-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BaH0hQA9px7SfC0kiTGUS+/jW3SFB+itwikanL8O8Sr2NOrCggFfiPrAjB0zo1TI lhfm403p7o0TSIwCJbZmMg== 0001068734-98-000028.txt : 19981228 0001068734-98-000028.hdr.sgml : 19981228 ACCESSION NUMBER: 0001068734-98-000028 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981209 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUGGET EXPLORATION INC CENTRAL INDEX KEY: 0000356590 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 830250943 STATE OF INCORPORATION: NV FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-10210 FILM NUMBER: 98774756 BUSINESS ADDRESS: STREET 1: 815 SOUTH DURBIN ST CITY: CASPER STATE: WY ZIP: 82601 BUSINESS PHONE: 3072349151 MAIL ADDRESS: STREET 1: 815 SOUTH DURBIN ST CITY: CASPER STATE: WY ZIP: 82601 8-K 1 FORM 8-K REGARDING REORGANIZATION CURRENT REPORT FOR ISSUERS SUBJECT TO THE 1934 ACT REPORTING REQUIREMENTS FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________________________ CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Event Requiring Report: December 9, 1998 NUGGET EXPLORATION, INC. Nevada 0-10201 83-0250943 (State of (Commission (IRS Employer Incorporation) File Number) Identification #) 815 South Durbin Street, Casper, Wyoming 82601 (Address of Principal Executive Offices) # (307) 234-2895 (Registrant's telephone number, including area code) ITEM 1. Changes in Control of Registrant See Item 2 below. ITEM 2. Acquisition or Disposition of Assets On December 9, 1998, the Company executed a Purchase and Sale Agreement (the "Purchase Agreement") with Imaging Management Associates, Inc. ("Imaging Management"), a Colorado corporation engaged in the business of operating diagnostic imaging centers. Pursuant to the Purchase Agreement, the Company is acquiring two diagnostic imaging centers, one located in Wilmington, Delaware, and the other located in Cherry Hill, New Jersey (the "Imaging Centers"). The transaction was structured as an asset purchase whereby the Company is acquiring all the assets comprising the Imaging Centers and assuming certain liabilities as described in the Purchase Agreement. According to management of the Imaging Centers, the Imaging Centers were founded in 1990, and are both approximately 1,500 square feet in size. Alan Wasserman, M.D. will serve as Medical director of the Delaware Center. Dr. Wasserman is a graduate of the University of Bologna School of Medicine in Italy and has practiced radiology for over twenty years. Dr. Jack Dooley, M.D., who is a graduate of the University of Guadalajara School of Medicine in Mexico, will serve as Medical director of the Cherry Hill Center. The Centers employ a combined total of 12. In exchange for the assets comprising the Centers, the Company will issue Imaging Management 1,250,000 shares of the Company's common stock, $.01 par value. In connection with its acquisition of the Centers, the Company has entered into an Employment Agreement with Dr. Leonard Vernon, the President and controlling shareholder of Imaging Management. Pursuant to the Employment Agreement, Dr. Vernon will serve as President of the Company for a term beginning in December 1998 and ending December 31, 2002. Dr. Vernon will receive compensation of $200,000 per year until December 31,1999 and $300,000 per year from January 1, 2000 until December 31, 2002. Dr. Vernon will also receive an annual cash bonus equal to 1.5% of the amount of the Company's post tax profits over $1,000,000 subject to certain conditions and a car allowance of $500 per month. The Company also granted Dr. Vernon an option to purchase 3,000,000 shares of the Company's common stock, $.01 par value, at a price of $.155 per share. Dr. Vernon has exercised the option and paid the purchase price of $465,000 through issuance of his promissory note for the entire purchase price (the "Note"). The Note will bear interest at a rate of 6% per annum, with interest being payable on a quarterly basis, beginning March 31, 1999. The principal amount of the Note will be due in one payment on December 31, 2002. The Note is a non-recourse Note secured by the 3,000,000 shares of the Company's Common Stock being acquired by Dr. Vernon. Provided that Dr. Vernon is not in default of his obligations under the Note, Dr. Vernon will have full voting rights to the 3,000,000 acquired. The 3,000,000 Shares to be received by Dr. Vernon represent approximately 61% the Company's issued and outstanding Common Stock and accordingly, Dr. Vernon now controls the Company. In addition to the 3,000,000 shares of the Company's common stock issued to Dr. Vernon pursuant to his Employment Agreement, as a shareholder or Imaging Management Dr. Vernon will receive his proportionate share of the Company's common stock issued to Imaging Management pursuant to the Purchase Agreement. The commencement of Dr. Vernon's employment begins upon completion of the acquisition of the Imaging Centers by the Company. The 3,000,000 shares to be issued under the Employment Agreement and the 1,250,000 shares to be issued under the Purchase and Sale Agreement have been authorized and issued by the Company's board of directors and are being held by the Company's board subject to certain conditions. Under the terms of the Purchase and Sale Agreement, the release of the shares is subject to review of the audited financial statements of the Imaging Centers by the Company and a shareholder, Park Street Investments, Inc. While the Company has every reason to believe there will be no irregularities with such audited financial statements, there are no assurances that they will be to the satisfaction of the Company's board of directors or Park Street. To the extent that the audited financial statements of the Imaging Centers are not to the satisfaction of the Company's board of directors, the Employment Agreement and the Purchase and Sale Agreement, including the amount and payment of the consideration, could be modified or potentially rescinded. ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits Financial Statement of Businesses Acquired. Within 60 days of the date of this Report, the Company will file an amendment to this Report containing the balance sheets for the Imaging Centers as of December 31, 1997 and 1998, together with the Imaging Centers' statements of income and cash flow for the periods then ended. Pro Forma Financial Information. Within 60 days of the date of this Report, the Company will file an amendment to this Report containing the pro forma financial information required under Article 11 of Regulation S-X. c. Exhibits. The foregoing exhibits are attached to this report on Form 8-K. Exhibit No. Description 10(a) Purchase and Sale Agreement dated December 9, 1998 between the Company and Imaging Management Associates, Inc. 10(b) Employment Agreement dated December 9, 1998 between Company and Dr. Leonard Vernon. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of l934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NUGGET EXPLORATION, INC. /s/ Tyson Schiff December 22, 1998 By: -------------------------- Tyson Schiff, President EX-10 2 PURCHASE AND SALE AGREEMENT DATED 12/9/98 PURCHASE AND SALE AGREEMENT This Agreement of Purchase and Sale ("Agreement") is made this 30 day of November, 1998 by and between Nugget Exploration, Inc. (the "Purchaser") a Nevada corporation and Imaging Management Associates, Inc. (the "Seller") a Colorado corporation, and provides for the Purchaser to acquire all of the assets of two Imaging centers ("Imaging Center") located in Wilmington DE and Cherry Hill NJ from the Seller, subject to liabilities assumed by Purchaser as described in this Agreement. WHEREAS, Purchaser desires to purchase and Seller desires to sell the Imaging Centers, on the terms and subject to the conditions reflected below. NOW THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties herein contained, Purchaser and Seller hereby agree as follows: ARTICLE I DEFINITIONS As used in this Agreement, the terms identified below in this Article I shall have the meanings indicated, unless a different and common meaning of the term is clearly indicated by the context. Variants and derivatives of the following terms shall have correlative meanings to the extent that certain of the definitions set forth below suggest, indicate, or express agreements between or among parties to this Agreement. The parties to this Agreement agree that agreements, representations, warranties, and covenants expressed in any part or provision of this Agreement shall for all purposes of this Agreement be treated in the same manner as other such agreements, representations, warranties, and covenants contained elsewhere in this Agreement, and the Article or Section of the Agreement within which such an agreement, representation, warranty, or covenant appears shall have no separate meaning or effect on the same. 1.1 Acquired Assets: The assets of the Seller being acquired by the Purchaser pursuant to the terms hereof, as identified on Schedule 2.1 hereto, and all other assets of the Seller, tangible or intangible (including contractual, warranty, and other rights), the use or value of which is inextricably linked to the assets so identified, or which relate to or arise out of transactions of the Seller involving the assets so identified. 1.2 Affiliate: When used with respect to a person, an "affiliate" of that person is a person Controlling, Controlled by, or under common Control with that person. 1.3 Agreement: This Agreement of Purchase and Sale, including all of its schedules and exhibits and all other documents specifically referred to in this Agreement that have been or are to be delivered by a party to this Agreement to another such party in connection with the Transaction (as defined herein) or this Agreement, and including all duly adopted amendments, modifications, and supplements to or of this Agreement and such schedules, exhibits and other documents. 1.4 Assumed Liabilities: The liabilities of the Seller being assumed by the Purchaser pursuant to this Agreement, as specifically identified in Schedule 2.1 to this Agreement, and no other Liabilities of the Seller. 1.5 Audited Financial Statements: The Balance sheet, income statement, statement of stockholders' equity and statement of cash flows or, in each instance, equivalent statements as commonly provided to shareholders of Purchaser. 1.6 Closing: The completion of the Transaction, to take place as described in Article II. 1.7 Closing Date: The date on which the Closing actually occurs, which shall be November 30, 1998, unless otherwise agreed by the parties, but shall not in any event be prior to satisfaction or waiver of the conditions to Closing set forth in Article VIII hereof. 1.8 Closing Time: The time at which Closing actually occurs. All events that are to occur at the Closing Time shall, for all purposes, be deemed to occur simultaneously, except to the extent, if at all, that a specific order of occurrence is otherwise described. 1.9 Consideration: The net sum of $2,500,000 payable by Purchaser to Seller of 1,250,000 shares of the restricted $.001 par value common stock of Purchaser valued at $2.00 per share for the Acquired Assets. 1.10 Exchange Act: The Securities Exchange Act of 1934, as amended to the date as of which any reference thereto is relevant under this Agreement, including any substitute or replacement statue adopted in place or lieu thereof. 1.11 Securities Act: The Securities Act of 1933, as amended to the date as of which any reference thereto is relevant under this Agreement, including and substitute or replacement statue adopted in place or lieu thereof. ARTICLE II THE TRANSACTION 2.1 The Transaction. On the Closing Date, and at the Closing Time, subject in all instances to each of the terms, conditions, provisions and limitations contained in this Agreement, the Seller shall sell, transfer, convey, and assign to the Purchaser, by instruments satisfactory in form and substance to the Purchaser and its counsel, and the Purchaser shall acquire from the Seller, the Acquired Assets, subject to the Assumed Liabilities, and only those Liabilities and no others, in exchange for the Consideration. The Seller represents that the assets included on Exhibit 2.1 hereto are all the assets reasonably necessary for the conduct of the Acquired Assets in the ordinary course in the same manner as that in which such business has been conducted in the immediate past, including, without limitation, all Proprietary Rights of the Seller so used in the ordinary conduct of the Acquired Business and all contract, warranty, and other intangible rights relating to or arising out of such Acquired Business. Neither the Purchaser nor any of its Affiliates is assuming, becoming liable for, agreeing to discharge in any manner, becoming in any way responsible for any of the Liabilities of the Seller other than those expressly identified on Schedule 2.1 and adopted by the Purchaser in this section 2.1. 2.2 Manner of Payment. Payment of the Consideration by the Purchaser shall be made in the form of a stock certificate with a restrictive legend pursuant to rule 144. 2.3 Closing. The Closing hereunder shall take place at the offices of the respective Seller and Purchaser, or at such other place as the Purchaser and the Seller may agree upon, on the Closing Date. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser hereby represents and warrants to the Seller: 3.1 Organization and Qualification. The Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of Nevada, and has the requisite corporate power and authority to enter into and perform this Agreement. True, complete and correct copies of the Purchaser's charter and bylaws, as presently in effect, have been delivered to the Seller and no amendments to them are pending. 3.2 Subsidiaries. Other than the subsidiaries of the Purchaser listed in Schedule 3.2 hereto, the Purchaser has no Subsidiaries. 3.3 Authority Relative to This Agreement. The Purchaser has the requisite corporate power and authority to enter into this agreement and to carry out its obligations hereunder. The Board of Directors of the Purchaser has duly authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized and approved by the requisite level of corporate authority of Purchaser and no other corporate proceedings on the part of the Purchaser are necessary to approve and adopt this Agreement or to approve the consummation of the Transactions contemplated hereby, including delivery of the Consideration. This Agreement has been duly and validly executed and delivered by the Purchaser and constitutes a valid and binding Agreement of the Purchaser, enforceable in accordance with its terms. 3.4 Absence of Breach; No Consents. To the best of Purchaser's knowledge, the execution, delivery and performance of this Agreement, and the performance by Purchaser of its obligations hereunder except for compliance with any regulatory or licensing laws applicable to Purchaser (and to the extent within its control), will be satisfied in all material respects prior to the Closing) and do not, except as disclosed in schedule 3.4, (1) conflict with, and will not result in a breach of, any of the provisions of the Articles of Incorporation or bylaws of Purchaser or of any of its subsidiaries; (2) contravene any law, rule or regulation of any State or Commonwealth or of the United States, or of any applicable foreign jurisdiction, or any order, writ, judgment, injunction, decree, determination, or award affecting or binding upon the Purchaser or any of its Subsidiaries, in such a manner as to provide a basis for enjoining of otherwise preventing consummation of the Transaction; (3) conflict with or result in a material breach of or default under any material indenture or loan or credit Agreement or any other material Agreement or instrument to which Purchaser or any of its subsidiaries is a party, in such a manner as to provide a basis for enjoining or otherwise preventing a consummation of the Transaction; (4) require the authorization, consent approval or license of any third party of such a nature that the failure to obtain the same would provide a basis for enjoining or otherwise preventing consummation of the Transaction. 3.5 Issuance of Purchaser Shares. All of the Purchaser Shares required to be issued by the Purchaser to the Seller, in accordance with the terms and subject to the conditions set forth in this Agreement, shall, upon issuance and delivery, be duly authorized, validly issued, fully paid and non-assessable and free from all liens or contractual restrictions or limitations whatsoever, except as set forth in this Agreement and that such Shares will not have been registered pursuant to the Securities Act and applicable State laws. 3.6 Financial Statement: Books and Records. To the best of the Purchaser's knowledge, the Purchaser Financial Statements (as defined below) fairly present its financial position, business and operation, and are maintained in accordance with reasonable business standards and do not fail to reflect any material activity, charge, expense, income or other action or attribute of the Purchaser. A true and complete copy of the Purchaser's 10-K for year ended May 31, 1998 and for 10-Q for the quarter ended August 31, 1998 have been delivered to the Seller. Such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied and accurately reflect the Purchaser's business, operations, financial results, financial position, expenses, incomes, assets and liabilities and are complete in all material respects as of their respective dates. 3.7 Capitalization. Schedule 3.7 hereto sets forth the Purchaser's authorized, issued and outstanding securities, as well as its outstanding options and securities reserved for issuance. Except as disclosed on Schedule 3.7, the Purchaser is not aware of any voting trusts, voting agreements, proxies or other agreements, instruments or undertakings (whether oral or in writing) with respect to the voting of shares of capital stock of the Purchaser. 3.8 Litigation. Other than as described in Schedule 3.8, there is no claim pending or, to the best knowledge of the Purchaser, threatened against the Purchaser, nor is there any order outstanding against the Purchaser. 3.9 Tax Matters. (a) The Purchaser has filed all tax returns required to be filed with any taxing authority in respect of all relevant taxes and in accordance with all tax sharing agreement to which the Purchaser may be a party and has paid or caused to be paid of the Purchaser except for liens for taxes not yet due and payable. The Purchaser has not executed a waiver of the statue of limitations on the right of the IRS or any other taxing authority to assess additional taxes or to contest the income or loss with respect to any tax return. (b) No audit of the Purchaser's tax returns by any taxing authority is currently pending or to the best of the Purchaser's knowledge threatened, and no issues have been raised by any taxing authority in connection with any tax returns. No material issues have been raised in any examination by any taxing authority with respect to the Purchaser which reasonably could be expected to result in a proposal deficiency for any other period not so examined, and there are no unresolved issues or unpaid deficiencies relating to such examinations. 3.10 Brokers. No Broker, finder, or investment banker is entitled to any brokerage, finders, or other fee or commission in connection with this Agreement or the Transaction or any related transaction based upon any agreement, written or oral, made on behalf of Purchaser or any of its Subsidiaries. ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE SELLER The Seller represents and warrants to the Purchaser as follows: 4.1 Organization and Qualification. The Seller is a corporation duly organized, validly existing, and in good standing under the laws of Colorado and has the requisite corporate power and authority to carry on its business as it is now being conducted. The Seller is duly qualified as a foreign corporation to do business, and is in good standing, in the jurisdiction where the character of the properties owned or leased by it, or the nature of its activities, is such that qualification as a foreign corporation in that Jurisdiction is required by law. 4.2 Authority Relative to This Agreement. This Agreement has been duly and validly executed and delivered by the Seller and constitutes a valid and binding Agreement of the Seller enforceable in accordance with its terms. The seller has all corporate power and requisite corporate power and authority to enter into this Agreement and to carry out the Transaction contemplated hereby, and its doing so has been duly and sufficiently authorized. This Agreement, does not, except as disclosed in Schedule 4.2, (1) conflict with or result in a breach of any of the provisions of the Articles of Incorporation or Bylaws of the Seller or of any of its Subsidiaries; (2) contravene any law, ordinance, rule, or regulation of any State or Commonwealth or political subdivision of either or of the United States (except for compliance with regulatory or licensing laws all of which, to the extent applicable to the Seller. 4.3 Absence of Breach; No Consents. The execution, delivery, and performance of this Agreement and the performance by Seller of its obligations hereunder except for compliance with any regulatory or licensing laws applicable to Seller (and to the extent within its control), does not (1) conflict with, and will not result in a breach of, any of the provisions of the Articles of Incorporation or bylaws of Seller or of any of its subsidiaries; (2) contravene any order, writ, judgment, injunction, decree, determination, or award of any court or other authority having jurisdiction, or cause the suspension or revocation of any authorization, consent, approval, or license, presently in effect, which affects or binds, the Seller or all or any part of the Acquired Business or any material properties of the Acquired Business, except in any such case where such contravention will not have a material adverse effect on the business, condition (financial or otherwise), operations or prospects of the Acquired Business and will not have a material adverse effect on the validity of this Agreement or on the validity of the consummation of the Transaction; (3) conflict with or result in a material breach of or default under any material agreement or instrument to which the Seller or any of part of the Acquired Assets are a party or by which any of the material properties of the Acquired Assets may be affected or bound; (4) other than consents disclosed on the Acquired Assets Disclosure Document, require the Authorization, consent, approval, or license of any third party; or (5) constitute grounds for the loss or suspension of any permits, licenses, or other authorization used with the Acquired Assets. 4.4 Brokers. No Broker, finder, or investment banker is entitled to any brokerage, finders or other fee or commission in connection with this Agreement or the Transaction or any related transaction based upon any agreement, written or oral, made on behalf of Seller or any of its Subsidiaries. The Seller does not have any obligations to pay finder's or broker's fees or commissions in connection with the exercise of options to renew or extend real estate leases to which the Seller is a party. 4.5 Financial Statements. The Seller has heretofore delivered to the Purchaser the Following: Schedule 4.5 consists of the unaudited statement of assets and liabilities arising from cash transactions of the Seller as of December 31, 1997 and the unaudited statement of assets and liabilities arising from cash transactions of the Seller as of October 31, 1998 and the related statements of income and expense arising from cash transactions for the periods then ended (collectively the "Financial Statements"). The Financial Statements fairly represent the financial position of the Seller as at such dates and the results of its operations for the year and period then ended. The Financial Statements were prepared on a cash basis applied on a consistent basis with prior periods. The books of account and other records of the Seller, financial or otherwise, are in all material respects, complete and correct and are maintained in accordance with good business and accounting practices. The Seller hereby agrees to deliver to the Purchaser within 60 days of the date hereof, the audited balance sheet as of December 31,1997 and the unaudited balance sheet of October 31,1998 and the related statements of operations for the year and period then ended (collectively the "Updated Financials"), all fairly reflecting the financial position of the Seller as at such dates and the results of its operations for the year and period then ended. The Updated Financials shall be prepared at the Seller's sole expense. The Financial Statements must be reviewed and accepted to the satisfaction of Purchaser and Park Street Investments, Inc. (a shareholder) prior to release of the Consideration. Taxes. (a) The seller has paid or caused to be paid except as described in Schedule 4.5(a) all federal, state, local, foreign, and other taxes, including without limitations, income taxes, estimated taxes, alternative minimum taxes, exercise taxes, sales taxes, use taxes, value-added taxes, gross receipt taxes, franchise taxes, capital stock taxes, employment taxes and payroll-related taxes, withholding taxes, stamp taxes, transfer taxes, windfall profit taxes, environmental taxes and property taxes, whether or not measured in whole or part by net income, and all deficiencies, or other addition to tax, interest, fines and penalties owned by it (collectively, "Taxes"), required to be paid by it for all periods prior to and through the date hereof, whether disputed or not. (b) The Seller has, in accordance with applicable law filed all federal, state, local and foreign tax returns required to be filed by it through the date hereof, and all these returns correctly and accurately contain the amount of any Taxes relating to the applicable period. A list of all federal, state, local and foreign income tax returns filed with respect to the Seller for taxable periods ended on or after December 31, 1995 is provided in Schedule 4.5(b). For each taxable period the Seller ended on or after December 31, 1995, the Seller has delivered (or will deliver within (60) days of the date hereof) to the Purchaser correct and complete copies of all Federal, state, local and foreign income tax returns, examination reports and statements of deficiencies assessed against or agreed to by the Seller. (c) Neither the IRS nor any other governmental authority is except as described in Schedule 4.5(c) asserting or, to the knowledge of the Seller threatening to assert against the Seller any deficiency or claim for additional Taxes. No claim has ever been made by a authority in a jurisdiction where the Seller does not file reports and returns that the Seller is or may be subject to taxation by that jurisdiction. There are no security interests on any of the assets of the Seller that arose in connection with any failure (or alleged failure) to pay any Taxes. (d) Except as described in Schedule 4.5(d), there has not been any audit of any tax return filed by the Seller, no audit is in progress, and the Seller has not been notified by any tax authority that any audit is contemplated or pending. Except as described in schedule 4.5(d): (I) no extension of time with respect to any date on which a tax return was or is to be filed by the Seller is in force; (ii) no waiver or agreement by the Seller is in force for the extension of time for the assessment or payment of any Taxes; and (iii) no agreement with any taxing authority is in force for an extension of the statue of limitations for an audit. (e) For purpose of this agreement, all references to Sections of the code shall include any predecessor provisions to those Sections and any similar provisions of federal, state, local or foreign law. 4.6 Litigation. Other than as described in Schedule 4.6, there is no claim pending or, to the best knowledge of the Purchaser, threatened against the Seller, nor is there any order outstanding against the Seller. 4.7 Receivables. All outstanding accounts receivables (trade or other) of the Seller shown in the Financial Statements are bona fide, arose in the ordinary course of business at the aggregate amounts thereof and, to the knowledge of the Seller, has no reason to believe that such receivables are not current and collectable in full within __________(___) days of the date hereof. No account is more than ________( ) days overdue, except as disclosed on Schedule 4.7. In addition, except as otherwise set forth on Schedule 4.7, to the knowledge of the Seller, none of such accounts receivable are subject to any stated claim or offset, recoupment, set-off or circumstances giving rise to any such claims against it. No such accounts receivable are contingent upon the performance by the Seller of any obligation or contract and no person or entity has any lien on such receivables, or any part thereto, and no agreement for deduction or discount has been made with respect to any such receivables. 4.8 Insurance. The physical properties and assets of the Seller are insured to the extent disclosed in Schedule 4.8 (including all professional liability insurance policies) and all those insurance policies and arrangements are in full force and effect, all premiums with respect to those policies and arrangements are currently paid, and the Seller is in compliance in all material respects with their terms. That insurance is adequate and customary for the business engaged in by the Seller and is sufficient for compliance by the Seller with all requirements of the law and all agreements and leases to which The Seller is a party. 4.9 Licenses; Permits; Compliance. The Seller posses all licenses and other required governmental or official approvals, permits, consents and authorizations (as listed on Schedule 4.9 attached to this Agreement), the failure of which to posses would, individually or in the aggregate, have a material adverse effect on the business, financial condition, operations, prospects or result of operations of the Seller. The Seller is in compliance with: (i) the terms of all contractual obligations which directly or indirectly affect the Seller; (ii) all laws rulings or other decisions on any governmental or other regulatory authority, court or arbitrator having jurisdiction over the Seller. The Seller has furnished the Purchaser true and correct copies of all correspondence from all governmental authorities asserting that the Seller is not, was not or may not have been in compliance with all applicable laws, rules, regulations, judgments, orders or decrees. Compliance with laws: The Seller has complied in all material respects with all federal, state, county and local laws, ordinances, regulations, inspections, orders, judgments, injunctions, awards or decrees applicable to it or its business which, if not complied with, would materially and aversely affect the business. 4.10 Full Disclosure. No representation or warranty by the Seller in this Agreement or in any document or Schedule to be delivered by it pursuant hereto, and no written statement, certificate or instrument furnished or to be furnished to the Purchaser pursuant hereto or in connection with the negotiation, execution or performance of this Agreement contains or will contain any untrue statement of a material fact or omits or will omit to state any fact necessary to make any statement herein or therein not materially misleading or necessary to a complete and correct presentation of all material aspects of the business of the Seller. There is no fact, development or threatened development (except for general economic conditions affecting business generally) which the Seller has not disclosed to the Purchaser in writing and which materially adversely affects the business of the Seller. ARTICLE V COVENANTS 5.1 Corporate Examinations and Investigations. Prior to the Closing Date, the Purchaser and the Seller shall each be entitled, through their employees and representatives, to make such investigation of the assets, properties, business and operations, books, records and financial condition of the other as they each may reasonably require. Any such investigation and examination shall be conducted at reasonable time and under reasonable circumstances, and each party shall cooperate fully therein. No investigation by a party hereto shall, however, diminish or waive in any way any of the representations, warranties, covenants or agreements of the other party under this agreement. All representations and warranties of Seller have been specifically set forth herein. In order that each party may have the full opportunity to make such business, accounting and legal review, examination or investigation as it may wish of the business and affairs of the other, each party shall furnish the other during such period with all such information and copies of such documents concerning the affairs of it as the other may reasonably request and cooperate fully in connection with such review and examination and to make full disclosure to the other parties all material facts affecting its financial condition and business operations. Following the Closing Date, the Seller shall provide the Purchaser access to records of the Seller as required and on reasonable notice by the requesting party. 5.2 Expenses. Each party hereto agrees to pay its own costs and expenses incurred in negotiating this Agreement and consummating the transactions described herein. 5.3 Further Assurances. The parties shall execute such documents and other papers and take such further action as may be reasonably required to carry out the provisions hereof and the transactions contemplated hereby. Each such party shall use its best efforts to fulfill or obtain the fulfillment of the conditions to the Closing, including, without limitation, the execution and delivery of any documents or other papers, the execution and delivery of which are conditions precedent to the Closing. 5.4 Confidentiality. In the event transactions contemplated by this Agreement are not consummated, the Purchaser and Seller each agree to forever keep confidential any information disclosed to the other in connection therewith; provided, however, such obligation shall not apply to information which (i) at the time of disclosure was public knowledge; (ii) after the time of disclosure becomes public knowledge (except due to the action of the receiving party); (iii) the receiving party had within its possession at the time of disclosure: or (iv) is required to be disclosed by federal securities law or other applicable law. 5.5 Future Employment. Dr. Leonard Vernon agrees to enter into an employment agreement (the "Employment Agreement") with the Purchaser in the form attached hereto as Exhibit 5.5 to serve as the Purchaser's Chief Executive Officer and President. ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO CLOSE The obligation of the Purchaser to enter into and complete the Closing is subject, at the option of the Purchaser, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived by the Purchaser in writing. 6.1 Due Diligence Review. The Purchaser's satisfactory completion of its due diligence review of the Sellers' assets, properties, business and operations, books, records and financial condition. Dr. Vernon and other representatives and employees of the Seller shall be available to assist the Purchaser in conducting its due diligence review. The Purchaser's due diligence review period shall be for no more than forty-five (45) days from the date hereof. 6.2 Representations and Covenants. The representations and warranties of the Seller contained in the Agreement shall be true in all material respects. The Seller shall have performed and complied in all material respects with all covenants and agreement required by this Agreement to be performed or complied with by the Seller on or prior to the Closing Date. 6.3 Governmental Permits and Approvals: corporate Resolutions. Any and all permits and approvals from any governmental or regulatory body required for the lawful consummation of the Closing shall have been obtained. The Seller shall have delivered to the Purchaser resolutions by its Board of Directors certified by the Secretary of the Seller authorizing the transactions contemplated by the Agreement. 6.4 Third Party Consents. All consents, permits and approvals from parties to any contracts, loans agreements or other agreements with the Seller which may be required in connection with the performance of the Seller of its obligations under such contracts or other agreements after the Closing Date shall have been obtained. 6.5 Satisfactory Business Review. The Purchaser shall have in good faith reasonably satisfied itself, after receipt of the documents and schedules of the Seller and after the Purchaser and its representatives have completed the review of the business of the Seller contemplated by this Agreement, that none of the information revealed in, or in the reasonable opinion of the purchaser may result in, a material adverse change in the assets, properties, business, operations or condition (financial or otherwise) of the Seller. 6.6 Litigation. No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the transactions contemplated hereby or to seek damages or a discovery order in connection with such transaction, or which has or may have, in the reasonable opinion of the Seller, a materially adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of the Purchaser. 6.7 No Reverse Split. As a material term hereto and a condition to Purchaser entering into this Agreement, Purchaser and its predecessor(s) agree that for a period of twelve (12) months from the date of Closing, there will be no reverse stock splits without the prior written consent of the existing directors of Purchaser as of the date immediately prior to the Closing of this Agreement. 6.8 Asset Sale and release of certain Liabilities. Seller acknowledges that Purchaser currently owns certain assets which exist at the time of this Agreement and that Purchaser is attempting to sell or transfer such assets to generate proceeds for the purposes of settling certain debts of Purchaser that also exist at the time of this Agreement. Seller, Dr. Vernon and or their assigns will ensure that no party other then Ms. MacGuire and or her designees receive proceeds from such sale or transfer. Seller, Dr. Vernon and or their assigns will further use their best efforts to assist Purchaser with signing additional documents to consummate such sale or transfer as Purchaser reasonably requires. In consideration of this paragraph, Ms. MacGuire represents that upon receipt of proceeds from such sale or transfer Ms. MacGuire will release Purchaser of any and all liabilities owed to Ms. MacGuire that exist at the time of this Agreement. Ms. MacGuire will further use her best efforts to obtain similar releases from Ms. Dee MacQueen and Mr. Robert Jerry Hand. ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATION OF THE SELLER TO CLOSE The obligation of the Seller to enter into and complete the Closing is subject, at the option of the Seller, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived by the Seller in writing. 7.1 Due Diligence Review. The Seller's satisfactory completion of its due diligence review of the Purchasers' assets, properties, business and operations, books, records and financial condition. Ms. MacGuire and other representatives and employees of the Purchaser shall be available to assist the Seller in conducting its due diligence review. The Seller's due diligence review period shall be for no more than forty-five (45) days from the date hereof. 7.2 Representations and Covenants. The representations and warranties of the Purchaser contained in the Agreement shall be true in all material respects. The Purchaser shall have performed and complied in all material respects with all covenants and agreement required by this Agreement to be performed or complied with by the Seller on or prior to the Closing Date. 7.3 Governmental Permits and Approvals: corporate Resolutions. Any and all permits and approvals from any governmental or regulatory body required for the lawful consummation of the Closing shall have been obtained. The Purchaser shall have delivered to the Seller resolutions by its Board of Directors certified by the Secretary of the Purchaser authorizing the transactions contemplated by the Agreement. 7.4 Third Party Consents. All consents, permits and approvals from parties to any contracts, loans agreements or other agreements with the Purchaser which may be required in connection with the performance of the Purchaser of its obligations under such contracts or other agreements after the Closing Date shall have been obtained. 7.5 Satisfactory Business Review. The Seller shall have in good faith reasonably satisfied itself, after receipt of the documents and schedules of the Purchaser and after the Seller and its representatives have completed the review of the business of the Purchaser contemplated by this Agreement, that none of the information revealed in, or in the reasonable opinion of the purchaser may result in, a material adverse change in the assets, properties, business, operations or condition (financial or otherwise) of the Purchaser. 7.6 Litigation. No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the transactions contemplated hereby or to seek damages or a discovery order in connection with such transaction, or which has or may have, in the reasonable opinion of the Purchaser, a materially adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of the Seller. ARTICLE VIII MISCELLANEOUS 8.1 Publicity. Except as required by applicable federal securities law or other law, no publicity release or announcement concerning this Agreement or the transactions contemplated hereby shall be issued by either party at any time from the signing hereof without advance approval in writing of the form and substance thereof by the other party. 8.2 Notices. Any notice or other communication required or which may given hereunder shall be writing by a party or by an attorney to a party and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered, or express mail, postage prepaid, and shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission or if mailed, four (4) days after the date of mailing, as follows: if to the Purchaser Mary MacGuire Nugget Exploration, Inc. 815 Durbin Street Casper, Wyoming 82601 if to Seller Imaging Management Associates, Inc. C/O Dr. Leonard Vernon 2051 Springdale Road Cherry Hill, NJ 08003 Any party may, by notice given in accordance with this Article to the other parties, designate another address or person for receipt of notice hereunder. 8.3 Entire Agreement. This Agreement (including the Exhibits and Scheduled hereto) contain the entire agreement among the parties with respect to the Transaction between Seller and Purchaser and supersede all prior agreements, written or oral, with respect thereto. 8.4 Waivers and Amendments. This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver of any part of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies of any part based upon, arising out of, or otherwise in respect of, any inaccuracy in, or breach of, any representations, warranty, covenant or agreement contained in this Agreement and shall in no way be limited by the fact that the act, omission, occurrence or other state of facts upon which the claim of any inaccuracy or breach is based, may also be the subject matter of any other representation, warranty, covenant or agreement contained in this Agreement (or in any other agreement between the parties) as to which there is no inaccuracy or breach. 8.5 Indemnification. All representations, warranties, covenants and agreements made herein and in the Exhibits attached hereto shall survive the execution and delivery of this Agreement and payment pursuant thereto. Seller hereby agrees, jointly and severally, to indemnify, defend, and hold Purchaser harmless from and against any damage, loss liability, or expense (including, without limitation, reasonable expenses of investigation and reasonable attorney's fees) arising out of any material breach of any representation, warranty, covenant, or agreement made by Seller to Purchaser in this Agreement and Purchaser hereby agrees, jointly and severally, to indemnify, defend, and hold Seller harmless from and against any damage, loss liability, or expense (including, without limitation, reasonable expenses of investigation and reasonable attorney's fees) arising out of any material breach of any representation, warranty, covenant, or agreement made by Purchaser to Seller in this Agreement. 8.6 Governing Law. This Agreement shall be governed and construed solely in accordance with the laws of the State of Nevada. 8.7 No Assignment. This Agreement is not assignable except by operations of Law. 8.8 Exhibits And schedules. The Exhibits and Schedules to this Agreement are a part of this Agreement as if set forth in full herein. 8.9 Headings. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. 8.10 Severability of Provisions. The invalidity or unenforceability of any term, phase, clause, paragraph, restriction, covenant, agreement, or other provision of this Agreement shall in no way affect the validity or enforcement of any other provisions or any part thereof. 8.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed, shall constitute an original copy hereof, but all of which together shall be considered but one and the same document. 8.12 Attorney's Fees and Costs. In connection with any litigation arising out of the Agreement or the parties relationship as contemplated herein, each party shall pay its own attorney's fees and court costs and any and all fees in connection with any appellate proceeding occasioned as a result thereof. 8.13 Gender. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms and the singular form of nouns and pronouns shall include the plural and vice versa. 8.14 Litigation. Venue for any litigation hereunder shall be in the Circuit Court of Baker County, Nevada. 8.15 Construction. This Agreement shall be construed within the fair meaning of each of its terms and not against the party drafting the document. IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first above written. ATTEST: NUGGET EXPLORATION, INC. /s/ Tyson Schiff - --------------------- By:----------------------------- Secretary Tyson Schiff President ATTEST: IMAGING MANAGEMENT ASSOCIATES, INC. /s/ Dr. Leonard Vernon - --------------------- By:----------------------------- Secretary Dr. Leonard Vernon CEO, President SCHEDULES & EXHIBITS 2.1 The Transaction See Schedule 4.5 3.2 Subsidiaries None 3.4 Absence of Breach None 3.7 Capitalization. (1) Authorized Common Stock 5,000,000 (2) Shares Outstanding 97,177 (3) Consultants/Employees 600,000 3.8 Litigation None 4.2 Authority Relative None 4.5 Financial Statements See Attached 4.5(a) Payment of taxes Except for $85,000 in payroll taxes. 4.5(b) Tax returns See Attached 4.5(c) Action to be taken No action has been taken regarding the past due payroll taxes, but has been threatened. 4.5(d) Tax Extension None 4.6 Litigation There is a pending lawsuit from four former partners of the Wilmington DE center in the amount of $80,000, which the Seller believes will be settled without any further legal action. 4.7 Receivables None 4.8 Insurance See Attached 4.9 License, Permits See Attached EXHIBITS 2.1 See Schedule 4.5 5.5 See Attached EX-10 3 EMPLOYMENT AGREEMENT DATED 12/9/98 EMPLOYMENT AGREEMENT This Employment Agreement ("Agreement") is entered into this 30th day of November, 1998 between Nugget Exploration, Inc. ("Company"), a Nevada corporation having an office located at 815 Durbin Street, Casper, Wyoming 82601, and Dr. Leonard Vernon ("Employee:), an individual, residing at 22 Acorn Hill Drive, Voohees, New Jersey 08043. WHEREAS, the Company is contemplating entering into the business of providing medical imaging services; WHEREAS, Employee has skills, contacts and experience in the medical imaging industry that could benefit the Company towards its objectives; WHEREAS the Company and Employee wish to enter into an Employment Agreement pursuant to which Employee will become employed by the Company and appointed as President of the Company. NOW, THEREFORE, in consideration of the respective agreements hereinafter set forth, the parties agree as follows: 1. Employment 1.01 Term. On the Commencement Date as defined herein, the Company shall employ Employee, and Employee hereby accepts employment with Company in the position and with the duties set forth subject to termination in accordance with the provisions of this Agreement. 1.02 Commencement Date. This Agreement shall commence on the date that the Company has acquired, merged or combined with an operating entity in the medical imaging services business. 2. Duties. 2.01 General. Employee shall continue as President of Company and shall perform such executive duties as may from time to time be assigned to him by Company's Board of directors, consistent with the duties associated with those positions. 2.02 Performance. During the term of his employment, Employee shall devote at least 50% of his business time, best efforts and attention to the business, operations and affairs of Company and the performance of his duties hereunder. 2.03 Employee's Representations. Employee represents and warrants to and agrees with Company that: (a) Neither the execution nor performance by Employee of this Agreement is prohibited by or constitutes or will constitute, directly or indirectly, a breach or violation of, or will be adversely affected by, any written or other agreement to which Employee is or has been a party or by which he is bound. (b) Neither Employee nor any business or entity in which he has any interest or from which he receives any payments has, directly or indirectly, any interest of any kind in or is entitled to receive, and neither Employee nor any such business or entity shall accept, from any person, firm, corporation or other entity doing business with company any payments of any kind on account of any services performed by Employee during the term of his employment. 3. Compensation and Related Matters. 3.01 Engagement Compensation. As consideration to induce Employee to enter into this Agreement, and subject to the Commencement date, the Company hereby grants Employee options to purchase 3,000,000 restricted shares of the Company's $.001 par value common stock at an exercise price of $.155 per share payable in cash or notes. The Company has determined this exercise price based on a value equal to 50% of the Company's adjusted share price based on its pre-split price of $.001 per share, which the Company's board of directors authorized on October 7, 1998 to be reverse split 310 to one. The parties have agreed to an option exercise price of half the adjusted market price due to the fact that these shares shall not have been registered with the Securities and Exchange Commission and shall be issued with a restrictive legend and only available for resale under Rule 144 or any other applicable exemption. 3.02 Fixed Salary. As compensation for Employee's services, the Company shall pay Employee a salary (the "Fixed Salary") at the following rates in equal monthly (or more frequent) installments less appropriate payroll deductions as required by law: For the period beginning on the Commencement Date to December 31, 1999 - $200,000 per annum. For the period beginning January 1, 2000 to December 31, 2004 - $300,000 per annum. 3.03 Cash Bonuses. Company shall pay employee a cash bonus the Cash bonus) equal to 1.5% of the amount, if any, by which the Company's Post-Tax Profits over $1 million dollars (as hereinafter defined) for each fiscal year (commencing with the fiscal year ending with December 31, 1998 through and including the fiscal year ending December 31, 2002) exceeds Post-Tax Profits for the Base Year (as hereinafter defined). For purposes of this Agreement, the term "Post-Tax Profits" shall mean Company's Income after Income Taxes and Extraordinary Item(s) set forth in Company's Consolidated Statement of Operations included in Company's Annual Report on Form 10-K. In the event of termination of employment, Employee's right to receive Cash Bonuses shall terminate as of the effective date of such termination, provided, however, Employee shall receive a Cash Bonus, if earned but unpaid, for the last fiscal year ending prior to the effective date of such termination. The Company shall pay Employee such other cash and stock bonuses as are determined by the Board of Directors. 3.04 Expenses. Company shall pay or reimburse Employee for all reasonable travel, hotel, entertainment and other business expenses incurred in the performance of Employee's duties upon submission of appropriate vouchers and other supporting data including a leased vehicle not to exceed $500 per month beginning April 1, 1999. 3.05 Benefits. Employee shall be entitled to (i) receive such benefits as are typically provided to executives holding his position in public corporations of similar size; (ii) participate in all general pension, profit-sharing, life, medical, disability and other insurance and employee benefit plans and programs at any time in effect for executive employees of company, provided, however, that nothing herein shall obligate Company to establish or maintain any employee benefit plan or program, whether of the type referred to in this clause (ii) or otherwise; and (iii) six (6) weeks vacation during each twelve month period of employment at mutually agreeable times. 4. Termination: 4.01 For Cause. Company shall have the right to terminate the employment of Employee hereunder at any time for Cause (as hereinafter defined). For purposes of this Agreement "Cause" shall mean and include the occurrence of any of the following acts or events by or relating to Employee: (1) any material misrepresentation by Employee in this agreement; (2) any material breach of any obligations of Employee under this Agreement which remains uncured for more than thirty (30) days after written notice thereof by the Board of Directors to Employee; (3) habitual insobriety of Employee while performing his duties hereunder, or (4) theft or embezzlement, from the Company; provided, however, if during the term of this Agreement, there shall occur a Change of Control (as hereinafter defined), (A) The Company may not terminate the employment of employee for Cause if Employee's conduct subsequent to such Change of Control is consistent with his conduct prior to such Change of Control or for any act or omission which was known to Company and which occurred prior to such Change of Control and (B) the term "cause" shall be deemed amended so as to delete therefrom the occurrence of the acts or events by or relation to Employee set forth above. In the event of termination for cause, Employee's fixed salary shall terminate as of the effective date of termination of employment. 4.02 Without Cause. Company may not terminate the employment of Employee except for Cause. 4.03 Disability. If Employee, by reason of illness, mental or physical incapacity or other disability, is unable to perform this regular duties hereunder (as may be determined by the Board of Directors), Company shall continue to pay employees salary for the balance of the term of this Agreement, provided, however, in the event Employee recovers from any such illness, mental or physical incapacity or other disability (as may be determined an independent physician to which Employee shall make himself available for examination at the reasonable request of the Board of Directors), Employee shall immediately resume his regular duties hereunder. Any payments to Employee under any disability insurance or plan maintained by Company shall be applied against and shall reduce the amount of the salary payable by Company under this agreement. 4.04 Death. In the event of Employee's death, Company shall continue to pay Employee's Fixed Salary for the balance of the term of this Agreement, provided, however, that, if Company is the beneficiary of life insurance on Employee's life, it shall use the proceeds of such insurance promptly upon receipt thereof to prepay (in inverse order of maturity), the Fixed Salary remaining it be paid discounted to present value using an assumed interest rate of 8% per annum. Company shall have the right (but not the obligation) to obtain a life insurance policy on Employee's life. The proceeds of any such life insurance policy shall be payable to Company. Employee shall cooperate with Company and use his best efforts in all respects in regard to obtaining a life insurance policy, including, without limitation, undergoing a physical examination upon reasonable request. 4.05 Change of Control. If during the term of this Agreement, there shall occur a Change of Control, Employee may terminate his employment hereunder for Good Reason (as hereinafter defined) at any time during the term of this Agreement in which case he shall be entitled to receive a payment equal to 2.99 times Employee's average annual compensation paid by Company (including bonuses, if any) during the three years preceding the date of termination (the Service Payment), provided, however, that such Severance Payment shall be reduced if and only to the extent necessary to avoid the imposition of an excise tax on such Severance Payment under Section 4999 of the Internal Revenue Code of 1986, as amended. The Severance Payment shall be payable to Employee on the date of termination as follows: For purposes of this Agreement, a ("Change of Control") shall be deemed to have occurred on the first day on which a Change of Control, as defined in the Securities Exchange Act of 1934 shall have occurred. For the purposes of this Agreement, "Good Reason" shall mean any of the following (without Employee's express prior written consent): (a) The assignment to Employee by Company of duties inconsistent with Employee's then positions, duties, responsibilities, titles, or offices of any reduction in his duties or responsibilities or any removal of Employee from or any failure to re-elect Employee to any such positions, except in connection with the termination of Employee's employment for Cause, or disability (as described in Section 4.03 herein) or as a result of Employee's death or by termination of employment by Employee other than for Good Reason; (b) A relocation of company's principal executive offices to a location outside of the Southern New Jersey or Northern Delaware area or Company's requiring Employee to be based anywhere other than the location at which Employee on the date hereof performs Employee's duties, except for required travel on Company's business to an extent substantially consistent with Employee's business travel obligations on the date hereof or any adverse change in the office assignment or secretarial and other support accorded to Employee on the date hereof; (c) A failure by company to continue in effect any benefit or compensation plan (including any pension, profit-sharing, bonus, life, medical, disability and other insurance and employee benefit plans and programs) in which Employee with substantially similar benefits or the taking of any actions by Company which would adversely affect Employee's participation in or reduce Employee's benefits under any such plans; (d) The taking of any action by Company which would deprive Employee of any material fringe benefit enjoyed by Employee on the date hereof.; (e) The failure by Company to obtain the specific assumption of this Agreement by any successor or assignee of Company or any person acquiring substantially all of Company's assets. 5. Confidential Information: Non-Competition 5.01 Confidential Information Employee shall not, at any time during or following termination or expiration of the term of this Agreement, directly or indirectly, disclose, publish or appropriate, use or cause permit or induce any person to appropriate or use, any proprietary secret or confidential information of Company not in the public domain including, without limitation, knowledge or information relating to its trade secrets, business methods, the names or requirements of its customers all of which Employee agrees are and will be of great value to Company and shall at all times be kept confidential. Upon termination or expiration of this Agreement, Employee shall promptly deliver or return to Company all materials of a proprietary, secret or confidential nature relating to Company together with any other property of Company which may have therefore been delivered to or may then be in possession of Employee. 5.02 Non-Competition. During the term of this Agreement, Employee shall not, within a ten (10) mile radius of Company's corporate offices or imaging centers which Company owns and/or manages, without the prior written consent of Company in each instance, directly or indirectly, in any manner or capacity, whether for himself or any other person and whether as proprietor, principal owner shareholder, partner, investor, director, officer, employee representative, distributor, consultant, independent contractor or otherwise engage or have any interest in any entity which is engaged in any business or activity then conducted or engaged in by Company, provided, however, that the foregoing shall not be deemed to prohibit Employee from engaging in the practice of chiropractic, or on any other business permitted under this agreement. Notwithstanding the foregoing, however Employee may at any time own in the aggregate as a passive but not active investment nor more than 5% of the stock or other equity interest of any publicly-traded entity which engages in a business competitive with the Company. 5.03 Reasonableness. Employee agrees that each of the provisions of this section 5 is reasonable and necessary for the protection of Company; that each such provision is and is intended to be divisible; that if any such provision (including any sentence, clause or part) shall be contrary to law or invalid or unenforceable in any respect in any jurisdiction, or as to any one or more period of time, areas of business activities, or any part thereof, the remaining provisions shall not be affected but shall remain in full force and effect as to the other remaining parts; and that any invalid or unenforceable provision ,shall be deemed without further action on the part of the parties hereto, modified, amended ad limited to the extent necessary to render the same valid and enforceable in such jurisdiction. Employee further recognizes and agrees that any violation of any of his agreements in this Section 5 would cause such damage or injury to company as would be irreparable and the exact amount of which would be impossible to ascertain and that, for such reason, among others, Company shall be entitled, as a matter of course, to injunctive relief from any court of competent jurisdiction restraining any further violation. Such right to injunctive relief shall be cumulative and in addition to, and not in limitation of, all other rights and remedies which Company may possess. 5.04 Survival The provisions if this section 5 shall survive the expiration or termination of this Agreement for any reason. 6. Miscellaneous. 6.01 Notices. All notices under this Agreement shall be in writing and shall be deemed to have been dully given if personally delivered against receipt or if mailed by first class registered or certified mail; return receipt requested, addressed to Company and to Employee at their respective addresses set forth in the first page of this Agreement, or to such other person or address as may be designated by like notice hereunder. Any such notice shall be deemed to have been given on the day delivered, if personally delivered, or on the third day after the date or mailing if mailed. 6.02 Parties in Interest. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors and, in the case of Company, assigns, but no other person shall acquire or have any rights under or by virtue of this Agreement, and the obligations of Employee under this Agreement may not be assigned or delegated. 6.03 Governing Law Severability. This Agreement shall be governed by and construed and enforced in accordance with the laws and decisions of the State of Delaware applicable to contracts made and to be performed therein without giving effect to the principals of conflict of laws. In addition to the provisions of 5.03 above, the invalidity or unenforceability of any other provision of this Agreement, or the application thereof to any balance of this Agreement, which shall remain in full force and effect, or the application thereof to other persons and circumstances. 6.04 Entire Agreement; Modification; Interpretation. This Agreement contains the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior negotiations and oral understandings, if any. Neither this Agreement nor any of its provisions may be modified, amended waived, discharged or terminated, in whole or in part, except in writing signed by the party to be charged. No waiver of any such provisions, or any breach of or default under this Agreement shall be deemed or shall constitute a waiver of any other provision breach or default. All pronouns and words used in this Agreement shall be read in the appropriate number and gender, the masculine, feminine and neuter shall be interchangeably and the singular shall include the plural and vice versa, as the circumstances may require. 6.05 Indemnification. Employee shall indemnify and hold Company free and harmless from and against and shall reimburse it for any and all claims, liabilities, damages, losses, judgments, costs and expenses (including reasonable counsel fees and other reasonable out-of-pocket expenses) arising out of or resulting from any breach or default of any of his representations, warranties and agreements in this Agreement. Company shall indemnify and hold Employee free and harmless from and against and shall reimburse him for any and all claims, liabilities, damages, losses, judgments, costs and expenses (including reasonable counsel fees and other reasonable out-of-pocket expenses) arising out of or resulting from any breach or default of any of its representations, warranties and agreements in this Agreement. IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written. By: Dr. Leonard Vernon, D.C. /s/ Dr. Leonard Vernon ______________________________ Nugget Exploration, Inc. By: Tyson Schiff /s/ Tyson Schiff ______________________________ -----END PRIVACY-ENHANCED MESSAGE-----