Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
November 17, 2003
Commission file number 0-23903
eAutoclaims.com, Inc.
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(Exact name of small business issuer as specified in its charter)
Nevada 95-4583945
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 East Douglas Road, Oldsmar, Florida 34677
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(Address of principal executive offices)
(813) 749-1020
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(Issuer's telephone number)
ITEM 5/ ITEM 9. OTHER EVENTS/REGULATION FD DISCLOSURE
EAutoclaims Announces Restructuring of Outstanding Convertible Preferred Stock
Oldsmar, FL, November 18, 2003 - eAutoclaims announced the restructuring of
their outstanding convertible preferred stock with Governors Road LLC. The new
agreement changes the formula used to compute the conversion of eAutoclaims'
preferred shares to common shares. The agreement also establishes a minimum
conversion price, which was not part of the original agreement and creates a
maximum number of commons shares that are allowed to be issued upon conversion
of the preferred shares.
The new agreement enables the company to liquidate the preferred shares over a
20 to 30 month period by purchasing a small number of preferred shares units
each month. Should the company choose not to act on its rights to purchase the
units, the company can arrange block trades of a predetermined number of
converted common shares before the holder is permitted to sell those shares. If
the company exercises either of these options, the agreement requires the holder
to remain in a lock-up position and forbids the selling of any additional
shares.
The specific terms and conditions of the new agreement with Governors Road LLC
are set forth in the form of the "Agreement" and the "Amendment to Certificate
of Designations, Rights, Preferences and Limitations," which are attached as
exhibits to which reference is hereby made.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
eAutoclaims.com, Inc.
Dated 11/18/03 /s/ Eric Seidel
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President & CEO
AGREEMENT
THIS AGREEMENT (the "Agreement") is effective as of October 23rd, 2003,
by and between eAUTOCLAIMS.COM, 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.
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
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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
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.
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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.
eAUTOCLAIMS, INC.
By:
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Eric Seidel, President
GOVERNORS ROAD LLC
By:
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As:
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DOMINION CAPITAL FUND LIMITED
By:
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As:
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SOUTHSHORE CAPITAL FUND LTD.
By:
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As:
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SOUTHRIDGE CAPITAL MANAGEMENT LLC
By:
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As:
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SOVEREIGN PARTNERS LP
By:
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As:
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GREENFIELD INVESTMENT CONSULTANTS LLC
By:
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As:
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Exhibit "A"
Amendment to
Certificate of Designations, Rights, Preferences and Limitations
eAUTOCLAIMS.COM, INC.
SERIES A CONVERTIBLE PREFERRED STOCK
Pursuant to Title 7, Chapter 78, Section 78.199 of the Nevada Revised Statutes
It is certified that:
A. The name of the corporation is eAutoclaims.com, Inc., a Nevada
corporation (hereinafter the "Company").
B. The certificate of incorporation of the Company, as amended,
authorizes the issuance of five million (5,000,000) shares of Preferred Stock,
$.001 par value per share, and expressly vests in the Board of Directors of the
Company the authority provided therein to issue all of said shares in one or
more series and by resolution or resolutions to establish the designation and
number and to fix the relative rights and preferences of each series to be
issued.
C. That on August 28, 2000, the Company filed a Certificate of
Designations, Rights, Preferences and Limitations authorizing the issuance of
its Series A Convertible Preferred Stock pursuant to File No. C16891-96 (the
"Original Certificate of Designations").
D. That on May 25, 2001, the Company filed an Amendment to Certificate
of Designations, Rights, Preferences and Limitations pursuant to File No.
____________, which amended the Original Certificate of Designations in certain
respects (the "First Amendment").
E. The Company and the holder of the outstanding Series A Convertible
Preferred Stock have entered into certain additional agreements and
understandings which necessitate a further amendment to the Original Certificate
of Designations and First Amendment.
F. Pursuant to the authority conferred upon the Board of Directors, the
Board of Directors of the Company, effective as of October 23, 2003, duly
adopted and authorized the following amendments to the provisions of the
original Certificate of Designations and First Amendment. The changes to the
Certificate of Designations as noted below cross reference to the original
Section headings. If no change or modification is made to a particular Section
the phrase "No change" is included after the Section heading:
1. Designation and Amount. The following sentence is added:
The Company currently has outstanding 247 shares of Series A
Convertible Stock evidencing a remaining original Purchase
Price of $1,235,000 (i.e., $5,000 per share - the "Purchase
Price") plus accrued and unpaid dividends thereon.
2. Ranking. No change.
3. Dividends. No change.
3. Liquidation, Dissolution of Winding Up. No change.
4. Voting Rights. No change.
5. Conversion Rights for the Series A Preferred Stock.
(a) Right to Convert. The conversion right is subject to the
Company's prior redemption rights set forth in Section 6. So
long as the Company timely fulfills its redemption
obligations the Series A Preferred Stock is not convertible
into the Company's Common Stock.
(b) Conversion Rate.
Section 5(b)(i). No change.
Section 5(b)(ii) is amended in its entirety to read as
follows:
the Conversion Price equals the greater of (x) twenty cents
($.20) per share, or (y) seventy-five percent (75%) (the
"Conversion Percentage") of the average of the Closing Bid
Prices for the Common Stock for the five (5) lowest trading
days out of the twenty (20) consecutive trading days
immediately preceding the Conversion Date (as herein
defined), as reported on the National Association of
Securities Dealers OTC Bulletin Board Market (or on such
other national securities exchange or market as the Common
Stock may trade at such time);
Section 5(b)(iii). No change.
(c) Forced Conversion. Deleted in its entirety.
(d) Capital Reorganization or Reclassification. No change.
(e) Capital Reorganization, Merger or Sale of Assets. The
following provision is added at the end of this section.
"Notwithstanding the foregoing, in the event the Company
redeems the Series A Convertible Preferred Stock prior to or
simultaneously with the closing of a transaction or makes
provision for the redemption of the Series A Preferred Stock
in connection with a Reorganization in accordance with
Section 6(a) hereof, then the provisions of this Section are
applicable solely to the extent that the holders (or any
assignee thereof) shall have the right to convert such
number of Preferred Stock into Common Stock consistent with
Section 11 below.
2
(f) Certificate as to Adjustments; Notice by Company. No
change.
(g) Exercise of Conversion Rights. No change.
(h) Lost or Stolen Certificates. No change.
(i) Fractional Shares. No change.
(j) Partial Conversion. No change.
(k) Reservation of Common Stock. No change.
A new Section 5(l) is added which provides as follows:
(l) Optional Conversion Rights. If the Company elects not
to make an Ordinary Optional Redemption or an
Accelerated Redemption pursuant to Sections 6(b) or
6(c) below, the holders of the Series A Preferred Stock
shall have the right to convert in each thirty (30) day
period beginning the first day of each calendar month,
at the Conversion Price then in effect, up to
one-twentieth (1/20th, i.e., 5%) of the Preferred
Shares outstanding on the date hereof.
A new Section 5(m) is added which provides as
follows:
(m) Special Conversion Rates. If the Company fails to make
the Ordinary Optional Redemption or the Accelerated
Redemption pursuant to said Sections 6(b) and 6(c)
hereof, then in addition to the conversion amount
referred to in Section 5(l), the Series A Preferred
Stock holders are entitled to accelerated conversion
privileges based upon the following formula and
provisions:
"AD$V" = the average daily dollar volume for the
Company's Common Shares for the prior calendar month.
"Dollar Volume" = the closing price multiplied by the
volume traded for the Company's Common Shares as
reported by Bloomberg.
"Conversion Price" = the conversion price that would be
applicable for the conversion of the Series A Preferred
Stock to Common Stock.
If AD$V is equal to or greater than $10,000 and a
conversion price per share of $.75 - then the monthly
number of shares of Series A Preferred Stock able to be
converted under Section 5(l) is increased by 50% (x
1.5);
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If AD$V is equal to or greater than $10,000 and a
conversion price per share of $.90 - then the monthly
number of shares of Series A Preferred Stock able to be
converted under Section 5(l) is increased by 75% (x
1.75);
If AD$V is equal to or greater than $10,000 and a
conversion price per share of $1.05 - then the monthly
number of shares of Series A Preferred Stock able to be
converted under Section 5(l) is increased by 125% (x
2.25);
If AD$V is equal to or greater than $10,000 and a
conversion price per share of $1.20 - then the monthly
number of shares of Series A Preferred Stock able to be
converted under Section 5(l) is increased by 150% (x
2.50);
If AD$V is equal to or greater than $10,000 and a
conversion price per share of $1.35 - then the monthly
number of shares of Series A Preferred Stock able to be
converted under Section 5(l) is increased by 200% (x
3);
If AD$V is equal to or greater than $10,000 and a
conversion price per share of $1.50 - then the monthly
number of shares of Series A Preferred Stock able to be
converted is increased by 300% (x 4).
6. Redemption. The existing provision is deleted in its
entirety and is superceded by the following terms:
(a) Extraordinary Redemption by Company. Notwithstanding any
of the other provisions set forth
-------------------------------------- herein, the Company
shall have the right to redeem the Series A Preferred Stock,
in whole or in part, at a price equal to 110% of the
Purchase Price per share plus the accrued and unpaid
dividends thereon, in cash, as more particularly set forth
in Section 6(d) hereof. Other than pursuant to Section 11
herein, the holders of the Series A Preferred Shares shall
not have the right to exercise conversion rights during the
time period between Redemption Notice Date, as defined in
subsection (d) below, of the Company's optional redemption
and the Redemption Date, as defined in subsection (d) below.
(b) Ordinary Optional Redemption. The Company shall have the
right to optionally redeem the outstanding Series A
Preferred Shares on a monthly basis at the beginning of each
calendar month in accordance with the following provisions:
Beginning December 1, 2003 through June 1, 2006 the Company
has the right to redeem on a monthly basis one-thirtieth
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(1/30th), or 8.233 shares of Series A Preferred Stock
("Monthly Redemption Amount") per month at an amount equal
to one hundred and ten (110%) percent of the original
Purchase Price per share (i.e., $5,000) plus accrued and
unpaid cumulative dividends on the Series A Preferred Shares
so redeemed.
(c) Accelerated Redemption. The Company shall be required to
accelerate the Ordinary Optional Redemptions described in
Section 6(b) above based upon the Company's monthly "net
income" as determined under GAAP exceeding the following
thresholds ("Accelerated Redemption Amount"):
Net Income equal to or greater than $150,000 per month - the
Monthly Redemption Amount is increased by 25% (x 1.25);
Net Income equal to or greater than $200,000 per month - the
Monthly Redemption Amount is increased by 50% (x 1.5);
Net Income equal to or greater than $300,000 per month - the
Monthly Redemption Amount is increased by 100% (x 2);
Net Income equal to or greater than $400,000 per month - the
monthly redemption amount is increased by 150% (x 2.5).
(d) Redemption Procedures. Five (5) days prior to the first
day of each calendar month while any ----------------------
shares of Series A Preferred Stock remain outstanding, the
Company shall fax written notice ("Redemption Notice") to
the holders of its election to pay the Monthly Redemption
Amount or its obligation to pay the Accelerated Redemption
Amount for the redemption of Series A Preferred Shares (the
"Redemption Notice Date"). The Redemption Notice shall
state: (i) the redemption date of such shares; (ii) the
number of Series A Preferred Shares to be redeemed from the
holder to whom the Redemption Notice is addressed; (iii)
instructions for surrender to the Company, in the manner and
at the place designated of a share certificate or share
certificates representing the number of Series A Preferred
Shares to be redeemed from such holder; and (iv) the
calculations supporting the redemption price as provided in
this Section 6 and the number of shares to be converted into
Common Shares a provided in Section 5 hereof. The Company
shall pay to the holders the Monthly Redemption Amount or
the Accelerated Redemption Amount by wire transfer on the
first day of each calendar month (the "Redemption Date").
On or before the Redemption Date in respect of any Series A
Preferred Shares, each holder of such shares shall surrender
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the required certificate or certificates representing such
shares to the Company, in the manner and at the place
designated in the Redemption Notice, and upon the Redemption
Date, the Redemption Price for such shares shall be made
payable to the order of the person whose name appears on
such certificate or certificates as the owner thereof, and
each surrendered share certificate shall be canceled and
retired. If a share certificate is surrendered and all the
shares evidenced thereby are not being redeemed (as
described below), the Company shall cause the Series A
Preferred Shares which are not being redeemed to be
registered in the names of the persons whose names appear as
the owners on the respective surrendered share certificates
and deliver such certificate to such person.
Payment of the Monthly Redemption Amount shall constitute
full payment for the redeemed shares to the holders, and
from and after the date of such payment the redeemed shares
shall be deemed to be no longer outstanding, and holders
thereof shall cease to be shareholders with respect to such
shares and shall have no rights with respect thereto except
the rights to receive payment of the Monthly Redemption
Amount
7. No Reissuance of Series A Preferred Stock. No change.
8. Restrictions and Limitations. No change.
9. Notices of Record Date. No change
10. Certificate of Incorporation. No change.
11. Limitation on Number of Conversion Shares. 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
6
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 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 the Company as defined in Section 5(e)
above, or (ii) while there is outstanding a tender offer for any
or all of the shares of the Company's Common Stock, the holders
(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 holder may then currently hold without regard to the
limitations of this Section 11.
12. Special Mandatory Adoption. This provision which was added as
part of the First Amendment is deleted.
Signed and attested on October 24th, 2003.
eAUTOCLAIMS.COM, INC.
By:
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Eric Seidel
President
Attest:
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Susan L. Abels
Assistant Secretary
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STATE OF FLORIDA )
) SS
COUNTY OF PINELLAS )
On this ___ day of ____________, 2003, before me personally appeared
and who are personally known to me Eric Seidel, the President and Susan L.
Abels, the Assistant Secretary of eAUTOCLAIMS.COM, INC., a Nevada corporation,
on behalf of said corporation.
Notary Public
My Commission Expires:
GOVERNORS ROAD LLC
By:
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As:
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DOMINION CAPITAL FUND LIMITED
By:
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As:
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SOUTHSHORE CAPITAL FUND LTD.
By:
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As:
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SOUTHRIDGE CAPITAL MANAGEMENT LLC
By:
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As:
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SOVEREIGN PARTNERS LP
By:
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As:
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GREENFIELD INVESTMENT CONSULTANTS LLC
By:
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As:
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11/17/2003 9:58 AM
41287.102070
#240227 v1 - EAUTOCLAIMS Amend. to Certif. of Designation
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