MOS ACQUISITION, LLC

 
SECURED PROMISSORY NOTE
 
$1,000,000 July 30, 2010
 
FOR VALUE RECEIVED, the undersigned, MOS Acquisition, LLC, a Florida limited
liability company (“Maker”), hereby promises to pay to the order of Medical
Office Software, Inc., a Florida corporation, or its successors or assigns
(“Payee”), the principal sum of One Million and No/100 Dollars ($1,000,000),
together with interest on the unpaid principal balance outstanding from time to
time as described below.  All payments on this Secured Promissory Note (this
“Note”) shall be due and payable in lawful money of the United States of
America.
 
1. Principal Payments.  Subject to the other provisions of this Note, the
principal of this Note shall be due and payable as follows: (A) $100,000 payable
on August 2, 2010 and (B) $900,000 payable on September 30, 2010 (the “Final
Payment”); provided, however if the Final Payment is made on or before August
31, 2010, then the amount of the Final Payment shall be $800,000 and the total
principal of this Note shall be reduced to $900,000.
 
2. Interest Payments.  Maker agrees to pay interest on the outstanding principal
of this Note hereof from the date hereof until payment in full, which interest
shall be payable at the rate of six percent (6.00%) per annum; provided,
however, that upon the occurrence of an Event of Default (as defined below),
then to the extent permitted by law, Maker will pay interest to the Payee,
payable on demand, on the outstanding principal balance of the Note from the
date of the Event of Default until payment in full at the rate of ten percent
(10%) per annum. Accrued but unpaid interest on this Note shall be due and
payable at the time of the Final Payment. Interest shall be calculated on the
basis of a 365-day year for the actual number of days elapsed.
 
3. Prepayments.  The unpaid principal balance of this Note or any accrued but
unpaid interest thereon may be prepaid in whole or in part at any time by
Maker.  Any such prepayment shall be applied first to accrued but unpaid
interest on this Note, and thereafter to the outstanding principal balance of
this Note.
 
4. Method of Payment.  All payments made under this Note, whether of principal
or interest, shall be made by Maker to the holder hereof on the date specified
or provided herein and shall be delivered by means of a wire transfer of
immediately available funds to an account specified by Payee.  Whenever payment
hereunder shall be due on a day which is not a Business Day (as hereinafter
defined), the date for payment thereof shall be extended to the next succeeding
Business Day.  If the date for any payment is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.  As used
herein, “Business Day” means every day which is not a Saturday, Sunday or legal
holiday.
 
5. Security.  The payment of the principal of, and interest on, this Note, as
well as other amounts that may become due and payable under this Note, is
secured by a security interest in the Purchased Assets (as defined in that
certain Asset Purchase Agreement, of even date herewith, by and among Maker,
Payee and VHGI Holdings, Inc. (the “Asset Purchase Agreement”) as provided in
the  Asset Purchase Agreement.
 
 
 
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6. Events of Default.  The following shall constitute events of default (“Events
of Default”) hereunder:
 
(a) failure of Maker to make any payment on this Note as and when the same
becomes due and payable in accordance with the terms hereof; provided that with
respect to the payment due on September 30, 2010, Maker has not cured such
default within two (2) Business Days after receiving written notice of default
thereof from Payee, which written notice shall be addressed to Robert Lyle
Thompson;
 
(b) failure of Maker to perform any other covenant contained herein;
 
(c) a breach of Section 8.7 of the Asset Purchase Agreement;
 
(d) if Maker makes an assignment for the benefit of creditors, or petitions or
applies for the appointment of a liquidator, receiver or custodian (or similar
official) of it or of any substantial part of its assets, or if Maker commences
any proceeding or case relating to it under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, or takes any action to authorize any of the
foregoing; or
 
(e) if any petition or application of the type described in subparagraph (c)
immediately above is filed or if any such proceeding or case described in
subparagraph (c) is commenced against Maker and is not dismissed within fifteen
(15) days, or if Maker indicates its approval thereof, consents thereto or
acquiesces therein, or if an order is entered appointing any such liquidator or
receiver or custodian (or similar official), or adjudicating Maker bankrupt or
insolvent, or approving a petition in any such proceeding, or if a decree or
order for relief is entered in respect of Maker in an involuntary case under the
Bankruptcy Code or any other bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law of
any jurisdiction.
 
In the event any one or more of the Events of Default specified above occurs,
the Bill of Sale attached hereto as Exhibit A (the “Springing Bill of Sale”) and
the Domain Name Assignment attached hereto as Exhibit B (the “Springing Domain
Name Assignment”) shall automatically and without any further actions on the
part of Maker or Payee become effective and shall automatically vest in Payee
the ownership and title in the Purchased Assets; and the holder of this Note may
(i) proceed to protect and enforce its rights either by suit in equity or by
action at law, or by other appropriate proceedings, whether for the specific
performance of any covenant or agreement contained in this Note, the Springing
Bill of Sale and in the Springing Domain Name Assignment, or in aid of the
exercise of any power or right granted by this Note, the Springing Bill of Sale
and/or the Springing Domain Name Assignment, or (iii) enforce any other legal or
equitable right of the holder of this Note (including, without limitation, the
Uniform Commercial Code).  Payee hereby agrees to hold the Springing Bill of
Sale and the Springing Domain Assignment and not take any action with respect
thereto until an Event of Default occurs.
 
 
 
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7. Delay or Omission Not Waiver.  No delay or omission on the part of the holder
of this Note in the exercise of any power, remedy or right under this Note, or
under any other instrument executed pursuant hereto, shall operate as a waiver
thereof, nor shall a single or partial exercise of any such power or right
preclude any other or further exercise thereof or the exercise of any other
right or power hereunder.
 
8. Waiver.  Any term, covenant, agreement or condition of this Note may, only
with the written consent of Maker and Payee, be amended or compliance therewith
may be waived (either generally or in a particular instance and either
retroactively or prospectively), altered, modified or amended.
 
9. Attorneys’ Fees and Costs.  In the event an Event of Default shall occur, and
in the event that thereafter this Note is placed in the hands of an attorney for
collection, or in the event this Note is collected in whole or in part through
legal proceedings of any nature, then and in any such case Maker promises to pay
all reasonable costs of collection, including, but not limited to, reasonable
attorneys’ fees and court costs incurred by Agent on account of such collection,
whether or not suit is filed.
 
10. Successors and Assigns.  All of the covenants, stipulations, promises and
agreements in this Note made by Maker and Payee (by virtue of its acceptance of
this Note) shall bind its successors and assigns, whether so expressed or not.
 
11. Maximum Lawful Rate.  It is the intent of the Maker and the holder of this
Note to conform to and contract in strict compliance with applicable usury law
from time to time in effect.  In no way, nor in any event or contingency
(including but not limited to prepayment, default, demand for payment, or
acceleration of the maturity of any obligation), shall the rate of interest
taken, reserved, contacted for, charged or received under this Note exceed the
highest lawful interest rate permitted under applicable law.  If the holder of
this Note shall ever receive anything of value which is characterized as
interest under applicable law and which would apart from this provision be in
excess of the highest lawful interest rate permitted under applicable law, an
amount equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount owing on
this Note in the inverse order of its maturity and not to the payment of
interest, or refunded to Maker or the other payor thereof if and to the extent
such amount which would have been excessive exceeds such unpaid principal.  All
interest paid or agreed to be paid to the holder hereof shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term (including any renewal or extension) of this
Note so that the amount of interest on account of such obligation does not
exceed the maximum permitted by applicable law.  As used in this Section, the
term “applicable law” shall mean the laws of the State of Georgia or the federal
laws of the United States, whichever laws allow the greater interest, as such
laws now exist or may be changed or amended or come into effect in the future.
 
12. Governing Law.  This Note shall be governed by, and construed and enforced
in accordance with, the substantive laws (but not the rules governing conflicts
of laws) of the State of Texas.
 
 
 
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13. Notice.  Any notice or demand given hereunder shall be deemed to have been
given and received (i) when actually received by the receiving party, if
delivered in person, by e-mail transmission or by facsimile transmission (as
evidenced by confirmation) or by overnight courier service, or (ii) if mailed,
on the earlier of the date actually received or (whether ever received or not)
three Business Days after a letter containing such notice, certified or
registered, with postage prepaid, addressed to the receiving party, is deposited
in the United States mail.
 
14. Severability.  In case any one or more of the provisions contained in this
Note shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision hereof.
 
EXECUTED as of the date set forth above.
 

 
MOS ACQUISITION, LLC,
     
By:        SILK INFORMATION SYSTEMS, INC.
 
its Manager
     
By:s/Robert Lyle
Thompson                                                                
 
Robert Lyle Thompson,
 
President and CEO
     
This Note is executed by Medical Office Software, Inc. solely to acknowledge its
obligation set forth in the last sentence of Paragraph 6
     
MEDICAL OFFICE SOFTWARE, INC.
     
By: s/Scott A. Haire
 
Scott A. Haire,
 
Chief Executive Officer

 
 
 
 
 
 
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EXHIBIT A

 
Springing Bill of Sale
 
BILL OF SALE
 
This Bill of Sale (“Bill of Sale”), dated as of July 30, 2010, is made by MOS
Acquisition, LLC, a Florida limited liability company (the “Transferor”), in
favor of, and for the benefit of, Medical Office Software, Inc., a Florida
corporation (the “Transferee”). All capitalized terms used without definition
herein shall have the meaning specified in the Asset Purchase Agreement (as
defined below).
 
WHEREAS, Transferee, Transferor and VHGI Holdings, Inc., a Delaware corporation,
are parties to an Asset Purchase Agreement dated July 30, 2010 (the “Asset
Purchase Agreement”); and
 
WHEREAS, pursuant to the Asset Purchase Agreement, Transferee sold the Purchased
Assets to Transferor; and
 
WHEREAS, pursuant to the Asset Purchase Agreement part of the consideration paid
by Transferor to Transferee for the Purchased Assets was the issuance of the
Promissory Note; and
 
WHEREAS, pursuant to the Promissory Note if an Event of Default (as defined in
the Promissory Note) occurs, then this Bill of Sale shall automatically and
without any further actions on the part of Transferee or Transferor become
effective and shall automatically vest in Transferee the ownership and title in
the Purchased Assets; and
 
WHEREAS, an Event of Default (as defined in the Promissory Note) has occurred;
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Transferor does hereby sell, transfer, assign,
convey and deliver unto Transferee all of Transferor’s right, title and interest
in and to all of the Purchased Assets free and clear of all liabilities (fixed
or contingent), obligations, security interests, liens, claims or encumbrances
(collectively, “Encumbrances”) other than the Permitted Encumbrances that
existed as of the date of Closing and Assumed Liabilities assumed by Transferor
at Closing and hereby.
 
TO HAVE AND TO HOLD the Purchased Assets unto Transferee, its successors and
assigns, to and for its or their use forever.
 
Transferor has not executed any prior bill of sale, assignment, or other
conveyance to any other party of all or any portion of the property conveyed
hereby which is still in effect as of the date hereof.
 
From time to time at the request of Transferee, Transferor shall, without
further consideration, execute and deliver to Transferee such instruments of
conveyance, transfer, assignment and confirmation and take such other action
and/or authorize Transferee to take such action, as Transferee may reasonably
request in order for Transferee to obtain the full benefit of the transfer of
the Purchased Assets from Transferor to Transferee.
 
 
 
 

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All of the terms and provisions of this Bill of Sale shall be binding upon each
party hereto and their respective successors and assigns, and shall inure to the
benefit of each other party and its successors and assigns. This Bill of Sale
cannot be amended, modified or terminated without the prior written consent of
Transferor; provided, however, Transferee may fill in the date of this Bill of
Sale upon the occurrence of an Event of Default under the Promissory Note.
 
This Bill of Sale is a contract made under and shall be governed by and
construed in accordance with the laws of the State of Georgia.
 
IN WITNESS WHEREOF, Transferee has duly executed this Bill of Sale on the day
and year first above written.
 

  MOS ACQUISITION, LLC,             By:  SILK INFORMATION SYSTEMS, INC.       
its Manager           
 
By:
/s/ Robert Lyle Thompson       Robert Lyle Thompson,      
 
 

 
 

 
 
 
 

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BILL OF SALE
 
This Bill of Sale (this “Bill of Sale”), dated as of July 30, 2010, is made by
MOS Acquisition, LLC, a Florida limited liability company (the “Purchaser”), in
favor of, and for the benefit of, Medical Office Software, Inc., a Florida
corporation (the “Seller”). All capitalized terms used without definition herein
shall have the meaning specified in the Asset Purchase Agreement (as defined
below).
 
WHEREAS, Seller, Purchaser and VHGI Holdings, Inc., a Delaware corporation, are
parties to an Asset Purchase Agreement of even date herewith (the “Asset
Purchase Agreement”); and
 
WHEREAS, pursuant to the Asset Purchase Agreement, Seller is required to sell to
Purchaser the Purchased Assets free and clear of all liabilities (fixed or
contingent), obligations, security interests, liens, claims or encumbrances
(collectively, “Encumbrances”) other than the Permitted Encumbrances and Assumed
Liabilities; and
 
WHEREAS, by this Bill of Sale Seller desires to sell, transfer, assign, convey
and deliver to Purchaser the Purchased Assets, free and clear of all
Encumbrances other than the Permitted Encumbrances and Assumed Liabilities;
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Seller does hereby sell, transfer, assign,
convey and deliver unto Purchaser all of Seller’s right, title and interest in
and to all of the Purchased Assets free and clear of all Encumbrances other than
the Permitted Encumbrances and Assumed Liabilities.  It is expressly understood
that this instrument is intended solely to restate, and not in any manner to
amend, modify, enlarge or limit any warranties or agreements contained in, the
Asset Purchase Agreement and each of the covenants, agreements, representations
and warranties, and indemnities contained therein with respect to the Purchased
Assets is hereby incorporated by reference as if set forth herein in full.
 
TO HAVE AND TO HOLD the Purchased Assets unto Purchaser, its successors and
assigns, to and for its or their use forever.
 
Seller has not executed any prior bill of sale, assignment, or other conveyance
to any other party of all or any portion of the property conveyed hereby which
is still in effect as of the date hereof.
 
From time to time at the request of Purchaser, Seller shall, without further
consideration, execute and deliver to Purchaser such instruments of conveyance,
transfer, assignment and confirmation and take such other action and/or
authorize Purchaser to take such action, as Purchaser may reasonably request in
order for Purchaser to obtain the full benefit of the transfer of the Purchased
Assets from Seller to Purchaser.
 
All of the terms and provisions of this Bill of Sale shall be binding upon each
party hereto and their respective successors and assigns, and shall inure to the
benefit of each other party and its successors and assigns. This Bill of Sale
cannot be amended, modified or terminated without the prior written consent of
Purchaser.
 
This Bill of Sale is a contract made under and shall be governed by and
construed in accordance with the laws of the State of Georgia.
 
IN WITNESS WHEREOF, Seller has duly executed this Bill of Sale on the day and
year first above written.
 

  MEDICAL OFFICE SOFTWARE, INC.          
 
By:
/s/ Scott A. Haire       Scott A. Haire,      
Chief Executive Officer
 

 
 
 
 

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EXHIBIT B
 

 
Springing Domain Name Assignment
 
 
 
DOMAIN NAME ASSIGNMENT
 
 
THIS DOMAIN NAME ASSIGNMENT (“Assignment”) is made and entered into this
____30th____ day of ___July, 2010 (the “Effective Date”), by and among MOS
Acquisition, LLC, a Florida limited liability company (“Seller”) and Medical
Office Software, Inc., a Florida corporation (“Purchaser”).
 
For and in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Seller and Purchaser agree:
 
Section 1  Transfer. Seller, effective as of the Effective Date, hereby
transfers, assigns, conveys, and sets over to Purchaser all of its right, title,
and interest in and to the Domain Names.  Promptly after the request of
Purchaser, Seller agrees, with out further consideration, to execute a separate
Assignment form, as required by Network Solutions, Inc. or any other applicable
domain name registrar, assigning the Domain Names to Purchaser and to take any
and all reasonable actions necessary to complete the formal transfer of the
registration of the Domain Names to Purchaser.  Seller agrees to cease all use
of the Domain Names within 10 business days of the execution of this Agreement.
 
Section 2    Power of Attorney.  Seller hereby makes, constitutes, and appoints
Purchaser, its successors or assigns, the true and lawful attorney of Seller
with full power of substitution, for the benefit and at the expense of
Purchaser:  (a) to execute such assignment forms, as required by Network
Solutions, Inc. or any other applicable domain name registrar, assigning the
Domain Names to Purchaser , and (b) to take all action which Purchaser may deem
proper in order to provide Purchaser with the full benefit of the Domain Names. 
Seller acknowledges that the foregoing powers are coupled with an interest and
shall be irrevocable by Seller in any manner or for any reason.
 
IN WITNESS WHEREOF, Seller has executed this Domain Name Assignment on the date
first above written.
 

  MOS ACQUISITION, LLC,             By:  SILK Information Systems, Inc.,      
its Manager           
 
By:
/s/ Robert Lyle Thompson       Robert Lyle Thompson,      
President and CEO
 

 
        
 
 
 
 
 

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DOMAIN NAME ASSIGNMENT
 
 
THIS DOMAIN NAME ASSIGNMENT (“Assignment”) is made and entered into this 30th
day of July, 2010 (the “Effective Date”), by and among Medical Office Software,
Inc., a Florida corporation (“Seller”) and MOS Acquisition, LLC, a Florida
limited liability company (“Purchaser”).
 
Background
 
Seller has registered the Internet domain names “MOSONLINE.COM” and
“MEDICALOFFICESOFTWARE.COM” (collectively, the “Domain Names”).  Seller,
Purchaser and VHGI Holdings, Inc. have entered into an Asset Purchase Agreement
dated July 30th, 2010 (the “Asset Purchase Agreement”) pursuant to which
Purchaser has agreed to purchase the assets of Seller specified
therein.  Pursuant to the terms of the Asset Purchase Agreement, Seller has
agreed to assign all of its right, title, and interest in the Domain Names to
Purchaser.  Seller and Purchaser are entering into this Assignment to effect the
assignment to Purchaser of all of Seller’s right, title, and interest in the
Domain Names.
 
Agreement
 
For and in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Seller and Purchaser agree:
 
Section 1   Transfer. Seller, effective as of the Effective Date, hereby
transfers, assigns, conveys, and sets over to Purchaser all of its right, title,
and interest in and to the Domain Names.  Promptly after the request of
Purchaser, Seller agrees, with out further consideration, to execute a separate
Assignment form, as required by Network Solutions, Inc. or any other applicable
domain name registrar, assigning the Domain Names to Purchaser and to take any
and all reasonable actions necessary to complete the formal transfer of the
registration of the Domain Names to Purchaser.  Seller agrees to cease all use
of the Domain Names within 10 business days of the execution of this Agreement.
 
Section 2 Power of Attorney.  Seller hereby makes, constitutes, and appoints
Purchaser, its successors or assigns, the true and lawful attorney of Seller
with full power of substitution, for the benefit and at the expense of
Purchaser:  (a) to execute such assignment forms, as required by Network
Solutions, Inc. or any other applicable domain name registrar, assigning the
Domain Names to Purchaser , and (b) to take all action which Purchaser may deem
proper in order to provide Purchaser with the full benefit of the Domain Names. 
Seller acknowledges that the foregoing powers are coupled with an interest and
shall be irrevocable by Seller in any manner or for any reason.
 
IN WITNESS WHEREOF, Seller has executed this Domain Name Assignment on the date
first above written.
 
 

  Medical Office Software, Inc.          
 
By:
/s/Scott A. Haire       Scott A. Haire, Chief Executive Officer                 
 

 
 
 
                                                             
 
 
 

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DISCLOSURE SCHEDULE
 
TO
 
ASSET PURCHASE AGREEMENT
 
Pursuant to the Asset Purchase Agreement, dated as of July 30, 2010 (the
“Agreement”), by and among MOS Acquisition, LLC, a Florida limited liability
company (“Purchaser”), Medical Office Software, Inc., a Florida corporation
(“Seller”), and VHGI Holdings, Inc., a Delaware corporation (“Shareholder”),
this Disclosure Schedule is being delivered by Seller and Shareholder to
Purchaser. All terms used herein with initial capital letters have the same
meanings assigned to them in the Agreement, unless otherwise defined.
 
The representations and warranties of Seller and Shareholder set forth in
Article 3 of the Agreement are made and given subject to the disclosures in this
Disclosure Schedule. This Disclosure Schedule should be read in their entirety.
 
In addition, this Disclosure Schedule is subject to the following terms and
conditions:
 
·  
All references to Section numbers are to Sections of the Agreement, unless
otherwise stated.

 
·  
The fact that any item of information is disclosed in any Section of this
Disclosure Schedule may not be construed (i) to mean that such disclosure is
required by the Agreement, including without limitation in order to render any
representation or warranty true or correct, or (ii) to constitute a
representation or warranty as to the materiality of any item so disclosed.

 
·  
The following information may not be construed as expanding or modifying the
Company’s representations and warranties in the Agreement or modifying the
levels of materiality contained in the Sections of the Agreement corresponding
to such Sections of this Disclosure Schedule.

 
·  
Information disclosed by the Company pursuant to any Section of the Agreement or
this Disclosure Schedule will be deemed to be incorporated in and disclosed with
respect to all Sections of the Agreement and this Disclosure Schedule to the
extent the Agreement requires such disclosure; provided that the relevance of
such matters to other Sections in this Disclosure Schedule is reasonably
apparent on the face hereof.

 
·  
The headings and descriptions of representations, warranties, and covenants
herein are for descriptive purposes and convenience of reference only and should
not be deemed to affect such representations, warranties, or covenants or to
limit the exceptions made hereby or the provisions hereof.

 
 
 
 
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Section 1.1(a)
 
Software:
 
1. MOS
 
2. MARS (MOS Advanced Reporting System)
 
3. MADM
 
4. AHCA wizard
 
5. Claims Auto File Upload
 
6. ParseHCFA
 

 
Other Intellectual Property:
 
 
The Seller owns or possesses the legal rights to the following Internet domain
names:
 
Domain Name
WhoIS Information/Registrant
Expiration Date
Registrar
       
mosonline.com
Medical Office Software Inc. Eddyd@mosonline.com
03/07/2011
DomainPeople
       
medicalofficesoftware.com
Medical Office Software Inc. Eddyd@mosonline.com
03/07/2011
DomainPeople

 
Section 1.2
 
Toshiba Business Solutions Customer Agreement with Seller (Invoice 68054) ,
dated October 4, 2006, and the equipment therein identified.
 
Toshiba Business Solutions Maintenance Agreement with Seller Invoice 68054),
dated October 4, 2006.
 

 
 
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Section 1.3
 
Vendor
Invoice/CM #
0 - 30
31 - 60
61 - 90
Over 90 days
Amount Due
 
Date
Agastha Inc
Lustgarten1209
     
4,500.00
4,500.00
 
12/23/09
Agastha Inc
Clarksville1209
     
13,000.00
13,000.00
 
12/30/09
Agastha Inc
Escobar1209
     
2,999.50
2,999.50
 
12/30/09
Agastha Inc
MishkinD1209
     
3,000.00
3,000.00
 
12/30/09
Agastha Inc
Giachino
     
5,499.50
5,499.50
 
2/26/10
Agastha Inc
Northside
   
5,499.50
 
5,499.50
 
4/12/10
Agastha Inc
English
   
5,749.50
 
5,749.50
 
4/15/10
Agastha Inc
April10Support
   
400.00
 
400.00
 
4/30/10
Agastha Inc
Jan-Feb Software
   
900.00
 
900.00
 
4/30/10
Agastha Inc
MAY2010
 
400.00
   
400.00
 
5/29/10
Agastha Inc
Edel&Bust060710
7,999.50
     
7,999.50
 
6/7/10
Agastha Inc
Edelstein-Bust10
7,999.50
     
7,999.50
 
6/10/10
Agastha Inc
SupportJune10
650.00
     
650.00
 
6/29/10
                 
Agastha Inc
 
16,649.00
400.00
12,549.00
28,999.00
58,597.00
                                       

Note:  Agastha was paid-down to $53,147.00 in July 2010.  Any invoices from
Agastha from July 2010 are the responsibility of Purchaser.
 
Ingram Micro, Inc.
70-42924-11
513.23
     
513.23
 
6/10/10
Ingram Micro, Inc.
70-42942-11
513.65
     
513.65
 
6/10/10
Ingram Micro, Inc.
70-42957-11
223.64
     
223.64
 
6/10/10
Ingram Micro, Inc.
70-49306-11
1,299.64
     
1,299.64
 
6/16/10
Ingram Micro, Inc.
70-49306-21
2,063.10
     
2,063.10
 
6/16/10
Ingram Micro, Inc.
70-49306-31
1,485.75
     
1,485.75
 
6/21/10
Ingram Micro, Inc.
70-58141-11
1,007.19
     
1,007.19
 
6/23/10
                 
Ingram Micro, Inc.
 
7,106.20
 
 
 
7,106.20
   

 
Note:  Ingram Micro, Inc. was paid-down to $1,334.20 in July 2010.  Any orders
placed with Ingram Micro, Inc. in July 2010 are the responsibility of Purchaser.
 
 
 
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Section 3.1
 
The Seller is a Florida corporation and is not listed as a foreign corporation
in any other jurisdiction. The Seller operates its business solely in the State
of Florida.

 
Section 3.4
 
Purchaser hereby waives all requirements to obtain any of the below consents as
Purchaser will obtain new contracts.
 
Consents Needed:
 
1. Business Associate Agreement entered into and effective April 14, 2003 by and
between Seller and ClaimLogic, LLC. Prior written consent is required before
assignment.
 
2. PhoneTree Dealer Agreement dated March 3, 2010 between Personal
Communications Systems, Inc and Seller. Prior written consent is required before
assignment.
 
3. Partner Network Agreement and Trademark Licensing Addendum from Lenovo.
Lenovo may terminate the agreement by written notice upon Seller’s assignment,
transfer or attempt to assign or transfer the Addendum or License, in whole or
in part.
 
Notification Only:
 
1.  U.S. Partner Agreement from Hewlett-Packard Company.  In the case of
ownership change, Seller needs to notify HP within five (5) days prior to
intended date of change, or on the earliest date Seller is legally permitted to
provide such information, but not later than five (5) days after the change has
occurred. No consent needed – only notification.
 
 
 
4

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Section 3.8
 
Personal Property:
 
Servers
Qty
 
Computers Equipment
Qty
 
General Equipment
Qty
ML150-g2
1
 
DC-5100 CL
1
 
Time Clock
1
ML150-G3
1
 
DX2200 MK-KB-ED
3
     
ML110
1
 
D220-HW
1
           
D330-SW Office
1
           
DC5000m-AT
1
           
Laptop-KB
1
     
Loaner Server
   
D530
1
     
ML330
1
 
Wireless AP
1
           
Netscreen Firewall
1
           
E-mail Firewall
1
     
OLD NOT USED
6
 
UPS (Battery Backup)
11
           
Monitor
13
           
Scanner
1
           
Extra Loaner
             
DX2000
1
           
DC5000
1
           
Lenovo Laptop
2
           
HP Sales Laptop
1
           
Netbook
1
     
Copiers
Qty
 
Fax
Qty
 
Furniture
Qty
Toshbia 250
1
 
Cannon-Old
1
 
Filing Cabinets
6
           
Chairs
13
           
Desks
5
           
Hutch
1
           
Bookshelf
8
           
Tables
1
           
Book/Hutch-KB
1
           
Cabinet
2
           
Plastic Shelf
3
Telephone
Qty
 
Cell Phone
Qty
 
Printers
Qty
Handset
10
 
BlackBerry (Sprint)
1
 
1000-MK
1
Phone system owned by WCI
 
Samsung (Sprint)
2
 
P2015dn-Main
1
     
Nokia (ATT)
2
 
1320tn-Acct
1
     
Motorolla (ATT)
1
     
Misc
Qty
           
Motion Tablet
1
         
WhiteBoards
4
           
Docket Scanner
3
 
 
       
SCSI Card (old)
5
           
Internal Tape Drive
3
           

Leases:
 
4. The equipment described in the Customer Agreement between the Seller and
Toshiba Business Solutions, dated October 4, 2006. The lease expires October
2011.

 
 
5

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Section 3.9(a)
 
(i) The following is a list of all software that is Owned Intellectual Property:
 
     a. MOS
 
     b. MARS (MOS Advanced Reporting System)
 
     c. MADM
 
     d. AHCA wizard
 
     e. Claims Auto File Upload
 
     f. ParseHCFA
 
(ii) See Section 1.1(a) for a list of all domain names owned or used by Seller
which are Licensed Intellectual Property.
 
(iii) The following is a list of all telephone phone and facsimile numbers which
are all Licensed Intellectual Property:
 
     g. 1-800-486-1667
 
     h. 954-315-9100
 
     i. 954-315-9200 (fax)
 
     j. 305-586-3224 (Medical Office Software - AT&T Cellular Phone Number)
 

 
Section 3.9(c)(vi)
 
1.  See Section 3.4 for a list of all consents.
 
 
 
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Section 3.9(d)
 
Customer Contracts:
 
Name
Quote Date
Total Amount
Wiltz Hector, MD
2/8/2009
$38,766.76
Dr. Rosalind Bardisa
2/18/2009
$10,117,88
Kendall Eye Institute
3/30/2009
$3,210.00
Diane Walder, MD
3/16/2009
$17,534.70
Neurology Group of S. Florida
3/25/2009
$24,426.82
Frederic L. Bushkin
8/17/2009
$4,980,94
Treasure Coast Hospitalist
9/16/2009
$11,152.88
Michael Lustgarten, MD
9/22/2009
$13,697.94
Juan M Escobar, MD
10/21/2009
$9,560.75
Clarksville Limb and Brace
11/9/2009
$24,998.00
David Mishkin, DO, PA
12/21/2009
$9,536.76
Northside Medical Assoc
2/9/2010
$13,433.20
Scott R. English
2/12/2010
$15,309.76
Juan Carlos Glachino, MD
2/25/2010
$15,231.78
Edelstein & Bustamante, MD
4/28/2010
$14,143.76

 
Distribution Agreements:
 
5. Agreement between Seller and Agastha, Inc. dated February 27, 2009.
 
6. U.S. Partner Agreement from Hewlett-Packard Company
 
7. Partner Network Agreement and Trademark Licensing Addendum from Lenovo.
 
8. PhoneTree Dealer Agreement dated March 3, 2010 between Personal
Communications Systems, Inc and Seller.
 
9. Preferred Business Associate Agreement between ClaimLogic, LLC and Seller
dated April 134, 2003.
 
10. Transaction Standard Trading Partner Addendum entered into on April 14, 2003
between Seller and ClaimLogic, LLC.
 
11. Business Associate Agreement entered into and effective April 14, 2003 by
and between Seller and ClaimLogic, LLC.
 

 
Section 3.15
 
Employees:
 
 
 
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Employee Name
Date of Hire
2009 Salary
2009 Commission
Car Allowance
2009 Total
Jan- May 2010
Barnes, Ken
9/29/2003
$150,000
$6,898.17
$6,000
$162,898.17
$68.832.10
Bowman, Kim
9/3/2008
$40,000
$3,000
$6,000
$49,000
$28,923.06
Dishueme, Eddy
12/17/2001
$70,000
0
0
$70,000
$29,615.41
Korner, Michael
11/20/2006
$41,000
0
0
$41,000
$17,346.12
Longstreet, Carolyn
2/9/2004
$60,000
$11,149
 
$71,149.70
$28,884.59
Arus Threepersons
4/2/2009
$33,280.00
0
0
$33,280.00
$14,130.00
             
Independent Contractor
         
Polack, Michael
N/A
$40,769.76
0
0
$40,769.76
$18,000.00

 
Section 3.16
 
12. AT&T Wireless Service Agreement for Tim Reed, Account Number 823565040.
 
13. AT&T Wireless Service Agreement for Medical Office Software, Account Number
823565040.
 
14. AT&T Wireless Service Agreement for Tracy Kollmer, Account Number 823565040.
 
15. Annual Quote Agreement between LogMeIn, Inc. and Medical Office Software
dated October 2, 2009, expires October 2, 2010.
 
16. Annual Quote Agreement between LogMeIn, Inc. and Medical Office Software
dated October 2, 2009, expires October 5, 2010.
 
17. Agreement between Seller and Agastha, Inc. dated February 27, 2009.
 
18. U.S. Partner Agreement from Hewlett-Packard Company April, 2010.
 
19. Partner Network Agreement from Lenovo.
 
20. PhoneTree Dealer Agreement dated March 3, 2010 between Personal
Communications Systems, Inc and Seller.
 
21. Preferred Business Associate Agreement between ClaimLogic, LLC and Seller.
 
22. Transaction Standard Trading Partner Addendum entered into on April 14, 2003
between Seller and ClaimLogic, LLC.
 
23. Business Associate Agreement entered into and effective April 14, 2003 by
and between Seller and ClaimLogic, LLC.
 
24. Customer Service Agreement made by and between US LEC of Florida Inc. and
Seller executed on September 27, 2006.
 
 
 
8

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25. See list of Customer Contracts and Distribution Agreements set forth in
Section 3.9(d) of this Disclosure Schedule.
 
15.  See list of customers of Seller for the period January 1, 2010, through
June 30, 2010 set forth in Section 3.16(d) of this Disclosure Schedule.  It
being noted that most if not all such contracts are oral agreements, may be
terminated by customer at any time, and such list is only accurate through June
of 2010.
 
Section 3.16(d)
 
See Attached [To be Printed out and Attached]
 
[vhgi.jpg]
 
Section 3.19
 
BlueCross/Blue Shield medical part of a group with the payroll service
 

 
Section 3.20
 
Only Worker’s Compensation with payroll service.
 

 

 
 
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