STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") is made and
entered into this 8th day of September, 2005, by and among WIZZARD SOFTWARE
CORPORATION, a Colorado corporation ("Wizzard"); and THE XXXXXX XXXXXX LIVING
TRUST (the "Trust"), XXXXXX XXXXXX, TRUSTEE (the "Trustee"), AND XXXXXX XXXXXX
("Xxxxxx"), individually (sometimes collectively, the "Sellers,").
RECITALS:
Whereas, the Trust of which Xxxxxx is the Trustee and the sole
beneficiary is the owner of all of the outstanding securities of INTERIM
HEALTHCARE OF WYOMING, INC., a Wyoming corporation ("Interim"); and
Whereas, Wizzard and Interim executed and delivered a Letter of Intent
effective as of March 11, 2005, whereby Wizzard agreed to purchase and Interim
agreed to sell all of the assets of Interim; and
Whereas, Wizzard now desires to purchase all of the outstanding
securities of Interim from the Trust in lieu of purchasing all of the assets
of Interim, and the Trust and Xxxxxx desire to sell Wizzard all of the
outstanding securities of Interim in lieu of selling all of the assets of
Interim to Wizzard;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
1. DEFINITIONS AND USAGE.
1.1 Definitions.
For purposes of this Agreement, the following terms and variations
thereof have the meanings specified or referred to in this Section 1.1:
"Accounts Receivable": (a) All trade accounts receivable and other rights to
payment from customers of Interim and the full benefit of all security for
such accounts or rights to payment, including all trade accounts receivable
representing amounts receivable in respect of goods shipped or products sold
or services rendered to customers of Interim, (b) all other accounts or notes
receivable of Interim and the full benefit of all security for such accounts
or notes and (c) any claim, remedy or other right related to any of the
foregoing.
"Appurtenances": All privileges, rights, easements, hereditaments and
appurtenances belonging to or for the benefit of any Land, including all
easements appurtenant to and for the benefit of any Land (a "Dominant Parcel")
for, and as the primary means of access between, the Dominant Parcel and a
public way, or for any other use upon which lawful use of the Dominant Parcel
for the purposes for which it is presently being used is dependent, and all
rights existing in and to any streets, alleys, passages and other rights-of-
way included thereon or adjacent thereto (before or after vacation thereof)
and vaults beneath any such streets.
"Best Efforts": The efforts that a prudent Person desirous of achieving a
result would use in similar circumstances to achieve that result as
expeditiously as possible, provided, however, that a Person required to use
Best Efforts under this Agreement will not be thereby required to take actions
that would result in a material adverse change in the benefits to such Person
of this Agreement and the Contemplated Transactions or to dispose of or make
any change to the Business, expend any material funds or incur any other
material burden.
"Breach": Any breach of, or any inaccuracy in, any representation or warranty
or any breach of, or failure to perform or comply with, any covenant or
obligation, in or of this Agreement or any other Contract, or any event which
with the passing of time or the giving of notice, or both, would constitute
such a breach, inaccuracy or failure.
"Bulk Sales Laws": The bulk-transfer provisions of the Uniform Commercial
Code (or any similar law).
"Business": When referring to Interim means Interim's business of providing
home health care and health care staffing. When referring to Wizzard means
Wizzard's business of developing, manufacturing and marketing computer
software products that focus on speech recognition and text-to-speech
technology (speech technology) to make computers listen and respond to users
through verbal communications and a patent-pending talking medical bottle
using embedded digital voice recording and replay technologies.
"Business Day": Any day other than (a) Saturday or Sunday or (b) any other
day on which banks in Pennsylvania are permitted or required to be closed.
"Closing": As defined in Section 2.5.
"Closing Date": The date on which the Closing actually takes place.
"Confidential Information": As defined in Section 7.7.
"Consent": Any approval, consent, ratification, waiver or other
authorization.
"Contemplated Transactions": All of the transactions contemplated by the
Transaction Documents.
"Contract": Any agreement, contract, Lease, consensual obligation, promise or
undertaking (whether written or oral and whether express or implied), whether
or not legally binding.
"Disclosure Schedules": The Disclosure Schedules attached to and incorporated
in this Agreement and delivered by the Sellers regarding Interim to Wizzard or
by Wizzard to the Sellers concurrently with the execution and delivery of this
Agreement.
"Escrow Agreement": As defined in Section 2.1(d) and Exhibit 2.1(d).
"Employment Agreement": As defined in Section 2.1(c) and Exhibit 2.1(c).
"Encumbrance": Any charge, claim, community or other marital property
interest, condition, equitable interest, lien, option, pledge, security
interest, mortgage, right of way, easement, encroachment, servitude, right of
first option, right of first refusal or similar restriction, including any
restriction on use, voting (in the case of any security or equity interest),
transfer, receipt of income or exercise of any other attribute of ownership.
"Environment": Soil, land surface or subsurface strata, surface waters
(including navigable waters and ocean waters), groundwaters, drinking water
supply, stream sediments, ambient air (including indoor air), plant and animal
life and any other environmental medium or natural resource.
"Environmental, Health and Safety Liabilities": Any cost, damages, expense,
liability, obligation or other responsibility arising from or under any
Environmental Law or Occupational Safety and Health Law, including those
consisting of or relating to:
(a) any environmental, health or safety matter or condition (including
on-site or off-site contamination, occupational safety and health and
regulation of any chemical substance or product);
(b) any fine, penalty, judgment, award, settlement, legal or
administrative proceeding, damages, loss, claim, demand or response, remedial
or inspection cost or expense arising under any Environmental Law or
Occupational Safety and Health Law;
(c) financial responsibility under any Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective action,
including any cleanup, removal, containment or other remediation or response
actions ("Cleanup") required by any Environmental Law or Occupational Safety
and Health Law (whether or not such Cleanup has been required or requested by
any Governmental Body or any other Person) and for any natural resource
damages; or
(d) any other compliance, corrective or remedial measure required
under any Environmental Law or Occupational Safety and Health Law.
The terms "removal," "remedial" and "response action" include the types of
activities covered by the United States Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA").
"Environmental Law": Any Legal Requirement that requires or relates to:
(a) advising appropriate authorities, employees or the public of
intended or actual releases of pollutants or hazardous substances or
materials, violations of discharge limits or other prohibitions and the
commencement of activities, such as resource extraction or construction, that
could have significant impact on the Environment;
(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the release or minimizing the
hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged and used
so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil or other potentially
harmful substances;
(g) cleaning up pollutants that have been released, preventing the
threat of a release or paying the costs of such clean up or prevention; or
(h) making responsible parties pay private parties, or groups of them,
for damages done to their health or the Environment or permitting self-
appointed representatives of the public interest to recover for injuries done
to public assets.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Facilities": Any real property, leasehold or other interest in real property
currently owned or operated by a Person (including, in the case of Interim,
the Tangible Personal Property used or operated by Interim at the respective
locations of Interim's Real Property or Interim's Leased Real Property
respectively specified in Section 3.7 and Section 3.8.
"GAAP": Generally accepted accounting principles for financial reporting in
the United States, in effect from time to time, applied on a consistent basis.
"Governing Documents": With respect to any particular entity, (a) if a
corporation, the articles or certificate of incorporation and the bylaws; (b)
if a general partnership, the partnership agreement and any statement of
partnership; (c) if a limited partnership, the limited partnership agreement
and the certificate of limited partnership; (d) if a limited liability
company, the articles of organization and operating agreement; (e) if another
type of Person, any other charter or similar document adopted or filed in
connection with the creation, formation or organization of the Person; (f) all
equity holders' agreements, voting agreements, voting trust agreements, joint
venture agreements, registration rights agreements or other agreements or
documents relating to the organization, management or operation of any Person
or relating to the rights, duties and obligations of the equity holders of any
Person; and (g) any amendment or supplement to any of the foregoing.
"Governmental Authorization": Any Consent, license, registration or permit
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:
(a) nation, state, county, city, town, borough, village, district,
tribe or other jurisdiction;
(b) federal, state, local, municipal, foreign, tribal or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any agency, branch, department, board, commission, court, tribunal
or other entity exercising governmental or quasi-governmental powers);
(d) multinational organization or body;
(e) body exercising, or entitled or purporting to exercise, any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power; or
(f) official of any of the foregoing.
"Improvements": All buildings, structures, fixtures and improvements located
on Land, including those under construction.
"Interim": As defined in the first paragraph of this Agreement.
"Interim Assets": All assets owned by Interim on the Effective Date.
"Interim Balance Sheet": As defined in Section 3.4.
"Interim Common Stock.": The common stock, no value per share, of Interim.
"Interim Contract": Any Contract (a) under which Interim has or may acquire
any rights or benefits; (b) under which Interim has or may become subject to
any obligation or liability; or (c) by which Interim or any of the Interim
Assets may become bound.
"Interim's Counsel": J. Xxxxxxx Xxxxx, Esq. of Xxxxx, Xxxx & Xxxxxx, LLP
"Interim EBITDA": Interim's earnings before interest, taxes, depreciation and
allowances.
"Interim Employee Plans": As defined in Section 3.16(a).
"Interim Intellectual Property": As defined in Section 3.24(a).
"Interim Lease": Any Real Property Lease or any lease or rental agreement,
license, right to use or installment and conditional sale agreement to which
Interim is a party and any other Interim Contract pertaining to the leasing or
use of any Tangible Personal Property.
"Interim Material Consents": As defined in Section 5.3.
"Interim Permitted Encumbrances": As defined in Section 3.9.
"Interim Phase I Incentives": As defined in Section 2.3.
"Interim Phase II Incentives": As defined in Section 2.4.
"Interim Proposed Transaction": As defined in Section 7.6.
"Inventories": All inventories of Interim, wherever located, including all
finished goods, work in process, raw materials, spare parts and all other
materials and supplies to be used or consumed by Interim in the production of
finished goods.
"IRS": The United States Internal Revenue Service 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 that individual is actually aware of that fact or
matter. 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 that Person (or in any similar capacity) has, or at any time had, Knowledge
of that fact or other matter.
"Land": All parcels and tracts of land in which any Person has an ownership
or leasehold interest.
"Legal Requirement": Any federal, state, local, municipal, foreign,
international, multinational or other constitution, law, ordinance, principle
of common law, code, regulation, statute or treaty, including the Foreign
Corrupt Practices Act.
"Liability": With respect to any Person, any liability or obligation of such
Person of any kind, character or description, whether known or unknown,
absolute or contingent, accrued or unaccrued, disputed or undisputed,
liquidated or unliquidated, secured or unsecured, joint or several, due or to
become due, vested or unvested, executory, determined, determinable or
otherwise, and whether or not the same is required to be accrued on the
financial statements of such Person.
"Lock-Up/Leak-Out Agreement": As defined in Section 2.2(a) and in the form of
Exhibit 2.2(c).
"Occupational Safety and Health Law": Any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational
safety and health hazards, including the Occupational Safety and Health Act,
and any program, whether governmental or private (such as those promulgated or
sponsored by industry associations and insurance companies), designed to
provide safe and healthful working conditions.
"Order": Any order, injunction, judgment, decree, ruling, assessment or
arbitration award of any Governmental Body or arbitrator.
"Ordinary Course of Business": An action taken by a Person will be deemed to
have been taken in the Ordinary Course of Business only if that action:
(a) is consistent in nature, scope and magnitude with the past
practices of such Person and is taken in the ordinary course of the normal,
day-to-day operations of such Person;
(b) does not require authorization by the board of directors or
shareholders of such Person (or by any Person or group of Persons exercising
similar authority) and does not require any other separate or special
authorization of any nature; and
(c) is similar in nature, scope and magnitude to actions customarily
taken, without any separate or special authorization, in the ordinary course
of the normal, day-to-day operations of other Persons that are in the same
line of business as such Person.
"OTC Bulletin Board": Means the OTC Bulletin Board of the National
Association of Securities Dealers, Inc., a medium upon which Wizzard Common
Stock is presently publicly traded.
"Person": An individual, partnership, corporation, business trust, limited
liability company, limited liability partnership, joint stock company, trust,
unincorporated association, joint venture or other entity or a Governmental
Body.
"Proceeding": Any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative, judicial or
investigative, whether formal or informal, whether public or private)
commenced, brought, conducted or heard by or before, or otherwise involving,
any Governmental Body or arbitrator.
"Purchase Price": As defined in Section 2.2(a).
"Real Property": Any Land and Improvements and all Appurtenances thereto.
"Real Property Lease": Any lease or rental agreement pertaining to the
occupancy of any improved space on any Land
"Record": Information pertaining to a Person, its business and/or its
properties and assets that is inscribed on a tangible medium or that is stored
in an electronic or other medium and is retrievable in perceivable form.
"Related Person": With respect to any Person:
(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) "control" (including "controlling,"
"controlled by," and "under common control with") means the possession, direct
or indirect, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities,
by contract or otherwise, and shall be construed as such term is used in the
rules promulgated under the Securities Act; (b) 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 (c) "Material Interest" means direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of
voting securities or other voting interests representing at least ten percent
(10%) of the outstanding voting power of a Person or equity securities or
other equity interests representing at least ten percent (10%) of the
outstanding equity securities or equity interests in a Person.
"Representative": With respect to a particular Person, any director, officer,
manager, employee, agent, consultant, advisor, accountant, financial advisor,
legal counsel or other representative of that Person.
"Restricted Securities": As defined in Rule 144 of the Securities and Exchange
Commission.
"SEC": The United States Securities and Exchange Commission.
"Securities Act": The Securities Act of 1933, as amended.
"Subsidiary": With respect to any Person (the "Owner"), any corporation or
other Person of which securities or other interests having the power to elect
a majority of that corporation's or other Person's board of directors or
similar governing body, or otherwise having the power to direct the business
and policies of that corporation or other Person (other than securities or
other interests having such power only upon the happening of a contingency
that has not occurred), are held by the Owner or one or more of its
Subsidiaries.
"Tangible Personal Property": All machinery, equipment, tools, furniture,
office equipment, computer hardware, supplies, materials, vehicles and other
items of tangible personal property (other than Inventories) of every kind
owned or leased by Interim (wherever located and whether or not carried on
Interim's books), together with any express or implied warranty by the
manufacturers or seller or lessors of any item or component part thereof and
all maintenance records and other documents relating thereto.
"Tax": Any income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental, windfall
profit, customs, vehicle, airplane, boat, vessel or other title or
registration, capital stock, franchise, employees' income withholding, foreign
or domestic withholding, social security, unemployment, disability, real
property, personal property, sales, use, transfer, value added, alternative,
add-on minimum and other tax, fee, assessment, levy, tariff, charge or duty of
any kind whatsoever and any interest, penalty, addition or additional amount
thereon imposed, assessed or collected by or under the authority of any
Governmental Body or payable under any tax-sharing agreement or any other
Contract.
"Tax Return": Any return (including any information return), report,
statement, schedule, notice, form, declaration, claim for refund or other
document or information filed with or submitted to, or required to be filed
with or submitted to, any Governmental Body in connection with the
determination, assessment, collection or payment of any Tax or in connection
with the administration, implementation or enforcement of or compliance with
any Legal Requirement relating to any Tax.
"Third Party": A Person that is not a party to this Agreement.
"Transaction Documents": This Agreement and all other agreement, documents or
instruments to be delivered pursuant to the provisions hereof, including
Section 5.4 hereof.
"Wizzard": As defined in the first paragraph of this Agreement.
"Wizzard Common Stock": The common stock, par value $0.001 per share, of
Wizzard.
"Wizzard Contract": Any Contract (a) under which Wizzard has or may acquire
any rights or benefits; (b) under which Wizzard has or may become subject to
any obligation or liability; or (c) by which Wizzard or any of its assets may
become bound.
"Wizzard's Counsel": Xxxxxxx X. Xxxxxxxxxx, Esq.
"Wizzard Intellectual Property": As defined in Section 4.12.
"Wizzard Lease": Any Real Property Lease or any lease or rental agreement,
license, right to use or installment and conditional sale agreement to which
Wizzard is a party and any other Wizzard Contract pertaining to the leasing or
use of any tangible personal property.
"Wizzard Material Adverse Effect": As defined in Section 4.7.
"Wizzard SEC Reports": As defined in Section 4.4.
1.2 Usage.
(a) Interpretation. In this Agreement, unless a clear contrary
intention appears:
(i) the singular number includes the plural number and vice
versa;
(ii) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are
not prohibited by this Agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement, document or instrument means
such agreement, document or instrument as amended or modified and in
effect from time to time in accordance with the terms thereof;
(v) reference to any Legal Requirement means such Legal
Requirement as amended, modified, codified, replaced or reenacted, in
whole or in part, and in effect from time to time, including rules and
regulations promulgated thereunder, and reference to any section or
other provision of any Legal Requirement means that provision of such
Legal Requirement from time to time in effect and constituting the
substantive amendment, modification, codification, replacement or
reenactment of such section or other provision;
(vi) "hereunder," "hereof," "hereto" and words of similar import
shall be deemed references to this Agreement as a whole and not to any
particular Article, Section or other provision hereof;
(vii) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding
such term;
(viii) "or" is used in the inclusive sense of "and/or";
(ix) with respect to the determination of any period of time,
"from" means "from and including" and "to" means "to but excluding"; and
(x) references to documents, instruments or agreements shall be
deemed to refer as well to all addenda, exhibits, schedules or
amendments thereto.
(b) Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted and all
accounting determinations hereunder shall be made in accordance with sound
accounting principles.
(c) Legal Representation of the Parties. This Agreement was negotiated
by the parties with the benefit of legal representation, and any rule of
construction or interpretation otherwise requiring this Agreement to be
construed or interpreted against any party shall not apply to any construction
or interpretation hereof.
2. THE PURCHASE TRANSACTION AND CERTAIN ACTIONS; THE PURCHASE PRICE AND
PAYMENT OF PURCHASE PRICE; PHASE I INCENTIVES; PHASE II INCENTIVES; CLOSING
AND ASSURANCE PROVISION.
2.1 The Purchase Transaction and Certain Actions.
(a) The Purchase. Upon the terms and subject to the conditions set
forth in this Agreement, at the Closing, Wizzard shall purchase and the
Sellers shall sell all of the outstanding Interim Common Stock. Xxxxxx shall
be entitled to take a dividend of $100,000 from Interim on the day of Closing
Date. On the Closing Date, Xxxxxx shall also be entitled to take a dividend
from Interim equal to the July 31 year to date profits of Interim. In
addition, Xxxxxx shall be entitled to an additional dividend from Interim
equal to the profit for August, 2005 (without deduction for the settlement
paid to the Office of the Inspector General), as soon as the profit for
August, 2005, is calculated (which shall be no later than October 1, 2005).
(b) Maximum Liabilities. On Closing, the Sellers shall be
responsible for any Interim Liabilities not incurred in the Ordinary Course of
Business of Interim; Interim shall have no more than $114,000 in Liabilities
at December 31, 2004; and the Sellers shall indemnify and hold Wizzard and
Interim harmless from and against any liabilities in excess of such amount or
from and against any claim of any type or nature whatsoever that is based upon
any act, omission, occurrence or other event occurring prior to Closing (the
"Xxxxxx Liabilities"). Notwithstanding the foregoing, the maximum indemnity
obligation of Xxxxxx is limited to 50% of the cash payment portion of the
Purchase Price, provided there is no fraud or deceit on the part of the
Sellers in this respect. Additionally, Xxxxxx shall not have any indemnity
obligation with respect to any liability that is or would be covered by
insurance carried by Interim on the date of Closing. Buyer shall undertake to
make Interim pay all debts and liabilities of Interim other than the Xxxxxx
Liabilities and shall indemnify and hold Xxxxxx harmless from and against any
liabilities of Interim other than the Xxxxxx Liabilities. In the event Xxxxxx
has personally guaranteed any obligations of Interim, Buyer shall undertake to
get Xxxxxx released from such personal guarantees and, if necessary, will pay
any indebtedness as necessary to obtain such release. Notwithstanding the
foregoing, Xxxxxx will remain as a guarantor on the 120 day loan at Hilltop
National Bank in the principal amount of $250,000; provided, however, that
Xxxxxxxxxxx X. Xxxxxxx, Xxxxx Xxxxxxxx, Xxxxxx Xxxxx and Xxxx Xxxxxxxx shall
personally guaranty to Xxxxxx that the loan will be paid when due and that
Xxxxxx will not incur any personal liability for such loan.
(c) Employment Agreement. Xxxxxx shall execute and deliver to
Interim the Employment Agreement in the form of Exhibit 2.1(c) attached hereto
and incorporated herein by reference, and effective on such execution and
delivery, all other agreements of any type or nature whatsoever between Xxxxxx
or any of the Sellers and Interim shall be terminated, compromised and
cancelled.
(d) Directors. On the Closing, the persons set forth in Exhibit
2.1(d) hereof shall be designated as directors of Interim, each to hold office
in accordance with the Articles of Incorporation and Bylaws of Wizzard, until
each director's successor is duly elected or appointed and qualified, and then
Xxxxxx shall resign as a director of Interim.
(e) Officers. On Closing, the persons set forth in Exhibit 2.1(e)hereto
shall be elected as the officers of Interim, each to hold office in
accordance with the Articles of Incorporation and Bylaws of Wizzard and until
each such officer's successor is duly elected or appointed and qualified.
(f) Medicare Reimbursement Due from the year 2000. Interim and Interim
Healthcare of Southern Wyoming, Inc. are owed $46,743 and $42,933 respectively
by Medicare for reimbursements from 2000. The parties agree that if or when
Interim receives either or both of these payments the full amount received
will be paid to Xxxxxx within five (5) business days of receipt as follows:
(i) any payment received on account of Interim will be paid to Xxxxxx as an
addition to the Purchase Price; and (ii) any payment received on account of
Interim Healthcare of Southern Wyoming, Inc. will be paid to Xxxxxx for and on
behalf of Interim Healthcare of Southern Wyoming, Inc. The Sellers disclose
that the payment received on account of Interim may be taxable income to
Interim. None of these payments shall be counted in any respect in
determining the EBITDA for Phase I or II Incentive payments that are outlined
in Sections 2.3 and 2.4 hereof.
2.2 The Purchase Price and Payment of Purchase Price.
(a) The Purchase Price and Payment. Subject to the provisions of
paragraph 2.1(f) above, the Purchase Price shall be four times the Interim
EBITDA for the calendar year ended December 31, 2004 reduced by the assumed
note obligation related to the Office of Inspector General Interim settlement
of $250,000. The Interim EBITDA for the calendar year ended December 31, 2004
agreed to be $288,000 (subject to adjustment as set forth below). The
Purchase Price, therefore, is $902,000 (i.e. $1,152,000 - $250,000), subject
to adjustment as set forth below. The Purchase Price shall be paid as
follows: (i) $518,000 shall be paid in cash at the time of Closing; and (ii)
$384,000 (subject to adjustment as set forth below) shall be paid in shares of
Wizzard Common Stock that are "restricted securities" under Rule 144 of the
SEC, with the value of the Wizzard Common Stock to be based upon the average
closing price of the Wizzard Common Stock on the OTC Bulletin Board for the
five (5) business days preceding the execution and delivery of this Agreement.
(b) Possible Adjustment to the Stock Portion of the Purchase Price.
Buyer has completed an audit or otherwise satisfied itself as to the EBITDA
for the calendar year ended December 31, 2004 with the exception of verifying
the accounts receivable listed on the December 31, 2004 balance sheet related
to Medicare and Medicaid payments (the "Unverified Receivables"). If after
the audit of the Unverified Receivables, it is determined that actual
collectible amount of the Unverified Receivables is less than 90% of the total
amount of Unverified Receivables shown on the December 31, 2004 balance sheet,
then the portion of the Purchase Price paid in Wizzard Common Stock will be
reduced by an amount equal to four times the difference between 90% of the
amount of the Unverified Receivables shown on the December 31, 2004 balance
sheet and the amount determined through the audit to be collectable. Xxxxxx
will return any Wizzard Common Stock to the extent necessary to comply with
the provisions of this paragraph. If it is necessary to return any of the
Wizzard Common Stock, amount of stock to be returned will be based on the
value ascribed to the Wizzard Common Stock on the Closing Date.
(c) Lock-Up/Leak-Out Agreement. The resale of all Wizzard Common
Stock issued to the Sellers shall be subject to the Lock-Up/Leak-Out Agreement
in the form of Exhibit 2.2(c) attached hereto and incorporated herein by
reference. The Wizzard Common Stock that is to be issued as part of the
payment of the Purchase Price is subject to cancellation as liquidated damages
and not as a penalty in the event of early termination of the employment of
Xxxxxx under certain circumstances her the Employment Agreement that is
referenced in paragraph 2.1(c). Any stock certificate issued hereunder shall
be imprinted with an appropriate legend indicating that the resale thereof is
subject to compliance with such Lock-Up/Leak-Out Agreement, and further, that
the Wizzard Common Stock represented thereby is subject to cancellation in the
event of early termination of such Employment Agreement.
2.3 Phase I Incentives. The Sellers will receive an additional
payment of two (2) times the Interim EBITDA for the year ended September 30,
2006 (without taking a deduction for the settlement payment to the Office of
the Inspector General in August or September, 2005), based upon the amount
that exceeds the Interim EBITDA for the year ended December 31, 2004, twenty-
five percent (25%) of which shall be paid in cash and seventy-five percent
(75%) of which shall be paid in shares of Wizzard Common Stock that are
"restricted securities" under Rule 144 of the SEC, with the value of the
Wizzard Common Stock to be based upon the average closing price of the Wizzard
Common Stock on the OTC Bulletin Board for the five (5) business days
preceding the earlier of receipt of the audited financial statements of
Interim for the year ended September 30, 2006, or December 31, 2006. The
resale of all Wizzard Common Stock issued to the Sellers shall be subject to
the Lock-Up/Leak-Out Agreement in the form of Exhibit 2.2(c). For all
purposes related to this Phase Incentive I calculation, Interim will be
treated as a separate business entity from Wizzard, with accounting in
accordance with GAAP; and Interim will be responsible for all compliance and
regulatory controls associated with its current operations and as applied by
the SEC and any national securities exchanges by which Wizzard may be
governed. The Wizzard Common Stock that is to be issued as part of the
payment of the Phase I Incentive, along with the Phase I Incentive payment, if
any, is subject to cancellation as liquidated damages and not as a penalty in
the event of early termination of the employment of Xxxxxx under certain
circumstances her the Employment Agreement that is referenced in Section
2.1(c). Any stock certificate issued hereunder shall be imprinted with an
appropriate legend indicating that the resale thereof is subject to compliance
with such Lock-Up/Leak-Out Agreement, and further, that the Wizzard Common
Stock represented thereby is subject to cancellation in the event of early
termination of such Employment Agreement.
2.4 Phase II Incentives. The Sellers will receive an additional
payment of two (2) times the Interim EBITDA for the year ended September 30,
2007, based upon the amount that exceeds the Interim EBITDA for the year ended
September 30, 2006 (without taking a deduction for the settlement payment to
the Office of the Inspector General in August or September, 2005), twenty-five
percent (25%) of which shall be paid in cash and seventy-five percent (75%) of
which shall be paid in shares of Wizzard Common Stock that are "restricted
securities" under Rule 144 of the SEC, with the value of the Wizzard Common
Stock to be based upon the average closing price of the Wizzard Common Stock
on the OTC Bulletin Board for the five (5) business days preceding the earlier
of receipt of the audited financial statements of Interim for the year ended
September 30, 2007, or December 31, 2007. The resale of all Wizzard Common
Stock issued to the Sellers shall be subject to the Lock-Up/Leak-Out Agreement
in the form of Exhibit 2.2(c). For all purposes related to this Phase
Incentive I calculation, Interim will be treated as a separate business entity
from Wizzard, with accounting in accordance with GAAP; and Interim will be
responsible for all compliance and regulatory controls associated with its
current operations and as applied by the SEC and any national securities
exchanges by which Wizzard may be governed. The Wizzard Common Stock that is
to be issued as part of the payment of the Phase II Incentive, along with the
Phase II Incentive payment, if any, is subject to cancellation as liquidated
damages and not as a penalty in the event of early termination of the
employment of Xxxxxx under certain circumstances her the Employment Agreement
that is referenced in Section 2.1(c). Any stock certificate issued hereunder
shall be imprinted with an appropriate legend indicating that the resale
thereof is subject to compliance with such Lock-Up/Leak-Out Agreement, and
further, that the Wizzard Common Stock represented thereby is subject to
cancellation in the event of early termination of such Employment Agreement.
2.5 Closing. The Closing (the "Closing") will take place at such location,
on such date and at such time as the parties hereto shall mutually agree at
the earliest practicable time after the satisfaction or waiver of the
conditions set forth in Articles 5 and 6, but in no event later than five (5)
Business Days after the date that all of the conditions of Articles 5 and 6
are satisfied or waived.
2.6 Governmental Notice. Buyer will give notice to all Governmental Bodies
to whom notice of the Transaction is required to be given within five (5)
business days after the Closing.
3. REPRESENTATIONS AND WARRANTIES OF INTERIM.
The Sellers represent and warrant to Wizzard as follows:
3.1 Organization and Good Standing.
(a) Interim 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 the Business, to own or use Interim
Assets that it purports to own or use, and to perform all its obligations
under the Interim Contracts. Interim is duly qualified to do business in its
jurisdiction of incorporation and is in good standing under the laws of State
of Wyoming.
(b) Interim has no Subsidiary and does not own any shares of capital
stock or other securities of any other Person.
3.2 Enforceability; Authority; No Conflict.
(a) Upon the execution and delivery by the Sellers, this Agreement and
the other Transaction Documents to which they are a party constitute the
legal, valid and binding obligation of each, as applicable, enforceable
against them in accordance with its terms. Except for the approval of the
Interim Common Stockholder, the Sellers have the absolute and unrestricted
right, power and authority to execute and deliver this Agreement and the other
Transaction Documents to which they are a party and to perform their
respective obligations hereunder and thereunder.
(b) Except as set forth in Schedule 3.2(b), neither the execution and
delivery of any of the Transaction Documents nor the consummation or
performance of any of the Contemplated Transactions will, directly or
indirectly (with or without notice or lapse of time):
(i) Breach (A) any provision of any of the Governing Documents
of Interim or (B) any resolution adopted by the board of directors of
Interim or (C) the provisions of any agreement that the Sellers are
party to;
(ii) Breach or give any Governmental Body or other Person 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 Interim, or any of the Interim Assets, may be subject;
(iii) contravene, conflict with or result in a violation or breach
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 Interim or that otherwise
relates to the Interim Assets or to the Business;
(iv) Breach 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 payment under, or to cancel, terminate or
modify, any Interim Contract; or
(v) result in the imposition or creation of any Encumbrance upon
or with respect to any of the Interim Assets.
(c) Except as set forth in Schedule 3.2(c), and except for the
approval of the Interim Common Stockholder, Interim and the Sellers are not
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.
3.3 Capitalization. The authorized capital stock of Interim consists of
50,000 shares of Interim Common Stock, of which 1,000 shares are issued and
outstanding, all owned, free and clear of any liens or encumbrances of any
type or nature whatsoever, by the Trust. No other capital stock is authorized
or issued. All issued and outstanding shares of Interim Common Stock are duly
authorized, validly issued, fully paid and non-assessable. Except as set
forth on Schedule 3.3(a), there are no outstanding rights, subscriptions,
warrants, puts, calls, unsatisfied preemptive rights, options or other
agreements of any kind relating to any of the outstanding, authorized but
unissued, unauthorized shares of capital stock or any other security of
Interim, and there is no authorized or outstanding security of any kind
convertible into or exchangeable for any such capital stock or other security.
3.4 Financial Statements. The Sellers have delivered to Wizzard an
unaudited balance sheet of Interim as of December 31, 2004 (the "Interim
Balance Sheet"). Such financial statement fairly presents the financial
condition and the results of operations, and cash flows of Interim as of the
respective dates of and for the periods referred to in such financial
statement. The financial statement referred to in this Section 3.4 reflect
and will reflect the consistent application of sound accounting principles
throughout the periods involved except as disclosed in the notes to such
financial statements.
3.5 Books and Records. The books of account and other financial Records of
Interim, all of which have been made available to Wizzard by the Sellers, are
complete and correct and represent actual, bona fide transactions and have
been maintained in accordance with sound business practices, including the
maintenance of an adequate system of internal controls. The corporate minute
books of Interim, all of which have been made available to Wizzard by the
Sellers, contain accurate and complete Records of all minutes prepared by
Interim. Interim is a Wyoming Statutory Close Corporation and as such is not
required to keep minutes or meetings of the shareholders or board of
directors.
3.6 Sufficiency of Interim Assets. The Interim Assets constitute all of the
assets, tangible and intangible, of any nature whatsoever, reasonably
necessary to operate the Business in the manner presently operated by Interim.
3.7 Owned Real Property. Interim does not own or hold an ownership interest
in any Real Property, except as set forth in Schedule 3.7.
3.8 Leased Real Property. Interim does not lease any Real Property, except
as set forth in Schedule 3.8.
3.9 Title to Interim Assets; Encumbrances. Interim owns good and marketable
title to all of the Interim Assets free and clear of any Encumbrances other
than those described in Schedule 3.9 ("Interim Permitted Encumbrances").
Interim warrants to Wizzard that, at the time of Closing, all other Interim
Assets shall be free and clear of all Encumbrances other than Interim
Permitted Encumbrances.
3.10 Condition of Tangible Personal Property. To Interim's Knowledge each
item of Tangible Personal Property of Interim is in good repair and good
operating condition, ordinary wear and tear excepted, is suitable for
immediate use in the Ordinary Course of Business and is free from latent and
patent defects. To Interim's Knowledge no item of Tangible Personal Property
is in need of repair or replacement other than as part of routine maintenance
in the Ordinary Course of Business. Except as disclosed in Schedule 3.10, all
Tangible Personal Property used in the Business is in the possession of
Interim.
3.11 Accounts Receivable. All Accounts Receivable that are reflected on the
Interim Balance Sheet represent or will represent, as the case may be, valid
obligations arising from sales actually made or services actually performed by
Interim in the Ordinary Course of Business. Except to the extent paid prior
to the Closing Date, Xxxxxx gives notice that some of the Accounts Receivable
will likely not be collected, but warrants that the percentage of write-offs
of Accounts Receivable will not be materially different from historic write-
offs. However, except as set forth above, Xxxxxx does not make any warranty
as to the collectability of any Account Receivable and specifically discloses
that the actual amount paid by Medicare, Medicaid or a third party payor, such
as an insurance provider, may be less than the actual amount of the Account
Receivable shown on the Balance Sheet. To Xxxxxx'x Knowledge, there is no
contest, claim, defense or right of setoff under any Contract with any account
debtor of an Account Receivable relating to the amount or validity of such
Account Receivable. Schedule 3.11 contains a complete and accurate list of
all Accounts Receivable as of the date of the Interim Balance Sheet, which
list sets forth the aging of each such Account Receivable.
3.12 Inventories. Interim owns good and marketable title to all of its
Inventories free and clear of any Encumbrances other than those described in
Schedule 3.12 ("Interim Permitted Encumbrances").
3.13 No Undisclosed Liabilities. Except as set forth in Schedule 3.13,
Interim has no Liability except for Liabilities reflected or reserved against
in the Balance Sheet and current liabilities incurred in the Ordinary Course
of Business of Interim since the date of the Interim Balance Sheet.
3.14 Taxes. Interim has filed or caused to be filed on a timely basis all
Tax Returns and all reports with respect to Taxes that are or were required to
be filed pursuant to applicable Legal Requirements. Interim has paid, or made
provision for the payment of, all Taxes that have or may have become due for
all periods covered by the Tax Returns or otherwise, or pursuant to any
assessment received by Interim. Except as provided in Schedule 3.14, Interim
currently is not the beneficiary of any extension of time within which to file
any Tax Return, and (b) there are no Encumbrances on any of the Interim Assets
that arose in connection with any failure (or alleged failure) to pay any Tax
and Interim has no Knowledge of any basis for assertion of any claims
attributable to Taxes which, if adversely determined, would result in any such
Encumbrance.
3.15 [Intentionally Omitted]
3.16 Employee Benefits.
(a) Schedule 3.16(a) lists all material
(i) "employee benefit plans," within the meaning of Section 3(3) of ERISA, of
Interim, (ii) bonus, stock option, stock purchase, stock appreciation right,
incentive, deferred compensation, supplemental retirement, severance, and
fringe benefit plans, programs, policies or arrangements, and (iii) employment
or consulting agreements, for the benefit of, or relating to, any current or
former employee (or any beneficiary thereof) of Interim, in the case of a plan
described in (i) or (ii) above, that is currently maintained by Interim or
with respect to which Interim has an obligation to contribute, and in the case
of an agreement described in (iii) above, that is currently in effect (the
"Interim Employee Plans"). Interim has heretofore made available to Wizzard
true and complete copies of the Interim Employee Plans and any amendments
thereto, any related trust, insurance contract, summary plan description, and,
to the extent required under ERISA or the Code, the most recent annual report
on Form 5500 and summaries of material modifications.
(b) Except as set forth on Schedule 3.16(b), no Interim Employee Plan is
(1) a "multiemployer plan" within the meaning of Sections 3(37) or 4001(a)(3)
of ERISA, (2) a "multiple employer plan" within the meaning of Section 3(40)
of ERISA or Section 413(c) of the Code, or (3) is subject to Title IV of ERISA
or Section 412 of the Code.
(c) Except as set forth on Schedule 3.16(c), there is no proceeding
pending or, to Interim's Knowledge, threatened against the assets of any
Interim Employee Plan or, with respect to any Interim Employee Plan, against
Interim other than proceedings that would not reasonably be expected to result
in a material liability, and to Interim's Knowledge, there is no proceeding
pending or threatened in writing against any fiduciary of any Interim Employee
Plan other than proceedings that would not reasonably be expected to result in
a material liability.
(d) Each of the Interim Employee Plans has been operated and
administered in all material respects in accordance with its terms and
applicable law, including, but not limited to, ERISA and the Code.
(e) Each of the Interim Employee Plans that is intended to be
"qualified" within the meaning of Section 401(a) of the Code has received a
favorable determination, notification, or opinion letter from the IRS.
(f) Except as set forth on Schedule 3.16(f), no director, officer or
employee of Interim will become entitled to retirement, severance or similar
benefits or to enhanced or accelerated benefits (including any acceleration of
vesting or lapsing of restrictions with respect to equity-based awards) under
any Interim Employee Plan solely as a result of consummation of the
Contemplated Transactions.
3.17 Compliance with Legal Requirements; Governmental Authorizations.
(a) Except as set forth in Schedule 3.17(a):
(i) To Interim's Knowledge, Interim has been and is in full
compliance with each Legal Requirement that is or was applicable to it
or to the conduct or operation of the Business or the ownership or use
of any of the Interim Assets;
(ii) To Interim's Knowledge, 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 Interim of, or a failure on
the part of Interim to comply with, any Legal Requirement or (B) may
give rise to any obligation on the part of Interim to undertake, or to
bear all or any portion of the cost of, any remedial action of any
nature; and
(iii) Interim has not received 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 Interim to
undertake, or to bear all or any portion of the cost of, any remedial
action of any nature.
(b) Schedule 3.17(b) contains a complete and accurate list of each
Governmental Authorization that is held by Interim or that otherwise relates
to the Business or the Interim Assets. Each Governmental Authorization listed
or required to be listed in Schedule 3.17(b) is valid and in full force and
effect. To Interim's Knowledge, the Governmental Authorizations listed in
Schedule 3.17(b) collectively constitute all of the Governmental
Authorizations necessary to permit Interim to lawfully conduct and operate the
Business and to permit Interim to own and use the Interim Assets in the manner
in which it currently owns and uses the Interim Assets.
3.18 Legal Proceedings; Orders.
(a) Except as set forth in Schedule 3.18(a), there is no pending or,
to Interim's Knowledge, threatened Proceeding:
(i) by or against Interim or that otherwise relates to or may
affect the Business or any of the Interim Assets; 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 Interim, no event has occurred or circumstance exists that
is reasonably likely to give rise to or serve as a basis for the commencement
of any such Proceeding. Interim has delivered to Wizzard copies of all
pleadings, correspondence and other documents relating to each Proceeding
listed in Schedule 3.18(a).
(b) Except as set forth in Schedule 3.18(b):
(i) there is no Order to which Interim, the Business or any of
the Interim Assets is subject; and
(ii) to the Knowledge of Interim, no officer, director, agent or
employee of Interim 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.
(c) Except as set forth in Schedule 3.18(c):
(i) Interim has been and is in compliance with all of the terms
and requirements of each Order to which it, the Business or any of the
Interim Assets is or has been subject;
(ii) no event has occurred or circumstance exists that is
reasonably likely to 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 Interim, the Business or any of the
Interim Assets is subject; and
(iii) Interim has not received 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
Interim, the Business or any of the Interim Assets is subject.
3.19 Absence of Certain Changes and Events. Except as set forth in Schedule
3.19, since the date of the Interim Balance Sheet, Interim has conducted the
Business only in the Ordinary Course of Business and there has not been any:
(a) change in Interim's authorized or issued capital stock, grant of
any stock option or right to purchase shares of capital stock of Interim or
issuance of any security convertible into such capital stock;
(b) amendment to the Governing Documents of Interim;
(c) payment (except in the Ordinary Course of Business) or increase by
Interim of any bonuses, salaries or other compensation to any director,
officer or employee or entry into any employment, severance or similar
Contract with any director, officer or employee;
(d) adoption of, amendment to or increase in the payments to or
benefits under, any Interim Employee Plan;
(e) damage to or destruction or loss of any property or assets used in
the Business, whether or not covered by insurance;
(f) entry into, termination of or receipt of notice of termination of
(i) any license, distributorship, dealer, sales representative, joint venture,
credit or similar Contract to which Interim is a party, or (ii) any Contract
or transaction involving a total remaining commitment by Interim of at least
$3,000;
(g) sale (other than sales of Inventories in the Ordinary Course of
Business), lease or other disposition of any asset or property of Interim used
in the Business (including the Intellectual Property Assets) or the creation
of any Encumbrance on any Asset;
(h) cancellation or waiver of any claims or rights with a value to
Interim in excess of $3,000;
(i) indication by any customer or supplier of an intention to
discontinue or change the terms of its relationship with Interim;
(j) material change in the accounting methods used by Interim; or
(k) Contract by Interim to do any of the foregoing.
3.20 Contracts; No Defaults
(a) Schedule 3.20(a) contains an accurate and complete list, and
Interim has delivered to Wizzard accurate and complete copies, of:
(i) each Interim Contract that involves performance of services
or delivery of goods or materials by Interim of an amount or value in
excess of $3,000;
(ii) each Interim Contract that involves performance of services
or delivery of goods or materials to Interim of an amount or value in
excess of $3,000;
(iii) each Interim Contract that was not entered into in the
Ordinary Course of Business and that involves expenditures or receipts
of Interim in excess of $3,000;
(iv) each Interim Contract affecting the ownership of, leasing
of, title to, use of or any leasehold or other interest in any real or
personal property (except personal property leases and installment and
conditional sales agreements having a value per item or aggregate
payments of less than $3,000 and with a term of less than one year);
(v) each Interim Contract with any labor union or other employee
representative of a group of employees relating to wages, hours and
other conditions of employment;
(vi) each Interim Contract (however named) involving a sharing of
profits, losses, costs or liabilities by Interim with any other Person;
(vii) each Interim Contract containing covenants that in any way
purport to restrict the Business activity or limit the freedom of
Interim to engage in any line of business or to compete with any Person;
(viii) each Interim Contract providing for payments to or by
any Person based on sales, purchases or profits, other than direct
payments for goods;
(ix) each power of attorney of Interim that is currently
effective and outstanding;
(x) each Interim Contract entered into other than in the
Ordinary Course of Business that contains or provides for an express
undertaking by Interim to be responsible for consequential damages;
(xi) each Interim Contract for capital expenditures in excess of
$3,000;
(xii) each Interim Contract not denominated in U.S. dollars;
(xiii) each written warranty, guaranty and/or other similar
undertaking with respect to contractual performance extended by Interim
other than in the Ordinary Course of Business; and
(xiv) each amendment, supplement and modification (whether oral or
written) in respect of any of the foregoing.
(b) Except as set forth in Schedule 3.20(b):
(i) each Interim Contract identified or required to be
identified in Schedule 3.20(a) is in full force and effect and is valid
and enforceable in accordance with its terms;
(ii) each Interim Contract identified or required to be
identified in Schedule 3.20(a) will not be subject to cancellation or
termination by the other party simply as a result of the Contemplated
Transactions; and
(iii) to the Knowledge of Interim, no Interim Contract identified
or required to be identified in Schedule 3.20(a) could reasonably be
expected to have, upon completion or performance thereof, a Interim
Material Adverse Affect.
(c) Except as set forth in Schedule 3.20(c):
(i) Interim has been and is in compliance with all applicable
terms and requirements of each Interim Contract;
(ii) to Interim's Knowledge, each Third Party that has or had
any obligation or liability under any Interim Contract has been and is
in full compliance with all applicable terms and requirements of such
Contract;
(iii) to Interims Knowledge, no event has occurred or circumstance
exists that (with or without notice or lapse of time) may contravene,
conflict with or result in a Breach of, or give Interim or any other
Person the right to declare a default or exercise any remedy under, or
to accelerate the maturity or performance of, or payment under, or to
cancel, terminate or modify, any Interim Contract;
(iv) to Interim's Knowledge, no event has occurred or
circumstance exists under or by virtue of any Contract that (with or
without notice or lapse of time) would cause the creation of any
Encumbrance affecting any of the Acquired Assets; and
(v) Interim 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 Interim Contract.
(d) There are no renegotiations of, attempts to renegotiate or
outstanding rights to renegotiate any material amounts paid or payable to
Interim under current or completed Interim Contracts with any Person having
the contractual or statutory right to demand or require such renegotiation and
no such Person has made written demand for such renegotiation.
(e) Each Interim Contract relating to the sale, design, manufacture or
provision of products or services by Interim has been entered into in the
Ordinary Course of Business of Interim and has 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.
3.21 Environmental Matters. None of the operations of Interim involves the
generation, transportation, treatment, storage or disposal of hazardous waste,
as defined under 40 C.F.R. Parts 260-270 or any state, local or foreign
equivalent.
3.22 Employees.
(a) Schedule 3.22(a) contains a complete and accurate list of the
following information for each employee, director, independent contractor,
consultant and agent of Interim, including each employee on leave of absence
or layoff status: job title; date of hiring or engagement; date of
commencement of employment or engagement; current compensation paid or payable
and any change in compensation since December 31, 2004; sick and vacation
leave that is accrued but unused; and service credited for purposes of vesting
and eligibility to participate under any Employee Plan, or any other employee
or director benefit plan.
(b) To the Knowledge of Interim, no officer, director, agent,
employee, consultant, or contractor of Interim is bound by any Contract that
purports to limit the ability of such officer, director, agent, employee,
consultant, or contractor (i) to engage in or continue or perform any conduct,
activity, duties or practice relating to the Business or (ii) to assign to
Interim or to any other Person any rights to any invention, improvement, or
discovery. To the Knowledge of Interim no former or current employee of
Interim is a party to, or is otherwise bound by, any Contract that in any way
adversely affected, affects, or will affect the ability of Interim or Wizzard
to conduct the Business as heretofore carried on by Interim.
3.23 Labor Disputes; Compliance. Except as disclosed in Schedule 3.23, (i)
Interim has not been, and is not now, a party to any collective bargaining
agreement or other labor contract; (ii) there is not presently pending or
existing, and to Interim's Knowledge there is not threatened, any strike,
slowdown, picketing, work stoppage or employee grievance process involving
Interim; (iii) to Interim's Knowledge no event has occurred or circumstance
exists that could provide the basis for any work stoppage or other labor
dispute; (iv) there is not pending or, to Interim's Knowledge, threatened
against or affecting Interim any Proceeding relating to the alleged violation
of any Legal Requirement pertaining to labor relations or employment matters,
including any charge or complaint filed with the National Labor Relations
Board or any comparable Governmental Body, and there is no organizational
activity or other labor dispute against or affecting Interim or its
Facilities; (v) no application or petition for an election of or for
certification of a collective bargaining agent is pending; (vi) no grievance
or arbitration Proceeding exists that could reasonably be expected to have a
Interim Material Adverse Effect; (vii) there is no lockout of any employees by
Interim, and no such action is contemplated by Interim; and (viii) to
Interim's Knowledge there has been no charge of discrimination filed against
or threatened against Interim with the Equal Employment Opportunity Commission
or similar Governmental Body.
3.24 Intellectual Property Assets.
(a) Interim owns, or is licensed or otherwise possesses or has applied
for legal enforceable rights to use all: (i) patentable inventions,
technology, computer programs and software (including password unprotected
interpretive code or source code, object code, development documentation,
programming tools, drawings, specifications and data) and all applications and
patents in any jurisdiction pertaining to the foregoing, including re-issues,
continuations, divisions, continuations-in-part, renewals or extensions; (ii)
trade secrets, including confidential and other non-public information (iii)
copyrights in writings, designs, software programs, mask works or other works,
applications or registrations in any jurisdiction for the foregoing and all
moral rights related thereto; (iv) databases and all database rights; and (v)
Internet Web sites, domain names and applications and registrations pertaining
thereto (collectively, "Interim Intellectual Property") that are used in the
Business except for any such failures to own, be licensed or process that
would not be reasonably likely to have a Interim Material Adverse Effect.
(b) Except as may be evidenced by patents issued after the date
hereof, to Interim's Knowledge, there are no conflicts with or infringements
of any material Interim Intellectual Property by any third party and the
conduct of the businesses as currently conducted does not conflict with or
infringe any proprietary right of a third party.
(c) Schedule 3.24 sets forth a complete list of all patents,
registrations and applications pertaining to the Interim Intellectual Property
owned by Interim. Except as set forth on Schedule 3.24, all such Interim
Intellectual Property listed is owned by Interim, free and clear of liens or
encumbrances of any nature.
(d) Schedule 3.24 sets forth a complete list of all material licenses,
sublicenses and other agreements in which Interim has granted rights to any
person to use the Interim Intellectual Property. Interim will not, as a
result of the execution and delivery of this Agreement or the performance of
its obligations under this Agreement, be in breach of any license, sublicense
or other agreement relating to the Interim Intellectual Property.
3.25 Foreign Investment in Real Property Tax Act. Interim is not a United
States Real Property Holding Company for purposes of the Foreign Investment in
Real Property Tax Act of 1980.
3.26 Product Liability. Other than as described on Schedule 3.26, there has
been no claim, notice of claim, recall, demand, investigation or other
indication received by Interim concerning potential or alleged defective
products (other than customer dissatisfaction returns in the Ordinary Course
of Business). To Interim's Knowledge, there is no material product quality,
design, engineering or safety issue concerning any product manufactured,
distributed or sold by Interim. To Interim's Knowledge, all products sold by
Interim have complied with all governmental, trade association and other
mandatory and voluntary requirements, specifications and other forms of
guidance
3.27 Affiliated Transactions. All loans, sales, purchases and other
transactions between Interim and any Related Person of Interim which are
currently in effect are described in Schedule 3.27.
3.28 Brokers or Finders. Except as described on Schedule 3.28, neither
Interim nor any of its Representatives have incurred any obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payments in connection with the Contemplated
Transactions.
3.29 Disclosure.
(a) No representation or warranty or other statement made by Interim
in this Agreement, the Disclosure Schedules, any supplement to the Disclosure
Schedules, the certificates delivered pursuant to Section 5.4 or otherwise in
connection with the Contemplated Transactions contains any untrue statement or
omits to state a material fact necessary to make any of them, in light of the
circumstances in which it was made, not misleading.
(b) Interim has no Knowledge of any fact that has specific application
to Interim, the Business or the Interim Assets (other than general economic or
industry conditions) and that could reasonably be expected to have a Material
Adverse Affect that has not been set forth in this Agreement or the Disclosure
Schedules.
3.30 Access to Wizzard Information and Acknowledgment. The Sellers further
represent (i) that they have received and reviewed the Wizzard SEC Reports and
have been given full and complete access to Wizzard for the purpose of
obtaining such information as the Sellers or their qualified representative
have reasonably requested in connection with their decision sell the Interim
Common Stock in partial consideration of which they will be paid in shares of
Wizzard Common Stock; (ii) that the Sellers have been afforded the opportunity
to ask questions of the officers of Wizzard regarding its business prospects
and the Wizzard Common Stock, all as they or their qualified representatives
have found necessary to make an informed investment decision to receive the
Wizzard Common Stock in partial consideration of the Purchase Price of their
Interim Common Stock; (iii) that they know the meaning of the phrase
"restricted securities" and know that they are not freely tradeable registered
for resale with the SEC or in accordance with Rule 144 of the SEC or an
available exemption from the registration provisions of the Securities Act;
(iv) that Wizzard has no obligation to register the Wizzard Common Stock being
conveyed by it hereunder; (v) that each of the Sellers is an "accredited
investors," or a "sophisticated investor," as those terms of defined in Rule
506 of the SEC, and as such, each of the Sellers if fully capable of assessing
the risks and merits of an investment in the Wizzard Common Stock, either
singly or with the aid and assistance of a qualified purchaser representative;
and (vi) that any stock certificate that represent such shares of Wizzard
Common Stock shall be imprinted with an appropriate "restricted" legend to
the effect of the foregoing, and will be substantially as follows:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR
TRANSFERRED FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION THEREOF
UNDER THE SECURITIES ACT OF 1933 AND/OR THE SECURITIES ACT OF ANY STATE HAVING
JURISDICTION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
THESE SECURITIES ARE SUBJECT TO THE RESALE PROVISIONS OF A LOCK-UP.LEAK-OUT
AGREEMENT BETWEEN THE HOLDER AND THE COMPANY THAT IS ON FILE WITH THE TRANSFER
AGENT FOR THE COMPANY.
4. REPRESENTATIONS AND WARRANTIES OF WIZZARD.
Wizzard represents and warrants to Interim as follows:
4.1 Organization and Good Standing.
(a) Wizzard 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, to own or use the
assets that it purports to own or use, and to perform all of its obligations
under the Wizzard Contracts. Wizzard 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. Schedule 4.1(a) contains a complete and accurate list of
every jurisdiction in which Wizzard is qualified to do business.
(b) Wizzard has no Subsidiary and does not own any shares of capital
stock or other securities of any other Person, other than as set forth on
Schedule 4.1(b).
4.2 Enforceability; Authority; No Conflict.
(a) Upon the execution and delivery by it, this Agreement and the
other Transaction Documents to which it is a party constitute the legal, valid
and binding obligation of Wizzard, enforceable against it in accordance with
its terms. Wizzard has the absolute and unrestricted right, power and
authority to execute and deliver this Agreement and the other Transaction
Documents to which it is a party and to perform its obligations hereunder and
thereunder, and such action has been duly authorized by all necessary action
by Wizzard's board of directors.
(b) Except as set forth in the Wizzard SEC Reports (as defined below),
neither the execution and delivery of any of the Transaction Documents nor the
consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time):
(i) Breach (A) any provision of any of the Governing Documents
of Wizzard, or (B) any resolution adopted by the board of directors of
Wizzard;
(ii) Breach or give any Governmental Body or other Person 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 Wizzard or any of their assets, may be subject;
(iii) contravene, conflict with or result in a violation or breach
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 Wizzard or that otherwise
relates to its assets or its business; or
(iv) breach 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 payment under, or to cancel, terminate or
modify, any Wizzard Contract; or
(c) Except as set forth in the Wizzard SEC Reports (as defined below),
Wizzard is not 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.
4.3 Capitalization.
The authorized capital stock of Wizzard consists of 100,000,000 shares
of Wizzard Common Stock, of which 27,657,190 shares are issued and
outstanding; and 10,000,000 shares of preferred stock, of which there are no
shares outstanding. No other capital stock is authorized or issued. All
issued and outstanding shares of Wizzard Common Stock are duly authorized,
validly issued, fully paid and non-assessable. Except as set forth in the
Wizzard SEC Reports (as defined below), there are no outstanding rights,
subscriptions, warrants, puts, calls, unsatisfied preemptive rights, options
or other agreements of any kind relating to any of the outstanding, authorized
but unissued, unauthorized shares of capital stock or any other security of
Wizzard, and there is no authorized or outstanding security of any kind
convertible into or exchangeable for any such capital stock or other security.
4.4 SEC Reports and Financial Statements. Since January 1, 2001, Wizzard
has filed with the SEC all reports and other filings required to be filed by
Wizzard in accordance with the Securities Act and the Exchange Act and the
rules and regulations promulgated thereunder (the "Wizzard SEC Reports"). As
of their respective dates, the Wizzard SEC Reports complied in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act and the respective rules and regulations promulgated thereunder applicable
to such Wizzard SEC Reports and, except to the extent that information
contained in any Wizzard SEC Report has been revised or superseded by a later
Wizzard SEC Report filed and publicly available prior to the date of this
Agreement, none of the Wizzard SEC Reports contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of Wizzard included in the Wizzard SEC Reports were prepared from
and are in accordance with the accounting books and other financial Records of
Wizzard, were prepared in accordance with GAAP (except, in the case of
unaudited statements, as permitted by the SEC) applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto)
and presented fairly the consolidated financial position of Wizzard and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments). Except
as set forth in the Wizzard SEC Reports, Wizzard has no liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
other than liabilities or obligations incurred in the ordinary course of
business. The Wizzard SEC Reports accurately disclose (i) the terms and
provisions of all stock option plans, (ii) transactions with affiliates, and
(iii) all material contracts required to be disclosed pursuant to Item
601(b)(10) of Regulation S-B promulgated by the SEC.
4.5 Books and Records. The books of account and other financial Records of
Wizzard, all of which have been made available to Interim, are complete and
correct and represent actual, bona fide transactions and have been maintained
in accordance with sound business practices, including the maintenance of an
adequate system of internal controls. The corporate minute books of Wizzard,
all of which have been made available to Interim, contain accurate and
complete Records of all meetings held of the stockholders of Wizzard and by
the board of directors and committees of the board of directors of Wizzard,
and no meeting of the stockholders of Wizzard, the board of directors of
Wizzard, or any committee thereof, has been held for which minutes have not
been prepared or are not contained in such minute books.
4.6 No Undisclosed Liabilities. Except as set forth in the Wizzard SEC
Reports, Wizzard has no Liability except for Liabilities reflected or reserved
against in the balance sheets included in the Wizzard SEC Reports and current
liabilities incurred in the Ordinary Course of Business of Wizzard since the
date of the most recent balance sheet included in the Wizzard SEC Reports.
4.7 No Material Adverse Change. Since the date of the most recent balance
sheet included in the Wizzard SEC Reports, there has not been any material
adverse change in the business or the assets, or the operations, prospects,
results of operations or condition (financial or other) of Wizzard (a "Wizzard
Material Adverse Effect"), and no event has occurred or circumstance exists
that could reasonably be expected to have a Wizzard Material Adverse Effect.
4.8 Legal Proceedings; Orders.
(a) Except as set forth in the Wizzard SEC Reports, there is no
pending or, to Wizzard's Knowledge, threatened Proceeding:
(i) by or against Wizzard or that otherwise relates to or may
affect its business or any of its assets; 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 Wizzard, no event has occurred or circumstance exists that
is reasonably likely to give rise to or serve as a basis for the commencement
of any such Proceeding. Wizzard has delivered to Interim copies of all
pleadings, correspondence and other documents relating to each Proceeding
listed in the Wizzard SEC Reports. There are no Proceedings listed or
required to be listed in the Wizzard SEC Reports that could reasonably be
expected to have a Wizzard Material Adverse Effect.
(b) Except as set forth in the Wizzard SEC Reports:
(i) there is no Order to which Wizzard, its business or any of
its assets is subject; and
(ii) to the Knowledge of Wizzard, no officer, director, agent or
employee of Wizzard 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 its business.
(c) Except as set forth in the Wizzard SEC Reports:
(i) Wizzard has been and is in compliance with all of the terms
and requirements of each Order to which is or has been subject;
(ii) no event has occurred or circumstance exists that is
reasonably likely to 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 Wizzard or any of its assets is
subject; and
(iii) Wizzard has not received 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
Wizzard, its business or any of its assets is subject.
4.9 Absence of Certain Changes and Events. Except as set forth in the
Wizzard SEC Reports, since the date of the most recent balance sheet included
in Wizzard SEC Reports, Wizzard has conducted its business only in the
Ordinary Course of Business and there has not been any:
(a) change in Wizzard's authorized or issued capital stock, grant of
any stock option or right to purchase shares of capital stock of Wizzard or
issuance of any security convertible into such capital stock;
(b) amendment to the Governing Documents of Wizzard;
(c) payment (except in the Ordinary Course of Business) or increase by
Wizzard of any bonuses, salaries or other compensation to any director,
officer or employee or entry into any employment, severance or similar
Contract with any director, officer or employee;
(d) adoption of, amendment to or increase in the payments to, or
benefits under, any "employee benefit plan" (as defined by Section 3(3) of
ERISA);
(e) damage to or destruction or loss of any property or assets used in
the business of Wizzard, whether or not covered by insurance;
(f) entry into, termination of or receipt of notice of termination of
(i) any license, distributorship, dealer, sales representative, joint venture,
credit or similar Contract to which Wizzard is a party, or (ii) any Contract
or transaction involving a total remaining commitment by Wizzard of at least
$10,000;
(g) sale (other than sales of Inventories in the Ordinary Course of
Business), lease or other disposition of any asset or property of Wizzard used
in its business (including the Intellectual Property Assets) or the creation
of any Encumbrance on any asset of Wizzard;
(h) cancellation or waiver of any claims or rights with a value to
Wizzard in excess of $10,000;
(i) indication by any customer or supplier of an intention to
discontinue or change the terms of its relationship with Wizzard;
(j) material change in the accounting methods used by Wizzard; or
(k) Contract by Wizzard to do any of the foregoing.
4.10 Environmental Matters. None of the operations of Wizzard involves the
generation, transportation, treatment, storage or disposal of hazardous waste,
as defined under 40 C.F.R. Parts 260-270 or any state, local or foreign
equivalent.
4.11 Labor Disputes; Compliance. Except as disclosed in the Wizzard SEC
Reports, (i) Wizzard has not been, and is not now, a party to any collective
bargaining agreement or other labor contract; (ii) there is not presently
pending or existing, and to Wizzard's Knowledge there is not threatened, any
strike, slowdown, picketing, work stoppage or employee grievance process
involving Wizzard; (iii) to Wizzard's Knowledge no event has occurred or
circumstance exists that could provide the basis for any work stoppage or
other labor dispute; (iv) there is not pending or, to Wizzard's Knowledge,
threatened against or affecting Wizzard any Proceeding relating to the alleged
violation of any Legal Requirement pertaining to labor relations or employment
matters, including any charge or complaint filed with the National Labor
Relations Board or any comparable Governmental Body, and there is no
organizational activity or other labor dispute against or affecting Wizzard or
the Facilities of Wizzard; (v) no application or petition for an election of
or for certification of a collective bargaining agent is pending; (vi) no
grievance or arbitration Proceeding exists that could reasonably be expected
to have a Wizzard Material Adverse Effect; (vii) there is no lockout of any
employees by Wizzard, and no such action is contemplated by Wizzard; and
(viii) to Wizzard's Knowledge there has been no charge of discrimination filed
against or threatened against Wizzard with the Equal Employment Opportunity
Commission or similar Governmental Body.
4.12 Intellectual Property Assets.
(a) Wizzard owns, or is licensed or otherwise possesses legal
enforceable rights to use all: (i) trademarks and service marks (registered or
unregistered), trade dress, trade names and other names and slogans embodying
business goodwill or indications of origin, all applications or registrations
in any jurisdiction pertaining to the foregoing and all goodwill associated
therewith; (ii) patentable inventions, technology, computer programs and
software (including password unprotected interpretive code or source code,
object code, development documentation, programming tools, drawings,
specifications and data) and all applications and patents in any jurisdiction
pertaining to the foregoing, including re-issues, continuations, divisions,
continuations-in-part, renewals or extensions; (iii) trade secrets, including
confidential and other non-public information (iv) copyrights in writings,
designs, software programs, mask works or other works, applications or
registrations in any jurisdiction for the foregoing and all moral rights
related thereto; (v) databases and all database rights; and (vi) Internet Web
sites, domain names and applications and registrations pertaining thereto
(collectively, "Wizzard Intellectual Property") that are used in Wizzard's
business except for any such failures to own, be licensed or process that
would not be reasonably likely to have a Wizzard Material Adverse Effect.
(b) Except as may be evidenced by patents issued after the date
hereof, there are no conflicts with or infringements of any material Wizzard
Intellectual Property by any third party and the conduct of the businesses as
currently conducted does not conflict with or infringe any proprietary right
of a third party.
(c) The Wizzard SEC Reports sets forth a complete list of all patents,
registrations and applications pertaining to the Wizzard Intellectual Property
owned by Wizzard. Except as set forth on the Wizzard SEC Reports all such
Wizzard Intellectual Property listed is owned by Wizzard, free and clear of
liens or encumbrances of any nature.
(d) The Wizzard SEC Reports set forth a complete list of all material
licenses, sublicenses and other agreements in which Wizzard has granted rights
to any person to use the Wizzard Intellectual Property. Wizzard will not, as
a result of the execution and delivery of this Agreement or the performance of
its obligations under this Agreement, be in breach of any license, sublicense
or other agreement relating to the Wizzard Intellectual Property.
(e) Wizzard owns or has the right to use all software currently used
in and material to its business.
4.13 Brokers or Finders. Except as set forth in the Wizzard SEC Reports,
neither Wizzard nor any of its Representatives have incurred any obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payments in connection with the Contemplated
Transactions.
4.14 Disclosure.
(a) No representation or warranty or other statement made by Wizzard
in this Agreement, the Disclosure Schedules, any supplement to the Disclosure
Schedules, the certificates delivered pursuant to Section 6.3 or otherwise in
connection with the Contemplated Transactions contains any untrue statement or
omits to state a material fact necessary to make any of them, in light of the
circumstances in which it was made, not misleading.
(b) Wizzard does not have any Knowledge of any fact that has specific
application to Wizzard, its business or its assets (other than general
economic or industry conditions) and that could reasonably be expected to have
a Wizzard Material Adverse Affect that has not been set forth in this
Agreement or the Disclosure Schedules.
5. CONDITIONS PRECEDENT TO WIZZARD'S OBLIGATION TO CLOSE.
Wizzard's obligations hereunder are subject to the satisfaction, at or
prior to the Closing, of each of the following conditions (any of which may be
waived by Wizzard, in whole or in part):
5.1 Accuracy of Representations All of the Sellers' representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), shall have been
accurate in all material respects as of the date of this Agreement, and, if
Closing occurs on a date subsequent thereto, shall be accurate in all material
respects as of the time of the Closing as if then made, without giving effect
to any supplement to the Disclosure Schedules.
5.2 The Sellers' Performance. All of the covenants and obligations that the
Sellers are required to perform or to comply with pursuant to this Agreement
at or prior to the Closing (considered collectively), and each of these
covenants and obligations (considered individually), shall have been duly
performed and complied with in all material respects.
5.3 Consents. Each of the Consents identified in Exhibit 5.3 (the "Material
Consents") shall have been obtained and be in full force and effect.
5.4 The Sellers' Closing Documents. The Sellers shall deliver, or cause to
be delivered, to Wizzard:
(a) the Interim corporate minute book and corporate seal;
(b) a stock certificate representing all of the outstanding Interim
Common Stock;
(c) an Employment Agreement, in the form of Exhibit 2.2(c) executed by
Xxxxxx Xxxxxx;
(d) a Lock-Up/Leak-Out Agreement, in the form of Exhibit 2.2(c)executed
by the Sellers;
(e) as Escrow Agreement, in the form Exhibit 2.2(d) executed by the
Sellers;
(e) a certificate signed by each of the Sellers and dated the Closing
Date, stating that the conditions specified in Section 5.1 and Section 5.2have
been fully satisfied;
(f) certificates dated as of a date not earlier than thirty (30) days
immediately preceding the Closing Date as to the good standing of Interim,
executed by the appropriate officials of the State of Wyoming;
(g) the articles of incorporation and all amendments thereto of
Interim, duly certified as of a date not later than the date that is thirty
(30) days immediately preceding the Closing Date, by the Secretary of State of
the jurisdiction of Interim's incorporation; and
(h) such other documents relating to the Contemplated Transactions as
Wizzard may reasonably request that are customary for similar transactions.
5.5 No Conflict. Neither the consummation nor the performance of any of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time), contravene or conflict with or result in a violation of or
cause Wizzard or any Related Person of Wizzard to suffer any material adverse
consequence under (a) any applicable Legal Requirement or Order or (b) any
Legal Requirement or Order that has been published, introduced or otherwise
proposed by or before any Governmental Body, excluding Bulk Sales Laws. The
parties hereby waive compliance with Bulk Sales Laws in connection with the
Contemplated Transactions.
6. CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS TO CLOSE.
The Sellers' obligations hereunder are subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by the Sellers in whole or in part):
6.1 Accuracy of Representations. All of Wizzard's representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), shall have been
accurate in all material respects as of the date of this Agreement and shall
be accurate in all material respects as of the time of the Closing as if then
made.
6.2 Wizzard's Performance. All of the covenants and obligations that
Wizzard is required to perform or to comply with pursuant to this Agreement at
or prior to the Closing (considered collectively), and each of these covenants
and obligations (considered individually), shall have been performed and
complied with in all material respects.
6.3 Wizzard Closing Documents. Wizzard shall have, or shall have cause to
be, delivered to the Sellers or the Escrow Agent under the Escrow Agreement:
(a) the Purchase Price in cash, along with the stock certificates
representing the shares of Wizzard Common Stock that are part of the Purchase
Price;
(b) the Employment Agreement executed by the Interim's new officers;
(c) a certificate signed by the president or chief financial officer
of Wizzard dated the Closing Date, stating that the conditions specified in
Section 6.1 and Section 6.2 have been fully satisfied;
(d) certificates dated as of a date not earlier than thirty (30) days
immediately preceding the Closing Date as to the good standing of Wizzard,
executed by the appropriate officials of the State of Colorado and each
jurisdiction in which Wizzard is licensed or qualified to do business as a
foreign corporation as specified in Schedule 4.1; and
(e) such other documents relating to the Contemplated Transactions as
Interim may reasonably request that are customary for similar transactions.
7. COVENANTS.
7.1 Reports and Returns. The Sellers and Wizzard each shall promptly after
the Closing prepare and file all reports and returns required by any Legal
Requirement relating to the Business as conducted using the Interim Assets, to
and including the Closing, or relating to the Contemplated Transactions.
7.2 Assistance in Proceedings. The Sellers will cooperate with Wizzard and
its counsel in the contest or defense of, and make available its personnel and
provide any testimony and access to its books and Records in connection with,
any Proceeding involving or relating to (a) any Contemplated Transaction or
(b) any action, activity, circumstance, condition, conduct, event, fact,
failure to act, incident, occurrence, plan, practice, situation, status or
transaction on or before the Closing Date involving Interim or the Business.
7.3 Nondisparagement. After the Closing Date, the Sellers shall use their
Best Efforts to not permit any Related Person to, disparage Wizzard or any of
Wizzard's shareholders, directors, officers, employees or agents; and
conversely, after the Closing Date, Wizzard shall us its Best Efforts to not
permit any Related Person to, disparage the Sellers or Interim or any of
Interim's former or current shareholders, directors, officers, employees or
agents
7.4 Customer and Other Business Relationships. After the Closing, the
Sellers will cooperate with Wizzard in its efforts to continue and maintain
for the benefit of Interim those business relationships of Interim existing
prior to the Closing and relating to the business to be operated by Interim
after the Closing, including relationships with lessors, employees, regulatory
authorities, licensors, customers, suppliers and others. The Sellers will
refer to Interim all inquiries relating to the Business. Neither the Sellers
nor any of their respective employees or agents shall take any action that
would tend to diminish the value of the Interim Assets after the Closing or
that would interfere with the business of Interim to be engaged in after the
Closing, including disparaging the name or business of Interim.
7.5 Access to Records. The Sellers shall provide Wizzard and its
Representatives reasonable access to Records of Interim, during normal
business hours and on at least three days' prior written notice, for any
reasonable business purpose specified by Wizzard in such notice. Wizzard
shall provide the Sellers and their representatives, reasonable access to
Records of Interim for purposes of completing and filing any tax returns or
other filings that will be required after Closing, including the preparation
of audited financial statements of Interim.
7.6 No Solicitation. The Sellers shall and shall direct and use reasonable
efforts to cause their respective Representatives to, immediately cease any
discussions or negotiations with any parties that may be ongoing with respect
to an Interim Proposed Transaction (as defined below). They shall, not shall
permit nor authorize or permit any of their Representatives, directly or
indirectly, to knowingly (i) solicit, initiate or encourage (including by way
of furnishing information), or take any other action designed or reasonably
likely to facilitate, any inquiries or the making of any proposal which
constitutes, or may reasonably be expected to lead to, any Proposed
Transaction or (ii) participate in any discussion or negotiations regarding
any Proposed Transaction. The term "Interim Proposed Transaction" means any
inquiry, proposal or offer from any person relating to any form of business
combination involving Interim, or any direct or indirect acquisition or
purchase of all or substantially all of the assets of Interim or 10 percent or
more of any class of equity securities of Interim, any tender offer or
exchange offer that if consummated would result in any person beneficially
owning any shares of any class of equity securities of Interim, any merger,
consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving Interim, other than
the Contemplated Transactions.
7.7 Confidential Information. Prior to the Closing and if, for any reason,
the transactions contemplated by this Agreement are not consummated, both
parties shall return to the other party and neither Wizzard nor the Sellers or
any of their respective Representatives shall disclose to any Third Party or
otherwise use, any confidential information received from the other party in
the course of investigating, negotiating, and performing the transactions
contemplated by this Agreement; provided, however, that nothing shall be
deemed to be confidential information which:
(i) is known to the party receiving the information at the time
of disclosure, unless any individual who knows the
information is under an obligation to keep that information
confidential;
(ii) becomes publicly known or available without the disclosure
thereof by the party receiving the information in violation
of this Agreement; or
(iii) is received by the party receiving the information from a
third party not under an obligation to keep that information
confidential.
This provision shall not prohibit the disclosure of information required to be
made under federal or state securities laws. If any disclosure is so required,
the party making such disclosure shall consult with the other party prior to
making such disclosure, and the parties shall use all reasonable efforts,
acting in good faith, to agree upon a text for such disclosure which is
satisfactory to both parties.
7.8 Further Assurances. The parties shall cooperate reasonably with each
other and with their respective Representatives in connection with any steps
required to be taken as part of their respective obligations under this
Agreement, and shall (a) furnish upon request to each other such further
information; (b) execute and deliver to each other such other documents; and
(c) 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
Contemplated Transactions.
7.9 Rule 144. Wizzard covenants as follows: With a view to making
available to the Interim Common Stockholder the benefits of Rule 144 of the
SEC promulgated under the Securities Act, Wizzard will, for a period of two
years from the Closing Date use commercially reasonable efforts to: (i) make
and keep public information available, as those terms are understood and
defined in Rule 144; (ii) file with the SEC in a timely manner all reports and
other documents required of Wizzard under the Securities Act and the Exchange
Act; and (iii) at the request of any Interim Common Stockholder, provide
written confirmation that Wizzard is current in its reporting obligations
under the Exchange Act.
7.10 Wizzard Common Stock Trading Market. It is understood and agreed by the
parties that the Wizzard Common Stock is presently publicly traded on the OTC
Electronic Bulletin Board of the National Association of Securities Dealers,
Inc. (the "NASD"); and that in the event that Wizzard seeks listing on any
nationally recognized stock exchange or other trading medium like NASDAQ, that
Wizzard will list all shares of Wizzard Common Stock thereon, including all
Wizzard Common Stock issued or issuable under this Agreement.
8. INDEMNIFICATION.
8.1 By Xxxxxx. The Sellers (each an "Indemnifying Party") hereby agree,
severally but not jointly, subject to the terms of this Section 8, to
indemnify, defend and hold Wizzard and Interim (the "Indemnified Party")
harmless from, against and in respect of:
(a) any and all loss, liability or damage suffered or incurred by
Wizzard or Interim by reason of any untrue representation, breach of warranty
or nonfulfillment of any covenant by Interim contained herein or in any
certificate, document or instrument delivered to Interim pursuant hereto or in
connection herewith; and
(b) the Xxxxxx Liabilities.
Notwithstanding anything herein to the contrary, the Seller's indemnity
obligation is limited to 50% of the cash payment portion of the Purchase
Price, provided there is no fraud or deceit on the part of the Sellers in this
respect. Additionally, Seller shall not have any indemnity obligation with
respect to any liability that is or would be covered by insurance carried by
Interim on the date of Closing.
8.2 By Buyer. The Buyer (an "Indemnifying Party") hereby agrees, subject to
the terms of this Section 8, to indemnify, defend and hold Xxxxxx (the
"Indemnified Party") harmless from, against and in respect of:
(a) any and all loss, liability or damage suffered or incurred by
Xxxxxx by reason of any untrue representation, breach of warranty or
nonfulfillment of any covenant by Buyer contained herein or in any
certificate, document or instrument delivered to Xxxxxx pursuant hereto or in
connection herewith; and
(b) the Interim Liabilities other than the Xxxxxx Liabilities.
8.3 Claim Procedures.
If the Indemnified Party determines in good faith that it is entitled to
indemnification pursuant to the terms of Section 8.1 and 8.2 above (an
"Indemnification Event"), then such Indemnified Party may deliver to the
Stockholder Representative a written notice of such possible Indemnification
Event (a "Claim Notice") setting forth (i) a brief description of the
circumstances supporting such Indemnified Party's belief that such possible
Indemnification Event exists or has occurred, and (ii) a non-binding
preliminary estimate of the aggregate dollar amount of all damages that have
arisen and may arise as a direct or indirect result of such possible
Indemnification Event (such aggregate amount being referred to as the "Claim
Amount"). The Indemnifying Party shall have thirty days after receipt of such
notice to undertake, conduct and control, through counsel of its own choosing
and at its expense, the settlement or defense of the Claim, and the
Indemnified Party shall cooperate with it in connection therewith; provided,
that (a) the Indemnifying Party shall permit the Indemnified Party to
participate in such settlement or defense through counsel chosen by the
Indemnified Party, provided that the fees and expenses of such counsel shall
be borne by the Indemnified Party and shall not be reimbursed by the
Indemnifying Party, (b) the Indemnifying Party shall not, without the prior
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld, settle or compromise any Claim or consent to the entry
of any judgment which does not include as an unconditional term thereof the
giving by the claimant or the plaintiff to the Indemnified Party and the
Indemnifying Party a release from all liability in respect of such Claim and
(c) nothing herein shall require any Indemnified Party to consent to the entry
of any order, injunction or consent decreeing its ability to conduct its
business operations after the date thereof. So long as the Indemnifying Party
is reasonably contesting any such Claim in good faith, the Indemnified Party
shall not pay or settle any such claim. If the Indemnifying Party does not
notify the Indemnified Party within thirty days after the receipt of the
Indemnified Party's notice of a Claim that it elects to undertake the defense
of the Claim, the Indemnified Party shall have the right to contest, settle or
compromise the Claim in the exercise of its reasonable judgment at the expense
of the Indemnifying Party. The parties agree to cooperate fully with each
other in connection with the defense, negotiations and settlement of any such
Claim.
8.4 Arbitration. All disputes under this Agreement shall be settled by
arbitration in Casper, Wyoming before a single arbitrator pursuant to the
rules of the American Arbitration Association. Arbitration may be commenced
at any time by any party hereto giving written notice to each other party to a
dispute that such dispute has been referred to arbitration under this Section
8.4. The arbitrator shall be selected by the joint agreement of the
Indemnified Party and Indemnifying Party, but if they do not so agree within
twenty (20) days after the date of the notice referred to above, the selection
shall be made pursuant to the rules from the panels of arbitrators maintained
by such Association. Any award rendered by the arbitrator shall be conclusive
and binding upon the parties hereto; provided, however, that any such award
shall be accompanied by a written opinion of the arbitrator giving the reason
for the award. This provision for arbitration shall be specifically
enforceable by the parties and the decision of the arbitrator in accordance
herewith shall be final and binding and there shall be no right of appeal
therefrom. The arbitrator shall award to the prevailing party, as determined
by the arbitrator, all of its costs and fees. "Costs and Fees" shall mean all
reasonable pre-award expenses of arbitration, including the arbitrator's fees,
travel expenses and attorney's fees.
9. TERMINATION AND ABANDONMENT.
9.1 Termination. This Agreement may be terminated prior to the Closing
Date:
(a) by mutual consent of each party;
(b) by Wizzard, if any representation of the Sellers set forth in this
Agreement was inaccurate when made or becomes inaccurate such that the
condition set forth in Section 5.1 could not be satisfied;
(c) by the Sellers if any representation of Wizzard set forth in this
Agreement was inaccurate when made or becomes inaccurate such that the
condition set forth in Section 6.1 could not be satisfied;
(d) by Wizzard if the Sellers fail to perform or comply with any of
its obligations that it is required to perform or to comply with under this
Agreement such that the conditions set forth in Section 5.2 and Section
5.5could not be satisfied;
(e) by the Sellers if Wizzard fails to perform or comply with any of
the obligations that it is required to perform or to comply with under this
Agreement such that the condition set forth in Section 6.2 could not be
satisfied; or
(g) by either Wizzard on one hand, or the Sellers on the other hand,
if the Closing does not occur on or before September 30, 2005, or such later
date as the parties may mutually agree (unless the failure to effect the
Closing by such date shall be due to the action or failure to act of the party
or parties seeking to terminate this Agreement in breach of such party's or
parties' obligations under this Agreement).
Any party desiring to terminate this Agreement shall give prior written
notice of such termination and the reasons therefor to the other party.
9.2 Effect of Termination. In the event of termination of this Agreement and
the abandonment of the Contemplated Transactions pursuant to this Article 9,
this Agreement (other than Section 7.3 or Section 7.8, and Article 10 hereof)
shall become void and of no effect with no liability on the part of any party
hereto (or of any of its directors, officers, employees, agents, legal or
financial advisors or other representatives); provided, however, that no such
termination shall relieve any party hereto from any liability for any breach
of this Agreement prior to termination. If this Agreement is terminated as
provided herein, each party shall redeliver all documents, work papers and
other material (including any copies thereof) of any other party relating to
the transactions contemplated hereby, whether obtained before or after the
execution hereof, to the party furnishing the same.
10. GENERAL PROVISIONS.
10.1 Expenses. Except as otherwise provided in this Agreement, each party to
this Agreement will bear its respective fees and expenses incurred in
connection with the preparation, negotiation, execution and performance of
this Agreement and the Contemplated Transactions, including all fees and
expense of its Representatives.
10.2 Notices. All notices, Consents, waivers and other communications
required or permitted by this Agreement shall be in writing and shall be
deemed given to a party when (a) delivered to the appropriate address by hand
or by nationally recognized overnight courier service (costs prepaid); (b)
sent by facsimile or e-mail with confirmation of transmission by the
transmitting equipment; or (c) received or rejected by the addressee, if sent
by certified mail, return receipt requested, in each case to the following
addresses, facsimile numbers or e-mail addresses and marked to the attention
of the person (by name or title) designated below (or to such other address,
facsimile number, e-mail address or person as a party may designate by notice
to the other parties):
If to the Sellers:
Xxxxxx Xxxxxx
0000 Xxxxxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to:
J. Xxxxxxx Xxxxx, Esq.
Xxxxx, Xxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
If to Wizzard:
Wizzard Software Corporation
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
President & CEO
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxxxxx, Esq.
Suite 205, 455 East 000 Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Facsimile: (000) 000-0000
10.3 [Intentionally left blank].
10.4 Enforcement of Agreement. Both parties acknowledge and agree that the
other party would be irreparably damaged if any of the provisions of this
Agreement are not performed in accordance with their specific terms and that
any Breach of this Agreement by either party could not be adequately
compensated in all cases by monetary damages alone. Accordingly, in addition
to any other right or remedy to which either party may be entitled, at law or
in equity, it shall be entitled to enforce any provision of this Agreement by
a decree of specific performance and to temporary, preliminary and permanent
injunctive relief to prevent Breaches or threatened Breaches of any of the
provisions of this Agreement, without posting any bond or other undertaking.
10.5 Waiver; Remedies Cumulative. The rights and remedies of the parties to
this Agreement are cumulative and not alternative. Neither any failure nor any
delay by any party in exercising any right, power or privilege under this
Agreement or any of 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 any of 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 that 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.
10.6 Entire Agreement and Modification. This Agreement supersedes all prior
agreements, whether written or oral, between the parties with respect to its
subject matter (including any letter of intent) except the Bilateral Non-
Disclosure Agreement entered into between the parties and constitutes (along
with the Disclosure Schedules, Exhibits and other documents delivered pursuant
to 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, supplemented, or otherwise modified except by a
written agreement executed by the party to be charged with the amendment.
10.7 Disclosure Schedules.
(a) The information in the Disclosure Schedules constitutes (i)
exceptions to particular representations, warranties, covenants and
obligations of the Sellers and Wizzard as set forth in this Agreement or (ii)
descriptions or lists of Assets and Liabilities and other items referred to in
this Agreement. If there is any inconsistency between the statements in this
Agreement and those in the Disclosure Schedules (other than an exception
expressly set forth as such in the Disclosure Schedules with respect to a
specifically identified representation or warranty), the statements in this
Agreement will control.
(b) The statements in the Disclosure Schedules, and those in any
supplement thereto, relate only to the provisions in the Section of this
Agreement to which they expressly relate and not to any other provision in
this Agreement.
10.8 Assignments, Successors and No Third-Party Rights. No party may assign
any of its rights or delegate any of its obligations under this Agreement
without the prior written consent of the other parties. 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, except such rights as shall inure to a
successor or permitted assignee pursuant to this Section 10.8.
10.9 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.
10.10 Construction. The headings of Articles and Sections in this
Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Articles," "Sections" and
"Schedules" refer to the corresponding Articles, Sections and Schedules of
this Agreement and the Disclosure Schedules.
10.11 Time of Essence. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
10.12 Governing Law. This Agreement will be governed by and construed
under the laws of the State of Wyoming without regard to conflicts-of-laws
principles that would require the application of any other law.
10.13 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. The exchange of copies of this Agreement and of
signature pages by facsimile transmission shall constitute effective execution
and delivery of this Agreement as to the parties and may be used in lieu of
the original Agreement for all purposes. Signatures of the parties transmitted
by facsimile shall be deemed to be their original signatures for all purposes.
10.14 Default. In the event of any default hereunder, the prevailing
party in any action in that respect shall be entitled to recover reasonable
attorney's fees and costs incurred.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
WIZZARD SOFTWARE CORPORATION
Dated:September 8, 2005 By/s/Xxxxxxxxxxx X. Xxxxxxx
Xxxxxxxxxxx X. Xxxxxxx, President
THE SELLERS:
THE XXXXXX XXXXXX LIVING TRUST
Dated:September 8, 2005. By/s/Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, Trustee
Dated:September 8, 2005. /s/Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, Individually
INTERIM SCHEDULES
Schedule 3.2(b) Triggered Defaults
1. Interim has certain contractual arrangements as listed on Schedule
3.20(a). Xxxxxx makes no representation as to whether any of the
contracts or arrangements listed in Schedule 3.20(a) will be
subject to cancellation or deemed to be in default as a result of
this Transaction, or whether any approval or consent is required
relative to any of the contracts or arrangements as a result of
this Transaction. However, Xxxxxx is aware that the approval of
Interim Services, Inc. is required.
2. The approval of Interim Services, Inc. is required. The parties
will cooperate in the process of acquiring such approval.
3. Interim has certain contractual arrangements as listed on Schedule
3.20(a). Xxxxxx makes no representation as to whether any of the
contracts or arrangements listed in Schedule 3.20(a) will be
subject to cancellation or deemed to be in default as a result of
this Transaction.
Schedule 3.2(c) Required Consents
Seller is not aware of any required consents other than as disclosed in
Schedule 3.2(b).
Schedule 3.3(a) Outstanding Stock Rights
None
Schedule 3.7 Real Property Interests
None.
Schedule 3.8 Leased Real Property
The Property located at 0000 Xxxx Xxxxx Xxxxxx, Xxxxx X, Xxxxxx, Xxxxxxx is
leased from Xxxxxx Xxxxxx.
Schedule 3.9 Interim Permitted Encumbrances
1. The following assets are subject to leases agreements:
Ikon copier
HomMed Monitors
2. Certain assets are shown on the Interim Balance Sheets for
depreciation purposes, but are no longer actually in the
possession of Interim.
Schedule 3.10 Tangible Personal Property not in Interim's Possession
Certain assets are shown on the Interim Balance Sheets for depreciation
purposes, but are no longer actually in the possession of Interim.
Schedule 3.11 Accounts Receivable Aging
An accounts receivable aging report has already been delivered to Wizzard's
accountant. The parties acknowledge and understand that the actual amount
shown on the Accounts Receivable report do not necessarily reflect the actual
amount that will be paid on the accounts because of certain adjustments or
reductions that are or will be made by the third party payors.
Schedule 3.12 Interim Permitted Encumbrances on Inventory
None.
Schedule 3.13 Undisclosed Liabilities
None.
Schedule 3.14 Tax Extensions and Tax Encumbrances
None.
Schedule 3.16 Interim Employee Plans
SIMPLE XXX for qualified employees
The employer matches Employee contribution up to 3%. The employees are
100% vested at the time of the contribution. The plan is managed by
Wyoming Financial Security. Investments are entirely self directed by
the employees who can invest in a number of funds offered by
Franklin/Xxxxxxxxx. Employees qualify after earning $5000.00 per annum
for 2 consecutive years
Health Insurance Plan
The present carrier is Fortis. The plan is managed by Centennial
Benefits Group. The benefit is available to fulltime (32 hours/week)
employees who have worked for the company at least 90 days. Interim's
current contribution to the premium is $270 per enrolled employee per
month. If the actual premium for coverage is in excess of that amount
the employee pays the additional portion.
Cafeteria plan
This plan is provided through Companion Life and is managed by
Centennial Benefits Group. The benefit is available to employees who
have been employed more than 90 days and who work at least 20 hours per
week. Interim pays $50 per enrolled employee per month toward the
premium. The employees pay any excess premium.
Vacation/Sick Leave/Personal Time Off Policy
After 90 days fulltime employees accrue 4 hours per pay period (every
two weeks). After five years of employment, the employee accrues 5
hours per pay period. The accrued time can be used for any time off the
employee desires, including sick time. There is a maximum accumulation
of 160 hours and maximum of 80 consecutive hours of leave time used.
Health Club Payroll Deductions
At the election of any employee Interim will do a payroll deduction and
pay dues with such deduction to Lifetime Health and Fitness. Interim
does not pay any part of such dues. For employees who participate in
the payroll dues plan, the health club offers a discount on its dues.
Paid holidays (and days the office is closed) include New Year's Day,
Memorial Day, July 4, Labor Day, Thanksgiving, and Christmas.
Schedule 3.16(b) Multiemployer Plans
None.
Schedule 3.16(c) Proceedings Against Employee Plans
None.
Schedule 3.16(f) Accelerated Benefits
None.
Schedule 3.17(a) Legal Requirement Exceptions
Interim believes it is in material compliance with all Legal Requirements.
Wizzard is aware of the dispute with the Office of the Inspector General and
the settlement of such action.
Schedule 3.17(b) Interim Governmental Authorizations
1. Federal taxpayer identification number
_________________________________.
2. Medicare license number
___________________________________________.
3. Medicaid license number
__________________________________________.
4. State of Wyoming Home Health Agency license number
___________________.
5. Interim also has accounts with the State of Wyoming for worker's
compensation and unemployment compensation.
Schedule 3.18(a) Pending or Threatened Legal Proceedings
1. Wizzard is aware of the settlement with the Office of the
Inspector General.
2. There was a disagreement with the Wyoming Worker's Compensation
Xxxxxxx regarding the classification of an Interim employee who is
clerical staff and who runs certain errands. Although Interim
disputes the position of the Wyoming Worker's Compensation
Xxxxxxx, Interim has changed the job duties of the employee so
that she is no longer running the sort of errands that the Wyoming
Worker's Compensation Xxxxxxx claimed changed her classification
as a clerical employee.
Schedule 3.18(b) Orders Affecting Interim
The settlement agreement with the Office of the Inspector General.
Schedule 3.18(c) Compliance with Orders Affecting Interim
None other than as disclosed in Schedules 3.18 (a) and 3.18(b).
Schedule 3.19 Ordinary Course of Business Exceptions
None.
Schedule 3.20(a) Interim Contracts
The parties have agreed to waive the requirement of this Schedule. Interim
has certain contracts and arrangements (both formal and informal) and Wizzard
accepts the Stock subject to whatever the status or nature of such contracts
or arrangements may be.
Schedule 3.20(b) Interim Contracts Assignment Exceptions
Interim has certain contractual arrangements as listed on Schedule 3.20(a).
Xxxxxx makes no representation as to whether any of the contracts or
arrangements listed in Schedule 3.20(a) will be subject to cancellation or
deemed to be in default as a result of this Transaction, or whether any
approval or consent is required relative to any of the contracts or
arrangements as a result of this Transaction. However, Xxxxxx is aware that
the approval of Interim Services, Inc. is required.
Schedule 3.20(c) Interim Contracts Performance Exceptions
Interim has certain contractual arrangements as listed on Schedule 3.20(a).
Xxxxxx makes no representation as to whether any of the contracts or
arrangements listed in Schedule 3.20(a) will be subject to cancellation or
deemed to be in default as a result of this Transaction, or whether any
approval or consent is required relative to any of the contracts or
arrangements as a result of this Transaction. However, Xxxxxx is aware that
the approval of Interim Services, Inc. is required.
Schedule 3.22(a) Interim Employees
Below is a complete and accurate list of the following information for each
employee, director, independent contractor, consultant and agent of Interim,
including each employee on leave of absence or layoff status: job title; date
of hiring or engagement; date of commencement of employment or engagement;
current compensation paid or payable and any change in compensation since
December 31, 2004; sick and vacation leave that is accrued but unused; and
service credited for purposes of vesting and eligibility to participate under
any Employee Plan, or any other employee or director benefit plan:
See the list attached hereto.
Schedule 3.23 Interim Labor Disputes
The Department of Employment has challenged Interim's treatment of certain an
employee for worker's compensation purposes who makes periodic marketing stops
at various medical facilities. Interim disputes the position of the
Department of Employment but has or will reclassify such employee for purposes
of the rates to be paid on worker's compensation premiums for such employee,
or will change the job duties of such employee so that the current
classification is correct.
Schedule 3.24(c) Interim Intellectual Property
1. The name INTERIM HEALTHCARE OF WYOMING, INC. is registered as a
Wyoming corporation with the Wyoming Secretary of State. Such
registration is also effective as a trade name registration in
Wyoming.
2. Interim's right to use the trade name "Interim" is subject to the
terms of its franchise agreement with Interim Services, Inc.
3. Interim has not granted any other party a license, sublicense and
other right to use any of its Intellectual Property.
Schedule 3.26 Known Product Defects
None.
Schedule 3.27 Related Party Transactions
The Property located at 0000 Xxxx Xxxxx Xxxxxx, Xxxxx X, Xxxxxx, Xxxxxxx is
leased from Xxxxxx Xxxxxx.
Schedule 3.28 Broker and Finder Fee Obligations
The Seller engaged the services of Compass Advisors to assist in the sale of
the Business. Xxxxxx will be responsible for any compensation or commission
due to such company.
WIZZARD SCHEDULES & EXHIBITS
Schedule 4.1(a)
Pennsylvania, Florida, Colorado
Schedule 4.1(b)
MedivoxRx Technologies, Inc is a subsidiary of Wizzard Software Corporation
Exhibit 2.1(d)
Xxxxx Xxxxxxx
Xxxxx Xxxxxxxx
Xxxxxx Xxxxx
Xxxx Xxxxxxx
Exhibit 2.1(e)
Xxxxx Xxxxxxx
Xxxxx Xxxxxxxx
Xxxxxx Xxxxx
Exhibit 2.2(c)
Lock-up/Leak-out Agreement
LOCK-UP/LEAK-OUT AGREEMENT
THIS LOCK-UP/LEAK-OUT AGREEMENT (the "Agreement") is made and
entered into as of the 8th day of September, 2005, between Wizzard Software
Corporation, a Colorado corporation ("Wizzard"); and the Xxxxxx Xxxxxx Living
Trust (the "Trust") and Xxxxxx Xxxxxx ("Xxxxxx"), the Trustee and sole
beneficiary of the Trust, collectively, the "Shareholder" herein.
WHEREAS, the Trust of which Xxxxxx is the Trustee and the sole
beneficiary is the owner of all of the outstanding securities of Interim
HealthCare of Wyoming, Inc., a Wyoming corporation ("Interim"); and
WHEREAS, Wizzard, the Trust and Xxxxxx executed and delivered a
Stock Purchase Agreement of even date (the "Stock Purchase Agreement"),
whereby Wizzard agreed to purchase and the Trust and Xxxxxx agreed to sell all
of the outstanding securities of Interim; and
WHEREAS, all capitalized terms not defined herein shall have the
meanings ascribed to them in the Stock Purchase Agreement; and
WHEREAS, in order to facilitate the consummation of the
transactions contemplated by the Stock Purchase Agreement and to provide for
an orderly market for the Wizzard Common Stock subsequent to the Closing of
the Stock Purchase Agreement, the Trust and Xxxxxx have agreed to enter into
this Agreement and to restrict the sale, assignment, transfer, conveyance,
hypothecation or alienation of such Wizzard Common Stock, all on the terms set
forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Notwithstanding anything contained in this Agreement, a
Shareholder may transfer her/its shares of Wizzard Common Stock to her/its
affiliates, partners in a partnership, subsidiaries and trusts, or spouses and
lineal descendants for estate planning purposes, provided that the transferee
(or the legal representative of the transferee) executes an agreement to be
bound by all of the terms and conditions of this Agreement in connection with
the resale of the Wizzard Common Stock acquired.
2. Except as otherwise expressly provided herein, and except as
such Shareholder may be otherwise restricted from selling shares of Wizzard
Common Stock under applicable United States or state securities laws, rules
and regulations, the Shareholder may only sell Wizzard Common Stock subject to
the following conditions for the twenty-four (24) month period from the
Closing of the Stock Purchase Agreement respecting the Wizzard Common Stock
issued at Closing as partial payment of the Purchase Price of the Interim
Common Stock, or the twenty-four (24) month period from the receipt of Phase I
or Phase II Incentive payments respecting the Wizzard Common Stock, if any,
issued and earned as additional payments of the Purchase Price of the Interim
Common Stock under the Stock Purchase Agreement (the "Lock-Up/ Leak Out
Period"):
2.1 The Shareholder shall not be entitled to sell any Wizzard Common
Stock for a period of twelve (12) months from Closing of the Share
Purchase Agreement or any of the Phase I or II Incentive payment
Wizzard Common Stock for a period of twelve (12) months from when
any such Wizzard Common Stock is earned (the "Lock-Up Periods").
2.2 The Shareholder may only sell Wizzard Common Stock subject to the
following conditions for the twelve (12) month period following
the expiration of the applicable Lock-Up Periods (the "Leak-Out
Periods"):
2.2(a) The Shareholder shall be allowed to sell 1/12th of the
Shareholder's shares of Wizzard Common Stock per month
during the respective Leak-Out Periods, computed on the
basis of the total shares of Wizzard Common Stock of the
Shareholder that can be sold at the applicable time under
the applicable Leak-Out Periods, on a non-cumulative basis,
meaning that if no Wizzard Common Stock was sold during a
month while Wizzard Common Stock was qualified to be sold,
those unsold shares could not be sold in the next successive
month; and like wise, if part of the Wizzard Common Stock
that could be sold during any monthly period was sold, the
Shareholder may not cumulate the unsold portion of that
month's allotment to the next month and so forth. The
Shareholder agrees that all sales will be made at no less
than the best "asked" prices, and no sales will be made at
the "bid" prices for the Wizzard Common Stock.
2.2(b) Except as otherwise provided herein, all Wizzard
Common Stock shall be sold in "broker's transactions" and
the Shareholder will comply with the "manner of sale"
requirements as those terms are defined in Rule 144 of the
Securities and Exchange Commission during the Leak-Out
Period.
2.2(c) An appropriate legend describing this Agreement shall
be imprinted on each stock certificate representing Wizzard
Common Stock covered hereby, and the transfer records of
Wizzard's transfer agent shall reflect such appropriately
restrictions.
2.3 The Shareholder agrees that she/it will not engage in any short
selling of the Wizzard Common Stock during the applicable Lock-
Up/Leak-Out Periods.
2.4 During the applicable Lock-Up/Leak-Out Periods, Wizzard shall
maintain its "reporting" status with the Securities and Exchange
Commission; file all reports that are required to be filed by it
during such period; and use its "best efforts" to ensure that the
Wizzard Common Stock is continually quoted for public trading on a
nationally recognized medium of no less significance than the OTC
Electronic Bulletin Board of the National Association of
Securities Dealers, Inc. (the "NASD"), the NASDAQ Small Cap or a
recognized national stock exchange.
2.5 With respect to any additional Wizzard Common Stock that may be
issued to the Shareholder for Phase I or Phase II Incentives under
the Stock Purchase Agreement, the applicable Lock-Up/Leak-Out
Periods shall commence on the date that such Wizzard Common Stock
is earned, for all purposes of computing when the applicable Lock-
Up Periods and the applicable Leak-Out Periods shall commence with
respect to any such Wizzard Common Stock.
3. Notwithstanding anything to the contrary set forth herein,
Wizzard may, in its sole discretion, at any time and from time to time, waive
any of the conditions or restrictions contained herein to increase the
liquidity of the Wizzard Common Stock or if such waiver would otherwise be in
the best interests of the development of the trading market for the Common
Stock.
4. In the event of: (a) a completed tender offer to purchase
all or substantially all of Wizzard's issued and outstanding securities; or
(b) a merger, consolidation or other reorganization of Wizzard with or into an
unaffiliated entity that results in a change in control of Wizzard, then this
Agreement shall terminate as of the closing of such event and the Wizzard
Common Stock restricted pursuant hereto shall be released from such
restrictions.
5. Except as otherwise provided in this Agreement or any other
agreements between the parties, the Shareholder shall be entitled to her/its
respective beneficial rights of ownership of the Wizzard Common Stock,
including the right to vote the Wizzard Common Stock for any and all purposes.
6. The number of shares of Wizzard Common Stock included in any
monthly allotment that can be sold by a Shareholder and the per share price
restrictions covered by this Agreement shall be appropriately adjusted should
Wizzard declare a dividend or distribution, undergo a forward split or a
reverse split or otherwise reclassify its shares of Wizzard Common Stock.
7. This Agreement may be executed in any number of counterparts
with the same force and effect as if all parties had executed the same
document.
8. All notices, instructions or other communications required
or permitted to be given pursuant to this Agreement shall be given in writing
and delivered by certified mail, return receipt requested, overnight delivery
or hand-delivered to all parties to this Agreement, to Wizzard, at 0000 Xxxx
Xxxx. Xxxxx 000, Xxxxxxxxxx, XX 00000; and to the Shareholder, at the address
below. All notices shall be deemed to be given on the same day if delivered
by hand or on the following business day if sent by overnight delivery or the
second business day following the date of mailing.
9. The resale restrictions on the Wizzard Common Stock set
forth in this Agreement shall be in addition to all other restrictions on
transfer imposed by applicable United States and state securities laws, rules
and regulations.
10. If Wizzard or the Shareholder fail to fully adhere to the
terms and conditions of this Agreement, such party shall be liable to the
other party for any damages suffered by reason of any such breach of the terms
and conditions hereof. The Shareholder agrees that in the event of a breach
of any of the terms and conditions of this Agreement by the Shareholder, that
in addition to all other remedies that may be available in law or in equity to
Wizzard, a preliminary and permanent injunction, without bond or surety, and
an order of a court requiring the Shareholder to cease and desist from
violating the terms and conditions of this Agreement and specifically
requiring the Shareholder to perform her/its obligations hereunder is fair and
reasonable by reason of the inability of the parties to this Agreement to
presently determine the type, extent or amount of damages that Wizzard may
suffer as a result of any breach or continuation thereof.
11. This Agreement sets forth the entire understanding of the
parties hereto with respect to the subject matter hereof, and may not be
amended except by a written instrument executed by the parties hereto.
12. This Agreement shall be governed by and construed in
accordance with the laws of the State of Pennsylvania applicable to contracts
entered into and to be performed wholly within said State; and Wizzard and the
Shareholder agree that any action based upon this Agreement may be brought in
the United States and state courts of Wyoming only (unless Shareholder
consents otherwise), and each submits herself/itself to the jurisdiction of
such courts for all purposes hereunder.
13. In the event of default hereunder, the non-defaulting
parties shall be entitled to recover reasonable attorney's fees incurred in
the enforcement of this Agreement.
IN WITNESS WHEREOF, the undersigned have duly executed and
delivered this Agreement as of the day and year first above written.
WIZZARD SOFTWARE CORPORATION
Date: September 8, 2005. By/s/Xxxxxxxxxxx Xxxxxxx
Its President
THE XXXXXX XXXXXX LIVING TRUST
Date: September 8, 2005. By/s/Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, Trustee
XXXXXX XXXXXX
Date: September 8, 2005. By/s/Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
(Printed Name)
/s/Xxxxxx Xxxxxx
(Signature)
_____________________________________
(Xxxxxx Xxxxxxx)
_____________________________________
(City and State)
Exhibit 2.2(c)
Employment Agreement
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this 8th day of September, 2005, between
Interim HealthCare of Wyoming, Inc., a Wyoming corporation having a place of
business at 0000 Xxxx Xxxxx Xxxxxx, Xxxxxx, XX 00000 (the "Employer"), and
Xxxxxx Xxxxxx, an individual residing at 0000 Xxxxxxxxx, Xxxxxx, XX 00000 (the
Employee).
WHEREAS, the Employee desires to be employed by the Employer, and
Employer desires to hire the Employee, upon the terms contained in this
Agreement, while compromising, canceling and settling all prior employment
arrangements with the Employer.
NOW, THEREFORE, it is agreed as follows:
1. Employment
The Employer hereby employs the Employee; and the Employee hereby
accepts employment upon the terms contained in this Agreement.
2. Term
The term of this Agreement will commence on Closing of the Stock
Purchase Agreement of even date between the Employer and, among others, the
Employee (the "Stock Purchase Agreement"), and will continue in effect for a
minimum period of two (2) years or until terminated pursuant to this
Agreement. Unless otherwise defined herein, capitalized terms shall have the
meanings attributed to them in the Stock Purchase Agreement.
3. Duties
The Employee shall manage all day to day operations related to the
Employer's home healthcare business in Casper, Wyoming and will provide
counsel and direction regarding Employer's Parent's (Wizzard Software
Corporation, a Colorado corporation) expansion into the home healthcare
industry, for a minimum of two (2) years; and to provide reasonable
consultation in Casper, Wyoming from time to time for a minimum of three (3)
years beyond the first two years, on a no-fee basis, not to exceed eight (8)
hours per month at reasonable times.
4. Compensation
As compensation for all services rendered by the Employee under
this Agreement, the Employer will pay the Employee an annual salary of Ninety
Thousand Dollars ($90,000) during the initial two (2) year term of this
Agreement. The Employee commits to work 40 hours per week in exchange for the
compensation. The Employee may allocate such 40 hours over the seven days of
the week in what ever manner the Employee desires, so long as the Employee is
completing the required work; however, the Employee will, in general, try to
be present during the normal Monday through Friday work week of other
employees of Interim.
5. Vacations
Employee has 160 hours of accumulated vacation time, which is the
most unused vacation time the Employee can accrue. As the Employee uses the
accrued vacation time, she will begin accruing additional vacation time at the
rate of five (5) hours per pay period (with a pay period being every two
weeks). Any unused vacation time will be paid to the Employee on termination
of employment.
6. Benefits
The Employer shall pay the following expenses and provide the
following benefits to the Employee:
a. all fees for all licenses needed by the Employee to perform
nursing and related services for the Employer;
b. pay the reasonable expenses related to the employee's
continuing education requirements;
c. pay for the annual independent audit required under the
settlement agreement with the Office of the Inspector General (the Employer
may deduct up to $10,000 of the amount actually paid for such audit from the
Employee's annual salary);
d. continuation of the current health insurance plan or a
company wide health plan of comparable benefits; and
e. continuation of the current simple XXX plan.
7. Non-Disclosure
Xxxxxx shall keep confidential all information of any type or
nature whatsoever and without qualification regarding Interim, its employees,
customers, customer lists, contractual agencies, accounts receivable and
payable, the present and intended business operations or prospects of Interim
or any other type of information whatsoever in relation thereto or to Interim
or Wizzard, regardless for a period of five (5) years from the expiration of
this Agreement.
8. Expenses
The Employee is authorized to incur reasonable expenses in
promoting the business of the Employer, including expenses for entertainment,
travel and similar items. The Employer will reimburse the Employee for all
such expenses upon presentation by the Employee, from time to time, of an
itemized account of such expenditures. Notwithstanding the foregoing, the
Employee will get pre-approval for the cost of travel.
9. Restrictive Covenant
For a period of five (5) years after the termination or expiration
of this Agreement, and during the term hereof, within the area consisting of
Wyoming, the Employee will not, directly or indirectly, either as an
individual, partner, employee, agent, salesman, officer, director,
shareholder, lender, or otherwise, own, manage, operate, control, be employed
by, participate in, or be connected in any way with the ownership, management,
operation or control of any business that is engaged in providing home health
care and health care staffing. However, nothing herein shall be deemed to
prevent or limit the right of the Employee to invest in the stock or other
securities of any corporation whose stock or securities are publicly owned and
regularly traded on any public exchange. The parties intend this Agreement to
be enforced as written. However, in the event that any provision of this
paragraph 8 is held to be unenforceable because of the duration of such
provision or the geographic area covered thereby, the court making such
determination shall have the power to reduce the duration and/or geographic
area of such provision, and/or to delete specific words and phrases, and in
its reduced form such provision shall then be enforceable and shall be
enforced. This paragraph will survive and continue in full force
notwithstanding any termination of the Employee's employment.
10. Termination and Effects of Termination
This Agreement and the Employee's employment may be terminated in
any of the following ways:
a. Termination Upon Death or Disability. This Agreement shall
automatically terminate upon the death of the Employee. In the event of the
Disability (as defined below) of the Employee, the Employer shall have the
right to terminate this Agreement upon giving the Employee thirty (30) days
advance written notice. For purposes of this Agreement, the term Disability
means any physical or mental disability or incapacity that renders or is
expected to render the Employee incapable of performing the essential
functions required of the Employee in accordance with the obligation under
Section 3 hereof for a period of eighteen (18) consecutive weeks or for
shorter periods aggregating to eighteen (18) consecutive weeks during any
twelve (12) consecutive months.
b. Termination by Employer. The Employer may terminate this
Agreement at any time without cause in its sole discretion, and without
further liability except for accrued salaries, and subject to Paragraph 10(f)
below.
c. Termination by Employer for Cause. The Employer may
terminate this Agreement for Cause (as defined below). For purposes of this
Agreement, the Employer shall have Cause to terminate this Agreement (i) if
the Employee commits any act or omission that represents a breach in any
material respect of the terms of this Agreement; or (ii) or for any act of
deceit, dishonesty or fraud or similar conduct by the Employee.
d. Notice and Opportunity to Cure. Notwithstanding the
foregoing, as a condition precedent to the Employer's right to terminate this
Agreement pursuant to paragraphs 10(c) (i), the Employer shall provide the
Employee with written notice stating with specificity the reason for the
termination (Failure or Breach), and provide the Employee with seven (7) days
to effectively cure the Failure or Breach.
e. Termination by Employee. The Employee, upon thirty (30)
days advance written notice to the Employer, may terminate this Agreement for
any reason.
f. Effects of Termination.
(i) If the Employee leaves the employment of the Employer during
the first year of this Agreement for any reason except termination without
Cause, Disability, death or crippling illness; Employee shall suffer as
liquidated damages (and not as a penalty) the amount of:
(1) Cancellation of the Purchase Price payment for Wizzard Common
Stock under the Stock Purchase Agreement, with such Wizzard Common Stock to be
returned to Wizzard for cancellation; and
(2) Cancellation of Phase I Incentives under the Stock Purchase
Agreement; and
(3) Cancellation of Phase II Incentives under the Stock Purchase
Agreement.
(ii) If the Employee leaves the employment of the Employer during the
second year of the Agreement for any reason except termination without Cause,
Disability, death or crippling illness, Employee shall suffer as liquidated
damages (and not as a penalty) the amount of:
(1) Cancellation of 50% of the Purchase Price payment for
Wizzard Common Stock under the Stock Purchase Agreement; and
(2) Cancellation of any unearned Phase I and Phase II Incentives
under the Stock Purchase Agreement.
(iii) If the Employee leaves the Employment of the Employer anytime
within the first two years of the Agreement for any reason except termination
without Cause, Disability, death or crippling illness, Employee shall suffer
liquidated damages in the amount of cancellation of any Phase I or Phase II
Incentive payments not then earned. No Phase I or Phase II Incentive payments
will be deemed to have been earned for any year in which this Agreement was
terminated prior to the end of any such year of this Agreement. For example,
if this Agreement was terminated in fourteen (14) months, the Employee would
have earned the Phase I Incentive payment, if any were due under the Stock
Purchase Agreement, for the first year of this Agreement; however, the Phase
II Incentive payment for the second year of this Agreement would be deemed to
not have been earned.
(iv) If the Employer terminates the Employment of Employee at anytime
within the first two years of this Agreement for any reason except termination
with Cause, Disability, or death, the Employer shall continue to pay the
salary due to the employee under this Agreement for the remainder of the two
years.
11. Injunctive Relief
A breach or threatened breach of the provisions of paragraph 8 of
this Agreement in any respect will be material and will result in substantial
and irreparable injury to the Employer and/or any third party beneficiary of
this Agreement. In the event of a breach or threatened breach by the
Employee, the Employer and/or any third party beneficiary will be entitled to
an injunction restraining the Employee therefrom. This provision shall not be
construed as prohibiting the Employer and/or any third party beneficiary from
pursuing any other available remedies for such breach or threatened breach,
including the recovery of damages from the Employee.
12. Failure of Performance
If either party fails in the due performance of any of her or its
obligations under the terms of this Agreement, the other and/or any third
party beneficiary of this Agreement will have the right at her or its election
to xxx for damages for such breach and to seek such legal and equitable
remedies as may be available to the aggrieved party, including the right to
recover all reasonable expenses, which shall include reasonable attorneys'
fees and interest on any money due under the terms of this Agreement at a rate
of 10% per annum or the judgment rate of interest, whichever is greater,
incurred: (a) to xxx for damages; (b) to seek such other legal and equitable
remedies; and (c) to collect any damages and enforce any court order or
settlement agreement including, but not limited to, additional application to
the court for an order of contempt. Nothing herein contained shall be
construed to restrict or impair the rights of either party and/or any third
party beneficiary from exercising this election. All rights and remedies
herein provided or existing at law or in equity will be cumulative of each
other and may be enforced concurrently therewith or from time to time.
13. Miscellaneous
The following provisions shall apply to this Agreement:
a. The paragraph headings contained in this Agreement have been
prepared for convenience of reference only and shall not control, affect the
meaning, or be taken as an interpretation of any provision of this Agreement.
b. Several copies of this Agreement may be executed by the
parties, each of which shall be deemed an original for all purposes, and all
of which together shall constitute but one and the same instrument. Facsimile
signatures will be deemed to be original signatures.
c. In the event any term or condition of this Agreement should
be breached by either party and thereafter waived by the other party, then
such waiver shall be limited to the particular breach so waived and shall not
be deemed to waive any other breach either prior or subsequent to the breach
so waived.
d. If the consent of either party is required for whatever
reason under the terms of this Agreement, such consent shall not be
unreasonably withheld.
e. Wherever necessary or appropriate, the masculine gender
whenever used shall include the feminine, and the feminine shall include the
masculine; the neuter shall include both masculine and feminine; the singular
shall include the plural, and the plural shall include the singular.
14. Notices
Any notice or other communication which may be given or which is
required to be given under the terms of this Agreement shall be in writing and
shall be delivered personally, or sent by registered mail, or certified mail
return receipt requested to the post office address of the party as set forth
on the first page hereof. Any notice which is mailed shall be deemed to have
been given on the third business day after the day of mailing (not counting
the day mailed), irrespective of the date of receipt. Notices may be signed
by attorneys for the party sending the notice.
15. Applicable Law; Jurisdiction; Venue
This Agreement will be governed by and construed in accordance
with the laws of the State of Wyoming without regard to its principles of
conflicts of law.
16. Binding Effect
This Agreement and the transactions and other instruments provided
for herein will be binding upon and inure to the benefit of the parties, their
heirs, distributees, legal representatives, transferees, successors and
assigns. This Agreement cannot be assigned by the Employee, without the
express written consent of the Employer.
17. Severability
Every provision of this Agreement is intended to be severable. If
any provision is held to be invalid or unenforceable by law or by a court of
competent jurisdiction, all other provisions shall nevertheless continue in
full force and effect. In lieu of such invalid or unenforceable provision,
there shall be added to this Agreement a legal, valid and enforceable
provision as similar in terms to such invalid or unenforceable provision as
may be possible.
18. Construction
All understandings and agreements made by and between the parties
are merged in this Agreement, which alone fully and completely expresses their
agreement. This Agreement may not be changed, terminated, nor any of its
provisions modified or waived, except in writing signed by all parties to this
Agreement.
19. Keyman Insurance.
If the Employer desires to get keyman insurance on the life of the
Employee, the Employee will cooperate in such efforts and will agree to submit
to reasonable medical tests reasonably required to obtain such insurance.
IN WITNESS WHEREOF, we have signed this Employment Agreement.
EMPLOYER:
Interim HealthCare of Wyoming, Inc.
Date:September 8, 2005 . By________________________
Its________________________
EMPLOYEE:
Date:September 8, 2005. /s/Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
