Exhibit 10.1

SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT is made by and between VR HOLDINGS, INC., a Delaware
corporation (“VR Holdings”), LITIGATION DYNAMICS, INC. a Texas corporation
(“LDI”), J. MICHAEL MOORE (“Moore”), ZANE RUSSELL (“Russell”), CAPNET SECURITIES
CORPORATION, a Texas corporation (“CapNet”), JOHN E. BAKER (“Baker”), DEOHGE
CORP., a Maryland corporation (“Deohge”), PAMELA LAPIDES (“Lapides”), THE CANCER
FOUNDATION, INC., a Maryland corporation (“The Cancer Foundation”), JOHN FOSTER
WOODS, (“Woods”), and BARRY L. DAHNE (“Dahne”), each of whom is sometimes
referred to herein individually as a “Party,” and collectively as the “Parties.”
 Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to such terms in Paragraph 1, below.  The Parties hereby agree as
follows:

WHEREAS, LDI is a wholly-owned subsidiary of VR Holdings; and

WHEREAS, LDI merged (the “Merger”) with and into VRH Merger Sub, Inc., a Texas
corporation, a wholly-owned subsidiary of VR Holdings, pursuant to a Plan and
Agreement of Triangular Merger dated November 21, 2011 (the “Plan of Merger”);
and

WHEREAS, the Merger closed on January 20, 2012; and

WHEREAS, as a result of the Merger, VRH Merger Sub, Inc. changed its corporate
name to “Litigation Dynamics, Inc.”; and

WHEREAS, on October 24, 2011, VR Holdings and CapNet executed a Letter Agreement
(the “CapNet Financing Agreement”), whereby CapNet was to attempt to raise the
necessary financing for the legal and accounting advisory fees for the
completion of the Merger and the subsequent reporting requirements for VR
Holdings as required by the Securities Exchange Act of 1934, as amended
(“Exchange Act”), as well as the funding of VR Holdings’ litigation expenses and
ongoing expenses, as needed; and

WHEREAS, as a result of the Merger, Moore and Russell were both elected as
directors of VR Holdings; and

WHEREAS, as a result of the Merger, Baker was elected as a director of LDI; and

WHEREAS, the Board of Directors of VR Holdings has determined that it would be
appropriate and in the best interests of VR Holdings and its stockholders for VR
Holdings to separate the LDI Business from the VR Holdings Business (the
“Sepration”); and

WHEREAS, in furtherance thereof, the Board of Directors of VR Holdings has
determined that, following the Separation, it would be appropriate and in the
best interests of VR Holdings and its stockholders for VR Holdings to distribute
(the “Distribution”) on the basis identifed in this Agreement to the holders of
outstanding shares of common stock of VR Holdings, $0.000001 par value per share
(the “VR Holdings Common Stock”) all of the outstanding shares of common stock,
par value $0.01 per share, of LDI (the “LDI Common Stock”) owned by VR Holdings
as of the Distribution Date immediately before the Distribution Time; and

WHEREAS, for U.S. federal income tax purposes, (i) certain transactions to be
effected in connection with the Separation are intended to qualify as
reorganizations under Sections 355 and/or 368 or as complete liquidations under
Section 332(a) of the U.S. Internal Revenue Code of 1986 (the “Code”) and (ii)
the Distribution is intended to qualify as a transaction under Section 355 of
the Code; and

WHEREAS, the Parties intend in this Agreement, including the Attachments,
Schedules, and Exhibits hereto, to set forth the principal arrangements between
them regarding the Separation and the Distribution;

NOW, THEREFORE, in consideration of the foregoing and the following mutual
covenants and agreements, the Parties agree as follows:

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1.

Definitions.  As used in this Agreement, the following terms shall have the
meanings:

“Action” means any demand, claim, action, suit, countersuit, arbitration,
litigation, inquiry, proceeding or investigation by or before any Governmental
Authority or any arbitration or mediation tribunal or authority.

“Affiliate” means, with respect to any specified Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the specified Person.  For this
purpose “control” of a Person means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of such
Person, whether through ownership of voting securities, by contract or
otherwise.

“Ancillary Agreements” has the meaning set forth in Paragraph 2(e).

“Asset” means all rights, properties or assets, whether real, personal or mixed,
tangible or intangible, of any kind, nature and description, whether accrued,
contingent or otherwise, and wheresoever situated and whether or not carried or
reflected, or required to be carried or reflected, on the books of any Person.

“Distribution” has the meaning set forth in the recitals to this Agreement.

“Distribution Agent” means Island Stock Transfer.

“Distribution Date” means the date on which the Distribution occurs, such date
to be determined by, or under the authority of, the Board of Directors of VR
Holdings in its sole and absolute discretion.

“Distribution Multiple” means 100 for one, the number determined by the VR
Holdings Board of Directors in its sole discretion at the time of its approval
of the Distribution as the number of shares of the LDI Common Stock to be
distributed in respect of each share of the VR Holdings Common Stock, which
number will be multiplied by the number of shares of the VR Holdings Common
Stock outstanding on the Record Date to determine the number of shares of the
LDI Common Stock to be issued and outstanding immediately before the
Distribution Time.

“Distribution Time” means the time at which the Distribution is effective on the
Distribution Date.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Governmental Authority” shall mean any U.S. federal, state, local or non-U.S.
court, government, department, commission, board, bureau, agency, official or
other regulatory, administrative or governmental authority.

“Indebtedness” of any specified Person means (a) all obligations of such
specified Person for borrowed money or arising out of any extension of credit to
or for the account of such specified Person (including reimbursement or payment
obligations with respect to surety bonds, letters of credit, bankers’
acceptances and similar instruments), (b) all obligations of such specified
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such specified Person upon which interest charges are customarily
paid, (d) all obligations of such specified Person under conditional sale or
other title retention agreements relating to Assets purchased by such specified
Person, (e) all obligations of such specified Person issued or assumed as the
deferred purchase price of property or services, (f) all liabilities secured by
(or for which any Person to which any such liability is owed has an existing
right, contingent or otherwise, to be secured by) any mortgage, lien, pledge or
other encumbrance on property owned or acquired by such specified Person (or
upon any revenues, income or profits of such specified Person therefrom),
whether or not the obligations secured thereby have been assumed by the
specified Person or otherwise become liabilities of the specified Person, (g)
all capital lease obligations of such specified Person, (h) all securities or
other similar instruments convertible or exchangeable into any of the foregoing,
but excluding daily cash overdrafts associated with routine cash operations, and
(i) any liability of others of a type described in any of the preceding clauses
(a) through (g) in respect of which the specified Person has incurred, assumed
or acquired a liability by means of a guaranty.

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“Information Statement” means the information statement and any related
documentation prpeared pursuant to Schedule 14C of the Exchange Act to be
provided to the holders of the shares of the VR Holdings Common Stock in
connection with the Distribution, including any amendments or supplements
thereto.

“Law” means any law, statute, ordinance, code, rule, regulation, order, writ,
proclamation, judgment, injunction or decree of any Governmental Authority.

“LDI Business” means the business and operations conducted by LDI as of the
Distribution Date, as such business and operations are described in the
Information Statement.

“LDI Common Stock” has the meaning set forth in the recitals to this Agreement.

“LDI Parties” means LDI, Moore, Russell, and CapNet.

“Liabilities” shall mean any and all Indebtedness, liabilities and obligations,
whether accrued, fixed or contingent, mature or inchoate, known or unknown,
reflected on a balance sheet or otherwise, including those arising under any
Law, Action, or any judgment of any court of any kind or any award of any
arbitrator of any kind, and those arising under any contract.

“Party” has the meaning set forth in the preamble to this Agreement.

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, a
union, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.

“Record Date” means the close of business on the date to be determined by the
Board of Directors of VR Holdings as the record date for determining
stockholders of VR Holdings entitled to receive shares of the LDI Common Stock
on the Distribution Date pursuant to Paragraph 3(a) of this Agreement.

“Registration Statement” means the registration statement of LDI on Form S-1
promulgated by the SEC with respect to the registration under the Securities Act
of the shares of the LDI Common Stock to de distributed hereunder, including any
amendments or supplements thereto.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Separation” means:

(a)

The assumption by LDI of any LDI Liabilities that were incurred by, or as to
which there exists any obligation of VR Holdings; and

(b)

The assumption by VR Holdings of any VR Holdings Liabilities that were incurred
by, or as to which there exists any obligation of LDI.

(c)

The issuance by LDI to VR Holdings of a number of shares of the LDI Common Stock
such that the number of shares of the LDI Common Stock issued and outstanding
immediately before the Distribution Time will equal the product of (i) the
Distribution Multiple, and (ii) the number of shares of the VR Holdings Common
Stock outstanding as of the Record Date, which shares of the LDI Common Stock
owned by VR Holdings will constitute all of the issued and outstanding shares of
the LDI Common Stock.

The transactions contemplated by the Separation will be accomplished in part as
provided herein.

“VR Holdings Business” means any business of VR Holdings other than the LDI
Business.

“VR Holdings Common Stock” has the meaning set forth in the recitals to this
Agreement.

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“VR Holdings Liabilities” means all Liabilities of VR Holdings, whether arising
prior to, on or after the Distribution Date, other than the LDI Liabilities.
 For the avoidance of doubt, the designation in this Agreement of Liabilities as
LDI Liabilities or VR Holdings Liabilities is only for purposes of allocating
responsibility for such Liabilities as between the Parties and shall not affect
any obligations to, or give rise to any rights of, any third Parties.

“VR Holdings Parties” means VR Holdings, Baker, Deohge, Lapides, The Cancer
Foundation, Woods, and Dahne.

2.

The Separation.

(a)

Subject to the satisfaction or waiver in accordance with the provisions of
Paragraph 3(c), each of VR Holdings and LDI will use commercially reasonable
efforts to take, or cause to be taken, any actions, including the assumption of
Liabilities, necessary to effect the Separation on or prior to the Distribution
Date.  As of and after the Distribution Time, LDI shall, as between VR Holdings,
assume and be responsible for all LDI Liabilities, regardless of when or where
such LDI Liabilities arose or arise, or whether the facts on which they are
based occurred prior to or subsequent to the date hereof, regardless of where or
against whom such LDI Liabilities are asserted or determined or whether asserted
or determined prior to, at or after the date hereof, and regardless of whether
arising from or alleged to arise from negligence, recklessness, violation of
statute or Law, fraud or misrepresentation, breach of contract or other theory,
by any member of VR Holdings or LDI or any of their respective directors,
officers, employees, agents, or Affiliates.  As of and after the Distribution
Time, VR Holdings shall, as between VR Holdings and LDI, assume and be
responsible for all VR Holdings Liabilities, regardless of when or where such VR
Holdings Liabilities arose or arise, or whether the facts on which they are
based occurred prior to or subsequent to the date hereof, regardless of where or
against whom such VR Holdings Liabilities are asserted or determined or whether
asserted or determined prior to, at or after the date hereof, and regardless of
whether arising from or alleged to arise from negligence, recklessness,
violation of statute or Law, fraud or misrepresentation, breach of contract or
other theory, by any member of VR Holdings or LDI or any of their respective
directors, officers, employees, agents, or Affiliates.  Assumption Agreements
for each of VR Holdings and LDI are attached hereto in Attachment 2(a)(i) and
Attachment 2(a)(ii).

(b)

Charter and Bylaws.  Effective as of the Distribution Time, the Restated
Certificate of Incorporation and the Amended and Restated Bylaws of LDI shall be
substantially in the forms of Schedule 2(b)(i) and Schedule 2(b)(ii),
respectively, with such changes therein as may be agreed to in writing by VR
Holdings.

(c)

Instruments of Assumption.  VR Holdings and LDI agree that to the extent
necessary, the assumption of the Liabilities contemplated pursuant to this
Agreement shall be effected by delivery by the transferee to the transferor of
such good and sufficient instruments of assumption, in form and substance
reasonably satisfactory to VR Holdings and LDI, as shall be necessary for the
assumption by the transferee of such Liabilities.  Each Party also agrees to
deliver to the other Party such other documents, instruments and writings as may
be reasonably requested by the other Party in connection with the transactions
contemplated hereby.

(d)

No Representations or Warranties.  Except as expressly set forth in this
Agreement or in an Ancillary Agreement, LDI and VR Holdings understand and agree
that no member of the VR Holdings Parties is making any representation or
warranty of any kind whatsoever, express or implied, to LDI or any member of the
LDI Parties in any way as to the LDI Business, or the LDI Liabilities; and, no
member of the LDI Parties is making any representation or warranty of any kind
whatsoever, express or implied, to VR Holdings or any member of the VR Holdings
Parties in any way as to the VR Holdings Business, or the VR Holdings
Liabilities.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING (x) THE
TRANSFERS, LICENSES AND ASSUMPTIONS REFERRED TO IN THIS PARAGRAPH (INCLUDING
PRIOR TRANSFERS) HAVE BEEN, OR WILL BE, MADE WITHOUT ANY REPRESENTATION OR
WARRANTY OF ANY NATURE, EXPRESS OR IMPLIED, AT COMMON LAW, BY STATUTE OR
OTHERWISE, RELATING TO (A) THE VALUE OR FREEDOM FROM ENCUMBRANCE OF, ANY ASSETS,
(B) THE CONDITION OR SUFFICIENCY OF ANY ASSETS (INCLUDING ANY IMPLIED OR EXPRESS
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, MARKETABILITY,
TITLE, VALUE, FREEDOM FROM ENCUMBRANCE OR OF CONFORMITY TO MODELS OR SAMPLES OF
MATERIALS, OR THE PRESENCE OR ABSENCE OF ANY HAZARDOUS MATERIALS IN OR ON, OR
DISPOSED OR DISCHARGED FROM, SUCH ASSETS), (C) THE NON-INFRINGEMENT OF ANY
PATENT OR OTHER INTELLECTUAL PROPERTY RIGHT OF ANY THIRD PARTY, (D) ANY OTHER
MATTER CONCERNING ANY ASSETS, OR (E) AS TO THE LEGAL

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SUFFICIENCY TO CONVEY TITLE TO ANY ASSETS, and (y) the instruments of transfer
or assumption referred to in this Paragraph shall not include any
representations and warranties other than as specifically provided herein.  To
the extent that the instruments of assumption with respect to any Prior
Transfers are inconsistent with this paragraph, LDI and VR Holdings agree that
the inconsistent provisions of such instruments are hereby amended and
superseded by the provisions of this paragraph.

(e)

Ancillary Agreements.  Prior to the Distribution Time, VR Holdings and LDI shall
execute and deliver or cause to be delivered the agreements designated as
follows:

(i)

The Assumption Agreement for LDI;

(ii)

The Assumption Agreement for VR Holdings;

(iii)

The Distribution Agreement;

(iv)

The Assumption and Novation Agreement;

(v)

The ILS Resale Agreement;

(vi)

The Resignation of J. Michael Moore;

(vii)

The Resignation of Zane Russell:

(viii)

The Resignation John E. Baker; and

(ix)

Such other written agreements, documents or instruments as the Parties may agree
are necessary or desirable and which specifically state that they are Ancillary
Agreements within the meaning of this Agreement (collectively, the “Ancillary
Agreements”).

(f)

Transfers Not Effected Prior to the Distribution Time.  To the extent that any
transfers contemplated by this Agreement shall not have been consummated as of
the Distribution Time, the Parties shall cooperate to effect such transfers as
promptly following the Distribution Time as shall be practicable.  Nothing
herein shall be deemed to require the assumption of any Liabilities that by
their terms or operation of Law cannot be assumed; provided, that LDI and VR
Holdings shall cooperate and use their respective commercially reasonable
efforts to obtain any necessary consents or approvals for the assumption of all
Liabilities contemplated to be assumed pursuant to this Agreement.  In the event
that any such assumption of Liabilities has not been consummated effective as of
the Distribution Time (or such earlier time as any such Liability may have been
assumed), the Party retaining such Liability shall retain such Liability for the
account of the Party by whom such Liability is to be assumed pursuant hereto,
and take such other action as may be reasonably requested by the Party by whom
such Liability is to be assumed, in order to place such Party, insofar as
reasonably possible, in the same position as would have existed had such
Liability been assumed as contemplated hereby.  As and when any such Liability
can be assumed, such assumption shall be effected forthwith, without the payment
of any further consideration therefor.  Subject to the foregoing, the Parties
agree that, as of the Distribution Time (or such earlier time as any such
Liability may been assumed), each Party shall be deemed to assumed in accordance
with the terms of this Agreement all of the Liabilities, and all duties,
obligations and responsibilities incident thereto, which such Party is entitled
to acquire or required to assume pursuant to the terms of this Agreement.

3.

The Distribution.

(a)

Delivery to Distribution Agent.  Subject to Paragraph 3(c), on or prior to the
Distribution Date, VR Holdings will authorize Island Stock Transfer, as
distribution agent (the “Distribution Agent”), for the benefit of holders of
record of the VR Holdings Common Stock at the close of business on the Record
Date (the “Record Holders”) to effect the book-entry transfer of all outstanding
shares of the LDI Common Stock and will order the Distribution Agent to effect
the Distribution at the Distribution Time in the manner set forth in Paragraph
3(b).

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(b)

Mechanics of the Distribution.

(i)

On the Distribution Date, VR Holdings will direct the Distribution Agent to
distribute, effective as of the Distribution Time, to each Record Holder a
number of shares of the LDI Common Stock equal to the number of shares of the VR
Holdings Common Stock held by such Record Holder multiplied by the Distribution
Multiple, except that the Distribution Agent will not issue any fractional
shares of the LDI Common Stock and will distribute cash in lieu of fractional
shares as provided in Paragraph 3(b)(ii).  All such shares of the LDI Common
Stock to be so distributed shall be distributed as uncertificated shares
registered in book-entry form through the direct registration system.  No
certificates therefor shall be distributed.  VR Holdings shall cause the
Distribution Agent to deliver an account statement to each holder of the LDI
Common Stock reflecting such holder’s ownership thereof.  All of the shares of
the LDI Common Stock distributed in the Distribution will be validly issued,
fully paid and non-assessable.

(ii)

VR Holdings will direct the Distribution Agent to determine, as soon as is
practicable after the Distribution Date, the number of fractional shares, if
any, of the LDI Common Stock allocable to each Record Holder entitled to receive
the LDI Common Stock in the Distribution and to promptly aggregate all the
fractional shares and sell the whole shares obtained thereby, in open market
transactions or otherwise, at then-prevailing trading prices, and to cause to be
distributed to each Record Holder, in lieu of any fractional share, each Record
Holder’s ratable share of the proceeds of the sale, after making appropriate
deductions of the amounts required to be withheld for federal income tax
purposes and after deducting an amount equal to all brokerage charges,
commissions and transfer taxes attributed to the sale.

(iii)

Any of shares of the LDI Common Stock or cash in lieu of fractional shares with
respect to the shares of the LDI Common Stock that remains unclaimed by any
Record Holder on the first anniversary of the Distribution Date will be
delivered to LDI.  LDI will hold the shares of the LDI Common Stock or cash for
the account of the Record Holder and any Record Holder will look only to LDI for
the shares of the LDI Common Stock or cash, if any, in lieu of fractional
shares, subject in each case to applicable escheat or other abandoned property
Laws.

(iv)

LDI shall mail or cause to be mailed to the Record Holders, on or prior to the
Distribution Date, the Information Statement.

(c)

Conditions Precedent to Consummation of the Separation and the Distribution.
 Neither the Separation, the Distribution nor the related transactions set forth
in this Agreement will become effective unless the following conditions have
been satisfied or waived by VR Holdings, in its sole and absolute discretion, at
or before the Distribution Time:

(i)

The Separation and the Distribution will not violate or result in a breach of
any Law or any material agreement;

(ii)

The Registration Statement will have become effective, and no stop order
suspending the effectiveness of the Registration Statement shall be in effect
or, to the knowledge of either VR Holdings or LDI, threatened by the SEC;

(iii)

The actions and filings necessary or appropriate under applicable federal or
state securities Laws and state blue sky Laws in connection with the
Distribution will have been taken;

(iv)

The Ancillary Agreements will have been executed and delivered by each of the
Parties thereto and no Party to any of the Ancillary Agreements will be in
material breach of any Ancillary Agreement;

(v)

All Consents required to be received or made before the Distribution may take
place will have been received or made and be in full force and effect, and this
Agreement and the Ancillary Agreements will not have been terminated and will
not violate, conflict with or result in a breach (with or without the passage of
time) of any Law or any material agreements of VR Holdings;

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(vi)

No preliminary or permanent injunction or other order, decree, or ruling issued
by a Governmental Authority, and no statute (as interpreted through orders or
rules of any Governmental Authority duly authorized to effectuate the statute),
rule, regulation or executive order promulgated or enacted by any Governmental
Authority will be in effect preventing, or materially limiting the benefits of,
the Separation or the Distribution;

(vii)

VR Holdings will have received an opinion from the counsel for LDI, dated the
Distribution Date, in form and substance acceptable to VR Holdings substantially
to the effect that, for U.S. federal income tax purposes, (A) certain
transactions to be effected in connection with the Separation qualify as
reorganizations under Sections 355 and/or 368 of the Code or as complete
liquidations under Section 332(a) of the Code, and (ii) the Distribution and
such transactions will qualify for tax-free treatment to VR Holdings and to LDI,
to the extent permissible; and

(viii)

Each of the conditions set forth in this Paragraph 3(c) is for the benefit of VR
Holdings, and VR Holdings may, in its sole and absolute discretion, determine
whether to waive any condition, in whole or in part.  Any determination made by
VR Holdings concerning the satisfaction or waiver of any or all of the
conditions in this Paragraph 3(c) will be conclusive and binding on the Parties.

4.

Consideration.  As consideration for the Separation, the Parties agree as
follows:

(a)

VR Holdings Inc. will receive $30,000.00 from LDI, to be paid as follows:
$20,000.00 upon the execution of this Agreement and the confirmation of the
notification described in Paragraph 4(b), below, and $10,000.00 no later than
October 6, 2012.  The payments due to VR Holdings by LDI hereunder shall be sent
by wire transfer in immediately available funds to the bank account of VR
Holdings, as follows:

Severn Savings Bank

200 Westgate Circle, Suite 100

Annapolis, MD 21401

Telephone (410) 260-2000

Account Number 0044070640

Routing Number 25507144

(b)

Upon the execution of this Agreement, VR Holdings will notify the Distribution
Agent to issue 10,250,000 shares of the VR Holdings Common Stock, as follows:

Name

Number of Shares

P.J. Burns

636,678

Braden Interests

750,000

Michael Jud

750,000

Charles Jud

650,000

Robert Embry

1,250,000

Paul Slater

175,000

Bruce Hanshaw

250,000

Michael Burke

250,000

John Kenner

400,000

Micro Capital Venture Partners, LLC

1,500,000

Tanglewood Family Limited Partnership

200,000

Kim Webb

100,000

Ed Poe

100,000

Mark Kelly

500,000

Bill Durbin

200,000

Elizabeth Arney

200,000

Aidan Arney

100,000

Tim Weithman

100,000

Jeff Chernick

200,000

R. Gentry Mathews

20,000

Natalie Heaggans Andrews

40,000

Richard Lockridge

40,000

Tysha Dill

20,000

Joyce Gorham – Worsley

20,000

John W and Karen Felchak JTWROS

25,000

Pine Springs Capital, LLC

1,773,322

Total

10,250,000

 

 

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Each recipient of the shares of the VR Holdings Common Stock described in this
Paragraph shall execute the Distribution Agreement described in Attachment 4(b)
attached hereto.

(c)

LDI will arrange and pay for all filings to be made by LDI with the SEC in
connection with the Separation and Distribution, including, but not limited to
the preparation and filing of the Registration Statement and any subsequent
filings with the SEC pursuant to the Securities Act and the Exchange Act and any
filings with various state securities commissions or agencies, the CUSIP Bureau,
and the Financial Industry Regulatory Authority (“FINRA”), as well as costs of
the auditors for LDI.  Likewise, LDI shall pay all costs associated with the tax
opinion described in Paragraph 4(c)(vii), as well as the notices to the Record
Holders, including but not limited to the mailing of the Information Statement,
and any fees charged by the Distribution Agent with respect to the issuance of
shares of the VR Holdings Common Stock and the shares of the LDI Common Stock as
may be required or contemplated hereunder.

(d)

VR Holdings will arrange and pay for the preparation of this Agreement and the
Information Statement and appropriate Form 8-K notices under the Exchange Act,
as well as the required notice to FINRA with respect to the Separation and
Distribution.  Otherwise, VR Holdings will have no obligation to pay any other
costs under this Agreement, the Separation, or the Distribution.

(e)

Notwithstanding anything herein contained to the contrary, upon the execution of
this Agreement, LDI will assume the VR Holdings $50,000.00 note payable to
Structured Financial Service, LLC, a Michigan limited liability company,
pursuant to the Assumption and Novation Agreement described in Attachment 4(e)
attached hereto.

(f)

Upon the Distribution, the shares of the the LDI Common Stock which would
otherwise be issuable to Baker, Deohge, Lapides, The Cancer Foundation, Woods,
and Dahne, if the Distribution of the shares of the the LDI Common Stock were
proportional to the shares of the VR Holdings Common Stock held by such
stockholders, shall be reduced by 50 percent, in consideration for the issuance
if the 10,250,000 shares of the VR Holdings Common Stock to be issued as
described in Paragraph 4(b), above, in lieu of the 20,500,000 shares of the VR
Holdings Common Stock which were to be issued pursuant to the Plan of Merger and
the CapNet Financing Agreement.

Upon the Distribution, the shares of the LDI Common Stock described in this
Paragraph 4(f) shall be issued as follows:

Name

 

 

 

Shares of VR Holdings Owned

Percent Given Up

 

Adjusted Shares

Exchange Ratio

 

Shares of LDI to Be Owned

Deohge Corp.

314,681,091

50

157,340,546

100 for One

1,573,405

John E. Baker

35,000,000

50

17,500,000

100 for One

175,000

Cancer Foundation

26,262,643

50

13,131,322

100 for One

131,313

Pamela Lapides

4,606,609

50

2,303,305

100 for One

23,033

John F. Woods

25,000,000

50

12,500,000

100 for One

125,000

Barry L. Dahne

  17,000,000

50

    8,500,000

100 for One

     85,000

Total

422,550,343

50

211,275,172

100 for One

2,112,752

      

Total shares issued (1)

451,058,343

  

100 for One

4,510,583

      

Percentage owned by control group

93.68

   

46.84

(1)

Shares of VR Holdings issued and outstanding (440,808,343) plus 10,250,000.

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(g)

LDI will provide its services (Data Discovery, E-Discovery, Client review, and
Cloud based Attorney Review) that relate to the processing of data and hosting
for the review and analysis by VR Holdings as it relates to its current legal
suit against its former lenders.  LDI will provide this service at no charge to
VR Holdings for a period of two years starting with the date of this Agreement.
 After that period of time, LDI will charge VR Holding for this service at LDI’s
normal rates charged to LDI’s customers at that time.  It is further agreed that
if VR Holdings uses this service after the end of the two year period noted
above, VR Holdings may pay for this service using the shares of the LDI Common
Stock issued to Baker, Deohge, Lapides, The Cancer Foundation, Woods, and Dahne,
as described herein.  Such shares of the LDI Common Stock will have the agreed
value for purposes of this payment of $0.10 per share.

(h)

LDI will record on its books and records $100,000 revenue for the period January
20, 2012, through September 30, 2012.  This revenue will be consolidated with VR
Holdings for its fiscal year ending September 30, 2012.

(i)

Upon the execution of this Agreement, LDI has provided to VR Holdings and
executed resell agreement for certain e-discover product and processing sales
from ILS, as described in Attachment 4(i) attached hereto.

5.

Modification of the Plan of Merger.  As a result of this Agreement, the
17,500,000 shares of the VR Holdings Common Stock which were to be deliverd to
Moore pursuant to the Plan of Merger shall be cancelled.  Instead, VR Holdings
shall issue the shares of the VR Holdings Common Stock as described in Paragraph
4(b), above.

6.

Modification of the CapNet Financing Agreement.  As a result of this Agreement,
the 3,000,000 shares of the VR Holdings Common Stock which were to be deliverd
to CapNet pursuant to the CapNet Financing Agreement shall be cancelled.
 Instead, VR Holdings shall issue the shares of the VR Holdings Common Stock as
described in Paragraph 4(b), above.

7.

Resignation of Moore and Russell as Directors of VR Holdings.  In consideration
of the execution of this Agreement, Moore and Russell do hereby resign as
directors of VR Holdings.  Copies of such resignations are attached hereto as
Attachment 7(i) and Attachment 7(ii), respectively.

8.

Resignation of Baker as a Director of LDI.  In consideration of the execution of
this Agreement, Baker does hereby resign as a director of LDI.  A copy of such
resignation is attached hereto as Attachment 8.

9.

Release of the VR Holdings Parties.  As a result of the mutual covenants and
considerations contained herein, LDI, Moore, Russell, and CapNet (hereinafter
collectively sometimes referred to as the “LDI Parties”) individually and for
each of their assigns, predecessors, successors, joint venturers, personal
representatives, stockholders, officers, directors, employees, underwriters,
attorneys, and trustees, and any other Person at interest therewith, without any
further action, shall be deemed to have released and forever discharged VR
Holdings, Baker, Deohge, Lapides, The Cancer Foundation, Woods, and Dahne
(hereinafter sometimes referred to as the “VR Holdings Parties”), individually
and each of their assigns, predecessors, successors, joint venturers, personal
representatives, stockholders, officers, directors, employees, underwriters,
attorneys, and trustees, and any other Person at interest therewith, from and
against any and all claims, demands, debts, interest, expenses, dues, liens,
liabilities, causes of action including court costs or attorneys’ fees, or any
other form of compensation, they may now own or hereafter acquire against the VR
Holdings Parties, whether statutory, in contract, in tort, either at law or in
equity, including quantum meruit, as well as any other kind or character of
action on account of, growing out of, relating to or concerning, whether
directly or indirectly, the Merger, the Plan of Merger, and the CapNet Financing
Agreement, and any other instrument, agreement or transaction, whether written
or oral, in connection with the Merger, the Plan of Merger, and the CapNet
Financing Agreement, or any other transaction or occurrence of any nature
whatsoever occurring before the execution of this Agreement, save only the
executory provisions of this Agreement.

10.

Acknowledgment by the LDI Parties.  The LDI Parties acknowledge and agree that
the release and discharge set forth above is a general release.  The LDI Parties
further agree that they have executed this Agreement as a complete compromise of
matters involving disputed issues of law and fact.  The LDI Parties further
acknowledge that the general release set forth hereinabove has been given
voluntarily, based solely upon the judgment of the LDI Parties formed after
consultation with their attorney, and is not based upon any representations or
statements of any kind or nature whatsoever made by or on behalf of the VR
Holdings Parties as to the liability, if any, of the VR Holdings Parties, or the
value of the Merger, the Plan of Merger, and the CapNet Financing Agreement, or
any other matter relating thereto.  Additionally, the LDI Parties expressly
state and acknowledge that no promise, agreement, or representation, other than
those expressed herein, have been made by the VR Holdings Parties to the LDI
Parties or their attorney in order to induce the execution of this Agreement.

9

 

11.

Release of the LDI Parties.  The VR Holdings Parties, individually and for each
of their assigns, predecessors, successors, joint venturers, personal
representatives, stockholders, officers, directors, employees, underwriters,
attorneys, and trustees, and any other Person at interest therewith, without any
further action, shall be deemed to have released and forever discharged the LDI
Parties, individually and each of their assigns, predecessors, successors, joint
venturers, personal representatives, stockholders, officers, directors,
employees, underwriters, attorneys, and trustees, and any other Person at
interest therewith, from and against any and all claims, demands, debts,
interest, expenses, dues, liens, liabilities, causes of action including court
costs or attorneys’ fees, or any other form of compensation, they may now own or
hereafter acquire against the LDI Parties, whether statutory, in contract, in
tort, either at law or in equity, including quantum meruit, as well as any other
kind or character of action on account of, growing out of, relating to or
concerning, whether directly or indirectly, the Merger, the Plan of Merger, and
the CapNet Financing Agreement, any other instrument, agreement or transaction,
whether written or oral, in connection with the Merger, the Plan of Merger, and
the CapNet Financing Agreement, or any other transaction or occurrence of any
nature whatsoever occurring before the execution of this Agreement, save only
the executory provisions of this Agreement.

12.

Acknowledgment by the VR Holdings Parties.  The VR Holdings Parties acknowledge
and agree that the release and discharge set forth above is a general release.
 The VR Holdings Parties further agree that they have executed this Agreement as
a complete compromise of matters involving disputed issues of law and fact.  The
VR Holdings Parties further acknowledge that the general release set forth
hereinabove has been given voluntarily, based solely upon the judgment of the VR
Holdings Parties formed after consultation with their attorney, and is not based
upon any representations or statements of any kind or nature whatsoever made by
or on behalf of the LDI Parties as to the liability, if any, of the LDI Parties,
or the value of the Merger, the Plan of Merger, and the CapNet Financing
Agreement, or any other matter relating thereto.  Additionally, the VR Holdings
Parties expressly state and acknowledge that no promise, agreement, or
representation, other than those expressed herein, have been made by the LDI
Parties to the VR Holdings Parties or their attorney in order to induce the
execution of this Agreement.

13.

Hold Harmless by the LDI Parties.  In further consideration for this Agreement,
the LDI Parties agree to indemnify and hold harmless each of the VR Holdings
Parties from any and all claims, differences, demands, losses, liabilities,
damages, causes of action, defense costs and expenses, and attorneys’ fees, of
any nature, type or character whatsoever, including claims for contractual,
statutory or equitable subrogation, whether known or unknown, whether for
compensatory, punitive, exemplary or any other damages or indemnity of any kind
or character in contract or in tort that may accrue of have accrued relating to
or otherwise in connection with the Separation or the Distribution asserted by
anyone claiming by, through or under the LDI Parties or their personal
representatives, successors and assigns, or the Registration Statement.

14.

Hold Harmless by the VR Holdings Parties.  In further consideration for this
Agreement, the VR Holdings Parties agree to indemnify and hold harmless each of
the LDI Parties from any and all claims, differences, demands, losses,
liabilities, damages, causes of action, defense costs and expenses, and
attorneys’ fees, of any nature, type or character whatsoever, including claims
for contractual, statutory or equitable subrogation, whether known or unknown,
whether for compensatory, punitive, exemplary or any other damages or indemnity
of any kind or character in contract or in tort that may accrue of have accrued
relating to or otherwise in connection with the allegations in the Separation or
the Distribution asserted by anyone claiming by, through or under the VR
Holdings Parties or their heirs, executors, personal representatives, successors
and assigns, or the Information Statement.

15.

Covenant Not to Sue by the LDI Parties.  In consideration of this Agreement and
the other consideration recited herein, the LDI Parties, individually and for
each of their assigns, predecessors, successors, joint venturers, personal
representatives, stockholders, officers, directors, employees, underwriters,
attorneys, and trustees, and any other Person at interest therewith, hereby
agree not to sue, make any claims against, nor institute any action or
proceeding, nor seek recovery directly or indirectly against any of the VR
Holdings Parties to recover damages of any kind or character, either to Person
or property, resulting from the Merger, the Plan of Merger, and the CapNet
Financing Agreement, or any other matter relating thereto.

10

16.

Covenant Not to Sue by the VR Holdings Parties.  In consideration of this
Agreement and the other consideration recited herein, the VR Holdings Parties,
individually and for each of their assigns, predecessors, successors, joint
venturers, personal representatives, stockholders, officers, directors,
employees, underwriters, attorneys, and trustees, and any other Person at
interest therewith, hereby agree not to sue, make any claims against, nor
institute any action or proceeding, nor seek recovery directly or indirectly
against any of the LDI Parties to recover damages of any kind or character,
either to Person or property, resulting from the Merger, the Plan of Merger, and
the CapNet Financing Agreement, or any other matter relating thereto.

17.

Representations and Warranties of the LDI Parties.  The LDI Parties expressly
represent and warrant to each and all of the VR Holdings Parties that:

(a)

The LDI Parties are duly authorized to execute this Agreement;

(b)

All expenses of any and every nature and character whatsoever incurred by the
LDI Parties or on their behalf, past or future, arising from the Merger, the
Plan of Merger, and the CapNet Financing Agreement are not the obligation of any
of the VR Holdings Parties;

(c)

There are no unresolved issues;

(d)

The LDI Parties’ claims in the Merger, the Plan of Merger, and the CapNet
Financing Agreement, or any other matter relating thereto have not been
assigned, pledged, or otherwise in any manner whatsoever sold or transferred or
become subject to a lien, either by instrument, in writing or otherwise,
including any right, interest or claim which the LDI Parties may have now or in
the future by reason of the Merger, the Plan of Merger, and the CapNet Financing
Agreement, or any other matter relating thereto or any matters arising out of or
related thereto; and

(e)

No representations, if any, about the nature and extent of the claims of the LDI
Parties or damages thereunder made by any attorney or agent of any of the VR
Holdings Parties, nor any representations, if any, regarding the nature and
extent of legal liability or financial responsibility of any of the VR Holdings
Parties have induced the LDI Parties to enter into this Agreement.

18.

Representations and Warranties of the VR Holdings Parties.  The VR Holdings
Parties expressly represent and warrant to the LDI Parties that:

(a)

The VR Holdings Parties are duly authorized to execute this Agreement;

(b)

All expenses of any and every nature and character whatsoever incurred by the VR
Holdings Parties or on their behalf, past or future, arising from the Merger,
the Plan of Merger, and the CapNet Financing Agreement are not the obligation of
the LDI Parties;

(c)

There are no unresolved issues;

(f)

The VR Holdings Parties’ claims in the Merger, the Plan of Merger, and the
CapNet Financing Agreement, or any other matter relating thereto have not been
assigned, pledged, or otherwise in any manner whatsoever sold or transferred or
become subject to a lien, either by instrument, in writing or otherwise,
including any right, interest or claim which the VR Holdings Parties may have
now or in the future by reason of the Merger, the Plan of Merger, and the CapNet
Financing Agreement, or any other matter relating thereto or any matters arising
out of or related thereto; and

(d)

No representations, if any, about the nature and extent of the claims of the VR
Holdings Parties or damages thereunder made by any attorney or agent of the LDI
Parties, nor any representations, if any, regarding the nature and extent of
legal liability or financial responsibility of any of the LDI Parties have
induced the VR Holdings Parties to enter into this Agreement.

19.

The Nature and Survival of Representations, Covenants and Warranties.  All
statements and facts contained in any memorandum, certificate, instrument, or
other document delivered by or on behalf of the Parties hereto for information
or reliance pursuant to this Agreement, shall be deemed representations,
covenants and warranties by the Parties hereto under this Agreement.  All
representations, covenants and warranties of the Parties shall survive the
Distribution and all inspections, examinations, or audits on behalf of the
Parties, shall expire five years following the Distribution Date.

11

 

20.

Default.  If the VR Holdings Parties do not default hereunder and the LDI
Parties default hereunder, then the VR Holdings Parties may elect to terminate
this Agreement as well as any other agreement executed by the VR Holdings
Parties in connection with the transactions contemplated by this Agreement,
whereupon neither Party shall be liable to the other hereunder, or the VR
Holdings Parties may assert any remedy, including specific performance, which
the VR Holdings Parties may have by reason of any such default of the LDI
Parties.  If the LDI Parties do not default hereunder and the VR Holdings
Parties default hereunder, then the LDI Parties may elect to terminate this
Agreement as well as any other agreement executed by the LDI Parties in
connection with the transactions contemplated by this Agreement, whereupon
neither Party shall be liable to the other hereunder, or the LDI Parties may
assert any remedy, including specific performance, which the LDI Parties may
have by reason of any such default of the VR Holdings Parties.  From and after
the Distribution Date, in the event of a breach by any Party of the terms of
this Agreement or any obligation of a Party which survives the Distribution, the
non-defaulting Party may assert any remedy, either at law or in equity to which
such non-defaulting Party may be entitled.  As used in this paragraph, a default
by any of the VR Holdings Parties shall constitute a default by all of the VR
Holdings Parties, and a default by any of the LDI Parties shall constitute a
default by all of the LDI Parties.

21.

Mediation and Arbitration.  All disputes arising or related to this Agreement
must exclusively be resolved first by mediation with a mediator selected by the
Parties, with such mediation to be held in Houston, Texas.  If such mediation
fails, then any such dispute shall be resolved by binding arbitration under the
Commercial Arbitration Rules of the American Arbitration Association in effect
at the time the arbitration proceeding commences, except that (a) Texas law and
the Federal Arbitration Act must govern construction and effect, (b) the locale
of any arbitration must be in Houston, Texas, and (c) the arbitrator must with
the award provide written findings of fact and conclusions of law.  Any Party
may seek from a court of competent jurisdiction any provisional remedy that may
be necessary to protect its rights or assets pending the selection of the
arbitrator or the arbitrator’s determination of the merits of the controversy.
 The exercise of such arbitration rights by any Party will not preclude the
exercise of any self-help remedies (including without limitation, setoff rights)
or the exercise of any non-judicial foreclosure rights.  An arbitration award
may be entered in any court having jurisdiction.

22.

Attorneys’ Fees.  In the event that it should become necessary for any Party
entitled hereunder to bring suit against any other Party to this Agreement for a
breach of this Agreement, the Parties hereby covenant and agree that the Party
who is found to be in breach of this Agreement shall also be liable for all
reasonable attorneys’ fees and costs of court incurred by the other Parties.
 Provided, however, in the event that there has been no breach of this
Agreement, whether or not the transactions contemplated hereby are consummated,
each Party shall bear its own costs and expenses.

23.

Benefit.  All the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the Parties hereto, and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns.

24.

Notices.  All notices, requests, demands, and other communications hereunder
shall be in writing and delivered personally or sent by registered or certified
United States mail, return receipt requested with postage prepaid, or by
telecopy or e-mail, if to the VR Holdings Parties, addressed to Mr. John E.
Baker at 1615 Chester Road, Chester, Maryland 21619, telephone (443) 519-0129,
telecopier (239) 384-9437, and e-mail john.baker@inwaretechnologies.com; and if
to the LDI Parties, addressed to Mr. Zane Russell at 925 South Mason, Suite 375,
Katy, Texas 77450, telephone (713) 893-1821, and email zrussell@litdyn.com.  Any
Party hereto may change its address upon 10 days’ written notice to any other
Party hereto.

25.

Construction.  Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words in the singular number shall be
held to include the plural, and vice versa, unless the context requires
otherwise.

26.

Waiver.  No course of dealing on the part of any Party hereto or its agents, or
any failure or delay by any such Party with respect to exercising any right,
power or privilege of such Party under this Agreement or any instrument referred
to herein shall operate as a waiver thereof, and any single or partial exercise
of any such right, power or privilege shall not preclude any later exercise
thereof or any exercise of any other right, power or privilege hereunder or
thereunder.

12

 

27.

Cumulative Rights.  The rights and remedies of any Party under this Agreement
and the instruments executed or to be executed in connection herewith, or any of
them, shall be cumulative and the exercise or partial exercise of any such right
or remedy shall not preclude the exercise of any other right or remedy.

28.

Invalidity.  In the event any one or more of the provisions contained in this
Agreement or in any instrument referred to herein or executed in connection
herewith shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect the other provisions of this Agreement or any such other instrument.

29.

Headings.  The headings used in this Agreement are for convenience and reference
only and in no way define, limit, amplify or describe the scope or intent of
this Agreement, and do not affect or constitute a part of this Agreement.

30.

No Third-Party Beneficiary.  Any agreement to pay an amount and any assumption
of liability contained in this Agreement, express or implied, shall be only for
the benefit of the Parties hereto and their respective successors and assigns
(as herein expressly permitted), and such agreements and assumptions shall not
inure to the benefit of the obligees or any other Party, whomsoever, it being
the intention of the Parties hereto that no one shall be or be deemed to be a
third-Party beneficiary of this Agreement.

31.

Time of the Essence.  Time is of the essence of this Agreement.

32.

Incorporation by Reference.  All agreements, exhibits, attachments, and
schedules referred to or included herein constitute integral parts to this
Agreement and are incorporated into this Agreement by this reference.

33.

Multiple Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  A facsimile transmission
or PDF copy of this signed Agreement shall be legal and binding on all Parties
hereto.

34.

Law Governing; Jurisdiction.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, without regard to any
conflicts of laws provisions thereof.  Each Party hereby irrevocably submits to
the personal jurisdiction of the United States District Court located in Harris
County, Texas, as well as of the Courts of the State of Texas in Harris County,
Texas over any suit, action or proceeding arising out of or relating to this
Agreement.  Each Party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such mediation, arbitration, suit, action or proceeding
brought in any such county and any claim that any such mediation, arbitration,
suit, action or proceeding brought in such county has been brought in an
inconvenient forum.

35.

Entire Agreement.  This instrument and the attachments hereto contain the entire
understanding of the Parties and may not be changed orally, but only by an
instrument in writing signed by the Party against whom enforcement of any
waiver, change, modification, extension, or discharge is sought.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of September 24,
2012.

VR HOLDINGS, INC.

By

    John E. Baker, Chief Executive Officer

13

LITIGATION DYNAMICS, INC.

By

    Zane Russell, Chief Executive Officer

J. MICHAEL MOORE

 

ZANE RUSSELL

CAPNET SECURITIES CORPORATION

By

    Daniel “Bo” L. Ritz, Chief Executive Officer

JOHN E. BAKER

DEOHGE CORP.

By

    Morton M. Lapides, Sr., Chief Executive Officer

 

PAMELA LAPIDES

THE CANCER FOUNDATION, INC.

By

    Barry L. Dahne, Chief Executive Officer

JOHN FOSTER WOODS

BARRY L. DAHNE

14

 

 

 

Attachments:

Attachment 2(a)(i)

Assumption Agreement for LDI

Attachment 2(a)(ii)

Assumption Agreement for VR Holdings

Attachment 4(b)

Distribution Agreement

Attachment 4(e)

Assumption and Novation Agreement

Attachment 4(i)

ILS Resale Agreement

Attachment 7(i)

Resignation of J. Michael Moore

Attachment 7(ii)

Resignation of Zane Russell

Attachment 8

Resignation John E. Baker

Schedules:

Schedule 2(b)(i)

Restated Certificate of Incorporation of LDI

Schedule 2(b)(ii)

Amended and Restated Bylaws of LDI

15

Attachment 2(a)(i)
Assumption Agreement for LDI

ASSUMPTION AGREEMENT FOR LITIGATION DYNAMICS, INC.

THIS Agreement is made by and between VR HOLDINGS, INC., a Delaware corporation
(“VR Holdings”) and LITIGATION DYNAMICS, INC. a Texas corporation (“LDI”), who
agree as follows:

WHEREAS, on September 24, 2012, VR Holdings, LDI, J. Michael Moore, Zane
Russell, CapNet Securities Corporation, a Texas corporation, John E. Baker,
Deohge Corp., a Maryland corporation, Pamela Lapides, The Cancer Foundation,
Inc., a Maryland corporation, John Foster Woods, and Barry L. Dahne executed
that certain Separation Agreement (the “Separation Agreement”); and

WHEREAS, any capitalized terms used herein shall have the same meaning as used
in the Separation Agreement; and

WHEREAS, pursuant to the Separation Agreement, LDI agreed to assume and agree to
pay all of the LDI Liabilities;

NOW, THEREFORE, in consideration of the foregoing and the following mutual
covenants and agreements, the Parties agree as follows:

1.

Assumption of LDI Liabilities.  Pursuant to Paragraph 2(a) of the Separation
Agreement, as of and after the Distribution Time, LDI shall, as between VR
Holdings, assume and be responsible for all LDI Liabilities, regardless of when
or where such LDI Liabilities arose or arise, or whether the facts on which they
are based occurred prior to or subsequent to the date hereof, regardless of
where or against whom such LDI Liabilities are asserted or determined or whether
asserted or determined prior to, at or after the date hereof, and regardless of
whether arising from or alleged to arise from negligence, recklessness,
violation of statute or Law, fraud or misrepresentation, breach of contract or
other theory, by any member of VR Holdings or LDI or any of their respective
directors, officers, employees, agents, or Affiliates

2.

Indemnification by LDI.  LDI, individually and for its assigns, predecessors,
successors, joint venturers, personal representatives, stockholders, officers,
directors, employees, underwriters, attorneys, and trustees, and any other
Person at interest therewith, shall hold harmless and indemnify VR Holdings, its
stockholders, officers, directors, employees, underwriters, attorneys, and
trustees, and any other Person at interest therewith, from and against any and
all claims, demands, debts, expenses, including court costs or attorney’s fees,
dues, liens liabilities, cause or causes of action, whether statutory, in
contract, express or implied, either at law or in equity, including quantum
meruit, or in tort, as well as any other kind or character of action with
respect to the LDI Liabilities now held, owned or possessed by anyone in whole
or in part, or which anyone may claim to hold or which anyone hereafter may
claim to hold, for, on account of, or growing out of, related to or concerning,
whether directly or indirectly, proximately or remotely, the LDI Liabilities.

3.

Mediation and Arbitration.  All disputes arising or related to this Agreement
must exclusively be resolved first by mediation with a mediator selected by the
Parties, with such mediation to be held in Houston, Texas.  If such mediation
fails, then any such dispute shall be resolved by binding arbitration under the
Commercial Arbitration Rules of the American Arbitration Association in effect
at the time the arbitration proceeding commences, except that (a) Texas law and
the Federal Arbitration Act must govern construction and effect, (b) the locale
of any arbitration must be in Houston, Texas, and (c) the arbitrator must with
the award provide written findings of fact and conclusions of law.  Any Party
may seek from a court of competent jurisdiction any provisional remedy that may
be necessary to protect its rights or assets pending the selection of the
arbitrator or the arbitrator’s determination of the merits of the controversy.
 The exercise of such arbitration rights by any Party will not preclude the
exercise of any self-help remedies (including without limitation, setoff rights)
or the exercise of any non-judicial foreclosure rights.  An arbitration award
may be entered in any court having jurisdiction.

1

4.

Attorneys’ Fees.  In the event that it should become necessary for any Party
entitled hereunder to bring suit against any other Party to this Agreement for a
breach of this Agreement, the Parties hereby covenant and agree that the Party
who is found to be in breach of this Agreement shall also be liable for all
reasonable attorneys’ fees and costs of court incurred by the other Parties.
 Provided, however, in the event that there has been no breach of this
Agreement, whether or not the transactions contemplated hereby are consummated,
each Party shall bear its own costs and expenses.

5.

Benefit.  All the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the Parties hereto, and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns.

6.

Notices.  All notices, requests, demands, and other communications hereunder
shall be in writing and delivered personally or sent by registered or certified
United States mail, return receipt requested with postage prepaid, or by
telecopy or e-mail, if to VR Holdings, addressed to Mr. John E. Baker at 1615
Chester Road, Chester, Maryland 21619, telephone (443) 519-0129, telecopier
(239) 384-9437, and e-mail john.baker@inwaretechnologies.com; and if to LDI,
addressed to Mr. Zane Russell at 925 South Mason, Suite 375, Katy, Texas 77450,
telephone (713) 893-1821, and email zrussell@litdyn.com.  Any Party hereto may
change its address upon 10 days’ written notice to any other Party hereto.

7.

Construction.  Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words in the singular number shall be
held to include the plural, and vice versa, unless the context requires
otherwise.

8.

Waiver.  No course of dealing on the part of any Party hereto or its agents, or
any failure or delay by any such Party with respect to exercising any right,
power or privilege of such Party under this Agreement or any instrument referred
to herein shall operate as a waiver thereof, and any single or partial exercise
of any such right, power or privilege shall not preclude any later exercise
thereof or any exercise of any other right, power or privilege hereunder or
thereunder.

9.

Cumulative Rights.  The rights and remedies of any Party under this Agreement
and the instruments executed or to be executed in connection herewith, or any of
them, shall be cumulative and the exercise or partial exercise of any such right
or remedy shall not preclude the exercise of any other right or remedy.

10.

Invalidity.  In the event any one or more of the provisions contained in this
Agreement or in any instrument referred to herein or executed in connection
herewith shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect the other provisions of this Agreement or any such other instrument.

11.

Headings.  The headings used in this Agreement are for convenience and reference
only and in no way define, limit, amplify or describe the scope or intent of
this Agreement, and do not affect or constitute a part of this Agreement.

12.

No Third-Party Beneficiary.  Any agreement to pay an amount and any assumption
of liability contained in this Agreement, express or implied, shall be only for
the benefit of the Parties hereto and their respective successors and assigns
(as herein expressly permitted), and such agreements and assumptions shall not
inure to the benefit of the obligees or any other Party, whomsoever, it being
the intention of the Parties hereto that no one shall be or be deemed to be a
third-Party beneficiary of this Agreement.

13.

Time of the Essence.  Time is of the essence of this Agreement.

14.

Incorporation by Reference.  All agreements, exhibits, attachments, and
schedules referred to or included herein constitute integral parts to this
Agreement and are incorporated into this Agreement by this reference.

2

15.

Multiple Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  A facsimile transmission
or PDF copy of this signed Agreement shall be legal and binding on all Parties
hereto.

16.

Law Governing; Jurisdiction.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, without regard to any
conflicts of laws provisions thereof.  Each Party hereby irrevocably submits to
the personal jurisdiction of the United States District Court located in Harris
County, Texas, as well as of the Courts of the State of Texas in Harris County,
Texas over any suit, action or proceeding arising out of or relating to this
Agreement.  Each Party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such mediation, arbitration, suit, action or proceeding
brought in any such county and any claim that any such mediation, arbitration,
suit, action or proceeding brought in such county has been brought in an
inconvenient forum.

17.

Entire Agreement.  This instrument and the attachments hereto contain the entire
understanding of the Parties and may not be changed orally, but only by an
instrument in writing signed by the Party against whom enforcement of any
waiver, change, modification, extension, or discharge is sought.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of September 24,
2012.

VR HOLDINGS, INC.

By

    John E. Baker, Chief Executive Officer

LITIGATION DYNAMICS, INC.

By

    Zane Russell, Chief Executive Officer

3

Attachment 2(a)(ii)
Assumption Agreement for VR Holdings

ASSUMPTION AGREEMENT FOR VR HOLDINGS, INC.

THIS Agreement is made by and between VR HOLDINGS, INC., a Delaware corporation
(“VR Holdings”) and LITIGATION DYNAMICS, INC. a Texas corporation (“LDI”), who
agree as follows:

WHEREAS, on September 24, 2012, VR Holdings, LDI, J. Michael Moore, Zane
Russell, CapNet Securities Corporation, a Texas corporation, John E. Baker,
Deohge Corp., a Maryland corporation, Pamela Lapides, The Cancer Foundation,
Inc., a Maryland corporation, John Foster Woods, and Barry L. Dahne executed
that certain Separation Agreement (the “Separation Agreement”); and

WHEREAS, any capitalized terms used herein shall have the same meaning as used
in the Separation Agreement; and

WHEREAS, pursuant to the Separation Agreement, VR Holdings agreed to assume and
agree to pay all of the VR Holdings Liabilities;

NOW, THEREFORE, in consideration of the foregoing and the following mutual
covenants and agreements, the Parties agree as follows:

1.

Assumption of VR Holdings Liabilities.  Pursuant to Paragraph 2(a) of the
Separation Agreement, as of and after the Distribution Time, VR Holdings shall,
as between LDI, assume and be responsible for all VR Holdings Liabilities,
regardless of when or where such VR Holdings Liabilities arose or arise, or
whether the facts on which they are based occurred prior to or subsequent to the
date hereof, regardless of where or against whom such VR Holdings Liabilities
are asserted or determined or whether asserted or determined prior to, at or
after the date hereof, and regardless of whether arising from or alleged to
arise from negligence, recklessness, violation of statute or Law, fraud or
misrepresentation, breach of contract or other theory, by any member of VR
Holdings or LDI or any of their respective directors, officers, employees,
agents, or Affiliates

2.

Indemnification by VR Holdings.  VR Holdings, individually and for its assigns,
predecessors, successors, joint venturers, personal representatives,
stockholders, officers, directors, employees, underwriters, attorneys, and
trustees, and any other Person at interest therewith, shall hold harmless and
indemnify LDI, its stockholders, officers, directors, employees, underwriters,
attorneys, and trustees, and any other Person at interest therewith, from and
against any and all claims, demands, debts, expenses, including court costs or
attorney’s fees, dues, liens liabilities, cause or causes of action, whether
statutory, in contract, express or implied, either at law or in equity,
including quantum meruit, or in tort, as well as any other kind or character of
action with respect to the VR Holdings Liabilities now held, owned or possessed
by anyone in whole or in part, or which anyone may claim to hold or which anyone
hereafter may claim to hold, for, on account of, or growing out of, related to
or concerning, whether directly or indirectly, proximately or remotely, the VR
Holdings Liabilities.

3.

Mediation and Arbitration.  All disputes arising or related to this Agreement
must exclusively be resolved first by mediation with a mediator selected by the
Parties, with such mediation to be held in Houston, Texas.  If such mediation
fails, then any such dispute shall be resolved by binding arbitration under the
Commercial Arbitration Rules of the American Arbitration Association in effect
at the time the arbitration proceeding commences, except that (a) Texas law and
the Federal Arbitration Act must govern construction and effect, (b) the locale
of any arbitration must be in Houston, Texas, and (c) the arbitrator must with
the award provide written findings of fact and conclusions of law.  Any Party
may seek from a court of competent jurisdiction any provisional remedy that may
be necessary to protect its rights or assets pending the selection of the
arbitrator or the arbitrator’s determination of the merits of the controversy.
 The exercise of such arbitration rights by any Party will not preclude the
exercise of any self-help remedies (including without limitation, setoff rights)
or the exercise of any non-judicial foreclosure rights.  An arbitration award
may be entered in any court having jurisdiction.

1

4.

Attorneys’ Fees.  In the event that it should become necessary for any Party
entitled hereunder to bring suit against any other Party to this Agreement for a
breach of this Agreement, the Parties hereby covenant and agree that the Party
who is found to be in breach of this Agreement shall also be liable for all
reasonable attorneys’ fees and costs of court incurred by the other Parties.
 Provided, however, in the event that there has been no breach of this
Agreement, whether or not the transactions contemplated hereby are consummated,
each Party shall bear its own costs and expenses.

5.

Benefit.  All the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the Parties hereto, and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns.

6.

Notices.  All notices, requests, demands, and other communications hereunder
shall be in writing and delivered personally or sent by registered or certified
United States mail, return receipt requested with postage prepaid, or by
telecopy or e-mail, if to VR Holdings, addressed to Mr. John E. Baker at 1615
Chester Road, Chester, Maryland 21619, telephone (443) 519-0129, telecopier
(239) 384-9437, and e-mail john.baker@inwaretechnologies.com; and if to LDI,
addressed to Mr. Zane Russell at 925 South Mason, Suite 375, Katy, Texas 77450,
telephone (713) 893-1821, and email zrussell@litdyn.com.  Any Party hereto may
change its address upon 10 days’ written notice to any other Party hereto.

7.

Construction.  Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words in the singular number shall be
held to include the plural, and vice versa, unless the context requires
otherwise.

8.

Waiver.  No course of dealing on the part of any Party hereto or its agents, or
any failure or delay by any such Party with respect to exercising any right,
power or privilege of such Party under this Agreement or any instrument referred
to herein shall operate as a waiver thereof, and any single or partial exercise
of any such right, power or privilege shall not preclude any later exercise
thereof or any exercise of any other right, power or privilege hereunder or
thereunder.

9.

Cumulative Rights.  The rights and remedies of any Party under this Agreement
and the instruments executed or to be executed in connection herewith, or any of
them, shall be cumulative and the exercise or partial exercise of any such right
or remedy shall not preclude the exercise of any other right or remedy.

10.

Invalidity.  In the event any one or more of the provisions contained in this
Agreement or in any instrument referred to herein or executed in connection
herewith shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect the other provisions of this Agreement or any such other instrument.

11.

Headings.  The headings used in this Agreement are for convenience and reference
only and in no way define, limit, amplify or describe the scope or intent of
this Agreement, and do not affect or constitute a part of this Agreement.

12.

No Third-Party Beneficiary.  Any agreement to pay an amount and any assumption
of liability contained in this Agreement, express or implied, shall be only for
the benefit of the Parties hereto and their respective successors and assigns
(as herein expressly permitted), and such agreements and assumptions shall not
inure to the benefit of the obligees or any other Party, whomsoever, it being
the intention of the Parties hereto that no one shall be or be deemed to be a
third-Party beneficiary of this Agreement.

13.

Time of the Essence.  Time is of the essence of this Agreement.

14.

Incorporation by Reference.  All agreements, exhibits, attachments, and
schedules referred to or included herein constitute integral parts to this
Agreement and are incorporated into this Agreement by this reference.

2

15.

Multiple Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  A facsimile transmission
or PDF copy of this signed Agreement shall be legal and binding on all Parties
hereto.

16.

Law Governing; Jurisdiction.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, without regard to any
conflicts of laws provisions thereof.  Each Party hereby irrevocably submits to
the personal jurisdiction of the United States District Court located in Harris
County, Texas, as well as of the Courts of the State of Texas in Harris County,
Texas over any suit, action or proceeding arising out of or relating to this
Agreement.  Each Party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such mediation, arbitration, suit, action or proceeding
brought in any such county and any claim that any such mediation, arbitration,
suit, action or proceeding brought in such county has been brought in an
inconvenient forum.

17.

Entire Agreement.  This instrument and the attachments hereto contain the entire
understanding of the Parties and may not be changed orally, but only by an
instrument in writing signed by the Party against whom enforcement of any
waiver, change, modification, extension, or discharge is sought.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of September 24,
2012.

VR HOLDINGS, INC.

By

    John E. Baker, Chief Executive Officer

LITIGATION DYNAMICS, INC.

By

    Zane Russell, Chief Executive Officer

3

 

Attachment 4(b)
Distribution Agreement

VR HOLDINGS, INC.

DISTRIBUTION AGREEMENT

VR Holdings, Inc.

1615 Chester Road

Chester, Maryland 21619

Re:

Distribution of Shares of the Common Stock of VR Holdings, Inc.

Gentlemen:

1.

Distribution.  The undersigned hereby agrees to accept _____________ shares of
the common stock, par value $0.000001 per share (the “VR Holdings Common Stock”)
in VR Holdings, Inc., a Delaware corporation (the “Company”), pursuant to that
certain Separation Agreement (the “Separation Agreement”) dated September 24,
2012, herewith by and between the Company, Litigation Dynamics, Inc. a Texas
corporation, J. Michael Moore, Zane Russell, CapNet Securities Corporation, a
Texas corporation, John E. Baker, Deohge Corp., a Maryland corporation, Pamela
Lapides, The Cancer Foundation, Inc., a Maryland corporation, John Foster Woods,
and Barry L. Dahne.  The Separation Agreement is incorporated herein by
reference for all purposes.  Any capitalized terms used herein shall have the
same meaning as used in the Separation Agreement.  The undersigned has received
a copy of the Separation Agreement.  The shares of the VR Holdings Common Stock
are being offered by the Company.  Subject to the terms and conditions of the
Separation Agreement and this Distribution Agreement, the undersigned hereby
irrevocably accepts the shares of the VR Holdings Common Stock described herein.

2.

Acceptance of Distribution.  The undersigned understands and agrees that the
acceptance of the distribution of the shares of the VR Holdings Common Stock is
made subject to the terms and conditions specified herein.

3.

Representations and Warranties.  The undersigned represents and warrants as
follows:

(a)

The undersigned is an Accredited Investor as defined in Regulation D promulgated
under the Securities Act of 1933, as amended (the “Securities Act”).

(b)

The undersigned has received information provided to him in writing by the
Company, or information from books and records of the Company, as specified
below.  The undersigned understands that all documents, records and books
pertaining to this investment have been made available for inspection by him,
his attorney and/or his accountant and/or his “Purchaser Representative” as
defined in Regulation D promulgated under the Securities Act, and that the books
and records of the Company will be available, upon reasonable notice, for
inspection by the undersigned during reasonable business hours at the Company’s
principal place of business.  The undersigned and/or his advisers have had a
reasonable opportunity to ask questions of and receive answers from the Company,
or a person or persons acting on its behalf, concerning the distribution of the
shares of the VR Holdings Common Stock as described in the Separation Agreement
(the “Distribution”), and all such questions have been answered to the full
satisfaction of the undersigned.  No oral representations have been made and, to
the extent oral information has been furnished to the undersigned or his
advisers in connection with the Distribution, such information was consistent
with all written information furnished.

(c)

Specifically, the undersigned was provided with access to the Company’s filings
with the Securities and Exchange Commission, including the following:

1

(i)

The Company’s registration statement on Form S-1 filed pursuant to the
Securities Act.

(ii)

The annual report to stockholders for the most recent fiscal year, any
definitive proxy statement or information statement filed in connection with
that annual report, and, if requested by the undersigned in writing, a copy of
the Company’s most recent Form 10-K pursuant to the Securities Exchange Act of
1934, as amended (the “Exchange Act”).

(iii)

The information contained in an annual report on Form 10-K pursuant to the
Exchange Act.

(iv)

The information contained in any reports or documents required to be filed by
the Company under Sections 13(a), 14(a), 14(c), and 15(d) of the Exchange Act
since the distribution or filing of the reports specified above.

(v)

A brief description of the securities being offered, the terms of the
Distribution, and any material changes in the Company’s affairs that are not
disclosed in the documents furnished.

(d)

The undersigned (i) has adequate means of providing for his current needs and
possible personal contingencies, (ii) has no need for liquidity in this
investment, (iii) is able to bear the substantial economic risks of an
investment in the shares of the VR Holdings Common Stock for an indefinite
period, and (iv) at the present time, could afford a complete loss of such
investment.

(e)

The undersigned recognizes that the Company has a limited financial and
operating history and no history of profitable operations, and that the shares
of the VR Holdings Common Stock as an investment involve special risks,
including those disclosed to the undersigned by the Company.

(f)

The undersigned understands that the shares of the VR Holdings Common Stock have
not been nor will be registered under the Securities Act or the securities laws
of any state, in reliance upon an exemption therefrom for non-public offerings.
 The undersigned understands that the shares of the VR Holdings Common Stock
must be held indefinitely unless they are subsequently registered, or an
exemption from such registration is available.  The undersigned further
understands that the Company is under no obligation to register the shares of
the VR Holdings Common Stock on his behalf or to assist him in complying with
any exemption from registration.

(g)

The shares of the VR Holdings Common Stock are being purchased solely for his
own account for investment and not for the account of any other person and not
for distribution, assignment, or resale to others and no other person has a
direct or indirect beneficial interest in the shares of the VR Holdings Common
Stock.  The undersigned or his advisers have such knowledge and experience in
financial, tax, and business matters to enable him to utilize the information,
made available to him in connection with the Distribution of the shares of the
VR Holdings Common Stock to evaluate the merits and risks of the prospective
investment and to make an informed investment decision with respect thereto.

(h)

The undersigned understands that his right to transfer the shares of the VR
Holdings Common Stock will be subject to restrictions against transfer unless
the transfer is not in violation of the Securities Act, and the securities laws
of any state (including investor suitability standards), and the Company
consents to such transfer.  The undersigned also acknowledges that he shall be
responsible for compliance with all conditions on transfer imposed by the
Securities Act, or the securities law of any state and for any expenses incurred
in connection with such a proposed transfer.

(i)

The undersigned, if a corporation, partnership, trust, or other entity, is
authorized and otherwise duly qualified to purchase and hold the shares of the
VR Holdings Common Stock, such entity has its principal place of business as set
forth on the signature page hereof, and such entity has not been formed for the
specific purpose of acquiring the shares of the VR Holdings Common Stock.

2

 

(j)

All information which the undersigned has provided to the Company concerning his
personal situation, his financial position, and his knowledge of financial and
business matters, or, in the case of a corporation, partnership, trust or other
entity, the knowledge of financial and business matters of the person making the
investment decision on behalf of such entity, is correct and complete as of the
date set forth at the end hereof, and if there should be any adverse change in
such information prior to his acceptance of the shares of the VR Holdings Common
Stock pursuant to the Separation Agreement, he will immediately provide the
Company with such information.

(k)

The undersigned, if he is an individual, is a citizen of the United States of
America, and is at least 21 years of age.

(l)

Compliance with Regulation D.  Pursuant to Regulation D under the Securities
Act, the undersigned understands and agrees that the following restrictions and
limitations are applicable to his purchase, resales, hypothecations or other
transfers of the shares of the VR Holdings Common Stock:

(i)

The undersigned agrees that the shares of the VR Holdings Common Stock shall not
be sold, pledged, hypothecated or otherwise transferred unless the shares of the
VR Holdings Common Stock are registered under the Securities Act, and the
securities laws of any state, or are exempt therefrom;

(ii)

A legend in substantially the following form has been or will be placed on any
certificate(s) or other document(s) evidencing the shares of the VR Holdings
Common Stock:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAW OF ANY STATE.  WITHOUT SUCH REGISTRATION, SUCH
SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO
THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF
1933, AS AMENDED, THE SECURITIES LAW OF ANY STATE, OR ANY RULE OR REGULATION
PROMULGATED THEREUNDER.

(iii)

Stop transfer instructions to the transfer agent of the shares of the VR
Holdings Common Stock have been or will be placed with respect to the shares of
the VR Holdings Common Stock so as to restrict the resale, pledge, hypothecation
or other transfer thereof, subject to the further items hereof, including the
provisions of the legend set forth in subparagraph (ii) above;

(iv)

The legend and stop transfer instructions described in subparagraphs (ii) and
(iii) above will be placed with respect to any new certificate(s) or other
document(s) issued upon presentment by the undersigned of certificate(s) or
other document(s) for transfer; and

(v)

The undersigned acknowledges that he will be responsible for compliance with all
conditions on transfer imposed by any federal or state securities statute and
securities law administrator and for any expenses incurred by the Company for
legal or accounting services in connection with reviewing such a proposed
transfer and/or issuing opinions in connection therewith.

3

(m)

The undersigned acknowledges that _________________________________ (complete if
applicable) has acted as his “Purchaser Representative” as defined in Regulation
D promulgated under the Securities Act, and (i) that he can bear the economic
risk of this investment; (ii) he has relied upon the advice of such Purchaser
Representative as to the merits of an investment in the Company and the
suitability of such investment for the undersigned; and (iii) such Purchaser
Representative has confirmed to him, in writing, any past, present or future
material relationship, actual or contemplated, between such Purchaser
Representative or its Affiliates and the Company, or its Affiliates.

(n)

The undersigned understands that neither the Securities and Exchange Commission
nor the securities commission of any state has made any finding or determination
relating to the fairness for public investment in the shares of the VR Holdings
Common Stock and that the Securities and Exchange Commission as well as the
securities commission of any state will not recommend or endorse any offering of
securities.

(o)

The undersigned understands that:

(i)

No assurances are or have been made regarding any economic advantages (including
tax) which may inure to the benefit of the undersigned;

(ii)

No assurances are or have been made concerning the distribution of profits to
the Company’s investors; and

(iii)

He is aware that this agreement is independent of any other agreement to accept
the shares of the VR Holdings Common Stock, pursuant to the Separation
Agreement.

(p)

The undersigned acknowledges and is aware that it never has been represented,
guaranteed, or warranted to him by the Company, its directors, officers, agents
or employees, or any other person, expressly or by implication, as to any of the
following:

(i)

The approximate or exact length of time that he will be required to remain as an
owner of his shares of the VR Holdings Common Stock;

(ii)

The percentage of profit and/or amount of or type of consideration, profit or
loss to be realized, if any, as a result of this investment; or

(iii)

That the limited past performance or experience on the part of the Company, or
any future projections will in any way indicate the predictable results of the
ownership of the shares of the VR Holdings Common Stock or of the overall
financial performance of the Company.

(q)

The undersigned acknowledges that the Company has made available to him or his
Purchaser Representative, if any, or other personal advisers the opportunity to
obtain additional information to verify the accuracy of the information
furnished to him and to evaluate the merits and risks of this investment.

(r)

The undersigned confirms that he has consulted with his Purchaser
Representative, if any, or other personal advisers and that said Purchaser
Representative or other advisers have analyzed the information furnished to him
and the documents relating thereto on his behalf and have advised him of the
business and financial aspects and consequences of and liabilities associated
with his investment in the shares of the VR Holdings Common Stock.  The
undersigned represents that he has made other risk capital investments or other
investments of a speculative nature, and by reason of his business and financial
experience and of the business and financial experience of those persons he has
retained to advise him with respect to investments of this nature.  In reaching
the conclusion that he desires to acquire the shares of the VR Holdings Common
Stock, the undersigned has carefully evaluated his financial resources and
investments and acknowledges that he is able to bear the economic risks of this
investment.

4

(s)

The undersigned acknowledges that all information made available to him and/or
his Purchaser Representative, if any, and/or personal advisers in connection
with his investment in the shares of the VR Holdings Common Stock, including the
information furnished to him is and shall remain confidential in all respects
and may not be reproduced, distributed or used for any other purpose without the
prior written consent of the Company.

4.

Indemnification.  The undersigned agrees to indemnify and hold harmless the
Company and its Affiliates from and against all damages, losses, costs, and
expenses (including reasonable attorneys’ fees) which they may incur by reason
of the failure of the undersigned to fulfill any of the terms or conditions of
this Distribution Agreement, or by reason of any breach of the representations
and warranties made by the undersigned herein, or in any document provided by
the undersigned to the Company.

5.

Limitation on Transfer of the shares of the VR Holdings Common Stock.  The
undersigned acknowledges that he is aware that there are substantial
restrictions on the transferability of the shares of the VR Holdings Common
Stock.  Since the shares of the VR Holdings Common Stock will not be, and since
the undersigned has no right to require that they be, registered under the
Securities Act, or the securities laws of any state, the shares of the VR
Holdings Common Stock may not be, and the undersigned agrees that they shall not
be, sold or transferred except pursuant to an effective registration statement
or an exemption from such registration statement under said statutes.  The
undersigned also acknowledges that he will be responsible for compliance with
all conditions on transfer imposed by any federal or state securities statute
and securities law administrator and for any expenses incurred by the Company
for legal or accounting services in connection with reviewing such a proposed
transfer and/or issuing opinions in connection therewith.

6.

Survival.  The foregoing representations, warranties and undertakings are made
with the intent that they may be relied upon in determining the undersigned’s
suitability as an investor in the Company and the undersigned hereby agrees that
such representations and warranties shall survive his acceptance of the shares
of the VR Holdings Common Stock.  The undersigned hereby acknowledges and agrees
that he is not entitled to cancel, terminate or revoke this Distribution
Agreement, or any agreements hereunder, and that this Distribution Agreement and
such agreements shall survive (a) changes in the transactions, documents, and
instruments previously furnished to the undersigned which are not materially
adverse, and (b) the undersigned’s death or disability.

7.

Notices.  All notices or other communications given or made hereunder shall be
in writing and shall be delivered or mailed by registered or certified mail,
return receipt requested, postage prepaid, to the undersigned or to the Company
at the respective addresses set forth herein.

8.

Miscellaneous.

(a)

The undersigned agrees not to transfer or assign this Distribution Agreement, or
any of the undersigned’s interest herein, and further agrees that the transfer
or assignment of the shares of the VR Holdings Common Stock shall be made only
in accordance with all applicable laws.

(b)

The undersigned agrees that the undersigned may not cancel, terminate, or revoke
this Distribution Agreement or any agreement of the undersigned made hereunder
and that this Distribution Agreement shall survive the death or disability of
the undersigned and shall be binding upon the undersigned’s heirs, executors,
administrators, successors, and assigns.

(c)

Notwithstanding any of the representations, warranties, acknowledgments, or
agreements made herein by the undersigned, the undersigned does not thereby or
in any other manner waive any rights granted to the undersigned under federal or
state securities laws.

(d)

Words of any gender used in this Distribution Agreement shall be held and
construed to include any other gender, and words in the singular number shall be
held to include the plural, and vice versa, unless the context requires
otherwise.  In addition, the pronouns used in this Distribution Agreement shall
be understood and construed to apply whether the party referred to is an
individual, partnership, joint venture, corporation or an individual or
individuals doing business under a firm or trade name, and the masculine,
feminine and neuter pronouns shall each include the other and may be used
interchangeably with the same meaning.

 

5

 

 

(e)

This Distribution Agreement constitutes the entire understanding among the
parties hereto with respect to the subject matter hereof and may be amended only
by a writing executed by all parties.

(f)

Notwithstanding anything herein contained to the contrary, in the event of any
conflict between the terms of this Distribution Agreement or the Separation
Agreement, the terms of the Separation Agreement shall control.

(g)

This Distribution Agreement shall be enforced, governed, and construed in all
respects in accordance with the laws of the State of Texas and all obligations
hereunder shall be deemed performable in Houston, Harris County, Texas.

(h)

Within 10 days after receipt of a written request from the Company, the
undersigned agrees to provide such information and to execute and deliver such
documents as reasonably may be necessary to comply with any and all laws and
ordinances to which the Company is subject.

IN WITNESS WHEREOF, I have executed this Distribution Agreement as of the 24th
day of September, 2012.

(Signature)

(Print or Type Name)

Social Security Number

Address

Number of shares of the VR Holdings Common Stock received

Accepted this 24th day of September, 2012.

VR HOLDINGS, INC.

By

    John E. Baker, Chief Executive Officer

6

 

Attachment 4(e)
Assumption and Novation Agreement

ASSUMPTION AND NOVATION AGREEMENT

THIS ASSUMPTION AND NOVATION AGREEMENT is made by and between VR HOLDINGS, INC.,
a Delaware corporation (“VR Holdings”), LITIGATION DYNAMICS, INC. a Texas
corporation (“LDI”), and STRUCTURED FINANCIAL SERVICE, LLC, a Michigan limited
liability company (“Structured Financial Service”), who agree as follows:

WHEREAS, on September , 2012, VR Holdings, LDI, J. Michael Moore, Zane Russell,
CapNet Securities Corporation, a Texas corporation, John E. Baker, Deohge Corp.,
a Maryland corporation, Pamela Lapides, The Cancer Foundation, Inc., a Maryland
corporation, John Foster Woods, and Barry L. Dahne executed that certain
Separation Agreement (the “Separation Agreement”); and

WHEREAS, any capitalized terms used herein shall have the same meaning as used
in the Separation Agreement; and

WHEREAS, on May 23, 2012, VR Holdings executed and delivered to Structured
Financial Service a promissory note in the amount of $50,000.00 more fully
described in Exhibit A attached hereto (the “Structured Financial Service
Note”); and

WHEREAS, pursuant to Paragraph 4(e) of the Separation Agreement, LDI agreed to
assume and agree to pay the Structured Financial Service Note and to secure from
Structured Financial Service a release and novation with respect to the
Structured Financial Service Note;

NOW, THEREFORE, in consideration of the foregoing and the following mutual
covenants and agreements, the Parties agree as follows:

1.

Assumption.  LDI hereby agrees to assume, from and after the date of the
Separation Agreement, all of VR Holdings’ rights, duties and obligations in, to
and under the Structured Financial Service Note.  Upon such assumption, VR
Holdings shall be released from all rights, duties and obligations with respect
to the Structured Financial Service Note, and LDI agrees to reimburse VR
Holdings for and hold VR Holdings harmless against any obligation to perform any
of the assigned duties and obligations under the Structured Financial Service
Note.

2.

Novation.  VR Holdings, LDI and Structured Financial Service hereby agree that
this Agreement shall constitute a novation of the obligations of VR Holdings
under the Structured Financial Service Note.  Accordingly, all of the rights,
duties and obligations of VR Holdings under the Structured Financial Service
Note are hereby extinguished.  Structured Financial Service recognizes LDI as VR
Holdings’ successor in interest in and to all of VR Holdings’ rights, duties and
obligations in, to and under the Structured Financial Service Note.

3.

Other Actions.  The Parties hereto agree that they will take those actions
reasonably necessary to carry out the matters contemplated by this Agreement or
any of its provisions.

4.

Indemnification by LDI.  LDI, individually and for its assigns, predecessors,
successors, joint venturers, personal representatives, stockholders, officers,
directors, employees, underwriters, attorneys, and trustees, and any other
Person at interest therewith, shall hold harmless and indemnify VR Holdings, its
stockholders, officers, directors, employees, underwriters, attorneys, and
trustees, and any other Person at interest therewith, from and against any and
all claims, demands, debts, expenses, including court costs or attorney’s fees,
dues, liens liabilities, cause or causes of action, whether statutory, in
contract, express or implied, either at law or in equity, including quantum
meruit, or in tort, as well as any other kind or character of action with
respect to the Structured Financial Service Note now held, owned or possessed by
anyone in whole or in part, or which anyone may claim to hold or which anyone
hereafter may claim to hold, for, on account of, or growing out of, related to
or concerning, whether directly or indirectly, proximately or remotely, the
Structured Financial Service Note.

1

 

5.

Mediation and Arbitration.  All disputes arising or related to this Agreement
must exclusively be resolved first by mediation with a mediator selected by the
Parties, with such mediation to be held in Houston, Texas.  If such mediation
fails, then any such dispute shall be resolved by binding arbitration under the
Commercial Arbitration Rules of the American Arbitration Association in effect
at the time the arbitration proceeding commences, except that (a) Texas law and
the Federal Arbitration Act must govern construction and effect, (b) the locale
of any arbitration must be in Houston, Texas, and (c) the arbitrator must with
the award provide written findings of fact and conclusions of law.  Any Party
may seek from a court of competent jurisdiction any provisional remedy that may
be necessary to protect its rights or assets pending the selection of the
arbitrator or the arbitrator’s determination of the merits of the controversy.
 The exercise of such arbitration rights by any Party will not preclude the
exercise of any self-help remedies (including without limitation, setoff rights)
or the exercise of any non-judicial foreclosure rights.  An arbitration award
may be entered in any court having jurisdiction.

6.

Attorneys’ Fees.  In the event that it should become necessary for any Party
entitled hereunder to bring suit against any other Party to this Agreement for a
breach of this Agreement, the Parties hereby covenant and agree that the Party
who is found to be in breach of this Agreement shall also be liable for all
reasonable attorneys’ fees and costs of court incurred by the other Parties.
 Provided, however, in the event that there has been no breach of this
Agreement, whether or not the transactions contemplated hereby are consummated,
each Party shall bear its own costs and expenses.

7.

Benefit.  All the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the Parties hereto, and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns.

8.

Notices.  All notices, requests, demands, and other communications hereunder
shall be in writing and delivered personally or sent by registered or certified
United States mail, return receipt requested with postage prepaid, or by
telecopy or e-mail, if to VR Holdings, addressed to Mr. John E. Baker at 1615
Chester Road, Chester, Maryland 21619, telephone (443) 519-0129, telecopier
(239) 384-9437, and e-mail john.baker@inwaretechnologies.com; and if to LDI,
addressed to Mr. Zane Russell at 925 South Mason, Suite 375, Katy, Texas 77450,
telephone (713) 893-1821, and email zrussell@litdyn.com; and if to the
Structured Financial Service, addressed to Mr. Ron Peoples at 900 South
Wilmington Street, Raleigh, North Carolina 27601, telephone (919) 832-8887, and
email rtp246@aol.com.  Any Party hereto may change its address upon 10 days’
written notice to any other Party hereto.

9.

Construction.  Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words in the singular number shall be
held to include the plural, and vice versa, unless the context requires
otherwise.

10.

Waiver.  No course of dealing on the part of any Party hereto or its agents, or
any failure or delay by any such Party with respect to exercising any right,
power or privilege of such Party under this Agreement or any instrument referred
to herein shall operate as a waiver thereof, and any single or partial exercise
of any such right, power or privilege shall not preclude any later exercise
thereof or any exercise of any other right, power or privilege hereunder or
thereunder.

11.

Cumulative Rights.  The rights and remedies of any Party under this Agreement
and the instruments executed or to be executed in connection herewith, or any of
them, shall be cumulative and the exercise or partial exercise of any such right
or remedy shall not preclude the exercise of any other right or remedy.

12.

Invalidity.  In the event any one or more of the provisions contained in this
Agreement or in any instrument referred to herein or executed in connection
herewith shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect the other provisions of this Agreement or any such other instrument.

13.

Headings.  The headings used in this Agreement are for convenience and reference
only and in no way define, limit, amplify or describe the scope or intent of
this Agreement, and do not affect or constitute a part of this Agreement.

2

14.

No Third-Party Beneficiary.  Any agreement to pay an amount and any assumption
of liability contained in this Agreement, express or implied, shall be only for
the benefit of the Parties hereto and their respective successors and assigns
(as herein expressly permitted), and such agreements and assumptions shall not
inure to the benefit of the obligees or any other Party, whomsoever, it being
the intention of the Parties hereto that no one shall be or be deemed to be a
third-Party beneficiary of this Agreement.

15.

Time of the Essence.  Time is of the essence of this Agreement.

16.

Incorporation by Reference.  All agreements, exhibits, attachments, and
schedules referred to or included herein constitute integral parts to this
Agreement and are incorporated into this Agreement by this reference.

17.

Multiple Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  A facsimile transmission
or PDF copy of this signed Agreement shall be legal and binding on all Parties
hereto.

18.

Law Governing; Jurisdiction.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, without regard to any
conflicts of laws provisions thereof.  Each Party hereby irrevocably submits to
the personal jurisdiction of the United States District Court located in Harris
County, Texas, as well as of the Courts of the State of Texas in Harris County,
Texas over any suit, action or proceeding arising out of or relating to this
Agreement.  Each Party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such mediation, arbitration, suit, action or proceeding
brought in any such county and any claim that any such mediation, arbitration,
suit, action or proceeding brought in such county has been brought in an
inconvenient forum.

19.

Entire Agreement.  This instrument and the attachments hereto contain the entire
understanding of the Parties and may not be changed orally, but only by an
instrument in writing signed by the Party against whom enforcement of any
waiver, change, modification, extension, or discharge is sought.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of September 24,
2012.

VR HOLDINGS, INC.

By

    John E. Baker, Chief Executive Officer

LITIGATION DYNAMICS, INC.

By

    Zane Russell, Chief Executive Officer

3

STRUCTURED FINANCIAL SERVICE, LLC

By

    Ron Peoples, Chief Executive Officer

 

Attachment:

 

 

Exhibit A

Structured Financial Service Note

Exhibit A
Structured Financial Service Note

 

VR HOLDINGS, INC.

PROMISSORY NOTE

Chester, Maryland

Issue Date:  May 23, 2012

$50,000.00

FOR VALUE RECEIVED, the undersigned, VR Holdings, Inc., a Delaware corporation,
its successors and assigns (“VRH”), hereby promises to pay to the order of
Structured Financial Service, LLC, a Michigan limited liability company, with
a principal business address of 900 South Wilmington Street, Raleigh, NC 27601
or registered assigns (the “Holder”), the sum of Fifty Thousand and 00/100
Dollars ($50,000.00), together with interest thereon, in lawful money of the
United States, in accordance with the terms hereof.

1.

Interest.  The principal amount outstanding from time to time under this Note
shall accrue interest at a rate of 10% per annum from the date hereof until paid
(not compounded).

In no event shall the amount of interest due or payable hereunder exceed the
maximum rate of interest allowed by applicable law, and in the event any such
payment is inadvertently paid by VRH or inadvertently received by the Holder or
other holder hereof, then such excess sum shall be credited as a payment of
principal, unless VRH shall notify the Holder or other holder in writing that
VRH elects to have such excess sum returned to it forthwith.  It is the express
intent hereof that VRH not pay and the Holder or other holder not receive,
directly or indirectly, in any manner whatsoever, interest in excess of that
which may be lawfully paid by VRH under applicable law.

2.

Payment.  Principal and interest shall be paid as follows:

(a)

Interest shall be payable quarterly on the August 23, 2013, November 23, 2012,
February 23, 2013 and May 23, 2013.

(b)

Principal shall be paid as follows.  Within five (5) days of VRH’s receipt of
proceeds from the sale of its common stock through subscription agreements, VRH
shall pay Holder ten percent (10%) of the net proceeds received by VRH from the
sale of its common stock.  The term “net proceeds” shall mean the gross proceeds
received by VRH from the sale of its common stock, less any commissions paid by
VRH in connection with the sale of such common stock.  Any principal outstanding
as of the maturity date shall be paid in full on the maturity date.

Payments of the principal of and interest on this Note will be made to the
Holder at the address specified above or to such other address as the Holder may
designate in writing to VRH in United States dollars.

3.

Maturity.  The outstanding principal and interest due on this Note shall be due
and payable in full on May 23, 2013 (the “Maturity Date”).  

 

-1-

4.

Prepayment.  This Note may be prepaid, in whole or in part, at any time and from
time to time without penalty or premium.  Any such prepayments shall be applied
first to the payment of any costs of collection that may be due hereunder, then
to the payment of accrued interest, and the balance shall be applied to
principal.

5.

Events of Default and Acceleration.  Any part or all of the amount due to the
Holder hereunder, at the option of the Holder shall become immediately due and
payable without notice or demand (which are expressly waived by VRH) upon the
occurrence of any of the following events of default:

(a)

any default in the payment of (1) the principal amount hereunder when due, or
(2) interest on this Note, as and when the same shall become due and payable
(whether on the Maturity Date or by acceleration or otherwise) that is not
corrected within 3 business days; or

(b)

VRH shall fail to observe or perform any other material covenant or agreement
contained in this Note, which failure is not cured, if possible to cure, within
30 days after receipt of notice thereof; or

(c)

any merger, consolidation, reorganization or conversion of VRH, without the
prior written consent of the Agent; or

(d)

VRH shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property or assets, (ii) make a general assignment
for the benefit of its creditors, (iii) commence a voluntary case under the
United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic), (iv) file a petition
seeking to take advantage of any bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting the enforcement of creditors’
rights generally, (v) acquiesce in writing to any petition filed against it in
an involuntary case under United States Bankruptcy Code (as now or hereafter in
effect) or under the comparable laws of any jurisdiction (foreign or domestic),
(vi) issue a notice of bankruptcy or winding down of its operations or issue a
press release regarding same, or (vii) take any action under the laws of any
jurisdiction (foreign or domestic) analogous to any of the foregoing; or

(e)

a proceeding or case shall be commenced in respect of VRH, without its
application or consent, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, moratorium, dissolution, winding up, or composition
or readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of it or of all or any substantial part of its
assets in connection with the liquidation or dissolution of VRH or (iii) similar
relief in respect of it under any law providing for the relief of debtors, and
such proceeding or case described in clause (i), (ii) or (iii) shall continue
undismissed, or unstayed and in effect, for a period of sixty (60) days or any
order for relief shall be entered in an involuntary case under United States
Bankruptcy Code (as now or hereafter in effect) or under the comparable laws of
any jurisdiction (foreign or domestic) against VRH or action under the laws of
any jurisdiction (foreign or domestic) analogous to any of the foregoing shall
be taken with respect to VRH and shall continue undismissed, or unstayed and in
effect for a period of sixty (60) days.

- 2 -

 

6.

Remedies.  The remedies of Holder, or other holder, as provided herein and in
any instruments granting security for this Note, shall be cumulative and
concurrent and may be pursued singly, successively or together, at the sole
discretion of Holder, or other holder, and may be exercised as often as occasion
therefor shall occur.  No act, delay or omission by Holder or other holder in
exercising any right hereunder shall be deemed a waiver of such right or any
other remedy unless such waiver is in writing and signed by Holder or other
holder and, then, only to the extent specifically set forth in writing.  A
waiver on any one occasion shall not be construed as a bar to or waiver of any
such right or remedy on any future occasion.  The acceptance by Holder or other
holder of any payment hereunder which is less than payment in full of all
amounts due and payable hereunder on the date of such payment shall not
constitute a waiver by Holder or other holder of its right to exercise the
foregoing option at that time or at any subsequent time or nullify any prior
exercise of said option.

If this Note is not paid when due, regardless of how such maturity may be
brought about, or is collected or attempted to be collected by the initiation or
prosecution of any suit, or any probate or bankruptcy court proceeding or by any
other judicial proceeding, or is placed in the hands of an attorney for
collection, then VRH shall pay in addition to all other amounts owing hereunder,
all court costs and reasonable attorney’s fees incurred by the holder in
connection therewith.

7.

Waiver and Consent.  VRH and all sureties, endorsers and guarantors of this Note
hereby waive presentment for payment, notice of nonpayment, protest, notice of
protest and all other notices, filing of suit and diligence in collecting the
amounts due under this Note and agree that the holder shall not be required
first to initiate any suit or exhaust its remedies against the undersigned or
any other person or parties in order to enforce payment of this Note, and
consent to any extension, rearrangement, renewal or postponement of the time for
payment of this Note, and to any other indulgence with respect thereto without
notice, consent or consideration to any of them.  VRH further expressly consents
to the release of any party liable for the obligation secured by this Note, the
release of any security which may have been or may be given for this Note, the
acceptance of any other security therefor, or any other indulgence or
forbearance whatsoever, all without notice to any party and without affecting
the liability of the undersigned and any endorsers hereof, and without any
notice the Holder or other holder hereof may take security herefor, or alone, or
together with any present or future owner or owners of any security given or to
be given for this Note, may from time to time extend, renew, or otherwise modify
the date or dates or amount or amounts of payment above recited; or, the Holder
or other holder hereof may, from time to time, release any part or parts of any
property and interest covered by any instruments creating such security
interest, with or without consideration, and that in any such case each maker,
co-maker, endorser, surety and guarantor shall continue liable to pay the unpaid
balance of the indebtedness evidenced hereby as so additionally secured,
extended, renewed or modified, and notwithstanding any such release.

8.

Governing Law; Consent to Jurisdiction.  This Note shall be governed by and
construed in accordance with the laws of the State of Michigan.  Any legal
action, suit or proceeding arising out of or relating to this Agreement may be
instituted in any federal or state court in the State of North Carolina and VRH
and the Holder irrevocably submit to the jurisdiction of such court.

- 3 -

 

9.

Miscellaneous Provisions.  This Note shall be binding on the successors and
assigns of VRH and inure to the benefit of the Holder, its successors, endorsees
and assigns.  If any terms or provisions of this Note are deemed invalid, the
validity of all other terms and provisions hereof shall in no way be affected
thereby.  This Note may not be changed orally, but only by an agreement in
writing and signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.

IN WITNESS WHEREOF, VRH has caused this Note to be signed in its name by its
authorized officer as of the date written above.

VR HOLDINGS, INC.

By:

Its:

 

- 4 -

 

 

 

SCHEDULE I

NOTE CONVERSION FORM

To be signed only upon conversion of the Note.

The undersigned, the holder of the within Note, hereby irrevocably elects to
convert [$________ of] such Note for, and to purchase thereby, __________ Units
of _________ and exchanges the within Note in payment thereof and requests that
such Units be issued and delivered to,
___________________________________________, the address for which is set forth
below the signature of the undersigned.

 

Dated: ______________________

__________________________________________

(Signature)

__________________________________________

__________________________________________

__________________________________________

(Address)

__________________________________________

(Taxpayer ID Number)

- 5 -

 

Attachment 4(i)
ILS Resale Agreement

NON-EXCLUSIVE SOFTWARE RESELLER AGREEMENT

This Non-Exclusive Software Reseller Agreement (this "Agreement") is entered
into as of the date of approval Into the Innovative Litigation Services Reseller
Program (the "Effective Date"), by and between Innovative Litigation Services.
LLC., a Texas corporation having a primary place of business at 2540 King Arthur
Blvd. Suite 208, Lewisville, TX 75056 ("ILS ") and Litigation Dynamics, Inc.
("Reseller") having a primary place of business at 1572] Park Row, Suite 100,
Houston, TX 77084.

Background

A.

Innovative Litigation Services has developed and desires to advertise, promote,
market and distribute the company's services and products.

B.

Reseller desires to obtain the right to act as an independent Reseller of the
Products, with the non-exclusive right to market, promote and resell the
Products.

Agreement

Innovative Litigation Services and Reseller agree as follows:

APPOINTMENT AS A RESELLER. On the terms and subject to the conditions set forth
herein, Innovative Litigation Services appoints Reseller as an independent,
non-exclusive authorized Reseller of the Products in the geographic area
identified in the country entered into the online application hereto ("Market"),
and Reseller hereby accepts such appointment. Reseller may advertise, promote
and resell the Products solely to third party End Users within the Market. For
purposes of this Agreement, the teen "End User" means a person or entity that
desires to use or acquire the Products for its own use, rather than for resale
or distribution. Reseller may not authorize or appoint any dealers,
sub-resellers, agents, representatives, subcontractors, or other third parties
to advertise, promote, resell, or distribute the Products. All rights not
specifically granted by Innovative Litigation Services hereunder are reserved by
ILS. Without limiting the generality of the foregoing. Innovative Litigation
Services reserves the right to advertise, promote, market and distribute the
Products, and to appoint third parties to advertise, promote, market and
distribute the Products, worldwide, including in the Market. Further, Innovative
Litigation Services reserves the right, in its sole discretion, at any time and
from time to time, to modify any or all of the Products and Services it offers,
or to discontinue the service, support of publication, distribution, sale or
licensing of any or all of the Products without liability of any kind.

2.

CONSIDERATION. ORDERS AND DELIVERY. Reseller's initial price ("Price")for
Products shall be as set forth in a subsequent quarterly product and pricing
tables made available to reseller from OA w.ilstech.eom:rcscilerz,) website.
Reseller acknowledges that Innovative Litigation Services has the right, at any
time between quarterly updates, to modify any or all of the product and service
Prices. Innovative Litigation Services shall ship Products upon acceptance of
Reseller's written order and Reseller's payment in full, except as otherwise
mutually agreed in writing, for the Products. Reseller shall pay for the
Products in U.S. dollars in immediately available funds using a Visa,
MasterCard, or American Express Credit Card, or by wire transfer, or in such
other manner as Innovative Litigation Services may approve. Orders shall be
shipped F.O.B. ILS 's warehouse. Except as otherwise mutually agreed in writing,
Reseller shall be responsible for all costs associated with its performance of
this Agreement. All freight, insurance, duty and taxes applicable to Reseller's
purchase and sale of Products shall be paid by Reseller. Reseller will indemnify
and hold Innovative Litigation Services harmless from any obligation to pay any
governmental entity any employer statutory taxes, withholding taxes, social
security taxes or other taxes, levies or duties in connection with Reseller's
performance under this Agreement, and from any and all damages, losses.
liabilities and expenses (including reasonable attorneys' fees and costs of
litigation) arising out of or resulting therefrom.

3. MARKETING AND PROMOTION OF PRODUCTS

3.1

Promotion. Reseller shall use its best efforts to market and promote Products to
End Users in the Market, including by: (a) attendance by Reseller at trade shows
at which Reseller promotes the Products, (b) listing the Products in Reseller's
product lists and Reseller's other marketing materials, (c) advertising the
Products in trade journals, magazines, and other appropriate publications, and
(d) at ILS 's request, translating and distributing ILS 's press releases and
other publicity and sales materials in the Market.

3.2

Marketing Practices. Reseller will at all times perform hereunder in an ethical
and professional manner and in accordance with this Agreement and any guidelines
issued by ILS. Reseller will: (a) conduct business in a manner that reflects
favorably at all times on the Products and the good name, goodwill and
reputation of ILS ; (b) avoid deceptive, misleading or unethical practices that
are or might be detrimental to ILS , the Products or the public, including but
not limited to disparagement of Innovative Litigation Services or the Products;
(c) make no false or misleading representation with respect to Innovative
Litigation Services or the Products; and (d) make no representations with
respect to Innovative Litigation Services or the Products that are inconsistent
with ILS 's end user license agreement for the Products, promotional materials
and other literature distributed by ILS , including all liability limitations
and disclaimers contained in such materials.

3.3

Promotional Materials. Reseller consents to the listing of its business name.
address.phone number and web site addresses in such Innovative Litigation
Services advertising and promotional materials as Innovative Litigation Services
may determine in its sole discretion, including product literature and ILS 's
web sites. During the term of this Agreement, Innovative Litigation Services may
provide to Reseller promotional materials with respect to Products. Reseller may
not use the promotional materials for any purpose other than advertising and
promoting the Products to End Users in the Market. Notwithstanding anything to
the contrary herein, Reseller may not distribute any Reseller- created
promotional materials with respect to Innovative Litigation Services or the
Products without ILS 's prior written approval of such materials.

3.4

Permits. Licenses and Compliance with Laws. Reseller will, at its sole cost and
expense, obtain all permits and licenses necessary in connection with its
performance of this Agreement, and will comply with all applicable laws, rules
and regulations in the performance of this Agreement. Without limiting the
generality of the foregoing, Reseller will comply with all applicable export
laws. Without limiting the foregoing, Reseller agrees that it will not knowingly
export or re-export any Work Product or Products to any Country unless prior
written consent is given.

3.5

Privacy/Data Collection. Reseller will at all times during the term of this
Agreement maintain appropriate technical and organizational measures to protect
any End User data that it collects, accesses or processes in connection with
this Agreement against unauthorized or unlawful use, disclosure, processing or
alteration. Reseller will act only on ILS 's instructions in relation to the
collection, use, disclosure and processing of any such End User data, but in all
instances in accordance with all applicable laws, rules and regulations.

4.

RESALE OF PRODUCTS. Innovative Litigation Services shall provide copies of its
end user license agreements to Reseller upon written request. Reseller shall
promptly review such agreements and advise Innovative Litigation Services as to
what revisions, irany, should be made to the end user license agreements for
resale in the Market to ensure that the agreements comply with requirements of
local law in the Market, and that Innovative Litigation Services has protection
concerning proprietary rights, warranty disclaimers and limitations of liability
under such local law that are as least as stringent as the protection provided
by U.S. federal law and the laws of the State of Texas. Reseller may charge End
Users for Products at prices determined in Reseller's sole discretion. Reseller
may distribute Products solely by sale of Packages. For purposes of this
Agreement, a "Package" means physical or electronic media containing a
particular Product, related user documentation, and software provider's end user
license agreement as it may be modified by Innovative Litigation Services for
use in the Market. The relationship between the End User and Innovative
Litigation Services shall be as specified in the applicable Innovative
Litigation Services end user license agreement. Notwithstanding the foregoing,
as between Innovative Litigation Services and Reseller, Reseller shall be solely
responsible for providing customer support to End Users in the Market. Reseller
will notify Innovative Litigation Services immediately in the event that it is
unable to respond effectively to any End User request.

5.

RESALE OF SERVICES. Innovative Litigation Services provides services directly to
end users. Reseller may participate in the sale of these services based on the
price schedules listed on the reseller website. These services may not be
branded as resellers own services and must be direct billed to end user
customers. Implementation of customers' requests shall be documented and
explained from Reseller directly with ILS Employees. ILS is not responsible for
interaction with end user clients unless specifically authorized by ILS.
Notwithstanding the foregoing, as between Innovative Litigation Services and
Reseller, Reseller shall be solely responsible for providing customer support to
End Users in the Market. Reseller will notify Innovative Litigation Services
immediately in the event that it is unable to respond effectively to any End
User request.

6.

OWNERSHIP. As between innovative Litigation Services and Reseller, all right.
title and interest in and to the Products and associated Innovative Litigation
Services promotional materials and documentation, including without limitation
all copyrights, patent rights, trademark and service mark rights, trade secret
rights and other intellectual property rights are and will remain the property
of ILS or their rightful providers, and such items may only be used by Reseller
as expressly permitted hereunder. Reseller shall not remove, alter or otherwise
modify any copyright, trademark or other notices of proprietary interest
contained in the Products, Innovative Litigation Services promotional materials
and/or documentation.

7.

CONFIDENTIAL INFORMATION

7.1

"Confidential Information" Defined. "Confidential Information" includes: (a) the
Products; (b) any personally identifiable data or information regarding any End
User; (c) any and all information disclosed by Innovative Litigation Services to
Reseller, in whatever format, that is either identified as or would reasonably
be understood to be confidential and/or proprietary; (d) any notes, extracts,
analyses or materials prepared by Reseller which are copies of or derivative
works of Confidential Information or from which Confidential Information can be
inferred or otherwise understood; and (e) the terms and conditions of this
Agreement. "Confidential Information" does not include information received from
Innovative Litigation Services that Reseller can clearly establish by written
evidence: (x) is or becomes known to Reseller from a third party without an
obligation to maintain its confidentiality; (y) is or becomes generally known to
the public through no act or omission of Reseller; or (z) is independently
developed by Reseller without the use of Confidential Information.

7.2

Reseller's Obligations. Reseller will make no use of Confidential Information
for any purpose except as expressly authorized by this Agreement. Except as
expressly provided in this Agreement, Reseller will not discloseConfidential
Information to any third party and will protect and treat all Confidential
Information with the same degree of care as it uses to protect its own
confidential information of like importance, but in no event with less than
reasonable care. Except as expressly provided in this Agreement, Reseller will
not use, make or have made any copies of Confidential Information, in whole or
in part, without the prior written authorization of 1LS. In the event that
Reseller is required to disclose Confidential Information pursuant to law.
Reseller will notify Innovative Litigation Services of the required disclosure
with sufficient time for Innovative Litigation Services to seek relief, will
cooperate with Innovative Litigation Services in taking appropriate protective
measures, and will make such disclosure in a fashion that maximizes protection
of the Confidential Information from further disclosure.

8.

DISCLAIMER OF WARRANTIES. EXCEPT FOR THE EXPRESS WARRANTIES, IF ANY, MADE TO THE
END USER IN THE APPLICABLE. INNOVATIVE LITIGATION SERVICES END USER AGREEMENTS,
INNOVATIVE LITIGATION SERVICESMAKES NO OTHER WARRANTIES RELATING TO THE
PRODUCTS, EXPRESS OR IMPLIED. INNOVATIVE LITIGATION SERVICESDISCLAIMS AND
EXCLUDES ANY AND ALL IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE AND
NON-INFRINGEMENT. NO PERSON IS AUTHORIZED TO MAKE ANY OTHER WARRANTY OR
REPRESENTATION CONCERNING THE PRODUCTS OR THE MEDIA ON WHICH PRODUCTS ARE
SUPPLIED. RESELLER WILL MAKE NO WARRANTY, EXPRESS OR IMPLIED, ON BEHALF OF ILS.

9.

LIMITATION OF LIABILITY. [LS 'S AGGREGATE LIABILITY TO RESELLER UNDER THIS
AGREEMENT, WHETHER FOR BREACH OR IN TORT, IS LIMITED TO THE PRICE PAID BY
RESELLER FOR THE COPY OF THE PRODUCT WHICH GIVES RISE TO THE CLAIM. IN NO EVENT
WILL INNOVATIVE LITIGATION SERVICES BE LIABLE FOR ANY INDIRECT, PUNITIVE,
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT
OF THIS AGREEMENT (INCLUDING LOSS OF BUSINESS, REVENUE, PROFITS, USE, DATA OR
OTHER ECONOMIC ADVANTAGE), HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF
LIABILITY, EVEN IF INNOVATIVE LITIGATION SERVICESHAS BEEN PREVIOUSLY ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES, AND EVEN IF ANY EXCLUSIVE REMEDY PROVIDED FOR
HEREIN FAILS OF ITS ESSENTIAL PURPOSE,

10.

INDEMNIFICATION BY RESELLER. Reseller will indemnify, defend and hold harmless
Innovative Litigation Services from and against any and all claims, damages and
expenses (including reasonable attorneys' fees and costs of litigation) by any
third party resulting from any acts or omissions of Reseller relating to its
activities in connection with this Agreement. Reseller's breach of this
Agreement, or Reseller's misrepresentations relating to ILS, the Services,
Products, or this Agreement, regardless of the form of action. Reseller will be
solely responsible for any claims, warranties or representations made by
Reseller or Reseller's representatives or agents which differ from the
warranties provided by Innovative Litigation Services in the applicable end user
license agreement.

INFRINGEMENT. Innovative Litigation Services agrees to defend or, at its option,
settle any claim or action against Reseller to the extent arising from a third
party claim that a permitted use of a Product by End Users infringes any U.S.
patent or copyright, provided Innovative Litigation Services has control of such
defense or settlement negotiations and Reseller gives Innovative Litigation
Services prompt notice of any such claim and provides reasonable assistance in
its defense. In the event of such a claim of infringement, ILS , at its option,
may provide Reseller with substitute Products reasonably satisfactory to
Reseller to replace those affected Products then in Reseller's inventory.
Innovative Litigation Services will not be liable under this Section if the
infringement arises out of Reseller's activities afterInnovative Litigation
Services has notified Reseller that innovative Litigation Services believes in
good faith that Reseller's activities will result in such infringement. The
foregoing states the entire liability of Innovative Litigation Services with
respect to infringement of intellectual property rights.

12.

INNOVATIVE LITIGATION SERVICESSUPPORT. Innovative Litigation Services shall
offer Reseller technical training for the Products from time to lime upon
reasonable request from Reseller at ILS 's then-current charges for such
training. All training will he at ILS 's offices unless ILS , in its sole
discretion, agrees to offer training at another location.

13.

INNOVATIVE LITIGATION SERVICESTRADEMARKS. "Innovative Litigation Services
Trademarks" means all names, marks, logos, designs. trade dress and other brand
designations used by Innovative Litigation Services in connection with its
products and services. In performing its obligations hereunder. Reseller may
refer to the Products by the associated Innovative Litigation Services
Trademarks, provided that such reference is not misleading and complies with any
guidelines issued by 1LS. Reseller is granted no right. title or license to, or
interest in. any Innovative Litigation Services Trademarks. Reseller
acknowledges and agrees that any use of the Innovative Litigation Services
Trademarks by Reseller will inure to the sole benefit of !LS . If Reseller
acquires any rights in any Innovative Litigation Services Trademarks by
operation of law or otherwise, it will immediately, at no cost or expense to
ILS. assign such rights to Innovative Litigation Services along with all
associated goodwill.

14.

RELATIONSHIP OF PARTIES. This Agreement does not constitute either party the
agent of the other, or create a partnership, joint venture or similar
relationship between the parties, and neither party will have the power to
obligate the other in any manner whatsoever. Reseller acknowledges and agrees
that its relationship with Innovative Litigation Services is that of an
independent contractor, and Reseller will not act in a manner that expresses or
implies a relationship other that that of an independent contractor. Innovative
Litigation Services and Resel ler acknowledge and agree that: (a) Reseller is
permitted to promote and sell products and services of companies other than ILS;
(b) Reseller is not required to promote Innovative Litigation Services products
or services exclusively; and (c) Reseller's decision to devote all or some of
its business efforts to the products or services of any particular company is
solely in the discretion of Reseller.

15.

Commissions: Agent shall be paid a 25% commission on all services and a 20%
commission on all software sales that are made by Agent during the term of this
agreement.

16.

TERM AND TERMINATION

14.1 Term. This Agreement shall be effective for a term of one year from the
Effective Date. It shall be automatically extended for further one-year terms
unless either party gives written notice to the other at least 60 days before
the expiration of the initial or any renewal term of the party's intent not to
renew.

 

14.2 Termination. Notwithstanding anything in this Agreement that may be
interpreted to the contrary, Innovative Litigation Services may terminate this
Agreement without cause and without liability upon 30 days' prior written notice
to Reseller. Either party may terminate this Agreement for any material breach
of the Agreement that is not cured to the non-breaching party's satisfaction
within 10 days of written notice that specifies the breach.

14.3

Effect of Termination. Upon termination of this Agreement, Reseller will cease
all advertising, marketing and resale of the Products. Termination of this
Agreement will not effect either party's rights or obligations with respect to
Products distributed by Reseller prior to the effective date of the termination.

14.4 No Liability for Termination. Neither party will be liable for any damages
arising out of the termination of this Agreement in accordance with this Section
14. Reseller acknowledges and agrees that Innovative Litigation Services is not
responsible for Reseller's dependence on revenues hereunder. and Reseller agrees
to release, hold harmless and indemnify Innovative Litigation Services from any
and all claims and liabilities relating to Reseller's revenues, financial
forecasts or economic value that may result from any termination by innovative
Litigation Services of this Agreement as permitted hereunder.

14.5

Survival. Expiration or termination of this Agreement will not relieve either
party from

its obligations arising hereunder prior to such expiration or termination.
Rights and obligations which by their nature should survive will remain in
effect after termination or expiration of this Agreement.

15.

ASSIGNMENT. Neither this Agreement nor any rights or obligations of Reseller
hereunder shall be assignable or transferable by Reseller. in whole or in part,
by operation of law or otherwise, without the prior written consent of ILS. Any
attempted assignment, subcontract or other transfer of this Agreement or any of
Reseller's rights or obligations hereunder will be void ab initio and will be
considered a material breach of this Agreement. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their permitted
successors and assigns.

16.

NOTICES. Any notices or other communications required or permitted hereunder
shall be in writing and personally delivered at the principal business addresses
designated at the beginning of this Agreement, or mailed by registered or
certified mail, return receipt requested, postage prepaid, at the address set
forth above, or to such other address or addresses as may be hereafter furnished
by one party to the other party in compliance with the terms hereof.
Notwithstanding the foregoing, Innovative Litigation Services may give notice of
changes in Prices, Service offerings, Product descriptions, order procedures,
delivery procedures and other routine events and procedures by way of printed
materials or newsletter.

17.

FORCE MAJEURE. Innovative Litigation Services shall not be liable for failure or
delay in performance of any of its obligations hereunder if such delay or
failure to perform is caused by circumstances beyond its control. Reseller shall
be required to accept any delayed shipment. lack of service, or delivery made
within a reasonable time.

18.

GOVERNING LAWS; ATTORNEYS' FEES. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Texas, U.S.A.
The parties agree that any legal action or proceeding with respect to this
Agreement may be initiated only in the federal or state courts located in the
State of Texas, County of Harris. By execution and delivery of this Agreement,
the parties submit to and accept with regard to any such action or preceding the
exclusive jurisdiction of such courts. If any legal action or proceeding is
initiated, the prevailing party shall be entitled to all attorney fees, court
costs, and expenses in addition to any other relief to which such prevailing
party may be entitled.

19.

EQUITABLE RELIEF. Reseller acknowledges that any breach or threatened breach of
this Agreement involving an unauthorized use of Confidential Information or
Innovative Litigation Services intellectual property will result in irreparable
harm to Innovative Litigation Services for which damages would not be an
adequate remedy, and therefore, in addition to its rights and remedies otherwise
available at law, Innovative Litigation Services will be entitled to seek
injunctive or other equitable relief, as appropriate, and Reseller hereby waives
the right to require Innovative Litigation Services to post a bond. If
Innovative Litigation Services seeks injunctive or other equitable relief in the
event of a breach or threatened breach of this Agreement by Reseller involving
an unauthorized use of Confidential Information or Innovative Litigation
Services intellectual property, Reseller agrees that it will not allege in any
such proceeding that ILS 's remedy at law is adequate. If Innovative Litigation
Services seeks any equitable remedies, it will not be precluded or prevented
from seeking remedies at law, nor will Innovative Litigation Services be deemed
to have made an election of remedies.

20.

ENTIRE AGREEMENT; WAIVER. This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes and terminates all other prior commitments, arrangements or
understandings, both oral and written, between the parties with respect thereto.
This Agreement may not be modified or amended except by an instrument in writing
executed by each of the parties. None of the provisions of this Agreement shall
be deemed to have been waived by any act or acquiescence on the part of either
party, their agents or employees, but may be waived only by an instrument in
writing signed by an officer of the waiving party. No waiver of any provision of
this Agreement on one occasion shall constitute a waiver of any other provision
or of the same provision on another occasion.

AGENT: Litigation Dynamics, Inc.

ILS Technologies, LLC

By:

Title:

Date:

By:

Title:

Date:

Attachment 7(i)
Resignation of J. Michael Moore

RESIGNATION

The undersigned, J. MICHAEL MOORE, do hereby immediately resign as a director of
VR HOLDINGS, INC., a Delaware corporation.

IN WITNESS WHEREOF, the undersigned has executed this resignation as of
September 24, 2012.

 

J. MICHAEL MOORE

Attachment 7(ii)
Resignation of Zane Russell

RESIGNATION

The undersigned, ZANE RUSSELL, do hereby immediately resign as a director of VR
HOLDINGS, INC., a Delaware corporation.

IN WITNESS WHEREOF, the undersigned has executed this resignation as of
September 24, 2012.

 

ZANE RUSSELL

Attachment 8
Resignation of John E. Baker

RESIGNATION

The undersigned, JOHN E. BAKER, do hereby immediately resign as a director of
LITIGATION DYNAMICS, INC., a Texas corporation.

IN WITNESS WHEREOF, the undersigned has executed this resignation as of
September 24, 2012.

 

JOHN E. BAKER

 

Schedule 2(b)(i)

Restated Certificate of Incorporation of LDI

 

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Schedule 2(b)(ii)

Amended and Restated Bylaws of LDI

 

BYLAWS OF

LITIGATION DYNAMICS, INC.

ARTICLE I

Offices

1.1

The registered office of LITIGATION DYNAMICS, INC. (the “Company”) shall be at
925 South Mason, Suite 375, Katy, Texas 77450.  The name of the registered agent
at such address is Zane Russell.

1.2

The Company also may have offices at such other places, both within and without
the State of Texas, as the Board of Directors may from time to time decide are
necessary or proper to the business of the Company.

ARTICLE II

Shareholders

2.1

All meetings of the shareholders for any purpose shall be held at such time and
place, within or without the State of Texas, as shall be stated in the notice of
the meeting or in a duly executed waiver of notice thereof.

2.2

Annual meetings of the shareholders, commencing with the year 2012, shall be
held at a time and on a day during the month of December to be selected by the
Board of Directors.  At the meeting, the shareholders shall elect a Board of
Directors and transact such other business as properly may be brought before the
meeting.

2.3

Special meetings of the shareholders may be called for any purpose by the
President, or at the request in writing of 50 percent of the Board of Directors,
or at the request in writing of holders of not less than 10 percent of all the
shares entitled to vote at the meeting.  A request directed to either the
President or the Secretary shall state the purposes of the proposed meeting and
business transacted at any special meeting of the shareholders shall be confined
to the purposes stated in the notice of the meeting.

2.4

At least 10 days before each meeting of shareholders, a complete list of the
shareholders entitled to vote at the meeting, arranged in alphabetical order,
with the address of each and the number of voting shares held by each, shall be
prepared by the officer or agent having charge of the stock transfer books.  For
a period of 10 days prior to the meeting, the list shall be kept on file at the
registered office of the Company and shall be subject to inspection by any
shareholder at any time during usual business hours.  The list also shall be
produced and kept open at the time and place of the meeting and shall be subject
to inspection by any shareholder during the whole time of the meeting.

2.5

Written notice stating the place, day and hour of the meeting and, in the case
of a special meeting, the purposes for which the meeting is called, shall be
delivered not less than 10 nor more than 50 days before the date of the meeting,
either personally or by mail, by or at the direction of the President, the
Secretary, or the officer or person calling the meeting, to each shareholder of
record entitled to vote at such meeting.  If mailed, such notice shall be deemed
to be delivered when deposited in the United States mail, postage prepaid,
addressed to the shareholder at his address as it appears on the stock transfer
books of the Company.

2.6

The holders of 51 percent of the shares issued and outstanding and entitled to
vote at such meeting, present in person or represented by proxy, shall be
requisite and shall constitute a quorum at all meetings of the shareholders for
the transaction of business, except as otherwise provided by statute or the
Articles of Incorporation or these Bylaws.  If a quorum is not present or
represented at any meeting of the shareholders, the shareholders entitled to
vote thereat, present in person or represented by proxy, shall have the power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum is present or represented.  At such adjourned
meeting at which a quorum is present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified.

 

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2.7

When a quorum is present at any meeting, the vote of the holders of 51 percent
of the shares having voting power, present in person or represented by proxy,
shall decide any question brought before such meeting, unless the question is
one upon which a different vote is required by law, by the Articles of
Incorporation or these Bylaws.  The shareholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough shares to leave less than a quorum.

2.8

Each outstanding share having voting power shall be entitled to one vote on each
matter submitted to a vote at a meeting of the shareholders.  A shareholder may
vote either in person or by proxy executed in writing by the shareholder or by
his duly authorized attorney in fact, but no proxy shall be valid after 11
months from the date of its execution, unless otherwise expressly provided in
the proxy.  Each proxy shall be revocable unless expressly provided therein to
be irrevocable, and in no event shall it remain irrevocable for a period of more
than 11 months.  Each proxy shall be filed with the Secretary of the Company
prior to or at the time of the meeting.  Any vote must be taken by written
ballot upon the oral request of any shareholder.

2.9

Any action required by statute to be taken at a meeting of the shareholders, or
any action which may be taken at a meeting of the shareholders, may be taken
without a meeting if a consent in writing, setting forth the action to be taken,
shall be signed by all of the shareholders entitled to vote with respect to the
subject matter thereof and such consent shall have the same force and effect as
a unanimous vote of the shareholders.  Any such signed consent, or a signed copy
thereof shall be placed in the minute book of the Company.

ARTICLE III

Directors

3.1

The business and affairs of the Company shall be managed by its Board of
Directors, which may exercise all powers of the Company and do all lawful acts
and things as are not by statute or by the Articles of Incorporation or by these
Bylaws directed or required to be exercised or done by the shareholders.

3.2

The number of directors which shall constitute the entire Board shall be
determined by the Board of Directors from time to time but at no time shall be
less than one.

3.3

Any vacancy occurring in the Board of Directors may be filled by the affirmative
vote of the remaining directors, although less than a quorum of the Board of
Directors.  A director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office.

3.4

Any director may be removed with or without cause at any special or annual
meeting of shareholders, by the affirmative vote of a majority of the number of
shares of the shareholders present in person or by proxy at such meeting and
entitled to vote for the election of such director, if notice of intention to
act upon such matter shall have been given in the notice calling such meeting.

3.5

Regular or special meetings of the Board of Directors may be held either within
or without the State of Texas.

3.6

The Chairman of the Board, if one be elected by the Board, shall preside at all
meetings of the Board of Directors and shall have such other powers and duties
as may from time to time be prescribed by the Board of Directors, upon written
direction given to him pursuant to resolution duly adopted by the Board of
Directors.

3.7

The first meeting of each newly elected Board of Directors shall be held at such
time and place as shall be fixed by the vote of the shareholders at the annual
meeting and no notice of such meeting shall be necessary to the newly elected
directors in order legally to constitute the meeting, provided a quorum shall be
present.  If the shareholders fail to fix the time and place of such first
meeting, it shall be held without notice immediately following the annual
meeting of the shareholders, and at such time and place, unless by unanimous
consent of the director then elected and serving, such time or place shall be
changed.

3.8

Regular meetings of the Board of Directors may be held without notice at such
time and place as shall from time to time be determined by the Board.

 

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3.9

Special meetings of the Board of Directors may be called by the Chairman of the
Board of Directors or the President and shall be called by the Secretary on the
written request of one director.  Notice of any special meeting of the Board of
Directors shall be given to each director at least five days before the date of
the meeting.

3.10

Subject to the provisions required or permitted by the Texas Business
Corporation Act for notice of meetings, unless otherwise restricted by the
Articles of Incorporation or these Bylaws, members of the Board of Directors, or
members of any committee designated by the Board of Directors, may participate
in and hold a meeting of such Board of Directors or committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this Paragraph III.10 shall constitute presence in person at
such meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.

3.11

Attendance of a director at any meeting shall constitute a waiver of notice of
such meeting, except where a director attends for the express purpose of
objecting to the transaction of any business on the grounds that the meeting is
not lawfully called or convened.  Except as may be otherwise provided by law, by
the Articles of Incorporation, or by these Bylaws, neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice or waiver of notice of such
meeting.

3.12

At all meetings of the Board of Directors, 51 percent of the directors shall
constitute a quorum for the transaction of business and the act of a majority of
the directors present at any meeting at which there is a quorum shall be the act
of the Board of Directors.  If a quorum shall not be present at any meeting of
the directors, the directors present thereat may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present.

3.13

The Board of Directors, by resolution passed by 51 percent of the entire Board,
may from time to time designate members of the Board to constitute committees,
including an executive committee, which shall in each case consist of such
number of directors, not less than one, and shall have and may exercise such
powers as the Board may determine and specify in the respective resolutions
appointing them.  A majority of all of the members of any such committee may
determine its action and fix the time and place of any meeting, unless the Board
of Directors shall otherwise direct.  The Board of Directors shall have power at
any time to change the number and the members of any such committee, to fill
vacancies and to discharge any such committee.

3.14

Any action required or permitted to be taken at a meeting of the Board of
Directors or at any executive committee may be taken without a meeting if a
consent in writing setting forth the actions so taken is signed by all the
members of the Board of Directors or such committee, as the case may be.

3.15

By resolution of the Board of Directors, the directors may be paid their
expenses, if any, of attending each meeting of the Board and may be paid a fixed
sum for attending each meeting of the Board or the stated salary for a director.
 No such payment shall preclude any director from serving the Company in any
other capacity and receiving compensation therefor.  Members of the executive
committee or of special or standing committees may, by resolution of the Board
of Directors, be allowed like compensation for attending committee meetings.

3.16

The Board of Directors shall keep regular minutes of its proceedings and such
minutes shall be placed in the minute book of the Company.

 

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ARTICLE IV

Notices

4.1

Any notice to directors or shareholders shall be in writing and shall be
delivered personally or mailed to the directors or shareholders at their
respective addresses appearing on the books of the Company.  Notice by mail
shall be deemed to be given at the time when the same shall be deposited in the
United States mail, postage prepaid.

4.2

Any notice required to be given may be subject to a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before or after
the time stated therein, and such waiver shall be deemed equivalent to the
giving of such notice in a timely manner.  Any such signed waiver of notice, or
a signed copy thereof, shall be placed in the minute book of the Company.
 Attendance of such persons at any meeting shall constitute a waiver of notice
of such meeting, except where the persons attend for the express purpose of
objecting that the meeting is not lawfully convened.

ARTICLE V

Officers

5.1

The Board of Directors shall elect a President and a Secretary and such other
officers and assistant officers as it may deem desirable to have to conduct the
affairs of the Company.

5.2

The Company also may have, at the discretion of the Board of Directors, a
Chairman of the Board, and such other officers or assistant officers as may be
appointed in accordance with the preceding paragraph.

5.3

The salaries of all officers and employees of the Company shall be fixed by the
Board of Directors.  The Board of Directors shall have the power to enter into
contracts for the employment and compensation of officers and employees on such
terms as the Board deems advisable.

5.4

The officers of the Company shall hold office until their successors are elected
or appointed and qualified, or until their death, resignation, or removal from
office.  Any officer elected or appointed by the Board of Directors may be
removed at any time by the Board, but such removal shall be without prejudice to
the contractual rights, if any, of the person so removed.  Election or
appointment of an officer or employee shall not of itself create contractual
rights.  Any vacancy occurring in any office of the Company, by death,
resignation, removal, or otherwise, may be filled by the Board of Directors.

5.5

Any officer may be removed, whether with or without cause, by the Board of
Directors, at any regular or special meeting, or, except in the case of an
officer chosen by the Board of Directors, by any officer upon whom such power of
removal may be conferred by the Board of Directors.

5.6

If the office of the Chairman of the Board, President, Vice-President,
Secretary, Treasurer, Assistant Secretary, or Assistant Treasurer becomes vacant
by reason of death, resignation or removal, the Board of Directors shall elect a
successor who shall hold office for the unexpired term, and until his successor
is elected.

5.7

The Board of Directors, except as otherwise provided in these Bylaws, may
authorize any officer to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Company, and such authority may
be general or confined to specific instances.  Unless so authorized, no officer,
agent, or employee shall have any power or authority to bind the Company by any
contract or engagement or to pledge its credit or to render it liable
pecuniarily for any purpose or in any amount.

5.8

The President shall be the chief executive officer of the Company, shall have
general and active management of the business of the Company and shall see that
all orders and resolutions of the Board of Directors are carried into effect.
 He shall preside at all meetings of the shareholders and, in the absence of a
Chairman of the Board, at all meetings of the Board of Directors.

 

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5.9

The Vice-Presidents, in the order of their seniority, unless otherwise
determined by the Board of Directors, in the absence or disability of the
President, shall perform the duties and have the authority and exercise the
powers of the President.  They shall perform such other duties and have such
other authority and powers as the Board of Directors may from time to time
prescribe or as the President may from time to time delegate.

5.10

The Secretary shall attend all meetings of the Board of Directors and of the
shareholders and record all business transacted at such meetings in a minute
book to be kept for that purpose and he shall perform like duties for the
standing committees when required.  He shall give, or cause to be given, notice
of all meetings of the shareholders and regular and special meetings of the
Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors, or President, under whose supervision he shall be.  He
shall keep and take custody of the seal of the Company and, when authorized by
the Board of Directors, shall affix the same to any instrument requiring it, and
when so affixed, it shall be attested by his signature or by the signature of an
Assistant Secretary or of the Treasurer.

5.11

The Assistant Secretaries shall, in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary.  They shall perform
such other duties and have such other powers as the Board of Directors may from
time to time prescribe or as the President from time to time may delegate.

5.12

The Treasurer shall have the custody of the Company funds and securities and
shall keep full and accurate accounts and records of receipts, disbursements and
other transactions in books belonging to the Company and shall deposit all funds
and other valuable effects in the name and to the credit of the Company in such
depositories as may be designated by the Board of Directors.

5.13

The Treasurer shall disburse funds of the Company as may be ordered by the Board
of Directors, taking proper vouchers for such disbursements, and shall render to
the President and the Board of Directors at the regular meetings of the Board,
or whenever they may require it, an account of all his transactions as Treasurer
and of the financial condition of the Company.

5.14

The Treasurer shall perform such other duties and have such other authority as
the Board of Directors may from time to time prescribe, or as the President may
from time to time delegate.

5.15

The Assistant Treasurers in the order of their seniority, unless otherwise
determined by the Board of Directors, shall, in the absence or disability of the
Treasurer, perform the duties and have the authority and exercise the powers of
the Treasurer.  They shall perform such other duties and have such other powers
as the Board of Directors may from time to time prescribe or the President may
from time to time delegate.

ARTICLE VI

Certificates and Shareholders

6.1

Certificates for shares of the stock of the Company shall be in such form as
shall be required by law and as shall be approved by the Board of Directors.
 Every certificate for shares issued by the Company must be signed by the
President, or a Vice-President and the Secretary, or an Assistant Secretary.
 Such certificate shall bear a legend in the form and containing the
restrictions required to be thereon by the Texas Business Company Act.

6.2

Certificates shall be delivered representing all shares to which shareholders
are entitled.  Each certificate shall be consecutively numbered and shall be
entered into the books of the Company as they are issued.  Each certificate
shall state on the face thereof the holder’s name, the number and class of
shares, the par value of such shares, and such other matters as may be required
by law, the Articles of Incorporation or these Bylaws.

6.3

The Board of Directors may direct a new certificate or certificates to be issued
in place of any certificate previously issued by the Company alleged to have
been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the loss or destruction.  In so doing the Board of Directors may
in its discretion and as a condition precedent to the issuance of any such
certificate (a) require the owner of the lost or destroyed

 

5

 

certificate, or his legal representative, to advertise the same in such manner
as it shall require and/or (b) to give the Company a bond (with a surety or
sureties satisfactory to the Company in such sum as it may direct, as indemnity
against any claim, or expense resulting from any claim, that may be made against
the Company with respect to the certificate alleged to have been lost or
destroyed.

6.4

Shares of stock shall be transferable only on the books of the Company by the
holder thereof in person or by his duly authorized attorney.  Upon surrender to
the Company or its transfer agent of a certificate representing shares properly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, the Company or its transfer agent shall issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.

6.5

The Company shall be entitled to treat the holder of record of any share or
shares of stock as the holder in fact thereof and, accordingly shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it has express or other
notice thereof, except as otherwise provided by law, or any stock purchase and
redemption agreement to which the stock may be subject.

6.6

Any action which would may otherwise be taken at a meeting of stockholders may
be taken without a meeting and without prior notice, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
shares having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted.

ARTICLE VII

Other Provisions

7.1

Dividends may be declared by the Board of Directors at any regular or special
meeting and may be paid in cash, in property, or in shares of the Company,
subject to the provisions of the Articles of Incorporation and to the Texas
Business Company Act.  The declaration and payment of dividends shall be at the
discretion of the Board of Directors.

7.2

Before payment of any dividend, the Board of Directors may create and set aside
funds and reserves such as the directors, from time to time and in their
absolute discretion, think proper to provide for contingencies, or to equalize
dividends, or to repair or maintain any property of the Company, or for any
other purpose they think beneficial to the Company.  The directors may modify or
abolish any such reserve or fund in the manner in which it was created.

7.3

The Company shall keep correct and complete books and records of account and
shall keep minutes of the proceedings of its shareholders and Board of
Directors, and shall keep at its registered office or principal place of
business, or at the office of its transfer agent or registrar, a record of its
shareholders, giving the names and addresses of all shareholders and the number
and class of the share held by each.

7.4

All checks or demands for money and notes of the Company shall be signed by such
officer or officers or such other person or persons as the Board of Directors
may from time to time designate.

7.5

The fiscal year of the Company shall be fixed by resolution of the Board of
Directors.

7.6

The Board of Directors shall present at each annual meeting of shareholders a
full and clear statement of the business and condition of the Company, including
a reasonably detailed balance sheet, income statement, and surplus statement.

7.7

The Company’s seal shall be in such form as may be prescribed by the Board of
Directors.  The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any manner reproduced.

 

6

 

7.8

The Company shall indemnify any person who serves as a director, officer, agent,
or employee of the Company against expenses actually and necessarily incurred by
such person, and any amount paid in satisfaction of judgment in connection with
any action, suit or proceedings in which he is made a party by reason of being
or having been such a director, officer, agent or employee, except in relation
to matters as to which he shall be adjudged in such action, suit or proceeding
to be liable for gross negligence or willful misconduct in the performance of
his duties.

7.9

The Company also may reimburse to any such person described in the preceding
paragraph the reasonable costs of settlement of any such proceeding, if it is
found by a majority of the directors not involved in the proceeding that it was
in the interest of the Company to make such settlement and that such person was
not guilty of gross negligence or willful misconduct.  These rights of
indemnification and reimbursement shall not be exclusive of any other right to
which such person may be entitled by law, bylaw, agreement, shareholder’s vote
or otherwise.

7.10

Any director, officer or agent may resign by giving written or oral notice to
the Board of Directors, or to the President or the Secretary.  Any such
resignation shall take effect at the time specified therein, or immediately if
no time is specified therein.  Unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.

ARTICLE VIII

Amendment and Construction

8.1

These Bylaws may be altered, amended, or repealed, or new Bylaws may be adopted
by the shareholders at any regular or special meeting.  In addition, the
shareholders have delegated to the Board of Directors the power to alter, amend,
or repeal the Bylaws, or to adopt new Bylaws.  The Board of Directors accepts
such delegation of authority and shall act accordingly at any regular or special
meeting upon notice given at least 10 days prior to any meeting stating that
purpose.

8.2

If any portion of these Bylaws shall be invalid or inoperative, then, so far as
is reasonable, the remainder of these Bylaws shall be considered valid and
operative and effect shall be given to the intent manifested by the portion held
invalid or inoperative.