Agreement by the other
party or because one or more of the conditions to the terminating party's
obligations under this Agreement is not satisfied as a result of the other
party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
10. INDEMNIFICATION; REMEDIES
10.1 SURVIVAL OF TERMS
All representations, warranties, covenants, and obligations in
this Agreement, the Disclosure Schedule, the supplements to the Disclosure
Schedule, and any other certificate or document delivered pursuant to this
Agreement will survive the Closing. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of damages, or other remedy based on such
representations, warranties, covenants, and obligations.
10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY STOCKHOLDERS
Stockholders, jointly and severally, will indemnify and hold
harmless EAUTOCLAIMS, PEC, and their respective Representatives, stockholders,
controlling persons, and affiliates (collectively, the "Indemnified Persons")
for, and will pay to the Indemnified Persons the amount of, any loss, liability,
claim, damage (including incidental and consequential damages), expense
(including costs of investigation and defense and reasonable attorneys' fees) or
diminution of value, whether or not involving a third-party claim (collectively,
"Damages"), arising, directly or indirectly, from or in connection with:
(a) any breach of any representation or warranty made by
Stockholders in this Agreement, the Disclosure Schedule, the supplements to the
Disclosure Schedule, or any other certificate or document delivered by
Stockholders pursuant to this Agreement;
(b) any breach by either Stockholder of any covenant or
obligation of such Seller in this Agreement;
(c) any product shipped or manufactured by, or any services
provided by, PEC prior to the Closing Date; or
(d) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with either Stockholder or PEC (or
any Person acting on their behalf) in connection with any of the Contemplated
Transactions.
The remedies provided in this Section 10.2 will not be exclusive of or
limit any other remedies that may be available to EAUTOCLAIMS.
10.3 ESCROW; RIGHT OF SET-OFF
Upon notice to Stockholders specifying in reasonable detail
the basis for such set-off, EAUTOCLAIMS may set off any amount to which it may
be entitled under this Section 10 against amounts otherwise payable under this
Agreement or may give notice of a Claim in such amount under the Escrow
Agreement. The exercise of such right of set-off by EAUTOCLAIMS in good faith,
whether or not ultimately determined to be justified, will not constitute an
event of default under this Agreement. Neither the exercise of nor the failure
to exercise such right of set-off or to give a notice of a Claim under the
Escrow Agreement will constitute an election of remedies or limit EAUTOCLAIMS in
any manner in the enforcement of any other remedies that may be available to it.
11. GENERAL PROVISIONS
11.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each
party to this Agreement will bear its respective expenses incurred in connection
with the preparation, execution, and performance of this Agreement and the
Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants.
11.2 PUBLIC ANNOUNCEMENT
Any public announcement or similar publicity with respect to
this Agreement or the Contemplated Transactions will be issued, if at all, at
such time and in such manner as EAUTOCLAIMS determines. Unless consented to by
EAUTOCLAIMS in advance or required by Legal Requirements, prior to the Closing
Stockholders shall, and shall cause PEC to, keep this Agreement strictly
confidential and may not make any disclosure of this Agreement to any Person.
11.3 CONFIDENTIALITY
Between the date of this Agreement and the Closing Date,
EAUTOCLAIMS, PEC and Stockholders shall maintain in confidence, and will cause
the directors, officers, employees, agents, and advisors of EAUTOCLAIMS and PEC
to maintain in confidence, any written, oral, or other information obtained in
confidence from another party in connection with this Agreement or the
Contemplated Transactions, unless (a) such information is already known to such
party or to others not bound by a duty of confidentiality or such information
becomes publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the Contemplated
Transactions, or (c) the furnishing or use of such information is required by
legal proceedings.
If the Contemplated Transactions are not consummated, each
party will return or destroy as much of such written information as the other
party may reasonably request. Whether or not the Closing takes place,
Stockholders waive, and will upon EAUTOCLAIMS's request cause PEC to waive, any
cause of action, right, or claim arising out of the access of EAUTOCLAIMS or its
representatives to any trade secrets or other confidential information of PEC
except for the intentional competitive misuse by EAUTOCLAIMS of such trade
secrets or confidential information.
11.4 NOTICES
All notices, consents, waivers, and other communications under
this Agreement must be in writing and will be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Stockholders: Xxxxx Xxxxxx and Xxxx Xxxxxxxxx
c/o Xxxxx Xxxxxx
000 Xxxxxxx Xxxxx Xxxxx
Xxxx, XX 00000
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxx, Xxxxxxxx & Xxxxxx, PC
ATTN: W. Xxxx Xxxxxxxxx, Xx., Xxxxxxx
Xxxx Xxxxxx Xxx 000000
Xxxxxxxx, XX 00000-0000
Facsimile No.: 0-000-000-0000
EAUTOCLAIMS: Xxxx Xxxxxx, President
2708 Alt. 00 Xxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to: Johnson, Blakely, Pope, Bokor, Xxxxxx & Xxxxx, P.A.
ATTN: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: 000-000-0000
11.5 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of,
or based on any right arising out of, this Agreement may be brought against any
of the parties in the courts of the State of Florida, County of Pinellas, or, if
it has or can acquire jurisdiction, in the United States District Court for the
Middle District of Florida, and each of the parties consents to the jurisdiction
of such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
11.6 FURTHER ASSURANCES
The parties agree (a) to furnish upon request to each other
such further information, (b) to execute and deliver to each other such other
documents, and (c) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Agreement
and the documents referred to in this Agreement.
11.7 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
11.8 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the
parties with respect to its subject matter and constitutes (along with the
documents referred to in this Agreement) a complete and exclusive statement of
the terms of the agreement between the parties with respect to its subject
matter. This Agreement may not be amended except by a written agreement executed
by the party to be charged with the amendment.
11.9 DISCLOSURE SCHEDULE
(a) The disclosures in the Disclosure Schedule, and those in
any Supplement thereto, must relate only to the representations and warranties
in the Section of the Agreement to which they expressly relate and not to any
other representation or warranty in this Agreement.
(b) In the event of any inconsistency between the statements
in the body of this Agreement and those in the Disclosure Schedule (other than
an exception expressly set forth as such in the Disclosure Schedule with respect
to a specifically identified representation or warranty), the statements in the
body of this Agreement will control.
11.10 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
Neither party may assign any of its rights under this
Agreement without the prior consent of the other parties, except that
EAUTOCLAIMS may assign any of its rights (but not the obligations) under this
Agreement to any Subsidiary of EAUTOCLAIMS. Subject to the preceding sentence,
this Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the parties to this Agreement and their successors
and assigns.
11.11 SEVERABILITY
If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
11.12 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
11.13 ATTORNEYS? FEES
Should either party employ an attorney or attorneys to enforce
any of the provisions hereof, or to protect its interest in any matter arising
hereunder, or to recover damages for the breach hereof, the party prevailing
shall be entitled to recover from the other party all reasonable costs, charges
and expenses, including attorneys? fees, the value of time charged by paralegals
and/or other staff members operating under the supervision of an attorney, and
other legal costs, expended or incurred in connection therewith, before, during
and subsequent to any litigation, including arbitration and appellate
proceedings, bankruptcy or similar debtor/creditor proceedings, and proceedings
to enforce any indemnity agreement herein contained.
11.14 GOVERNING LAW
This Agreement will be governed by the laws of the State of
Florida without regard to conflicts of laws principles.
11.15 COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.
11.16 COMPANY DISCLOSURE SCHEDULE
Nothing in the Disclosure Schedule shall be deemed adequate to
disclose an exception to a representation or warranty made by the Stockholders
herein unless the Disclosure Schedule set forth the exception specifically and
describes the relevant facts in reasonable detail. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a copy) of a
document or other item shall not be deemed adequate to disclose an exception to
a representation or warranty made herein (unless the representation or warranty
is made with respect to the existence of the document or other item itself).
11.17 OBLIGATIONS OF STOCKHOLDERS
All obligations and liabilities of Stockholders under this
Agreement are, and shall at all times be, joint and several obligations and
liabilities.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
XXXXXXXXXXX.XXX, INC.:
By:
Name: Xxxx Xxxxxx
Title: President
STOCKHOLDERS:
Xxxxxx X. Xxxxxx
S. Xxxx Xxxxxxxxx
PREMIER EXPRESS CLAIMS, INC.
By:
Name: Xxxxxx X. Xxxxxx
Title: President
Xxxxxxxxxxx.xxx Acquisition Corporation
By:___________________________
Name: Xxxx Xxxxxx
Title: President
Attachments:
Exhibit A: Employment Agreements
Exhibit B: Noncompetition Agreements
Exhibit C: Opinion of Xxxxx, Xxxx & Xxxxxxxx, P.C.
Exhibit D: Opinion of Johnson, Blakely, Pope, Bokor, Xxxxxx & Xxxxx, P.A.
Exhibit E: EAUTOCLAIMS's Outstanding Capital Stock as of Closing
Exhibit F: Agreement and Plan of Merger
EXHIBIT "A"
EMPLOYMENT AGREEMENTS
EXHIBIT "B"
NON-COMPETITION AGREEMENTS
EXHIBIT "C"
OPINION OF XXXXXX, XXXXXXXX & XXXXXX, PC
EXHIBIT "D"
OPINION OF JOHNSON, BLAKELY, POPE, BOKOR, XXXXXX & XXXXX, P.A.
EXHIBIT "E"
EAUTOCLAIMS'S OUTSTANDING CAPITAL STOCK AS OF CLOSING
EXHIBIT "F"
AGREEMENT AND PLAN OF MERGER
