Document:

ex10-3.htm

Exhibit
    10.3

    
      PROMISSORY
        NOTE

    

    
      This
        Promissory Note (Hereinafter "Note11) is entered
        into
        by:

    

    
      L
&
F
        Lawn Service, Inc.
        of___________________     

    

    
      (Hereinafter
        "Lender")

       

    

    
      &

       

    

    
      Epazz,
        Inc, of 445 E. Ohio Suite 250 Chicago, Illinois 60611 (Hereinafter
        "Borrower"

       

    

    
      1.      PROMISE
        TO PAY

    

    
      The
        Borrower promises to pay to tile Lender the total amount of two thousand
        two
        hundred ($2200), together with interest payable on the unpaid principal at
        the
        rate of 15 percent per annum, compounded annually.

    

    
      

    

    
      Payments
        will be delivered to the Lender's address (____________________________)
        or such
        other address as may later be agreed upon by the parties.

    

    
      

    

    
      2.      REPAYMENT

    

    
      The
        amount promised under this Agreement will be repaid in full, as
        well as accrued interest thereon, if any,  July 31,
        2007.

    

    
      

    

    
      Should
        the Borrower default in payment, the Borrower shall pay all costs, expenses
        and
        all reasonable legal costs incurred by the Lender, for the purpose of collection
        of this Promissory Note and including reasonable collection charges should
        collection be referred to a collection agency. Tries costs will be added
        to the
        outstanding principal and will become immediately due.

    

    
      

    

    
      3.      MODIFICATION

    

    
      No
        modification or waiver of any of the terms of this Agreement shall be allowed
        unless by written agreement signed by both parties, No waiver of any breach
        or
        default hereunder shall be deemed a waiver of any subsequent breach or default
        of the same or similar nature.

    

    
      

    

    
      4.      BINDING
        EFFECT

    

    
      Except
        as
        otherwise provided in this Note, all of the covenants, conditions, and
        provisions of this Note shall be binding upon the parties hereto and their
        respective heirs, personal representatives executors, administrators,
        successors, and assigns.

    

    
      

    

    
      5.      HEADINGS

    

    
      Headings
        are inserted for the convenience of the parties only and are not to be
        considered when interpreting this Note.

    

    
       

    

    
      6.      BREACH
        OF NOTE

    

    
      The
        parties acknowledge that no breach of any provision of the Note shall be
        deemed
        waived unless evidenced in writing. A waiver of any one breach shall not be
        deemed a waiver of any other breach of the same or any other provision of
        the
        Note.

    

    
      

    

    
      7.      AMENDMENTS

    

    
      This
        Promissory Note may be modified or amended by written agreement of both
        parties.

    

    
      

    

    
      8.      GOVERNING
        LAW

    

    
      This
        Agreement is governed by the statutory and case law of the State of Illinois.
        The parties hereby indicate by their signatures below that they hai read
        and
        agree with the terms and conditions of this Agreement in its
        entirety.

    

    
      

    

    
      The
        parties hereby indicate by their signatures below that they have read and
        agree
        with the terms and conditions of this Note in its entirety.

    

    
      Lender
        Information

    

    
      L
&
F
        Lawn Services. Int.

    

    
      

    

    
      Signature
        /S/ Fay Passley

    

    
       Signed
        July 31 ,2006.

    

    
      

      Borrower
        Information

    

    
      Epazz,
        Inc.

    

    
      445
        E.
        Ohio Suite 250

    

    
      Chicago,
        Illinois

    

    
      60611

    

    
      

    

    
      Signature:

    

    
      ___________________________ex10-4.htm

    Exhibit
      10.4

     

    
      PROMISSORY
        NOTE

    

    
      This
        Promissory Note (Hereinafter "Note") is entered into by:

    

    
      Shaun
        Passley 512 N. McClurg Ct Apt 602 Chicago, Illinois 60611 (Hereinafter
        "Lender")

       

    

    
      &

       

    

    
      Epazz,
        Inc. of 445 E. Ohio Suite 250 Chicago, Illinois 60611 (Hereinafter
        "Borrower")

       

    

    
      1.           PROMISE
        TO PAY

    

    
      The
        Borrower promises to pay to the Lender the total amount of eighteen thousand
        four hundred eighty-five ($18,485), together with interest payable on the
        unpaid
        principal at the rate of 15 percent per annum, compounded
        annually.

    

    
      Payments
        will be delivered to the Lender's address 512 N. McClurg Ct Apt 602 Chicago,
        Illinois 60611 or such other address as may later be agreed upon by the
        parties.

    

    
      

    

    
      2.           REPAYMENT

    

    
      The
        amount promised under this Agreement will be repaid in full, as well as accrued
        interest thereon, if any, July 31, 2007.

    

    
      Should
        the Borrower default in payment, the Borrower shall pay all costs, expenses
        and
        all reasonable legal costs incurred by the Lender, for the purpose of collection
        of this Promissory Note and including reasonable collection charges should
        collection be referred to a collection agency. These costs will be added
        to the
        outstanding principal and will become immediately due.

    

    
      

    

    
      3.           MODIFICATION

    

    
      No
        modification or waiver of any of the terms of this Agreement shall be allowed
        unless by written agreement signed by both parties. No waiver of any breach
        or
        default hereunder shall be deemed a waiver of any subsequent breach or default
        of the same or similar nature.

    

    
      

    

    
      4.           BINDING
        EFFECT

    

    
      Except
        as
        otherwise provided in this Note, all of the covenants, conditions, and
        provisions of this Note shall be binding upon the parties hereto and their
        respective heirs, personal representatives executors, administrators,
        successors, and assigns.

    

    
      5.           HEADINGS

    

    
      Headings
        are inserted for the convenience of the parties only and are not to be
        considered when interpreting this Note.

    

    
      

    

    
      6.           BREACH
        OF NOTE

    

    
      The
        parties acknowledge that no breach of any provision of the Note shall be
        deemed
        waived unless evidenced in writing. A waiver of any one breach shall not
        be
        deemed a waiver of any other breach of the same or any other provision of
        the
        Note.

    

    
      

    

    
      7.           AMENDMENTS

    

    
      This
        Promissory Note may be modified or amended by written agreement of both
        parties.

    

    
      

    

    
      8.           GOVERNING
        LAW

    

    
      This
        Agreement is governed by the statutory and case law of the State of Illinois.
        The parties hereby indicate by their signatures below that they have read
        and
        agree with the terms and conditions of this Agreement in its
        entirety.

    

    
      The
        parties hereby indicate by their signatures below that they have read and
        agree
        with the terms and conditions of this Note in its entirety.

    

    
      

    

    
      	
              Lender
                Information

            	
              Borrower
                Information

            
	
              ShaunPassley

            	
              Epazz,
                Inc.

            
	
              512
                N. McClurg Ct. Apt. 602

            	
              445
                E. Ohio Suite 250

            
	
              Chicago,
                IL 60611

            	Chicago,  Illinois
              60611

    

    
      

    

    
      Signature:
        /s/ Shaun Passley

    

    
      Signature:
/S/
        Shaun
        Passley

    

    
      

    

    
      9.   Signed
        July 31 ,2006.exv10w1

 

Exhibit 10.1

	 
	Nightingale & Associates, LLC

	Soundview Plaza

	1266 East Main Street

	Stamford, Connecticut 06902

	 

	Tel: 203.359.3855

	Fax: 203.359.4551

	Email: info@nightingale-associates.org

	 

	Principals:

	Michael R. D’Appolonia

	Howard S. Hoffmann

	James D. Neidhart

September 18, 2007

Mr. Stephen Rusckowski, Chairman of the Board of Directors

Mr. John Underwood, Chairman of the Compensation Committee

MedQuist Inc.

1000 Bishops Gate Blvd., Suite 300

Mt. Laurel, NJ 08054-4632

Gentlemen:

     In response to various discussions, Nightingale & Associates, LLC (“Nightingale”) has been
asked to submit this proposed Amendment to our Engagement Letter with MedQuist Inc. (“MedQuist” or
the “Company”) dated July 29, 2004 as amended on December 16, 2004, September 25, 2006 and on
January 8, 2007 (collectively, the “Amended Engagement Letter”). This Amendment (i) provides
revisions to the cost structure and term associated with the continued retention of Mr. Howard
Hoffmann as the Company’s Interim President and Chief Executive Officer. All other terms and
conditions for the retention of Nightingale, as detailed in the Amended Engagement Letter,
including but not limited to the Release and Indemnification agreement, will remain in force and
effect. It is our understanding that Howard Hoffmann, on behalf of Nightingale, will continue to
be engaged by MedQuist as the Company’s Interim President and Chief Executive Officer and will
continue to report to the Company’s Board of Directors.

	I.	 	SCOPE OF WORK:
	 
	 	 	Effective as of July 1, 2007, Nightingale will extend the term of Howard Hoffmann’s role as
MedQuist’s Interim President and Chief Executive Officer until February 29, 2008 (the
“Extension Period”). Following termination of Mr. Hoffmann’s role as Interim President and
Chief Executive Officer, Mr. Hoffmann will endeavor to make himself available for ongoing
consultancy work on an as needed basis, subject to negotiation of a mutually agreeable Scope
of Work.

	 
	Finding Solutions to

	Complex Business Situations

	Since 1975

 

 

Messrs. Rusckowski and Underwood

MedQuist Inc.

September 18, 2007

Page 2

	 	 	It should be noted that Mr. Hoffmann expects to be working on other client engagements
upon his departure as the full time Interim President and Chief Executive Officer of
MedQuist, and thus his availability for work beyond February 29, 2008 cannot be guaranteed.
	 
	II.	 	FEE STRUCTURE:
	 
	 	 	Fixed Monthly Fee:
	 
	 	 	Effective as of July 1, 2007, Nightingale’s fees for Mr. Hoffmann’s role as Interim
President and Chief Executive Officer will be a fixed rate of $120,000 per month payable in
arrears. If Mr. Hoffmann’s role is terminated during the course of a month, Nightingale’s
fees for the final month will be prorated based on the actual number of calendar days
elapsed during the month up to and including Mr. Hoffmann’s final day of work. Mr.
Hoffmann’s fees for consultancy services following his departure as the Interim President
and Chief Executive Officer of MedQuist will be billed at an hourly rate of $525/hour.
	 
	 	 	2006 Discretionary Bonus
	 
	 	 	Pursuant to the terms of the Amended Engagement Letter, the Company shall pay to Nightingale
the approved 2006 Discretionary Bonus achievement within 30 days following the execution of
this Amendment, but in no event later than December 31, 2007.
	 
	 	 	2007 Second Half Performance Bonus:
	 
	 	 	Nightingale may be entitled to an additional performance related bonus payment of up to
$240,000, which will be paid following the close of the Company’s 2007 fiscal year, but in
no event later than January 15, 2008 (the “2007 Second Half Performance Bonus”) in
connection with Mr. Hoffmann’s service as Interim President and Chief Executive Officer from
July 1, 2007 to December 31, 2007. The amount, if any, of the 2007 Second Half Performance
Bonus that Nightingale is to receive will be based on the achievement of certain operational
objectives that have been established by the Board of Directors of MedQuist and Nightingale,
which operational objectives involve confidential strategic, commercial and financial
information, the disclosure of which would result in competitive harm to the Company.
	 
	 	 	Engagement Bonus:

 

 

Messrs. Rusckowski and Underwood

MedQuist Inc.

September 18, 2007

Page 3

	 	 	Nightingale shall receive an engagement completion bonus in the amount of $132,500 (the
“Engagement Completion Bonus”) if Mr. Hoffmann serves as the Company’s President and Chief
Executive Officer for the entire Extension Period.
	 
	 	 	The Company will pay Nightingale the Engagement Completion Bonus in a lump sum within 10
business days following the earliest to occur of (i) the termination of Nightingale’s
engagement with the Company, including the retention of Mr. Hoffmann as the President and
Chief Executive Officer of the Company (or any successor to its business) following a
Strategic Transaction (as defined below), or (ii) February 29, 2008, provided that Mr.
Hoffmann has continuously served as the Company’s President and Chief Executive Officer
through that date.
	 
	 	 	Notwithstanding the foregoing, in the event of the termination Nightingale’s engagement with
the Company, including the retention of Mr. Hoffmann as the President and Chief Executive
Officer of the Company, prior to the earlier to occur of the closing of a Strategic
Transaction or February 29, 2008, the amount of the Engagement Completion Bonus due to the
Nightingale, if any, shall be at the discretion and subject to the approval of the Board of
Directors of the Company.
	 
	 	 	Strategic Transaction Bonus

	 	(a)	 	For purposes of this section, the following terms shall have
the meanings set forth below:

	 	•	 	“Acquiree” means any corporation, partnership, limited liability
company or similar entity with which the Company engages in an
Acquisition Transaction.
	 
	 	•	 	“Acquisition Transaction” means each and every transaction or series
of related transactions whereby, directly or indirectly, control of, or
a significant interest in, any Acquiree or any of its businesses or
assets is transferred to the Company for consideration, including,
without limitation, a sale, acquisition or exchange of stock (including
shares issuable upon conversion of any securities convertible into
stock) or assets, a lease or license of assets (with or without a
purchase option), or a merger, consolidation or reorganization, tender
offer, leveraged buyout or other extraordinary corporate transaction or
business combination involving the Acquiree with an expected enterprise
value in excess of $50,000,000, as determined by the Board of Directors
of the Company in its reasonable discretion.
	 
	 	•	 	“Majority Shareholder” means Koninklijke Philips Electronics N.V.

 

 

Messrs. Rusckowski and Underwood

MedQuist Inc.

September 18, 2007

Page 4

	 	•	 	“Sale Transaction” means each and every transaction or series of
related transactions whereby, directly or indirectly, control of, or a
significant interest in, the Company or any of its businesses or assets
is transferred for consideration, including, without limitation, a
sale, acquisition or exchange of stock (including shares issuable upon
conversion of any securities convertible into stock) or assets, a lease
or license of assets (with or without a purchase option), or a merger,
consolidation or reorganization, tender offer, leveraged buyout, “going
private” transaction or other extraordinary corporate transaction or
business combination involving the Company, including any such
transaction in which the outstanding equity securities of the Company
not held by the Majority Shareholder and its affiliates are acquired by
a third-party; provided, however, that a secured interest in the
Company or any of its businesses or assets arising solely from a debt
transaction shall not constitute a Sale Transaction.
	 
	 	•	 	“Strategic Transaction” means a Sale Transaction or an Acquisition
Transaction, other than a Sale Transaction or Acquisition Transaction
with an affiliate of the Company or an affiliate of any holder of more
than 50% of the Company’s capital stock. A “merger” will be considered
to be an Acquisition Transaction if the Company’s current stockholders
own at least a majority of the outstanding common stock of the
resulting company and to be a Sale Transaction if the Company’s current
stockholders own less than a majority of the outstanding common stock
of the resulting company.

(b) Success-Based Bonus Amount and Conditions. The Company will pay to
Nightingale a bonus (the “Success-Based Bonus”) in an amount equal to $132,500, if:

	 	(i)	 	a Strategic Transaction is closed; and
	 
	 	(ii)	 	either, (1) Mr. Hoffmann continues to serve as
the Company’s President and Chief Executive Officer for the 90 day
period immediately following the closing of a Strategic Transaction
(the “Post-Closing Period”), or (2) Nightingale’s engagement with the
Company (or any successor to its business), including the retention of
Mr. Hoffmann as the President and Chief Executive Officer of the
Company (or any successor to its business), is terminated, upon the
closing of a Strategic Transaction or at any time during the
Post-Closing Period.

 

 

Messrs. Rusckowski and Underwood

MedQuist Inc.

September 18, 2007

Page 5

(c ) Timing and Form of Payment. Subject to paragraphs (a) and (b) of this
provision, the Company will pay the Success-Based Bonus to Nightingale in a lump sum
within 10 business days following the closing of a Strategic Transaction and the
earliest to occur of: (i) the completion of the Post-Closing Period or (ii) the
termination of Nightingale’s engagement with the Company (or any successor to its
business), including the retention of Mr. Hoffmann as the President and Chief
Executive Officer of the Company (or any successor to its business). For the
avoidance of doubt, only one Success-Based Retention Bonus is payable under this
Agreement.

	 	 	For purposes of both the Engagement Completion Bonus and the Success-Based Bonus described
above, Nightingale’s engagement with the Company, including the retention of Mr. Hoffmann as
the President and Chief Executive Officer of the Company, shall not be deemed to have been
terminated merely because Mr. Hoffmann ceases to be the President and Chief Executive
Officer of the Company and becomes the President and Chief Executive Officer of any
successor to the Company’s business following the completion of a Strategic Transaction on
terms and conditions acceptable to such company and Nightingale.
	 
	 	 	Additional Nightingale Personnel:
	 
	 	 	Nightingale will continue to make available the services of Mr. Michael C. Yeager and Ms.
Jeanine Cobonpue to perform selected services in connection with the Company’s billing
matter and operations related activities. Mr. Yeager’s professional time fee services have
been and will continue to be invoiced to MedQuist at his prevailing hourly rate of
$350/hour. Ms. Cobonpue’s professional time fee services have been and will continue to be
invoiced to MedQuist at her prevailing hourly rate of $175/hour. Should it become necessary
to utilize the services of additional Nightingale personnel on the project, it is agreed
that Nightingale will invoice professional time fees for such personnel at their prevailing
hourly rates. Nightingale agrees that it will obtain the advance approval of the Board of
Directors of the Company, which shall be conveyed by the Board of Directors of the Company
to Howard Hoffmann, before adding additional personnel to the project team.
	 
	 	 	In addition to professional time fees, out-of-pocket expenses are billed at cost, and
generally range from 10% to 20% of professional time fees, depending on the amount of travel
involved. Out-of-pocket expenses consist primarily of transportation, meals, lodging,
telephone, specifically assignable secretarial and office assistance, and report production.
	 
	III.	 	ADVANCE DEPOSIT

 

 

Messrs. Rusckowski and Underwood

MedQuist Inc.

September 18, 2007

Page 6

	 	 	Nightingale requires an Advance Deposit for all assignments of the type described above.
Given this situation, Nightingale will not require an increase of its existing Advance
Deposit of $75,000 that has been paid by the Company. At the completion of the project and
at the direction of the Company, Nightingale will either apply the Advance Deposit to any
outstanding invoices or, if there are no unpaid invoices owing to Nightingale, promptly
return the Deposit to the Company.

v
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Messrs. Rusckowski and Underwood

MedQuist Inc.

September 18, 2007

Page 7

     If this Amendment conforms to your understanding of the terms and conditions of our retention,
please have the appropriate party signify agreement by signing and returning the enclosed extra
copy of this Amendment.

     We look forward to continue working with you and the Company.

	 	 	 	 	 
	 	Sincerely,

 	 
	 	/s/ Howard S. Hoffmann
 	 
	 
	 	Howard S. Hoffmann, 	 
	 	in the capacity as Principal and

Managing Partner of Nightingale &

Associates, LLC 	 
	 

READ, UNDERSTOOD AND AGREED TO BY:

MedQuist Inc.

	 	 	 	 	 
	 	 	 
	 	By:  	   /s/ Stephen Rusckowski
 	 
	 	 	Stephen Rusckowski 	 
	 	 	Chairman of the Board of Directors of MedQuist Inc. 	 
	 

Date: September 19, 2007

	 	 	 	 	 
	 	 	 
	 	By:  	   /s/ John Underwood
 	 
	 	 	John Underwood 	 
	 	 	Chairman of the Compensation Committee of the Board of Directors of MedQuist Inc. 	 
	 

Date: September 19, 2007

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