Document:

vhgi8kex102080510.htm

 

MOS ACQUISITION, LLC

 

SECURED PROMISSORY NOTE

 

$1,000,000 July 30, 2010

 

FOR VALUE RECEIVED, the undersigned, MOS Acquisition, LLC, a Florida limited liability company (“Maker”), hereby promises to pay to the order of Medical Office Software, Inc., a Florida corporation, or its successors or assigns (“Payee”), the principal sum of One Million and No/100 Dollars ($1,000,000), together with interest on the unpaid principal balance outstanding from time to time as described below.  All payments on this Secured Promissory Note (this “Note”) shall be due and payable in lawful money of the United States of America.

 

1. Principal Payments.  Subject to the other provisions of this Note, the principal of this Note shall be due and payable as follows: (A) $100,000 payable on August 2, 2010 and (B) $900,000 payable on September 30, 2010 (the “Final Payment”); provided, however if the Final Payment is made on or before August 31, 2010, then the amount of the Final Payment shall be $800,000 and the total principal of this Note shall be reduced to $900,000.

 

2. Interest Payments.  Maker agrees to pay interest on the outstanding principal of this Note hereof from the date hereof until payment in full, which interest shall be payable at the rate of six percent (6.00%) per annum; provided, however, that upon the occurrence of an Event of Default (as defined below), then to the extent permitted by law, Maker will pay interest to the Payee, payable on demand, on the outstanding principal balance of the Note from the date of the Event of Default until payment in full at the rate of ten percent (10%) per annum. Accrued but unpaid interest on this Note shall be due and payable at the time of the Final Payment. Interest shall be calculated on the basis of a 365-day year for the actual number of days elapsed.

 

3. Prepayments.  The unpaid principal balance of this Note or any accrued but unpaid interest thereon may be prepaid in whole or in part at any time by Maker.  Any such prepayment shall be applied first to accrued but unpaid interest on this Note, and thereafter to the outstanding principal balance of this Note.

 

4. Method of Payment.  All payments made under this Note, whether of principal or interest, shall be made by Maker to the holder hereof on the date specified or provided herein and shall be delivered by means of a wire transfer of immediately available funds to an account specified by Payee.  Whenever payment hereunder shall be due on a day which is not a Business Day (as hereinafter defined), the date for payment thereof shall be extended to the next succeeding Business Day.  If the date for any payment is extended by operation of law or otherwise, interest thereon shall be payable for such extended time.  As used herein, “Business Day” means every day which is not a Saturday, Sunday or legal holiday.

 

5. Security.  The payment of the principal of, and interest on, this Note, as well as other amounts that may become due and payable under this Note, is secured by a security interest in the Purchased Assets (as defined in that certain Asset Purchase Agreement, of even date herewith, by and among Maker, Payee and VHGI Holdings, Inc. (the “Asset Purchase Agreement”) as provided in the  Asset Purchase Agreement.

 

 

  

1

  

 

6. Events of Default.  The following shall constitute events of default (“Events of Default”) hereunder:

 

(a) failure of Maker to make any payment on this Note as and when the same becomes due and payable in accordance with the terms hereof; provided that with respect to the payment due on September 30, 2010, Maker has not cured such default within two (2) Business Days after receiving written notice of default thereof from Payee, which written notice shall be addressed to Robert Lyle Thompson;

 

(b) failure of Maker to perform any other covenant contained herein;

 

(c) a breach of Section 8.7 of the Asset Purchase Agreement;

 

(d) if Maker makes an assignment for the benefit of creditors, or petitions or applies for the appointment of a liquidator, receiver or custodian (or similar official) of it or of any substantial part of its assets, or if Maker commences any proceeding or case relating to it under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction, or takes any action to authorize any of the foregoing; or

 

(e) if any petition or application of the type described in subparagraph (c) immediately above is filed or if any such proceeding or case described in subparagraph (c) is commenced against Maker and is not dismissed within fifteen (15) days, or if Maker indicates its approval thereof, consents thereto or acquiesces therein, or if an order is entered appointing any such liquidator or receiver or custodian (or similar official), or adjudicating Maker bankrupt or insolvent, or approving a petition in any such proceeding, or if a decree or order for relief is entered in respect of Maker in an involuntary case under the Bankruptcy Code or any other bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction.

 

In the event any one or more of the Events of Default specified above occurs, the Bill of Sale attached hereto as Exhibit A (the “Springing Bill of Sale”) and the Domain Name Assignment attached hereto as Exhibit B (the “Springing Domain Name Assignment”) shall automatically and without any further actions on the part of Maker or Payee become effective and shall automatically vest in Payee the ownership and title in the Purchased Assets; and the holder of this Note may (i) proceed to protect and enforce its rights either by suit in equity or by action at law, or by other appropriate proceedings, whether for the specific performance of any covenant or agreement contained in this Note, the Springing Bill of Sale and in the Springing Domain Name Assignment, or in aid of the exercise of any power or right granted by this Note, the Springing Bill of Sale and/or the Springing Domain Name Assignment, or (iii) enforce any other legal or equitable right of the holder of this Note (including, without limitation, the Uniform Commercial Code).  Payee hereby agrees to hold the Springing Bill of Sale and the Springing Domain Assignment and not take any action with respect thereto until an Event of Default occurs.

 

 

  

2

  

 

7. Delay or Omission Not Waiver.  No delay or omission on the part of the holder of this Note in the exercise of any power, remedy or right under this Note, or under any other instrument executed pursuant hereto, shall operate as a waiver thereof, nor shall a single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other right or power hereunder.

 

8. Waiver.  Any term, covenant, agreement or condition of this Note may, only with the written consent of Maker and Payee, be amended or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), altered, modified or amended.

 

9. Attorneys’ Fees and Costs.  In the event an Event of Default shall occur, and in the event that thereafter this Note is placed in the hands of an attorney for collection, or in the event this Note is collected in whole or in part through legal proceedings of any nature, then and in any such case Maker promises to pay all reasonable costs of collection, including, but not limited to, reasonable attorneys’ fees and court costs incurred by Agent on account of such collection, whether or not suit is filed.

 

10. Successors and Assigns.  All of the covenants, stipulations, promises and agreements in this Note made by Maker and Payee (by virtue of its acceptance of this Note) shall bind its successors and assigns, whether so expressed or not.

 

11. Maximum Lawful Rate.  It is the intent of the Maker and the holder of this Note to conform to and contract in strict compliance with applicable usury law from time to time in effect.  In no way, nor in any event or contingency (including but not limited to prepayment, default, demand for payment, or acceleration of the maturity of any obligation), shall the rate of interest taken, reserved, contacted for, charged or received under this Note exceed the highest lawful interest rate permitted under applicable law.  If the holder of this Note shall ever receive anything of value which is characterized as interest under applicable law and which would apart from this provision be in excess of the highest lawful interest rate permitted under applicable law, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on this Note in the inverse order of its maturity and not to the payment of interest, or refunded to Maker or the other payor thereof if and to the extent such amount which would have been excessive exceeds such unpaid principal.  All interest paid or agreed to be paid to the holder hereof shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full stated term (including any renewal or extension) of this Note so that the amount of interest on account of such obligation does not exceed the maximum permitted by applicable law.  As used in this Section, the term “applicable law” shall mean the laws of the State of Georgia or the federal laws of the United States, whichever laws allow the greater interest, as such laws now exist or may be changed or amended or come into effect in the future.

 

12. Governing Law.  This Note shall be governed by, and construed and enforced in accordance with, the substantive laws (but not the rules governing conflicts of laws) of the State of Texas.

 

 

  

3

  

 

13. Notice.  Any notice or demand given hereunder shall be deemed to have been given and received (i) when actually received by the receiving party, if delivered in person, by e-mail transmission or by facsimile transmission (as evidenced by confirmation) or by overnight courier service, or (ii) if mailed, on the earlier of the date actually received or (whether ever received or not) three Business Days after a letter containing such notice, certified or registered, with postage prepaid, addressed to the receiving party, is deposited in the United States mail.

 

14. Severability.  In case any one or more of the provisions contained in this Note shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof.

 

EXECUTED as of the date set forth above.

 

	 	
MOS ACQUISITION, LLC,

	 	 
	 	
By:        SILK INFORMATION SYSTEMS, INC.

	 	
its Manager

	 	 
	 	
By:s/Robert Lyle Thompson                                                                

	 	
Robert Lyle Thompson,

	 	
President and CEO

	 	 
	 	
This Note is executed by Medical Office Software, Inc. solely to acknowledge its obligation set forth in the last sentence of Paragraph 6

	 	 
	 	
MEDICAL OFFICE SOFTWARE, INC.

	 	 
	 	
By: s/Scott A. Haire

	 	
Scott A. Haire,

	 	
Chief Executive Officer

 

 

 

 

 

  

4

  

 

EXHIBIT A

 

Springing Bill of Sale

 

BILL OF SALE

 

This Bill of Sale (“Bill of Sale”), dated as of July 30, 2010, is made by MOS Acquisition, LLC, a Florida limited liability company (the “Transferor”), in favor of, and for the benefit of, Medical Office Software, Inc., a Florida corporation (the “Transferee”). All capitalized terms used without definition herein shall have the meaning specified in the Asset Purchase Agreement (as defined below).

 

WHEREAS, Transferee, Transferor and VHGI Holdings, Inc., a Delaware corporation, are parties to an Asset Purchase Agreement dated July 30, 2010 (the “Asset Purchase Agreement”); and

 

WHEREAS, pursuant to the Asset Purchase Agreement, Transferee sold the Purchased Assets to Transferor; and

 

WHEREAS, pursuant to the Asset Purchase Agreement part of the consideration paid by Transferor to Transferee for the Purchased Assets was the issuance of the Promissory Note; and

 

WHEREAS, pursuant to the Promissory Note if an Event of Default (as defined in the Promissory Note) occurs, then this Bill of Sale shall automatically and without any further actions on the part of Transferee or Transferor become effective and shall automatically vest in Transferee the ownership and title in the Purchased Assets; and

 

WHEREAS, an Event of Default (as defined in the Promissory Note) has occurred;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Transferor does hereby sell, transfer, assign, convey and deliver unto Transferee all of Transferor’s right, title and interest in and to all of the Purchased Assets free and clear of all liabilities (fixed or contingent), obligations, security interests, liens, claims or encumbrances (collectively, “Encumbrances”) other than the Permitted Encumbrances that existed as of the date of Closing and Assumed Liabilities assumed by Transferor at Closing and hereby.

 

TO HAVE AND TO HOLD the Purchased Assets unto Transferee, its successors and assigns, to and for its or their use forever.

 

Transferor has not executed any prior bill of sale, assignment, or other conveyance to any other party of all or any portion of the property conveyed hereby which is still in effect as of the date hereof.

 

From time to time at the request of Transferee, Transferor shall, without further consideration, execute and deliver to Transferee such instruments of conveyance, transfer, assignment and confirmation and take such other action and/or authorize Transferee to take such action, as Transferee may reasonably request in order for Transferee to obtain the full benefit of the transfer of the Purchased Assets from Transferor to Transferee.

 

 

 

 

 

 

All of the terms and provisions of this Bill of Sale shall be binding upon each party hereto and their respective successors and assigns, and shall inure to the benefit of each other party and its successors and assigns. This Bill of Sale cannot be amended, modified or terminated without the prior written consent of Transferor; provided, however, Transferee may fill in the date of this Bill of Sale upon the occurrence of an Event of Default under the Promissory Note.

 

This Bill of Sale is a contract made under and shall be governed by and construed in accordance with the laws of the State of Georgia.

 

IN WITNESS WHEREOF, Transferee has duly executed this Bill of Sale on the day and year first above written.

 

	 	MOS ACQUISITION, LLC,	 
	 	 	 	 
	 	By: 	SILK INFORMATION SYSTEMS, INC. 	 
	 	 	its Manager 	 
	 	 	 	 
	
 

	
By: 

	/s/ Robert Lyle Thompson	 
	 	 	Robert Lyle Thompson,	 
	 	 	
 

	 

 

 

 

 

  

 

  

 

 

BILL OF SALE

 

This Bill of Sale (this “Bill of Sale”), dated as of July 30, 2010, is made by MOS Acquisition, LLC, a Florida limited liability company (the “Purchaser”), in favor of, and for the benefit of, Medical Office Software, Inc., a Florida corporation (the “Seller”). All capitalized terms used without definition herein shall have the meaning specified in the Asset Purchase Agreement (as defined below).

 

WHEREAS, Seller, Purchaser and VHGI Holdings, Inc., a Delaware corporation, are parties to an Asset Purchase Agreement of even date herewith (the “Asset Purchase Agreement”); and

 

WHEREAS, pursuant to the Asset Purchase Agreement, Seller is required to sell to Purchaser the Purchased Assets free and clear of all liabilities (fixed or contingent), obligations, security interests, liens, claims or encumbrances (collectively, “Encumbrances”) other than the Permitted Encumbrances and Assumed Liabilities; and

 

WHEREAS, by this Bill of Sale Seller desires to sell, transfer, assign, convey and deliver to Purchaser the Purchased Assets, free and clear of all Encumbrances other than the Permitted Encumbrances and Assumed Liabilities;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller does hereby sell, transfer, assign, convey and deliver unto Purchaser all of Seller’s right, title and interest in and to all of the Purchased Assets free and clear of all Encumbrances other than the Permitted Encumbrances and Assumed Liabilities.  It is expressly understood that this instrument is intended solely to restate, and not in any manner to amend, modify, enlarge or limit any warranties or agreements contained in, the Asset Purchase Agreement and each of the covenants, agreements, representations and warranties, and indemnities contained therein with respect to the Purchased Assets is hereby incorporated by reference as if set forth herein in full.

 

TO HAVE AND TO HOLD the Purchased Assets unto Purchaser, its successors and assigns, to and for its or their use forever.

 

Seller has not executed any prior bill of sale, assignment, or other conveyance to any other party of all or any portion of the property conveyed hereby which is still in effect as of the date hereof.

 

From time to time at the request of Purchaser, Seller shall, without further consideration, execute and deliver to Purchaser such instruments of conveyance, transfer, assignment and confirmation and take such other action and/or authorize Purchaser to take such action, as Purchaser may reasonably request in order for Purchaser to obtain the full benefit of the transfer of the Purchased Assets from Seller to Purchaser.

 

All of the terms and provisions of this Bill of Sale shall be binding upon each party hereto and their respective successors and assigns, and shall inure to the benefit of each other party and its successors and assigns. This Bill of Sale cannot be amended, modified or terminated without the prior written consent of Purchaser.

 

This Bill of Sale is a contract made under and shall be governed by and construed in accordance with the laws of the State of Georgia.

 

IN WITNESS WHEREOF, Seller has duly executed this Bill of Sale on the day and year first above written.

 

	 	MEDICAL OFFICE SOFTWARE, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ Scott A. Haire	 
	 	 	Scott A. Haire,	 
	 	 	

Chief Executive Officer

	 

 

 

  

  

  

 

 

 

EXHIBIT B

 

 

Springing Domain Name Assignment

 

 

 

DOMAIN NAME ASSIGNMENT

 

 

THIS DOMAIN NAME ASSIGNMENT (“Assignment”) is made and entered into this ____30th____ day of ___July, 2010 (the “Effective Date”), by and among MOS Acquisition, LLC, a Florida limited liability company (“Seller”) and Medical Office Software, Inc., a Florida corporation (“Purchaser”).

 

For and in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Seller and Purchaser agree:

 

Section 1  Transfer. Seller, effective as of the Effective Date, hereby transfers, assigns, conveys, and sets over to Purchaser all of its right, title, and interest in and to the Domain Names.  Promptly after the request of Purchaser, Seller agrees, with out further consideration, to execute a separate Assignment form, as required by Network Solutions, Inc. or any other applicable domain name registrar, assigning the Domain Names to Purchaser and to take any and all reasonable actions necessary to complete the formal transfer of the registration of the Domain Names to Purchaser.  Seller agrees to cease all use of the Domain Names within 10 business days of the execution of this Agreement.

 

Section 2    Power of Attorney.  Seller hereby makes, constitutes, and appoints Purchaser, its successors or assigns, the true and lawful attorney of Seller with full power of substitution, for the benefit and at the expense of Purchaser:  (a) to execute such assignment forms, as required by Network Solutions, Inc. or any other applicable domain name registrar, assigning the Domain Names to Purchaser , and (b) to take all action which Purchaser may deem proper in order to provide Purchaser with the full benefit of the Domain Names.  Seller acknowledges that the foregoing powers are coupled with an interest and shall be irrevocable by Seller in any manner or for any reason.

 

IN WITNESS WHEREOF, Seller has executed this Domain Name Assignment on the date first above written.

 

	 	MOS ACQUISITION, LLC,	 
	 	 	 	 
	 	By: 	SILK Information Systems, Inc.,	 
	 	 	its Manager 	 
	 	 	 	 
	
 

	
By: 

	/s/ Robert Lyle Thompson	 
	 	 	Robert Lyle Thompson,	 
	 	 	
President and CEO

	 

 

        

 

 

 

  

  

  

 

 

DOMAIN NAME ASSIGNMENT

 

 

THIS DOMAIN NAME ASSIGNMENT (“Assignment”) is made and entered into this 30th day of July, 2010 (the “Effective Date”), by and among Medical Office Software, Inc., a Florida corporation (“Seller”) and MOS Acquisition, LLC, a Florida limited liability company (“Purchaser”).

 

Background

 

Seller has registered the Internet domain names “MOSONLINE.COM” and “MEDICALOFFICESOFTWARE.COM” (collectively, the “Domain Names”).  Seller, Purchaser and VHGI Holdings, Inc. have entered into an Asset Purchase Agreement dated July 30th, 2010 (the “Asset Purchase Agreement”) pursuant to which Purchaser has agreed to purchase the assets of Seller specified therein.  Pursuant to the terms of the Asset Purchase Agreement, Seller has agreed to assign all of its right, title, and interest in the Domain Names to Purchaser.  Seller and Purchaser are entering into this Assignment to effect the assignment to Purchaser of all of Seller’s right, title, and interest in the Domain Names.

 

Agreement

 

For and in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Seller and Purchaser agree:

 

Section 1   Transfer. Seller, effective as of the Effective Date, hereby transfers, assigns, conveys, and sets over to Purchaser all of its right, title, and interest in and to the Domain Names.  Promptly after the request of Purchaser, Seller agrees, with out further consideration, to execute a separate Assignment form, as required by Network Solutions, Inc. or any other applicable domain name registrar, assigning the Domain Names to Purchaser and to take any and all reasonable actions necessary to complete the formal transfer of the registration of the Domain Names to Purchaser.  Seller agrees to cease all use of the Domain Names within 10 business days of the execution of this Agreement.

 

Section 2 Power of Attorney.  Seller hereby makes, constitutes, and appoints Purchaser, its successors or assigns, the true and lawful attorney of Seller with full power of substitution, for the benefit and at the expense of Purchaser:  (a) to execute such assignment forms, as required by Network Solutions, Inc. or any other applicable domain name registrar, assigning the Domain Names to Purchaser , and (b) to take all action which Purchaser may deem proper in order to provide Purchaser with the full benefit of the Domain Names.  Seller acknowledges that the foregoing powers are coupled with an interest and shall be irrevocable by Seller in any manner or for any reason.

 

IN WITNESS WHEREOF, Seller has executed this Domain Name Assignment on the date first above written.

 

 

	 	Medical Office Software, Inc.	 
	 	 	 	 
	
 

	
By: 

	/s/Scott A. Haire	 
	 	 	Scott A. Haire, Chief Executive Officer 	 
	 	 	 	 
	 	 	 	 

 

 

 

                                                             

 

  

 

  

 

DISCLOSURE SCHEDULE

 

TO

 

ASSET PURCHASE AGREEMENT

 

Pursuant to the Asset Purchase Agreement, dated as of July 30, 2010 (the “Agreement”), by and among MOS Acquisition, LLC, a Florida limited liability company (“Purchaser”), Medical Office Software, Inc., a Florida corporation (“Seller”), and VHGI Holdings, Inc., a Delaware corporation (“Shareholder”), this Disclosure Schedule is being delivered by Seller and Shareholder to Purchaser. All terms used herein with initial capital letters have the same meanings assigned to them in the Agreement, unless otherwise defined.

 

The representations and warranties of Seller and Shareholder set forth in Article 3 of the Agreement are made and given subject to the disclosures in this Disclosure Schedule. This Disclosure Schedule should be read in their entirety.

 

In addition, this Disclosure Schedule is subject to the following terms and conditions:

 

	
·  

	
All references to Section numbers are to Sections of the Agreement, unless otherwise stated.

 

	
·  

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

 

	
·  

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

 

	
·  

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

 

	
·  

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

 

 

 

  

1

  

 

Section 1.1(a)

 

Software:

 

1. MOS

 

2. MARS (MOS Advanced Reporting System)

 

3. MADM

 

4. AHCA wizard

 

5. Claims Auto File Upload

 

6. ParseHCFA

 

 

Other Intellectual Property:

 

 

The Seller owns or possesses the legal rights to the following Internet domain names:

 

	
Domain Name

	
WhoIS Information/Registrant

	
Expiration Date

	
Registrar

	 	 	 	 
	
mosonline.com

	
Medical Office Software Inc. Eddyd@mosonline.com

	
03/07/2011

	
DomainPeople

	 	 	 	 
	
medicalofficesoftware.com

	
Medical Office Software Inc. Eddyd@mosonline.com

	
03/07/2011

	
DomainPeople

 

Section 1.2

 

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

 

Toshiba Business Solutions Maintenance Agreement with Seller Invoice 68054), dated October 4, 2006.

 

 

  

2

  

 

Section 1.3

 

	
Vendor

	
Invoice/CM #

	
0 - 30

	
31 - 60

	
61 - 90

	
Over 90 days

	
Amount Due

	 	
Date

	
Agastha Inc

	
Lustgarten1209

	  	  	  	
4,500.00

	
4,500.00

	 	
12/23/09

	
Agastha Inc

	
Clarksville1209

	  	  	  	
13,000.00

	
13,000.00

	 	
12/30/09

	
Agastha Inc

	
Escobar1209

	  	  	  	
2,999.50

	
2,999.50

	 	
12/30/09

	
Agastha Inc

	
MishkinD1209

	  	  	  	
3,000.00

	
3,000.00

	 	
12/30/09

	
Agastha Inc

	
Giachino

	  	  	  	
5,499.50

	
5,499.50

	 	
2/26/10

	
Agastha Inc

	
Northside

	  	  	
5,499.50

	  	
5,499.50

	 	
4/12/10

	
Agastha Inc

	
English

	  	  	
5,749.50

	  	
5,749.50

	 	
4/15/10

	
Agastha Inc

	
April10Support

	  	  	
400.00

	  	
400.00

	 	
4/30/10

	
Agastha Inc

	
Jan-Feb Software

	  	  	
900.00

	  	
900.00

	 	
4/30/10

	
Agastha Inc

	
MAY2010

	  	
400.00

	  	  	
400.00

	 	
5/29/10

	
Agastha Inc

	
Edel&Bust060710

	
7,999.50

	  	  	  	
7,999.50

	 	
6/7/10

	
Agastha Inc

	
Edelstein-Bust10

	
7,999.50

	  	  	  	
7,999.50

	 	
6/10/10

	
Agastha Inc

	
SupportJune10

	
650.00

	  	  	  	
650.00

	 	
6/29/10

	  	  	  	  	  	  	  	 	  
	
Agastha Inc

	  	
16,649.00

	
400.00

	
12,549.00

	
28,999.00

	
58,597.00

	 	  
	  	  	  	  	  	  	  	 	  
	  	  	  	  	  	  	  	 	  

Note:  Agastha was paid-down to $53,147.00 in July 2010.  Any invoices from Agastha from July 2010 are the responsibility of Purchaser.

 

	
Ingram Micro, Inc.

	
70-42924-11

	
513.23

	  	  	  	
513.23

	 	
6/10/10

	
Ingram Micro, Inc.

	
70-42942-11

	
513.65

	  	  	  	
513.65

	 	
6/10/10

	
Ingram Micro, Inc.

	
70-42957-11

	
223.64

	  	  	  	
223.64

	 	
6/10/10

	
Ingram Micro, Inc.

	
70-49306-11

	
1,299.64

	  	  	  	
1,299.64

	 	
6/16/10

	
Ingram Micro, Inc.

	
70-49306-21

	
2,063.10

	  	  	  	
2,063.10

	 	
6/16/10

	
Ingram Micro, Inc.

	
70-49306-31

	
1,485.75

	  	  	  	
1,485.75

	 	
6/21/10

	
Ingram Micro, Inc.

	
70-58141-11

	
1,007.19

	  	  	  	
1,007.19

	 	
6/23/10

	  	  	  	  	  	  	  	 	  
	
Ingram Micro, Inc.

	  	
7,106.20

	
 

	
 

	
 

	
7,106.20

	 	  

 

Note:  Ingram Micro, Inc. was paid-down to $1,334.20 in July 2010.  Any orders placed with Ingram Micro, Inc. in July 2010 are the responsibility of Purchaser.

 

 

  

3

  

 

Section 3.1

 

The Seller is a Florida corporation and is not listed as a foreign corporation in any other jurisdiction. The Seller operates its business solely in the State of Florida.

 

Section 3.4

 

Purchaser hereby waives all requirements to obtain any of the below consents as Purchaser will obtain new contracts.

 

Consents Needed:

 

1. Business Associate Agreement entered into and effective April 14, 2003 by and between Seller and ClaimLogic, LLC. Prior written consent is required before assignment.

 

2. PhoneTree Dealer Agreement dated March 3, 2010 between Personal Communications Systems, Inc and Seller. Prior written consent is required before assignment.

 

3. Partner Network Agreement and Trademark Licensing Addendum from Lenovo. Lenovo may terminate the agreement by written notice upon Seller’s assignment, transfer or attempt to assign or transfer the Addendum or License, in whole or in part.

 

Notification Only:

 

1.  U.S. Partner Agreement from Hewlett-Packard Company.  In the case of ownership change, Seller needs to notify HP within five (5) days prior to intended date of change, or on the earliest date Seller is legally permitted to provide such information, but not later than five (5) days after the change has occurred. No consent needed – only notification.

 

 

  

4

  

 

Section 3.8

 

Personal Property:

 

	
Servers

	
Qty

	 	
Computers Equipment

	
Qty

	 	
General Equipment

	
Qty

	
ML150-g2

	
1

	 	
DC-5100 CL

	
1

	 	
Time Clock

	
1

	
ML150-G3

	
1

	 	
DX2200 MK-KB-ED

	
3

	 	  	  
	
ML110

	
1

	 	
D220-HW

	
1

	 	  	  
	  	  	 	
D330-SW Office

	
1

	 	  	  
	  	  	 	
DC5000m-AT

	
1

	 	  	  
	  	  	 	
Laptop-KB

	
1

	 	  	  
	
Loaner Server

	  	 	
D530

	
1

	 	  	  
	
ML330

	
1

	 	
Wireless AP

	
1

	 	  	  
	  	  	 	
Netscreen Firewall

	
1

	 	  	  
	  	  	 	
E-mail Firewall

	
1

	 	  	  
	
OLD NOT USED

	
6

	 	
UPS (Battery Backup)

	
11

	 	  	  
	  	  	 	
Monitor

	
13

	 	  	  
	  	  	 	
Scanner

	
1

	 	  	  
	  	  	 	
Extra Loaner

	  	 	  	  
	  	  	 	
DX2000

	
1

	 	  	  
	  	  	 	
DC5000

	
1

	 	  	  
	  	  	 	
Lenovo Laptop

	
2

	 	  	  
	  	  	 	
HP Sales Laptop

	
1

	 	  	  
	  	  	 	
Netbook

	
1

	 	  	  
	
Copiers

	
Qty

	 	
Fax

	
Qty

	 	
Furniture

	
Qty

	
Toshbia 250

	
1

	 	
Cannon-Old

	
1

	 	
Filing Cabinets

	
6

	  	  	 	  	  	 	
Chairs

	
13

	  	  	 	  	  	 	
Desks

	
5

	  	  	 	  	  	 	
Hutch

	
1

	  	  	 	  	  	 	
Bookshelf

	
8

	  	  	 	  	  	 	
Tables

	
1

	  	  	 	  	  	 	
Book/Hutch-KB

	
1

	  	  	 	  	  	 	
Cabinet

	
2

	  	  	 	  	  	 	
Plastic Shelf

	
3

	
Telephone

	
Qty

	 	
Cell Phone

	
Qty

	 	
Printers

	
Qty

	
Handset

	
10

	 	
BlackBerry (Sprint)

	
1

	 	
1000-MK

	
1

	
Phone system owned by WCI

	 	
Samsung (Sprint)

	
2

	 	
P2015dn-Main

	
1

	  	  	 	
Nokia (ATT)

	
2

	 	
1320tn-Acct

	
1

	  	  	 	
Motorolla (ATT)

	
1

	 	  	  
	
Misc

	
Qty

	 	  	  	 	  	  
	
Motion Tablet

	
1

	 	  	 	  	  
	
WhiteBoards

	
4

	 	  	  	 	  	  
	
Docket Scanner

	
3

	 	
 

	  	 	  	  
	
SCSI Card (old)

	
5

	 	  	  	 	  	  
	
Internal Tape Drive

	
3

	 	  	  	 	  	  

Leases:

 

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

 

  

5

  

 

 

Section 3.9(a)

 

(i) The following is a list of all software that is Owned Intellectual Property:

 

     a. MOS

 

     b. MARS (MOS Advanced Reporting System)

 

     c. MADM

 

     d. AHCA wizard

 

     e. Claims Auto File Upload

 

     f. ParseHCFA

 

(ii) See Section 1.1(a) for a list of all domain names owned or used by Seller which are Licensed Intellectual Property.

 

(iii) The following is a list of all telephone phone and facsimile numbers which are all Licensed Intellectual Property:

 

     g. 1-800-486-1667

 

     h. 954-315-9100

 

     i. 954-315-9200 (fax)

 

     j. 305-586-3224 (Medical Office Software - AT&T Cellular Phone Number)

 

 

Section 3.9(c)(vi)

 

1.  See Section 3.4 for a list of all consents.

 

 

  

6

  

 

Section 3.9(d)

 

Customer Contracts:

 

	
Name

	
Quote Date

	
Total Amount

	
Wiltz Hector, MD

	
2/8/2009

	
$38,766.76

	
Dr. Rosalind Bardisa

	
2/18/2009

	
$10,117,88

	
Kendall Eye Institute

	
3/30/2009

	
$3,210.00

	
Diane Walder, MD

	
3/16/2009

	
$17,534.70

	
Neurology Group of S. Florida

	
3/25/2009

	
$24,426.82

	
Frederic L. Bushkin

	
8/17/2009

	
$4,980,94

	
Treasure Coast Hospitalist

	
9/16/2009

	
$11,152.88

	
Michael Lustgarten, MD

	
9/22/2009

	
$13,697.94

	
Juan M Escobar, MD

	
10/21/2009

	
$9,560.75

	
Clarksville Limb and Brace

	
11/9/2009

	
$24,998.00

	
David Mishkin, DO, PA

	
12/21/2009

	
$9,536.76

	
Northside Medical Assoc

	
2/9/2010

	
$13,433.20

	
Scott R. English

	
2/12/2010

	
$15,309.76

	
Juan Carlos Glachino, MD

	
2/25/2010

	
$15,231.78

	
Edelstein & Bustamante, MD

	
4/28/2010

	
$14,143.76

 

Distribution Agreements:

 

5. Agreement between Seller and Agastha, Inc. dated February 27, 2009.

 

6. U.S. Partner Agreement from Hewlett-Packard Company

 

7. Partner Network Agreement and Trademark Licensing Addendum from Lenovo.

 

8. PhoneTree Dealer Agreement dated March 3, 2010 between Personal Communications Systems, Inc and Seller.

 

9. Preferred Business Associate Agreement between ClaimLogic, LLC and Seller dated April 134, 2003.

 

10. Transaction Standard Trading Partner Addendum entered into on April 14, 2003 between Seller and ClaimLogic, LLC.

 

11. Business Associate Agreement entered into and effective April 14, 2003 by and between Seller and ClaimLogic, LLC.

 

 

Section 3.15

 

Employees:

 

 

  

7

  

 

	
Employee Name

	
Date of Hire

	
2009 Salary

	
2009 Commission

	
Car Allowance

	
2009 Total

	
Jan- May 2010

	
Barnes, Ken

	
9/29/2003

	
$150,000

	
$6,898.17

	
$6,000

	
$162,898.17

	
$68.832.10

	
Bowman, Kim

	
9/3/2008

	
$40,000

	
$3,000

	
$6,000

	
$49,000

	
$28,923.06

	
Dishueme, Eddy

	
12/17/2001

	
$70,000

	
0

	
0

	
$70,000

	
$29,615.41

	
Korner, Michael

	
11/20/2006

	
$41,000

	
0

	
0

	
$41,000

	
$17,346.12

	
Longstreet, Carolyn

	
2/9/2004

	
$60,000

	
$11,149

	  	
$71,149.70

	
$28,884.59

	
Arus Threepersons

	
4/2/2009

	
$33,280.00

	
0

	
0

	
$33,280.00

	
$14,130.00

	  	  	  	  	  	  	  
	
Independent Contractor

	  	  	  	  	  
	
Polack, Michael

	
N/A

	
$40,769.76

	
0

	
0

	
$40,769.76

	
$18,000.00

 

Section 3.16

 

12. AT&T Wireless Service Agreement for Tim Reed, Account Number 823565040.

 

13. AT&T Wireless Service Agreement for Medical Office Software, Account Number 823565040.

 

14. AT&T Wireless Service Agreement for Tracy Kollmer, Account Number 823565040.

 

15. Annual Quote Agreement between LogMeIn, Inc. and Medical Office Software dated October 2, 2009, expires October 2, 2010.

 

16. Annual Quote Agreement between LogMeIn, Inc. and Medical Office Software dated October 2, 2009, expires October 5, 2010.

 

17. Agreement between Seller and Agastha, Inc. dated February 27, 2009.

 

18. U.S. Partner Agreement from Hewlett-Packard Company April, 2010.

 

19. Partner Network Agreement from Lenovo.

 

20. PhoneTree Dealer Agreement dated March 3, 2010 between Personal Communications Systems, Inc and Seller.

 

21. Preferred Business Associate Agreement between ClaimLogic, LLC and Seller.

 

22. Transaction Standard Trading Partner Addendum entered into on April 14, 2003 between Seller and ClaimLogic, LLC.

 

23. Business Associate Agreement entered into and effective April 14, 2003 by and between Seller and ClaimLogic, LLC.

 

24. Customer Service Agreement made by and between US LEC of Florida Inc. and Seller executed on September 27, 2006.

 

 

  

8

  

 

25. See list of Customer Contracts and Distribution Agreements set forth in Section 3.9(d) of this Disclosure Schedule.

 

15.  See list of customers of Seller for the period January 1, 2010, through June 30, 2010 set forth in Section 3.16(d) of this Disclosure Schedule.  It being noted that most if not all such contracts are oral agreements, may be terminated by customer at any time, and such list is only accurate through June of 2010.

 

Section 3.16(d)

 

See Attached [To be Printed out and Attached]

 

 

Section 3.19

 

BlueCross/Blue Shield medical part of a group with the payroll service

 

 

Section 3.20

 

Only Worker’s Compensation with payroll service.

 

 

 

  

9magnum_8k-ex1001.htm

    
      

    

    EXHIBIT 10.1

     

    NON-STATUTORY
STOCK OPTION AGREEMENT

     

    THIS
NON-STATUTORY STOCK OPTION AGREEMENT (“Agreement”) executed March __, 2010 but
effective as of February 11, 2010, by and between MAGNUM HUNTER RESOURCES
CORPORATION, a Delaware corporation (“Corporation”), and Ronald D. Ormand
(“Optionee”).

     

    R E C I T
A L

     

    The
Corporation wishes to grant Optionee options to purchase 250,000 shares of the
Corporation’s $.01 par value common stock (“Common Stock”) under the
Corporation’s 2006 Stock Incentive Plan (“Plan”), on the terms and subject to
the conditions set forth below.

     

    A G R E E
M E N T

     

    It is
hereby agreed as follows:

     

    1.    GRANT OF
OPTIONS.  The Corporation hereby grants to Optionee, options
(“Options”) to purchase all or any part of 250,000 shares (“Shares”) of the
Corporation’s Common Stock, upon the terms and subject to the conditions set
forth herein.  The Option and the Shares granted and issued pursuant
to this Agreement have been granted and issued under, and are subject to the
terms of, the Plan.  The terms of the Plan are incorporated by
reference in this Agreement in their entirety, and the Optionee, by execution of
this Agreement, acknowledges having received a copy of the Plan.  The
provisions of this Agreement will be interpreted as to be consistent with the
Plan, and any ambiguities in this Agreement will be interpreted by reference to
the Plan.  In the event that any provision of this Agreement is
inconsistent with the terms of the Plan, the terms of the Plan will
prevail.  All capitalized terms not herein defined shall have the
meanings ascribed to them by the Plan.

     

    2.    OPTION
PERIOD.  The Options shall partially vest upon the successful
achievement of each of the hereinafter defined events (“Vesting Event”) on an
individual basis.  Options for each successfully achieved Vesting
Event shall become exercisable at any time during the period commencing on
February 11, 2010 and expiring on February 11, 2020 unless earlier terminated
pursuant to Section 6 of the Agreement or Section 9 of the Plan:

     

    Vesting
Event 1 (covering 50,000 Options) shall occur on February 11, 2011 provided
that; the Optionee is employed by the Corporation as of the close of business on
February 11, 2011.

     

    Vesting
Event 2 (covering 50,000 Options) shall occur on February 11, 2011 provided
that; the Optionee is employed by the Corporation and the Corporation achieves
100,000 BOE of monthly production by February 11, 2011.

     

    Vesting
Event 3 (covering 50,000 Options) shall occur at any time prior to February 11,
2011  provided that; the Optionee is employed by the Corporation and
that the Common Stock of the Corporation has traded at a daily VWAP of $4.50 or
more for 10 consecutive trading days.  The VWAP shall be that as found
in the market data provided by Bloomberg, LP.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Vesting
Event 4 (covering 50,000 Options) shall
occur at any time prior to February 11, 2012 provided that; the Optionee is
employed by the Corporation and that the fully diluted market capitalization of
the Corporation has reached Four Hundred  Million Dollars
($400,000,000) or greater.

     

    Vesting
Event 5 (covering 50,000 Options) shall occur at any time prior to August 31,
2010 provided that; the Optionee is employed by the Corporation and that the
Corporation has successfully drilled, completed, and placed on commercial
production at least two (2) Marcellus Shale wells and at least two (2) Eagle
Ford Shale wells. Successful well as it relates to Marcellus wells means a well
with an IP of at least 2.0 Mmcfe per day and internally estimated reserves of
3.0 Bcfe.  Successful well as it relates to Eagle Ford wells means a
well with an IP of at least 750 Boe per day and internally estimated reserves of
200,000 Boe.  The Compensation and Nominating Committee retains the
authority to toll the deadline for completion herein during the term of any
force majeure event.

     

    Notwithstanding
the foregoing, in the event of a Change in Control of the Company on or after
February 11, 2010, then all Options shall vest and become immediately
exercisable in full and will remain exercisable in accordance with their
terms.

     

    3.    METHOD OF
EXERCISE.  The Options shall be exercisable by Optionee by giving
written notice to the Corporation of the election to purchase and of the number
of Shares Optionee elects to purchase, such notice to be accompanied by such
other executed instruments or documents as may be required by the Corporation
pursuant to this Agreement or the Plan, and unless otherwise directed by the
Corporation, Optionee shall at the time of such exercise tender the purchase
price of the Shares he has elected to purchase.  Optionee may purchase
less than the total number of Shares for which the Option is exercisable,
provided that a partial exercise of an Option may not be for less than One
Hundred (100) Shares.  If Optionee shall not purchase all of the
Shares which he is entitled to purchase under the Options, his right to purchase
the remaining unpurchased Shares shall continue until expiration of the
Options.  The Options shall be exercisable with respect of whole
Shares only, and fractional Share interests shall be disregarded.

     

    4.    AMOUNT OF
PURCHASE PRICE.  The purchase price (“Purchase Price”) per Share for
each Share which Optionee is entitled to purchase under the Options shall be
$2.25 per Share.

     

    5.    PAYMENT OF
PURCHASE PRICE.  Except as the Corporation may allow in accordance
with the Plan, at the time of Optionee’s notice of exercise of the Options,
Optionee shall tender in cash or by certified or bank cashier’s check payable to
the Corporation, the purchase price for all Shares then being
purchased.

     

    6.    EFFECT OF
TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP.  If an Optionee’s
employment or other relationship with the Corporation (or a subsidiary)
terminates, the effect of the termination on the Optionee’s rights to acquire
Shares shall be as set forth in Section 9 of the Plan. 

     

    7.    NONTRANSFERABILITY OF
OPTIONS.  The Options shall not be transferable, either voluntarily or
by operation of law, except as provided in Section 12.3 of the
Plan.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    8.    TIME OF
GRANTING OPTIONS.  The time the Options shall be deemed granted,
sometimes referred to herein as the “date of grant,” shall be February 11,
2010.

     

    9.    PRIVILEGES OF
STOCK OWNERSHIP.  Optionee shall not be entitled to the privileges of
stock ownership as to any Shares not actually issued and delivered to
Optionee.  No Shares shall be purchased upon the exercise of any
Options unless and until, in the opinion of the Corporation’s counsel, any then
applicable requirements of any laws, or governmental or regulatory agencies
having jurisdiction, and of any exchanges upon which the stock of the
Corporation may be listed shall have been fully complied with.

     

    10.    SECURITIES
LAWS COMPLIANCE.  The Corporation will diligently endeavor to comply
with all applicable securities laws before any stock is issued pursuant to the
Options.  Without limiting the generality of the foregoing, the
Corporation may require from the Optionee such investment representation or such
agreement, if any, as counsel for the Corporation may consider necessary in
order to comply with the Securities Act of 1933 as then in effect, and may
require that the Optionee agree that any sale of the Shares will be made only in
such manner as is permitted by the Corporation.  The Corporation may
in its discretion cause the Shares underlying the Options to be registered under
the Securities Act of 1933 as amended by filing a Form S-8 Registration
Statement covering the Options and the Shares underlying the
Options.  Optionee shall take any action reasonably requested by the
Corporation in connection with registration or qualification of the Shares under
federal or state securities laws.

     

    11.    INTENDED
TREATMENT AS NON-STATUTORY STOCK OPTIONS.  The Options granted herein
are intended to be non-statutory stock options described in U.S. Treasury
Regulation (“Treas. Reg.”) §1.83-7 to which Sections 421 and 422 of the
Internal Revenue Code of 1986, as amended from time to time (“Code”) do not
apply, and shall be construed to implement that intent.  If all or any
part of the Options shall not be described in Treas. Reg. §1.83-7 or be subject
to Sections 421 and 422 of the Code, the Options shall nevertheless be
valid and carried into effect.

     

    12.    SHARES
SUBJECT TO LEGEND.  If deemed necessary by the Corporation’s counsel,
all certificates issued to represent Shares purchased upon exercise of the
Options shall bear such appropriate legend conditions as counsel for the
Corporation shall require.

     

    13.    COMPLIANCE
WITH APPLICABLE LAWS.  THE CORPORATION’S OBLIGATION TO ISSUE SHARES OF
ITS COMMON STOCK UPON EXERCISE OF THE OPTIONS IS EXPRESSLY CONDITIONED UPON THE
COMPLETION BY THE CORPORATION OF ANY REGISTRATION OR OTHER QUALIFICATION OF SUCH
SHARES UNDER ANY STATE AND/OR FEDERAL LAW OR RULINGS OR REGULATIONS OF ANY
GOVERNMENTAL REGULATORY BODY, OR THE MAKING OF SUCH INVESTMENT REPRESENTATIONS
OR OTHER REPRESENTATIONS AND UNDERTAKINGS BY THE OPTIONEE OR ANY PERSON ENTITLED
TO EXERCISE THE OPTION IN ORDER TO COMPLY WITH THE REQUIREMENTS OF ANY EXEMPTION
FROM ANY SUCH REGISTRATION OR OTHER QUALIFICATION OF SUCH SHARES WHICH THE
CORPORATION SHALL, IN ITS SOLE DISCRETION, DEEM NECESSARY OR
ADVISABLE.  SUCH REQUIRED REPRESENTATIONS AND UNDERTAKINGS MAY INCLUDE
REPRESENTATIONS AND AGREEMENTS THAT THE OPTIONEE OR ANY PERSON ENTITLED TO
EXERCISE THE OPTION (i) IS NOT PURCHASING SUCH SHARES FOR DISTRIBUTION AND (ii)
AGREES TO HAVE PLACED UPON THE FACE AND REVERSE OF ANY CERTIFICATES A LEGEND
SETTING FORTH ANY REPRESENTATIONS AND UNDERTAKINGS WHICH HAVE BEEN GIVEN TO THE
CORPORATION OR A REFERENCE THERETO.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    14.    NO RIGHTS TO
CONTINUED EMPLOYMENT OR RELATIONSHIP.  Nothing contained in this
Agreement shall obligate the Corporation to employ or have another relationship
with Optionee for any period or interfere in any way with the right of the
Corporation to reduce Optionee’s compensation or to terminate the employment of
or relationship with Optionee at any time.

     

    15.    MISCELLANEOUS.

     

    15.1    Binding
Effect.  This Agreement shall bind and inure to the benefit of the
successors, assigns, transferees, agents, personal representatives, heirs and
legatees of the respective parties.

     

    15.2    Further
Acts.  Each party agrees to perform any further acts and execute and
deliver any documents which may be necessary to carry out the provisions of this
Agreement.

     

    15.3    Amendment.  This
Agreement may be amended at any time by the written agreement of the Corporation
and the Optionee.

     

    15.4    Syntax.  Throughout
this Agreement, whenever the context so requires, the singular shall include the
plural, and the masculine gender shall include the feminine and neuter
genders.  The headings and captions of the various Sections hereof are
for convenience only and they shall not limit, expand or otherwise affect the
construction or interpretation of this Agreement.

     

    15.5    Choice of
Law.  The parties hereby agree that this Agreement has been executed
and delivered in the State of Texas and shall be construed, enforced and
governed by the laws thereof.  This Agreement is in all respects
intended by each party hereto to be deemed and construed to have been jointly
prepared by the parties and the parties hereby expressly agree that any
uncertainty or ambiguity existing herein shall not be interpreted against either
of them.

     

    15.6    Severability.
In the event that any provision of this Agreement shall be held invalid or
unenforceable, such provision shall be severable from, and such invalidity or
unenforceability shall not be construed to have any effect on, the remaining
provisions of this Agreement.

     

    15.7    Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 3:30 p.m. (Houston time)
on  any day except Saturday, Sunday and any day which shall be a
federal legal holiday in the United States (“Business Day”), (b) the next
Business Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number set forth on the signature pages
attached hereto on a day that is not a Business Day or later than 3:30 p.m.
(Houston time) on any Business Day, (c) the 2nd Business Day following the date
of mailing, if sent by U.S. nationally recognized overnight courier service, or
(d) upon actual receipt by the party to whom such notice is required to be
given.  The address for such notices and communications shall be as
set forth on the signature pages attached hereto.  All notices and
demands to Optionee or the Corporation may be given to them at the following
addresses:

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              If
      to Optionee:

            	
              Ronald
      D. Ormand

              11622
      Monica

              Houston,
      Texas 77024

            

    

        

    
      	
               
      

            	
              If
      to Corporation:

            	
              Magnum
      Hunter Resources Corporation

              777
      Post Oak Blvd.

              Suite
      910

              Houston,
      Texas 77056

            

    

    
    

       

    Such
parties may designate in writing from time to time such other place or places
that such notices and demands may be given.

     

    15.8    Entire
Agreement.  This Agreement, as governed by and interpreted in
accordance with the Plan, constitutes the entire agreement between the parties
hereto pertaining to the subject matter hereof, this Agreement supersedes all
prior and contemporaneous agreements and understandings of the parties, and
there are no warranties, representations or other agreements between the parties
in connection with the subject matter hereof except as set forth or referred to
herein.  No supplement, modification or waiver or termination of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby.  No waiver of any of the provisions of this Agreement shall
constitute a waiver of any other provision hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.

     

    15.9    Attorneys’
Fees.  In the event that any party to this Agreement institutes any
action or proceeding, including, but not limited to, litigation or arbitration,
to preserve, to protect or to enforce any right or benefit created by or granted
under this Agreement, the prevailing party in each respective such action or
proceeding shall be entitled, in addition to any and all other relief granted by
a court or other tribunal or body, as may be appropriate, to an award in such
action or proceeding of that sum of money which represents the attorneys’ fees
reasonably incurred by the prevailing party therein in filing or otherwise
instituting and in prosecuting or otherwise pursuing or defending such action or
proceeding, and, additionally, the attorneys’ fees reasonably incurred by such
prevailing party in negotiating any and all matters underlying such action or
proceeding and in preparation for instituting or defending such action or
proceeding.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the parties have entered into this Agreement as of the date
first set forth above.

     

    
          

      
        	 	
                “CORPORATION”

                 

                MAGNUM
      HUNTER RESOURCES CORPORATION,

                a
      Delaware corporation

                 

                By: 
      /s/ Gary C.
      Evans                                                            

                Gary
      C. Evans, Chief Executive Officer

                

                 

                “OPTIONEE”

                 

                
                  /s/ Ronald
      D.
      Ormand                                                             

                  Ronald D. Ormand

                

              

      

       

       

       

      -6-

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