Document:

Contract with Eligible Medicare Advantage (MA) Organization Pursuant to
     Sections 1851 through 1859 of the Social Security Act for the Operation
                of a Medicare Advantage Coordinated Care Plan(s)

                                CONTRACT (#H5711)
                                     Between
    Centers for Medicare & Medicaid Services (hereinafter referred to as CMS)
                                       and

                          QMedCare of New Jersey, Inc.
--------------------------------------------------------------------------------
                (hereinafter referred to as the MA Organization)

CMS and the MA Organization, an entity which has been determined to be an
eligible Medicare Advantage Organization by the Administrator of the Centers for
Medicare & Medicaid Services under 42 CFR 422.503, agree to the following for
the purposes of sections 1851 through 1859 of the Social Security Act
(hereinafter referred to as the Act):

(NOTE: Citations indicated in brackets are placed in the text of this contract
to note the regulatory authority for certain contract provisions. All references
to Part 422 are to 42 CFR Part 422.)

You must check off AND initial each required Addendum type to reflect the
coverage offered under the H (orR) number associated with this contract Addendum
Type

_____________________________________________________________Initials

[X]     Part D Addendum                                         /s/ JM
[ ]     Employer-Only MA-PD Addendum (800 Series)            _____________
[ ]     Employer-Only MA Only Addendum (800 Series)          _____________
[ ]     Variances/Waivers (Provided directly to
          Demonstration Organizations by CMS)                _____________
[ ]     Regional Preferred Provider Organization Addendum    _____________
          (Provided directly to RPPOs by CMS                 _____________

<PAGE>

                                    Article I
                                Term of Contract

The term of this contract shall be from the date of signature by CMS' authorized
representative through December 31, 2007, after which this contract may be
renewed for successive one-year periods in accordance with 42 CFR 422.505(c) and
as discussed in Paragraph A in Article VII below. [422.505]

This contract governs the respective rights and obligations of the parties as of
the effective date set forth above, and supersedes any prior agreements between
the MA Organization and CMS as of such date. MA organizations offering Part D
also must execute an Addendum to the Medicare Managed Care Contract Pursuant to
Sections 1 860D- 1 through 1 860D-42 of the Social Security Act for the
Operation of a Voluntary Medicare Prescription Drug Plan (hereafter the "Part D
Addendum"). For MA Organizations offering MA-PD plans, the Part D Addendum
governs the rights and obligations of the parties relating to the provision of
Part D benefits, in accordance with its terms, as of its effective date.

                                   Article II
                              Coordinated Care Plan

A. The Medicare Advantage Organization agrees to operate one or more coordinated
care plans as defined in 42 CFR 422.4(a)(1)(iii)), including at least one MA-PD
plan as required under 42 CFR 422.4(c), as described in its final Plan Benefit
Package (PBP) bid submission (benefit and price bid) proposal as approved by CMS
and as attested to in the Medicare Advantage Attestation of Benefit Plan and
Price, and in compliance with the requirements of this contract and applicable
Federal statutes, regulations, and policies.

B. Except as provided in paragraph (C) of this Article, this contract is deemed
to incorporate any changes that are required by statute to be implemented during
the term of the contract and any regulations or policies implementing or
interpreting such statutory provisions.

C. CMS will not implement, other than at the beginning of a calendar year,
requirements under 42 CFR Part 422 that impose a new significant cost or burden
on MA organizations or plans, unless a different effective date is required by
statute. [422.521]

                                   Article III
          Functions To Be Performed By Medicare Advantage Organization

A. PROVISION OF BENEFITS

1. The MA Organization agrees to provide enrollees in each of its MA plans the
basic benefits as required under ss.422.101 and, to the extent applicable,
supplemental benefits under ss.422.102 and as established in the MA
Organization's final benefit and price bid proposal as approved by CMS and
listed in the MA Organization Plan Attestation of Benefit Plan and Price, which
is attached to this contract. The MA Organization agrees to provide access to

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such benefits as required under subpart C in a manner consistent with
professionally recognized standards of health care and according to the access
standards stated in ss.422.112.

2. The MA Organization agrees to provide post-hospital extended care services,
should an MA enrollee elect such coverage, through a skilled nursing home
facility according to the requirements of section 1852(l) of the Act and
ss.422.133. A skilled nursing home facility is a facility in which an MA
enrollee resided at the time of admission to the hospital, a facility that
provides services through a continuing care retirement community, a facility in
which the spouse of the enrollee is residing at the time of the enrollee's
discharge from the hospital, or hospital, or wherever the enrollee resides
immediately before admission for extended care services. [422. 133;
422.504(a)(3)]

B. ENROLLMENT REQUIREMENTS

1. The MA Organization agrees to accept new enrollments, make enrollments
effective, process voluntary disenrollments, and limit involuntary
disenrollments, as provided in subpart B of part 422.

2. The MA Organization shall comply with the provisions of ss.422.110 concerning
prohibitions against discrimination in beneficiary enrollment, other than in
enrolling eligible beneficiaries in a CMA-approved special needs plan that
exclusively enrolls special needs individuals as consistent with ss.ss.422.2,
422.4(a)(1)(iv) and 422.52. [422 .504(a) (2)]

C. BENEFICIARY PROTECTIONS

1. The MA Organization agrees to comply with all requirements in subpart M of
part 422, governing coverage determinations, grievances, and appeals.
[422.504(a)(7)]

2. The MA Organization agrees to comply with the confidentiality and enrollee
record accuracy requirements in ss.422.118.

3. Beneficiary Financial Protections. The MA Organization agrees to comply with
the following requirements:

         (a) Each MA Organization must adopt and maintain arrangements
satisfactory to CMS to protect its enrollees from incurring liability for
payment of any fees that are the legal obligation of the MA Organization. To
meet this requirement the MA Organization must--

                  (i) Ensure that all contractual or other written arrangements
         with providers prohibit the Organization's providers from holding any
         beneficiary enrollee liable for payment of any fees that are the legal
         obligation of the MA Organization; and

                  (ii) Indemnify the beneficiary enrollee for payment of any
         fees that are the legal obligation of the MA Organization for services
         furnished by providers that do not contract, or that have not otherwise
         entered into an agreement with the MA Organization, to provide services
         to the organization's beneficiary enrollees. [422.504(g)(1)]

         (b) The MA Organization must provide for continuation of enrollee
health care benefits-

                  (i) For all enrollees, for the duration of the contract period
         for which CMS payments have been made; and

                  (ii) For enrollees who are hospitalized on the date its
         contract with CMS terminates, or, in the event of the MA Organization's
         insolvency, through the date of discharge. [422.504(g)(2)]

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         (c) In meeting the requirements of this section (C), other than the
provider contract requirements specified in paragraph (C)(3)(a) of this Article,
the MA Organization may use--

                  (i) Contractual arrangements;

                  (ii) Insurance acceptable to CMS;

                  (iii) Financial reserves acceptable to CMS; or

                  (iv) Any other arrangement acceptable to CMS. [422.504(g)(3)]

D. PROVIDER PROTECTIONS

1. The MA Organization agrees to comply with all applicable provider
requirements in 42 CFR Part 422 Subpart E, including provider certification
requirements, anti-discrimination requirements, provider participation and
consultation requirements, the prohibition on interference with provider advice,
limits on provider indemnification, rules governing payments to providers, and
limits on physician incentive plans. [422.504(a)(6)]

2. Prompt Payment.

         (a) The MA Organization must pay 95 percent of "clean claims" within 30
days of receipt if they are claims for covered services that are not furnished
under a written agreement between the organization and the provider.

                  (i) The MA Organization must pay interest on clean claims that
         are not paid within 30 days in accordance with sections 181 6(c)(2) and
         1 842(c)(2) of the Act.

                  (ii) All other claims from non-contracted providers must be
         paid or denied within 60 calendar days from the date of the request.
         [422.520(a)]

         (b) Contracts or other written agreements between the MA Organization
and its providers must contain a prompt payment provision, the terms of which
are developed and agreed to by both the MA Organization and the relevant
provider. [422.520(b)]

         (c) If CMS determines, after giving notice and opportunity for hearing,
that the MA Organization has failed to make payments in accordance with
subparagraph (2)(a) of this section, CMS may provide--

                  (i) For direct payment of the sums owed to providers; and (ii)
         For appropriate reduction in the amounts that would otherwise be paid
         to the MA Organization, to reflect the amounts of the direct payments
         and the cost of making those payments. [422.520(c)]

E. QUALITY IMPROVEMENT PROGRAM

1. The MA Organization agrees to operate, for each plan that it offers, an
ongoing quality improvement program as stated in accordance with Section 1852(e)
of the Social Security Act and 42 CFR 422.152.

2. Chronic Care Improvement Program

         (a) Each MA organization (other than MA private-fee-for-service plans)
must have a chronic care improvement program and must establish criteria for
participation in the program. The CCIP must have a method for identifying
enrollees with multiple or sufficiently severe chronic conditions who meet the
criteria for participation in the program and a mechanism for monitoring
enrollees' participation in the program.

         (b) Plans have flexibility to choose the design of their program;
however, in addition to meeting the requirements specified above, the CCIP
selected must be relevant to the plan's MA population. MA organizations are

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required to submit annual reports on their CCIP program to CMS.

3. Performance Measurement and Reporting: The MA Organization shall measure
performance under its MA plans using standard measures required by CMS, and
report (at the organization level) its performance to CMS. The standard measures
required by CMS during the term of this contract will be uniform data collection
and reporting instruments, to include the Health Plan and Employer Data
Information Set (HEDIS), Consumer Assessment of Health Plan Satisfaction (CAHPS)
survey, and Health Outcomes Survey (HOS). These measures will address clinical
areas, including effectiveness of care, enrollee perception of care and use of
services; and non-clinical areas including access to and availability of
services, appeals and grievances, and organizational characteristics.
[422.152(b)(1), (e)]

4. Utilization Review:

         (a) An MA Organization for an MA coordinated care plan must use written
protocols for utilization review and policies and procedures must reflect
current standards of medical practice in processing requests for initial or
continued authorization of services and have in effect mechanisms to detect both
underutilization and over utilization of services. [422.152(b)]

         (b) For MA regional preferred provider organizations (RPPOs) and MA
local preferred provider organizations (PPOs) that are offered by an
organization that is not licensed or organized under State law as an HMOs, if
the MA Organization uses written protocols for utilization review, those
policies and procedures must reflect current standards of medical practice in
processing requests for initial or continued authorization of services and
include mechanisms to evaluate utilization of services and to inform enrollees
and providers of services of the results of the evaluation. [422.152(e)]

5. Information Systems:

         (a) The MA Organization must:

                  (i) Maintain a health information system that collects,
         analyzes and integrates the data necessary to implement its quality
         improvement program;

                  (ii) Ensure that the information entered into the system
         (particularly that received from providers) is reliable and complete;

                  (iii) Make all collected information available to CMS.
         [422.152(f)(1)]

6. External Review

The MA Organization will comply with any requests by Quality Improvement
Organizations to review the MA Organization's medical records in connection with
appeals of discharges from hospitals, skilled nursing facilities, and home
health agencies.

F. COMPLIANCE PLAN

The MA Organization agrees to implement a compliance plan in accordance with the
requirements of ss.422.503 (b)(4)(vi). [422.503(b)(4)(vi)]

G. COMPLIANCE DEEMED ON THE BASIS OF ACCREDITATION

CMS may deem the MA Organization to have met the quality improvement
requirements of ss.1852(e) of the Act and ss.422.152, the confidentiality and
accuracy of enrollee records requirements of ss. 1852(h) of the Act and
ss.422.118, the anti-discrimination requirements of ss.1852(b) of the Act and
ss.422.110, the access to services requirements of ss.1852(d) of the Act and
ss.422.112, and the advance directives requirements of ss.1852(i) of the Act and
ss.422.128, the

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provider participation requirements of ss.1 852(j) of the Act and 42 CFR Part
422, Subpart F, and the applicable requirements described in ss.423.165, if the
MA Organization is fully accredited (and periodically reaccredited) by a
private, national accreditation organization approved by CMS and the
accreditation organization used the standards approved by CMS for the purposes
of assessing the MA Organization's compliance with Medicare requirements. The
provisions of ss.422.156 shall govern the MA Organization's use of deemed status
to meet MA program requirements.

H. PROGRAM INTEGRITY

1. The MA Organization agrees to provide notice based on best knowledge,
information, and belief to CMS of any integrity items related to payments from
governmental entities, both federal and state, for healthcare or prescription
drug services. These items include any investigations, legal actions or matters
subject to arbitration brought involving the MA Organization (or MA
Organization's firm if applicable) and its subcontractors (excluding contracted
network providers), including any key management or executive staff, or any
major shareholders (5% or more), by a government agency (state or federal) on
matters relating to payments from governmental entities, both federal and state,
for healthcare and/or prescription drug services. In providing the notice, the
sponsor shall keep the government informed of when the integrity item is
initiated and when it is closed. Notice should be provided of the details
concerning any resolution and monetary payments as well as any settlement
agreements or corporate integrity agreements.

2. The MA Organization agrees to provide notice based on best knowledge,
information, and belief to CMS in the event the MA Organization or any of its
subcontractors is criminally convicted or has a civil judgment entered against
it for fraudulent activities or is sanctioned under any Federal program
involving the provision of health care or prescription drug services.

I. MARKETING

1. The MA Organization may not distribute any marketing materials, as defined in
42 CFR 422.80(b) and in the Marketing Materials Guidelines for Medicare
Advantage-Prescription Drug Plans and Prescription Drug Plans (Medicare
Marketing Guidelines), unless they have been filed with and not disapproved by
CMS in accordance with ss.422.80. The file and use process set out at
ss.422.80(a)(2) must be used, unless the MA organization notifies CMS that it
will not use this process.

2. CMS and the MA Organization shall agree upon language setting forth the
benefits, exclusions and other language of the Plan. The MA Organization bears
full responsibility for the accuracy of its marketing materials. CMS, in its
sole discretion, may order the MA Organization to print and distribute the
agreed upon marketing materials, in a format approved by CMS. The MA
Organization must disclose the information to each enrollee electing a plan as
outlined in 42 CFR 422.111.

3. The MA Organization agrees that any advertising material, including that
labeled promotional material, marketing materials, or supplemental literature,
shall be truthful and not misleading. All marketing materials must include the
Contract number. All membership identification cards must include the Contract
number on the front of the card.

4. The MA Organization must comply with the Medicare Marketing Guidelines, as
well as all applicable statutes and regulations, including and without

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limitation Section 1851(h) of the Act and 42 CFR ss.ss.422.80, 422.111 and
423.50. Failure to comply may result in sanctions as provided in 42 CFR Part 422
Subpart O.

                                   Article IV
                         CMS Payment to MA Organization

A. The MA Organization agrees to develop its annual benefit and price bid
proposal and submit to CMS all required information on premiums, benefits, and
cost sharing, as required under 42 CFR Part 422 Subpart F. [422.504(a)(10)]

B. Methodology. CMS agrees to pay the MA Organization under this contract in
accordance with the provisions of section 1853 of the Act and 42 CFR Part 422
Subpart G. [422.504(a)(9)]

C. Attestation of payment data (Attachments A, B, and C). As a condition for
receiving a monthly payment under paragraph B of this article, and 42 CFR Part
422 Subpart G, the MA Organization agrees that its chief executive officer
(CEO), chief financial officer (CFO), or an individual delegated with the
authority to sign on behalf of one of these officers, and who reports directly
to such officer, must request payment under the contract on the forms attached
hereto as Attachment A (enrollment attestation) and Attachment B (risk
adjustment data) which attest to (based on best knowledge, information and
belief, as of the date specified on the attestation form) the accuracy,
completeness, and truthfulness of the data identified on these attachments. The
Medicare Advantage Plan Attestation of Benefit Plan and Price must be signed and
attached to the executed version of this contract.

1. Attachment A requires that the CEO, CFO, or an individual delegated with the
authority to sign on behalf of one of these officers, and who reports directly
to such officer, must attest based on best knowledge, information, and belief
that each enrollee for whom the MA Organization is requesting payment is validly
enrolled, or was validly enrolled during the period for which payment is
requested, in an MA plan offered by the MA Organization. The MA Organization
shall submit completed enrollment attestation forms to CMS, or its contractor,
on a monthly basis. (NOTE: The forms included as attachments to this contract
are for reference only. CMS will provide instructions for the completion and
submission of the forms in separate documents. MA Organizations should not take
any action on the forms until appropriate CMS instructions become available.)

2. Attachment B requires that the CEO, CFO, or an individual delegated with the
authority to sign on behalf of one of these officers, and who reports directly
to such officer, must attest to (based on best knowledge, information and
belief, as of the date specified on the attestation form) that the risk
adjustment data it submits to CMS under ss.422.3 10 are accurate, complete, and
truthful. The MA Organization shall make annual attestations to this effect for
risk adjustment data on Attachment B and according to a schedule to be published
by CMS. If such risk adjustment data are generated by a related entity,
contractor, or subcontractor of an MA Organization, such entity, contractor, or
subcontractor must similarly attest to (based on best knowledge, information,
and belief, as of the date specified on the attestation form) the accuracy,
completeness, and truthfulness of the data. [422.504(l)]

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3. The Medicare Advantage Plan Attestation of Benefit Plan and Price (which is
attached hereto) requires that the CEO, CFO, or an individual delegated with the
authority to sign on behalf of one of these officers, and who reports directly
to such officer, must attest (based on best knowledge, information and belief,
as of the date specified on the attestation form) that the information and
documentation comprising the bid submission proposal is accurate, complete, and
truthful and fully conforms to the Bid Form and Plan Benefit Package
requirements; and that the benefits described in the CMS-approved proposal bid
submission agree with the benefit package the MA Organization will offer during
the period covered by the proposal bid submission. This document is being sent
separately to the MA Organization and must be signed and attached to the
executed version of this contract, and is incorporated herein by reference.
[422.502(l)]

                                   Article V
              MA Organization Relationship with Related Entities,
                        Contractors, and Subcontractors

A. Notwithstanding any relationship(s) that the MA Organization may have with
related entities, contractors, or subcontractors, the MA Organization maintains
full responsibility for adhering to and otherwise fully complying with all terms
and conditions of its contract with CMS. [422.504(i)(1)]

B. The MA Organization agrees to require all related entities, contractors, or
subcontractors to agree that--

         (1) HHS, the Comptroller General, or their designees have the right to
inspect, evaluate, and audit any pertinent contracts, books, documents, papers,
and records of the related entity(s), contractor(s), or subcontractor(s)
involving transactions related to this contract; and

         (2) HHS, the Comptroller General, or their designees have the right to
inspect, evaluate, and audit any pertinent information for any particular
contract period for 10 years from the final date of the contract period or from
the date of completion of any audit, whichever is later. [422.504(i)(2)]

C. The MA Organization agrees that all contracts or written arrangements into
which the MA Organization enters with providers, related entities, contractors,
or subcontractors (first tier and downstream entities) shall contain the
following elements:

         (1) Enrollee protection provisions that provide--

                  (a) Consistent with Article III(C), arrangements that prohibit
         providers from holding an enrollee liable for payment of any fees that
         are the legal obligation of the MA Organization; and

                  (b) Consistent with Article III(C), provision for the
         continuation of benefits.

         (2) Accountability provisions that indicate that the MA Organization
may only delegate activities or functions to a provider, related entity,
contractor, or subcontractor in a manner consistent with requirements set forth
at paragraph D of this article.

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         (3) A provision requiring that any services or other activity performed
by a related entity, contractor or subcontractor in accordance with a contract
or written agreement between the related entity, contractor, or subcontractor
and the MA Organization will be consistent and comply with the MA Organization's
contractual obligations to CMS. [422.504(i)(3)]

D. If any of the MA Organization's activities or responsibilities under this
contract with CMS is delegated to other parties, the following requirements
apply to any related entity, contractor, subcontractor, or provider:

         (1) Written arrangements must specify delegated activities and
reporting responsibilities.

         (2) Written arrangements must either provide for revocation of the
delegation activities and reporting requirements or specify other remedies in
instances where CMS or the MA Organization determine that such parties have not
performed satisfactorily.

         (3) Written arrangements must specify that the performance of the
parties is monitored by the MA Organization on an ongoing basis.

         (4) Written arrangements must specify that either--

                  (a) The credentials of medical professionals affiliated with
         the party or parties will be either reviewed by the MA Organization; or

                  (b) The credentialing process will be reviewed and approved by
         the MA Organization and the MA Organization must audit the
         credentialing process on an ongoing basis.

        (5) All contracts or written arrangements must specify that the related
entity, contractor, or subcontractor must comply with all applicable Medicare
laws, regulations, and CMS instructions.
[422.504(i)(4)]

E. If the MA Organization delegates selection of the providers, contractors, or
subcontractors to another organization, the MA Organization's written
arrangements with that organization must state that the MA Organization retains
the right to approve, suspend, or terminate any such arrangement.
[422.504(i)(5)]

F. As of the date of this contract and throughout its term, the MA Organization

         (1) Agrees that any physician incentive plan it operates meets the
requirements of ss.422.208, and

         (2) Has assured that all physicians and physician groups that the MA
Organization's physician incentive plan places at substantial financial risk
have adequate stop-loss protection in accordance with ss.422.208(f). [422.208]

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                                   Article VI
                              Records Requirements

A. MAINTENANCE OF RECORDS

1. The MA Organization agrees to maintain for 10 years books, records,
documents, and other evidence of accounting procedures and practices that--

         (a) Are sufficient to do the following:

                  (i) Accommodate periodic auditing of the financial records
         (including data related to Medicare utilization, costs, and computation
         of the benefit and price bid) of the MA Organization.

                  (ii) Enable CMS to inspect or otherwise evaluate the quality,
         appropriateness and timeliness of services performed under the
         contract, and the facilities of the MA Organization.

                  (iii) Enable CMS to audit and inspect any books and records of
         the MA Organization that pertain to the ability of the organization to
         bear the risk of potential financial losses, or to services performed
         or determinations of amounts payable under the contract.

                  (iv) Properly reflect all direct and indirect costs claimed to
         have been incurred and used in the preparation of the benefit and price
         bid proposal.

                  (v) Establish component rates of the benefit and price bid for
         determining additional and supplementary benefits.

                  (vi) Determine the rates utilized in setting premiums for
         State insurance agency purposes and for other government and private
         purchasers; and

         (b) Include at least records of the following:

                  (i) Ownership and operation of the MA Organization's
         financial, medical, and other record keeping systems.

                  (ii) Financial statements for the current contract period and
         six prior periods.

                  (iii) Federal income tax or informational returns for the
         current contract period and six prior periods.

                  (iv) Asset acquisition, lease, sale, or other action.

                  (v) Agreements, contracts (including, but not limited to, with
         related or unrelated prescription drug benefit managers) and
         subcontracts.

                  (vi) Franchise, marketing, and management agreements.

                  (vii) Schedules of charges for the MA Organization's
         fee-for-service patients.

                  (viii) Matters pertaining to costs of operations.

                  (ix) Amounts of income received, by source and payment.

                  (x) Cash flow statements.

                  (xi) Any financial reports filed with other Federal programs
         or State authorities. [422.504(d)]

2. Access to facilities and records. The MA Organization agrees to the
following:

         (a) The Department of Health and Human Services (HHS), the Comptroller
General, or their designee may evaluate, through inspection or other means--

                  (i) The quality, appropriateness, and timeliness of services
         furnished to Medicare enrollees under the contract;

                  (ii) The facilities of the MA Organization; and

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                  (iii) The enrollment and disenrollment records for the current
         contract period and ten prior periods.

         (b) HHS, the Comptroller General, or their designees may audit,
evaluate, or inspect any books, contracts, medical records, documents, papers,
patient care documentation, and other records of the MA Organization, related
entity, contractor, subcontractor, or its transferee that pertain to any aspect
of services performed, reconciliation of benefit liabilities, and determination
of amounts payable under the contract, or as the Secretary may deem necessary to
enforce the contract.

         (c) The MA Organization agrees to make available, for the purposes
specified in section (A) of this article, its premises, physical facilities and
equipment, records relating to its Medicare enrollees, and any additional
relevant information that CMS may require, in a manner that meets CMS record
maintenance requirements.

         (d) HHS, the Comptroller General, or their designee's right to inspect,
evaluate, and audit extends through 10 years from the final date of the contract
period or completion of audit, whichever is later unless-

                  (i) CMS determines there is a special need to retain a
         particular record or group of records for a longer period and notifies
         the MA Organization at least 30 days before the normal disposition
         date;

                  (ii) There has been a termination, dispute, or fraud or
         similar fault by the MA Organization, in which case the retention may
         be extended to 10 years from the date of any resulting final resolution
         of the termination, dispute, or fraud or similar fault; or

                  (iii) HHS, the Comptroller General, or their designee
         determines that there is a reasonable possibility of fraud, in which
         case they may inspect, evaluate, and audit the MA Organization at any
         time. [422.504(e)]

B. REPORTING REQUIREMENTS

1. The MA Organization shall have an effective procedure to develop, compile,
evaluate, and report to CMS, to its enrollees, and to the general public, at the
times and in the manner that CMS requires, and while safeguarding the
confidentiality of the doctor-patient relationship, statistics and other
information as described in the remainder of this section (B). [422.516(a)]

2. The MA Organization agrees to submit to CMS certified financial information
that must include the following:

         (a) Such information as CMS may require demonstrating that the
organization has a fiscally sound operation, including:

                  (i) The cost of its operations;

                  (ii) A description, submitted to CMS annually and within 120
         days of the end of the fiscal year, of significant business
         transactions (as defined in ss.422.500) between the MA Organization and
         a party in interest showing that the costs of the transactions listed
         in paragraph (2)(a)(v) of this section do not exceed the costs that
         would be incurred if these transactions were with someone who is not a
         party in interest; or

                  (iii) If they do exceed, a justification that the higher costs
         are consistent with prudent management and fiscal soundness
         requirements.

                  (iv) A combined financial statement for the MA Organization
         and a party in interest if either of the following conditions is met:

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                           (aa) Thirty-five percent or more of the costs of
                  operation of the MA Organization go to a party in interest.

                           (bb) Thirty-five percent or more of the revenue of a
                  party in interest is from the MA Organization. [422.516(b)]

                  (v)Requirements for combined financial statements.

                           (aa) The combined financial statements required by
                  paragraph (2)(a)(iv) must display in separate columns the
                  financial information for the MA Organization and each of the
                  parties in interest.

                           (bb) Inter-entity transactions must be eliminated in
                  the consolidated column.

                           (cc) The statements must have been examined by an
                  independent auditor in accordance with generally accepted
                  accounting principles and must include appropriate opinions
                  and notes.

                           (dd) Upon written request from the MA Organization
                  showing good cause, CMS may waive the requirement that the
                  organization's combined financial statement include the
                  financial information required in paragraph (2)(a)(v) with
                  respect to a particular entity. [422.516(c)]

                  (vi) A description of any loans or other special financial
         arrangements the MA Organization makes with contractors,
         subcontractors, and related entities.

         (b) Such information as CMS may require pertaining to the disclosure of
ownership and control of the MA Organization. [422.504(f)(1)(ii)]

         (c) Patterns of utilization of the MA Organization's services.

3. The MA Organization agrees to participate in surveys required by CMS and to
submit to CMS all information that is necessary for CMS to administer and
evaluate the program and to simultaneously establish and facilitate a process
for current and prospective beneficiaries to exercise choice in obtaining
Medicare services. This information includes, but is not limited to:

         (a) The benefits covered under the MA plan;

         (b) The MA monthly basic beneficiary premium and MA monthly
supplemental beneficiary premium, if any, for the plan.

         (c) The service area and continuation area, if any, of each plan and
the enrollment capacity of each plan;

         (d) Plan quality and performance indicators for the benefits under the
plan including --

                  (i) Disenrollment rates for Medicare enrollees electing to
         receive benefits through the plan for the previous 2 years;

                  (ii) Information on Medicare enrollee satisfaction;

                  (iii) The patterns of utilization of plan services;

                  (iv) The availability, accessibility, and acceptability of the
         plan's services;

                  (v) Information on health outcomes and other performance
         measures required by CMS;

                  (vi) The recent record regarding compliance of the plan with
         requirements of this part, as determined by CMS; and

                  (vii) Other information determined by CMS to be necessary to
         assist beneficiaries in making an informed choice among MA plans and
         traditional Medicare;

         (e) Information about beneficiary appeals and their disposition;

         (f) Information regarding all formal actions, reviews, findings, or
other similar actions by States, other regulatory bodies, or any other
certifying or accrediting organization;

         (g) Any other information deemed necessary by CMS for the
administration or evaluation of the Medicare program. [422.504(f)(2)]

                                       12
<PAGE>

4. The MA Organization agrees to provide to its enrollees and upon request, to
any individual eligible to elect an MA plan, all informational requirements
under ss.422.64 and, upon an enrollee's, request, the financial disclosure
information required under ss.422.5 16. [422.504(f)(3)]

5. Reporting and disclosure under ERISA.

         (a) For any employees' health benefits plan that includes an MA
Organization in its offerings, the MA Organization must furnish, upon request,
the information the plan needs to fulfill its reporting and disclosure
obligations (with respect to the MA Organization) under the Employee Retirement
Income Security Act of 1974 (ERISA).

         (b) The MA Organization must furnish the information to the employer or
the employer's designee, or to the plan administrator, as the term
"administrator" is defined in ERISA. [422.516(d)]

6. Electronic communication. The MA Organization must have the capacity to
communicate with CMS electronically. [422.504(b)]

7. Risk Adjustment data. The MA Organization agrees to comply with the
requirements in ss.422.3 10 for submitting risk adjustment data to CMS.
[422.504(a)(8)]

                                   Article VII
                           Renewal of the MA Contract

         A. Renewal of contract: In accordance with ss.422.505, following the
initial contract period, this contract is renewable annually only if-

                  (1) The MA Organization has not provided CMS with a notice of
         intention not to renew; [422 .506(a)]

                  (2) CMS and the MA Organization reach agreement on the bid
         under 42 CFR Part 422, Subpart F; and [422.505(d)]

                  (3) CMS informs the MA Organization that it authorizes a
         renewal.

         B. Nonrenewal of contract

         (1) Nonrenewal by the Organization.

                  (a) In accordance with ss.422.506, the MA Organization may
         elect not to renew its contract with CMS as of the end of the term of
         the contract for any reason, provided it meets the time frames for
         doing so set forth in subparagraphs (b) and (c) of this paragraph.

                  (b) If the MA Organization does not intend to renew its
         contract, it must notify--

                           (i) CMS, in writing, by the first Monday in June of
                  the year in which the contract would end, pursuant to
                  ss.422.506

                           (ii) Each Medicare enrollee, at least 90 days before
                  the date on which the nonrenewal is effective. This notice
                  must include a written description of all alternatives
                  available for obtaining Medicare services within the service
                  area including alternative MA plans, Medigap options, and
                  original Medicare and prescription drug plans and must receive
                  CMS approval prior to issuance.

                           (iii) The general public, at least 90 days before the
                  end of the current calendar year, by publishing a CMS-approved
                  notice in one or more newspapers of general circulation in
                  each community located in the MA Organization's service area.

                                       13
<PAGE>

                  (c) CMS may accept a nonrenewal notice submitted after the
         applicable annual non-renewal notice deadline if --

                           (i) The MA Organization notifies its Medicare
                  enrollees and the public in accordance with subparagraph
                  (1)(b)(ii) and (1 )(b)(iii) of this section; and

                           (ii) Acceptance is not inconsistent with the
                  effective and efficient administration of the Medicare
                  program.

                  (d) If the MA Organization does not renew a contract under
         subparagraph (1), CMS will not enter into a contract with the
         Organization for 2 years from the date of contract separation unless
         there are special circumstances that warrant special consideration, as
         determined by CMS. [422 .506(a)]

         (2) CMS decision not to renew.

                  (a) CMS may elect not to authorize renewal of a contract for
         any of the following reasons:

                           (i) The MA Organization's level of enrollment, growth
                  in enrollment, or insufficient number of contracted providers
                  is determined by CMS to threaten the viability of the
                  organization under the MA program and or be an indicator of
                  beneficiary dissatisfaction with the MA plan(s) offered by the
                  organization.

                           (ii) For any of the reasons listed in ss.422.510(a)
                  [Article VIII, section (B)(1 )(a) of this contract], which
                  would also permit CMS to terminate the contract.

                           (iii) The MA Organization has committed any of the
                  acts in ss.422.752(a) that would support the imposition of
                  intermediate sanctions or civil money penalties under 42 CFR
                  Part 422 Subpart O.

                           (iv) The MA Organization did not submit a benefit and
                  price bid or the benefit and price bid was not acceptable
                  [422.505(d)]

                  (b) Notice. CMS shall provide notice of its decision whether
         to authorize renewal of the contract as follows:

                           (i) To the MA Organization by May 1 of the contract
                  year, except in the event of (2)(a)(iv) above, for which
                  notice will be sent by September 1.

                           (ii) To the MA Organization's Medicare enrollees by
                  mail at least 90 days before the end of the current calendar
                  year.

                           (iii) To the general public at least 90 days before
                  the end of the current calendar year, by publishing a notice
                  in one or more newspapers of general circulation in each
                  community or county located in the MA Organization's service
                  area.

                  (c) Notice of appeal rights. CMS shall give the MA
         Organization written notice of its right to reconsideration of the
         decision not to renew in accordance with ss. 422.644. [422.506(b)]

                                       14
<PAGE>

                                  Article VIII
                   Modification or Termination of the Contract

A. Modification or Termination of Contract by Mutual Consent

1. This contract may be modified or terminated at any time by written mutual
consent.

         (a) If the contract is modified by written mutual consent, the MA
Organization must notify its Medicare enrollees of any changes that CMS
determines are appropriate for notification within time frames specified by CMS.
[422.508(a)(2)]

         (b) If the contract is terminated by written mutual consent, except as
provided in section (A)(2) of this Article, the MA Organization must provide
notice to its Medicare enrollees and the general public as provided in section
B(2)(b)(ii) and B(2)(b)(iii) of this Article. [422.508(a)(1)]

2. If this contract is terminated by written mutual consent and replaced the day
following such termination by a new MA contract, the MA Organization is not
required to provide the notice specified in section B of this article.
[422.508(b)]

B. Termination of the Contract by CMS or the MA Organization

1. Termination by CMS.

         (a) CMS may terminate a contract for any of the following reasons:

                  (i) The MA Organization has failed substantially to carry out
         the terms of its contract with CMS.

                  (ii) The MA Organization is carrying out its contract with CMS
         in a manner that is inconsistent with the effective and efficient
         implementation of 42 CFR Part 422.

                  (iii) CMS determines that the MA Organization no longer meets
         the requirements of 42 CFR Part 422 for being a contracting
         organization.

                  (iv) There is credible evidence that the MA Organization
         committed or participated in false, fraudulent or abusive activities
         affecting the Medicare program, including submission of false or
         fraudulent data.

                  (v) The MA Organization experiences financial difficulties so
         severe that its ability to make necessary health services available is
         impaired to the point of posing an imminent and serious risk to the
         health of its enrollees, or otherwise fails to make services available
         to the extent that such a risk to health exists.

                  (vi) The MA Organization substantially fails to comply with
         the requirements in 42 CFR Part 422 Subpart M relating to grievances
         and appeals.

                  (vii) The MA Organization fails to provide CMS with valid risk
         adjustment data as required under ss.422.3 10 and 423.329(b)(3).

                  (viii) The MA Organization fails to implement an acceptable
         quality improvement program as required under 42 CFR Part 422 Subpart
         D.

                  (ix) The MA Organization substantially fails to comply with
         the prompt payment requirements in ss.422.520.

                  (x) The MA Organization substantially fails to comply with the
         service access requirements in ss.422.112.

                  (xi) The MA Organization fails to comply with the requirements
         of ss.422.20 8 regarding physician incentive plans.

                                       15
<PAGE>

                  (xii) The MA Organization substantially fails to comply with
         the marketing requirements in 422.80.

         (b) Notice. If CMS decides to terminate a contract for reasons other
than the grounds specified in section (B)(1)(a) above, it will give notice of
the termination as follows:

                  (i) CMS will notify the MA Organization in writing 90 days
         before the intended date of the termination.

                  (ii) The MA Organization will notify its Medicare enrollees of
         the termination by mail at least 30 days before the effective date of
         the termination.

                  (iii) The MA Organization will notify the general public of
         the termination at least 30 days before the effective date of the
         termination by publishing a notice in one or more newspapers of general
         circulation in each community or county located in the MA
         Organization's service area.

         (c) Immediate termination of contract by CMS.

                  (i) For terminations based on violations prescribed in
         paragraph (B)(1)(a)(v) of this article, CMS will notify the MA
         Organization in writing that its contract has been terminated effective
         the date of the termination decision by CMS. If termination is
         effective in the middle of a month, CMS has the right to recover the
         prorated share of the capitation payments made to the MA Organization
         covering the period of the month following the contract termination.

                  (ii) CMS will notify the MA Organization's Medicare enrollees
         in writing of CMS' decision to terminate the MA Organization's
         contract. This notice will occur no later than 30 days after CMS
         notifies the plan of its decision to terminate this contract. CMS will
         simultaneously inform the Medicare enrollees of alternative options for
         obtaining Medicare services, including alternative MA Organizations in
         a similar geographic area and original Medicare.

                  (iii) CMS will notify the general public of the termination no
         later than 30 days after notifying the MA Organization of CMS' decision
         to terminate this contract. This notice will be published in one or
         more newspapers of general circulation in each community or county
         located in the MA Organization's service area.

         (d) Corrective action plan

                  (i) General. Before terminating a contract for reasons other
         than the grounds specified in section (B)( 1 )(a)(v) of this article,
         CMS will provide the MA Organization with reasonable opportunity, not
         to exceed time frames specified at 42 CFR Part 422 Subpart N, to
         develop and receive CMS approval of a corrective action plan to correct
         the deficiencies that are the basis of the proposed termination.

                  (ii) Exception. If a contract is terminated under section
         (B)(1)(a)(v) of this article, the MA Organization will not have the
         opportunity to submit a corrective action plan.

         (e) Appeal rights. If CMS decides to terminate this contract, it will
send written notice to the MA Organization informing it of its termination
appeal rights in accordance with 42 CFR Part 422 Subpart N. [422.510]

2. Termination by the MA Organization

         (a) Cause for termination. The MA Organization may terminate this
contract if CMS fails to substantially carry out the terms of the contract.

         (b) Notice. The MA Organization must give advance notice as follows:

                  (i) To CMS, at least 90 days before the intended date of
         termination. This notice must specify the reasons why the MA
         Organization is requesting contract termination.

                                       16
<PAGE>

                  (ii) To its Medicare enrollees, at least 60 days before the
         termination effective date. This notice must include a written
         description of alternatives available for obtaining Medicare services
         within the service area, including alternative MA and MA-PD plans, PDP
         plans, Medigap options, and original Medicare and must receive CMS
         approval.

                  (iii) To the general public at least 60 days before the
         termination effective date by publishing a CMS-approved notice in one
         or more newspapers of general circulation in each community or county
         located in the MA Organization's geographic area.

         (c) Effective date of termination. The effective date of the
termination will be determined by CMS and will be at least 90 days after the
date CMS receives the MA Organization's notice of intent to terminate.

         (d) CMS' liability. CMS' liability for payment to the MA Organization
ends as of the first day of the month after the last month for which the
contract is in effect, but CMS shall make payments for amounts owed prior to
termination but not yet paid.

         (e) Effect of termination by the organization. CMS will not enter into
an agreement with the MA Organization for a period of two years from the date
the Organization has terminated this contract, unless there are circumstances
that warrant special consideration, as determined by CMS. [422.512]

                                   Article IX
                   Requirements of Other Laws and Regulations

A. The MA Organization agrees to comply with--

         (1) Federal laws and regulations designed to prevent or ameliorate
fraud, waste, and abuse, including, but not limited to, applicable provisions of
Federal criminal law, the False Claims Act (31 USC 3729 et seq.) , and the
anti-kickback statute (section 11 28B(b) of the Act): and

         (2) HIPAA administrative simplification rules at 45 CFR parts 160, 162,
and 164. [422.504(h)]

B. The MA Organization maintains ultimate responsibility for adhering to and
otherwise fully complying with all terms and conditions of its contract with
CMS, notwithstanding any relationship(s) that the MA organization may have with
related entities, contractors, or subcontractors. [422.504(i)]

C. In the event that any provision of this contract conflicts with the
provisions of any statute or regulation applicable to an MA Organization, the
provisions of the statute or regulation shall have full force and effect.

                                       17
<PAGE>

                                    Article X
                                  Severability

The MA Organization agrees that, upon CMS' request, this contract will be
amended to exclude any MA plan or State-licensed entity specified by CMS, and a
separate contract for any such excluded plan or entity will be deemed to be in
place when such a request is made. [422.504(k)]

                                   Article XI
                                  Miscellaneous

A. Definitions. Terms not otherwise defined in this contract shall have the
meaning given to such terms in 42 CFR Part 422.

B. Alteration to Original Contract Terms. The MA Organization agrees that it has
not altered in any way the terms of this contract presented for signature by
CMS. The MA Organization agrees that any alterations to the original text the MA
Organization may make to this contract shall not be binding on the parties.

C. Approval to Begin Marketing and Enrollment. The MA Organization agrees that
it must complete CMS operational requirements prior to receiving CMS approval to
begin Part C marketing and enrollment activities. Such activities include, but
are not limited to, establishing and successfully testing connectivity with CMS
systems to process enrollment applications (or contracting with an entity
qualified to perform such functions on the MA Organization's Sponsor's behalf)
and successfully demonstrating capability to submit accurate and timely price
comparison data. To establish and successfully test connectivity, the MA
Organization must, 1) establish and test physical connectivity to the CMS data
center, 2) acquire user identifications and passwords, 3) receive, store, and
maintain data necessary to perform enrollments and send and receive transactions
to and from CMS, and 4) check and receive transaction status information.

D. Incorporation of Applicable Addenda. All addenda checked off and initialed on
the cover sheet of this contract by the MA Organization are hereby incorporated
by reference.

                                       18
<PAGE>

In witness whereof, the parties hereby execute this contract.

FOR THE MA ORGANIZATION

/s/ Jane Murray                       CEO
------------------------------        ----------------------------------------
Printed Name                          Title

/s/ Jane Murray                       9/13/06
------------------------------        ----------------------------------------
Signature                             Date

QMedCare of New Jersey, Inc.          25 Christopher Way, Eatontown, NJ 07724
------------------------------        ----------------------------------------
Organization                          Address

FOR THE CENTERS FOR MEDICARE & MEDICAID SERVICES

/s/ David A. Lewis                    9/28/06
------------------------------        ----------------------------------------
David A. Lewis                        Date

Acting Director

Medicare Advantage Group

Center for Beneficiary Choices

                                       19
<PAGE>

                      ATTESTATION OF ENROLLMENT INFORMATION
                             RELATING TO CMS PAYMENT
                      TO A MEDICARE ADVANTAGE ORGANIZATION

         Pursuant to the contract(s) between the Centers for Medicare & Medicaid
Services (CMS) and (INSERT NAME OF MA ORGANIZATION), hereafter referred to as
the MA Organization, governing the operation of the following Medicare Advantage
plans (INSERT PLAN IDENTIFICATION NUMBERS HERE), the MA Organization hereby
requests payment under the contract, and in doing so, makes the following
attestation concerning CMS payments to the MA Organization. The MA Organization
acknowledges that the information described below directly affects the
calculation of CMS payments to the MA Organization and that misrepresentations
to CMS about the accuracy of such information may result in Federal civil action
and/or criminal prosecution. This attestation shall not be considered a waiver
of the MA Organization's right to seek payment adjustments from CMS based on
information or data which does not become available until after the date the MA
Organization submits this attestation.

         1. The MA Organization has reported to CMS for the month of (INDICATE
MONTH AND YEAR) all new enrollments, disenrollments, and changes in enrollees'
institutional status with respect to the above-stated MA plans. Based on best
knowledge, information, and belief as of the date indicated below, all
information submitted to CMS in this report is accurate, complete, and truthful.

         2. The MA Organization has reviewed the CMS monthly membership report
and reply listing for the month of (INDICATE MONTH AND YEAR) for the
above-stated MA plans and has reported to CMS any discrepancies between the
report and the MA Organization's records. For those portions of the monthly
membership report and the reply listing to which the MA Organization raises no
objection, the MA Organization, through the certifying CEO/CFO, will be deemed
to have attested, based on best knowledge, information, and belief as of the
date indicated below, to their accuracy, completeness, and truthfulness.

                                       /s/Jane Murray   CEO

                                       (INDICATE TITLE [CEO, CFO, or delegate])

                                       on behalf of

                                       QMedCare of New Jersey, Inc.

                                       (INDICATE MA ORGANIZATION)
                                       09/13/06
                                       DATE

                                       20
<PAGE>

           ATTESTATION OF RISK ADJUSTMENT DATA INFORMATION RELATING TO
                CMS PAYMENT TO A MEDICARE ADVANTAGE ORGANIZATION

         Pursuant to the contract(s) between the Centers for Medicare & Medicaid
Services (CMS) and (INSERT NAME OF MA ORGANIZATION), hereafter referred to as
the MA Organization, governing the operation of the following Medicare Advantage
plans (INSERT PLAN IDENTIFICATION NUMBERS HERE), the MA Organization hereby
requests payment under the contract, and in doing so, makes the following
attestation concerning CMS payments to the MA Organization. The MA Organization
acknowledges that the information described below directly affects the
calculation of CMS payments to the MA Organization or additional benefit
obligations of the MA Organization and that misrepresentations to CMS about the
accuracy of such information may result in Federal civil action and/or criminal
prosecution.

         The MA Organization has reported to CMS during the period of (INDICATE
DATES) all (INDICATE TYPE OF DATA - INPATIENT HOSPITAL, OUTPATIENT HOSPITAL, OR
PHYSICIAN) risk adjustment data available to the MA Organization with respect to
the above-stated MA plans. Based on best knowledge, information, and belief as
of the date indicated below, all information submitted to CMS in this report is
accurate, complete, and truthful.

                                      /s/Jane Murray   CEO

                                      (INDICATE TITLE [CEO, CFO, or delegate])

                                      on behalf of

                                      QMedCare of New Jersey, Inc.

                                      (INDICATE MA ORGANIZATION)

                                      09/13/06
                                      DATE

                                       21
<PAGE>

             ADDENDUM TO MEDICARE MANAGED CARE CONTRACT PURSUANT TO
          SECTIONS 1860D-1 THROUGH 1860D-42 OF THE SOCIAL SECURITY ACT
             FOR THE OPERATION OF A VOLUNTARY MEDICARE PRESCRIPTION
                                    DRUG PLAN
                                      H5711

The Centers for Medicare & Medicaid Services (hereinafter referred to as "CMS")
and QMedCare of New Jersey, Inc. , a managed care organization (herein after
referred to as the MA-PD Sponsor) agree to amend the contract (INSERT "H" OR "R"
NUMBER) governing the MA-PD Sponsor's operation of a Part C plan described in
Section 1851(a)(2)(A) of the Social Security Act (hereinafter referred to as
"the Act") or a Medicare cost plan to include this addendum under which the
MA-PD Sponsor shall operate a Voluntary Medicare Prescription Drug Plan pursuant
to sections 1860D-1 through 1860D-42 (with the exception of section 1860D-22 and
1860D-31) of the Act.

This addendum is made pursuant to Subpart L of 42 CFR Part 417 (in the case of
cost plan sponsors offering a Part D benefit) and Subpart K of 42 CFR Part 422
(in the case of an MA-PD Sponsor offering a Part C plan).

NOTE: For purposes of this addendum, unless otherwise noted, reference to an
"MA-PD Sponsor" or "MA-PD Plan" is deemed to include a cost plan sponsor or a MA
private fee-for-service contractor offering a Part D benefit.

                                       A-1
<PAGE>

                                    Article I
                  Medicare Voluntary Prescription Drug Benefit

A.   The MA-PD Sponsor agrees to operate one or more Medicare Voluntary
     Prescription Drug Plans as described in its application and related
     materials, including but not limited to all the attestations contained
     therein and all supplemental guidance, for Medicare approval and in
     compliance with the provisions of this addendum, which incorporates in its
     entirety the Solicitation For Applications for New Medicare Advantage
     Prescription Drug Plan (MA-PD) Sponsors, released on January 24, 2006
     [applicable to Medicare Part C contractors] or the Solicitation for
     Applications for New Cost Plan Sponsors, released on January 24, 2006
     [applicable to Medicare cost plan contractors] (hereinafter collectively
     referred to as the addendum"). The MA-PD Sponsor also agrees to operate in
     accordance with the regulations at 42 CFR ss.423.1 through 42 CFR
     ss.423.910 (with the exception of Subparts Q, R, and S), sections 1860D-1
     through 1860D-42 (with the exception of sections 1860D-22(a) and 1860D-31)
     of the Social Security Act, and the applicable solicitation identified
     above, as well as all other applicable Federal statutes, regulations, and
     policies. This addendum is deemed to incorporate any changes that are
     required by statute to be implemented during the term of this addendum and
     any regulations or policies implementing or interpreting such statutory
     provisions.

B.   CMS agrees to perform its obligations to the MA-PD Sponsor consistent with
     the regulations at 42 CFR ss.423.1 through 42 CFR ss.423.910 (with the
     exception of Subparts Q, R, and S), sections 1860D-I through 1860D-42 (with
     the exception of sections 1860D-22(a) and 1860D-31) of the Social Security
     Act, and the applicable solicitation, as well as all other applicable
     Federal statutes, regulations, and policies.

C.   CMS agrees that it will not implement, other than at the beginning of a
     calendar year, regulations under 42 CFR Part 423 that impose new,
     significant regulatory requirements on the MA-PD Sponsor. This provision
     does not apply to new requirements mandated by statute.

D.   This addendum is in no way intended to supersede or modify 42 CFR, Parts
     417, 422. or 423. Failure to reference a regulatory requirement in this
     addendum does not affect the applicability of such requirements to the
     MA-PD Sponsor and CMS.

                                   Article II
                 Functions to be Performed by the MA-PD Sponsor

A.   ENROLLMENT

     1.   MA-PD Sponsor agrees to enroll in its MA-PD plan only Part D-eligible
          beneficiaries as they are defined in 42 CFR ss.423.30(a) and who have
          elected to enroll in MA-PD Sponsor's Part C or Section 1876 benefit.

                                      A-2
<PAGE>

     2.   If the MA-PD Sponsor is a cost plan sponsor, the MA-PD Sponsor
          acknowledges that its Section 1876 plan enrollees are not required to
          elect enrollment in its Part D plan.

B.   PRESCRIPTION DRUG BENEFIT

     1.   MA-PD Sponsor agrees to provide the required prescription drug
          coverage as defined under 42 CFR ss.423.100 and, to the extent
          applicable, supplemental benefits as defined in 42 CFR ss.423.100 and
          in accordance with Subpart C of 42 CFR Part 423. MA-PD Sponsor also
          agrees to provide Part D benefits as described in the MA-PD Sponsor's
          Part D bid(s) approved each year by CMS (and in the Attestation of
          Benefit Plan and Price, attached hereto).

     2.   MA-PD Sponsor agrees to calculate and collect beneficiary Part D
          premiums in accordance with 42 CFR ss.ss.423.286 and 423.293.

     3.   If the MA-PD Sponsors is a cost plans sponsor, it acknowledge that its
          Part D benefit is offered as an optional supplemental service in
          accordance with 42 CFR ss.417.440(b)(2)(ii).

C.   DISSEMINATION OF PLAN INFORMATION

     1.   MA-PD Sponsor agrees to provide the information required in 42 CFR
          ss.423.48.

     2.   MA-PD Sponsor agrees to disclose information related to Part D
          benefits to beneficiaries in the manner and the form specified by CMS
          under 42 CFR ss.ss.423.128 and 423.50 and in the "Marketing Materials
          Guidelines for Medicare Advantage-Prescription Drug Plans (MA-PDs) and
          Prescription Drug Plans (PDPs)."

     3.   MA-PD Sponsor certifies that all materials it submits to CMS under the
          File and Use Certification authority described in the Marketing
          Materials Guidelines are accurate, truthful, not misleading, and
          consistent with CMS marketing guidelines.

D.   QUALITY ASSURANCE/UTILIZATION MANAGEMENT

     MA-PD Sponsor agrees to operate quality assurance, cost, and utilization
     management, medication therapy management programs, and support electronic
     prescribing in accordance with Subpart D of 42 CFR Part 423.

E.   APPEALS AND GRIEVANCES

     MA-PD Sponsor agrees to comply with all requirements in Subpart M of 42 CFR
     Part 423 governing coverage determinations, grievances and appeals, and
     formulary exceptions. MA-PD Sponsor acknowledges that these requirements
     are separate and distinct from the appeals and grievances requirements
     applicable to the MA-PD Sponsor through the operation of its Part C or cost
     plan benefits.

                                      A-3
<PAGE>

F.   PAYMENT TO MA-PD SPONSOR

     1.   MA-PD Sponsor and CMS agree that payment paid for Part D services
          under the addendum will be governed by the rules in Subpart G of 42
          CFR Part 423.

     2.   If the MA-PD Sponsor is participating in the Part D Reinsurance
          Payment Demonstration, described in 70 FR 9360 (Feb. 25, 2005), it
          affirms that it will not seek payment under the demonstration for
          services provided to employer group enrollees.

G.   BID SUBMISSION AND REVIEW

     If the MA-PD Sponsor intends to participate in the Part D program for the
     future year, MA-PD Sponsor agrees to submit a future year's Part D bid,
     including all required information on premiums, benefits, and cost-sharing,
     by the applicable due date, as provided in Subpart F of 42 CFR Part 423 so
     that CMS and the MA-PD Sponsor may conduct negotiations regarding the terms
     and conditions of the proposed bid and benefit plan renewal. MA-PD Sponsor
     acknowledges that failure to submit a timely bid under this section may
     affect the sponsor's ability to offer a Part C plan, pursuant to the
     provisions of 42 CFR ss.422.4(c).

H.   COORDINATION WITH OTHER PRESCRIPTION DRUG COVERAGE

     1.   MA-PD Sponsor agrees to comply with the coordination requirements with
          State Pharmacy Assistance Programs (SPAPs) and plans that provide
          other prescription drug coverage as described in Subpart J of 42 CFR
          Part 423.

     2.   MA-PD Sponsor agrees to comply with Medicare Secondary Payer
          procedures as stated in 42 CFR ss.423.462.

I.   SERVICE AREA AND PHARMACY ACCESS

     1.   The MA-PD Sponsor agrees to provide Part D benefits in the service
          area for which it has been approved by CMS to offer Part C or cost
          plan benefits utilizing a pharmacy network and formulary approved by
          CMS that meet the requirements of 42 CFR ss.423.120.

     2.   The MA-PD Sponsor agrees to ensure adequate access to Part D-covered
          drugs at out-of-network pharmacies according to 42 CFR ss.423.124.

     3.   MA-PD Sponsor agrees to provide benefits by means of point-of-service
          systems to adjudicate prescription drug claims in a timely and
          efficient manner in compliance with CMS standards, except when
          necessary to provide access in underserved areas, I/T/U pharmacies (as
          defined in 42 CFR ss.423.100), and longterm care pharmacies (as
          defined in 42 CFR ss.423.100).

                                      A-4
<PAGE>

     4.   MA-PD Sponsor agrees to contract with any pharmacy that meets the
          MA-PD Sponsor's reasonable and relevant standard terms and conditions.
          If MA-PD Sponsor has demonstrated that it historically fills 98% or
          more of its enrollees' prescriptions at pharmacies owned and operated
          by the MA-PD Sponsor (or presents compelling circumstances that
          prevent the sponsor from meeting the 98% standard or demonstrates that
          its Part D plan design will enable the sponsor to meet the 98%
          standard during the contract year), this provision does not apply to
          MA-PD Sponsor's plan.

     5.   The provisions of 42 CFR ss.423.120(a) concerning the TRICARE retail
          pharmacy access standard do not apply to MA-PD Sponsor if the Sponsor
          has demonstrated to CMS that it historically fills more than 50% of
          its enrollees' prescriptions at pharmacies owned and operated by the
          MA-PD Sponsor. MA-PD Sponsors excused from meeting the TRICARE
          standard are required to demonstrate retail pharmacy access that meets
          the requirements of 42 CFR ss.422.112 for a Part C contractor and 42
          CFR ss.417.416(e) for a cost plan contractor.

J.   COMPLIANCE PLAN/PROGRAM INTEGRITY

     MA-PD Sponsor agrees that it will develop and implement a compliance plan
     that applies to its Part D-related operations, consistent with 42 CFR
     ss.423.504(b)(4)(vi).

K.   LOW-INCOME SUBSIDY

     MA-PD Sponsor agrees that it will participate in the administration of
     subsidies for low-income individuals according to Subpart P of 42 CFR Part
     423.

L.   BENEFICIARY FINANCIAL PROTECTIONS

     The MA-PD Sponsor agrees to afford its enrollees protection from liability
     for payment of fees that are the obligation of the MA-PD Sponsor in
     accordance with 42 CFR ss.423.505(g).

M.   RELATIONSHIP WITH RELATED ENTITIES, CONTRACTORS, AND SUBCONTRACTORS

     1.   The MA-PD Sponsor agrees that it maintains ultimate responsibility for
          adhering to and otherwise fully complying with all terms and
          conditions of this addendum.

     2.   The MA-PD Sponsor shall ensure that any contracts or agreements with
          subcontractors or agents performing functions on the MA-PD Sponsor's
          behalf related to the operation of the Part D benefit are in
          compliance with 42 CFR ss.423.505(i).

                                      A-5
<PAGE>

N.   CERTIFICATION OF DATA THAT DETERMINE PAYMENT

     MA-PD Sponsor must provide certifications in accordance with 42 CFR
     ss.423.505(k).

                                   Article III
                   Record Retention and Reporting Requirements

A.   MAINTENANCE OF RECORDS

     MA-PD Sponsor agrees to maintain records and provide access in accordance
     with 42 CFR ss.ss.423.504(d) and 505(d) and (e).

B.   GENERAL REPORTING REQUIREMENTS

     The MA-PD Sponsor agrees to submit to information to CMS according to 42
     CFR ss.ss.423.505(0, 423.514, and the "Final Medicare Part D Reporting
     Requirements," a document issued by CMS and subject to modification each
     program year.

C.   CMS LICENSE FOR USE OF PLAN FORMULARY

     PDP Sponsor agrees to submit to CMS each plan's formulary information,
     including any changes to its formularies, and hereby grants to the
     Government[, and any person or entity who might receive the formulary from
     the Government,] a non-exclusive license to use all or any portion of the
     formulary for any purpose related to the administration of the Part D
     program, including without limitation publicly distributing, displaying,
     publishing or reconfiguration of the information in any medium, including
     www.medicare.gov, and by any electronic, print or other means of
     distribution.

                                   Article IV
                       HIPAA Transactions/Privacy/Security

A.   MA-PD Sponsor agrees to comply with the confidentiality and enrollee record
     accuracy requirements specified in 42 CFR ss.423.136.

B.   MA-PD Sponsor agrees to enter into a business associate agreement with the
     entity with which CMS has contracted to track Medicare beneficiaries' true
     out-of-pocket costs.

                                      A-6
<PAGE>

                                    Article V
                            Addendum Term and Renewal

A.   TERM OF ADDENDUM

     This addendum is effective from the date of CMS' authorized
     representative's signature through December 31, 2007. This addendum shall
     be renewable for successive one-year periods thereafter according to 42 CFR
     ss.423.506. MA-PD Sponsor shall not conduct Part D-related marketing
     activities prior to October 1, 2006 and shall not process enrollment
     applications prior to November 15, 2006. MA-PD Sponsor shall begin
     delivering Part D benefit services on January 1, 2007.

B.   QUALIFICATION TO RENEW ADDENDUM

     1.   In accordance with 42 CFR ss.423.507, the MA-PD Sponsor will be
          determined qualified to renew this addendum annually only if (a) CMS
          informs the MA-PD Sponsor that it is qualified to renew its addendum;
          and (b) The MA-PD Sponsor has not provided CMS with a notice of
          intention not to renew in accordance with Article VII of this
          addendum.

     2.   Although MA-PD Sponsor may be determined qualified to renew its
          addendum under this Article, if the MA-PD Sponsor and CMS cannot reach
          agreement on the Part D bid under Subpart F of 42 CFR Part 423, no
          renewal takes place, and the failure to reach agreement is not subject
          to the appeals provisions in Subpart N of 42 CFR Parts 422 or 423.
          (Refer to Article XI for consequences of non-renewal on the Part C
          contract and the ability to enter into a Part C contract.)

                                   Article VI
                             Nonrenewal of Addendum

A.   NONRENEWAL BY THE MA-PD SPONSOR

     1.   MA-PD Sponsor may non-renew this addendum in accordance with 42 CFR
          423.507(a).

     2.   If the MA-PD Sponsor non-renews this addendum under this Article, CMS
          cannot enter into a Part D addendum with the organization for 2 years
          unless there are special circumstances that warrant special
          consideration, as determined by CMS.

B.   NONRENEWAL BY CMS

     CMS may non-renew this addendum under the rules of 42 CFR 423.507(b).
     (Refer to Article X for consequences of non-renewal on the Part C contract
     and the ability to enter into a Part C contract.)

                                      A-7
<PAGE>

                                   Article VII
            Modification or Termination of Addendum by Mutual Consent

This addendum may be modified or terminated at any time by written mutual
consent in accordance with 42 CFR 423.508. (Refer to Article X for consequences
of non-renewal on the Part C contract and the ability to enter into a Part C
contract.)

                                  Article VIII
                         Termination of Addendum by CMS

CMS may terminate this addendum in accordance with 42 CFR 423.509. (Refer to
Article X for consequences of non-renewal on the Part C contract and the ability
to enter into a Part C contract.)

                                   Article IX
                  Termination of Addendum by the MA-PD Sponsor

A.   The MA-PD Sponsor may terminate this addendum only in accordance with 42
     CFR 423.510.

B.   CMS will not enter into a Part D addendum with an organization that has
     terminated its addendum within the preceding 2 years unless there are
     circumstances that warrant special consideration, as determined by CMS.

C.   If the addendum is terminated under section A of this Article, the MA-PD
     Sponsor must ensure the timely transfer of any data or files. (Refer to
     Article X for consequences of non-renewal on the Part C contract and the
     ability to enter into a Part C contract.)

                                    Article X
     Relationship Between Addendum and Part C Contract or 1876 Cost Contract

A.   MA-PD Sponsor acknowledges that, if it is a Medicare Part C contractor, the
     termination or nonrenewal of this addendum by either party may require CMS
     to terminate or non-renew the Sponsor's Part C contract in the event that
     such non-renewal or termination prevents the MA-PD Sponsor from meeting the
     requirements of 42 CFR ss.422.4(c), in which case the Sponsor must provide
     the notices specified in this contract, as well as the notices specified
     under Subpart K of 42 CFR Part 422. MA-PD Sponsor also acknowledges that
     Article X.B. of this addendum may prevent the sponsor from entering into a
     Part C contract for two years following an addendum termination or
     non-renewal where such non-renewal or termination prevents the MA-PD
     Sponsor from meeting the requirements of 42 CFR ss.422.4(c).

                                      A-8
<PAGE>

B.   The termination of this addendum by either party shall not, by itself,
     relieve the parties from their obligations under the Part C or cost plan
     contracts to which this document is an addendum.

C.   In the event that the MA-PD Sponsor's Part C or cost plan contract (as
     applicable) is terminated or nonrenewed by either party, the provisions of
     this addendum shall also terminate. In such an event, the MA-PD Sponsor and
     CMS shall provide notice to enrollees and the public as described in this
     contract as well as 42 CFR Part 422, Subpart K or 42 CFR Part 417, Subpart
     K, as applicable.

                                   Article XI
                             Intermediate Sanctions

     The MA-PD Sponsor shall be subject to sanctions and civil monetary
     penalties, consistent with Subpart 0 of 42 CFR Part 423.

                                   Article XII
                                  Severability

     Severability of the addendum shall be in accordance with 42 CFR
     ss.423.504(e).

                                  Article XIII
                                  Miscellaneous

A.   DEFINITIONS: Terms not otherwise defined in this addendum shall have the
     meaning given such terms at 42 CFR Part 423 or, as applicable, 42 CFR Part
     422 or Part 417.

B.   ALTERATION TO ORIGINAL ADDENDUM TERMS: The MA-PD Sponsor agrees that it has
     not altered in any way the terms of the MA-PD addendum presented for
     signature by CMS. MA-PD Sponsor agrees that any alterations to the original
     text the MA-PD Sponsor may make to this addendum shall not be binding on
     the parties.

C.   ADDITIONAL CONTRACT TERMS: The MA-PD Sponsor agree to include in this
     addendum other terms and conditions in accordance with 42 CFR
     ss.423.505(j).

D.   CMS APPROVAL TO BEGIN MARKETING AND ENROLLMENT ACTIVITIES: The MA-PD
     Sponsor agrees that it must complete CMS operational requirements related
     to its Part D benefit prior to receiving CMS approval to begin MA-PD plan
     marketing activities relating to its Part D benefit. Such activities
     include, but are not limited to, establishing and successfully testing
     connectivity with CMS systems to process enrollment applications (or

                                      A-8
<PAGE>

     contracting with an entity qualified to perform such functions on MA-PD
     Sponsor's behalf) and successfully demonstrating the capability to submit
     accurate and timely price comparison data. To establish and successfully
     test connectivity, the PDP Sponsor must, 1) establish and test physical
     connectivity to the CMS data center, 2) acquire user identifications and
     passwords, 3) receive, store, and maintain data necessary to perform
     enrollments and send and receive transactions to and from CMS, and 4) check
     and receive transaction status information.

                                      A-9
<PAGE>

                      PART C/D BENEFIT PLAN(S) DESCRIPTION
                          TO BE ATTACHED TO MA CONTRACT

             SECTION 1876/PART D OPTIONAL SUPPLEMENTAL BENEFIT PLAN
               DESCRIPTION TO BE ATTACHED TO SECTION 1876 CONTRACT

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Exhibit 10.1  

 
 

IN THE UNITED STATES DISTRICT COURT
  FOR THE NORTHERN DISTRICT OF TEXAS
  FORT WORTH DIVISION    
    

	MID-CONTINENT CASUALTY COMPANY	 	§	 	 
	 	 	§	 	 
	Plaintiff,	 	§	 	 
	 	 	§	 	 
	VS.	 	§	 	C.A. NO. 4-06cv-434-A
	 	 	§	 	 
	CANO PETROLEUM, INC., W.O. ENERGY	 	§	 	 
	OF NEVADA, INC., W.O. OPERATING	 	§	 	 
	COMPANY, LTD. AND W.O. ENERGY, INC.	 	§	 	 
	 	 	§	 	 
	Defendants.	 	§	 	 

 
 

SETTLEMENT AGREEMENT AND RELEASE    
    

        This Settlement Agreement and Release (the "Agreement") is made and entered into by MID-CONTINENT CASUALTY
COMPANY, its assigns, predecessors, or successors in interest, parent and sister companies, owners, stockholders, reinsurers, officers, directors, partners, subsidiaries,
affiliates, agents, representatives, servants, employees and attorneys, (collectively "MID-CONTINENT") and CANO
PETROLEUM, INC., its assigns, predecessors, or successors in interest, parent and sister companies, owners, stockholders, officers, directors, partners, subsidiaries,
affiliates, agents, representatives, servants and employees, W.O. ENERGY OF NEVADA, INC., its assigns, predecessors, or successors in interest, parent
and sister companies, owners, stockholders, officers, directors, partners, subsidiaries, affiliates, agents, representatives, servants and employees, W.O. OPERATING
COMPANY, LTD., its assigns, predecessors, or successors in interest, parent and sister companies, owners, stockholders, officers, directors, partners, subsidiaries,
affiliates, agents, representatives, servants, employees limited partners and general partners, WO ENERGY, INC., (incorrectly identified as W.O.
Energy, Inc. in the Caption of the above-referenced C.A. NO. 4-06cv-434-A) its assigns, predecessors, or
successors in interest, parent and sister companies, owners, stockholders, officers, directors, partners, subsidiaries, affiliates, agents, representatives, servants and employees,  LADDER ENERGY COMPANIES, INC.,
 its assigns, predecessors, or successors in interest, parent and sister companies, owners, stockholders, officers,
directors, partners, subsidiaries, affiliates, agents, representatives, servants and employees, and SQUARE ONE ENERGY, INC., its assigns,
predecessors, or successors in interest, parent and sister companies, owners, stockholders, officers, directors, partners, subsidiaries, affiliates, agents, representatives, servants and employees,
(hereinafter collectively referred to as "CANO"). 

 
 

I. RECITALS    
    

        WHEREAS, MID-CONTINENT issued a commercial general liability policy of insurance to  CANO,
Policy No. 04-GL-000594906, for the term commencing July 1, 2005 and expiring July 1, 2006 with a
general aggregate limit of $2,000,000 and a per occurrence limit of $1,000,000 (the "Primary Policy"); 

        WHEREAS,
MID-CONTINENT issued a commercial excess policy of insurance, Policy No. 04-XS-139536,
for the policy term commencing July 1, 2005 and expiring July 1, 2006 with an aggregate coverage limit of $5,000,000 (the "Excess Policy"); 

 

        WHEREAS,
beginning on or about March 12, 2006, a fire or fires (the number of fires is in dispute) began in the Texas Panhandle area allegedly destroying real property and
improvements, allegedly resulting in the loss of human life and causing bodily injuries to others, and allegedly injuring or killing livestock and wildlife (the "Wildfires"); 

        WHEREAS,
CANO was served with the petition in the lawsuit styled Cause No. 9840; The Tom L. and Anne
Burnett Trust, et al. v. Cano Petroleum, Inc. et al.; In the 100th Judicial District Court of Carson County, Texas (the "Burnett
Ranches Lawsuit") on or about March 24, 2006, and CANO tendered the Burnett
Ranches Lawsuit to MID-CONTINENT on or about March 27, 2006, and demanded defense and indemnity; 

        WHEREAS,
several other lawsuits were subsequently filed against CANO as identified below, and are hereinafter referred to as the
"Underlying Lawsuits:" 

	(a)
	Cause
No. 1922; Robert and Glenda Adcock, et al. v. Cano Petroleum, Inc. et al.; In the 31st Judicial
District Court of Roberts County, Texas;

	(b)
	Cause
No. 1920; Joseph Craig Hutchison and Judy Hutchison v. Cano Petroleum, Inc. et al.; In the 31st
Judicial District Court of Roberts County, Texas;

	(c)
	Cause
No. 1923; Chisum Family Partnership Ltd. v. Cano Petroleum, Inc. et al.; In the 31st Judicial
District Court of Roberts County, Texas;

	(d)
	Cause
No. 1928, Rebecca Lee Martinez, As Next Friend of Naomi E. Villarreal, Minor Daughter as a Legal Heir of Gerardo Villarreal, Deceased, et al., v.
Cano Petroleum, Inc., et al,; In the 31st Judicial District Court of Roberts County, Texas;

	(e)
	Cause
No. 1931, Yolanda Villareal, Individually and on Behalf of, the Estate of Gerardo Villareal v. Cano Petroleum, Inc., W.O. Energy of
Nevada, Inc., W.O. Operating Company, Ltd., W.O. Energy, Inc.; In the 233rd Judicial District Court of Gray County, Texas; and

	(f)
	Cause
No. 2006CVE000964D1; Burroughs, et. al. v. Swift Transportation Co, et. al. v. Cano
Petroleum, Inc., et al.; In the 49th Judicial District Court of Webb County, Texas, transferred to the 223rd Judicial District Court of Gray
County, Texas. 

        WHEREAS,
CANO PETROLEUM, INC., W.O. ENERGY OF NEVADA, INC., W.O.
OPERATING COMPANY, LTD. and WO ENERGY, INC. tendered the Underlying Lawsuits to  MID-CONTINENT for defense and indemnity;

        WHEREAS,
a dispute arose between MID-CONTINENT and CANO concerning the
coverage under the Primary Policy and the Excess Policy for claims and lawsuits associated with the Wildfires (the "Dispute"); 

        WHEREAS,
on June 20, 2006, MID-CONTINENT filed a declaratory judgment action against  CANO styled C.A. No. 4:06-cv-434-A; Mid-Continent Casualty Company v.
Cano Petroleum, Inc., W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd., and W.O. Energy, Inc.; In the United States District Court for the
Northern District of Texas, Fort Worth Division, and on October 16, 2006, Cano Petroleum, Inc., W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd. and WO
Energy, Inc. filed Defendants' Answer to Plaintiff's First Amended Complaint and Request for Declaratory Judgment and Original Counterclaim (the "Litigation"). 

 
 

II. AGREEMENT    
    

        MID-CONTINENT and CANO desire to enter into this
Agreement in order to reach a full and final settlement of any and all claims and disputes between the parties, upon the terms and conditions set forth herein. 

2

 

        MID-CONTINENT and CANO for the good and valuable consideration set forth in
this Agreement, agree to release, settle and compromise any and all claims and disputes of any nature and kind whatsoever against one another as set forth in the terms and conditions of this
Agreement. 

 
 

III. PAYMENTS    
    

        Mid-Continent agrees to the consideration set forth as follows: 

	(a)
	MID-CONTINENT agrees to pay CANO PETROLEUM, INC. on behalf of all
named insureds the $1,000,000 policy limits of the Primary Policy.

	(b)
	MID-CONTINENT agrees to pay CANO PETROLEUM, INC. on behalf of all
named insureds the $5,000,000 policy limits of the Excess Policy.

	(c)
	MID-CONTINENT agrees to pay CANO PETROLEUM, INC. on behalf of all
named insureds $500,000 for future defense costs;

	(d)
	MID-CONTINENT agrees to pay CANO PETROLEUM, INC. on behalf of all
named insureds $144,000 in settlement of the $206,407.44 in unpaid invoices identified on the attached Schedule "A."

	(e)
	MID-CONTINENT agrees to pay directly to the vendors all reasonable and necessary litigation related expenses incurred
through December 21, 2006 that are or have been approved by David Chamberlain, and that do not appear on the attached Schedule "A."

	(f)
	MID-CONTINENT agrees to pay CANO PETROLEUM INC. on behalf of all named
insureds all reasonable and necessary attorneys fees and costs of Haynes and Boone, LLP and Sherwood and Sherwood through December 21, 2006 for work approved by David
Chamberlain at the rates previously applied by MID-CONTINENT, and that do not appear on the attached Schedule A", plus an additional $55,827
for disputed attorneys' fees during the first forty five days after March 12, 2006.

	(g)
	MID-CONTINENT agrees to pay directly to Chamberlain, McHaney all reasonable and necessary attorneys fees and costs of
Chamberlain, McHaney through December 21, 2006.

	(h)
	MID-CONTINENT agrees to be solely responsible for any amounts due to the Peterson, Farris, Pruitt and Parker law firm. 

MID-CONTINENT shall make and deliver payment of these amounts in good and payable U.S. funds to CANO PETROLEUM, INC. on behalf of all named insureds within
twenty business days of CANO's execution and delivery of this Agreement to MID-CONTINENT.

 
 

IV. GENERAL RELEASE    
    

        CANO hereby acknowledges and agrees that the Release set forth in this Agreement is a release of  MID-CONTINENT from any and all obligations it has under the Primary Policy and the Excess Policy for any and all claims or litigation
related to the Wildfires. Except as provided in this Agreement, by entering into this Agreement, CANO agrees that  MID-CONTINENT is relieved of any and all
responsibility under the Primary Policy and the Excess Policy for the Wildfires. 

3

 

        CANO further releases MID-CONTINENT from any and all obligations, claims,
liens, demands, controversies, actions or causes of action, of whatever kind and nature, known or unknown, for or relating to attorney's fees relating to the Wildfires, except as specifically stated
in paragraph III of this Agreement, including, but not limited to, any claims of Haynes and Boone for unpaid attorney's fees. CANO hereby
acknowledges and agrees that any and all obligations, claims, liens, demands, controversies, actions or causes of action, of whatever kind and nature, known or unknown, for or relating to attorney's
fees relating to the Wildfires, except as specifically stated in paragraph III of this Agreement, are hereby extinguished and/or satisfied. 

 
 

V. MUTUAL RELEASE AND MUTUAL INDEMNITY    
    

        Except as provided in this Agreement, MID-CONTINENT and  CANO mutually and fully release,
settle with, and forever discharge each other from and against any and all claims, demands, controversies, actions, or
causes of action of whatever kind or nature, whether known or unknown, whether joint or several, and whether or not within the contemplation of the parties, which the parties may have had, may now
have, or may hereinafter have or claim to have against each other arising from the Primary Policy, the Excess Policy, the Wildfires, the Burnett Ranches
Lawsuit, the Underlying Lawsuits, the Dispute and/or the Litigation. 

        CANO AGREES TO DEFEND AND INDEMNIFY MID-CONTINENT OF AND FROM ANY AND ALL ACTIONS OF ANY KIND AND NATURE WHATSOEVER, PURSUED BY ANYONE OR ANY ENTITY
RELATING TO OR ARISING FROM THE PRIMARY POLICY, THE EXCESS POLICY, THE BURNETT RANCHES LAWSUIT, THE UNDERLYING LAWSUITS, OR ANY FUTURE CLAIMS OR
LAWSUITS AGAINST CANO ATTRIBUTABLE TO THE WILDFIRES, THE DISPUTE AND/OR THE LITIGATION, EXCEPT AS SPECIFICALLY SET FORTH IN PARAGRAPH III OF THIS AGREEMENT. CANO AGREES TO DEFEND AND INDEMNIFY
MID-CONTINENT OF AND FROM ANY AND ALL ACTIONS OF ANY KIND AND NATURE WHATSOEVER PURSUED BY ANY VENDOR, EXPERT, CONSULTANT, LAWYER, LAW FIRM OR THIRD-PARTY LITIGATION SUPPORT PROVIDER OF
ANY KIND, INCLUDING HAYNES AND BOONE, LLP, FOR FEES, INVOICES OR AMOUNTS DUE OR CLAIMED TO BE DUE, NOW OR IN THE FUTURE, ARISING FROM THE PRIMARY POLICY, THE EXCESS POLICY, THE  BURNETT RANCHESLAWSUIT, THE UNDERLYING LAWSUITS, OR ANY FUTURE CLAIMS OR LAWSUITS AGAINST CANO ATTRIBUTABLE TO THE WILDFIRES, THE DISPUTE AND/OR THE
LITIGATION EXCEPT AS SPECIFICALLY SET FORTH IN PARAGRAPH III OF THIS AGREEMENT. THIS INDEMNITY IS SUBJECT TO A WARRANTY BY MID-CONTINENT THAT SCHEDULE "A" REFLECTS ALL UNPAID AMOUNTS
RELATING TO THE BURNETT RANCHES LAWSUIT AND/OR THE UNDERLYING LAWSUITS OF WHICH MID-CONTINENT IS AWARE, BASED UPON THE INFORMATION PROVIDED
TO MID-CONTINENT BY CANO AND/OR ITS LAWYERS, THAT ARE ATTRIBUTABLE TO SERVICES PERFORMED ON OR BEFORE DECEMBER 21, 2006 BY ALL VENDORS, EXPERTS, CONSULTANTS, LAWYERS, LAW FIRMS OR
THIRD-PARTY PROVIDERS OF ANY KIND, OTHER THAN HAYNES AND BOONE, LLP. THIS INDEMNITY DOES NOT APPLY TO ANY DISPUTE THAT HAS ARISEN OR MAY ARISE BETWEEN MID-CONTINENT AND ANY OF ITS
REINSURERS.

        MID-CONTINENT AGREES TO DEFEND AND INDEMNIFY CANO OF AND FROM ANY AND ALL ACTIONS OF ANY KIND AND NATURE WHATSOEVER AGAINST CANO PURSUED BY ANYONE OR
ANY ENTITY RELATING TO OR ARISING OUT OF (1) MID-CONTINENT'S FAILURE TO PAY THE AMOUNTS SPECIFIED IN PARAGRAPH III OF THIS AGREEMENT OR (2) ATTORNEY'S FEES OF ANY LAWYER OR
LAW FIRM (OTHER THAN HAYNES AND BOONE, LLP OR SHERWOOD AND SHERWOOD) THAT ARE ATTRIBUTABLE TO SERVICES PERFORMED ON OR BEFORE DECEMBER 21, 2006 RELATING TO THE BURNETT RANCHES LAWSUIT AND/OR THE
UNDERLYING LAWSUITS.

4

 

 
 

VI. RELEASE FROM HAYNES AND BOONE    
    

        Haynes and Boone, LLP releases MID-CONTINENT from any
and all obligations, claims, liens, demands, controversies, actions or causes of action, of whatever kind and nature, known or unknown, for or relating to attorney's fees relating to or arising from
the Wildfires, the Burnett Ranches Lawsuit, the Underlying Lawsuits, or any future claims or lawsuits against CANO relating to
the Wildfires, except as specifically stated in paragraph III of this Agreement, the Dispute and/or the Litigation. Haynes and Boone,
LLP hereby acknowledges and agrees that any and all obligations, claims, liens, demands, controversies, actions or causes of action, of whatever kind and nature, known or
unknown, for or relating to attorney's fees against MID-CONTINENT relating to the Wildfires, except as specifically stated in
paragraph III of this Agreement, are hereby extinguished and/or satisfied. 

 
 

VII. WARRANTY OF CAPACITY TO EXECUTE THIS AGREEMENT    
    

        MID-CONTINENT and CANO represent and warrant that no
other person or entity has any interest in the claims, demands, obligations, or rights referred to in this Agreement, and it has the sole right and exclusive authority to execute this Agreement.  CANO
has requested that MID-CONTINENT enter into this Agreement, and it understands the
implications on its right to receive defense and indemnity benefits under the Primary Policy and the Excess Policy, and it understands the implications of this Agreement.  CANO and MID-CONTINENT have had the opportunity to have counsel of their choice to review
this Agreement. CANO and MID-CONTINENT are entering into this Agreement voluntarily and
willingly. 

 
 

VIII. NO ADMISSION OF LIABILITY    
    

        It is understood and agreed that this Settlement Agreement is a compromise of disputed claims, and that payments made and consideration given in connection with
this settlement are not intended, nor are they to be construed, as an admission of liability on the part of any party. 

 
 

IX. ENTIRE AGREEMENT AND SUCCESSORS IN INTEREST    
    

        This Agreement, and the attached Schedule "A" contains the entire agreement between MID-CONTINENT and  CANO with regard to the matters set forth herein and shall be binding upon and inure to the benefit of the executors, administrators, personal
representatives, heirs, successors, and assigns of each. There are no oral agreements. 

 
 

X. REPRESENTATION OF COMPREHENSION OF DOCUMENT    
    

        In entering into this Agreement, CANO and  MID-CONTINENT represent that they have completely
read this Agreement, and that they fully understand it and voluntarily accept it.  CANO and MID-CONTINENT further represent that they have had the
opportunity to revise any
aspect of this Agreement and that they have not been coerced or induced into executing this Agreement in any way by any person. 

 
 

XI. GOVERNING LAW    
    

        This Agreement shall be enforced, governed, construed and interpreted in accordance with the laws of the State of Texas. 

5

 

 
 

XII. ADDITIONAL DOCUMENTS    
    

        All Parties agree to cooperate fully and execute, acknowledge and deliver any and all supplementary documents, and to take all additional actions which may be
necessary or appropriate to give full force and effect to the basic terms and intent of this Agreement. This includes, but is not limited to, the necessary documentation to dismiss the Litigation with
prejudice. MID-CONTINENT agrees to file the necessary paperwork to dismiss the Litigation with prejudice within ten business days after  CANO executes and
delivers the Agreement to MID-CONTINENT. CANO agrees to file the necessary
paperwork to dismiss its Counter-Claims in the Litigation with prejudice within ten business days after actual receipt of the executed Agreement by  MID-CONTINENT and full payment to CANO PETROLEUM, INC. on behalf of all named
insureds of all amounts specified herein. The parties agree to send an executed copy of the Agreement to the other's counsel via facsimile the same day as execution. The parties agree that successful
transmission of an executed copy of the Agreement by facsimile will constitute actual delivery. 

 
 

XIII. SEVERABILITY    
    

        In the event that any one or more of the provisions contained in this Settlement Agreement shall, for any reason, be held to be invalid, illegal or unenforceable,
in any respect, such invalidity, illegality or unenforceability shall not affect any of the remaining provisions hereof, and this Settlement Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. 

 
 

XIV. JOINT EFFORT TO PREPARE    
    

        This Settlement Agreement has been negotiated and prepared by the joint efforts of the attorneys of the Parties, and the Parties themselves, and shall not be
construed against any particular party. 

 
 

XV. EFFECTIVENESS    
    

        This Settlement Agreement shall become effective following execution and delivery by CANO.

 
 

XVI. CONFIDENTIALITY    
    

        The Parties hereby agree that the terms of this Agreement shall, unless otherwise required under applicable law or the rules of any applicable stock exchange,
remain confidential. This confidentiality provision also does not prohibit disclosure by the parties to their lawyers, auditors, tax advisors or other professionals as necessary to obtain professional
services or advice, or to those entities to which the parties are contractually obligated, or as required by applicable law. 

        Agreed
this            day of                        , 2007. 

6

 

f

	

 	
 	
 APPROVED:
	

 	
 	

CANO PETROLEUM, INC.
	

 	
 	
 By:	

/s/ S. Jeffrey Johnson

	 	 	Print Name:	S. Jeffrey Johnson

	 	 	Title:	Chairman and Chief Executive Officer

	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF TARRANT	 	§

        BEFORE
ME, the undersigned authority, on this day appeared S. Jeffrey Johnson, an authorized representative of CANO PETROLEUM, INC., known to me to be the person whose name
is subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. 

        GIVEN
UNDER MY HAND AND SEAL OF OFFICE this 9th day of February, 2007. 

	

 	
 	

/s/ Sandra C. Durazo
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: 10-01-2007

7

 

	

 	
 	
 W.O. ENERGY OF NEVADA, INC.
	

 	
 	
 By:	

/s/ S. Jeffrey Johnson

	 	 	Print Name:	S. Jeffrey Johnson

	 	 	Title:	President

	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF TARRANT	 	§

        BEFORE
ME, the undersigned authority, on this day appeared S. Jeffrey Johnson, an authorized representative of W.O. ENERGY OF NEVADA, INC., known to me to be the
person whose name is subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. 

        GIVEN
UNDER MY HAND AND SEAL OF OFFICE this 9th day of February, 2007. 

	

 	
 	

/s/ Sandra C. Durazo
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: 10-01-2007

8

 

	

 	
 	
 W.O. OPERATING COMPANY, LTD.,

By: WO ENERGY, INC., its general partner
	

 	
 	
 By:	

/s/ S. Jeffrey Johnson

	 	 	Print Name:	S. Jeffrey Johnson

	 	 	Title:	President

	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF TARRANT	 	§

        BEFORE
ME, the undersigned authority, on this day appeared S. Jeffrey Johnson, an authorized representative of WO ENERGY, INC. in its capacity as general partner of
W.O. OPERATING COMPANY, LTD. known to me to be the person whose name is subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the
purposes and consideration therein expressed. 

        GIVEN
UNDER MY HAND AND SEAL OF OFFICE this 9th day of February, 2007. 

	

 	
 	

/s/ Sandra C. Durazo
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: 10-01-2007

9

 

	

 	
 	
 WO ENERGY, INC.
	

 	
 	
 By:	

/s/ S. Jeffrey Johnson

	 	 	Print Name:	S. Jeffrey Johnson

	 	 	Title:	President

	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF TARRANT	 	§

        BEFORE
ME, the undersigned authority, on this day appeared S. Jeffrey Johnson, an authorized representative of WO ENERGY, INC., known to me to be the person whose name is
subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. 

        GIVEN
UNDER MY HAND AND SEAL OF OFFICE this 9th day of February, 2007. 

	

 	
 	

/s/ Sandra C. Durazo
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: 10-01-2007

10

 

	

 	
 	
 LADDER ENERGY COMPANIES, INC.
	

 	
 	
 By:	

/s/ S. Jeffrey Johnson

	 	 	Print Name:	S. Jeffrey Johnson

	 	 	Title:	President

	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF TARRANT	 	§

        BEFORE
ME, the undersigned authority, on this day appeared S. Jeffrey Johnson, an authorized representative of LADDER ENERGY COMPANIES, INC. known to me to be the person
whose name is subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. 

        GIVEN
UNDER MY HAND AND SEAL OF OFFICE this 9th day of February, 2007. 

	

 	
 	

/s/ Sandra C. Durazo
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: 10-01-2007

11

 

	

 	
 	
 SQUARE ONE ENERGY, INC.
	

 	
 	
 By:	

/s/ S. Jeffrey Johnson

	 	 	Print Name:	S. Jeffrey Johnson

	 	 	Title:	President

	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF TARRANT	 	§

        BEFORE
ME, the undersigned authority, on this day appeared S. Jeffrey Johnson, an authorized representative of SQUARE ONE ENERGY, INC., known to me to be the person whose
name is subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF
OFFICE this 9th day of February, 2007. 

	

 	
 	

/s/ Sandra C. Durazo
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: 10-01-2007

12

 

	

 	
 	
 MID-CONTINENT CASUALTY COMPANY
	

 	
 	
 By:	

/s/ Raymond H. Corley

	 	 	Print Name:	Raymond H. Corley

	 	 	Title:	Vice President Claim Operations

	STATE OF OKLAHOMA	 	§
	 	 	§
	COUNTY OF TULSA	 	§

        BEFORE
ME, the undersigned authority, on this day appeared Raymond H. Corley, an authorized representative of MID-CONTINENT CASUALTY COMPANY, known to me to be the
person whose name is subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND
SEAL OF OFFICE this 7th day of February, 2007. 

	

 	
 	

/s/ Phyllis L. Mann
 NOTARY PUBLIC in and for the State of Oklahoma
	

 	
 	

My Commission Expires: 9-22-07

13

 

	

 	
 	
 HAYNES AND BOONE, LLP
	

 	
 	
 By:	

/s/ Erika L. Blomquist

	 	 	Print Name:	Erika L. Blomquist

	 	 	Title:	Partner

	STATE OF TEXAS	 	§
	 	 	§
	COUNTY OF DALLAS	 	§

        BEFORE
ME, the undersigned authority, on this day appeared Erika L. Blomquist, an authorized representative of HAYNES AND BOONE, LLP, known to me to be the person whose name is
subscribed to the foregoing instrument and who acknowledged to me that he/she executed this document for the purposes and consideration therein expressed. 

        GIVEN
UNDER MY HAND AND SEAL OF OFFICE this 6th day of February, 2007. 

	

 	
 	

/s/ Emily Swift Crews
 NOTARY PUBLIC in and for the State of Texas
	

 	
 	

My Commission Expires: June 30, 2007

14

   
SCHEDULE A 

	
Vendor
 
	
 	

Invoice

No.
	
 	

Inv Date
	
 	

Dates of

Service
	
 	

Amount of Bill

	Britton, Ph.D., Carlton	 	 	 	07/27/06	 	 	 	$	6,820.00
	Britton, Ph.D., Carlton	 	 	 	08/25/06	 	 	 	$	6,297.00
	EED	 	10053	 	08/03/06	 	4/1/06-6/30/06	 	$	8,064.31
	EED	 	10292	 	09/12/06	 	8/1/06-8/31/06	 	$	94.08
	Flap-Air Helicopter Service, Inc.	 	217	 	08/02/06	 	Unknown	 	$	2,750.00
	ImageNet	 	1017622	 	05/02/06	 	Unknown	 	$	51,292.15
	ImageNet	 	1017631	 	05/02/06	 	Unknown	 	$	66.03
	ImageNet	 	1017792	 	05/12/06	 	Unknown	 	$	41.03
	ImageNet	 	1017814	 	05/12/06	 	Unknown	 	$	666.17
	ImageNet	 	1018454	 	06/28/06	 	Unknown	 	$	267.20
	ImageNet	 	1018500	 	06/30/06	 	Unknown	 	$	4,691.99
	ImageNet	 	1018571	 	07/10/06	 	Unknown	 	$	1,588.24
	Invetech	 	13472	 	08/31/06	 	07/01/06	 	$	852.47
	Invetech	 	13505	 	09/30/06	 	08/01/06	 	$	14,102.70
	Legal Network	 	866-2006	 	04/18/06	 	Unknown	 	$	332.50
	Legal Network	 	867-2006	 	04/18/06	 	Unknown	 	$	180.80
	Legal Network	 	885-2006	 	04/25/06	 	Unknown	 	$	17.95
	Legal Network	 	953-2006	 	05/30/06	 	Unknown	 	$	6,103.70
	Legal Network	 	966-2006	 	06/06/06	 	Unknown	 	$	2,041.20
	Legal Network	 	1028-2006	 	06/27/06	 	Unknown	 	$	9,050.35
	Legal Network	 	1039-2006	 	07/05/06	 	Unknown	 	$	12,643.60
	Legal Network	 	1046-2006	 	07/11/06	 	Unknown	 	$	4,813.60
	Legal Network	 	1061-2006	 	07/18/06	 	Unknown	 	$	3,556.95
	Legal Network	 	1062-2006	 	07/18/06	 	Unknown	 	$	825.78
	Legal Network	 	1074-2006	 	07/25/06	 	Unknown	 	$	142.85
	Legal Network	 	11124-2006	 	08/15/06	 	Unknown	 	$	661.85
	Legal Network	 	1143-2006	 	08/22/06	 	Unknown	 	$	1,205.15
	LeMaster Group, Ltd.	 	63546	 	05/16/06	 	 	 	$	8,087.50
	Litigation Solution Incorporated	 	65935	 	04/04/06	 	Unknown	 	$	51.31
	Litigation Solution Incorporated	 	66569	 	05/18/06	 	Unknown	 	$	489.83
	Litigation Solution Incorporated	 	66582	 	05/19/06	 	Unknown	 	$	43.30
	Litigation Solution Incorporated	 	66594	 	05/19/06	 	Unknown	 	$	291.73
	Litigation Solution Incorporated	 	66612	 	05/22/06	 	Unknown	 	$	12.99
	Litigation Solution Incorporated	 	66703	 	05/31/06	 	Unknown	 	$	2,615.32
	Litigation Solution Incorporated	 	66827	 	06/07/06	 	Unknown	 	$	2,201.75
	Litigation Solution Incorporated	 	67432	 	07/27/06	 	Unknown	 	$	504.39
	Litigation Solution Incorporated	 	67472	 	07/30/06	 	Unknown	 	$	210.01
	Litigation Solution Incorporated	 	67561	 	08/07/06	 	Unknown	 	$	87.68
	Litigation Solution Incorporated	 	67662	 	08/16/06	 	Unknown	 	$	207.03
	Litigation Solution Incorporated	 	67687	 	08/18/06	 	Unknown	 	$	105.75
	Litigation Solution Incorporated	 	67791	 	08/25/06	 	Unknown	 	$	545.31
	Litigation Solution Incorporated	 	68481	 	10/19/06	 	Unknown	 	$	167.79
	Litigation Solution Incorporated	 	68526	 	10/23/06	 	Unknown	 	$	531.77
	Litigation Solution Incorporated	 	68616	 	10/30/06	 	Unknown	 	$	431.31
	Litigation Solution Incorporated	 	68659	 	11/01/06	 	Unknown	 	$	108.25
	Litigation Solution Incorporated	 	68766	 	11/09/06	 	Unknown	 	$	267.92
	M/S Media Productions	 	13982	 	08/15/06	 	Unknown	 	$	258.00
	M/S Media Productions	 	14003	 	08/22/06	 	Unknown	 	$	108.00
	Magic Media, L.L.C.	 	1833	 	10/17/06	 	10/11/06	 	$	258.38
	Navigant Consulting, Inc.	 	126253-07-06	 	07/28/06	 	4/25/06-6/23/06	 	$	16,671.24
	Owens Forensic Engineering, Inc.	 	14315	 	08/01/06	 	7/17/06-7/27/06	 	$	9,173.33
	Raines, Lisa	 	 	 	09/27/06	 	9/7/06-9/22/06	 	$	2,037.25
	Raines, Lisa	 	 	 	09/27/06	 	9/5/06-9/22/06	 	$	5,604.75
	Raines, Lisa	 	 	 	10/16/06	 	9/25/06-10/09/06	 	$	2,530.50
	Raines, Lisa	 	 	 	10/16/06	 	9/25/06-10/13/06	 	$	511.00
	Raines, Lisa	 	 	 	10/12/06	 	Unknown	 	$	1,615.90
	Raines, Lisa	 	 	 	11/20/06	 	11/15/06-11/19/06	 	$	723.50
	Raines, Lisa	 	 	 	11/20/06	 	10/17/06-11/4/06	 	$	6,798.50
	Raines, Lisa	 	 	 	11/20/06	 	10/16/06-11/19/06	 	$	818.00
	Sir Speedy	 	63238	 	09/22/06	 	 	 	$	1,164.45
	Slick Corporation	 	 	 	04/21/06	 	 	 	$	1,600.00
	United American Reporting	 	90016	 	10/25/06	 	10/11/06	 	$	404.05
	 	 	 	 	 	 	 	 	$	206,407.44

15

QuickLinks

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS FORT WORTH DIVISION

SETTLEMENT AGREEMENT AND RELEASE

I. RECITALS

II. AGREEMENT

III. PAYMENTS

IV. GENERAL RELEASE

V. MUTUAL RELEASE AND MUTUAL INDEMNITY

VI. RELEASE FROM HAYNES AND BOONE

VII. WARRANTY OF CAPACITY TO EXECUTE THIS AGREEMENT

VIII. NO ADMISSION OF LIABILITY

IX. ENTIRE AGREEMENT AND SUCCESSORS IN INTEREST

X. REPRESENTATION OF COMPREHENSION OF DOCUMENT

XI. GOVERNING LAW

XII. ADDITIONAL DOCUMENTS

XIII. SEVERABILITY

XIV. JOINT EFFORT TO PREPARE

XV. EFFECTIVENESS

XVI. CONFIDENTIALITY

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}]]